WEBVTT - Russia Strike, Walmart Earnings 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.240 --> 0:00:12.119 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:12.200 --> 0:00:14.920 weekdays at ten am Eastern on Apple car Playing and 0:00:15.040 --> 0:00:17.919 broud Otto with the Bloomberg Business app. Listen on demand 0:00:17.960 --> 0:00:22.280 wherever you get your podcasts, or watch us live on YouTube. 0:00:23.760 --> 0:00:28.640 Geopolitical News front End Center again. Today, the Ukraine carries 0:00:28.680 --> 0:00:33.040 out first strike with US missiles in Russia, you know, 0:00:33.080 --> 0:00:34.519 and then we had some rudder coming out of the 0:00:34.760 --> 0:00:38.080 Russian Foreign Minister down at the G twenty Mark really 0:00:38.120 --> 0:00:38.840 spooky markets. 0:00:38.840 --> 0:00:39.800 Mark Champion joins us. 0:00:39.800 --> 0:00:42.920 He's a calmnist for Bloomberg Opinion. He's located in London 0:00:43.000 --> 0:00:46.640 and he is one of our resident experts on geopolitics, 0:00:46.680 --> 0:00:49.400 particularly in that part of the world. Here, Mark, it 0:00:49.479 --> 0:00:52.120 just feels like, you know, today was not a good 0:00:52.159 --> 0:00:54.360 day for the folks that were looking to try to 0:00:54.400 --> 0:00:57.880 move towards a resolution there in Ukraine. What's your latest 0:00:57.960 --> 0:00:59.520 view on what's happening in that part of the world. 0:01:01.360 --> 0:01:04.680 Yeah, I mean, you know what we the kind of 0:01:04.760 --> 0:01:08.200 trajectory we have is that the Ukrainians are very much 0:01:08.240 --> 0:01:10.880 on the back foot in on the battlefield, and at 0:01:10.880 --> 0:01:14.480 the moment they have been for some months. You know, 0:01:14.520 --> 0:01:16.680 obviously you have a new US president coming in who 0:01:16.680 --> 0:01:19.920 says he wants to end it all in a day. 0:01:19.959 --> 0:01:23.400 But you know, the question is at this point, you know, 0:01:23.480 --> 0:01:28.440 everybody is agreed, including Voladimir's Zelenski, that the you know, 0:01:28.480 --> 0:01:33.120 this needs to come to an end next year. You know, 0:01:33.160 --> 0:01:36.360 the question is which day? Uh? And you know which 0:01:36.440 --> 0:01:39.440 end of the year. And you know, how do you 0:01:39.520 --> 0:01:44.319 get President put into the negotiating tables as you know, 0:01:44.360 --> 0:01:49.720 opposed to just offering to accept Ukraine surrender, you know, 0:01:50.160 --> 0:01:53.360 in the current circumstance or what the Ukrainians want to do, 0:01:53.560 --> 0:01:56.360 what the Biden administration seems to be, you know, trying 0:01:56.400 --> 0:01:59.400 to help it to do is to change the facts 0:01:59.400 --> 0:02:01.640 on the ground such that you know Putin will have 0:02:01.720 --> 0:02:04.280 some incentive to actually negotiate. 0:02:04.800 --> 0:02:07.440 Well, I was gonna say, who has the upper hand 0:02:07.560 --> 0:02:08.600 at this moment. 0:02:09.639 --> 0:02:12.880 Well, there's no question the Russians do. They're moving, you know, 0:02:12.960 --> 0:02:16.520 every day, they're moving forward along the front lines, and 0:02:16.560 --> 0:02:18.560 it's it's not a collapse. It's not a kind of 0:02:18.600 --> 0:02:23.160 sudden you know, end of days. But you know, there's 0:02:23.200 --> 0:02:26.600 there's no doubt about you know, which side has the 0:02:26.639 --> 0:02:29.680 initiative at the moment. You know, that has kind of 0:02:29.680 --> 0:02:32.000 flipped from one side to the other, you know, throughout 0:02:32.040 --> 0:02:34.840 the war, and it could flip again. But at the moment, 0:02:34.919 --> 0:02:40.600 the Ukrainians simply lack the number of personnel the manpower 0:02:41.040 --> 0:02:45.560 to do it. They were late with the mobilization and 0:02:45.600 --> 0:02:49.200 they are in a pretty bad state. So what they're 0:02:49.240 --> 0:02:53.200 asking for is different ways of helping them so that 0:02:53.240 --> 0:02:57.200 they can stabilize the line, perhaps even change the momentum 0:02:57.360 --> 0:03:02.080 a little bit, and then importantly strike behind the Russian 0:03:02.120 --> 0:03:06.240 lines to increase the cost of continuation for President Putin 0:03:06.320 --> 0:03:09.320 so that he actually has a reason to say, Okay, i'll. 0:03:09.160 --> 0:03:13.440 Talk between now and inauguration day. It seems like a 0:03:13.520 --> 0:03:16.200 day at a time period where each side will be 0:03:16.240 --> 0:03:19.800 trying to just improve their position, with the understanding that 0:03:20.200 --> 0:03:22.440 it looks like, whether we want or not, we're going 0:03:22.480 --> 0:03:23.760 to the negotiating table. 0:03:24.280 --> 0:03:27.639 Is that kind of the view, Yeah, I think that's 0:03:27.680 --> 0:03:30.760 exactly what's going to happen. And you know, that's the 0:03:30.840 --> 0:03:34.040 context in which to say, to look at the sort 0:03:34.040 --> 0:03:37.520 of Russian sabers rattling again on the nuclear issue at 0:03:37.560 --> 0:03:41.200 the moment, I mean, the reasons for not pushing the 0:03:41.280 --> 0:03:44.800 nuclear button have not changed, and there are real hurdles 0:03:44.840 --> 0:03:48.560 and costs involved in doing so. And you know President 0:03:48.600 --> 0:03:52.279 Putin didn't do that when Russia was losing on the battlefield, 0:03:52.320 --> 0:03:54.400 and he's very unlikely to do it when they're winning. 0:03:55.360 --> 0:03:58.440 But it does tell you that he's trying to shape 0:03:59.360 --> 0:04:03.320 what the the US in particular does between now and 0:04:03.440 --> 0:04:07.160 next year. And this is one tool which he has 0:04:07.200 --> 0:04:10.640 to do it. He has others, and you know, yes, 0:04:10.680 --> 0:04:14.200 absolutely both sides will be trying to maximize their position 0:04:14.360 --> 0:04:16.880 for when they actually have to make some kind of deal. 0:04:17.400 --> 0:04:20.520 And does that deal is that contingent on say President 0:04:20.560 --> 0:04:23.560 Trump or you think, regardless of who's in the White House, 0:04:23.600 --> 0:04:24.480 this is the way it was going. 0:04:26.520 --> 0:04:29.920 It was. It's going to probably get there faster because 0:04:30.520 --> 0:04:33.039 of the arrival of Donald Trump, but yes, that's where 0:04:33.040 --> 0:04:35.920 it was going. You you know, Zolenski, if you look 0:04:35.920 --> 0:04:40.440 at Zelenski's victory plan, which you know is often miss construed, 0:04:40.480 --> 0:04:43.200 if you actually read it, you know he's got a 0:04:43.200 --> 0:04:45.800 five point plan there. None of them talk about territory. 0:04:45.880 --> 0:04:47.800 None of them say we have to get crimea back 0:04:47.960 --> 0:04:50.039 or we have to get this back, or that it's 0:04:50.080 --> 0:04:52.600 four points which are just about security. How do we 0:04:52.680 --> 0:04:56.080 secure Ukraine to make sure that when we agree to 0:04:56.080 --> 0:05:00.200 a cease fire it's just not a little interlude for 0:05:01.080 --> 0:05:03.960 the Russians attack again. And then a final one which 0:05:04.000 --> 0:05:06.320 is a sort of you know, just a bid to 0:05:06.920 --> 0:05:09.960 interest Donald Trump in particular, but you know the West 0:05:10.000 --> 0:05:14.080 in general in what they can get out of helping 0:05:14.160 --> 0:05:15.880 Ukraine in terms of resources and so on. 0:05:17.120 --> 0:05:18.800 All right, Mark Champion, thank you so much. We really 0:05:18.839 --> 0:05:21.679 appreciate getting your thoughts there. Mark Champion, he's a calmness 0:05:21.680 --> 0:05:25.080 for Bloomberg Opinion, joining us from London via zoom giving 0:05:25.160 --> 0:05:29.200 us the latest thoughts on Ukraine. Again, the thinking now 0:05:29.279 --> 0:05:31.240 is perhaps in twenty twenty five that might be a 0:05:31.279 --> 0:05:34.240 period for some type of truth to come to that 0:05:34.279 --> 0:05:35.960 part of the world. We'll have more reporting on that. 0:05:37.560 --> 0:05:41.440 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:05:41.520 --> 0:05:44.039 weekdays at ten am Eastern on Apple. 0:05:43.800 --> 0:05:46.600 Car Play and Androight Outo with the Bloomberg Business. 0:05:46.960 --> 0:05:49.800 You can also listen live on Amazon Alexa from our 0:05:49.800 --> 0:05:54.200 flagship New York station Just Say Alexa, playing Bloomberg eleven thirty. 0:05:55.560 --> 0:05:58.440 This is Bloomberg Intelligence Radio. We are broadcasting to live 0:05:58.480 --> 0:06:02.039 from our interactive Brooker studio right here in midtown Manhattan, 0:06:02.320 --> 0:06:04.800 and we want to know what would you like to 0:06:04.839 --> 0:06:07.520 hear about on Bloomberg Radio. This helps make shows like 0:06:07.520 --> 0:06:10.640 ours even better. By taking our Bloomberg Audience survey, visit 0:06:10.680 --> 0:06:13.440 YouTube dot com slash Bloomberg podcast and click the link 0:06:13.480 --> 0:06:15.920 in our profile or community section to take the survey, 0:06:16.120 --> 0:06:18.840 which is hosted by our partners material Fill it out 0:06:18.839 --> 0:06:22.279 now at YouTube dot com slash Bloomberg Podcasts. All right, 0:06:22.320 --> 0:06:23.880 let's get back to the market here. So we may 0:06:23.880 --> 0:06:27.280 have some geopolitical risk shaking in the market, but if 0:06:27.279 --> 0:06:28.880 you take a look at some of the equities, like 0:06:28.920 --> 0:06:31.960 a Walmart still holding up fairly well, that stock now 0:06:31.960 --> 0:06:34.320 are on the highs of the session, up almost five percent. 0:06:34.800 --> 0:06:37.000 Joining us how to discuss as Emily Cohne and Bloomberg 0:06:37.040 --> 0:06:39.680 Consumer team leader, I mean, she heads all the stuff 0:06:39.760 --> 0:06:42.400 of consumer stocks. She joins us now in studio. Emily, 0:06:42.440 --> 0:06:43.320 wonderful to see you. 0:06:43.560 --> 0:06:44.159 Thanks, Alich. 0:06:45.000 --> 0:06:48.040 What do we make about the reaction to Walmart stock? 0:06:48.080 --> 0:06:51.359 Because consensus was already high, the stock had already moved 0:06:51.400 --> 0:06:52.839 like we kind of knew it was going to be good. 0:06:53.800 --> 0:06:56.640 So when you think about Walmart Walmart is a bellweather 0:06:56.720 --> 0:06:59.080 of the American economy, of the American consumer. 0:06:59.160 --> 0:07:01.400 What is Walmart? Or tell us about that. 0:07:02.520 --> 0:07:07.359 Walmart beat expectations today sent a really strong signal that 0:07:07.440 --> 0:07:10.960 the holiday season is off to a solid start, and 0:07:11.000 --> 0:07:12.520 the market was excited about that. 0:07:13.600 --> 0:07:15.000 The growth in the number. 0:07:14.800 --> 0:07:18.960 Of transactions or checkouts slowed, the growth rate slowed a 0:07:18.960 --> 0:07:23.240 little bit. Ticket the average ticket, the amount people were 0:07:23.280 --> 0:07:27.360 paying in each checkout, was up, and a lot of 0:07:27.360 --> 0:07:30.880 that growth was coming from higher income shoppers, people in 0:07:30.920 --> 0:07:33.680 households making more than one hundred thousand dollars a year. 0:07:34.000 --> 0:07:37.040 That cohort made up roughly seventy five percent of the 0:07:37.120 --> 0:07:37.880 share gains. 0:07:39.200 --> 0:07:41.200 So this was good. It was a solid start to 0:07:41.680 --> 0:07:43.000 the holiday. 0:07:42.600 --> 0:07:47.520 Season, and the stock is up a lot. Four and 0:07:47.520 --> 0:07:50.000 a half percent is up a lot for a company. 0:07:49.600 --> 0:07:53.160 That Big stopstocks at all time high of sixty seven 0:07:53.160 --> 0:07:56.400 percent year today, which I had no idea their e 0:07:56.440 --> 0:07:58.760 commerce business. Talk to us about their e commerce business. 0:07:58.880 --> 0:08:02.080 I know it's big, but Amazon's pretty big too, So 0:08:02.400 --> 0:08:04.520 how did they talk about their e commerce business? 0:08:04.520 --> 0:08:06.360 When they talk about e commerce, they just talk about 0:08:06.400 --> 0:08:09.840 the potential to grow. It is big, but there is 0:08:09.880 --> 0:08:13.600 still so much room to grow. So just in the 0:08:13.640 --> 0:08:16.240 last couple of months, we saw them branching into categories 0:08:16.280 --> 0:08:20.400 that you wouldn't find in a typical Walmart store. Pre 0:08:20.520 --> 0:08:25.120 owned watches, collectible sneakers, stuff you would typically go to 0:08:25.160 --> 0:08:30.200 another retailer for, but now you can buy at Walmart online. Also, 0:08:30.240 --> 0:08:33.040 they're adding benefits to their services, like Walmart Plus. You 0:08:33.040 --> 0:08:35.360 can now get discounts of Burger King if you're a 0:08:35.360 --> 0:08:39.240 Walmart Plus member. So they're really expanding their offering there. 0:08:39.840 --> 0:08:45.640 Deliveries can get faster, and they see just endless potential there. 0:08:45.880 --> 0:08:46.960 It's always growing. 0:08:47.240 --> 0:08:49.640 My question I had before the break was those people 0:08:49.720 --> 0:08:52.800 that make over one hundred thousand dollars or more, are 0:08:52.800 --> 0:08:56.719 they sticky as in, once the economy save recovers or 0:08:56.760 --> 0:08:59.120 once they feel better about inflation or et cetera, do 0:08:59.200 --> 0:09:01.480 they flee than to go to Target or somewhere else, 0:09:01.600 --> 0:09:03.200 or go to the fancy drug store or do they 0:09:03.200 --> 0:09:03.960 stay at Walmart. 0:09:04.080 --> 0:09:06.040 I think that's a really good question and something we're 0:09:06.080 --> 0:09:10.440 definitely watching for. You know, spending across the board at 0:09:10.480 --> 0:09:13.880 Walmart was consistent. The growth, as you said, was coming 0:09:13.880 --> 0:09:16.920 from these wealthier households. Maybe it's a shopper who typically 0:09:16.960 --> 0:09:20.319 shops at Whole Foods, but is feeling particularly pinched right 0:09:20.360 --> 0:09:22.640 now and is going to Walmart for value? Do those 0:09:22.679 --> 0:09:24.920 people stick around when they get a raise in their 0:09:24.960 --> 0:09:28.120 next paycheck or their paycheck in the next couple of quarters. 0:09:28.640 --> 0:09:31.600 That's something we're definitely watching for. I think it does 0:09:31.640 --> 0:09:32.840 have limits. 0:09:33.640 --> 0:09:37.679 So are they still opening stores? Isn't there Walmart pretty 0:09:37.720 --> 0:09:39.480 much in every town USA these days? 0:09:39.800 --> 0:09:40.600 It's a good question. 0:09:41.000 --> 0:09:43.000 I think, like when they talk about growth now, they're 0:09:43.040 --> 0:09:46.199 talking about e commerce growth. I think that's where they 0:09:46.240 --> 0:09:50.840 see the highest potential for growth, and they needed to 0:09:50.880 --> 0:09:54.520 get profitable. That's something we heard the CEO talk about today. 0:09:55.240 --> 0:09:56.959 Not that they're racing to it, but it's a long 0:09:57.040 --> 0:09:59.079 term game they want their e commerce division to. 0:10:00.880 --> 0:10:03.560 So they feel them pretty okay about a holiday shopping 0:10:03.600 --> 0:10:04.440 season because. 0:10:04.360 --> 0:10:08.840 Yeah, holiday, right, Yeah, holiday shopping is off to a 0:10:08.880 --> 0:10:11.400 strong start. So the interesting thing about the holiday season 0:10:11.440 --> 0:10:12.640 this year is that it's. 0:10:12.480 --> 0:10:15.360 Shorter than in most years. 0:10:15.360 --> 0:10:19.839 Thanksgiving is following later in the month of November. So 0:10:19.920 --> 0:10:23.360 the answer to that is that they triggered the deals 0:10:23.400 --> 0:10:25.400 even earlier than than usual. 0:10:26.679 --> 0:10:28.960 Coming in to Paul Knows and I shop on the sales, 0:10:29.320 --> 0:10:31.600 let's go to Low's because that is interesting as well. 0:10:31.679 --> 0:10:33.440 That stock is off the loads of the session, but 0:10:33.440 --> 0:10:36.040 still down over three percent. What did Lo say? 0:10:36.880 --> 0:10:40.360 So? Lowe's years fell before the bell and quarterly comps 0:10:40.360 --> 0:10:47.000 were better than expected but still declining. So high interest 0:10:47.080 --> 0:10:50.400 weight rates and a week housing market means people are 0:10:50.640 --> 0:10:53.640 moving less than they were before. It means they're spending 0:10:53.720 --> 0:10:59.840 less on big ticket home renovations. But despite blooming gloomy, 0:11:00.640 --> 0:11:03.920 Lowe's actually raised its forecast for the year, seeing positive 0:11:03.960 --> 0:11:10.280 growth in its professional business so selling goods to contractors 0:11:10.280 --> 0:11:14.080 and builders, also in e commerce, and spending on smaller. 0:11:13.760 --> 0:11:16.640 Ticket outdoor projects. Last week we. 0:11:16.600 --> 0:11:21.800 Saw Home Depot similarly say that the weather was actually 0:11:21.840 --> 0:11:25.240 a bright spot for its sales. So hurricane led to 0:11:25.320 --> 0:11:28.600 higher sales for Home Depot. Warm weather meant that people 0:11:28.640 --> 0:11:32.600 were spending more on grills because the Great Grilling Season 0:11:32.679 --> 0:11:33.559 was getting longer. 0:11:34.559 --> 0:11:38.080 So in general, for these loes, Home Depot. 0:11:39.440 --> 0:11:41.800 Sales are down, but the outlook got a little bit 0:11:41.800 --> 0:11:42.520 better this quarter. 0:11:43.280 --> 0:11:46.720 Where do we see the weakness in the consumers like 0:11:46.760 --> 0:11:48.880 in the dollar stores? Because I mean I can I 0:11:48.880 --> 0:11:53.280 see a strong number from Walmart to me that is America? 0:11:53.400 --> 0:11:56.199 So where is the American consumer hurting, is it? I 0:11:56.240 --> 0:11:57.800 guess it's even a lower end than. 0:11:57.679 --> 0:12:01.079 Wal Yeah, the lower end is definitelyfering. The dollar stores 0:12:01.120 --> 0:12:05.920 are suffering. They don't offer the variety that Walmart offers. 0:12:06.040 --> 0:12:09.600 Walmart sixty percent of Walmart's business today is in groceries 0:12:09.880 --> 0:12:13.640 and you can go, wow, uh, you know some pretty 0:12:13.720 --> 0:12:17.199 good stuff at Walmart these days, gluten free items and 0:12:18.240 --> 0:12:21.000 organic produce and stuff that like you're not going to 0:12:21.120 --> 0:12:25.000 necessarily find out your dollar store. And that's really really 0:12:25.040 --> 0:12:27.080 helping them, especially when it comes to growing an e 0:12:27.080 --> 0:12:29.839 commerce business where people are looking for a one stop 0:12:29.840 --> 0:12:30.840 shop for everything. 0:12:31.040 --> 0:12:33.120 So before I let you I have a gluten free friend. 0:12:33.600 --> 0:12:34.520 And it's a good job. 0:12:34.640 --> 0:12:35.079 It's a thing. 0:12:35.240 --> 0:12:35.880 It is a thing. 0:12:36.760 --> 0:12:38.640 I have multiple friends. 0:12:39.360 --> 0:12:41.880 I didn't know it was. Oh I've been educated. 0:12:41.960 --> 0:12:43.360 You've been educated for that one friend. 0:12:43.720 --> 0:12:44.320 Before I let you go. 0:12:44.320 --> 0:12:46.439 We get a lot of retailers out this week as well. 0:12:46.480 --> 0:12:48.640 What are you going to be focusing on? The consumer trends? Land? 0:12:49.200 --> 0:12:53.400 Definitely the holiday season? What are people seeing that's the 0:12:53.400 --> 0:12:57.200 big question this year. Are people spending as much as 0:12:57.200 --> 0:12:59.760 they usually spend? Are they buying as many gifts as 0:12:59.800 --> 0:13:04.960 a usually by also Thanksgiving for the grocers. I think 0:13:05.000 --> 0:13:07.199 a lot of people are just worn out from paying 0:13:07.280 --> 0:13:09.360 really high prices for food. 0:13:09.600 --> 0:13:13.280 They're also worn out from. 0:13:12.000 --> 0:13:14.000 Cooking a lot more than they have been since they're 0:13:14.000 --> 0:13:17.079 eating out less. So how is that showing up in 0:13:18.160 --> 0:13:22.319 consumer sales? Definitely trying to get a sense of how 0:13:22.320 --> 0:13:25.719 the consumer is feeling about what is the most significant 0:13:25.960 --> 0:13:27.200 shopping season of the year. 0:13:27.400 --> 0:13:28.960 I know my husband's getting a little burnt by all 0:13:28.960 --> 0:13:31.680 the cooking he's doing. I'm really good at ordering takeout. 0:13:32.240 --> 0:13:34.920 He's the chef in the family. All Right, thanks so much, 0:13:34.920 --> 0:13:36.800 it's really I really appreciate it. It was wonderful to have 0:13:36.880 --> 0:13:40.000 you at Emily Cohen joining us. She has consumer trends 0:13:40.040 --> 0:13:41.960 coverage for Bloomberg News. 0:13:43.480 --> 0:13:47.360 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:13:47.440 --> 0:13:50.080 weekdays at ten am Eastern on Apple card Play and 0:13:50.080 --> 0:13:53.160 Android Auto with the Bloomberg Business app. Listen on demand 0:13:53.200 --> 0:13:58.040 wherever you get your podcasts, or watch us live on YouTube. 0:13:58.640 --> 0:14:00.240 All right, taking a look at the markets again. Get 0:14:00.240 --> 0:14:03.240 the smp is down by about four tens of one 0:14:03.280 --> 0:14:05.520 percent of the nasdag off just slightly. What do you 0:14:05.520 --> 0:14:07.040 do in the market when there is a slight safe 0:14:07.040 --> 0:14:09.360 haven bit. I say slight because we've definitely backed off 0:14:09.559 --> 0:14:11.840 some of the levels that we've seen earlier in the session. 0:14:11.920 --> 0:14:15.880 Chris Walling is CEO and chief market strategist along View Economics, 0:14:15.880 --> 0:14:19.440 and he's here in studio to discuss his latest calls. Chris, 0:14:19.520 --> 0:14:21.920 we're getting all the twenty twenty five calls out now. 0:14:22.080 --> 0:14:25.800 Everyone's looking pretty bullish. But the bear case and then 0:14:25.840 --> 0:14:28.360 the bull case seems to be super wide. What are 0:14:28.400 --> 0:14:29.640 you guys modeling right now? 0:14:30.440 --> 0:14:32.320 Well, I think what's really interesting is what we're seeing 0:14:32.360 --> 0:14:34.400 in terms of the global economy next year. When you 0:14:34.440 --> 0:14:36.280 sort of whip around the world, you look at China, 0:14:36.320 --> 0:14:38.440 you look at Europe, the UK, and the States. Obviously 0:14:38.480 --> 0:14:41.640 with this new government, there's all sorts of stimulus coming. 0:14:41.760 --> 0:14:43.800 I mean, if you look at a raft of ninety 0:14:43.840 --> 0:14:46.320 central banks around the world, the vast majority of them 0:14:46.320 --> 0:14:49.000 the cutting, and they're in cutting very few raising weights. 0:14:49.200 --> 0:14:52.120 That's normally a very good environment for equity markets. So 0:14:52.320 --> 0:14:55.160 tons of stimulus lots coming. Yes, there's a lot to 0:14:55.200 --> 0:14:57.040 worry about. That's why you get those wide ranges on 0:14:57.080 --> 0:14:59.680 those forecasts. There's a lot of left to fail with 0:14:59.720 --> 0:15:02.040 the new administration, and one's got to think about those 0:15:02.120 --> 0:15:05.880 tariffs and the like, and appointments still to come, so 0:15:06.240 --> 0:15:08.080 one doesn't really know how that's going to play out. 0:15:08.120 --> 0:15:12.240 But I generally think that the thrust is good, and bizarrely, 0:15:12.320 --> 0:15:14.600 we could actually absent those risks. We could actually have 0:15:14.640 --> 0:15:17.360 a year where volatility falls and sort of got you 0:15:17.360 --> 0:15:21.560 remember twenty thirteen or twenty seventeen. Volatility collapses because everyone's 0:15:21.600 --> 0:15:24.640 cutting rates. There's a lot of equality around, so I 0:15:24.640 --> 0:15:25.720 can't get my l's out there. 0:15:27.560 --> 0:15:33.080 So in that kind of environment, long stocks, my long credit. 0:15:34.480 --> 0:15:35.720 How do you think they play it here? 0:15:36.000 --> 0:15:39.680 Well, I think your long equities and your long bonds. Bizarrely, 0:15:39.840 --> 0:15:43.600 I think our government bonds are oversold. And actually, I mean, 0:15:43.640 --> 0:15:46.800 I know the data is distorted today, but housing's just struggling. 0:15:47.040 --> 0:15:47.200 You know. 0:15:47.240 --> 0:15:49.240 They're parts of the US economy that need lower rates 0:15:49.240 --> 0:15:51.920 to get it going. And the fiscal impulse is dying 0:15:51.920 --> 0:15:53.880 as we go into next year, and we'll have to 0:15:53.880 --> 0:15:56.240 wait until you get another fiscal package, and we don't 0:15:56.280 --> 0:15:58.000 know what the size of it will be. So I 0:15:58.000 --> 0:16:00.360 think long stocks and long bonds, and I want you 0:16:00.400 --> 0:16:02.880 want to play the cyclical parts of the market, which 0:16:02.920 --> 0:16:05.359 I think you know, when you get that cyclical week acceleration, 0:16:05.480 --> 0:16:08.680 it's that's a great place to put money. So Mag's 0:16:08.680 --> 0:16:11.720 seven dominance is slowly dying in my opinion. But then 0:16:11.720 --> 0:16:11.960 on the. 0:16:11.880 --> 0:16:14.040 Flip side, you'll say, I'll hear things like, yeah, but 0:16:14.120 --> 0:16:16.640 retail sale are holding up, the job market's still holding up, 0:16:16.720 --> 0:16:18.720 inflation stills holding up, So maybe we're not going to 0:16:18.760 --> 0:16:20.880 get the kind of rad cutting cycle that we might expect. 0:16:21.960 --> 0:16:24.280 Well, yes, yes, and no. I mean inflation, in my 0:16:24.320 --> 0:16:26.800 opinion is dying. I mean that this was a classic 0:16:26.880 --> 0:16:28.880 monetary surge of inflation. People like to compare it to 0:16:28.880 --> 0:16:32.200 the seventies, but they're much better comparisons going further back. 0:16:32.600 --> 0:16:34.920 We're m two surgees and then two collapses, and that's 0:16:34.960 --> 0:16:37.440 really what we've had. And that's the kind of inflation 0:16:37.720 --> 0:16:40.160 outcome we're going to get where inflation is going to dissipate. 0:16:40.240 --> 0:16:42.720 So that'll encourage the fete, I think, to do a 0:16:42.800 --> 0:16:44.200 little bit more than people expect. 0:16:45.120 --> 0:16:48.680 The event tomorrow, presumably just on the earnings front, will 0:16:48.680 --> 0:16:49.880 be in video after the close. 0:16:50.000 --> 0:16:50.760 I was like, what event. 0:16:50.960 --> 0:16:52.240 Yes, Yeah, we've kind of got it. 0:16:52.800 --> 0:16:54.680 We've been talking about it since, you know, earning season began, 0:16:54.800 --> 0:16:58.240 you know, four or five weeks ago. How important is 0:16:58.280 --> 0:17:01.160 zach is? It seemed like for twenty twenty three, for 0:17:01.360 --> 0:17:03.880 most off not all of this year, the AI trade 0:17:03.880 --> 0:17:05.639 has been powering this market. 0:17:05.680 --> 0:17:07.320 It feels like maybe it's fading a little bit. But 0:17:07.359 --> 0:17:09.720 how important is in video tomorrow? You well, in video 0:17:09.760 --> 0:17:12.760 is important, but it is only one stock. I mean, 0:17:12.760 --> 0:17:15.119 it doesn't feel like only one stock. If it feels 0:17:15.160 --> 0:17:17.960 like the whole market, but it's only one stock. And 0:17:18.000 --> 0:17:20.160 really the MAG seven has become the sort of MAG 0:17:20.240 --> 0:17:23.160 one or two, So there's a limit to how much 0:17:23.520 --> 0:17:25.840 the market can be paid high by a couple of stocks. 0:17:25.840 --> 0:17:27.320 And I think that's the point. And the other thing 0:17:27.320 --> 0:17:29.720 about in video is, you know, the second duvetive of 0:17:29.760 --> 0:17:33.040 earning's growth is slowing, So it's kind of when stocks 0:17:33.080 --> 0:17:35.560 like that, you need the first two to be fast, 0:17:36.080 --> 0:17:39.200 and that's now slowing. I wonder if margins are topye, 0:17:39.280 --> 0:17:41.879 So you know, I think MAG seven as a whole 0:17:42.000 --> 0:17:45.640 is topy on margins, and video of course is exciting, 0:17:45.680 --> 0:17:47.479 but I don't think it has the influence it had 0:17:47.560 --> 0:17:48.040 last year. 0:17:48.480 --> 0:17:50.200 So based on that, and then you talk about the 0:17:50.240 --> 0:17:53.120 rate cutting cycle really being front and foremost and sort 0:17:53.119 --> 0:17:55.320 of how you view the market. Is that an ex 0:17:55.520 --> 0:17:59.720 US equity situation or is that a US and or is. 0:17:59.680 --> 0:18:00.800 That just US? 0:18:01.280 --> 0:18:04.680 So I think it's it's a global cyclical trade, which 0:18:04.720 --> 0:18:07.600 and of course the large gap US is dominated by 0:18:07.640 --> 0:18:09.800 mag seven, So I think what we'll find is they've 0:18:09.800 --> 0:18:12.359 become a source of funds to buy into cyclical parts 0:18:12.359 --> 0:18:14.719 of the global stock market. So in the US mid 0:18:14.800 --> 0:18:17.119 and small caps, some of the cyclical areas of the market, 0:18:17.160 --> 0:18:21.679 for sure, people talk about financials tick. But outside the US, 0:18:21.680 --> 0:18:24.160 tons of stuff, you know, there's so much cheap stuff 0:18:24.200 --> 0:18:27.560 that cyclical we're going into sort of nominal GDP growth. 0:18:27.600 --> 0:18:29.120 This is all good for those parts of the world. 0:18:29.160 --> 0:18:32.760 We like the UK. We like Spain. Bizarrely sort of 0:18:32.800 --> 0:18:34.520 no one's talked about Spain for a long long time 0:18:35.240 --> 0:18:37.840 because Spain's spent fifteen years getting his house in order, 0:18:38.119 --> 0:18:40.520 and Germany's the sick man of Europe, which means rates 0:18:40.520 --> 0:18:42.080 are lower in Europe and the otherwise would be in 0:18:42.080 --> 0:18:44.719 Spain gets cheap money. So it's a lovely little combo. 0:18:46.080 --> 0:18:49.200 And Spain's doing really well this year. There's four out 0:18:49.200 --> 0:18:51.399 of fifty countries in the world that are a more 0:18:51.400 --> 0:18:53.760 than fifty cent discount of the US, and they're only 0:18:53.760 --> 0:18:56.560 scor faster over the last few years. Places like that 0:18:56.600 --> 0:18:59.280 are going to do really, really well. Greece is one 0:18:59.280 --> 0:19:00.760 of them. I mean, who talks about Greeen. 0:19:00.840 --> 0:19:03.920 Nobody, Nobody sunys about green That's amazing. That's on equity side. 0:19:03.920 --> 0:19:05.679 So for spanding, Greece is on the equity side, not 0:19:05.720 --> 0:19:06.240 the bond side. 0:19:06.359 --> 0:19:09.159 That's all. The equity side absolutely bonds, you know, I 0:19:09.200 --> 0:19:13.600 mean fine, US bond's great, exactly. 0:19:13.640 --> 0:19:16.040 All right, So you woke up two weeks ago in 0:19:16.080 --> 0:19:19.359 London South the Americans elect themselves in your president. We 0:19:19.400 --> 0:19:21.040 now know that how the Congress is going to look like. 0:19:21.040 --> 0:19:23.959 Did that change your view at all about how to invest? 0:19:24.320 --> 0:19:27.880 Well? At the margin? Potentially you get a bit more 0:19:27.880 --> 0:19:30.520 fiscal and a bit less sort of consumption growth out 0:19:30.520 --> 0:19:32.000 of the States, So there's a bit of a risk 0:19:32.000 --> 0:19:34.720 at that, but actually made me feel more bullish, you know. 0:19:34.840 --> 0:19:37.479 I'm I'm a political, I'm a bridge so I don't 0:19:37.280 --> 0:19:40.920 have nothing to do with me. But looking at it objectively, 0:19:41.240 --> 0:19:43.880 it seems much more pro growth with the with the 0:19:44.000 --> 0:19:47.000 with the exception of the tariff's risk basically, So yeah, 0:19:47.080 --> 0:19:49.560 maybe more bullish cyclcal stuff, but. 0:19:49.560 --> 0:19:51.680 I guess what it does matter is the fiscal side 0:19:51.720 --> 0:19:53.960