Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. All right, we are
Speaker 1: smack dev in the middle of earnings, particularly tech earnings.
Speaker 1: Had some monster names last night, Apple, Google, Microsoft. Today
Speaker 1: we've got Facebook after the close and some really strong numbers.
Speaker 1: Um let's check in with Man Deep, seeing he possibly
Speaker 1: is the most overeducated tech analysts on Wall Street. He's
Speaker 1: a tech anast for Bloomberg Intelligence. Um Man Deep the
Speaker 1: story last night, I looked at the Google numbers and
Speaker 1: this is an alphabet free studio here, we're all about Google.
Speaker 1: I don't care how much they paid for the consultants
Speaker 1: to come up with the alphabet name. UM Google to
Speaker 1: some monster numbers on the top line digital advertising. I
Speaker 1: guess that kind of follows up with what we saw
Speaker 1: from snap in Twitter. But that's the story. It seems like,
Speaker 1: right digital advertising is just on fire. It did and
Speaker 1: I think the real standout for me was YouTube. So
Speaker 1: if you look at the YouTube print growth, I get
Speaker 1: it the comps were easier, but the magnitude of the
Speaker 1: beat really stood out. And I think what it goes
Speaker 1: to show if you compare YouTube to Netflix and Spotify,
Speaker 1: Netflix and Spotify both had a deceleration and subscriber growth.
Speaker 1: YouTube ad growth is growing, and it's growing in proportion
Speaker 1: to the time spent on their platform. So because people
Speaker 1: are spending more time on YouTube, it's translating into more
Speaker 1: ad dollars. And then there's a pricing Kaleman, because every
Speaker 1: small business is advertising on a YouTube. So why are
Speaker 1: I've noticed that I spend a heck of a lot
Speaker 1: more time on YouTube? And for me, the reason is
Speaker 1: that they've just got the algorithm right. When I'm watching
Speaker 1: a video, I'll go there, how to change a clutch
Speaker 1: on a nineteen seventy two BMW or and then but
Speaker 1: then they pop up SNL videos on my you know,
Speaker 1: having nothing to do with changing a clutch, but that
Speaker 1: I want to see, so I start clicking through them,
Speaker 1: you know, so they know what I want even when
Speaker 1: I'm not searching for it. Well, so that's where the
Speaker 1: AI element comes into play. They keep emphasizing how critical
Speaker 1: AI is to search YouTube and it really, I mean,
Speaker 1: there is nobody out there who can compete with YouTube
Speaker 1: just in terms of, you know, bringing all the content
Speaker 1: together that you want to watch. And I think that's
Speaker 1: what's translating into add dollars. We did some numbers. So
Speaker 1: if you look at you know, Netflix are poo, that's
Speaker 1: like a average revenue per user. It's like, at best
Speaker 1: seventeen dollars per user. Guess what in case of YouTube
Speaker 1: or Facebook for that matter, that are poo. In case
Speaker 1: of Facebook, it's around two hundred dollars in North America.
Speaker 1: In case of YouTube, it's close to fifty dollars. And
Speaker 1: that just goes to show it. AD model is much
Speaker 1: better when it comes to monetizing. The user based subscription
Speaker 1: kind of puts the ceiling in terms of how well
Speaker 1: you can monetize, but not in case of ads. It's
Speaker 1: Facebook has a two R poo yes in North America,
Speaker 1: and you're gonna see it in the results tonight. All right, So,
Speaker 1: just finishing up on YouTube, I'm putting my investment banker
Speaker 1: hat on. I'm making a phone call out to the
Speaker 1: folks there and saying, let's spin this thing out. You're
Speaker 1: gonna get a monster multiple on this thing. Is there
Speaker 1: any scenario where they spin out YouTube? I mean, if
Speaker 1: the regulatory landscape, you know, gets the better of them
Speaker 1: in terms of splitting the other than that, they're not.
Speaker 1: They're not. There's not much to talk about that because
Speaker 1: but I would argue if they spin it out, it
Speaker 1: will be a market cap that's equal to the market
Speaker 1: cap of Spotify and Netflix combined at least. See, that's
Speaker 1: all I think, Mad. You gotta create value, you gotta
Speaker 1: gotta generate those feast all right, Well that's why you
Speaker 1: were the banker, you know. I just think about what
Speaker 1: videos I want to watch on YouTube now? And you
Speaker 1: know why others are you know how others are losing ground?
Speaker 1: For example, why isn't Netflix stepping up to meet the challenge?
Speaker 1: Why isn't you know, Hulu or what do you watch?
Speaker 1: You watch the Disney Plus thing, right, Mandalorian, I just
Speaker 1: watched sports. Yeah, there's not a great sports you know
Speaker 1: in Europe we have does Zone, D A Z and
Speaker 1: I don't know what you have here, but that covers
Speaker 1: all Europe. PSP plus is kind of getting there. So
Speaker 1: so in terms of tech earnings, well, in terms of
Speaker 1: all earnings. Man Deep we were talking earlier on the
Speaker 1: program a D eight point five percent of companies that
Speaker 1: have reported so far have beaten the streets estimates. And
Speaker 1: if you look at what was the chart I was
Speaker 1: pulling up earlier, I'll find it in one second. But
Speaker 1: it's it's unbelievable. How more every year, more and more
Speaker 1: um companies beat the streets estimates. So it looks like
Speaker 1: the Street just isn't doing a very good job estimating earnings.
Speaker 1: And it's not like they getting it wrong on both sides, right,
Speaker 1: it's asymmetric. They're always forecasting too little revenue and too
Speaker 1: little earnings. Why do you think that is? I mean
Speaker 1: the secular trends that we are seeing out there, you know, cloud, online, advertising, online,
Speaker 1: you're logged in? Are you logged in over there? No?
Speaker 1: He's not Okay. I just want to say the chart is.
Speaker 1: I keep telling people because for listeners that have a
Speaker 1: terminal in front of them, to me, this is shocking.
Speaker 1: It goes back to the nineties, g hashtag, b TV.
Speaker 1: Back then, only fifty percent of companies were beating In
Speaker 1: the two thousand odds we're beating in the last ten years.
Speaker 1: You know, it's climbed higher and higher. Now almost everyone's beating.
Speaker 1: Why can't analysts get it right? Like I said, these
Speaker 1: trends are very powerful, you know, the online advertising trend, cloud,
Speaker 1: online streaming. No one really expected the change to happen
Speaker 1: this quickly. E commerce. Everyone talks about how we have
Speaker 1: pulled forward five years worth of e commerce penetration in
Speaker 1: one year because of the pandemic. So that is the
Speaker 1: reason Facebook. After the close tonight, are we gonna be
Speaker 1: blown away what we're looking for? Yes? I I think
Speaker 1: the nature of the beat will be somewhat different. This
Speaker 1: will be more of an ad pricing beat as opposed
Speaker 1: to a YouTube which was really ad impressions because of
Speaker 1: the time spent way more than what people expected. So
Speaker 1: in this in Facebook's case, it's going to be driven
Speaker 1: by ad pricing because advertisers see value in advertising on Facebook.
Speaker 1: Is there anything sweet happening on the peripherals when you
Speaker 1: look at Google at the moon shots, any of those
Speaker 1: doing well? Where you look at Facebook, like Libra is
Speaker 1: that's going to start to take off? So Facebook has
Speaker 1: pivoted to their own payments now they launched Facebook pay
Speaker 1: not no connection to Libra, and that's where you're gonna
Speaker 1: see that transition that it will be e commerce within
Speaker 1: the app and that's where the payments will come into.
Speaker 1: Still blockchain based or is it no? No, it's just
Speaker 1: any other payments like or uh, you know, behind the
Speaker 1: scenes they're using PayPal. But it's very similar in concept
Speaker 1: to Venmo. What's the disappointed? What's their chat thing again?
Speaker 1: What's their chat service? What's happened? Dude? What's everybody in
Speaker 1: the world? America uses What's App? That and Russia don't
Speaker 1: use What's App? Are we going to monetize What'sapp yet? Yes,
Speaker 1: they are looking to make it more enterprise oriented. There
Speaker 1: are businesses that are exclusively using What'sapp to communicate with
Speaker 1: their customers. So, but I think the monetization will still
Speaker 1: be slow. If you compare the other businesses for end
Speaker 1: encryption Instagram. Instagram will be another blowout when it comes
Speaker 1: to Facebook. I g Insta, what do you call it?
Speaker 1: I use Insta you know a lot. But What's App
Speaker 1: is like the way I communicate with everybody. And the
Speaker 1: interesting thing is, although it's end to end encryption, if
Speaker 1: I start what's apping you about Arames Ties. I'm gonna
Speaker 1: start getting ads in my feet for after That's the
Speaker 1: way they do it, all right. Mendep Singh, a senior
Speaker 1: tech analyst for Bloomberg Intelligence, giving us his thoughts on
Speaker 1: all these tech stuff again Facebook after the close expected
Speaker 1: to be another blowout quarter. Let's get over to uh
Speaker 1: Jeffrey Cleveland right now, Chief Economy is of Payton and Regal,
Speaker 1: talking to us about what to expect from the Fed today. Jeff,
Speaker 1: We've had a lot of guests say, um, probably not
Speaker 1: a big change in policy. But will j Powell have
Speaker 1: to justify continuing to um spend a hundred twenty billion
Speaker 1: dollars a month in his asset to purchase program? You
Speaker 1: had no change in policy, but yeah, I think he's
Speaker 1: gonna get grilled, probably the assembled masses there on some
Speaker 1: important questions. You know, for me, probably the most important
Speaker 1: question is this whole substantial further progress? And and have
Speaker 1: we made substantial further progress? The classic these I love
Speaker 1: these phrases. It keeps me employed Fed watchers. But you know,
Speaker 1: if you look, we like to look at employment to
Speaker 1: population four year olds. We on that ratio or that
Speaker 1: on percentage. We were seventies six three back in December
Speaker 1: when the Fed started saying they wanted to see substantial
Speaker 1: further progress. It's now climbed, I guess crawled back to
Speaker 1: seventies seven point two um for comparison that that that
Speaker 1: percentage was eight point five before COVID, So I don't
Speaker 1: know if that counts. In my mind, that doesn't count
Speaker 1: a substantial further progress, But I'm curious what Chair Powell
Speaker 1: has to say. So that would be the I guess
Speaker 1: if I was the reporter, that's the first thing I
Speaker 1: would ask to get an update on that, and then
Speaker 1: forward that question to Michael McKean, Yeah, please do. And
Speaker 1: then I suppose after that, I want I would want
Speaker 1: to see what the different disagreements are, you know, kind
Speaker 1: of kind of tease that out. What are what are?
Speaker 1: And I think maybe one for me would be, you know,
Speaker 1: why continuing to buy the mortgage backed securities given how
Speaker 1: far we are into the recovery and the fact that
Speaker 1: the housing market is, I mean, it's on fire for
Speaker 1: for lack of a better term, So I don't know
Speaker 1: if that is necessary at this point. So I guess
Speaker 1: that would be if you put me in charge, I
Speaker 1: might cut back or curtail those purchases before I curtailed
Speaker 1: the treasury purchases. So questions around that I think would
Speaker 1: be interesting to bring up at the press conference. So, Jeffrey,
Speaker 1: when tapering begins, what's it gonna look like? How is
Speaker 1: there going to be a big signaling event? Is that
Speaker 1: what I'm is that why I'm going to go out
Speaker 1: to Jackson Hole if in fact I do go out
Speaker 1: to Jackson Hole in August. I think, you know, tapering
Speaker 1: was so interested last interesting last cycle because it had
Speaker 1: such a huge impact on the fixed income markets. But
Speaker 1: bond traders jumped to the conclusion that if the FED
Speaker 1: was tapering, that they were going to soon high rates.
Speaker 1: That's why we saw such volatility in the spring and
Speaker 1: summer of this time around. I don't know, I feel
Speaker 1: like it should be far less interesting. The Fed has
Speaker 1: done a pretty good job of trying to disconnect the
Speaker 1: two decisions, the tapering decision from the rate high decision.
Speaker 1: There they're two distinct things. So it shouldn't have it
Speaker 1: shouldn't have the impact. It shouldn't be the signal for
Speaker 1: for overnight rate that it played last cycle. So I
Speaker 1: don't know, maybe we're just looking for something to talk about,
Speaker 1: and that's what we're talking so much about taper. It
Speaker 1: will be more of a non event this time around.
Speaker 1: That's kind of my gut instinct here. Um, you know,
Speaker 1: I'm looking at real yields here, and uh, we're seeing
Speaker 1: yesterday we saw a tickdown to negative one hundred fifteen
Speaker 1: basis points, and I want, I'm starting to wonder, um,
Speaker 1: no longer why but um, if this is just part
Speaker 1: of the government strategy to I don't know, monetize debt
Speaker 1: to somehow inflate its way out of the situation that
Speaker 1: we've got ourselves into. That's historically what we do, right. Yeah.
Speaker 1: I mean, I think what's happening here is that you
Speaker 1: you had a huge surgeon inflation expectations in the springtime,
Speaker 1: and that really peeked out in in the March and
Speaker 1: April period sort of like by the rumor or sell
Speaker 1: the news kind of we got some strong inflationary means
Speaker 1: and now but I think by and large, the market
Speaker 1: is bought into this idea that the inflation we're seeing
Speaker 1: is going to be somewhat transitory, and you're seeing that
Speaker 1: work is way through the markets. So I think that's
Speaker 1: you know, really what's going on as far as the
Speaker 1: bigger plot beyond the scenes, I I don't know. I mean,
Speaker 1: I guess in general it benefits the market to keep sorry,
Speaker 1: the government to keep right slow. Um, you know, the
Speaker 1: effective interest on on the dead burden is quite low.
Speaker 1: But I don't know if there's a grand strategy. Well
Speaker 1: you know what made me think of it? And this
Speaker 1: is weird. Um, even I know this is weird. I've
Speaker 1: been reading a book, um called Cannibalism. Oh, it's it's
Speaker 1: a great book. I highly recommend people pick it up. Um,
Speaker 1: it's totally has nothing to do with economics. But the
Speaker 1: guy the author quotes um Friedrich Hyak, who says, I
Speaker 1: did not think it's an exaggeration to say history is
Speaker 1: largely a history of inflation, usually inflations engineered by governments
Speaker 1: for the gain of governments. Now clearly this is a
Speaker 1: very Austrian thing to say, obviously, but it just made
Speaker 1: me think. You know, um, we're we keep asking why
Speaker 1: yields are so low, but maybe this is just a
Speaker 1: way to um, you know, get out of the debt
Speaker 1: that we've had to spend, had to borrow U to
Speaker 1: fight COVID. Yeah, I think you know high is correct.
Speaker 1: You know, history tells you the story of of inflations
Speaker 1: and government inflations and and in wartime the role of
Speaker 1: central banks. So I think that's that's important historically. I
Speaker 1: think right now, though, why are rates low? We have
Speaker 1: a huge amount of demand for fixed income security relative
Speaker 1: to supply. Part of the reason for that is that
Speaker 1: the FED has taken a big chunk of the supply
Speaker 1: off off the table. That's why we're talking about taper.
Speaker 1: They've been purchasing under in twenty billion a month, so
Speaker 1: they've taken on supply. If they were to taper, you know,
Speaker 1: I would put more securities back in the market. But
Speaker 1: I I still think the overwhelming story here is not
Speaker 1: so much a central bank or government conspiracy. It's just
Speaker 1: this mundane supply and demand. All right, Jeffrey, thank you
Speaker 1: so much for joining us. Jeffre Cleveland, chief econress for
Speaker 1: paid in regal. Well, we've got a big i PO
Speaker 1: coming up, particularly for retail investors that are Reddit investors
Speaker 1: or meme investors that have been just really having an
Speaker 1: outsize impact on markets over the past several quarters. UM
Speaker 1: talking about Robin Hood Annie Massa, she's an investing reporter
Speaker 1: for Bloomberg News. She joins us here, any, we've got
Speaker 1: this robin Hood ip I think it's pricing tomorrow. What's
Speaker 1: the latest here on this I p O. That's right,
Speaker 1: Its chairs will begin trading tomorrow publicly. And one of
Speaker 1: the biggest things that we're watching and thinking about is
Speaker 1: that robin Hood says that this is one of the
Speaker 1: largest allocations to retail investors in an I p O. Ever,
Speaker 1: it's setting aside up to about thirty five percent of
Speaker 1: its shares for investors on its own platform for robin
Speaker 1: Hood app users, and they get access to the pre
Speaker 1: i p O shares um, which is unusual in uh
Speaker 1: an I p O process. So it's trying to show
Speaker 1: that it's opening up this piece of the I p
Speaker 1: O process to regular investors. What kind of pops have
Speaker 1: we been seeing this year, Annie, and what's expected for tomorrow.
Speaker 1: You know, there have been moments in history when it
Speaker 1: was in vogue to have, you know, a doubling of
Speaker 1: the stock on the first day, and there have been
Speaker 1: times when UM companies have said that's leaving way too
Speaker 1: much money on the table. That is one of the
Speaker 1: definite kind of cushion pull type situations with an I
Speaker 1: p O. I mean, any company is usually looking for
Speaker 1: that nice like price pop above cent or so in
Speaker 1: an I p O in most cases, but that question
Speaker 1: of whether you're leaving money on the table in the
Speaker 1: process is an important one, And Robin Hood has the
Speaker 1: additional pressure of having such a large slice relatively speaking
Speaker 1: of this i p O being allocated to retail investors.
Speaker 1: So in an ideal world, you can see how they
Speaker 1: might want to see that big pop in price so
Speaker 1: that they can show how they've created value for those retails.
Speaker 1: But you're saying is basically the sweet spot. That's where
Speaker 1: people think you're not going too far, that you've lost
Speaker 1: a lot of um potential capital. But you also have
Speaker 1: the what do they what do they call that? The hype?
Speaker 1: The hype that you that you want for your IPO.
Speaker 1: The hype factor is definitely something you want with And
Speaker 1: I'm not the it's not to me to exactly decide
Speaker 1: where they would want to be, but they certainly want
Speaker 1: to see the price rise having allocated so much onto
Speaker 1: IPO to their own customers, and either's to me at
Speaker 1: least a fair amount of regulatory risk to this company
Speaker 1: to this deal. The whole payment for order flow was
Speaker 1: an issue, um that I think is going to get
Speaker 1: a lot of regulatory uh scrutiny here. Um just you know,
Speaker 1: kind of meme stock trading in general getting some SEC scrutiny.
Speaker 1: How's the market kind of thinking about some of the risk,
Speaker 1: the regulatory risk for this company in this IPO. In
Speaker 1: the wind up to this i p O, there have
Speaker 1: definitely been multiple regulatory inquides that have come to light,
Speaker 1: some of them still ongoing. Just this week we found
Speaker 1: out about two new inquiries from regulators, One having to
Speaker 1: do with the fact that the chief executive officer and
Speaker 1: chief creative officer, the two co founders of robin Hood,
Speaker 1: are not registered with FINRA, so Finner has been asking
Speaker 1: some questions around that. And then separately, FINNRA and the
Speaker 1: SEC have been asking about employee trades ahead of that
Speaker 1: game stop those was that break on game stop trading
Speaker 1: that robin Hood put into place in late January. So
Speaker 1: those are two new lines of examination that we just
Speaker 1: found out about this week. Of course, that adds to
Speaker 1: other spines of sixty million dollar fine from the SEC
Speaker 1: and a seventy almost seven million dollar fine from FINRA
Speaker 1: that we knew about and that have been settled already.
Speaker 1: So those issues are piling up for robin Hood, and uh,
Speaker 1: they'll certainly be something that investors will be looking at
Speaker 1: as the company becomes public. What just got thirty seconds here?
Speaker 1: What time can we reasonably expect Hood to start trading tomorrow?
Speaker 1: We'll have to watch for it tomorrow, but it won't
Speaker 1: be right, you know, right at nine thirty. Necessarily you'd
Speaker 1: have to wait a little bit later in the day
Speaker 1: for those shares to begin trading. That's what I figured, alright,
Speaker 1: and so long these days, we used to get them
Speaker 1: done ten ten, ten thirty if it was if it
Speaker 1: was a hot deal, hard to kind of price. But
Speaker 1: if it was just a running the mill, we'd get
Speaker 1: it open, you know. Within the first third was down
Speaker 1: on the floor at the n y s E for
Speaker 1: Ferrari and they got it done in about thirty forty minutes. Yep.
Speaker 1: So anyway, but we'll see how how hot this deal is.
Speaker 1: Any massive investing reporter for Bloomberg News joining us on
Speaker 1: the pholde will be paying attention to that. Robin Hood
Speaker 1: I p O U tomorrow now the FED is coming
Speaker 1: shortly with the statement and the interview, We're all going
Speaker 1: to be paying very close attention here. To help us,
Speaker 1: uh decide what to look for? Is a j Oden
Speaker 1: investment strategist b n Y melon invest your solutions or
Speaker 1: at least a J give us what you're looking for,
Speaker 1: what you're hoping to hear from J Pale on the FED?
Speaker 1: Thanks for having me here. I think on what we're
Speaker 1: looking for is really the tone and some of the
Speaker 1: language that they're using. Obviously, we we don't expect interest
Speaker 1: rates to you know, any any conversation about interest rates changing,
Speaker 1: But it's really just about what their sentiment is around inflation,
Speaker 1: you know, do they still see it as transitory and
Speaker 1: any sort of indication of any change from the um
Speaker 1: expectations of of interest rates moving. I think that's really
Speaker 1: what we're gonna be looking for today. Alright, So a
Speaker 1: J let's assume it's kind of steady. She goes low
Speaker 1: for longer. Some people would say lower forever again, just
Speaker 1: just picked a ten year at one point to five.
Speaker 1: How are you and your team's at bn Y allocating capital.
Speaker 1: I'm thinking equity, fixed income alternatives. How are you thinking
Speaker 1: about that in this market, well, in this market, because
Speaker 1: interest rates are solo, we're really looking at the equities
Speaker 1: and real lasses. The commodities is where the place to be,
Speaker 1: right I mean, with interest rates you know, near zero
Speaker 1: and we don't see the FED moving right now in
Speaker 1: the near future, it makes sense to be in those
Speaker 1: spaces to get a sort of a return on your investment.
Speaker 1: And ultimately we like US equities right now. I mean
Speaker 1: we're seeing some dollar stability. Um. Typically, when we were
Speaker 1: earlier in the part of the year, we were looking
Speaker 1: at more non dollar developed markets as well as PM.
Speaker 1: But when we when you start to factor in things
Speaker 1: about you know, factor and earnings as well as the
Speaker 1: COVID Night Team pandemic and looking at some of the
Speaker 1: variants and how vaccination raids and inoculations are impacting those markets,
Speaker 1: we really like US equities right now. We have a
Speaker 1: overweight to the developed markets Europe and in UK, but
Speaker 1: really have a more of a tilt to US markets
Speaker 1: over UH than those non dollar US equities. Do you
Speaker 1: expect that to change as vaccination rates pick up elsewhere? Um,
Speaker 1: you know, at some point we could see a tilt
Speaker 1: to to move back if there's any sort of indication
Speaker 1: that dollar is going to get a little bit weaker
Speaker 1: than we would like, we'd have a more of a
Speaker 1: preference likely to Europe and UK. But I mean when
Speaker 1: we're seeing uh, you know, in e M countries, I believe,
Speaker 1: uh you know, the rates their vaccination rates are so low,
Speaker 1: and then a lot of the I guess the struggle
Speaker 1: that they're having with variants, and I guess if you
Speaker 1: not even look at the the delta variant, but also
Speaker 1: the potential for other variants to come to come up
Speaker 1: um and how they haven't moved to to a reopen.
Speaker 1: I think that's really sort of the fear that we
Speaker 1: have or not that's the fear, But are our tilt
Speaker 1: away from those markets and looking more and and a
Speaker 1: little bit more stability in the US and those developed
Speaker 1: market countries. A J. We had some big tech earnings
Speaker 1: last night, Microsoft, Apple, Google, all putting up some really
Speaker 1: really stellar numbers here, Yet the stockture, you know, kind
Speaker 1: of muted here. How do you think about some of
Speaker 1: those big tech names that have worked so well for
Speaker 1: so many investors really since the financial crisis versus you know,
Speaker 1: some of the cyclical names, whether it's banks, or energy
Speaker 1: that have been kind of the rotation trade over the
Speaker 1: last year and a half or so. How how are
Speaker 1: you guys positioned on the equity side. That's a great question.
Speaker 1: I think we're because we're in more of a mid
Speaker 1: cycle recovery, we're looking more in quality. I mean, if
Speaker 1: you look at Q one, value performed well, we saw
Speaker 1: much of a steepening of the yield curve last quarter.
Speaker 1: It was growth that really performed well. But we're really
Speaker 1: looking at um quality now since we're more mid cycle,
Speaker 1: we're recovery, looking at to that full reopen um. With
Speaker 1: the tech sector particular, you kind of wonder if there
Speaker 1: is some reverberation of what's going on in China and
Speaker 1: some of the uh, you know, regulation that's coming down
Speaker 1: apply if you kind of think at some point maybe
Speaker 1: that's the sentiment that is going to come this way.
Speaker 1: As you know, if you look at there's in three
Speaker 1: major event types can I think about it that have
Speaker 1: sort of indicated that there will be regulation down the pipe.
Speaker 1: If you look at you know, the January six the interrection,
Speaker 1: you look at MEME stocks as well as most recently
Speaker 1: in the last couple of weeks, we've had the conversation
Speaker 1: from the UM the Surgeon General about the importance of
Speaker 1: misinformation disinformation. You kind of wonder at some point will
Speaker 1: there be regulation that these companies have to deal with
Speaker 1: and not necessarily will tech take a back seep. Will
Speaker 1: there be a changing of the guard. Will we see
Speaker 1: leaders in certain areas that may may have been a
Speaker 1: little bit stronger in privacy, will they rotate to be
Speaker 1: more in the forefront in the tech sector, And will
Speaker 1: you see a rotation in some of those larger names.
Speaker 1: I don't think text going anywhere. It's where the innovation,
Speaker 1: a lot of the growth exists. But we could see
Speaker 1: some headwinds or some rotation in those leaders in those spaces.
Speaker 1: I also wonder about um, you know, the effect of
Speaker 1: China on global stocks so far, you know, we've seen
Speaker 1: Chinese stocks get pummeled and you can't see it in
Speaker 1: the SMP or in the MSCI World Index, but sometimes,
Speaker 1: um there is an effect and it takes a couple
Speaker 1: of weeks or even months for it to come through.
Speaker 1: We saw that, for example in Are you concerned about that?
Speaker 1: You know, I wouldn't say there's a concern there. I
Speaker 1: think ultimately, you know, China is a very large economy. Um,
Speaker 1: and you know, those those changes that they're making, although
Speaker 1: you know we're seeing the impacts of them in their markets.
Speaker 1: Ultimately it's it. I think it bodes well for a strong, strong,
Speaker 1: strong growth for them at some point down the line. Um,
Speaker 1: it's just it. I think ultimately the market doesn't like uncertainty,
Speaker 1: and it wasn't really for seen in some instances, and
Speaker 1: so I think that's what we're seeing right now. I
Speaker 1: don't I don't see it as a pause for concerns
Speaker 1: means all right, A J thank you so much for
Speaker 1: joining us. Really appreciate getting your thoughts in perspective. A J.
Speaker 1: Odin These an investment strategist for b n Y Melan
Speaker 1: Investors Solutions. Again, in terms of asset allocation, A J.
Speaker 1: S think and uh kind of got to be in
Speaker 1: equities and with the ten year trading at one point
Speaker 1: to six percent, that that makes some sense to a
Speaker 1: lot of folks in the market. We're gonna more coming
Speaker 1: up for you. Kind of got a little bit of
Speaker 1: red and green on the screen. We've got the FED
Speaker 1: coming up this afternoon. This is Bloomberg. Thanks for listening
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