WEBVTT - Surveillance: Impeachment Discussions with Treyz 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 0:00:13.960 --> 0:00:17.560 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.640 --> 0:00:27.000 Bloomberg dot Com, and of course on the Bloomberg Let 0:00:27.080 --> 0:00:29.440 us discuss Washington now, and let us try to get 0:00:29.440 --> 0:00:32.320 out through the week where maybe policy will be committed 0:00:32.720 --> 0:00:35.080 in Washington. There's no one better to talk to than 0:00:35.120 --> 0:00:38.239 the gentle lady from New Orleans. Henrietta Trades joined us 0:00:38.360 --> 0:00:42.080 Beta Partners. Henrietta, You and the rest of the world 0:00:42.120 --> 0:00:46.720 have to get to the wonderful Breeze Brady distraction next weekend. 0:00:46.760 --> 0:00:50.239 There's a small football game in your New Orleans is 0:00:50.240 --> 0:00:53.320 a nation, seriously as a nation can will still be 0:00:53.479 --> 0:00:58.040 standing on Friday to get to that important match. I 0:00:58.080 --> 0:01:00.360 would say, you can't keep New Orleans down. So we'll 0:01:00.400 --> 0:01:03.040 just kink kinkake our way through this and get to 0:01:03.080 --> 0:01:05.240 the end. No matter what happens in d C. We 0:01:05.280 --> 0:01:07.679 will see that game. We will see that game, but 0:01:07.720 --> 0:01:10.240 we've got to get through the game of this political 0:01:10.440 --> 0:01:15.479 crisis as well. Frame out policy makers in Washington. Your 0:01:15.600 --> 0:01:20.880 expertise with the constitutional crisis we face. I think the 0:01:20.959 --> 0:01:24.360 next nine days, as you were reminding me earlier, is 0:01:24.400 --> 0:01:28.839 going to be everything from resignation to the Amendment UM 0:01:28.880 --> 0:01:30.840 going back to the Confederacy, and things that can be 0:01:30.920 --> 0:01:36.920 done to um eject lawmakers who are potentially UM fostering rebellion, 0:01:37.319 --> 0:01:39.760 to impeachment. Certainly that will be going on all the 0:01:39.760 --> 0:01:42.360 way through the twenty and then what we've heard from 0:01:42.560 --> 0:01:44.440 the Democratic leadership in the last a couple of days 0:01:44.440 --> 0:01:47.200 is that we might actually hold over this idea of 0:01:47.240 --> 0:01:51.960 impeachment well into one so that Democrats and some Republicans 0:01:52.000 --> 0:01:54.600 can ensure the President Trump can never run for office again. 0:01:54.680 --> 0:01:56.520 So I don't think the storyline is going to get 0:01:56.560 --> 0:01:59.400 behind us anytime soon. This week will obviously be filled 0:01:59.400 --> 0:02:01.520 with a lot of job and back and forth, but 0:02:01.560 --> 0:02:03.720 the nation will move on to a Biden administration and 0:02:03.760 --> 0:02:06.520 will get there soon enough. Henrietta, help us purse out 0:02:06.840 --> 0:02:09.600 the reality the substance from the drama. I mean, there's 0:02:09.639 --> 0:02:11.760 a lot of drama and there's a lot of reality. 0:02:12.120 --> 0:02:15.120 But what aspects of what we've seen unfold in Washington, 0:02:15.240 --> 0:02:18.360 d C. With the insurrection, with some of the fallout 0:02:18.480 --> 0:02:23.360 from how quickly law enforcement responded has long lasting implications 0:02:23.360 --> 0:02:28.240 for policy. I think the amazing thing about Wednesday of 0:02:28.320 --> 0:02:31.320 last week was that we got the Georgia Senate elections 0:02:31.480 --> 0:02:34.560 and that insurrection at the exact same time. And one 0:02:34.560 --> 0:02:36.920 of the things I noticed even before the insurrection started 0:02:36.960 --> 0:02:38.960 was that Republicans were eager to move on to a 0:02:39.080 --> 0:02:42.200 policy discussion, get away from the sort of cult of 0:02:42.280 --> 0:02:45.919 personality association the Republican Conference currently has with Donald Trump 0:02:46.120 --> 0:02:48.440 and moved to a discussion about policy. And so that 0:02:48.520 --> 0:02:51.560 actually has driven a number of Republican members in both 0:02:51.600 --> 0:02:54.519 the House and Senate, and certainly their lobbyists to say, 0:02:54.560 --> 0:02:56.519 we do want to pass the bill with Joe Biden 0:02:56.760 --> 0:02:59.320 early in one. I don't want to suggest that this 0:02:59.320 --> 0:03:01.400 will be a compa a young moment that will last 0:03:01.480 --> 0:03:04.160 for eternity, but I think we get ninety days here 0:03:04.480 --> 0:03:07.880 for a sixty vote threshold bipartisan bill against ten to 0:03:07.960 --> 0:03:11.000 fifteen Republican votes in the Senate. I'm not really sure 0:03:11.040 --> 0:03:13.480 exactly how many yet in the House, but those are 0:03:13.960 --> 0:03:16.600 members who want to have policy to debate, want to 0:03:16.600 --> 0:03:19.079 be able to move on from the discussion of Donald Trump. 0:03:19.280 --> 0:03:21.679 So I don't I think in the immediate term, which 0:03:21.680 --> 0:03:23.880 is probably the best way to approach the situation right 0:03:23.919 --> 0:03:26.520 now is just day by day, we are going to 0:03:26.560 --> 0:03:30.120 see even more optimism for a sixty vote threshold stimulus 0:03:30.160 --> 0:03:32.679 package right out of the gate and inviided administration that 0:03:32.760 --> 0:03:36.280 Republicans are expecting to work on, not just hoping to 0:03:36.280 --> 0:03:38.680 work on, but really expecting to pass with him. So 0:03:38.880 --> 0:03:41.720 that's the biggest impact, at least for our plans. This 0:03:41.800 --> 0:03:44.200 is key and Henrietta, you phrase that so well, This 0:03:44.280 --> 0:03:46.560 idea that the turmoil that we saw in Washington is 0:03:46.600 --> 0:03:50.720 actually pushing Republicans and Democrats further towards some sort of 0:03:50.720 --> 0:03:54.560 consensus to work on policy, to move forward from what 0:03:54.600 --> 0:03:57.600 they would like to be simply a distraction. How big 0:03:57.840 --> 0:04:01.480 could this stimulus be? Great question. I mean, it depends 0:04:01.480 --> 0:04:02.760 on who you talk to you right now, I think 0:04:02.760 --> 0:04:05.840 Democrats are gonna start with the humongous ask two, three 0:04:05.920 --> 0:04:08.400 or four trillion dollars, as we've discussed in the past, 0:04:09.160 --> 0:04:12.800 Republicans are going to get sticker shock, probably anywhere above 0:04:12.920 --> 0:04:16.680 seven fifty opening salvos from Republican leadership I've spoken to 0:04:16.720 --> 0:04:19.320 have suggested a five billion dollar number, but the reality 0:04:19.400 --> 0:04:21.440 is with Democrats in control, of the House and Senate. 0:04:21.600 --> 0:04:23.520 They're not gonna waste their time on a five billion 0:04:23.560 --> 0:04:26.200 dollar package. So my base case assumption is that at 0:04:26.200 --> 0:04:28.200 the very low end we get something in the seven 0:04:28.200 --> 0:04:31.360 D eight hundred billion dollar range. At the high end, 0:04:31.360 --> 0:04:33.960 maybe at one point eight trillion UM. That's gonna depend 0:04:33.960 --> 0:04:35.800 on the size of any direct payments they want to 0:04:35.800 --> 0:04:39.440 get out. As y'all know, the the payments to individuals 0:04:39.480 --> 0:04:42.719 or any individual side stimulus is expensively just because of 0:04:42.720 --> 0:04:44.920 how many individuals there are that you need to give 0:04:44.920 --> 0:04:49.560 money to. So I don't mean, I don't mean to interrupt, 0:04:49.600 --> 0:04:52.200 but I am because at least that I remember, there 0:04:52.279 --> 0:04:55.880 was a Job's report on Friday, and I understand within 0:04:55.920 --> 0:04:59.279 the original Washington you and everybody else's dealing right now, 0:05:00.000 --> 0:05:02.880 I'm not even sure the politicians are aware of how 0:05:03.080 --> 0:05:08.320 ugly that Job's report was. Do they care? And does 0:05:08.320 --> 0:05:13.040 it create a new urgency around the real crises plural 0:05:13.120 --> 0:05:17.239 that we have. That's exactly the narrative I think that's important. 0:05:17.400 --> 0:05:19.960 Urgency and crisis. There's two words that you use are 0:05:20.000 --> 0:05:23.760 going to propel this package forward. Um. It's beneficial on 0:05:23.839 --> 0:05:26.640 every single level. Both the need an urgency basis to 0:05:26.680 --> 0:05:29.080 call this a crisis. The jobs report, the COVID deaths, 0:05:29.360 --> 0:05:33.440 the shutdowns we're saying nationwide, UM, the worst hospitalization rates 0:05:33.480 --> 0:05:37.599 we've seen thus far, UM, the crisis of unemployment obviously 0:05:37.680 --> 0:05:40.320 brought to the fore by the long term unemployed and 0:05:40.360 --> 0:05:43.400 the most recent jobs number. And the benefit of a 0:05:43.400 --> 0:05:46.760 crisis and this urgency that feeds yourself is that you 0:05:46.760 --> 0:05:48.640 don't have to pay for us. And that is the 0:05:48.640 --> 0:05:51.520 path of East resistance to getting sixty votes. So all 0:05:51.560 --> 0:05:55.000 that helps. One final question, Henrietta, does it matter to you, 0:05:55.200 --> 0:05:57.720 as we're talking with a number of our guests this morning, 0:05:58.080 --> 0:06:02.680 to see Republicans become in dependence Ala Murkowski of Alaska? 0:06:03.520 --> 0:06:07.719 That is h humongous. I mean Senators Murkowski, Collins, Romney, 0:06:07.800 --> 0:06:11.320 Ben Sass. Those are members who could potentially split the 0:06:11.320 --> 0:06:16.120 difference between a fifty Republican Democratic majority split in the 0:06:16.120 --> 0:06:19.160 Senate and really give Democrats a functioning majority. That's what 0:06:19.200 --> 0:06:20.880 we saw last time in two thousand and one when 0:06:20.920 --> 0:06:24.160 this happened, it took until May for Republican to defect 0:06:24.279 --> 0:06:28.000 the Independent Conference and caucus with Democrats. If that happens, um, 0:06:28.040 --> 0:06:31.960 that really smooths our path to another Reconciliation bill later on. 0:06:32.040 --> 0:06:35.040 This should be more stimulus, Henrietta, thank you so much, 0:06:35.520 --> 0:06:42.560 Tres Veta Partners. There's a question that the fraud that 0:06:42.560 --> 0:06:44.320 we're seeing come off the top in some stocks and 0:06:44.400 --> 0:06:47.279 we're seeing commensurate moves within the credit space. It does 0:06:47.320 --> 0:06:49.680 not seem like it. But perhaps there is not the 0:06:49.720 --> 0:06:52.200 same froth. This is one of the big existential questions 0:06:52.200 --> 0:06:55.560 facing people searching for income, Brian Weinstein, among them Morgan 0:06:55.600 --> 0:06:59.599 Stanley Investment Management, head of Global fixed Income joining us Now, Brian, 0:06:59.720 --> 0:07:03.800 are you seeing a similar type of froththiness and aspects 0:07:03.800 --> 0:07:06.720 of the credit market as people point to in aspects 0:07:06.760 --> 0:07:09.960 of equities. Man, after listening to you guys the last 0:07:09.960 --> 0:07:11.800 few minutes, I feel like we're so we're so boring, 0:07:12.120 --> 0:07:14.920 um sick be income has some frofit it I like 0:07:14.960 --> 0:07:16.800 anything else that it's moved up, and it's been a 0:07:16.880 --> 0:07:19.720 straight line, but nothing really parabolic, right. I think it's 0:07:19.720 --> 0:07:22.360 been a bit more rational, a bit more slow, led 0:07:22.360 --> 0:07:25.000 by the FED, led by low rates, and we've seen 0:07:25.240 --> 0:07:28.840 small reversals that in real yields and in regular interest rates, 0:07:28.880 --> 0:07:31.160 and but Prence Fed are still type people are still 0:07:31.160 --> 0:07:33.520 looking for income. You can't get it. So I feel 0:07:33.560 --> 0:07:35.640 like there is froth, but it doesn't compare in the 0:07:35.680 --> 0:07:38.120 same way to the things that you guys were just discussing. 0:07:38.280 --> 0:07:41.320 Does that affect your investment, this thesis, this idea that 0:07:41.360 --> 0:07:44.080 you're not seeing the same froththiness. So that's a green 0:07:44.160 --> 0:07:46.520 light to continue to go deeper into risk and credit, 0:07:47.840 --> 0:07:50.880 you know, yes, yes and no. I mean certainly investors 0:07:50.880 --> 0:07:52.880 are speaking with their whilets and they're moving to risk 0:07:52.960 --> 0:07:55.800 your assets because he flows into emerging market, flows into 0:07:55.840 --> 0:07:58.400 things with income like high yield and even bank loans, 0:07:58.880 --> 0:08:00.160 and what it makes us want to do to be 0:08:00.160 --> 0:08:01.800 a little bit more slow and steady. I mean pick 0:08:01.880 --> 0:08:03.600 income is supposed to be a bit more boring than 0:08:03.680 --> 0:08:06.600 than than bitcoin or equities. UM. So what we're doing 0:08:06.680 --> 0:08:09.120 is we're not changing our views based on these manic 0:08:09.160 --> 0:08:11.640 market moves, and we're trying to take it into accounty 0:08:11.760 --> 0:08:14.040 the impact of the historical events we're seeing. Right, we 0:08:14.080 --> 0:08:16.080 don't want to be over overcompetent, but we think more 0:08:16.080 --> 0:08:18.960 stimulus is coming. Um. We obviously have the Democrats coming, um, 0:08:18.960 --> 0:08:21.200 so have maybe spead the higher taxes, So all those 0:08:21.200 --> 0:08:23.360 things are going to play into our into our thought 0:08:23.400 --> 0:08:27.000 but it's flowing to stay. Brian, you talk in your 0:08:27.040 --> 0:08:30.640 research note of winners in losers. If we go back 0:08:30.680 --> 0:08:34.360 to single digit returns and even bond returns of say 0:08:34.440 --> 0:08:38.120 four or five, six, seven percent, how do you parse 0:08:38.280 --> 0:08:41.240 a winner to get out to a double digit return 0:08:41.320 --> 0:08:45.280 of ten? You have double digit returns and pick sncome 0:08:45.320 --> 0:08:47.600 keep getting keep getting harder, Um, And so I think 0:08:47.640 --> 0:08:49.880 what you do is you stick to your fundamental research. Right. 0:08:49.880 --> 0:08:52.200 There are all kinds of sectors that have been really 0:08:52.240 --> 0:08:54.680 beaten up, but by this emming energy for the last 0:08:54.679 --> 0:08:57.120 couple of years for sure than things like gaming and 0:08:57.440 --> 0:09:00.160 other other places where the pandemic is hit. So as 0:09:00.160 --> 0:09:02.120 an active manager, it helps, I think to be slow 0:09:02.120 --> 0:09:04.120 and steady. We're not going to get double digit returns 0:09:04.120 --> 0:09:05.600 in a week and a month. You talk about, you know, 0:09:05.640 --> 0:09:08.280 things a day or and over a weekend. You know 0:09:08.280 --> 0:09:09.760 it's it's going to take I think a bit of 0:09:09.800 --> 0:09:12.200 a longer time, and you'll have to get thematic um 0:09:12.280 --> 0:09:15.960 active selection right as opposed to just owning credit or 0:09:16.000 --> 0:09:17.880 just owning high yield. That's not going to get you there. 0:09:18.280 --> 0:09:22.160 I know you're not doing technical analysis, but what level 0:09:22.240 --> 0:09:27.560 of the tenure yield up price lower is a trip point, 0:09:27.800 --> 0:09:31.600 is a Weinstein moment where you say, oops, bonds lower. 0:09:33.000 --> 0:09:35.280 I think we're really close. Um. I was surprised actually, 0:09:35.440 --> 0:09:37.160 and it wasn't a big move, but over as got 0:09:37.160 --> 0:09:39.640 over one ten that people didn't get more nervous. Tom 0:09:39.679 --> 0:09:42.880 I would say that fifty range if you don't get 0:09:42.880 --> 0:09:45.040 the steed coming right out, and then they probably won't 0:09:45.120 --> 0:09:47.600 if that doesn't come right out and complain about it. Um, 0:09:47.760 --> 0:09:50.120 I think that's where people get nervous, because I moved 0:09:50.160 --> 0:09:52.480 back towards two percent um and you probably do have 0:09:52.520 --> 0:09:54.600 to have the central banks doing some more unnatural things 0:09:54.600 --> 0:09:57.040 to count the rate um now with impacts on the dollar, 0:09:57.120 --> 0:10:00.320 impacts on on psyche and obviously on valuation. So but 0:10:00.360 --> 0:10:02.480 a lot of people do expect the Fed to jump in, right, 0:10:02.480 --> 0:10:03.920 I mean you're saying that the Fed would have to, 0:10:04.120 --> 0:10:06.559 but they would because otherwise you would get some sort 0:10:06.600 --> 0:10:10.640 of disruption in credit markets and financial conditions. When you 0:10:10.640 --> 0:10:13.680 talk about the defense of boring bonds, this idea that 0:10:13.679 --> 0:10:16.960 there's almost this defensiveness in your discussion. It's not that exciting. 0:10:17.000 --> 0:10:21.080 But we're stolid, we're steady, we're a reliable investment. Do 0:10:21.120 --> 0:10:24.920 you see credit as being sustained even with a rise 0:10:24.920 --> 0:10:29.520 of yields to fifty and the benchmark rate. Yes, and 0:10:29.640 --> 0:10:31.360 we're sure there'll be some bumps along the way, right, 0:10:31.360 --> 0:10:33.200 this will not continue to be a straight line tighter, 0:10:33.640 --> 0:10:35.520 but we do think you'll see money coming in higher 0:10:35.559 --> 0:10:38.280 deals to do. Think credit um is on decent footing. 0:10:38.280 --> 0:10:40.360 And as you say, um, you have to stad at 0:10:40.360 --> 0:10:42.960 your back somewhere out there, and you have the government 0:10:43.000 --> 0:10:45.400 at your back more stimulus somewhere out there. So again 0:10:45.400 --> 0:10:47.760 it won't be the double digit return corporate year um. 0:10:47.800 --> 0:10:49.600 But if you do need a couple of percent. As 0:10:49.600 --> 0:10:51.679 you look in some of these sectors am high yield 0:10:51.760 --> 0:10:54.560 loans um that still have still have some yield, you 0:10:54.600 --> 0:10:56.559 can still do okay, even if you'll move up a 0:10:56.600 --> 0:10:58.439 little bit UM And as you say, the stead will 0:10:58.440 --> 0:11:00.439 step in at some point. We're in the world. Is 0:11:00.440 --> 0:11:05.280 the best value right now, Brian? Probably in emerging market 0:11:05.320 --> 0:11:07.640 still and we've seen the flows in that direction. Things 0:11:07.640 --> 0:11:09.680 have been it from a week or dollar um. That's 0:11:09.679 --> 0:11:12.200 probably just still this thing that has the If the 0:11:12.240 --> 0:11:14.599 set does step then where's the release valve, Probably in 0:11:14.640 --> 0:11:17.640 the in the dollar weakening. So yeah, is a is 0:11:17.679 --> 0:11:20.240 a good spot. Um, Hi yield that down in credit 0:11:20.280 --> 0:11:22.400 again when you can do your homework and it's not 0:11:22.920 --> 0:11:26.760 just how yeld data, it's something you know, interesting and unique. Um, 0:11:26.760 --> 0:11:28.680 those things with yield I think are still places you 0:11:28.679 --> 0:11:30.880 want to go. Bryan Weinstein, thank you so much. From 0:11:30.920 --> 0:11:38.000 Morgan Stanley Investment Management. We appreciate your time to surveillance. 0:11:38.760 --> 0:11:42.560 Keeps a lovely ship's bill over by the deak where 0:11:42.600 --> 0:11:45.839 they all sit, and every time I said go to cash, 0:11:45.880 --> 0:11:50.599 they ring the bell. The bell has been ringing a 0:11:50.640 --> 0:11:53.480 lot over the last three years. We talked about people 0:11:54.000 --> 0:11:56.560 to get bonds right that have gotten right low yields. 0:11:56.600 --> 0:11:59.920 We talk about people who get the equity markets right. 0:12:00.520 --> 0:12:04.440 But in the world of equities, no one has consistently 0:12:04.600 --> 0:12:08.959 done it better. And Benjamin Laylor at HSBC at Tower 0:12:09.080 --> 0:12:13.400 Hudson's as well, and not only did he nail two 0:12:13.480 --> 0:12:17.720 years ago, did he nail last year, but this year 0:12:17.720 --> 0:12:20.640 he continues the enthusiasm. Ben Laylor, thank you so much 0:12:20.960 --> 0:12:23.640 for joining us. Is all that went on last week 0:12:23.800 --> 0:12:30.400 shaking your bull conviction? Um? I don't think so. I mean, 0:12:30.400 --> 0:12:33.600 obviously what went on last week was shocking in sort 0:12:33.600 --> 0:12:36.760 of very many ways, but I guess the outline for 0:12:36.800 --> 0:12:40.320 this year is really unchanged. I mean, we are looking at, 0:12:40.440 --> 0:12:45.000 I think, just a historic growth year where expectations frankly 0:12:45.120 --> 0:12:48.600 are still too low, both for GDP growth and for 0:12:48.679 --> 0:12:51.320 ernsings growth. And I think that's going to be really 0:12:51.400 --> 0:12:54.560 what's going to drive the surprise, the upside surprise for 0:12:54.600 --> 0:12:56.560 this year, and and it's going to come against the 0:12:56.559 --> 0:13:00.720 backdrop of I think still very benevolence sort of policy 0:13:00.760 --> 0:13:03.640 support UM, and I think that's going to allow evaluations 0:13:03.720 --> 0:13:06.360 to come down a little bit but still remain much 0:13:06.400 --> 0:13:08.400 higher than they have been historically. And that's really I 0:13:08.440 --> 0:13:10.880 think the combination that you need to focus on for 0:13:10.920 --> 0:13:13.040 this year. I mean that I think we're setting ourselves 0:13:13.120 --> 0:13:16.760 up for a very very rare sort of third year 0:13:16.880 --> 0:13:20.000 of consecutive strong equity game. And so you've you've you've 0:13:20.000 --> 0:13:23.959 seen it. Count on three fingers how many times you've 0:13:23.960 --> 0:13:26.240 seen over the last fifty or sixty years that people 0:13:26.240 --> 0:13:28.160 are may be right to be cautious yet. But I 0:13:28.200 --> 0:13:31.040 think that I think that outlook is is what we're 0:13:31.080 --> 0:13:33.160 playing for here, and I actually probably be a bit 0:13:33.240 --> 0:13:35.720 better about it now than I did. UM. You know, 0:13:35.760 --> 0:13:37.520 maybe not because of last week, but certainly over the 0:13:37.640 --> 0:13:39.880 last a couple of weeks, I think the outlook has 0:13:39.920 --> 0:13:43.880 probably firmed up. Ben, What's so important here is along 0:13:43.880 --> 0:13:47.120 the way there's a nuance of sectors. Is this the 0:13:47.200 --> 0:13:50.880 blunt instrument of a market just lifting or tell us 0:13:51.000 --> 0:13:55.480 your sector nuance, the distinctions between two years ago one 0:13:55.600 --> 0:14:01.319 years ago in your sector allocation? Now, yes, as I 0:14:01.360 --> 0:14:03.480 would sort of sectors and countries. I mean, I think 0:14:03.520 --> 0:14:06.480 you definitely get paid to. I mean I prefer to 0:14:06.480 --> 0:14:08.959 call it out sort of catch up of these sort 0:14:09.000 --> 0:14:12.839 of value cyclical sectors and also international market rather than 0:14:12.840 --> 0:14:16.000 a rotation, because I think everything is going up. I 0:14:16.080 --> 0:14:18.920 just think this sort of value cyclical and international markets 0:14:18.920 --> 0:14:21.080 are probably going up a bit more than the sort 0:14:21.120 --> 0:14:23.120 of winners of last year. But I do think everything's 0:14:23.160 --> 0:14:29.640 going up um and and the it's a very different environment. 0:14:29.640 --> 0:14:31.800 I mean, we're I think right now you should be 0:14:31.840 --> 0:14:34.720 reaching for risk, you should be reaching for growth. M 0:14:34.800 --> 0:14:36.760 In many ways, that's sort of the opposite of last year. 0:14:36.840 --> 0:14:39.760 So we're you know, very focused on places that you 0:14:39.800 --> 0:14:43.080 know have um you know, value and cyclicals are probably 0:14:43.080 --> 0:14:46.240 going to grow three to four times more than the 0:14:46.320 --> 0:14:49.320 sort of winners of last year. This year and you're 0:14:49.480 --> 0:14:55.360 paying third lower valuations. I mean that's basically I think 0:14:55.360 --> 0:14:57.400 the outlook for this year. So you know, where do 0:14:57.480 --> 0:15:00.120 I get that most operating leverage to this, to this 0:15:00.280 --> 0:15:04.280 environment of higher GDP growth on a half bond fields. Um, 0:15:04.320 --> 0:15:07.880 it's it's industrials, it's small cap, it's financials, it's it's 0:15:07.880 --> 0:15:11.400 the emerging market, it's a bit of Europe. Um. This 0:15:11.440 --> 0:15:13.960 is where I think that the most unt I mean 0:15:14.040 --> 0:15:16.640 part of make to make this clear, Ben Laylor's law 0:15:16.640 --> 0:15:20.280 on the Cleveland Browns exactly talk about an add of 0:15:20.320 --> 0:15:23.280 the odd of the money call there, Ben, you know, 0:15:23.400 --> 0:15:25.400 at some point, well, we're about to go into the 0:15:25.440 --> 0:15:28.200 fourth quarter earning season here, Ben, and at some point 0:15:28.800 --> 0:15:32.120 earnings have to matter. Can't just be the fed flooding 0:15:32.120 --> 0:15:34.960 in the market with liquidity. What's your earnings outlook here 0:15:35.000 --> 0:15:39.400 for one and maybe into next year? Yeah, So I 0:15:39.400 --> 0:15:41.440 completely agree with that. I mean a fourth quarter, you know, 0:15:41.480 --> 0:15:45.040 earnings do need to sort of keep delivering, and and 0:15:45.080 --> 0:15:46.480 I think they sort of have been right. I Mean, 0:15:46.520 --> 0:15:49.400 we've just come off two quarters of the biggest earnings 0:15:49.440 --> 0:15:53.320 beats you've you've ever seen in recent history. Um, And 0:15:53.760 --> 0:15:55.040 I think this is going to be a sort of 0:15:55.040 --> 0:15:57.600 another quarter where you see some very strong earnings Beach 0:15:57.720 --> 0:16:01.200 one and two. Who's been leading those speech, It's exactly 0:16:01.200 --> 0:16:04.040 those sectors, um, that I've just been sort of talking about. 0:16:04.160 --> 0:16:07.480 It's um, it's been those most sort of cytroical sectors 0:16:07.480 --> 0:16:10.240 with the most depressed earnings. So that's what I'm looking 0:16:10.280 --> 0:16:12.760 for for this quarter, that sort of narrative to continue 0:16:13.040 --> 0:16:16.760 of just more earnings beat driving further earnings sort of 0:16:16.880 --> 0:16:19.240 upgrades and those beat coming out of these most sort 0:16:19.280 --> 0:16:22.000 of depressed sectors. But to ance your question to you know, 0:16:22.320 --> 0:16:25.040 earnings outlook for next year of sorry for this year. 0:16:25.120 --> 0:16:26.720 I just have to get used to saying that in 0:16:26.760 --> 0:16:30.480 the US, UM, the US that he was sent internationally, 0:16:30.960 --> 0:16:33.920 and I think there's probably UM, I think when all 0:16:34.000 --> 0:16:35.800 this sad and done, those numbers are going to be 0:16:35.800 --> 0:16:38.480 about at least ten percent too low across the board. 0:16:39.000 --> 0:16:42.560 When you look back historically, UM, you know, very rarely 0:16:42.640 --> 0:16:45.920 the analysts sort of low ball earnings. But when they do, 0:16:46.400 --> 0:16:48.600 it's either because we're coming out of a recession or 0:16:48.680 --> 0:16:51.400 it's because we're somewhere along the line we're getting sort 0:16:51.400 --> 0:16:55.080 of more fiscal stimulus be being poured into the market, 0:16:55.120 --> 0:16:57.160 and this year we have got both of those things, 0:16:57.640 --> 0:16:59.720 and potentially we're about to getting even you know another 0:17:00.640 --> 0:17:03.240 another slug of fiscal expansion. So I think earnings are 0:17:03.280 --> 0:17:07.240 fas too low. Um, and you know you CONSERNSUS for 0:17:07.320 --> 0:17:09.200 US this year when all of a sudden done, I 0:17:09.240 --> 0:17:12.680 think we're probably close to the thirty alright. So Ben, 0:17:13.119 --> 0:17:16.120 you've taken your career kind of looking at this global 0:17:16.440 --> 0:17:19.720 this equity business on a global scale, on globally rate. 0:17:19.760 --> 0:17:22.440 Here as we start, where do you see some of 0:17:22.480 --> 0:17:28.840 the best opportunities on a global outlook basis? Yeah, So, 0:17:29.040 --> 0:17:31.120 as I say, I mean we are definitely looking at 0:17:31.359 --> 0:17:33.520 you know, assets which should be deeply out of favor 0:17:33.560 --> 0:17:36.480 for the last decade or so. Um, you know, internationals 0:17:36.480 --> 0:17:38.879 one and sort of value stroke cyclicals is another one. 0:17:38.920 --> 0:17:42.879 I mean those two together have probably underperformed, um you 0:17:42.920 --> 0:17:45.080 know growth from the US by you know, over two 0:17:45.440 --> 0:17:47.960 percentage points over the last decade. So this I think 0:17:48.080 --> 0:17:50.600 is the change, um, both on the value six of 0:17:50.600 --> 0:17:53.080 your side, also at your point on the international side. UM. 0:17:53.119 --> 0:17:54.760 So i'd be looking at I'd be looking at the 0:17:54.920 --> 0:17:58.000 m you know specifically, Um, you know, the more cyclical 0:17:58.040 --> 0:18:02.000 bits of em sort of Latin semir frontier market, basically 0:18:02.040 --> 0:18:04.520 the bit that didn't do well last year, which is 0:18:04.520 --> 0:18:08.120 really all about China and and bits from Europe, especially 0:18:08.119 --> 0:18:12.719 sort of domestic cyclical Europe financials in Europe. Until very recently, 0:18:12.720 --> 0:18:15.040 those were pretty much the cheapest, most out of favor, 0:18:15.119 --> 0:18:18.720 most paided, uh sort of segments. Um, that's where i'd 0:18:18.720 --> 0:18:20.920 be looking. I mean, I guess the sort of caveat um, 0:18:21.280 --> 0:18:23.320 and I would say, what do you get for that? 0:18:23.480 --> 0:18:26.040 You basically get twice the growth for those segments that 0:18:26.119 --> 0:18:28.200 you do in the US, and you're basically only paying 0:18:28.600 --> 0:18:31.240 a third less in terms of in terms of evaluation. 0:18:31.280 --> 0:18:34.359 So that's why I think it's worth looking, um, you know, 0:18:34.600 --> 0:18:39.240 looking internationally, I guess the one caveat is is currencies. Um, 0:18:39.720 --> 0:18:45.480 Euro's obviously been strengthening, Yen's obviously been strengthening. And I 0:18:45.560 --> 0:18:48.440 was just gonna say, that's that's a pretty big headwin 0:18:48.520 --> 0:18:50.600 for some of these companies, which which are you know, 0:18:50.680 --> 0:18:53.960 big international players. Um, so sort of just there are 0:18:53.960 --> 0:18:58.200 some caveats, but what if you don't get that consensus. 0:18:58.240 --> 0:19:02.399 Mark McCormick was from t D Securities and Ben Laidler. 0:19:02.560 --> 0:19:05.760 I mean Marcus really pushed it against consensus. He's got 0:19:05.840 --> 0:19:10.879 your equity optimism, your optimism on recovery through all of 0:19:10.920 --> 0:19:14.439 these challenges, and he says, the great unspoken could be 0:19:14.520 --> 0:19:17.879 strong dour this year. What do the equity markets do 0:19:17.960 --> 0:19:23.080 if we get a Mark mccormickdollar. Yeah, I mean I 0:19:23.119 --> 0:19:24.959 think that that that would clearly be negative. I mean 0:19:24.960 --> 0:19:28.320 I'm not looking for big, significant dollar weakness from here. 0:19:28.320 --> 0:19:30.879 I mean you've actually had a lot. I'll you know, 0:19:31.240 --> 0:19:34.359 I think markets can do well with sort of dollar stabilization, 0:19:34.960 --> 0:19:36.600 and I'm not and I'm not sure I see the 0:19:36.720 --> 0:19:42.920 ingredient for you know, meaningfully stronger dollar. Um. But but again, um, 0:19:43.119 --> 0:19:45.199 the you know, going actually initial point. I mean, if 0:19:45.240 --> 0:19:48.120 we don't get that bigning surprise and clearly we're gonna 0:19:48.119 --> 0:19:50.720 make a lot, we're just gonna we're gonna make less money. 0:19:50.880 --> 0:19:52.240 I mean, I think you're, you know, you're looking us 0:19:52.240 --> 0:19:55.040 sort of flatish US year at that point. You know, 0:19:55.119 --> 0:19:56.880 markets do you know, obviously do a pretty good job 0:19:56.880 --> 0:19:59.119 of pricing things in ahead of time, which is why 0:19:59.160 --> 0:20:01.920 you've very rarely se that sort of third year of 0:20:02.080 --> 0:20:05.600 strong gains. So I think it probably turns um, you know, 0:20:05.720 --> 0:20:08.200 a pretty strong year into a plast this year. I'm 0:20:08.200 --> 0:20:11.560 not sure it completely derails it. Um, you know, only 0:20:11.640 --> 0:20:13.800 growth is still you know, still a big number. And 0:20:13.840 --> 0:20:15.919 I think more importantly, I think we begin to focus 0:20:15.960 --> 0:20:18.200 spent more on on you know, actual actually next year 0:20:18.280 --> 0:20:19.720 at some point where I still think you're going to 0:20:19.760 --> 0:20:22.760 see um, you know, I sort of flow through from 0:20:22.760 --> 0:20:25.159 this year into next year and still decent earnings at 0:20:25.200 --> 0:20:28.080 that point and a forbearance and and sort of reasonably 0:20:28.640 --> 0:20:31.840 reasonable forbearance and the bed which I think will support valuations. 0:20:32.040 --> 0:20:34.159 Benjo and Lee lu thank you so much. Terror Hud 0:20:34.240 --> 0:20:41.360 sitting here on optimism within the equity marketing, Well, there 0:20:41.359 --> 0:20:44.800 are financials, there are investments as well. There's also, of 0:20:44.800 --> 0:20:48.720