1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,800 --> 00:00:14,880 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Paul Sweeney along 3 00:00:14,880 --> 00:00:17,240 Speaker 2: with Tom Keene. Join us each day for insight from 4 00:00:17,239 --> 00:00:20,760 Speaker 2: the best in economics, geopolitics, finance, and investment. You can 5 00:00:20,800 --> 00:00:24,440 Speaker 2: also watch the show live on YouTube. Visit the Bloomberg 6 00:00:24,480 --> 00:00:27,760 Speaker 2: Podcast channel on YouTube to see the show weekday mornings 7 00:00:27,760 --> 00:00:30,400 Speaker 2: from seven to ten Eastern Remark Global Headquarters in New 8 00:00:30,480 --> 00:00:33,720 Speaker 2: York City. Subscribe to the podcast on Apple, Spotify, or 9 00:00:33,760 --> 00:00:36,800 Speaker 2: anywhere else you listen, and as always on Bloomberg Radio, 10 00:00:36,880 --> 00:00:39,599 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Let's check 11 00:00:39,600 --> 00:00:43,800 Speaker 2: in with a professional here Seema Shaw, global investment strategist 12 00:00:43,800 --> 00:00:46,680 Speaker 2: at Principal Global Investors. Sema, thanks so much for joining 13 00:00:46,760 --> 00:00:50,159 Speaker 2: us this morning. Love to get your take from what 14 00:00:50,280 --> 00:00:52,559 Speaker 2: we heard from FED Chairman j Powell yesterday. 15 00:00:53,680 --> 00:00:55,760 Speaker 3: Thanks for having me on. Well, I think the big thing. 16 00:00:55,840 --> 00:00:57,720 Speaker 4: The big takeaway was really that the Fed wants to 17 00:00:57,720 --> 00:01:01,400 Speaker 4: coverte It's not a case of, you know, going through 18 00:01:01,400 --> 00:01:03,520 Speaker 4: the inflation data. There may be a little bit of 19 00:01:03,520 --> 00:01:06,960 Speaker 4: a hesitancy, but certainly Powell seem to be somewhat dismissive 20 00:01:07,120 --> 00:01:11,000 Speaker 4: of those upside inflation surprises. He put it down to seasonality. 21 00:01:11,319 --> 00:01:13,480 Speaker 4: So I think the big takeaway is is that if 22 00:01:13,480 --> 00:01:15,400 Speaker 4: BED wants to cut rates, they need a really good 23 00:01:15,400 --> 00:01:18,840 Speaker 4: reason not to cut rates. So from that perspective of sudden, 24 00:01:18,840 --> 00:01:20,399 Speaker 4: it looks like three cuts are on their way for 25 00:01:20,480 --> 00:01:20,840 Speaker 4: this year. 26 00:01:21,440 --> 00:01:23,679 Speaker 5: And where are you penciling in those cuts? Are we 27 00:01:23,720 --> 00:01:26,840 Speaker 5: seeing those in June, July as soon as May? 28 00:01:27,480 --> 00:01:28,400 Speaker 3: So we have been. 29 00:01:28,760 --> 00:01:30,839 Speaker 4: We've had a forecast for a while for the first 30 00:01:30,880 --> 00:01:34,720 Speaker 4: cut to come in June, followed by September and December. 31 00:01:35,280 --> 00:01:37,679 Speaker 4: So this is fairly in line I think with where 32 00:01:37,720 --> 00:01:39,920 Speaker 4: the market is pricing today, although I think the market 33 00:01:39,959 --> 00:01:44,400 Speaker 4: is maybe starting to price even more cuts than before, 34 00:01:44,480 --> 00:01:47,160 Speaker 4: so maybe some expectation that they could be there. But 35 00:01:47,240 --> 00:01:50,639 Speaker 4: certainly for us, I think even though Powell was quite dubbish, 36 00:01:50,680 --> 00:01:52,160 Speaker 4: I would actually goes for us to call HI dubbish 37 00:01:52,240 --> 00:01:56,920 Speaker 4: rather than hawkish. You still need to have some clear 38 00:01:56,920 --> 00:02:00,120 Speaker 4: evidence that inflation has abated and that those two months 39 00:02:00,120 --> 00:02:02,960 Speaker 4: of jat and fedure anomalies rather than a new rising trend. 40 00:02:04,520 --> 00:02:06,040 Speaker 2: Guess a little bit less than now we're going to 41 00:02:06,080 --> 00:02:07,440 Speaker 2: hear from the Bank of England. What do you expect 42 00:02:07,720 --> 00:02:09,440 Speaker 2: to hear from the BOE. 43 00:02:10,800 --> 00:02:13,440 Speaker 4: Well, that's an interesting one because so of course very 44 00:02:13,520 --> 00:02:15,520 Speaker 4: unlikely to have any kind of change to policy. I 45 00:02:15,520 --> 00:02:18,600 Speaker 4: think that that is certainly the full expectation for the market. 46 00:02:19,320 --> 00:02:21,959 Speaker 4: The narrative is interesting at the moment because it's quite 47 00:02:21,960 --> 00:02:25,000 Speaker 4: different to the US, where the UK is really struggling. 48 00:02:25,520 --> 00:02:27,760 Speaker 4: The economy has been much much weaker than the US, 49 00:02:27,760 --> 00:02:30,760 Speaker 4: and the inflation number is the latest one coming in a. 50 00:02:30,760 --> 00:02:32,120 Speaker 3: Little bit lower than expected. 51 00:02:32,440 --> 00:02:35,720 Speaker 4: So they have a clear path to cuts now, and 52 00:02:35,840 --> 00:02:38,120 Speaker 4: certainly from our perspective, there is a rising chance that 53 00:02:38,320 --> 00:02:41,520 Speaker 4: you get sooner rather than later, potentially as soon as June, 54 00:02:42,440 --> 00:02:44,720 Speaker 4: which you know, if you do have a number of 55 00:02:44,760 --> 00:02:47,120 Speaker 4: central banks moving at the same time, that will make 56 00:02:47,360 --> 00:02:51,800 Speaker 4: things life easier for each other and certainly for the 57 00:02:51,840 --> 00:02:52,640 Speaker 4: currency markets. 58 00:02:53,160 --> 00:02:55,440 Speaker 5: So should we still expect the FED to be leading 59 00:02:55,520 --> 00:02:57,480 Speaker 5: the way in terms of central banks, at least in 60 00:02:57,520 --> 00:02:59,960 Speaker 5: development markets making those decisions to cut rate. 61 00:03:02,240 --> 00:03:04,440 Speaker 3: So I think it will be coincidental, to be honest. 62 00:03:04,639 --> 00:03:06,440 Speaker 4: I think for the ECB and the Bank of England, 63 00:03:06,480 --> 00:03:09,720 Speaker 4: they're fundamentals of their economies really are calling. 64 00:03:09,440 --> 00:03:12,280 Speaker 3: For rate cards in the very near future. 65 00:03:12,320 --> 00:03:14,119 Speaker 4: So if the FED didn't come in June, I don't 66 00:03:14,120 --> 00:03:17,400 Speaker 4: think that's a reason to stop for the ECB in 67 00:03:17,440 --> 00:03:20,720 Speaker 4: the Bank of England to put off their rate cuts, certainly, 68 00:03:20,760 --> 00:03:22,799 Speaker 4: but it just so happens. I think in a way 69 00:03:22,800 --> 00:03:24,760 Speaker 4: that the FED is probably going to be cutting around 70 00:03:24,760 --> 00:03:27,480 Speaker 4: the same time, and I think their meeting does come first, 71 00:03:27,480 --> 00:03:31,000 Speaker 4: so they will be leading the way generally speaking, though, 72 00:03:31,120 --> 00:03:33,080 Speaker 4: you know, the US does have a very very different 73 00:03:33,080 --> 00:03:36,000 Speaker 4: picture to what you're seeing from Europe and the UK, 74 00:03:36,080 --> 00:03:39,560 Speaker 4: which is why. But yesterday's meeting that was somewhat dubbish. 75 00:03:39,600 --> 00:03:42,280 Speaker 4: I mean, you have a strong growth picture, I mean stronger. 76 00:03:42,360 --> 00:03:46,040 Speaker 4: They raised their forecast quite considerably for this year. You've 77 00:03:46,040 --> 00:03:48,839 Speaker 4: got a higher inflation forecast, and yet you've still got 78 00:03:48,880 --> 00:03:52,600 Speaker 4: rate cuts coming at the same time as other countries 79 00:03:52,680 --> 00:03:55,040 Speaker 4: or the economies around the world, which are pretty much 80 00:03:55,040 --> 00:03:56,960 Speaker 4: in stagnation, if not already in recession. 81 00:03:57,840 --> 00:04:00,240 Speaker 2: All right, Sema, So for the US market here, if 82 00:04:00,240 --> 00:04:03,080 Speaker 2: we are in fact in a reasonably doublish situation from 83 00:04:03,080 --> 00:04:05,640 Speaker 2: the Fed's perspective, what are you telling your clients to 84 00:04:05,720 --> 00:04:06,520 Speaker 2: do here. 85 00:04:06,240 --> 00:04:08,600 Speaker 6: In the US in terms of maybe asset allocation. 86 00:04:10,040 --> 00:04:12,200 Speaker 3: Yeah, look, this is a risk on time. 87 00:04:13,560 --> 00:04:17,480 Speaker 4: We have been overweighting equities in credit for the last 88 00:04:17,520 --> 00:04:21,080 Speaker 4: couple of months in the expectation that the economy we 89 00:04:21,160 --> 00:04:23,479 Speaker 4: expect it to slow a little bit but suddenly to 90 00:04:23,560 --> 00:04:26,359 Speaker 4: avoid recession. But we've also been anticipating the rate carts, 91 00:04:26,360 --> 00:04:28,880 Speaker 4: and together that soft landing with rate cards is a 92 00:04:29,120 --> 00:04:32,159 Speaker 4: perfect situation for equities and credit. 93 00:04:32,600 --> 00:04:34,599 Speaker 3: Now importantly for Ecuitis, this is. 94 00:04:34,600 --> 00:04:36,360 Speaker 4: Also going to be a time where you can start 95 00:04:36,360 --> 00:04:38,480 Speaker 4: to really look at the very unloved parts of the market, 96 00:04:38,480 --> 00:04:41,320 Speaker 4: the bits where the valuations are still quite attractive, of 97 00:04:41,360 --> 00:04:43,880 Speaker 4: which there are many. So within the US, although we 98 00:04:43,960 --> 00:04:48,480 Speaker 4: do still like that large cap tech space, we are 99 00:04:48,760 --> 00:04:50,400 Speaker 4: edging into that small cap space. 100 00:04:50,720 --> 00:04:51,840 Speaker 3: We think that that should do well. 101 00:04:51,880 --> 00:04:54,240 Speaker 4: The valuation gap is fairly significant and we think it 102 00:04:54,279 --> 00:04:57,080 Speaker 4: could close up a little bit over the coming months. 103 00:04:57,279 --> 00:04:59,280 Speaker 4: And then there's other parts of the world. If you 104 00:04:59,320 --> 00:05:01,960 Speaker 4: look across the LA in American valuations there are very interesting. 105 00:05:01,960 --> 00:05:05,640 Speaker 4: Their fundamentals are pretty strong. The political scene is a 106 00:05:05,680 --> 00:05:08,800 Speaker 4: little bit less volatile than it was previously, So there 107 00:05:08,839 --> 00:05:12,560 Speaker 4: are pockets around the world, But actually our favorite region 108 00:05:12,600 --> 00:05:13,400 Speaker 4: is still the US. 109 00:05:13,560 --> 00:05:15,040 Speaker 3: And as I said, we're looking a little bit more 110 00:05:15,080 --> 00:05:15,640 Speaker 3: at small cap. 111 00:05:16,120 --> 00:05:18,000 Speaker 5: Yeah, I was going to say the Russell two thousand 112 00:05:18,160 --> 00:05:21,080 Speaker 5: still down fifteen percent from that twenty twenty one high. 113 00:05:21,600 --> 00:05:23,960 Speaker 5: Is that, to your point, an opportunity or is there 114 00:05:23,960 --> 00:05:26,400 Speaker 5: any type of concern that the market is still being 115 00:05:26,560 --> 00:05:29,239 Speaker 5: very much driven by those megacap technology companies. 116 00:05:30,960 --> 00:05:32,440 Speaker 4: I would say that both those things that you just 117 00:05:32,440 --> 00:05:34,680 Speaker 4: said are opportunities. You know, the valuate, the fact that 118 00:05:34,720 --> 00:05:38,359 Speaker 4: the small cap space hasn't performed as well. There's a 119 00:05:38,360 --> 00:05:40,960 Speaker 4: bit of a catch up trade within there, and although 120 00:05:41,000 --> 00:05:43,920 Speaker 4: the big cap have done very well, as I said, 121 00:05:43,960 --> 00:05:48,760 Speaker 4: we're not really pulling back our exposure there. It's driving 122 00:05:48,800 --> 00:05:50,800 Speaker 4: the market, but there is a movement that if you 123 00:05:50,839 --> 00:05:52,960 Speaker 4: can really get this cyclical upton, which is certainly what 124 00:05:53,000 --> 00:05:57,560 Speaker 4: Power's pointing to, that should be very good news. Historically, 125 00:05:57,960 --> 00:06:00,880 Speaker 4: when the FEAD has been cutting and it's been in 126 00:06:01,200 --> 00:06:03,640 Speaker 4: even if it's a very very gentle expansion, that has 127 00:06:03,680 --> 00:06:05,919 Speaker 4: typically been when small caps have outperformed. 128 00:06:06,320 --> 00:06:08,600 Speaker 3: So there are of course risks. 129 00:06:09,240 --> 00:06:10,640 Speaker 4: You know, if the FED is good it ends up 130 00:06:10,640 --> 00:06:12,720 Speaker 4: delaying it's rat cats till later in the year, then 131 00:06:12,760 --> 00:06:14,800 Speaker 4: small caps would struggle at least in the near term. 132 00:06:15,520 --> 00:06:17,200 Speaker 4: So we have to go into it with a slightly 133 00:06:17,240 --> 00:06:20,200 Speaker 4: longer term perspective, knowing that in the next three months 134 00:06:20,400 --> 00:06:23,240 Speaker 4: you could see some significant volatility, but if you're looking 135 00:06:23,240 --> 00:06:25,320 Speaker 4: out over a nine one year horizon, nine month one 136 00:06:25,400 --> 00:06:28,359 Speaker 4: year horizon, then it looks fairly attractive. 137 00:06:29,040 --> 00:06:31,520 Speaker 2: In a fixed income space. Do I just stay with 138 00:06:31,560 --> 00:06:33,800 Speaker 2: the US treasury market or going to try to take 139 00:06:33,839 --> 00:06:36,480 Speaker 2: on some credit risk here? What are you suggesting, Oh. 140 00:06:36,320 --> 00:06:38,559 Speaker 4: We should be taking on credit risk. We have actually 141 00:06:38,560 --> 00:06:40,960 Speaker 4: gone overweight to the high yield space. It has done 142 00:06:40,960 --> 00:06:43,760 Speaker 4: incredibly well. And if you're just looking at CARA, if 143 00:06:43,760 --> 00:06:46,760 Speaker 4: you just compare it even to acty risk premiums, high 144 00:06:46,839 --> 00:06:51,360 Speaker 4: yield and IG are really presenting a fairly attractive proposition. 145 00:06:51,600 --> 00:06:53,800 Speaker 4: Now there have been concerns, of course about the maturity 146 00:06:53,839 --> 00:06:56,279 Speaker 4: will we know that that is building up. It's going 147 00:06:56,360 --> 00:06:59,440 Speaker 4: to be probably one of the most significant maturity walls 148 00:06:59,440 --> 00:07:02,120 Speaker 4: that we've seen in recent history. But the important thing 149 00:07:02,200 --> 00:07:04,520 Speaker 4: is there is that as long as the economic backdrop 150 00:07:04,560 --> 00:07:08,080 Speaker 4: is still very constructive, then really we're not expecting any 151 00:07:08,120 --> 00:07:11,320 Speaker 4: kind of major liquidity issues. We're not expecting managers to struggle. 152 00:07:11,320 --> 00:07:13,880 Speaker 4: They will have to refinance at higher rates, but their 153 00:07:13,920 --> 00:07:17,440 Speaker 4: balance sheets are pretty strong. And importantly as well, that 154 00:07:17,480 --> 00:07:20,160 Speaker 4: maturity will even within the high yield space, it's biased 155 00:07:20,160 --> 00:07:23,560 Speaker 4: towards higher quality. So we're still saying high quality within 156 00:07:23,560 --> 00:07:25,360 Speaker 4: the high yield. We're not really looking at the triple 157 00:07:25,400 --> 00:07:28,520 Speaker 4: c's of that space. But there are still a lot 158 00:07:28,520 --> 00:07:31,080 Speaker 4: of opportunities within that credit as long as you agree 159 00:07:31,120 --> 00:07:33,640 Speaker 4: with us that there is an economic expansion in play 160 00:07:34,000 --> 00:07:35,600 Speaker 4: and the FED is going to be cutting rates. 161 00:07:35,400 --> 00:07:36,240 Speaker 3: Over the coming months. 162 00:07:36,440 --> 00:07:37,920 Speaker 2: All right, Simma, thank you so much for your time. 163 00:07:37,960 --> 00:07:39,640 Speaker 2: Really appreciate getting some of your thoughts here today. 164 00:07:39,640 --> 00:07:40,240 Speaker 6: Sima Shah. 165 00:07:40,480 --> 00:07:43,160 Speaker 2: She is a senior at Global investment strategist at Principle 166 00:07:43,440 --> 00:07:44,880 Speaker 2: Global Investors. 167 00:07:55,040 --> 00:07:55,360 Speaker 6: BHILLY. 168 00:07:55,400 --> 00:07:56,920 Speaker 2: Back in the day when I was on the cell side, 169 00:07:57,040 --> 00:07:58,600 Speaker 2: I'd hop on the train at the drop of a 170 00:07:58,760 --> 00:08:01,280 Speaker 2: hat to go down the ball more because. 171 00:08:01,080 --> 00:08:02,960 Speaker 6: You had to go see t Rope Price. That was 172 00:08:03,000 --> 00:08:05,760 Speaker 6: a huge I I vote, which I'll have you know. 173 00:08:05,960 --> 00:08:08,440 Speaker 2: I got the twenty years straight out of those clowns 174 00:08:08,440 --> 00:08:11,080 Speaker 2: down there, love the t Rope Price. Some super smart 175 00:08:11,120 --> 00:08:13,560 Speaker 2: people down there, man, All my clients down there were 176 00:08:13,640 --> 00:08:15,360 Speaker 2: very smart. You had to bring your a game. Sebastian 177 00:08:15,400 --> 00:08:18,600 Speaker 2: Page joints us here. He's head of Global Multi Asset 178 00:08:18,800 --> 00:08:20,920 Speaker 2: and he's the CIO at our good friends at Trope 179 00:08:20,920 --> 00:08:22,520 Speaker 2: Price down in Baltimore, Sebastian. 180 00:08:22,560 --> 00:08:23,800 Speaker 6: We heard from the FED yesterday. 181 00:08:24,960 --> 00:08:26,840 Speaker 2: Looks like they were a little bit more maybe dubbish 182 00:08:27,120 --> 00:08:29,679 Speaker 2: then some people had been thinking going into that meeting. 183 00:08:29,920 --> 00:08:32,000 Speaker 2: We heard from the Bank of England just moments ago, 184 00:08:32,160 --> 00:08:34,960 Speaker 2: again perhaps a little bit more dubbish than they had been. 185 00:08:35,360 --> 00:08:40,040 Speaker 2: So it feels like global central banks are becoming more accommodative. 186 00:08:40,240 --> 00:08:41,720 Speaker 6: How does that fit in with your world? 187 00:08:42,600 --> 00:08:45,160 Speaker 7: Yeah, that's a great question. And first, this is my 188 00:08:45,200 --> 00:08:47,680 Speaker 7: first time in this studio. Super exciting. Thank you for 189 00:08:47,720 --> 00:08:51,120 Speaker 7: the interest for coming into Baltimore. It we are nice 190 00:08:51,160 --> 00:08:53,640 Speaker 7: with the sales side. Sometimes people refer to us as 191 00:08:53,679 --> 00:08:57,000 Speaker 7: trow nice and just for the record, I want to 192 00:08:57,040 --> 00:09:02,400 Speaker 7: say we're not clowns. Were serious. It's interesting that you 193 00:09:02,440 --> 00:09:04,960 Speaker 7: ask about both the FED and the Bank of England, 194 00:09:05,080 --> 00:09:07,800 Speaker 7: and we just had a decision on the Bank of England. 195 00:09:08,120 --> 00:09:10,400 Speaker 7: I look at the policy rates, they're about the same, 196 00:09:10,600 --> 00:09:12,800 Speaker 7: you know, five and a quarter five and a half percent. 197 00:09:13,600 --> 00:09:18,080 Speaker 7: Then I compare wage growth, so Atlanta Fed tracker for 198 00:09:18,200 --> 00:09:22,400 Speaker 7: wage growth in the US is at five percent. I 199 00:09:22,440 --> 00:09:28,200 Speaker 7: go to England, it's at six percent. Service inflation services 200 00:09:28,280 --> 00:09:32,439 Speaker 7: in England is that six percent. So we're looking at 201 00:09:32,600 --> 00:09:36,000 Speaker 7: I think greater inflation pressures in England than in the US, 202 00:09:36,120 --> 00:09:40,959 Speaker 7: even though the policy rates are the same. And I 203 00:09:41,000 --> 00:09:44,160 Speaker 7: was just talking to our European economists and he's also 204 00:09:44,320 --> 00:09:49,440 Speaker 7: worried about impending further inflation on the goods side for 205 00:09:49,559 --> 00:09:53,240 Speaker 7: England because you know, it's it's an important country and 206 00:09:53,440 --> 00:09:56,040 Speaker 7: the Red Sea is shut down in terms of a 207 00:09:56,120 --> 00:10:01,040 Speaker 7: shipping link, so costs for shipping are increasing. So you know, 208 00:10:01,760 --> 00:10:06,080 Speaker 7: I don't know everyone's bringing rates down. I'm worried about inflation. 209 00:10:06,720 --> 00:10:08,680 Speaker 7: We're worried about upside risks to inflation. 210 00:10:09,120 --> 00:10:12,920 Speaker 5: And so if inflation stays hot, the FED in theory 211 00:10:13,040 --> 00:10:16,160 Speaker 5: drags their feet. We see cuts either extend out longer. 212 00:10:16,520 --> 00:10:19,240 Speaker 5: Where are you putting money to work if that plays out? 213 00:10:19,280 --> 00:10:20,880 Speaker 5: And that is the case, because right now I'm looking 214 00:10:20,880 --> 00:10:23,719 Speaker 5: at Nasdaq one hundred mini futures are up almost one 215 00:10:23,720 --> 00:10:24,839 Speaker 5: percent today. 216 00:10:25,000 --> 00:10:27,200 Speaker 7: Yeah, let me give you three trades if you want 217 00:10:27,240 --> 00:10:31,559 Speaker 7: to think about upside risk and inflation. Number One, in bonds, 218 00:10:32,200 --> 00:10:37,160 Speaker 7: you know, go short duration. We're short duration. We have 219 00:10:37,320 --> 00:10:41,320 Speaker 7: a cash overweight and a credit overweight. It's not a 220 00:10:41,320 --> 00:10:45,280 Speaker 7: massive position for us, but we're short duration. Number two, 221 00:10:45,800 --> 00:10:50,640 Speaker 7: in stocks, you have value versus growth in the value universe. 222 00:10:50,880 --> 00:10:54,160 Speaker 7: You have energy stocks that are sensitive to inflation, and 223 00:10:54,240 --> 00:10:59,040 Speaker 7: I think that overall values poised to upperform growth, especially 224 00:10:59,040 --> 00:11:02,280 Speaker 7: because growth is rally read so much. If we get 225 00:11:02,360 --> 00:11:06,640 Speaker 7: upside surprises and inflation going forward. And I'm not talking 226 00:11:06,640 --> 00:11:09,160 Speaker 7: about going back to nine percent that we had, I'm 227 00:11:09,200 --> 00:11:14,240 Speaker 7: just talking about inflation above expectations the consensus that it's 228 00:11:14,320 --> 00:11:18,600 Speaker 7: really coming down smoothly, which is not. And the third 229 00:11:18,640 --> 00:11:22,600 Speaker 7: trade we have in our portfolios is real asset equities. 230 00:11:22,880 --> 00:11:28,040 Speaker 7: That's a diversified portfolio of stocks, including energy stocks, metals 231 00:11:28,080 --> 00:11:33,160 Speaker 7: and mining metals and reats. So you get a position 232 00:11:33,240 --> 00:11:36,400 Speaker 7: there that gives you, over time some equity exposure as 233 00:11:36,440 --> 00:11:39,920 Speaker 7: opposed to just going into tips, and that responds to 234 00:11:40,000 --> 00:11:43,160 Speaker 7: inflation in a kind of like four or five x 235 00:11:43,559 --> 00:11:46,960 Speaker 7: response to the surprise, whereas tips would be more one 236 00:11:47,000 --> 00:11:51,160 Speaker 7: to one. So it's a higher optane kind of inflation hedge. 237 00:11:50,800 --> 00:11:52,640 Speaker 2: On a global scullcus, I know, you're head of global 238 00:11:52,720 --> 00:11:56,000 Speaker 2: multi asset at trow price, where globally do you see 239 00:11:56,000 --> 00:11:58,040 Speaker 2: some of the best opportunities Because I think I've been 240 00:11:58,080 --> 00:12:01,440 Speaker 2: hearing more and more people talk about emerging markets, and 241 00:12:01,440 --> 00:12:03,920 Speaker 2: I'm always a little concerned about that because isn't China 242 00:12:04,040 --> 00:12:06,720 Speaker 2: like a third of the MSCI and why even invest 243 00:12:06,760 --> 00:12:07,080 Speaker 2: in China? 244 00:12:07,080 --> 00:12:08,560 Speaker 6: So how do you think about global allocation? 245 00:12:08,920 --> 00:12:13,600 Speaker 7: So globally we're neutral between stocks outside the US and 246 00:12:13,640 --> 00:12:16,840 Speaker 7: the US. The US is clearly the strongest economy, but 247 00:12:16,960 --> 00:12:20,520 Speaker 7: a lot of this is already priced in. Look, we 248 00:12:20,679 --> 00:12:25,160 Speaker 7: have raging debates in ours Allocation Committee about China because 249 00:12:25,200 --> 00:12:28,600 Speaker 7: we've had an overweight emerging markets. We like to lean 250 00:12:28,679 --> 00:12:31,720 Speaker 7: against the wind. We like to be long asset classes 251 00:12:31,760 --> 00:12:35,280 Speaker 7: when they're really stretched, really cheap, and everybody's on the 252 00:12:35,320 --> 00:12:38,360 Speaker 7: other side of the boat. If you do that over time, 253 00:12:38,440 --> 00:12:41,520 Speaker 7: you can do well. But right now it's a huge 254 00:12:41,520 --> 00:12:45,360 Speaker 7: debate about China. And you know, those that are worried 255 00:12:45,480 --> 00:12:48,760 Speaker 7: about China are taught on my committee, are talking about 256 00:12:49,360 --> 00:12:53,200 Speaker 7: structural changes. This is not the same place to invest 257 00:12:53,240 --> 00:12:57,679 Speaker 7: as it was in the past. Nonetheless, you're so stretched there, 258 00:12:57,679 --> 00:12:59,960 Speaker 7: it's like a coiled spring. You could see a rally. 259 00:13:00,400 --> 00:13:03,320 Speaker 7: You could definitely see a rally, So you know, you 260 00:13:03,360 --> 00:13:05,600 Speaker 7: try to stay close to neutral again there. 261 00:13:06,280 --> 00:13:10,360 Speaker 5: Looking at the US market and videos up another two 262 00:13:10,360 --> 00:13:12,520 Speaker 5: percent today, it's up eighty two percent year to date. 263 00:13:12,760 --> 00:13:15,160 Speaker 5: Super Micros up two hundred and fifteen percent met as 264 00:13:15,200 --> 00:13:19,120 Speaker 5: up forty three percent. Two questions, One, what are you 265 00:13:19,160 --> 00:13:21,680 Speaker 5: doing with this whole momentum trade and how far? How 266 00:13:21,760 --> 00:13:25,200 Speaker 5: much further can we extend? And secondly, I look at 267 00:13:25,240 --> 00:13:27,640 Speaker 5: the Micron earnings. They're going to have their best day 268 00:13:27,640 --> 00:13:31,040 Speaker 5: in thirteen years and they're up to eighteen percent on 269 00:13:31,120 --> 00:13:34,320 Speaker 5: AI growth, So like, can they keep going further with 270 00:13:34,920 --> 00:13:38,280 Speaker 5: the fact that sales are smashing expectations? 271 00:13:38,640 --> 00:13:41,280 Speaker 7: Look, I love that question because I'm working on this 272 00:13:41,360 --> 00:13:44,600 Speaker 7: with the research team this week. I'm writing a note 273 00:13:44,880 --> 00:13:49,440 Speaker 7: for our internal research platform with a cute title that is, 274 00:13:49,760 --> 00:13:53,319 Speaker 7: do you have fomo on the momo because of Yolo? 275 00:13:53,360 --> 00:13:54,760 Speaker 6: Well, that's goin. 276 00:13:55,760 --> 00:13:57,480 Speaker 7: I thought about this for you. I know it's going 277 00:13:57,559 --> 00:13:59,640 Speaker 7: to be on the show you're in the media game 278 00:14:00,160 --> 00:14:06,760 Speaker 7: talking points. Here's the counterintuitive conclusion that we're finding momentum 279 00:14:06,880 --> 00:14:10,480 Speaker 7: is working better than it's ever worked. I have data 280 00:14:10,520 --> 00:14:13,640 Speaker 7: going back to early nineteen nineties, even data going back further. 281 00:14:14,200 --> 00:14:17,360 Speaker 7: It's never worked that well. You can if you look 282 00:14:17,440 --> 00:14:23,040 Speaker 7: back twelve sixteen months, you would Here's here's a dumb strategy. Okay, 283 00:14:23,120 --> 00:14:25,960 Speaker 7: you could just rank the stocks in the S and 284 00:14:25,960 --> 00:14:29,320 Speaker 7: P five hundred by trailing twelve month returns, pick the 285 00:14:29,360 --> 00:14:33,800 Speaker 7: top ten, hold them for a month, repeat. Okay, if 286 00:14:33,840 --> 00:14:38,080 Speaker 7: markets are efficient, finance professors will tell you this should 287 00:14:38,120 --> 00:14:41,560 Speaker 7: not work well in history. It's never worked that well, 288 00:14:41,640 --> 00:14:44,640 Speaker 7: so maybe not so dumb as strategy. Now, when do 289 00:14:44,680 --> 00:14:47,240 Speaker 7: we get worried about momentum And that's why our conclusions 290 00:14:47,240 --> 00:14:50,440 Speaker 7: are counterintuitive. We're not that worried about it, even though 291 00:14:50,440 --> 00:14:55,320 Speaker 7: it's extreme, because it wasn't extreme before the last three 292 00:14:55,360 --> 00:14:59,480 Speaker 7: bear markets. When momentum is in its stop quintile, the 293 00:14:59,640 --> 00:15:03,200 Speaker 7: four return for stocks is an average of fourteen percent. 294 00:15:04,280 --> 00:15:06,760 Speaker 7: Now there's a big there's a big caveat there, which 295 00:15:06,840 --> 00:15:10,880 Speaker 7: is there's a fat tale, which is two thousand when 296 00:15:10,920 --> 00:15:14,000 Speaker 7: we had the mother of all momentum crashes. But the 297 00:15:14,080 --> 00:15:18,320 Speaker 7: difference between that momentum crash and the situation we're in 298 00:15:18,440 --> 00:15:21,640 Speaker 7: right now is that the situation we're in right now, 299 00:15:21,760 --> 00:15:27,760 Speaker 7: momentum stocks are supported by fundamentals. There's huge momentum in 300 00:15:27,920 --> 00:15:31,480 Speaker 7: fundamental so quality and momentum are moving together. They're both 301 00:15:31,520 --> 00:15:34,400 Speaker 7: performing well. If you do an autopsy of the two 302 00:15:34,480 --> 00:15:39,800 Speaker 7: thousand bubble, it was junk stocks, non earners with momentum. 303 00:15:39,880 --> 00:15:41,960 Speaker 6: Yes, that was my belly wick back in the day. 304 00:15:41,960 --> 00:15:43,720 Speaker 2: And I took those companies public, but now we've got 305 00:15:43,720 --> 00:15:45,960 Speaker 2: real companies, real cash flow. Sebastian, thank you so much 306 00:15:45,960 --> 00:15:48,120 Speaker 2: for coming. We really appreciate you being in studio here. 307 00:15:48,360 --> 00:15:51,600 Speaker 2: Sebastian Page, he said of Global Multi Asset and CIO 308 00:15:51,960 --> 00:15:59,640 Speaker 2: at t Rowe Price Bran Lynch duringes she's head of 309 00:15:59,800 --> 00:16:03,080 Speaker 2: mar Get Insighted Equities. In so, Brianna looks like I'm 310 00:16:03,120 --> 00:16:07,120 Speaker 2: just looking at Estero Labs. It's performance yesterday, Reddit today, 311 00:16:07,480 --> 00:16:09,680 Speaker 2: What do you make of this IPO market these days? 312 00:16:11,400 --> 00:16:13,800 Speaker 8: I think that many of the companies that have been 313 00:16:14,200 --> 00:16:18,720 Speaker 8: waiting to IPO hopefully see Asta and say, oh, okay, hey, 314 00:16:18,720 --> 00:16:20,640 Speaker 8: this is a good sign. This is a good sign 315 00:16:20,640 --> 00:16:24,880 Speaker 8: that the market may be right for us. Obviously, Esteria Labs, 316 00:16:24,960 --> 00:16:27,920 Speaker 8: given that it's in the semiconductor space and they're catering 317 00:16:28,360 --> 00:16:32,480 Speaker 8: to cloud computing and AI technologies, they're able to kind of, 318 00:16:32,840 --> 00:16:37,080 Speaker 8: you know, capitalize on the investor demand there. And I 319 00:16:37,120 --> 00:16:38,840 Speaker 8: think it kind of brings back to what a lot 320 00:16:38,880 --> 00:16:41,640 Speaker 8: of companies will be thinking, how do I make AI 321 00:16:41,920 --> 00:16:43,880 Speaker 8: a part of my story? And we've seen that with 322 00:16:43,960 --> 00:16:47,800 Speaker 8: Reddit to talking about how data licensing to language learning 323 00:16:47,800 --> 00:16:51,520 Speaker 8: models will be a big part of their future revenue opportunity. 324 00:16:52,160 --> 00:16:55,360 Speaker 8: So certainly a very different company than is Sarah Labs, 325 00:16:55,400 --> 00:16:57,600 Speaker 8: but an interesting one that I think will be a 326 00:16:57,600 --> 00:16:59,000 Speaker 8: little volatile to watch today. 327 00:16:59,120 --> 00:17:02,320 Speaker 2: Yeah, that'll help ask respective Reddit that Bailey's been reporting 328 00:17:02,360 --> 00:17:05,800 Speaker 2: on about this data aspect to it and getting some 329 00:17:05,880 --> 00:17:09,120 Speaker 2: kind of AI play into that story. I'm not sure 330 00:17:09,160 --> 00:17:10,959 Speaker 2: I buy it. What do you think, Brian? Is that 331 00:17:11,040 --> 00:17:14,240 Speaker 2: is that a reasonable pitch? Is that a reasonable reason 332 00:17:14,280 --> 00:17:15,439 Speaker 2: to take a look at this company? 333 00:17:15,800 --> 00:17:16,159 Speaker 6: Reddit? 334 00:17:17,760 --> 00:17:22,040 Speaker 8: It's not a guaranteed revenue driver. We saw, you know, 335 00:17:22,160 --> 00:17:26,200 Speaker 8: even this past week that FTC is investigating what data 336 00:17:26,240 --> 00:17:30,280 Speaker 8: they actually share with these partners they have. You know, 337 00:17:30,840 --> 00:17:32,440 Speaker 8: is it okay that they share that? If they were 338 00:17:32,480 --> 00:17:34,719 Speaker 8: to have a cease and a system where they can 339 00:17:34,800 --> 00:17:37,200 Speaker 8: no longer share this data, that would be a big 340 00:17:37,240 --> 00:17:41,040 Speaker 8: problem in terms of their future growth opportunity, because you know, 341 00:17:41,080 --> 00:17:44,040 Speaker 8: they've seen their AD revenue grow twenty percent, not a 342 00:17:44,119 --> 00:17:46,960 Speaker 8: number that's exciting a lot of investors. The real bull 343 00:17:47,000 --> 00:17:51,320 Speaker 8: case is on this data licensing opportunity. So if there's 344 00:17:51,320 --> 00:17:54,119 Speaker 8: something that hinders that, you know, it makes the story 345 00:17:54,160 --> 00:17:55,359 Speaker 8: a little less desirable. 346 00:17:55,720 --> 00:17:57,680 Speaker 5: And Brian, this is a deal that was marketed at 347 00:17:57,880 --> 00:18:00,560 Speaker 5: thirty one to thirty four bucks. Pricing it thirty four 348 00:18:01,359 --> 00:18:04,320 Speaker 5: seemed like there would be some divide when I talked 349 00:18:04,359 --> 00:18:08,440 Speaker 5: to venture capitalists and investors on valuation and valuation expectations. 350 00:18:08,600 --> 00:18:10,119 Speaker 5: What's your read of at pricing at the top of 351 00:18:10,119 --> 00:18:10,720 Speaker 5: the range. 352 00:18:11,640 --> 00:18:13,520 Speaker 8: Yeah, the price at the top of the range, obviously, 353 00:18:13,680 --> 00:18:17,400 Speaker 8: you know, gives some sense that there is strong investor 354 00:18:17,560 --> 00:18:20,879 Speaker 8: demand for this company. We haven't seen a social media 355 00:18:21,000 --> 00:18:24,880 Speaker 8: platform go public since Pinterest back in twenty nineteen, so 356 00:18:24,960 --> 00:18:28,280 Speaker 8: perhaps there's some pentep demand there. But when you look 357 00:18:28,320 --> 00:18:31,760 Speaker 8: at Reddit versus some of its public comps, it's a 358 00:18:31,840 --> 00:18:36,240 Speaker 8: smaller player and it's not profitable, so it doesn't have 359 00:18:36,320 --> 00:18:39,640 Speaker 8: you know, this perfect story for those looking to invest 360 00:18:39,640 --> 00:18:43,280 Speaker 8: in the next you know, emerging social media company. And 361 00:18:43,480 --> 00:18:45,399 Speaker 8: to the fact of emerging, this is a nineteen year 362 00:18:45,400 --> 00:18:47,600 Speaker 8: old company. It's been around for a long time. And 363 00:18:48,119 --> 00:18:50,119 Speaker 8: you know, a question with a lot of these private 364 00:18:50,160 --> 00:18:53,440 Speaker 8: companies is how much growth is left because they've grown 365 00:18:53,560 --> 00:18:55,120 Speaker 8: so much in the private markets. 366 00:18:55,520 --> 00:18:59,240 Speaker 2: Brian, are you surprised that we haven't seen better more 367 00:18:59,400 --> 00:19:01,840 Speaker 2: ipox activity over the past I don't know, six to 368 00:19:01,960 --> 00:19:04,720 Speaker 2: nine to twelve months. I mean, we have stock market 369 00:19:04,840 --> 00:19:07,160 Speaker 2: indexes at or near all time highs. 370 00:19:07,560 --> 00:19:08,920 Speaker 6: What's the what's the problem here? 371 00:19:10,359 --> 00:19:13,040 Speaker 8: Yeah, I think all the macro indicators would suggest that 372 00:19:13,080 --> 00:19:17,119 Speaker 8: the market has been or should have been welcoming into IPOs. 373 00:19:17,680 --> 00:19:21,880 Speaker 8: But we saw with kind of the Clavio instacart ARM 374 00:19:22,280 --> 00:19:25,640 Speaker 8: group that went public this fall, they had lack lost 375 00:19:25,680 --> 00:19:28,040 Speaker 8: their IPOs. That being said, ARM is now trading at 376 00:19:28,080 --> 00:19:31,639 Speaker 8: double its IPO price. So another one that's really you know, 377 00:19:31,880 --> 00:19:36,760 Speaker 8: capitalized on this demand for the AI market, Astera Labs, 378 00:19:36,840 --> 00:19:39,120 Speaker 8: I think will be a good indicator for the market. 379 00:19:39,920 --> 00:19:42,480 Speaker 8: And it's more of a pure tech play than Reddit. 380 00:19:42,600 --> 00:19:46,000 Speaker 8: So if I'm a private tech company considering my options, 381 00:19:46,160 --> 00:19:48,399 Speaker 8: maybe my business looks more like a Stera than it 382 00:19:48,400 --> 00:19:50,800 Speaker 8: looks like Reddit, and that makes me feel good about 383 00:19:51,160 --> 00:19:54,280 Speaker 8: the opportunities in the market. But we're hearing from you know, 384 00:19:54,320 --> 00:19:56,440 Speaker 8: the heads of Naise and Nazac that they had these 385 00:19:56,600 --> 00:20:00,000 Speaker 8: deep pipelines of companies that are preparing to go public 386 00:20:00,160 --> 00:20:03,720 Speaker 8: and really there's a finite period of time that they'll 387 00:20:03,840 --> 00:20:06,720 Speaker 8: likely do that, you know, given the election coming up 388 00:20:06,760 --> 00:20:09,080 Speaker 8: later this year, the volatility that could come with that. 389 00:20:09,640 --> 00:20:12,960 Speaker 8: So I think if Reddit has decent performance, it will 390 00:20:13,000 --> 00:20:17,440 Speaker 8: certainly encourage others to follow if Astera alone doesn't. 391 00:20:17,119 --> 00:20:19,560 Speaker 5: Do that, Brionn, At what point do we see private 392 00:20:19,560 --> 00:20:22,719 Speaker 5: equity back companies going public again? We saw bright Spring 393 00:20:22,760 --> 00:20:25,600 Speaker 5: and Amor with its own kind of different flavors within 394 00:20:26,359 --> 00:20:29,760 Speaker 5: investors in holdings. Are we going to see companies kind 395 00:20:29,760 --> 00:20:31,800 Speaker 5: of or management teams just really ripping off the band 396 00:20:31,800 --> 00:20:32,639 Speaker 5: aid and going public. 397 00:20:33,960 --> 00:20:36,720 Speaker 8: Yeah, I think it depends on kind of you know, 398 00:20:37,240 --> 00:20:40,160 Speaker 8: what the story is, and if it's something that they 399 00:20:40,160 --> 00:20:44,080 Speaker 8: think will appeal to public market investors. You know, Birkenstock, 400 00:20:44,200 --> 00:20:47,159 Speaker 8: you know, as a private equity back company on public 401 00:20:47,240 --> 00:20:51,040 Speaker 8: last year along the same time as you know, Instacart 402 00:20:51,080 --> 00:20:55,560 Speaker 8: and those others performed okay but not great, So I think, 403 00:20:55,760 --> 00:20:59,639 Speaker 8: you know, similarly, those companies are sitting on the sidelines. 404 00:20:59,640 --> 00:21:04,760 Speaker 8: The different diference there is that those investors have less 405 00:21:04,800 --> 00:21:08,200 Speaker 8: likely held those investments for ten fifteen years and maybe 406 00:21:08,200 --> 00:21:11,040 Speaker 8: have a little bit more leeway in terms of holding 407 00:21:11,080 --> 00:21:14,440 Speaker 8: in the private markets versus an early stage investor who 408 00:21:14,480 --> 00:21:18,840 Speaker 8: at this point is very eager to sell that investment 409 00:21:18,960 --> 00:21:22,359 Speaker 8: and return capital to LPs and invest in new things. 410 00:21:22,400 --> 00:21:25,600 Speaker 8: So the pressure dynamic there for liquidity is a little different. 411 00:21:26,080 --> 00:21:26,359 Speaker 6: Briann. 412 00:21:26,359 --> 00:21:28,720 Speaker 2: I'm looking through your notes here today. One data point 413 00:21:28,720 --> 00:21:31,040 Speaker 2: you provide it really jumped out at me. The percentage 414 00:21:31,080 --> 00:21:34,000 Speaker 2: of public companies has dropped thirty five percent since the 415 00:21:34,040 --> 00:21:37,080 Speaker 2: mid nineteen eighties when I got my start, while the 416 00:21:37,119 --> 00:21:40,760 Speaker 2: percentage of private companies has jumped by forty three percent 417 00:21:40,840 --> 00:21:41,760 Speaker 2: over the time period. 418 00:21:41,800 --> 00:21:42,600 Speaker 6: Same time period. 419 00:21:43,000 --> 00:21:45,240 Speaker 2: Wow, So, I mean that just shows you kind of 420 00:21:45,240 --> 00:21:48,720 Speaker 2: how the capital markets have changed. I can stay private longer, 421 00:21:49,320 --> 00:21:52,320 Speaker 2: I guess than maybe trying to get the public markets. 422 00:21:52,400 --> 00:21:54,320 Speaker 6: So is anything they're going to change, do you think? 423 00:21:55,680 --> 00:21:58,119 Speaker 8: I think that's a dynamic that's not going to change 424 00:21:58,160 --> 00:22:02,600 Speaker 8: anytime soon. There's just an abundance of capital available in 425 00:22:02,640 --> 00:22:06,040 Speaker 8: the private markets, more so than ever before. I think 426 00:22:06,080 --> 00:22:08,880 Speaker 8: the companies that will feel the pressure to go public 427 00:22:09,000 --> 00:22:12,359 Speaker 8: are these late stage companies that have already raised a 428 00:22:12,400 --> 00:22:14,920 Speaker 8: ton of venture capital. They have a lot of pressure 429 00:22:14,960 --> 00:22:19,320 Speaker 8: from those early investors and shareholders for liquidity. Those aren't 430 00:22:19,359 --> 00:22:22,399 Speaker 8: likely going to be the ones to go public in 431 00:22:22,440 --> 00:22:25,920 Speaker 8: the near future. But to your point, if I'm a 432 00:22:25,920 --> 00:22:30,280 Speaker 8: three four five year old private company who can raise 433 00:22:30,560 --> 00:22:33,640 Speaker 8: plenty of capital at the earlier stages in the private markets, 434 00:22:33,960 --> 00:22:36,760 Speaker 8: I don't have to, you know, disclose on my financials. 435 00:22:36,880 --> 00:22:40,480 Speaker 8: I have a little bit more privacy, almost like as 436 00:22:40,480 --> 00:22:42,639 Speaker 8: I'm growing through the space, I don't have the daily 437 00:22:42,680 --> 00:22:45,600 Speaker 8: mark to marks. That for a lot of companies sounds 438 00:22:45,640 --> 00:22:47,600 Speaker 8: like a better position to be in. So I think 439 00:22:47,880 --> 00:22:51,800 Speaker 8: companies will continue to stay private in those early mid 440 00:22:51,960 --> 00:22:55,320 Speaker 8: years and look to go public later in their life 441 00:22:55,320 --> 00:22:57,640 Speaker 8: cycles than they did ten fifteen years ago. 442 00:22:58,040 --> 00:23:00,800 Speaker 5: What's your what are your expectations for deal flow and 443 00:23:00,880 --> 00:23:03,439 Speaker 5: IPO volumes in twenty twenty four, because when I talk 444 00:23:03,480 --> 00:23:06,240 Speaker 5: to bankers, it still feels like the year twenty twenty 445 00:23:06,240 --> 00:23:07,240 Speaker 5: five keeps coming up. 446 00:23:08,520 --> 00:23:11,200 Speaker 8: Yeah, I think that a lot rides on these early 447 00:23:11,280 --> 00:23:15,439 Speaker 8: IPOs and how well they do. They're certainly lentsy of 448 00:23:15,480 --> 00:23:18,560 Speaker 8: companies who want to ipo or are feeling the pressure 449 00:23:18,600 --> 00:23:21,760 Speaker 8: to ipo, but they are a little nervous to rip 450 00:23:21,800 --> 00:23:24,879 Speaker 8: off the band aid. Last year's IPOs didn't really, you know, 451 00:23:24,960 --> 00:23:27,719 Speaker 8: give them the boost of confidence that they needed to 452 00:23:27,800 --> 00:23:30,919 Speaker 8: do that. So I don't think we were certainly not 453 00:23:31,000 --> 00:23:33,680 Speaker 8: going to see a twenty twenty twenty twenty one year, 454 00:23:34,040 --> 00:23:37,479 Speaker 8: but maybe we see a more normal IPO year than 455 00:23:37,520 --> 00:23:39,119 Speaker 8: we did last year. You know, when you look at 456 00:23:39,119 --> 00:23:41,800 Speaker 8: this year, already, proceeds are up one hundred and sixty 457 00:23:41,840 --> 00:23:45,159 Speaker 8: nine percent versus last year deal counts up fifteen percent, 458 00:23:45,520 --> 00:23:50,160 Speaker 8: So the spigott, I guess, is widening a bit. There's 459 00:23:50,280 --> 00:23:53,679 Speaker 8: more flow happening, so I think, you know, having a 460 00:23:53,760 --> 00:23:57,560 Speaker 8: normal year versus a blockbuster year or an extremely quiet 461 00:23:57,600 --> 00:24:00,400 Speaker 8: year is probably the right thing for the market now. 462 00:24:00,680 --> 00:24:02,679 Speaker 2: Brian, thank you so much for joining us. Really appreciate 463 00:24:02,720 --> 00:24:05,399 Speaker 2: getting your comments and your insights. They're prea and lynched. 464 00:24:16,320 --> 00:24:18,320 Speaker 2: All right, your daily look at the front pages around 465 00:24:18,320 --> 00:24:19,920 Speaker 2: the world. List me tell you what do you see 466 00:24:19,960 --> 00:24:21,919 Speaker 2: in the newspapers this morning that got your attention? 467 00:24:21,920 --> 00:24:23,640 Speaker 1: All right, We're starting with the New York Times. They're 468 00:24:23,640 --> 00:24:26,040 Speaker 1: saying New York City schools they're dealing with a spike 469 00:24:26,080 --> 00:24:29,679 Speaker 1: in problems from kids. They're not behaving that well. A 470 00:24:29,760 --> 00:24:32,840 Speaker 1: lot of the issues are those lower level dissurbances. Educators 471 00:24:32,880 --> 00:24:34,960 Speaker 1: are saying, though, students are still having a hard time 472 00:24:35,040 --> 00:24:37,720 Speaker 1: emotionally after the pandemic, so that's what they're relating it to. 473 00:24:37,800 --> 00:24:40,399 Speaker 1: They're saying kids are having trouble talking things out, so 474 00:24:40,520 --> 00:24:43,640 Speaker 1: now they're hitting, they're fighting, so you have those kind 475 00:24:43,640 --> 00:24:46,600 Speaker 1: of issues. They have issued from the police department. It 476 00:24:46,600 --> 00:24:49,520 Speaker 1: says last school year there were more than fourteen thousand 477 00:24:49,520 --> 00:24:52,240 Speaker 1: school safety incidents. But if you compare that to twenty 478 00:24:52,280 --> 00:24:55,800 Speaker 1: eighteen twenty nineteen before the pandemic, there were just over 479 00:24:55,880 --> 00:24:58,479 Speaker 1: eleven thousand. So they're saying kids are getting frustrated, they 480 00:24:58,520 --> 00:25:00,640 Speaker 1: don't know how to deal with their emotions because that's 481 00:25:00,640 --> 00:25:03,640 Speaker 1: what the pandemic turned them towards. So that's the issue. 482 00:25:03,440 --> 00:25:05,720 Speaker 6: Because that's a year and a half of homeschooling and 483 00:25:05,760 --> 00:25:07,840 Speaker 6: all that remote learning and frustration. 484 00:25:08,000 --> 00:25:09,720 Speaker 1: I guess maybe you. 485 00:25:09,720 --> 00:25:12,639 Speaker 6: Can't pay these teachers enough, is my simple takeaway. 486 00:25:12,720 --> 00:25:15,359 Speaker 1: I know it's tough, and especially as a parent of myself, 487 00:25:15,400 --> 00:25:18,000 Speaker 1: like knowing when the kids came home what these teachers 488 00:25:18,000 --> 00:25:20,280 Speaker 1: have to deal with because the parents were turned into 489 00:25:20,320 --> 00:25:21,960 Speaker 1: teachers in a way at that point. Too. 490 00:25:22,480 --> 00:25:24,240 Speaker 6: Goodness behind us. Okay, what else we got? 491 00:25:24,560 --> 00:25:28,040 Speaker 1: So we're talking about couples meeting on Discord, not the 492 00:25:28,240 --> 00:25:31,680 Speaker 1: average dating This is not a dating app. This is Discord. Okay, 493 00:25:31,760 --> 00:25:34,520 Speaker 1: So what Discord is? It draws in about two hundred 494 00:25:34,560 --> 00:25:38,240 Speaker 1: million monthly users. But it's an online community. So it's 495 00:25:38,280 --> 00:25:41,280 Speaker 1: like people with hobbies. They share similar interests, so they 496 00:25:41,320 --> 00:25:43,479 Speaker 1: go on and they form these groups. It could be 497 00:25:43,520 --> 00:25:47,240 Speaker 1: anything like astronomy, fans, you know, fantasy football fans, anything 498 00:25:47,320 --> 00:25:49,800 Speaker 1: like that. So instead of you know, using the apps 499 00:25:49,800 --> 00:25:54,640 Speaker 1: that's swipeping, No, they're going on here. They're going into 500 00:25:54,640 --> 00:25:57,440 Speaker 1: these groups and in those groups, that's where they're fine 501 00:25:57,640 --> 00:26:00,120 Speaker 1: their ma their love interests. So it's kind of like 502 00:26:00,560 --> 00:26:02,760 Speaker 1: thinking about the modern version, you know how like we 503 00:26:02,840 --> 00:26:06,000 Speaker 1: used to go to the bargle wherever meet people and people, 504 00:26:07,119 --> 00:26:09,160 Speaker 1: but instead of going into the bar, going into these 505 00:26:09,200 --> 00:26:12,639 Speaker 1: online communities, and that's how they're starting to meet people. 506 00:26:12,680 --> 00:26:14,720 Speaker 6: So I've never heard of discord. I have to admit, 507 00:26:14,840 --> 00:26:16,520 Speaker 6: it's kind of like a competitor to Reddit. 508 00:26:16,600 --> 00:26:18,760 Speaker 5: It was one of the things that the youth were 509 00:26:19,200 --> 00:26:21,600 Speaker 5: hanging out in during the pandemic. I think the fascinating 510 00:26:21,600 --> 00:26:25,240 Speaker 5: thing on the story though long distance relationship between Stuttgard, 511 00:26:25,320 --> 00:26:27,320 Speaker 5: Germany and Birmingham Alibim. 512 00:26:27,320 --> 00:26:31,000 Speaker 1: Was they're doing it via video conferencing, and that couple 513 00:26:31,080 --> 00:26:34,840 Speaker 1: actually they met each other's parents, but they travel together. 514 00:26:34,920 --> 00:26:38,280 Speaker 1: They still live apart. They're trying to make it work, 515 00:26:38,640 --> 00:26:41,639 Speaker 1: but I don't know. I mean, you're getting married pretty soon. 516 00:26:41,520 --> 00:26:42,720 Speaker 6: Bailand married soon. 517 00:26:45,480 --> 00:26:45,840 Speaker 5: Fashioned. 518 00:26:48,960 --> 00:26:52,480 Speaker 1: Well, some of those are leading to engagements, which it 519 00:26:52,560 --> 00:26:54,399 Speaker 1: needs to us. From my next story, this is about 520 00:26:54,400 --> 00:26:58,399 Speaker 1: the owner of Zales, you know, Jared Jewelers signat Jewelers 521 00:26:58,440 --> 00:27:01,560 Speaker 1: saying that sub couples are waiting to get engaged this year. 522 00:27:01,640 --> 00:27:03,399 Speaker 1: That's because of what we've been talking about, you know, 523 00:27:03,440 --> 00:27:07,480 Speaker 1: inflation and certain labor market. It's pushing there to you 524 00:27:07,520 --> 00:27:10,560 Speaker 1: know say yes, dates back a little bit, which is 525 00:27:10,600 --> 00:27:13,080 Speaker 1: a turnaround for the company because they were saying that 526 00:27:13,160 --> 00:27:15,919 Speaker 1: engagements would rise this year, but now they're kind of 527 00:27:16,080 --> 00:27:19,160 Speaker 1: doing a little bout face. They're saying, well, actually no, 528 00:27:19,760 --> 00:27:20,639 Speaker 1: it's not gonna happen. 529 00:27:20,720 --> 00:27:23,560 Speaker 6: So still the engage ring that hasn't changed, right, that 530 00:27:23,680 --> 00:27:24,520 Speaker 6: still hasn't changed. 531 00:27:24,560 --> 00:27:26,520 Speaker 1: It's just how many people are going to buy them 532 00:27:26,520 --> 00:27:27,000 Speaker 1: this year. 533 00:27:27,440 --> 00:27:29,640 Speaker 6: So sales is big, right, I mean I think there 534 00:27:29,640 --> 00:27:30,440 Speaker 6: were like one. 535 00:27:30,000 --> 00:27:32,560 Speaker 1: Of Sales and K Jewelers too, that's their other that's 536 00:27:32,600 --> 00:27:33,160 Speaker 1: their other one. 537 00:27:33,400 --> 00:27:35,360 Speaker 6: So they own own all of that. 538 00:27:35,760 --> 00:27:36,879 Speaker 1: K Jewelers and Zales. 539 00:27:36,960 --> 00:27:37,960 Speaker 6: Yes, that's significent. 540 00:27:38,520 --> 00:27:41,360 Speaker 1: Yeah, But the number of engagements, it's recovering. They had 541 00:27:41,359 --> 00:27:43,679 Speaker 1: this like dry dating spell during the pandemic. A lot 542 00:27:43,720 --> 00:27:46,000 Speaker 1: of people went through that. But two point one million 543 00:27:46,000 --> 00:27:48,880 Speaker 1: couples became engaged last year. But it's still the lowest 544 00:27:48,920 --> 00:27:51,399 Speaker 1: in the number of years really we'll see. 545 00:27:51,440 --> 00:27:51,840 Speaker 6: I don't know. 546 00:27:52,000 --> 00:27:53,960 Speaker 5: Yeah, I got engaged during the pandemic. 547 00:27:53,640 --> 00:27:55,600 Speaker 6: But you got engaged during the pandemic. You got engaged 548 00:27:55,640 --> 00:27:56,960 Speaker 6: during the during the pandemic. 549 00:27:57,560 --> 00:27:59,040 Speaker 5: September twenty twenty two. 550 00:27:59,280 --> 00:28:00,919 Speaker 6: I think, okay, that's kind of the end of the day. 551 00:28:01,119 --> 00:28:02,800 Speaker 5: Yeah, I guess, yeah, life was kind of normal. I 552 00:28:02,840 --> 00:28:04,600 Speaker 5: forget what when we timestamp these things. 553 00:28:04,600 --> 00:28:06,040 Speaker 6: I just think, you know, I just for me. It 554 00:28:06,080 --> 00:28:08,280 Speaker 6: was when she got the vaccination done. Move on. 555 00:28:08,440 --> 00:28:08,640 Speaker 3: Yeah. 556 00:28:09,040 --> 00:28:10,320 Speaker 2: They made me come back to work on ride the 557 00:28:10,359 --> 00:28:12,159 Speaker 2: subway every day, so I figured that that's got to 558 00:28:12,160 --> 00:28:12,520 Speaker 2: be the end. 559 00:28:12,920 --> 00:28:15,880 Speaker 6: That's that's an indication, right, yeah, yeah, all right, what's 560 00:28:16,119 --> 00:28:16,800 Speaker 6: what's a crookie? 561 00:28:16,960 --> 00:28:19,120 Speaker 1: So a crookie? You remember the crow nut? 562 00:28:19,200 --> 00:28:22,040 Speaker 6: It was like the fig the Big Faith in New York. 563 00:28:22,160 --> 00:28:23,040 Speaker 6: No one could get them. 564 00:28:23,040 --> 00:28:25,760 Speaker 1: You waited on these lines forever. They sold out. So 565 00:28:25,840 --> 00:28:29,480 Speaker 1: now you have the crookie. It's this new pastry from France. 566 00:28:29,520 --> 00:28:32,119 Speaker 1: It was from Paris. It's a mash up between a 567 00:28:32,160 --> 00:28:35,560 Speaker 1: croissant and a cookie. So some have the cookie in 568 00:28:35,600 --> 00:28:39,360 Speaker 1: the croissant, some have the cookie, you know, surrounding the croissant. 569 00:28:39,400 --> 00:28:42,120 Speaker 1: It's all these kind of different ways. But there's a 570 00:28:42,160 --> 00:28:45,240 Speaker 1: place in the city. They have Janey's Life Changing bake Goods. Okay, 571 00:28:45,240 --> 00:28:48,120 Speaker 1: they have three locations. They sell for seven dollars and 572 00:28:48,160 --> 00:28:51,160 Speaker 1: fifty cents each, so it's a big place. But they're 573 00:28:51,200 --> 00:28:53,480 Speaker 1: selling out within hours. I mean at this place they own, 574 00:28:53,520 --> 00:28:57,400 Speaker 1: they're only offered on Tuesdays, Wednesdays, Saturdays and Sundays. That's it. 575 00:28:57,640 --> 00:28:59,680 Speaker 1: So people line up, they can't get them. There's another 576 00:28:59,720 --> 00:29:01,320 Speaker 1: place set a Pawnees. 577 00:29:01,360 --> 00:29:02,200 Speaker 6: That's another place. 578 00:29:02,040 --> 00:29:04,160 Speaker 1: Where you can get these, But it's just the hot 579 00:29:04,240 --> 00:29:05,600 Speaker 1: new craze. I guess people are. 580 00:29:05,480 --> 00:29:08,280 Speaker 6: Bored and they just want something different. I don't know. 581 00:29:08,480 --> 00:29:11,480 Speaker 5: We were in the city in the East Village over 582 00:29:11,520 --> 00:29:14,120 Speaker 5: the weekend for a friend's birthday, doing a pizza tour, 583 00:29:14,160 --> 00:29:16,240 Speaker 5: and I was the amount of places you walk by 584 00:29:16,320 --> 00:29:19,120 Speaker 5: where you're just like, only in Manhattan would people wait 585 00:29:19,160 --> 00:29:21,680 Speaker 5: in line for forty five minutes to buy a nine 586 00:29:21,720 --> 00:29:22,520 Speaker 5: dollars coffee. 587 00:29:23,280 --> 00:29:26,520 Speaker 6: I don't know. I'm not yeah, I don't know it. 588 00:29:26,600 --> 00:29:28,560 Speaker 1: I guess it's just to post a picture on Instagram. 589 00:29:28,720 --> 00:29:31,840 Speaker 6: I don't know. And again, where did you get the story? 590 00:29:31,960 --> 00:29:36,880 Speaker 1: This was the New York Yeah, yeah, good stuff. 591 00:29:36,920 --> 00:29:39,160 Speaker 6: Lise Miteya, thank you so much. We appreciated here. 592 00:29:39,280 --> 00:29:41,720 Speaker 2: This is the Bloomberg Surveillance Podcast, bringing you the best 593 00:29:41,800 --> 00:29:45,400 Speaker 2: in economics, geopolitics, finance, and investment. You can also watch 594 00:29:45,480 --> 00:29:48,960 Speaker 2: the show live on YouTube. Visit the Bloomberg Podcast channel 595 00:29:49,000 --> 00:29:51,880 Speaker 2: on YouTube to see the show weekday mornings from seven 596 00:29:51,960 --> 00:29:54,680 Speaker 2: to ten Eastern from our global headquarters at New York City. 597 00:29:54,960 --> 00:29:58,240 Speaker 2: Subscribe to the podcast on Apple, Spotify, or anywhere else 598 00:29:58,280 --> 00:30:01,680 Speaker 2: you listen, and it's Alwaysloomberg Radio, the Bloomberg Terminal, and 599 00:30:01,720 --> 00:30:02,760 Speaker 2: the Bloomberg Business app. 600 00:30:09,880 --> 00:30:10,440 Speaker 1: Mm hmm