WEBVTT - Bloomberg Surveillance TV: October 31st, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.440 with Lisa Bromwitz and a Marie Hortern. Join us each 0:00:18.520 --> 0:00:21.440 day for insight from the best in markets, economics, and 0:00:21.480 --> 0:00:24.759 geopolitics from our global headquarters in New York City. We 0:00:24.800 --> 0:00:27.479 are live on Bloomberg Television weekday mornings from six to 0:00:27.560 --> 0:00:31.040 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.240 --> 0:00:33.519 or anywhere else you listen, and as always on the 0:00:33.520 --> 0:00:35.880 Bloomberg Terminal and the Bloomberg Business app. 0:00:36.400 --> 0:00:39.360 Socks rebounding following a rough day on Wall Street, Jim 0:00:39.400 --> 0:00:42.840 Karen of Morgus Stanley Investment Runage Management, writing, we expect 0:00:42.880 --> 0:00:45.960 turbulence in Q four as we gain more clarity on 0:00:46.000 --> 0:00:48.920 what the initial conditions will be for twenty twenty six. 0:00:49.159 --> 0:00:52.320 Jim joins us. Now, Jim, We're always supposed to see turbulence. 0:00:52.360 --> 0:00:54.960 Why have we not seen any turbulence in the face 0:00:55.000 --> 0:00:58.320 of so much doubt? And yet, frankly, AI companies, they'll 0:00:58.360 --> 0:00:59.840 just keep on delivering. 0:01:00.480 --> 0:01:04.840 Good morning and Happy Halloween. So look, I mean the markets. 0:01:05.160 --> 0:01:07.600 I don't think the markets are experiencing the turbulence for 0:01:07.800 --> 0:01:09.560 a lot of the things that you were just discussing 0:01:09.760 --> 0:01:12.919 is that the big leaders the narrowness of this rally 0:01:12.959 --> 0:01:15.680 that we've had, which is a large cap tech are 0:01:15.720 --> 0:01:20.319 printing really strong numbers. Now, those might be just a 0:01:20.319 --> 0:01:22.360 handful of stocks. When we look at the rest of 0:01:22.400 --> 0:01:25.520 the stocks and the S and P five hundred, there 0:01:25.560 --> 0:01:27.959 are some cracks, and it is reflecting some of the 0:01:27.959 --> 0:01:31.000 weakness in the broader economy. I know we haven't gotten 0:01:31.000 --> 0:01:33.280 any of the data yet, but we understand that things 0:01:33.280 --> 0:01:37.040 aren't necessarily accelerating. What we have to recognize is that 0:01:37.080 --> 0:01:40.000 the market is not the economy, and the economy. 0:01:39.560 --> 0:01:40.440 Is not the market. 0:01:40.680 --> 0:01:42.960 So when you think more broadly about the S and 0:01:43.000 --> 0:01:45.280 P five hundred, say the S and P four ninety 0:01:45.280 --> 0:01:48.880 three x the mag seven, what you're really looking at 0:01:49.200 --> 0:01:52.680 is a broader picture also of the economy. So therefore, 0:01:52.840 --> 0:01:56.680 if the economy is moderating at some point, then you're 0:01:56.880 --> 0:02:00.640 likely to see those broader equities also some moderate But 0:02:00.880 --> 0:02:03.760 the dominance of those mag seven is so strong, and 0:02:03.840 --> 0:02:06.720 the earnings and the numbers that they're printing are so 0:02:07.000 --> 0:02:10.400 monstrously strong, it's carrying the rest of the markets. So 0:02:10.440 --> 0:02:12.760 that's why we're not really seeing the turbulence. It really 0:02:12.760 --> 0:02:14.960 just depends where you look. If you look in other 0:02:15.120 --> 0:02:17.520 broader sectors of the markets, you might see some of 0:02:17.520 --> 0:02:20.040 that turbulence. And that's really where we think some of 0:02:20.080 --> 0:02:22.360 the opportunity is going into twenty twenty six. 0:02:23.160 --> 0:02:23.960 Can you build on that? 0:02:24.120 --> 0:02:25.520 Where do you think we're going to see some sort 0:02:25.560 --> 0:02:28.520 of rebound given the fact that some people are speculating 0:02:28.560 --> 0:02:31.880 you can see a growing amount of this pain, given 0:02:31.919 --> 0:02:34.920 the fact that prices are expected to continue to rise, 0:02:34.960 --> 0:02:37.920 albeit not necessarily at the levels that we find twenty 0:02:38.080 --> 0:02:40.480 twenty one in twenty twenty two, and there is this 0:02:40.600 --> 0:02:44.320 feeling that this weakness in the lower income sphere is 0:02:44.360 --> 0:02:45.480 just continuing to build. 0:02:46.400 --> 0:02:48.359 Yeah, so we have to look at the full picture here, right. 0:02:48.360 --> 0:02:50.440 So one of these things goes back to the tax 0:02:50.520 --> 0:02:53.680 package that you know, one big beautiful bill that got 0:02:53.720 --> 0:02:57.800 passed and effectively starting to think about the consumer and 0:02:57.840 --> 0:03:00.880 what stimulus package they're going to get next year in 0:03:00.919 --> 0:03:04.600 the form of bigger tax deductions. That number in terms 0:03:04.680 --> 0:03:07.400 of what the consumer what tax payers are going to 0:03:07.400 --> 0:03:10.480 pay less is somewhere on the order of one hundred 0:03:10.520 --> 0:03:13.760 and sixty one hundred and seventy billion dollars, So that's 0:03:13.800 --> 0:03:16.000 money that's going to be in the pocket of the consumer. 0:03:16.040 --> 0:03:19.239 As we know consumption seventy percent of GDP. That can 0:03:19.320 --> 0:03:24.680 keep consumption relatively robust, even though the labor market picture, 0:03:24.680 --> 0:03:27.639 which is weak right now, it's currently weak right now, 0:03:28.240 --> 0:03:31.000 might start to improve as we move into twenty twenty six. 0:03:31.480 --> 0:03:35.560 Most economists forecasts into twenty twenty six is that we 0:03:35.600 --> 0:03:39.040 will have better economic growth versus twenty twenty five. So 0:03:39.080 --> 0:03:42.960 if you have a growing economy, likely in twenty twenty six, 0:03:43.400 --> 0:03:46.160 and you have enough slack in the labor market at 0:03:46.160 --> 0:03:49.760 this point to keep wages at a reasonable price, than 0:03:49.800 --> 0:03:52.880 the profit margins and the earnings margins from any of 0:03:52.880 --> 0:03:56.680 these companies can stay somewhat afloat. So we have to 0:03:56.720 --> 0:04:00.000 recognize that whether it's accelerated depreciation, all of the various 0:04:00.000 --> 0:04:02.160 things that came out of the tax package, this is 0:04:02.200 --> 0:04:05.400 going to be a tailwind as we move into as 0:04:05.400 --> 0:04:06.720 we move into twenty twenty six. 0:04:06.920 --> 0:04:09.320 And Jim, I know you, and is the old adage 0:04:09.360 --> 0:04:11.480 of many people saying that the stock market is not 0:04:11.560 --> 0:04:15.320 the economy. Is that kind of changing though, because nearly 0:04:15.480 --> 0:04:19.520 half of all household's own equities. It is a record 0:04:19.520 --> 0:04:23.200 exposure from everyday people to this equity market. Have we 0:04:23.360 --> 0:04:26.760 entered a scenario where this time around the put from 0:04:27.040 --> 0:04:31.120 take your pick from the fed from the President has 0:04:31.120 --> 0:04:34.240 gotten all the more important just because of household exposure 0:04:34.279 --> 0:04:34.920 to equities. 0:04:35.680 --> 0:04:37.400 Yeah, so it's a good point, right. 0:04:37.440 --> 0:04:40.080 So the way I think about this is that conditions 0:04:40.120 --> 0:04:43.280 have become increasingly fragile. As this market has moved up, 0:04:43.520 --> 0:04:47.000 people's overall equity exposure has also moved up too, meaning 0:04:47.040 --> 0:04:49.599 that their wealth effect is tied to what's happening in 0:04:49.640 --> 0:04:53.080 the markets. And like any other time in markets, there 0:04:53.160 --> 0:04:55.720 tend to be drawdowns and corrections and things like that, 0:04:55.800 --> 0:04:59.000 and that can have a more of an outsized impact 0:04:59.080 --> 0:05:02.760 on consumer spending in consumer psychology, because as you point 0:05:02.800 --> 0:05:06.120 out that there is an attachment to the markets. But 0:05:06.440 --> 0:05:10.120 that being said, most people, I would hope, when they're 0:05:10.160 --> 0:05:13.760 investing in the markets, have a diversified portfolio that if 0:05:13.800 --> 0:05:17.360 we do see this correction that may happen in the future. 0:05:17.400 --> 0:05:20.200 At some point in the future, I think it's likely 0:05:20.279 --> 0:05:23.840 to happen amongst the leaders currently right now, it's really 0:05:24.000 --> 0:05:27.800 probably a large cap tech correction. Maybe that comes I'm 0:05:27.800 --> 0:05:30.799 not forecasting that, but maybe that comes at some point. 0:05:30.960 --> 0:05:34.000 But if you have a diversified portfolio, I think that 0:05:34.080 --> 0:05:38.240 people's broader portfolios, well diversified portfolios, will hold it better 0:05:38.600 --> 0:05:42.479 than what the actual headline of an equity drawdown might 0:05:42.520 --> 0:05:43.119 actually show. 0:05:43.440 --> 0:05:45.120 So it really gets down to that. 0:05:45.120 --> 0:05:46.919 It's a hard question to answer because I don't know 0:05:46.960 --> 0:05:50.599 how everybody's positioned, but I would expect that most people 0:05:50.600 --> 0:05:51.920 are pretty well diversified. 0:05:52.080 --> 0:05:54.960 A lot of the diversification, though, Jim, this year has 0:05:55.040 --> 0:05:57.719 come in the form of gold, and we've seen incredible 0:05:57.800 --> 0:06:01.840 volatility starting this week out with a three percent decline. 0:06:02.160 --> 0:06:03.000 Is that a concern? 0:06:03.200 --> 0:06:06.120 Is gold a good way to diversify, especially at these 0:06:06.200 --> 0:06:09.240 levels where some serious volatilities being introduced. 0:06:10.040 --> 0:06:12.720 Yeah, look, I mean it's one of these subjects here 0:06:12.760 --> 0:06:14.840 where the price has gone up quite a bit. So 0:06:15.040 --> 0:06:17.080 so anything that you say against that is like, well, 0:06:17.120 --> 0:06:19.599 you've been wrawing in the markets and what we don't 0:06:19.640 --> 0:06:22.040 have a position in gold in our portfolios? 0:06:22.720 --> 0:06:22.800 Do? 0:06:22.920 --> 0:06:25.279 I think it's a reasonable way to diversify. 0:06:25.400 --> 0:06:27.920 Sure, you know, if you have, you know, a longer 0:06:28.040 --> 0:06:31.080 term view and a broader portfolio, absolutely holding some gold 0:06:31.320 --> 0:06:33.640 is always going to be a good idea, But are 0:06:33.680 --> 0:06:35.800 there other things that you could also own too? 0:06:35.839 --> 0:06:38.200 Could you own high quality US treasuries? 0:06:38.200 --> 0:06:42.159 Could you own high quality investment grade bonds? Earn some 0:06:42.240 --> 0:06:45.560 income and at least get some positive carry that should 0:06:45.600 --> 0:06:49.039 be able to preserve capital and preserve income and things 0:06:49.080 --> 0:06:49.440 like that. 0:06:49.760 --> 0:06:53.080 So when I think about a portfolio for people who 0:06:53.120 --> 0:06:53.360 you know. 0:06:53.279 --> 0:06:56.520 Who are broadly investing, they generally need some liquidity that 0:06:56.600 --> 0:06:58.720 and they also want to get some income. So that's 0:06:58.760 --> 0:07:01.440 why we think about the you know, the more of 0:07:01.320 --> 0:07:05.200 the broader equity market, including large captach, but then also 0:07:05.320 --> 0:07:09.320 thinking about other items. But really at the margin gold 0:07:09.320 --> 0:07:11.920 and I think gold has become very speculative at this point, 0:07:12.040 --> 0:07:14.680 and I think people are chasing a lot of those returns. 0:07:15.080 --> 0:07:18.520 Stay with US, MALPLINPEX, Savana's coming up off to this. 0:07:27.160 --> 0:07:29.600 Apple's AAA is getting a boost following a revenue beat 0:07:29.640 --> 0:07:33.000 and an upbeat holiday forecast. Gene Mounster of Deepwater Asset 0:07:33.000 --> 0:07:35.880 Management writing this, I expect Apple to be the best 0:07:35.880 --> 0:07:38.280 performing A mag seven through the end of the year. 0:07:38.320 --> 0:07:39.240 Gene joins US. 0:07:39.160 --> 0:07:42.040 Now Gene Apple best performing. 0:07:42.480 --> 0:07:47.440 Why it's pretty straightforward. There's two big levers. First is 0:07:47.480 --> 0:07:50.960 that iPhone demand for the next three quarters is likely 0:07:51.000 --> 0:07:53.360 going to outpace the street. The street's looking for around 0:07:53.440 --> 0:07:56.520 seven percent. I expect it to be ten percent. That, 0:07:56.640 --> 0:07:58.560 of course, is one of the big focus. That's why 0:07:58.600 --> 0:08:01.600 the stock was moving around after market yesterday. It's all 0:08:01.640 --> 0:08:04.760 about the iPhone. So that piece, and it begs the 0:08:04.840 --> 0:08:07.560 question of why is the iPhone going to be better? 0:08:07.600 --> 0:08:11.360 It's not about AI features, It's less about product features. 0:08:11.800 --> 0:08:14.920 It's more about this massive upgrade pool they had back. 0:08:14.800 --> 0:08:15.800 In twenty twenty one. 0:08:15.840 --> 0:08:20.280 As a reminder, that year, iPhone group thirty nine percent, 0:08:20.520 --> 0:08:24.320 huge growth, and then the subsequent fifteen quarters it basically 0:08:24.560 --> 0:08:27.360 was down a half of percent. And now we're starting 0:08:27.400 --> 0:08:30.720 to reap the benefits of that big cycle. So that's 0:08:30.760 --> 0:08:33.240 one piece is just we're going to see some better 0:08:33.280 --> 0:08:36.800 iPhone numbers and expectations. And the second is that the 0:08:37.920 --> 0:08:41.760 Apple Intelligence bar is just so low coming into the 0:08:41.880 --> 0:08:45.120 new SI next year, and I think that hope springs 0:08:45.120 --> 0:08:48.040 eternal when it comes to investors, and when it comes 0:08:48.080 --> 0:08:51.760 to a feature like Apple Intelligence that I believe is 0:08:51.800 --> 0:08:54.760 going to be the biggest step forward since the iPhone itself. 0:08:54.760 --> 0:08:57.320 I mean, this is a massive potential for them to 0:08:57.360 --> 0:09:01.840 contextualize personal data with some of a digital assistant, and 0:09:02.679 --> 0:09:04.800 you know they've set this high bar out that it's. 0:09:04.679 --> 0:09:05.560 Going to be next year. 0:09:05.640 --> 0:09:07.480 Your own Mark German is seeing that it's going to 0:09:07.480 --> 0:09:10.960 be kind of March March April timeframe, and I think 0:09:11.000 --> 0:09:13.520 that anticipation that's going to be good for the multiple. 0:09:13.559 --> 0:09:15.760 So when you put those two together, I think that 0:09:15.920 --> 0:09:18.199 sales are going to be better because the iPhone upgrade pool. 0:09:18.320 --> 0:09:22.359 And then separately, I think the multiple expands because anticipation 0:09:22.600 --> 0:09:25.199 of what's going to happen with Apple Intelligence gene. 0:09:25.240 --> 0:09:29.000 We were speaking with Dan Ives earlier of what Bush securities, 0:09:29.040 --> 0:09:31.160 and he said that he expects Apple to partner with 0:09:31.160 --> 0:09:33.680 the likes of Google with some sort of a Gemini 0:09:33.760 --> 0:09:37.120 partnership to provide some of the heavy lifting for the 0:09:37.200 --> 0:09:38.000 AI effort. 0:09:38.360 --> 0:09:39.640 Is that something that you're expecting. 0:09:39.760 --> 0:09:42.240 Is that kind of the underpinning of the optimism around 0:09:42.240 --> 0:09:42.840 Apple AI. 0:09:44.600 --> 0:09:46.920 That's part of it, And I think Dan's definitely onto 0:09:47.000 --> 0:09:51.480 something that what's going on with Gemini and just Apple 0:09:51.520 --> 0:09:56.160 working beyond GPT and OpenAI, and what they have told 0:09:56.240 --> 0:09:59.079 us back at WWDC in June is that they are 0:09:59.120 --> 0:10:03.000 open to other helpers, other platforms, other large language models 0:10:03.000 --> 0:10:07.120 and they've specifically pointed out to Gemini. The essential question 0:10:07.720 --> 0:10:11.200 is just how much is this just in terms of 0:10:11.240 --> 0:10:13.600 the menu for developers. Are they going to just allow 0:10:13.600 --> 0:10:16.439 developers to use the Gemini model when they build iOS 0:10:16.480 --> 0:10:20.079 apps or is this something bigger where they really lean 0:10:20.240 --> 0:10:23.440 on Gemini to power this new serie experience. And so 0:10:24.000 --> 0:10:27.839 it is a daunting task to take this personalized data 0:10:27.960 --> 0:10:31.440 and do this contextual build these personalized bots around it, 0:10:31.480 --> 0:10:34.160 and so I expect them to pull from more than 0:10:34.200 --> 0:10:37.360 one more than just opening eye to deliver that. So 0:10:37.400 --> 0:10:39.880 I think he's onto something that One of the other 0:10:39.920 --> 0:10:42.360 big questions around this is what does this mean in 0:10:42.440 --> 0:10:45.520 terms of financially And in the case where they would 0:10:45.559 --> 0:10:47.720 be doing something with Gemini, this is a little bit 0:10:47.720 --> 0:10:50.960 of a different piece where there actually licensing technology from Google. 0:10:51.440 --> 0:10:54.760 It's most likely where Apple would pay Google for that. 0:10:54.960 --> 0:10:58.319 Now they've given guidance to expect some of their CAPEX 0:10:58.360 --> 0:11:00.839 and some expenses around AI to go out modestly next 0:11:00.960 --> 0:11:03.520 year a few billion dollars, which seems like chump change 0:11:03.559 --> 0:11:06.079 when you look at these hundreds of billions of dollars 0:11:06.120 --> 0:11:09.480 that are being spent. So the bottom line is that 0:11:09.520 --> 0:11:12.400 this is a cost if they do end up leveraging 0:11:12.480 --> 0:11:15.800 more around Google, is a cost that Apple can easily 0:11:15.840 --> 0:11:20.559 manage and maintain the margins that investors love so much gain. 0:11:20.679 --> 0:11:22.760 Is there any regulatory risk to that? 0:11:22.960 --> 0:11:26.520 Is this a relationship that regulators would welcome and not challenge. 0:11:28.640 --> 0:11:32.640 I mean, clearly the regulatory piece has been something that 0:11:32.720 --> 0:11:36.200 is concerned investors, that that has been diminishing over time. 0:11:36.760 --> 0:11:37.920 And I think what we. 0:11:37.880 --> 0:11:42.040 Saw with the regulatory around Google and their search deal. 0:11:42.080 --> 0:11:45.160 Of course, this is about a fifth of Apple's or 0:11:45.160 --> 0:11:48.440 earnings come from this Google search placement, and so the 0:11:48.520 --> 0:11:51.160 fact that that kind of went in a good direction 0:11:51.720 --> 0:11:53.200 I think is a sign of a little bit of 0:11:53.200 --> 0:11:57.199 a softening tone on the regulatory side. So I think 0:11:57.240 --> 0:12:00.280 that this piece, you know, this dynamic around Google, it 0:12:00.440 --> 0:12:05.000 largely won't have a regulatory topic. There is a question 0:12:05.080 --> 0:12:07.120 about if Apple does want to do something bigger, if 0:12:07.120 --> 0:12:09.319 they want to acquire somebody like a perplexity, which I 0:12:09.320 --> 0:12:11.800 think would make a ton of sense for them, that 0:12:11.960 --> 0:12:13.960 is something that may be a little bit more of 0:12:14.000 --> 0:12:17.079 a challenge these big tech companies want to get a 0:12:17.080 --> 0:12:20.600 hold of perplexity andthropic But I think that regulatory piece 0:12:20.679 --> 0:12:22.880 is something that's going to make that less likely. 0:12:23.200 --> 0:12:26.840 So, Gene, if a strong iPhone seventeen upgrade cycle allowed 0:12:26.880 --> 0:12:29.240 Apple to play for time when it comes to their 0:12:29.280 --> 0:12:32.120 AI offering, just how much time did it give them? 0:12:32.160 --> 0:12:35.000 How patient are you willing to be to allow Apple 0:12:35.120 --> 0:12:38.400 to figure out and solve the mess that currently is serie. 0:12:40.240 --> 0:12:44.120 I mean, really, the central question for Apple over the 0:12:44.120 --> 0:12:48.200 next two years, three years, maybe even five years of 0:12:48.200 --> 0:12:49.960 how much time investors are going to give them to 0:12:49.960 --> 0:12:52.440 figure this out. So point in time today is that 0:12:52.480 --> 0:12:54.920 the bar is really high because they've set that bar 0:12:55.000 --> 0:12:56.800 high about what the next series is going to look like. 0:12:57.120 --> 0:13:00.160 But if we fast forward into April and let's say 0:13:00.200 --> 0:13:02.839 that it's a disappointment, I think that the stock will 0:13:02.880 --> 0:13:06.200 clearly trade off, but investors are going to give Apple 0:13:06.240 --> 0:13:09.680 more time. Competitively, All that's on the horizon next year 0:13:09.720 --> 0:13:11.800 is this new device that will see for the first 0:13:11.800 --> 0:13:14.280 time from open AI will be available likely in twenty 0:13:14.320 --> 0:13:17.920 twenty seven. But there has been essentially nothing that's happened 0:13:17.920 --> 0:13:21.560 when it comes to consumer hardware AI that has changed 0:13:21.559 --> 0:13:25.120 the competitive field, and so at the end of the day, 0:13:25.559 --> 0:13:27.559 consumers love their Apple devices. 0:13:27.920 --> 0:13:30.280 This resurgence we've seen. 0:13:30.640 --> 0:13:33.160 With the iPhone in the last two quarters, and the 0:13:33.160 --> 0:13:36.760 guidance for December is all about that commitment that Apple 0:13:36.920 --> 0:13:40.040 customers have to the platform that upgrade pool. And so 0:13:40.559 --> 0:13:44.400 the reality is is that these devices just become entrenched 0:13:44.400 --> 0:13:47.480 in our lives just surround us. It's not just the phone, 0:13:47.679 --> 0:13:49.480 and I think that that's going to give them much 0:13:49.520 --> 0:13:51.400 more time. Yes, the stock is going to have some 0:13:51.520 --> 0:13:55.280 variations around how people feel about any given change to 0:13:55.320 --> 0:13:58.959 their AI, but ultimately they're going to Investors will give 0:13:59.000 --> 0:14:02.760 them more time, and most importantly, the consumers will because 0:14:02.760 --> 0:14:05.360 they've made such a big investment into Apple's products over 0:14:05.400 --> 0:14:06.120 the last decade. 0:14:06.240 --> 0:14:07.920 Jane just quickly hear you. So that Apple is going 0:14:07.960 --> 0:14:09.920 to be the biggest gainer through the end of the year. 0:14:10.200 --> 0:14:12.800 Who do you see in the magnificent seven names as 0:14:12.800 --> 0:14:13.760 being the biggest loser? 0:14:15.640 --> 0:14:17.400 I mean, I think that surprising. 0:14:17.440 --> 0:14:19.560 I think Amazon is going to have its surge today, 0:14:19.600 --> 0:14:22.800 but expectations that have shifted higher. I still think that 0:14:22.840 --> 0:14:26.200 they're struggling with their losing share within cloud. Yes, they 0:14:26.200 --> 0:14:29.200 had a good quarter with Aws, but that losing chair 0:14:29.320 --> 0:14:31.520 piece and so it's been a laggard. 0:14:31.560 --> 0:14:33.120 It's getting its stay in the sun today. 0:14:33.240 --> 0:14:35.160 But I think that that's probably going to be towards 0:14:35.160 --> 0:14:36.040 the bottom of the list. 0:14:36.520 --> 0:14:40.040 Stay with US mulblindex Savana's coming up off to this. 0:14:49.560 --> 0:14:53.200 Also some discussion with respect to Nvidia speaking in South 0:14:53.240 --> 0:14:57.200 Korea about potentially restarting Blackwell sales into China. At least 0:14:57.200 --> 0:14:59.920 that is Jensen Hwank's goal going forward. 0:15:00.040 --> 0:15:00.960 Joining US now is at. 0:15:00.920 --> 0:15:04.240 Mills of Raymond James, ed, I just wonder your takeaway 0:15:04.520 --> 0:15:09.280 about how the geopolitical chips are falling after this jijinpaying 0:15:09.320 --> 0:15:10.160 Donald Trump meeting. 0:15:11.240 --> 0:15:13.800 I think they're basically where we would expect them to be, 0:15:13.880 --> 0:15:18.480 which is getting a de escalation, getting delay. But the 0:15:18.520 --> 0:15:21.520 real question now is how long does this last? And 0:15:21.600 --> 0:15:23.920 I don't think there's anyone who thinks that we're going 0:15:23.960 --> 0:15:26.360 to go through the next year or through the term 0:15:26.480 --> 0:15:29.720 of President Trump without kind of some more hiccups. 0:15:30.200 --> 0:15:31.760 This is a roller coaster ride. 0:15:31.880 --> 0:15:34.320 I am sure there's going to be more export controls 0:15:34.320 --> 0:15:36.960 that are going to be kind of suggested by either side, 0:15:37.520 --> 0:15:40.360 But really the big question that we've been getting here 0:15:40.400 --> 0:15:43.920 at Raymond James is how much semiconductors can go into China, 0:15:44.000 --> 0:15:47.440 how much relaxation of some of those tech controls. We've 0:15:47.480 --> 0:15:50.720 talked about that de risking in the last eight years, 0:15:50.720 --> 0:15:53.920 that's been about blocking what China can buy. D risking 0:15:53.960 --> 0:15:56.840 now in DC is making sure that China gets hooked 0:15:57.240 --> 0:16:00.400 on our AI technology so that we don't have the 0:16:00.600 --> 0:16:04.560 risk that China developed something else, and as a competitor globally, 0:16:04.920 --> 0:16:09.080 that's a fundamental change that is going to potentially drive 0:16:09.120 --> 0:16:11.440 a lot of this AI trade even a bit higher 0:16:11.880 --> 0:16:14.760 as we get those kind of de risking sales into 0:16:14.840 --> 0:16:16.720 China that were not expected to. 0:16:16.680 --> 0:16:20.200 Lisa's point ed, the President had said that Blackwell would 0:16:20.240 --> 0:16:23.880 be discussed. Jensen Wong said he hoped he'd be able 0:16:23.920 --> 0:16:27.120 to sell Blackwell back into China, but it appears that 0:16:27.280 --> 0:16:30.040 wasn't on the table during these negotiations. What do you 0:16:30.080 --> 0:16:32.320 make of the fact that that specifically. 0:16:31.760 --> 0:16:32.280 Was left out? 0:16:33.200 --> 0:16:36.640 So Danny, the President said that in Nvidia in China 0:16:36.680 --> 0:16:39.320 are going to have conversations and that he was going 0:16:39.360 --> 0:16:41.240 to let Nvidia be the referee. 0:16:41.720 --> 0:16:44.040 He did say that Blackwell late. 0:16:44.120 --> 0:16:47.920 You know, in Nvidia's ladyship, the Rubin is probably off 0:16:47.960 --> 0:16:50.760 the table, and I think that's appropriate. What we do 0:16:50.920 --> 0:16:53.720 know is that the Trump administration had previously banned the 0:16:53.800 --> 0:16:56.960 age twenty, they banned one of the AMD chips. They've 0:16:57.000 --> 0:17:00.520 reversed those bands. China hasn't purchased that because they want 0:17:00.560 --> 0:17:02.920 to see what else they can get. I do think 0:17:02.960 --> 0:17:05.640 that there is a version of Blackwell that probably can 0:17:05.680 --> 0:17:08.600 be sold into China. I do think that that is 0:17:08.640 --> 0:17:11.639 going to be part of future negotiations. So on a 0:17:11.640 --> 0:17:13.600 scale of one to ten, if I had been hoping 0:17:13.640 --> 0:17:15.600 for a ten, what came out of this is probably 0:17:15.600 --> 0:17:18.320 a six or a seven. And if we can get 0:17:18.359 --> 0:17:21.959 those negotiations ongoing, it can go up from here. But 0:17:22.000 --> 0:17:26.199 the opportunity to possibly relax tech standards versus where we 0:17:26.240 --> 0:17:29.000 are where we've been is a fundamental shift in and 0:17:29.040 --> 0:17:31.640 of itself, which gives optimism for a lot of investors 0:17:31.640 --> 0:17:32.239 that I talked to. 0:17:32.440 --> 0:17:33.919 So notably not a twelve. 0:17:34.000 --> 0:17:35.960 As the President said that the outcome of the meeting 0:17:36.160 --> 0:17:38.080 was ed, what else was it discussed? 0:17:38.119 --> 0:17:38.399 Also? 0:17:38.560 --> 0:17:41.919 TikTok Taiwan trans shipments. What do you make of just 0:17:41.920 --> 0:17:44.280 what was left out of the discussions. 0:17:44.880 --> 0:17:47.720 You know, it is a to our meeting, but that's 0:17:47.760 --> 0:17:49.400 not very long when you kind of have all these 0:17:49.520 --> 0:17:52.119 different negotiations. I think as it relates to TikTok that 0:17:52.160 --> 0:17:54.200 has been moving along, that has had a lot of 0:17:54.280 --> 0:17:59.200 other negotiations. One thing that I've always heard about President 0:17:59.240 --> 0:18:01.959 she is that he likes to go into these meetings 0:18:02.000 --> 0:18:05.520 with things ninety eight ninety nine percent settled. So I 0:18:05.600 --> 0:18:07.639 think what was discussed in the meeting was what what 0:18:07.880 --> 0:18:09.879 Bessen and his Kundter part were able to do the 0:18:09.880 --> 0:18:13.639 week before. There is a desire to have another meeting 0:18:14.160 --> 0:18:16.399 first half of next year, where Trump goes to China, 0:18:16.680 --> 0:18:19.520 maybe she comes to the United States at an appropriate time, 0:18:20.040 --> 0:18:23.840 so there is opportunities to follow up from this on 0:18:24.040 --> 0:18:27.159 rare Earth. Yes, they are going to have this pause, 0:18:27.400 --> 0:18:31.000 but because there's licensing, there's plenty of opportunities for China 0:18:31.040 --> 0:18:34.000 to tighten in certain ways that will get us response. 0:18:34.520 --> 0:18:37.440 So the fact that we have more to discuss at 0:18:37.560 --> 0:18:40.320 later dates and other dates already set to kind of 0:18:40.800 --> 0:18:44.080 have the leaders come together seems fairly appropriate at this point. 0:18:44.840 --> 0:18:45.920 Just really quickly here. 0:18:46.040 --> 0:18:47.600 Do you think they're going to get a completion to 0:18:47.640 --> 0:18:49.880 this government shut down by Thanksgiving so we cannot worry 0:18:49.880 --> 0:18:50.680 about flight de lies? 0:18:51.320 --> 0:18:53.840 I think Thanksgiving, yes, But I think that that's where 0:18:53.880 --> 0:18:55.840 I kind of have been putting the over under. Once 0:18:55.880 --> 0:18:58.440 we get to November twenty first, which is the date 0:18:58.480 --> 0:19:02.560 of the cr that passed the House, the conversation changes 0:19:02.560 --> 0:19:05.520 because it's not that the Senate could just vote to 0:19:05.560 --> 0:19:08.280 turn it on because there's nothing to vote on. I 0:19:08.400 --> 0:19:10.560 do think that there's going to be a conversation today 0:19:10.560 --> 0:19:13.520 and over the next week about nuking the fillerbuster. That's 0:19:13.520 --> 0:19:15.840 what President Trump is put on true social I don't 0:19:15.880 --> 0:19:18.120 think the Senate goes in that direction. I think that's 0:19:18.119 --> 0:19:22.000 about Trump trying to regain negotiating leverage. But because of 0:19:22.040 --> 0:19:25.480 those social media posts, this does go on at least 0:19:25.560 --> 0:19:29.520 another week. As the pressure builds, President Trump is probably 0:19:29.520 --> 0:19:31.480 going to have to be the off ramp. But as 0:19:31.520 --> 0:19:34.520 we get closer to kind of November, you know, kind 0:19:34.520 --> 0:19:36.880 of twenty first, and as we get closer to Thanksgiving, 0:19:37.040 --> 0:19:39.120 that's really I think where this finally comes to a head. 0:19:39.200 --> 0:19:41.040 I think we're at the beginning of the end, but 0:19:41.119 --> 0:19:43.600 unfortunately we're still at the beginning, not the end. 0:19:44.000 --> 0:19:47.520 Stay with us Mold Blindbeck Savannah's coming up off to this. 0:19:56.840 --> 0:20:00.919 Meta defying AI spending gloom with a record break bond sale, 0:20:01.000 --> 0:20:03.800 the social media giants selling thirty billion dollars of bonds 0:20:03.840 --> 0:20:04.760 while drawing. 0:20:04.840 --> 0:20:06.120 Record interest for the debt. 0:20:06.160 --> 0:20:08.240 I think that there were offers of something north of 0:20:08.240 --> 0:20:11.399 one hundred billion dollars. Winnie Caesar of Credit Sites writing this, 0:20:11.880 --> 0:20:15.720 the acceleration in debt financed CAPEX on AI related initiatives 0:20:16.040 --> 0:20:18.720