WEBVTT - A Slowdown in Stocks and Bond Market Warning 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.200 --> 0:00:27.680 This is a. 0:00:27.680 --> 0:00:30.000 Joy And for Global Wall Street lean forward. 0:00:30.040 --> 0:00:33.000 Stuart Kaiser joins us in NIC's got a fancy title, 0:00:33.040 --> 0:00:35.080 had a US equity trading strategy. 0:00:35.320 --> 0:00:36.040 It's City Group. 0:00:36.080 --> 0:00:38.479 You've seen him in the TV show Industry and we've 0:00:38.479 --> 0:00:41.640 got in here for a long conversation today. What's the 0:00:41.840 --> 0:00:46.640 mood on institutional desks? Our review is retails buying on 0:00:46.680 --> 0:00:50.400 the dip and institutions are going mental over this, that 0:00:50.560 --> 0:00:53.080 and the other thing. What's the mood that you see 0:00:53.400 --> 0:00:54.720 across pro desks. 0:00:55.240 --> 0:00:57.640 I think people are a little bit concerned about the 0:00:57.640 --> 0:00:59.680 speed of the rally, But the fact is it seems 0:00:59.680 --> 0:01:02.640 like stamatic buying is really going to be very large 0:01:02.720 --> 0:01:05.960 over the next couple of weeks up and people are 0:01:05.959 --> 0:01:07.399 not going to fight that. So I think even if 0:01:07.440 --> 0:01:09.880 you're a little negative of the market as an institutional investor, 0:01:09.920 --> 0:01:12.039 you're sort of allowing this buying to play out and 0:01:12.080 --> 0:01:14.240 then you'll kind of step back in, you know, once 0:01:14.319 --> 0:01:16.560 that's done. So I would say, you know, a little 0:01:16.560 --> 0:01:18.880 bit concerned with the speed, but you know, okay, for 0:01:18.920 --> 0:01:20.160 now what we call long. 0:01:20.040 --> 0:01:23.920 Only buy side, which is basically conservative money. Folks are 0:01:23.920 --> 0:01:26.560 not doing hedge funds and all the fancy things you 0:01:26.600 --> 0:01:28.240 see on industry or billions. 0:01:28.280 --> 0:01:31.600 Forget about that long only by side. Do they feel 0:01:31.640 --> 0:01:32.640 behind right now? 0:01:33.400 --> 0:01:35.280 You know, I think a little bit. 0:01:35.319 --> 0:01:37.399 But the fact is the sell off happened so quick 0:01:37.400 --> 0:01:40.280 and then the rally happened so quick back that you know, 0:01:41.120 --> 0:01:42.800 it was a little hard to capture the rally, but 0:01:42.880 --> 0:01:44.600 it was also a little hard to risk matters the 0:01:44.600 --> 0:01:47.000 way down. So I think they're actually just pretty happy 0:01:47.000 --> 0:01:50.160 we've got the price levels back back to where it was. 0:01:50.360 --> 0:01:51.600 If you look at your so they. 0:01:51.480 --> 0:01:54.200 Were dumb going down and dumb going up. I love it. Well. 0:01:54.640 --> 0:01:58.840 I prefer the word patient, patient and strategic. But but yeah, 0:01:58.880 --> 0:02:01.000 I mean, like you'd give you an example. You know, 0:02:01.040 --> 0:02:02.360 we had a lot of investors coming in when you 0:02:02.400 --> 0:02:04.120 were on the lows. What are the ten or fifteen 0:02:04.120 --> 0:02:06.320 stocks you would buy here. By the time they would 0:02:06.320 --> 0:02:08.519 have put that trade on, we're already ten percent higher. 0:02:09.040 --> 0:02:10.720 You know, we kind of made a joke last weekend 0:02:10.840 --> 0:02:13.880 that whole seventeen percent rally, if you timed it perfect, 0:02:13.919 --> 0:02:16.120 you only needed to own the market for sixty minutes. 0:02:16.360 --> 0:02:20.640 Slow stop. Show you work on the weekends sometimes yeah, 0:02:20.760 --> 0:02:21.520 sometimes this is just. 0:02:21.520 --> 0:02:24.919 Because Jane's in a commute right now and you work. 0:02:25.160 --> 0:02:27.040 I have to catch up on all your YouTube, all 0:02:27.120 --> 0:02:29.840 your YouTube, and I can't go during the week. 0:02:30.160 --> 0:02:32.600 Sectors, sir, what do you guys see on your desk? 0:02:32.840 --> 0:02:35.919 Are people just kind of are they jumping back into tech? 0:02:35.960 --> 0:02:38.160 Are they just trying to buy good balance sheets? What 0:02:38.200 --> 0:02:40.080 are they buying out there when they did come back? 0:02:40.240 --> 0:02:42.160 Yeah, I mean tech and growth I think have been 0:02:42.320 --> 0:02:45.200 the stocks that have driven the rally the most. Two 0:02:45.240 --> 0:02:48.200 things that would just highlight institutional investors two themes that 0:02:48.240 --> 0:02:50.200 they liked earlier in the year that they got hurt 0:02:50.240 --> 0:02:52.680 on but now are re engaging in, would be power generation. 0:02:52.960 --> 0:02:55.280 So all that power that we need for AI and 0:02:55.400 --> 0:02:57.040 M and A targets. You know, coming into the year, 0:02:57.080 --> 0:02:58.359 we had thought we were going to get this big 0:02:58.480 --> 0:03:00.320 M and A cycle, all the tariff news, all the 0:03:00.320 --> 0:03:03.079 market volatility, you know, delayed that I think people are 0:03:03.120 --> 0:03:05.560 hoping now that things stabilized, that we will get a 0:03:05.560 --> 0:03:06.960 little bit of an M and A cycle, and that's 0:03:07.000 --> 0:03:08.440 going to be good for the bank sector. So I 0:03:08.480 --> 0:03:10.240 think those are two areas growth and banks that are 0:03:10.240 --> 0:03:13.040 People were focused on healthcare has been real tricky, so 0:03:13.080 --> 0:03:13.480 I think. 0:03:13.360 --> 0:03:14.800 People are kind of staying away from that. 0:03:14.840 --> 0:03:16.800 A big OPEC meeting you know today, I think it 0:03:16.840 --> 0:03:19.120 is so you'll have some focus on energy. But I 0:03:19.120 --> 0:03:22.200 think to the longside it's been growth stocks, particularly tech, 0:03:22.240 --> 0:03:22.800 and then some. 0:03:22.800 --> 0:03:24.079 Re entry into the bank space. 0:03:24.280 --> 0:03:26.040 We had Gena Martin Adams on earlier. 0:03:26.080 --> 0:03:29.000 She's a US equity strategist for Bloomberg Intelligence, and she 0:03:29.120 --> 0:03:32.280 was saying, this non US trade into Europe and other 0:03:32.560 --> 0:03:34.600 non ghost markets that's still there. 0:03:34.639 --> 0:03:35.280 It's still playing. 0:03:35.320 --> 0:03:37.320 Are you still having those conversations with your clients that 0:03:37.360 --> 0:03:39.680 they want to own maybe some European stocks. 0:03:40.200 --> 0:03:42.840 We're still having the conversations. I think the fact that 0:03:43.080 --> 0:03:45.640 you know, we've backed off the worst of the tariff 0:03:45.640 --> 0:03:48.800 outcomes has made people a little more comfortable. 0:03:48.320 --> 0:03:49.440 Kind of being in the US. 0:03:49.720 --> 0:03:52.240 But yeah, I mean the Europe versus US trade, particularly 0:03:52.240 --> 0:03:54.360 when you got that fiscal announcement. Yeah, I think the 0:03:54.480 --> 0:03:56.320 view is it's a very high bar to get the 0:03:56.320 --> 0:03:58.920 Europeans to spend money. The fact that they were committed 0:03:58.960 --> 0:04:00.920 to do that gets real money in the US a 0:04:00.960 --> 0:04:03.520 little more comfortable owning Europe, and I think it's given 0:04:03.520 --> 0:04:05.880 it another leg there. The fact is, though you've not 0:04:06.120 --> 0:04:09.560 seen an extended period of Europe beating the US probably 0:04:09.600 --> 0:04:12.000 for about twenty years, so there is you know, I 0:04:12.000 --> 0:04:14.760 think people like the trade, but they're also they respect 0:04:14.840 --> 0:04:17.360 that and are a little bit you know, cautious about how. 0:04:17.240 --> 0:04:18.760 Long it might might keep going. 0:04:18.800 --> 0:04:21.200 They got to relearn the stock symbols Steward Kaiser with 0:04:21.279 --> 0:04:24.240 us on your commute across an issue. Good morning, particularly 0:04:24.279 --> 0:04:26.440 good morning and Android Ota Google. Did you see they 0:04:26.440 --> 0:04:28.479 did their their roadshow. 0:04:28.040 --> 0:04:31.080 Thing yesterday big heys like big, It was bigger. 0:04:30.800 --> 0:04:32.400 Than I thought. 0:04:31.320 --> 0:04:34.520 I got to actually like read about it, like they 0:04:34.560 --> 0:04:35.600 get up to Gemini. 0:04:36.200 --> 0:04:39.239 Yes, Gemini and all that. Anyways, good morning on your community. 0:04:39.240 --> 0:04:42.960 Good morning on YouTube as well, Thank you YouTube. When 0:04:43.000 --> 0:04:46.080 we put this together, like as a huge deal, should 0:04:46.080 --> 0:04:48.680 we have makeup or not make up? It was like 0:04:48.800 --> 0:04:52.960 a major debate, folks. Matteo had a tantrum where people 0:04:53.000 --> 0:04:56.160 came in and they said, look, I'm endorsed by Bobby 0:04:56.160 --> 0:04:58.840 Brown and Mac I gotta have the makeup. 0:04:58.520 --> 0:05:02.480 Going, so Lisa's the only one that beautifies here, and so. 0:05:02.400 --> 0:05:06.240 To have Steve Roach on the phone looking over Steve, 0:05:06.279 --> 0:05:07.400 the camera's over there. 0:05:07.960 --> 0:05:09.560 But that's the way we're rolling on YouTube. 0:05:09.600 --> 0:05:12.960 Stewart Keiser without makeup this morning, I want you to 0:05:13.040 --> 0:05:15.280 talk about MAG seven. 0:05:15.680 --> 0:05:17.440 In position sizing. 0:05:18.000 --> 0:05:21.080 What do your big clients, what do they do when 0:05:21.120 --> 0:05:24.080 they go h I think we need more Apple just 0:05:24.120 --> 0:05:25.760 as one example, how. 0:05:25.640 --> 0:05:29.120 Do you affect position sizing in MAG seven? 0:05:29.680 --> 0:05:31.480 Look at Tom. It's a great question because at the 0:05:31.480 --> 0:05:32.560 beginning of the year, the. 0:05:32.520 --> 0:05:36.159 Two biggest challenges to the MAG seven trade were valuation 0:05:36.320 --> 0:05:39.960 and positioning. From mid February till March, those two things 0:05:39.960 --> 0:05:43.680 got addressed pretty quickly. Valuation down twenty five percent, positioning, 0:05:43.880 --> 0:05:46.120 you know, kind of pulled off. I think what we've seen, frankly, 0:05:46.320 --> 0:05:49.880 is a lot of people in that AI trade kind 0:05:49.880 --> 0:05:51.919 of sizing up a little more on the software side, 0:05:52.000 --> 0:05:54.760 a little a little less on the Microsoft on a tear. Yeah, 0:05:54.839 --> 0:05:58.000 Microsoft Meta, you know, has obviously been a favorite in 0:05:58.040 --> 0:06:00.280 terms of sizing the other stuff. Honestly, the what those 0:06:00.320 --> 0:06:03.479 we've seen recently have been almost across the board. Like 0:06:03.880 --> 0:06:05.960 you know, I'm going to trade Max SEV and maybe 0:06:05.960 --> 0:06:08.120 I pulled Tesla out because Tesla's had a little bit 0:06:08.160 --> 0:06:10.320 bit of political risk. But I'm going to pretty much 0:06:10.320 --> 0:06:13.039 put a dollar or ten million dollars in each of 0:06:13.040 --> 0:06:14.640 those stocks on generally. 0:06:14.480 --> 0:06:17.240 So for you is ten million dollars for. 0:06:17.160 --> 0:06:19.080 Me personally, No, what I love for me is about 0:06:19.120 --> 0:06:20.200 fifty fifty dollars. 0:06:20.240 --> 0:06:22.960 The City group An is a ten ten million give 0:06:22.960 --> 0:06:24.080 it to the intern to trade. 0:06:24.200 --> 0:06:26.240 Yeah, I mean, look, these stocks are I mean you're 0:06:26.240 --> 0:06:28.440 talking three trillion dollars in market cap for some of 0:06:28.480 --> 0:06:31.200 these stocks, So you know, the notional sizes going through 0:06:31.279 --> 0:06:32.440 or are quite large. 0:06:32.560 --> 0:06:35.160 I think you're generally approximately equal weight. 0:06:35.279 --> 0:06:37.320 But going into each quarter, there's always one or two 0:06:37.360 --> 0:06:39.520 that are favorites that are a little more widely held, 0:06:39.720 --> 0:06:41.680 and a couple that are less liked. And again, I 0:06:41.720 --> 0:06:43.640 think the software side of that Ledger is a little 0:06:43.640 --> 0:06:45.960 more little more over owned right now, and perhaps the 0:06:45.960 --> 0:06:48.159 tech hardware and send me is a little less owned 0:06:48.240 --> 0:06:48.719 at the moment. 0:06:49.120 --> 0:06:51.280 What's going to drive this market for the remainder of 0:06:51.320 --> 0:06:53.200 the year. I'm looking at the WORP function and I 0:06:53.200 --> 0:06:55.839 think I've only got a couple of fit cuts. 0:06:56.000 --> 0:06:58.760 Maybe in the forecast, is it earnings? 0:06:58.839 --> 0:07:00.560 Is it just what comes out of washing in DC 0:07:00.760 --> 0:07:03.600 and what comes over X or Twitter or whatever it's called. 0:07:03.960 --> 0:07:05.440 Is that what drives the market today? 0:07:05.600 --> 0:07:07.880 Look, I think near term, like the next month or so, 0:07:07.920 --> 0:07:10.200 it's a lot about positioning, and now that you had 0:07:10.200 --> 0:07:12.280 that Moody's downgrade, it's going to be what happens in 0:07:12.320 --> 0:07:13.920 the long end of the bond curve. As you guys 0:07:13.960 --> 0:07:16.640 were chatting about earlier, you know, medium term, what's called 0:07:16.640 --> 0:07:18.800 that July through September, it's going to really all be 0:07:19.000 --> 0:07:21.800 to me about EPs and GDP growth. Okay, both the 0:07:21.800 --> 0:07:24.200 FED and Corporate America took a weight and see approach 0:07:24.480 --> 0:07:26.520 in the first quarter. I don't think that's going to 0:07:26.560 --> 0:07:29.480 be sustainable through the summer. So we're ultimately either going 0:07:29.480 --> 0:07:32.840 to see relief and the recession risk get priced out, 0:07:33.000 --> 0:07:35.600 or we're going to see EPs and GDP numbers come down, 0:07:35.880 --> 0:07:37.400 and that's going to be kind of a waiting on 0:07:37.440 --> 0:07:39.960 the market. So I think, frankly, let's call it July 0:07:40.120 --> 0:07:43.480 through September, through the September FED, this is really going 0:07:43.560 --> 0:07:44.640 to be about the growth outlook. 0:07:44.840 --> 0:07:46.640 It seems like I mean Erning's growth. I don't know 0:07:46.640 --> 0:07:50.160 what Scott Crohner's saying, but I mean we've got Erning's 0:07:50.200 --> 0:07:52.720 growth was like thirteen fourteen fifteen percent for this year. 0:07:52.760 --> 0:07:56.040 Now it's down to like seven. Is that Is there 0:07:56.240 --> 0:07:57.120 still risk in earning? 0:07:57.160 --> 0:07:57.880 Strewth Do you think? 0:07:58.200 --> 0:07:59.480 I think there is still risk? I mean, you know, 0:07:59.480 --> 0:08:02.120 Scott was a two seventy for the year. He took 0:08:02.160 --> 0:08:04.720 his number down of two fifty five. That number does 0:08:04.720 --> 0:08:08.080 not include a recession. So the downside risk from here 0:08:08.240 --> 0:08:09.480 is less tariffs. 0:08:09.080 --> 0:08:10.520 Because I think we've trimmed the tail. 0:08:10.400 --> 0:08:12.800 Risk off tariffs and it's more about what is happening 0:08:13.040 --> 0:08:15.120 to the economy. So I do think there is a 0:08:15.160 --> 0:08:17.680 bit more downside to earnings, but it's going to be 0:08:17.880 --> 0:08:20.680 relying on economic data. I think most people at this 0:08:20.760 --> 0:08:23.559 point have incorporated some degree of tariff hadwin. 0:08:24.080 --> 0:08:27.360 So do institutions call you up. 0:08:27.400 --> 0:08:29.120 It's like industry and they gotta go to break and 0:08:29.160 --> 0:08:31.640 get to the next season. Do people call up and 0:08:31.680 --> 0:08:35.440 say go to cash at that size and scale? 0:08:35.640 --> 0:08:38.120 People don't do that, right, I mean, look, it depends 0:08:38.240 --> 0:08:40.400 like a mutual if on long only can't really be 0:08:40.440 --> 0:08:43.160 in cash right regulatory wise, they can't be you know 0:08:43.200 --> 0:08:45.839 hedge funds, Yes, I mean hedge funds will go cash. 0:08:45.640 --> 0:08:48.560 Up and say clear out these four positions? Yeah, or 0:08:48.600 --> 0:08:49.520 how do you do that? 0:08:50.040 --> 0:08:52.040 We just we push a button. These days, I think 0:08:53.000 --> 0:08:54.280 no man like I think. I think. 0:08:54.320 --> 0:08:57.040 What's interesting, Tommy, you're raising you entry point is the 0:08:57.240 --> 0:09:00.240 selling that we saw earlier in the year was much 0:09:00.240 --> 0:09:02.640 more what we call low touch, going through the pipes, 0:09:02.679 --> 0:09:05.160 going through the computers, going through the algorithms. We haven't 0:09:05.200 --> 0:09:08.000 had those days where they are calling up our high. 0:09:07.840 --> 0:09:10.160 Touch sales desk and just saying get me out quick. 0:09:10.600 --> 0:09:11.520 And I think part of the. 0:09:11.520 --> 0:09:14.400 Reason for that is something you touched on earlier. People 0:09:14.440 --> 0:09:17.440 are so long these stocks that if you're trimming up 0:09:17.480 --> 0:09:20.280 your positions, you need to do it quite quietly, if 0:09:20.280 --> 0:09:20.760 that makes sense. 0:09:20.760 --> 0:09:22.679 I'm not going to mention the name here. The name 0:09:22.720 --> 0:09:23.240 doesn't matter. 0:09:23.280 --> 0:09:26.480 Folks in the Bloomberg you can't believe the information you've 0:09:26.480 --> 0:09:29.120 got when you get the terminal. Get the terminal, folks, 0:09:29.160 --> 0:09:33.359 you need your card. So I got a very famous 0:09:33.880 --> 0:09:38.560 regional American name. They own seven point one six three, 0:09:38.760 --> 0:09:44.120 six seven nine Microsoft shares. So when they call up 0:09:44.160 --> 0:09:47.880 and say sell a ten percent position seven hundred and 0:09:47.880 --> 0:09:52.160 seventeen thousand shares. How do you actually do that? Do 0:09:52.200 --> 0:09:54.760 you just put in a cell order for seven hundreds? 0:09:54.840 --> 0:09:55.880 You don't do that, right? 0:09:56.120 --> 0:09:58.360 No, I mean a lot of that is done, you know, 0:09:58.640 --> 0:10:03.240 gradually throughout the day, the day on evaluated probably unless 0:10:03.320 --> 0:10:05.440 it is a we have to get out and look. 0:10:05.559 --> 0:10:08.400 What I would say too, is that the retail participation 0:10:08.559 --> 0:10:10.840 in the market is much larger today than it was 0:10:10.880 --> 0:10:13.360 a few years ago. So actually, if you're an institutional 0:10:13.360 --> 0:10:15.880 investor selling stock in retail, you're selling to a c 0:10:15.920 --> 0:10:18.760 LEBRITYTF you're selling to retail the men. Again, you're not 0:10:18.840 --> 0:10:21.320 just dumping it at one block. You're taking your time, 0:10:21.360 --> 0:10:23.240 you're spreading it out over the day, and you're making 0:10:23.280 --> 0:10:23.600 it work. 0:10:23.760 --> 0:10:24.600 Jane calls in. 0:10:24.720 --> 0:10:27.760 Good Jane, thank you so much for calling in from Connecticut. 0:10:28.360 --> 0:10:31.559 If you sell four percent of it's seven hundred and 0:10:31.559 --> 0:10:33.199 seventeen thousand. 0:10:33.200 --> 0:10:35.600 And you have to wait twenty minutes, what do you 0:10:35.679 --> 0:10:36.719 do in the meantime? 0:10:37.440 --> 0:10:38.280 You get coffee? 0:10:38.360 --> 0:10:40.280 You get coffee. 0:10:40.679 --> 0:10:43.240 I thought, that's how well, if it's here four o'clock, 0:10:43.280 --> 0:10:44.720 it's like, where are we going to have a beverage? 0:10:44.800 --> 0:10:48.520 Exactly, So, doing that selloff, we saw earlier, Earlier in 0:10:48.559 --> 0:10:50.680 the year, we had some really you know, maybe a 0:10:50.760 --> 0:10:54.400 five or six day period. It wasn't panic selling. Everybody said, 0:10:54.400 --> 0:10:57.640 it was kind of orderly selling. What were the calls 0:10:57.640 --> 0:10:59.760 you're getting from your clients. Was it the get me 0:10:59.800 --> 0:11:01.920 out call or was it, hey, we're. 0:11:01.800 --> 0:11:03.439 Taking some risk off the table kind of call. 0:11:04.080 --> 0:11:05.120 I think it was more of the latter. 0:11:05.160 --> 0:11:08.360 As you said, it wasn't a discombobulated and aggressive sell off. 0:11:08.400 --> 0:11:10.520 I think people were pretty measured about it. As I mentioned, 0:11:10.520 --> 0:11:12.320 a lot of that was going through the computers, going 0:11:12.360 --> 0:11:15.080 through the algos, less you know, just calling us up 0:11:15.080 --> 0:11:17.200 and saying sort of get me out now. Obviously there 0:11:17.200 --> 0:11:19.560 were some of that, but no, it was a pretty 0:11:19.640 --> 0:11:21.160 orderly self. But if you think of the sell if 0:11:21.160 --> 0:11:23.080 it happened in two stages, right, you had about a 0:11:23.080 --> 0:11:25.040 ten percent draw down to la February, and then you 0:11:25.040 --> 0:11:28.559 had another you don't post the tariff announcement. The first 0:11:28.559 --> 0:11:31.600 of those ten percent pullbacks was a little bit more disorderly, 0:11:31.640 --> 0:11:32.200 a little. 0:11:32.000 --> 0:11:32.760 Bit more stressed. 0:11:33.320 --> 0:11:36.079 Once you got that initial pullback, a lot of institutional 0:11:36.120 --> 0:11:38.760 investors got their risk right sized, and when you had 0:11:38.760 --> 0:11:40.440 that second pullback, I think. 0:11:40.360 --> 0:11:41.720 People were much more prepared for it. 0:11:41.720 --> 0:11:43.400 If it makes sense, this is brilliant. 0:11:43.760 --> 0:11:46.199 I did not observe, and folks, I'm making it up 0:11:46.280 --> 0:11:48.920 by by no means have my thumb on the market, 0:11:49.000 --> 0:11:53.720 not that I ever did. But I didn't see Catharsis 0:11:53.800 --> 0:11:57.839 there in the big cardit on follow, folks, because the 0:11:57.960 --> 0:11:59.200 drift of bitcoin. 0:11:58.880 --> 0:12:02.600 Is a fiction. But in your world, Steward Kaiser, I 0:12:02.679 --> 0:12:05.200 didn't see panic. I didn't see Catharsis. 0:12:05.600 --> 0:12:07.319 Look at and top to your point, I mean you 0:12:07.440 --> 0:12:11.320 basically Liberation Day was April second. The market bottomed on 0:12:11.360 --> 0:12:13.760 April seventh, intra day, and on April eighth, on a 0:12:13.760 --> 0:12:15.920 close to close. It was really a three day, three 0:12:15.920 --> 0:12:17.560 to five day sel if it didn't feel like that, 0:12:17.640 --> 0:12:19.600 but you know that's what the price actually would tell you. 0:12:19.920 --> 0:12:21.920 So look, you had a few moments there where you 0:12:21.960 --> 0:12:24.400 got the vix up to fifty sixty, and I think 0:12:24.440 --> 0:12:26.640 that was the closest we got to kind of you 0:12:26.679 --> 0:12:29.680 know compure, you know, complete fear based selling. You know, 0:12:29.720 --> 0:12:32.000 the fact is one of a good good proxy for 0:12:32.040 --> 0:12:35.040 today I think is actually twenty eleven in the sense 0:12:35.040 --> 0:12:38.960 that it was sort of a self created selloff driven 0:12:39.000 --> 0:12:42.520 by government policy, and you know, the second the administration 0:12:42.720 --> 0:12:45.680 started to show that they were willing to negotiate and 0:12:45.679 --> 0:12:46.920 trim the tail rists off. 0:12:47.160 --> 0:12:49.440 I think people got much more comfortable that this isn't 0:12:49.480 --> 0:12:50.360 great risk reward. 0:12:50.440 --> 0:12:53.000 But this is not, you know, a COVID or financial 0:12:53.920 --> 0:12:55.479 financial crisis quickly. 0:12:55.240 --> 0:12:58.040 Or season four. Harry Lotty's not going to be back 0:12:58.080 --> 0:13:00.360 for industry. Are you going to be back for industry 0:13:00.480 --> 0:13:01.160 for season four? 0:13:01.320 --> 0:13:01.600 Shortly? 0:13:01.640 --> 0:13:03.199 Up to the agents, Tom, you know we have to. 0:13:03.480 --> 0:13:08.320 Yeah, Cia, I understand. Stuart Kaiser on the street. I 0:13:08.360 --> 0:13:11.560 can't say enough, folks, a joy of Stuart. He's not 0:13:11.600 --> 0:13:15.080 coming in going well, the Fed will do this. It 0:13:15.080 --> 0:13:16.120 It's like real talk. 0:13:16.240 --> 0:13:18.600 And I reach Stuart's note every day because if I 0:13:18.640 --> 0:13:20.360 only have time for one paragraph, I got it. 0:13:20.400 --> 0:13:23.679 I can sound smart. What's buying, what's selling? 0:13:23.800 --> 0:13:24.200 I got it? 0:13:24.240 --> 0:13:27.680 Treasure from Citigroup. Stuart Kaiser, thank you so much, Jane, 0:13:27.760 --> 0:13:32.280 be nice to him. I'm sorry. 0:13:34.400 --> 0:13:38.000 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:13:38.040 --> 0:13:41.200 weekday afternoons from seven to ten am Eastern Listen on 0:13:41.280 --> 0:13:44.960 Applecarplay and Android Auto with the Bloomberg Business app, or 0:13:45.120 --> 0:13:46.600 watch us live on YouTube. 0:13:46.840 --> 0:13:50.280 Joining us now for an extended important conversation here on 0:13:50.360 --> 0:13:54.600 your conviction to be in the equity markets. Brian Belski's 0:13:54.640 --> 0:13:57.959 chief investment strategist for PMO Capital Markets. I'm sorry, Brian, 0:13:58.040 --> 0:13:59.720 for me always and forever. 0:13:59.800 --> 0:14:02.559 The my truh gosh, Brian. 0:14:02.800 --> 0:14:06.480 You know, Brandon want you to talk about what I've 0:14:06.520 --> 0:14:09.520 lived and a lot of younger people have never lived it. 0:14:10.400 --> 0:14:11.679 If price goes. 0:14:11.480 --> 0:14:16.800 Down and yields go up, stocks can still do well. 0:14:17.200 --> 0:14:21.080 Discuss that they can do very well. And thanks for 0:14:21.160 --> 0:14:23.600 mentioning Nick Rokanova too. First of all, one of the 0:14:23.600 --> 0:14:26.400 best names in Wall Street history, never one number two. 0:14:26.840 --> 0:14:29.200 The poor man has worked with me for eighteen years, 0:14:29.280 --> 0:14:30.880 so well, pray for him. 0:14:31.640 --> 0:14:33.920 I'm coming live to you, by the way, from the 0:14:34.000 --> 0:14:37.280 from the wonderful Jennifer Lee's office here at BEMO headquarters 0:14:37.280 --> 0:14:39.120 in Toronto. So I feel like I'm in the in 0:14:39.240 --> 0:14:43.440 the in the midst of greatness and anyway, yeah, exactly. 0:14:43.840 --> 0:14:47.960 So I really think we wrote this piece and talk 0:14:48.000 --> 0:14:51.520 about voluminous piece. Nick, lets me go crazy on the 0:14:51.600 --> 0:14:53.480 year Ahead piece. We wrote this piece in twenty twenty 0:14:53.480 --> 0:14:55.440 two for the twenty twenty three Year Ahead, and we 0:14:55.520 --> 0:15:00.000 talked to Tom about normalization in markets. 0:15:00.040 --> 0:15:03.280 Something we talked about last appearance as well, and you know, 0:15:03.360 --> 0:15:04.840 stocks can go up when. 0:15:04.760 --> 0:15:08.040 Yields go up. You know, the average ten year treasury 0:15:08.080 --> 0:15:11.640 the last seventy five years is five percent. Zero percent 0:15:11.720 --> 0:15:14.680 is not normal. What's happened in the FED since November 0:15:14.720 --> 0:15:17.640 of two thousand set, I'm sorry, August of two thousand 0:15:17.640 --> 0:15:19.960 and seven is not normal. And I think we're kind 0:15:19.960 --> 0:15:23.000 of returning to normalcy on the bond side of things. 0:15:23.000 --> 0:15:26.280 Even though we're primarily equity people, we believe the majority. 0:15:25.840 --> 0:15:28.760 Of returns, total returns of bonds the next ten years 0:15:28.840 --> 0:15:32.560 is going to be about yield, not price performance. Remember 0:15:32.600 --> 0:15:36.040 the last forty years, we've seen massive all performance of 0:15:36.080 --> 0:15:39.800 bonds for the most part, and we've had great price performance. 0:15:39.840 --> 0:15:42.920 So I think Tom that we're entering into this period 0:15:42.960 --> 0:15:46.320 where more even returns for stocks high single digit, low 0:15:46.400 --> 0:15:47.000 double digit. 0:15:47.320 --> 0:15:50.240 Same thing with Ernie's growth, where a yield environment can 0:15:50.320 --> 0:15:52.280 that can kind of hover in this three fifty to 0:15:52.320 --> 0:15:53.920 four to fifty range predominantly. 0:15:54.840 --> 0:15:58.680 So you know, even though you maintain and rightfully so, Brian, 0:15:58.800 --> 0:16:01.560 your bullish stance here and it's been an amazing rebound 0:16:01.600 --> 0:16:05.080 in this market, here, still your EPs for the s 0:16:05.120 --> 0:16:07.479 and p five hundred still around two hundred and fifty bucks. 0:16:08.800 --> 0:16:10.440 Does that support higher stocks from here? 0:16:11.400 --> 0:16:14.560 It does, and we're in the bottom of the report. 0:16:14.920 --> 0:16:19.000 Paul, we talked about how we're not revising back to 0:16:19.080 --> 0:16:22.680 our sixty seven hundred target, which was officially our initial 0:16:22.680 --> 0:16:26.080 target for twenty twenty five. It still remains our bow 0:16:26.240 --> 0:16:30.320 case at two seventy five for earnings and sixty seven hundred. 0:16:30.040 --> 0:16:31.680 For the price. 0:16:31.720 --> 0:16:33.800 However, as we wrote the piece, we need to see 0:16:33.800 --> 0:16:37.320 some sign posts, quite frankly, and one of them, quite frankly, 0:16:37.680 --> 0:16:40.720 to be clear, is we need to see guidance come back, 0:16:40.800 --> 0:16:43.440 and we need to see earnings growth solidify, and so 0:16:43.640 --> 0:16:45.880 we think we're going to probably see that. So with 0:16:46.000 --> 0:16:49.000 the market we call it, we're transitioning to show me 0:16:49.800 --> 0:16:53.360 from scare me, and I think the next quarter or two, 0:16:53.920 --> 0:16:56.520 which is a long time in Wall Street Brothers a 0:16:56.520 --> 0:16:59.160 long time, the next quarter or two, I think we 0:16:59.160 --> 0:17:01.440 need to see earning growth come in and then we'll 0:17:01.440 --> 0:17:03.640 feel better about returning to our boal caase at sixty 0:17:03.680 --> 0:17:04.240 seven hundred. 0:17:05.040 --> 0:17:07.399 To get to it, you know, a sixty seven hundred target. 0:17:08.160 --> 0:17:11.520 Does tech have to be a leadership category? 0:17:11.560 --> 0:17:16.680 Brian, that's a great question. Yes and no, we don't 0:17:16.720 --> 0:17:19.439 think MEG seven needs to be leadership. 0:17:19.800 --> 0:17:21.840