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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 2: Let's just set the stage here. Kind of mid December

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Speaker 2: SMP of fifteen sixteen percent, NASTAC up twenty twenty one percent,

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Speaker 2: some pretty solid results out of the bond market as well,

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Speaker 2: high single digit returns. Where do we go from here?

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Speaker 2: Because that was a pretty solid year, despite some volatility

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Speaker 2: in the beginning of the year. Ross Mayfield joins us.

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Speaker 2: He's an investment strategist bear a private wealth and management. Ross,

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Speaker 2: let's set the stage for twenty twenty six here, what

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Speaker 2: are the conversations you're having with your clients these days?

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Speaker 3: Yeah, I mean, with the market at all time highs,

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Speaker 3: a lot of the typical warriors that we hear from

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Speaker 3: investors have been tossed out for the moment, and the

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Speaker 3: main worry is just the strength itself.

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Speaker 4: Right, are we have things been too good?

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Speaker 3: And are we being set up for a disappointing twenty

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Speaker 3: twenty six? I think expectation management matters, right. Obviously, we

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Speaker 3: can't keep printing high teens twenty percent plus years year

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Speaker 3: after year, and this would be the fourth year of

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Speaker 3: gains of twenty twenty six is positive, but in a

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Speaker 3: bawl market that's not in common, and there are a

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Speaker 3: lot of tailwinds for the market as we turn the

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Speaker 3: page on twenty twenty five. So we're pretty optimistic, but

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Speaker 3: just managing those expectations.

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Speaker 5: I also think, guys, what's kind of encouraging about this

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Speaker 5: market is yesterday we were able to hit records on

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Speaker 5: the Dow, a squeezed out one for the S and

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Speaker 5: P five hundred, but we did it largely without big

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Speaker 5: tech names, without those big AI names. So, ross, do

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Speaker 5: you think that this rally is broadening out and we

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Speaker 5: could see I don't want to say a change in leadership,

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Speaker 5: but at least a broader rally in twenty twenty six.

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Speaker 4: Absolutely. I mean, for most of this rally, what has

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Speaker 4: been one of the.

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Speaker 3: Main concerns, the concentration, the potential narrowness of the rally,

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Speaker 3: the focus on the AI trade and the mag seven

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Speaker 3: and the reality is different. Under the surface, You've got

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Speaker 3: things like financials working healthcare has staged a really nice

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Speaker 3: comeback after a lot of years underwater. Industrials have held

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Speaker 3: their own discretion areas breaking back out, So you have

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Speaker 3: a lot of other kind of you know, real economy

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Speaker 3: cyclical rate sensitive names working.

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Speaker 4: Obviously, the rate cuts have helped.

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Speaker 3: Spur some activity in those corners of the market, and

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Speaker 3: the fundamentals are expected to brought out too. You know,

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Speaker 3: even this last quarter we saw the SMP four ninety

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Speaker 3: three with double digit earnings growth, and if you look

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Speaker 3: at the earnings estimates for twenty twenty six, the expectation

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Speaker 3: is that continued broadening in the fundamentals. So I think

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Speaker 3: it would make sense for that to continue in the

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Speaker 3: price action as well.

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Speaker 2: Hey, Ross Corporate America has really done its part here

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Speaker 2: to support this market. Earnings have come in really really

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Speaker 2: strong for the last several quarters. The earnings power for

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Speaker 2: twenty twenty six is enough to support this market.

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Speaker 4: Yeah, absolutely.

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Speaker 3: I mean we had the early part of a bullmarket

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Speaker 3: rally built on multiple expansion, which is really typical coming

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Speaker 3: out of a bear market low, and then earnings have

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Speaker 3: taken the baton and really carried the day here in

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Speaker 3: twenty twenty five, and I think that that will be

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Speaker 3: the case in twenty twenty six as well. Earnings growth

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Speaker 3: you know, expected broadly to be in the thirteen fourteen

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Speaker 3: percent range. Even if that comes down to something like

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Speaker 3: ten percent, that's more than enough to carry a bull

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Speaker 3: market through.

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Speaker 4: Again, maybe we manage expectations.

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Speaker 3: Maybe maybe single digit returns, low double digit returns is

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Speaker 3: kind of where we.

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Speaker 4: Set our base case.

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Speaker 3: But again, after three years of high teen or twenty

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Speaker 3: percent plus growth, that's more than enough. And that's pretty

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Speaker 3: typical for what a fourth to fifth year of a

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Speaker 3: bull market might look like. So I think the earnings growth,

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Speaker 3: the profit margin expansion, the breadth of that earnings growth

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Speaker 3: is more than enough to carry the day. And I

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Speaker 3: think it's the main one of the main pushbacks against

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Speaker 3: the argument that we're in a bubble. The fundamentals have

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Speaker 3: kept up with price by and large, and that's not

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Speaker 3: the case in most real bubbles.

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Speaker 5: But ross as we look to maybe rejigger their portfolio,

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Speaker 5: as we you know, near these final days of the year,

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Speaker 5: is it time to buy the laggards? And if so,

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Speaker 5: what's sticking out to you?

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Speaker 4: You know, I don't know if you need to buy

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Speaker 4: the laggards. I think you can just broaden out.

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Speaker 3: I mean, as we mentioned earlier, there is strength, nascent

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Speaker 3: strength in some of these non tech areas. The place

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Speaker 3: that I am, you know, shouting from the rooftops for

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Speaker 3: investors to consider their portfolio positioning, and it's international, which

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Speaker 3: has not been a laggard this year, but has been

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Speaker 3: a laggard for most of the last fifteen years. And

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Speaker 3: so I think a lot of investors have thrown in

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Speaker 3: the towel on international and the reality is that this bullmarket.

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Speaker 3: We mentioned the breadth within the US, but it's really

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Speaker 3: a global bull market, and in a lot of ways,

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Speaker 3: the leadership.

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Speaker 4: Is outside of the US.

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Speaker 3: You look to Japan, you look to Europe, you look

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Speaker 3: at some of the emerging market names. A weaker dollar

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Speaker 3: has been a catalyst, but there is a fundamental strength

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Speaker 3: coming from abroad as well. I think a lot of

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Speaker 3: investors are structurally underweight international and can do you know,

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Speaker 3: could do a lot of work just to get back

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Speaker 3: to kind of a marketwaight or and neutral weight international.

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Speaker 3: That is one of the main things that I'm talking

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Speaker 3: about with investors as we close the book on twenty five.

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Speaker 2: Here russ Let's follow up on the international play there.

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Speaker 2: Do you feel more comfortable than developed markets or emerging markets,

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Speaker 2: because we've heard folks talking up in emerging markets more

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Speaker 2: in the last three four or five months and a

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Speaker 2: half in a while.

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Speaker 3: Yeah, absolutely, I mean there is I think it starts

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Speaker 3: and ends with a week dollars story, right, and if

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Speaker 3: you look at this year, it's been it's been a

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Speaker 3: week dollar story.

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Speaker 4: But if you look at twenty.

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Speaker 3: Twenty six, you know, you think about the FED continuing

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Speaker 3: to cut rates, you think about what a new potential

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Speaker 3: FED chair might want to do and continue to ease,

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Speaker 3: and then you look around the world and you see

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Speaker 3: global yields headed higher. Japan and Europe, Australia can a

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Speaker 3: lot of central banks are talking about their next move

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Speaker 3: being great hikes, and so if you think about interest

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Speaker 3: rate differentials, you could really build a case for a

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Speaker 3: continued weakness and the dollar that does tend to boost

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Speaker 3: emerging markets more. I think I'm a little more comfortable

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Speaker 3: going to some of those developed markets. You know, Japan

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Speaker 3: has been an incredible story breaking out after thirty plus

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Speaker 3: years underwater.

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Speaker 4: But by and large, I.

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Speaker 3: Think you can if you're just a typical long term investor,

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Speaker 3: you can probably just buy, buy the bulk of it,

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Speaker 3: you know, the MSCI All Country x US, and call

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Speaker 3: it a day, because I do again. I think the

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Speaker 3: main thing is you've got a home country bias and

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Speaker 3: you've had fifteen years of underperformance. I think a lot

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Speaker 3: of investors probably probably owned very little, if any international

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Speaker 3: at all, So just a blanket ownership of a broad

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Speaker 3: international index will.

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Speaker 4: Do the job.

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Speaker 2: Ross, thanks so much for joining us. Really appreciate it.

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Speaker 2: Ross Mayfield, investment strategist at BAIRED Private Valve Management. Stay

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Speaker 2: with us or from Bloomberg Surveillance. Coming up after.

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Speaker 1: This, you're listening to the bloom Work Surveillance podcast. Catch

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Speaker 1: us live weekday afternoons from seven to ten am Eastern.

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Speaker 1: Listen on Applecarplay and Android Auto with the Bloomberg Business app,

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Speaker 6: Prea.

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Speaker 2: Mister Joints is here Core plus a bond etf portfolio

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Speaker 2: manager at JP Morgan Asset Management Pria. Thanks so much

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Speaker 2: for joining us here in studio. It's a little chilly

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Speaker 2: at so we appreciate you leaving the confines of the

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Speaker 2: brand new JP Morgan Tower on Park Avenue.

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Speaker 4: Which is just awesome.

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Speaker 2: I walk by it every day the Penn Station. They

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Speaker 2: did a phenomenal job there. Love to get your thoughts

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Speaker 2: on the FED here. We're seeing some comments from mister Goldsby,

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Speaker 2: who was at the center, but he says, I kind

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Speaker 2: of need more data, but boy, rates can come down more,

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Speaker 2: he says, if the data warrants it. What did you

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Speaker 2: take away from the FED meeting this week?

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Speaker 6: Sure, so thanks for having me. Always enjoy the conversation.

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Speaker 6: So I think what the FED did brilliantly was to

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Speaker 6: retain optionality.

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Speaker 7: So we have a lot of data coming up next week.

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Speaker 7: We're also going to.

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Speaker 6: Get another payrol report before the next jan meeting. So

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Speaker 6: they created the optionality that if the data is weak,

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Speaker 6: particularly on the labor front, that they can absolutely cut more.

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Speaker 6: But they did sort of signal that the bar to

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Speaker 6: cut any further is higher. So, you know, and I think,

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Speaker 6: and you know, you you reference President goals B. I

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Speaker 6: think there's a division of the FED because the risks

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Speaker 6: to the labor market and the risk to inflation are

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Speaker 6: both high, and different FED officials are putting more emphasis

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Speaker 6: on one risk versus another. I think President Goalsby is

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Speaker 6: probably in the inflation camp, you know, sort of worried

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Speaker 6: that inflation has not seen much progress this year. On

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Speaker 6: our end, we think that inflation, if you look at

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Speaker 6: the details of inflation, service inflation is heading lower. Wage

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Speaker 6: inflation is heading lower. So in our base case, we

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Speaker 6: do see a couple more cuts, you know, by the

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Speaker 6: time the Fed actually reaches neutral, but there's no urgency

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Speaker 6: so they can cut this, you know, over the next

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Speaker 6: six months. Of course, if the labor market is weak

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Speaker 6: and that unemployment rate, and that's what we're watching, if

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Speaker 6: that continues to move higher, I think this swead is

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Speaker 6: going to be a lot more aggressive.

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Speaker 5: Yeah, and Powell even signaled that right that the labor

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Speaker 5: market he was saying, in not so many words, is

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Speaker 5: probably weaker than we think it is. Also, we're dealing

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Speaker 5: with backward looking data at the moment, so we're still

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Speaker 5: waiting again for that more data to come in. But pria,

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Speaker 5: we know that credit spreads are tight, but you say

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Speaker 5: they're justified.

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Speaker 6: Yes, If I look at fundamentals of company balance sheets,

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Speaker 6: companies have not really levered up. That would make me

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Speaker 6: a little nervous if the debt levels kept increasing, large

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Speaker 6: debt issues done by companies that didn't have much debt.

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Speaker 6: So we're not that concerned about the fundamentals of whether

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Speaker 6: it's earnings or leverage or even interest coverage ratio.

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Speaker 7: But spreads. So I think spreads are at the tighter

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Speaker 7: end of the range right for good reason.

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Speaker 6: We are a little cautious that there's going to be

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Speaker 6: a lot of supply in January. There typically is, and

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Speaker 6: this time if the rest of the corporate sector, beyond

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Speaker 6: just the AI CAPEX companies are deciding they need to raise.

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Speaker 7: Money either for investment in EI, in how.

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Speaker 6: They're going to incorporate in their business, or MNA related financing,

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Speaker 6: we think there could be a lot of supply and

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Speaker 6: that is an opportunity. It wouldn't be worried, but we

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Speaker 6: are keeping some cash on the sideline waiting to buy

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Speaker 6: when that supply comes.

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Speaker 2: Interesting, so does the bond market broadly defined? Are they

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Speaker 2: concerned about some of this AI spending and the debt

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Speaker 2: associated with the AI spending. Because I look at some

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Speaker 2: of these issues, I'd buy their bonds. I mean, these

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Speaker 2: are great companies, great cash flows, clean balance sheets. I

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Speaker 2: mean i'd be as much as you got, I'll take it.

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Speaker 7: Yeah, I think you.

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Speaker 6: Know, when you come in with a very large deal,

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Speaker 6: it has to be priced, so there was some I

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Speaker 6: would say supply in digestion. You've got a lot of

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Speaker 6: that supply in September. Look at all the posts deal pricing.

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Speaker 6: What has happened to the market. All those spreads are tighter,

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Speaker 6: So I mean Oracle has had their CDs widening. I

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Speaker 6: think there's concerns around how much more debt they're going

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Speaker 6: to need to issue, But broadly, I don't think the

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Speaker 6: credit market is nervous. There's a valuation question and do

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Speaker 6: I want a little bit of a new issue concession

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Speaker 6: to take.

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Speaker 7: Down a large part. I think there's some of that.

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Speaker 6: Look at the spread curve that has not really steepened.

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Speaker 6: I think there's a lot of demand for long end

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Speaker 6: corporate paper.

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Speaker 7: It's there all in level of yields. Those spreads are narrow,

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Speaker 7: but look at all in eields.

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Speaker 6: If you're getting six percent five six percent high quality

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Speaker 6: investment grade debt. I think that's why we're seeing continued demand,

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Speaker 6: and I don't think the supply will be an issue

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Speaker 6: beyond just that week.

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Speaker 7: Maybe there's a little bit of spread widening.

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Speaker 1: CRIA.

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Speaker 5: What's your thinking with these companies, all these big buyouts

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Speaker 5: and so many companies taking on debt. Because we know

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Speaker 5: that Netflix is deal to buy Warner Brothers. Discovery includes

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Speaker 5: fifty nine billion dollars in bridge loans. Are you concerned

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Speaker 5: at all that companies are getting these deals done by

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Speaker 5: taking on such massive debt.

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Speaker 7: I think that's always a concern.

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Speaker 6: I gat bo activity or if there's worsening of the

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Speaker 6: credit I think, you know, obviously there'll be some cases

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Speaker 6: where maybe it's over down. On average, So far, we

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Speaker 6: haven't seen too much of debt fueled sort of bubbles.

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Speaker 7: You know, do we get there next year?

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Speaker 6: If the credit markets are open and the Fed's easy,

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Speaker 6: I would still say all in neils are not that

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Speaker 6: low for companies not getting free money, and so we are.

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Speaker 7: Not that concern. But at certain pockets.

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Speaker 6: Remember the cockroach hunting a few weeks ago or months ago,

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Speaker 6: we were all worried.

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Speaker 7: I think you really want to minimize cockroaches.

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Speaker 6: Do a lot of credit work to know that if

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Speaker 6: a company is taking on debt, will they see the

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Speaker 6: productivity gains? Can they see the economies of scale and MNA.

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Speaker 6: That's going to be a big issue. We're going to

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Speaker 6: be analyzing two companies merging. Do we think that they

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Speaker 6: can keep margins, they can make those debt payments. So far,

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Speaker 6: we haven't seen things that would worry us, but we

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Speaker 6: have to stay vigilant.

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Speaker 2: So I think a lot of folks they are fairly

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Speaker 2: constructive on twenty twenty six, And it all starts with

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Speaker 2: I think the economy is in pretty good shape. I

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Speaker 2: think we're going to see some decent growth out of

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Speaker 2: the economy. Is that kind of where you guys are

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Speaker 2: of a JP Morganism management?

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Speaker 7: We are.

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Speaker 6: We think we're in a soft line. I think we've

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Speaker 6: been in one for the last two years. A lot

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Speaker 6: of that is based on bottom up company fundamentals as

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Speaker 6: well as consumer fundamentals. On average, balance sheets of the

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Speaker 6: corporate sector and the consumer look very strong, and I

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Speaker 6: think that's why the economy has been resilient.

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Speaker 7: We've had so many.

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Speaker 6: Shocks this year right right from tariffs, immigration, geopolitical, and

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Speaker 6: yet the economy is sort of powered through. In our

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Speaker 6: base case that remains the case over the next year.

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Speaker 6: I am a little concerned about the labor market, right

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Speaker 6: I'm not hearing companies saying that they're going to increase hiring,

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Speaker 6: so maybe this is a jobless recovery. We have to

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Speaker 6: see how long does that continue to power the consumer.

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Speaker 7: Layoffs, is what I'm watching.

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Speaker 6: I think that would unravel some of this, but I

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Speaker 6: think the FED then aggressively starts cutting rates.

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Speaker 5: All right, Priyamysra of JP Morgan Asset Management, Coreplus bond

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Speaker 5: ETF Portfolio Manager, thanks for taking the short walk over

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Speaker 5: from JP Morgan's headquarters here to.

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Speaker 2: Stay with us or from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live

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Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on Apple,

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Speaker 1: Karplay and Android Otto with the Bloomberg Business app, or

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Speaker 1: watch us live on YouTube.

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Speaker 2: Let's talk about M and A because we've been talking

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Speaker 2: about this big Warner Brothers trade for the last seven weeks,

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Speaker 2: but it's been a pretty darn good year for M

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Speaker 2: and A. It feels like and I think banks for talking.

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Speaker 8: About twenty twenty six as well.

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Speaker 2: So let's check in with somebody who does this stuff

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Speaker 2: for a living, Samir, seeing he's co head of M

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Speaker 2: and A North America for City. Samir, help just frame

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Speaker 2: out how twenty twenty five has been for M and A.

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Speaker 2: And then kind of how you guys are thinking about

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Speaker 2: twenty twenty six.

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Speaker 9: Sure, happy to do it. Thanks Ball for having us

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Speaker 9: and looking forward to the conversation. Look, it's been an

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Speaker 9: interesting year, right, it's been just set the stage twenty

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Speaker 9: twenty five. This year is going to be the second

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Speaker 9: largest year in M and A volumes after twenty one,

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Speaker 9: which had a lot of spack volumes in it. Let's

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Speaker 9: also keep in mind, by the way, they were a

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Speaker 9: couple of months where we were in the old rooms

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Speaker 9: from an M and A standpoint, right around when tire

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Speaker 9: its came out. So all of this momentums really happen

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Speaker 9: if you think about it in the last eight months.

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Speaker 9: I think back when I say to myself, you know,

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Speaker 9: since twenty twenty we had like six megadeals fifty billion

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Speaker 9: plus right over the last four years. This year, in

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Speaker 9: the last two quarters, we've had four. This momentum is

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Speaker 9: not going away. It's been incredibly busy. And why is that.

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Speaker 9: We have a kind of confluence of some perfect factors

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Speaker 9: of here. Right, You've got rates coming off, growth remains strong,

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Speaker 9: there is a significant amount of investments that's coming in

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Speaker 9: from an AI and thus a data center infrastructure perspective.

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Speaker 9: I don't discount that that's a big driver this time,

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Speaker 9: and then I combine that with how strategics are looking

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Speaker 9: at deals. There is greater clarity on how to get

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Speaker 9: regulatory approval for the first time in half a decade

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Speaker 9: this time, and I think you're going to continue to

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Speaker 9: see this momentum build because people are able to think

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Speaker 9: about this as deal makers. We're able to look at

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Speaker 9: the landscape and say we can get an answer as

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Speaker 9: to whether something's going to pass muster. The administration's much

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Speaker 9: more open to looking at remedies as a solution, which

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Speaker 9: was not something that was available to the buyers, and

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Speaker 9: thus able to find the right way to navigate these

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Speaker 9: complex environments.

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Speaker 5: All right, So a more friendly regulatory environment in which

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Speaker 5: to work. So we know we're seeing a lot of

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Speaker 5: consolidation in media, we know we're seeing consolidation in AI.

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Speaker 5: We're else outside of those sort of expected areas. Where

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Speaker 5: else are you seeing consolidation in the new year.

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Speaker 9: It's a great question. You know, let's talk about AI,

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Speaker 9: and when we talk about AI, everyone talks about LMS,

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Speaker 9: But let's actually talk about what else happens beyond AI. Right,

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Speaker 9: AI is causing massive amounts of spending that's flowing into

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Speaker 9: data center infrastructure that impacts industrials. You think about let's

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Speaker 9: call it picks and shovels, but you think about the

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Speaker 9: volume that's coming in of spend over the next five

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Speaker 9: years that is having a big impact from an industry perspective.

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Speaker 9: So you're going to see a lot of flow on

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Speaker 9: over there. You're seeing a lot of flow on in

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Speaker 9: real estate as a function of that. And then let's

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Speaker 9: also consider the fact you're coming out of COVID. We've

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Speaker 9: had a change in human behavior that was forced on

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Speaker 9: people and as a function of that, companies have had

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Speaker 9: to adapt. You take those impacts, the need to fix

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Speaker 9: supply chains, you take the need to think about tariffs.

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Speaker 9: I think the other place. When you combine those two factors,

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Speaker 9: you're going to see a lot of changes in the

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Speaker 9: consumer landscape as well. That's not going away. So in

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Speaker 9: my mind, like I see it happening across the board.

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Speaker 9: Let's also consider you know the GLPS, right, you think

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Speaker 9: about healthcare and some of the impact that that's having.

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Speaker 9: I see this happening across sectors. So AI has a

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Speaker 9: flow on on industrials, real estate in a few other places.

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Speaker 9: I see a lot of change in consumers, and I

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Speaker 9: see a lot of momentum in the healthcare franchise as well.

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Speaker 2: Smyr talked to us about the private equity clients or

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Speaker 2: sponsors out there. For you guys. You know, based on

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Speaker 2: my thirty year career on the street, it's easy to

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Speaker 2: raise money, and it's really easy to invest money. But man,

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Speaker 2: it's really hard to monetize those investments. And that's been

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Speaker 2: pronounced really over the last four or five years. What

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Speaker 2: are you hearing from your sponsor clients.

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Speaker 9: It's gotten much better. Yes, there was a lot of

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Speaker 9: noise last year because you could not exit some of

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Speaker 9: these assets because of what was happening in the market.

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Speaker 9: So the markets have helped, I'll tell you this year

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Speaker 9: exits are at a significantly elevated level. And by the way,

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Speaker 9: if you look at the sponsor wallet of exits, forty

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Speaker 9: percent of the wallet is coming from one billion dollar

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Speaker 9: plus exits. It typically runs twenty to twenty five percent.

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Speaker 9: That's a forty percent. Well, the other thing that's happening,

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Speaker 9: you talk about capital coming in. You've got strategics who

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Speaker 9: are now in a position to act, but you've also

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Speaker 9: got a lot of let's call it sovereign wealth fund

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Speaker 9: money right, and these funds have moved away from being

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Speaker 9: passive LPs and they're starting to think much more aggressively

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Speaker 9: about being direct investors. With the GPS, that has helped

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Speaker 9: in a big way as well. So what you're seeing

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Speaker 9: in auction processes, I am seeing situations where processes are

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Speaker 9: getting preempted for quality assets. I'm seeing situations where strategics

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Speaker 9: are showing up before sponsors going to exit and saying

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Speaker 9: this is what I'm willing to do. This is an

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Speaker 9: asset I'm very focused on. We know there's a wave

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Speaker 9: of assets that are going to come. I don't want

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Speaker 9: to be distracted. I want certainty. I'm willing to pay

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Speaker 9: the right number, and I want to get the asset

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Speaker 9: that I want. That is something you are seeing in

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Speaker 9: a way that is surprising relative to where things were

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Speaker 9: twelve months ago. It is becoming much more than normal today.

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Speaker 5: And I think part of that is the friendly regulatory

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Speaker 5: environment that you're discussing. So do you think that this

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Speaker 5: cross border I guess approach will call it an M

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Speaker 5: and A will continue into the new year.

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Speaker 4: Yes, I do.

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Speaker 9: I do believe it and I'll tell you it's interesting

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Speaker 9: again because what's happening is crossboard of volumes that are

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Speaker 9: again running at record highs. And it's like seven hun

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Speaker 9: than fifty billion in North America last year, but sixty

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Speaker 9: five percent of that was into the US. The US

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Speaker 9: is the bastion of growth in global markets today. And

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Speaker 9: you see this now both with foreign strategic acquirers who

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Speaker 9: understand the need to capture some of that growth and

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Speaker 9: localized supply chains. But you're also seeing it with the

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Speaker 9: same concept of sovereign wealth funds who see assets national treasure,

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Speaker 9: assets that could be very interesting to have ownership in.

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Speaker 9: You're going to continue to see that built for.

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Speaker 2: Your strategic buyers, financial buyers. What's the capital markets like

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Speaker 2: these days? Are the banks lending? Are you relying more

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Speaker 2: on private credit because we see in just in this

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Speaker 2: Warner Brothers Discovery deal, big bridge loans being quoted, big

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Speaker 2: financing packages being thrown out there.

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Speaker 8: It seems like it's pretty solid Westing.

440
00:20:49,680 --> 00:20:52,000
Speaker 9: It's a good market. So the banks are leaning in,

441
00:20:52,480 --> 00:20:55,640
Speaker 9: the banks are leaning in on the right situations. They're thoughtful,

442
00:20:55,680 --> 00:20:58,600
Speaker 9: We're being very careful about where we'll lending. You have

443
00:20:58,720 --> 00:21:02,200
Speaker 9: private credit available as as well as as a credible alternative,

444
00:21:02,240 --> 00:21:04,320
Speaker 9: and it is showing up in some large deals. We've

445
00:21:04,359 --> 00:21:06,400
Speaker 9: obviously seen it in this one. We talked about it.

446
00:21:06,880 --> 00:21:10,760
Speaker 9: We're spending a lot of time advising the folks at Paramount,

447
00:21:10,800 --> 00:21:14,160
Speaker 9: and what I'll just say about this deal is, look,

448
00:21:14,200 --> 00:21:18,080
Speaker 9: I think the offer, the aggregate offer that's being provided

449
00:21:18,119 --> 00:21:20,959
Speaker 9: to the Warner Brother shoholders, we think our offer is

450
00:21:21,000 --> 00:21:24,600
Speaker 9: superior and that our client will prevail, and hopefully Shoholders

451
00:21:24,640 --> 00:21:28,000
Speaker 9: will see the value of the separate deal this is

452
00:21:28,000 --> 00:21:30,400
Speaker 9: the whole thing, and see the aggregate value they could

453
00:21:30,440 --> 00:21:32,080
Speaker 9: actually get in this and not have to take the risk.

454
00:21:33,400 --> 00:21:35,760
Speaker 5: I don't want to get too political, but it's interesting

455
00:21:35,800 --> 00:21:38,720
Speaker 5: to me that an administration that is very much about

456
00:21:38,760 --> 00:21:43,879
Speaker 5: America first and an isolationist in many ways is open

457
00:21:44,119 --> 00:21:47,679
Speaker 5: to sovereign wealth funds and money coming from across the

458
00:21:47,720 --> 00:21:50,320
Speaker 5: border to be involved in a lot of these deals.

459
00:21:50,400 --> 00:21:52,520
Speaker 5: I mean, I just I find that curious.

460
00:21:53,280 --> 00:21:53,480
Speaker 3: You know.

461
00:21:53,720 --> 00:21:55,320
Speaker 9: The way I kind of think about it is that

462
00:21:55,560 --> 00:21:59,840
Speaker 9: I think what's going to end up happening is they

463
00:22:00,040 --> 00:22:02,360
Speaker 9: will be guardrails. Put look at what happened. We advised

464
00:22:02,400 --> 00:22:04,880
Speaker 9: Nippon Steel and US Steel there were some very clear

465
00:22:04,920 --> 00:22:07,720
Speaker 9: guardrails that were put on, not exactly your sovereign word fund,

466
00:22:07,720 --> 00:22:09,560
Speaker 9: but still we had a golden shar being issued for

467
00:22:09,560 --> 00:22:12,480
Speaker 9: the first time in the United States, more common in Europe.

468
00:22:13,040 --> 00:22:15,360
Speaker 9: I think the general theme over here is there are

469
00:22:16,400 --> 00:22:20,080
Speaker 9: global alliances being formed. There is an increasing emphasis on

470
00:22:20,119 --> 00:22:21,960
Speaker 9: the Middle East, and I think when you think about

471
00:22:21,960 --> 00:22:25,359
Speaker 9: it in that context, there is a view that this

472
00:22:25,560 --> 00:22:28,280
Speaker 9: capital that's coming in is going to benefit both the

473
00:22:28,280 --> 00:22:32,320
Speaker 9: American consumer and also the national interest because it's providing

474
00:22:32,359 --> 00:22:36,240
Speaker 9: capital and places that is, you know, it's investment is needed,

475
00:22:36,640 --> 00:22:40,000
Speaker 9: and it's providing that capital at some pretty interesting cost

476
00:22:40,040 --> 00:22:43,159
Speaker 9: of financing. That makes this attractive in the context of

477
00:22:43,160 --> 00:22:45,760
Speaker 9: the global alliances that the administration's trying to form.

478
00:22:46,280 --> 00:22:48,880
Speaker 2: Samir, what's different for one I was in your seat,

479
00:22:48,920 --> 00:22:50,920
Speaker 2: is there's a lot of boutiques out there that are

480
00:22:51,000 --> 00:22:55,040
Speaker 2: really good. How do you City, with the diversified financial

481
00:22:55,080 --> 00:22:58,720
Speaker 2: offerings of City and Goldman and JP Morgan, how do you, guys,

482
00:22:59,280 --> 00:23:02,680
Speaker 2: I guess, set yourselves apart versus some of these boutiques.

483
00:23:03,000 --> 00:23:06,720
Speaker 9: Look, I think it's you know, every every sector, every

484
00:23:06,720 --> 00:23:10,000
Speaker 9: industry has competition. We welcome competition. I think from our perspective.

485
00:23:10,600 --> 00:23:12,639
Speaker 9: We believe in the long term relationships that we have

486
00:23:12,680 --> 00:23:16,119
Speaker 9: with our clients, and we also have an ability to

487
00:23:16,160 --> 00:23:19,000
Speaker 9: provide a very holistic solution. So we've got very good

488
00:23:19,160 --> 00:23:21,800
Speaker 9: advisory functions are seen in the incredible year that we're

489
00:23:21,800 --> 00:23:24,280
Speaker 9: having an M and A at city this year, and

490
00:23:24,320 --> 00:23:26,240
Speaker 9: then I combine it with the broader balance sheet that

491
00:23:26,240 --> 00:23:28,440
Speaker 9: we can bring and by the way, a lot of

492
00:23:28,480 --> 00:23:30,880
Speaker 9: these deals, we'd start to get very complex other things

493
00:23:30,880 --> 00:23:32,959
Speaker 9: that we're spending time on that the team is going

494
00:23:33,000 --> 00:23:35,800
Speaker 9: to be working on through the holidays. For better or worse,

495
00:23:36,200 --> 00:23:40,320
Speaker 9: there's there's there's complications in these deals. And what you

496
00:23:40,440 --> 00:23:42,600
Speaker 9: want from an advisor is the ability to provide a

497
00:23:42,600 --> 00:23:47,679
Speaker 9: holistic solution and not bring in seven different providers and

498
00:23:47,720 --> 00:23:50,600
Speaker 9: then you worry about confidentiality. That becomes an issue. But

499
00:23:50,840 --> 00:23:54,439
Speaker 9: I think clients value the advice they advise, they value

500
00:23:54,440 --> 00:23:58,960
Speaker 9: the relationship, and we don't. When we look at our advice,

501
00:23:59,040 --> 00:24:02,040
Speaker 9: our advice is fairly holistic. Across the bank. We don't

502
00:24:02,080 --> 00:24:03,600
Speaker 9: have to sit there and say we just worded about

503
00:24:03,640 --> 00:24:06,320
Speaker 9: one pocket of of UH.

504
00:24:06,359 --> 00:24:08,720
Speaker 8: Because you have a deeps a deep bench. That's the pitch.

505
00:24:08,840 --> 00:24:11,000
Speaker 2: Yes, you do it with all Samir, thank you so much.

506
00:24:11,000 --> 00:24:13,000
Speaker 2: Really appreciate taking some of your time. Samir Sek, he's

507
00:24:13,000 --> 00:24:15,080
Speaker 2: co head of M and A for North America. For

508
00:24:15,520 --> 00:24:18,280
Speaker 2: city Name with us or from Bloomberg Surveillance. Coming up

509
00:24:18,520 --> 00:24:19,200
Speaker 2: after this.

510
00:24:27,840 --> 00:24:31,440
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live

511
00:24:31,480 --> 00:24:34,639
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

512
00:24:34,760 --> 00:24:38,119
Speaker 1: Apple Karplay and Android autto with the Bloomberg Business app,

513
00:24:38,320 --> 00:24:40,080
Speaker 1: or watch US live on YouTube.

514
00:24:40,560 --> 00:24:43,040
Speaker 2: It is that time of day, folks. You wait for it,

515
00:24:43,040 --> 00:24:45,520
Speaker 2: it's here newspapers Lisa Mittail at least.

516
00:24:45,480 --> 00:24:46,240
Speaker 4: A half hours. All right.

517
00:24:46,240 --> 00:24:48,359
Speaker 10: So we're talking about a new growing trend in the

518
00:24:48,359 --> 00:24:51,680
Speaker 10: housing market. You have more luxury home buyers. They're looking

519
00:24:51,720 --> 00:24:55,080
Speaker 10: for fully furnished homes. I'm not just talking, you know, furniture.

520
00:24:55,119 --> 00:24:58,040
Speaker 10: They want the sheets, the mattresses, the pots, the pens,

521
00:24:58,040 --> 00:25:02,440
Speaker 10: the utensils, like everything's to nuts. The question is how

522
00:25:02,520 --> 00:25:05,240
Speaker 10: much extra does something like that cost if you want it?

523
00:25:05,400 --> 00:25:07,080
Speaker 10: So the Wall Street Journal they talked to a seller

524
00:25:07,080 --> 00:25:10,480
Speaker 10: in Fort Lauderdale, Florida, tacked on an extra one hundred

525
00:25:10,520 --> 00:25:13,040
Speaker 10: and seventy five thousand dollars on top of the price

526
00:25:13,080 --> 00:25:15,040
Speaker 10: at the home to get all of that, and this

527
00:25:15,160 --> 00:25:16,159
Speaker 10: is luxury, so just.

528
00:25:16,240 --> 00:25:18,320
Speaker 8: Gave it in mind. Wow, she even stocked it with

529
00:25:18,359 --> 00:25:20,680
Speaker 8: toilet paper and paper towels for them. Did we wear

530
00:25:20,720 --> 00:25:21,560
Speaker 8: that in for good measure?

531
00:25:21,560 --> 00:25:24,080
Speaker 2: And when we bought our Carmel house, we did exactly

532
00:25:24,119 --> 00:25:26,320
Speaker 2: that you did. We loved their style, we loved everything

533
00:25:26,440 --> 00:25:28,160
Speaker 2: was perfect, like, hey, we'll just take it as is.

534
00:25:28,280 --> 00:25:30,840
Speaker 2: When we sold it, we sold it at with all

535
00:25:30,880 --> 00:25:33,560
Speaker 2: that stuff, so that this good stuff, I mean.

536
00:25:33,600 --> 00:25:36,040
Speaker 8: That brings turn key to a whole new lab mess.

537
00:25:36,040 --> 00:25:38,120
Speaker 10: Of course, and it's better because it can It's both

538
00:25:38,119 --> 00:25:40,000
Speaker 10: for both sides, you know, like you can sell it

539
00:25:40,000 --> 00:25:41,639
Speaker 10: faster and then the person comes in and you just

540
00:25:41,720 --> 00:25:42,280
Speaker 10: walk right in.

541
00:25:42,359 --> 00:25:44,800
Speaker 5: We just walked and plopped down and just take your luggage,

542
00:25:44,800 --> 00:25:46,480
Speaker 5: I guess with your clothes and off you go.

543
00:25:47,760 --> 00:25:49,080
Speaker 8: I guess an extra money to.

544
00:25:49,880 --> 00:25:51,680
Speaker 2: No in nor did I feel like we were paying

545
00:25:51,720 --> 00:25:53,360
Speaker 2: for it. You know, it was just you know, it's

546
00:25:53,400 --> 00:25:56,320
Speaker 2: just kind of it's already stupid pre expense about there anyway.

547
00:25:56,440 --> 00:25:56,840
Speaker 3: No, it is.

548
00:25:56,880 --> 00:25:57,119
Speaker 2: It is.

549
00:25:57,320 --> 00:25:59,320
Speaker 10: But they're saying, like what they're saying is that it

550
00:25:59,320 --> 00:26:01,520
Speaker 10: started to increase after the pandemic because in the pandemic

551
00:26:01,600 --> 00:26:03,280
Speaker 10: there were a lot of you know, people were trying

552
00:26:03,280 --> 00:26:07,280
Speaker 10: to get furniture, and everything happened supply chain, so trends

553
00:26:07,320 --> 00:26:09,800
Speaker 10: kind of stayed and they just like to come in

554
00:26:09,840 --> 00:26:11,560
Speaker 10: with everything. They don't have to worry about waiting for

555
00:26:11,600 --> 00:26:13,119
Speaker 10: a couch or waiting for a bet or anything.

556
00:26:13,160 --> 00:26:13,760
Speaker 4: It's all there.

557
00:26:13,880 --> 00:26:16,600
Speaker 5: And oftentimes these folks are brought in designers and whatever,

558
00:26:16,640 --> 00:26:18,160
Speaker 5: and so the house is beautiful.

559
00:26:18,240 --> 00:26:19,919
Speaker 8: It's like a show palace. You're like, I'll take the

560
00:26:19,920 --> 00:26:20,320
Speaker 8: whole thing.

561
00:26:20,720 --> 00:26:21,840
Speaker 7: I would do it.

562
00:26:22,440 --> 00:26:26,960
Speaker 10: Okay. So we've talked about this before. Remember when a

563
00:26:27,000 --> 00:26:30,359
Speaker 10: couple of provinces Encounada, they stopped the imports of US alcohol, right,

564
00:26:30,359 --> 00:26:33,760
Speaker 10: they took it off the shelves, and response to President

565
00:26:33,800 --> 00:26:35,840
Speaker 10: Trump's have so, business Insider was saying, a few of

566
00:26:35,840 --> 00:26:39,600
Speaker 10: those provinces are actually planning to sell what's left in inventory,

567
00:26:40,400 --> 00:26:42,359
Speaker 10: and they're going to donate it to a good cause.

568
00:26:42,400 --> 00:26:45,240
Speaker 10: They're going to donate the money they make two food banks.

569
00:26:46,400 --> 00:26:48,800
Speaker 8: They're going to donate the alcohol to the money.

570
00:26:48,920 --> 00:26:51,240
Speaker 7: Yeah, selling it, yes, yes, yes, yes.

571
00:26:51,280 --> 00:26:53,919
Speaker 10: So for example, Prince Edward Island, right, they put their

572
00:26:53,960 --> 00:26:57,800
Speaker 10: alcohol back on store shelves yesterday. The government anticipates a

573
00:26:57,800 --> 00:27:00,879
Speaker 10: profit about six hundred thousand Canadian dollars from the sale,

574
00:27:00,960 --> 00:27:02,840
Speaker 10: So that's going to be distributed to food banks all

575
00:27:02,840 --> 00:27:03,600
Speaker 10: across the island.

576
00:27:03,680 --> 00:27:06,200
Speaker 2: I wonder what Canadians did they stop buying Jack Daniels

577
00:27:06,240 --> 00:27:07,320
Speaker 2: and Tito's and stuff.

578
00:27:07,359 --> 00:27:07,960
Speaker 4: I guess.

579
00:27:08,000 --> 00:27:10,280
Speaker 10: I mean they're saying they don't intend to place any

580
00:27:10,320 --> 00:27:12,760
Speaker 10: further orders for American ALcom.

581
00:27:13,240 --> 00:27:14,679
Speaker 2: I mean, I have some Canadian friends.

582
00:27:15,000 --> 00:27:15,919
Speaker 4: They are upset.

583
00:27:16,119 --> 00:27:18,639
Speaker 8: Yes, it is deep, and it is across the board.

584
00:27:18,800 --> 00:27:20,520
Speaker 2: I mean they are not happy with us.

585
00:27:20,760 --> 00:27:24,440
Speaker 5: So, but they're buying the homemade stuff now, So I

586
00:27:24,440 --> 00:27:25,520
Speaker 5: guess it's good for Canada.

587
00:27:25,600 --> 00:27:29,679
Speaker 2: Okay, Yeah right, that's the Canadian stuffy stuff up in Canada.

588
00:27:29,960 --> 00:27:33,640
Speaker 10: Ye all right, I want to take you to Okay,

589
00:27:33,680 --> 00:27:35,399
Speaker 10: so we talk about AI, right, and how it's being

590
00:27:35,480 --> 00:27:39,520
Speaker 10: used for different things, even to find a soulmate. Yes,

591
00:27:39,640 --> 00:27:42,280
Speaker 10: AI on dating apps. It's going to cost you. I'll

592
00:27:42,280 --> 00:27:44,320
Speaker 10: get to the cost in just a second. But it's

593
00:27:44,440 --> 00:27:47,040
Speaker 10: business Insider. They spoke the CEO of this company called Keeper.

594
00:27:47,119 --> 00:27:50,600
Speaker 10: It's an AI matchmaking startup. They say they can find

595
00:27:50,600 --> 00:27:52,480
Speaker 10: you soul mate. If they can't, they'll let you know.

596
00:27:52,600 --> 00:27:57,760
Speaker 4: You'll get rejected. So it uses out sorry for you exactly.

597
00:27:58,200 --> 00:28:01,479
Speaker 10: They use like algorithms AI models to match people. But

598
00:28:01,520 --> 00:28:03,720
Speaker 10: you have to go through this lengthy process, right, I

599
00:28:03,720 --> 00:28:05,720
Speaker 10: mean there's you have to fill out a questionnaire with

600
00:28:05,760 --> 00:28:10,000
Speaker 10: your age, academic test scores, like your SATs, career ambitions,

601
00:28:10,080 --> 00:28:12,920
Speaker 10: your salary, net worth, all that kind of stuff.

602
00:28:12,920 --> 00:28:14,760
Speaker 2: I don't think dudes care about that too much, but

603
00:28:14,880 --> 00:28:17,600
Speaker 2: I'm just speaking SAT score.

604
00:28:18,840 --> 00:28:20,919
Speaker 10: It's funny you mentioned dudes because they're the only ones

605
00:28:20,920 --> 00:28:24,959
Speaker 10: who have to pay. Oh okay, So if you're a

606
00:28:25,000 --> 00:28:27,680
Speaker 10: man and you do find a mate and you wind

607
00:28:27,760 --> 00:28:30,280
Speaker 10: up getting married, you sign this marriage bounty and you

608
00:28:30,320 --> 00:28:34,000
Speaker 10: have to pay fifty thousand dollars. So if wow, find

609
00:28:34,000 --> 00:28:36,480
Speaker 10: out if you get a date, you have to pay

610
00:28:36,520 --> 00:28:38,080
Speaker 10: five thousand dollars for the date.

611
00:28:38,360 --> 00:28:41,960
Speaker 5: So it's it's for certainly pleasle I mean, I don't

612
00:28:42,000 --> 00:28:42,520
Speaker 5: know about this.

613
00:28:43,360 --> 00:28:46,000
Speaker 2: So it's it's just taking tender and match dot com

614
00:28:46,000 --> 00:28:49,560
Speaker 2: to the next level. Yes, so it's more than just

615
00:28:49,560 --> 00:28:50,480
Speaker 2: swiping left or right.

616
00:28:50,880 --> 00:28:53,200
Speaker 10: Yes, okay, it's curated through algorithms.

617
00:28:53,480 --> 00:28:55,120
Speaker 5: At least they're matching you with a real person. I

618
00:28:55,120 --> 00:28:57,720
Speaker 5: thought you're gonna tell me, like the AI jack becomes

619
00:28:57,760 --> 00:28:59,960
Speaker 5: like your soulmate, you know, which would be very scary.

620
00:29:00,280 --> 00:29:02,560
Speaker 2: I think just going into a bar and you know,

621
00:29:02,840 --> 00:29:06,080
Speaker 2: figuring it out, that's not still still the way to go, exactly.

622
00:29:06,000 --> 00:29:07,760
Speaker 8: With cocktails at like thirty bucks a pop.

623
00:29:07,640 --> 00:29:09,760
Speaker 2: Right last, exactly, Lisa Mitteo.

624
00:29:09,880 --> 00:29:11,120
Speaker 8: That's your newspapers, folks.

625
00:29:11,520 --> 00:29:16,360
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

626
00:29:16,480 --> 00:29:20,760
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

627
00:29:20,880 --> 00:29:24,360
Speaker 1: seven to ten am Eastern on Bloomberg dot com, the

628
00:29:24,440 --> 00:29:28,479
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

629
00:29:28,520 --> 00:29:31,880
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630
00:29:32,080 --> 00:29:33,800
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