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Speaker 2: Let's just set the stage here. Kind of mid December
Speaker 2: SMP of fifteen sixteen percent, NASTAC up twenty twenty one percent,
Speaker 2: some pretty solid results out of the bond market as well,
Speaker 2: high single digit returns. Where do we go from here?
Speaker 2: Because that was a pretty solid year, despite some volatility
Speaker 2: in the beginning of the year. Ross Mayfield joins us.
Speaker 2: He's an investment strategist bear a private wealth and management. Ross,
Speaker 2: let's set the stage for twenty twenty six here, what
Speaker 2: are the conversations you're having with your clients these days?
Speaker 3: Yeah, I mean, with the market at all time highs,
Speaker 3: a lot of the typical warriors that we hear from
Speaker 3: investors have been tossed out for the moment, and the
Speaker 3: main worry is just the strength itself.
Speaker 4: Right, are we have things been too good?
Speaker 3: And are we being set up for a disappointing twenty
Speaker 3: twenty six? I think expectation management matters, right. Obviously, we
Speaker 3: can't keep printing high teens twenty percent plus years year
Speaker 3: after year, and this would be the fourth year of
Speaker 3: gains of twenty twenty six is positive, but in a
Speaker 3: bawl market that's not in common, and there are a
Speaker 3: lot of tailwinds for the market as we turn the
Speaker 3: page on twenty twenty five. So we're pretty optimistic, but
Speaker 3: just managing those expectations.
Speaker 5: I also think, guys, what's kind of encouraging about this
Speaker 5: market is yesterday we were able to hit records on
Speaker 5: the Dow, a squeezed out one for the S and
Speaker 5: P five hundred, but we did it largely without big
Speaker 5: tech names, without those big AI names. So, ross, do
Speaker 5: you think that this rally is broadening out and we
Speaker 5: could see I don't want to say a change in leadership,
Speaker 5: but at least a broader rally in twenty twenty six.
Speaker 4: Absolutely. I mean, for most of this rally, what has
Speaker 4: been one of the.
Speaker 3: Main concerns, the concentration, the potential narrowness of the rally,
Speaker 3: the focus on the AI trade and the mag seven
Speaker 3: and the reality is different. Under the surface, You've got
Speaker 3: things like financials working healthcare has staged a really nice
Speaker 3: comeback after a lot of years underwater. Industrials have held
Speaker 3: their own discretion areas breaking back out, So you have
Speaker 3: a lot of other kind of you know, real economy
Speaker 3: cyclical rate sensitive names working.
Speaker 4: Obviously, the rate cuts have helped.
Speaker 3: Spur some activity in those corners of the market, and
Speaker 3: the fundamentals are expected to brought out too. You know,
Speaker 3: even this last quarter we saw the SMP four ninety
Speaker 3: three with double digit earnings growth, and if you look
Speaker 3: at the earnings estimates for twenty twenty six, the expectation
Speaker 3: is that continued broadening in the fundamentals. So I think
Speaker 3: it would make sense for that to continue in the
Speaker 3: price action as well.
Speaker 2: Hey, Ross Corporate America has really done its part here
Speaker 2: to support this market. Earnings have come in really really
Speaker 2: strong for the last several quarters. The earnings power for
Speaker 2: twenty twenty six is enough to support this market.
Speaker 4: Yeah, absolutely.
Speaker 3: I mean we had the early part of a bullmarket
Speaker 3: rally built on multiple expansion, which is really typical coming
Speaker 3: out of a bear market low, and then earnings have
Speaker 3: taken the baton and really carried the day here in
Speaker 3: twenty twenty five, and I think that that will be
Speaker 3: the case in twenty twenty six as well. Earnings growth
Speaker 3: you know, expected broadly to be in the thirteen fourteen
Speaker 3: percent range. Even if that comes down to something like
Speaker 3: ten percent, that's more than enough to carry a bull
Speaker 3: market through.
Speaker 4: Again, maybe we manage expectations.
Speaker 3: Maybe maybe single digit returns, low double digit returns is
Speaker 3: kind of where we.
Speaker 4: Set our base case.
Speaker 3: But again, after three years of high teen or twenty
Speaker 3: percent plus growth, that's more than enough. And that's pretty
Speaker 3: typical for what a fourth to fifth year of a
Speaker 3: bull market might look like. So I think the earnings growth,
Speaker 3: the profit margin expansion, the breadth of that earnings growth
Speaker 3: is more than enough to carry the day. And I
Speaker 3: think it's the main one of the main pushbacks against
Speaker 3: the argument that we're in a bubble. The fundamentals have
Speaker 3: kept up with price by and large, and that's not
Speaker 3: the case in most real bubbles.
Speaker 5: But ross as we look to maybe rejigger their portfolio,
Speaker 5: as we you know, near these final days of the year,
Speaker 5: is it time to buy the laggards? And if so,
Speaker 5: what's sticking out to you?
Speaker 4: You know, I don't know if you need to buy
Speaker 4: the laggards. I think you can just broaden out.
Speaker 3: I mean, as we mentioned earlier, there is strength, nascent
Speaker 3: strength in some of these non tech areas. The place
Speaker 3: that I am, you know, shouting from the rooftops for
Speaker 3: investors to consider their portfolio positioning, and it's international, which
Speaker 3: has not been a laggard this year, but has been
Speaker 3: a laggard for most of the last fifteen years. And
Speaker 3: so I think a lot of investors have thrown in
Speaker 3: the towel on international and the reality is that this bullmarket.
Speaker 3: We mentioned the breadth within the US, but it's really
Speaker 3: a global bull market, and in a lot of ways,
Speaker 3: the leadership.
Speaker 4: Is outside of the US.
Speaker 3: You look to Japan, you look to Europe, you look
Speaker 3: at some of the emerging market names. A weaker dollar
Speaker 3: has been a catalyst, but there is a fundamental strength
Speaker 3: coming from abroad as well. I think a lot of
Speaker 3: investors are structurally underweight international and can do you know,
Speaker 3: could do a lot of work just to get back
Speaker 3: to kind of a marketwaight or and neutral weight international.
Speaker 3: That is one of the main things that I'm talking
Speaker 3: about with investors as we close the book on twenty five.
Speaker 2: Here russ Let's follow up on the international play there.
Speaker 2: Do you feel more comfortable than developed markets or emerging markets,
Speaker 2: because we've heard folks talking up in emerging markets more
Speaker 2: in the last three four or five months and a
Speaker 2: half in a while.
Speaker 3: Yeah, absolutely, I mean there is I think it starts
Speaker 3: and ends with a week dollars story, right, and if
Speaker 3: you look at this year, it's been it's been a
Speaker 3: week dollar story.
Speaker 4: But if you look at twenty.
Speaker 3: Twenty six, you know, you think about the FED continuing
Speaker 3: to cut rates, you think about what a new potential
Speaker 3: FED chair might want to do and continue to ease,
Speaker 3: and then you look around the world and you see
Speaker 3: global yields headed higher. Japan and Europe, Australia can a
Speaker 3: lot of central banks are talking about their next move
Speaker 3: being great hikes, and so if you think about interest
Speaker 3: rate differentials, you could really build a case for a
Speaker 3: continued weakness and the dollar that does tend to boost
Speaker 3: emerging markets more. I think I'm a little more comfortable
Speaker 3: going to some of those developed markets. You know, Japan
Speaker 3: has been an incredible story breaking out after thirty plus
Speaker 3: years underwater.
Speaker 4: But by and large, I.
Speaker 3: Think you can if you're just a typical long term investor,
Speaker 3: you can probably just buy, buy the bulk of it,
Speaker 3: you know, the MSCI All Country x US, and call
Speaker 3: it a day, because I do again. I think the
Speaker 3: main thing is you've got a home country bias and
Speaker 3: you've had fifteen years of underperformance. I think a lot
Speaker 3: of investors probably probably owned very little, if any international
Speaker 3: at all, So just a blanket ownership of a broad
Speaker 3: international index will.
Speaker 4: Do the job.
Speaker 2: Ross, thanks so much for joining us. Really appreciate it.
Speaker 2: Ross Mayfield, investment strategist at BAIRED Private Valve Management. Stay
Speaker 2: with us or from Bloomberg Surveillance. Coming up after.
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Speaker 6: Prea.
Speaker 2: Mister Joints is here Core plus a bond etf portfolio
Speaker 2: manager at JP Morgan Asset Management Pria. Thanks so much
Speaker 2: for joining us here in studio. It's a little chilly
Speaker 2: at so we appreciate you leaving the confines of the
Speaker 2: brand new JP Morgan Tower on Park Avenue.
Speaker 4: Which is just awesome.
Speaker 2: I walk by it every day the Penn Station. They
Speaker 2: did a phenomenal job there. Love to get your thoughts
Speaker 2: on the FED here. We're seeing some comments from mister Goldsby,
Speaker 2: who was at the center, but he says, I kind
Speaker 2: of need more data, but boy, rates can come down more,
Speaker 2: he says, if the data warrants it. What did you
Speaker 2: take away from the FED meeting this week?
Speaker 6: Sure, so thanks for having me. Always enjoy the conversation.
Speaker 6: So I think what the FED did brilliantly was to
Speaker 6: retain optionality.
Speaker 7: So we have a lot of data coming up next week.
Speaker 7: We're also going to.
Speaker 6: Get another payrol report before the next jan meeting. So
Speaker 6: they created the optionality that if the data is weak,
Speaker 6: particularly on the labor front, that they can absolutely cut more.
Speaker 6: But they did sort of signal that the bar to
Speaker 6: cut any further is higher. So, you know, and I think,
Speaker 6: and you know, you you reference President goals B. I
Speaker 6: think there's a division of the FED because the risks
Speaker 6: to the labor market and the risk to inflation are
Speaker 6: both high, and different FED officials are putting more emphasis
Speaker 6: on one risk versus another. I think President Goalsby is
Speaker 6: probably in the inflation camp, you know, sort of worried
Speaker 6: that inflation has not seen much progress this year. On
Speaker 6: our end, we think that inflation, if you look at
Speaker 6: the details of inflation, service inflation is heading lower. Wage
Speaker 6: inflation is heading lower. So in our base case, we
Speaker 6: do see a couple more cuts, you know, by the
Speaker 6: time the Fed actually reaches neutral, but there's no urgency
Speaker 6: so they can cut this, you know, over the next
Speaker 6: six months. Of course, if the labor market is weak
Speaker 6: and that unemployment rate, and that's what we're watching, if
Speaker 6: that continues to move higher, I think this swead is
Speaker 6: going to be a lot more aggressive.
Speaker 5: Yeah, and Powell even signaled that right that the labor
Speaker 5: market he was saying, in not so many words, is
Speaker 5: probably weaker than we think it is. Also, we're dealing
Speaker 5: with backward looking data at the moment, so we're still
Speaker 5: waiting again for that more data to come in. But pria,
Speaker 5: we know that credit spreads are tight, but you say
Speaker 5: they're justified.
Speaker 6: Yes, If I look at fundamentals of company balance sheets,
Speaker 6: companies have not really levered up. That would make me
Speaker 6: a little nervous if the debt levels kept increasing, large
Speaker 6: debt issues done by companies that didn't have much debt.
Speaker 6: So we're not that concerned about the fundamentals of whether
Speaker 6: it's earnings or leverage or even interest coverage ratio.
Speaker 7: But spreads. So I think spreads are at the tighter
Speaker 7: end of the range right for good reason.
Speaker 6: We are a little cautious that there's going to be
Speaker 6: a lot of supply in January. There typically is, and
Speaker 6: this time if the rest of the corporate sector, beyond
Speaker 6: just the AI CAPEX companies are deciding they need to raise.
Speaker 7: Money either for investment in EI, in how.
Speaker 6: They're going to incorporate in their business, or MNA related financing,
Speaker 6: we think there could be a lot of supply and
Speaker 6: that is an opportunity. It wouldn't be worried, but we
Speaker 6: are keeping some cash on the sideline waiting to buy
Speaker 6: when that supply comes.
Speaker 2: Interesting, so does the bond market broadly defined? Are they
Speaker 2: concerned about some of this AI spending and the debt
Speaker 2: associated with the AI spending. Because I look at some
Speaker 2: of these issues, I'd buy their bonds. I mean, these
Speaker 2: are great companies, great cash flows, clean balance sheets. I
Speaker 2: mean i'd be as much as you got, I'll take it.
Speaker 7: Yeah, I think you.
Speaker 6: Know, when you come in with a very large deal,
Speaker 6: it has to be priced, so there was some I
Speaker 6: would say supply in digestion. You've got a lot of
Speaker 6: that supply in September. Look at all the posts deal pricing.
Speaker 6: What has happened to the market. All those spreads are tighter,
Speaker 6: So I mean Oracle has had their CDs widening. I
Speaker 6: think there's concerns around how much more debt they're going
Speaker 6: to need to issue, But broadly, I don't think the
Speaker 6: credit market is nervous. There's a valuation question and do
Speaker 6: I want a little bit of a new issue concession
Speaker 6: to take.
Speaker 7: Down a large part. I think there's some of that.
Speaker 6: Look at the spread curve that has not really steepened.
Speaker 6: I think there's a lot of demand for long end
Speaker 6: corporate paper.
Speaker 7: It's there all in level of yields. Those spreads are narrow,
Speaker 7: but look at all in eields.
Speaker 6: If you're getting six percent five six percent high quality
Speaker 6: investment grade debt. I think that's why we're seeing continued demand,
Speaker 6: and I don't think the supply will be an issue
Speaker 6: beyond just that week.
Speaker 7: Maybe there's a little bit of spread widening.
Speaker 1: CRIA.
Speaker 5: What's your thinking with these companies, all these big buyouts
Speaker 5: and so many companies taking on debt. Because we know
Speaker 5: that Netflix is deal to buy Warner Brothers. Discovery includes
Speaker 5: fifty nine billion dollars in bridge loans. Are you concerned
Speaker 5: at all that companies are getting these deals done by
Speaker 5: taking on such massive debt.
Speaker 7: I think that's always a concern.
Speaker 6: I gat bo activity or if there's worsening of the
Speaker 6: credit I think, you know, obviously there'll be some cases
Speaker 6: where maybe it's over down. On average, So far, we
Speaker 6: haven't seen too much of debt fueled sort of bubbles.
Speaker 7: You know, do we get there next year?
Speaker 6: If the credit markets are open and the Fed's easy,
Speaker 6: I would still say all in neils are not that
Speaker 6: low for companies not getting free money, and so we are.
Speaker 7: Not that concern. But at certain pockets.
Speaker 6: Remember the cockroach hunting a few weeks ago or months ago,
Speaker 6: we were all worried.
Speaker 7: I think you really want to minimize cockroaches.
Speaker 6: Do a lot of credit work to know that if
Speaker 6: a company is taking on debt, will they see the
Speaker 6: productivity gains? Can they see the economies of scale and MNA.
Speaker 6: That's going to be a big issue. We're going to
Speaker 6: be analyzing two companies merging. Do we think that they
Speaker 6: can keep margins, they can make those debt payments. So far,
Speaker 6: we haven't seen things that would worry us, but we
Speaker 6: have to stay vigilant.
Speaker 2: So I think a lot of folks they are fairly
Speaker 2: constructive on twenty twenty six, And it all starts with
Speaker 2: I think the economy is in pretty good shape. I
Speaker 2: think we're going to see some decent growth out of
Speaker 2: the economy. Is that kind of where you guys are
Speaker 2: of a JP Morganism management?
Speaker 7: We are.
Speaker 6: We think we're in a soft line. I think we've
Speaker 6: been in one for the last two years. A lot
Speaker 6: of that is based on bottom up company fundamentals as
Speaker 6: well as consumer fundamentals. On average, balance sheets of the
Speaker 6: corporate sector and the consumer look very strong, and I
Speaker 6: think that's why the economy has been resilient.
Speaker 7: We've had so many.
Speaker 6: Shocks this year right right from tariffs, immigration, geopolitical, and
Speaker 6: yet the economy is sort of powered through. In our
Speaker 6: base case that remains the case over the next year.
Speaker 6: I am a little concerned about the labor market, right
Speaker 6: I'm not hearing companies saying that they're going to increase hiring,
Speaker 6: so maybe this is a jobless recovery. We have to
Speaker 6: see how long does that continue to power the consumer.
Speaker 7: Layoffs, is what I'm watching.
Speaker 6: I think that would unravel some of this, but I
Speaker 6: think the FED then aggressively starts cutting rates.
Speaker 5: All right, Priyamysra of JP Morgan Asset Management, Coreplus bond
Speaker 5: ETF Portfolio Manager, thanks for taking the short walk over
Speaker 5: from JP Morgan's headquarters here to.
Speaker 2: Stay with us or from Bloomberg Surveillance coming up after this.
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Speaker 2: Let's talk about M and A because we've been talking
Speaker 2: about this big Warner Brothers trade for the last seven weeks,
Speaker 2: but it's been a pretty darn good year for M
Speaker 2: and A. It feels like and I think banks for talking.
Speaker 8: About twenty twenty six as well.
Speaker 2: So let's check in with somebody who does this stuff
Speaker 2: for a living, Samir, seeing he's co head of M
Speaker 2: and A North America for City. Samir, help just frame
Speaker 2: out how twenty twenty five has been for M and A.
Speaker 2: And then kind of how you guys are thinking about
Speaker 2: twenty twenty six.
Speaker 9: Sure, happy to do it. Thanks Ball for having us
Speaker 9: and looking forward to the conversation. Look, it's been an
Speaker 9: interesting year, right, it's been just set the stage twenty
Speaker 9: twenty five. This year is going to be the second
Speaker 9: largest year in M and A volumes after twenty one,
Speaker 9: which had a lot of spack volumes in it. Let's
Speaker 9: also keep in mind, by the way, they were a
Speaker 9: couple of months where we were in the old rooms
Speaker 9: from an M and A standpoint, right around when tire
Speaker 9: its came out. So all of this momentums really happen
Speaker 9: if you think about it in the last eight months.
Speaker 9: I think back when I say to myself, you know,
Speaker 9: since twenty twenty we had like six megadeals fifty billion
Speaker 9: plus right over the last four years. This year, in
Speaker 9: the last two quarters, we've had four. This momentum is
Speaker 9: not going away. It's been incredibly busy. And why is that.
Speaker 9: We have a kind of confluence of some perfect factors
Speaker 9: of here. Right, You've got rates coming off, growth remains strong,
Speaker 9: there is a significant amount of investments that's coming in
Speaker 9: from an AI and thus a data center infrastructure perspective.
Speaker 9: I don't discount that that's a big driver this time,
Speaker 9: and then I combine that with how strategics are looking
Speaker 9: at deals. There is greater clarity on how to get
Speaker 9: regulatory approval for the first time in half a decade
Speaker 9: this time, and I think you're going to continue to
Speaker 9: see this momentum build because people are able to think
Speaker 9: about this as deal makers. We're able to look at
Speaker 9: the landscape and say we can get an answer as
Speaker 9: to whether something's going to pass muster. The administration's much
Speaker 9: more open to looking at remedies as a solution, which
Speaker 9: was not something that was available to the buyers, and
Speaker 9: thus able to find the right way to navigate these
Speaker 9: complex environments.
Speaker 5: All right, So a more friendly regulatory environment in which
Speaker 5: to work. So we know we're seeing a lot of
Speaker 5: consolidation in media, we know we're seeing consolidation in AI.
Speaker 5: We're else outside of those sort of expected areas. Where
Speaker 5: else are you seeing consolidation in the new year.
Speaker 9: It's a great question. You know, let's talk about AI,
Speaker 9: and when we talk about AI, everyone talks about LMS,
Speaker 9: But let's actually talk about what else happens beyond AI. Right,
Speaker 9: AI is causing massive amounts of spending that's flowing into
Speaker 9: data center infrastructure that impacts industrials. You think about let's
Speaker 9: call it picks and shovels, but you think about the
Speaker 9: volume that's coming in of spend over the next five
Speaker 9: years that is having a big impact from an industry perspective.
Speaker 9: So you're going to see a lot of flow on
Speaker 9: over there. You're seeing a lot of flow on in
Speaker 9: real estate as a function of that. And then let's
Speaker 9: also consider the fact you're coming out of COVID. We've
Speaker 9: had a change in human behavior that was forced on
Speaker 9: people and as a function of that, companies have had
Speaker 9: to adapt. You take those impacts, the need to fix
Speaker 9: supply chains, you take the need to think about tariffs.
Speaker 9: I think the other place. When you combine those two factors,
Speaker 9: you're going to see a lot of changes in the
Speaker 9: consumer landscape as well. That's not going away. So in
Speaker 9: my mind, like I see it happening across the board.
Speaker 9: Let's also consider you know the GLPS, right, you think
Speaker 9: about healthcare and some of the impact that that's having.
Speaker 9: I see this happening across sectors. So AI has a
Speaker 9: flow on on industrials, real estate in a few other places.
Speaker 9: I see a lot of change in consumers, and I
Speaker 9: see a lot of momentum in the healthcare franchise as well.
Speaker 2: Smyr talked to us about the private equity clients or
Speaker 2: sponsors out there. For you guys. You know, based on
Speaker 2: my thirty year career on the street, it's easy to
Speaker 2: raise money, and it's really easy to invest money. But man,
Speaker 2: it's really hard to monetize those investments. And that's been
Speaker 2: pronounced really over the last four or five years. What
Speaker 2: are you hearing from your sponsor clients.
Speaker 9: It's gotten much better. Yes, there was a lot of
Speaker 9: noise last year because you could not exit some of
Speaker 9: these assets because of what was happening in the market.
Speaker 9: So the markets have helped, I'll tell you this year
Speaker 9: exits are at a significantly elevated level. And by the way,
Speaker 9: if you look at the sponsor wallet of exits, forty
Speaker 9: percent of the wallet is coming from one billion dollar
Speaker 9: plus exits. It typically runs twenty to twenty five percent.
Speaker 9: That's a forty percent. Well, the other thing that's happening,
Speaker 9: you talk about capital coming in. You've got strategics who
Speaker 9: are now in a position to act, but you've also
Speaker 9: got a lot of let's call it sovereign wealth fund
Speaker 9: money right, and these funds have moved away from being
Speaker 9: passive LPs and they're starting to think much more aggressively
Speaker 9: about being direct investors. With the GPS, that has helped
Speaker 9: in a big way as well. So what you're seeing
Speaker 9: in auction processes, I am seeing situations where processes are
Speaker 9: getting preempted for quality assets. I'm seeing situations where strategics
Speaker 9: are showing up before sponsors going to exit and saying
Speaker 9: this is what I'm willing to do. This is an
Speaker 9: asset I'm very focused on. We know there's a wave
Speaker 9: of assets that are going to come. I don't want
Speaker 9: to be distracted. I want certainty. I'm willing to pay
Speaker 9: the right number, and I want to get the asset
Speaker 9: that I want. That is something you are seeing in
Speaker 9: a way that is surprising relative to where things were
Speaker 9: twelve months ago. It is becoming much more than normal today.
Speaker 5: And I think part of that is the friendly regulatory
Speaker 5: environment that you're discussing. So do you think that this
Speaker 5: cross border I guess approach will call it an M
Speaker 5: and A will continue into the new year.
Speaker 4: Yes, I do.
Speaker 9: I do believe it and I'll tell you it's interesting
Speaker 9: again because what's happening is crossboard of volumes that are
Speaker 9: again running at record highs. And it's like seven hun
Speaker 9: than fifty billion in North America last year, but sixty
Speaker 9: five percent of that was into the US. The US
Speaker 9: is the bastion of growth in global markets today. And
Speaker 9: you see this now both with foreign strategic acquirers who
Speaker 9: understand the need to capture some of that growth and
Speaker 9: localized supply chains. But you're also seeing it with the
Speaker 9: same concept of sovereign wealth funds who see assets national treasure,
Speaker 9: assets that could be very interesting to have ownership in.
Speaker 9: You're going to continue to see that built for.
Speaker 2: Your strategic buyers, financial buyers. What's the capital markets like
Speaker 2: these days? Are the banks lending? Are you relying more
Speaker 2: on private credit because we see in just in this
Speaker 2: Warner Brothers Discovery deal, big bridge loans being quoted, big
Speaker 2: financing packages being thrown out there.
Speaker 8: It seems like it's pretty solid Westing.
Speaker 9: It's a good market. So the banks are leaning in,
Speaker 9: the banks are leaning in on the right situations. They're thoughtful,
Speaker 9: We're being very careful about where we'll lending. You have
Speaker 9: private credit available as as well as as a credible alternative,
Speaker 9: and it is showing up in some large deals. We've
Speaker 9: obviously seen it in this one. We talked about it.
Speaker 9: We're spending a lot of time advising the folks at Paramount,
Speaker 9: and what I'll just say about this deal is, look,
Speaker 9: I think the offer, the aggregate offer that's being provided
Speaker 9: to the Warner Brother shoholders, we think our offer is
Speaker 9: superior and that our client will prevail, and hopefully Shoholders
Speaker 9: will see the value of the separate deal this is
Speaker 9: the whole thing, and see the aggregate value they could
Speaker 9: actually get in this and not have to take the risk.
Speaker 5: I don't want to get too political, but it's interesting
Speaker 5: to me that an administration that is very much about
Speaker 5: America first and an isolationist in many ways is open
Speaker 5: to sovereign wealth funds and money coming from across the
Speaker 5: border to be involved in a lot of these deals.
Speaker 5: I mean, I just I find that curious.
Speaker 3: You know.
Speaker 9: The way I kind of think about it is that
Speaker 9: I think what's going to end up happening is they
Speaker 9: will be guardrails. Put look at what happened. We advised
Speaker 9: Nippon Steel and US Steel there were some very clear
Speaker 9: guardrails that were put on, not exactly your sovereign word fund,
Speaker 9: but still we had a golden shar being issued for
Speaker 9: the first time in the United States, more common in Europe.
Speaker 9: I think the general theme over here is there are
Speaker 9: global alliances being formed. There is an increasing emphasis on
Speaker 9: the Middle East, and I think when you think about
Speaker 9: it in that context, there is a view that this
Speaker 9: capital that's coming in is going to benefit both the
Speaker 9: American consumer and also the national interest because it's providing
Speaker 9: capital and places that is, you know, it's investment is needed,
Speaker 9: and it's providing that capital at some pretty interesting cost
Speaker 9: of financing. That makes this attractive in the context of
Speaker 9: the global alliances that the administration's trying to form.
Speaker 2: Samir, what's different for one I was in your seat,
Speaker 2: is there's a lot of boutiques out there that are
Speaker 2: really good. How do you City, with the diversified financial
Speaker 2: offerings of City and Goldman and JP Morgan, how do you, guys,
Speaker 2: I guess, set yourselves apart versus some of these boutiques.
Speaker 9: Look, I think it's you know, every every sector, every
Speaker 9: industry has competition. We welcome competition. I think from our perspective.
Speaker 9: We believe in the long term relationships that we have
Speaker 9: with our clients, and we also have an ability to
Speaker 9: provide a very holistic solution. So we've got very good
Speaker 9: advisory functions are seen in the incredible year that we're
Speaker 9: having an M and A at city this year, and
Speaker 9: then I combine it with the broader balance sheet that
Speaker 9: we can bring and by the way, a lot of
Speaker 9: these deals, we'd start to get very complex other things
Speaker 9: that we're spending time on that the team is going
Speaker 9: to be working on through the holidays. For better or worse,
Speaker 9: there's there's there's complications in these deals. And what you
Speaker 9: want from an advisor is the ability to provide a
Speaker 9: holistic solution and not bring in seven different providers and
Speaker 9: then you worry about confidentiality. That becomes an issue. But
Speaker 9: I think clients value the advice they advise, they value
Speaker 9: the relationship, and we don't. When we look at our advice,
Speaker 9: our advice is fairly holistic. Across the bank. We don't
Speaker 9: have to sit there and say we just worded about
Speaker 9: one pocket of of UH.
Speaker 8: Because you have a deeps a deep bench. That's the pitch.
Speaker 2: Yes, you do it with all Samir, thank you so much.
Speaker 2: Really appreciate taking some of your time. Samir Sek, he's
Speaker 2: co head of M and A for North America. For
Speaker 2: city Name with us or from Bloomberg Surveillance. Coming up
Speaker 2: after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
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Speaker 1: or watch US live on YouTube.
Speaker 2: It is that time of day, folks. You wait for it,
Speaker 2: it's here newspapers Lisa Mittail at least.
Speaker 4: A half hours. All right.
Speaker 10: So we're talking about a new growing trend in the
Speaker 10: housing market. You have more luxury home buyers. They're looking
Speaker 10: for fully furnished homes. I'm not just talking, you know, furniture.
Speaker 10: They want the sheets, the mattresses, the pots, the pens,
Speaker 10: the utensils, like everything's to nuts. The question is how
Speaker 10: much extra does something like that cost if you want it?
Speaker 10: So the Wall Street Journal they talked to a seller
Speaker 10: in Fort Lauderdale, Florida, tacked on an extra one hundred
Speaker 10: and seventy five thousand dollars on top of the price
Speaker 10: at the home to get all of that, and this
Speaker 10: is luxury, so just.
Speaker 8: Gave it in mind. Wow, she even stocked it with
Speaker 8: toilet paper and paper towels for them. Did we wear
Speaker 8: that in for good measure?
Speaker 2: And when we bought our Carmel house, we did exactly
Speaker 2: that you did. We loved their style, we loved everything
Speaker 2: was perfect, like, hey, we'll just take it as is.
Speaker 2: When we sold it, we sold it at with all
Speaker 2: that stuff, so that this good stuff, I mean.
Speaker 8: That brings turn key to a whole new lab mess.
Speaker 10: Of course, and it's better because it can It's both
Speaker 10: for both sides, you know, like you can sell it
Speaker 10: faster and then the person comes in and you just
Speaker 10: walk right in.
Speaker 5: We just walked and plopped down and just take your luggage,
Speaker 5: I guess with your clothes and off you go.
Speaker 8: I guess an extra money to.
Speaker 2: No in nor did I feel like we were paying
Speaker 2: for it. You know, it was just you know, it's
Speaker 2: just kind of it's already stupid pre expense about there anyway.
Speaker 3: No, it is.
Speaker 2: It is.
Speaker 10: But they're saying, like what they're saying is that it
Speaker 10: started to increase after the pandemic because in the pandemic
Speaker 10: there were a lot of you know, people were trying
Speaker 10: to get furniture, and everything happened supply chain, so trends
Speaker 10: kind of stayed and they just like to come in
Speaker 10: with everything. They don't have to worry about waiting for
Speaker 10: a couch or waiting for a bet or anything.
Speaker 4: It's all there.
Speaker 5: And oftentimes these folks are brought in designers and whatever,
Speaker 5: and so the house is beautiful.
Speaker 8: It's like a show palace. You're like, I'll take the
Speaker 8: whole thing.
Speaker 7: I would do it.
Speaker 10: Okay. So we've talked about this before. Remember when a
Speaker 10: couple of provinces Encounada, they stopped the imports of US alcohol, right,
Speaker 10: they took it off the shelves, and response to President
Speaker 10: Trump's have so, business Insider was saying, a few of
Speaker 10: those provinces are actually planning to sell what's left in inventory,
Speaker 10: and they're going to donate it to a good cause.
Speaker 10: They're going to donate the money they make two food banks.
Speaker 8: They're going to donate the alcohol to the money.
Speaker 7: Yeah, selling it, yes, yes, yes, yes.
Speaker 10: So for example, Prince Edward Island, right, they put their
Speaker 10: alcohol back on store shelves yesterday. The government anticipates a
Speaker 10: profit about six hundred thousand Canadian dollars from the sale,
Speaker 10: So that's going to be distributed to food banks all
Speaker 10: across the island.
Speaker 2: I wonder what Canadians did they stop buying Jack Daniels
Speaker 2: and Tito's and stuff.
Speaker 4: I guess.
Speaker 10: I mean they're saying they don't intend to place any
Speaker 10: further orders for American ALcom.
Speaker 2: I mean, I have some Canadian friends.
Speaker 4: They are upset.
Speaker 8: Yes, it is deep, and it is across the board.
Speaker 2: I mean they are not happy with us.
Speaker 5: So, but they're buying the homemade stuff now, So I
Speaker 5: guess it's good for Canada.
Speaker 2: Okay, Yeah right, that's the Canadian stuffy stuff up in Canada.
Speaker 10: Ye all right, I want to take you to Okay,
Speaker 10: so we talk about AI, right, and how it's being
Speaker 10: used for different things, even to find a soulmate. Yes,
Speaker 10: AI on dating apps. It's going to cost you. I'll
Speaker 10: get to the cost in just a second. But it's
Speaker 10: business Insider. They spoke the CEO of this company called Keeper.
Speaker 10: It's an AI matchmaking startup. They say they can find
Speaker 10: you soul mate. If they can't, they'll let you know.
Speaker 4: You'll get rejected. So it uses out sorry for you exactly.
Speaker 10: They use like algorithms AI models to match people. But
Speaker 10: you have to go through this lengthy process, right, I
Speaker 10: mean there's you have to fill out a questionnaire with
Speaker 10: your age, academic test scores, like your SATs, career ambitions,
Speaker 10: your salary, net worth, all that kind of stuff.
Speaker 2: I don't think dudes care about that too much, but
Speaker 2: I'm just speaking SAT score.
Speaker 10: It's funny you mentioned dudes because they're the only ones
Speaker 10: who have to pay. Oh okay, So if you're a
Speaker 10: man and you do find a mate and you wind
Speaker 10: up getting married, you sign this marriage bounty and you
Speaker 10: have to pay fifty thousand dollars. So if wow, find
Speaker 10: out if you get a date, you have to pay
Speaker 10: five thousand dollars for the date.
Speaker 5: So it's it's for certainly pleasle I mean, I don't
Speaker 5: know about this.
Speaker 2: So it's it's just taking tender and match dot com
Speaker 2: to the next level. Yes, so it's more than just
Speaker 2: swiping left or right.
Speaker 10: Yes, okay, it's curated through algorithms.
Speaker 5: At least they're matching you with a real person. I
Speaker 5: thought you're gonna tell me, like the AI jack becomes
Speaker 5: like your soulmate, you know, which would be very scary.
Speaker 2: I think just going into a bar and you know,
Speaker 2: figuring it out, that's not still still the way to go, exactly.
Speaker 8: With cocktails at like thirty bucks a pop.
Speaker 2: Right last, exactly, Lisa Mitteo.
Speaker 8: That's your newspapers, folks.
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