1 00:00:00,000 --> 00:00:03,280 Speaker 1: To. Our guest is Anastasia Murosso. She is the chief 2 00:00:03,279 --> 00:00:06,160 Speaker 1: investment strategist at I Capital, joining us here at the 3 00:00:06,160 --> 00:00:09,119 Speaker 1: Bloomberg Interactive Broker Studio in New York. Pleasure to have 4 00:00:09,160 --> 00:00:11,960 Speaker 1: you on the program. So much of the focus today 5 00:00:12,119 --> 00:00:16,040 Speaker 1: has been on this kind of relatively soft reading when 6 00:00:16,040 --> 00:00:18,480 Speaker 1: it comes to c p I and then immediately this 7 00:00:18,600 --> 00:00:20,840 Speaker 1: knee jerk response in the part of market, Ay, the 8 00:00:20,880 --> 00:00:23,240 Speaker 1: fat's not going to be as aggressive? Do you buy this? 9 00:00:23,520 --> 00:00:28,760 Speaker 1: Should we be concerned maybe um about being too optimistic? 10 00:00:29,640 --> 00:00:32,120 Speaker 1: I buy this. I bought this today, I bought this 11 00:00:32,560 --> 00:00:34,839 Speaker 1: last two you know, just a few weeks ago, when 12 00:00:34,840 --> 00:00:37,680 Speaker 1: if I was talking about slowing down the pace of increases. 13 00:00:37,840 --> 00:00:40,320 Speaker 1: And the reason is we should take good news as 14 00:00:40,320 --> 00:00:43,400 Speaker 1: good news. Here this is the first softer than expected 15 00:00:43,440 --> 00:00:46,199 Speaker 1: CPI reading that we've seen in months, and if you 16 00:00:46,240 --> 00:00:49,120 Speaker 1: look at the details of it, it's partially because of 17 00:00:49,240 --> 00:00:51,960 Speaker 1: energy prices, but you also saw some softening on a 18 00:00:52,000 --> 00:00:54,680 Speaker 1: month o a month basis in the core CPI, which 19 00:00:54,720 --> 00:00:58,120 Speaker 1: is really important. It's the new car prices that are 20 00:00:58,120 --> 00:01:01,040 Speaker 1: coming off. It's you know, shell to inflation that's not 21 00:01:01,160 --> 00:01:04,160 Speaker 1: quite as bad as expected. It's apparel that's coming down 22 00:01:04,200 --> 00:01:07,160 Speaker 1: so slowly, but surely we're starting to see somewhere trenchman 23 00:01:07,200 --> 00:01:09,080 Speaker 1: in a month or a month basis, And I know 24 00:01:09,160 --> 00:01:11,080 Speaker 1: the Bears would point to the fact that, well, you know, 25 00:01:11,160 --> 00:01:13,360 Speaker 1: the core in a year rear basis did not slow 26 00:01:13,400 --> 00:01:16,000 Speaker 1: down is expected, But you've got to start somewhere, and 27 00:01:16,000 --> 00:01:17,800 Speaker 1: you've got to start without month of a month that 28 00:01:17,920 --> 00:01:21,000 Speaker 1: second derivative, and that's what we got today. And I 29 00:01:21,040 --> 00:01:24,560 Speaker 1: think that's just to start doug because if you look 30 00:01:24,600 --> 00:01:28,080 Speaker 1: at some of the alternative indicators for rental markets, for example, 31 00:01:28,640 --> 00:01:31,039 Speaker 1: if you look at wheat prices and soybeans, all of 32 00:01:31,040 --> 00:01:33,600 Speaker 1: those are starting to come off. So I suspect this 33 00:01:33,680 --> 00:01:37,880 Speaker 1: is the beginning of a series of hopefully slower inflation readings, 34 00:01:37,880 --> 00:01:39,639 Speaker 1: and I think there's more to come in the months ahead. 35 00:01:40,360 --> 00:01:42,760 Speaker 1: So how does this also the balance of probabilities for 36 00:01:42,840 --> 00:01:46,200 Speaker 1: what the faith does next? In September fifty, what are 37 00:01:46,240 --> 00:01:48,960 Speaker 1: we looking at? You? I would be looking at fifty 38 00:01:49,000 --> 00:01:51,200 Speaker 1: basis points. I know the markets were pointing, you know, 39 00:01:51,280 --> 00:01:54,280 Speaker 1: to seventy five. They had for drenched since then, but 40 00:01:54,640 --> 00:01:57,920 Speaker 1: I think Fetcher Powell has given us a pretty direct 41 00:01:58,000 --> 00:02:01,040 Speaker 1: reaction function of how they're likely to act. First of all, 42 00:02:01,160 --> 00:02:03,600 Speaker 1: now they're neutral, they want to take things a little 43 00:02:03,600 --> 00:02:06,640 Speaker 1: bit slower now that they put a lot of tightening 44 00:02:06,640 --> 00:02:09,240 Speaker 1: into the system. They don't want to collapse the economy 45 00:02:09,280 --> 00:02:12,040 Speaker 1: and overwhelming with because a lot of this tightening pressure 46 00:02:12,080 --> 00:02:14,680 Speaker 1: is still in the pipeline. But he also said, if 47 00:02:14,720 --> 00:02:16,600 Speaker 1: they we're going to react to the data. So if 48 00:02:16,639 --> 00:02:20,080 Speaker 1: the data continues to surprise to the upside, it's what 49 00:02:20,240 --> 00:02:24,240 Speaker 1: we got today is a downside surprise and inflation. So 50 00:02:24,720 --> 00:02:27,920 Speaker 1: I think fifty is on the table. But look, there's 51 00:02:28,160 --> 00:02:31,600 Speaker 1: a lot of time between now and the September FOMC meeting. 52 00:02:31,720 --> 00:02:34,080 Speaker 1: No doubts, and we still have a very very tight 53 00:02:34,160 --> 00:02:36,920 Speaker 1: labor market and wage pressures that are pushing up. And 54 00:02:36,960 --> 00:02:38,880 Speaker 1: it's not just a part of the employment report. That 55 00:02:38,960 --> 00:02:42,360 Speaker 1: product productivity report of yesterday's showed a real push up 56 00:02:42,360 --> 00:02:45,360 Speaker 1: in wages. Give me your take on where you think 57 00:02:45,360 --> 00:02:47,119 Speaker 1: the dollar is going to be trading now. I mean, 58 00:02:47,160 --> 00:02:48,800 Speaker 1: we we were down in a big way today. If 59 00:02:48,800 --> 00:02:50,760 Speaker 1: you look at the Bloomberg dollar spot, we lost about 60 00:02:50,760 --> 00:02:53,880 Speaker 1: one percent. Is the path of the dollar to the downside. 61 00:02:54,800 --> 00:02:57,040 Speaker 1: I mean, I wouldn't think too much that it's too 62 00:02:57,120 --> 00:02:59,440 Speaker 1: much to the downside, because the reality is they're still 63 00:02:59,520 --> 00:03:02,840 Speaker 1: a pretty why interest rate differential that exists between the 64 00:03:02,880 --> 00:03:05,000 Speaker 1: Federal Reserve and let's say, uh, the e c B, 65 00:03:05,120 --> 00:03:07,920 Speaker 1: and that's not going to be resolved anytime soon. So 66 00:03:08,280 --> 00:03:12,760 Speaker 1: I wouldn't really expect for much dollar depreciation here. But Doug, 67 00:03:12,800 --> 00:03:15,000 Speaker 1: you mentioned something about the labor markets, and I think 68 00:03:15,040 --> 00:03:18,440 Speaker 1: that's important too for the Fed. The fact that the 69 00:03:18,560 --> 00:03:23,720 Speaker 1: job openings numbers starting to decline pretty meaningfully. I think 70 00:03:23,760 --> 00:03:25,960 Speaker 1: this is what the FED wants to see, and this 71 00:03:26,040 --> 00:03:28,520 Speaker 1: is also the so called path to a soft landing 72 00:03:28,600 --> 00:03:32,560 Speaker 1: that they see. If the job openings decline but people 73 00:03:32,639 --> 00:03:36,240 Speaker 1: don't actually get laid off, that's good news. And Anastasia, 74 00:03:36,240 --> 00:03:40,320 Speaker 1: we've been discussing the broader macro environment following that CPI 75 00:03:40,440 --> 00:03:42,440 Speaker 1: prints out of the U S a lot of encouragement 76 00:03:42,440 --> 00:03:45,400 Speaker 1: there for markets. You think mymentums to the upside now, 77 00:03:45,480 --> 00:03:49,480 Speaker 1: So what's flashing a by signal for you at the moment? Well, well, 78 00:03:49,480 --> 00:03:51,960 Speaker 1: I think it's a combination of some of the technicals 79 00:03:52,000 --> 00:03:55,560 Speaker 1: that are clearly moving to the upside right now, and 80 00:03:55,640 --> 00:03:58,160 Speaker 1: it's you know, the momentum is behind them. And I'll 81 00:03:58,160 --> 00:03:59,520 Speaker 1: talk about that in just a minute and then of 82 00:03:59,520 --> 00:04:02,119 Speaker 1: course it's the fundamental kind of turn around the inflation 83 00:04:02,200 --> 00:04:05,760 Speaker 1: story potentially. But starting with the technicals, I think what's 84 00:04:05,840 --> 00:04:09,600 Speaker 1: happened over the last six months, everybody they wanted to sell, 85 00:04:09,880 --> 00:04:13,520 Speaker 1: everybody that needed to sell, they've likely reduced their positions, 86 00:04:13,600 --> 00:04:16,839 Speaker 1: and so we're not seeing this tremendous selling flow that 87 00:04:16,880 --> 00:04:19,479 Speaker 1: we kind of counteract the markets otherwise. But on the 88 00:04:19,480 --> 00:04:21,320 Speaker 1: flip side, what you have is you have a lot 89 00:04:21,360 --> 00:04:24,839 Speaker 1: more investors that are willing to step into these markets. Corporates, 90 00:04:24,839 --> 00:04:27,919 Speaker 1: for example, they're stepping in. They're boosting their share buybacks 91 00:04:27,960 --> 00:04:32,200 Speaker 1: and their past their earning season, so they're driving this rally. 92 00:04:32,279 --> 00:04:34,360 Speaker 1: And then on top of that, as corporates drive the 93 00:04:34,440 --> 00:04:36,800 Speaker 1: rally and you get above some of the key moving 94 00:04:36,839 --> 00:04:40,280 Speaker 1: average levels of a hundred day moving average, fifty day 95 00:04:40,320 --> 00:04:43,600 Speaker 1: moving average, that gets more and more of the commodity 96 00:04:43,640 --> 00:04:46,480 Speaker 1: trading advisor community and the c t A s are 97 00:04:46,560 --> 00:04:50,160 Speaker 1: and and so you know, upside begets upside. And I 98 00:04:50,160 --> 00:04:52,760 Speaker 1: would say, if this is an object, this market, that's 99 00:04:52,800 --> 00:04:55,839 Speaker 1: an object that has momentum to the upside until and 100 00:04:56,000 --> 00:04:59,680 Speaker 1: unless something stops it. I do think that this the 101 00:04:59,720 --> 00:05:03,320 Speaker 1: moment tem can actually continue here now until something stops it. 102 00:05:03,480 --> 00:05:05,719 Speaker 1: This may be the FED at Jackson Hole in a 103 00:05:05,760 --> 00:05:07,560 Speaker 1: couple of weeks, or you know, it could be a 104 00:05:07,600 --> 00:05:10,960 Speaker 1: September CPI report. But near Chrum, I could see us 105 00:05:11,000 --> 00:05:14,480 Speaker 1: probably test even SMP. I want to talk a little 106 00:05:14,480 --> 00:05:17,240 Speaker 1: bit about policy because here in the States we had 107 00:05:17,240 --> 00:05:19,720 Speaker 1: the Senate in the last couple of days passing this 108 00:05:19,800 --> 00:05:23,480 Speaker 1: bill on climate healthcare and taxes. One of the aims 109 00:05:23,480 --> 00:05:26,560 Speaker 1: here is to reduce greenhouse gas emissions. The other thing 110 00:05:26,720 --> 00:05:29,440 Speaker 1: is that's a part of the mindset when it comes 111 00:05:29,440 --> 00:05:34,800 Speaker 1: to changing climate, is carbon sequestration. There's new technology out there, 112 00:05:34,839 --> 00:05:36,880 Speaker 1: and I think that there are people who are investing 113 00:05:36,920 --> 00:05:39,960 Speaker 1: in this space. It's not really a public market at 114 00:05:40,040 --> 00:05:42,440 Speaker 1: this point, I wouldn't think. And maybe you can bring 115 00:05:42,480 --> 00:05:46,000 Speaker 1: some clarity to this. Do you see a lot of opportunity. 116 00:05:46,279 --> 00:05:50,239 Speaker 1: I see a ton of opportunity across the decarbonization space. 117 00:05:50,279 --> 00:05:52,480 Speaker 1: And I want to really stress that this is a really, 118 00:05:52,520 --> 00:05:56,359 Speaker 1: really big deal, this this climate bill for for the 119 00:05:56,400 --> 00:05:59,839 Speaker 1: decarbonization community. I mean, frankly, we've been waiting for this 120 00:06:00,040 --> 00:06:03,240 Speaker 1: for a year or even more. But the fact, for example, 121 00:06:03,279 --> 00:06:07,039 Speaker 1: that some of the investment credits were extended, uh and 122 00:06:07,040 --> 00:06:10,200 Speaker 1: and really you know, allow maybe ten years or more 123 00:06:10,320 --> 00:06:13,200 Speaker 1: to capitalize on those. That gives a lot of clean 124 00:06:13,320 --> 00:06:15,520 Speaker 1: energy companies a lot more certainty that they have in 125 00:06:15,560 --> 00:06:19,719 Speaker 1: the past. So, you know, while it was already economically 126 00:06:19,800 --> 00:06:24,560 Speaker 1: feasible to build out solar panels and wind turbines, it 127 00:06:24,680 --> 00:06:27,120 Speaker 1: is now becoming even more so given the support. So 128 00:06:27,160 --> 00:06:29,760 Speaker 1: I think that's a huge catalyst for the space. And 129 00:06:29,800 --> 00:06:31,760 Speaker 1: now I do agree with you, Doug, that it's not 130 00:06:31,839 --> 00:06:35,520 Speaker 1: just about the solar panels and you know, the clean 131 00:06:35,600 --> 00:06:38,720 Speaker 1: energy battery storage, but it's also about how do we 132 00:06:38,839 --> 00:06:42,599 Speaker 1: take the oil and gas industry that's clearly not going away, 133 00:06:42,600 --> 00:06:44,800 Speaker 1: but how can we make it a little bit more 134 00:06:44,880 --> 00:06:48,200 Speaker 1: carbon efficient? And that's where sequestration does come into play, 135 00:06:48,520 --> 00:06:50,720 Speaker 1: So how do you capitalize them that a lot of 136 00:06:50,720 --> 00:06:53,080 Speaker 1: oil and gas energy companies are trying to figure this 137 00:06:53,080 --> 00:06:57,800 Speaker 1: out themselves, they're investing in sequestration projects themselves. But you're 138 00:06:57,839 --> 00:07:01,760 Speaker 1: absolutely right, there's a lot of money in the venture capital, 139 00:07:01,920 --> 00:07:06,000 Speaker 1: growth equity, private equity community that is funding companies that 140 00:07:06,080 --> 00:07:08,880 Speaker 1: are developing some of these new technologies. So a lot 141 00:07:08,960 --> 00:07:11,720 Speaker 1: to do across the space. Anastasia just quickly want to 142 00:07:11,760 --> 00:07:14,040 Speaker 1: get your views on tech as well. We had. Of course, 143 00:07:14,040 --> 00:07:16,920 Speaker 1: the chips bill signed yesterday, and even though a lot 144 00:07:17,000 --> 00:07:19,360 Speaker 1: of chip makers are struggling at the moment, it's a 145 00:07:19,360 --> 00:07:22,200 Speaker 1: cyclical industry, got a good long term future ahead of it. 146 00:07:22,240 --> 00:07:26,240 Speaker 1: Do you buy some quality names at this point thirty seconds? Maybe? 147 00:07:26,320 --> 00:07:29,480 Speaker 1: Maybe not yet. I think there's more price re setting 148 00:07:29,520 --> 00:07:32,200 Speaker 1: to be done in semiconductors. I mean, cloud spend has 149 00:07:32,240 --> 00:07:34,520 Speaker 1: been high, but it's coming down. So I think that's 150 00:07:34,600 --> 00:07:38,280 Speaker 1: one further leg down that the chips may have to absorb. Um. 151 00:07:38,320 --> 00:07:41,640 Speaker 1: There will come a time, Paul, but perhaps that's further 152 00:07:41,720 --> 00:07:44,680 Speaker 1: out in Q three. Alright, well, we will wait and 153 00:07:44,720 --> 00:07:47,480 Speaker 1: see what happens. Anastasia, Mr O, So, thank you so 154 00:07:47,560 --> 00:07:50,920 Speaker 1: much for joining us on Bloomberg Day. Bracasia Anastasia is 155 00:07:50,960 --> 00:07:53,800 Speaker 1: chief investment strategist at I Capital.