WEBVTT - Bloomberg Surveillance: Markets Await Nvidia Earnings 0:00:00.080 --> 0:00:07.400 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.119 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:47.560 the Bloomberg Terminal, and the Bloomberg Business App. Global Wall Street. 0:00:47.760 --> 0:00:51.159 Steve Weisman, Bloomberger Berman, Steve Weisman. If we get an 0:00:51.280 --> 0:00:54.480 ed Yard Denny market, which is a melt up, like 0:00:54.720 --> 0:00:57.360 he's calling it the Roaring twenties, he's got us out 0:00:57.680 --> 0:01:00.200 of thirty percent out the next thirty years. If we 0:01:00.240 --> 0:01:03.680 get a bull market of our childhood, how do you 0:01:03.760 --> 0:01:07.720 adapt to that? How do you adapt to the good times? 0:01:07.840 --> 0:01:09.800 If we get the good times, what do you do? 0:01:11.760 --> 0:01:13.319 I don't think I really have to adapt. 0:01:13.440 --> 0:01:18.240 I kind of believe in good times. You know, the 0:01:18.280 --> 0:01:20.800 economy is fine, the Fed, at least at this point, 0:01:20.880 --> 0:01:23.280 seems to have engineered. I don't even know if it's 0:01:23.319 --> 0:01:27.720 a soft landing anymore. And you know, the US economy 0:01:27.760 --> 0:01:31.920 is extremely dynamic. I mean, the only negative scenario that 0:01:32.000 --> 0:01:34.720 I could construct, and it's not my base case, I 0:01:34.720 --> 0:01:37.920 would just say, the probability of it's not zero. It's 0:01:38.000 --> 0:01:41.520 just that it looks like it's possible. The US economy 0:01:41.600 --> 0:01:44.800 is reaccelerating and then maybe at some point inflation starts 0:01:44.800 --> 0:01:46.280 to go back up again and the FED has to 0:01:46.400 --> 0:01:47.200 raise rates again. 0:01:47.960 --> 0:01:50.840 That's the only negative scenario I could see at this point. 0:01:51.160 --> 0:01:54.000 So where where are you, Steve on? Kind of your 0:01:54.080 --> 0:01:56.280 FED call? Where do you What do you think the 0:01:56.280 --> 0:01:56.920 FED will do? 0:01:57.040 --> 0:01:57.920 What do you think it should do? 0:01:59.000 --> 0:02:01.880 I think the FED should do nothing nice. 0:02:02.320 --> 0:02:07.000 You know, it an engineered something pretty amazing, which kind 0:02:07.000 --> 0:02:08.800 of shocking to everybody, including me. 0:02:09.720 --> 0:02:13.360 The economy is good, you know, why would you? 0:02:13.440 --> 0:02:15.800 I mean, look, the worst case scenario for the FED 0:02:15.960 --> 0:02:20.040 would be to actually, I think cut rates, the economy 0:02:20.080 --> 0:02:23.160 gets stronger, inflation comes back, then you then you're back 0:02:23.160 --> 0:02:24.240 into the vulgar. 0:02:23.919 --> 0:02:25.480 Situation of the early eighties. 0:02:26.280 --> 0:02:28.000 The best thing to do would be just to patch 0:02:28.040 --> 0:02:30.959 yourself on the back to clear victory. And say we're 0:02:30.960 --> 0:02:33.799 completely data dependent and if things start to weaken a 0:02:33.800 --> 0:02:35.119 little bit, they can always cut rates. 0:02:35.160 --> 0:02:37.079 Otherwise, you know, do nothing. 0:02:37.320 --> 0:02:39.440 So is that is that something when you say you 0:02:39.520 --> 0:02:42.200 kind of wait, is June waiting or is even later 0:02:42.240 --> 0:02:43.400 in the year waiting for you? 0:02:46.120 --> 0:02:48.600 I don't know. I think at least till June. 0:02:48.680 --> 0:02:49.120 Okay. 0:02:49.760 --> 0:02:53.720 After that, you know, they probably do nothing anyway because 0:02:53.760 --> 0:02:55.960 they don't want to be accused of getting involved in 0:02:56.000 --> 0:02:57.320 an election, right right. 0:02:57.639 --> 0:03:00.400 Steve Aisen were celebrating Amazon into the day. I did 0:03:00.440 --> 0:03:04.040 a lot of down mathematics overnight, and it's so silly. 0:03:04.080 --> 0:03:08.440 It has a fifteen percent tech exposure, including a tech 0:03:08.520 --> 0:03:13.160 exposure including minuscule into Cisco where the street is twenty 0:03:13.200 --> 0:03:17.480 seven to twenty eight tech exposure as well. How do 0:03:17.560 --> 0:03:23.000 you approach this massive lifetime overweight in technology? Is there 0:03:23.040 --> 0:03:28.160 a derivative strategy? Is there a portfolio optimization you believe in? 0:03:30.000 --> 0:03:32.880 Well, I do think in overweighting or at least equal 0:03:32.919 --> 0:03:35.520 weighting tech is something you have to do. But I 0:03:35.560 --> 0:03:40.440 think there are some themes that are direct offshoots of 0:03:40.640 --> 0:03:44.440 tech that really should be examined by people that are 0:03:44.480 --> 0:03:47.840 not technically in tech. And so for example, because of 0:03:48.120 --> 0:03:53.119 AI and the Nvidia chips which consume so much more 0:03:53.160 --> 0:03:58.720 electricity and are hotter, the grid has to be improved. 0:04:00.080 --> 0:04:03.960 Are companies that benefit enormously for construction, companies that benefit 0:04:04.080 --> 0:04:05.160 enormously from that. 0:04:04.960 --> 0:04:08.640 That are not tech companies. The data centers have to 0:04:08.680 --> 0:04:10.400 be cooled even more so. 0:04:10.480 --> 0:04:13.720 There are companies that provide those type of services that 0:04:13.760 --> 0:04:16.120 are going to do extremely well over the next couple 0:04:16.160 --> 0:04:18.920 of years. So there are offshoots from tech that are 0:04:18.920 --> 0:04:23.560 not technically technically tech that really should be looked at 0:04:23.640 --> 0:04:24.640 very close closely. 0:04:25.279 --> 0:04:27.760 So, Steve, I guess a lot of folks, I'd love 0:04:27.760 --> 0:04:30.000 to get your market call where you're seeing opportunity here, 0:04:30.000 --> 0:04:31.720 because you know, one of the debates that we hear 0:04:31.839 --> 0:04:34.720 often is just do I stick and try to if 0:04:34.760 --> 0:04:38.200 I'm not there get to the magnificent seven somehow when 0:04:38.320 --> 0:04:40.120 I try to find some values in other parts of 0:04:40.120 --> 0:04:42.840 the market, maybe I've missed that trade. So, coming out 0:04:42.839 --> 0:04:45.040 of twenty three, when it was such a hot close 0:04:45.160 --> 0:04:47.400 to the year, what do what do you think about 0:04:47.480 --> 0:04:49.320 tech and being a leader in this market? 0:04:51.560 --> 0:04:54.320 You know, I think, look, I think we're in a 0:04:54.480 --> 0:05:00.039 bull market. In bull market, people love stores. They just 0:05:00.120 --> 0:05:03.080 latch onto stories. It's what they think about, it's what 0:05:03.120 --> 0:05:07.240 they dream about. And if you can invest in something 0:05:07.279 --> 0:05:10.400 that has a story that people can really understand and 0:05:10.560 --> 0:05:12.919 get positive about, that's something to do. So tech is 0:05:12.960 --> 0:05:17.760 one such story. Infrastructure is a similar kind of story 0:05:18.800 --> 0:05:20.719 that's going to last a long time. And there are 0:05:20.760 --> 0:05:22.320 a few others, and those are the things that I 0:05:22.320 --> 0:05:23.200 would focus on. 0:05:24.480 --> 0:05:26.400 I'm Steve, we got to go to the banks. You've 0:05:26.440 --> 0:05:28.920 done a lot of work on this, you claim of 0:05:29.000 --> 0:05:32.120 a certain movie years ago, and so it's the financial 0:05:32.160 --> 0:05:35.000 integrity of the system. Is there a flavor of bank 0:05:35.040 --> 0:05:36.520 where you think there's value. 0:05:39.800 --> 0:05:42.600 I am not worried about the financial integrity of the 0:05:42.680 --> 0:05:46.880 United States. I actually think it's incredibly healthy, probably healthier 0:05:46.880 --> 0:05:51.520 than any time in anyone's lifetime. So I'm not worried 0:05:51.560 --> 0:05:54.880 about systemic risk. There is risk in the banks in 0:05:55.000 --> 0:05:58.360 terms of commercial real estate exposure, but that's really a 0:05:58.400 --> 0:06:03.520 regional bank, not a systemic problem. I just don't find 0:06:04.240 --> 0:06:07.920 banks a particularly interesting investment theme to be involved with 0:06:07.960 --> 0:06:08.279 it all. 0:06:08.480 --> 0:06:10.919 Why why is it that's really important? I mean, just 0:06:10.960 --> 0:06:13.240 as a general theme. Is it just there's too many thanks? 0:06:13.440 --> 0:06:15.480 I mean, first of all, you know rates looks like 0:06:15.520 --> 0:06:18.680 they're going to stay high though. Therefore deposits are going 0:06:18.720 --> 0:06:22.480 to slowly bleed out of the system into money market funds, 0:06:22.760 --> 0:06:25.080 which means banks are going to have to remain tight, 0:06:25.480 --> 0:06:27.720 which means that growth is not going to be is 0:06:27.760 --> 0:06:30.680 not going to be great. The only positive thing you 0:06:30.680 --> 0:06:34.280 could say at this point is that, assuming there's no recession, 0:06:34.279 --> 0:06:37.080 credit quality will be fine. That's how they It's not 0:06:37.120 --> 0:06:40.920 a story, it's not anything anybody gonna latch onto. 0:06:41.279 --> 0:06:44.640 Do we have like another hour questions for mister Absolutely Steve. 0:06:44.720 --> 0:06:46.279 I should thank you. We've got to get you back 0:06:46.320 --> 0:06:48.640 on here. Long a discussion. We never even got to 0:06:48.720 --> 0:06:51.719 private equity, private credit and debt, and I really want 0:06:51.720 --> 0:06:53.839 to touch on that. Mister Iceman is with a small 0:06:53.839 --> 0:06:57.400 shop Newberger Berman ye an important investor. We thank Global 0:06:57.400 --> 0:07:02.159 Wall Street for your enthusiasm over get like Steve Iceman. 0:07:12.120 --> 0:07:14.640 So I love this out on Reddit. Thank you so 0:07:14.760 --> 0:07:17.720 much for this. I'm going to Hawaii in the winter, 0:07:18.400 --> 0:07:21.680 where can I surf and not die? Joining us now 0:07:22.000 --> 0:07:25.760 Hawaiian expert Cameron Dawson. Do you surf in Hawaii? Well? 0:07:25.840 --> 0:07:29.280 I certainly don't. My sister does. She's Hawaii based in 0:07:29.320 --> 0:07:33.680 a professional surfer. She's like pro, she's super pro. And 0:07:33.880 --> 0:07:36.119 the reality is that she lives there in the winter 0:07:36.200 --> 0:07:37.600 because that's when the waves are the big. 0:07:37.720 --> 0:07:40.559 Have you ever seen her in these I've never seen 0:07:40.640 --> 0:07:41.880 the ginormous wave. 0:07:42.520 --> 0:07:44.520 You see it and you close your eyes because it's 0:07:44.640 --> 0:07:48.040 darn scary. It's scary, very and very dangerous. 0:07:48.320 --> 0:07:50.320 She gets like in the tub thing where the water's 0:07:50.360 --> 0:07:52.920 on top of her and the whole the whole thing 0:07:53.040 --> 0:07:56.920 hang in again beginning like beginners one on one surfing 0:07:56.960 --> 0:07:57.280 in a wai. 0:07:58.240 --> 0:08:01.280 Yes, yes, but I also so I'm rather afraid of sharks. 0:08:01.760 --> 0:08:05.840 Yeah, I too. My surfing is to put the umbrella 0:08:05.920 --> 0:08:08.200 in the my type. Paul, why don't you bring our 0:08:08.280 --> 0:08:10.040 investment expert Camera Dawson. 0:08:10.080 --> 0:08:12.280 Cameron Dawson joins us here. We want to talk about 0:08:12.280 --> 0:08:13.320 these markets. She's at New Age. 0:08:13.320 --> 0:08:16.400 Weelth she's the CIO over there, and let's just start 0:08:16.440 --> 0:08:18.680 with I guess the equity news of the day camera, 0:08:18.720 --> 0:08:20.080 which is we're going to get a pretty big tech 0:08:20.080 --> 0:08:23.680 company reporting earnings after the close in Nvidia. So my 0:08:23.840 --> 0:08:27.080 question is is tech going to continue to be the 0:08:27.160 --> 0:08:29.480 driver of this market? Do we have to depend upon 0:08:29.840 --> 0:08:31.040 tech to be the driver of this. 0:08:31.000 --> 0:08:34.480 Market, given how big it is as a percentage waiting 0:08:34.520 --> 0:08:37.800 in the index, it has to participate in this market. 0:08:38.080 --> 0:08:40.400 A really good reminder of that is twenty twenty two, 0:08:40.520 --> 0:08:43.600 where you saw smaller sectors like energy do really well. 0:08:43.880 --> 0:08:47.000 However tech was lagging and that's why the overall market 0:08:47.040 --> 0:08:50.559 was down. So yes, this market is very much dependent on. 0:08:50.559 --> 0:08:54.080 Tech, so can I One of the things I need 0:08:54.120 --> 0:08:56.720 to see is, I guess it broadening out of the market. 0:08:56.720 --> 0:08:57.960 Participation get a little bit better. 0:08:58.000 --> 0:09:01.720 We saw that in November and d Member of last year, 0:09:01.760 --> 0:09:03.440 but I feel like it's kind of faded a little 0:09:03.440 --> 0:09:05.240 bit and a lot of technicians will take you really 0:09:05.280 --> 0:09:08.520 do need to see more participation here. How concerned are 0:09:08.559 --> 0:09:09.040 you about that? 0:09:09.440 --> 0:09:12.200 The key reason why the market has been narrow is 0:09:12.240 --> 0:09:15.720 because earnings revisions have been narrow. So if you look 0:09:15.720 --> 0:09:19.160 at the leadership in earnings revisions, the only places that 0:09:19.200 --> 0:09:22.040 have seen earning sestiments go higher at the magnificent seven 0:09:22.160 --> 0:09:24.360 in tech names, you look at the S and P 0:09:24.480 --> 0:09:27.480 five hundred, earnings revisions have been flat over the last 0:09:27.520 --> 0:09:30.640 six months. Equal weight earnings revisions are down, which means 0:09:30.720 --> 0:09:34.280 for the average stock, you're actually seeing earning sestiments get 0:09:34.320 --> 0:09:36.160 cut despite this strong economy. 0:09:36.240 --> 0:09:38.320 I'm in the camp that in any great bull market, 0:09:38.360 --> 0:09:40.520 only thirty percent of the stocks really work out, and 0:09:40.600 --> 0:09:42.280 the rest of them are things you really don't want 0:09:42.320 --> 0:09:44.439 to be in. But that gets to the point of 0:09:44.480 --> 0:09:46.840 the vogue, and everybody knows I'm death on this. Where 0:09:46.840 --> 0:09:50.840 do you stand on rebail? Am I rebailing out on 0:09:50.920 --> 0:09:52.840 Microsoft right now? I don't think so. 0:09:53.320 --> 0:09:55.120 Yeah. I mean it's one of those do you let 0:09:55.120 --> 0:09:56.000 your winners ride? 0:09:56.040 --> 0:09:58.880 Well, Danoff at Fidelity is not rebailing from what I 0:09:58.920 --> 0:09:59.280 can tell. 0:09:59.720 --> 0:10:02.480 I think that you have to respect the trend as well, 0:10:02.559 --> 0:10:04.560 because a lot of these areas that have led are 0:10:04.600 --> 0:10:08.120 still in very powerful up trends. So until you see 0:10:08.160 --> 0:10:12.160 those trends start to deteriorate, you're better off letting the 0:10:12.200 --> 0:10:14.920 winner's ride. That doesn't mean that you should add to 0:10:15.000 --> 0:10:18.760 those positions necessarily, meaning you shouldn't chase them at these 0:10:18.840 --> 0:10:23.320 valuations or at these levels of concentration or crowdedness. There's 0:10:23.400 --> 0:10:26.760 other opportunities, but I think if you're looking to rebalance, 0:10:27.160 --> 0:10:30.280 probably letting the winner's ride continues to make sense. Until 0:10:30.280 --> 0:10:31.600 we get that trend deterioration. 0:10:32.120 --> 0:10:34.600 Well, we've certainly had the focus on the FED. 0:10:34.640 --> 0:10:37.400 And we're finishing up earnings here, a big earnings print 0:10:37.440 --> 0:10:40.320 tonight with Nvidia. But it still feels like the FED 0:10:40.440 --> 0:10:41.720 is driving this market. 0:10:41.760 --> 0:10:42.000 Here. 0:10:42.320 --> 0:10:44.440 We started the year with maybe six rate cuts priced 0:10:44.440 --> 0:10:46.600 in looking at the work function. Now we're down to 0:10:46.800 --> 0:10:47.640 something less than that. 0:10:47.600 --> 0:10:48.200 Three or four. 0:10:48.640 --> 0:10:50.840 How important or what do you think the FED will do? 0:10:50.880 --> 0:10:53.240 What do you think it should do this year? Because 0:10:53.240 --> 0:10:54.760 that's still important for these markets. 0:10:55.160 --> 0:10:58.559 I think there's actually very little urgency for the FED 0:10:58.600 --> 0:11:02.880 to act. How strong economic data has been given the 0:11:02.960 --> 0:11:06.640 fact that you're seeing a reacceleration in some cyclical data. 0:11:07.040 --> 0:11:12.040 Pmis are turning higher. So with that data backdrop, for 0:11:12.120 --> 0:11:16.280 them to move to cut quickly, they would risk possibly 0:11:16.320 --> 0:11:20.400 restoking inflation, which just means status quo and keeping rates 0:11:20.400 --> 0:11:23.359 where they are is actually the lower risk option yesterday. 0:11:23.000 --> 0:11:26.360 With Synergy Tuesday, and I'm going to suggest the word 0:11:26.360 --> 0:11:29.920 out there is scale. If I identify then I want 0:11:29.920 --> 0:11:33.360 to be advantaged by scale. How do you approach that 0:11:33.440 --> 0:11:36.719 within a portfolio? How do you You're not going to 0:11:36.800 --> 0:11:39.320 guess the next M and A transaction, but on a 0:11:39.360 --> 0:11:42.679 sector basis, how do you prepare for M and A 0:11:42.800 --> 0:11:44.680 or is it just something you can't control, it's just 0:11:44.760 --> 0:11:45.160 out there. 0:11:45.600 --> 0:11:48.160 Well, I think that if you are looking for smaller 0:11:48.200 --> 0:11:50.480 companies that are getting bought out, you're starting to see 0:11:50.520 --> 0:11:52.560 a big tickup in M and A and that is 0:11:52.600 --> 0:11:56.119 supported by big cash balances. Companies still sitting. 0:11:55.840 --> 0:11:59.040 On casut Sure, yesterday's it's a hockey stick. 0:11:59.280 --> 0:12:01.240 It is a hockey stick. And it's also good to 0:12:01.280 --> 0:12:04.320 remember that that cash is also earning five percent right now. 0:12:04.640 --> 0:12:07.880 It's one of the reasons why net interest expense is 0:12:08.080 --> 0:12:11.760 down over the last year. It's running down thirty six percent. 0:12:11.840 --> 0:12:15.560 That's never happened during a rate hiking cycle. And this 0:12:15.720 --> 0:12:18.440 just shows you how topsy turvy this cycle is. High 0:12:18.440 --> 0:12:22.800 cash balances, less exposure to short term debt, and result 0:12:22.840 --> 0:12:24.840 being is that you're making more money on your cash 0:12:24.880 --> 0:12:26.080 than you're seeing your interest Costobs. 0:12:26.440 --> 0:12:28.680 We have a five percent interest rate and a hockey 0:12:28.679 --> 0:12:30.920 stick that's called a CCM five stride. 0:12:31.280 --> 0:12:33.640 Oh there you go. No, I've just heard that that's the. 0:12:34.000 --> 0:12:37.800 Rich kids had CCM. John Lloyd had a CCM five. 0:12:37.640 --> 0:12:38.240 Straight I did. 0:12:38.760 --> 0:12:41.720 So what do we do here, Cameron? For new ideas? 0:12:41.800 --> 0:12:43.400 What's what's a new idea from you? Like what have 0:12:43.440 --> 0:12:46.040 you been telling your clients here? Maybe he's starting out 0:12:46.080 --> 0:12:48.360 twenty four, what's something new, because otherwise I'm just going 0:12:48.440 --> 0:12:50.280 to stick my money and my two year treasury at 0:12:50.280 --> 0:12:51.200 four point six percent. 0:12:51.480 --> 0:12:55.120 We are finding names within healthcare, names within biotech. That's 0:12:55.320 --> 0:12:57.760 areas where you're starting to see some signs of life. 0:12:57.800 --> 0:13:01.520 Biotech has been in a bear market for two years of. 0:13:01.480 --> 0:13:02.480 Really I didn't know that. 0:13:03.240 --> 0:13:06.720 It's been absolutely ugly. So actually across the capital stock, 0:13:06.760 --> 0:13:09.840 whether we're looking at equities or even within private markets, 0:13:10.080 --> 0:13:13.520 we're seeing a lot of opportunity within healthcare and biotech, 0:13:13.760 --> 0:13:16.520 just areas that have been left behind and valuations aren't 0:13:16.520 --> 0:13:19.319 too stretched, and notably, positioning isn't crowded. 0:13:19.440 --> 0:13:21.520 Do you buy week dollar international? I mean in the 0:13:21.520 --> 0:13:24.319 old days, you know, is religion? If five percent of 0:13:24.360 --> 0:13:27.880 your portfolio international, that worked out, But you know, like, 0:13:28.160 --> 0:13:30.920 do you just stick with us exceptionalism in large cap 0:13:31.000 --> 0:13:32.479 or is there a new edge theory? 0:13:33.000 --> 0:13:37.120 We have been underweight international, we're now neutral. You're right, 0:13:37.160 --> 0:13:40.840 the dollar is absolutely imperative. The only time that you 0:13:40.920 --> 0:13:45.760 have seen major international bowl market is in periods of 0:13:45.880 --> 0:13:49.560 major dollar bear markets, the two thousands, the mid eighties. 0:13:50.000 --> 0:13:52.400 If you don't have a major dollar bear, you will 0:13:52.440 --> 0:13:54.080 not have an international bowl. 0:13:54.040 --> 0:13:58.480 Paul Malaysian ring it. Yes, you know we saw that. 0:13:58.840 --> 0:14:01.480 A reporter in Dubai ca me up and she said, 0:14:01.520 --> 0:14:05.280 a stupid Malaysian riggit new weakness. That's what we're talking about, right, 0:14:05.400 --> 0:14:09.600 very good. I'm just doing that to impress Cam's surfing 0:14:09.640 --> 0:14:10.720 in Malaysia after all. 0:14:10.800 --> 0:14:15.319 Exactly, so, we're pretty much done earnings here, about eighty 0:14:15.320 --> 0:14:16.960 percent of the way through. We got some retail names 0:14:16.960 --> 0:14:19.680 still to report. Anything you took away from this earning 0:14:19.720 --> 0:14:22.040 cycle that made it more or less bullshit, maybe just 0:14:22.080 --> 0:14:23.040 change your outlook here. 0:14:23.360 --> 0:14:25.880 I think the one key message is that pricing power 0:14:25.960 --> 0:14:28.840 is really starting to fade, mostly on the good side 0:14:28.840 --> 0:14:31.400 of things. You're starting to see where you were running 0:14:31.440 --> 0:14:34.360 at high single digit pricing increases, that's now down to 0:14:34.600 --> 0:14:38.080 low single digits, which just means that the estimates for 0:14:38.280 --> 0:14:41.440 revenue growth of an acceleration in twenty four and twenty 0:14:41.480 --> 0:14:44.560 five that are currently baked in may be a little 0:14:44.600 --> 0:14:49.120 bit difficult. Then the question is does pricing ceilings hit 0:14:49.280 --> 0:14:54.120 services like it's hit goods services? Inflation is still very high. 0:14:54.280 --> 0:14:58.120 Look with Tony from Marriott talking about still strong pricing 0:14:58.160 --> 0:15:00.480 growth is that able to be stained? 0:15:01.360 --> 0:15:03.320 So, I mean, I think what we heard from Tony, 0:15:03.400 --> 0:15:06.760 I mean, they're still seeing some pretty strong demand. We're 0:15:06.760 --> 0:15:09.200 hearing it from the cruise companies as well. So it 0:15:09.280 --> 0:15:11.640 seems like the consumer's in good shape. Is that something 0:15:11.680 --> 0:15:14.040 you're banking on for twenty twenty four because if the 0:15:14.040 --> 0:15:16.840 consumer were to pull back, obviously that would be something 0:15:16.880 --> 0:15:18.960 that we haven't seen just in the recent past. 0:15:19.440 --> 0:15:21.840 Consumers will continue to be able to spend as long 0:15:21.840 --> 0:15:24.600 as they have jobs. Real wage growth has turned positive, 0:15:24.680 --> 0:15:28.240 which is supporting consumer spending. But they are starting to 0:15:28.440 --> 0:15:32.080 push back on some of these price price increases. Walmart 0:15:32.120 --> 0:15:35.320 called it choicefulness. They're being very select. 0:15:35.120 --> 0:15:37.040 Driving me this is like the new word. 0:15:37.160 --> 0:15:39.680 Come on, But prices are crazy. I was looking at 0:15:39.720 --> 0:15:43.000 Pearl Gym tickets and they're forty eight thousand dollars. At 0:15:43.000 --> 0:15:45.880 a certain point, when do people hit a ceiling and 0:15:46.280 --> 0:15:49.040 being able to be able to afford these kind of experiences. 0:15:49.160 --> 0:15:51.760 Yeah, we got to meld in our two great interviews here, Paul. 0:15:51.840 --> 0:15:54.960 I mean, I got the Marriotte co Olina Beach Club 0:15:55.040 --> 0:15:59.560 in Waho. It's like seven hundred bucks a night after fieves. Yeah, 0:16:00.000 --> 0:16:01.760 I mean it's like sid I mean, this is the 0:16:01.840 --> 0:16:04.880 new luxury YEP where Tony was staying in the pearl jam. 0:16:04.960 --> 0:16:06.320 Then you've really got to dig in your pocket. 0:16:06.680 --> 0:16:09.160 Well, the concert tickets I've given up and half that. 0:16:09.960 --> 0:16:12.080 I mean you're you're better at that. Yeah, I mean 0:16:12.120 --> 0:16:16.080 I don't. To me, it's like a consortium or something. 0:16:16.360 --> 0:16:19.040 It's basically monopoly effect. 0:16:19.480 --> 0:16:21.920 What are you not doing here, Cameron, quickly here out 0:16:21.920 --> 0:16:23.680 of time. But what's the number one thing you want 0:16:23.720 --> 0:16:24.840 to avoid doing? 0:16:25.400 --> 0:16:29.120 I think chasing very liquidity sensitive, low balance sheet or 0:16:29.200 --> 0:16:32.000 low quality balance sheet names. They've run a lot over 0:16:32.040 --> 0:16:34.880 the last couple of months in pricing in the expectation 0:16:35.000 --> 0:16:37.800 for an easier FED. If the FED doesn't deliver, interest 0:16:37.880 --> 0:16:40.080 rates goes up, those are going to reverse. 0:16:40.120 --> 0:16:42.960 We need a photo of you surfing. It'll stay just 0:16:43.080 --> 0:16:46.360 we won't put it social. It won't go out on Instagram. 0:16:46.520 --> 0:16:49.440 Promise it won't go out. I promise. 0:16:49.600 --> 0:16:51.280 I have an old one from when I was a kid. 0:16:51.320 --> 0:16:54.480 All all, we need a new one camera Dawson surfing 0:16:54.520 --> 0:16:58.200 from why Good Morning America, Cameron Dawson, thank you so 0:16:58.280 --> 0:17:00.240 much with new Edge on our way to Hawaii. We're 0:17:00.240 --> 0:17:07.040 great to get her in here quickly. Today, I thought 0:17:07.040 --> 0:17:09.960 of market Patel. I think it was yesterday, Paul, during 0:17:10.040 --> 0:17:13.360 Synergy Tuesday. I mean Walmart's out home depots out what's 0:17:13.359 --> 0:17:17.040 a two by fore cost out and outa uh? And 0:17:17.119 --> 0:17:21.800 all that mattered was middle single digit, higher single digit 0:17:22.480 --> 0:17:26.960 dividend increase. Use of cash market, Patelan is a high 0:17:27.000 --> 0:17:31.240 ground down nests with Allspring Global Investments long ago and 0:17:31.359 --> 0:17:35.480 far away with mister Karay at Pioneer Market, Pateel, what 0:17:35.520 --> 0:17:37.920 did you learn from phil Karay? He was a giant. 0:17:38.200 --> 0:17:39.959 I used to go up the elevator with him at 0:17:40.000 --> 0:17:45.040 sixty State Street. What did you learn from Philip Karay? Well? 0:17:45.080 --> 0:17:48.520 I think that a creative open mind. I'm interested in 0:17:48.720 --> 0:17:51.879 all kinds of different things. Really was the nature of 0:17:51.920 --> 0:17:55.160 his brilliance, A flexible way of thinking. And we don't 0:17:55.160 --> 0:17:57.960 see a lot of that today. Investments in other parts 0:17:57.960 --> 0:18:00.360 of the area amazing. 0:18:00.600 --> 0:18:03.560 It's become cookie cutter versus the entrepreneurial days of John 0:18:03.600 --> 0:18:07.680 Templeton and mister Kerrey Margie used to cash right now. 0:18:07.720 --> 0:18:10.520 We saw it from own depot, we saw it from Walmart. 0:18:10.600 --> 0:18:12.600 What are we missing here? What will use of cash 0:18:12.640 --> 0:18:15.520 forward look like? Well? 0:18:15.560 --> 0:18:17.280 I think more of the same, And I think really 0:18:17.320 --> 0:18:20.800 what the market's focusing on is prospects of growth, and 0:18:20.800 --> 0:18:23.360 once you get away from the handful of very high 0:18:23.400 --> 0:18:26.720 growth companies, you know, such as Nvidia, there aren't motor 0:18:26.760 --> 0:18:29.880 sectors that have outstanding growth, and I think that's why 0:18:29.920 --> 0:18:32.680 the market's focusing on with that's going to do, what 0:18:32.760 --> 0:18:34.680 the economic growth is going to be, and why it's 0:18:34.760 --> 0:18:38.560 reacted so sharply when companies have reported, you know, say 0:18:38.640 --> 0:18:42.080 mild of trimming and their expeditations really wanged. 0:18:42.520 --> 0:18:44.639 Hey, Marky, what are you taking out of this earning season? 0:18:44.640 --> 0:18:46.240 We've had about eighty percent of the S and P 0:18:46.320 --> 0:18:49.200 five hundred companies report already. Any themes coming out of 0:18:49.280 --> 0:18:52.919 you that maybe affect your outlook, I think the main. 0:18:52.800 --> 0:18:56.360 Thing is you can see a good expected results better 0:18:56.400 --> 0:18:59.240 than expected, as we've had for the last few quarters. 0:18:59.400 --> 0:19:02.080 But I think we're seeing is a sort of erosion 0:19:02.359 --> 0:19:06.879 in the earnings, expectations and achievements, which to me telegraphs 0:19:07.320 --> 0:19:09.040 the twenty four is going to be a year of 0:19:09.080 --> 0:19:11.919 lower growth and after things are really spiked up with 0:19:12.040 --> 0:19:16.040 so much spend pictures from COVID, from the infrastructure bill 0:19:16.080 --> 0:19:19.440 and so forth, now we're going to see growth moderated, 0:19:19.440 --> 0:19:21.160 and I think that's what the market's focused on. 0:19:21.520 --> 0:19:25.399 And does that suggests kind of a moderating picture for 0:19:25.840 --> 0:19:28.119 US equities here because we've there's a sense that the 0:19:28.200 --> 0:19:31.080 FED will cut that maybe a little bit later than 0:19:31.119 --> 0:19:34.560 we thought. So how does that affect your twenty four 0:19:34.680 --> 0:19:36.720 view for the markets overall? 0:19:36.880 --> 0:19:39.119 Well, I think as far as the Fed, there's uncertainty 0:19:39.119 --> 0:19:42.400 because whereas people are thinking that cut in March, then 0:19:42.440 --> 0:19:45.040 the feeling wast be delayed. And now some people are saying, oh, 0:19:45.080 --> 0:19:47.800 well inflation is a little bit stubborn, they may raise 0:19:47.920 --> 0:19:50.879 race instead. But it all comes back to if the 0:19:50.920 --> 0:19:54.440 FED raises rates, economy will slow or the economy slow, 0:19:54.480 --> 0:19:56.600 and then that's why the fence cutting. And that also 0:19:56.680 --> 0:19:59.320 is a little bit of pressure on equity. So I 0:19:59.359 --> 0:20:01.439 think the first half the years chopping around and. 0:20:01.520 --> 0:20:04.480 Not really doing anywhere all right, given that backdrop, but 0:20:04.520 --> 0:20:07.680 one of the sectors that maybe investors should be paying 0:20:07.680 --> 0:20:09.879 attention to. Should we be focusing on the sectors that 0:20:09.920 --> 0:20:12.760 pay good dividends? Thomas just highlighting some dividend growth stories 0:20:12.760 --> 0:20:15.240 that we've seen recently. How do you think about sectors? 0:20:16.480 --> 0:20:17.840