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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: You make your luck on foreign exchange. You have win

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Speaker 2: thin with us today. You studied with Robert Mandel at

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Speaker 2: Columbia University years ago.

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Speaker 1: Is wonderful. You do even better if on an historic.

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Speaker 2: Day like this, Abby Joseph Cohen decides to join US

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Speaker 2: iconic at Goldman Sachs now teaching at win Thin's Columbia

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Speaker 2: Business School as well. Abby, when you slid out of Cornell,

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Speaker 2: this is just a few years ago, folks, the Dow

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Speaker 2: was just under one thousand. The Dow is forty nine

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Speaker 2: thousand and thirty seven right now. You were a pinata

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Speaker 2: in two thousand and eight. I'm going to give you

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Speaker 2: the worst She made the worst call at the worst

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Speaker 2: time in two thousand and eight, and the S and

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Speaker 2: B five hundred is up eight point six percent. If

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Speaker 2: you made the worst call in two thousand and eight,

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Speaker 2: that's better than nominal GDP. If you make the worst

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Speaker 2: call on the pandemic, Paul Sweeney, you're up one hundred

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Speaker 2: and five percent of twelve percent plus per year. I mean,

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Speaker 2: just the basic you know, basic, basic, tough. Is there

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Speaker 2: an alternative to the stock market? I don't see it.

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Speaker 3: Well, let's back up a little bit, uh, Tom, and

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Speaker 3: good morning to you Paul as well. What we have,

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Speaker 3: of course, is an American economy that was never gone.

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Speaker 3: The American economy has been dominant truly since the end

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Speaker 3: of the Second World War. We have been very fortunate.

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Speaker 3: We have been blessed, if you will, by decades of

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Speaker 3: investment and education and science and other forms of research,

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Speaker 3: and so we have a stock market that is reflecting that.

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Speaker 3: When I take a look at recent stock market performance,

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Speaker 3: I see that investors are focused on basically corporate profits

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Speaker 3: at this point, and companies have not been disappointing. Here's

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Speaker 3: the question I think for investors, and that is, with

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Speaker 3: valuations at current levels, is there any room to hide

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Speaker 3: if there are disappointments? And that to me is an

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Speaker 3: issue not just for traders, but also for long term investors.

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Speaker 4: So abby, how do you think the valuation? What's the

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Speaker 4: valuation discussion we should be having about this market, because

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Speaker 4: a lot of folks are citing high valuations, but it

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Speaker 4: seems like the earnings are out there to support them.

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Speaker 4: How do you think about it?

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Speaker 3: The earnings clearly appear to be out there, which is great.

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Speaker 3: I'm very pleased about that. I don't see a recession

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Speaker 3: coming in the US this year. Also great news and

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Speaker 3: what we need to recognize, of course, and so many

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Speaker 3: people who have been on Blueberg in recent weeks have

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Speaker 3: talked about this is the ongoing rotation that we're seeing

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Speaker 3: in the US stock market that is reflecting this challenging

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Speaker 3: valuation environment in some sectors. And I think that's a

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Speaker 3: healthy discussion to have. We do see that some sectors

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Speaker 3: that have been laggards have been moving ahead, and we

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Speaker 3: also see that some markets outside the United States have

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Speaker 3: also been performing better. One of the big question marks

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Speaker 3: out there, of course, is the dollar. Right now, we

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Speaker 3: have investors who are basically saying they're focusing on corporate profits,

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Speaker 3: they're focusing on cash flow. The intermediate and long term picture, however,

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Speaker 3: to me, looks somewhat cloudier, particularly with this valuation overhang

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Speaker 3: in some sectors.

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Speaker 2: I mean Paul Sweeney, Abby Joseph Cohen's iconic financial journalist

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Speaker 2: Journal's paper was on Aristotle. If she's studied with Aristotle

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Speaker 2: in her interi program at Colvin SEC years ago, I look, Abby,

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Speaker 2: and I want you to talk to people about the

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Speaker 2: historical moment we're in. I'm not going to borrow you. You

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Speaker 2: know where we are gold fifty three hundred, We've got dollar.

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Speaker 2: I got a president, tell me I want week dollar policy.

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Speaker 1: Let's be kind.

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Speaker 2: It's a neo Murcintils policy. Do you perceive the presidency

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Speaker 2: of Donald Trump is one off for financial markets or

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Speaker 2: is there a new reality here we have to adapt to.

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Speaker 3: Well, I'd like to correct you if I may. I

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Speaker 3: didn't study with Aristotle. It was Sophocles.

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Speaker 1: Okay, it's good, don't drink the beverage.

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Speaker 3: But there you have it. I'll stay away from that

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Speaker 3: as well. We have a situation right now where I

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Speaker 3: think that investors and especially traders are really focused on

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Speaker 3: the very short term what's the profit picture? Is the

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Speaker 3: FED going to adjust short term interest rates and so on?

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Speaker 3: And we have, nevertheless a broader policy mix which is

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Speaker 3: not necessarily all that favorable on a long term basis. So,

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Speaker 3: for example, the trade policies which have been implemented, all

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Speaker 3: of the things being equal, notice I use the Keterist

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Speaker 3: parabus in there, but all of the things being equal,

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Speaker 3: the trade policy we have pushes inflation higher, not lower.

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Speaker 3: The fiscal policy we have right now will stimulate economic

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Speaker 3: growth in twenty twenty six through the depreciation allowances, through

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Speaker 3: the extra checks that middle income families will be receiving.

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Speaker 3: But all of the things being equal, that too pushes

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Speaker 3: up inflation, as does the weaker dollar. And so when

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Speaker 3: we have the President saying, as he did, he's okay

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Speaker 3: with a weaker dollar, which is a rather unusual thing

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Speaker 3: for the President of the United States to be saying,

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Speaker 3: that basically tells us something about the intermediate to longer

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Speaker 3: term view. Because keep in mind, the Fed, whatever decides

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Speaker 3: to do today, the Fed controls only the Fed funds rate,

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Speaker 3: only the very short term rate. Only the rate that

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Speaker 3: banks borrow at the rate of borrowing for everyone else

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Speaker 3: in the economy is done further out along the yield curve,

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Speaker 3: and that could be problematic because all of these other

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Speaker 3: pressures suggest that those interest rates have moved higher. Now,

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Speaker 3: what's also fascinating to me is that the administration is

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Speaker 3: talking about a number of steps that others would viewed

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Speaker 3: as economic or market interference, for example, telling banks what

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Speaker 3: credit card rates they should be.

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Speaker 1: Trying to go third rail? Are you teaching them?

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Speaker 3: And also the discussion in terms of controls on the

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Speaker 3: mortgage markets. This is something that we've not seen in

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Speaker 3: a very long time.

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Speaker 2: Joseph con As we continue with that, Joseph on Columbia Business.

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Speaker 2: Can you see her with a piece of chalk in

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Speaker 2: her hand talking about dropping credit card rates from twenty

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Speaker 2: nine count to ten percent?

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Speaker 1: See what they call students? Pusrati would be Joseph Cohen Abby.

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Speaker 4: What will you be listening for?

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Speaker 2: Today?

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Speaker 4: From FRED chairman j Pals will be his last appearance here.

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Speaker 4: What will you be listening for?

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Speaker 3: Because Nike everyone else, I'll be looking at the statement

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Speaker 3: which is issued and also obviously in the press conference.

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Speaker 3: I don't expect him to directly address the issues having

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Speaker 3: to do with the allegations that have been made.

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Speaker 2: Look abby at the state of the market. We began

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Speaker 2: with a historical perspective in this moment, this morning of

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Speaker 2: seven thousand, right now seven thousand, excuse me, six nine

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Speaker 2: hundred ninety five on SPX, there's an entire industry which

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Speaker 2: is basically saying to Americans, we know you're afraid I

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Speaker 2: have to be in the equity markets. Let us give

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Speaker 2: you some form of hedged return where we give away

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Speaker 2: a larger capital gain. Is that a sound investment approach,

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Speaker 2: which or does Joseph Cohen just say by the next

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Speaker 2: marginal share of Nvidia.

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Speaker 3: I when I advise individual investors, endowments, others, I'm always

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Speaker 3: taking the intermediate to longer term view. I'm not looking

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Speaker 3: at short term decision making. And so from that standpoint,

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Speaker 3: tom As, you know, I have been an enthusiast for

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Speaker 3: the US economy. I think that the United States economy

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Speaker 3: will continue to grow. There will always be hiccups. I

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Speaker 3: am concerned about some of the policy decisions that have

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Speaker 3: been taken right now. I am concerned about the dollar,

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Speaker 3: but I also know when we apply our CFA tools

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Speaker 3: in terms of relative valuations and so on, there are

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Speaker 3: some opportunities now the United States. Last year I spoke

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Speaker 3: about the Japanese market, the South Korean market, and to

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Speaker 3: that this year I would add the Indian market. India

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Speaker 3: has had a hard time getting its stock market moving

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Speaker 3: on any sustainable basis, but the companies underlying the major

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Speaker 3: indices in India you're performing quite well.

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Speaker 1: Right now.

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Speaker 2: We got to leave it there, Abby, Joseph con thank

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Speaker 2: you so much, and I was rude. I said, you know,

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Speaker 2: she slipped out of Cornell High above cut Yugos waters.

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Speaker 1: With a DOWT one thousand. But I was wrong. It

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Speaker 1: was it was like twenty thousand, five hundred when she

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Speaker 1: came out of.

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Speaker 3: Cornell a few years ago, because it was icy and

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Speaker 3: coal just like it is Indian work.

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Speaker 1: It is the walk up the slopes enough to kill you.

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Speaker 2: Abby Joseph Cohen Forever from Ithaca, Gulben Sachs and Columbia

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Speaker 2: Business School