1 00:00:00,080 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,880 Speaker 1: Business app. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,040 Speaker 1: or watch us live on YouTube. 6 00:00:27,840 --> 00:00:31,720 Speaker 2: Wonderful segment of the program nationwide into the original San 7 00:00:31,760 --> 00:00:36,440 Speaker 2: Francisco of Charles Schwab, Lizzy, Ane Saunders, and Kevin Gordon join. 8 00:00:36,320 --> 00:00:36,880 Speaker 3: Us this morning. 9 00:00:37,080 --> 00:00:41,040 Speaker 2: David Rosenberg published up in Toronto and emphasized the word hope. 10 00:00:41,320 --> 00:00:44,400 Speaker 2: You lead in your note with the word hope. Lizzie 11 00:00:44,600 --> 00:00:47,560 Speaker 2: Sanders gauge the hope em out there right now. 12 00:00:47,800 --> 00:00:50,680 Speaker 4: Well, yesterday there was a lot of it. I think 13 00:00:50,720 --> 00:00:55,240 Speaker 4: it's impossible, given the instability of how we get information 14 00:00:55,320 --> 00:00:59,080 Speaker 4: and narrative changes and headlines, to look at a day 15 00:00:59,160 --> 00:01:02,080 Speaker 4: like yesterday thing akin to what we saw last April ninth. 16 00:01:02,640 --> 00:01:05,520 Speaker 4: I think there's still a lot of unanswered questions, even 17 00:01:05,600 --> 00:01:10,000 Speaker 4: just you know, you're reporting on Trump's comment about the 18 00:01:10,360 --> 00:01:13,720 Speaker 4: ceasefire being contingent upon the straight orform moves opening. Yet 19 00:01:13,959 --> 00:01:17,040 Speaker 4: yesterday it was you know, we might end this thing 20 00:01:17,120 --> 00:01:18,399 Speaker 4: even if the strait doesn't open. 21 00:01:18,480 --> 00:01:19,800 Speaker 5: So here we go again. 22 00:01:20,120 --> 00:01:23,160 Speaker 6: Exactly, Kevin, given those crosswinds out there, when you're talking 23 00:01:23,160 --> 00:01:26,520 Speaker 6: to your clients, what's the message is it to look 24 00:01:26,560 --> 00:01:29,600 Speaker 6: past all this craziness and focus on the fundamentals. What's 25 00:01:29,600 --> 00:01:30,120 Speaker 6: a conversation? 26 00:01:30,120 --> 00:01:32,360 Speaker 7: I mean, especially with any conflict like this, you never 27 00:01:32,400 --> 00:01:34,600 Speaker 7: want to make a knee jerk reaction. I mean, we've 28 00:01:34,600 --> 00:01:37,399 Speaker 7: adjusted how we think about markets and the economy responding 29 00:01:37,440 --> 00:01:38,959 Speaker 7: to this as it's continued. 30 00:01:38,560 --> 00:01:39,080 Speaker 3: To drag on. 31 00:01:39,280 --> 00:01:41,720 Speaker 7: Clearly we've taken you know, we've dialed back expectations for 32 00:01:41,800 --> 00:01:44,319 Speaker 7: what growth is supposed to look like. But I often think, 33 00:01:44,319 --> 00:01:46,840 Speaker 7: you know, in terms of an investor's reaction, I can't 34 00:01:46,840 --> 00:01:49,040 Speaker 7: help but think about the Jack Bocal quote, don't just 35 00:01:49,080 --> 00:01:52,080 Speaker 7: do something? Stand there, and I think in this moment, 36 00:01:52,200 --> 00:01:54,960 Speaker 7: you know, it kind of feels act because you don't 37 00:01:54,960 --> 00:01:57,240 Speaker 7: want to make you can't have a high conviction view 38 00:01:57,240 --> 00:01:59,360 Speaker 7: on any particular asset class. I think right now you 39 00:01:59,360 --> 00:02:03,440 Speaker 7: can have some maybe on something like commodities that's somewhat obvious, 40 00:02:03,640 --> 00:02:05,840 Speaker 7: but I think for the equity market, you know, to 41 00:02:05,920 --> 00:02:08,200 Speaker 7: Lazand's point about how we get information these days, I 42 00:02:08,240 --> 00:02:12,000 Speaker 7: mean that gap between Washington and markets is narrowing every 43 00:02:12,040 --> 00:02:14,919 Speaker 7: single day in terms of policy makings impact on day 44 00:02:14,919 --> 00:02:16,639 Speaker 7: to day equity moves. So I think that needs to 45 00:02:16,720 --> 00:02:17,639 Speaker 7: be taken into consideration. 46 00:02:17,680 --> 00:02:18,360 Speaker 3: I mean, let me do this. 47 00:02:18,400 --> 00:02:20,840 Speaker 2: Paul Kevin Gordon out with an incredible chart. You know, 48 00:02:20,919 --> 00:02:23,959 Speaker 2: les Anne Saunders hasn't seen it, so let's cover it 49 00:02:24,080 --> 00:02:24,320 Speaker 2: right now. 50 00:02:24,400 --> 00:02:26,440 Speaker 8: Well, you know, Lysanne Sanders didn't create it. 51 00:02:27,000 --> 00:02:27,240 Speaker 3: Hark. 52 00:02:27,400 --> 00:02:31,080 Speaker 2: You see the standard four or five hundreds forward twelve months, 53 00:02:31,160 --> 00:02:35,320 Speaker 2: pe was a lofty twenty three point one and has 54 00:02:35,400 --> 00:02:37,799 Speaker 2: come in. I'm gonna go stan Fisher on you here 55 00:02:38,000 --> 00:02:41,680 Speaker 2: is coming. I'm popping fifteen or twenty percent from twenty 56 00:02:41,680 --> 00:02:45,399 Speaker 2: three point one into nineteen point six as well. Does 57 00:02:45,400 --> 00:02:48,760 Speaker 2: that scream opportunity with you? For you a sub twenty 58 00:02:49,440 --> 00:02:50,440 Speaker 2: s and P multiple? 59 00:02:51,680 --> 00:02:55,240 Speaker 4: This has been pure multiple contraction in this corrective phase 60 00:02:56,120 --> 00:03:00,240 Speaker 4: because earnings estimates have continued to go higher. I think 61 00:03:00,280 --> 00:03:02,920 Speaker 4: the answer to that will be better defined once we 62 00:03:03,000 --> 00:03:07,240 Speaker 4: actually start earning season. We know why energy sector estimates 63 00:03:07,240 --> 00:03:09,639 Speaker 4: have gone up. Tech sector estimates have gone up, but 64 00:03:09,680 --> 00:03:12,160 Speaker 4: with a concentration and just a couple of names, the 65 00:03:12,320 --> 00:03:16,280 Speaker 4: analysts really haven't done must adjusting to estimates for a 66 00:03:16,320 --> 00:03:19,640 Speaker 4: calendar year, maybe because they're waiting you know, for as 67 00:03:19,680 --> 00:03:22,359 Speaker 4: much time as possible to get up to the eve 68 00:03:22,360 --> 00:03:25,760 Speaker 4: of reporting season and or wait till they get commentary 69 00:03:25,800 --> 00:03:26,680 Speaker 4: from companies. 70 00:03:27,639 --> 00:03:31,040 Speaker 6: Kevin, we had a rotation I think, kind of late 71 00:03:31,160 --> 00:03:34,160 Speaker 6: last year, coming into prior to the war, maybe coming 72 00:03:34,160 --> 00:03:35,880 Speaker 6: out of some of the high growth, high multiple stuff 73 00:03:35,880 --> 00:03:38,080 Speaker 6: that have been the drivers's market, and maybe in some 74 00:03:38,080 --> 00:03:41,160 Speaker 6: more cyclical stuff small and midcaps. Was that just a 75 00:03:41,240 --> 00:03:43,640 Speaker 6: short term trading thing or is that something longer to 76 00:03:43,680 --> 00:03:44,080 Speaker 6: you guys. 77 00:03:44,040 --> 00:03:46,640 Speaker 7: Yeah, you know what's been interesting is that even on 78 00:03:46,680 --> 00:03:49,320 Speaker 7: a day like yesterday, when you had tech having its 79 00:03:49,400 --> 00:03:51,480 Speaker 7: best day, the tech sector having its best day since 80 00:03:51,480 --> 00:03:54,760 Speaker 7: twenty twenty five, that was to me, in response to 81 00:03:54,800 --> 00:03:57,040 Speaker 7: what had become the momentum trade in favor of energy, 82 00:03:57,440 --> 00:04:00,560 Speaker 7: you know, not in favor of tech. What interesting, though, 83 00:04:00,640 --> 00:04:03,280 Speaker 7: is even with that significant bounce, you didn't really see 84 00:04:03,320 --> 00:04:06,880 Speaker 7: any material pickup in flows, particularly in the retail cohort 85 00:04:07,200 --> 00:04:10,200 Speaker 7: into that sector. I think that that response mechanism, or 86 00:04:10,280 --> 00:04:13,600 Speaker 7: lack thereof, is pretty important because even in advance of 87 00:04:13,640 --> 00:04:15,480 Speaker 7: the war, there was a lot of de risking in 88 00:04:15,520 --> 00:04:18,159 Speaker 7: that particular sector for that cohort, where they were starting 89 00:04:18,200 --> 00:04:20,520 Speaker 7: to put money to work in outside of that and 90 00:04:20,920 --> 00:04:23,080 Speaker 7: having a little bit higher conviction in areas of you know, 91 00:04:23,080 --> 00:04:25,000 Speaker 7: whether it was industrials, whether it was you know, parts 92 00:04:25,040 --> 00:04:28,120 Speaker 7: of consumer of discretionary and staples, or whether it was 93 00:04:28,160 --> 00:04:31,120 Speaker 7: even financials. So I think that that dynamic, the fact 94 00:04:31,120 --> 00:04:33,560 Speaker 7: that hasn't really shifted, it does tell me that there's 95 00:04:33,640 --> 00:04:37,000 Speaker 7: still probably more to that broadening out trade, if you 96 00:04:37,000 --> 00:04:38,840 Speaker 7: want to think about it that way. But I just 97 00:04:38,880 --> 00:04:41,560 Speaker 7: think it's been a little bit more delayed, not necessarily derailed. 98 00:04:41,839 --> 00:04:43,760 Speaker 7: But we're sort of in the camp that it can happen. 99 00:04:43,960 --> 00:04:46,080 Speaker 7: It's just, of course now, at the mercy of these 100 00:04:46,120 --> 00:04:48,720 Speaker 7: headlines every day, it's probably not going to happen as 101 00:04:48,720 --> 00:04:49,600 Speaker 7: fast as we had thought. 102 00:04:49,720 --> 00:04:52,799 Speaker 2: Lizianne Saunders, Kevin Gordon with this with Charles Schwab together, 103 00:04:52,880 --> 00:04:55,599 Speaker 2: we just loved doing this huge response last time. Thank 104 00:04:55,640 --> 00:05:00,280 Speaker 2: you for listening across Liziane Saunder's nation. I want to 105 00:05:00,320 --> 00:05:03,480 Speaker 2: talk process here. Did you guys, like, on something as 106 00:05:03,520 --> 00:05:06,520 Speaker 2: basic as the adjustment of fear of missing ouse? 107 00:05:07,160 --> 00:05:08,719 Speaker 3: Is he allowed to disagree with you? 108 00:05:09,080 --> 00:05:11,000 Speaker 5: I mean he's allowed one? 109 00:05:11,640 --> 00:05:13,560 Speaker 3: Are you doing, Steve Roach? One on one where you 110 00:05:13,560 --> 00:05:15,200 Speaker 3: fight like cats and dogs? 111 00:05:15,600 --> 00:05:19,320 Speaker 4: You know, seven years ago when I hired this guy, 112 00:05:20,480 --> 00:05:23,640 Speaker 4: I think he not that I ever put fear in anybody, 113 00:05:23,720 --> 00:05:24,040 Speaker 4: but I. 114 00:05:24,000 --> 00:05:26,760 Speaker 8: Think you were. It was your a natural thing for you. Yep. 115 00:05:26,839 --> 00:05:31,360 Speaker 4: I agree. Now he can say whatever he wants, but 116 00:05:31,400 --> 00:05:34,440 Speaker 4: we're pretty consistently aligned. 117 00:05:34,600 --> 00:05:35,080 Speaker 3: Where are you on. 118 00:05:35,160 --> 00:05:38,360 Speaker 2: Fear missing out right now? Gauging it after the shock 119 00:05:38,560 --> 00:05:39,320 Speaker 2: of this war. 120 00:05:39,400 --> 00:05:44,240 Speaker 4: You know, I think that the retail trader did slightly 121 00:05:44,279 --> 00:05:47,200 Speaker 4: shift their tack throughout the course of this war. They 122 00:05:47,240 --> 00:05:50,640 Speaker 4: became a little bit less enthusiastic at the individual stock 123 00:05:50,760 --> 00:05:53,440 Speaker 4: lever level with the sort of the buy the dip 124 00:05:53,520 --> 00:05:57,000 Speaker 4: and you know, chasing performance on the upside. So I 125 00:05:57,000 --> 00:06:01,720 Speaker 4: think there's been a little bit of a little less 126 00:06:01,760 --> 00:06:05,120 Speaker 4: complacency being expressed in some of the moves by the 127 00:06:05,240 --> 00:06:08,800 Speaker 4: retail trader. I really, though, think what's going on here is, 128 00:06:08,880 --> 00:06:12,080 Speaker 4: given the inability to gauge what the next headline is 129 00:06:12,120 --> 00:06:14,120 Speaker 4: going to be, what the next narrative shift is going 130 00:06:14,160 --> 00:06:16,360 Speaker 4: to be, what we can glean and. 131 00:06:16,360 --> 00:06:17,800 Speaker 5: Understand is positioning. 132 00:06:18,960 --> 00:06:21,400 Speaker 4: Where I think there's so much short term money in 133 00:06:21,440 --> 00:06:24,400 Speaker 4: the market, whether it is the retail trader. 134 00:06:24,279 --> 00:06:26,760 Speaker 5: Or systematic hedge funds or the CTA. 135 00:06:26,480 --> 00:06:30,560 Speaker 4: World, and there's a lot of focus on what are 136 00:06:30,600 --> 00:06:34,400 Speaker 4: the crowded trades, what are the desolate trades, and either 137 00:06:34,440 --> 00:06:38,800 Speaker 4: playing a momentum there or looking for the potential inflection 138 00:06:38,920 --> 00:06:41,440 Speaker 4: point where you see a shift. So if you can 139 00:06:41,720 --> 00:06:47,360 Speaker 4: understand the positioning, even though you can't anticipate the headlines, 140 00:06:48,320 --> 00:06:49,800 Speaker 4: it helps you staying gear. 141 00:06:50,720 --> 00:06:53,200 Speaker 6: I mean, I guess what I've learned over the last 142 00:06:53,240 --> 00:06:55,360 Speaker 6: I don't know, ten fifteen years a little bit more 143 00:06:55,400 --> 00:06:59,359 Speaker 6: is that your retail investors are They're pretty good. I 144 00:06:59,400 --> 00:07:04,120 Speaker 6: mean they buy the dips, they're pretty I mean I 145 00:07:04,160 --> 00:07:07,359 Speaker 6: haven't seen any, I haven't felt any. I don't know 146 00:07:07,480 --> 00:07:08,200 Speaker 6: panic selling. 147 00:07:08,960 --> 00:07:12,600 Speaker 4: Retail used to be called the dumb money exactly allocating 148 00:07:12,640 --> 00:07:13,480 Speaker 4: IPOs like. 149 00:07:14,000 --> 00:07:16,520 Speaker 8: I always used to say investors. 150 00:07:16,600 --> 00:07:18,560 Speaker 7: Yes, it's kind of lesand and I are sort of 151 00:07:18,600 --> 00:07:21,680 Speaker 7: on this campaign to get rid of that moniker, you know, 152 00:07:21,680 --> 00:07:24,200 Speaker 7: the dumb money, because it really isn't and it hasn't been. 153 00:07:24,240 --> 00:07:26,360 Speaker 7: And I think to your point Paul, about you know 154 00:07:26,800 --> 00:07:29,840 Speaker 7: this cohort of investors, particularly post pandemic, and you talked 155 00:07:29,840 --> 00:07:31,960 Speaker 7: about the past ten to fifteen years. Yes, the retail 156 00:07:32,000 --> 00:07:34,720 Speaker 7: share has gone up. It's sort of the only class 157 00:07:34,720 --> 00:07:36,440 Speaker 7: of investors that has gone up by as much as 158 00:07:36,440 --> 00:07:39,280 Speaker 7: it has almost doubling in percentage, you know, terms of 159 00:07:39,360 --> 00:07:41,560 Speaker 7: in terms of the volume of the market. But if 160 00:07:41,600 --> 00:07:45,440 Speaker 7: you look particularly the past six years, five to six years, yeah, 161 00:07:45,440 --> 00:07:47,400 Speaker 7: there hasn't really been number one what I would think 162 00:07:47,440 --> 00:07:50,240 Speaker 7: of as a real bear market, certainly not when associated 163 00:07:50,280 --> 00:07:52,200 Speaker 7: with a recession. And I think that is sort of 164 00:07:52,200 --> 00:07:55,360 Speaker 7: conditioned investors in particularly this new cohort who you know, 165 00:07:55,440 --> 00:07:57,840 Speaker 7: especially for those who are younger in the you know, 166 00:07:57,920 --> 00:08:00,520 Speaker 7: whether it's Gen Z or young millennial. I think it 167 00:08:00,560 --> 00:08:02,560 Speaker 7: has kind of conditioned them to think that this will 168 00:08:02,600 --> 00:08:05,239 Speaker 7: sort of always work as a strategy, but also having 169 00:08:05,240 --> 00:08:07,680 Speaker 7: a longer time prise and that's not always associated with 170 00:08:07,680 --> 00:08:08,640 Speaker 7: having a high risk tolerance. 171 00:08:08,640 --> 00:08:10,160 Speaker 6: So do you guys have your events and you guys 172 00:08:10,200 --> 00:08:12,760 Speaker 6: go all over the way country? What's the I mean, 173 00:08:12,880 --> 00:08:14,560 Speaker 6: is there people like me walking in the door or 174 00:08:14,600 --> 00:08:17,280 Speaker 6: they're younger people walking because it seems like Mike depends 175 00:08:17,280 --> 00:08:19,200 Speaker 6: on on their phone gauged. 176 00:08:19,280 --> 00:08:21,880 Speaker 5: Yeah, depends on where we are, but I know are 177 00:08:21,880 --> 00:08:22,600 Speaker 5: in Brooklyn. 178 00:08:23,800 --> 00:08:26,320 Speaker 4: You know what we find Incline events a lot the 179 00:08:26,360 --> 00:08:30,680 Speaker 4: bigger ones are are multi generations. Yes, so it'll be 180 00:08:31,040 --> 00:08:35,400 Speaker 4: you know, a retired couple that in some cases they're 181 00:08:35,440 --> 00:08:37,839 Speaker 4: there with a child, and maybe even a grandchild. 182 00:08:38,880 --> 00:08:40,000 Speaker 2: So interesting. 183 00:08:40,080 --> 00:08:42,280 Speaker 8: It's the whole it's the whole age mix. 184 00:08:42,720 --> 00:08:44,920 Speaker 4: When you have twelve trillion dollars in assets, you have 185 00:08:44,960 --> 00:08:46,440 Speaker 4: a little bit of everything age wise. 186 00:08:46,720 --> 00:08:49,480 Speaker 2: Losing signers, Kevin Gordon or this week continue your futures 187 00:08:49,520 --> 00:08:52,560 Speaker 2: up twenty seven. The VIC slides from the angst thirty 188 00:08:52,600 --> 00:08:55,520 Speaker 2: one level where Kevin said, go to cash for sure, 189 00:08:55,840 --> 00:08:59,640 Speaker 2: they're twenty five nine. Here we are fifty minutes away 190 00:08:59,640 --> 00:09:03,200 Speaker 2: from US scheduled President Trump at the Supreme Court. I 191 00:09:03,240 --> 00:09:05,480 Speaker 2: just saw it on Fox triak out. He had a 192 00:09:05,559 --> 00:09:08,880 Speaker 2: substantial number of people below the steps of the Supreme 193 00:09:08,920 --> 00:09:11,440 Speaker 2: Court in Washington. We'll give you video of that on 194 00:09:11,520 --> 00:09:14,880 Speaker 2: YouTube as we can here. Don't see that quite right now. 195 00:09:15,320 --> 00:09:17,360 Speaker 2: So I've got another quote here. This is some Kevin 196 00:09:17,400 --> 00:09:22,720 Speaker 2: Gordon's research. I believe factor focus, high interests, coverage, strong 197 00:09:22,800 --> 00:09:27,560 Speaker 2: balance sheet, positive earnings, revision trends, and stable improving profit 198 00:09:27,640 --> 00:09:29,720 Speaker 2: margins Kevin ze mag seven. 199 00:09:30,520 --> 00:09:33,320 Speaker 7: Not all of them, but I think that over the 200 00:09:33,360 --> 00:09:35,640 Speaker 7: long term that has proven to be number one. That's 201 00:09:35,640 --> 00:09:38,199 Speaker 7: been where the stability has been in consistency of returns. 202 00:09:38,240 --> 00:09:40,600 Speaker 7: Post pandemic, we really have been in a more sort 203 00:09:40,600 --> 00:09:43,480 Speaker 7: of factor dominated world because it's just harder to make 204 00:09:43,520 --> 00:09:47,240 Speaker 7: these monolithic sector calls. It's getting harder. It's not impossible, 205 00:09:47,240 --> 00:09:49,120 Speaker 7: but it's getting harder because of the concentration in a 206 00:09:49,160 --> 00:09:51,640 Speaker 7: lot of these areas. I mean, communication services is such 207 00:09:51,640 --> 00:09:54,080 Speaker 7: a standout for that because it's essentially two names that 208 00:09:54,120 --> 00:09:57,800 Speaker 7: are sometimes close to eighty percent of that sector. But no, 209 00:09:57,880 --> 00:10:01,040 Speaker 7: we still believe in that up in quality sort of story, 210 00:10:01,679 --> 00:10:04,880 Speaker 7: and I would say actually that that's moved the I 211 00:10:04,880 --> 00:10:06,840 Speaker 7: think what's been one of the more beneficial elements of 212 00:10:06,840 --> 00:10:08,840 Speaker 7: this market year to date is that's moved down the 213 00:10:08,840 --> 00:10:11,840 Speaker 7: cap spectrum a little bit, so the percentage of unprofitable companies. 214 00:10:12,160 --> 00:10:14,120 Speaker 7: Even in an index like the Russell two thousand that 215 00:10:14,160 --> 00:10:17,400 Speaker 7: has rolled over a year to date, it's still relatively high. 216 00:10:17,440 --> 00:10:19,760 Speaker 7: But I think that there's been a benefit now spread 217 00:10:19,760 --> 00:10:23,600 Speaker 7: throughout the market, not necessarily just in your classic SMP five. 218 00:10:23,520 --> 00:10:26,600 Speaker 6: Hundred, Lizanne, you and I started in the business kind 219 00:10:26,600 --> 00:10:28,360 Speaker 6: of around the same time. One of the things that's 220 00:10:28,520 --> 00:10:32,760 Speaker 6: really changed, I think is the whole alternative investment opportunities 221 00:10:32,800 --> 00:10:35,880 Speaker 6: for everybody, including retail investors. Yes, how do you guys 222 00:10:35,960 --> 00:10:40,280 Speaker 6: at Schwab position alternative investments, whether it's ed's phones, private equity, 223 00:10:40,320 --> 00:10:42,360 Speaker 6: private credit, real estate, all that kind of stuff, and 224 00:10:42,360 --> 00:10:43,160 Speaker 6: you guys position that. 225 00:10:44,240 --> 00:10:45,560 Speaker 8: And you know we are. 226 00:10:45,640 --> 00:10:50,080 Speaker 4: We have been big democratizers over the past fifty plus years, 227 00:10:50,080 --> 00:10:53,160 Speaker 4: and I think we're part of that process now in 228 00:10:53,280 --> 00:10:58,359 Speaker 4: helping to bring alternative asset classes into the asset allocation discussion. 229 00:10:58,720 --> 00:11:01,160 Speaker 4: The most important thing is that you around it and 230 00:11:01,240 --> 00:11:04,920 Speaker 4: also fit making sure the clients who are bringing, whether 231 00:11:04,920 --> 00:11:07,800 Speaker 4: it's private credit or private equity or hedge funds, that 232 00:11:07,800 --> 00:11:10,960 Speaker 4: they understand how it fits and what is hopefully a 233 00:11:11,000 --> 00:11:14,960 Speaker 4: well planned strategic acid allocation portfolio. Where are the correlations, 234 00:11:15,840 --> 00:11:18,760 Speaker 4: What is the willingness to give up some of that transparency, 235 00:11:18,800 --> 00:11:22,959 Speaker 4: to give up some of that liquidity. Don't just think 236 00:11:23,000 --> 00:11:24,920 Speaker 4: of it as the shiny new object. I need to 237 00:11:24,920 --> 00:11:28,199 Speaker 4: get some of this. It's the education that sits behind it. 238 00:11:28,240 --> 00:11:30,679 Speaker 4: And most of the investors that we talk to who 239 00:11:30,760 --> 00:11:33,000 Speaker 4: want to add that into the mix are those that 240 00:11:33,040 --> 00:11:35,520 Speaker 4: take what we call an advised approach where they're working 241 00:11:35,559 --> 00:11:38,479 Speaker 4: with one of our advisors, one of our financial consultants 242 00:11:39,080 --> 00:11:42,240 Speaker 4: in developing a long term actual plan. 243 00:11:43,000 --> 00:11:45,200 Speaker 2: I have to ask this to close out, Lazaann, you 244 00:11:45,240 --> 00:11:47,440 Speaker 2: did a real public service for the nation. I brought 245 00:11:47,440 --> 00:11:50,560 Speaker 2: this up before on our fiscal policy. You must be 246 00:11:50,600 --> 00:11:52,320 Speaker 2: getting questions on our debt and. 247 00:11:52,200 --> 00:11:55,680 Speaker 8: Deficit every single solsarial day. 248 00:11:56,120 --> 00:11:59,079 Speaker 2: Is it any different from the time of Pete Peterson, 249 00:11:59,200 --> 00:12:04,080 Speaker 2: Paul Sungas and the Senator from Georgia? Is the same old, 250 00:12:04,120 --> 00:12:04,560 Speaker 2: same old. 251 00:12:04,760 --> 00:12:07,240 Speaker 4: The questions are a little bit more. They have a 252 00:12:07,280 --> 00:12:11,800 Speaker 4: little bit more of a calamitous tone to them. Oftentimes, 253 00:12:11,840 --> 00:12:14,240 Speaker 4: when we get questions, it's not just what do you 254 00:12:14,280 --> 00:12:16,400 Speaker 4: think of the you know, high rising burden of debt 255 00:12:16,480 --> 00:12:17,959 Speaker 4: or you know, how long are we going to run 256 00:12:17,960 --> 00:12:21,280 Speaker 4: deficits this big? It's what is the tipping point? And 257 00:12:21,320 --> 00:12:23,679 Speaker 4: then it's often got to follow on like is the 258 00:12:23,720 --> 00:12:26,160 Speaker 4: dollar going to lose its reserve currency status? Is the 259 00:12:26,280 --> 00:12:29,760 Speaker 4: US going to default? Is China going to literally figuratively 260 00:12:29,840 --> 00:12:31,640 Speaker 4: wake up one day and just decide to dump all 261 00:12:31,679 --> 00:12:34,440 Speaker 4: of its treasury? So there's a little bit more of that. Boy, 262 00:12:34,520 --> 00:12:36,640 Speaker 4: I feel like we're at a tipping point tone to 263 00:12:36,679 --> 00:12:37,800 Speaker 4: the questions. 264 00:12:37,640 --> 00:12:41,360 Speaker 2: Can we move on from the NCAA tournament? Please please 265 00:12:41,800 --> 00:12:46,400 Speaker 2: Kevin explain Pepperdine playing u c l A back to 266 00:12:46,480 --> 00:12:49,520 Speaker 2: back in Stanford and volleyball, it's like. 267 00:12:50,679 --> 00:12:53,600 Speaker 7: Players, Yeah, my favorite school to follow. 268 00:12:53,800 --> 00:12:55,160 Speaker 3: Is anyone under six five? 269 00:12:55,559 --> 00:12:58,760 Speaker 7: No, there were only me, but I wasn't on the team. 270 00:13:01,280 --> 00:13:01,960 Speaker 3: Is it like a. 271 00:13:01,880 --> 00:13:04,920 Speaker 2: Conduit from poona Ho in Hawaii? You just go to 272 00:13:05,360 --> 00:13:07,800 Speaker 2: and say we want six Thomas kids, let's. 273 00:13:08,280 --> 00:13:11,200 Speaker 7: Not Thomas tallest. But no, it's an amazing They're they're 274 00:13:11,240 --> 00:13:13,440 Speaker 7: they're killing it. I I love following that sport. It 275 00:13:13,480 --> 00:13:15,240 Speaker 7: was beach volleyball was my favorite to follow. 276 00:13:19,840 --> 00:13:20,720 Speaker 8: The beaches. 277 00:13:20,920 --> 00:13:21,520 Speaker 3: The beach. 278 00:13:23,120 --> 00:13:24,600 Speaker 8: We had an area called the beach. 279 00:13:24,760 --> 00:13:28,200 Speaker 4: It was like a quad and it didn't even have 280 00:13:28,280 --> 00:13:30,240 Speaker 4: grass though, so yeah, I kind of looked like. 281 00:13:30,480 --> 00:13:31,280 Speaker 7: It was a little different. 282 00:13:31,280 --> 00:13:31,480 Speaker 3: Though. 283 00:13:31,559 --> 00:13:33,559 Speaker 7: Yeah, I think the water in Malibu is a little. 284 00:13:33,360 --> 00:13:36,120 Speaker 2: Bit better, you know this, better than we've done way 285 00:13:36,120 --> 00:13:37,920 Speaker 2: too much West Coast today we had Harvey. 286 00:13:38,440 --> 00:13:41,760 Speaker 7: I know, Clara, there's never too much West Coast and 287 00:13:41,960 --> 00:13:48,880 Speaker 7: Clara Broncos Baby, there we go. Pepperdine has just consistently 288 00:13:48,920 --> 00:13:52,000 Speaker 7: across over the years, that's been one of, if not 289 00:13:52,000 --> 00:13:54,920 Speaker 7: our best sports, I mean in our tournament rankings and 290 00:13:54,960 --> 00:13:55,560 Speaker 7: that it's amazing. 291 00:13:55,600 --> 00:13:57,720 Speaker 6: So that was really Malibu. 292 00:13:57,960 --> 00:13:59,559 Speaker 7: Yes, California. 293 00:14:00,280 --> 00:14:01,480 Speaker 8: You've got to look up a picture. 294 00:14:01,520 --> 00:14:01,760 Speaker 9: I know. 295 00:14:02,800 --> 00:14:04,800 Speaker 2: Let me let me translate this for you. And this 296 00:14:04,840 --> 00:14:09,240 Speaker 2: involves Jenny Kremail April second. Pepperdine's playing U C l 297 00:14:09,280 --> 00:14:11,800 Speaker 2: A and volleyball April second. 298 00:14:11,960 --> 00:14:15,079 Speaker 3: In Western New York. You get up and you've got a. 299 00:14:15,040 --> 00:14:19,000 Speaker 2: Biochemistry class at eight am, and you have to walk 300 00:14:19,040 --> 00:14:23,040 Speaker 2: what's called the quarter mile west into the wind coming 301 00:14:23,120 --> 00:14:24,560 Speaker 2: in from Buffalo. 302 00:14:24,680 --> 00:14:27,080 Speaker 7: Not to mention in Malibu, though, you've got to wake 303 00:14:27,160 --> 00:14:35,160 Speaker 7: up and climb one hundred stairs because we call it Stepperdine's. 304 00:14:33,400 --> 00:14:35,440 Speaker 8: Violins playing just for you over here. 305 00:14:35,600 --> 00:14:38,440 Speaker 3: I'll bring out my mind your volleyball updates. We do 306 00:14:38,480 --> 00:14:40,600 Speaker 3: it all here, We do it all. Kevin Gordon, thank 307 00:14:40,640 --> 00:14:43,000 Speaker 3: you so much for bringing listen. Thank you sounders with you. 308 00:14:43,000 --> 00:14:47,440 Speaker 3: You're both wearing black. Kathy Jones retiring, extraordinary. 309 00:14:46,600 --> 00:14:49,760 Speaker 8: Career, amazing. We will We will miss her a lot. 310 00:14:49,840 --> 00:14:55,280 Speaker 2: As she did a taco tweet on President Trump. It 311 00:14:55,320 --> 00:14:57,239 Speaker 2: was totally outside compliance. 312 00:14:58,440 --> 00:15:00,960 Speaker 8: It was MI so it begins. 313 00:15:01,800 --> 00:15:04,560 Speaker 7: I'll put the compliance. Plus she did mention yesterday on 314 00:15:04,600 --> 00:15:06,800 Speaker 7: Twitter that this is now her personal account. 315 00:15:06,560 --> 00:15:11,360 Speaker 2: So very personal. We wait there from Kevin Gordon as well, 316 00:15:11,720 --> 00:15:17,600 Speaker 2: Liza and Sanders. Kevin Gordon forever at Charles Schwatt, stay 317 00:15:17,640 --> 00:15:21,560 Speaker 2: with us. More from Bloomberg Surveillance coming up after. 318 00:15:21,320 --> 00:15:32,040 Speaker 1: This, you're listening to the Bloomberg Surveillance podcast. Catch us 319 00:15:32,080 --> 00:15:35,400 Speaker 1: Live weekday afternoons from seven to ten am Eastern Listen 320 00:15:35,480 --> 00:15:39,040 Speaker 1: on Applecarplay and Android Auto with the Bloomberg Business app, 321 00:15:39,200 --> 00:15:40,960 Speaker 1: or watch us Live on YouTube. 322 00:15:41,320 --> 00:15:42,120 Speaker 3: I do this. 323 00:15:42,240 --> 00:15:47,280 Speaker 2: Because you should see my new Philson Fishing Guide vest 324 00:15:47,840 --> 00:15:49,040 Speaker 2: Twitter eighty nine dollars. 325 00:15:49,080 --> 00:15:50,520 Speaker 3: Wow, it's very good. 326 00:15:50,560 --> 00:15:54,400 Speaker 2: It's designed for anglers to organize gear for a full 327 00:15:54,520 --> 00:15:58,440 Speaker 2: day out on the tundra as well. On April first, 328 00:15:58,480 --> 00:16:02,360 Speaker 2: we always speak with Ellen because they said to Lisa Shallaton, 329 00:16:02,440 --> 00:16:06,160 Speaker 2: I'm sorry, I gotta do fly fishing here. There's the 330 00:16:06,200 --> 00:16:11,520 Speaker 2: pre runoff window. Yeah, like like the winter waters. Yeah, 331 00:16:11,600 --> 00:16:13,560 Speaker 2: the streams are like what clearer? 332 00:16:15,400 --> 00:16:19,280 Speaker 5: The fish have been starving all winter and you get 333 00:16:19,320 --> 00:16:22,920 Speaker 5: them before the runoff, and so they're pretty excited about that. 334 00:16:23,040 --> 00:16:24,520 Speaker 5: And you don't get a lot of pressure. You don't 335 00:16:24,520 --> 00:16:28,360 Speaker 5: see a lot of other anglers out there. And actually 336 00:16:28,760 --> 00:16:32,160 Speaker 5: some of the best fly fishing is going out for 337 00:16:32,600 --> 00:16:36,480 Speaker 5: Mother's Day, which is actually just before the runoff, but 338 00:16:36,760 --> 00:16:38,520 Speaker 5: won't make you very popular with mom. 339 00:16:38,920 --> 00:16:43,400 Speaker 2: Okay, is this the Arkansas and South Platt Is it 340 00:16:43,560 --> 00:16:46,120 Speaker 2: the yellowst the jelly Stone in Missouri? 341 00:16:46,520 --> 00:16:48,280 Speaker 3: Rivers. Where does Ellen Zetner. 342 00:16:48,040 --> 00:16:50,880 Speaker 5: Go, Well, Tom, you really you're really struggling with this 343 00:16:50,880 --> 00:16:51,880 Speaker 5: this this morning. 344 00:16:52,080 --> 00:16:54,920 Speaker 2: Yeah, well you know it's I think this is important, 345 00:16:54,960 --> 00:16:57,520 Speaker 2: like where where is your chosen April. 346 00:16:57,200 --> 00:16:58,240 Speaker 3: River in America? 347 00:16:58,760 --> 00:17:01,080 Speaker 5: Well, look, we don't have or give away the rivers 348 00:17:01,120 --> 00:17:03,440 Speaker 5: that we liked. Fish, you don't. 349 00:17:03,200 --> 00:17:04,760 Speaker 3: Do that and platter. 350 00:17:04,880 --> 00:17:07,960 Speaker 5: Yeah, but Montana is still a big favorite, a big 351 00:17:08,000 --> 00:17:08,840 Speaker 5: favorite of ours. 352 00:17:09,240 --> 00:17:13,160 Speaker 2: Driving so much at Morgan Stanley, Ellen Xander with us today? 353 00:17:13,440 --> 00:17:15,840 Speaker 2: How was the American consumer? This is how you and 354 00:17:15,880 --> 00:17:17,399 Speaker 2: I first met, I know, do. 355 00:17:17,680 --> 00:17:22,159 Speaker 5: You know talking about Apple's fiftieth the anniversary. There's a 356 00:17:22,160 --> 00:17:25,480 Speaker 5: big anniversary for us, Tom. It is twenty three years 357 00:17:25,520 --> 00:17:29,199 Speaker 5: ago that I was first on radio with you. Very 358 00:17:29,400 --> 00:17:30,480 Speaker 5: twenty three years ago. 359 00:17:30,640 --> 00:17:31,680 Speaker 3: You were three years old? 360 00:17:31,880 --> 00:17:34,040 Speaker 8: Exactly, Yes, no, exactly. 361 00:17:33,760 --> 00:17:36,400 Speaker 2: Well seriously, this is she was sixteen years old out 362 00:17:36,400 --> 00:17:37,720 Speaker 2: of some high school in Texas. 363 00:17:37,720 --> 00:17:38,360 Speaker 3: That's what I read. 364 00:17:38,520 --> 00:17:41,840 Speaker 5: It was you and Ken Pruitt and I in the studio. 365 00:17:42,080 --> 00:17:43,320 Speaker 3: Was the only reason you got on? 366 00:17:43,560 --> 00:17:46,360 Speaker 2: Was you and Ken talk and fly fishing Paul Sweety 367 00:17:46,400 --> 00:17:48,720 Speaker 2: with elsator Ellen, what do you. 368 00:17:48,440 --> 00:17:50,360 Speaker 6: What are the conversations you're having with your clients as 369 00:17:50,359 --> 00:17:51,560 Speaker 6: you do travel around the US. 370 00:17:51,680 --> 00:17:52,960 Speaker 3: Talking to your US. 371 00:17:52,760 --> 00:17:55,520 Speaker 6: Clients here, do they want you to really help them 372 00:17:55,520 --> 00:17:57,240 Speaker 6: think about on the other side of this war? 373 00:17:58,160 --> 00:17:59,080 Speaker 3: What do we do here? 374 00:17:59,200 --> 00:18:01,760 Speaker 6: Is that? What are the conversations you're having these days? 375 00:18:01,840 --> 00:18:04,320 Speaker 5: I tell you what. There's so much volatility and so 376 00:18:04,440 --> 00:18:09,560 Speaker 5: much uncertainty out there that it has made the conversations 377 00:18:10,160 --> 00:18:14,280 Speaker 5: all that much more interesting because they're much more longer 378 00:18:14,400 --> 00:18:18,040 Speaker 5: term focused. So not necessarily when are we going to 379 00:18:18,040 --> 00:18:21,239 Speaker 5: get beyond this? But it's more of what does this 380 00:18:21,320 --> 00:18:27,320 Speaker 5: mean in the bigger picture of long term national security 381 00:18:27,600 --> 00:18:34,600 Speaker 5: and resource nationalism and resource scarcity and defense spending and 382 00:18:34,680 --> 00:18:37,960 Speaker 5: all of those things. And so it makes those topics 383 00:18:38,480 --> 00:18:42,680 Speaker 5: really top of mind for clients because you can't it 384 00:18:42,720 --> 00:18:45,080 Speaker 5: really gets exhausting trying to figure out when is this 385 00:18:45,119 --> 00:18:46,920 Speaker 5: thing going to end? Am I supposed to time it? 386 00:18:47,040 --> 00:18:49,680 Speaker 5: What should I do here? And so it just opens 387 00:18:49,680 --> 00:18:53,000 Speaker 5: the door to some really interesting conversations. I don't think 388 00:18:53,000 --> 00:18:55,000 Speaker 5: anyone knows when we're going to be out of this 389 00:18:55,080 --> 00:18:57,200 Speaker 5: and what does out of this even mean? 390 00:18:57,400 --> 00:18:58,720 Speaker 6: And I think we're seeing that maybe in the oil 391 00:18:58,720 --> 00:19:01,200 Speaker 6: marketings we're seeing stocks reb Okay, that's fine, maybe it 392 00:19:01,240 --> 00:19:03,960 Speaker 6: goes to the growth issue, but you know, oil still 393 00:19:03,960 --> 00:19:07,680 Speaker 6: holding very high levels. That suggests maybe the market saying 394 00:19:07,760 --> 00:19:10,160 Speaker 6: I'm not sure it is straight up where moose things 395 00:19:10,160 --> 00:19:11,520 Speaker 6: ever going to clear up in the near term. 396 00:19:11,600 --> 00:19:13,760 Speaker 5: Yeah, well, even if I mean, what does it mean 397 00:19:13,800 --> 00:19:16,639 Speaker 5: to open the straight tomorrow, I mean, let's just assume 398 00:19:16,680 --> 00:19:20,600 Speaker 5: that's a thing, and that that could happen. You still 399 00:19:20,640 --> 00:19:24,600 Speaker 5: got all of these price effects and shortages in the pipeline, 400 00:19:25,000 --> 00:19:28,199 Speaker 5: and businesses have to absorb that, households have to absorb that, 401 00:19:28,600 --> 00:19:30,600 Speaker 5: and some countries are going to be able to absorb 402 00:19:30,640 --> 00:19:33,480 Speaker 5: it better than others. There are countries that will step 403 00:19:33,480 --> 00:19:37,320 Speaker 5: in with food subsidies and other assistants like that, but 404 00:19:37,359 --> 00:19:41,520 Speaker 5: there will be pain. Now does that mean recession? Not necessarily, 405 00:19:41,760 --> 00:19:44,280 Speaker 5: but I think the probability of recession here is higher 406 00:19:44,280 --> 00:19:46,919 Speaker 5: than people think, and I would put it around forty percent, 407 00:19:47,000 --> 00:19:51,919 Speaker 5: which is meaningful. It's uncomfortable, right helping. 408 00:19:51,680 --> 00:19:53,439 Speaker 2: You're again with the consumer and that you know, the 409 00:19:53,480 --> 00:19:56,280 Speaker 2: modern statement is the case shape. You literally invented this 410 00:19:56,760 --> 00:19:58,639 Speaker 2: as a cottage industry at unit credit. 411 00:19:58,680 --> 00:20:00,440 Speaker 3: I think it was years ago. 412 00:20:00,560 --> 00:20:03,760 Speaker 2: I mean, help us here with a fifteen hundred dollars 413 00:20:03,880 --> 00:20:07,960 Speaker 2: disposable income lift and cost due to a gallon of gas. 414 00:20:08,200 --> 00:20:10,720 Speaker 2: It crushes how much of America? 415 00:20:10,840 --> 00:20:15,920 Speaker 5: Yeah, so it always falls more heavily. It's very regressive, 416 00:20:15,960 --> 00:20:18,920 Speaker 5: so it falls more heavily on lower income households. They 417 00:20:19,000 --> 00:20:21,960 Speaker 5: also have to commute and drive to work, especially in 418 00:20:22,000 --> 00:20:25,879 Speaker 5: the big driving states. You'll see the bigger impacts and 419 00:20:26,720 --> 00:20:29,000 Speaker 5: you'll see them change their behavior, but it takes time. 420 00:20:29,880 --> 00:20:32,560 Speaker 2: Wait, wait a minute, Morgan Stanley, where everybody grew up 421 00:20:32,560 --> 00:20:35,800 Speaker 2: in three zip codes and your country girl fishing and 422 00:20:35,840 --> 00:20:38,919 Speaker 2: all that, we don't understand those driving times. 423 00:20:38,960 --> 00:20:40,320 Speaker 5: Those are big driving states. 424 00:20:40,400 --> 00:20:43,560 Speaker 2: Yeah, you know, children from the East just don't get it. 425 00:20:43,880 --> 00:20:44,000 Speaker 3: Now. 426 00:20:44,080 --> 00:20:46,600 Speaker 6: I spent half my life on New year'sy transit, so 427 00:20:46,720 --> 00:20:47,359 Speaker 6: that's not kind of. 428 00:20:47,680 --> 00:20:50,000 Speaker 5: So you don't understand. But many of your listeners will 429 00:20:50,040 --> 00:20:54,720 Speaker 5: know the obsession that you have Florida, Texas, California, these 430 00:20:54,720 --> 00:20:58,439 Speaker 5: big driving states. It is a family obsession talking about 431 00:20:58,760 --> 00:21:02,600 Speaker 5: gas prices around dinner table. You pass by a gas station, 432 00:21:02,720 --> 00:21:04,960 Speaker 5: you look at every single sign to see what the 433 00:21:05,000 --> 00:21:08,040 Speaker 5: gas price is. You comment on how it's gone up, 434 00:21:08,640 --> 00:21:10,359 Speaker 5: when was the last time you saw that price, Like 435 00:21:10,440 --> 00:21:12,840 Speaker 5: it's a pastime. Just like for New Yorkers talking about 436 00:21:12,840 --> 00:21:15,439 Speaker 5: the weather, it's talking about gas prices for much of 437 00:21:15,440 --> 00:21:18,360 Speaker 5: the rest of the country, and so this is meaningful. 438 00:21:18,720 --> 00:21:22,119 Speaker 5: You can first, if you weren't buying the cheapest unleaded gasoline, 439 00:21:22,160 --> 00:21:25,439 Speaker 5: you'll switch to the cheapest. Then after time maybe you 440 00:21:25,520 --> 00:21:27,760 Speaker 5: start to commute. We did this in two thousand and eight. 441 00:21:27,880 --> 00:21:32,960 Speaker 5: We started, we started car pooling together. We started changing 442 00:21:33,040 --> 00:21:35,479 Speaker 5: our altering our behavior on the types of vehicles we 443 00:21:35,480 --> 00:21:38,159 Speaker 5: were buying. You've seen all the reports of people now 444 00:21:38,200 --> 00:21:44,639 Speaker 5: inquiring about evs, for instance, but it takes time to 445 00:21:44,760 --> 00:21:47,600 Speaker 5: change those behaviors, and so you have to suck it 446 00:21:47,680 --> 00:21:50,399 Speaker 5: up and pay it at the pump and till you 447 00:21:50,440 --> 00:21:52,320 Speaker 5: can cut costs elsewhere. 448 00:21:52,560 --> 00:21:55,200 Speaker 6: That being said, what's your view on a consumer, because 449 00:21:55,240 --> 00:21:57,960 Speaker 6: it seems like the consumers more than hanging in there. 450 00:21:57,960 --> 00:22:00,239 Speaker 5: I guess well, I mean this has been like how 451 00:22:00,240 --> 00:22:02,000 Speaker 5: many years in a row we've been talking about this. 452 00:22:02,720 --> 00:22:05,160 Speaker 5: The low income consumer has been in and out of recession. 453 00:22:05,800 --> 00:22:09,159 Speaker 5: The first recession they went to was when they worked 454 00:22:09,200 --> 00:22:11,640 Speaker 5: through the excess savings that had been built up during 455 00:22:11,680 --> 00:22:13,920 Speaker 5: COVID from the stimulus and not just not being able 456 00:22:13,920 --> 00:22:17,760 Speaker 5: to spend income. So they've been in and out of recession. Luckily, 457 00:22:17,840 --> 00:22:21,200 Speaker 5: wage growth has at least for a time been outpacing inflation. 458 00:22:22,400 --> 00:22:25,400 Speaker 5: But the wealthy consumer. We don't need the wealthy consumer 459 00:22:25,480 --> 00:22:29,959 Speaker 5: to just stop spending. It's slowing spending. And of course, 460 00:22:30,359 --> 00:22:33,040 Speaker 5: if you've already met a lot of pent up demand, 461 00:22:33,440 --> 00:22:35,639 Speaker 5: you've been out there spending for years now. With this 462 00:22:35,800 --> 00:22:38,920 Speaker 5: amazing run up in financial assets, you're sitting on a 463 00:22:38,960 --> 00:22:41,359 Speaker 5: lot of equity in your home, but you're not seeing 464 00:22:41,440 --> 00:22:46,280 Speaker 5: further gains. It can cause you to pull back on spending. 465 00:22:46,359 --> 00:22:47,919 Speaker 5: And that's all it takes. 466 00:22:48,520 --> 00:22:51,600 Speaker 2: Let I get to send quickly, what's investment look like? 467 00:22:51,840 --> 00:22:55,479 Speaker 2: We never talk about the eye of C plus I 468 00:22:55,520 --> 00:22:59,199 Speaker 2: pluts and ACTSECTC. What's investment looked like? 469 00:22:59,280 --> 00:22:59,639 Speaker 3: Forward? 470 00:23:00,119 --> 00:23:04,080 Speaker 5: So business investment had been very tech tech and infrastructure 471 00:23:04,080 --> 00:23:09,679 Speaker 5: related to AI related last year. The big optimism around 472 00:23:09,680 --> 00:23:12,000 Speaker 5: this year has been with the One Big Beautiful Bill Act. 473 00:23:12,000 --> 00:23:14,840 Speaker 5: As we turned the corner into this year, there were 474 00:23:14,960 --> 00:23:17,920 Speaker 5: nascent signs of business investments starting to broaden out. Because 475 00:23:17,920 --> 00:23:20,640 Speaker 5: it's really hard to not want to take advantage of that. 476 00:23:20,960 --> 00:23:24,560 Speaker 5: We've done one hundred percent bonus appreciation, but sorry, fifty 477 00:23:24,600 --> 00:23:26,880 Speaker 5: percent before we've not done one hundred percent, and it's 478 00:23:26,920 --> 00:23:29,800 Speaker 5: on infrastructure as well. It's really hard to not take 479 00:23:29,800 --> 00:23:31,920 Speaker 5: advantage of that. But is this a false start because 480 00:23:31,960 --> 00:23:36,680 Speaker 5: now you have the conflict in Iran, You've got energy prices, 481 00:23:36,720 --> 00:23:39,959 Speaker 5: food input prices for businesses, and they're going to have 482 00:23:40,000 --> 00:23:44,200 Speaker 5: to eat a good chunk of that. Does that negate 483 00:23:44,280 --> 00:23:46,520 Speaker 5: some of your decisions that you were going to make 484 00:23:46,720 --> 00:23:49,879 Speaker 5: to invest I think they will still take advantage of 485 00:23:49,920 --> 00:23:53,239 Speaker 5: the One Big Beautiful Bill Act. But this is what 486 00:23:54,040 --> 00:23:57,399 Speaker 5: as soon as we're able to look beyond the conflict 487 00:23:57,640 --> 00:24:00,600 Speaker 5: and the Strait of Hormuz, here's what the next concern 488 00:24:00,720 --> 00:24:03,280 Speaker 5: is the cliff that we will fall off from having 489 00:24:03,280 --> 00:24:06,080 Speaker 5: pulled forward all of the demand and tax breaks and 490 00:24:06,080 --> 00:24:08,040 Speaker 5: everything else from the One Big Beautiful Bill Act. 491 00:24:08,240 --> 00:24:10,760 Speaker 2: We have to run. Ellen Zettner, thank you so much. 492 00:24:10,840 --> 00:24:14,080 Speaker 2: I learned so much today about trout fishing. 493 00:24:15,800 --> 00:24:16,520 Speaker 3: Stay with us. 494 00:24:16,760 --> 00:24:20,000 Speaker 2: More from Bloomberg Surveillance coming up after this. 495 00:24:27,240 --> 00:24:30,840 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 496 00:24:30,880 --> 00:24:34,040 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 497 00:24:34,119 --> 00:24:37,800 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 498 00:24:37,960 --> 00:24:39,840 Speaker 1: watch us live on YouTube in. 499 00:24:39,880 --> 00:24:40,879 Speaker 3: Studio Martin Norton. 500 00:24:40,880 --> 00:24:43,680 Speaker 2: That's what you could join as chief investment strategists at 501 00:24:43,760 --> 00:24:49,120 Speaker 2: Empower I should mention that Empower Services Tom Kenes non retirement. Yeah, 502 00:24:50,080 --> 00:24:52,719 Speaker 2: here the caskets out, caskets all back, A sigh in 503 00:24:52,720 --> 00:24:58,840 Speaker 2: the studio thank you quote. Throw the twenty twenty six 504 00:24:58,920 --> 00:25:01,960 Speaker 2: playbook out the wind. The first one I've seen is 505 00:25:02,040 --> 00:25:05,560 Speaker 2: actually said this, what's the new Martin Norton playbook look like? 506 00:25:05,880 --> 00:25:06,040 Speaker 9: Well? 507 00:25:06,040 --> 00:25:10,960 Speaker 10: Remember, pre war, the whole focus was on broadening out, 508 00:25:11,440 --> 00:25:16,920 Speaker 10: really predicated on this idea that earnings could drive momentum 509 00:25:16,960 --> 00:25:19,640 Speaker 10: away from taking to these other areas of the market. 510 00:25:19,960 --> 00:25:22,800 Speaker 10: And now the question mark that we're looking at is 511 00:25:22,880 --> 00:25:26,960 Speaker 10: what do earnings look like post spike in oil prices 512 00:25:27,040 --> 00:25:31,600 Speaker 10: and everything else. We'll get some read on that pretty soon. 513 00:25:31,720 --> 00:25:33,800 Speaker 10: We'll get some guidance on that pretty soon. But I 514 00:25:33,800 --> 00:25:35,960 Speaker 10: think the other question we have to ask ourselves is 515 00:25:36,040 --> 00:25:40,600 Speaker 10: valuations were not that accommodative pre oil spike, and now 516 00:25:40,800 --> 00:25:43,440 Speaker 10: I think valuations play a pretty big role because there's 517 00:25:43,440 --> 00:25:45,720 Speaker 10: still those negative surprises out there. So if you don't 518 00:25:45,760 --> 00:25:49,479 Speaker 10: have much margin of safety, that's something that matters to 519 00:25:49,560 --> 00:25:52,560 Speaker 10: how these markets perform. I will say though, that some 520 00:25:52,600 --> 00:25:55,600 Speaker 10: of the themes that were in place before, like the AI theme, 521 00:25:55,840 --> 00:26:00,840 Speaker 10: the transformation, the creative destruction, that's still in the background. 522 00:26:01,520 --> 00:26:04,200 Speaker 6: How about the rotation we saw in the market kind 523 00:26:04,200 --> 00:26:07,000 Speaker 6: of starting late last year into this year before the war, 524 00:26:07,920 --> 00:26:10,920 Speaker 6: out of some of the high tech high valuation maybe 525 00:26:10,920 --> 00:26:13,800 Speaker 6: into some more value sensitive, very small and mid captins. 526 00:26:13,920 --> 00:26:15,280 Speaker 3: Yeah, is that still a thing? 527 00:26:15,760 --> 00:26:18,080 Speaker 10: Well, that's that's what I'm struggling with a bit. And 528 00:26:18,119 --> 00:26:21,560 Speaker 10: what I've liked about that rotation when we've left tech 529 00:26:21,640 --> 00:26:24,720 Speaker 10: behind is I think getting a piece of that AI 530 00:26:24,880 --> 00:26:27,360 Speaker 10: trade is a really valuable thing. But did you really 531 00:26:27,400 --> 00:26:29,960 Speaker 10: want to be doing it in September when we had 532 00:26:30,040 --> 00:26:32,520 Speaker 10: valuations where they are? And now what we do when 533 00:26:32,520 --> 00:26:34,760 Speaker 10: we look at valuations is we look at them in deciles, 534 00:26:34,760 --> 00:26:37,360 Speaker 10: because when they matter is at extremes. And when we're 535 00:26:37,400 --> 00:26:39,800 Speaker 10: looking at the mag seven and it's decile going back 536 00:26:39,840 --> 00:26:43,199 Speaker 10: to twenty fifteen, it's in its lowest decile, which is 537 00:26:43,200 --> 00:26:46,000 Speaker 10: a ken to where it was post liberation day. So 538 00:26:46,160 --> 00:26:50,000 Speaker 10: to me, that's a better opportunity than it was six 539 00:26:50,040 --> 00:26:54,520 Speaker 10: months ago. With the fundamental still intact software also very cheap, 540 00:26:54,600 --> 00:26:57,719 Speaker 10: maybe rightly so, but maybe some opportunities emerging there too. 541 00:26:57,880 --> 00:27:02,240 Speaker 2: Given an empowered timeframe, three years is tomorrow, five years, 542 00:27:02,600 --> 00:27:08,040 Speaker 2: ten years, are we overdiversified or underdiversified in for own. 543 00:27:07,920 --> 00:27:11,679 Speaker 10: Case, it depends on the person in question. Now, a 544 00:27:11,720 --> 00:27:14,080 Speaker 10: lot of folks, what you see with the four to 545 00:27:14,119 --> 00:27:17,000 Speaker 10: one case space in particular is a default into target 546 00:27:17,080 --> 00:27:20,680 Speaker 10: date funds. So your your multi asset have they been successful? 547 00:27:21,080 --> 00:27:25,600 Speaker 2: Have they been actually a sessional like sharp ratio successful? 548 00:27:25,640 --> 00:27:28,640 Speaker 10: I think what you've seen is really good behavior out 549 00:27:28,640 --> 00:27:30,840 Speaker 10: of the investors who've been in the target date funds. 550 00:27:30,880 --> 00:27:33,600 Speaker 10: You know, one thing people always say about individual investors 551 00:27:33,720 --> 00:27:37,160 Speaker 10: is you know, how emotional they are, how silly they are, 552 00:27:37,240 --> 00:27:40,520 Speaker 10: And that's target date takes the emotion out of it. 553 00:27:40,560 --> 00:27:42,679 Speaker 10: And I think that's been a big win. You can 554 00:27:42,840 --> 00:27:46,160 Speaker 10: you can argue, you know, different asset classes that are included, 555 00:27:46,160 --> 00:27:48,080 Speaker 10: but I think the big win has been the emotional 556 00:27:48,119 --> 00:27:49,720 Speaker 10: win on the target date side. 557 00:27:50,560 --> 00:27:53,600 Speaker 6: How's the conversation with your clients, you know, changed since 558 00:27:53,640 --> 00:27:55,760 Speaker 6: we went into this war and Iran. Has it been 559 00:27:56,400 --> 00:27:59,240 Speaker 6: de risking, has it been trying to buy the dips? 560 00:28:00,119 --> 00:28:01,040 Speaker 6: What are the conversations? 561 00:28:01,200 --> 00:28:05,080 Speaker 10: You know, it's been really interesting because when we went 562 00:28:05,119 --> 00:28:09,160 Speaker 10: through Liberation Day and tear Us, emotions were very, very 563 00:28:09,240 --> 00:28:13,280 Speaker 10: high on the individual investors side. When we're looking today, 564 00:28:13,800 --> 00:28:16,479 Speaker 10: there are still high emotions, but there's almost like a 565 00:28:16,520 --> 00:28:22,959 Speaker 10: certain measure of resignation. But the environment and the surprises, 566 00:28:23,040 --> 00:28:25,639 Speaker 10: so yeah, we're still getting questions and we still you know, 567 00:28:25,680 --> 00:28:29,000 Speaker 10: people are having very big picture questions these days, but 568 00:28:29,240 --> 00:28:30,639 Speaker 10: there's not a sense of panic. 569 00:28:30,760 --> 00:28:34,040 Speaker 3: I would sugg knee deep in the Ragget one quick question. 570 00:28:34,560 --> 00:28:37,800 Speaker 2: Are Wroth's over sold this whole Wroth conversion thing. 571 00:28:38,240 --> 00:28:40,840 Speaker 3: Does Empower say it's overdone? 572 00:28:40,520 --> 00:28:44,960 Speaker 10: No Empower or view on that particular question. I mean, 573 00:28:44,960 --> 00:28:49,400 Speaker 10: I think what Empower's biggest perspective is is get engaged, 574 00:28:49,880 --> 00:28:54,040 Speaker 10: get participating, regardless of account type, get saving, and it 575 00:28:54,080 --> 00:28:55,280 Speaker 10: makes an enormous difference. 576 00:28:55,320 --> 00:28:57,960 Speaker 2: Brilliant Martinton, Thank you so much in studio with us 577 00:28:58,080 --> 00:29:00,560 Speaker 2: today with Empowered Don't be Bronco. 578 00:29:00,640 --> 00:29:05,680 Speaker 10: Tickets to come on Good Bene Good, Better, Best is 579 00:29:05,720 --> 00:29:06,960 Speaker 10: where I am Sarta d Hurt. 580 00:29:07,120 --> 00:29:11,760 Speaker 3: Thank you so much, greatly, greatly appreciate it. Stay with us. 581 00:29:12,000 --> 00:29:15,240 Speaker 2: More from Bloomberg Surveillance coming up after this. 582 00:29:22,480 --> 00:29:26,080 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 583 00:29:26,120 --> 00:29:29,280 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 584 00:29:29,360 --> 00:29:33,040 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app. Or 585 00:29:33,200 --> 00:29:34,840 Speaker 1: watch us live on YouTube. 586 00:29:35,040 --> 00:29:38,840 Speaker 2: We welcome all of you across the nation, across America 587 00:29:38,880 --> 00:29:42,320 Speaker 2: and original site Tyler Kendall in front of the nineteen 588 00:29:42,400 --> 00:29:46,760 Speaker 2: thirty five Supreme Court building where history will be made. Tyler, 589 00:29:46,800 --> 00:29:48,880 Speaker 2: thank you so much for joining us for an extended 590 00:29:48,920 --> 00:29:53,080 Speaker 2: conversation as simple as I can. There's no cameras in 591 00:29:53,120 --> 00:29:57,440 Speaker 2: the court room. How do you suggest Chief Justice Roberts 592 00:29:57,840 --> 00:30:00,600 Speaker 2: will attend this history moment? 593 00:30:03,320 --> 00:30:06,840 Speaker 9: Well, Tom, you're exactly right. This is really unprecedented for 594 00:30:07,040 --> 00:30:10,840 Speaker 9: a modern sitting US president president to be inside the 595 00:30:10,880 --> 00:30:14,840 Speaker 9: Supreme Court for oral arguments while they are discussing one 596 00:30:14,880 --> 00:30:17,920 Speaker 9: of his signature policies that he's trying to push through. 597 00:30:18,000 --> 00:30:21,480 Speaker 9: Of course, this case stemming from President Trump's executive order 598 00:30:21,520 --> 00:30:24,120 Speaker 9: that he signed on the very first day in office 599 00:30:24,200 --> 00:30:30,080 Speaker 9: barring US born children of undocumented immigrants from obtaining US citizenship. 600 00:30:30,240 --> 00:30:32,800 Speaker 9: This is going to be a very interesting room to 601 00:30:32,840 --> 00:30:34,560 Speaker 9: be a fly on the wall, because, as you're right, 602 00:30:34,600 --> 00:30:37,000 Speaker 9: we're not going to get those photos of it, but 603 00:30:37,040 --> 00:30:40,240 Speaker 9: we will get, of course, the reporter's descriptions inside the rooms, 604 00:30:40,240 --> 00:30:43,320 Speaker 9: and also those sketches, because you well know, President Trump 605 00:30:43,400 --> 00:30:47,320 Speaker 9: has really taken aim at this Supreme Court recently considering 606 00:30:47,720 --> 00:30:50,280 Speaker 9: that ruling that we got up ending the president's broad 607 00:30:50,320 --> 00:30:51,400 Speaker 9: based care policies. 608 00:30:51,560 --> 00:30:53,320 Speaker 3: Will there be bodied language? 609 00:30:53,560 --> 00:30:57,160 Speaker 2: I mean, I mean, if he's playing to three justices 610 00:30:57,800 --> 00:31:01,720 Speaker 2: is experts advises Tyler, do we assss he's going to 611 00:31:01,800 --> 00:31:05,040 Speaker 2: sit in the front row and squirm around like Paul 612 00:31:05,120 --> 00:31:08,400 Speaker 2: or I would squirm around in a tennis lesson with you. 613 00:31:11,080 --> 00:31:14,080 Speaker 9: Well, as you all know, Preston Trump often makes his 614 00:31:14,240 --> 00:31:17,040 Speaker 9: views very well known, so perhaps that will come in 615 00:31:17,120 --> 00:31:19,920 Speaker 9: body language. But I wanted to point out to you 616 00:31:20,000 --> 00:31:22,720 Speaker 9: Tom and Paul that we've actually already gotten some signals 617 00:31:22,760 --> 00:31:26,280 Speaker 9: from some of these conservative justices, including Brett Kavanaugh, for example, 618 00:31:26,520 --> 00:31:29,920 Speaker 9: that they may already be skeptical about the administration's argument 619 00:31:30,200 --> 00:31:34,240 Speaker 9: when it comes to essentially changing the view of how 620 00:31:34,240 --> 00:31:37,720 Speaker 9: the citizenship clause in the Fourteenth Amendment is viewed. We 621 00:31:37,920 --> 00:31:42,880 Speaker 9: heard what court watchers called signals that they may not 622 00:31:43,000 --> 00:31:46,640 Speaker 9: totally agree with what the US Solicitor General John Sower 623 00:31:46,720 --> 00:31:49,640 Speaker 9: has already outlined in what his arguments are going to 624 00:31:49,760 --> 00:31:53,520 Speaker 9: be today. So expected to be to be a tense room, 625 00:31:53,600 --> 00:31:56,600 Speaker 9: considering we already know that at least three lower courts 626 00:31:56,840 --> 00:32:01,000 Speaker 9: had already blocked the President's executive orders leading to what 627 00:32:01,120 --> 00:32:02,880 Speaker 9: ultimately was the Supreme Court appeal. 628 00:32:03,600 --> 00:32:06,440 Speaker 6: Tyler, help us just kind of paint a picture in 629 00:32:06,440 --> 00:32:08,840 Speaker 6: our minds of kind of what this room may look like. 630 00:32:09,800 --> 00:32:11,959 Speaker 6: Do we know how many people will be in this courtroom? 631 00:32:12,520 --> 00:32:13,240 Speaker 8: How big is it? 632 00:32:13,280 --> 00:32:16,920 Speaker 6: How close potential would the president be to the justices? 633 00:32:16,960 --> 00:32:19,560 Speaker 6: What do we know about this actually how this unfold today? 634 00:32:21,960 --> 00:32:25,960 Speaker 9: It's an incredibly close courtroom of the stand at Supreme 635 00:32:25,960 --> 00:32:30,080 Speaker 9: Court behind me. We're expecting oral arguments to go a 636 00:32:30,120 --> 00:32:32,480 Speaker 9: little over an hour, maybe an hour and a half 637 00:32:32,520 --> 00:32:35,479 Speaker 9: is how it typically works straight at ten am Eastern, 638 00:32:35,520 --> 00:32:37,400 Speaker 9: So we're really just moments away. I can't pay you 639 00:32:37,480 --> 00:32:40,040 Speaker 9: a better picture what it's like outside here. Our listeners 640 00:32:40,080 --> 00:32:43,360 Speaker 9: can probably hear there are dueling protests happening here. You 641 00:32:43,400 --> 00:32:47,440 Speaker 9: also may hear helicopters warring around. We're right across from 642 00:32:47,440 --> 00:32:50,720 Speaker 9: the US Capitol building. Just to add to the backdrop there, 643 00:32:50,800 --> 00:32:53,680 Speaker 9: we know, of course, this is marking the President doubling 644 00:32:53,720 --> 00:32:56,400 Speaker 9: down on his hardline immigration stands. We should probably keep 645 00:32:56,400 --> 00:32:58,600 Speaker 9: in mind, I can see the Capitol rotunda where I'm standing. 646 00:32:58,640 --> 00:33:01,280 Speaker 9: The Department of Homeland Security right now is shut down 647 00:33:01,360 --> 00:33:05,520 Speaker 9: over his hardline immigration policies with CHET. This moment shows 648 00:33:05,560 --> 00:33:08,680 Speaker 9: that there's no sign that it's going to abate and resolve. 649 00:33:08,960 --> 00:33:12,760 Speaker 2: Tyler, You're like us, let's be humble. We're not experts 650 00:33:12,880 --> 00:33:16,240 Speaker 2: at this. You have the advantage of Greg's store, June 651 00:33:16,280 --> 00:33:19,280 Speaker 2: Grosso Paul coming up at the ten o'clock our. 652 00:33:19,400 --> 00:33:20,240 Speaker 3: Tyler Kendall. 653 00:33:20,480 --> 00:33:23,320 Speaker 2: When you listen to the experts, what do they say 654 00:33:23,640 --> 00:33:25,200 Speaker 2: about this historic moment? 655 00:33:27,840 --> 00:33:30,280 Speaker 9: Well, Tom, they say that this case is going to 656 00:33:30,280 --> 00:33:34,000 Speaker 9: come down to literally five words in the Citizenship Clause. 657 00:33:34,040 --> 00:33:35,400 Speaker 5: Of the fourteenth Amendment. 658 00:33:35,440 --> 00:33:37,320 Speaker 9: You also may hear there is a marching band that 659 00:33:37,400 --> 00:33:39,400 Speaker 9: is about to enter onto First to Avenue. But I 660 00:33:39,440 --> 00:33:43,000 Speaker 9: was actually having this conversation with Greg Store earlier this morning, so. 661 00:33:42,920 --> 00:33:44,240 Speaker 5: I'm glad that you brought up his name. 662 00:33:44,280 --> 00:33:46,760 Speaker 9: He is a resident expert. And that is the line 663 00:33:46,760 --> 00:33:49,719 Speaker 9: in the Citizenship Clause of the fourteenth Amendment that the 664 00:33:49,800 --> 00:33:53,240 Speaker 9: right is quote subject to the jurisdiction thereof. We're willing 665 00:33:53,240 --> 00:33:55,720 Speaker 9: to hear those high words over and over again, and 666 00:33:55,800 --> 00:33:57,760 Speaker 9: whether or not the jurisdiction extends. 667 00:34:00,560 --> 00:34:04,160 Speaker 2: Is that the marching band for the University of Connecticut, 668 00:34:04,400 --> 00:34:07,600 Speaker 2: because you have three of the four final four in 669 00:34:07,720 --> 00:34:11,200 Speaker 2: your bracket pick is that the Yukon Marching band. I hear. 670 00:34:13,640 --> 00:34:16,840 Speaker 9: It is not the Yukon Marching band. I can't actually 671 00:34:16,920 --> 00:34:20,120 Speaker 9: quite make it out, but they have huge drum like. 672 00:34:20,200 --> 00:34:20,800 Speaker 8: You's helping you. 673 00:34:22,000 --> 00:34:24,160 Speaker 3: That's great, Tyler Kendall. You were a truer. 674 00:34:24,239 --> 00:34:27,160 Speaker 2: Thanks so much. She is outside the Supreme Court building. 675 00:34:27,360 --> 00:34:30,080 Speaker 2: I wasn't going to bring it up, but she's killing 676 00:34:30,239 --> 00:34:33,279 Speaker 2: the bracket this year. She's like number twelve or saws 677 00:34:33,320 --> 00:34:37,400 Speaker 2: on for her thousands and thousands. We should have claimed. 678 00:34:37,400 --> 00:34:41,680 Speaker 2: She has a huge Connecticut affiliation. Sterling at tennis for 679 00:34:42,440 --> 00:34:46,280 Speaker 2: the State of Connecticut in high school. Tyler Kendall outside 680 00:34:46,320 --> 00:34:49,200 Speaker 2: the Supreme Court truly an historic moment. 681 00:34:49,440 --> 00:34:54,279 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 682 00:34:54,400 --> 00:34:58,200 Speaker 1: and anywhere else you get your podcasts. Listen live each 683 00:34:58,200 --> 00:35:02,160 Speaker 1: weekday seven to ten am. He's on Bloomberg dot Com, 684 00:35:02,200 --> 00:35:06,000 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 685 00:35:06,280 --> 00:35:09,400 Speaker 1: You can also watch us live every weekday on YouTube 686 00:35:09,719 --> 00:35:11,720 Speaker 1: and always on the Bloomberg terminal