WEBVTT - Bloomberg Surveillance TV: June 15th, 2026 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordern. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.880 Terminal and the Bloomberg Business app. 0:00:36.400 --> 0:00:39.000 Stocks and bonds rising. After an interim agreement between the 0:00:39.080 --> 0:00:41.960 US and iron was reached, the raid through coming ahead 0:00:41.960 --> 0:00:44.840 of fed'st June meeting, the first under new chair Kevin Walsh. 0:00:45.040 --> 0:00:47.960 Seth Carpenter of Morgan Stanley writing this, while the tariff 0:00:48.040 --> 0:00:52.400 impulse appears to be nearing completion, sustained disinflation ahead depends 0:00:52.440 --> 0:00:54.920 on the resolution of the conflict. We expect the FED 0:00:54.960 --> 0:00:57.960 to hold rates unchanged. Seth joins us now here in studio, 0:00:58.000 --> 0:01:00.760 which is a wonderful thing. Hey, good morning, So is 0:01:00.760 --> 0:01:03.440 this enough for you to think that the inflationary pressure 0:01:03.640 --> 0:01:06.479 is probably going to be on a downward trajectory or 0:01:06.640 --> 0:01:08.000 is there something else to play here? 0:01:09.040 --> 0:01:12.720 So probably how's that for an economist answer? Yes, Look, 0:01:12.760 --> 0:01:16.000 the path to a FED rate hike, in our view, 0:01:16.080 --> 0:01:19.120 was never going to be just about inflation, and absolutely 0:01:19.120 --> 0:01:22.400 not just about oil driven inflation. So historically in the 0:01:22.520 --> 0:01:26.280 US oil driven inflation it pushes up headline, but not 0:01:26.480 --> 0:01:29.520 that much typically passed through to core. This time could 0:01:29.520 --> 0:01:31.680 have been different. We'll still have to see how everything 0:01:31.880 --> 0:01:35.319 plays out. But we were thinking if the FED was 0:01:35.319 --> 0:01:37.840 going to hike, it would be a combination of inflation, 0:01:38.160 --> 0:01:42.280 especially core inflation staying sustained, staying above three percent or so, 0:01:42.800 --> 0:01:45.399 and the underlying momentum of the real side of the 0:01:45.440 --> 0:01:48.600 economy broadening out, firming up and keeping going. And if 0:01:48.600 --> 0:01:52.080 we look at say the last several jobs reports, something 0:01:52.120 --> 0:01:54.040 that we have been talking about so much, with oil 0:01:54.080 --> 0:01:57.240 prices being front and center, they've shown that the fall 0:01:57.280 --> 0:02:00.320 and hiring bottomed out, things are starting to pick up again. 0:02:00.360 --> 0:02:02.120 And so I think the real key here is going 0:02:02.160 --> 0:02:05.160 to be where is that underlying strength in the economy 0:02:05.200 --> 0:02:09.760 and is there more inflation momentum outside of oil prices. 0:02:09.840 --> 0:02:12.160 We know that the path through from tariffs has essentially 0:02:12.200 --> 0:02:14.640 run its course, that's going to be a disinflationary force. 0:02:14.960 --> 0:02:19.000 Is there actually that much more fundamental, broad based inflationary 0:02:19.000 --> 0:02:22.280 pressure to overcome that terraff Disinflation. 0:02:21.840 --> 0:02:25.680 On a certain level doesn't lower oil prices help the 0:02:25.800 --> 0:02:29.520 idea of broadening out and strength, they could potentially feed 0:02:29.639 --> 0:02:32.840 some of the other parts of inflation that can make 0:02:32.840 --> 0:02:33.520 the fed on easy. 0:02:33.600 --> 0:02:34.960 Well, I mean it is a bit of a double 0:02:35.040 --> 0:02:38.280 edged sword that way, because if consumers in general feel 0:02:38.600 --> 0:02:41.280 freer to spend, they have more disposable income to spend 0:02:41.280 --> 0:02:44.520 on everything but gasoline, then just maybe there's a bit 0:02:44.560 --> 0:02:47.359 more resilience than to that aggregate demand. So I think 0:02:47.360 --> 0:02:49.120 that's a real risk. We just have to see how 0:02:49.160 --> 0:02:51.399 all of this plays out. And I have to say 0:02:51.440 --> 0:02:55.160 that the agreement's been announced, we haven't seen things signed, 0:02:55.200 --> 0:02:57.760 we haven't seen the increase in the flow of oil 0:02:57.880 --> 0:03:01.480 actually happen. Yet, we haven't got to that critical point 0:03:01.480 --> 0:03:03.320 where there has to be an agreement on all the 0:03:03.320 --> 0:03:05.560 rest of the tricky details, as you were saying before. 0:03:06.280 --> 0:03:08.200 So I think it's too soon to have any conviction 0:03:08.360 --> 0:03:09.839 that we know exactly where things are going. 0:03:09.960 --> 0:03:11.640 What would it take for you to have conviction? What 0:03:11.680 --> 0:03:13.919 do you want to hear out of this agreement where 0:03:13.960 --> 0:03:15.200 the two sides agree. 0:03:14.919 --> 0:03:17.960 On Oh, well, I think there, I just want to 0:03:18.000 --> 0:03:20.400 see the actual flow of oil happen, and then I 0:03:20.440 --> 0:03:23.040 think there are a lot of questions that happen after that. 0:03:23.080 --> 0:03:26.079 What happens to the rebuilding of inventories around the world. 0:03:26.120 --> 0:03:29.200 If people were happy with their stock of inventories before 0:03:29.320 --> 0:03:31.640 this conflict started, are they going to look at that 0:03:31.760 --> 0:03:34.920 level and go in case this ever happens again, we 0:03:35.000 --> 0:03:37.000 need to have an even bigger inventory, in which case 0:03:37.040 --> 0:03:39.760 you can see a much greater surgeon demand once things 0:03:39.760 --> 0:03:43.280 start flowing. We'll be looking at a natural gas how 0:03:43.320 --> 0:03:45.240 long will it take for the flow of the supply 0:03:45.280 --> 0:03:47.880 of natural gas to filter out around the world. The 0:03:47.920 --> 0:03:50.520 rebuild of inventories in lots of places there that's pretty 0:03:50.600 --> 0:03:53.320 seasonal can be pushed off for a while. It can't 0:03:53.320 --> 0:03:55.640 be pushed off forever. And we know that there was 0:03:55.680 --> 0:03:59.160 some damage sustained to cuttery production, and so I think 0:03:59.200 --> 0:04:01.720 there is a question about where will the market settle 0:04:01.720 --> 0:04:04.960 out once we have a clearer idea of supply and 0:04:05.040 --> 0:04:05.960 demand coming together. 0:04:06.000 --> 0:04:07.640 How do you expect the new fetcher to talk about 0:04:07.640 --> 0:04:07.960 all of. 0:04:07.880 --> 0:04:11.920 This Very cautiously. I don't think there is a lot 0:04:12.760 --> 0:04:17.240 for Kevin worsh to get out of being overly definitive here. 0:04:17.680 --> 0:04:20.560 It is a very fluid situation, and so him acknowledging that, 0:04:20.600 --> 0:04:23.560 I think makes it easier. He's been clear that too 0:04:23.640 --> 0:04:26.719 much forward guidance is probably not a good thing, and 0:04:26.800 --> 0:04:29.000 if ever that statement was true, it is right now 0:04:29.680 --> 0:04:33.080 watching all the different paths come together. Coming into this year, 0:04:33.120 --> 0:04:36.760 we were pretty constructive on the underlying momentum of the economy, 0:04:36.760 --> 0:04:40.880 and then everything, the whole discussion was overtaken by what 0:04:40.960 --> 0:04:43.640 was going on with oil markets. I think we really 0:04:43.680 --> 0:04:46.320 do need to have some really close focus on that 0:04:46.440 --> 0:04:49.880 underlying momentum before they can decide is policy really in 0:04:49.880 --> 0:04:50.440 the right place. 0:04:50.640 --> 0:04:52.960 It is Monday, which means it's marger Monday, and it 0:04:52.960 --> 0:04:55.600 comes at a time or despite some of the uncertain too, 0:04:55.600 --> 0:04:59.960 we've seen capital markets incredibly robust. Fox The latest news 0:05:00.120 --> 0:05:02.240 Fox is playing to buy Roku for one hundred and 0:05:02.240 --> 0:05:04.640 sixty dollars to share in a cash and stock deal. 0:05:05.000 --> 0:05:07.040 Goes on to say that Fox expects the deal to 0:05:07.080 --> 0:05:09.320 close the first half of twenty twenty seven, and Fox 0:05:09.360 --> 0:05:11.200 will re chain and believe about a seventy three percent 0:05:11.480 --> 0:05:14.920 control of the combined company. It comes after the SPACEXIPO, 0:05:15.040 --> 0:05:17.359 It comes ahead of a whole host of deals that 0:05:17.400 --> 0:05:20.880 people are expecting. You see bankers incredibly enthusiastic talking about 0:05:20.920 --> 0:05:23.880 how this might be a record year, a banner year 0:05:23.920 --> 0:05:27.000 in all sorts of different areas. How much does that 0:05:27.240 --> 0:05:30.080 potentially affect the feasual reserve in how they look at Marcus, 0:05:30.160 --> 0:05:33.000 how they look at financial conditions, how they look at 0:05:33.200 --> 0:05:35.000 whether they truly are restrictive. 0:05:35.400 --> 0:05:37.240 I mean, I think that's a great question, and this 0:05:37.279 --> 0:05:40.240 could be part of the shift in personnel and thinking. 0:05:40.279 --> 0:05:43.320 With Kevin Warsh as chair, you know, I would say 0:05:43.320 --> 0:05:47.120 in standard academically trained economists, somebody like Ben BERNANKI would 0:05:47.120 --> 0:05:49.400 look at everything that's going on with mergers and see 0:05:49.400 --> 0:05:52.920 that as a result of the economy and other things 0:05:52.920 --> 0:05:55.080 going on in the economy. You know, Kevin spent a 0:05:55.080 --> 0:05:57.840 lot of time talking to investors, talking to people in markets, 0:05:57.880 --> 0:06:00.600 and so could think of that overall sentiment, that the 0:06:01.400 --> 0:06:03.279 wave of M and A and that sort of thing 0:06:03.320 --> 0:06:05.560 as part of the sentiment that's going on that might 0:06:05.640 --> 0:06:10.120 be driving some of the momentum in the economy. I 0:06:10.120 --> 0:06:12.400 don't think it's going to be a watershed where it's 0:06:12.480 --> 0:06:14.000 sort of going to be all in one direction or 0:06:14.000 --> 0:06:16.720 the other. But it does come down to at times 0:06:16.720 --> 0:06:19.000 like this where you're trying to get the signal tease out, 0:06:19.000 --> 0:06:21.520 the signal of where the economy is going. Do you 0:06:21.560 --> 0:06:23.200 lean a little bit more on some data, do you 0:06:23.240 --> 0:06:24.920 lean a little bit more on other data. I think 0:06:25.000 --> 0:06:27.240 that's part of what we need to learn as we 0:06:27.320 --> 0:06:29.080 see this turnover in leadership at the FED. 0:06:29.200 --> 0:06:31.800 How much just AI driving some of the inflationary impulse, 0:06:31.839 --> 0:06:35.120 given that they are able to raise trillions of dollars 0:06:35.160 --> 0:06:38.640 of capital and invest it in assets that seem to 0:06:38.680 --> 0:06:41.320 be endlessly increasing in prices. 0:06:41.839 --> 0:06:44.840 I mean, I think there we're seeing lots of measurement 0:06:44.960 --> 0:06:47.960 questions coming up. There's this discussion of so called chipflation, 0:06:48.560 --> 0:06:51.240 but even within that, the question has the BLS always 0:06:51.240 --> 0:06:54.479 got things right between software chips in terms of the 0:06:54.480 --> 0:06:57.800 price indexes. I think the real key here for the 0:06:57.839 --> 0:07:01.359 inflationary side of things is more that overall momentum in 0:07:01.360 --> 0:07:06.080 the economy, it is undeniable how much capex spending there 0:07:06.160 --> 0:07:08.440 is going on from AI, and I think that's leading 0:07:08.480 --> 0:07:11.520 to things like more construction that's leading to a lot 0:07:11.560 --> 0:07:14.600 of imports for the chips and things like that, but 0:07:14.680 --> 0:07:17.600 it is helping to sustain the momentum of the economy. 0:07:17.600 --> 0:07:19.840 And for me, the real staying power for the inflation 0:07:19.960 --> 0:07:21.960 isn't going to be our chips price is going up. 0:07:22.000 --> 0:07:24.240 It is going to be is that momentum in the 0:07:24.280 --> 0:07:27.640 economy with a fairly low unemployment rate. Is that thing 0:07:27.680 --> 0:07:30.720 that's going to sort of keep inflation core inflation at 0:07:30.720 --> 0:07:31.680 three percent or higher. 0:07:31.720 --> 0:07:33.760 Something I was thinking about this weekend, especially as a 0:07:33.800 --> 0:07:35.960 number of the tie ups start coming to the foreign 0:07:35.960 --> 0:07:40.320 companies get bigger and bigger. Are more consolidated companies. Bigger 0:07:40.360 --> 0:07:43.880 companies good for the inflationary backdrop or bad for the 0:07:43.920 --> 0:07:47.320 inflationary path drop? Do they have greater pricing power or 0:07:47.320 --> 0:07:50.120 do they have greater efficiencies of scale they could potentially 0:07:50.200 --> 0:07:51.480 lower prices for consumer. 0:07:51.760 --> 0:07:54.120 Yeah, I think all of the above could be true 0:07:54.120 --> 0:07:56.440 and at different points of a business cycle. Right now, 0:07:56.520 --> 0:08:00.160 our sense is that we have we're getting back to 0:08:00.200 --> 0:08:01.680 a point where there's going to be a little bit 0:08:01.720 --> 0:08:06.120 more discipline with respect to the ability with all of 0:08:06.160 --> 0:08:08.600 those sorts of things pricing power, and so I think 0:08:08.880 --> 0:08:12.960 we are looking for some disinflationary paths through over time, 0:08:13.320 --> 0:08:15.800 primarily as tariffs have run their course. But we think 0:08:15.840 --> 0:08:17.720 overall we're going to settle back down to a little 0:08:17.720 --> 0:08:19.280 bit more stable inflation. 0:08:21.240 --> 0:08:24.680 Stay with us multiple imberg surveillance coming up after this. 0:08:34.160 --> 0:08:37.200 Hanata Treys of Beta Partners writing, the sixty day extension 0:08:37.200 --> 0:08:40.480 of the ceasefire with Iran is the last best chance 0:08:40.559 --> 0:08:44.480 for quote stimulus from Washington before the election. Henrita joins 0:08:44.520 --> 0:08:46.720 us now a more skeptical take, but this is what 0:08:46.760 --> 0:08:48.280 a lot of people are looking at in terms of 0:08:48.280 --> 0:08:52.000 the political backdrop and how that's influencing when this decision 0:08:52.080 --> 0:08:55.160 was being made. Why do you say the last chance 0:08:55.160 --> 0:08:55.880 at stimulus. 0:08:56.160 --> 0:08:58.800 Yeah, First of all, investors are really looking for the 0:08:58.840 --> 0:09:01.520 president to do something to use the consumer before the election. 0:09:01.640 --> 0:09:03.640 I get that question. A lot people are thinking outside 0:09:03.640 --> 0:09:05.840 the back. So we're going to get a payroll tax holiday, 0:09:06.080 --> 0:09:09.640 we're going to get gas tax suspension. And Congress left 0:09:09.679 --> 0:09:12.760 town last week and they're not coming back until the 0:09:12.800 --> 0:09:16.280 twenty third. There are, by my count, sixteen legislative days 0:09:16.280 --> 0:09:19.960 between now and the August recess, and effectively we're then 0:09:20.040 --> 0:09:22.440 in the end of September. So if there's anything that's 0:09:22.440 --> 0:09:24.280 going to happen. We've run out of time for a 0:09:24.320 --> 0:09:28.360 reconciliation bill. There is no bipartisanship to be had, as 0:09:28.400 --> 0:09:30.480 I'm sure y'all are very aware, and so if you 0:09:30.520 --> 0:09:32.800 were going to do any kind of stimulus, it needed 0:09:32.840 --> 0:09:35.920 to be in a third reconciliation bill, and Senator McConnell 0:09:35.960 --> 0:09:38.640 and Senator Collins kicked that to the curb last. 0:09:38.440 --> 0:09:39.079 Week as well. 0:09:39.120 --> 0:09:41.199 So this is as good as it gets. You know, 0:09:41.200 --> 0:09:43.720 if crude stays down in the eighty dollars range, that's great, 0:09:43.840 --> 0:09:45.720 but this is the most relief that the consumers are 0:09:45.720 --> 0:09:46.559 going to see. Pre election. 0:09:46.760 --> 0:09:49.280 Speaker Mike Johnson also called them Republicans to act on 0:09:49.360 --> 0:09:52.920 social security reform before the midterms. What is going to 0:09:53.000 --> 0:09:56.280 do the midterm election for the Republicans, They's not exactly 0:09:56.280 --> 0:09:56.840 going to work. 0:09:57.160 --> 0:09:58.920 No, that is not even remotely going to work. And 0:09:58.960 --> 0:10:02.240 also you can't touch the Social security via reconciliation, so 0:10:02.280 --> 0:10:04.760 you need to get bipartisanship. And when I talk to 0:10:04.920 --> 0:10:07.920 either Democratic staff on ways and Means or Republican staff 0:10:07.960 --> 0:10:10.520 and Senate Finance, they are actually unified in the view 0:10:10.520 --> 0:10:12.840 that nothing is going to happen. Whether that's housing, whether 0:10:12.840 --> 0:10:16.360 that's crypto Social Security and other reconciliation bill, We've got 0:10:16.640 --> 0:10:17.680 what we're going to get. 0:10:17.840 --> 0:10:21.920 When it comes to the Iran deal, potentially Congress would 0:10:21.960 --> 0:10:24.240 have to okay some of the lifting of these sanctions. 0:10:24.240 --> 0:10:26.400 And this goes back to what happened with the Obama 0:10:26.400 --> 0:10:29.120 era and the JCPOA. Do you see Congress giving a 0:10:29.160 --> 0:10:32.800 green light if this administration were to lift sanctions on Iran? 0:10:33.080 --> 0:10:37.960 That's such a fascinating dynamic. Lindsay Graham is very adamant 0:10:38.000 --> 0:10:40.480 that Congress needs to approve whatever this deal is, but 0:10:40.720 --> 0:10:43.400 all I think of is the USMCA. There's also a 0:10:43.520 --> 0:10:47.680 very adamant view amongst Senator widen Bringing, member of Senate 0:10:47.720 --> 0:10:51.000 Finance that the President needs to go through Congress in 0:10:51.080 --> 0:10:54.320 order to reaffirm the USMCA or even to withdraw, and 0:10:54.360 --> 0:10:57.080 the administration totally disagrees. So when you speak with the 0:10:57.120 --> 0:11:00.000 trade negotiators in Canada or the trade negotiators in Mexico, 0:11:00.160 --> 0:11:03.000 they'll tell you that there's a disagreement between who they 0:11:03.000 --> 0:11:04.880 talked to on the Hill and the White House. And 0:11:04.920 --> 0:11:07.679 I think the takeaway from the last eighteen months or 0:11:07.720 --> 0:11:09.839 whatever is the President is going to do what he 0:11:09.880 --> 0:11:11.800 wants to do, and he's not going to ask Congress 0:11:12.160 --> 0:11:14.760 for their approval of this deal. Yes, you will need 0:11:14.800 --> 0:11:16.920 it for sanctions relief, but they have other ways to 0:11:16.920 --> 0:11:18.880 get around it. You've seen them go to foreign nations 0:11:18.920 --> 0:11:21.440 and say, well, unfree some assets that they're held overseas. 0:11:21.920 --> 0:11:24.240 They'll find a workaround. I do not expect Congress to 0:11:24.240 --> 0:11:25.560 get to yes on any deal. 0:11:25.960 --> 0:11:28.360 This is the reason why I find the attendance of 0:11:28.400 --> 0:11:31.360 the G seven meetings so interesting this year. It isn't 0:11:31.440 --> 0:11:34.680 just the G seven leaders, it is also Middle Eastern 0:11:34.760 --> 0:11:37.000 leaders that want to have influence over this deal in 0:11:37.040 --> 0:11:40.000 certain capacities. And it's also the leaders of technology companies, 0:11:40.000 --> 0:11:43.280 including Anthropic, that are discussing some of these issues that 0:11:43.320 --> 0:11:45.439 have been circulating to the four With all of the 0:11:45.559 --> 0:11:48.240 leaders who are going to be in those rooms, what 0:11:48.280 --> 0:11:51.400 do you make of the recent crackdown on Anthropic in 0:11:51.440 --> 0:11:54.679 particular over in the UK on social media and the 0:11:54.679 --> 0:11:56.960 fact that these leaders are going to be in that 0:11:57.080 --> 0:11:58.199 room over in France. 0:11:58.360 --> 0:12:01.120 Well, it's just another opportunity for US, the EU, and 0:12:01.440 --> 0:12:04.120 NATO nations to have a completely different view of how 0:12:04.160 --> 0:12:06.960 to tax United States tech companies, how to regulate United 0:12:06.960 --> 0:12:09.520 States tech companies what they can have access to or not. 0:12:10.040 --> 0:12:11.480 And I think it kind of gets to the point 0:12:11.520 --> 0:12:13.679 you were making earlier Amory, which is they get a 0:12:13.800 --> 0:12:17.040 say here, you're not doing this in a vacuum. The 0:12:17.080 --> 0:12:19.679 EU nations, NATO nations, they don't want to communicate with 0:12:19.960 --> 0:12:22.160 Iran and have the straight be closed and have to 0:12:22.200 --> 0:12:24.040 coordinate to get to the strait of hormus. And that 0:12:24.160 --> 0:12:27.040 is what the United States has created. And with anthropic 0:12:27.160 --> 0:12:30.040 and tech issues as well, these are parts of all 0:12:30.080 --> 0:12:33.640 the trade agreements as well, whether there's taxation possibilities and 0:12:34.040 --> 0:12:36.640 that puts tariffs back front and center, and of course 0:12:36.800 --> 0:12:39.160 un July twenty third, we need to have that whole 0:12:39.160 --> 0:12:40.599 conversation all over again. 0:12:40.559 --> 0:12:42.800 Specifically with anthropic Do you think this is the first 0:12:42.800 --> 0:12:46.520 salvo in a true crackdown or a true enforcement push 0:12:46.679 --> 0:12:49.040 when it comes to the AI build out from President 0:12:49.080 --> 0:12:50.160 Trump in this administration. 0:12:50.440 --> 0:12:52.320 Yeah, I think we're just at the very start of 0:12:52.360 --> 0:12:55.080 AI regulation right now. The way I think about it 0:12:55.120 --> 0:12:58.480 is pre election and post going between now and November three, 0:12:58.920 --> 0:13:02.240 the United States public and therefore the political parties are 0:13:02.280 --> 0:13:05.680 just going to talk about affordability immediately. Thereafter all the 0:13:05.720 --> 0:13:08.240 new surge of lawmakers, of which there are sixty three. 0:13:08.320 --> 0:13:11.320 I think they are AI focused. They are regulation focused. 0:13:11.320 --> 0:13:13.200 They're going to start with the consumer and children and 0:13:13.320 --> 0:13:16.720 use that to carry a much heavier regulatory weight that 0:13:16.760 --> 0:13:18.520 I think will be the topic of the twenty twenty 0:13:18.559 --> 0:13:19.040 eight election. 0:13:19.200 --> 0:13:22.520 Were you surprised on the export controls on anthropic that 0:13:22.600 --> 0:13:24.959 we had over the weekend, Given the fact that this administration, 0:13:25.040 --> 0:13:28.720 for the most part, wanted to let AI companies have 0:13:28.920 --> 0:13:32.320 intense competition and really let the sector rip. 0:13:32.559 --> 0:13:35.000 It seems very extreme. I know that the industry is 0:13:35.000 --> 0:13:37.720 treating it's very extreme. When you have those late night, 0:13:37.880 --> 0:13:41.480 very muted details and no leaks, that's how you know. 0:13:41.600 --> 0:13:44.080 I think that something very serious is going on. But 0:13:44.120 --> 0:13:45.720 Congress is going to want a way in there. They 0:13:45.760 --> 0:13:47.840 will not at all this summer in pre election, but 0:13:47.840 --> 0:13:49.480 I think as soon as we get to November fourth, 0:13:49.840 --> 0:13:51.480 they're going to want all the information there. 0:13:52.600 --> 0:13:56.040 Stay with us. Multilemberg Savannah's coming up off to this. 0:14:05.559 --> 0:14:08.360 Liz Thomas is so far writing this. We are still 0:14:08.360 --> 0:14:12.080 in a bull market. Investors are still hungry for growth opportunities, 0:14:12.120 --> 0:14:14.840 and companies are still willing to spend to create it. 0:14:15.160 --> 0:14:18.559 Rotations can be healthy, but they are rarely smooth. Liz 0:14:18.640 --> 0:14:20.840 joins us. Now for more, Liz, great to see you, 0:14:20.920 --> 0:14:23.560 Thank you for being with us. Let's start with the 0:14:23.640 --> 0:14:27.080 concept of lower oil prices and whether that portends some 0:14:27.160 --> 0:14:29.840 sort of rotation into the areas that haven't been gaining 0:14:29.960 --> 0:14:33.440 i e. Everything other than tech, or whether this really 0:14:33.480 --> 0:14:36.280 just causes people to double down on the AI trade. 0:14:37.520 --> 0:14:40.320 Well, I think it supports the rotation that we started 0:14:40.320 --> 0:14:42.920 to see on or around June second, when we started 0:14:42.920 --> 0:14:46.240 to see the pullback in many of those big tech sectors, 0:14:46.560 --> 0:14:49.200 semiconductors in particular, and a lot of the stocks that 0:14:49.240 --> 0:14:51.680 had done so well in the three to four weeks 0:14:51.760 --> 0:14:55.080 leading up to that point. So I think lower oil 0:14:55.120 --> 0:15:00.720 prices and lower inflation expectations with emphasis on the wordecations, 0:15:01.480 --> 0:15:04.960 is going to fuel hopefully more of a rotation into 0:15:05.000 --> 0:15:09.040 some other places. That being said, obviously, the SpaceX IPO 0:15:09.240 --> 0:15:11.560 and the excitement that we saw around at, the hype 0:15:11.560 --> 0:15:13.560 that we saw around it, and frankly the success of 0:15:13.600 --> 0:15:17.240 it on Friday is driving a lot of a rebound 0:15:17.320 --> 0:15:20.640 in tech stocks today and what we'll probably see for 0:15:20.800 --> 0:15:23.600 the remainder of the week, barring any big surprises from 0:15:23.640 --> 0:15:24.360 the Federal Reserve. 0:15:24.440 --> 0:15:27.000 Lis, are you surprised that we aren't seeing a greater 0:15:27.160 --> 0:15:29.680 rally on the heels of the truce that was announced 0:15:29.720 --> 0:15:30.800 between Aroun in the US. 0:15:32.120 --> 0:15:34.240 Well, I don't think we've really had a chance yet. 0:15:34.320 --> 0:15:37.040 So it's possible that once the market opens today and 0:15:37.080 --> 0:15:40.920 if we get confirmation that this will actually reopen, the 0:15:40.920 --> 0:15:42.720 strait of horror moves because we still have to wait 0:15:42.760 --> 0:15:44.800 a few days to see that that's going to happen. 0:15:45.200 --> 0:15:47.120 I think towards the end of this week and even 0:15:47.200 --> 0:15:49.960 leading up to it, if things continue to fall in place, 0:15:50.280 --> 0:15:52.720 we will see relief in certain areas that have been 0:15:52.840 --> 0:15:56.400 struck by inflation fears, and we'll probably start to hear 0:15:56.520 --> 0:16:01.120 commentary about businesses being less concerned about inflation. But I 0:16:01.120 --> 0:16:02.720 want to make a point that I alluded to in 0:16:02.760 --> 0:16:05.760 the first statement, is that the Federal Reserve is concerned 0:16:05.760 --> 0:16:09.400 with inflation expectations. Yes, of course they look at the 0:16:09.480 --> 0:16:12.360 data as it's reported, which is backward looking, but they 0:16:12.360 --> 0:16:15.400 are also very concerned with expectations and making sure that 0:16:15.440 --> 0:16:20.280 those expectations remain anchored. So oil prices coming down certainly 0:16:20.320 --> 0:16:23.560 helps that cause and makes Kevin Worsh's job on Wednesday, 0:16:23.680 --> 0:16:27.440 slightly easier than it was without this piece deal. 0:16:27.680 --> 0:16:29.520 Yeah, it brings down the temperature just a little bit. 0:16:29.560 --> 0:16:31.680 At the same time, MRSK is saying at this stage 0:16:31.760 --> 0:16:35.680 no change is to their operations. Then the announced agreement 0:16:35.760 --> 0:16:38.800 is welcome, but they need to wait before they start 0:16:38.920 --> 0:16:42.480 moving some of these vessels through. What is going to 0:16:42.520 --> 0:16:45.880 be for you, the most important aspect of this deal 0:16:46.000 --> 0:16:49.400 to learn and you think potentially could be very bullish 0:16:49.440 --> 0:16:50.000 for the market. 0:16:51.400 --> 0:16:53.600 Well, when you look at what's most important, I think 0:16:53.640 --> 0:16:56.120 the obvious answer here is that the Strait is reopened, 0:16:56.160 --> 0:16:59.160 that oil starts to move closer to a volume that 0:16:59.240 --> 0:17:01.600 it was pre war. Yes, there have been some more 0:17:01.640 --> 0:17:04.639 barrels moving through the strait, but not nearly what the 0:17:04.640 --> 0:17:08.200 world needs. And there have been now fifteen weeks of 0:17:08.240 --> 0:17:12.560 an oil supplied disruption. It doesn't necessarily start flowing and 0:17:12.600 --> 0:17:15.880 reach its final destination very quickly. So that's why I'm 0:17:15.920 --> 0:17:18.400 sort of hedging the commentary because it's going to take 0:17:18.440 --> 0:17:21.720 a while for that supply to come back online, and 0:17:21.800 --> 0:17:25.760 there will still undoubtedly be some disruption in prices, some 0:17:25.920 --> 0:17:30.280 disruption in operations for certain businesses. MRSK being an example 0:17:30.320 --> 0:17:32.600 of a business that might be disrupted by that, at 0:17:32.680 --> 0:17:36.560 least in a short term period. So I think companies 0:17:36.600 --> 0:17:40.040 are being careful to hedge their commentary as well and 0:17:40.080 --> 0:17:42.919 make sure that they're allowing for what still could last 0:17:42.960 --> 0:17:45.880 as a price disruption for a couple months to come. 0:17:46.119 --> 0:17:49.280 As the market though, starts to put this behind behind us, 0:17:49.320 --> 0:17:51.360 and they almost have been for a few weeks now, 0:17:51.520 --> 0:17:53.399 what's kind of the biggest risk for you going to 0:17:53.520 --> 0:17:53.960 your end? 0:17:55.600 --> 0:17:58.440 The biggest risk here is that we hear some sort 0:17:58.520 --> 0:18:02.520 of commentary from tech companies that they're slowing down capex. 0:18:02.600 --> 0:18:06.000 I don't see that coming as a likely scenario. But 0:18:06.400 --> 0:18:09.679 regardless of a rotation in the market and cyclicality that 0:18:09.760 --> 0:18:13.600 might return, this market is still very dependent on the 0:18:13.680 --> 0:18:17.159 AI trade, and particularly now at this phase, on the 0:18:17.200 --> 0:18:21.520 AI trade proving productivity, proving earnings, and proving that it 0:18:21.560 --> 0:18:25.880 can start to reach into other sectors and increase productivity there. 0:18:26.040 --> 0:18:29.000 So not just benefiting the tech sector, and that's one 0:18:29.040 --> 0:18:31.920 of the reasons I've been talking about healthcare this still 0:18:31.960 --> 0:18:35.080 being a good entry point. Healthcare has seen decent return 0:18:35.200 --> 0:18:37.520 since that June second time that I talked about where 0:18:37.680 --> 0:18:40.600 technology started to pull back, But I do think healthcare 0:18:40.640 --> 0:18:43.000 can do well through the end of the year looking 0:18:43.080 --> 0:18:46.399 forward to that productivity gain, and it serves as a 0:18:46.440 --> 0:18:50.080 defensive growth sector, particularly in a time when midterm elections 0:18:50.080 --> 0:18:50.680 are coming up. 0:18:50.880 --> 0:18:52.800 Liz, how concerned would you be if there was a 0:18:52.800 --> 0:18:55.000 hawk as shift at the Fed this week on Wednesday, 0:18:55.080 --> 0:18:57.800 despite the expectation that Kevin Warrish will try to take 0:18:58.119 --> 0:19:01.000 the most devish approach to maybe each dropping the easing bias. 0:19:02.240 --> 0:19:05.439 Well, with one hike already priced into the market, I 0:19:05.480 --> 0:19:07.440 don't think that there would be too much of an 0:19:07.440 --> 0:19:10.400 overreaction in the market. I think that the Fed will 0:19:10.440 --> 0:19:14.160 do what they can to leave flexibility in the statements, 0:19:14.240 --> 0:19:17.200 much like Jerome Powell did on different occasions, trying to 0:19:17.320 --> 0:19:20.520 leave the door open to we will react however we 0:19:20.600 --> 0:19:23.240 need to given the data. I think there's actually a 0:19:23.320 --> 0:19:26.119 higher chance that Kevin Walsh has already been expected to 0:19:26.160 --> 0:19:29.480 say something hawkish, but he comes out and actually says 0:19:29.520 --> 0:19:32.000 a few things that are more dubvish. The other thing 0:19:32.040 --> 0:19:34.560