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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moven news.

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Speaker 2: Find the Bloomberg Markets podcast called Apple Podcasts or wherever

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Speaker 2: you listen to podcasts, and at Bloomberg dot com slash podcast.

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Speaker 3: All right, so let's see if it matters to Fill Orlando,

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Speaker 3: chief Equity strategis of It Federated Hermez joining us to

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Speaker 3: talk about that. Feel so good to have you here

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Speaker 3: on Bloomberg with Billy and myself. What is it that

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Speaker 3: you find interesting and what are you seeing in terms

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Speaker 3: of trends and flows right now?

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Speaker 2: First of all, thank you very much for having me

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Speaker 2: back on. We were expecting that the powerful rally that we

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Speaker 2: saw in the equity market, largely driven by that you know,

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Speaker 2: relatively narrow group of eight technology stocks in the first

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Speaker 2: seven months of the year, that there was going to

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Speaker 2: be a reversion of the mean. And you know, certainly

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Speaker 2: the August, September, October time frame is as good as

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Speaker 2: any for that to occur, and so we thought the

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Speaker 2: pullback might take the s and p back down about

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Speaker 2: the forty two hundred level, or so let's call it

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Speaker 2: a ten twelve percent correction. A good chunk of that

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Speaker 2: has happened, and certainly the backup and interest rates you know,

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Speaker 2: benchmark tens going from you know, three and a half

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Speaker 2: percent up into the four and a half percent neighborhood

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Speaker 2: here over the last couple of months has facilitated that.

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Speaker 2: The thing that I find really interesting when you talk

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Speaker 2: about flows, and I'm going to throw in a little

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Speaker 2: bit of amateur technical analysis here, is that our bond

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Speaker 2: guys tell us that once the benchmark tens broke about

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Speaker 2: the four thirty five level or thereabouts on yield, there

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Speaker 2: really wasn't a lot of overhead resistance until you get

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Speaker 2: up to a five handle. So it's interesting that you've,

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Speaker 2: you know, you hear a lot of the you know

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Speaker 2: experts and well known people in recent days talking about

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Speaker 2: the fact that they wouldn't be surprised to see treasuries

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Speaker 2: at five percent.

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Speaker 4: For six or seven or well.

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Speaker 2: I don't know that I'm willing to step in front

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Speaker 2: of that freight train just yet, but certainly it's interesting

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Speaker 2: that our duration committee is not adding to duration lengthening

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Speaker 2: duration here, you know, with this big move up into

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Speaker 2: the four and a half percent neighborhood, I sort of

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Speaker 2: think they they're sort of seeing that a five percent

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Speaker 2: number is reality, and let's let's cool our jets a

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Speaker 2: little bit until we get a little bit better feel

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Speaker 2: for what's going on.

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Speaker 5: Yeah, And so, looking at some of the major averages

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Speaker 5: so far this year, the equal weight to S and

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Speaker 5: P five hundred is now actually read on the year.

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Speaker 5: This is obviously the SMP still up eleven percent.

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Speaker 6: Where are you putting money to work? And what do

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Speaker 6: you make of that?

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Speaker 5: Just given the magnificent seven for better or worse, is

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Speaker 5: still holding major averages higher.

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Speaker 2: Well, if you look at the perform of the equity

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Speaker 2: market over the course of the last couple of months

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Speaker 2: since this correction started, the growthier technology oriented names disproportionately

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Speaker 2: are the ones that are giving up some of the games,

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Speaker 2: and that makes perfect sense. The areas that we like,

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Speaker 2: that we've liked have been the areas that were left

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Speaker 2: for dead in the first seven months of the year.

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Speaker 2: Domestic large cap value, smaller cap names, international names, stocks

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Speaker 2: that have lower valuation profiles, higher dividend yield support and

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Speaker 2: we see that rotation. So energy, for example, which has

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Speaker 2: been one of our favorite categories. You couldn't give that

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Speaker 2: stuff away in the first six months of the year.

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Speaker 2: Now everyone loves energy. Well, you know, crude oil has

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Speaker 2: also gone from the mid sixties into the low nineties

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Speaker 2: over the last three or four months. Again based upon

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Speaker 2: you know, technical analysis or momentum or whatever. Some folks

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Speaker 2: are now saying, well, you know, crew's going to get

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Speaker 2: to one hundred. The fundamentals Back in June, when crude

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Speaker 2: was sitting at sixty five dollars a barrel told us

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Speaker 2: that we could get to eighty or ninety. We're there

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Speaker 2: probably earlier than we thought. And now we're starting to

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Speaker 2: get some momentum that may take crude back up to park.

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Speaker 4: Yeah.

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Speaker 3: It's kind of interesting, right, and we do talk about

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Speaker 3: that certainly at Bloomberg in terms of the energy price impact. Hey, Phil,

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Speaker 3: thank you so much, really appreciate it. Fill Orlando Chief

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Speaker 3: Acrety strategist of it Federated Urmes joining us with his

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Speaker 3: market out look. I'm Carol Masser along with Bailey Lipshelt.

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Speaker 3: You are listening and watching Bloomberg Markets on this Monday,

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Speaker 3: and this is Bloomberg Radio.

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Speaker 7: You're listening to the Team Ken's our line program Bloomberg

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Speaker 7: Markets weekdays at ten am Eastern on Bloomberg dot Com,

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Speaker 7: the iHeartRadio app and the Bloomberg Business App, or listen

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Speaker 7: on demand wherever you get your podcasts.

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Speaker 8: Nancy Curtin and partner of Global C the head of

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Speaker 8: the investment advisory at out the TEDAM and Global, Thanks

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Speaker 8: for being with us today.

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Speaker 9: Get it.

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Speaker 8: You heard the Jamie Downing there mentioned what I did.

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Speaker 8: They could handle seven to eight percent rates the ten

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Speaker 8: year at four sixty five. That would appear to be

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Speaker 8: at least partially in the driver's sea for equities. What

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Speaker 8: is your outlook for rates and the impact on the

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Speaker 8: risk assets?

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Speaker 10: Well, look, you know, near term we're a bit cautious here,

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Speaker 10: and we said to clients at the end of July

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Speaker 10: that trees don't grow into the skies. You know, after

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Speaker 10: twenty percent total return of the S and P five hundred,

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Speaker 10: we needed to pull back a correction of consolidation. Okay,

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Speaker 10: but if we look at the fundamentals, the reason that

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Speaker 10: we have near term caution is what I call sort

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Speaker 10: of a litany of triple loows. You know, the first

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Speaker 10: is the higher rates that Jamie mentioned and that you've

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Speaker 10: mentioned in your program. These higher rates are coming at

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Speaker 10: the long end that sets the cost of capital for companies.

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Speaker 10: So that's going higher. In part maybe it's about a

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Speaker 10: long term view on structural inflation. It's also about a

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Speaker 10: rising term premium. I think investors getting to grips with

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Speaker 10: the size of the fiscal deficits. So you know, higher

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Speaker 10: interest costs for companies and borrowers. You also have higher

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Speaker 10: oil and that's a tax on the consumer. And finally

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Speaker 10: you have a higher dollar and dollars up about seven

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Speaker 10: percent from the July low. So I put those three

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Speaker 10: things together. I've got a higher cost of capital, I've

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Speaker 10: got a tax on the consumer, and I've got global tightening.

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Speaker 10: So we do expect growth to slow. Growth to slow

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Speaker 10: in the United States in particular, but by the way,

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Speaker 10: that's no bad thing. The third quart of the United

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Speaker 10: States growth has been accelerating here. Whether the number comes

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Speaker 10: in at three percent or three and a half or

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Speaker 10: two point six, it's going to be higher than the

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Speaker 10: second quarter. And we do think it's important that growth slows,

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Speaker 10: and that's part of what has to happen here to.

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Speaker 5: Down inflation and Nancy. All we talk about seemingly is

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Speaker 5: the Magnificent seven driving major indexes higher. When we look

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Speaker 5: at some of the steam coming off of those big

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Speaker 5: technology companies, where are you looking to put money to

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Speaker 5: work in terms of growth sectors, growth assets, whether it's

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Speaker 5: in the US or outside.

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Speaker 10: So, first of all, as I said, a notive caution

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Speaker 10: here near term, although I wouldn't be at all surprised

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Speaker 10: to see a year end rally. But let's go back

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Speaker 10: to the fundamentals that I just mentioned. We need to

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Speaker 10: get inflation lower. We think it will grind lower as

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Speaker 10: we head into twenty twenty four. And remember, for our

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Speaker 10: clients who are long term investors, we're not trying to

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Speaker 10: trade in trade out of the market anyway. That's fools erin.

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Speaker 10: As you know, you missed the best days and markets,

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Speaker 10: you miss Allian's share of the return. But as we

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Speaker 10: look forward to twenty twenty four, we think there's a

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Speaker 10: possibility of a soft landing, which is to say, central

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Speaker 10: banks are able to get inflation low enough that they

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Speaker 10: can dial back on this tightening cycle, ease a bit

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Speaker 10: of financial conditions, and that can lead the groundwork for

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Speaker 10: a bit more of a cyclical recovery, other parts of

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Speaker 10: the market and economy that haven't participated doing better. And

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Speaker 10: so yes, while we have US large cap everyone does

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Speaker 10: know the S and P five hundred and the Magnificent

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Speaker 10: seven are such a large component of the index. But

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Speaker 10: we also have diversification and things like MidCap rest of

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Speaker 10: world areas that trade at a thirty to forty percent

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Speaker 10: discount to US large cap, and we think these are

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Speaker 10: the areas if we can get a cyclical recovery next year.

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Speaker 10: We see market breadth widening in these the areas in

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Speaker 10: particular that will participate and as they said, trade at

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Speaker 10: much more attractive valuations.

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Speaker 8: Nancy, welcome to the fourth quarter, the end of the

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Speaker 8: earnings recession. I mean, comparison's going to be a lot

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Speaker 8: easier going forward, right.

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Speaker 10: Well, not only that, but look, as I just mentioned,

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Speaker 10: the third quarter growth has been pretty strong here, so

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Speaker 10: we wouldn't be at all surprised to see third quarter

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Speaker 10: earnings come in above expectations. And by the way, the

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Speaker 10: people that have been wrong have been the top down

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Speaker 10: and the strategists. The people that have been right have

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Speaker 10: been largely the bottom up analysts, And if you look

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Speaker 10: at analyst expectations, you know, and if you just give

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Speaker 10: their price gain times the index weight, you know. According

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Speaker 10: to factset, most analysts bottom up are expecting a pretty

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Speaker 10: decent recovery over the next year. Now, critical to earnings

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Speaker 10: are critical to market is that we actually see some

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Speaker 10: positive earnings growth. That's our view that we'll get it.

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Speaker 10: Whether we get to forty six to forty next year

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Speaker 10: or something less or more than that remains to be seen.

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Speaker 10: But positive earnings growth is absolutely critical here because markets

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Speaker 10: have moved higher on price, we now need earnings not

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Speaker 10: just to beat, you know, do better, less downside, less

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Speaker 10: negative actually produce that positive earnings growth. But that is

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Speaker 10: our view. Again, it remains to be seen, and like

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Speaker 10: everybody else, will be watching the data.

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Speaker 5: And Nancy soft landing, is it possible? What are you

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Speaker 5: expecting in terms of where the economy is going?

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Speaker 10: So look, what is the definition of a soft line.

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Speaker 10: It has like no formal economic definition, but basically it

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Speaker 10: means if plation can come down without huge damage to

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Speaker 10: the economy and out huge damage to the labor market.

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Speaker 10: And we think that remains a possibility. Nobody can be

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Speaker 10: sure here, but that is our view, and part of

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Speaker 10: it is by the way, is we do think economic

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Speaker 10: growth will slow. We think it needs to slow from

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Speaker 10: the rather toward pace of the third quarter. But actually

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Speaker 10: there are other parts of GDP that are kicking in here.

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Speaker 10: KAPEC spend in the second quarter was up seven and

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Speaker 10: a half percent. Trade is a positive contribution to GDP

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Speaker 10: growth because we're bringing production back home again and that

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Speaker 10: means where we're exporting more than we're importing. We think

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Speaker 10: the government will remain broadly stimulative, just given the programs

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Speaker 10: that have passed already. So while the consumer was slow,

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Speaker 10: we think there are other parts of the economy that

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Speaker 10: will kick in, and we do think there's a likely

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Speaker 10: possible soft landing. Now they're very unusual in history. We'll

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Speaker 10: only seem like two since the nineteen seventies. But both

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Speaker 10: of those have also coincided with an increase in cap

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Speaker 10: x span that I just mentioned and also innovation.

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Speaker 8: Nancy, always a pleasure, appreciate it. Thanks for being with

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Speaker 8: us on the program today. Nancy Kurtin, the chief investment

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Speaker 8: Officer out the health of TETAM and global.

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Speaker 7: You're listening to the tape. Ken's Are Live program Bloomberg

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Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the

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Speaker 9: The Bloomberg Business App.

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Speaker 7: flagship New York station. Just say Alexa, play Bloomberg eleven thirty.

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Speaker 8: Let's say hello to our next guest. We've got to

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Speaker 8: get them seated first, and the higher edg chat. And

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Speaker 8: we're also welcoming Bloomberg stand at Lauren in on this discussion.

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Speaker 8: Our resident education expert here at Bloomberg, Reginald Derosius. As

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Speaker 8: the president of Rice University. You know, I want to

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Speaker 8: start out it was over the weekend that the student

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Speaker 8: loan payments began. I wanted to get your take on

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Speaker 8: that first off, after the pandemic induced delay that was

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Speaker 8: initiated by the Biden administration.

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Speaker 9: Yeah.

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Speaker 11: So for Rice, as I mentioned a few times, we're

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Speaker 11: no loan institution. We meet full need, and so at

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Speaker 11: least from our perspective, we really work hard to make

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Speaker 11: sure that we provide a full financial need for our

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Speaker 11: students where need blind. As an admissions organization and so

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Speaker 11: from our student body, it's not as much of an issue.

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Speaker 11: I know it's an issue for many students. Across the

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Speaker 11: country the issue of the loan repayment.

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Speaker 8: Janet Lauren joining us in studio or education expert. I

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Speaker 8: want to bring you into the discussion.

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Speaker 12: So we were talking a little bit earlier about graduate loans.

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Speaker 12: Later this year, perhaps next year, you're going to see

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Speaker 12: the student loan portfolio of new loans are going to

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Speaker 12: be mostly for graduate students instead of undergrads.

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Speaker 6: Can you talk a little.

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Speaker 12: Bit about graduate education and programs and how those are funded,

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Speaker 12: especially by loans, and how some of your students, how

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Speaker 12: are they doing in terms of income.

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Speaker 11: Yeah, So we have a number of graduate programs at RICE,

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Speaker 11: and particularly in the business and in the engineering side

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Speaker 11: of things, data science, engineering and then business. One of

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Speaker 11: the things we focused on recently is making sure in

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Speaker 11: addition to the full time programs where students do have

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Speaker 11: to stop work and in some cases take out a loan,

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Speaker 11: we have programs now that are part time, that are online.

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Speaker 11: We have a fifth year of the online MBA at RICE.

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Speaker 11: Online program popular in large part to allow the flexibility

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Speaker 11: for people to be able to continue to work while

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Speaker 11: they do these programs online on their own time. And

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Speaker 11: that's really helped with the affordability piece. And we have

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Speaker 11: that both on the engineering and the management side and

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Speaker 11: business side, and in both cases these students come out

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Speaker 11: doing very well financially.

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Speaker 12: And he was just telling us about a new program

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Speaker 12: that was custom designed for students to work at Chevron

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Speaker 12: where the employer pays. That's certainly the way to go

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Speaker 12: if you can get someone else to pay for your

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Speaker 12: master's degree. Can you tell us a little.

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Speaker 4: Bit about that.

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Speaker 11: Absolutely. So this was a program that we designed in

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Speaker 11: concert with Chevron where they were very interested in taking

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Speaker 11: their employees who didn't have a background in data science

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Speaker 11: but needed to understand more about data science and AI.

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Speaker 11: And we take around twenty five people per year through

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Speaker 11: that program. We've crafted it specifically for people in that industry,

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Speaker 11: and we really provide them with the skill sets to

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Speaker 11: be data science within the context of what they're doing

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Speaker 11: at Chevron. And we're looking to do more of that

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Speaker 11: with the various indus trees that are in the city

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Speaker 11: of Houston.

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Speaker 8: You know, I got to answer about artificial intelligence. How

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Speaker 8: is that impacting higher education? And I don't mean just

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Speaker 8: like you know, looking at term papers and like, oh

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Speaker 8: my god, where did this come from? Because you didn't

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Speaker 8: write this kid right.

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Speaker 11: So in many ways, I mean there's a research piece

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Speaker 11: and then there's education piece. The research pieces, it's impacting

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Speaker 11: just nearly every field that's there. Where you happen to

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Speaker 11: be across the street from the largest medical center in

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Speaker 11: the world, the Texas Medical Center, with many institutions and

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Speaker 11: medical schools there, and their number one interest in working

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Speaker 11: with RICE is around AI and data science because they

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Speaker 11: know it's rapidly transforming that those industries into healthcare.

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Speaker 6: Similarly, the energy.

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Speaker 11: Industry is being transformed through AI and data science, and

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Speaker 11: so we're forming a lot more partnerships and we're seeing

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Speaker 11: how research in that space is really transforming nearly every industry.

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Speaker 11: And so we're really focused on making sure we build

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Speaker 11: our faculty with that expertise so that we can be

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Speaker 11: a major player in some of the research that's taken

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Speaker 11: place in the city of Houston and around the world.

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Speaker 11: On the education side, clearly we hatch YOUTP and other

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Speaker 11: tools like that. Our approach has been to understand that

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Speaker 11: it's here and make sure that we craft our assignments

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Speaker 11: and our exams with the understanding that students have access

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Speaker 11: to this. And now we're even asking our faculty to

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Speaker 11: on their syllabus, to ask the students whether or not

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Speaker 11: they're using it for then assignment, just to understand whether

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Speaker 11: or not they're they're going to use it and make

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Speaker 11: sure you keep that in mind as you're reviewing the assignment.

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Speaker 5: And given the shift that we've seen with a number

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Speaker 5: of companies moving to Texas, how does that position or

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Speaker 5: better position RICE graduates to be better set up for

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Speaker 5: careers after college.

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Speaker 11: Very well, both at the undergraduate level, We've always worked

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Speaker 11: hard to prepare our students to be able to work

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Speaker 11: in a variety of industries. Replace our students very well.

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Speaker 11: Our students are very well regarded. We have a robust,

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Speaker 11: rigorous undergraduate education that's a good mix of both technical

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Speaker 11: training as well as a broad based liberal arts education.

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Speaker 11: So we've done a great job at the undergraduate level

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Speaker 11: preparing our students. What was mentioning earlier, Janet was mentioning

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Speaker 11: is one of the things we're focused on now is

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Speaker 11: how do we grow more graduate programs that help with

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Speaker 11: the upskilling that's needed for all the industries in the

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Speaker 11: city of Houston. And that's why we're growing more of

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Speaker 11: these professional master's programs and engineering in the Business School

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Speaker 11: and other areas where we know there's a major need

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Speaker 11: in the city of Houston.

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Speaker 8: Are there enough student visas to go around? And I

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Speaker 8: wonder if you could weigh in on that.

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Speaker 11: Yeah, we particularly at the gradual level, in particular at

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Speaker 11: the doctoral level, many of our doctoral students are are

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Speaker 11: foreign students, and we've been challenged. I think many universities

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Speaker 11: are challenged every year with the ability to get students

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Speaker 11: in the timely fashion, getting their visas in the timely fashion,

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Speaker 11: to be able to come here and do their doctoral work.

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Speaker 11: It's mostly really at the doctoral level. We have a

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Speaker 11: large number of foreign students. About half of our PhD

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Speaker 11: students are from outside the US, and that's that's something

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Speaker 11: that's been a challenge for us, and I think many

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Speaker 11: of my peer peer institutions.

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Speaker 8: Let me just reintroduce everyone here, Reginald Derocious, the president

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Speaker 8: of Rice the University, discussing higher education, among other things.

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Speaker 8: Janet Lauren from Bloomberg News or education expert. I'm John

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Speaker 8: Tucker along with Bailly Lipschultz. You want to weigh in again.

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Speaker 12: Yeah, we were talking a little bit when we were

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Speaker 12: meeting with reporters and editors about attracting faculty you're growing

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Speaker 12: not only your student body but your faculty. Can you talk,

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Speaker 12: Is it a challenge to get people to want to

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Speaker 12: move to Texas, especially if they're coming from the coasts.

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Speaker 11: So yeah, so we are growing. We're adding two hundred

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Speaker 11: faculty for university of all size. It's pretty sign significant.

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Speaker 11: We have about seven hundred faculty currently at Rice, and

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Speaker 11: we're growing undergraduate student body by twenty percent. You know,

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Speaker 11: we find that if we can get people to Texas,

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Speaker 11: we can get people to Houston and they can see

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Speaker 11: how cosmopolitan it is, how diverse it is, the rich culture, museum,

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Speaker 11: the museum, culture and music culture that we do well

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Speaker 11: in recruiting people, and so we've been able to so

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Speaker 11: far to exceptionally talented group of faculty to Rice. We're

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Speaker 11: really pleased with that and we will continue to work hard.

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Speaker 11: The main thing is to get them there. Hopefully not

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Speaker 11: during the summer when it's one hundred and four degrees

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Speaker 11: as it was most of the summer, but we get

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Speaker 11: them a nice time of the year and they really

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Speaker 11: are surprised as to how diverse and cosmopolitan and what

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Speaker 11: a great city it is.

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Speaker 8: The research that you do does that then generate business

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Speaker 8: that the university and the researchers can then capitalize on.

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Speaker 11: Absolutely it does. And one of our big focuses moving

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Speaker 11: forward as a university is helping to accelerate that. And

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Speaker 11: so we've created when I became President and Office of

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Speaker 11: Innovation and Commercialization with the sole purpose of helping our

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Speaker 11: faculty in concert in some cases with industry, to commercialize

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Speaker 11: their research and have new startups in the Houston area.

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Speaker 11: And we have a new innovation district about a mile

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Speaker 11: and a half from campus, is called the Ion District,

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Speaker 11: with the sole purposes around fourteen acres of land right

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Speaker 11: between Rice and downtown, with the sole purpose of industry

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Speaker 11: to create more startups in the high tech area of

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Speaker 11: in Houston.

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Speaker 8: Does any of that conflict and wonder your thoughts on

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Speaker 8: that conflict with the idea behind research in the first place.

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Speaker 6: It doesn't conflict.

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Speaker 11: It's fact it's synergistic. And increasingly now it used to

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Speaker 11: be people recruiting faculty to universities they're really interested in

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Speaker 11: the lab space more importantly in the graduate student quality,

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Speaker 11: but now they also want to know what resources do

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Speaker 11: you have to help them start a business or start

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Speaker 11: a company from their research. It's becoming a part of

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Speaker 11: what universities do on the research side, absolutely, and we

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Speaker 11: want to make sure that we are equipped to help

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Speaker 11: out faculty who have the interest in doing that. Not

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Speaker 11: all disciplines do that, not all faculty have that interest,

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Speaker 11: but those that do, we want to put the infrastructure

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Speaker 11: there for them to be able to do that.

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Speaker 12: And then do you often help them, you know, with

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Speaker 12: patents and then and then licenses. We do companies.

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Speaker 11: We have an entire office that does that and increasingly

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Speaker 11: now we have we've uh, we have some seed funding

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Speaker 11: for them who want for the faculty who want to

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Speaker 11: start a company, just allow them to get off campus,

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Speaker 11: have space somewhere else off campus, because you really can't

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Speaker 11: do that on campus. And we have new seed grant

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Speaker 11: program that allow them to do that.

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Speaker 12: And then if there are innovations that are licensed, the

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Speaker 12: university keep some of that revenue.

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Speaker 6: They do.

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Speaker 11: There's always a split, and sometimes we negotiated abortion goals

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Speaker 11: to the university, a portion goals to the founder of

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Speaker 11: the company and his or her partners, and.

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Speaker 12: That's often coming from government research grants.

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Speaker 11: In some cases it's coming from government grants, in some

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Speaker 11: cases it might be coming from private industry. Grants and

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Speaker 11: there are different contracts depending on where it's coming from.

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Speaker 12: So another potential revenue source.

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Speaker 6: It is, it is.

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Speaker 11: It takes the time sometimes to develop that, but absolutely

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Speaker 11: it is.

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Speaker 12: That comes to mind Lyrica at Northwestern.

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Speaker 11: Erica, Northwest and there are a few of them obviously,

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Speaker 11: Google at Stanford and many others like that.

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Speaker 8: How the el's doing.

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Speaker 11: They're doing well, We're three and two. We had a

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Speaker 11: big win earlier this year against our partner down the street,

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Speaker 11: University Houston, for time in thirteen years that we beat them.

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Speaker 11: And we're excited about being in a new conference, American

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Speaker 11: Athletic Conference.

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Speaker 8: And will you explain to me how this is all working,

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Speaker 8: because it's a complete mystery college sports at this.

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Speaker 9: Point, you know.

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Speaker 8: I mean, if you're in California, you know, on the

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Speaker 8: lacrosse team, you now have to get on a plane

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Speaker 8: to play on the East coast.

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Speaker 6: Or yeah, Syracuse, right, I mean that really.

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Speaker 8: Imporacts a student's ability to then it.

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Speaker 11: Does, No, it does. I think a lot of us

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Speaker 11: are concerned about the conference realignment. My daughter was a

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Speaker 11: student athlete at Rice. She was on a soccer team.

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Speaker 11: She just graduated in May.

441
00:22:31,840 --> 00:22:33,240
Speaker 12: Congratulations, thank you, and I.

442
00:22:33,240 --> 00:22:35,440
Speaker 11: Saw the work, the hard work that she did, traveling

443
00:22:36,320 --> 00:22:38,560
Speaker 11: around the country to play games and coming back late

444
00:22:38,600 --> 00:22:40,320
Speaker 11: at night and having to study for an exam the

445
00:22:40,359 --> 00:22:42,160
Speaker 11: next day. So I think there's a lot of concern

446
00:22:42,200 --> 00:22:46,320
Speaker 11: about the conference realignment. I'm a big proponent of intercollegiate athletics.

447
00:22:46,320 --> 00:22:48,720
Speaker 11: I think it's an important part of a university. I

448
00:22:48,760 --> 00:22:52,359
Speaker 11: think the student athletes at Rice are incredible people to

449
00:22:52,359 --> 00:22:54,600
Speaker 11: be able to balance competing at the highest level with

450
00:22:54,680 --> 00:22:57,800
Speaker 11: the academics produce as leaders, and we will continue to

451
00:22:57,840 --> 00:23:00,520
Speaker 11: support them despite some of the challenges that that we're

452
00:23:00,560 --> 00:23:02,200
Speaker 11: facing right now in the industry.

453
00:23:02,320 --> 00:23:04,840
Speaker 8: That was a fascinating discussion. Good to see you, nice

454
00:23:04,840 --> 00:23:06,439
Speaker 8: to meet you, Thanks for sing thank you to you

455
00:23:06,680 --> 00:23:10,000
Speaker 8: than you appreciate it. And Janet, you too. Reginald de Rosius,

456
00:23:10,040 --> 00:23:14,520
Speaker 8: the President of Rice University and Bloomberg News Higher Education

457
00:23:14,640 --> 00:23:16,240
Speaker 8: reporter Janet Lauren.

458
00:23:17,280 --> 00:23:21,119
Speaker 7: You're listening to the Team Can't Live program Bloomberg Markets

459
00:23:21,200 --> 00:23:24,280
Speaker 7: weekdays at ten am Eastern on Bloomberg dot Com, the

460
00:23:24,359 --> 00:23:27,480
Speaker 7: iHeartRadio app, and the Bloomberg Business App, or listen on

461
00:23:27,560 --> 00:23:29,480
Speaker 7: demand wherever you get your podcast.

462
00:23:31,400 --> 00:23:34,200
Speaker 8: With that in the background. Our next guest, Matt Stuckey

463
00:23:34,200 --> 00:23:39,360
Speaker 8: to senior portfolio manager at Northwestern Mutual with your market

464
00:23:39,400 --> 00:23:42,840
Speaker 8: outlook and expectations to what extent are rates in the

465
00:23:42,880 --> 00:23:47,360
Speaker 8: driver's seat and do you have an adequate explanation for us?

466
00:23:49,200 --> 00:23:51,600
Speaker 13: Yeah, those are all really important points, and we do

467
00:23:51,680 --> 00:23:54,280
Speaker 13: think rates are ultimately going to be the driver of

468
00:23:54,320 --> 00:23:58,720
Speaker 13: the outcome of this FED tidening cycle, which from our perspective,

469
00:23:59,359 --> 00:24:03,320
Speaker 13: is of recession, the timing of which we think is uncertain.

470
00:24:03,560 --> 00:24:07,359
Speaker 13: I think that we've been surprised with resiliency that we've

471
00:24:07,400 --> 00:24:11,120
Speaker 13: seen from the economy throughout twenty twenty three, especially within

472
00:24:11,119 --> 00:24:15,840
Speaker 13: the labor markets. But I think anytime we look at

473
00:24:15,880 --> 00:24:18,960
Speaker 13: FED tightening cycles since World War Two, ten out of

474
00:24:19,000 --> 00:24:22,119
Speaker 13: thirteen of those cycles have resulted in a recession, and

475
00:24:22,200 --> 00:24:25,760
Speaker 13: the three that did not did not end up there

476
00:24:25,800 --> 00:24:29,199
Speaker 13: and resulted in a soft landing. The FED was not

477
00:24:29,320 --> 00:24:33,199
Speaker 13: in inflation hiding mode and they certainly are today. So

478
00:24:33,560 --> 00:24:37,159
Speaker 13: you know, we think the outlook is fairly is fairly

479
00:24:37,280 --> 00:24:41,320
Speaker 13: kind of headed towards you know, the recession camp. However,

480
00:24:41,440 --> 00:24:44,639
Speaker 13: you know, the timing of which is uncertain. So ultimately,

481
00:24:44,800 --> 00:24:48,240
Speaker 13: the tightening of monetary policy conditions in the form of

482
00:24:48,359 --> 00:24:51,040
Speaker 13: rates are likely going to be the driver of the

483
00:24:51,200 --> 00:24:52,480
Speaker 13: en macro result.

484
00:24:52,720 --> 00:24:55,040
Speaker 5: Yeah, but it does feel like we've been talking about

485
00:24:55,080 --> 00:24:58,760
Speaker 5: a potential recession for quite some time. With that call,

486
00:24:58,800 --> 00:25:00,920
Speaker 5: I guess, kind of what are we ignoring or what's

487
00:25:00,960 --> 00:25:04,000
Speaker 5: different this time than it had been for really the

488
00:25:04,040 --> 00:25:04,760
Speaker 5: past year.

489
00:25:06,280 --> 00:25:09,280
Speaker 13: Well, I think the big difference is going to be

490
00:25:09,359 --> 00:25:11,320
Speaker 13: just the passage of time, and let me kind of

491
00:25:11,359 --> 00:25:13,879
Speaker 13: explain what that will explain what that means. You know,

492
00:25:13,920 --> 00:25:17,000
Speaker 13: if we look back to twenty twenty, what happened, We

493
00:25:17,119 --> 00:25:21,800
Speaker 13: had such a big refinancing opportunity for individuals as well

494
00:25:21,840 --> 00:25:24,280
Speaker 13: as companies in terms of kind of what the balance

495
00:25:24,320 --> 00:25:28,600
Speaker 13: you look like. Unfortunately that you know, you're you're deferring

496
00:25:28,680 --> 00:25:32,359
Speaker 13: kind of those those larger interest pains out into the future.

497
00:25:32,400 --> 00:25:35,320
Speaker 13: But as companies have to come back and refinance those issues,

498
00:25:36,440 --> 00:25:39,200
Speaker 13: you know, it does start to dig into growth outlooks.

499
00:25:39,280 --> 00:25:41,240
Speaker 13: And I think you're actually seeing a case study on

500
00:25:41,280 --> 00:25:44,479
Speaker 13: this in the utility sector right now. Look at next

501
00:25:44,520 --> 00:25:48,240
Speaker 13: Steir Energy as an example of kind of reducing forward

502
00:25:48,320 --> 00:25:52,000
Speaker 13: growth as a result of the higher interest rate environment.

503
00:25:52,359 --> 00:25:55,160
Speaker 13: It just essentially costs more to fund the projects that

504
00:25:55,200 --> 00:25:57,719
Speaker 13: they need to grow, and you know, that's just a

505
00:25:57,720 --> 00:26:00,240
Speaker 13: case study for what's likely to unfold the higher the

506
00:26:00,280 --> 00:26:02,560
Speaker 13: longer that rate state and it's kind of higher rate environment.

507
00:26:03,640 --> 00:26:06,360
Speaker 8: Is it the defensive shares that we need to focus

508
00:26:06,400 --> 00:26:06,840
Speaker 8: on now?

509
00:26:08,640 --> 00:26:12,280
Speaker 13: Well, ultimately, defensive parts of the market you are going

510
00:26:12,320 --> 00:26:14,720
Speaker 13: to have their time to shine in terms of the

511
00:26:14,760 --> 00:26:18,720
Speaker 13: market cycle. But certainly defensive parts of the market that

512
00:26:18,760 --> 00:26:23,000
Speaker 13: are rate sensitive, like utilities, are feeling the pain right now.

513
00:26:23,720 --> 00:26:26,840
Speaker 5: And I know you called out wages being something you're

514
00:26:26,920 --> 00:26:28,840
Speaker 5: keeping an eye on and think that you know it

515
00:26:28,960 --> 00:26:32,080
Speaker 5: is going to have kind of a higher impact on

516
00:26:32,160 --> 00:26:33,080
Speaker 5: what lies ahead.

517
00:26:33,720 --> 00:26:36,240
Speaker 6: What's the thinking behind that? Why are you focused on wages?

518
00:26:37,840 --> 00:26:40,000
Speaker 13: Well, ultimately we think wages are kind of the last

519
00:26:40,080 --> 00:26:44,080
Speaker 13: kind of standing component of the inflation equation that the

520
00:26:44,080 --> 00:26:47,920
Speaker 13: FED is fighting against. We have a hard time seeing

521
00:26:47,960 --> 00:26:51,480
Speaker 13: and I think the FED likely would agree with this,

522
00:26:51,680 --> 00:26:54,879
Speaker 13: that you know, for sustainable move lower to the fedes

523
00:26:54,920 --> 00:26:57,439
Speaker 13: two percent goal, wages have to be a part of

524
00:26:58,119 --> 00:27:01,520
Speaker 13: a part of that picture and age environment of four

525
00:27:01,520 --> 00:27:03,240
Speaker 13: and a half percent year in the ear, even though

526
00:27:03,280 --> 00:27:06,480
Speaker 13: it's it's falling and kind of getting down underneath, the

527
00:27:06,520 --> 00:27:09,800
Speaker 13: Fed's kind of four percent tolerance level still is not

528
00:27:09,840 --> 00:27:11,879
Speaker 13: going to cut it as it relates to kind of

529
00:27:11,920 --> 00:27:15,400
Speaker 13: the services component of the inflation equation. You know, John

530
00:27:15,400 --> 00:27:19,640
Speaker 13: Williams talked about this in a Bloomberg interview a week

531
00:27:19,720 --> 00:27:21,760
Speaker 13: or two ago and talked about a three point two

532
00:27:21,840 --> 00:27:25,359
Speaker 13: to three point five percent wage rate that's kind of

533
00:27:25,400 --> 00:27:29,520
Speaker 13: being necessary for the Fed hitting their two percent goal.

534
00:27:29,680 --> 00:27:31,320
Speaker 13: We're a ways from that today. And if you look

535
00:27:31,359 --> 00:27:35,679
Speaker 13: through history, you sustainable moves move lower moves lower in

536
00:27:35,760 --> 00:27:39,240
Speaker 13: wages typically only happen, you know, when when recessions occur.

537
00:27:40,119 --> 00:27:43,160
Speaker 13: So we think that ultimately, what's likely to take place

538
00:27:43,200 --> 00:27:44,000
Speaker 13: again this cycle?

539
00:27:44,840 --> 00:27:47,400
Speaker 8: Where is the team allocating assets at this point?

540
00:27:48,960 --> 00:27:50,960
Speaker 13: You know, we've taken our time over the last couple

541
00:27:51,040 --> 00:27:54,320
Speaker 13: of years leaning into you know, upward moves and rates,

542
00:27:54,680 --> 00:27:58,359
Speaker 13: and you know, this leg up in rates over the

543
00:27:58,440 --> 00:28:02,000
Speaker 13: last three months has been no eccepstion'. We've recently, for

544
00:28:02,080 --> 00:28:04,720
Speaker 13: the first time in the last seven years, been over

545
00:28:04,840 --> 00:28:07,200
Speaker 13: We just moved to an overweight position in fixed income.

546
00:28:07,280 --> 00:28:11,080
Speaker 13: But that's been you know, a two to three year

547
00:28:11,480 --> 00:28:14,639
Speaker 13: process for our team. You know, we do like the

548
00:28:14,680 --> 00:28:17,800
Speaker 13: real interest rate environment that we're getting as fixed income investors.

549
00:28:18,520 --> 00:28:21,159
Speaker 13: You know, real rates on the tenure are you know,

550
00:28:21,200 --> 00:28:23,360
Speaker 13: above two point three percent that's the highest that we've

551
00:28:23,400 --> 00:28:26,360
Speaker 13: seen since two thousand and seven. We think that there's

552
00:28:26,440 --> 00:28:31,160
Speaker 13: multiple ways for individual investors to have an advantaced position here.

553
00:28:31,359 --> 00:28:34,400
Speaker 13: You know, either through a recessionary outcome where the FED

554
00:28:34,480 --> 00:28:38,960
Speaker 13: responds with lower real interest rates, or if inflation does

555
00:28:39,000 --> 00:28:41,360
Speaker 13: continue to move lower, you know, those real rates are

556
00:28:41,400 --> 00:28:42,920
Speaker 13: still attractive in an your environment.

557
00:28:43,360 --> 00:28:45,480
Speaker 8: Hey, how tough has your job become? I mean, do

558
00:28:45,520 --> 00:28:48,400
Speaker 8: you have customers saying, look, Matt, I can you know,

559
00:28:48,520 --> 00:28:52,440
Speaker 8: stick money in a Marcus account and have absolutely no

560
00:28:52,560 --> 00:28:56,000
Speaker 8: fees associated with that and still get a pretty decent

561
00:28:56,040 --> 00:28:59,680
Speaker 8: return on my money or even you know, a short

562
00:28:59,760 --> 00:29:01,640
Speaker 8: term treasuries bills.

563
00:29:03,520 --> 00:29:05,800
Speaker 13: Yeah, that's a common conversation we're having, and not so

564
00:29:05,880 --> 00:29:09,480
Speaker 13: much in terms of, you know, whether or not it

565
00:29:09,520 --> 00:29:12,920
Speaker 13: makes sense to have a more diversified portfolio, but more

566
00:29:13,000 --> 00:29:16,040
Speaker 13: within the conversation about how should we be allocating within

567
00:29:16,080 --> 00:29:20,200
Speaker 13: fixed income. You know, it's really comfortable to sit in

568
00:29:20,240 --> 00:29:22,520
Speaker 13: the front end of the curve not deal with any

569
00:29:22,600 --> 00:29:25,280
Speaker 13: volatilities it relates to movements and rates, or movements and

570
00:29:25,320 --> 00:29:28,600
Speaker 13: credit spreads. But we do think that duration is a

571
00:29:28,680 --> 00:29:34,720
Speaker 13: wonderful diversification tool in one's investment portfolio, particularly just because

572
00:29:34,760 --> 00:29:38,320
Speaker 13: of the refinancing risk. You know, certainly it was comfortable

573
00:29:38,320 --> 00:29:39,760
Speaker 13: to sit in the front end of the curve in

574
00:29:39,760 --> 00:29:43,720
Speaker 13: two thousand and six, two thousand and seven. However, you

575
00:29:43,760 --> 00:29:45,680
Speaker 13: know when you went to kind of go back if

576
00:29:45,720 --> 00:29:47,960
Speaker 13: you were sitting into your notes as an example, and

577
00:29:48,720 --> 00:29:51,000
Speaker 13: buy those again come two thousand and nine, it was

578
00:29:51,040 --> 00:29:54,520
Speaker 13: a very very painful conversation saying, yeah, those five percent

579
00:29:54,640 --> 00:29:57,040
Speaker 13: rates are gone. You know, you have to lock those

580
00:29:57,040 --> 00:30:00,440
Speaker 13: in over longer periods of time to have that kind

581
00:30:00,440 --> 00:30:04,719
Speaker 13: of a great diversification asset within one's investment portfolio. So

582
00:30:04,760 --> 00:30:10,400
Speaker 13: the conversation is more about diversification and kind of walking in,

583
00:30:10,960 --> 00:30:13,600
Speaker 13: you know, truly locking in higher for longer within your portfolio,

584
00:30:13,680 --> 00:30:16,160
Speaker 13: versus just avoiding volatility at all costs.

585
00:30:16,880 --> 00:30:19,520
Speaker 5: Matt, we had Jamie Diamond say, when asked if rates

586
00:30:19,520 --> 00:30:21,280
Speaker 5: can go to seven percent, the answer is yes.

587
00:30:21,360 --> 00:30:22,560
Speaker 6: Is that something you agree with?

588
00:30:22,600 --> 00:30:24,400
Speaker 5: And where are you going to be putting money to

589
00:30:24,440 --> 00:30:30,600
Speaker 5: work if we see rates getting into the seven percent range, Well, I.

590
00:30:30,520 --> 00:30:33,840
Speaker 13: Think it's possible in financial markets. You know, I think

591
00:30:33,880 --> 00:30:38,400
Speaker 13: that's probably more of a tail risk scenario. But you know,

592
00:30:38,480 --> 00:30:41,400
Speaker 13: if if we do see that happen, I think we

593
00:30:41,440 --> 00:30:44,440
Speaker 13: would be aggressive buyers of just pure rate. In that environment,

594
00:30:44,480 --> 00:30:45,400
Speaker 13: we would avoid credit.

595
00:30:46,760 --> 00:30:51,520
Speaker 8: Welcome to the fourth quarter, By the way, what the

596
00:30:51,560 --> 00:30:54,680
Speaker 8: comparison's got to be a lot easier. But what's what's

597
00:30:54,720 --> 00:30:58,480
Speaker 8: your expectation as we move forward on the earnings front?

598
00:31:01,200 --> 00:31:03,880
Speaker 13: You know, the earnings inside of the picture I think

599
00:31:03,960 --> 00:31:06,880
Speaker 13: is a tough one to figure out right here. You know,

600
00:31:07,080 --> 00:31:10,160
Speaker 13: we've been in a decelerating, rined growth environment. We dipped

601
00:31:10,160 --> 00:31:13,360
Speaker 13: into negative territory in twenty twenty three. But as you

602
00:31:13,400 --> 00:31:15,200
Speaker 13: look into what's King of baked in in terms of

603
00:31:15,360 --> 00:31:20,600
Speaker 13: consensus expectations for the fourth quarter and especially into the

604
00:31:20,640 --> 00:31:23,360
Speaker 13: front half of twenty twenty four, there's a natural acceleration

605
00:31:23,440 --> 00:31:26,040
Speaker 13: of earnings growth kind of coming back into the s

606
00:31:26,080 --> 00:31:28,640
Speaker 13: and P five hundred, you know, kind of capping off

607
00:31:28,720 --> 00:31:30,840
Speaker 13: with a second quarter of twenty twenty four calling for

608
00:31:30,960 --> 00:31:33,560
Speaker 13: double digit earnence growth. You know, I kind of scratched

609
00:31:33,560 --> 00:31:36,360
Speaker 13: my head at that number. You know, that would be

610
00:31:36,440 --> 00:31:42,760
Speaker 13: one of the kind of kin of abnormal abnormal situations

611
00:31:42,800 --> 00:31:46,240
Speaker 13: that I've ever seen, where the economy naturally re accelerates

612
00:31:46,280 --> 00:31:50,120
Speaker 13: in the face of significant monetary policy tightening. I guess

613
00:31:50,160 --> 00:31:53,080
Speaker 13: it's possible, but for me, I think I'm skeptical, and

614
00:31:53,480 --> 00:31:54,920
Speaker 13: you know, to me, I think it's kind of more

615
00:31:54,960 --> 00:31:57,479
Speaker 13: of the same what we've se been seeing late lately,

616
00:31:57,520 --> 00:31:59,959
Speaker 13: where companies are going to continue to try and put

617
00:32:00,000 --> 00:32:03,480
Speaker 13: price down on consumers and consumers are pushing back with

618
00:32:03,880 --> 00:32:06,320
Speaker 13: kind of unit volume declines for a lot of companies.

619
00:32:06,480 --> 00:32:10,120
Speaker 13: So yeah, I question how long that dynamic can persist.

620
00:32:10,800 --> 00:32:14,040
Speaker 13: Certainly the consensus is calling for that as we pushed

621
00:32:14,080 --> 00:32:17,800
Speaker 13: into twenty twenty four, but you know, we're cautious with that,

622
00:32:18,240 --> 00:32:22,000
Speaker 13: with that consensus estimate, and so it's another reason why

623
00:32:22,000 --> 00:32:24,960
Speaker 13: we prefer fixed income over traditional equities at the margin.

624
00:32:25,000 --> 00:32:28,680
Speaker 8: Here, Matt, A pleasure, appreciate it. Matt Stuckey, Senior portfolio

625
00:32:28,680 --> 00:32:31,040
Speaker 8: manager at Northwestern Mutual.

626
00:32:31,440 --> 00:32:34,560
Speaker 7: You're listening to the tape Can's our live program, Bloomberg

627
00:32:34,640 --> 00:32:38,240
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the

628
00:32:38,280 --> 00:32:40,360
Speaker 7: tune in app, Bloomberg dot Com.

629
00:32:40,080 --> 00:32:41,520
Speaker 9: And the Bloomberg Business App.

630
00:32:41,560 --> 00:32:44,360
Speaker 7: You can also listen live on Amazon Alexa from our

631
00:32:44,400 --> 00:32:49,360
Speaker 7: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

632
00:32:50,480 --> 00:32:53,800
Speaker 8: President Biden urging house speaker McCarthy to follow up quickly

633
00:32:54,280 --> 00:32:57,560
Speaker 8: with funding for Ukraine this comes just hours they up

634
00:32:57,560 --> 00:33:01,520
Speaker 8: to Congress pants that spending bill without funding for Ukraine,

635
00:33:01,760 --> 00:33:04,360
Speaker 8: and we say hello to our next guest, ed Price,

636
00:33:04,640 --> 00:33:07,400
Speaker 8: a senior fellow at NYU and a principal at ERKO

637
00:33:07,960 --> 00:33:10,960
Speaker 8: joining us. Now, how is this being received?

638
00:33:11,520 --> 00:33:14,400
Speaker 14: Well, personally, I think it's insane. You know, remember when

639
00:33:14,440 --> 00:33:16,200
Speaker 14: I was growing up, the Russians were going to kill

640
00:33:16,280 --> 00:33:18,200
Speaker 14: us at the drop of a hat, and now we

641
00:33:18,240 --> 00:33:20,080
Speaker 14: seem to have an opportunity to kill bad guys with

642
00:33:20,160 --> 00:33:21,800
Speaker 14: pennies on the dollar and we don't want to do it.

643
00:33:22,800 --> 00:33:25,200
Speaker 14: I mean, does that strike you guys as normal? I

644
00:33:25,240 --> 00:33:28,080
Speaker 14: mean I thought the Republicans at least used to be

645
00:33:28,120 --> 00:33:29,000
Speaker 14: into that sort of thing.

646
00:33:29,840 --> 00:33:33,800
Speaker 8: Yeah, And at this point, what is your outlook in

647
00:33:33,880 --> 00:33:36,760
Speaker 8: terms of whether or not this is actually to get

648
00:33:36,800 --> 00:33:40,160
Speaker 8: reintroduced and there will be funding for Ukraine?

649
00:33:40,840 --> 00:33:43,560
Speaker 14: I think it has to be. I think that if

650
00:33:43,600 --> 00:33:46,520
Speaker 14: the Democrats, if the Biden administration were to come to

651
00:33:46,560 --> 00:33:49,240
Speaker 14: any sort of deal with the House Republicans that did

652
00:33:49,280 --> 00:33:52,680
Speaker 14: not include funding for Ukraine, they have to give up

653
00:33:52,680 --> 00:33:56,520
Speaker 14: their entire democracies versus autocracies foreign policy. Then that's basically

654
00:33:56,520 --> 00:33:59,280
Speaker 14: the Biden doctrine, I would argue, So they have to

655
00:33:59,280 --> 00:34:02,920
Speaker 14: do it. But again I'm a bit surprised and slightly dismayed,

656
00:34:02,960 --> 00:34:05,160
Speaker 14: if I'm being honest with you.

657
00:34:04,440 --> 00:34:07,600
Speaker 8: You just recently wrote a paper just to switch gears

658
00:34:07,640 --> 00:34:13,040
Speaker 8: for a moment. Forget about the bricks, what about the VIPs.

659
00:34:13,560 --> 00:34:16,880
Speaker 8: First of all, we have to, with the apologies to

660
00:34:17,440 --> 00:34:20,080
Speaker 8: Jim O'Neill, you and Neil explain what the bricks are

661
00:34:20,320 --> 00:34:23,399
Speaker 8: and how they've been replaced by the VIPs.

662
00:34:24,000 --> 00:34:27,040
Speaker 14: So Jim O'Neil, in his genius about twenty years ago,

663
00:34:27,120 --> 00:34:31,320
Speaker 14: came up with this very famous acronym brick, which was Brazil, Russia, India,

664
00:34:31,360 --> 00:34:34,440
Speaker 14: and China. Later South Africa joined in to make the bricks.

665
00:34:34,760 --> 00:34:36,520
Speaker 14: And his argument was, well, if you look at long

666
00:34:36,560 --> 00:34:39,839
Speaker 14: term GDP trends in those countries, eventually they will take

667
00:34:39,880 --> 00:34:43,719
Speaker 14: over the so called West. That's kind of happening, which

668
00:34:43,760 --> 00:34:46,719
Speaker 14: is great in my bid for acronym fame. The other

669
00:34:46,840 --> 00:34:49,040
Speaker 14: day I said, well, hold on the second, the bricks

670
00:34:49,040 --> 00:34:51,280
Speaker 14: are a thing. We know about the bricks. What about

671
00:34:51,280 --> 00:34:55,400
Speaker 14: the VIPs. Vietnam, India, the Philippines, Saudi Arabia. These are

672
00:34:55,400 --> 00:34:58,120
Speaker 14: the countries Uncle Sam really needs to get on board

673
00:34:58,320 --> 00:34:59,960
Speaker 14: if he wants to win the twenty first century.

674
00:35:00,000 --> 00:35:03,760
Speaker 8: Alright, let's start with Vietnam, because I will argue that Vietnam,

675
00:35:04,080 --> 00:35:08,600
Speaker 8: once an enemy of the United States, is now one

676
00:35:08,600 --> 00:35:09,960
Speaker 8: of our best friends in the region.

677
00:35:10,320 --> 00:35:12,239
Speaker 14: That's true. I mean, I would argue that Vietnam is

678
00:35:12,280 --> 00:35:15,160
Speaker 14: never our enemy. If we're thinking about South Vietnam, the

679
00:35:15,160 --> 00:35:18,799
Speaker 14: country as was, and it was actually the communist north. Right,

680
00:35:18,840 --> 00:35:21,360
Speaker 14: Maybe that's nitpicking that was the enemy, but that actually

681
00:35:21,400 --> 00:35:23,840
Speaker 14: makes your point even better because now the communists in

682
00:35:23,880 --> 00:35:27,560
Speaker 14: Hanoi are friends with Uncle Sam. So you might say, Look,

683
00:35:27,640 --> 00:35:30,600
Speaker 14: Vietnam is a slam dunk, but it is still nominally

684
00:35:30,680 --> 00:35:34,000
Speaker 14: a communist country. They've seriously got beef with China, but

685
00:35:34,000 --> 00:35:36,680
Speaker 14: that doesn't necessarily mean that they're at the level of treaty.

686
00:35:36,680 --> 00:35:40,480
Speaker 5: Ally in India somehow is both in the bricks and

687
00:35:40,520 --> 00:35:41,400
Speaker 5: also in the VIPs.

688
00:35:41,520 --> 00:35:43,080
Speaker 14: Yes, I knew you guys would point that out. That's

689
00:35:43,160 --> 00:35:45,360
Speaker 14: very smart. Yes, India is in the bricks. It's a

690
00:35:45,400 --> 00:35:48,800
Speaker 14: quincidential member of the bricks. But India also behaves however

691
00:35:48,840 --> 00:35:51,400
Speaker 14: India wants to behave. This is the non aligned tradition,

692
00:35:51,880 --> 00:35:54,239
Speaker 14: and it's a member of the quad as well as

693
00:35:54,280 --> 00:35:56,759
Speaker 14: accepting Russian arms imports.

694
00:35:56,960 --> 00:35:57,600
Speaker 9: So I think.

695
00:35:57,480 --> 00:36:00,000
Speaker 14: India is to play for, and India is important because

696
00:36:00,120 --> 00:36:02,720
Speaker 14: it essentially has the deciding vote in World War iie,

697
00:36:02,840 --> 00:36:04,200
Speaker 14: how big it is and who wins.

698
00:36:04,560 --> 00:36:06,680
Speaker 8: What does the Philippines have for us?

699
00:36:07,320 --> 00:36:10,520
Speaker 14: Well, the Philippines is essentially a massive aircraft carrier. I

700
00:36:10,520 --> 00:36:13,200
Speaker 14: mean this is the Chinese want the Spratley's, they want

701
00:36:13,200 --> 00:36:14,520
Speaker 14: the nine dash line.

702
00:36:14,280 --> 00:36:17,719
Speaker 8: I will argue that does not come cheaply because mister

703
00:36:17,840 --> 00:36:22,600
Speaker 8: marcos As did his father charged as exorbitant fees to

704
00:36:22,640 --> 00:36:23,799
Speaker 8: the United States for there.

705
00:36:24,440 --> 00:36:27,160
Speaker 14: Yes, I think that's probably true. And there was a

706
00:36:27,200 --> 00:36:29,840
Speaker 14: time in American history where we might have annexed the

707
00:36:29,840 --> 00:36:33,799
Speaker 14: Philippines outright and chose not to. So we've decided not

708
00:36:33,880 --> 00:36:35,960
Speaker 14: to be a formal empire. And the cost of that

709
00:36:36,120 --> 00:36:38,719
Speaker 14: is that you have to get on board with local politics,

710
00:36:38,800 --> 00:36:41,799
Speaker 14: you have to pay people to get on board with

711
00:36:41,840 --> 00:36:43,279
Speaker 14: your vision of the world, and you have to keep

712
00:36:43,360 --> 00:36:44,600
Speaker 14: up soft power engagements.

713
00:36:44,680 --> 00:36:47,319
Speaker 5: Right, And how does the US get kind of on

714
00:36:47,400 --> 00:36:49,799
Speaker 5: better terms with Saudi Arabia? Is that just through you know,

715
00:36:49,920 --> 00:36:52,840
Speaker 5: golf partnerships or letting them by sporting teams.

716
00:36:53,360 --> 00:36:56,120
Speaker 14: Well, that's part of it, for sure, But I think

717
00:36:56,160 --> 00:36:59,280
Speaker 14: that really and truly the Saladis needs security. The reason

718
00:36:59,280 --> 00:37:01,680
Speaker 14: the Saudis and his rollies are willing to sit around

719
00:37:01,719 --> 00:37:06,520
Speaker 14: a table is their common distaste for Iran, and I

720
00:37:06,560 --> 00:37:09,880
Speaker 14: think that if we provide the Saudis essentially with modern

721
00:37:10,440 --> 00:37:14,640
Speaker 14: defense weapons, modern defense systems, they will be more inclined

722
00:37:14,680 --> 00:37:17,400
Speaker 14: to help us out with oil supply problems should the

723
00:37:17,480 --> 00:37:20,360
Speaker 14: Russians later down the line decide to restrict oil supply.

724
00:37:20,719 --> 00:37:29,040
Speaker 8: Can these countries, especially with Vietnam, effectively replace China as

725
00:37:29,120 --> 00:37:31,960
Speaker 8: the place where the United States manufacturers go to get

726
00:37:32,000 --> 00:37:34,440
Speaker 8: the cheap labor and stuff produced well.

727
00:37:34,520 --> 00:37:37,960
Speaker 14: So this is a multi trillion dollar question, right. I

728
00:37:38,000 --> 00:37:42,040
Speaker 14: think the assumption in the back of American business people's

729
00:37:42,120 --> 00:37:45,839
Speaker 14: minds is that there is a place to replace China.

730
00:37:45,880 --> 00:37:48,480
Speaker 14: There's some place in the world, a combination maybe of Vietnam,

731
00:37:48,560 --> 00:37:52,640
Speaker 14: Mexico and so on for near shuring, friends shoring, and

732
00:37:52,719 --> 00:37:55,839
Speaker 14: so on. I think the problem is that the disruption

733
00:37:56,200 --> 00:37:59,719
Speaker 14: entailed between the United States and China decoupling or even

734
00:38:01,000 --> 00:38:04,440
Speaker 14: effectively shrinks the oval size of the global economy. It's

735
00:38:04,520 --> 00:38:07,200
Speaker 14: hugely disruptive. So I don't think there's ever going to

736
00:38:07,200 --> 00:38:10,000
Speaker 14: be a one for one replacement. Countries such as India

737
00:38:10,000 --> 00:38:10,800
Speaker 14: I don't think that works.

738
00:38:12,520 --> 00:38:17,239
Speaker 8: Yeah, And in terms of the other countries, what is

739
00:38:17,280 --> 00:38:20,279
Speaker 8: the future of the relationships between the United States and

740
00:38:20,320 --> 00:38:24,160
Speaker 8: these other countries as you can tell, well, I'm hoping

741
00:38:24,200 --> 00:38:27,320
Speaker 8: that is it based on manufacturing or something else.

742
00:38:28,239 --> 00:38:33,279
Speaker 14: I think ultimately people are considering two possible futures. One

743
00:38:33,520 --> 00:38:36,760
Speaker 14: is some sort of continuation of Pax Americana orbeit damaged,

744
00:38:37,200 --> 00:38:41,680
Speaker 14: and another is some sort of Chinese hegemony. And whereas

745
00:38:42,160 --> 00:38:44,319
Speaker 14: for the last maybe twenty years, people were slightly more

746
00:38:44,320 --> 00:38:48,680
Speaker 14: comfortable with China rising as this commercial power, now I

747
00:38:48,719 --> 00:38:52,560
Speaker 14: think some regional players, particularly Vietnam and the Philippines scratching

748
00:38:52,560 --> 00:38:55,600
Speaker 14: their heads and thinking, well, maybe we wouldn't quite like

749
00:38:55,680 --> 00:38:58,080
Speaker 14: that as much as the international trading system that we

750
00:38:58,080 --> 00:38:59,200
Speaker 14: have now led by Uncle.

751
00:38:59,000 --> 00:39:01,160
Speaker 6: Sam going for a longer acronym.

752
00:39:01,160 --> 00:39:03,920
Speaker 5: What kind of countries could have been playing for a

753
00:39:03,960 --> 00:39:06,680
Speaker 5: position in the VIPPS basket that you built.

754
00:39:06,480 --> 00:39:08,719
Speaker 14: Right, Well, I mean it only had space for four,

755
00:39:08,800 --> 00:39:12,319
Speaker 14: so I had to mold the analysis around the acronym.

756
00:39:12,760 --> 00:39:14,840
Speaker 14: I think countries in the global South are going to

757
00:39:14,840 --> 00:39:19,320
Speaker 14: be important. I think Mexico's already on board. Brazil is huge,

758
00:39:19,440 --> 00:39:22,120
Speaker 14: but again that's firmly in the bricks. I mean, you

759
00:39:22,120 --> 00:39:25,040
Speaker 14: can see what they're doing with the goal backed currency project.

760
00:39:25,440 --> 00:39:27,759
Speaker 14: I mean, ultimately, ultimately it would be nice to have

761
00:39:27,800 --> 00:39:30,279
Speaker 14: Russia on board. And I think that one of the

762
00:39:30,719 --> 00:39:33,000
Speaker 14: you know, to sort of echo Vladimir Putin's words, it

763
00:39:33,040 --> 00:39:35,200
Speaker 14: wasn't the collapse of the Soviet Union that was the

764
00:39:35,200 --> 00:39:39,320
Speaker 14: greatest strategy of geopolitics in the twentieth century. In my money,

765
00:39:39,360 --> 00:39:41,560
Speaker 14: it was the fact that we didn't then give a

766
00:39:41,719 --> 00:39:44,920
Speaker 14: Marshall Plan two point zero two Russia and sufficiently get

767
00:39:44,920 --> 00:39:47,760
Speaker 14: them on board with the Western system, you know, maybe

768
00:39:47,760 --> 00:39:51,840
Speaker 14: even NATO membership, maybe even EU membership. So ultimately, I

769
00:39:51,840 --> 00:39:53,520
Speaker 14: think the player is to try and get Russia back

770
00:39:53,520 --> 00:39:54,160
Speaker 14: into the system.

771
00:39:54,640 --> 00:39:57,000
Speaker 8: And nice to see again. Thanks for rescued by the studios.

772
00:39:57,000 --> 00:40:00,120
Speaker 8: We appreciate it. Ed Price, senior fellow at NYU, the

773
00:40:00,160 --> 00:40:04,840
Speaker 8: principal at Ergo on the geopolitical risks and the latest

774
00:40:04,920 --> 00:40:06,000
Speaker 8: research that he's doing.

775
00:40:06,200 --> 00:40:09,360
Speaker 7: You're listening to the tape Can't Our Live program Bloomberg

776
00:40:09,400 --> 00:40:13,000
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the

777
00:40:13,040 --> 00:40:15,000
Speaker 7: tune in app, Bloomberg dot Com, and.

778
00:40:14,960 --> 00:40:16,279
Speaker 9: The Bloomberg Business app.

779
00:40:16,320 --> 00:40:19,120
Speaker 7: You can also listen live on Amazon Alexa, from our

780
00:40:19,160 --> 00:40:23,520
Speaker 7: flagship New York station, just say Alexa play Bloomberg eleven.

781
00:40:23,239 --> 00:40:28,440
Speaker 3: Thirty with an investment outlook is Evanna della Vesca. She

782
00:40:28,520 --> 00:40:31,240
Speaker 3: is founder in CIO at Spear invest They describe theirs

783
00:40:31,760 --> 00:40:35,320
Speaker 3: them as a fundamental asset manager and an etf issuer

784
00:40:35,360 --> 00:40:39,680
Speaker 3: specializing investments in industrial technology value chain. So I'm curious

785
00:40:39,960 --> 00:40:41,920
Speaker 3: to see what her take is on the market. She

786
00:40:42,000 --> 00:40:44,600
Speaker 3: joins us here in studio, Nice to have you here

787
00:40:44,640 --> 00:40:45,600
Speaker 3: with us. How are you?

788
00:40:45,640 --> 00:40:48,120
Speaker 4: Thanks for having me on, Carol, Hey remind our world.

789
00:40:48,160 --> 00:40:50,360
Speaker 3: I did the description off your website, but to be honest,

790
00:40:50,360 --> 00:40:52,960
Speaker 3: tell us about what you guys do and what you

791
00:40:53,000 --> 00:40:54,560
Speaker 3: focus on well.

792
00:40:54,600 --> 00:40:57,719
Speaker 15: As you mentioned, Carol, we focus on B too B technology,

793
00:40:57,760 --> 00:41:00,200
Speaker 15: and our niche focus allows us to really have a

794
00:41:00,200 --> 00:41:04,480
Speaker 15: good sense of what's going on in tech, specifically in

795
00:41:06,520 --> 00:41:09,880
Speaker 15: B to B business to business where companies are selling

796
00:41:09,920 --> 00:41:13,560
Speaker 15: products to other companies. So we are pretty positive on

797
00:41:13,600 --> 00:41:15,880
Speaker 15: the cycle. We think we're at the bottom of the cycle.

798
00:41:15,920 --> 00:41:20,000
Speaker 15: What we're seeing today is that hardware bottom, and we're

799
00:41:20,040 --> 00:41:23,920
Speaker 15: just in the early innings of investments of hardware investments.

800
00:41:24,040 --> 00:41:26,080
Speaker 15: We think this is going to be a pretty big

801
00:41:26,200 --> 00:41:29,719
Speaker 15: data center investment cycle ahead of US, and that's going

802
00:41:29,800 --> 00:41:32,920
Speaker 15: to really drive the rest of technology out of this downturn.

803
00:41:33,160 --> 00:41:35,480
Speaker 5: So continuing to see more upside for a company like

804
00:41:35,520 --> 00:41:38,480
Speaker 5: in Video, which already has tripled this year and is

805
00:41:38,960 --> 00:41:41,719
Speaker 5: one of the best performers in.

806
00:41:41,239 --> 00:41:45,520
Speaker 15: The US, absolutely, So what's happened to in Vidia for example,

807
00:41:45,840 --> 00:41:48,920
Speaker 15: as we saw numbers bottom and increase of the bottom,

808
00:41:49,200 --> 00:41:52,680
Speaker 15: the stock is just getting cheaper and cheaper on traditional

809
00:41:52,760 --> 00:41:55,319
Speaker 15: valuation metrics. So we believe what we're going to see

810
00:41:55,320 --> 00:42:00,160
Speaker 15: with Nvidia. Historically the focus has been growth investors and

811
00:42:00,200 --> 00:42:03,000
Speaker 15: people trying to capture the AI hype, but as we

812
00:42:03,080 --> 00:42:07,280
Speaker 15: go forward, really there is fundamental support from the numbers here,

813
00:42:07,400 --> 00:42:10,440
Speaker 15: So we believe that as you go forward, there's going

814
00:42:10,520 --> 00:42:12,719
Speaker 15: to be value investors that will be looking at this

815
00:42:13,760 --> 00:42:14,520
Speaker 15: at the stock.

816
00:42:14,520 --> 00:42:17,200
Speaker 6: Talking about AI, talking about data centers, while though.

817
00:42:17,080 --> 00:42:19,400
Speaker 4: The event video is value stock, value stock.

818
00:42:19,480 --> 00:42:22,360
Speaker 5: That's one point one trillion dollars more upside after a

819
00:42:22,400 --> 00:42:26,920
Speaker 5: triple different world arm the biggest IPO in the world

820
00:42:27,000 --> 00:42:29,360
Speaker 5: this year, talking up a lot of AI soft.

821
00:42:29,239 --> 00:42:31,520
Speaker 6: Bank town talking up their partnerships within VideA.

822
00:42:31,840 --> 00:42:34,440
Speaker 5: Is that a company that you see upside with alongside

823
00:42:34,440 --> 00:42:36,520
Speaker 5: the likes of an Invidia or an AMD.

824
00:42:36,840 --> 00:42:39,600
Speaker 15: So we don't own ARM at the moment, they are

825
00:42:39,760 --> 00:42:43,080
Speaker 15: indirectly an AI play. But what I would question investors

826
00:42:43,160 --> 00:42:45,279
Speaker 15: is that over time everything is going to be an

827
00:42:45,280 --> 00:42:48,480
Speaker 15: AI play. Right, So you're going to have most applications

828
00:42:48,560 --> 00:42:51,080
Speaker 15: have AI embedded in them, and most products will be

829
00:42:51,160 --> 00:42:55,320
Speaker 15: able to will be able to enable AI to run

830
00:42:55,400 --> 00:42:58,520
Speaker 15: on them. So over time, we believe ARM will benefit

831
00:42:58,560 --> 00:43:01,239
Speaker 15: from this trend, but it's not nearly as big of

832
00:43:01,280 --> 00:43:03,600
Speaker 15: a beneficiary as Nvidia would be.

833
00:43:03,680 --> 00:43:05,080
Speaker 4: At this point in time.

834
00:43:05,480 --> 00:43:07,960
Speaker 3: Do we think about the AI in the same vein

835
00:43:08,040 --> 00:43:09,760
Speaker 3: that we thought about going online?

836
00:43:09,920 --> 00:43:10,840
Speaker 4: Right in the Internet?

837
00:43:10,880 --> 00:43:13,799
Speaker 3: And at some point I remember having these conversations every

838
00:43:13,800 --> 00:43:15,200
Speaker 3: company is going to be an Internet play.

839
00:43:15,320 --> 00:43:16,800
Speaker 4: Well they're not even retail.

840
00:43:17,200 --> 00:43:20,200
Speaker 3: While online and mobile ordering and all that good stuff,

841
00:43:20,400 --> 00:43:23,600
Speaker 3: we still think about brick and mortar, And I'm just wondering, like,

842
00:43:24,719 --> 00:43:26,600
Speaker 3: can we think about them as the same thing. To

843
00:43:26,640 --> 00:43:28,640
Speaker 3: hear you say everything's going to be an AI play,

844
00:43:29,120 --> 00:43:31,920
Speaker 3: I just remember saying that about the Internet. Everything's going

845
00:43:31,920 --> 00:43:33,400
Speaker 3: to be an Internet play, and I don't know that

846
00:43:33,440 --> 00:43:34,640
Speaker 3: it's actually played out that way.

847
00:43:35,000 --> 00:43:37,400
Speaker 15: Well, that's an interesting point. So when I say everything

848
00:43:37,480 --> 00:43:39,959
Speaker 15: is going to be an AI play, AI will take

849
00:43:40,000 --> 00:43:42,720
Speaker 15: part in most of applications that we use. That doesn't

850
00:43:42,719 --> 00:43:45,560
Speaker 15: mean that every company is investable and every company will

851
00:43:45,600 --> 00:43:47,640
Speaker 15: offer value. So that's where we come in. We try

852
00:43:47,640 --> 00:43:50,880
Speaker 15: to look at the fundamentals, model out how much earnings

853
00:43:50,920 --> 00:43:54,400
Speaker 15: potential does each company have, where does that stand compared

854
00:43:54,440 --> 00:43:57,280
Speaker 15: to the street estimates, And we're really looking for capturing

855
00:43:57,320 --> 00:44:00,799
Speaker 15: alpha of opportunities where people are maybe seeing out on

856
00:44:01,200 --> 00:44:04,680
Speaker 15: or not understanding how they are related to AR or

857
00:44:04,680 --> 00:44:05,600
Speaker 15: how they're going to benefit.

858
00:44:05,640 --> 00:44:07,359
Speaker 3: Because I remember one of the ways of thinking about

859
00:44:07,360 --> 00:44:10,359
Speaker 3: the Internet play was like ups right, everybody's ordering, so

860
00:44:10,480 --> 00:44:12,719
Speaker 3: you know, very different. So how do you think about it?

861
00:44:12,760 --> 00:44:15,040
Speaker 3: Where do you think will be the best opportunities. Is

862
00:44:15,080 --> 00:44:17,600
Speaker 3: it somebody who's making the chips for the AI sector

863
00:44:17,719 --> 00:44:18,760
Speaker 3: or is it something else.

864
00:44:19,480 --> 00:44:23,040
Speaker 15: So what we see is opportunities across several layers of AI.

865
00:44:23,440 --> 00:44:26,000
Speaker 15: So the first layer is the hardware layer, which we

866
00:44:26,080 --> 00:44:30,240
Speaker 15: talked about, so that would be in VIDIMD, Marvel, basically

867
00:44:30,280 --> 00:44:33,400
Speaker 15: companies that not only offer GPUs but just broader data

868
00:44:33,440 --> 00:44:37,440
Speaker 15: center networking equipment as well. We still see those as

869
00:44:37,480 --> 00:44:40,879
Speaker 15: being in the early innings. The next layer of opportunity

870
00:44:41,320 --> 00:44:42,200
Speaker 15: will be in.

871
00:44:42,080 --> 00:44:44,240
Speaker 4: The data layer. So here you have a lot.

872
00:44:44,080 --> 00:44:47,960
Speaker 15: Of software companies that offer services in addition to the

873
00:44:48,000 --> 00:44:51,080
Speaker 15: cloud vendors that are also in this data layer. In

874
00:44:51,120 --> 00:44:54,680
Speaker 15: addition to them, they offer services such as data streaming,

875
00:44:55,600 --> 00:44:58,200
Speaker 15: enabling you to organize your data better. So this is

876
00:44:58,239 --> 00:45:00,319
Speaker 15: where we see a lot of opportunities right now because

877
00:45:00,320 --> 00:45:03,600
Speaker 15: they're not necessarily called AI and they're not necessarily seeing

878
00:45:03,680 --> 00:45:06,440
Speaker 15: the benefiting the numbers just yet because.

879
00:45:06,200 --> 00:45:07,160
Speaker 4: It's a little too early.

880
00:45:07,560 --> 00:45:09,919
Speaker 15: But over the cycle, we believe we're going to start

881
00:45:09,920 --> 00:45:12,000
Speaker 15: seeing it as we get into next year.

882
00:45:12,080 --> 00:45:13,120
Speaker 4: And it's your third layer.

883
00:45:13,360 --> 00:45:15,720
Speaker 15: And then the third layer would be the application layer.

884
00:45:15,880 --> 00:45:18,160
Speaker 15: And this would be like the application that go either

885
00:45:18,239 --> 00:45:23,000
Speaker 15: directly to businesses or directly to consumers. So an example

886
00:45:23,040 --> 00:45:27,239
Speaker 15: would be Chad GPT, an example would be Microsoft Office Copilot.

887
00:45:27,600 --> 00:45:31,600
Speaker 15: So these are the actual applications, and that's probably the

888
00:45:31,640 --> 00:45:34,680
Speaker 15: most uncertain layer because we're still trying to figure out

889
00:45:35,080 --> 00:45:37,640
Speaker 15: how much are consumers willing to pay, how much our

890
00:45:37,680 --> 00:45:39,719
Speaker 15: company is willing to pay for these products, how much

891
00:45:39,760 --> 00:45:42,320
Speaker 15: do they actually cost on the back end, because running

892
00:45:42,360 --> 00:45:44,759
Speaker 15: on GPUs is pretty costly. So this is where there

893
00:45:44,800 --> 00:45:46,719
Speaker 15: is the most uncertainty. There are going to be some

894
00:45:46,800 --> 00:45:49,680
Speaker 15: winners as well, But there's going to be some losers

895
00:45:49,680 --> 00:45:51,600
Speaker 15: as well, right, companies that are not going to be

896
00:45:51,680 --> 00:45:53,879
Speaker 15: able to make the business case work.

897
00:45:54,080 --> 00:45:56,439
Speaker 5: Well, when you're talking AI, you can't not talk about

898
00:45:56,480 --> 00:45:58,000
Speaker 5: the dot com bubble and one of those things that

899
00:45:58,040 --> 00:46:00,160
Speaker 5: you're mentioning though, and I've seen this being mentioned the

900
00:46:00,160 --> 00:46:03,400
Speaker 5: barecase against Nvidia. Cisco was building the Internet and was

901
00:46:03,440 --> 00:46:06,200
Speaker 5: going to be this behemit that made all the money,

902
00:46:06,200 --> 00:46:08,440
Speaker 5: but it was actually companies that were working on the

903
00:46:08,480 --> 00:46:10,360
Speaker 5: applications and actually benefiting from that.

904
00:46:10,880 --> 00:46:13,400
Speaker 6: I know you mentioned that's kind of in like, we

905
00:46:13,440 --> 00:46:14,680
Speaker 6: haven't scratched the surface of that.

906
00:46:14,800 --> 00:46:16,840
Speaker 5: But where are you seeing the money going to be

907
00:46:16,920 --> 00:46:19,799
Speaker 5: made in the longer term with AI being built out.

908
00:46:20,640 --> 00:46:23,560
Speaker 15: Well, we believe there is going to be opportunities across

909
00:46:23,640 --> 00:46:24,360
Speaker 15: all three layers.

910
00:46:24,440 --> 00:46:24,600
Speaker 9: Right.

911
00:46:24,680 --> 00:46:27,600
Speaker 15: So in the hardware layer, we're still in the early innings,

912
00:46:27,880 --> 00:46:31,000
Speaker 15: so it will take few years. Hardware is very cyclical,

913
00:46:31,239 --> 00:46:33,560
Speaker 15: so we'll go through cycles, right, So this is just

914
00:46:33,600 --> 00:46:36,920
Speaker 15: where the early innings of this cycle. It takes usually

915
00:46:36,960 --> 00:46:40,920
Speaker 15: several years for you to be putting the infrastructure in place,

916
00:46:41,239 --> 00:46:44,839
Speaker 15: and then at some point the valuations will reflect the

917
00:46:44,840 --> 00:46:47,359
Speaker 15: strength of the cycle and we would be looking to

918
00:46:47,440 --> 00:46:52,120
Speaker 15: exit those investments, and then the second layer, we're just starting, right,

919
00:46:52,200 --> 00:46:54,400
Speaker 15: So that's going to be a little later cycle if

920
00:46:54,440 --> 00:46:57,040
Speaker 15: you want to think about it from that perspective, and

921
00:46:57,080 --> 00:46:59,560
Speaker 15: it's going to be a lot less cyclical. There is

922
00:46:59,600 --> 00:47:02,200
Speaker 15: still clickality in it, right, like you will go through

923
00:47:02,680 --> 00:47:06,279
Speaker 15: natural down downturns in that layer as well. But it's

924
00:47:06,320 --> 00:47:09,279
Speaker 15: all about how much is priced in today versus how

925
00:47:09,360 --> 00:47:10,760
Speaker 15: much upside you see.

926
00:47:10,960 --> 00:47:12,880
Speaker 5: We're in a new month, we're in a new quarter,

927
00:47:13,200 --> 00:47:15,840
Speaker 5: earning seasons on the horizon, and Vidia has been the

928
00:47:15,840 --> 00:47:18,839
Speaker 5: big driver for this entire space. Can they live up

929
00:47:18,840 --> 00:47:21,399
Speaker 5: to your expectations in this next quarter and.

930
00:47:21,320 --> 00:47:23,399
Speaker 4: They report next November twenty First.

931
00:47:23,719 --> 00:47:26,680
Speaker 15: Well, we still see a lot of upside to the numbers.

932
00:47:26,840 --> 00:47:30,880
Speaker 15: The CEO mentioned that capacity is higher each quarter, so

933
00:47:30,920 --> 00:47:33,719
Speaker 15: it's increasing each quarter, so they should be able to

934
00:47:33,760 --> 00:47:38,720
Speaker 15: beat numbers. I think where investors may be mismodeling the numbers,

935
00:47:38,719 --> 00:47:41,400
Speaker 15: and this is why they keep beating by such large

936
00:47:41,640 --> 00:47:45,440
Speaker 15: margin is on the pricing side. So everybody's focused on volume,

937
00:47:45,520 --> 00:47:48,160
Speaker 15: everybody's focused on hey, are they really going to be

938
00:47:48,160 --> 00:47:51,760
Speaker 15: able to produce this many chips? The key is pricing

939
00:47:52,040 --> 00:47:54,960
Speaker 15: just because these new products the h one hundred is

940
00:47:55,000 --> 00:47:57,520
Speaker 15: priced at a two to three times premium to the

941
00:47:57,600 --> 00:48:02,719
Speaker 15: prior prior version. You're seeing a big uplift to earnings

942
00:48:03,480 --> 00:48:04,560
Speaker 15: from the pricing side.

943
00:48:04,680 --> 00:48:06,880
Speaker 3: Is there a tangential play off of this, like I

944
00:48:06,920 --> 00:48:09,600
Speaker 3: think about security, is that like what is the other

945
00:48:10,480 --> 00:48:12,759
Speaker 3: aspects that we're maybe not talking about that's kind of

946
00:48:12,760 --> 00:48:15,000
Speaker 3: AI pure but none the less important in this play.

947
00:48:15,040 --> 00:48:16,640
Speaker 4: And just get about forty five seconds.

948
00:48:17,000 --> 00:48:20,480
Speaker 15: Absolutely, so that cybersecurity would be in that second layer,

949
00:48:20,600 --> 00:48:23,239
Speaker 15: so the data layer, so as you're talking about how

950
00:48:23,239 --> 00:48:25,000
Speaker 15: to use the data, key will be how are you

951
00:48:25,040 --> 00:48:28,719
Speaker 15: going to secure this data as well? So we're going

952
00:48:28,800 --> 00:48:33,000
Speaker 15: to see a lot of companies first protecting applications on

953
00:48:33,040 --> 00:48:35,399
Speaker 15: the cloud, so cloud is a big team. And then

954
00:48:35,440 --> 00:48:39,120
Speaker 15: another big theme is companies trying to embed security in

955
00:48:39,160 --> 00:48:42,520
Speaker 15: their applications earlier in the process, so before they even

956
00:48:42,800 --> 00:48:44,880
Speaker 15: write the code. So those are the two big themes

957
00:48:44,920 --> 00:48:46,000
Speaker 15: in cybersecurity.

958
00:48:46,040 --> 00:48:48,760
Speaker 6: Are there any names in particular that you guys like, Yeah.

959
00:48:48,560 --> 00:48:50,840
Speaker 15: We like z scaler a lot, so that's a cloud

960
00:48:51,200 --> 00:48:54,719
Speaker 15: a networking play, and then we also like CrowdStrike. That

961
00:48:54,840 --> 00:48:59,040
Speaker 15: would be more going downstream into embedding cybersecurity in the applications.

962
00:48:59,160 --> 00:49:00,919
Speaker 3: Is there one AI company that we're not talking about

963
00:49:00,960 --> 00:49:03,480
Speaker 3: that we should and again just got about fifteen seconds.

964
00:49:03,760 --> 00:49:06,640
Speaker 15: Well, there's a lot we disclose all our holdings on

965
00:49:06,680 --> 00:49:08,120
Speaker 15: our website and some of them.

966
00:49:07,960 --> 00:49:10,040
Speaker 4: Are directed in the headlines that you think we should

967
00:49:10,080 --> 00:49:10,879
Speaker 4: be paying notes.

968
00:49:10,960 --> 00:49:14,160
Speaker 15: Cloud Flat would probably not be getting enough attention. They

969
00:49:14,160 --> 00:49:18,719
Speaker 15: are building out a very unique network of GPUs and

970
00:49:18,760 --> 00:49:22,239
Speaker 15: they're enabling companies to be able to run these GPUs

971
00:49:22,320 --> 00:49:25,040
Speaker 15: and use a lot of the lllms. So I think

972
00:49:25,080 --> 00:49:26,879
Speaker 15: that's one maybe that I would highlight.

973
00:49:26,600 --> 00:49:28,839
Speaker 3: Great perspective on AI and I feel like covered ground

974
00:49:28,840 --> 00:49:29,680
Speaker 3: that we don't always cover.

975
00:49:29,800 --> 00:49:30,319
Speaker 4: So thank you.

976
00:49:30,560 --> 00:49:33,680
Speaker 3: Evanad Levska. She's founder in CIO at Spear Invest joining

977
00:49:33,760 --> 00:49:34,760
Speaker 3: us here in studio.

978
00:49:35,160 --> 00:49:38,280
Speaker 7: You're listening to the tape Can't our live program Bloomberg

979
00:49:38,360 --> 00:49:41,920
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the

980
00:49:42,000 --> 00:49:43,960
Speaker 7: tune in app, Bloomberg dot Com, and.

981
00:49:43,920 --> 00:49:45,239
Speaker 9: The Bloomberg Business App.

982
00:49:45,280 --> 00:49:48,080
Speaker 7: You can also listen live on Amazon Alexa from our

983
00:49:48,120 --> 00:49:53,160
Speaker 7: flagship New York station. Just say Alexa play Bloomberg eleven thirty.

984
00:49:53,880 --> 00:49:55,480
Speaker 3: Well, let's see what our next guest has to say

985
00:49:55,480 --> 00:49:57,920
Speaker 3: about kind of the macro environment that we are living in.

986
00:49:58,000 --> 00:50:01,560
Speaker 3: And what type of investments investors are really trending to

987
00:50:02,280 --> 00:50:04,799
Speaker 3: with us right now? Is Amanda Rabello, head of Extracker

988
00:50:04,920 --> 00:50:08,560
Speaker 3: sales US. I'm sure at the global asset manager DWS

989
00:50:08,640 --> 00:50:12,440
Speaker 3: Group Extrackers of course, the ETF brand owned by DWS,

990
00:50:12,560 --> 00:50:15,640
Speaker 3: which has roughly nine hundred billion in assets under a manager.

991
00:50:15,760 --> 00:50:18,279
Speaker 4: She joins us in studio. Hello, Hello, how are you?

992
00:50:18,480 --> 00:50:20,480
Speaker 4: I'm very well, thanks, How are you good? What do

993
00:50:20,520 --> 00:50:21,560
Speaker 4: you make of the macro environment?

994
00:50:21,600 --> 00:50:23,120
Speaker 3: We're kind of happy to start off a new quarter,

995
00:50:23,160 --> 00:50:25,040
Speaker 3: but it doesn't mean things won't carry over.

996
00:50:25,320 --> 00:50:26,080
Speaker 4: How do you see it?

997
00:50:26,400 --> 00:50:29,080
Speaker 16: Yeah, I think that what we feel is that FED

998
00:50:29,080 --> 00:50:31,560
Speaker 16: policy is being felt in the slowing housing market, and

999
00:50:31,560 --> 00:50:33,279
Speaker 16: we see that there are higher rates which are really

1000
00:50:33,320 --> 00:50:35,399
Speaker 16: a reflection of real rates as opposed to like higher

1001
00:50:35,400 --> 00:50:39,719
Speaker 16: inflation expectations. From the equity perspective, we're expecting by the

1002
00:50:39,800 --> 00:50:41,360
Speaker 16: end of the year that SMP is going to be

1003
00:50:41,360 --> 00:50:43,680
Speaker 16: at forty one hundred, and we do expect that there

1004
00:50:43,719 --> 00:50:45,840
Speaker 16: will be a rebound into next year to around the

1005
00:50:45,920 --> 00:50:48,320
Speaker 16: forty five hundred level, but it's a bit about months.

1006
00:50:48,480 --> 00:50:50,399
Speaker 6: Yeah, I was not expecting to go there.

1007
00:50:51,520 --> 00:50:53,399
Speaker 16: So if you think you'll depressed, we're depressed as.

1008
00:50:53,320 --> 00:50:57,680
Speaker 5: Well looking at different benchmarks. So you sp equal weighted,

1009
00:50:57,880 --> 00:51:00,799
Speaker 5: we were saying turn negative for the year today. Is

1010
00:51:00,840 --> 00:51:03,600
Speaker 5: that going to be trending more towards the downside given

1011
00:51:03,600 --> 00:51:05,200
Speaker 5: that call? Or do you see the Magnificent seven some

1012
00:51:05,280 --> 00:51:08,360
Speaker 5: of those bigger technology shares underperforming the rest of the

1013
00:51:08,680 --> 00:51:09,600
Speaker 5: kind of market.

1014
00:51:09,760 --> 00:51:10,000
Speaker 15: Yeah.

1015
00:51:10,080 --> 00:51:12,240
Speaker 16: So actually equal weight is something that we've been speaking

1016
00:51:12,280 --> 00:51:14,480
Speaker 16: to investors for a long time. We actually have a

1017
00:51:14,480 --> 00:51:17,040
Speaker 16: product in Europe which is almost five years old, and

1018
00:51:18,080 --> 00:51:19,640
Speaker 16: you know, I think that all of these kind of

1019
00:51:19,640 --> 00:51:22,680
Speaker 16: sexual overweights are definitely something that investors are thinking about.

1020
00:51:22,719 --> 00:51:25,040
Speaker 16: Only last week we actually had clients also asking us

1021
00:51:25,040 --> 00:51:27,759
Speaker 16: about how do they get rid of overweights in financials

1022
00:51:27,800 --> 00:51:30,839
Speaker 16: as well, for example, you know, especially and I don't

1023
00:51:30,840 --> 00:51:33,160
Speaker 16: think that's necessarily a big name financially like the big

1024
00:51:33,239 --> 00:51:35,800
Speaker 16: name financial so not even like the fears around smaller

1025
00:51:35,840 --> 00:51:39,400
Speaker 16: banks and more banks collapsing. I think that, you know,

1026
00:51:39,480 --> 00:51:41,959
Speaker 16: at the end of the day, there is a need

1027
00:51:42,000 --> 00:51:44,480
Speaker 16: for stepping away from market cap weighted. We think it

1028
00:51:44,560 --> 00:51:46,520
Speaker 16: makes sense a little bit more to think about quality

1029
00:51:46,560 --> 00:51:47,680
Speaker 16: and value inherent in.

1030
00:51:48,120 --> 00:51:49,080
Speaker 12: US large caps.

1031
00:51:49,080 --> 00:51:51,520
Speaker 16: So we've been speaking a lot about our co product

1032
00:51:51,600 --> 00:51:54,440
Speaker 16: quality as a reasonable price so it's based on like

1033
00:51:54,480 --> 00:51:58,480
Speaker 16: the Russell one thousand, thinking about those stocks that display strong,

1034
00:51:58,880 --> 00:52:03,400
Speaker 16: strong components or a strong kind of direction towards quality

1035
00:52:03,480 --> 00:52:06,040
Speaker 16: and value. And we think that usually we kind of

1036
00:52:06,040 --> 00:52:07,359
Speaker 16: think more about single.

1037
00:52:07,120 --> 00:52:09,000
Speaker 4: Facts quality in today's environment.

1038
00:52:09,120 --> 00:52:11,640
Speaker 16: Yeah, so quality is thinking about you know, kind of

1039
00:52:11,719 --> 00:52:15,839
Speaker 16: smaller draw downs, but also thinking about robustness and paying

1040
00:52:15,840 --> 00:52:18,840
Speaker 16: out dividends as well, and you know divs more more broadly.

1041
00:52:18,880 --> 00:52:20,440
Speaker 16: You know, there's a lot of demand for bird in

1042
00:52:20,480 --> 00:52:23,120
Speaker 16: hand basically, so if you can't be sure where your

1043
00:52:23,239 --> 00:52:25,600
Speaker 16: price return is going to be, at least thinking about

1044
00:52:25,600 --> 00:52:28,160
Speaker 16: your total return, but grabbing the dividend beforehand.

1045
00:52:28,719 --> 00:52:30,759
Speaker 3: That feels conservative to me when I think people are

1046
00:52:30,920 --> 00:52:34,680
Speaker 3: I think about old dividend reinvestment plans.

1047
00:52:33,719 --> 00:52:35,840
Speaker 16: Even if you don't need income, right people are asking

1048
00:52:35,880 --> 00:52:36,279
Speaker 16: for this.

1049
00:52:37,040 --> 00:52:38,560
Speaker 5: Well, when you look at the market right now, we

1050
00:52:38,600 --> 00:52:41,359
Speaker 5: have a ten year old yield at four point sixty

1051
00:52:41,440 --> 00:52:43,920
Speaker 5: nine percent. Jamie Diamond was asked if rates can go

1052
00:52:43,960 --> 00:52:46,120
Speaker 5: to seven percent. He said, the answer is yes. What

1053
00:52:46,280 --> 00:52:49,000
Speaker 5: starts to break if we see rates in the seven

1054
00:52:49,040 --> 00:52:49,880
Speaker 5: percent range?

1055
00:52:50,400 --> 00:52:52,120
Speaker 16: Well, I think, really you think about kind of the

1056
00:52:52,120 --> 00:52:54,080
Speaker 16: impact something that we're speaking about on the desk, A

1057
00:52:54,080 --> 00:52:57,719
Speaker 16: lot is consumer credits, right, So then I think already

1058
00:52:57,760 --> 00:52:59,719
Speaker 16: we start to feel the pinch all of us, you know,

1059
00:52:59,840 --> 00:53:03,200
Speaker 16: like people in our industry, for example, we're definitely not

1060
00:53:03,239 --> 00:53:06,040
Speaker 16: at the brunt of like having kind of very tight

1061
00:53:06,200 --> 00:53:09,680
Speaker 16: kind of earnings and so forth, like from a household perspective.

1062
00:53:09,920 --> 00:53:12,799
Speaker 16: But if even we're complaining about oil prices, about the

1063
00:53:12,840 --> 00:53:15,439
Speaker 16: price of gas, about the price of milk, eggs, kind

1064
00:53:15,440 --> 00:53:18,960
Speaker 16: of all of these things, then I think a lot

1065
00:53:18,960 --> 00:53:21,040
Speaker 16: of people start to be more dependent on credit cards,

1066
00:53:21,040 --> 00:53:23,879
Speaker 16: for example, and you obviously see then like a higher

1067
00:53:23,960 --> 00:53:25,839
Speaker 16: rate that they need for financing.

1068
00:53:25,880 --> 00:53:26,040
Speaker 9: Then.

1069
00:53:26,160 --> 00:53:29,040
Speaker 16: So, I mean, I was in the industry in two

1070
00:53:29,080 --> 00:53:31,799
Speaker 16: thousand and seven. I remember US launching GMAC bonds at

1071
00:53:31,800 --> 00:53:34,400
Speaker 16: par and then two weeks later they're selling it like

1072
00:53:34,480 --> 00:53:37,400
Speaker 16: sixty five to the dollar. I'm hoping it's not going

1073
00:53:37,480 --> 00:53:40,400
Speaker 16: to be as drammass as dramatic as that, but I

1074
00:53:40,440 --> 00:53:42,600
Speaker 16: think that there is a possibility that you start to

1075
00:53:42,600 --> 00:53:44,560
Speaker 16: feel like more pressure on the consumer from.

1076
00:53:44,360 --> 00:53:47,160
Speaker 3: That from a credit perspective, that feels pretty negative. Yeah,

1077
00:53:47,200 --> 00:53:49,359
Speaker 3: that we could actually get there on the consumer side

1078
00:53:49,400 --> 00:53:52,200
Speaker 3: of things. And you know, we always talk about how

1079
00:53:52,239 --> 00:53:54,600
Speaker 3: important the consumer is, certainly to the US economy and

1080
00:53:54,680 --> 00:53:57,200
Speaker 3: keeping momentum going. So yeah, are you saying that we

1081
00:53:57,280 --> 00:54:00,799
Speaker 3: could potentially see an seven eight feel But it's the

1082
00:54:00,800 --> 00:54:02,360
Speaker 3: consumer version of the story.

1083
00:54:02,800 --> 00:54:05,480
Speaker 16: I think it kind of ends up transpiring through the

1084
00:54:05,880 --> 00:54:09,439
Speaker 16: whole system potentially. But what's interesting is that maybe versus

1085
00:54:09,480 --> 00:54:11,640
Speaker 16: two thousand and seven, you actually have more global equity

1086
00:54:11,680 --> 00:54:15,400
Speaker 16: firms now that are reliant on kind of US consumer

1087
00:54:15,440 --> 00:54:19,360
Speaker 16: revenues and vice versa. Right, So maybe there's kind of

1088
00:54:19,360 --> 00:54:21,880
Speaker 16: scope for some contagion in some regard in terms of

1089
00:54:22,040 --> 00:54:24,799
Speaker 16: you know, I'm from the UK, foots one hundred is

1090
00:54:24,840 --> 00:54:27,560
Speaker 16: not just about UK consumer spending and UK kind of

1091
00:54:27,560 --> 00:54:31,960
Speaker 16: industrial demand, the same for you know, dax KAC forty

1092
00:54:32,560 --> 00:54:34,600
Speaker 16: and likewise the SMP as well with the rest of

1093
00:54:34,600 --> 00:54:37,120
Speaker 16: the world, and especially now you start to see kind

1094
00:54:37,120 --> 00:54:39,239
Speaker 16: of more broadly not just US rates going up, but

1095
00:54:39,280 --> 00:54:42,399
Speaker 16: also European rates as well for example. Then I think

1096
00:54:42,440 --> 00:54:46,400
Speaker 16: it's maybe not not something that we can always isolate.

1097
00:54:46,520 --> 00:54:50,320
Speaker 5: So new month, new quarter earnings are on the horizon.

1098
00:54:50,640 --> 00:54:53,080
Speaker 5: What matters the most when we go into the fourth quarter.

1099
00:54:53,160 --> 00:54:55,040
Speaker 5: You said forty one hundred on the SMP. We haven't

1100
00:54:55,040 --> 00:54:57,520
Speaker 5: been that level since the day, So is that that's

1101
00:54:57,600 --> 00:55:00,560
Speaker 5: me since is that earnings breaking is that the FED

1102
00:55:00,760 --> 00:55:04,160
Speaker 5: hiking again, is that the economic data really kind of

1103
00:55:04,800 --> 00:55:05,520
Speaker 5: petering out.

1104
00:55:05,680 --> 00:55:06,520
Speaker 4: So we do think that.

1105
00:55:06,480 --> 00:55:10,759
Speaker 16: There are some opportunities even despite this this kind of

1106
00:55:10,760 --> 00:55:14,960
Speaker 16: embarish tone that in that projection, what we quite like

1107
00:55:15,080 --> 00:55:17,239
Speaker 16: is we think there's some opportunities in small cap. We

1108
00:55:17,280 --> 00:55:20,200
Speaker 16: think again it goes back to buying the right names

1109
00:55:20,239 --> 00:55:22,839
Speaker 16: within the S and P five hundred as well if

1110
00:55:22,880 --> 00:55:24,359
Speaker 16: you if you do want to look at large cap

1111
00:55:24,400 --> 00:55:27,160
Speaker 16: and then also in the MIDP part, we quite like

1112
00:55:27,320 --> 00:55:30,160
Speaker 16: thinking about Europe as well. And that's not just because

1113
00:55:30,160 --> 00:55:32,600
Speaker 16: we're a European house. We do think even our US

1114
00:55:32,640 --> 00:55:36,239
Speaker 16: American's CIO thinks this as well. There is some opportunity

1115
00:55:36,239 --> 00:55:39,560
Speaker 16: in European equities. Obviously, they were hammered last year, you know,

1116
00:55:39,640 --> 00:55:41,600
Speaker 16: continue to be hammered into the first half of the

1117
00:55:41,680 --> 00:55:44,000
Speaker 16: year as well, so we think there's a value component there.

1118
00:55:44,040 --> 00:55:46,880
Speaker 16: And then when you think about European equities they typically

1119
00:55:46,880 --> 00:55:49,920
Speaker 16: always yield more than US equities as well. So SMP

1120
00:55:50,080 --> 00:55:53,360
Speaker 16: did yield is about one point five five percent the

1121
00:55:55,239 --> 00:55:58,480
Speaker 16: EUROSOX fifty for examples around I think four thirty five

1122
00:55:58,560 --> 00:56:00,759
Speaker 16: something like that. And then if you think about a

1123
00:56:00,880 --> 00:56:04,920
Speaker 16: dividend focused strategy on international equities, of which European equities

1124
00:56:04,960 --> 00:56:08,160
Speaker 16: is a large part of that. Think about HTEPH for example.

1125
00:56:08,160 --> 00:56:10,080
Speaker 16: In our range, you can end up yielding something like

1126
00:56:10,120 --> 00:56:12,160
Speaker 16: five point six five percent on an annual Live.

1127
00:56:12,080 --> 00:56:14,680
Speaker 3: Amanda, were you guys as negative? This feels pretty negative?

1128
00:56:14,840 --> 00:56:17,000
Speaker 3: Were you as negative a month ago? Two months ago?

1129
00:56:17,960 --> 00:56:20,880
Speaker 16: I think we were feeling around the same level, to

1130
00:56:20,920 --> 00:56:23,560
Speaker 16: be honest, Ye, But then you know, you see days

1131
00:56:23,560 --> 00:56:26,040
Speaker 16: like today where the screen is read again because r.

1132
00:56:26,120 --> 00:56:27,920
Speaker 4: We go back pre August and it felt like it

1133
00:56:28,000 --> 00:56:28,960
Speaker 4: just kept getting.

1134
00:56:28,719 --> 00:56:31,560
Speaker 6: Better and everyone was exciting. There was no one really

1135
00:56:31,920 --> 00:56:33,879
Speaker 6: calling a forty one hundred for sure.

1136
00:56:34,000 --> 00:56:37,120
Speaker 16: Yeah, I think it's forty one hundred forecast. It emerged

1137
00:56:37,120 --> 00:56:39,480
Speaker 16: from US at the end of August, so we've had

1138
00:56:39,520 --> 00:56:40,480
Speaker 16: it on for about a month.

1139
00:56:40,560 --> 00:56:42,360
Speaker 4: Yeah, for about a month. Okay. It's just interesting.

1140
00:56:42,520 --> 00:56:44,520
Speaker 3: That feels like a much more negative tone, although it

1141
00:56:44,560 --> 00:56:46,719
Speaker 3: kind of seems to me to fit with some conversations

1142
00:56:46,760 --> 00:56:50,280
Speaker 3: we've been having with folks about like maybe we're underestimating

1143
00:56:50,280 --> 00:56:52,160
Speaker 3: that it could be worse off than we thought.

1144
00:56:52,360 --> 00:56:55,000
Speaker 5: Yeah, and if we see a US recession, how long

1145
00:56:55,080 --> 00:56:56,200
Speaker 5: and how deep does that go?

1146
00:56:56,440 --> 00:56:58,239
Speaker 6: I guess with your kind of expectations.

1147
00:56:58,440 --> 00:57:01,439
Speaker 4: Just got about five seconds, I think.

1148
00:57:01,480 --> 00:57:03,680
Speaker 16: To be honest, we haven't yet thought about how long

1149
00:57:03,719 --> 00:57:05,400
Speaker 16: that will be, but when we do, we'll.

1150
00:57:05,239 --> 00:57:05,799
Speaker 4: Get back to you.

1151
00:57:05,920 --> 00:57:08,200
Speaker 3: All right, Well, we will definitely check in. Meta Rebello,

1152
00:57:08,280 --> 00:57:12,000
Speaker 3: head of ex Tracker Sales over at DWS Group. This

1153
00:57:12,320 --> 00:57:13,200
Speaker 3: is Bloomberg Radio.

1154
00:57:13,600 --> 00:57:16,720
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can

1155
00:57:16,760 --> 00:57:20,520
Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever

1156
00:57:20,600 --> 00:57:24,320
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

1157
00:57:24,520 --> 00:57:26,600
Speaker 1: at Matt Miller nineteen seventy three.

1158
00:57:26,920 --> 00:57:27,760
Speaker 2: And I'm fall Sweeney.

1159
00:57:27,800 --> 00:57:29,280
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1160
00:57:29,400 --> 00:57:32,080
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1161
00:57:32,080 --> 00:57:32,840
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