1 00:00:00,080 --> 00:00:12,879 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:12,960 --> 00:00:16,960 Speaker 1: Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join 3 00:00:17,079 --> 00:00:21,000 Speaker 1: us each day for insight from the best in economics, finance, investment, 4 00:00:21,200 --> 00:00:24,840 Speaker 1: and international relations. You can also watch the show live 5 00:00:25,079 --> 00:00:29,400 Speaker 1: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 6 00:00:29,520 --> 00:00:32,920 Speaker 1: see the show weekday mornings from seven to ten am 7 00:00:32,960 --> 00:00:37,000 Speaker 1: Eastern from our global headquarters in New York City. Subscribe 8 00:00:37,000 --> 00:00:40,760 Speaker 1: to the podcast on Apple, Spotify, or anywhere else you listen. 9 00:00:41,080 --> 00:00:44,720 Speaker 1: And always I'm Bloomberg Radio, the Bloomberg Terminal, and the 10 00:00:44,760 --> 00:00:48,599 Speaker 1: Bloomberg Business App. Ira Jersey with us here a Bloomberg Intelligence. 11 00:00:48,640 --> 00:00:50,560 Speaker 1: We're going to look at the inflation report. We welcome 12 00:00:50,640 --> 00:00:53,920 Speaker 1: all of you across the nation, around the world on YouTube, 13 00:00:54,040 --> 00:00:58,000 Speaker 1: subscribe to Bloomberg Podcasts, and with that we are here 14 00:00:58,120 --> 00:01:02,480 Speaker 1: commercial free through this important, this critical inflation report, and 15 00:01:02,520 --> 00:01:04,840 Speaker 1: we'll move on. Tifity Wilding and Pimco to join us 16 00:01:04,880 --> 00:01:07,640 Speaker 1: here in a bit. But right now, Ira Jersey with us, 17 00:01:07,680 --> 00:01:12,240 Speaker 1: let me frame out equities, bonds, currencies, commodities, futures lifting 18 00:01:12,319 --> 00:01:15,280 Speaker 1: not because of Ira Jersey, lifting because of tech. Some 19 00:01:15,360 --> 00:01:18,360 Speaker 1: better feeling their futures up twenty six NASDAK up now 20 00:01:18,520 --> 00:01:21,280 Speaker 1: solid eight tens of a percent. The VIX comes in 21 00:01:21,280 --> 00:01:24,200 Speaker 1: a bit fifteen point four to six. You'd look for 22 00:01:24,240 --> 00:01:26,720 Speaker 1: that to be better than good. Here in a bit 23 00:01:26,880 --> 00:01:30,760 Speaker 1: in the yield space ten year yield three point eight 24 00:01:30,959 --> 00:01:34,160 Speaker 1: five percent. We'll see where that goes. Jersey looking for 25 00:01:34,240 --> 00:01:39,559 Speaker 1: lower yields forwards. So the inflation report that Chairman Powell 26 00:01:39,680 --> 00:01:44,160 Speaker 1: cares about, we'll get that to you right now. Waiting 27 00:01:44,200 --> 00:01:47,200 Speaker 1: on the screen ere on the Friday before Labor Day 28 00:01:47,240 --> 00:01:50,800 Speaker 1: takes a few seconds longer. Personal income comes in higher 29 00:01:50,800 --> 00:01:55,120 Speaker 1: than survey spending right on survey and elevated zero point 30 00:01:55,120 --> 00:02:00,240 Speaker 1: five percent PCE all on plan, but year over year 31 00:02:00,440 --> 00:02:05,240 Speaker 1: core PCE disinflates a little bit off survey last month 32 00:02:05,280 --> 00:02:08,760 Speaker 1: two point six percent, this month two point six percent. 33 00:02:08,800 --> 00:02:11,720 Speaker 1: We looked for an elevation there, but pretty much PCE 34 00:02:12,200 --> 00:02:17,720 Speaker 1: on plan. Where spending came in from zero point three 35 00:02:18,040 --> 00:02:22,240 Speaker 1: up to zero point five on survey, and personal income 36 00:02:22,840 --> 00:02:25,400 Speaker 1: did a little bit better. I'm waiting for the revised numbers. 37 00:02:25,440 --> 00:02:28,240 Speaker 1: We'll get them out in a moment. In the markets, 38 00:02:28,240 --> 00:02:32,760 Speaker 1: the vis comes in a more bullish fifteen point twenty 39 00:02:32,840 --> 00:02:36,160 Speaker 1: five futures of up to twenty six pretty much. Stage 40 00:02:36,280 --> 00:02:37,960 Speaker 1: is maybe a little bit of a bid to the 41 00:02:38,040 --> 00:02:41,240 Speaker 1: nastac up nine tenths of a percent right now in 42 00:02:41,280 --> 00:02:44,160 Speaker 1: Ira jerseys yield space, I'm giving him time for what 43 00:02:44,400 --> 00:02:46,280 Speaker 1: the racket, ear, folks is. I got to do this 44 00:02:46,400 --> 00:02:49,640 Speaker 1: data check half as good as Karen Moscow while we 45 00:02:49,720 --> 00:02:53,440 Speaker 1: let Ira Jersey and David Gurra sort out the details. 46 00:02:53,440 --> 00:02:56,840 Speaker 1: Two year yield three point nine zero percent, a little 47 00:02:56,840 --> 00:03:00,200 Speaker 1: bit higher yield, but the yield's not really moving all 48 00:03:00,240 --> 00:03:01,919 Speaker 1: that much. I look at the ten year, really old 49 00:03:01,960 --> 00:03:04,840 Speaker 1: one point six nine percent. I do, okay there, David, 50 00:03:04,919 --> 00:03:06,400 Speaker 1: that was great. I mean you walked. 51 00:03:06,880 --> 00:03:08,640 Speaker 2: Do we get the revision? We got the revision, there's 52 00:03:09,320 --> 00:03:09,880 Speaker 2: point three. 53 00:03:10,280 --> 00:03:14,400 Speaker 1: Yeah, and again personal spending revision was a tick higher. 54 00:03:14,480 --> 00:03:18,040 Speaker 1: This is this is important. We continue now with Ira 55 00:03:18,200 --> 00:03:21,880 Speaker 1: Jersey of Bloomberg Intelligence. Ira, I guess it's on plan 56 00:03:22,280 --> 00:03:28,000 Speaker 1: on survey, and yet there's a lift involved, isn't there. Yeah? 57 00:03:28,040 --> 00:03:30,079 Speaker 3: So I think you know, when you when you look 58 00:03:30,120 --> 00:03:32,720 Speaker 3: at the headline data overall, and obviously we'll you know, 59 00:03:32,880 --> 00:03:34,600 Speaker 3: have to focus in on the details. Like I mentioned, 60 00:03:34,639 --> 00:03:36,960 Speaker 3: I want to see what services spending was like and 61 00:03:36,960 --> 00:03:40,160 Speaker 3: and uh, services inflation. But but the economists got it 62 00:03:40,240 --> 00:03:42,120 Speaker 3: right this time, I think, more or less in terms 63 00:03:42,200 --> 00:03:45,640 Speaker 3: of the UH. In terms of the pace of inflation. 64 00:03:46,160 --> 00:03:48,760 Speaker 3: You know, interestingly, we haven't really slowed much, right, So 65 00:03:48,840 --> 00:03:51,640 Speaker 3: July didn't see a slow down in inflation, but still 66 00:03:51,640 --> 00:03:53,480 Speaker 3: two and a half percent on headline and more or 67 00:03:53,560 --> 00:03:57,200 Speaker 3: less right there on on core inflation year on year. 68 00:03:57,880 --> 00:04:00,920 Speaker 3: It has to give the the Reserve at least a 69 00:04:00,920 --> 00:04:03,400 Speaker 3: little bit of comfort that they, you know, if they 70 00:04:03,400 --> 00:04:06,560 Speaker 3: cut interest rates and they go slowly, that that inflation 71 00:04:06,640 --> 00:04:10,280 Speaker 3: can continue to come down at least a little bit. 72 00:04:11,280 --> 00:04:14,240 Speaker 3: You know, the the data that that you mentioned, you know, 73 00:04:14,320 --> 00:04:18,119 Speaker 3: personal spending higher month on month, although in line with expectations. 74 00:04:18,160 --> 00:04:19,640 Speaker 3: You know that that's actually a decent sign. 75 00:04:19,760 --> 00:04:19,839 Speaker 4: Right. 76 00:04:19,880 --> 00:04:22,200 Speaker 3: So the the the idea that we're having a soft 77 00:04:22,279 --> 00:04:25,400 Speaker 3: landing is is certainly playing out in this data for 78 00:04:25,440 --> 00:04:28,240 Speaker 3: this one month. Will it persist? I don't think so. 79 00:04:28,360 --> 00:04:30,479 Speaker 3: But at the same time, you have to take the 80 00:04:30,480 --> 00:04:32,960 Speaker 3: incoming data and put that into your your thinking and 81 00:04:33,080 --> 00:04:35,440 Speaker 3: your your entire your entire outlook going forward. 82 00:04:35,720 --> 00:04:37,280 Speaker 2: Tom, I'm gonna lob one at you if I can. 83 00:04:37,360 --> 00:04:39,880 Speaker 2: I mean, you were out in Northwest Wyoming last week 84 00:04:40,200 --> 00:04:43,000 Speaker 2: when the FED chairman spoke and we've said all morning, 85 00:04:43,000 --> 00:04:44,480 Speaker 2: as we say all the time, this is the Fed's 86 00:04:44,520 --> 00:04:47,960 Speaker 2: preferred inflation metric. How important is this reading to the Fed? 87 00:04:48,040 --> 00:04:49,520 Speaker 2: I'd look ahead to next week, of course in the 88 00:04:49,560 --> 00:04:52,040 Speaker 2: job support, which strikes me as being so paramount in 89 00:04:52,080 --> 00:04:54,960 Speaker 2: comparison to this one. What does this one mean to policymakers? 90 00:04:55,000 --> 00:04:58,719 Speaker 1: Christmas Bowie Chadam Financial said she's looking at service sector 91 00:04:58,720 --> 00:05:03,400 Speaker 1: inflation in Europe, France with disinflation, Spain with disinflation. IIRA 92 00:05:03,560 --> 00:05:05,920 Speaker 1: here three minutes in do you have a service sector 93 00:05:06,360 --> 00:05:09,240 Speaker 1: statistic yet? Because I think that's what they're waiting for 94 00:05:09,279 --> 00:05:10,120 Speaker 1: in Jackson a Hole. 95 00:05:10,440 --> 00:05:12,600 Speaker 3: I'm waiting for the some of the details to come 96 00:05:12,600 --> 00:05:16,120 Speaker 3: out on the terminal and it's you know, the inflating 97 00:05:16,360 --> 00:05:18,760 Speaker 3: inflation number bisector is not out yet. But when I 98 00:05:18,760 --> 00:05:21,640 Speaker 3: look at things like the personal income data at zero 99 00:05:21,720 --> 00:05:25,240 Speaker 3: point three percent and disposable income still up zero point 100 00:05:25,279 --> 00:05:28,200 Speaker 3: three percent, you know that that's actually a pretty good sign. 101 00:05:28,200 --> 00:05:28,560 Speaker 1: I agree. 102 00:05:28,600 --> 00:05:31,360 Speaker 3: Fact that you have disposable income continuing to rise at 103 00:05:31,360 --> 00:05:34,480 Speaker 3: a reasonable pace means that spending might continue to be robust, 104 00:05:34,520 --> 00:05:35,440 Speaker 3: at least for the near term. 105 00:05:35,600 --> 00:05:37,360 Speaker 1: IRA, Thank you so much, she's got to go dive 106 00:05:37,400 --> 00:05:40,920 Speaker 1: into the data. Ira Jersey will publish for Bloomberg Intelligence 107 00:05:40,960 --> 00:05:44,000 Speaker 1: here within the r He's also out with new forecasts 108 00:05:44,040 --> 00:05:47,240 Speaker 1: three point six six percent, sort of a blended fan 109 00:05:47,320 --> 00:05:50,279 Speaker 1: distribution of the ten year at yield and that yield 110 00:05:50,400 --> 00:05:55,200 Speaker 1: right now, excuse me, pretty much unchanged three point eighty 111 00:05:55,200 --> 00:05:58,280 Speaker 1: six at percent and the economics of the moment. Tifity 112 00:05:58,279 --> 00:06:02,640 Speaker 1: Wilding joins from the Pacific Investment Management Company PIMCO, where 113 00:06:02,640 --> 00:06:07,159 Speaker 1: she is a Managing Director Economist North America at Tiffany. 114 00:06:07,200 --> 00:06:09,359 Speaker 1: I know you have to wait and dive into the data, 115 00:06:09,440 --> 00:06:11,919 Speaker 1: or the media frenzy here at eight thirty four is 116 00:06:12,000 --> 00:06:17,000 Speaker 1: unfair to you. But the feeling I get here is 117 00:06:17,200 --> 00:06:20,560 Speaker 1: trend based disinflation. Am I off the mark? 118 00:06:23,200 --> 00:06:25,240 Speaker 4: Yeah? I mean you know what I would just say, 119 00:06:25,279 --> 00:06:27,520 Speaker 4: taking a step back when you look at a wide 120 00:06:27,600 --> 00:06:30,440 Speaker 4: range of data, it is it is getting back to, 121 00:06:30,800 --> 00:06:33,880 Speaker 4: you know, some semblance of pre pandemic. You know, you 122 00:06:33,880 --> 00:06:37,200 Speaker 4: look at headline inflation levels, there were some stickier pieces 123 00:06:37,240 --> 00:06:41,559 Speaker 4: of underlying inflation. But now that labor market adjustment looks 124 00:06:41,600 --> 00:06:45,039 Speaker 4: like it's happening more fully, you know, those pieces of 125 00:06:45,040 --> 00:06:48,880 Speaker 4: stickier inflation will will be trending back to target. And 126 00:06:48,960 --> 00:06:51,600 Speaker 4: so when you kind of look around the economy, things look, 127 00:06:51,880 --> 00:06:53,880 Speaker 4: you know, like they're getting back to some semblance of 128 00:06:53,880 --> 00:06:56,200 Speaker 4: normal after the unique set of shocks that we had 129 00:06:56,279 --> 00:06:58,600 Speaker 4: post pandemic. And I think the thing that's you know, 130 00:06:58,640 --> 00:07:01,760 Speaker 4: not as normal that really stands out, obviously is the 131 00:07:01,760 --> 00:07:05,279 Speaker 4: policy rate. You know, and obviously Federal Reserve officials understand 132 00:07:05,279 --> 00:07:08,840 Speaker 4: that Powe was very clear at Jackson Hole that they 133 00:07:08,839 --> 00:07:12,520 Speaker 4: are going to start that journey back to normal or 134 00:07:12,560 --> 00:07:14,520 Speaker 4: at least kind of what they think could be normal. 135 00:07:14,680 --> 00:07:17,360 Speaker 4: And you know, and the pace of that is really 136 00:07:17,440 --> 00:07:20,200 Speaker 4: going to depend on on the data from here, and 137 00:07:20,560 --> 00:07:23,280 Speaker 4: you know, if we see economic weakness, then then they'll 138 00:07:23,280 --> 00:07:23,840 Speaker 4: go faster. 139 00:07:24,360 --> 00:07:26,720 Speaker 2: Tiffany, I really appreciate that. I'm kind of situating it 140 00:07:26,720 --> 00:07:28,720 Speaker 2: in this in this moment of the way that we 141 00:07:28,840 --> 00:07:31,560 Speaker 2: had Brian Levitt doing it at Katie Kaminsky earlier in 142 00:07:31,600 --> 00:07:33,880 Speaker 2: the show. This this notion that there has been this 143 00:07:33,960 --> 00:07:37,120 Speaker 2: kind of post pandemic readjustment that might not be as 144 00:07:37,160 --> 00:07:40,280 Speaker 2: notable or as noticeable as the kind of initial adjustment 145 00:07:40,360 --> 00:07:42,920 Speaker 2: that we had. Where are we in this cycle, as 146 00:07:42,960 --> 00:07:44,240 Speaker 2: you see it, when you look at what we're getting 147 00:07:44,240 --> 00:07:46,720 Speaker 2: in terms of inflation data, pulling back more broadly to 148 00:07:46,720 --> 00:07:49,480 Speaker 2: look at labor data as well, give us a sense 149 00:07:49,480 --> 00:07:51,160 Speaker 2: of where this economy is as you see it. 150 00:07:53,040 --> 00:07:54,720 Speaker 4: Yeah, well, I mean I think I think the labor 151 00:07:54,720 --> 00:07:57,560 Speaker 4: market data has has been you know, sort of confusing, 152 00:07:57,840 --> 00:08:01,400 Speaker 4: if you will, the usual sign in the labor market 153 00:08:01,960 --> 00:08:04,640 Speaker 4: of an underlying economy that's not doing well. I The 154 00:08:04,720 --> 00:08:08,360 Speaker 4: unemployment rate rising, I think is a bit of you 155 00:08:08,440 --> 00:08:11,160 Speaker 4: have to, you know, kind of dig into the drivers 156 00:08:11,160 --> 00:08:13,160 Speaker 4: of that indicator, because if you just looked at the 157 00:08:13,200 --> 00:08:15,640 Speaker 4: labor market and you looked at nothing else, you would 158 00:08:15,680 --> 00:08:18,640 Speaker 4: be incredibly worried about a recession. But if you look 159 00:08:18,640 --> 00:08:21,320 Speaker 4: at a broader range of indicators of the economy, it 160 00:08:21,320 --> 00:08:24,200 Speaker 4: looks like it's doing okay. Right, It's a soft landing 161 00:08:24,360 --> 00:08:27,960 Speaker 4: if anything. You know, the activity data, the growth data, 162 00:08:28,040 --> 00:08:30,880 Speaker 4: the GDP data have been coming in better than expected. 163 00:08:31,280 --> 00:08:32,600 Speaker 4: So I think you have to, you know, kind of 164 00:08:32,600 --> 00:08:34,600 Speaker 4: take a step back and you know, just again understand 165 00:08:34,600 --> 00:08:36,960 Speaker 4: that there's been a unique set of shocks since the pandemic. 166 00:08:37,040 --> 00:08:41,000 Speaker 4: It's made indicators, usual economic indicators, more difficult to read. 167 00:08:41,679 --> 00:08:44,439 Speaker 4: And I think the unemployment rate right now is one 168 00:08:44,480 --> 00:08:45,160 Speaker 4: of those things. 169 00:08:45,520 --> 00:08:48,160 Speaker 1: I mean, difficult to read. I'm sorry at a three 170 00:08:48,240 --> 00:08:52,000 Speaker 1: percent real GDP ending June thirty, I got a five 171 00:08:52,040 --> 00:08:55,600 Speaker 1: and a half percent amateurs look at nominal GDP led 172 00:08:55,640 --> 00:09:01,320 Speaker 1: by Newport Beach, California. I mean, Tiffany, we've been wrong, wrong, wrong, 173 00:09:01,640 --> 00:09:05,480 Speaker 1: on the resilience and spirit of America. When you sit 174 00:09:05,600 --> 00:09:08,880 Speaker 1: with cynics like Jerome Schneider and the other animals at 175 00:09:08,880 --> 00:09:11,559 Speaker 1: pimcoh are you trying to tell them it's not as 176 00:09:11,559 --> 00:09:12,720 Speaker 1: bad out there as your thing? 177 00:09:12,880 --> 00:09:13,920 Speaker 2: His words, not yours? 178 00:09:16,240 --> 00:09:18,439 Speaker 4: Yeah, I mean, I think the you know, I guess 179 00:09:18,520 --> 00:09:20,920 Speaker 4: the point that I would just really emphasize is that, 180 00:09:21,040 --> 00:09:23,320 Speaker 4: you know, when you look at the labor market, the 181 00:09:23,320 --> 00:09:26,160 Speaker 4: things that have driven the unemployment rate higher this time 182 00:09:27,040 --> 00:09:30,400 Speaker 4: is more about labor supply. Obviously, over the last few years, 183 00:09:30,440 --> 00:09:34,000 Speaker 4: we've gotten a surge of immigration, and that has resulted 184 00:09:34,120 --> 00:09:36,960 Speaker 4: in a higher unemployment rate. Because you just have more 185 00:09:37,000 --> 00:09:41,040 Speaker 4: people in the labor force, you're not actually seeing layoffs now. 186 00:09:41,040 --> 00:09:44,160 Speaker 4: I certainly we could start to see more material layoffs 187 00:09:44,200 --> 00:09:47,440 Speaker 4: across the economy, but you know, I would just say, overall, 188 00:09:47,800 --> 00:09:51,720 Speaker 4: you know, the things still appear relatively strong, and usually 189 00:09:51,760 --> 00:09:54,240 Speaker 4: when you have labor supply gains you know that's actually 190 00:09:54,280 --> 00:09:56,960 Speaker 4: good for the economy. More people are consuming, where people 191 00:09:57,000 --> 00:10:00,439 Speaker 4: are working. It's not usually the time and where you're 192 00:10:00,440 --> 00:10:01,559 Speaker 4: going into recession. 193 00:10:01,920 --> 00:10:04,679 Speaker 1: Tiffany Wedding, thank you so much, greatly appreciate it. This 194 00:10:04,720 --> 00:10:17,680 Speaker 1: morning here our team is just done a wonderful job. 195 00:10:17,720 --> 00:10:21,079 Speaker 1: I can't really can't say enough about the intelligence of 196 00:10:21,120 --> 00:10:24,000 Speaker 1: the conversation throughout all of this week, as we had 197 00:10:24,080 --> 00:10:29,680 Speaker 1: Katherin Kaminsky in earlier with Elpha simplex, wicked, quantitative Massachusetts 198 00:10:29,679 --> 00:10:34,120 Speaker 1: Institute of Technology think Andrew Lowe. She knows where epsilon is. 199 00:10:34,720 --> 00:10:38,360 Speaker 1: Someone with the same prodigious chops is Cam Dawson new 200 00:10:38,440 --> 00:10:41,640 Speaker 1: edge that joins us right now, I think also with 201 00:10:41,800 --> 00:10:45,720 Speaker 1: a much more almost barrens like focus on. Hey, here's 202 00:10:45,760 --> 00:10:48,560 Speaker 1: the confidence to be in the market. Thrilled to have 203 00:10:48,640 --> 00:10:50,960 Speaker 1: you here. Thank you for coming out on Friday, I 204 00:10:50,960 --> 00:10:54,080 Speaker 1: mean before Labor Day. I mean Tucker's working Monday. 205 00:10:54,160 --> 00:10:59,199 Speaker 5: You'd like to come in to wear my white last chest? 206 00:10:59,280 --> 00:11:00,520 Speaker 1: Who are we were today? 207 00:11:00,600 --> 00:11:03,560 Speaker 5: Well, it is this artorial hook slide of white into 208 00:11:03,640 --> 00:11:04,640 Speaker 5: the Labor day holiday. 209 00:11:04,840 --> 00:11:08,360 Speaker 1: Very good, good girl, serving lobster roles in the telecligt right, Yes, 210 00:11:08,600 --> 00:11:11,200 Speaker 1: our Kim Dawson, How do I have confidence to be 211 00:11:11,240 --> 00:11:14,840 Speaker 1: in the market. You're wonderful at this frame. The belief 212 00:11:15,040 --> 00:11:17,880 Speaker 1: construct to own equities now. 213 00:11:18,280 --> 00:11:22,520 Speaker 5: The belief construct is that the twelve month forward EPs 214 00:11:22,679 --> 00:11:26,439 Speaker 5: estimate continues to move higher in this market. And if 215 00:11:26,480 --> 00:11:29,480 Speaker 5: we look at over the last five years, that has 216 00:11:29,520 --> 00:11:32,400 Speaker 5: been the north star guiding light of what you do 217 00:11:32,520 --> 00:11:35,760 Speaker 5: with equities exactly, which is that as long as that 218 00:11:35,960 --> 00:11:39,440 Speaker 5: is lifting, then all of this volatility and oscillation that 219 00:11:39,480 --> 00:11:41,880 Speaker 5: we see in the short term should be something that 220 00:11:41,880 --> 00:11:45,520 Speaker 5: we can look through. Now, if that starts to level off, 221 00:11:45,640 --> 00:11:48,959 Speaker 5: meaning the growth rate and earnings starts to slow, that's 222 00:11:49,000 --> 00:11:52,160 Speaker 5: when you get a choppier, sideways market. We do think 223 00:11:52,200 --> 00:11:55,080 Speaker 5: that that's a risk for twenty twenty five, but not 224 00:11:55,240 --> 00:11:58,480 Speaker 5: something that necessarily says run for the hills, get out 225 00:11:58,520 --> 00:12:00,640 Speaker 5: of your equities, take big capital gains. 226 00:12:00,760 --> 00:12:04,240 Speaker 1: My theory on this is corporations adapt I think we're 227 00:12:04,240 --> 00:12:07,800 Speaker 1: seeing in spades, whether it's a resurrection, a Dell computer, 228 00:12:08,240 --> 00:12:11,000 Speaker 1: you know, name whatever you want. I mean, you know, 229 00:12:11,160 --> 00:12:13,920 Speaker 1: Intel with this huge news today from Bloomberg News that 230 00:12:13,960 --> 00:12:17,920 Speaker 1: they may do some form of grossery structuring as well. 231 00:12:18,600 --> 00:12:23,080 Speaker 1: Day to day and new as are you seeing corporations adapt. 232 00:12:23,440 --> 00:12:23,800 Speaker 1: I am. 233 00:12:24,280 --> 00:12:27,320 Speaker 5: They say that necessity is the mother of invention, and 234 00:12:27,679 --> 00:12:30,080 Speaker 5: that is exactly what we think that we are seeing 235 00:12:30,200 --> 00:12:33,240 Speaker 5: given the fact that look at the backdrop of pricing power. 236 00:12:33,720 --> 00:12:35,640 Speaker 5: If we go back to twenty and twenty one, you 237 00:12:35,760 --> 00:12:39,360 Speaker 5: had massive pricing power that allowed companies to raise prices 238 00:12:39,400 --> 00:12:43,280 Speaker 5: and that drove margin expansion. That's gone. Companies are no 239 00:12:43,400 --> 00:12:46,160 Speaker 5: longer able to push price to customers, which means that 240 00:12:46,240 --> 00:12:49,680 Speaker 5: they have to get margin expansion out of invention, out 241 00:12:49,679 --> 00:12:53,680 Speaker 5: of innovation, out of applying new technologies. Now, the challenge 242 00:12:53,679 --> 00:12:55,480 Speaker 5: we see in twenty five to get it back to 243 00:12:55,559 --> 00:12:57,880 Speaker 5: earnings is that you already have a big amount of 244 00:12:57,920 --> 00:13:01,560 Speaker 5: margin expansion priced in. So it just means that companies 245 00:13:01,720 --> 00:13:05,200 Speaker 5: have to deliver on those high expectations in order to 246 00:13:05,240 --> 00:13:07,840 Speaker 5: get to the fourteen percent growth that is projected. 247 00:13:08,400 --> 00:13:09,880 Speaker 2: One of the things I've learned on the show is 248 00:13:09,920 --> 00:13:11,880 Speaker 2: it's good to crib a question that Tom has asked 249 00:13:11,920 --> 00:13:13,800 Speaker 2: reword it's lately and put it to another guest, so 250 00:13:13,800 --> 00:13:15,800 Speaker 2: I'll do that. We had Katie Kaminsky on. He asked 251 00:13:15,800 --> 00:13:18,000 Speaker 2: about if you can extrapolate any kind. 252 00:13:17,840 --> 00:13:19,760 Speaker 1: Of bad about it. I used to do that with 253 00:13:20,840 --> 00:13:24,680 Speaker 1: Ken would ask a question, and I would just reframe. 254 00:13:24,800 --> 00:13:26,880 Speaker 1: Ken's questions made me look brilliant. 255 00:13:26,600 --> 00:13:29,160 Speaker 2: Rephrasing it, reframing when you look at Nvidia, is there 256 00:13:29,200 --> 00:13:30,960 Speaker 2: any kind of trend that you can apply to that 257 00:13:31,080 --> 00:13:33,760 Speaker 2: or that you see? It's it's something of such focus. 258 00:13:33,960 --> 00:13:35,120 Speaker 2: What more can we make of that? 259 00:13:35,160 --> 00:13:35,640 Speaker 1: If anything? 260 00:13:35,840 --> 00:13:39,079 Speaker 5: Well, I think Katie was so intelligent in talking about 261 00:13:39,120 --> 00:13:42,679 Speaker 5: the parabolic move that you have seen in the stock, 262 00:13:42,760 --> 00:13:45,600 Speaker 5: which makes it really hard to sustain. The thing with 263 00:13:45,679 --> 00:13:49,080 Speaker 5: parabolic moves is that they can last longer than expected. 264 00:13:49,160 --> 00:13:52,240 Speaker 5: But as Walter Deemer says, when they go up in 265 00:13:52,280 --> 00:13:55,439 Speaker 5: a straight line, they typically go down in a straight line. 266 00:13:55,480 --> 00:13:58,000 Speaker 5: So it's something that is hard from a trend basis. 267 00:13:58,160 --> 00:14:01,080 Speaker 1: You don't remember two thousand, No wait, no one in 268 00:14:01,120 --> 00:14:04,840 Speaker 1: the studio, no one in the controllero remembers two thousand. 269 00:14:04,840 --> 00:14:07,880 Speaker 1: That's why we're playing classic rock today. Don't play Journey today. 270 00:14:08,720 --> 00:14:12,000 Speaker 1: Guy spit out his coffee yesterday when I played Journey. Cam. 271 00:14:12,120 --> 00:14:17,680 Speaker 1: Journey's a band from California. Cam. I'm looking here in Wallydemer, 272 00:14:17,679 --> 00:14:20,720 Speaker 1: of course, is a legend on this. But the answer 273 00:14:20,760 --> 00:14:24,120 Speaker 1: is Trees to the Sky nineteen ninety nine, two thousand 274 00:14:24,280 --> 00:14:28,080 Speaker 1: without profit. This time around, I got free cash flow. 275 00:14:28,400 --> 00:14:30,080 Speaker 1: That's a distinction you do. 276 00:14:30,200 --> 00:14:33,000 Speaker 5: But you always have to be aware of when stocks 277 00:14:33,000 --> 00:14:36,360 Speaker 5: are running ahead of what the earnings estimates have been 278 00:14:36,480 --> 00:14:38,720 Speaker 5: being revised higher themselves. So if you look at a 279 00:14:38,800 --> 00:14:42,080 Speaker 5: name like Nvidia in prior reports, each time that they 280 00:14:42,080 --> 00:14:44,640 Speaker 5: would report, the forward guidance would go up by thirty 281 00:14:44,680 --> 00:14:47,920 Speaker 5: cents or forty cents. This time is about five cents. 282 00:14:48,320 --> 00:14:50,360 Speaker 5: Is that the end of the world. No, But it 283 00:14:50,400 --> 00:14:53,760 Speaker 5: does mean that we should probably lower expectations for the 284 00:14:53,800 --> 00:14:57,720 Speaker 5: pace of returns simply because the pace of earnings revisions 285 00:14:57,800 --> 00:15:00,880 Speaker 5: higher are starting to slow. The issue would be if 286 00:15:00,880 --> 00:15:04,160 Speaker 5: the stock keeps going up even as earnings slow down 287 00:15:04,200 --> 00:15:07,200 Speaker 5: and the revision's higher, that's when you get the trees 288 00:15:07,240 --> 00:15:11,120 Speaker 5: growing to the sky. The issues with valuations being part. 289 00:15:10,960 --> 00:15:14,440 Speaker 2: Too stretched at this point in the earning season. Are 290 00:15:14,480 --> 00:15:17,560 Speaker 2: we talking too much or focusing too much on tech? 291 00:15:18,960 --> 00:15:20,720 Speaker 2: What else is sort of drawing your attention or what 292 00:15:21,040 --> 00:15:21,800 Speaker 2: is tech to strategy? 293 00:15:22,320 --> 00:15:25,960 Speaker 1: If I apologize, it's such a Brooklyn question, curious only people. 294 00:15:26,080 --> 00:15:29,240 Speaker 2: Let's go lade, let's go old school what sector? 295 00:15:29,600 --> 00:15:32,440 Speaker 5: But see I speak that language, So I think that 296 00:15:32,560 --> 00:15:35,640 Speaker 5: the interesting thing about this earning season is the reaction 297 00:15:35,720 --> 00:15:37,720 Speaker 5: of the stocks, and the backdrop is that we've seen 298 00:15:37,760 --> 00:15:40,640 Speaker 5: some of this weakness and tech start to build. Tech 299 00:15:40,680 --> 00:15:43,960 Speaker 5: treated below its fifty day moving average yesterday. It's been 300 00:15:44,000 --> 00:15:47,640 Speaker 5: deteriorating on a relative basis. What's been winning the four 301 00:15:47,800 --> 00:15:50,600 Speaker 5: ninety three the equal weight index. So if we look 302 00:15:50,640 --> 00:15:53,480 Speaker 5: at earning sestiments going into twenty twenty five, what you 303 00:15:53,480 --> 00:15:56,600 Speaker 5: can see is the mag seven is expected to decelerate 304 00:15:56,800 --> 00:16:01,000 Speaker 5: a lot, but the overall market is expected to accelerate, 305 00:16:01,080 --> 00:16:04,280 Speaker 5: which effectively says the four ninety three is about to 306 00:16:04,360 --> 00:16:07,400 Speaker 5: have to carry all of that weight in the earnings growth. 307 00:16:07,600 --> 00:16:11,000 Speaker 1: In conservative three year short term money, what we call 308 00:16:11,120 --> 00:16:17,160 Speaker 1: retirement plans, are I more index or more active? Right now? 309 00:16:17,960 --> 00:16:20,440 Speaker 5: I think you have to be both. It's not a 310 00:16:20,600 --> 00:16:24,000 Speaker 5: black or white. It's a sliding scale. In indices that 311 00:16:24,040 --> 00:16:27,240 Speaker 5: are highly concentrated, it does not pay you to pay 312 00:16:27,240 --> 00:16:30,640 Speaker 5: for active management. In indices that have a great deal 313 00:16:30,680 --> 00:16:33,359 Speaker 5: of dispersion, you can pay for active. 314 00:16:33,160 --> 00:16:34,800 Speaker 1: NASA industries give me an example. 315 00:16:34,960 --> 00:16:38,240 Speaker 5: So the difference between the growth sector and things like 316 00:16:38,320 --> 00:16:41,280 Speaker 5: small cap and international in value, we think that there's 317 00:16:41,320 --> 00:16:45,040 Speaker 5: a lot more opportunity to outperform and get alpha in 318 00:16:45,160 --> 00:16:48,400 Speaker 5: those industries small cap international value where you have a 319 00:16:48,400 --> 00:16:50,360 Speaker 5: lot more dispersion between winners and losers. 320 00:16:50,360 --> 00:16:53,440 Speaker 1: When you're great at this will internationally get a jumpstart 321 00:16:53,520 --> 00:16:55,160 Speaker 1: off legitimate week dollar. 322 00:16:56,360 --> 00:16:59,040 Speaker 5: It has been in a relative down trend for the 323 00:16:59,080 --> 00:17:03,680 Speaker 5: past fifty years. The week dollar is an absolute necessity 324 00:17:03,800 --> 00:17:07,400 Speaker 5: for international to be able to outperform. The only time 325 00:17:07,480 --> 00:17:11,159 Speaker 5: you've had big international bull markets is in big dollar 326 00:17:11,280 --> 00:17:14,439 Speaker 5: bear markets. The only problem is that it has to 327 00:17:14,520 --> 00:17:17,720 Speaker 5: translate to earnings. The most fascinating stat is that if 328 00:17:17,720 --> 00:17:20,440 Speaker 5: you look from two thousand and seven to today, US 329 00:17:20,520 --> 00:17:22,159 Speaker 5: earnings and the S and P five hundred are up 330 00:17:22,200 --> 00:17:26,600 Speaker 5: one hundred and fifty percent. International EFA Index they're flat. 331 00:17:27,160 --> 00:17:30,919 Speaker 5: The Emerging Market Index they're still down versus two thousand 332 00:17:30,920 --> 00:17:33,840 Speaker 5: and seven. It's an earning story, not evaluation story. 333 00:17:34,000 --> 00:17:38,199 Speaker 2: Questioned, let me go back to today's data. We go 334 00:17:38,200 --> 00:17:40,920 Speaker 2: to today's data, to what you heard at Jackson Hole. 335 00:17:41,240 --> 00:17:43,240 Speaker 2: This is a FED that has been for these last 336 00:17:43,240 --> 00:17:47,159 Speaker 2: few years so united. There has been such unanimity. Do 337 00:17:47,200 --> 00:17:49,480 Speaker 2: you sense that the remarks that we heard from FED 338 00:17:49,560 --> 00:17:52,600 Speaker 2: chair Jerom Powell are widely shared? What are you listening 339 00:17:52,600 --> 00:17:54,840 Speaker 2: for in the commentary that we're going to get before 340 00:17:54,840 --> 00:17:56,119 Speaker 2: this meeting on the sixteenth and seventies. 341 00:17:56,119 --> 00:18:00,200 Speaker 1: Did you see what she wrote? Did you see your research? Phiao. 342 00:18:00,400 --> 00:18:03,440 Speaker 1: John Farrell introduced me to Love Island and the British 343 00:18:03,480 --> 00:18:07,080 Speaker 1: Love Island is different. Love Island. No pharaoh taught me 344 00:18:08,640 --> 00:18:13,359 Speaker 1: in ninety day five fiance or something farah all this 345 00:18:13,480 --> 00:18:16,760 Speaker 1: garbage from London. Pharaoh introduced me to. And so cam 346 00:18:16,800 --> 00:18:20,640 Speaker 1: doesn't have Love Island, She's got doug Island, Dove Island. Yeah, 347 00:18:20,680 --> 00:18:21,159 Speaker 1: and that j. 348 00:18:21,400 --> 00:18:25,400 Speaker 5: Powell may be the only bombshell on Dove Island. It's 349 00:18:25,520 --> 00:18:29,280 Speaker 5: really interesting. The one word missing from that Jackson Hole 350 00:18:29,320 --> 00:18:32,560 Speaker 5: speech was patience. And that's the one word you've heard 351 00:18:32,560 --> 00:18:36,080 Speaker 5: from every other FED voting member, which just means that 352 00:18:36,440 --> 00:18:39,720 Speaker 5: Powell is thinking I could do fifty other voting members 353 00:18:39,800 --> 00:18:43,119 Speaker 5: are saying no, slow and steady twenty five basis points 354 00:18:43,160 --> 00:18:44,600 Speaker 5: more evidence, we can take our time. 355 00:18:44,840 --> 00:18:51,760 Speaker 1: Kim Dawson, thank you so much. Now as here justin 356 00:18:51,800 --> 00:18:54,479 Speaker 1: sink is going? Why am I here? Futures up twenty 357 00:18:54,520 --> 00:18:58,080 Speaker 1: six off of the news PCE ebbed a little way, 358 00:18:58,200 --> 00:19:02,000 Speaker 1: still up seventeen. Nasdak was up eight tenths of a percent. 359 00:19:02,119 --> 00:19:06,160 Speaker 1: Now up seven tenths of a percent. He is our 360 00:19:06,280 --> 00:19:09,800 Speaker 1: White House correspondent, and it is things have changed. Justin 361 00:19:09,880 --> 00:19:13,560 Speaker 1: sink joins us right now. Justin what has changed? It's 362 00:19:13,600 --> 00:19:15,520 Speaker 1: sixteen hundred Pennsylvania Avenue. 363 00:19:16,520 --> 00:19:19,480 Speaker 6: Well, I think there's a lot of changes, both, you know, 364 00:19:19,600 --> 00:19:22,200 Speaker 6: at the White House itself and in the race overall. 365 00:19:22,280 --> 00:19:24,200 Speaker 6: So you know, at the White House it's a completely 366 00:19:24,200 --> 00:19:27,320 Speaker 6: different posture from just five weeks ago when Joe Biden 367 00:19:28,520 --> 00:19:32,679 Speaker 6: dropped out. There's been significant staff turnover as people exit 368 00:19:32,720 --> 00:19:37,280 Speaker 6: to either find outside opportunities or go join sort of 369 00:19:37,359 --> 00:19:39,879 Speaker 6: super packs and affiliates. The President himself has been on 370 00:19:39,920 --> 00:19:42,440 Speaker 6: vacation now, this is his second straight week. I don't 371 00:19:42,440 --> 00:19:46,440 Speaker 6: know if he's seen any whale so unfortunately, but he 372 00:19:46,560 --> 00:19:50,280 Speaker 6: is just kind of scaled back as cadence overall, and 373 00:19:50,359 --> 00:19:52,560 Speaker 6: I think it's it's mostly because they're trying to stay 374 00:19:52,560 --> 00:19:55,399 Speaker 6: out of the way of Kamala Harris. And as you know, 375 00:19:55,440 --> 00:19:59,919 Speaker 6: Bloomberg Swing State pole that came out today showed it's working. 376 00:20:00,200 --> 00:20:02,640 Speaker 6: You know, it was a sort of undeniably great poll 377 00:20:02,680 --> 00:20:05,919 Speaker 6: for Kamala Harris shows her sustaining and building on that 378 00:20:05,960 --> 00:20:08,200 Speaker 6: momentum that she got from taking over the ticket from 379 00:20:08,200 --> 00:20:11,159 Speaker 6: Biden and now has either a tire or lead in 380 00:20:11,160 --> 00:20:13,760 Speaker 6: all the major swing states. So at the White House, 381 00:20:13,800 --> 00:20:15,439 Speaker 6: I think a lot of what they're trying to do 382 00:20:15,560 --> 00:20:18,600 Speaker 6: is just bolster her where they can, but otherwise stan out. 383 00:20:18,480 --> 00:20:18,800 Speaker 4: Of the way. 384 00:20:19,200 --> 00:20:21,160 Speaker 2: Justin you mentioned that, Cadence, and I wanted to ask 385 00:20:21,200 --> 00:20:24,600 Speaker 2: you about President Biden's ambitions and watching that conversation last 386 00:20:24,640 --> 00:20:26,520 Speaker 2: night between the vice president and her running mate and 387 00:20:26,560 --> 00:20:29,520 Speaker 2: Dana Bash of CNN, there was a lot of due 388 00:20:29,520 --> 00:20:33,280 Speaker 2: deference too in mentioning of the current president. What are 389 00:20:33,359 --> 00:20:35,320 Speaker 2: his aspirations going for? Is once he gets back from 390 00:20:35,320 --> 00:20:38,120 Speaker 2: this vacation, gets back from California, comes to the East 391 00:20:38,119 --> 00:20:40,960 Speaker 2: coast again, what does he hope to accomplish? How clearly 392 00:20:41,040 --> 00:20:44,480 Speaker 2: articulated is that mission or that vision by the White House? 393 00:20:45,720 --> 00:20:48,240 Speaker 6: Yeah, I think there's a couple elements to it. One 394 00:20:48,359 --> 00:20:51,399 Speaker 6: is sort of legacy protection. I think the president is 395 00:20:51,440 --> 00:20:53,920 Speaker 6: going to go out and make the case for why 396 00:20:53,960 --> 00:20:56,280 Speaker 6: his first term was success, even though it's something that 397 00:20:56,359 --> 00:20:59,320 Speaker 6: voters don't necessarily agree with. And there's two reasons for that. 398 00:20:59,440 --> 00:21:02,640 Speaker 6: One is obviously self interested, with the other is because 399 00:21:02,640 --> 00:21:04,879 Speaker 6: it helps Kamala Harris and you heard her in that 400 00:21:04,960 --> 00:21:05,880 Speaker 6: interview last night. 401 00:21:06,920 --> 00:21:07,320 Speaker 1: Sort of. 402 00:21:07,640 --> 00:21:09,880 Speaker 6: She didn't back away from the economy. She didn't back 403 00:21:09,920 --> 00:21:13,200 Speaker 6: away from the way that he's conducted foreign policy, and 404 00:21:13,560 --> 00:21:16,399 Speaker 6: foreign policy is probably the second major focus for the 405 00:21:16,440 --> 00:21:20,000 Speaker 6: president right now. The sort of hostage sees fire deal 406 00:21:20,080 --> 00:21:23,120 Speaker 6: in the Middle East is the last big legacy item 407 00:21:23,160 --> 00:21:24,760 Speaker 6: sitting there, and I think that's going to be a 408 00:21:24,760 --> 00:21:27,320 Speaker 6: big focus for him, especially as he might ramp up 409 00:21:27,359 --> 00:21:30,440 Speaker 6: some farewell foreign travel in the last few weeks. 410 00:21:30,520 --> 00:21:32,720 Speaker 1: Right, justin Sink with us right now. David Wasserman to 411 00:21:32,760 --> 00:21:35,200 Speaker 1: be with us here later on in the hour, wrapped 412 00:21:35,200 --> 00:21:38,400 Speaker 1: her on some good equity coverage futures at sixteen, I'm 413 00:21:38,400 --> 00:21:41,040 Speaker 1: asking a question to both you. I want two answers. 414 00:21:41,640 --> 00:21:46,600 Speaker 1: Justin Sink David Gura. Are you supposed to campaign on policy? 415 00:21:46,680 --> 00:21:50,560 Speaker 2: David Gurra, Yes, although there is this kind of moved 416 00:21:50,560 --> 00:21:52,040 Speaker 2: to the middle as we talked about a little bit 417 00:21:52,040 --> 00:21:52,639 Speaker 2: of relier. 418 00:21:53,440 --> 00:21:56,760 Speaker 1: Campaign on policy, it was the whole crime thing, you know, 419 00:21:56,840 --> 00:21:58,320 Speaker 1: That's what he knew we'd get votes. 420 00:21:58,600 --> 00:22:01,240 Speaker 2: This is such a strange campaig in so many ways. 421 00:22:01,480 --> 00:22:04,159 Speaker 2: Obviously paramount in the sense that it's moving very quickly 422 00:22:04,160 --> 00:22:06,280 Speaker 2: here and it's a very short, compressed campaign and so 423 00:22:06,320 --> 00:22:10,840 Speaker 2: we've seen the Harris campaign putting out more policy positions, 424 00:22:10,960 --> 00:22:14,200 Speaker 2: I want to say, policy papers, but more definition. There 425 00:22:14,000 --> 00:22:16,240 Speaker 2: there has to be a nod to policy. And herein 426 00:22:16,359 --> 00:22:19,000 Speaker 2: lies the trickiness of this campaign. The Democratic campaign is 427 00:22:19,560 --> 00:22:22,840 Speaker 2: differentiating itself, at least somewhat from the incumbent president. 428 00:22:23,000 --> 00:22:27,000 Speaker 1: So justin sink, you're a Chicago buried in American politics 429 00:22:27,000 --> 00:22:30,400 Speaker 1: and government, you're studying this in the old days. Did 430 00:22:30,400 --> 00:22:33,919 Speaker 1: they talk policy in a campaign? I would suggest they didn't. 431 00:22:35,160 --> 00:22:38,879 Speaker 6: And I think that as much as you know, Bloomberg 432 00:22:39,040 --> 00:22:43,400 Speaker 6: readers and listeners want to hear about Vice President Harris's policy, 433 00:22:43,800 --> 00:22:46,359 Speaker 6: that's not what that campaign is really interesting forward. And 434 00:22:46,400 --> 00:22:50,919 Speaker 6: they just keep hammering the idea of joy and of change, 435 00:22:51,400 --> 00:22:53,440 Speaker 6: and it's you know, it's not different from hope and 436 00:22:53,600 --> 00:22:56,520 Speaker 6: change that we had with Barack Obama. There's policy under 437 00:22:56,600 --> 00:22:59,080 Speaker 6: underpinning that they've made a push on housing, they've made 438 00:22:59,080 --> 00:23:02,439 Speaker 6: a push on helping the middle class address some costs. 439 00:23:02,480 --> 00:23:05,600 Speaker 6: But genuinely, what they're trying to present the American people 440 00:23:05,640 --> 00:23:08,959 Speaker 6: is this idea that hey, we are turning the page 441 00:23:09,000 --> 00:23:11,760 Speaker 6: on a decade and a half era of Donald Trump 442 00:23:11,880 --> 00:23:16,120 Speaker 6: and Joe Biden, that you've frankly grown tired of Justin. 443 00:23:16,119 --> 00:23:17,679 Speaker 2: When I look at that polling that you mentioned a 444 00:23:17,680 --> 00:23:21,720 Speaker 2: moment ago, Yes, the headline numbers are astonishing how well 445 00:23:21,760 --> 00:23:24,320 Speaker 2: the Vice president has carried that momentum forward. But I 446 00:23:24,359 --> 00:23:27,160 Speaker 2: looked deeper at some of these issues, and I think 447 00:23:27,400 --> 00:23:29,359 Speaker 2: the thing that surprised me the most, and I imagine 448 00:23:29,400 --> 00:23:33,040 Speaker 2: delights the Harris campaign, is what they hope would come 449 00:23:33,040 --> 00:23:36,320 Speaker 2: to pass. That is, Vice President Harris could campaign on 450 00:23:36,400 --> 00:23:40,360 Speaker 2: the economy and voters would, if not forget, seemingly forgive 451 00:23:40,640 --> 00:23:43,440 Speaker 2: the fact that she has been part of this administration 452 00:23:43,480 --> 00:23:44,919 Speaker 2: in the White House. You look at sort of how 453 00:23:44,960 --> 00:23:47,680 Speaker 2: they feel about inflation, how they feel about the economy. 454 00:23:47,600 --> 00:23:50,879 Speaker 2: They're giving her, maybe not a pass, but more of 455 00:23:50,920 --> 00:23:52,920 Speaker 2: one than they were giving President Biden when he was 456 00:23:53,000 --> 00:23:53,760 Speaker 2: running for reelection. 457 00:23:54,800 --> 00:23:55,160 Speaker 1: For sure. 458 00:23:55,200 --> 00:23:58,080 Speaker 6: I mean on the question of housing, which is obviously 459 00:23:58,440 --> 00:24:01,080 Speaker 6: a key issue on a big struggle for Biden. They 460 00:24:01,080 --> 00:24:03,080 Speaker 6: give Harris a four point advantage over Trump. There's a 461 00:24:03,080 --> 00:24:05,640 Speaker 6: seven point advantage on who helps the middle class mark, 462 00:24:06,040 --> 00:24:09,320 Speaker 6: And it really suggests that that people are willing to 463 00:24:09,640 --> 00:24:11,960 Speaker 6: sort of put it all aside and say Harris we 464 00:24:12,000 --> 00:24:15,160 Speaker 6: see as a totally different candidate even if she's continuing 465 00:24:15,200 --> 00:24:16,760 Speaker 6: to champion a lot of his policies. 466 00:24:16,800 --> 00:24:19,000 Speaker 1: Okay, I'm going to ask the question everybody wants to know. 467 00:24:19,040 --> 00:24:22,760 Speaker 1: I don't care what your politics are, John, how many 468 00:24:22,800 --> 00:24:25,639 Speaker 1: polls released in the last twenty four hours. 469 00:24:25,400 --> 00:24:28,639 Speaker 2: Like eight, I think about six hundred poles. 470 00:24:29,080 --> 00:24:29,960 Speaker 1: Poles in August. 471 00:24:30,200 --> 00:24:31,120 Speaker 2: That's within the marches. 472 00:24:31,480 --> 00:24:35,080 Speaker 1: They're holed out. I mean, I'm sorry, great polls, love 473 00:24:35,119 --> 00:24:38,359 Speaker 1: what Iowa does, love what Bloomberg does. They're all great. 474 00:24:38,720 --> 00:24:42,000 Speaker 1: Do you actually study the polls or are they just 475 00:24:42,200 --> 00:24:44,080 Speaker 1: noise to a pro like justin. 476 00:24:43,960 --> 00:24:48,080 Speaker 6: Sinc Well, I think, to me, the biggest question is, 477 00:24:48,119 --> 00:24:49,600 Speaker 6: you know, are we in a honeymoon or not? 478 00:24:49,760 --> 00:24:49,960 Speaker 1: Right? 479 00:24:50,280 --> 00:24:51,720 Speaker 6: A lot of the poles are saying the same thing 480 00:24:51,800 --> 00:24:54,119 Speaker 6: right now. But Kamala Harris is coming off of a 481 00:24:54,200 --> 00:24:56,880 Speaker 6: convention that was really great. And while these poles are good, 482 00:24:56,880 --> 00:24:58,040 Speaker 6: they're not runaway. 483 00:24:58,160 --> 00:24:58,560 Speaker 4: And so. 484 00:25:00,080 --> 00:25:01,720 Speaker 6: You got to really put a grain of salt in 485 00:25:01,920 --> 00:25:03,800 Speaker 6: all of this, which is where within the margin of 486 00:25:03,800 --> 00:25:06,840 Speaker 6: earon you know, nearly all of these things and this 487 00:25:07,400 --> 00:25:09,120 Speaker 6: rais is going to go down to a razor's edge. 488 00:25:09,119 --> 00:25:12,160 Speaker 6: So while it's you know, you'd rather be harrassed than 489 00:25:12,240 --> 00:25:14,800 Speaker 6: Trump right now, I don't think anybody is kind of 490 00:25:14,800 --> 00:25:16,760 Speaker 6: saying that this thing's over justin thank. 491 00:25:16,560 --> 00:25:18,719 Speaker 1: You so much, justin sink at the White House, and 492 00:25:18,920 --> 00:25:32,640 Speaker 1: I should say it our news bureau in Washington. Victoria 493 00:25:32,720 --> 00:25:35,680 Speaker 1: Fernandez knows this. She's with Crossmark Global Investments and she's 494 00:25:35,760 --> 00:25:38,199 Speaker 1: joining us in the studio because it's cooler in New 495 00:25:38,280 --> 00:25:43,560 Speaker 1: York than absolutely tea. Thank you so much for joining today. 496 00:25:43,800 --> 00:25:48,119 Speaker 1: Is the battle one on inflation? And if you have disinflation, 497 00:25:48,600 --> 00:25:50,680 Speaker 1: does that mean earnings are worth more? 498 00:25:52,080 --> 00:25:53,679 Speaker 7: Well, I don't know if I would say the battle 499 00:25:53,760 --> 00:25:56,640 Speaker 7: is one on inflation. I think we're heading that way. 500 00:25:56,760 --> 00:25:59,760 Speaker 7: I know, you know, Powell has come out and said, 501 00:25:59,800 --> 00:26:01,880 Speaker 7: look where we think we're done there, and they're moving 502 00:26:01,920 --> 00:26:04,480 Speaker 7: on looking at the labor market. But there's a lot 503 00:26:04,520 --> 00:26:07,760 Speaker 7: of underlying elements and inflation that I think can still 504 00:26:07,760 --> 00:26:10,400 Speaker 7: hold us up towards this three percent level. I don't 505 00:26:10,400 --> 00:26:12,439 Speaker 7: think it's going to go away as quickly as the 506 00:26:12,440 --> 00:26:16,439 Speaker 7: Feds anticipating. So when we look at the idea of 507 00:26:16,440 --> 00:26:19,239 Speaker 7: one hundred basis points cut from now through the end 508 00:26:19,240 --> 00:26:21,679 Speaker 7: of the year, I think that's a little optimistic. I 509 00:26:21,680 --> 00:26:24,000 Speaker 7: think we may see fewer than that because there are 510 00:26:24,040 --> 00:26:25,160 Speaker 7: other elements in. 511 00:26:25,160 --> 00:26:29,040 Speaker 1: The Bob Doll Victoria Fernandez world. My money question is simple, 512 00:26:29,720 --> 00:26:34,520 Speaker 1: what are your clients doing? Not the talk of strategy, 513 00:26:34,880 --> 00:26:38,399 Speaker 1: but what is the xuberance there? Have we reached a 514 00:26:38,480 --> 00:26:40,000 Speaker 1: bull market silly season? 515 00:26:40,400 --> 00:26:43,639 Speaker 7: You know, it's interesting earlier people were talking about the 516 00:26:43,680 --> 00:26:46,119 Speaker 7: sixty to forty portfolio, and I will tell you that 517 00:26:46,240 --> 00:26:49,680 Speaker 7: is what we have seen coming in from our clients. 518 00:26:49,720 --> 00:26:52,800 Speaker 7: More than anything. They want that balance strategy. They're not 519 00:26:52,920 --> 00:26:55,320 Speaker 7: exactly sure what's going to happen with all of the 520 00:26:55,400 --> 00:27:00,120 Speaker 7: uncertainties that we have, whether it's here domestically, whether it's geopolitics, 521 00:27:00,320 --> 00:27:04,240 Speaker 7: whether it's inflation. The concerns about the consumer having that 522 00:27:04,320 --> 00:27:07,280 Speaker 7: diversification in their portfolio is what they want with a 523 00:27:07,320 --> 00:27:09,840 Speaker 7: little bit of extra kick on something. So maybe that's 524 00:27:10,080 --> 00:27:12,320 Speaker 7: a covered call strategy, Maybe that's a little bit of 525 00:27:12,359 --> 00:27:15,560 Speaker 7: a long short component. They want to be invested in 526 00:27:15,600 --> 00:27:17,840 Speaker 7: the market, which we agree with, but they want to 527 00:27:17,840 --> 00:27:19,959 Speaker 7: be a little bit cautious. So they've been listening to 528 00:27:20,000 --> 00:27:21,120 Speaker 7: what we've been telling them. 529 00:27:21,080 --> 00:27:23,600 Speaker 2: Triage those risks for us. They come to you worried 530 00:27:23,640 --> 00:27:27,639 Speaker 2: about all those many things, what's happening overseas, inflation, the election, 531 00:27:27,760 --> 00:27:30,000 Speaker 2: what have you how do you rate all of that? 532 00:27:30,160 --> 00:27:31,879 Speaker 2: What do you see of those risks as being the 533 00:27:31,880 --> 00:27:34,640 Speaker 2: one that you know is something that should strike fear 534 00:27:34,840 --> 00:27:35,760 Speaker 2: in investors right. 535 00:27:35,680 --> 00:27:38,320 Speaker 7: Now, It's going to take turns, right There's going to 536 00:27:38,359 --> 00:27:40,479 Speaker 7: be different elements that kind of rear its head at 537 00:27:40,520 --> 00:27:43,080 Speaker 7: different point in time. Obviously as we get closer to 538 00:27:43,119 --> 00:27:46,160 Speaker 7: the election, that's going to cause more volatility in this market. 539 00:27:46,480 --> 00:27:49,240 Speaker 7: The thing we have to look at there is, you know, 540 00:27:49,359 --> 00:27:51,040 Speaker 7: you have to have to have a lot of these 541 00:27:51,080 --> 00:27:54,960 Speaker 7: things passed. We have to have a government that changes dramatically. 542 00:27:55,040 --> 00:27:56,800 Speaker 7: I'm not sure a lot of it will come to fruition. 543 00:27:56,960 --> 00:27:59,240 Speaker 7: So what we're looking at is more when it comes 544 00:27:59,280 --> 00:28:02,159 Speaker 7: to the consumer component. We think that's key to this market, 545 00:28:02,200 --> 00:28:05,359 Speaker 7: the labor market and the consumer. We got the spending 546 00:28:05,400 --> 00:28:09,600 Speaker 7: and income numbers today again, we have spending almost double 547 00:28:09,640 --> 00:28:12,560 Speaker 7: in a percentage basis. What income is. That does not 548 00:28:12,640 --> 00:28:15,760 Speaker 7: bode well as credit card delinquencies go higher, as savings 549 00:28:15,840 --> 00:28:19,960 Speaker 7: rates go down, as wages stagnate, as job losses increase. 550 00:28:20,280 --> 00:28:22,480 Speaker 7: So to us, that's what we're most worried about. 551 00:28:22,600 --> 00:28:25,320 Speaker 1: Victoria Fernandez driving the market higher, up eight tens of 552 00:28:25,320 --> 00:28:28,200 Speaker 1: a percent of the Dow, up one hundred and thirty 553 00:28:28,280 --> 00:28:32,400 Speaker 1: two points. It's like the ascendants of the Houston Astros. 554 00:28:33,080 --> 00:28:35,240 Speaker 7: There's just nothing better right now at. 555 00:28:35,160 --> 00:28:37,600 Speaker 1: The time of year it gets under eighty degrees in 556 00:28:37,760 --> 00:28:39,640 Speaker 1: Houston and the astrostar. 557 00:28:39,160 --> 00:28:41,080 Speaker 7: Technecy the that start flying, the. 558 00:28:41,040 --> 00:28:43,680 Speaker 1: Bet start flying. My good friend Jim Kramer and I 559 00:28:43,760 --> 00:28:48,040 Speaker 1: agree that the fact is on stocks, if you're lucky, 560 00:28:48,120 --> 00:28:51,160 Speaker 1: thirty percent of stocks at any given time are doing well. 561 00:28:51,800 --> 00:28:56,680 Speaker 1: Within financial wealth management, are you focused on owning the 562 00:28:56,680 --> 00:28:59,920 Speaker 1: thirty percent and not owning the seventy How do you 563 00:29:00,160 --> 00:29:03,040 Speaker 1: how do you try to find excellence in alpha in 564 00:29:03,640 --> 00:29:04,760 Speaker 1: the winners that are there. 565 00:29:05,040 --> 00:29:08,680 Speaker 7: So it really comes from that fundamental analysis that we do. 566 00:29:08,960 --> 00:29:12,240 Speaker 7: We're not looking so much at trends as looking really 567 00:29:12,280 --> 00:29:14,800 Speaker 7: at what do the cash flows look like on these companies. 568 00:29:14,840 --> 00:29:17,320 Speaker 7: You know Bob and how he likes to dig down underneath, right, 569 00:29:17,360 --> 00:29:20,960 Speaker 7: We want to look at persistence of earnings, predictability of earnings. 570 00:29:21,240 --> 00:29:23,720 Speaker 7: These are the companies we like. So do we aim 571 00:29:23,760 --> 00:29:26,840 Speaker 7: towards certain sectors? Sure, right now we're looking at healthcare. 572 00:29:27,080 --> 00:29:29,760 Speaker 7: We've been investing in financials. These things have done well 573 00:29:29,800 --> 00:29:33,360 Speaker 7: for us. But within those sectors, even within staples, you 574 00:29:33,400 --> 00:29:35,960 Speaker 7: want to look at those companies that have that stability 575 00:29:36,280 --> 00:29:41,000 Speaker 7: that can continue to generate good returns during volatility. So 576 00:29:41,160 --> 00:29:44,600 Speaker 7: that's where we focus looking at those underlying factors. 577 00:29:45,160 --> 00:29:48,280 Speaker 2: What is your takeaway from what we've seen with video 578 00:29:48,360 --> 00:29:50,600 Speaker 2: this week? And again I just remark on and laugh 579 00:29:50,680 --> 00:29:53,520 Speaker 2: at the way that those results were characterized, that you 580 00:29:53,520 --> 00:29:56,320 Speaker 2: could call that kind of underwhelming or not what the 581 00:29:56,360 --> 00:30:00,240 Speaker 2: market wanted. What's your perspective on that, and and what 582 00:30:00,440 --> 00:30:03,560 Speaker 2: takeaway can we can we take from that? Just about 583 00:30:03,560 --> 00:30:05,479 Speaker 2: the way that we look at the performance of companies 584 00:30:05,520 --> 00:30:06,720 Speaker 2: and their projections going forward. 585 00:30:06,880 --> 00:30:09,200 Speaker 7: So we've been a little different than probably most people 586 00:30:09,200 --> 00:30:12,160 Speaker 7: out on the street where we've been trimming those high 587 00:30:12,160 --> 00:30:15,760 Speaker 7: growth tech names all year long, anticipating that at some 588 00:30:15,840 --> 00:30:18,040 Speaker 7: point you're not going to continue to grow at four 589 00:30:18,120 --> 00:30:20,920 Speaker 7: hundred percent year over year, right, so you can still 590 00:30:20,920 --> 00:30:24,440 Speaker 7: have great numbers and the trend be slowing. And that's 591 00:30:24,480 --> 00:30:26,040 Speaker 7: what we saw with in videos. So I was a 592 00:30:26,080 --> 00:30:28,960 Speaker 7: little surprised that the market reacted the way it did. 593 00:30:28,960 --> 00:30:31,840 Speaker 7: I mean, still solid numbers there, but what it tells 594 00:30:31,880 --> 00:30:34,560 Speaker 7: us is the breadth is growing. We've all been waiting 595 00:30:34,600 --> 00:30:37,120 Speaker 7: for that all year to have that breadth in the market. 596 00:30:37,320 --> 00:30:39,800 Speaker 7: We're seeing it in stock prices, I want to see 597 00:30:39,800 --> 00:30:40,480 Speaker 7: it in earnings. 598 00:30:40,560 --> 00:30:42,800 Speaker 1: Fideli out with the number of millionaire or four oh 599 00:30:42,840 --> 00:30:46,400 Speaker 1: one k. How do you do you manage a million 600 00:30:46,480 --> 00:30:50,080 Speaker 1: dollar foural one k differently than one hundred and fifty 601 00:30:50,160 --> 00:30:53,120 Speaker 1: thousand dollars four one k? Are they all those same? 602 00:30:53,280 --> 00:30:55,800 Speaker 7: You're not going to manage it differently. In the idea 603 00:30:55,880 --> 00:30:59,360 Speaker 7: of where you want to allocate your resources based on 604 00:30:59,440 --> 00:31:02,280 Speaker 7: the macro that's out there, your strategy will be the same. 605 00:31:02,600 --> 00:31:05,480 Speaker 7: Can you have a little more diversification, yes. Can you 606 00:31:05,520 --> 00:31:08,960 Speaker 7: maybe add a couple extra elements of something into that 607 00:31:09,080 --> 00:31:12,360 Speaker 7: portfolio to juice income a little bit, Yes, you can 608 00:31:12,360 --> 00:31:15,480 Speaker 7: do that. But from the one hundred thousand foot level, yeah, 609 00:31:15,560 --> 00:31:16,560 Speaker 7: you're investing the same. 610 00:31:16,680 --> 00:31:22,360 Speaker 1: Houston overweight energy. It's genetic. Victoria Fernandez on energy. 611 00:31:23,360 --> 00:31:25,720 Speaker 7: Look, energy has been struggling. We know it's one of 612 00:31:25,760 --> 00:31:28,080 Speaker 7: the sectors that has not been doing as well. Even 613 00:31:28,200 --> 00:31:30,960 Speaker 7: though you look at balance sheets, you've got some strong 614 00:31:31,080 --> 00:31:34,560 Speaker 7: balance sheets there, there's some cash there. They're waiting, right, 615 00:31:34,600 --> 00:31:37,040 Speaker 7: They want to know what policy is going to look 616 00:31:37,120 --> 00:31:39,400 Speaker 7: like going forward before they jump in and put a 617 00:31:39,400 --> 00:31:42,120 Speaker 7: lot of capex to work. If you take tech out 618 00:31:42,120 --> 00:31:45,520 Speaker 7: of the equation CAPEX is actually coming down. Some of 619 00:31:45,520 --> 00:31:48,160 Speaker 7: that has to do with the energy companies. We anticipate 620 00:31:48,240 --> 00:31:50,680 Speaker 7: seeing that turn, so we think you need to have 621 00:31:50,760 --> 00:31:53,400 Speaker 7: some exposure, probably go for some of those big integrated names. 622 00:31:53,400 --> 00:31:54,800 Speaker 7: At this point, I get. 623 00:31:54,680 --> 00:31:56,600 Speaker 1: One more question or Michael Barr's got to get in 624 00:31:56,560 --> 00:31:59,120 Speaker 1: here and do the news. Victoria Fernandez, can I do 625 00:31:59,200 --> 00:32:02,520 Speaker 1: a major shout out to Texas A and M with 626 00:32:02,600 --> 00:32:07,520 Speaker 1: the only real football game wow this weekend? Notre Dame 627 00:32:08,000 --> 00:32:10,800 Speaker 1: Texas A and M. I mean, we're hit. Brian Lebanon 628 00:32:10,880 --> 00:32:11,520 Speaker 1: from Michigan. 629 00:32:11,560 --> 00:32:12,280 Speaker 2: Who are they playing with? 630 00:32:15,040 --> 00:32:18,040 Speaker 1: You'd figure Texas A and M would be playing you know, 631 00:32:18,400 --> 00:32:22,400 Speaker 1: the Teachers College of Louisiana or whatever. I don't know, Victoria, 632 00:32:22,480 --> 00:32:25,640 Speaker 1: that's very cool. Yeah, see Notre Dame playing Texas A 633 00:32:25,720 --> 00:32:27,880 Speaker 1: and M is like, what's a Texas spirit? 634 00:32:28,040 --> 00:32:29,200 Speaker 7: That's exactly right. 635 00:32:29,320 --> 00:32:31,400 Speaker 1: Let's go Aggie's We're gonna have to say, give me 636 00:32:31,440 --> 00:32:34,360 Speaker 1: an oil price here, cross Mark. You guys live this stuff. 637 00:32:34,760 --> 00:32:36,520 Speaker 1: Brent Crude West Texas Intermediate. 638 00:32:36,800 --> 00:32:37,560 Speaker 7: Yeah, I mean, look. 639 00:32:37,480 --> 00:32:38,760 Speaker 1: Stability or higher. 640 00:32:39,080 --> 00:32:40,760 Speaker 7: I think it's going to go a little bit higher, 641 00:32:40,760 --> 00:32:43,000 Speaker 7: but not tremendously. We're not looking at one hundred dollars 642 00:32:43,040 --> 00:32:45,280 Speaker 7: coming in. Do we go around eighty and stay there 643 00:32:45,320 --> 00:32:49,520 Speaker 7: because of geopolitical reasons, we can, but I also don't 644 00:32:49,520 --> 00:32:51,960 Speaker 7: think we're going to go too much. Lower demand is 645 00:32:52,000 --> 00:32:55,040 Speaker 7: still there, there's still some supply concerns, so I think 646 00:32:55,040 --> 00:32:56,920 Speaker 7: you'll be pretty steady around the eighty level. 647 00:32:57,080 --> 00:32:59,480 Speaker 1: It's the religion, folks. We really our team has done 648 00:32:59,480 --> 00:33:01,360 Speaker 1: a great job today given this to you with our 649 00:33:01,400 --> 00:33:05,240 Speaker 1: equity at coverage. You have to be in the market 650 00:33:05,360 --> 00:33:11,280 Speaker 1: to participate and win. Robert Dahl, Victoria Fernandez, cross Mark 651 00:33:11,400 --> 00:33:14,080 Speaker 1: live that every day. Thank you so much. You moved 652 00:33:14,080 --> 00:33:14,680 Speaker 1: to New Yorker. 653 00:33:14,760 --> 00:33:17,000 Speaker 7: Is it's just like a visit, No, just visiting. Getting 654 00:33:17,040 --> 00:33:19,160 Speaker 7: my daughter ready for her senior year at n YU. 655 00:33:19,280 --> 00:33:24,360 Speaker 7: All right, she is journalism and politics, so you know 656 00:33:24,440 --> 00:33:26,320 Speaker 7: what you can right here. 657 00:33:27,960 --> 00:33:30,560 Speaker 1: I saw you. I saw you ten minutes ago with Mike. 658 00:33:30,720 --> 00:33:31,479 Speaker 1: Is that what that was? 659 00:33:31,800 --> 00:33:34,080 Speaker 7: We're going to bring her on in and you know what, 660 00:33:34,200 --> 00:33:37,400 Speaker 7: her favorite show UK Love Island, And I heard a 661 00:33:37,400 --> 00:33:41,640 Speaker 7: little bit of you. I want to talk to you 662 00:33:41,760 --> 00:33:42,120 Speaker 7: about that. 663 00:33:42,320 --> 00:33:44,600 Speaker 1: You talked to John Ferrer about that. That's a I mean, 664 00:33:45,120 --> 00:33:46,960 Speaker 1: you know, if you're at n YU and you're watching 665 00:33:47,000 --> 00:33:53,040 Speaker 1: Love Island, that is a resume building. Yes, yes for Fernandez, 666 00:33:53,080 --> 00:33:56,400 Speaker 1: Thank you so much. With Crossbark. This is a Bloomberg 667 00:33:56,480 --> 00:34:00,920 Speaker 1: surveillance podcast, bringing you the best in economics, it's investment, 668 00:34:01,080 --> 00:34:04,720 Speaker 1: and international relations. You can also watch the show live 669 00:34:04,960 --> 00:34:09,279 Speaker 1: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 670 00:34:09,400 --> 00:34:12,800 Speaker 1: see the show weekday mornings from seven to ten am 671 00:34:12,840 --> 00:34:16,880 Speaker 1: Eastern from our global headquarters in New York City. Subscribe 672 00:34:16,880 --> 00:34:20,640 Speaker 1: to the podcast on Apple, Spotify, or anywhere else you listen, 673 00:34:20,960 --> 00:34:24,600 Speaker 1: and always on Bloomberg Radio, the Bloomberg Terminal, and the 674 00:34:24,640 --> 00:34:26,160 Speaker 1: Bloomberg Business app.