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Speaker 1: Bloomberg Business App. Ira Jersey with us here a Bloomberg Intelligence.
Speaker 1: We're going to look at the inflation report. We welcome
Speaker 1: all of you across the nation, around the world on YouTube,
Speaker 1: subscribe to Bloomberg Podcasts, and with that we are here
Speaker 1: commercial free through this important, this critical inflation report, and
Speaker 1: we'll move on. Tifity Wilding and Pimco to join us
Speaker 1: here in a bit. But right now, Ira Jersey with us,
Speaker 1: let me frame out equities, bonds, currencies, commodities, futures lifting
Speaker 1: not because of Ira Jersey, lifting because of tech. Some
Speaker 1: better feeling their futures up twenty six NASDAK up now
Speaker 1: solid eight tens of a percent. The VIX comes in
Speaker 1: a bit fifteen point four to six. You'd look for
Speaker 1: that to be better than good. Here in a bit
Speaker 1: in the yield space ten year yield three point eight
Speaker 1: five percent. We'll see where that goes. Jersey looking for
Speaker 1: lower yields forwards. So the inflation report that Chairman Powell
Speaker 1: cares about, we'll get that to you right now. Waiting
Speaker 1: on the screen ere on the Friday before Labor Day
Speaker 1: takes a few seconds longer. Personal income comes in higher
Speaker 1: than survey spending right on survey and elevated zero point
Speaker 1: five percent PCE all on plan, but year over year
Speaker 1: core PCE disinflates a little bit off survey last month
Speaker 1: two point six percent, this month two point six percent.
Speaker 1: We looked for an elevation there, but pretty much PCE
Speaker 1: on plan. Where spending came in from zero point three
Speaker 1: up to zero point five on survey, and personal income
Speaker 1: did a little bit better. I'm waiting for the revised numbers.
Speaker 1: We'll get them out in a moment. In the markets,
Speaker 1: the vis comes in a more bullish fifteen point twenty
Speaker 1: five futures of up to twenty six pretty much. Stage
Speaker 1: is maybe a little bit of a bid to the
Speaker 1: nastac up nine tenths of a percent right now in
Speaker 1: Ira jerseys yield space, I'm giving him time for what
Speaker 1: the racket, ear, folks is. I got to do this
Speaker 1: data check half as good as Karen Moscow while we
Speaker 1: let Ira Jersey and David Gurra sort out the details.
Speaker 1: Two year yield three point nine zero percent, a little
Speaker 1: bit higher yield, but the yield's not really moving all
Speaker 1: that much. I look at the ten year, really old
Speaker 1: one point six nine percent. I do, okay there, David,
Speaker 1: that was great. I mean you walked.
Speaker 2: Do we get the revision? We got the revision, there's
Speaker 2: point three.
Speaker 1: Yeah, and again personal spending revision was a tick higher.
Speaker 1: This is this is important. We continue now with Ira
Speaker 1: Jersey of Bloomberg Intelligence. Ira, I guess it's on plan
Speaker 1: on survey, and yet there's a lift involved, isn't there. Yeah?
Speaker 3: So I think you know, when you when you look
Speaker 3: at the headline data overall, and obviously we'll you know,
Speaker 3: have to focus in on the details. Like I mentioned,
Speaker 3: I want to see what services spending was like and
Speaker 3: and uh, services inflation. But but the economists got it
Speaker 3: right this time, I think, more or less in terms
Speaker 3: of the UH. In terms of the pace of inflation.
Speaker 3: You know, interestingly, we haven't really slowed much, right, So
Speaker 3: July didn't see a slow down in inflation, but still
Speaker 3: two and a half percent on headline and more or
Speaker 3: less right there on on core inflation year on year.
Speaker 3: It has to give the the Reserve at least a
Speaker 3: little bit of comfort that they, you know, if they
Speaker 3: cut interest rates and they go slowly, that that inflation
Speaker 3: can continue to come down at least a little bit.
Speaker 3: You know, the the data that that you mentioned, you know,
Speaker 3: personal spending higher month on month, although in line with expectations.
Speaker 3: You know that that's actually a decent sign.
Speaker 4: Right.
Speaker 3: So the the the idea that we're having a soft
Speaker 3: landing is is certainly playing out in this data for
Speaker 3: this one month. Will it persist? I don't think so.
Speaker 3: But at the same time, you have to take the
Speaker 3: incoming data and put that into your your thinking and
Speaker 3: your your entire your entire outlook going forward.
Speaker 2: Tom, I'm gonna lob one at you if I can.
Speaker 2: I mean, you were out in Northwest Wyoming last week
Speaker 2: when the FED chairman spoke and we've said all morning,
Speaker 2: as we say all the time, this is the Fed's
Speaker 2: preferred inflation metric. How important is this reading to the Fed?
Speaker 2: I'd look ahead to next week, of course in the
Speaker 2: job support, which strikes me as being so paramount in
Speaker 2: comparison to this one. What does this one mean to policymakers?
Speaker 1: Christmas Bowie Chadam Financial said she's looking at service sector
Speaker 1: inflation in Europe, France with disinflation, Spain with disinflation. IIRA
Speaker 1: here three minutes in do you have a service sector
Speaker 1: statistic yet? Because I think that's what they're waiting for
Speaker 1: in Jackson a Hole.
Speaker 3: I'm waiting for the some of the details to come
Speaker 3: out on the terminal and it's you know, the inflating
Speaker 3: inflation number bisector is not out yet. But when I
Speaker 3: look at things like the personal income data at zero
Speaker 3: point three percent and disposable income still up zero point
Speaker 3: three percent, you know that that's actually a pretty good sign.
Speaker 1: I agree.
Speaker 3: Fact that you have disposable income continuing to rise at
Speaker 3: a reasonable pace means that spending might continue to be robust,
Speaker 3: at least for the near term.
Speaker 1: IRA, Thank you so much, she's got to go dive
Speaker 1: into the data. Ira Jersey will publish for Bloomberg Intelligence
Speaker 1: here within the r He's also out with new forecasts
Speaker 1: three point six six percent, sort of a blended fan
Speaker 1: distribution of the ten year at yield and that yield
Speaker 1: right now, excuse me, pretty much unchanged three point eighty
Speaker 1: six at percent and the economics of the moment. Tifity
Speaker 1: Wilding joins from the Pacific Investment Management Company PIMCO, where
Speaker 1: she is a Managing Director Economist North America at Tiffany.
Speaker 1: I know you have to wait and dive into the data,
Speaker 1: or the media frenzy here at eight thirty four is
Speaker 1: unfair to you. But the feeling I get here is
Speaker 1: trend based disinflation. Am I off the mark?
Speaker 4: Yeah? I mean you know what I would just say,
Speaker 4: taking a step back when you look at a wide
Speaker 4: range of data, it is it is getting back to,
Speaker 4: you know, some semblance of pre pandemic. You know, you
Speaker 4: look at headline inflation levels, there were some stickier pieces
Speaker 4: of underlying inflation. But now that labor market adjustment looks
Speaker 4: like it's happening more fully, you know, those pieces of
Speaker 4: stickier inflation will will be trending back to target. And
Speaker 4: so when you kind of look around the economy, things look,
Speaker 4: you know, like they're getting back to some semblance of
Speaker 4: normal after the unique set of shocks that we had
Speaker 4: post pandemic. And I think the thing that's you know,
Speaker 4: not as normal that really stands out, obviously is the
Speaker 4: policy rate. You know, and obviously Federal Reserve officials understand
Speaker 4: that Powe was very clear at Jackson Hole that they
Speaker 4: are going to start that journey back to normal or
Speaker 4: at least kind of what they think could be normal.
Speaker 4: And you know, and the pace of that is really
Speaker 4: going to depend on on the data from here, and
Speaker 4: you know, if we see economic weakness, then then they'll
Speaker 4: go faster.
Speaker 2: Tiffany, I really appreciate that. I'm kind of situating it
Speaker 2: in this in this moment of the way that we
Speaker 2: had Brian Levitt doing it at Katie Kaminsky earlier in
Speaker 2: the show. This this notion that there has been this
Speaker 2: kind of post pandemic readjustment that might not be as
Speaker 2: notable or as noticeable as the kind of initial adjustment
Speaker 2: that we had. Where are we in this cycle, as
Speaker 2: you see it, when you look at what we're getting
Speaker 2: in terms of inflation data, pulling back more broadly to
Speaker 2: look at labor data as well, give us a sense
Speaker 2: of where this economy is as you see it.
Speaker 4: Yeah, well, I mean I think I think the labor
Speaker 4: market data has has been you know, sort of confusing,
Speaker 4: if you will, the usual sign in the labor market
Speaker 4: of an underlying economy that's not doing well. I The
Speaker 4: unemployment rate rising, I think is a bit of you
Speaker 4: have to, you know, kind of dig into the drivers
Speaker 4: of that indicator, because if you just looked at the
Speaker 4: labor market and you looked at nothing else, you would
Speaker 4: be incredibly worried about a recession. But if you look
Speaker 4: at a broader range of indicators of the economy, it
Speaker 4: looks like it's doing okay. Right, It's a soft landing
Speaker 4: if anything. You know, the activity data, the growth data,
Speaker 4: the GDP data have been coming in better than expected.
Speaker 4: So I think you have to, you know, kind of
Speaker 4: take a step back and you know, just again understand
Speaker 4: that there's been a unique set of shocks since the pandemic.
Speaker 4: It's made indicators, usual economic indicators, more difficult to read.
Speaker 4: And I think the unemployment rate right now is one
Speaker 4: of those things.
Speaker 1: I mean, difficult to read. I'm sorry at a three
Speaker 1: percent real GDP ending June thirty, I got a five
Speaker 1: and a half percent amateurs look at nominal GDP led
Speaker 1: by Newport Beach, California. I mean, Tiffany, we've been wrong, wrong, wrong,
Speaker 1: on the resilience and spirit of America. When you sit
Speaker 1: with cynics like Jerome Schneider and the other animals at
Speaker 1: pimcoh are you trying to tell them it's not as
Speaker 1: bad out there as your thing?
Speaker 2: His words, not yours?
Speaker 4: Yeah, I mean, I think the you know, I guess
Speaker 4: the point that I would just really emphasize is that,
Speaker 4: you know, when you look at the labor market, the
Speaker 4: things that have driven the unemployment rate higher this time
Speaker 4: is more about labor supply. Obviously, over the last few years,
Speaker 4: we've gotten a surge of immigration, and that has resulted
Speaker 4: in a higher unemployment rate. Because you just have more
Speaker 4: people in the labor force, you're not actually seeing layoffs now.
Speaker 4: I certainly we could start to see more material layoffs
Speaker 4: across the economy, but you know, I would just say, overall,
Speaker 4: you know, the things still appear relatively strong, and usually
Speaker 4: when you have labor supply gains you know that's actually
Speaker 4: good for the economy. More people are consuming, where people
Speaker 4: are working. It's not usually the time and where you're
Speaker 4: going into recession.
Speaker 1: Tiffany Wedding, thank you so much, greatly appreciate it. This
Speaker 1: morning here our team is just done a wonderful job.
Speaker 1: I can't really can't say enough about the intelligence of
Speaker 1: the conversation throughout all of this week, as we had
Speaker 1: Katherin Kaminsky in earlier with Elpha simplex, wicked, quantitative Massachusetts
Speaker 1: Institute of Technology think Andrew Lowe. She knows where epsilon is.
Speaker 1: Someone with the same prodigious chops is Cam Dawson new
Speaker 1: edge that joins us right now, I think also with
Speaker 1: a much more almost barrens like focus on. Hey, here's
Speaker 1: the confidence to be in the market. Thrilled to have
Speaker 1: you here. Thank you for coming out on Friday, I
Speaker 1: mean before Labor Day. I mean Tucker's working Monday.
Speaker 5: You'd like to come in to wear my white last chest?
Speaker 1: Who are we were today?
Speaker 5: Well, it is this artorial hook slide of white into
Speaker 5: the Labor day holiday.
Speaker 1: Very good, good girl, serving lobster roles in the telecligt right, Yes,
Speaker 1: our Kim Dawson, How do I have confidence to be
Speaker 1: in the market. You're wonderful at this frame. The belief
Speaker 1: construct to own equities now.
Speaker 5: The belief construct is that the twelve month forward EPs
Speaker 5: estimate continues to move higher in this market. And if
Speaker 5: we look at over the last five years, that has
Speaker 5: been the north star guiding light of what you do
Speaker 5: with equities exactly, which is that as long as that
Speaker 5: is lifting, then all of this volatility and oscillation that
Speaker 5: we see in the short term should be something that
Speaker 5: we can look through. Now, if that starts to level off,
Speaker 5: meaning the growth rate and earnings starts to slow, that's
Speaker 5: when you get a choppier, sideways market. We do think
Speaker 5: that that's a risk for twenty twenty five, but not
Speaker 5: something that necessarily says run for the hills, get out
Speaker 5: of your equities, take big capital gains.
Speaker 1: My theory on this is corporations adapt I think we're
Speaker 1: seeing in spades, whether it's a resurrection, a Dell computer,
Speaker 1: you know, name whatever you want. I mean, you know,
Speaker 1: Intel with this huge news today from Bloomberg News that
Speaker 1: they may do some form of grossery structuring as well.
Speaker 1: Day to day and new as are you seeing corporations adapt.
Speaker 1: I am.
Speaker 5: They say that necessity is the mother of invention, and
Speaker 5: that is exactly what we think that we are seeing
Speaker 5: given the fact that look at the backdrop of pricing power.
Speaker 5: If we go back to twenty and twenty one, you
Speaker 5: had massive pricing power that allowed companies to raise prices
Speaker 5: and that drove margin expansion. That's gone. Companies are no
Speaker 5: longer able to push price to customers, which means that
Speaker 5: they have to get margin expansion out of invention, out
Speaker 5: of innovation, out of applying new technologies. Now, the challenge
Speaker 5: we see in twenty five to get it back to
Speaker 5: earnings is that you already have a big amount of
Speaker 5: margin expansion priced in. So it just means that companies
Speaker 5: have to deliver on those high expectations in order to
Speaker 5: get to the fourteen percent growth that is projected.
Speaker 2: One of the things I've learned on the show is
Speaker 2: it's good to crib a question that Tom has asked
Speaker 2: reword it's lately and put it to another guest, so
Speaker 2: I'll do that. We had Katie Kaminsky on. He asked
Speaker 2: about if you can extrapolate any kind.
Speaker 1: Of bad about it. I used to do that with
Speaker 1: Ken would ask a question, and I would just reframe.
Speaker 1: Ken's questions made me look brilliant.
Speaker 2: Rephrasing it, reframing when you look at Nvidia, is there
Speaker 2: any kind of trend that you can apply to that
Speaker 2: or that you see? It's it's something of such focus.
Speaker 2: What more can we make of that?
Speaker 1: If anything?
Speaker 5: Well, I think Katie was so intelligent in talking about
Speaker 5: the parabolic move that you have seen in the stock,
Speaker 5: which makes it really hard to sustain. The thing with
Speaker 5: parabolic moves is that they can last longer than expected.
Speaker 5: But as Walter Deemer says, when they go up in
Speaker 5: a straight line, they typically go down in a straight line.
Speaker 5: So it's something that is hard from a trend basis.
Speaker 1: You don't remember two thousand, No wait, no one in
Speaker 1: the studio, no one in the controllero remembers two thousand.
Speaker 1: That's why we're playing classic rock today. Don't play Journey today.
Speaker 1: Guy spit out his coffee yesterday when I played Journey. Cam.
Speaker 1: Journey's a band from California. Cam. I'm looking here in Wallydemer,
Speaker 1: of course, is a legend on this. But the answer
Speaker 1: is Trees to the Sky nineteen ninety nine, two thousand
Speaker 1: without profit. This time around, I got free cash flow.
Speaker 1: That's a distinction you do.
Speaker 5: But you always have to be aware of when stocks
Speaker 5: are running ahead of what the earnings estimates have been
Speaker 5: being revised higher themselves. So if you look at a
Speaker 5: name like Nvidia in prior reports, each time that they
Speaker 5: would report, the forward guidance would go up by thirty
Speaker 5: cents or forty cents. This time is about five cents.
Speaker 5: Is that the end of the world. No, But it
Speaker 5: does mean that we should probably lower expectations for the
Speaker 5: pace of returns simply because the pace of earnings revisions
Speaker 5: higher are starting to slow. The issue would be if
Speaker 5: the stock keeps going up even as earnings slow down
Speaker 5: and the revision's higher, that's when you get the trees
Speaker 5: growing to the sky. The issues with valuations being part.
Speaker 2: Too stretched at this point in the earning season. Are
Speaker 2: we talking too much or focusing too much on tech?
Speaker 2: What else is sort of drawing your attention or what
Speaker 2: is tech to strategy?
Speaker 1: If I apologize, it's such a Brooklyn question, curious only people.
Speaker 2: Let's go lade, let's go old school what sector?
Speaker 5: But see I speak that language, So I think that
Speaker 5: the interesting thing about this earning season is the reaction
Speaker 5: of the stocks, and the backdrop is that we've seen
Speaker 5: some of this weakness and tech start to build. Tech
Speaker 5: treated below its fifty day moving average yesterday. It's been
Speaker 5: deteriorating on a relative basis. What's been winning the four
Speaker 5: ninety three the equal weight index. So if we look
Speaker 5: at earning sestiments going into twenty twenty five, what you
Speaker 5: can see is the mag seven is expected to decelerate
Speaker 5: a lot, but the overall market is expected to accelerate,
Speaker 5: which effectively says the four ninety three is about to
Speaker 5: have to carry all of that weight in the earnings growth.
Speaker 1: In conservative three year short term money, what we call
Speaker 1: retirement plans, are I more index or more active? Right now?
Speaker 5: I think you have to be both. It's not a
Speaker 5: black or white. It's a sliding scale. In indices that
Speaker 5: are highly concentrated, it does not pay you to pay
Speaker 5: for active management. In indices that have a great deal
Speaker 5: of dispersion, you can pay for active.
Speaker 1: NASA industries give me an example.
Speaker 5: So the difference between the growth sector and things like
Speaker 5: small cap and international in value, we think that there's
Speaker 5: a lot more opportunity to outperform and get alpha in
Speaker 5: those industries small cap international value where you have a
Speaker 5: lot more dispersion between winners and losers.
Speaker 1: When you're great at this will internationally get a jumpstart
Speaker 1: off legitimate week dollar.
Speaker 5: It has been in a relative down trend for the
Speaker 5: past fifty years. The week dollar is an absolute necessity
Speaker 5: for international to be able to outperform. The only time
Speaker 5: you've had big international bull markets is in big dollar
Speaker 5: bear markets. The only problem is that it has to
Speaker 5: translate to earnings. The most fascinating stat is that if
Speaker 5: you look from two thousand and seven to today, US
Speaker 5: earnings and the S and P five hundred are up
Speaker 5: one hundred and fifty percent. International EFA Index they're flat.
Speaker 5: The Emerging Market Index they're still down versus two thousand
Speaker 5: and seven. It's an earning story, not evaluation story.
Speaker 2: Questioned, let me go back to today's data. We go
Speaker 2: to today's data, to what you heard at Jackson Hole.
Speaker 2: This is a FED that has been for these last
Speaker 2: few years so united. There has been such unanimity. Do
Speaker 2: you sense that the remarks that we heard from FED
Speaker 2: chair Jerom Powell are widely shared? What are you listening
Speaker 2: for in the commentary that we're going to get before
Speaker 2: this meeting on the sixteenth and seventies.
Speaker 1: Did you see what she wrote? Did you see your research? Phiao.
Speaker 1: John Farrell introduced me to Love Island and the British
Speaker 1: Love Island is different. Love Island. No pharaoh taught me
Speaker 1: in ninety day five fiance or something farah all this
Speaker 1: garbage from London. Pharaoh introduced me to. And so cam
Speaker 1: doesn't have Love Island, She's got doug Island, Dove Island. Yeah,
Speaker 1: and that j.
Speaker 5: Powell may be the only bombshell on Dove Island. It's
Speaker 5: really interesting. The one word missing from that Jackson Hole
Speaker 5: speech was patience. And that's the one word you've heard
Speaker 5: from every other FED voting member, which just means that
Speaker 5: Powell is thinking I could do fifty other voting members
Speaker 5: are saying no, slow and steady twenty five basis points
Speaker 5: more evidence, we can take our time.
Speaker 1: Kim Dawson, thank you so much. Now as here justin
Speaker 1: sink is going? Why am I here? Futures up twenty
Speaker 1: six off of the news PCE ebbed a little way,
Speaker 1: still up seventeen. Nasdak was up eight tenths of a percent.
Speaker 1: Now up seven tenths of a percent. He is our
Speaker 1: White House correspondent, and it is things have changed. Justin
Speaker 1: sink joins us right now. Justin what has changed? It's
Speaker 1: sixteen hundred Pennsylvania Avenue.
Speaker 6: Well, I think there's a lot of changes, both, you know,
Speaker 6: at the White House itself and in the race overall.
Speaker 6: So you know, at the White House it's a completely
Speaker 6: different posture from just five weeks ago when Joe Biden
Speaker 6: dropped out. There's been significant staff turnover as people exit
Speaker 6: to either find outside opportunities or go join sort of
Speaker 6: super packs and affiliates. The President himself has been on
Speaker 6: vacation now, this is his second straight week. I don't
Speaker 6: know if he's seen any whale so unfortunately, but he
Speaker 6: is just kind of scaled back as cadence overall, and
Speaker 6: I think it's it's mostly because they're trying to stay
Speaker 6: out of the way of Kamala Harris. And as you know,
Speaker 6: Bloomberg Swing State pole that came out today showed it's working.
Speaker 6: You know, it was a sort of undeniably great poll
Speaker 6: for Kamala Harris shows her sustaining and building on that
Speaker 6: momentum that she got from taking over the ticket from
Speaker 6: Biden and now has either a tire or lead in
Speaker 6: all the major swing states. So at the White House,
Speaker 6: I think a lot of what they're trying to do
Speaker 6: is just bolster her where they can, but otherwise stan out.
Speaker 4: Of the way.
Speaker 2: Justin you mentioned that, Cadence, and I wanted to ask
Speaker 2: you about President Biden's ambitions and watching that conversation last
Speaker 2: night between the vice president and her running mate and
Speaker 2: Dana Bash of CNN, there was a lot of due
Speaker 2: deference too in mentioning of the current president. What are
Speaker 2: his aspirations going for? Is once he gets back from
Speaker 2: this vacation, gets back from California, comes to the East
Speaker 2: coast again, what does he hope to accomplish? How clearly
Speaker 2: articulated is that mission or that vision by the White House?
Speaker 6: Yeah, I think there's a couple elements to it. One
Speaker 6: is sort of legacy protection. I think the president is
Speaker 6: going to go out and make the case for why
Speaker 6: his first term was success, even though it's something that
Speaker 6: voters don't necessarily agree with. And there's two reasons for that.
Speaker 6: One is obviously self interested, with the other is because
Speaker 6: it helps Kamala Harris and you heard her in that
Speaker 6: interview last night.
Speaker 1: Sort of.
Speaker 6: She didn't back away from the economy. She didn't back
Speaker 6: away from the way that he's conducted foreign policy, and
Speaker 6: foreign policy is probably the second major focus for the
Speaker 6: president right now. The sort of hostage sees fire deal
Speaker 6: in the Middle East is the last big legacy item
Speaker 6: sitting there, and I think that's going to be a
Speaker 6: big focus for him, especially as he might ramp up
Speaker 6: some farewell foreign travel in the last few weeks.
Speaker 1: Right, justin Sink with us right now. David Wasserman to
Speaker 1: be with us here later on in the hour, wrapped
Speaker 1: her on some good equity coverage futures at sixteen, I'm
Speaker 1: asking a question to both you. I want two answers.
Speaker 1: Justin Sink David Gura. Are you supposed to campaign on policy?
Speaker 2: David Gurra, Yes, although there is this kind of moved
Speaker 2: to the middle as we talked about a little bit
Speaker 2: of relier.
Speaker 1: Campaign on policy, it was the whole crime thing, you know,
Speaker 1: That's what he knew we'd get votes.
Speaker 2: This is such a strange campaig in so many ways.
Speaker 2: Obviously paramount in the sense that it's moving very quickly
Speaker 2: here and it's a very short, compressed campaign and so
Speaker 2: we've seen the Harris campaign putting out more policy positions,
Speaker 2: I want to say, policy papers, but more definition. There
Speaker 2: there has to be a nod to policy. And herein
Speaker 2: lies the trickiness of this campaign. The Democratic campaign is
Speaker 2: differentiating itself, at least somewhat from the incumbent president.
Speaker 1: So justin sink, you're a Chicago buried in American politics
Speaker 1: and government, you're studying this in the old days. Did
Speaker 1: they talk policy in a campaign? I would suggest they didn't.
Speaker 6: And I think that as much as you know, Bloomberg
Speaker 6: readers and listeners want to hear about Vice President Harris's policy,
Speaker 6: that's not what that campaign is really interesting forward. And
Speaker 6: they just keep hammering the idea of joy and of change,
Speaker 6: and it's you know, it's not different from hope and
Speaker 6: change that we had with Barack Obama. There's policy under
Speaker 6: underpinning that they've made a push on housing, they've made
Speaker 6: a push on helping the middle class address some costs.
Speaker 6: But genuinely, what they're trying to present the American people
Speaker 6: is this idea that hey, we are turning the page
Speaker 6: on a decade and a half era of Donald Trump
Speaker 6: and Joe Biden, that you've frankly grown tired of Justin.
Speaker 2: When I look at that polling that you mentioned a
Speaker 2: moment ago, Yes, the headline numbers are astonishing how well
Speaker 2: the Vice president has carried that momentum forward. But I
Speaker 2: looked deeper at some of these issues, and I think
Speaker 2: the thing that surprised me the most, and I imagine
Speaker 2: delights the Harris campaign, is what they hope would come
Speaker 2: to pass. That is, Vice President Harris could campaign on
Speaker 2: the economy and voters would, if not forget, seemingly forgive
Speaker 2: the fact that she has been part of this administration
Speaker 2: in the White House. You look at sort of how
Speaker 2: they feel about inflation, how they feel about the economy.
Speaker 2: They're giving her, maybe not a pass, but more of
Speaker 2: one than they were giving President Biden when he was
Speaker 2: running for reelection.
Speaker 1: For sure.
Speaker 6: I mean on the question of housing, which is obviously
Speaker 6: a key issue on a big struggle for Biden. They
Speaker 6: give Harris a four point advantage over Trump. There's a
Speaker 6: seven point advantage on who helps the middle class mark,
Speaker 6: And it really suggests that that people are willing to
Speaker 6: sort of put it all aside and say Harris we
Speaker 6: see as a totally different candidate even if she's continuing
Speaker 6: to champion a lot of his policies.
Speaker 1: Okay, I'm going to ask the question everybody wants to know.
Speaker 1: I don't care what your politics are, John, how many
Speaker 1: polls released in the last twenty four hours.
Speaker 2: Like eight, I think about six hundred poles.
Speaker 1: Poles in August.
Speaker 2: That's within the marches.
Speaker 1: They're holed out. I mean, I'm sorry, great polls, love
Speaker 1: what Iowa does, love what Bloomberg does. They're all great.
Speaker 1: Do you actually study the polls or are they just
Speaker 1: noise to a pro like justin.
Speaker 6: Sinc Well, I think, to me, the biggest question is,
Speaker 6: you know, are we in a honeymoon or not?
Speaker 1: Right?
Speaker 6: A lot of the poles are saying the same thing
Speaker 6: right now. But Kamala Harris is coming off of a
Speaker 6: convention that was really great. And while these poles are good,
Speaker 6: they're not runaway.
Speaker 4: And so.
Speaker 6: You got to really put a grain of salt in
Speaker 6: all of this, which is where within the margin of
Speaker 6: earon you know, nearly all of these things and this
Speaker 6: rais is going to go down to a razor's edge.
Speaker 6: So while it's you know, you'd rather be harrassed than
Speaker 6: Trump right now, I don't think anybody is kind of
Speaker 6: saying that this thing's over justin thank.
Speaker 1: You so much, justin sink at the White House, and
Speaker 1: I should say it our news bureau in Washington. Victoria
Speaker 1: Fernandez knows this. She's with Crossmark Global Investments and she's
Speaker 1: joining us in the studio because it's cooler in New
Speaker 1: York than absolutely tea. Thank you so much for joining today.
Speaker 1: Is the battle one on inflation? And if you have disinflation,
Speaker 1: does that mean earnings are worth more?
Speaker 7: Well, I don't know if I would say the battle
Speaker 7: is one on inflation. I think we're heading that way.
Speaker 7: I know, you know, Powell has come out and said,
Speaker 7: look where we think we're done there, and they're moving
Speaker 7: on looking at the labor market. But there's a lot
Speaker 7: of underlying elements and inflation that I think can still
Speaker 7: hold us up towards this three percent level. I don't
Speaker 7: think it's going to go away as quickly as the
Speaker 7: Feds anticipating. So when we look at the idea of
Speaker 7: one hundred basis points cut from now through the end
Speaker 7: of the year, I think that's a little optimistic. I
Speaker 7: think we may see fewer than that because there are
Speaker 7: other elements in.
Speaker 1: The Bob Doll Victoria Fernandez world. My money question is simple,
Speaker 1: what are your clients doing? Not the talk of strategy,
Speaker 1: but what is the xuberance there? Have we reached a
Speaker 1: bull market silly season?
Speaker 7: You know, it's interesting earlier people were talking about the
Speaker 7: sixty to forty portfolio, and I will tell you that
Speaker 7: is what we have seen coming in from our clients.
Speaker 7: More than anything. They want that balance strategy. They're not
Speaker 7: exactly sure what's going to happen with all of the
Speaker 7: uncertainties that we have, whether it's here domestically, whether it's geopolitics,
Speaker 7: whether it's inflation. The concerns about the consumer having that
Speaker 7: diversification in their portfolio is what they want with a
Speaker 7: little bit of extra kick on something. So maybe that's
Speaker 7: a covered call strategy, Maybe that's a little bit of
Speaker 7: a long short component. They want to be invested in
Speaker 7: the market, which we agree with, but they want to
Speaker 7: be a little bit cautious. So they've been listening to
Speaker 7: what we've been telling them.
Speaker 2: Triage those risks for us. They come to you worried
Speaker 2: about all those many things, what's happening overseas, inflation, the election,
Speaker 2: what have you how do you rate all of that?
Speaker 2: What do you see of those risks as being the
Speaker 2: one that you know is something that should strike fear
Speaker 2: in investors right.
Speaker 7: Now, It's going to take turns, right There's going to
Speaker 7: be different elements that kind of rear its head at
Speaker 7: different point in time. Obviously as we get closer to
Speaker 7: the election, that's going to cause more volatility in this market.
Speaker 7: The thing we have to look at there is, you know,
Speaker 7: you have to have to have a lot of these
Speaker 7: things passed. We have to have a government that changes dramatically.
Speaker 7: I'm not sure a lot of it will come to fruition.
Speaker 7: So what we're looking at is more when it comes
Speaker 7: to the consumer component. We think that's key to this market,
Speaker 7: the labor market and the consumer. We got the spending
Speaker 7: and income numbers today again, we have spending almost double
Speaker 7: in a percentage basis. What income is. That does not
Speaker 7: bode well as credit card delinquencies go higher, as savings
Speaker 7: rates go down, as wages stagnate, as job losses increase.
Speaker 7: So to us, that's what we're most worried about.
Speaker 1: Victoria Fernandez driving the market higher, up eight tens of
Speaker 1: a percent of the Dow, up one hundred and thirty
Speaker 1: two points. It's like the ascendants of the Houston Astros.
Speaker 7: There's just nothing better right now at.
Speaker 1: The time of year it gets under eighty degrees in
Speaker 1: Houston and the astrostar.
Speaker 7: Technecy the that start flying, the.
Speaker 1: Bet start flying. My good friend Jim Kramer and I
Speaker 1: agree that the fact is on stocks, if you're lucky,
Speaker 1: thirty percent of stocks at any given time are doing well.
Speaker 1: Within financial wealth management, are you focused on owning the
Speaker 1: thirty percent and not owning the seventy How do you
Speaker 1: how do you try to find excellence in alpha in
Speaker 1: the winners that are there.
Speaker 7: So it really comes from that fundamental analysis that we do.
Speaker 7: We're not looking so much at trends as looking really
Speaker 7: at what do the cash flows look like on these companies.
Speaker 7: You know Bob and how he likes to dig down underneath, right,
Speaker 7: We want to look at persistence of earnings, predictability of earnings.
Speaker 7: These are the companies we like. So do we aim
Speaker 7: towards certain sectors? Sure, right now we're looking at healthcare.
Speaker 7: We've been investing in financials. These things have done well
Speaker 7: for us. But within those sectors, even within staples, you
Speaker 7: want to look at those companies that have that stability
Speaker 7: that can continue to generate good returns during volatility. So
Speaker 7: that's where we focus looking at those underlying factors.
Speaker 2: What is your takeaway from what we've seen with video
Speaker 2: this week? And again I just remark on and laugh
Speaker 2: at the way that those results were characterized, that you
Speaker 2: could call that kind of underwhelming or not what the
Speaker 2: market wanted. What's your perspective on that, and and what
Speaker 2: takeaway can we can we take from that? Just about
Speaker 2: the way that we look at the performance of companies
Speaker 2: and their projections going forward.
Speaker 7: So we've been a little different than probably most people
Speaker 7: out on the street where we've been trimming those high
Speaker 7: growth tech names all year long, anticipating that at some
Speaker 7: point you're not going to continue to grow at four
Speaker 7: hundred percent year over year, right, so you can still
Speaker 7: have great numbers and the trend be slowing. And that's
Speaker 7: what we saw with in videos. So I was a
Speaker 7: little surprised that the market reacted the way it did.
Speaker 7: I mean, still solid numbers there, but what it tells
Speaker 7: us is the breadth is growing. We've all been waiting
Speaker 7: for that all year to have that breadth in the market.
Speaker 7: We're seeing it in stock prices, I want to see
Speaker 7: it in earnings.
Speaker 1: Fideli out with the number of millionaire or four oh
Speaker 1: one k. How do you do you manage a million
Speaker 1: dollar foural one k differently than one hundred and fifty
Speaker 1: thousand dollars four one k? Are they all those same?
Speaker 7: You're not going to manage it differently. In the idea
Speaker 7: of where you want to allocate your resources based on
Speaker 7: the macro that's out there, your strategy will be the same.
Speaker 7: Can you have a little more diversification, yes. Can you
Speaker 7: maybe add a couple extra elements of something into that
Speaker 7: portfolio to juice income a little bit, Yes, you can
Speaker 7: do that. But from the one hundred thousand foot level, yeah,
Speaker 7: you're investing the same.
Speaker 1: Houston overweight energy. It's genetic. Victoria Fernandez on energy.
Speaker 7: Look, energy has been struggling. We know it's one of
Speaker 7: the sectors that has not been doing as well. Even
Speaker 7: though you look at balance sheets, you've got some strong
Speaker 7: balance sheets there, there's some cash there. They're waiting, right,
Speaker 7: They want to know what policy is going to look
Speaker 7: like going forward before they jump in and put a
Speaker 7: lot of capex to work. If you take tech out
Speaker 7: of the equation CAPEX is actually coming down. Some of
Speaker 7: that has to do with the energy companies. We anticipate
Speaker 7: seeing that turn, so we think you need to have
Speaker 7: some exposure, probably go for some of those big integrated names.
Speaker 7: At this point, I get.
Speaker 1: One more question or Michael Barr's got to get in
Speaker 1: here and do the news. Victoria Fernandez, can I do
Speaker 1: a major shout out to Texas A and M with
Speaker 1: the only real football game wow this weekend? Notre Dame
Speaker 1: Texas A and M. I mean, we're hit. Brian Lebanon
Speaker 1: from Michigan.
Speaker 2: Who are they playing with?
Speaker 1: You'd figure Texas A and M would be playing you know,
Speaker 1: the Teachers College of Louisiana or whatever. I don't know, Victoria,
Speaker 1: that's very cool. Yeah, see Notre Dame playing Texas A
Speaker 1: and M is like, what's a Texas spirit?
Speaker 7: That's exactly right.
Speaker 1: Let's go Aggie's We're gonna have to say, give me
Speaker 1: an oil price here, cross Mark. You guys live this stuff.
Speaker 1: Brent Crude West Texas Intermediate.
Speaker 7: Yeah, I mean, look.
Speaker 1: Stability or higher.
Speaker 7: I think it's going to go a little bit higher,
Speaker 7: but not tremendously. We're not looking at one hundred dollars
Speaker 7: coming in. Do we go around eighty and stay there
Speaker 7: because of geopolitical reasons, we can, but I also don't
Speaker 7: think we're going to go too much. Lower demand is
Speaker 7: still there, there's still some supply concerns, so I think
Speaker 7: you'll be pretty steady around the eighty level.
Speaker 1: It's the religion, folks. We really our team has done
Speaker 1: a great job today given this to you with our
Speaker 1: equity at coverage. You have to be in the market
Speaker 1: to participate and win. Robert Dahl, Victoria Fernandez, cross Mark
Speaker 1: live that every day. Thank you so much. You moved
Speaker 1: to New Yorker.
Speaker 7: Is it's just like a visit, No, just visiting. Getting
Speaker 7: my daughter ready for her senior year at n YU.
Speaker 7: All right, she is journalism and politics, so you know
Speaker 7: what you can right here.
Speaker 1: I saw you. I saw you ten minutes ago with Mike.
Speaker 1: Is that what that was?
Speaker 7: We're going to bring her on in and you know what,
Speaker 7: her favorite show UK Love Island, And I heard a
Speaker 7: little bit of you. I want to talk to you
Speaker 7: about that.
Speaker 1: You talked to John Ferrer about that. That's a I mean,
Speaker 1: you know, if you're at n YU and you're watching
Speaker 1: Love Island, that is a resume building. Yes, yes for Fernandez,
Speaker 1: Thank you so much. With Crossbark. This is a Bloomberg
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