WEBVTT - Markets Impacted by Earnings and Geopolitics 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.360 --> 0:00:30.320 Cameron Dawson briefe from New Edge. I think a lot 0:00:30.360 --> 0:00:34.720 of our listeners know the Cameron Dawson line. What has 0:00:34.960 --> 0:00:38.959 changed for you in the last forty eight seventy two 0:00:39.080 --> 0:00:42.160 hours with a reaffirmation of equities. 0:00:42.720 --> 0:00:45.599 I think that what got reaffirmed is that we are 0:00:45.720 --> 0:00:48.400 still very much in an up trend. What got taken 0:00:48.479 --> 0:00:51.599 out or changed in the last twenty four hours is 0:00:51.640 --> 0:00:54.560 the risk that the Fed would be hiking rates at 0:00:54.560 --> 0:00:57.400 some point in twenty five or twenty six. The two 0:00:57.480 --> 0:01:00.240 year treasury yield got to four point four percent, which 0:01:00.280 --> 0:01:02.680 is just slightly below we're Fed funds is right now. 0:01:03.120 --> 0:01:05.960 That meant that you were pricing in some risk that 0:01:05.959 --> 0:01:06.880 we could get to hikes. 0:01:07.000 --> 0:01:08.960 I want to talk about the ambiguity out there. It's 0:01:08.959 --> 0:01:12.920 a microeconomic concept, folks, which is yields go up. OMG, 0:01:13.120 --> 0:01:15.440 that's bad for stocks. And I've had a number of 0:01:15.440 --> 0:01:18.959 sophisticated guests like you say, maybe. 0:01:18.640 --> 0:01:20.880 Not yields a bit higher. 0:01:21.440 --> 0:01:25.679 There's a bit more inflation, nominal GDP is better, and 0:01:25.840 --> 0:01:30.680 revenues come in sprightly like delta four out of eight 0:01:30.760 --> 0:01:35.640 banks whatever, Cardia and Switzerland. I mean, is this a 0:01:35.720 --> 0:01:37.640 revenue myss that we're going into. 0:01:37.400 --> 0:01:37.920 In this court? 0:01:38.000 --> 0:01:38.800 The smcreo. 0:01:39.480 --> 0:01:41.160 Well, I do think that we need to make a 0:01:41.240 --> 0:01:44.480 distinction between what's going on with European luxury and what 0:01:44.520 --> 0:01:49.200 could happen within US consumer stocks, because European luxury is 0:01:49.240 --> 0:01:52.920 benefiting from a week euro and a strong dollar. If 0:01:52.960 --> 0:01:55.760 we see US consumer stocks potentially coming out saying, hey, 0:01:55.800 --> 0:01:58.480 the dollar's really strong, it's weighing on some demand or 0:01:58.640 --> 0:02:02.080 weighing on our revenues, that could be a headwind. We 0:02:02.120 --> 0:02:04.640 do think at the end of the day, inflation is 0:02:04.920 --> 0:02:09.280 good for earnings because inflation allows you to have pricing power, 0:02:09.360 --> 0:02:12.040 it gives you revenue upside, it gives you operating leverage. 0:02:12.240 --> 0:02:14.640 So we do think that having a little inflation in 0:02:14.680 --> 0:02:16.480 the system is one of the reasons why earnings have 0:02:16.560 --> 0:02:17.160 been so strong. 0:02:17.280 --> 0:02:19.359 Kay, And it's only January sixteenth, so forgive me for 0:02:19.400 --> 0:02:22.360 the baseball reference pictures and catchers don't report until February eleventh. 0:02:22.400 --> 0:02:24.440 But here's my question for you. What inning are we in? 0:02:24.560 --> 0:02:26.639 I mean, seriously, I can hear people make a case 0:02:26.639 --> 0:02:29.040 that we're early stage, that we're late stage. Where are 0:02:29.040 --> 0:02:30.560 we in the business cycle right now? 0:02:31.160 --> 0:02:34.160 We've been thinking that we lean more towards late cycle 0:02:34.280 --> 0:02:39.000 because of your long cyclical indicators like where construction spending is. 0:02:39.200 --> 0:02:42.160 If you were early cycle, that would not be at peaks. 0:02:42.440 --> 0:02:44.799 But if we think about where we are from a 0:02:44.919 --> 0:02:48.000 pricing standpoint, we do have to appreciate that we're going 0:02:48.080 --> 0:02:50.480 into this year at a much higher valuation than we 0:02:50.520 --> 0:02:53.119 did the last two years. And we think the biggest 0:02:53.280 --> 0:02:56.200 question for twenty twenty five is whether or not the 0:02:56.400 --> 0:03:00.000 twenty twenty peak valuation about twenty three times earnings access 0:03:00.000 --> 0:03:02.960 as a ceiling or if it's just another step along 0:03:03.000 --> 0:03:05.560 the way to this huge multiple expansion that we've seen 0:03:05.600 --> 0:03:06.360 the last two years. 0:03:06.440 --> 0:03:07.840 Yeah, kim, let me let me build on this a 0:03:07.880 --> 0:03:10.000 little bit. I was looking at us real yields, right 0:03:10.040 --> 0:03:11.400 and I was looking at the two year versus the 0:03:11.440 --> 0:03:13.320 ten yeard, trying to decompose them, and they're telling me 0:03:13.320 --> 0:03:15.320 two different things. If you look at the moving yields 0:03:15.320 --> 0:03:17.480 and nominal yields. Much of it can be explained by 0:03:17.480 --> 0:03:19.600 inflation breakkeapings going up at least in the front end, 0:03:19.680 --> 0:03:21.320 but if you look out to the ten year, it's 0:03:21.320 --> 0:03:23.720 a move in real yields and growth expectations. So you know, 0:03:23.760 --> 0:03:25.760 I'm trying to kind of reconcile the two. 0:03:25.760 --> 0:03:26.600 What are your thoughts there? 0:03:26.800 --> 0:03:30.040 Yeah, and we also have to add in these fiscal concerns, 0:03:30.080 --> 0:03:33.360 the potential questions around how are you going to fund 0:03:33.520 --> 0:03:36.240 the fiscal deficit. Given the fact that we're hearing from 0:03:36.280 --> 0:03:39.280 Bessent today, we know that bills as a percentage of 0:03:39.280 --> 0:03:42.600 Treasury issuance or Treasury's outstanding is now at twenty percent 0:03:42.760 --> 0:03:45.320 or over twenty percent. That's more than what tee back 0:03:45.400 --> 0:03:49.480 the Treasury Borrowing Authority recommends, which just suggests that that 0:03:49.640 --> 0:03:52.240 is a huge question for how Besant is going to 0:03:52.360 --> 0:03:55.320 navigate these big deficits. Do we see them do more 0:03:55.360 --> 0:03:58.120 cubon issuance? Does that cause long yields to go up? 0:03:58.360 --> 0:03:59.040 Big questions? 0:03:59.280 --> 0:04:03.200 Kemp, I want you, you're so visible and enthusiastic about 0:04:03.240 --> 0:04:08.080 the American experiment. I want you to talk about a 0:04:08.120 --> 0:04:13.600 gloom crew quieted again, like go to cash, and then 0:04:13.600 --> 0:04:15.520 I got to figure out how to get back into 0:04:15.520 --> 0:04:17.600 the market once I'm in cash. 0:04:18.000 --> 0:04:19.080 What's your take on that. 0:04:20.360 --> 0:04:24.200 We do think that you should always see volatility as 0:04:24.240 --> 0:04:28.440 opportunity and it's a mindset shift that means that when 0:04:28.760 --> 0:04:32.560 nicely said, yeah, you do, when you see volatility, it's 0:04:32.680 --> 0:04:35.080 very easy for fear to kick back in and that's 0:04:35.120 --> 0:04:38.240 when you get frozen. You get that arrested development. So 0:04:38.560 --> 0:04:42.160 we think if you judge us as advisors, our success 0:04:42.240 --> 0:04:44.880 is when clients call us when there is volatility and 0:04:44.920 --> 0:04:47.800 say what should I buy? Versus saying get me out 0:04:47.800 --> 0:04:48.680 of this. I want to sell. 0:04:48.800 --> 0:04:52.520 This is so damien. I can't say enough. I mean, 0:04:52.560 --> 0:04:55.719 you're on the beach in Miami, you don't care. I'm 0:04:55.880 --> 0:05:01.000 inundated on the street, in restaurants, my email some of four, 0:05:01.520 --> 0:05:05.040 I'm inundated with people saying I'm afraid to participate. 0:05:05.279 --> 0:05:06.880 Well, I'm going to channel Brooks Ritchie in a little 0:05:06.880 --> 0:05:08.880 bit of behavioral finance here, because for me, as we 0:05:08.920 --> 0:05:13.200 get into January, it's all about positioning. It's all about sentiment, right, 0:05:13.240 --> 0:05:15.400 and so talk to me about financial conditions. I mean, 0:05:15.400 --> 0:05:16.840 what is it going to take to knock you us 0:05:16.880 --> 0:05:19.840 financial conditions back again just a little bit. I mean, 0:05:19.920 --> 0:05:21.880 is it going to be you know, equities coming off here? 0:05:21.960 --> 0:05:23.960 Or spreads? I mean, how tight can spreads go? I mean, 0:05:24.000 --> 0:05:26.720 talk to us about financial conditions? What are your expectations there? 0:05:26.839 --> 0:05:29.560 Isn't it fascinating? So the four main components of financial 0:05:29.560 --> 0:05:35.200 conditions being yields, currencies, equity prices, and credit spreads. Yields 0:05:35.240 --> 0:05:38.120 and currencies have all tightened, but because equities and credit 0:05:38.200 --> 0:05:41.320 spreads have remained so resilient, you haven't seen a tightening 0:05:41.360 --> 0:05:45.440 in financial conditions, which means we think that financial markets 0:05:45.440 --> 0:05:48.200 are effectively saying FED are not that tight. If the 0:05:48.240 --> 0:05:50.520 FED was that tight, credit spreads would not be at 0:05:50.520 --> 0:05:53.400 twenty year tights. If the FED was really weighing on 0:05:53.480 --> 0:05:56.800 economic activity in a significant way, you would not see 0:05:56.800 --> 0:05:58.120 how yield spreads where they are. 0:05:58.440 --> 0:06:00.440 What's your call in the market now? 0:06:00.480 --> 0:06:03.200 I mean, people, the whiplash the last two weeks has 0:06:03.200 --> 0:06:07.200 been you. We're deep into twenty twenty five. I mean, 0:06:07.240 --> 0:06:09.080 what's your call in the market this year? 0:06:09.480 --> 0:06:12.640 Respect the trend, but do not ignore the risks. Our 0:06:12.720 --> 0:06:15.720 call for twenty twenty five is a wide, choppy range. 0:06:16.240 --> 0:06:18.400 Okay, we got to run because they got to do 0:06:18.480 --> 0:06:20.640 bank earnings. You want to do bank earnings with us? 0:06:20.920 --> 0:06:22.760 Yeah, he's more can Stanley being able to talk about 0:06:22.760 --> 0:06:23.720 an entrance margins coming? 0:06:23.880 --> 0:06:26.839 Ken Leon joins us, Now he's really really I'm honored 0:06:26.920 --> 0:06:30.800 by this senior analyst Cfira with decades of experience. 0:06:31.120 --> 0:06:31.400 Ken. 0:06:31.760 --> 0:06:34.599 My basic take in my audience has heard this from me. 0:06:35.240 --> 0:06:38.400 The banks are literally sandbag and how much money they're making, 0:06:39.120 --> 0:06:43.440 they are profit machines. Let's start with the why Why 0:06:43.480 --> 0:06:45.880 are these big banks profit machines? 0:06:47.600 --> 0:06:51.839 The banks have a much stronger business model today Tom 0:06:51.920 --> 0:06:54.920 than what we spoke about maybe three, five or ten 0:06:55.000 --> 0:06:59.520 years ago. They have a blend of great franchises with 0:07:00.560 --> 0:07:06.640 recurring revenue fees for transactions across many businesses, and then 0:07:06.839 --> 0:07:11.640 on the up cycle for investing or really for investment banking, 0:07:12.360 --> 0:07:15.560 we're seeing the added benefits. So it's almost like putting 0:07:15.920 --> 0:07:19.040 fuel on the fire. And that's the story for twenty 0:07:19.160 --> 0:07:19.720 twenty five. 0:07:19.920 --> 0:07:23.840 Is there a monopolistic tendency here? Is there concentration of 0:07:23.920 --> 0:07:28.360 revenue and particularly concentration of profits so great that you 0:07:28.440 --> 0:07:29.320 are concerned? 0:07:30.680 --> 0:07:33.200 Well, we're not concerned, but investors have to be aware 0:07:33.320 --> 0:07:35.920 so that when you're investing in the overall market or 0:07:35.960 --> 0:07:40.400 the financial sector, the five global US banks or top 0:07:40.440 --> 0:07:45.240 ten constituents. And when we look at these banks, they're 0:07:45.280 --> 0:07:49.360 gaining wallet share across different businesses. So the answer is yes, 0:07:49.680 --> 0:07:55.640 consumer investment banking taking wallet share from Europe. Across most businesses, 0:07:55.720 --> 0:07:57.280 they have dominant positions. 0:07:57.720 --> 0:08:00.520 But that's a strength for America. 0:08:00.080 --> 0:08:00.200 Up. 0:08:00.840 --> 0:08:02.720 Ken, I'm sitting here next to gam Dawson and she's 0:08:02.800 --> 0:08:04.600 dying to ask you this question. I mean, bankers are 0:08:04.600 --> 0:08:07.360 claiming that there's just this enormous appetite for capital at 0:08:07.360 --> 0:08:10.640 current levels. I mean a surge and profitability. Not just JP, 0:08:10.960 --> 0:08:13.080 not just Goldman, but Wells and City as well, Yesterda, 0:08:13.200 --> 0:08:15.800 Wells Fargo. Yeah, I mean everyone is making money in 0:08:15.840 --> 0:08:18.200 this market. Ken, talk to us about BAA and Morgan Stanley. 0:08:18.240 --> 0:08:19.200 What are you focused on here? 0:08:20.440 --> 0:08:22.640 So we took a look at the numbers for Bank 0:08:22.640 --> 0:08:25.960 of America. They're slightly better than JP. Morgan A loan 0:08:26.080 --> 0:08:29.200 deposit growth three percent for buff Net enter or sink 0:08:29.240 --> 0:08:33.720 I'm three percent in the areas of global banking, very 0:08:33.760 --> 0:08:35.520 strong across all areas. 0:08:36.880 --> 0:08:38.560 I think any. 0:08:38.360 --> 0:08:42.080 Of these managements want to understate their book or outlaws 0:08:42.120 --> 0:08:43.720 than still early. 0:08:44.080 --> 0:08:46.160 This is my big theory. Cameron Dawson with us, we're 0:08:46.160 --> 0:08:48.520 doing this differently this time. Do you have Cam Dawson 0:08:48.600 --> 0:08:51.640 looking at the holistic market and Ken Leon with terrific 0:08:51.679 --> 0:08:54.839 granularity is really what surveillance is about. 0:08:54.640 --> 0:08:56.160 Kim Dawson, you're listening to this. 0:08:56.480 --> 0:08:58.680 Is this a year where you look at Ken Leon's 0:08:58.720 --> 0:09:02.040 work and say it's a sector acquisition or do you 0:09:02.200 --> 0:09:04.160 buy individual securities? 0:09:04.520 --> 0:09:04.760 Yeah? 0:09:04.920 --> 0:09:07.360 I mean we think the financials are set up for success. 0:09:07.480 --> 0:09:10.120 You have a strong economy, you have a steeper yield curve, 0:09:10.200 --> 0:09:13.760 you have the potential for regulatory improvement, and you have 0:09:13.840 --> 0:09:16.760 the potential for a return to business activity in M 0:09:16.760 --> 0:09:19.640 and A and IPOs. These are all important tailwinds. Just 0:09:19.720 --> 0:09:22.600 don't forget the banks are now not that cheap. They're 0:09:22.640 --> 0:09:24.960 trading at one and a half times book, which is 0:09:24.960 --> 0:09:27.120 effectively the peak chem You agree, ken. 0:09:27.040 --> 0:09:28.800 Leone, Are they rich? Yeah? 0:09:28.840 --> 0:09:31.240 So we in November we've put the report out stay 0:09:31.320 --> 0:09:34.840 the course for twenty twenty five. And what strategists don't 0:09:34.880 --> 0:09:39.080 know is sometimes you can earn into your valuation or higher. 0:09:39.120 --> 0:09:42.520 So we're going to see upward earnings estimates for the 0:09:42.559 --> 0:09:46.680 consensus through all this year, we're overweight the financial sector 0:09:46.720 --> 0:09:49.320 along with technology and communications services. 0:09:49.640 --> 0:09:51.840 Ken my Son was just on the Morgan stan Lee 0:09:51.840 --> 0:09:54.800 sophomore internship last night, and you know what, it's not 0:09:54.840 --> 0:09:57.440 about net interest margins. It's about wealth management. Talk to 0:09:57.480 --> 0:10:00.599 us about the seven one hundred and fifty what no, 0:10:00.640 --> 0:10:03.280 I'm sorry, I'm sorry, seven point three billion dollar beast. 0:10:03.600 --> 0:10:05.760 I mean, talk to us about wealth management, Morgan Stanley 0:10:06.120 --> 0:10:08.319 Q four. I mean it's kind of have been great, right, 0:10:08.440 --> 0:10:09.160 not lights out. 0:10:10.400 --> 0:10:15.000 It never has these enormous jumps in terms of growth, 0:10:15.040 --> 0:10:19.640 but they're just steady performers. What they do is they 0:10:19.760 --> 0:10:25.079 create the story for durable, recurring revenue fee services. And 0:10:25.120 --> 0:10:28.240 that's good because it's enabled Morgan Stanley in the last 0:10:28.280 --> 0:10:32.480 year or so to get a wide, higher and multiple closer, 0:10:32.640 --> 0:10:35.000 getting closer to a black Rock. So it is a 0:10:35.040 --> 0:10:39.040 blend with that strong franchise in wealth management. Goldman's coming 0:10:39.120 --> 0:10:42.040 up for different reasons, which is private ACNE and private 0:10:42.080 --> 0:10:44.520 capital will be their new secular growth area. 0:10:44.640 --> 0:10:46.400 I said this the other day, I think maybe it 0:10:46.440 --> 0:10:49.200 was yesterday, that Blackrock now is even beginning to be 0:10:49.280 --> 0:10:54.000 folded into the major bank analysis. With the success that 0:10:54.080 --> 0:10:56.160 we've seen We welcome all of you across the nation 0:10:56.280 --> 0:10:58.719 in your commute on Applecarplay. 0:10:58.200 --> 0:10:58.800 Android Otto. 0:10:58.840 --> 0:11:02.960 Good morning ninety nine one FM in Washington, Big events 0:11:03.000 --> 0:11:04.959 down there. We're gonna go to Ethan Brodner and Tel 0:11:05.000 --> 0:11:09.160 Aviv here in a bit. Good morning, ninety two nine FM, Boston, 0:11:09.520 --> 0:11:11.640 our flagship Bloomberg eleven to three to zero, New York. 0:11:11.679 --> 0:11:15.800 Good morning, and a first mentioned this morning YouTube Humbled 0:11:15.800 --> 0:11:20.560 by the attendance, Thank you so much. Subscribe to Bloomberg Podcasts. 0:11:21.040 --> 0:11:24.240 Ken Leon with us is CFII and Kim Dawson sitting in. 0:11:24.200 --> 0:11:26.000 As well with NewART t Wealth Damian. 0:11:26.080 --> 0:11:27.680 Yeah, Ken, I mean, look when I look at the 0:11:27.679 --> 0:11:29.079 Bank of Earnings and I try to break in and 0:11:29.120 --> 0:11:30.760 see what's going on undneath the surface, I look at 0:11:30.800 --> 0:11:33.160 dead underwriting because me that gives me a pretty decent 0:11:33.400 --> 0:11:36.000 lead on commercial real estate. You know, and we know 0:11:36.040 --> 0:11:37.880 what the commercial real estate market has looked like, and 0:11:37.920 --> 0:11:39.240 we know what it looks like right now. There's a 0:11:39.240 --> 0:11:41.160 lot of debt out there where you know, borrows are 0:11:41.200 --> 0:11:42.719 paying four percent and they're gonna have to adjust to 0:11:42.720 --> 0:11:45.199 an environment where they're paying eight nine percent. Now, talk 0:11:45.240 --> 0:11:47.200 to us about that hurdle. How do they get there 0:11:47.440 --> 0:11:49.800 and how are the banks helping them get there? 0:11:50.880 --> 0:11:54.480 Right? So, for any of the large banks, they mostly 0:11:54.559 --> 0:11:58.640 have exposure to multifamily, which is more stable. Commercial real 0:11:58.720 --> 0:12:01.560 estate is mostly office is at risk. We see it 0:12:01.600 --> 0:12:05.600 as kind of idiosyncratic for this year to twenty twenty six, 0:12:05.880 --> 0:12:10.920 which means no big reserves. They already took them. Additionally, 0:12:10.960 --> 0:12:14.600 the areas to still lendes areas like data centers for 0:12:14.720 --> 0:12:18.839 AI on a global basis and overhall. When we look 0:12:18.840 --> 0:12:22.520 at real estate, we're also seeing some deep values. So 0:12:22.640 --> 0:12:27.079 firms like Blackstone and KKR and others, we'll. 0:12:26.880 --> 0:12:27.640 Take a look at it. 0:12:27.679 --> 0:12:28.880 Brookfield's another one. 0:12:29.040 --> 0:12:30.880 Well, Ken, I mean I'm dying here. You talk a 0:12:30.880 --> 0:12:32.240 little bit more about these data centers. 0:12:32.280 --> 0:12:32.440 You know. 0:12:32.480 --> 0:12:34.280 My read on it is that the building of data 0:12:34.280 --> 0:12:36.800 centers accounts for easily one percent of GDP here in 0:12:36.840 --> 0:12:38.720 the US. I mean, Cam, what are your thoughts about, 0:12:38.960 --> 0:12:41.200 you know, that kind of convergence of you know, mag 0:12:41.280 --> 0:12:43.920 seven tech and the real estate sector. I mean, talk 0:12:43.920 --> 0:12:45.960 to us a little bit about what that means for 0:12:46.080 --> 0:12:46.960 the US economy. 0:12:47.240 --> 0:12:47.440 Yeah. 0:12:47.520 --> 0:12:50.319 Neil Dodger put out a really interesting note yesterday talking 0:12:50.360 --> 0:12:52.680 about how he thinks it's about a half a percentage 0:12:52.679 --> 0:12:55.120 point in the last year that tech has contributed and 0:12:55.880 --> 0:12:59.200 that you've seen a slow down in the permits or 0:12:59.240 --> 0:13:02.080 the initial kind of plans, which is a question of 0:13:02.080 --> 0:13:03.000 how long can it last? 0:13:03.120 --> 0:13:05.920 I got one more question, Ken Leander. What Damien was 0:13:05.960 --> 0:13:09.120 talking about there? I think is an important frame with 0:13:09.240 --> 0:13:15.040 your research capabilities at CFRA. Does Meg seven expand this 0:13:15.160 --> 0:13:19.319 year with data center buildouts? With the oomph, the productivity 0:13:19.360 --> 0:13:23.520 oomph of the American economy? Are we naiven a branded 0:13:23.559 --> 0:13:25.560 idea of just seven stocks? 0:13:27.480 --> 0:13:30.200 Well, it may not be seven stocks, you know, certainly 0:13:30.240 --> 0:13:34.600 there's some enormous companies that are just below that market. 0:13:34.600 --> 0:13:38.360 It's a very concentrated market. It does put a little 0:13:38.360 --> 0:13:42.400 bit higher risk on equities if you want to be defensive. 0:13:42.440 --> 0:13:45.120 Of course, Cameron could talk about an equal weight at 0:13:45.200 --> 0:13:48.920 S and P five hundred or the SMPA, divity and aristocrats. 0:13:49.000 --> 0:13:51.880 But overall, it's the market we're in. 0:13:52.280 --> 0:13:56.160 Cameron, I got twenty two seconds equal weight. It's all 0:13:56.240 --> 0:13:58.760 the rage now, isn't it. I mean every other page 0:13:58.760 --> 0:14:01.120 of Barons equal weight? 0:14:01.160 --> 0:14:01.680 What do you think? 0:14:01.880 --> 0:14:02.560 Be careful? 0:14:02.760 --> 0:14:03.199 Equal weight? 0:14:03.440 --> 0:14:03.800 Thank you? 0:14:03.640 --> 0:14:05.760 You have grown nine percent in the last two years. 0:14:05.800 --> 0:14:08.320 MAG seven earnings have grown one hundred and twenty five percent. 0:14:08.920 --> 0:14:12.640 This is why Cam Dawson's on, folks, She's got the detail. 0:14:12.800 --> 0:14:14.880 Say that one more time, it's too important. 0:14:14.920 --> 0:14:17.200 In the last two years, equal Weight earnings are up 0:14:17.280 --> 0:14:20.080 nine percent. Mag seven earnings are up one hundred and 0:14:20.160 --> 0:14:22.680 twenty five percent. No wonder, it's a consumation. 0:14:22.760 --> 0:14:24.480 The only one I know on the street that can 0:14:24.520 --> 0:14:27.119 do that is Sam Stolevall ken Leanes CFII. 0:14:27.280 --> 0:14:29.160 Thank you so much for joining us today. 0:14:29.200 --> 0:14:32.360 Cam Dawson, thank you as well, particularly for the acuity 0:14:32.600 --> 0:14:33.840 of theirs. 0:14:38.480 --> 0:14:42.040 You're listening to the Bloomberg Surveillance Podcast. Catch us Live 0:14:42.120 --> 0:14:45.280 weekday afternoons from seven to ten am Eastern. Listen on 0:14:45.360 --> 0:14:49.040 Applecarplay and Android Otto with the Bloomberg Business app, or 0:14:49.160 --> 0:14:50.800 watch us live on YouTube. 0:14:51.080 --> 0:14:53.920 We are honored to bring you Michael Nathansen of Maffatt 0:14:53.960 --> 0:14:59.800 Nathan sin on this horrific moment for Los Angeles. Michael, 0:14:59.800 --> 0:15:04.560 do you and Craig Moffatt have any idea how Hollywood 0:15:04.800 --> 0:15:09.800 pauses or shuts down or regroups. 0:15:10.680 --> 0:15:15.960 Were in tom That is the question, right, It's this 0:15:16.040 --> 0:15:18.120 is something that the industry did not need at this 0:15:18.160 --> 0:15:20.360 point in time, given that what you laid out of 0:15:20.360 --> 0:15:23.560 the past four years. I don't know how our groups, right, 0:15:23.560 --> 0:15:28.000 I don't know, you know, people have lost lives, homes. 0:15:28.200 --> 0:15:30.320 I just don't know the community. I don't know how 0:15:30.360 --> 0:15:32.600 they get back to work anytime soon. 0:15:32.840 --> 0:15:36.120 And the Hollywood reporter Ingrid Schmidt, folks, this is this 0:15:36.160 --> 0:15:41.760 is a minor story. Top Hollywood stylusts are helping fire 0:15:41.920 --> 0:15:46.320 victims rebuild their wardrobes. I mean, Michael pulled us over 0:15:46.440 --> 0:15:50.440 to the industry. Response you would hope for from people 0:15:50.520 --> 0:15:54.320 like Disney, like is basic as what do they do 0:15:54.400 --> 0:15:55.560 with the oscars? 0:15:55.840 --> 0:15:57.920 What do you and Craig presume they could do? 0:15:59.000 --> 0:16:02.720 I know it's interesting is invited to an award show 0:16:03.480 --> 0:16:06.200 next month, and I assumed it was going to be canceled, right, 0:16:06.800 --> 0:16:09.200 And I spoke to the people who were organizing it. 0:16:09.280 --> 0:16:12.160 They felt like, for the community's sake that it has 0:16:12.200 --> 0:16:13.960 to go on, right, the show must go on. 0:16:14.040 --> 0:16:14.640 Tom. 0:16:15.000 --> 0:16:17.520 I think they will try to get people together in 0:16:17.560 --> 0:16:22.920 a community and regroup and basically not slow down whatever 0:16:23.080 --> 0:16:23.800 was on the calendar. 0:16:23.840 --> 0:16:26.720 I really do, because it's you. 0:16:26.720 --> 0:16:30.160 Basically need to see people get together, figure out what 0:16:30.200 --> 0:16:32.960 you can do to help your neighbor. So I was 0:16:33.000 --> 0:16:35.280 surprised to learn that the thing what I was planning 0:16:35.320 --> 0:16:38.240 to go to was still on. So I have to 0:16:38.240 --> 0:16:40.680 believe the show will go on, Tom, I really do. 0:16:41.320 --> 0:16:41.600 Please. 0:16:41.680 --> 0:16:43.360 Well, Michael, I mean, look we I mean, you live 0:16:43.360 --> 0:16:45.080 in Scarsdale. I live in Ryan, New York. You know, 0:16:45.120 --> 0:16:47.040 we have friends out west, you know. And my question 0:16:47.120 --> 0:16:48.520 for you just you know, and what you're hearing and 0:16:48.560 --> 0:16:50.160 what you're you know, what what does your gut tell you? 0:16:50.200 --> 0:16:51.800 I mean, how is LA going to move through this? 0:16:51.880 --> 0:16:54.240 I mean, do you see migration? Do you see a 0:16:54.240 --> 0:16:56.160 lot of the wealthy people who are out along the 0:16:56.160 --> 0:16:59.280 pch you know, moving south, moving back to New York? 0:16:59.320 --> 0:17:00.880 Even I mean, talk to us a little bit about 0:17:00.880 --> 0:17:01.360 what you're hearing. 0:17:02.040 --> 0:17:04.560 Well, it's you know, Sally, one of our partners in 0:17:04.640 --> 0:17:10.480 Marfa Nathanson, lives by Brownwood and they spent some time 0:17:10.560 --> 0:17:13.879 down south of LA, and he was suggesting that people 0:17:13.880 --> 0:17:18.679 will move further south, away from the canyons and the hills, 0:17:19.119 --> 0:17:22.760 maybe closer to the beaches. But you know, so to 0:17:22.800 --> 0:17:25.960 your point him, you know, you've lost Rye, You've lost Scarsdale. 0:17:26.040 --> 0:17:30.200 It's that type of you know, erosion of a community. 0:17:30.960 --> 0:17:32.920 And I think it's going to take years for this 0:17:32.960 --> 0:17:34.600 community to rebuilt. I do think you're right. 0:17:34.640 --> 0:17:36.880 I think if you have the schools, I mean that's 0:17:37.760 --> 0:17:39.040 people like us. I mean, what do you send your 0:17:39.080 --> 0:17:39.600 kids to school? 0:17:39.640 --> 0:17:39.760 Now? 0:17:39.760 --> 0:17:40.080 What do you do? 0:17:40.119 --> 0:17:44.480 How do you read crazy or church or temple or hospitals. 0:17:44.160 --> 0:17:47.120 It's it's hard to imagine, but I think you will 0:17:47.119 --> 0:17:47.640 see a flight. 0:17:47.720 --> 0:17:47.919 I do. 0:17:48.040 --> 0:17:51.560 I think people will pick up and move someplace a 0:17:51.600 --> 0:17:53.399 little bit safer, maybe even cheaper. 0:17:53.520 --> 0:17:54.280 Right give them the. 0:17:54.320 --> 0:17:57.280 Cost of la Michael Nathanson, thank you for this perspective. 0:17:57.280 --> 0:18:00.640 And you must think Rob Carolyn or Bloomberg mediaist who's 0:18:00.680 --> 0:18:03.800 been sleepless for four or five six days, perhaps this 0:18:03.880 --> 0:18:09.040 morning some quiet and containment out in Los Angeles. Michael, 0:18:09.119 --> 0:18:12.160 I have to admit on Friday, I will go home, 0:18:12.240 --> 0:18:15.600 I will commit the surveillance nap, and then I'm going 0:18:15.640 --> 0:18:19.240 to get up and watch Silo the last season, the 0:18:19.320 --> 0:18:22.679 last episode of the season for Apple. Tim Cook is 0:18:22.720 --> 0:18:26.120 so Silo happy. He's doing photo things with the actress 0:18:26.119 --> 0:18:30.160 who's leading it as well. Is Apple making inroads into 0:18:30.200 --> 0:18:32.119 the Michael Nathanson world? 0:18:33.040 --> 0:18:36.040 Tom, I love their content. There's some of the best 0:18:36.040 --> 0:18:38.240 shows on TV. I haven't watched silo, I have to admit, 0:18:38.320 --> 0:18:40.000 but there's a bunch of other things I watch. 0:18:40.600 --> 0:18:42.280 They're not making a dent. Tom. 0:18:42.480 --> 0:18:45.639 There's where you look at overall Apple share of time 0:18:45.680 --> 0:18:48.240 spent streaming. Do you want to guess what their share 0:18:48.280 --> 0:18:53.679 of streaming is? It's less right, Wow, it's I know 0:18:53.960 --> 0:18:58.920 it's one percent, and it's just it's just terrible. 0:18:59.080 --> 0:19:00.720 So we've been when we go. 0:19:00.680 --> 0:19:04.560 To La to do our visits and tours, there's no 0:19:04.560 --> 0:19:06.920 one in that town who knows what Apple's long term 0:19:06.920 --> 0:19:09.040 plan is and what they want to be when they 0:19:09.080 --> 0:19:09.399 grow up. 0:19:09.480 --> 0:19:11.320 It's kind of amazing, right, it really is. 0:19:11.520 --> 0:19:13.760 Michael. I'd love to take this in a very different direction. 0:19:13.920 --> 0:19:16.280 I mean, you're I mean, I want to talk about 0:19:16.359 --> 0:19:18.920 data centers and I want to talk about Capex from 0:19:18.920 --> 0:19:21.160 the MAGS seven and Magain, I heard some very very 0:19:21.160 --> 0:19:23.320 interesting figures over the past few days that if you 0:19:23.320 --> 0:19:25.679