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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business

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Speaker 1: Week Inside from the reporters and editors who bring you

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Speaker 1: America's most trusted business magazine, plus global business, finance and

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Speaker 1: tech news. The Bloomberg Business Week Podcast with Carol Messer

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Speaker 1: and Tim Stenebeck from Bloomberg Radio, we gotta.

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Speaker 2: Talk a bit more about Intel.

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Speaker 3: I'm looking at a two day game because we've got

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Speaker 3: a headline late Friday before the close. But you're looking

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Speaker 3: at Intel shares now up about seven percent in the

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Speaker 3: past to trading days, and so we're trying to figure

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Speaker 3: out what comes next for Intel.

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Speaker 4: Yeah.

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Speaker 5: I mean, look, we're talking about this Bloomberg exclusive on

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Speaker 5: Apollo Global Manager that's throwing it's it's hat and a

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Speaker 5: potential financial investment into the Intel ring as well. So

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Speaker 5: lots of just scotts, let's bring in Leanna Baker is

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Speaker 5: Managing editor of the Bloomberg News Deals team here in

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Speaker 5: the studio. Great to see you, and from our San

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Speaker 5: Francisco bureau, Ian King, Bloomberg News US Semiconductor and Networking

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Speaker 5: reporter Ian I want to start with you in tell

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Speaker 5: very popular all of a sudden among all these entities

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Speaker 5: let's talk about Qualcom and it's interest what you find out.

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Speaker 6: Yeah, I mean we have to sort of point out

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Speaker 6: that neither company is confirmed or said anything publicly about this,

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Speaker 6: So at this point we're relying upon our own reporting

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Speaker 6: and everybody else is reporting. Our understanding is that there

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Speaker 6: has been some conversation at some kind of level about

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Speaker 6: the possibility of acquiring Intel, and you know, to sort

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Speaker 6: of flip it back to what you guys were saying,

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Speaker 6: Intel is kind of at a historically sort of vulnerable

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Speaker 6: point in terms of obviously share price, in terms of

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Speaker 6: where its operations are. Its management believe that it's at

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Speaker 6: kind of a low point before a big upswing that

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Speaker 6: it's had to spend really heavily. Others are less sanguine

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Speaker 6: about this, are sorry, are more worried about where it

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Speaker 6: is and worried that perhaps it would be better it

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Speaker 6: would be better off in other hands.

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Speaker 3: Yeah, it's kind of fascinating to figure out what's the

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Speaker 3: right way forward, as you have reported on so well,

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Speaker 3: in that this has been long and coming. When it

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Speaker 3: comes to Intel, Leanna, I want to bring you back

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Speaker 3: into this. There's the Apollo story that you guys.

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Speaker 2: Have put out there. At Bloombery Exclusive.

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Speaker 3: What do we know about a possible deal where Apollo

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Speaker 3: makes a pretty substantial investment.

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Speaker 7: Apollo is already a partner of Intel. Remember they have

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Speaker 7: a joint venture with Intel in their factory in Ireland,

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Speaker 7: So it's not surprising that Apollo would put their hat

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Speaker 7: in the ring. That said, we don't know if Intel's

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Speaker 7: going to accept this investment. We heard it's up to

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Speaker 7: five billion. We don't have any terms. We said it's

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Speaker 7: an equity like investment. We don't know if it comes

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Speaker 7: with a board seat or what Apollo would ask for

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Speaker 7: to make this cash infusion. But it does show that

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Speaker 7: Intel's board has some tough decisions to make on which

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Speaker 7: path forward. Does it go with Qualcomm, does it go

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Speaker 7: with Apollo, Could it go with Apollo and then still

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Speaker 7: you know, go with Qualcom. One thing we know for sure, Broadcom,

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Speaker 7: which is another name in the space which analysts have tipped,

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Speaker 7: is another potential acquirir of Intel. We've reported that currently

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Speaker 7: they're not evaluating an offer.

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Speaker 2: For I'm curious about Apollo.

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Speaker 3: Is this about protecting its investment already in Intel, or

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Speaker 3: is it because they're really interested and they see something here?

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Speaker 7: Further Paulo is definitely opportunistic and they love to get

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Speaker 7: their hands in really complicated situations. They're also turnaround specialists

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Speaker 7: and they have some experience in semiconductors. Last year they

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Speaker 7: put in about nine hundred million into Western Digital, which

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Speaker 7: is another sort of struggling chip maker right now, Apollo

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Speaker 7: though it has you know, it's work cut out for

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Speaker 7: them if they do take this investment. How much influence

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Speaker 7: will they have an Intel, which has its own management team,

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Speaker 7: and Apollo might have its own interest too on making

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Speaker 7: sure their investment, you know, makes money.

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Speaker 5: Yeah, I mean, look, it's also an indication of obviously

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Speaker 5: how excited Apollo are about chip makers as well. I mean,

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Speaker 5: is there are their prospects they're going to want to

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Speaker 5: go further in other places.

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Speaker 7: For now, all we know is that they're an investor

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Speaker 7: in Western Digital, and they're an investor and joint venture

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Speaker 7: partner and Intel, and they're looking to to do more

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Speaker 7: with Intel. But we should also consider that they're an

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Speaker 7: American investor, and that's something that's really important here. We

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Speaker 7: didn't talk about the US government angle, so I'm sure

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Speaker 7: the US government would like to see some sort of

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Speaker 7: US solution to this without a foreign investor. And another

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Speaker 7: thing to mention is that any investment from Apollo or

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Speaker 7: someone similar would close a lot faster than a long

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Speaker 7: drawn out merger with a rival like Qualcott. That's something

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Speaker 7: that's going to take a long time to play out,

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Speaker 7: even if they do get to the finish line.

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Speaker 2: All right, So Ian, come on back in here.

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Speaker 3: This is something we've talked about a lot with you

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Speaker 3: about the national security concerns and why this is such

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Speaker 3: an important company, certainly to the US government. How are

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Speaker 3: you You've covered this company for so long and it's

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Speaker 3: kind of amazing to see where we are with this

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Speaker 3: company right now. How are you thinking about the different

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Speaker 3: parties that are interested about Intel's future and what happens

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Speaker 3: from here and what you are hearing internally from the company.

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Speaker 6: Yeah, I mean it's a very complicated situation. As Honor

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Speaker 6: has just alluded to. It's not just a case of

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Speaker 6: two companies looking at each other and sort of deciding

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Speaker 6: whether it makes sense for them to do this, even Intel,

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Speaker 6: there are multiple parts to Intel. Whether perhaps qualt Com

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Speaker 6: would just be interested in Intel's design efforts, which would

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Speaker 6: get it into the PC market, which would get it

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Speaker 6: into the server market. Qualcomm historically has said absolutely no

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Speaker 6: way do we want to become a manufacturing company. So

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Speaker 6: if that's still the case, then what happens to Intel's

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Speaker 6: manufacturing operations? And that's where the US government has a

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Speaker 6: massive interest in bringing back manufacturing to this country, revitalizing

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Speaker 6: manufacturing in this country. And then guess what, There's a

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Speaker 6: country called China out there which has a massive say

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Speaker 6: in this as well. China is the largest market for

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Speaker 6: so may conductors. Both Intel and Qualcomm do a huge

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Speaker 6: amount of business there. China is going to have an

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Speaker 6: absolute say when it comes to approving this kind of

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Speaker 6: a deal.

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Speaker 5: But does that mean then, in to that point that

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Speaker 5: the Apollo deal looks much simpler if you're pack Elsinger

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Speaker 5: and try to make you know a kind of a

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Speaker 5: decision or think about where to go with this as well,

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Speaker 5: does it make an Apollo move much clearer and simpler

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Speaker 5: and less of the anti trust concerns and others that

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Speaker 5: you've outlined.

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Speaker 6: Yeah, I mean it's a much much smaller deal. And

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Speaker 6: really all it essentially would be doing, if it's at

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Speaker 6: the level that we understand it is, will be to

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Speaker 6: sort of prop up the current plan. Basically, all of

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Speaker 6: these investments and Intel has been bringing in into its

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Speaker 6: factories from Apollo, from others are essentially bridge loans. Basically,

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Speaker 6: it's saying, hey, we're going to build this factory. Help

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Speaker 6: us out to build it out, and we'll pay you

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Speaker 6: back with the profits we get from it later. Intel

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Speaker 6: retains control in these kind of situations. Five billion dollars

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Speaker 6: is a lot of money, but it's not in the

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Speaker 6: chip business, right, plant cost twenty Yeah.

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Speaker 2: It goes really quickly. Right, Hey, you know, I think

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Speaker 2: it's kind of interesting.

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Speaker 3: There's another story in the Bloomberg about TSMC, Taiwan Semiconductor

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Speaker 3: and Samsung discussing building major new factories in the UAE.

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Speaker 2: This is coming from the Wall Street Journal.

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Speaker 3: So I think about this story. It's Intel specific, but

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Speaker 3: there's so much going on globally in the semi space

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Speaker 3: as other companies are kind of figuring out their path

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Speaker 3: going forward. When it comes to Intel in what is

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Speaker 3: the value beyond the national security concerns?

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Speaker 2: Is it that.

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Speaker 3: It's a maker of chips a designer of chips? Like,

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Speaker 3: where is the real value going forward?

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Speaker 2: Or both?

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Speaker 6: Absolutely?

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Speaker 4: Both?

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Speaker 6: Right, it's diminished as a franchise in PCs, but it's

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Speaker 6: still seventy five eighty five percent of the market. It's

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Speaker 6: diminished in servers, but it's still eighty percent of the market.

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Speaker 6: So those are incredible franchises with the right products. Maybe

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Speaker 6: they revitalize, maybe then ever get back to ninety nine percent,

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Speaker 6: which they've been at. But eighty percent of a market

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Speaker 6: isn't a bad position to be in if you can

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Speaker 6: do that in a profitable way. It's factories up until

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Speaker 6: not too long ago were the best in the industry. Okay,

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Speaker 6: if you can throw the capital at them, if you

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Speaker 6: can get the volume the orders, maybe it becomes a

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Speaker 6: valuable and absolutely essential asset again. So it's not dead yet, right,

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Speaker 6: I mean, we're talking about picking over the bones, but

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Speaker 6: it's not dead yet.

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Speaker 5: How much should we be thinking about other players in

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Speaker 5: this sector as well? I mean Broadcom sitting on the

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Speaker 5: sidelines for now. Is there any chance anything is going

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Speaker 5: to get exciting for Broadcom when we're thinking about this feature?

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Speaker 6: I mean, the best person to ask will be hot Time,

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Speaker 6: the CEO. He was asked out recently on his earnings

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Speaker 6: and he said, look, I'm quite happy trying to you know,

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Speaker 6: make VMware. The acquisition they made work a couple of

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Speaker 6: years before I'll be the other side of that. And

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Speaker 6: he had a big smile on his face figuratively when

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Speaker 6: he was saying this, because they were asking him, Hey,

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Speaker 6: are you interested, so he was basically saying, not right now.

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Speaker 2: Yeah, come on back in here. I am curious.

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Speaker 3: I'm sure you had a pretty busy weekend, which always

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Speaker 3: happens with the M and A activity and the M

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Speaker 3: and A world. What are you hearing from other bankers

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Speaker 3: or other bankers kind of wait a minute, we've got

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Speaker 3: to be talking to our clients like there's other things

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Speaker 3: that might pop up.

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Speaker 7: It's funny, there's two counts of bankers, it seems, around

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Speaker 7: the situation. There's either the ones working on this deal

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Speaker 7: who don't want to talk to us and aren't answering

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Speaker 7: their phones, and then there's the ones that are chasing

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Speaker 7: this trying to get hired. And then there's the ones

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Speaker 7: we're sitting on the sidelines who are saying, Okay, this

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Speaker 7: is a really you know, funky deal, Intel, I don't

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Speaker 7: know if I want to spend the time on this.

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Speaker 7: If you know, it doesn't happen. Qualcomm's other big M

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Speaker 7: and A bets never panned out. You might recall they

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Speaker 7: bought NX, They tried to buy NXP a few years

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Speaker 7: ago and that died. They're going through their own a

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Speaker 7: little bit of a transformation to M and A is

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Speaker 7: just really hard for some inductor companies. Intel tried to

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Speaker 7: buy a company called Tower, which also fell apart when

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Speaker 7: the Chinese authorities kind of left it in limbo. So

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Speaker 7: it's just a really tough space and you have to

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Speaker 7: know where to invest your time if you're an investment banker,

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Speaker 7: to see you know which bets are going to pay off,

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Speaker 7: because in chips it's been really difficult.

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Speaker 5: But it's interesting, isn't it, given that the movement we've

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Speaker 5: seen in share prices in this sector as well, This

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Speaker 5: is clearly very hot property and you kind of think

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Speaker 5: that could spur further deals down the line. Or is

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Speaker 5: it more of a case that we're looking at these

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Speaker 5: individual big names defying their positions.

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Speaker 7: Ian would know more about why Intel is a unique

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Speaker 7: situation right now. I think their earnings report in the

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Speaker 7: summer and what's been happening the past few years has

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Speaker 7: made them has made them vulnerable. As he said to

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Speaker 7: different you know, M and A overtures the other deals

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Speaker 7: in the semiconductor space have been a lot smaller and

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Speaker 7: video we've reported does acquisitions, but you know, not that large,

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Speaker 7: and they usually do still attract scrutiny from regulators. So

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Speaker 7: these companies are so big that whatever they do, even

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Speaker 7: if it's a small tuck in acquisition, it's going to

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Speaker 7: get some attention when.

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Speaker 5: It comes to the regulatory concerns here, because it's something

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Speaker 5: that comes up a lot on these conversations as well,

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Speaker 5: is that regulators in Europe, Is it the US or

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Speaker 5: is it you know, coming from side of those markets.

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Speaker 7: It's all of the above. Actually, when you announce the

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Speaker 7: je tekature. Yeah, these companies, as Ian mentioned, are global,

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Speaker 7: but definitely China the regulator their sammer. They weigh in

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Speaker 7: on these deals or sometimes they don't weigh in at

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Speaker 7: all and they're left in limbo, and that leads to

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Speaker 7: deals dying that EU obviously will have a say, and

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Speaker 7: then we have US market and then any country where

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Speaker 7: these companies do business we'll have a say.

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Speaker 3: Hey, you know one thing I wanted to ask you Ian,

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Speaker 3: is I think about you know, AMD wasn't always as

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Speaker 3: big a threat to Intel, right, Intel was really the

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Speaker 3: big player and then I think about and video was

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Speaker 3: not always a household name. Uh, And wasn't that you

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Speaker 3: know when we bring up the semi space, wasn't the

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Speaker 3: company we always kind of is a go to companies

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Speaker 3: can reboot companies, consumer company can shift strategies, that can

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Speaker 3: do acquisitions. So I mean so can Intel likewise, Right

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Speaker 3: there is another chapter.

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Speaker 6: That's that's what the management is saying. That's what the

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Speaker 6: management believe up until now that that you know they're maintaining. Look, hey,

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Speaker 6: it's tough. It's tougher than we thought. Maybe we don't

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Speaker 6: have the right AI chips out there right now, but

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Speaker 6: you know, come on, we have so much inherent value.

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Speaker 6: We can we can do this. We can get back

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Speaker 6: to what we were, is their pitch. But the flip

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Speaker 6: side of that is this is a brutal business. This

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Speaker 6: is a really really difficult business, particular manufacturing. You build

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Speaker 6: these plants, you don't fill them. They drag you down.

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Speaker 6: And that is a situation that Intel is facing, and

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Speaker 6: that is why there's so much churn around. It is like,

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Speaker 6: is this the opportunity of a lifetime, Is it ever

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Speaker 6: going to be this cheap again? Or maybe this is

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Speaker 6: Intel on a downward spiral, and there are lots and

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Speaker 6: lots of opinions. And that explains what Leander just said, Well,

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Speaker 6: how the bankers are viewing it, how Wall Street is

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Speaker 6: viewing it. They can't nobody can make their mind up

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Speaker 6: right now. All they know is the road that Intel

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Speaker 6: is on is a tough one right now. A lot

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Speaker 6: has to go right.

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Speaker 5: I mean, to that point, does that tell us that

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Speaker 5: the AWS deal wasn't as important potentially to investors as

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Speaker 5: we thought it was.

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Speaker 6: It was a brief shot in the arm. But you know,

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Speaker 6: we've seen this happen since Pat Gelsinger came back to

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Speaker 6: the company a few short years ago. We have these

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Speaker 6: brief moments of hope and then it becomes clear because

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Speaker 6: it is clear because it's such a tough business that yes,

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Speaker 6: it's a good sign, but the payoff is down the road,

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Speaker 6: and the payoff isn't one hundred percent certain at this point.

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Speaker 6: And that's I think this constant tension that we're seeing,

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Speaker 6: which is maybe they are doing the right thing, but

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Speaker 6: good grief, so many things have to go right. And

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Speaker 6: on the flip side, if you want to do a

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Speaker 6: deal for Intel, so many things have to go right.

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Speaker 6: There regulatory approval, financing everything that there's so much at

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Speaker 6: stake here. It is such a complicated situation, so difficult

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Speaker 6: for management and difficult for bankers, and difficult for regulators

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Speaker 6: who are taking a look at this.

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Speaker 2: Right we talked about checking boxes.

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Speaker 3: There's a lot that has to be checked in order

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Speaker 3: for this to something to happen, whether it's a deal

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Speaker 3: or some kind of investment. Having said that, I just

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Speaker 3: want to ask both of you, So, Leanna, what's is

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Speaker 3: there a time frame you're thinking about? You know, these

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Speaker 3: are stories that according to sources. I always feel like

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Speaker 3: with these things they may or may not happen. So

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Speaker 3: what are you thinking in terms of a time frame.

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Speaker 7: There's lots to consider about what's next. But I will

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Speaker 7: say that time is the enemy of deals, So the

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Speaker 7: longer things take you or less likely they are to

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Speaker 7: get announced. But that said, there's still so much more

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Speaker 7: to report on. So we know Qualcom's made a soft approach,

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Speaker 7: but there's no official offer, So there's still maybe in

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Speaker 7: the next week or so, we'll find out more about

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Speaker 7: how receptive Intel is, what was actually offered and similar

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Speaker 7: with the Apollo offer, and are there other names on

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Speaker 7: the sidelines? Intel also has a partnership with Brookfield and

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Speaker 7: other private equity infrastructure player. We haven't heard that they're

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Speaker 7: around this, but certainly now that the Apollo name is

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Speaker 7: out there, will other names come out of the woodwork

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Speaker 7: real quickly.

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Speaker 3: And so you fifteen seconds in terms of a time

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Speaker 3: frame you're thinking about for Intel, Yeah.

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Speaker 6: I mean some of these deals need to minifese quickly,

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Speaker 6: as Leanna just said, But Intel in terms of time

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Speaker 6: frame can't afford too many more, if any of the

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Speaker 6: kind of disastrous innings reports that we just saw, that's

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Speaker 6: going to be a hard stop for them.

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Speaker 2: All right, so appreciate it.

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Speaker 3: A very big company story and certainly a big story

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Speaker 3: on the Bloomberg Today in king US semiconductor and networking

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Speaker 3: reporter at Bloomberg News out there in San Francisco, Leanna

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Speaker 3: Baker right here in studio.

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Speaker 2: She is managing editor of the Deals team, and you

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Speaker 2: can read more at Bloomberg dot com.

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Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us

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Speaker 1: live weekday afternoons from two to five pm Eastern. Listen

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Speaker 1: on Applecarplay and and Broyd Auto with a Bloomberg Business app,

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Speaker 1: or watch us live on YouTube.

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Speaker 3: Well, we highlight and on a lot about everybody moving

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Speaker 3: down south.

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Speaker 2: I've had a lot of family members move down south.

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Speaker 2: It is it's nice and warm and toasty.

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Speaker 3: But in particular, we see a lot of people going

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Speaker 3: to South Florida, financial types and more. And as a

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Speaker 3: result of that move, how that has led to soaring

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Speaker 3: prices of homes, especially among the super rich, which brings

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Speaker 3: us to a new record perhaps for the most expensive

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Speaker 3: residents in the Miami area. Let's get to it with

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Speaker 3: Danny Hertzberg Wilt at the jills Zer Group. It's a

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Speaker 3: team within the Coldwell Banker community. It has been ranked

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Speaker 3: by Real Trends in the Wall Street Journal as the

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Speaker 3: number one real estate team in the nation, Florida and

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Speaker 3: Miami for several years.

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Speaker 2: Including twenty twenty four.

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Speaker 3: Danny joining us from South Florida along with Bloomberg News

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Speaker 3: Markets correspondent Abigail Doolittle, who keeps an eye on the

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Speaker 3: real estate world.

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Speaker 2: She is joining us here in studio.

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Speaker 3: Hey, Danny, my understanding is you guys might have some

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Speaker 3: news for us about a big closing.

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Speaker 2: What can you tell us.

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Speaker 4: We do we have some very exciting news.

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Speaker 8: First, Thank you so much, Carol, Steven, Abigail, and Bloomberg.

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Speaker 4: For having me today.

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Speaker 8: We have the record sale closing today and it's the

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Speaker 8: highest sale in the history of.

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Speaker 4: Miami Dade County.

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Speaker 9: So Danny, something to ask about this sale. Not so

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Speaker 9: long ago, I can remember Jeff Bezos making a big purchase.

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Speaker 9: I feel like it was close to one hundred million,

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Speaker 9: and then Ken Griffin was a more than one hundred million.

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Speaker 9: So you're saying that this sale is more that it

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Speaker 9: tops those well known billionaires.

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Speaker 8: So there's only been one sale in the history of

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Speaker 8: Miami Dade County that broke one hundred million, which our

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Speaker 8: team worked on. I was very proud to see might

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Speaker 8: Mom break that record at one hundred and six million,

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Speaker 8: and this surpasses that record, So this will be the

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Speaker 8: all time highest sale. It's a very significant market update.

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Speaker 8: It tells you a lot about the story of Miami

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Speaker 8: and the growth of the city and the number of

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Speaker 8: billionaires and high net worth individuals moving to Miami and

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Speaker 8: all the big companies that have been coming down here.

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Speaker 9: Well, let's take into that just a little bit more, Danny,

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Speaker 9: because I know that prior to this pandemic gold rush

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Speaker 9: for real estate, the biggest sale in Miami if I

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Speaker 9: have this correctly, I think that forty seven million and

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Speaker 9: twenty fifteen, and then there was another forty seven million

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Speaker 9: sale in twenty twelve. Now forty seven million seems like nothing.

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Speaker 2: Yeah, yeah, it seems.

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Speaker 9: Like packaging perspective context. So has the table really been

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Speaker 9: reset here?

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Speaker 4: Absolutely?

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Speaker 8: So that forty seven million record back in twenty twelve,

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Speaker 8: which we participated and was actually on Indian Creek. So

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Speaker 8: it's very interesting that the story started there on Indian Creek,

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Speaker 8: and then the markets spread throughout the city from Star

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Speaker 8: Island to Gables of States North and South through Golden Beach,

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Speaker 8: and then for many years, almost a decade, you didn't

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Speaker 8: have a sale over fifty and since twenty twenty one,

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Speaker 8: we now have had eight sales over fifty million, in

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Speaker 8: sales over one hundred million, which is significant, right, and

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Speaker 8: the runner up sales are seventy million, seventy five million,

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Speaker 8: ninety three million, so very significant numbers for Miami, which

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Speaker 8: puts us on par with La New York on Beach

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Speaker 8: and all the major global markets.

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Speaker 3: Danny step back, lay out this deal that you guys closed,

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Speaker 3: What is this deal? Who did it tell us about

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Speaker 3: because I believe it involved a couple of properties and

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Speaker 3: what the amount was.

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Speaker 8: So this was a significant assemblage on Laguarse Island. The

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Speaker 8: sale is just over one hundred and twenty two million total.

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Speaker 8: It was an assemblage put together by doctor Pierce over

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Speaker 8: many years. It was four properties put together one by

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Speaker 8: one and then assembled together. It took several years to

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Speaker 8: sell this property. It was a very complicated transaction with

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Speaker 8: many zoning elements, and we showed it some of the

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Speaker 8: most high networth individuals in the world. It's the true

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Speaker 8: trophy property of the city with downtown views and we

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Speaker 8: have a growing downtown and you know, it's exciting the market.

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Speaker 4: We're having a lot of buzz we had.

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Speaker 8: What's interesting about the sale is not just breaking one

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Speaker 8: hundred million, but to have multiple offers and backup buyers

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Speaker 8: that kind of interest is just very telling the market

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Speaker 8: we're in.

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Speaker 5: Tell us a bit about the profile of who's getting

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Speaker 5: into this market. Who's got the big and deep pockets

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Speaker 5: to be able to look at properties like this. Is

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Speaker 5: it American buyers? Are you getting overseas buyers in there

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Speaker 5: as well?

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Speaker 4: It's a great question.

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Speaker 8: So in general, these type of properties which we focus

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Speaker 8: on the overwhelming majority of buyers have been domestic, moving

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Speaker 8: from New York, Chicago, California, New Jersey, high tax states,

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Speaker 8: really moving to Florida with no state income tax, and

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Speaker 8: that's been the trend. A very small percentage have been

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Speaker 8: in international buyers. But when I look through the list

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Speaker 8: of the largest, most significant purchases, the record breaking sales,

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Speaker 8: they've really been domestic buyers.

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Speaker 9: Okay, so Dana, you have all of these people who

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Speaker 9: wanted to buy this property for more than one hundred

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Speaker 9: and twenty two million dollars. And I should mention it's

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Speaker 9: not for the properties, it's for the land. So these

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Speaker 9: people buy these properties is knocked down the homes for

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Speaker 9: the land, and then rebuild.

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Speaker 2: This is a teardown. Yeah, this is a teardown.

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Speaker 9: This is a teardown, one hundred and twenty two million

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Speaker 9: dollar teardown.

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Speaker 2: But where do all.

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Speaker 9: Those other buyers go? Surely your pipeline is stuffed? What

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Speaker 9: can you tell us about the next big sale?

441
00:20:15,760 --> 00:20:18,480
Speaker 8: So we've been working on it. It's complicated because this

442
00:20:18,520 --> 00:20:21,680
Speaker 8: is the true trophy property. So finding the next best

443
00:20:21,720 --> 00:20:24,560
Speaker 8: alternative for people has been challenging. We've been making calls

444
00:20:24,640 --> 00:20:27,840
Speaker 8: knocking on doors, calling in, you know, trying to convince

445
00:20:27,880 --> 00:20:31,160
Speaker 8: people to move. And although this is the record, I'm

446
00:20:31,200 --> 00:20:33,520
Speaker 8: confident by the end of the year, early next year,

447
00:20:33,800 --> 00:20:36,159
Speaker 8: we're going to see other sales even breaking this record.

448
00:20:36,240 --> 00:20:38,880
Speaker 8: It's not that there's not demand from the buyers. It's

449
00:20:38,880 --> 00:20:41,200
Speaker 8: that we have few sellers at this point that are

450
00:20:41,200 --> 00:20:42,680
Speaker 8: willing to move for these type of.

451
00:20:42,600 --> 00:20:45,040
Speaker 4: Properties and the most sought after community.

452
00:20:45,240 --> 00:20:48,400
Speaker 8: So you know, this was a land transaction, but many

453
00:20:48,400 --> 00:20:50,560
Speaker 8: of the people looking at it wanted to finished home

454
00:20:50,600 --> 00:20:53,439
Speaker 8: on a large parcel and that type of inventory just

455
00:20:53,480 --> 00:20:56,119
Speaker 8: doesn't exist, so people are having to build it themselves.

456
00:20:56,440 --> 00:20:58,840
Speaker 8: And land price is now for the best parcels of land,

457
00:20:58,840 --> 00:21:02,080
Speaker 8: they're now one thousand foot for a land per foot basis.

458
00:21:02,640 --> 00:21:05,080
Speaker 8: So we're getting creative. We're trying to put neighbors together

459
00:21:05,160 --> 00:21:09,119
Speaker 8: in different communities. We're calling people. Maybe people are focused

460
00:21:09,160 --> 00:21:11,679
Speaker 8: on at home. Now we're pivoting to a penthouse. So

461
00:21:11,720 --> 00:21:13,919
Speaker 8: we have to get creative. But we're used to working

462
00:21:13,960 --> 00:21:17,200
Speaker 8: in a tight inventory environment. Going back to this, really

463
00:21:17,200 --> 00:21:21,120
Speaker 8: starting twenty twenty, if we go pre pandemic, the overwhelming

464
00:21:21,119 --> 00:21:23,760
Speaker 8: majority of buyers looking at this type of property, bidding

465
00:21:23,760 --> 00:21:27,160
Speaker 8: on this property would have been international buyers, so it's

466
00:21:27,240 --> 00:21:30,760
Speaker 8: completely switched from majority international to majority domestic in a

467
00:21:30,840 --> 00:21:31,880
Speaker 8: very short period of time.

468
00:21:32,320 --> 00:21:34,719
Speaker 5: And what sort of incentives are you having to put

469
00:21:34,800 --> 00:21:36,880
Speaker 5: up the incentives to get these neighbors to think about

470
00:21:36,880 --> 00:21:39,959
Speaker 5: putting their properties on the market, because I mean, if

471
00:21:39,960 --> 00:21:42,320
Speaker 5: you have all the buyers, how are you incentivizing them

472
00:21:42,359 --> 00:21:43,320
Speaker 5: to think about selling.

473
00:21:44,480 --> 00:21:45,800
Speaker 4: So that's been really challenging.

474
00:21:45,880 --> 00:21:48,520
Speaker 8: So, you know, one thing that's been a great care

475
00:21:48,520 --> 00:21:52,560
Speaker 8: at has been providing post occupancy agreements, particularly when people.

476
00:21:52,359 --> 00:21:53,840
Speaker 4: Are building or they're going to renovate.

477
00:21:54,200 --> 00:21:56,200
Speaker 8: So we work it into the deal where the seller

478
00:21:56,240 --> 00:21:58,840
Speaker 8: can stay for six months, sometimes even a year rent

479
00:21:58,840 --> 00:22:01,440
Speaker 8: free in the property. Then they have the proceeds from

480
00:22:01,440 --> 00:22:03,840
Speaker 8: the sale to find their next you know, property to

481
00:22:03,880 --> 00:22:07,159
Speaker 8: move to. We've had all sorts of sweeeners with you know,

482
00:22:07,240 --> 00:22:11,920
Speaker 8: quick closings, long closings, all different sorts of accommodations, even

483
00:22:11,960 --> 00:22:15,640
Speaker 8: people making arrangements, and many times we've had sellers say

484
00:22:15,720 --> 00:22:17,960
Speaker 8: we'll take this deal, but only if you find me

485
00:22:18,000 --> 00:22:20,040
Speaker 8: a property to go to. So it's contingent on me

486
00:22:20,200 --> 00:22:22,960
Speaker 8: finding a property to move to. And that's really only

487
00:22:22,960 --> 00:22:25,400
Speaker 8: happening in the highest end of the market. That's where

488
00:22:25,400 --> 00:22:27,680
Speaker 8: the demand is the strongest in the Miami market, the

489
00:22:27,800 --> 00:22:30,840
Speaker 8: very very ultra high end, because you have few sellers

490
00:22:30,840 --> 00:22:32,919
Speaker 8: and you have a pretty significant pool of buyers, so

491
00:22:33,480 --> 00:22:35,639
Speaker 8: the post occupancy is the lead. But really a lot

492
00:22:35,680 --> 00:22:36,879
Speaker 8: of it comes down to the number.

493
00:22:37,359 --> 00:22:37,840
Speaker 4: Is it right?

494
00:22:37,920 --> 00:22:38,160
Speaker 2: Many?

495
00:22:38,359 --> 00:22:41,640
Speaker 4: Well, go ahead, Oh no, I was just gonna say.

496
00:22:41,760 --> 00:22:44,800
Speaker 8: You know, usually when we ask or would you consider selling,

497
00:22:44,880 --> 00:22:47,479
Speaker 8: and the answers typically know for many of these you know,

498
00:22:47,560 --> 00:22:51,159
Speaker 8: trophy high net worth individuals and awn these type of properties.

499
00:22:51,680 --> 00:22:53,280
Speaker 8: But when we frame it as you know, is there

500
00:22:53,320 --> 00:22:56,040
Speaker 8: a number that you consider selling at with certain terms,

501
00:22:56,119 --> 00:22:59,639
Speaker 8: then it opens the conversation and sometimes people don't realize,

502
00:23:00,040 --> 00:23:03,479
Speaker 8: you know, there's a real many people. Not everybody, but

503
00:23:03,520 --> 00:23:05,640
Speaker 8: most people have a number that if it's big enough,

504
00:23:05,680 --> 00:23:06,320
Speaker 8: they may move.

505
00:23:06,400 --> 00:23:08,760
Speaker 4: They may you know, buy the property they were thinking.

506
00:23:08,560 --> 00:23:11,840
Speaker 8: About, or make different arrangements, and we try to create

507
00:23:11,920 --> 00:23:13,760
Speaker 8: a deal structure that works for everybody.

508
00:23:14,000 --> 00:23:16,240
Speaker 9: And then in thirty seconds, Danny, I happen to know

509
00:23:16,320 --> 00:23:19,480
Speaker 9: that there's one property in particular that you've called remarkable

510
00:23:19,680 --> 00:23:21,879
Speaker 9: with a single buyer and a single seller, that you

511
00:23:21,960 --> 00:23:24,080
Speaker 9: think could come to market by the end of the

512
00:23:24,160 --> 00:23:26,679
Speaker 9: year early next year. Above this can you give us

513
00:23:26,680 --> 00:23:27,760
Speaker 9: any more details on that?

514
00:23:27,880 --> 00:23:31,400
Speaker 2: And more like twenty seconds. Unfortunately, so my.

515
00:23:31,359 --> 00:23:32,200
Speaker 4: Lips are sealed.

516
00:23:32,200 --> 00:23:37,159
Speaker 8: But there is a potential transaction in the works. A

517
00:23:37,240 --> 00:23:39,000
Speaker 8: buyer wants a property and.

518
00:23:38,960 --> 00:23:40,640
Speaker 4: We'll see if the seller will sell, but it will

519
00:23:40,640 --> 00:23:41,560
Speaker 4: break this record.

520
00:23:41,920 --> 00:23:44,640
Speaker 8: And there are other potential buyers out there looking right

521
00:23:44,640 --> 00:23:46,880
Speaker 8: now in our market stay that are looking at prices

522
00:23:46,920 --> 00:23:48,240
Speaker 8: above this record sale.

523
00:23:48,440 --> 00:23:51,680
Speaker 2: Danny Herzberg Wheelter at the Jills Zeer Group.

524
00:23:53,080 --> 00:23:56,920
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live

525
00:23:57,040 --> 00:23:59,639
Speaker 1: each weekday. He's starting at two pm Eastern. I'll Apple

526
00:23:59,680 --> 00:24:02,919
Speaker 1: Car and Android Auto with the Bloomberg Business and you

527
00:24:02,960 --> 00:24:06,240
Speaker 1: can also listen live on Amazon Alexa from our flagship

528
00:24:06,280 --> 00:24:10,359
Speaker 1: New York station just say Alexa playing Bloomberg. Eleven thirty.

529
00:24:12,200 --> 00:24:15,639
Speaker 3: Banks docs have rallied nearly three percent since last Wednesday

530
00:24:15,640 --> 00:24:18,520
Speaker 3: following the Fed's half a point rate cut, since dropping

531
00:24:18,560 --> 00:24:21,240
Speaker 3: back more than one percent. Back with us, though, to

532
00:24:21,280 --> 00:24:23,560
Speaker 3: talk about what's going on when it comes to rate

533
00:24:23,640 --> 00:24:27,040
Speaker 3: cuts and the impact on the banking community, is once

534
00:24:27,080 --> 00:24:29,680
Speaker 3: again welcome to have with us. Frank Sorrentino, He's chairman

535
00:24:29,720 --> 00:24:31,800
Speaker 3: and CEO at Connect One Bank Corp. It is the

536
00:24:31,800 --> 00:24:34,719
Speaker 3: publicly held New Jersey based community bank. They've got roughly

537
00:24:34,920 --> 00:24:37,240
Speaker 3: a nine hundred and sixty two million dollar market cap.

538
00:24:37,600 --> 00:24:39,280
Speaker 2: Since we talked, connect One.

539
00:24:39,240 --> 00:24:42,080
Speaker 3: Expanded its reach into Long Island thanks to a merger

540
00:24:42,080 --> 00:24:45,040
Speaker 3: with the First of Long Island Corporation. As for shares

541
00:24:45,040 --> 00:24:47,480
Speaker 3: of connect One overall, they're up nearly ten.

542
00:24:47,320 --> 00:24:48,000
Speaker 2: Percent year to date.

543
00:24:48,040 --> 00:24:50,840
Speaker 3: They've rallied about forty five percent since mid June. Frank,

544
00:24:51,200 --> 00:24:54,000
Speaker 3: so great to have you back with us here on

545
00:24:54,040 --> 00:24:55,000
Speaker 3: Bloomberg Business Week.

546
00:24:55,000 --> 00:24:58,720
Speaker 10: How are you, Thank you, Carol. We're doing quite well

547
00:24:58,720 --> 00:25:00,560
Speaker 10: and thank you for having me back on the program.

548
00:25:00,640 --> 00:25:01,760
Speaker 10: You bet you great times.

549
00:25:01,880 --> 00:25:04,320
Speaker 2: You've been busy, you've been busy. Tell us about this deal,

550
00:25:04,400 --> 00:25:05,000
Speaker 2: this tie up.

551
00:25:05,040 --> 00:25:07,440
Speaker 3: You didn't actually give us a clue, but you were

552
00:25:07,480 --> 00:25:09,439
Speaker 3: spending a fair amount of time in Long Island.

553
00:25:09,480 --> 00:25:12,640
Speaker 10: But go ahead. Oh well, we've been working on Long

554
00:25:12,680 --> 00:25:15,600
Speaker 10: Island for the last five years and this is a

555
00:25:15,800 --> 00:25:19,720
Speaker 10: really great market adjacency with a company that has a

556
00:25:19,800 --> 00:25:24,320
Speaker 10: very similar culture and an incredibly attractive client base. So

557
00:25:24,400 --> 00:25:28,400
Speaker 10: we're really excited to merge together with these folks. It's

558
00:25:28,440 --> 00:25:31,679
Speaker 10: a great team of people and we're looking forward to

559
00:25:32,320 --> 00:25:35,400
Speaker 10: giving that you know, First of Long Island as well

560
00:25:35,400 --> 00:25:38,960
Speaker 10: as all of their clients a great experience on Long

561
00:25:39,000 --> 00:25:41,760
Speaker 10: Island with some more capabilities, some more products, and some

562
00:25:41,760 --> 00:25:42,480
Speaker 10: more services.

563
00:25:42,600 --> 00:25:44,240
Speaker 5: Hey, Frank, I'm sure the people of Long Island to

564
00:25:44,240 --> 00:25:46,120
Speaker 5: be thrilled to hear you describe them as being incredibly

565
00:25:46,119 --> 00:25:48,440
Speaker 5: attractive as well, So we'll take off for them too.

566
00:25:48,480 --> 00:25:50,080
Speaker 5: But look are you Are you looking at any other

567
00:25:50,080 --> 00:25:53,160
Speaker 5: incredibly attractive places for perhaps and more acquisitions.

568
00:25:53,800 --> 00:25:57,200
Speaker 10: Well, I think we've always said that we're opportunistic as

569
00:25:57,240 --> 00:25:59,840
Speaker 10: it relates to M and A that you know, it's

570
00:25:59,840 --> 00:26:02,679
Speaker 10: been five years since the last transaction that we've done,

571
00:26:03,160 --> 00:26:06,240
Speaker 10: and I think you know, our organic growth story is

572
00:26:06,280 --> 00:26:09,200
Speaker 10: also something to talk about. You know, we've grown quite

573
00:26:09,240 --> 00:26:12,439
Speaker 10: a bit organically, and when there are good opportunities in

574
00:26:12,760 --> 00:26:16,960
Speaker 10: sound and really interesting markets like Long Island, and there's

575
00:26:17,000 --> 00:26:20,199
Speaker 10: the opportunity to do something with a partner that we

576
00:26:20,240 --> 00:26:23,879
Speaker 10: feel makes sense, we will seize that opportunity. So, you know,

577
00:26:23,960 --> 00:26:26,359
Speaker 10: our growth has been a combination of both organic and

578
00:26:26,560 --> 00:26:26,800
Speaker 10: M and A.

579
00:26:27,920 --> 00:26:29,480
Speaker 5: Let's take a step back and look at the big

580
00:26:29,520 --> 00:26:32,119
Speaker 5: picture here for a minute about where the kind of

581
00:26:32,160 --> 00:26:34,960
Speaker 5: broader situation is. After we've seen the FED cutting rates

582
00:26:35,480 --> 00:26:38,679
Speaker 5: last week as well how much do you feel like

583
00:26:38,800 --> 00:26:42,080
Speaker 5: there is a clear path ahead for what happens next,

584
00:26:42,200 --> 00:26:43,960
Speaker 5: and how are you thinking about it in terms of

585
00:26:44,000 --> 00:26:46,000
Speaker 5: your business on the future race environment.

586
00:26:47,400 --> 00:26:49,480
Speaker 10: Well, I think the FED has made it very clear

587
00:26:49,600 --> 00:26:51,960
Speaker 10: that they have a series of targets ahead of them

588
00:26:52,000 --> 00:26:55,520
Speaker 10: that they want to achieve. Whether they achieve them in

589
00:26:55,560 --> 00:26:58,399
Speaker 10: a shorter time frame or slightly longer time frame, I

590
00:26:58,440 --> 00:27:01,960
Speaker 10: don't really think matters all that much. So whether the

591
00:27:02,000 --> 00:27:04,760
Speaker 10: next cut is twenty five or fifty, or whether they

592
00:27:04,760 --> 00:27:07,280
Speaker 10: skip one, or you know, whatever they do. But the

593
00:27:07,880 --> 00:27:10,520
Speaker 10: fact remains they're clearly on a track to get to

594
00:27:10,720 --> 00:27:14,439
Speaker 10: lower rates, probably somewhat some another one hundred or one

595
00:27:14,480 --> 00:27:17,880
Speaker 10: hundred and twenty five basis points lower probably by year end,

596
00:27:18,119 --> 00:27:23,199
Speaker 10: and that they have a definite target in mind for

597
00:27:23,280 --> 00:27:25,560
Speaker 10: where they want the economy to go based on the

598
00:27:25,640 --> 00:27:28,720
Speaker 10: data that they see today. If that data changes, they

599
00:27:28,800 --> 00:27:30,000
Speaker 10: may change those targets.

600
00:27:30,200 --> 00:27:32,399
Speaker 3: How do you feel about the economy. You've been on

601
00:27:32,480 --> 00:27:36,000
Speaker 3: with us a lot over the last year. You've often

602
00:27:36,440 --> 00:27:39,000
Speaker 3: you know, I repeat myself, but when people were talking

603
00:27:39,560 --> 00:27:44,040
Speaker 3: kind of dour about the economic outlook, talking recession, you

604
00:27:44,119 --> 00:27:47,320
Speaker 3: were talking about robust was the word you often used

605
00:27:47,880 --> 00:27:50,159
Speaker 3: when it comes to what's going on in the US economy.

606
00:27:50,240 --> 00:27:52,600
Speaker 3: Tell us about what you are seeing and does it

607
00:27:52,640 --> 00:27:54,800
Speaker 3: maybe mean the FED doesn't need to go one hundred

608
00:27:54,800 --> 00:27:58,680
Speaker 3: and twenty five basis points because things are going really well.

609
00:27:58,800 --> 00:28:02,200
Speaker 10: Look things. I think we are still in a robust economy,

610
00:28:02,440 --> 00:28:04,879
Speaker 10: and I think the FED has gotten it right to

611
00:28:05,040 --> 00:28:09,159
Speaker 10: lead us through to a soft landing. They've you know,

612
00:28:09,200 --> 00:28:11,240
Speaker 10: this was a mission, and it was a mission that

613
00:28:11,320 --> 00:28:13,760
Speaker 10: many people had in doubt that they could ever achieve.

614
00:28:13,840 --> 00:28:17,439
Speaker 10: But yet here we are. The economy is doing well.

615
00:28:17,800 --> 00:28:20,760
Speaker 10: Business formations are at all time high, no matter how

616
00:28:20,800 --> 00:28:23,120
Speaker 10: you look at that data, and I think that boats

617
00:28:23,200 --> 00:28:27,760
Speaker 10: very very well. Home construction is going gangbusters.

618
00:28:27,920 --> 00:28:29,280
Speaker 2: And that's that's your work.

619
00:28:29,560 --> 00:28:31,800
Speaker 3: You play into residential, right, and you play into the

620
00:28:31,880 --> 00:28:33,359
Speaker 3: visit we talk about it.

621
00:28:33,400 --> 00:28:35,240
Speaker 2: Is it still going gangbusters?

622
00:28:35,800 --> 00:28:36,200
Speaker 1: It is?

623
00:28:36,480 --> 00:28:40,440
Speaker 10: You know, well, again we're talking about the market areas

624
00:28:40,440 --> 00:28:42,760
Speaker 10: that connect one bank serves, right. So the New York

625
00:28:42,800 --> 00:28:46,200
Speaker 10: metro market is very constrained as it relates to housing.

626
00:28:46,240 --> 00:28:49,440
Speaker 10: And so every construction project that we're involved with, when

627
00:28:49,440 --> 00:28:53,760
Speaker 10: it's completed, whether it's homes, condos, town homes, they are sold,

628
00:28:54,120 --> 00:28:57,320
Speaker 10: whether it's apartments they are being rented. And generally at

629
00:28:57,400 --> 00:29:00,640
Speaker 10: higher than pro forma numbers. So that bodes well for

630
00:29:00,680 --> 00:29:03,080
Speaker 10: the economy. And keep in mind, you know, I've always

631
00:29:03,080 --> 00:29:05,280
Speaker 10: been a big proponent of home building, whether it's for

632
00:29:05,360 --> 00:29:08,320
Speaker 10: apartments or for people to own houses. When people move

633
00:29:08,360 --> 00:29:11,680
Speaker 10: in someplace, they buy stuff, right, they buy a lot

634
00:29:11,720 --> 00:29:14,040
Speaker 10: of stuff. It is one of the greatest generators for,

635
00:29:14,800 --> 00:29:17,720
Speaker 10: you know, in the economy that exists. And so when

636
00:29:17,760 --> 00:29:21,080
Speaker 10: you see you know, home building going at a at

637
00:29:21,120 --> 00:29:24,120
Speaker 10: a rapid pace, and you see people buying homes as

638
00:29:24,160 --> 00:29:26,240
Speaker 10: fast as they can get them, they are bidding wars

639
00:29:26,280 --> 00:29:29,840
Speaker 10: going on for existing home product day, there's just not enough.

640
00:29:29,880 --> 00:29:31,840
Speaker 10: You speak to any realtor, they will tell you there's

641
00:29:31,880 --> 00:29:34,840
Speaker 10: just not enough product on the marketplace. That tells me

642
00:29:34,880 --> 00:29:37,840
Speaker 10: things are pretty good. People have jobs, people have the

643
00:29:37,920 --> 00:29:42,000
Speaker 10: income to support, you know, their lifestyles, and those apartments

644
00:29:42,000 --> 00:29:45,480
Speaker 10: and those homes. So again, the reason I say robust

645
00:29:45,560 --> 00:29:49,720
Speaker 10: is because I feel people have great jobs and are

646
00:29:49,760 --> 00:29:52,680
Speaker 10: continuing to spend, and that's what our economy is based on.

647
00:29:53,120 --> 00:29:55,720
Speaker 5: We are seeing a very slight loosening happening in the

648
00:29:55,760 --> 00:29:57,840
Speaker 5: labor market now, though, and I wonder how you're thinking

649
00:29:57,840 --> 00:30:00,400
Speaker 5: about that in six months or a year's time, and

650
00:30:00,440 --> 00:30:03,200
Speaker 5: as you'rerationing all these loans, these people right there enthusiastically

651
00:30:03,280 --> 00:30:07,520
Speaker 5: buying homes in the area as well. How are you concerned?

652
00:30:07,920 --> 00:30:10,680
Speaker 5: How are you testing with these these new borrowers also

653
00:30:10,760 --> 00:30:12,600
Speaker 5: to see how much they would be able to withstand

654
00:30:12,600 --> 00:30:14,400
Speaker 5: should the labor market take a bigger downturn.

655
00:30:15,400 --> 00:30:18,720
Speaker 10: Yeah, I don't see the labor market taking a big downturn.

656
00:30:18,840 --> 00:30:20,960
Speaker 10: You know, we have to keep things in relative perspective.

657
00:30:21,120 --> 00:30:23,880
Speaker 10: Right when you think about the labor market with a

658
00:30:23,920 --> 00:30:26,920
Speaker 10: three and a half percent on employment rate five years

659
00:30:26,960 --> 00:30:28,800
Speaker 10: ago or seven years ago, you would have told me

660
00:30:28,840 --> 00:30:33,480
Speaker 10: that's impossible. We can't get there. The neutral rate or

661
00:30:33,520 --> 00:30:35,680
Speaker 10: the you know, the stable rate was four and a

662
00:30:35,720 --> 00:30:38,840
Speaker 10: half or five percent. So I think we're coming off

663
00:30:39,080 --> 00:30:43,320
Speaker 10: a very incredibly strong economy and maybe it's you know,

664
00:30:43,360 --> 00:30:46,960
Speaker 10: maybe it's slowing a bit, but it's not faltering. Companies

665
00:30:46,960 --> 00:30:50,800
Speaker 10: are still complaining that they can't find or source really

666
00:30:50,840 --> 00:30:54,000
Speaker 10: good talent today, and so the opportunities are still there

667
00:30:54,840 --> 00:30:58,239
Speaker 10: for folks and people who are in the you know,

668
00:30:58,480 --> 00:31:01,400
Speaker 10: places in the economy where there's need for certain types

669
00:31:01,400 --> 00:31:04,240
Speaker 10: of labor, certain types of services. They just can't find

670
00:31:04,320 --> 00:31:07,560
Speaker 10: enough folks to fill those positions. So, you know, and

671
00:31:07,600 --> 00:31:10,960
Speaker 10: I'm not sure that four percent the unemployment is something

672
00:31:11,000 --> 00:31:12,080
Speaker 10: where we should be worried.

673
00:31:12,560 --> 00:31:13,880
Speaker 3: Well, you know, and one of the things we just

674
00:31:13,880 --> 00:31:18,000
Speaker 3: had a discussion with our connorson he found out a

675
00:31:18,000 --> 00:31:20,600
Speaker 3: financial advisory firm, but he wrote a Bloomberg opinion column

676
00:31:20,600 --> 00:31:22,640
Speaker 3: that basically saying Frank that we're gonna have to kind

677
00:31:22,680 --> 00:31:26,560
Speaker 3: of make the decision between either having lower mortgage rates,

678
00:31:26,560 --> 00:31:30,600
Speaker 3: which some would like in a big way, or we're

679
00:31:30,640 --> 00:31:32,640
Speaker 3: gonna let We're gonna have to have let the FED

680
00:31:32,760 --> 00:31:38,400
Speaker 3: kind of, you know, maybe allow for a stable labor market,

681
00:31:38,400 --> 00:31:40,600
Speaker 3: like we just kind of can't have both. Like if

682
00:31:40,640 --> 00:31:43,760
Speaker 3: you see the FED cutting rates even more, which would

683
00:31:43,880 --> 00:31:47,160
Speaker 3: bring down mortgage rates even more, it probably means because

684
00:31:47,200 --> 00:31:49,240
Speaker 3: the economy is coming undone and the and the labor

685
00:31:49,280 --> 00:31:50,680
Speaker 3: market is coming undone.

686
00:31:50,840 --> 00:31:52,840
Speaker 2: So how do you see it? Is the FED going

687
00:31:52,880 --> 00:31:54,040
Speaker 2: to have to kind of make some choices?

688
00:31:54,080 --> 00:31:55,720
Speaker 3: Are we going to have to make some choices about

689
00:31:55,720 --> 00:31:59,240
Speaker 3: what we what we get with this US economy and want.

690
00:31:59,640 --> 00:32:02,120
Speaker 10: I think the FED is making choices. And I've been

691
00:32:02,680 --> 00:32:05,760
Speaker 10: a staunch proponent of the Fed's actions over the last

692
00:32:05,800 --> 00:32:08,440
Speaker 10: number of years. I think they've gotten it right. Could

693
00:32:08,440 --> 00:32:10,560
Speaker 10: they have been a little bit faster on the uptake?

694
00:32:10,640 --> 00:32:13,520
Speaker 10: Could they be a little bit slower maybe here, or

695
00:32:13,560 --> 00:32:15,680
Speaker 10: maybe they need to go a little faster. I don't know,

696
00:32:15,800 --> 00:32:18,600
Speaker 10: But overall, I think they've been doing a good job.

697
00:32:18,920 --> 00:32:21,400
Speaker 10: Here we are. We're sitting in economy with very, very

698
00:32:21,440 --> 00:32:24,760
Speaker 10: low unemployment, and we're sitting in an economy that is

699
00:32:24,920 --> 00:32:28,720
Speaker 10: growing where consumers continue to spend. So I think they're

700
00:32:28,760 --> 00:32:32,840
Speaker 10: getting it right. If anyone is thinking we're going back

701
00:32:32,880 --> 00:32:35,760
Speaker 10: to a time when we're going to have three percent mortgages, Okay,

702
00:32:35,800 --> 00:32:38,280
Speaker 10: that's not going to happen. But the idea that we're

703
00:32:38,280 --> 00:32:40,760
Speaker 10: going to have you know, four and a half, five percent,

704
00:32:40,880 --> 00:32:44,160
Speaker 10: five and a half percent mortgages, that's nirvana if you

705
00:32:44,200 --> 00:32:46,960
Speaker 10: think about any other time period in our history. So

706
00:32:46,960 --> 00:32:49,719
Speaker 10: we're not that far away from that, and yet still

707
00:32:49,760 --> 00:32:54,239
Speaker 10: have low and low unemployment and still have you know,

708
00:32:54,280 --> 00:32:57,280
Speaker 10: a growing economy with all the opportunities we have. The

709
00:32:57,400 --> 00:33:01,320
Speaker 10: US leads the world in so many different industries. What

710
00:33:01,480 --> 00:33:03,600
Speaker 10: else could you be wishing for. This is a good

711
00:33:03,640 --> 00:33:05,800
Speaker 10: place to be and I think the FED is getting

712
00:33:05,840 --> 00:33:07,560
Speaker 10: it right, and I think we're going to land in

713
00:33:07,560 --> 00:33:08,200
Speaker 10: the right place.

714
00:33:08,680 --> 00:33:10,960
Speaker 5: Okay, I'm hearing all of the optimistic masters, and I

715
00:33:11,000 --> 00:33:14,000
Speaker 5: appreciate them, and I hear you, but I do want

716
00:33:14,040 --> 00:33:16,400
Speaker 5: to ask you if there's anything you're worried about, because

717
00:33:16,800 --> 00:33:20,440
Speaker 5: you know, there are concerns out there, and I'm just

718
00:33:20,720 --> 00:33:21,040
Speaker 5: a lot of.

719
00:33:21,040 --> 00:33:23,080
Speaker 2: American voters they certainly feel that way.

720
00:33:23,400 --> 00:33:25,840
Speaker 5: And I'm just curious as to what you're watching for

721
00:33:26,040 --> 00:33:28,760
Speaker 5: the potential signs that maybe things might you know, there

722
00:33:28,760 --> 00:33:30,080
Speaker 5: could be some bumps in the road in the way.

723
00:33:31,240 --> 00:33:33,680
Speaker 10: There's always the potential for bumps in the road, and

724
00:33:33,760 --> 00:33:36,920
Speaker 10: we cancel all of our clients to you know, be aware,

725
00:33:37,280 --> 00:33:41,080
Speaker 10: have situational awareness. Could there be a spike in you know,

726
00:33:41,160 --> 00:33:44,000
Speaker 10: various indicators that there could be a change in interest

727
00:33:44,080 --> 00:33:46,960
Speaker 10: rate policy that was unexpected Right six months ago, everyone

728
00:33:46,960 --> 00:33:49,680
Speaker 10: thought maybe rates were going to go up. So I

729
00:33:49,720 --> 00:33:52,760
Speaker 10: think it's I think it's important for people to prepare

730
00:33:52,880 --> 00:33:56,240
Speaker 10: for a number of different eventualities.

731
00:34:00,880 --> 00:34:02,480
Speaker 2: That happens. You know, welcome to the world.

732
00:34:02,600 --> 00:34:06,760
Speaker 10: People should and people should People should should not you know,

733
00:34:06,840 --> 00:34:12,239
Speaker 10: necessarily make business decisions only based on headlines there in

734
00:34:12,280 --> 00:34:13,960
Speaker 10: the news. We should take a look at what's going

735
00:34:14,000 --> 00:34:16,319
Speaker 10: on on the ground. What I am speaking to is

736
00:34:16,320 --> 00:34:19,759
Speaker 10: what our clients are telling us about their business prospects

737
00:34:19,800 --> 00:34:22,480
Speaker 10: and where they're willing to invest their capital. And the

738
00:34:22,520 --> 00:34:25,239
Speaker 10: things we're being told is that it looks like the

739
00:34:25,280 --> 00:34:27,520
Speaker 10: economy is on a very solid footing as we sit

740
00:34:27,560 --> 00:34:30,400
Speaker 10: here today, and we'll continue to grow moving forward.

741
00:34:30,440 --> 00:34:31,320
Speaker 2: Hey thirty seconds.

742
00:34:31,360 --> 00:34:33,440
Speaker 3: So when you look at your loan book or when

743
00:34:33,440 --> 00:34:35,279
Speaker 3: you look at loan demand, you don't see any signs

744
00:34:35,320 --> 00:34:35,800
Speaker 3: of stress.

745
00:34:37,480 --> 00:34:40,799
Speaker 10: Look, there's always there's always signs of some sort of

746
00:34:40,800 --> 00:34:43,400
Speaker 10: stress somewhere in the economy, and it moves from place

747
00:34:43,440 --> 00:34:45,880
Speaker 10: to place. So yes, we always have to keep an

748
00:34:45,920 --> 00:34:48,520
Speaker 10: eye on that. And you know, the lowering of interest

749
00:34:48,600 --> 00:34:52,320
Speaker 10: rates is making some of those areas better off today

750
00:34:52,320 --> 00:34:54,440
Speaker 10: than they were maybe six months ago, but it may

751
00:34:54,520 --> 00:34:58,560
Speaker 10: create other issues in other places. Anyone who's lending money

752
00:34:58,600 --> 00:35:01,080
Speaker 10: has to always, you know, be a into what parts

753
00:35:01,080 --> 00:35:03,719
Speaker 10: of the economy are moving better than others. And that's

754
00:35:03,760 --> 00:35:07,520
Speaker 10: a very very you know, fast moving environment. So I

755
00:35:07,520 --> 00:35:11,200
Speaker 10: wouldn't say it's devoid of any stress whatsoever. We certainly

756
00:35:11,800 --> 00:35:13,600
Speaker 10: that's our job is to look at where those things

757
00:35:13,640 --> 00:35:14,200
Speaker 10: are occurring.

758
00:35:14,360 --> 00:35:16,040
Speaker 3: Well, as you know, we always appreciate when we get

759
00:35:16,040 --> 00:35:19,080
Speaker 3: some time with you, Frankie, Well, frank Sorrentino. He's chairman

760
00:35:19,120 --> 00:35:21,799
Speaker 3: and at Connect one Bank Court joining us there from

761
00:35:22,000 --> 00:35:23,000
Speaker 3: Long Island.

762
00:35:23,840 --> 00:35:26,080
Speaker 4: Brother marcome.

763
00:35:27,239 --> 00:35:29,360
Speaker 3: A journal now about you?

764
00:35:29,440 --> 00:35:29,920
Speaker 11: Let me drive?

765
00:35:30,200 --> 00:35:34,120
Speaker 5: Oh no, no, no no, he's gone to drive, honey, please,

766
00:35:34,239 --> 00:35:35,680
Speaker 5: I'll do the riding gravels.

767
00:35:36,120 --> 00:35:37,479
Speaker 3: Let's wat I want to drive.

768
00:35:37,480 --> 00:35:41,600
Speaker 10: It's a good question that try.

769
00:35:44,440 --> 00:35:47,040
Speaker 4: This is the drive to the Clothes dot Com.

770
00:35:47,520 --> 00:35:50,800
Speaker 1: Think well, jo it on on Bluebird Radio.

771
00:35:50,920 --> 00:35:53,600
Speaker 3: All right, everybody, just under twenty minutes left to end

772
00:35:53,680 --> 00:35:57,360
Speaker 3: the Monday trading day. I heard Charlie breaking down the numbers,

773
00:35:57,360 --> 00:35:59,799
Speaker 3: Bill Maloney as well, and we're definitely of our best

774
00:35:59,840 --> 00:36:02,160
Speaker 3: life of the session. So I'm going to say Stephen

775
00:36:02,320 --> 00:36:04,040
Speaker 3: just a little bit higher. But you know, it was

776
00:36:04,040 --> 00:36:06,040
Speaker 3: a big week last week with the FED meeting. I

777
00:36:06,040 --> 00:36:07,839
Speaker 3: feel like we're going to wait to see what FED

778
00:36:07,880 --> 00:36:09,920
Speaker 3: speakers are saying, although a lot have been out in

779
00:36:09,960 --> 00:36:10,520
Speaker 3: full force.

780
00:36:10,640 --> 00:36:12,640
Speaker 5: Yeah, that's when we heard from Aston Gosby among others,

781
00:36:12,640 --> 00:36:15,000
Speaker 5: talking about many more rake cuts so expected over the

782
00:36:15,000 --> 00:36:18,759
Speaker 5: next year, two many more meet It was sufficiently nebulous,

783
00:36:18,920 --> 00:36:20,399
Speaker 5: is what I enjoyed it. I think we probably needed

784
00:36:20,400 --> 00:36:22,560
Speaker 5: to hear him say it to really understand what it meant.

785
00:36:22,600 --> 00:36:24,480
Speaker 5: And we're thinking about the year ahead. Let's bring in

786
00:36:24,560 --> 00:36:28,160
Speaker 5: Veronica Wellison's Global investment Strattus at Wells Fargo Investment Institute.

787
00:36:28,200 --> 00:36:30,719
Speaker 5: He joins us from Saint Louis. Veronica, Great to have

788
00:36:30,800 --> 00:36:33,560
Speaker 5: you with us on the program. So what's your reading

789
00:36:33,560 --> 00:36:34,839
Speaker 5: on where markets are this week?

790
00:36:34,920 --> 00:36:35,080
Speaker 4: Right?

791
00:36:35,080 --> 00:36:36,800
Speaker 5: Are we in a sweet spot? We got the fifty

792
00:36:36,800 --> 00:36:39,279
Speaker 5: basis points, we haven't gotten into earning season yet. Is

793
00:36:39,320 --> 00:36:41,640
Speaker 5: this sort of a happy coasting moment or do we

794
00:36:41,680 --> 00:36:43,879
Speaker 5: need to watch out for Iceberg's.

795
00:36:44,800 --> 00:36:46,759
Speaker 11: I think we're in a bit of a sweet spot

796
00:36:46,880 --> 00:36:49,760
Speaker 11: right now. A pretty quiet day that we've seen today

797
00:36:49,800 --> 00:36:52,720
Speaker 11: after a very eventful week last week. But I think

798
00:36:53,080 --> 00:36:57,360
Speaker 11: ahead we've got some important data this week. Most importantly,

799
00:36:57,360 --> 00:37:01,279
Speaker 11: we've got that PC inflation expected all on Friday. And

800
00:37:01,360 --> 00:37:04,359
Speaker 11: while you know, markets have shifted their focus a little

801
00:37:04,400 --> 00:37:07,200
Speaker 11: bit to the labor market over inflation, I do think

802
00:37:07,280 --> 00:37:10,240
Speaker 11: that those inflation updates are going to continue to be important.

803
00:37:10,440 --> 00:37:13,000
Speaker 3: Yeah, I agree with you. We are so still data dependent.

804
00:37:13,040 --> 00:37:14,480
Speaker 3: I mean, folks, if you thought we were over it,

805
00:37:14,560 --> 00:37:17,360
Speaker 3: we are just so not. It's data dependent and inflation

806
00:37:17,480 --> 00:37:20,680
Speaker 3: and even the Fed said right, Veronica made some point

807
00:37:20,680 --> 00:37:23,080
Speaker 3: about that inflation is still not quite where they the

808
00:37:23,120 --> 00:37:24,880
Speaker 3: FED would like it to be, so you know that

809
00:37:24,920 --> 00:37:25,960
Speaker 3: they are watching as well.

810
00:37:27,200 --> 00:37:27,439
Speaker 1: Yeah.

811
00:37:27,440 --> 00:37:31,440
Speaker 11: Absolutely. You know a lot of people have taken the

812
00:37:31,640 --> 00:37:34,120
Speaker 11: fifty basis point cut by the FED as a win

813
00:37:34,239 --> 00:37:36,960
Speaker 11: over inflation. And I think what's going to be important

814
00:37:37,000 --> 00:37:39,040
Speaker 11: for all of the various bet speakers we've got this

815
00:37:39,120 --> 00:37:42,880
Speaker 11: week speaking or looking at what they're saying about inflation.

816
00:37:44,040 --> 00:37:46,239
Speaker 11: They certainly haven't told us, you know, we have a

817
00:37:46,280 --> 00:37:48,560
Speaker 11: victory over inflation. They still want to see that inflation

818
00:37:48,680 --> 00:37:49,160
Speaker 11: number come.

819
00:37:49,080 --> 00:37:52,080
Speaker 5: Down some more on the south landing question, and we

820
00:37:52,080 --> 00:37:56,040
Speaker 5: were speaking to the CEO of Bincorp there a moment ago,

821
00:37:57,520 --> 00:38:00,880
Speaker 5: thank you, super optimistic about where things are going for

822
00:38:00,880 --> 00:38:03,920
Speaker 5: the US economy, but this question of soft landing and

823
00:38:03,960 --> 00:38:06,799
Speaker 5: the risks of that landing still in question. I mean,

824
00:38:06,920 --> 00:38:10,640
Speaker 5: what's the market perception on that From your point of view, I.

825
00:38:10,600 --> 00:38:13,560
Speaker 11: Think the market is becoming a little bit more concerned

826
00:38:13,600 --> 00:38:15,600
Speaker 11: that maybe there will be a recession. But I think

827
00:38:15,880 --> 00:38:18,120
Speaker 11: soft landing is what's priced in and that's what the

828
00:38:18,160 --> 00:38:22,240
Speaker 11: most likely scenario is. We're seeing economic.

829
00:38:21,960 --> 00:38:24,480
Speaker 2: Rights based on what you guys look at.

830
00:38:25,200 --> 00:38:28,160
Speaker 11: Yeah, I think we're seeing slowing economic growth, but not

831
00:38:28,360 --> 00:38:30,759
Speaker 11: enough to put us into a recession. And I think

832
00:38:30,840 --> 00:38:33,640
Speaker 11: by the time we get to that low in the growth,

833
00:38:33,760 --> 00:38:36,800
Speaker 11: we'll start to see that acceleration and really avoid a recession.

834
00:38:36,840 --> 00:38:40,600
Speaker 5: At this point, what we're thinking about next year, you know,

835
00:38:40,840 --> 00:38:43,080
Speaker 5: the idea of there being a better economic picture in

836
00:38:43,160 --> 00:38:46,400
Speaker 5: play there as well. How do you position now to

837
00:38:46,480 --> 00:38:47,919
Speaker 5: be ready for that next year?

838
00:38:49,400 --> 00:38:52,440
Speaker 11: I think for now we are a little bit cautious

839
00:38:52,560 --> 00:38:55,920
Speaker 11: thinking of US large caps over small caps, and then

840
00:38:56,080 --> 00:38:58,359
Speaker 11: in the fixed income space, we like investment grade over

841
00:38:58,440 --> 00:39:01,840
Speaker 11: high yield, waiting for a little bit of a better

842
00:39:02,480 --> 00:39:04,840
Speaker 11: entry point to making a shift to those risk on

843
00:39:05,160 --> 00:39:06,960
Speaker 11: So once we start to feel a little bit more

844
00:39:06,960 --> 00:39:10,440
Speaker 11: comfortable that the economy is starting to accelerate, that's when

845
00:39:10,480 --> 00:39:12,279
Speaker 11: we want to make more of a shift to those

846
00:39:12,280 --> 00:39:14,400
Speaker 11: more risk on areas of the market that tend to

847
00:39:14,400 --> 00:39:16,600
Speaker 11: do well as the economy starts to reaccelerate.

848
00:39:16,800 --> 00:39:18,960
Speaker 3: All right, So, for people are putting new money to

849
00:39:19,080 --> 00:39:22,880
Speaker 3: work right now, what's your advice for people who have

850
00:39:23,040 --> 00:39:26,440
Speaker 3: existing portfolios? What's the tinkering you suggest right now?

851
00:39:27,680 --> 00:39:30,920
Speaker 11: I think right now a focus on the US large

852
00:39:30,920 --> 00:39:33,719
Speaker 11: cap space. We've seen a bit of a rally year,

853
00:39:33,960 --> 00:39:37,000
Speaker 11: so I'd focus on some of those sectors that have

854
00:39:37,160 --> 00:39:40,399
Speaker 11: the best valuations right now that we're expecting to do

855
00:39:40,480 --> 00:39:43,560
Speaker 11: well over the next twelve to eighteen months or so.

856
00:39:43,560 --> 00:39:49,360
Speaker 11: So we like communications services, financials, energy, materials, and industrials.

857
00:39:50,000 --> 00:39:52,560
Speaker 11: We think that those sectors are, you know, a little

858
00:39:52,560 --> 00:39:55,640
Speaker 11: bit better evaluation than tech, which has gotten a little

859
00:39:55,640 --> 00:39:59,560
Speaker 11: bit overextended over the past couple of years, but should

860
00:39:59,600 --> 00:40:03,520
Speaker 11: also benefit from the long term type of AI trends

861
00:40:03,560 --> 00:40:07,000
Speaker 11: that has really boosted tech. I think sometimes people forget

862
00:40:07,080 --> 00:40:09,920
Speaker 11: that other sectors will really benefit from that AI trade,

863
00:40:10,320 --> 00:40:13,400
Speaker 11: and that's what I would really encourage investors to do

864
00:40:13,480 --> 00:40:13,879
Speaker 11: right now.

865
00:40:13,960 --> 00:40:17,080
Speaker 3: Communication services as a whole, certainly a group that we

866
00:40:17,120 --> 00:40:17,759
Speaker 3: talk about a lot.

867
00:40:17,840 --> 00:40:19,719
Speaker 2: It's a little bit lower in today's trade.

868
00:40:19,760 --> 00:40:22,719
Speaker 3: If I bring up the year to date numbers, let

869
00:40:22,760 --> 00:40:25,000
Speaker 3: me just go there on the Bloomberg you see communication

870
00:40:25,120 --> 00:40:27,080
Speaker 3: services up almost twenty six percent so.

871
00:40:27,080 --> 00:40:29,560
Speaker 2: Far this year. It's an interesting group though.

872
00:40:29,640 --> 00:40:32,960
Speaker 3: You know, you've got your media names, your traditional media companies,

873
00:40:32,960 --> 00:40:35,560
Speaker 3: but you have something like Meta in there, you have

874
00:40:35,719 --> 00:40:38,800
Speaker 3: Google in there. So when I know you can't necessarily

875
00:40:38,840 --> 00:40:42,239
Speaker 3: talk specific names when you drill down into various sectors

876
00:40:42,560 --> 00:40:45,600
Speaker 3: within communications services, is it some of the megacap tech

877
00:40:45,680 --> 00:40:48,840
Speaker 3: names that you guys still find interesting or.

878
00:40:49,080 --> 00:40:51,440
Speaker 2: Is it some of the traditional is it the streamers?

879
00:40:51,440 --> 00:40:51,520
Speaker 4: Like?

880
00:40:51,560 --> 00:40:52,160
Speaker 2: What is it?

881
00:40:53,640 --> 00:40:56,800
Speaker 11: I think overall as a sector, we really like the

882
00:40:57,239 --> 00:41:01,160
Speaker 11: opportunities there. We do think some of thecaps can still

883
00:41:01,320 --> 00:41:05,040
Speaker 11: perform well as long as their earnings still deliver what

884
00:41:05,160 --> 00:41:08,960
Speaker 11: the market is expecting. We've seen a little bit of

885
00:41:09,320 --> 00:41:13,680
Speaker 11: market broadening this year with other names participating in the

886
00:41:13,760 --> 00:41:16,640
Speaker 11: rally and not just that heavy concentration on those you know,

887
00:41:16,760 --> 00:41:19,600
Speaker 11: top seven stocks or so. And I think that's what

888
00:41:19,640 --> 00:41:22,680
Speaker 11: we're expecting to continue for the rest of this year

889
00:41:22,719 --> 00:41:25,560
Speaker 11: into twenty twenty five. So I still think that there's

890
00:41:25,760 --> 00:41:30,920
Speaker 11: room for communication services to improve and adding that exposure

891
00:41:30,960 --> 00:41:33,400
Speaker 11: on days when you see pullbacks is a really good idea.

892
00:41:33,960 --> 00:41:36,279
Speaker 5: What a big companies that are consumer focused. I wonder

893
00:41:36,320 --> 00:41:38,560
Speaker 5: what's you're reading on the US consumer right now. We've

894
00:41:38,600 --> 00:41:40,600
Speaker 5: had we've had the first rate cut. You know, that's

895
00:41:40,600 --> 00:41:42,400
Speaker 5: going to help those that have mortgages to pay, but

896
00:41:42,960 --> 00:41:45,440
Speaker 5: you know, more broadly, there have been signs of weakness

897
00:41:45,440 --> 00:41:47,440
Speaker 5: in some of the data.

898
00:41:47,600 --> 00:41:51,120
Speaker 11: Yeah, and we're really seeing that consumer confidence also wane

899
00:41:51,160 --> 00:41:53,680
Speaker 11: a little bit. As you know, consumers are just really

900
00:41:53,719 --> 00:41:56,279
Speaker 11: they're really worried about inflation. They're really worried about where

901
00:41:56,360 --> 00:42:00,320
Speaker 11: prices are now, and we haven't necessarily seen that flow

902
00:42:00,440 --> 00:42:04,680
Speaker 11: through to retail sales, which have held up. Okay, it's

903
00:42:04,680 --> 00:42:07,719
Speaker 11: softening a little bit, but it hasn't gotten to a

904
00:42:07,760 --> 00:42:10,160
Speaker 11: concerning point, which is part of the reason why we're

905
00:42:10,200 --> 00:42:13,000
Speaker 11: in that soft landing camp. We'll think the consumer will

906
00:42:13,000 --> 00:42:16,680
Speaker 11: be able to hold up. Okay, not as strong as

907
00:42:16,719 --> 00:42:20,760
Speaker 11: they have been previously, but that's that's a big portion

908
00:42:21,040 --> 00:42:24,319
Speaker 11: of why we're expecting economic growth to slow but not

909
00:42:24,360 --> 00:42:27,480
Speaker 11: pull us into our recession, is just that the consumer

910
00:42:27,600 --> 00:42:28,680
Speaker 11: should hold up. Okay.

911
00:42:29,200 --> 00:42:31,200
Speaker 2: Is the AI trade still a good one in your view?

912
00:42:32,880 --> 00:42:35,320
Speaker 11: I think it's important to think of the AI trade

913
00:42:35,360 --> 00:42:39,279
Speaker 11: as more more than just a near term type of play.

914
00:42:39,400 --> 00:42:41,680
Speaker 11: It's a it's a longer term theme which I think

915
00:42:41,719 --> 00:42:44,279
Speaker 11: will play play out in the markets over you know,

916
00:42:45,239 --> 00:42:48,880
Speaker 11: years to come, and so I do think it's important

917
00:42:48,960 --> 00:42:51,480
Speaker 11: to think outside of the tech sector when you're when

918
00:42:51,480 --> 00:42:54,360
Speaker 11: you're thinking of that AI play, That's not the only

919
00:42:54,400 --> 00:42:57,160
Speaker 11: place where you'll really be able to see the benefits there.

920
00:42:57,920 --> 00:43:02,640
Speaker 11: In particular, the energy, material industrial sectors will also benefit

921
00:43:02,680 --> 00:43:05,480
Speaker 11: in the AI because they're all part of you know,

922
00:43:05,520 --> 00:43:08,880
Speaker 11: getting up to those AI solutions and right now they

923
00:43:08,920 --> 00:43:11,080
Speaker 11: have a little bit better valuations and what we're seeing

924
00:43:11,120 --> 00:43:13,680
Speaker 11: in the tech sector. So that's a really great way

925
00:43:13,719 --> 00:43:15,800
Speaker 11: to play that longer term AI trend.

926
00:43:16,200 --> 00:43:18,160
Speaker 2: All right, Gonna leave it on that note. Listen Veronica.

927
00:43:18,200 --> 00:43:20,400
Speaker 3: We really appreciate your time today, by the way, and

928
00:43:20,480 --> 00:43:22,160
Speaker 3: video is up about four tens of a percent in

929
00:43:22,160 --> 00:43:24,239
Speaker 3: case you were I feel like we say AI, we

930
00:43:24,280 --> 00:43:25,320
Speaker 3: have to talk about Nvidia.

931
00:43:25,719 --> 00:43:27,799
Speaker 5: That's Ronica at a stark level of investment Stratus at

932
00:43:27,800 --> 00:43:30,399
Speaker 5: well Wells Fargo Investment Tendsity with us from Saint Louis.

933
00:43:30,880 --> 00:43:35,520
Speaker 1: This is the Bloomberg Business Week podcast, available on Apple, Spotify,

934
00:43:35,640 --> 00:43:39,360
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935
00:43:39,400 --> 00:43:42,960
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936
00:43:43,040 --> 00:43:46,359
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937
00:43:46,440 --> 00:43:49,520
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938
00:43:49,600 --> 00:43:53,600
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