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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day

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Speaker 2: for insight from the best in markets, economics, and geopolitics

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Speaker 2: from our global headquarters in New York City. We are

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Speaker 2: live on Bloomberg Television weekday mornings from six to nine

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Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or

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Speaker 2: anywhere else you listen, and as always on the Bloomberg

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Speaker 2: Terminal and the Bloomberg Business app. City's VIIATA mancy Navigating

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Speaker 2: election scenarios writing a global equity strategy for Trump is

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Speaker 2: premised on a stronger dollar, rising rage, trade policy uncertainty,

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Speaker 2: and of value rotation. A Harris strategy is premised on

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Speaker 2: a weeker dollar, lower nominal yields, potential tax hikes, and

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Speaker 2: a general till towards climate friendly policies. Bana joined us

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Speaker 2: now for more Biata, Welcome to the program. Given the

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Speaker 2: polling over the weekend, how are you advocating for what

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Speaker 2: clients should do? What are you telling them about how

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Speaker 2: to navigate the next forty eight hours and beyond?

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Speaker 3: In markets, good morning, Thanks for having me. So to us.

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Speaker 3: Within the equity market that I cover, the biggest, the

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Speaker 3: most important call for a Trump win has been.

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Speaker 1: Of course overweight to the US versus the rest of

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Speaker 1: the world.

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Speaker 3: And just like all this macro trade that you've been

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Speaker 3: talking about through the morning.

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Speaker 1: Stronger dollar or higher yields, this trade has also played

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Speaker 1: out substantially. So at its peak it's been seven percent higher.

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Speaker 1: There is a sense of the market taking off a

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Speaker 1: bit of this profits, so it's up six percent. I

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Speaker 1: would argue a lot of Trump win is still in

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Speaker 1: the price and that performance, of course means that positioning

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Speaker 1: is very stretch on the US versus Europe. In fact,

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Speaker 1: it's one of the most stretched on relative basis positionings

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Speaker 1: we've been having since the pandemic.

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Speaker 3: So there is a very very.

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Speaker 1: Setup of the investors going into the election day.

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Speaker 3: And as Paul suggests, anything can happen.

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Speaker 2: Well, let's talk about Europe. I'd love a European perspective

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Speaker 2: on this. How nervous European based investors are about the

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Speaker 2: potential Trump victory and are they rethinking that domestic European

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Speaker 2: allocations to equities because of it? How is their approach changing.

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Speaker 1: European investors and global investors have been very, very nervous

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Speaker 1: about allocation into the European equities, but that has already

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Speaker 1: started around June with the political risks of French election

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Speaker 1: earnings for Europe coming off substantially, China worries, right, so

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Speaker 1: we are entering We've entered this pre election period with

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Speaker 1: a lot of bearishness, a lot of underperformance actually underlying

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Speaker 1: EPs recessions for many cyclical sectors in Europe, which leaves

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Speaker 1: us in a very interesting setup if Trump was not

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Speaker 1: to it again, holds are fifty to fifty. We really

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Speaker 1: don't know, right, But the way I think about global equities,

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Speaker 1: it's the US versus the rest of the world equities

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Speaker 1: and what is certain and investors really don't argue with

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Speaker 1: us about that. That Within this rest of the world

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Speaker 1: equity allocation, Europe looks most interesting right now because it's

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Speaker 1: been so beaten up beforehand. So everything in equities is

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Speaker 1: about changing balance of risks, and the balance of risks

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Speaker 1: has been improving from very low levels.

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Speaker 3: Hasn't shown up in the performance right now.

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Speaker 1: But should Harris win, that's definitely a very positive trigger.

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Speaker 3: For the rest of the world and Europe in particular.

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Speaker 1: But on the other hand, if Trump points a lot

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Speaker 1: of that trade has been already played out in Europe,

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Speaker 1: perhaps of Trump trade, continental Europe looks less attractive. But

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Speaker 1: within the the European equities the UK, which tends to

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Speaker 1: be more defensive and has a lot of energy weight

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Speaker 1: in it, so puts you one hundreds. I'm talking about

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Speaker 1: this is the one that looks more interesting to go after.

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Speaker 3: If Trump was to win and it.

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Speaker 4: Hadn't played out here, there is a lot to unpack there,

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Speaker 4: and I want to just go to what you expect

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Speaker 4: in the immediate aftermath of US getting some sort of

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Speaker 4: result from the election, because a lot of people are

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Speaker 4: going to be up all night at their desks trying

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Speaker 4: to figure out how much volatility there is and how

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Speaker 4: they should play it. Are you saying that if it

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Speaker 4: looks like Harris is winning, you could see a massive

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Speaker 4: migration away from US equities into European equities.

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Speaker 3: Is that your base case, the.

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Speaker 1: Basic case, Yes, the rest of the rest of the

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Speaker 1: world would outperform the US equities should Harris win. And

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Speaker 1: in terms of the volatiinity, of course, as the Trump

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Speaker 1: trades have moved so fast, so quickly.

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Speaker 3: Investors have been.

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Speaker 1: Anticipating higher volatility that has been already playing out, especially

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Speaker 1: last week.

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Speaker 3: It is volative. It is on truck of historically.

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Speaker 1: Historical trends in pre election, so it is playing out.

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Speaker 3: But I really think investors are in.

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Speaker 1: A siteguate mode to really we are so close to

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Speaker 1: the results that they'll take option once we have the results.

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Speaker 5: Yeah, well be out of There is a sort of

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Speaker 5: flying the ointment.

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Speaker 4: And this is something a lot of people have pointed out,

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Speaker 4: which is typically momentum tends to continue after an election,

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Speaker 4: regardless of who wins. And then there's also the sense

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Speaker 4: that if you look at fiscal stimulus, if you look

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Speaker 4: at deficits, the trend is the same across the world,

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Speaker 4: regardless of whether it's the US or whether it's Europe,

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Speaker 4: with the exception of Germany, which dances to its own music.

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Speaker 4: I mean, how much are we talking about a world

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Speaker 4: that is looking to stimulate cut rates and do the

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Speaker 4: same thing. So it kind of leaves everybody in the

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Speaker 4: same place.

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Speaker 3: Absolutely, And that is a very fair point that you

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Speaker 3: are making.

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Speaker 1: So election is an important event, but it is about

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Speaker 1: everything else as well that will push equities higher or

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Speaker 1: lower in the months to come, and one thing is

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Speaker 1: certain that yields will stay higher. Rates despite the cuts

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Speaker 1: that we have on the forecast, will still be high

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Speaker 1: for longer.

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Speaker 6: And if this trend of the economic economic surprises around

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Speaker 6: the world continuous, positive surprises continuous, this would be an

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Speaker 6: interesting setup for this improving balance of risks where the

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Speaker 6: rest of the world equities versus the US should be

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Speaker 6: better positioned.

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Speaker 2: So wonderful to hear from you appreciate the perspective on

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Speaker 2: the other side of the Atlantic. The automantic city begin

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Speaker 2: this hour, but the equity raally stolen, coming into a

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Speaker 2: defining way for financial markets worldwide, where some trade is

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Speaker 2: beginning to unwind Trump trade as the latest New York

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Speaker 2: Times CNPO shows Vice President Kamala Harris ahead in five

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Speaker 2: of seven key swing states, and Walpole giving Harris the

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Speaker 2: edge in Iowa, a state from one with ease in

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Speaker 2: twenty sixteen and in twenty twenty. Mike Wilson and Malkin

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Speaker 2: Stanley judge us now for more. Mike, is good to

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Speaker 2: see it, great, thanks for having me. Let's get into this.

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Speaker 2: The parallels between now and twenty sixteen. How strong are they?

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Speaker 5: They're not strong at.

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Speaker 7: All, because I mean, like at the end of the day,

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Speaker 7: the business cycle and earnings and also interest rates will

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Speaker 7: determine kind of worre stocks trade over the next year

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Speaker 7: or two. And in twenty sixteen, as you recall, we

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Speaker 7: went into that election with a lot of slack in

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Speaker 7: the economy, right, things were slow, We had a manufacturing

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Speaker 7: recession around the world. In fifteen sixteen, the FED was

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Speaker 7: you know, rates were pretty low. Generally there was the economy.

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Speaker 7: We had a last slack from a labor standpoint, so

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Speaker 7: it was it could receive kind of a pro reflationary

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Speaker 7: policy strategy. Today we don't have that slack. So prices

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Speaker 7: are extremely high. Consumers and small businesses are much more

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Speaker 7: I was say, sensitive to higher interest rates. So rising

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Speaker 7: interest rates and kind of a pro it's a coal

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Speaker 7: strategy to do not gonna be good for those types

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Speaker 7: of stocks. And I think also the bond market now

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Speaker 7: is in a much different position. Right, we have way

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Speaker 7: more debt, as you mentioned earlier than in twenty sixteen,

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Speaker 7: we had plenty of you know, slack in the in

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Speaker 7: the borrowing markets.

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Speaker 5: Today we don't have that.

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Speaker 4: Here's what does it make sense to me then about

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Speaker 4: the Trump Trade. If you get bond yields that climb,

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Speaker 4: how can risk assets keep rallying.

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Speaker 7: Well, I think it depends on why they're rallying. Okay,

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Speaker 7: So I do think that equity markets are still nervous

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Speaker 7: about growth concerns. I mean, the labor market's all over

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Speaker 7: the place. I mean, you can people can make excuses

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Speaker 7: for why it's better or worse month a month, but

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Speaker 7: the general trend in labor is down. We're in a

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Speaker 7: late cycle economy. So the equity market is worried about

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Speaker 7: growth slowing, and you know that's why the Fed's cutting

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Speaker 7: interest rates. Okay, so the bomb marker can't I mean

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Speaker 7: the bomb marker the market worker goes up because growth

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Speaker 7: is better and people believe.

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Speaker 5: That, then it could be okay for equities.

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Speaker 7: If bond market yields gow up because term premium is

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Speaker 7: widening because of fiscal sustainability issues, then it's a problem.

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Speaker 5: Well.

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Speaker 4: I guess the reason why I ask this is because

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Speaker 4: the Trump trade is the new jerk reaction supposedly is

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Speaker 4: bond yields go up and equities, particularly in the more

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Speaker 4: cyclical sectors. I'm thinking of financials. Based on the idea

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Speaker 4: that you're not necessarily getting some sort of economic impulse.

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Speaker 4: It's immediately overlaid onto this scenario. Why should risk acids

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Speaker 4: continue to rally if yields continue to surge simply on

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Speaker 4: this idea that the deficits increasing and that bond vigilantes

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Speaker 4: suddenly could be back.

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Speaker 7: Well, I mean, first of all, the financials is a

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Speaker 7: little bit different, because that's a drag sort of call,

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Speaker 7: and I do think that one's fairly visible. I think

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Speaker 7: if you have a Trump presidency and maybe even a

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Speaker 7: red sweep, you could get more lenient regulatory environment, maybe

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Speaker 7: m and A picks up. That's kind of the financials trade.

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Speaker 7: But that's unique, and we don't think the financials have

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Speaker 7: really rallied that much on that trade yet. I spend

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Speaker 7: more about the third quarter earning season and the fact

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Speaker 7: that we went into that arning season with not a

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Speaker 7: lot of high expectations.

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Speaker 5: So I think.

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Speaker 7: There's scope for further follow through in certain quote unquote

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Speaker 7: Trump trades. At the same time, there's probably, you know,

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Speaker 7: the other side, which is I think a lot of

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Speaker 7: the negative.

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Speaker 5: Trades have played out for the Trump trades.

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Speaker 7: I mean, bonds have sold off probably too much, and

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Speaker 7: the renewables and things like consumer goods companies will be

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Speaker 7: hurt by tariffs have really been hammered. So if Harris wins,

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Speaker 7: you could see a really a pretty big rebound in

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Speaker 7: some markets, you know. So there's a lot of permutations here.

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Speaker 7: This is is not as clear cut. I think you

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Speaker 7: said exactly right. It's all about the setup. Okay, Stocks

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Speaker 7: and asset prices move based on positioning as much as

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Speaker 7: they do about the actual news. I'm looking for a

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Speaker 7: clearing event, Okay. I'm hoping this is a clearing event,

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Speaker 7: and then we can kind of get back to doing

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Speaker 7: what we, you know, get paid to do, which is

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Speaker 7: analyze interest rates, earnings growth, and kind of multiples trying

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Speaker 7: to figure out, Okay, what's the fundamental case here? And

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Speaker 7: my guess is that could take maybe a month to

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Speaker 7: kind of.

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Speaker 5: Clear when it comes to a clearing event.

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Speaker 8: Would you agree with Kit Jukes that it's either likely

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Speaker 8: going to be a Republican sweep or Harris with Gridlock

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Speaker 8: aka Republican Senate.

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Speaker 5: Yeah, I think that's probably.

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Speaker 7: I mean, that's what the prediction markets Stayman, Who am

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Speaker 7: I to argue with that? And but there are but

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Speaker 7: it's not like it's a slam dunk Okay, I think

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Speaker 7: the mark I think, but I do not agree with

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Speaker 7: the view that a Republican sweep is the best outcome

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Speaker 7: for equities. I think it's probably Trump with a divided Congress.

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Speaker 8: A publicans means a fifteen percent corporate tax rate, potentially.

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Speaker 7: Potentially potentially, I mean, let's see if they can actually

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Speaker 7: get that through. I mean, I mean the bomb vigilanis

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Speaker 7: may come for them if they try to cut taxes

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Speaker 7: in that sort of form or fashion. And they're not

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Speaker 7: even talking about they're talking about at the margin, trying

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Speaker 7: to reduce some taxes, maybe extending some certain things.

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Speaker 5: I think the bomb margins.

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Speaker 8: The whole election has been a tax cut election.

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Speaker 7: Yeah, but I mean I don't think that's price. Just

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Speaker 7: like in twenty sixteen. Remember in twenty sixteen, nobody priced

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Speaker 7: that bond cut until December of seventeen when the Senate

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Speaker 7: actually passed it. I mean, the whole year is like,

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Speaker 7: there's never gonna happen. It's never gonna happen. I think

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Speaker 7: the markets are they always wait for the actual evidence

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Speaker 7: to actually trade those types of events, particularly when it

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Speaker 7: comes to Congress.

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Speaker 2: You said the most beneficial Trump with divanded government. Yeah,

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Speaker 2: can you explain that just a little bit more.

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Speaker 7: Well, I mean, the market's like uncertain, they don't want

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Speaker 7: one party in power. I do think that a Trump

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Speaker 7: we said this all along, Trump presidency is probably more

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Speaker 7: pro growth. Okay, maybe that's good for bonds. Harris would

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Speaker 7: be probably a little less growth, but probably better for bonds.

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Speaker 7: And that's been our general view even prior to the

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Speaker 7: last couple of weeks of things have kind of traded through.

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Speaker 7: Now at the margin is going to be dramatically better.

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Speaker 7: I mean, I don't know. The markets are very priced

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Speaker 7: a lot, right, you know what I'm saying, Like, that's

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Speaker 7: the problem. We've already priced a lot of good news.

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Speaker 7: And let's let's take a step back too. We're training

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Speaker 7: twenty almost twenty two times earnings. Okay, in twenty sixteen,

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Speaker 7: we were trading sixteen and a half times earning, So

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Speaker 7: you got five and a half multiple points of you

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Speaker 7: know how, we got to justify that no matter who

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Speaker 7: wins this selection. So we're just in a totally different

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Speaker 7: setup going into this election.

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Speaker 2: So at Giantenny VIANTNY Research was on the program early

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Speaker 2: this morning and essentially said to us Choppy wrote to

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Speaker 2: nowhere flat market into year end. You share that.

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Speaker 7: View, well, chopping meaning here could still be some big swings.

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Speaker 7: I mean, maybe we end up flat from here to there,

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Speaker 7: but there's going to be some big trading opportunities between

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Speaker 7: here and there. I think we could see six thousand potentially,

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Speaker 7: you know, in some sort of a clearing event that

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Speaker 7: isn't you know, there's.

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Speaker 5: Not a lot of consternation. People feel good about things.

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Speaker 7: But then I think it's really hard for us to

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Speaker 7: get past six six thousand, sixty one hundred in any

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Speaker 7: scenario because then you're, I mean, you're so stretched on value,

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Speaker 7: and I don't see growth accelerating in a kind of

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Speaker 7: way which would justify even higher multiples for twenty twenty five.

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Speaker 4: Can you explain what this clearing event for a month

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Speaker 4: looks like?

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Speaker 5: No? I can't.

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Speaker 4: Okay, all right, but the sense of what that could mean,

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Speaker 4: I mean, is it basically just whip sawing every single

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Speaker 4: day or is it basically that you see one trade

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Speaker 4: in particular that you could see really getting blown up

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Speaker 4: during that period of time.

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Speaker 7: Well, I could see many trades getting blown up, not

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Speaker 7: just because of the election, but because once again, we're

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Speaker 7: very stressed we're into the FOMO season, right people need

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Speaker 7: to perform the next two months.

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Speaker 5: There's a lot of things going on here.

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Speaker 7: And so what could I could see a blowoff move

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Speaker 7: of some kind post election, a clearing event, but then

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Speaker 7: reality sets in that we're gonna have to have some

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Speaker 7: kind of fiscal consolidation next year no matter who wins,

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Speaker 7: and my view, I think that has to happen, and

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Speaker 7: that you know, that's going to create uncertainty akein and

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Speaker 7: then positioning gets kind of whipped around. The other thing

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Speaker 7: that's going on is a mag seven which reported last

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Speaker 7: week was a very was a mixed bag.

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Speaker 5: What I was, we've been more procifical.

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Speaker 7: What I was worried about last week was that they

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Speaker 7: would come in with such great results they would suck

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Speaker 7: all the oxygen.

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Speaker 5: Out of the markets. Again. So that didn't happen.

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Speaker 7: But if we were to get a new theme, for example,

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Speaker 7: let's see a new theme pops up, I can guarantee

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Speaker 7: you this some money is going to flock to that

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Speaker 7: theme very quickly, because that's that's what that's what we

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Speaker 7: need right now. We need something to get excited about,

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Speaker 7: and we're kind of lacking in that.

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Speaker 5: We're kind of lacking that. But some people will happen.

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Speaker 7: In other words, the market will find something, a new

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Speaker 7: shiny toy, and we'll move to that shiny toy.

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Speaker 4: Right now, the FED is not the shiny toy. We

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Speaker 4: have barely mentioned the Fed's meeting on Thursday. How much

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Speaker 4: does that matter to this entire equation?

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Speaker 5: Isn't it Wednesday? Moved it back?

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Speaker 3: Yeah?

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Speaker 7: I know it's yeah, but I mean, but Wednesday. I mean,

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Speaker 7: they're meeting their meeting on Wednesday.

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Speaker 4: They're meeting on Wednesday, but we're still meeting.

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Speaker 7: They're gonna know what happened or think anyways, Yes, what

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Speaker 7: do I think?

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Speaker 5: I mean, they don't have any they don't have any

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Speaker 5: crystal ball. They don't.

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Speaker 7: I don't think the election is going to change their

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Speaker 7: decision making. So right now it's twenty five basis points.

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Speaker 5: Did they change years?

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Speaker 2: We look?

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Speaker 7: I mean, at the end of the day, the Fed's

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Speaker 7: on someone on an autopilot. Assuming we don't the economy does

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Speaker 7: take a really bad turn and they got to cut

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Speaker 7: bit more rapidly. I think that the trick for the

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Speaker 7: equity market is going to be what's their tone? The

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Speaker 7: dubbish tone or hawkish tone is it a hawkish cut

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Speaker 7: or is it a dubbish cut? And that, but that's

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Speaker 7: one or two percent, that's not a ten percent move

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Speaker 7: on the Fed. The Fed is kind of over here

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Speaker 7: now they're doing their thing. They made their decision. That

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Speaker 7: was that was September. That was a shining twenty September.

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Speaker 7: And now we've kind of got off of that and

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Speaker 7: now it's about earnings and then as we go in

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Speaker 7: a year, and it's going to be how the twenty

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Speaker 7: twenty five settle in for the economy for earnings growth

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Speaker 7: and where should multiples be based on how the equity

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Speaker 7: how the equity marks are interpreting the move in bond yields.

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Speaker 2: Looking forward to having that conversation with you, Mike. It's

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Speaker 2: going to say thank you, Mike Wilson of Molting Standard Cetermatic.

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Speaker 2: If newthe joins us now so more to talk about

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Speaker 2: the election and what it means a financial market cera.

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Speaker 2: What are you doing going against tomorrow? And I know

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Speaker 2: it's super short term, it's super tactical, but given why

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Speaker 2: this market has been how are you thinking about the

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Speaker 2: price sanction bey on Tuesday into Wednesday and through next week.

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Speaker 3: It's good to.

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Speaker 9: See you, Jonathan, Well, the stakes are high this week

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Speaker 9: for three reasons, and that's the FED earnings and the elections.

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Speaker 9: So let's start with the two perhaps more certain ones

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Speaker 9: for the market. For the Fed, we expect twenty five

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Speaker 9: basis points, even with that twelve thousand payrolls that we

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Speaker 9: saw on Friday. Earnings have been strong. There's optimism there.

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Speaker 9: Estimates did come down going into earning seasons, but we

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Speaker 9: are growing at about four to five percent year over

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Speaker 9: year at about three quarters of companies are beating earnings. Now,

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Speaker 9: going to an election, I think we're going to see

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Speaker 9: caution with the markets more of a defensive trade. First

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Speaker 9: of all, markets don't like uncertainty, and we keep talking

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Speaker 9: about which candidate will win, but we also need to

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Speaker 9: talk about when will the candidate win. I think there's

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Speaker 9: a reasonably high chance that we have a contested election

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Speaker 9: and we don't have an answer to who our next

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Speaker 9: president is for days and perhaps weeks. In the year

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Speaker 9: two thousand, it took twenty four trading days to decide

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Speaker 9: who our president was going to be, and the markets

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Speaker 9: were down about four to five percent during that period.

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Speaker 8: What kind of market volatility could we see if that

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Speaker 8: happens this time around.

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Speaker 9: But I think first of all, the markets have been

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Speaker 9: starting to pre price in Trump winning, so we're seeing

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Speaker 9: today a bit of that unwinding because of that poll

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Speaker 9: that came out of Iowa.

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Speaker 10: So markets have started to prices in.

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Speaker 9: This is unlike twenty sixteen where markets were surprised by

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Speaker 9: his win. So we're seeing that start to unwind a

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Speaker 9: little bit. And then I think the issue of who

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Speaker 9: will win is going to cause the markets to just

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Speaker 9: go into more of a defensive mode.

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Speaker 10: We're also in a different period. Today.

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Speaker 9: SMP five hundred valuations are at the third highest level

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Speaker 9: since the year nineteen ninety nine. So nineteen ninety nine

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Speaker 9: we had a SMP five hundred valuation higher than today,

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Speaker 9: and in twenty twenty one we did, and we know

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Speaker 9: how both of those periods ended. So this is not

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Speaker 9: a cheap market that's going into quite a bit of

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Speaker 9: uncertainty over the next few.

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Speaker 10: Days and weeks.

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Speaker 8: You mentioned the DESMOI Iowa poll. What do you make

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Speaker 8: of that and it's impact on financial markets. There's been

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Speaker 8: no data, just this one poll coming out of a

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Speaker 8: state that many view as solid red.

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Speaker 9: Well, markets keep trying to trade off of the polls,

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Speaker 9: and as you've seen, they've been very tight, and there's

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Speaker 9: a lot of uncertainty around poles, which markets have learned

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Speaker 9: the hard way in recent presidential cycles. So I think

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Speaker 9: it's just very challenging at this point. I think what

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Speaker 9: we can assume is the race will be tight. There

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Speaker 9: may be disagreement over who wins the race. There could

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Speaker 9: be a delay in figuring that out. That's going to

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Speaker 9: bring a period of days or weeks of uncertainty. But

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Speaker 9: eventually markets are going to move on from the election

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Speaker 9: and are going to focus on two things for the

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Speaker 9: next president, taxes and tariffs and what do those mean

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Speaker 9: for the economies.

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Speaker 10: We heard a bit about that from the prior guests

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Speaker 10: he was on. So markets will eventually move back to fundamentals.

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Speaker 9: So that's why you know, I would say, even though

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Speaker 9: we're cautious going into the next few days and weeks,

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Speaker 9: over the long term, we will be focusing more on

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Speaker 9: earning's growth and really what's going to drive this economy

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Speaker 9: going forward, which will be employment, the consumer and inflation issues.

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Speaker 4: That's the earning side, that's the equity side. You say,

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Speaker 4: back to fundamentals, and it raises this question the new normal.

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Speaker 4: Is it with bonds as a ballast or is it

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Speaker 4: with bonds as a risk asset. And that's a real

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Speaker 4: question because so far in this period of uncertainty, bonds

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Speaker 4: have actually been the center of the volatility and expected

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Speaker 4: volatility going forward. Is that the new normal we can

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Speaker 4: expect after the election, all.

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Speaker 9: We've seen rates back up in credit, and that's because

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Speaker 9: people are looking at FED rate cuts and assuming they're

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Speaker 9: going to be less than what we'd hope for.

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Speaker 10: The economy remains strong, and that's caused fixed income.

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Speaker 3: To struggle a little bit.

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Speaker 9: But we think this is a period where areas of

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Speaker 9: fixed income where fundamentals are strong, like municipal bonds, where

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Speaker 9: state rainy day funds are very strong and their saving

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Speaker 9: rates are high, this is where you can start to

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Speaker 9: lock in yields. There is a lot of cash sitting

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Speaker 9: on the sidelines, and we expect rates to go down

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Speaker 9: for cash flowing for so your return.

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Speaker 10: Is going to deteriorate.

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Speaker 9: You can take incrementally a little bit more risk and

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Speaker 9: start legging into bonds and locking in some yields at

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Speaker 9: this point.

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Speaker 10: In the areas that are strong, such as.

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Speaker 4: Municipal bonds, you said that stock seem expensive at a

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Speaker 4: point of such uncertainty. Don't bond seem pretty expensive too.

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Speaker 4: I'm talking on the credit side, some other risk. Your side, well,

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Speaker 4: I think it's challenging.

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Speaker 9: We're not looking to take more duration at this point

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Speaker 9: because of what's going on with the economy and also

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Speaker 9: our forecast for we think that the tenure got a

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Speaker 9: little bit too optimistic on the downside, and now I

451
00:19:52,000 --> 00:19:54,080
Speaker 9: think it's a little bit over four percent is a

452
00:19:54,080 --> 00:19:56,640
Speaker 9: little bit too negative in that sense in terms of

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00:19:56,840 --> 00:19:58,680
Speaker 9: where and go. We see that trading in a range,

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Speaker 9: so we're not taking on more duration. We're looking for

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Speaker 9: those areas with strong fundamentals. I mentioned municipal bonds also

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Speaker 9: preferred securities with the backings of banks, so you need

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Speaker 9: to be selective there. But there are areas where you

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Speaker 9: can leg out of captional leg in and lock in

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Speaker 9: some strong meals at this.

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Speaker 2: Point, Sarah, I always appreciate you catching up with you.

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Speaker 2: Just one final word on single names. You usually offer

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Speaker 2: some stocks. What are the ones you like right now?

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Speaker 2: Given everything you've just.

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Speaker 10: Said, I'll be watching closely today.

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Speaker 9: You know, we're not huge, I'm not usually bullish on it,

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Speaker 9: but looking at Mary Up.

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Speaker 10: Today's just to get a glimpse into the consumer.

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Speaker 9: And spending on travel, watching for corporate travel and how

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Speaker 9: much room growth they can grow next year.

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Speaker 10: I think that they're going.

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Speaker 9: To report before the open and they're going to give

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Speaker 9: us a good view into what's going on with the

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Speaker 9: consumer and travel.

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Speaker 2: Sarah, I appreciate it. It's good to see you as always,

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Speaker 2: Sarah moutcare of New Vein. Thank you. This is the

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Speaker 2: Bloomberg Surveillance podcast, bringing you the best in markets, economics, angiopolitics.

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00:20:50,960 --> 00:20:53,440
Speaker 2: You can watch the show live on Bloomberg TV weekday

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00:20:53,480 --> 00:20:56,720
Speaker 2: mornings from six am to nine am Eastern. Subscribe to

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00:20:56,720 --> 00:20:59,920
Speaker 2: the podcast on Apple, Spotify, or anywhere else you listen,

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00:21:00,240 --> 00:21:02,840
Speaker 2: and as always, on the Bloomberg Terminal and the Bloomberg

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Speaker 2: Business Out