1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,880 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:28,000 Speaker 1: us live on YouTube's a thrill. 6 00:00:28,080 --> 00:00:31,520 Speaker 2: They have been laidler with us over the years, with 7 00:00:32,520 --> 00:00:36,559 Speaker 2: HSBC and others, now with Bradesco BBI, adding equity strategy 8 00:00:36,640 --> 00:00:39,320 Speaker 2: value each and every day. Ben, I just did the 9 00:00:39,360 --> 00:00:41,760 Speaker 2: math here. I can do this off the Bloomberg Professional 10 00:00:41,840 --> 00:00:46,760 Speaker 2: Service seventeen point five percent per year from Christmas Eve 11 00:00:47,520 --> 00:00:51,600 Speaker 2: twenty eighteen. I think a Gartman on gold in Yen. 12 00:00:52,440 --> 00:00:56,800 Speaker 2: There's Ladler on get into the market now Christmas Eve 13 00:00:56,880 --> 00:01:01,200 Speaker 2: of twenty eighteen. Recapitulate that calm now, Are you as 14 00:01:01,320 --> 00:01:04,080 Speaker 2: bullish now as you were then? Or is there a 15 00:01:04,160 --> 00:01:05,680 Speaker 2: different cast to it? 16 00:01:06,720 --> 00:01:10,800 Speaker 3: Definitely bullish equities, just maybe less bullish US equities. I mean, 17 00:01:10,840 --> 00:01:13,720 Speaker 3: obviously it's been a sort of juggernaut since then. We've 18 00:01:13,760 --> 00:01:16,000 Speaker 3: just had a twenty percent reminder in the last couple 19 00:01:16,040 --> 00:01:19,520 Speaker 3: of months of why you shouldn't bet against US equities. 20 00:01:19,520 --> 00:01:21,080 Speaker 3: But I do think this bill market is sort of 21 00:01:21,080 --> 00:01:23,959 Speaker 3: broadening out. I do think the sort of genies out 22 00:01:24,000 --> 00:01:25,760 Speaker 3: of the bottle a little bit this year, we got 23 00:01:25,880 --> 00:01:29,320 Speaker 3: very crowded on sort of how big US was positioning, 24 00:01:29,360 --> 00:01:32,440 Speaker 3: got very crowded. I think that was the what drove 25 00:01:32,560 --> 00:01:34,440 Speaker 3: US a little bit into this cell off we had, 26 00:01:34,440 --> 00:01:36,160 Speaker 3: and I think the rest of the world now now 27 00:01:36,200 --> 00:01:37,520 Speaker 3: gets a bit of a look in. I think this 28 00:01:37,560 --> 00:01:40,120 Speaker 3: is the healthy broadening. You have a double discount in 29 00:01:40,160 --> 00:01:44,240 Speaker 3: the rest of the world, cheap currencies, cheaper cheap equity evaluations, 30 00:01:44,440 --> 00:01:48,160 Speaker 3: and you know, some some positive policy, whether that's fiscal 31 00:01:48,200 --> 00:01:50,000 Speaker 3: stimulus out of China or Germany. 32 00:01:50,000 --> 00:01:51,120 Speaker 4: So bullish on equities. 33 00:01:51,120 --> 00:01:54,960 Speaker 3: I'm looking for a more average US return from here, 34 00:01:55,160 --> 00:01:56,680 Speaker 3: but stronger returns in the. 35 00:01:56,600 --> 00:01:57,160 Speaker 4: Rest of the world. 36 00:01:57,320 --> 00:01:59,440 Speaker 5: So we did see that move, as you mentioned, into 37 00:01:59,440 --> 00:02:01,600 Speaker 5: the rest of the world earlier this year out of 38 00:02:01,600 --> 00:02:04,760 Speaker 5: the US. My question is, was that a short term trade, 39 00:02:04,760 --> 00:02:06,800 Speaker 5: the smart money just trying to be smart, or is 40 00:02:06,840 --> 00:02:07,920 Speaker 5: that something different? 41 00:02:07,960 --> 00:02:10,480 Speaker 3: Do you think, well, you certainly have history against you 42 00:02:10,520 --> 00:02:11,880 Speaker 3: on that trade. I mean, the rest of the world's 43 00:02:11,919 --> 00:02:14,120 Speaker 3: underperformed for fifteen years. So I feel like I'm standing 44 00:02:14,160 --> 00:02:17,600 Speaker 3: in front of this sort of US freight train, you know, 45 00:02:17,680 --> 00:02:20,160 Speaker 3: But these things do move in cycles. And I do 46 00:02:20,280 --> 00:02:22,520 Speaker 3: just think that the genie is out of the bottle 47 00:02:22,560 --> 00:02:24,119 Speaker 3: a little bit on the US. I mean, the US 48 00:02:24,240 --> 00:02:26,880 Speaker 3: is sixty five percent of global equities, It's twenty five 49 00:02:26,919 --> 00:02:28,000 Speaker 3: percent of global GDP. 50 00:02:28,800 --> 00:02:30,800 Speaker 4: You know, I do a lot of Latin right, latam 51 00:02:30,880 --> 00:02:33,400 Speaker 4: seven percent of global GDP. 52 00:02:33,480 --> 00:02:36,440 Speaker 3: It's seventy basis points of global market cap, right, And 53 00:02:36,480 --> 00:02:39,200 Speaker 3: you have that narrative in the rest of the world. 54 00:02:39,240 --> 00:02:40,560 Speaker 3: So I do think a little bit of love goes 55 00:02:40,600 --> 00:02:43,080 Speaker 3: a very long way. You do have this double currency 56 00:02:43,160 --> 00:02:47,640 Speaker 3: and an equity discount, and I don't need to be 57 00:02:47,720 --> 00:02:49,600 Speaker 3: very right, and I do just think that, you know, 58 00:02:49,639 --> 00:02:51,080 Speaker 3: the cell off we've had in the US is at 59 00:02:51,120 --> 00:02:54,200 Speaker 3: least sensitized people to the risks they're running in the 60 00:02:54,320 --> 00:02:56,680 Speaker 3: US on twenty times earning sixty five percent of global 61 00:02:56,760 --> 00:02:58,560 Speaker 3: market cap, and I think you get a little bit 62 00:02:58,560 --> 00:03:00,639 Speaker 3: of reallocation to the rest of the world regard wardless. 63 00:03:00,480 --> 00:03:03,079 Speaker 5: You mentioned Latham, I know, and you're previously if you 64 00:03:03,120 --> 00:03:05,880 Speaker 5: spent a lot of time looking at the Latin American market, 65 00:03:06,360 --> 00:03:09,320 Speaker 5: where do you see opportunities today in Latin America. 66 00:03:10,400 --> 00:03:11,959 Speaker 4: So Brazil's the cheapest market in the world. 67 00:03:12,160 --> 00:03:13,680 Speaker 5: Brazil is the cheapest thing. 68 00:03:13,639 --> 00:03:16,919 Speaker 3: Anyway, you were looking at dividend yield eight times pe 69 00:03:17,560 --> 00:03:18,239 Speaker 3: highest real. 70 00:03:18,120 --> 00:03:20,600 Speaker 4: Interest rates in the world. As I say, a. 71 00:03:20,600 --> 00:03:25,040 Speaker 3: Fraction the size of sort of of GDP, a little 72 00:03:25,080 --> 00:03:26,720 Speaker 3: bit of reallocation goes a very long way. 73 00:03:27,200 --> 00:03:29,960 Speaker 4: Is a value TP well, it certainly has been for 74 00:03:30,000 --> 00:03:30,520 Speaker 4: a long time. 75 00:03:30,639 --> 00:03:33,680 Speaker 3: I think again, we're about to get maybe rate cuts 76 00:03:33,680 --> 00:03:35,160 Speaker 3: coming in Brazil at the end of the year, which 77 00:03:35,200 --> 00:03:36,960 Speaker 3: I think will begin to bring those real rates down, 78 00:03:37,040 --> 00:03:39,920 Speaker 3: allow those P multiples to rise, and I think more 79 00:03:39,920 --> 00:03:43,240 Speaker 3: broadly across Brazil, across emerging markets, there are no tourists 80 00:03:43,320 --> 00:03:46,240 Speaker 3: left right, There's no one out there telling you that you. 81 00:03:46,200 --> 00:03:47,880 Speaker 4: Know, this has been a great place to be. 82 00:03:49,160 --> 00:03:52,480 Speaker 3: So again I think a little bit of reallocation and 83 00:03:53,000 --> 00:03:55,240 Speaker 3: these asset class that people have forgotten about for fifteen 84 00:03:55,280 --> 00:03:56,520 Speaker 3: years could to come back. 85 00:03:56,680 --> 00:04:00,560 Speaker 2: The magic of your career then is an incredible respect. 86 00:04:01,240 --> 00:04:05,960 Speaker 2: The corporations are just life goes on. I want you 87 00:04:06,000 --> 00:04:11,760 Speaker 2: to discuss the onslaught of market timing. Go to cash 88 00:04:12,040 --> 00:04:16,760 Speaker 2: opinionated punditry that our listeners and viewers here each and 89 00:04:16,920 --> 00:04:21,360 Speaker 2: every day they're overwhelmed with do this, do that, and 90 00:04:21,400 --> 00:04:25,800 Speaker 2: you just say shut up and believe in capitalism. 91 00:04:24,960 --> 00:04:26,480 Speaker 4: So turn the radio off and do nothing. 92 00:04:26,520 --> 00:04:28,920 Speaker 6: No, we know that's not the way we were all here, 93 00:04:30,279 --> 00:04:32,960 Speaker 6: but yes, there's definitely advantage sitting in your hands are 94 00:04:32,960 --> 00:04:35,640 Speaker 6: doing nothing, And I don't want to, you know, I 95 00:04:35,680 --> 00:04:37,039 Speaker 6: don't want to be down on the US here. 96 00:04:37,080 --> 00:04:39,159 Speaker 3: I mean, this is not an anti US trade. This 97 00:04:39,320 --> 00:04:42,919 Speaker 3: is just more average double digit US returns, not the 98 00:04:43,640 --> 00:04:46,360 Speaker 3: you know this juggern order of riskless feeling riskless twenty 99 00:04:46,360 --> 00:04:49,839 Speaker 3: percent a year. You know, Tech just delivered three times 100 00:04:49,880 --> 00:04:51,520 Speaker 3: the earnings going through the S and P five hundred 101 00:04:52,440 --> 00:04:55,800 Speaker 3: on twenty five thirty times earnings. That seems pretty good 102 00:04:55,800 --> 00:04:58,919 Speaker 3: to me. Can it get dramatically more than that? You know, no, 103 00:04:59,040 --> 00:05:02,400 Speaker 3: maybe not, But I certainly wouldn't want to be betting 104 00:05:02,440 --> 00:05:02,880 Speaker 3: against that. 105 00:05:03,000 --> 00:05:04,600 Speaker 4: And you've just had that in the last quarter. 106 00:05:04,880 --> 00:05:07,320 Speaker 5: Well we've had I mean since most of our listeners 107 00:05:07,320 --> 00:05:10,520 Speaker 5: and viewers can remember, Tech has been the narrative of 108 00:05:10,560 --> 00:05:11,760 Speaker 5: the US stock market. 109 00:05:11,800 --> 00:05:12,520 Speaker 4: Is that still the case? 110 00:05:12,560 --> 00:05:12,960 Speaker 5: Do you think? 111 00:05:14,160 --> 00:05:17,760 Speaker 4: I think so? As I say they're delivering the goods. 112 00:05:17,800 --> 00:05:19,680 Speaker 3: You have three times the earnings going through anyone else 113 00:05:19,720 --> 00:05:22,080 Speaker 3: the S and P five hundred evaluations of de rated 114 00:05:22,760 --> 00:05:24,719 Speaker 3: you know you're not paying three times the multiple the 115 00:05:24,800 --> 00:05:26,599 Speaker 3: s and P five hundred for these stocks, so I 116 00:05:26,640 --> 00:05:27,760 Speaker 3: can absolutely. 117 00:05:27,360 --> 00:05:28,440 Speaker 4: Make the case for owning them. 118 00:05:28,560 --> 00:05:31,320 Speaker 3: I'm just arguing that you're not going to get the 119 00:05:31,360 --> 00:05:33,760 Speaker 3: degree of our performance that you've had in recent years, 120 00:05:34,040 --> 00:05:36,560 Speaker 3: and that gives the rest of the world and other sectors, 121 00:05:36,680 --> 00:05:38,960 Speaker 3: you know, maybe a look in that they haven't had. 122 00:05:39,240 --> 00:05:42,360 Speaker 2: Were welcome all of you acrassination and an eventful Monday. 123 00:05:42,440 --> 00:05:45,200 Speaker 2: Futures are eight right now, futures of forty if I 124 00:05:45,240 --> 00:05:48,520 Speaker 2: have a constructive tape here into the Key inflation report 125 00:05:48,800 --> 00:05:52,120 Speaker 2: and Wednesday in the less than an hour, a conversation 126 00:05:52,279 --> 00:05:57,200 Speaker 2: an extended conversation with Andrew Cromo, the former governor of 127 00:05:57,279 --> 00:06:00,479 Speaker 2: the Empire State. He has chosen to run from mayor. 128 00:06:00,520 --> 00:06:04,240 Speaker 2: We've been interviewing the different may world candidates and this 129 00:06:05,000 --> 00:06:09,799 Speaker 2: really heated primary of the Democratic Party towards the November 130 00:06:09,880 --> 00:06:13,880 Speaker 2: for election. We'll do that here in about fifty minutes. 131 00:06:13,920 --> 00:06:18,680 Speaker 2: Ben Laidler with us here with Bradesco BBI. We welcome 132 00:06:18,760 --> 00:06:21,799 Speaker 2: all of you across the nation. Serious ExM Apple car play, 133 00:06:22,520 --> 00:06:23,680 Speaker 2: it's Apple day to day. 134 00:06:24,279 --> 00:06:28,280 Speaker 5: Sure there sleep this week now he's out, he's all set. 135 00:06:29,160 --> 00:06:31,719 Speaker 2: Ye, there's Apple day to day and all the busy 136 00:06:31,760 --> 00:06:33,040 Speaker 2: week ahead. Pump yep. 137 00:06:33,080 --> 00:06:36,960 Speaker 5: So absolutely, ben, So, how do we think about just 138 00:06:37,240 --> 00:06:39,640 Speaker 5: valuation in this market? Here in the US? We've had 139 00:06:39,640 --> 00:06:43,520 Speaker 5: this boy, yeah, a big twenty percent decline. We've retraced 140 00:06:43,720 --> 00:06:46,200 Speaker 5: most of that here. Yes, we had a good first 141 00:06:46,279 --> 00:06:49,120 Speaker 5: quarter earnings, but earnings estimates for twenty twenty five have 142 00:06:49,200 --> 00:06:52,919 Speaker 5: come down. Is this an expensive market? Once again? 143 00:06:54,760 --> 00:06:56,400 Speaker 3: I have no problem with these multiples, I guess I 144 00:06:56,440 --> 00:06:58,880 Speaker 3: have a problem arguing though they're gonna got a lot higher. Okay, 145 00:06:59,000 --> 00:07:01,960 Speaker 3: you are on twenty one times earnings, that's still above 146 00:07:02,400 --> 00:07:04,920 Speaker 3: short and long term averages. It's still the most expensive 147 00:07:04,920 --> 00:07:07,600 Speaker 3: market in the world. I think that's justified by these 148 00:07:07,640 --> 00:07:11,040 Speaker 3: double digit earnings numbers. I have a trouble problem arguing 149 00:07:11,040 --> 00:07:12,680 Speaker 3: that it's going to be dramatically higher than that, which 150 00:07:12,720 --> 00:07:15,000 Speaker 3: is why I say, you know, US is fine, but 151 00:07:15,040 --> 00:07:17,280 Speaker 3: it's well, you know, we're looking at a more average 152 00:07:17,320 --> 00:07:19,239 Speaker 3: sort of ten percent return, which. 153 00:07:19,080 --> 00:07:21,400 Speaker 4: Feels terrible when we got used to twenty. But you know, 154 00:07:21,520 --> 00:07:22,320 Speaker 4: it's actually fine. 155 00:07:22,600 --> 00:07:25,600 Speaker 2: It's got Cronner emails in from City Group right now. 156 00:07:25,640 --> 00:07:27,880 Speaker 2: He's got it with his MIDI it's mid year. It's 157 00:07:27,880 --> 00:07:32,280 Speaker 2: not American. How is Krunner doing mid year here doesn't 158 00:07:32,320 --> 00:07:36,680 Speaker 2: feel like mid year. Definitely, Ben Ladlor pc he goes up, 159 00:07:36,680 --> 00:07:40,240 Speaker 2: they go to sixty three hundred and SPX with a 160 00:07:40,280 --> 00:07:44,160 Speaker 2: mid twenty six first take of a below Ladler sixty 161 00:07:44,160 --> 00:07:47,480 Speaker 2: five hundred. I am afraid to ask Ben Laydlor middle 162 00:07:47,520 --> 00:07:50,320 Speaker 2: of next year, where is your SPX? Can you give 163 00:07:50,320 --> 00:07:51,400 Speaker 2: me a seven thousand? 164 00:07:52,640 --> 00:07:54,520 Speaker 3: I think we can have reasonably close what's that? That's 165 00:07:54,640 --> 00:07:57,119 Speaker 3: you know, fifteen ten to fifty percent from here again, 166 00:07:57,360 --> 00:07:59,400 Speaker 3: I think we're going back to average. Average is good, 167 00:07:59,440 --> 00:07:59,840 Speaker 3: It's just. 168 00:07:59,840 --> 00:08:01,840 Speaker 4: Not what we've got used to, the last couple of years. 169 00:08:02,200 --> 00:08:04,200 Speaker 5: Ben talk to us about the earnings out there, because 170 00:08:04,200 --> 00:08:06,200 Speaker 5: I feel like the Fed's not going to do a 171 00:08:06,200 --> 00:08:08,440 Speaker 5: whole lot for us, maybe one or two rate cuts 172 00:08:08,440 --> 00:08:12,360 Speaker 5: in the foreseeable future. So I think I need earnings 173 00:08:12,400 --> 00:08:15,640 Speaker 5: to really move this market higher. Seven percent earning growth 174 00:08:15,760 --> 00:08:18,520 Speaker 5: this year, maybe eleven twelve percent next year. Are those 175 00:08:18,600 --> 00:08:20,560 Speaker 5: numbers solid or do you think there's risk to those 176 00:08:20,600 --> 00:08:21,760 Speaker 5: numbers or maybe even upside. 177 00:08:21,760 --> 00:08:22,120 Speaker 2: I don't know. 178 00:08:23,040 --> 00:08:25,240 Speaker 3: Yeah, I think they're reasonably solid, right. I think what 179 00:08:25,240 --> 00:08:28,000 Speaker 3: we've lived through is this recession scare. I don't think 180 00:08:28,000 --> 00:08:29,760 Speaker 3: we're going to get a recession. I do think we're 181 00:08:29,760 --> 00:08:32,760 Speaker 3: going to get more pedestrian growth. But to Tom's earlier point, 182 00:08:32,840 --> 00:08:36,000 Speaker 3: you know the survivorship bias here. The stocks that we're 183 00:08:36,000 --> 00:08:38,960 Speaker 3: looking at are the best in class. They are global. 184 00:08:39,240 --> 00:08:41,840 Speaker 3: There's a reason why, you know, year after year they've 185 00:08:41,840 --> 00:08:43,080 Speaker 3: been able to push up margins. 186 00:08:43,080 --> 00:08:46,280 Speaker 4: They're just very good at what they do. So I 187 00:08:46,280 --> 00:08:46,880 Speaker 4: wouldn't want to. 188 00:08:46,880 --> 00:08:51,040 Speaker 3: Get better against corporate America. I think sort of normalize growth. 189 00:08:51,040 --> 00:08:51,640 Speaker 4: They're going to be out. 190 00:08:51,640 --> 00:08:55,439 Speaker 2: A doctor s out on live chat and YouTube. Thank 191 00:08:55,480 --> 00:08:58,400 Speaker 2: you for the live chat and YouTube. Really smart. Subscribe 192 00:08:58,400 --> 00:09:02,360 Speaker 2: to Bloomberg podcasts. There to Ben Laydler, he says, look, 193 00:09:02,400 --> 00:09:06,320 Speaker 2: anything over thirteen times is expensive. When we buy a 194 00:09:06,440 --> 00:09:10,640 Speaker 2: twenty eight times Apple or whatever, are are we just 195 00:09:10,800 --> 00:09:15,320 Speaker 2: rationalizing out the terminal value out farther where we're saying 196 00:09:15,640 --> 00:09:18,079 Speaker 2: we're willing to own Apple and we really don't care 197 00:09:18,120 --> 00:09:20,840 Speaker 2: about the next twenty four months. We're buying it for 198 00:09:20,880 --> 00:09:22,200 Speaker 2: twenty twenty eight. 199 00:09:23,880 --> 00:09:25,760 Speaker 3: As I say, forget about the future. Just look at 200 00:09:25,760 --> 00:09:27,679 Speaker 3: what you've delivered in the last quarter. Three times the 201 00:09:27,720 --> 00:09:29,600 Speaker 3: earnings go with the S and P five hundred. 202 00:09:29,240 --> 00:09:32,640 Speaker 2: Only two times earnings versus eight ish as the numbers 203 00:09:32,640 --> 00:09:33,720 Speaker 2: were working. It is amazing. 204 00:09:35,360 --> 00:09:38,440 Speaker 3: I think you can justify current valuations. I'm not sure 205 00:09:38,440 --> 00:09:40,320 Speaker 3: you can justify much higher, which I guess is my 206 00:09:40,360 --> 00:09:43,120 Speaker 3: point for a more average US return. I totally agree 207 00:09:43,160 --> 00:09:44,960 Speaker 3: on the thirteen times. Thirteen times is what you pay 208 00:09:44,960 --> 00:09:46,679 Speaker 3: for the rest of the world. That's why I'm sort 209 00:09:46,679 --> 00:09:49,120 Speaker 3: of bullish on the rest of the world. Again, you know, 210 00:09:49,160 --> 00:09:51,080 Speaker 3: a little bit of a little bit of love goes 211 00:09:51,120 --> 00:09:53,080 Speaker 3: a very long way. Maybe you just need a little 212 00:09:53,080 --> 00:09:55,480 Speaker 3: bit less bad news and you get the valuation rewriting. 213 00:09:55,600 --> 00:09:58,400 Speaker 3: You've already had that valuation rewriting in the US. To 214 00:09:58,440 --> 00:10:00,520 Speaker 3: your point, you need earnings to keep delivering. I think 215 00:10:00,520 --> 00:10:02,280 Speaker 3: they are. But you know, how do you get more 216 00:10:02,360 --> 00:10:04,800 Speaker 3: upside in the US when valuations are high? In earning 217 00:10:04,880 --> 00:10:06,040 Speaker 3: so already resonably high. 218 00:10:06,600 --> 00:10:09,199 Speaker 5: What screens well for you guys this year? I mean 219 00:10:09,600 --> 00:10:11,719 Speaker 5: that probably has changed two or three times this year. 220 00:10:11,760 --> 00:10:14,440 Speaker 5: Given we've had we started the unership level, we sold 221 00:10:14,440 --> 00:10:17,880 Speaker 5: off twenty percent, we've regained most of that. What's screens 222 00:10:17,880 --> 00:10:18,880 Speaker 5: well for you guys these days? 223 00:10:20,200 --> 00:10:21,640 Speaker 3: Again, the rest of the world I think is where 224 00:10:21,679 --> 00:10:24,600 Speaker 3: you get the risk reward. Okay, growth is firming up. 225 00:10:24,720 --> 00:10:27,280 Speaker 3: Interest rates have been cut you're getting some fiscal stimulus, 226 00:10:27,760 --> 00:10:30,559 Speaker 3: and again you're pushing on an open door because currencies 227 00:10:30,600 --> 00:10:33,280 Speaker 3: are cheap and valuations are cheat and you're getting again, 228 00:10:33,320 --> 00:10:34,920 Speaker 3: you don't need a lot of money coming out of 229 00:10:34,960 --> 00:10:37,680 Speaker 3: the US because the US has just got so supersized. 230 00:10:38,000 --> 00:10:39,679 Speaker 3: These other markets have got so small, you know, a 231 00:10:39,679 --> 00:10:42,040 Speaker 3: little bit of ferry dust. And I think that's the 232 00:10:42,120 --> 00:10:45,319 Speaker 3: driver of this of this rest of the world out performance. 233 00:10:45,360 --> 00:10:47,320 Speaker 3: And again I only need to be half right there. 234 00:10:47,640 --> 00:10:50,120 Speaker 3: I'm not betting against the US. I'm just arguing it's 235 00:10:50,120 --> 00:10:52,240 Speaker 3: a more average ten percent environment to. 236 00:10:52,200 --> 00:10:55,120 Speaker 2: Finish ben And this goes to your parchment from London 237 00:10:55,160 --> 00:10:58,760 Speaker 2: School of Economics and under the University of Cambridge. I 238 00:10:58,800 --> 00:11:02,080 Speaker 2: think all of our listeners and viewers in America look 239 00:11:02,120 --> 00:11:05,199 Speaker 2: at the cacophony of the United Kingdom right now and 240 00:11:05,240 --> 00:11:09,760 Speaker 2: go what I'm talking about in newspapers. They can't fund 241 00:11:09,800 --> 00:11:13,040 Speaker 2: the police. A week ago, ten days ago, it was 242 00:11:13,160 --> 00:11:19,080 Speaker 2: migrants across the Channel. The election dynamics of labor reform 243 00:11:19,280 --> 00:11:21,880 Speaker 2: in the United Kingdom is there is there a point 244 00:11:21,920 --> 00:11:25,480 Speaker 2: out there to get to to some form of economic 245 00:11:26,000 --> 00:11:28,920 Speaker 2: post Brexits stability and growth. 246 00:11:30,160 --> 00:11:31,520 Speaker 4: Got a big question. I'm not going to do this 247 00:11:31,679 --> 00:11:34,800 Speaker 4: justice in thirty seconds. I don't know. At least the sunshines. 248 00:11:34,920 --> 00:11:39,360 Speaker 3: No, I don't know, it's at least it's priced for that. 249 00:11:39,760 --> 00:11:43,079 Speaker 3: I guess it is my point. You know, the trouble 250 00:11:43,080 --> 00:11:45,480 Speaker 3: in the UK is UK stocks have really know you 251 00:11:45,559 --> 00:11:48,640 Speaker 3: do the UK Seventy percent of UK stock market revenues 252 00:11:48,640 --> 00:11:50,480 Speaker 3: come from outside the UK, so in some ways UK 253 00:11:50,600 --> 00:11:53,080 Speaker 3: companies are sort of voted with their feet a long 254 00:11:53,080 --> 00:11:56,480 Speaker 3: time ago, and you know plays on the rest of 255 00:11:56,520 --> 00:11:56,800 Speaker 3: the world. 256 00:11:56,840 --> 00:11:59,960 Speaker 4: But my broader point, if you are on eleven twelve. 257 00:11:59,760 --> 00:12:03,160 Speaker 3: Times earnings, which is what UK stocks are, you don't 258 00:12:03,200 --> 00:12:06,440 Speaker 3: need good news. You just need a little bit less 259 00:12:06,440 --> 00:12:08,000 Speaker 3: bad news and I will be down in the UK. 260 00:12:08,120 --> 00:12:10,280 Speaker 3: But I think that's probably the narrative. You know, everybody 261 00:12:10,520 --> 00:12:12,880 Speaker 3: is negative on the UK emerging market. I mean the 262 00:12:12,920 --> 00:12:15,360 Speaker 3: same thing is internationally. I think that is just a 263 00:12:15,400 --> 00:12:18,560 Speaker 3: broader narrative. We just end up with a little bit 264 00:12:18,640 --> 00:12:19,280 Speaker 3: less find news. 265 00:12:19,320 --> 00:12:22,000 Speaker 2: Things very right, Ben Laylor, we don't care. The only 266 00:12:22,040 --> 00:12:25,240 Speaker 2: reason you're here is a transition from clay to grass. 267 00:12:25,480 --> 00:12:28,439 Speaker 2: Can Coco do as well at Wimbledon as she did 268 00:12:28,440 --> 00:12:29,280 Speaker 2: at the French Open. 269 00:12:29,880 --> 00:12:33,680 Speaker 7: We're talking cricket here, No, we don't do cricket. I 270 00:12:33,720 --> 00:12:36,959 Speaker 7: tried cricket with Johan writing eight years ago. No, the tenants, 271 00:12:36,960 --> 00:12:39,400 Speaker 7: I mean it was it was really exciting to see 272 00:12:39,440 --> 00:12:43,880 Speaker 7: Coco take take Roland girls some sports in the UK. 273 00:12:44,080 --> 00:12:45,920 Speaker 7: That's something you definitely don't want to bet against. 274 00:12:46,000 --> 00:12:50,080 Speaker 2: Okay, Ben Laylor, this is a joking being studio more often. Yeah, 275 00:12:50,120 --> 00:12:53,360 Speaker 2: you know, talk about over how often do you get 276 00:12:53,400 --> 00:12:55,319 Speaker 2: to Brazil for Bradesca. 277 00:12:55,240 --> 00:12:57,480 Speaker 4: Once a quarter, once a quarter every term nation? 278 00:12:57,920 --> 00:13:00,800 Speaker 2: Really interesting, Ben Laylor, thank you, thank you so much. 279 00:13:00,880 --> 00:13:03,440 Speaker 2: Really one of the iconic calls in the history of 280 00:13:03,480 --> 00:13:08,160 Speaker 2: Bloomberg Surveillance. On a lonely December twenty fourth of twenty eighteen, 281 00:13:08,240 --> 00:13:13,120 Speaker 2: he whispered Tom by America, Ben Layler, thank you so much. 282 00:13:19,000 --> 00:13:22,600 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 283 00:13:22,640 --> 00:13:25,800 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 284 00:13:25,880 --> 00:13:29,560 Speaker 1: Applecarplay and Android Atto with the Bloomberg Business app, or 285 00:13:29,720 --> 00:13:31,160 Speaker 1: watch us live on YouTube. 286 00:13:31,200 --> 00:13:35,200 Speaker 2: We're wonder something different here with Henrietta Treys Theveda Partners. Henriette, 287 00:13:35,800 --> 00:13:39,600 Speaker 2: I want to note the surprise in an Omaha mayoral 288 00:13:39,800 --> 00:13:45,760 Speaker 2: race this weekend, the surprise in a San Antonio mayoral race. 289 00:13:46,360 --> 00:13:49,440 Speaker 2: There seems to be a trend afoot, and I want 290 00:13:49,920 --> 00:13:52,080 Speaker 2: to bring it back to the mystery of ha Kim 291 00:13:52,160 --> 00:13:57,239 Speaker 2: Jeffries is a potential leader of the Democratic Party nationally. 292 00:13:57,520 --> 00:14:00,640 Speaker 2: Is that possible that the gentleman from New York and 293 00:14:00,720 --> 00:14:03,560 Speaker 2: from New York City would be the party leader. 294 00:14:04,920 --> 00:14:08,839 Speaker 8: I wouldn't say it's just possible. I'd say it's quite likely. Ordinarily, 295 00:14:08,880 --> 00:14:11,640 Speaker 8: when you have one chamber control, one party control all 296 00:14:11,679 --> 00:14:15,240 Speaker 8: every chambers of Congress, you switch twenty five seats in 297 00:14:15,320 --> 00:14:17,640 Speaker 8: the House of Representatives in any cycle, and that goes 298 00:14:17,640 --> 00:14:20,880 Speaker 8: in both directions, Democrats and Republicans. And what happens is 299 00:14:20,960 --> 00:14:23,560 Speaker 8: Americans tend to vote for change and then they don't 300 00:14:23,600 --> 00:14:25,920 Speaker 8: like it when they get so when you have one 301 00:14:25,960 --> 00:14:28,400 Speaker 8: party control like we have right now with Republicans and 302 00:14:28,440 --> 00:14:32,600 Speaker 8: President Trump in office, we've seen how the President galvanizes 303 00:14:32,920 --> 00:14:35,840 Speaker 8: the Democratic base gets turned out to go through the 304 00:14:35,920 --> 00:14:38,280 Speaker 8: roof in a midterm election cycle. And so I very 305 00:14:38,320 --> 00:14:41,200 Speaker 8: much expect what happened in twenty eighteen to happen here 306 00:14:41,240 --> 00:14:44,280 Speaker 8: again next November. And that's what Republicans will start to 307 00:14:44,280 --> 00:14:46,360 Speaker 8: pivot to as we start here. 308 00:14:46,760 --> 00:14:51,320 Speaker 2: Why are the Democrats winning in Omaha, San Antonio, and 309 00:14:51,400 --> 00:14:53,440 Speaker 2: percolating in other areas as well. 310 00:14:54,160 --> 00:14:57,000 Speaker 8: That one was fascinating in Omaha as well. You know, 311 00:14:57,040 --> 00:15:00,560 Speaker 8: they've been trying to unseat the incumbent Republican for four 312 00:15:00,640 --> 00:15:03,880 Speaker 8: straight cycles, so that came as, you know, a huge 313 00:15:04,280 --> 00:15:07,000 Speaker 8: thing to cheer for the Democratic Party, and they're going 314 00:15:07,080 --> 00:15:09,640 Speaker 8: to continue to try to do that. I think Rammanuel 315 00:15:09,760 --> 00:15:13,040 Speaker 8: made some really good points over the weekend. You know, 316 00:15:13,080 --> 00:15:15,840 Speaker 8: he's obviously telegraphing that he might run for president, but 317 00:15:16,440 --> 00:15:19,720 Speaker 8: have a targeting campaign, Go after individual seats and races 318 00:15:19,760 --> 00:15:21,680 Speaker 8: that you think you can win with a well known 319 00:15:21,720 --> 00:15:24,520 Speaker 8: candidate in that particular district, however small it is, and 320 00:15:24,560 --> 00:15:27,280 Speaker 8: whether it's in San Antonio or Nebraska, go for it. 321 00:15:28,160 --> 00:15:30,600 Speaker 5: Henrietta, We've seen some news coming out over the weekend 322 00:15:30,640 --> 00:15:34,480 Speaker 5: from Los Angeles as it relates to immigration deportations and 323 00:15:34,960 --> 00:15:39,520 Speaker 5: then protests and then President ordering the National Guard into 324 00:15:39,560 --> 00:15:43,960 Speaker 5: Los Angeles. How's all of this broader immigration policy from 325 00:15:43,960 --> 00:15:47,440 Speaker 5: President Trump, which has been very effective from his perspective 326 00:15:47,480 --> 00:15:50,480 Speaker 5: and very quick in terms of implementation. How's that playing 327 00:15:50,520 --> 00:15:51,760 Speaker 5: on Capitol Hill and in DC. 328 00:15:52,880 --> 00:15:55,400 Speaker 8: I'm glad you asked. I was actually with some former 329 00:15:55,680 --> 00:15:58,720 Speaker 8: members of Republican leadership at a conference we were all 330 00:15:58,720 --> 00:16:01,280 Speaker 8: speaking at a few weeks back, and one of the 331 00:16:01,320 --> 00:16:03,960 Speaker 8: remarks that really stuck with me was a sentiment from 332 00:16:04,120 --> 00:16:07,200 Speaker 8: a former Speaker of the House or Republican member saying, 333 00:16:07,440 --> 00:16:09,840 Speaker 8: the trouble with the president's immigration agenda is that he 334 00:16:09,960 --> 00:16:13,720 Speaker 8: was too successful, too quickly. And it's interesting to look 335 00:16:13,720 --> 00:16:16,320 Speaker 8: at the data. There's a leak shut off of flow 336 00:16:16,360 --> 00:16:18,800 Speaker 8: of migrants at the southern border, and the President was 337 00:16:18,840 --> 00:16:21,840 Speaker 8: just extraordinarily effective in getting his you know, close the 338 00:16:21,840 --> 00:16:24,000 Speaker 8: border's tactics in place. 339 00:16:24,680 --> 00:16:25,560 Speaker 3: And what that. 340 00:16:25,520 --> 00:16:29,000 Speaker 8: Did, and we saw just before the situation in LA erupted, 341 00:16:29,080 --> 00:16:31,880 Speaker 8: is that immigration had proceeded as a major focus of 342 00:16:31,920 --> 00:16:34,680 Speaker 8: conversation on Capitol Hill, and we'd lost sight of the 343 00:16:34,680 --> 00:16:38,320 Speaker 8: fact that this one big, beautiful bill includes one hundred 344 00:16:38,320 --> 00:16:41,680 Speaker 8: and seventy five billion dollars just for the Judiciary Committee, 345 00:16:41,720 --> 00:16:44,600 Speaker 8: which is immigration enforcement, to roll out over the next 346 00:16:44,600 --> 00:16:47,720 Speaker 8: couple of years. And I think what the dynamic in 347 00:16:47,960 --> 00:16:52,200 Speaker 8: LA does is it shifts the narrative away from Medicaid cuts, 348 00:16:52,320 --> 00:16:56,640 Speaker 8: Medicare cuts, snap cuts, the deficit increases and positions. It's 349 00:16:56,640 --> 00:17:00,320 Speaker 8: squarely where there is going to be a con certed 350 00:17:00,480 --> 00:17:04,520 Speaker 8: focus and new legislation this week from the United States 351 00:17:04,520 --> 00:17:07,760 Speaker 8: Senate Judiciary Committee on exactly these immigration issues. So it 352 00:17:07,800 --> 00:17:10,639 Speaker 8: gives an opening for the President to revert back to 353 00:17:10,680 --> 00:17:13,560 Speaker 8: something that he promised on the campaign trail has already 354 00:17:13,560 --> 00:17:16,240 Speaker 8: delivered and now needs to resuscitate to our mind motors 355 00:17:16,240 --> 00:17:18,320 Speaker 8: that he in fact handled it and now has to 356 00:17:18,359 --> 00:17:20,360 Speaker 8: address another dust up. 357 00:17:21,040 --> 00:17:24,640 Speaker 5: So where are we on this tax and spending bill, Henrietta? 358 00:17:24,920 --> 00:17:28,959 Speaker 5: Obviously the House has made it its point and now 359 00:17:29,000 --> 00:17:30,800 Speaker 5: it's with the Senate. What's the timing and kind of 360 00:17:30,800 --> 00:17:32,719 Speaker 5: what are the big issues that we need to pay 361 00:17:32,760 --> 00:17:33,240 Speaker 5: attention to. 362 00:17:34,080 --> 00:17:36,960 Speaker 8: Sure this rest of this week we're going to see 363 00:17:37,000 --> 00:17:40,879 Speaker 8: four different committees roll out their respective packages. This is 364 00:17:41,000 --> 00:17:43,560 Speaker 8: mostly going to be on the spending sides. As I mentioned, 365 00:17:43,720 --> 00:17:46,320 Speaker 8: Judiciary gets to spend one hundred and seventy five billion dollars. 366 00:17:46,520 --> 00:17:49,240 Speaker 8: I believe they'll roll out their package on Wednesday or Thursday, 367 00:17:49,560 --> 00:17:52,480 Speaker 8: and then next week we'll get into the Senate Finance Committee, 368 00:17:52,480 --> 00:17:55,399 Speaker 8: where the big heart of the packages. That's where the 369 00:17:55,440 --> 00:17:57,960 Speaker 8: Medicaid cuts are and all the tax spending and most 370 00:17:58,119 --> 00:18:01,680 Speaker 8: deficit financing. I think the bill the last week of July. 371 00:18:02,000 --> 00:18:04,840 Speaker 2: Henry de Trace what's the question you would ask Andrew 372 00:18:04,880 --> 00:18:06,639 Speaker 2: Cuomo of New York State. 373 00:18:07,400 --> 00:18:10,399 Speaker 8: Talk to me about states rights? Where does Gavin Newsom 374 00:18:10,480 --> 00:18:12,800 Speaker 8: stand on states rights? I think that's what the courts 375 00:18:12,800 --> 00:18:13,600 Speaker 8: are going to judge on. 376 00:18:14,000 --> 00:18:14,840 Speaker 9: Ask what you would do? 377 00:18:15,000 --> 00:18:16,920 Speaker 8: He was in opposition states rights all day. 378 00:18:17,160 --> 00:18:20,040 Speaker 2: I promise you we will ask set Henrietta Trace. Thank 379 00:18:20,080 --> 00:18:21,960 Speaker 2: you so much for Vada Partners. 380 00:18:22,119 --> 00:18:25,959 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 381 00:18:26,000 --> 00:18:29,040 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 382 00:18:29,040 --> 00:18:32,080 Speaker 1: Auto with the Bloomberg Business App. You can also listen 383 00:18:32,160 --> 00:18:35,440 Speaker 1: live on Amazon Alexa from our flagship New York station, 384 00:18:35,960 --> 00:18:39,840 Speaker 1: Just say Alexa Play Bloomberg eleven thirty. 385 00:18:39,160 --> 00:18:43,639 Speaker 2: Charles Canter, senior portfolio manager at Newburger Berman. He and 386 00:18:43,680 --> 00:18:45,800 Speaker 2: I can go back and forth on the mistakes we've 387 00:18:45,840 --> 00:18:49,959 Speaker 2: made in our career. It's a long conversation. Charles cantor, 388 00:18:50,400 --> 00:18:53,560 Speaker 2: how do you have humility away from the Meg seven 389 00:18:54,000 --> 00:18:58,000 Speaker 2: when you've got Warner Brothers, Discovery trying to piece together 390 00:18:59,359 --> 00:19:02,720 Speaker 2: you know, the news this morning, it's a time to 391 00:19:02,720 --> 00:19:05,480 Speaker 2: be humble. I guess with the other four hundred eighty 392 00:19:05,520 --> 00:19:06,720 Speaker 2: three stocks, right. 393 00:19:07,359 --> 00:19:10,240 Speaker 9: I think so? I think that look I think we're 394 00:19:10,280 --> 00:19:13,640 Speaker 9: in a market that I would describe as kind of nuanced. 395 00:19:13,520 --> 00:19:17,280 Speaker 9: It frustrates us a bunch when when folks like to 396 00:19:17,280 --> 00:19:20,160 Speaker 9: think about, you know, Magnificent seven and then the other 397 00:19:20,200 --> 00:19:22,840 Speaker 9: four hundred and ninety three companies. I think you want to, 398 00:19:23,440 --> 00:19:25,480 Speaker 9: like we've done a whole career. Is you want to 399 00:19:25,560 --> 00:19:29,040 Speaker 9: kind of look at each company company by company. We've 400 00:19:29,040 --> 00:19:31,280 Speaker 9: been in an environment now for a long time where 401 00:19:31,960 --> 00:19:35,640 Speaker 9: all that mattered was momentum and beta. I'm not sure 402 00:19:35,680 --> 00:19:38,720 Speaker 9: we're still in that environment. I think post the election 403 00:19:39,240 --> 00:19:43,320 Speaker 9: the market started to behave a little bit differently. But 404 00:19:43,560 --> 00:19:46,960 Speaker 9: but I think what gets lost a little bit on 405 00:19:47,000 --> 00:19:51,080 Speaker 9: the Magnificent seven is is there's good reasons why many 406 00:19:51,119 --> 00:19:54,640 Speaker 9: of them, you know, are magnificent. And one thing I'd 407 00:19:54,720 --> 00:19:57,480 Speaker 9: like to point out is when you look at both 408 00:19:57,520 --> 00:20:01,360 Speaker 9: their R and D spend and CAPEX spend on an 409 00:20:01,359 --> 00:20:06,639 Speaker 9: annual basis, these seven companies spend north of nine percent 410 00:20:06,640 --> 00:20:08,720 Speaker 9: of their revenues on R and D, which is north 411 00:20:08,720 --> 00:20:12,400 Speaker 9: of two hundred and fifty billion dollars. To contextualize that amount, 412 00:20:12,880 --> 00:20:17,399 Speaker 9: that's more than the entire healthcare and biotech sectors combined. 413 00:20:17,720 --> 00:20:19,919 Speaker 9: Why do we pick those sectors because those sectors have 414 00:20:19,960 --> 00:20:22,840 Speaker 9: to invest in R and D to replenish their pipelines. 415 00:20:23,160 --> 00:20:24,240 Speaker 4: And then on the balance. 416 00:20:24,000 --> 00:20:26,920 Speaker 9: Sheet side of the ledger, especially pronounced of the last 417 00:20:26,960 --> 00:20:31,080 Speaker 9: couple of years as that built out their AI investments. 418 00:20:31,960 --> 00:20:34,680 Speaker 9: Last year was the first time that they spend more 419 00:20:34,760 --> 00:20:39,320 Speaker 9: than the entire materials, mining, and industrial sectors combined. Why 420 00:20:39,320 --> 00:20:42,000 Speaker 9: do we pick those sectors because those are typically the 421 00:20:42,000 --> 00:20:44,680 Speaker 9: most capal intensive sectors. So at the end of the day, 422 00:20:45,800 --> 00:20:51,000 Speaker 9: lump together these seven companies have incredible optionality on the future. 423 00:20:51,440 --> 00:20:54,080 Speaker 9: That doesn't mean all seven are going to work. It 424 00:20:54,080 --> 00:20:57,679 Speaker 9: doesn't mean we like all seven, but I and the 425 00:20:57,720 --> 00:21:01,160 Speaker 9: way for example, Apple's got there versus the way Meta 426 00:21:01,240 --> 00:21:04,879 Speaker 9: and Google has got there looks completely different. Apple hasn't 427 00:21:04,920 --> 00:21:08,360 Speaker 9: spent any of the capex that I've just responded to. 428 00:21:08,800 --> 00:21:11,840 Speaker 9: They've actually shrunk their capital base, whereas the others have 429 00:21:11,920 --> 00:21:14,760 Speaker 9: invested a lot. And oh, by the way, they've done 430 00:21:14,880 --> 00:21:19,159 Speaker 9: all of that without leveraging their balance sheets, which is 431 00:21:19,240 --> 00:21:21,920 Speaker 9: just astonishing. Go run a model where you spend all 432 00:21:21,960 --> 00:21:24,679 Speaker 9: that money and somehow don't take on leverage. 433 00:21:24,960 --> 00:21:27,359 Speaker 5: So when you think about just big tech in general, 434 00:21:27,359 --> 00:21:29,040 Speaker 5: forget the MAGS seven. I'm not even sure who's in 435 00:21:29,040 --> 00:21:32,239 Speaker 5: the mag seven these days. Big tech has been, as 436 00:21:32,240 --> 00:21:35,119 Speaker 5: long as anybody can remember, been driving these markets higher. 437 00:21:35,160 --> 00:21:38,560 Speaker 5: It's been the leader of these markets. Is that still 438 00:21:38,640 --> 00:21:41,320 Speaker 5: the case? Maybe just by the fact that they're so 439 00:21:41,359 --> 00:21:43,680 Speaker 5: big in the market, it has to be. But can 440 00:21:43,720 --> 00:21:44,879 Speaker 5: they still leave this market? 441 00:21:44,600 --> 00:21:49,560 Speaker 9: They enjoy tremendous scale, and they enjoy tremendous optionality. And 442 00:21:49,600 --> 00:21:52,879 Speaker 9: as we know well in this room, we are in 443 00:21:52,880 --> 00:22:00,080 Speaker 9: innovative lead, entrepreneurial spirit lead dynamic economy, and innovation and 444 00:22:00,080 --> 00:22:03,359 Speaker 9: and entrepreneural spirit has been driving us forward for the 445 00:22:03,440 --> 00:22:05,640 Speaker 9: twenty five years that I've been on the buy side. 446 00:22:05,680 --> 00:22:08,800 Speaker 9: It used to be the Internet, it used to be Cisco, 447 00:22:09,560 --> 00:22:12,880 Speaker 9: it's now the others. And we can get into those 448 00:22:12,880 --> 00:22:14,080 Speaker 9: comparisons as well. 449 00:22:14,200 --> 00:22:16,440 Speaker 2: Do you I mean, I know you're looking at cricket stores, 450 00:22:16,920 --> 00:22:19,960 Speaker 2: Charles Canter with the stupid goverment. Do you use AI? 451 00:22:20,400 --> 00:22:23,520 Speaker 2: This nascent AI we have, We are. 452 00:22:23,480 --> 00:22:29,960 Speaker 9: Using it in increasingly, increasingly increasingly. Remember, all of the 453 00:22:30,000 --> 00:22:35,840 Speaker 9: information I'm privileged to analyze is by law public. We 454 00:22:35,960 --> 00:22:39,560 Speaker 9: have this thing called regulation fair disclosure. And since it's 455 00:22:39,600 --> 00:22:44,040 Speaker 9: all public, it's all available on your favorite AI machine. 456 00:22:44,280 --> 00:22:47,080 Speaker 9: We are using it aggressively at Newburger government to think 457 00:22:47,119 --> 00:22:50,520 Speaker 9: about how to make better decisions. I'm using it personally 458 00:22:50,800 --> 00:22:57,840 Speaker 9: in my life. It's massively productivity enhunting, I think within 459 00:22:57,960 --> 00:23:02,040 Speaker 9: our industry, within Acid Manta. More broadly, I think it's 460 00:23:02,080 --> 00:23:05,240 Speaker 9: going to have a profound impact ten years from today. 461 00:23:05,320 --> 00:23:08,919 Speaker 9: I think the way we think about how we crunch 462 00:23:09,080 --> 00:23:13,080 Speaker 9: data will look fundamentally different. And I have wonderful folks 463 00:23:13,080 --> 00:23:16,680 Speaker 9: on my team, but the speed at which we can 464 00:23:16,680 --> 00:23:18,720 Speaker 9: now look at data versus what it used to look 465 00:23:18,840 --> 00:23:20,359 Speaker 9: like is dramatically different. 466 00:23:21,200 --> 00:23:21,440 Speaker 2: Tom. 467 00:23:21,440 --> 00:23:22,800 Speaker 5: You know, Alex Steel and I were at a B 468 00:23:22,960 --> 00:23:26,040 Speaker 5: and Y Melon conference last week down in Washington, DC. 469 00:23:26,720 --> 00:23:29,320 Speaker 5: To a whole person to a person, the B and 470 00:23:29,480 --> 00:23:31,760 Speaker 5: Y folks that came on our shows that AI is 471 00:23:31,760 --> 00:23:33,719 Speaker 5: the most important thing in their business. 472 00:23:33,760 --> 00:23:36,840 Speaker 2: Here Charles li'sten back, you were acclaimed on Amazon Whole 473 00:23:36,840 --> 00:23:39,680 Speaker 2: Foods and all that. Has that worked out for Amazon? 474 00:23:40,800 --> 00:23:41,600 Speaker 2: I think it has. 475 00:23:41,720 --> 00:23:46,159 Speaker 9: I think it has for sure. I think it gets 476 00:23:46,200 --> 00:23:51,000 Speaker 9: them the last mile. It provided Whole Foods with lots 477 00:23:51,040 --> 00:23:56,600 Speaker 9: of technology. It provided the consumer Whole Foods customer and 478 00:23:56,760 --> 00:24:01,000 Speaker 9: idea that Whole Foods was no longer the most expensive 479 00:24:01,000 --> 00:24:05,959 Speaker 9: ticket in town. But that size of the acquisition was 480 00:24:06,080 --> 00:24:09,200 Speaker 9: I think north of south of ten billion dollars when 481 00:24:09,200 --> 00:24:11,119 Speaker 9: they did it, and so when you look at the 482 00:24:11,119 --> 00:24:15,240 Speaker 9: market capitalization today, it feels very small within the overall context. 483 00:24:15,240 --> 00:24:18,720 Speaker 9: The thing that always amazed me about that transaction was 484 00:24:19,200 --> 00:24:22,800 Speaker 9: was I said, and I wasn't very liked for saying 485 00:24:22,800 --> 00:24:26,160 Speaker 9: it at the time, that Amazon got Whole Foods for free, 486 00:24:26,640 --> 00:24:30,280 Speaker 9: because at that moment when they announced the deal, Amazon's 487 00:24:30,480 --> 00:24:34,280 Speaker 9: share price went up in market capitalization by more than 488 00:24:34,320 --> 00:24:37,840 Speaker 9: the totality of the purchase price of that acquisition. And 489 00:24:37,880 --> 00:24:42,119 Speaker 9: when you look over in time, generally when acquisitions get announced, 490 00:24:42,480 --> 00:24:44,680 Speaker 9: you know, the net present value on the day is negative, 491 00:24:44,720 --> 00:24:46,800 Speaker 9: not positive to the acquiring company. 492 00:24:47,640 --> 00:24:54,040 Speaker 5: Outside of tech, what screens wat for you guys these days. 493 00:24:51,840 --> 00:24:54,679 Speaker 2: It you've got to be nuanced on that. 494 00:24:54,760 --> 00:24:57,159 Speaker 9: Again, I think we spend a lot of time thinking 495 00:24:57,240 --> 00:25:05,960 Speaker 9: about how does technology produce productivity enhancements across sectors? And 496 00:25:06,400 --> 00:25:10,600 Speaker 9: I truly believe we at when we look back ten 497 00:25:10,680 --> 00:25:13,000 Speaker 9: years forward and we look back, I think you're going 498 00:25:13,040 --> 00:25:18,000 Speaker 9: to continue to see this march upwards of operating margins 499 00:25:17,760 --> 00:25:20,480 Speaker 9: in the S and P. I since I've been at Newburg, 500 00:25:20,600 --> 00:25:24,480 Speaker 9: everyone said oberading margins at peak oberating Margins camp peak. 501 00:25:24,560 --> 00:25:28,240 Speaker 9: If you have great management teams running great businesses with 502 00:25:29,119 --> 00:25:31,320 Speaker 9: innovation in a free market. 503 00:25:31,640 --> 00:25:39,240 Speaker 2: Charles Chanter, thank you so much with Newburger Berman greatly appreciated. 504 00:25:41,480 --> 00:25:45,400 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 505 00:25:45,440 --> 00:25:48,720 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 506 00:25:48,840 --> 00:25:51,680 Speaker 1: with the Bloomberg Business app. You can also watch us 507 00:25:51,720 --> 00:25:55,600 Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal. 508 00:25:55,760 --> 00:25:58,720 Speaker 2: Lisa Mateo the newspapers, It is a joy. 509 00:25:59,000 --> 00:26:01,600 Speaker 10: Okay, we're starting with this ay from Bloomberg screen Time. 510 00:26:01,640 --> 00:26:04,600 Speaker 10: So Lucas Charlrotte. This article about the business behind baseball 511 00:26:05,000 --> 00:26:07,719 Speaker 10: really interesting because it talks about how TV ratings are 512 00:26:07,800 --> 00:26:10,399 Speaker 10: up right. ESPN ratings are up twenty two percent, game 513 00:26:10,440 --> 00:26:13,040 Speaker 10: attendance seven year high in twenty twenty four. I mean, 514 00:26:13,040 --> 00:26:15,720 Speaker 10: Tom Kaney's going to baseball games at the Yankee Stadium. 515 00:26:16,080 --> 00:26:18,199 Speaker 10: But the league is grambling to find this buyer for 516 00:26:18,280 --> 00:26:21,879 Speaker 10: the major TV package because ESPN, set in February, is 517 00:26:21,920 --> 00:26:24,800 Speaker 10: going to end the broadcasting with MLB after the twenty 518 00:26:24,840 --> 00:26:27,600 Speaker 10: twenty five season. And that was earlier than expected, and 519 00:26:27,640 --> 00:26:30,240 Speaker 10: they were paying like five hundred and fifty million dollars 520 00:26:30,280 --> 00:26:33,000 Speaker 10: a year and want to pay less than half that price. 521 00:26:33,119 --> 00:26:35,960 Speaker 2: The downside is when we sat down right behind the 522 00:26:35,960 --> 00:26:38,720 Speaker 2: Red Sox dugout, Missus King turned to me, Paul and said, 523 00:26:38,920 --> 00:26:43,960 Speaker 2: when's halftime. So it's a little a little difficult, folks, 524 00:26:44,000 --> 00:26:46,760 Speaker 2: I tell you. Anyways, Paul, let me translate it for you. 525 00:26:46,800 --> 00:26:49,639 Speaker 2: There's one hundred and sixty two games. I'm guessing the 526 00:26:49,800 --> 00:26:54,280 Speaker 2: NFL at sixteen games eighteen every is it eighteen seventeen eighteen? Well, 527 00:26:54,320 --> 00:26:56,680 Speaker 2: let me do sixteen games because that's my math right now. 528 00:26:56,960 --> 00:27:03,160 Speaker 2: That's ten baseball games for every compressed football game of excitement. 529 00:27:03,320 --> 00:27:04,320 Speaker 2: It just doesn't work. 530 00:27:04,600 --> 00:27:07,919 Speaker 5: No, no, So it's a long season. You build over time. 531 00:27:08,320 --> 00:27:11,080 Speaker 5: Uh and and baseball is a local it's a local 532 00:27:11,160 --> 00:27:13,399 Speaker 5: it's not a national game. So it's all about the local. 533 00:27:13,440 --> 00:27:16,480 Speaker 2: And they said, Lucas said, the regionals, it's like really 534 00:27:16,520 --> 00:27:18,720 Speaker 2: difficult except Yankees and Dodgers. 535 00:27:18,960 --> 00:27:20,679 Speaker 5: Yeah, a few of them still have some good and 536 00:27:20,720 --> 00:27:23,840 Speaker 5: then and the Red Sox, but the regional sports networks 537 00:27:24,160 --> 00:27:25,680 Speaker 5: are just disaster right now. 538 00:27:26,320 --> 00:27:27,520 Speaker 10: I just want to know if you did the y 539 00:27:27,600 --> 00:27:29,240 Speaker 10: m c A dance at the. 540 00:27:29,720 --> 00:27:35,360 Speaker 2: Yes even walked down the road to the front Row 541 00:27:35,440 --> 00:27:38,280 Speaker 2: where you know, I think Mayor Wou was there and 542 00:27:38,520 --> 00:27:40,560 Speaker 2: I had to do the video of the y m 543 00:27:40,720 --> 00:27:42,840 Speaker 2: c A dance in front of them. Yeah, well you're 544 00:27:42,880 --> 00:27:44,640 Speaker 2: sure proud. 545 00:27:45,119 --> 00:27:49,480 Speaker 5: There's gotta be a video about their Lisa. 546 00:27:50,640 --> 00:27:51,080 Speaker 3: I love it. 547 00:27:51,160 --> 00:27:51,640 Speaker 4: I love it. 548 00:27:51,920 --> 00:27:54,320 Speaker 10: Okay, I want to go to this one college graduation 549 00:27:54,440 --> 00:27:56,919 Speaker 10: season right it's starting to wind down. But what actually 550 00:27:57,000 --> 00:28:00,600 Speaker 10: picked up are the scavengers that scooped up those expensive 551 00:28:00,800 --> 00:28:04,199 Speaker 10: items that the graduates left behind, like in the garbage 552 00:28:04,240 --> 00:28:06,439 Speaker 10: rooms and the dumpsters. So for example, like one person 553 00:28:06,640 --> 00:28:09,240 Speaker 10: in an apartment building in Dorm, North Carolina says she 554 00:28:09,400 --> 00:28:12,919 Speaker 10: scooped up like Valentino sneakers that are like almost one 555 00:28:12,920 --> 00:28:17,240 Speaker 10: thousand dollars, incredible toaster, big, you know, tables, luxurious stuff 556 00:28:17,520 --> 00:28:18,240 Speaker 10: when all the. 557 00:28:18,280 --> 00:28:20,560 Speaker 4: Duke students moved out, you know, so that's what you did. 558 00:28:20,640 --> 00:28:23,680 Speaker 10: And then you have people doing dumpster diving at Caltech 559 00:28:23,720 --> 00:28:27,600 Speaker 10: and Pasadena because they're getting thousands of dollars worth of 560 00:28:27,720 --> 00:28:30,240 Speaker 10: books from the recycling center. 561 00:28:30,280 --> 00:28:33,040 Speaker 5: So they're finding likely paid for exactly. 562 00:28:33,200 --> 00:28:35,520 Speaker 10: Got it that are in the dumpster from the recycling 563 00:28:35,560 --> 00:28:38,480 Speaker 10: center that they're taking and then kind of reusing them 564 00:28:38,480 --> 00:28:39,120 Speaker 10: and reselling that. 565 00:28:39,520 --> 00:28:41,760 Speaker 2: There's a headline this weekend. I'll go quickly because we 566 00:28:41,840 --> 00:28:46,720 Speaker 2: got one more in Clark University Worcester, great school to 567 00:28:46,800 --> 00:28:52,040 Speaker 2: lay off thirty percent faculty amid restructuring. It's a challenging 568 00:28:52,280 --> 00:28:55,479 Speaker 2: new college year in nation wide and Morning ninety two 569 00:28:55,600 --> 00:28:57,760 Speaker 2: nine FM and Worcester. What else do you have? 570 00:28:57,760 --> 00:29:00,520 Speaker 10: Get you okay quick one? Those being like paid off? Right, 571 00:29:00,520 --> 00:29:02,080 Speaker 10: it used to be this mark of shane when you 572 00:29:02,080 --> 00:29:04,440 Speaker 10: were laid off, but now it's kind of like this 573 00:29:04,600 --> 00:29:07,880 Speaker 10: badge of honor. This is from Business Insighter. They point 574 00:29:07,880 --> 00:29:10,200 Speaker 10: to a lot of things like people launching newsletters about 575 00:29:10,240 --> 00:29:13,800 Speaker 10: being laid off, workers live streaming it on TikTok, layoff 576 00:29:14,040 --> 00:29:18,400 Speaker 10: influencers now offering advice. LinkedIn has the hashtag open to 577 00:29:18,480 --> 00:29:21,720 Speaker 10: work on top of that, and there's even layoff merch now. 578 00:29:21,840 --> 00:29:23,960 Speaker 10: So before where it was like, oh I got laid off, 579 00:29:24,000 --> 00:29:27,280 Speaker 10: let me just hide, no, there's communities and everyone is 580 00:29:27,360 --> 00:29:30,160 Speaker 10: kind of going around all these people who are laid off. 581 00:29:30,200 --> 00:29:32,400 Speaker 10: So now they have these support groups and everything to 582 00:29:33,320 --> 00:29:35,560 Speaker 10: help them out throughout the tough time. But it's like 583 00:29:35,560 --> 00:29:37,800 Speaker 10: this badge of honor that they have now, like I got. 584 00:29:37,640 --> 00:29:38,880 Speaker 5: Laid off, Well, I think it's going to be a 585 00:29:39,000 --> 00:29:42,520 Speaker 5: uptick in. You know, people in Starbucks, you know, sitting 586 00:29:42,520 --> 00:29:45,720 Speaker 5: there at their laptop looking for jobs or gigging or 587 00:29:45,880 --> 00:29:46,560 Speaker 5: whatever they do. 588 00:29:46,640 --> 00:29:49,840 Speaker 2: I think we'll cover a challenging jobs report on Friday. 589 00:29:49,920 --> 00:29:53,440 Speaker 2: Lisa Mateo, the newspapers, thank you so much. 590 00:29:53,600 --> 00:29:58,400 Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 591 00:29:58,520 --> 00:30:02,840 Speaker 1: and anywhere else you get podcasts. Listen live each weekday, 592 00:30:02,960 --> 00:30:06,400 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 593 00:30:06,480 --> 00:30:10,520 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 594 00:30:10,560 --> 00:30:13,920 Speaker 1: can also watch us live every weekday on YouTube and 595 00:30:14,120 --> 00:30:15,840 Speaker 1: always on the Bloomberg terminal