Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
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Speaker 2: They have been laidler with us over the years, with
Speaker 2: HSBC and others, now with Bradesco BBI, adding equity strategy
Speaker 2: value each and every day. Ben, I just did the
Speaker 2: math here. I can do this off the Bloomberg Professional
Speaker 2: Service seventeen point five percent per year from Christmas Eve
Speaker 2: twenty eighteen. I think a Gartman on gold in Yen.
Speaker 2: There's Ladler on get into the market now Christmas Eve
Speaker 2: of twenty eighteen. Recapitulate that calm now, Are you as
Speaker 2: bullish now as you were then? Or is there a
Speaker 2: different cast to it?
Speaker 3: Definitely bullish equities, just maybe less bullish US equities. I mean,
Speaker 3: obviously it's been a sort of juggernaut since then. We've
Speaker 3: just had a twenty percent reminder in the last couple
Speaker 3: of months of why you shouldn't bet against US equities.
Speaker 3: But I do think this bill market is sort of
Speaker 3: broadening out. I do think the sort of genies out
Speaker 3: of the bottle a little bit this year, we got
Speaker 3: very crowded on sort of how big US was positioning,
Speaker 3: got very crowded. I think that was the what drove
Speaker 3: US a little bit into this cell off we had,
Speaker 3: and I think the rest of the world now now
Speaker 3: gets a bit of a look in. I think this
Speaker 3: is the healthy broadening. You have a double discount in
Speaker 3: the rest of the world, cheap currencies, cheaper cheap equity evaluations,
Speaker 3: and you know, some some positive policy, whether that's fiscal
Speaker 3: stimulus out of China or Germany.
Speaker 4: So bullish on equities.
Speaker 3: I'm looking for a more average US return from here,
Speaker 3: but stronger returns in the.
Speaker 4: Rest of the world.
Speaker 5: So we did see that move, as you mentioned, into
Speaker 5: the rest of the world earlier this year out of
Speaker 5: the US. My question is, was that a short term trade,
Speaker 5: the smart money just trying to be smart, or is
Speaker 5: that something different?
Speaker 3: Do you think, well, you certainly have history against you
Speaker 3: on that trade. I mean, the rest of the world's
Speaker 3: underperformed for fifteen years. So I feel like I'm standing
Speaker 3: in front of this sort of US freight train, you know,
Speaker 3: But these things do move in cycles. And I do
Speaker 3: just think that the genie is out of the bottle
Speaker 3: a little bit on the US. I mean, the US
Speaker 3: is sixty five percent of global equities, It's twenty five
Speaker 3: percent of global GDP.
Speaker 4: You know, I do a lot of Latin right, latam
Speaker 4: seven percent of global GDP.
Speaker 3: It's seventy basis points of global market cap, right, And
Speaker 3: you have that narrative in the rest of the world.
Speaker 3: So I do think a little bit of love goes
Speaker 3: a very long way. You do have this double currency
Speaker 3: and an equity discount, and I don't need to be
Speaker 3: very right, and I do just think that, you know,
Speaker 3: the cell off we've had in the US is at
Speaker 3: least sensitized people to the risks they're running in the
Speaker 3: US on twenty times earning sixty five percent of global
Speaker 3: market cap, and I think you get a little bit
Speaker 3: of reallocation to the rest of the world regard wardless.
Speaker 5: You mentioned Latham, I know, and you're previously if you
Speaker 5: spent a lot of time looking at the Latin American market,
Speaker 5: where do you see opportunities today in Latin America.
Speaker 4: So Brazil's the cheapest market in the world.
Speaker 5: Brazil is the cheapest thing.
Speaker 3: Anyway, you were looking at dividend yield eight times pe
Speaker 3: highest real.
Speaker 4: Interest rates in the world. As I say, a.
Speaker 3: Fraction the size of sort of of GDP, a little
Speaker 3: bit of reallocation goes a very long way.
Speaker 4: Is a value TP well, it certainly has been for
Speaker 4: a long time.
Speaker 3: I think again, we're about to get maybe rate cuts
Speaker 3: coming in Brazil at the end of the year, which
Speaker 3: I think will begin to bring those real rates down,
Speaker 3: allow those P multiples to rise, and I think more
Speaker 3: broadly across Brazil, across emerging markets, there are no tourists
Speaker 3: left right, There's no one out there telling you that you.
Speaker 4: Know, this has been a great place to be.
Speaker 3: So again I think a little bit of reallocation and
Speaker 3: these asset class that people have forgotten about for fifteen
Speaker 3: years could to come back.
Speaker 2: The magic of your career then is an incredible respect.
Speaker 2: The corporations are just life goes on. I want you
Speaker 2: to discuss the onslaught of market timing. Go to cash
Speaker 2: opinionated punditry that our listeners and viewers here each and
Speaker 2: every day they're overwhelmed with do this, do that, and
Speaker 2: you just say shut up and believe in capitalism.
Speaker 4: So turn the radio off and do nothing.
Speaker 6: No, we know that's not the way we were all here,
Speaker 6: but yes, there's definitely advantage sitting in your hands are
Speaker 6: doing nothing, And I don't want to, you know, I
Speaker 6: don't want to be down on the US here.
Speaker 3: I mean, this is not an anti US trade. This
Speaker 3: is just more average double digit US returns, not the
Speaker 3: you know this juggern order of riskless feeling riskless twenty
Speaker 3: percent a year. You know, Tech just delivered three times
Speaker 3: the earnings going through the S and P five hundred
Speaker 3: on twenty five thirty times earnings. That seems pretty good
Speaker 3: to me. Can it get dramatically more than that? You know, no,
Speaker 3: maybe not, But I certainly wouldn't want to be betting
Speaker 3: against that.
Speaker 4: And you've just had that in the last quarter.
Speaker 5: Well we've had I mean since most of our listeners
Speaker 5: and viewers can remember, Tech has been the narrative of
Speaker 5: the US stock market.
Speaker 4: Is that still the case?
Speaker 5: Do you think?
Speaker 4: I think so? As I say they're delivering the goods.
Speaker 3: You have three times the earnings going through anyone else
Speaker 3: the S and P five hundred evaluations of de rated
Speaker 3: you know you're not paying three times the multiple the
Speaker 3: s and P five hundred for these stocks, so I
Speaker 3: can absolutely.
Speaker 4: Make the case for owning them.
Speaker 3: I'm just arguing that you're not going to get the
Speaker 3: degree of our performance that you've had in recent years,
Speaker 3: and that gives the rest of the world and other sectors,
Speaker 3: you know, maybe a look in that they haven't had.
Speaker 2: Were welcome all of you acrassination and an eventful Monday.
Speaker 2: Futures are eight right now, futures of forty if I
Speaker 2: have a constructive tape here into the Key inflation report
Speaker 2: and Wednesday in the less than an hour, a conversation
Speaker 2: an extended conversation with Andrew Cromo, the former governor of
Speaker 2: the Empire State. He has chosen to run from mayor.
Speaker 2: We've been interviewing the different may world candidates and this
Speaker 2: really heated primary of the Democratic Party towards the November
Speaker 2: for election. We'll do that here in about fifty minutes.
Speaker 2: Ben Laidler with us here with Bradesco BBI. We welcome
Speaker 2: all of you across the nation. Serious ExM Apple car play,
Speaker 2: it's Apple day to day.
Speaker 5: Sure there sleep this week now he's out, he's all set.
Speaker 2: Ye, there's Apple day to day and all the busy
Speaker 2: week ahead. Pump yep.
Speaker 5: So absolutely, ben, So, how do we think about just
Speaker 5: valuation in this market? Here in the US? We've had
Speaker 5: this boy, yeah, a big twenty percent decline. We've retraced
Speaker 5: most of that here. Yes, we had a good first
Speaker 5: quarter earnings, but earnings estimates for twenty twenty five have
Speaker 5: come down. Is this an expensive market? Once again?
Speaker 3: I have no problem with these multiples, I guess I
Speaker 3: have a problem arguing though they're gonna got a lot higher. Okay,
Speaker 3: you are on twenty one times earnings, that's still above
Speaker 3: short and long term averages. It's still the most expensive
Speaker 3: market in the world. I think that's justified by these
Speaker 3: double digit earnings numbers. I have a trouble problem arguing
Speaker 3: that it's going to be dramatically higher than that, which
Speaker 3: is why I say, you know, US is fine, but
Speaker 3: it's well, you know, we're looking at a more average
Speaker 3: sort of ten percent return, which.
Speaker 4: Feels terrible when we got used to twenty. But you know,
Speaker 4: it's actually fine.
Speaker 2: It's got Cronner emails in from City Group right now.
Speaker 2: He's got it with his MIDI it's mid year. It's
Speaker 2: not American. How is Krunner doing mid year here doesn't
Speaker 2: feel like mid year. Definitely, Ben Ladlor pc he goes up,
Speaker 2: they go to sixty three hundred and SPX with a
Speaker 2: mid twenty six first take of a below Ladler sixty
Speaker 2: five hundred. I am afraid to ask Ben Laydlor middle
Speaker 2: of next year, where is your SPX? Can you give
Speaker 2: me a seven thousand?
Speaker 3: I think we can have reasonably close what's that? That's
Speaker 3: you know, fifteen ten to fifty percent from here again,
Speaker 3: I think we're going back to average. Average is good,
Speaker 3: It's just.
Speaker 4: Not what we've got used to, the last couple of years.
Speaker 5: Ben talk to us about the earnings out there, because
Speaker 5: I feel like the Fed's not going to do a
Speaker 5: whole lot for us, maybe one or two rate cuts
Speaker 5: in the foreseeable future. So I think I need earnings
Speaker 5: to really move this market higher. Seven percent earning growth
Speaker 5: this year, maybe eleven twelve percent next year. Are those
Speaker 5: numbers solid or do you think there's risk to those
Speaker 5: numbers or maybe even upside.
Speaker 2: I don't know.
Speaker 3: Yeah, I think they're reasonably solid, right. I think what
Speaker 3: we've lived through is this recession scare. I don't think
Speaker 3: we're going to get a recession. I do think we're
Speaker 3: going to get more pedestrian growth. But to Tom's earlier point,
Speaker 3: you know the survivorship bias here. The stocks that we're
Speaker 3: looking at are the best in class. They are global.
Speaker 3: There's a reason why, you know, year after year they've
Speaker 3: been able to push up margins.
Speaker 4: They're just very good at what they do. So I
Speaker 4: wouldn't want to.
Speaker 3: Get better against corporate America. I think sort of normalize growth.
Speaker 4: They're going to be out.
Speaker 2: A doctor s out on live chat and YouTube. Thank
Speaker 2: you for the live chat and YouTube. Really smart. Subscribe
Speaker 2: to Bloomberg podcasts. There to Ben Laydler, he says, look,
Speaker 2: anything over thirteen times is expensive. When we buy a
Speaker 2: twenty eight times Apple or whatever, are are we just
Speaker 2: rationalizing out the terminal value out farther where we're saying
Speaker 2: we're willing to own Apple and we really don't care
Speaker 2: about the next twenty four months. We're buying it for
Speaker 2: twenty twenty eight.
Speaker 3: As I say, forget about the future. Just look at
Speaker 3: what you've delivered in the last quarter. Three times the
Speaker 3: earnings go with the S and P five hundred.
Speaker 2: Only two times earnings versus eight ish as the numbers
Speaker 2: were working. It is amazing.
Speaker 3: I think you can justify current valuations. I'm not sure
Speaker 3: you can justify much higher, which I guess is my
Speaker 3: point for a more average US return. I totally agree
Speaker 3: on the thirteen times. Thirteen times is what you pay
Speaker 3: for the rest of the world. That's why I'm sort
Speaker 3: of bullish on the rest of the world. Again, you know,
Speaker 3: a little bit of a little bit of love goes
Speaker 3: a very long way. Maybe you just need a little
Speaker 3: bit less bad news and you get the valuation rewriting.
Speaker 3: You've already had that valuation rewriting in the US. To
Speaker 3: your point, you need earnings to keep delivering. I think
Speaker 3: they are. But you know, how do you get more
Speaker 3: upside in the US when valuations are high? In earning
Speaker 3: so already resonably high.
Speaker 5: What screens well for you guys this year? I mean
Speaker 5: that probably has changed two or three times this year.
Speaker 5: Given we've had we started the unership level, we sold
Speaker 5: off twenty percent, we've regained most of that. What's screens
Speaker 5: well for you guys these days?
Speaker 3: Again, the rest of the world I think is where
Speaker 3: you get the risk reward. Okay, growth is firming up.
Speaker 3: Interest rates have been cut you're getting some fiscal stimulus,
Speaker 3: and again you're pushing on an open door because currencies
Speaker 3: are cheap and valuations are cheat and you're getting again,
Speaker 3: you don't need a lot of money coming out of
Speaker 3: the US because the US has just got so supersized.
Speaker 3: These other markets have got so small, you know, a
Speaker 3: little bit of ferry dust. And I think that's the
Speaker 3: driver of this of this rest of the world out performance.
Speaker 3: And again I only need to be half right there.
Speaker 3: I'm not betting against the US. I'm just arguing it's
Speaker 3: a more average ten percent environment to.
Speaker 2: Finish ben And this goes to your parchment from London
Speaker 2: School of Economics and under the University of Cambridge. I
Speaker 2: think all of our listeners and viewers in America look
Speaker 2: at the cacophony of the United Kingdom right now and
Speaker 2: go what I'm talking about in newspapers. They can't fund
Speaker 2: the police. A week ago, ten days ago, it was
Speaker 2: migrants across the Channel. The election dynamics of labor reform
Speaker 2: in the United Kingdom is there is there a point
Speaker 2: out there to get to to some form of economic
Speaker 2: post Brexits stability and growth.
Speaker 4: Got a big question. I'm not going to do this
Speaker 4: justice in thirty seconds. I don't know. At least the sunshines.
Speaker 3: No, I don't know, it's at least it's priced for that.
Speaker 3: I guess it is my point. You know, the trouble
Speaker 3: in the UK is UK stocks have really know you
Speaker 3: do the UK Seventy percent of UK stock market revenues
Speaker 3: come from outside the UK, so in some ways UK
Speaker 3: companies are sort of voted with their feet a long
Speaker 3: time ago, and you know plays on the rest of
Speaker 3: the world.
Speaker 4: But my broader point, if you are on eleven twelve.
Speaker 3: Times earnings, which is what UK stocks are, you don't
Speaker 3: need good news. You just need a little bit less
Speaker 3: bad news and I will be down in the UK.
Speaker 3: But I think that's probably the narrative. You know, everybody
Speaker 3: is negative on the UK emerging market. I mean the
Speaker 3: same thing is internationally. I think that is just a
Speaker 3: broader narrative. We just end up with a little bit
Speaker 3: less find news.
Speaker 2: Things very right, Ben Laylor, we don't care. The only
Speaker 2: reason you're here is a transition from clay to grass.
Speaker 2: Can Coco do as well at Wimbledon as she did
Speaker 2: at the French Open.
Speaker 7: We're talking cricket here, No, we don't do cricket. I
Speaker 7: tried cricket with Johan writing eight years ago. No, the tenants,
Speaker 7: I mean it was it was really exciting to see
Speaker 7: Coco take take Roland girls some sports in the UK.
Speaker 7: That's something you definitely don't want to bet against.
Speaker 2: Okay, Ben Laylor, this is a joking being studio more often. Yeah,
Speaker 2: you know, talk about over how often do you get
Speaker 2: to Brazil for Bradesca.
Speaker 4: Once a quarter, once a quarter every term nation?
Speaker 2: Really interesting, Ben Laylor, thank you, thank you so much.
Speaker 2: Really one of the iconic calls in the history of
Speaker 2: Bloomberg Surveillance. On a lonely December twenty fourth of twenty eighteen,
Speaker 2: he whispered Tom by America, Ben Layler, thank you so much.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
Speaker 1: Applecarplay and Android Atto with the Bloomberg Business app, or
Speaker 1: watch us live on YouTube.
Speaker 2: We're wonder something different here with Henrietta Treys Theveda Partners. Henriette,
Speaker 2: I want to note the surprise in an Omaha mayoral
Speaker 2: race this weekend, the surprise in a San Antonio mayoral race.
Speaker 2: There seems to be a trend afoot, and I want
Speaker 2: to bring it back to the mystery of ha Kim
Speaker 2: Jeffries is a potential leader of the Democratic Party nationally.
Speaker 2: Is that possible that the gentleman from New York and
Speaker 2: from New York City would be the party leader.
Speaker 8: I wouldn't say it's just possible. I'd say it's quite likely. Ordinarily,
Speaker 8: when you have one chamber control, one party control all
Speaker 8: every chambers of Congress, you switch twenty five seats in
Speaker 8: the House of Representatives in any cycle, and that goes
Speaker 8: in both directions, Democrats and Republicans. And what happens is
Speaker 8: Americans tend to vote for change and then they don't
Speaker 8: like it when they get so when you have one
Speaker 8: party control like we have right now with Republicans and
Speaker 8: President Trump in office, we've seen how the President galvanizes
Speaker 8: the Democratic base gets turned out to go through the
Speaker 8: roof in a midterm election cycle. And so I very
Speaker 8: much expect what happened in twenty eighteen to happen here
Speaker 8: again next November. And that's what Republicans will start to
Speaker 8: pivot to as we start here.
Speaker 2: Why are the Democrats winning in Omaha, San Antonio, and
Speaker 2: percolating in other areas as well.
Speaker 8: That one was fascinating in Omaha as well. You know,
Speaker 8: they've been trying to unseat the incumbent Republican for four
Speaker 8: straight cycles, so that came as, you know, a huge
Speaker 8: thing to cheer for the Democratic Party, and they're going
Speaker 8: to continue to try to do that. I think Rammanuel
Speaker 8: made some really good points over the weekend. You know,
Speaker 8: he's obviously telegraphing that he might run for president, but
Speaker 8: have a targeting campaign, Go after individual seats and races
Speaker 8: that you think you can win with a well known
Speaker 8: candidate in that particular district, however small it is, and
Speaker 8: whether it's in San Antonio or Nebraska, go for it.
Speaker 5: Henrietta, We've seen some news coming out over the weekend
Speaker 5: from Los Angeles as it relates to immigration deportations and
Speaker 5: then protests and then President ordering the National Guard into
Speaker 5: Los Angeles. How's all of this broader immigration policy from
Speaker 5: President Trump, which has been very effective from his perspective
Speaker 5: and very quick in terms of implementation. How's that playing
Speaker 5: on Capitol Hill and in DC.
Speaker 8: I'm glad you asked. I was actually with some former
Speaker 8: members of Republican leadership at a conference we were all
Speaker 8: speaking at a few weeks back, and one of the
Speaker 8: remarks that really stuck with me was a sentiment from
Speaker 8: a former Speaker of the House or Republican member saying,
Speaker 8: the trouble with the president's immigration agenda is that he
Speaker 8: was too successful, too quickly. And it's interesting to look
Speaker 8: at the data. There's a leak shut off of flow
Speaker 8: of migrants at the southern border, and the President was
Speaker 8: just extraordinarily effective in getting his you know, close the
Speaker 8: border's tactics in place.
Speaker 3: And what that.
Speaker 8: Did, and we saw just before the situation in LA erupted,
Speaker 8: is that immigration had proceeded as a major focus of
Speaker 8: conversation on Capitol Hill, and we'd lost sight of the
Speaker 8: fact that this one big, beautiful bill includes one hundred
Speaker 8: and seventy five billion dollars just for the Judiciary Committee,
Speaker 8: which is immigration enforcement, to roll out over the next
Speaker 8: couple of years. And I think what the dynamic in
Speaker 8: LA does is it shifts the narrative away from Medicaid cuts,
Speaker 8: Medicare cuts, snap cuts, the deficit increases and positions. It's
Speaker 8: squarely where there is going to be a con certed
Speaker 8: focus and new legislation this week from the United States
Speaker 8: Senate Judiciary Committee on exactly these immigration issues. So it
Speaker 8: gives an opening for the President to revert back to
Speaker 8: something that he promised on the campaign trail has already
Speaker 8: delivered and now needs to resuscitate to our mind motors
Speaker 8: that he in fact handled it and now has to
Speaker 8: address another dust up.
Speaker 5: So where are we on this tax and spending bill, Henrietta?
Speaker 5: Obviously the House has made it its point and now
Speaker 5: it's with the Senate. What's the timing and kind of
Speaker 5: what are the big issues that we need to pay
Speaker 5: attention to.
Speaker 8: Sure this rest of this week we're going to see
Speaker 8: four different committees roll out their respective packages. This is
Speaker 8: mostly going to be on the spending sides. As I mentioned,
Speaker 8: Judiciary gets to spend one hundred and seventy five billion dollars.
Speaker 8: I believe they'll roll out their package on Wednesday or Thursday,
Speaker 8: and then next week we'll get into the Senate Finance Committee,
Speaker 8: where the big heart of the packages. That's where the
Speaker 8: Medicaid cuts are and all the tax spending and most
Speaker 8: deficit financing. I think the bill the last week of July.
Speaker 2: Henry de Trace what's the question you would ask Andrew
Speaker 2: Cuomo of New York State.
Speaker 8: Talk to me about states rights? Where does Gavin Newsom
Speaker 8: stand on states rights? I think that's what the courts
Speaker 8: are going to judge on.
Speaker 9: Ask what you would do?
Speaker 8: He was in opposition states rights all day.
Speaker 2: I promise you we will ask set Henrietta Trace. Thank
Speaker 2: you so much for Vada Partners.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
Speaker 1: Auto with the Bloomberg Business App. You can also listen
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Speaker 1: Just say Alexa Play Bloomberg eleven thirty.
Speaker 2: Charles Canter, senior portfolio manager at Newburger Berman. He and
Speaker 2: I can go back and forth on the mistakes we've
Speaker 2: made in our career. It's a long conversation. Charles cantor,
Speaker 2: how do you have humility away from the Meg seven
Speaker 2: when you've got Warner Brothers, Discovery trying to piece together
Speaker 2: you know, the news this morning, it's a time to
Speaker 2: be humble. I guess with the other four hundred eighty
Speaker 2: three stocks, right.
Speaker 9: I think so? I think that look I think we're
Speaker 9: in a market that I would describe as kind of nuanced.
Speaker 9: It frustrates us a bunch when when folks like to
Speaker 9: think about, you know, Magnificent seven and then the other
Speaker 9: four hundred and ninety three companies. I think you want to,
Speaker 9: like we've done a whole career. Is you want to
Speaker 9: kind of look at each company company by company. We've
Speaker 9: been in an environment now for a long time where
Speaker 9: all that mattered was momentum and beta. I'm not sure
Speaker 9: we're still in that environment. I think post the election
Speaker 9: the market started to behave a little bit differently. But
Speaker 9: but I think what gets lost a little bit on
Speaker 9: the Magnificent seven is is there's good reasons why many
Speaker 9: of them, you know, are magnificent. And one thing I'd
Speaker 9: like to point out is when you look at both
Speaker 9: their R and D spend and CAPEX spend on an
Speaker 9: annual basis, these seven companies spend north of nine percent
Speaker 9: of their revenues on R and D, which is north
Speaker 9: of two hundred and fifty billion dollars. To contextualize that amount,
Speaker 9: that's more than the entire healthcare and biotech sectors combined.
Speaker 9: Why do we pick those sectors because those sectors have
Speaker 9: to invest in R and D to replenish their pipelines.
Speaker 4: And then on the balance.
Speaker 9: Sheet side of the ledger, especially pronounced of the last
Speaker 9: couple of years as that built out their AI investments.
Speaker 9: Last year was the first time that they spend more
Speaker 9: than the entire materials, mining, and industrial sectors combined. Why
Speaker 9: do we pick those sectors because those are typically the
Speaker 9: most capal intensive sectors. So at the end of the day,
Speaker 9: lump together these seven companies have incredible optionality on the future.
Speaker 9: That doesn't mean all seven are going to work. It
Speaker 9: doesn't mean we like all seven, but I and the
Speaker 9: way for example, Apple's got there versus the way Meta
Speaker 9: and Google has got there looks completely different. Apple hasn't
Speaker 9: spent any of the capex that I've just responded to.
Speaker 9: They've actually shrunk their capital base, whereas the others have
Speaker 9: invested a lot. And oh, by the way, they've done
Speaker 9: all of that without leveraging their balance sheets, which is
Speaker 9: just astonishing. Go run a model where you spend all
Speaker 9: that money and somehow don't take on leverage.
Speaker 5: So when you think about just big tech in general,
Speaker 5: forget the MAGS seven. I'm not even sure who's in
Speaker 5: the mag seven these days. Big tech has been, as
Speaker 5: long as anybody can remember, been driving these markets higher.
Speaker 5: It's been the leader of these markets. Is that still
Speaker 5: the case? Maybe just by the fact that they're so
Speaker 5: big in the market, it has to be. But can
Speaker 5: they still leave this market?
Speaker 9: They enjoy tremendous scale, and they enjoy tremendous optionality. And
Speaker 9: as we know well in this room, we are in
Speaker 9: innovative lead, entrepreneurial spirit lead dynamic economy, and innovation and
Speaker 9: and entrepreneural spirit has been driving us forward for the
Speaker 9: twenty five years that I've been on the buy side.
Speaker 9: It used to be the Internet, it used to be Cisco,
Speaker 9: it's now the others. And we can get into those
Speaker 9: comparisons as well.
Speaker 2: Do you I mean, I know you're looking at cricket stores,
Speaker 2: Charles Canter with the stupid goverment. Do you use AI?
Speaker 2: This nascent AI we have, We are.
Speaker 9: Using it in increasingly, increasingly increasingly. Remember, all of the
Speaker 9: information I'm privileged to analyze is by law public. We
Speaker 9: have this thing called regulation fair disclosure. And since it's
Speaker 9: all public, it's all available on your favorite AI machine.
Speaker 9: We are using it aggressively at Newburger government to think
Speaker 9: about how to make better decisions. I'm using it personally
Speaker 9: in my life. It's massively productivity enhunting, I think within
Speaker 9: our industry, within Acid Manta. More broadly, I think it's
Speaker 9: going to have a profound impact ten years from today.
Speaker 9: I think the way we think about how we crunch
Speaker 9: data will look fundamentally different. And I have wonderful folks
Speaker 9: on my team, but the speed at which we can
Speaker 9: now look at data versus what it used to look
Speaker 9: like is dramatically different.
Speaker 2: Tom.
Speaker 5: You know, Alex Steel and I were at a B
Speaker 5: and Y Melon conference last week down in Washington, DC.
Speaker 5: To a whole person to a person, the B and
Speaker 5: Y folks that came on our shows that AI is
Speaker 5: the most important thing in their business.
Speaker 2: Here Charles li'sten back, you were acclaimed on Amazon Whole
Speaker 2: Foods and all that. Has that worked out for Amazon?
Speaker 2: I think it has.
Speaker 9: I think it has for sure. I think it gets
Speaker 9: them the last mile. It provided Whole Foods with lots
Speaker 9: of technology. It provided the consumer Whole Foods customer and
Speaker 9: idea that Whole Foods was no longer the most expensive
Speaker 9: ticket in town. But that size of the acquisition was
Speaker 9: I think north of south of ten billion dollars when
Speaker 9: they did it, and so when you look at the
Speaker 9: market capitalization today, it feels very small within the overall context.
Speaker 9: The thing that always amazed me about that transaction was
Speaker 9: was I said, and I wasn't very liked for saying
Speaker 9: it at the time, that Amazon got Whole Foods for free,
Speaker 9: because at that moment when they announced the deal, Amazon's
Speaker 9: share price went up in market capitalization by more than
Speaker 9: the totality of the purchase price of that acquisition. And
Speaker 9: when you look over in time, generally when acquisitions get announced,
Speaker 9: you know, the net present value on the day is negative,
Speaker 9: not positive to the acquiring company.
Speaker 5: Outside of tech, what screens wat for you guys these days.
Speaker 2: It you've got to be nuanced on that.
Speaker 9: Again, I think we spend a lot of time thinking
Speaker 9: about how does technology produce productivity enhancements across sectors? And
Speaker 9: I truly believe we at when we look back ten
Speaker 9: years forward and we look back, I think you're going
Speaker 9: to continue to see this march upwards of operating margins
Speaker 9: in the S and P. I since I've been at Newburg,
Speaker 9: everyone said oberading margins at peak oberating Margins camp peak.
Speaker 9: If you have great management teams running great businesses with
Speaker 9: innovation in a free market.
Speaker 2: Charles Chanter, thank you so much with Newburger Berman greatly appreciated.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also watch us
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Speaker 2: Lisa Mateo the newspapers, It is a joy.
Speaker 10: Okay, we're starting with this ay from Bloomberg screen Time.
Speaker 10: So Lucas Charlrotte. This article about the business behind baseball
Speaker 10: really interesting because it talks about how TV ratings are
Speaker 10: up right. ESPN ratings are up twenty two percent, game
Speaker 10: attendance seven year high in twenty twenty four. I mean,
Speaker 10: Tom Kaney's going to baseball games at the Yankee Stadium.
Speaker 10: But the league is grambling to find this buyer for
Speaker 10: the major TV package because ESPN, set in February, is
Speaker 10: going to end the broadcasting with MLB after the twenty
Speaker 10: twenty five season. And that was earlier than expected, and
Speaker 10: they were paying like five hundred and fifty million dollars
Speaker 10: a year and want to pay less than half that price.
Speaker 2: The downside is when we sat down right behind the
Speaker 2: Red Sox dugout, Missus King turned to me, Paul and said,
Speaker 2: when's halftime. So it's a little a little difficult, folks,
Speaker 2: I tell you. Anyways, Paul, let me translate it for you.
Speaker 2: There's one hundred and sixty two games. I'm guessing the
Speaker 2: NFL at sixteen games eighteen every is it eighteen seventeen eighteen? Well,
Speaker 2: let me do sixteen games because that's my math right now.
Speaker 2: That's ten baseball games for every compressed football game of excitement.
Speaker 2: It just doesn't work.
Speaker 5: No, no, So it's a long season. You build over time.
Speaker 5: Uh and and baseball is a local it's a local
Speaker 5: it's not a national game. So it's all about the local.
Speaker 2: And they said, Lucas said, the regionals, it's like really
Speaker 2: difficult except Yankees and Dodgers.
Speaker 5: Yeah, a few of them still have some good and
Speaker 5: then and the Red Sox, but the regional sports networks
Speaker 5: are just disaster right now.
Speaker 10: I just want to know if you did the y
Speaker 10: m c A dance at the.
Speaker 2: Yes even walked down the road to the front Row
Speaker 2: where you know, I think Mayor Wou was there and
Speaker 2: I had to do the video of the y m
Speaker 2: c A dance in front of them. Yeah, well you're
Speaker 2: sure proud.
Speaker 5: There's gotta be a video about their Lisa.
Speaker 3: I love it.
Speaker 4: I love it.
Speaker 10: Okay, I want to go to this one college graduation
Speaker 10: season right it's starting to wind down. But what actually
Speaker 10: picked up are the scavengers that scooped up those expensive
Speaker 10: items that the graduates left behind, like in the garbage
Speaker 10: rooms and the dumpsters. So for example, like one person
Speaker 10: in an apartment building in Dorm, North Carolina says she
Speaker 10: scooped up like Valentino sneakers that are like almost one
Speaker 10: thousand dollars, incredible toaster, big, you know, tables, luxurious stuff
Speaker 10: when all the.
Speaker 4: Duke students moved out, you know, so that's what you did.
Speaker 10: And then you have people doing dumpster diving at Caltech
Speaker 10: and Pasadena because they're getting thousands of dollars worth of
Speaker 10: books from the recycling center.
Speaker 5: So they're finding likely paid for exactly.
Speaker 10: Got it that are in the dumpster from the recycling
Speaker 10: center that they're taking and then kind of reusing them
Speaker 10: and reselling that.
Speaker 2: There's a headline this weekend. I'll go quickly because we
Speaker 2: got one more in Clark University Worcester, great school to
Speaker 2: lay off thirty percent faculty amid restructuring. It's a challenging
Speaker 2: new college year in nation wide and Morning ninety two
Speaker 2: nine FM and Worcester. What else do you have?
Speaker 10: Get you okay quick one? Those being like paid off? Right,
Speaker 10: it used to be this mark of shane when you
Speaker 10: were laid off, but now it's kind of like this
Speaker 10: badge of honor. This is from Business Insighter. They point
Speaker 10: to a lot of things like people launching newsletters about
Speaker 10: being laid off, workers live streaming it on TikTok, layoff
Speaker 10: influencers now offering advice. LinkedIn has the hashtag open to
Speaker 10: work on top of that, and there's even layoff merch now.
Speaker 10: So before where it was like, oh I got laid off,
Speaker 10: let me just hide, no, there's communities and everyone is
Speaker 10: kind of going around all these people who are laid off.
Speaker 10: So now they have these support groups and everything to
Speaker 10: help them out throughout the tough time. But it's like
Speaker 10: this badge of honor that they have now, like I got.
Speaker 5: Laid off, Well, I think it's going to be a
Speaker 5: uptick in. You know, people in Starbucks, you know, sitting
Speaker 5: there at their laptop looking for jobs or gigging or
Speaker 5: whatever they do.
Speaker 2: I think we'll cover a challenging jobs report on Friday.
Speaker 2: Lisa Mateo, the newspapers, thank you so much.
Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,
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