1 00:00:00,120 --> 00:00:07,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:10,400 --> 00:00:14,160 Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis, 3 00:00:14,160 --> 00:00:16,880 Speaker 2: along with Doug Krisner join us each day for the 4 00:00:16,960 --> 00:00:20,320 Speaker 2: stories making news and moving markets in the Asia Pacific. 5 00:00:20,520 --> 00:00:22,960 Speaker 2: You can subscribe to the show anywhere you get your 6 00:00:23,000 --> 00:00:26,920 Speaker 2: podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and 7 00:00:26,960 --> 00:00:28,360 Speaker 2: the Bloomberg Business app. 8 00:00:28,840 --> 00:00:31,720 Speaker 3: It's hard to imagine that it's really been less than 9 00:00:31,760 --> 00:00:34,480 Speaker 3: twenty four hours a little more actually, since President biden 10 00:00:34,560 --> 00:00:37,519 Speaker 3: stunning exit from the presidential race and with that the 11 00:00:37,800 --> 00:00:42,920 Speaker 3: rapid ascendancy of Vice President Harris. She has quickly consolidated, 12 00:00:43,040 --> 00:00:46,440 Speaker 3: as Ed just pointed out, support from some powerful Democrats. 13 00:00:46,640 --> 00:00:49,080 Speaker 3: She seems on track to win the nomination for sure. 14 00:00:49,560 --> 00:00:51,960 Speaker 3: For a closer look, we are joined by John Lieber. 15 00:00:51,960 --> 00:00:55,000 Speaker 3: He is Seat of Research and Managing director for the 16 00:00:55,120 --> 00:00:58,160 Speaker 3: US AT Eurasia Group. John, thanks for taking time to 17 00:00:58,240 --> 00:01:00,279 Speaker 3: chat with us. I think we can agree this race 18 00:01:00,320 --> 00:01:02,240 Speaker 3: is certainly a lot more interesting now than it was 19 00:01:02,280 --> 00:01:05,880 Speaker 3: a week ago. What's the most important thing for Kamala 20 00:01:05,920 --> 00:01:10,640 Speaker 3: Harris to do between now and the Democratic Convention. 21 00:01:12,440 --> 00:01:15,120 Speaker 4: I think that Kamala Harris starts the general election campaign 22 00:01:15,200 --> 00:01:18,080 Speaker 4: as soon as she can. She's got to define herself 23 00:01:18,080 --> 00:01:21,080 Speaker 4: to the American people. This offers, you know, the actually 24 00:01:21,080 --> 00:01:24,360 Speaker 4: swooping in mid campaign offers a chance for a reset 25 00:01:24,400 --> 00:01:27,160 Speaker 4: and a chance for her to define who she is 26 00:01:27,200 --> 00:01:30,200 Speaker 4: in their eyes, as she's been relatively low profile. And 27 00:01:30,240 --> 00:01:31,720 Speaker 4: then the big thing for her is going to keep 28 00:01:31,720 --> 00:01:33,720 Speaker 4: the focus is going to be keeping the focus on 29 00:01:33,760 --> 00:01:36,399 Speaker 4: Donald Trump, because that is really what she wants this 30 00:01:36,480 --> 00:01:39,280 Speaker 4: election to be about, reminding voters what they didn't like 31 00:01:39,319 --> 00:01:40,920 Speaker 4: about him in twenty twenty. 32 00:01:41,000 --> 00:01:45,360 Speaker 2: Will she be a candidate that speaks about uniting America 33 00:01:45,840 --> 00:01:49,440 Speaker 2: or will it be as you just suggested, tear down 34 00:01:49,760 --> 00:01:50,440 Speaker 2: House Trump. 35 00:01:52,480 --> 00:01:54,720 Speaker 4: I think it's going to be pretty aggressively anti Trump, 36 00:01:54,760 --> 00:01:57,600 Speaker 4: because that's the thing that unites Democrats and that's what 37 00:01:57,800 --> 00:01:59,960 Speaker 4: excites them. And you know, she wins this race by 38 00:02:00,080 --> 00:02:03,040 Speaker 4: getting fifty percent plus one of the electoral College, and 39 00:02:03,040 --> 00:02:04,920 Speaker 4: the way to do that is to get every Democrat 40 00:02:05,000 --> 00:02:07,720 Speaker 4: out to vote, and then you know, make the case 41 00:02:07,760 --> 00:02:10,720 Speaker 4: for independent voters that there's a reason they kicked this 42 00:02:10,760 --> 00:02:12,040 Speaker 4: guy out four years ago. 43 00:02:12,160 --> 00:02:14,320 Speaker 3: What about a vision for the future. How might she 44 00:02:14,600 --> 00:02:16,400 Speaker 3: outline that? 45 00:02:16,400 --> 00:02:18,280 Speaker 4: That's a great question, and you know, I think that 46 00:02:18,400 --> 00:02:21,440 Speaker 4: really hasn't been a focus of the Biden campaign so far. 47 00:02:21,720 --> 00:02:24,560 Speaker 4: And this raises one of the interesting points about Harris 48 00:02:25,000 --> 00:02:27,600 Speaker 4: is that we really don't know what she stands for. 49 00:02:27,919 --> 00:02:31,560 Speaker 4: She sketched out a pretty progressive campaign platform in twenty 50 00:02:31,600 --> 00:02:35,200 Speaker 4: twenty when she lost the Democratic primary, and she really 51 00:02:35,200 --> 00:02:38,359 Speaker 4: hasn't had much of a policy portfolio as vice president. 52 00:02:38,440 --> 00:02:41,000 Speaker 4: So I think that's something that we'll probably hear in 53 00:02:41,040 --> 00:02:43,520 Speaker 4: the coming weeks, but I don't think that's what this 54 00:02:43,560 --> 00:02:44,840 Speaker 4: campaign is going to be about. 55 00:02:45,080 --> 00:02:48,280 Speaker 2: Can she let former President Trump hang himself? I mean, 56 00:02:48,280 --> 00:02:51,400 Speaker 2: he's made some comments about women candidates in the past 57 00:02:51,440 --> 00:02:55,120 Speaker 2: that were kind of in the sexist or racist territory. 58 00:02:55,160 --> 00:02:59,959 Speaker 2: He called Senator Elizabeth Warren Pocahontas, and he called Nicki 59 00:03:00,080 --> 00:03:01,120 Speaker 2: Haley bird brain. 60 00:03:02,480 --> 00:03:05,240 Speaker 4: Well it's worse than that. He's been found civilly liable 61 00:03:05,280 --> 00:03:08,200 Speaker 4: for sexual assault. So the guy's got a terrible history 62 00:03:08,240 --> 00:03:10,240 Speaker 4: with women here. And you know, one of the great, 63 00:03:10,320 --> 00:03:13,959 Speaker 4: great the growing divides in American politics is the gender gap, 64 00:03:14,000 --> 00:03:16,840 Speaker 4: where Republicans are appealing more to men. You saw that 65 00:03:16,919 --> 00:03:19,440 Speaker 4: on display at the convention last week with all the 66 00:03:19,560 --> 00:03:22,600 Speaker 4: wrestling stuff and the MMA stuff, and the Democrats are 67 00:03:22,600 --> 00:03:25,320 Speaker 4: becoming a party that speaks much more to the needs 68 00:03:25,320 --> 00:03:27,760 Speaker 4: of women. So that's a growing divide, and these two 69 00:03:27,800 --> 00:03:30,240 Speaker 4: candidates really typify that. 70 00:03:30,880 --> 00:03:33,400 Speaker 3: She's got a decision to make it very soon, and 71 00:03:33,480 --> 00:03:36,119 Speaker 3: that is going to reveal a lot in terms of 72 00:03:36,200 --> 00:03:39,760 Speaker 3: her judgment and how she thinks when she selects a 73 00:03:39,840 --> 00:03:43,840 Speaker 3: candidate for vice president. Do you have some advice how 74 00:03:43,880 --> 00:03:46,400 Speaker 3: should she approach this? And maybe there are a few 75 00:03:46,480 --> 00:03:49,240 Speaker 3: names that you think would serve her well. 76 00:03:50,720 --> 00:03:53,880 Speaker 4: Vice presidents are typically chosen to complement or shore up 77 00:03:53,920 --> 00:03:57,520 Speaker 4: kind of the weaknesses of each candidate. Biden was chosen 78 00:03:57,520 --> 00:04:00,760 Speaker 4: as Obama's vice president because he had foregn Paul the experience, 79 00:04:01,200 --> 00:04:05,400 Speaker 4: hence brought the loyalty of evangelical Christians, and Harris brought, 80 00:04:05,520 --> 00:04:09,560 Speaker 4: you know, a younger female African American Asian American person 81 00:04:09,600 --> 00:04:12,000 Speaker 4: on the ticket provided so I would suspect what she's 82 00:04:12,000 --> 00:04:14,600 Speaker 4: gonna do is try to diversify the ticket. That means 83 00:04:14,640 --> 00:04:19,039 Speaker 4: finding a white male younger than she who speaks well 84 00:04:19,360 --> 00:04:21,800 Speaker 4: and probably is from a swing state and has a 85 00:04:21,800 --> 00:04:24,200 Speaker 4: future in the Democratic Party. And there just so happens 86 00:04:24,200 --> 00:04:26,200 Speaker 4: to be quite a few of those available to her, 87 00:04:26,520 --> 00:04:29,200 Speaker 4: the most prominent of which I think is probably Josh Shapiro, 88 00:04:29,480 --> 00:04:33,680 Speaker 4: the governor of Pennsylvania, but also Mark Kelly, astronaut senator 89 00:04:33,720 --> 00:04:35,159 Speaker 4: from Arizona. 90 00:04:35,400 --> 00:04:38,680 Speaker 2: Let's slip it around and be fair. How should President 91 00:04:38,760 --> 00:04:40,719 Speaker 2: Trump attack Kamala Harris. 92 00:04:42,080 --> 00:04:44,440 Speaker 4: The attack on Kamala Harris is that she's not qualified 93 00:04:44,440 --> 00:04:47,039 Speaker 4: for the job, is that she's not smart enough to 94 00:04:47,040 --> 00:04:49,200 Speaker 4: be president. That's what they're going to say, and that 95 00:04:49,240 --> 00:04:51,440 Speaker 4: she's out of touch with the American people because she 96 00:04:51,600 --> 00:04:55,159 Speaker 4: is a San Francisco progressive and that could very well work. 97 00:04:55,960 --> 00:04:59,240 Speaker 4: You know, they're gonna paint her as somebody that benefited 98 00:04:59,240 --> 00:05:02,280 Speaker 4: from favoritism over the course of her career, hasn't done 99 00:05:02,360 --> 00:05:05,080 Speaker 4: much to distinguish herself and doesn't deserve to be running 100 00:05:05,080 --> 00:05:07,719 Speaker 4: for president. Is only there because she kind of failed 101 00:05:07,760 --> 00:05:08,640 Speaker 4: upward under Biden. 102 00:05:09,560 --> 00:05:11,880 Speaker 3: So, as I mentioned at the top, it's been a 103 00:05:11,880 --> 00:05:14,239 Speaker 3: little more than twenty four hours. In that time, Kamala 104 00:05:14,279 --> 00:05:17,760 Speaker 3: Harris has raised a little more than eighty million dollars. 105 00:05:17,760 --> 00:05:20,840 Speaker 3: We don't have any polling data yet. Would you care 106 00:05:20,920 --> 00:05:24,440 Speaker 3: to hazard a guess as to what the polls may 107 00:05:24,480 --> 00:05:27,800 Speaker 3: indicate as soon as they kind of are revealed later 108 00:05:27,839 --> 00:05:28,360 Speaker 3: this week. 109 00:05:28,720 --> 00:05:30,599 Speaker 4: So it's interesting because all of this is happening in 110 00:05:30,640 --> 00:05:32,560 Speaker 4: the context of Trump getting a little bit of a 111 00:05:32,640 --> 00:05:36,160 Speaker 4: polling bounce after the assassination attempt. So this has actually 112 00:05:36,160 --> 00:05:39,920 Speaker 4: been and any pulling bounce he might get from the convention, 113 00:05:40,040 --> 00:05:42,440 Speaker 4: So this has actually been probably his best moment of 114 00:05:42,480 --> 00:05:45,720 Speaker 4: the campaign so far. But now suddenly what you see 115 00:05:45,760 --> 00:05:48,640 Speaker 4: is typically after these campaign events is a lot of 116 00:05:48,720 --> 00:05:51,839 Speaker 4: energy where Democrats are answering their phones and Republicans aren't. 117 00:05:52,000 --> 00:05:53,680 Speaker 4: So I would expect to see Harris come out of 118 00:05:53,720 --> 00:05:57,000 Speaker 4: the gates quite strongly in public opinion polls and Trump 119 00:05:57,080 --> 00:05:59,520 Speaker 4: start to fade a little bit leading up to a 120 00:05:59,600 --> 00:06:01,719 Speaker 4: debate between the two, which is going to be probably 121 00:06:01,760 --> 00:06:03,800 Speaker 4: the most important event on the campaign trail. 122 00:06:04,240 --> 00:06:06,800 Speaker 2: Okay, quick one, you got twenty seconds. Who's going to win? 123 00:06:09,000 --> 00:06:09,320 Speaker 1: Right now? 124 00:06:09,360 --> 00:06:10,800 Speaker 4: I bet on Trump. I mean I think that he's 125 00:06:10,800 --> 00:06:13,240 Speaker 4: got the advantage. He's leading on top issues and Harris 126 00:06:13,240 --> 00:06:15,880 Speaker 4: still has the baggage of inflation and the Biden administration, 127 00:06:16,000 --> 00:06:18,040 Speaker 4: but she could turn that around. Like I said, this 128 00:06:18,080 --> 00:06:19,440 Speaker 4: is an opportunity for a reset. 129 00:06:19,680 --> 00:06:22,680 Speaker 3: John, we appreciate your time, thanks for joining us tonight. 130 00:06:22,920 --> 00:06:25,240 Speaker 3: In the US John Lieber is head of Research and 131 00:06:25,320 --> 00:06:28,520 Speaker 3: he's also managing director for the US at Eurasia Group. 132 00:06:36,480 --> 00:06:40,920 Speaker 2: Margie Patel, Senior portfolio Manager, multi Asset Solutions at all 133 00:06:40,960 --> 00:06:44,800 Speaker 2: Spring Global Investments. Margie, always a pleasure to have you 134 00:06:44,880 --> 00:06:47,800 Speaker 2: on this program. Let me get a little colorful with 135 00:06:47,880 --> 00:06:50,960 Speaker 2: the first question. Can we sends we had a big 136 00:06:51,040 --> 00:06:54,360 Speaker 2: rally today? Can we sense a little by America in 137 00:06:54,400 --> 00:06:58,359 Speaker 2: this in that it looks more like an interesting election 138 00:06:58,600 --> 00:07:02,240 Speaker 2: now coming up in November? No longer two old white guys, 139 00:07:02,480 --> 00:07:05,359 Speaker 2: now one old white guy and a woman who is 140 00:07:05,440 --> 00:07:08,880 Speaker 2: also a person of color. Is there any sense of 141 00:07:08,920 --> 00:07:10,960 Speaker 2: that in the flows that we saw today. 142 00:07:12,120 --> 00:07:14,480 Speaker 5: I really couldn't discern that. I think it was more 143 00:07:14,560 --> 00:07:17,960 Speaker 5: a bounce back from last week, which was extreme nervousness 144 00:07:17,960 --> 00:07:21,400 Speaker 5: anxiety over what will the second quarter earnings look like, 145 00:07:21,520 --> 00:07:24,440 Speaker 5: especially for tech. So we had those big drops in 146 00:07:24,480 --> 00:07:26,040 Speaker 5: a lot of the names that had done so well 147 00:07:26,080 --> 00:07:28,440 Speaker 5: in the first half, and we had a pretty much 148 00:07:28,480 --> 00:07:31,120 Speaker 5: a bounce back today, And I think now we're really 149 00:07:31,160 --> 00:07:33,760 Speaker 5: going to start to see those names roll out tomorrow. 150 00:07:33,840 --> 00:07:36,920 Speaker 5: We have Alphabet for example, we have Tesla, and so 151 00:07:37,000 --> 00:07:40,360 Speaker 5: that'll really be an indicator of what's going to happen. 152 00:07:40,360 --> 00:07:41,600 Speaker 5: But I think once again, it's going. 153 00:07:41,520 --> 00:07:43,720 Speaker 3: To be a good quarter so we have the PCE 154 00:07:44,000 --> 00:07:46,200 Speaker 3: obviously at the end of the week that Fed's preferred 155 00:07:46,320 --> 00:07:50,640 Speaker 3: measure of inflation. The Bloomberg forecast is looking for something 156 00:07:50,680 --> 00:07:52,760 Speaker 3: that's very, very small, And when you look at the 157 00:07:52,760 --> 00:07:55,160 Speaker 3: core PCE only a tenth of one percent for the 158 00:07:55,160 --> 00:07:57,800 Speaker 3: month of June. Are you confident that we're going to 159 00:07:57,800 --> 00:08:01,040 Speaker 3: get at least two rate cuts from the before the end. 160 00:08:01,000 --> 00:08:01,400 Speaker 1: Of the year. 161 00:08:02,240 --> 00:08:04,280 Speaker 5: You know, I actually think it looks much more likely 162 00:08:04,320 --> 00:08:08,000 Speaker 5: that we'll get at least two because inflation is going 163 00:08:08,040 --> 00:08:10,160 Speaker 5: the way that they would like to see number one. 164 00:08:10,360 --> 00:08:13,600 Speaker 5: But also there are signs in the economy that the 165 00:08:13,640 --> 00:08:17,400 Speaker 5: economy is slowing down. Unemployment, they'd be going up a bit. 166 00:08:18,000 --> 00:08:20,600 Speaker 5: Housing looks as if it's stalled out. So I think 167 00:08:20,640 --> 00:08:24,160 Speaker 5: they may be just as concerned about the economic growth 168 00:08:24,200 --> 00:08:27,120 Speaker 5: as they are about inflation. And I think, in fact, 169 00:08:27,160 --> 00:08:29,640 Speaker 5: I think Powell even referred to that what keeps up 170 00:08:29,640 --> 00:08:32,360 Speaker 5: in night is what's happening to labor. So I would 171 00:08:32,559 --> 00:08:34,760 Speaker 5: think that they'd be much more sensitive to these little 172 00:08:34,800 --> 00:08:37,480 Speaker 5: glimmers here and there. Let's say the economy is discelerating, 173 00:08:37,920 --> 00:08:40,640 Speaker 5: and even if inflation isn't exactly what they like, I 174 00:08:40,640 --> 00:08:43,520 Speaker 5: think that will encourage them maybe even before September to 175 00:08:43,600 --> 00:08:44,439 Speaker 5: make a cut. 176 00:08:45,679 --> 00:08:49,280 Speaker 2: If your ball, today's action was pleasing because it was 177 00:08:49,320 --> 00:08:53,240 Speaker 2: a little less about rotation and more about broadening with 178 00:08:53,600 --> 00:08:56,240 Speaker 2: a rising tide lifting all boats. You not only had 179 00:08:57,000 --> 00:09:01,400 Speaker 2: the Russell two thousand up, but you also had the megacaps. 180 00:09:02,520 --> 00:09:04,160 Speaker 2: What was the sort of thinking behind that? 181 00:09:05,080 --> 00:09:08,600 Speaker 5: Well, I think you've had the small caps like so badly. 182 00:09:08,640 --> 00:09:10,960 Speaker 5: I think we again, as part of the sort of 183 00:09:10,960 --> 00:09:13,840 Speaker 5: nervousness about the trend of the market for the rest 184 00:09:13,880 --> 00:09:17,440 Speaker 5: of the year, bounce up. But I think the fundamentals, frankly, 185 00:09:17,480 --> 00:09:21,040 Speaker 5: are still with the large cap companies and large cap 186 00:09:21,120 --> 00:09:26,360 Speaker 5: tech companies, communications companies. So I take the broadening out 187 00:09:26,400 --> 00:09:28,640 Speaker 5: with small cap with a grain of salt. I think 188 00:09:28,640 --> 00:09:30,520 Speaker 5: that the best return is still going to be those 189 00:09:30,600 --> 00:09:33,560 Speaker 5: larger companies because they're going to have the fundamentals behind 190 00:09:33,600 --> 00:09:37,640 Speaker 5: them and actually have growth that's better than any other sector. 191 00:09:38,240 --> 00:09:40,760 Speaker 3: So I'm curious Margie, to get your take on the 192 00:09:40,800 --> 00:09:43,480 Speaker 3: path of the dollar. We talked about your expectations for 193 00:09:43,720 --> 00:09:46,920 Speaker 3: cuts and interest rates. The path of the dollar going forward, 194 00:09:47,440 --> 00:09:49,960 Speaker 3: it would appear would be to the weak side, And 195 00:09:50,000 --> 00:09:54,000 Speaker 3: then I'm also curious about how that may inform your 196 00:09:54,040 --> 00:09:58,840 Speaker 3: thesis on investing strategies, and particularly in international companies that 197 00:09:58,880 --> 00:10:00,520 Speaker 3: may benefit from a dollar. 198 00:10:01,559 --> 00:10:04,000 Speaker 5: Well, I think that there's really a limit to any 199 00:10:04,200 --> 00:10:06,960 Speaker 5: weakening the dollar. I think that'll be very, very small, 200 00:10:07,000 --> 00:10:09,640 Speaker 5: because at the end of the day, it's still the 201 00:10:09,679 --> 00:10:13,240 Speaker 5: safest place for investors to put their money. And so 202 00:10:13,320 --> 00:10:16,000 Speaker 5: I think that particularly when you look around the world 203 00:10:16,200 --> 00:10:19,680 Speaker 5: and most countries are having very very sluggish growth, maybe 204 00:10:19,679 --> 00:10:24,000 Speaker 5: even recession, wrestling with very high budget deficits as we are, 205 00:10:24,120 --> 00:10:26,000 Speaker 5: So I think that's going to keep a floor under 206 00:10:26,320 --> 00:10:28,360 Speaker 5: how much of a weekend you could actually have in 207 00:10:28,440 --> 00:10:28,880 Speaker 5: the dollar. 208 00:10:30,280 --> 00:10:33,920 Speaker 2: One of the other interesting things I noted today was Verizon, 209 00:10:34,160 --> 00:10:36,480 Speaker 2: which is a company that a lot of people might 210 00:10:36,480 --> 00:10:39,120 Speaker 2: have been buying because it offered a high dividend and 211 00:10:39,160 --> 00:10:42,960 Speaker 2: it has the kind of subscription like cash flows of 212 00:10:43,040 --> 00:10:46,440 Speaker 2: Verizon missed revenue estimates today and sold down six percent. 213 00:10:46,800 --> 00:10:49,959 Speaker 2: I mentioned this more on the dividend side than the company, 214 00:10:50,040 --> 00:10:53,240 Speaker 2: so I'm not asking you to comment specifically about Verizon, 215 00:10:53,280 --> 00:10:55,800 Speaker 2: but it does show kind of the dangers of buying 216 00:10:56,480 --> 00:10:59,760 Speaker 2: stocks that you think our quality with a good solid dividend, 217 00:11:00,000 --> 00:11:02,199 Speaker 2: they can miss too, and then you can wipe out 218 00:11:02,200 --> 00:11:03,480 Speaker 2: the dividend one fell swoop. 219 00:11:04,280 --> 00:11:06,320 Speaker 5: Well, that's right, and in fact, that's really been the 220 00:11:06,400 --> 00:11:09,440 Speaker 5: story ever since the FED began raising rates in twenty two. 221 00:11:10,360 --> 00:11:15,240 Speaker 5: Many investors look for defensive companies, lowkee, high dividend yield 222 00:11:15,720 --> 00:11:19,000 Speaker 5: and really got left behind because those kinds of companies 223 00:11:19,000 --> 00:11:22,679 Speaker 5: have had the poorest performers by long shot compared to 224 00:11:22,760 --> 00:11:26,840 Speaker 5: the sectors. So I think it's still not a strategy 225 00:11:26,880 --> 00:11:29,880 Speaker 5: to make money. I think it's still been a money 226 00:11:29,960 --> 00:11:33,920 Speaker 5: erosion strategy. It's better to look for growth, good fundamentals, 227 00:11:34,400 --> 00:11:37,400 Speaker 5: and take a less dividend because you'll get much more 228 00:11:37,400 --> 00:11:38,439 Speaker 5: in capital appreciation. 229 00:11:38,920 --> 00:11:42,240 Speaker 3: Margy, are you finding opportunities that are interesting in offshore 230 00:11:42,320 --> 00:11:43,440 Speaker 3: markets these days? 231 00:11:44,040 --> 00:11:47,280 Speaker 5: Well, I think the US is the best economy and 232 00:11:47,360 --> 00:11:51,840 Speaker 5: I think we're gaining relative strength, particularly with reshoring. You 233 00:11:51,880 --> 00:11:55,800 Speaker 5: can see that China is on as a really a 234 00:11:55,840 --> 00:11:58,960 Speaker 5: descent lower and lower growth. Lots of problems there and 235 00:11:59,000 --> 00:12:01,199 Speaker 5: that feeds out into a lot of the emerging markets, 236 00:12:01,240 --> 00:12:04,280 Speaker 5: the weakness from China. So we still think US is 237 00:12:04,360 --> 00:12:06,400 Speaker 5: best and that's where the best companies are and the 238 00:12:06,400 --> 00:12:07,679 Speaker 5: best opportunities are. 239 00:12:08,080 --> 00:12:10,840 Speaker 2: But Margie, if you like megacap and it sounds like 240 00:12:10,880 --> 00:12:13,559 Speaker 2: you do, for all the reasons that you've already stated, 241 00:12:14,160 --> 00:12:16,280 Speaker 2: How can you not like TSMC, how can you not 242 00:12:16,440 --> 00:12:18,960 Speaker 2: like Samsung and some of these other type companies that 243 00:12:19,320 --> 00:12:21,480 Speaker 2: just aren't based in the US, they're based in Asia. 244 00:12:22,440 --> 00:12:25,840 Speaker 5: Well, yes, I think those I think that clearly those 245 00:12:25,880 --> 00:12:31,920 Speaker 5: companies in Taiwan are very very attractive and they will 246 00:12:31,960 --> 00:12:35,000 Speaker 5: continue to be I think good companies. But so many 247 00:12:35,040 --> 00:12:38,600 Speaker 5: companies in the US it do rely on the Asian 248 00:12:38,679 --> 00:12:43,920 Speaker 5: companies to supply them. I think will still be good 249 00:12:43,920 --> 00:12:48,400 Speaker 5: investments because I think they still can have the growth 250 00:12:48,760 --> 00:12:51,520 Speaker 5: and the demand. So we're not too worried about those. 251 00:12:51,760 --> 00:12:53,600 Speaker 3: We were talking a moment ago about the earnings that 252 00:12:53,600 --> 00:12:56,920 Speaker 3: we'll get tomorrow from Alphabet and Tesla. How are you 253 00:12:57,720 --> 00:13:01,280 Speaker 3: positioned these days, let's say, in the megacap tech space, 254 00:13:01,640 --> 00:13:04,480 Speaker 3: is this something that you still want to be exposed 255 00:13:04,520 --> 00:13:07,079 Speaker 3: to in a major way or are you reducing your exposure. 256 00:13:08,360 --> 00:13:11,640 Speaker 5: We had made a very very small reduction in the 257 00:13:12,480 --> 00:13:16,719 Speaker 5: in the megacap names over the last months, feeling that 258 00:13:16,760 --> 00:13:19,240 Speaker 5: they really had performed about as well as you could 259 00:13:19,280 --> 00:13:21,720 Speaker 5: possibly expect, and we're due for a little correction, But 260 00:13:22,000 --> 00:13:24,600 Speaker 5: you know, fundamentally they still have the growth, They still 261 00:13:24,640 --> 00:13:27,520 Speaker 5: have better growth than any other sector out there. So 262 00:13:27,600 --> 00:13:30,520 Speaker 5: when you look about where you can get out of 263 00:13:30,559 --> 00:13:34,160 Speaker 5: these mega tech names, high growth, high quality, where what 264 00:13:34,320 --> 00:13:37,840 Speaker 5: other sector can you go to? And really they're frankly 265 00:13:38,200 --> 00:13:41,199 Speaker 5: or far and few between, maybe a few industrial companies, 266 00:13:41,400 --> 00:13:44,640 Speaker 5: a few things on the communication side that basically we 267 00:13:44,720 --> 00:13:47,079 Speaker 5: think that those companies are still going to be the 268 00:13:47,160 --> 00:13:48,840 Speaker 5: leaders for the rest of the year. 269 00:13:50,080 --> 00:13:51,760 Speaker 2: So I note here that you like some of the 270 00:13:51,880 --> 00:13:56,320 Speaker 2: independent power producers like Eaton. One of the things that's 271 00:13:56,360 --> 00:13:58,640 Speaker 2: happened with then though, is there they seem to be 272 00:13:58,720 --> 00:14:02,680 Speaker 2: kind of you know, maxed out on valuations, so you 273 00:14:02,679 --> 00:14:06,079 Speaker 2: don't worried about those high valuations. They've got forward pees 274 00:14:06,160 --> 00:14:07,760 Speaker 2: up there around thirty ish. 275 00:14:07,840 --> 00:14:10,880 Speaker 5: Well, you know, it's interesting that some of the industrial 276 00:14:10,920 --> 00:14:17,480 Speaker 5: companies like Eating, like Parker Hanniffon have actually performances here 277 00:14:17,559 --> 00:14:20,640 Speaker 5: that's equivalent even better than many of our tech names. 278 00:14:21,280 --> 00:14:23,800 Speaker 5: And because there are in nose sectors in the industrial 279 00:14:23,840 --> 00:14:26,440 Speaker 5: markets that are going to have very high growth. They're 280 00:14:26,520 --> 00:14:32,360 Speaker 5: tied into fortifying the electrical grid, expanding that, increasing that 281 00:14:32,960 --> 00:14:38,240 Speaker 5: more technology incorporated in products, aerospace, and so those actually 282 00:14:38,320 --> 00:14:40,840 Speaker 5: are very very attractive sectors. So we like those in 283 00:14:40,880 --> 00:14:43,880 Speaker 5: the industrial space because they have the same growth characteristic 284 00:14:44,720 --> 00:14:46,920 Speaker 5: the tech space has, yes. 285 00:14:47,280 --> 00:14:50,400 Speaker 2: And obviously tied a lot to powering data centers, so 286 00:14:50,560 --> 00:14:53,560 Speaker 2: kind of tied into that AI trade. Margie, thank you 287 00:14:53,640 --> 00:15:05,400 Speaker 2: Margie Patel from all Spring Global Investments. Thomas J. Hayes, 288 00:15:05,520 --> 00:15:10,280 Speaker 2: Chairman and managing member Great Hill Capital, Thomas Doug mentioned 289 00:15:10,280 --> 00:15:14,080 Speaker 2: it and Tom just reported on it. Earnings will be 290 00:15:14,400 --> 00:15:17,520 Speaker 2: a major focus coming up. I heard this this morning 291 00:15:17,560 --> 00:15:20,200 Speaker 2: that if you strip out Tesla, the Magnificent six is 292 00:15:20,240 --> 00:15:23,960 Speaker 2: expecting earnings up thirty percent year on year, the other 293 00:15:23,960 --> 00:15:27,920 Speaker 2: four hundred and ninety four about five percent. What do 294 00:15:27,960 --> 00:15:28,640 Speaker 2: you choose. 295 00:15:28,400 --> 00:15:32,600 Speaker 6: From, Well, you know, this is the reason that we 296 00:15:32,680 --> 00:15:36,440 Speaker 6: see a lot of skepticism around this violent rotation that 297 00:15:36,520 --> 00:15:37,960 Speaker 6: started about a week and a half ago. 298 00:15:38,040 --> 00:15:38,320 Speaker 1: Brian. 299 00:15:38,360 --> 00:15:39,760 Speaker 6: A lot of people think this is going to be 300 00:15:39,760 --> 00:15:43,600 Speaker 6: a fake out, but actually what you're seeing is a deceleration. 301 00:15:43,840 --> 00:15:46,880 Speaker 6: So if you thought that difference was big for this quarter, 302 00:15:47,280 --> 00:15:50,280 Speaker 6: back in Q one it was fifty percent earnings growth 303 00:15:50,320 --> 00:15:53,600 Speaker 6: for the Magnificent seven and negative one percent for the 304 00:15:53,760 --> 00:15:57,360 Speaker 6: Unmagnificent four ninety three, And by the end of the year, 305 00:15:57,520 --> 00:16:00,400 Speaker 6: fourth quarter, it's going to completely flip on it head. 306 00:16:00,720 --> 00:16:04,280 Speaker 6: You're going to see seventeen percent earnings growth for the 307 00:16:04,280 --> 00:16:08,400 Speaker 6: Magnificent seven and nineteen percent for the Unmagnificent four ninety three. 308 00:16:08,440 --> 00:16:09,040 Speaker 1: And that's why we. 309 00:16:09,000 --> 00:16:14,240 Speaker 6: Think this rotation is real and it is durable because 310 00:16:14,280 --> 00:16:18,000 Speaker 6: it's underpinned by earnings and fed cuts coming to a 311 00:16:18,040 --> 00:16:18,920 Speaker 6: theater near you. 312 00:16:20,400 --> 00:16:23,480 Speaker 3: Will that be amplified when we hear when we get 313 00:16:23,520 --> 00:16:25,880 Speaker 3: the guidance from these big tech companies. 314 00:16:26,520 --> 00:16:30,160 Speaker 6: I think, so, Look, they've had a tremendous amount of capbacks. 315 00:16:30,400 --> 00:16:34,600 Speaker 6: They're all racing to hoard the GPU chips and you know, 316 00:16:34,360 --> 00:16:38,440 Speaker 6: you saw the article the six hundred billion dollar question. 317 00:16:38,800 --> 00:16:41,240 Speaker 6: Where are they going to get the revenues to support 318 00:16:41,320 --> 00:16:43,680 Speaker 6: all the spend on GPUs that they've all been trying 319 00:16:43,720 --> 00:16:47,280 Speaker 6: to hoard from Nvidia and pull forward all of that demand. 320 00:16:48,280 --> 00:16:51,280 Speaker 6: The revenues simply don't support it. So I think that's 321 00:16:51,320 --> 00:16:56,040 Speaker 6: going to support the dceleration story. Albeit they'll be great 322 00:16:56,080 --> 00:16:58,720 Speaker 6: earnings and they'll be great earnings growth, it will just 323 00:16:58,760 --> 00:17:00,920 Speaker 6: be at a lower pace while the rest of the 324 00:17:00,960 --> 00:17:05,040 Speaker 6: market goes from negative earnings growth back into positive earnings growth. 325 00:17:05,280 --> 00:17:08,840 Speaker 6: And so what we could see is the indices market 326 00:17:08,840 --> 00:17:11,440 Speaker 6: cap weighted like S and P five hundred more subdued 327 00:17:11,520 --> 00:17:15,200 Speaker 6: because the heaviest weights will be consolidating, while under the 328 00:17:15,240 --> 00:17:17,680 Speaker 6: surface will be tremendous opportunities to make money. 329 00:17:17,760 --> 00:17:19,639 Speaker 2: Yeah, so it'll look like an average day, but you 330 00:17:19,680 --> 00:17:24,960 Speaker 2: actually made money. However, However, your thesis, while I love it, 331 00:17:25,280 --> 00:17:29,040 Speaker 2: if it turns out to be true, it's quite dependent. 332 00:17:29,080 --> 00:17:31,080 Speaker 2: Don't you think on growth holding up? 333 00:17:32,560 --> 00:17:34,439 Speaker 1: It is, There's no question about it. 334 00:17:34,480 --> 00:17:37,440 Speaker 6: I mean, even if you look deeply under the surface, 335 00:17:37,440 --> 00:17:41,879 Speaker 6: that small cap earnings growth, which have had really not 336 00:17:42,119 --> 00:17:45,320 Speaker 6: strong earnings growth four point one percent expected for this year, 337 00:17:45,560 --> 00:17:49,240 Speaker 6: that's going to accelerate up to seventeen point seven percent 338 00:17:49,400 --> 00:17:50,000 Speaker 6: next year. 339 00:17:50,280 --> 00:17:51,959 Speaker 1: So that is a sign of growth. 340 00:17:52,000 --> 00:17:54,320 Speaker 6: And the underpinning of this that not a lot of 341 00:17:54,320 --> 00:17:57,240 Speaker 6: people are talking about Brian and Doug is the de 342 00:17:57,600 --> 00:18:01,520 Speaker 6: stocking cycle is about over for many companies. 343 00:18:01,560 --> 00:18:04,080 Speaker 1: You've heard in the last one two, three quarters. 344 00:18:03,960 --> 00:18:07,359 Speaker 6: That's done, and the restocking cycle and the capex cycle 345 00:18:07,560 --> 00:18:08,840 Speaker 6: is just picking up. 346 00:18:09,119 --> 00:18:11,879 Speaker 1: And then you have all the reshoring to support it. 347 00:18:12,320 --> 00:18:17,480 Speaker 6: And manufacturing, which has been in a clear recession for 348 00:18:17,560 --> 00:18:21,520 Speaker 6: over two years, is now starting to show signs of buoyancy. 349 00:18:21,640 --> 00:18:23,919 Speaker 6: So all of these things under the surface point to 350 00:18:24,480 --> 00:18:28,280 Speaker 6: healthier markets not just controlled by a handful of stocks 351 00:18:28,280 --> 00:18:31,120 Speaker 6: like we saw in the first half, five stocks generated 352 00:18:31,160 --> 00:18:32,880 Speaker 6: sixty percent of the S and P returns. 353 00:18:32,960 --> 00:18:35,280 Speaker 3: So when I hear that, then I'm wondering why should 354 00:18:35,280 --> 00:18:37,440 Speaker 3: the FED be aggressive and cutting interest rates. 355 00:18:38,400 --> 00:18:42,720 Speaker 6: Well, you do have slowing in the labor force, which 356 00:18:42,800 --> 00:18:45,199 Speaker 6: is problematic. The key here is if you let it 357 00:18:45,240 --> 00:18:48,399 Speaker 6: go too long, it becomes too costly to fix. So 358 00:18:48,880 --> 00:18:51,400 Speaker 6: we're of the view that if they move in September, 359 00:18:51,440 --> 00:18:54,240 Speaker 6: as the market consensus is pointing to ninety eight or 360 00:18:54,280 --> 00:18:56,439 Speaker 6: one hundred percent, depending on the day you look at it, 361 00:18:56,800 --> 00:18:59,280 Speaker 6: chance of a cut. It may be more of a 362 00:18:59,320 --> 00:19:02,520 Speaker 6: mid cycle soft landing where one or two cuts could 363 00:19:02,520 --> 00:19:05,359 Speaker 6: be sufficient, maybe three cuts if they let it go 364 00:19:05,480 --> 00:19:09,199 Speaker 6: much past that. I think the acceleration in the softening 365 00:19:09,640 --> 00:19:12,520 Speaker 6: in the labor market, and the deceleration now that we're 366 00:19:12,520 --> 00:19:16,520 Speaker 6: seeing some of the audio insurance come down owner's equivalent 367 00:19:16,840 --> 00:19:21,280 Speaker 6: rant start to catch up on a lag basis, Inflation 368 00:19:21,440 --> 00:19:24,360 Speaker 6: is a much easier problem to solve than deflation. Deflation 369 00:19:24,480 --> 00:19:27,160 Speaker 6: is costly, it's long lasting, it hurts a lot of people. 370 00:19:27,560 --> 00:19:28,040 Speaker 1: Inflation. 371 00:19:28,200 --> 00:19:30,400 Speaker 6: If they move too early, they could always hike again. 372 00:19:30,480 --> 00:19:32,119 Speaker 6: I know they don't want to do that, and I 373 00:19:32,160 --> 00:19:35,960 Speaker 6: think the probability that is extremely low. Hike early, you 374 00:19:36,000 --> 00:19:38,160 Speaker 6: won't have to hike as much, and let's keep things 375 00:19:38,160 --> 00:19:39,040 Speaker 6: on steady footing. 376 00:19:39,440 --> 00:19:41,800 Speaker 2: Now we know what happens when too many people load 377 00:19:41,880 --> 00:19:44,200 Speaker 2: up on one side of the boat. At some point 378 00:19:44,240 --> 00:19:46,040 Speaker 2: I have to rush to the other side, and it 379 00:19:46,080 --> 00:19:48,800 Speaker 2: really causes a lot of sloshing around. You say, the 380 00:19:48,920 --> 00:19:52,919 Speaker 2: foremost crowded trades are long the Magnificent seven, short end, 381 00:19:53,000 --> 00:19:56,760 Speaker 2: short China, and short small caps. So would you flip 382 00:19:56,800 --> 00:19:59,720 Speaker 2: all of those on their head and we'll see how 383 00:20:00,040 --> 00:20:02,800 Speaker 2: old you are if you're ready to short the Magnificent seven. 384 00:20:03,840 --> 00:20:06,680 Speaker 6: Well, I wouldn't short the Magnificent seven, But I do 385 00:20:06,800 --> 00:20:10,840 Speaker 6: think what's going to happen is they're going to underperform 386 00:20:11,160 --> 00:20:14,440 Speaker 6: relative to the unmagnificent four ninety three that are just 387 00:20:14,560 --> 00:20:16,960 Speaker 6: catching a bid finally because their earnings growth is starting 388 00:20:17,000 --> 00:20:20,040 Speaker 6: to support that bid. So I think you're going to 389 00:20:20,080 --> 00:20:22,320 Speaker 6: see some underperformance in those crowded trades. Some of them 390 00:20:22,359 --> 00:20:26,359 Speaker 6: will probably cool off, but on balance, maybe consolidate performance 391 00:20:26,400 --> 00:20:28,200 Speaker 6: for four to six to nine months. 392 00:20:29,320 --> 00:20:31,800 Speaker 2: The short which of those four? Which of those four 393 00:20:31,880 --> 00:20:35,679 Speaker 2: look best to attack? Would you say, maybe it's shorting 394 00:20:35,760 --> 00:20:37,719 Speaker 2: small caps that that's a good one to flip. 395 00:20:38,440 --> 00:20:39,399 Speaker 1: Oh, one hundred percent. 396 00:20:39,480 --> 00:20:41,560 Speaker 6: You want to be long small small caps for the 397 00:20:41,560 --> 00:20:44,360 Speaker 6: next six to twelve months, and history supports that out 398 00:20:44,400 --> 00:20:48,199 Speaker 6: after the first bed cut. Over the next twelve months, 399 00:20:48,320 --> 00:20:51,280 Speaker 6: small caps outperform large caps since World War Two by 400 00:20:51,280 --> 00:20:54,359 Speaker 6: about eleven percent. So history is on your side with 401 00:20:54,680 --> 00:20:57,800 Speaker 6: long small cap. I think China equities. You know, we 402 00:20:57,800 --> 00:21:01,400 Speaker 6: didn't get the boom we wanted out of the Third Planum. 403 00:21:01,440 --> 00:21:04,320 Speaker 6: However we got the surprise cut this morning. I think 404 00:21:04,320 --> 00:21:06,920 Speaker 6: more to come on the property front, and the valuations 405 00:21:06,960 --> 00:21:09,199 Speaker 6: are simply too cheap. It's been a long wait for 406 00:21:09,240 --> 00:21:11,640 Speaker 6: a year, year and a half dead money. The market's 407 00:21:11,640 --> 00:21:15,200 Speaker 6: been going sideways. You're seeing some smart money selectively start 408 00:21:15,240 --> 00:21:19,400 Speaker 6: to filter into highest quality China equities. I think small 409 00:21:19,440 --> 00:21:22,560 Speaker 6: caps is an easier trade. And then short yen you're 410 00:21:22,600 --> 00:21:25,520 Speaker 6: going to see potentially some intervention, and with the FEDS 411 00:21:25,800 --> 00:21:28,560 Speaker 6: starting to weaken on a relative basis, I wouldn't be 412 00:21:28,560 --> 00:21:30,600 Speaker 6: short yen in the whole here either, to be honest 413 00:21:30,600 --> 00:21:30,800 Speaker 6: with you. 414 00:21:30,920 --> 00:21:33,840 Speaker 3: So maybe I'm going to be short the dollar, particularly 415 00:21:34,160 --> 00:21:36,119 Speaker 3: if you know the Fed is going to cut. In 416 00:21:36,200 --> 00:21:40,120 Speaker 3: your view, maybe as many as three times. And if 417 00:21:40,119 --> 00:21:41,920 Speaker 3: there's going to be a bit of short covering in 418 00:21:42,200 --> 00:21:45,720 Speaker 3: yen because of it being a very crowded trade, and 419 00:21:45,760 --> 00:21:48,159 Speaker 3: at some point the boj is going to move and 420 00:21:48,960 --> 00:21:53,399 Speaker 3: tighten conditions in Japan, is it wise to be short 421 00:21:53,400 --> 00:21:54,439 Speaker 3: the dollar at this point? 422 00:21:55,240 --> 00:21:58,040 Speaker 6: Well, I think you're right, and I wouldn't play it 423 00:21:58,080 --> 00:22:01,280 Speaker 6: explicitly through short dollar, but I would play it. I 424 00:22:01,280 --> 00:22:04,960 Speaker 6: would play it through what benefits from a weakening dollar. 425 00:22:05,080 --> 00:22:08,080 Speaker 6: You're you're you're correct on direction, But what's the best 426 00:22:08,119 --> 00:22:09,040 Speaker 6: way to express it. 427 00:22:09,760 --> 00:22:11,879 Speaker 1: We like international stocks, which you. 428 00:22:11,880 --> 00:22:14,840 Speaker 6: Have underperformed relative to US stocks, and then as it 429 00:22:14,880 --> 00:22:17,919 Speaker 6: relates to rate cuts, we like small caps will benefit, 430 00:22:18,000 --> 00:22:20,440 Speaker 6: cyclicals will benefit, and reaps will benefit. 431 00:22:20,520 --> 00:22:21,640 Speaker 1: Interest rates sensitive. 432 00:22:21,720 --> 00:22:24,879 Speaker 6: So I think the biggest way to play the weakening 433 00:22:25,000 --> 00:22:27,680 Speaker 6: dollar over time is going to be to have some 434 00:22:27,800 --> 00:22:32,719 Speaker 6: international equity exposure, which really, if you're if you're you know, 435 00:22:32,920 --> 00:22:37,080 Speaker 6: biased by recency bias, where international is just underperformed for 436 00:22:37,119 --> 00:22:40,040 Speaker 6: so long. If you zoom out for the last fifty years, 437 00:22:40,040 --> 00:22:42,879 Speaker 6: you've had some meaningful periods of outperformance. And I think 438 00:22:42,920 --> 00:22:44,800 Speaker 6: we're right on the cusp of one right now. The 439 00:22:44,880 --> 00:22:47,560 Speaker 6: band has been stretched to such an extreme level, it 440 00:22:47,600 --> 00:22:48,680 Speaker 6: might be time to take action. 441 00:22:49,119 --> 00:22:51,320 Speaker 2: All right, I've got a million dollars to invest. Give 442 00:22:51,359 --> 00:22:54,359 Speaker 2: me your number one unassailable back up the truck. 443 00:22:54,400 --> 00:22:57,480 Speaker 1: Bet Oh my goodness, this is tough. 444 00:22:57,880 --> 00:23:00,399 Speaker 6: You know. We run a concentrated portfolio. I can't give 445 00:23:00,440 --> 00:23:01,800 Speaker 6: you one, but I'll give you a couple of the 446 00:23:01,880 --> 00:23:05,920 Speaker 6: names that I feel very confident about because we can't 447 00:23:06,040 --> 00:23:08,159 Speaker 6: predict which ones are going to pop first, but we 448 00:23:08,240 --> 00:23:11,280 Speaker 6: know if we use a reliable framework and by quality 449 00:23:11,280 --> 00:23:13,639 Speaker 6: when it's on sale over time, we're going to get 450 00:23:13,680 --> 00:23:17,919 Speaker 6: full value first times correctly. Yeah, we like Disney. Okay, 451 00:23:17,960 --> 00:23:21,240 Speaker 6: that's undervalue. You're basically paying for the parks and consumer 452 00:23:21,280 --> 00:23:24,840 Speaker 6: products and getting the TV, the theatrical and Disney plus 453 00:23:24,880 --> 00:23:27,440 Speaker 6: for free. We think that can go from ninety four 454 00:23:27,480 --> 00:23:29,560 Speaker 6: to one fifty plus over the next few years. And 455 00:23:29,680 --> 00:23:33,360 Speaker 6: GXO Logistics, there was a pull forward on products then 456 00:23:33,400 --> 00:23:36,040 Speaker 6: to services. Now it's becoming more balanced. Their business is 457 00:23:36,080 --> 00:23:38,560 Speaker 6: going to come back to full steam and they're estimating 458 00:23:38,720 --> 00:23:41,120 Speaker 6: nearly doubled Eve it Up by twenty twenty seven. 459 00:23:41,640 --> 00:23:44,679 Speaker 2: All right, Thomas, well done, well executed, Thanks very much 460 00:23:44,720 --> 00:23:48,240 Speaker 2: for joining us here live on the program. Thomas J. Hayes, Chairman, 461 00:23:48,400 --> 00:23:59,560 Speaker 2: managing member, Great Hill Capital. Sandy Breger, chief client Officer 462 00:24:00,160 --> 00:24:03,520 Speaker 2: ESPERCT with this live here on the program. So a 463 00:24:03,560 --> 00:24:07,720 Speaker 2: pretty good bounce here in the market today. I'm curious 464 00:24:07,880 --> 00:24:09,960 Speaker 2: what you see driving now. One thing I would mention 465 00:24:10,119 --> 00:24:12,880 Speaker 2: is that we had had some fears about a little 466 00:24:12,920 --> 00:24:14,800 Speaker 2: bit slower growth and then we've got a pretty strong 467 00:24:14,800 --> 00:24:18,199 Speaker 2: retail sales report. It seems like now that people are 468 00:24:18,200 --> 00:24:21,000 Speaker 2: feeling a little bit more wholesome about the backdrop. 469 00:24:21,040 --> 00:24:21,879 Speaker 1: Do you agree? 470 00:24:22,960 --> 00:24:24,880 Speaker 7: We do agree, Brian, and it's great to be here 471 00:24:24,880 --> 00:24:25,199 Speaker 7: with you. 472 00:24:25,880 --> 00:24:30,000 Speaker 8: We do think the retail sales recovery last month is 473 00:24:30,000 --> 00:24:33,560 Speaker 8: helping things along. It's nice to see consumers out there 474 00:24:33,640 --> 00:24:38,360 Speaker 8: feeling stronger. You know, there's a report within the Michigan 475 00:24:38,440 --> 00:24:42,760 Speaker 8: Survey of Consumer Sentiment that there's a record high thirty 476 00:24:42,800 --> 00:24:45,359 Speaker 8: percent of the US population who have stocks more than 477 00:24:45,359 --> 00:24:49,400 Speaker 8: five hundred thousand, and thirty seven percent owned homes worth 478 00:24:49,440 --> 00:24:51,480 Speaker 8: more than five hundred thousand dollars. So we think that 479 00:24:51,520 --> 00:24:55,120 Speaker 8: there's some pretty good wealth effect that's happening, along with 480 00:24:55,160 --> 00:24:57,959 Speaker 8: some record cash lists from fixed income, which is helping 481 00:24:58,440 --> 00:25:01,080 Speaker 8: create that tailwind to consumers spending, which should help the 482 00:25:01,160 --> 00:25:04,560 Speaker 8: economy along which we like to see makes us feel 483 00:25:04,840 --> 00:25:07,520 Speaker 8: a lot stronger about seeing a soft landing that the 484 00:25:07,600 --> 00:25:09,200 Speaker 8: fat is trying to navigate. 485 00:25:08,840 --> 00:25:12,560 Speaker 3: Into sandy before we get your take on a strategy 486 00:25:12,560 --> 00:25:15,320 Speaker 3: that might be useful in employing if we're going to 487 00:25:15,359 --> 00:25:17,760 Speaker 3: invest in markets, be it the bond market or the 488 00:25:17,760 --> 00:25:21,480 Speaker 3: equity market. I'm curious and your role as chief client officer, 489 00:25:21,800 --> 00:25:24,919 Speaker 3: do you have access to a lot of the feedback 490 00:25:25,200 --> 00:25:28,000 Speaker 3: that customers are giving you right now. I'd like to 491 00:25:28,040 --> 00:25:31,880 Speaker 3: hear you kind of summarize what your clients are saying 492 00:25:31,960 --> 00:25:35,040 Speaker 3: right now, just about the current environment, be it economic 493 00:25:35,160 --> 00:25:38,400 Speaker 3: or political, and how they're thinking about putting money to work. 494 00:25:39,440 --> 00:25:40,000 Speaker 7: Yeah. 495 00:25:40,040 --> 00:25:45,600 Speaker 8: Well, our clients are corporate executives, family business owners, entrepreneurs, 496 00:25:45,640 --> 00:25:48,520 Speaker 8: people who are very busy in the economy. 497 00:25:48,440 --> 00:25:51,000 Speaker 7: And we're hearing a wide range from them. 498 00:25:51,520 --> 00:25:53,960 Speaker 8: On the political side, you know, that's the most popular 499 00:25:54,480 --> 00:25:57,040 Speaker 8: right now, clients are asking if they should be repositioning 500 00:25:57,080 --> 00:26:01,560 Speaker 8: their portfolio in response to the political news. Some clients 501 00:26:01,600 --> 00:26:04,240 Speaker 8: are asking us about what life would be like if 502 00:26:04,280 --> 00:26:06,120 Speaker 8: they moved out of the United States for the next 503 00:26:06,119 --> 00:26:08,879 Speaker 8: few years. So there's a pride range of questions there. 504 00:26:09,280 --> 00:26:11,720 Speaker 8: And then on the spending side. I think everyone's still 505 00:26:11,720 --> 00:26:15,400 Speaker 8: feeling a lot of sticker shock on spending. But our 506 00:26:15,480 --> 00:26:21,200 Speaker 8: clients have financial resources and they are not concerned about 507 00:26:21,240 --> 00:26:24,280 Speaker 8: spending and investing at this point in time for the 508 00:26:24,320 --> 00:26:24,800 Speaker 8: most part. 509 00:26:25,560 --> 00:26:28,720 Speaker 2: Let me ask you a kind of a question that's 510 00:26:28,720 --> 00:26:32,720 Speaker 2: a little silly, but just for fun. Would you advise 511 00:26:32,880 --> 00:26:35,960 Speaker 2: a guy and his family who's lived in Asia for 512 00:26:35,960 --> 00:26:38,320 Speaker 2: forty years or so that this is a good time 513 00:26:38,359 --> 00:26:40,399 Speaker 2: to come back to the United States or would you 514 00:26:40,480 --> 00:26:41,760 Speaker 2: wait for years? 515 00:26:42,280 --> 00:26:44,720 Speaker 7: Oh, Brian, is this a personal question? 516 00:26:44,840 --> 00:26:50,200 Speaker 2: Maybe present company excluded? Yeah, asking for. 517 00:26:50,320 --> 00:26:51,280 Speaker 7: Good friend, I see. 518 00:26:51,600 --> 00:26:54,040 Speaker 8: You know, there's so much that goes into that question, 519 00:26:54,200 --> 00:26:58,600 Speaker 8: really understanding what's what's most important to the individuals, to 520 00:26:58,640 --> 00:27:02,600 Speaker 8: the family, what they're trying to achieve. But certainly we 521 00:27:02,640 --> 00:27:05,320 Speaker 8: think the United States has a lot of opportunity, and 522 00:27:05,800 --> 00:27:10,440 Speaker 8: we are in a time of some political uncertainty for sure, 523 00:27:10,560 --> 00:27:14,080 Speaker 8: but that's happening around the world, and really it's based 524 00:27:14,119 --> 00:27:16,720 Speaker 8: upon what's most important to the family, what their financial 525 00:27:16,760 --> 00:27:19,240 Speaker 8: resources are, what their goals and objectives are. So we 526 00:27:19,280 --> 00:27:20,960 Speaker 8: look at things very hollistically. 527 00:27:21,520 --> 00:27:23,760 Speaker 3: Okay, So then the next question that I had, are 528 00:27:23,760 --> 00:27:26,080 Speaker 3: you seeing more opportunity in the bond market or in 529 00:27:26,080 --> 00:27:28,720 Speaker 3: the equity market. I guess the same rule of thumb 530 00:27:28,760 --> 00:27:32,480 Speaker 3: would apply, right, It depends on the profile of the investor. 531 00:27:32,720 --> 00:27:34,560 Speaker 3: But talk to me about the bond market. Is it 532 00:27:34,600 --> 00:27:37,359 Speaker 3: too late to participate? I mean, if you can accept 533 00:27:37,359 --> 00:27:39,399 Speaker 3: the notion that the Fed is going to be cutting 534 00:27:39,440 --> 00:27:41,399 Speaker 3: interest rates, has that been fully discounted? 535 00:27:42,400 --> 00:27:44,400 Speaker 7: Well, we don't think it's too late at all. 536 00:27:44,480 --> 00:27:48,720 Speaker 8: We think, you know, bonds have been you know, sort 537 00:27:48,760 --> 00:27:52,440 Speaker 8: of boring and not very exciting and unpleasant if you 538 00:27:52,480 --> 00:27:55,000 Speaker 8: go back a few years. So we think that they 539 00:27:55,040 --> 00:27:58,320 Speaker 8: definitely should play a role in portfolios. The amount of 540 00:27:58,359 --> 00:28:00,920 Speaker 8: bonds that we think clients should have is really based 541 00:28:00,920 --> 00:28:02,720 Speaker 8: on those goals and expectations. 542 00:28:02,760 --> 00:28:05,080 Speaker 7: But we don't think that the. 543 00:28:04,960 --> 00:28:09,160 Speaker 8: Full entirey of the interest rate path forward is baked 544 00:28:09,160 --> 00:28:11,440 Speaker 8: into the bond market at this time. And we think, 545 00:28:12,160 --> 00:28:14,879 Speaker 8: you know, in certain scenarios, there's still room for double 546 00:28:14,880 --> 00:28:18,800 Speaker 8: digit returns in bonds. So not that we're hanging our 547 00:28:18,840 --> 00:28:22,080 Speaker 8: hats on that, but we are ready in our portfolios 548 00:28:22,119 --> 00:28:24,480 Speaker 8: for a range of different outcomes, which we think is 549 00:28:24,520 --> 00:28:27,480 Speaker 8: the most important thing for investors at this time, because 550 00:28:28,800 --> 00:28:33,439 Speaker 8: depending upon the day, I think either great good or 551 00:28:33,480 --> 00:28:34,760 Speaker 8: maybe like they need a little. 552 00:28:34,560 --> 00:28:35,040 Speaker 7: Bit of help. 553 00:28:36,040 --> 00:28:37,760 Speaker 2: Yeah. One of the reasons I asked you that question 554 00:28:37,840 --> 00:28:41,440 Speaker 2: about optimism in America is that we often hear about exceptionalism, 555 00:28:41,520 --> 00:28:44,280 Speaker 2: and I know that. You know, coming into this election, 556 00:28:45,280 --> 00:28:48,000 Speaker 2: we saw an eighty one year old up against a 557 00:28:48,080 --> 00:28:50,840 Speaker 2: seventy eight year old for president, and some people maybe 558 00:28:50,880 --> 00:28:53,440 Speaker 2: losing a little bit of interest. So I asked a 559 00:28:53,560 --> 00:28:55,720 Speaker 2: question to one of our guests earlier this morning, whether 560 00:28:55,720 --> 00:28:58,680 Speaker 2: we could sense a little buy America in this rally. 561 00:28:58,680 --> 00:29:01,320 Speaker 2: Today she's gooffed at it, but that was sort of 562 00:29:01,360 --> 00:29:03,160 Speaker 2: part of my thinking was it's looking like a more 563 00:29:03,240 --> 00:29:04,479 Speaker 2: vibrant race now, isn't it. 564 00:29:06,680 --> 00:29:08,360 Speaker 7: I think there's more certainty. 565 00:29:08,640 --> 00:29:10,680 Speaker 8: I think for the last couple of weeks, investors have 566 00:29:10,720 --> 00:29:13,560 Speaker 8: been concerned about whether Joe Biden would continue to pursue 567 00:29:13,600 --> 00:29:16,360 Speaker 8: the presidency or not. So it does feel like there 568 00:29:16,440 --> 00:29:19,160 Speaker 8: is a little more certainty there that I think is 569 00:29:19,240 --> 00:29:21,960 Speaker 8: providing a little bit of fresh air for some investors. 570 00:29:22,280 --> 00:29:27,000 Speaker 8: But you know, there's a long time between now and 571 00:29:27,400 --> 00:29:29,720 Speaker 8: in the date we cast our boats here in the 572 00:29:29,800 --> 00:29:34,280 Speaker 8: United States, and we are encouraging our clients not to 573 00:29:34,320 --> 00:29:37,600 Speaker 8: get too caught up in political outcomes. You know, it's 574 00:29:37,720 --> 00:29:42,600 Speaker 8: very interesting people living in this country. It's important for 575 00:29:42,680 --> 00:29:44,920 Speaker 8: us to watch and pay attention and to understand how 576 00:29:45,000 --> 00:29:49,280 Speaker 8: different political leaders could impact economies and markets. But really 577 00:29:49,360 --> 00:29:52,360 Speaker 8: it's the fundamentals of investing that's really important. And we've 578 00:29:52,360 --> 00:29:54,560 Speaker 8: been telling our clients to keep their eyes focused on 579 00:29:54,600 --> 00:29:58,280 Speaker 8: the long term because in the long term, whoever wins 580 00:29:58,320 --> 00:30:02,120 Speaker 8: that the presidency doesn't have, you know, a large impact 581 00:30:02,200 --> 00:30:03,400 Speaker 8: on the returns. 582 00:30:03,760 --> 00:30:04,000 Speaker 1: Yeah. 583 00:30:04,040 --> 00:30:07,840 Speaker 2: Absolutely, And you know, we talked sometimes about how you'd 584 00:30:07,880 --> 00:30:10,120 Speaker 2: have thought that oil would have done better under Trump 585 00:30:10,160 --> 00:30:12,200 Speaker 2: than Biden, but just the reverse was true. There's so 586 00:30:12,240 --> 00:30:15,320 Speaker 2: many other factors that go into it. Your answer was perfect, Sandy. 587 00:30:15,360 --> 00:30:18,680 Speaker 2: Thank you. Sandy Breger, Chief Client Officer at Espirion. 588 00:30:21,240 --> 00:30:24,160 Speaker 3: This has been the Bloomberg Daybreak Asia podcast, bringing you 589 00:30:24,240 --> 00:30:27,320 Speaker 3: the stories making news and moving markets in the Asia Pacific. 590 00:30:27,840 --> 00:30:30,960 Speaker 3: Visit the Bloomberg Podcast channel on YouTube to get more 591 00:30:31,000 --> 00:30:34,600 Speaker 3: episodes of this and other shows from Bloomberg. Subscribe to 592 00:30:34,640 --> 00:30:38,400 Speaker 3: the podcast on Apple, Spotify, or anywhere else you listen 593 00:30:38,520 --> 00:30:41,600 Speaker 3: and always on Bloomberg Radio, the Bloomberg Terminal, and the 594 00:30:41,640 --> 00:30:42,720 Speaker 3: Bloomberg Business app.