1 00:00:02,720 --> 00:00:10,520 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,560 --> 00:00:14,480 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,560 --> 00:00:17,800 Speaker 1: Eastern on Apple Coarclay, and Android Auto with the Bloomberg 4 00:00:17,880 --> 00:00:21,000 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,320 --> 00:00:23,960 Speaker 1: or watch us live on YouTube. 6 00:00:24,480 --> 00:00:26,640 Speaker 2: So let's get to the news out of Canada. Prime 7 00:00:26,680 --> 00:00:29,920 Speaker 2: Minister Justin Trudeau resigning as Liberal Party leader and Prime Minister, 8 00:00:30,000 --> 00:00:33,720 Speaker 2: suspending the Canadian Parliament until March twenty fourth. Trudeau said 9 00:00:33,760 --> 00:00:37,879 Speaker 2: in a press conference and speech in Ottawa that parliament 10 00:00:37,920 --> 00:00:40,839 Speaker 2: needs a reset and needs to calm down. Want to 11 00:00:40,840 --> 00:00:43,680 Speaker 2: just get the latest with Laura Kane, Ottawa Bureau Chief, 12 00:00:43,760 --> 00:00:46,400 Speaker 2: joining us. Hey, Laura, what was unexpected? What did you 13 00:00:46,520 --> 00:00:47,040 Speaker 2: learn from this? 14 00:00:48,320 --> 00:00:51,559 Speaker 3: Well, one thing that was unexpected was his reflection on 15 00:00:52,280 --> 00:00:56,880 Speaker 3: Christian Freeland, his Finance minister, who resigned in mid December 16 00:00:56,920 --> 00:01:00,440 Speaker 3: and really kicked off this crisis for his leadership. You know, 17 00:01:00,800 --> 00:01:03,160 Speaker 3: calls had been growing for him to resign leading up 18 00:01:03,160 --> 00:01:05,520 Speaker 3: to that point, but it was really her issuing that 19 00:01:05,680 --> 00:01:10,600 Speaker 3: scathing resignation letter that accused him of costly political gimmicks 20 00:01:10,640 --> 00:01:13,400 Speaker 3: and failing to keep the fiscal powder dry in advance 21 00:01:13,400 --> 00:01:16,480 Speaker 3: of Trump's presidency that really, you know, led to his 22 00:01:16,560 --> 00:01:19,440 Speaker 3: demise as Liberal leader. And so when he was asked 23 00:01:19,440 --> 00:01:22,240 Speaker 3: to reflect on his side of that story, he said 24 00:01:22,280 --> 00:01:24,880 Speaker 3: that when he called her in to offer her a 25 00:01:24,880 --> 00:01:27,959 Speaker 3: different job than finance minister, he hoped that she would 26 00:01:27,959 --> 00:01:30,520 Speaker 3: take it and believed that she would. He expected that 27 00:01:30,640 --> 00:01:33,440 Speaker 3: she would stay on in cabinet in that position that 28 00:01:33,480 --> 00:01:37,000 Speaker 3: he offered her of managing US relations, and he did 29 00:01:37,040 --> 00:01:41,319 Speaker 3: not anticipate that she would, you resign as Finance minister 30 00:01:41,480 --> 00:01:44,920 Speaker 3: very publicly and trigger this crisis. And so it was 31 00:01:44,959 --> 00:01:46,880 Speaker 3: interesting to hear that. And he also said that he 32 00:01:46,920 --> 00:01:49,440 Speaker 3: had hoped she'd stay on as his deputy prime minister 33 00:01:49,600 --> 00:01:53,560 Speaker 3: as well, which was something we didn't necessarily know before. 34 00:01:53,640 --> 00:01:56,440 Speaker 3: So I did find that surprising. But apart from that, 35 00:01:56,640 --> 00:02:00,240 Speaker 3: it did sort of unfold as we expected. And I'll 36 00:02:00,240 --> 00:02:03,240 Speaker 3: just add that he did confirm that a confidence vote 37 00:02:03,280 --> 00:02:05,840 Speaker 3: on his government would be held in March, when the 38 00:02:05,880 --> 00:02:09,079 Speaker 3: parliament resumes March twenty fourth, and so that would mean 39 00:02:09,120 --> 00:02:12,280 Speaker 3: Canada goes to an election pretty soon after that, potentially 40 00:02:12,360 --> 00:02:16,080 Speaker 3: with an election day in late April or early May. 41 00:02:16,320 --> 00:02:19,000 Speaker 3: That is, assuming that the opposition parties keep their word 42 00:02:19,160 --> 00:02:21,960 Speaker 3: and do as they've told Canadians they would and bring 43 00:02:22,040 --> 00:02:23,000 Speaker 3: down this government. 44 00:02:23,440 --> 00:02:25,120 Speaker 4: All right, Laurn, thank you so much for your reporting. 45 00:02:25,120 --> 00:02:28,200 Speaker 4: Really appreciate that. Lara Kaine, she is Ottawa Bureau Chief. 46 00:02:28,960 --> 00:02:32,040 Speaker 4: Justin Trudeau news today that he'll be stepping down as 47 00:02:32,160 --> 00:02:36,079 Speaker 4: leader of the Liberal Party in Canada. 48 00:02:36,240 --> 00:02:40,120 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch the program 49 00:02:40,240 --> 00:02:43,280 Speaker 1: live weekdays at ten am Eastern on Apple Corplay and 50 00:02:43,280 --> 00:02:46,280 Speaker 1: Android Auto with the Bloomberg Business app. You can also 51 00:02:46,400 --> 00:02:50,040 Speaker 1: listen live on Amazon Alexa from our flagship New York station, 52 00:02:50,600 --> 00:02:53,240 Speaker 1: Just Say Alexa Play Bloomberg eleven thirty. 53 00:02:54,040 --> 00:02:56,360 Speaker 2: Michael Barr of the FED stepped down. I called him 54 00:02:56,360 --> 00:02:58,760 Speaker 2: William Barr when I wrote the news, My bad, Michael Barr. 55 00:02:58,800 --> 00:03:02,400 Speaker 2: Michael Barr stepping down on his FED Vice chair for supervision. 56 00:03:02,760 --> 00:03:05,200 Speaker 2: He's going to hold onto his post in the FED. 57 00:03:05,280 --> 00:03:07,520 Speaker 2: Just stepping down his FED Vice chair for supervision. He's 58 00:03:07,560 --> 00:03:10,840 Speaker 2: going to depart on February twenty eighth, unless a successor 59 00:03:11,240 --> 00:03:15,160 Speaker 2: is confirmed earlier. So guess who's here. Michael McKeith, Bloomberg 60 00:03:15,200 --> 00:03:16,920 Speaker 2: International Economics Policy. 61 00:03:16,520 --> 00:03:19,400 Speaker 5: Correspondents, who does the news for it. 62 00:03:19,440 --> 00:03:21,160 Speaker 2: Was like Michael Barr, Wait, no, it's got to be 63 00:03:21,200 --> 00:03:24,400 Speaker 2: William my bad. Okay, So why is he resigning for 64 00:03:24,480 --> 00:03:26,760 Speaker 2: this specific post. 65 00:03:27,520 --> 00:03:29,320 Speaker 5: You know, this post is relatively new. 66 00:03:29,360 --> 00:03:31,400 Speaker 6: It came in after Dodd Frank, and there have really 67 00:03:31,440 --> 00:03:33,839 Speaker 6: been only well, there's been two people. 68 00:03:33,560 --> 00:03:36,000 Speaker 5: Basically who have had the job in the past. 69 00:03:35,760 --> 00:03:35,920 Speaker 3: And. 70 00:03:37,840 --> 00:03:43,400 Speaker 6: The tradition sort of started in the last administration with 71 00:03:43,560 --> 00:03:46,920 Speaker 6: the vice chair resigning at the time, and now you've 72 00:03:46,960 --> 00:03:50,760 Speaker 6: got Michael Barr following through because basically, you get a 73 00:03:50,800 --> 00:03:54,000 Speaker 6: new administration like this with a big philosophical change, and 74 00:03:54,040 --> 00:03:57,000 Speaker 6: it's going to be a big philosophical change in regulation. 75 00:03:57,560 --> 00:04:01,640 Speaker 6: And so Barr in his in his statement said the 76 00:04:01,760 --> 00:04:06,200 Speaker 6: risk over a dispute over the position would distract the 77 00:04:06,280 --> 00:04:09,680 Speaker 6: FED from its mission. So he's decided to resign as 78 00:04:10,080 --> 00:04:15,240 Speaker 6: Vice chair for Supervision, which has big implications for banks. 79 00:04:16,600 --> 00:04:19,120 Speaker 6: Keep an eye on bank stocks because basically what this 80 00:04:19,240 --> 00:04:22,560 Speaker 6: tells you the FED says it won't make any new 81 00:04:23,480 --> 00:04:27,719 Speaker 6: major bank regulations until a successor is in place, and 82 00:04:27,839 --> 00:04:30,320 Speaker 6: with bar leaving, that probably means that Basil three, the 83 00:04:30,400 --> 00:04:34,160 Speaker 6: Bosle three endgame proposal, is on life support at this point, 84 00:04:34,360 --> 00:04:37,000 Speaker 6: if it even has a breath left. And so that's 85 00:04:37,080 --> 00:04:40,680 Speaker 6: major news for financial firms because the Trump administration would 86 00:04:40,720 --> 00:04:43,960 Speaker 6: be expected to sort of junk that. But the interesting 87 00:04:44,000 --> 00:04:47,760 Speaker 6: thing is he's not resigning as governor, and there are 88 00:04:47,800 --> 00:04:51,040 Speaker 6: no openings on the FED at least not until January 89 00:04:51,040 --> 00:04:55,599 Speaker 6: of twenty twenty six, and so the incoming administration cannot 90 00:04:55,720 --> 00:05:00,000 Speaker 6: name a new person to the job. They could elevate 91 00:05:00,520 --> 00:05:02,960 Speaker 6: one of the current governors to the job. 92 00:05:03,600 --> 00:05:06,240 Speaker 4: Interesting. So again, I'm just looking at the banks, you know, 93 00:05:06,279 --> 00:05:08,720 Speaker 4: over the past year. You know, they're all up kind 94 00:05:08,720 --> 00:05:11,280 Speaker 4: of thirty forty percent, kind of the big banks, JPMorgan, 95 00:05:11,320 --> 00:05:14,000 Speaker 4: Bank of America. So it feels like, you know, I 96 00:05:14,000 --> 00:05:17,160 Speaker 4: guess since the election, people said banks are one of 97 00:05:17,200 --> 00:05:19,080 Speaker 4: the places you have to be, and I guess this 98 00:05:19,200 --> 00:05:21,320 Speaker 4: is just another example of how things are changing. 99 00:05:21,360 --> 00:05:25,200 Speaker 6: Yeah, there's been a feeling that the incoming administration would 100 00:05:25,320 --> 00:05:28,760 Speaker 6: pull back on the Basil three requirements, the additional capital 101 00:05:28,839 --> 00:05:31,200 Speaker 6: that the big banks would have to hold, and so 102 00:05:31,360 --> 00:05:33,719 Speaker 6: this is going to be seen as good news for them, 103 00:05:33,760 --> 00:05:36,200 Speaker 6: and this is just sort of confirmed the idea that 104 00:05:36,200 --> 00:05:37,679 Speaker 6: that's probably what's going to happen. 105 00:05:37,960 --> 00:05:41,360 Speaker 2: So endgame BOSL three endgame is the endgame. 106 00:05:41,800 --> 00:05:45,040 Speaker 6: Yeah, unless this is like the Marvel movie series where 107 00:05:45,120 --> 00:05:50,160 Speaker 6: the the you know, the The Avengers Endgame was followed 108 00:05:50,160 --> 00:05:51,760 Speaker 6: by another dozen sequels. 109 00:05:51,800 --> 00:05:53,600 Speaker 2: Okay, but to be fair, let's get into it. They 110 00:05:53,600 --> 00:05:57,360 Speaker 2: wound up killing off the main characters, right like Captain America, 111 00:05:57,600 --> 00:06:01,600 Speaker 2: iron Man and Black Widow, the new generation that took 112 00:06:01,600 --> 00:06:02,280 Speaker 2: one after. 113 00:06:02,080 --> 00:06:05,360 Speaker 5: It, and now Michael barr it goes with iron Man. 114 00:06:06,440 --> 00:06:09,440 Speaker 2: But the position could still exist. He just won't do it. 115 00:06:09,440 --> 00:06:11,960 Speaker 2: The position a position. 116 00:06:11,680 --> 00:06:14,960 Speaker 6: Theory would have to be filled. The only one I 117 00:06:15,000 --> 00:06:16,760 Speaker 6: can think of on the board right now who might 118 00:06:16,839 --> 00:06:20,680 Speaker 6: take that job would be Mickey Bowman. She's the essentially 119 00:06:20,720 --> 00:06:24,040 Speaker 6: the small bank representative on the community bank representative on 120 00:06:24,080 --> 00:06:25,200 Speaker 6: the FED Board of Governors. 121 00:06:25,480 --> 00:06:27,239 Speaker 5: She's been heavily involved. 122 00:06:26,920 --> 00:06:31,280 Speaker 6: In the regulatory efforts of the FED and has been 123 00:06:31,360 --> 00:06:34,080 Speaker 6: a big opponent of a lot of what we've seen 124 00:06:34,200 --> 00:06:38,880 Speaker 6: in the basle proposals, and so she might be the choice. 125 00:06:38,880 --> 00:06:42,680 Speaker 6: She is a Republican, and people had thought she might 126 00:06:42,720 --> 00:06:44,479 Speaker 6: be a candidate for that job or one of the 127 00:06:44,480 --> 00:06:48,359 Speaker 6: other bank regulation jobs. But at this point, you know, 128 00:06:48,480 --> 00:06:50,320 Speaker 6: she'd be about the only one I could think of 129 00:06:50,400 --> 00:06:54,480 Speaker 6: that would take the job because it's less of monetary 130 00:06:54,520 --> 00:06:56,560 Speaker 6: policy and much more regulation. 131 00:06:57,360 --> 00:06:59,800 Speaker 5: So there's also so that's the Bossle three. 132 00:06:59,839 --> 00:07:02,359 Speaker 4: Now there's also a broader narrative in the marketplace, Michael, 133 00:07:02,440 --> 00:07:04,920 Speaker 4: that Trump administration would be depositive for M and A 134 00:07:04,920 --> 00:07:07,560 Speaker 4: activity just in general, and me from a regulatory perspective 135 00:07:07,560 --> 00:07:10,679 Speaker 4: that nothing else, an easier, lighter touch from the Federal 136 00:07:10,680 --> 00:07:13,720 Speaker 4: Trade Commission in the Department of Justice. What are you 137 00:07:13,720 --> 00:07:16,200 Speaker 4: hearing about that type of narratives? That's something because I'm 138 00:07:16,200 --> 00:07:18,880 Speaker 4: hearing bankers lawyers putting that out there. 139 00:07:19,400 --> 00:07:23,480 Speaker 6: Well, it makes logical sense put it that way, and 140 00:07:23,920 --> 00:07:27,200 Speaker 6: there is some pent up M and A demand out there. 141 00:07:27,400 --> 00:07:29,520 Speaker 6: How much there is in the banking sector, I don't know. 142 00:07:29,960 --> 00:07:32,880 Speaker 6: That's a question for some of the bank analysts that 143 00:07:32,960 --> 00:07:36,160 Speaker 6: you have on because we saw a lot of consolidation 144 00:07:36,280 --> 00:07:39,440 Speaker 6: in the past following the financial crisis. But there are 145 00:07:39,520 --> 00:07:41,480 Speaker 6: always mid sized banks that are looking to get a 146 00:07:41,520 --> 00:07:44,360 Speaker 6: little bit bigger, and so I would imagine in that 147 00:07:44,480 --> 00:07:46,920 Speaker 6: space there is going to be some business for those 148 00:07:47,000 --> 00:07:51,000 Speaker 6: lawyers and lenders. I'm not sure that we'll see a 149 00:07:51,000 --> 00:07:54,080 Speaker 6: big well, we won't see a big impact in the megabanks, 150 00:07:54,600 --> 00:07:58,760 Speaker 6: except as lenders perhaps because they're already at their limit 151 00:07:58,880 --> 00:08:01,400 Speaker 6: for how many deposit customers they can have. 152 00:08:01,920 --> 00:08:03,800 Speaker 5: But it is going to be a new era. 153 00:08:04,360 --> 00:08:07,520 Speaker 2: A new era in terms of the Fed speak. We've 154 00:08:07,520 --> 00:08:10,000 Speaker 2: heard of them last day, three days. Have you taken 155 00:08:10,040 --> 00:08:13,160 Speaker 2: anything away from it? The notes that I read tend 156 00:08:13,200 --> 00:08:16,240 Speaker 2: to think like, oh, maybe we want to just roll 157 00:08:16,320 --> 00:08:18,320 Speaker 2: back on these cuts, maybe we don't want to go 158 00:08:18,360 --> 00:08:21,720 Speaker 2: to aggressively, we're still really worried about inflation, etc. Is 159 00:08:21,720 --> 00:08:22,560 Speaker 2: that your take. 160 00:08:22,800 --> 00:08:25,720 Speaker 6: Yeah, they're basically reaffirming what Jay Pole said in his 161 00:08:25,840 --> 00:08:30,040 Speaker 6: news conference that the FED is close enough to pausing 162 00:08:30,160 --> 00:08:33,440 Speaker 6: that they would consider pausing because the risks are sort 163 00:08:33,440 --> 00:08:35,800 Speaker 6: of even at this point, and they want to move 164 00:08:35,840 --> 00:08:40,080 Speaker 6: slowly and make sure that inflation doesn't come back while 165 00:08:40,120 --> 00:08:42,840 Speaker 6: making sure that unemployment doesn't rise too much. So they're 166 00:08:42,840 --> 00:08:45,400 Speaker 6: all kind of setting the stage at this point for 167 00:08:45,559 --> 00:08:49,440 Speaker 6: a pause in January, and we'll see what the conditions 168 00:08:49,440 --> 00:08:53,560 Speaker 6: are when we get there, because obviously, if you've slapped 169 00:08:53,640 --> 00:08:55,840 Speaker 6: tariffs on right away, there might be an immediate market 170 00:08:55,840 --> 00:08:57,120 Speaker 6: reaction or something like that. 171 00:08:57,559 --> 00:08:59,280 Speaker 5: But right now it looks like a. 172 00:08:59,240 --> 00:09:01,640 Speaker 6: Pause in January, and then we'll see what happens by 173 00:09:01,640 --> 00:09:02,640 Speaker 6: the time they get to March. 174 00:09:03,200 --> 00:09:05,400 Speaker 4: Pretty busy week here with you look at the economic 175 00:09:05,440 --> 00:09:08,000 Speaker 4: data calendar, what are you going to be focusing on it. 176 00:09:08,200 --> 00:09:10,559 Speaker 4: I guess it's kind of Friday with the change in 177 00:09:10,600 --> 00:09:11,840 Speaker 4: non farm payrolls is a big one. 178 00:09:12,160 --> 00:09:14,640 Speaker 5: How are you prioritizing that's going to be the big one. 179 00:09:14,679 --> 00:09:17,880 Speaker 6: It's an interesting situation because on Thursday in Washington you 180 00:09:18,000 --> 00:09:20,960 Speaker 6: have the Jimmy Carter Memorial and that's pushed a lot 181 00:09:21,000 --> 00:09:24,240 Speaker 6: of stuff into Wednesday, like jobless claims will be out Wednesday, 182 00:09:24,400 --> 00:09:28,160 Speaker 6: and also it's moved up the calendar for treasury auctions 183 00:09:28,720 --> 00:09:31,559 Speaker 6: to Tuesday and Wednesday. So at this point it looks 184 00:09:31,600 --> 00:09:35,280 Speaker 6: like by the time you get to Thursday, there will 185 00:09:35,320 --> 00:09:38,160 Speaker 6: have been a sort of data and information void for 186 00:09:38,240 --> 00:09:41,520 Speaker 6: the markets. So it may have a bigger impact than 187 00:09:41,559 --> 00:09:44,679 Speaker 6: it usually does, just because traders always have to trade 188 00:09:44,679 --> 00:09:48,520 Speaker 6: on something, and this will be news in more of 189 00:09:48,559 --> 00:09:49,280 Speaker 6: a vacuum. 190 00:09:50,160 --> 00:09:52,120 Speaker 2: When we take a look at the jobs number real quick, 191 00:09:52,200 --> 00:09:54,680 Speaker 2: does that mean that if we get a strong jobs number, 192 00:09:54,800 --> 00:09:57,480 Speaker 2: does that really wipe out the case for cuts? Like 193 00:09:57,559 --> 00:09:59,840 Speaker 2: is that really going to be the barometer here? 194 00:10:00,400 --> 00:10:03,160 Speaker 6: Well, it will have that impact immediately in the markets. 195 00:10:03,240 --> 00:10:05,960 Speaker 6: Then I think people will take a look at where 196 00:10:05,960 --> 00:10:08,600 Speaker 6: we are. As I say, when we get past I 197 00:10:08,600 --> 00:10:10,760 Speaker 6: mean the next big meeting is January twenty ninth, So 198 00:10:10,800 --> 00:10:14,600 Speaker 6: when we get to that period, we'll have a little 199 00:10:14,640 --> 00:10:17,600 Speaker 6: bit better feel for the economy than we do immediately, 200 00:10:17,640 --> 00:10:22,680 Speaker 6: which is because it's December numbers, but a strong jobs 201 00:10:22,720 --> 00:10:25,679 Speaker 6: report and Bloomberg Economics thinks we're going to get two 202 00:10:25,760 --> 00:10:30,920 Speaker 6: hundred and sixty eight thousand jobs and sixty so they're 203 00:10:30,960 --> 00:10:33,040 Speaker 6: out right on a very long limit and we'll see 204 00:10:33,080 --> 00:10:34,920 Speaker 6: how they do with that. But if we got something 205 00:10:35,000 --> 00:10:40,760 Speaker 6: like that, it would certainly cement a pause for January, 206 00:10:40,760 --> 00:10:44,160 Speaker 6: and then we'll see what Trump policies do to you know, 207 00:10:44,520 --> 00:10:45,520 Speaker 6: the march outlook. 208 00:10:45,960 --> 00:10:48,000 Speaker 2: Hence the thirty year yield at the highest in November 209 00:10:48,080 --> 00:10:48,760 Speaker 2: twenty twenty three. 210 00:10:48,920 --> 00:10:49,160 Speaker 5: Yep. 211 00:10:49,280 --> 00:10:51,360 Speaker 6: Yeah, and you talk to some of the bond analysts 212 00:10:51,360 --> 00:10:55,160 Speaker 6: and they say, we're kind of there now. You would 213 00:10:55,200 --> 00:10:58,400 Speaker 6: need something else to push us above the levels we're 214 00:10:58,440 --> 00:11:01,679 Speaker 6: at for the long end, because it's steepened enough at 215 00:11:01,679 --> 00:11:05,440 Speaker 6: this point. So if anybody could do that, though. 216 00:11:05,440 --> 00:11:08,480 Speaker 4: Yep, it's stop one Trump, right. Michael McKee, thank you 217 00:11:08,559 --> 00:11:11,560 Speaker 4: so much for joinings. Michael McKee covers all the economics here, 218 00:11:11,679 --> 00:11:15,920 Speaker 4: force the markets trading kind of at their intra day high, Seria, 219 00:11:15,920 --> 00:11:17,720 Speaker 4: the S and P five hundreds, up one point two percent, 220 00:11:17,720 --> 00:11:21,240 Speaker 4: the nastacs up one point eight percent. Here the vis 221 00:11:21,840 --> 00:11:24,240 Speaker 4: it's below sixteen. I'll call that after Tom Keen. And 222 00:11:24,280 --> 00:11:26,040 Speaker 4: again we were just talking about the treasure market. Ten 223 00:11:26,080 --> 00:11:28,560 Speaker 4: year treasure is up another couple basis points here four 224 00:11:28,600 --> 00:11:31,439 Speaker 4: point sixty one percent. And why is your WTI crude 225 00:11:31,440 --> 00:11:33,080 Speaker 4: oil over seventy four dollars a hourrow? 226 00:11:33,320 --> 00:11:35,480 Speaker 2: I mean, maybe it's a demand thing. You no, Actually 227 00:11:35,760 --> 00:11:36,960 Speaker 2: a big part of it's going to be a storm 228 00:11:36,960 --> 00:11:39,160 Speaker 2: if it's going to disrupt oil and gas production, so 229 00:11:39,200 --> 00:11:42,400 Speaker 2: that's like a weather impact. But in actuality, many are 230 00:11:42,400 --> 00:11:44,080 Speaker 2: thinking that a President Trump is going to be more 231 00:11:44,080 --> 00:11:46,120 Speaker 2: hawkish when it comes to Iran, and does that actually 232 00:11:46,120 --> 00:11:48,720 Speaker 2: remove some barrels and tightened sanctions because there's been a 233 00:11:48,720 --> 00:11:53,160 Speaker 2: lot of oil exported surreptitiously at the end of the day, 234 00:11:53,200 --> 00:11:55,720 Speaker 2: so thank you. So if that changes, then that could 235 00:11:55,720 --> 00:11:58,240 Speaker 2: actually have a material impact. But it's really hard to 236 00:11:58,440 --> 00:12:01,000 Speaker 2: play the geopolitical risks in this world. 237 00:12:02,720 --> 00:12:06,439 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 238 00:12:06,520 --> 00:12:09,560 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 239 00:12:09,600 --> 00:12:12,920 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 240 00:12:12,960 --> 00:12:16,520 Speaker 1: you get your podcasts or watch us live on YouTube. 241 00:12:17,559 --> 00:12:19,720 Speaker 2: Alex deal here alongside Paul swe Need. This the Bloomberg 242 00:12:19,760 --> 00:12:22,360 Speaker 2: Intelligence Radio. We bring you all the top news and business, 243 00:12:22,400 --> 00:12:25,760 Speaker 2: economics and finance through a lens of our Bloomberg Intelligence folks. 244 00:12:25,760 --> 00:12:27,760 Speaker 2: They cover two thousand companies and one hundred and thirty 245 00:12:27,760 --> 00:12:30,440 Speaker 2: industries all around the world. We also tap our great 246 00:12:30,480 --> 00:12:32,800 Speaker 2: experts outside of Bloomberg for their take on the market, 247 00:12:32,840 --> 00:12:34,880 Speaker 2: and we go to one now. Shana Sissel is president 248 00:12:34,920 --> 00:12:38,480 Speaker 2: and CEO of Benriyon Capital Management and she joins us. 249 00:12:38,640 --> 00:12:41,199 Speaker 2: So usually January is like one of the best months 250 00:12:41,200 --> 00:12:44,360 Speaker 2: for inflows, right, like, do we buy the January effect here? 251 00:12:46,640 --> 00:12:49,240 Speaker 7: I don't know if I buy the January effect this year. 252 00:12:49,559 --> 00:12:52,000 Speaker 8: We also normally get a Santa claus rally that we 253 00:12:52,040 --> 00:12:53,520 Speaker 8: didn't get through this year either. 254 00:12:53,720 --> 00:12:57,040 Speaker 7: So I think we have a new administration coming in. 255 00:12:57,120 --> 00:13:02,079 Speaker 8: There's some uncertainty there, but overall positives for the markets. 256 00:13:02,880 --> 00:13:05,120 Speaker 7: Inflation, though remains a headwind. 257 00:13:05,360 --> 00:13:08,480 Speaker 8: The FED is more hawkish than they were, so there's 258 00:13:08,720 --> 00:13:12,840 Speaker 8: there's certainly some things to be concerned about. 259 00:13:13,360 --> 00:13:15,760 Speaker 7: But that doesn't mean I wouldn't put money into the market. 260 00:13:15,840 --> 00:13:18,440 Speaker 8: I'd just be really selective on where I do put 261 00:13:18,480 --> 00:13:19,280 Speaker 8: money in the market. 262 00:13:20,080 --> 00:13:23,280 Speaker 4: So Shanna a Bloomberg News m Live is out with 263 00:13:23,960 --> 00:13:27,360 Speaker 4: a survey with we do with a third party. People 264 00:13:27,440 --> 00:13:29,640 Speaker 4: are still buying this Trump trade. I mean, sixty one 265 00:13:29,679 --> 00:13:32,200 Speaker 4: percent of the responds feel like risk assets are going 266 00:13:32,280 --> 00:13:34,640 Speaker 4: to move higher. Is that what you're still hearing from 267 00:13:34,760 --> 00:13:37,960 Speaker 4: your clients? Is there still that type of trade out there? 268 00:13:39,679 --> 00:13:41,720 Speaker 8: Well, I think it's more of a mindset of the 269 00:13:41,840 --> 00:13:43,680 Speaker 8: last you know, fifteen years. 270 00:13:43,720 --> 00:13:46,240 Speaker 7: If you think about it, I think we. 271 00:13:46,240 --> 00:13:51,120 Speaker 8: Are largely more optimistic because there's an entire generation of 272 00:13:51,160 --> 00:13:54,760 Speaker 8: investors that don't know what it's like to have a 273 00:13:54,760 --> 00:13:58,960 Speaker 8: flat to down to volatile market, and there's an expectation 274 00:13:59,120 --> 00:14:02,800 Speaker 8: that what we've been seeing, which is double digit returns 275 00:14:02,880 --> 00:14:08,040 Speaker 8: on average since the financial crisis bottomed, and that I 276 00:14:08,080 --> 00:14:12,120 Speaker 8: think is kind of coloring the expectations of the average investor. 277 00:14:13,320 --> 00:14:16,560 Speaker 8: I do think that overall, the Trump tated is positive 278 00:14:16,559 --> 00:14:18,600 Speaker 8: for equities, but I do think we need to temper 279 00:14:18,679 --> 00:14:22,840 Speaker 8: our expectations and the fact that you know, twenty percent 280 00:14:23,000 --> 00:14:25,800 Speaker 8: plus returns of the S and P five hundred for 281 00:14:25,920 --> 00:14:29,200 Speaker 8: multiple years is not normal, and there is going to 282 00:14:29,240 --> 00:14:33,120 Speaker 8: be a return to normalcy at some point when that 283 00:14:33,240 --> 00:14:36,160 Speaker 8: is I don't know, but there are certainly reasons to 284 00:14:36,240 --> 00:14:38,840 Speaker 8: think that twenty twenty five could be the year we 285 00:14:38,920 --> 00:14:39,840 Speaker 8: returned to normalcy. 286 00:14:39,960 --> 00:14:42,880 Speaker 7: And god forbid, get eight to ten percent returns on. 287 00:14:42,880 --> 00:14:45,600 Speaker 2: The S and P five hundred, right, it's like normalcy. 288 00:14:45,680 --> 00:14:47,960 Speaker 2: But it's not like you're getting negative return or anything. 289 00:14:48,400 --> 00:14:51,840 Speaker 2: What's interesting is that FED official Lisa Cook said that 290 00:14:51,920 --> 00:14:57,080 Speaker 2: AI and private credit are among financial stability risks. That 291 00:14:57,120 --> 00:14:59,480 Speaker 2: was in a speech earlier this morning. That kind of 292 00:14:59,520 --> 00:15:03,400 Speaker 2: touches your area of expertise, right, the alternative landscape. What 293 00:15:03,400 --> 00:15:05,200 Speaker 2: do you think about that kind of sentence. 294 00:15:05,560 --> 00:15:07,040 Speaker 7: Well, you know AI. 295 00:15:07,320 --> 00:15:09,640 Speaker 8: I think is interesting that that was thrown in there 296 00:15:09,640 --> 00:15:13,600 Speaker 8: because that doesn't necessarily impact the capital markets per se. 297 00:15:13,720 --> 00:15:15,640 Speaker 7: I think it's more the whole you. 298 00:15:15,520 --> 00:15:19,360 Speaker 8: Know, trends around it and all of the FOMO that 299 00:15:19,400 --> 00:15:22,200 Speaker 8: goes into wanting to be involved with the AI trade. 300 00:15:22,560 --> 00:15:25,600 Speaker 8: But it's not necessarily specific to how the structure of 301 00:15:25,640 --> 00:15:28,800 Speaker 8: capital markets work. But private credit is. And I think 302 00:15:28,840 --> 00:15:31,200 Speaker 8: that's an interesting comment. You know, if you think about 303 00:15:31,640 --> 00:15:34,560 Speaker 8: the explosion of private credit, it happened during and after 304 00:15:34,600 --> 00:15:38,520 Speaker 8: the Financial crisis as traditional banks became less able and 305 00:15:38,600 --> 00:15:44,200 Speaker 8: less willing to provide capital to small businesses to lower credit, 306 00:15:44,560 --> 00:15:47,120 Speaker 8: that kind of thing, and there was this need for 307 00:15:47,160 --> 00:15:51,800 Speaker 8: this secondary non bank financial lending market, which is where 308 00:15:51,800 --> 00:15:54,480 Speaker 8: private credit kind of exploded. It's always existed, but that's 309 00:15:54,520 --> 00:15:57,960 Speaker 8: where it really became a much bigger part of overall 310 00:15:58,000 --> 00:16:02,040 Speaker 8: capital market structure. And you know, the same risks that 311 00:16:02,160 --> 00:16:07,400 Speaker 8: existed prior to that, in terms of lower quality lending, 312 00:16:08,400 --> 00:16:13,480 Speaker 8: lending to non traditional types of businesses, things of that nature. 313 00:16:13,480 --> 00:16:18,520 Speaker 8: Those risks still exist, right and AI is part of that. 314 00:16:18,600 --> 00:16:20,760 Speaker 8: Crypto is part of that. And when and when I 315 00:16:20,840 --> 00:16:24,120 Speaker 8: mean AI and crypto, I don't necessarily mean actual crypto 316 00:16:24,160 --> 00:16:27,200 Speaker 8: and AI as an investment, but companies related to that 317 00:16:27,680 --> 00:16:32,720 Speaker 8: ancillary that need capital. And so I do think that 318 00:16:32,880 --> 00:16:36,040 Speaker 8: private credit, because so much money has rushed into it, 319 00:16:36,520 --> 00:16:40,360 Speaker 8: that tends to push folks to make loans and to 320 00:16:40,960 --> 00:16:43,360 Speaker 8: provide capital at a higher risk. 321 00:16:43,440 --> 00:16:45,440 Speaker 7: And so I can see why she would have mentioned 322 00:16:45,480 --> 00:16:46,160 Speaker 7: private credit. 323 00:16:46,960 --> 00:16:50,760 Speaker 4: So CES kicks off in earnest tomorrow out Las Vegas, 324 00:16:51,160 --> 00:16:53,480 Speaker 4: and we heard from Dan E's Woodbush Securities this morning 325 00:16:53,520 --> 00:16:57,160 Speaker 4: that once again AI is going to be front and center. 326 00:16:57,480 --> 00:17:00,880 Speaker 4: From your perspective on Gal Turner's front, do you feel 327 00:17:00,880 --> 00:17:03,600 Speaker 4: like there's a lot more to go with this AI story, 328 00:17:03,640 --> 00:17:06,320 Speaker 4: it feels like it's a long term trend, not a 329 00:17:06,359 --> 00:17:07,480 Speaker 4: short term issue at all. 330 00:17:08,480 --> 00:17:11,240 Speaker 8: I agree it is a long term trend. But what 331 00:17:11,359 --> 00:17:13,440 Speaker 8: happens when we have these long term trends? And let's 332 00:17:13,480 --> 00:17:16,719 Speaker 8: think about Like, I know, it feels like AI has 333 00:17:16,760 --> 00:17:18,600 Speaker 8: been all we've talked about for a really long time, 334 00:17:18,600 --> 00:17:21,600 Speaker 8: but let's think about what the last hottest trend was. 335 00:17:21,960 --> 00:17:24,840 Speaker 8: Where all the money, especially in the private markets like 336 00:17:24,920 --> 00:17:27,400 Speaker 8: venture capital and private equity, was just throwing money at 337 00:17:27,440 --> 00:17:30,119 Speaker 8: anything that had the word blockchain or crypto in it. 338 00:17:31,320 --> 00:17:32,600 Speaker 7: And what happens is. 339 00:17:32,760 --> 00:17:37,320 Speaker 8: All the money runs and there's people who probably shouldn't 340 00:17:37,359 --> 00:17:41,159 Speaker 8: have gotten capital, did not have great business models or 341 00:17:41,200 --> 00:17:44,600 Speaker 8: business plans, but because they had those two really really 342 00:17:45,000 --> 00:17:48,600 Speaker 8: important buzzwords in their pitch decks, they were able to 343 00:17:48,760 --> 00:17:52,800 Speaker 8: capture assets and capital as a result. And then what 344 00:17:52,960 --> 00:17:55,800 Speaker 8: happens is you find out who the winners and losers 345 00:17:55,800 --> 00:17:57,920 Speaker 8: are going to be, and there's always things that blow 346 00:17:58,000 --> 00:18:00,160 Speaker 8: up on you. And I think AI is kind of 347 00:18:00,200 --> 00:18:02,679 Speaker 8: in that trend right now, and as we get a 348 00:18:02,680 --> 00:18:04,840 Speaker 8: little bit further into the AI. 349 00:18:06,119 --> 00:18:08,720 Speaker 7: Development, you will see. 350 00:18:08,760 --> 00:18:12,040 Speaker 8: Similar things happen there because so much money run into 351 00:18:12,080 --> 00:18:15,920 Speaker 8: it all the vcs wanted to have anything and anything 352 00:18:15,960 --> 00:18:18,919 Speaker 8: that had AI associated with it, and there are going 353 00:18:19,000 --> 00:18:21,560 Speaker 8: to be things that just don't work but blow up 354 00:18:21,600 --> 00:18:25,320 Speaker 8: in spectacular fashion as a result. So I think AI 355 00:18:25,440 --> 00:18:27,560 Speaker 8: as a trend is a big deal. Just like when 356 00:18:27,640 --> 00:18:30,040 Speaker 8: we had the tech bubble, the same thing. 357 00:18:30,560 --> 00:18:31,720 Speaker 7: It was a game. 358 00:18:31,600 --> 00:18:36,880 Speaker 8: Changing type of technology, type of trend, but as a result, 359 00:18:36,960 --> 00:18:39,000 Speaker 8: a lot of money runs after it and goes into 360 00:18:39,040 --> 00:18:39,560 Speaker 8: bad things. 361 00:18:40,400 --> 00:18:42,879 Speaker 2: Channa, always going to get your perspective. Thank you so 362 00:18:42,880 --> 00:18:45,720 Speaker 2: so much. Happy New Year. Shanna Sisoul, President and CEO 363 00:18:45,760 --> 00:18:48,520 Speaker 2: of benry On Capital Management, Joining us. 364 00:18:50,240 --> 00:18:53,960 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 365 00:18:54,040 --> 00:18:57,080 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 366 00:18:57,119 --> 00:19:00,439 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 367 00:19:00,520 --> 00:19:04,040 Speaker 1: you get your podcasts, or watch us live on YouTube. 368 00:19:05,320 --> 00:19:08,520 Speaker 4: All right, s and P five hundred, up mid twenty percent, 369 00:19:08,800 --> 00:19:11,360 Speaker 4: twenty twenty three, up mid twenty percent and twenty twenty four. 370 00:19:12,480 --> 00:19:14,719 Speaker 4: Can you top it in twenty twenty five? That's what 371 00:19:14,720 --> 00:19:17,520 Speaker 4: the pros have to figure out here. Brian Vendick joins 372 00:19:17,600 --> 00:19:20,680 Speaker 4: us here. He is a Chief investment Officer at MJP 373 00:19:21,320 --> 00:19:24,560 Speaker 4: Wealth Advisors. Brian I'm sure you're out there with your 374 00:19:24,720 --> 00:19:28,320 Speaker 4: look ahead letter recently telling your clients kind of what 375 00:19:28,359 --> 00:19:31,720 Speaker 4: you're looking for for twenty twenty five. What'd you tell them? 376 00:19:32,080 --> 00:19:34,280 Speaker 9: Yeah, thanks, Paul, and great to be with you. 377 00:19:34,440 --> 00:19:34,600 Speaker 8: Well. 378 00:19:34,640 --> 00:19:37,600 Speaker 9: I think we're still constructive on the markets over the 379 00:19:37,640 --> 00:19:39,520 Speaker 9: balance of the year, but I think it's going to 380 00:19:39,560 --> 00:19:42,359 Speaker 9: be the tale of two cities, as we've seen in 381 00:19:42,400 --> 00:19:44,440 Speaker 9: some other years in the past, where we have the 382 00:19:45,320 --> 00:19:48,600 Speaker 9: policy uncertainties. These policy pieces I think that need to 383 00:19:48,640 --> 00:19:52,080 Speaker 9: come together, as we've seen in recent headlines this morning 384 00:19:52,560 --> 00:19:54,919 Speaker 9: with the new administration coming to town and what's going 385 00:19:55,000 --> 00:20:02,080 Speaker 9: to happen with tariffs, spending, taxes, immigration, paired with are 386 00:20:02,080 --> 00:20:04,240 Speaker 9: we still going to have earnings growth for the SMP 387 00:20:04,760 --> 00:20:05,320 Speaker 9: and other. 388 00:20:05,160 --> 00:20:06,760 Speaker 5: Parts of the cyclical parts. 389 00:20:06,480 --> 00:20:08,240 Speaker 9: Of the economy over the balance of the year, And 390 00:20:08,280 --> 00:20:11,480 Speaker 9: I think a two we get through this policy uncertainty 391 00:20:11,480 --> 00:20:13,679 Speaker 9: and also uncertainty that the FED gave us back on 392 00:20:13,720 --> 00:20:18,400 Speaker 9: December eighteenth regarding monetary policy. In twenty twenty five, it's 393 00:20:18,440 --> 00:20:20,040 Speaker 9: going to be chopping in the markets. I think it's 394 00:20:20,040 --> 00:20:22,639 Speaker 9: easy for me to forecast Paul on alex but I 395 00:20:22,680 --> 00:20:25,720 Speaker 9: think if earnings is there, and we've heard from some 396 00:20:25,760 --> 00:20:29,760 Speaker 9: FED officials some FED speak this morning. As you mentioned, 397 00:20:30,000 --> 00:20:33,680 Speaker 9: the economy is unstable footing inflation probably will be sticky 398 00:20:33,720 --> 00:20:38,160 Speaker 9: over the course of the year due to housing pricing 399 00:20:38,880 --> 00:20:41,240 Speaker 9: and some seasonal adjustments there. But at the end of 400 00:20:41,280 --> 00:20:45,040 Speaker 9: the day, if consumers have a job, consumers will spend. 401 00:20:45,440 --> 00:20:48,199 Speaker 9: We expect lower spending, but we still expect earnings to 402 00:20:48,200 --> 00:20:51,199 Speaker 9: grow double digits for the SMP and also maybe some 403 00:20:51,320 --> 00:20:55,040 Speaker 9: participation coming in the markets from some areas outside of 404 00:20:55,080 --> 00:20:58,840 Speaker 9: megacap tech, even though this morning we know megacap tech 405 00:20:59,760 --> 00:21:02,760 Speaker 9: is in front of investors optimism for a good year. 406 00:21:03,080 --> 00:21:05,960 Speaker 2: I guess the question then becomes weirder earnings actually grow, 407 00:21:06,119 --> 00:21:10,000 Speaker 2: So do earnings for say the megacap mag seven come 408 00:21:10,119 --> 00:21:11,520 Speaker 2: down and then the rest of the S and P 409 00:21:11,640 --> 00:21:13,880 Speaker 2: earnings go up and that spread narrows. 410 00:21:15,080 --> 00:21:17,399 Speaker 9: Yeah, so that's a great point. I mean, that's our view. 411 00:21:17,960 --> 00:21:21,240 Speaker 9: You know, we are still expecting growth, you know, greater 412 00:21:21,320 --> 00:21:24,560 Speaker 9: than twenty percent year over year on the megacap tech side, 413 00:21:24,600 --> 00:21:28,440 Speaker 9: So when we think about portfolio positionings, we're definitely leaning 414 00:21:28,600 --> 00:21:31,879 Speaker 9: still in that direction. Also because tech has been a 415 00:21:31,920 --> 00:21:35,240 Speaker 9: great place to hide out obviously when trouble waters happen 416 00:21:35,800 --> 00:21:38,600 Speaker 9: in the economy. We've seen that historically, and I think 417 00:21:38,640 --> 00:21:41,639 Speaker 9: that muscle memory is still going to occur for investors. 418 00:21:41,960 --> 00:21:44,199 Speaker 9: But those are other areas of the market that I 419 00:21:44,320 --> 00:21:47,399 Speaker 9: still say look attractive, in mid and small cap and 420 00:21:47,440 --> 00:21:50,959 Speaker 9: some of those cyclical areas where the economy does slow. 421 00:21:51,359 --> 00:21:54,399 Speaker 9: And we've gotten some indication that FED cuts are still 422 00:21:54,720 --> 00:21:57,080 Speaker 9: you know, on the table. That's going to help out 423 00:21:57,160 --> 00:22:01,960 Speaker 9: some of those sectors like industrials, some pocket areas and healthcare. 424 00:22:02,280 --> 00:22:04,439 Speaker 9: And also I got to give it to our friends 425 00:22:04,440 --> 00:22:06,760 Speaker 9: in small cap that I know have been trailing for 426 00:22:06,800 --> 00:22:10,159 Speaker 9: about ten years. The economies on stable footing. We're not 427 00:22:10,240 --> 00:22:13,479 Speaker 9: going into a recession, and we have some domestic focus 428 00:22:13,560 --> 00:22:16,320 Speaker 9: and policies. Those should help some of the smaller companies 429 00:22:16,320 --> 00:22:19,240 Speaker 9: as well, assuming a good economy over the. 430 00:22:19,160 --> 00:22:20,120 Speaker 5: Next twelve months. 431 00:22:20,480 --> 00:22:23,080 Speaker 4: How about in the fixed income space, Brian, We've got 432 00:22:23,240 --> 00:22:25,520 Speaker 4: a steepening yield curve. We've now, you know, after being 433 00:22:25,560 --> 00:22:29,040 Speaker 4: inverted for several years, we've got a ten year treasury 434 00:22:29,119 --> 00:22:32,240 Speaker 4: yield to four point six percent, two year four point 435 00:22:32,240 --> 00:22:34,520 Speaker 4: twenty five percent. I mean, that seems like a nice 436 00:22:34,560 --> 00:22:36,520 Speaker 4: way to make a living in a fixed income space. 437 00:22:36,560 --> 00:22:38,879 Speaker 4: Do you stay there or do you maybe take some 438 00:22:38,960 --> 00:22:39,480 Speaker 4: credit risk. 439 00:22:40,520 --> 00:22:41,800 Speaker 9: Yeah, no, that's that's a great point. 440 00:22:41,840 --> 00:22:43,240 Speaker 5: We've actually been adding. 441 00:22:42,960 --> 00:22:48,399 Speaker 9: Duration in our portfolios late last year into even the 442 00:22:48,440 --> 00:22:51,800 Speaker 9: start of this year. And you know, we like fixed income. 443 00:22:51,880 --> 00:22:53,840 Speaker 9: I mean, it's it's we know it's it's been a 444 00:22:53,880 --> 00:22:57,199 Speaker 9: tough investment over the last three years or so with 445 00:22:57,320 --> 00:23:01,960 Speaker 9: anemic total returns. But again, our view as we kind 446 00:23:02,000 --> 00:23:05,000 Speaker 9: of look out, is that the economy will slow due 447 00:23:05,000 --> 00:23:09,040 Speaker 9: to slower consumer spending. And depending on how those puzzle 448 00:23:09,080 --> 00:23:13,960 Speaker 9: pieces come together from our friends in Washington, that might 449 00:23:14,320 --> 00:23:16,280 Speaker 9: we might look at these yields right now and say, 450 00:23:16,320 --> 00:23:18,000 Speaker 9: you know what, this is a great opportunity from a 451 00:23:18,080 --> 00:23:19,160 Speaker 9: risk war point of view. 452 00:23:19,480 --> 00:23:20,680 Speaker 5: So we're not getting too. 453 00:23:20,520 --> 00:23:22,720 Speaker 9: Long in duration, Paul, going back to your question, We're 454 00:23:22,720 --> 00:23:25,679 Speaker 9: not trying to be heroes here with a bond trade, 455 00:23:25,680 --> 00:23:28,720 Speaker 9: but thinking about taking durations up a little bit from 456 00:23:28,760 --> 00:23:31,240 Speaker 9: that two to three year to five to seven year, 457 00:23:31,720 --> 00:23:36,600 Speaker 9: still sticking with quality, not looking to jump in too 458 00:23:36,720 --> 00:23:39,920 Speaker 9: deep on some of the high yield that's already had 459 00:23:40,200 --> 00:23:44,040 Speaker 9: a good run with tight spreads. But I think fixed 460 00:23:44,080 --> 00:23:47,480 Speaker 9: income isn't is an opportunity for investors, and also if 461 00:23:47,480 --> 00:23:52,440 Speaker 9: we have trouble waters ahead with those uncertainties from policy decisions. 462 00:23:52,880 --> 00:23:56,159 Speaker 9: We've seen investors come back to fixed income as a 463 00:23:56,240 --> 00:23:57,000 Speaker 9: means to protect. 464 00:23:57,760 --> 00:23:59,720 Speaker 2: Do you think that we're going to see correlations kind 465 00:23:59,720 --> 00:24:02,560 Speaker 2: of up that the higher yields go, the more equities 466 00:24:02,600 --> 00:24:05,040 Speaker 2: get hit that inverse correlation, or do you think that 467 00:24:05,080 --> 00:24:06,120 Speaker 2: both can live in harmony. 468 00:24:07,119 --> 00:24:10,720 Speaker 9: Well, I think we have seen recently, going back to 469 00:24:10,760 --> 00:24:13,320 Speaker 9: the second half of December and now we've seen that 470 00:24:13,400 --> 00:24:17,200 Speaker 9: when yields have picked up, it's been it's been tough 471 00:24:17,200 --> 00:24:19,359 Speaker 9: for the equity market. Now I'm not I'm not saying 472 00:24:19,359 --> 00:24:21,639 Speaker 9: that you know, yields at you know, four to six 473 00:24:21,680 --> 00:24:24,240 Speaker 9: and they come down a little bit from this morning's 474 00:24:24,320 --> 00:24:27,320 Speaker 9: highs is not tolerable for the markets. But I think 475 00:24:27,320 --> 00:24:30,679 Speaker 9: if you start getting above you know, four seventy five 476 00:24:30,920 --> 00:24:34,400 Speaker 9: on the ten year and getting back to that five handle, 477 00:24:34,680 --> 00:24:36,679 Speaker 9: I mean, I think the economy, based on where we 478 00:24:36,720 --> 00:24:39,439 Speaker 9: are right now, can handle it. But it definitely starts 479 00:24:39,440 --> 00:24:43,080 Speaker 9: to take some of some of the optimism out of 480 00:24:43,119 --> 00:24:46,119 Speaker 9: earnings growth in some of those more cyclical areas that 481 00:24:46,200 --> 00:24:49,679 Speaker 9: are dependent upon lending and the cost of debt and 482 00:24:49,720 --> 00:24:52,160 Speaker 9: that and then again, but you know, this is why 483 00:24:52,320 --> 00:24:54,879 Speaker 9: I say it's a first half versus second half story. 484 00:24:55,240 --> 00:24:58,199 Speaker 9: Not to talk and be too complicated here, because we 485 00:24:58,280 --> 00:25:01,159 Speaker 9: know that FED will use Monto Harry policy to support 486 00:25:01,160 --> 00:25:03,760 Speaker 9: the economy. So if we start seeing that those higher 487 00:25:03,840 --> 00:25:07,359 Speaker 9: rates are being more restrictive and slowing down the economy, 488 00:25:07,400 --> 00:25:09,520 Speaker 9: that's where I think the FED has made it clear 489 00:25:09,520 --> 00:25:12,080 Speaker 9: that they'll take action to kind of support the labor 490 00:25:12,119 --> 00:25:14,160 Speaker 9: market and try to keep things going. 491 00:25:14,240 --> 00:25:16,320 Speaker 2: All right, Brian really appreciate that. Thank you very much. 492 00:25:16,359 --> 00:25:21,800 Speaker 2: Brian Bendig, Chief investment Officer at MJP Wealth Advisors, joining us. 493 00:25:22,359 --> 00:25:27,040 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 494 00:25:27,240 --> 00:25:31,200 Speaker 1: and anywhere else you get your podcasts. 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