1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:11,680 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amerie Hordernt join us each day 4 00:00:18,760 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,440 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,960 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,319 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:37,479 Speaker 2: Terminal and the Bloomberg Business app. Julian and Manuel, I've ever, 10 00:00:37,479 --> 00:00:40,040 Speaker 2: of course, selling US seventy seven to fifty price target 11 00:00:40,080 --> 00:00:42,000 Speaker 2: for the S and P by year end, expecting more 12 00:00:42,000 --> 00:00:45,440 Speaker 2: of everything that drove twenty five, more AI, more stimulus, 13 00:00:45,440 --> 00:00:48,440 Speaker 2: more earnings, growth, more volatility. Julian joins us now for more. 14 00:00:48,479 --> 00:00:50,840 Speaker 2: Julian and Monic, good morning, Good to see you, sir. 15 00:00:51,000 --> 00:00:53,640 Speaker 2: Welcome to the program. Everything that worked last year is 16 00:00:53,640 --> 00:00:56,040 Speaker 2: going to keep on working. The temptation to choose something new, 17 00:00:56,360 --> 00:00:58,520 Speaker 2: find that new thing, why aren't you embracing it? 18 00:00:58,800 --> 00:01:04,000 Speaker 3: So is here and again this concept of concentration risk. 19 00:01:04,400 --> 00:01:07,400 Speaker 3: If you go back to the beginning of this century, 20 00:01:07,680 --> 00:01:10,320 Speaker 3: when the top ten stocks were twenty five percent of 21 00:01:10,680 --> 00:01:12,520 Speaker 3: the way in the s and P five hundred, there 22 00:01:12,560 --> 00:01:15,360 Speaker 3: was a thought that could not be exceeded. We're now 23 00:01:15,360 --> 00:01:18,280 Speaker 3: at forty percent, and frankly, again, if you think about 24 00:01:18,400 --> 00:01:21,600 Speaker 3: concentration risk, you look at a market like Korea, we're 25 00:01:21,640 --> 00:01:24,479 Speaker 3: in the COSTPI. You've got two stocks that account for 26 00:01:24,480 --> 00:01:25,480 Speaker 3: forty five percent. 27 00:01:26,240 --> 00:01:28,600 Speaker 4: So the point is, the math. 28 00:01:28,440 --> 00:01:34,319 Speaker 3: Doesn't work for these stocks not to market perform or outperform. 29 00:01:35,120 --> 00:01:40,840 Speaker 3: But the truth is is that the capital market cycle 30 00:01:41,240 --> 00:01:45,360 Speaker 3: has yet to fully play out, and the beneficiary of 31 00:01:45,400 --> 00:01:49,600 Speaker 3: a robust capital market cycle time and time again are 32 00:01:49,640 --> 00:01:50,880 Speaker 3: the stocks that led you into this. 33 00:01:51,120 --> 00:01:52,800 Speaker 2: So funny when it comes on a program later on 34 00:01:52,800 --> 00:01:55,560 Speaker 2: this morning, saying dive into what's hamdling gon Asia, what's 35 00:01:55,560 --> 00:01:58,800 Speaker 2: developing its South Korea, you're saying, take a step back, resist. 36 00:01:59,520 --> 00:01:59,720 Speaker 5: No. 37 00:02:00,480 --> 00:02:04,560 Speaker 3: Basically, what we're saying is is that you know, there 38 00:02:04,640 --> 00:02:09,440 Speaker 3: should be a discomfort around the fact that the market 39 00:02:09,639 --> 00:02:14,600 Speaker 3: is really clustering in this theme. But that discomfort, as 40 00:02:14,639 --> 00:02:18,000 Speaker 3: we saw earlier at the end of last last year 41 00:02:18,400 --> 00:02:22,639 Speaker 3: with the discomfort around the one marquee name that has 42 00:02:22,720 --> 00:02:26,080 Speaker 3: taken on a great deal of debt to finance capex. 43 00:02:26,360 --> 00:02:30,680 Speaker 3: The majority of these companies have you know, very very 44 00:02:30,760 --> 00:02:34,079 Speaker 3: robust cash flow, and so therefore you're going to have 45 00:02:34,520 --> 00:02:37,480 Speaker 3: this sort of virtuous cycle of earnings continue to be 46 00:02:37,560 --> 00:02:38,680 Speaker 3: driven by these names. 47 00:02:38,880 --> 00:02:40,720 Speaker 1: Is the bet right now just to bet on the 48 00:02:40,720 --> 00:02:44,239 Speaker 1: biggest tech companies in both regions, both the US and China, 49 00:02:44,320 --> 00:02:47,320 Speaker 1: betting that they can consolidate their dominance going forward, regardless 50 00:02:47,680 --> 00:02:50,160 Speaker 1: of whether the US or China wins. 51 00:02:51,440 --> 00:02:54,640 Speaker 3: It does come down to that to a great degree. 52 00:02:54,680 --> 00:02:57,680 Speaker 3: And you know, we get asked all the time again, 53 00:02:57,840 --> 00:03:01,040 Speaker 3: should we rotate to other sectors. There'll be plenty of 54 00:03:01,080 --> 00:03:04,680 Speaker 3: opportunity to do it. Opportunistically. There's going to be a 55 00:03:04,680 --> 00:03:09,560 Speaker 3: continued skirmish around healthcare towards the end of this month, obviously, 56 00:03:10,200 --> 00:03:14,079 Speaker 3: in fact, with the one big beautiful bill tax benefits 57 00:03:14,080 --> 00:03:17,519 Speaker 3: starting to kick in later this quarter. We think there's 58 00:03:17,560 --> 00:03:23,320 Speaker 3: an opportunity for consumers beaten down consumer names to rally. 59 00:03:23,760 --> 00:03:27,359 Speaker 3: But you step away and the bull market has been 60 00:03:27,480 --> 00:03:30,600 Speaker 3: led by these names and these themes, and we think 61 00:03:30,600 --> 00:03:31,799 Speaker 3: it's further to run. 62 00:03:32,080 --> 00:03:33,959 Speaker 1: There might be some people who read what's going on 63 00:03:34,000 --> 00:03:35,880 Speaker 1: in the news and then look at markets and say 64 00:03:35,880 --> 00:03:37,760 Speaker 1: that everybody's just going la la la la, la la la. 65 00:03:37,760 --> 00:03:39,480 Speaker 1: We're not going to listen to anything that could potentially 66 00:03:39,480 --> 00:03:41,600 Speaker 1: be game changing. Is it just been on what you 67 00:03:41,680 --> 00:03:44,280 Speaker 1: know and that you don't know so much you just 68 00:03:44,320 --> 00:03:44,840 Speaker 1: ignore it. 69 00:03:45,760 --> 00:03:52,280 Speaker 3: Well, I think again, part of the rationale around AI 70 00:03:52,440 --> 00:03:56,880 Speaker 3: is you're still betting on something that you don't fully know. Okay, 71 00:03:56,960 --> 00:03:59,960 Speaker 3: And for us, what we think is going to have 72 00:04:00,000 --> 00:04:02,280 Speaker 3: happened in twenty twenty six is you're going to go 73 00:04:02,400 --> 00:04:06,520 Speaker 3: from the inflection year twenty twenty five for AI adoption 74 00:04:06,960 --> 00:04:11,360 Speaker 3: to the year where it accelerates when corporate global corporates 75 00:04:11,760 --> 00:04:16,599 Speaker 3: realize that if they don't find ways to drive revenues 76 00:04:16,839 --> 00:04:20,360 Speaker 3: and cut costs through using AI, they will be at 77 00:04:20,360 --> 00:04:21,839 Speaker 3: a competitive disadvantage. 78 00:04:21,880 --> 00:04:23,560 Speaker 6: When Lisa says things going on in the news, she 79 00:04:23,600 --> 00:04:26,880 Speaker 6: means Venezuela, And you actually writen your note that you think, 80 00:04:26,880 --> 00:04:29,920 Speaker 6: if anything, Venezuela increases the chances of an AI bubble. 81 00:04:30,000 --> 00:04:31,320 Speaker 2: Why is that so? 82 00:04:32,040 --> 00:04:36,120 Speaker 3: Think about a confluence of events. First of all, we 83 00:04:36,200 --> 00:04:39,039 Speaker 3: found out a week and a half ago that the 84 00:04:39,080 --> 00:04:44,280 Speaker 3: economy's last reading was actually stronger than expected. Thinking about 85 00:04:44,480 --> 00:04:48,360 Speaker 3: the stimulus that's ahead, it sets up more economic upside 86 00:04:48,400 --> 00:04:50,800 Speaker 3: in the US. In fact, our team just took its 87 00:04:50,839 --> 00:04:54,000 Speaker 3: twenty twenty six forecast up to two point five percent. 88 00:04:54,680 --> 00:04:58,839 Speaker 3: From a FED perspective, we actually think there won't be 89 00:04:58,920 --> 00:05:01,599 Speaker 3: two cuts, they'll be three, possibly more. 90 00:05:01,800 --> 00:05:04,320 Speaker 6: They have both growing economy, fiscal stimulus p touch a 91 00:05:04,440 --> 00:05:07,039 Speaker 6: higher inflation, and then you're saying three federal reserve. 92 00:05:06,760 --> 00:05:13,000 Speaker 3: Guts because you have a political backdrop where the impetus 93 00:05:13,640 --> 00:05:17,760 Speaker 3: is to keep the consumer moving forward as we get 94 00:05:17,800 --> 00:05:22,360 Speaker 3: to the midterm elections. Now on Venezuela, basically the issue 95 00:05:22,400 --> 00:05:28,039 Speaker 3: here is long term. It's likely a moderating influence for 96 00:05:28,120 --> 00:05:32,000 Speaker 3: oil prices, and if you think about oil prices staying 97 00:05:32,800 --> 00:05:36,160 Speaker 3: flat for longer, that's bullish for long dated bonds. 98 00:05:36,240 --> 00:05:38,760 Speaker 2: Let's punk Venezuela just from moment. Your view on the 99 00:05:38,760 --> 00:05:41,960 Speaker 2: federal reserve becoming increasingly politicized in the last twenty four 100 00:05:42,000 --> 00:05:43,280 Speaker 2: and has had a series of guests come on the 101 00:05:43,279 --> 00:05:46,120 Speaker 2: program and talked about the unintended consequence of pushing for 102 00:05:46,200 --> 00:05:48,280 Speaker 2: law of interest rights at a federal reserve, galvanizing the 103 00:05:48,279 --> 00:05:50,120 Speaker 2: other members of a committee to push back against the 104 00:05:50,120 --> 00:05:52,080 Speaker 2: push for law of interest rights. Why are you taking 105 00:05:52,120 --> 00:05:52,719 Speaker 2: the other side of that? 106 00:05:54,800 --> 00:06:00,800 Speaker 3: Essentially because a couple things is that for the most part, 107 00:06:01,839 --> 00:06:05,400 Speaker 3: even though the economy is strung, there's still this dichotomy 108 00:06:05,720 --> 00:06:09,880 Speaker 3: between what the labor market actually looks like. You know, 109 00:06:10,000 --> 00:06:13,719 Speaker 3: obviously a lot of that has to do with immigration policy, etc. 110 00:06:14,360 --> 00:06:17,640 Speaker 3: But the fact of the matter is is that politically 111 00:06:18,000 --> 00:06:23,120 Speaker 3: and sort of psychologically, to see monthly job gains closer 112 00:06:23,120 --> 00:06:27,839 Speaker 3: to zero than closer to one hundred thousand going forward 113 00:06:28,200 --> 00:06:31,880 Speaker 3: will be something that you know, given the fact, and 114 00:06:31,920 --> 00:06:37,720 Speaker 3: we also think that the tariff flow through has reasonably 115 00:06:37,760 --> 00:06:42,960 Speaker 3: fully flown flowed through, and so you know, a moderate 116 00:06:43,080 --> 00:06:50,600 Speaker 3: jobs environment and a lower inflation trajectory just continue to 117 00:06:50,720 --> 00:06:52,200 Speaker 3: drive the ability to cut rates. 118 00:06:52,320 --> 00:06:54,560 Speaker 2: Let's finish my pushing that through the equity market. Consumer 119 00:06:54,600 --> 00:06:56,880 Speaker 2: discretion ry does it tend things around? 120 00:06:57,760 --> 00:07:03,679 Speaker 3: We do think so. And again our sector preferences consumer discretionary, 121 00:07:04,000 --> 00:07:08,799 Speaker 3: communication services, infotech, the subtexts, all of them have large 122 00:07:08,800 --> 00:07:13,680 Speaker 3: exposure to AI. But in this algorithmic trading world, what's 123 00:07:13,720 --> 00:07:16,400 Speaker 3: good for the consumer is going to flow through and 124 00:07:16,480 --> 00:07:19,600 Speaker 3: be good for AI names and you know, boost that sector. 125 00:07:19,720 --> 00:07:23,040 Speaker 2: Jenny, and you talked about the importance of sixty dollars crude. 126 00:07:23,200 --> 00:07:24,840 Speaker 2: Just flash that out for us. Why is it so 127 00:07:24,920 --> 00:07:26,640 Speaker 2: important to the stock market? 128 00:07:26,680 --> 00:07:31,040 Speaker 3: Well, it's the stability of the price. And look, you know, 129 00:07:31,080 --> 00:07:33,880 Speaker 3: I think one of the things that Trump has been 130 00:07:34,040 --> 00:07:37,080 Speaker 3: very happy that he's been able to deliver going back 131 00:07:37,120 --> 00:07:40,600 Speaker 3: to this first year, is that visibly, in terms of 132 00:07:40,640 --> 00:07:44,640 Speaker 3: the affordability crisis, there is not an affordability crisis at 133 00:07:44,640 --> 00:07:49,040 Speaker 3: the pump anymore. Gas prices have continued to fall, and 134 00:07:49,400 --> 00:07:53,080 Speaker 3: what we've seen is that that has a tendency to 135 00:07:53,160 --> 00:07:56,080 Speaker 3: bleed through to other areas. It has not yet, and 136 00:07:56,120 --> 00:07:58,120 Speaker 3: it may not. I mean, if you think about what 137 00:07:58,200 --> 00:08:01,760 Speaker 3: happened in the commodity market, it's yesterday, the surge and 138 00:08:01,800 --> 00:08:06,400 Speaker 3: copper was anticipatory for this build out that we're going 139 00:08:06,440 --> 00:08:09,520 Speaker 3: to have in Venezuela. But the fact is that the 140 00:08:09,560 --> 00:08:13,680 Speaker 3: consumer among the prices that the consumer anchors on, the 141 00:08:13,840 --> 00:08:18,480 Speaker 3: energy price is extremely important, and in that respect, sort 142 00:08:18,480 --> 00:08:22,000 Speaker 3: of knowing that you're below three dollars a gallon is 143 00:08:22,240 --> 00:08:23,840 Speaker 3: very psychologically beneficial. 144 00:08:23,960 --> 00:08:26,240 Speaker 1: Is it consistent to have low oil prices and an 145 00:08:26,280 --> 00:08:27,640 Speaker 1: outperforming energy sector. 146 00:08:29,800 --> 00:08:32,920 Speaker 3: It's a rough go to think about that in the 147 00:08:33,000 --> 00:08:36,600 Speaker 3: long term. But again, and I think we've seen this 148 00:08:36,800 --> 00:08:42,040 Speaker 3: over the entirety of this rally, there's a massive dispersion. 149 00:08:42,559 --> 00:08:47,120 Speaker 3: The lowest correlations of really in many years amongst stocks, 150 00:08:47,280 --> 00:08:50,079 Speaker 3: and I think when you look at the energy sector, 151 00:08:50,320 --> 00:08:54,319 Speaker 3: you're going to see winners and losers based on where 152 00:08:54,400 --> 00:08:55,240 Speaker 3: this is all going. 153 00:08:55,360 --> 00:08:57,200 Speaker 1: Do you see a reason to invest more in Latin 154 00:08:57,240 --> 00:09:01,080 Speaker 1: America as a result of the don Roe doctrine that 155 00:09:01,120 --> 00:09:02,080 Speaker 1: we keep hearing about? 156 00:09:05,240 --> 00:09:11,040 Speaker 3: Interesting question. Frankly, The reason that we think that you know, 157 00:09:11,320 --> 00:09:15,160 Speaker 3: the rest of the world, Latin America included, is more 158 00:09:15,240 --> 00:09:18,600 Speaker 3: interesting is because we think you saw a very significant 159 00:09:18,640 --> 00:09:22,160 Speaker 3: top in the dollar a year ago and all lse 160 00:09:22,160 --> 00:09:25,560 Speaker 3: sequel again over the long haul, what we started to 161 00:09:25,600 --> 00:09:30,040 Speaker 3: see was portfolio rebalancing away from the US dribs and 162 00:09:30,120 --> 00:09:34,480 Speaker 3: drabs slowly, and frankly, that's not going to accelerate, given 163 00:09:34,520 --> 00:09:36,679 Speaker 3: the fact that our view that the AI theme has 164 00:09:36,720 --> 00:09:39,960 Speaker 3: further to run. But over the long term, if you believe, 165 00:09:40,000 --> 00:09:42,480 Speaker 3: as we do, that you've made a significant top in 166 00:09:42,520 --> 00:09:44,960 Speaker 3: the dollar, you want to diversify to the rest of 167 00:09:44,960 --> 00:09:45,360 Speaker 3: the world. 168 00:09:45,480 --> 00:09:48,200 Speaker 6: The oil majors are jumping on this news, not so 169 00:09:48,280 --> 00:09:51,520 Speaker 6: much crude energy before the weekend as opposed to after 170 00:09:51,559 --> 00:09:53,640 Speaker 6: the weekend. Would you have a different view on potentially 171 00:09:53,720 --> 00:09:56,160 Speaker 6: wanting to invest in the US majors. 172 00:09:58,160 --> 00:10:03,320 Speaker 3: Again, you look at twenty twenty five, one of the themes 173 00:10:03,520 --> 00:10:07,880 Speaker 3: has been the Trump administration sort of influencing the selection 174 00:10:08,040 --> 00:10:13,520 Speaker 3: of winners and losers on various themes. Obviously steal rare earths, 175 00:10:13,559 --> 00:10:18,520 Speaker 3: et cetera. Clearly there's an element of this happening. Now 176 00:10:19,280 --> 00:10:21,839 Speaker 3: we don't know what it looks like, but we do 177 00:10:22,000 --> 00:10:25,800 Speaker 3: know that Donald Trump is a businessman, and the endorsement 178 00:10:25,840 --> 00:10:30,400 Speaker 3: of Rodriguez, given her experience in the oil patch, really 179 00:10:30,440 --> 00:10:32,920 Speaker 3: tells you that that's where the emphasis. 180 00:10:32,679 --> 00:10:35,320 Speaker 6: Does potentially help put a lid on oil prices. But 181 00:10:35,360 --> 00:10:38,319 Speaker 6: when you think about AI, there's one issue of affordability 182 00:10:38,320 --> 00:10:41,640 Speaker 6: that Americans are dealing with, and that's electricity prices. How 183 00:10:41,640 --> 00:10:44,120 Speaker 6: are you thinking about that this year, given it is 184 00:10:44,160 --> 00:10:45,120 Speaker 6: a mitern election year. 185 00:10:45,240 --> 00:10:48,200 Speaker 3: Well, there's no question that that is the push pull. 186 00:10:48,440 --> 00:10:52,080 Speaker 3: It's been the push pull the entire year. But again, 187 00:10:52,240 --> 00:10:56,880 Speaker 3: all else equal, the president has shown an ability to 188 00:10:57,040 --> 00:11:01,560 Speaker 3: influence events that moderate oil prices, and at some point 189 00:11:01,679 --> 00:11:03,959 Speaker 3: that's likely to flow through to the. 190 00:11:03,920 --> 00:11:04,439 Speaker 4: Rest of it. 191 00:11:04,480 --> 00:11:09,440 Speaker 3: But again, the intent is because of the recognition of 192 00:11:09,520 --> 00:11:13,280 Speaker 3: the importance is AI of AI as a theme both 193 00:11:13,320 --> 00:11:16,959 Speaker 3: for the US and on the US corporate life. 194 00:11:17,000 --> 00:11:19,280 Speaker 2: And we finished with a sentiment check year end price 195 00:11:19,360 --> 00:11:22,080 Speaker 2: targets seventy seven, fifty and busy speaking to clients. When 196 00:11:22,120 --> 00:11:24,240 Speaker 2: you talk to them, are they more excited about what 197 00:11:24,280 --> 00:11:26,800 Speaker 2: can go right this year or more worried about what 198 00:11:26,880 --> 00:11:27,400 Speaker 2: can go wrong? 199 00:11:29,080 --> 00:11:32,600 Speaker 3: I would say it's in balance, to be perfectly frank 200 00:11:32,840 --> 00:11:36,120 Speaker 3: What bothers us is that this is the first time 201 00:11:36,120 --> 00:11:38,440 Speaker 3: in my memory, going back to when I was on 202 00:11:38,480 --> 00:11:42,280 Speaker 3: the buy side, that there was no strategists on the 203 00:11:42,320 --> 00:11:45,679 Speaker 3: street that had a price target below where the index 204 00:11:45,800 --> 00:11:50,199 Speaker 3: level is. Thank you Bloomberg for compiling that information and 205 00:11:50,320 --> 00:11:53,560 Speaker 3: what we found that over the course of last year, 206 00:11:53,880 --> 00:11:58,240 Speaker 3: when sentiment got tipped too far in one direction, you 207 00:11:58,320 --> 00:12:01,600 Speaker 3: had pullbacks, and here we are at Vicks fourteen. So 208 00:12:01,720 --> 00:12:05,680 Speaker 3: to assume that it's clear sailing, you know, for weeks 209 00:12:05,720 --> 00:12:08,000 Speaker 3: on end, is probably a faulty assumption. 210 00:12:08,640 --> 00:12:12,160 Speaker 2: Stay with us. More Bloomberg surveillance coming up after this. 211 00:12:21,040 --> 00:12:23,400 Speaker 2: Investors look into a fresh lighte of economic data to 212 00:12:23,480 --> 00:12:25,760 Speaker 2: kick off the new year. So I'll desigre Franklin temput 213 00:12:25,760 --> 00:12:28,320 Speaker 2: and fixed income writing. I maintain a constructive outlook for 214 00:12:28,400 --> 00:12:31,080 Speaker 2: US growth. There is a lot of uncertainty. However, I 215 00:12:31,120 --> 00:12:34,400 Speaker 2: see the balance skewed towards inflation risk, especially in the 216 00:12:34,440 --> 00:12:36,120 Speaker 2: first part of twenty six. And now John, just now 217 00:12:36,160 --> 00:12:37,640 Speaker 2: for Mores and good morning. It's going to see you. 218 00:12:38,000 --> 00:12:38,520 Speaker 5: Nice to see you. 219 00:12:38,600 --> 00:12:40,600 Speaker 2: It's very nice to see you. Happy New Year. Let's 220 00:12:40,600 --> 00:12:43,240 Speaker 2: talk about that source of inflation risk. What's the most 221 00:12:43,280 --> 00:12:46,120 Speaker 2: prominent source of inflation risk for you in the team. 222 00:12:46,360 --> 00:12:47,280 Speaker 5: The fiscal impulse. 223 00:12:47,600 --> 00:12:51,360 Speaker 7: So you were just talking about the what we hope 224 00:12:51,400 --> 00:12:54,480 Speaker 7: to see, but the reality is this week we already 225 00:12:54,520 --> 00:12:56,800 Speaker 7: know the big beautiful Bill is going to hand out 226 00:12:57,000 --> 00:12:59,360 Speaker 7: a lot of goodies across the board. 227 00:13:00,000 --> 00:13:01,720 Speaker 5: We're talking about. 228 00:13:01,800 --> 00:13:04,960 Speaker 7: The consumer, whether we're talking about industry, All of these 229 00:13:04,960 --> 00:13:08,520 Speaker 7: factors lead to inflation, and we haven't actually something which 230 00:13:08,800 --> 00:13:12,040 Speaker 7: comes on and then moves off the front page is 231 00:13:12,360 --> 00:13:16,320 Speaker 7: the two thousand dollars rebate check. Remember that in the 232 00:13:16,360 --> 00:13:19,360 Speaker 7: first three months of the Biden administration, we helicopter dropped 233 00:13:19,400 --> 00:13:22,960 Speaker 7: fourteen hundred dollar checks. And I've always maintained that was 234 00:13:22,960 --> 00:13:25,960 Speaker 7: one of the principal sources of the inflation burst. We 235 00:13:26,120 --> 00:13:29,959 Speaker 7: saw that massive fiscal splurge. If we get that splurge 236 00:13:30,000 --> 00:13:33,280 Speaker 7: in h one, it results in consumer demand. And I 237 00:13:33,360 --> 00:13:35,600 Speaker 7: know that there is a lot of concern and angst 238 00:13:35,600 --> 00:13:38,400 Speaker 7: about the labor market. The labor market is a different 239 00:13:38,480 --> 00:13:41,560 Speaker 7: labor market. I don't think you can read thirty k 240 00:13:41,800 --> 00:13:44,280 Speaker 7: jobs the same way you could read thirty k jobs 241 00:13:44,320 --> 00:13:47,960 Speaker 7: two years ago. That's supposed to be balance right now. 242 00:13:48,000 --> 00:13:51,360 Speaker 7: So if you're above thirty, you know the economy's kind 243 00:13:51,400 --> 00:13:52,640 Speaker 7: of treading water. 244 00:13:53,000 --> 00:13:55,520 Speaker 6: Do you see companies potentially passing on more of these 245 00:13:55,559 --> 00:13:57,760 Speaker 6: higher costs if the consumer is able to do it 246 00:13:57,760 --> 00:13:59,200 Speaker 6: because they have more money in their pocket. 247 00:13:59,360 --> 00:14:00,280 Speaker 5: Yeah, I do. 248 00:14:00,400 --> 00:14:03,920 Speaker 7: I do actually passing on the higher costs, but also 249 00:14:04,480 --> 00:14:07,679 Speaker 7: genuine higher demand. The one thing which continues to flow 250 00:14:07,720 --> 00:14:11,600 Speaker 7: through is the American American consumers desire to consume. And 251 00:14:11,640 --> 00:14:14,200 Speaker 7: I'm very interested to know what the end of this 252 00:14:14,400 --> 00:14:17,480 Speaker 7: Christmas season will look like. But looking at what we're 253 00:14:17,520 --> 00:14:19,720 Speaker 7: hearing in real time, it looks like it's going to 254 00:14:19,760 --> 00:14:20,360 Speaker 7: be a strong one. 255 00:14:20,400 --> 00:14:22,960 Speaker 6: Putting these two stories together in Washington, DC right now, 256 00:14:22,960 --> 00:14:25,480 Speaker 6: the President is clearly putting a lid on oil prices 257 00:14:25,520 --> 00:14:27,880 Speaker 6: going up when it looks what's happening in Venezuela. But 258 00:14:27,920 --> 00:14:30,040 Speaker 6: at the same time, they're going to potentially get more 259 00:14:30,080 --> 00:14:33,960 Speaker 6: fiscal impulse ahead of the midterm election. Does the oil 260 00:14:34,280 --> 00:14:38,520 Speaker 6: depression of a price help the potential statflationary fears you have. 261 00:14:38,720 --> 00:14:41,280 Speaker 7: So it's not a it's not statulation. I'm expecting growth 262 00:14:41,280 --> 00:14:43,360 Speaker 7: to two point seventy five to three percent, driven by 263 00:14:43,360 --> 00:14:45,680 Speaker 7: that consumer demand, driven by the fact that we're getting 264 00:14:45,960 --> 00:14:49,400 Speaker 7: private sector investment in this country. Between last year and 265 00:14:49,440 --> 00:14:52,840 Speaker 7: this year. It's around one trillion dollars. That's more than 266 00:14:52,880 --> 00:14:54,800 Speaker 7: what it's about as much Germany is going to do 267 00:14:54,880 --> 00:14:57,160 Speaker 7: over ten years. So when you stop and put that 268 00:14:57,200 --> 00:15:00,360 Speaker 7: into perspective, you've got a lot of tailwinds coming in 269 00:15:00,520 --> 00:15:02,840 Speaker 7: for growth this year. So it's not really stagflation that 270 00:15:02,880 --> 00:15:05,320 Speaker 7: I'm talking about. I'm just saying that I don't expect 271 00:15:05,360 --> 00:15:07,320 Speaker 7: major advances on inflation. 272 00:15:07,760 --> 00:15:07,880 Speaker 2: Now. 273 00:15:08,080 --> 00:15:10,920 Speaker 5: Can oil be the game changer? I don't think so. 274 00:15:11,280 --> 00:15:12,360 Speaker 5: I don't think in the near term. 275 00:15:12,400 --> 00:15:15,920 Speaker 7: I think Venezuelan oil that's a two three year out 276 00:15:15,920 --> 00:15:19,480 Speaker 7: story because yeah, there's a sentiment driven Yes there's going 277 00:15:19,520 --> 00:15:22,040 Speaker 7: to be a lot more supply, but how much actual 278 00:15:22,040 --> 00:15:23,600 Speaker 7: supply are you going to see in the new term. 279 00:15:23,800 --> 00:15:26,280 Speaker 1: So we talk about inflation as though or a monolith, 280 00:15:26,560 --> 00:15:28,720 Speaker 1: and inflation can be expressed through the market in many 281 00:15:28,720 --> 00:15:31,160 Speaker 1: different ways. It can be a higher long end of 282 00:15:31,280 --> 00:15:34,400 Speaker 1: the yield curve, you could see, for example, the dollar weeke, 283 00:15:34,480 --> 00:15:37,720 Speaker 1: and substantially you could see metals prices go up significantly. 284 00:15:37,840 --> 00:15:42,560 Speaker 1: Which node do you think will transmit through markets most directly, I. 285 00:15:42,600 --> 00:15:43,440 Speaker 2: Think a little bit of all. 286 00:15:43,640 --> 00:15:45,320 Speaker 7: So you're going to see a further steepening of the 287 00:15:45,400 --> 00:15:47,640 Speaker 7: yield curve in my book, because I think the Fed 288 00:15:47,680 --> 00:15:49,520 Speaker 7: should not have got up to three fifty, and if 289 00:15:49,520 --> 00:15:51,920 Speaker 7: they actually go further than three fifty, I think it 290 00:15:51,920 --> 00:15:53,720 Speaker 7: would be a substantial mistake. And we're going to see 291 00:15:53,720 --> 00:15:57,400 Speaker 7: a significantly steeper yield curve because if we stop to think, 292 00:15:57,800 --> 00:15:59,920 Speaker 7: the Fed has got one hundred and seventy five basis 293 00:16:00,040 --> 00:16:03,520 Speaker 7: points and tenure yields are higher than they were before 294 00:16:03,560 --> 00:16:09,440 Speaker 7: they started cutting, which means underlying the market's apparent sanguineness 295 00:16:09,960 --> 00:16:12,800 Speaker 7: about everything that's going on, clearly there is some concern 296 00:16:12,920 --> 00:16:14,200 Speaker 7: on the fiscal and the inflation. 297 00:16:14,600 --> 00:16:16,720 Speaker 5: And in terms of the dollar, I'd say the dollar 298 00:16:16,800 --> 00:16:17,760 Speaker 5: is a little bit mixed. 299 00:16:17,960 --> 00:16:20,320 Speaker 7: In terms of the G three, I think we're pretty 300 00:16:20,360 --> 00:16:23,000 Speaker 7: close to fair value against the euro actually, and I 301 00:16:23,080 --> 00:16:24,400 Speaker 7: think we're massively overvalued. 302 00:16:24,720 --> 00:16:26,560 Speaker 2: Jump in because you acknowledged the bulk of that move 303 00:16:26,680 --> 00:16:28,080 Speaker 2: was in twenty four, not twenty five. 304 00:16:28,160 --> 00:16:28,640 Speaker 5: Absolutely. 305 00:16:28,720 --> 00:16:30,680 Speaker 2: In twenty five, the cut interest rates and bond yards 306 00:16:30,720 --> 00:16:33,360 Speaker 2: on a ten year maturity actually fell, they didn't rise. 307 00:16:33,720 --> 00:16:36,440 Speaker 2: What's changed for twenty five in the cutting cycle of 308 00:16:36,560 --> 00:16:39,000 Speaker 2: last year compared to what we saw in twenty four because. 309 00:16:38,800 --> 00:16:40,720 Speaker 7: I think this is the year you actually get if 310 00:16:40,800 --> 00:16:44,640 Speaker 7: you get the fiscal impulse that I'm talking about, those 311 00:16:44,760 --> 00:16:48,760 Speaker 7: tax rebate checks, those so the consumption demands, the tailwinds 312 00:16:48,840 --> 00:16:53,320 Speaker 7: are stronger. I think in addition, on the non AI 313 00:16:53,720 --> 00:16:58,320 Speaker 7: hyper scaling front, we actually haven't seen that much investment 314 00:16:58,440 --> 00:17:00,400 Speaker 7: last year, and I think we probably will this year. 315 00:17:00,640 --> 00:17:02,640 Speaker 7: So I think there are lots of tailwinds to growth 316 00:17:02,800 --> 00:17:05,280 Speaker 7: this year that we didn't actually have last year, and 317 00:17:05,400 --> 00:17:08,720 Speaker 7: you had everything related to the tariff related uncertainty which 318 00:17:08,760 --> 00:17:09,920 Speaker 7: really skewed. 319 00:17:09,960 --> 00:17:10,920 Speaker 5: One half of the year. 320 00:17:11,359 --> 00:17:14,920 Speaker 7: So I think when Tariff's liberation Day was first announced, 321 00:17:15,000 --> 00:17:17,440 Speaker 7: everyone was sure that meant a recession in the US. 322 00:17:17,680 --> 00:17:18,119 Speaker 5: I didn't. 323 00:17:18,760 --> 00:17:22,480 Speaker 7: I'm just eratulated, but it was, so I think we 324 00:17:22,640 --> 00:17:23,840 Speaker 7: just start from a different spot. 325 00:17:24,040 --> 00:17:25,920 Speaker 1: So a super Yeld curve in and of itself isn't 326 00:17:25,920 --> 00:17:29,040 Speaker 1: necessarily negative for the market. It can be actually really positive. 327 00:17:29,119 --> 00:17:30,160 Speaker 5: When it comes to financials. 328 00:17:30,440 --> 00:17:33,600 Speaker 1: The absolute level of yields does matter? Yes, what's the 329 00:17:33,720 --> 00:17:37,280 Speaker 1: stopping out point for ten year yields? Were suddenly risk 330 00:17:37,359 --> 00:17:38,879 Speaker 1: assets lose their luster? 331 00:17:39,200 --> 00:17:41,600 Speaker 5: So I think, you know, I'm not. I think that. 332 00:17:43,440 --> 00:17:46,719 Speaker 7: Fixed in markets have shown an ability to absorb all 333 00:17:46,800 --> 00:17:49,720 Speaker 7: the way to four seventy five and above. Equity markets, 334 00:17:49,760 --> 00:17:51,760 Speaker 7: it's a different question, and I'm not an equity person, 335 00:17:51,800 --> 00:17:54,520 Speaker 7: so I'll talk to that'd just say that, do I 336 00:17:54,720 --> 00:17:59,280 Speaker 7: see ten year yields going back to those substantially above 337 00:17:59,320 --> 00:18:02,359 Speaker 7: four fifty for close to four seventy five levels? I 338 00:18:02,359 --> 00:18:06,000 Speaker 7: actually I do if you don't have the wild card, 339 00:18:06,160 --> 00:18:09,560 Speaker 7: which is something which knocks the economy into a recession. 340 00:18:10,080 --> 00:18:13,800 Speaker 7: And really that's it's just not my baseline. If I 341 00:18:13,840 --> 00:18:16,200 Speaker 7: look at the tailwinds coming from Montree and fiscal policy 342 00:18:16,320 --> 00:18:20,080 Speaker 7: right now, it's very hard to argue that we're heading 343 00:18:20,119 --> 00:18:21,199 Speaker 7: for a weakening of the. 344 00:18:21,560 --> 00:18:24,720 Speaker 2: Pretty guys love to talk about bonds, but people can 345 00:18:24,760 --> 00:18:26,840 Speaker 2: talk about equacies. The spread in the last thirty minutes 346 00:18:27,000 --> 00:18:29,560 Speaker 2: is three three cuts. You're basically at zero for this year, 347 00:18:29,600 --> 00:18:30,840 Speaker 2: and during the man you want I've had the core 348 00:18:30,960 --> 00:18:33,040 Speaker 2: equity guy is a three for this year. 349 00:18:33,119 --> 00:18:35,120 Speaker 7: No, And I think that's the difference because I think 350 00:18:35,200 --> 00:18:38,040 Speaker 7: equity people do get concerned. Certainly within my own film, 351 00:18:38,280 --> 00:18:40,520 Speaker 7: my equity colleagues get very concerned when I say that, 352 00:18:40,720 --> 00:18:42,600 Speaker 7: you know, honestly, they should have got last time. And 353 00:18:42,640 --> 00:18:44,080 Speaker 7: I'm not sure they're going to cut at all this 354 00:18:44,240 --> 00:18:45,280 Speaker 7: year this year. 355 00:18:45,560 --> 00:18:46,200 Speaker 5: Really honest. 356 00:18:46,400 --> 00:18:48,680 Speaker 1: How pretty guys talk about bonds and bond guys talk 357 00:18:48,680 --> 00:18:49,679 Speaker 1: about equities all the time. 358 00:18:49,720 --> 00:18:52,320 Speaker 2: They designed by saying we don't cover that. 359 00:18:52,480 --> 00:18:55,440 Speaker 5: But let me tell you that's what happens every single 360 00:18:55,960 --> 00:18:56,480 Speaker 5: I agree. 361 00:18:56,640 --> 00:19:00,840 Speaker 2: What can I say? Starts a dropping by and I'm 362 00:19:00,840 --> 00:19:04,600 Speaker 2: design the a Franklin sampleton stay with us. More Bloomberg 363 00:19:04,640 --> 00:19:16,399 Speaker 2: surveillance coming up after this, Andrew Homholst, The city's got 364 00:19:16,480 --> 00:19:18,479 Speaker 2: things to say on the data and on that too, 365 00:19:18,720 --> 00:19:20,760 Speaker 2: and on base case. The unemployment rate rises to four 366 00:19:20,800 --> 00:19:23,840 Speaker 2: point seven percent. Indie December jobs report continue itis trend 367 00:19:23,960 --> 00:19:27,040 Speaker 2: higher and keeping the FED reducing policy interest rates. Andrew 368 00:19:27,119 --> 00:19:30,119 Speaker 2: john Is now for more. Andre Camrnic Yeah, happy to 369 00:19:30,200 --> 00:19:31,840 Speaker 2: year to you too. That's not such a happy new 370 00:19:31,880 --> 00:19:34,880 Speaker 2: year for the labor market though, to drift towards five continues. 371 00:19:35,440 --> 00:19:38,200 Speaker 8: We think so, and I think that, you know, we're 372 00:19:38,200 --> 00:19:40,639 Speaker 8: in the business of forecasting these things on a monthly basis, 373 00:19:40,640 --> 00:19:43,680 Speaker 8: there's a lot of volatility, we have some residual seasonality 374 00:19:43,720 --> 00:19:45,640 Speaker 8: in the data. All those things kind of obscure what's 375 00:19:45,640 --> 00:19:47,240 Speaker 8: going on. But if you just step back and look 376 00:19:47,320 --> 00:19:49,520 Speaker 8: at what this labor market has done over the last 377 00:19:49,600 --> 00:19:52,479 Speaker 8: two years, we've been trending higher in the unemployment rate. 378 00:19:52,520 --> 00:19:55,239 Speaker 8: We've just been consistently trending higher in the unemployment rate. 379 00:19:55,320 --> 00:19:57,680 Speaker 8: So we think that trend continues this year. We do 380 00:19:57,800 --> 00:19:59,439 Speaker 8: think that can happen in the jobs report that we're 381 00:19:59,480 --> 00:20:01,560 Speaker 8: going to get this week, with the participation rate coming 382 00:20:01,640 --> 00:20:03,440 Speaker 8: up a little bit, maybe that's going to push the 383 00:20:03,560 --> 00:20:06,159 Speaker 8: unemployment rate higher. But what I would really emphasize is 384 00:20:06,200 --> 00:20:08,200 Speaker 8: that that broad trend towards loosening in the job. 385 00:20:08,160 --> 00:20:10,960 Speaker 2: I talked about the hawkish two. As the FMC rotates 386 00:20:10,960 --> 00:20:12,760 Speaker 2: and you get the regional voters, the new ones coming 387 00:20:12,840 --> 00:20:15,200 Speaker 2: on board for a year, what is the credible case 388 00:20:15,520 --> 00:20:17,800 Speaker 2: to stay on hold? What is that case of the moment? 389 00:20:18,080 --> 00:20:20,200 Speaker 8: So I think it's all about how comfortable are you 390 00:20:20,280 --> 00:20:22,920 Speaker 8: with the labor market, and then how much discomfort you 391 00:20:23,080 --> 00:20:26,520 Speaker 8: have about inflation, and then, to some extent, financial conditions. Also, 392 00:20:26,560 --> 00:20:29,080 Speaker 8: because financial conditions are easy, they've been easy for some time. 393 00:20:29,800 --> 00:20:32,360 Speaker 8: And then on inflation, and this is where I think 394 00:20:32,440 --> 00:20:35,680 Speaker 8: people really differ. We're above target on inflation. If you 395 00:20:35,720 --> 00:20:38,399 Speaker 8: listen to Chair Powell, he'll say two point eight percent 396 00:20:38,520 --> 00:20:41,320 Speaker 8: or so core PCE inflation, But go ahead and subtract 397 00:20:41,320 --> 00:20:44,360 Speaker 8: about fifty basis points from that due to tariffs, you're 398 00:20:44,400 --> 00:20:46,280 Speaker 8: down to two point three percent. So I think there's 399 00:20:46,480 --> 00:20:49,680 Speaker 8: a core of more dubbish FED officials that are looking 400 00:20:49,720 --> 00:20:53,040 Speaker 8: through that tariff inflation and are not that concerned about inflation. 401 00:20:53,960 --> 00:20:56,359 Speaker 8: But there's a group that are still concerned about inflation. 402 00:20:56,520 --> 00:20:58,640 Speaker 8: So it's going to be the jobs data that matter 403 00:20:58,680 --> 00:21:01,000 Speaker 8: in terms of are we become a little bit more 404 00:21:01,160 --> 00:21:04,399 Speaker 8: uncomfortable with the job market, this very low hiring job market, 405 00:21:04,720 --> 00:21:06,640 Speaker 8: And then on the inflation data, and that could take 406 00:21:06,680 --> 00:21:09,200 Speaker 8: a number of months, but we have a clear slowing 407 00:21:09,240 --> 00:21:11,639 Speaker 8: trend in shelter prices. I do think that some of 408 00:21:11,680 --> 00:21:13,960 Speaker 8: those concerns about inflation will dissipate over the course of 409 00:21:14,040 --> 00:21:16,960 Speaker 8: this year. They may rise first before they dissipate later 410 00:21:17,040 --> 00:21:17,320 Speaker 8: this year. 411 00:21:17,440 --> 00:21:21,040 Speaker 1: One thing that Richmond President Tom Barkin talked about was 412 00:21:21,080 --> 00:21:23,200 Speaker 1: that this is going to be clean data and that 413 00:21:23,320 --> 00:21:26,000 Speaker 1: there he's looking forward to getting some clean data how 414 00:21:26,119 --> 00:21:28,800 Speaker 1: much do you actually think this data will be the 415 00:21:28,960 --> 00:21:31,560 Speaker 1: first clean read since the government shutdown? 416 00:21:31,760 --> 00:21:35,040 Speaker 8: So I think on the jobs reported on the unemployment rate, 417 00:21:35,119 --> 00:21:37,960 Speaker 8: this is really important in terms of the interpretation. A 418 00:21:38,000 --> 00:21:40,760 Speaker 8: lot of people looked at that November unemployment rate and said, yeah, 419 00:21:40,800 --> 00:21:43,840 Speaker 8: four point six percent, but maybe it got boosted because 420 00:21:43,880 --> 00:21:46,560 Speaker 8: of the government shutdown. So even if we hold steady 421 00:21:46,600 --> 00:21:49,000 Speaker 8: at four point six percent on the unemployment rate in 422 00:21:49,160 --> 00:21:51,600 Speaker 8: the data for December, I think people will look at 423 00:21:51,600 --> 00:21:53,400 Speaker 8: that and say, well, that was a clean four point 424 00:21:53,480 --> 00:21:55,920 Speaker 8: six percent. And we've heard different FED officials different in 425 00:21:56,040 --> 00:21:58,040 Speaker 8: terms of how clean or not they think that that 426 00:21:58,200 --> 00:21:58,600 Speaker 8: number is. 427 00:21:58,680 --> 00:21:59,960 Speaker 5: So yes, I do think. 428 00:22:00,000 --> 00:22:02,000 Speaker 8: I think that especially on the inflation data. I think 429 00:22:02,000 --> 00:22:04,440 Speaker 8: there are big questions about the inflation data during the 430 00:22:04,480 --> 00:22:06,760 Speaker 8: shutdown period, But on the jobs data also there are 431 00:22:06,760 --> 00:22:09,760 Speaker 8: some lingering questions. This job's report will help to resolve those, 432 00:22:09,920 --> 00:22:10,359 Speaker 8: and you think that. 433 00:22:10,400 --> 00:22:12,880 Speaker 1: It's going to resolve it in terms of possibly even 434 00:22:13,280 --> 00:22:15,359 Speaker 1: getting a feder rate cut by the end of this month. 435 00:22:15,680 --> 00:22:18,600 Speaker 5: And I just wonder how far that will go to. 436 00:22:18,720 --> 00:22:22,760 Speaker 1: Bolstering a labor market that's being affected by other issues 437 00:22:22,880 --> 00:22:25,120 Speaker 1: outside of any kind of monetary policy. 438 00:22:25,400 --> 00:22:29,520 Speaker 8: Yeah, not very far right. So cutting interest rates twenty 439 00:22:29,560 --> 00:22:32,400 Speaker 8: five basis points and doing it in this month versus 440 00:22:32,480 --> 00:22:33,960 Speaker 8: doing it later this year, that's just not going to 441 00:22:34,000 --> 00:22:36,720 Speaker 8: have a huge effect on the macroeconomy. But I think 442 00:22:36,760 --> 00:22:40,040 Speaker 8: you're still watching the labor market because you're looking at 443 00:22:40,080 --> 00:22:42,320 Speaker 8: three things. If the labor market is loosening, it's telling 444 00:22:42,359 --> 00:22:44,399 Speaker 8: you maybe you're not really a neutral, Maybe you need 445 00:22:44,480 --> 00:22:46,760 Speaker 8: to cut a little bit further. It's telling you there's 446 00:22:46,800 --> 00:22:48,960 Speaker 8: going to be less inflationary pressure because we don't have 447 00:22:49,040 --> 00:22:51,600 Speaker 8: this wage pressure, we don't have a tight labor market. 448 00:22:52,119 --> 00:22:54,840 Speaker 8: And it's also telling you that maybe I want to 449 00:22:54,880 --> 00:22:56,920 Speaker 8: start thinking about insurance. This is not something we're really 450 00:22:56,960 --> 00:22:59,040 Speaker 8: hearing from FED officials now, but maybe I want to 451 00:22:59,040 --> 00:23:00,840 Speaker 8: think about do I need to be at least at 452 00:23:00,840 --> 00:23:02,560 Speaker 8: the bottom of the range of neutral. Maybe I'm going 453 00:23:02,600 --> 00:23:04,960 Speaker 8: to need to go below neutral, because if you're actually 454 00:23:05,000 --> 00:23:07,640 Speaker 8: getting to five percent unemployment and mean, I think it's 455 00:23:07,640 --> 00:23:10,359 Speaker 8: a very obvious point, but one that's being missed a 456 00:23:10,400 --> 00:23:13,040 Speaker 8: little bit in some of the rhetoric around this. The 457 00:23:13,160 --> 00:23:16,639 Speaker 8: unemployment rate is moving higher gradually. It's good that it's 458 00:23:16,680 --> 00:23:18,520 Speaker 8: a gradual move and not a sharp move. But if 459 00:23:18,520 --> 00:23:20,879 Speaker 8: we just keep moving gradually higher. We will hit five percent, 460 00:23:20,920 --> 00:23:22,679 Speaker 8: and you'll keep going north to five percent, and at 461 00:23:22,720 --> 00:23:24,720 Speaker 8: some point we'll say we really have an issue with 462 00:23:24,800 --> 00:23:25,840 Speaker 8: unemployment in this country. 463 00:23:25,920 --> 00:23:28,479 Speaker 6: Andrew, when it comes to inflation, what about healthcare inflation 464 00:23:28,600 --> 00:23:30,639 Speaker 6: given the fact that subidies are rising. 465 00:23:31,520 --> 00:23:36,160 Speaker 8: Yeah, so we have this really complex technical issue now 466 00:23:36,280 --> 00:23:39,680 Speaker 8: with the way that these healthcare subsidies are going to 467 00:23:39,800 --> 00:23:43,040 Speaker 8: change as we go into twenty twenty six, that could 468 00:23:43,119 --> 00:23:46,200 Speaker 8: have some direct effect on the CPI data. We don't 469 00:23:46,200 --> 00:23:47,720 Speaker 8: think it's going to have much of an effect on 470 00:23:48,040 --> 00:23:51,679 Speaker 8: the PCEE inflation data. But in terms of just consumer costs, right, 471 00:23:51,920 --> 00:23:53,680 Speaker 8: this is a higher cost that consumers will be facing, 472 00:23:53,720 --> 00:23:55,119 Speaker 8: but I don't think we'll have a big effect on 473 00:23:55,160 --> 00:23:56,080 Speaker 8: the reported numbers. 474 00:23:56,200 --> 00:23:59,440 Speaker 6: So when it comes to inflation, what is the biggest concern? 475 00:23:59,520 --> 00:23:59,639 Speaker 9: Then? 476 00:24:00,040 --> 00:24:03,040 Speaker 6: Terms of policy, because everyone will talk about tariffs, but 477 00:24:03,160 --> 00:24:06,000 Speaker 6: this year's also healthcare. Do you think any of these 478 00:24:06,000 --> 00:24:06,800 Speaker 6: will have an impact? 479 00:24:07,200 --> 00:24:10,240 Speaker 8: I think what I would be watching in the inflation 480 00:24:10,320 --> 00:24:12,480 Speaker 8: data or two things. One is do we see this 481 00:24:12,680 --> 00:24:16,640 Speaker 8: continued gradual softening of services inflation. We're seeing it most 482 00:24:16,640 --> 00:24:19,200 Speaker 8: clearly in shelter. We're not seeing it as clearly in 483 00:24:19,359 --> 00:24:23,200 Speaker 8: non shelter services. That's one question. The other question is 484 00:24:23,640 --> 00:24:27,240 Speaker 8: I was mentioning earlier Powell talking about this fifty basis 485 00:24:27,240 --> 00:24:28,320 Speaker 8: points due to tariffs. 486 00:24:28,840 --> 00:24:29,320 Speaker 5: Well, is. 487 00:24:32,240 --> 00:24:34,240 Speaker 8: That strength that you have in goods prices? Is it 488 00:24:34,320 --> 00:24:37,280 Speaker 8: really terrif related or are there other factors that are 489 00:24:37,280 --> 00:24:39,440 Speaker 8: playing in to hire goods prices? Is that going to 490 00:24:39,480 --> 00:24:41,879 Speaker 8: continue or is that going to dissipate? I don't know 491 00:24:41,920 --> 00:24:43,960 Speaker 8: if policy can do a lot to address those things. 492 00:24:44,000 --> 00:24:46,240 Speaker 8: And when people talk about affordability, honestly, I think a 493 00:24:46,280 --> 00:24:48,720 Speaker 8: lot of what they're talking about is the expense of 494 00:24:48,760 --> 00:24:50,560 Speaker 8: buying a house, which has to do with mortgage rates 495 00:24:50,600 --> 00:24:52,440 Speaker 8: and that well, the FED cutting interest rates will will 496 00:24:52,440 --> 00:24:52,880 Speaker 8: bring that down. 497 00:24:53,080 --> 00:24:56,560 Speaker 2: So anjie, thanks, just body expensive? Everything's a jimpn Coast 498 00:24:56,760 --> 00:24:57,680 Speaker 2: is sell English then, didn't it? 499 00:24:57,920 --> 00:24:58,080 Speaker 8: Jim? 500 00:24:58,440 --> 00:25:00,400 Speaker 2: I did a great job of this suff for research. 501 00:25:01,040 --> 00:25:04,320 Speaker 2: The FED talks about one offs and one time changes 502 00:25:04,320 --> 00:25:07,320 Speaker 2: because they're focused on the change the public is dealing 503 00:25:07,359 --> 00:25:10,239 Speaker 2: with the price level that's right, and where prices are, 504 00:25:10,359 --> 00:25:13,360 Speaker 2: it's just ridiculous. Anyone trying to buy food or pay 505 00:25:13,400 --> 00:25:16,480 Speaker 2: the energy bill, it is absolutely ridiculous. Do you think 506 00:25:16,480 --> 00:25:19,040 Speaker 2: the FED needs to reconcile the differences with a between 507 00:25:19,119 --> 00:25:21,840 Speaker 2: how they look at inflation and how a public experience 508 00:25:21,920 --> 00:25:22,119 Speaker 2: is it. 509 00:25:22,359 --> 00:25:24,560 Speaker 8: I think certainly, and how they talk about that. It's 510 00:25:24,800 --> 00:25:27,800 Speaker 8: very important to kind of get the rhetoric right around that, 511 00:25:27,840 --> 00:25:29,600 Speaker 8: because it is true. I experienced that you go to 512 00:25:29,680 --> 00:25:33,000 Speaker 8: the store and you're just shocked at how much everything costs. 513 00:25:33,040 --> 00:25:35,719 Speaker 8: And that's I'm an economist. I understand inflation, I understand 514 00:25:35,760 --> 00:25:38,560 Speaker 8: price level, but I still have that emotional experience of 515 00:25:38,680 --> 00:25:41,320 Speaker 8: going to the store and realizing how expensive everything is. So, yes, 516 00:25:41,400 --> 00:25:43,440 Speaker 8: the price level is higher, and I think that is 517 00:25:43,480 --> 00:25:45,800 Speaker 8: something that should be communicated more clearly, is that the 518 00:25:46,640 --> 00:25:49,440 Speaker 8: path forward, it's going to be difficult to bring that 519 00:25:49,560 --> 00:25:53,119 Speaker 8: price level down, right. We're not trying to generate deflation. Now. 520 00:25:53,160 --> 00:25:55,399 Speaker 8: What you would hope is that wages continue to grow, right, 521 00:25:55,480 --> 00:25:58,880 Speaker 8: and we end up having real growth in real wage growth, 522 00:25:58,920 --> 00:26:00,480 Speaker 8: And we are having some of that, which is a 523 00:26:00,560 --> 00:26:03,359 Speaker 8: healthy thing. But honestly, you need years of that for 524 00:26:03,480 --> 00:26:04,919 Speaker 8: people to feel better about these praises. 525 00:26:05,000 --> 00:26:07,240 Speaker 2: Quick one to finish the new feed chair is his 526 00:26:07,359 --> 00:26:07,840 Speaker 2: name Kevin. 527 00:26:09,400 --> 00:26:11,320 Speaker 8: I think there's a high probability that his name will 528 00:26:11,359 --> 00:26:12,280 Speaker 8: be Kevin, and I think that's. 529 00:26:12,119 --> 00:26:14,720 Speaker 2: About all we can say right now, Andrew, thank you, 530 00:26:15,840 --> 00:26:19,240 Speaker 2: stay with us. More Bloomberg Surveillance coming up after this. 531 00:26:28,000 --> 00:26:30,760 Speaker 2: Let's talk about this market, Troy Geersky, our future standard 532 00:26:30,800 --> 00:26:34,440 Speaker 2: writing in an environment where public equity valuations are stretched 533 00:26:34,720 --> 00:26:37,400 Speaker 2: and it's very difficult to find growth outside of megacab 534 00:26:37,480 --> 00:26:41,000 Speaker 2: tech middle market, private equity stands out as an oasis. 535 00:26:41,280 --> 00:26:43,159 Speaker 2: Troy joins us now from what Troy, good morning and 536 00:26:43,200 --> 00:26:45,480 Speaker 2: happy new year. Good morning, get us see in the studio. 537 00:26:45,600 --> 00:26:47,760 Speaker 2: Thanks for coming in, buddy, Thank you. Let's talk about 538 00:26:47,840 --> 00:26:50,960 Speaker 2: setting the tone for markets worldwide and in private markets 539 00:26:50,960 --> 00:26:53,080 Speaker 2: for that matter. To what extent is the fate of 540 00:26:53,160 --> 00:26:55,480 Speaker 2: one company, And I'm going to say it, Open Ai, 541 00:26:55,680 --> 00:26:58,359 Speaker 2: that one company set the tone for the broader market. 542 00:26:58,760 --> 00:26:59,000 Speaker 4: Well. 543 00:26:59,680 --> 00:27:02,320 Speaker 9: As we discussing before, Open Ai has been at the 544 00:27:02,400 --> 00:27:06,240 Speaker 9: cutting edge of obviously infrastructure for the complex, right, and 545 00:27:06,359 --> 00:27:10,159 Speaker 9: that has driven competitive pressure for the hyperscalers, who are 546 00:27:10,640 --> 00:27:13,720 Speaker 9: historically petrified of losing market share in various areas to 547 00:27:13,840 --> 00:27:16,120 Speaker 9: spend money at prodigious rates. 548 00:27:16,200 --> 00:27:16,320 Speaker 2: Right. 549 00:27:16,480 --> 00:27:19,320 Speaker 9: The fact that thirty forty fifty, maybe even sixty basis 550 00:27:19,359 --> 00:27:21,640 Speaker 9: points of contribution an omenal GDP will come this year. 551 00:27:22,160 --> 00:27:25,160 Speaker 9: So they've been critically important in waking up the giants, 552 00:27:25,160 --> 00:27:27,680 Speaker 9: so to speak. On a go forward basis, though, the 553 00:27:27,760 --> 00:27:28,640 Speaker 9: hyperscalers are. 554 00:27:28,520 --> 00:27:30,680 Speaker 4: Going to drive more and more of the outcomes. 555 00:27:30,720 --> 00:27:33,200 Speaker 2: We believe what I'm getting at ready is the fights 556 00:27:33,240 --> 00:27:35,159 Speaker 2: of the public market. How tight is it to what 557 00:27:35,280 --> 00:27:37,560 Speaker 2: is happening in private markets and vice versa. 558 00:27:37,800 --> 00:27:41,280 Speaker 9: Yeah, so there private markets tend to have an advantage 559 00:27:41,359 --> 00:27:43,520 Speaker 9: for funding. Early, as you know, if you look back, 560 00:27:43,840 --> 00:27:46,680 Speaker 9: you know fifteen twenty years it was all about small 561 00:27:46,760 --> 00:27:49,000 Speaker 9: scale funding and then eventually going. 562 00:27:48,920 --> 00:27:50,520 Speaker 4: Public, and that allowed you to grow. 563 00:27:51,240 --> 00:27:53,680 Speaker 9: As private equity and private credit has grown up, they've 564 00:27:53,720 --> 00:27:56,119 Speaker 9: been the preferred sources of financing. And then prior to that, 565 00:27:56,200 --> 00:27:58,679 Speaker 9: of course, in growth areas you have venture capital. 566 00:28:00,400 --> 00:28:00,720 Speaker 4: Credit. 567 00:28:01,119 --> 00:28:04,520 Speaker 9: Infrastructure has led the way in terms of financing these projects. 568 00:28:04,840 --> 00:28:06,359 Speaker 9: And then now of course you have a little more 569 00:28:06,400 --> 00:28:10,800 Speaker 9: circular funding coming again from the largest five companies. 570 00:28:10,480 --> 00:28:10,840 Speaker 3: In the world. 571 00:28:10,960 --> 00:28:13,240 Speaker 1: There is this question though, and I think that just 572 00:28:13,400 --> 00:28:16,080 Speaker 1: to build on what John is saying, Open AI and 573 00:28:16,480 --> 00:28:19,760 Speaker 1: their investment has really fueled a lot of other investment 574 00:28:19,960 --> 00:28:23,640 Speaker 1: in infrastructure in data centers has popped up the valuations 575 00:28:23,680 --> 00:28:25,800 Speaker 1: of it at a time when suddenly people are looking 576 00:28:25,840 --> 00:28:29,159 Speaker 1: for more efficiency. At what point does that pose a 577 00:28:29,280 --> 00:28:33,480 Speaker 1: significant risk on a credit perspective to private credit and 578 00:28:33,800 --> 00:28:35,200 Speaker 1: infrastructure investment. 579 00:28:34,920 --> 00:28:37,639 Speaker 9: Is here well, So I think big picture right, if 580 00:28:37,680 --> 00:28:40,720 Speaker 9: you're looking at the roics that at least are modeled 581 00:28:40,760 --> 00:28:44,040 Speaker 9: out in data centers, and to be fair, remember the 582 00:28:44,200 --> 00:28:48,240 Speaker 9: demand for compute, not just an AI, but obviously almost 583 00:28:48,320 --> 00:28:54,120 Speaker 9: more importantly in old school SAS or other applications continues 584 00:28:54,200 --> 00:28:59,160 Speaker 9: to outstrip demand. So you have tremendous demand for the 585 00:28:59,280 --> 00:29:02,720 Speaker 9: computational powerless storage and you don't have enough supply yet. 586 00:29:02,880 --> 00:29:06,840 Speaker 9: So trying to extrapolate in the near term that some 587 00:29:07,040 --> 00:29:11,320 Speaker 9: struggle at OpenAI would lead to some circular backwash is hard. 588 00:29:11,680 --> 00:29:14,600 Speaker 9: We could see twenty seven and twenty eight by then. 589 00:29:14,640 --> 00:29:17,400 Speaker 9: If there's not an aroric, it's going to get a 590 00:29:17,400 --> 00:29:19,680 Speaker 9: little bit tricky in terms of Ford capax budgets. 591 00:29:19,840 --> 00:29:21,840 Speaker 1: Do you think that data centers are a good place 592 00:29:21,920 --> 00:29:23,880 Speaker 1: to keep investing in or do you think that there 593 00:29:23,920 --> 00:29:26,080 Speaker 1: needs to be a catch up trade with some of 594 00:29:26,160 --> 00:29:29,360 Speaker 1: the energy sector as well From a private investment perspective, 595 00:29:29,800 --> 00:29:30,400 Speaker 1: So look. 596 00:29:30,680 --> 00:29:33,640 Speaker 9: Everything all analysis our team does, and we're a much 597 00:29:33,680 --> 00:29:37,760 Speaker 9: smaller player roughly two billion in assets, is that Ford demand, 598 00:29:37,920 --> 00:29:41,320 Speaker 9: particularly in situations that are funded by hyperscalers where you 599 00:29:41,440 --> 00:29:45,280 Speaker 9: have that recurring revenue, that free cash flow look very attractive. 600 00:29:45,720 --> 00:29:47,920 Speaker 9: The comparison I always use is if you look at 601 00:29:47,960 --> 00:29:50,640 Speaker 9: senior security commercial real estate lending versus the senior part 602 00:29:50,680 --> 00:29:54,440 Speaker 9: of the capital structure in data centers, you get an 603 00:29:54,440 --> 00:29:56,520 Speaker 9: extra fifty to seventy basis points to pick up in 604 00:29:56,640 --> 00:29:59,920 Speaker 9: hospitality for instance. However, once you move down into MEZC, 605 00:30:00,560 --> 00:30:02,600 Speaker 9: given where we are in real estate cycle, you argably 606 00:30:02,680 --> 00:30:05,720 Speaker 9: have more upside the next several years in the digital space. 607 00:30:06,000 --> 00:30:08,440 Speaker 6: But to Lisa's point, is there a mismatch potentially for 608 00:30:08,520 --> 00:30:10,680 Speaker 6: the energy that is needed to run these data centers 609 00:30:10,720 --> 00:30:11,920 Speaker 6: that could potentially. 610 00:30:11,560 --> 00:30:12,800 Speaker 4: Hold the story back? 611 00:30:13,160 --> 00:30:15,760 Speaker 9: Well, it's a great point. So I think, big picture, 612 00:30:16,200 --> 00:30:18,600 Speaker 9: this is back to demand that stripling supply. Right, So 613 00:30:18,760 --> 00:30:20,520 Speaker 9: when we look at one of the risks to GDP 614 00:30:20,680 --> 00:30:24,400 Speaker 9: growth this year, it's less about on the demand side 615 00:30:24,600 --> 00:30:27,400 Speaker 9: and more about can you actually construct enough right, do 616 00:30:27,480 --> 00:30:28,520 Speaker 9: you have enough copper? 617 00:30:29,160 --> 00:30:30,440 Speaker 4: Do you have the political will? 618 00:30:30,560 --> 00:30:33,000 Speaker 9: I mean the other day Bernie Sanders and Ron DeSantis 619 00:30:33,120 --> 00:30:35,640 Speaker 9: agreeing on like constraining. 620 00:30:35,200 --> 00:30:36,720 Speaker 4: Like how often do you see that? 621 00:30:37,000 --> 00:30:37,120 Speaker 10: Right? 622 00:30:37,280 --> 00:30:39,080 Speaker 4: So there are more. 623 00:30:39,040 --> 00:30:42,200 Speaker 9: Challenges on the supply side, less challenges than the near 624 00:30:42,280 --> 00:30:45,160 Speaker 9: term on the demand side, and so that tends to 625 00:30:45,240 --> 00:30:48,080 Speaker 9: bode well for investments at least over the short intermedia term. 626 00:30:48,200 --> 00:30:49,680 Speaker 2: Do you think that's going to be fullest disciplined on 627 00:30:49,720 --> 00:30:51,800 Speaker 2: these plants and stealing them from spending lives. I think 628 00:30:51,800 --> 00:30:53,960 Speaker 2: Michael Semblists of JP molk and I said, management talked 629 00:30:53,960 --> 00:30:57,440 Speaker 2: about this recently. I've got compa through thirteen K. The 630 00:30:57,560 --> 00:31:00,400 Speaker 2: electricity needs that. Lisa talked about the social she'll put 631 00:31:00,480 --> 00:31:03,080 Speaker 2: back us pushback as wow, that's sub called gating. How 632 00:31:03,160 --> 00:31:05,640 Speaker 2: much of a disciplinary thanked will that have on they 633 00:31:05,720 --> 00:31:07,360 Speaker 2: spend us well? 634 00:31:08,080 --> 00:31:10,640 Speaker 9: As of now, you know, given the size of the budgets, 635 00:31:11,320 --> 00:31:14,760 Speaker 9: it looks like the spending side is set again. It's 636 00:31:14,840 --> 00:31:17,560 Speaker 9: more on the supply side. So I wouldn't expect until 637 00:31:17,560 --> 00:31:19,880 Speaker 9: twenty seven to twenty eight. Remember the key factor here 638 00:31:20,760 --> 00:31:23,440 Speaker 9: is when will the ROI C for AI really show 639 00:31:23,520 --> 00:31:26,720 Speaker 9: up in the real economy, Not in search, not in 640 00:31:27,000 --> 00:31:30,400 Speaker 9: Gemini et cetera, But in the real economy everyone for 641 00:31:30,520 --> 00:31:31,760 Speaker 9: the time being is wanting to spend. 642 00:31:31,800 --> 00:31:33,520 Speaker 2: When you said the rate economy, which you may just 643 00:31:33,600 --> 00:31:34,000 Speaker 2: explain it. 644 00:31:34,280 --> 00:31:37,800 Speaker 9: So one of our kind of small trades in our 645 00:31:37,880 --> 00:31:41,080 Speaker 9: multi strategy fund for instances trying to find players in 646 00:31:41,560 --> 00:31:48,320 Speaker 9: broader industries medicine, you know, chemicals, energy, infrastructure, et cetera, 647 00:31:48,400 --> 00:31:51,600 Speaker 9: where you can actually use these tools to meaningfully produce 648 00:31:51,800 --> 00:31:55,120 Speaker 9: or boost productivity growth. That's starting the show evidence, but 649 00:31:55,200 --> 00:31:58,120 Speaker 9: it's unclear if it's enough to drive the continued growth 650 00:31:58,200 --> 00:32:00,440 Speaker 9: of spending. Right, and so what I'm talking here is 651 00:32:00,880 --> 00:32:03,640 Speaker 9: you think of a flatlining and spending call it twenty 652 00:32:03,720 --> 00:32:04,440 Speaker 9: seven to twenty eight. 653 00:32:04,960 --> 00:32:07,080 Speaker 4: That will be fine for broader markets. 654 00:32:07,120 --> 00:32:10,960 Speaker 9: We'll have a multiple correction, multiple compression, hyperscaler multiples to 655 00:32:11,000 --> 00:32:12,680 Speaker 9: come down, but it will be very very. 656 00:32:12,640 --> 00:32:15,440 Speaker 4: Challenging, if not catastrophe for hardware. So you know when 657 00:32:15,480 --> 00:32:16,040 Speaker 4: you step. 658 00:32:15,880 --> 00:32:18,840 Speaker 9: Back, whether it's public markets or private markets, I think 659 00:32:18,920 --> 00:32:22,080 Speaker 9: the key in your portfolio is to have enough exposure 660 00:32:22,120 --> 00:32:24,560 Speaker 9: to the AI trend that it can move the needle, 661 00:32:25,040 --> 00:32:27,840 Speaker 9: but not so much that it causes significant damage. 662 00:32:27,880 --> 00:32:29,000 Speaker 4: If it peters out, we can. 663 00:32:28,960 --> 00:32:30,960 Speaker 2: Send to the detmalk is just saying this headline crossing 664 00:32:31,000 --> 00:32:33,880 Speaker 2: a blimpack terminal broad come full pot defile for ink 665 00:32:34,040 --> 00:32:36,920 Speaker 2: coming from that company. Lisa, just a crossing a terminal moment, Sagg. 666 00:32:37,120 --> 00:32:38,760 Speaker 1: Yeah, and I wonder how much of it's going to 667 00:32:38,800 --> 00:32:40,480 Speaker 1: be a fifty year tranch considering what we. 668 00:32:40,560 --> 00:32:42,200 Speaker 2: Saw from some previous ones. 669 00:32:42,440 --> 00:32:44,360 Speaker 1: It is interesting to see all the debt that is 670 00:32:44,440 --> 00:32:45,920 Speaker 1: coming to market and the fact that it has been 671 00:32:45,960 --> 00:32:48,080 Speaker 1: received so well. It has been in the public markets. 672 00:32:48,360 --> 00:32:51,200 Speaker 1: Now following onto the private market financing, they do have 673 00:32:51,280 --> 00:32:54,640 Speaker 1: a thirty year tranch. I don't see a fifty year tranche. 674 00:32:54,720 --> 00:32:56,800 Speaker 5: But you know who's next, right, This isn't over. 675 00:32:56,880 --> 00:32:58,520 Speaker 2: So new story, isn't it a new shift? There's a 676 00:32:58,560 --> 00:33:00,840 Speaker 2: different character to all of this. Get started coming out 677 00:33:00,840 --> 00:33:03,080 Speaker 2: of summer. We moved away from using cash flow and 678 00:33:03,120 --> 00:33:05,040 Speaker 2: we started to move to the death story. I'm not 679 00:33:05,080 --> 00:33:06,760 Speaker 2: talking about Broadcom and talked about what wassanta, but the 680 00:33:06,800 --> 00:33:08,880 Speaker 2: oarraticles that it sworled towards the end of last year. 681 00:33:09,000 --> 00:33:11,160 Speaker 1: Yeah, and it is a different proposition for the Oracles 682 00:33:11,160 --> 00:33:13,480 Speaker 1: of the world, which doesn't have profit, but when you 683 00:33:13,560 --> 00:33:16,640 Speaker 1: have at Google or Amazon, it's a very different story. 684 00:33:16,800 --> 00:33:18,920 Speaker 1: I think that it was Torsion Slack who said that 685 00:33:19,120 --> 00:33:22,120 Speaker 1: in twenty twenty four, seven percent of total investment grade 686 00:33:22,160 --> 00:33:24,920 Speaker 1: issuance came from the tech sector. It was fourteen percent 687 00:33:25,040 --> 00:33:27,160 Speaker 1: last year, and it came just for a couple of 688 00:33:27,240 --> 00:33:28,040 Speaker 1: months all at. 689 00:33:28,000 --> 00:33:31,080 Speaker 2: Once, Maison Trenty, you miss talking about bitcoin and public equities? 690 00:33:31,120 --> 00:33:31,760 Speaker 2: Do you miss any of that? 691 00:33:32,880 --> 00:33:33,280 Speaker 4: Not? Really? 692 00:33:35,720 --> 00:33:39,320 Speaker 10: Just ask it and on that topic if I may, 693 00:33:39,440 --> 00:33:42,080 Speaker 10: it's just a quickly out to ravate equity, So of 694 00:33:42,200 --> 00:33:46,880 Speaker 10: course yeah, why so if you think of the AI, 695 00:33:47,240 --> 00:33:49,720 Speaker 10: one of the nice things you can find are other 696 00:33:49,840 --> 00:33:52,960 Speaker 10: sectors with tremendous growth in healthcare and it's not because 697 00:33:53,000 --> 00:33:56,800 Speaker 10: of my engineering background. We're very excited about robotic surgery 698 00:33:57,400 --> 00:34:00,600 Speaker 10: infusion care. Not maybe as juicy as AI has been 699 00:34:00,640 --> 00:34:02,640 Speaker 10: the last two three years, but very good upside in 700 00:34:02,720 --> 00:34:03,400 Speaker 10: limited downside. 701 00:34:03,400 --> 00:34:06,000 Speaker 2: We're done for squeezing in that extra trait. Thank you 702 00:34:06,480 --> 00:34:11,080 Speaker 2: guessing the feature standing. This is the Bloomberg Surveillance Podcast, 703 00:34:11,280 --> 00:34:14,800 Speaker 2: bringing you the best in markets, economics, an gient politics. 704 00:34:15,080 --> 00:34:17,560 Speaker 2: You can watch the show live on Bloomberg TV weekday 705 00:34:17,600 --> 00:34:20,800 Speaker 2: mornings from six am to nine am Eastern. Subscribe to 706 00:34:20,880 --> 00:34:24,040 Speaker 2: the podcast on Apple, Spotify or anywhere else you listen, 707 00:34:24,360 --> 00:34:26,960 Speaker 2: and as always on the Bloomberg Terminal and the Bloomberg 708 00:34:27,000 --> 00:34:27,560 Speaker 2: Business app.