Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Single best idea on an odd Monday. There's no other
Speaker 2: way to put it. Odd for the newsflow, odd, for
Speaker 2: the immediacy of the newsflow, which is through the weekend
Speaker 2: news and then overnight Tokyo opening, the Asian markets news,
Speaker 2: Taiwan dollar explodes in strength and beyond much more than that,
Speaker 2: just other news. So it's such a clumsy, clumsy Monday.
Speaker 2: We demanded clarity. Thank you, Dana Telsey. Really appreciate her
Speaker 2: coming in in the state of retail in America, very
Speaker 2: very informative and fluid and uncertain is the future for
Speaker 2: retail America. Ian Lingoln was in with our question our
Speaker 2: Global Wall Street Interview of the Day. Ian lingn here
Speaker 2: on the bar market, he looks for the ten year
Speaker 2: yield out there to move from the four point three
Speaker 2: zero level down to three point six percent. Let's listen.
Speaker 1: I do think tariffs complicate the calculus for lower rates,
Speaker 1: but I do think that the Fed is ultimately going
Speaker 1: to start the process of normalization again, but not until
Speaker 1: we've got greater clarity on what the trade war really means.
Speaker 1: And I do think tenure yields in this year at
Speaker 1: three sixty five. Implicitly, because the President keeps changing the
Speaker 1: rules or changing the trade dynamics, it's very difficult to
Speaker 1: estimate what this all means for core PCE and therefore
Speaker 1: the FED and the trajectory of the economy. I think
Speaker 1: the one clear takeaway is that there has been a
Speaker 1: concern raised about the dollars status as a reserve currency
Speaker 1: and whether treasuries are still flight to quality assets, and
Speaker 1: the recent price action suggests that those two still hold
Speaker 1: for the time being. But that's going to be the
Speaker 1: major question for the next several months.
Speaker 2: Ian Lincoln with us there from BMO Capital Market. Sometimes
Speaker 2: news comes out you expect it, you've been waiting for it.
Speaker 2: That's the case with an Apple debt offering. I've been
Speaker 2: waiting for it about nine months, two years since they
Speaker 2: did their last offering. It's a triage of four if
Speaker 2: this taping, unknown what those levels will be, and I'm
Speaker 2: sure it'll be price up, yield lower, and very near
Speaker 2: a treasury yield. We are so advantaged at Bloomberg Intelligence
Speaker 2: to have Robert Shiftman with us and his team looking
Speaker 2: at corporate at paper he published immediately on the known
Speaker 2: and the unknown of the Apple transaction here, Robert Shiftman
Speaker 2: of Bloomberg Intelligence.
Speaker 3: It sort of goes back to my early days at
Speaker 3: math Camp. Their weighted average cost of capital is dominated
Speaker 3: by their cost of equity, which is about nine and
Speaker 3: a quarter percent, and their weighted average cost of debt
Speaker 3: is effectively zero. When you have a three trillion dollar
Speaker 3: equity market cap, that the cost of debt is nothing,
Speaker 3: and that's why they keep one hundred billion dollars of
Speaker 3: debt on the book. So it makes math sense to
Speaker 3: borrow money and buy back more shares or give it
Speaker 3: away and dividends, and that's what they do. The real
Speaker 3: issue with Apple is they have a problem, and their
Speaker 3: problem is they make too much money. They have one
Speaker 3: hundred billion dollars of annual free cash flow, so it
Speaker 3: keeps flowing in. So what do they eventually do with it? Well,
Speaker 3: they give it away, But you know, you borrow a
Speaker 3: little bit at a time, and for Apple, that's five
Speaker 3: or ten billion dollar chunks.
Speaker 2: Robert Schiffman on short notice there and the Apple transaction.
Speaker 2: Look to our Bloomberg Intelligence team and also to Bloomberg
Speaker 2: News for the publication of that transaction, always anticipated on
Speaker 2: Wall Street. Thank you for your listening on commute. Particular
Speaker 2: thank you to those in serious XEM Channel one twenty
Speaker 2: one greatly appreciate that. On YouTube, building every day subscribe
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Speaker 2: on YouTube podcasts, this is single best idea.