WEBVTT - Wall St. Expectations for 2020, Remembering David Stern 0:00:00.440 --> 0:00:02.960 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.040 --> 0:00:05.480 Jason Kelly. We're here every day bringing you the latest 0:00:05.519 --> 0:00:09.800 news from the world's of business and finance, plus technology, politics, economics, 0:00:09.840 --> 0:00:13.480 all harnessing the power of Bloomberg Business Week reporters and editors, 0:00:13.480 --> 0:00:16.759 not to mention our journalists and analysts more than a 0:00:16.800 --> 0:00:19.520 hundred and twenty countries. You can download Bloomberg Business Week 0:00:19.560 --> 0:00:22.439 on iTunes, SoundCloud, or Bloomberg dot com. You can also 0:00:22.480 --> 0:00:24.919 listen to our radio show weekdays at two pm Eastern 0:00:25.000 --> 0:00:33.599 only on Bloomberg Radio. So right, so let me make 0:00:34.520 --> 0:00:38.360 so far seems great, but maybe it's a different sort 0:00:38.400 --> 0:00:41.360 of year to come. That's at least the consensus that 0:00:41.400 --> 0:00:44.120 seems to be reached by a whole bunch of people 0:00:44.200 --> 0:00:46.640 on Wall Street. Let's break it down with Luke Kawa. 0:00:46.800 --> 0:00:49.640 He is cross set reporter for Bloomberg. Here with this 0:00:50.120 --> 0:00:54.080 in New York to talk about the most read story 0:00:54.120 --> 0:00:57.200 on the Bloomberg. Not surprisingly, it's comprehensive, Taylor. You can 0:00:57.200 --> 0:01:00.160 sort of lose yourself in this story if you if 0:01:00.160 --> 0:01:04.320 you want to, searching by key themes, asset classes, institutions, 0:01:04.360 --> 0:01:06.720 all of it. Luke great to have you with Taylor 0:01:06.760 --> 0:01:11.039 and myself, so give us the overview here. Uh, a 0:01:11.040 --> 0:01:13.800 lot of consensus. It feels like, Yeah, first of all, 0:01:13.800 --> 0:01:15.840 I'll have to give it up to Sam Potter, my 0:01:15.880 --> 0:01:18.800 colleague in London, who's actually the the gentleman who compiled this. 0:01:18.880 --> 0:01:21.640 Hopefully he's in bed by now. Uh, you know, hard 0:01:21.680 --> 0:01:25.760 worker up early. So uh, just to kind of set 0:01:25.760 --> 0:01:28.520 the stage here, it's it's amazing how similar a lot 0:01:28.560 --> 0:01:30.480 of the themes are. One thing, and this is what 0:01:30.760 --> 0:01:33.880 John Farroll this morning let off his show with cautious 0:01:33.880 --> 0:01:37.200 optimism is essentially the the order of the day. But 0:01:37.480 --> 0:01:40.040 the idea that you can't or it will be very 0:01:40.040 --> 0:01:43.880 difficult to repeat the kind of eye popping performance across 0:01:43.959 --> 0:01:47.119 major asset classes in twenty nineteen, whether to the same 0:01:47.600 --> 0:01:50.760 magnitude or the same breath. That's what Wall Street is 0:01:50.800 --> 0:01:54.000 casting a lot of doubt on. But the general outlook 0:01:54.000 --> 0:01:57.360 here is for stocks to go up in the US, 0:01:57.400 --> 0:01:59.800 probably more in the rest of the world. For credit, 0:02:00.120 --> 0:02:02.600 you know, you're more clipping coupons than getting the kind 0:02:02.600 --> 0:02:06.360 of huge spread rally combined with the big duration kicker 0:02:06.400 --> 0:02:09.320 you've got in some parts of the bond universe. Last year, 0:02:09.960 --> 0:02:13.240 another year, another year of calling for a softer dollar. 0:02:13.600 --> 0:02:16.520 So that's also in the cards. And the ten uere 0:02:16.600 --> 0:02:19.200 treasury yield after you know, a wild year in which 0:02:19.200 --> 0:02:23.720 it rallied quite magnificently. Uh the tenure bond, it's expected 0:02:23.760 --> 0:02:27.000 to be rather range bound, maybe edge up to to 0:02:27.160 --> 0:02:30.760 about two percent. But the treasury market and pick the 0:02:30.760 --> 0:02:34.040 tenure yield should not be making nearly as many headlines 0:02:34.080 --> 0:02:37.360 this year as it was last year. If Wall streets right, Luke, 0:02:37.680 --> 0:02:43.000 fascinating report, and I love how you have tied in equities, bonds, currencies, commodities, 0:02:43.040 --> 0:02:45.000 all the works. One thing that you ended on that 0:02:45.040 --> 0:02:49.160 caught my attention was calls for the tenure And I 0:02:49.200 --> 0:02:51.920 scrolled down through the report and we get to another 0:02:52.560 --> 0:02:55.800 thing that's talking about negative rates. And you know the 0:02:55.880 --> 0:03:00.400 story negative yielding debt shrunk relates not only eleven trilling dollars, 0:03:00.440 --> 0:03:03.400 it used to be seventeen trillion dollars. What are the 0:03:03.480 --> 0:03:07.240 expectations for negative rates, negative yielding debt as we've come 0:03:07.280 --> 0:03:10.359 off those highs a bit well, part of the kind 0:03:10.360 --> 0:03:13.720 of convergence trade that was in effect for you know, 0:03:13.760 --> 0:03:17.079 a bit or not too much, but enough of twenty nineteen, 0:03:17.120 --> 0:03:19.400 at least in the bond market kind of involved just 0:03:19.520 --> 0:03:21.680 what we were talking about from its peak of nearly 0:03:21.720 --> 0:03:24.160 what was its seventeen trillion or fifteen trillion somewhere in 0:03:24.160 --> 0:03:27.520 that neighborhood, that number getting a lot smaller as we 0:03:27.600 --> 0:03:30.359 approached your end, and with the ten year treasury expect 0:03:30.440 --> 0:03:33.800 to say, relatively sticky. Uh. The way convergence is expected 0:03:33.880 --> 0:03:36.480 happen is to drag more and more out of that debt, 0:03:36.520 --> 0:03:38.960 but maybe not too much, but more and more out 0:03:38.960 --> 0:03:42.720 of negative territory. And there's another story this morning out 0:03:42.760 --> 0:03:45.240 from one of my colleagues in London's talking about the 0:03:45.600 --> 0:03:47.840 amount of government that that's going to need to be 0:03:47.920 --> 0:03:51.440 rolled over this year. Not a crazy amount, but uh, 0:03:51.520 --> 0:03:54.360 you know, just the idea that the data this morning 0:03:54.360 --> 0:03:57.160 don't necessarily support it, especially in Europe, but just the 0:03:57.240 --> 0:04:00.880 idea that as the global economy does bottom out, convergence 0:04:00.880 --> 0:04:03.480 will mean more and more economies and more and more 0:04:03.520 --> 0:04:06.320 sovereign debt getting to a place where holding to maturity 0:04:06.320 --> 0:04:09.400 will actually yield do something positible and so Luke, when 0:04:09.480 --> 0:04:12.960 you look across all of this and think about the 0:04:13.200 --> 0:04:16.040 R word recession, it was something that if you go 0:04:16.120 --> 0:04:19.040 back a few months September, the drumbeat was getting a 0:04:19.120 --> 0:04:22.400 little bit louder. What's the consensus if there is any, 0:04:22.480 --> 0:04:26.039 about the potential for recession in so, yeah, if you 0:04:26.080 --> 0:04:28.640 had done this survey in August, you know, if we 0:04:28.680 --> 0:04:30.640 had the some kind of weird calendar, I bet you 0:04:30.680 --> 0:04:33.480 would have got a lot of different responses on that 0:04:33.560 --> 0:04:36.040 front right now, And you can see this all across 0:04:36.120 --> 0:04:38.640 you know, different bits of markets, whether they're looking at equities, 0:04:38.640 --> 0:04:41.760 whether you're looking at you know, the uh, the potential 0:04:41.760 --> 0:04:45.320 for options that pay out if there's deflation. We've really 0:04:45.400 --> 0:04:48.719 priced out the tail risk of recession and that's warranted. 0:04:48.800 --> 0:04:53.160 And uh, that's thoroughly, thoroughly expounded upon in this report. 0:04:53.160 --> 0:04:57.039 In everyone's base case, it's essentially growth will be better 0:04:57.120 --> 0:04:59.440 than it was in twenty nineteen, but not as good 0:04:59.480 --> 0:05:03.320 as it was in ten or eighteen. So just this 0:05:03.400 --> 0:05:05.760 idea that growth is slow. Growth will be in or 0:05:05.839 --> 0:05:09.640 around two percent, So not a recession, but not something 0:05:09.680 --> 0:05:13.320 to essentially way flags about. And then Luke tie in 0:05:14.000 --> 0:05:20.640 fiscal policy with monetary policy. What takes more center stage? Well, 0:05:21.160 --> 0:05:25.000 I uh, in general, as you see these these outlooks, 0:05:25.000 --> 0:05:28.440 both US election risk, which I think ties more into 0:05:28.440 --> 0:05:30.799 the fiscal policies EIDE or at least the fiscal outlook 0:05:30.800 --> 0:05:33.720 thing that's always if you if you go through these, 0:05:33.760 --> 0:05:38.120 it's at least a cursory mention in everyone's report. This 0:05:38.160 --> 0:05:41.000 is a year in which monetary policy is expected to, 0:05:41.160 --> 0:05:44.800 especially in developed markets, really go to the wayside. It's 0:05:44.839 --> 0:05:47.800 not supposed to be interesting to any respect. And in fact, 0:05:47.839 --> 0:05:50.039 if you look at the European Central Bank, it will 0:05:50.080 --> 0:05:54.200 be most noteworthy for what monetary policy makers are able 0:05:54.240 --> 0:05:57.599 to kind of convince their cajole fiscal policy makers into 0:05:57.640 --> 0:06:01.440 doing in the year head. However, there isn't necessarily a 0:06:01.480 --> 0:06:04.880 ton of optimism that that baton pass is really going 0:06:04.920 --> 0:06:07.919 to go off well so in terms of the stimulus 0:06:07.960 --> 0:06:11.640 or the impulse we're getting from easier monetary or fiscal policy, 0:06:11.680 --> 0:06:14.200 it's more the lagged defect. You know, said that monetary 0:06:14.240 --> 0:06:16.839 policy works with these long and variable lags. It's more 0:06:16.960 --> 0:06:19.800 that that's expected to continue to be helping out as 0:06:19.880 --> 0:06:22.480 we go through. All right, Luke, how we're gonna leave 0:06:22.480 --> 0:06:25.320 it there. Thank you so much. Cross Asset Reporter, part 0:06:25.320 --> 0:06:27.800 of a massive team that put together this most read 0:06:27.839 --> 0:06:30.520 story on the Bloomberg Today, and I do encourage you 0:06:30.560 --> 0:06:32.480 to go check it out because you can, as I said, 0:06:32.760 --> 0:06:35.800 sort of search by themes asset class institution and get 0:06:35.800 --> 0:06:38.640 a really holistic sense of how Wall Street is feeling 0:06:38.640 --> 0:06:40.839 about all the major issues as we head into what 0:06:41.040 --> 0:06:44.400 is bound to be a very interesting year. You're listening 0:06:44.440 --> 0:06:48.360 to Bloomberg Business Week with Carol Messer and Jason Kelly 0:06:48.480 --> 0:06:52.960 on Bloomberg Radio. The passing of David Stern, longtime commissioner 0:06:53.560 --> 0:06:59.359 of the NBA, has led to an unbelievable outpouring of grief, 0:06:59.440 --> 0:07:04.039 but all so some remembrances of really a truly remarkable 0:07:04.120 --> 0:07:06.960 life and an impact that you have had on the 0:07:06.960 --> 0:07:12.440 world of sports. Ebenovi Williams, Sports Business Reporter podcast host, Extraordinary, 0:07:12.520 --> 0:07:14.840 so many more things here at Bluemberg joins me in 0:07:14.840 --> 0:07:18.760 our Blueberg Interactive Broker Studio. I mean, what an amazing 0:07:18.760 --> 0:07:20.800 guy in a lot of ways. Yeah. We had David 0:07:20.840 --> 0:07:22.720 on the podcast a little bit less than a year 0:07:22.720 --> 0:07:25.200 ago actually, and he came on and I think we 0:07:25.280 --> 0:07:27.080 didn't have to say a single word, right, He just 0:07:27.440 --> 0:07:30.840 kind of rattled off stories Tim poo bouton when he 0:07:30.920 --> 0:07:33.800 landed and found you know, monks up there that we're 0:07:33.840 --> 0:07:37.000 watching League Pass. They were watching Kobe Bryant on their computers, 0:07:37.480 --> 0:07:39.560 which was one of the first times he realized that, hey, 0:07:40.160 --> 0:07:42.400 we have an international audience and we could be doing 0:07:42.440 --> 0:07:45.520 more to grow basketball overseas. I mean, he had an 0:07:45.560 --> 0:07:49.000 impact across the globe on the sports world for and 0:07:49.040 --> 0:07:51.440 I have to say one of the things that I 0:07:51.480 --> 0:07:54.720 had candidly forgotten about I did not realize he was 0:07:54.720 --> 0:07:58.320 the commissioner for thirty years. I mean, and and when 0:07:58.400 --> 0:08:00.760 you think about where the NBA was is in the 0:08:00.800 --> 0:08:04.280 mid eighties and where it is today, I cannot think 0:08:04.320 --> 0:08:09.120 of another business outside of like Apple that has, you know, 0:08:09.160 --> 0:08:12.760 sort of grown and influenced in the way that that leak. 0:08:13.000 --> 0:08:14.960 It's a great point. I mean when he took over 0:08:15.040 --> 0:08:18.640 in four I believe the NBA had just recently stopped 0:08:18.640 --> 0:08:20.880 having its finals on tape delay, right, so it wasn't 0:08:20.880 --> 0:08:23.680 even a TV product at all. There were twenty four teams. 0:08:23.680 --> 0:08:26.160 It was viewed largely as a circus. He kind of 0:08:26.160 --> 0:08:28.160 whipped the whole thing into shape, right, And one of 0:08:28.240 --> 0:08:32.120 his biggest initiatives when he was younger um fixing the 0:08:32.120 --> 0:08:35.120 the image of the game and the players right. I 0:08:35.120 --> 0:08:37.040 mean at a time, a lot of that's racial, but 0:08:37.120 --> 0:08:40.360 the NBA, it's players. It was not a commercial entity 0:08:40.480 --> 0:08:43.520 in any capacity, right, and he you know, at times 0:08:43.640 --> 0:08:46.240 drew hard lines that certainly the dress code that he 0:08:46.760 --> 0:08:48.640 that he put together is probably the most you know, 0:08:48.800 --> 0:08:51.319 visible part of this. But you know, he brought in 0:08:51.360 --> 0:08:54.959 a stricter drug testing. He imposed very harsh penalties for 0:08:55.520 --> 0:08:57.920 a player that noelt during the national anthem, or players 0:08:57.960 --> 0:09:00.320 that went into the stands to fight, or remember when 0:09:00.320 --> 0:09:03.360 the Charles spry Will choked his coach. He was a disciplinarian. 0:09:03.559 --> 0:09:06.719 But all of that served too, I think changed the 0:09:06.760 --> 0:09:10.160 way that America and especially corporate America interacted with the NBA. 0:09:10.200 --> 0:09:12.800 And that's the reason why this is a nine billion 0:09:12.840 --> 0:09:15.599 dollar enterprise now. And even I mean some of the 0:09:15.840 --> 0:09:19.319 statistics are stunning when you look at NBA revenue, bringing 0:09:19.360 --> 0:09:22.480 it from a hundred and eighteen million dollars to five 0:09:22.559 --> 0:09:26.959 and a half billion dollars inteen the year he retired. 0:09:27.360 --> 0:09:31.400 What did he to for the franchise, not only in 0:09:31.600 --> 0:09:35.640 terms of revenue, but geographic expansion and really making this 0:09:35.920 --> 0:09:39.679 a global sport. Yeah, so expansion across the US obviously, 0:09:39.800 --> 0:09:42.400 you know, happened, you know, pretty quickly under his under 0:09:42.440 --> 0:09:44.960 his tenure. But but globally, I think is the bigger 0:09:45.080 --> 0:09:47.199 thing there, right. You know, back in the eighties he 0:09:47.280 --> 0:09:50.480 cut the first NBA deal with CCTV. They were shipping 0:09:50.600 --> 0:09:54.200 VHS tapes overseas so that highlight packages could be cut 0:09:54.280 --> 0:09:56.760 and shown to the Chinese audience. You know, flash forward 0:09:56.800 --> 0:10:00.200 thirty years. The NBA has a billion dollar business in China, right, 0:10:00.240 --> 0:10:02.640 which was in the news this year for another reason. 0:10:02.800 --> 0:10:06.120 But the reason why the NBA is the is the 0:10:06.200 --> 0:10:10.000 most popular foreign league in China, possibly the most popular 0:10:10.040 --> 0:10:12.599 sport outside of soccer around the globe. A lot of 0:10:12.640 --> 0:10:14.520 that has to do with the fact that long before 0:10:14.800 --> 0:10:17.160 the NFL was saying, man, we have to have a 0:10:17.240 --> 0:10:20.319 presence overseas, the NBA was already doing the legwork to 0:10:20.400 --> 0:10:23.160 make it happen. Help us understand, And you alluded to 0:10:23.240 --> 0:10:26.800 this earlier, evan sort of the player empowerment piece of this, 0:10:27.000 --> 0:10:28.920 because what you have seen, and you and I have 0:10:28.960 --> 0:10:31.520 talked about this a lot over the last couple of years, 0:10:31.880 --> 0:10:37.120 this notion that NBA players have transcended in a way 0:10:37.320 --> 0:10:44.280 that certainly other major sport athletes aren't anymore. Or never were. 0:10:45.240 --> 0:10:47.040 Did he play a role in that for sure? And 0:10:47.160 --> 0:10:49.360 and it was kind of a confluence of multiple things, right, 0:10:49.400 --> 0:10:51.880 he had the benefit of very early in his commissioner 0:10:51.920 --> 0:10:53.760 had to have a guy in Michael Jordan's end of 0:10:53.760 --> 0:10:56.800 the league, right, who totally changed the way that athletes 0:10:57.240 --> 0:11:01.320 merge as as businessmen when they're not playing ing. But yes, 0:11:01.440 --> 0:11:03.360 you know, part of his you know, shaping up the 0:11:03.400 --> 0:11:06.040 image of the league was also helping push a lot 0:11:06.120 --> 0:11:09.640 of these players outward right to to corporate America. Uh. 0:11:09.679 --> 0:11:11.960 And then flash forward to that now and you're right. 0:11:12.040 --> 0:11:14.000 You know, if you look across the four major leagues, 0:11:14.200 --> 0:11:17.439 there's no question that NBA players are more famous on 0:11:17.600 --> 0:11:20.719 average then then their counterparts in other leagues. Part of 0:11:20.800 --> 0:11:22.120 that has to do with the fact that they don't 0:11:22.160 --> 0:11:23.920 wear helmets and they you know, they walked down the 0:11:23.920 --> 0:11:26.400 street and you go, oh, I know that that's Chris Bosh, 0:11:26.480 --> 0:11:29.679 that's Lebron James um. But yeah, a large part of 0:11:29.720 --> 0:11:31.160 that has to do with the fact that that from 0:11:31.200 --> 0:11:33.760 the top down, uh, it was it was a priority 0:11:33.880 --> 0:11:35.760 for the NBA, and that's smart business, right. I think 0:11:35.800 --> 0:11:38.559 he realized very early on that that another way to 0:11:38.720 --> 0:11:42.760 grow the popularity of basketball was to do it on 0:11:42.840 --> 0:11:45.839 the backs of the players and not necessarily just the 0:11:45.960 --> 0:11:47.839 brand of the New York Knicks or the brand of 0:11:47.880 --> 0:11:50.000 the Washington Wizards. It was interesting to note too, and 0:11:50.040 --> 0:11:52.360 a lot of these tributes, many of which were on Twitter. 0:11:52.760 --> 0:11:54.760 You know, you look at what Magic Johnson said, you 0:11:54.800 --> 0:11:56.880 look at what Lebron James said, you looked at what 0:11:57.040 --> 0:12:00.719 Michael Jordan's said. They were very personal tributes in a 0:12:00.800 --> 0:12:03.839 lot of ways, and sort of pointing out how David 0:12:03.880 --> 0:12:06.800 Stern was a part of these sort of seminal moments, 0:12:06.840 --> 0:12:08.959 not just in their careers but in their lives. You 0:12:09.120 --> 0:12:12.040 think about what Stern did for Magic Johnson when he 0:12:12.480 --> 0:12:15.079 came out and said he was HIV positive, Like really 0:12:15.880 --> 0:12:18.439 a guy who was just in the center of so much. 0:12:18.480 --> 0:12:21.760 Evanovi Williams, thank you so much. Sports business reporter for Bloomberg, 0:12:21.800 --> 0:12:24.880 also co host of the Bloomberg Business of Sports podcast 0:12:25.440 --> 0:12:28.560 with Michael Barr and Scott Sashnik. Check that out wherever 0:12:28.679 --> 0:12:30.400 you get your podcasts, and you know, when you're not 0:12:30.520 --> 0:12:32.640 listening to Bloomberg Business Week, it's a pretty good one, 0:12:38.000 --> 0:12:42.319 all right. So as we get you set for it's underway. 0:12:42.360 --> 0:12:46.280 The first trading day. Here we go, folks. Let's understand, 0:12:46.840 --> 0:12:50.079 and we started this conversation earlier in the hour with 0:12:50.200 --> 0:12:52.719 our own Luke Kawa. We're going to continue it with 0:12:52.800 --> 0:12:56.800 Brett Ewing, his chief market strategist for First Franklin Financial Services, 0:12:56.880 --> 0:13:00.360 joining us on the phone from Tallahassee at Florida. Great 0:13:00.400 --> 0:13:03.280 to have you back with us. Thank you, Jays. All right, 0:13:03.480 --> 0:13:05.840 So t this up. T this year up for us 0:13:05.920 --> 0:13:10.840 because twenty nineteen, unexpectedly in some ways, was, to use 0:13:10.880 --> 0:13:13.120 the technical term, a heck of a year. Everybody felt 0:13:13.160 --> 0:13:16.199 great about it. Uh, no huge surprises other than a 0:13:16.280 --> 0:13:20.000 couple blips, at least from an equity perspective. How does 0:13:20.880 --> 0:13:26.280 look in comparison from your vantage point? I'm optimistic on 0:13:27.600 --> 0:13:31.679 and I feel that it should be again a pretty 0:13:31.720 --> 0:13:39.000 good year for equities. UM. My theme for is basically 0:13:39.080 --> 0:13:42.520 as surprises. Surprises are going to be across the board 0:13:42.559 --> 0:13:45.960 again on on, and they will be on the upside 0:13:47.000 --> 0:13:50.360 when we take a look at earnings, which Jason and 0:13:50.480 --> 0:13:53.280 I have been talking about in the last hour, eagerly 0:13:53.440 --> 0:13:56.680 awaiting earnings numbers to start trickling out in the next 0:13:56.760 --> 0:14:00.360 few weeks or so. What sectors do you really, because 0:14:00.400 --> 0:14:05.360 we sort of focus back on fundamentals. Yeah. Um, with 0:14:05.760 --> 0:14:10.040 with sectors for uh, you know, we like the energy 0:14:10.240 --> 0:14:17.520 materials technology, um on the healthcare medical devices specifically, and 0:14:17.679 --> 0:14:23.440 I also like industrials and so would you think about 0:14:23.680 --> 0:14:28.720 those areas? What are the big risk means? The political 0:14:28.880 --> 0:14:31.640 risk seems to be something that plays through just about 0:14:31.760 --> 0:14:37.120 everybody's uh both both best in worst cases. How do 0:14:37.200 --> 0:14:40.800 you figure it in? Yeah? So the things that I'm 0:14:40.880 --> 0:14:44.440 looking at are the two primary concerns I have right here. 0:14:45.160 --> 0:14:50.040 Our trade war escalation? Is that going to diminish? And 0:14:50.160 --> 0:14:53.200 I'm going to take the stance that I believe that 0:14:53.480 --> 0:14:59.640 the escalation is on a path to uh dissipate. And 0:15:00.160 --> 0:15:03.440 I also believe the Federal Reserve and central bankers around 0:15:03.480 --> 0:15:06.160 the globe or on the right path and stepping to 0:15:06.280 --> 0:15:11.800 the side, and uh they're being accommodative as needed. And 0:15:12.000 --> 0:15:15.080 so do you buy the idea Brett that like central 0:15:15.120 --> 0:15:18.680 banks become sort of the non story of and if 0:15:18.760 --> 0:15:21.000 that's the case, and Taylor brought this up earlier in 0:15:21.040 --> 0:15:23.480 the show as well, do we focus more on sort 0:15:23.520 --> 0:15:29.000 of the fiscal rather than the monetary side. Well, I 0:15:29.040 --> 0:15:32.640 would like to think that central bankers could stay out 0:15:32.960 --> 0:15:37.560 of the limelight. Um. It's it's that's that doesn't often 0:15:37.680 --> 0:15:42.240 happen um, And I think that there could be a chance. 0:15:42.320 --> 0:15:44.400 It's with good intentions that they want to stay on 0:15:44.480 --> 0:15:47.920 the sideline, but there there could be some some real 0:15:48.040 --> 0:15:54.000 wage growth here in and wage inflation could maybe push 0:15:54.080 --> 0:15:56.520 up some of the numbers going into the second half 0:15:56.560 --> 0:15:58.400 of the year that I think the FED will be 0:15:58.680 --> 0:16:01.600 taking a look at. Brett. I really like some of 0:16:01.680 --> 0:16:04.680 your calls that we've been talking about. You like industrials, 0:16:04.720 --> 0:16:07.960 You're really looking at materials of having a good start 0:16:08.040 --> 0:16:12.160 to commodities start to show some life. I was joking 0:16:12.200 --> 0:16:15.040 with Jason, I just did a crash course in commodities 0:16:15.080 --> 0:16:18.280 as I was inchoring a commodity show earlier today. And 0:16:18.440 --> 0:16:20.960 talk to me about what commodities you really like, because 0:16:21.000 --> 0:16:23.560 I hear calls for gold set to go to sixteen 0:16:23.640 --> 0:16:27.160 hundred nuns and yet copper really showing signs of rebounding 0:16:27.240 --> 0:16:30.240 to those two one being a safe haven, one being 0:16:30.480 --> 0:16:34.720 a really um uh sort of way to measure economic 0:16:34.800 --> 0:16:38.760 growth normally wouldn't coincide together. What do you like about 0:16:38.800 --> 0:16:44.440 the commodities, Well, I like the fact that they are 0:16:44.480 --> 0:16:47.400 a good indicator, And what they're telling me is that 0:16:47.560 --> 0:16:50.400 there's life in the global economy that's not really being 0:16:50.480 --> 0:16:55.760 priced in, and those commodities are historically a pretty good 0:16:55.840 --> 0:16:59.560 leading indicator that more positive days are coming for the 0:16:59.600 --> 0:17:02.760 global economy. And when you wrap that up with what 0:17:02.880 --> 0:17:06.440 I said about the central bankers and also about some 0:17:06.560 --> 0:17:11.520 of the trade positive movement in the trade wars going on, 0:17:12.000 --> 0:17:16.280 then I feel that that the commodity market is actually 0:17:16.840 --> 0:17:19.879 pointing that out, that it's giving us a sense of 0:17:20.040 --> 0:17:23.439 solitude that that is gonna play out. Well, what's your 0:17:23.440 --> 0:17:26.200 biggest worry? What what do you worry most about? And 0:17:26.320 --> 0:17:28.400 as you talk to your clients, what are they most 0:17:28.440 --> 0:17:32.600 worried about? As we get into you know, I would 0:17:32.640 --> 0:17:36.800 love to see productivity start going back up. It's been 0:17:37.320 --> 0:17:41.560 uh tapering off here recently, and you need productivity with 0:17:41.640 --> 0:17:46.159 the labor market this tight to keep inflation from rearing 0:17:46.240 --> 0:17:50.480 its head unexpectedly. And so what I would like to 0:17:50.560 --> 0:17:54.960 see is productivity pick back up. I worry about inflation 0:17:55.480 --> 0:18:00.480 coming into the picture. I know that people have said 0:18:00.520 --> 0:18:02.920 there would be inflation for the last ten years and 0:18:03.119 --> 0:18:05.440 it just never shows up. But where we are in 0:18:05.520 --> 0:18:08.439 this labor market. If you look at the the wage 0:18:08.480 --> 0:18:12.600 growth that we finally receive starting in I think that 0:18:12.720 --> 0:18:17.720 accelerates in with this tight labor market, and um, I 0:18:17.840 --> 0:18:20.320 really think that that could surprise people in the second 0:18:20.359 --> 0:18:23.200 half of the year. So there's my concern. Yeah, I 0:18:23.320 --> 0:18:26.639 want to go international for a bed. You're really liking 0:18:26.840 --> 0:18:29.879 e M debt? Here do I go dollar denominated or 0:18:29.960 --> 0:18:33.560 local currency? Well, I think, uh, you know, a lot 0:18:33.640 --> 0:18:37.040 of your viewers out there potentially could play that through 0:18:38.000 --> 0:18:41.320 uh E M debt, mutual fund or et F probably 0:18:41.400 --> 0:18:45.560 dollar denominated, but you know, we're liking that in the space. 0:18:45.640 --> 0:18:49.920 If you compare that to maybe corporate credit and how 0:18:50.080 --> 0:18:54.359 crowded those spreads are versus something in the emerging markets, 0:18:54.440 --> 0:18:56.560 I think there's better value there and a little bit 0:18:56.640 --> 0:19:00.359 more upside, and I think that's what's important for twenty twenty. 0:19:00.920 --> 0:19:02.720 All right, Brett, you Wing, Thank you so much, Chief 0:19:02.760 --> 0:19:06.119 Market Strategies for First Franklin Financial Services. Johnny is on 0:19:06.160 --> 0:19:17.879 the phone from Tallahassee, Florida. Alright, a showdown is certainly 0:19:18.000 --> 0:19:20.760 what it is turning out to be so far. We'll 0:19:20.800 --> 0:19:23.240 see where it goes next. Let's get into it with 0:19:23.400 --> 0:19:26.040 Eric Watson, and he is Congressional reporter for Bloomberg. Joining 0:19:26.119 --> 0:19:30.760 us from our ninety nine one studio in the nation's capital. Eric, 0:19:30.840 --> 0:19:34.440 Happy New Year, New year to you. So what is 0:19:34.480 --> 0:19:36.920 the state of play here? Because I feel like some 0:19:37.080 --> 0:19:39.399 of us went away for the holidays knowing that there 0:19:39.480 --> 0:19:41.639 was a bit of a stalemate, but it seems to 0:19:41.760 --> 0:19:44.199 only be getting amped up in a way. Give us 0:19:44.240 --> 0:19:47.920 the latest. Well, you know, Congress left town one December 0:19:48.080 --> 0:19:50.720 and there really haven't been any talks since that time 0:19:51.200 --> 0:19:53.440 on sort of figuring out how the Senate will proceed 0:19:53.520 --> 0:19:56.840 with this impeachment tile of President Trump. Nancy Pelosi is 0:19:56.920 --> 0:19:59.520 sort of at the last minute decided to withhold sending 0:19:59.600 --> 0:20:03.119 the Act documents and withhold naming the managers as the 0:20:03.200 --> 0:20:05.000 House prosecutors that will appear in the well of the 0:20:05.080 --> 0:20:08.200 Senate to present the case until she gets more assurances. 0:20:08.240 --> 0:20:10.560 This isn't what she said would be a sham procedure. 0:20:10.920 --> 0:20:13.879 This is sort of a way of Democrats of spotlighting, 0:20:13.920 --> 0:20:16.119 which McConnell, who has said that he's not going to 0:20:16.200 --> 0:20:18.000 be impartial and that he's going to coordinate with the 0:20:18.040 --> 0:20:21.040 White House. But as far as I was able to 0:20:21.160 --> 0:20:23.640 report out that This is a risky strategy for Pelosi. 0:20:23.920 --> 0:20:25.800 She can do this for perhaps a week or two, 0:20:26.240 --> 0:20:29.680 highlight that the Senate is moving along on a track 0:20:29.760 --> 0:20:32.000 not to have any witnesses or fresh documents, but at 0:20:32.040 --> 0:20:35.720 that after that point that his dimission returns and five 0:20:35.840 --> 0:20:39.040 of the Democratic senators are in fact running for president, 0:20:39.119 --> 0:20:41.720 and during any impeachment trial that drags into February, they 0:20:41.760 --> 0:20:44.960 will be stuck their silent jurors and be unable to campaign, 0:20:45.080 --> 0:20:47.320 so that it really can't last that much longer, at 0:20:47.400 --> 0:20:49.640 least in the minds of most people I talked to. Yeah, 0:20:49.720 --> 0:20:52.240 and very very good point about Nancy Pelosi, because we 0:20:52.280 --> 0:20:54.200 all felt like she sort of was even pressured to 0:20:54.240 --> 0:20:57.280 begin this impeachment stuff to begin with. She had even stated, 0:20:57.400 --> 0:21:00.399 I believe earlier that she you know, probably wasn't a 0:21:00.440 --> 0:21:03.680 good strategy for the Democrats, and then, you know, under pressure, 0:21:03.760 --> 0:21:07.359 she went ahead with it. What is the outlook for 0:21:07.680 --> 0:21:10.280 her then, in terms of you can't drag this out 0:21:10.680 --> 0:21:14.200 more than a few weeks, Well, you know, House Democrats 0:21:14.520 --> 0:21:16.479 came to the conclusion that included any of the moderates 0:21:16.520 --> 0:21:18.919 in the swing districts, that they had to basically impeach 0:21:18.960 --> 0:21:21.320 President Trump, but they felt there was enough evidence and 0:21:21.359 --> 0:21:24.360 that there's no way they could not do it. Politically though, 0:21:24.400 --> 0:21:26.320 I think Pelosi has her sort of finger on the 0:21:26.359 --> 0:21:28.560 pulse and and and it has proof right in many ways, 0:21:28.640 --> 0:21:31.960 Presidents Trump's approval rating has knock gone down, his core 0:21:32.359 --> 0:21:34.800 base of support has remained with him, and we don't 0:21:34.800 --> 0:21:38.560 really see senators who would be needed to defect in 0:21:38.680 --> 0:21:41.320 order to convict him really moving to do that. We 0:21:41.359 --> 0:21:44.520 saw some like criticism from Susan Collins, a vulnerable moderate 0:21:44.960 --> 0:21:48.040 main senator who's up for reelection, criticizing McConnell for saying 0:21:48.080 --> 0:21:51.160 he wouldn't be impartial, but she didn't really buck his strategy, 0:21:51.280 --> 0:21:55.440 which is to basically start the trial with presentations and 0:21:55.600 --> 0:21:59.320 maybe talk about witnesses later. And so where does Chuck 0:21:59.359 --> 0:22:02.119 Schumer fit in to to all of this because obviously 0:22:02.119 --> 0:22:05.280 a very well known name, certainly to our crowd here 0:22:05.960 --> 0:22:08.960 Bloomberg listeners, especially in New York City, but also beyond 0:22:09.119 --> 0:22:13.800 well known for his ties to Wall Street. Uh, what 0:22:14.480 --> 0:22:17.040 how much power does he have here? Because the dynamic 0:22:17.119 --> 0:22:19.520 in in the Senate is a little bit different, right, Well, 0:22:19.600 --> 0:22:21.639