Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.
Speaker 1: My name is Mike Reagan. I'm a senior editor at
Speaker 1: Bloomberg and humble Down a higher across asset reporter with
Speaker 1: Bloomberg at This week on the show, well, Wall Street
Speaker 1: has become obsessed with trying to figure out whether the
Speaker 1: US economy will fall into a recession or whether it's
Speaker 1: already in one. Certain economic data points have weakened, Inflation
Speaker 1: remains sky high, so is a recession inevitable? And how
Speaker 1: much have the markets already discounted a potential recession. We'll
Speaker 1: get into it with a senior markets analyst in London,
Speaker 1: but first, Viltani, you need to catch me up. I've
Speaker 1: been off all week until Thursday. What did I miss?
Speaker 1: As they say, well, all of the new Bloomberg interns started,
Speaker 1: and uh I added a bunch of them on LinkedIn
Speaker 1: or they added me and I accepted. You did you
Speaker 1: disrubbing in there? We already have the interns all in
Speaker 1: your professional network. Yeah, they're not even professionals yet, they're
Speaker 1: just interns and they're and you allow them in your
Speaker 1: professional network. I did. Yeah, I'm getting along with them
Speaker 1: really really well. So we're LinkedIn friends. Welcome to all
Speaker 1: the Bloomberg interns and uh, I'm happy to have you
Speaker 1: in my network. Wow, that's amazing for listeners who haven't
Speaker 1: been paying attention to a kind of refuses to allow
Speaker 1: me into her professional network on LinkedIn. Yet all the
Speaker 1: interns are admitted right away. Yeah, they just started I
Speaker 1: think like three or four days ago. So if I
Speaker 1: were to go back and restart as an intern, would
Speaker 1: you would you let me in? I think so? Yeah,
Speaker 1: it depends. It depends like would we be working together?
Speaker 1: What kind of work would you be producing? But yeah,
Speaker 1: I think so. Now it's it's too late for you
Speaker 1: to that's I'm too old to be an intern. That
Speaker 1: that's the bottom line. I guess do you know who
Speaker 1: else is in my on my LinkedIn network? I bet
Speaker 1: our this week's guest. Yeah, this week with this week's
Speaker 1: guest is also part of my LinkedIn network. I want
Speaker 1: to welcome Fiona Sencoda. She's the senior financial markets analyst
Speaker 1: at City Index. Welcome Fiona, Hey, how're they going? Welcome
Speaker 1: to the show, Fyota, and welcome to vil Donna's professional network.
Speaker 1: It's a very exclusive club, clearly. Uh oh yes, only
Speaker 1: some people being excluded. But I wanted to start UM
Speaker 1: by asking you a little bit about Cindy City Index itself.
Speaker 1: I mean, we definitely want to get your take on
Speaker 1: the on the market outlook and everything. But for US
Speaker 1: listeners who aren't uh familiar with City Index, UM, I'm
Speaker 1: kind of fascinating because you you offer some types of
Speaker 1: trading that UM, I think many of our U S
Speaker 1: listeners are not familiar with, such as spread betting and
Speaker 1: CFD trading. Could you just explain to people who aren't
Speaker 1: familiar with that type of trading what it is and
Speaker 1: how City Index is involved. Yeah, of course, So I
Speaker 1: mean DFD trading and spread trading. They are trading derivatives,
Speaker 1: and the idea is that they're traded on margins. So basically,
Speaker 1: what that means is that when you're taking out a position,
Speaker 1: you don't actually own the position. You're actually making or
Speaker 1: taking an opinion on where you think the price movement
Speaker 1: is going. So you're not owning it like you would
Speaker 1: a stopper a share. If you're going to actually buy
Speaker 1: stocks and shares, you're actually making or losing money on
Speaker 1: the price movement. And so what that means is that
Speaker 1: you can actually short the market just as easily as
Speaker 1: you can go along the market, which is brilliant in
Speaker 1: times of high volatility when you need to get some
Speaker 1: heading strategies going. And also for example, in bear market
Speaker 1: whatever being an industry can become really I mean, there
Speaker 1: are a couple of things to watch out for it.
Speaker 1: I said, it's traded on margins. So what that means
Speaker 1: there is you're actually just putting forward a deposit. You
Speaker 1: don't need to put forward the whole value of the
Speaker 1: trade that you're taking out. Now, that could be very
Speaker 1: advantageous in the sense that you only need to put
Speaker 1: forward like a percentage of the value of your trade,
Speaker 1: but you make losses or gains as if it was
Speaker 1: the full position tide. Brilliant when it goes in your favor,
Speaker 1: not so good when it goes against you. You've got
Speaker 1: to be really hot on your risk management. You've got
Speaker 1: to keep these ideas, you know, stop losses and and
Speaker 1: and sort of really have a good strategy when you're
Speaker 1: trading the market. You can't just sort of leave it
Speaker 1: with the hope that things might turn around, because that
Speaker 1: could get a little bit hairy, right right. I bet
Speaker 1: some of our more active US traders are very jealous
Speaker 1: that that of this type of trading that they can't
Speaker 1: do in the US, But who knows, maybe someday they'll
Speaker 1: all our Um. But are you are the clients a
Speaker 1: sort of a mix of retail and hedge funds and
Speaker 1: whatnot or or what who exactly is uh you know
Speaker 1: the client piece? Yea completely, We have an absolute mix,
Speaker 1: so you know we can go from We do have newbies,
Speaker 1: complete newbies who have never traded before and they're just
Speaker 1: sort of looking to get involved because obviously you can't
Speaker 1: take very small position sizes as well, which is good
Speaker 1: if you're just you know, testing it out and wants
Speaker 1: to see how it all works. Um. And then we
Speaker 1: go all the way out. We scouted all the way through,
Speaker 1: so we've got some big clients in there as well. UM.
Speaker 1: So I mean, you know, different news is people using
Speaker 1: for different and different institutions have different uses for what
Speaker 1: we offer. Um. But yeah, we we we cover the
Speaker 1: complete range professional clients as well as as we tell
Speaker 1: it just so our listeners are aware and is aware.
Speaker 1: And I actually hung out in London when when I
Speaker 1: was there a couple of weeks ago, and we arranged
Speaker 1: the podcast appearance, but I wanted to ask you to
Speaker 1: gauge the mood over there and what it's what it's
Speaker 1: actually like. We have the war in Ukraine, we have
Speaker 1: high inflation in the UK and across the Eurozone. Plus
Speaker 1: we had Germany this week warning of this contagion from
Speaker 1: Russian gas cuts. So I wanted to ask you to
Speaker 1: sort of tell us what it's like, what the mood
Speaker 1: has been like. Yes, I mean it was great catching
Speaker 1: up with you. That was so lovely and putting a
Speaker 1: pace through a name and a chap so that was
Speaker 1: really good fun. But yeah, you know, we're really noticing
Speaker 1: these price rises and I'm sure this is something that
Speaker 1: that's really being noticed across the across the social social
Speaker 1: sectors in the UK at the moment. Are those price
Speaker 1: rises that we've been coming through. Um, you know, inflation
Speaker 1: is really quite high here. It's coming at nine percent,
Speaker 1: it's expected to spring to double digits, were expecting eleven
Speaker 1: in the coming months. Um, And so it's really being
Speaker 1: felt because it's broad based as well food. We have
Speaker 1: a lot of important energies that energy bills are just
Speaker 1: going through the real um that's really proving to be
Speaker 1: quite a struggle, um for a lot of people, and
Speaker 1: it's putting in this we've got this cost of living crisis,
Speaker 1: UM and we're seeing that there's a lot of strikes
Speaker 1: now where where we've got unions wanting their payers to
Speaker 1: have more money. We're just in the middle of this
Speaker 1: huge train strike in in the UK at the moment,
Speaker 1: and so yeah, you know, most of us are working
Speaker 1: from home this week just because it's gonna be impossible
Speaker 1: to get into the office. But this is just one union.
Speaker 1: You know, We've got other unions and workers that are
Speaker 1: planning on more strikes because they want higher wages to
Speaker 1: be able to afford and to be able to copen
Speaker 1: this cost of living crisis. But obviously that's just spiraling
Speaker 1: into this this inflation spiral and helping everything go up more. So,
Speaker 1: you know, it's a very very difficult place we are
Speaker 1: at the moment. We're expecting it a really tough summer
Speaker 1: as far as walkouts, the concerned, as far as rising
Speaker 1: prices they concerned, and for inflation just keep on going home.
Speaker 1: You know, fid I wanted to ask you about that
Speaker 1: because you know, obviously in the US, um UH President
Speaker 1: Biden has gotten a lot of political heat over the
Speaker 1: inflation issue in the US. It doesn't seem correct me
Speaker 1: if I'm wrong. It doesn't seem that maybe Boris john
Speaker 1: Johnson is getting as much criticism and blame for inflation.
Speaker 1: Maybe I'm wrong about that. I feel like people are
Speaker 1: still fixated on the parties he had during COVID. I
Speaker 1: was gonna say, but they're not done with that scandal yet.
Speaker 1: They'll maybe they'll get get to inflation, but it's is
Speaker 1: inflation sort of you know, a political risk across the spectrum.
Speaker 1: Do you think in Europe to to the leaders and
Speaker 1: the leadership parties um because of you know, people expecting
Speaker 1: the government to be able to do something about it.
Speaker 1: How are politics sort of factoring into your your thoughts
Speaker 1: on the markets and what inflation is doing to uh
Speaker 1: things like the labor issue you've discussed. You know that
Speaker 1: there isn't as much yet, I say, of a blame
Speaker 1: game going on as part as Boris Johnson's concerned. As
Speaker 1: he said, you know, we're just all getting over the
Speaker 1: fact that he was over the partying during lockdown. So
Speaker 1: we're just just trying to get a head around that.
Speaker 1: We've had the Queen's do believe there's been quite a
Speaker 1: lot of other things to folks do, but I think
Speaker 1: that's starting to change. We've had some by elections where
Speaker 1: he has not been doing so well. We've seen in
Speaker 1: France as well, Macron's having problems getting a majority in parliament.
Speaker 1: So you know, I think there is this sort of
Speaker 1: it's deeping in there, that there is this sort of
Speaker 1: blame towards the politicians coming in. We just seem at
Speaker 1: the moment, I feel there have been a lot more
Speaker 1: blame thrown towards Andrew Bailey, who has been sort of
Speaker 1: out defending himself quite vigorously recently, you know, over inflation
Speaker 1: and why it suddenly got so out of control and
Speaker 1: why the Bank of England hadn't done anything before. And
Speaker 1: then we've also got Richie snack O Finance, uh, Chance
Speaker 1: of the Exchequer, who has also been sort of drawn
Speaker 1: into this as to what what he's doing where, how
Speaker 1: they're going to help out, how they're going to help
Speaker 1: this for a family, um, so that there is sort
Speaker 1: of a bit of a blame game going on. It's
Speaker 1: not really I think heated up properly yet, but I
Speaker 1: think it will over the summer, as we have more
Speaker 1: strikes and more people struggle to get to work because
Speaker 1: more people can't afford what they want to be able
Speaker 1: to board. That's when we're really going to start to
Speaker 1: see sort of the politicians come under a lot of heat.
Speaker 1: And I know, Fiona, you also focus on the U
Speaker 1: S economy and US markets. We heard from Powell this
Speaker 1: week where he sort of came really close to admitting
Speaker 1: that the FED might not be able to engineer the
Speaker 1: soft dish lenning that everybody's been hoping for it, and
Speaker 1: wanted to ask you what you make of that and
Speaker 1: what you're outlook is in in terms of a recession
Speaker 1: in the US. Yes, so, I mean it was almost
Speaker 1: the first sort of like official acknowledgement that there could
Speaker 1: be a recession in the U earth bright and I
Speaker 1: think that was also the market actually behaved quite interestingly
Speaker 1: in response to that, because we saw the equities actually
Speaker 1: pick up off the session lowse They didn't close higher,
Speaker 1: but they did try to. But we've seen them pushed
Speaker 1: higher today. But this question on is there going to
Speaker 1: be a recession in the US is one that sort
Speaker 1: of really dominating the market this week. When you knows
Speaker 1: as investors to sort of tussle with that idea of
Speaker 1: more huge great heights from the Fed basis points potentially
Speaker 1: in July and another fifty basis points in September. So yeah,
Speaker 1: that that focus of is there going to be a
Speaker 1: recession in the US, and I think the answer is
Speaker 1: still unclear. I think the chances of a recession happening
Speaker 1: in the US are much more likely now than they
Speaker 1: have been for for a very long time. It's not
Speaker 1: as clear cut in the US. That is in Europe.
Speaker 1: I think in Europe it's almost going to be impossible
Speaker 1: for US to have your recession over this side. Um,
Speaker 1: But I think in the US there is still I think,
Speaker 1: and a soft landing is optimistic, we'll put it that way.
Speaker 1: So that puts my expectations of a recession probably morving
Speaker 1: moving over sort of over fifty chance at the moment.
Speaker 1: But there are a couple of things that the US
Speaker 1: economy really does have in its favor, and I think
Speaker 1: that's the leeway in the jobs market. You know, you've
Speaker 1: got such a strong jobs market right now, which is
Speaker 1: obviously does have its down for and the sense that
Speaker 1: it's sort of keeping wages elevated but that does mean
Speaker 1: that there's a lot of leeway, um, you know, gives
Speaker 1: the FED real wiggle room to be able to get
Speaker 1: those big hypes in early and I think that's what
Speaker 1: they're going to be looking at doing. So, you know,
Speaker 1: it could be that the jobs market is actually the
Speaker 1: saving grace for the US economy, even though right now
Speaker 1: that might not necessarily see the point seemed to be
Speaker 1: the case, given that it's keeping wages so high. Well,
Speaker 1: how much do you think has already priced into the market.
Speaker 1: I mean, we're looking at a US stock market that's
Speaker 1: down more on the year. Is the worst already priced in?
Speaker 1: Do you think? Or is there a lot more room
Speaker 1: to fall should the outlook deteriorate and we actually get
Speaker 1: a contraction in growth. You know, I think the focus,
Speaker 1: as I said, was going to be on on the
Speaker 1: job side of things. I think for now. We had
Speaker 1: that big sell off last week when there was that
Speaker 1: sort of realization that the FED is going to raise
Speaker 1: raise height rates like them to buy basic point and
Speaker 1: they did, um and that sort of you know, when
Speaker 1: we saw some some some big sort of moves down
Speaker 1: and we saw the F ANDP bear market move into
Speaker 1: that bear market I do think there is more downside
Speaker 1: to come, and I think that will be coming when
Speaker 1: we start to see the cooling off in the jobs market.
Speaker 1: That's going to start to get people nervous, that's going
Speaker 1: to get invested a little bit more nervous. Um For now,
Speaker 1: we've seen that inflation is high. We know that, we
Speaker 1: know that we've seen that one point five contraction already.
Speaker 1: So I think as far as those maccorrect mimic figures
Speaker 1: are concerned, it's priced in where we are. It's when
Speaker 1: we start to see that that easing in the jobs market.
Speaker 1: And today I mean jobless claims, they hag that they've
Speaker 1: just initial claims of just they're still creeping up for
Speaker 1: that five month high. We're not seeing big moves there,
Speaker 1: but there might just be some sense that there could
Speaker 1: be a little bit of sort of easing coming in.
Speaker 1: So I think that for me is going to be
Speaker 1: like one of the key data points to be really
Speaker 1: watching closely. Are you watching any other indicators besides that?
Speaker 1: I know I talked to a lot of people who
Speaker 1: are looking at technical indicators and so on, and I
Speaker 1: also wanted to ask you to look ahead considering that
Speaker 1: we're talking about you know how much further we could go.
Speaker 1: But what does the second half of the year look
Speaker 1: like now that we now the tune is almost over, okay,
Speaker 1: so you know, as far as the chance they can stand,
Speaker 1: I think the one place that we tend to be
Speaker 1: looking for is movement on the vict right. I think
Speaker 1: historically the Victor has seen a little bit more movement
Speaker 1: when we're sort of getting towards that last part of
Speaker 1: of the bear market and sort of concerns of processions.
Speaker 1: So we haven't really seen that in the Victor yet.
Speaker 1: It's elevated, but it's not up at those levels at
Speaker 1: forty five level, which I think is pretty key to
Speaker 1: be watching out for. And as far as looking out
Speaker 1: towards the second half of the year, I mean, I
Speaker 1: think we will start to see inflation cooling. I mean
Speaker 1: if we look ahead and even just next week, not
Speaker 1: as far as we're going, I want to look ahead,
Speaker 1: well said further, We'll start with next week. You know,
Speaker 1: you've got the PC inflation gage and that's fallen now.
Speaker 1: So it was up at six point six and then
Speaker 1: and then came down to three. If that falls again,
Speaker 1: I think that we could start to say that is
Speaker 1: looking like a friend. And if that's the case, then
Speaker 1: that could potentially continue and that is going to be
Speaker 1: a really good place for the market to be watching, Bob.
Speaker 1: So as far as as what to sort of watch
Speaker 1: out in the second half of the year, I think
Speaker 1: falling inflation is something that we could potentially be seeing. Also, though,
Speaker 1: I think we're also going to be seeing sort of
Speaker 1: a calling as I said in the in the jobs market.
Speaker 1: I think we could expect to see sort of you know,
Speaker 1: those non farm payrolls come right down. We could see
Speaker 1: sort of jobless claims start to inch. Hire um. As
Speaker 1: far as that's been said, they're going to be sort
Speaker 1: of the two key areas that I'm going to be
Speaker 1: watching would be inflation and job for the second half
Speaker 1: of the year. But I think until we've got that
Speaker 1: sense of peeking for ation, which has been you know
Speaker 1: this this real sort of bugged for the market. Have
Speaker 1: we passed it? When's it going to come? Until we
Speaker 1: get to there, and I think the markets are going
Speaker 1: to struggle for me higher, you know, Funeral. I think
Speaker 1: one of the most difficult things for sort of your
Speaker 1: conservative buy and hold investor this year was the the
Speaker 1: correlation between stocks and bonds being so close, you know,
Speaker 1: both falling in tandem. Um. You know, now as we're
Speaker 1: you know, people crossing their fingers and hoping possibly there
Speaker 1: might be a bottom in for for both and and
Speaker 1: they'll both for them up a little bit, you know,
Speaker 1: yields will come down and treasury prices will rise and
Speaker 1: stocks rise. I'm curious how you're thinking about that. How
Speaker 1: long can we uh sort of expect the two to
Speaker 1: be correlated? Uh, you know positively we're you know, what
Speaker 1: would it take do you think to sort of get
Speaker 1: them the dcouple again and sort of start moving in
Speaker 1: uppposite directions again. Yeah. I mean it's been a challenge,
Speaker 1: hasn't it. This year has been like really tough. Cash
Speaker 1: is king, That's what it's been. You know. It's been
Speaker 1: that idea of where are you going to look for
Speaker 1: in order to to to be able to to make
Speaker 1: something something from your investment. I think the idea that
Speaker 1: there has or there is now so much in cash
Speaker 1: is something that would be favorable for the markets and
Speaker 1: seeing that point of change around UM. And I also
Speaker 1: think I generally would expect to see I think a
Speaker 1: movement in bonds before we see the movement in stock.
Speaker 1: So that again is something that I've been looking out for.
Speaker 1: But I don't think with the Yeah, I don't know
Speaker 1: what that event is going to be. Sometimes you see
Speaker 1: that capitulation only where everyone just throws in the towel.
Speaker 1: Then enough enough, you know, take me out before you
Speaker 1: see that botty something out. Whether we'll see that this
Speaker 1: time now, I don't know that's historically the case, um,
Speaker 1: and so but I do think that there is going
Speaker 1: to be a rough ride still to come. I don't
Speaker 1: think it's, as I said, being completely priced and yet
Speaker 1: so I do think volatility is going to remain. And
Speaker 1: also that sort of does mean that having that sort
Speaker 1: of that hedging strategy UM could be really useful for
Speaker 1: these challenging days in the markets, because if you think, well,
Speaker 1: you know, we do a comparison to two years ago,
Speaker 1: by anything, and you're going to make money the market
Speaker 1: just went up, you know, we're in that sort of position,
Speaker 1: whereas it's a much more challenging environment at the moment. Yeah,
Speaker 1: that that whole notion of capitulation is kind of fascinating.
Speaker 1: I mean, we've seen we've had these you know, down
Speaker 1: to three plus percent days and no one is convinced
Speaker 1: we've seen capitulation. And I guess when you see so many,
Speaker 1: so much vilatility, you really need to see something that's
Speaker 1: even above and beyond what we've seen to really feel
Speaker 1: like capitulation is in. Is that is that kind of
Speaker 1: what everyone's waiting for anything? I think so, I think
Speaker 1: that I think that's why. But as you said, you know,
Speaker 1: we have seen the sort of these big swings, and
Speaker 1: to a degree, we've always got a little bit used
Speaker 1: to it, haven't we. So its yeah, so it's something
Speaker 1: even bigger needs to be happening. And is that going
Speaker 1: to be the moment? I mean, and as we know,
Speaker 1: what historically happens doesn't necessarily mean that it's going to
Speaker 1: happen this time. But you know, if we're trying to
Speaker 1: draw comparisons, and that is what would be expecting, but
Speaker 1: it expects to see that rise in the vix, the
Speaker 1: drop off and then a floor in place. Um when
Speaker 1: that will happen at the moment is quite a difficult
Speaker 1: question to answer. But I think we're getting closer, definitely,
Speaker 1: and I think by the by the time that we're moving,
Speaker 1: you know, well into the second quarter of the year,
Speaker 1: then we should have been past that. Does that also
Speaker 1: mean it's too early to say that we've seen a
Speaker 1: pea cans? Yeah, I think it's difficult. That's a really
Speaker 1: good question because I think bonds do me before stock,
Speaker 1: so in the sense that we will see that first,
Speaker 1: and we have seen that, You'll have come off in
Speaker 1: the last couple of days pretty in a pretty impressive
Speaker 1: manner um. But yeah, I just for me, there's still
Speaker 1: there's still more to come out. And I think the
Speaker 1: other thing that we need to be aware of it
Speaker 1: is the situation in Russia and Ukraine is I know
Speaker 1: you are in the US are not as closely tired
Speaker 1: as we are in written by any sense of the picture.
Speaker 1: But I think that that is a big anomaly. And
Speaker 1: also the COVID cases in in China. Again, you know,
Speaker 1: we feel that we might have passed that, but we
Speaker 1: just don't know when these sort of anonymally are going
Speaker 1: to pop up. So I think that's something that is
Speaker 1: worth just being aware of as well. But yeah, I
Speaker 1: just my feeling is there's a little bit longer to go.
Speaker 1: So we've seen this, but yes, that's what we're watching
Speaker 1: out for, is that that that falling in the yield
Speaker 1: and the peak path thing. Yeah, so so how would
Speaker 1: you sort of position in the stock market these days?
Speaker 1: You know that everyone's wondering if this value our performance
Speaker 1: will last or if you know, tech is sort of
Speaker 1: inevitable that will get a big bounce back in tech.
Speaker 1: How are you thinking about sort of you know, to
Speaker 1: play play the internals of the market. Yeah, you know,
Speaker 1: it's not easy right now. It's definitely not easy, and
Speaker 1: you do have to be much more careful on where
Speaker 1: you're picking, on where you're sticking your money than you
Speaker 1: have had to be for a very long time. And
Speaker 1: I do think that there are some areas of tech
Speaker 1: which really do still stand to outperform as we progress
Speaker 1: through the year. I think sort of cloud areas of tech,
Speaker 1: AI processing, those areas of tech are going to be
Speaker 1: the ones that will be ready to pick up when
Speaker 1: we come the other side. I think it's going to
Speaker 1: be also about sort of positioning yourself to be ready
Speaker 1: for that turnaround. We know that like trying to catch
Speaker 1: it is it is pretty impossible, really, but joy to
Speaker 1: position yourself so that you're ready for when it does come. Um,
Speaker 1: So that would be the particular is And also I
Speaker 1: think other other stocks are going to be consumer staples, UM,
Speaker 1: you know that sort of fairly typical stocks that that
Speaker 1: are sort of you know, what would consider UM where
Speaker 1: consumers still have to go regardless of what's going on. UM.
Speaker 1: That would be sort of the two areas that I
Speaker 1: would be looking And I think when we get to
Speaker 1: the other side of it, that's when you need to
Speaker 1: be in the financials ready to rise those those higher
Speaker 1: rates UM and sort of really benefit from that. But
Speaker 1: just that that threat of recession is just going to
Speaker 1: be weighing on financials for now. Can I also ask
Speaker 1: you about turnings because I feel like just about everybody,
Speaker 1: everybody I talked to says that earnings will still have
Speaker 1: to come down, that analysts estimates are way too high
Speaker 1: for what people are expecting will come for the economy
Speaker 1: in the latter half of the year or even into
Speaker 1: I'm wondering what you think or whether or not maybe
Speaker 1: we can see companies continuing to pass on costs and
Speaker 1: and still potentially maybe UM posting solid earnings results. Yeah,
Speaker 1: it's a good question. I think we sort of you know,
Speaker 1: earning well, first of all, how is it almost earning
Speaker 1: season again? Where did that go? Bro. But but you know,
Speaker 1: I think we get this quite often heading into learning season,
Speaker 1: where these questions about is it over are we over
Speaker 1: expecting from the company, And I think that there is
Speaker 1: a good chance that we will get in disappointment um
Speaker 1: coming into these earning seasons. You know it, it's been
Speaker 1: a tough environment for them and it will be I
Speaker 1: think more importantly, the next four thir is going to
Speaker 1: be extremely tough. That's where I think we're going to
Speaker 1: see a lot of the guidance perhaps coming in a
Speaker 1: little bit lower than what we might have been expecting.
Speaker 1: That's I think going to be UM something to watch
Speaker 1: out for. As far as sort of you know, going
Speaker 1: beyond that, I think there will be some some better
Speaker 1: news as we head towards the end of the year,
Speaker 1: but that's a thing quite a long way out. I
Speaker 1: still think we've got to get through the board guidance
Speaker 1: from from the ending season coming up, which is going
Speaker 1: to be I think on the disappointing side. As far
Speaker 1: as you know, price hikes are concern. We know that
Speaker 1: there have been price hikes, they have been passed on.
Speaker 1: We also know that that they're not always successfully being
Speaker 1: passed on, So I think that's something. And the other
Speaker 1: thing to bear in mind is we've had that sort
Speaker 1: of you know, the cash egg from from from the
Speaker 1: pandemic which has been helping UM households as they sort
Speaker 1: of have moved into this entire inflation the environment, and
Speaker 1: that's going to have been disappearing now, so that's going
Speaker 1: to be something that's going to becoming, I think more
Speaker 1: obvious um as we're going too this, Senny Doana, such
Speaker 1: a treat to hear all your insights and thoughts. We
Speaker 1: we really appreciate it, and thanks for meeting with Valdonna
Speaker 1: in London. That allows that allows her to expense her
Speaker 1: whole trip from the entire thing to all the princesses
Speaker 1: and castles. We can't let you go without participating in
Speaker 1: our tradition on the show. Which is the craziest thing
Speaker 1: we've seen in markets this week, So hopefully hopefully you've
Speaker 1: got something for us. Uh, let's start with you though,
Speaker 1: what's the craziest thing you saw this week? I actually
Speaker 1: found a couple of things that I couldn't decide which
Speaker 1: one I wanted to go with, but I'm going with
Speaker 1: this headline and I saw on Bloomberg it's South Africa's
Speaker 1: national airline is being sued by an investment firm and
Speaker 1: the investment firm wants the sale to um. South Africa's
Speaker 1: airline had sold itself or sold more than half of itself,
Speaker 1: and so this investment firm wants the sale to be
Speaker 1: rerun because they say the acquisition was unlawful and constitutionally invalid.
Speaker 1: And I was going to ask you, Mike, to guess
Speaker 1: how much this airline had gone for. Oh boy, was
Speaker 1: it in in South African rand or is it in Uh?
Speaker 1: Accept Yeah, I'll accept answers in news though. UM, I'm
Speaker 1: guessing I'm gonna guess on the low end because I
Speaker 1: don't think they'd be fighting over it otherwise, UM, hundred million,
Speaker 1: three dollars, three dollars, I thought it was a type
Speaker 1: of I would have been at least five. I didn't know.
Speaker 1: I had I known, right, we could have on we
Speaker 1: could have owned an airline. And is it it's just
Speaker 1: they're so in debt. I guess that, Uh, it's more
Speaker 1: of an enterprise value type of thing. I mean, who
Speaker 1: wouldn't think that you you can't get more than three
Speaker 1: dollars for an airline so low? Like any of us
Speaker 1: could have bought it. I'm gonna get I'm gonna bid
Speaker 1: on the next one. I'm gonna go. And that's pretty good. Jeez.
Speaker 1: I thought I was low ball and at a hundred million, Well,
Speaker 1: I don't know if I'd want to fly Fional on
Speaker 1: an airline sold for three dollars. So do you know
Speaker 1: what I was having a very similar thought. I was
Speaker 1: trying to have picked her and imagine what the flight
Speaker 1: you name flight might be. I know you like cast
Speaker 1: the airlines can be a little bit uncomfortable, but I'm
Speaker 1: not sure I'm taking that plate. How about you, Fional?
Speaker 1: What's the what's the craziest thing you've seen recently? Hey,
Speaker 1: do you know, I don't know if mind's crazy, but
Speaker 1: it's something that I really enjoy watching, and it's you know,
Speaker 1: sometimes there are those those those relationships between markets that
Speaker 1: are quite interesting. And then just to name me a
Speaker 1: little bit, and it's the Dr Copper I think you know,
Speaker 1: just overnight we saw on the charts Dr Copper Bell Copper.
Speaker 1: Should I say, um? You know, traditionally it just reflects
Speaker 1: the health of the global economy. So when you know
Speaker 1: the economy is in an expansion, we sent the copper
Speaker 1: rises and and the alternative when it didn't sort of,
Speaker 1: you know, in a period of contraction or heading talks
Speaker 1: contracting with Tennessee that copper schools and copper has been fooling.
Speaker 1: It's fallen. It's fallen to a fifty month low overnight
Speaker 1: last night. It's down twenty five percent from its recent high.
Speaker 1: And you know, it's taken out from cute that whole.
Speaker 1: So I think again when we talk about about idea
Speaker 1: a procession and helpable to economic it's a really good
Speaker 1: one to be watching right now. Dr Copper, think the
Speaker 1: good doctor. He is not not a good uh prognosis.
Speaker 1: I guess the economy at the moment. And that's and
Speaker 1: we are taping on Thursday, so that that price action,
Speaker 1: uh Joan is talking about, happened Wednesday night in the Thursday,
Speaker 1: So who knows, by the time this comes out, maybe
Speaker 1: it'll bounce all the way back. We'll see. With with
Speaker 1: with these markets, that's pretty good. You know what, I'm
Speaker 1: gonna go back and start looking at copper again. It's uh,
Speaker 1: it is such a closely watched barometer. Um. Everything is
Speaker 1: so screwy these days, though it's hard to know if
Speaker 1: if the old indicators are as reliable as the as
Speaker 1: they want were. But but that is certainly a one
Speaker 1: to watch. All right, I'm going back to my favorite
Speaker 1: asset class, the the alternative asset class. Uh do you
Speaker 1: guys YouTube might not be old enough to remember the
Speaker 1: movie Back to the Future. Maybe not. You don't remember
Speaker 1: this version of it when it came out in five
Speaker 1: I think the movie came out, but in six it
Speaker 1: came out on VHS tape. You had a VCR back
Speaker 1: in the day, in the eighties. Yeah, I didn't have
Speaker 1: one at this point, but you were a player. You
Speaker 1: had that technology in your house in the mid eighties.
Speaker 1: So the guy who's Biff, he's like the bad guy
Speaker 1: in the movie, you know, the Bully. He's kept a sealed,
Speaker 1: near mint condition of the original Back to the Future
Speaker 1: vh S tape. He's had it in his possession all
Speaker 1: this time, and I guess ifs I guess he's having
Speaker 1: some hard time, so he's decided to sell it to
Speaker 1: an auction house. Um, this is courtesy of CNN dot Com.
Speaker 1: I'm getting the story. Heritage Auctions in Dallas put this
Speaker 1: up for sale. Um. It ended up being the highest
Speaker 1: ever auction price for a VHS tape. Um, so you
Speaker 1: know what time it is, build Donna, I need you
Speaker 1: to guess. Hopefully you do better than my guests on
Speaker 1: the airline bid you were really bad at that was
Speaker 1: pretty bad near condition VHS tape Back to the Future
Speaker 1: was the highest ever selling price for a VHS tape
Speaker 1: at a collectures action. And what they're saying is that
Speaker 1: a lot of these old actors have rose and rose
Speaker 1: on their bookshelves of old VHS tapes that might come
Speaker 1: to market for some reason. They're a hot, hot thing
Speaker 1: again in the collector's market. Which, um, I think he
Speaker 1: offered to like write a note on it or something. Okay,
Speaker 1: I'll go. I don't know if the buyer actually took
Speaker 1: him up on that or not. They want to study that.
Speaker 1: We don't need that, ye would, but it would be cool. Okay, Well,
Speaker 1: I'll go with twelve thousand dollars. Twelve thousand dollars, doota.
Speaker 1: How about you? What's what's your guests for the winning
Speaker 1: auction price for for this VHS tape. I think I
Speaker 1: would go a little bit higher. I think there is
Speaker 1: some really keen back to the Future that level out there,
Speaker 1: so I'm going to go stay twenty five thousand, dooda,
Speaker 1: you win, but you're both stolettle off seventy five VHS.
Speaker 1: Nobody even has VHS players. Who's going to watch that VHS? Yeah,
Speaker 1: I'm not sure you ever want to play it, though
Speaker 1: it's you might. You might drop it down and buy
Speaker 1: about fifty tho if you if you actually play the thing,
Speaker 1: I think you want to keep it in that field.
Speaker 1: For whatever reason, people like to collect this stuff like this.
Speaker 1: I'm always fascinated seventy five thousand. And you know, if
Speaker 1: you god VHS tape second s, what do you have
Speaker 1: on this shelf? You never know, You never know anymore.
Speaker 1: But all I know is if you go to this
Speaker 1: person's house, you know you're gonna hear all about it.
Speaker 1: You know. I'm sure it's going to be displayed prominently.
Speaker 1: I have an old Dennis the Menace If anybody wants it?
Speaker 1: Oh really? Yeah? Bid all right? You you Mike, you
Speaker 1: might get a bid for that. We'll see, we'll see
Speaker 1: if you. I think the only way to bid on
Speaker 1: that is you have to leave us a review of
Speaker 1: the podcast on Apple podcast with with your bidding and
Speaker 1: maybe your routing number. I don't know if you want
Speaker 1: to Yeah, no, don't do that. We'll accept bids for that.
Speaker 1: Dennis the Menace tape on on our Apple podcast Reviews,
Speaker 1: which we need to get the three hundred before we
Speaker 1: reveal bil Donna's high school nicknames. So we're we still
Speaker 1: got a few more to go, so get him in there.
Speaker 1: This is Mike's stick to get people to review. I
Speaker 1: I can't resist a good gimmick. It's that's that's my
Speaker 1: Achilles heel. But I think that is all the time.
Speaker 1: So great to hear your thoughts. Um. Really appreciate you
Speaker 1: joining us from London and hopefully we can talk again soon.
Speaker 1: Thanks brilliant, Thank you so much. Really enjoying myself. Thank you, Fianna.
Speaker 1: What Goes Up will be back next week and so
Speaker 1: then you can find us on the Bloomberg Terminal website
Speaker 1: and app or wherever you get your podcast. We love
Speaker 1: it if you took the time to rate and review
Speaker 1: the show on Apple Podcasts, so more listeners can find us.
Speaker 1: And you can find us on Twitter, follow me at
Speaker 1: Rea Anonymous, Bildanna Hirach is at Coldanna Hirach. You can
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Speaker 1: produced by Stacy Wang. The head of Bloomberg Podcast is
Speaker 1: francesco Leavie. Thanks for listening, See you next time. Aspect
Speaker 1: not Wanting