1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,119 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:47,080 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. We're gonna 11 00:00:47,080 --> 00:00:48,880 Speaker 2: start strong. Stuart Kaiser is going to be with the 12 00:00:48,920 --> 00:00:51,720 Speaker 2: sunny equity market, set her moment, Tom Vercelli on later 13 00:00:52,080 --> 00:00:55,200 Speaker 2: of course, on FED Day and the myriad challenges that 14 00:00:55,320 --> 00:00:58,560 Speaker 2: Jay Paul has. But we start especially strong. You know, 15 00:00:58,680 --> 00:01:02,480 Speaker 2: she's an iron Woman, really, Gargey's out of Jones Beach. Okay, 16 00:01:02,680 --> 00:01:05,120 Speaker 2: she She's like, you know, we're punting. I mean, Gargy 17 00:01:05,200 --> 00:01:07,760 Speaker 2: is toughest nails with black Rock, and you know she's 18 00:01:07,760 --> 00:01:10,640 Speaker 2: doing the Iron Man thing and and all that. Yeah, 19 00:01:10,680 --> 00:01:12,600 Speaker 2: you know, it's like like pray eth a lot but tough. 20 00:01:12,959 --> 00:01:15,119 Speaker 2: I don't know Garge's with us this morning. Gardy, thank 21 00:01:15,160 --> 00:01:18,399 Speaker 2: you so much for starting strong. What happens to your 22 00:01:18,560 --> 00:01:21,959 Speaker 2: world if rates keep going higher? 23 00:01:23,440 --> 00:01:27,639 Speaker 3: Good morning, Paul and Tom. Longtime listener, first time joiner, 24 00:01:27,800 --> 00:01:31,080 Speaker 3: Really excited to be here. So what happens to my 25 00:01:31,240 --> 00:01:34,640 Speaker 3: world if rates continue to go higher? Two things. Number One, 26 00:01:35,000 --> 00:01:40,080 Speaker 3: there's going to be continued focused on selectivity within equities, 27 00:01:40,200 --> 00:01:42,600 Speaker 3: and the areas of the equity market in the US 28 00:01:42,640 --> 00:01:46,000 Speaker 3: that have earnings growth are continue are going to continue 29 00:01:46,040 --> 00:01:49,080 Speaker 3: to outperform. So that's number one. Number two, And you know, 30 00:01:49,120 --> 00:01:51,120 Speaker 3: we've been talking about this for a while, and Tom, 31 00:01:51,160 --> 00:01:52,960 Speaker 3: you know, you and I have chatted about this before. 32 00:01:53,000 --> 00:01:55,640 Speaker 3: But the long end, anything sort of longer than the 33 00:01:55,680 --> 00:01:58,320 Speaker 3: five to six year part of the interest rate curve 34 00:01:58,960 --> 00:02:02,040 Speaker 3: is going to become more and more difficult for investors, 35 00:02:02,200 --> 00:02:05,360 Speaker 3: especially given that, you know, given that there has been 36 00:02:05,680 --> 00:02:08,400 Speaker 3: five percent that you can earn or more in cash. 37 00:02:08,560 --> 00:02:11,040 Speaker 3: So I think two things for investors to keep in 38 00:02:11,080 --> 00:02:14,440 Speaker 3: mind is staying in high quality in the equity markets 39 00:02:14,480 --> 00:02:17,040 Speaker 3: and staying in the very front end to maybe the 40 00:02:17,040 --> 00:02:19,079 Speaker 3: belly of the curve in fixed and come markets. I 41 00:02:19,080 --> 00:02:20,720 Speaker 3: think that's going to be the exact. 42 00:02:20,560 --> 00:02:23,000 Speaker 2: I'm looking at the real rate. Kenneth Roguoff of Harvard 43 00:02:23,160 --> 00:02:25,040 Speaker 2: was with David West and Wall Street week. Look for 44 00:02:25,080 --> 00:02:29,080 Speaker 2: that this week, and Professor Rogoff is riveted on the 45 00:02:29,160 --> 00:02:33,760 Speaker 2: real yield, the inflation adjusted yield. I'm sorry, Gargey. If 46 00:02:33,760 --> 00:02:35,720 Speaker 2: it walks like a duck, works like a duck, it's 47 00:02:35,720 --> 00:02:38,239 Speaker 2: a duck. And the ten year real yield I'm rounded 48 00:02:38,320 --> 00:02:40,960 Speaker 2: up to two point two eight percent is the real 49 00:02:41,040 --> 00:02:42,720 Speaker 2: yield walking away from us. 50 00:02:44,639 --> 00:02:47,200 Speaker 3: It looks like, you know, obviously, it has arisen pretty 51 00:02:47,240 --> 00:02:50,160 Speaker 3: meaningfully for good reason. If we look at the month 52 00:02:50,200 --> 00:02:54,080 Speaker 3: of April, everything that we have gotten so far, whether 53 00:02:54,120 --> 00:02:56,160 Speaker 3: it's the payroll data, whether it was ISM in the 54 00:02:56,160 --> 00:02:59,000 Speaker 3: beginning of the month, whether it was CPI and PCE, 55 00:02:59,680 --> 00:03:03,160 Speaker 3: all of that have contributed to yields moving higher. What 56 00:03:03,280 --> 00:03:05,160 Speaker 3: I will say, though, and you know this is something 57 00:03:05,200 --> 00:03:07,840 Speaker 3: that we lay out in our Spring Investment Directions, is 58 00:03:07,960 --> 00:03:11,079 Speaker 3: owning real rates in the very short end, so sort 59 00:03:11,120 --> 00:03:13,000 Speaker 3: of the zero to five year part of the curve 60 00:03:13,320 --> 00:03:14,959 Speaker 3: we think make a lot of sense. And if you 61 00:03:15,080 --> 00:03:17,240 Speaker 3: look at returns for the month of April, and if 62 00:03:17,240 --> 00:03:21,280 Speaker 3: you compare sort of what s step has done versus 63 00:03:21,320 --> 00:03:24,520 Speaker 3: many of the other front end securities or longer fixed 64 00:03:24,520 --> 00:03:27,359 Speaker 3: income securities. You've actually been a little bit more preserved 65 00:03:27,880 --> 00:03:30,080 Speaker 3: being in the front end of the inflation link curve. 66 00:03:30,240 --> 00:03:34,320 Speaker 3: Why because inflation has surprise to the upside, and you know, 67 00:03:34,360 --> 00:03:36,440 Speaker 3: for a big part of the month, oil was surprising 68 00:03:36,480 --> 00:03:38,840 Speaker 3: to the upside as well. So we do think that 69 00:03:39,000 --> 00:03:42,360 Speaker 3: front end inflation can be a good place for investors 70 00:03:42,400 --> 00:03:46,600 Speaker 3: to be invested in, especially at these really strong real rates. 71 00:03:46,600 --> 00:03:49,960 Speaker 3: But again, keeping your duration short is very important. 72 00:03:50,360 --> 00:03:52,600 Speaker 4: So Gark, I like to keep in the duration short 73 00:03:52,640 --> 00:03:55,920 Speaker 4: call here, Should I just park my money in the 74 00:03:55,960 --> 00:04:00,520 Speaker 4: two year United States Treasury at five point zero three percent? 75 00:04:01,360 --> 00:04:03,440 Speaker 4: Is that is that the trader? Should I take some 76 00:04:03,520 --> 00:04:06,200 Speaker 4: take some credit risk here? And maybe you know, I 77 00:04:06,200 --> 00:04:09,080 Speaker 4: don't know, corporates are high yields. How do I think 78 00:04:09,080 --> 00:04:11,160 Speaker 4: about credit versus just the treasury market? 79 00:04:11,640 --> 00:04:14,000 Speaker 3: Yeah, look, it's it's really attractive. You know, you look 80 00:04:14,040 --> 00:04:15,720 Speaker 3: at two years, you look at where they are, where 81 00:04:15,760 --> 00:04:18,440 Speaker 3: it is, and it's certainly very attractive. But I would 82 00:04:18,520 --> 00:04:22,160 Speaker 3: also say that as of right now, the economy looks good. Yes, 83 00:04:22,640 --> 00:04:24,839 Speaker 3: the first look at the first quarter GDP was a 84 00:04:24,880 --> 00:04:28,800 Speaker 3: little bit softer than expected, but we're still growing much 85 00:04:28,880 --> 00:04:32,440 Speaker 3: higher than what expectations were coming into the years. So credit, 86 00:04:32,520 --> 00:04:34,920 Speaker 3: we think will remain okay. And if you look at 87 00:04:34,960 --> 00:04:38,159 Speaker 3: owning sort of that front end, corporate credit maybe in 88 00:04:38,200 --> 00:04:39,839 Speaker 3: the one to three are part of the curve, you 89 00:04:39,960 --> 00:04:43,000 Speaker 3: are picking up a little bit of extra carry, and 90 00:04:43,040 --> 00:04:46,040 Speaker 3: we think that makes sense and I want to highlight 91 00:04:46,120 --> 00:04:49,760 Speaker 3: those that, especially given how tight spreads are both in 92 00:04:49,839 --> 00:04:53,000 Speaker 3: ig credit as well as high as well as high yield. 93 00:04:53,279 --> 00:04:55,240 Speaker 3: You know, when you look at for centile levels, they're 94 00:04:55,279 --> 00:04:58,480 Speaker 3: at their riches that they have been on a spread basis, 95 00:04:58,720 --> 00:05:01,279 Speaker 3: but then when you look at in yield basis, they're 96 00:05:01,279 --> 00:05:04,920 Speaker 3: obviously a lot more attractive. So I think selectivity really 97 00:05:04,960 --> 00:05:07,159 Speaker 3: plays a role here. So looking at you know, we're 98 00:05:07,160 --> 00:05:10,039 Speaker 3: telling investors, if you're looking at high yield, go into 99 00:05:10,160 --> 00:05:13,160 Speaker 3: defensive high yield, and look at if you're looking into 100 00:05:13,240 --> 00:05:16,279 Speaker 3: corporate credit or even securitized asset, go with an active 101 00:05:16,360 --> 00:05:19,719 Speaker 3: manager that can actually pick the bonds for you where 102 00:05:19,760 --> 00:05:21,960 Speaker 3: you can earn your income, earn your carry, but at 103 00:05:22,000 --> 00:05:24,920 Speaker 3: the same time be a little bit preserved for some 104 00:05:25,040 --> 00:05:28,800 Speaker 3: of that downside given the level of the tightness of spreads. 105 00:05:28,920 --> 00:05:30,720 Speaker 4: All right, for those out there that want to take 106 00:05:30,760 --> 00:05:33,680 Speaker 4: some equity risk here. I mean, I'm not sure what. 107 00:05:33,600 --> 00:05:34,040 Speaker 2: To do here. 108 00:05:34,040 --> 00:05:36,080 Speaker 4: I mean, we've all kind of grown up over the 109 00:05:36,160 --> 00:05:40,200 Speaker 4: last fifteen twenty years with technology leading the way. Do 110 00:05:40,320 --> 00:05:42,159 Speaker 4: I just stick with the big tech names, or do 111 00:05:42,240 --> 00:05:44,719 Speaker 4: I try to find some value out there, whether it's 112 00:05:44,760 --> 00:05:47,600 Speaker 4: financials or energy or consumer staples. 113 00:05:48,320 --> 00:05:48,560 Speaker 2: Yeah. 114 00:05:48,760 --> 00:05:50,839 Speaker 3: So, you know, again, if we look at the just 115 00:05:50,920 --> 00:05:53,640 Speaker 3: even since the earnings that have come up just over 116 00:05:53,680 --> 00:05:56,479 Speaker 3: the last week or so, I think what we're finding 117 00:05:56,800 --> 00:06:00,520 Speaker 3: is that earnings growth is coming. You know, it is 118 00:06:00,560 --> 00:06:02,760 Speaker 3: surprising to the upside, which is part of the reason 119 00:06:02,800 --> 00:06:05,880 Speaker 3: why last week we had an okay week in the markets. 120 00:06:06,360 --> 00:06:08,680 Speaker 3: I think focusing on areas of the market, of the 121 00:06:08,720 --> 00:06:13,160 Speaker 3: equity market where earnings growth remains stable, which companies which 122 00:06:13,200 --> 00:06:18,000 Speaker 3: are able to generate cash flow, companies that very importantly 123 00:06:18,120 --> 00:06:21,479 Speaker 3: have low leverage, and we call that high quality companies. 124 00:06:22,040 --> 00:06:24,680 Speaker 3: I think that is what investors should focus on. And 125 00:06:24,720 --> 00:06:26,680 Speaker 3: you know, the question that we get over and over 126 00:06:26,720 --> 00:06:30,000 Speaker 3: again from investors from clients when they're building their portfolios 127 00:06:30,120 --> 00:06:32,479 Speaker 3: is that, you know, is this the time to get 128 00:06:32,520 --> 00:06:35,120 Speaker 3: into cyclicals and is this the time to get into 129 00:06:35,120 --> 00:06:37,880 Speaker 3: small caps? And that is where you know, when we 130 00:06:37,880 --> 00:06:40,880 Speaker 3: look at a portfolio analysis, we see that investors are 131 00:06:41,040 --> 00:06:44,520 Speaker 3: largely overweight small caps, and we think that in this 132 00:06:44,800 --> 00:06:49,440 Speaker 3: rising rate and higher rate period, away from the small 133 00:06:49,520 --> 00:06:53,599 Speaker 3: cap and into larger companies, larger cap quality companies is 134 00:06:53,640 --> 00:06:54,360 Speaker 3: what makes sense. 135 00:06:57,640 --> 00:06:59,919 Speaker 2: We're out of time. Thank you so much, Gary Chattery. 136 00:07:00,160 --> 00:07:13,240 Speaker 2: This is the black rock. Stuard Chuycer with us right now. 137 00:07:13,320 --> 00:07:15,800 Speaker 2: Let's get right into it. An important conversation. He has 138 00:07:15,840 --> 00:07:19,680 Speaker 2: been incredibly on on this great bull market, a very 139 00:07:19,760 --> 00:07:23,120 Speaker 2: articulate voice on having the courage to stay in. Oh 140 00:07:23,200 --> 00:07:27,560 Speaker 2: my word, a drawdown four point two percent SPX. I 141 00:07:27,600 --> 00:07:30,640 Speaker 2: know you're gonna tell me there's an opportunity here because 142 00:07:30,680 --> 00:07:34,760 Speaker 2: you are a bull. What does your world do if 143 00:07:34,880 --> 00:07:39,160 Speaker 2: Powell or Paul Sweeney force interest rates higher? What what 144 00:07:39,440 --> 00:07:42,880 Speaker 2: happens to the equity world if the real yield breaks 145 00:07:42,920 --> 00:07:45,040 Speaker 2: through to two point three to zero two point three 146 00:07:45,080 --> 00:07:45,600 Speaker 2: two percent? 147 00:07:46,000 --> 00:07:47,720 Speaker 5: I mean, there's definitely gonna be pressure on markets. I 148 00:07:47,720 --> 00:07:49,720 Speaker 5: think if really yields keep rising, to us, it's more 149 00:07:49,760 --> 00:07:51,800 Speaker 5: the velocity move than the level though. I mean, I 150 00:07:51,800 --> 00:07:54,400 Speaker 5: think if we moved twenty basis points higher and then stabilized, 151 00:07:54,400 --> 00:07:56,320 Speaker 5: I think equities can deal with that just fine. But 152 00:07:56,480 --> 00:07:58,680 Speaker 5: you know, what we've had is just a very rapid, 153 00:07:58,800 --> 00:08:00,960 Speaker 5: you know, sort of acceleration that's been disrupted. 154 00:08:01,080 --> 00:08:04,400 Speaker 2: Am I stunned that the VIX is sixteen point eight 155 00:08:04,480 --> 00:08:06,800 Speaker 2: When I look at the interest rates soup into the 156 00:08:07,280 --> 00:08:11,160 Speaker 2: one point thirty the Fed sides folks today on Bloomberg Radio. 157 00:08:11,360 --> 00:08:14,080 Speaker 2: When I look at where we are in a sixteen 158 00:08:14,120 --> 00:08:17,200 Speaker 2: point oh eight, let's feeling like a twenty. Why is 159 00:08:17,200 --> 00:08:18,760 Speaker 2: the VIC sixteen point oh eight? 160 00:08:19,240 --> 00:08:21,320 Speaker 5: Yeah, Look, I think it's the reason the VIX is is, 161 00:08:21,360 --> 00:08:23,240 Speaker 5: I think lower than most people expect, is because the 162 00:08:23,240 --> 00:08:25,720 Speaker 5: markets not realizing a lot of volatility. Right The realized 163 00:08:25,800 --> 00:08:28,040 Speaker 5: volatility over the last ten days is probably twelve and 164 00:08:28,040 --> 00:08:30,560 Speaker 5: a half. So it's pretty hard to get the vics higher. 165 00:08:30,440 --> 00:08:32,680 Speaker 2: When day to day the equity markets just aren't moving 166 00:08:32,679 --> 00:08:33,240 Speaker 2: that much. You know. 167 00:08:33,320 --> 00:08:35,720 Speaker 5: Rule of thumb, sixteen vix is a one percent move 168 00:08:35,760 --> 00:08:38,520 Speaker 5: per day implied over the next month. That's actually high 169 00:08:38,520 --> 00:08:41,720 Speaker 5: when you consider what we've had recently. So I agree 170 00:08:42,040 --> 00:08:44,880 Speaker 5: it feels low from a risk perspective, but just you know, 171 00:08:45,000 --> 00:08:46,920 Speaker 5: with the markets as stable as they are, it's just 172 00:08:46,920 --> 00:08:48,080 Speaker 5: hard to get it meaningfully higher. 173 00:08:48,080 --> 00:08:51,559 Speaker 4: From here, stewartis you walk out to the City Trading 174 00:08:51,600 --> 00:08:54,840 Speaker 4: Floor at three ninety Greenwich Street in Lower Manhattan. Are 175 00:08:54,880 --> 00:08:57,040 Speaker 4: your traders there when they're talking to their clients. Are 176 00:08:57,040 --> 00:09:00,280 Speaker 4: their clients wanting to take risk here or they We're 177 00:09:00,360 --> 00:09:03,240 Speaker 4: just I'm sitting on the sidelines here until I get 178 00:09:03,320 --> 00:09:04,800 Speaker 4: better sense of what this Fed's going to do. 179 00:09:05,240 --> 00:09:06,880 Speaker 5: You know, I think I think today for the morning, 180 00:09:06,880 --> 00:09:08,199 Speaker 5: I think people will be sitting on their hands a 181 00:09:08,200 --> 00:09:10,000 Speaker 5: little bit. There's no reason to take risk in the 182 00:09:10,120 --> 00:09:11,880 Speaker 5: you know, a few hours before the FED. I think 183 00:09:11,920 --> 00:09:14,560 Speaker 5: in general people were happy to take risk until you know, 184 00:09:14,559 --> 00:09:16,199 Speaker 5: two to three weeks ago, and then you had kind 185 00:09:16,200 --> 00:09:18,080 Speaker 5: of oil move higher, you had some bad news out 186 00:09:18,080 --> 00:09:20,160 Speaker 5: of the Middle East, and then frankly or you're seeing 187 00:09:20,200 --> 00:09:24,240 Speaker 5: in in am d et cetera overnight is a repeat 188 00:09:24,240 --> 00:09:26,640 Speaker 5: of what we saw out of Taiwan, Senmi and ASML 189 00:09:26,840 --> 00:09:29,720 Speaker 5: and Netflix, which were some big sort of semis focused 190 00:09:29,720 --> 00:09:32,199 Speaker 5: stocks making really large moves on earnings. And I think 191 00:09:32,200 --> 00:09:34,240 Speaker 5: when that happened it impacted us as well. We took 192 00:09:34,240 --> 00:09:35,760 Speaker 5: a step back as wait a second, you know, if 193 00:09:35,800 --> 00:09:38,160 Speaker 5: these these kind of high flying stocks are under this 194 00:09:38,280 --> 00:09:41,720 Speaker 5: much pressure with what I would consider decent results YEPN, 195 00:09:41,800 --> 00:09:43,400 Speaker 5: then maybe we just need to be a little careful, 196 00:09:43,400 --> 00:09:46,640 Speaker 5: So I think I think investors are trying to digest 197 00:09:46,679 --> 00:09:49,720 Speaker 5: all these various risks. And then obviously the GDP report 198 00:09:49,760 --> 00:09:51,480 Speaker 5: definitely got people's attention without a doubt. 199 00:09:51,679 --> 00:09:54,520 Speaker 4: How about earnings were halfway through kind of earning season. 200 00:09:54,559 --> 00:09:58,640 Speaker 4: Here we've got we had Amazon last night, Apple after 201 00:09:58,640 --> 00:10:01,960 Speaker 4: the clothes tomorrow. What are you guys seeing in earnings 202 00:10:01,960 --> 00:10:03,880 Speaker 4: and what's that doing to your call here? Is it 203 00:10:03,920 --> 00:10:04,880 Speaker 4: impacting your call at all? 204 00:10:04,960 --> 00:10:07,079 Speaker 5: I say we were a little concerned going into TMT 205 00:10:07,200 --> 00:10:09,840 Speaker 5: earnings last week. You know, frankly, they put up solid, 206 00:10:10,160 --> 00:10:12,760 Speaker 5: solid results and that got the market higher. So I 207 00:10:12,760 --> 00:10:14,800 Speaker 5: think by and large, we're getting what you would call 208 00:10:14,840 --> 00:10:17,440 Speaker 5: a pretty solid quarter, like a modest beat on revenue, 209 00:10:17,480 --> 00:10:20,440 Speaker 5: solid beat on EPs, and the biggest stocks in the 210 00:10:20,480 --> 00:10:23,319 Speaker 5: market are delivering, So you know, I think that's gotten 211 00:10:23,360 --> 00:10:26,600 Speaker 5: people fairly comfortable. After what I mentioned was a little bit. 212 00:10:26,480 --> 00:10:28,400 Speaker 2: Of a wobble kind of coming into the scenes. Came 213 00:10:28,480 --> 00:10:30,440 Speaker 2: up with the dining room table last night. It was 214 00:10:30,600 --> 00:10:35,319 Speaker 2: really check cadd that was great after thought picked out 215 00:10:35,360 --> 00:10:39,200 Speaker 2: the food. Stuart Kaiser came up with the dining room table, 216 00:10:39,240 --> 00:10:42,520 Speaker 2: which is how partitioned did this market? My basic take 217 00:10:42,679 --> 00:10:47,520 Speaker 2: is the forget about magnificent seven, the magnificent twenty are 218 00:10:47,600 --> 00:10:51,839 Speaker 2: ever separate from the other four hundred number on SPX. 219 00:10:52,040 --> 00:10:53,560 Speaker 5: Yeah, I think that's right. You know, time we've been 220 00:10:53,600 --> 00:10:56,600 Speaker 5: sort of in this broadening theme. The problem with the 221 00:10:56,640 --> 00:10:59,120 Speaker 5: broadening theme for us has been it doesn't work in 222 00:10:59,160 --> 00:11:02,040 Speaker 5: two conditions when you have risk rising and too frankly 223 00:11:02,120 --> 00:11:05,760 Speaker 5: during earnings, because the fact is your Microsoft's, your Apples, 224 00:11:05,760 --> 00:11:09,120 Speaker 5: your Amazons, your Google's are just putting up huge numbers 225 00:11:09,320 --> 00:11:11,680 Speaker 5: and it's very hard to get the market to broaden. 226 00:11:11,679 --> 00:11:15,680 Speaker 2: Oway, how do you use your theory in textbooks? Somebody 227 00:11:15,720 --> 00:11:22,240 Speaker 2: had out a summary of the new revenue of the 228 00:11:22,320 --> 00:11:27,000 Speaker 2: three major cloud companies. We've never imagined those numbers before. 229 00:11:27,480 --> 00:11:29,480 Speaker 2: So then how do you do your day to day work? 230 00:11:29,960 --> 00:11:32,480 Speaker 2: How odd this tech juggernaut is? 231 00:11:33,200 --> 00:11:35,280 Speaker 5: Yeah, I mean, look, it's it's It harkens back a 232 00:11:35,320 --> 00:11:37,280 Speaker 5: little bit to the late nineties when you were basically 233 00:11:37,320 --> 00:11:40,959 Speaker 5: introducing a new technology into the system and you assumed 234 00:11:40,960 --> 00:11:43,079 Speaker 5: it forecasts really large revenue growth, but you were a 235 00:11:43,080 --> 00:11:45,440 Speaker 5: little uncertain about, you know, both the size and timing 236 00:11:45,480 --> 00:11:47,360 Speaker 5: of it. So I think what you're having is to 237 00:11:47,400 --> 00:11:50,240 Speaker 5: your point, people are compartmentalizing a little bit, right, Like 238 00:11:50,440 --> 00:11:52,640 Speaker 5: I need to have some AI exposure on let me 239 00:11:52,720 --> 00:11:54,880 Speaker 5: choose the way to do that, and then off to 240 00:11:54,920 --> 00:11:56,720 Speaker 5: the side of that, I kind of need to model 241 00:11:56,760 --> 00:11:59,080 Speaker 5: the rest of the market, you know, as a little 242 00:11:59,080 --> 00:12:01,400 Speaker 5: bit independently. So it is a challenge, but it's a 243 00:12:01,400 --> 00:12:02,840 Speaker 5: good challenge to have, right. I think it's a good 244 00:12:02,920 --> 00:12:05,640 Speaker 5: challenge to have that you have this large thematic revenue 245 00:12:05,640 --> 00:12:08,400 Speaker 5: growth impulse kind of coming through the system, and look 246 00:12:08,400 --> 00:12:10,320 Speaker 5: at this is why you know, we've kind of joked 247 00:12:10,360 --> 00:12:13,480 Speaker 5: the Nvidia earnings report in late May is priced as 248 00:12:13,559 --> 00:12:16,200 Speaker 5: as big an event as payrolls on Friday. So to 249 00:12:16,240 --> 00:12:18,000 Speaker 5: your point, it just it just knocks. 250 00:12:17,760 --> 00:12:19,000 Speaker 2: Say that again, that's important. 251 00:12:19,080 --> 00:12:21,960 Speaker 5: So if you look at S and P five hundred options, 252 00:12:22,080 --> 00:12:25,000 Speaker 5: they're pricing as much risk into the Nvidia earnings print 253 00:12:25,080 --> 00:12:27,840 Speaker 5: as they are into payrolls this Friday. So to your point, 254 00:12:27,880 --> 00:12:30,120 Speaker 5: this not only is it a big theme, it's also 255 00:12:30,160 --> 00:12:32,960 Speaker 5: an uncertain theme. And even at the SMP level, that 256 00:12:33,040 --> 00:12:34,640 Speaker 5: risk is being priced very aggressively. 257 00:12:35,320 --> 00:12:39,320 Speaker 4: So, I mean, Tom's been he's been long the Magnificent seven. 258 00:12:39,480 --> 00:12:41,439 Speaker 4: I mean, he doesn't even come into work much many 259 00:12:41,480 --> 00:12:44,080 Speaker 4: of these days. He's planning his trips to Paris and everything. 260 00:12:44,200 --> 00:12:46,559 Speaker 4: The rest of us, though, what do we do? I mean, 261 00:12:46,640 --> 00:12:49,959 Speaker 4: if we've do I look at energytoe, look at healthcare. 262 00:12:50,080 --> 00:12:52,080 Speaker 4: I mean, what are the smart people at cities saying 263 00:12:52,080 --> 00:12:52,559 Speaker 4: these days? 264 00:12:52,800 --> 00:12:54,360 Speaker 5: Yeah, I think you know, there's a couple of sectors 265 00:12:54,360 --> 00:12:56,520 Speaker 5: people were kind of sniffing around, you know, wonder's healthcare 266 00:12:56,559 --> 00:12:59,080 Speaker 5: because you know, healthcare underperformed so much last year. And 267 00:12:59,120 --> 00:13:01,240 Speaker 5: you also have the GLP one story, which is not 268 00:13:01,320 --> 00:13:03,079 Speaker 5: quite an AI theme, but it is sort of in 269 00:13:03,200 --> 00:13:04,760 Speaker 5: the same general sort. 270 00:13:04,559 --> 00:13:05,560 Speaker 2: Of category as that. 271 00:13:05,920 --> 00:13:08,520 Speaker 5: I think industrials is a big focus right now, just 272 00:13:08,559 --> 00:13:10,840 Speaker 5: because of the IRA spending that's coming through the system 273 00:13:10,840 --> 00:13:14,280 Speaker 5: that's just hitting company revenues right now, and some of 274 00:13:14,320 --> 00:13:16,640 Speaker 5: the reshoring story kind of falls into there as well. 275 00:13:16,720 --> 00:13:19,480 Speaker 5: So I think industrials and healthcare two big areas of 276 00:13:19,480 --> 00:13:21,600 Speaker 5: focus for a lot of clients. It's not just by 277 00:13:21,640 --> 00:13:24,080 Speaker 5: the sector. You know, you're choosing stocks and subtection, but 278 00:13:24,080 --> 00:13:24,760 Speaker 5: those are very important. 279 00:13:24,800 --> 00:13:28,760 Speaker 2: I'm looking at fifteen upgrades today on Amazon across Global 280 00:13:28,800 --> 00:13:31,480 Speaker 2: Wall Street, including City Group, and they're all different levels, 281 00:13:31,480 --> 00:13:34,319 Speaker 2: and it's a parle game. Where are you a year now? 282 00:13:34,360 --> 00:13:38,960 Speaker 2: On SPX? Does Stewart Kaiser have to lift your SPX 283 00:13:39,040 --> 00:13:40,520 Speaker 2: numbers simply because of tech. 284 00:13:41,400 --> 00:13:44,280 Speaker 5: Look, I think it's definitely potentially an upward lift on 285 00:13:44,800 --> 00:13:47,559 Speaker 5: the EPs number. So Scott Cronert, who runs Equity Strategy, 286 00:13:47,600 --> 00:13:49,320 Speaker 5: he's a two forty five. We're a little bit above 287 00:13:49,360 --> 00:13:51,079 Speaker 5: consensus on the EPs number. 288 00:13:50,880 --> 00:13:53,719 Speaker 2: And you're gonna nudge out higher. You're suggesting, you know, 289 00:13:53,760 --> 00:13:55,280 Speaker 2: they understand, you know, we shall see. 290 00:13:55,280 --> 00:13:55,440 Speaker 6: You know. 291 00:13:55,640 --> 00:13:57,880 Speaker 5: It looks like we're going to be consensus by more 292 00:13:57,880 --> 00:14:00,440 Speaker 5: than five percent for this quarter. We revised up census 293 00:14:00,480 --> 00:14:03,160 Speaker 5: by three percent last week. So certainly the pressure is 294 00:14:03,200 --> 00:14:04,800 Speaker 5: to the upside. I think for the average. 295 00:14:04,840 --> 00:14:07,760 Speaker 2: Can you run out Stuart Kaiser and a bloomberg red sticky? 296 00:14:08,160 --> 00:14:10,000 Speaker 2: Kaiser says two fifty from. 297 00:14:09,840 --> 00:14:11,719 Speaker 7: City group exactly? 298 00:14:12,840 --> 00:14:15,480 Speaker 4: You know city group, I mean three eighty eight grantwhich 299 00:14:15,559 --> 00:14:17,400 Speaker 4: is where I work. But the people who actually get 300 00:14:17,440 --> 00:14:20,640 Speaker 4: stuff done, or at three ninety grandish, the traders and salespeople. 301 00:14:21,160 --> 00:14:22,840 Speaker 4: What are your traders saying to you as you walk 302 00:14:22,880 --> 00:14:23,920 Speaker 4: through the floor these days? 303 00:14:24,080 --> 00:14:24,280 Speaker 3: You know? 304 00:14:24,320 --> 00:14:26,160 Speaker 5: I think, honestly, I think people have been a little 305 00:14:26,200 --> 00:14:28,000 Speaker 5: surprised at at a little bit of just the lack 306 00:14:28,040 --> 00:14:29,600 Speaker 5: of activity. The last couple of weeks. You know, the 307 00:14:29,640 --> 00:14:32,120 Speaker 5: markets have been moving, but volumes have probably been a 308 00:14:32,160 --> 00:14:34,080 Speaker 5: little lower than you might have expected. I think the 309 00:14:34,120 --> 00:14:36,440 Speaker 5: one notable thing in the last couple of weeks is 310 00:14:36,480 --> 00:14:38,360 Speaker 5: you did get a bit a bid for sort of 311 00:14:38,360 --> 00:14:41,080 Speaker 5: tail risk protection about a week week and a half ago, 312 00:14:41,200 --> 00:14:44,240 Speaker 5: so people buying call options on the vis at Tom's point. 313 00:14:44,400 --> 00:14:46,560 Speaker 5: So I think that was that was pretty notable. It's 314 00:14:46,560 --> 00:14:48,800 Speaker 5: the first time we've seen people kind of, you know, 315 00:14:48,880 --> 00:14:51,240 Speaker 5: making sure they had that tail risk protection on. 316 00:14:51,720 --> 00:14:54,400 Speaker 2: I can just say, folks, it's fascinating. Right now, we're 317 00:14:54,400 --> 00:14:57,320 Speaker 2: gonna have a lot of funds. May Bloomberg surveying on 318 00:14:57,400 --> 00:15:00,560 Speaker 2: Stuart Kaiser, thank you, thank you so much for coming in. 319 00:15:00,640 --> 00:15:07,520 Speaker 2: He's a city group. Sweetey demanded we have to talk paramount. 320 00:15:07,520 --> 00:15:09,880 Speaker 2: We have talk media, the future of TV, and that 321 00:15:09,920 --> 00:15:13,160 Speaker 2: can only mean Brian Weezer yep of Madison and Wallas. 322 00:15:13,240 --> 00:15:16,520 Speaker 2: Let me get one question in here before Sweeney takes over. Brian, 323 00:15:16,640 --> 00:15:18,440 Speaker 2: what is Sherry Redstone waiting for? 324 00:15:20,640 --> 00:15:24,480 Speaker 1: I I don't know. I mean, here, here's the thing. 325 00:15:24,600 --> 00:15:27,480 Speaker 1: There's this fine balance between making the most of her 326 00:15:27,680 --> 00:15:32,800 Speaker 1: personal position or her family's position, and being mindful of 327 00:15:32,840 --> 00:15:36,640 Speaker 1: any legal obligations that she has, and then there's any 328 00:15:37,040 --> 00:15:40,400 Speaker 1: sentimental subjective preferences that she has. And I think it's 329 00:15:40,600 --> 00:15:43,800 Speaker 1: it's what makes it so complicated. It's not just about 330 00:15:43,920 --> 00:15:46,080 Speaker 1: the highest enterprise value. 331 00:15:47,000 --> 00:15:50,080 Speaker 4: So, Brian, it kind of goes to the bigger picture here. 332 00:15:50,160 --> 00:15:51,760 Speaker 4: I mean, some of the restand might look like the 333 00:15:51,800 --> 00:15:54,240 Speaker 4: smartest person in the room because he sold out years 334 00:15:54,280 --> 00:15:58,600 Speaker 4: ago before the media business, you know, the deterioration, you know, 335 00:15:58,680 --> 00:15:59,840 Speaker 4: really accelerated here. 336 00:16:00,360 --> 00:16:02,080 Speaker 1: Well you know, you could say he didn't sell out, 337 00:16:02,120 --> 00:16:03,280 Speaker 1: you exited the business. 338 00:16:03,640 --> 00:16:08,360 Speaker 4: Yep, yep, exactly, so you never sold Yeah. So, Brian, 339 00:16:08,400 --> 00:16:10,320 Speaker 4: what do you think here? I mean, what's the future here? 340 00:16:10,640 --> 00:16:14,160 Speaker 4: How are you thinking about some of these traditional advertising 341 00:16:14,280 --> 00:16:19,480 Speaker 4: driven dependent companies, you know, like the Disney's, like the Paramounts, 342 00:16:19,560 --> 00:16:23,160 Speaker 4: like the Warner Brothers Discoveries, as they transition to streaming, 343 00:16:23,640 --> 00:16:24,480 Speaker 4: are they going to make it? 344 00:16:25,840 --> 00:16:28,120 Speaker 1: I mean, here's the thing. If they keep doing what 345 00:16:28,200 --> 00:16:31,200 Speaker 1: they have always done, they'll get what they've always gotten, 346 00:16:31,360 --> 00:16:34,280 Speaker 1: at least in recent years, which is to say, a 347 00:16:34,480 --> 00:16:38,360 Speaker 1: negative trajectory. I would argue that there is still lots 348 00:16:38,360 --> 00:16:42,840 Speaker 1: of opportunity ahead for any of these companies paramount otherwise, 349 00:16:43,280 --> 00:16:45,400 Speaker 1: as long as they invest in the right direction for 350 00:16:45,440 --> 00:16:49,400 Speaker 1: the future, and basically none of them are. That doesn't 351 00:16:49,440 --> 00:16:52,840 Speaker 1: mean that they can't, but I've argued that, you know, 352 00:16:53,120 --> 00:16:56,720 Speaker 1: certainly for the ad supported platforms, the pathway forward is 353 00:16:56,760 --> 00:17:00,320 Speaker 1: to become a platform, meaning you got to you got 354 00:17:00,360 --> 00:17:03,400 Speaker 1: to eliminate this idea of being a television based company. 355 00:17:03,480 --> 00:17:06,440 Speaker 2: Okay, well, I mean this is so inflammatory what you're saying, Brian, 356 00:17:06,440 --> 00:17:08,600 Speaker 2: I'm going to cut you off. For example, I just 357 00:17:08,640 --> 00:17:12,240 Speaker 2: saw in Variety there's five pilots this season of across 358 00:17:12,320 --> 00:17:15,200 Speaker 2: seven networks. Two of the networks don't even have any pilots. 359 00:17:15,520 --> 00:17:18,680 Speaker 2: What is the Weezer prescription to save streaming? 360 00:17:20,200 --> 00:17:24,280 Speaker 1: Well, I think that subscription based pricing is one thing. 361 00:17:24,320 --> 00:17:27,080 Speaker 1: There's a lot of room for pricing increases, that's one thing. 362 00:17:27,480 --> 00:17:29,560 Speaker 1: There has to be a lot of investment in programming 363 00:17:29,600 --> 00:17:33,360 Speaker 1: and good programming too, right, not just cheap programming. So 364 00:17:33,400 --> 00:17:35,720 Speaker 1: that's part of it. I think that actually they this 365 00:17:35,800 --> 00:17:39,080 Speaker 1: is going to be a little bit of a different view, 366 00:17:39,440 --> 00:17:42,119 Speaker 1: but I think that if they actually kept investing and 367 00:17:42,160 --> 00:17:45,600 Speaker 1: didn't put the brakes on it, if they actually tried 368 00:17:45,640 --> 00:17:49,680 Speaker 1: to become a global platform, if they doubled their spending 369 00:17:49,840 --> 00:17:52,800 Speaker 1: on streaming, programming, for example, and made sure that they 370 00:17:53,080 --> 00:17:56,080 Speaker 1: were a more meaningful platform. They would have had lift 371 00:17:56,080 --> 00:17:58,240 Speaker 1: off trajectory. I think in a way that would have 372 00:17:58,520 --> 00:18:02,160 Speaker 1: helped Sustand the business problem is that it's never going 373 00:18:02,200 --> 00:18:04,919 Speaker 1: to be as profitable as the business is replacing. And 374 00:18:04,960 --> 00:18:08,040 Speaker 1: I don't think that most companies understood that that you're 375 00:18:08,080 --> 00:18:09,840 Speaker 1: going from what would have been a thirty forty percent 376 00:18:09,880 --> 00:18:11,919 Speaker 1: margin business to one that's more like a ten or 377 00:18:11,920 --> 00:18:14,960 Speaker 1: twenty percent margin business. How do you make up for that? 378 00:18:15,560 --> 00:18:18,760 Speaker 1: You make sure you're two or three times bigger, and 379 00:18:18,800 --> 00:18:22,840 Speaker 1: it makes sure that you apply your platform globally. You 380 00:18:23,920 --> 00:18:26,719 Speaker 1: limit how much you are giving up your economics to 381 00:18:26,760 --> 00:18:31,520 Speaker 1: other partners, which Paramount was doing certainly in much of Europe. 382 00:18:31,640 --> 00:18:35,080 Speaker 1: They kind of underinvested elsewhere before kind of throwing in 383 00:18:35,080 --> 00:18:37,040 Speaker 1: the towel with the sky show time. 384 00:18:38,400 --> 00:18:42,399 Speaker 4: So, Brian, what's the just in terms of total ad spend? 385 00:18:42,920 --> 00:18:44,880 Speaker 4: Give us a sense of kind of is there enough 386 00:18:44,920 --> 00:18:48,200 Speaker 4: ad dollars to support broadcasting cable television as we all 387 00:18:48,240 --> 00:18:50,399 Speaker 4: know it, as we all grew up with, or is 388 00:18:50,440 --> 00:18:52,160 Speaker 4: it all going digital? 389 00:18:53,080 --> 00:18:56,000 Speaker 1: Well, this is where I'm going. If you're competing and 390 00:18:56,040 --> 00:18:58,639 Speaker 1: we're talking about two kind of parallel but separate things. 391 00:18:58,680 --> 00:19:01,200 Speaker 1: One is subscription to get a consumers to spend money 392 00:19:01,200 --> 00:19:04,040 Speaker 1: on subscriptions. Right in the United States, there's about one 393 00:19:04,119 --> 00:19:07,440 Speaker 1: hundred and forty billion dollars a year spent on subscriptions, 394 00:19:07,880 --> 00:19:12,600 Speaker 1: video and various forms. Right streamers right now are only 395 00:19:12,760 --> 00:19:15,679 Speaker 1: tapping in about thirty five forty billion dollars of that. 396 00:19:15,840 --> 00:19:19,560 Speaker 1: There's still a lot of money to be gained. I'm 397 00:19:19,600 --> 00:19:20,920 Speaker 1: buildings brilliant. 398 00:19:20,960 --> 00:19:23,280 Speaker 2: And then we have such a respect for Brian Weezer 399 00:19:23,320 --> 00:19:27,520 Speaker 2: going back to time. Shut up, Facebook will be successful, Brian. 400 00:19:27,960 --> 00:19:31,280 Speaker 2: What's going on at the lunch tables in Hollywood? They're 401 00:19:31,280 --> 00:19:34,399 Speaker 2: all sitting there with their perfect water for some perfect 402 00:19:34,480 --> 00:19:38,159 Speaker 2: well in New Zealand. Okay, great, What are they actually 403 00:19:38,200 --> 00:19:40,879 Speaker 2: talking about if they're so far off the mark of 404 00:19:40,920 --> 00:19:42,400 Speaker 2: the economic opportunity? 405 00:19:43,680 --> 00:19:45,840 Speaker 1: I honestly don't know. I'm not at those tables. 406 00:19:45,880 --> 00:19:46,520 Speaker 2: I guess. 407 00:19:48,280 --> 00:19:51,120 Speaker 1: No. But I think that there's this an inherent conservitism. 408 00:19:51,160 --> 00:19:54,600 Speaker 1: It's true in most organizations right like, there's a handful 409 00:19:54,640 --> 00:19:58,280 Speaker 1: of people who can make decisions to make radical pivots 410 00:19:58,640 --> 00:20:02,639 Speaker 1: or meaningful investments or bet the farm kind of actions. 411 00:20:03,119 --> 00:20:06,000 Speaker 1: And those people would be the likes of Sherry Redstone right. 412 00:20:06,359 --> 00:20:08,520 Speaker 1: I actually think that Bob Backas was doing the best 413 00:20:08,520 --> 00:20:10,400 Speaker 1: he could within the constraints that he had to work 414 00:20:10,440 --> 00:20:14,480 Speaker 1: with from everything I know, and I think that the 415 00:20:14,520 --> 00:20:16,040 Speaker 1: problem is there are a small number of people who 416 00:20:16,040 --> 00:20:17,359 Speaker 1: can do it, and then they have to be able 417 00:20:17,400 --> 00:20:20,480 Speaker 1: to persuade investors of their plan, and most aren't willing 418 00:20:20,520 --> 00:20:22,960 Speaker 1: to do that. The thing investors need their short term returns. 419 00:20:23,320 --> 00:20:25,760 Speaker 1: Investors need short term returns when they're not given a 420 00:20:25,840 --> 00:20:29,320 Speaker 1: persuasive reason to believe otherwise. This is something that most 421 00:20:29,320 --> 00:20:32,400 Speaker 1: companies at the CEO and chairman level do not fully understand. 422 00:20:32,480 --> 00:20:34,639 Speaker 2: Mike, I mean it was a Paul. It comes out 423 00:20:34,680 --> 00:20:38,000 Speaker 2: of the heart of the matter. It Michael's in Los Angeles, 424 00:20:38,119 --> 00:20:42,240 Speaker 2: in Santa Monica. They're over there salmon and caviar capeccio 425 00:20:42,320 --> 00:20:46,400 Speaker 2: at twenty seven dollars. What are they talking about? Shouldn't 426 00:20:46,440 --> 00:20:47,760 Speaker 2: they be like in a full panic? 427 00:20:47,840 --> 00:20:50,920 Speaker 4: Pol I think you know the question for and Brian 428 00:20:51,000 --> 00:20:53,359 Speaker 4: knows this very well, is trying to kind of replace 429 00:20:53,440 --> 00:20:56,639 Speaker 4: that traditional distribution model of cable and satellite and all 430 00:20:56,680 --> 00:20:59,960 Speaker 4: that great money that was associated with their subscriptions with streaming. 431 00:21:00,160 --> 00:21:04,120 Speaker 4: So Brian, as you step back here, you think about 432 00:21:04,119 --> 00:21:08,240 Speaker 4: the paramounts, the Warner Brothers discoveries. I don't know, maybe 433 00:21:08,240 --> 00:21:11,399 Speaker 4: even Comcasts. I don't know who kinda is going to 434 00:21:11,440 --> 00:21:14,359 Speaker 4: be standing here five years from now, other than Netflix 435 00:21:14,480 --> 00:21:16,200 Speaker 4: and maybe Disney. 436 00:21:17,080 --> 00:21:19,679 Speaker 1: Well, Comcasts and Disney are definitely well positioned because they 437 00:21:19,720 --> 00:21:22,320 Speaker 1: do have so many other revenue rooms. They can sustain 438 00:21:22,440 --> 00:21:26,040 Speaker 1: and support this transition to a much less profitable industry, 439 00:21:26,200 --> 00:21:28,960 Speaker 1: right and that will buy them time. And it's nothing 440 00:21:28,960 --> 00:21:31,720 Speaker 1: else you can grow when you take share of a 441 00:21:31,760 --> 00:21:35,560 Speaker 1: shrinking business, and so that's all good for them. I 442 00:21:35,600 --> 00:21:39,080 Speaker 1: think that the industry level opportunity, though, is on the 443 00:21:39,119 --> 00:21:43,920 Speaker 1: subscription side, invests more heavily, not less heavily, in content. 444 00:21:44,240 --> 00:21:47,359 Speaker 1: You can build a bigger business and do it globally 445 00:21:47,400 --> 00:21:50,320 Speaker 1: because there are real efficiencies. Netflix has taught us this, 446 00:21:50,480 --> 00:21:54,480 Speaker 1: haven't they? Other than Amazon and out there, everyone else 447 00:21:54,520 --> 00:21:58,359 Speaker 1: has given up. Okay, on the advertising side, the fact 448 00:21:58,400 --> 00:22:02,159 Speaker 1: that it's video, it's professional premium video doesn't matter like 449 00:22:02,200 --> 00:22:05,119 Speaker 1: it used to. It just doesn't matter. And here's what 450 00:22:05,240 --> 00:22:10,040 Speaker 1: I'm saying that that the today's studio owners of networks 451 00:22:10,080 --> 00:22:13,360 Speaker 1: need to think differently about their advertising platforms. They need 452 00:22:13,359 --> 00:22:15,879 Speaker 1: to be indifferent about the fact that they've got professional video. 453 00:22:16,000 --> 00:22:17,879 Speaker 1: They need to be able to embrace the likes of 454 00:22:18,000 --> 00:22:20,720 Speaker 1: YouTube and user generated contry. Embrace. 455 00:22:21,440 --> 00:22:23,400 Speaker 2: We got to leave it there, Brian. Thank you so much, 456 00:22:23,440 --> 00:22:27,159 Speaker 2: Brian Weizer there with Madison and Walls. That's exactly what 457 00:22:27,280 --> 00:22:30,480 Speaker 2: I heard from Mark Thompson in the ft interview from cmm. 458 00:22:40,680 --> 00:22:40,720 Speaker 1: D. 459 00:22:41,000 --> 00:22:43,480 Speaker 2: Look at the front pages, particularly on a fed day. 460 00:22:43,640 --> 00:22:46,080 Speaker 2: I looked at Lisa's newspapers today. I get a preview 461 00:22:46,160 --> 00:22:49,560 Speaker 2: from her people and just wow, I mean, I mean, 462 00:22:50,200 --> 00:22:51,920 Speaker 2: there's like eighteen stories to pick. 463 00:22:52,080 --> 00:22:55,320 Speaker 7: There's a staff behind this. I'm telling you staff one. 464 00:22:55,800 --> 00:22:58,320 Speaker 7: All right, we'll start the Wall Street Journal. It has 465 00:22:58,359 --> 00:22:59,119 Speaker 7: an interesting story. 466 00:22:59,119 --> 00:23:02,919 Speaker 6: Americans divide their food shopping among different stores to save money, 467 00:23:02,960 --> 00:23:06,959 Speaker 6: consumers making eight percent more trips to different stores because 468 00:23:07,119 --> 00:23:08,280 Speaker 6: that's a big part of their budget. 469 00:23:08,320 --> 00:23:09,480 Speaker 2: Right. Brother used to do this. 470 00:23:09,640 --> 00:23:10,800 Speaker 7: I still do that. 471 00:23:11,760 --> 00:23:15,160 Speaker 6: I go to the farmers market for all my produce. Okay, 472 00:23:15,200 --> 00:23:16,639 Speaker 6: so because it's cheaper to get. 473 00:23:17,240 --> 00:23:18,240 Speaker 7: A farmer's market, it does. 474 00:23:18,320 --> 00:23:19,000 Speaker 2: Okay, there you go. 475 00:23:19,080 --> 00:23:21,120 Speaker 7: Yeah, So I go to the farmers market for the produce. 476 00:23:21,400 --> 00:23:23,679 Speaker 6: Then I get, you know, things I need here and 477 00:23:23,720 --> 00:23:25,159 Speaker 6: there at you know, the local town. 478 00:23:25,119 --> 00:23:27,120 Speaker 7: Supermarket, and then I go to costco for the big 479 00:23:27,160 --> 00:23:29,359 Speaker 7: stuff that I can just save in the long haul. 480 00:23:29,520 --> 00:23:31,840 Speaker 2: How much save at the farmers market? 481 00:23:32,160 --> 00:23:33,080 Speaker 7: Oh, significantly? 482 00:23:33,119 --> 00:23:36,159 Speaker 6: Sometimes half the price half really yeah, yeah, no, it's 483 00:23:36,200 --> 00:23:36,800 Speaker 6: a big difference. 484 00:23:37,320 --> 00:23:38,720 Speaker 2: Oranges half the price. 485 00:23:38,560 --> 00:23:40,280 Speaker 7: Strawberries, berries, all the berries. 486 00:23:40,520 --> 00:23:42,520 Speaker 4: The farmer's market in my town's more of a social thing, 487 00:23:42,800 --> 00:23:43,080 Speaker 4: kind of. 488 00:23:44,920 --> 00:23:49,480 Speaker 2: Exactly. Show up. Here's the difference, folks. Lisa is out 489 00:23:49,520 --> 00:23:54,240 Speaker 2: there with bags of berries. I have my good friend 490 00:23:54,280 --> 00:23:57,360 Speaker 2: Bob in Washington. It's all he eats is berries. Yeah, 491 00:23:57,440 --> 00:24:01,360 Speaker 2: and that's all right, Lisa, like for you gats of berries. 492 00:24:01,480 --> 00:24:03,280 Speaker 4: Right, we did weed to go there and get our 493 00:24:03,320 --> 00:24:05,560 Speaker 4: apple cier for the kids and walk around world. 494 00:24:05,400 --> 00:24:10,240 Speaker 2: Where Paul lives. A farmer's market is a bunch of redovers, 495 00:24:10,880 --> 00:24:12,040 Speaker 2: the giants plates. 496 00:24:12,880 --> 00:24:15,080 Speaker 6: It saves a bunch of money. I'm telling you, it 497 00:24:15,200 --> 00:24:18,119 Speaker 6: gets tight. So the next one is from the Financial Times. 498 00:24:18,200 --> 00:24:20,679 Speaker 6: Fires are actually looking to cut out that industry middleman 499 00:24:20,720 --> 00:24:23,800 Speaker 6: who wants to sell some of its medicine straight to consumers. 500 00:24:24,080 --> 00:24:27,120 Speaker 6: So it's developing this online platform you can order medicine 501 00:24:27,160 --> 00:24:29,439 Speaker 6: like pack Slovid, a migrating nasal spray. 502 00:24:29,800 --> 00:24:31,200 Speaker 7: It'll launch later this year. 503 00:24:31,320 --> 00:24:35,040 Speaker 6: So it's connecting customers with telehealth consultants to prescribe it, 504 00:24:35,119 --> 00:24:37,520 Speaker 6: and then a drug dispensing partner who's going to ship 505 00:24:37,800 --> 00:24:40,000 Speaker 6: out the prescription. But Eli Lilly, I mean, they did 506 00:24:40,000 --> 00:24:43,000 Speaker 6: something similar earlier this year, So they're just trying to 507 00:24:43,080 --> 00:24:44,639 Speaker 6: kind of cut out that middleman. 508 00:24:44,400 --> 00:24:46,440 Speaker 4: And hopefully hopefully at a lower price. 509 00:24:49,040 --> 00:24:53,439 Speaker 2: First of all, President Biden and former President Trump both 510 00:24:53,560 --> 00:24:56,239 Speaker 2: wanted to lower prices. I mean, Donald Trump made a 511 00:24:56,280 --> 00:24:59,719 Speaker 2: big deal about this. Are we actually going to finally 512 00:24:59,760 --> 00:25:03,280 Speaker 2: get prices like eighteen other countries? 513 00:25:03,760 --> 00:25:04,679 Speaker 1: Oh god, I don't know. 514 00:25:04,800 --> 00:25:05,480 Speaker 7: That's that is. 515 00:25:05,560 --> 00:25:06,600 Speaker 2: I mean, I'll tell you what. 516 00:25:06,760 --> 00:25:09,480 Speaker 4: Here's one issue that I had. I will never profess 517 00:25:09,560 --> 00:25:11,800 Speaker 4: any knowledge of healthcare economics. 518 00:25:12,080 --> 00:25:13,040 Speaker 7: I just don't understand. 519 00:25:13,240 --> 00:25:15,119 Speaker 4: I mean, you can get a PhD. 520 00:25:14,680 --> 00:25:18,160 Speaker 2: In that you can be Reinhardt. It was very generous 521 00:25:18,200 --> 00:25:20,280 Speaker 2: to us years ago with the lady Ouve Reinhart. 522 00:25:20,320 --> 00:25:21,199 Speaker 5: And who pays for it. 523 00:25:21,200 --> 00:25:24,320 Speaker 2: It's it's a it's a mystery. Yeah, that was depressing. 524 00:25:25,200 --> 00:25:28,119 Speaker 6: What's well, you know you can also get cheaper overseas 525 00:25:28,200 --> 00:25:31,160 Speaker 6: is the weight loss drugs. That's another thing that leads 526 00:25:31,160 --> 00:25:32,720 Speaker 6: to our next story. This is from the New York 527 00:25:32,960 --> 00:25:37,760 Speaker 6: This is yes, Okay, so weight loss drugs are very popular, 528 00:25:37,800 --> 00:25:41,880 Speaker 6: but the stress around social etiquette that is becoming an issue, 529 00:25:41,920 --> 00:25:43,680 Speaker 6: like is it okay to ask. 530 00:25:43,520 --> 00:25:46,480 Speaker 7: Someone if they're on weight loss drugs? Or is it rude? 531 00:25:46,760 --> 00:25:49,880 Speaker 6: You know, that's the question being going around Barbara Streiss, 532 00:25:49,880 --> 00:25:52,920 Speaker 6: and she sparked a debate. She was posting on commenting 533 00:25:52,960 --> 00:25:56,360 Speaker 6: on Melissa McCarthy, the actress's picture, she said, are you 534 00:25:56,480 --> 00:25:57,360 Speaker 6: on ozembek? 535 00:25:58,240 --> 00:26:00,639 Speaker 7: And people got offended by the like, how can you 536 00:26:00,680 --> 00:26:01,119 Speaker 7: ask you know? 537 00:26:01,240 --> 00:26:02,640 Speaker 4: Or something like that information. 538 00:26:02,680 --> 00:26:05,520 Speaker 7: I guess that's what they're saying. It's that that the 539 00:26:05,520 --> 00:26:06,520 Speaker 7: borderline now like. 540 00:26:06,480 --> 00:26:08,200 Speaker 4: Oh you look great, he lost a lot of weight, 541 00:26:08,240 --> 00:26:10,639 Speaker 4: good for you, And I'll just leave it at that. I guess, yeah, okay, 542 00:26:10,960 --> 00:26:14,439 Speaker 4: no one's and I've actually I've actually experienced this with 543 00:26:14,480 --> 00:26:18,920 Speaker 4: an acquaintance and I was told, do not mention the three, 544 00:26:19,480 --> 00:26:21,800 Speaker 4: just say congratulations on your way lost, because. 545 00:26:21,600 --> 00:26:24,760 Speaker 7: Then you're suggesting what they need, your help they need. 546 00:26:25,880 --> 00:26:28,760 Speaker 2: It's all news, to be honest. John Farrell was way 547 00:26:28,800 --> 00:26:29,520 Speaker 2: out front on this. 548 00:26:29,840 --> 00:26:32,080 Speaker 4: I was like, look at it, John, he's got like 549 00:26:32,200 --> 00:26:36,600 Speaker 4: nobody that he doesn't he's in the gym like at. 550 00:26:36,480 --> 00:26:39,560 Speaker 2: Ten ten am. But you know, Pharaoh was way out 551 00:26:39,600 --> 00:26:42,359 Speaker 2: front on this and I look at the whole thing, 552 00:26:43,480 --> 00:26:46,200 Speaker 2: and I go, I can see if they're on no 553 00:26:46,400 --> 00:26:47,320 Speaker 2: zembic at leasta? 554 00:26:47,359 --> 00:26:49,359 Speaker 7: Can you tell in the faith? 555 00:26:49,400 --> 00:26:50,920 Speaker 6: I mean my aunt's on it. 556 00:26:51,000 --> 00:26:53,120 Speaker 7: She dropped like forty pounds. Wow, I mean you could 557 00:26:53,119 --> 00:26:54,040 Speaker 7: tell right away. 558 00:26:55,160 --> 00:26:57,880 Speaker 6: But it's that question, like I knew she lost weight, 559 00:26:57,920 --> 00:26:59,760 Speaker 6: but I didn't say, hey, are you want to back? 560 00:27:00,119 --> 00:27:02,800 Speaker 7: You know, it's kind of like she suggested it to me. 561 00:27:05,280 --> 00:27:06,639 Speaker 2: Yes. Yes. 562 00:27:06,680 --> 00:27:10,400 Speaker 4: And actually what we've learned is they will only put 563 00:27:10,440 --> 00:27:12,840 Speaker 4: you on it, get you started when they feel like 564 00:27:12,880 --> 00:27:14,919 Speaker 4: they can always have your refills done. 565 00:27:15,080 --> 00:27:17,480 Speaker 2: So it's a supply issue. Once they get feel comfortable 566 00:27:17,400 --> 00:27:18,679 Speaker 2: to supply, they'll put. 567 00:27:18,560 --> 00:27:19,679 Speaker 4: A new person on it. 568 00:27:19,720 --> 00:27:21,760 Speaker 2: And that seems to be how that was depressing. 569 00:27:22,600 --> 00:27:27,600 Speaker 6: Here's another one that the Paris restaurants, yes, the tourists 570 00:27:28,040 --> 00:27:31,280 Speaker 6: ahead of the twenty twenty four Olympics for tips. Okay, 571 00:27:31,320 --> 00:27:34,080 Speaker 6: because tipping culture in France, as you know, it's different 572 00:27:34,080 --> 00:27:36,920 Speaker 6: than in the US. Okay, they have a legally mandated 573 00:27:36,920 --> 00:27:38,280 Speaker 6: fifteen percent service charge. 574 00:27:39,119 --> 00:27:41,240 Speaker 7: Legally mandated what fifteen. 575 00:27:40,840 --> 00:27:44,080 Speaker 6: Percent service charge? Menu prices often hire to cover it. 576 00:27:44,080 --> 00:27:46,520 Speaker 6: It's called a poor bra. 577 00:27:47,280 --> 00:27:50,600 Speaker 7: How do you say, Tom, help me with this school bra? 578 00:27:51,040 --> 00:27:51,560 Speaker 7: In French. 579 00:27:51,760 --> 00:27:53,160 Speaker 2: Okay, it's really interesting. 580 00:27:53,240 --> 00:27:54,760 Speaker 7: It's a different tipping culture. 581 00:27:54,840 --> 00:27:57,920 Speaker 6: But the restaurant tours are playing into the international guest 582 00:27:58,040 --> 00:28:00,720 Speaker 6: kind of ignorance by them. 583 00:28:00,600 --> 00:28:02,920 Speaker 7: To pay like they would in the States. So they're good. 584 00:28:03,400 --> 00:28:06,320 Speaker 6: You may start to see like the tablets where they 585 00:28:06,320 --> 00:28:09,280 Speaker 6: flip it around and it gives you that little percentage, 586 00:28:09,520 --> 00:28:11,760 Speaker 6: even though the tipping culture is different in France. 587 00:28:11,960 --> 00:28:13,879 Speaker 4: Obviously, the first thing I learned when I moved to 588 00:28:14,200 --> 00:28:16,680 Speaker 4: London in eighty seven no tipping. 589 00:28:16,960 --> 00:28:19,760 Speaker 2: It took me weeks to fit out. My take on 590 00:28:19,840 --> 00:28:23,680 Speaker 2: this is they love Americans because most Americans tip over 591 00:28:23,720 --> 00:28:26,720 Speaker 2: there like they tip in America, which the French love. 592 00:28:27,520 --> 00:28:31,760 Speaker 2: But the worst I get upset in London. The way 593 00:28:31,800 --> 00:28:34,520 Speaker 2: they have it set up in London is detrimental to 594 00:28:34,560 --> 00:28:39,960 Speaker 2: the workers. It's not fair to no, no, it's terrible. 595 00:28:40,000 --> 00:28:43,800 Speaker 2: They take change on the bar. You know, nobody has 596 00:28:43,880 --> 00:28:48,520 Speaker 2: changed it, nobody, nobody cares money anymore, and it's really unfair. 597 00:28:48,560 --> 00:28:51,760 Speaker 2: In London and in Paris. You know my experiences, they 598 00:28:51,800 --> 00:28:55,880 Speaker 2: love Americans like cab drivers will fight to take the Americans, 599 00:28:56,240 --> 00:28:58,360 Speaker 2: not that they could ever tell I was American. 600 00:29:00,480 --> 00:29:03,400 Speaker 4: And Tom Messi's standing tables at all the best restaurants, Tarkers, 601 00:29:03,440 --> 00:29:05,880 Speaker 4: you know, so you know he's got his people over. 602 00:29:05,720 --> 00:29:09,120 Speaker 2: There, Starbucks, Late book to start. They know who I am, 603 00:29:09,560 --> 00:29:13,160 Speaker 2: Lisa Matteo on newspapers. Thank you so much, greatly appreciate 604 00:29:13,240 --> 00:29:16,840 Speaker 2: that this is the Bloomberg Surveillance Podcast, bringing you the 605 00:29:16,880 --> 00:29:21,600 Speaker 2: best in economics, finance, investment, and international relations. You can 606 00:29:21,640 --> 00:29:25,320 Speaker 2: also watch the show live on YouTube. Visit the Bloomberg 607 00:29:25,440 --> 00:29:30,000 Speaker 2: Podcast channel on YouTube to see the show weekday mornings 608 00:29:30,000 --> 00:29:33,280 Speaker 2: from seven to ten am Eastern from our global headquarters 609 00:29:33,400 --> 00:29:37,280 Speaker 2: in New York City. Subscribe to the podcast on Apple, Spotify, 610 00:29:37,600 --> 00:29:41,160 Speaker 2: or anywhere else you listen, and always on Bloomberg Radio, 611 00:29:41,360 --> 00:29:44,560 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app.