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Speaker 1: Good morning, and welcome to the Bloomberg Daybreak Asia podcast.

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Speaker 1: I'm Doug Prisner. Here are the stories we're following today.

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Speaker 1: Joining us now is Michael Lansburg. He is the CIO

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Speaker 1: at Lansburg Bennett Private Wealth Management. Joining us from the

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Speaker 1: west coast of Florida. Michael, thanks for making time. Obviously,

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Speaker 1: this is going to be a very critical week for markets.

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Speaker 1: We've got the election and elections that will determine the

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Speaker 1: control of Congress. We've got a FED meeting and a

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Speaker 1: list of key earnings. One of the things that's interesting

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Speaker 1: is that typically the FED two day meeting will wrap

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Speaker 1: on a Wednesday, but because of the election this month,

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Speaker 1: we won't have a FED decision until Thursday. And I

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Speaker 1: think we can agree that the market right now is

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Speaker 1: struggling with whether the FED will slow down or speed

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Speaker 1: up the pace of rate cuts.

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Speaker 2: What say you, yeah, I would agree.

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Speaker 3: I think actually that Fed's going to continue to probably

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Speaker 3: cut twenty five basis points in November, but I really

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Speaker 3: think that December and further cuts are are really in

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Speaker 3: question here. Given kind of where we are, I think

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Speaker 3: you're going to start to see you and we did

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Speaker 3: a little bit last week A reacceleration of inflation.

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Speaker 2: I think that's going to get worse. I think the

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Speaker 2: Federal bey on.

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Speaker 3: The sidelines, you know, probably after November at least until

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Speaker 3: something really starts to change.

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Speaker 1: One of the things that's been striking is the volatility

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Speaker 1: in the bond market. And I'm not sure of the

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Speaker 1: message here. Do you have a sense of what the

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Speaker 1: bond market may be telegraphing.

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Speaker 3: I would tell you the bomb market has moved, you know,

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Speaker 3: more the moving indexes what we look at an amazing

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Speaker 3: amount of period of time and you know, thirty days,

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Speaker 3: and I think, really what it's coming to and I

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Speaker 3: think i'd like it. Also with gold is I think

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Speaker 3: the bomb market has figured out that you know, inflation,

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Speaker 3: you know, is going to be back, and I think

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Speaker 3: gold has indicated that.

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Speaker 2: I think the dollar as well. And I think that

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Speaker 2: the rest of the market is hoping for more cuts.

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Speaker 3: And I think the bomb market historically a little smarter

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Speaker 3: than the equity market.

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Speaker 2: It's kind of said, yeah, I don't think this.

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Speaker 3: Is going to happen, as we've had a huge move

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Speaker 3: basically since the late late part of September.

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Speaker 2: Really is how race is backed up when the Fed cuts.

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Speaker 1: Does that make the equity market especially vulnerable.

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Speaker 2: I think it does.

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Speaker 3: I think the equity market wants to get more of

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Speaker 3: their cuts. I think cheap, cheap, you know, cheap money

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Speaker 3: has been good for equity markets for a long time.

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Speaker 2: I think they like it when it.

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Speaker 3: Gets cut, and I think a pause is not going

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Speaker 3: to be a great thing again.

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Speaker 2: I don't think you're going to see that in November.

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Speaker 3: I think you get the cut, But I think December on,

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Speaker 3: I think people are gonna have to start looking at

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Speaker 3: saying what's the bomb market telling us? And the bomb

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Speaker 3: market's telling us there's concerns about inflation, there may be

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Speaker 3: concerns about growth, and maybe we're going to see, you know,

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Speaker 3: the Fed be really more data dependent and seeing where

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Speaker 3: that goes over a few months.

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Speaker 1: So the equity market state side got some juice last Friday.

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Speaker 1: We had Amazon jumping about six percent, some strong results there,

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Speaker 1: Intel amazingly up nearly eight percent of bullish outlook from

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Speaker 1: the company. And then if you look at what happened

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Speaker 1: in the energy complex, both Exxon Mobile and Chevron beat.

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Speaker 1: Where are we in the earning cycle right now? And

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Speaker 1: how do you think we're going to look at the

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Speaker 1: third quarter results.

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Speaker 3: Overall, I think, you know, I think the S and

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Speaker 3: P five hundred will be up single digits. You know,

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Speaker 3: let's say, you know, seventy eight percent. I think obviously

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Speaker 3: NASTAC faster growers will be up more. We really focus on,

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Speaker 3: you know, kind of year over year numbers. I don't

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Speaker 3: really look at the expectations as much as I look

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Speaker 3: at what the actual printed number is versus what the

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Speaker 3: printed number was. And I think you're seeing in AI Land,

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Speaker 3: for example, there's some companies that are really going to

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Speaker 3: make money in this space. I think it all bodes

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Speaker 3: well for in videos of numbers in three weeks.

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Speaker 2: Is these hyper.

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Speaker 3: Scalers are spending a lot of money, historic amounts of

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Speaker 3: you know, R and D if you rule in CAPEC

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Speaker 3: spending in the AI space, it really has become almost

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Speaker 3: an arms race in AI and obviously with in video

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Speaker 3: being being that big winner. I do also think there's

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Speaker 3: some places that are going to see earnings growth that

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Speaker 3: aren't simply AI. And I think the energy complex is

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Speaker 3: one that we've liked because it has landed so much

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Speaker 3: over the last twelve months.

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Speaker 2: It's the worst performing sector.

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Speaker 3: I think you always want to have a little bit

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Speaker 3: of an eyeing towards you know, what has underperformed, Are

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Speaker 3: there earning still healthy there, and.

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Speaker 2: There's no excitement in the space.

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Speaker 3: That's probably a place to put a couple of dollars

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Speaker 3: simply because there is not a lot of energy and

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Speaker 3: no new punt intended in the energy complex or no excitement.

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Speaker 2: I think that makes some sense to have some money there.

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Speaker 1: Michael, I'm sure that you're taking a lot of questions

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Speaker 1: from clients about the impact of the impending election on

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Speaker 1: financial markets. Give me a sense of what you're saying

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Speaker 1: to them, both on the equity side and on the

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Speaker 1: fixed income side as well.

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Speaker 3: I think ultimately, you know, we tell clients all the time,

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Speaker 3: earnings drive stock prices in the medium.

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Speaker 2: And longer term. It's really what we want to focus.

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Speaker 3: The short term swings and kind of the back and

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Speaker 3: forth whipsaws that you see are really tough to kind

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Speaker 3: of game.

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Speaker 2: We did actually a number, We got some analysis.

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Speaker 3: We went back to the Eisenhower administration and looked at

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Speaker 3: Republican administrations and Democratic administrations. I told clients kip us

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Speaker 3: about an annual one percent return difference over that period

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Speaker 3: of time. So for people to get really really crazy

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Speaker 3: about it as a long term investor, does not make

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Speaker 3: a lot of sense. And we do believe both candidates

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Speaker 3: are going to spend a lot of money.

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Speaker 2: I think that's a given.

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Speaker 3: I haven't seen anybody talk about fiscal restraint reduced spending.

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Speaker 2: I see the opposite.

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Speaker 3: I see programs that are going to increase our deficit,

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Speaker 3: increase our debt, and I think you've got to be

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Speaker 3: you know, looking at that as an investor is to say, okay,

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Speaker 3: that's going to be an environment where you know, what's

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Speaker 3: going to be a good thing at a rate's going higher?

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Speaker 3: Is that going to be higher for longer? For rates

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Speaker 3: and inflation? And we want to make you know, bets

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Speaker 3: around that. We've extended duration a touch from being a

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Speaker 3: very very short to kind of you know, in the

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Speaker 3: middle now still a little bit you know, lighter if

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Speaker 3: you will, then the ag But I think at some

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Speaker 3: point here, you know.

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Speaker 2: Rates you're going to be high for longer period of time.

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Speaker 3: I don't think it's going to be the juice that

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Speaker 3: people expect to fuel mortgage refinancings and things like that.

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Speaker 3: So I think either candidate, I think what you want

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Speaker 3: to look at is ultimately when there's an election, what

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Speaker 3: is that going to do to earnings and taxes? Obviously

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Speaker 3: we'll play a role in that our corporate tax is

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Speaker 3: going to go higher. That means earnings are not.

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Speaker 1: I'm wondering if you're seeing opportunities offshore, particularly in emerging markets,

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Speaker 1: and you can put China in that basket if you'd like.

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Speaker 1: Given the idea that we may be looking at much

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Speaker 1: higher tariffs in the United States as it relates to

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Speaker 1: imported goods from China, does that cause you to maybe

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Speaker 1: play the reshoring trade in some way or what does

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Speaker 1: it do to your thinking on offshore markets?

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Speaker 3: And I think offshore markets, what are the advantages and

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Speaker 3: are we do like India? There are some emerging markets.

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Speaker 3: We're kind of slightly positive on China. I think what's

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Speaker 3: happened is I look at India in the growth rate.

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Speaker 3: India is two or three times a GDP rate of ours,

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Speaker 3: so I think that's certainly a positive. They've got an

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Speaker 3: environment structurally that's more like ours. China's a communist country,

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Speaker 3: India is a capitalist country. So I favor some of

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Speaker 3: those places. I think that you could look at, you know, offshore,

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Speaker 3: I think most investors are probably underweight emerging markets and

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Speaker 3: even developed markets over in Europe, but I think it

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Speaker 3: makes sense to have some allocation to those areas.

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Speaker 2: The issue with.

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Speaker 3: Tariffs, I think historically we know they drive the cost

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Speaker 3: ultimately to consumers. So I don't think it's a great

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Speaker 3: opportunity to be able to say it's really going to punish,

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Speaker 3: you know, these overseas markets. It probably punishes an American consumer.

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Speaker 3: I do like the fact that we do manufacture some

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Speaker 3: things more and more here, but again that's a tough

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Speaker 3: environment because it costs so much more to manufacture things

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Speaker 3: here with what we have to pay workers in terms

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Speaker 3: of benefits and things like that. So I don't look

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Speaker 3: at that as a as an easy trade. I think

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Speaker 3: there's some other trades that we like more that are demographic,

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Speaker 3: that are things that I think will continue to do well.

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Speaker 3: But I think you should have some money overseas that

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Speaker 3: are in some areas that do have higher growth. I mean,

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Speaker 3: the US will have some decent growth, you know, probably

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Speaker 3: two to three percent GDP, but there's places that are faster,

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Speaker 3: and I think people.

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Speaker 2: Need to have some money there.

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Speaker 3: I get most US investors are US centric, but having

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Speaker 3: one hundred percent of your assets in one.

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Speaker 2: Country doesn't make a lot of sense.

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Speaker 3: Given we're such a global economy and we trade with

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Speaker 3: so many partners, it doesn't make sense to have some

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Speaker 3: money overseas.

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Speaker 1: But what if the restoring trade is more about Mexico

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Speaker 1: than the United States? Do you want to be exposed

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Speaker 1: to Mexico right now?

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Speaker 2: We don't. You know, we're not the biggest fans of Mexico.

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Speaker 2: And you know, we look at some places.

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Speaker 3: Where we would you know, be law or in essence,

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Speaker 3: we'd be short and short medium. We're just going to

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Speaker 3: completely avoid that. Mexico would probably be one of those

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Speaker 3: make one of those markets. I think there's a lot

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Speaker 3: of depending on who wins, there's a lot of political

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Speaker 3: baggage that might go with that. So I do think

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Speaker 3: there's some areas that the US can make some inroads

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Speaker 3: in terms of manufacturing. But I think a lot of

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Speaker 3: what we're looking at is going to be those demographics,

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Speaker 3: you know, and trends that we're going to see for

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Speaker 3: three to five years that are going.

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Speaker 2: To work, and some manufacturing coming back would be great.

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Speaker 3: But you know, are issue as always is, you know,

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Speaker 3: we can't really manufacture a lot of software engineering type

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Speaker 3: stuff in the United States because our.

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Speaker 2: Schooling is not where it needs to be.

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Speaker 3: That stuff needs to be done in China, needs to

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Speaker 3: be done in India until we kind of can refigure

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Speaker 3: out what we're doing educationally.

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Speaker 1: Michael, we'll leave it there. Thank you so much for

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Speaker 1: making time to chat with us. Michael Lansburg is the

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Speaker 1: CIO at Lansburg Bennett's Private Wealth Management, joining us on

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Speaker 1: the Daybreak Asia podcast from the West coast of Florida.

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Speaker 1: Joining us now is John Jay Edwards is Bloomberg Weekend

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Speaker 1: America's managing editor, joining us from the studios here in

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Speaker 1: New York City. Thanks for making time, and I'm sure

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Speaker 1: it's been a busy week for you or weekend, i

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Speaker 1: should say, heading into what will be a busy and

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Speaker 1: a critical week for markets. We've got the election not

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Speaker 1: only for president, but for races that will determine the

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Speaker 1: control of Congress. There's a FED meeting which is been

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Speaker 1: pushed out a day because of the election, so we'll

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Speaker 1: get a decision on Thursday, and no shortage of earnings.

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Speaker 1: Let's and then there's geopolitics on top of that. Sure,

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Speaker 1: can we start with the presidential election first?

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Speaker 4: Absolutely?

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Speaker 1: What's at stake for Wall Street.

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Speaker 4: Well, you know, very different approaches to you know policy

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Speaker 4: in terms of Harris and and Trump. You know, it

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Speaker 4: will be very you know, very distinct outcome for for

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Speaker 4: Wall Street, you know, depending on which of them prevails.

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Speaker 4: You know, certainly Trump has talked a lot about being

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Speaker 4: interested in moving heavily into tariffs and cutting a wide

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Speaker 4: array of taxes. Harris, by contrast, has a more traditional,

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Speaker 4: you know, sort of democratic approach where she, you know,

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Speaker 4: intends some more targeted tax cuts, more targeted tariffs, but

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Speaker 4: generally a more traditional approach that is in some ways

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Speaker 4: likely to be a continuation of the Biden policies.

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Speaker 1: But more fiscal spending, whether it's Trump or Harris. And

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Speaker 1: maybe that's one of the things that's been causing a

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Speaker 1: bit of confusion in the bond market.

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Speaker 4: Would you say, yeah, yeah, absolutely, And you know a

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Speaker 4: lot of traders are really unsure if they're positioning at

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Speaker 4: this point, and you know, we're trying to be you know,

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Speaker 4: basically nimble going into the election and see how how

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Speaker 4: things seem to be looking as we wear into you know,

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Speaker 4: late Tuesday and early early Wednesday.

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Speaker 1: So do we have a sense of how long it's

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Speaker 1: going to be before there is a decision or some

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Speaker 1: level of clarity in the presidential race. What is the

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Speaker 1: newsroom planning for right now.

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Speaker 4: Yeah, we're basically planning for any eventuality, certainly, I think,

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Speaker 4: you know, the thought is that it is unlikely that

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Speaker 4: we will have, you know, certainly a two thousand style

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Speaker 4: Bush versus Gore several weeks before there's any clarity. Yeah.

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Speaker 4: The thought is, with a race that is pulling this close,

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Speaker 4: it's likely to break somewhat decisively one way or the other.

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Speaker 4: It could be that if there is any polling failure,

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Speaker 4: it's probably all going in one direction or another. So

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Speaker 4: while it's unlikely that there will be an absolute final

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Speaker 4: call on Tuesday night, I think it is possible that

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Speaker 4: there will be some clear direction even in the early

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Speaker 4: hours of Wednesday, and then we may see a scenario

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Speaker 4: much like we saw in twenty twenty when Biden was

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Speaker 4: finally declared the winner on Saturday that week.

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Speaker 1: So let's talk to you politics next. I'm looking at

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Speaker 1: the oil market right now. Both Brenton and West Texas

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Speaker 1: Intermediate are rallying. We've had some fresh developments in the

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Speaker 1: Mid East, the Israeli military saying that it carried out

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Speaker 1: a ground rate into Syria and some more in the

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Speaker 1: way of threats coming from Iran targeting Israel. Right, that's right.

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Speaker 4: So israel I said it did do a ground incursion

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Speaker 4: into Syria and seesed a Syrian citizen that they say

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Speaker 4: was involved with Iranian networks. That was a first in

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Speaker 4: the current conflict with Israel going into Syrian territory. So

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Speaker 4: that is something of an escalation there, and then in

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Speaker 4: further escalatory moves, the Iranian government this weekend started making

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Speaker 4: saber rattling kind of statements about its intention to strike

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Speaker 4: back against Israel in retaliation for Israel's latest retaliation for

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Speaker 4: Iran's previous missile attack. So there is some suggestion from

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Speaker 4: Iran that whatever attack it is planning is going to be,

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Speaker 4: as they've said, strong and complex, and it's thought that

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Speaker 4: it might involve more than just missiles and drones. You know,

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Speaker 4: obviously details are hard to come by, but it does

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Speaker 4: seem that there is going to be a further escalation,

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Speaker 4: and Iran has specifically backtracked essentially on the sort of

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Speaker 4: calmer response that it had after Israel's fighter jet attack

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Speaker 4: when it was initially trying you know Iran was initially

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Speaker 4: trying to downplay the impact of that attack. They have

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Speaker 4: now called that a miscalculation and are suggesting that whatever

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Speaker 4: they do next in Iran will be somewhat severe.

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Speaker 1: So John will leave it there. Thank you so much.

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Speaker 1: John Jay Edwards, Bloomberg's Weekend America's managing editor, joining us

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Speaker 1: here on the Bloomberg Daybreak Asia podcast. Over the weekend,

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Speaker 1: the Israeli military said it carried out a ground rate

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Speaker 1: into Syria, the idea of saying it seized a Syrian

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Speaker 1: citizen involved in Iranian networks. Now, this is the first

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Speaker 1: time in the current war that Israel has announced sending

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Speaker 1: troops directly into Syria. For a closer look, I'm joined

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Speaker 1: by doctor Ariel Cohen, he a senior fellow at the

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Speaker 1: Atlantic Council. Doctor Cohen, it's always a pleasure a lot

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Speaker 1: of ground to cover, but I want to begin with

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Speaker 1: this the move of Israeli forces into Syria. Help me

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Speaker 1: understand the significance here.

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Speaker 5: It's a special forces off that picked one high value operatives.

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Speaker 5: He was an Iranian terror network operative. The idea of

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Speaker 5: said named Aliso Leman al Assi, and operations like that

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Speaker 5: are executed. I won't say daily, but quite often by Israelis,

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Speaker 5: by Americans and others in the Middle East and elsewhere

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Speaker 5: in the world. This is a part of a shadow

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Speaker 5: war against terrorism that is ongoing now for decades.

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Speaker 1: Perhaps the larger news story was Iran saying that it's

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Speaker 1: planning a counter attack on Israel, involving more powerful warheads

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Speaker 1: and some other weapons. Here this being reported by a

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Speaker 1: number of news organizations, including the Wall Street Journal. This

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Speaker 1: comes a day after the Supreme Leader vowed harsh retaliation

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Speaker 1: against Israel. How high are the stakes right now for

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Speaker 1: some type of escalation between Israel and Iran?

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Speaker 5: The stakes are high. You're absolute right. This is a

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Speaker 5: big story. I was in Israel months ago when the

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Speaker 5: Iranians reigned over two hundred missiles all over Israel, and

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Speaker 5: I was gotten in shelter, not hurt. But these rocket

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Speaker 5: attacks are regular, either by Iran or by Hysbola Jaup.

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Speaker 5: There day, eleven people in an Arab town called Tira,

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Speaker 5: many cliques from Tel Aviv were hurt. When Kizabala, the

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Speaker 5: Iranian fully owned terrorist organization, said that they were trying

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Speaker 5: to hit Tel Aviv, the Iranians escalated their rhetoric after

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Speaker 5: the United States told them that they better stop after

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Speaker 5: the Israeli retaliatory strike. Recently, the Supreme Leader made the

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Speaker 5: decision they're going to escalate. They are saying they're preparing

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Speaker 5: bigger warheads and more missiles, So the escalatory spiral is ongoing.

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Speaker 5: We also saw the other day Israel moved a frigate

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Speaker 5: with ballistic missiles, a cruise missiles through the Sawas Canal

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Speaker 5: into the Red Sea and then probably putting in the

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Speaker 5: position to strike Iran. So this is ongoing. B fifty

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Speaker 5: two's are now deployed in the Middle East in a

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Speaker 5: signal to Iran to stop the escalation, to stand down.

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Speaker 5: In the meantime, the hostages are still in Gaza. The

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Speaker 5: release of hostages, of course, would lead to a cessation

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Speaker 5: of hostilities in Gaza. And as we speak, there's a

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Speaker 5: new scandal in Israel when classified materials were leaked from

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Speaker 5: the office of Prime Minister Nata Yao and this affect

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Speaker 5: the hostage negotiations and the politics of the Israeli ruling coalition.

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Speaker 1: We had a comment from the deputy commander in chief

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Speaker 1: of Iran's Islamic Revolutionary Guard saying details cannot be discussed,

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Speaker 1: but this attack against Israel will certainly be carried out.

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Speaker 1: What does it say to you when Israel is given

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Speaker 1: this type of forewarning, It.

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Speaker 5: Is telling me that Iran thinks that it can hurts

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Speaker 5: the Jurish State. The relative size of Israel is much

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Speaker 5: much smaller than Iran, and Israel doesn't have it looks

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Speaker 5: like the large number of the missiles Iran has. Israel

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Speaker 5: has a very good air force and the last strike,

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Speaker 5: what Israel did was taking out the raidars and the

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Speaker 5: anti air batteries of russiam s three hundred batteries that

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Speaker 5: could impede Israeli air attacks. And this also means that

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Speaker 5: after the warning from the United States not to touch

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Speaker 5: the oil infrastructure that makes money for the Mullah regime

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Speaker 5: and the nuclear facilities that threaten Israel's very existence, Israel

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Speaker 5: may decide that some of the sensitive infrastructure is at play.

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Speaker 5: They did a little pin by hitting a small refinery

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Speaker 5: related target near Abadon in the last exchange of hostilities,

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Speaker 5: and also one of the labs connected to the nuclear

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Speaker 5: cycle of Iran. The existential threat, of course to Israel

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Speaker 5: is from the Iranian nuclear program that the Bush Obama

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Speaker 5: Trump and Biden administration all failed to stop.

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Speaker 1: Can you help me understand the relevancy or the context

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Speaker 1: of the US presidential election in a lot of the

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Speaker 1: rhetoric and this back and forth that we are seeing

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Speaker 1: right now between Iran and Israel.

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Speaker 5: Look, the United States is a status quo power. What

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Speaker 5: does that mean. It means we are happy with the

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Speaker 5: global regime, with the global balance of power as it is,

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Speaker 5: and it's being challenged very openly by Russia, China, Iran,

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Speaker 5: and North Korea. The Iranian leaders are saying they are

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Speaker 5: in a coalition with Russia and China. They're on record

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Speaker 5: saying they're challenging the status quo. Both Harris campaign and

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Speaker 5: the Trump campaign said they're not interested in a war

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Speaker 5: with Iran. But I think the Iranians made it very

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Speaker 5: clear that they are a supportive of Kamala Harris b

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Speaker 5: There were open sources publications they're going up to Trump

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Speaker 5: with assassination attempts. They breached the cybersecurity of the Trump campaigns.

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Speaker 5: So they are really not happy if Donald Trump becomes president,

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Speaker 5: and they hope that after the elections, if Harris wins,

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Speaker 5: there'll be more pressure against this room.

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Speaker 1: Doctor Ariel Cohene. Thank you so much. It's always a pleasure.

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Speaker 1: Doctor Eryl Cohen is Senior Fellow at the Atlantic Council.

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Speaker 1: Joining us on the Bloomberg day Break Asia podcast. This

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Speaker 1: is Bloomberg day Break Asia, your morning brief on the

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Speaker 1: stories making news from Hong Kong to Singapore and Wall Street.

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