1 00:00:05,120 --> 00:00:08,480 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along 2 00:00:08,520 --> 00:00:12,360 Speaker 1: with Jonathan Farrell and Lisa Abramowitz. Join us each day 3 00:00:12,400 --> 00:00:16,880 Speaker 1: for insight from the best and economics, geopolitics, finance and investment. 4 00:00:17,280 --> 00:00:22,119 Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 5 00:00:22,320 --> 00:00:26,600 Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com, 6 00:00:26,640 --> 00:00:29,880 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. 7 00:00:30,000 --> 00:00:32,600 Speaker 2: We begin the program with Lori Cavasina, head of US 8 00:00:32,640 --> 00:00:35,720 Speaker 2: ecority Strategy at RBC Capital Markets. Lori, good morning. We 9 00:00:35,760 --> 00:00:38,519 Speaker 2: hope you all had a wonderful Thanksgiving. I want to 10 00:00:38,560 --> 00:00:41,120 Speaker 2: kick off with your call fifty one hundred for five 11 00:00:41,159 --> 00:00:43,520 Speaker 2: thousand rather year rent on the s and P five 12 00:00:43,600 --> 00:00:46,960 Speaker 2: hundred for next year Deutsche Bank going one further, a 13 00:00:47,040 --> 00:00:49,240 Speaker 2: fifty one hundred, Lurie talk to us about the path 14 00:00:49,479 --> 00:00:50,040 Speaker 2: to five k. 15 00:00:51,600 --> 00:00:53,800 Speaker 3: Well, thanks for having me as always, and look, you 16 00:00:53,800 --> 00:00:56,240 Speaker 3: know we purposefully did not put out you know, we 17 00:00:56,320 --> 00:00:59,360 Speaker 3: see a near term pullback and a resurgence. I think 18 00:00:59,400 --> 00:01:01,320 Speaker 3: a lot of people got caught in that trap in 19 00:01:01,360 --> 00:01:03,760 Speaker 3: twenty twenty three calling for a near term pullback in 20 00:01:03,760 --> 00:01:06,360 Speaker 3: the first quarter that didn't end up happening. I do 21 00:01:06,400 --> 00:01:09,479 Speaker 3: think we'll be watching our sentiment indicator very closely. It's 22 00:01:09,520 --> 00:01:11,480 Speaker 3: been the best star in the sky to navigate the 23 00:01:11,520 --> 00:01:13,760 Speaker 3: equity market this year, but it's also round tripped a 24 00:01:13,800 --> 00:01:15,760 Speaker 3: couple of times. It started out giving you a screaming 25 00:01:15,800 --> 00:01:17,560 Speaker 3: by signal because of deep pessimism. 26 00:01:18,080 --> 00:01:19,240 Speaker 4: Return to that post. 27 00:01:19,280 --> 00:01:21,479 Speaker 3: SBB gave a sales signal in August and then gave 28 00:01:21,480 --> 00:01:23,080 Speaker 3: a by signal again in November. 29 00:01:23,440 --> 00:01:25,039 Speaker 4: So I think we're going to have to just be 30 00:01:25,160 --> 00:01:26,080 Speaker 4: very tactical in that. 31 00:01:26,280 --> 00:01:28,400 Speaker 3: You know, I have been telling people November is very 32 00:01:28,400 --> 00:01:30,959 Speaker 3: consistently a strong month, but December is a little bit 33 00:01:30,959 --> 00:01:32,800 Speaker 3: more hit or miss. So we'll see if we end 34 00:01:32,880 --> 00:01:35,720 Speaker 3: up getting the Santa or Grinch in December. But I 35 00:01:35,760 --> 00:01:37,880 Speaker 3: do think the path for equities is higher next year, 36 00:01:37,880 --> 00:01:39,080 Speaker 3: and if we do have a bit of a short 37 00:01:39,160 --> 00:01:41,399 Speaker 3: term pullback either in December to start the year, I 38 00:01:41,440 --> 00:01:42,560 Speaker 3: expect it to be temporary. 39 00:01:42,760 --> 00:01:46,039 Speaker 1: Llurie Goldman Sachs had a note thanks zero Edge for 40 00:01:46,120 --> 00:01:48,880 Speaker 1: this on sales girls looking out two years twenty three, 41 00:01:49,000 --> 00:01:52,040 Speaker 1: twenty four to twenty five and the difference between them 42 00:01:52,080 --> 00:01:57,520 Speaker 1: magnificent seven with eleven percent sales grows versus the SPX 43 00:01:57,560 --> 00:02:02,000 Speaker 1: four ninety three of three percent sales growth. Why would 44 00:02:02,000 --> 00:02:04,640 Speaker 1: anybody sell the magnificent seven right now? 45 00:02:06,040 --> 00:02:07,560 Speaker 4: I think it's a great question, Tom. 46 00:02:07,600 --> 00:02:09,560 Speaker 3: When we look at our indicators and we look at 47 00:02:09,560 --> 00:02:12,400 Speaker 3: the megacap growth trade broadly, it looks crowded. If you 48 00:02:12,400 --> 00:02:15,520 Speaker 3: look at the weekly CFTC data on Nasdaq one hundred 49 00:02:15,560 --> 00:02:18,720 Speaker 3: futures positioning, we're basically close to peak valuation and growth 50 00:02:18,760 --> 00:02:20,560 Speaker 3: relative to value. If you look at the rustle one 51 00:02:20,560 --> 00:02:22,800 Speaker 3: thousand on a weighted PE multiple, which is going to 52 00:02:22,840 --> 00:02:25,840 Speaker 3: be very heavily influenced by that magnificent seven. And if 53 00:02:25,840 --> 00:02:29,200 Speaker 3: you look at earning's momentum, we're still seeing better earnings 54 00:02:29,240 --> 00:02:31,639 Speaker 3: revision trends and growth and value, but value is starting 55 00:02:31,639 --> 00:02:33,760 Speaker 3: to catch up a little bit, so we are seeing 56 00:02:33,800 --> 00:02:35,919 Speaker 3: that leadership on the earning side fade a little bit. 57 00:02:35,960 --> 00:02:36,480 Speaker 4: All of that. 58 00:02:36,440 --> 00:02:38,720 Speaker 3: Tells me that there should be a pause in growth 59 00:02:38,800 --> 00:02:40,119 Speaker 3: leadership at some point. 60 00:02:40,240 --> 00:02:41,840 Speaker 4: But I think one of the reasons people. 61 00:02:41,600 --> 00:02:45,200 Speaker 3: Can't really permanently quit these growth stocks is kind of 62 00:02:45,240 --> 00:02:47,920 Speaker 3: hitting on exactly what you said, the idea that there 63 00:02:47,960 --> 00:02:50,840 Speaker 3: will be superior growth there over the intermediate term. And 64 00:02:50,840 --> 00:02:53,760 Speaker 3: if you look at GDP forecasts for next year one 65 00:02:53,760 --> 00:02:56,520 Speaker 3: percent in real terms anticipated by the street one point 66 00:02:56,560 --> 00:02:59,720 Speaker 3: eighty percent in twenty twenty five. When we're in a 67 00:02:59,720 --> 00:03:03,560 Speaker 3: sub two percent GDP environment, growth stocks usually do outperform 68 00:03:03,600 --> 00:03:06,040 Speaker 3: because economic growth is perceived to be scarce. 69 00:03:06,639 --> 00:03:08,240 Speaker 4: So I do think there is a real tension. 70 00:03:08,280 --> 00:03:10,240 Speaker 3: You know, we still like the tech sector even though 71 00:03:10,280 --> 00:03:13,280 Speaker 3: we have these shorter term tactical concerns on growth, had 72 00:03:13,320 --> 00:03:15,760 Speaker 3: those tactical concerns on growth frankly for a while, and 73 00:03:15,800 --> 00:03:18,240 Speaker 3: they've yet to really materialize in a big way. And 74 00:03:18,280 --> 00:03:20,680 Speaker 3: I do feel like you may need to see a 75 00:03:20,720 --> 00:03:24,400 Speaker 3: real ratcheting up of GDP expectations before you can really 76 00:03:24,440 --> 00:03:26,760 Speaker 3: see growth loose some of that leadership dominance. 77 00:03:26,840 --> 00:03:29,120 Speaker 5: When you talk about sentiment and how really that's been 78 00:03:29,160 --> 00:03:32,040 Speaker 5: the loadstone for you, it's figuring out where is investor 79 00:03:32,080 --> 00:03:33,240 Speaker 5: sentiment em betting against it? 80 00:03:33,280 --> 00:03:33,920 Speaker 6: Am I correct? 81 00:03:35,240 --> 00:03:35,840 Speaker 4: Basically? 82 00:03:35,920 --> 00:03:38,080 Speaker 3: You know, one of the things I've learned over my career, Lisa, 83 00:03:38,240 --> 00:03:41,200 Speaker 3: is that when everybody is really really pessimistic, that's usually 84 00:03:41,200 --> 00:03:43,280 Speaker 3: a fantastic time to buy. If you look at when 85 00:03:43,320 --> 00:03:47,040 Speaker 3: the AAII net bullishness indicator is, you know, sort of 86 00:03:47,040 --> 00:03:49,760 Speaker 3: one standard deviation or two standard deviations below the long 87 00:03:49,840 --> 00:03:52,080 Speaker 3: term average. I forget the exact stat, but it's in 88 00:03:52,080 --> 00:03:53,920 Speaker 3: the eighties in terms of the percent of time that 89 00:03:53,960 --> 00:03:56,720 Speaker 3: you're up twelve months later. And you see similar stats 90 00:03:56,720 --> 00:03:58,520 Speaker 3: if you look on the flip side when people are 91 00:03:58,560 --> 00:04:02,360 Speaker 3: overly enthusiastic. Now, if you're above one standard deviation on 92 00:04:02,520 --> 00:04:05,080 Speaker 3: extreme optimism, you still tend to see like a five 93 00:04:05,120 --> 00:04:07,200 Speaker 3: percent gain over the next twelve months. So it's not 94 00:04:07,240 --> 00:04:10,160 Speaker 3: necessarily a washout, but it does tell you that you 95 00:04:10,280 --> 00:04:11,960 Speaker 3: tend to see consolidation. 96 00:04:12,120 --> 00:04:13,720 Speaker 4: You do tend to see some. 97 00:04:13,760 --> 00:04:16,080 Speaker 3: Choppier markets, And I think that's why it's so important, 98 00:04:16,120 --> 00:04:19,640 Speaker 3: Lisa to really prioritize data over narratives. I know a 99 00:04:19,640 --> 00:04:21,680 Speaker 3: lot of strategists like to tell a great story and 100 00:04:21,680 --> 00:04:23,400 Speaker 3: then they go out and put together their charts to 101 00:04:23,440 --> 00:04:25,960 Speaker 3: try to fit whatever narrative they're pushing out there. But 102 00:04:26,000 --> 00:04:28,119 Speaker 3: I really think that you have to stick to the data, 103 00:04:28,160 --> 00:04:31,039 Speaker 3: and things like that centiment indicator will keep you into 104 00:04:31,120 --> 00:04:35,560 Speaker 3: falling into consensus traps. Again, everybody just sort of gloms 105 00:04:35,600 --> 00:04:37,599 Speaker 3: onto the same narrative and things get too extreme. 106 00:04:37,680 --> 00:04:39,680 Speaker 5: Well, the narrative that we've been hearing again and again 107 00:04:39,760 --> 00:04:42,200 Speaker 5: is five thousand on the SMP going into next year 108 00:04:42,240 --> 00:04:45,320 Speaker 5: at least, if not more, And there has been a 109 00:04:45,360 --> 00:04:48,720 Speaker 5: sort of boom and optimism that we've seen. Does that 110 00:04:48,800 --> 00:04:51,320 Speaker 5: mean it's time to start taking some chips off the 111 00:04:51,360 --> 00:04:53,880 Speaker 5: table and to be a little bit less optimistic or 112 00:04:53,920 --> 00:04:56,080 Speaker 5: does this mean that finally you might see some of 113 00:04:56,120 --> 00:04:59,599 Speaker 5: that cash at record levels going into the equity market. 114 00:05:00,680 --> 00:05:03,120 Speaker 3: Well, it's interestingly so you know, everybody wants to sort 115 00:05:03,160 --> 00:05:05,120 Speaker 3: of talk about this idea, and this is maybe on 116 00:05:05,160 --> 00:05:07,080 Speaker 3: the more barish side of the table that bonds look 117 00:05:07,120 --> 00:05:09,520 Speaker 3: more attractive than stocks and the earning shield has collapsed 118 00:05:09,520 --> 00:05:11,960 Speaker 3: relative to the bond yield, and all that is true, 119 00:05:12,000 --> 00:05:13,960 Speaker 3: But if you actually go back, there have been periods 120 00:05:13,960 --> 00:05:16,960 Speaker 3: in history when equity investors or investors in general have 121 00:05:17,000 --> 00:05:19,680 Speaker 3: taken up both their equity allocations and their bond allocations 122 00:05:19,720 --> 00:05:20,440 Speaker 3: at the same time. 123 00:05:20,880 --> 00:05:22,880 Speaker 4: So I don't think it's unheard of for both to do. 124 00:05:23,000 --> 00:05:24,960 Speaker 3: Well, you know, five thousand, it's starting to be a 125 00:05:25,040 --> 00:05:27,040 Speaker 3: number we're hearing a lot. I think we were maybe 126 00:05:27,040 --> 00:05:28,880 Speaker 3: the second person on the cell side that had it 127 00:05:28,920 --> 00:05:30,600 Speaker 3: when we put ours out, but you are starting to 128 00:05:30,640 --> 00:05:31,080 Speaker 3: hear about it. 129 00:05:31,120 --> 00:05:34,080 Speaker 4: And I think ten percent is usually a reasonable place. 130 00:05:33,800 --> 00:05:36,599 Speaker 3: That a lot of strategists start, we do have one 131 00:05:36,640 --> 00:05:38,760 Speaker 3: model that can take us up to fifty three hundred, 132 00:05:38,800 --> 00:05:41,279 Speaker 3: and that's looking at our valuation work and earning's work. 133 00:05:41,480 --> 00:05:43,640 Speaker 3: And I will tell you, Lisa, like and as I 134 00:05:43,680 --> 00:05:45,840 Speaker 3: was putting the report together, you always think about kind 135 00:05:45,839 --> 00:05:47,520 Speaker 3: of where did you go wrong in the past year. 136 00:05:48,200 --> 00:05:48,800 Speaker 7: I was more. 137 00:05:48,640 --> 00:05:51,640 Speaker 4: Optimistic than most, but not optimistic in the end. And 138 00:05:51,800 --> 00:05:53,400 Speaker 4: that valuation model. 139 00:05:53,120 --> 00:05:55,120 Speaker 3: Was the one thing that was telling me all year 140 00:05:55,160 --> 00:05:57,200 Speaker 3: to look for forty seven hundred, forty eight hundred on 141 00:05:57,200 --> 00:05:59,120 Speaker 3: the S and P it's pointing to forty seven hundred on. 142 00:05:59,120 --> 00:05:59,640 Speaker 4: The end of the year. 143 00:05:59,640 --> 00:06:02,080 Speaker 3: Now twenty twenty three one point it was saying forty 144 00:06:02,120 --> 00:06:05,159 Speaker 3: eight forty nine. So I do think you have to 145 00:06:05,200 --> 00:06:06,880 Speaker 3: have a little bit of humility when you look at 146 00:06:06,920 --> 00:06:07,640 Speaker 3: these forecasts. 147 00:06:07,640 --> 00:06:09,760 Speaker 4: We look at a bunch of different models. We take 148 00:06:09,800 --> 00:06:10,240 Speaker 4: the median. 149 00:06:10,360 --> 00:06:12,839 Speaker 3: Some are more constructive, some are less. But I do 150 00:06:12,880 --> 00:06:14,880 Speaker 3: think we do have to pay attention to that bowl 151 00:06:14,960 --> 00:06:17,280 Speaker 3: case setting into next year, because so it's really. 152 00:06:17,080 --> 00:06:17,920 Speaker 4: What works this year? 153 00:06:18,000 --> 00:06:18,880 Speaker 7: Does that mean a banner? 154 00:06:19,000 --> 00:06:20,919 Speaker 6: Kelvistin says fifty three hundred. 155 00:06:21,040 --> 00:06:23,200 Speaker 2: I'd like we could go there quite I think we 156 00:06:23,200 --> 00:06:25,359 Speaker 2: stick with five K. I just wanted to jump in 157 00:06:25,400 --> 00:06:28,000 Speaker 2: when you were putting this together. Surely five K was 158 00:06:28,040 --> 00:06:30,359 Speaker 2: something like twenty percent upside of the time. 159 00:06:31,839 --> 00:06:36,239 Speaker 3: So you know, John, I started back in October pricing 160 00:06:36,240 --> 00:06:38,440 Speaker 3: the models, and we actually published a report in October 161 00:06:38,480 --> 00:06:40,240 Speaker 3: where we said we're not going to do our target yet, 162 00:06:40,279 --> 00:06:42,880 Speaker 3: but here's what all the models are showing. And back 163 00:06:42,880 --> 00:06:44,840 Speaker 3: then we were getting, you know, more a little bit 164 00:06:44,839 --> 00:06:46,760 Speaker 3: of a more subdued number because we had a lower 165 00:06:46,800 --> 00:06:50,679 Speaker 3: starting point, so we did price everything. As of mid November, 166 00:06:50,680 --> 00:06:52,240 Speaker 3: I think a lot of our models we froze as 167 00:06:52,279 --> 00:06:54,360 Speaker 3: November fifteenth, November. 168 00:06:53,839 --> 00:06:55,760 Speaker 4: Sixteenth, so we really are. 169 00:06:55,720 --> 00:06:57,839 Speaker 3: Kind of getting sort of a true ten percent from 170 00:06:57,880 --> 00:07:00,599 Speaker 3: current conditions as of mid November. Basically, when I do this, John, 171 00:07:00,640 --> 00:07:02,080 Speaker 3: I go into a black hole for a few days, 172 00:07:02,120 --> 00:07:04,120 Speaker 3: don't answer my phone, don't answer email, and don't talk 173 00:07:04,120 --> 00:07:06,120 Speaker 3: to anybody, and update all at once. 174 00:07:06,160 --> 00:07:09,080 Speaker 2: So well, welcome Bocasta the black hole, Laurie. We're happy 175 00:07:09,120 --> 00:07:17,320 Speaker 2: to see you, Lori Cavasena. Obviously, Capital Markets, there's no one. 176 00:07:17,200 --> 00:07:18,360 Speaker 7: Better to speak to on this. 177 00:07:18,440 --> 00:07:20,360 Speaker 1: As if you stand at the four corners of fifty 178 00:07:20,400 --> 00:07:23,520 Speaker 1: seventh Street and Fifth Avenue, the Dana Telsea is a 179 00:07:23,640 --> 00:07:27,200 Speaker 1: child gazing upon Berg Dorth Goodman and across the street 180 00:07:27,240 --> 00:07:30,200 Speaker 1: to Tiffany's and where Louis Vuton is now when there's 181 00:07:30,240 --> 00:07:33,720 Speaker 1: some other unpronounceable I can't afford store on the other corner. 182 00:07:33,760 --> 00:07:37,040 Speaker 1: Telsea joins us now CEO, chief Research officer of her 183 00:07:37,080 --> 00:07:41,000 Speaker 1: Telsey Advisory Group. You got this right. A lot of 184 00:07:41,040 --> 00:07:44,800 Speaker 1: people got this wrong. How did you expect this optimism 185 00:07:44,840 --> 00:07:46,000 Speaker 1: that we come out of the season. 186 00:07:46,440 --> 00:07:48,200 Speaker 8: Well, thank you very much for having me, and hope 187 00:07:48,200 --> 00:07:50,840 Speaker 8: you guys had a great holiday. Here's I think overall, 188 00:07:51,160 --> 00:07:53,320 Speaker 8: keep in mind we did have a barrage of earnings 189 00:07:53,360 --> 00:07:57,360 Speaker 8: reports all talking about the cautious consumer inventory levels are lean. 190 00:07:57,800 --> 00:08:01,920 Speaker 8: Promotions were in place thirty to forty That isn't outstanding, 191 00:08:01,920 --> 00:08:04,680 Speaker 8: that isn't going off the rails. In terms of level 192 00:08:04,680 --> 00:08:07,720 Speaker 8: of promotions, they were definitely clean. What you saw in 193 00:08:07,800 --> 00:08:11,440 Speaker 8: terms of traffic, look at the Lululemons, the bathroom, body works. 194 00:08:11,760 --> 00:08:14,840 Speaker 8: Macy's had more traffic than what you had at Nordstrom, 195 00:08:15,080 --> 00:08:17,640 Speaker 8: and off prices like TJX had a ton of traffic. 196 00:08:17,920 --> 00:08:21,520 Speaker 8: And the teen retailers picked up the reason why, value 197 00:08:21,520 --> 00:08:24,440 Speaker 8: and innovation. If you add value and you had innovation, 198 00:08:24,680 --> 00:08:27,440 Speaker 8: the consumer was coming So look at Uggs and Hoka 199 00:08:27,520 --> 00:08:29,800 Speaker 8: where there was innovation. You look at the value on 200 00:08:29,880 --> 00:08:32,400 Speaker 8: the pricing. It meant something. But we have a long 201 00:08:32,440 --> 00:08:35,880 Speaker 8: season coming up now. Christmas is on a Monday. Watch 202 00:08:35,920 --> 00:08:39,719 Speaker 8: that weekend before Christmas. Because procrastinators, it's their choice of 203 00:08:39,760 --> 00:08:40,640 Speaker 8: when they want to spend. 204 00:08:40,920 --> 00:08:43,400 Speaker 5: Just let's build them that this idea of watch what 205 00:08:43,480 --> 00:08:45,679 Speaker 5: happens later in the season. Are you saying that you 206 00:08:45,720 --> 00:08:49,040 Speaker 5: suspect people brought forward their shopping much more than they 207 00:08:49,080 --> 00:08:51,920 Speaker 5: had in the past because they are being cautious. So 208 00:08:52,360 --> 00:08:55,720 Speaker 5: the numbers are inflated to represent that more than just 209 00:08:55,800 --> 00:08:57,080 Speaker 5: excessive spending altogether. 210 00:08:57,200 --> 00:08:57,719 Speaker 9: Yes, I think. 211 00:08:57,760 --> 00:08:59,920 Speaker 8: You look at the savings rate which has come down, 212 00:09:00,080 --> 00:09:02,240 Speaker 8: You take a look at delinquencies which have gone up, 213 00:09:02,559 --> 00:09:05,120 Speaker 8: and you look at what's happened with the pattern of promotions. 214 00:09:05,360 --> 00:09:08,640 Speaker 8: It began in October, So with Amazon Prime Day in 215 00:09:08,640 --> 00:09:11,640 Speaker 8: October their second Prime Day, you had a pull forward 216 00:09:11,640 --> 00:09:14,559 Speaker 8: of what the promos were, and of course online is 217 00:09:14,600 --> 00:09:16,960 Speaker 8: going to be strong. Stores are no longer open on 218 00:09:17,000 --> 00:09:20,080 Speaker 8: Thanksgiving Day? So what did people do? They shop with 219 00:09:20,120 --> 00:09:21,680 Speaker 8: their phone? Mobile mattered? 220 00:09:22,000 --> 00:09:24,920 Speaker 5: Well, this really raises this question. Is it the modality 221 00:09:25,320 --> 00:09:28,000 Speaker 5: of shopping that matters? Right now or is it the 222 00:09:28,120 --> 00:09:31,440 Speaker 5: type of product mix that matters right now? And I'm curious, 223 00:09:31,520 --> 00:09:34,120 Speaker 5: can you parse that up? Is it just online shopping 224 00:09:34,200 --> 00:09:37,240 Speaker 5: or is it the products that people are getting online. 225 00:09:37,320 --> 00:09:39,800 Speaker 8: It's the products that people are getting, and don't throw 226 00:09:39,840 --> 00:09:43,240 Speaker 8: out the stores. The stores matter, the engagement that people have, 227 00:09:43,320 --> 00:09:47,360 Speaker 8: the social interaction. So many companies in twenty twenty three 228 00:09:47,559 --> 00:09:50,040 Speaker 8: came out with new store formats. You look at on 229 00:09:50,280 --> 00:09:53,679 Speaker 8: mall and off mall, they both won and even outlets 230 00:09:53,679 --> 00:09:54,120 Speaker 8: are strong. 231 00:09:54,240 --> 00:09:56,560 Speaker 9: And that measure for value. 232 00:09:56,200 --> 00:09:59,320 Speaker 1: Where's the best total return of twelve months? You and 233 00:09:59,360 --> 00:10:01,839 Speaker 1: Joe Feldman they're not on speaking terms on this, but 234 00:10:02,240 --> 00:10:05,720 Speaker 1: the basic idea of which kind of retail and which 235 00:10:05,720 --> 00:10:07,040 Speaker 1: individual stock is the. 236 00:10:06,960 --> 00:10:09,680 Speaker 8: Best possibility off price I think is going to win 237 00:10:09,760 --> 00:10:11,000 Speaker 8: over the next twelve months. 238 00:10:11,040 --> 00:10:14,480 Speaker 9: TJ Max, would you off price? 239 00:10:14,800 --> 00:10:15,280 Speaker 6: Off price? 240 00:10:15,440 --> 00:10:19,880 Speaker 8: Not luxury, different world, it's off price. It's the TJ 241 00:10:20,000 --> 00:10:22,400 Speaker 8: max Is of the world, the Burlington's and the Ross stores. 242 00:10:22,640 --> 00:10:25,000 Speaker 8: Why they're getting the benefit of a trade down. Look 243 00:10:25,000 --> 00:10:27,480 Speaker 8: at what you just saw in their results last week 244 00:10:27,679 --> 00:10:30,040 Speaker 8: when they each delivered same store sales of at least 245 00:10:30,080 --> 00:10:33,280 Speaker 8: five percent, when you typically these are three percent same 246 00:10:33,320 --> 00:10:36,240 Speaker 8: store sales increases. They're getting the benefit of the trade down. 247 00:10:36,280 --> 00:10:40,960 Speaker 1: There's been a heritage of Tjmax executing what's the secret 248 00:10:41,120 --> 00:10:42,360 Speaker 1: sauce that makes. 249 00:10:42,120 --> 00:10:42,680 Speaker 7: Them do that? 250 00:10:43,360 --> 00:10:46,040 Speaker 8: The experience of their buyers. They know how to buy, 251 00:10:46,080 --> 00:10:49,240 Speaker 8: They have their relationships with brands. Brands like being in 252 00:10:49,280 --> 00:10:52,480 Speaker 8: their stores and they sell through and don't forget their locations. 253 00:10:53,440 --> 00:10:56,600 Speaker 5: The description that you're painting of the American consumer is 254 00:10:56,640 --> 00:10:59,439 Speaker 5: not that positive. It's one that is trading down. As 255 00:10:59,440 --> 00:11:01,520 Speaker 5: you said, it's one that has caution that might not 256 00:11:01,679 --> 00:11:06,680 Speaker 5: show up in force before that Monday Christmas. So where 257 00:11:06,720 --> 00:11:08,520 Speaker 5: are we in this cycle, right? I mean, is this 258 00:11:08,559 --> 00:11:10,480 Speaker 5: a matter of people running out of money or is 259 00:11:10,480 --> 00:11:12,880 Speaker 5: it just them saying, well, we've been spending a lot recently. 260 00:11:12,920 --> 00:11:15,360 Speaker 5: We probably should be a little more prudent. 261 00:11:15,480 --> 00:11:17,960 Speaker 8: They had more money two years ago with the stimulus 262 00:11:18,000 --> 00:11:21,240 Speaker 8: package during the pandemic. The load to middle income consumer 263 00:11:21,400 --> 00:11:25,160 Speaker 8: is battered right now by higher interest rates. Even though 264 00:11:25,200 --> 00:11:28,160 Speaker 8: inflation's moderating, it's still a higher price than it was 265 00:11:28,200 --> 00:11:30,320 Speaker 8: in the past. And even you take a look at 266 00:11:30,320 --> 00:11:33,600 Speaker 8: the luxury consumer, you need the feel good factor. With 267 00:11:33,720 --> 00:11:37,240 Speaker 8: the geopolitical issues going on, the macro headwinds out there 268 00:11:37,520 --> 00:11:40,840 Speaker 8: and the volatility the stock market, it makes it more challenging. 269 00:11:41,160 --> 00:11:42,679 Speaker 9: So that's why experience. 270 00:11:42,760 --> 00:11:45,240 Speaker 8: Look at the tailor swift concerts over the summer, what 271 00:11:45,320 --> 00:11:46,680 Speaker 8: people are willing to spend on. 272 00:11:47,080 --> 00:11:49,600 Speaker 9: Give them something innovative, they'll be there. 273 00:11:49,800 --> 00:11:51,520 Speaker 5: So what does it say about the trajectory of the 274 00:11:51,520 --> 00:11:53,839 Speaker 5: consumer and how people are going to be spending. Is 275 00:11:53,880 --> 00:11:56,000 Speaker 5: it the beginning of more pain or is this basically 276 00:11:56,080 --> 00:11:56,600 Speaker 5: the bulk of it. 277 00:11:57,080 --> 00:11:59,520 Speaker 8: I think this is in the middle of the pain 278 00:11:59,559 --> 00:12:03,040 Speaker 8: that we're I think the focus on essentials is right there. 279 00:12:03,360 --> 00:12:06,000 Speaker 8: I think you need newness in order to drive demand. 280 00:12:06,360 --> 00:12:09,440 Speaker 8: And even though the labor market continues to remain very good, 281 00:12:09,920 --> 00:12:12,560 Speaker 8: the watchwords are out there and saying what's it going 282 00:12:12,600 --> 00:12:15,480 Speaker 8: to look like? And inventory is cleaner, so you don't 283 00:12:15,559 --> 00:12:17,640 Speaker 8: need to promote as deeply as you had in the past. 284 00:12:17,920 --> 00:12:18,640 Speaker 9: Look at what's. 285 00:12:18,440 --> 00:12:22,080 Speaker 8: Happening with the department stores. They're ordering more cautiously, and 286 00:12:22,280 --> 00:12:24,800 Speaker 8: why are they ordering cautiously if they don't feel the 287 00:12:24,840 --> 00:12:27,800 Speaker 8: demand is going to be there. They'd rather sell at 288 00:12:28,360 --> 00:12:32,400 Speaker 8: full price than markdowns. And your most profitable markdown is 289 00:12:32,440 --> 00:12:34,720 Speaker 8: your lowest markdown, not your greatest markdown. 290 00:12:34,960 --> 00:12:37,760 Speaker 1: Toughest job in retail this year is a guy named 291 00:12:37,800 --> 00:12:43,079 Speaker 1: Sabata Dico at Gucci absolute toughest, toughest job. Dana Telsey 292 00:12:43,360 --> 00:12:45,520 Speaker 1: on what Gucci's going to do right off that corner 293 00:12:45,600 --> 00:12:47,160 Speaker 1: of Fifth Avenue and fifty seventh. 294 00:12:47,559 --> 00:12:50,440 Speaker 8: I think they're going more basic than they've ever been before. 295 00:12:50,440 --> 00:12:53,520 Speaker 1: Absolutely, they're going away from what the idiocy was for 296 00:12:53,559 --> 00:12:54,079 Speaker 1: three years. 297 00:12:54,160 --> 00:12:56,960 Speaker 8: Yeah, the mismatching of the three years is all about 298 00:12:57,040 --> 00:13:00,200 Speaker 8: matching now and it's about safe. They're going back back 299 00:13:00,280 --> 00:13:04,319 Speaker 8: to their archives and seeing what can they reinvent and updated. 300 00:13:04,360 --> 00:13:06,400 Speaker 1: Proof that we want that. Is there a proof that 301 00:13:06,400 --> 00:13:07,720 Speaker 1: will sell to the Chinese? 302 00:13:08,240 --> 00:13:10,319 Speaker 8: I think there's some proof it will sell to the Chinese, 303 00:13:10,360 --> 00:13:12,760 Speaker 8: But we're not seeing the Chinese travel yet. We need 304 00:13:12,760 --> 00:13:15,839 Speaker 8: them traveling to really drive demand. And don't forget you're 305 00:13:15,840 --> 00:13:17,720 Speaker 8: seeing the local Europeans slow down. 306 00:13:17,760 --> 00:13:19,719 Speaker 5: Also, what do you make of the buy now, Pay 307 00:13:19,800 --> 00:13:22,040 Speaker 5: Later and we were hearing that it's actually picking up. 308 00:13:22,240 --> 00:13:22,800 Speaker 9: Do you buy that? 309 00:13:22,800 --> 00:13:25,480 Speaker 5: Do you think that this is a positive sign for 310 00:13:25,840 --> 00:13:27,960 Speaker 5: the retail world or is it a negative sign that 311 00:13:28,000 --> 00:13:30,640 Speaker 5: people are just basically turning to leverage. 312 00:13:30,800 --> 00:13:32,320 Speaker 9: People are turning towards leverage. 313 00:13:32,360 --> 00:13:35,160 Speaker 8: When buy Now, Pay Later first came out, it was 314 00:13:35,400 --> 00:13:39,160 Speaker 8: a huge event. A huge development because it got younger 315 00:13:39,200 --> 00:13:42,440 Speaker 8: people and frankly the millennials to spend. I think now 316 00:13:42,480 --> 00:13:44,760 Speaker 8: that it's been around for a few years, if they 317 00:13:44,800 --> 00:13:48,520 Speaker 8: can't pay on time, they're willing to delay and frankly 318 00:13:48,600 --> 00:13:50,840 Speaker 8: be able to extend what their payment terms are. 319 00:13:51,080 --> 00:13:53,160 Speaker 1: Is it changing charge cards? I mean, is buy now, 320 00:13:53,200 --> 00:13:55,560 Speaker 1: pay later changing the charge card business? 321 00:13:55,600 --> 00:13:58,880 Speaker 8: Not what we've seen. It didn't take off tremendously. It 322 00:13:58,920 --> 00:14:02,200 Speaker 8: took off with a certain graphic and those are the millennials. 323 00:14:01,800 --> 00:14:02,640 Speaker 7: Single best buke go. 324 00:14:03,320 --> 00:14:04,800 Speaker 9: I think that it's going to be TJX. 325 00:14:04,920 --> 00:14:06,840 Speaker 8: I think TJX is going to be the winner for 326 00:14:07,160 --> 00:14:08,400 Speaker 8: Holiday in twenty twenty four. 327 00:14:08,760 --> 00:14:11,079 Speaker 1: Dana, thank you for the brief. Dana Telsey with Telsey 328 00:14:11,160 --> 00:14:24,480 Speaker 1: Advisory Group. Here we have seen far too much of him. 329 00:14:24,520 --> 00:14:27,920 Speaker 1: He is an expert on turmoil, war and terrorism. Aaron 330 00:14:28,040 --> 00:14:32,120 Speaker 1: David Miller with a continued brief, Senior Fellow Carnegie Endowment 331 00:14:32,200 --> 00:14:35,160 Speaker 1: for International Piece. Aaron, just let me just cut to 332 00:14:35,240 --> 00:14:38,800 Speaker 1: the chase. If we get out to a point of negotiation. 333 00:14:38,800 --> 00:14:42,160 Speaker 6: From where you sit, is there a hamas to negotiate with? 334 00:14:42,360 --> 00:14:47,280 Speaker 10: Now there is, and the cutteries and the Americans are 335 00:14:47,480 --> 00:14:52,640 Speaker 10: validating Hamas's effectiveness. The three of you are better analysts 336 00:14:52,640 --> 00:14:56,200 Speaker 10: than I am, because you've i think, identified the core questions. 337 00:14:56,880 --> 00:14:57,920 Speaker 7: There's growing daylight. 338 00:14:58,040 --> 00:15:00,160 Speaker 10: The world is mad at Joe Biden, even though I 339 00:15:00,200 --> 00:15:01,320 Speaker 10: think frank his own. 340 00:15:01,200 --> 00:15:02,120 Speaker 7: Party's mad at him. 341 00:15:02,400 --> 00:15:05,080 Speaker 10: There's a degree twenty five years at Department of State, 342 00:15:05,120 --> 00:15:09,160 Speaker 10: I've never seen, never the degree of dissension and vocal 343 00:15:09,200 --> 00:15:15,480 Speaker 10: opposition to an administration's policy from inside the foreign policy 344 00:15:15,680 --> 00:15:20,240 Speaker 10: and national security space. On one resignation, but an extraordinary 345 00:15:20,240 --> 00:15:23,320 Speaker 10: amount of noise. I think the President Frankly handled this 346 00:15:23,400 --> 00:15:27,320 Speaker 10: pretty effectively. The Israeli Lebanese border is relatively quiet. The 347 00:15:27,400 --> 00:15:31,240 Speaker 10: fears of escalation into a regional war which could produce 348 00:15:31,520 --> 00:15:35,520 Speaker 10: plunging financial markets and rising up prices. So far that's 349 00:15:35,520 --> 00:15:38,280 Speaker 10: been avoided, And you're right to focus on ostages, but 350 00:15:38,400 --> 00:15:41,360 Speaker 10: I think the deal is very clear. I'd be stunned, frankly, 351 00:15:41,560 --> 00:15:47,120 Speaker 10: if this humanitarian past collapsed. Hamas is trading hostages for time. 352 00:15:47,680 --> 00:15:52,320 Speaker 10: They're hoping that the hostage families inside of Israel will 353 00:15:52,360 --> 00:15:58,040 Speaker 10: continue to pressure the government in order to redeem all 354 00:15:58,120 --> 00:16:02,880 Speaker 10: of the hostages that have not been The Arabs are angry, 355 00:16:03,040 --> 00:16:05,200 Speaker 10: and THEWS earliers are going to face probably in the 356 00:16:05,240 --> 00:16:11,400 Speaker 10: next week. If the ten hostages for a day of quiet, 357 00:16:11,440 --> 00:16:14,560 Speaker 10: which is the offer on the table, If Amas accepts 358 00:16:14,560 --> 00:16:19,000 Speaker 10: that doesn't add requests for more Palestinian prisoners, you could 359 00:16:19,000 --> 00:16:20,119 Speaker 10: get another week. 360 00:16:19,880 --> 00:16:20,320 Speaker 7: Out of this. 361 00:16:20,800 --> 00:16:22,760 Speaker 10: But at some point the Israelis are going to want 362 00:16:22,760 --> 00:16:25,040 Speaker 10: to resume in their ground campaign, and at that point, 363 00:16:25,120 --> 00:16:29,600 Speaker 10: I think you're going to see growing awkwardness and uncomfortableness, 364 00:16:29,800 --> 00:16:32,800 Speaker 10: maybe even tension in the US Israeli relationship. 365 00:16:32,920 --> 00:16:35,960 Speaker 5: There's daylight between President Biden and some of his own 366 00:16:36,280 --> 00:16:39,320 Speaker 5: members within his party, within his team that he has 367 00:16:39,360 --> 00:16:44,160 Speaker 5: surrounding him. But he also reportedly has expressed concern about 368 00:16:44,160 --> 00:16:47,520 Speaker 5: the collateral damage, about the civilians who have gotten killed, 369 00:16:47,520 --> 00:16:51,920 Speaker 5: the incredible number, more than people had originally expected. How 370 00:16:52,000 --> 00:16:54,760 Speaker 5: much is that going to lead to pressure in a 371 00:16:54,840 --> 00:16:58,640 Speaker 5: new way that Benjamin not to Yahoo, who is not 372 00:16:58,720 --> 00:17:01,040 Speaker 5: exactly popular at home, we'll have to listen to. 373 00:17:03,080 --> 00:17:04,399 Speaker 7: I think that's the core question. 374 00:17:04,800 --> 00:17:10,120 Speaker 10: President persona alone among modern presidents, he considers himself part 375 00:17:10,200 --> 00:17:16,200 Speaker 10: of the Israeli story and is preternaturally his emotional support 376 00:17:16,240 --> 00:17:19,960 Speaker 10: for Israel literally is impressed on his DNA. 377 00:17:20,280 --> 00:17:21,080 Speaker 7: The politics. 378 00:17:21,119 --> 00:17:24,240 Speaker 10: As you point out, he has to be concerned about 379 00:17:24,320 --> 00:17:27,760 Speaker 10: rising the rising type opposition the Democratic Party, but the Republicans, 380 00:17:28,200 --> 00:17:30,159 Speaker 10: who have emerged as the sort of Israel right or 381 00:17:30,160 --> 00:17:34,520 Speaker 10: wrong party, are also waiting for him to pressure the 382 00:17:34,600 --> 00:17:37,679 Speaker 10: Israelis so that they can pressure Joe Biden. And finally, 383 00:17:37,720 --> 00:17:40,480 Speaker 10: there's I think the president's realization that he doesn't have 384 00:17:40,600 --> 00:17:44,160 Speaker 10: many good answers to the two or three critical questions 385 00:17:44,200 --> 00:17:47,800 Speaker 10: that the Israelis are facing with. How do you prosecute 386 00:17:48,040 --> 00:17:52,080 Speaker 10: a ward to eradicate Hamas without an exponential rise in 387 00:17:52,119 --> 00:17:55,679 Speaker 10: Palestinian desks? How do you surge humanitarian assistance into a 388 00:17:55,720 --> 00:17:57,880 Speaker 10: war zone? And finally, what do you do about the 389 00:17:57,920 --> 00:18:02,520 Speaker 10: proverbial day after its weeks and months after? So I 390 00:18:02,560 --> 00:18:05,879 Speaker 10: think part of the reason he's reluctant to press the 391 00:18:06,000 --> 00:18:09,240 Speaker 10: Israeli's hard so far is because he doesn't have better 392 00:18:09,280 --> 00:18:11,760 Speaker 10: answers for them these core questions. 393 00:18:11,880 --> 00:18:14,359 Speaker 1: Aaron David Miller a student of this, with your books 394 00:18:14,440 --> 00:18:16,960 Speaker 1: back thirty years, don't go out thirty years for but 395 00:18:17,000 --> 00:18:19,440 Speaker 1: I'm going to give you five years or ten years forward. 396 00:18:20,160 --> 00:18:24,040 Speaker 1: Is our relationship with Israel irrevocably changed? 397 00:18:25,880 --> 00:18:27,119 Speaker 7: A fascinating question. 398 00:18:27,320 --> 00:18:33,240 Speaker 10: The headline would suggest that generational changes in voter constituency 399 00:18:33,600 --> 00:18:40,800 Speaker 10: in Congress. The growing divergence between United States and the 400 00:18:40,880 --> 00:18:45,040 Speaker 10: values proposition that Israel is a liberal democracy more or 401 00:18:45,119 --> 00:18:48,199 Speaker 10: less seeking the same things that we do, and growing 402 00:18:48,280 --> 00:18:52,679 Speaker 10: policy differences suggest that, yeah, there is a lot of 403 00:18:52,760 --> 00:18:57,240 Speaker 10: fraud tension in this relationship. Whether it's a headline or 404 00:18:57,280 --> 00:18:59,760 Speaker 10: a trend line, that's the key issue. I suspect that 405 00:18:59,800 --> 00:19:02,360 Speaker 10: the operating system that has kept the US's a Reeli 406 00:19:02,440 --> 00:19:08,240 Speaker 10: relationship pretty much very close together is going to continue 407 00:19:08,240 --> 00:19:11,800 Speaker 10: for quite some time. But again, we support Israel because 408 00:19:11,840 --> 00:19:15,080 Speaker 10: it's an American interest to do so, and because it 409 00:19:15,119 --> 00:19:19,320 Speaker 10: reflects American values to do so. When those things change 410 00:19:19,680 --> 00:19:22,040 Speaker 10: in the face of our right wing Israeli government that's 411 00:19:22,080 --> 00:19:25,960 Speaker 10: pursuing opposite policies both at home and with respect to 412 00:19:26,080 --> 00:19:30,040 Speaker 10: diplomacy on the Israeli Polish Ennian issue, then I think 413 00:19:30,080 --> 00:19:32,440 Speaker 10: the US is really relationship will begin to change. 414 00:19:32,760 --> 00:19:35,440 Speaker 2: That tension is continuing to build. And thank you so 415 00:19:35,680 --> 00:19:38,080 Speaker 2: fantastic to hear from you, Aaron David Miller. There of 416 00:19:38,160 --> 00:19:40,280 Speaker 2: the kind of endowment for international pain. 417 00:19:44,440 --> 00:19:48,119 Speaker 1: Torsten Sluck He's chief economist at Appalled Global Management and 418 00:19:48,240 --> 00:19:51,680 Speaker 1: writes a piercing short note each morning and here he 419 00:19:51,800 --> 00:19:55,360 Speaker 1: hearkens back to the skeletons in the closet. 420 00:19:54,920 --> 00:19:57,720 Speaker 6: The worries that those older have about. 421 00:19:57,560 --> 00:20:01,439 Speaker 1: Is this time like well, try nineteen seventy two, Is 422 00:20:01,440 --> 00:20:04,720 Speaker 1: this time like a nifty to fifty or the point 423 00:20:04,760 --> 00:20:08,720 Speaker 1: where Polaroid and Xerox were one of the five Magnificent 424 00:20:08,800 --> 00:20:12,520 Speaker 1: five that we're out there, Doctor Slock joins us this morning. 425 00:20:12,600 --> 00:20:15,240 Speaker 6: I loved the equal multiples. 426 00:20:15,320 --> 00:20:19,159 Speaker 1: Now with nineteen seventy two, I believe that ended ugly. 427 00:20:19,720 --> 00:20:22,040 Speaker 1: Do you take that over to an analog that this 428 00:20:22,080 --> 00:20:22,840 Speaker 1: will end ugly? 429 00:20:23,000 --> 00:20:25,359 Speaker 11: Well, we still, of course have to wait and see 430 00:20:25,400 --> 00:20:28,200 Speaker 11: exactly how AI will be used, and no one really 431 00:20:28,280 --> 00:20:31,320 Speaker 11: knows how it'll be implemented, and how much productivity we'll 432 00:20:31,320 --> 00:20:35,080 Speaker 11: get out of it, how much more consumption or welfare overall. 433 00:20:35,400 --> 00:20:37,320 Speaker 11: But the bottom line really is what we can track 434 00:20:37,760 --> 00:20:40,560 Speaker 11: is the valuations, And what I did right in the 435 00:20:40,600 --> 00:20:43,439 Speaker 11: note today is exactly that the valuations and the trajectory 436 00:20:43,520 --> 00:20:46,160 Speaker 11: is beginning to look quite similar, including the levels we're 437 00:20:46,160 --> 00:20:49,879 Speaker 11: at with the pe for AI stocks or the Magnificent seven. 438 00:20:50,240 --> 00:20:53,440 Speaker 11: Now at above fifty on a trailing basis, it does 439 00:20:53,520 --> 00:20:56,240 Speaker 11: make you wonder a little bit whether this is indeed 440 00:20:56,560 --> 00:20:58,560 Speaker 11: going to have a different story compared to what we've 441 00:20:58,600 --> 00:21:01,720 Speaker 11: seen before, or whether this is actually going to be similard. 442 00:21:01,320 --> 00:21:03,800 Speaker 1: Some I mentioned Tom Galvin years ago at Donald sim 443 00:21:03,840 --> 00:21:07,639 Speaker 1: Lufkin Generator was very top line sales specific. Are we 444 00:21:07,760 --> 00:21:12,160 Speaker 1: going to have the nominal GDP to support the magnificent 445 00:21:12,240 --> 00:21:14,560 Speaker 1: seven even if they level out, or to bring the 446 00:21:14,640 --> 00:21:16,240 Speaker 1: breadth up in a good market. 447 00:21:16,359 --> 00:21:18,880 Speaker 11: Well, the problem is that the SMP four ninety three 448 00:21:19,280 --> 00:21:22,119 Speaker 11: has basically been flat for the last year. So the 449 00:21:22,160 --> 00:21:24,760 Speaker 11: conclusion is that so far all the market gains have 450 00:21:24,800 --> 00:21:27,200 Speaker 11: been driven by this handful of stocks. So that of 451 00:21:27,280 --> 00:21:29,760 Speaker 11: course also should bring us all to the discussion, Okay, 452 00:21:30,119 --> 00:21:31,000 Speaker 11: is this sustainable? 453 00:21:31,080 --> 00:21:31,720 Speaker 7: To what degree? 454 00:21:31,880 --> 00:21:34,119 Speaker 11: Is this something that is a good representation of the 455 00:21:34,320 --> 00:21:36,359 Speaker 11: oral index? If you really end up just buying into 456 00:21:36,359 --> 00:21:38,440 Speaker 11: one simple story, namely AI. 457 00:21:38,440 --> 00:21:39,879 Speaker 5: Which is the reason why a lot of people are 458 00:21:39,920 --> 00:21:42,320 Speaker 5: focused on the consumer to understand exactly where we are 459 00:21:42,359 --> 00:21:44,160 Speaker 5: in this spending picture. And I want to go back 460 00:21:44,160 --> 00:21:46,960 Speaker 5: to what we really began with this idea of are 461 00:21:46,960 --> 00:21:51,119 Speaker 5: we seeing sustained sales and a sustained strong consumer or 462 00:21:51,119 --> 00:21:54,399 Speaker 5: are we just seeing these shifts underway regardless of who 463 00:21:54,520 --> 00:21:55,680 Speaker 5: ends up benefiting the most. 464 00:21:55,840 --> 00:21:57,119 Speaker 9: But shifts underway. 465 00:21:57,359 --> 00:22:01,040 Speaker 5: That represents strength in pockets in the overall picture. 466 00:22:01,160 --> 00:22:03,480 Speaker 11: Yeah, and absolutely, I do think that it's clear that 467 00:22:03,520 --> 00:22:06,719 Speaker 11: the shifts have been towards services. So that's why goods 468 00:22:06,800 --> 00:22:09,600 Speaker 11: have generally been slowing down. Another strength point, as you're 469 00:22:09,640 --> 00:22:12,480 Speaker 11: pointing out, is that we've also seen strengthen online. But 470 00:22:12,520 --> 00:22:14,240 Speaker 11: if you really back up and look at the data 471 00:22:14,280 --> 00:22:16,560 Speaker 11: for how is the consumer doing. Well, we just heard 472 00:22:16,600 --> 00:22:19,040 Speaker 11: your previous guests talk about trading down. If you look 473 00:22:19,040 --> 00:22:20,719 Speaker 11: at the language rates for all the loans have been 474 00:22:20,720 --> 00:22:22,600 Speaker 11: going up, the language rates for credit cards have been 475 00:22:22,640 --> 00:22:25,159 Speaker 11: going up. We're seeing across the board the level of 476 00:22:25,359 --> 00:22:27,800 Speaker 11: interest rates are beginning to bite harder and harder and 477 00:22:27,840 --> 00:22:30,800 Speaker 11: harder on consumers. So the conclusion, of course, is that 478 00:22:31,000 --> 00:22:33,920 Speaker 11: the FED is actually achieving exactly what the textbook would 479 00:22:33,920 --> 00:22:36,639 Speaker 11: have predicted. Namely, the slowdown might not have been as 480 00:22:36,680 --> 00:22:39,160 Speaker 11: fast as we all thought just a few quarters ago, 481 00:22:39,400 --> 00:22:41,320 Speaker 11: but it is still playing out. The slowdown is here 482 00:22:41,320 --> 00:22:43,840 Speaker 11: and it will continue. We still have the worst ahead 483 00:22:43,840 --> 00:22:46,399 Speaker 11: of us. It is the case that monetary policy is 484 00:22:46,400 --> 00:22:49,120 Speaker 11: biting continuously also going forward, what's. 485 00:22:48,920 --> 00:22:52,160 Speaker 5: The distance between goldilocks and a full blown recession. 486 00:22:53,000 --> 00:22:56,280 Speaker 11: Well, the runway that we are on here for slowing 487 00:22:56,280 --> 00:22:58,960 Speaker 11: the economy down. From a FED perspective, certainly is that 488 00:22:59,000 --> 00:23:01,359 Speaker 11: inflation is coming down. The labor market is also gradually 489 00:23:01,400 --> 00:23:03,120 Speaker 11: coming down, and we got to get a soft landing 490 00:23:03,160 --> 00:23:05,760 Speaker 11: not only in invasion but also the labor market. But 491 00:23:05,800 --> 00:23:07,399 Speaker 11: we begin to see that on a plant rate has 492 00:23:07,400 --> 00:23:09,600 Speaker 11: gone up from three point falls now at three point nine. 493 00:23:09,640 --> 00:23:11,520 Speaker 11: That's create a lot of discussion about the PSAM rule 494 00:23:11,560 --> 00:23:13,760 Speaker 11: and to what degree that's an indicator of a recession 495 00:23:13,840 --> 00:23:16,320 Speaker 11: or not. But the conclusion to your question, Lisa is 496 00:23:16,359 --> 00:23:18,280 Speaker 11: I do think that we should view this in the 497 00:23:18,280 --> 00:23:20,720 Speaker 11: broader context of what is it the FIT is trying 498 00:23:20,760 --> 00:23:22,679 Speaker 11: to do? And the FIT is trying to slow the 499 00:23:22,680 --> 00:23:24,800 Speaker 11: economy down. That's why they raise interest rates, they raise 500 00:23:24,840 --> 00:23:27,159 Speaker 11: interust rates because they want us to buy fewer costs 501 00:23:27,240 --> 00:23:31,000 Speaker 11: fuel wash us fuel refrigerators, let's furniture, let fewer iPhones, 502 00:23:31,040 --> 00:23:33,480 Speaker 11: and because of that we should over time continue to 503 00:23:33,520 --> 00:23:34,640 Speaker 11: see that process play out. 504 00:23:34,840 --> 00:23:36,880 Speaker 5: There is a real tension right now, and I see 505 00:23:36,920 --> 00:23:39,560 Speaker 5: this under the notes underpinning the notes calling for five 506 00:23:39,640 --> 00:23:41,600 Speaker 5: thousand or fifty one hundred on the S and P 507 00:23:41,760 --> 00:23:43,919 Speaker 5: by the end of next year, which is how the 508 00:23:43,920 --> 00:23:46,800 Speaker 5: federal respond to the slowdown that they wrought that they 509 00:23:46,880 --> 00:23:50,560 Speaker 5: wanted to see. Will they cut rates aggressively just simply 510 00:23:50,600 --> 00:23:53,840 Speaker 5: because they're tightening the screws at a faster pace as 511 00:23:53,880 --> 00:23:56,600 Speaker 5: growth slows. Do you buy that they will do that 512 00:23:56,680 --> 00:24:01,280 Speaker 5: even if it keeps perhaps the economy flow and prolongs 513 00:24:01,280 --> 00:24:02,439 Speaker 5: this period of disinflation. 514 00:24:02,560 --> 00:24:05,439 Speaker 11: This is a really important discussion in teams. In M language, 515 00:24:05,480 --> 00:24:07,160 Speaker 11: we are looking at the tailor rule. How much weight 516 00:24:07,200 --> 00:24:09,159 Speaker 11: do they put on inflation? How much weight do they 517 00:24:09,160 --> 00:24:11,200 Speaker 11: put on the labor market. So far, all the weight 518 00:24:11,240 --> 00:24:14,359 Speaker 11: has almost entirely been on inflation. And the question is 519 00:24:14,400 --> 00:24:16,960 Speaker 11: next year, once inflation does get closer to two, will 520 00:24:16,960 --> 00:24:19,320 Speaker 11: they begin to shift their attention over towards the label market? 521 00:24:19,359 --> 00:24:21,600 Speaker 11: In other words, are the coefficients changing so that we 522 00:24:21,640 --> 00:24:23,919 Speaker 11: put more weight on the label market. Now that the 523 00:24:23,960 --> 00:24:26,520 Speaker 11: labor market is beginning to show some signs of weakening, 524 00:24:26,720 --> 00:24:28,879 Speaker 11: I appreciate that jobless claims are not slowing, but the 525 00:24:28,920 --> 00:24:30,960 Speaker 11: work week is coming down. If you look at job 526 00:24:31,040 --> 00:24:33,760 Speaker 11: openings is coming down. A number of indicators are suggesting 527 00:24:33,760 --> 00:24:35,560 Speaker 11: that label demand is weakening. So I do think that 528 00:24:35,600 --> 00:24:38,800 Speaker 11: they will begin to shift away from focusing purely on 529 00:24:38,840 --> 00:24:41,520 Speaker 11: inflation to begin to focus. Also more on the label. 530 00:24:41,520 --> 00:24:42,240 Speaker 7: A slock rule. 531 00:24:42,520 --> 00:24:43,359 Speaker 6: It's like the tailor. 532 00:24:43,560 --> 00:24:44,600 Speaker 7: I'm inventing it right now. 533 00:24:44,640 --> 00:24:45,840 Speaker 6: Focus the slock rule. 534 00:24:46,200 --> 00:24:46,719 Speaker 7: Look for this. 535 00:24:46,840 --> 00:24:49,080 Speaker 1: The slock rules is three months moving average and non 536 00:24:49,119 --> 00:24:52,000 Speaker 1: farm payrolls. What statistic do we need on a three 537 00:24:52,000 --> 00:24:54,920 Speaker 1: months moving average of non farm payrolls? Where we make 538 00:24:54,920 --> 00:24:57,200 Speaker 1: the great tailor to slock shift. 539 00:24:57,359 --> 00:24:59,600 Speaker 11: See if you look at your latest number for a 540 00:24:59,640 --> 00:25:02,160 Speaker 11: non found it was one hundred and fifty thousand. If 541 00:25:02,160 --> 00:25:04,800 Speaker 11: idays one eighty eight two, and if I type Ecoco 542 00:25:04,880 --> 00:25:07,159 Speaker 11: on Bloomberg, I will see that by second quarter of 543 00:25:07,240 --> 00:25:09,919 Speaker 11: next year, non found paybrows will on average fall April, 544 00:25:09,920 --> 00:25:12,560 Speaker 11: May and June be thirty five thousand. So now goes 545 00:25:12,600 --> 00:25:15,040 Speaker 11: not wondering, thirty five thousand, So that is not wondering. 546 00:25:15,080 --> 00:25:17,119 Speaker 11: That's the average, So that can have some fluctuation. I 547 00:25:17,160 --> 00:25:18,920 Speaker 11: was not wondering. I always say this and p going 548 00:25:18,920 --> 00:25:20,680 Speaker 11: to trade. If we get thirty five thousand and non 549 00:25:20,680 --> 00:25:23,040 Speaker 11: fund payrose, what if it even goes below zero? The 550 00:25:23,119 --> 00:25:25,320 Speaker 11: risk is here that we may have a runway and 551 00:25:25,359 --> 00:25:28,280 Speaker 11: the lack of effects of Martins hear pology essentially beginning 552 00:25:28,359 --> 00:25:30,119 Speaker 11: to be a big a trag on growth. 553 00:25:30,680 --> 00:25:33,639 Speaker 1: Adobe just out Amy, Thank you so much for this. 554 00:25:33,640 --> 00:25:37,880 Speaker 1: This is Bramo spending this weekend. Adobe a twelve billion 555 00:25:37,960 --> 00:25:42,160 Speaker 1: to twelve point four billion Cyber Monday spend last year 556 00:25:42,200 --> 00:25:46,000 Speaker 1: was eleven point three billion. But to your distinction, that's 557 00:25:46,080 --> 00:25:49,719 Speaker 1: cyber that's just we're parsing out how all of us 558 00:25:49,760 --> 00:25:51,440 Speaker 1: are glued to Amazon. 559 00:25:51,160 --> 00:25:54,600 Speaker 5: And it's cyber Monday today, let alone all the other 560 00:25:54,720 --> 00:25:58,159 Speaker 5: spending that we've seen over this period of time. Really, 561 00:25:58,240 --> 00:26:01,399 Speaker 5: I mean, honestly, the distortions have been incredibly difficult to 562 00:26:01,440 --> 00:26:03,120 Speaker 5: really pick up on, which is the reason why I'm 563 00:26:03,119 --> 00:26:05,760 Speaker 5: listening to what you're saying toward Sten, this idea of 564 00:26:05,800 --> 00:26:09,160 Speaker 5: the labor market weakening and the FED maybe responding to that, 565 00:26:09,520 --> 00:26:12,439 Speaker 5: and I'm thinking about, well, people still have money to spend, 566 00:26:12,480 --> 00:26:14,800 Speaker 5: Their real wages are actually going up, and oh yeah, 567 00:26:14,800 --> 00:26:16,760 Speaker 5: this is a job full recession. 568 00:26:16,280 --> 00:26:17,359 Speaker 9: That people are accepting. 569 00:26:17,680 --> 00:26:20,520 Speaker 5: This is what they say, right, that people are hoarding labor, 570 00:26:20,600 --> 00:26:23,359 Speaker 5: this is a new world. Do you push back against that? 571 00:26:23,440 --> 00:26:25,320 Speaker 11: Well, there is in your weekend reading from the Fed 572 00:26:25,359 --> 00:26:27,320 Speaker 11: the working papers that write about this. There is some 573 00:26:27,359 --> 00:26:29,639 Speaker 11: debate between the Boston Fed, the San Francisco Fed, the 574 00:26:29,680 --> 00:26:31,280 Speaker 11: New York Fed, has also written about this. The Board 575 00:26:31,280 --> 00:26:33,840 Speaker 11: of Prominence has also written about this. The key issue 576 00:26:33,840 --> 00:26:37,040 Speaker 11: still is it's very clear that we are ultimately running 577 00:26:37,040 --> 00:26:39,520 Speaker 11: out of savings, excess savings in the household sex. So 578 00:26:39,560 --> 00:26:42,040 Speaker 11: the question is some people view that has already happened, 579 00:26:42,119 --> 00:26:44,320 Speaker 11: other view that's about now, other view that may only 580 00:26:44,359 --> 00:26:46,320 Speaker 11: happen in the next few quarters. But the trend is 581 00:26:46,400 --> 00:26:49,200 Speaker 11: very clear. The fit is getting what they want. They 582 00:26:49,240 --> 00:26:51,520 Speaker 11: want a slowdown, and that's why you will also madly 583 00:26:51,520 --> 00:26:53,960 Speaker 11: get excess savings running out. And let's not forget student 584 00:26:54,000 --> 00:26:55,880 Speaker 11: dont payment started on the first of Octoba. That's why 585 00:26:55,880 --> 00:26:59,080 Speaker 11: retail sales for Octoba was readtivy week. If we put 586 00:26:59,080 --> 00:27:01,840 Speaker 11: all these things together, I still think that the slowdown continues. 587 00:27:02,040 --> 00:27:04,720 Speaker 5: Deutsche Bank put out a forecast for one hundred and 588 00:27:04,760 --> 00:27:07,360 Speaker 5: seventy five basis points of FED rate cuts next year. 589 00:27:07,640 --> 00:27:10,160 Speaker 5: Is that feasible with the recipe that you just put 590 00:27:10,200 --> 00:27:10,560 Speaker 5: out there. 591 00:27:10,600 --> 00:27:13,120 Speaker 11: Well, that does require, of course quite a hot slowdown 592 00:27:13,160 --> 00:27:15,240 Speaker 11: in the economy. That certainly requires a recession and a 593 00:27:15,240 --> 00:27:17,840 Speaker 11: hot landing. The question is that's not what the contentious 594 00:27:17,880 --> 00:27:20,000 Speaker 11: is expecting at the moment. But it's clear that if 595 00:27:20,040 --> 00:27:22,600 Speaker 11: we do get a shop all slow down, and that 596 00:27:22,720 --> 00:27:25,000 Speaker 11: is also what the contentious is expecting. It's just above 597 00:27:25,040 --> 00:27:29,160 Speaker 11: ceral DP is expecting it below zero. Both scenarios make 598 00:27:29,280 --> 00:27:32,199 Speaker 11: sense on their own, but the conclusion still is we 599 00:27:32,280 --> 00:27:34,600 Speaker 11: still have more downside risk from where we are at 600 00:27:34,600 --> 00:27:34,960 Speaker 11: the moment. 601 00:27:35,119 --> 00:27:36,560 Speaker 1: I got to go back to your day job a 602 00:27:36,560 --> 00:27:38,720 Speaker 1: couple of years ago before you got this easy slog 603 00:27:38,760 --> 00:27:41,840 Speaker 1: with Apollo, and that was a Deutsche Bank Rischie Senak, 604 00:27:41,880 --> 00:27:45,560 Speaker 1: the Prime Minister told our Francine Lacroix adamantly he is 605 00:27:45,600 --> 00:27:49,879 Speaker 1: not prescribing austerity. You and folk arts Landau live this 606 00:27:50,119 --> 00:27:53,240 Speaker 1: at Deutsche Bank, of the continent of Europe and of 607 00:27:53,280 --> 00:27:55,560 Speaker 1: the United Kingdom. Is there a risk they slip into 608 00:27:55,600 --> 00:27:57,880 Speaker 1: an incorrect austere policy. 609 00:27:58,040 --> 00:28:00,080 Speaker 11: Well, the problem is that both the UK and EU 610 00:28:00,480 --> 00:28:03,600 Speaker 11: have some same list of problems at the US broadly speaking, 611 00:28:03,680 --> 00:28:04,600 Speaker 11: and then have some addition. 612 00:28:04,680 --> 00:28:07,720 Speaker 1: We stimulus. We did a lock in New world stimulus. 613 00:28:07,760 --> 00:28:09,800 Speaker 1: They're stuck in the old world. Isn't that simple? 614 00:28:09,960 --> 00:28:12,639 Speaker 11: Well, in some sense, fiscal policy is certainly very different. 615 00:28:12,640 --> 00:28:13,080 Speaker 7: In the US. 616 00:28:13,119 --> 00:28:14,960 Speaker 11: It was much more aggressive than what it was in 617 00:28:14,960 --> 00:28:17,440 Speaker 11: the UK and Europe, and in that sense, all the 618 00:28:17,520 --> 00:28:20,399 Speaker 11: rules that in particular the growth constability plaque in Europe 619 00:28:20,400 --> 00:28:22,639 Speaker 11: but also in the UK have certainly played a very 620 00:28:22,640 --> 00:28:25,120 Speaker 11: critical role in why fiscal policy has been very different 621 00:28:25,240 --> 00:28:26,720 Speaker 11: in the UK relative to the US. 622 00:28:26,760 --> 00:28:29,440 Speaker 5: The fiscal policy will be more expensive than perhaps some 623 00:28:29,480 --> 00:28:31,679 Speaker 5: people would say given where rates are. That's what we 624 00:28:31,720 --> 00:28:35,480 Speaker 5: saw from Germany and the recent prognostications over there. Do 625 00:28:35,520 --> 00:28:36,560 Speaker 5: you think auctions matter? 626 00:28:37,000 --> 00:28:39,160 Speaker 11: I do think auctions matter a lot. And as you know, 627 00:28:39,200 --> 00:28:41,760 Speaker 11: as you just talked about two year, three year, a 628 00:28:41,800 --> 00:28:44,400 Speaker 11: five years and seven year this week is very important. 629 00:28:44,520 --> 00:28:46,160 Speaker 11: And if you go also and look at the auction 630 00:28:46,320 --> 00:28:48,640 Speaker 11: sizes over the last several months, they have gone up 631 00:28:48,920 --> 00:28:50,680 Speaker 11: and as they continue to go up. The risk really 632 00:28:50,720 --> 00:28:53,560 Speaker 11: here is that short rates may eventually come down, but 633 00:28:53,680 --> 00:28:56,240 Speaker 11: we may have a steepener because long rates may potentially 634 00:28:56,240 --> 00:28:58,240 Speaker 11: not come down as much because now we are dealing 635 00:28:58,240 --> 00:29:00,560 Speaker 11: with this supply issue that potentially to put up what 636 00:29:00,640 --> 00:29:02,760 Speaker 11: pressure and limit how much of a time we can 637 00:29:02,800 --> 00:29:03,440 Speaker 11: get in loong rates. 638 00:29:03,520 --> 00:29:06,600 Speaker 1: Let's revisit a banner from two hours ago. Outnumbered again, 639 00:29:06,760 --> 00:29:13,200 Speaker 1: Pharaoh gone slock here. Auctions matter two, No one cares one. 640 00:29:14,000 --> 00:29:15,640 Speaker 5: I think we were at two before. Now I think 641 00:29:15,640 --> 00:29:16,360 Speaker 5: we're at three. 642 00:29:16,640 --> 00:29:19,840 Speaker 6: Yeah, you know, it's just so it's like three to 643 00:29:19,880 --> 00:29:21,880 Speaker 6: one is how we're going to take that matter. 644 00:29:21,960 --> 00:29:23,120 Speaker 5: It depends if you care. 645 00:29:23,360 --> 00:29:25,920 Speaker 11: I care auction a few weeks ago with a matter 646 00:29:25,960 --> 00:29:26,640 Speaker 11: quite alone. 647 00:29:26,480 --> 00:29:27,040 Speaker 9: Yes, exactly. 648 00:29:27,080 --> 00:29:31,320 Speaker 1: Thank you doctor, Please of the tursen go away at 649 00:29:31,400 --> 00:29:32,640 Speaker 1: least till next week. 650 00:29:42,720 --> 00:29:45,720 Speaker 12: By Steve Schwartzman of course Blackstone. Steve, thank you. You 651 00:29:45,800 --> 00:29:49,080 Speaker 12: were just on stage with the Prime Ministeryunak. How much 652 00:29:49,080 --> 00:29:50,920 Speaker 12: are you putting in the UK? What are you most 653 00:29:50,920 --> 00:29:52,800 Speaker 12: excited about when it comes to the UK growth. 654 00:29:52,880 --> 00:29:55,920 Speaker 7: Well, we've been putting a lot of money into the UK. 655 00:29:56,120 --> 00:29:59,480 Speaker 13: First of all, we're doing our headquarters building here, which 656 00:29:59,520 --> 00:30:01,600 Speaker 13: is very significant size building. 657 00:30:01,600 --> 00:30:03,320 Speaker 7: It will be the largest built. 658 00:30:03,040 --> 00:30:07,520 Speaker 13: In the Mayfair area in the last several decades. We 659 00:30:07,720 --> 00:30:11,640 Speaker 13: bought two companies in the last two weeks in the 660 00:30:11,760 --> 00:30:16,360 Speaker 13: United States in the UK, and you know we have 661 00:30:16,440 --> 00:30:23,560 Speaker 13: a total of seventy billion pounds that's close to ninety 662 00:30:23,600 --> 00:30:28,040 Speaker 13: billion dollars of investments in the UK with thirty seven 663 00:30:28,080 --> 00:30:31,960 Speaker 13: thousand people working in these companies in real estate. 664 00:30:32,400 --> 00:30:34,920 Speaker 12: See what stands out as the biggest strength actually for 665 00:30:34,960 --> 00:30:37,040 Speaker 12: the UK. So there are many questions. There was an 666 00:30:37,080 --> 00:30:39,760 Speaker 12: autumn statement we're not sure how they're going to fund 667 00:30:39,800 --> 00:30:42,040 Speaker 12: some of the tax cuts if they continue down the road, 668 00:30:42,320 --> 00:30:44,400 Speaker 12: and we don't know if the Conservatives are in power 669 00:30:44,760 --> 00:30:45,520 Speaker 12: in twelve months. 670 00:30:45,760 --> 00:30:50,600 Speaker 13: Well, the big advantages of the UK are the English language, 671 00:30:51,320 --> 00:30:56,680 Speaker 13: the rule of law. They have a terrific university system, 672 00:30:57,360 --> 00:31:02,720 Speaker 13: they have a great life science areas. They're the number 673 00:31:02,760 --> 00:31:11,000 Speaker 13: one tourist area in Europe, which actually I found surprising, 674 00:31:11,880 --> 00:31:15,200 Speaker 13: and so they have a lot of pockets of strength. 675 00:31:15,800 --> 00:31:20,560 Speaker 13: They've been through a complex time politically, but if you 676 00:31:20,640 --> 00:31:21,880 Speaker 13: look longer. 677 00:31:21,560 --> 00:31:27,120 Speaker 7: Term, the rule of law in the UK is very strong. 678 00:31:27,640 --> 00:31:33,720 Speaker 13: Their regulatory posture has been quite consistent over time. But 679 00:31:33,840 --> 00:31:39,880 Speaker 13: we forget that these are good things and not all 680 00:31:39,960 --> 00:31:44,440 Speaker 13: places in the world have them, and so I think 681 00:31:45,440 --> 00:31:50,400 Speaker 13: I'm not an expert on the UK, you know, sort 682 00:31:50,440 --> 00:31:53,880 Speaker 13: of laws in the sense of what they're doing politically. 683 00:31:53,920 --> 00:31:58,280 Speaker 13: I think their autumn statement on balance, which was stimulative, 684 00:31:59,400 --> 00:32:03,600 Speaker 13: is and necessary thing for their economy. 685 00:32:04,600 --> 00:32:05,560 Speaker 7: And they have. 686 00:32:05,600 --> 00:32:11,240 Speaker 13: A much more open approach to immigration at the top 687 00:32:11,360 --> 00:32:17,280 Speaker 13: levels of education, which is good for helping to power 688 00:32:17,960 --> 00:32:22,720 Speaker 13: an economy. So I think there's some interesting things going 689 00:32:22,760 --> 00:32:23,320 Speaker 13: on here. 690 00:32:24,080 --> 00:32:26,480 Speaker 12: Steve, what can you tell us about private market valuations 691 00:32:26,520 --> 00:32:30,240 Speaker 12: at Pe firms? So in general. Do you see LPs 692 00:32:30,280 --> 00:32:35,000 Speaker 12: actually demanding more information on marks and more reporting requirements 693 00:32:35,000 --> 00:32:36,960 Speaker 12: and evaluation. Is that something that's shifting. 694 00:32:37,960 --> 00:32:44,479 Speaker 13: I don't see a big set of enormous concerns on that. 695 00:32:45,320 --> 00:32:49,840 Speaker 13: What always happens at this stage and the cycle, you know, 696 00:32:49,880 --> 00:32:53,880 Speaker 13: when you go to very high interest rates and the 697 00:32:53,920 --> 00:32:58,840 Speaker 13: world sort of starts slowing down, is that deals slow down. 698 00:32:59,320 --> 00:33:01,960 Speaker 13: So for l P is their biggest concern is they're 699 00:33:01,960 --> 00:33:05,240 Speaker 13: not getting capital flows back that. 700 00:33:05,120 --> 00:33:09,960 Speaker 7: They normally were depending on. Just people aren't selling assets. 701 00:33:11,480 --> 00:33:16,680 Speaker 13: These types of cycles always end and things returns to normal. 702 00:33:17,200 --> 00:33:22,160 Speaker 13: It's quite interesting that, you know, we just did two 703 00:33:22,200 --> 00:33:25,800 Speaker 13: deals in the UK in the last two weeks, one 704 00:33:25,840 --> 00:33:30,640 Speaker 13: in the affordable in what they call social housing area, 705 00:33:30,840 --> 00:33:38,120 Speaker 13: one in computer software. Both are million billion dollar, two 706 00:33:38,200 --> 00:33:43,440 Speaker 13: billion dollar type deals. We're doing a number of things 707 00:33:43,480 --> 00:33:46,600 Speaker 13: in the US now, some of which have been announced, 708 00:33:46,600 --> 00:33:50,720 Speaker 13: some of which haven't. We just were involved with a 709 00:33:50,800 --> 00:33:54,080 Speaker 13: situation in Norway that's twelve billion dollars. 710 00:33:54,560 --> 00:33:56,080 Speaker 7: So the deal. 711 00:33:55,920 --> 00:34:01,840 Speaker 13: Business is not totally in mothballs, and these things start again, 712 00:34:02,720 --> 00:34:07,440 Speaker 13: and I think we're more on that side of the cycle. 713 00:34:08,120 --> 00:34:13,240 Speaker 13: Although it has been you know, somewhat dreary for a year. 714 00:34:13,960 --> 00:34:16,080 Speaker 12: In terms, for example of real estate, I think you're 715 00:34:16,239 --> 00:34:18,800 Speaker 12: raising an opportunity to stake funds ten billion. 716 00:34:19,040 --> 00:34:23,400 Speaker 13: How's that going, Well, we're raising money for a European fund. Actually, 717 00:34:23,440 --> 00:34:25,800 Speaker 13: we're always raising money for a lot of funds for 718 00:34:25,840 --> 00:34:29,399 Speaker 13: ran scene, and you know, we're gone through a big 719 00:34:29,440 --> 00:34:30,640 Speaker 13: fund raising cycle. 720 00:34:31,080 --> 00:34:34,720 Speaker 7: So we have over two hundred billion dollars. 721 00:34:34,760 --> 00:34:38,440 Speaker 13: It's one of the biggest pools of uninvested capital in 722 00:34:38,480 --> 00:34:40,440 Speaker 13: the world and that will be. 723 00:34:40,480 --> 00:34:43,040 Speaker 7: Deployed in due course. 724 00:34:43,600 --> 00:34:47,399 Speaker 13: Interestingly, in real estate, which you just asked about, we're 725 00:34:47,400 --> 00:34:53,200 Speaker 13: seeing a good deal of volume of buying things in 726 00:34:53,280 --> 00:34:59,760 Speaker 13: Europe because European real estate is under pressure in large 727 00:34:59,760 --> 00:35:05,479 Speaker 13: parts because interest rates were so low here for so long. 728 00:35:05,600 --> 00:35:09,880 Speaker 13: Sometimes in countries they were negative, so the barring costs 729 00:35:10,480 --> 00:35:13,680 Speaker 13: to own real estate were next to nothing, and. 730 00:35:13,640 --> 00:35:17,080 Speaker 7: Now it's closer to six percent. So if you have to. 731 00:35:16,960 --> 00:35:20,240 Speaker 13: Carry a whole portfolio that used to cost you next 732 00:35:20,239 --> 00:35:23,560 Speaker 13: to nothing at six percent, they need to sell things, 733 00:35:24,080 --> 00:35:29,200 Speaker 13: you know, it's necessary to just hold their other properties. 734 00:35:29,560 --> 00:35:34,400 Speaker 13: And so we're seeing some very very good buys in 735 00:35:34,440 --> 00:35:38,759 Speaker 13: that kind of environment because unlike most people, we have 736 00:35:39,040 --> 00:35:42,720 Speaker 13: enormous capital and can buy the types of real estate 737 00:35:43,480 --> 00:35:48,520 Speaker 13: that we like, whether they're data centers, whether they're warehouses, 738 00:35:48,640 --> 00:35:53,080 Speaker 13: whether they're student housing, where those sectors have done very well. 739 00:35:53,560 --> 00:35:56,040 Speaker 12: See what can you tell us about great? So, have 740 00:35:56,080 --> 00:36:00,120 Speaker 12: you seen any redemptions in that? How's that going? It 741 00:36:00,680 --> 00:36:03,480 Speaker 12: breaks greats? How do you say b r e it 742 00:36:03,640 --> 00:36:05,200 Speaker 12: t you say. 743 00:36:05,560 --> 00:36:09,000 Speaker 13: B reat Yeah, Well, those those redemptions have gone down. 744 00:36:10,200 --> 00:36:12,880 Speaker 13: You know, they're I think forty or something like that 745 00:36:13,000 --> 00:36:18,640 Speaker 13: of what they were a year ago. And so that 746 00:36:18,640 --> 00:36:23,520 Speaker 13: that pool of capital is actually doing quite well compared 747 00:36:23,520 --> 00:36:27,880 Speaker 13: to almost all of the real estate, and so you know, 748 00:36:28,120 --> 00:36:32,040 Speaker 13: we look forward to that sort of ultimately going back 749 00:36:32,120 --> 00:36:34,800 Speaker 13: to a very normal kind of world. 750 00:36:35,680 --> 00:36:36,160 Speaker 9: Overall. 751 00:36:36,960 --> 00:36:40,560 Speaker 12: Does UK politics seem benign compared to the US, but 752 00:36:40,600 --> 00:36:42,680 Speaker 12: also what we saw in the Netherlands. 753 00:36:42,120 --> 00:36:46,879 Speaker 13: Well, you know, commenting on politics of other countries, let 754 00:36:46,920 --> 00:36:51,680 Speaker 13: alone our own, which has a sense of drama and 755 00:36:52,640 --> 00:36:58,040 Speaker 13: you know sort of incredulity is outside of my remit. 756 00:36:58,560 --> 00:37:01,320 Speaker 12: Fair Steve Schwartz with a thank you so much. As always, 757 00:37:01,440 --> 00:37:04,440 Speaker 12: Steve also has to get to another meeting right here, 758 00:37:04,480 --> 00:37:06,920 Speaker 12: because people are coming and going in all the corridors 759 00:37:06,920 --> 00:37:08,200 Speaker 12: of course of Hampton Court Palace. 760 00:37:08,280 --> 00:37:12,960 Speaker 1: John subscribe to the Bloomberg Surveillance Podcast on Apple, Spotify, 761 00:37:13,040 --> 00:37:17,480 Speaker 1: and anywhere else you get your podcasts. Listen live every weekday, 762 00:37:17,719 --> 00:37:21,200 Speaker 1: starting at seven am Eastern. I'm Bloomberg dot Com, the 763 00:37:21,360 --> 00:37:23,680 Speaker 1: iHeartRadio app, tune In. 764 00:37:23,840 --> 00:37:25,320 Speaker 6: And the Bloomberg Business app. 765 00:37:25,760 --> 00:37:29,440 Speaker 1: You can watch us live on Bloomberg Television and always 766 00:37:29,800 --> 00:37:32,360 Speaker 1: I'm the Bloomberg Terminal. Thanks for listening. 767 00:37:32,840 --> 00:37:35,640 Speaker 6: I'm Tom Keen, and this is Bloomberg