1 00:00:04,880 --> 00:00:07,960 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Paul Sweeney along 2 00:00:07,960 --> 00:00:10,319 Speaker 1: with Tom Keene. Join us each day for insight from 3 00:00:10,320 --> 00:00:13,840 Speaker 1: the best in economics, geopolitics, finance, and investment. You can 4 00:00:13,880 --> 00:00:17,520 Speaker 1: also watch the show live on YouTube. Visit the Bloomberg 5 00:00:17,560 --> 00:00:20,840 Speaker 1: Podcast channel on YouTube to see the show weekday mornings 6 00:00:20,840 --> 00:00:23,480 Speaker 1: from seven to ten Eastern Remark Global Headquarters at New 7 00:00:23,560 --> 00:00:26,799 Speaker 1: York City. Subscribe to the podcast on Apple, Spotify, or 8 00:00:26,840 --> 00:00:29,880 Speaker 1: anywhere else you listen, and as always on Bloomberg Radio, 9 00:00:29,920 --> 00:00:32,599 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. I don't 10 00:00:32,640 --> 00:00:35,959 Speaker 1: know what's happening here. This economy looks darnstrong. We got 11 00:00:35,960 --> 00:00:38,239 Speaker 1: some data last week, particularly the jobs front, that just 12 00:00:38,240 --> 00:00:40,560 Speaker 1: shows you how strong the economy is, and it just 13 00:00:40,640 --> 00:00:43,160 Speaker 1: kind of getting people increasingly saying, maybe this feeder reserve 14 00:00:43,280 --> 00:00:44,879 Speaker 1: does not have to. 15 00:00:44,960 --> 00:00:45,839 Speaker 2: Rush too much. 16 00:00:45,960 --> 00:00:48,280 Speaker 1: Let's check in with somebody who who knows this stuff 17 00:00:48,520 --> 00:00:51,040 Speaker 1: better than we do. Jennifer Lee, Senior economist and Managing 18 00:00:51,080 --> 00:00:54,360 Speaker 1: director at BIMO Capital Markets. Hey, Jennifer, we got some 19 00:00:54,400 --> 00:00:56,920 Speaker 1: really strong economic data last week. I mean that jobs 20 00:00:56,960 --> 00:00:59,240 Speaker 1: report just kind of blew out expectations, and then we 21 00:00:59,520 --> 00:01:02,280 Speaker 1: have to fit chair. Last night before the Grammy's on 22 00:01:02,280 --> 00:01:04,920 Speaker 1: sixty minutes saying there were no rush to really cut 23 00:01:05,000 --> 00:01:07,360 Speaker 1: rates here? What do you think the Fed is kind 24 00:01:07,360 --> 00:01:09,120 Speaker 1: of doing? Here is a digest a lot of this 25 00:01:09,200 --> 00:01:10,520 Speaker 1: economic data we've been getting. 26 00:01:12,040 --> 00:01:13,760 Speaker 3: Well, good morning, and thanks for having me on. I 27 00:01:13,760 --> 00:01:15,600 Speaker 3: got to tell you, it's like, just a few minutes 28 00:01:15,640 --> 00:01:19,520 Speaker 3: after that number came out on Friday, my first thought was, 29 00:01:19,640 --> 00:01:21,760 Speaker 3: are we even talking about rate cuts anymore? I mean, 30 00:01:21,800 --> 00:01:24,480 Speaker 3: do we even need to? I mean, that's I'm glad 31 00:01:24,520 --> 00:01:25,679 Speaker 3: that I'm not the only one I was thinking that 32 00:01:25,680 --> 00:01:27,760 Speaker 3: way because I thought, what am I missing? But I 33 00:01:27,800 --> 00:01:30,480 Speaker 3: think it's it's the whole you know, those keywords of 34 00:01:30,520 --> 00:01:32,679 Speaker 3: being patient and what was that where that he kept 35 00:01:32,720 --> 00:01:35,440 Speaker 3: using over and over again after during his press conference 36 00:01:35,520 --> 00:01:38,920 Speaker 3: was being confident and being confident that inflation is coming 37 00:01:38,959 --> 00:01:42,040 Speaker 3: down to two percent, etcetera, etcetera. He needs, They need 38 00:01:42,040 --> 00:01:45,319 Speaker 3: a lot more confidence that you know that that inflation 39 00:01:45,400 --> 00:01:47,680 Speaker 3: again is coming back down to target before they actually 40 00:01:47,720 --> 00:01:49,560 Speaker 3: start to raise rates and of course or start to 41 00:01:49,560 --> 00:01:52,600 Speaker 3: cut rates. And of course this kind of number throws 42 00:01:52,720 --> 00:01:56,800 Speaker 3: I think everyone off, you know, off completely, so you 43 00:01:56,880 --> 00:01:58,320 Speaker 3: have to sort of, you know, read it, get this 44 00:01:58,360 --> 00:02:00,880 Speaker 3: a little bit. Reading the communications a little bit, but 45 00:02:00,960 --> 00:02:03,680 Speaker 3: sort of keep the story on path about rate cuts coming, 46 00:02:03,840 --> 00:02:07,520 Speaker 3: but just not sooner rather than not, but later, of course, 47 00:02:07,560 --> 00:02:08,440 Speaker 3: not rather than sooner. 48 00:02:08,680 --> 00:02:12,040 Speaker 4: Yeah, Jennifer, recalibrating those rate cut expectations. When do you 49 00:02:12,160 --> 00:02:15,080 Speaker 4: think the Fed start to pull the trigger. I'm just 50 00:02:15,080 --> 00:02:18,400 Speaker 4: looking at the warp function WRP on the terminal pricing 51 00:02:18,440 --> 00:02:20,560 Speaker 4: in right now, in June than July and September. What 52 00:02:20,840 --> 00:02:21,639 Speaker 4: are you making of that? 53 00:02:22,760 --> 00:02:25,040 Speaker 3: Yes, that sounds good to me. So we haven't you know, 54 00:02:25,080 --> 00:02:27,960 Speaker 3: we were again, we were debating this on Friday as well, 55 00:02:28,000 --> 00:02:31,200 Speaker 3: but we're going to stick to our July rate cut 56 00:02:31,240 --> 00:02:34,160 Speaker 3: for the for the first move. You know, we had always, 57 00:02:34,280 --> 00:02:36,760 Speaker 3: you know, wondered what we were missing, why the market 58 00:02:36,800 --> 00:02:40,079 Speaker 3: was thinking about March. But you know, I'm glad, I'm 59 00:02:40,080 --> 00:02:42,720 Speaker 3: actually quite glad that fencechair pell sort of put all 60 00:02:42,760 --> 00:02:46,720 Speaker 3: those concerns to rest went by dismissing March last week. 61 00:02:46,760 --> 00:02:49,320 Speaker 3: But we're going to stick with our July rate cut 62 00:02:49,560 --> 00:02:52,080 Speaker 3: to be the first move, and then four moves in 63 00:02:52,080 --> 00:02:54,080 Speaker 3: total during the years, so one hundred basis points in 64 00:02:54,080 --> 00:02:55,399 Speaker 3: total for twenty twenty four. 65 00:02:55,600 --> 00:02:58,080 Speaker 1: Hey, Jennifer, you're looking around the world and it seems 66 00:02:58,160 --> 00:03:01,760 Speaker 1: like the US economy is kind of the exception. 67 00:03:01,360 --> 00:03:02,399 Speaker 2: Here rather than a rule. 68 00:03:02,440 --> 00:03:05,959 Speaker 1: We've got continued weakness in Europe, even including the you know, 69 00:03:05,960 --> 00:03:09,760 Speaker 1: obviously the most important economy over there being Germany. China 70 00:03:10,400 --> 00:03:14,760 Speaker 1: just well below expectations. Does this surprise you that maybe 71 00:03:14,760 --> 00:03:17,600 Speaker 1: the US is doing as well as it is, giving 72 00:03:17,600 --> 00:03:19,840 Speaker 1: that its main trading partners aren't. 73 00:03:21,639 --> 00:03:23,280 Speaker 3: A little bit I'm gonna say, I'm gonna make that 74 00:03:23,639 --> 00:03:25,720 Speaker 3: a little bit makes me a little bit concerned. At 75 00:03:25,720 --> 00:03:28,840 Speaker 3: the same time, you know, again, I'm just always wondering, 76 00:03:28,840 --> 00:03:31,000 Speaker 3: you know, what's what's going to come down next? Is 77 00:03:31,040 --> 00:03:34,040 Speaker 3: going to throw everybody off. But you know, it gives 78 00:03:34,560 --> 00:03:37,680 Speaker 3: support to the IMF last week and the OCD this morning, 79 00:03:37,680 --> 00:03:40,720 Speaker 3: you know, raising their global growth prodcasts for this year 80 00:03:40,760 --> 00:03:44,640 Speaker 3: and sort of study for twenty twenty five on the 81 00:03:44,680 --> 00:03:48,440 Speaker 3: back of a strong resilient US economy. Remarkably resilient, I 82 00:03:48,480 --> 00:03:51,240 Speaker 3: think was what the IMF called it. And meanwtime, you know, 83 00:03:51,280 --> 00:03:53,520 Speaker 3: it's and it stands and start contrast with what we're 84 00:03:53,520 --> 00:03:55,640 Speaker 3: seeing in China. But you know, roughly four and a 85 00:03:55,680 --> 00:03:58,400 Speaker 3: half percent growth this year in Europe, which I think 86 00:03:58,440 --> 00:04:01,480 Speaker 3: is just barely just struggling to even grow. You know, 87 00:04:01,480 --> 00:04:03,839 Speaker 3: we're looking for about a half percentage point increase this year. 88 00:04:04,200 --> 00:04:06,160 Speaker 3: And that also shows up when you're looking at the 89 00:04:06,160 --> 00:04:08,920 Speaker 3: different central banks. You've got the FED who's still again 90 00:04:08,960 --> 00:04:11,720 Speaker 3: talking about great cuts but being but sort of pushing 91 00:04:11,760 --> 00:04:14,960 Speaker 3: it off the start date further off into the distance. 92 00:04:15,360 --> 00:04:17,200 Speaker 3: You've got the ECB debating, you know, whether or not 93 00:04:17,279 --> 00:04:18,719 Speaker 3: they're probably going to go in June, by the way, 94 00:04:19,680 --> 00:04:21,240 Speaker 3: and then of course the Big of England who just 95 00:04:21,480 --> 00:04:25,200 Speaker 3: ditched their tightening bias and Governor Bailey said that point blank, 96 00:04:25,520 --> 00:04:27,400 Speaker 3: and now they're talking about when rates are going to 97 00:04:27,480 --> 00:04:31,120 Speaker 3: come down. So it's a very much different discussion is 98 00:04:31,160 --> 00:04:33,240 Speaker 3: taking place around the world among central banks. 99 00:04:33,760 --> 00:04:36,920 Speaker 4: Jennifer ben Emmons just told us basically kind of reiterating 100 00:04:37,120 --> 00:04:40,520 Speaker 4: j Powell's point that the bigger concern, biggest concern, if 101 00:04:40,520 --> 00:04:43,719 Speaker 4: you will, is geopolitical risk. How are you taking that 102 00:04:43,800 --> 00:04:48,040 Speaker 4: into account? Just given the continuing wars going on across 103 00:04:48,080 --> 00:04:50,120 Speaker 4: the pond, that. 104 00:04:50,120 --> 00:04:52,440 Speaker 3: Is probably one of those, you know, those big sources 105 00:04:52,440 --> 00:04:54,680 Speaker 3: of uncertainty that you know that all the data in 106 00:04:54,680 --> 00:04:56,279 Speaker 3: the world are not going to be able to predict. 107 00:04:56,640 --> 00:04:59,360 Speaker 3: You know, you've got not only just like the actual 108 00:04:59,400 --> 00:05:02,560 Speaker 3: war itself, but of course the economic impact in terms 109 00:05:02,600 --> 00:05:05,200 Speaker 3: of inflationary impact. You know, it may not be what 110 00:05:05,240 --> 00:05:07,320 Speaker 3: we saw back you know, in terms of supply chain issues, 111 00:05:07,360 --> 00:05:09,200 Speaker 3: not what we saw back in the during the pandemic, 112 00:05:09,440 --> 00:05:11,880 Speaker 3: but it's still having an impact, especially with you know, 113 00:05:12,720 --> 00:05:16,400 Speaker 3: very few ships going through the Red Sea nowadays and 114 00:05:16,839 --> 00:05:20,040 Speaker 3: going around Africa instead to get from Europe to China 115 00:05:20,160 --> 00:05:22,640 Speaker 3: or around the other way around. So that's adding another 116 00:05:22,720 --> 00:05:25,480 Speaker 3: ten days last time I checked. You know, all the 117 00:05:25,520 --> 00:05:27,480 Speaker 3: ships are all using oil as well, so it's all 118 00:05:27,720 --> 00:05:29,280 Speaker 3: it's not an ev it's not you know, they're not 119 00:05:29,400 --> 00:05:33,000 Speaker 3: using battery batteries to runder ships. So this is all 120 00:05:33,080 --> 00:05:36,000 Speaker 3: potentially inflationary, not as much as what we saw back 121 00:05:36,040 --> 00:05:38,200 Speaker 3: in twenty twenty, of course, but this adds a lot 122 00:05:38,200 --> 00:05:41,640 Speaker 3: of pressure I think on what center banks are watching again, 123 00:05:41,800 --> 00:05:44,039 Speaker 3: not only just the word themselves, but the economic impact. 124 00:05:44,720 --> 00:05:46,680 Speaker 1: Jennifer, I've seen the US dollars kind of rallying here 125 00:05:46,720 --> 00:05:48,239 Speaker 1: a little bit in the last several weeks, I guess, 126 00:05:48,279 --> 00:05:51,840 Speaker 1: expectations that maybe the FED won't be as aggressive as 127 00:05:51,839 --> 00:05:54,880 Speaker 1: maybe we originally thought and cutting rates here. How do 128 00:05:54,880 --> 00:05:57,359 Speaker 1: you think about the currency markets and the dollar here? 129 00:05:58,320 --> 00:06:00,160 Speaker 3: So the current America has been like the one of 130 00:06:00,240 --> 00:06:03,040 Speaker 3: the most toughest things to call over the past few years. 131 00:06:03,080 --> 00:06:05,440 Speaker 3: It's it's been always, at least last few years, it 132 00:06:05,440 --> 00:06:07,600 Speaker 3: has been very much of a strong US dollar story. 133 00:06:07,920 --> 00:06:10,040 Speaker 3: Now this year, we're still looking for the US dollars 134 00:06:10,040 --> 00:06:12,160 Speaker 3: to weekend some much just you know, in theory, when 135 00:06:12,279 --> 00:06:14,000 Speaker 3: you know the Fed starting to cut rates, that should 136 00:06:14,000 --> 00:06:16,039 Speaker 3: take some of the wind out of the US dollars sales. 137 00:06:16,080 --> 00:06:18,479 Speaker 3: But you know, I think I said this before. I 138 00:06:18,480 --> 00:06:20,960 Speaker 3: think it's all about perception. If all the economies around 139 00:06:20,960 --> 00:06:23,680 Speaker 3: the world are slowing, but the US is slowing the 140 00:06:23,760 --> 00:06:25,600 Speaker 3: leads or at the slowest pace, if you know what 141 00:06:25,600 --> 00:06:27,599 Speaker 3: I mean. You know, I think that would actually give 142 00:06:27,640 --> 00:06:30,200 Speaker 3: support to the US dollars. So even though it's going 143 00:06:30,240 --> 00:06:31,520 Speaker 3: to you know, we look for the green back to 144 00:06:31,520 --> 00:06:33,680 Speaker 3: weaken somewhat, I don't think it's gonna be weakening as 145 00:06:33,760 --> 00:06:36,120 Speaker 3: much as we had originally anticipated, say a half a 146 00:06:36,200 --> 00:06:36,640 Speaker 3: year ago. 147 00:06:37,320 --> 00:06:40,360 Speaker 4: With payrolls out of the way, with as Paul pointed out, 148 00:06:40,720 --> 00:06:45,520 Speaker 4: uh J. Powell kind of kicking off Grammy's Night, what's next? 149 00:06:45,560 --> 00:06:47,479 Speaker 2: What is on? What are you looking forward to? 150 00:06:47,560 --> 00:06:50,680 Speaker 4: What do you have in the days weeks ahead that 151 00:06:50,920 --> 00:06:52,240 Speaker 4: can really drive this market. 152 00:06:53,720 --> 00:06:56,080 Speaker 3: I think it's going to I mean, it's not like 153 00:06:56,120 --> 00:06:57,400 Speaker 3: a work a record, but it's all going to be 154 00:06:57,480 --> 00:06:59,800 Speaker 3: coming back down to data, all the keys, all the 155 00:06:59,880 --> 00:07:01,839 Speaker 3: key numbers. We can't only just look at, just like 156 00:07:01,880 --> 00:07:03,359 Speaker 3: with payrolls, you know, you can't just look at this 157 00:07:03,440 --> 00:07:06,560 Speaker 3: one report on its own. But it's for the inflation 158 00:07:06,640 --> 00:07:09,640 Speaker 3: data for sure. We're looking at CPI and even producer 159 00:07:09,680 --> 00:07:13,600 Speaker 3: prices just as an indicator of prices coming through the pipeline, 160 00:07:13,760 --> 00:07:17,040 Speaker 3: and certainly the PC de flavors, and of course consumer spending, 161 00:07:17,200 --> 00:07:20,520 Speaker 3: the all important consumer spending numbers again not just retail sales, 162 00:07:20,520 --> 00:07:23,280 Speaker 3: but the all inclusive PC report, just to see how 163 00:07:23,320 --> 00:07:26,240 Speaker 3: broader spending patterns are. You know, I think overall, you 164 00:07:26,520 --> 00:07:28,400 Speaker 3: as long as you have strong jobs, you're still going 165 00:07:28,440 --> 00:07:32,840 Speaker 3: to see solid fundamentals below. The US consumer, you know, 166 00:07:32,840 --> 00:07:34,720 Speaker 3: they don't have to spend spend all their all their 167 00:07:34,760 --> 00:07:37,080 Speaker 3: hard ar and serving the savings right away. But at 168 00:07:37,120 --> 00:07:39,280 Speaker 3: the same time, it gives them support that it puts 169 00:07:39,320 --> 00:07:41,640 Speaker 3: them away for a rainy day, and that will help them, 170 00:07:41,800 --> 00:07:45,120 Speaker 3: you know, that will actually help support the US economy 171 00:07:45,200 --> 00:07:47,680 Speaker 3: going forward, as opposed to you know, just having everything 172 00:07:47,720 --> 00:07:48,760 Speaker 3: spent all in one quarter. 173 00:07:49,160 --> 00:07:51,920 Speaker 1: All right, Jennifer, thank you very much, As always, Jennifer Lee. 174 00:07:52,000 --> 00:07:55,400 Speaker 1: She's a senior economist managing director of PEMO Capital Markets, 175 00:07:55,400 --> 00:08:08,680 Speaker 1: located up there in Toronto. Nobody better to talk to 176 00:08:08,680 --> 00:08:10,880 Speaker 1: geopolitics than Mick Molroy. He's a co founder of the 177 00:08:10,960 --> 00:08:14,880 Speaker 1: Lobo Institute. The Lobo Institute consults, advisors and teachers on 178 00:08:14,960 --> 00:08:16,840 Speaker 1: current and future conflicts. 179 00:08:17,000 --> 00:08:18,920 Speaker 2: His resume is just extraordinary. 180 00:08:19,120 --> 00:08:21,960 Speaker 1: Former Deputy Assistant Secretary of Defense for the Middle East 181 00:08:21,960 --> 00:08:25,920 Speaker 1: at the US Department of Defense, former Paramilitary Operations officer 182 00:08:25,960 --> 00:08:28,520 Speaker 1: at CIA, I've heard of them, and a former US 183 00:08:28,560 --> 00:08:31,160 Speaker 1: Marine Infantry officer for like I know, twenty six years. 184 00:08:31,240 --> 00:08:34,200 Speaker 1: We thank him very much for his military service. McK 185 00:08:34,280 --> 00:08:37,640 Speaker 1: moulroy joins us. Hey, Mick, it's heating up. Perhaps. I 186 00:08:37,679 --> 00:08:39,360 Speaker 1: think the risk for a lot of folks shares we 187 00:08:39,360 --> 00:08:41,760 Speaker 1: think about the Middle East is seems like the scope 188 00:08:41,760 --> 00:08:44,720 Speaker 1: heare might be expanding. Where are we right now and 189 00:08:44,760 --> 00:08:46,400 Speaker 1: what are the risks do you think in that part 190 00:08:46,440 --> 00:08:46,920 Speaker 1: of the world. 191 00:08:48,760 --> 00:08:50,880 Speaker 5: Great to be with you, guys, and I just returned 192 00:08:50,880 --> 00:08:54,679 Speaker 5: from Israel, where I was in a lot of discussions 193 00:08:54,760 --> 00:08:57,360 Speaker 5: on these things, these topics, and of course Secretary Blanken 194 00:08:57,960 --> 00:08:59,559 Speaker 5: is in the region right now and he's going to 195 00:08:59,600 --> 00:09:03,320 Speaker 5: be pushed on several things. Of course, specifically to the 196 00:09:03,360 --> 00:09:06,760 Speaker 5: war in Gaza. He's going to be talking about the 197 00:09:06,840 --> 00:09:12,600 Speaker 5: needs of transition to a lower intensity combative situation, and 198 00:09:12,640 --> 00:09:16,080 Speaker 5: of course Israel still has their strategic aim to military 199 00:09:16,200 --> 00:09:19,280 Speaker 5: league defeat Hamas, but that is not going to be 200 00:09:19,720 --> 00:09:21,720 Speaker 5: done anytime soon. He's going to be talking about the 201 00:09:21,760 --> 00:09:24,040 Speaker 5: need for increasing umanitarian aid. And then to the point 202 00:09:24,080 --> 00:09:27,000 Speaker 5: of her question, this is a conflict that has already 203 00:09:27,080 --> 00:09:30,960 Speaker 5: expanded across the region with the Huthis attacks in the 204 00:09:31,000 --> 00:09:34,000 Speaker 5: Red Sea, in the Gulf of Aden and the near 205 00:09:34,040 --> 00:09:37,120 Speaker 5: continuous attacks on our forces in Syria and Iraq. That 206 00:09:37,400 --> 00:09:40,120 Speaker 5: might continue and might have to be even more of 207 00:09:40,160 --> 00:09:42,560 Speaker 5: a substantial response that we've seen in so far. So 208 00:09:42,600 --> 00:09:45,560 Speaker 5: there is and then lastly, i'd say when it comes 209 00:09:45,559 --> 00:09:49,000 Speaker 5: to expansion, there's always a concern of Hezbollah in Lebanon 210 00:09:49,080 --> 00:09:52,200 Speaker 5: and expanding that to include two front war in Israel. 211 00:09:52,480 --> 00:09:55,320 Speaker 5: So this is something that is it's a tinderbox. I 212 00:09:55,360 --> 00:09:59,040 Speaker 5: would argue that it's already happening. The question is whether 213 00:09:59,080 --> 00:10:02,200 Speaker 5: we can invent this from becoming a war that's directly 214 00:10:02,240 --> 00:10:06,200 Speaker 5: between the United States in Iran, and that's to be determined. 215 00:10:06,200 --> 00:10:08,880 Speaker 4: I would say, yeah, what canon should be done in 216 00:10:08,920 --> 00:10:10,680 Speaker 4: your view to prevent that from happening. 217 00:10:12,360 --> 00:10:15,000 Speaker 5: So there's a fine balance when it comes to our 218 00:10:15,120 --> 00:10:20,280 Speaker 5: responses to these attacks, for example, both against commercial shipping 219 00:10:21,360 --> 00:10:25,400 Speaker 5: and our very naval forces that are there, and then 220 00:10:25,679 --> 00:10:29,080 Speaker 5: these continuous attacks against our positions in Iraq and Syria. 221 00:10:29,240 --> 00:10:32,240 Speaker 5: I think the administration has now decided that they have 222 00:10:32,280 --> 00:10:35,079 Speaker 5: to be more forceable because they're obviously not reaching the 223 00:10:35,160 --> 00:10:39,280 Speaker 5: level deterrence that they wanted, and those attacks are now 224 00:10:39,320 --> 00:10:44,080 Speaker 5: going after I think IRGC positions, that's the Iranian Special 225 00:10:44,080 --> 00:10:47,880 Speaker 5: Operation Forces that works with the APPROXY forces in Syria 226 00:10:47,880 --> 00:10:51,280 Speaker 5: and Iraq, but it might eventually include targets in Iran. 227 00:10:51,320 --> 00:10:55,280 Speaker 5: And I think the non answer from National Security Advisor 228 00:10:55,320 --> 00:10:58,480 Speaker 5: Sullivan recently on the television when he was asked that 229 00:10:58,600 --> 00:11:01,719 Speaker 5: question is means to me that they are looking at 230 00:11:01,720 --> 00:11:04,960 Speaker 5: that in the future if they cannot do deterrence any 231 00:11:04,960 --> 00:11:05,400 Speaker 5: other way. 232 00:11:05,800 --> 00:11:08,480 Speaker 1: In terms of deterrence, Mick, you know better than anybody 233 00:11:08,559 --> 00:11:10,440 Speaker 1: kind of the assets the US has in that part 234 00:11:10,440 --> 00:11:12,720 Speaker 1: of the world. Do we have the assets and capabilities 235 00:11:12,720 --> 00:11:18,160 Speaker 1: to really deal a serious blow to the Huthis and 236 00:11:18,400 --> 00:11:20,360 Speaker 1: try to get some control back in that part of 237 00:11:20,360 --> 00:11:22,400 Speaker 1: the world, whether it's the Red Sea in other parts. 238 00:11:24,240 --> 00:11:27,200 Speaker 5: Yes, we do. We have not only the assets that 239 00:11:27,240 --> 00:11:31,680 Speaker 5: we've pushed to the region, but we have considerable assets 240 00:11:31,720 --> 00:11:36,120 Speaker 5: for example in Ledade, in Qatar, in Baharain with our 241 00:11:36,400 --> 00:11:40,440 Speaker 5: fifth Fleet of Central Command. And we of course have 242 00:11:40,559 --> 00:11:44,680 Speaker 5: the ability to project power better than any country in 243 00:11:44,720 --> 00:11:48,080 Speaker 5: the world, perhaps in history, so we can we have 244 00:11:48,200 --> 00:11:51,160 Speaker 5: the assets that we can certainly surge to get more 245 00:11:51,200 --> 00:11:54,400 Speaker 5: assets there. The question is what is the balance between 246 00:11:54,760 --> 00:11:58,640 Speaker 5: responding forcefully enough to get Ran to change its calculation 247 00:11:58,720 --> 00:12:02,160 Speaker 5: when it comes to their support for proxies. And yes, 248 00:12:02,240 --> 00:12:04,720 Speaker 5: they have different levels of controls of each of these 249 00:12:04,720 --> 00:12:08,520 Speaker 5: proxy forces, but ultimately they keep providing the very weapons 250 00:12:09,080 --> 00:12:11,400 Speaker 5: that are being launched at our troops. So I think 251 00:12:11,440 --> 00:12:15,240 Speaker 5: the indicator of whether we have reached deterrence is if 252 00:12:15,280 --> 00:12:18,600 Speaker 5: that stops. And I also would say that if it continues, 253 00:12:18,840 --> 00:12:21,760 Speaker 5: that means they intend these weapons to be used against 254 00:12:21,760 --> 00:12:25,000 Speaker 5: our forces, which to me means they're complicit in these attacks. 255 00:12:25,679 --> 00:12:27,600 Speaker 4: And Nick, we were talking to one of our DC 256 00:12:27,880 --> 00:12:30,600 Speaker 4: editors a minute ago about some of the aids and 257 00:12:30,679 --> 00:12:34,520 Speaker 4: hurdles that are going on on Capitol Hill. How does 258 00:12:34,559 --> 00:12:39,360 Speaker 4: that impact what's going on with Israel, Ukraine, Taiwan and China. 259 00:12:41,120 --> 00:12:43,960 Speaker 5: So they are tying of course, as you know, a 260 00:12:44,000 --> 00:12:50,800 Speaker 5: lot of these security assistant packages together. So Ukraine absolutely 261 00:12:50,840 --> 00:12:55,160 Speaker 5: need to continue to support Ukraine. They are decimating one 262 00:12:55,200 --> 00:12:58,760 Speaker 5: of our most significant adversaries in Russia, right, So that 263 00:12:58,920 --> 00:13:01,280 Speaker 5: is something that I think is clearly at the United 264 00:13:01,320 --> 00:13:05,760 Speaker 5: States interest. It isn't charity. Obviously we should also support 265 00:13:05,800 --> 00:13:08,520 Speaker 5: partners because that's what good partners do. But this is 266 00:13:08,520 --> 00:13:13,400 Speaker 5: also on our interest and that shows, like Taiwan and China, 267 00:13:13,480 --> 00:13:16,199 Speaker 5: that we are a good partner and we stick with 268 00:13:16,800 --> 00:13:20,079 Speaker 5: our partners. So I think how we act with Ukraine 269 00:13:20,120 --> 00:13:23,040 Speaker 5: will have an effect on China and a Taiwan situation. 270 00:13:23,360 --> 00:13:26,079 Speaker 5: And of course the aid specifically for the Middle East, 271 00:13:26,240 --> 00:13:28,680 Speaker 5: it's both for Israel and at last I've read is 272 00:13:28,960 --> 00:13:31,719 Speaker 5: like a ten billion dollar ear mark for Gaza when 273 00:13:31,720 --> 00:13:33,839 Speaker 5: it comes to humanitarian aid, and I would assume that 274 00:13:33,840 --> 00:13:36,480 Speaker 5: it would also be for reconstruction after the end of 275 00:13:36,520 --> 00:13:41,360 Speaker 5: combat operations. All of those things are incredibly important both 276 00:13:41,400 --> 00:13:44,040 Speaker 5: to support a partner in Israel, but also to really 277 00:13:44,080 --> 00:13:47,160 Speaker 5: recognize the level of a human crisis. That's going on 278 00:13:47,200 --> 00:13:49,520 Speaker 5: in Gaza right now. There needs to be much more 279 00:13:49,920 --> 00:13:52,600 Speaker 5: humanitarian aid going in there, and it's going to be 280 00:13:52,679 --> 00:13:55,720 Speaker 5: needed for the foreseeable future. But there also needs to 281 00:13:55,720 --> 00:14:01,079 Speaker 5: be a reconstruction effort, as Gaza itself has been essentially decimated. 282 00:14:01,640 --> 00:14:03,840 Speaker 1: Heynck, I'm probably like a lot of people in that 283 00:14:04,360 --> 00:14:06,160 Speaker 1: the news flow coming out of the Middle East has 284 00:14:06,200 --> 00:14:07,800 Speaker 1: kind of pushed Ukraine on the. 285 00:14:07,720 --> 00:14:09,000 Speaker 2: Back burner a little bit. 286 00:14:09,280 --> 00:14:11,640 Speaker 1: Can you give us an updated assessment from you know, 287 00:14:11,679 --> 00:14:15,720 Speaker 1: your sources about how this thing can play out here? 288 00:14:15,840 --> 00:14:18,280 Speaker 1: I mean, are we gearing up for another spring offensive? 289 00:14:18,320 --> 00:14:21,360 Speaker 1: I'll be back into that narrative. Is there any sense 290 00:14:21,360 --> 00:14:23,160 Speaker 1: that there can be some movement? It's been such a 291 00:14:23,160 --> 00:14:24,120 Speaker 1: long time now. 292 00:14:25,480 --> 00:14:28,360 Speaker 5: Right so we are at somewhat of an impass, somewhat 293 00:14:28,360 --> 00:14:30,840 Speaker 5: of a stalemate, if you will. But it's important to 294 00:14:30,840 --> 00:14:34,880 Speaker 5: point out a stalemate doesn't mean that the fighting hasn't subsided. 295 00:14:34,920 --> 00:14:38,640 Speaker 5: There's considerable fighting going on in Russia is losing a 296 00:14:38,680 --> 00:14:42,440 Speaker 5: lot of soldiers and equipment every day. I think what 297 00:14:42,920 --> 00:14:45,440 Speaker 5: Putin is looking at right now. President Putin's looking at 298 00:14:45,440 --> 00:14:48,920 Speaker 5: our level of support and what if anything would change 299 00:14:48,960 --> 00:14:52,160 Speaker 5: if they're in the presidential election. That is what he's 300 00:14:52,200 --> 00:14:56,320 Speaker 5: hoping on that we cut our aid. Obviously, the European Union, 301 00:14:56,440 --> 00:15:00,440 Speaker 5: our European allies have stepped up and need to continue 302 00:15:00,480 --> 00:15:02,960 Speaker 5: to step up, but the United States also needs to 303 00:15:03,000 --> 00:15:07,280 Speaker 5: match that. It's very imperative that I think the Ukrainians 304 00:15:07,360 --> 00:15:11,760 Speaker 5: get these significant weapons systems like the F sixteen fighter jet, 305 00:15:12,080 --> 00:15:16,080 Speaker 5: like long range artillery the attackers. That is really what's 306 00:15:16,120 --> 00:15:18,880 Speaker 5: needed for them to have an effect, be able to 307 00:15:18,920 --> 00:15:21,840 Speaker 5: go and continue on this counter offensive and take back 308 00:15:21,880 --> 00:15:24,800 Speaker 5: to Rain. If they don't have that, it's essentially going 309 00:15:24,880 --> 00:15:26,560 Speaker 5: to continue in this stalemate. It's going to be a 310 00:15:26,600 --> 00:15:29,000 Speaker 5: tick to tack for a long time, which of course 311 00:15:29,240 --> 00:15:31,720 Speaker 5: we don't want. We want them to start making gains. 312 00:15:32,280 --> 00:15:34,360 Speaker 5: We want to help them start making gains so they 313 00:15:34,400 --> 00:15:37,040 Speaker 5: push putin into a corner where he is looking for 314 00:15:37,080 --> 00:15:39,960 Speaker 5: an exit ramp right now, he's waiting to see what 315 00:15:40,000 --> 00:15:40,360 Speaker 5: we do. 316 00:15:40,960 --> 00:15:42,640 Speaker 1: Yeah, all right, very good, Nick, Thanks so much for 317 00:15:42,720 --> 00:15:45,880 Speaker 1: joining us. Always appreciate getting the benefit of your wisdom 318 00:15:45,880 --> 00:15:47,800 Speaker 1: and experience. Mick Molroy, he's a co founder of the 319 00:15:47,800 --> 00:15:55,200 Speaker 1: Lobo Institute, a career full of international experience here on geopolitics, 320 00:15:55,200 --> 00:15:57,040 Speaker 1: and boy, there's a lot to talk about. 321 00:16:00,760 --> 00:16:03,120 Speaker 2: Right now, Let's go to Laurie Cavacina or Cavasina. 322 00:16:03,160 --> 00:16:06,680 Speaker 1: She's head of US equity strategy at OURBC Capital Markets 323 00:16:06,760 --> 00:16:07,680 Speaker 1: Royal Bank at Canada. 324 00:16:07,680 --> 00:16:09,840 Speaker 2: But we've got the Canadian banks covered today. 325 00:16:10,560 --> 00:16:13,000 Speaker 1: Hey, Laurie, thanks so much for joining us here. You know, 326 00:16:13,480 --> 00:16:16,440 Speaker 1: I'd love to get your perspective on the market snapshot 327 00:16:16,520 --> 00:16:19,880 Speaker 1: right here. We had a really strong November December for 328 00:16:20,040 --> 00:16:23,720 Speaker 1: risk guss at stocks, bonds ripping, a decent January. I mean, 329 00:16:23,760 --> 00:16:26,400 Speaker 1: let's let's let's be honest. Do I just keep riding 330 00:16:26,440 --> 00:16:28,320 Speaker 1: this thing? Do I just keep writing the big names 331 00:16:28,320 --> 00:16:29,000 Speaker 1: that have worked for me? 332 00:16:29,200 --> 00:16:29,880 Speaker 2: What do I do here? 333 00:16:32,000 --> 00:16:32,120 Speaker 4: Right? 334 00:16:32,160 --> 00:16:34,680 Speaker 6: So thanks for having me look. I think to some 335 00:16:34,760 --> 00:16:37,680 Speaker 6: extent depends on your time horizon and your risk profile. 336 00:16:37,800 --> 00:16:41,120 Speaker 6: I think the big move in November December was absolutely deserved. 337 00:16:41,160 --> 00:16:42,800 Speaker 6: We baked in a lot of good news on twenty 338 00:16:42,880 --> 00:16:44,960 Speaker 6: twenty four, including the idea that the FED is going 339 00:16:45,000 --> 00:16:48,680 Speaker 6: to start cutting I think that January we saw, you know, 340 00:16:48,720 --> 00:16:51,480 Speaker 6: sort of the markets do well for interesting reasons. We 341 00:16:51,520 --> 00:16:53,240 Speaker 6: saw the bond yi old move back up if you 342 00:16:53,240 --> 00:16:54,960 Speaker 6: look at the ten year and that really supported the 343 00:16:54,960 --> 00:16:57,360 Speaker 6: growth side of the trade, which is the bigger you know, 344 00:16:57,440 --> 00:16:59,560 Speaker 6: market cap weight in the index. So it kind of 345 00:16:59,600 --> 00:17:02,600 Speaker 6: brought an end to the broadening out that had gotten 346 00:17:02,640 --> 00:17:04,919 Speaker 6: people excited in November and December. But we went up 347 00:17:04,960 --> 00:17:08,199 Speaker 6: for slightly different reasons, and I don't actually think that 348 00:17:08,320 --> 00:17:10,480 Speaker 6: earnings has given us too much of a reason to 349 00:17:10,520 --> 00:17:13,000 Speaker 6: go up. Nevertheless, the market has kind of muddled through. 350 00:17:13,240 --> 00:17:15,959 Speaker 6: I think where we sit today is sentiments at a 351 00:17:16,040 --> 00:17:19,840 Speaker 6: particularly sort of stretched point. That being said, my work 352 00:17:19,880 --> 00:17:22,679 Speaker 6: does suggest that valuation should be supportive at the end 353 00:17:22,720 --> 00:17:25,239 Speaker 6: of the year, that as inflation continues to moderate, if 354 00:17:25,280 --> 00:17:27,320 Speaker 6: we get better economic data in the back half of 355 00:17:27,359 --> 00:17:29,879 Speaker 6: the year and interest rates come down just a little bit, 356 00:17:29,880 --> 00:17:32,440 Speaker 6: we can support a pretty robust pe multiple in the market. 357 00:17:32,440 --> 00:17:34,480 Speaker 6: So I think we may have to ride out some volatility. 358 00:17:34,520 --> 00:17:35,959 Speaker 6: I think we're going to pay the price for all 359 00:17:36,000 --> 00:17:38,600 Speaker 6: that you know, big move that we had in November 360 00:17:38,600 --> 00:17:40,720 Speaker 6: through January. But I think you wouldn't want to buy 361 00:17:40,760 --> 00:17:42,639 Speaker 6: that dip. So again, are you going to try to 362 00:17:42,640 --> 00:17:44,720 Speaker 6: play for every little tactical turn or you're just going 363 00:17:44,800 --> 00:17:47,200 Speaker 6: to kind of, you know, ignore the noise. Most people 364 00:17:47,240 --> 00:17:49,280 Speaker 6: I talked to you are probably in the latter camp, and. 365 00:17:49,240 --> 00:17:51,679 Speaker 4: Laurier when you're looking at buying the dip is that 366 00:17:51,720 --> 00:17:54,080 Speaker 4: on individual stocks, are we looking at buying? You know, 367 00:17:54,160 --> 00:17:57,000 Speaker 4: the cues if we see the NASDAC come under some pressure. 368 00:17:58,680 --> 00:18:00,920 Speaker 6: So you know, I've given edge to small caps and 369 00:18:01,040 --> 00:18:03,159 Speaker 6: value on the year, and I do think that the 370 00:18:03,520 --> 00:18:06,520 Speaker 6: Magnificent seven, I guess now we're talking about the top five. 371 00:18:06,600 --> 00:18:08,920 Speaker 6: You know, I think they've outperformed for very good reasons. 372 00:18:09,280 --> 00:18:12,240 Speaker 6: That being said, I think valuations are highly stretched. If 373 00:18:12,240 --> 00:18:13,639 Speaker 6: you look at the top ten names in the S 374 00:18:13,680 --> 00:18:16,440 Speaker 6: and P five hundred, we're sitting at peak valuation. If 375 00:18:16,440 --> 00:18:19,800 Speaker 6: you look at positioning, crowding on the CFTC data, if 376 00:18:19,840 --> 00:18:21,679 Speaker 6: you basically just look at what is owned in the 377 00:18:21,760 --> 00:18:25,280 Speaker 6: Nasdaq futures in terms of byside positioning, we've actually broken 378 00:18:25,320 --> 00:18:28,000 Speaker 6: above twenty thirteen twenty fifteen highs. So I think we 379 00:18:28,040 --> 00:18:31,000 Speaker 6: look quite stretched. And I think you look at things 380 00:18:31,040 --> 00:18:34,160 Speaker 6: like small caps where the valuations are about average, You've 381 00:18:34,200 --> 00:18:36,520 Speaker 6: got positioned at three year highs but nowhere close to 382 00:18:36,560 --> 00:18:38,240 Speaker 6: all time highs. I think you've got a lot more 383 00:18:38,320 --> 00:18:40,880 Speaker 6: room there to run. I do think for that part 384 00:18:40,920 --> 00:18:42,880 Speaker 6: of the market and this broadening out to really work, 385 00:18:42,920 --> 00:18:46,120 Speaker 6: you've got to see economic expectations improved. So far, we're 386 00:18:46,119 --> 00:18:49,080 Speaker 6: only seeing people really inch up one que numbers. We're 387 00:18:49,080 --> 00:18:52,080 Speaker 6: not really seeing a broader improvement in twenty twenty four 388 00:18:52,160 --> 00:18:53,840 Speaker 6: numbers as a whole, and you really need the ladder 389 00:18:53,840 --> 00:18:56,159 Speaker 6: to get that broadening trade to work. I'm in the 390 00:18:56,160 --> 00:19:00,600 Speaker 6: camp it probably can simply because I think economics xations 391 00:19:00,640 --> 00:19:02,760 Speaker 6: have been consistently too low and I think we're in 392 00:19:02,880 --> 00:19:05,960 Speaker 6: kind of a post crisis PTSD in the economics community. 393 00:19:06,680 --> 00:19:10,320 Speaker 1: So, Laurier, when you screen this market here, are there 394 00:19:10,320 --> 00:19:12,080 Speaker 1: any sectors that kind of jump out of you as 395 00:19:12,119 --> 00:19:15,280 Speaker 1: either really attract them on a momentum basis of value 396 00:19:15,400 --> 00:19:17,600 Speaker 1: basis kind of what are you talking to your clients 397 00:19:17,600 --> 00:19:18,280 Speaker 1: about these days? 398 00:19:19,400 --> 00:19:21,960 Speaker 6: So I think sectors are really tough. I think that 399 00:19:22,040 --> 00:19:25,399 Speaker 6: you're more looking at opportunities in individual names and industries 400 00:19:25,400 --> 00:19:27,880 Speaker 6: within sectors. That being said, I'm a strategist, so it's 401 00:19:27,920 --> 00:19:31,360 Speaker 6: my job to pick sectors. I still think financials look 402 00:19:31,440 --> 00:19:34,240 Speaker 6: really interesting here, and the reality is is that the 403 00:19:34,280 --> 00:19:37,199 Speaker 6: market is not going to broaden out unless the financials participate. 404 00:19:37,480 --> 00:19:39,680 Speaker 6: But I think you've got good valuations. You've actually started 405 00:19:39,680 --> 00:19:42,680 Speaker 6: to see improving earning's revision trends, and this is also 406 00:19:42,720 --> 00:19:45,080 Speaker 6: a sector that does well when the animal spirits are 407 00:19:45,080 --> 00:19:48,359 Speaker 6: coming back in the economy. I would also point people 408 00:19:48,440 --> 00:19:51,040 Speaker 6: to things like utilities and healthcare if we're really going 409 00:19:51,080 --> 00:19:53,000 Speaker 6: to have start a shorter term pullback in the market. 410 00:19:53,080 --> 00:19:56,399 Speaker 6: I think you've got pretty reasonable valuations there. And I 411 00:19:56,440 --> 00:19:59,440 Speaker 6: also like energy as a hedge in my portfolio. It's 412 00:19:59,480 --> 00:20:02,040 Speaker 6: a sector that really, you know, is a beneficiarrea of 413 00:20:02,160 --> 00:20:04,680 Speaker 6: ramping inflation and ramping interest rates. We think those things 414 00:20:04,720 --> 00:20:06,200 Speaker 6: are going to reverse this year, but if there's a 415 00:20:06,280 --> 00:20:09,399 Speaker 6: risk that we're wrong, we love the valuations there and 416 00:20:09,440 --> 00:20:11,320 Speaker 6: just kind of putting all macro aside. We love the 417 00:20:11,359 --> 00:20:13,600 Speaker 6: dividend yields. We think there's a lot more discipline in 418 00:20:13,640 --> 00:20:15,520 Speaker 6: that part of the market, and so there's a lot 419 00:20:15,560 --> 00:20:17,600 Speaker 6: more interesting stuff at the stock level if you can 420 00:20:17,680 --> 00:20:19,679 Speaker 6: kind of get away from some of the big macro trades. 421 00:20:20,119 --> 00:20:23,120 Speaker 4: Well, looking at you're mentioning, you know, financials and energy, 422 00:20:23,840 --> 00:20:25,520 Speaker 4: different kind of drivers there. 423 00:20:25,600 --> 00:20:25,760 Speaker 2: Right. 424 00:20:25,800 --> 00:20:27,399 Speaker 4: One of the things we were talking about was the 425 00:20:27,440 --> 00:20:30,440 Speaker 4: exposure to China and how china kind of revamp could 426 00:20:30,560 --> 00:20:33,359 Speaker 4: drive the likes of energy and some other parts of 427 00:20:33,400 --> 00:20:33,959 Speaker 4: the market. 428 00:20:34,200 --> 00:20:36,120 Speaker 2: How do you think about. 429 00:20:36,240 --> 00:20:39,040 Speaker 4: Deploying capital here in the US with some of those 430 00:20:39,080 --> 00:20:42,560 Speaker 4: geopolitical concerns and uncertainty still at hand. 431 00:20:44,200 --> 00:20:46,440 Speaker 6: So I would say whenever China comes up as a 432 00:20:46,440 --> 00:20:48,879 Speaker 6: big risk factor, it feels like tech is the first 433 00:20:48,880 --> 00:20:51,920 Speaker 6: area people look at in terms of having some exposure 434 00:20:51,960 --> 00:20:54,800 Speaker 6: in the risk and a second one, frankly is materials. 435 00:20:54,800 --> 00:20:57,040 Speaker 6: And that's because if you run screens of companies with 436 00:20:57,119 --> 00:20:59,840 Speaker 6: high exposure to China, there aren't a ton of you know, 437 00:20:59,840 --> 00:21:03,399 Speaker 6: not every company discloses all their country level revenue, but 438 00:21:03,440 --> 00:21:05,760 Speaker 6: we see we tend to see those sectors pop up 439 00:21:05,840 --> 00:21:08,080 Speaker 6: quite a bit. So I would say those are two 440 00:21:08,119 --> 00:21:10,520 Speaker 6: areas to think about. I think consumer staples is another 441 00:21:10,560 --> 00:21:12,520 Speaker 6: one that you can think about. We often, you know, 442 00:21:12,560 --> 00:21:15,680 Speaker 6: see greater disclosure on the geographical revenue in that space 443 00:21:15,720 --> 00:21:16,120 Speaker 6: as well. 444 00:21:17,200 --> 00:21:19,679 Speaker 1: We're about two hundred and thirty companies out of the 445 00:21:19,720 --> 00:21:22,480 Speaker 1: S and P five hundred have reported here any any 446 00:21:22,760 --> 00:21:24,800 Speaker 1: kind of themes you see here. 447 00:21:24,720 --> 00:21:25,360 Speaker 2: LORII, so far. 448 00:21:26,720 --> 00:21:26,920 Speaker 3: Sure. 449 00:21:26,960 --> 00:21:29,040 Speaker 6: So we read a lot of transcripts. On my team, 450 00:21:29,400 --> 00:21:31,280 Speaker 6: we've been writing up, you know, sort of what what 451 00:21:31,320 --> 00:21:33,320 Speaker 6: we we think is going on, you know, at the 452 00:21:33,359 --> 00:21:35,480 Speaker 6: end of each week, and we'll piece it all together 453 00:21:35,520 --> 00:21:37,920 Speaker 6: at the end. But I would say the most interesting 454 00:21:37,960 --> 00:21:41,359 Speaker 6: thing I've seen is number one commentary around the FED 455 00:21:41,520 --> 00:21:45,480 Speaker 6: generally seems to be emphasizing the positives associated with the 456 00:21:45,520 --> 00:21:47,920 Speaker 6: fed's pivot in the fall or or you know, the 457 00:21:47,960 --> 00:21:51,200 Speaker 6: fourth quarter, or the benefits of just having greater certainty 458 00:21:51,240 --> 00:21:53,480 Speaker 6: in the monetary policy outlooks. So that's one thing that's 459 00:21:53,560 --> 00:21:55,879 Speaker 6: jumped out. The second thing that's hunt out is that 460 00:21:55,920 --> 00:21:59,240 Speaker 6: all the macro backdrop outlook discussions there are kind of 461 00:21:59,240 --> 00:22:01,760 Speaker 6: two camps, the people who are tilting positive and the 462 00:22:01,800 --> 00:22:04,320 Speaker 6: people who are tilting negative. I was kind of surprised 463 00:22:04,320 --> 00:22:06,760 Speaker 6: one company last week, actually, I mean, they just kind 464 00:22:06,760 --> 00:22:08,359 Speaker 6: of went down the deep rabbit hole of all the 465 00:22:08,440 --> 00:22:10,360 Speaker 6: risks we've got out there and used the word dismal 466 00:22:10,840 --> 00:22:13,000 Speaker 6: to describe the whole thing, and that seemed a little 467 00:22:13,040 --> 00:22:14,840 Speaker 6: extreme to me. I think things are a little bit 468 00:22:14,840 --> 00:22:17,159 Speaker 6: more balanced, But I'll tell you at the beginning of 469 00:22:17,240 --> 00:22:19,480 Speaker 6: last week, I was sort of struck by the fact 470 00:22:19,520 --> 00:22:22,680 Speaker 6: that clients I was talking to seemed a little bit 471 00:22:22,720 --> 00:22:25,160 Speaker 6: more in doubt on the soft landing thesis. And that's 472 00:22:25,160 --> 00:22:27,360 Speaker 6: been a shift from what I've observed in recent months, 473 00:22:27,359 --> 00:22:29,720 Speaker 6: where it felt like the soft landing crowd was really 474 00:22:29,760 --> 00:22:31,680 Speaker 6: growing and I just sort of looked at all these 475 00:22:31,720 --> 00:22:34,080 Speaker 6: comments that were coming in from the companies and saying, well, 476 00:22:34,119 --> 00:22:36,040 Speaker 6: the fact that corporate America is not exactly on the 477 00:22:36,040 --> 00:22:39,120 Speaker 6: same page and you're just getting such a murky, muddled 478 00:22:39,320 --> 00:22:41,840 Speaker 6: outlook discussion. I felt like that was starting to take 479 00:22:41,880 --> 00:22:44,720 Speaker 6: a toll on investors themselves. Then, of course, we got 480 00:22:44,760 --> 00:22:48,040 Speaker 6: just a rash of positive economic data mid to late weeks, 481 00:22:48,040 --> 00:22:50,240 Speaker 6: So we'll see what my conversations are like this week. 482 00:22:50,680 --> 00:22:52,760 Speaker 6: But I do think it's had an impact, to be honest. 483 00:22:52,640 --> 00:22:54,920 Speaker 1: You know, Laurie, just crossing the Bloomberg terminal right now 484 00:22:55,040 --> 00:22:59,040 Speaker 1: is a headline SNAP plans to cut global headcount by 485 00:22:59,080 --> 00:23:02,320 Speaker 1: about ten percent, And it seems like we've had, you know, 486 00:23:02,640 --> 00:23:04,760 Speaker 1: more than a handful of these announcements over the last 487 00:23:04,760 --> 00:23:07,280 Speaker 1: several weeks, and it kind of reminds me of this 488 00:23:07,440 --> 00:23:09,520 Speaker 1: exact time last year, when we had some of these 489 00:23:09,520 --> 00:23:12,600 Speaker 1: big tech companies announcing layoffs and then at the end 490 00:23:12,640 --> 00:23:14,920 Speaker 1: of the day, the job market was just as strong 491 00:23:15,000 --> 00:23:16,960 Speaker 1: as it's ever been. So when you see an headline 492 00:23:17,040 --> 00:23:20,399 Speaker 1: like SNAP cutting global headcamp by ten percent, plus all 493 00:23:20,400 --> 00:23:22,000 Speaker 1: the other headlines we've seen over the last several weeks, 494 00:23:22,160 --> 00:23:23,720 Speaker 1: how do you kind of put that into context. 495 00:23:25,200 --> 00:23:27,520 Speaker 6: It's a great question we did. We spend a lot 496 00:23:27,560 --> 00:23:29,600 Speaker 6: of time looking at the challenger data, and I'll just 497 00:23:29,680 --> 00:23:32,280 Speaker 6: give you the disclaimer, I'm not an economist, so don't 498 00:23:32,280 --> 00:23:34,439 Speaker 6: hold my feet to the fire. But you know what 499 00:23:34,480 --> 00:23:37,240 Speaker 6: we've kind of stumbled on something last year, which is 500 00:23:37,240 --> 00:23:39,440 Speaker 6: that if you looked at the industrial sector, the layoffs 501 00:23:39,440 --> 00:23:42,240 Speaker 6: were pretty minimal. And we think that was because back 502 00:23:42,280 --> 00:23:45,639 Speaker 6: in COVID in twenty twenty, they did GFC style you know, 503 00:23:45,800 --> 00:23:48,359 Speaker 6: or sized layoffs, similar kinds of layoffs to what they 504 00:23:48,359 --> 00:23:49,919 Speaker 6: did back in the tech bubble. Just really some of 505 00:23:49,920 --> 00:23:52,840 Speaker 6: the most extreme periods of layoffs that have happened in industrials. 506 00:23:52,960 --> 00:23:55,800 Speaker 6: The COVID layoffs match that. But then you look at financials, 507 00:23:55,840 --> 00:23:58,439 Speaker 6: you look at technology, these sectors where they sent everyone 508 00:23:58,480 --> 00:24:00,600 Speaker 6: to work from home during the pandemic, they don't really 509 00:24:00,600 --> 00:24:03,359 Speaker 6: do that many layoffs. And so we think whether we 510 00:24:03,359 --> 00:24:05,359 Speaker 6: were looking last year in the first quarter at all 511 00:24:05,359 --> 00:24:07,680 Speaker 6: the tech layoffs, or if we're looking at the tech 512 00:24:07,720 --> 00:24:09,800 Speaker 6: and financial layoffs that have been going on, you know, 513 00:24:09,960 --> 00:24:12,600 Speaker 6: so far this year, it's really because there wasn't a 514 00:24:12,600 --> 00:24:15,000 Speaker 6: lot of cleanup in those industries that happened during the 515 00:24:15,000 --> 00:24:17,240 Speaker 6: COVID period, so there's kind of a pin up need 516 00:24:17,280 --> 00:24:20,879 Speaker 6: to restructure and right size the businesses. I am watching 517 00:24:20,920 --> 00:24:23,520 Speaker 6: what's going on with industrials really closely. We're not seeing 518 00:24:23,520 --> 00:24:25,560 Speaker 6: the major breakout in those layoffs yet, but we do 519 00:24:25,640 --> 00:24:27,040 Speaker 6: want to keep an eye on that because we have 520 00:24:27,160 --> 00:24:29,080 Speaker 6: had a few companies come out and talk about that. 521 00:24:29,160 --> 00:24:31,600 Speaker 6: For now, the Challenger data is telling me to kind 522 00:24:31,640 --> 00:24:33,479 Speaker 6: of ignore the news headlines a little bit, that it's 523 00:24:33,480 --> 00:24:37,040 Speaker 6: still fairly concentrated in these sectors that had some overdue cleanup. 524 00:24:37,640 --> 00:24:39,360 Speaker 6: But again, we do have to watch you just make 525 00:24:39,359 --> 00:24:40,480 Speaker 6: sure that's not brought me out. 526 00:24:40,800 --> 00:24:43,600 Speaker 4: Yeah, no, you mentioned the potential for overdue cleanup. What 527 00:24:43,680 --> 00:24:45,800 Speaker 4: are the things that had come up on a call 528 00:24:46,000 --> 00:24:48,240 Speaker 4: with an investor a few weeks ago? Was he basically said, 529 00:24:48,400 --> 00:24:50,159 Speaker 4: in his view, these job cuts are a way of 530 00:24:50,200 --> 00:24:53,200 Speaker 4: expanding margins. So that's one thing to keep an eye on. 531 00:24:53,240 --> 00:24:54,600 Speaker 2: All Right, Lurie, thanks so much for joining us. 532 00:24:54,640 --> 00:24:57,040 Speaker 1: Lori Calvacina, she is head of equity strategy at RBC 533 00:24:57,119 --> 00:25:09,480 Speaker 1: Capital Markets. All Right, today's firm pritage headlines, Alis Matteo, 534 00:25:09,560 --> 00:25:12,520 Speaker 1: what stories do you have for us here this morning? 535 00:25:12,560 --> 00:25:14,800 Speaker 7: Sure, we're starting with the Financial Times. It says Iran 536 00:25:14,920 --> 00:25:18,920 Speaker 7: using two of the UK's biggest banks to evade sanctions. Now, 537 00:25:19,080 --> 00:25:21,800 Speaker 7: this is documents that the Financial Time saw. It says 538 00:25:22,000 --> 00:25:25,359 Speaker 7: Lloyd's and Santanti UK it provided accounts of bridges to 539 00:25:25,440 --> 00:25:29,800 Speaker 7: British front companies secretly owned by a sanctioned Iranian petrochemicals 540 00:25:29,840 --> 00:25:33,160 Speaker 7: company that was actually based near Buckingham Palace. Now let 541 00:25:33,160 --> 00:25:36,440 Speaker 7: me break it down for you. It's petrochemical commercial company 542 00:25:36,800 --> 00:25:38,480 Speaker 7: and that was part of a network that the US 543 00:25:38,520 --> 00:25:42,040 Speaker 7: accuses of raising hundreds of millions of dollars for part 544 00:25:42,080 --> 00:25:45,480 Speaker 7: of the Iranian Revolutionary Guards Corps and also working with 545 00:25:46,040 --> 00:25:50,399 Speaker 7: Russian intelligence agencies to raise money for Iranian proxy militias. 546 00:25:50,760 --> 00:25:53,879 Speaker 7: This is a lot to take in. But the petrochemicals company, 547 00:25:53,880 --> 00:25:57,400 Speaker 7: it's British subsidiary. They've been under US sanctioned since November 548 00:25:57,400 --> 00:26:00,360 Speaker 7: of twoenty eighteen. That's what they're looking at. So these 549 00:26:00,400 --> 00:26:03,560 Speaker 7: documents are showing that since then, this company has used 550 00:26:03,560 --> 00:26:06,560 Speaker 7: companies in the UK to receive funds from Iranium front 551 00:26:06,560 --> 00:26:09,760 Speaker 7: as and he's in China while hiding their real ownership 552 00:26:09,800 --> 00:26:13,280 Speaker 7: through quote trustee agreements. It gets a little confusing, but 553 00:26:13,600 --> 00:26:15,640 Speaker 7: the main gist of this is it's all coming because 554 00:26:15,680 --> 00:26:18,000 Speaker 7: you have the Royal Air Force. They're joining the US 555 00:26:18,040 --> 00:26:21,040 Speaker 7: air strikes against Iranian back hoothy rebels and Yemen. So 556 00:26:21,240 --> 00:26:23,440 Speaker 7: it's a lot to take in as this right now 557 00:26:23,520 --> 00:26:23,960 Speaker 7: is going on. 558 00:26:24,160 --> 00:26:27,600 Speaker 1: I mean, these are real banks, real names. I mean, 559 00:26:27,760 --> 00:26:30,239 Speaker 1: you know Lloyd's Banking Group. Sometimes they're the Bigture. I mean, 560 00:26:30,280 --> 00:26:34,160 Speaker 1: these are major institutions here. So they're supposed to be 561 00:26:34,359 --> 00:26:37,240 Speaker 1: complying with these sanctions, correct, correct. 562 00:26:36,760 --> 00:26:39,040 Speaker 7: But that's they were supposed to be since twenty eighteen. 563 00:26:39,080 --> 00:26:41,920 Speaker 7: But now they're saying, well that might not have happened. 564 00:26:41,640 --> 00:26:45,080 Speaker 1: And they're saying basically, we can't come in on individual accounts. 565 00:26:45,119 --> 00:26:48,080 Speaker 2: Right, okay, all right, well very good. What's next? 566 00:26:48,119 --> 00:26:49,640 Speaker 7: All right, so we're going to the Wall Street Journal. 567 00:26:49,640 --> 00:26:52,479 Speaker 7: They're talking about Spotify accounts. This I didn't know. So 568 00:26:52,520 --> 00:26:55,639 Speaker 7: if you have a shared music account Loggin because you 569 00:26:55,640 --> 00:26:57,680 Speaker 7: don't want to dish out the extra cash for the 570 00:26:57,760 --> 00:27:01,359 Speaker 7: premium accounts. It's caused a lot of family battles because 571 00:27:01,359 --> 00:27:03,679 Speaker 7: when you play your music. Let's say I'm listening to 572 00:27:03,720 --> 00:27:06,639 Speaker 7: some soothing, you know whatever music, and all of a sudden, 573 00:27:06,640 --> 00:27:09,960 Speaker 7: Metallica starts blasting, you know it switches things over. It's 574 00:27:10,000 --> 00:27:13,000 Speaker 7: because someone on your shared account change the music. 575 00:27:13,080 --> 00:27:13,920 Speaker 2: Do you have Spotify? 576 00:27:14,119 --> 00:27:16,880 Speaker 7: I don't have Spotify. I have I have the free account, 577 00:27:16,920 --> 00:27:18,320 Speaker 7: so so I can't relate. 578 00:27:19,880 --> 00:27:20,680 Speaker 2: He's the demo here? 579 00:27:20,800 --> 00:27:23,119 Speaker 4: Do you got too much money on it? If the 580 00:27:23,280 --> 00:27:27,600 Speaker 4: Apple Family Plan? Because so with Spotify, my understanding is 581 00:27:27,800 --> 00:27:30,840 Speaker 4: if my dad plays Metallica, Metallica comes from my phone. 582 00:27:30,880 --> 00:27:33,520 Speaker 4: With Apple, if we share an account and I'm listening 583 00:27:33,600 --> 00:27:36,840 Speaker 4: to say Zach Bryan, my dad starts playing Metallica, my 584 00:27:36,960 --> 00:27:40,359 Speaker 4: music stops playing. So after going back and forth and 585 00:27:40,400 --> 00:27:42,480 Speaker 4: I'm paying for it, I was kind of like, hey, dad, 586 00:27:42,560 --> 00:27:43,919 Speaker 4: you've covered a lot of things. 587 00:27:44,280 --> 00:27:45,280 Speaker 2: I got the Family Plan. 588 00:27:45,440 --> 00:27:47,440 Speaker 4: Just make sure you use it because it's fifteen bucks 589 00:27:47,480 --> 00:27:49,680 Speaker 4: a month, so it's not nine ninety nine. 590 00:27:50,080 --> 00:27:52,200 Speaker 1: So all right, so you have Apple, I have Apple 591 00:27:52,200 --> 00:27:54,960 Speaker 1: on Apples and so if one if a feat is 592 00:27:54,960 --> 00:27:57,560 Speaker 1: playing for one person, you as the second person, don't 593 00:27:57,600 --> 00:27:58,879 Speaker 1: get your feet, you get nothing. 594 00:27:59,040 --> 00:28:00,440 Speaker 4: So if we're both. 595 00:28:00,240 --> 00:28:01,880 Speaker 1: So there's only one feet at a time, it kept 596 00:28:01,880 --> 00:28:03,240 Speaker 1: me simultaneous feeds. 597 00:28:03,000 --> 00:28:04,560 Speaker 2: Going to all the family members, so I'd be on 598 00:28:04,600 --> 00:28:04,880 Speaker 2: a walk. 599 00:28:04,920 --> 00:28:07,399 Speaker 4: Well, with the family Plan, you're playing paying for separate accounts, 600 00:28:07,400 --> 00:28:08,320 Speaker 4: so it's slightly different. 601 00:28:08,400 --> 00:28:09,040 Speaker 6: But if we're. 602 00:28:08,960 --> 00:28:12,240 Speaker 4: Sharing my individual sharing individual, and I'm listening to music 603 00:28:12,280 --> 00:28:15,560 Speaker 4: on a walk and my dad presses play, he overrides me, 604 00:28:15,640 --> 00:28:17,479 Speaker 4: and if I press play, I override him. 605 00:28:17,520 --> 00:28:19,760 Speaker 1: Well, that's probably the way Apple and Spotify want it, 606 00:28:19,800 --> 00:28:21,960 Speaker 1: because they don't want you sharing, right, they. 607 00:28:21,840 --> 00:28:24,320 Speaker 4: Want you to pay for the bat pay for the 608 00:28:24,320 --> 00:28:26,720 Speaker 4: family plan. The dumb thing is is that I pay 609 00:28:26,720 --> 00:28:29,320 Speaker 4: for Apple Music and my fiance pays for Spotify because 610 00:28:29,320 --> 00:28:32,199 Speaker 4: she likes their playlists. So we're supporting two companies spending 611 00:28:32,520 --> 00:28:35,000 Speaker 4: Probably I don't want to know what the banker in 612 00:28:35,080 --> 00:28:36,720 Speaker 4: you says, but I probably shouldn't. 613 00:28:36,359 --> 00:28:36,840 Speaker 5: Be doing well. 614 00:28:36,960 --> 00:28:39,680 Speaker 1: Yeah, well, I listened to free over there radio since 615 00:28:39,720 --> 00:28:42,040 Speaker 1: I took fifteen radio companies public back in the day. 616 00:28:42,080 --> 00:28:46,160 Speaker 1: But and maybe a little satellite serious XM kind of thing. 617 00:28:46,560 --> 00:28:49,160 Speaker 2: That's it. But I'm not paying. I don't know. 618 00:28:49,280 --> 00:28:52,040 Speaker 7: It's just causing problems because you have like yoga instructors 619 00:28:52,080 --> 00:28:54,080 Speaker 7: who are doing a class and then all of a sudden, 620 00:28:54,080 --> 00:28:58,120 Speaker 7: their husband clicks in and their yoga class. 621 00:28:56,920 --> 00:29:00,600 Speaker 1: That's a great part of that delicious though. 622 00:29:00,640 --> 00:29:01,280 Speaker 2: That's my question. 623 00:29:01,320 --> 00:29:03,440 Speaker 1: How would you Well, she's the other story in the 624 00:29:03,720 --> 00:29:07,000 Speaker 1: Wall Street Journal this yoga instructor kicked her husband off 625 00:29:07,080 --> 00:29:09,680 Speaker 1: or both boyfriend off. You've done because anyway she came 626 00:29:09,760 --> 00:29:13,840 Speaker 1: and your dad exactly all right, Now I am. I 627 00:29:14,040 --> 00:29:17,440 Speaker 1: stand for my five hour shift and radio, yes, five hours, 628 00:29:18,200 --> 00:29:20,000 Speaker 1: you know, breaking every union rule in the book. 629 00:29:21,880 --> 00:29:23,200 Speaker 2: And I think that's better. But I don't know what 630 00:29:23,240 --> 00:29:23,760 Speaker 2: do you? What do you got? 631 00:29:23,800 --> 00:29:25,280 Speaker 1: You got a story here from the Washington Post, And 632 00:29:25,320 --> 00:29:25,960 Speaker 1: you're right, it is. 633 00:29:25,920 --> 00:29:27,800 Speaker 7: Better because I always admired you for that. 634 00:29:27,880 --> 00:29:31,280 Speaker 1: I was like, man, I when I was managing a 635 00:29:31,320 --> 00:29:35,000 Speaker 1: business in Bloomberg, we had to pay. There's a period 636 00:29:35,000 --> 00:29:37,600 Speaker 1: of time, maybe six, seven, eight, nine years ago when 637 00:29:37,680 --> 00:29:40,000 Speaker 1: all the rage was getting the stand up desk, so 638 00:29:40,200 --> 00:29:42,480 Speaker 1: everybody wanted to stand this. That's fine, but it costs 639 00:29:42,520 --> 00:29:44,960 Speaker 1: me like two three thousand dollars to my budget every 640 00:29:44,960 --> 00:29:47,680 Speaker 1: time we had to install. And I'm like, and the 641 00:29:47,920 --> 00:29:49,680 Speaker 1: kids would do it for like a day or two 642 00:29:49,720 --> 00:29:51,200 Speaker 1: then go back to sitting. 643 00:29:51,680 --> 00:29:53,800 Speaker 7: But it is, it's and the research shows it. So 644 00:29:53,840 --> 00:29:55,640 Speaker 7: this is from the Washington Post. It says people who 645 00:29:55,680 --> 00:29:58,360 Speaker 7: spend most of their worktime sitting were found to be 646 00:29:58,480 --> 00:30:01,960 Speaker 7: at least sixteen percent more likely to die earlier than 647 00:30:01,960 --> 00:30:05,000 Speaker 7: normal than those who don't. Sit as much, and so 648 00:30:05,080 --> 00:30:07,840 Speaker 7: the sitters there risk from dying cardi vascular disease. It 649 00:30:07,920 --> 00:30:10,720 Speaker 7: was thirty four percent higher than non sitters. So you 650 00:30:10,760 --> 00:30:13,320 Speaker 7: see the difference there. How can you help well, they 651 00:30:13,400 --> 00:30:16,480 Speaker 7: say to add more leisure time physical activity, So go home, 652 00:30:16,520 --> 00:30:18,719 Speaker 7: maybe hop on the peloton for it says fifteen to 653 00:30:18,720 --> 00:30:21,440 Speaker 7: thirty minutes a day. Back and help out all right, 654 00:30:21,840 --> 00:30:24,520 Speaker 7: standing tables. Like you were talking about taking a break 655 00:30:24,560 --> 00:30:26,760 Speaker 7: every thirty minutes. I know my watch tells me when 656 00:30:26,800 --> 00:30:27,080 Speaker 7: I have. 657 00:30:27,320 --> 00:30:28,240 Speaker 6: Just when I'm back. 658 00:30:28,280 --> 00:30:29,480 Speaker 7: When I'm standing too much. 659 00:30:29,680 --> 00:30:31,480 Speaker 1: I'll tell you, hey, Rich, I get take a break, buddy. 660 00:30:31,560 --> 00:30:33,800 Speaker 7: Yeah, you can tell them take a break, and it 661 00:30:33,800 --> 00:30:35,600 Speaker 7: says take a break every thirty minutes, Paul. 662 00:30:35,640 --> 00:30:38,760 Speaker 2: So there, yeah, go okay, it's well Tom he comes back. 663 00:30:38,880 --> 00:30:40,480 Speaker 1: So we're gonna have to work that into the holes. 664 00:30:40,840 --> 00:30:42,640 Speaker 1: Are you a stand or standing. 665 00:30:42,400 --> 00:30:44,320 Speaker 4: In the standing desk? I bounce back and forth. I 666 00:30:44,400 --> 00:30:46,680 Speaker 4: do want one of the treadmills, though. I have friends 667 00:30:46,840 --> 00:30:48,280 Speaker 4: who are with the big work from home. They have 668 00:30:48,320 --> 00:30:50,120 Speaker 4: the treadmill. You have it go like a mile and 669 00:30:50,120 --> 00:30:52,440 Speaker 4: a half an hour, so nothing too crazy, but you're 670 00:30:52,440 --> 00:30:53,160 Speaker 4: getting steps in. 671 00:30:53,800 --> 00:30:56,280 Speaker 1: This is the Bloomberg surveillance podcast, bringing you the best 672 00:30:56,320 --> 00:30:59,880 Speaker 1: in economics, geopolitics, finance, and investment. You can also watch 673 00:31:00,080 --> 00:31:03,520 Speaker 1: the show live on YouTube. Visit the Bloomberg Podcast channel 674 00:31:03,560 --> 00:31:06,480 Speaker 1: on YouTube to see the show weekday mornings from seven 675 00:31:06,480 --> 00:31:09,240 Speaker 1: to ten Eastern from our global headquarters in New York City. 676 00:31:09,480 --> 00:31:12,760 Speaker 1: Subscribe to the podcast on Apple, Spotify, or anywhere else 677 00:31:12,840 --> 00:31:16,080 Speaker 1: you listen, and as always on Bloomberg Radio, the Bloomberg Terminal, 678 00:31:16,160 --> 00:31:17,320 Speaker 1: and the Bloomberg Business app.