WEBVTT - Surveillance: Risks Still Out There, Atlanta Fed's Bostic Says 0:00:00.080 --> 0:00:13.040 Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Leye. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.960 Bloomberg dot Com, and of course on the Bloomberg. We 0:00:28.080 --> 0:00:30.760 start the day where we started every single morning on 0:00:30.840 --> 0:00:33.400 Phase one Deal watch. There is no Phase one deal 0:00:33.440 --> 0:00:36.720 agreement yet I strongly support that, and I put this 0:00:36.760 --> 0:00:39.760 in the script on TV. To me, it's the idea 0:00:39.920 --> 0:00:43.239 of a one and done tariff adjustment or is it 0:00:43.360 --> 0:00:46.360 some form of sequence forward? And we still don't know. 0:00:46.520 --> 0:00:48.600 This came from Royt's in the last twenty four hours, 0:00:48.600 --> 0:00:50.760 and agreement between the United States and China to roll 0:00:50.800 --> 0:00:53.440 back existing tariffs as part of a Phase one trade 0:00:53.479 --> 0:00:57.520 deal faces fierce internal opposition in the White House. That 0:00:57.640 --> 0:00:59.520 is where we are right now here in New York 0:00:59.520 --> 0:01:02.400 on police to say is Stephen Stanley, chief economist at 0:01:02.400 --> 0:01:05.360 Amherst Peer Punk, Good morning to Stephen, Good morning your 0:01:05.400 --> 0:01:07.760 take on the back and forth all of this. The 0:01:07.800 --> 0:01:11.360 market is quite clearly made a decisive move yields higher 0:01:11.440 --> 0:01:14.759 equities advance, Yet we still don't have a phase one agreement. 0:01:14.880 --> 0:01:17.920 What is going on? Well, you you need to let 0:01:17.920 --> 0:01:20.080 the fund play out a little more. I think every 0:01:20.160 --> 0:01:22.280 day this week you come in in the morning and 0:01:22.400 --> 0:01:24.320 the markets either up or down based on what the 0:01:24.360 --> 0:01:26.959 latest trade headline is. And unfortunately it feels like we're 0:01:26.959 --> 0:01:28.720 going to be dealing with that for at least another month. 0:01:28.800 --> 0:01:31.000 You would seem to be higher though on positive news 0:01:31.040 --> 0:01:33.319 than they are lower on negative news. There's a real 0:01:33.440 --> 0:01:36.680 difference in terms of the market bias investor attitude than 0:01:36.760 --> 0:01:39.280 compared to maybe three months ago. Yeah, I think people 0:01:39.319 --> 0:01:41.480 are getting a little more optimistic. There's a sense in 0:01:41.520 --> 0:01:44.319 the markets that maybe the global economy, while it's not 0:01:44.480 --> 0:01:47.800 greats has maybe seen its worst days and if we 0:01:47.840 --> 0:01:50.240 are going to get a trade deal, that that signals, 0:01:50.360 --> 0:01:53.440 you know, maybe better days ahead. Going into your take 0:01:53.560 --> 0:01:57.000 is interesting. The details of a deal are probably less 0:01:57.000 --> 0:02:00.480 important than the degree of the clarity that it provides. 0:02:01.400 --> 0:02:04.360 Why South because if you look at the U. S economy, 0:02:04.480 --> 0:02:06.720 the bulk of the damage that's been done because of 0:02:06.800 --> 0:02:09.680 the trade situation is not so much the direct impact 0:02:09.760 --> 0:02:12.560 of the tariffs. It's the uncertainty that has kept businesses 0:02:12.639 --> 0:02:16.760 sideline from investing. So if they see something that allows 0:02:16.840 --> 0:02:20.239 them to move forward with clarity. Then it doesn't really 0:02:20.280 --> 0:02:22.679 matter what the details are. It's just getting them back 0:02:22.720 --> 0:02:25.120 to the table in investing again. And Friday's the game 0:02:25.160 --> 0:02:27.480 will start, I don't know, three o'clock this afternoon. It'll 0:02:27.480 --> 0:02:29.920 clicking on all the blogs, all the analysis. What I 0:02:29.960 --> 0:02:33.000 call the gloom Friday tone. It's been there every week 0:02:33.040 --> 0:02:35.040 and the you know, walls of worry up up up 0:02:35.040 --> 0:02:37.880 in the markets. Steve Sandley, you're gonna drive over that 0:02:37.919 --> 0:02:40.960 with a bulldozer. With an above two and a half 0:02:41.040 --> 0:02:45.200 percent GDP call for the next X number of quarters, 0:02:45.240 --> 0:02:48.720 how alone do you feel and calling for a better 0:02:48.880 --> 0:02:52.400 American economy over the next number of quarters. Well, it's 0:02:52.400 --> 0:02:55.239 certainly an above consensus call. I would say that it's 0:02:55.280 --> 0:02:58.600 interesting the FED has been much more optimistic in their 0:02:58.639 --> 0:03:02.760 tone about the economy in UM the consensus market view 0:03:02.840 --> 0:03:05.359 for quite a while, but the markets have focused more 0:03:05.520 --> 0:03:07.960 on the fact that the FED has been talking about 0:03:08.000 --> 0:03:11.400 downside risks UM. Now that the FED has paused, it 0:03:11.480 --> 0:03:14.440 feels like the shift has gone away from the risks 0:03:14.440 --> 0:03:16.760 a little bit and more to the UM to the 0:03:16.960 --> 0:03:19.359 point estimate forecast, I think a little bit. Where's the 0:03:19.400 --> 0:03:22.079 source of growth in the U. S economy from here, well, 0:03:22.120 --> 0:03:25.560 the consumer continues to be the the sector that's kind 0:03:25.600 --> 0:03:28.200 of driving the train. But I think to get to 0:03:28.240 --> 0:03:30.639 a faster pace of growth from here, you need to 0:03:30.680 --> 0:03:33.000 see a little bit of a revival and business investment, 0:03:33.040 --> 0:03:34.920 which has been negative for the last couple of quarters. 0:03:34.960 --> 0:03:38.040 And when we talk about consumers, there are discussions about 0:03:38.080 --> 0:03:42.760 cracks in the consumer. Uh. Do you buy that the 0:03:42.840 --> 0:03:46.480 labor market is very strong? Uh? Consumer balance sheets as 0:03:46.480 --> 0:03:48.960 a whole are pretty clean. I I think the consumers 0:03:49.000 --> 0:03:50.640 can't get shape. You get the failing though that this 0:03:50.760 --> 0:03:53.920 might be too little, too light. And as far as 0:03:53.960 --> 0:03:56.720 the tride War is concerned that manufacturing abroad is taken 0:03:56.840 --> 0:03:59.400 such a massive hit that it might be inevitable that 0:03:59.440 --> 0:04:01.280 it bleeds to us to what the pots of the economy. 0:04:01.320 --> 0:04:03.839 What do you make of the document? Um, I don't 0:04:03.920 --> 0:04:07.640 think that that's inevitable. I guess the bleed point, it 0:04:07.720 --> 0:04:10.080 seems like would be the labor market, right because business 0:04:10.120 --> 0:04:14.200 has gotten pretty cautious un investment, but they're still hiring. Um. 0:04:14.520 --> 0:04:16.680 Is there a point which they stopped hiring? And that 0:04:16.760 --> 0:04:18.880 was a real concern. I think over the last few 0:04:18.920 --> 0:04:22.560 months and the payroll report last Friday I think alleviated 0:04:22.600 --> 0:04:24.520 that concern to a great degree, because not only did 0:04:24.520 --> 0:04:26.360 you get it better than expected number in October, but 0:04:26.440 --> 0:04:29.000 you've got significant upward divisions to the prior two months. 0:04:29.040 --> 0:04:31.560 So all of a sudden, that slowing trajectory that we 0:04:31.640 --> 0:04:34.359 thought we were seeing isn't there anymore? Enlightened us on 0:04:34.400 --> 0:04:38.960 the makeup of the marginal decline in exports. There's a 0:04:39.000 --> 0:04:41.520 wonderful article I am that was based off i AM 0:04:41.560 --> 0:04:42.920 F research. I think it was in the f T. 0:04:43.440 --> 0:04:46.880 It talked about global auto demand, unit demand down, etcetera. 0:04:47.279 --> 0:04:51.040 But when we say exports are down, is that six 0:04:51.200 --> 0:04:53.840 you know, tankers out of Portland with soybeans on him? 0:04:53.880 --> 0:04:57.760 Is that automobiles? Is that IBM computers? What is that iPhone? 0:04:57.880 --> 0:05:00.680 iPhones are coming this way? When we say we have 0:05:00.760 --> 0:05:04.240 declining exports, what is that? Yeah? Well it's interesting because 0:05:04.800 --> 0:05:07.040 US exports, you know, if you look at kind of 0:05:07.040 --> 0:05:09.960 what are the big categories, A lot of it is 0:05:10.040 --> 0:05:12.040 stuff that you would call kind of low on the 0:05:12.080 --> 0:05:16.120 supply chain, raw materials and um we used to export 0:05:16.120 --> 0:05:18.159 a lot of waste paper to China, for example, and 0:05:18.200 --> 0:05:20.640 scrap metal and stuff like that, and then stuff at 0:05:20.640 --> 0:05:22.840 the very high end, and certainly one thing there would 0:05:22.839 --> 0:05:25.600 be Boeing. I mean, we know that Boeing exports obviously 0:05:25.640 --> 0:05:27.040 are kind of dead in the water right now because 0:05:27.040 --> 0:05:29.560 of the max um. But yeah, I mean, I think 0:05:29.560 --> 0:05:31.680 you've seen a lot of altility from one month to 0:05:31.720 --> 0:05:33.479 the next, and a lot of that is trying to 0:05:33.520 --> 0:05:37.160 time these changes in tariffs. Um, it'll be interesting if 0:05:37.160 --> 0:05:38.880 we do get a deal and we get some stability 0:05:38.920 --> 0:05:42.360 to see what happens. Two reasons for optimism now, One 0:05:42.440 --> 0:05:44.599 that we may get a face one truce between the 0:05:44.640 --> 0:05:47.360 United States and China, and too, there are signs that 0:05:47.400 --> 0:05:50.760 the global economy it's bottoming out in the trade day 0:05:50.800 --> 0:05:54.039 to today, expectations that Chinese exports may completely roll over 0:05:54.080 --> 0:05:57.239 once again better than expect It's still weaker, but better 0:05:57.400 --> 0:06:00.720 than expect it. Do you see those signs as while Stephen, 0:06:00.800 --> 0:06:03.520 and it's that more important than a potential for trite 0:06:03.520 --> 0:06:07.520 truths that the global economy is shoving scientift bottoming out. Yeah, 0:06:07.880 --> 0:06:11.640 I mean, you know, it's it's not getting worse anymore. Um, 0:06:11.800 --> 0:06:13.240 you know, I don't I don't want to jump the 0:06:13.240 --> 0:06:17.120 gun and say that things are getting hugely are hugely 0:06:17.160 --> 0:06:20.080 improved from here, But it does feel like it's kind 0:06:20.080 --> 0:06:23.599 of settling at the bottom, and hopefully we'll rebound from there. 0:06:23.839 --> 0:06:26.320 I do think the trade thing is is critical here 0:06:26.360 --> 0:06:30.000 because even the economies that aren't necessarily directly tied, and 0:06:30.000 --> 0:06:32.800 and I would give the example of Germany. Um, there's 0:06:32.800 --> 0:06:34.880 no reason that their economy should be affected by US 0:06:34.960 --> 0:06:37.440 China trade negotiations, but but it is because they are 0:06:37.520 --> 0:06:41.440 so highly leveraged trade. Steven Stanley, we are, we are 0:06:41.480 --> 0:06:44.240 just immune on the American consumer. I won't shop below 0:06:44.279 --> 0:06:48.599 fifty Night Street. Farrell won't go below Sex. Lisa was 0:06:48.640 --> 0:06:52.000 seen in Soho like three months ago. I think shopping 0:06:52.080 --> 0:06:54.440 What is the state of the American consumer away from 0:06:54.480 --> 0:06:57.640 our little you know, two zip code view here? Yeah? Well, 0:06:57.680 --> 0:06:59.920 I mean you've got a three point five percent unemployment 0:07:00.000 --> 0:07:02.960 eight you've got high consumer confidence, and you've got a 0:07:03.000 --> 0:07:06.320 savings rate above eight percent? So are we saving? Are we? 0:07:06.400 --> 0:07:08.880 Are we gonna spend it? You know? This weekend below 0:07:08.920 --> 0:07:13.760 fourteen Street. I would just say that, you know, most 0:07:13.840 --> 0:07:16.440 retailers that I've heard from are expecting a very good 0:07:16.480 --> 0:07:19.080 holiday season. Do you buy that? I was thinking about 0:07:19.120 --> 0:07:22.080 that walking around you know above fifty ninth Street last night. 0:07:22.200 --> 0:07:23.760 Do you really buy that we're gonna have a bang 0:07:23.800 --> 0:07:26.440 up holiday season? I don't see why not. I mean, 0:07:26.600 --> 0:07:29.440 almost everybody has a job and people are feeling pretty 0:07:29.440 --> 0:07:31.840 good about things. So yeah, I think we will have 0:07:32.840 --> 0:07:39.080 straight once once for an interview with the old g 0:07:39.280 --> 0:07:41.920 E Office building, which is I think on fifty three. 0:07:43.880 --> 0:07:48.040 It was like the studios are right in Jack. I 0:07:48.080 --> 0:07:51.520 have a serious quick question, Steve, when you talk about 0:07:51.560 --> 0:07:55.000 Gucci the high end shopper versus the low end shopper, 0:07:55.280 --> 0:07:58.920 where will the strength come from? Well, I think the 0:07:59.000 --> 0:08:02.040 good news. You know, there have been concerns about you know, 0:08:02.160 --> 0:08:03.920 obviously in the political run there a lot of talk, 0:08:04.000 --> 0:08:06.160 there's a lot of talk about income inequality, but even 0:08:06.280 --> 0:08:08.600 within the economic circles, I think there's been some concern 0:08:08.640 --> 0:08:12.200 about the narrow uh benefits. You know that the upper 0:08:12.560 --> 0:08:16.440 um income households were benefiting all we're getting all the benefit. 0:08:16.680 --> 0:08:19.160 And what we've seen lately, which is pretty classic for 0:08:19.160 --> 0:08:21.760 an economic cycle, is as you get longer into the cycle, 0:08:22.400 --> 0:08:25.040 the benefits start to move down the curve. And I 0:08:25.040 --> 0:08:28.800 think what we're seeing is now you've got labor shortages 0:08:28.880 --> 0:08:32.280 even for unskilled workers. You've got wages going up faster 0:08:32.400 --> 0:08:34.679 for unskilled than for skilled wonders. So I think there 0:08:34.800 --> 0:08:38.040 is some, uh if you want to call it democratization 0:08:38.120 --> 0:08:41.160 of the expansion. Stephen Stanley, thank you so much for 0:08:41.200 --> 0:08:59.240 the point. Greatly greatly appreciate that. Global Wall Street gearing 0:08:59.320 --> 0:09:02.480 up for Friday and from the weekend. Steven Stanley joining 0:09:02.559 --> 0:09:05.160 us in the last hour of Amir's pure punt and 0:09:05.160 --> 0:09:07.680 he is a stunning above two and a half percent 0:09:07.840 --> 0:09:11.040 GDP call for the next six months. Very few people 0:09:11.040 --> 0:09:15.000 out there and that optimism Stanley adamant. It is all 0:09:15.040 --> 0:09:17.680 linked into trade, which is a good way to bring 0:09:17.720 --> 0:09:24.520 in our next guest on China. Miranda high Song, International 0:09:24.600 --> 0:09:27.400 senior macro strategist joins us. Now, Miranda, great Tammy with 0:09:27.440 --> 0:09:29.600 us on the program. Let's start with the data out 0:09:29.600 --> 0:09:32.960 of China. Shall we expectations for exports to roll over. 0:09:33.000 --> 0:09:36.160 They weaken, but not as much as expected. Please help 0:09:36.240 --> 0:09:38.360 us understand whether we have seen the worst of the 0:09:38.480 --> 0:09:42.880 data in China. Well, yeah, on the trade side, it 0:09:42.960 --> 0:09:46.000 was actually the exports were only down point nine, which 0:09:46.040 --> 0:09:49.360 is a lot better than expectations. Um and interestingly, a 0:09:49.360 --> 0:09:51.880 lot of it seems to be being diverted. So it's 0:09:51.920 --> 0:09:54.600 not coming from China, but it's going to the US maybe, 0:09:54.800 --> 0:09:58.719 but it's going to other Asian um nations UM and 0:09:58.800 --> 0:10:01.160 offer to to place US tide to Taiwan. So we're 0:10:01.200 --> 0:10:04.760 actually seeing quite a lot of trade being diverted rather 0:10:04.840 --> 0:10:07.360 than necessarily going to the going to the US market. 0:10:07.960 --> 0:10:11.080 And the interesting thing is now this is basically you're 0:10:11.120 --> 0:10:13.880 coming on for a year of the trade war really 0:10:13.920 --> 0:10:16.480 sort of having an impact, and we're now getting into 0:10:16.559 --> 0:10:20.880 much weaker year on year comparisons. So actually, if this 0:10:20.960 --> 0:10:23.280 is as bad as it gets, then for the next 0:10:23.320 --> 0:10:25.800 few months, we might actually see improving figures from China 0:10:26.400 --> 0:10:29.760 rather than a continued, continued slow down. Miranda. Today was 0:10:29.800 --> 0:10:31.840 the exports that were better than expected. It wasn't the 0:10:31.840 --> 0:10:34.560 imports that really picked up. The imports still look weak. 0:10:34.880 --> 0:10:37.600 That's a story of weak domestic demand for a lot 0:10:37.600 --> 0:10:40.439 of people. Any signs that things are actually picking up 0:10:40.840 --> 0:10:45.360 in the domestic economy, well on the import side is 0:10:45.360 --> 0:10:48.200 actually so you've actually got if you look at the volume, 0:10:48.640 --> 0:10:52.439 volumes were actually pretty good. Interesting crude crude oil was 0:10:52.520 --> 0:10:55.680 up about twelve um, copper was done, but then you 0:10:55.720 --> 0:10:59.400 had things like the plastics and and and so interestingly, 0:10:59.440 --> 0:11:05.080 the the chips chip deliveries were actually really strong about twelve, 0:11:05.679 --> 0:11:08.160 but it was the value that basically dragged the thing down. 0:11:08.200 --> 0:11:09.920 So if you think the all prices and a lot 0:11:09.960 --> 0:11:12.440 of the commodity prices have come down over the last year, 0:11:12.760 --> 0:11:15.560 so that's making it look worse than it actually that 0:11:15.600 --> 0:11:17.720 actually is. And you know, if you if you stip 0:11:17.760 --> 0:11:19.800 that out, then you're basically talking maybe sort of want 0:11:19.920 --> 0:11:23.440 two percentage points down rather than the minus six. But 0:11:23.640 --> 0:11:25.679 I mean coming forward, I think that's going to then 0:11:25.720 --> 0:11:29.520 also you do have some infrastructure side coming in and 0:11:29.559 --> 0:11:31.840 then they're really big debate I think is what happens, 0:11:32.280 --> 0:11:34.520 you know, in the in the auto market, and that 0:11:34.520 --> 0:11:38.160 could really bring in some sort of a sort of flatlining, 0:11:38.160 --> 0:11:41.800 a sort of activity in Q four after what's been 0:11:41.800 --> 0:11:44.880 a really big drag this year. So how much is 0:11:44.920 --> 0:11:48.400 this a story of PBOC liquidity making its way into 0:11:48.480 --> 0:11:50.400 the economy and we're seeing the path there, and how 0:11:50.480 --> 0:11:53.040 much is it's just that people got ahead of themselves 0:11:53.040 --> 0:11:57.760 with the China slowing down into crisis story, Well, I 0:11:57.800 --> 0:12:00.120 think the expectations where the China would be hit a 0:12:00.160 --> 0:12:03.160 lot worse than it has actually been. Um. I mean, 0:12:03.200 --> 0:12:06.320 you have had sort of reasonable um domestic demand. But 0:12:06.360 --> 0:12:08.080 the interesting thing is the p D O C in 0:12:08.080 --> 0:12:10.600 the government haven't done I mean as that they keep saying, 0:12:10.600 --> 0:12:13.320 they haven't done the flood liquidity and they haven't just 0:12:13.400 --> 0:12:17.560 pushed out the bank loans, and they've kept things quite restrained, 0:12:17.600 --> 0:12:20.360 you know, things like the shadow banking um and also 0:12:20.400 --> 0:12:22.200 the p P financing where this is where a lot 0:12:22.200 --> 0:12:25.920 of consumer debt has built up. It's not actually loosened 0:12:26.000 --> 0:12:28.800 us up. Just to be honest, what's keeping the whole 0:12:29.320 --> 0:12:31.720 the whole economy on the road is actually the property 0:12:31.760 --> 0:12:35.840 market where they've allowed you know, some loosening and that's 0:12:35.960 --> 0:12:39.080 sort of keeping everything you know, going reasonably well. But 0:12:39.160 --> 0:12:41.880 they've not, um, they've not done a sort of a 0:12:41.960 --> 0:12:45.959 huge stimulus. So that's basically keeping things relatively stable at 0:12:45.960 --> 0:12:48.160 the same time as you have obviously the trade war impact. 0:12:48.600 --> 0:12:51.320 Can they afford to delay all this talk of the 0:12:51.400 --> 0:12:53.679 week and you know, we're exhausted by the talk of 0:12:53.760 --> 0:12:57.360 the week, but morinda, can they just toss this into 0:12:57.360 --> 0:13:02.840 two thousand twenty they they I mean, obviously the so 0:13:02.920 --> 0:13:06.760 the trade war UM side, they could you know, get 0:13:06.760 --> 0:13:09.160 this in December. It's phase one. This is something that 0:13:09.320 --> 0:13:12.960 China would have, um, you know, decided on last year. 0:13:13.000 --> 0:13:15.400 They would have agreed to something similar you know, this 0:13:15.440 --> 0:13:16.840 time last year, and you wouldn't have had to have 0:13:16.880 --> 0:13:19.760 all this, all the all the rest of it. But 0:13:19.800 --> 0:13:23.240 the but yea, but yes, in terms of the longer 0:13:23.360 --> 0:13:25.360 term issues, in terms of you know, getting to the 0:13:25.360 --> 0:13:28.920 phase two. Um, then the debate is whether China is 0:13:28.960 --> 0:13:33.880 ever going to concede do anything as as significant as 0:13:34.080 --> 0:13:38.360 as the US wants in terms of you know them 0:13:39.160 --> 0:13:42.679 removing state ownership and removing state influence and removing all 0:13:42.760 --> 0:13:45.400 the a lot of redlines for China. So yeah, I 0:13:45.400 --> 0:13:47.760 mean it's phase one could get stein. But then phase two, 0:13:48.040 --> 0:13:50.520 that's that's going to that's a longer term issue and 0:13:50.600 --> 0:13:53.880 that may have to wait a lot longer. Well, Miranda, 0:13:54.000 --> 0:13:55.840 Typically what we would think is that if we go 0:13:55.880 --> 0:13:58.679 into phase two without tackling the big issues, that it 0:13:58.720 --> 0:14:00.920 could blow up Phase one. The reason why some people 0:14:00.960 --> 0:14:03.800 don't think that movie plays out this time around going 0:14:03.840 --> 0:14:07.439 into next year is because next year is an election year. 0:14:07.520 --> 0:14:11.240 Does that change things for you, Miranda, Well, the thing 0:14:11.320 --> 0:14:18.320 is the China that being hard on China can play 0:14:18.360 --> 0:14:20.320 well if you get the if you get the Phase 0:14:20.360 --> 0:14:23.040 one deal signed, and so therefore the agricultural exports and 0:14:23.080 --> 0:14:28.120 al and G benefits that part of the elector, then 0:14:28.400 --> 0:14:30.880 that's fine for China and for the US. But in 0:14:31.000 --> 0:14:34.480 terms of then the bigger scale, so that's a sort 0:14:34.520 --> 0:14:38.160 of you know, the technology, the five G warth and 0:14:38.280 --> 0:14:40.600 AI and a lot of the bigger sort of like 0:14:40.680 --> 0:14:43.720 state influence. Then to be honest in going into an 0:14:43.720 --> 0:14:47.120 election taking a strong stance on that may not actually 0:14:47.160 --> 0:14:50.040 that be that bad if you've already sort of saved 0:14:50.080 --> 0:14:52.920 a little bit of the economy by doing the by 0:14:52.960 --> 0:14:55.040 doing the Phase one deal. And Miranda Kurr, thank you 0:14:55.080 --> 0:15:12.440 so much, greatly appreciated. With High Time International, John. This weekend, 0:15:12.640 --> 0:15:16.480 it's a keen household movie weekend. I'm signing up for 0:15:16.560 --> 0:15:20.760 Excite streaming services. November twelve, that's when Disney Plus comes out. 0:15:20.760 --> 0:15:22.760 You're gonna sign I got a free gave me a 0:15:22.880 --> 0:15:25.520 free up on that early, like two weeks early. I've 0:15:25.560 --> 0:15:31.760 got Disney Plus, Peacock, Hulu, Netflix, the abrama Witz Network. 0:15:32.200 --> 0:15:34.520 What's the abrama Witz networks? You know, like sort of 0:15:34.520 --> 0:15:38.840 super is that money Undercover on Tuesdays at one pm, 0:15:39.520 --> 0:15:44.720 repeat over and over. Lots of people are rushing into that. 0:15:44.880 --> 0:15:47.480 Keithan Rock Nathan joining us now bloom Bug Intelligence media 0:15:47.520 --> 0:15:50.640 analysts with Disney. That's what we're here to talk about. Disney. 0:15:50.680 --> 0:15:53.640 The stock up by six point five percent with an 0:15:53.680 --> 0:15:57.280 earnings beat, and November twelfth, they're joining the streaming wars. 0:15:57.360 --> 0:16:01.440 Gaither your view on the number so far? Yeah, thank you, 0:16:01.480 --> 0:16:03.000 Thank you so much. John So, there was a lot 0:16:03.040 --> 0:16:06.920 to like in Disney's report last night. They're firing on 0:16:07.000 --> 0:16:10.120 all cylinders. But I think, just as we heard Bob 0:16:10.120 --> 0:16:14.600 Iger speak, there's really a streaming first mentality with the management. 0:16:14.600 --> 0:16:17.120 There's a lot of enthusiasm around the Disney Plus launch. 0:16:17.600 --> 0:16:19.120 This is one This is going to be one of 0:16:19.200 --> 0:16:22.760 the most affordable streaming services out there in the marketplace, 0:16:22.840 --> 0:16:27.560 anchored by world class brands like Marvel, Pixar, Lucas Nacio, 0:16:28.200 --> 0:16:30.960 and it's really perfect for the thirty five million US 0:16:31.040 --> 0:16:34.320 households with children who want to immerse themselves in the 0:16:34.400 --> 0:16:37.960 vast world of Disney. I did a long term of 0:16:38.080 --> 0:16:41.360 all study of Disney, and I think I can editorialize 0:16:41.360 --> 0:16:45.360 that they haven't popped like they've popped recently back pushing 0:16:45.600 --> 0:16:50.080 twenty two years. I mean this surge, streaming surge, this 0:16:50.240 --> 0:16:53.360 tiger surge that we've seen, what does that do to 0:16:53.480 --> 0:16:56.320 buy hold cell? Not your by hold cell, but what 0:16:56.400 --> 0:16:58.760 does that do to the street? Is it out front 0:16:58.880 --> 0:17:02.480 because of the pop to ahead of itself? I don't 0:17:02.520 --> 0:17:06.160 think it's ahead of itself. So you're absolutely right, tom 0:17:06.200 --> 0:17:08.119 So for for for the past four years, I mean, 0:17:08.160 --> 0:17:10.480 the stock has been languishing ever since two thousand and 0:17:10.520 --> 0:17:14.040 fifteen when they first spoke about the ESPN subscriber losses. 0:17:14.400 --> 0:17:17.720 And this year's April Investor Day was the real catalyst. Um, 0:17:17.760 --> 0:17:21.560 you know, them announcing the service of the distribution partnerships, 0:17:21.600 --> 0:17:24.720 the content. Everything seems to be kind of working in 0:17:24.760 --> 0:17:27.200 their favor right now. I think in terms of near 0:17:27.320 --> 0:17:32.639 term catalysts, of course the studio is outperforming um, but 0:17:32.720 --> 0:17:34.680 more than anything, I mean, streaming is definitely going to 0:17:34.760 --> 0:17:37.439 be the number one catalysts. I think in general, the 0:17:37.480 --> 0:17:41.720 street is expecting about a ten million subscriber number by 0:17:41.720 --> 0:17:45.440 the end of this year. Disney itself refused to give 0:17:45.480 --> 0:17:48.360 any early reads on subscribers. They've only pointed to their 0:17:48.400 --> 0:17:52.400 longer term sixty to ninety million Disney plus subscriber goal. 0:17:52.440 --> 0:17:55.320 But that's over five years. But I think the first 0:17:55.359 --> 0:17:58.000 reads would be in in the first quarter of their 0:17:58.000 --> 0:18:02.440 fiscal first ter um when as management decides to give 0:18:02.440 --> 0:18:04.800 any early number, do we give you a little bit 0:18:04.840 --> 0:18:10.400 of research here right now, Lisa, November one, Frozen two. 0:18:10.480 --> 0:18:12.320 Do you go to the six pm show or the 0:18:12.400 --> 0:18:16.040 nine PM show? How about the never show? Oh no, 0:18:16.200 --> 0:18:18.840 come on, You're gonna go see the Frozen two in 0:18:18.880 --> 0:18:20.600 the theater the first time I got to gotta pay 0:18:20.640 --> 0:18:23.440 forty eight dollars a ticket or whatever. How big? How 0:18:23.440 --> 0:18:26.119 big is Frozen two to all this? Oh? It is? 0:18:26.160 --> 0:18:29.240 It is massive. I mean if you just heard management yesterday. 0:18:29.480 --> 0:18:33.000 So they actually reported a seventeen percent increase in the 0:18:33.040 --> 0:18:36.480 operating operating income for their park segment. But really the 0:18:36.560 --> 0:18:38.600 driver there was not so much the parks, but it 0:18:38.680 --> 0:18:41.440 was more the merchandise at thirty six percent increase in 0:18:41.520 --> 0:18:45.160 Frozen and Toy Story merchant. So this is huge. Brando 0:18:45.280 --> 0:18:48.120 with boys. You were in Elson and my older son 0:18:48.240 --> 0:18:50.960 said to me when Frozen one was hot, all the 0:18:51.000 --> 0:18:54.600 girls love Frozen. My favorite favorite movie is my favorite 0:18:54.600 --> 0:18:58.440 movie is hot? What what is that? It's not It's 0:18:58.960 --> 0:19:03.240 just not appropriate for radio. Like Frozen. How it's up 0:19:03.440 --> 0:19:12.320 continuing at is very cool, but what's serious is Frozen 0:19:12.359 --> 0:19:14.520 two moves the needle. I think that there's also an 0:19:14.560 --> 0:19:18.120 interesting question about fixed expenses for Disney and how much 0:19:18.480 --> 0:19:20.960 UH they're going to bring in versus pay out. There 0:19:21.040 --> 0:19:23.520 was a story about how the fact they have come 0:19:23.520 --> 0:19:27.320 to an agreement Amazon, Samsung and LG Devices and in 0:19:27.440 --> 0:19:30.439 order to stream their service they already have agreements with 0:19:30.480 --> 0:19:33.800 Apple and Roku. How much of a drag will that be? 0:19:34.920 --> 0:19:37.439 Um So. I think the Amazon deal absolutely adds to 0:19:37.520 --> 0:19:42.119 their distribution muscle. They've already pointed investors to the fact 0:19:42.160 --> 0:19:44.720 that there is going to be some upfront costs with 0:19:44.800 --> 0:19:47.159 the streaming service. I mean, this always happens when you 0:19:47.200 --> 0:19:51.280 need to build up the scale. Um So. They've pointed 0:19:51.680 --> 0:19:54.880 to the streaming services not actually bringing in any profits 0:19:54.880 --> 0:19:57.800 for at least another three to four years. So is 0:19:57.840 --> 0:20:01.960 when Disney Plus breaks even, it could break even earlier 0:20:02.000 --> 0:20:04.399 if if they totally hit the ground running with the 0:20:04.440 --> 0:20:07.000 subscriber number. So we'll have to wait and watch. Katha 0:20:07.040 --> 0:20:09.400 always great to get your thoughts. Keithan Rock and Bloomberg 0:20:09.600 --> 0:20:26.960 Intelligence media analyst went again on the economic data, I'm 0:20:27.000 --> 0:20:29.760 pleased to say, joining us right now Atlanta FED President 0:20:29.840 --> 0:20:32.960 Raphael Bostick sitting down with Bloomberg's Michael McKay and Alex 0:20:33.000 --> 0:20:36.080 Steele Now are Bloomberg television and radio listeners and joining 0:20:36.160 --> 0:20:39.920 us here for a special conversation is Raphael Bostic, president 0:20:40.000 --> 0:20:42.600 of the Atlanta Fed. You're the perfect one to help 0:20:42.640 --> 0:20:45.919 us answer all these questions. You said yesterday that you 0:20:45.960 --> 0:20:48.920 would probably dissented and voted against an interest rate cut 0:20:49.119 --> 0:20:53.360 at the last f O MC meeting. Why. Well, one 0:20:53.359 --> 0:20:54.720 of the things that we try to do in the 0:20:54.760 --> 0:20:57.120 sixth district is really get a sense of what's such 0:20:57.119 --> 0:21:00.639 rejective of the economy and how much are the risks 0:21:00.680 --> 0:21:04.080 out there being taken on by businesses and consumers, And 0:21:04.119 --> 0:21:07.280 in my canvassing of our district and hearing from our directors, 0:21:07.520 --> 0:21:10.199 we just weren't hearing that in a material way. And 0:21:10.240 --> 0:21:12.640 so we had already done a fair amount of accommodation. 0:21:12.840 --> 0:21:16.040 We've moved twice already, and it was my view that 0:21:16.080 --> 0:21:18.600 we really should just let that go and let's wait 0:21:18.640 --> 0:21:20.679 and see how it how it plays out, and if 0:21:20.720 --> 0:21:23.760 then then if we see that there's more need for accommodation. 0:21:23.840 --> 0:21:26.080 We could act at that point, We've already done a lot, 0:21:26.119 --> 0:21:28.639 and I was willing to just let's see how that 0:21:28.680 --> 0:21:31.200 plays through the economy. Well, you concerned that rates are 0:21:31.320 --> 0:21:35.760 too low now that there's an issue with where rates 0:21:35.880 --> 0:21:39.360 are with inflation quiesced, what would be the problem? Well, 0:21:39.400 --> 0:21:41.920 I think, first of all, I think we are slightly 0:21:41.920 --> 0:21:45.200 accommodative UM, and that's fine. I don't think that our 0:21:45.240 --> 0:21:48.960 position now is likely to spark the economy to get 0:21:48.960 --> 0:21:51.680 into an overheated mode where we might expect there to 0:21:51.760 --> 0:21:54.480