Stocks 'Skewing' Markets | Bloomberg Surveillance | April 18, 2024

[Music] this is Bloomberg surveillance with Tom Keane and Paul sweed why are we upset if we're creating jobs inflation is still a thing out there for the everyday consumer with Lisa Mato on markets the economic calendar jam-packed today and Michael bar with news tensions between the US and China have eated up even more the best in economics Finance investment and international relations this is Bloomberg surveillance on Bloomberg Radio good morning everyone on a Thursday claims Thursday we do that at 8:30 today it's been a snooze the last couple months but the markets are not a s snooze Paul Sweeney back in the saddle and Tom Keane welcome all on economics Finance investment a great set of eclectic guests here uh across all of the tensions that are out there Paul what's what' you learn at the Bloomberg nef conference about the tensions out there I tell you what Tom the energy industry is they're all in on going to this green uh more energy economy if you will the money coming out of the US government for green energy is just extraordinary um so it is a certainly a public private partnership we'll see how it plays out did you jaw jaw drop uh Brent down from $90 a barrel to 8637 you singlehandedly do that I know but my gasoline prices at the pump down at the Jersey Shore are still high so we'll check in with John Tucker maybe a little bit later on that time we'll see uh what's going on in hydrocarbons of course Futures up 12 we're going to get to that with uh uh Lisa Matteo here uh in a moment we're out on Apple carplay we're on YouTube YouTube is just exploding I I I'm I was caught unawares by this I know it's interet it's like a new thing what the kids are doing you search ex well the older people are too thank you older people out there Bloomberg podcast search it and you will find us out there on YouTube look for Lisa mat that's the easiest easiest way to do it uh uh to get uh to us we're in the interactor broker Studios we need a day to check with our Bloomberg business flash here's Lisa Mato you got it and Futures are advancing and this is after Wall Street extended what is now the S&P 500's longest streak of losses since the beginning of the year now the decline come as the feds Loretta masterer said policy makers will they can hold rates steady and that the Central Bank shouldn't be in a hurry to cut interest rates now yesterday the fed's beige book I know Tom was reading it cover to cover it showed that America's economy had slight gains since February consumers remained very sensitive to inflation so right now we have Nasdaq futures up three t0 of a percent Dow S&P futures up about two t of percent the two-year yield 4.93% that's little change the 10year yield at 4.58% and that is down about one basis point to commodi spot gold higher at 2,383 an ounce but over at oil we've Brent crewed $86 a barrel NX crewed $81 a barrel want to point out Bitcoin they're at 62,000 to earnings we go Taiwan semiconductor manufacturing Outlook bead estimates AI demand fueling its business the ADR zo they're down nearly 2% right now and we'll stick with chips we'll go to Micron they're up more than 1% sources say it's set to get $6.1 billion in chips saxs grants next week and that's to help pay for those domestic Factory prodject projects and Microsoft up 210 of a perc Business Insider reporting the company plans to accumulate 1.8 million AI chips by the end of this year primarily from Nvidia that is your Bloomberg business flash Tom and Paul Lisa thanks so much biggest news of the day we saw it four five days ago Taiwan semiconductor came out with a tease and they delivered today and actually I I read every single word of it I thought it was just you know within the Gloom that's out there it's like what gin Martin Adams is saying I'm sorry business is getting done business is getting done and on the chip side I mean that is the way to play at least initially Tom the AI play so um people focusing on the chip start we're start strong today we hate her Amanda line him with this uh with black rock nice to see her she shows up with a 40-page deck I know I'm looking at it and she looks she got that evil eye if Tom if you don't at least get to page 35 I'm not talking to you on your 40 page deck the one chart that I really like Amanda line and this is on the linkage here of interest rates into equities bonds currencies Commodities you talk about dispersion what's dispersion and why should our audience care about it sure well first of all thank you so much for having me P 32 dispersion uh dispersion is really that things are really happening under the surface despite what may seem to be Optical uh low V tight spread levels which is a a complaint that we hear a lot from Market observers under the surface even though for example high yield spreads are optically tight um there are participating Parts like uh high quality low duration sectors of the market and then there are areas that are lagging like Triple C is low quality if Ed Heyman comes in yesterday and says as Number One issues baaa spreads show Nirvana you're suggesting underneath there's there's actually more to the story and it's not tell us not a rising tide lifts up boats I think if I were to distill it down Tom it would say um the market is efficient in that it's recognizing that there are some companies that were kept afloat by a by a super low rate environment and they will not be able to manage through a high for longer cost of capital environment something that we've been discussing for a while I think you also see it just broadly there's a lot of talk of monetary policy is restricted yes that's true in certain parts of credit certain parts of commercial real estate for example um but in general the economy has been quite resilient and actually we're seeing that bifurcation play out through credit I man I keep telling Tommy's got to take more credit risk but he says he can sit there in a two-year treasury 4.92% yeah that's not a bad trade so actually we think there's a tactical case for allocating to floating rate credit short duration credit to really pick up on that carrying income component um so I would agree with that I think given the signaling that we've had from central banks what we're seeing is that um we're not expecting rate Cuts in the early part of the second half we had previously been guiding to Cuts coming in the second half with risk skewed earlier we no longer see that I think the risks are more balanced um and then similarly if you expect this kind of transatlantic Divergence where it looks like the ECB is poised to cut in June the EC the FED will stay on hold um it actually does it does lend itself to a tactical allocation to loting rate credit is the Fed is there a scenario and you're you guys at at at Black Rock think that maybe they don't cut in 2024 I don't think we can rule it out uh I think the signaling from the chair the vice chair New York fed president Williams all even in the past few days has shown us that it's going this is going to take longer than expected I do think uh it is important that they get cut started in 2024 not because a 25 or 50 basis point reduction in rates is gamechanging for the live fin Market but rather I think certainty around monetary policy is not something that the credit Market needs right now and so if they do not cut and we start to talk more about the potential for hikes I think that's problematic for risk sentiment Ino that's the Bloomberg index browser when I look at the fixed income space I got all red this year even the high yield which had been a pretty good performer what do I do here I mean how do I make money in fixed income these days the one part of credit that is positive is leverage loans uh because of the floating rate so I again it goes back to that point that if you're if you're thinking about tap IAL asset allocation one of the areas that actually we think is supported in this environment is floating rate exposure you could do that a bunch of different ways right you could do that in the IG Market leverage loans Clos private debt even um and I think that to your point that's exactly where that dispersion comes into on Within credit it's not all created equal our audience is not going to go out they're not on the phone at 9:00 A.M going gez I think I need a leverage Loan in the real world of people who are saying I'm not going to play in the market I'm not buying Nvidia BL blah blah they're saying I want the comfort of a coupon and maybe I'll make a total return I'm looking at the logarithmic Bloomberg total return chart the Leman index from you know I'm thrilled that you know Mike Bloomberg and Tom sakun has stepped up uh to give us this wonderful wonderful index I'm eyeballing it Folks at the minimum I need a 10% gain to get back to trend on that index after the Carnage of the last three years when do we get that good feeling back in your world uh I think banking on a rally in Long end rates is not something that's in our base case at the moment for for a host of reasons including the deficit so where do you choose duration then if you've got that weight yeah so I think I think towards the front end Belly of the curve is probably where you want to be the curve is still inverted right so you are picking up that extra income and carry by tilting more towards the front and belly as opposed to the long end the one point Tom that I think is really important for our listeners to think about as well is that the all-in yield uh component right now is screening very attractive historically even while spreads are tight when you say near the belly are give us well Lisa's got to apply some money she saves so money absolutely at Costco last weekend she's looking three year or five year yes U so I would say anywhere between three and seven is is where we would want to focus um but from from the perspective of all-in yields deploying capital now we see a pretty attractive opportunity to do so but you're right Tom the the past two years have not been um have not been favorable for long end duration if I want to take some credit risk are there certain sectors you guys like so I do think I do think as we're thinking about the potential for geopolitical risks to escalate sector sector and issuer selection will be really important so on the sector side are you a commodity purchaser or are you a commodity producer commodity producers are likely to fa better in this environment to the extent that we get commodity disruptions um right and we all we still like financials and then I would also say on the issuer side pay really close attention to supply chain resilience balance sheet resilience can you navigate a high asking for a friend on issuance yes we're in a quiet period I get that maybe you can't even answer this question are we going to get big Tech issue bonds they've got an absurdly low Bond component are they going to get religion in this cycle this dispersion that we're in now and issue Mega gajillions of fixed income debt so so a couple things one is we are in a quiet period but it's picking up a little bit with financials I think in general IG corporates are in a unique position specifically cash-rich sectors like Tech and Pharma where they can issue actually earn a pretty good interest income and that is above and beyond the cost of debt in many instances and so I think to the extent you expect m&a to pick up shareholder returns General Corporate purposes yes we do expect that's in the deck can the the deck can you bring a 60-page deck next time please I'm begging I'll give you the summary anytime you don't have to re no no I I like the 60 I don't need the executive summary I want the Lineum 60 page deck iand the Lineum of Black Rock just always fabulous Futures up 12 with our news in New York City John Tucker all right thanks Tom President Biden talking tougher about China as he highlights the challenges to its economy they've got a population that is more people in retirement than working they're not they're not importing any they're not bringing they're xenophobic no nobody coming else coming in they've got real problems I'm not looking for a fight with China I'm looking for competition but Fair competition the president's latest rhetoric coming two weeks after his latest phone call with Chinese president xiin ping the hush money trial against Donald Trump resumes in New York this morning jury selection continues in the first ever criminal case against a former president let's get more in this report from Bloomberg's June grao the trial judge has said set aside two weeks for jury selection but that much time may not be needed seven jurors were sworn in on Tuesday so that means five more jurors and six alternates still need to be selected the jurors who survived the grilling by lawyers are an information technology worker an English teacher an oncology nurse a sales professional a software engineer and in a bit of a surprise to lawyers in New York June grao Bloomberg Radio well Donald Trump's campaign wants other Republicans to pay up if they use the former president's name image or likenesses in their fundraising solicitation in a new campaign memo obtained by Bloomberg News all candidates and committees who use Trump in their fundraising appeals must give a minimum 5% of the money they rais to the Trump political organization Global News 24 hours a day and whenever you want it with Bloomberg News now I'm John Tucker and this is Bloomberg Tom Paul and Lisa John Tucker thanks so much fishes up 11 the vix comes in and sassau nailed it I know I mean you were off you know with some fancy place exactly wa how good was breakfast be honest oh was fantastic thank you it's good to know I'm glad to know that your breakfast was good my I had a bag of cheit but but the the fact of the matter is we're at a EV vixon 19 and we come in 18.01 with even a 17 level markets are healing they're healing what we saw that's okay I mean yeah I mean we've been talking about some of these pullbacks Tom and what do you want to see 2 3 4 5 7% pullback uh we just haven't necessarily seen it here so we've got uh Futures looking a little bit higher here today looked at the Copper chart higher to say the least we got to do some more on copper here as well Brent crude 8639 West Texas 8186 both down about 1% we are kneed deep in the beginning of earning season Taiwan semiconductor out today uh with some very sprightly statistics and we'll bring much more of that uh to you from New York City on YouTube BL B surve [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Matteo uh lift to the markets after stocks spell for fourth straight day yesterday right now we have Nasdaq futures Dow futures and S&P futures all up about 210 of a percent we have more economic data on top for today initial jobless claims for for last week and also March existing home sales over to the bond market we have the 2-year yield at 4.93% that's little change the 10year yield at 4.58% and that is little changed to earnings we go Alaska Air rebounding from its Boeing Max was those Shares are up about a percent they carry expect second quarter profit to top estimates Boeing they're down about half a percent discover financial services are up 2% posted a sharp drop in first quarter profit it worked to address compliance and also risk management deficiency and Netflix are up tenth of a percent it reports later this afternoon but Bloomberg intelligence saying subscriber growth May blow past estimates we shall see that is your Bloomberg business flash Tom and Paul oh thanks so much Lisa greatly greatly appreciate it Tom keen and Paul swey thank you for being with us on Apple carplay uh that's building globally 20 Nations has it download the Bloomberg business app and on YouTube I'm learning about this every day I mean you know they came to me and they said let's let's blow up distribution good morning on Bloomberg 1130 sure in New York and in Washington in Boston but uh this YouTube thing I'm just like sort of stunned and every day I get more stunned exactly more and more people Jay Hatfield's on YouTube I mean figure figure that out then you know you're we welcome Jay Hatfield here this is important this a really important it's like really clear notes this when you have a shingle out at Morgan Stanley CIBC Oppenheimer and all the rest you have a real experience of keeping a short tight a note tight tight I said say short and tight I'm looking at one bullet point which No One Believes Boston properties leading office re in the US with upside you're going into office type real estate now um thanks first of all Tom and and Paul for having me on yes so we I think we've talked about it before on the show but have a differentiated view of real estate and that is simply that REITs are not buildings so any particular building uh can be either great or terrible like we're sitting in an excellent building that's owned by vernado it's way in the money but there's a building just two blocks away that I go get my haircut that's horrible because it's a c building but Boston property is all A+ buildings and we are optimistic about the demand for leasing as we come out of this recession so how do you respond to Ken Griffin deciding to put something up to the moon at Park Avenue in 52nd 53rd I mean this is a I'm sorry you know okay Mike didn't write this question for me folks but I'm sorry it's a statement on New York City well we we don't believe in the work from home U strategy at all when I started it on Wall Street we did something called uh live from office so you know our Apartments were just sto glorified storage facilities so what you're seeing in New York is really Resurgence and these critical businesses like Financial Services everybody's back to work if you don't come back to work you're going to be fired from home so um but again I would stick to the um the uh A+ properties in Marquee Gateway cities like New York City Boston even San Francisco eventually I mean I'm looking at I mean I know you guys have a bunch of ETFs at your firm what's the smart trade you get you're doing these days you're the one of the smarter folks we talk to what's what are you doing here today well if you look actually at the two largest positions this would have been a better comment a Week Ago by the way but um our two largest positions in IAP which is our large cap dividend fund is uh Morgan Stanley and golden Sachs oh um so again they reported and they blew it out Y and really we're avoiding regionals simple reason is that investment banking is correlated with the market we're bullish on the market but uh Regional Banks or all Bank banks are pressured both by net interest margin um credit to some degree and also balance sheet pressure the investment Banks typically don't have those big balance sheets and Ted pck even me mentioned this they actually what most people don't appreciate is when you have strong underwriting it feeds the entire business so you get a lot more trading because when you do a deal it starts trading back and forth no yeah I didn't know that yeah and there's another scandalous thing is if you get allocated the deal then your salesman calls and says would you like to trade and your answer is yes yeah this does happen so I mean I just spent the past two days at a Bloomberg new energy Finance conference in Midtown uh this week what's your how do you think about energy in terms of investing in fossil fuels which we all need today but then this transition to maybe a Greener energy grid so what's your kind of your energy call here well I have the unique perspective of being and this is not much of a distinction the first ever Renewables investment banker so I was doing it 33 years ago so what you learn by being involved so long is that Renewables take longer than you think or would hope so you know we figured out or I figured out 33 years ago working with Ballard power that it's really tough to have these full Transitions and that's why we've thought for years that hybrids was the right transition and Renewables will grow but they'll grow slowly because people don't realize it it's very sight specific wind only works in certain places solar only works in certain places so it's not really the long-term solution the the what really needs to happen which unfortunately has gone slowly is you shut down all the coal and replace it with natural gas buried in your not I love this I mean it's like I'm dealing with Mario gabelli Outback Steakhouse what your long I've never even heard of this bloomen Brands they own out out steakhous is oh Lisa you were there this weekend the bloomen onion what's a steak costed outb Steakhouse 90 bucks tell me about your long your long beef yes well we do think small caps are attractive so this is held by sccap our small Cap Fund but uh blo and Brands is extremely cheap stock it trades at about 11 times earnings and McDonald's is 25 times earnings and you do have an activist that you know should be a catalyst for change their margins have been a little bit pressured as you you indicated because we have cost of beef is rising but a very cheap stock and actually a great almost every stock we own has a great dividend yield so it's almost a 4% dividend yield I mean it's a very all small caps are volatile and move around and are noisy I mean I was media free for two days cuz Paul was off with Al like steel and a junk it Disney there's an activist was involved with Disney I mean what do you do with the media group um we don't Focus as much on Disney we like that stock though we valued it we come up with about $120 Target so it's kind of acted that way it runs up to 120 when an activist is involved then pulls back but the parks I mean I have four children I've been like a thousand times to the parks um so it's a great phenomenal long-term franchise and um there's no doubt it's turning around and particularly this is I'm weakest at this you you nailed this it's a theme park company with everything else Mr Hatfield's saying the same thing sassar is saying the same Lisa I got to get on the script yeah you know I've never been well you need to get down there guess up the golf I've been to Anaheim with the little teacups going around and you cry for more as your cherub goes around in the little teacups and then you go see Mickey and Minnie in the little Hut and you cry some more that's like ancient history then you go see the Angels lose right exactly real quick uh Jay preferred stock we never talk about preferred stock here give us 30 seconds on preferred stock well it's actually in the same duration category as your prior guest was mentioning it's about a duration of only seven years very traed securities issued by public companies it's actually two-thirds of our assets so we're really preferred stock managers and we think there's a lot of upside you really get Equity upside because they're trading below par they typically trade back to par when the market stabilizes so we're bullish on preferred stocks this has been wonderful Jay hadfi and you didn't bring a 40 page deck Amanda that's great Jay hfold thank you so much with IAP infrastructure Capital Management really in some interesting stock we don't do enough stock ideas it's like a 10: a.m. thing yeah that's we we we kick into that it's 7:25 do you do stock ideas you do them with Jay Hatfield you don't do them with anybody else right those you know I I I really like blooming Brands yeah you got to go Tom you get the bloing onion I'm telling you the bloomen onion really in Boston properties okay we'll go with that Futures up 13 Dow futures up 84 the vix in under 18 this is a huge deal 17.95 I'm going to call it a grind a lift to the market into earnings uh season Branch crude 90 8651 down $3 $4 from a couple days ago stay with us on YouTube search Bloomberg podcast Paul swy and Tom King it's Bloomberg surveillance [Music] [Music] [Music] [Music] headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Mato well we've got green on the screen after yesterday's selloff and that comes after the fed's Loretta masterer said that the Central Bank should not be in a hurry to cut interest rates so we have Nasdaq futures and DOW futures down up about 2 2 t0 of a percent same for S&P futures right now over to the 2-year yield at 4.93% that's little chain the 10-year yield at 4.58% and that is little changed as well want to point out commodi spot gold higher at 2381 an ounce Brent crude $86 a barrel NX crew $82 a barrel we'll head over to Tech where AI demand boosting Taiwan semiconductor manufacturing's Outlook the chipmaker expects Revenue to grow as much as 30% this quarter and that's following its first profit rise in a year now shares o they're down about 2% sticking with chips we'll go to Micron up more than 1% sources say it's getting 6.1 billion in chip saxs grants next week and finally infosis reported net income for the fourth quarter that beat estimates it's ADR o down 2% that is your Bloom break business flash Tom and Paul uh thanks so much this is the conversation of the day folks for Global Wall Street on the Greek letters here's what it comes down to you go to your statistics class and you get the cental limit theorem done and then you sit there and their eyes start to glaze over when they get to the Cross moments including curtosis I've got some on my left foot and then you get to where the Dynamics of the Greek letters click in like Alpha Beta Gamma Delta Delta Delta Delta Amy will Silverman understands this stuff and joins us uh this morning with RBC Capital uh markets Amy I love this love this comment everybody is so long they've got more to hedge how are we protecting and insuring ourselves after the second leg of this mother of all bull markets yeah you know Tom good morning I think this is what it comes down to everyone's been asking me look what's different now why is your favorite word skew picking up why are folks looking at Hedges why is Vick spiking and I think it's really that simple folks are more long right they spent all this year chasing upside chasing that right tail uh getting their fomo and Momo on and here we are I think there's just simply more to hedge right now there's more to hedge right now but what's the right tail look like I know we've got left tail Paul left tail is that angst out there yep you know I mean it's like you know it's it's like the tension all of a sudden the left tail is starting to move how do you protect against that yeah so I'd say two things first you know the right tail is definitely not gone it's just waned so the exuberance is still there you look at a stock like Nvidia where that right tail was just so historic you you really like in the whole history of Nvidia had never seen anything like it that bid for call options that's peaked in March but it's still there there's still call demand outweighing put demand it's actually just this idea that the left Tail's waking up you know we've had geopolitical tensions before we've had Middle East tensions before we've had sticky CPI before why is it different now the fact that the left tail is waking up I think just speaks to a global worry that's picking up as well so Amy if I'm one of those folks that says boy this S&P it's rally 25% off those October lows I haven't seen earnings move you know to a similar level so I'm concerned about valuation and I want to hedge here is it expensive for me to hedge this market right now it it really isn't and you know I will tell you this is a conversation that for the whole first part of this year no one wanted to talk to me about and those conversations are picking up so you do have those folks who are saying you know valuations look a little full I'm a little concerned about earning season can we hedge I will tell you hedging still looks historically pretty cheap you know it's gone up this year but when you look back five years 10 years it's still at historically pretty low levels because again people haven't been focused on it they've been focused on that right tail but actually the cost of protection in your portfolio is really quite attractive still what do you tell people that are I guess maybe call you and say hey what is this Federal Reserve going to do I just have no sense here the data comes in pretty strong pretty the economy looks pretty strong maybe this fed is not going to cut at all this year what do you tell them and as you think about where we're going to go over the next maybe six to nine months you know it's amazing I had a associate on our team yesterday just price out you know a simple graph of where the market was looking at rate hikes slash Cuts one year forward and and that that line kind of makes it look like that no one has any clue what's going to happen in the future and so you know what I what I say to folks when we talk about you know could we end this year with with zero rate Cuts you know our own rate strategist says one rate cut I will just tell you like these unknown unknowns these tales in the markets are still not being priced to a level that I think they actually should be you know that that's really the bottom line these are tales that can happen Amy the collective memory of most of our listeners and viewers is that your world of derivatives is great until Suddenly It's not and there's always a surprise I'm going to say portfolio Assurance in 1987 and you know other stuff as well what's the shadow out there that's building up whether it's leverage or unleveraged what's the the derival where the notional that's getting out of control and sometime could impinge on all of us so Tom it's really interesting that you bring this up this was actually part of my road map in my 2020 for Outlook for volatility are you going to send me a 40 page deck like aanda black please I promise I won't but I'll give you the bottom line which is you know this rise of zero DT zero data xpre options has kind of changed how much of a GPS options can be you know it used to be we got a pretty good idea of what we thought was going to happen one to three months out all this trading has shrunken tenor so much that the options Market isn't as great a GPS anymore right you're going to get that signal for a leftand turn but it's going to be in 50 ft instead of a th000 F feet that's the bottom line Amy what's the the number one trade you hear your clients talking about these days where are they looking to put some positions on you know I would tell you they're upside trades but they're actually upside trades for worry so we continue to see a lot of investors focused on energy upside you know that's a geopolitical tail hedge yeah and then the same thing with gold which has been very popular that that's also not only a GE geopolitical tail hedge that's an inflation worry concern so they're expressing an upside but the reality is these are downside worry concerns that using these sectors for do do the big techs the ginormous free cash flow building tech companies did they did they message in the derivative space is there a skew to Apple you know or another Greek letter to Microsoft are they part of your study oh absolutely you know we can't ignore these the weights Tom are just so heavy it's like if tech goes the market goes it's as simple as that I'll say you picked Apple Apple's in a little bit of a unique position because of you know concerns around China different things there so that skew has been more on the downside but everything else even though exuberance has waned people are still much more focused on that right tail you know your nvidias of the world your metas people are still more called demand outweighed put demand and is that still true in AI because AI was certainly the trade here for 2023 Amy is it is it still kind of the trade here or are people pulling back do you think you know they're not pulling back but they're kind of like moving away from the ogs so if Nvidia was your OG everyone wants to know what the AI adjacent names are so you get situations like super micro you saw that call SK invert uh you know obviously you see that run in semis but it continues so folks keep saying to me you know show me the AI related names that aren't your nvidias but we think we can use options Express upside in what is your SPX Target how do you fold that into derivative analysis where are we 12 months out on SPX Tom I'm so lucky cuz I don't have to put out an S&P Target that's the job of my dear friend Lori calvasina um you know she has the hardest job in the world I just get to talk about the derivatives Market okay we'll we'll get Kela on we got get Amy thank you so much Amy was Silverman I'm Buster chops with the RBC Capital Market really some smart discussion there and folks you know read a primer on this if you're like what in God's name was she talking about you don't need to do a lot of math to learn what some of these phrases mean and what they signal and the arch issue here is you're in the market and you're worried and you want to protect yourself so you hedge and you have to pay a fee you call at the desk at RBC Capital markets and they and you protect yourself and that's sort of the Dynamics uh that the pros uh talk about when they listen and they do to Amy wooo Silverman futures of 12 we listen to our news from New York City here's John Tucker all right Tom Paul and Lisa President Biden on the campaign Trail speaking in Pittsburgh yesterday the president vowed to keep United States Steel American owned us steel has been an iconic American company for more than a century and it should remain a totally American [Music] company American own American operated by American Union Steel Workers the best in the world and it's that's going to happen I promise you Japan's nipon steel plans to acquire us steel for more than $14 billion well today the president will accept endorsements from at least 15 members of the Kennedy political family during a campaign stop in Philadelphia as he aims to marginalize the candidacy of Robert F Kennedy Jr the flat tax making the rounds in former president Donald Trump's Inner Circle economists he's talking to are urging him to get behind a single tax rate for all income brackets billionaire Steve forb says he's pushing a 177% rate with generous exemptions the Senate Democrats have tossed impeachment articles against Alejandro mayoras and Bloomberg's Dan schwarzman has more on that story this morning Democrats in the Senate voted to dismiss both articles of impeachment against Homeland Security secretary Alejandra mayorcas the vote was mostly along party lines except for Alaska Republican Lisa marowski voting president on a measure to toss the first impeachment article Republicans have accused mycus of refusing to enforce immigration laws the secretary is the first sitting Cabinet member in US history to be impeached Democrats say the measure was unconstitutional because it didn't meet the Constitutional bar of a high crime or misdemeanor Republicans accuse Democrats of failing to take the charges against mayorcas seriously and that the American people deserve to hear the evidence Dan schwarzman Bloomberg Radio and automakers may be pumping the brakes on EV production in the US but charging challenges are Vanishing at a rapid clip almost 600 public fast charging stations were switched on for us drivers in the first three months of the year that's a 7.6% increase over the end of last year this according to a new Bloomberg green analysis of federal data and Prince William returns to public duties today for the first time since his wife's cancer diagnosis bolstering the Royal Family's ranks as health problems continue to sideline the prin as well as King Charles II William is sent a visit a surplus food distribution center Global News 24 hours a day and whatever you wanted with Bloomberg News now I'm John Tucker and this is Bloomberg Tom John thanks so much there's something out here and and we're working on getting Mario gabelli and I don't know where that stands right now he's been a huge supporter of what we've done for years I'm looking at a 30-year chart oh boy of CBS Paramount and there's no other company that could could do this class A Class B stuff we it's a public company but it's really not first of all it's trading where it was in 1994 yep 1993 we've enjoyed 65 to1 yep who's going to put this thing out of its misery Paul it's an I mean people go after musk musk is a Boy Scout compared to the shareholder uh destruction I see here just just extraordinary you're absolutely right I was back on the stock back in the early '90s mil cares took over when they merged the radio business into the old CBS went from 10 to 40 and you retired exactly right and now so we got the Sher Redstone the Redstone family suer redstone's daughter uh the control shareholder of Paramount viacomcbs SL um and so the question is what do you do here I do not see a natural buyer out there I do not see a strategic buyer uh I thought maybe a financial buyer you know a private Equity Firm would come in here because there are stable cash flows there that could support debt but they've already got a lot of debt on this company here so it's really tough to see um a a strategic or a natural buyer here that's why you're getting um some of these folks that I would not consider really quality buyers taking a look at this company right here so it's a really tough time and again it goes back to suar Redstone uh I'm I'm sorry rer Murdoch six seven years ago when he sold his company to Disney that looks like the smart trade oh yeah time there's no question even among the people you know the people I hang out with we don't know what we're doing we're just we're just reading a Amanda lyman's 40 page deck but the answer is Mr Murdoch looks like an absolute genius sliding out there and taking care of his family at the same time interesting I I just can't say you you bring up on the Bloomberg terminal folks Paramount back 30 years and I'm telling you there's no other story of shareholder destruction we'll continue to follow that Futures lift up 15 now Futures up 104 theic 17 85 good morning [Music] [Music] news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Matteo Futures advancing we have S&P Dow and Nasdaq futures all up about 310 of a percent right now the 2-year yield at 4.94% that's little change the 10-year yield at 4.58% per per and that is little change to Commodities we have spot gold higher at 2,382 an ounce and over to oil we have Brent crude $86 a barrel uh NX crude $82 a barrel some layoff news Eevee maker rivan down nearly a half a percent right now it's going to cut another 1% of its Workforce it's the second round of layoffs this year for the company and that comes right after Tesla said it's going to reduce its Global headcount by more than 10% and speaking of those Tesla layoffs Tesla Chief Eli musk apologizing for quote incorrectly low Tesla Severance packages that were sent to those former employees they said they're being fixed and then Tesla also getting a downgrade from Deutsche Bank to hold that's on the likelihood that the company will delay plans to produce its model 2 Mass Market vehicle Tesla shares down 2% that is your Bloomberg business flash Tom and Paul as I'm sure all of you know I me Lisa Matteo's got this tattoo to her brain we get a lot of help like you know I'm just based basically sitting here having Tang zero trying to move through the morning and in Europe my help is a guy named Tim CRA head who was legendary out in the street did you hire Tim CED I I think we did back in the day we got him from Goldman Sachs it was a huge hire I remember looking at the press release going are you kidding me so to get to the point when I talk about oh European stocks I don't know anything about them thank you Tim Craig Ed he's starts with lvmh came out a little weak China booming Japan and he goes through asml they came out yesterday a little shaky but fine some nanometer stuff I don't understand a small company called Nestle HSBC Nova nordis they're doing the I got a lose weight stuff yep Porsche I can't afford one shell in some German firm I can't pronounce but I mean this is the European earning story which we don't pay enough attention to we don't do fortunately we have the blueberg intelligence folks in London all over this for the blueberg clients and Tim CED Tim kraad leaving leading that whole effort up over there in London I mean we'll have to see I mean they just had Nestle up and you know I mean I know he's coming over in a couple weeks Tom to New York so we'll get you think he's ever had a poptart I bet he's never had a he's so British he's probably never hadit a Pop-Tart Nestle balance between pricing and volumes sustainability a profit margin and then they're going to look at the foreign exchange impacts and folks good point from Tim kraad for your earnings and you're going to have to adjust for the recent strong dollar that's going to be throughout all of our earnings as we go into earning season now a look at the front pages what's making news around the world your daily Roundup of today's headlines from major Publications your daily look at the front pages around the world brought to you by interactive brokers discover the future of trading with their next Generation trading platforms ibkr desktop I said ibkr desktop download ibkr desktop at ibkr.com desktop Lisa I've been so buried reading Amanda Lan's 40-page deck I didn't even look at the news papers what do you have all right we're starting with Buyers being back in control in the housing market but only for luxury homes okay this is from realtor.com in March a share of homes that were priced over 5 million they had their price reduced that was 7.8% which is up a percent from March of 23 up 3% from March of 2022 the area with the largest share of price reduction was Austin Texas and that's really a big change CU that's where a lot of people went to when remote work kicked in um other markets seeing those big price cuts for the luxury Market Tampa Florida also Phoenix um and the Wall Street Journal they spoke with this family who had this Phoenix home it was priced for 11 million okay it had five bedrooms upscale Arcadian neighborhood pool game room bar yes fully stocked now cutting the price to 8.7 million so these luxury homes they're starting to come down in price yeah this I don't know what to make of it and Jay Hatfield I thought was great about this folks the thing I'm most unsure about is work from home yeah I don't I I don't have my bearings on it Jay Hatfield's telling me you're going to be fired from home I don't know Nick loom out of Stanford saying move to Phoenix yeah I know and I I I least it's it's the single thing right now folks I feel the most unsure about yeah no it's true it's true all right good stuff so we got the luxury home Market's pulling back a little bit fine how about the upper west side theer side I don't know if it pull back too much I don't think so we'll stick with Phoenix next all right uh electric vehicles we talk about it all the time right range anxiety this is the biggest thing for people who are kind of on the fence about buying EVS well Google has announced its Maps app is going to have something in it that's going to help those people find Chargers whether it's parking lots garages real- time information how many ports are there how many how much the charging speed is there um it's going to help you find on the longer trips they actually did it with with Ways last month um but it's really supposed to give that boost because a lot of people still I think that's going to be big I'm not a Eevee person yet I mean maybe at some point I'll get there but the folks I do talk to yeah that is an issue kind of like when where are the charging stations I get there and they say there's going to be eight or 12 pods four of which are out of corre service you and then so the lines are ridiculous in which case your entire plans are kind of screwed and then it's not like pulling up to the you know Exon station and seriously folks we've got a guy surveillance EV Guru Edward llo y who's living this right now we're trying to get him on the show tomorrow as people have been very difficult but we're trying to get them on the show tomorrow to get Ed load you know it's 752 come on 65 it's 4:52 a.m. he's in his beauty rest but he's got to drive a Tesla out there I mean the price of gas in San Francisco that's a great Point ridiculous taxes okay I well have to see I I I'm not all I see is Teslas I don't see anything else no I see a rivan I see the trucks around like I like electric buses really work I really get like and the Amazon delivery things the electric delivery things are all over the place okay growing they're growing all right what's also growing Starbucks um unionized workers okay so Bloomberg law did this analysis they took National Labor Relations Board election election data and they found out that unions have organized more than 10,000 workers at Starbucks locations nationwide March was a big month they saw 21 Union wins um that resulted in 376 newly Union represented Barista shift uh uh supervisors so you see kind of this growth that store by St percolating yeah percolating very good I like that cof most of the audience doesn't know what percolating means I have a percolator I me my my grandmother had the coffee pot in an incredibly single simple kitchen with the parliament cigarette out of her mouth with Kurt gouty in Boston Red Sox baseball and i' be mesmerized by the one thing moving in the kitchen The Percolator there we go per percolator but yes so Union's growing and then finally I know this is it Tom we have to switch up the music selection tomorrow because Taylor Swift's latest album drops on Friday I saw that it's not released it drops it drops it drops that's how the kids I hope she's with Jack antinoff again in the Nationals I love what they've been doing the national I should say I love what they do what I find with Taylor and you know I have a huge respect for her but what I know is on that album there'll be one song that I will find jaw-dropping it's never just one just one I I find one song always on the album that I just just find jaw-dropping well the one thing that people say they like about or what the New York Times is saying is that it's going to be on vinyl CD even C don't get me going on do you know I just acquired vinyl records for one of The Offspring oh it it's coming back I'm and I said are you kidding me we got rid of Vin and she's like that's all people want they want Vin sound they want that do you have vinyl at home no my dad has a huge I mean thousand when I say thousands of Records I me oh you got to get a table crates and crates yeah start with the Doors LA Woman everything every well do you do this vinyl thing no but my daughter just recently for a gift gave me some uh some old Bruce albums on vinyl so and I had them back in the day but do you have no idea where they no on YouTube on live chat I need you guys on live chat on YouTube right now to to live chat in and tell me about vinyl somehow I think this is in my future what's the attraction the off the offspring's going to have a vinyl record and I'm not going to have a record player to play it on I'm just going to have a you know it's a a coaster Lisa Mato with the newspapers thank you Paul I mean we got rid of CDs finally we have no CD players in the house we stream we're on YouTube you know it's like apple carplay It's All Digital and all new y absolutely it's coming what what's old is new Tom yeah who should we play he stole the movie of We Are the World there's Michael Jackson and all the others and huy Lewis is there just saying OMG I'm here what a set of hits here we Louis today good morning Lawrence [Music] School for work I'm taking what they giving cuz I'm working for [Music] [Music] [Music] [Music] this is Bloomberg surveillance with Tom Keane and Paul Sween we're addicted to The Parlor game the fed the monetary B where do you see opportunities in have fixed income space here in 24 with Lisa Mato on markets AI affecting demand for cloud computing and Michael bar with news another legal setback for Donald Trump this time across the pond the best in economics finan investment and international relations this is Bloomberg surveillance on Bloomberg Radio good morning everyone it's through the week we stagger out of the real geopolitical mess of Monday and Tuesday with this I love what Damen said a healing tape it's a healing tape here right now yeah Future's up 14 Vicks 19 level we almost got to 20 we're into a better place 17.8 7 we're really trying to frame out the bond space I'm and Al lineing with us with a 40 page uh Power point we said to Kathy Jones I said like lizanne Saunders and Kathy Jones they don't do 40 page power points no they show up with a 3x5 postcard say here's what we believe Kathy Jones with us here in a moment here on what yield is going to do what it's going to mean for the 30-year mortgage what it's going to mean for uh getting through 2025 uh four into uh 25 as well two-year yield 4.94 uh% uh Paul I I look at this and I guess I got to look at oil coming back from a 9091 even 92 to print 8668 it's somewhat quiet out there yeah I mean we had some geopolitical risks for certain priced into uh crude oil around the world maybe a little bit of a pullback here but still well above kind of kind of the trend line for the last I don't know six 12 months yeah on Apple carplay on YouTube search Bloomberg podcast live chat I'm going to get on it right now when we go to Lisa here but on the live chat on YouTube that's valuable as well and Bloomberg surveillance were brought to you by con Resnik advisory Assurance Tech con resic can help your business quantify its Financial exposure using risk-based strategies and analytics visit conres nick.com with our Bloomberg business flash Lisa mat good morning yeah Futures are advancing and this is after Wall Street extended what is now the S&P 500's longest streak of losses since the beginning of the year now declines come as feds Loretta Meer said policy makers can hold rates steady yesterday the feds B AG book survey well among the other things it showed America's economy had slight gains since February and consumers remain very sensitive to inflation so we'll get to Nasdaq futures they're up 310 of percent Dow in S&P futures up about 2/10 of a percent the 2-year yield at 4.94% that's little changed the 10-year yield at 4.59% and that is little changed to earnings we go Taiwan semiconductor manufacturing Outlook beat estimates its AI demand really fueling its business adrs o down about 1 % but tsmc the main chip maker for NVIDIA Apple we have Nvidia Upp a percent Apple shares are little change right now we'll stick with chips we'll go to Micron right now they're up more than 1% sources saying it's going to get $6.1 billion dollar in US US government grants starting next week and finally the housing market which heads into the spring selling season we have DR Horton they increase sales expectations for the full fiscal year Builders they're benefiting from that shortage of previously owned homes those shares are up about 3% that is your Bloomberg business flash Tom and Paul Lisa thanks so much right to it Kathy Jones joins us of course with fixed income Chief fixed income strategist is Schwab what are people doing not what they're saying not what they're talking about Sweeny told me they're loading the boat on three Monon paper Cash Money Market funds what are we actually doing with our money well what we're seeing among our clients is some movement out the curve there's still a lot of money in three four month T bills yeah even a little beyond that Tom um we are seeing people start to extend duration because when you can get four and a half to five five and a half depending on what asset class you're in say you're in investment grade corporate bonds at 5 and a half% people are like okay five to seven years duration is okay with us for that but it's only when those yields are at that elevated level otherwise yeah there's still a lot of money sitting in short-term paper how about on the credit risk side I mean I'm willing to take a little credit risk here where do I go I mean do I go investment grade do I even push out to high yield cuz high yield is where the return's been the past couple of years it has been um we're still a little bit cautious on high yield because the the spread is so narrow everybody's talking about the spread is so narrow is it so is it historically yes it is low put in perspective for us because I mean historically I mean I've heard that from a lot of folks saying that it's just not worth it these days yeah the problem is that when when high yield spreads move they move really fast and they spike in a big way 100 150 basis points really quickly and that can eat into your return now if you're a Buy and Hold investor and you're careful about the high yield bonds that you're buying you're not buying Triple C's or you know cuspy on on the edge of default bonds then you know if you hold the coupon the all-in coupon really high uh but we do have maturity coming up in 25 um we do have you know elevated yields where these companies have to roll over so we prefer investment grade because even though the spread is low there um the quality has been improving and uh you know the all-in yield is pretty attractive so credit risk how would you characterize credit risk these days do you feel like you're taking on above average credit risk in the marketplace or is the credit quality of corporate America pretty decent I think it's pretty decent decent you know corporate profits hit an alltime record high in uh late last year so will that continue I don't know probably not quite at the pace that it has but still not really looking at a a deterioration in higher cred quality bonds what is CFO 6 like what are you seeing an issuance we didn't get to this with Amanda earlier I mean I we've all been wrong about a more buoyant economy we've all been wrong about transitory non-transitory inflation I'm done with Landings all I want to do is landing newely and to get to theate under an hour but what how do you shift here if you're a CFO do you do more issuance even if the coupon is higher than it was two years ago yeah you do more issuance and you have calls uh you have callable bonds so um you issue maybe at five five and a qu% coupon a little more coupon right now to give that call option out right but then you have some sort of call option on it to to call it in and replace it if yields come down so I think if you need the financing now you do it but you do it with a call Paul the 97-year Austrian piece I bought right at the top it's got a 96e call option feel great about that I'm sure you're going to benefit from that Kathy when you look at your average Charles Schwab customer are they 6040 Equity fixed income what's their portfolio look like these days oh it's really hard to generalize you know we try uh our guidance is always to have a diversified portfolio and then to structure it around your own particular needs so I you know it's I can't really generalize about the average client because we don't really have an average client but we do try to um guide towards having that balance between fixed income and equities and you know that was hard when yields were really low right uh but now that yields are more attractive we're seeing you know it's much easier for people to make that uh make that switch are there sectors into corporate credit side that you like um within maybe investment grade or something so a little bit um more cous maybe on consumer discretionary uh if we do get a Slowdown in the economy uh but broadly speaking again within fixed income we try to be as Diversified as possible so not just you know isolated to one industry or one or two industries we like to have issuers from across the economy what are people doing right now are they barbell are they lading what what's retail doing to to to Goose up the coupon they're doing both so you can uh the the barbell is pretty easy to do these days because we do have that inverted yield curve yeah and so if you barbell you're not giving up as much yield because it flattens out a little bit as you go out um but we also ladders are kind of a staple for a lot of people because it takes them out of the timing issue they just keep lading and and not worry critical question are you lading for to toal return or you're lading to clip the coupon most people ladder for clipping the coupon um that's generally the idea but opportunistically we'll see people lad for uh for Total return as well I look I look I look at this Paul and and my head would be spinning if I was like income driven I know I mean there's a lot of places to go VC how about municipal bonds here I'm I live in New Jersey one of the higher tax states I mean I I love municipal bonds what is the typical Schwab uh you know Municipal Bond exposure yeah so you know in in higher tax states like New York New Jersey California we we see a lot of people interested in municipal bonds because it's one of the the sources tax exempt inome Kathy Jones thank you so much with Charles sh greatly appreciate it uh uh this morning uh Future's up 11 D Future's up 85 uh the vix 17.95 really really interesting mix uh this morning can I just mention gold up $13 back to $2,400 good morning Denis gartman with a weaker Yen great call gartman looks like it's like the trade of the decade it is I mean it's like what Gary Schilling was doing on deflation years ago with vulker exactly so you got gold up even the copper Copper's up another one and a half% here today to $442 so the the precious metals and the base Metals moving higher Tom we're going to have to see uh the dollar pretty much stable here like a 106 as it is with our news in New York City here's John Tucker all right Tom late word Ukraine says it attacked a large Airbase in Russian occupied Crimea this highlights its ability to strike the kremlin's military installations far beyond the front lines despite growing ammunition shortages the strike took place early today President Biden talking tougher about China as he highlights the challenges to its economy they've got a population that is more people in retirement in working they're not they're not importing any they're not bringing they they're xenophobic no nobody coming else coming in they've got real problems I'm not looking for a fight with China I'm looking for competition but Fair competition the president's latest rhetoric comes two weeks after his last phone call with Chinese president xiin ping the hush money trial against Donald Trump resumes in New York this morning jury selection continues in the first ever criminal case against the former president we get more from Bloomberg's June grao the trial judge has set aside two weeks for jury selection but that much time may not be needed seven jurors were sworn in on Tuesday so that means five more jurors and six alternates still need to be selected the jurors who survived the grilling by lawyers are an information technology worker an English teacher an oncology nurse a sales professional a software engineer and in a bit of a surprise two lawyers in New York June grao Bloomberg Radio and Donald Trump's campaign wants other Republicans to pay up if they use the former president's name image or likeness in their fundraising in a new campaign memo obtained by Bloomberg News all candidates and committees who use Trump in their fundraising appeals must give a minimum 5% of the money they raise to the Trump political operation Global News 24 hours a day and whatever you wanted with Bloomberg News now I'm John Tucker and this is Bloomberg Tom and Paul I up on economics Finance investment the biggest outrage today the biggest response we had is on vinyl records Richard's got the White Album fluent from Miami Beach boac and he's looking at the serial number on the White Album from a million years ago with all the fancy Meen emails in she says she loves vinyl she only listens to vinyl I mean I'm missing something here I mean that's kind of how that's how we grew up listening to to vinyl on uh my parents record player in the den it was probably Circa I don't know 19 19 yeah 1910 exactly then we graduated to the a track and then cassettes and CDs and I'm looking at the Music Hall usb1 it looks like the it looks like the turntable we had on the floor next to the dog in the dining room and it's like I I I guess you got to connect it to powered speakers I mean it's a whole new world after all it is we're all going back I you and I are just we're not you not we're not up to speed on this I mean no I mean we've graduated we W the eight track uh are you saying it the hoping it'll come back make come back there that was do you still have the eight track in the Hummer uh it's in my car yes absolutely it is how about Fidelity there was some cassettes were like oh my word it's a whole new world only Tucker would still have the eight track Futures up 10 Dow fut is up 79 to Vic 17.94% you're 4.94 uh% really diving into earning season and anticipating the mystery of what we see in earnings this is Bloomberg surveillance [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Matteo Futures are advancing and this is after stocks fell for a fourth straight day we have Nasdaq futures and DOW futures up a 2/10th of a per S&P futures up a 10th of a perent the 2-year yield at 4.94% that's little changed the 10-year yield at 4.59% and that is little changed over to commod spot gold higher at 2384 an ounce Brent crude $86 a barrel NX crude $82 a barrel a few companies making news we'll start with alphabets Google they're up 310 of a percent it actually let go of 28 employees that were involved in protest get a joint contract with Amazon to provide Ai and cloud services to Israel and then you have BP their ADR is down nearly 1% right now they're restructuring its top management now the company says the executive leadership team will be cut to 10 members to simplify its organizational structure and I thought this was interesting this is from the athletic reporting Kaitlyn Clark nearing an eight fig endorsement deal from Nike expected to receive a signature shoe she also received offers from Under Armour and Adidas on top of that you go girl that is your Bloomberg business flash Tom and Paul did you think of the movie like her mother's going to be on the phone with Nike going Kaitlyn needs a percent of the gross I mean come on she's going to watch the Michael Jordan movie like three times and Matt Damon's going to be on the other end of the line Mrs Clark your daughter please you know we can't give her an in they're all going to go mental it's going to end happy yes that's how it ends she was great on Saturday night life oh she was excellent she was hilarious and the guy what's his name m Michael okay the announc at the news desk at the news desk she's just so classy is just really really got it uh nailed um what we're doing today is we're dealing with Twisted research notes we had Amanda lamman 40 page PowerPoint what's that about yeah Kathy Jones comes in from Schwab with a 3x5 card and now we got Alex Morris with a breath of fresh air he's saying nobody can predict what's going to happen with our geopolitics get over it thank you Alex for uh giving us to us with FM Investments here to look at the equity uh Market as well I like what you say about stocks stocks apparently don't care and into the earning season I think you're right they're just in their own world right now are stocks discreet from everything else well they they try to be um I think the problem is folks assume that the stock market has this like crystal ball where it can predict war and elections and all these other things and historically it's pretty bad at it it turns out it's it does exactly what it's supposed to do which is look at earnings in free cash flow growth and be greedy and this is so quain I can't stand it can can we continue with this we need someone we remember remember the the TV Ed We Believe yes was that Smith Barney or was that e Fon I'm not sure we we believe if if we don't believe what what do we what do we hang our head on forward yeah well I think the good news is we're going to see a pretty good earning season right we see a consumer that's still pretty strong so all of the underlying fundamentals of the the real economy you know although we see some infl and and you have to talk about inflation at some point all the other bits and bots of how to run the economy pretty strong which is you know we've been working on that for two decades ever since 2008 we thought all right we need to hit the reset button and reconstruct something fundamentally more sound and encourage businesses to do the same and low rates for a long long time allowed them to do that and we seem almost shocked that they're actually have learned something exactly so all right Alex so what's been I guess the story of this Equity Market at least from 23 onward has been kind of these big cap Tech names that have been really been driving the stock do I still kind of stay with that trade do I try to find some value do I go small cap do I look elsewhere or do I just say ah heck I just got to own the big Tech names well I think you have to say oh heck I have to own some of them right it used to be I had to own only them right because didn't you didn't get paid to do anything else but what was the mag7 3 months ago was the Fab 4 four or five weeks ago and now it's maybe one or too so that that trade is still interesting and such a big part of the the S&P 500 you can't ignore it but you should broaden out I think there's a lot of great trades we made elsewhere I'm not ready to go full equal weight there's just so much juice in that Tech Bas you need to have it okay I thank you for that because we don't hear that too often believe it or not what's the terminal value you frame for these high multiple luxury stocks tech stocks and the rest do you have to study out like is a new three years five years to justify owning Microsoft well I suspect it's probably even longer than that which is kind of kind of hard to Fathom because if you look it's not good for financial media but continue exactly and uh which unfortunately I don't think the market they care less about that I think the the problem is if you went back 30 years Apple was bankrupt right and now it is what it is so it's hard to really think that far out but we look at so many of these discounted Cashflow models that are trying to figure out is it 3 years 5 years four and a half and I've never seen a discounted cash flow model that's right so show me one that's right and then I'll agree with the number that's in it it just hasn't happen like I've never seen a bad back test either for a strategy the strongest terms I agree and my biggest Focus there is the idea that you get out to some so-called terminal value which is not much different than Mickey Mouse at uh uh Disney World exactly or the goofy breakfast at Disney World I I question why we look at a terminal value of names that we care very much about momentum on like the answer is these things are responding to short-term you know two six-month Trends in the market let them run I don't really need to predict what Microsoft's going to do 5 years from now I can't I mean I think some folks are hoping they can they're wrong they can't but we can watch what's happening short term and ride those Trends because that's what those tech companies are great at doing so what are we doing here at earning season I mean we're kind of getting into the meat of earning season we had the big Banks last week what are you looking for what do you expect to see what do you think the market needs to see so I think we're going to see pretty pretty much on the mark to slightly above earnings cross the board across sectors right it's a big gross General overation overgeneralization but I think that's where we're headed I think the banks really responded well to you know the change in rate structure net interest margin was up and strong I think the good news is though we finally have settled in on pretty good predictions and that's the key like if you look at the big tech stocks and the next rung below them they really React to what is the expectation and can I meet that can I I think this is brilliant and and Alex can I suggest that we've been addicted particularly within the tragedy of a pandemic to Fed fed fed focus on a simplistic basis we've been completely focused on the financial side of things and we're getting back to the real economy and like actually studying what the real the GDP equation's doing exactly and we we do as much fed watching as anyone I live in DC when I leave DCA Airport plane takes that nice hard left and I can look out and and and see it and there it is and my answer to folks is that's as much fed watching is really you can add into what you're going to do tomorrow in the markets is make sure they're still there but practically speaking we do have to care about what companies are doing what people are buying you know and and my big worry isn't inflation hitting 2% or 2.2 and them calling it done it's what happens if it ticks back up I'm looking at commodity prices and starting to get a little nervous there and think that's where they need to come in well he's got a fan club do can you believe this Alex Morris I mean Katie how do you pronounce this G Griff grield grield Katie grield I am a huge fan of Alex Morris wow wow it's no better than that that's High Praise I'll take geld it's great I don't know she's probably on Gus on the field somewhere Katie grield come on we need to talk to Katie about bit dog yeah are you a bit dog believer I'm not thank you continue why aren't you a bit dog uh believer yeah anytime I see bit sort of I hear do and I wonder like AI it's just we're just adding these words because we don't really have business models but they're going to have it I don't I still don't know do you understand having uh I understand it's a thing and I get that things double but I also I I just wonder like why are why are someone's electrons better than my electrons what's your visibility on like a dow Target or an SPX Target like are you just saying you're not going to predict it you're just going to watch earnings and it's a linear function Out 3 years it's a I think that's probably right and like where do we put money if we don't know it's you seem to go between spy and something like three-month right money markets where things are going we run a fund that rolls the three-month called t- Bill we see a lot of inflows recently into that because folks who don't know where they want to go have learned two things one stay short stay liquid okay all I can ask is every three times you're on with grield at least come on with us absolutely I mean grield owns you I mean Alex Morris thank you so much with the FM Investments a real breath of fresh there fresh air there folks about this whole certitude I just looked it up it was John Housman Smith Barney yes they earn it yep that's right can't do make money the oldfashioned way they it right there for those of you younger you have no idea how certitude was sold in the 60s 60s and the 70s some of those old classic ads our classic ad is to give you data check Futures up seven the vix 18 even the 2-year yield we're all watching that 4.95% % on YouTube search Bloomberg podcast [Music] [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Matteo we are just moments away from additional initial jobless claims for last week so ahead of it let's check in with the markets right now we have Nasdaq futures Dow futures s S&P futures they're all up about a tenth of a percent we have the 2-year yield at 4.95% and that's up about one basis point and the 10-year yield at 4.59% and that is little change right now okay initial jobs claims the survey was for 215,000 Tommy came in at 212,000 so it's a little bit of a tick lower yeah thank you Lisa I'm sorry I'm looking I'm looking for the revisions we don't have the rision not yet yet but the answer is the four-week moving averages what I look at these are weekly data high frequency someone like Drew Madison that life thinks this is a big deal there's the revision spot on it was 211 is 212 inconsequential these are you know stable sequential data that get you to a 3.8 3.9% unemployment rate I mean you know the Gloom of 4.1 4.5 whatever I mean this is a what a fully employed labor market looks like Tom I mean that we understand that the labor market has softened certainly from the post pandemic kind of surge here but still when you see numbers like this when you see 3.8 3.9 unemployment rate this is a pretty solid labor market what matters with the uh economics at the moment the mortgage rate at where it is with these new higher yields 7.4 7.3 at% existing home sales Alex steel and Paul Sweeney will have that at 10 uh a.m. our economic indicators each and every day they're brought to you by Commonwealth supporting more than 2,000 indep dependent financial advisors with the solutions they need to grow a thriving business Commonwealth go where you grow visit commonwealth.com to learn more I've been pacing back and forth for like four days saying can we get on the date calendar of anog R tough he is the absolute best uh at the cloud and anog I I mean just to start on one te Leaf which is what is a state are a co-pilot in that computer types are saying this is the second coming of the Lord is it really I mean for for computer types how do they use co-pilot oh that's that's so kind of you Tom you see when you look at gen you know from our side this is the single most important uh application I mean you can write emails you can create pictures or sounds and anything but the real productivity benefit is massive shortage of software developers and you can use co-pilot to write the code for you I I think it is a true game changer for anything software development um I mean you don't talk about it in consumer applications but this is the big Enterprise use case for us so to me the key question here is amateurs like me and Paul and Lisa and John Tucker and Mike well Michael bar is a pro on AI but of course but you know Anar Rog do guys like you even care about all the touchy feely AI stuff or is it so large with computer people that's what matters see from a from an Enterprise point of view that's the number one place where you see the big productivity benefits now I do have time to write emails so I really don't need co-pilots to write an email back for me uh but you know if you think about the number of projects that are pending in front of a software developer it's far more than the number of people we have so when you can figure out a way to get productivity up by 30 50% um that is true game changer for enhancing the the R&D budgets of a particular company which means they can add more features develop their uh Computer Applications modernize the Computer Applications without having to hiring a lot more people which they wen't able to do anyway hok is this actually happening do we have evidence from I don't know the microsofts of the world that they're able to put out ex amount of code with why less input from engineers and stuff like that that there is actually efficiency there are we seeing it so Paul it's only been you know I would say about few months at this point where this thing is really active you know in in reality so one of the things we predict over the next three years you will see Revenue growth accelerate but you're not going to see R&D budgets go at that same pace so that's the margin enhancement for you but that does not mean that you're going to be firing uh you know software developers because there is millions of shortage right now for people to get work done I think the real benefit is going to be in modernizing the old applications which were written in a language that people don't use anymore so this particular software can convert that into the newer language which can do more you know unique things or digitize your business a lot faster all right honor I know you and M deep Singh and your technology research team of Bloomberg intelligence have done a ton of work on AI if you written a definitive report out there which people can get on the terminal how are investors you talk to how are they playing AI these days are they sticking with the chip makers Nvidia and so on are they going to the software players like Microsoft are they trying to find some applications where are investors looking for AI exposure these days so when you look at the first phase of that it's all the hardware and the AI infrastructure which means chips AI servers um trying to figure out how to run these applications so that's all in the semiconductor world as well as a little bit on the server side I think it will be a couple of years before we really see this trickle down in the software side and and then in the services side but Microsoft as you said is is a good example because open ai's back end is run on Microsoft so when open AI does well or chat GPU use more Char gbd Microsoft makes more money from there anog you and I were sipping an eggnog the holiday season 20122 and I remember you saying Tom load the boat on Amazon and of course I didn't listen Amazon had gone 181 down to 80 losing $100 per share I got a round trip moonshot return on Amazon how did they do that see one of the most important things you have to understand is that Tech spending is north of $2 trillion and only a small P portion of that runs on the cloud there is no logical reason for any company to own their own Data Center and run those applications you need to figure out a way to be much cheaper and far more you could say agile in terms of developing your applications so the story that you and I talked about at a few years ago that's going to remain the same even if we talk about it two years from now because companies like Amazon Microsoft and Google are the net beneficiaries of people moving more applications to the cloud you know Paul and I have been talking about this how are we going to generate all the kilowatts for this do you are you just optimistic utilities will be able to step up and do AI I I had the same feeling you know almost more than 10 years ago when oil was really going crazy and nobody figured out a way to do something what he just said there hold on intera what he just said there Paul's Tom you dummy 10 years ago I was ahead of you okay continue no no no no I mean I what I'm saying is you know the the the capitalist system figured Shale out and we have oil that is all over the world I am fairly certain that you know we will figure out perhaps in in some shape or form renewable energy that can take care off a lot of these workloads I mean I I you know it's not going to be overnight but I I feel you know confident in the capitalist system that we will figure out a way to you know Source these data centers all right let's go to a name that is really confounding people now for the for you know the last 6 to 12 months which is Apple stocks down 133% year to date is this still concern about China phone demand out of China that kind of thing what's the story here with yeah this the story is going to remain like this you know somewhat weak at least for the next couple of years till we get a little Clarity on China there is I I don't see anything that can change that mindset now having said that you know I do believe the Apple ecosystem is extremely uh important and resilient it's going to be a few years but but I I'm I'm fairly confident Apple will bounce back I look in we're going to have to run here anog but you've been doing a lot of different conferences with M deep and others driving forward our technology Vision what's the one theme in your conferences that you've taken note of that we are just in the early very early Innings of jna we are only in the area where we are scratching things and you know we firmly believe that that's going to lead to the next big wave of Technology spending now we think things are really weak right now but having said that you know perhaps by the end of this year or into next year you know we feel confident that there's going to be a bounce back and Rana thank you so much much uh too much time lengthy lengthy conversation with Anna Rana the best I know in the cloud Bloomberg intelligence as well Futures up 11 Dow futures up 84 why didn't he tell me to buy Amazon I don't know over that egg it's just you know talk about round trip wow with our news in New York City here's John Tucker all right Tom more than a dozen members of the Kennedy family will endorse President Biden today it's at a campaign event in Philadelphia that says the president tries to blunt Robert F Kennedy Jr's independent Challenge and Brown University political scientist Wendy Schiller says today's endorsements may be a sign the Biden campaign is worried we've seen a couple of incumbents George Herbert Walker Bush for example who lost his presidency essentially we think because of Ross perau so I think they're nervous and they want to remind people that Kennedy is more like Trump than he is Biden and doesn't necessarily commit to democratic principles so that's the point of this show of support from the Kennedy Clan but as I said I don't think it's nearly as resident today as it might have been even 20 years ago Wendy Schiller Brown University was against on Bloomberg Daybreak Donald Trump facing more pressure from economists in his Circle to embrace a flat tax rate while Trump hasn't indorsed a flat tax he has called for more middle class tax cuts that's good details now from Bloomberg's Amy Morris in Washington Steve Forbes former White House economic adviser Larry cudow and economists Steven Moore and author laugher are not official advisers to the Trump campaign but they are pushing for their preferred economic policies ahead of a potential second term Forbes is pushing for a flat 177% tax rate for all income brackets with exemptions cudow supports renewal of Trump's 2017 tax cuts but laugher says he would support lowering the corporate rate even more now Donald Trump has told allies he wants to keep that 21% corporate rate in place and instead extend individual cuts to avoid alienating work class voters in Washington Amy Morris Bloomberg Radio and Republican Le efforts to OU Homeland Security secretary Alejandra mayorcas met with an anti-climatic but predictable fate yesterday as the Senate swiftly sidelined charges against him the Senate after a few hours of Del uh deliberation voted mostly on party lines to toss the two impeachment articles and Walter null who ran the largest fund to invest with Bernie maid off and made more than a billion dollars in resulting client fees for his firm has died he was 93 null founded what would become Fairfield Granite group in 1983 to help foreign investors put money into US hedge funds Global News 24 hours a day and whatever you want it with Bloomberg News now I'm John Tucker this is Bloomberg Paul Tom Lisa I want to bring this up it was a week ago I don't know Paul you were away somewhere I was away somewhere I really can't remember but Bloomberg has the absolute best college study in America ever Paulina cachero Franchesca megone Cedric s and Denise Lou it is the single best thing I've ever seen hugely graphic I'll put it out on the different social and there's Duke University with a big Roi payoff uhoh it's a scattered out chart and Duke looks really really valuable and there's other you know Acclaim names that look really really valuable yeah and then there's that are not yeah exactly some of the iys there was this is a great article you call out Tom I mean they said you know a lot of the ivys ROI maybe not so great a lot of value can be found in some of the state schools across the country um and you know I've had a couple of my Offspring go to state schools Penn State and University of Colorado they name a couple um so far so good you and what's interesting here is the majors is the mix of Majors like you see Harvey mud out in California one of my favorite schools just shining area and the you know the technology I'm not saying to get electrical engineering in but the idea of the payoff 10 years out it's it's spectacular work I'm going to put it out on social we're we're trying Rich where are we on getting Paulina on I mean Paulina cacher she's impossible to get I know well me I talked to her agent and you know she just she can't do it anyways Bloomberg with a great great article if you didn't get into Duke a public school is the better investment again I'll put that out on social congratulations to our Graphics team yeah for just a absolute Jewel of an i lecture the kids on at the dining room table they all want to go to you know art schools you know well one my Offspring got the environmental degree and I said for the love of God get a minor in Business Administration he did and now he's doing well maor I'm trying to get my daughter to go to ruers she does want to S sweenee and keen on the same page double major major minor that's the way to go we're going to Major mount in a data check Futures deteriorate we're up seven on the S&P good morning [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lis Mato but if a look to the market but still some are uh partly unchanged right now and this is after jobless claims for last week came a bit softer than expected 212,000 applications were filed which was actually on part with the revision from the week prior and we have Nasdaq futures little un little changed S&P futures same there down Futures up about a tenth of a percent the 2-year yield at 4.95% that's up about a basis point the 10year yield at 4.59% and that's up a basis point as well to earnings we go Alaska Air rebounding from its Boeing Max issues the carrier expects second quarter profits to top analyst estimates those Shares are up 3% and Netflix reports later this afternoon Bloomberg intelligence says subscriber growth May blow past estimates we shall see and I thought this was interesting OIC oops babies Bloomberg reporting some women on weight loss drugs who've been struggling for fragil issues they're getting pregnant so now doctors are starting to prescribe the drug to these women so now more people fighting to get the weight loss drugs that are hard to get in the first place from some secondhand it works yeah my aunt lost 40 pounds it is crazy I I I don't know I my radar is up I I guess I'm behind on this everybody's doing it it's amazing it's I mean it's not easy cuz I mean it's it's a it's a bounce of nausea I mean you just don't want to eat is what I've been told M you just your your appetite appetite is not there your appetite big time I mean like so I don't know we'll see Lisa Mato thank you so much joining us now and you know where do you begin it's a three hour conversation be like she's going to throw a piece of chalk at us like she does in lectures from BR University we're going to get an update or maybe a down date with Wendy Schiller uh at Brown iconic textbooks Wendy I'm looking at Johnson the speaker of the house I guess he's still speaker of the house here on Thursday morning and I guess I could say he's doing a Baner but I got to go back to the way this nation was ripped apart in 1890 Blain and all the rest of it just a complete mess on the way to the distraction it was Theodore Rosevelt when does this kind of politics end how do you end the mess we're in whatever your political beliefs are well I mean I think it ends when the the Discord and Chaos for the Republicans at least in the house costs them the majority uh you know even the most uh sort of extreme wing of the party and the gates is the Marg greens the bo um the chip Roy who now seems a little bit more Center uh um chip Roy from Texas they they like being in the majority I don't think they want to be in the minority and I think if they lose the house and they they lose the house for successive periods of time then I think moderation will prevail but you know you can already see the Republican Party nationally worried about things like abortion so you know the extreme Wing talks about Aid to Ukraine they talk about spending they're not talking about abortion right now and I think that's the then you see that all of them or each of them are worried about reelection and they're worried um in some districts about losing the house so they're very strategic in what they're challenging Johnson on right does the extreme wing of the Democrats have the same effect as the as the extreme right wing of the Republican Party well I mean it's such a different mindset amongst the Democratic members for the the most part who see government as a vehicle for good and hold government to what we might call sort of moral standards going back to Jimmy Carter you know that's sort of The Branding and the self-identification of a lot of the members of the democratic party who are in the house um not as much as in in the Senate and it's a just a completely different mindset so they they think they're fighting for the good where the Republicans are fighting for the implementation of the strictest ideology that they have about a very small ederal government so they're really miror opposites in what they're fighting for and and how they perceive their fight how you know perceive their you know moral justification for what they're doing uh and that's where it's just really hard for them to even talk to each other it's like they're literally speaking different languages when you talk to us about speaker Johnson here to the extent that he tries to push through some of these funding bills it appears that he's going to have to work with the Democrats is that going to cost him his job well this is the big problem for for the Democratic party they they think chaos in the house leadership is good for them in November at the house level but also the presidential level they think it looks bad for trump it reminds people of Trump's chaotic presidency um whether you like him or don't like him it was somewhat chaotic and so now Trump is trying to project the abil stability he's you know surrounding himself with different advisors you know really saying I I'll I'll get it right the second time but if his house isn't disarray that's going to reflect badly on him so I actually think really has everything to do with Donald Trump if Donald Trump said stand down I think marar Taylor green would stand down so what is he doing now what's he Holding Out for and asking Mike Johnson for in return for his sort of calming the waters in the Republican Party All right so we're sitting here in mid April boy it seems like a long way to early no November here how do you think the Biden Administration would like to run this campaign this discussion are we going to have debates how much will the Biden Administration engage with the former president Trump how do you think this plays out I mean Paul I think the Biden campaign just focus zeros in on two different constituencies one is within the Democratic party making sure really important conses like African-American voters get out the door young voters are important at the margins but if you look at States like Arizona I just don't know how important those young voters will be versus the 55 or 60y old voters in place like Arizona Iona um and Michigan for example so that's important to them but they also want to completely remind independent Suburban voters of why they defected from Trump in 2020 um and in 2022 for Trump sponsored candidates that's their it's a very targeted campaign they're going to run from now until November they're not going to go abroad and they're also going to rely on abortion as a very significant mobilizer not only in Arizona but Florida Professor Schiller we have entertainment we got Michael Doug trying to be Benjamin Franklin out streaming right now on TV I'm trying to watch this he's so Michael Douglas it's hard to believe he's Benjamin Franklin but there true although I think he I only watched the first episode but I I actually thought he did a decent job it was you know decent job yeah I thought it was and then we went over to watch Ken Burns magisterial Benjamin Franklin folks look it up and then read Gordon Wood who's got a nodding acquaintance with the coffee shops in Providence at Brown University I mean Wendy let me R up the script here I mean Gordon Wood at Brown University he is definitive on Benjamin Franklin and founding fathers isn't he he he's well he's definitive on the founding fathers and Ben Franklin all each and all of them um but if you want something entertaining also um there's the completed Benjamin Franklin autobiography by his great great uh Grand nephew um and it's a really good read and Benjamin Franklin the reason it's important for us to be watching Benjamin Franklin now is that he combined a business friendly approach with common sense about what people were capable of and what could sway them and he was a newspaper man I mean that's why he's an interesting founder for 204 got I got eight ways to go here what would Ben Franklin do about our animosity to China um well I mean you know our animosity to China is just it's schizophrenic we're so reliant on China in so many ways and China's a good political pun bag that's just the facts um of the situation because of some intellectual property theft You could argue um and I think that given that we have a very weird relationship with Putin right now which scares people it's easier to talk about what we can do Visa China right um versus sort of the unpredictable strong man in Putin which we have you know clearly less control over Wendy thank you so much always entertaining when we had a huge response from Professor Schiller is um Paul I watch it and Michael it's a tough task and you know Doug yeah yeah where where where do I find that is that on one of your streaming services I don't know Lisa help me here I'm going to say apple plus but I could be wrong I can't keep track of all the services I just you know just one I wanted to watch the other day I go I'm not subscribing to a new service I mean I just said no way yeah but uh fascinating we'll talk more about that I watch Shogun it's almost over I know you're all in on Shogun there early on Shogun too you know I mean we're watching you're calling it out you know I'm not going to give away any any any oh thank you AR Apple TV Franklin on with M maybe we'll get Michael Douglas on we can talk to him about Franklin as well we're having fun with the songs today he's a gentleman from San Francisco and he's from a school in New Jersey oh yeah yeah H Lewis yeah lawville school class 6 to7 there it is the good morning Lawrenceville in New Jersey to be baby please me I want to love you all over do you believe in love do you believe the truth do you believe in oh you're making me believe it [Music] too all right [Music] [Music] [Music] [Music] [Music] [Music] this is Bloomberg surveillance with Tom Keane and Pa s are these stocks under owned by institutional Wall Streets a lot of these companies talking about generative AI with Lisa Mato on Market investors just worried about the ongoing sales slump in China and Michael bar with news a ship traveling through the southern Red Sea has been attacked the best in economics Finance investment and international relations this is Bloomberg surveillance on Bloomberg Radio she is the economist from Bulgaria crystalina gorva spearheading the IMF through the pandemic it was such a joy to speak to her a number of months ago in Marakesh and now she celebrates in Washington her reappointment to another 5-year term at the international uh monetary fund good morning to all of you across the nation and worldwide as well we've got a good team led by Eric Martin in Washington at the meetings of the international monetary fund and the World Bank here's our Jonathan Pharaoh with the managing director here in Washington DC my great pleasure you and I have got a lot to talk about and hopefully we've got enough time to talk about it all so let's start here the biggest risk that the global stability right now is it right here in the United States is it US policy well US policy has helped the world let's start from there uh during the pandemic the fact that us stepped up uh meant a lot in terms of stabilizing the world economy and today when we are upgrading our growth projections from 3.1 to 3.2% uh to a great degree thanks to the United States this being said all I are on the United States one what is going to happen with inflation and uh interest rates two how is the US going to navigate this world of more intrusive government policies let's talk about the FX Market to begin with I wonder how happy the Japanese are I wonder how happy the South Koreans are the Malaysians the Indians I go through it one by one in the FX Market as you know Christ in we've got a record low for the rupe the malaysi have had to intervene in the FX Market the Japanese the South Koreans are threatening to can you give me just a decent impression of what that's been like at The Forum so far the spring meetings what have they said to you about that how loud are the complaints of course it is concerning uh because as you said when the dollar is up many other country currencies are down not all but many other currencies are down uh and what that leads to is concern about how long that may last so that's what I hear from countries how long would the fat be uh stuck with higher interest rates and uh when they start easing can we expect that this would take the interest rates in the United States down a little faster uh and the answer to this uh uh two questions is uh uh not easy one on the um interest rates the fat is doing the right thing they're watchful keep your eye on the ball and at this point the ball is bouncing up and down and the fat is not yet prepared and rightly so uh to cut we still remain optimistic that within this year conditions in the United States would allow the FED to start cutting for how fast I don't think that we should gear up for Rapid decline in interest can I jump in and ask you what you think the source of that optimism is what's behind that what leads you to believe that those interest rate cuts are coming well what what we're seeing is um the uh economy is inde slightly overheated but part of it comes from the uh fiscal stance of the United States uh so there is room to cool a bit the economy just by being more watchful and it would help the United States overall because as we know deficit has gone up to 7% the second reason is that U so far the U uh business environment in the United States has not reacted very firmly to the interest rates being high but we seee a little bit of softening underneath especially uh Ines and that tells us that high interest rates ultimately bite can I tease that out just a little bit more are you effectively saying to us that the US exceptionalism that so many people are talking about is ultimately unsustainable I didn't say that ask I I would I would tell you where what are the sources of this exceptionalism and I think they're with us to stay one is very deep Capital markets people people are coming here not only because they can generate more income with high interest rates they're coming here because the economy is very vibrant and capital markets are are deep second innovation in the United States move very quickly from idea to a venture and then to scaling up and three the US is tapping into a very vibrant labor force right next door what in the eyes of many people is a problem and I I admit there are elements of this uh uh flow of people that is concerning is actually feeding into the labor market of the United States in a way that keeps wages lower than in some other uh countries and keeps uh the ability of businesses to grow basically unlimited you understand why that's a difficult political message don't you of course and and and I would translate it in the following way something that I think everybody in the United States is looking for yeah good sound transparent IM immigration policy uh the us if you look at the sources of growth on the labor side front it is more people coming from outside that fed this um exceptionalism of the labor market but it has to be regulated it has to protect uh uh the American people from who may be coming here with bad intentions I can tell you something that it's politically popular in America and elsewhere too it's going after China excess capacity and potentially dumping Goods on the international market we're not just hearing that complaint from the United States we're hearing that complaint from others as well what's your message for the Chinese government at these meetings with those concerns in mind uh I was in China recently and my message there is the same I would convey today China is on Fork on the road uh they can continue with their traditional policy and that includes industrial policy on scale towards export or they can shift gear and concentrate on domestic consumption on beefing up demand and on continuing with Market reforms that serve them well in the past we know from experience that industrial policy often produce misallocation of capital and Labor uh we are today in a world of weak growth prospects the last thing we need is more misallocation of capital and labor the last thing we need is exactly what we've got I'm afraid christilla because we're seeing industrial policy take off in America we're seeing the Europeans trying to come up with their own form of it it might take them a while we know how Europe Works China's been doing this for a while what you just said about China I heard a decade ago you've heard for the last two decades that they're going to shift this economic model it doesn't appear that they are I think a big question for us at these meetings and I'd love for your input on this I C it with John liy this morning and I said how does the IMF retain regain some relevance in this conversation to help reshape these outcomes because we're drifting away from free trade we're breaking away from cooperation we're going somewhere else well two uh responses one how do we I wouldn't say regain uh uh because I think we have quite a lot of relevance on that conversation on fragmentation and the benefits of an integrated global economy uh we just have to continue to bring the facts in objective Manner and the facts are that um uh when we go excessively in uh protectionism in industrial policy uh measures we risk to actually affect negatively prospects for growth and we certainly create a wave a down spiral because uh experience tells us every measure of protectionist Nature has 75 probability per probability of reciprocity and then where do we uh end but the second point I want to make and I and I'm making it most sincerely we are in a world that is faced with massive transformation the digital uh transformation the the uh clean uh economy that we aspire for there is some value in using industrial policy to accelerate decarbonization to make it so that the benefits of the digital economy are more fairly shared across Society in other words when there is a market failure yes it is Justified you take a measure to correct it our worry is that when we looked at the massive increase of industrial policy measures a good chunk of them do not reflect the market failure so we will continue to speak truth to power let's talk truth to power right now got some spies around here they know they are they saw you with a central bank governor of China yesterday evening can you tell me what you said to him what I told him uh is twofold one is that China needs to continue to seriously address the uh problem of the property sector that have been U handled somewhat but not resolved they need it for domestic consumer confidence because many Chinese people think of their apartment as they saving for old age they also need it because uh a sector of that significance cannot be put on hold the second thing I told him is that we are now starting our article 4 consultation this is our annual taking the PO of each economy with China and that it may be very useful for China if we do more analysis on how they can boost domestic demand how they can exercise their own decision for a dual circulation uh economy and I was I was delighted that he sees value from the fund uh to uh get deeper in these issues and provide China with uh appropriate advice they're coming under pressure you know they are politically not just from this Administration secretary Yellen but potentially another Trump Administration as well do you have any concerns that they'll lean towards the FX market and just seek out a weaker currency well I that we I we haven't seen signs of of that but what I do believe is that uh yes if China builds over capacity and pushes export that create reciprocity of action and then we are in a world of more fragmentation not less that ultimately is not good for China China wants an integrated global economy therefore what I want to see China doing is to get serious about reforms get serious about demand and domestic consumption we've got so much to talk about but unfortunately I know you've got other things to do let's continue this conversation through the year christalina thank you so much and congratulations on a new term thank Jonathan pharoh with crystalina gorg and newly reappointed uh to the IMF of a 5-year term and you know always there's some even with with legard who was iconic there's always challenges about will they get reappointed in the different constituencies of that and particularly in Europe and and all in all what codified a huge thrust to say goriva again was her performance during the pandemic pandemic that's really uh what solved that uh talked about that as well uh Jonathan phoh there with with the managing director on China Paul and I are going to focus on I believe one war or maybe it's two Wars I don't think there's three Wars out there you shouldn't make a joke it's tragic but boy do we have a guest to follow crystalina gorg to talk about the uncertain uncertainties we have about a geopolitics Dan tabom will be joining us here from Oliver Wyman in a moment Futures up 13 down Futures up 123 uh good claims data today showing an employed America from New York City this is Bloomberg surveillance [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lisa Mato we've got green on the screen after yesterday's selloff right now we have Nasdaq futures up a 10th of a perc Dow futures up 3/10 of a perc S&P futures up 210 of a percent or 11 points over to the bond market the 2-year yield at 4.95% that's up two basis points the 10-year yield at 4.61% and that's up about one basis point we'll take you over to Tech right now Micron they're up 1% sources saying it's going to get $6.1 billion do in US government grants next week and over to Microsoft they're up a tenth of a percent Business Insider reporting the company wants to accumulate 1.8 million AI chips by the end of this year primarily from Nvidia Nvidia Shares are higher too now infosis they're lower they're down 5% reported net income for the fourth quarter though that beat estimates but it's adrs are down this morning that is your Bloomberg business flash Tom and Paul El Lisa thanks so much as we have a conversation with crystalina gorg of the IMF and I believe scheduled tomorrow G goth uh will be I believe with Lisa bram's look for that tomorrow uh as well we continue this conversation on our geopolitics and American policy with Daniel tanon bomb he is at Oliver Wyman he is definitive on sanctions and yes he's at the IMF World Bank Spring meetings and joins us from our facilities in Washington DC Dan tanom I i' I've got a look to the sort of kind ofik War we're Prosecuting Max Hastings has written a one volume on Vietnam which over 900 Pages makes clear every step of the way it was a sort of kind of like War why are we Prosecuting sort of kind of like sanctions against Mr Putin well thanks Tom I I think the sanctions on Putin for the last two years and we've talked about it repeatedly have been Complicated by the fact that Russia is still an active part of the global economy in that it still selling oil to Western countries it's still selling a whole load of Commodities and other natural resources although that's beginning to get wound down I think the challenge that we're seeing is when I talk to firms and clients around the world I I don't think they're as afraid of the US's sanctions might as they once were when fines total into the billions of dollars I think that's giving firms right almost a choice of thinking of whether they continue to do business in Russia where it's legal or following kind of the the practice um and what's behind the San against Russia thus far I mean this Paul to me is the heart of the matter does sanctions work I that's all there is to it let's let's go right there Dan I mean in this new world or in this current world of globalism do sanctions work because I'm thinking about whether it's Russia whether it's Iran with their oil it just feels like they don't really work so sanctions work I think the question to ask is what is encompassed when you talk about sanctions and I think you can't avoid void the discussion about enforcement and enforcement unfortunately has become a lot more limited than it once had at scale and that enforcement is really what helped companies and countries fall in line and begin to make choices when you don't have that stick unfortunately it's really harder to see the full effectiveness of sanctions so when I see secretary Yellen talking about we're going to impose new sanctions related to Iran after the missile strike and drone Strike last weekend in Israel enforce the existing sanctions I mean there's real questions there if you don't enforce sanctions that you're not benefiting from the full Effectiveness and you in terms of enforcement I'm not sure who really enforces them if Russia can sell oil to India who then refines it and sells it to a gas station in New Jersey that's not working so how do you really beef up enforcement then I think the challenge when you move away from specifically Commodities that we know certain West countries and allies of the US and the broader Western regime rely on when you look more broadly there's certain activities that you're really looking to avoid is a starting point anything that goes in furtherance of supporting Russia's war in Ukraine um any companies us or sorry any companies outside the US that are known to be supporting uh Russia and still trading with the West those are the companies to begin to really restrict we know there's larger Western companies continuing to operate in Russia um where that line of legality is can certainly be called into question because Russia's gone to Great Lengths to mask certain involvement of entities so I I do think there is a question in terms of what do we still need from Russia and having an aboveboard debate as there is still trade that's happening uh what are you learning at the meetings in Washington I guess it's sort of kind of early Thursday morning 9:21 a.m. you know nobody I mean Dan tanom is the only one that's awake exactly with the managing director body else starts to day at 11:00 a.m. sure but Dan tanom what do you think the theme is or the tone at the meetings in Washington I I think it depends on who you ask and if I when I talk to government officials um they're certainly concerned of broader geopolitical tensions and what role their country plays especially if their country is being forced to choose when I talk with private sector entities and clients I think they're looking for some sort of rules of the road on the potential weaponizing of an economy the US Deputy National Security adviser delip Singh was writing about an economic statecraft Doctrine but the private sector will follow whatever the prevailing rules of the road are but I think they want Clarity that we're not going to see a continued weaponization of economies what is your prediction for China in our relationship in January of 2025 after we see whomever is President I I mean based on the the just the the articles of the last number of days I don't think it really matters they're both on the same page witness wi Pennsylvania so one of them is going to win Pennsylvania and then we have a new China policy what's it going to be Daniel tanom I mean as a son of Pennsylvania even though I'm in the eastern part of the state I I do take this seriously um look I think the Biden Administration has largely followed the practices of the Trump Administration with respect to China albeit obviously with a little less of the colorful rhetor um that dominated the prior Administration you're not really seeing much of a policy change I think the interesting thing especially when you begin to talk about Iran sanctions and Iran oil sanctions China has been the beneficiary of Iranian oil for years um there haven't been meaningful enforcement of sanctions on Chinese entities with respect to that trade that would be on the wrong side of us secondary sanctions so I think if there's a dayon there's an understanding of China not coming against us and other Western interest giving up essentially enforcement of us sanctions um in return Dan we got time for one last question and I know the Oliver Wyman Madison Square Garden tickets they're awesome what do you think Dan Sixers Nicks I mean is this like original six in the NHL this is just the Sixers are back to antab bomb the the Sixers the Sixers are back I I still don't know what to make of it but I'm I'm looking forward to seeing some games in New York well have to see I think he's inviting you that's Dan tanom thank you so much with Oliver Wyman a gentleman of Philadelphia as well these are huge huge issues and you know crystalina goriva touched upon them and I think what so many of our listeners and viewers are saying and I see it out on live chat is well it's sort of kind of like sanctions like you know there's some great shs Robin Brooks has been great on this I believe at Brookings Paul instead of the stuff going to rush R it's going to Kazakhstan and then it goes to Russia yeah what's the difference I mean I don't get it I mean it's like pretend it does I mean again as Dan was just mentioning the the sanctions on Commodities tough tough to enforce and um so it's you wonder kind of what is really the value and you know maybe some sanctions on individuals has a bigger issue all I know is the US government owns a bunch of Yachts around the world um stuck in ports I'm not sure what that's that as well is like what do you do with all the stuff we pulled in from Russia I know that's key to debate our team balance of power we'll have more on that today was Mr Johnson I believe it's Saturday vote Yes it's it's after the China for no it's before it's after the quales in China for Formula 1 okay and it's before Nick Sixers okay rich is the Nick Sixers Saturday or Sunday Saturday Saturday at 6 is Nick I I haven't been this excited about a basketball game in ages well Jaylen Brunson is just reinvigorated this entire franchise so we're fortunate to have them and without Julius Randle we'll see how far we can go Futures up 11 down Futures up 122 let me give you those levels 5,073 on SPX and the Dow just over 38,000 38,1 13 uh as well we do economics Finance investment and international relations thank you John phoh for that conversation with crystalina gorg Eva we're on YouTube search Bloomberg podcast it's a very live live chat from New York City Bloomberg surveillance [Music] [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business [Music] Flash Blue Button from the Bloomberg Interactive Broker Studio I'm Lis Mato alongside Tom some training pleas Queenie with your opening bell report so how are the markets going to react we had the latest round of feds speak also some more economic data coming in no change in the labor market from the latest round of weekly jobless claims 212,000 applications were filed last week also the Philadelphia fed uh business Outlook index that came in stronger than expected this month at 15 a half and in about a half hour from now we get existing home sales and we're off and running so let's get right to it S&P 500 up 210 of a perc the Dow up 310 of a percent and the NASDAQ up a tenth of a percent over to the 2-year yield at 4.95% that's up two basis points a 10year yield at 4.61% and that's up one basis point to currencies will go we have the dollar is stronger Japanese Yen Euro weaker British pound stronger Bitcoin up 2% at 62377 as far as Commodities we have spot gold higher at 2390 an ounce rent crude 8 $7 a barrel at the open we also want to check in with Taiwan semiconductor their shares down 5% even though delivered a better than expected Revenue Outlook also reaffirmed its spending plans for this year that is your Bloomberg opening bell report Tom and Paul oh get out the calendar Red Sox are in last place I mean that's what it comes down to pretty much they're playing 500 Ball but you know they're okay others playing better play better yeah dreaded New York Yankees this is a joy what happens folks is if you're managing money and you get past $1 trillion your mind changes your brain changes and only Chris Alman is grounded he's with the California State teachers retirement system we're thrilled he could join us in studio how much do you manage this week I mean it Tom come on 330 billion okay 330 billion and he's grounded and what I love about him at the back end of his note and he's right on tune with the calendar sell in May and go away really do you feel that I you know I the old adages and we all three understand the old adages no shot there but still are in play and I really wonder Tom I mean the market has come up so much this year it's nuts okay Jason Ferman out with a great great endowment view he's got like 20 30 colleges and they're all doing singled digigit return even the best ones I barely doing double digit return do you manage for Total return for the best out outcome you can get or do you manage to an Actuarial Assumption of seven or 8% Actuarial assumption and and so we're different and that's why our asset allocation is different than the endowments number one I can't go out and hit you up for a big contribution just to help boost my fund Lisa can yeah well and we generally are looking at trying to make that seven as a pace per mile in a marathon it is literally a 30-year outlook for us because teachers live so long so I use fixed income where they don't I don't I have only 50% in privates only 50 well they can be up to 80 because they can handle ill liquidity so what is the asset allocation of the State of California these days and and maybe how how has it changed yeah well the state of California you and I bought a lot of municipal bonds they're in an interesting position but in terms of calsters we're still pretty close to our long-term 7030 roughly se you know uh 8020 kind of asset allocation got about 45% in fixed or in equities we've got 15 in private Equity 15 in real estate those haven't moved just because those markets are frozen we're about 12 in fixed income but fixed income's hiding in other parts of the portfolio we have inflation sensitive at seven um and then another asset category that's fairly new called risk mitigating strategies it's about 8% almost 10% a risk mitigating strategy is when you yelled on the hallway empty the dishwasher in the child that's a mitigating strategy exactly Chris what do you make of this Market I think a lot of folks when they look at the equity markets I mean we had had this big run off of those lows in October you know earnings are good but are they that good to support this Market how do you feel about just kind of where we are in this market here I am surprised I'm going around New York this week talking to my private Equity partners and they are telling me that business is so strong every airport I went through was absolutely packed every plane was packed every restaurant in New York I can't believe how busy Manhattan is is it's not true in San Francisco not true in the west coast but streets are busy again so the economy is strong the earnings are real pause on this why Ken Griffin's building a a new tower south of the diamond Tower we got the diamond Tower we got the the Ken Griffin Tower New York seems to have a pop to it I get it and that other geographies not just San Francisco but say you know smaller cities as well they're basically flat on their back is it work from home why it is work from home Tom and it it's changing the nature you know when I talk to not surprising private Equity wants people back four days and really wink wink five days on the west coast that's not true at all we're two days a week and that's yeah they really push back on even four days a week look at Tech so I think the thing that shocks me about this market and you guys talk about it a lot the market was looking for six Cuts just four months ago now they're talking about maybe one and if anything a rate hike and it's it in strides so y I think it's strong earnings that's the base of the market and then it's all this change in in AI that AI whether it's the steam engine maybe the light bulb but AI is transformational and they're betting the farm on it yeah that that's that's kind of what I hear so all right we're kind of getting right into the teeth of the earnings season here uh Chris what are you looking for what do you think the market needs to see do we need to see earnings estimat go higher to support this Market do we just need to see nobody blowing up what do you think we need to see I think nobody blowing up you know earnings are a game now come on how come every quarter all the companies beat their earnings estimates because it's gamed and we need to stop looking past earnings we need to really look at the p ratio is still reasonable not price to Perfection like I thought it was at the start of the Year earnings has the E has come back up to match the price so we're okay is the market got more up upside that's why I think Tom selling May and and go away this is an election year are you getting pressure from Karen or William these are the first names of the board members of keler Fiona Fiona's trouble she in the meeting she's just impossible Harry is a is a board share K through2 classroom teacher are they pounding the table and saying why don't you own some of these Tech Darlings of California are they are they just screaming at you own more of the big boys right now Tom they're all pounding the table and waving goodbye because I'm I'm retiring in about 60 days I was to say about to ask him I thought he was on his is this a retirement tour is this like the um he's been on a retirement tour for three years didn't bring it up hey you're one to talk Tom come on thank you so but no realistically they're salt of the earth people and and they are not worried they're worried about the overexposure to Tech because Tech just isn't in our Equity portfolio it's in our private Equity portfolio it's even in our real estate portfolio in our infrastructure portfolio when you look at the energy Demand on on Tech so they're not worried what they're worried about is let's you know this year's a good year let's try to get to Seven let's balance the portfolio let's have diversification is still the name of the game for us we've got to be balance so it's not just put the metal to the floor let's have a steady seven overtime and yes they are very focused on that the cheap shot idea is everybody's leaving California Paul's living this in real time he's got kids prospering out there and I hear a lot of people with a terrific Buzz about Los Angeles Ed llo is really big on a recovering San Francisco you know things are healing and and all that push against the Gloom on the great state of California what's California doing in the future to stabilize their many political social issues well I think that's part of the challenge for the state I'm not a a political guy I'm a father and I've got three daughters that are in their their early 30s buying a home is really really difficult so just like anywhere in a nice state with great weather y home affordability is a huge problem water we have plenty of it this year yeah but water is going to be a long-term problem and I think just like a lot of places in our country politics really takes a lot of work we need people in the middle who will talk and and I'm just looking at that my Association here with New York and with London I want to care about the financial markets Tom but California still in the west coast is still going to thrive awesome it is the home of innovation and you're going to see massive changes in what we do and how we operate in the next five years I'll get more one more in here but I just want to compare and contrast at the Rochester Institute of Technology in February you get up and you have to walk the quarter mile which is basically like an Ice Station Zebra when you're at the top of the Arctic he's getting up it's Santa Barbara going what will I do another 75 degree day I wish I wish no I'm in Sacramento but yeah another great I mean one of the greatest things arguably about the state of California is a university system ex I mean and it's just extraordinary up up and down the state just extraordinary how is the University system these days in California no it's doing excellent it is amazing and and you know you got to throw in there you've still got Stanford you've got uh CL there you go Santa Clara you've got calply and Cal calply s sispo you've got an amazing system so I think okay I can't emphasize enough because I get it about education you've got to invest in education and focus on education for the younger Workforce and that's what's needed in America Chris you're retiring in 60 days right I mean 24 years at Cal St before that at Washington State Pension you've done it all you've seen it all heck of a run there my friend thank you it's been a marathon it has been a roller coaster ride and I'm not getting off I'm going to stay in the business and I'll stay active but it's time to get out of government do some other things CH thank you so much with the keelers here this morning I'm making that Actuarial assumption which uh most of us aren't fortunate enough uh to do there really it's a whole thing we can devote to is to the retirement shortfall if you will of America coming off of orisa of 1974 it's been painful uh for many many Americans red and green on the screen the vix 18.33% judge has set aside two weeks for jury selection but that much time may not be needed seven jurors were sworn in on Tuesday so that means five more jurors and six alternates still need to be selected the jurors who survived the grilling by lawyers are an information technology worker an English teacher an oncology nurse a sales professional a software engineer and in a bit of a surprise two lawyers in New York June grao Bloomberg Radio Ukraine says it attacked a large Airbase in Russian occupied Crimea today highlighting its ability to strike the kremlin's military installations far beyond the front lines despite growing ammunition shortages there and President Biden talking tougher about China as he highlights the challenges to its economy they've got a population that is more people in retirement than working they're not they're not importing any they're not bringing they they're xenophobic no nobody coming else coming in they've got real problems I'm not looking for a fight with China I'm looking for competition but Fair competition the president's latest rhetoric comes two weeks after his latest phone call with the Chinese president xiin ping the World Health Organization is waiting into the world of AI to provide basic health information through a humanlike avatar but while the bot responds sympathetically to users facial expressions it doesn't always know what it's talking about Sarah is a virtual Health worker that's a available 24/7 in eight different languages but who is warning on its website that this is an early prototype and it's providing responses that may not always be accurate Global News 24 hours day whenever you want it with Bloomberg News now I'm John Tucker and this is Bloomberg Paul Tom and Lisa surveillance correction big correction I thought the Red Sox five ball I'm wrong 10 and nine 10 526 B still enjoying last place but you know we have to do our I got yeah you get the Yankees in first place 684 one game back as the Baltimore or we've been looking I watched some Orioles baseball we know the ownership there don't we that's a rumor I think Matteo's theou she in theou you know she's in the group Kell Ripkin in the group that's a good thing but the the Oriol start out strong home top in a league eight and four at home with the surprise Cleveland Guardians this is the who the guardians I'm getting used to it now it's not the Cleveland Indian Cleveland what Cleveland Guardians not the Indian not the Indian what was wrong with even better bars out this week we've been Detroit Tiger free which is good beautiful thing well Mel bar scheduled I believe on Monday is he back okay well I talked to one of his people in the hallway he's probably cruising I'm guessing this week he is it's a three Island Tour uh Dow up 141 points nice lift to the Dow everything else pretty much flat SPX flat here what are we doing I'm not going to kid we're into earnings season the lead today Taiwan semiconductor out with a very very nice earnings lift we're on Apple carplay we're on YouTube the live chat search Bloomberg podcast good morning [Music] [Music] findes and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash from the Bloomberg Interactive Broker Studio I'm Lis Mato we've got red and green on the screen the NASDAQ down two10 of a perc the S&P 500 little change and the Dow up 2/10 of a percent the 2-year yield at 4.98% up four basis points the 10-year yield at 4.62% up three basis points to Commodities we'll start with spot gold that's higher at 2,379 an ounce comx gold at 2394 an ounce and over to oil we have Brent crude $87 a barrel NX crude $82 a barrel to earnings we go we'll start with Alaska Air they're rebounding from its Boeing Max issues the carrier expects second quarter profits to top analyst estimates so we have Alaska Air up nearly 2% Boeing down a fraction and Netflix they report later this afternoon the sharff have actually been on a roll the past 6 months adding $112 billion in value thanks to password Crackdown and also its new ad supported subscription tier Netflix shares a down half a percent that is your Bloomberg business flash Tom and Paul thank you so much uh Lisa greatly greatly appreciate it this is one of my best best people people at Bloomberg Eric Martin has been doing this since time began and he is so valuable he's been covering the IMF in World Bank he was at the Breton Woods conference no kid in New Hampshire with John Maynard KES right after World War understand joining us the smartest guy in the block on these institutions these International institutions Eric Martin Eric let me just start with the age-old American question are they going to ask the American Tax pray for more money Tom you know uh they actually uh with the quoa reform that we had in marash Morocco announced six months ago uh the resources of the fund are are in a good place for now I think uh is the feeling among the membership and so um in contrast to the World Bank which is across the street from me here I've got the IMF in back of me and the IMF is in a good place in terms of its resources certainly eyes are on the US and the US are they in a good place in dealing with problematic crisis economies that's why they were invented after World War II what have you learned in your study of say their fractious relationship with Argentina sure uh well Tom you know it's funny we should mention that I actually uh Dr with me for these meetings I don't if you can see this these are my uh presidential uh mint from the Mount Washington hotel in New Hampshire so uh very on point with your uh your discussion of Breton Woods conference this is the 80th anniversary there are questions about is the IMF still fit for purpose and oh I think we're Frozen there are we Frozen there let it let it go it's Washington DC Eric Martin out on the sidewalk at the IMF buildings we'll try to get him uh back we've lost the audio there and he's showing us the cards right now of his of his tokens let's talk a little bit about this there's this in into the political election gorg was in a box and I thought John faroh's questions to in China were really were were really timely and that um you know what so much of this is about is a political election Joe Biden and Donald Trump have to change their tune because of one state Pennsylvania that's the swing state of the Swing States and you see that with the issue over Japanese buying us steel you see that over China China uh China but then we also have to do a relationship with these International institutions including the G20 meetings well I think that's a great about China that's a great Point Tomic because you and I grew up in a in an age where in business that it was all about internationalism and the global economy and Global interdependence but that seems to have changed over the last 5 six seven years whether it's you know here in the US or in the UK with brexit more nationalism one more try here with Eric Martin down in Washington Eric where is the sense of globalization the spirit that you cover each and every day is glob globalization dead um certainly globalization is not dead in fact I'm seeing over here on my left uh Madame Christine lagard is out here greeting some uh some fans well can you bring her over to you can we have a conversation with my good friend oh he just froze okay that the reason that's lag guard's people freezing the feed because they know I'm going to ask for Christine lagard to come over and have a few words with Tom ke but that didn't work out we're going down in flames here I want to rip up the script here uh right now Paul we got to come back to the beginning conversations this morning on this Equity market and any number of these conversations I don't hear anybody saying go to cash no the whole Bare Market cash thing after getting hammered since October of last year has really stepped aside it has and Tom we talked about the draw Downs in the market we have actually almost a 4% draw down here Tom so I mean this is I you I don't know where people are go here a little bit of a draw down from that that recent high of the market but that seems to be it I mean we'll have to see whether we have some more downside here but this is earnings are coming really into Focus again Netflix after the close today will be one of those I'm not going to call it a bell weather stock but it's certainly a widely held high-profile stock it's up 25% year to date um and we'll see how you know it's a call on consumer a little bit whether cutting he was scheduled to be with us today Peter Lynch he's he's got something to do with Boston College and a small investment shop up in Boston uh but bespoke thank you so much for this tweet po Paul let me quote it in its entirety far more money has been lost by investors preparing for Corrections or trying to anticipate Corrections than has been lost in Corrections themselves that's a good point and that's Peter Lynch of course iconic but spoke thank you for that really smart uh remembrance there of a time and place far away can you imagine what the emotion would be like if we actually draw down 11% 11 12 yeah exactly right I mean can you imagine it people would be hysterical it would be hysteric we have you know we just haven't seen it again a lot of folks are saying you look at this market up 25% or so from that October low maybe 21 22% now a little bit of a pullback but we really haven't seen a sustained pullback in the market which a lot of Market technicians will tell you is healthy for the market haven't seen it um but again the FED we kind of know where they're going to be they're going to be a little bit uh higher for longer and now we'll focus on earnings can't say enough about the social effort folks we're out on LinkedIn primarily and YouTube Lisa Mato adding some real value there just she just huge I mean I'm trying I'm trying to keep up yeah but but the basic idea here is this world is changing and we don't take that over to Conventional Equity analysis Lisa Michael bar Paul Sweeney and I know that like the whole distribution of media it's changing do we understand the equity world's changing and most of that to the Optimus seems to be productivity from technology yeah and I that's foundational and you know we get some smart people on here Tom that tell us that this AI thing is not only real but it's transformational I I I go back uh into Gene monster I mean Gene moner is as good a voice out there on Technologies as as I think there is and he said listen on a scale of 1 to 100 this is darn near 100 um you know like electricity type impact yeah um um putting the internet at 40 or 50 putting AI in the in the high 90s in terms of the impact on a relative scale basis uh and then we get some again some more fund managers are saying it's a big part of this uh Market it's a big part of the future um and Tech it's not just technology it's impacting all parts I look at it is and this goes to Wendy Schiller's conversation today is some of these big shifts the first time they go they fail y or they do not that they're suboptimal I guess is how I'd put it and maybe the second time they go they fail and then the third time boom and I don't know where the Boom is on AI my guess is it's farther out than we think but that's just my amateur opinion but what we' need to talk to people I mean that's why we're are we getting at llo tomorrow is he awake yet are we getting blood Char eting we're effting it's a tough get I mean I mean you got to go through he's got to get signed off by his agent yep after the people decide if llo can open up some of his time well since he he went West Coast since he went electric uh he's been tough to tough to deal with no uh there's no question about that this afternoon Mr tanovich Miss masser you're gonna have to listen on Bloomberg Radio to a really really important moment Netflix earnings to me it's like Microsoft in the rest I changed my tune on that it's huge Paul what do we expect from Netflix uh could be big big uh quarter for them um as Lisa's been reporting they're they're going to report after the close and the kind of the revenue drivers in the intermediate term are uh cutting down on all that password sharing that's a big Revenue impact and then advertising that's a big Revenue driver for the company so it's historically been a subscriber growth story that's still the case but now they got some additional Revenue sources Rich from Victoriaville emails in and says I was thinking Quebec nordi I'm sorry okay Tim stovic of course and Carol Master look for that this afternoon with coverage on Netflix we've had fun today with a gentleman from Lawrenceville huy Lewis Paul sweee Alex steel next CR sometimes but if I just save your life that's the power of love that's a power love [Music]

Channel: Bloomberg Television

Views: 10,362

Keywords: bloomberg, bonds, economy, finance, keene, markets, radio, stocks, surveillance

Id: Ki2L0OB9GxA

Length: 176min 19sec (10579 seconds)

Published: Thu Apr 18 2024