AND SAVITA IS HERE WITH US. I KNOW INTERESTED, TOO. MIKE? >> LET'S TALK MORE ABOUT THE MARKETS AND ECONOMY. NEW GDP DATA DUE OUT 8:30 EASTERN TIME. BIG SURPRISING COULD BE BETTER GROWTH NUMBERS. HERE WITH US, SAVITA SUBRAMANIAN. ALWAYS GOOD TO SEE YOU. >> HI. GREAT TO BE HERE. >> SO DISCRETIONARY? >> YEAH. >> RETAIL? >> YEP. >> TRAVEL? >> WELL -- YEAH. TRAVEL I THINK MAYBE A LITTLE LESS, THOUGH, BUT MY SENSE IS THAT THE WORLD IS NOT -- INVESTORS, PROFESSIONAL INVESTORS, ARE NOT PREEPARED FO A POSITIVE GROWTH SURPRISER. PREPARED FOR ALMOST EVERY OTHER TAIL RISK. IN MEETINGS I HEAR TALK ABOUT THE MOST DIRE SCENARIOS. U.S. DEBT DEFAULTING, CIVIL WAR IN THE U.S. NOBODY TALK ANSWER THE FACT WE KEEP REVISING GDP HIGHER AND EARNINGS ARE STILL SURPRISING. THAT'S THE CRUX OF IT. THAT WE'RE STILL IN THIS WALL OF NEGATIVITY, WALL OF WORRY, AND FOLKS ARE HIDING OUT IN CERTAIN SCENES LIKE A.I. OBVIOUSLY HAS BEEN A GREAT STORY, BUT I THINK THERE'S MORE TO GO IN TERMS OF GDP-SENSITIVE COMPANIES ACTUALLY COMING BACK TO LIFE. >> WE'VE SEEN A LITTLE, GLIMMERS OF HOME RINGE RETAIL. DESPITE COMMENTARY, LISTEN TO THE LOWES EARNING CALL, CAUTIOUS. REMAIN UNDER PRESSURE, ET CETERA, YET STOCK WAS HIGHER. INTERESTING PRICE ACTION THERE. >> YEAH. >> AND SEEING AL SIGNS OF LIFE IN BIOTECH RECENTLY. >> UH-HUH. >> WHERE'S THE MONEY -- IS IT MONEY COMING OUT OF MAG SEVEN? LOOK FOR VALUE IN THE QUOTE/UNQUOTE, MARKET? >> COMING OUT OF MORE DEFENSIVE AREAS OF THE MARKET. INTERESTING IS IF YOU LOOK AT THE AVERAGE PORTFOLIO MANAGER OR THE AVERAGE MUTUAL FUND, THEY'RE BETA RELATIVE TO THE MARKET LOWEST WE'VE SEEN SINCE 2008. AND SO BETA WHAT IS BETA? A BET THAT THE MARKET'S GOING MOVE HIGHER. NOBODY'S GOT A BET ON, THAT THE MARKET WILL MOVE HIGH PER. THAT'S INTERESTING. IN AN ENVIRONMENT FOLKS TALK SENTIMENT IS BULLISH AND EVERYBODY'S ALREADY INVESTED, WHEN YOU LOOK AT ACTUAL ASSET ALLOCATION, PENSION FUNDS HAVE THE LOWEST ALLOCATION PUBLIC EQUITY WE'VE SEEN IN, YOU KNOW 20SHGSKNOW, 20 YEARS. I THINK THERE'S A COUPLE OF STOCKS THAT EVERYBODY LOVES BUT THE REST OF THE MARKET IS FORGOTTEN. >> WEIRD, ALSO RECESSION-FOCUSED. I GUESS THAT'S WHAT HAPPENS WHEN YOU RAISE RATES. >> YES. >> THINK IT'S -- >> VERY QUICKLY, YES. >> NOW IT'S SURPRISING THE UNITED STATES IS THE BEST ECONOMY. WE SHOULD ALWAYS HAVE THE BEST ECONOMY. >> WE SHOULD. >> MY QUESTION NOW IS DO THINK ANY WHAT WE'RE SEEING IS RELATED TO THE INFRASTRUCTURE SPENDING? DOING MUCH OF THAT YET? THE CHIP STACK, IRA, ALL OF THESE THINGS THAT WE DID IS THIS A RESULT OF THOSE? THE OTHER THING, I THINK, IS THAT WE FLIP THE HOUSE AND THE COUNTRY -- NOTHING NEW HAS BEEN DONE. HAVEN'T SPENT ANYTHING OUT. TOTALLY GRIDGRIDLOCKED, WAITING NOVEMBER. >> EXACTLY. >> SOMETIMES LEAVE THE U.S. ECONOMY ALONE, I THINK, AND THIS WILL HAPPEN. RIGHT? WE HAVEN'T DONE ANYTHING YET. >> I THINK YOU'RE ABSOLUTELY RIGHT. >> WHICH IS RIGHT? BENEFITTING FROM THE PROGRAM. >> A LITTLE BOOST. FISCAL IMPULSE CONTRIBUTED TO GDP GROWTH, BUT I DON'T KNOW IF IT'S CONTRIBUTED DRAMATICALLY TO EARNINGS GROWTH FOR THE S&P. I THINK EARNINGS GROWTH FOR CORPORATES HAS BEEN DRIVEN BY REALLY EFFECTIVE COST MANAGEMENT, BY SOME EFFICIENCY GAINS WE'RE STARTING TO SEE. COMPANIES SPENDING ON AUTOMATION AND EFFICIENCY SINCE 2019. >> YOUR PRODUCTIVITY? >> OUR PRODUCTIVITY. YES. THANK YOU. AND IT'S STARTING TO PLAY OUT, AND SURPRISINGLY IN STABLE MARKETS. THINK ABOUT IT. 9% INFLATION OVER THE LAST TWO YEARS BUT MARGINS HAVEN'T REALLY BEEN ROCKED BY THAT. SO I THINK THAT'S TESTAMENT TO CORPORATES ACTUALLY DOING PRETTY WELL WHEN YOU LEAVE THEM ALONE AND LET THEM FIGURE OUT THEIR BUSINESS. >> FIGURE HOW WE'LL SCREW THIS UP. I GUESS THE ELECTION COULD SCREW IT UP? >> A WILD CARD. POSITIVE, BOTH SIDES OF THE AISLE ARE PRO-ECONOMIC GROWTH, PRO- -- WHICH REPUBLICAN VERSUS DEMOCRATIC WINNER IS A DIFFERENT STORY AND EXPRESSED IN THE MARKET OPINION ONE SECTOR I WOULD STAY AWAY FROM ON POLITICAL RISK FOR THE NEXT FEW QUARTERS IS HEALTH CARE. HEALTH CARE IS "THE" MOST CROWDED SECTOR IN THE S&P 500. HAS HIGHER REFINANCING RISK THAN WE ALL WOULD IMAGINE, BECAUSE COMPANIES HAVE DIDN'T A LOT OF DEBT DEALS AND THE MOST GOVERNMENT-EXPOSED SECTOR IN TERMS OF FISCAL SPENDING. IF WE DO SEE FISCAL AUSTERITY ON THE TABLE, THAT'S ONE AREA WE COULD SEE -- >> NOW REGULATORY -- FRONT PAGE -- >> RIGHT. >> TODAY. BUT DOJ, TALK WITH SCOTT GOTTLIEB ABOUT THAT TODAY, TOO. IF YOU WANT TO DO SOME THING, HEALTH CARE IS THE DAMNDEST PLACE TO BE. A DOCTORS GROUP HERE AND SELF-REFERRING, IMAGES CENTER OVER HERE. IF YOU DON'T WATCH THEM LIKE A HAWK, AND YOU WONDER WHY A LOT OF OUR INFLATION OVER THE YEARS HAS BEEN HEALTH CARE. THE POPULATION, TOO. >> YEAH. I MEAN, I GUESS I JUST WANTED TO MAKE -- >> WHAT'S RIGHT FOR MARGINS AND -- >> CERTAINLY IS. BEEN, HAD A GREAT RIDE. I THINK THE ONE BEAR TAKE I HEAR A LOT AND WANT TO DEBUNK IS JUST THE IDEA THAT THE MARKET IS TOO EXPENSIVE. FOLKS WILL TAKE TODAY'S S&P COMPARE IT TO TEN YEARS 20SHGS YEARS, 30, 40 YEARS AGO. I DON'T THINK THAT MAKES SENSE, BECAUSE THE MARKET TODAY IS SUCH A DIFFERENT ANIMAL. IT'S, YOU KNOW, HALF IT IS INNOVATION AND ASSET COMPANIES. 20 YEARS MORE THAN HALF WAS MANUFACTURING. WE'RE IN A DIFFERENT BALL GAME HERE. YOU CAN'T JUST LOOK AT THE S&P TODAY AND TAKE THAT PE AND COMPARE IT OVER
