>> DATA IS STICKIER WITH
INFLATION. >> THERE IS AN EVERYTHING IS
AWESOME MENTALITY IN THE MARKET RIGHT NOW. >> INVESTORS HAVE BEEN
UNDERINVESTED AND NOW THEY ARE HOLDING THEIR NOSE AND HAVING
TO PLAY CATCH-UP. >> THIS IS "BLOOMBERG
SURVEILLANCE" WITH JONATHAN FERRO, LISA
ABRAMOWICZ, AND IN REORDERING. JONATHAN:
YOUR EQUITY MARKET IS LOWER. KICKING OFF THE MONTH WITH --
THAT STOCK IS DOWN. WE ARE PLUNGING 29%.
THESE ARE THE ISSUES, DISCOVERY MATERIAL WEAKNESS, WRITING DOWN
THE VALUE OF COMPANIES
REQUIRED AND REPLACING LEADERSHIP OVER
IT AND WHY BC. LISA: THE KITCHEN SINK WAS ABOUT LOAN
MARK RESERVES AND EVERYONE SAYS THIS IS BECAUSE THEY CROSSED
THE THRESHOLD. THIS RAISES QUESTIONS OF IF IT
GOES DEEPER THAN THAT WHICH TO BE IS MORE CONCERNING AN SPEAK
SOMETHING ABOUT THE RISKS OF RATES REMAINING HIGHER FOR
LONGER. JONATHAN: ALL THINGS YOU DON'T WANT TO
HEAR FROM, RELATED TO INTERNAL REVIEW AND RESULTING FROM
INEFFECTIVE OVERSIGHT AND MONITORING ACTIVITIES. ANNMARIE:
EVERYONE HAS COME OU
T TALKING ABOUT THIS WAS IT TO THIS BANK
AND NOT TO OTHER BANKS IN THE ABC.
YOU HAVE TO THINK JAY POWELL IS GOING TO BE ON THE HILL TALKING
TO SENATORS. HE IS GOING TO GET ASKED ABOUT
WHAT IS GOING ON UNDER THE BANKING INDUSTRY AND IF THERE
ARE LARGER CONCERNS -- WIDER CONCERNS. JONATHAN: THE LARGEST ROASTED EXPOSURE
COMES FROM $37 BILLION IN APARTMENT LOANS. ALMOST HALF BACKED BY RENT
REGULATED COMPLEXES. THAT IS THE ISSUE FOR THIS NAME.
LISA: THERE IS ANY ISSUE IN NEW YORK
CITY ABOUT HOW MUCH
PEOPLE CAN CHARGE FOR RENT AND WHAT THAT
DOES FOR CERTAIN VALUATIONS AT A TIME WHEN APARTMENTS ARE HELD
BY THAT. RIGHT NOW, THE MARKETS DON'T
CARE. THEY CARE WHITE -- ABOUT NYCB
AND NOTHING ELSE. THIS IS BEING SHRUG UP TO THE
EXTENT THAT A YEAR AGO PEOPLE WOULD HAVE SAID THIS GUY IS
FALLING, WE BETTER HUNKER DOWN. YOU ARE NOT SEEING THAT IN THE
SAME WAY AND THAT TELLS YOU A BIG MESSAGE. JONATHAN:
JP MORGAN CLOSING YESTERDAY AT ANOTHER ALL-TIME HIGH.
YOU TAKE THE MONTH OF FEBRUARY, THIS HAS BEEN
AN ISSUE SINCE
FEBRUARY. REGIONAL BANKS DOWN 3% LAST
MONTH. WE HAVE SEEN BIGGER MOVES THAN
THAT. S&P 500 BANKS OF 4% -- UP 4%.
LISA: PEOPLE ARE NOT LOOKING FOR ANOTHER SHOE TO FALL AND THIS
IS THE QUESTION I HAVE. HAVE WE WORRIED OURSELVES OUT
AND NOW WE DON'T HAVE ANY WORRIES LEFT SO PEOPLE ARE
THROWING IN THE TOWEL AND SAYING I WILL GO WITH IT?
WE WILL HAVE THAT RECORD HIGH ON THE NASDAQ FOR THE FIRST
TIME SINCE 2021, OKAY. JONATHAN: I HAVE NO DOUBT YOU WILL FIND
SOMETHING TO WORRY ABOUT IN TH
E NEXT 60 SECONDS.
EQUITIES ON THE S&P 500 LOOK LIKE THIS, WE ARE SLIGHTLY
NEGATIVE, DOWN BY 0.14%. N.Y.C. BE GETTING HAMMERED 29%.
EUROS LOWER. THERE ROSE ON CPI COME UPSIDE
SURPRISE. 108 -- 1.08 ON EURO-DOLLAR.
MARCHEX OFF WITH STOCKS AT ALL-TIME HIGHS -- MARCH KICKS
OFF WITH STOCKS AT ALL-TIME HIGHS. STEVEN WIETING, CHRISTOPHER
MARINAC, AND GREG VALLIERE AS TRUMP AND BIDEN OFFER VERY
DIFFERENT PERSPECTIVES. STEVE WIETING OF CITIGROUP
EXPECTING THE MARKETS TO CLOSE THE GAP SAYING THIS "THE
EXT
REME DIVERGENCE OF LARGE CAP TECH PROFITS FROM OTHER
INDUSTRIES SHOULD DIMINISH THIS YEAR AND NEXT.
WE WOULD NOT BE SURPRISED IF MAX GAINS IN 2024 WERE CUT IN
HALF ON STRONG INVESTMENT SPENDING AND GREATER
COMPETITION." STEVE JOINS US NOW.
CAN WE BUILD ON WHAT YOU ARE EXPECTING? STEVEN:
THAT IS STILL SUBSTANTIAL GROWTH. INDUSTRIES THAT ARE LITERALLY
BOOMING AND THERE IS PROBABLY A LIMITED NUMBER DOING THAT,
BOOMS YOU WORRY ABOUT ON THE OTHER SIDE, THEY'RE NOT GOING
FROM LARGE GAINS TO DECLINES.
THEY'RE GOING TO BIT OF A
SLOWDOWN. MAGNIFICENT SEVEN, THERE ARE
FOUR COMPANIES BUYING UP EVERY MICROCHIP THEY CAN TO OFFER AI
SERVICES. AN OPEN QUESTION AS TO WHETHER
THESE SERVICES ARE DEFINED DEMAND IN THE ECONOMY FROM
EVERYWHERE, NOT GOING TO BE AS WITH EACH OTHER AND THEY'RE
GOING TO BE ABLE TO BOOM TOGETHER OR WILL THEY COMPETE
AND NARROW DOWN PROFITS? WE ARE NOT WILLING TO GIVE UP
DIVERSIFICATION IN PORTFOLIOS TO THAT ON THAT SINGLE TREND.
A LOT OF OTHER GOOD THINGS ARE HAPPENING.
WE ARE
RAISING OUR ECONOMIC FORECAST AND SEEING INDUSTRIES
THAT HAVE BEEN WEAK FOR THE LAST YEAR AND A HALF BOTTOM OUT
AND BEGIN A RECOVERY. THEY WANT TO DO AS WELL AS MAG
SEVEN. JONATHAN: SMALL, MID-CAPS, TALK TO US
ABOUT THE INDUSTRIES YOU LIKE. STEVE:
YOU CAN GET MID-CAP GROWTH COMPANIES IN THE U.S.
FOR THE SAME VALUATION AS EUROPEAN SHARES. THE U.S. MID-CAPS HAVE GROWN 11% AND
EUROPE HAS GROWN AT 2%. WE WANT TO SWERVE TOWARDS
HEALTH CARE, SOMETHING THAT HAS BEEN OUT OF FAVOR WITH COPD
DRUGS. STORES
HAVE HAD A HISTORIC -- A
LOT OF PEOPLE THINKING WE WILL NEVER DO ANYTHING IN HEALTH
CARE BUT TO LOSE WEIGHT WHICH I WISH I COULD. LISA:
I WAS GOING TO SAY A LOT OF PEOPLE ARE WORKING ON THAT.
I AM CURIOUS ABOUT THE IDEA THAT EVERYONE IS SHIFTING TO
THIS IDEA THAT EARNINGS ARE BETTER THAN EXPECTED, THE
ECONOMY IS BETTER THAN EXPECTED. FISCAL KEEPS SUPPORTING
EVERYBODY. WHY IS IT CASH FUNDS ARE ON FOR
ANOTHER RECORD YEAR? PEOPLE OF THEIR CASH FUNDS AND
THEY ARE PALLING -- PROBABLY MORE MONEY INTO
THE. STEVE:
THE REASON WE ARE NOT MORE OVERWEIGHT WIKIS -- OVERWEIGHT
EQUITIES IS THERE IS GREAT COMPETITION FROM DEALS.
OUR BOND PORTFOLIOS ARE BELOW AVERAGE DURATION.
WE EXPECT TO EARN THAT LONGER THAN THE FED WILL STAY AT 4.5%.
THIS IS GOOD COMPETITION. WE HAVE BEEN BULLISH FOR A
WHILE. WE HAVE SEEN INCREASING BULLISHNESS.
NEW SHORTS IN THE EQUITY MARKETS.
EVERYBODY IS BEARISH IN THE BOND MARKET.
I THINK THERE ARE SOME AREAS THAT HAVE BEEN SO STRONG THAT
WE WANT TO EASE BACK FROM THEM. WHEN
YOU HAVE 80% RETURNS ON THE SOFTWARE, IT IS TIME AGAIN
TO START TO SHIFT TO OTHER AREAS.
THERE IS ROOM FOR STOCKS AND BONDS IN PORTFOLIOS. LISA:
THIS DOESN'T SOUND LIKE A MARKET DRAINED OF LIQUIDITY.
IT SOUNDS LIKE A MARKET FLUSH WITH LIQUIDITY.
WHITE HAS THE FED BEEN INEFFECTIVE AT DRAINING THIS
MARKET OF LIQUIDITY? STEVE: DO YOU HAVE TO?
MUST WE HAVE A NEW RECESSION TO STOP RAPID INFLATION?
WE HAVE ANOTHER TROUBLING INFLATION REPORT THAT IS GOING
TO COME FOR THE MONTH OF FEBRUARY.
IT IS ANOTHE
R REASON FOR EVERYONE TO SAY MAYBE WE ARE
NOT ON THIS DISINFLATION TREND, MAYBE WE ARE GOING TO BE STUCK
HERE. THAT IS POSSIBLE OVER THE SHORT
TERM. THE GOOD NEWS HAS BEEN WE HAVE
BEEN ABLE TO LINEUP A LOT MORE IN A STABLE WAY WITHOUT A
MASSIVE SURGE ON EMPLOYMENT. IF WE GET TOO EXCITED, THERE
ARE GOING TO BE PROBLEMS. JONATHAN:
GROWTH, WHAT DO YOU SEE? STEVE: IT IS WEAKER PIECES OF THE
ECONOMY. WE HAD A HIDDEN RECESSION UNDER
THE SURFACE. IF YOU ARE LOOKING AT GERMANY,
JAPAN, CHINA, MANUFACTURI
NG IN THE U.S., THE REALITY IS IT
CONTRACTED FOR THE YEAR BEHIND US.
TRADE CONTRACTED IN PERCENT THE YEAR THROUGH THE THIRD QUARTER
LAST YEAR. THESE WEAKER COMPONENTS ARE
MOVING INTO A MORE STABLE GROWING PLACE.
PROBABLY NOT ANYTHING V SHAPED, BUT IT IS THESE THINGS IN THE
BOOM. JONATHAN: THERE HAS BEEN A SPREAD BETWEEN
MANUFACTURING AND SERVICES FOR A WHILE.
MANUFACTURING STARTED TO COME UP TO SERVICES.
DOES THAT HAD YOU EXPECT THAT STORY TO COMPLETE? STEVE:
IT WILL COME WITH A DIFFERENT LABOR
MARKET OUTCOMES.
AUTOMATED. THE HEADCOUNT DIFFERENCES ARE
GOING TO BE SUBSTANTIAL. THE SERVICES INDUSTRIES CANNOT
KEEP ADDING JOBS PER MONTH IN THOSE INDUSTRIES.
YOU HAVE SEEN EMPLOYMENT GROWTH FROM TWO YEARS AGO WHEN
SERVICES TURNED BACK ON LIKE A LIGHT SWITCH.
HOSPITALITY, AIRLINES, TRAVEL, ALL OF THESE THINGS INCREDIBLY
LABOR-INTENSIVE AND WE HAD MASSIVE JOB LOSSES TO RECOVER.
NOW WE ARE AT THE POINT WHERE IT WILL SLOW DOWN AND IT DIDN'T
IN JANUARY. IT WAS 53,000 JOBS IN JANUARY
BUT WE SAW SE
ASONAL DISTORTIONS. ALL THESE THINGS ADDED FOR
DIRECTIONS. IT IS GOING TO TAKE A WHILE FOR
THE MARKET TO SORT IT OUT. I THINK WE WILL BE WORRIED
BEFORE WE COME TO GRIPS. ANNMARIE:
MOHAMED EL-ERIAN WAS TALKING ABOUT WHAT HAPPENS IN THE
UNITED STATES MATTERS IN THE WORLD. DO YOU FORESEE U.S.
GROWTH PICKING UP HELPING THE REST OF THE WORLD? STEVE:
IT IS BUT IT IS CHALLENGING BECAUSE THE AMOUNT OF TIME WE
SPENT WITH RESTRICTIVE MONETARY POLICY IS STILL GOING TO BE
LONGER. WE HAVE NOT CHANGED OUR MID
YEAR
ESTIMATE. CONFIDENCE THAT WE ARE GOING TO
HAVE EASING, THE COMMUNICATION OF EASING THROUGH MARKETS.
THE DOLLAR HAS BEEN STRONGER. THAT HELPS AND THAT HURTS.
YIELDS HAVE RISEN AT THE LONG END OF THE CURVE.
THOSE ARE MODEST CHALLENGES WHILE SOME OF THE THINGS ARE
HELPING. CONSUMER DEMAND HAS NOT COLLAPSED AND PRODUCERS HAVE
BEEN UNDERWHELMING. THEY HAVE BEEN SHORT IN TERMS
OF MEETING DEMAND. JONATHAN: IT IS ALWAYS GOOD TO CATCH UP.
STEVEN WIETING THERE OF CITIGROUP.
LOOKING FOR ONE MORE UGLY
EFFICIENT REPORT -- UGLY
INFLATION REPORT. LISA: THAT EVERYONE CAN LOOK
PAST--BECAUSE IT WILL BE ONGOING DISINFLATION.
IT WILL NOT BE AN EVEN RIDE WITH A HIGH ADOPTION. THIS FRENCH CALL CENTER, THEIR
SHARES PLUNGED BECAUSE CLARNA SAID THEY COULD RESPOND TO
THEIR CALLS WITH AI AND THAT WAS WIPING OUT THE INDUSTRY.
THESE ARE THE POCKETS OF DISTRESS I FIND INTERESTING.
JONATHAN: IS THIS ON THE LIST OF THINGS
TO WORRY ABOUT, FRENCH CALL CENTERS? LISA: IF YOU THINK ABOUT IS, HOW MANY
BUSINESSES WILL
BE RENDERED OBSOLETE THAT HAVE NOT BEEN
PRICED YET? JONATHAN: THE BEAR ON WALL STREET IS
HOLDING UP TO FRENCH CALL CENTERS. LISA:
IT IS GOING TO BE MY CLARION CALL. JONATHAN:
YOUR BLOOMBERG BRIEF WITH DANI BURGER. DANI: DOJ IS KEEPING -- QUESTIONING
THE TIMING. REPORTERS AT THE BANKERS
MEETING IN BRAZIL THAT THE PRICE TARGET IS NOT YET IN
SIGHT. IS COMMENT DID APPEAR TO POUR
COLD WATER ON THE EARLIER MOVE THIS MONTH.
ECONOMISTS ARE STILL EXPECTING A NEAR-TERM HIKE IN MARCH OR
APRIL. THE LAST TIM
E THE BOJ RAISED
RATES WAS 2007. THOMAS HORTON IS DIPPING DOWN
WITH A SURPRISE ANNOUNCEMENT. IT IS GOING TO HAPPEN AT THE
END OF SEPTEMBER. HE HAS BEEN THE CENTRAL BANK --
HE REMOVED THE CAP ON THE FRANK IN 2015 AND A DOCTOR THE
WORLD'S MOST INTEREST RATE AND DEALT WITH AT BANKING CRISIS.
DON'T MISS OUR INTERVIEW WITH THOMAS HORTON.
META IS WINDING DOWN ITS NEWS FEATURE IN U.S. AND AUSTRALIA.
IT WILL DRAW SUPPORT FROM ITS NEWS TAB.
PUBLISHERS WITH EXISTING AGREEMENTS WILL STILL BE ABLE
TO POST C
ONTENT UNTIL THEIR DEALS EXPIRE.
LAWMAKERS HAVE BEEN PUSHING FOR META TO COMPENSATE PUBLISHERS
FOR CONTENT BUT THE MAN FOR THE SERVICE HAS DECLINED. JONATHAN: I CAN'T BELIEVE IT HAS BEEN A
DECADE ON THE JOB FOR THOMAS HORTON.
AMAZING HOW QUICKLY TIME FLIES. LISA:
I SAW THAT AND THOUGHT DIDN'T HE JUST GET THERE? JONATHAN: I WANT TO TALK ABOUT APPLE,
REMOVED FROM THE CONVICTION LIST AT GOLDMAN SACHS.
THE STOCK IS DOWN. NEW YORK COMMUNITY BANK SHARES
PLUNGING. >> 500 BASIS POINTS OF RATE
INCREASE H
AS A STRESS TO BE SECTOR.
IF WE LOOK AT THE LOANS COMING THROUGH, WE SEE LESS LOAN
DEMAND AND LESS THAT CAN HURT THE ENVIRONMENT. JONATHAN:
THAT CONVERSATION IS COMING UP NEXT.
LIVE FROM NEW YORK CITY THIS MORNING, GOOD MORNING. ♪ JONATHAN:
FOUR MONTHS OF GAINS ON THIS AND BE 500.
LIVE FROM NEW YORK CITY. WE ARE DOWN ON THE S&P.
NYCB SHARES PLUNGING ONCE AGAIN. >> FOR INVESTORS, GROWTH IN
BANKS HAS BEEN TAINTED WITH THE SILICON VALLEY BANK FAILURE. TALKING TO INVESTORS, DOING
CONFERENCES, THEIR
NERVOUS ABOUT GROWTH.
500 BASIS POINTS OF RATE INCREASE HAS STRESSED THE
SECTOR. IF WITH THE GET THE LOANS
COMING THROUGH, WE SEE LESS DEMAND. JONATHAN:
NEW YORK COMMUNITY BANK SHARES PLUMMETING, THE COMPANY AND
THAT SICK MATERIAL WEAKNESSES AND THAT SICK MATERIAL
WEAKNESSES IN ITS LOAN REVIEW PROCESS.
THERE BANK COULD BE SWAPPING CEOS AND EXPECTS TO VISIT A
DEADLINE FOR FILING AN ANNUAL REPORT. CHRIS MARINAC SAYING THIS,
"DIRECTOR CHANGE ARE PART OF THE EARLY REPAIRS AT N.Y.C. BE.
INVESTORS SHO
ULD BE PLEASED. TWO DIRECTORS HAVE RESIGNED, WE
SEE THIS AS A HEALTHY CHANGE THAT SHOULD BUILD CONFIDENCE."
CHRIS JOINS US RIGHT NOW. I ASSUME YOU BELIEVE THE STOCK
SHOULD BE UP AND NOT DOWN 30%? CHRIS: THAT IS RIGHT OR AT LEAST
CREATING FLAT. BOOK VALUE WILL ONLY CHANGE BY
THREE PENNIES GIVEN THE FOURTH-QUARTER CHANGES.
JONATHAN: WHY ARE YOU SO CONFIDENT THAT
ARE NOT ANYMORE MONSTERS UNDER THE BED AT NYCB? CHRIS:
THE COMPANY'S ISSUES HAVE TO DO WITH STRESS TESTING.
THEY HAVE TO STRESS TEST FOR
HIGHER INTEREST RATES.
THERE IS MORE OF THAT TO GO BUT THE COMPANY HAS THE EARNINGS TO
WORK THROUGH THIS. THIS IS NOT AN EARNINGS ISSUE.
THE CREDIT ISSUE IS STRESS TESTING AND NOT HAVING DONE IT
SOONER. THE PRIOR MANAGEMENT TEAM HAD
TO GO. WE HAD TO HAVE THE CHANGE IN
ORDER TO HAVE A CONFIDENCE CHANGE.
THE LARGEST SHAREHOLDER IS TAKING CHARGE AND MAKING SWIFT
CHANGES. YOU HAVE UNHAPPY BOARD MEMBERS
THAT HAVE LEFT AND THAT IS FINE. THIS IS HEALTHY TO GET THE
COMPANY WHERE IT NEEDS TO GO. THEY ARE
NOW $115 BILLION.
THEY HAVE TO BE PART OF THE NEW WORLD ORDER.
THE REGULATORY WORLD IS CHANGING BUT YOU HAVE TO ADAPT
AND YOU CANNOT SIT STILL. LISA: YOU SAY THERE ARE A COUPLE OF
UNHAPPY BOARD MEMBERS. THAT RAISED A RED FLAG IN MY
VIEW. THE DIRECTOR OF THE BOARD RESIGNED.
IN THE RESIGNATION LETTER HE SAID HE DID NOT SUPPORT ANOTHER
-- DEMELLO'S APPOINTMENT TO THE BOARD. WHY? CHRIS: HE DID NOT WANT TO SEE THE CEO
CHANGE. THAT IS HIS PREROGATIVE. I THINK YOU ARE GOING TO SEE
THE COMPANY MOVE FOR
WARD WITH ANOTHER DIRECTOR AND CONTINUE
TO MAKE CHANGES VERY QUICKLY. YOU HAVE ONE QUARTERBACK AT THE
COMPANY, YOU CANNOT HAVE TWO. YOU HAVE TO TAKE QUARTERBACK
NUMBER ONE AND RUN WITH HIM AND MOVE FORWARD.
THE STORY IS GOING TO TRANSITION TO RECOGNIZING
CREDIT RISK AND FAST TRACKING A LOT OF THE CHANGES TO DIVERSIFY
THE PORTFOLIO. THEY HAVE HAD TOO MANY
MULTIFAMILY LOANS AND REAL ESTATE.
THERE WILL BE MORE BALANCED COMPANY AND THEY WILL MAKE MORE
MONEY WITH WILL CREATE BOOK VALUE AND GET THE ST
OCK PRICE
MOVING AGAIN. THAT IS A SHORT-TERM REACTION
THAT WILL CHANGE. LISA: THE MAJORITY OF PEOPLE WAKING
UP IN MARKETS DON'T CARE ABOUT NEW YORK COMMUNITY BANK OR THAT
COMPANY BUT THEY CARE IF THIS IS A HARBINGER OF MORE WEAKNESS
TO COME, IF THIS MEANS YIELDS REMAINING HARD FOR LONGER OR
CREATING CRACKS ON THE BALANCE SHEETS OF BANKS THAT HAVE BEEN
PUNISHED BUT CAN'T CLIMB OUT OF IT.
HOW WOULD YOU ARGUE THAT THIS TRULY IS IDIOSYNCRATIC AND NOT
A REGULATORY CAPITAL ISSUE? CHRIS:
EVERY BANK HAS
CREDIT RISK AND IF YOU LOOK AT THE FILINGS WE
SAW THIS WEEK AND LAST WEEK WE ARE SEEING INCREASES IN THE
CRITICIZED ASSETS. REALLY CRITICIZE.
BACK TO THE STRESS TEST ISSUE, BANKS RECOGNIZING THE RISK.
WHAT INVESTORS DON'T SEE IS THAT LEVERAGE IS 60% TODAY
INSTEAD OF 95% IN 2008. YOU ARE NOT GOING TO LOSE MONEY
AT NEW YORK COMMUNITY LIKE YOU WOULD HAVE BECAUSE LEVERAGE WAS
HIGHER. YOU WILL HAVE SOME LOSSES, SOME
NEED TO BUILD RESERVES. THEY HAVE DONE A BIG PIECE OF
THAT. THE WHOLE INDUSTRY IS GO
ING TO
CONTINUE TO MARCH FORWARD AND BE MORE PROFITABLE THAN FOLKS
UNDERSTAND. MOST BANKS ARE ASSET SENSITIVE
WHICH MEANS HIGHER ASSET RATES FOR LONGER BENEFITS MOST MARGIN.
MOST COMPANIES SEE AN INCREASE TO EARNINGS IF INTEREST RATES
ARE HIGH. IN A LOT OF RESPECTS, THE FED
CUTTING RATES TOO QUICKLY IS NOT A GREAT THING FOR THE
INDUSTRY. IT IS A PERCEPTION ISSUE. LISA:
I WONDER WHEN THIS THESIS COMES TRUE.
WE ARE LOOKING AT AN INVERTED YIELD CURVE WHICH MAKES IT
CHALLENGING. WE ARE ALSO SEEING R
EAL
CONCERNS ABOUT LOANS NOT GETTING LIQUIDATED BECAUSE IT
ISN'T A MARKET FOR THEM. WHEN DOES THE PAGE CHANGE
DESPITE PROFITABILITY RIGHT NOW? CHRIS:
I THINK THE BANKS ARE IN BETTER SHAPE THAN PEOPLE REALIZE.
THERE IS ENORMOUS LIQUIDITY WHETHER IT IS PRIVATE CREDIT.
IT IS BETTER THAN PERCEIVED. THE CHALLENGE BANKS HAVE ON
SELLING LOANS OR LIQUIDATING ASSETS IS THEY DON'T WANT TO
TAKE BIG HAIRCUTS. THEY WOULD LIKE TO TAKE TIME.
SOMETIMES THEY CAN DO THAT, OTHER TIMES THEY HAVE TO TAKE
ACTION. IN
NYCB'S CASE, YOU WILL SEE
THEM TAKE ACTION QUICKLY. THE 10K WILL BE RESOLVED WITHIN
14 DAYS. A LOT OF THAT ARE CHANGES THAT
HAVE TO HAPPEN. WE HAVE SEEN OTHER BANKS OF
INTERNAL CONTROLS AND LARGE COMPANIES LIKE JP MORGAN AND
WELLS FARGO. THEY HAVE MADE THEIR CHANGES
AND MOVE FORWARD. ANNMARIE: THE UNDERLYING ISSUE IS
INTEREST RATES. NYCB, POUR STRESS TESTING AND
HIGHER INTEREST RATES, WHO ELSE IS HAVING POOR STRESS TESTING?
SHOULD WE EXPECT THIS TO HAPPEN EVERY FEW MONTHS? CHRIS: NYCB IS UNIQUE
IN TERMS OF
HAVING CROSSED OVER $100 BILLION WITH AN FDIC
TRANSACTION , NOT PREPARED TO DO STRESS TESTING THIS YEAR.
THAT IS IDIOSYNCRATIC. THE REST OF THE INDUSTRY IS ALL
OVER THIS. THE ISSUE -- SILICON VALLEY
BANK ISSUE WAS ABOUT SECURITY IS UNDERWATER AND DEPOSITS OUT
OF WHACK BECAUSE THEY HAD LARGE PICTURE CAPITAL DEPOSITS.
THOSE DEPOSITS ARE GONE. THE INDUSTRY IS IN MUCH BETTER
POSITION FROM ANY UNINSURED DEPOSIT STANDPOINT.
NYCB HAS EXCELLENT DEPOSIT FLOWS THE PAST MONTH.
DEPOSITS HAVE BEE
N STABLE, THE COMPANY IS GOING TO MAKE MONEY
THIS QUARTER. IT IS UNFORTUNATELY HAVE TO
MAKE THESE BOARD CHANGES NOW. IT IS GOING TO BE FOR THE LONG
RUN MUCH BETTER TO DO THIS HOUSECLEANING TODAY. JONATHAN:
OUTSIDE OF NYCB, ISN'T THE MARKET COMING YOUR WAY?
JP MORGAN CLOSING AT AN ALL-TIME HIGH.
MONTHLY GAINS ON THE S&P 500 LAST MONTH.
THE REGIONAL BANKS, LOWER THROUGH FEBRUARY BUT NOTHING
DRASTIC A GIVEN THE SINGLE LAMP. IS THE MARKET COMING OUR WAY? CHRIS:
I THINK SO AND HE WILL SEE THE TANGIBL
E KEEPS GROWING FOR
COMPANIES. WE WILL PROBABLY SEE MARKETS GO
UP AGAIN ON HIGHER RATES AT THE END OF MARCH BUT WE CAN HANDLE
THAT. MOST BANKS ARE MANAGING EXPENSES WELL AND AT THE END OF
THE DAY, THE NET CHARGE-OFF COMPANIES ARE REPORTING OUR
MODEST. WE ARE WORRIED ABOUT STRESS TESTING BUT IGNORE THE
FACT THAT CHARGE-OFFS REMAIN LOW. JONATHAN:
NOTHING TO SEE HERE. ULTIMATELY MAKING THE POINT
HERE THAT WE SHOULD NOT BE DOWN 30% IF THIS IS TRULY THAT
KITCHEN SINK MOMENT. LISA: THE SECOND ONE.
THE
Y HAD THIS BEFORE, IT WAS A KITCHEN SINK MOMENT BEFORE.
WHEN YOU KITCHEN SINK SOMETHING, THERE IS NOT
ANYTHING LEFT TO KITCHEN SINK AGAIN.
THERE IS NERVOUSNESS ABOUT WHAT WE DON'T KNOW IN BANKS, THE
RISKS WE HAVEN'T FULLY PRICED. THAT IS EVIDENT IN ONE NAME.
JONATHAN: I DON'T WANT TO SINK VOLUME
THREE ANYTIME SOON. PRESIDENT BIDEN AND DONALD
TRUMP OFFERING DIFFERENT VISIONS ON THE SOUTHERN BORDER.
WE WILL BE CATCHING UP WITH CHRIS VALLIERE.
THAT CONVERSATION JUST AROUND THE CORNER. EQUITY FUTURE
S ON THE S&P 500
DOWN .1%. JONATHAN:
FOUR MONTHS OF GAINS ON THE S&P 500 HEADING TOWARD A SECOND
CONSECUTIVE WEEK OF GAINS ON THIS AT THE END NASDAQ.
THE NASDAQ GOING NOWHERE. THE S&P 500 DOWN AROUND .1%.
YESTERDAY, PCE COMES OUT IN LINE. YIELDS CAME BACK LOWER, DOWN
FROM THE HIGHS OF THE YEAR ON A TWO YEAR, DOWN TO 459 -- 4.59.
LISA: IT IS A TAIL RISK, THINGS TO
WORRY ABOUT, THE LIST GOT SHORTER FOR THE MOMENT.
PEOPLE THOUGHT MAYBE WE WOULD SEE AN UPSIDE SURPRISE TO
INFLATION AND THAT WE COULD
WAIT ABOUT STICKY INFLATION, A
RUNAWAY SENSE OF THE ECONOMY WHERE YOU DON'T GET THE
IMMACULATE DISINFLATION. IT CAME IN LINE, THE TALE RISK
TAKING OFF THE TABLE, BACK TO THE BASIS. JONATHAN:
LET'S TALK ABOUT A TURNAROUND FOR DOLLAR-YEN. FIRST CLOSE SUB POINT -- SUB
150. BACK UP .3%. A WEAKER JAPANESE HERE.
WORK WITH ME, WE ARE NOT YET IN A POSITION TO FORESEE THE
ACHIEVEMENT OF A SUSTAINABLE INFLATION TARGET.
THE GOVERNOR POURING FREEZING COLD WATER ON ANY IMMINENT RATE
HIKE. LISA: SOMEONE WHO'S
IS NOT FAMILIAR
WITH THE STORY SAYS I DON'T HEAR ANYTHING BUT BLAH BLAH.
ON ONE HAND WE MIGHT BE GETTING CLOSER TO WHAT LEVEL THE BANK
OF JAPAN WAS LOOKING FOR YESTERDAY AND THEN YOU COME IN
SAYING NOT YET AND THIS IS ENOUGH TO POUR COLD WATER.
THIS IS THE REASON WE ARE NOTICING MASSIVE MOVES.
JONATHAN: THIS IS A POLICY EFFORT DECADES
IN THE MAKING ROUTE. THEY'RE NOT GOING TO MOVE LIKE
CHAIRMAN POWELL LIKE IT'S GOING TO DO A NEWS CONFERENCE AND
SAID LET'S GO. YOU ARE GOING TO GET A SURPRISE
FOR
THE BOJ BUT AT THE MOMENT THEY'RE NOT WILLING. LISA:
I AM OLD ENOUGH TO REMEMBER THIS WAS ON THE TALE RISK.
THIS WAS ONE OF THE WORRIES. I DON'T THINK WE CAN REMOVE
JAPAN FROM THE LIST OF WORRIES. JONATHAN:
YOU CAN CLICK THAT AND PLAY IT OUT LATER THIS YEAR.
WE WILL SEE IF THAT SHOULD HAVE BEEN ON THE LIST. DOLLAR-WON
END, 150. CHINA'S FACTORY ACTIVITY
SHRINKING FOR THE FIFTH STRAIGHT MONTH, ANOTHER SIGN OF
WEAKNESS. THE COUNTRY ALSO SEEING A
CONTINUED SLUMP IN THE HOUSING MARKET.
THE VALUE OF
NEW-HOME SALES FROM THE BIGGEST REAL ESTATE
COMPANIES SLIGHTING 60% FROM A YEAR AGO.
FEBRUARY SALES WERE DOWN NEARLY 21% FROM JANUARY.
THOSE NUMBERS ARE UGLY. LISA: A LOT OF PEOPLE SEEM TO BE
COMING ON THE SHOW AND GETTING BULLISH ON CHINESE EQUITIES.
MICHAEL FROM BANK OF AMERICA SAYING CHINESE STOCK FUNDS SAW
THEIR LARGEST WEEKLY OUTFLOW IN THE LAST WEEK.
TO BE PEOPLE VIEWING IT AS A TRADE SEE IT AS REACHING THE
END AT A TIME WHEN THE DATA IS NOT TURNING AROUND THAT MUCH.
JONATHAN: THE MARKET W
AS UP 9% IN
FEBRUARY. THAT IS QUITE A SQUEEZE. LISA:
THIS ISN'T PEOPLE RUNNING INTO THAT NATION'S STOCK MARKET
SAYING LET'S GO, THIS IS PEOPLE SAYING HOW BAD COULD IT
POSSIBLY GET? IT SEEMS TO BE WHERE IT IS
FLUCTUATING. JONATHAN: THAT HASN'T HAD THAT WARM AND
COZY FEELING FOR INTERNATIONAL INVESTORS.
FED PRESIDENT WILLIAMS SAYING -- THE SAN FRANCISCO FED
PRESIDENT TELLING BLOOMBERG "THERE IS NO IMMINENT RISK TO
THE ECONOMY." MARCH IS A BUSY MONTH FOR
CENTRAL BANKS. BANK OF JAPAN'S STABLE TARGET
MIGHT NOT BE IN SIGHT. THE ECB IS GOING TO DECIDE NEXT
WEEK ON THE SEVENTH AND THE FED DECIDES ON MARCH 20.
LET'S SPIN THE WHEEL. WHICH ONE DO YOU LIKE?
WHICH ONE ARE YOU FOCUSED ON COMING ECB, BOJ, FEDERAL
RESERVE. LISA: I WOULD SAY MORE ECB.
THE FEDERAL RESERVE WE HEAR A LOT FROM.
THE ECB HAS A MORE DIFFICULT NUT TO CRACK GIVEN THAT
INFLATION CAME IN HOTTER THAN EXPECTED AND COMPARE THE
MODELED COUNTRY TO COUNTRY. THEY HAVE A DIFFERENT MANDATE
WHERE THERE IS ONE NATION FRACTURED.
YOU HAVE A L
OT OF NATIONS WITH DIFFERENT DIVISION OUTLOOKS.
THAT IS MUCH MORE CHALLENGING AT A TIME THEY ARE FACING
WEAKNESS. JONATHAN: THE GROWTH PROFILE IS
DRASTICALLY DIFFERENT AND HAS BEEN.
KALLUM PICKERING IS GOING TO JOIN US.
PRESIDENT BIDEN AND DONALD TRUMP CLASHING ON THE SOUTHERN
BORDER. >> THIS IS A JOE BIDEN INVASION.
THREE YEARS AGO WE HAD THE MOST SECURE BORDER IN HISTORY.
PEOPLE WERE NOT COMING BECAUSE THEY KNEW THEY WERE NOT GOING
TO GET IN. PRES. BIDEN: HERE'S WHAT I WOULD SAY TO MR.
TRUMP,
INSTEAD OF TELLING MEMBERS OF CONGRESS TO BLOCK
THIS LEGISLATION, JOIN ME OR I WILL JOIN YOU IN TELLING
CONGRESS TO PASS THIS BIPARTISAN BORDER SECURITY
BUILT. JONATHAN: PRESIDENT BIDEN CHALLENGING
TRUMP TO MAKE PROGRESS ON IMMIGRATION AFTER STALLING A
PLAN AND A CONGRESS. THE BIDEN ADMINISTRATION IS
STILL INSTALLING AN EXECUTIVE ORDER. GREG VALLIERE JOINS US.
THAT IS THE TALK. WHAT POLICY CHANGE ARE YOU
EXPECTING SOON? GREG: PROBABLY NONE.
IT IS UNLIKELY WE CAN GET BIDEN AND TRUMP TOGETHER ON T
HIS
ISSUE. THERE IS A DESPERATELY NEEDED
TO AID UKRAINE. MATT IS A DRIVER FOR MANY
PEOPLE ON CAPITOL HILL -- THAT IS A DRIVER FOR MEDICARE BLOOD
CAPITOL HILL. I WOULD SAY THERE IS A ONE IN
FOUR CHANCE WE GET IMMIGRATION LEGISLATION REVIVAL. ANNMARIE:
WHAT ABOUT AN EXECUTIVE ORDER? WILL BIDEN BE PUSHED INTO DOING
SOMETHING BEFORE THE ELECTION? GREG: HE NEEDS TO DO SOMETHING.
THIS PERCEPTION BY THE PUBLIC THAT BIDEN DOES NOT HAVE A PLAN
HAS HURT HIM. IF HE LOSES THE ELECTION, HE
MAY LOSE BECAUSE O
F IMMIGRATION MORE THAN ANY OTHER ISSUE.
HE HAS TO DO SOMETHING. I WOULD NOT RULE OUT AN
EXECUTIVE ORDER FAIRLY SOON. ANNMARIE::
SHOWED -- BLAMED BIDEN BUT WE ARE SEEING ANY UPTAKE OF
INDIVIDUALS BLAMING REPUBLICANS AS WELL, THOSE IN CONGRESS AND
THE TRUMP ADMINISTRATION. DO YOU THINK BIDEN IS ABLE TO
TURN THIS AROUND THE WAY TOM'S WAS IT DID AND PUSH IT TO
REPUBLICANS FOR NOT MEETING HIM ON A DEAL? GREG: HE WILL TRY. I READ A LOT ABOUT HARRY TRUMAN
WHO WON A SURPRISE REELECTION BASED ON FIGHTIN
G AGAINST A
DO-NOTHING CONGRESS. IF YOU SAY -- IF YOU SEE JOE
BIDEN SAY IT IS A DO-NOTHING CONGRESS DAY AFTER DAY, IT
MIGHT SINK IN. LISA: WHAT CAN BIDEN DO
SINGLE-HANDEDLY VERSUS DOES HE NEED CONGRESSIONAL SIGNOFF IN
TERMS OF SOME PREFERENTIAL -- PRESIDENTIAL ORDER TO TAKE CARE
OF SOMETHING ON THE BORDER? GREG:
THERE IS NOT MUCH AND NOT MUCH SHE CAN DO FOR UKRAINE OR
ISRAEL OR TAIWAN. THOSE ARE GRIDLOCKED.
I THINK THERE IS WOULD YOU BE A BUDGET BILL FINALLY, THIS LONG
TORTUROUS FIGHT MAY COME T
O A CLOSE BECAUSE APRIL 30 IS
CRUCIAL. THAT WOULD REQUIRE A NEW
EXTENSION. ON APRIL 30, WE HAVE AUTOMATIC
ACROSS-THE-BOARD SPENDING CUTS. NOBODY WANTS THAT.
NO DEMOCRATS WANT THAT. LISA: THIS IS PEOPLE EXPECTED THIS
KICKING THE CAN DOWN THE ROAD. DOES IT GIVE YOU ANY HOPE WE
ARE GOING TO KEEP KICKING THE CAN DOWN THE ROAD WHICH IS THE
BEST CASE OUTCOME WE CAN HAVE IN WASHINGTON, D.C.? GREG:
IT IS THE BEST CASE. WE WILL KICK THE CAN AGAIN.
WE HAVE NO DEADLINES OF MARCH 8 AND MARCH 22.
I THINK THE
Y WILL BE KICKED DOWN THE ROAD.
IF WE GET TO SUMMER AND THEY SAY WE WILL DO A BILL FOR THE
REST OF THE FISCAL YEAR, THAT COULD HAPPEN AND THEY WILL
START ALL OVER AGAIN. JONATHAN: LET'S TALK ABOUT MONEY.
BIDEN HAS A LOT OF PROBLEMS AND MONEY IS NOT ONE.
I AM TALKING ABOUT CAMPAIGN FUNDRAISING.
GROUPS ALLIED WITH BIDEN HAVE COMMITTED TO SPENDING MORE THAN
$700 MILLION TO HELP THEM DEFEAT DONALD TRUMP.
HOW IMPORTANT IS THAT GOING TO BE? GREG: IT IS HUGE.
IT IS A SLEEPER ISSUE. BIDEN WAS IN CALIFOR
NIA RAISING
MORE MONEY. THERE WILL BE NO SHORTAGE OF
FUNDS. AT SOME POINT MONEY LOSES ITS
CLOUT. RIGHT NOW, THE FINANCIAL ADVANTAGE FOR WRITING IS A
SIGNIFICANT. IT IS ONE OF MANY REASONS WHY
IT IS TOO EARLY TO COUNT HIM OUT. ANNMARIE: WHEN YOU LOOK AT THE OTHER
SIDE, THE TRUMP MONEY, A LOT OF ISSUES BECAUSE HE IS USING
CAMPAIGN DONATIONS TO PAY FOR LEGAL BILLS.
WHAT KIND OF CASH STRAPPED IS HE GOING TO BE IN THIS SUMMER?
GREG: YOU WOULD THINK IT WOULD BE
CONSIDERABLE. NIKKI HALEY HAS FIRED AWAY
ON
THIS ISSUE WITHOUT MANY RESULTS. I WOULD SAY BY SUMMER THEY
LEGAL NIGHTMARE FOR TRUMP IS GOING TO BE DRAINING FINANCES
QUITE A BIT. IT IS A BIG ISSUE. LISA:
ONE OF MY OTHER WORRIES RIGHT NOW WHICH IS WHAT PEMCO IS
TALKING ABOUT, THE DEFICIT. THE FACT THAT WE ARE FACING OFF
WITH BOTH CANDIDATES NOT WILLING TO CUT THE DEFICIT.
EVERYONE IS LIKE WE KNOW THIS. THERE IS THIS FEELING THERE HAS
TO BE A HIGHER TERM PREMIUM IN THE SPACE TO OFFSET THE RISK
THAT SEEMS TO BE EVIDENT. THEY SAY IS STARTING
TO TAKE
HOLD. HOW MUCH DOES THE BOND MARKET
HAD TO SELLOFF BEFORE WASHINGTON TAKES NOTICE? GREG: YOU TALK TO PEOPLE ON CAPITOL
HILL AND THEY DON'T WANT TO ADDRESS IT.
THEY CANNOT FIGURE OUT WHAT THE PRESCRIPTIONS MIGHT BE IN TERMS
OF SPENDING CUTS OR TAX INCREASES.
THE YEAR THAT ENDED SEPTEMBER 30 WE HAD A DEFICIT OF $1.8
TRILLION WITH A GOOD ECONOMY. I FORBID HE ECONOMY COULD BE
SOFTER, IT COULD GO HIGHER THAN THAT.
I DON'T SENSE ANY URGENCY ON CAPITOL HILL. JONATHAN:
I AM NOT SURE WHEN YOU WI
LL GET SOME.
THAT WILL COME DOWN TO WHETHER THIS BOND MARKET ACTUALLY SELLS
OFF IN THE FASHION THAT WOULD REQUIRE SOME ACTION.
THAT IS WHERE THE PRESSURE NEEDS TO COME FROM.
HAVE NOT SEEN IT YET. LISA: WE SAW A PIMCO PAPER ON THIS
AND THERE ARE A LOT OF PAPERS ON THIS.
THEY ARE SAYING THIS COULD LEAD TO A HIGHER STRUCTURAL TERM
PREMIUM. YIELDS REMAIN HIGHER REGARDLESS
OF INFLATION. THIS COULD AFFECT EVERYBODY IN
THE SPACE THEY ARE BUYING INTO. THIS HAS BEEN THE PERSON WHO
CRIES WOLF TIME AND TIM
E AGAIN. HAS SOMETHING SHIFTED?
EVERYONE I TALK TO SAYS MAY BE AND OTHER PEOPLE SAY IT IS THE
YIELD. JONATHAN: YOU HAVE MADE ME SMILE SO MUCH,
HOW LONG IS THIS LIST AND IS EUROPEAN CHOCOLATE ON IT? LISA:
IT ACTUALLY IS. ALSO THE POLICIES BEHIND IT.
IT RAISES A NEW SPECTER OF RISK IN FISCAL POLICY AND TARIFFS
ARE IMPORTANT, ALSO. JONATHAN: I WAS TRYING TO WORK OUT OF THE
CHOCOLATE-FISCAL POLICY CONNECTION. LISA:
CHOCOLATE IS IMPORTANT AND IF YOU START HAVING BEST CHOCOLATE
-- JONATHAN: SHRINK SOL
UTION. HUGE DEAL.
IS THE PRESIDENT GOING TO TALK ABOUT THIS IN THE STATE OF THE
UNION? ANNMARIE: THEY WILL BE DEBATING HOW MUCH
TIME THEY SHOULD SPEND ON TRUMPFLATION -- SHR INKFLATION.
IF THE PRESIDENT TALKS ABOUT IT, HE IS HIM ON THE ISSUE FOR
CONSUMERS WHICH REMINDS THEM THAT THERE IS INFLATION AND IT
WASN'T HERE PRIOR. JONATHAN: THIS ISSUE HAS BEEN AROUND FOR
DECADES. WHY ALL OF A SUDDEN ARE WE
JUMPING ON THIS BANDWAGON? LISA: CERTAIN THINGS WERE NOT
STICKING SO LET'S TRY THIS ONE. JONATHAN:
THROW IT AT THE WALL.
LISA: WHEN YOU GET A BOX OF CEREAL.
JONATHAN: CATTLE FEED FOR HUMANS. LISA:
IT LIKE A QUARTER FIELD AND THEY SAY THEY WANT MORE SPACE
TO CUSHION IT. IT IS FILLED THE LESS. ANNMARIE:
COMPANIES HAVE BEEN DOING THIS FOR DECADES.
IF THEIR INPUT COSTS ARE HIGHER, THEY HAVE TO FIGURE OUT
A WAY TO RAISE COSTS OR PUT LESS IN SO THEY CAN MAKE MONEY.
JONATHAN: EQUITY FUTURES -.1%. LET'S GIVE ANY UPDATE ELSEWHERE.
HERE IS THE BLOOMBERG BRIEF. DANI:
LEXIE NAVALNY WILL BE BURNED TODAY
IN MOSCOW.
POLICE HAVE BEEN DEPLOYED NEAR THE CHURCH. ALEXEI NAVALNY DIED AFTER
FALLING ILL IN A REMOTE MAXIMUM-SECURITY PRISON. DELL HEADED FOR BIGGEST GAIN IN
MONTHS FOLLOWING A REPORT THAT BEAT EXPECTATIONS.
TAGAMET FOR AI SERVERS IS DRIVING THE MOMENTUM.
THE STOCK HAS MORE THAN DOUBLED. ELON MUSK IS SUING OPENAI AND
THE CEO, HE ALLEGEDLY BREACHED THE AGREEMENT BY PUTTING PROFIT
AHEAD OF BENEFITING HUMILITY -- HUMANITY.
THE RELATIONSHIP WITH MICROSOFT UNDERMINES THE ORIGINAL MISSION
OF CREATI
NG OPEN-SOURCE TECHNOLOGY THAT WOULD NOT BE
SUBJECT TO CORPORATE PRIORITIES. MUSK WAS ONE OF THE EARLY
FUNDERS. THAT IS YOUR BLOOMBERG BRIEF.
JONATHAN: THE FED -- >> YOU EXPECT
INTEREST RATES LATER THIS YEAR? >> WE ARE READY TO MAKE MOVES
AND ADJUST AS THE DATA DEMANDS IS TO GIVE. >> IT WILL PROBABLY BE
APPROPRIATE TO START TO REDUCE RATES IN DECEMBER TIME.
JONATHAN: THAT CONVERSATION COMING UP
NEXT. LIVE FROM NEW YORK CITY, THIS
IS BLOOMBERG. ♪ JONATHAN:
EQUITY FUTURES ON HIS 500 NEGATIVE BUT R
ECOVERING.
WE ARE DOWN BY 0.07%. THE FED IN NO RUSH TO CUT RATES.
>> I EXPECT US TO CUT INTEREST RATES LATER THIS YEAR.
RIGHT NOW, THERE IS NOT A SENSE OF URGENCY. >> WE WANT TO AVOID HOLDING ON
ALL THE WAY TO 2%. WE ARE READY TO MAKE MOVES AND
ADJUST AS THE DATA DEMANDS US TO DO. >> IT WILL PROBABLY BE
APPROPRIATE IF THINGS GO AS WE EXPECT TO SEE US TO START TO
REDUCE RATES IN THE SUMMERTIME. JONATHAN:
FED SPEAKERS WAITING ON THE DATA, PUSHING BACK CUTS UNTIL
LATER THIS YEAR. INFLATION DATA RAI
SING AND A,
THE FASTEST PACE IN A YEAR. THE PAYROLLS REPORT DUE LATER
TODAY. KALLUM PICKERING SEES THE FED
CUTTING FOUR TIMES THIS YEAR STARTING IN JUNE WITH THE
ECONOMY HEADING FOR A SLOWING DOWN. BERENBERG'S KALLUM PICKERING.
THE GOOD NEWS IS WE DID NOT SEE BAD NEWS. KALLUM:
YES, MORE EVIDENCE THAT THE U.S. ECONOMY IS HUMMING ALONG
NICELY, MAY SLOW IN THE FIRST HALF OF THE YEAR.
IT LOOKS LIKE IT WON'T WIND BUDDHIST SLOWDOWN. JONATHAN:
WE HAVE SEEN A STORY FROM THE FEDERAL RESERVE.
HOW SYNCHRON
IZE DO YOU THINK BECAUSE THERE GOING TO BE?
KALLUM: THE RISK IS THAT THE FED GOES
LESS RATHER THAN MORE. WE WERE DISCUSSING WHAT THIS
QUESTION AROUND THE YIELD CURVE BUT NO EFFICIENT MEANS.
WE HAVE TO ASK WHICH PRESS IS WRONG, THE 10 YEAR THE SHORT
END? SHORT AND IS 150 BASIS POINTS
TOO HARD BUT YOU NEED MORE OF THE LONG END.
IT IS POSSIBLE WE ARE ADJUSTING HERE TO THE HIGHER GROWTH,
HIGHER INFLATION ENVIRONMENT. WE ARE HAVING A LITTLE BIT OF A
PROBLEM HERE AND CENTRAL BANKS ARE HAVING IT, UNDER
STANDING
WHAT IS THE NORMAL RATE OF REAL GDP, WHERE WILL IT SETTLE, AND
WHAT INTEREST RATE YOU NEED TO BALANCE THE ECONOMY.
ALL OF THE UPSIDE RISKS IN THE U.S.
WHO WOULD HAVE BEEN OPEN FOR SEEM TO BE PLAYING OUT ON
UNLIMITED GROWTH, PRODUCTIVITY GROWTH, DEMAND, THE GOVERNMENT
GETTING AWAY WITH FISCAL STIMULUS. IS A NICE STORY. LISA:
GOOD FISCAL STIMULUS, I KEEP THINKING ABOUT MONEY GOING INTO
THIS MARKET. WHAT IS THE U.S. DOING THAT EUROPE IS NOT THAT
IS MAKING IT FLUSH WITH CASH AND SUPPORTING
GROWTH? KALLUM:
WHAT CAN THE U.S. DO THAT NO ONE ELSE CAN DO?
WE ARE IN A 7% DEFICIT. YOU SAY WHAT YOU SPEND THAT
DEFICIT ON? 10% RISE YEAR-OVER-YEAR IN
INVESTMENT GROWTH. FISCAL POLICY IS TO TOWARD
BOOSTING THE ASSETS OF THE COUNTRY, BOOSTING SUPPLY AND
ADDING TO LONG-RUN POTENTIAL. MITCHELL PHYSICAL ACTS ARE NOT
SIMPLY JUST KNOCKING DOWN OLD COAL-FIRED POWER STATIONS AND
BUILDING NEW GREENER, BUT IT JUST ADDS TO THE DEBT. YOU ARE RIGHT AT THE TIME WHEN
YOU HAVE A NORMALIZATION IN DEMAND GROWTH
. LISA: ARE YOU MAKING THE ARGUMENT FOR
COULD SEE THIS GROWTH AND FLUSH OF LIQUIDITY WITHOUT ANY
INFLATIONARY SURGE? KALLUM: U.S. SEEMS TO BE MATCHING DEMAND AND
SUPPLY BETTER THAN A COUNTRY AT THE MOMENT.
BETTER THAN EUROPE BECAUSE WE ARE MORE EXPOSED TO THE GLOBAL
SUPPLY SHOCKS. WHILST WE HAVE THE HOPE THAT
THIS CAN CONTINUE, STRONG GROWTH ACCEPTABLE INFLATION
WITHOUT THE NEED TO CUT MUCH. IF THE FED ONLY GOES TWO OR
THREE TIMES THIS YEAR, BOND MARKET VOLATILITY BUT AS AN
ECONOMIST I AM HAPPY
ABOUT THAT. THE RISK THAT HAPPENS -- THERE
IS FOR ME IS ABOUT WHAT HAPPENS NEXT YEAR.
WE ARE A CLOSED AUNTS BETWEEN SUPPLY AND DEMAND BUT WE ARE
MATCHING. IF YOU END UP WITH A PRESIDENT,
NOT NAMING ANY NAMES, THAT RAISES IMPORTANT TRIPS, REDUCES
IMMIGRATION AND THAT BESIDES I WANT STRONGER GROWTH SO I AM
GOING TO CUT INCOME TAXES, YOU HAVE AN EFFICIENT ALBUM -- YOU
HAVE ANY EFFICIENT PROBLEM. IT IS REPORTED TO LIVE THE
ECONOMY DO WHAT IT IS GOING TO DO.
IF THE VATICAN TICKETS FOR OFF OF THE BREA
K, GREAT.
WE HAVE MORE GROWTH, I WILL BE HAPPY. ANNMARIE:
HOW DO YOU START PREPARING FOR TRUMP 2.0. KALLUM:
THE MARKET IS GOING TO WAIT UNTIL THE FOURTH OF NOVEMBER
AND THAT ASIDE. WE ARE ALWAYS OVERTAKEN BY
EVENTS IN LIFE SO SHOULD NOT BE ASSUMING THE NEXT FOUR YEARS
LOOK A CERTAIN WAY. A LOT DEPENDS ON HOW EUROPE
REACTS TO GEOPOLITICAL RISK. FROM A MACRO PERSPECTIVE, AS
LONG AS FISCAL POLICY IS ORIENTED TO THE SUPPLY-SIDE AND
THE U.S. CONTINUES TO ENJOY GOOD EMPLOYMENT GROWTH, IT IS A
QUESTION
OF WHETHER INFLATION SETTLES IN HIGH TWOS OR LOW
TWOS. ANNMARIE: AT WHAT POINT ARE BONDHOLDERS
GOING TO WANT MORE TO HOLD U.S. DEBT? KALLUM:
AS LONG AS YOU DON'T HAVE A MAJOR EFFICIENT PROBLEM, I
DON'T SEE WHY WE SHOULD BE PUSHING UP U.S.
RATES SIGNIFICANTLY. MAYBE THEY NEED TO BE 50 BASIS
POINTS HIGHER BUT THAT REFLECTS REAL GROWTH AS UPSIDE RISK FOR
INFLATION. IF FISCAL POLICY WOULD YOU
CHANGE TO BE DEMAND FOCUSED, THEN YOU WOULD WORRY ABOUT
INFLATION PROBLEMS. REMEMBER THE LESSON OF LIZ TRUS
S IN THE
U.K.. THE REASON THOSE DEFICIT SPENDING PLANS OF PANIC TO
MARKETS IS BECAUSE THEY WERE INFLATIONARY IN AN ECONOMY THAT
WAS STRAINED. ARE YOU RAISING DEMAND WHEN
DEMAND IS ALREADY STRONG ENOUGH OR ARE YOU TRYING TO RESUPPLY
IN ORDER TO MATCH THE INCREASED DEMAND? THE U.S.
GETS AWAY WITH IT. OTHER COUNTRIES PROBABLY
COULDN'T. JONATHAN: INTERESTING. LIZ TRUSS, QUITE A LESSON.
KALLUM: IT WAS REAGANISM WITHOUT THE
DOLLAR. JONATHAN: -- SUPPORTS EVERY NOVELIZATION
OF RATES AT HER LEVEL. WHAT H
AS CHANGED BETWEEN 2019
NOW? WHAT HAS CHANGED THAT WOULD LEAD TO THAT OUTCOME? KALLUM:
LET'S IMAGINE A WORLD WHERE WE DID NOT HAVE COVID AND DID NOT
HAVE THE INVASION OF UKRAINE. WE REMOVE SUPPLY SHOCKS. U.S.
RATES WOULD HAVE BEEN DRIFTING HIGHER, THIS NEUTRAL RATE.
WE ESCAPED THE WEIRD FUNK AFTER THE POST FINANCIAL CRISIS.
THE FED STARTED TO REACT TO THIS CHANGE FROM 2017 ONWARD
BUT HAD TO ADJUST RITZ DOWNWARD. NEUTRAL RATES HAVE DRIFTED
HIGHER SO YOU CAN ASK THE QUESTION, YOU LIKE TO REFER TO
R-STAR, IT IS 4% OR HIGHER. CLEARLY HAVE 150 BASIS POINTS
OF TIRING, -- OF TIGHTENING, NOT 500 BASIS POINTS WHICH IS
WHY INFLATION EXPEDITIONS HAVE COME DOWN, WIDELY HOUSING
MARKET HAS CORRECTED BUT CONSUMERS HAVEN'T PANICKED AND
THE JOB MARKET HAS SLOWED. JONATHAN:
ARE WE SUFFICIENTLY RESTRICTIVE BASED ON THAT?
THE FEDERAL RESERVE SEEMS TO HAVE A DIFFERENT VIEW ON WHAT
NEUTRAL IS. KALLUM: WE ARE GOING TO FIND OUT WHERE
NEUTRAL IS. IT IS HARD TO BE PRECISE AT
THIS MOMENT. I FEEL KILLING INFLATIO
N RATHER
THAN ALLOWING THE ECONOMY TO RUN HOT.
OUR MARKETS ARE NOT SYSTEMS, THEIR ADAPTATIONS AND THEIR
DEPTH REPRESSES. A WORLD WHERE PRICES GROW AT 1%
IS NOT SIN HE KNEW STRONG SIGNAL ABOUT INVESTING HERE OR
THERE. THE MORE YOU HAVE 3% GROWTH,
THE MORE SIGNALS YOU HAVE TO DO SOMETHING.
I WOULD PREFER TO SAY LET'S RUN THE ECONOMY HOT FOR A WHILE AND
LET THIS WEEK NORMALIZATION TAKE PLACE THAN RISK KILLING
THE UPSWING. JONATHAN: A LOT OF SHOULD VERSUS WILL.
WHAT DO YOU THINK THEY WILL DO? KALLUM
:
JUNE IS GOING TO BE A MASSIVE MONTH. TO BANK OF ENGLAND, THE FED THE
ECB ARE GOING TO CUT RATES AND IT IS A QUESTION HOW FAR THEY
GO. FOUR FOR THE U.S.. AND THEN A QUESTION IF THEY CAN
GO 50 MORE NEXT YEAR. IT IS A CLOSE CALL. LISA: IT SEEMS LIKE IF THINGS ARE
SURPRISING TO THE UPSIDE IN TERMS OF ECONOMIC GROWTH, WHY
WOULD THEY CUT MORE THAN THEY ARE SAYING THAT? KALLUM:
LAST YEAR THE U.S. AND PERCENT ANNUALIZED PROBABLY
TWICE THE RATE OF THE CONTROL GROWTH.
THIS FIRST HALF WE ARE GOING TOO SL
OW TO 2% ANNUALIZED.
INFLATION IS PROBABLY GOING TO COME DOWN SO THE FED WILL GET
ANY OPPORTUNITY IN Q2 TO START CUTTING INTEREST RATES.
THEN YOU HAVE MOMENTUM A FEW TIMES AND THEN THE SECOND HALF
OF THE YEAR, LET'S SEE IF INFLATION EXPECTATION STARTS TO
CREEP UP AS THE ECONOMY STARTS TO ACCELERATE.
THEN YOU WILL ASK WHERE THE FED CAN STOP. JONATHAN: UNITY SEE BRAMO'S -- WE NEED TO
BRAMO CAMP. WE JUST NEED TO CHECK BRAMO'S
REACTION. KALLUM PICKERING THERE. COMING UP, AVERY SHEFFIELD AND
MARIO PA
RKER. A CHOCOLATE CONVERSATION WITH
JAVIER BLAS. THAT IS COMING UP NEXT. >> MARKETS MOVING CLOSER TO
WHERE WE THINK THINGS SHOULD BE. >> THERE IS A LOT OF RISK THAT
THE FED RATES LONGER. THEY ARE LIKELY TO HER ON THE
SET OF CAUTION. >> ONCE WE START CUTTING, WE
ARE GOING TO CUT AGGRESSIVELY TOWARDS A NORMALIZED WORLD. >> THE FED IS MORE LIKELY TO
REMAIN ON THE SIDELINES RATHER THAN RE-ENGAGING IN RATE HIKES. >> IT IS BECOMING INCREASINGLY
LIKELY MAYBE WE HAVE NO RATE BECAUSE THIS YEAR -- NO RATE
BECAUSE THIS YEAR. >> THIS IS "BLOOMBERG
SURVEILLANCE" WITH JONATHAN FERRO, LISA
ABRAMOWICZ, AND ANNMARIE HORDERN. JONATHAN:
LIVE FROM NEW YORK CITY, GOOD MORNING.
THE SECOND HOUR OF "BLOOMBERG SURVEILLANCE." BEGINS RIGHT NOW.
YOUR EQUITY MARKET ON S&P 500 ALMOST ENTIRELY UNCHANGED.
STARTS WITH A BLOW AT JOBS REPORT, CPI, UPSIDE SURPRISE,
PPI, UPSIDE SURPRISE, PCE COMES IN LINE.
THIS IS WHAT CHRISTIAN HAS GOT TO SAY. NO NEW BAD NEWS.
THIS IS WHAT THE MARKET TRADED ON. LISA:
EVERYONE IS LOOKING
FOR THE TAIL RISK WHICH IS WHY I HAVE A
LIST OF WORRIES. CAN WE GET CONTINUED GROWTH IN
UPSIDE SURPRISE WITHOUT COMMENSURATE INFLATION?
THERE WAS A HALF SECOND PEOPLE WERE WORRIED.
PCE WASN'T SURPRISING AND EVERYONE WENT BACK TO
GOLDILOCKS NIRVANA. JONATHAN: STOCKS HAD THE BEST MONTH SINCE
NOVEMBER DESPITE EVERYTHING BRAMO SAID. S&P 500 UP BY 5%. STOCKS IN EUROPE IS UP BY A
SIMILAR AMOUNT. THE NIKKEI IS UP.
I WILL KEEP GOING JUST TO TORTURE YOU.
EVEN THE CSI 300 IN CHINA IS UP BY 9%. THAT IS A D
ECENT MONTH OF
GAINS. ANNMARIE: THAT IS A MASSIVE MONTH OF
GAINS AND YET JAPAN IS IN RECESSION, THE UNITED KINGDOM
IS IN RECESSION. IT IS HARD SOMETIMES TO
UNDERSTAND THE ECONOMY VERSUS THE STOCK MARKET. LISA:
I KEEP GOING BACK TO PEOPLE HAVING AND OUT WEST YOU, BEING
READY TO GO AND THEY CAN RESPOND TO ANY WEAKNESS WITH
CUTTING RATES. TO ME, IT IS UNCLEAR WHETHER WE
CAN GET GROWTH WITHOUT INFLATION, WHETHER THE EI BOOM
IS GOING TO BRING PRODUCTIVITY IN THIS PREFECT BASED --
JONATHAN: WOULD YOU
LIKE SOME NEGATIVITY?
SINGLE MAN, NYCB -- SINGLE NAME, NYCB DOWN 26%.
JP MORGAN YESTERDAY, RECORD HIGH.
THE BAKING INDEX IS PERFORMING IN LINE WITH THE INDEX ON THE
S&P, UP 4% OVER 5%. EVEN THE REGIONAL BAKING INDEX
DOWN 3% AND WE HAVE KNOWN ABOUT THIS ISSUE ALL MONTH. LISA:
PEOPLE HAVE BEEN TRYING TO SNIFF OUT TO THE LOSERS ARE IN
THE SMALL BANK SPACE ABOUT A YEAR. IF THEY HAVE SPENT A YEAR
TRYING TO SIT IT OUT AND REPRICE WHERE THEIR HOLDINGS
ARE, IS THIS GOING TO SURPRISE THEM?
THE BIGGEST SU
RPRISE IS GIVEN THAT, WHY ARE PEOPLE NOT MORE
ALARMED WITH A KITCHEN SINK AND THEN ANOTHER KITCHEN SINK?
JONATHAN: NYCB IS DOWN BY 26%. BRAMO'S LIST OF WORRIES GETS
SHORTER. COMING UP, AVERY SHEFFIELD --
WITH OPEC+ LIKELY TO EXTEND CUTS.
MEGAN ROBSON FROM BNP PARIBAS. WE BEGIN WITH STOCKS AT RECORD
HIGHS OF FOLLOWING A FOURTH MONTH OF GAINS.
AVERY SHEFFIELD SAYING THIS, " THE MARKET IS PARTYING
EXTREMELY HARD. VALUATIONS ARE STRETCHED AND
FUNDAMENTALS ARE BEING OVERRULED.
WE THINK THAT THIS CREA
TES UNDERAPPRECIATED DOWNSIDE RISK."
YOU SOUND LIKE A GUEST LISA BOOKED.
LET'S TALK ABOUT DOWNSIDE RISK. WELCOME TO THE SHOW.
HOW LONG IS THAT LIST? AVERY:
THE RISK IN TERMS OF WHAT HAS BEEN PRICED IN.
AS YOU HAVE BEEN SPEAKING ABOUT, WE ARE RUNNING A SIX TO
7% DEFICIT IN THAT ENVIRONMENT. IT IS HARD TO SEE MUCH ECONOMIC
DOWNSIDE ABSENCE OR SOMETHING HAPPENING IN THE BANKING SECTOR.
THE ECONOMY LOOKS LIKE IT IS HUMMING ALONG. IT IS OKAY. FROM A STOCK PERSPECTIVE, WHAT
IS PRICED IN WITH THE NASDA
Q, 29 TIMES, S&P COMMUNITY 21
TIMES. WITH REAL RATES, THE HIGHEST
THEY HAVE BEEN SINCE THE GSC. THERE IS A LOT PRICED IN.
WHEN EXPECTATIONS AREN'T MET, THE DOWNSIDE CAN BE VERY
MEANINGFUL. WE WOULD SAY IT IS PROBABLY
MORE LIKE IT TO HAPPEN IN STOCK SPECIFIC BASIS RATHER THAN THE
MARKET AS A WHOLE GIVEN THE GENEROUS SPENDING FROM OUR
FEDERAL GOVERNMENT. JONATHAN: YOU SAID SOMETHING ABOUT
CHAIRMAN POWELL THAT HIS ULTIMATE GOAL WAS TO MAKE
PEOPLE HAPPY. IS THAT STILL YOUR DESCRIPTION?
AVERY: I THIN
K HE WAS LISTENING BECAUSE SINCE THEN IN THE
JANUARY FED MEETING, HE DID COME OUT AND SAY EXPLICITLY,
WHICH WAS A LITTLE REFRESHING, THAT INFLATION LOOKS LIKE IT IS
PICKING UP A BIT AND WE ARE NOT LIKELY TO RAISE IN MARCH. EVEN MARY DALY THIS WEEK ON
BLOOMBERG SAYING CONSUMERS ARE CONCERNED ABOUT INFLATION, ONE
OF THEIR TOP RISKS. WE CANNOT REALLY LOWER RATES TO
CONTINUE TO STIMULATE THE PARTY IN THE WAY HE'S ADJUSTED HE
MIGHT FROM HIS COMMENTS IN DECEMBER. ANNMARIE:
THIS IS SOMETHING I THOUGHT
-- LISA:
THIS IS SOMETHING I THOUGHT WAS INTERESTING, HE SAID THINGS TO
MAKE PEOPLE HAPPY BUT DID NOT ADDRESS THE ISSUE OF FINANCIAL
CONDITIONS EASING AND WHAT THAT WOULD DO TO PUSH THEM FURTHER
AWAY FROM THEIR GOAL. DO YOU THINK THAT IS BECAUSE IT
IS NO LONGER RELEVANT OR BECAUSE THEY ARE NOT AWARE OF
HOW MUCH THE INCREDIBLE EASING IN FINANCIAL CONDITIONS HAS
MADE IT WERE DIFFICULT FOR THEM TO CONGRESS INFLATION? AVERY:
AT THAT MOMENT IN TIME, HE JUST DIDN'T WANT TO STOP THE PARTY.
IT IS CLEAR
FINANCIAL CONDITIONS EASED SO MUCH BUT HE
WAS HOPING INFLATION DID NOT ACCELERATE FOR A WHILE AND HE WOULD HAVE LEEWAY TO KEEP
EVERYTHING ON A STEADY COURSE. BECAUSE INFLATION HAS
ACCELERATED AND IS PROMINENT IN CONSUMER'S MINDS, FINANCIAL
CONDITIONS ARE FLOWING SO QUICKLY THEY HAVE HAD TO WALK
BACK THIS FINANCIAL CONDITIONS DON'T MATTER, WE ARE GOING TO
DO WHAT WE ARE GOING TO DO. THEY ARE FLOWING THROUGH AND SO
THEY ARE GOING TO HAVE TO RESPOND TO IT. CAN YOU REALLY EASE WITHOUT
CELEBRATION? S
O MANY STOCKS ARE PRICED AS IF
THE FED IS GOING TO EASE AND STIMULATE DEMAND FROM THE
CURRENT LEVEL RATHER THAN THAT THEY WOULD EASE IN RESPONSE TO
THINGS GETTING WORSE. LISA: THIS MORNING I WALKED IN AND
SAID EVERYBODY TALKING ABOUT THIS PARTYING AS IF IT IS A
NEGATIVE. WHAT IF THERE IS NOTHING WRONG
WITH THIS PARTY? WE ARE JUST AS MUCH MONEY GOING
INTO CASH FUNDS, MORE GOING INTO EQUITIES. IS THIS HEALTHY?
AVERY: THE ISSUE IS IT IS LEADING TO
CONTINUED INFLATION WITH KEN -- WHICH CONSUMERS ARE
NOT HAPPY
WITH. IF THEY WERE HAPPY WITH THEIR
TROPIC PRICES, HAPPY WITH HAPPY MILK PRICES AND THE COST OF
HOUSING, IT WOULDN'T MATTER. CONSUMERS AREN'T HAPPY.
THAT IS WHERE WE HAVE THIS ISSUE THAT YOU CANNOT JUST KEEP
STIMULATING THE PARTY AND HAVE PEOPLE ACTUALLY BE HAPPY.
ANNMARIE: WE SEE A DIVERGENCE IN
CONSUMERS AND YOU TALK ABOUT THIS IN YOUR NOTES.
NOT ALL CONSUMERS ARE NOT SPENDING. AVERY: RIGHT.
THE HIGH END IS CONTINUING TO SPEND.
LOW END IS CONTINUING TO SPEND WITH THEIR NOT HAPPY WIT
H WHERE
THEY ARE SPENDING. TODAY MUCH ON CHOCOLATE AND
COFFEE, NOT ENOUGH MONEY LEFT FOR DISCRETIONARY.
THE HIGHER END CONSUMERS ARE CONTINUING TO SPEND.
THIS IS ONE OF THE ISSUES WE ARE FACING.
IF EVERYONE WASN'T SPENDING, IT WOULD LEAD TO DEFLATION BUT
ENOUGH PEOPLE ARE SPENDING THAT IT CREATES INFLATIONARY
PRESSURE. THE FED'S TOOLS ARE VERY BLUNT.
IF STIMULUS DEMAND FOR EVERYONE. THE LOW END CONSUMER GETS HIT
MORE. THAT IS A REAL ISSUE. WE THINK THAT IS GOING TO KEEP
THE FED MORE IN CHECK FOR
LONGER.
IT MEANS THE CONSUMER SECTOR AND OTHER SECTORS BEING PRICE
FOR A STIMULATE DEMAND FOR THESE LEVELS ARE UNLIKELY TO
LIVE UP. JONATHAN: THAT IS THE THIRD TIME YOU HAVE
ALLUDED TO THIS. THE RISK AT THE SINGLE-GAME
LEVEL, WHAT ARE THESE NAMES -- SINGLE NAME LEVEL, WHAT ARE
THESE NAMES? AVERY: I WILL SPEAK MORE GENERALLY
WHAT WE'RE SEEING. IN THE CONSUMER SECTOR, YOU
HAVE STOCKS PRICED AT 30 TIMES OR 40 TIMES EARNINGS THAT HAVE
BEEN REAL LEADERS, BRANDS PEOPLE HAVE LOVED FOR A LONG
PERIOD OF
TIME. CARE FACING INCREASING
COMPETITION -- THEY ARE FACING INCREASING COMPETITION THAT
BENEFITED FROM LOWER INCOME CONSUMERS TRADING UP.
THEY ARE NOT REFLECTING THOSE WRISTS -- THOSE RISKS. ALSO COMPANIES THAT SELL
FURNITURE, HOME IMPROVEMENT, EVERYONE IS PASSING IN THESE
CUTS RE-STIMULATING DEMAND. DEMAND MIGHT FALL FURTHER
BEFORE IT COMES UP. YOU ADVENT SOFTWARE SECTOR.
-- YOU LOOK AT THE SOFTWARE SECTOR, VERY DIFFERENT RESULTS
FROM SOFTWARE COMPANIES, COMPANIES PRICED FOR EVICTION
AND MANY
BENEFIT FROM A HIGH BUT MAYBE NOT AS PEOPLE THINK.
WE ARE ALREADY SEEING THOSE STOCKS CORRECT AND WE WILL SEE
THESE WELDING BUBBLES DEFLATE. COMPANIES OUT THERE THAT DON'T
HAVE THAT BUBBLE-LIKE DYNAMIC BENEFIT FROM ANY ECONOMY
BUILDING ALONG HAVE SOME OPPORTUNITY TO THE UPSIDE.
JONATHAN: GIVEN THE NAMES YOU HAVE CITED, I CAN SAY COMPANIES
THAT RHYME WITH ROSE. AVERY: FOR THE S&P AS A WHOLE, YOU
HAVE YOUR MAGNIFICENT SEVEN. THE PERFORMANCE OF THE
MAGNIFICENT SEVEN HAS DIVERGED UNDERNEATH THE SURF
ACE.
IS, MEDIC OF WHAT WE WILL SEE IN THE MARKET AS A WHOLE.
WILL FOUR OF THOSE THINGS THAT HAVE DONE ENOUGH THIS YEAR BE
ENOUGH TO THAT WEAKNESS? TWO OTHERS, A LITTLE SOFTNESS?
THAT IS PROBABLY WHAT IS GOOD YOU DRIVE THINGS AT AN INDEX
LEVEL. WE HAVE ALREADY SEEN BIFURCATION AND THE LEVEL OF
VALUATIONS WITHIN THOSE COMPANIES, IT IS HARD TO MAKE A
CALL ON THE INDEX AS A WHOLE. LISA:
I LOVE YOUR IDEA ABOUT SPECIFIC COMPANIES AND THIS BRINGS ME TO
FRENCH CALL CENTERS. THIS REALLY IS AN IMPORTANT
S
TORY. THIS IS A COMPANY THAT FELL OUT
OF BED BECAUSE CLARNA SAID IT IS DOING THE WORK EQUIVALENT OF
700 EMPLOYEES. I AM CURIOUS HOW MANY TELLER
PERFORMANCES ARE OUT THERE. AVERY:
THERE IS MORE AND THAT IS AN AREA WHERE WE WILL CAI HAVING
EARTHQUAKE TYPE TRUCKS RATHER THAN AI BEING A RISING TIDE OF
LIFTS ALL BOATS. -- THAT LIFTS ALL BOATS.
THERE ARE THESE COMPANIES THAT WANT TO MEET EXPECTATIONS.
THERE ARE ALSO COMPANIES THAT ARE MIFID TO BE DISRUPTED AND
DON'T HAVE IT PRICED IN. JONATHAN:
AVERY
SHEFFIELD, THANK YOU. MORGAN STANLEY TALKED ABOUT
THIS, THE DIFFERENCE BETWEEN AI AND ENABLERS AND AI ADOPTERS.
THE SECOND PIECE IS THE PIECE YOU ARE ALLUDING TO, COMPANIES
TAKE IT ON AND SUCCEED AND OTHERS WHICH MIGHT STRUGGLE AND
FAIL. LISA: I LOVE THIS STORY AND IT IS
HARD TO TALK ABOUT IN GENERALITIES BUT THERE ARE
COMPANIES THAT ARE GOING TO DO BETTER WITH RESPECT TO
PRODUCTIVITY AND THAN THOSE IN TWO WEEKS CALLED OUT OF
BUSINESS BECAUSE THEIR ENTIRE MODEL IS GETTING DISRUPTED.
THAT UNDER T
HE HOOD WORK THAT IS NOT THAT ITSELF TO -- IS
INTERESTING. JONATHAN: I THINK IT DOES LEND ITSELF TO
MORNING TV, HOW ARE LABOR WILL THOSE COMPANIES BE?
WHERE WILL THOSE JOB LOSSES BE? YOU WILL FIND THEM IN ASIA AND
INDIA WHERE A LOT OF THOSE CALL CENTERS MOVED TO. LISA:
IT IS A GREAT POINT IN TERMS OF CHEAP LABOR AND WERE IT GETS
BLOWN OUT. I WOULD ALSO ARGUE IN THE U.S.
THERE IS SOMETHING LIKE MORE THAN ONE MILLION GROCERY STORE
CASHIERS. THINK ABOUT JOBS LIKE THIS, THE
RANK AND FILE. WHAT HAPPE
NS TO ALL OF THOSE
JOBS? JONATHAN: CHEAP LABOR, CHATBOTS.
EQUITY FUTURES ON THE S&P, -1%. BE CEMEX ME FEEL SMALL WHEN SHE
TALKS ABOUT FRENCH CALL CENTERS BEING ON THIS LIST BUT I AM
WITH YOU. YOU NEED YOUR WEEKEND. BEST GET ANY UPDATE ON STORES
ELSEWHERE. HERE IS YOUR BLOOMBERG BRIEF.
DANI: EUROZONE INFLATION IS LESS THAN
FORECASTED IN FEBRUARY WHICH BACKS THE MORE CAUTIOUS ECB
OFFICIALS. CONSUMER PRICES ROSE 2.6
YEAR-OVER-YEAR -- 2.6% YEAR-OVER-YEAR.
BIDEN WILL PUSH PLANS TO INCREASE TAXES ON T
HE WEALTHY
AND LOWER PRESCRIPTION DRUG PRICES IN HIS STATE OF THE
UNION ADDRESS. HE PLAYS JULIET'S ECONOMIC
AGENDA FOR A SECOND TERM IN OFFICE -- HE PLANS JULIET'S
ECONOMIC AGENDA FOR A SECOND TERM IN OFFICE. JANET YELLEN SAID ANY --
UKRAINE IT HAS BEEN HELD UP IN CONGRESS AS THE COUNTRY'S WAR
WITH RUSSIA ENTERS A THIRD-YEAR. SHE SAID THE EU HAS OFFERED
UKRAINE "VERY MEANINGFUL FINANCIALS"
BUT THE TOTAL DOES NOT SEEM LIKE ENOUGH. JONATHAN:
UP NEXT, A BATTLE AT THE BORDER. >> THIS IS A JOE BIDEN
INVASION.
IT IS A MILITARY OPERATION. THIS IS LIKE A WAR. PRES. BIDEN:
THIS IS WHAT I WOULD SAY TO MR. TRUMP, JOIN ME OR I WILL JOIN
YOU IN TELLING CONGRESS TO PASS THIS BIPARTISAN BORDER SECURITY
BILL. JONATHAN: WE WILL HEAD DOWN TO
WASHINGTON, D.C. FOR THIS DISCUSSION NEXT.
GOOD MORNING. ♪ JONATHAN:
TWO HOURS 10 MINUTES AWAY FROM THE OPENING BELL.
YIELDS A LITTLE BIT LOWER BICYCLE BASIS POINT. 4.23 65. A BATTLE AT THE BORDER. >> THIS IS A JOE BIDEN INVASION.
THREE YEARS AGO WE HAVE THE MOST SE
CURE BORDER IN HISTORY,
THERE WAS A SECURE BORDER AND PEOPLE WEREN'T COMING BECAUSE
THEY KNEW THEY WEREN'T GOING TO GET IN.
IT IS A MILITARY OPERATION. THIS IS LIKE A WAR. PRES. BIDEN:
THIS IS WHAT I WOULD SAY TO MR. TRUMP, SAID POLICIES IN ISSUE
INSTEAD OF TELLING THEM WAS OF CONGRESS TO BLOCK THIS
LEGISLATION, JOIN ME OR I WILL JOIN YOU IN TELLING CONGRESS TO
PASS THIS BIPARTISAN BORDER SECURITY BILL. JONATHAN:
DONALD TRUMP AT PRESIDENT BIDEN MAKING DUELING TRIPS TO THE U.S.
MEXICO BORDER. A K
EY ISSUE IN THE RUN-UP TO
THE PRESIDENTIAL ELECTION. MARIO PARKER JOINS US FOR MORE.
THE RHETORIC IS FAR APART, HOW FAR APART ARE THEY ON POLICY?
MARIO: IT IS NIGHT AND DAY IN TERMS OF
THE GULF BETWEEN BIDEN AND TRUMP ON POLICY. THE REPUBLICANS EXACTED WHAT
THEY WANTED OUT OF PRESIDENT BIDEN IN TERMS OF IMMIGRATION
AND BORDER DEAL AND THEN RENEGE ON THAT DEAL -- AND THAT MEANT
BACK ON THAT DEAL FOR TRUMP WHO WANTED TO KEEP THE BORDER IS A
VULNERABILITY FOR HIS OPPONENT LOOKING TO NOVEMBER. ANNMA
RIE:
WHEN IT LOOKS TO EXECUTIVE ACTION, BIDEN WOULD HAVE TO USE
THE LAW THAT FORMER PRESIDENT TRUMP WANTED TO USE.
THIS WOULD BE SUSPENDING THE ENTRY OF FOREIGNERS WHEN
DETERMINED THEIR ARRIVAL IS NOT IN THE BEST INTEREST OF THE
COUNTRY. IF HE WAS TO GO THAT ROUTE, HOW
MUCH PUSHBACK WITH YOU GET FOR THE PROGRESSIVE LEFT? MARIO:
HE WOULD GET A LOT OF PRESSURE FROM THE PROGRESSIVE LEFT.
HE HAS BEEN MULLING THIS FOR THE LAST THREE WEEKS AFTER THAT
THE DEAL WAS SCUTTLED, WHETHER OR NOT HE HAS THE EX
ECUTIVE
AUTHORITY TO DO SOMETHING. VIS-A-VIS DONALD TRUMP.
YOU ALL ARE IN NEW YORK, WE SEE SOME OF THE PRESSURES ON
BIDEN'S SIDE FROM DEMOCRATS. ILLINOIS, NEW YORK, SOME OF
THESE BIG CITIES BEING INUNDATED WITH MIGRANTS BASED
ON THIS AGAIN MEANT GOVERNOR GREG ABBOTT PULLED.
BIDEN IS CAUGHT BETWEEN A LOT OF DIFFERENT PIECES BETWEEN HIS
PARTY AND THE REPUBLICAN PARTY. THE FACT THAT WE SAW HIM GO TO
THE BORDER WAS A FOLLOW-THROUGH FOR A PROMISE THAT HE WAS GOING
TO GO OUT ON THE ROAD AND TAKE THIS
FIGHT HEAD-ON, TRY TO
EXPLAIN TO THE AMERICAN PEOPLE THE POLITICS OF WHAT HAPPENED. LISA:
TOM'S -- ANNMARIE: TOM SWAYZE TALKED ABOUT THE BORDER.
WHAT IS PRESIDENT BIDEN GOING TO SAY NEXT WEEK IN THE STATE
OF THE UNION ABOUT THE BORDER? MARIO:
IT IS QUITE UNCLEAR RIGHT NOW WHAT PEOPLE SAY OTHER THAN THE
FACT THAT HE IS GOING TO PUT THE ONUS ON REPUBLICANS.
HE WILL POINT TO THE FACT THAT HE DID CONCEDE TO REPUBLICAN
DEMANDS IN THE DEAL THEY SCUTTLED. ESSENTIALLY HE IS GOING TO CAST
DONALD TRUMP AS
A PUPPETMASTER OVER THE REPUBLICAN PARTY.
THE GAMBIT ON THE OUTSIDE IS THAT REPUBLICANS FEEL IT IS SO
ENTRENCHED OF AN ISSUE FOR BIDEN THAT HE WOULD BE ABLE TO
DIG HIMSELF OUT OF THE WHOLE. IN TERMS OF THE STATE OF THE UNION, BIDED'S -- BIDEN'S
CAMPAIGN IS CASTING THAT AS HIS VISION FOR AMERICA, ANOTHER
SEMINAL MOMENT IN HIS CAMPAIGN. THEY WANT HIM TO START HAVING A
VISION LOOKING FORWARD AND COMMUNICATING THAT TO VOTERS
WHILE TRYING TO EXPLAIN TO VOTERS SOME OF HIS KEY
LEGISLATIVE COMPLIMENTS,
HOW THEY HAVE IMPROVED THEIR LIVES.
ANNMARIE: IS THERE EVIDENCE OF WHAT BIDEN
IS TRYING TO DO IN TERMS OF TAKING THE BORDER ISSUE HEAD ON
SAYING YOU ARE THE ONE WHO BLOCKED THIS DEAL I COULD HAVE
GOTTEN DONE? ANY EVIDENCE THAT IS WORKING IN
TERMS OF VOTERS PLANNING REPUBLICANS? MARIO:
IN TERMS OF EVIDENCE, THE EVIDENCE IS SCANT.
WE HAD A MORNING CONCERT POLL THAT CAME OUT AND SHOWED MORE
VOTERS BLAME REPUBLICANS FOR WHAT IS HAPPENING AT THE BORDER
BY A FIVE PERCENTAGE POINT INCREASE.
THAT IS NO
T A LOT GIVEN WHERE BIDEN IS ON THE ISSUE. IF YOU LOOK AT FORMER PRESIDENT
TRUMP'S RECENT STOP SPEECHES, YOU CAN SEE SOME LENSES OF WHAT
HIS KEY AIDES ARE TELLING HIM. HE SAYS NOTHING ABOUT
IMMIGRATION BEING BAIT FOR DEMOCRATS -- SAID SOMETHING
ABOUT IMMIGRATION BEING BAIT FOR DEMOCRATS.
PROBABLY HIS ANALYSTS TOLD HIM IT IS SO BAKED IN THAT IT IS
WITH THIS POLITICAL GAMBIT TO CONVINCE HIS PARTY TO GO BACK
ON THAT DEAL THEY HAD. JONATHAN: MARIO PARKER IN WASHINGTON, D.C.
ON THE DIFFERENCE BETWEEN
DONALD TRUMP AND IS SITTING
PRESIDENT JOE BIDEN ON THE SOUTHERN BORDER. THE FED WILL NOT CUT RATES IN
2024, QUITE A CALL. THE REALITY IS THE U.S.
ECONOMY IS NOT SLOWING DOWN AND THE FED PROVIDED A STRONG
TAILWIND TO GROWTH SINCE DECEMBER.
AS A RESULT, THE FED WILL NOT CUT RATES AND RATES ARE GOING
TO STAY HIGHER FOR LONGER. HE OFFERS 10 REASONS, A VERY
LONG LIST. I WILL GO TO THE 10. I WILL SHORTEN THE. SHORTEN THE.
-- SHORTEN THEM. IT IS EXHILARATING.
UNDERLYING MEASURES OF TRADE INFLATION MOV
ING HIGHER.
SUPER COURT INFLATION, PREFERRED BY CHAIRMAN POWELL
TRENDING HIGHER. THE LABOR MARKET REMAINS TIGHT.
SMALL BUSINESSES ARE PLANNING TO RAISE SELLING PRICES.
MANUFACTURING SURVEYS SHOW A HIGHER TREND IN PRICES PAID.
SERVICES PRICES PAID, ALSO TRENDING HIGHER.
WE ARE GOING TO RAISE WORKER COMPENSATION AS WELL ACROSS
BUSINESSES. ASKING RENTS ARE RISING AND
MORE CITIES ARE SEEING RAISING MEDS -- RISING RENTS.
FINANCIAL CONDITIONS, THE OBVIOUS ONE, EASING.
EQUITY MARKETS RATHER TO ALL-TIME
HIGHS AND SPREADS ARE
TIGHT. LISA: THE INDICATION WE GOT FROM
CHAIR POWELL AT THE END OF LAST YEAR HAS WORKED AGAINST THEIR
GOAL TO GET INFLATION DOWN. THIS IS WHAT AVERY WAS TALKING
ABOUT A COUPLE OF MINUTES AGO. IT DOES MATTER.
THIS IS FACTORING INTO SOME OF THE STRENGTH.
HOW MANY PEOPLE ARE GOING TO COME TO HIS VIEW?
THE JIM BEYONCA CAMP WAS A LONELY CAMP AND STILL NOT BEING
PRESENT IN. JONATHAN: I WANT TO REMIND YOU HOW
QUICKLY THINGS CHANGE LAST YEAR AT HOW THE TIMES WE HAD A
DIFFERENT NAR
RATIVE IN THE FIRST THREE MONTHS OF 2023.
FEBRUARY WAS NO LANDING, ALMOST X EVERYWHERE WE ARE.
MARCH, BANKS STARTED TO FAIL AND THEN IT WAS ALL OF A SUDDEN
HARD LANDING. THIS IS THE WAY I WOULD THINK
ABOUT IT. THE PROBABILITY AROUND A RANGE
OF OUTCOMES HAS SHIFTED MARKEDLY.
I HAVE NO IDEA WHERE WE ARE GOING TO BE AT THE END OF THIS
YEAR BUT THE WORLD HAS MOVED TOWARD THAT PERSPECTIVE.
THE CHANCES OF THAT HAPPENING NOW ARE SOME ATTIRE AT THE
START OF MARCH THAN A MONTH AGO. JONATHAN: THERE ARE NO
T -- LISA:
THERE ARE NOT SIGNS OF >> PEOPLE WERE TALKING ABOUT --
SIGNS OF WORRY PEOPLE WERE TALKING ABOUT. CONCERNS ABOUT INFLATION, IT IS
KIND OF STAY GIVEN TO THE EDGES BUT IT IS COMING IN SOME PLACES.
ALL OF THESE WORRIES SEEM TO BE KEPT IN CHECK ENOUGH FOR
INFLATION DO NOT COME DOWN AS MUCH AS PEOPLE EXPECTED.
JONATHAN: EQUITY FUTURES ON THE S&P 500
ARE SOFTER, NEGATIVE BY .1%. TREASURY YIELDS LOWER BY A
BUSINESS POINT OR TWO AT THE CURVE. LET'S CALL IT 4.60. BOYLE CAPPING HIS SECOND
STRAIG
HT MONTH OF GAINS AS COCOA SEE ITS BIGGEST RISE IN
YEARS. WE WILL DIG INTO THE MARKET
WITH JAVIER BLAS NEXT ON THE PROGRAM. JONATHAN:
NOT SHARING MY THOUGHTS ON THAT, NO CHANCE.
EQUITIES ON THE S&P NOT A CHANCE. NEGATIVE BY 1/10 OF 1%. WE GOT NOWHERE ON THE NASDAQ
100. THE FED WILL NOT CUT RATES IN
2024. THE REALITY IS THE U.S. ECONOMY IS SIMPLY NOT SLOWING
DOWN. THE FED PIVOT PROVIDED THIS
SINCE DECEMBER. GETTING TO THE TWO-YEAR, IT'S
BEEN AS LOW WAS 1.4%. AT THE MOMENT 4.6.
YIELDS DOWN BY ONE
BASIS POINT. IN LINE WITH EXPECTATIONS
YESTERDAY. YOU'VE GOT TO PRICE OUT ANOTHER
THREE CUTS. WHAT'S THE UPSIDE POTENTIAL ON
THAT? LISA: WE WERE HEARING THAT COULD BE
ABOVE 5%. FOR THE NEXT TWO YEARS TALKING
ABOUT THE FED FUNDS RATE THAT WILL REMAIN AT 5% OR 5.5% I
LOVE THE WAY HE BEGAN BECAUSE IT WAS BASICALLY YOU ALL HAVE
BEEN SO BEARISH AND SO WRONG. THE MARKET WENT INTO 2024
EXPECTING SIX FED RATE CUTS. YOU LOOK AT THE DATA AND THAT'S
THE REALITY. >> CAN WE GET THE .10 ON THE
LONG LIST OF RE
ASONS. FINANCIAL CONDITIONS CONTINUE
TO EASE? DOES THAT BECOME MORE IF WE DO
INDEED GO IN THAT DIRECTION. >> THIS IS THE GAME THEORY AT
THE MOMENT, CAN THEY GET THE INFLATION RATE THEY WANT IF THE
MARKET THINKS THEY WILL BE ACCOMMODATING AND TRY TO KEEP
THIS PARTY GOING. RIGHT NOW YOU CAN SEE THIS PLAY
OUT IN THE MORTGAGE MARKET WHEN RATES GO DOWN EVEN ONE HALF OF
1% YOU CAN SEE PEOPLE APPLY FOR MORTGAGES.
RATES RISE BACK UP, EVERYONE GOES AWAY.
THAT'S FINANCIAL CONDITIONS EASING. JONATHAN:
THRE
E CUTS THIS YEAR IS CONSENSUS.
IN THE BOND MARKET AT THE MOMENT WE ARE DOWN TO BASIS
POINTS. IF YOU TURN TO FOREIGN EXCHANGE
WE GET TO THE EURO SLIGHTLY POSITIVE.
SPEAKING OF AN ECB THAT MIGHT NOT BE ABLE TO CUT RATES
ANYTIME SOON. UPSIDE SURPRISE ON INFLATION
OUT OF THE EURO ZONE, IT'S COMING DOWN AND STILL AROUND
THREE WHICH IS BETTER THAN 4, 5, 6 OR SEVEN. LISA: IT IS NOT COMING FROM SERVICES,
THIS IS FROM OTHER AREAS, OF THE GOODS DISINFLATION
CONTINUES. AT WHAT POINT DO YOU NEED TO
SEE SERV
ICES INFLATION COMING IN MORE AGGRESSIVELY? >> JUST LISTEN TO THE AUSTRIAN
CENTRAL BANK GOVERNORS EARLIER THIS MORNING.
THAT MAN IS NOT IN A RUSH ANYTIME SOON.
NEW YORK COMMUNITY BANK SHARES PLUMMETING.
THE COMPANY SAYING MATERIAL WEAKNESSES IN HOW IT
CONTRIBUTES LOAN RISK. THE RESULTS FROM INEFFECTIVE
OVERSIGHT AND MONETARY ACTIVITIES.
AND WHY THEY ALSO ANNOUNCED A CHANGE IN MANAGEMENT WARNING
INVESTORS IT EXPECTS TO MISS A DEADLINE FOR ANNUAL REPORT,
THAT STOCK ON MY SCREEN RIGHT NOW IS OFF TH
E LOWS AROUND 20%. >> TALKING ABOUT A COMPANY
THAT'S BEEN BEATEN UP OVER THE PAST COUPLE OF MONTHS, TO ME I
WOULD THINK THE MORE INTERESTING ASPECT IS HOW IT'S
BEING TREATED AS AN ISOLATED EVENT.
PEOPLE ARE FALLING INTO THE IDIOSYNCRATIC STORY HOOK LINE
AND SINKER. >> IF YOU ARE JUST JOINING US AT HOME AND YOU MISSED THAT
TODAY, I THINK THOSE NUMBERS MATTER. THE LARGEST REAL ESTATE
EXPOSURE COMES FROM $37 BILLION WITH APARTMENT LOANS WITH
REGULATED COMPLEXES. IT IS TRULY A VIDEO SYNCRETIC.
LISA:
THE ISSUE I HAVE IS WHY DO THEY
NOT HAVE A HANDLE ON WHAT RISK MANAGEMENT ISSUES THERE WERE
ONE MONTH AGO. IS THIS AN NYC ISSUE? THE REASON THE ISSUES ARE LOWER
IS BECAUSE OF THAT. JONATHAN: CLEARLY THEY HAD A BIG
EXECUTION PROBLEM. PRESIDENT BIDEN WALKING BACK
COMMENTS TELLING REPORTERS HE'S HOPING THEY HAVE SOMETHING ON
MONDAY. BIDEN SPOKE THE LEADERS OF
QATAR AND EGYPT, HOPING TO BROKER PEACE DEAL BETWEEN
ISRAEL AND HAMAS. THE CYNICAL MIGHT SAY THOSE
COMMENTS WERE MADE JUST AHEAD OF THAT MIC
HIGAN PRIMARY TO GET
SOME SUPPORT HE OTHERWISE DID NOT HAVE. ABIGAIL: ALREADY PEEPED -- ANNMA RIE:
ALREADY PEOPLE ARE SAYING THAT. MUSLIM AMERICANS WERE GOING TO
PROTEST ABOUT, THEY DON'T WANT TO SEE BIDEN IS THE CANDIDATE.
HE SAYS HOPE SPRINGS ETERNAL. IF A DEAL WAS TO GET DONE THEY
WOULD HAVE TO BE BEFORE RAMADAN ON SATURDAY.
YESTERDAY THERE WAS A DEADLY CONFRONTATION IN GAZA AND YOU
OF THE WHITE HOUSE SAYING THEY WANT TO INVESTIGATE THIS. YOU HAVE DOZENS OF PALESTINIANS
DEAD. IT'S GOOD TO MAK
E THE HOSTAGE
TALKS MUCH HARDER WHEN YOU HAVE CONTINUED FLAREUPS LIKE THIS.
JONATHAN: MORE ON THAT LATER. TESLA ROLLING OUT ANOTHER JUST
A NUMBER OF INCENTIVES. THE INCENTIVES INCLUDE
INSURANCE SUBSIDIES AND DISCOUNTS ON SOME PAINT COLORS.
TRIGGERING FURTHER CUTS FROM LOCAL COMPETITION.
WE CAN CALL THIS A PRICE WAR WITH BYD SLASHING ITS MODELS BY
20%. LISA: HOW MUCH DOES THIS CAUSE A REAL
ISSUE FOR TESLA IT'S ALREADY SEEN ITS MARGIN HOPEFULS COME
IN QUITE A BIT. DO THEY THEN AFTER CUT PRICES
IN
THE U.S. OR ARE THESE MARKETS DIVORCED
FROM ONE ANOTHER AS THE U.S. THROWS UP WALLS TO ANY CHINESE
CARS. >> YOU'RE PAYING A LITTLE BIT
MORE THAN 20% TARIFF IF YOU WANTS TO IMPORTED A CHINESE CAR
RIGHT NOW. THE ISSUE IS WORLDWIDE. HE SAID IF THERE AREN'T TRADE
BARRIERS BYD WOULD DEMOLISH THE MARKET. >> WHETHER THEY CAN AND WHETHER
THEY WILL BE ALLOWED TO COMPETE THERE. IF YOU END UP WITH THIS
SITUATION AND WE DON'T KNOW WHAT'S CAN HAPPEN BUT LET'S GO
THROUGH THE WHITE HOUSE STATEMENT FROM THE PRE
SIDENT
YESTERDAY ON THE NATIONAL SECURITY ISSUES AROUND CHINESE
VEHICLES, LET'S SAY THEY GO AS FAR AS BANNING THESE VEHICLES
THAT YOU CAN BUY THEM IN AMERICA ARE THE CHINESE JUST IN
A SIT THERE? THE AUTHORITIES TO ALLOW
FOREIGN MANUFACTURERS TO SELL IN THEIR MARKET WHEN THEY CAN
SELL ABROAD. WHAT HAPPENS NEXT? >> A LOT ARE EXPECTING THERE
WILL BE SOME RETALIATION. WE CAN REALLY GAME THIS OUT IN
ANY LINEAR FASHION. THE OTHER QUESTION IS WHAT IS
THE PRICE AT WHICH AN ELECTRIC VEHICLE CAN BE SOLD T
O
BREAKEVEN AND HOW DOES THIS STYMIE IF YOU HAVE LESS
COMPETITION, HOW MUCH IS IT KEEP PRICES HIGHER ON ELECTRIC
VEHICLES IN THE UNITED STATES THAT LEADS TO LACK OF DEMAND
WHICH WE'VE SEEN CONSISTENTLY. >> YESTERDAY THIS WAS SLIGHTLY
DIFFERENT, IT WASN'T ABOUT UNFAIR TRADE PRACTICES, BIG
SUBSIDIES, STATE-SPONSORED INDUSTRIES.
WE HAVE THAT HERE IN AMERICA AS WELL AS EUROPE.
THIS WAS ABOUT NATIONAL SECURITY. IT'S A VERY DIFFERENT
INGREDIENT. >> HOW MUCH ARE PEOPLE WILLING
TO GO WITH THIS AND THIS
IS THE REASON I SAY IT'S ABOUT
NATIONAL SECURITY SO IT WILL GO THROUGH BUT WHAT DOES IT MEAN
FOR ELECTRIC VEHICLE ADOPTION. I THINK THAT SOMETHING A LOT OF
AUTO MANUFACTURERS ARE GRAPPLING WITH. >> TESLA A LITTLE LOWER IN THE
PREMARKET. OIL POSTING A SECOND STRAIGHT
MONTHLY GAIN EXPECTING VOLUNTARY SUPPLY CUTS INTO THE
SECOND QUARTER. THE MARKET ANTICIPATES A FULL
ROLLOVER INSTEAD I BELIEVE THE CARTEL HAS A CHANCE TO ADD A
BIT OF EXTRA SUPPLY TAKING SOME SHORT-TERM PAY FOR A LONG-TERM
GAIN. CAN
YOU WALK US THROUGH THAT?
WHAT WOULD THE LONG-TERM GAIN BE FOR DOING THAT NOW. >> BRENT CRUDE IS IT $85 A
BARREL AND I THINK WHAT OPEC IS DOING CONTINUING TO RESTRING
PRODUCTION IN THE FIRST QUARTER INTO THE SECOND QUARTER IS CAN
IT CONTINUE ADDING A FEW MORE DOLLARS AT THAT PRICE AND IT'S
NOT TO BE SUBSIDIZING THE U.S. SHALE INDUSTRY.
WE KNOW THAT EACH DOLLAR METALS ASH MATTERS THAT EACH ONE
TRIGGERS A SIGNIFICANT INCREASE AND I THINK THAT THE TIME IS
FOR OPEC TO SAY 80, 85 WE DO NOT NEED TO SU
BSIDIZE THEM THE
U.S. SHALE INDUSTRY BECAUSE IF OPEC
CONTINUES TO RESTRAIN NOW WHAT THEY WILL FIND IS HARDER LATER
IN THE YEAR. THAT IS THE GAME. >> THERE'S A REAL QUESTION OF
WHERE THE LINE IN THE SAND IS FOR OPEC-PLUS.
HOW LOW CAN PRICES GO BEFORE IT IS UNSUSTAINABLE FOR A GROUP OF
COUNTRIES THAT HAVE RELIED ON CRUDE INCOME FOR A MOST ALL OF
THEIR INVESTMENTS. >> YOU CANNOT ASK THAT QUESTION
TWO OPEC-PLUS IT VERY MUCH DEPENDS ON WHICH COUNTRY YOU
ASKED. THERE ARE SMALLER RETAIL COUNTRIES IN TH
E MIDDLE EAST
WHICH CAN LEAVE PERFECTLY HAPPY WITH CURRENT PRICES MUCH LOWER
GRADE I THINK SOME COUNTRIES IN THE MIDDLE EAST 65, $70, YOU
ASKED THE SAME QUESTION IN SAUDI ARABIA. THE CURRENT PRICE IS THE BARE
MINIMUM FOR PEOPLE TO ACCEPT A VERY SIMILAR QUESTION RUSSIA.
THE KEY DIFFERENCE FROM THE OPEC WE USED TO KNOW 10 OR 20
YEARS AGO IT IS THE SAUDI'S WHO REALLY WANT THE HIGH PRICES. >> WHAT'S THE SAUDI CEILING? >> THE SAUDI FLOOR FOR THE
PRICE IS SOMEWHERE AROUND $80 A BARREL.
THEY WANT TO GU
ARANTEE 80 SO THEY'RE AIMING SOMEWHERE
BETWEEN 80 AND 85. I THINK THEY HAPPY KEEP OIL
PRICES ALL THE WAY UP TO $100. THEY DON'T SEE A PARTICULAR
PROBLEM FOR THE GLOBAL ECONOMY. THEY BELIEVE THE ECONOMY CAN
TAKE IT. THEY ARE SITTING COMFORTABLY
SOMEWHERE BETWEEN 80 AND 100. LISA:
I'M GOING TO REVEAL SOMETHING THAT YOU ADMITTED YOU ARE
STOCKPILING CHOCOLATE. WHY ARE YOU STOCKPILING
CHOCOLATE? DO YOU THINK IT'S CAN GET THAT
MUCH WORSE OUT THERE? >> I STOCKPILED ON ALL OF OIL
LAST YEAR AND I WAS HAP
PY WHEN THE PRICE WENT THROUGH THE ROOF.
THE PRICE OF COCOA IS AT 150%. THE PRICE OF CHOCOLATE ON THE
SUPERMARKET IS GOING TO GO UP AND GO UP QUITE SIGNIFICANTLY
OVER THE NEXT SIX MONTHS, THE MARKET FOR COCO IS FACING A
STRUCTURAL DEFICIT. THEY ARE WELL BEHIND THE DEMAND
BETWEEN DEMAND AND PRODUCTION. IT'S GOING TO BE IN 2024 THE
LARGEST AND 65 YEARS. THE ONLY CURE FOR THE MARKET
RIGHT NOW IS HIGHER PRICES SO WE ARGAN A C HIGHER PRICES IN
THE SUPERMARKET SO I'M JUST ANTICIPATING FOR THAT. ANNMAR
IE:
THAT'S ALREADY WHAT THESE CHOCOLATE COMPANIES ARE TELLING
US. WHEN YOU LOOK AT THE MARKET IS
IT WHAT'S GOING ON IN WEST AFRICA IN TERMS OF WEATHER
DROUGHT AND DISEASE AND SOME OF THESE CROPS OR IS IT TARIFFS
COMING INTO PLAY FROM EUROPE. >> THERE IS A MIX OF FACTORS
AND CERTAINLY THE WEATHER HAS BEEN VERY UNFAVORABLE.
IT'S BEEN DRY RECENTLY. IT WAS TOO WET A FEW MONTHS AGO.
WE HAVE DEFORESTATION AND THEY HAVE BEEN PRODUCING NEW PLANTED
AREA, THAT'S NOT CAN I HELP. I THINK THE BIGGEST PROBLEM
IS
THEY ARE RELIANT ON A GROUP OF WEST AFRICAN COUNTRIES FOR 60%
OF THE COCO. THAT'S IVORY COAST, NIGERIA AND
CAMEROON. THERE IS BEEN PLANTING IN THOSE
COUNTRIES FOR THE LAST FEW YEARS.
THE TREES ARE PRODUCING LESS AND LESS AND THOSE TREES ARE
MORE SENSITIVE TO BAD WEATHER AND DISEASE.
WE HAVE HAD A LOT OF THAT IN RECENT MONTHS.
DISEASES ARE QUITE WIDESPREAD. IT WAS IN GHANA AND IVORY COAST
AND THAT'S THE BIG PROBLEM AT THE MOMENT.
IT'S A COMBINATION ON ALL OF THE ABOVE REALLY RESTRAINING
SUPPL
Y THIS YEAR PERHAPS ALSO INTO NEXT YEAR. JONATHAN:
WOULD YOU LIKE TO EXPLAIN TO THE AUDIENCE WHY THEY SHOULDN'T
WORRY BECAUSE THE CHOCOLATE HERE ISN'T REALLY CHOCOLATE. >> YOU REALLY WANT TO PUT ME IN
TROUBLE. I REALLY AS WITH ALL OF OIL I
TRY TO GET HIGH QUALITY CHOCOLATE HERE IN EUROPE.
JONATHAN: IT COMES FROM ONE PLACE, >> IT
IS NOT ITALY. JONATHAN: GOOD TO CATCH UP. LISA:
A LOT OF THE ITALIAN OIL IS MADE WITH SPANISH -- JONATHAN:
THAT'S NOT THE REAL STUFF. LISA: I'VE HAD THIS DEBATE ALREADY.
YOU'VE TOUCHED ON A REALLY IMPORTANT POINT.
IF IT WAS SPANISH WHY WOULDN'T THEY LABEL IT SPANISH?
WHY WOULDN'T THEY? LISA: PEOPLE THINK.
IT'S WORTH MORE FROM ITALY. JONATHAN:
BECAUSE ITALY IS BETTER. >> THE AVERAGE HERSHEY'S BARS
11% CHOCOLATE. >> I GET THE DARK. >> THAT'S IF YOU WANT LIKE THE
HEALTH BENEFITS. PEOPLE LIKE DIFFERENT THINGS.
I DON'T UNDERSTAND WHITE CHOCOLATE. >> MORE SUGAR APPARENTLY. LISA: I THINK HE IS ONTO SOMETHING
WITH STOCKPILING. IT'S ON MY LIST. LET'S GET YOUR
STORIES EL
SEWHERE PRAYED HERE'S YOUR BLOOMBERG BRIEF WITH DANI
BURGER. DANI:
THOMAS JORDAN STEPPING DOWN THE END OF SEPTEMBER.
HE'S BEEN THE SWISS CENTRAL BANK CHIEF FOR MORE THAN A
DECADE AND STEERED THEM THROUGH THE DEBT CRISIS AND ADOPTED THE
WORLD'S LOWEST INTEREST RATE. DON'T MISS OUR INTERVIEW WITH
THOMAS JORDAN TODAY. DELL IS HEADED FOR THE BIGGEST
GAIN IN SIX MONTHS OF 24% AFTER REPORTING FOURTH-QUARTER
RESULTS THAT BEAT EXPECTATIONS. ANALYSTS A DEMAND FOR AI
SERVERS IS DRIVING MOMENTUM. THE STOCK
IS MORE THAN DOUBLED
OVER THE PAST 12 MONTHS. META WINDING DOWN HIS NEWS
FEATURE IN THE U.S. AND AUSTRALIA.
THEY WILL WITHDRAW SUPPORT IN APRIL. PUBLISHERS WITH EXISTING
AGREEMENTS WILL STILL BE ABLE TO PUSH CONTENT AT LEAST UNTIL
THEIR DEALS EXPIRE. LAWMAKERS HAVE BEEN PUSHING FOR
THEM TO COMPENSATE PUBLISHERS FOR THEIR CONTENT BUT THEY SAY
DEMAND FOR THE SERVICE HAS DECLINED. JONATHAN:
THANK YOU VERY MUCH. STRIKING A DELEGATE BALANCE IN
CORPORATE CREDIT. >> WE FEEL LIKE THIS START OF
THE YEAR
IS ALMOST A REPEAT OF LAST YEAR FOR SURPRISES TO THE
UPSIDE AND INFLATION. YIELDS MOVING HIGHER, CREDIT
SPREADS TIGHTENING AND THEN SOMETHING HAPPENS. JONATHAN:
YOU KNOW WHAT CONFUSES ME, REESE'S PIECES. LISA:
IT'S PEANUT BUTTER. ANNMARIE: THAT'S WHAT THEY ARE PUSHING
OUT. >> I JUST DON'T GET IT.
YOU REALLY LIKE THAT DON'T YOU. >> THAT'S MY DESSERT. JONATHAN:
FROM NEW YORK, THIS IS BLOOMBERG. JONATHAN:
EQUITY FUTURES ON THE S&P NEGATIVE BY 0.05% BOND MARKET
YIELDS LOWER BY A SINGLE BASIS POINT.
IN FOREIGN EXCHANGE, THE EURO
POSITIVE BY 1/10 OF 1%. UNDER SURVEILLANCE THIS MORNING
STRIKING A DELEGATE BALANCE IN CORPORATE CREDIT. >> WE FEEL LIKE THIS START OF
THE YEAR IS ALL MOST A REPEAT OF LAST YEAR. WE HAD A SLEW OF GOLDILOCKS
DATA , A SURPRISES TO THE UPSIDE IN INFLATION, YIELDS
MOVING HIGHER, CREDIT SPREADS TIGHTENING AND THEN SOMETHING
HAPPENS. >> HERE'S THE LATEST,
ENTHUSIASM REMAINS IN THE CREDIT MARKET AS SPREADS GRIND
DOWN IN THE FACE OF A RECORD FEBRUARY FOR CORPORATE DEBT
ISS
UANCE. EXPECTATIONS FOR 2024 ARE HIGH.
AND POSITIONING, OF THE FUNDAMENTAL RISK PROFILE FOR
CREDIT HAS IMPROVED WITH PROGRESS IN FINANCING SPREADING
AT THESE LEVELS. TALK TO US WHY YOU THINK THESE
THEMES CAN CONTINUE. >> THANK YOU FOR HAVING ME.
I THINK WHAT CREDIT IS REALLY REFLECTING HIS DOWNSIDE RISKS
ARE MUCH LOWER SO IF YOU ARE AN INVESTOR YOU ARE BUYING CREDIT
NOW BECAUSE A LOT OF THE RISKS THAT CAME INTO THE YEAR LOOK
BETTER AND CREDIT PROVIDES GOOD CARRIE. THE MATURITY WALL AND HIGH-YIEL
D YOU'VE CHIPPED AWAY
40% OF THE EXPECTATIONS OF MATURITIES WE THOUGHT WOULD
HAVE TO BE REIFIED THIS YEAR AND YIELDS ARE LEVELS RELATIVE
TO OCTOBER WERE REFINANCINGS ARE MORE OF A SPEED BUMP RATHER
THAN A ROADBLOCK -- ROADBLOCK IF YOU WILL. >> HOW MUCH SUPPLY THAT WE HAVE
SEEN HAS BEEN PULLED FORWARD FROM WHAT WE EXPECTED AND HOW
MUCH OF IT WAS CATCH UP FROM LAST YEAR. >> LET'S LOOK AT IG.
FEBRUARY WE SAW 200 BILLION OF ISSUANCE AND THE HEADLINE
NUMBER HAS TO BE TAKEN WITH SOME CAVEATS.
ABOUT 25
% OF THAT IS JUST FOR JUMBO, DEALS.
THE HEADLINE NUMBER IS MUCH MORE IN LINE WITH HISTORICAL
AVERAGES WHEN YOU TAKE THOSE OUT AND WE'VE ALSO SEEN A LOT
OF THE ISSUANCE IS REFINANCE. IT'S NOT NECESSARILY A LOT OF
NEW NET SUPPLY THE MARKET HAS TO ABSORB WHICH SOMEONE
EXPLAINS WHY CREDIT SPREADS HAVE BEEN ABLE TO MAINTAIN
UPTIGHT LEVELS. LISA: WHAT'S THE BIGGER RISK FOR YOU?
THE INVESTMENT-GRADE SIDE OR THE HIGH-YIELD SIDE.
THE INTEREST RATE SENSITIVITY OR THE SENSITIVITY TO RETURN. >> WE HAVE A FE
W BROADLY OF
DECOMPRESSION. WE MAINTAIN VERY SUPPORTIVE
TECHNICAL BACKDROP AND STILL HAVE YIELD BUYERS COMING IN AT
THESE LEVELS. HIGH-YIELD I THINK COULD HOLD
IN WELL ASSUMING RATE STAY AT THESE LEVELS AND GROWTH HOLDS
UP OK. BUT IF WE SEE ANY RISK OUTSIDE
OF THE BASELINE SCENARIO I WOULD EXPECT HIGH-YIELD TO BE
MORE VULNERABLE. >> WE GOT SOME OF THE FLOWS
DATA OVERNIGHT AND WHAT WE COULD SEE HIS PEOPLE ARE STILL
PILING INTO BONDS BUT INVESTMENT-GRADE U.S.
TREASURIES YOU CAN SEE THOSE INFLOWS.
YOU CAN SEE $3 MILLION INTO
TREASURIES AND INTO INVESTMENT-GRADE.
IT WAS THE FIRST OUTFLOWING U.S. HIGH-YIELD BONDS GOING BACK
EIGHT WEEKS. IT WAS NOT THAT MUCH. DOES THAT MEAN SOMETHING TO YOU
ABOUT A TIDE SHIFTING? >> IT SPEAKS TO HOW MUCH WE
RALLIED IN HIGH YIELDS. WE ARE GETTING CLOSE TO 300
BASIS POINTS IN SPREADS. AT THESE LEVELS IT WOULD MAKE
SENSE TO BACK UP A BIT. OUR SPREAD TARGET FOR YEAR END
IS 350 BASIS POINTS SO I THINK INVESTORS WHO ARE BUYING CREDIT
FOR THE SPREADER THE RISK PREM
IUM ARE STARTING TO THINK A
LITTLE BIT MORE NOT JUST PILING IN BUT YOU SEE MORE BUYING AND
SELLING RATHER THAN JUST ALL IN. JONATHAN:
WE JUST HAD A NOTE I'M SURE YOU HEARD US TALKING ABOUT IT THE
FED WILL NOT CUT RATES IN 2024. THE REALITY IS THE U.S.
ECONOMY IS NOT SLOWING DOWN AND THE FED HAS PROVIDED A STRONG
TAILWIND TO GROWTH SINCE SEPTEMBER. >> WE STILL HAVE AN EXPECTATION
OF FOUR RATE CUTS THIS YEAR. THE FED WILL START IN JUNE AND
CONTINUE FOR THE REST OF THE YEAR. FOR CREDIT THAT'S GOING
TO
PROVIDE RELIEF AND A LOT OF OUR LEVERAGE FINANCE ISSUERS ARE
EXPECTING THAT IN PARTICULAR FLOATING RATE LOAN ISSUERS WILL
NEED TO SEE TO GET REFINANCINGS DONE.
I THINK THE SCENARIO TORSTEN HAS LAID OUT WOULD BE BEARISH
FOR THE LOAN MARKET WHERE YOU HAVE PRIVATE EQUITY SPONSORS
AND A LOT OF THESE ISSUERS ARE THINKING I JUST NEED TO MAKE IT
SIX OR 12 MONTHS AND THEY'LL HAVE THAT ON THE BORROWING SIDE.
>> DOES THAT BECOME -- IS THAT SORT OF THIS IDEA THAT IF WE
DON'T GET THESE RATE CUTS. >> YOU
WILL SEE THE MATURITY
WALL AND THE IDEA OF INTEREST COVERAGE, BACK INTO RISKS THIRD
OR FOURTH QUARTER IF WE DON'T SEE THOSE RATE CUTS.
MATURITIES THAT HAVE TO BE REIFIED THIS YEAR WE ARE ALMOST
HALFWAY THROUGH THOSE BUT LOOKING WE WILL HAVE THE
MATURITY WALL STEP BACK UP AGAIN.
THIS COULD BE COMING BACK INTO THE DISCUSSION. >> WHICH COMPANIES ARE TRULY
SURVIVING TILL 2025. DOES THIS CUTTING CYCLE ON THE
PRECIPICE OF FAILING SURVIVE? >> I THINK IT'S NOT JUST THE
100 BASIS POINTS BUT THERE'S A CO
NFIDENCE THE CUTTING CYCLE IS
UNDERWAY AND IF YOUR PRIVATE EQUITY SPONSOR YOU HAVE CASH ON
HAND. YOU WILL HAVE TO PICK AND CHOOSE AND YOU WON'T INFUSE
CASH INTO EVERY COMPANY YOU OWN IN ORDER TO HELP THEM SURVIVE.
THERE IS THIS ELEMENT OF IF THE FED CUTTING CYCLE IS UNDERWAY
WE COULD SEE THREE CUTS THIS YEAR, FOR CUTS NEXT YEAR I
THINK THERE IS CONFIDENCE THAT I WILL PUT THIS CASH INTO A
COMPANY BECAUSE I CAN SEE IT DOWN THE LINE BEING ABLE TO
SURVIVE. >> CAN YOU DESCRIBE HOW THE
MOOD HAS CHANGE
D WITH CLIENTS? IN THE EQUITY MARKET WE TRY TO
WORK OUT POCKETS OF EXUBERANCE OVERTAKEN THINGS A LITTLE BIT
TOO FAR. HOW WELL RECEIVED HER THESE
MESSAGES IN YOUR CIRCLE? >> ONE WAY TO SEE THAT WERE
QUANTITATIVELY IS POSITIONING. A POSITIONING INDICATOR IN THE
90TH PERCENTILE. I THINK THE ONE PLACE WE
HAVEN'T SEEN INVESTORS ADD IS THE LOWER DEBATE PART OF THE
MARKETS. YOU ARE NOT SEEING A WHOLESALE
BUYING OF THAT BUT WHAT SINGLE IS IN HIGH YIELD.
THE RISKIEST RATING BUCKET OVER THE LAST MONTH. I
THINK IT REFLECTS POSITIVE
CONVICTION FOR THE REST OF THE YEAR AMONG INVESTORS. >> SPREADS SUPER TIGHT.
TONS OF SUPPLY. >> I REALLY THINK IT'S A GOOD
POINT BECAUSE IT MATTERS WHY THE FED IS CUTTING RATES.
IF THEY ARE CUTTING BECAUSE THEY'RE TRYING TO KEEP THIS
PARTY GOING THEN GREAT, GET IT. BUT IF IT'S BECAUSE THERE'S
REAL DAMAGE IT'S GOOD TO CREATE A VERY DIFFERENT TYPE OF
SCENARIO THAT DOESN'T LOOK AT THRIVING IN 25 BUT MAY BE HELD
LONG IT IS STILL. >> THANK YOU SO MUCH. COMING UP ON THIS PRO
GRAM,
LAURA OF DISH LIVE FROM NEW YORK CITY, COUNTING YOU DOWN TO
THE OPENING. EQUITY FUTURES ARE TOTALLY
UNCHANGED ON THE S&P 500. YIELDS UP A LITTLE BIT LOWER
DOWN ABOUT ONE BASIS POINT. CRUDE IS HIGHER. 7963. >> RATES MARKETS ARE MOVING
CLOSER TO WHERE WE THINK THINGS SHOULD BE. >> A LOT OF RISK IN THE FED
WAITS A LITTLE BIT LONGER. >> THIS POINT STILL IS ONCE WE
START CUTTING WE WILL CUT AGGRESSIVELY TOWARDS A
NORMALIZED WORLD. >> THE FED IS MORE LIKELY TO
SIMPLY REMAIN ON THE SIDELINES RATH
ER THAN REENGAGE IN RATE
HIKES. >> IT'S BECOMING LIKELY MAYBE
WE HAVE NO RATE CUTS THIS YEAR. >> THIS IS BLOOMBERG
SURVEILLANCE WITH JONATHAN FERRO, LISA ABRAMOWICZ AND
ANNMARIE HORDERN. JONATHAN: LIVE FROM NEW YORK CITY THIS
MORNING, GOOD MORNING. FOR AUDIENCE WORLDWIDE. >> LET'S GET YOU TO THE WEEKEND.
JONATHAN: WHAT ARE YOU BREAKING UP THE
SHOW FOR? CAN YOU SEND THE CAMERA BACK.
I CAN DO IT AGAIN. GET THE CAMERA TO GO BACK.
I CAN SEND THE CAMERA BACK. LISA:
LET'S GET YOU TO THE WEEKEND. JONAT
HAN:
I NEED THE ACCOUNT IN MY EAR. THANK YOU. SILENCE.
LET'S GET YOU TO THE WEEKEND LIVE FROM NEW YORK CITY THIS
MORNING, GOOD MORNING FOR OUR WORLDWIDE THIS IS BLOOMBERG
SURVEILLANCE. MAYBE I WOULD'VE GOT THERE. >> THERE'S NO WAY YOU WOULD'VE
GOTTEN THERE. MAYBE WE WON'T GET ANY CUTS.
I WILL GO THROUGH THEM NOW. LISA ABRAMOWICZ EVERYONE.
ANNMARIE HORDERN, JONATHAN FERRO.
THE FED WILL NOT CUT RATES IN 2024.
THE ECONOMY NOT SIMPLY SLOWING DOWN. THE FED PIVOT PROVIDING A
STRONG GROWTH SINCE SEPTEM
BER. >> MORE PEOPLE ARE COMING
AROUND TO THIS IDEA OF BEING IN THE MARGINS.
HOW MUCH IS THAT CREATE A REALITY CHECK TO THE MARKET
HITTING NEW HIGHS WHERE EVERYONE SEEMS TO BE SHRUGGING
OFF CONCERNS. I THINK IT'S BEEN AN EXHAUSTING
WHIPSAW FEELING OF INCREMENTAL MOVES TO SORT OF GRINDING
HIGHER NOT FEELING TOO ENTHUSIASTIC BUT THERE IS
NOWHERE ELSE TO GO. JONATHAN: LET'S PUSH AHEAD TO NEXT WEEK.
PAYROLLS FRIDAY. A SNEAK PEEK OF THE SURVEY.
190 K IS THE MEDIAN ESTIMATE. THIS MOVING TARGET WE'VE PU
T
TOGETHER MORE OF THESE ESTIMATES FOR YOU. 190,000 IS THE NUMBER.
IF YOU LOOK AT UNEMPLOYMENT WITHOUT UNEMPLOYMENT SIT AT 2%
FOR TWO CONSECUTIVE YEARS. LOOKING FOR THIS TO STICK AT
3.7. >> THERE'S A REASON THIS IS
COMING OUT SAYING THEY WON'T GET RATE CUTS THIS YEAR.
IF YOU COME UP WITH A THEORY IT MIGHT CALL FOR WEAKNESS.
IF YOU LOOK AT THE REALITY IT IS NOT SHOWING THAT.
SO WHEN YOU SAY THE REALITY IS PORTRAYING STRENGTH. >> THAT'S THE REALITY IN THE
ECONOMY. LET'S TALK ABOUT POLITICS AS
WELL
. AVOIDING A NEAR-TERM GOVERNMENT
SHUTDOWN. I'M NOT SURE IF WE CAN AVOID
ONE ENTIRELY THIS YEAR THEN WE HAVE SUPER TUESDAY WITH NIKKI
HALEY'S CAMPAIGN HOLDING ON. THE PRESIDENT DELIVERED THE
STATE OF THE UNION. >> HUGE WEEK FOR POLITICS NEXT
WEEK. WHAT IS HE GOING TO SAY IN THE
STATE OF THE UNION THAT PUSHES HIS CAMPAIGN FORWARD. >> WE HAVE REPORTING HE WILL
TALK ABOUT TAX CUTS, THEY HAD A CHANCE TO ROLL BACK A LOT OF
TRUMP ERA TAX CUTS EARLY ON IN HIS ADMINISTRATION AND THEY DID
NOT DO IT. THEY
WERE NOT ABLE TO CLOSE
CARRIED INTEREST LOOPHOLE. SO WHAT IS HE GOING TO TALK
ABOUT ON THE CAMPAIGN TRAIL. WE HAVE SEEN HIM TALK ABOUT
RAISING THE CORPORATE TAX RATE GETTING CLOSER TO THE 28%.
POLITICO REPORTING ONE OF YOUR FAVORITES, HE MIGHT ADDRESS
SHRINK FELICIA AND. TALKING ABOUT THE ECONOMY, THE
JOB MARKET IS DOING WELL. UNDER 4% FOR TWO YEARS BUT
INFLATION IS STILL HURTING THEM WHEN IT COMES TO CONSUMERS AND
THEY WILL BRING IT UP BY SAYING ACTUALLY IT'S THE COMPANY'S
FAULT. >> I CAN'T WA
IT FOR FRIDAY
MORNING COVERAGE OF THAT SPEECH. A DELAYED START TO THIS HOUR.
WE CAN CUT OUT THE BEGINNING FOR THE ONLINE VERSION.
I SAID LET'S GET YOU TO THE WEEKEND. LISA:
IT'S GETTING INTO 8:00. IT'S OK. JONATHAN: CAN I PROCEED?
EQUITIES UNCHANGED ON THE S&P 500. ARE YOU TURNING INTO TOM? IN THE BOND MARKET, 4.25 ON THE
10 YEAR. MICHAEL ON WHY MARKET TO LOVE
MOVE TO RUN. WHY EV'S WILL BE CENTRAL TO U.S.
ECONOMIC LEADERSHIP AND LOWERING OF FS INVESTMENTS ON
WHY SHE SEES INTEREST RATES NORMALIZI
NG AT HIGHER LEVELS.
WE BEGIN OUR TOP STORY KICKING OFF STOCKS AT ALL-TIME HIGHS
AND STRATEGISTS ON WALL STREET RACING TO GREAT TARGETS.
SAYING I'M QUITE CONSTRUCTIVE ON THE ECONOMY AND MARKETS.
I THINK SEEING 5500 ON THE S&P OR EVEN HIGHER IS A DISTINCT
POSSIBILITY. MICHAEL IS WITH US AROUND THE
TABLE. GOLDMAN SACHS, 5200. IT'S NOT GREAT.
-- THAT IS AN UPGRADE. YOU WOULD SEND -- 5500 AND
BEYOND, WHAT GETS US THERE? >> WE HAVE THIS CONDITION AFTER
THE DECEMBER OMC WHICH IS WE'VE GOT THE FED STOC
K TALKING ABOUT
HIKES. I'M ON THE PAGE ABOUT VERY FEW
CUTS MEANING ZERO THIS YEAR BUT I WOULD ALSO ARGUE THE FED, OF
THE LACK OF HIKING IS WHAT'S KEY HERE.
THEY'VE ANNOUNCED THE SORT OF BIG MESSAGE OF PIVOTING AWAY
FROM HIKING IF ANYTHING THE ACTION IS ON THE CUTTING SIDE
RATES. NOW THE DUAL GOLDILOCKS
CONDITION MEANS CONCURRENTLY THIS IS REALLY UNUSUAL BY THE
STANDARDS OF THE LAST 12 TO 14 YEARS IS YOU HAVE A WORKING
CONSUMER IN THIS CONDITION AS WELL. BUT YOU HAVE THE WORKER CONSUMER WERE REAL
WAGES ARE
CLIMBING, INFLATION BROADLY IS FALLING IN YOUR SEEING WAGE
GAINS GO HIGHER AND HIGHER. THE CONCURRENCE OF THAT WHERE
YOU HAVE A FED PIVOTING DOING A DOVISH PIVOT INTO 3.7%
UNEMPLOYMENT WITH GDP CONTINUING TO BE STRONG IS
REALLY PRETTY REMARKABLE. >> YOU CAN IMAGINE A WORLD
WHERE WE GET TO 5500 THIS YEAR WITH NO RATE CUTS IN 2024. >> I CAN ACTUALLY.
WHAT IT REALLY UNDERSCORES A LOT OF THIS IS A SHIFT, A SLOW
SUBTLE BUT INCREASING PROBABLE SHIFT OF GOING FROM WHAT WE
KNEW BEFORE COVID S
ORT OF THE LOW NOMINAL WORLD INTO
SOMETHING WITH A HIGHER INFLATION FORM BUT ALSO GROWTH.
AND A HIGHER NOMINAL GDP OUTCOME THERE WHERE INTEREST
RATES ARE GOING TO ADJUST TOWARDS THAT. SO I THINK -- I AM OFFICIALLY
AT ONE TO TWO CUTS THIS YEAR. I THINK THERE'S A VERY
REASONABLE CASE FOR ZERO CUTS BUT IF THE EARNINGS ARE THERE.
LET'S NOT FORGET YOU PUT UP MY QUOTE ABOUT THE -- WHAT WILL
DRIVE THE RALLY HERE. YOU'RE LOOKING AT 20% EARNINGS
GROWTH YEAR-OVER-YEAR FOR THE MAG SEVEN.
EVEN AS INFLATED A
S THOSE MULTIPLES ARE, OF THE
PRICE-EARNINGS TO GROWTH RATIO IS AROUND 1.1 FOR THE MAG SEVEN.
JONATHAN: YOU KEEP SAYING SEVEN BUT YOU
ACTUALLY SAID SIX. WHO'S DROPPED OFF THIS LIST?
MICHAEL: DROPPING THEM OUT IS LESS
CONSEQUENTIAL. OF ALL THOSE STOCKS TO REPORT
THE ONE THING THAT WAS THE MOST PROBLEMATIC ON EARNINGS THERE,
THEY ARE ALSO THE SMALLEST AND HAVE A WHOLE BUNCH OF SECULAR
HEADWINDS TO FACE WITH EEEV NARRATIVE EVOLVING AS WELL.
BUT THOSE CORE SIX OF THE BIG ONES AND THOSE ARE THE ONES
DRIVING THE BIG TECH STORY BUT THEY ARE REALLY DRIVING AND
UNDERSCORING THE BROADER S&P. JONATHAN: DO YOU NEED -- LISA:
DO YOU NEED DIFFERENT LEADERSHIP OR IS IT THE SAME
THING BASICALLY DRIVING THIS EVEN IF RATES GO HIGHER AND
CONTINUE UNDERPERFORMANCE FOR THE RUSSELL 2000 AND OTHER
ISSUES. >> THE TEXTBOOK TELLS YOU THE
LACK OF A REAL VULNERABILITY, I DON'T KNOW IF IT HAS TO BE THE
CASE. IF THESE COMPANIES ARE ABLE TO
GENERATE THE EARNINGS THE STREET EXPECTS THEM TO, AND
THEY END UP LIFTING UP
THE OTHER ONES.
AS LONG AS THE OTHER 490 STOCKS DON'T FALL APART ON EARNINGS OR
FUNDAMENTAL BASIS THERE, THEY BASICALLY HOLDS TOGETHER.
I DON'T SEE WHY IT HAS TO BE PROBLEMATIC. >> WHAT IS THE HEDGE.
BASICALLY ARE TALKING ABOUT THE POTENTIAL FOR NO RATE CUTS AND
A SELLOFF IN BONDS AT A TIME WHERE THAT USED TO BE THE HAVEN.
WHERE'D DO YOU GO NOW? >> IF YOU WANT A MARKET HEDGE I
WOULD ADVOCATE LOOKING AT CALLS ON THE S&P PUT.
FOR A WHOLE HOST OF REASONS. IF YOU'RE ASKING ME ABOUT
DURATION IS NOT A
S SAFE. BECAUSE OF THIS LOWER MOTION
VERSION OF THE BACKUP IN YIELDS, I THINK IT'S -- I DON'T
WANT TO SAY BIG TECH, BUT THEY ARE -- THE BUSINESS MODELS ARE
PRETTY STRONG AND SO FORTH. IF YOU ARE A LONG ONLY
MANAGEMENT YOU HAVE TO THINK ABOUT THAT, THOSE EARNINGS EVEN
AS INFLATED AS EVALUATIONS ARE. YOU LOOK AT THINGS LIKE GOLD
AND SO FORTH. >> I'M LISTENING TO YOU TALK
AND THINKING IF YOU SEE BIG TECH AS THE GROWTH DRIVER, AS A
POTENTIAL SAFE HAVEN WHY NOT JUST LEVER UP, GO ALL IN ON
THEM COMPLE
TELY. >> I THINK IT WOULD PROBABLY
REFRAIN FROM DOING THAT. I THINK THE MARKET IS CAPABLE
OF JUST PUSHING THIS FOR A WHILE. WHAT I'M SAYING EFFECTIVELY IS
THE VALUATIONS FOR THE MARKETS GOING THROUGH MASSIVE
CONTORTIONS OVER THE LAST FIVE YEARS.
THE INCREASING RATES AND ALL THAT. I THINK THE EXPANSION OR
CONTRACTION STORIES IS KIND OF BEHIND US.
RIGHT NOW IF THERE IS EARNINGS GROWTH THOSE WILL GO HIGHER.
I THINK YOU CAN EXPECT EARNINGS GROWTH FROM THE MAGNIFICENT SIX
TO BE REASONABLY STRONG THIS
YEAR.
I HAVE BIGGER QUESTIONS ABOUT THE S&P. >> YOU DROP TESLA OUT OF THE
MAG SEVEN. HOW INVESTABLE IS THE AUTO
SECTOR IN AMERICA RIGHT NOW? >> I'M NOT AN EXPERT ON THE
AUTO SECTOR BUT I WOULD CERTAINLY SAY THIS THAT I THINK
THERE ARE MASSIVE QUESTIONS ABOUT WHETHER THE EV IS GOING TO STICK AND I WOULD SAY
WHETHER THE PRICING CAN ADJUST IN THE BUSINESS MODELS CAN
ADJUST, I THINK IT IS PRETTY TRICKY. >> MICHAEL, THANK YOU.
WE WILL BE TALKING WITH AN EXPERT IN JUST A MOMENT.
YOU'VE ALWAYS GOT AN
OPINION. LET'S GIVE AN UPDATE ON STORIES
ELSEWHERE. HERE'S YOUR BLOOMBERG BRIEF
WITH DANI BURGER BRAIDED -- DANI BURGER. DANI:
JORDAN HAS BEEN THE SWISS CENTRAL BANK'S CHIEF FOR MORE
THAN A DECADE BRAIDED HE STEERED THE ECONOMY THROUGH THE
EURO AREA DEBT CRISIS AND ADOPTED THE WORLD'S LOWEST
INTEREST RATE AND ALSO HANDLED THE COLLAPSE OF CREDITS WE
SPRAYED DON'T MISS OUR INTERVIEW LATER TODAY.
PRESIDENT BIDEN PLANS TO INCREASE TAXES ON CORPORATIONS
AND THE WEALTHY AND LOWER PRESCRIPTION DRUGS AD
DRESSING
THAT IN THE STATE OF THE UNION NEXT WEEK.
BIDEN PLANS TO LAY OUT HIS ECONOMIC AGENDA FOR POTENTIAL
SECOND TERM IN OFFICE TRYING TO CONVINCE VOTERS HIS
ADMINISTRATION'S EFFORTS WARRANT ANOTHER TERM.
THE STATE OF THE UNION ADDRESS TAKES PLACE ON THURSDAY EVENING.
JANET YELLEN SAYS ANY PLANS TO SEIZE RUSSIAN ASSETS CANNOT BE
SEEN AS A REPLACEMENT FOR AID TO UKRAINE.
UKRAINIAN AID HAS BEEN A KEY ISSUE HELD UP IN CONGRESS.
IN AN INTERVIEW WITH BLOOMBERG SHE SAID THE EU HAS OFFERED
UKRAINE VE
RY MEANINGFUL FINANCE BUT THE TOTAL DOES NOT SEEM
LIKE ENOUGH. >> THANK YOU.
WE ARE GOING TO TAKE A BREAK NOW. TAKE THREE MINUTES OUT. UP NEXT, ARE YOU READY? THE U.S.
CRACKING DOWN ON CHINESE EV'S. >> AND IT'S GOING TO BE VERY
HARD TO MAKE IT OUTSIDE OF THESE TWO IN THE INDUSTRY. >> LET'S GET YOU TO THE WEEKEND.
[LAUGHTER] JONATHAN:
I'VE NEVER SEEN YOU LIKE THIS. FROM NEW YORK THIS IS BLOOMBERG. JONATHAN:
IT'S A QUIET START GOING INTO THE WEEKEND.
GOING ALMOST ABSOLUTELY NOWHERE. YIELDS ARE HIG
HER BY A SINGLE
BASIS POINT ON THE 10 YEAR. UNDER SURVEILLANCE THIS MORNING
THE U.S. CRACKING DOWN ON CHINESE EV'S. >> THE STOCK HAS BEEN DOING AN
EXTREMELY GOOD JOB. AND NOW THE CHINESE ARE COMING IN FILLING THE VOID AND THE
GAIN LEAVING MUCH ROOM FOR THOSE TWO TO BE SUCCESSFUL.
YOU HAVE TESLA MEETING WITH THE BEST CHINESE PLAYERS AND IT'S
GOOD TO BE HARD TO MAKE A LIVING OUTSIDE OF THESE IN THE
INDUSTRY. >> THE WHITE HOUSE ORDERING A
PROBE INTO POTENTIAL DATA AND CYBERSECURITY RISKS POSED BY
C
HINESE EV SPRAYED PRESIDENT BIDEN SAYING CHINESE POLICIES
COULD FLOOD OUR MARKET WITH ITS VEHICLES, OPPOSING RISKS.
I'M ANNOUNCING UNPRECEDENTED ACTIONS TO ENSURE CARS FROM U.S.
ROADS FROM COUNTRIES OF CONCERN DO NOT UNDERMINE OUR NATIONAL
SECURITY. JOINING US IS ELLEN OF THIRD
WAY. THE FORMER CHIEF ECONOMIST AFFORD AND THE U.S.
DEPARTMENT OF COMMERCE. I HAVE A FIRST QUESTION.
IF CHINESE VEHICLES ARE GOING TO POSE A NATIONAL SECURITY
RISK WHAT ARE THE CHANCES MAY BE THEY ARE JUST BANNED? >> WE D
ID HEAR FROM THE SEC.
THIS WEEK FOLLOWING THE STATEMENT FROM PRESIDENT BIDEN
AND SHE BASICALLY SAID WE WILL LOOK AT EVERYTHING.
WE HAVE TO STUDY THIS AND MAKE SURE WE PROTECT AND OUR
NATIONAL SECURITY IS NOT AT RISK.
THEY ARE LOOKING AT EVERYTHING. SHE SAID ALL THE WAY FROM
BANNING TO INSURING THAT THE TECH IN THE EEEV IS
AMERICAN-MADE OR MADE BY ONE OF OUR TRADING PARTNERS.
SO THEY ARE GOING TO LOOK AT EVERYTHING THEY DO RATE STUDIES
AND THE DEPARTMENT OF COMMERCE AND I THINK IT'S WORTHWHILE. W
E HAVE TO MAKE SURE THAT WE
PROTECT AND HAVE NATIONAL SECURITY, FREEDOM AND
CAPITALISM AT THE TOP OF OUR LIST. LISA:
DO YOU THINK THIS IS MORE OF A MATTER OF NATIONAL SECURITY OR
PRESERVING JOBS IN DETROIT? >> I THINK IT'S FIRST AND
FOREMOST NATIONAL SECURITY. WE HAVE SEEN INSTANCES WHERE
OUR NATIONAL SECURITY HAS BEEN COMPROMISED AND WE KNOW WE HAVE
TO MAKE SURE IN THE FUTURE THAT WE PROTECT AND DEFEND AND
THAT'S ABSOLUTELY CRITICAL. THE U.S.
MANUFACTURERS, A LOT OF OUR OTHER MANUFACTURERS THEY
ARE
NOT SHYING AWAY FROM COMPETITIVENESS.
NOBODY WANTS TO HAVE A PROTECTED MARKET THAT MEANS
BASICALLY WE END UP WEAKENING OUR PRODUCT CREATION OVER TIME.
WE NEED COMPETITION TO ENSURE WE HAVE ONGOING INNOVATION.
INNOVATION IS KEY IN THE ELECTRIC VEHICLE MARKET.
THERE'S MORE COMING. >> THE SOURCE OF THAT
INNOVATION HAS BEEN IN CHINA. THAT SOURCE HAS BEEN REALLY IN
PYD COMING OUT OF THE WORLD SECOND LAS VEGAS -- SECOND
BIGGEST ECONOMY. WOULDN'T IT HAMPER THE
TRAJECTORY TO MORE ELECTRIC VEHICLE F
RIENDLY FUTURE TO BAN
CHINESE VEHICLES FROM BEING SOLD IN THE U.S.
AND BRINGING DOWN THE PRICE POINT PROGRESSIVELY? >> LOOK AT VW.
LOOK AT FORD, THEIR INITIAL FIRST GENERATION ELECTRIC
VEHICLES, GM, THEY MADE COMMITMENTS.
TESLA WE'VE ALSO SEEN INCREDIBLE PRODUCT NOW COMING
OUT OF HYUNDAI KIA. SO LET'S STAND BACK AND SAY
IT'S NOT JUST CHINA. CHINA HAS BEEN SUBSIDIZING
THEIR ELECTRIC VEHICLE INDUSTRY FOR TWO DECADES NOW. I REMEMBER AT FORD WHEN THEY
START THE SUBSIDY PROGRAMS AND THEY INVITED U.S.
LEADERS, MANUFACTURERS LIKE FORD OR GM TO CHINA TO HELP
THEM WITH PRODUCT DEVELOPMENT, MODELING, FORECASTING,
INNOVATIVE PRODUCT CREATION. IT'S NOT LIKE IT HAPPENED IN
CHINA WITHOUT A LOT OF SUPPORT. SO NOW WHAT DO WE DO?
WE HAVE TO GET COMPETITIVE. THIS INDUSTRY IS GOING TO
ELECTRIC VEHICLES. IF -- WE DID A STUDY ON
COMPETITIVENESS IF YOU GO TO THIRD WAY WHEN THE AMERICA
LEADS. YOU'VE GOT $27 TRILLION OF
ADDRESSABLE MARKET BETWEEN NOW AND 2050 AS WE TRANSITION TO EV
SPRAYED IT'S NOT A QUESTION
OF IF, IT IS JUST WHEN.
INFRASTRUCTURE AND PRODUCT DEVELOPMENT AND ROLLING OUT AN
EMERGING TECHNOLOGY ALL OF THAT TAKES SOME TIME.
IT'S NOT LIKE IT'S GOING TO HAPPEN IN A QUARTERLY EARNINGS
REPORT. >> WE HAVE THE ITALIAN LEADER
VISITING THE WHITE HOUSE TODAY. ITALY IS SET TO BE ASKING BYD
TO POTENTIALLY, SET UP SHOP AND BE A MANUFACTURER IN ITALY
WHILE AT THE SAME TIME THE U.S. IS THINKING OF COMPLETELY
BANNING EV SPRAYED I THOUGHT THIS INTERIM -- WOULD TAKE A
MULTILATERAL APPROACH WHEN IT COME
S TO CHINA.
DOESN'T THIS ADMINISTRATION NEED TO SHORE UP WHERE THE
EUROPEANS ARE AS WELL WHEN IT COMES TO CHINESE EV'S? ELLEN:
SUPER GOOD QUESTION. ITALY USED TO HAVE AN
AUTOMOTIVE INDUSTRY AND SO I CAN UNDERSTAND WHY THEY WANT
CHEAP VEHICLES COMING INTO THEIR MARKET TO SATISFY WHERE
THEY ARE IN TERMS OF THEIR ECONOMIC GROWTH AND PROSPECTS.
BUT HERE IN THE U.S. WE HAVE ALREADY DEVELOPED THE
BEGINNINGS OF AN ELECTRIC VEHICLE MARKET. HAVE ASKED IT. IF WE FIND THAT BYD ENDS UP
WITH NO NATIONAL SECU
RITY RISK, COME INTO THE MARKET.
I DON'T THINK ANYONE IS SHYING AWAY FROM COMPETING BUT WE NEED
TO MAKE SURE WE UNDERSTAND THAT THAT MARKET IN CHINA HAS BEEN
SUBSIDIZED FOR MANY YEARS, BUT WE ARE NOT GOING TO LOSE THE
TERMS OF OUR AUTOMOTIVE MARKET. WE HAVE 4 MILLION JOBS IN THE
AUTOMOTIVE INDUSTRY AND THE JOB MULTIPLIER OF ABOUT 10 WHERE
THOSE PAYCHECKS OF WORKERS HAVE BEEN SPENT IN LOCAL COMMUNITIES
AT BUSINESSES, RETAIL BUSINESSES AND ALL DIFFERENT
TYPES OF CONSUMPTION. IT'S NOT LIKE OUR AUTO
INDUSTRY
IS GOING TO GO AWAY. IT IS ABSOLUTE CORE TO OUR U.S.
ECONOMY. AND THAT'S WHY POLICY IS REALLY
WORKING. IN FACT THERE IS A STUDY DONE
OF CLEAN ENERGY INVESTMENT MONITOR.ORG. IN THE FOURTH QUARTER THIS
YEAR, THERE'S $12 BILLION THAT'S INFLATION-ADJUSTED A
QUARTERLY RATE. IN TERMS OF INVESTMENT IN THE
EV SUPPLY CHAIN, CRITICAL MINERALS, VEHICLE ASSEMBLY AND
CHARGING EQUIPMENT. SO THERE HAS BEEN A LOT OF
INVESTMENT GROWTH IN THE EV SUPPLY CHAIN JUST IN THE LAST
YEAR. AND WE ARE ONLY STARTI
NG BECAUSE THESE PROGRAMS LAST FOR
ABOUT 10 YEARS. JONATHAN: ONE PIECE OF PUSHBACK.
YOU CAN SAY ITALY USED TO HAVE AN AUTO MANUFACTURING INDUSTRY.
5000 EMPLOYEES WILL BE DEEPLY UNHAPPY.
THANK YOU, IT'S GOOD TO SEE YOU. >> GOOD CATCH, THANKS. LISA:
YOU ARE LIKE AN ITALIAN. YOU ARE THE AMBASSADOR. >> I HAVE TO PRESS THE
CONVERSATION A LITTLE BIT. COMING UP VERY SHORTLY, WHY
INVESTORS SHOULD REFRAME THEIR INTEREST RATE OUTLOOK.
WE WILL TALK ABOUT THAT AFTER THAT BIG NOTE EARLIER THIS
MORNING BASICA
LLY MAKING THE POINT THAT HE DOES NOT THINK
THIS FEDERAL RESERVE WILL CUT AT ALL THIS YEAR.
WE WILL CATCH UP WITH HIM MONDAY AT 7:30 EASTERN TIME. >> GOOD NEWS IS GOOD NEWS.
TREAT IT'S ON ITS FACE THAT IT WILL BE BAD NEWS FOR THE FED
RATE CUTS AND THAT'S WHAT A LOT OF PEOPLE ARE THINKING ABOUT.
WE CAN STILL GET TO 55. ANNMARIE:
JEROME POWELL IS ON THE HILL NEXT WEEK.
WHAT IS THE TIMELINE FOR THESE RATE CUTS.
HE WENT OUT TO 60 MINUTE SAYING I THINK SHORING UP THE AMERICAN
PUBLIC IN AN ELECTION YE
AR WHY HE HAD TO GO DOWN THIS PATH.
JONATHAN: YOU TURN UP AND ULTIMATELY SAY
THE SAME THING YOU SAID IN THE LAST NEWS CONFERENCE MAY BE YOU
INJECT SOMETHING NEW OR FRESH. BUT IT'S ALWAYS THE LAWMAKER
MAKING A CLIP TO MAKE A COMMERCIAL TO SPEAK TO HIS
CONSTITUENTS OR HER CONSTITUENTS. I HATED.
IT DRIVES ME NUTS. JONATHAN: THE PEOPLE AT FERRARI WOULD BE
INSULTED AS MILQUETOAST, IT'S ART. THE S&P IS POSITIVE AT POINT
02%. ON THE BOND MARKET, THE 10 YEAR
UP BY TWO BASIS POINTS. BUT THEY ARE MOVING I
N ONE
DIRECTION AFTER AN IN LINE REPORT. LISA: HOW MANY PEOPLE ARE GOING TO
COME AROUND TO KNOW RIGHT BECAUSE THIS YEAR? JONATHAN: MAYBE WERE NORMALIZING A MUCH
HIGHER RATE PROFILE IN THIS MARKET. LET'S FINISH ON THE EURO
AGAINST THE DOLLAR, POSITIVE BY 0.6%. THE WRONG KIND OF UPSIDE
SURPRISE ON THE CPI PUSHING BACK THE DEADLINE ON THE NEED
FOR URGENT BREAKOUTS. LISA: CONSUMER PRICES ROSE 2.6% IN
EUROPE AS COMPARED TO A 2.5%. THIS COMES FROM THE SERVICES
SIDE. IS IT COMING FROM FLUCTUATING
COMMO
DITIES? JONATHAN: ALL THIS TALK ABOUT ON MARCH
RATE CUT FROM THE ECB OR FEDERAL RESERVE.
THIS IS ONLY TWO MONTHS OLD. IT DOESN'T SEEM LIKE THEY WILL
HIKE ANYTIME SOON. IT WOULD NOT BE THE FIRST TIME
THEY CHANGE THEIR MIND BEFORE THE MEETING. LISA:
IS IT ON YOUR LIST? JONATHAN:
I DON'T HAVE A LIST. MAYBE THAT'S THE DIFFERENCE BETWEEN
YOU AND I. LISA: THIS IS WHY YOU HAVEN'T SEEN
MUCH ACTION BECAUSE NO ONE'S WILLING TO GET ON THAT LIST.
JONATHAN: 1.08 ON THE EURO. PRESIDENT BIDEN AND DONALD
TRUMP
IN DUELING VISITS TO THE BORDER. LISA:
THIS IS A BIDEN INNOVATION. -- >> TELL CONGRESS TO PASS
THIS TYPE PARTISAN BILL. JONATHAN:
MILES APART BUT ADDRESSING THE MIGRANT SURGE BEFORE THE
ELECTION. 300 MILES APART BUT WITH THE
RHETORIC, HOW MANY MILES APART? ANNMARIE:
IF HE DOES AN EXECUTIVE ORDER HE WOULD BE USING THE SAME LAW
TRUMP RELIED ON. IT'S A VERY DIFFERENT JOE BIDEN
THEN LEADING UP TO THE 2020 ELECTION. HE WAS WRITING ABOUT RESTORING
ASYLUM PROTECTIONS AND BRINGING MORE HUMANITY TO THE B
ORDER. THIS IS A HUGE PROBLEM FOR
DEMOCRATS THAT IS THE NUMBER ONE CONCERN. JONATHAN:
WHAT DID OBAMA DO DIFFERENTLY? THAT BIDEN IS NOT DOING?
ANNMARIE: HE CAME INTO OFFICE AND
BASICALLY SAID, WE WILL NOT TAKE THE SAME APPROACH TRUMP
DID. PEOPLE SAY THAT WAS THE SHOT
HEARD AROUND THE WORLD FOR INDIVIDUALS TO SAY IS EASIER TO
GET INTO THE UNITED STATES. LISA:
IF YOU LOOK AT THE NEW TRIAL TWO POINT KNOW HE WANTS TO
ARREST ALL IMMIGRANTS HERE AND HAVE ACTIVE DEPORTATION. IT'S A SLIGHTLY DIFFERENT T
RUMP. JONATHAN: WAITING TO SEE WHAT THE POLICY
WILL BE FROM THIS ADMINISTRATION. WE HAD A MOVE OF 30% ON NYC BE. THE BANCSHARES PLUNGING AFTER
MATERIAL WE MISS AND HOW IT ATTRACTS LOAN RISKS.
IT STEMS FROM AN EFFECTIVE OVERSIGHT, RISK ASSESSMENT AND
MONITORING ACTIVITIES. LISA: WE'VE BEEN TALKING ABOUT THE
IDIOSYNCRASY OF RENT CONTROL ISSUES IN NEW YORK WHICH IS
SPECIFIC REAL ESTATE. HOW WILL THAT REPRICE REAL
ESTATE? JONATHAN: IN THE LAST 24 HOURS WE HAVE
HEARD TWO GUESTS A SURVIVE UNTIL 2025.
WHAT IF YOU GET NO RATE BECAUSE IN 2024? LISA: ESPECIALLY IF YOU'RE TALKING
ABOUT HIGHER RATES BECAUSE OF THE STRENGTH OF THE MAGNIFICENT
SIX OR FIVE. THERE ARE COMPANIES THAT WILL
DO BETTER WITH HIGHER CREDIT RISK. JONATHAN: LET'S TALK ABOUT INTEREST
RATES, JOHN WILLIAMS REITERATING HE DOES NOT SEE
RATE BECAUSE COMING ANYTIME SOON. >> THEY EXPECT US TO CUT
INTEREST RATES THIS YEAR AND THAT MAKES US WITH INFLATION
COMING DOWN IN THE ECONOMY AND BETTER BALANCE. BUT RIGHT NOW, THERE IS NOT A
SENSE
OF URGENCY TO DO THAT. JONATHAN: WE HAVE HAD SO MUCH -- THE SEER.
LISA: TO HAVE ALL THE FATHEADS COME
ON AND HAVE THEM TO GET OUT? JONATHAN:
THEY HAVEN'T HAD TO CHANGE THEIR VIEWS THE SAME WAY THE
MARKET HAS HAD TO. LISA: THEY HAD THREE RATE BECAUSE
THIS YEAR, IS THE BALANCE OF RISK SHIFTING IN A DIFFERENT
WAY? WE TALKED ABOUT THE POTENTIAL
FOR RATE HIKES. THE IDEA OF NO RATE CUTS, I
WANT TO HEAR ABOUT THAT. JONATHAN: THE CHIEF ECONOMIST ON RANKIN
INVEST MENTS. LET'S GO STRAIGHT TO APOLLO,
THEY
ARE SAYING NO BECAUSE FOR 2024.
I KNOW YOU ARE NOT THERE IN THE SAME WAY BUT THE FORCES THAT
LEAD YOU TO BELIEVE THAT WHERE READING NORMALIZING WHAT ARE
THEY AND COULD YOU SHARE THOSE VIEWS THAT TORSTEN HAS? LARA:
WHILE THE FED HAS SIGNALED THEY WANTED CHANGE POLICY IT
MAY NOT CLEAR THE PATH TO THE RATE CUT THAT THEY ARE HOPING
FOR. AT THE END OF THE DAY WE SEE NO
URGENCY ON THE ECONOMIC SIDE TO CUT RATES AND I THINK WE NEED
TO START TO GET A LITTLE MORE NUANCE WITH THE REAL RATE STORY.
I THINK
THE FIGHT COULD SURGICALLY CUT TO KEEP POLICY
AT THE STATUS THAT IT IS. WE NEED TO BE REALLY CAREFUL TO PUSH BACK AGAINST THIS IDEA
ABOUT NEEDING RATE CUTS. JONATHAN:
WHAT HAS CHANGED IN THE ECONOMY TO CHANGE YOUR THESIS? HE DESCRIBED IF YOU TAKE OUT THE SUPPLIED
SIDE, WAS A LEADING TO THAT? LARA: I'M A BIG BELIEVER
IN THE MODERATION WE EXPERIENCED SINCE THE FINANCIAL
CRISIS. THIS WILL BE BLUNTED BY MASSIVE
FED CUT RATES. I THINK WE SAW THAT WITH THE
TRADE WARS IN THE TRUMP ADMINISTRATION AND C
APITALIZED
ON A MORE VOLATILE CYCLE WHERE THE FED WAS ABLE TO RAISE RATES
BEFORE THE PANDEMIC. THIS IS ALL BEEN TOWARDS THE
UNWINDING OF THAT. THE PROCESS HAS SPED UP AND FROM HERE, WERE OUT OF THE
WORLD WHERE INFLATION STAYS AT THAT 2% LANE. THE REALITY IS FROM A POLICY
PERSPECTIVE, IF YOU CAN'T RELY ON INFLATION BE LOW YOU NEED TO
BE MUCH MORE PROACTIVE AND THAT'S A DIFFERENT WORLD THAN
WE'VE HAD. THE INVESTMENT THAT WE ARE
SEEING THESE ARE REALLY POSITIVE INNOVATION AND THAT'S
WHEN I WANT TO
LEAD PEOPLE WITH. THIS IS A GREAT OPPORTUNITY FOR
INVESTORS THAT WE HAVEN'T SEEN IN DECADES. LISA: YOU TALK ABOUT WHERE YOU SEE
THAT OPPORTUNITY WHY ARE WE SEEING PEOPLE RETHINK THE IDEA
OF RATE CUTS IN SCOPE AND SIZE DO YOU THINK THE FACT THAT WE
SAW GREATER ACCOMMODATION OF MARKETS WITH IT AND EASING OF
FINANCIAL CONDITIONS THAT IS HELPED INFLATION STAY HIGHER
FOR LONGER? LARA: THERE IS A BEHAVIORAL
COMPONENT TO THIS. MARKETS HAVE BEEN USED TO RATES
BEING LOW IN THE IDEA THAT THAT HAS BEEN NOR
MAL AND MANY LOOK
AHEAD WHERE IN THE WORLD WHERE THE YIELD CURVE IS STILL
INVERTED AND WE NEED THAT TO NORMALIZE. I THINK MARKETS WERE RELYING ON
IF THE SLIGHTEST OPPORTUNITY THAT THE FED SLAMS RATES BACK
DOWN. WERE NOT IN THAT WORLD ANYMORE. I THINK THE BANKING SYSTEM
WOULD BE THRILLED WITH A SLOWING YIELD CURVE AGAIN. LISA:
THIS IDEA THAT THE MOST EXPENSIVE, OVERPRICED AREA THAT
SOME HAVE SUGGESTED IS 10 YEAR TREASURIES ARE PRICING IN THIS
HIGHER FOR LONGER SCENARIO HOW MUCH HIGHER COULD IT GO
BEFORE
IT BECOMES PUNITIVE? LARA: I THINK WE WILL VISIT 5% THIS
YEAR AND WE NEED TO THINK ABOUT THE FACT THAT IT WAS THE SPEED
WITH WHICH RATES MOVE THAT MADE 5% FEEL PUNITIVE. WITHOUT ZERO INTEREST RATES YOU
WILL SEE COMPANIES THAT WERE ARTIFICIALLY HELD THE
AFLOAT COME UNDER DISTRESS. THIS FINANCING WILL GET DONE
AND THERE WILL BE A PRICE ADJUSTMENT BUT THIS OPENS UP A
TON OF OPPORTUNITY FOR INVESTORS. WE ARE IN A PLACE WHERE THERE
ARE A LOT OF OPTIONS FOR INVESTORS THEY GIVE YOU
DOUBLE-DIGIT
RETURNS. JONATHAN:
HERE WE ARE, BACK TO WHERE WE USED TO BE IN THE GOOD OLD DAYS.
10 YEAR IS AT 4.27. THEY THINK WE CAN RETEST 5%.
ON THE LONG END. LISA: WE HAVE HEARD MARCUS SAY THE
BIGGEST MISPRICING IS ON THE LONG END BECAUSE IT'S BEEN
FLUCTUATING IN RESPONSE TO THESE CUTS. JONATHAN:
WE WILL HAVE A NEW PAYROLLS REPORT IN HAND AND LET'S TALK
ABOUT IT. IF THAT DATA DOUBLES DOWN YOU
WILL HAVE TO MOVE BECAUSE IT IS DIFFICULT TO DISMISS IT YOU
DOUBLE UP IN FEBRUARY AND THEN WE HAVE A TREND. LISA:
THEN YOU GET QUESTIONS ABOUT
FISCAL SPENDING. JONATHAN: RUN, DUBAI.
EQUITIES ON THE S&P 500. HERE'S YOUR BLOOMBERG REEF WITH
DANNY BERGER. D ANI:
IS REVIEWING ITS DEALINGS WITH THE HEAD OF THE FRANCHISE GROUP.
IT DOESN'T EXPECT ANY SIGNIFICANT CHANGES TO
FINANCIAL RESULTS. META IS WINDING DOWN ITS NEWEST
FEATURE IN U.S. AND AUSTRALIA. NEW STABS, WILL BE ABLE TO POST
CONTEST UNTIL THEIR DEALS EXPIRE. META SAYS DEMAND FOR THE
SERVICE HAS DECLINED. ELON MUSK IS SUING OPENAI AND
SAM ALTMAN BY PUTTI
NG PROFIT AHEAD OF BENEFITING HUMANITY.
THEY SAY THEIR CLOSE RELATIONSHIP WITH MICROSOFT
UNDERMINES ITS MISSION FOR OPEN SOURCE TECHNOLOGY THAT WOULD
NOT BE SUBJECT TO CORPORATE PRIORITIES.
THAT IS YOUR BLOOMBERG BRIEF. JONATHAN:
HE HAS A POINT WITH THE MICROSOFT THING. CONCEPTUALLY, ONCE MICROSOFT
MAKES AN INVESTMENT IS NOT A CHARITY? LISA: INTELLECTUAL FREEDOM IN
KUMBAYA WITH CODING. JONATHAN:
LET'S CHECK OUT APPLE IN THE FREE MARKET.
IT HAS BEEN SOFTER THIS MORNING NEGATIVE BY 0.6%. THE PRICE
TARGET IS 232 AND IT
WAS 223. APPLE OFFICES THE HEADWINDS TO
PRODUCT REVENUE. LISA: THERE IS A STABILITY POINT,
NOT NECESSARILY THE GROWTH POINT. JONATHAN: THE STOCK LOWER, DOWN BY 0.6%. >> OUR GUEST AT ALL THREE
BRANDS HAS BEEN REMARKABLY RESILIENT.
ONCE THEY FIND US THEY ARE VALUE FOCUS. THE PERCENTAGE OF THOSE TAKING
ADVANTAGE OF LTO'S ARE UP. JONATHAN:
TARGET, KROGER AND GALLUP REPORTING NEXT WEEK. THE COMBINATION OF REAL WAGE
GROWTH AND IMPROVING INFLATION SHOULD BECOME A SOURCE FOR
CONSUM
ER TO SHIFT BACK TO GOODS. CAN YOU IDENTIFY THE COMPANIES
THAT YOU LIKE IN THINK ARE UNDERAPPRECIATED? THERE NO AUDIO. CHUCK: SORRY ABOUT THAT.
IT'S IMPORTANT TO LOOK BACK. WHAT WE HEARD FROM A COUPLE OF
RETAILERS IS THAT WERE BEGINNING TO SEE SIGN OF UNITS
BEING PICKED UP. WHEN WE LOOK FORWARD WE THINK
WE WILL CONTINUE TO SEE THAT ACROSS RETAIL AND I THINK
COMPANIES THAT WE THINK ARE POISED TO BENEFIT WOULD BE
TARGET. THEIR MIX OF GENERAL
MERCHANDISE HAS BEEN UNDER A LOT OF STRESS.
TARGET WILL
BENEFIT FROM THE TREND. JONATHAN: GOING TO GOODS AWAY FROM
SERVICES, WHY IS SERVICES PLATEAUING? >> WHEN YOU LOOK AT PC DATA UC
SERVICES AS A TOTAL OF PC IS BALANCING OUT AND GOODS COULD
RECOVER BUT IS PREDICATED ON INFLATION.
AS PRICES COMPRESS WE THINK REAL WAGES ARE ACCELERATING.
LISA: THERE HAS BEEN A SHIFT UNDER
THE HOOD IN THE NARRATIVE WITH RESPECT TO THE DIVIDE BETWEEN
HIGHER AND LOWER INCOME FAMILIES IN SPENDING. THERE SEEMS TO BE A RENEWED
APPETITE TO SPEND AS WELL, DO YOU EXPECT THAT
TO COME THROUGH
IN EARNINGS? CHUCK:
IF YOU LOOK AT THE PRESSURE OF THE LOW INDICES BECAUSE OF
HIGHER ENERGY PRICES, GAS PRICES OF FOOD IT IS CONSIST OF
THE LOW INCOME CUSTOMER. AS WE LOOK FORWARD TO THE LOW
INCOME CUSTOMER WILL SEE A BENEFIT. TAX REFUNDS WERE REALLY LOW AND
THAT HURT THE LOW-END CUSTOMER WHEN FOOD PRICES SOAR.
WE THINK DOLLAR GENERAL AND DOLLAR TREE AND WALMART COULD
BENEFIT. WE DO BELIEVE IN THAT TRADE.
LISA: IN TERMS OF CREDIT CARD
RECEIVABLES CONTINUING TO CLIMB, DO YOU THINK
THAT'S A
HEAD FAKE OR DO YOU THINK IT'S A WARNING SIGN? CHUCK:
IS A YELLOW FLAG. IF YOU LOOK AT HOUSEHOLD DEBT
IS STILL REALLY LOW. THIS IS NOT 2008. ANNMARIE:
THEY SAY THE AMOUNT OF BONDS COULD SEARCH TO 64 BILLION WELL
ABOVE THE 46 BILLION FROM A YEAR AGO.
WHEN DO YOU GET CONCERNED? CHUCK:
WE WILL CONTINUE TO MONITOR THE CREDIT DATA WE SEE IN THE
DELINQUENCIES FOR RETAILERS WE COVER THAT HAVE CREDIT CARD
BUSINESSES. KOHL'S, TARGET, LOWES. THEIR CREDIT TRENDS ARE
DETERIORATING BUT IS NOT A RED
FLAG IN OUR OPINION. JONATHAN: CAN WE TALK ABOUT CONSUMER
DELINQUENCIES, THERE ARE SO MANY COMPETING THEORIES. THE CONSUMER IS PRETTY DECENT
BUT THERE HAS BEEN CLEAR DETERIORATION, WHICH ONE IS IT?
CHUCK: WE WOULD LIKE TO SEE HOW THE
CONSUMER REACTS. AS WE MOVE THROUGH THE SPRING
WE THINK THAT SPENDING WILL CONTINUE TO ACCELERATE AND
THAT'S A TREND WE COULD START TO SEE.
WE WILL CONTINUE TO STUDY THE DATA AND IT'S IMPORTANT TO KEEP
IN MIND WHEN UNEMPLOYMENT IS AT ITS LOWEST LEVEL SINCE THE
1950
'S, THE CONSUMER CAN SPEND. YOU SPOKE ABOUT VALUE, VALUE
WAS INVOLVED. CONSUMERS WILL SPEND AT COSCO
BUT THEY WILL ALSO SPEND FOR BIG TICKET ITEMS. JONATHAN:
CHUCK, IS GOOD TO SPEAK TO YOU. ON MONDAY, JANE FOLEY, AND TOR STEN SLOK WITH HIS CALL FOR NO
RATE CUTS IN 2024. LISA:
BOTH OF US TEND TOWARDS THE CATASTROPHIC. I WONDER HOW MUCH OF THAT LIST
IS POSITIVE? JONATHAN: AT THE END OF THE BOOK IS SAYS
THANK YOU TO ME AND TK. ANNMARIE:
FOR ME NEXT WEEK IS LESS CATASTROPHIC THINKING BUT THE
INFORMA
TION WE WILL FIND OUT OUT OF WASHINGTON.
Comments
Where is Tom Keane?
Bring back Kallum Pickering! Great guest.
Audio?
Ev is more common in terms of ev and more advanced compared to to US.. which is also too expensive to buy from US too..
Up 10 % Fri....Xos Trucks...FSR ... Fisker...Dip Opportunity. 4 th quarter revenue up 180 % 4 th quarter over 3rd quarter. Polestar.... Archer... Lillium...CHPT....Blink....EVTL, more.
sorry this issue now effectiv Fed protect program goung to benefit now is not ?
I know this is an older post, but i have a question. Hoping someone can help. I fell behind on my payments, and i made a payment 15 days after their last alert on feb 15, its march 1st and it says charge off. Is their a way to get back in good standings? Plaeas and thank you
03/04/2024. NEW YORK COMMUNITY BANK HISTORY. 01/31/2024 to 02/07/2024. Artificial super intelligence world.
Ann Marie is the little kid, sitting in the adults table. Please bring TK back.
Annmarie, are you wearing the Trump gold sneakers? 😀🥇🥊 Great job TRUMP2024! 🥇🇺🇸🥇🇺🇸
03/04/2024. U.S. BONDS MARKET HISTORY 2, 10, & 30 years bonds market history. 11/02/2023 to 11/30/2023. 12/19/2023 to 12/21/2023. S&P-500 HISTORY INDEX HISTORY. 06/2022 to 8/2023. Artificial super intelligence world.
Dude, if you wanna lose actual weight, give yourself a food budget like of an average American and then only spend that money on food you’ll probably lose weight
Actually recently and you can google this Italy was caught relabelling high quality Greek extra virgin olive oil as Italian. This is a fact! The Greeks invented olive oil. It goes back thousands and thousands of years. Also fact the Greeks are the biggest consumers of olive oil in the world per capita, you can also googles this. So who would not only make the best but be the best judge of what makes a high quality olive oil? Naturally the people who consume the most of it and for the longest amount of time. Like everything good the Italians copied the Greeks. If you want the best quality olive oil in the world and can get your hands on it, buy good Greek extra virgin olive oil. You will not regret it! The Greeks are also masters of olives as everyone knows this. But hey don't believe me? Go buy yourself the best Spanish, Italian (but make sure its actually Italian), and Greek olive oil and taste test yourself. Then you will see who knows olive oil and who makes the best.
03/02/2024. HISTORY OF THE AMERICAN REPUBLICANS PARTY. 2024 PRESIDENTIAL ELECTIONS TOTALLY ISOLATION. ARTIFICIAL SUPER INTELLIGENCE WORLD.