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Humans have a PR problem. Even the sound of our own voices strikes fear into wild animals, even more so than a lion's snarl. Also. Sharks performing miracles in a golf course. --- Love the show and wanna show some love? Instagram: @wellthatsinterestingpod Twitter: @wti_pod Venmo Tip Jar: @WellThatsInteresting Oh, BTW. You're interesting. Email YOUR facts, stories, experiences... Nothing is too big or too small. I'll read it on the show: firstname.lastname@example.org WTI is a part of the Airwave Media podcast network! Visit AirwaveMedia.com to listen and subscribe to other incredible shows. Want to advertise your glorious product on WTI? Email me: email@example.com Learn more about your ad choices. Visit megaphone.fm/adchoices
US equities finished slightly higher overall in quiet Tuesday trading, though ending off best levels from midday, with the Dow, S&P, and Nasdaq finishing up 0.24%, 0.10%, and 0.29%, respectively. The magnificent 7 names were mostly higher with Tesla (TSLA) being a standout. Other outperformers included retail and apparel, credit cards, rails, commodity chemicals, beverages, and payments. Meanwhile, media, P&C insurers, pharma, MedTech, machinery, restaurants, and homebuilders were some of the laggards. Treasuries were firmer, particularly at the short end of the curve, with the 2Y yield near its lowest point since August. The dollar was weaker on the major crosses while Gold finished up 1.4%. Bitcoin futures were up 4.4% and WTI crude settled up 2.1%. Overall, the market experienced some push and pull from an underwhelming Treasury auction and from dovish Fedspeak today. The market still seems to be dealing with a catalyst vacuum ahead of November employment data on December 8th, CPI on December 12th, and the FOMC decision (and updated dot plot) on the 13th.
We're gonna cover some things that'll leave you speechless. The largest bubble found (so far) is in space and contains thousands of galaxies (!!!) and the first wartime submarine was used in lower Manhattan. Yep. --- Love the show and wanna show some love? Instagram: @wellthatsinterestingpod Twitter: @wti_pod Venmo Tip Jar: @WellThatsInteresting Oh, BTW. You're interesting. Email YOUR facts, stories, experiences... Nothing is too big or too small. I'll read it on the show: firstname.lastname@example.org WTI is a part of the Airwave Media podcast network! Visit AirwaveMedia.com to listen and subscribe to other incredible shows. Want to advertise your glorious product on WTI? Email me: email@example.com Learn more about your ad choices. Visit megaphone.fm/adchoices
US equities finished lower in very quiet, rangebound Tuesday trading. The Dow, S&P, and Nasdaq finished down 0.18%, 0.20%, and 0.59%, respectively. Today's session came after a higher finish on Monday that saw the S&P reach its highest level since August. Big tech was mixed, while retailers were generally down amid today's welter of earnings. Semis, airlines, banks, autos, media, REITs, and homebuilders were some of the other laggards. Meanwhile, MedTech, life sciences, P&C insurers, food and beverage, managed care, A&D, and telecoms held up better. Treasuries were mostly unchanged, though a bit firmer with modest gains in belly of the curve after some positive sentiment on Monday surrounding the 20-year auction. The dollar index was up 0.2% while gold finished up 1.1%. Bitcoin futures were off 1.4%, and WTI crude settled down 0.1% after gaining nearly 2.5% on Monday. Overall, there were no big directional drivers in play today. The lower rate backdrop on disinflation and peak Fed traction are still a tailwind for risk sentiment, along with lingering consumer resilience, recent earnings inflection, margin expansion, and seasonality. Another major talking point were the November FOMC minutes, which noted that the Fed is in a position to proceed carefully. All officials saw rates remaining restrictive for some time, fitting with the higher for longer messaging, though that has come under some scrutiny following recent inflation, labor market data and corporate updates.
Hot Topics เช้านี้ 1.GDP 3Q66 ของไทย คาด +2.0% YoY 2.น้ำมันดิบ WTI ดีดตัวขึ้น +4% จาก Technical Rebound หลังปรับตัวลงต่ำสุดรอบ 4 เดือน 3.ความมั่นใจว่าการขึ้นดอกเบี้ยของสหรัฐฯ จะสิ้นสุดลงแล้วหรือไม่ ขึ้นอยู่กับรายละเอียดของ Fed Minutes ในคืนวันอังคาร 4.บทวิเคราะห์ ได้แก่ BDMS, HTC, CBG, Sector Focus, SBL Idea และ Technical Trading Portfolio --- Send in a voice message: https://podcasters.spotify.com/pod/show/yuantathai/message
Commodities and markets were up this week off the good consumer price index report, which came in below market expectations, noted mining audiences manager Michael McCrae. On Saturday McCrae recorded Kitco Roundtable. The GDX, a index of gold miners, was up 5% on the week. The S&P was up half that amount. Gold added about $40 for the week to end at the 1980s range. Mid-week consumer price index report was below Wall Street estimates, which sparked a major rally on Wall Street. The core CPI rose 0.2% and 4%, against the forecast of 0.3% and 4.1%. The annual rate was the smallest increase since September 2021, according to CNBC.Copper was up 4% this week. Even better for miners is that oil prices were mostly flat on the week with WTI trading in the mid 70s. The big mining news from the start of the week is when Glencore bought 77% of Teck Coal Business for $6.93 Billion. Nippon Steel took the remaining portion. In a news release Jonathan Price, President and CEO, Teck. said the sale will ensure Teck is well-capitalized and able torealize value from its base metals business and re-focus Teck as a Canadian-based critical minerals champion
#recession #money #recession2023 #money #inflation #deflation #interestrates #dollar #economy #consumer #retail #walmart Walmart makes a major warning. Jobless claims spike. Oil (and gas) prices aren't just crashing, the whole WTI curve just get whacked. All three of those are different angles on the same thing. What's driving bids for bonds. The deflationary recession wasn't avoided, merely delayed. Eurodollar University's Money & Macro AnalysisCNBC: Walmart shares slide as retailer gives a cautious outlook about consumer spendinghttps://www.cnbc.com/2023/11/16/walmart-wmt-earnings-q3-2024-.htmlBloomberg: Walmart Sinks on Cautious Consumer Outlook, Late-October Diphttps://www.bloomberg.com/news/articles/2023-11-16/walmart-lifts-profit-outlook-stays-cautious-on-us-consumersAAA US average retail gasoline pricehttps://gasprices.aaa.com/Twitter: https://twitter.com/JeffSnider_AIPhttps://www.eurodollar.universityRealClearMarkets Essays: https://bit.ly/38tL5a7
Prepare for some mystical and magical sh*t. Join us as we discover the source of the rarest gemstones on Earth, and why an Iron Age comb was made from a certain body part. --- Love the show and wanna show some love? Instagram: @wellthatsinterestingpod Twitter: @wti_pod Venmo Tip Jar: @WellThatsInteresting Oh, BTW. You're interesting. Email YOUR facts, stories, experiences... Nothing is too big or too small. I'll read it on the show: firstname.lastname@example.org WTI is a part of the Airwave Media podcast network! Visit AirwaveMedia.com to listen and subscribe to other incredible shows. Want to advertise your glorious product on WTI? Email me: email@example.com Learn more about your ad choices. Visit megaphone.fm/adchoices
US equities finished notably higher in Tuesday trading, ending a bit off best levels, with the Dow, S&P, and Nasdaq finishing up 1.43%, 1.91%, and 2.37%, respectively. Additionally, the Russell had its best session in more than a year, ending up 5.44%. Big Tech was stronger across the board, and REITs, utilities, autos, retail, homebuilders, airlines, banks, and asset managers were among the other outperformers. There were not a lot of decliners, but energy, managed care, pharma, healthcare distributors, P&C insurers, and defense were among the relative laggards. Treasuries were notably firmer across the curve with 10Y yield below 4.5% and 30Y approaching 4.6%. The dollar was down sharply on the major crosses, particularly vs the euro and sterling. Gold ended up 0.8% while Bitcoin futures down finished 4.1%, adding to a 1.5% pullback in the prior session. Finally, WTI crude settled unchanged after three-straight gains. The big macro news for today was that the October CPI report came in cooler than expected across the board, with monthly and annualized headline and core CPI prints below consensus. The soft October CPI report drove the big rally in stocks and rates, with momentum seemingly exacerbated by widely discussed positioning dynamics. Fed sentiment also expected to be impacted by retail sales tomorrow.
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Wall Street finished mixed overnight in a quiet day of trade as markets wait for crucial inflation data tomorrow. The Dow Jones gained 55 points (+0.16%). Up 123 at best. Down 77 at worst. The S&P 500 fluctuated near its key 4,400 mark before edging lower 0.08%, while the NASDAQ fell 0.22% on cautious trading with CPI results tomorrow, as well as PPI and retail sales data later in the week. Treasury yields are stable, with the 10Y yield flat, down 0.8%, the USD Index fell 0.19%, and Oil prices firmed on the OPEC+ monthly report. Among stocks, Nvidia +0.6% announced updates to its H100 AI processor, and HP gained 0.58% on broker upgrades from Citigroup.ASX to open higher. SPI Futures up 68 points (+0.98%).Bullion prices ticked higher overnight, up 0.45% ahead of US inflation results this week.Base metals are broadly higher. Copper -0.60%, Zinc +% Nickel +1.26%, Aluminium +0.09%, Lead %, and Tin +0.53%.Iron ore rose for its fourth consecutive day of gains, up 0.23%, buoyed by optimism over Chinese property market sector-related stimulus.WTI and Brent Crude oil gained more than 1% after the OPEC+ monthly report eased worries about waning demand in China and the US.10Y yield: US 4.63%, Australia 4.66%, and Germany 2.71%.Why not sign up for a free trial? Get access to expert insights and research and become a better investor.Make life simple. Invest with Marcus Today.
The Dow lifted near 400 points, the S&P 500 retook the 4400-point mark and the Nasdaq 100 is poised to have risen 10% from its late October low. The catalyst: a surge in demand for tech stocks, both megacaps and others. Helping market sentiment was a steadier US Treasury market. After yields tumbled on Wednesday and surged on Thursday, they were little changed on Friday. All 10 S&P 500 sectors ended in positive territory, led by a 2.20% gain for the tech sector.The NASDAQ posted 61 new highs and 353 new lows.Base metals fell sharply across the board. Copper -1.21%, Nickel -3.29%, Aluminium -1.20%, Zinc -1.69% Lead -0.32%, and Tin +0.69%.Gold fell 1.13%, slipping for a second consecutive week as safe-haven demand eased and an increasingly hawkish stance from the Fed added to the downside.Oil prices gained overnight as Iraq voiced support for OPEFC+ oil cuts. Brent Crude +2.10%, and WTI +2.32%.10Y yields: US 4.618%, Australia 4.632%, and Germany 2.715%.Why not sign up for a free trial? Get access to expert insights and research and become a better investor.Make life simple. Invest with Marcus Today.
In 1972, 3 seismometers were put on the Moon. And a recent take on the data suggests something up there is moving around. Join us for this Lunar mystery. Also! The Galaxy is dancing. Really. And I can explain. --- Love the show and wanna show some love? Instagram: @wellthatsinterestingpod Twitter: @wti_pod Venmo Tip Jar: @WellThatsInteresting Oh, BTW. You're interesting. Email YOUR facts, stories, experiences... Nothing is too big or too small. I'll read it on the show: firstname.lastname@example.org WTI is a part of the Airwave Media podcast network! Visit AirwaveMedia.com to listen and subscribe to other incredible shows. Want to advertise your glorious product on WTI? Email me: email@example.com Learn more about your ad choices. Visit megaphone.fm/adchoices
Peter Tchir, Academy Securities Head of Macro Strategy, points to potential issues in the global supply chain amid ongoing geopolitical conflicts. Libby Cantrill, PIMCO Managing Director of Public Policy, says the margin of error for House Republicans to avoid a government shutdown has narrowed. Dan Ives, Wedbush Sr. Equity Research Analyst, predicts that Apple could look to buy ESPN. Alexander Goldfarb, Piper Sandler Senior Research Analyst, says the commercial real estate market is in the midst of a rare phenomenon.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full Transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. Our guest of the Morning to synthesize all this with our question. Peter Cheers joins us. Now ahead of macro strategy at Academy Securities, you look for price up, yield down. What will that do to the equity market. I think for now it's going to be good. I think we see four thirty on tens before before we see four to seventy five. I think the pain trade is actually to lower yields. A lot of people who are bullished at five kind of got short again. I think that works until we get down about four thirty five. Equities rally on the back of that. Then we realize we're getting here because things like oil copper receding because the economy is actually slowing fast so I think at that point that's when the recession fear start getting priced back into stock. Taking Academy Securities three year view, you've got that slowing global demand. Nick bennenbrook On from Wells Fargo stunning with a two point four percent global GDP call. Can you own equities out with a three year vision? I think you could if you had a three year vision. I think right now it's more like a two to three week vision. Everything's so volatile. We don't know where this economy is turning. We don't know what's going on there. And one thing that's starting to scare me is we're having a lot of discussions about the Middle East. We're starting to hear a little bit more concerns about supply chains. I don't think it's an issue today, but if as this drags on, if there's any degree of escalation, supply chains become an issue again. So I think that will be a big drag on the economy. The Middle East crude last month is just unreal. To see a move of almost eleven percent lower on WTI, even with the heightened tension in the Middle least, A lot of people appointing to maybe demand starting to crack in a certain places around the world, Europe one, maybe even the United States gone into next year. What's your view on that. Yeah, I think the last time I was here, I said buying oil was not going to be a good hedge for escalation there because oil had been under so much pressure before, and I think that's what we're seeing again. There's just that lack of demand and the Saudis definitely have the ability to turn on the tap if they want. We're clearly trying to figure out how to work with Venezuela, and so far it looks like Aram's going to continue to pump oil despite the sanctions, despite the height intensions there. So there's not much in favor of oil right now, and I think that's a very crowded long position, so I could see that breaking lower coming into next year. You mentioned a two to three week view. I'm with you. You You know what's about to happen. Then in the next two to three weeks, we're going to get a load of people publishing their outlooks for twenty twenty four. Can you help us understand how you get any visibility whatsoever into next year? What's the strategic view going into you know, I think there's still some big themes. I think AI, how people are using AI, the efficiency that that could cause for companies. I think that's going to be a big theme still. So you can look over that. Where are we going to be on the defense spending? Where are we going to be in terms of geopolitical spending. I think the reshoring is still real. I think a reasonably healthy economy with their decent jobs is still the overriding thing. So I think markets are a little bit more volatile, volatile right now than the underlying economy is. So if you put this together to what you said earlier, that you see benchmark ten year yields getting down to four point three five percent before going back up to four point seventy five percent, or just basically they're heading lower. Does that mean that we're going to have slower growth but still the soft landing and that it basically people are going to get a little concerned about stocks, but that it sets up a rally. And I'm just trying to understand. No, I think a very convoluted range of thoughts. So I think as we move towards four thirty five, you get this, Oh, this is all good for stocks, and then as you start moving below four forty, I think people realize, oh man, we're getting there. Because things are not in the economy. The job market has changed, you know, white collar workers aren't doing as well as they were. You're seeing, i think, some potential for spending. You're seeing little cracks in the housing prices. So I think, all of a sudden, by year end, we're going to be back on a hard landing discussion and it'll be the boy who Cried Wolf, but we'll all be back talking about no more soft landing. We've overdone it. So you think that at that point, treasures will continue to be Haven's once again, even though arguably one of the biggest drivers of the yield move has been Washington, d C. And it doesn't look like that's changing. That's not changing. But again that's a three five ten year sort of pain. It's you know, we get ahead of ourselves. And I do think the one problem we all have is the bond market's so big. You talk about these numbers, two hundred and fifty billion, and it's huge, but it's you know, a fraction of twenty five trillions. So I think the ability to digest this you see corporate bonds come out twenty two billion yesterday, I believe it was you know, there's no problem digesting this, so I think the market's pretty healthy. I think people see yields as attractive. You're going to see people continue to add to that, so I think that's fine. It's going to be the risk side of things that gets people a little bit more spooked. Tell me about the November real yield shift we've seen. We've seen the ten year real yield migrate two point five zero percent to two point one nine percent. That makes things easier for everybody, right, it does. But I think the nominal yields still play a big role. They're still relatively high, and we had that move from you know, three seventy five to five, so we haven't clawed a lot of that back. I think there's this long you know, invariable lag time is really long. This time people did such a good job locking in yields. It's only now that you're hearing more and more people have to roll over their debt. Right if you issue to your debt back in the hey day, Now it's rolling over. Three year debt's not quite rolling over. So I think we're just starting to see that slow down impact. And I think one point John brings up, we've got what we've been calling this faux liquidity, this fake liquidity. It feels like the markets are super liquid at any given price point, but the ability to gap high or low is there. So I think we got pushed to five percent by people getting stopped out, pushing on yields. We're now got back to four fifty in a heartbeat because people are getting stopped out. So that's what we're trying to I think manage is like, what's the real noise versus the signal? You mentioned the Great Financinc. The Great Financinc. Of the pandemic, the huge wealth transfer we had from Treasury to the consumer. Consumer balance sheets were stronger. Everyone under the Sunny wonder House remortgage termed out that debt low rates. Corporate America did the same thing. One place didn't Treasury standrug Amit has been very critical of leadership a Treasury over the last i don't know, five years through that low interest rate period not termin out the debt. What are your thoughts on that? What do you think about that conversation? Yeah, I think they should have done what corporations did. I'm always a big believer, right, you know, borrolong it blocks in, you reduce volatility. And we're having a lot of conversation with clients. Probably a little bit hypothetical at this point, but maybe people are supposed to be under weight treasuries and T bills and way overweight whether it's commercial paper or corporations. That right, if you take a step back and talk about this as being governance, right, the US governance is offer right now in terms of our spending, in terms of we talk about not paying our bills. Right, you look at the large corporation's world. They have good corporate governance, they have global plans. They never once would ever even think about saying, oh, we're not going to pay our debt on time because we don't feel like it. So I think you're supposed to be starting to push really heavily to overweight high quality corporates, maybe in commercial paper, maybe some abs, and move really underweight T bills. So do you foresee a time when Apple can borrow at a lower rate than the US government? You know that ability to break the sovereign ceiling rarely happens, even in emerging markets. I don't think it happens here, but I do think you can see really tight spread compression, especially at the front end of the corporate bond curve. So I like that as a trade. Do you think we get convergence spread compression on governance issues alone? I think that will play a part of it. Yeah. I think the top quality companies have a ton of cash. The liquidity in the bond markets not what it once was, So whatever you have to pay up their own tea bills, maybe you don't. And I think this government issue is going to become a real thought again. If you think about it, why would you lend to someone who talks about not paying your debt because for a long time they've had the privilege of acting recklessly correct talked about this so many times there's been no consequence for it. Why is this time different. I think something we talked about before snapped in the market, and all of a sudden people are really questioning this whole you know, correlation or coalescence of events that have been on the back of everyone's mind. I don't think it cracks this time, certainly, but I think it starts setting us in stage again. I always go back to the Great Financial Crisis. It started breaking in two thousand and six, got fixed, broken in in two thousand and seven, got fixed, broken in in two thousand and seven, got fixed. So I feel now we've started this unwined and unless DC gets its act together, this is going to be Every time it rears its head, it'll get uglier. But it's not this year's story anymore. Pet love it always thoughtful Pitcher. There of academic securities. Lebby Cantrell joints Now managing director had a public policy a pinkel. You're the only one I can do this with. Can you take the election results and you can fold them into a government shutdown which happens in about three cups of coffee? Can you make that exercise happen? Yeah? Well, good morning, and thank you for not asking me a question about orgo. I did I take organic chemistry at school, so thanks thanks for testing me on that. Yeah, so I do think that the read through actually from last night, Tom So thanks thanks for a layup. Here is actually Democrats won a special election in Rhode Island. This was a is a blue race, a blue seat, this is a house seat. That means that they have two hundred and thirteen seats in the House. Republicans, however, only have two hundred and twenty one. They have a special election in Utah in a few weeks. The reason why this actually means this is important from a government shutdown perspective is that means practically that Republicans now can only lose three seats excuse me, three votes in order to pass a funding bill that they need a pass to avoid a shutdown by next Friday. So it just means that the margin of error is much more narrow for Republicans. Speaker Johnson was already needing to thread a needle, if you will, and that a needle point has just gotten even more narrow from the result from last night and threading the needle. What will moderate Republicans do? I don't have it in front of me, but I'm going to suggest on Long Island east of New York City, the Republicans had a good night. What are the moderate I guess the former president would say, Republicans in name only. How do they adapt an adjust off the selection? Yeah, I think that what we learned last night is that the abortion rights still very much resonate. That was obviously a takeaway from the twenty two, twenty twenty two midterms, where abortion really emboldened turnout. It shows last night that this really is very much an issue, especially when it is on the ballot. Now, I think for twenty twenty four, many of these folks, particularly in those districts Tom that you mentioned, where there are you know, Republicans who are defending Biden districts. The Democrats will make this an issue. You're going to hear a lot about abortion rights over the next year because of the results of last night, just sort of underscoring that this clearly is a resident voting issue for voters. So in terms of the government shutdown, what does that make those moderate Republicans do They are voting in lockstep here. They really are trying to give Speaker Johnson, you know, the benefit of the doubt. I think that will continue. I think the big question for markets is, though, is that enough can they actually avoid a shutdown If they pass a partisan bill, Tom, we will see a shutdown next Friday. So again kind of an open question of how this all resolves. But as of now, it looks like they are voting in a partisan way, which means that shutdown risk is you know, I think is increased over the last week or so. Do markets care though, I mean, as a shutdown basically, okay, they're going to do it for twenty four hours for effect and then we'll move on. Yeah, least, I think that's that's that's that's the real the real issue. If it is a temporary shutdown, no, this will just be more DC noise. If it's a longer, more prolonged shutdown, it does become I mean, the economic impacts of you know, lots of federal workers being furloughed not actually collecting a paycheck could matter. And also, you know, the data matters, right. If we don't get data from the Department of Labor, for instance, that makes the Fed's job, you know, a little bit a little bit harder. And we can also see, you know that this term premium that you all been talking about, we could see you know, some of the yields back up again as well on account of this. So I think you're right. If it's a short term shutdown, no, the markets probably don't care. If it's longer term, however, you know, it may it may weigh on you know. Again, I just sort of the confidence around sort of the political apparatus in Washington, d C. Just shifting from last night's elections to what we're expecting next year, a presidential election. How much of a certainty do you think that it is that we're going to President Biden versus former President Trump. How much will tonight's debate really color that discussion about potential other running candidates for the Republican Party in particular. Yeah, so, I think what we've been messaging to client Lisa is with high conviction President Biden will be the nominee for the Democratic Party. This idea that he is going to drop out, that Governor Newsom, for instance, may jump into the race, it just is not It's just not realistic at this point. Nor is there any indication from the Biden camp that he has any interest in dropping out or any intention of dropping out. So he will be the Democratic nominee again, you know, excluding or assuming there's no sort of exident health issue or what have you. On the Republican side, I President Trump obviously has an incredibly formidable lead in the polls, but this is actually a really important point. He his campaign is much more organized, i think by his own emission, than it was in twenty sixteen, and they have been systematic changing the delegate rules in the states in terms of how the state primaries allocate delegates to his benefit. So not only does he have this formidable lead in the polls, but he's also sort of changed the kind of the machinations behind the scenes in terms of how these delegates are allocated, and of course getting the nominations just a delegate game, So the fact that he's been changing these rules is to his benefit as well. So, I mean a lot would have to happen, I think tonight and over the next two months. Now. I think what we can show from even last night that voting behavior is the most important thing to look at and polls are not always right, and so particularly in Iowa and New Hampshire, Nevada, and South Carolina. Those are the four the first contests, Lisa, and how we're guiding our clients is if Trump wins all of those, then he very likely is going to be the nominee. However, if there's somebody can test one of those that it could be easily become a two person race. But again sort of remains to be seen. In terms of tonight, it's really a race for number two DeSantis between and Haley. Yeah, I think we will see it be pretty pretty nasty and pretty ugly tonight. I'm looking forward to that debt a little bit. Nice Levie, thank you going to catch out you're one of the best. You're going to catch with a pimcot the vix at fourteen point eighty four. That is a Dana Ives market you, Senior Equity Research Channal web Bush. You refuses to talk to us when Apple learnings come out. We only get them to pick up the debris and we can tell for those of you on radio, you can understand these long Lily Pulitzer as well. This morning. Great, Look, Dan, I want to talk about your two forty call on Apple. You're not lonely. There's a few other people out there with dana Ives optimism on Apple. When I saw those margins and a company managing for profit not revenue growth, can you raise your two forty estimate? Yeah? Look, I think this is just the beginning of the next fees of the Apple store. You look at margins that are historical. You look what's happening on services now mid teen growth, and I despite the haters continuing to hate, is growing even when you take out currency and you it's even growing more asps the China iPhone demise story is a fictional Netflix story, and in my opinion, this is just the start of what I ultimately view is at three and a half to four trillion dollar market. So slow day, we got to make some news here. Can you pop from two forty up to two fifty this morning for us? Look, I believe that I believe are the best case or the bowld case is probably closer to to seventy five as this all plays out, because also now you don't have AI in those numbers. This is just the get out the popcorn moment for when Apple ultimately I believe, over the next year, introduces the AI app Store, and that's just going to be you know, ultimately from a services perspective, that could be an incremental five to ten fifteen millions. You made a couple of statements, so let's stroke down on them. We can do that. Your friends, you talked about growth at the iPhone. What growth are you talking about? So if you unit growth, units are growing into the December quarter, you also if you take out currency, which is a headwind, you have basically mid single digit growth. You've been talking about a massive boom of people upgrading. I guess my questions you dan to be polite about it. Have you been right for the wrong reasons on the stock to acknowledge that? I would say that ultimately, if you look at this, what I've used a mini supercycle that's playing out. The ASP stories played out, and I think our biggest call has been China. Despite many yelling fire in a crowd theater, the China growth is actually increasing, not decreasing. But they had a down quarter right in China. Well, if you look at China, Meanli in China was actually a record for the September quarter. When you look at the overall, you know, as Keen talks about the initial reaction after sure iPads, max that and three dollars get your cup of coffee, I'm focused on iPhones where units were up in China. Well, I'm struggling with that. And you'll appreciate this. If you came on today and say margins it better they are. I'm with you, Okay, Margins are great service revenues where the growth is that deserves a high multiple. I understand that maybe you can make the case for why the stock is high this year based on those things. When you say things like iPhone supercycles, when we've had no growth for four quarters in the company, that's where I struggle. Can you have the understanding this? So it's dissect that first. When you're thinking about the card five six hundred BIPs f X headwinds, that is actually underlying growth that you're seeing an iPhone units. Just to steady state it. I also believe our whole view of the iPhone cycle is really going to be over the next three, four or five quarters. That's where you're going to have these upgrades that actually come through. I'm not saying that you don't have some maybe share minor share of Watses on the sort of mid tier, but in terms of high end as a utility, this essentially is going to be a mid to high single digit growth on iPhone, and when you start to run that through, that could be an incremental one two three dollars earnings As you look out next two three years. There's a lot of growth already baked into valuation, and a big piece of valuation is where the buyers are going to come from. And you've been traveling around the world trying to hold everyone's hand and convince them that there is still value in big tech. How much do the losses of other areas of the tech like sphere and I'm thinking of Masioshi's Sun and the more than eleven billion dollars loss on we work. How much does that play into a little ambivalence about buying the story right now. Look, I think you're definitely having winners and losers in terms of this just broader economy, and I think in terms of the Magnificent seven. In terms of big tech, I think the strong gets stronger. But he said, to my point, you know, being an easier for a few weeks, and in Europe, you know, it's very easy to sit there here in New York on your tenth floor spreadsheet being negative on Apple. What I see out in the world is a much different environment in terms of the growth that happening. And I believe tech to your point, you're going to see the strong continuing to dominate. And I think in terms of AI, we are just in the early stages of monetization. I think that's a big thing in this tech ball market. Microsoft saw it in terms of AI, you're starting now see monization data dog that's a Hall of Fame quarter in terms of what we saw there, pallenteer the messy of AI, and I believe ultimately right now the AI gold rush is actually starting. That sounds lovely on that side. On the side of how much we're paying for price monetization and monetization of AI, am looking at Apple plus in sort of the amount that though that's increased, are we going to be paying six hundred dollars a month to Apple for all of our various services? Look, I think over in there, But to your point, I think over the next year or two, I think the average Apple user is going to start to definitely increase what they're paying Apple on the services because ultimately, as it goes out, the A I technology that's gonna be in fitness health in the app store, that's just going to give them just another added growth to the monization of Coupertino. And I think part of why the stocks reacted, you know, despite you know many I think being very negative initially, as it's come through, you know, to Pharaoh's point, iPhone, you're now starting to see grow services mid teen growth margins. This is just another you know, flex and muscles moment. And I think that's on a sum of the parts, how this is a stock that Ultimate is gonna be a four trillion dollar markup by twenty twenty five. Just picking up on penalty the messy of Ai. Why why are they the messy of Ais? Because I believe they are the pures play AI name in the market period. And and look, Palenteer is one where you know, many have been negative on that story for a number of different reasons. But I think what you're seeing now happen is that they've actually parlayd enterprise success and you're seeing the use cases explode. I believe Palteerman twenty five is are a base case, but that is the golden child of AIS. I'm gonna make some news any day now. Do I see another massive, mega billion dollar Apple debt offering. Look, I think that's something that you know clearly, you know could be on the table. I think the bigger thing for Apple is I think they're finally going to look at M and A, and we've talked about I think we got to extend the in They're gonna buy Disney by by the week. I believe ESPN is the asset that Ultimate by Okay, you but for that, I think thirty five to forty billion in terms of what bates transaction, but it could not beats three and a half billion. But also it goes back to the MLS deal that was I think where the light bulb went off in terms of live streaming sports. I think ESPN is a unique ass And look right now, you look at the top of this mound, it's Nodella, it's cook, you know, it's You're really starting to see ultimately more of an opportunity where they could go on the offensive ratherland defense. Okay, it's good to see you. Thank you, buddy Dennice of web Bush. It's joining us to talk about just how bad of a time this is for this to hit. Alexander Goldfarb, Senior Research and Analystic Piper Sandler. I want to start there, Alexander. There've been talks discussions around the number of leases that we work is going to abandon. Is the pressure on commercial real estate office space in particular in New York is it overstated right now or understated? Well, good morning Lisa and Tom, and thank you for having me on you know here at Piper Sandler. When we look at what is going on in office, it's it's eerily similar to what happened with malls. You know, over the past decade. If you recall, everyone pre pandemic thought every single mall going to close because everyone was going to shop online, and in fact what happened is the dominant malls like the Roosevelt Fields or Houston Gallerias continue to excel and lesser malls fall away. The same thing is with office. So if you look at we Work, which we don't cover we Work, but if you look at some of the fallout out in San Francisco, they rejected a bunch of leases. They did not reject one lease from Boston properties. When you look in San Francisco, when you look in New York, you know, companies like s Green Bornado have zero exposure now to WE Work because they exited those we Work leases over the past number of years, and even Boston properties only as one percent. So when you look at the fallout that's going to happen, and you look at the major reats and especially the ones that we cover here at Piper Sandler, the impact is negligible. And what's really interesting is when you look at office, especially here in New York, it's gravitating around Grand Central, and actually you're seeing rents increase on Park Avenue. So just like MAUL, the dominant office will survive the lesser the generic office. That's where the trouble is. So are you saying right now that the prices have baked in a lot of that trouble or that people just haven't been discerning enough to understand the winners versus the losers. Absolutely. If you speak to the brokerage community like Newmark, they are starting, They and Cushman and the other brokerage companies are starting to discern the difference between top tier versus generic, Class A, class B, etc. So when you look at what tenants want today, tenants want, you know, great space with a lot of amenities, convenient, convenient for commuters, and they want a landlord who has the capital wherewithal to invest in the properties. And let's face it, the brokers want to get paid a commission and you're seeing that fallout. It's no different than we've seen in retail. So again I use the mall example, Simon Property Group, you know with their billion dollars a year from task, so tenants know that they can be there the same as happening in reats with companies like sl Green. That's right where I wanted to go, Alexander, you are reading my mind. What is David Simon going to do with this folks? Simon Property Group Indianapolis three thousand employees. What is the guy from Indiana University can do? He's seen this before we come down. But my history is fresh money always comes in. When does the fresh money click in? If transaction to transaction, I'm down forty percent. Well, you are speaking David's mind. He loves cash flow. So since IPO, the company's paid out thirty nine billion in dividends, and the reason they've done that is by investing shrewdly. So when you look right now, he's very focused on investing in his malls. So apart from the Tallman acquisition, which was structured before the pandemic, he hasn't bought anything on the outside. His focus has been investing in the malls like out in Northgate and Sea out Of where they're converting it into a hockey arena, or Houston Gallera where they're adding office and apartments, etc. So that's where he's focused. But let's face it, given the challenges away from Simon. He can pick and choose. But if you look, he's making a ton of money out of his portfolio, which people forget is actually small. It's only one hundred and twenty malls and only two hundred or so domestic properties in total. So he's a large company but with a small powerhouse portfolio, right, Ben Alison, I got to make some headlines here. We're in the business and news, Alexander. There's blood on the streets. We see it in New York, and I get it. New York's its own little weird place, but there's all across the nation real estate blood on the streets. Are you saying your world of reats back to when you were at Lehman, your world of reads? Is it now a screaming by because of all the agony Lisa was just framing, So it's not a screaming buy in the sense that interest rates are high. Right, we have a tenure that was approaching five percent and it's now backed off a little. But certainly the financing market, which as you guys have reported, is basically shut down, right, CNBS market is tough. You walk into a bank and try to get a construction loan, they'll call the cops on you. They're like, we don't do that right now. Right, So lending is very tough. The transaction market is almost on ice because of the widespread what's interesting people missing? Tom, You're like my first boss at Liam and David Shulman. You've been around a number of decades. Real estate right now is benefiting from a phenomena that it has not had in a long long time, which is low supply because nothing new is getting built, and low vacancy. That combination is really powerful. And you started the show by saying, how is the credit going to get worked out? Again? As you as we've spoken before, back in the GFC, everyone was panicked about the CNBS. No one can tell you where the benchmark GG ten? What happened to that famous twenty two thousand and seven feel right, stuff gets worked out, Obviously there will be pain, there will be blood, for sure. But if you look at real estate's biggest benefit right now, it's that lack of supply and low vocacy. That's a huge positive that is underappreciated by the market. Just about thirty seconds. What happens if there's for selling, akin to re work, so we work is a tenant, so you don't really have force selling from that. But to be clear, banks where everyone's focused on, they're not in the business a running real estate, right. So as long as it's a good asset with a good sponsor, they're going to work out some deal. Because, as the old adage goes, a rolling loan collects no loss. That said, there's clearly going to be assets that will go back to the lenders. And those are the assets where the economics don't exist. That's the stuff to worry about. But the big properties like the three ninety nine Parks, the one Vanderbilts, those big centers or are going to be fine. And again, when you look at where the value in real estate is, it's a crewing at the top. But you're right there will be blood, and the blood it's going to be generic assets. Alexander Brilliant, Alexander Goldfire years of work at Piper Sandler now on real estate investment trust. Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify and anywhere else you get your podcasts. Listen live every weekday starting at seven am Eastern. I'm Bloomberg dot com, the iHeartRadio app. Tune in and the Bloomberg Business App. You can watch us live on Bloomberg Television and always on the Bloomberg Terminal. Thanks for listening. I'm Tom Keane, and this is BloombergSee omnystudio.com/listener for privacy information.
#recession #money #recession2023 #money #inflation #deflation #interestrates #dollar #economy #credit #interestrates #liquidity #oil #gasoline Oil and gasoline prices are falling fast. While that sounds like a good thing, it is anything but. The energy market is coming to grips with the renewed downturn and recession. Big moves for the WTI curve and global bonds. It's not September any longer. Eurodollar University's Money & Macro AnalysisAAA US average retail gasoline priceshttps://gasprices.aaa.com/Bloomberg: Saudi, Russia Stick to Planned Oil Cuts Amid Mideast Tensionhttps://www.bloomberg.com/news/articles/2023-11-05/saudi-arabia-sticks-with-plan-for-oil-cuts-amid-mideast-tensionTwitter: https://twitter.com/JeffSnider_AIPhttps://www.eurodollar.universityRealClearMarkets Essays: https://bit.ly/38tL5a7
We have been paying a lot of attention to and thinking a lot about power, power costs, power reliability, power systems, access to power, etc., and have focused a number of episodes on these issues. Earlier this June, we had a great conversation with John Bear, CEO of MISO (episode linked here) and in that discussion, we asked John what the country could be doing to better understand the system and reliability issues as a whole. John informed us that there was indeed such an organization dedicated to those issues and that we needed to connect with Jim Robb, President and CEO of the North American Electric Reliability Corporation (NERC). At John's suggestion, we reached out and are thrilled to host Jim for today's COBT episode. Jim joined NERC in 2018 and has over 35 years of experience in the power and energy sectors across engineering, consulting, and senior leadership roles at Western Electricity Coordinating Council, Northeast Utilities, Reliant Energy, and McKinsey. NERC is a non-profit regulatory authority whose mission is to assure the reliability and security of the North American bulk power system including the continental United States, Canada, and the northern portion of Baja California, Mexico. A detailed overview of NERC's history is linked here. We were excited to visit with Jim and hear his valuable insights into the evolving and complex nature of the power grid. Jim first provides background on the structure and mission of NERC and the growth in electricity usage driven by economic and technological developments and changing consumer habits. We then delve into the need for improved infrastructure development, supply chain issues, especially in securing transformers, and the importance of prioritizing transmission development as a vital part of the energy transition. Jim further describes the interaction between NERC and various entities including ISOs, market designers, and PUCs, as well as NERC's oversight of grid operation entities and their collaborative approach in setting and enforcing standards. We also discuss NERC's standards, and as you'll hear, Jim describes them as guidelines for preserving the collective performance of the entire system. In our conversation, we also touch on the challenges and opportunities with new battery technologies, the integration of renewables into the grid, the importance of natural gas for maintaining stability, implications of increasing demand and the need for long-duration energy storage technologies, the likelihood that the cost of electricity increases in the coming years due to the transformation of the grid, and much more. We walked away with a greater appreciation for the work Jim and the team at NERC are doing and appreciate Jim sharing his time and perspective with us today. Mike Bradley kicked us off by highlighting that equity markets have had a substantial rally over the last week, attributed to lower bond yields and interest rates. He pointed out the significant drop in WTI crude price this week to $77.50/bbl. and emphasized the importance of WTI maintaining this technical trading level, or risk downside to trading support levels of $72-$73/bbl. He highlighted the plunge in crude oil time spreads due to recent weak Chinese economic data and Mideast turmoil that still seems to be contained. Additionally, he emphasized the significance of the upcoming OPEC meeting on November 26 for crude oil. He highlighted recent datapoints from electric utility Q3 conference calls and noted that a leading Southeastern electric utility was going to be increasing their electricity sales growth over the next five years from prior levels of 0-1% up to mid-high single digits. He further noted that this type of electricity sales uplift is unprecedented and that several other utilities are al
US equities were mostly higher in Tuesday trading, though ended a bit off best levels, with the Dow, S&P, and Nasdaq finishing up 0.17%, 0.28%, and 0.90%, respectively. Software, semis, OTAs, telecom and most big tech beat the tape. Energy was the worst performer on crude weakness. Materials were also under pressure on fairly broad-based weakness. Machinery, multis, rails, parcels and logistics, regional banks, insurance, autos, casinos, and department stores were among the other underperformers. Treasuries were firmer with curve flattening following some pressure on Monday after a big rally in the prior week, with corporate supply mentioned as another overhang. The dollar index was up 0.3% with Aussie weakness being the big FX story after the RBA decision for a dovish hike. Gold finished down 0.8% while bitcoin futures were up 2.5%. WTI crude ended down 4.3%, below $80/barrel and its lowest settlement since July. That said, earnings activity still fairly elevated, though not many high-profile reporters are left. Q4 beat rates are above the one-year average, though Q4 has seen outsized cuts. Overall, there is a big debate right now about whether last week's outsized equity bounce and rate rally have more room to run.
Minneapolis Fed President Neel Kashkari says policymakers have yet to win the fight against inflation, and that they will consider more tightening if needed. Neil Dutta, Renaissance Macro Research US Economic Research Head, says a rebalanced labor market could led to a rate cut. Katy Kaminski, AlphaSimplex Chief Research Strategist, expects more potential buying for treasuries in the short-term. Mohamed Younis, Gallup Editor-In-Chief, previews the off-year elections happening across several US states. Nadia Martin Wiggen, Svelland Capital Director, discusses the global oil market as prices fall to over two-month lows. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Lisa A. Bromoids, along with Tom Keen and Jonathan Ferrow, join us each day for insight from the best in economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. This morning, Mike McKay Drumrow, fantastic guests the random type with us to talk about Fed policy. Yes, and thank you very much, John, because we are pleased to welcome Neil Kashkari, the President of the Federal Reserve Bank of Minneapolis, to the table today. Thank you for coming in making the trip all the way to New York only for us. I'm sure nothing else There would be nothing else this morning, and except for Bloomberg Surveillance. You're kind of known as the guy who is the most hawkish. I don't want to characterize you exactly now, given how things have changed over the last couple of months, but you have left open the possibility of doing more. How much more would you think the economy might need? Are we talking about just that one leftover move from the dot plot in September, or if you have to start raising again, do you have to go farther. Probably. Well, first of all, it's great to see you, Thanks for having me. People are looking for certainty, and I wish I could give that certainty provided there's been so much, so much it's unusual about the reopening of the economy and the dynamics that led to the high inflation, and how long it has taken, and the dynamics as the disinflation process has taken hold. I wish I knew. We have to let the inflation data guide US, the labor market data guide US, just to point out the obvious. Our forecasts have not been great over the past couple of years, and so we just need to We're all committed. Everybody on the FORMC has committed that two percent is our inflation target. We have to get inflation back down to two percent over a reasonable period of time. Ultimately, the economy will tell us how much is needed to get there, And I just don't know. Well, at what point do you think you would believe you have tightened enough or not tightened enough? What is it that you're looking for. Well, I'll give you some good news is that core PC on a three month basis is running about two point five percent, and it's lower than the six month data. It's lower than the one year data. So that suggests that the disinflation is real. If we continue to see inflation numbers of that range two point five percent or lower on a go forward basis, that would tell me, Okay, we are now on a path back to two percent inflation. But three months data is still only three months data, and if we see that start to tick back up again, that would tell me our job is not yet done. Tick back up means what? In other words, we get another couple of CPI reports in a PCE report before your next meeting, a couple of tents higher. The chairman and others say it's going to be lumpy or does it have to be a significant move? In other words, what are you thinking about for December? Well, I think we could look at, as the chairman always says, we look at all of the data. So what surprises Over the past few months, We've been surprised by how strong American consumers have been. Consumer spending is held up remarkably well, we've been surprised by GDP growth. When activity continues to run this hot, that makes me question is policy as tight as we assume that it currently is. So if you saw inflation tick back up and you saw continued very strong economic activity on the real side of the economy, that would tell me, okay, we might need to do more. So it's hard for me to say this one data point needs to be here. I would be looking at the suite of data. Did we outsource doing more to financial markets? In the arts week? Have we outsourced doing more to financial markets? You know, this is a very complicated question on what has been driving the long end of the Yeld curve. Some people point to term premium, and I always joke the term premium is the economist version of dark matter. It's the residual of all the stuff we can't explain. It's not that our models are wrong, it's the dark matter is out there. So that's the term premium. And some people say, well, that's driven by fiscal If it was fiscal driving the term premium, I would have expected to see a week dollar. Usually when investors are worried about a country's fiscal position, their currency weekends our currency has been quite strong. It makes me wonder is it really fiscal driving the term premium. Another possibility is the path of policy over the next few years. That could explain both the stronger dollar and the weaker stock market going into the last meeting. Another one is that maybe the neutral rate is higher, or maybe it's a combination of all three of these. And so these are things that we're spending a lot of time trying to understand what the markets are doing. But just speaking for myself, I'm not comfortable saying which of those three it is, because which of those three it is determines what it means for policy. If it is the term premium, then it is doing some work for the FED. But if it's the neutral rate, or if it's the forward guidance of the path of policy, then we would actually have to follow through to preserve those rates. So how did this line end up in the statement? And I'll share it with that audience. The kind of financial and credit conditions for households and businesses are likely to wound economic activity, hiring, an inflation. Where's that coming from? Oh, that's been there for a long time. I mean, that's been in there since the Silicon Valley bank episode and the banking stresses leading to some tightening of credit conditions across the economy. So I think that that's right. I, for one, don't say that that means the recent moves in the old curve. How fluid is that assessment? Can that change from month to month, meeting to mating, because some of those comments around that has inspired quite a move in this market over the last week. Well, you know, one of the things about the statements, we always have to be careful about putting things into the statement because they tend to be long lived and it's hard to pull them out of the statement because as soon as you take something out, then all of a sudden, people say, oh my gosh, they're declaring that all the banking stresses are over, as an example, and so, you know, I would look at all of the range of commentary that you get, look at what the chairman says, look at his press conference to get a read of the thought of the committee. You said that people want certainty that you can't give it to them, and I understand that, but people don't just want certainty, they also want some sort of guiding philosophy. Do you think that Fed Shir Powell has outlined some sort of guiding philosophy and where the bar is to cut rates and where the bar is to raise them further. Well, I think he's articulated very clearly that we're committed to getting back to two percent inflation. Right. There's been some chatter amongst economists that maybe we should raise the inflation target. I think he's done a great job saying that is not on the table. We're not going to do that. We're going to get inflation back to two percent, and we're going to let the data guide us. We've moved very aggressively. We've made a lot of progress on inflation. We're not done yet, meaning inflation is not back to our target, and if we need to do more, we will. There seem to be a feeling in markets that the bar to cut rates has been lowered over the past week or two weeks. Suddenly not only are we reaching a pause and have we seen a peek in the FED funds rate, but that also the Fed will cut next year, maybe surgically. Neil Dada is talking about that and he's coming up next. Do you want to push back against that? Do you think that the bar to cut is still just as high as it was. I have no idea where market participants are getting that. There's no discussion amongst me and any of my colleagues about when we're going to start preparing to cut rates. The only thing that's been talked about at all is that at some point, when inflation is well on its way back down, if we didn't back off a little bit, then real rates would be getting tighter and tighter and tighter. And that's real, but that's math. But is there enough weakness currently in the market in the economy, I should say to give you that sense at this point, look at the last GDP print. I mean, does anybody look at that and think, oh, my gosh. The economy we for the last twelve months GDP has been very strong. The labor market continues to be quite robust. Yes, the unemployment rate is ticked up to three point nine percent, but we've also seen a huge surge of labor supply, which is really positive come online. So I'm looking at this, I'm seeing consumers that are strong. My air by the way, my airplane that I came here on was one hundred percent full yesterday. It's going to be one hundred percent full today, I'm not seeing a lot of evidence that the economy is weaken Well, whether you go higher or not, you are on board for longer. And so you must have modeled out some idea of how long you would need to leave rates unchanged before you could get down to a level low enough that you could take your foot off the break a little bit. How long do you think you'll be at five point five into twenty twenty four. Well, I think it's going to depend if we continue to see inflation prints similar to the ones we've seen the last few months, you know, and we end up with a year of a year at two point five percent core inflation and it continues to trend down, that constellation would give me evidence to say, hey, we ought to look at should we start backing off just so the real policy isn't getting tighter and tighter and tighter, because we're clearly on our way back down to two percent. But again, I don't want to just point to one data series. We will be looking at the suite of data to try to get a read of where the economy is headed. Well, not just data. You talk to businesses in your district, all the time, What are they telling you now about their view of growth and hiring and pricing going forward. It's moderating. So the labor market is still tight in my district, people especially in the Dakotas, really have a hard time finding workers. But in Minnesota, it's still a tight labor market, but it's not as tight as it was six months ago. It's not as tight as it was a year ago. So that kind of maps to the national data that we're seeing of a gently cooling labor market but one that's still very very warm. Same thing with economic activity. Depending on the sector, they're saying, Hey, we feel pretty good about things. We're a little cautious about the future. Obviously, they watch the news, they read the news. There's a lot of economic anxiety that is reported on that people, you know, factor that into their own thinking and their own business planning. So I think the outlooks are still optimistic, but it's cautious optimists. Well are they still raising prices or think they need to? So it's funny there Still they still buy and large have some pricing power more than they had before pandemic, but not as much pricing power as they had six months or a year ago. Can we finish on housic sure in the space of three years, we've had record low interest rates in the highest rates in several decades. Is this housing market broken? Well? I think since the pandemic, we have structurally underbuilt the number of units that we need to meet our growing population. And that's the factor. And that's really about regulation at the local level that are creating barriers to more supply coming in. The raid environment will settle out over time, but structurally we have to actually bring a lot more supply online to meet America at the time, but it could be like twenty thirty years. I think this is the issue here. The legacy of this FMC could well be a generation of people look down to the housing market. Why do you say that there could be a generation of people with two three percent mortgages that never sound their home. Yeah, I don't know. People end up needing to move. It's funny when people don't tell their home because they're locked into a low mortgage. That's less supply, but that's also one less buyer. Most people who buy homes are leaving another home, and so that affects both the supply side and the and the demand side of That's why I set a generation look down because I'm renting and count by, so I'm not sounding anything, and that's the generation. I'm talking about that generation specifically, you concern that could be the legacy at the FORMC. Now. I think the legacy of this FMC is that we've dealt with the pandemic very aggressively. Then we were surprised by very high inflation, but then we move very aggressively to bring the inflation back down. I want to ask you about a story on the Bloomberg terminal today about all the financial CEOs from the US over in Hong Kong sounding very doer and down about the prospects for the economy. They suggest that things are pretty fragile right now, both in the economy and the markets, given everything that's going on around the world and in the shadow banking system as well as theirs. How worried are you, well, I mean, we're always worried about things that can happen all around the world. We've got teams of people looking at different scenarios around the world. Ultimately, we have to focus on what we can control, you know, geopolitics. When Hamas attacked Israel, the first thing we thought of is what's it going to do to the oil market, what's it going to do to commodity prices. Remarkably, the response so far has been muted. But that's something we're obviously paying close attention to. But the broader geopolitical issues are just so far outside of our bounds of forecasting. You know, we have a hard enough time forecasting inflation trying to forecast where geopolitics is going. We just have to focus what we can control. Oil price is dropped. I mean, that's the crazy thing about the last month. Physically, it doesn't make any sense. And this is the reason why trying to get it right is just impossible. And then trying to get the idea of a FED put and whether they're going to respond. I'm just saying people are talking about that now, so yeah, talking about it in the last few hours. Yes, it's on this program. No, always a pleasure, Thank you, Sirving Neil, Cash County, the Minneapolis FED price Alongstide Plympecks, Mi M chab No Tatsa, the head of US economic research at Renaissance Macron. Nil, good morning to you. Good morning. Let's go straight there because my IB was lighting up with messages from you. We're not thinking about tapering. Two months later, we're a long way from neutral cutting a month later. What do you think is going on within the FBC. Where do you think this is going? Well? I think I agree that it doesn't pay much to forecasts right now. It's important just to look at the data as it's coming to you, and so I do sympathize with that. But at the end of the day, I mean, the unemployment rate is up above the fed's forecast for this year, and that's the first time that's happened since March of twenty twenty two. Now you know we're in. When you're in the thick of it, it's hard to know whether that represents the start of something much more onerous or whether it's just the normalization of the labor market. But I think for the FED, I think the doves on the FMC, and remember you know President Kashkari, he tends to lean on the hawkish side of the consensus at the FED. I think for the doves, they have all the ammunition they need to basically put the hawks in a casket. Okay, I mean, I think that's the way I would think about it. I mean, you can point to the pickup in productivity and what that's done to unit labor costs. You can point to what Powell has said, right, I mean, when when central bankers use proceed carefully risk management, that's code for doing nothing. And you know, finally, I mean the employment report was probably understating payroll growth. That's my view. I mean, there's a lot of strike activity and so far, but at the end of the day, average hourly earnings are running just over three percent at an annual rate over the last several months. So I don't think the hawks on the committee frankly, can use the labor markets as a rationale to be hawkish anymore. So that is over and so I think the doves can basically say that the labor markets have been rebalanced. And if they can say that just implicitly, it means that the door is a little bit cracked open for a cut. And you know, the point I'm making to you is, you know J Powell, it wouldn't be the first time he basically, you know, flipped on a dime. I mean, we're a long way from neutral. I mean a few months later he's cutting rates, We're not even thinking about thinking about tapering or hiking, and then we're hiking and tapering basically in the same month. So you know, to me, the fact that they're not talking about it is irrelevant. It's also in their sep for next year. The question is whether these surgical cuts, what are surgical cuts? Basically a few cuts to stabilize the economy. I mean, I think the issue is is the extent to which cutting quickly translates into rapid economic stable So I mean, for as an example, I mean, let's see what happens with mortgage purchase demand. Over the next couple of weeks. We've seen mortgage rates basically come down to what like seven percent. Okay, I'm trying to wrap my head around this. Six months ago, you were talking about way more economic strength in the US economy than people had expected. Now you're talking about strategic or surgical cuts by the Federal Reserve to stabilize the economy. Are you saying that they are warranted because the economy No, I don't think that they are. Part of the tention, Lisa, is that my job isn't to tell people what I think the Fed should do. My job is to try to get into their head and figure out what they will do. I mean, if I was there, would I be I would probably be more hawkish than the consensus on the FMC. But I'm not there. Well, but does this mean that you think the consequence of surgical cuts to fortify the economy will be prolonged inflation? Yes? Okay, So then how do you sort of arrange around that sort of what is the inflation rate? How do you sort of lean into the rally that we've seen in the bond market and say, wait a second, you guys have gotten ahead of your skis based on the game theory that the FED is playing and the way that they're likely to do Searga, I don't know that the bond market's getting ahead of itself. I think the bond market is sniffing out that the distribution of risks have changed. I don't know what the FED may do next. I mean, that's what I think the bond market is doing, and I think bond market investors are right to do that, because, as I say, you know, you think about it basically three prongs, right, the labor market, inflation, and then financial conditions. If the FED can look at the labor market and say the labor markets are rebalanced. Okay, that's check done. You can't use that anymore as a reason to be hawkish. So, if anything, if the unemployment rate's not going up a little bit, the distribution of risks are that they would cut because the labor markets. And right, if the labor markets are thawing, that's going to give them increased confidence that inflation will thaw and so and then finally, if that's the case, they're not going to be particularly concerned about the easing and financial conditions that you've seen since the last in the last week, which is what we've been talking about through this morning, whether they are going to tolerate the easing we've seen over the last week. And it feels like perhaps they will help me work with me here. It feels like to me that you believe the world might have changed post pandemic versus pre pandemic. Do you sense that they still believe were still in the same old world pre pandemic? I do. I mean, I mean, if you listen to someone like New York Fed President John Williams, even Chair Powell, I mean, there's not much there's quite a bit of reluctance to just say that, you know, neutral rates are higher. I mean, why do you think that, is, Neil? You know, I don't know. I mean I think that maybe in their minds things haven't changed. I mean all, I mean, you saw Powell talk about this at at the press conference last week. I mean, oh, well, if we get to pick up in potential growth, it's a temporary pick up and potential growth, then we'll go back down. So if you don't think that the world has fundamentally changed, then you're going to be more sort of cognizant of overtightening risk. Right Like, So if the unemployment rate is starting to go up, you may have thought, well, maybe you overdid it, so you might be more willing to cut sooner as a result. So are you more bullish on the US economy but also expect inflation to remain higher and the FED When people look back, this will be considered a policy air that they weren't hawkish enough. Yeah, I mean I think that that would be Yeah, I mean that would be something I could be saying in twenty twenty five. What would you point to if you had this conversation right now? And I would love to get you around the table next time I have a FED official to work through somebody's issues. But what would you it sounds dangerous as the number one thing that indicates to you that the world has changed, versus pandemic that ultimately they don't believe it. What would you point to, Well, I mean the first is just look at let's look at the obvious. I mean, you've done a lot, and yet the economy is still kind of hanging in there. I would say that things like household formation rates are running twice the rate they did after the Financial crisis. I mean, to me, I think it's much easier to tell the story about why the post financial crisis period was actually the anomaly than not. So I think we're actually going back to the old normal more so than anything else. Obviously, you think about all those people during the financial crisis period or the years after that, we're saving up for retirement. A lot of them have now since retired and they're now dissaving, which is you know, implies higher neutral rates. You think about income inequality, it was something that we were talking about all throughout the twenty tens. Well, it's coming down now. People at the lower end of the wage spectrum. We're seeing more rapid growth in their wages. You see more increased sort of union activity and unions getting big wins for blue collar workers. I mean, these are not things. I mean, and those folks have a much higher propensity to spend. And so I think it's it's not right in my view to say that things haven't changed. But if that's what the FED believes, then you have to be recognizing what that implies for what they might do later. And so I think just because they're not talking about cuts now does not mean they won't be talking about cuts in three six months. That should be in the realm of possibility, and I think the market's Frankly, I'm not willing to fight the move yet. I mean, okay, no a clinic as always. You know you're one of my favors. I think everyone knows that. No data, every nice loose Macro, No, thank you joining guess now. Katy Kaminski, chief research strategist over Alpha Simplex. Katie, it's the number one question for us. Are you still short treasuries? Yes? Why? Well, this is because for trend falling, it's not just about a couple of days, It's really about persistent trends in the market, and I just want to point out, and this is something interesting, trend falling signals have been net short for nine quarters. This is the first time in many decades that this has been the case. And so the reason I'm pausing right now is because we've been saying short, short, short all year, and for the first time, it's starting to feel like we already got that short come through. What's next? What does the market do now? Buy are coming in because yields are at interesting levels. They're probably thinking, maybe we've finally hit that point. Do you think something changed fundamentally to lead to that in the last few weeks. I do, And then I think that the data has come out to support the narrative for investors. But I also think a narrative that has made sense to me is that investors have woken up to the idea that five percent yields at some point there's a buying point where you think, well, there's a chance this could actually go down. And now you start to see this equilibrium occur where you're seeing the disinverted curve, which is something we've been looking for since the beginning of the year. So Katie just to put a bow on this, are you now not short treasuries and actually starting to see value, particularly if yields get up to that five percent level in the tenure. So we're still short in terms of the overall frequency that we see signals, but we are seeing consolidation in those signals, so there's a reduction in that particular conviction. But what I will say is that I'm seeing more and more positive signals on higher frequency, and so I think on the shorter term you're going to see more and more potential buying for treasuries. But I do want to remind everyone inflation is still an issue. Rates could be higher for longer, so there's still really a good chance that we're going to see a lot of volatility instead of a new trend per se that starts to emerge. Yet this raises this question of which particular data points are going to be the real action drivers, like what we saw over the past ten days. Is it going to be basically every inflation read that we get, or do you really buy into this idea that it's treasury supply that's been dictating a lot of the volumes and a lot of the angst that we felt over the past month. It's really interesting that you bring this up, Lisa, because we've been talking about the supply issue. I mean, how often do people actually talk about supply. They're only talking about it because I think people are trying to understand the equilibrium of where people sit and what yield should cost, I mean, what should be the right yield. And I think from our side on the technical side, what we're looking for is potential breakouts so that we're seeing a steeper curve at some point. Our view is it's going to depend on really what happens with the economic data of whether we end up with tighter conditions or if we actually see something very extreme where we actually saw higher yields. Again, that to me seems very unlikely right now, but I think it's really a point to start watching every data point to see which direction the yield market is going to go or which direction the yields go, because it's definitely an inflection point than Katie, were going to catch up with Nil Kashgari in about twenty minutes time. I think we're all looking forward to this conversation. There is this second paragraph in the statement that they put out last week on kind of financial conditions it reaches follows. I'm sure you're familiar with it. Time of financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. Could you still write that same sentence today? After the move we've seen in the last week, what's that on the movement we've seen in the last month, for the the last six months, what do you think it is? Well? I think the challenge is that these numbers come in at different frequencies. Last week we had a massive buying but this could also be somewhat of a relief rally given how much movement we've seen downward, especially in equities. And let's just be honest, like I said, at a five percent yield started to get exciting, people said, oh I better get in there. So I think there's really still This could just be the tip of the beginning of understanding how serious financial conditions have changed, and if it's enough to actually warrant a point where we might actually have cuts at some point earlier than some would would have thought, like myself, who's been very pessimistic about rate cuts. Hey, Ketty, do you have a decent understanding of the conditions that would lead to those cuts. Well, usually in terms of this, I think we'd have to see pretty severe deterioration in financial conditions to see rate cuts, given the mandate of the FED and the fact that the other factors that are really focused on have not come down to their target level. So the fact that inflation is sticky, and the fact that we have a strong workforce and that we have all of these conditions putting us in a good place. They have been pretty clear that they're going to keep us higher for longer until we can sort that out. On the other hand, if we had some sort of very severe draw down or deterioration and credit that was clear, I think that they would have to act. So that to me would be the situation where we would see those rate cuts. Is if you saw something in the credits markets or something in terms of consumers really struggling that would cause them to actually react. So the FED put still exists, just at a much higher pain point, I would say probably yes. I mean, I think it always exists somewhere, but it's definitely moved a lot compared to what we liked in twenty nineteen and before. Kelly Let's finish what we started. Given the uncertainty you now have about your position, why maintain the shot? That's what I'm going to walk away from this conversation scratching my head about why maintain the short when it can be as expensive as it was on weeks last week. So this is the point of trend falling. Systematic trading is about not double sort of using your emotion in the moment. And I think what works with trend falling is following the data, and we just need more data to know the answer, and over longer periods of time, it turns out the market is actually quite good at giving us indications of where things are moving, and it's particularly short term movements where they disagree. Where you want to lean on your own gut, but you shouldn't, because that's what systematic trading is really about. It's about measuring and falling the markets and allowing the markets to tell you what the market where we're going, as opposed to sort of my own personal view. Unfortunately, Katie, thanks for the clarity on that point. I appreciate it. Katie commenced you that of aphasimplex, two major political parties remain unpopular in the United States, fifty six percent of Americans viewing the Republican Party unfavorably, fifty eight percent saying the same thing of the Democratic Party. Mohammed Junis, the editor in chief at Gallop, joined us now, Muhammad, help us out. I've been rinting through this piece. Neither party is well liked. You guys have pointed out that the GP has an edge on certain issues. Can we just talk about the likability of both parties right now, Muhammed? How unusual is this? Unfortunately, you know at harkens to your Amtrak conversation earlier. We're at a state right now in the United States when both parties are really not doing that great in terms of their favorability. It's nothing new, Unfortunately, It's been quite a while since Americans had a favorable view of either party in the majority. We're also at a time where there's a record high of Americans saying that they'd like to see a third party in American politics. Of course, easy to say I want more. It doesn't necessarily mean that that party would exist or actually be powerful. But we're also at a time, John and Lisa where there's a high of people that identify as independents, and that is important not only in the current moment, but also in our analysis over generations. What we find is that younger Americans today are actually sticking with that independent id much further along their lifespan than previous generations young folks. So, certainly America is highly dissatisfied with national government. We've talked about that a lot. They're really, in some ways most dissatisfied with both parties. That being said, today is a local election. It's really, I know, it's so tempting for us to jump to twenty twenty four. Americans line up today to vote on local issues, and there's a huge difference in the way people perceive local government versus the national government here in the United States. SOMEHOWMA just explain that a little bit more. What is the big difference between the two currently? Basically and coetence. Americans have very low trust and competence in the national government and national institutions. Perceptions of corruption are astronomically high. When you come to local government, though, people have a much more positive perspective on local government, whether it's the efficacy, transparency of local government and corruption, but also how they feel about their local governing officials. So Americans light up at the ballot box today, they're hearing a lot of echo chamber on the national what this means, we're twenty twenty four, but really what they're going to be focusing on our local issues, and the national conversation certainly will inform that. That's why things like abortion, things that implicate attitudes about big and small government, for example, they're on the ballot box. They will be discussed. They're going to be they have been a focus of the campaign. We know in Ohio there's a really big push on abortion. It'll be a really important weather vane in terms of whether or not Roe v. Wades overturning has sort of faded, The impact of that has faded or is still with us. I have to say, as you're talking about local elections and how different they are than the nationals, I think, well, they're probably not on TikTok, the local elections, they're probably not on Facebook. How much is it the social media echo chamber that polarizes people and gives them a worse and expected view of national politics in a way that local politics might be slightly immune. I think that's a great point. Lisa it's much easier to sort of check the bs if you will. On a topic or an issue. When it's about where you live, you know that reality. You have direct information from people you know where you live. You can talk to your neighbors, you can talk to your local religious leaders or community leaders. With national politics, it's a very different thing. It really tends to have now become sort of a war of the propaganda's if you owe both parties where truth is very hard to identify, but both sides are absolutely out there to religiously convict you excuse me, to religiously convert you to their worldview. So that's certainly a factor. But look, when it comes to twenty twenty four, and it's important for us to keep our eye on that mark. Everything that we've done with regards to national elections really comes down to one thing. Americans focus on the economy. The economy is king. It's not only king, it's king, queen and bishop when it comes to picking a president here in the United States. And that's going to be a huge factor in where people place their votes in November twenty twenty four. But as you all know, we are light years ahead from where that is in terms of assessing where the economy is going to be then, and that's going to be the major factor when it comes to party advantages. The Republicans definitely have maintained their historic advantage in terms of Americans viewing them as more competent in keeping the country prosperous, keeping the economy booming, and keeping the country safe. That's said, how much are you looking to Glenn Youngkin today? And maybe there is going to be very much local issues that are decided, but the local issues have implications for their glens might be the Republican con candidate for presidency. Do you think that's a stretch. I think looking at the polls right now, that is a stretch. It's hard to argue that President Trump is not the front runner of the Republican Party. You know, every poll you do, every poll, what we've done. We don't do too many political polls anymore, but there are good polls out there. It's really hard to see somebody sort of astronomically jump ahead of him. Now that being said, we haven't had a president in modern time that's facing the legal challenges that he's facing, and that's a whole other sort of curveball that's being thrown here. It's not clear exactly what his situation will be come real. Kind of rubber meets the road in terms of November twenty twenty four. But you know there are still we heard from David Axelrod this week about the Democratic side. There's still a lot of movement in this race, and I wouldn't rule out any surprises or sudden departures on either side up against the clol kid. Just to squeeze it in and finished where we started. You do mention in the piece of the GP holds advantages on certain issues. Can we just bring some life into that, Mohammad? Which issue specifically? There are really three issues In specific one is keeping the country prosperous. Republicans have a pretty sizable advantage to Democrats in terms of perceptions of keeping the country prosperous. The other one is keeping the country safe. As you know, we're now very focused on too pretty significant conflicts across the world. Hopefully that doesn't become a reality for us here in the United States, but as Americans focus more on security issues, Republicans do have that advantage in our polls. The final one is who's most competent to handle the most important problem facing the country. And what's fascinating about that question is that the most important problem facing the country, as I have said on this show many times right now, is actually poor leadership and government. So Americans identify the quality, the low quality of national le as the most important problem facing the country. So it's the most of our problem. The economy and keeping America safe fascinates in gright. To catch out Mohammed azoh Wis, He's going to say, Mohammed unus of gallop. Everyone's been pointing to oil prices. Why have they not caught up given that there is a sort of existential risk and threat that seems to be escalating every single day in the Middle East? Joining us now to help us understand what exactly to look for. Nadia Martin Wiggan, Director ats fell in Capital, Nadia, I just want to start there. What do you make of the fact that we're seeing crude traded on the NMEX blow eighty dollars a barrel again today despite what's going on in Israel and in Gaza. Hello, great to be on. I think what we saw last week is that Hezbollah and Iran for right now, they're on the sidelines, right, They don't actually want to show an escalation of the war going on in Gaza right now. So that has taken off some of the risk premium. For the last ten days, we actually see the implied volatility in the options market come down. So it's not even something that's happened just today, it's been for the last ten days that trend. I think. In addition, when that premium, that initial shock goes away, as we saw was the case with the war in Ukraine by Russia, eventually you know, the market starts to think about how to work around that. And for example, we've seen that freight rates have gone much higher, and part of that is when you look at it, it's almost like a risk balancing that, Okay, if we can't flow through the Suez and we have to go around, then let's de risk ourselves if things were to take longer. And we see that the freight market has actually priced that in as if they have to avoid the Suez, which they haven't had to do. So as a result, things have come down also in the oil market. Okay, so let's take a step back for a second. Nadia. If you're looking at freight producers, that already come up with alternate roots that avoid the suz Canal to avoid potential or the straits of our moves to avoid potential blowback from Iran. Does this mean that oil prices are actually higher than where they would be at this point if there weren't this geopolitical overhang, because it's actually being priced into the market in a material way. Yeah. If we look at what was happening to the market in oil before the October seventh attack, we could see that prices were coming off right. We had a lot of pressure on refinery margins. We had physical creed trading poorly. You know, we've had the largest overhang in the West African market that we've had in years. We had more than twenty twenty five million barrels unsold out of the November loading program. So we saw that kind of weakening and then this is where the market would like to rebalance. We saw the physical premiums come down for those grades, but the futures market has remained quite strong, and this is where we have to see that kind of reb ballancy. When we look at kind of the momentum and what is happening to pure speculative traders, you know, the CTAs and so forth. That short term momentum has been downwards, right, and that is put pressure bringing us down to where we are now in WTI, you know, just above the two hundred day moving average. If we look at that long term momentum, it's still intact for a strong market, right. So there are still those longs in the market that we've had in since before all of this started. But again, the market is preparing in case something were to happen, because you know, things had been taking along well in the Middle East and we were about to have a deal between Saudi Arabia, the US and Israel recognizing Israel, which would take off potentially a premium right, and instead we've moved in the opposite direction. How much is the US becoming the swing producer at a time where there is consolidation in the shale patch and you are seeing companies try to realize the value from their stores, basically pump the oil while it's still valued in the world. The deal of Exon, for example, buying Pioneer right, that really shows that they are focusing on the Permian right. And what interestingly Exon announced in their earnings call is that they believe that with their equipment and knowledge, they're able to bring in a total of one billion barrels of oil more out of those same assets that Pioneer was able to. So, when we think about the terminal regular production rate in the US, that goes from around fourteen and a half million barrels per day to maybe fifteen and a half million barrels per day, and the question is when do we reach that. Right August production was thirteen point one million barrels per day. It will probably take two years, but of course that depends on the short term oil price and the signals short term meaning monthly, quarterly, and the signals that that yields to shale producers in terms of activity. Right, a weaker oil price will slow that down. A strong oil price we'll speed that up. So right now, given more prices are do you expect more consolidation to be expedited currently or do you think that people are going to wait until prices go up a bit further. Well, prices are reasonably strong, right, the whole oil complex is in a good situation and making money. So when what we saw at the start of October is that demand was starting to get hit, right, we had producers selling crewed for more than one hundred dollars a barrel, and then we saw, for example, companies like India really complaining. Part of that is because Russian crudis continued to flow and we had price caps breached, right, so you were paying more than sixty dollars a barrel, maybe you were paying seventy dollars a barrel, and then on average, facing more than one hundred dollars a barrel was becoming difficult. So I think we've been in a pretty comfortable space, you know, in the eighty dollars range for everyone to make money, so it makes it ripe for consolidation and valuable resources. We don't really need things to move much higher. Do you think that all things being a well, this is going to be the range for the foreseeable future, just because of the pushes and the pulls that seem to be working in equilibrium from a technical level, yes, But of course things can suddenly change very quickly, both in the Middle East, you know, towards the negative towards a positive, so that can really shift things. And the number one thing to keep track of is that inventories were expected to draw quite steeply in the fourth quarter, and so far in October they only drew on land around three hundred thousand barrels per day. So the market is waiting for evidence that actually we have tightness led by these supply cuts and demand isn't waning, Whereas you know, on the other hand, if it continues waiting, then we could see for the falls and price. Nadie Martin Wigan of Spell and Capital, thank you so much for being with us. Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and anywhere else you get your podcasts. Listen live every weekday starting at seven am Eastern on Blueberk dot com, the iHeartRadio app tune In, and the Bloomberg Business app. You can watch us live on Bloomberg Television and always on the Bloomberg terminal. Thanks for listening. I'm Lisa Abramowitz, and this is Bloomberg.See omnystudio.com/listener for privacy information.
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Today we were thrilled to be joined by Dr. Alexis Crow, Partner and Global Head of the Geopolitical Investing Practice at PwC. Alexis is a Council Member of the World Economic Forum, a Member of the Council on Foreign Relations, a Senior Fellow at Columbia Law School, and a Former Senior Fellow of the Atlantic Council. Her research is focused on financial stability, the future of trade and globalization, global energy markets, and investing in real assets, technology, and the future of the consumer. Alexis joined PwC in 2015 and her team helps companies and investors globally think about portfolio risk and portfolio strategy, investment data analytics and also frequently engages with boards as part of their practice. It was our pleasure to host Alexis and we learned a great deal on our global macroeconomics “magic carpet ride.” In our discussion, Alexis shares background on her team and the main questions clients are facing across various industries. We discuss PwC's differentiation with their global macroeconomics expertise, how Alexis divides her time globally and domestically, and PwC's diverse client base in corporates, energy, media, private markets, and real estate. Alexis shares her perspective on the geopolitical landscape in the more complex world we face today in comparison to when she joined PwC in 2015, including the shifting dynamics between the US and China, the recurring concern of the direction of interest rates and the underlying sources of inflation, the interconnectedness of energy costs and inflation, the implications of the upcoming Presidential election, in particular for energy and immigration, and strategies for international expansion for smaller companies. We also discuss the challenging geopolitical landscape in the Middle East and Latin America and their respective complex dynamics, the US budget deficit and concerns about its impact, how other countries have successfully utilized productive debt for growth, the skills needed in energy companies for future economic growth, the implications of AI advancement over the next 20-30 years, and the emergence of new geopolitical standards. Alexis was gracious with her time and we ended with asking for her thoughts on governmental intervention in free markets over the next decade. We covered a great deal of territory and appreciate Alexis sharing her unique insights with us all. Mike Bradley kicked us off by emphasizing the anticipation around tomorrow's FOMC meeting, with consensus suggesting the FED will temporarily pause interest rate hikes. He highlighted that WTI crude oil price has recently dropped in the last few weeks and is now trading below levels prior to the October 7th Hamas attack on Israel. He noted the market's seemingly unwarranted confidence in the stability of the Mideast and further highlighted a handful of key energy transition events over the past week that have set back transition expectations. He wrapped by noting that the Panamanian Government (an investor friendly business regime) recently caved into protestors' demands for a referendum on the recently approved Cobre Panama copper mine deal, and that this move highlights that governmental risks for the backbone of energy transition (mining) are real. Arjun Murti chimed in with his thoughts on the need for energy companies to consider global expansion with the maturation of the shale industry, the associated challenges faced by companies operating internationally, and the inherent difficulty of the energy business. He also discusses the role of European supermajors in meeting global energy demands and raises the question of how smaller domestic companies can successfully venture into international markets, with the challenges they may encounter without the resources and scale of larger corporations. We greatly enjoyed our global discussion with Alexis today and hope you find it as interesting as we did. Tha
US equities finished higher in Tuesday trading, ending near best levels, with the Dow, S&P, and Nasdaq finishing up +0.38%, +0.65%, and +0.48%, respectively. That said, major indices still closed solidly down for the month of October. Networking/communications, homebuilders, OEMs, MedTech, managed care, steel, A&D, building materials, and semis were among today's best performers. Big tech was also mostly higher. Ag machinery, large-cap pharma, airlines, energy, fertilizers, and China tech were among the laggards. Treasuries ended weaker with the curve steepening, adding to Monday's move. The dollar was better on the major crosses, with yen weakness today's big story in FX. Gold finished down 0.6%, ending back below $2K/oz., while bitcoin futures were up 0.1%. WTI crude finished down 1.6% after losing nearly 4% on Monday.It was busy on the economics calendar today. October Consumer Confidence came in at 102.6, beating consensus but down from September's upwardly revised 104.3 for the third straight month of decline. Present situation dropped to 143.1 from prior 146.2, while Expectations component slipped to 75.6 from September's 76.4. One-year inflation expectations rose 0.2 points to 5.9%. Some of today's other data included Q3 Employment Cost Index, showing employment and wages both slightly higher than expected. Lastly, both August FHFA house price index and S&P Case-Shiller 20-city home price index grew m/m while October Chicago PMI was little changed m/m. There were no big directional drivers in play as the market waits for the Fed rate decision and Treasury refunding details tomorrow.
Dan Nathan and Liz Young discuss last week's price action for the S&P 500 (6:00). McDonald's revenue climbs (8:00). Liz looks at monthly personal spending (11:00). Treasury refunding happening this week (15:45). The financial world still looks to Japan and its yield curve control (19:30). It's time to stop crying about bonds and start buying them instead (24:00). Apple is holding a “Scary Fast” Mac event tonight (28:20). Eli Lilly and Novo Nordisk report on Thursday (34:00) Later, Danny Moses joins Guy for a conversation with Brent Belote of Cayler Capital. The three discuss Brent's trading background (41:30), why we are in the golden age of energy and resource stocks (43:45), oil demand (45:00), WTI crude vs. Brent crude (46:00), oil volatility (47:00), geopolitical risks (50:00), how other asset classes impact the price of oil (51:30), daily liquidity (53:00), the three best things that have happened to the energy space (53:45), Brent's investment process (56:00), who he is following in the energy space (57:00), being a trader vs. an investor (58:00), and key reasons to invest with Cayler Capital (59:30). — About the Show: On The Tape is a weekly podcast with CNBC Fast Money's Guy Adami, Dan Nathan and Danny Moses. They're offering takes on the biggest market-moving headlines of the week, trade ideas, in-depth analysis, tips and advice. Each episode, they are joined by prominent Wall Street participants to help viewers make smarter investment decisions. Bear market, bull market, recession, inflation or deflation… we're here to help guide your portfolio into the green. Risk Reversal brings you years of experience from former Wall Street insiders trading stocks to experts in the commodity market. — Check out our show notes here Learn more about Ro body: ro.co/tape See what adding futures can do for you at cmegroup.com/onthetape. — Shoot us an email at OnTheTape@riskreversal.com with any feedback, suggestions, or questions for us to answer on the pod and follow us @OnTheTapePod on Twitter or @riskreversalmedia on Threads — We're on social: Follow @GuyAdami on Twitter Follow Danny Moses @DMoses34 on Twitter Follow Liz Young @LizYoungStrat on Twitter Follow us on Instagram @RiskReversalMedia Subscribe to our YouTube page
Where to begin? My friends, prepare for a journey that was the largest, longest and most controversial test series in US nuclear history. Sh*ts gonna blow. --- Love the show and wanna show some love? Instagram: @wellthatsinterestingpod Twitter: @wti_pod Venmo Tip Jar: @WellThatsInteresting Oh, BTW. You're interesting. Email YOUR facts, stories, experiences... Nothing is too big or too small. I'll read it on the show: firstname.lastname@example.org WTI is a part of the Airwave Media podcast network! Visit AirwaveMedia.com to listen and subscribe to other incredible shows. Want to advertise your glorious product on WTI? Email me: email@example.com Learn more about your ad choices. Visit megaphone.fm/adchoices
Today we had the pleasure of visiting with Chris Birdsall, Director of Economics and Energy at Exxon Mobil Corporation. Chris joined Exxon as an engineer in 1996 and has served in several areas of the organization including manufacturing, technology, and commercial roles over the past 27 years. For the last five years, Chris has lead a team of economists, modelers, and researchers responsible for the research and data that shapes Exxon Mobil's Global 2050 Outlook report (linked here). It was our pleasure to visit with Chris and learn more about his team, their views on long-term energy demand and supply, and have a chance to discuss all of the inputs and assumptions in an ambitious undertaking like this report. Chris prepared select slides from Exxon's 2050 Outlook to guide our conversation (the presentation slides are linked here). Chris walks us through the presentation but we stopped frequently for Q&A. We discussed a range of topics including how hard it is to do forecasts like this and why increasingly more organizations are choosing to put out scenarios rather than true forecasts, how Exxon's long-term emissions outlook compares to outcomes in Paris-aligned or net-zero scenarios, the correlation between energy consumption and human development, population projections, what Chris describes as the “and” equation between balancing human development with emissions reduction efforts, global energy demand growth by sector, growth in renewables and natural gas generation, and Exxon's underlying predictions for EV growth. We also discuss how interest rates and federal policies are factored into Exxon's models, the significance of the next ten years in determining trends in meeting 2050 emissions goals, the sustained investment needed in oil and natural gas, and much more. It is always exciting to discuss and debate future energy outlooks and we want to thank Chris for sharing his insights and time with us today. We could have continued for another hour! Mike Bradley kicked us off by highlighting that global markets continue to alternate between hope and worry as to when/if Israel pursues a full-blown Gaza ground invasion and how much regional conflict/chaos that will drive. He discussed that U.S. equity markets continue to be mostly focused on the direction of 10-year bond yields, which surged above 5% recently but have since pulled back to roughly 4.85%. He also noted that bond traders are beginning to worry less about current economic stats and focus more on who'll be the buyers of U.S. bonds given the endless annual U.S. budget deficits (~$2 trillion in 2023). He flagged that WTI crude oil price has plunged $5/bbl. this week due to the Israeli invasion of Gaza being temporarily delayed. He also highlighted an abundance of Q3 energy earnings reports this week from oil services, natural gas levered E&Ps and U.S. oil majors. He wrapped by highlighting the combined market-caps of recent U.S. oil major mega-deals and that they far exceed the market-cap of the next closest E.U. oil major. Arjun Murti noted recent M&A activity appears to be based on priced decks that carry more upside potential than downside risk and reiterated the need for a balanced energy mix. He also highlighted the current favorable environment for M&A activity given current market conditions, relatively lower oil and gas CapEx and growing pains in the new energy sector. Thanks to you all for your support and friendship!
Recorded on October 5, 2023 https://www.youtube.com/watch?v=JTcW2RbfqWY Episode 96 of the PetroNerds podcast is another heavy hitting podcast from PetroNerds with NYU Stern adjunct professor Paul Tice. He has 40 years of Wall Street experience and he talks with Trisha Curtis about the policies and complexities of "ESG" (environmental, social, and governance). This is an incredible discussion and Paul and Trisha Curtis do not hold back. Trisha asks Paul a myriad of questions related to ESG, the energy transition, public companies, and access to capital. At the time of recording on October 5th, 2023, WTI was $82.36, falling from nearly $94/barrel on September 27th, 2023. Trisha asks Paul to walk listeners through ESG compliance by companies, those required and not required, and what it is actually achieving. He talks about the UN promulgated club and ESG requirements which is driving significant moves in the publicly invested space for strict ESG compliance. The UNPRI has strict membership compliance and is organized by the UN and is moving the needle on strict ESG compliance including requirements to implement UN sustainability goals and the Paris Climate Accords. Trisha asks about BlackRock, StateStreet, and Vanguard and the board room debacles in May of 2021 with Exxon, Chevron, and Shell. She also asks and touches on the UN backing of China's so-called "Green Belt and Road" and human rights violations. Paul gets into the fiduciary responsibility problems by applying ESG to funds and portfolios after they have been built and then trying to push these companies to change their behavior. Trisha asks Paul to offer some clarity on the pull back in green investing and the ESG push in the past year that many have heard about….is it real? They get into the subsidies behind wind, solar, and EVs, the auto strikes, and the massive transfer of wealth taking place in the sphere of very poor forms of energy being forced into economies by the government. Paul talks about the problem of ESG investments losing money in the short term and the real problems behind their promise that these ESG compliant companies and investments will make money in the future. Paul talks about how the energy transition and ESG is not driven by economics and reality but by politics. Trisha talks about why it is so important for oil and gas companies to really understand what is taking place in the ESG and investment space and the world and geopolitics so they can push back and properly invest in oil and gas. Trisha asks about the legalities and fiduciary responsibility and ESG and the lack of capital access that ESG push is creating. Paul talks about how important the credit markets are to focus on for ESG and the access to capital. He predicts governments in Europe and entities like the UN will declare a global climate emergency which will then be used to limit capital access to traditional fuel companies including oil and natural gas. Trisha asks how we educate and push back on all of this and stay positive despite the massive forces mounting against all of energy as well as the oil and gas industry. He explains that the industry, and all energy CEOs more broadly, need to speak out more and have more courage to defend the industry and their company and move away from the acceptance of the energy transition. Paul explains that the goal of the ESG movement and the energy transition is to shut down the oil, gas and coal industry in the US and the world. Trisha pushes everyone in the oil and gas industry, from CEOs to pumpers, to be vocal about what they do for a living and care about it and talk about it. Paul Tice says "defend yourself" and start talking frankly about climate. Listen on Itunes
Equities markets began the day in the green on Thursday but reversed course later. The combined impact of rising oil prices and hawkish Fed-Speak sapped bullish sentiment and drove the S&P 500 down more than 1.0%. Oil prices climbed 2.5% despite easing sanctions on Venezuela. The news is good, but it will be years before Venezuela's oil infrastructure can support large-scale production. WTI has confirmed support at a key level and will likely move higher and underpin inflation. In other news, Fed chief Jerome Powell says inflation is still too high. In his view, economic growth may have to slow for inflation to hit the 2% target, meaning high rates will be here indefinitely. The risk now is that oil prices will keep the Fed on the brakes, leading to another interest rate hike. In this scenario, more banks fail, and economic slowing could result in a full-blown recession. As it is, the US is only expected to grow by 1.5%, which is far less than the pace of inflation.
My friends, if you had a bad day at work recently, just know that it couldn't be as bad as what happened over at the 3 Mile Island nuclear plant. Brace yourself. Also. Actual radioactive pigs. --- Love the show and wanna show some love? Instagram: @wellthatsinterestingpod Twitter: @wti_pod Venmo Tip Jar: @WellThatsInteresting Oh, BTW. You're interesting. Email YOUR facts, stories, experiences... Nothing is too big or too small. I'll read it on the show: firstname.lastname@example.org WTI is a part of the Airwave Media podcast network! Visit AirwaveMedia.com to listen and subscribe to other incredible shows. Want to advertise your glorious product on WTI? Email me: email@example.com Learn more about your ad choices. Visit megaphone.fm/adchoices
We are pleased to share with you a very unique and special COBT episode that provides a glimpse into America's proud energy past and highlights some of the great life lessons the American West and the oil patch can impart. Today we had the great pleasure of visiting with Hank True and Dave True of the True Companies. The True family is celebrating the 75th anniversary of True Companies, which was founded by Dave and Hank's father, Dave True, Jr. in 1948. True Companies includes the following businesses: True Oil, True Drilling, True Ranches, Toolpushers Supply Company, Black Hills Trucking, Measurement Services LLC, Bridger Pipeline LLC, Eighty-Eight Oil LLC, Equitable Oil Purchasing Company, Hilltop Bank, Flowstate, and Brick and Bond, in addition to numerous other ranches and properties. The 75th anniversary celebrations are being held in Houston, Oklahoma City, and the Company's headquarters city of Casper, Wyoming. The significance of the Company to the state of Wyoming and to energy can clearly be seen in the description of the Company's anniversary from this summer's Congressional Record, linked here. You'll hear many interesting points in our discussion. True Companies is an extremely large and complex organization, with approximately 1,150 employees in eleven states. Their business includes several aspects of energy including pipelines, oil and gas, oilfield services, technology, as well as agriculture and banking. What drew us to the Trues was not just the 75th anniversary but their reputation for leadership, involvement in the community, and their extensive and rich history. Large family-owned companies are becoming more rare in today's modern world and it is refreshing to see the mindset of a private enterprise as they face challenges and take advantage of opportunities. Hank and Dave's brotherhood/partnership is fascinating to watch as they reflect on the love and respect they have for their parents, how their parents raised them, lessons from summers spent in a modest cabin, and as they share wisdom learned from now three generations of an energy company and the ruggedness and toughness that was instilled in them. Their family's story is a reminder of the American dream, building something from nothing, and of the energy industry's grit and determination. It was a fantastic conversation and we are most honored the True brothers would share their reflections with us. Mike Bradley kicked us off by sharing concern over global markets as they remain remarkably calm despite the Israeli-Hamas war. He highlighted that 10-year bond yields have surged from Friday's close of 4.6% due to strong retail sales stats and are pushing towards trading highs of 4.9%. While bond traders expect the FED will pause rate hikes at the upcoming November 1st FOMC meeting, hotter than expected economic stats could change their calculus. He noted WTI crude oil prices have seen a modest increase over the past five trading days, reaching around $87/bbl., and that crude oil price volatility seems to be influenced weekly by demand or supply concerns, with this week's supply concerns dominating including Cushing and SPR crude oil storage levels. He flagged the Biden Administration surprised the market by announcing an easing of Venezuelan oil sanctions and further noted crude oil traders are much more concerned with what direction the Biden Administration might take on Iranian crude oil sanctions. He wrapped by highlighting Oil Services Q3 reporting begins this week with Liberty Energy and Schlumberger reporting this week. Jeff Tillery also joined and added his perspective and questions in our discussion. We were delighted and very thankful to visit with Hank and Dave. As we shared at the end, everyone we've come across that knows the True family holds them in high re
We're kicking off Spooky Season with stuff that can live in your throat! And then we're gonna dance. Join us on the oldest dancefloor ever found, so far. --- Love the show and wanna show some love? Instagram: @wellthatsinterestingpod Twitter: @wti_pod Venmo Tip Jar: @WellThatsInteresting Oh, BTW. You're interesting. Email YOUR facts, stories, experiences... Nothing is too big or too small. I'll read it on the show: firstname.lastname@example.org WTI is a part of the Airwave Media podcast network! Visit AirwaveMedia.com to listen and subscribe to other incredible shows. Want to advertise your glorious product on WTI? Email me: email@example.com Learn more about your ad choices. Visit megaphone.fm/adchoices
Today we had the pleasure of hosting Christopher Mohajer for a discussion centered around batteries and battery technology. Chris serves as the Director of Battery Technology Equity Research at U.S. Capital Advisors (USCA) and has a background in technical sales, having previously worked with Digatron Power Electronics, a supplier of battery test and formation equipment. Before that, he held several roles at the California Clean Energy Fund. Last year, Chris and the USCA team published a comprehensive report highlighting batteries as a pivotal component for decarbonization. We were thrilled to visit with Chris and discuss the latest developments and trends in the world of batteries. Our discussion today started with Chris's background and what drew him to batteries originally. It was here that he made his light-hearted comment around being the “accidental battery guy.” At the heart of today's discussion, Chris walked us through about 15 slides pulled from his and his team's work on batteries. The presentation slides are linked here. In the presentation, Chris covers battery history from lead acid to today, the different battery chemistries, the metrics for measuring battery performance, the tradeoffs between performance, cost, and safety, cathode and anode technology developments, and the surprisingly lengthy duration to bring new technology to market. Chris also shares insights on battery production, the battery supply chain, and the importance of permitting and potential for the US to develop its own battery supply chain if the right conditions are met. Whether you are new to batteries or well-versed, Chris's overview is very likely to be interesting to you. Today's other discussion topics included mining challenges, battery market growth, battery innovations, proposed US battery factories, utility-scale storage, the role of batteries on the grid, public equity investor sentiment, and more. We ended with asking Chris what he thinks the future of batteries will look like in ten years. He is definitely bullish on their role in our future energy systems. We want to thank Chris for joining us today and for providing a great and detailed overview. We learned a lot and look forward to continuing to follow Chris and his team's insights. Mike Bradley kicked us off by pointing out the remarkable stability in global markets since the breakout of the Israeli war with Hamas. He observed that both US bond and equity markets have traded higher, and that equity market volatility has actually fallen. He flagged that 10-year bond yields have pulled back from Friday's close of 4.8%, are trading at ~4.65%, for what looks to be a temporary rush to safety. Mike also noted that this week's CPI & PPI prints will be important in determining whether the FED will pause/raise rates at their November FOMC meeting. He highlighted the modest increase in WTI crude oil price this week (~$3.00/bbl.) and also indicated that it had underperformed most trader's expectations. He noted that crude oil traders will be very focused on Cushing weekly inventory levels, with consensus looking for a slight build, but that an unexpected draw could push WTI price/time spreads much higher. He rounded out the conversation by flagging that Q3 reporting is set to begin mid-next week with a handful of oil service companies. Todd Scruggs also joined today's discussion and shared a few observations upfront, including both positive developments as well as potential challenges in battery technology and manufacturing. We greatly enjoyed the conversation with Chris and hope you enjoy it as much as we did. Our best to you all!
No impacto da guerra na Economia, o preço do petróleo abriu a semana em forte alta no mundo após a investida do grupo terrorista Hamas contra Israel. O barril do óleo tipo Brent registrava alta de 4,01%, cotado a 87 dólares e 97 centavos. Já o óleo tipo WTI subia 4,16%, sendo cotado a 86 dólares e 23 centavos. O Broadcast ouviu Adriano Pires, sócio e diretor do Centro Brasileiro de Infraestrutura, que prevê a commodity chegando a 100 dólares o barril, como ocorreu no início da guerra entre Rússia e Ucrânia, em 2022. "O principal efeito é no preço do petróleo e já começamos a imaginar que, no Brasil, gasolina e diesel vão subir. Isso significa pressão sobre a inflação, que, por consequência, deverá reduzir queda dos juros; é um efeito cascata. Vamos torcer para não ser tão grave", avalia Cantanhêde.See omnystudio.com/listener for privacy information.