You don't want to buy Nvidia, you don't want to buy Apple?

You don't want to buy Nvidia, you don't want to buy Apple?

What are you going to do?

What are you going to do?

Story and the joints? Now the RBC Capital markets. Do you ascribe to the idea mord that the market's lifting even away from the normous?

Story and the joints? Now the RBC Capital markets. Do you ascribe to the idea mord that the market's lifting even away from the normous?

This is the Bloomberg Surveillance podcast from the best of Economics, Finance, investment, and the International Relations. You can also watch to show on YouTube The Bloomberg Podcast on YouTube. Just see Weekday Morning.

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Retailers including Walmart and some others. What's your takeaway from earning here? The Corporate America kind of earned their way into the multiple thing.

Retailers including Walmart and some others. What's your takeaway from earning here? The Corporate America kind of earned their way into the multiple thing.

So look, I think that reporting season was fine. It wasn't anything to get too excited about either way.

So look, I think that reporting season was fine. It wasn't anything to get too excited about either way.

You know.

You know.

I think if you go through and you look at the beats on both earnings and revenues, we saw very strong rates of earning speats. They were less strong on sales, and we've seen that for a while now. But what that's telling me is that Corporate America is finding a way to get it done, and we should applaud them for that. But we should also recognize that they are finding a way to get it done and they're really navigating through a tough cost environment. So I think the numbers are good. We've seen the consensus estimate for SMP this year go up to two forty five. Again, that's basically where we were last summer. Usually that bottom up consensus is in the right neighborhood by the time we get through this recording season and into June. So I think that we've managed to go through it without too much damage. And there were a lot of bears who were saying the numbers were crazily too high, needed to come down, that was going to destroy the market. Well that didn't happen.

I think if you go through and you look at the beats on both earnings and revenues, we saw very strong rates of earning speats. They were less strong on sales, and we've seen that for a while now. But what that's telling me is that Corporate America is finding a way to get it done, and we should applaud them for that. But we should also recognize that they are finding a way to get it done and they're really navigating through a tough cost environment. So I think the numbers are good. We've seen the consensus estimate for SMP this year go up to two forty five. Again, that's basically where we were last summer. Usually that bottom up consensus is in the right neighborhood by the time we get through this recording season and into June. So I think that we've managed to go through it without too much damage. And there were a lot of bears who were saying the numbers were crazily too high, needed to come down, that was going to destroy the market. Well that didn't happen.

Hey, Laurie, I know you and your team, you kind of you really go through the earning transcripts to kind of get a sense of what corporate management teams are are focused on these days. What did you take away from the most recent round of earnings?

Hey, Laurie, I know you and your team, you kind of you really go through the earning transcripts to kind of get a sense of what corporate management teams are are focused on these days. What did you take away from the most recent round of earnings?

You know, it was it was an interesting excerpt, size it always is. We've been doing this for a few years now. I would say, you know, one of my main thoughts as we've got these big inflation prints coming out this week is that while companies, you know, certainly weren't saying that the cost environment was good. It was a pretty balanced discussion. So we had some company saying well, cost or elevated. Others were saying, well, input costs have come down, or things are normalizing, or things are moderating, or we're maybe calling out something like freight expense that had gotten a little bit easier. That really contrasts with me with what we heard in the last reporting season in January through March, when it was almost very uniformly a kind of hot inflation commentary, if you will, where it was just nothing but negative, negative, negative. So that makes me feel a little bit better heading into these prints. I'm still a little bit nervous, you know that the economists, you know, haven't figured out what they got wrong in the first quarter, but admittedly the company commentary has been a little bit better on that point.

You know, it was it was an interesting excerpt, size it always is. We've been doing this for a few years now. I would say, you know, one of my main thoughts as we've got these big inflation prints coming out this week is that while companies, you know, certainly weren't saying that the cost environment was good. It was a pretty balanced discussion. So we had some company saying well, cost or elevated. Others were saying, well, input costs have come down, or things are normalizing, or things are moderating, or we're maybe calling out something like freight expense that had gotten a little bit easier. That really contrasts with me with what we heard in the last reporting season in January through March, when it was almost very uniformly a kind of hot inflation commentary, if you will, where it was just nothing but negative, negative, negative. So that makes me feel a little bit better heading into these prints. I'm still a little bit nervous, you know that the economists, you know, haven't figured out what they got wrong in the first quarter, but admittedly the company commentary has been a little bit better on that point.

So all right, So, given the fact that we've got yields pulling back just a little bit here from a sector perspective, Laurie, where do you think the best opportunities are right here?

So all right, So, given the fact that we've got yields pulling back just a little bit here from a sector perspective, Laurie, where do you think the best opportunities are right here?

Well, I think that when you're in one of these environments right where the macro cross currents right in the narratives, it feels like they're just whiplashing, right. It feels like they change every few weeks. I think you want to really stay focused on things like valuation, things like earning revision momentum, and where you're starting to see no more frankly upside revisions to analyst estimates than other sectors. And a couple of sectors that really jump out to me are both energy and financials. We've got very strong valuation stories in both. The earnings revisions are improving in both, and while materials isn't quite as strong on the earning's revision front, we still really like the valuations there. And I think when you're getting whiplashed by all these narratives, you know, you really just want to stay focused on the data.

Well, I think that when you're in one of these environments right where the macro cross currents right in the narratives, it feels like they're just whiplashing, right. It feels like they change every few weeks. I think you want to really stay focused on things like valuation, things like earning revision momentum, and where you're starting to see no more frankly upside revisions to analyst estimates than other sectors. And a couple of sectors that really jump out to me are both energy and financials. We've got very strong valuation stories in both. The earnings revisions are improving in both, and while materials isn't quite as strong on the earning's revision front, we still really like the valuations there. And I think when you're getting whiplashed by all these narratives, you know, you really just want to stay focused on the data.

I mean, Paul's been going on here with you, It's been really, really interesting. I'm looking at the materials sector and I'm as guilty as anyone Larie Kelvisina of having tech on the brain lynd And Danbury, Connecticut, Dow Chemical in others, Sherwin Williams. I mean, materials, how quaint, Paul. I know it's from my ute when Laurie was like in third grade.

I mean, Paul's been going on here with you, It's been really, really interesting. I'm looking at the materials sector and I'm as guilty as anyone Larie Kelvisina of having tech on the brain lynd And Danbury, Connecticut, Dow Chemical in others, Sherwin Williams. I mean, materials, how quaint, Paul. I know it's from my ute when Laurie was like in third grade.

Went back when she was on the lawn at Uva. Laurie talk to us about valuation here, I mean the stock market, the S and P five findal let's just look at the S and P five hundred's had a big move off of those October levels. Has the valuation got in front of it? Do I need to strip out some of those the handful of the big tech names and then get to get more comfortable with valuations in these markets?

Went back when she was on the lawn at Uva. Laurie talk to us about valuation here, I mean the stock market, the S and P five findal let's just look at the S and P five hundred's had a big move off of those October levels. Has the valuation got in front of it? Do I need to strip out some of those the handful of the big tech names and then get to get more comfortable with valuations in these markets?

How do you think about that?

How do you think about that?

So we think about it in a couple of different ways. There's forward pees and trailing pees. So let's look at forward pees for just a moment, which is what most people's preferred gauge. Is not mine actually, but what most people like to look at. And if you do that for the broader market. To be honest, I haven't looked at it for the SMP in a little while, so I don't know exactly what that number is. But we watch every week the top ten names in the SMP versus the rest of the market, and what you see on the top ten names is we're right back up to twenty seven times. Again, it got as low as twenty five times recently. If you just look at a median pe of that bucket. It's way about average. It's bumping up against recent highs. You can get really scared in a hurry if you look at that stat If you look at the rest of the market, we're trading around sixteen times, so it's a little above average, nowhere near past peaks. And it looks to me when you see those charts side by side like there's a catch up trade that needs to happen. You see this off recoveries. One thing typically runs harder off the bottom than at some point it digests and pauses, and the other thing catches up. And I think that's where we are for the rest of the market. And by the way, if you ask your typical bysider where they think the market should be trading at, they'll tell you fifteen sixteen times on forward earnings, And that's exactly where the broad market is if you strip out those top ten names.

So we think about it in a couple of different ways. There's forward pees and trailing pees. So let's look at forward pees for just a moment, which is what most people's preferred gauge. Is not mine actually, but what most people like to look at. And if you do that for the broader market. To be honest, I haven't looked at it for the SMP in a little while, so I don't know exactly what that number is. But we watch every week the top ten names in the SMP versus the rest of the market, and what you see on the top ten names is we're right back up to twenty seven times. Again, it got as low as twenty five times recently. If you just look at a median pe of that bucket. It's way about average. It's bumping up against recent highs. You can get really scared in a hurry if you look at that stat If you look at the rest of the market, we're trading around sixteen times, so it's a little above average, nowhere near past peaks. And it looks to me when you see those charts side by side like there's a catch up trade that needs to happen. You see this off recoveries. One thing typically runs harder off the bottom than at some point it digests and pauses, and the other thing catches up. And I think that's where we are for the rest of the market. And by the way, if you ask your typical bysider where they think the market should be trading at, they'll tell you fifteen sixteen times on forward earnings, And that's exactly where the broad market is if you strip out those top ten names.

Laurie, thank you, Laurie Calvicina with US head of US Equity Strategy or RBC Capital Markets trying to get us away from Nvidia on the brain, not that any of us would be guilty of it. I was waxing philosophical with a beverage of my choice in my hands. About the legs of a bull market and the support in resistance dynamics are different in each leg of a bull market. In idiots, Oh excuse me, I didn't say that. Idiots that draw little lines pretending to John Maggie amateur. You know, it's a good way to get in trouble. Here is the word now on support and resistance. Chrisopher own joins uh with strtiguas is the support to this great bull market different than it was two octobers ago?

Laurie, thank you, Laurie Calvicina with US head of US Equity Strategy or RBC Capital Markets trying to get us away from Nvidia on the brain, not that any of us would be guilty of it. I was waxing philosophical with a beverage of my choice in my hands. About the legs of a bull market and the support in resistance dynamics are different in each leg of a bull market. In idiots, Oh excuse me, I didn't say that. Idiots that draw little lines pretending to John Maggie amateur. You know, it's a good way to get in trouble. Here is the word now on support and resistance. Chrisopher own joins uh with strtiguas is the support to this great bull market different than it was two octobers ago?

Well, I think the support to this bullmarket is what has generally been very supportive leadership. I mean, look at the move we've seen these global industrials. Industrials working industrials have the highest correlation to the market itself. So when industrials are working, the markets generally in pretty good hands. We still have that going for us here and I think underappreciated, particularly the last six eight weeks as the markets come out of this oversoul condition, are the financials doctor breaking out not just domestically, but look at the European banks. The Japanese banks have resumed the uptrend as well. So if you think about industrials and banks as important tenets of a bull market. I think this one is alive and well.

Well, I think the support to this bullmarket is what has generally been very supportive leadership. I mean, look at the move we've seen these global industrials. Industrials working industrials have the highest correlation to the market itself. So when industrials are working, the markets generally in pretty good hands. We still have that going for us here and I think underappreciated, particularly the last six eight weeks as the markets come out of this oversoul condition, are the financials doctor breaking out not just domestically, but look at the European banks. The Japanese banks have resumed the uptrend as well. So if you think about industrials and banks as important tenets of a bull market. I think this one is alive and well.

My metric is the Sweeney Dow forty thousand. Then what does resistance look like? What is the character of resistance as we butted us up SPX dial in Nasdaq one hundred.

My metric is the Sweeney Dow forty thousand. Then what does resistance look like? What is the character of resistance as we butted us up SPX dial in Nasdaq one hundred.

Yeah, so fifty two to sixty five I think is the high from late March on S and P. What's important for us. We wrote about it this morning. You still have eighty percent of the S and P above the two undred day moving average, so eight out of ten names are still trending. That's not where your big problems tend to emerge from. Your big problems tend to come about when the internal conditions are deteriorating even as the market grinds higher. That is not the case here. If there's maybe one thing recently that's been on our radar that I think deserves perhaps a little bit of pause. Consumer discretionary has started to soften here a little bit, and it's a juxtapose against the narrative of the consumer being very strong. So we're always kind of aware or alert to the price action, not necessarily agreeing with the consensus story. I think that's the one blemish, but otherwise it's a pretty good bull market.

Yeah, so fifty two to sixty five I think is the high from late March on S and P. What's important for us. We wrote about it this morning. You still have eighty percent of the S and P above the two undred day moving average, so eight out of ten names are still trending. That's not where your big problems tend to emerge from. Your big problems tend to come about when the internal conditions are deteriorating even as the market grinds higher. That is not the case here. If there's maybe one thing recently that's been on our radar that I think deserves perhaps a little bit of pause. Consumer discretionary has started to soften here a little bit, and it's a juxtapose against the narrative of the consumer being very strong. So we're always kind of aware or alert to the price action, not necessarily agreeing with the consensus story. I think that's the one blemish, but otherwise it's a pretty good bull market.

Hey, Chris, you know, I think most of our listeners, most of our viewers on YouTube, they've only known a market that's been led by tech. Can tech still lead this market higher the next leg up? Or are you looking for other areas that you mentioned financials and others.

Hey, Chris, you know, I think most of our listeners, most of our viewers on YouTube, they've only known a market that's been led by tech. Can tech still lead this market higher the next leg up? Or are you looking for other areas that you mentioned financials and others.

I think at best here tech is neutral in terms of its leadership bonafides at the moment, and you know that I think has been a little underappreciated the last six weeks as we kind of corrected and have started to come out of the correction, Tech really hasn't returned as the as the pronounced leadership of this move. Where else is it coming from. It's coming from materials, which globally look fantastic. We see the moving copper or the chemical stock. So I don't think tech not leading to the same extent is ominous. I just think it's a reflection of some leadership rotation that's underway. I don't think that's something to fear, but people have a lot of Tech on it, and I might be a little bit more careful there and discretionary relative to some of the other leadership that's happening.

I think at best here tech is neutral in terms of its leadership bonafides at the moment, and you know that I think has been a little underappreciated the last six weeks as we kind of corrected and have started to come out of the correction, Tech really hasn't returned as the as the pronounced leadership of this move. Where else is it coming from. It's coming from materials, which globally look fantastic. We see the moving copper or the chemical stock. So I don't think tech not leading to the same extent is ominous. I just think it's a reflection of some leadership rotation that's underway. I don't think that's something to fear, but people have a lot of Tech on it, and I might be a little bit more careful there and discretionary relative to some of the other leadership that's happening.

What a yield charts describe right now.

What a yield charts describe right now.

So I feel against the grain here, and I never like going to bed at night feeling I'm fighting against the tape. I don't mind fighting against the consensus. I don't like fighting the tape. I like bond yield lower here. I don't think I'm fighting the tape, but I do think I'm fighting the consensus, and I like yields lower because look at some of these global ten year yields UK ten's, German tens, Swiss tens, Italian tens. They all point lower, not higher. So I'm thinking about I'm having our team to think about what would be the news flow over the next six months if we woke up in ten yureed yields for.

So I feel against the grain here, and I never like going to bed at night feeling I'm fighting against the tape. I don't mind fighting against the consensus. I don't like fighting the tape. I like bond yield lower here. I don't think I'm fighting the tape, but I do think I'm fighting the consensus, and I like yields lower because look at some of these global ten year yields UK ten's, German tens, Swiss tens, Italian tens. They all point lower, not higher. So I'm thinking about I'm having our team to think about what would be the news flow over the next six months if we woke up in ten yureed yields for.

Three Well, was it Wednesday at eight thirty Not to pitch the show, but tune in Wednesday at eight thirty CPI.

Three Well, was it Wednesday at eight thirty Not to pitch the show, but tune in Wednesday at eight thirty CPI.

It doesn't it seem like the bar is very high for yields to surprise on the upside here. That's our suspicion, particularly when we look at the global yields. When I go back three years ago, we were lucky to get the yield up call correct and I think, why do we get it right? We got it right because all these global yields were telling us bonds everywhere we're gonna weaken, and yields would rise. I think it's a bit of the opposite set up right here. And then you kind of compare that with you know, utilities outperforming a little bit better from consumer staples the financials. As we talked about, that doesn't sound like leadership where you would expect to running away.

It doesn't it seem like the bar is very high for yields to surprise on the upside here. That's our suspicion, particularly when we look at the global yields. When I go back three years ago, we were lucky to get the yield up call correct and I think, why do we get it right? We got it right because all these global yields were telling us bonds everywhere we're gonna weaken, and yields would rise. I think it's a bit of the opposite set up right here. And then you kind of compare that with you know, utilities outperforming a little bit better from consumer staples the financials. As we talked about, that doesn't sound like leadership where you would expect to running away.

Hey, Chris, you know when we had that big move in the S and P five hundred off of that October level here, twenty five percent move, A lot of folks are saying, hey, we need to see.

Hey, Chris, you know when we had that big move in the S and P five hundred off of that October level here, twenty five percent move, A lot of folks are saying, hey, we need to see.

A little bit of a pullback here.

A little bit of a pullback here.

That would be healthy for a longer term up trend? Was that for five percent pullback we had in April?

That would be healthy for a longer term up trend? Was that for five percent pullback we had in April?

Was that it?

Was that it?

Do you think?

Do you think?

I think it was a model?

I think it was a model?

I mean, we forty eight to fifty was kind of the big breakout level from back earlier. The year we were traced back to forty nine to fifty. I think we got close enough all of our what I would describe internal oversould conditions started to flash. We're at a minimum when you're in an up trend. Don't get too cute about what level your bier at because the trend is up. And I still think those are the rules.

I mean, we forty eight to fifty was kind of the big breakout level from back earlier. The year we were traced back to forty nine to fifty. I think we got close enough all of our what I would describe internal oversould conditions started to flash. We're at a minimum when you're in an up trend. Don't get too cute about what level your bier at because the trend is up. And I still think those are the rules.

That's where we are right now.

That's where we are right now.

Absolutely, Okay, we're gonna go technical.

Absolutely, Okay, we're gonna go technical.

Now we can do this with Chris Arne. Earl Bloomenthal was one of my heroes. I never met on me he was a generation before me. But what he've said was you could gets as a constructive reaffirmation of a trend. And he had a double high pole top and a double high pole bottom, and the answer is a La Nvidia, you're there and it's OMG, down you go and then you come back and that's a bottom. Are we seeing catharsis internally within the popular stocks of the day that will allow them to drive harder or are we in a zombie lethargy, as Lisa Matteo says.

Now we can do this with Chris Arne. Earl Bloomenthal was one of my heroes. I never met on me he was a generation before me. But what he've said was you could gets as a constructive reaffirmation of a trend. And he had a double high pole top and a double high pole bottom, and the answer is a La Nvidia, you're there and it's OMG, down you go and then you come back and that's a bottom. Are we seeing catharsis internally within the popular stocks of the day that will allow them to drive harder or are we in a zombie lethargy, as Lisa Matteo says.

We are.

We are.

I think we're in a little bit of a rotational way from the stocks that have driven this move for the first You know, fourteen fifteen months off October twenty twenty two is low into something else, and I think you see that reflected in materials, working in industrials, working in financials working. I think this is less about tech and discretionary, which were kind of the early cycle moves. Now are these things done? Is is Google done? Is Nvidia done? I don't think so. I just don't think they're returning as the same leadership coming out of this correction that they once were. And I think ultimately, to make the case that those stocks should be sold or that they're finished, you need to see bigger volatility systems break when volve gets too heavy or too big, and you don't have that yet with those names. We spent a lot of time in the last couple of months going back and evaluating how all the big tech stocks at ninety nine, how they peaked in two thousand and the one thing they all had in common was they ended on big volatility. Is six months it was, you know, three percent up, four percent down, five percent up. We don't have that here yet.

I think we're in a little bit of a rotational way from the stocks that have driven this move for the first You know, fourteen fifteen months off October twenty twenty two is low into something else, and I think you see that reflected in materials, working in industrials, working in financials working. I think this is less about tech and discretionary, which were kind of the early cycle moves. Now are these things done? Is is Google done? Is Nvidia done? I don't think so. I just don't think they're returning as the same leadership coming out of this correction that they once were. And I think ultimately, to make the case that those stocks should be sold or that they're finished, you need to see bigger volatility systems break when volve gets too heavy or too big, and you don't have that yet with those names. We spent a lot of time in the last couple of months going back and evaluating how all the big tech stocks at ninety nine, how they peaked in two thousand and the one thing they all had in common was they ended on big volatility. Is six months it was, you know, three percent up, four percent down, five percent up. We don't have that here yet.

But Paul, we don't have the dearth of cash flow that we had in nineteen ninety nine, got real cash lo I look at the cash flow statements of these companies. None of the textbooks I studied have that. It's an original thing that we're dealing with.

But Paul, we don't have the dearth of cash flow that we had in nineteen ninety nine, got real cash lo I look at the cash flow statements of these companies. None of the textbooks I studied have that. It's an original thing that we're dealing with.

I actually wondered Tom if that ultimately is going to be the psychological hurdle for people if these stocks actually begin to weaken at some point down them the line, they're going to fall too back on. Oh well, at least they have cash flow. At least they still earn I agree, And you know that's not dissimilar the nifty to fifty as they peaked in seventy three, seventy four. They had earnings, they had revenue, they had cash flow. Just what the market was willing to pay for them changed, and that I think is ultimately the bigger question down the line.

I actually wondered Tom if that ultimately is going to be the psychological hurdle for people if these stocks actually begin to weaken at some point down them the line, they're going to fall too back on. Oh well, at least they have cash flow. At least they still earn I agree, And you know that's not dissimilar the nifty to fifty as they peaked in seventy three, seventy four. They had earnings, they had revenue, they had cash flow. Just what the market was willing to pay for them changed, and that I think is ultimately the bigger question down the line.

Okay, what's your single best idea right now? All the charts. You look at Jason Trent and sitting there when Olivia in hand, and he says, what's the single best idea?

Okay, what's your single best idea right now? All the charts. You look at Jason Trent and sitting there when Olivia in hand, and he says, what's the single best idea?

Chris?

Chris?

I think these breakouts in the global material charts are hands down the best thing in our work. I think the reflection of an improving China. We were early there. So you're lung copper, I'm long copper, I'm long Chinese equities. Put my foot on the pedal.

I think these breakouts in the global material charts are hands down the best thing in our work. I think the reflection of an improving China. We were early there. So you're lung copper, I'm long copper, I'm long Chinese equities. Put my foot on the pedal.

There, very good Chris outstandings. Tatigez So, I can't say enough about this, folks. There's two kinds of technical analysis trend based and stochastic, and Chris Verona and I have sampled the kool aid at the trend based and that's the technical analysis driving the ship and truly the New City Group. Jason Riquet joins us right now global head of Corporate Banking for all of City Group. And this after a tour duty including being in Tokyo is early is January is well? You have the heritage and pedigree of your company. John Reid would say, this is a guy we built. What's the New City Group look like in corporate banking?

There, very good Chris outstandings. Tatigez So, I can't say enough about this, folks. There's two kinds of technical analysis trend based and stochastic, and Chris Verona and I have sampled the kool aid at the trend based and that's the technical analysis driving the ship and truly the New City Group. Jason Riquet joins us right now global head of Corporate Banking for all of City Group. And this after a tour duty including being in Tokyo is early is January is well? You have the heritage and pedigree of your company. John Reid would say, this is a guy we built. What's the New City Group look like in corporate banking?

Love the question. I think the short answer is it's not changed. From that perspective.

Love the question. I think the short answer is it's not changed. From that perspective.

We have retained the most important element of our DNA in this gigantic reorganization, which is our globality, our reach, our ability to serve multinational companies across the world.

We have retained the most important element of our DNA in this gigantic reorganization, which is our globality, our reach, our ability to serve multinational companies across the world.

And Jason, I know you did your tour in Japan. I did my Somber Wilders tour there back in the very early nineties. Then it fell off the we haven't talked about Japan for like twenty five years. Why are we now talking about Japan?

And Jason, I know you did your tour in Japan. I did my Somber Wilders tour there back in the very early nineties. Then it fell off the we haven't talked about Japan for like twenty five years. Why are we now talking about Japan?

Japan is back. It's fantastic right now. Why is it back?

Japan is back. It's fantastic right now. Why is it back?

How is it back?

How is it back?

Well, I think they Japan's been doing the hard yards for many years. In this long period of deflation of a sort of a stagged an economy which didn't feel great. The Japanese companies, the banks, the multinationals were continuing to press forward with investment, with reshaping the economy, knowing they had some demographic issues they are going to have to sort out. The outbound investment from Japan became more and more fundamental to their sort of overall strategy as a country. I think what's happened is the world has caught up and figured it out. I mean, there's some important developments there. I think one thing that really helped, honestly was in terms of just bringing attention to Japan and the market, there was Warren Buffet's investment in the five Trading companies. It just made people say, what exactly are those companies and why are they interesting? We've known about them for years, We've been banks to them for fifteen years.

Well, I think they Japan's been doing the hard yards for many years. In this long period of deflation of a sort of a stagged an economy which didn't feel great. The Japanese companies, the banks, the multinationals were continuing to press forward with investment, with reshaping the economy, knowing they had some demographic issues they are going to have to sort out. The outbound investment from Japan became more and more fundamental to their sort of overall strategy as a country. I think what's happened is the world has caught up and figured it out. I mean, there's some important developments there. I think one thing that really helped, honestly was in terms of just bringing attention to Japan and the market, there was Warren Buffet's investment in the five Trading companies. It just made people say, what exactly are those companies and why are they interesting? We've known about them for years, We've been banks to them for fifteen years.

I know, City you guys have been. I mean, but it's just amazing. All right, Head of corporate banking at City, that is it?

I know, City you guys have been. I mean, but it's just amazing. All right, Head of corporate banking at City, that is it?

Man?

Man?

Are you are you?

Are you are you?

Are you guys making loans? Are your customers do they need capital, are you guys making loans?

Are you guys making loans? Are your customers do they need capital, are you guys making loans?

What our customers need is everything. I mean, lending is an important part of it, and that's what we use to sort of cement and create the foundation of those relationships. But what we do as a firm is goes way beyond that are and what we do in corporate banking is trying to make sure we deliver the entire firm, a big global enterprise to them. So they need risk management tools, they need cash management, they need advisory, they need access to capital markets, and that's what we want to make sure that we deliver it wherever they need it, whatever currency they need, whatever sort of risk exposure they've got.

What our customers need is everything. I mean, lending is an important part of it, and that's what we use to sort of cement and create the foundation of those relationships. But what we do as a firm is goes way beyond that are and what we do in corporate banking is trying to make sure we deliver the entire firm, a big global enterprise to them. So they need risk management tools, they need cash management, they need advisory, they need access to capital markets, and that's what we want to make sure that we deliver it wherever they need it, whatever currency they need, whatever sort of risk exposure they've got.

I've got to talk to you about the New City Group, which I just think is so important because those of us weaned on John Reid and Walter Riston and the rest. I'm sorry, it's a bank that's lost this way. A woman from Scotland and the United Kingdom has coming and raised raised Hell and Jane Frasier. The New City Group. What is its global distinction when on the door of the many different kinds of corporate clients you have.

I've got to talk to you about the New City Group, which I just think is so important because those of us weaned on John Reid and Walter Riston and the rest. I'm sorry, it's a bank that's lost this way. A woman from Scotland and the United Kingdom has coming and raised raised Hell and Jane Frasier. The New City Group. What is its global distinction when on the door of the many different kinds of corporate clients you have.

It's not a hard it's not a hard discussion to have with clients because they know us already, they know what we do. I think what our clients we're looking for is to make sure this is the discussion I've had with lots of them.

It's not a hard it's not a hard discussion to have with clients because they know us already, they know what we do. I think what our clients we're looking for is to make sure this is the discussion I've had with lots of them.

How are you different? How are you the same?

How are you different? How are you the same?

And the question is the things we've done have been very internally focused at making sure we're simpler, we're easier to operate, and that we've removed some areas of bureaucracy that are.

And the question is the things we've done have been very internally focused at making sure we're simpler, we're easier to operate, and that we've removed some areas of bureaucracy that are.

You the boutique of the major banks? Is that what this is really kind of.

You the boutique of the major banks? Is that what this is really kind of.

Not at all, not at all.

Not at all, not at all.

In fact, some of the things we do for our clients are things that no other bank can do. We operate in more countries, we have the biggest cash management network where we're participating in every corner of the capital market. So not just the easy stuff, not just the G three currencies, but all the exotics, all the emerging markets.

In fact, some of the things we do for our clients are things that no other bank can do. We operate in more countries, we have the biggest cash management network where we're participating in every corner of the capital market. So not just the easy stuff, not just the G three currencies, but all the exotics, all the emerging markets.

So then explain your Saudi Arabian relationship that was fracticed for years. Explain the New City Group into Saudi Arabia or the New City Group into Mexico where retail walked away years ago. Explain the strategic corporate banking effort in some of these countries.

So then explain your Saudi Arabian relationship that was fracticed for years. Explain the New City Group into Saudi Arabia or the New City Group into Mexico where retail walked away years ago. Explain the strategic corporate banking effort in some of these countries.

It's it's it's incredibly important to look at both both Saudi and the and the rest of the region there because the capital formation coming out of Saudi, the UAE, Qatar, Kuwait, what's happening there is critical because what we see on these companies, these countries and the companies that exist in them is an ability to export capital and technology and know how, we're seeing some of the most important investments in things like renewable energy coming from that region. So from our perspective, helping those those companies and those countries move outside of their home markets is really important.

It's it's it's incredibly important to look at both both Saudi and the and the rest of the region there because the capital formation coming out of Saudi, the UAE, Qatar, Kuwait, what's happening there is critical because what we see on these companies, these countries and the companies that exist in them is an ability to export capital and technology and know how, we're seeing some of the most important investments in things like renewable energy coming from that region. So from our perspective, helping those those companies and those countries move outside of their home markets is really important.

Paul, jump in here, but the next time you're in Dubai, you need a long conversation with Jumana Pertecci's over there.

Paul, jump in here, but the next time you're in Dubai, you need a long conversation with Jumana Pertecci's over there.

Hold love do love to do?

Hold love do love to do?

Plugged in there, Jason. I love to get your thoughts on and city's thoughts on India because a lot of folks are pitching that to us as everything you knew about China for the last twenty twenty five years, put it to India for the next twenty to twenty five years, maybe even with obviously a more friendly government. How do you guys think about it?

Plugged in there, Jason. I love to get your thoughts on and city's thoughts on India because a lot of folks are pitching that to us as everything you knew about China for the last twenty twenty five years, put it to India for the next twenty to twenty five years, maybe even with obviously a more friendly government. How do you guys think about it?

You've been there, since I.

You've been there, since I.

Try not to be overly bullish.

Try not to be overly bullish.

I'm a guy who lends money, and so I have to be balanced and how I think about it. But I was there about a month ago. I go to India once or twice a year, and I've been doing that for over ten years. I've never seen a more constructive investment environment that I've seen in this past year in India. What's happening there is extraordinary. There's going to be a massive supercycle I think coming out of if this election wraps up. It doesn't seem like it's going to be very dramatic in terms of the outcome. We all kind of know Prime Minister.

I'm a guy who lends money, and so I have to be balanced and how I think about it. But I was there about a month ago. I go to India once or twice a year, and I've been doing that for over ten years. I've never seen a more constructive investment environment that I've seen in this past year in India. What's happening there is extraordinary. There's going to be a massive supercycle I think coming out of if this election wraps up. It doesn't seem like it's going to be very dramatic in terms of the outcome. We all kind of know Prime Minister.

Motor will continue what he's planning to do.

Motor will continue what he's planning to do.

In terms of investment in this country to make it competitive and get to his twenty forty seven goal of becoming a developed country.

In terms of investment in this country to make it competitive and get to his twenty forty seven goal of becoming a developed country.

Is incredible.

Is incredible.

That five hundred gigawatts of new power, a rail system, of roads system airports that can't be beat. You're feeling it already my last trip there. New tunnels, new roads, shovel ready projects that are starting to kick off.

That five hundred gigawatts of new power, a rail system, of roads system airports that can't be beat. You're feeling it already my last trip there. New tunnels, new roads, shovel ready projects that are starting to kick off.

It's really interesting, well risked.

It's really interesting, well risked.

In one oh one call on the Utilities of America, they're having a renaissance now because got to build out for AI. What do you see there granular From a granular standpoint, what does your team see of investment in electricity in America?

In one oh one call on the Utilities of America, they're having a renaissance now because got to build out for AI. What do you see there granular From a granular standpoint, what does your team see of investment in electricity in America?

That's so that's the critical thing AI. Also the support for you know, renewable fuels and and and synthetic fuels, all of that plus the evy kind of revolution. The amount of power that we're all going to need, not just the US but globally is extraordinary. I I think we have to take it all of the above approach to this. What's going to happen is, you know, we're gonna we're going to continue to push.

That's so that's the critical thing AI. Also the support for you know, renewable fuels and and and synthetic fuels, all of that plus the evy kind of revolution. The amount of power that we're all going to need, not just the US but globally is extraordinary. I I think we have to take it all of the above approach to this. What's going to happen is, you know, we're gonna we're going to continue to push.

All of the renewable options.

All of the renewable options.

But given what we think is happening at AI and the requirement for data centers, it's it's going to go way beyond that. We need to make sure. My view is it's going to require nuclear. It's going to require and there's going to be a significant period of transition where we're going to continue to use things like gas fired power to get get to those levels. Because the what we're seeing in the US right very specifically, but also everywhere else India, Brazil, China, I mean, the everybody's gonna be building out MASSI.

But given what we think is happening at AI and the requirement for data centers, it's it's going to go way beyond that. We need to make sure. My view is it's going to require nuclear. It's going to require and there's going to be a significant period of transition where we're going to continue to use things like gas fired power to get get to those levels. Because the what we're seeing in the US right very specifically, but also everywhere else India, Brazil, China, I mean, the everybody's gonna be building out MASSI.

Data the French loadonness John Michaelswaye with McCrow very quickly. Here you're saying we're going to see a nuclear energy build out across America like what France owns.

Data the French loadonness John Michaelswaye with McCrow very quickly. Here you're saying we're going to see a nuclear energy build out across America like what France owns.

I don't think it'll be quite as I don't think nuclear will be a big a part of the solution for the US. But there's gonna be more than I've had before. But France has gone sort of all in. That's that's gonna be there there long term sas.

I don't think it'll be quite as I don't think nuclear will be a big a part of the solution for the US. But there's gonna be more than I've had before. But France has gone sort of all in. That's that's gonna be there there long term sas.

Okay, thank you so much. With City Group head of all over your court.

Okay, thank you so much. With City Group head of all over your court.

Thank you wors based in New York. Worst elevators in global Can you do.

Thank you wors based in New York. Worst elevators in global Can you do.

An infrastructure investment an the elevators? Jason, thank you got it. Thank you so much, greatly appreciate it.

An infrastructure investment an the elevators? Jason, thank you got it. Thank you so much, greatly appreciate it.

You daily look at the front pages around the world.

You daily look at the front pages around the world.

It's highlighted my weekend Mother's Day. I couldn't tap it head to toe in Nick's.

It's highlighted my weekend Mother's Day. I couldn't tap it head to toe in Nick's.

Merch I did.

Merch I did.

I got the Brentson jersey, I had the Knicks hat. Yeah, I got hooked up from other's day. Of course, I really wanted to throw it off when I was watching the game.

I got the Brentson jersey, I had the Knicks hat. Yeah, I got hooked up from other's day. Of course, I really wanted to throw it off when I was watching the game.

But that's okay, he.

But that's okay, he.

Said, well, I'm trying to get from Paul to the next game. He's got thy Okay.

Said, well, I'm trying to get from Paul to the next game. He's got thy Okay.

This one came from Lucashaw's newsletter always go to that. Yes, really good. He's he's talking about how Netflix, Amazon, and Apple they want to change the way they pay Hollywood talent. So what he's saying is that Apple has to begin basing pay on how the series or movies perform. So, for example, talent received bonuses based on three things. A number of people who signed up for Apple TV plus to watch, how much time they spend viewing, and the cost of the program relative to the size of its audience. So this is something different. It's a Netflix, Amazon, they're also considering performance based compensation, but it's something different As to how.

This one came from Lucashaw's newsletter always go to that. Yes, really good. He's he's talking about how Netflix, Amazon, and Apple they want to change the way they pay Hollywood talent. So what he's saying is that Apple has to begin basing pay on how the series or movies perform. So, for example, talent received bonuses based on three things. A number of people who signed up for Apple TV plus to watch, how much time they spend viewing, and the cost of the program relative to the size of its audience. So this is something different. It's a Netflix, Amazon, they're also considering performance based compensation, but it's something different As to how.

I read every word thinking of Paul Sweeney, Lisa and Paul to me, and the back end of lucas Shaw's brilliant note is okay, show us the data and they just they they think they have a rule book different than the days where we knew guns smoke was number one.

I read every word thinking of Paul Sweeney, Lisa and Paul to me, and the back end of lucas Shaw's brilliant note is okay, show us the data and they just they they think they have a rule book different than the days where we knew guns smoke was number one.

Exactly right, You're exactly right, Tom, So uh, you know that I suspect the talent and more importantly, their their agents. We're like, okay, that's fine, but show us, show us the data. We don't mind getting the back end, you know, and as supposed.

Exactly right, You're exactly right, Tom, So uh, you know that I suspect the talent and more importantly, their their agents. We're like, okay, that's fine, but show us, show us the data. We don't mind getting the back end, you know, and as supposed.

To Shogun does well and something else doesn't do as well, but you gotta show the data.

To Shogun does well and something else doesn't do as well, but you gotta show the data.

But again, kind of Amazon, Apple, Netflix, they're the ones that have the money.

But again, kind of Amazon, Apple, Netflix, they're the ones that have the money.

They have the checkbooks. These days, they drive next.

They have the checkbooks. These days, they drive next.

Yes, okay. So along similar lines, we've been talking a lot of TV advertising, how it's been going down, but a lot of brands moving away from TV advertising. They're moving to Google, Meta, TikTok to reach these new audiences. Here's an example. Mandalis they wanted to promote this limited edition Oreo cookie, so they didn't spend a dime on TV advertising. Where they went. They went to Instagram, they went to TikTok, they went to the websites of large retailers like Amazon and Walmart. So you're seeing the shift because the people they're trying to reach, the gen z ors, multiculture Audi It says there aren't watching enough TV.

Yes, okay. So along similar lines, we've been talking a lot of TV advertising, how it's been going down, but a lot of brands moving away from TV advertising. They're moving to Google, Meta, TikTok to reach these new audiences. Here's an example. Mandalis they wanted to promote this limited edition Oreo cookie, so they didn't spend a dime on TV advertising. Where they went. They went to Instagram, they went to TikTok, they went to the websites of large retailers like Amazon and Walmart. So you're seeing the shift because the people they're trying to reach, the gen z ors, multiculture Audi It says there aren't watching enough TV.

And so this is May.

And so this is May.

Tom May is a time for the upfronts, which we've been done since the beginning of time for television, where the TV networks sell maybe eighty percent of their next year's advertising inventory today in May, and for a discount.

Tom May is a time for the upfronts, which we've been done since the beginning of time for television, where the TV networks sell maybe eighty percent of their next year's advertising inventory today in May, and for a discount.

Does that even matter anymore?

Does that even matter anymore?

Our brand's even spending on broadcasting cable television. And here's here's the data from the Wall Street Journal story. The maker of Rich Crackers and Sour Patch Kids candy is spending about fifteen percent of its US AD budget on TV this year, down from forty two percent.

Our brand's even spending on broadcasting cable television. And here's here's the data from the Wall Street Journal story. The maker of Rich Crackers and Sour Patch Kids candy is spending about fifteen percent of its US AD budget on TV this year, down from forty two percent.

Three years ago. And what's important here? Did youday have this? I read it cover to cover. Now learning about YouTube and what we're doing on Bloomberg Surveillance and Lisa, they have great legitimate math that on Instagram, most people look at the still photos. They don't look at the reels and the mass like six to one, it's huge. Where people the reels okay, cute, great, nobody cares. They look at still photos for messaging.

Three years ago. And what's important here? Did youday have this? I read it cover to cover. Now learning about YouTube and what we're doing on Bloomberg Surveillance and Lisa, they have great legitimate math that on Instagram, most people look at the still photos. They don't look at the reels and the mass like six to one, it's huge. Where people the reels okay, cute, great, nobody cares. They look at still photos for messaging.

It's interest because it used to be the opposite. So that's interesting.

It's interest because it used to be the opposite. So that's interesting.

A little shit there next.

A little shit there next.

Okay, we've been talking about inflation data, right PPI CPI, But apparently chicken sales that's what people are looking for for the new inflation gauge. Okay, because shoppers trade down to chicken from pricier meat cuts. When the food prices are high, so that's what they're seeing that shift, So diners are buying more chicken wings at fast food places, frozen tenders at grocery stores. You had Tyson Food. They're bringing in higher profits from poultry instead of their other meats. Restaurants pushing chicken options, so you start to see that cheaper chicken prices, though not likely to stay for long, of course, because wholesale prices they're rising the man's sticking up. Supplies are starting to thin out, but looking to chicken.

Okay, we've been talking about inflation data, right PPI CPI, But apparently chicken sales that's what people are looking for for the new inflation gauge. Okay, because shoppers trade down to chicken from pricier meat cuts. When the food prices are high, so that's what they're seeing that shift, So diners are buying more chicken wings at fast food places, frozen tenders at grocery stores. You had Tyson Food. They're bringing in higher profits from poultry instead of their other meats. Restaurants pushing chicken options, so you start to see that cheaper chicken prices, though not likely to stay for long, of course, because wholesale prices they're rising the man's sticking up. Supplies are starting to thin out, but looking to chicken.

A dwindling supply of cattle in the US means meat packers like Tyson are paying more to secure their lives, like where are the cows going?

A dwindling supply of cattle in the US means meat packers like Tyson are paying more to secure their lives, like where are the cows going?

What's the big thing?

What's the big thing?

Go open?

Go open?

Sess got a beautiful exercise on this, I'm going to say fifteen twenty years ago, and you know it links chicken beef rather with pork, with chickens, and the dynamics are very sophisticated about chicken. Should we raise more cows or not? And went somewhere in the rest of the country, it's like, what do we do with the pigs? And then what do we do with the good park chickens? Way more chicken at home.

Sess got a beautiful exercise on this, I'm going to say fifteen twenty years ago, and you know it links chicken beef rather with pork, with chickens, and the dynamics are very sophisticated about chicken. Should we raise more cows or not? And went somewhere in the rest of the country, it's like, what do we do with the pigs? And then what do we do with the good park chickens? Way more chicken at home.

I ate more chicken. I know that's cheaper, not just you can't eat beef. No, you can't chicken. You can eat more frequent right, I mean you're the health expert.

I ate more chicken. I know that's cheaper, not just you can't eat beef. No, you can't chicken. You can eat more frequent right, I mean you're the health expert.

Yes.

Yes.

And turkey, ground turkey.

And turkey, ground turkey.

Okay, I.

Okay, I.

Won't come on.

Won't come on.

You gotta switch to the ground turkey because I don't want to hear about.

You gotta switch to the ground turkey because I don't want to hear about.

Okay.

Okay.

My favorite story is today Costco becoming the hot spot for adult birthday parties. Okay, it's blowing up on TikTok, and here's how it works.

My favorite story is today Costco becoming the hot spot for adult birthday parties. Okay, it's blowing up on TikTok, and here's how it works.

My husband is listening to this.

My husband is listening to this.

But the unsuspecting birthday person, all right, they start seeing them random friends, relatives throughout the stores are shopping and they're like, oh, it's a coincidence. How nice everyone's here today. And then all of a sudden, when they're done checking out, they go to the food court at the end and there everybody is surprise, surprise, They sing happy birthday. It becomes this whole party. But one person said it's because it's a cheaper alternative.

But the unsuspecting birthday person, all right, they start seeing them random friends, relatives throughout the stores are shopping and they're like, oh, it's a coincidence. How nice everyone's here today. And then all of a sudden, when they're done checking out, they go to the food court at the end and there everybody is surprise, surprise, They sing happy birthday. It becomes this whole party. But one person said it's because it's a cheaper alternative.

Okay.

Okay.

She spent just thirty dollars and eighty eight cents on her birthday dinner for seven people because they bought hot dogs and soda combos. Okay, that's what it's coming up to. They were Costco hoodies got into all the you know, the the birthday celebrations. So it's it's cheaper. I mean unless you go into Costco shoppings for you like me, and you spend five hundred bucks and it's not really cheaper.

She spent just thirty dollars and eighty eight cents on her birthday dinner for seven people because they bought hot dogs and soda combos. Okay, that's what it's coming up to. They were Costco hoodies got into all the you know, the the birthday celebrations. So it's it's cheaper. I mean unless you go into Costco shoppings for you like me, and you spend five hundred bucks and it's not really cheaper.

But so this party was hosted at the Fort Oglethorpe Costco warehouse in Wringled, Georgia.

But so this party was hosted at the Fort Oglethorpe Costco warehouse in Wringled, Georgia.

Pretty cool. Yeah, so I mean, is it the hot dog? Is that the thing?

Pretty cool. Yeah, so I mean, is it the hot dog? Is that the thing?

It's the hot dog soda combo. It's like two bucks or something.

It's the hot dog soda combo. It's like two bucks or something.

People love Costco.

People love Costco.

I know my mother goes to Costco for two things, the hot dog and vodka.

I know my mother goes to Costco for two things, the hot dog and vodka.

And on the vodka.

And on the vodka.

Say that, mom, So then you have the hot dog and the vodka.

Say that, mom, So then you have the hot dog and the vodka.

That's what she goes.

That's what she goes.

That's it.

That's it.

But you have to have a membership to attend the party. That's the other thing. How they kind of I'm not a member of Yeah, so you're not a member. You can't go to the party member. You have to be remember, I just go costco dot com.

But you have to have a membership to attend the party. That's the other thing. How they kind of I'm not a member of Yeah, so you're not a member. You can't go to the party member. You have to be remember, I just go costco dot com.

Yeah, okay, all right, okay, Lisa, thank you so much ending on Costco. Can we get you know, can we large. You know that we're going to Costco. This is coming weekend. Sure, see Alisa Matteo SURDAYE get the food over there.

Yeah, okay, all right, okay, Lisa, thank you so much ending on Costco. Can we get you know, can we large. You know that we're going to Costco. This is coming weekend. Sure, see Alisa Matteo SURDAYE get the food over there.

Where's where's our Costco? Lisa? Where do we go? Costco?

Where's where's our Costco? Lisa? Where do we go? Costco?

I go to the one. There's one in North Plainfield, there's one in Union, there's one in Yeah, New Jersey, and there's not one in one in Brooklyn.

I go to the one. There's one in North Plainfield, there's one in Union, there's one in Yeah, New Jersey, and there's not one in one in Brooklyn.

Actually there's one. Okay, you can go to Brooklyn.

Actually there's one. Okay, you can go to Brooklyn.

Thank you so much, greatly, greatly appreciate this.

Thank you so much, greatly, greatly appreciate this.

This is a Bloomberg Surveillance podcast, bringing you the best in economics, finance, investment, and international relations. You can and can also watch the show live on YouTube.

This is a Bloomberg Surveillance podcast, bringing you the best in economics, finance, investment, and international relations. You can and can also watch the show live on YouTube.

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