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This is the Bloomberg Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join us each day for insight from the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App. We thought we'd start with economics. Sema Shaw is scary good. It comes down to London School of Economics or tour of duty at the Bank of England with a huge concision about what's going on. Seema with principle. Thank you so much for joining this morning. Just to cut to the chase, Seema to the central banks and particularly the Fed. Do they have a cogent plan or are they making it up as they go? Hey?

This is the Bloomberg Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join us each day for insight from the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App. We thought we'd start with economics. Sema Shaw is scary good. It comes down to London School of Economics or tour of duty at the Bank of England with a huge concision about what's going on. Seema with principle. Thank you so much for joining this morning. Just to cut to the chase, Seema to the central banks and particularly the Fed. Do they have a cogent plan or are they making it up as they go? Hey?

Tom, that is that is I think such a good question, because you know, we read we you know, we pour over where the commera is has it moved, what is the what is their indication? What are they thinking, how they feeling. The truth is is that they are digesting the economic data, the incoming stuff, just like we are. So I think it's right that they're making up as they go along. I mean, of course they have an idea that they just have to respond to the data because it's just unfolding, and I don't think they have a clear idea of working is going to be right.

Tom, that is that is I think such a good question, because you know, we read we you know, we pour over where the commera is has it moved, what is the what is their indication? What are they thinking, how they feeling. The truth is is that they are digesting the economic data, the incoming stuff, just like we are. So I think it's right that they're making up as they go along. I mean, of course they have an idea that they just have to respond to the data because it's just unfolding, and I don't think they have a clear idea of working is going to be right.

In ere England.

In ere England.

There's been a lot of good research with respect to how hard it is to do this business, and that as a general statement, the Bank of England and other forecasters simply were too pessimistic and that we got wrong on a fractional basis. On a tenth of a percentage point basis, the growthiness was better than we expected. Do you expect that to continue? And that will underestimate growth among the three central banks?

There's been a lot of good research with respect to how hard it is to do this business, and that as a general statement, the Bank of England and other forecasters simply were too pessimistic and that we got wrong on a fractional basis. On a tenth of a percentage point basis, the growthiness was better than we expected. Do you expect that to continue? And that will underestimate growth among the three central banks?

So look, it's possible. I think that, I mean all central banks have had actually maybe with the exception of the ECB, which seems like it's had a kind of a more successful forecast drink ability of the last couple of years. But I think it's it should be getting a little bit more straightforward, because I think the last couple of years have been very difficult for forecasters. And I'm going to put myself in there as well, because we've been living in you know, typically an list. We look at historic data, we use that to give us a guide forward. The thing that forecaster has missed in the last couple of years is that actually the economy has been fundamentally changed by COVID. The normal reaction function, interest rates, sensitivity all very very different. And I think it's only in the last twelve months or so that everyone has started to realize that there is maybe you know, doing a comparison to ninety five to two thousand and seven just doesn't work as well anymore. But from here you're starting to revert kind of normalization should be down the line, and that should make forecasting a bit easier.

So look, it's possible. I think that, I mean all central banks have had actually maybe with the exception of the ECB, which seems like it's had a kind of a more successful forecast drink ability of the last couple of years. But I think it's it should be getting a little bit more straightforward, because I think the last couple of years have been very difficult for forecasters. And I'm going to put myself in there as well, because we've been living in you know, typically an list. We look at historic data, we use that to give us a guide forward. The thing that forecaster has missed in the last couple of years is that actually the economy has been fundamentally changed by COVID. The normal reaction function, interest rates, sensitivity all very very different. And I think it's only in the last twelve months or so that everyone has started to realize that there is maybe you know, doing a comparison to ninety five to two thousand and seven just doesn't work as well anymore. But from here you're starting to revert kind of normalization should be down the line, and that should make forecasting a bit easier.

So Sama, here in the US, do you think this we are in fat today experiencing a soft landing for this economy.

So Sama, here in the US, do you think this we are in fat today experiencing a soft landing for this economy.

I think we're in the motions of a soft landing in the US. So the data is fairly good. Look, we're downshifting, which is a positive thing. The last thing that we want is actually to see economic data continuing to accelerate, because that to me ends up in hard landing later down the line. But I think the jury is still out. You know, we can't say definitively we've got the soft landing, we've achieved it, and we can be all victorious. We won't know for sure for a couple of months, and I do have worries of how the Fed genuinely lands it. I mean, let's say in the next few months, they've seen that inflation comes down, they cut interest roads, they become they start that path. I worry that, actually what's going to happen is that if you're a homeowner and you've been waiting on the sidelines, eager to move but holding back because mortgage rates are so high, you're going to get right back into the market. You're going to ease financial conditions, and you're going to see the market and the economy taking off. So I do worry about, actually, can they do a soft landing? Can they achieve it for more than just a three to six month period.

I think we're in the motions of a soft landing in the US. So the data is fairly good. Look, we're downshifting, which is a positive thing. The last thing that we want is actually to see economic data continuing to accelerate, because that to me ends up in hard landing later down the line. But I think the jury is still out. You know, we can't say definitively we've got the soft landing, we've achieved it, and we can be all victorious. We won't know for sure for a couple of months, and I do have worries of how the Fed genuinely lands it. I mean, let's say in the next few months, they've seen that inflation comes down, they cut interest roads, they become they start that path. I worry that, actually what's going to happen is that if you're a homeowner and you've been waiting on the sidelines, eager to move but holding back because mortgage rates are so high, you're going to get right back into the market. You're going to ease financial conditions, and you're going to see the market and the economy taking off. So I do worry about, actually, can they do a soft landing? Can they achieve it for more than just a three to six month period.

So I guess if you're the Federal Reserve, you saw kind of January, February March some inflationary type of data come out and then kind of. I guess in April reversed a little bit. We got a little bit of you know, slowing down of inflation. So if you're the Federal Reserve, I guess you can make the argument that there's no reason for them to do anything other than wait.

So I guess if you're the Federal Reserve, you saw kind of January, February March some inflationary type of data come out and then kind of. I guess in April reversed a little bit. We got a little bit of you know, slowing down of inflation. So if you're the Federal Reserve, I guess you can make the argument that there's no reason for them to do anything other than wait.

Exactly. I mean, I think after you've had I mean, just basic mass just tells you that if you've had three months of an expected inflation data, you at least need three months of inline inflation data before you could feel any kind of confidence of going back to what your initial plan was. But realistically, given the strengthy of the inflation data and the continued strength of the economy, they probably won a few more months in just three months. So and as I said before, I think they aren't digesting the economic data to the earnings numbers coming out from target certainly very important terms of figuring out where the consumer is, because that's obviously going to tie back and help them figure out what the next market.

Exactly. I mean, I think after you've had I mean, just basic mass just tells you that if you've had three months of an expected inflation data, you at least need three months of inline inflation data before you could feel any kind of confidence of going back to what your initial plan was. But realistically, given the strengthy of the inflation data and the continued strength of the economy, they probably won a few more months in just three months. So and as I said before, I think they aren't digesting the economic data to the earnings numbers coming out from target certainly very important terms of figuring out where the consumer is, because that's obviously going to tie back and help them figure out what the next market.

Is seeman to take the first rate economist ed Yardnny over to his market call, which is a bullmarket wrapped around his concept of a roaring twenties. To me, roaring twenties, either the twentieth century or the twenty first century is about a pop in nominal GDP. Do you, at principle see a combination of real GDP and inflation that leads to an animal spirit that gets to Yard Denny's Roaring twenties.

Is seeman to take the first rate economist ed Yardnny over to his market call, which is a bullmarket wrapped around his concept of a roaring twenties. To me, roaring twenties, either the twentieth century or the twenty first century is about a pop in nominal GDP. Do you, at principle see a combination of real GDP and inflation that leads to an animal spirit that gets to Yard Denny's Roaring twenties.

So it's an interesting question. I mean, I can see normal GDP going up mainly because of AI and tech. The Roaring twenties, to me, was about kind of joy on the consumer side, just that relief and wanting to enjoy life and spend it. And I think we've had that for the last couple of years. Whether or not that continues, I think is very very different question. And inflation is going to play into this so much that if you have got her inflation, of course it's based in normal GDP. The consumers are already feeding that retrenchment. They are struggling with it. I'm not sure that you can actually do that initial that direct comparison to the twenties.

So it's an interesting question. I mean, I can see normal GDP going up mainly because of AI and tech. The Roaring twenties, to me, was about kind of joy on the consumer side, just that relief and wanting to enjoy life and spend it. And I think we've had that for the last couple of years. Whether or not that continues, I think is very very different question. And inflation is going to play into this so much that if you have got her inflation, of course it's based in normal GDP. The consumers are already feeding that retrenchment. They are struggling with it. I'm not sure that you can actually do that initial that direct comparison to the twenties.

Siema, Thank you so much. Sea Michaw the principal group. Okay, I'm gonna tell a story here. He's gonna love this. So I'm at Michael's like, this is like fifteen seventeen years ago and then you know they're giving me an overpriced saler to my third drink. And it's the art directors from my book, and they're like, Tom, we have to have an inside sleeve one of your charts, one hundred and fourteen charts, which chart would be like when you open the book, you see it, you know, inside the book charter and that, and I make the decision, Like over the olive on the martini, I said, it's got to be Malpass, mail Passes at bear Stearns. And out of all the people in the book, and these are a heavy Bill Dudley, the former Fed president, Bob the New York Fed President, Malpass had the most amazing chart, which was yen in yen and gold like what Dennis Gartman did joining us now the former head of the World Bank and iconic at bear Stearns, mister David Milpass as well. I just looked at yen in you and credit to Dennis Gartman as well. It's the call of the decade week yen that we saw, whether it's yen and gold or yen in whatever. How did Japan turn around this train wreck?

Siema, Thank you so much. Sea Michaw the principal group. Okay, I'm gonna tell a story here. He's gonna love this. So I'm at Michael's like, this is like fifteen seventeen years ago and then you know they're giving me an overpriced saler to my third drink. And it's the art directors from my book, and they're like, Tom, we have to have an inside sleeve one of your charts, one hundred and fourteen charts, which chart would be like when you open the book, you see it, you know, inside the book charter and that, and I make the decision, Like over the olive on the martini, I said, it's got to be Malpass, mail Passes at bear Stearns. And out of all the people in the book, and these are a heavy Bill Dudley, the former Fed president, Bob the New York Fed President, Malpass had the most amazing chart, which was yen in yen and gold like what Dennis Gartman did joining us now the former head of the World Bank and iconic at bear Stearns, mister David Milpass as well. I just looked at yen in you and credit to Dennis Gartman as well. It's the call of the decade week yen that we saw, whether it's yen and gold or yen in whatever. How did Japan turn around this train wreck?

Hi? Tom, you you can stabilize your currency by having a good growth plan. So Japan's got to articulate that they're not badly positioned in the world since people are trying to diversify away from China, and Japan has a lot of the things that people want, and so if they can retool the economy, it can work.

Hi? Tom, you you can stabilize your currency by having a good growth plan. So Japan's got to articulate that they're not badly positioned in the world since people are trying to diversify away from China, and Japan has a lot of the things that people want, and so if they can retool the economy, it can work.

It's an experiment of reflation, which is pretty you know, you're in Colorado college and it's like, you know, it's not even in the textbooks. Okay, it's an experiment in reflation, and they want to pull that back. Can they find a middle ground that works versus tripping into deflation again?

It's an experiment of reflation, which is pretty you know, you're in Colorado college and it's like, you know, it's not even in the textbooks. Okay, it's an experiment in reflation, and they want to pull that back. Can they find a middle ground that works versus tripping into deflation again?

They can, but they need to really think about their interest rates. You know, they're pushing up against the one percent limit on the tier. It really doesn't doesn't work to say you're going to limit your bond yield, but you want your currency to stop weakening. So right now they're intervening to try to tide that over. That can work for a little while, but at some point you have to say your interest rates are going to be more similar to the rest of the world interest rate Paul.

They can, but they need to really think about their interest rates. You know, they're pushing up against the one percent limit on the tier. It really doesn't doesn't work to say you're going to limit your bond yield, but you want your currency to stop weakening. So right now they're intervening to try to tide that over. That can work for a little while, but at some point you have to say your interest rates are going to be more similar to the rest of the world interest rate Paul.

Wants to jump in one more question and Yen, what is your call on Jeopanese?

Wants to jump in one more question and Yen, what is your call on Jeopanese?

Yen?

Yen?

I know you're not doing FX and market economists, but do you see a big figure strengthening in Japanese yen or more of the same.

I know you're not doing FX and market economists, but do you see a big figure strengthening in Japanese yen or more of the same.

I think it could settle where it is now and the world would accept that, And that is a little bit what is going on the world move through currency realignments and then tries to stabilize after that and reduce the harm from that.

I think it could settle where it is now and the world would accept that, And that is a little bit what is going on the world move through currency realignments and then tries to stabilize after that and reduce the harm from that.

He's tanned and rested. I left exactly hand arrested.

He's tanned and rested. I left exactly hand arrested.

I know.

I know.

I'm very impressed, David. We've seen come bringing it back to the US. Here my entire career, we've been talking about annual deficits in the national debt, and now we even have Jamie Diamond, David Solomon and gold and Sachs talking about the national debt. We've even got that silly thing downtown where they tally of the national debt on a daily basis.

I'm very impressed, David. We've seen come bringing it back to the US. Here my entire career, we've been talking about annual deficits in the national debt, and now we even have Jamie Diamond, David Solomon and gold and Sachs talking about the national debt. We've even got that silly thing downtown where they tally of the national debt on a daily basis.

Of everybody to see is.

Of everybody to see is.

It time to care about that stuff? Like I'm sixty, do I care?

It time to care about that stuff? Like I'm sixty, do I care?

I think absolutely it is time to care. It was one thing when the US economy had a fifty percent debt to GDP ratio, you could borrow that and not really not really at tax the world's capital or or take all of the world's capital. We're the biggest economy, and we're borrowing so much that it changes capital flows around the world, and I think it's doing it in a harmful way. It's the government gets the first DIBs on all capital, and then if there's any leftover, big corporations get it through the bond market. And if there's any leftover, which there isn't really, small businesses can borrow to fund their inventory, their working capital, and countries outside the US have a little bit of capital at the end of the line. That's not a workable system for the world. So I think there has to be, both in the US and in the world, an urgency that the US government stopped growing at spending.

I think absolutely it is time to care. It was one thing when the US economy had a fifty percent debt to GDP ratio, you could borrow that and not really not really at tax the world's capital or or take all of the world's capital. We're the biggest economy, and we're borrowing so much that it changes capital flows around the world, and I think it's doing it in a harmful way. It's the government gets the first DIBs on all capital, and then if there's any leftover, big corporations get it through the bond market. And if there's any leftover, which there isn't really, small businesses can borrow to fund their inventory, their working capital, and countries outside the US have a little bit of capital at the end of the line. That's not a workable system for the world. So I think there has to be, both in the US and in the world, an urgency that the US government stopped growing at spending.

And this is, I guess a political issue, and again in my lifetime, i've never seen the political will to address it because it doesn't sound very popular.

And this is, I guess a political issue, and again in my lifetime, i've never seen the political will to address it because it doesn't sound very popular.

That's right, And I think there's a big gap in our law. You know, the debt limit law is misnamed. It's really the debt increase law. So every couple of years presidents both parties sign a law to increase the debt limit. We have to replace it with something workable, strong, and it has to hurt Washington, not hurt the people of the country when we're when we have too much debt, they shut the national parks rather than reducing the staff hiring in DC. The swamp gets bigger. World Bank and it's a swamp. Now it worked in the swamp. What you learn working in the swamp? Uh So in this so Washington is a swamp. The parts, all the parts work together to make Washington bigger and more profitable. That's that's a risk. And the World Bank is part of that. It's headquartered and uh and centered in Washington. One thing I learned Tom was how hard it is to get any other country to do the right thing. It's just as hard outside the US as in the US. So if you take Nigeria, why is this oil rich country so poor? They've got a huge, extreme poverty rate. Why is that because the government takes the all the profits from oil and wastes it.

That's right, And I think there's a big gap in our law. You know, the debt limit law is misnamed. It's really the debt increase law. So every couple of years presidents both parties sign a law to increase the debt limit. We have to replace it with something workable, strong, and it has to hurt Washington, not hurt the people of the country when we're when we have too much debt, they shut the national parks rather than reducing the staff hiring in DC. The swamp gets bigger. World Bank and it's a swamp. Now it worked in the swamp. What you learn working in the swamp? Uh So in this so Washington is a swamp. The parts, all the parts work together to make Washington bigger and more profitable. That's that's a risk. And the World Bank is part of that. It's headquartered and uh and centered in Washington. One thing I learned Tom was how hard it is to get any other country to do the right thing. It's just as hard outside the US as in the US. So if you take Nigeria, why is this oil rich country so poor? They've got a huge, extreme poverty rate. Why is that because the government takes the all the profits from oil and wastes it.

This is such a better Mail pass than the World Bank and eight people standing around looking at every where. David Mail passes public service to the nation in the world with the World Bank and involved in politics as well. I'm looking here at the intellectual combine over at Schwab and I got SMP tech sectors forward price to sales ratio pushing up against this all time. I thank you Kevin Gordon for that wisdom. Joining us now, Lizzie Saunders is a privilege of working with Kevin Gordon. Lizzy, and you do the best charts on you and you're in Timmer, do the best charts on Twitter today. What's your most important chart that you're putting out for Schwab right now?

This is such a better Mail pass than the World Bank and eight people standing around looking at every where. David Mail passes public service to the nation in the world with the World Bank and involved in politics as well. I'm looking here at the intellectual combine over at Schwab and I got SMP tech sectors forward price to sales ratio pushing up against this all time. I thank you Kevin Gordon for that wisdom. Joining us now, Lizzie Saunders is a privilege of working with Kevin Gordon. Lizzy, and you do the best charts on you and you're in Timmer, do the best charts on Twitter today. What's your most important chart that you're putting out for Schwab right now?

Oh boy, that's a good question. There's so many. I think it's labor market data. I think it's it's claims, continuing claims, what we see in the monthly jobs report. I think that's the needle mover in terms of Fed policy.

Oh boy, that's a good question. There's so many. I think it's labor market data. I think it's it's claims, continuing claims, what we see in the monthly jobs report. I think that's the needle mover in terms of Fed policy.

Correlating targets earnings this morning and very great disappointment on revenue. Can you coordinate that we correlate that, I should say with the labor market.

Correlating targets earnings this morning and very great disappointment on revenue. Can you coordinate that we correlate that, I should say with the labor market.

Well, you know I don't cover individual stocks, including Target, but but you know you have the earnings story this quarter at the bottom line level has been better than expected, the beat rate, the percent by which companies have beaten. But you've got overall revenue growth down around in line with where inflation is. So it really has exposed the companies that actually do have pricing power and don't have pricing power. In addition, revenue beat rate has been below average. The percent by which companies have beaten on the top line has been below average. So I think this is increasingly, yet again a sign of this bifurcation happening, whether it's between nominal and real, high end consumer and low end consumer services versus the good side, discretionary versus non discretionary. And I think there's a reason why the consumer discretionary sector has been performing poorly is we're now seeing more than just cracks in the facade of the consumer.

Well, you know I don't cover individual stocks, including Target, but but you know you have the earnings story this quarter at the bottom line level has been better than expected, the beat rate, the percent by which companies have beaten. But you've got overall revenue growth down around in line with where inflation is. So it really has exposed the companies that actually do have pricing power and don't have pricing power. In addition, revenue beat rate has been below average. The percent by which companies have beaten on the top line has been below average. So I think this is increasingly, yet again a sign of this bifurcation happening, whether it's between nominal and real, high end consumer and low end consumer services versus the good side, discretionary versus non discretionary. And I think there's a reason why the consumer discretionary sector has been performing poorly is we're now seeing more than just cracks in the facade of the consumer.

So, Lizane, I guess one of the key issues here are the earnings that we have seen and again we're going to another big one after the close tonight with Nvidia. Have they been strong enough to support this big move up and equity valuations that we've seen since October.

So, Lizane, I guess one of the key issues here are the earnings that we have seen and again we're going to another big one after the close tonight with Nvidia. Have they been strong enough to support this big move up and equity valuations that we've seen since October.

Well, you've got about I think the blended growth rate right now is eleven percent. That's inclusive of the companies that have yet to report, and that is well better than what was expected at the beginning of reporting season. That's getting there. But I think earnings do need to continue to surprise on the upside because last year's strengthen the market was almostultiple expansion because you didn't have much in the way of earnings growth. So I think the earnings do have to play catchup. Obviously, the report out today is incredibly important, not just psychologically, which we know it's going to be important psychologically, but if you look at the overall tech sector, the earnings growth rate drops from about twenty four percent or so twenty three twenty four percent down to less than eleven excluding what is expected for Nvidia, So it is obviously the poster child. But that has been the support for the tech sector, which is the overall support for a higher valuation level. If you look around the world, one of the mistakes that investors make is they do valuation comps country to country, region or region without taking into consideration what are the underlying drivers of the local economy. And when you have more of an information tech based economy, that is support of all LSEQL of a higher valuation backdrop. The last thing I'd say is inflation as a backdrop for valuations is important, maybe not coinstantly. The sweet spot in terms of historical valuations being supported at a higher level, has been in and around that two percent inflation zone. We're obviously not there yet, even if we're directionally heading in the right way.

Well, you've got about I think the blended growth rate right now is eleven percent. That's inclusive of the companies that have yet to report, and that is well better than what was expected at the beginning of reporting season. That's getting there. But I think earnings do need to continue to surprise on the upside because last year's strengthen the market was almostultiple expansion because you didn't have much in the way of earnings growth. So I think the earnings do have to play catchup. Obviously, the report out today is incredibly important, not just psychologically, which we know it's going to be important psychologically, but if you look at the overall tech sector, the earnings growth rate drops from about twenty four percent or so twenty three twenty four percent down to less than eleven excluding what is expected for Nvidia, So it is obviously the poster child. But that has been the support for the tech sector, which is the overall support for a higher valuation level. If you look around the world, one of the mistakes that investors make is they do valuation comps country to country, region or region without taking into consideration what are the underlying drivers of the local economy. And when you have more of an information tech based economy, that is support of all LSEQL of a higher valuation backdrop. The last thing I'd say is inflation as a backdrop for valuations is important, maybe not coinstantly. The sweet spot in terms of historical valuations being supported at a higher level, has been in and around that two percent inflation zone. We're obviously not there yet, even if we're directionally heading in the right way.

Lizzie, what are some of the sectors that screen well for you and your team here?

Lizzie, what are some of the sectors that screen well for you and your team here?

Yeah, So we relaunched Schwab sector views at the beginning of the year after a two year hiatus for a whole variety of reasons, and we haven't had any change in terms of the sectors on which we have outperform ratings since the beginning of the year. So it's financials, materials, and energy. Obviously a very cyclical bias in terms of where our outperforms are. The two underperforms are rates, maybe no surprise given the problems in commercial real estate, and then as we already touched on a consumat discretionary, the rest are in that neutral category.

Yeah, So we relaunched Schwab sector views at the beginning of the year after a two year hiatus for a whole variety of reasons, and we haven't had any change in terms of the sectors on which we have outperform ratings since the beginning of the year. So it's financials, materials, and energy. Obviously a very cyclical bias in terms of where our outperforms are. The two underperforms are rates, maybe no surprise given the problems in commercial real estate, and then as we already touched on a consumat discretionary, the rest are in that neutral category.

Is how do you manage a bull market across the kitchen table selling main goal away that didn't work out. It was a great chart. I don't know if Young Gordon added at Schwab, but you know, it's like we're getting back to you know, two thousand and six, ownership of equities sixty some percent, whatever the number is it's really great, We're all in on this market.

Is how do you manage a bull market across the kitchen table selling main goal away that didn't work out. It was a great chart. I don't know if Young Gordon added at Schwab, but you know, it's like we're getting back to you know, two thousand and six, ownership of equities sixty some percent, whatever the number is it's really great, We're all in on this market.

How do you manage the.

How do you manage the.

Emotion of a bull market on a kitchen table over a.

Emotion of a bull market on a kitchen table over a.

Beverage pall, You know, Tom, that's an interesting question because you know, household exposure to equities is a behavioral measure of sentiment, for lack of a better word, But you've got attitudinal measures of the sentiment. And one of the interesting things that has occurred in the last couple of years really in this sort of post COVID bear market cycle, is that you get much bigger swings in the attitudinal measures of sentiment than you do in the behavioral measures. So if you look at just AAII American association of individual investors, you can see pretty big moves in a very short period of time up in percentage of bulls, up in percentage of bears depending on the new year term wiggles in the market. But you haven't seen much more movement in that invested exposure piece of it. So I think that there is some complacency out there as measured by the behavioral measures, but those attitudinal measures are swinging much more quickly in this environment.

Beverage pall, You know, Tom, that's an interesting question because you know, household exposure to equities is a behavioral measure of sentiment, for lack of a better word, But you've got attitudinal measures of the sentiment. And one of the interesting things that has occurred in the last couple of years really in this sort of post COVID bear market cycle, is that you get much bigger swings in the attitudinal measures of sentiment than you do in the behavioral measures. So if you look at just AAII American association of individual investors, you can see pretty big moves in a very short period of time up in percentage of bulls, up in percentage of bears depending on the new year term wiggles in the market. But you haven't seen much more movement in that invested exposure piece of it. So I think that there is some complacency out there as measured by the behavioral measures, but those attitudinal measures are swinging much more quickly in this environment.

What do you see at Schwab What is cash doing.

What do you see at Schwab What is cash doing.

Well.

Well.

I think for a lot of investors, cash is earning income, so you've got income and fixed income. Again, That's why I push back on this notion that the six trillion dollars in money market funds is just sitting there ripe to jump into the equity market. I think that's probably fairly sticky, and I think it's great comfort, particularly for more conservative or older investors that had to stretch for yield and move out the risk spectrum, to not have to do that. You've got implications for within the equity side, especially areas like dividend stocks that will increase in attractiveness depending on what yields are doing. But I think a lot of that sort of cash money is fairly sticky, but is turning a nice shield at this point.

I think for a lot of investors, cash is earning income, so you've got income and fixed income. Again, That's why I push back on this notion that the six trillion dollars in money market funds is just sitting there ripe to jump into the equity market. I think that's probably fairly sticky, and I think it's great comfort, particularly for more conservative or older investors that had to stretch for yield and move out the risk spectrum, to not have to do that. You've got implications for within the equity side, especially areas like dividend stocks that will increase in attractiveness depending on what yields are doing. But I think a lot of that sort of cash money is fairly sticky, but is turning a nice shield at this point.

Lizien, it was great having your assistant Kevin Gordon on, but you know he failed in one.

Lizien, it was great having your assistant Kevin Gordon on, but you know he failed in one.

Oh he's more than that. But yeah, I love that interview, well done.

Oh he's more than that. But yeah, I love that interview, well done.

We were coming out of it and I said to him casually, I said, let's play some Nickelback. He didn't know who nickelback was.

We were coming out of it and I said to him casually, I said, let's play some Nickelback. He didn't know who nickelback was.

The young law did not know who Nickelback was.

The young law did not know who Nickelback was.

I taught him. Well, he knows who is, so you better know that if.

I taught him. Well, he knows who is, so you better know that if.

It was to cash a paycheck. Lizianne Saunders, working with the great Kevin Gordon and Schwab, thank you so much.

It was to cash a paycheck. Lizianne Saunders, working with the great Kevin Gordon and Schwab, thank you so much.

I can't say nothing. Joining us now.

I can't say nothing. Joining us now.

The worst job in Bloomberg. She has to sort through the four hundred polls that are coming up before the first Tuesday of November. Lord Davis's deputy US Politics team lead and poll talent with Bloomberg News. He pulled out Laura and my summary of all the different polls is the White House is making very clear they don't believe the polls.

The worst job in Bloomberg. She has to sort through the four hundred polls that are coming up before the first Tuesday of November. Lord Davis's deputy US Politics team lead and poll talent with Bloomberg News. He pulled out Laura and my summary of all the different polls is the White House is making very clear they don't believe the polls.

Do I have that right?

Do I have that right?

Yes.

Yes.

Biden has repeatedly said that he thinks that the polls are undercutting him and underselling his popularity. You know, of course, polls are a snapshot in time, and you know, do have a margin in air and our Navy tool that can tell us direction. But several polls, including you know, the months that we've done this Bloomberg Morning Console poll as well as others, have shown that that Trump consistently leads him in the United States.

Biden has repeatedly said that he thinks that the polls are undercutting him and underselling his popularity. You know, of course, polls are a snapshot in time, and you know, do have a margin in air and our Navy tool that can tell us direction. But several polls, including you know, the months that we've done this Bloomberg Morning Console poll as well as others, have shown that that Trump consistently leads him in the United States.

Is there a history that supports President Biden that the Poles get it wrong and he'll do better than good the first Tuesday of November.

Is there a history that supports President Biden that the Poles get it wrong and he'll do better than good the first Tuesday of November.

So in twenty twenty two in the midterms, there was this big red wave projected and that didn't materialize. So that is sort of what Biden is basing his you know, his his hanging his hat on there of saying, look, you know the polls that we were going to lose before, and we didn't end up, you know, kind of with quite the shri lacking we were expecting. But you know, this is uh, you know, a presidential polling is different. It is a little bit more precise than you know, congressional polling, where you've got you know, a bunch of different polls, you know, across you know, hundreds of races. But this is a consistent sign and a worrying sign for the Biden campaign that he.

So in twenty twenty two in the midterms, there was this big red wave projected and that didn't materialize. So that is sort of what Biden is basing his you know, his his hanging his hat on there of saying, look, you know the polls that we were going to lose before, and we didn't end up, you know, kind of with quite the shri lacking we were expecting. But you know, this is uh, you know, a presidential polling is different. It is a little bit more precise than you know, congressional polling, where you've got you know, a bunch of different polls, you know, across you know, hundreds of races. But this is a consistent sign and a worrying sign for the Biden campaign that he.

We're going to take a poll right now, Laura, Lisa Matteo, jump in here, Lisa Matteo. Have you ever been called to do a political poll? Lord Davison, have you ever been called to do a political poll?

We're going to take a poll right now, Laura, Lisa Matteo, jump in here, Lisa Matteo. Have you ever been called to do a political poll? Lord Davison, have you ever been called to do a political poll?

Quite frequently actually really okay, because I'm a journalist, but I get I get these calls, you know, probably five or six times over the past year.

Quite frequently actually really okay, because I'm a journalist, but I get I get these calls, you know, probably five or six times over the past year.

I've never been called Paul never, thankfully, I don't think you ought unless I know who's calling me, so, Laura, So on this morning console poll, I know we've been doing it on a fairly consistent basis.

I've never been called Paul never, thankfully, I don't think you ought unless I know who's calling me, so, Laura, So on this morning console poll, I know we've been doing it on a fairly consistent basis.

Here, what are the latest highlights from this poll for US?

Here, what are the latest highlights from this poll for US?

So what the show is that this is going to be a close race. Biden is performing best in these blue wall states, so that you know, Michigan, Wisconsin, Pennsylvania, you know, he's roughly tied there with Trump. It's in these southern states. Arizona has been one where he's been been trailing Trump, Georgia, North Carolina. Nevada has been a real wild card. Last month it showed that Biden was down, you know, almost ten percentage points. This is a month that shows that they're nearly tied. So Nevada will be a weird one to watch. It's a very transient state. It's one that Democrats has consistently done well in. But you know, it's really sort of a who knows this time.

So what the show is that this is going to be a close race. Biden is performing best in these blue wall states, so that you know, Michigan, Wisconsin, Pennsylvania, you know, he's roughly tied there with Trump. It's in these southern states. Arizona has been one where he's been been trailing Trump, Georgia, North Carolina. Nevada has been a real wild card. Last month it showed that Biden was down, you know, almost ten percentage points. This is a month that shows that they're nearly tied. So Nevada will be a weird one to watch. It's a very transient state. It's one that Democrats has consistently done well in. But you know, it's really sort of a who knows this time.

Well, here's the one that kind of got my attention from the Bloomberg reporting, half of swing state voters fear of violence around the US election. Give us more on that.

Well, here's the one that kind of got my attention from the Bloomberg reporting, half of swing state voters fear of violence around the US election. Give us more on that.

So this was a you know, a little very much a sobering realization here in the poll of that half of voters are expecting violence around the election. I think we've already seen that, you know, sort of those fears be fueled with the campus protest in recent weeks as well as you know, sort of all of this the specter of nineteen sixty eight that really hangs over the Democratic Convention that'll be in Chicago later this summer. So this is, you know, clearly something that's on voter's minds. Obviously January sixth, last election was not completely free from violence there. Also, voters are concerned about misinformation. More than half of voters think that there will be misinformation that will interfere with the election. Also, foreign interference, that's a little bit a smaller percentage worry about that, but that's also on the mind of voters.

So this was a you know, a little very much a sobering realization here in the poll of that half of voters are expecting violence around the election. I think we've already seen that, you know, sort of those fears be fueled with the campus protest in recent weeks as well as you know, sort of all of this the specter of nineteen sixty eight that really hangs over the Democratic Convention that'll be in Chicago later this summer. So this is, you know, clearly something that's on voter's minds. Obviously January sixth, last election was not completely free from violence there. Also, voters are concerned about misinformation. More than half of voters think that there will be misinformation that will interfere with the election. Also, foreign interference, that's a little bit a smaller percentage worry about that, but that's also on the mind of voters.

What are we hearing or seeing in the polling about former President Trump and his trial in New York City? Is that having any impact? And then I guess the other pending litigation as well, is that impacting the numbers?

What are we hearing or seeing in the polling about former President Trump and his trial in New York City? Is that having any impact? And then I guess the other pending litigation as well, is that impacting the numbers?

So one thing is that voters are not differentiating between the various cases. They're not saying, oh, if one thing's happened in the you know, document case, I feel differently than if it happens in the you know, the store media in a hush money case. They sort of lump them all together, but it's clearly on voter's minds. The poll allows us to you know, ask these open ended questions where voters can just sort of share their thoughts. The legal case, you know, is one of the top issues that people referenced in these open end questions. Of course this was taken you know, as you know, Michael Cohen, Stormy Daniels were on the stand, so this was you know, clearly top of mind in the news as well. But it looks like, you know, we asked a specific question a couple of months ago looking at you know, Trump is convicted. Does that change your opinion and it did?

So one thing is that voters are not differentiating between the various cases. They're not saying, oh, if one thing's happened in the you know, document case, I feel differently than if it happens in the you know, the store media in a hush money case. They sort of lump them all together, but it's clearly on voter's minds. The poll allows us to you know, ask these open ended questions where voters can just sort of share their thoughts. The legal case, you know, is one of the top issues that people referenced in these open end questions. Of course this was taken you know, as you know, Michael Cohen, Stormy Daniels were on the stand, so this was you know, clearly top of mind in the news as well. But it looks like, you know, we asked a specific question a couple of months ago looking at you know, Trump is convicted. Does that change your opinion and it did?

Or is there a history? This is sort of like a Wendy Schiller question up at Brown Do the candidates poll to figure out who the most efficacious VP candidate is? Do they do a lot of work before a given presidential candidate says this is the one for VP.

Or is there a history? This is sort of like a Wendy Schiller question up at Brown Do the candidates poll to figure out who the most efficacious VP candidate is? Do they do a lot of work before a given presidential candidate says this is the one for VP.

So a traditional presidential campaign does do a lot of work and polling. We also did our own polling here on these VP candidates that that Trump is looking at. We don't have any indication that the BI that the Trump campaign is doing their own polling. You know, Trump tends to go more on his gut and you sure that these people are going to be loyal to him. But what we found is that, you know, a lot of the people that he's looking at, people like jd Vance is the center from Ohio, Doug Bergham, the governor of more Dakota. Nobody knows who they are. It's particularly in the swing state.

So a traditional presidential campaign does do a lot of work and polling. We also did our own polling here on these VP candidates that that Trump is looking at. We don't have any indication that the BI that the Trump campaign is doing their own polling. You know, Trump tends to go more on his gut and you sure that these people are going to be loyal to him. But what we found is that, you know, a lot of the people that he's looking at, people like jd Vance is the center from Ohio, Doug Bergham, the governor of more Dakota. Nobody knows who they are. It's particularly in the swing state.

So this is going to be Yeah, but young Davison, I remember the moment where Bush selected dan Quail Hooy. It was across the trading floor. The profanity that came out Lord Davison, Dan who no one knew, and it was it was not appropriate for radio. I mean, Laura, I mean, it's does it really matter anymore?

So this is going to be Yeah, but young Davison, I remember the moment where Bush selected dan Quail Hooy. It was across the trading floor. The profanity that came out Lord Davison, Dan who no one knew, and it was it was not appropriate for radio. I mean, Laura, I mean, it's does it really matter anymore?

The VP candidate like Trump, who has basically one hundred percent name id, I'm not sure that that the VP candidate is going to sway him one way or you know, going to sway voters one way or another. You know, Trump has talked about you know, potentially picking a woman, picking a person of color that could potentially help him with those groups. Oh, though increasingly the chatter is, you know, picking someone who can help him raise money.

The VP candidate like Trump, who has basically one hundred percent name id, I'm not sure that that the VP candidate is going to sway him one way or you know, going to sway voters one way or another. You know, Trump has talked about you know, potentially picking a woman, picking a person of color that could potentially help him with those groups. Oh, though increasingly the chatter is, you know, picking someone who can help him raise money.

Okay, the great brief Lord Davison, thank you so much. We make jokes about it, but she's just killing it down in Washington in the depths, getting towards this national election. This is the Bloomberg Surveillance Podcast, bringing you the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App.

Okay, the great brief Lord Davison, thank you so much. We make jokes about it, but she's just killing it down in Washington in the depths, getting towards this national election. This is the Bloomberg Surveillance Podcast, bringing you the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App.