Economic Forecasts And Fed Chair Uncertainty

through some pretty strong earnings. We've got some more retailers to hear from, but it looks like the retailers are generally in pretty good shape, the consumers in good shape. Let's get a check in with a professional on all of this stuff. Jordan's con He's the c i O of the a c M Funds and portfolio manager of

the a c UM Dynamic Dividend Fund. And Jordan's Matt and I were just talking about, you know, we were looking at Visa in the news with Amazon in the UK and visas down five point four percent on this news that Amazon will stop accepting the Visa card and I guess, uh, in the UK in January, what did you now for now? And I mean master Card is down as well, and you know it could this could spread. The idea is that Amazon and other retailers could do this to all the payment payment networks. How do you

think about that, Jordan's Yeah. I mean, you know, Visa is a stock that we've owned for years. It's a great company, great management. I think that to your point, that's the market's big concern, you know, with the early reaction in Visa and the stock being down as much as we're seeing today. I think the concern is does

this open some sort of Pandora's box? And if Amazon is challenging them first in the UK, you know, does it kind of seep into other other markets and are there going to be other large retailers that try to puff up their chest and and and challenge them as well. But like I said, you know, Visa has excellent management.

It's been a well managed company for years and years and years, and so I think, you know, at the end of the day, when the dust sellers, management will probably figure out a way to come to terms with with with Amazon. And if there are other realtailers, um, you know, and we'll see this story probably fall by the way. Well, you can still use the debit card and um, I mean, I'm sure that all of these companies, surely Visas at the forefront of looking at some kind

of crypto blockchain way to make payments fast, easy and cheap. Yeah, they've always done a good job on their acquisitions and so whether it's you know, to your point something in crypto, whether they're gonna do something with a buy now, pay later, which is you know, a big, big trend recently. Um, you know, m that's just a credit card, right, I see these buy now, pay later things, And I mean

that's just the same thing, isn't it. It basically is it's it's the new iteration of it, you know, somehow they figure out other ways to make money rather than just charging the interest on it. Alright, So Jordan's as a Visa shareholder, how do you think about that big just changing financial landscape, whether it's just more technology coming into the business. I know, since the pandemic, I'm doing a lot more my personal finance via apps and so

on and so forth. How did the Visas the master card? How do you think about that holistically? How do they adapt? Well, I think there's two things. You know that the one thing is to your point that that if things are going you know, crypto and digitally and stuff like that, that's a new trend that they may you know, dip their toe in the water, whether it's via acquisitions or

something like that. But the other big trend that's going on globally that Visa has been in the forefront of for years is the trend just away from cash and more towards digital. Right as more and more of our lives moved to digital and become online. You know, last year with the pandemic, we obviously saw a huge surge of transactions moving online. And so those big global trends are still a kail wind for companies like Visa master Card. I got this Apple watch for my birthday, and I'm

not even sure it tells time, folks. I'm looking at it now and it tells me not just time, but my heart rate, blood oxygen levels. It doesn't echo cardio Graham, etcetera. I've been averaging even sitting down for too long exactly. It tells me to stand up. I've been doing like

ten fifteen thousand steps to day. But the thing is the most fun thing to do with this is to make payments like I'm taking the subway more often because I just tapped my wrist on the thing and I go in, Or when I go to tar j and I pick up a twelve pack of pops, I just knock this on the payment thing and I feel like the kids, I feel like you gotta check it out. Do you like any of these fintech I mean, we talked about Visa being good at acquisitions, Jordan, what do

you think about these? Um, not Apple obviously, because that's uh to an app trillion dollar behemoth that we all know about. But do you look at any of these younger growth your businesses. Yeah, for sure. You know, Visa is obviously one that I've mentioned that we've owned for years. You know. We we like PayPal. That's the stock that's come down a lot that you know, is at the forefront a lot of these trends, and I think that

we will continue to do well. Um, you know, we've dipped our toe and something like a firm it's obviously had a really really big run, and I wouldn't I probably wouldn't chase it here. But but you know, to the point we were talking about the buy now, pay later, they've kind of been the poster child for moving um first mover advantage on that front. So yeah, there's a lot of interesting stuff out there, UM and we definitely, we definitely look at them all. Those are just a

few that UM we like. Hey, Jordan's Goldman Sachs CEO David Solomon said this morning at a Bloomberg conference in Singapore that market greed is now outpacing fear. Do you see that, feel that sense that in the market. That's funny. You know, we've definitely sense it in pockets, But I don't think you know, people compare this back to the late nineties and stuff, and I don't think it's as

pervasive as it wanted as it was back then. You know, there's certain pockets of stocks and you come in and you see these things running ten and and there's definitely an element of speculation there that you know, it's kind of running amuck that isn't sustainable. But there's also tons

and tons of cash that's still on the sidelines. You know, in the late nineties, you talk to anybody and they would say, if you had three thousand dollars sitting in your checking account, you were an idiot, because it could be in the market. You know, that kind of sentiment hasn't worked its way into the market today. Um. So for the people that are in the market playing, they're

definitely some elevent of speculation. But for the general public, I don't think it's one of those bubble like environment where everybody's like, I need to be all in with every penny I have. All right, Jordan, thank you so much. We appreciate that. As always during color we didn't get to talk about we didn't get talking about weed. We didn't get to talk about weed. And he went to University of Colorado Boulder, which is exactly why I'm glad.

I'm glad you realized why I wanted and I just wrote my last a tuition check to the University of Colorado a Boulder. One of the things we're waiting here from FED Chairman pal Is or from President Biden is will he keep FED Chairman jpal On as a head of the FED or maybe bring in somebody new. I know he's interviewed um Brainerd as well, and I know the markets focusing on I'm just not sure how much of a big deal it is for this market. Well, everyone we talked to says they have in terms of

monetary policy, there's not much of a difference. It's the regulatory aspect of that that makes UM Senator Warren so angry at Jerome Powell. Yeah, and consistency, the market certainly links consistency. But let's ask a professional, Phil Palumbo, founder CEO and c I O of Palumbo Wealth Management. He's been doing this wealth management thing for decades at ubs and Morgan Stanley and mother Meryl. Uh. Phil, You've seen

FED chairman chair people come and go. How concerned are you about You know what we might hear from President by in the next next few days about FED Chairman Powell or someone new. The concern more is about inflation. So whether in my view with Powell stays in there or brainerd comes in there and the open seats that have become available over the next couple of months, either way, I believe both are dovish and a dovish FED governor

as we have right now with with Powell. Even if and it comes in, it means inflation can can continue to run hot because most likely they're gonna tame rates low. And if that's the case again, you know just inflation is going to start to continue to feed on themselves. So I think either way, whether it's BRAINERD or whether it's power or progressive, tend to fill up those seats. You'll see more bank regulation, and I think you see

rates lower for longer. I mean, what can they really do about inflation anyway, other than you know, if they raise raids, they kind of stunt the economy, and that's not what you want, right. I disagree with that. Right. So, in terms of FED power and many headphones out there, headphone manages out there, you know they have to act sooner than later, right, So it's like a ballberell approach. If you don't do it now, you get hurt later.

If you do it now, you get hurt today. But it's almost like if you let this thing continue to run as we're seeing right now, it just feeds on itself. We've seen that in the seventies. I'm not suggesting we're going into the seventies, but inflation can really feed on itself. Look at retail sales numbers yesterday, write some consumers are starting to get concerned about inflation and cost So it's this pull forward demand that we're seeing that's raising prices

and it doesn't look like it's going away. So if you keep rates where they are, if you keep continue to be a Dover's fed governor, it only exacerbates the problem. It doesn't make the problem better, because eventually inflation gets to the point where it'll cool the consumer because it's a direct tax on the consumer. We know that of spending comes from the consumers in terms of g d P. So if you start to tax them in terms of gas prices shout the cost food prices, that's not good

for the economy. So it's a your damn if you do, and your damn they've done. And I totally get it, but I think they that they have to start taking the Hawkers stance. And if Brainer gets in there and Progressive fill those seats, it's just a continuation of this Doverish stance, which I believe can hurt the economy along the term. But Powell is going to be just as Dovish right, So it's not like um sticking with him is going to do much um to to to suthe

your fears on inflation. What what would uh what would you like to see? I would like to see them start to paper even sooner than June number one and number two, raise rates, surprise the market, right, raise rates in in uh at least surprise market doesn't seem like something the Fed does anymore. That time, it's I think, you know, what we've heard from a lot of folks when me think about you know, rates and maybe just this market in general, is what you don't want to see,

is the Fed surprise the market. That could be something given where we are evaluations, that could really be problematic for the market. But but you're not as concerned about that. No, I am, of course, right, I mean, and I get it, And I've been continuous, continuously saying that I believe we're in a bubble, especially in technology, especially with the cryptocurrency

and n f t s and all the speculation. That's because there's been a misallocation of capital as a result of the Federal Reserve and what the federal fiscal policy has done. So now valuations got too extreme levels. And I get it. It's listen to the damn if you do damn if you don't scenario. But if you don't do it now, it's gonna be even worse later. And

that's the big problem that I'm concerned about. The other part two is when you think about people talking about inflation being transitory and nod in that whole argument, it's more about is demand transitory? Right? I think demand maybe trans story because it's pulled forward effect. And when you have a pull forward effect and you have supplies to start trying to keep up, then you have companies creating

more capacity to try to keep up with demand. But if all of a sudden demands slows down, you have all these companies with this extra capacity extra hiring extra employees, and that's like a classic recession like we saw in the seventies. That could happen. So listen. It's a very challenging situation. I think federal power fed Paler did a great job with COVID stepping in doing you had to do when I get it, Um, But now I believe it's time to move faster than he's saying. What do

you deal with you with client money? Then? Um, Paul, If I Phil, if I came to you with some fresh cash, where do you put it? Gold? Golden commodities. So I've been consistently saying, you know, when you have inflation acceleration like we're seeing. So if you go back since nineteen. Any time inflation has accelerated, gold and commodities

have been an outperformer. Gold this year has not been an outperformer because rates have gone up, but since inflation and CPI numbers of recent i've been north to five six percent. The real return now for bonds are negatives. And that's why you're seeing gold stought to to break out here from a technical standpoint. So I think gold could have legs and and commodities will can still have and could still have legs. So that's why I would

position and rebalance into all right. When I hear that, Phil, I have to ask a question, given where we are today, when I hear commodities and or gold, how about crypto? Um is? How do you think about that in the context of some people say it's a store of value like gold, Crypto doesn't even know who they are, you know, in terms of is it an as a class? Is it a currency? And is it inflation? Areas it deefinitly in terms of investing, when to invest it's so new,

it's it's complete, complete speculation. So I just don't think anybody can really answer that with complete confidence. You know, in my view, I'm concerned about that because what I tell a lot of people who invest in crypto and n f T s and they made a lot of money, and that's great, and I'm very happy for them. But the question I have for them is at what point are you going to sell all these profits you made?

And they don't have an answer for that, and they say, like I was just talking to somebody this morning, said, oh, I bought something, it's at ten dollars and I was going to sell it at ten, but I think it goes to twenty. And it's just like this continuous cycle that people jump on and in the but in the end, it's going to eventually collapse, just like markets collapse, right, they don't just go straight up. But so if you

never sell any collapses, you made no money. So but you think it's all about the greater greater fool theory. You don't think that there's any value there. I'm not saying there's no value there, right, I'm saying that there. I think it's for real because it's three trillion plus market. I don't know if it's going to be a bigcoin in the future or theory M or some other cryptocurrency. It's complete speculation. So I think it's for real. But I think it's time for investors to wake up and say, hey,

you know everybody's hopping on this bandwagon. You don't want to follow the herd. Let's take some profits here and if it comes back down again, we could add to the position. Right. The same thing with technology. I mean, nobody can dispute that we're in a bubble in terms of valuations, but it's time to take some risk off the table, and there's nothing wrong in doing that. Phil, thanks so much for joining us. Always appreciate getting your thoughts.

Phil Palumbo, founder CEO and ce IO of Plumbo Wealth Management, giving us his thoughts on the market and my takeaways, Matt, Gold and commodity is very interesting and in uh and but certainly in line with an inflationary outlook. All right, let's get over to Katie gray Felt. She is our cross asset reporter here at Bloomberg, and I guess in this case it goes across from bonds two stocks too. Crypto.

We've seen a big drop in Bitcoin yesterday, dropping um I guess, the most in September, falling below sixty dollars Ether, touching its lowest level this month. What's what's behind the drops, what's driving the fall? It's a great question and sort of the beauty with cryptos that you never really know. Uh, some theories that I heard yesterday. I mean, you did see the infrastructure package signed into law on Monday, and that has tax reporting requirements for broadly to find crypto brokers.

This was a big issue for the industry back in September. But that that was known, so I wouldn't put a lot of weight in that, but it was named. The other thing could be technicals, which is basically what you

say when you're not really sure. But if you do look at the technicals, especially for Ether, I mean there were a lot of indicators from Fibonacci levels to candlesticks, all those fancy things that basically all told you the same thing that you know, this rally was looking particularly stretched,

particularly when it came to Ether. I mean, let's not forget that Ether it's up what almost five percent this year, so it's probably not surprising to see that cool a little bit, you know, I think crypto's mainstream when Bloomberg Radio has a weekly sponsored crypto report, But I'm still surprised Katie that a lot of the veterans on Wall Street, the CEO is, whether it's a Jamie Diamond, it just doesn't feel like they have fully embraced this asset class

at all. They'll say, oh, we're providing some trading facilities for our clients if they want to trade in crypto, will be there, But it doesn't feel like they've really embraced it. Is that. I mean, Diamond says it's worthless, worthless, so I guess he hasn't embraced it quite yet. No exactly, but you know, I do see stories that they're staffing up their trading operations and things across the street. But again, as Matt was saying, it doesn't feel like it's been

embraced as a real asset class. Yeah, well, to your point, I mean the tone from the top, but a lot of these banks is very negative. I mean, we could run through that, but still they're kind of these banks were trying are basically have to hold their nose and offer these services because the client demand is there. I mean, you can see that down to the level of E t f s. But it was interesting that you also heard the UBS chairman basically warn about you know, the

staying power of crypto. So still a lot of skepticism. But I think the clearest indication that this is, you know, turning more mainstream, is just how worried the SEC is about it. And it's not just the SEC, it's the Treasury, it's the FED as well, particularly when it comes to stable coins. So I think that's a pretty strong sign it's big enough to worry about. And we're starting to

see Gary Gensler, I mean, he understands and stuff. The new chairman of the SEC taught a course I guess at M I T and yet he and yet they allowed crypto e t F a crypto future and not an underlying I still don't understand why they made that decision. Was it pressure from Wall Street because they needed to deal in some kind of product? If you're gonna allow futures, why not allow the underlying I don't understand. It all

comes back to control. I mean, we know that Genzler, in particular, he doesn't or he wants more control over the crypto exchanges, and so the logic there and letting the futures e t F launches that those options they trade on the CMME. That's that's regulated, whereas you know, just physical bitcoin, they don't really have any control over that.

And of course now we're doing all these gymnastics and trying to point I know, right, but I mean, now you're in this situation where these funds have to pay roll costs, they don't perfectly track the price of bitcoin UM. So we're in a situation where is this really the best for investors? A lot of people would tell you know that if you truly want bitcoin exposure, you should just buy basin exactly, if you want bitcoin exposure, why would you wait around for an e t F Who cares?

I mean, if you're buy bitcoin, go on corn bait coin base and get it corn based. I would like to go to cornas oo. But if you have mandates that prevent you from buying actual physical bitcoin or trading bitcoin derivatives, this does make sense for you. But I mean, we did see huge demand for the first of these products to launch about a month ago, but it's really really trying, you know what. I caught my eye, uh

and I talked about those Paul already, Katie. When we see Amazon start to kick off payment UM companies like Visa, for example, this is the beginning of that, and eventually some blockchain technology is going to replace that. Amazon is going to say from now on, eventually we're going to

accept so and so crypto coin. Maybe not Bitcoin or ether, maybe not finance or doge, but it's going to be something because they don't want to pay two percent, three percent, four percent to Visa master Card m X. That is when it truly becomes mainstream, I would argue. And maybe to your point, it's not any of the existing coins. Maybe it's the digital dollar. You know, we know that the fact Amazon creates its own the Amazon coin, you know, it could it could happen and they not have done

that already. Hopefully someone from Amazon is listening, but I'm sure we will see. We are seeing a tiny uptick in uh, you know, actual businesses accepting crypto is payment, but for now it does just seem to be a vehicle of speculation at this point and trading as well. Katy gray Fail, thank you so much for joining us, Katie's Cross Asset reporter and Bloomberg Quick Take co anchor, joining us here in a Bloomberg Interactive Broker studio giving us a weekly crypto report. How cool is that man,

we're talking crypto. We talked about it every day. It's so funny. She goes from the Treasury auctions, which are you know, old and conservative and so easy to put your finger onto, this crypto, which is so that's cross asset.

Thank you very much. All right, talking about these markets, Matt and a lot of folks will say, boy, they froth the look no further than some of these recent I p os maybe the electric vehicle I p o s, Lucid, Rivan, things like that, not to mention the daily fluctuations of Tesla as a clear example of, Man, this market is really frothy. Let's check in with somebody who's done this for a time or two. Louis Navallier, Founder, chairman, CIO

and chief Compliance Officer of Navaller and Associates. Louie, thanks so much for joining us here. When you see a Lucid, when you see a Rivian and the big pops they have and the huge valuations that they demand in this marketplace, what does that tell you? Don't, by the way, Louie, don't we just do navalier? Isn't that navalier? That's great? Navalier is how we say it in America and nage is how we say in Montreal. Okay, okay, anyway, Um, yeah,

we have a bubbles that have to be pricked. And um, obviously the there's a lot of Tesla people, there's a lot of E. S G investors that are all excited about Ribbean and um Lucid, as it should be because the vehicles are getting rave reviews. But um, we've had too much too fast, and obviously the venture capitalists and the insiders will be cashing out as their stock becomes unrestricted. So you know, it's it's kind of like Quantum Escape was a very exciting stock and then they unrestricted a

bunch of stock and the collapse. So that's what's going to happen here. I feel you on this. Having said that, I sure wish I bought Tesla ten years ago, and there's no reason that I can still I still can't understand the valuation. I don't know why Tesla is a trillion dollar company even if they sell a million cars a year, which they don't. Um, it doesn't make any sense to me. And nonetheless that stock is a huge winner. Well,

Tesla did something very unique. Okay last year, if you went onto YouTube there was all these Tesla fanatics pumping the stock, but they were also getting paid to pump the stock. They would get free power walls, free model threes, and they gave away over eighty of those quarter million dollar roadsters referral credits. Tesla's stop that at the end

of last year. So now when you want to YouTube, what's happening is, uh, those Tesla fanatics are now sponsored by Voltiwagon Group like e for Electric or other um some of the Chinese e V companies. So Tesla kind of lost a lot of its cheerleaders when it stopped paying for the favorable um press. All right, look, let's keep on this the e V discussion here, because we just got finished with Cop twenty six over in Glasgow talking about phasing out fossil fuels, phasing down, phasing down.

I guess pa down that's the problem, right They nobody's willing to phase it out down exactly. So how do you think about that, Louis, as you think about you're investing, is this something that's in your strategy? Well, unfortunately, I'm from Berkeley, California originally, and I can tell you that what they did is totally delusional. You know Berkeley is antinatural gas. You cannot put natural gas in a new

home in California. You can't even get a natural gas generator unless you're a commercial business of some sort um, so you have to do the walls, which helps in phase energy and GENERAC. But uh, the war against natural gas is stupid. We will still need natural gas in two thousand thirty five. And the fact that the US pledged and all fossil fuels for electricity generation is just

not gonna happen. It's not gonna happen. And one of the things that most annoying is when they did the Federal Drilling Band, which of course was over written by a federal judge, but they're still hostile to drilling on federal land. We're just pumping out methane and UH and in the atmosphere because the wells were abandoned. Okay, now the big energy companies cap them, but the small producers don't.

And so one of the plans and build back better America's we got a cap the wells that wouldn't be leaking if we didn't ban the drilly on total land and most of that into Mexico on the premium basin. So what do you got. What do you guys do at Navalier in terms of energy? Well, we we do like a lot of the midstream folks. And uh, you know, energy is a cyclical business. Uh, it doesn't normally go up this time of year. But Europe got caught flat footed.

And of course you know Germany's delay of the Russian pipeline this week it's and everything's soaring. You know, Europe's burning record coal right now. And so they're a little bit of hypocritical too. So the thing that annoys me the most, I'm sorry to be so passionate about this, is that that Russian natural gas is five times dirtier than our natural gas. You know, we clean our natural gas, Okay, So um, you know there's a lot of there are

a lot of hypocrites in Scotland. I have one of my associates there and it was it was interesting to get the reports from the field. Never apologize for your passion, Louis, but I'm sure that making money is probably up there in terms of the things that you feel strongly about. So what do you do right now? As we've run up so far, so fast? And you know, David Soloman from Goldman's actually just told our Francine Lacroix that he thinks greed has overtaken fear in this market. Um, how

do you feel about the SMP five? All the major industries are overbought, but we're gonna stay overbought because November is such a seasonally strong month. This is the week to consolidate. Monday and Tuesday should be up. I don't care about the holiday training next Wednesday and Friday. Um, but Novembers of the season strong month, December seasonally strong will because it is November, and then January will be great because we go SURGI of all you and new

pension funny. So the most likely time for correction is going to be uh sometime in Tybulary, but we're gonna stay overbought till then. But the small caps have done this month is just nuts, you know. You know, Citadel runs the markets nowadays, and Citadel cannot handle order and balances. So you know, Redd and Robin had proved that how

to squeeze squeeze algorithms. Um, you know, I'm very familiar with this because I got a lot of subscribers when I recommend think things are popping too, and even you know, twenty billion dollar sized companies. So I'm uh, the out goals cannot handle volume anymore. So as long as we have these order and balances in this euphoria, we're going to stay overbought and uh, but obviously you have to correct once a year, so February is the most likely time.

It's been a while since this market has had a qurection, and it is also calls for a lot of folks saying, oh, it's time we get one soon. And Louis Navalier, founder, chairman, ce IO and chief compliance officer at Navalier and Associates joining is here, uh looking for more overbought in this equity markets, perhaps a correction coming in February. With my takeaway, there we have mixed markets today. Thanks for listening to

the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three. Pet On Ball Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio