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Bitcoin it gets your attention, folks. It is down another one point eight percent today, eighty six thousand dollars. The high just you know a month, month and a half ago is one hundred and twenty five thousand, so we got a north of a thirty percent drawdown in bigcoin. It's a commodity to me. I don't know more sellers and buyers. Let's chicka with Mike mcloughan. He covers this stuff because he's a commodity strategist for Bloomberg Intelligence.
Mike, you've seen.
Commodities trade up and down for decades. Here put this bitcoin moving context for us.
Well, Paul, I like the way you started. It's a commodity to you, and I used to think that too.
Now to me actually less of a commodity because in all commodities you have an underlying the basis, and you have supply and demand fundamentals and Bitcoin there's millions of competitors and there's no underlying to it, So I'm worried and doesn't have a practical value other than to trade and hold value at least gold.
This looks pretty and things.
So I'm afraid what's happening in bitcoins are seeing that overdue purge and those millions of cryptocurrencies that track nothing, it's pulling out Bitcoin. They're probably going to have to head towards zero. And the key question is what do we do for the end of the year. Can we recover from these levels? And I think it's unlikely we do, which means the whole system might be coming down into maybe a grinch is going to win Christmas.
Wow, that's quite a call. Yeah, the whole system coming down.
I mean, for now people are saying that there's we're shaping up to be the worst November for bitcoin since twenty twenty two, which was around the time that saying Bankmin Freed and his company, you know, basically fell apart. Talk a little bit about the Bitcoin ETFs and how demand and inflows into those probus drove a lot of the rally in spot baitcoin overall, and perhaps are removing a big source of support right now.
Well, I'm glad you went there, Scarlett, because my primary goal the last few years one Bloomberg we launched a Bloomberg Galaxy crypto index. Idea was eventually for the whole space to be tracked by widely by ETFs, including that index, and once we got there, I figured and put in a plateau. Now we've gotten there, and I think it's plateau.
So basically we've gone from the geeks and the insiders who made a lot of money pushing it over to retail and the big picture people want to catch up and chase the performance, and they're finding out it's poor performance near a peak.
They're piling on.
The biggest ETFs. Ever, it's classic peak bubble. So if you want a bubble in all markets, it starts with cryptos. Maybe not equities, but it's as bad as it was for dot com bubble in nineteen ninety nine.
Now the whole thing's going back downward, and by the end of the year should it recover.
I look at it as we need to just purge millions of these things that track nothing, that are worth billions of dollars. One good example is number nine on the Bitcoin cryp pages. Dosee coin, it's worth twenty one billion dollars, attracts nothing.
It was launch as a joke.
Wow.
So we had Eric baoutchunasan just earlier and he said most of the ETF buyers are still in it. They haven't sold about five or six percent of sold or seen outflows.
Out of the ETF.
So the ETF flows are kind of hanging in there at this point.
So off to see, do we.
Know who is selling?
Mike, Yeah, well, certainly some of the OG's people have been along in for a long time. Once they heard that Trump was so involved, they wanted to get out. But Eric has on been on top of this. He nailed it very beginning with the launching the ETF. The problem is, I hear the average price for all ETFs, and since they've been launched for bitcoins around eighty nine thousand, we're below that.
So we're getting below there.
And also they've got double the vow till they what they left they left the stock market, they get better.
Performance, they're getting worse. This is classic peak stuff. Paul.
I'm worried that it's just gonna I'm worried about that Grinch effecting to the end of the year when everybody expects, oh, Santa Claus is gonna come, but Grinch takes all Grinch shows up.
Okay, Mike, But the president and his family are very much invested in bitcoin, in the crypto industry at large.
Is there not a Trump put here?
Well, that's the key thing. What are they going to do to make a difference.
Strategic Bitcoin Reserve though that was floated last year didn't work out. We have the President's sun coined for it to go much higher, and the future we might have laws against those kind of things because there's a vested interest. I don't know how it's going to work out, but it was that Fostian bargain. I'm worried about that just in bloting now. And the key question is what stops it?
What are they going to do to make it change?
The bottom line is there's so many millions of these things that are just pine and sky speculative digital assets.
They just need to purge and then we'll go back.
And I'm afraid that means Bitcoin's first stop on this move is really towards fifty thousand. It's got to really end the year up on the year to show anything other than that, I'm afraid fifty thousand to the next key level, which means Domino's tumble, and the questions what can they do to make a difference, Maybe get the Fed the ease, which means more inflation, which means they're not going to get elected.
Right, Well, all of that, the macro headwinds are the same as any other acid classic.
Yes, in many ways.
Mike mcgloan and Bloomberg Intelligence senior commodity strategists joining us on bitcoin.
Stay with us.
More from Bloomberg Intelligence coming.
Up after this.
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Let's talk to Sam Fazzelli because it's Monday, and that's what we do. We talk healthcare, and you want to talk healthcare. Talk to Sam Fazzelli. He's over there in London. I think I haven't checked at these badge I mean, who the heck knows what these people over there in London. But he's the best there is out there folks on global healthcare and we appreciate getting a few minutes of his time. Sim this obesity story is become the story
for your world. I mean, it's almost like forget about some of these other issues you guys have been dealing with, what you know, other diseases and therapeutics and so on. It's all about obesie drugs. Talks about Novo Nordis start taking on engineer.
Yeah, hi Paul, and just for the actuality, I'm in France at the minute, see told, but only another twelve hours now. Today's news from NOMA. Notice is not about OBCD. It's about a drug semaglutide in a pill form that they've tested in Alzheimer's disease. And the theory was, and there was some evidence that people who were taking the very first version of the GLP one brug so victosa or liro glue tide, they had a lower risk of developing Alzheimer's when you looked at historic or rect prospective
data and there's animal models, et cetera. So they thought, but it's worth a trial and it didn't work out. They said that they're seeing some impacts in some biomarkers et cetera. And we'll find out next week what biomarkers. But the trial didn't work out. And the question here is was the theory wrong?
Oh?
Is the drug not good enough? Is it pill enough? We know the pill doesn't do as well in obesity as the injection. Should they have tested the injection?
That's a good question.
And you mentioned that the ingredient here that we're paying attention to is some maglitude, which I hope I'm pronouncing correctly there. Does that mean that this ingredient and Alzheimer's are just a no go from here on out? Or does there need to be more testing before we can determine that?
Yeah, there needs to be more testing, But who's going to do that? I mean, having failed, now, who's going to put the money into test it?
Now?
Lily does have an Alzheimer's business in a completely different with different set of drugs, and they have a more punchy product once weekly with a relatively easily administered pen. That would be interested to see whether that.
Helps and you know, so that you get more much more drug in the body, or maybe redesign it a bit. So it really does depend on how much appetite for risk these companies have and literally now with the just literally just over trillion dollar market cap, maybe they should give it a go. You know, it would be magic if this thing, It literally would be magic if this thing.
Just helped so many different diseases.
Same talk to us about just the market for dementia. Alzheimer's is one one part of it. I would think that's a it's a big market and be it. It's got to be a growing market with people living longer. How do you guys think about it and how do you play it?
If you're an investor, Yeah, it's it's It is a significant societal issue number one. And you know, I think there are many, not many families who would say that they haven't experienced it. They have all the people in their in their extended family. So the market has humongous potential. But you need drugs that actually treat the disease. Remember, by the time you have Alzheimer's, I.
Eat a full blown dementia of the Alzheimer's type or other types. It's a bit late. That means that a lot that's already happened. So you need to go early, and early it means long, expensive trials and Lily is doing that with their assets, So fingers crossed, we'll find out in the next two or three years where they're going early with these assets. Rush is doing it too. It would be a beneficial.
Right, I mean, the test with the pill form of ozambic was definitely a lottery ticket. If it worked, great, If not, we're back to the drawing board. Are there any effective treatments right now against dementia or Alzheimer's?
Well, by effective, I mean it's tough to say, but there are drugs that lower this thing that is viewed as a critical part of the Alzheimer's disease, which amyloid plaques in your brain. If they do lower it. Lily's got that drug, Biogen's got an equivalent drug. Rushi is trying a similar approach. And you do slow down the degeneration. You don't stop it, you slow it down. So what we really want is to stop people getting to that degeneration.
Try and get them before they have full grown Alzheimer's or dementia, so that's called mild cognitive impairment. Try and slow that down to give them another ten, twelve, twenty years of dignified life.
So where do you think we are on a time frame for something like that same is that measured in a couple of years or more than that.
Well, so Lily is literally trying that and we'll find out whether and they have the better rug in this space, so we'll find out whether in the next two or three years. They remember, these things are trials that need to be run until you start seeing a difference. They get that to that point, and of course then society has to decide, well, how were we going to pay for this?
How many people? Because there's a large market, right, how many people are we going to want to treat with the prices of these drugs whatever they are, even if it's ten thousand dollars a year, right, and they are on their way to becoming worse, and we want to slow that down. You have ten million people. This could be similar in terms of value to the obesity market, but you need the drug to do that. So let's
let's wait and see. And RASH has got a new way of trying to do it, and they're going to go again and also to phase three to test that out.
All right, Sam, thanks so much for joining us. Always appreciate getting a few minutes of your time. Sam Pazzelli, director of Research for Global Industry and senior pharmaceuticals analysts Bloomberg Intelligence.
Stay with us. More from Bloomberg Intelligence coming up after this.
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Scarlett.
One of the I think the questions we get, or maybe discussion points we have over the last month or so month and a half has been is this a bubble? Is this an AI bubble? And I don't know, but I mean the people are spos after this fact, after the fact exactly right. So, but somebody wo's supposed to talk about it like present tenses. Michael Casper, Senior US Equity Strategies for Bloomberg Intelligence. So, Michael, I know you're
having these conversations with your clients here. What are you saying bubble, no bubble as it relates to AI.
Yeah, I'm pretty much all the signposts for a bubble that we have identified so far are pointing towards no bubble. Right, So if you look at the valuation picture of say
the MAG seven. So the hottest stocks today versus the hottest stocks in two thousand, we're talking they're trading out about half the multiple, Microsoft, Cisco, in Telendell, the four Horsemen, and the Internet bubble we're trading at back at the top of two thousand, and in fact, the MAG seven's multiple has come down since twenty twenty one, so they're growing into their multiple. And you've obviously got a ton
of fundamental support here. Earning's running well faster than normal at the end of these multi periods, so it's really pointing towards no bubble at the moment.
Okay, that might be the case for the Mag seven, for the companies at the heart of the whole AI revolution, but what about the ones that are kind of on the periphery, on the side, and the profitless tech companies that we talk about that are getting wrapped up in everything.
Yeah, so it's actually interesting to bring up profitless tech. My colleague and Bibredherty, she does thematics for us. She has a Thematics AI universe, and we've actually scanned that entire universe. And we're talking large caps, small caps, microcaps, there's three companies in there that are unprofitable in the entire AI universe of you nearly fifty companies, So there's really not a lot of unprofitability, especially within the core
AI themes. And and that's another just feather in the cap for this not being a bubble.
How about the big tech companies using debt to fund a lot of Does that get raise the.
Radar at all?
Yeah, so it's interesting that they might start dipping into debt markets.
That was something that I.
Read this morning on the terminal actually, but so far, if you look at leverage ratios, right, so total debt to market cap or total debt to EBITDA, those are actually significantly lower than where they were in two thousand, and we've frankly been delevering pretty consistently throughout the post grade financial crisis period. So leverage is actually below norms for the s and P five hundred for the Russell
two thousands, it's pretty much closer to norms. So I'm not that worried about debt financing yet, right, So there's plenty of room for companies to take on debt here.
Why are investors still so worried them? Why Are they convinced that this is not sustainable?
Yeah, I think it's a bit of a paranoia.
Right.
We've gone up very far, very fast, and we did look out at some previous melt ups, So we're talking in the end of the Great the lead up to the Great Depression cycle, the Internet bubble, those are the classic melt ups. Our returns have been pretty fast, but they're still falling well short of that.
So I think.
Investors are a little bit worried that the returns have been so violent and so quick, and that's adding to a little bit of worry. And of course worry is a good thing, right, So bubbles usually happen when nobody's worried about them. I like to think about two thousand and people always talk about, Yeah, my taxi driver was telling me about some Internet stock. We're just really not having that right now. There's still plenty of worry in the system, and that's a good thing.
Orble market earnings pretty much done with the third quarter here, Are they enough to support this marketplace?
Do you think?
Yeah? I think earnings were phenomenal.
Right.
There were some obviously bumps in the road on a company by company basis, but again we pretty much doubled the pace of what consensus expectations were. If you look at twenty twenty six expectations, those are holding pretty firm. We're looking at about thirteen percent earnings growth for the year ahead, again comparing that to previous bubbles. Even that's
significantly higher than what we saw at the end. You know, bubbles are driven by FOMO, not fundamentals, And certainly consensus expectations are strong, and they're actually even strengthening in the Russell two thousand, which has been an unloved group for quite some time. So things on the fundamental side looking pretty decent here.
What about on the technical side.
I keep reading about how the S and P five hundred is still below it's fifty day moving average, it's short term trend line, and it briefly fell below the one hundred day moving average on Thursday.
And because we are not going to get.
Any fundamental data on the economy until after the FMC just earning season is over, there aren't a whole lot of catalysts from here on out until maybe next year.
Yeah, So one catalyst I'm looking at pretty intently is going to be the holiday spend. Right, Like if that comes in a little bit better than we expect. That could be another catalyst for stocks. But certainly you mentioned the FOMC decision. I think a lot of this pullback has to do with Powells hawkish comments about two weeks ago. You know, people just expecting a little more on the rate cut side than what we're.
Going to get.
And again, this just looks like a textbook pullback.
Right We're down what maybe four or five percent from all time highs on the S and P five hundred on the rustle. It's approaching correction territory, but still nothing really going as far as a bubble bursting.
Are you looking at bitcoin and crypto at all insofar as whether it's influencing equities or whether equities are influencing bitcoin, because there's a lot of talk about the linkage between tech stocks and bitcoin.
Yeah, I think bitcoin is a good gauge of risk tolerance. I don't know about necessarily a fun mental linkage between bitcoin and stocks outside of.
Maybe you know the AI names those leading the corners.
I think, you know, stocks are the dog that wags the tail, right, and crypto is the tail here.
But I think crypto is really kind of showing.
Where the concerns lie in the equity markets and the risk is in the equity markets. And again that seems to be more with the Fed. What is the Fed going to do? Obviously Fed raycuts would be good for bitcoin. Everybody thinks it's it's pretty stable. So I think that's really showing where the pressure points are for stocks.
All right, Mike, appreciate it as always. Michael Casper, Bloomberg Intelligence Senior US equity research strategist, giving us lots on these markets. Here, Ai bubble, you know something, so we'll keep an eye on the market. Is certainly trading higher today with the S and pup one point four percent, in the NASDAK up two point three percent.
Stay with us. More from Bloomberg Intelligence coming up after this.
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All right, let's go switch gears a little bit.
President Trump.
When he came into office, he was wildly considered to be a deregulatory president. Will allow a lot of industries maybe to consolidate. One of those industries is the broadcasting industry, the radio and TV business. But he was out with a tweet recently saying he maybe doesn't support that anymore, and that was a big u turn for a lot of people, particularly in the television industry. So we want
to go to the expert, Matthew Shettenhelm. He is the media litigation analyst for Bloomberg Intelligence.
He's one of the best on the street folks. But his credibility with me took a.
Big, big hit when I found out he does not carry cash, and for an old banker like me, who's got a wat of cash in his pocket all the time, that was a problem.
But we're still credit cards and therefore he's.
Actually just the younger generation Daniel Cash. They just don't do the cash thing. He Matt, how much of a surprise was that President Trump tweets out that maybe he's not behind consolidation in the TV industry.
You're never going to let me, let me live that one downfall. But so it's a moderate surprise. So it's not a complete surprise because Newsmax has participated before the FCC and has been one of the few voices that said, don't do this, don't deregulate this space. And what you really see here is President Trump latching on to an article written on Newsmax's platform opposing the easing of this
national ownership cap. What's in play here is that there's current FCC regulation says no company can reach more than thirty nine percent of US households, and companies like Nextstar and Sinclair want to go way beyond thirty nine percent. In fact, Nextstar has a pending deal before the FCC. They just filed their application on Thursday or Friday last week to acquire Tegna that would take them to seventy eighty percent of the country, and it depends on the FCC.
Deregulating in this space.
So Trump latching on to Newsmax's opposition because he's concerned about the TV networks growing larger is a concern.
It's a real risk.
I'm not convinced yet that it's going to lead to real FCC policy. I think this FCC wants to deregulate in this space, and I think there's going to be a pushback against Trump's view on this.
Okay, So the FCC is headed by Brendan Carr, who's been very active in making sure that he's out there doing the president's bidding. Are you saying that Brendan Carr is going to defy President Trump?
Yeah, so that's the big question here. The FCC used to operate as an independent agency, meaning even if the President had a view on something, the FCC could chart its own course. That doesn't that's not going to work anymore the way this FC is operating. If the President takes a firm view on something, the FCC is not going to defy it because effectively, the President can fire the FCC chairman then and you know, there's no no
future job prospect if you defy the president. What I'm not convinced about is, you know, this was one social media post from President Trump, and you know, talking about concerns about letting the broadcast networks ABC, CBS, Fox get bigger.
What I think there could be.
Now in in you know, on in back channels, is some education from the FCC to the White House that says, hey, easing the national ownership cap it would let Sinclair Next Star get bigger, probably, but it doesn't necessarily mean the broadcast networks will get bigger. There's still an independent check on that even if we we ease this this cap. So ultimately, if Trump is against this, the FCC is
not going ahead with it in my view. But I think there's still room for for Trump's position to evolve on this.
So, I mean, the reality is, I mean, this is an industry, the broadcast television industry that is arguably on life support vis a VI forget about cable television, which itself is on life support. They survive that on slot. Now it's just all about digital and social media. And I would think the industry would have an open would have an effective argument, not just to the DOJ, but to the president as well.
Absolutely.
I mean that's the case that the National Association of Broadcasters has made to the FCC that these ownership restrictions, you know, which come from the nineteen seventies or even earlier than that, really make no sense in the world we live in today, where so much video that is
consumed doesn't come from from broadcast. It comes over the Internet, and there are no artificial caps on how much those companies can reach, and broadcasters are left to try to fight with one hand tied behind their back with these these you know, ancient FCC rules on the books, and the Republicans at the FCC, Brendan Carr included, strongly agree with that message.
And so it's going.
To be I think a little bit of a communication effort that needs to happen between the FCC and the White House too, And the real question will be how does that play out. Does Trump's social media post actually translate to real policy.
I'm not convinced that it will yet.
All Right, Matt, appreciate it as always.
Met Chetninghelm, He's a media litigation analyst Bloomberg Intelligency space down there in DC.
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