NFL Advertisers Will Have an 'Ebullient' Year, Porter Bibb Says

are a bunch of deals that came out. What's catching your eye today. I think that today, at least from the market's perspective, is just it's it's quiet still, it's low volume, it is a sort of stand still that it's kind of gripped equity markets at least when we look at risk assets, I think it's probably a little bit more interesting, sort of your neck in the woods. It's just what's happening with bonds, what's happening with yields?

And I think that also spells a story for stocks as well, because in the past week there's a little bit of reversals. Our story that our team put out on Friday that kind of took the week in recap and that I think says the stage for this week is large about some of the rotations that have occurred within the market. This is largely been a story of the past year, which is changing perspectives on what's going to work, what's going to work based on Washington, what's

going to work based on economic growth? Um, right now, I've got a few interesting notes in my inbox that our story of homing in on the idea of a potential value stock rebound based on higher rates and what happens when the rest of the market starts to view higher rates and the likelihood of that beginning to happen.

What kind of companies do go in? And there are a little bit of different types of companies well, and I think that a lot of the muted volatility that we're seeing in markets is partly because we're just getting so much noise from Washington, d c UH and the latest I want to uh have some insight from Porter Bibb, who's managing partner at Media Tech Capital Partners, which is based in New York and and Porter bib is known as being the first publisher of Rolling Stone Magazine reporter

Um we Over the weekend, President Trump diverted attention away from his tax plan and put it toward whether or not NFL players stand for the national anthem. He absolutely limbasted some for kneeling in protest of the pervasive racial discrimination in the country. He was saying that that's disgraceful. As a result, the team's kneeled even more. What's your take on this and at what point our advertisers going to have to weigh in on this? Uh sort of

odd controversy on. On top of criticizing the activists who were kneeling, he also criticized the referee referees for taming down the game and taking away some of the violent hits that he demonstrated by banging his fist together in a typical Trumpian manner. But the reality is, after he said,

the ratings of the NFL are way way down. Last year was the highest NFL rating in for the season in history, and except for the two hurricane weekends of Harvey and Irma, they're running ahead right now of last year. So it looks like NFL ratings and viewership is going to be very very strong and not way way down.

Advertisers are sitting tight because two thirds are more of the NFL most advocate uh strongest fans are basically in the Trump camp in terms of activism, mixing with with their their sports, and advertisers are going to stay very silent, but pay attention to the ratings, and the ratings, as I suggested, are holding. So NFL advertising is going to be very bulliant this year. Is your sense that viewership will go down? I don't think so. I think it's likely.

Yesterday they had an all time record rating viewership because everybody wanted to see what was going to happen with the with the kneelings. It started with the Jaguars and Ravens in London and Saturday Sunday morning and continued um right through the evening. Um ratings are are holding, and advertisers respect the ratings more than they respect politics. You know.

One thing that has struck me is that a number of billionaire donors to President Trump who are also owners of these teams have come out against him, albeit not necessarily in some cases as strongly as someone would hope. I mean, at what point will they have to take more aggressive stances? Will they will sort of widen the divide between some of his base, at least the wealthier

part of his base. Well, the NFL is a business, and and these owners, even the ones who are very very close to Trump, and some of them who have given millions of dollars to Trump, really are protecting their business more than anything else. And they they have said their pieces. Um. Only one, Mike Brown, the Cincinnati Bengal owner, was the only one among all of the NFL owners who came out in support of the comments that Trump had made on Friday and then again on Saturday and Sunday.

So I think that they want to respect the value of their team and the profitability that that the team can engender. And it's a team sport. They have to hold everybody together or else the whole business falls apart. And it's not likely to happen anytime soon. What's the history of advertisers actually getting political. They really have stayed away. I mean, you had just a week ago to my hill at ESPN, UM was sanctioned by by Trump's UH

communications director and said she should be fired. UH. Advertisers did not flinch, They didn't budge from ESPN, and ESPN just moved on. Well, the reason why I asked that is because I remember during the Super Bowl there were there were a couple of controversial advertisements that actually lead did get political and make messages, uh that that you know, took a stand. It's it's more difficult for the advertiser to cross over the line than it is for team

owners or players or even the NFL. Roger Goodell came out very strongly against the comments and the and the substance of what the President said about the activists kneeling um. But it's still a business, and both sides, the advertisers, the NFL and the team owners have to make a profit or else the whole system falls apart. It's just amazing. As I was seeing on Twitter, it's sort of the rival teams we're coming together, the fans were coming together

with this united cause. So it's sort of amazing what what President Trump can do to bring unity up. Port Bit thank you so much for joining us part of BIT managing partner at Media Tech Capital Partners in New York. And of course our thanks to Oliver Rennick Bloomberg Stocks reporter. And as we were saying, a lot of this controversy took attention away from the tax plan that Republicans are

pulling together. Over the weekend, GOP Congressman announced a draft of a tax plan that has a pretty aggressive schedule to get through Congress and get into practice. I want to bring in Laura Davison, Capital Hill, reporter for Bloomberg B and A. And Laura, can you just give us an overview of what the main tenants are that are

being proposed. Yes, So this plan is expected to be officially released later this week, and sort of the headline numbers are that the corporate rate would drop to you know, it's now, and there would be a special rate for pass through entities. So that's everything from you know, doctor's practices, law firms, private equity funds that would have a special rate.

Of those taxes are almost at now. So these are the big numbers, and the whole point of this is to get support from Republicans and Congress to buy onto this plan. What it won't have, however, is sort of what how it's going to be paid for. You know, what are the deductions, the credits, the other tax breaks that they're going to get rid of, uh, in order to make those those deep rate cuts. So, in other words, this is really a corporate tax cut rather than a

tax reform plan. Correct. You know, that's still to be seen a little bit. And they're also playing around with whether these changes will be temporary or be be permanent. Um. You know, there's some rules in the Senate that they have to to work with to make sure all the numbers add up. Um. But right now, the emphasis is on sort of what are the rate reduction is going to be, and then on the tax cut side of it.

If they're able to get a lot of buy in and they're able to kind of move the process quickly, they may they may be able to do some simplification type reforms and overall cleaning up the tax code, but they're on a really time tight schedule to do that, and if there's any hiccups in the process, more of the emphasis will shift to the tax cut side versus the reform side. So just how tight is the schedule

going forward? Um? Basically every single card needs to fall exactly where it needs to for this to to move by the end of the year. Uh. You know, they they have to get this to the House, get it through committee. The plan is to go through regular orders, So unlike the health care bill, UM on both sides, it will go through committee, get approved, go to the House floor, get approved, and then the same side over on the Senate. UM. And we're already seeing some divisions

between the House and the Senate. Or In Hatch, who's the chairman of the Senate Finance Committee, had said, Look, we're just not going to rubber stamp anything that the House does. We want to have our own input shape the plan ourselves, and that can really slow down the process. Laura, how much will President Trump himself pose an obstacle simply because he's come out, uh and sort of cast a little bit of shade on the proposal for not getting

down to the rate that he was hoping for. That's that's the big question, right because the President has been a little bit unpredictable in some of these policy discussions. You know, he's really pushed for a fifteen percent rate. UM. That looks like that's not going to happen, and there's been a lot of recognition among law makers that that

was probably unrealistic. Um. You know, but as the close at the end of the year, especially if healthcare falls through, especially if some of these other um priorities appear to be allusive to Republicans, there will be a push to get this done sort of no matter what that rate is. What about the Democrats? Do you expect there to be any support for the plan in its current incarnation at least uh the rough sense that we've gotten, will ever be any support from the Democrats? Um, that is on

the House side. There will probably be very limited House support from for Democrats. On the Senate side though, you know, Trump is courting UM some some Democrats who are from states where he wants the Heidi Height camp in North Dakota, Joe Donnally and Indiana, UM, Joe Manson uh from from West Virginia. You know, he's been taking them out with as he's going to give speeches in their states, and

you know, we'll we'll see. But they've sort of left the door open to UM to be available uh potentially to vote for this, especially if the bill gets moderated in the Senate, which it which it typically does. That's the kids for pretty mu any sort of legislation. UM. You know, you could see some pressure on them to vote yes, and Republicans maybe really heavily relying on their vote especially if you know, they only have two members on their side that they can lose in the Senate

for this bill the past. So what's the likelihood that this proposal will end up bleeding into household tax rates as well? So there there is much talk about also reducing rates on me on the individual side as well. You know, the top rate for individuals may be going down to about thirty percent. You know, that's from about

thirty nine percent where it is now. Um, though, what they're looking at is really doing big reductions on the mid to lower income side of the scale, because there's been some criticisms that, look, this is just a tax cut for the wealthy. So they're looking at, you know, doubling the standard deduction so fewer people would have to

itemize would be simpler for them. Um. You know, they could also you know, lower that bottom rate to about ten percent and have that include more people, and that would be very helpful for um, especially sort of this populous message of uh, you know how actually for for middle and lower income people, although it could potentially affect the wealthier people in New York and New Jersey particularly hard, right exactly, Well, so the one pay for that they

seem to have sort of agreed on is that they're going to get rid of that state and local tax deduction. So in states where there are low taxes, you like think Tennessee, that's not as big of a deal. But in New York, New Jersey, where you have state and local tax rates that exceed you know, ten percent in some cases, that would be a huge tax increase. And you know that's not only people in New York City, that's people in upstate New York to that also says

high taxes. So uh and what about business leaders? Are they excited about this so far? They're could of holding their judgment until more details roll out. There's a lot of sort of um, you know, sort of hoping for the best, but anticipating that it might not be as much as they've wanted. You know, I think after seeing lu Way Healthcare went, and you know, they're they're really pushing for for rates to go as low as possible, But no one's really making any strategic decisions based on

what this plan could. Everyone's sort of in a wait and see mode at the moment. Laura Davison, thank you so much for this great insight. Laura Davison, as Capital Hell reporter for bloom b n A talking about the tax plan that is expected to be unveiled later this week. Well, we are starting to talk a little bit more concretely

about a possible tax plan coming out of Congress. Here to give us a sense of just too much optimism there is that there will be something passed and it will give a boost to stock markets beyond where they are now. Is John Augustine He chief investment officer of Huntington National Bank, which overseas about seventeen and a half billion dollars in Columbus, Ohio. John, always a pleasure to speak with you. Um, thanks for coming in. What's your impression.

Does the plan that was unveiled over the weekend by GOP Congressman give you hope that there will be some sort of plan past in the near term that will be a boon to stocks. Yeah, good morning, Lisa. And the tax package is represented, we would say fifty fifty odds of some implementation. It will likely be in our view, targeted implementation around corporate tax rates. We would say, if we're looking at the end of this year into the fourth quarter. It seems like that was the emphasis of

the administration. It seems like whatever comes out will likely be targeted versus broad based reform. Well, how much of that is already baked into valuations? Right? I mean some people will would say, well, if we do get tax reform or tax changes, uh, then you will expect bond yields to go up just because growth expectations would go up and stock prices would also go up. But what

they or is it all baked in? The interesting thing to us is we thought this would play out the entire second half of this year and the FED would actually be more aggressive in the face of economic agenda coming at it. Now the Fed seems to have kind of played its hand. We do wonder about pemotibles around that. However, what we would say is maybe it's worth five dollars to share to the SMP next year, which could have an appreciable impact on stocks next year as this earnings

recovery continues. You know, we were talking before the segment and you were saying that you still do like stocks of re bonds, but you really did not sound particularly bullish. You were saying that our earnings expectations for next year seemed like they're probably too high. Um, what are your what are your highest convictions right now amid such a dearth of information and ongoing uncertainty out of Washington. Yeah, so October is going to be a very interesting month.

You know, our equity teams are going to be looking at looking at those earnings because they're low expectations now and getting lower expectations because their earnings in the third quarter. Yeah, in general, and who all is that going to affect? And who all might not in effect, but says it affected them. That's something our equity teams are going to be looking at now. Evaluation perspective. You know, the pe

of the SMPS about times trailing. We had thought that would come down to the eighteen or nineteen range by year end with a more aggressive FED. Now we're starting to question that. So our point here is maybe there's a little bit more support for stocks going into the end of this year that we stay at the undred level. However, we don't see what our equity team and Randy Hair do not see is multiple expansion. So now it's more about earnings. So that's where when when we discussed it,

that's where some hesitancy came. We're probably done with multiple expansion. In this cycle, but maybe we get to keep the multiple we thought they would pull back. It's something on our mind. So that sort of speaks to some of the stocks that you're looking at in particular as high conviction, Microsoft, Crowncastle International, x On Mobile. These aren't exactly undervalued, but

they're sort of mainstays that will keep their value. Yeah, they're consistence, you know, they're kind of ruler stocks, and and those stocks represent their represented and all three of our internal portfolios that we do for clients. That's what caught our attention. Um, there's conviction around those from a growth team, a core team, and in a dividend income team. And so when we see that consistency, we like it,

and we obviously like that for our customers. So one other thing that you were talking about is that you cannot recommend your clients to invest in treasuries right now with a ten year yield at about two and a quarter, given the fact that inflation rates and growth rates are about one point nine? What how I would yield have to go for you to say, you know what, take

some profits off the table going back into bonds. Our fixed income team at Huntington the numbers about two six right now, So that much the ten years been in a to one percent to to six percent range really since the election, and it's had trouble obviously holding over to two point six percent. So without some big adjustments to inflation or economic expectations, to six, you know, as unbelievable as that may be, to six seems to be a place of demarcation for the bond market right now.

So this is interesting because there was actually a jp More Morgan UH analyst note out this morning saying that they didn't expect that there was room for benchmark yields to rise before it really affected equities. They said there was room about UH for for yields to rise about a hundred hundred and fifty basis points one percent to one percentage points. This seems like it's much less than

that before it starts affecting equities. Well, you asked about valuations so to speak, or wanting to go into bonds. It's when they get out of the range that's when we start to look at them now, equity valuations. Yeah, maybe maybe it's the next round number at three percent. That's what we all thought would be this year, and we were trying to base the future on three percent. It looks like the bondmark is going to be foiled

once again this year to get to three. So two six is an area we're watching to see if he can get above. The expectations are it only goes to two four this year. Three. Maybe that affects stock market valuations. So we're operating in these ranges because we're on such low numbers in the bond market. Is now the FEDS trying to normalize, and inflation is trying to come back up. You know, I have to wonder on the macroeconomic sphere. I mean, we just see so many alarming headlines about

nuking each other and whatever else. I mean, at what point do you care about this stuff? If we would have invested on those over the past, let's stay starting with Brexit, we'd be about oh for four for our customers trying to handicap political events and other headline events. So what we mean by that is the global economy has picked up some speed in the summer. The U S seems to be staying around two. Profit growth is recovered, inflation stay and calm, and each changes to that environment

would make us reconsider allocations. We're just not seeing any changes to that environment right now, right so you have to look at the actual data. You have to look at the actual numbers. But as far as Twitter wars or even ongoing you know, military threats, no headlines haven't affected any of those as as much as they catch our attention, as bad as they could be, they just haven't caught the market's attention because they don't seem to

affect the global economy. Thank you so much for joining us, Thanks for having me. John Augustine is chief investment officer of Huntington National Bank, which oversees about seventeen and a half billion dollars and it's based in Columbus, Ohio, and he was talking about how a lot of his clients still have a lot of cash and that you just can't justify pouring that cash into something that has a real yield of nearly nothing at a time of relatively

good economic expansion. Definitely an interesting conversation. I want to pick up and what John was talking about with respect to Apples shares being among the most actively traded today and being down for a fourth day. This comes as reports are coming in pretty much everywhere from everywhere that new orders and new purchases of the latest iPhone addition are below expectations. Alex web joins us now. He's a tech reporter for Bloomberg News and joins us from our

Bloomberg nine sixties studio in San Francisco. So Alex, can we talk a little bit about just the color that we've been hearing about the disappointing orders. How significant is this and why is there some kind of uh decline in the desire for this phone? So you gotta taken into account here that there are two phones coming out. We've got the iPhone eight, which is already on sale, and then the iPhone tan is coming in about six weeks time, and that suggests that a lot of people

might be waiting for the second phone. The wrinkle that we've heard this morning is that Apple has told suppliers, um this is a report from Digit Times in Asia, that it's told suppliers to reduce their the components they're going to deliver for the iPhone ten. That could just be inventory management. Apple doesn't want to have millions of phones sitting around and not be able to get them

to market quickly enough. But it could also suggest they're wary about the levels of demand for the iPhone ten um. But I don't think we want to read too much into the iPhone eight because it could just be it could actually in some way to be good news for Apple. People are going to go for the later, more expensive phone instead. Well, Alex, can you give a little bit more color about the suppliers that you were talking about that have been asked to dial back the production of

the components. Who are they and how much do they rely on Apple for their business? So the support didn't name suppliers. I think it's probably on their on their part, it's an effort to protect their sources, I would imagine. But you see the big names and like hon High, peg Atron, these guys are the contract manufacturers who actually make the iPhone. Then going deeper into the supply chain, there are hundreds of companies who have little widgets in

the iPhone. Everything from companies in Germany like like Osraum actually Osram does like LEDs for the Apple Watch, and then um in you have Phillips doing perhaps the light on the back of your phone. Then you have Bosch doing your sensors which detect whether phone's moving. It's vastly varsity complex supply chain. There are some smaller companies who get you know, about half their revenue from Apple. They

are trying very hard to diversify. Companies UM like Dialogue Semiconductor, for instance, they have a huge exposure to Apple and the the extent to which they're able to stay in each subsequent generation the phone is therefore very important for them. You know, there was a good story written by Alex Webb. I think you've heard of him about this one company in particular, Universal Display Corps, that really focuses on this high definition screen that will be used to the new iPhone.

How much it's benefiting. Can you tell us a little bit of at the yes. So, Universal Display is actually a company which owns almost all of the intellectual property or a lot of the significant intellectual property related to organic light emitting diodes. This is the new display which is going to be in the iPhone ten UM. They've been toiling away on this stuff for almost twenty about twenty years, and finally, um it's set for a big

pay day. They've really seen a spike in the stock over the past year as the reporting gradually seats out that Apple's likely to have or was like to have led in the news in the new phone. Um and there are a number of other companies as well who have been betting on technology for years. Think about the three D censor in the next iPhone. There are companies who they used to make three D sensors for bombs, for tracking, um, you know, bombs for Iraqa or Afghanistan,

wherever it might be. And now that technology, the three D sensing technology is going into into phones. So that's a huge potentially growth driver for them, Alex I wonder how much the innovation in an iPhone comes from the company dreaming up what it potentially could look like, versus suppliers coming up to them and saying, look at this incredible feature of this new technology that we have. Maybe if you incorporate it into your phone, it will be

more appealing and we could provide we could provide it all. Two. Of course, I think it is very much. It is that way around. Yes, the Apple is very very good at taking technologies and fine tuning them and making them perhaps work better than some of the other competitors. But my predecessor on the Apple beat, Adam Satriano, wrote a really great story perhaps eighteen months ago where he looked at the relative R and D spend of Apple versus

IT suppliers. Now, while Apple's R and D spend has increased significantly, it's more than doubled over the past five years. They're proportionately they spend a lot less than than their biggest suppliers, and that's because the spend is done by the suspires to fight to get into the phone, and that then delivers them a big payday. That's not to say that Apple doesn't suggest tweaks and particular direction and

work with suppliers. We we've heard that they may be working with a company that works on some three D and sorry, some inductive charging and wireless charging, but um, that's coming out of that company and Apple substance. We approaches them, not the other way around. It's like winning the jackpot when Apple says, you know what, we're going to use your next next technology on our phone, and

all of a sudden someone's been made a billionaire. Alex Web, thank you so much for joining us alex Web as a tech reporter for Bloomberg News, coming to us from our Bloomberg nine sixties studio. Thanks for listening to the Bloomberg p and l podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm pim Fox. I'm on Twitter at pim Fox.

I'm on Twitter at Lisa Abramoids One Before the podcast, you can always catch us worldwide on Bloomberg Radio