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Right now, we're gonna get right to it. We've got a wonderful conversation here. What Oliver Wyman has done as part of marsh Broc Clennan and Mercer and all the rest is it gone out to people that have shown stunning expertise in different fields, pooled them in together and it's like a legit global consultancy. So to explain, you know, it's like Butch Cassidy, who are the nice Scott Dan
tannebon Is sanctions. He's the one that knows who's cheating and why they're cheating and what's going to take the will, if you will, for in the case of Russia, for Europe to get its act together. Hu Van Steinis was iconic at Morgan Stanley, Ages, Ago and Finance in banking worldwide. Huvanstinius's partner vice chair at Oliver Wyman. Daniel Tannemum partner
global anti financial crime practice leader at Oliver Wyman. Here, let me start with you the year end, and you know it's not like thirty pages, the one hundred and twenty page Oliver Wyman, this is twenty twenty six. Do you have a theme yet? It's a great question.
We'll look.
So.
I was just chatting with one of my friends about their their outlook yesterday and they said the biggest question for them was has the flurry of defaults? Is that going to be a snowstorm or is it going to be That was just a little flurry which came past us. So this, I think the credit markets spreads are historically tight, riskwards a little bit tighter than it was. Where does that? Where did credit markets go from here? And is much of a slow down? I think that's one of the
big questions on our plant's mind. Obviously the whole AI data center growth or that off with that impetus offset, that's clearly a baked in and a big debate too.
But lots around credit markets.
But when you're dark in the door at Oxford, did you take cockroach four oh two?
I mean, you know the cockroaches out there?
Yeah, we don't get so many cockroaches in the UK Chilli there private credit.
I mean, this isn't your main question for banking and for everybody out there?
Are they going to do you sense us as cockroaches.
Look the way I take it is this feels like a bit late cycle behavior. So you know, you imagine we're we're a long way through a cycle. Some of the some of what we see and you've seen on Bloomberg this morning is fraud, some is uh, difficulties around a K shaped economy. What the real dissonance, Tom, is that the banks CFOs we engage with are not sensing a big pickup in credit. They're saying it's really benign. But obviously what the debate in the market is much
more concerned. So I think there's a real tension there at the moment. I don't see. Look, this late cycle, there will be more folks. The key question is are they well spread and are they amplified? Dan, what's the latest here on I don't know. I guess just our tariff policy here in the US. The Supreme Court heard some arguments last week. I guess we'll hear from them later this year here. But what's the policy these days on tariff's is there one?
Well, I mean, the policy is the Trump administration is treating that hearing like it's a speed bump, if at all okay, and really trying to come out saying we have other authorities we can use, whether it's Section two thirty two or three ZHO one, which are much more limited than what the president attempted under AEPA, which is a reminder, AEPA was created to limit the president's authorities.
So all of the rhetoric that Trump had set around tariffs and the run up to and aftermath of Liberation Day kind of shot the whole argument in the foot, and it's why even the conservative justices were pretty skeptical of the arguments made. So I think the administration is trying to show confidence that their strategy will move forward.
Do you believe in that?
I mean, investment's over it with Morning Joe right now talking it up. I mean, the basic gist Paul's talking about is we've moved on from tariffs.
So I don't buy it for a minute.
We've definitely not moved on from tariffs, because if we do, that's a key part of this administration strategy for hammering out trade deals. So it literally kicks the stool out from under a bunch of them. And you look at what's happening between the US and China where there's this detent for the moment, does that go away? Does China begin to turn the screws again and turn off this spigot for the five rare earths they began allowing movement of.
So part of the just the talk of this administration has been really impacting your industry, the financial services industry in terms of deregulation. Is that a thing or they've been focusing so much on tariffs they haven't looked at the banking system.
Oh.
I think that the simplification of bank rules is one of the four big priorities for the administration. I think that, you know, funding the data center, build out, the energy security, the rare earth supply chains. Think about the JP Morgan announcement about national security, huge numbers for the next decade. So now I think that financial deregulation, financial simplifications. I mean, as I think the industry is calling it is a huge part of this, and I think what we're seeing it.
Think about the data center, it's all hands on deck. The banks alone and can't do it. A private markets alone clearly can't do it, so you need both working together. I think that does mean that the banks are feeling, you know, a bit of a spring and their step, certainly the larger ones because of the And the key question will be how much of it comes back in buybacks and dividends versus actually really reinvested. And that's the bet Here.
Special momenting this morning, Daniel Tanna bound Hu Vanstein is there with Oliver Wyman, together with us in the studio. I want to go a holistic cany I mentioned yesterday Apple TV down Cemetery Road. It's like a travelogue for Oxford. Basically it's centered in Oxford, and they use the Bloomberg terminal. Great within a nice I mean, I was looking for your pod, didn't see yeah there, but you know, you
know down Cemetery Roads doing the Bloomberg thing. You saw Hugh von steinas and slow horses like season three they made an appearance. I want you guys to talk about great Britain and is a general sense Dan yours the ugly American foreigner here you're living at your service to the to the to the public of the United Kingdom. From where we sit. It's turned upside down. Kit Jukes at Sacchen this morning with a blistering Noe Jordan Rochester
models one south of one thirty. Here Von steinas where is your nation in twelve months?
Look, it's a great question when we would have these debates, Say fifteen years ago, the UK was mid atlantic. We did, We had the growth rate which was mid atlantic. We had the deregulation which was edging between the two continents. And I think post the financial crisis and particularly Brexit, the moment we voted to leave, the more European became. And I think that's the challenge and that's the problem here, that the politics has become more unstable in Itali's the
finances have become a little bit more unstable. And I think the debate here is like will we get a little will the pressure from the bomb market's edges back to that mid atlanticism or we just got stuck in a bit of a rut. And I think, look, politically it's painful, but like everything in life, it's not all about politics.
Stuff on the economy expert and Heathrow, in the tram and in sanctions and all that you said on the truck lines that the port of Dover is the relationship with.
The United Kingdom and the continent of Europe. Is it basically shattered because of Brexit?
I don't.
I'm not sure I would agree with that. I mean, Hugh is certainly the expert on this, but is it shattered because of Brexit? I mean, interestingly in my world and I was I've been in Brussels and London in the last few weeks.
If you take the issue.
Of Russia, I think there's general alignment between the European Commission, the British, the US, which is nice to see for a chain. So, I mean, I think it may be on an episodic basis, but shattered seems like a stretch.
So they're getting they're getting on, they're getting a lot, I think.
So we'll just get back to such to finance, it's interesting, I think the it's interesting how two big private market films of both both bought in the UK recently, so there's actually there's there's there's money to be made in terms of financing. The economy may not be leaping ahead, but there's business to be done.
Can I poss got okay? Questions here? I Vantstein is dantan about with us. All my radar is up and I'm biased saying go along United Kingdom. It's so gloomy, like, what's the royal family going to do? What in God's name is tatany I'm gonna do? Time? May you late in the game? I mean my gut feeling is this is the time to go long breckxit long UK? Is that in the Oliver Wyman zeitgeist.
Look, I know, I think it's an interesting call.
I mean, the moment where you get this, the pessimism about the UK, particularly my trip here to the US, is profound. So I think you're right that I think it is kind of darkest before dawn. I think the pressure from the bomb market is going to challenge the government to make better fiscal decisions. Look, there's a little bit of caution, but I see a lot of interest around. You talked about Oxford, around the universities as a huge science parks being built. You know, the Ellison Institute is
just poured in over one hundred million into Oxford. I think there's a lot of excitement around US science and energy. But you know, I think it's most important to invest through the politics, not because of.
So, Daniel tos As you mentioned some of the sanctions on Russia and so on. We're talk to us about sanctions, do they work at all here? Because it just seems we have wave after wave after wave of sanctions and these people I think they just it doesn't seem to have an impact that well.
No, so we there was a moment a few weeks ago when the US decided to rejoin the Global Coalition and sanction Luke Oil and Rasneft. Those were literally the first sanctions that the Trump administration has put on Russia's since they took office in January. They have made a difference because they, in doing so, put India and China on notice that if you continue to buy, you may have issues. Now, follow through is not necessarily a strength of this administration on this issue, but you have seen
a reduction in barrels per day being sold. It is beginning to hit the Russian economy. But when you look at things like you know, Orbon coming to the White House asking for an exemption, depending on who you ask, indefinite or a year like that kind of doesn't help the argument necessarily, But they are moving the needle. The Biden administration was very reluctant to touch energy, probably too reluctant. The Trump administration has waited way too long to re engage.
But now that they have, they have to follow through and actually enforce the existing sanctions.
I've got a project right now John McCrae, the iconic British author. I'm reading each of his books, trying to go back and get a first edition evident all of a good time. I'm on the looking glass war right now, right after Spio came in from the cold, what's the Russian relationship with the continent? Not so much in terms of MI five and spying, but what's the Russian relationship commercially with Europe right now that we don't see.
There's still trade. There's trade for nuclear fuel things like uranium. There's still lng that they're weaning off. I think January one, twenty seven was the date they pushed forward in the last round of sanctions that the European Commission passed. There is still trade like it is not dead. And the challenge is there's still a lot of goods that are
transshipped over land borders into Russia. We have an automotive client that will go nameless that saw like a two hundred percent increase in cars being sold to a country bordering Russia and said that without irony, it's like you see what has happened here, Like the cars are being shipped across the border. Countries like Lafia have actually stepped up their efforts to literally block physical movement of goods from Europe and too Russia. But there is still trade.
It is not down to nothing like that. That much is clear.
Two great skill sets at Oliver Wyman, Hugh von stein Is with his vice chair and Daniel Tannema'm partner here that today on sanctions and here's just great financial expertise as well, Passueny Worldwide with Hugh von Steiners and.
C with some hindsight here, how does the average Britain view Brexit these days? And is it still a talking point? Does it come up in a pub on a Friday evening?
So so okay, So there's two answers this. If you look at the polls, there is some bars remorse, so the majority of the population now have have regrets. But I think this is more like thinking a head to Thanksgiving about what are the topics which shouldn't come around.
The dining table.
So still that's still one of these topics which wow, people put below the table iff until the fourth class of wine.
You're usually qualified on this, Hugh von Steiners, should the Fed enjoy the descent of the Bank of England Bank of England recently five to four unheard of at the Fed, we would never see that. And you know, I'm working with Governor Kearney now running a small nation to the north. My draw Canadians in first place. I believe q von stein is just as simple as I can. The descent that we've learned at the Bank of England is at a constructive exercise.
That's a really good question.
I think it speaks to just how difficult the setup is because you've got sluggish growth, as you've just said, Thomas, you want low rates, but inflation keeps picking up ahead and that's partly actually a function of breaks it, but it's a partly function of other import markets as well. So I can see why the committee is really stuck and challenged. I don't think you'll get quite the same degree of dissent over here because you don't have the
same difference and fundamentals. But I think it's it's sort of healthy, but you know it probably speaks to the problem rather than the committee.
People are really begging for that to a great except one final question, Dan Tannembaham Hardwire in to the bonus joy of Autumnal twenty twenty five Global Wall Street.
It's nuts out there.
I mean, it's a boom Wall Street economy. Exactly how much is you know, the real estate of Greater New York to explode a higher here with all that money coming in to New York Wall Street.
I don't know where you're going with this one.
I mean, I do thought Hampton's gonna go up springing into Samptons has seen record pricing.
We want to hear it.
So I don't know if that means people are migrating east on a permanent basis or if people have just rediscovered the beauty of the Hampton's and the off season.
With your experience, it's a boom Wall Street economy, right, it does seem that, But I mean, what does it take to flip it the other way?
Like if the Supreme Court rules against the tariffs, for instance, how does the market react to that. They've been pretty muted to some of these broader events and what that.
Call and to Supreme Court's gonna do.
I'm not on Cawshier poly market, but I feel pretty reasonable, reasonably comfortable that they're going to overturn the and uphold the prior decisions that the IPA tariffs are shot.
Last word is is the city enjoying the Wall Street bomb that we see in New York.
Nowhere near as much?
No?
And I think actually there's because there's We've alwaysly got concerns about housing taxes about to come through in two weeks time.
So I know the housing market, you get a bargain.
In fact, the number of Americans Tom when you're coming over to buy your John McCarey's give a house at the same time.
It's just, it's just, it's.
Just I read the Telegraph, I read the Times. It's I read an article on the BBC yesterday and the Times of London. It was incomp I couldn't understand it. I literally tried to understand what's going on there. It's nuts over there is everybody gonna.
Leave if they put through this tax regime.
So we've already seen a significant wave of nondoms. In other words, non Brea too had a special tax status and you know, if I go to events in Milan or Middle East, I mean, there's plenty of folk hoop who've departed, and it looks it's a bit like the debate you've had recently in New York. The tax base is very geared towards the top one percent, so we've already seen a stream of people leave. I don't I think though now these taxes are more for middle classes
and that's going to be tougher. But you're you're also seeing some of the young, the you know, the under twenty five's move too, So I don't think this is nineteen seventies. There's no any like that, you know, but you know, but that's the parable. But it's it's definitely getting It's a This is the topic of the dinner tables.
Dan.
One final question, Are you moving to Milan?
No, No, I'm staying. We just finished a long overdue renovation. I am long in New York regardless of what's happened in the last week.
So anyway, Tannemum, thank you so much.
With Oliver Wyman von Steinas, thank you for visiting from the United Kingdom. Venstinas and tann Obama of Oliver Wyman together.
I love doing that here.
The conversation is what we try to do with these two gentlemen of great expertise and sanctions and of course in European and global finance.
Stay with us.
More from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.
Govery shutdown.
Let's do economics, Blorena or Rich joins us on Chief you us economists the Tiro prices, we get the market open today, Blurina, How blind are you at Tiro price when you go to a meeting with Sebastian Page and the other beasts? Where are you getting your information from your belief, your conviction?
Lucky for me, Bloomberg published this alternative data charts and tables and so on, so I'm not flying so blind anymore. Also, lucky for me, we are a big fundamentals house with bottoms up analysis from our credit and equity analysts, so we're getting a lot of live information. It's just the job has become harder because we're not relying on the same things that we used to feed the.
Models in the past.
But what your question is, what are the private sector data telling us. We had seen some encouraging news from ADP that weakness in labor demand was stabilizing in October and that we could hope for improvements going forward. The ism employment in this is we're pointing in the same direction. So I think I'm still leaning on that as my thesis. But today's weekly data on ADP, which showed a decline for the week of October twenty five, was a bit
of a setback. Now when I'm talking to investors and Sebastian Page, what I'm emphasizing is that October will be really noisy. It will be actively vity spending. Employment numbers will be affected by the government shutdown. We might not even have its ability into price data because it's too late to collect CPI data anymore. But we'll look at November, we'll look at December to gauge the trend of the economy.
I remain still optimistic about the path going forward, and we can discuss together why.
That is so.
Blarena, do you have a sense of if the government that does open in the next few days, how it will release the data to the marketplaces or do you have any sense of when that will occur, how that will occur right.
This is a very important question right now because essentially what we want to know is how much information will the FED have before it's December tenth meeting. So let's see the government. If the government opens later this week. I expect that both BLSS, Census BA, they will all release a new data schedule once they have gauged how much time it will take them to play catch up.
I think we should get pretty quickly the September Employment report because that would have been already prepared before the government shut down. It was a matter of formality to approve it. Now the BLS could go down the root of collecting October and November employment data and that could delay the release of the next employment report, or if
they just focus on November. It's a collection data collection week this week and next week, so we could see that before the FOMC meeting, and I think that would be quite important for the fact because they won't have the CPI report, but at least they would look at the full employment side of their mandate before the next meeting.
Unbelievable.
I have no idea how we get to the December meeting. We're going to continue with the Lorena her reach, she f Us economist a Tiro price. Give us a moment here to get the market open again. The bond market is close today. There's a little bit of you know, spread information in that, but it's data and frozen here in.
The bond market. The equity market not frozen.
With ready green on the screen to keep score at home, going into the market, opening futures are negative fifteen to.
See where we end up here, but with ready green on a screen.
An interesting veterans day.
The dollar resilient. Here's Lisa MINTEO.
You got it.
And let's start right now with the SMP five hundred. Right now, I'm sitting some rud on the screen, down about two tens of percent, fourteen points the level six thousand, eight hundred and seventeen. We go to the Dow, it's up about a ten percent seventy points forty seven four hundred and forty four, and the Nasdaq right now down about half a percent one hundred eighteen points at twenty
three thousand, four hundred and seven. The yield space, well we have at the bond market closed today, so we're not going to get that well that it'll be back open tomorrow. Over to commodities, we have COMX gold up about three tens percent, four thousand, one hundred and thirty seven dollars an ounce, Brent crude up more than one percent, sixty four dollars a barrel, WTI crewed sixty dollars a barrow. All the Bloomberg Dollar Spot Index down about a tenth
of a percent. Checking you with chairs of a video at the open there down about two percent. That is your Bloomberg opening Bellerpoort, Paul and Tom.
Lisa, thank you so much. First quote here on the develop one hundred and eight points. But it's sort of a mess out there. We'll see as we go forward with us. Plerina, you're reaching chief youis economist a t rowe price? Blerina, I mean it's what is It's November eleventh? Right, yeah, we know that date. Okay, so one week got two weeks out, three weeks out? How do you prosecute a FED meeting? I mean, I just I get it. It's original territory, but how original will it be in December.
I think it will be pretty tough this meeting. We know the committee is already quite divided between cut in December and staying put because they're worried about employment on the one side and inflationary pressures on the other side. And I feel like because we don't have new data and information, it will take that much more to shift either hawks or doves from their position. So it could be quite a hot and contested meeting. What do they need to see? The thing is October, first month of
the quarter. We know that the spending data and activity data will be affected by the government shut down. The CBO estimates seven hundred and fifty thousand furloughed workers from federal government. That's four tenths of a percentage point effect on the unemployment rate. That could show up in the unemployment numbers. Now the FMC needs to figure out wherether that's noise or whether it's continued weakness from the summer months.
So it's going to be pretty tough. And on top of that, they won't have the information they need on the price side to say, Okay, there is some softness in the labor market, but we have some uptick in inflation, So those two things might cancel themselves out. So it's going to be a pretty difficult meeting. I think to navigate.
They're blind down price. All that got does the price of the market, which yield?
Ye?
Do they make a FED decision of the two year? Sweeny? You, I don't know.
I don't know, so, Lourina, what do you think is the focus of this FED here coming up on their February sorry, December tenth meeting here?
Inflation? Employment? What's taking center stage? Do you believe?
I feel that we're still on the tail end of the full employment concerns. It feels a bit like twenty twenty four when they were worried about the labor market rolling over quickly and they were worried about activity. I get a taste of that situation right now too, So we are at the tail end of them focusing on
full employment. I think next year, and perhaps even as soon as after the December of MC meeting, the shift will be towards inflation, because I do expect that we see those effects of the tariffs picking up in Q four. I also think the dollar weakness since the beginning of the year will push import prices. Also in January, we're going to get that price reset that we've seen since
the pandemic. A lot of companies will reset prices at the beginning of the year, and so I do think the focus will shift to inflation, but we're not there yet.
Brilliana, Thank you so much. Great brief here at a tough time for economists. Bleirino, Richie's with.
Tea row Price. Stay with us.
More from Bloomberg Surveillance coming up after this.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
John Stolphus gives us clinic here he's with Oppenheimer and a company the chief investment officer. The greatest thing about your notes, John, is you address the fear is this a repeat of the late nineties the dot com bubble? We do not believe, so discuss well. Tom, great to be here with you today.
I've got to say that we do not think that this is the tech bubble at all, and it's a very different The structure is decidedly different in the I remember exactly where I was during the tech bubble. I was fortunate that that time I was a manager of international equity marketing, so I was working with privatized telephonies, all kinds of things around in Europe and Latin America, and I was pretty clear of the tech bubble, but I watched it happen because I was very much in
close proximity at that time. It was tech was rather primitive if we look back on it. I mean we had the modems that we'd pluck into the wall, yeah, and the frozen screens that would occur even at the well known firms around town. Your best friend was the tech person all the time. Against we call it peace Sweeny. And today what we have is file lunch in nine never please kill Yeah, right.
The marvels.
When you'd hear the cart come down the hallway, I'd start barking, you know, and to make sure I have the cheesecake with the caramel frosting on it. But sec where we are today I think is structurally you have technology is deeply embedded in the lives of both the consumer as well as business. We all rely, we're all on the upgrade cycle, whether we like it or not. And these big companies are highly profitable, you know, the
world of positive cash flow and developments. If anything, probably the biggest risk is that governments around the world might want to break them up. And at this point even that probably wouldn't be so bad because probably the individual pieces are worth more than the sum of the parts. So I think it's a different world, John. We just got pretty much through earning season. I seem to be pretty solid earnings. Is it enough to support this marketplace?
Do you think?
Let me tell you that.
I've got to say, Paul, the earnings are just marvelous this time around. When you consider that nine, let's say nine sectors are positive. Of those five or double digit growth, and it's a mix of what you would.
Call a value as well as growth.
So you've got tech right in there, but you've also got good representation. Even materials is doing fairly well right now. With the earnings growth, you've got positive there. So when we look at it, if anything, we think the rally has broadened, but it's still driven by technology because technology drive technology like credit makes the world.
Go around when it comes to finance and the market.
I really believe no matter what the turbulence is in Washington or Beijing or Moscow, the ultimately what they're really carrying about is revenue growth and profit growth.
We've got it.
We start strong.
This morning, Jen Sofis Oppenheimer in company with this Good Morning in New York down to Washington ninety nine and one FM Good Morning, a serious extension of.
One twenty one. I have no idea how large that audience is. Well, it's like old technology. Sure it's still rocketed. Yeah, you know across Canada as well. Paul suite with John stolfhis.
Hey John, So you know, one of the concerns in this marketplace is AI. It's been such a big, big theme in this marketplace really for the last two plus years, not just in the technology sect, but just kind of across.
The market in general.
Are you concerned that, I don't know, we're in an AI bubble.
Maybe for so many sectors, you know, Paul, I really think where the bubbles may be found or probably in the areas of meme stocks and cryptos. But when it comes to AI, when we talk to people, whether it is private investors, just general consumers looking for things. Civilians are using AI more and more all the time.
And within business, you know.
I can remember a few months ago I attended the Institutional Audience conference here at Bloomberg, and it was a.
Mix of people.
It wasn't just people from finance, but it was healthcare and different different sectors and everybody people normally, and they were I've met a person from healthcare who said, oh, how she loves doing research with AI because it makes
her so much more efficient. And then at one point she said, sometimes I think it's better than me, And I said, don't say that, because I think the other thing is I don't think AI is going to replace humanity because it has no uh, it has no sympathy or empathy, and it's apart from here.
Were you seven thousand, seventy one hundreds?
Just kill them?
Can we make some newsier? Lisa? Give them? Give them, Tito, can you get the seventy two hundred?
You know, I think that seventy one hundred could be surpassed, but I'm sticking with the seventy one.
At this point is pretty late in the year. The gloom Crew.
The foundational discussion is the earnings juggernaut, the cash flow juggernaut will end. Do you see it ending for the chosen few? Or does it continue to disperse to a better earning season for all the other stocks?
I think, you know, at this point, I think we begin to see I mean, this earning season looks. What We've got earnings growth up eleven point seven percent on back of eight point one percent revenue growth. You've got tech twenty four percent growth year over year financial Q three or year over year twenty three point nine, so that's another twenty four piece. You've got materials double digit growth, industrials double digit growth. This is looking pretty good, and
the single digits aren't bad. And you've only got two sectors with negative growth. That's energy negative two point two six percent on the screen and communication services eight point one nine percent, and that some of that may be the result of just incredible investment, a watershed period related to AI technology.
So where do we go from here?
John? I mean, we've had a crazy year, excellent return so far after that volatility in the beginning of the year. How are you positioning twenty twenty six?
Well, right now, you know, we won't make our official calls until mid December when we usually do because we're not we don't have X ray vision.
Yes, we'll go to seventy two hundred. I like that.
I'm trying to clouds the situation there.
But what we what we would say is we probably where we're standing, not in terms of the index itself, but for years now we have been cyclicals over defensives. So emphasis on cyclicals and primarily large caps, but with a smattering of always hope for the mids and the smalls.
But I think until the FED really cuts rates, I don't think they got to get much love point.
I'll take the juggernaut and Dan I says Microsoft is a founder of this dialogue. Is Microsoft a cyclical in nature? Well, I mean it's a really philosophical question. We're in buffet, he's ninety five, he's going quiet. Yes, sofas won't shut up. That's the opposite of buffet. I mean the bottom the bottom line is some of these tech stacks have.
Almost cyclical characteristics.
Oh, we most certainly think so. And in fact, in the old days, you.
Know, back when we used to call consumers staples a defensive sector coke, smokes and soaps, technology was regarded as a cyclical, and we regard it as a cyclical because the while the investment appears to be a secular issue and the developments are the actual investment is there's sentiment behind that, even at.
The institutional level in terms of Palo Alto.
John, how much does this market need the FED to continue to cut races here question?
You know, we we have been for the last few years, you know, the last two years when a lot of people were expecting a lot more cuts, expecting that Jerome Powell would be very careful with cutting rates. We were looking for this year maximum of three cuts, and then it looked for a while it was only going to be two cuts. But I think we're going to do I think he will do it another cut of twenty five.
Bibs in December, okay.
And the big thing is the FED is very very sensitive as to how it practices. It's dual mandate, and the dual mandate being supporting a Curlian question.
I mean, Paul, you're too young to remember this, Sulphus and I remember Arthur Burns and you have a pipe and you go, he's making circles with his pipe.
What's it mean? What's that?
What do you think of the modern complete fixation on the FED. I mean we've gone from Marty's wide don't fight the FED to a twenty four to seven fixation on the FED.
And your glory.
You look at Ernie's cashlow, you look at revenue growth.
Do we do too much Fed?
No?
You know, I think it's important to look at the FED. If anything in our research which is fundamentally driven, it's revenue and earnings growth, but very much an eye to FED policy. And we think we are living with the benefit of what I called the ben Bernanke legacy because Arthur Burns was a disaster. Then as a result of that you had Paul Walker had to come in and
take draconian measures. Remember just about what I came in in eighty three, just about a year and a half, two years before I got in, the yield on the ten year almost reached sixteen percent. That was real wild inflation with you know, the current generation thinks that nine point seven was a lot in March of twenty two.
But that Ben Bernanke legacy, high transparency, communications, it carries on through Jerome Powell and that balance where you want to see the FED a nurture a sustainable growth in economic growth, but at the same time not overthrow the apple cart in terms of employment in jobs and avoid a recession, which they have done notwithstanding all the predictions of inflight of recession since twenty twenty two, so far no recession, which I think is extraordinary.
John o'b we don't talk about these days is tariffs and the impact on economy is that kind of in our rearview?
Do you think you know?
I belonged to the camp the g I wish they hadn't gone on that tariff route, though when I look at it as a strategist, I think as a tactical maneuver, it sure got the attention of all the countries around the world because, in essence, over the course of the last eighty years since World War.
Two, the US had a policy.
Where we exported our manufacturing just so fas, thank you so much.
Just a brilliant, brilliant dissertation there on SPX A path to seventy one hundred.
Stay with us.
More from Bloomberg Surveillance coming up after this.
This is the Bloomberg Surveillance podcast. Listen live each weekday starting at seven am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg eleven thirty time.
For the newspapers, here are we a guana free?
In the news site?
We are a guana free?
All right.
I'm starting with the Wall Street Journal. I'm not sure if you noticed, but luxury hotels they're charging this record high premium, okay, more than usual, but it's not stopping those affluent travelers from splurging. Okay. So they had some data to show that the average daily room rate at US luxury hotel a record high three hundred and ninety
four dollars this year. That's the average, okay, But when you look at let's say Paris, where a luxury room will run about one thousand dollars away, the average price of most expensive ones about twenty six hundred a night. New York have ultra luxury hotels at about fifteen hundred some two thousand a night, but still bookings for those properties were up two and a half percent this year
through September. A lot of those luxury hotels are expanding too, So the prices are going up, but people are still splurging.
Anthony Capiono Marriott I said this repeatedly.
Yes, they completely.
Misunderestimated the luxury hotel drive. I mean there is I know in Paris, We've got offspring over there. And basically I have a secret literally, I have a secret hotel that's within this you know, the circle of tourism and all that. But I have a secret hotel that I tell no one about. I'm so afraid exactly people.
That's a shafey economy. Okay, shafed economy, yep.
Crazy, not good, not good, Okay, this one I want. I want to stick with the ultra rich.
Okay, there you go.
There they go. They are scooping up penthouses in Dubai. It's one of the world's hottest property markets right now. They're paying top dollars for places that are not even built yet.
Okay, this is bidding.
Wars at Brookfield Properties. New luxury project in Dubai prices Okay, here it is for waterfront apartments pushing above twenty four million dollars. They have water the waterfront, yes they do. They do it so house hunters they have to prove they have the cash, all right, I got it now. Yes, in order to express interest, you have to hand over a cash for check for two hundred and seventy two thousand dollars just.
To say that you're interested.
Wow, because they have, you know, so many people lined up, so they want to make sure that you have the cash and you're not wasting their time by checking these out. But more luxury hotels sold in Dubai and Race Quarters than any other city that includes New York, and that includes London too, So it is the.
Hot it is. I hear about this as much as I hear about Miami or even more.
Now it seems like Dubai is just kind of like the hot Yeah, certainly the pictures are beautiful, but.
If you have twenty four million, then that's used to.
Go all the time.
Major shout out to Peter Grower, our chairman, who really forcefully led the build.
Out of Dubai.
And I was there right at the beginning of it, and you know, they had a slope period and look up, I'm like, look at all the cranes on the buildings, And our economic leader in Dubai said time, the cranes are there because it's so slow they have no place to put the cranes.
So it's boom and bust. And right now it's a huge boom.
I mean it's just huge, huge boom, say an Abu Dhabi is Well, let's go next podcast.
Okay, this one.
If you're looking to live a bit longer, you might want to extend your daily walk. Okay, this was in the Washington Post.
Okay, it's years long.
See see I knew it.
I knew it.
So you have to walk for at least ten to fifteen minutes straight. That's better for you than doing five minutes here, five minutes there, walk to the you know, the store across the street. That doesn't count. You got to do ten to fifteen minutes one.
Time in office. This sounds like verbati. Walk to penn station. That's that'll get it done.
Time ten to fifteen minutes equivalent.
Oh yeah, big time.
You can tell it. I'm not going to go into the weight invest because we've been there.
Donait?
Do you do? How many steps do you need to do to be Lisa Matteo.
Us that's time?
How many do you need?
I don't knows.
Everything about ten to fifteen thousand you know, I catch it on the weekend. You know, that's how it works. But yeah, they usually say ten.
This is a weight person.
She's like pumping irons.
Thank you so much, Lisa, go back to your breakfast. Lisa Mateo, Thank you so much for the newspapers.
This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, seven to ten am Easter and on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal