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the Bloomberg Terminal, and the Bloomberg Business App. Well, I'm stressed up by the why don't you bring in our guest here? I mean, Gargey came in today just to you know, hang and you know she's a Blackrock and it's an important conversation.
Gugy Chrawdrey, chief investment and Portfolio Strategists of the Americas for black Rock. But more point and that she was at Merrill Lynch, she was at Jeffrey's a company. But she's one of these people to that runs marathons, ultra marathons. I mean, who does that stuff? Where are they runing to.
Where where they were from.
I don't get it all exactly. GREGI thanks so much for joining us here in our studio. As John Tucker was just reporting here all time highs again yesterday for these markets. How do you think about just the opportunities in markets as you think about strategy stepping back and look about stocks, bonds, alternatives, you know, treasuries, I've got the Federal Reserve, I've got earning starting this week. Where do you guys start at a thirty thousand foot level.
Sure, good morning, it's great to be here, lovely studios. So I will answer that question with the comment that you made about marathon running. It's all about the long run and staying in the markets with a diversified portfolio is the way in which we're thinking about investing right now.
We just came out with our media outlook yesterday, our media investment Directions, and one of the things that we talk about there is that despite the very strong rally that we've seen so far here today in the equity markets, especially in the US, we certainly think that continues to be pockets of opportunity and we think investors should be focused on that quality parts of the equity markets and
the core of your portfolio. What does quality mean, profitability, low leverage, and really stable earnings growth, And obviously we see that in some of those tech and tech adjacent centers. Looking over to fixed income income is king and you can really get very robust, you know, six to seven percent income in a variety of sources. So that's really the thirty thousand foot view. And I'd also say that investors are really looking for diversification right now.
The reason, like a Davos manifest here, what in God's name is fundamental transformation? You got to be not markets.
Well, what we mean by fundamental transformation is that there are a few things, as we were just talking about, when we looked at what are the stocks that are trading the most in the morning, and there are some companies that are driving changes that we think will be here for driving inflation, driving growth, driving returns, driving profit margins, driving productivity for a long time. And one of them
is related to AI. And we spend a lot of time talking about the long term opportunities both with AI in terms of semiconductors but also in the power needs of stale.
How do you respond, I don't mean to interrupt it. This is this is what everybody on Global Wall Street wants to know. I'm going to suggest black Rock as a more conservative passive, a little bit of active by side shop. Goldben Sachs is a cell side shop, and they're going to generate an opinion. Somebody at Golden Sacks in the last forty hours is basic MAIA editorialized Paul AI is BS. How do you respond to that? They
say there's no provable, identifiable downstream success with AI. How does black Rock respond?
So, one of the things that I would say is, right now, when we look at the things that AI can do, whether that's just making your PowerPoint deck or whether that's in healthcare and looking at your mammogram results, this is just the beginning. We didn't know about chat, GPT, and there was no LLM you know, three four It was there, but it wasn't being as used three or four years ago. This is the beginning. In nineteen ninety no one was using the internet. Today in ninety percent
of the world's on the Internet. This is just the beginning of what AI will do, not just in semiconductors, but across the stack, whether that be in financials, whether that be in healthcare, whether that be obviously in technology. So I you know, obviously people can have their opinions, and I think it's great to have two sided markets.
I think that's what makes a buyer or seller. We like that, we encouraged that and that what's But at the same time, we definitely think that there are some major, as we call them, structural transformations, off which AI is one, Demographics is another one, and we talk a little bit about the opportunities in India as a result of that. Geopology is another one that we spend a little bit
of time talking about as well. And obviously one of the things that I started off by talking about was the need for income is a result of some of these demographic shifts.
I NDA the I shares MSCI India ETF. Yes, give us the India call. I think I understand it from the super macro level. Right, last twenty twenty five years of China, maybe the next twenty twenty five years will be India. That's as far as I go. How do you get Look, it's.
Not just about being the next China, and I actually would want investors to move away from that thing. I think it's really about a country that is doing three things right now which makes it appealing to invest us. Number one, of course, the young demographic population. You have a country of people where majority are between that age of twenty five and forty five, which especially when you look at the developed markets, is not the case. Second,
it's the growth of infrastructure. It's what the government is putting in for infrastructure right now to make the country more productive and enhance productivity. Third is that Indian equities for either US investors are actually more importantly, Indian investors are really under own. So there is the shift that's going to happen over the next few years and decades even where more and more investors are going to go
into their own domestic market. So I think all of that leads to both a short and a long term story that we really like. And investors have been pouring into i NDA this year.
Come back. This has been good. Okay, we'd love to have you in as we can GUARDI chottery with us a black rock today. Thank you so much, greatly. I appreciate it. There's something going on here, folks, whether it's France or it's London, United Kingdom, and frankly India is Guardi Chottery was mentioned. There's something going on this summer about democracy and vote, which is a good setup for Henrietta Treys. She is the best at the Pulse in Washington.
Henrietta the trays radar at Veda Partners. What is your radar searching for this Wednesday morning.
I continue to be focused on all of the members and understanding where the next shoe is that's got to drop. Obviously, last night we got Senator Bennett, Democrat from Colorado, coming out saying that President Biden has got to make the decision to step down. I understand that the President has made this a sort of elites versus the rabble situation where he's saying the voters want Biden and it's the
elites who turned against him. And what's ironic is I literally wrote a note the exact same hour as he wrote his, with the exact set, with the exact opposite takeaway. The rank and file democrats across the country, independence moderates, and particularly female voters have said repeatedly all year long they do not want another for Joe Biden. They do not believe that he is up to the task. And it's been the elites who have said, you know what,
we're gonna stick with this guy. The senators are behind in the House members behind him, and now both tithes are shifting, and I'm really just watching which senators, you know, from an office or a chamber where Biden operated for thirty six years, is going to make the decision to say, hey, you know what, thank you so much for your service, It's time to move on. That's really the only thing
that matters right now. I think we're about a week and a half away, but that's that's the most important thing in DC right.
Now, Henrietta. Is it in fact President Biden's decision and his alone?
Yeah, pretty much. I mean a big focus in DC right now is on the process. So specifically, where does the campaign fundraising go, Where do the dollars and the Biden for President pack go? How do you migrate over the support of all the delegates that are now you know, technically pretty locked in for Biden. Who releases them? And that's that's up to President Biden. That's his decision alone to make. He's got a really small core of advisors
who are working with him on that. But the main question is just operational, do we move forward with Kamala Harris. Do we move to an open democratic process with a sort of quasi primary, or does Biden stay in the race. And for the Biden team, their answer is we stay in the race. We continue to fight this fight, and we're in the best position to win. What's ironic is that the defectors in DC who have come out thus far, seven House members and just a handful of Senators are
basically saying, you are not the guy. We want your campaign dollars to be spread around. We have others waiting in the wings. I mean, an underreported narrative of this whole story is that Democrats have been raising boat loads of money since the debate record halls. They raised record halls when Trump was indicted on thirty four felon accounts. So there is plenty of money to go around. It just is around sort of unlocking it and moving it on to the next unitate.
Timing you mentioned a week and a half give us a sense of when we really really really have to have a decision and a path for the Democratic.
Party really really is like August ninth, That's when we really really need a new nominee. The expectation and sort of the adjuta on the investment side, watching the DC side is always brought. I mean, anybody who's been through a debt ceiling countdown or a government shutdown countdown knowns you know if you just sort of like have a steely spine when it.
Comes to DC.
This is NATO week, right, So everything requires that the President have a really strong presentation the United States of the song, strong presentation, seventy fifth anniversary, all that, But August ninth is really the deadline, the the end time.
And there's so much out front here. It's domestic, like the Republican Convention in Milwaukee in that Terry Aynes and others, Henry in the Tray's and we value your opinions so much, have said polls, polls, polls. Are there any definitive holes yet? Or what pole to come is the one that matters for Henrietta Trays.
I mean, honestly, the fact that I'm looking at poles from New York should be shocking to the Biden team. It used to be the situation where Joe Biden could run his state and Donald Trump was losing the one that he came from. Now it's precisely the opposite now, Donald Trump is, you know, making New York potentially a purple state the first time in twenty five years, and Joe Biden's down by seven points in Pennsylvania for your
latest pole. I mean, the flip is everywhere New Hampshire, soda leading is all over.
But you're incredibly wired. I mean, she has spies in the White House. I mean, Paul, it's unbelo. She's got microphones in every room, in the green room, the Lincoln bedroom, in all Henrietta trays. When they say you're down seven points in Pennsylvania, how does the Biden apparatus respond.
There's they're honestly on this one. They're ignoring the pole. They're saying, we remain competitive. If they do migrate off that narrative, it's to say we are the best positioned to win. They're running against hypothetical candidates which with much lower name recognition, whether that's Gavin Newsome, Gretchen Whitmer, or even Kamala Harris, who's that you know, got a six percent of the population that doesn't know who she is
versus three percent for Trump and Biden. So basically they just keep moving the narrative as frequently as possible and sort of cherry picking their opportunities, which is not a winning argument.
What kind of convention will the Democrats have here?
It's going to be loud. Yeah, I'm out of consensus on this, but I do not think that Biden will be the nominee in October. It's going to be in November. I think that right now we have you know, three and a half, almost four months worth of the campaign to go. The benefit of right now is that we are in you know, all time record high TSA, travel
on airplanes, record travel from triple A on automobiles. People are on vacation, we are in deep summer, so there's a lot of time for the Democratic Party to pull around the narrative. Having served on grassroots campaigns nationwide, a lot of voters, especially since sort of the Internet Revolution, do not tune into the election until the last couple of weeks. Twenty four percent independents don't make a call on how they're going to vote until after Labor Day.
So it seems like there's nothing left in times of the essence, but there's really seventy five of the most important days are still like fifty days away.
Paul, can we ask a nerd Henrietta Trace question, Henrietta, come on, Connor Lamb out in western Pennsylvania. There he was post a child for the Conservative Union Democrat and all that. Christopher Deluzio is a first term Democrat in the vicinity of Allegheny County, Pittsburgh. What's he think of all this?
Pittsburgh is first of all, very near and dear to my heart, and as is Connor Lamb. I think that when look at Pennsylvania and they look at Pittsburgh, they've got to concentrate on the mail voter. The mail voter has abandoned Biden specifically, and it's not that they've abandoned
the Democratic Party. The Democratic Party platform remains overwhelmingly popular, legalizing abortion, legalizing marijuana, common sense gun control, things along those lines, versus the Republican platform, which is almost universally opposed to things like having teachers be armed in classrooms to stop gun violence in schools, pulling out of NATO. Those are things that are wildly unpopular with Americans across the board, including in Pittsburgh. And it's mostly the mail
voter that I would concentrate on there. That's where Democrats are hemorrhaging votes.
So far, interns just sets us say a thank and reading. For Henrietta Trece, we send her a case a yingling beer. Lauren Hawkfield her when she was last on Stop Traffic. She's out of Yale, She's at Morgan Stanley. She's an institution on real li State. It's a big you know, it's like Michael Mobison. It's a big picture real estate chat. But underneath it all is to try to figure out how much money we're going to lose. Lauren, where is the buy the dip winner right now in American real estate?
Gosh?
Well, first of all, thanks for having me back.
It's great to be with you.
I think the nice thing is that the dip seems to be affecting all real estate asset classes, all repriced almost across the board. But some of those are repriced for a reason, and some we think are actually really healthy, really great outline.
Give me, give me one of the healthy ones right now. I got to make some money this morning.
Well, let's start with Let's start with industrial. There are really three reasons we love industrial. The first is, let's look at the supply chain. We are rerooting and re routing rerouting changing where goods are manufactured, near shoring, on shoring of goods, et cetera, and rerouting changing how those goods get to the end consumer. And so all of that creates demand for industrial. The second is the continued
rise in e commerce. Right, we all seem to be buying more and more of our goods online and demanding it faster and faster. That creates demand for industrial. And the third, really, which I think is under reported, is just this dramatic falloff in new construction. So when you feel like demand is really strong and supply is curtailed, that's a good sign for an asset.
One of the themes that's out there, Lauren, just investors in general is an aging population. How do you play that in real estate?
Yeah?
It is. This is really important because as people age, their needs for real estate change, right, And we know we have an aging population, and in particular, the growth in our population is coming from two cohorts. It's the millennials and it's the boomers. And let me tell you, when you look at housing needs, their needs are changing. The millennials they're needing more space, and the boomers they're
needing more services, more healthcare, services in particular. So I'd say, in the case of the millennials, there's a move towards single family rental, that's a great beneficiary of millennial demand. In the case of the boomers, we are really optimistic about senior housing because the number of seniors is up and the wealth heldo by those seniors is up, and industrials supply down.
Laurd the big service that the the boomers are looking for is can you find me a dog walker? I mean, that's really what it comes down to, Lauren. There's a national housing crisis. Now you tell me single family rentals are going to work. And as you well know, Blackstone has been a pinata where big inst evil institutions is like Morgan, Stanley and Blackstone are taking out single family rentals.
I mean, you're definitive on this. Respond to the idea that evil New York City institutions are buying up all the single family home rentals, boosting the price of a rent.
Look, we think there's a better way to do it, and the way we execute is build to rent. So we are building new supply in purpose built communities where residents get the benefits of multifamilies, so they get highly amenditized community living, but the benefits of single family insofar as they're larger units, they get their four walls and we're adding supplies, so we're not competing with individuals looking to buy homes. I think we're helping the affordability crisis there.
So Lauren on office real estate, do we have a sense of where the market is an urban larger urban markets in this country for off real estate. Have we had transactions that are actually setting the market price for us?
Yeah?
So there's wide buy furcation here, right, And so there are certain type of office that I think will continue to really perform, the best of the best office, that which has the right characteristics to attract tenants, that which has the right frankly sustainability characteristics. We think that will continue to do well as we go ahead. And I'd say there's not been a lot of that trading, but
we think that will continue to perform. And what I can tell you is that rents in some of those assets, even in markets like San Francisco, are above pre COVID levels. Flip it to the other end of the spectrum, and there's office that simply shouldn't exist as office, and that's trading seventy plus percent down because it needs to be converted to an alternative use.
Okay, and are we seeing some of those transactions in the B and C type office because I'm just thinking about New York City or Third Avenue from fifty eighth Street to forty second Street. What's that market like?
Yeah, so you're starting to see some conversions of office to residential. I would warn that there are only certain types of buildings for which that works. Tends to be smaller floor plans, floor plates, tends to be buildings with more windows. There are a variety of different physical characteristics that make certain buildings better contenders than others. But are we are in the very early innings of that. And part of that is similar to Post nine to eleven.
There is some private public partnership.
Thanks so much. This has been great, Lauren, don't be a stranger. Love to have into the office, Lauren, your data. Look at the front page. Is Jen Tucker in for Lisa Matteo, John Tucker with the newspapers?
Yeah, this one comes from the Washington Post. This morning, George Stephanopholis caught on camera expressing doubts about Joe Biden. The ABC news anchor, who of course recently interviewed President Biden about his fitness for the race, was caught on camera yesterday indicating he doesn't think Biden can serve another four years. So he's seen in jim clothes outside the studios in a video published by TMZ. He's asked by a passer by what do you think do you think
Biden should step down? We've talked to him more than anybody else lately, and you can be honest, I don't think Stephanopholis doesn't look like he was actually he knew he was being recorded here, just off camera. He's captured on fuzzy audio responding he doesn't think he can serve four more years Satan. Late yesterday, Stephanopolis acknowledged he was the person seen in the video. The remarks come days after the interview with Biden, during which.
Choel TMZ think.
Yeah, I mean, I don't know if the person was working for TMZ or just you know, but again that.
Means so John, you live this every day. You're out it on the deck at Atlantic Highlands, and you've got to be worried that you're recorded.
Nobody over the lobster Atlanet Earth here is what I think about A.
But it goes to the issue John, I mean a can he win an election? Be can President Biden serve a four year term? So it's a valid question.
The gentleman from ABC is not looking at the immediacy and the debate that's out there, whether it's Trump or Biden. He's saying, either of these people have to get out four years. Yeah, I have to get out four years.
Right, you know, well, good luck with that. This is from the Wall Street Journal. Ivy League alumni clubs hustling for members. I go home on sixty six Street, Acrosstown. I don't know how many of those Ivy League clubs I pass. Yeah, I could never get into one because I'll give you well, I went to Harvard on the Hackensack. Maybe that counts. The Prince. The Princeton Club in New York losing members bleeding cash before closing its doors in
twenty twenty one. Some remaining members exploded a ditch overhaul that's stalled, so it's closed. So now the Ivy League schools with clubs of New York tend to keep most membership and other information private, but some of the recent events suggests more distress the Yale Club, for instance, changing its admission policy. You don't have to have.
You don't have to go to Yelle Club. I'll give you one vignette on this quick. I didn't take a lot of time on this, but I believe it was Princeton University Press called me up and they said, Common is going to be here doing his book. And there I am at the Princeton University Club with Paul Voker and Daniel Kahneman as he talks about his iconic book. And we've just lost him, of course, and it's great. My basic take John on this is the Harvard Club. They've put a lot of money into and they kept
it spruced up over the years. The others, I don't think they've done a thing since nineteen sixty two. Like you know, they they just ran out of time and they didn't keep the investment going to make them fancy.
You don't appeal to a younger generation when you have like these, you know, big stuffy cheers and like cigars.
Smart there Daniel Balloon's there's you know, Cafe Ballue. That's where the young kids are.
Anyway. This next one's from the Wall Street Chournal. The latest cringe worthy corporate buzzword. The CEO of the healthcare Comany recently discussed his company's latest results during the Q and A. One of the analysts said, I wanted to double click a bit on some of the commentary you had. This is one of the fastest spreading corporate buzzwords in recent years. Double click. I think it's a little obnoxious, but double click defenders say the phrase encourages deeper thinking.
I read the article. I'm as guilty of this as anybody, and I don't you know double click is it? You know? Like does it? I don't know.
There's something about these tech inflicted buzzwords, especially after gain traction you have like network band with takeoffline. The best part of the article is the Wall Street Journal reporter actually tracked down the guy who invented double click, the real literal double click. The former Apple designer Bill Atkinson retired. Now he was reached on his boat by the journal. He says, now steer clear of such usage.
Yeah, he's not gonna Lisa will be double clicking again. I could just see Lisa, you.
Want one more?
Well? Please? All right?
From Bloomberg Law, Bolero accused of widespread age bias. A federal lawsuit in New York charges Bolero to subsidiaries engaged in nationwide discrimination against workers aged forty and older. In a push to make over traditional bowling centers they acquired
into young hip entertainment centers. So, at least according to this too, the hiring practice is that the companies implemented part of the ship designed to preclude potential candidates age forty or older from secure jobs at their bowling alleys.
This is.
Oh, it's a bowling.
Bolero is bowling. It used to be uh, it was from Greenwich Village. It used to be bowl More and they transformed themselves into a national brand and adopted the name Bolero.
So people still bowl.
People still bowl, but they want to appeal to a much younger audience. And that that's aside from this lawsuit.
I mean, I don't know if you guys ever were down there, but down below Home Depot, we've got the surveillance bowling lanes. They're like their candlepi They're not like like real pit four of their candlepin candlestick.
So it's like, you.
Know, anyway, w B.
Sure Lisa would have done a better job.
I think so too. Let's double click on right. I guess, thank you. So Win's Lisa.
Next week, next Monday.
Yeah, she's out there for a few days after we got Carol Master Timson.
She's out there doing quote unquote company yep.
Yeah, like a real job. John Tucker, thank you so much for the newspaper. This greatly appreciate it. This is the Bloomberg Surveillance Podcast, bringing you the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am
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