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Well timed. This is a gentleman driving forward all of our levant and Eastern Mediterranean coverage. Ownerant started out at a nineteen years old as an Associated Press intern in the Middle East, has all sorts of positions, including his leadership at Bloomberg News and joins us from Istanbul This morning on our when Tom Keene sees news agency headlines some fars or tasmum, are they reliable to a grizzled pro like you are? The Iranian news news agency is something more than propaganda.
They are something of a propaganda. But on the other hand, in the last half hour or so, there have been our sole source of information when it comes to Iran's reaction to Present Trump's social media postings, which came about just less than an hour ago. I think I understand where the question is coming from. How much can we
really rely on them? To a certain extent we can, especially in the current situation because so far there has been a very concerted effort in Iran, judging by, as you said, the number of news agencies that we're seeing
the same headline coming from. And that's the fact that Iranians claim that there has been no talk between the US and Iran about how to end the war, and the fact that present Trump has avoided or has walked back from his earlier pledge to start attacking Iranian energy sites is down to the fact that Iran's reaction to his comments over the week Over the weekend has been so strong that Trump has decided to sort of de escalate himself without actually talking to the Iranians.
So, approximately ninety minutes ago, we got the tweet from President Trump about, you know, standing down some military actions against some other energy infrastructure here. How do you think that came about? Is there a policy shift here, is there a strategy here, or is it simply a tweet?
How do you think that came about?
Well, we were all under the impression that Trump really meant when he gave that forty eight hour deadline to Iran to reopen Hormus, and everyone in the region, from journalists to government officials who were operating under the same assumption that there could be an impasse at about seven forty four pm in Eastern Standard time later today, and it would be followed by mutual strikes, much like what we saw last week when Israel first started South Parts
Gas Field in Iran, a price energy asset, followed by massive Iranian retaliatory strikes on the Gulf, especially in Qatar, where Katargas seems to have lost about a fifth of its allergy capacity production capacity for as many as five years now. Having said that, and this can be said both about Trump's policy or stance since the beginning of the war from February twenty eight to anything else, including the war in Ukraine, Trump has always conducted pursued a
very vague and unpredictable type of diplomacy. Sometimes he says it works, sometimes it doesn't. So I think this is the kind of light under which that we should treat
the latest US if I may call it that. And also one thing I think to keep in mind is the fact that he did this right before markets in the US or right around time marks in the US work closing and now the new deadline, if we can call it, that is going to be over the weekend, and that shows that there must have been some kind of market consideration that went into the thinking behind the latest social media post by President Trump, Honor.
I know there's some concern in the Golf region that the US may walk away from the Straight of Foremus when if it disengages with Iran, leaving that part of the world too.
I guess local actors to deal with Iran. What's the reporting on that.
Well, this is an extremely important point. Golf states that these publicly and even in privately they have said, they have maintained that they have been trying very hard or they have tried very hard to convince the US against attacking Iran before the war actually happens. But now that the war has begun, there has been a divergence in policies across the Gulf, the Persian Golf, especially Arab states
of the Persian Gulf. So once school of thoughts says, well, now that the war has started, it needs to be concluded in a definitive way, so to speak, which means that Iran would be left in no position to basically be source of a threat anymore. But on the other hand, there have been there have been countries in the Gulf that have basically been pushing for an actual solution to the problem. They're not left alone in this shit opened the hormus.
In the shades of mister Irdawan over gone a span of two decades, Where does he fit in to the Eastern Mediterranean calculus? Like the simple question owner around is whose side is he on? But to be more sophisticated than that, what have you said from mister Airdawan? Is he looks south to this war?
The answer to first question is no one. He is on the side of no one. He definitely does not want to be seen as participating in a war that was initiated by a US Israeli alliance. He is definitely allergic to the idea of being seen as part of that alliance, the Israeli because of the Israeli part of the alliance. And secondly, we should not forget that you well.
Iran is a massive neighbor for Turkey. It's been there for the last few million years as a nation state or as an empire for the last thousand years or so, and it is the country with which Turkey or its predecessors have not had a war for the last four hundred years. In fact, yeah, almost four hundred years. The Turkish Araanan border is the oldest unchanged border that Turkey has.
It's been unchanged since sixteen thirty nine. The second when he looks down to the south, I think, you know, we've seen from the beginning of the war that he has been genuinely pushing for an actual end to the hostilities because he knows the longer it lasts, the worse Turkish economy will be through the various disruptions to the global supply chains and oil prices. So yeah, he definitely does want this to come to an end as soon as possible.
And I thank you so much for your precious time around driving all of our Eastern Mediterranean coverage out of Istanbul. 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.
This is the best time ever to speak to Nelson. You he's with the Lions Bernstein. He has a title called Head of Equities it's very impressive. Where it's really go join us today, but it really matters is at the University of Pennsylvania Systems Engineering memo pro tip the hardest engineering major. Okay, someone that knew its systems analysis, you're kidding me. Ah, easy, A right. And there's linear
systems theory, there's signal and information processing. But the dreaded course was e S thirty ten probability and that's where we are right now. Define I'd say this with great respect for your parchment. Define the difference now between the risk and the uncertainty in the markets.
Risk is really difficult to manage right now. The as you just see this morning. You know, one tweet can turn it all around. But I think what it's really getting at is just the fragility that we do see in the markets. And we're dealing with really three main issues. One is obviously geopolitics, and we're getting close to a point where the longer this goes on, the more things have to shut down. So just the different commodities that
get produced out of the Middle East. You can take months to restart some of these things, but then layer on top of that some of the existing fragility that's already been in place, which is that equity portfolios were already highly concentrated to start with, and then AI is increasing winners and losers, and those motes that had been there in place for so long, we're starting to question how durable they are.
Aside from the geopolitics, so we can put that side just for a moment. How do you think about the US equity markets versus the rest of the world. Here we did have some outperformance in twenty twenty five outside the US.
Is that still play here?
I think it should be. The U is getting a bid right now. It could be because of what's going on with oil, but it also could be because that's where as investors are taking in risk, that's where passive investing is. But I think there's a great opportunity to continue to diversify. With the US, you have this issue of concentration. Fifty percent of the US market is in technology. You go outside of the US, you get to exposures with different themes in financials, industrial, as consumer.
But all of this, what's it, you know tomorrow from the wonderful Arthur Levit so so influential to me From Arthur Levit, what's it mean for Microsoft, I mean March thirty one is going to end.
They're doing AI. They're still going to make revenue, They're going to still make thirty forty sixty percent margins. What's the feature of life goes on here? For the growth winners.
What you have to really think about with these growth winners is how are things changing for them? So we talked about this before in previous sessions. How much cash flow is plateauing now for these big growth winners because the amount of capex that they need to invest to keep the to keep the hyperscalters going and investing in data centers, that changes the dynamic of what they've had in the past. On top of that, these modes that some of these growth winners had is now in question.
You know, can AI disrupt their ability to grow revenue without reinvesting in the business.
So that was a big, big trade just over the last several months. Kind of some of these software names, in particular software as and service names really in focus. But it just feels like it's Tom mentioned Microsoft Salesforce. These are they're so entrenched in the overall economy, it doesn't seem like they could be at risk yet the market's not too discerning at this point.
You know, I think what we need to think about really are three three ways of managing risks today. First of all, if you think about AI disruption and you think about inflation, what that does is it really focuses you on shortening your duration of cashloads. If you want to get to things that have more visibility around those cashloads, you need to think more critically about where to find defense. And then you need to be more intentional about diversification.
Did you get my scripted? One of our interns send my question script this morning? Nelson, you were us with the lions burn steem wonderful to speak to him with this acuity about risk, probability and the ambiguity out there. Dow features up two percent, exploding higher what forty minutes ago, a presidential tweet of five day delay on action from the White House in Iran, in Israel strait of hormones as well. Oil plunges a one thirteen down to a
one oh four. Right now all weekend led by James Diamond on a cover of Barons was the idea of hedging up. Explain the efficacy you see with all of your work in your math of saying I want to participate in the standard of course five hundred, but I'm willing to give away some of the long term capital gain to hedge and be less volatile. It's also in right now, isn't it.
Anytime you can reduce volatility, but also when you can reduce volatility and get incremental returns, that's a great trade. And if you think about international equity markets today, you have an opportunity. And I'd like to say, have your vitamins and also eat your ice cream. The You know what you can do is there are some great catalysts
outside of the US that can generate returns. You've got in Korea, You've got in Japan, you've got governor's reforms where shareholder returns are really being in focus, and these companies can not only get better return earns, but also get multiple expansion. I think China could be a really interesting play here too. If you think about China, you've
got a very different set of return drivers. In China, you've also got more energy resilience based off of the infrastructure investments that they've made.
In the US, talk to us about the earnings in the US marketplace.
Are the earnings growth forecasts enough to support this market here?
Do you think.
There is enough growth to support the forecast? But it is very dependent on the Fed's ability to continue to supporting that. And so I think that's why we're getting to a point where it's very tricky to understand the probabilities because the longer this lasts, we don't know if inflation would start feeding through.
So what do you expect our FED to do here? I mean, it seems like they're gonna They're comfortable just to hang where they are, no need to rush. We've even had the marketplace pricing in some great hikes this year. Yeah, I mean there's a talk about you know, coin flip here.
It's it's in a very fragile balance. And so that's why I think it's important to look at visibility of cash flows from these companies with real assets and uh in strong economic drivers right now.
I was at the game quinnin piac event here twelve hundred college kids, and I did mention Peter Bernstein's Against the Gods on risk, uncertainty and ambiguity. I mean, it is the definitive non Matthew book. As Nelson, you knows the math cold, He's with the lions. Bernstein at Howquity's being 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 Auto with the Bloomberg Business app, or watch us live on YouTube.
Calm is what we Need. Comms and Order with Nancy Tangler, who she said she's too young to have seen it all, but pretty close, CEO at Laffer Tangler and Investments. In Reminiscence of a Stock Operator, which we've all read fourteen times, there's a point where the antagonist just says enough and takes the slow train to Florida, like in nineteen twenty five. Where's the Tanglar? The laugher tanglar slow train to Florida? Right now?
Good morning talk. Well, we bought calls on Friday and I felt pretty stupid this morning until we saw the rhetoric coming out of the White House. And that's what it is. We don't have anything to back it up. We don't know the algorithms, read the headlines. They drive the stock futures. Before the opening after so we've been repositioning, trimming back on oil, adding to some names in the infrastructure structure space, and particularly in software. That group bottomed
just about the time the Sittrini report came out. We didn't know that. We felt like we were seeing some compelling valuations.
Okay, So our laugher would sit in a couch, the same damn yellow couch. The Oval Office looked differently under Ronald Reagan, and Laugher would say, excuse me, mister president the markets. Who in the Trump administration, like in the last twelve hours or eighteen hours, is playing the art Laugher role of saying, excuse me, President Trump, we got a problem. Who is it?
I think it's Scott Besson, I really do. I think he demonstrated that after Liberation Day when the bond market melted down. Remember Jamie Diamond said we were going to go into recession, and suddenly they found religion. That was what gave us confidence to at least take a dip our toes into calls on the spy just because we had some clients that were, you know, asking us to take a look at that. And I think for me, I felt like the weekend would have been more defining
than it was. But then we see it again this morning that the President came out and said what he said.
Nanci, We talked to you via zoom from Scottsdale. But you guys are having this crazy heat waves out there.
Is that why you're here in New York?
Absolutely?
Fall of course, unbelievable even by your standards.
You guys are dell. Do you understand all that kind of stuff? What's going on there?
Yeah? I mean it's just been wretched.
Yeah, So hopefully you don't summer out in the desert.
Hopefully, good Nancy.
So what are we doing here? I mean, we've put the geopolitics aside. I want to step back and look at fundamentals. The earnings look pretty solid out there in corporate America. Are they enough to support this market going forward?
I do think so, Paul. I mean, earnings are backward looking as we know, but what we saw were so many triple plays of companies beating on revs, beating on EPs, and then raising guidance. So we think once you get the first sort of ship through the straight of hor moves, that we will begin to see a return to fundamentals and if we are, in fact in a slowing economic environment, then you do continue to want to own technology which has putting up, you know, twenty plus percent earnings growth
across the sector. So that's where we've been adding. We had been trimming them in the summer, and we're adding back.
What don't you make of this AI trade?
On the maybe the other side of the AI trade, which is which companies, which industries, which sectors might be at risk from AI?
And software and software as a service.
Really took it on the chin. So some names of Tom and I like, like, you know, we see like a Microsoft really under pressure.
What do you make of that?
We added to Microsoft Service Now, which was a little more controversial Palenteer. One of the names we had. Two names we had exited were Adobe and Salesforce, and it wasn't necessarily because we thought they were going to be losers, although we didn't think the Adobe CEO was pivoting fast enough. And in fact, there you have it. I mean, the stock has been dismal.
At the Breakfast club in Scott Steal. If I was to go in and have the avocado toast and the Tangler booth in the back, the guys up at the front bar. They don't look scared. Their retirees obviously advantage living in Scottsdale. But the answer is what do you see from the core boomer retirement market. I don't think they look rattled because they've had a few other things along the way from mister Mueller's Vietnam.
We grew up with this, We grew up with volatility. And remember we were shifting I'm a boomer, we were shifting to four a one case. I'm a deep boomer.
It's it's the pace on the Scottsdale.
We were shifting to for a one case that we had to live with volatility, and it was our money we were putting in. So I think the boomers understand the markets. Those were the clients that were calling us and not saying sell, but saying, hey, is there a way that we can play the shift in the trend when the market does begin to go up, And that's why we bought calls.
Yeah, thank you so much, Nancy greatly greatly appreciated today. Yes, we'd love to visit in February.
We please.
Dale left for Tangler Investments. Nancy stay with us 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 Apple Karplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.
One of the great features of the McKenzie Global Institute MGI is they hire people with jaw dropping competency. One of them is Olivia White, Senior Partner Director Mackenzie Global Institute, and she is carried forward the baton of research excellence.
There.
She stopped me cold a couple of weeks ago with a series it was out, playing off Mark Kearney's word geometry, geopolitics and the geometry of global trade. Olivia White joins us this morning from MGI with a rewrite, if you were to publish today, how would tariff splashes, AI waves and the ripples be different with this war?
That's quite an introduction. I think I might say something similar.
You know, one thing that we saw when we looked at how trade evolved in twenty twenty five was that her term volatility and splashes, if you will, can be super important, but the long term waves of.
Change are often what you need to be able to look through to see.
So we saw.
AI trade or trade in AI related goods going up a lot, and I can say more about that. We saw China moving upstream in the way that they produced intermediate goods that fed factors across the world. Right, so we saw these long term things. It was a good reminder look through the long term.
I mean, you've got some great charts, but the bottom line is in a number of our guests have said we're AIB in six months. We don't know, but almost from an organizational research out of your stand for years ago, where does mg I think AI will be in three years.
It's going to be a bigger deal then than it is now. You know, it's very clearly a big and important wave of the future. You know, we did another piece of research recently when we looked at foreign direct investment announcements and saw where they were going, because where money is going today tells you something about where production will be tomorrow. The biggest gainer they are also announcements no surprise, into the construction of data centers and across
the world. So lots and lots of signs that tech and AI continues and will continue to be a major force Olivia.
We've got now about a year of hindsight, if you will, or a year of experience with tariffs. What have we learned? Did they work? Did they not work? What are they just an impingement to global trade?
Where are we?
I think we've learned that the global trading system is a complicated network, and tariffs made a big splash and some ripples.
They majorly led to a drop in a trade between the US and China that dropped about thirty percent over the past year, but that was a trend that was already underway. You saw some resorting in terms of who in the trading system was doing what. I think we'll continue to see that. But really what you saw was that you had a bunch of trends. As I've been saying, that we're pushing forward anyhow, and you got a big sort of rearrangement in response to the force of the tariffs.
I love you White with US Senior Partner Director Mackensey Global Institute. I will put out on LinkedIn and Twitter. There's spectacular MGI Geometry of Globalization paper here. I could go any number of ways here, let me just pick on this one. I love Exhibit three Paul, I know you looked at exhibit three. John Tucker, did you look at Exhibit three, three, four and five? Really good as well, Olivia. Why it is stunning how EU is behind on trade
in AI related goods. And this is a typical Mackenzie question, when in God's name to Europe get their act together?
You know, I hoped, I hope that everything Europe is saying about its understanding about.
What it needs to do will will presage some action. But you're right, there's a lot that could be done that hasn't been done yet.
So, Olivia, I think many of us grew up.
Educationally and then professionally in a world where globalization was the number one trend.
It is the backdrop to everything we do. Is globalization over.
You know what, The fact is the world remains extraordinarily reconnected or interconnected, and so one thing that I've been saying an awful lot is it's not disconnecting, it's reconfiguring. So people are trading with different trading partners, trading patterns are shifting, there's diversification in who companies are buying from. But you get this big reconfiguration of the super connected global network rather than something that's an end to connection.
What was your first day like at Stanford in physics and mathematics? What was that for you?
Because a lot it was a lot warmer and sennier than it is here today in New York.
I'll tell you that. What's your advice to people at home? Boys and girls? But just jump starting the math excellence of Olivia White? What was in the pixie dust at your house that gave you the confidence to tackle calculus and beyond.
I don't know, believe in yourself.
Okay, Olivia White, thank you so much, greatly appreciated. See your partner, Director Mackenzie at Global Instudio.
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