Inflation & Valuation Vertigo

COVID lockdowns and the economy booms. That's causing some volatility in the stock market, obviously, especially among the big tech companies that led the bull market over the last decade. So how exactly should we think about inflation and what it means for the market and what type of inflation exactly should we expect. Katie, our guest, has some thoughts, and as always, we'll close out the episode with our tradition the craziest thing I saw in markets this week?

And if you spot something crazy, give the Bloomberg Podcast hotline a call at six four six three two four three four nine zero and leave a voicemail and maybe you'll make it onto the show next week, and speaking of making it on the show, we have a special message from Sarah Ponzack if we could play that. Hi, everyone, it's Sarah. Some bittersweet news to share. I'm moving on from Bloomberg, which sadly means leaving what goes up behind.

So I wanted to say thank you to everyone who listened, help the show grow, and of course called intertweeted with Crazy Things Takes. The podcast is obviously in very great hands with Mike. I just hope he can find someone who laughs at his jokes as much as I did. Of course, my just kidding. But now from the other side, I'm going to be an avid listener and I'm very very excited for that, So everyone please keep in touch. I would love that. I'm at at Sarah pon sec

and goodbye, a very bitter sweet farewell. As as Sarah said Katie, I think the bitternesses on on our end and maybe the sweets on her and because we we sure are sad to see her go. Absolutely Luckily, we do have a good support group here at Bloomberg to

UH to help us handle this. So UH next over the next few weeks and months, you're gonna be hearing from quite a few different voices from around the Bloomberg Company, around the world, a lot of colleagues with some fresh perspectives, and they'll bring in some fresh guests of their own. So stick with us. We're gonna we're gonna keep it going. We wish sire the best in her new career in wealth management, Katie. If I ever actually managed to accumulate

some wealth, I might I might give her a call. Absolutely, She's at the top of my list. Yeah, So anyway, let's get to the markets chat now. We are very happy to welcome to the show the head of global investment research at Footsie Russell. His name is Philip Lawlor. Philip, welcome to the show. Hell Peace be with you and Philip. It's funny, you know, uh, guests like you helpfully send us some notes about what you're thinking about, and oftentimes

there's sample questions in them. I always feel like I'm cheating a little bit when I asked one of the sample questions, but your first one was so good that I'm just gonna cheat and and ask it to you. You you say, and I think this is a really important concept for the market right now. Is good news bad news again, you know that famous sort of cliche that we stumble into when it's really the central banks

that are that are running the show. And uh, you know, green shoots in the economy or inflation, get the bond market spooked, get rates going up, and people are worried about that the central banks are gonna have to react, and what it all means for this euphoric rally we've seen in stocks. So what is the answer to that question? Is good news bad news? Again? Do you think are

we in that stage again? Yeah? But I think look, just before we get to the actual answer, let's just step back and understand a bit of the journey we've been on. And clearly, you know, in this reflation trade that really kicked off in in the sort of from early November on, which that'svaccine optimism, expectations of the genuine V shaped recovery kicking in. That built a lot of exuberance and we saw that manifested in the scale of the market moves. We've seen the pickup in risk appetite.

But you know, I think there is now a case of markets in a way injecting premature pessimist mint into the market. They're getting a bit spooked too early in this cycle. The good news, clearly is the degree of stimulus the scope for the recovery, and that's all been duced up by the stimulus package that's come in on your side of the pond. But you know, is this

really a case of excessive stimulus? So I think we need to understand that actually what we witnessed last year was an economic shock equivalent to a major, major war. And it feels still a trifle premature to be worrying about it being too hot on the way out before we've even ready started that journey. Well, I'm a little upset, Mike, because I wanted to steal that question and ask it first.

But I think Philip, you're answer tizing pretty nicely to what I'd like to ask, because I mean, the big event this week, of course, was the FED, and uh,

this meeting was actually exciting. I mean, we knew exactly what we were going to do, but we did get an updated DOT plot and that turned some heads because two more officials now expect a rate hike by the end of the medium Dot of course, it's still says that they're on hold until but Bloomberg Intelligence and I've seen a few others have already said that, you know, there's a possibility this view could catch on, and I'm

curious to hear your thoughts. You know, especially as we start to see stimulus checks start to hit bank accounts, do you think that view could catch on and we start to see more dots move or definitely I think clearly, I think there's very little credibility that the Fed are going to hold rates a steady as power has told us, and quite rightly, the market, and you can see this in the futures market is anticipating mid next year is when we're going to start to get the upward inflection.

But the question is is it axiomatic that arise in interest rates is bad for risk appetite And the answer is no, patently, it isn't if that drive in rising interest rates is being driven by a rise in nominal GDP growth. And you know, the time that you worry about a tightening cycle is when the perception is the Federal Reserve are going from just tapping on the brakes to slamming on the brakes. You don't risk assets do quite well while they're starting the process of notdging rates higher.

Because typically markets are enjoying the economic environment that's justifying the higher rates. So it's all about timing. I think the market is just possibly jumping straight to the that the slamming on the brakes stage before we've actually even started the genuine kicker of the pick up in growth and seeing how savings ratios draw down kicks into economies. With with this conjecture about that, but we haven't seen

that actually happen happening yet. We're going through the classic cycle in the way we've had the vigilante movie in the bond market. The bond market antenna moving first, and that's really been expressed through inflation expectations. But arising bond deal is giving us a sense that there's some credibility about the Fed's position in going forward. So what we've then got to get is the FED shifting its guidance and then that being manifested through some sort of tapering

of their quee. And they've got to go through that sequence before they even get the actual part period where they're tightening interest rates. So there's a journey to be work through here. How quickly, how constantina that is is hard to say, but you know, we all we've really seen is the bond market vigilantes get to work. They might well be getting a little bit ahead of themselves in terms to the scale of the inflation shock. We

can discuss that as well. But even if they're right, you still really got to see the tone of the messaging from the FED changing, which is the dot plots. But the more significant one will be just at what time do they start to pull in their que program from a hundred twenty billion a month down to eighty or sixty or or whatever, and that that will be the next big step. And as I said, I think this will all be conditional on the underlying economic environment

that they're doing this. They won't be doing this in a vacuum. So we've got to really position ourselves if they start tapering that they're doing that in the latter half of the year when the US economy really is kicking back. I've yet to really be convinced that that's necessarily going to feed into a discernible risk off mode for markets. But felt about you know, you brought up that notion of a inflation shock, or at least people

worried about their being an inflation shark. I think inflation is such a fascinating topic because it seems way more controversial than it should be. Right, you know, the CPI index says one thing, but people say, but my hamburger price doubled last week. We're look at the asset price

inflation in the stock market. So I know you've done some work sort of trying to suss out exactly how we should think about inflation, like what measures to look at, and also the difference between kind of the good and the bad types of inflation that we might experience. Walk us through sort of some of the work you've done dissecting inflation. Sure, you know, we're all talking about inflation as though it's a it's a single word, but in

fact it comes in multiple guises. There are multiple drivers of inflation, and some are sinister and some of the nine. And what we need to understand really is what are the core drivers that the inflation we're seeing in this cycle. You know that the really bad, sinister inflation that central bank will keep central banks up at night is when they see a pick up the inflation expectations driven through

cost push and wage growth. You know, where the labor market is red hot, unemployment is incredibly low, and you're seeing wage growth really accelerating. That's the type of inflation that really makes sent all central banks break out into a sweat. Now, clearly we're not in that environment. Now. What we're witnessing now, I think we're all aware of is the cost push, which is input costs. This is

supplied disruption, base effects. You know, disrupted supply hitting a pickup in demand is going to have a temporary pickup in in input costs, and and you know that's feeding through into the cp I. Now the question is is that is that a permanent or a temporary shift? Is that just because of the base effects kind of wash itself out in six months time? And in fact, the really big problem for for for the economy is this, there's just going to be a replay of what we

lived through into two thousand and eleven. I don't know if you remember in two thousand eleven, but you know, we come out of the financial crisis, we'd have quantitative easing. Accusations are too much liquidity chasing too few goods, says all commodity prices going through the roof cp I went from one to three, and the Federal Reserve had a lot of criticism, but quite rightly, the Federal Reserve saw this is actually just a big one off hit at the cost of living that was going to damage real

disposable income, real incomes. If people's pay is not going up, they're not getting big pay rises, and the cost of living goes up, it ends up being at the end of the day, disinflationary. So I think what we've got to be is more sophisticated as to what's driving the inflation. I think this is all about this temporary base effect supply disruption hitting a pickup in demand. That the risk is that this is going to hit an economy where the labor market is not going to see wage growth.

You know, we we we've still got some structural headwinds in terms of the labor market as we work through this COVID impact, And I think the central banks are quite right to most probably just say we've got on the side of caution and just wait to see how this works its way through. Of course, if that leads to a structural shift and we do get that being reflected pick up in growth, then they need to respond more aggressively, but don't act too quickly because that will

create what we call a policy mistake. So assuming that plays out, and this is sort of a similar one off, perhaps transitory, dare I say it boosts and inflation. I mean, how do you expect that to trickle out in markets? Because obviously the cyclical rally that we've seen, which is premised on a sort of sustainable rise and inflation, it's come pretty far at this point. Yeah, So I mean, very good question that lots of sort of knock on

plays on this. I suspect, you know what, if we look at break even inflation rates using the tips, you know, I think you might well find that they've done the majority of the heavy lifting already that you know, they're back up ready to where they started from. There's been mean reversion. I've got a feeling we might not see the break even inflation rates moved much higher from here.

So we've done the hard yards in that regard, and I think then we as we see this rippling through it's this we're looking at this over a six month time frame, was probably through to the end of the third quarter before it the base effects then were off and in between that time, Yes, I think we've had a lot of the we're getting a big shift in the valuation impact of rising inflation on on the tech stocks, the quality the growth stocks. They the highly priced, highly

valued stocks. But of course that that does imply if the inflation rates starts to level out or as we approached the fourth quarter, then that creates more of a tail when for those sort of stocks. So I think we've still got some more rotation to do. Kirt see the high valuation impact the rising bond shields planed the into that. But you know, I think we've we've we've moved quite a long way here. I mean, bond shields are really have reversed all the way back to where

they were before we have the COVID shop. Let's unpack a little bit that that relationship between interest rates and valuations. You have a great phrase here, valuation vertigo, you call it. I might I might be still on that. I'm fair warning I might be still on that and using that one. That's good, good alliteration there. But I know you did a piece um talking about hypothetically if we should get a mean reversion in priced earnings ratios or I guess

it would work for every valuation metric. But if we if we sort of mean reverse on valuations um and you raise the question you would this be a painful reversion to the mean? My new jerk responses, yes, I believe it would be very painful. Walk us through it would that type of reversion have to by definition be a painful time for the market. Okay, Look, I mean

there's an inference. We all know that last year's move results in a significant rerating the markets, most notably the US the Russell one thousands large cap you know, significant rerating and that was the key driver of returns. And as I said, that created this sense of vertico were now so elevated where we're going to go. And the the inference from a very high valuation is you can have a damaging D rating, which is you're just going to get the market correct the price, the P element

of the P correct to bring it down. And the problem with that is there no empirical evidence to show that valuations very useful market timing tool. If if you were a portfolio manager and you were just working on the assumption that very high peas we're going to axiomatically lead to a market decline over the next six months, that tends not to work. High peas tell you something about the long term returns you can get from from equities. So there are two ways markets then can deemed typically

de rate. One is actually through that this this this inflation. If you get really a pick up an inflation that is can be very can lead to a very big D rating. If inflation averages five pc on average, you get a pe closer to ten ten times. I mean, you would see a halving of markets on that type of shift, but that's got to be a structural shift in inflation. What we're saying is actually we think we're at the stage of the cycle where you could actually get what we call a benign D rating. And that's

again deconstructing the P ratio into its two parts. That's saying, let's put what happens to the index the price, to

one side, and let's just look at the earnings. And we're saying, if we are confident about the recovery that's coming, and we've seen what the Federal Reserve done with their forecast for the US, and we've seen what the o ec D you've done on the similar sort of upgrade, if we start to see that coming through, you're going to get very powerful what we call operating leverage kicking in, and that that is understanding that for each pick up in nominal GDP growth, you tend to get two percent

pick up in revenue growth. For for you know, traded equities are in AGGREGA, that's a long run historical average ratio revenue growth being twice that of nominal GDP. So you can just do some very simple modeling and saying if we're looking at potentially over the next twelve months, US nominal GDP getting close to eight percent, and that's looking at goods really substantial double digit revenue growth, and

that's way above the nine revenue growth analysts are currently forecasting. Now, if you were to get that for each one on revenue growth, it feeds through to the bottom line EPs with a multiplier effect. So the point is analysts of upgraded their EPs the E, but I suspect they are behind the curve in the sense of factoring this top down operating leverage. If you get that big kick in the E, you can still if the egoes up at a faster rate than the P, you actually get a

D rating. And we've had lots of episodes of that. In one of our bits, which just showed actually what happened, you know from seen through to the middle of you know, the market went up ten EPs went up. That meant the P and the market fell from nineteen and a half time to seventeen and a half. That's a painless

D rating. So I think it's got to be are we on the cusp of the P correcting falling the P dropping because the market correct Of course that could happen, but actually it feels more realistically if we're looking at this pick up in growth coming through, I think analysts are going to end up chasing these upgrades upwards over the next six months. That analysts have a pretty poor track record of getting in front of the macro curve.

So in thinking about what you're describing with valuations and with you know, the stimulus we're getting from both the Fed and from Congress, I have have status to throw at you. Um. I saw this week that it's the best quarter since two thousand for stocks with trailing twelve month net losses. I saw another stat um these are from Goldman Sacks Baskets that we use a lot, that companies with weak balance sheets are on track for their

best quarter on record. Against companies with strong re balance sheets. So I mean, I'm curious, is that a trend that can continue? You know, if we're truly in a world where the phenominal GDP could get up to eight percent or do you see that you know? Unsustainable? This is this is I mean, we encapsulate that by talking about this in terms of factors. This is basically seeing value

stocks now starting to outperform. And remember that they've been structural under performance for five six seven years, so you it had been the US market have been a very focused, concentrated market. The top fifteen stocks were driving the US returns. US was the standout market. And we know those top fifteen stocks were all in tech and you know that the likes of Amazon and consumer services, and that was

driving what we call the quality or growth factor. And of course growth does well when you when aggregate growth in the economies are reasonably scarce resource, when you're you're reasonably suppressed nominal growth level. If nominal GDP is picking up on a meaningful basis for a sustained period, when I mean by sustained is twelve months to twenty four months, growth becomes much more commoditized. So Therefore, people quite logically are reluctant to pay the high peas for those growth

stocks and go down the into the value arena. And I think that's really what we've been seeing occurring since November. The market's got the message and it started that rotation. So when you look at those factors, if you want to be in the quality factor, you've got to be long basically technology and something like healthcare. And in value you've basically got to be long financials, and and that's really where we're seeing this this this this major rotation

going on. So yeah, people are looking at beaten up stops. It's the value area that's getting the interest, and they're doing that because they can see this pickup in growth coming.

It's interesting, Philip, I think it's kind of a tricky era to to be looking at the market through the lenses of factors um because of like you mentioned, the base effects from last year are so outrageous that, uh, last time I checked anyway, the earnings estimates were the value indexes were for higher growth than the earnings growth

for the growth indexes. So so to me, you know, it's it's people are still chasing growth, albeit uh, this temporary growth that a lot of the members of the value factor are gonna show year over year because of the lousy uh environment of last year. To me, that makes it feel very much like, um, this rotation has an expiration data on it, that it's not necessarily a multi year thing. How do you think about that? Yeah,

totally agree with that. I think this this, this will last as long as people have confidence that this pickup in growth and that operating leverage has said kicks in. But it will that will fade. I mean, it's very hard to say whether that's going to fade in twelve months time or in twenty four months, but it won't be. You know, this isn't a structural move. This is the part of the process of this V shaped recovery coming out of you know, there's just the sheer scale of

the economic hit. We're going to get into that sweet spot where we're all going to really enjoy just the upticks, the up legger that the V recovery kicks in. But it will the sugar high rush springs to mind. There's a bit of you know, this is going to be a sugar high rush, and then the fundamental problem that developed G seven economies have all gots is they've been establishing much lower trend growth characteristics, So you get the Sugar High rush, this snap back, and then the gravitational

pull is back down to that trend growth trajectory. Once we get to that tipping point, you're going to get people wanting to look back to these really high growth the business models that can deliver the sustainable cash flow growth. But I just think that's most probably not going to be the story for the next six to twelve months.

As we get we entered this arena where people are going to want the positive earning surprises, and those are much more likely to come from the very beaten up stocks that have survived the COVID shock and then able to announce on a quarter on quarter basis that actually the kick backing growth is feeding through to them very positively. As a father of three kids, right here, Sugar High, I get nervous. It's it's a it's a scary scary Yeah,

there might be some PTSD there. I don't know, well, anything, Katie, anything other smart questions for Philip here before we get to the craziest things. I guess, well, I have you. I do want to ask you know, a trend we're seeing more and more is stocks and bonds falling together. And I mean that just could be, you know, because

tech tends to move inversely with yields. But given that tech is such a big component of all these benchmarks, it's actually dragging down benchmarks as well when tech falls. I guess I'm just curious in that environment. And given that this is happening more and more often, I mean, where where do investors hide? Great question? In fact, we've just been been doing some work unless the correlation, and

in fact we're just looking at putting out of things. Say, actually we are going back to the old normal in terms of equity bond correlations. So you know, we're all taught in finance one oh one equities and bonds negatively correlated. But the problem is, in the last ten years and the post GFC world quantitive easing, we've got conditioned to them being positively correlated. What was good for bonds was

also good for equities. Actually, what we've seen in February is of this start of getting back into the negative bonds of underperformed or even near today bonds of underperformed and equities are still managed to deliver positive return. So I think we're at that tipping point as we go into possibly the Fed shifting their guidance, as I said, an into taper, where we are going back into the negative correlation. This is totally logical. This is what is

bad for bonds. Bonds don't really like a pickup in nominal GDP growth, whereas equities quite enjoyed that for a while, and they that's why they tend to respond very positively even when the Fed get to the stage of putting up interest rates for a while, and they do that until they suddenly think, hang on the Fed of put up rates enough that if they keep pulling rates up, that's going to slow us down. And that's exactly what happened.

If you can recall back in you know, the Fed had been putting rates up for a while and we got to the fourth quarter of eighteen where the market worked out that if the Fed we're going to deliver what they told us they were going to do, which has put rates up to three and a half percent, the market worked out that that was going to really start to slow the economy. That's when we have that

quite big correction. But you know that we had a twelve months lead up to that where the FED were actually just nudging rates up and the equities kept kept powering ahead. So I think we just don't we want to just see in that sequencing and don't get you know, just just don't panic. I think I kind of colors perhaps why drum Power is just so reluctant to even talk about the exit strategy. And you know why, why spook the market at a time when the economy stolen?

I think so, I think, so we're on the side of caution here. I agree, Yeah, stand clear of the craziest things we saw in markets this week. Alright, Well, one segment where we do not err on the side of caution, we aer on the the side of the opposite. What's the opposite of caution? I don't know. I guess it's the craziest things we saw in markets this week. So let's uh, let's get into it. And Katie Sarah promised that she would call the hotline once in a

while and give us her crazy things. So I we didn't get a call this week, but if you talk to her, I we need to hold her, hold her to that. I'll shake her down, shake her down. But let's start with you, Katie. I wanna I'm gonna put the pressure on you. What's the craziest thing you saw this week? Okay, so this is crazy to me, and I promise it has a markets element. But this was

a story that read spiked on the terminal. Apparently, thirteen first year analysts at Goldman Sacks in their IB group, they surveyed the theirselves and UM presented a presentation to management and uh, it's been making the rounds on social media, and there's some solutions that they suggested that their work weeks should max out at eighty hours. There shouldn't be last minute changes to presentations the night before UM. And

I mean, obviously Twitter is blowing up about it. But I promised that the markets element is that Goldman Sacks chars actually hit a record high this week, which I found surprising, and it ties in neatly to the uh, the rotation trade we've been talking about. Wow, eighty hour limit. What a bunch of whimps. My day, I tell you was. I think the same story. They're they're feel like they're being overworked because of all the spack deals, right, is

that is that part of this story? I mean I don't see it in this story, but I wouldn't be surprised. It's actually been a really interesting week for Goldman Sacks because Bloomberg had that great story about how CEO David Solomon was upset because he's all, you know, someone out to launch and take a watch break these kids today. I don't get it. I don't get it. I know. And plusit there is that Solomon was also was that detail, wasn't That's a pretty good one though. I like that.

I would love to have been a fly on the wall to see how that presentation landed with the management. I'm sure they were took it under it took it under advisement. So that's a good one. Alright, Philip, how about you? Have you seen anything crazy this week? I know we live in crazy times, so I mean this this is boringly dry in the sense it relates to markets. But this this genuinely made me splutter over my morning coffee when I read it in a in a paper.

And that was some data relating to the Eurozone, and it was collated by an investment bank who just pointing out that the capital outflows of the Eurozone and during this reflation trade here it is amounting to roughly of Eurozone GDP at an annualized rate. This is the fastest rate of capital outflows there has been seen for twenty years now. This in my mind has gone completely under

the radar screen. And I think if this gets more into it remains sustained and gets more into the market narrative, this has really big ripple effects. You know, this has very big implications in terms of where the dollar goes. The dollar at being perceived to be a reflation was a negative for the dollar. But if we started to get this data being substantiated and continued this this, this I think could be a really big event. So it

was just the share scale of it. When you see anything that's amounting to of of a region that's as big as the Ourozone, seeing that type of capital outflow, this this is big time stuff. That's that's fascinating. Something to keep it onund Katie perked up there when you started talking about the dollar. In fact, she was she's getting excited. I feel like I'm a former currency reporter.

Now I cover everything markets, but you know, my first love was effects, so I appreciate that her heart is still with the well the dot dollars that the dollars that are really interesting juncture, isn't it. That's the thing here, and you know it have been weak, but it's been hovering around these key support levels and well turned to the d x Y and possibly people are totally underestimating the growth differentials, the interest rate differentials, and these capital flows.

So the big surprise out there could be for everyone that the dollar comes back with a much more vengeance than is currently pricingpial with all the the pearl clutching over inflation. It's wo'd be funny to see it. Yeah, yeah, exactly. Yeah, it's always looking for things that could surprise the potential shock shop factors. All right, good stuff. You both brought your a game here, Um, Philip. For my crazy thing, I specialized in the alternative asset classes. And when I

say alternative, I mean I really mean alternative. And this story is really one of my favorites in a while, because I am I love stories about something that someone thought was a piece of junk, worthless piece of junk, and they and they got rid of it and it ended up being priceless. Um, I might I might have tipped the my my hand there a little bit about how much this thing actually costs. But what happened, and this is a story courtesy of the Associated Press um

out of Connecticut. Uh, someone went to a yard sale and they bought a pretty uh bowl. It was clearly an antique, a blue cobalt bowl, UH with paintings of flowers and other designs on it. And they said that this is this is pretty interesting at this yard sale and New Haven, Connecticut and uh they bought both for thirty five dollars. And then they took it home and they said, you know what, I'm gonna send this to Southby's, a picture of this to Southeby's and see what they

think about it. South Beast came back and said, this bowl is actually from the fifteenth century, so the fourteen hundreds in China, the Ming dynasty. Sotheby's put it up for auction, and now Katie it's time and Philip, it's time to play the prices right on. How much you guys think a fifteenth century Ming Dynasty era bowl. I'm sorry, it's a white ball adorned with cobalt blue paintings of flowers.

That changes things. Yeah, one of only seven such bowls known to exist in the world up for sale at Southebyes. The only hit I'll give you more than the thirty five dollars that was paid at the yard Shale New Haven. So, Katie, crisis, right, what's your what's your bid? Well? I mean, given that an n f T went for what's sixty nine million last week, and at least the bowl is physical, I don't know. I'll just say seventy million. Seventy million, okay,

I'm keeping my poker face on here, Philip. I would be quite as aggressive for that, certainly, certainly in the millions. But I'll say rough seven million, seven millions, okay. I I thought the actual price was high. Seven dollars. But but the way you put a Katie with n f T selling for you know, with with a bunch of bits on a computer server somewhere selling for seventy million dollars, you would think the hard asset like this would would be a lot more so. Right, My benchmarks are all

screwed up. I can't keep it straight. I think what what you would need to do is buy this bowl, take a picture of it, smash the ball, and sell the picture as an n f T, and you could you could probably get seventy millions, So if you guys want to go in, we can go thirds and buy it and smash it on the next pot. I feel like it's full for what could go wrong? Exactly what can go wrong? But I thought that was a good one.

That was that was certainly the the craziest thing, And now I'm thinking it's crazy that it didn't solve for like, honestly, yeah, I feel like we should ship in and go in on this. Well, you you put up thousand, I'm good for like two. Maybe Bloomberg, yeah right, they can Matt match it. That's it. But I think with that said, that is all the time we have for the show. Philip, it was so great to have you. Katie has always great to have you. Uh and Philip, let's chat again sometime.

I really enjoyed it. That's good, Thank you very much. What goes up? We'll be back next week. Until then, you can find us on the Bloomberg Terminal, website and app wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can find us on Twitter follow me at ing.

Anonymous Katie Greifeld is at k Greifeld. You can also follow Bloomberg Podcasts at at podcasts and thank you to Charlie Pellett of Bloomberg Radio and the voice of the New York City subway system. What Goes Up is produced by Tofur Foreheads. The head of Bloomberg Podcasts is Francesco Levy. Thanks for listening, See you next time.