Stock Market Gets Ironic

it's actually good news. It's hard to tell these days if you have your eyes on the market, since we're back in an upside down world where strong economic reports can cause stocks to drop on concerns that they will make the Federal Reserve maintain its aggressive efforts to tame inflation through interest rate increases. But it's definitely good news that we have a global market strategist at a major

firm here to help unpack it all for us. But first, Viltano, before we get to the guest, I have to ask, how was your trip to London? It was really fun and I want to thank all of the cross acid reporters and editors over in London who were so so nice to me and welcome me and we went out for drinks and had a really good time. Oh that's good. Did did uh? Did they all join your professional network on LinkedIn. Yeah, I'm friends with all of them on LinkedIn. Yeah, yeah, yeah, Yeah,

you've got quite a following on LinkedIn. Yeah. I think it's a small type, tight knit group of maybe like three thousand people or so, I would say. Yeah, Yet I am not yet up to snop to join your professional network on LinkedIn? Is that me, the one who's edited how many of your stories as a podcast guest's even a big LinkedIn guy? I can't even believe I actually I'm going to send my request to be in your professional network. I wasn't gonna. I think I'm not

even sure I did it on purpose. I think it was like a butt dial. I'm sure rarely on LinkedIn. I feel like if you're on LinkedIn, you're looking for a job. I don't want my employers to think I'm out there looking for a job. And somehow the fact that I'm not in your professional network on LinkedIn, I don't you think it probably bothers me. It does not bother me. I'm going to resend my requestsional I don't

work on LinkedIn. Yeah no, And you're not welcoming it, to be honest, because if for listeners who aren't familiar with this. Mike tweeted about this. He called me out. I hadn't accepted his friend Is it a friend request? I don't know what do they call it on It's request to be a member of your professional yes, exactly, And and I didn't accept it. And you know what, now that you called me out, I'm not going to do it. I m dumb. I'm dumbfounded by this. I

am dumbfounded by this. I will get my revenge on somehow. You will find out. I imagine this week's guest is a member of your professional note. Oh yeah, for sure. No, we've been friends for a really long time. No, but I do, I do want to bring it. Bring him in. It's Anthony Saglane Benny. He's the global market strategist at amery Prise Financial. Anthony, welcome to the show. Welcome to the podcast, and welcome to my my LinkedIn network. Yeah, thanks thanks for having me. Uh, Like Mike, my my

LinkedIn network is not nearly as big as yours. So for somebody who says they're not, they don't know what to do on LinkedIn. It's a little suspicious. It's a little suspicious. Keep calling me out. I'm just gonna send

all I'm gonna decline all of those. Yeah. Yeah, but uh, Anthony, maybe just to start you can you send us a couple of notes right before we started the podcast, and you said that we are entering a good news is bad news market and I wanted to ask you why that is and if you could just sort of lay that up for us. Yeah. Yeah, I mean, I think over the last couple of weeks, the markets have really kind of settled into this idea um of of a,

you know, are we headed for a recession? And then be is it going to be prompted by the Fed raising interest rates too aggressively? And so what I mean by a good news is bad news type of market environment is the hotter that economic news comes in versus expectations kind of implies that maybe the Fed will need

to continue to raise interest rates more aggressively. And so you saw so a little bit of that in the reaction on the May employment report on Friday, where you know, we created three jobs in May, unemployment rate held steady at three point six percent for for the third straight month.

By all accounts, the employment backdrop is very strong. Um. But on top of that, those numbers came in above the three three thousand that was expected in the markets declined because that the idea is is that as long as the labor market remains strong, as long as economic activity is moving above what I think in census an I estimates are, it implies that the Fed may have

to raise interest rates more aggressively. And so I think as we move through the couple of the next couple of weeks and a couple of months, um data that comes in hotter than expected, you would expect that the market would greet that more negatively, and then data that comes in a little bit weaker but not too weak would be greeted positively. That we call it this goldilocks kind of scenario where economic momentum is declining but not so much that fears of a recession start to set in.

I think it's a tall order, but um, I think that's where we are in the market environment right now. You know, I think the question on a lot of people's minds is a there's there's a lot of sort of wishful thinking and fingers being crossed all over Wall Street that inflation may have peaked, that we may have

seen the worst of it. But it raises the question of well, what's next, and you know, how low does it have to go for the Fed to be um if not completely done with raising interest rates, at least to your point, be a little less aggressive and maybe switch back to basis point increases, which some are hoping for maybe in the fall. So I'm wondering how you're thinking about that, is is a slow, steady grind lower in inflation in the cards? Do you think or NFL

is that? Is that enough to cause the Fed to dial it back to basis point increases? Yeah? Uh, you know, I think that's it's kind of a loaded question because I think it depends on where you're looking at when you're talking about inflation. So our view is that yes, inflation has likely peaked. When you look at break even spreads, UM, you look out two or three years, the bond market

is telling you that that inflation like likely peaked. However, you know, does it really make a difference to a consumer if you know, and the CPI number goes from eight point five percent in March to say eight point two percent in May, um employee, and it's still high. Prices at the pump and food are still high, and those those parts of inflation are likely to linger longer, and so I I think there will be a gradual

decline in inflation. But even if you look at our own estimates, we see CPI kind of ending the year at around six percent, that that's still three times higher than what the FED wants inflation to be on a longer term basis. So I feel that inflation likely moderates a supply chains kind of ease the food and energy as a separate component, and I think that will remain elevated.

But as long as wage inflation moves down and some of the core components of inflation move moved down, then I think that will give the Fed a little bit of room to start, like you sacremental moves in the in the coming meetings in September UH and then I think the markets could react a little bit more positively to that, because they'll have gotten to neutral by that point, And if they don't have to or getting close to neutral, and if they don't really have to move past neutral,

then I think opportunities are being created in the stock market if that doesn't look like it's the case, And and maybe we're at seven or seven and a half percent by the end of the year, then I think the FED will need to be more aggressive and they may push into that restrictive zone, which then I think, you know, makes odds of further declines in the stock market, Um,

you know greater. I was actually going to ask you about this about the latter half of the year, because we've been writing a bit about this, where we have a lot of people saying that inflation is peaking, and they're looking at some indicators of still good economic data and so on, and they're saying that potentially the second half of the year might be a bit better than, you know, less rough than the first half. So I'm

wondering your view on that. Yeah, I think from an economic standpoint, we we write a lot about this as well. I mean that the consumer isn't good shape. Um, saving rates are high, debt levels are low, they're starting to use revolving credit a little bit more. So that's something

that we're watching. But but net net, consumers are in good shape, and as long as the labor market remains in good shape, then I think you're seeing a shift in consumer behaviors, not a retrenching in spending right there, they're spending less on goods and more on food and energy, maybe a little bit more on services. And as kind of that that pandemic wave of of of maybe travel starts to ebb in the summer UM, maybe that starts

to come down. So is if inflation pressures can moderate and employers don't retrench and spend uh in hiring, and consumers don't retrench and spending, then I do think that the FED has a pretty narrow bath to start um, maybe slowing the pace of increases. And I think the opportunities that have been created in the stock market because I in my view, I think the stock market is pricing in we're going to see a recession maybe by

the end of this year early next year. If that's not the case, and the FED can really land this plane and get a softish landing, not a hardish landing, then I think the stock market can recover in the second half of the year. The one thing we have talked about is earnings, and and that has us a little bit more concerned because earnings estimates really really haven't been coming down and um, I think there's there's likely based on the last week or so of of corporate

news and headlines about warning about earnings. I think we're in for a period where animals are going to need to adjust their earnings, and I think the market reaction to that could be a little bit more negative. You don't think the market has gotten price dotted already those expectations. I think it's priced in some of it, um, not all of it, and so UM. You know the the warnings from Target, um And and Walmart and then obviously Microsoft last week, a couple of couple of stocks about

either currency or inventory builds or changing consumer habits. You would think their stock prices already reflect that, but but they got hammered, and so I think there's there's a larger resetting that needs to go into the market as

analysts bring in their earnings expectations. Um. You know, whether it's fifties, sixties, seventy five built in the stocks, I don't know, But I do think if we're heading into the second quarter earning season and more companies start to warn, I think that could be a little bit of a headwind for stock prices over the near term. Over the very near term, Well, what do you make of some of the companies that have been coming out with the warnings.

Target was a big one. I remember a couple of months ago, and it feels like maybe that was sort of the start of this trend. It was restoration hardware where they had come out with a bunch of warnings. So how are you thinking about what CEOs are telling us? And also what's some you know, some of the top brasset banks are telling us. Yeah, yeah, Um, I think it's a it's a there's a lot of cross currents coming from companies right now. Um. I think I think

some of it is supplied chain driven. Um, you know, think about it if you're if you're a retailer and you're you're trying to order goods and you can't get goods on time. You know, are you double ordering or you triple ordering? Are you ordering ahead of time to get those in and then it's not coming in and then it comes all in at once, and then you you know, and then consumer trendits have changed, and now you've got a bunch of change stories. So I think

some of it is very specific to supply chains. And then I think some of it is based on changes in demand and reactions to inflation. So, um, you know, with with Russia invading Ukraine, Uh, it put what was already a tight oil market it's an even tighter market, and so oil prices have dramatically shifted higher. Food prices uh dramatically shifted to higher. So at least for the lower wage earners, they've had to shift more of their spending to those types of items, so there's less money,

less discretionary to money to spend on goods. And then I think higher income individuals have been shifting their um They're they're spending away from things like restoration hardware during the pandemic, where they're buying furniture and things for the home, and now they're out traveling. Now they're going on trips like you went to London right what California? Recently? I

did a lot of ski trips in the winter. So I've shifted my own spending in ways that is spending less on good So I think we just have to move through some of the supply chain issues, see some normalization, and then consumer trends have to normalize, and I think that's what they're doing. Um. I just think we have this backdrop of really high energy and food prices that are creating noise and how investors, how consumers are spending and I think it's just going to take time to

move through that. The bottom line is it makes it very challenging for for companies, particular retailers to navigate that. And then for some of the financial companies, Uh, some of the earnings warnings that we've seen, you've seen this is not the environment to bring I p O s or no deals or mergerent acquisitions. Right, So a lot of that investment banking um is really dried up. And so you know a lot of banks have warned about that.

Consumer trends are still strong. Banks should still benefit from rising that interest margins, those rates move higher, they should benefit from that. That's a tail wind, but the headwind is investment bankings down trading activity. Will see what that looks like. You know, by the way, if we're headed for a recession, to hear some of the commentary from Jamie Diamond, and you know, is it superstorm standing or

is it just like a category one hurricane? Um, how we navigate that, how banks get through that will depend. I think as an investor, this is the time to kind of rain in the horns a little bit um, be balanced across your portfolios, make sure you're properly diversified, don't take too much risk on on either end, and I think, well, you you'll be able to weather this volatility. I do think, as I said before, there are opportunities being created in the stock market with these declines. Yeah. Yeah.

The target story is interesting to me because it's it's sometimes hard to sort of sort out whether or not it's a you know, execution issue with one retailer, you know, supplying the wrong type of goods. You know, we've seen this just in time. Supply chain notion kind of just blown up over the past year and and trying to navigate that. So, uh, you know, it's it's it's a

tough one. But I didn't want to, uh, Ethny ship gears a little bit because I know you're you're a global strateg just and and you're looking at all over the world, and I was struck. Recently I looked at sort of on the terminal Bloomberg terminal, you can rank developed market equity performance over the year, and it's rare to see the US so low in that sort of league table. You know, I think of twenty four developed markets, it was like twenty two or three. Um, that's that's

kind of shocking to me in a way. You know, you would almost think of the US market in a risky world of stocks being sort of the haven market. But what do you think was behind that? Is it just a matter of the sort of growth to value rotation and the US being way more orient oriented to two growth stocks and and you know a minuscule waiting to say energy that is that is the leader this year? UM, how are you thinking about the global equity markets and and sort of the US role in them and where

the opportunity set is going forward. Yeah, that's a great question, and I do think you're right there. There is a component of UM, the US markets being very growth heavy,

so very technology, communication services, consumer discretionary. Those growth components have really been where UM the stock declines have been the greatest this year because as interest rates have reset higher, a lot of these growth companies are priced not on their earnings today but on their future earnings, and when you discount that back at a higher rate, means the value of those future earnings are are less today, and so you've seen a shift. I think I think a

lot of that has already occurred. I think if if I were going to look at growth stocks today and the reset there. There there's obviously potential more downside there, but I do think in the US market in growth stocks in particular, a lot of damage has already been done to that area. Um. The other component that sticks out is whether you're looking at it on a dollar

or local basis. And so when I look at a lot of them, a lot of the developed market indexes on a dollar basis, they are pretty similar to to the declines in the US a little bit less so because of the value bias they have. Um. Some of the international markets have more energy and commodity exposure. That's been a great place to be this year. Those those stocks are benefiting. So there's some tail winds from UH both being valued exposed internationally with more energy exposure, and

then the strength of the dollar. His his kind of you know, at least on a local currency basis, made those indexes look look better than what I think they really are at the end of the day. UM. I I kind of hint to your question. The US is, in our view, the best place to be when uncertainty is high and volatility is high. And I think the US market from that perspective, outside of the growth component is acting a little bit more defensively. UM and I

in our own allocations were overweight the US. We're underweight Europe because we see we see higher odds of a recession there. Um. You know, the energy prices are crippling a lot of consumers over in Europe right now. And then in Asia it's been zero COVID policy around China. So those have been big head winds for for those

two regions this year. Yeah. Yeah, it's a it's a great point about the currency adjusted returns, and you know that the flip side of that, um Uh, that strong dollar is obviously a week euro, but by the week yen, it's really cut a lot of people's attention uh this year. You know, such an important currency as a gauge of risk sentiment, or used to be anyway, I guess it's going in the other direction now. But what what do

you make of this yen? You know, have you given much thought to the end weakness and and any sort of signal that it's sending about UM risk assets and markets globally. Yeah, yeah, I mean I've I've looked at it over the last a couple of days or more recently,

UM and you're right. I mean, you're you're The currencies move for a lot of different reasons and a lot of different um and they can be very volad though, and I think the US has kind of the U S dollars kind of come back a little bit versus the end and versus the Euro more recently, and I

think it's just a resetting in the dollar. I I the strength in the US dollar is really driven by this expectation that the FED is going to have to be ultra aggressive, and as we get more economic data over the coming weeks and coming months, I think it might look like they might not have to be as aggressive. So you're going to see the dollar on a trade trade weighted basis kind of start to move back down. Things like the end will strengthen a little bit more,

the Euro will strengthen a little bit more. UM. We'll see if that shows up in the data, but I think it's just a little bit of normalization over a pretty big move in the dollar verse the end and

Euro over the last several week. And you mentioned China, and I wanted to ask you about how are you thinking about China because on the podcast and broadly speaking, I feel like There's been a lot of discussion about whether or not China is investable versus uninvestable, And I know we've had some developments there this week where it looks like they're being a little a little bit more lenient maybe towards some of their tech companies and some

other developments around video games and so on. So how are you thinking about China? Yeah, China, you know, the second largest economy. They're they're they're significant and a lot of different ways, both for heres domestically in terms of what we can produce and be shipped here, but then just are just our relations with China, So both from a political and economic standpoint, they are very very important.

I think from an economic standpoint right now, zero COVID policy is wreaked a little bit of additional uh I created additional problems for the global economy that zero COVID policies shutting down Shanghai and Beijing. Um, you know, Shanghai is a significant port city, and so getting items and goods out of that city have been very very difficult. Keeping up with production schedules have been very very difficult

for US companies and global companies. And it looks like maybe this month, that's going to start to change and they're gonna start to open up a little bit more. But it's it's very hard to get confidence in in the policies because they can change so quickly. And so what I think a lot of these US companies are starting to do is how do we think about sourcing?

How do we think about um putting? You know, Mike mentioned this just in time, Well, just in time works if the supply chain is even and you can count on it through you know all the different spots. And I think we found during the pandemic and obviously different policies coming from China is that might not be able to rely on that. And so moving forward, companies that can source closer to to where their products are are consumed. Companies are starting to decide to maybe make those investments

and and and make those changes. And in terms of China from a stock trader's perspective, From a stock perspective, it is difficult to invest in that region right now when the policies seem very uncertain. Um they don't seem consistent right now. You know, China is about growth and it's about zero COVID, and both of those are sometimes contradictory. Um. You know, messages, and so you don't know day to day what message is going to carry the most weight.

So right now I think it's very hard to to to go into China and invest um in that region with confidence. That may change over the course of the next few months, but right now it's one of the big reasons why we're underweight is there's just a there's a mixed message on policy. See between what the government wants to do with growth and what they want to do with stamping out inflation, stamping out COVID. We not

a just in time delivery. That's also my strategy. Whenever anyone asked me to write something, I make sure I get it in this this is true. Yeah, you don't want to get it into earlier then they have too much time to mess with it. So give him get it to them right if the deadlines for yeah, I'll do that. Putting in writing there's there there. I'm gonna write a book about the benefits of procrastination. There are many many that's that's a topic for a future podcast.

But you know, after any the other big elephant in the room is you know, we've got treasury yields perking up again. Uh tenure yield in the US popping above three percent again this week, you know, the solt and Treasury's kind of you know, seem to make a U turn or at least slow down after we got above three percent in the ten year before. How are you

thinking about bonds? Is it? You know? Is it more attractive to talocate maybe a bigger than your your typical forty percent or whatever your target allocation is to two treasuries when we've got a three percent yield? I know want to I know, on an inflation adjusted real rate basis, it's still deeply underwater with an inflation at eight percent, but you know, assuming the Fed gets it back there by hell or high water closer to the target. Is is this uh something on client's minds? Is it? Is

it something? You know? Our bonds a bargain again for once? Yeah, I'm telling you you're it's like your rudder Global Asset Allocation Committee's mind because we're having the same discussion about fixed income right now with a with a ten year at or above for um, that's a pretty attractive yield. Let me think about it. We we've been an environment you know, there is no alternative to equities, and now

maybe there is an alternative to equities. And so we've been as a committee, as a as a global ast allocation committee, we've been the most underweight fixed income we've been ever over the last probably twelve months or so, and so now we're starting to have conversations with the yield moving up, is this the time to start rebuilding that fixed income base? And mentioned the sixty forty portfolio. UM, I think you do want to start considering looking at

bonds as a longer term ballance in your portfolio. That hasn't really worked this year. UM stocks and bonds have been correlated at the same time as as interest rates have been moving higher. However, I do think we're approaching the higher end of the tenure right now. We could go a little bit higher, but I do think inflation is going to moderate lower through the course of the year.

I do think the feed is going to be able to slow the pace of their rate increases, and I think the tenure will find a new equilibrium somewhere around three percent. To be a little bit higher, could be a little bit lower, Which means if you're underweight bonds right now, you may want to lock in some of these yields. You may want to lock in I would

keep the quality high. I would look at it. If you were underweight government bonds right now, maybe you look at some of the treasuries, maybe look at tips to to kind of help with inflation. You still want to look at high quality corporate bonds because you know, they got a little bit of a spread on top of

those treasuries. And you know, I think the fall rates are gonna be pretty low for for investment grade credit, and so yeah, I think this is the time you if you're underweight and you've been avoiding bonds, you at least want to start putting the shopping list together. And you still want to you want to have strategy for maybe getting back to a neutral stance. Maybe it's a little bit early, but you want to start thinking about that right now with these yields. High yield still a

little dicey at this point. Yeah, you know, I mean, I like we have allocations to high yield um. You know, we're underweight those areas just because we want to be a little bit more conservative around our allocations. UM. But I do think, you know, we'll have to see I mean, I know a lot of companies were able to extend their their credit UM, and you know they haven't had to go back to the funding markets because they've locked

in some of these lower yields. We'll see when there was DAT, when those DAT instruments come up, if they can go get the financing. I think it's a tougher environment right now, So I would rather just hang out in investment grade and wait for that smoke clear. And you mentioned a few times that there's some areas of interest to you, So I wanted to ask you what you're telling clients who do want to put money to work. Yeah, great, great question. Um. You know, I think with inequity you

want to do a couple of things. UM. I think you want to look and this is across the spectrum, so sectors, regions doesn't really matter. UM. You want to make sure that the investments that you're buying are high

end qualities. You want to make sure that the stocks or funds that you're you're investing in are focused on companies that have visible profit streams UM, they have clean balance sheades UM, they have strong cash flow, They have definable products and industries that they can UM, you know

kind of count on in an uncertain environment. UM. And I think a dividend yield is an extra bonus right when when returns are compressed or when the market is in a downtrend, that yield becomes a greater part of your total return. So you want to make you want to focus right now on companies that are either growing their dividend or have a reasonably stable dividend that you don't have to worry about. UM. I think if you want to go a little bit further, UM, I do

think opportunities are being created in high quality technology. So where we've seen a lot of valuation destruction has been in high growth tech, consumer discretion and those names I mentioned for that they're there, their valuations are based on

earnings in the future. UM. I think a lot of damage has been done in those areas, and so I would look to things like information technology and in those quality companies within that sector as an area to start at least opportunistically buy either dollar cost averaging and what you own UM rebalancing portfolios and maybe using that as an opportunity to pick up some of those areas. But

that's where I would be focused. High quality companies across sectors and regions, dividends big time plus and then UM, I think there's some opportunities being created in technology. And then lastly, UM health Care is one of the sectors that were overweight right now because it can act defensively because it has value based companies in there that pay good dividends, and it also has some growth components like

biotech that have been really hammered recently. So it acts as this defensive slash growth sector and so it's not as expensive as consumer staples and utilities, but it also gives you a growth component in there. So those are the sectors that we that we like right now. Yeah, it's been fascinating to see sort of the shuffling of

the components of the growth and value indexes. Now, you know, you've got a lot of energy companies in the growth indexes, which uh, you know seems seems seems surprising based on history. But good stuff, Anthony. I gotta give Anthony props because, uh, listeners don't know. We record this over zoom and I'm looking over his shoulder and he does have Bloomberg TV on his TV behind him, not some soap, not he could be watching some soap opera. It's it's on here

every day. I'll take you ready for it, right right? Markets have been pretty dramatic, so you know, maybe we're getting some of those soap oper viewers that change the channel. Appreciate your insights, Anthony, But now comes the real test. We're gonna switch gears to the craziest things we saw in markets this week. So, uh, this is where you'll you'll really be graded on on the value of your

crazy thing. How about you, what's the craziest thing. My craziest thing actually might make you a little bit depressed? I think I started. I've been depressed ever since I realized you d thinking, but my craziest Yeah, so that the craziest thing we'll make you depressed, I think. Because it has to do with the podcasting world. So it turns out there's this whole slew of white noise podcasts. I don't know if you saw this story, but you

know they sort of have mysterious backgrounds. Um, there's this great Bloomberg story about this. And even like trying to reach out some of these companies has been really hard because you don't know who that you know, you don't

know who's running them, etcetera, etcetera. But there is this one guy who I believe he was living in the Florida Keys maybe and basically he started putting out white Noise podcasts and so many people are listening to them that he's actually making eighteen thousand dollars a month just from streams of his White Noise podcasts. So he's getting something like I think the story said fifty listeners per day for white Noise, for white Noise eight thousand a month.

I don't know, Da, you should have brought this up. They're going to might, I mean might get more listeners probably maybe if we talk really quietly, we can be like, you know, you can have a thirty minute moment of silence or something every every every week. So that's pretty well. That is a true Florida man story. If if I've ever ever heard of one? What good is ahead? Hey he figured it out. Maybe White Noise will join my professional uh network on lincol good luck if yeah, probably not?

Probably not. How about you, Anthon? Do you see anything crazy this week? Uh? Yeah? Mine mine is not as interesting. Uh. But Earning's estimates have actually gone up for the SMP five hundred this year. I I think that is crazy given a lot of the news items that we're seeing from companies right now over the last week or so.

So in the fact that earnings estimates you know, popped a little bit higher over the last week, tells me analysts having fully kind of reset to this new uh, this new paradigm, and so that that's to me that that just doesn't make sense right now. And I think that's why we're going to see over the next couple of weeks analysts have to bring in those earnings sestiments. Yeah,

it is. It is pretty amazing. And I haven't I haven't dug into the data too deeply, but you know, when you see these repeated cuts from the likes of Target and whatnot, I wonder if there's just so many companies pulling their guidance, you know, you always kind of I'm always kind of skeptical that analysts are sort of you know, following the outlooks from the companies themselves. But maybe there's just so many being pulled, or so much uncertainty about it at all that you know better better

or keep them as is a raise. I don't know, I don't know, it's a fascinating thing though, giving all the all the macro doom and gloom that the generally late I mean analysts are generally late kind of play. So that that and usually when you see a big down shift in the market, it takes about five or six weeks for analysts to kind of gauge that, you know,

they might have to bring in their earnings. But just one quick point on this is that you know, you would have thought they would have brought their their expectations in in the first quarter as companies were kind of communicy, starting to com indicate that there were some issues. All they did was just push out their numbers into Q three and Q four, So they kept their overall numbers the same, but just pushed it out where you would

get their earnings growth in later quarters. They're running out of real estate in my in my view, yeah, right, I believe in just in time estimates. Maybe that's it. I I give my SMP target on December thirty one, an three o'clock. That's It's I could get paid to do. That would be great, But yeah, it is a head scotcher, though, I agree. So that's that's that's crazy enough. Well, well, Dot Anthony. I'll, uh, all right, I'm gonna I want

to talk about the most expensive automobile that's ever sold. Uh. This is a great story by our our own columnist, Hannah Elliott Um. I will admit I'm a little late on this. This the sale occurred in May, but she wrote a story just this past week about it. First I'm hearing about it. And her story is interesting because it's it's all about the difficulties of ensuring the world's most expensive car, because you know, carriers are very reluctant

to to be the one to ensure it. So it's a nineteen fifty five Mercedes Benz three D SLR woln Halt Coupe. I'm not sure if I'm saying that right, but ninety Mercedes Benz SLRN halt coup whether or not I'm saying that correct, and at the I regret to inform you that you are now contestant on the prices right along with vill Donna, and I need your best guests on what this car sold for. One of two still in existence. The other one belongs to the Mercedes

Benz Museum. This one was actually sold at the museum. I'm not sure if they they owned it or not, but you started. I always have to go no, I know so little about cars. We have to give the guests the courtesy of of of bidding one dollar if you go high. Yeah, I'm really bad at this. I'm I'm bad at this game, and I know so little about cars. So I'm gonna go. You got bad at you. You've got them on the nose a few times, I know, but like three out of ten times. So um, okay,

I'm gonna go with five hundred thousand dollars. Five hundred thousand dollars. You believe the world's most expensive car is a five hundred thousand dollar automobile. One of two? Your bid is that her official. I will give her one more chance, give her one more chance. Really, you know, I could be you know, I could be tricking you too.

I don't I don't know. I'll go with nine hundred thousand, nine hundred and nine thousand, uh A three at nineteen fifty five, So how many that's sixty five year old car or something like that. Death don't check my math. Mercedes Benz three s l R EULN halt coop. I will say it's a beautiful car. I'm not a big car guy, but this thing is quite beautiful. It's got the wing doors that opened on the side, very chromy.

What do you think, uh, Antony. Yeah, So there's only two of these cars in existence, and this is the most expensive car in the world. It was the most expensive car sold at auction in the world. I imagine Ellen probably has a car that you can we're a bit space with that maybe work more, but we don't know about that. But but one million dollars, that's how you play the game. That's why, that's how you play the game. One hundred and forty two million dollars amazing,

that's my god. But my favorite part is is the struggle to get insurance word and they estimate there they can't find anyone in the insurance world to actually give a quote for the insurance on this on this thing. But um, one person said at least a hundred thousand a year for a car of that. It depends. Wait, what's what's the deductible on a hundred forty two million dollar car? I don't know. They said, yes, it's amazing, isn't it. And then let's see, the previous one was

some kind of Ferrari. I think it was a let's see, she's got it in here. It was a two fifty g t O Ferrari, but less than a So if there are any insurance breakers out there willing to write a policy for a hundred and forty two million dollar car, I gotta say my dad was an insurance guy. He'd be having nightmares about this. I think I don't think you'd go anywhere near it anyway. I think that is all the time we have, Anthony Bread to catch up

with you. Uh. Enjoyed your insights, and hopefully we can talk again soon. Thank you for joining us. Thank you. What Goes Up will be back next week and so then you can find us on the Bloomberg Terminal, website and app or wherever you get your podcast. We 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 Rea Anonymous. Bill Donna Hira is at Bildonna Hira. You

can also follow Bloomberg Podcasts at Podcasts. What Goes Up is produced by Stacy Wong. The head of Bloomberg podcast is Francesco Leavie, thanks for listening. See you next time, Bo.