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Stocks Sink as Data Sparks Economic Concern · Bloomberg Intelligence

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  Speaker 2: All right, you hit eco, go on your Bloomberg terminal,
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  Speaker 2: and you see a lot of economic data coming out today.
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  Speaker 3: I don't know.
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  Speaker 2: One of the ones that kind of jumped out of
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  Speaker 2: me is is GDP annualized quarter to quarter?
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  Speaker 4: The forecast was.
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  Speaker 2: For a decline of zero point two percent, came in
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  Speaker 2: a decline of zero point three percent. That's versus a
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  Speaker 2: gain of two point four percent last period. That kind
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  Speaker 2: of gets my attention. So we said, hey, let's ask
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  Speaker 2: Michael McKee. Does this stuff for a living international economics
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  Speaker 2: and policy correspondent for Bloomberg Newsy joints us here in
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  Speaker 2: our studio, Mike, is that a big deal that number
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  Speaker 2: that print?
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  Speaker 5: Yes, it's a big deal, but not for the reasons
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  Speaker 5: you might think. And I'm going to say something you've
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  Speaker 5: never heard me say that. Matt Miller just accused me
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  Speaker 5: of He said, I sound like Peter Navarro.
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  Speaker 4: Today. Yeah, I see. Did you see Alex's face when?
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  Speaker 5: Because I agreed with what Navarro's sentiment was on television
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  Speaker 5: a few minutes ago where he said.
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  Speaker 4: That this was not a bad report.
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  Speaker 5: I'm summarizing because the three tenths decline doesn't tell.
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  Speaker 4: The whole story.
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  Speaker 5: I mean, the story underneath GDP today is all tariffs.
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  Speaker 5: What happened. We saw tariffs bring in tariffs, get people
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  Speaker 5: to import a lot of stuff to try to get
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  Speaker 5: ahead of the tariff price increases, and that has totally
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  Speaker 5: distorted the numbers here. What we've seen is that imports
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  Speaker 5: subtracted five percent from GDP, A record inventories added to
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  Speaker 5: it a quarter percent because the jump in inventories was
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  Speaker 5: a record during the month and they didn't quite offset.
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  Speaker 5: But we did see all of this distortion in the numbers.
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  Speaker 5: That doesn't tell you the real story. If you look
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  Speaker 5: at consumer spending, it was up one point eight percent,
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  Speaker 5: which was a little more than expected. And business spending
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  Speaker 5: distorted by tariffs up nine point eight percent, well twenty
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  Speaker 5: two point five percent gain in imports of equipment. So
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  Speaker 5: it's really hard to tell. So what you do if
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  Speaker 5: you're an economists as you look at real final sales
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  Speaker 5: to domestic purchasers which takes out inventory and trade, and
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  Speaker 5: that was up by two point three percent. It's a
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  Speaker 5: little lower that it was in prior quarters, but that
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  Speaker 5: is still showing growth in the overall consumption economy.
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  Speaker 6: Well to that point. If we are seeing consumption okay
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  Speaker 6: and now you have incomes being okay, is consumption also
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  Speaker 6: being driven by pre buying tariffs or is this real
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  Speaker 6: underlying straight.
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  Speaker 4: No doubt, because people bought a lot of cars, and
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  Speaker 4: they've bought at least they've.
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  Speaker 5: Bought other things that we didn't see a big increase
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  Speaker 5: in durable goods spending, but there was a big increase
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  Speaker 5: in services spending, a relatively big increase, So Americans were
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  Speaker 5: out spending money. Now the question is where do they
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  Speaker 5: go from here? And for that you're what you're looking
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  Speaker 5: at is the other data we just got at ten o'clock,
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  Speaker 5: which is the PCEE data.
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  Speaker 6: Is this the one we care about?
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  Speaker 4: Is this the one get? This is the one we
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  Speaker 4: care about?
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  Speaker 5: This this is the monthly This is the monthly number,
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  Speaker 5: so it's the most recent data. This is if you're
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  Speaker 5: following the trend, which is what the Fed wants to do.
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  Speaker 5: We were up seven tents of eight percent, which is
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  Speaker 5: up from half a percent in February. So Americans spent
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  Speaker 5: more in March. The numbers were weighed down by what
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  Speaker 5: we got in January. In February, in the quarterly numbers
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  Speaker 5: and incomes were relatively strong. They're still up half a
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  Speaker 5: percent after a seven tenths rise the month before. If
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  Speaker 5: you look at the wages and salaries in that report,
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  Speaker 5: which is the most important thing because people spend what
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  Speaker 5: they make, they were up half a percent, which was
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  Speaker 5: up from February's four tenths and January's two tenths. So
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  Speaker 5: as the month went on, people got more money, they
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  Speaker 5: spent more money, and so it doesn't suggest we go
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  Speaker 5: into the second quarter with a real problem in terms
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  Speaker 5: of consumer momentum.
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  Speaker 4: That's my read.
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  Speaker 2: It seems like the consumer mic is still pretty good.
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  Speaker 5: When you're when you're looking at the consumer confidence numbers,
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  Speaker 5: it looks really terrible. But the numbers that we're seeing
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  Speaker 5: from consumers in terms of what they do, rather, that's
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  Speaker 5: a treasure.
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  Speaker 2: Secretary Bestin's been saying, I mean, you can look at
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  Speaker 2: all the survey numbers you want something.
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  Speaker 4: Like best into along with Navarro.
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  Speaker 2: Yes, exactly, but I mean that's what he's been saying
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  Speaker 2: and say, you can look at all the sentiment data
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  Speaker 2: you want, but people are still out there spending money.
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  Speaker 4: Well, the question now still backward looking.
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  Speaker 6: I mean, this is still from March. April was when
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  Speaker 6: we saw the tariff headlines and the volatility in the market.
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  Speaker 3: Right.
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  Speaker 5: Yeah, the PCE numbers are March that I'm talking about,
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  Speaker 5: and the rest of it is first quarter through the
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  Speaker 5: end of March. So what's happened in April that we
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  Speaker 5: don't know yet, We're going to have We're going to
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  Speaker 5: have to see. We have the sentiment indicators, and March
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  Speaker 5: was really the first month when there were.
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  Speaker 4: Any tariffs, and they weren't really tariffs on you and me.
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  Speaker 5: They were tariffs on the steel companies and things like that.
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  Speaker 5: So if people are paying more from for what they're getting,
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  Speaker 5: if they can get anything from China, now, maybe that
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  Speaker 5: does affect what they're going to be spending on. So
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  Speaker 5: somebody said to me this morning, this makes the fence
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  Speaker 5: job easy harder because you had higher inflation and lower growth.
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  Speaker 5: But I think it makes it easier. It just cements
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  Speaker 5: the case for doing nothing because this report is so
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  Speaker 5: distorted by the tariff stuff that it's impossible to say
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  Speaker 5: what it's going to mean going forward.
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  Speaker 6: Such a good point. He's so smart.
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  Speaker 4: That's when we get them on talking about a this time.
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  Speaker 4: So just like Peter Navarro.
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  Speaker 6: Yeah, Samesy, certainly the same. Michael McKee, Bloomberg International Economics
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  Speaker 6: and Policy correspondent, joining us in studio.
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  Speaker 4: Thank you so very much.
• 6:12
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• 6:26
  Speaker 6: Alex still here alongside Paul Sweeney. This is Bloomberg Intelligence Radio.
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  Speaker 6: We bring you all the top news in business, economics,
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• 6:34
  Speaker 6: They cover two thousand companies in one hundred and thirty
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  Speaker 6: industries all around the world. Want to get an update
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  Speaker 6: here on super Micro. The stock gets hammered here after
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  Speaker 6: preliminary earnings results that fell well short of analyst estimates.
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  Speaker 6: Remember this was a darling that went into the mid
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  Speaker 6: cap stocks and had lots of issues with kind of
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  Speaker 6: revamping its accounting, etc. And they were trying to really
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  Speaker 6: find their footing. Bou Jinho is Bloomberg Intelligence and your
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  Speaker 6: technology analyst joins us now trying to find their footing
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  Speaker 6: then maybe pushed back a bit. What happened in their
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  Speaker 6: prilminary announcement.
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  Speaker 7: Yeah, hey, Alex, thanks for having me on. It looks like,
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  Speaker 7: you know, when you go big whale hunting and you
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  Speaker 7: miss those whales, you're going to miss results. Right, They
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  Speaker 7: essentially miss sales by about one billion dollars versus the
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  Speaker 7: midpoint of their guidance. And the fact of the matter
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  Speaker 7: is these AI deals are monster deals. That's why I'm
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  Speaker 7: saying it's big whale hunting. One hundred thousand GPU cluster
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  Speaker 7: that XAI or open Ai. Those are three point five
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  Speaker 7: billion dollar deals. So if you miss on you know,
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  Speaker 7: one or two of these, that accounts for easily a
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  Speaker 7: billion dollars.
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  Speaker 2: So is this a super micro computer specific issue or
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  Speaker 2: is this big tech spending kind of slung down here?
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  Speaker 7: Well, it's a product transition issue, right, So if we
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  Speaker 7: look at the Nvidia GPUs, they transitioned over from the
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  Speaker 7: last generation Hopper series to the next generation. Uh, the
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  Speaker 7: the Blackwell series and given the greater capacity and the
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  Speaker 7: more the stronger, the better computational power. The customers were
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  Speaker 7: actually waiting for this for quite some time now, and
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  Speaker 7: now they're clamoring for it. So essentially what customers appear
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  Speaker 7: to be doing is canceling their Hopper orders and moving
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  Speaker 7: over to Blackwell. Now, I will tell you they weren't
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  Speaker 7: the only one that had this issue. HPE a couple
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  Speaker 7: of months ago. Uh, they missed their expectations primarily because
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  Speaker 7: of this product transition as well. And it's biting super
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  Speaker 7: Micro now.
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  Speaker 6: So based on that, the chip cycles moving really fast
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  Speaker 6: for AI. So what's next after Blackwell? This is just
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  Speaker 6: going to keep happening and kind of rolling it downhill.
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  Speaker 7: Yeah, I mean, it's still probably a couple of years
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  Speaker 7: before we start seeing the new the newer series of
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  Speaker 7: chips really ramping up, So we probably have a two
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  Speaker 7: year product cycle before we get to that, Alex, I mean,
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  Speaker 7: let's see how the cloud Capex holds up in twenty
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  Speaker 7: six and twenty seven. But for now, you know, right
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  Speaker 7: now we have a neartim product cycle issue for at
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  Speaker 7: least super Micro and HPE.
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  Speaker 2: Which what are your companies kind of the tech hardware companies,
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  Speaker 2: what are they saying about this whole tariff climate, what
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  Speaker 2: is it going to be an issue for them?
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  Speaker 7: Yes, well, we published an update to our tariff note
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  Speaker 7: and surprisingly they've actually done a good job navigating the
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  Speaker 7: tariff issues. So far, I've had three companies report related
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  Speaker 7: that's hardware related. There's a couple of things we need
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  Speaker 7: to take into consideration. One, a lot of them are
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  Speaker 7: outside of China in terms of the manufacturing scope, so
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  Speaker 7: the tariff impact is fairly minimal. Two, there's a lot
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  Speaker 7: of manufacturing that comes out of Mexico. So you know,
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  Speaker 7: because of the US Mexico and Canadian Trader agreementt U
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  Speaker 7: S m c A, they're exempt for tariffs. So if
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  Speaker 7: you have anything that's built out of Mexico or Canada,
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  Speaker 7: whatever it's assembled there, you're except for tariffs. A lot
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  Speaker 7: of my company, the companies that have reported, uh, they're
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  Speaker 7: they're using your U S m c A to their
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  Speaker 7: advantage to win deals. And three and this is this
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  Speaker 7: was somewhat interesting to me. I thought there would have
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  Speaker 7: been some pull in deals because of tariff concerns in
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  Speaker 7: the second quarter. Uh, the guidance thus far, Uh, Yeah,
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  Speaker 7: Western Digital as well as Seagate, which manufactured hard drives.
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  Speaker 7: They don't see any pull in in deals. So the
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  Speaker 7: second half of the year, which was a concern of mine,
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  Speaker 7: we don't. We don't see a you know, we see
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  Speaker 7: actually smooth demand going into the second half in.
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  Speaker 6: Terms of spending from super Micro's customers. I know we're
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  Speaker 6: in the product cycle part, but are we seeing any
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  Speaker 6: change in customer spend, Like maybe they're spending the same amount,
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  Speaker 6: they're spending in different areas or are they holding spend
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  Speaker 6: all together or pulling back.
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  Speaker 5: Yeah.
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  Speaker 7: So, and let me let me clarify who super Micro
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  Speaker 7: sells to.
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  Speaker 1: They don't.
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  Speaker 7: They don't sell to the Metas or the Googles or
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  Speaker 7: the Amazon or the Microsofts of the world. I mean,
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  Speaker 7: there's some of that, but the bulk of their spend
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  Speaker 7: goes to Tesla, musks x AI or the core weaves
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  Speaker 7: of the world. This classification of neo clouds and for
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  Speaker 7: all intented purposes, it seems as if they're spending, they're
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  Speaker 7: maintaining their level of spend. They're not spending more. The
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  Speaker 7: one overhang or one concern that I do have is
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  Speaker 7: because of the tariff issue. So far, if they're not
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  Speaker 7: going to spend more. Are they going to buy less?
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  Speaker 7: Right because of the increase in taps. Now, if I'm right,
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  Speaker 7: we shouldn't see that much of a price increase from
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  Speaker 7: the server vendors or the GPU vendors because of some
• 12:03
  Speaker 7: of the ways that they can avoid the tariffs. And
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  Speaker 7: you know, spending should be okay to the second half,
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  Speaker 7: and if the black wall cycle works out for them,
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  Speaker 7: super Micro should get back some of the law sales.
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  Speaker 2: So prior to three months ago, all we were talking
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  Speaker 2: about in the marketplace broadly defined was AI. Now I've
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  Speaker 2: gone three months really without really talking about AI because
• 12:25
  Speaker 2: it's all about Terriss. Have your clients kind of are
• 12:29
  Speaker 2: they still as enthusiastic about the real opportunities for a
• 12:33
  Speaker 2: transformation in technology coming from AI? Is that still on
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  Speaker 2: the front burner?
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  Speaker 7: Well, so again, I'm gonna I'm gonna, I'm gonna bifurcate
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  Speaker 7: that from the cloud guys and as well as the
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  Speaker 7: enterprise guys. From the cloud perspective, they're continuing to spend.
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  Speaker 6: Right.
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  Speaker 7: If anything, there's a lot more excitement to spend, primarily
• 12:53
  Speaker 7: because of some of these smaller language models like a
• 12:57
  Speaker 7: deep seek.
• 12:58
  Speaker 4: Up we have a blackout like a deep seek.
• 13:03
  Speaker 6: Right, the studio light went out just for those of
• 13:04
  Speaker 6: you be on radio, so your light went out on
• 13:07
  Speaker 6: mujin Hell, there is no broad blackout space go ahead.
• 13:10
  Speaker 7: Yes, like a deep seek. Or they are looking for
• 13:14
  Speaker 7: dinner models. If anything, there's going to be higher demand
• 13:18
  Speaker 7: for some of the products itself altogether, so there actually
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  Speaker 7: is a lot of excitement now on the enterprise side.
• 13:25
  Speaker 7: If anything, there might be a pause on the enterprise
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  Speaker 7: side because of the high cost of acquisition. So the
• 13:33
  Speaker 7: cycles for AI adoption may be more on twenty twenty
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  Speaker 7: later in twenty twenty six and into twenty twenty seven
• 13:42
  Speaker 7: versus the second half of this year and into twenty
• 13:44
  Speaker 7: twenty six on the enterprise side.
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  Speaker 6: All Right, Weich thanks a lot usenhel Bloomberg Intelligence senior
• 13:49
  Speaker 6: technology analyst in the dark, but helping us illuminate what
• 13:53
  Speaker 6: we're seeing when it comes to some tech names like
• 13:55
  Speaker 6: super micro.
• 13:57
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• 14:11
  Speaker 6: Your Caterpillar down by about half of percent, looking at
• 14:13
  Speaker 6: slightly lower sales this year if Trump administration tear US
• 14:16
  Speaker 6: remain in place. That's including an economy that dips into
• 14:20
  Speaker 6: a recession in the second half. Chris Chiolino, Bloomberg Intelligence
• 14:23
  Speaker 6: senior US machinery analyst joins US. Now, Chris, how do
• 14:27
  Speaker 6: you look at this company then when there's like a
• 14:29
  Speaker 6: huge variable, I'll throw off its earnings for the rest
• 14:33
  Speaker 6: of the year.
• 14:34
  Speaker 8: Yeah. So, I think the release really isn't as bad
• 14:37
  Speaker 8: as initially feared, and there's actually a number of positive
• 14:40
  Speaker 8: takeaways here. The quarter was weak, and we knew that
• 14:43
  Speaker 8: going in, volumes were going to be down, pricing was
• 14:44
  Speaker 8: gonna be under pressure, But the outlook is actually better
• 14:48
  Speaker 8: than I think many had anticipated. Their two Q sales
• 14:51
  Speaker 8: guide was actually above the street. We saw backlog improved
• 14:54
  Speaker 8: to a record thirty five billion dollars, Orders were up
• 14:58
  Speaker 8: double digits both year over year and sequentially. And really,
• 15:01
  Speaker 8: if you look at their outlook X tariffs, it was
• 15:03
  Speaker 8: really better than what they had expected prior so, and
• 15:07
  Speaker 8: the tariff impact as of now at least the peers manageable.
• 15:10
  Speaker 8: So I think the release, you know, should at least
• 15:12
  Speaker 8: help delay some of those concerns over a more pronounced
• 15:15
  Speaker 8: slowdown this year.
• 15:17
  Speaker 2: Christa's kind of pillar build their equipment in the US.
• 15:21
  Speaker 2: Is that where the manufacturing is?
• 15:22
  Speaker 1: How do they do that?
• 15:25
  Speaker 8: Short answer, they build everywhere. They are a net exporter
• 15:29
  Speaker 8: out of the US. But you have to remember this
• 15:31
  Speaker 8: is a large global manufacturer. They have manufacturing footprint and
• 15:36
  Speaker 8: and supply base that really spans the globe. But if
• 15:39
  Speaker 8: we're thinking about net exports, yes, they export more out
• 15:42
  Speaker 8: of the US than they do import from a From
• 15:45
  Speaker 8: a revenue perspective, you know, the US is you know,
• 15:48
  Speaker 8: almost half their revenue today.
• 15:51
  Speaker 4: What about for its peers?
• 15:53
  Speaker 6: What does this mean for some of its peers and
• 15:56
  Speaker 6: the trading environment that they were previously in.
• 15:59
  Speaker 8: Yes, so, at least for some of the domestic US
• 16:03
  Speaker 8: based manufacturers, I think this is maybe a little bit
• 16:06
  Speaker 8: of a sigh of relief. By no means or we
• 16:08
  Speaker 8: have the woods yet, but it certainly seems that the tariffs,
• 16:12
  Speaker 8: as at least how they stand right now, are somewhat manageable.
• 16:16
  Speaker 8: You know, cats expecting a net cost headwind of about
• 16:19
  Speaker 8: two hundred and fifty is three hundred and fifty million
• 16:22
  Speaker 8: dollars next quarter. If you kind of extrapolate that out
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  Speaker 8: over the balance of the year, you're talking you know,
• 16:27
  Speaker 8: maybe somewhere in the one hundred hundred and fifty basis
• 16:30
  Speaker 8: point headwinded margins. But that may even prove, you know,
• 16:33
  Speaker 8: overly pessimistic, because you know, cats still evaluate and get implement,
• 16:37
  Speaker 8: implement implementing some of these mitigation actions, so we could
• 16:42
  Speaker 8: even see that come down from here.
• 16:45
  Speaker 2: I was kind of surprised, I guess positively, Chris, that
• 16:47
  Speaker 2: their backlog looks pretty darn good. It's not like their
• 16:51
  Speaker 2: customers are saying are canceling orders or anything.
• 16:55
  Speaker 8: Now, and it's it's a record backlog, right, So you know,
• 16:57
  Speaker 8: we have coverage. You know, if you look at consensus revenue,
• 17:01
  Speaker 8: you know, whether we call it flatter down slightly this year,
• 17:05
  Speaker 8: they've got coverage for you know, nearly seventy percent of
• 17:08
  Speaker 8: the year already. So I think that does help provide
• 17:10
  Speaker 8: some kind of buffer. You know, there was a concern
• 17:13
  Speaker 8: out there that do we see this pre buy you know,
• 17:16
  Speaker 8: ahead of some of the tariff implementation, and KAT really
• 17:19
  Speaker 8: kind of downplay that in conversations they're having with their
• 17:22
  Speaker 8: dealers and with their customers. They're really not seeing any
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  Speaker 8: evidence of that. So yeah, these do seem like, you know,
• 17:29
  Speaker 8: true orders and really a really healthy backlog, which you know,
• 17:33
  Speaker 8: I think helps support you know, that flatish type revenue
• 17:36
  Speaker 8: outlook that they're putting out there.
• 17:39
  Speaker 6: All right, thanks a lot, Chris, really appreciate appreciate it,
• 17:42
  Speaker 6: Chris Chile. You know, Bloomberg Intelligence Senior US machinery analyst.
• 17:47
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  Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto
• 17:54
  Speaker 1: with the Bloomberg Business app. Listen on demand wherever you
• 17:57
  Speaker 1: get your podcasts, or watch US live on to just get.
• 18:01
  Speaker 2: Back to these markets we have as all offware. You're
• 18:02
  Speaker 2: off the lows of the morning. The S and p's
• 18:06
  Speaker 2: off eighty two points, that's one and a half percent.
• 18:08
  Speaker 2: And Malletti joins us here, old buddy of mine. We've
• 18:12
  Speaker 2: been into business a long time. She's head of equity
• 18:14
  Speaker 2: investments in all Spring Global Investments. Dude, you're grinding it.
• 18:18
  Speaker 4: Still working hard.
• 18:19
  Speaker 2: And Malletti joins us here in studio and you and
• 18:22
  Speaker 2: your colleagues at all Spring, I mean a lot of
• 18:24
  Speaker 2: folks that have been in the market for a while.
• 18:26
  Speaker 2: You've seen, you know, lots of different markets, whether it's
• 18:29
  Speaker 2: the you know, the dot com bust or the you know,
• 18:31
  Speaker 2: the financial crisis or the pandemic, A little bit of
• 18:34
  Speaker 2: uncertain to hear this year in the market. How are
• 18:36
  Speaker 2: you guys thinking about some of the very I guess
• 18:39
  Speaker 2: the volatility we're seeing in a lot of these markets.
• 18:41
  Speaker 3: Yeah, I mean, I think, Paul, you're right. There's when
• 18:44
  Speaker 3: you when you have moments like this, you kind of
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  Speaker 3: always look back and you look at what rhymes to
• 18:50
  Speaker 3: the past, and you know, even during COVID, that was
• 18:53
  Speaker 3: something we never lived through before. So while history does
• 18:56
  Speaker 3: kind of rhyme, it never perfectly repeats itself. And here
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  Speaker 3: we are again in something we've never lived through before.
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  Speaker 3: But there are lessons from the past that you definitely
• 19:04
  Speaker 3: take forward. And some of those lessons really are like,
• 19:08
  Speaker 3: look in the moment, it feels awful and uncomfortable, but
• 19:13
  Speaker 3: history does suggest that equity market returns for those who
• 19:17
  Speaker 3: stay invested and really think about bottom up fundamentals and
• 19:22
  Speaker 3: companies that really can control their own destiny, those investors
• 19:26
  Speaker 3: do well over a cycle. And so that's what our
• 19:29
  Speaker 3: investment teams are focused on looking at trying to take
• 19:32
  Speaker 3: advantage of emotion and take advantage of uncertainty and volatility.
• 19:36
  Speaker 6: So is that on a sector level, an index level,
• 19:38
  Speaker 6: or a stock specific level.
• 19:40
  Speaker 3: It's more on you from a bottom up stock selection basis.
• 19:44
  Speaker 3: And there certainly are, depending on the environment, different industries
• 19:48
  Speaker 3: that might fare better than others. But I would say
• 19:52
  Speaker 3: even within almost any industry, there are going to be
• 19:54
  Speaker 3: companies that do better than others.
• 19:56
  Speaker 2: How do your portfolio managers, how do your analysts, you know,
• 20:01
  Speaker 2: assess a company when a lot of times these companies
• 20:03
  Speaker 2: are coming on their conference calls and saying we're withdrawing
• 20:05
  Speaker 2: guidance or we can't give guidance because we don't know
• 20:07
  Speaker 2: what's happening in our business, or if they don't know
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  Speaker 2: how our investors supposed to know.
• 20:12
  Speaker 3: Yeah, I mean, Paul, this is something you spent a
• 20:14
  Speaker 3: lot of your career doing and our teams too too.
• 20:17
  Speaker 3: So while the calls are critically important, as you know,
• 20:21
  Speaker 3: kind of during reporting season, most of the past is
• 20:24
  Speaker 3: the past. We're not focused on that. We're focused on
• 20:26
  Speaker 3: going forward. And on the calls, they may not be
• 20:28
  Speaker 3: able to give guidance, But if you know that company
• 20:31
  Speaker 3: really well, and our teams do have deep expertise and
• 20:35
  Speaker 3: fundamental research. They understand the model and they can kind
• 20:39
  Speaker 3: of walk through with the management teams where do they
• 20:42
  Speaker 3: have levers to pull if things get worse or if
• 20:45
  Speaker 3: things get better? And how quickly can those levelers be
• 20:48
  Speaker 3: pull and then asking them the same question you asked me,
• 20:52
  Speaker 3: how do you look at this environment versus other environments?
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  Speaker 3: How can you manage through those? And understanding where they
• 20:59
  Speaker 3: have control of their own versus where macro can kind
• 21:02
  Speaker 3: of push them is really really important, and you will
• 21:05
  Speaker 3: see some companies actually do have more control in this
• 21:08
  Speaker 3: environment than others.
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  Speaker 6: What do you do about finding safety in the middle
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  Speaker 6: of that? Right, Like in other cycles, you can make
• 21:15
  Speaker 6: an argument that maybe the dollar a treasury market, it's
• 21:18
  Speaker 6: okay to hide out there a little bit.
• 21:20
  Speaker 4: Is that still the case?
• 21:21
  Speaker 6: Do you guys see that Mark Mobius is like all
• 21:22
  Speaker 6: his funds are like ninety five percent in cash? Wow?
• 21:25
  Speaker 3: Yeah, yeah. Look, I think we tend to be and
• 21:28
  Speaker 3: think about being invested for the long term. And you know,
• 21:33
  Speaker 3: look I manage our equity business, our fixed income team,
• 21:37
  Speaker 3: you know, they believe it's a it's a good time
• 21:39
  Speaker 3: for fixed income to focusing on the income component of that.
• 21:43
  Speaker 3: But on the equity side, you know, you gotta be
• 21:47
  Speaker 3: right twice if you're going to sell and then predict
• 21:51
  Speaker 3: when is the right timing to come back. And again
• 21:54
  Speaker 3: history would suggest that if you just wait out these
• 21:57
  Speaker 3: periods and stay invested, you're going to do better in
• 22:01
  Speaker 3: the long run.
• 22:02
  Speaker 2: I never thought i'd be talking to you about this
• 22:04
  Speaker 2: topic because usually and and I talk about radio stocks,
• 22:07
  Speaker 2: TV stocks, billboard companies.
• 22:09
  Speaker 4: That's kind of back in the day, billboard companies. What's
• 22:11
  Speaker 4: that great business?
• 22:12
  Speaker 2: By the way, you can't fast forward through a billboard.
• 22:16
  Speaker 2: Just remember that your second traffic exactly emerging markets. How
• 22:20
  Speaker 2: do you guys approach emerging markets?
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  Speaker 3: You know, I think you know we We're lucky. We
• 22:24
  Speaker 3: have two great emerging markets teams. One that has a
• 22:28
  Speaker 3: focus on providing equity i'm sorry, income along with the
• 22:33
  Speaker 3: equity returns, so equity and income focused, and the other
• 22:37
  Speaker 3: one that's a little bit more kind of focused on,
• 22:41
  Speaker 3: you know, more growth at a reasonable price and a
• 22:43
  Speaker 3: little bit more emerging market like with real growth behind it.
• 22:49
  Speaker 3: And so in this environment, you are seeing a natural
• 22:55
  Speaker 3: lyft to EM and I think it's because obviously the weakness,
• 22:59
  Speaker 3: and the dollar has propelled those markets. Again. We kind
• 23:03
  Speaker 3: of predicted that in our outlook piece in October that
• 23:07
  Speaker 3: whether we saw a dollar weakness, we might see the
• 23:10
  Speaker 3: strength of other current currencies happen, and investors have been
• 23:16
  Speaker 3: long under allocated in emerging markets, so you're seeing kind
• 23:19
  Speaker 3: of a natural lift in some of those areas with
• 23:22
  Speaker 3: real opportunity. The other thing I would say, Paul is
• 23:25
  Speaker 3: it's pretty apparent that we're kind of tapped out on
• 23:27
  Speaker 3: the fiscal spend here in the US. There's a lot
• 23:30
  Speaker 3: of other countries that have the ability to really spend.
• 23:33
  Speaker 6: So do you guys like hang out all the time
• 23:35
  Speaker 6: and like talk about stocks, Like like in the.
• 23:37
  Speaker 2: Day when conferences you get the cool kids will go
• 23:39
  Speaker 2: to the table.
• 23:40
  Speaker 6: You know, oh okay, and if they're not cool, you're like,
• 23:42
  Speaker 6: no thanks, yeah.
• 23:43
  Speaker 4: You take your stocks.
• 23:45
  Speaker 2: And group of former media analysts on Wall Street fun
• 23:48
  Speaker 2: and all these Drew Marcus says high Rich Rosen says
• 23:52
  Speaker 2: high go name dropping dropping. I mean, they're all just
• 23:55
  Speaker 2: they all know Ann Meletti. So that's in my studio
• 23:59
  Speaker 2: on my shape.
• 24:00
  Speaker 1: How cool is that?
• 24:00
  Speaker 4: That's really cool?
• 24:01
  Speaker 3: They were the all stars back in the day. I
• 24:03
  Speaker 3: was the little kid on the block.
• 24:04
  Speaker 4: Now don't say that please, all right, and thanks a lot.
• 24:08
  Speaker 4: Well you can tag her out. Yeah.
• 24:10
  Speaker 2: And Malletti, head of an equity Is this a new
• 24:12
  Speaker 2: role for you.
• 24:13
  Speaker 4: About five years?
• 24:14
  Speaker 1: Oh?
• 24:14
  Speaker 2: Okay, all right, yeah, she's always like the media analyst.
• 24:17
  Speaker 2: It's strong. And Malletti, head of equity Investments Offspring Global Investments,
• 24:21
  Speaker 2: joining us live here in our Bloomberg Interactive Brokers. We
• 24:23
  Speaker 2: appreciate getting a few minutes of your time.
• 24:25
  Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
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