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Biden Selects Powell To Lead Federal Reserve Again · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day, we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
• 0:15
  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. President Joe Biden selected
• 0:23
  Speaker 1: Jerome pal for a second four year term as US
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  Speaker 1: Federal Reserve Chair and elevated Governor Leo Brainerd to vice chair.
• 0:30
  Speaker 1: And I guess, uh, we're talking about consistency here, and
• 0:33
  Speaker 1: that's kind of what the market likes. With the SMP
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  Speaker 1: up nine tenths of one percent this morning. Let's get
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  Speaker 1: some color behind the decision. We can do that with
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  Speaker 1: Craig Tours, Federal Reserve, an economy reporter for Bloomberg News. So,
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  Speaker 1: Craig again, I guess this. The message here today is consistency. Yeah. Yeah.
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  Speaker 1: And the so elevation of Governor brainer to vice chair
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  Speaker 1: is interesting in that gives her a little bit more
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  Speaker 1: agency over monetary policy. I think, um, I can go
• 1:03
  Speaker 1: into that if you want, yeah, please, okay, So, chairs
• 1:08
  Speaker 1: Taylor have to kind of be in the center. Right,
• 1:11
  Speaker 1: They can't be like on one side of their committee
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  Speaker 1: or on the other. They have to find the consensus.
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  Speaker 1: And right now you to both know the consensus is
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  Speaker 1: shifting towards tighter policy. So where I think Governor Brainard
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  Speaker 1: comes in as a voice that doesn't have to be
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  Speaker 1: in the center, but kind of can kind of push
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  Speaker 1: hard on the flank, um, and maybe push the consensus
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  Speaker 1: one direction or another. UM. I want to as suspect
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  Speaker 1: that she'd opposed the chair, but she she can exercise
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  Speaker 1: a lot of weight here. That That's how I view it. Craig,
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  Speaker 1: what do you think? I guess you know, Taylor and
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  Speaker 1: I were just talking earlier. This just feels like a
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  Speaker 1: decision that could have been made days ago, weeks ago,
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  Speaker 1: and agree to the timing here. I don't have a
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  Speaker 1: lot of thoughts the timing, and as you know, there
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  Speaker 1: are more vacancies. UM. It does seem that the delay
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  Speaker 1: gave rise to a lot of, um, frankly distasteful personal
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  Speaker 1: digging at both these people. So I don't know why
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  Speaker 1: it took so long. People say democrats are a complex
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  Speaker 1: lot now, UM, so maybe there was some work to do.
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  Speaker 1: I just don't know. On that note, Craig, it's not
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  Speaker 1: just sort of the two headliners that we got today,
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  Speaker 1: but a vacancy for Vice Chair of Supervision to other
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  Speaker 1: vacancies as well. Are we going to hear more about
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  Speaker 1: those in early December? And you know who do we
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  Speaker 1: think could be in the front running for those? I
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  Speaker 1: mean clearly, Um, the White House will want diverse voices
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  Speaker 1: at the FED. Of course that's important. Um uh So
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  Speaker 1: I would expect them to go in that direction on
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  Speaker 1: the two governors seats and on the Vice Chair of Supervision. Wow,
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  Speaker 1: that requires a lot of expertise. It's highly complicated. Um.
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  Speaker 1: Obviously Democrats like Elizabeth Warren want to see a new
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  Speaker 1: direction after Randy Quarrels. I really don't have any idea
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  Speaker 1: who they're going to pick for that, but it probably
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  Speaker 1: won't be as complicated as as controversial um as their
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  Speaker 1: pick for o CC So, Craig, we're gonna hear um
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  Speaker 1: from the President um and the FED Chairman Palellan uh
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  Speaker 1: and Governor brainer. Did I guess one Wall Street time here,
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  Speaker 1: what do you expect to hear from the President as
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  Speaker 1: it relates to these selections. You know, I think what
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  Speaker 1: he said a lot is um. He's emphasized independence, and
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  Speaker 1: so now we have a Republican. His chair at Democrat
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  Speaker 1: is vice chair. I think he'll strike that note, but
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  Speaker 1: I think he'll also strike, uh, Paul, the note of
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  Speaker 1: inflation is high and he expects that independence to lean
• 4:02
  Speaker 1: against us. If you look at pulling on biden Um,
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  Speaker 1: inflation is really hurting them. So I think those are
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  Speaker 1: the two things he'll bring up. And Craig talked to
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  Speaker 1: us more about that because we're Some have said this
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  Speaker 1: is one of the more difficult times that we faced
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  Speaker 1: in Federal Reserve history, given inflation is taking up, and
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  Speaker 1: yet there has been an increased emphasis on meeting maximum
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  Speaker 1: in full employment, and the measures of that full employment
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  Speaker 1: are looking a little bit differently than they did before.
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  Speaker 1: How are you thinking about a balancing act of tackling
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  Speaker 1: inflation but maximizing full employment. So good observation. Taylor and
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  Speaker 1: I had a story on this on the Terminal and
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  Speaker 1: on our website yesterday. So this is a challenge, right
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  Speaker 1: they made. They went around the country in and with
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  Speaker 1: this trumping that maximum employment is a broad Bay East
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  Speaker 1: an inclusive mandate which is aimed at correcting their past
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  Speaker 1: mistakes of tightening before, things like minority unemployment rates had
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  Speaker 1: moved down substantially, before female labor force participation have moved
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  Speaker 1: up substantially. So what are they going to do here?
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  Speaker 1: How are they going to keep that pledge but go
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  Speaker 1: on the fight against inflation? I think one answer is gradualism.
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  Speaker 1: This is a highly credible central bank. They don't have
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  Speaker 1: to use a lot of power to get um inflation
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  Speaker 1: expectations nailed down. But you pointed directly at the challenge
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  Speaker 1: their Taylor, just like third thirty seconds. Do you think
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  Speaker 1: this White House is adequately you know, touting the success
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  Speaker 1: they're having with the economy coming out of this pandemic
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  Speaker 1: or it just seems like maybe the inflation narrative is
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  Speaker 1: overtaking it. It does as I said, It does seem
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  Speaker 1: to be overtaking the public sentiment for sure, and that's
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  Speaker 1: showing up in lots of places. As you both know, Uh, inflation,
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  Speaker 1: it's probably in your food basket when you go to
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  Speaker 1: the grocery store and other costs. You have. Americans really
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  Speaker 1: of all levels, Okay, Americans of all income levels really
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  Speaker 1: don't like inflation. Greig Tours, thanks so much for joining
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  Speaker 1: us Craig is the Federal Reserve, an economy reporter for
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  Speaker 1: Bloomberg News. I want to bring in Brian ben Diggi's
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  Speaker 1: president of m JP Wealth Advisors. Bryant thinks so much
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  Speaker 1: for joining us here. I don't know. I'm looking at
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  Speaker 1: my screen here. I see a lot of green here.
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  Speaker 1: So the market likes I guess some continuity at this
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  Speaker 1: Federal Reserve. What do you make of the announcements this morning?
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  Speaker 1: But Fed Chairman J. Pale, good morning Taylor. Yeah, I
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  Speaker 1: completely agree. Uh, you know, less than certainty regarding UM
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  Speaker 1: leadership at the FED obviously reduces some concerns and policy
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  Speaker 1: direction moving forward. I mean, Chairman has done a great
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  Speaker 1: job in trying to be as transparent as a communicator
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  Speaker 1: in light of all the conflicting variables. I think, um,
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  Speaker 1: you know, the focus is going to be moving forward.
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  Speaker 1: Are we going to stay at this pace of bond
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  Speaker 1: tapering or will that be accelerated as as we as
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  Speaker 1: we look at economic numbers moving forward? And obviously some
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  Speaker 1: commentary coming out of the St. Louis Fed, um, you know,
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  Speaker 1: which isn't encouraging the f o MC to continue to
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  Speaker 1: look at that policy. But I think at the end
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  Speaker 1: of the day. UM, you know, less change is good,
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  Speaker 1: especially when considering UM, some of the news out of
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  Speaker 1: Europe and in the oral markets, and and obviously inflation
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  Speaker 1: and interest rate. We have a full full plate here,
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  Speaker 1: so one less item on on on on the on
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  Speaker 1: the list is better for I think decision mature is
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  Speaker 1: moving forward. You talk about the news out of Europe.
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  Speaker 1: Of course we can talk about COVID cases. We can
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  Speaker 1: also talk about the Buddhist being talking about six percent
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  Speaker 1: inflation and this is a global inflationary story. How are
• 8:02
  Speaker 1: you thinking about markets next year as you have a
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  Speaker 1: FED that's trying to confront inflation and maybe walk back
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  Speaker 1: comments that it's uh less transitory than they thought, but
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  Speaker 1: also trying to tackle full employment mandate and the changes
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  Speaker 1: and what full employment really means. Great question. I think
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  Speaker 1: we need to think about inflation actually into three parts,
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  Speaker 1: uh and I'll take the easiest part, which is that
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  Speaker 1: the FED does have a dual mandate, So until we
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  Speaker 1: reach uh full unemployment, I think the FED is going
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  Speaker 1: to be very cautious about raising short term interest rates.
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  Speaker 1: And based on our analysis, m full employment UM is
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  Speaker 1: getting to an unemployment rate probably around three point eight
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  Speaker 1: percent when taking into account the number of folks that
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  Speaker 1: have retired early or have chosen not to re engage
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  Speaker 1: on a on a full time basis. And the economy
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  Speaker 1: now the other two parts of the inflation store, I
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  Speaker 1: think is breaking down the components of cp I. If
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  Speaker 1: we take a look at food, energy, auto sales, and
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  Speaker 1: some of these items that are really impacted by the
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  Speaker 1: supply chain and efficiencies, we think that those core components
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  Speaker 1: of inflation should come down as we move into Q
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  Speaker 1: three in the beginning of Q four second half of
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  Speaker 1: next year. I think the twelve six curveball or the
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  Speaker 1: point of uncertainty is really around wages and wage labor
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  Speaker 1: as being a critical driver of inflation year over year.
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  Speaker 1: And I think as we look at the level of
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  Speaker 1: engagement in the workforce, we look at the productivity numbers
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  Speaker 1: moving forward, how technology is impacting employer's decisions as well as,
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  Speaker 1: to be fair, the cultural shift that's going on, I
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  Speaker 1: think domestically between people evaluating do they work to live
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  Speaker 1: or live to work? Um if that's going to keep
• 9:53
  Speaker 1: a watchful eye on that. And I think that as
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  Speaker 1: time goes on, with science, you know, trying to help
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  Speaker 1: us lead out of this pandemic can We're optimistic that
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  Speaker 1: next year will be in an epidemic UM. That should help.
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  Speaker 1: The labor marks has been cool some of the wage
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  Speaker 1: labor inflation concerns, but that is definitely something I don't
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  Speaker 1: think anyone can prognosticate with accuracy as of this point
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  Speaker 1: in time. Hey, Brian, you know, looking at the SMP, boy,
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  Speaker 1: what a year investors have had up twenty year to date.
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  Speaker 1: When you talk to your clients about how do you
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  Speaker 1: start the conversation? Absolutely, I think moving forward the point
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  Speaker 1: is to break it down into a couple of quadrants.
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  Speaker 1: I mean, the first is looking at things from a
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  Speaker 1: fundamental economic perspective, which obviously is driving valuations UH, and
• 10:41
  Speaker 1: looking at corporate earnings and the pessimism that I've gone
• 10:44
  Speaker 1: into corporate earnings, and and the fact that you know,
• 10:47
  Speaker 1: over the last success of quarters we were beating those
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  Speaker 1: expectations and earnings growth for next year is still robust.
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  Speaker 1: We're thinking about a four percent global GDP growth perspective,
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  Speaker 1: supply chains UH, inventory levels UH being healed, demand for
• 11:05
  Speaker 1: goods and services exceeding supplies, so we're still um optimistic
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  Speaker 1: about the market continuing to grind higher over the course
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  Speaker 1: of the next twelve thirteen months. But at the same
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  Speaker 1: point in time, we have to be cognizant of those risks,
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  Speaker 1: and those risks are policy decisions coming out of Washington
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  Speaker 1: and the Fed. It's obviously the confluence of variables around
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  Speaker 1: interest rates and inflation. So it doesn't mean we're risk gone.
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  Speaker 1: We definitely need to find areas to allocate capital um
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  Speaker 1: that that can that can think about portfolio management and
• 11:41
  Speaker 1: asset allocation, but doing it a little bit different. And
• 11:44
  Speaker 1: that's why I think, you know, looking at you know,
• 11:46
  Speaker 1: assets like real estate for example, might be a better hedge,
• 11:50
  Speaker 1: let's say, than you know, trying to stick to the
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  Speaker 1: traditional sixty forty portfolio with with bonds being being the
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  Speaker 1: other side of that allocation. Brian, thanks so much for
• 11:59
  Speaker 1: joining us. Really appreciate getting your thoughts here on this market.
• 12:03
  Speaker 1: Brian Vendigi's president of m JP Wealth Advisors, Paul, we know,
• 12:11
  Speaker 1: of course, the big news of the day has been
• 12:13
  Speaker 1: some of the consistency the clarity coming out of the
• 12:16
  Speaker 1: White House when it comes to the Federal Reserve. J
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  Speaker 1: Powell of course getting the renomination for the head of
• 12:21
  Speaker 1: the Federal Reserve and Leal Brainerd of course the nominee
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  Speaker 1: now for Vice chair. Of all of that, we talked
• 12:27
  Speaker 1: about some of the headline news, but really, Paul, what
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  Speaker 1: stands out to me is some of the headline news
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  Speaker 1: that we've gotten out of the rate markets. You have
• 12:35
  Speaker 1: two year yields now climbing about six basis points. Let's
• 12:38
  Speaker 1: do all of this with the Lnend Managing director and
• 12:40
  Speaker 1: head of US rates strategy for BEMO Capital Markets, where
• 12:44
  Speaker 1: he helps run the fixed income strategy team, and Ian
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  Speaker 1: maybe talk to us about some of the jerk reactions
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  Speaker 1: that we see within the rate market up six basis
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  Speaker 1: points across the curve. What does that tell you? Well,
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  Speaker 1: I think that the biggest take away from today's events
• 13:02
  Speaker 1: was that Biden has effectively doubled down on Powell, saying
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  Speaker 1: that this is the person that we think should be
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  Speaker 1: leading the tightening campaign the end of KIWI in the
• 13:12
  Speaker 1: first series of rate hikes. And what we're seeing in
• 13:15
  Speaker 1: the market is that any risk that we would have
• 13:18
  Speaker 1: a more decidedly dovish chair has been limitated until we're
• 13:24
  Speaker 1: pricing in rate hikes. We see that in the two
• 13:26
  Speaker 1: year sector, the three year sector, and the five year sector.
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  Speaker 1: And what I'm watching is the continued flattening of the
• 13:33
  Speaker 1: five thirties curve that we expect will actually be very
• 13:36
  Speaker 1: thematic in two thousand and twenty two and be somewhat
• 13:39
  Speaker 1: at odds with what one would typically expect for this
• 13:42
  Speaker 1: point in the cycle. So in Taylor had to, you know,
• 13:46
  Speaker 1: correct me earlier this morning. She's so discussed about my
• 13:49
  Speaker 1: lack of knowledge of the yield curve because I said, Hey,
• 13:51
  Speaker 1: I look at the tenure and I see it at
• 13:53
  Speaker 1: one point six percent. It's kind of been around there
• 13:55
  Speaker 1: for a long time. What's the big deal? And she says, no,
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  Speaker 1: you're looking at the wrong part of the curve. Look
• 14:00
  Speaker 1: at the short end, where you know, the two years
• 14:02
  Speaker 1: gone from you know, a little more than twenty basis
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  Speaker 1: points up to where we are today at uh, you know,
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  Speaker 1: close to fifty six basis points. What does that tell you?
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  Speaker 1: Why should I be looking at the short end of
• 14:12
  Speaker 1: the curve? Well, what it tells us at a minimum
• 14:17
  Speaker 1: is that borrowing costs are going to be increasing for
• 14:20
  Speaker 1: a lot of the corporate sector and for a lot
• 14:23
  Speaker 1: of the economy because most rates, with the exception of
• 14:26
  Speaker 1: mortgages and longer dated paper, tend to be focused on
• 14:31
  Speaker 1: the two and five year sector as key benchmarks, and
• 14:34
  Speaker 1: that's why the FEDS tightening campaign, a potential tightening campaign,
• 14:38
  Speaker 1: is going to have so many ramifications for the outlook
• 14:42
  Speaker 1: on inflation as well as a potential for slowing growth
• 14:45
  Speaker 1: in a recovery that quite frankly has been going pretty
• 14:49
  Speaker 1: strong thus far. But two thousand and twenty two and
• 14:52
  Speaker 1: twenty three are are key periods of uncertainty for that.
• 14:56
  Speaker 1: What about borrowing costs for the Treasury? Your notes? Looking
• 15:00
  Speaker 1: at two's and fives today, what do you expect? I
• 15:05
  Speaker 1: do think that the Treasury Department has done a good
• 15:08
  Speaker 1: job historically in terms of turning out their debt, so
• 15:13
  Speaker 1: rising rate environment won't be too dramatic for the budget
• 15:16
  Speaker 1: in terms of federal borrowing in the very near term.
• 15:20
  Speaker 1: The two and five year auctions today, given the holiday
• 15:25
  Speaker 1: shortened week and some of the price action that we
• 15:28
  Speaker 1: have seen, will represent an important litmus tests for investor demand.
• 15:33
  Speaker 1: But all else being equal, the backup and rates I
• 15:35
  Speaker 1: think are going to provide an attractive buying opportunity for
• 15:38
  Speaker 1: investors in the front GEAM today, Ian, how do you
• 15:41
  Speaker 1: think the Fed will move here? Um? You know, assuming
• 15:46
  Speaker 1: they finish their you know, repurchases, the kind of kind
• 15:50
  Speaker 1: of winds down mid next year. How do you think
• 15:53
  Speaker 1: they're going to be in terms of raising rates in
• 15:55
  Speaker 1: because there's some folks out there, like pre Amira of
• 15:58
  Speaker 1: TV Security suggesting a gonna do anything three. What do
• 16:02
  Speaker 1: you think? Well, I think they will have a lot
• 16:05
  Speaker 1: of information over the course of the next two weeks
• 16:08
  Speaker 1: running up to the December f fm C meeting, and
• 16:11
  Speaker 1: if they're actively discussing accelerating the tapering process when they
• 16:16
  Speaker 1: meet in December, that suggests that they could be done
• 16:20
  Speaker 1: with kilee, not in the middle of but earlier let's
• 16:24
  Speaker 1: call it the INDO the first quarter, and then that
• 16:27
  Speaker 1: opens up the possibility for two rate hikes or potentially
• 16:31
  Speaker 1: more if the situation dictates it. What I worry about
• 16:36
  Speaker 1: is that Powell has come out and he had has
• 16:38
  Speaker 1: said that the set is expecting inflation to moderate in
• 16:42
  Speaker 1: Q two and Q three. So that's effectively the chair
• 16:47
  Speaker 1: doubling down on the transitory narrative and saying we're going
• 16:50
  Speaker 1: to continue to assume that this is temporary, temporary influence
• 16:54
  Speaker 1: on inflation until at least the middle of next year.
• 16:56
  Speaker 1: So while we might see an argument to be made
• 16:59
  Speaker 1: to two QUEI more quickly. At the end of the day,
• 17:03
  Speaker 1: we suspect that the FED will be content to deliver
• 17:06
  Speaker 1: one rate hike in two. Is that then, the why
• 17:11
  Speaker 1: behind the flattening of the yield curve that you started
• 17:14
  Speaker 1: this conversation with and you said it was traditionally not
• 17:17
  Speaker 1: what you would expect in this part of the economic cycle. Well,
• 17:22
  Speaker 1: I think one of the key reasons that we're seeing
• 17:24
  Speaker 1: the curve flatten is that there's already so much inflation
• 17:28
  Speaker 1: in the system, and the FED is has proven that
• 17:31
  Speaker 1: they're going to be reactive, perhaps not proactive, but trying
• 17:35
  Speaker 1: to make sure that inflation doesn't get out of control.
• 17:38
  Speaker 1: And so in that in that environment, we would typically
• 17:42
  Speaker 1: expect it to the curve to flatten, but we wouldn't
• 17:44
  Speaker 1: expect it to flatten with outright yields flat to lower.
• 17:49
  Speaker 1: And I think that that's the real interesting part of
• 17:51
  Speaker 1: what we're seeing play out in the market right now,
• 17:54
  Speaker 1: is that there's inflation that the market believes the FED
• 17:58
  Speaker 1: can counteract. But the global growth story has campt rates
• 18:03
  Speaker 1: contained overall, and when we think about it, each individual
• 18:07
  Speaker 1: economy up coming out of the pandemic in a different setting,
• 18:10
  Speaker 1: and I think that's what has contributed to that. Very good.
• 18:12
  Speaker 1: All right, and thank you so much for joining us.
• 18:14
  Speaker 1: Really appreciate it. In LinkedIn Managing director and head of
• 18:17
  Speaker 1: US Rates Strategies at BMO Capital Markets for home Strategy team.
• 18:22
  Speaker 1: That's Bank of Montreal for the folks that go back
• 18:25
  Speaker 1: a little bit. All right, let's talk tech with Dan.
• 18:31
  Speaker 1: I'ves he's a managing director senior equity analyst at Wedbush Securities.
• 18:34
  Speaker 1: There's a million ways we can go with Dan, but
• 18:37
  Speaker 1: I want to start in honor of Matt Miller with
• 18:41
  Speaker 1: Tesla and the EV market. Um. Dan, you've been so
• 18:45
  Speaker 1: out in front on this story, and you've been so
• 18:47
  Speaker 1: kind to share your thoughts with us here Bloomberg Radio
• 18:49
  Speaker 1: and TV over the years about your bullishness about this
• 18:52
  Speaker 1: story and this market. Here as you think about two,
• 18:56
  Speaker 1: how do you think the EV market from a competitive
• 18:59
  Speaker 1: stamp point is going to evolve? And then how does
• 19:02
  Speaker 1: Tesla fit into that? Yeah? I think it's it's great
• 19:07
  Speaker 1: framing into two thousand twenty two because I think this
• 19:10
  Speaker 1: is where we see the next level of adoption for
• 19:12
  Speaker 1: ev s. I think you're going to see your rereading
• 19:15
  Speaker 1: on the likes of a GM and a Ford because
• 19:18
  Speaker 1: of what we see on evs is those comings have
• 19:20
  Speaker 1: success and more and more the street used them as
• 19:23
  Speaker 1: disruptive technology plays, and you lose it in others that
• 19:27
  Speaker 1: are going to benefit because we're not five trillions of
• 19:30
  Speaker 1: dollars over the next decade. But but ultimately the name
• 19:34
  Speaker 1: that's going to continue disproportionately benefit is Tesla. And that's
• 19:38
  Speaker 1: why this is a stock despite the musk circus, Twitter poll.
• 19:44
  Speaker 1: I think now this is this doctor's on its way.
• 19:46
  Speaker 1: Four are base case eighteen hundred bookcase talk to us
• 19:50
  Speaker 1: about some of the bold cases that you see more generally,
• 19:52
  Speaker 1: Dan when you think about next year. It was so interesting.
• 19:55
  Speaker 1: Paul and I were earlier speaking about a big call
• 19:57
  Speaker 1: out of b of A saying that tech is and
• 20:00
  Speaker 1: you know, one of the biggest bubbles that they've seen
• 20:02
  Speaker 1: going back since nineteen nine. But you have a federal
• 20:05
  Speaker 1: reserve that's holding rates still relatively low. How are you
• 20:09
  Speaker 1: thinking about tech and tech bubbles into next year? Yeah?
• 20:15
  Speaker 1: I mean, and I covered tech during the bubble and
• 20:17
  Speaker 1: during the burst, and when I compare thement, it's an
• 20:19
  Speaker 1: apple's oranges because the fundamental growth stories are happening, and
• 20:24
  Speaker 1: it's a fourth Industrial revolution that's happening across clouds, tiever security,
• 20:29
  Speaker 1: five G as well as disruptive tech with e VS
• 20:32
  Speaker 1: front and center. So I view it totally different in
• 20:35
  Speaker 1: terms of the fundamental stories that are happening now. Some could,
• 20:39
  Speaker 1: you know, web wards about valuation, but we're talking about
• 20:42
  Speaker 1: growth over the next three, five, seven years, and there's
• 20:44
  Speaker 1: a scarcity of growth stories. Many of them are in tech.
• 20:47
  Speaker 1: That's why we view Nastac nineteen thousands for two thousand
• 20:51
  Speaker 1: and twenty two. And you know, many investors that have
• 20:54
  Speaker 1: stayed focus on the right lane on so many of
• 20:57
  Speaker 1: these valuation calls. You missed Amazon, you missed net Licks,
• 21:00
  Speaker 1: you missed Tesla, and I think you know the worries
• 21:03
  Speaker 1: you're gonna miss so many these others that are really
• 21:05
  Speaker 1: part of this Fourth Industrial Revolution. Dan, how do you
• 21:09
  Speaker 1: think I'd love to get the Dan eyes of you
• 21:12
  Speaker 1: on the metaverse? To you? What is that? And is
• 21:16
  Speaker 1: it something you want to pay attention to? Yeah, I
• 21:20
  Speaker 1: mean to me, it's serious. Dours that's going after we'll
• 21:24
  Speaker 1: call them is an Internet three dota or four dota.
• 21:27
  Speaker 1: And I think it's important because it's not just Facebook
• 21:31
  Speaker 1: in terms of metaverse, because when you look at Apple
• 21:34
  Speaker 1: and I believe Apple Glass comes out next summer, the
• 21:37
  Speaker 1: a r VR headset, that's just the start of really
• 21:40
  Speaker 1: what's gonna be in arms where it's going after metabus
• 21:43
  Speaker 1: between big tech and as well as pure plays on gaming,
• 21:46
  Speaker 1: as well as other errors its names like Mattaport and
• 21:49
  Speaker 1: others that play into the scheme. And I think it's
• 21:51
  Speaker 1: one where today you don't necessarily the revenue, but going forward,
• 21:55
  Speaker 1: this is not a hype theme. I mean it's real
• 21:57
  Speaker 1: dours being spent, and I ultimately think it's really Cupertino
• 22:01
  Speaker 1: that's going to lead the metaverse. I think facebooks on
• 22:04
  Speaker 1: the outside looking in when it comes to this, they're
• 22:06
  Speaker 1: gonna have to spend significant dours to catch up. But
• 22:10
  Speaker 1: is there any regulatory risk? We have an administration that
• 22:15
  Speaker 1: is very against and verbally has come out against big
• 22:18
  Speaker 1: tech about big conglomerates. What's the regulatory risk for you
• 22:23
  Speaker 1: next year? There is regulatory risk, and I think we've
• 22:27
  Speaker 1: seen that in terms of what coming out of the
• 22:30
  Speaker 1: belt Way as well as Brussels. But our view is
• 22:33
  Speaker 1: that is likely finds and importantly, the lack of consensus
• 22:38
  Speaker 1: within the Beltway is ultimately perceived bullish for tech because
• 22:43
  Speaker 1: the lack of consensus shows it's gonna be hard to
• 22:45
  Speaker 1: have legally change antitrust laws. And that's why right now
• 22:50
  Speaker 1: it's been at risk, but it's viewed as a contain
• 22:53
  Speaker 1: risk in the eyes of investors. I'd also say you
• 22:57
  Speaker 1: look at a company like Microsoft, which has already been
• 22:59
  Speaker 1: through the antect ust issues late nineties two thousands, they're
• 23:02
  Speaker 1: much more in position or strength to do acquisitions. First.
• 23:05
  Speaker 1: I think a lot of the traditional big tech which
• 23:07
  Speaker 1: you're going to be constrained, especially with that you're shining
• 23:11
  Speaker 1: light from the tour or two eight Dan, twenty seconds.
• 23:14
  Speaker 1: What's your top pick for continues to be Apple? Um?
• 23:19
  Speaker 1: You know, I mean Apple to me is a three
• 23:22
  Speaker 1: trillion dollar mark up going to next year. I think
• 23:25
  Speaker 1: it's a massive cycle that's going on iPhone and services
• 23:28
  Speaker 1: as a rerating, and this is one I think we're
• 23:31
  Speaker 1: going to conceive it move the high or despite Chip
• 23:33
  Speaker 1: shorte that's the other. I just want to say, Chip
• 23:35
  Speaker 1: shorts Transtor and I view as just the reason to
• 23:38
  Speaker 1: own more and more Apple. All right, Dan, thanks so
• 23:41
  Speaker 1: much for joining us. As always appreciate getting your broad
• 23:44
  Speaker 1: view of the tech sector. Dan ives He's a managing
• 23:46
  Speaker 1: director and senior equity analysts at web Bush Securities. He's
• 23:50
  Speaker 1: also proud alumnus of the Penn State University, where I
• 23:54
  Speaker 1: wrote many many tuition checks over the years. But Dan
• 23:57
  Speaker 1: has been consistently bullish on technology, consistently bullosh on the
• 24:02
  Speaker 1: ev market, and boy has he been right, and we
• 24:05
  Speaker 1: appreciate him taking some time now. Thanks for listening to
• 24:09
  Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to
• 24:13
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• 24:17
  Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller, three
• 24:22
  Speaker 1: pt on Fall Sweeney I'm on Twitter at pt Sweeney
• 24:24
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• 24:27
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