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- [00:02]
Carol Massar
When patients have a disease and the cause is known, it usually ends up needing a specific solution. On the podcast targeting the toughest diseases, we explore the innovative tools, methods and unique philosophy Vertex Pharmaceuticals is using to search for treatments for some of humanity's most challenging diseases. Subscribe today wherever you listen to podcasts.
- [00:32]
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- [01:03]
Carol Massar
Days it seems like AI agents are just about everywhere you turn, every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent. Secure any agent. Okta secures AI Being a small business.
- [01:35]
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- [02:20]
Carol Massar
This is Bloomberg Businessweek daily reporting from.
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Vonnie Quinn
The magazine that helps global leaders stay ahead with insight on the people, companies and trends shap today's complex economy. Plus global business, finance and tech news as it.
- [02:35]
Carol Massar
Happens. The Bloomberg businessweek Daily Podcast with Carol Massar and Tim Stanweck on Bloomberg.
- [02:42]
Host/Interviewer
Radio. Hey folks, you want to get back to that breaking news story involving Warner Brothers Discovery planning to reject a takeover bid from Paramount Skydance after the company amended the terms of its offer? This breaking news story by our own Lucas Shaw. Lucas is Bloomberg News Managing Editor of Media and Entertainment, also the writer of the Screen Time Newsletter. He joins us from, I believe, the West Coast. Lucas, the back and forth continues. Give us an update.
- [03:08]
Lucas Shaw
Here. Yeah, so for those who haven't been paying extra close attention, Paramount has now made seven or eight bids for Warner Brothers Discovery. This was the latest since it went public with its offer a couple of weeks ago. The main difference with this bid was that it kind of addressed concerns about whether Larry Ellison, who along with his son David controls Paramount, was fully backstopping the bid, which he is. But Warner Brothers says it is still not enough. They haven't made a final decision. The board will meet next week. They'll likely be a filing next week when they make that decision. But Paramount hasn't really increased its offer in a few weeks. It keeps amending it by sort of tweaking things around the margins. And I think the Warner Brothers board is waiting to see if Paramount wants to offer more money because they still feel like their deal with Netflix is.
- [03:55]
Carol Massar
Better.
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Co-Host/Commentator
Yeah. So, Lucas, why not just say that then? Why not just say this is not valuing the company highly enough? Give us more money. Why add the part that they're not really sure about the financing? And it seems like that's a little bit aggressive to, you know, a group of bidders that were already planning on potentially launching a lawsuit over.
- [04:12]
Lucas Shaw
This. Yeah, I mean, they've, they've, I think, tried to enumerate a number of concerns about the Paramount bid so that it gives them cover, given the threat of lawsuits and that Paramount has been on kind of this public campaign. Right. They've had one of their big shareholders, Jerry Cardinal, he went on a very popular podcast and talked about why he thought that the Warner Brothers board was making the wrong decision. They have appealed directly to shareholders. They've threatened lawsuits. So Warner Brothers has created a pretty substantive paper trail laying out many concerns to explain. And it gives them, gives Paramount kind of more to do. They don't understand why. I think Paramount's not just saying we'll match will kind of agree to everything Netflix has agreed to. And here's even more money. That's, that seems to be where Warner Brothers is at right.
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Host/Interviewer
Now. I mean, do we have any indication, Lucas, of what really Warner Brothers wants and what they think? Is it just coming down to money or is it actually who is the.
- [05:06]
Lucas Shaw
Buyer? Money is the biggest thing they, you know, the Paramount offer and the Netflix offer are fairly comparable. A lot of it depends on how much value you assign to the cable networks at Warner Bros. Owns. That's, you know, cnn, tnt, among many others. Warner Brothers thinks they're worth more than Paramount, hence the disagreement. I think there's some concerns about Paramount as a buyer because, look, Paramount is a very small company, right? If they didn't have the Ellisons behind them, this would not be a deal that it could contemplate. But it does have one of the wealthiest families in the world behind them, and that helps get the deal done. But what does that mean? Or I guess I should say, what does Paramount look like at the end of it? It is still a company sitting on a bunch of kind of troubled cable networks and a studio and some streaming services that are kind of in the third tier. Netflix. You know what you're getting? You're getting the most valuable company in the entertainment business, one that's been run very well. And so I think they feel good about that deal. There are also some concerns about the limitations that Paramount would place on Warner Brothers in the interim period if they were to do that deal. Limitations around what they could do with their debt. We saw this play out, actually, with the Ellisons in Paramount, where they kind of got in some fights with the leadership at Paramount and including. And also with the creators of south park over what they should do. It's up to a third party, I guess, to decide if a lot of these are window dressing. And it's really just all about the money. I would assume that, you know, at the end of the day, most these deals are about who offers us the most money. If Paramount came and offered $32 share, $34 share, $35 share, they'd get the deal.
- [06:40]
Co-Host/Commentator
Done. I was just going to say it feels like, you know, they want to go with Netflix and they just will go with Netflix. But I guess if Paramount. There's a price for everything, right? Paramount will be able to do this deal if it meets a certain price goal. But where will. Where will the bidding stop? Because Netflix could probably raise some more money, too, for.
- [06:59]
Lucas Shaw
This. Well, I think that's one of the kind of concerns or things that Paramount is trying to work.
- [07:05]
Ad/Promo Announcer
Through.
- [07:05]
Lucas Shaw
Right. If they are going to come back and offer more money, how do they do that in a way where they don't just end up in another bidding war that they lose? Right. I think they felt like they were. They've long felt like they were the favorite to win this. They were surprised by how aggressively Netflix came after it. They certainly share your belief that the Warner Brothers board just prefers the Netflix offer. And so if you're Paramount and you come back and you only increase your bid by two or three dollars a share. That's something that Netflix could probably match if you have to increase. If you increase it by even more, some of those Netflix shareholders might balk and say, why are we doing this? Because you've already seen the share price of Netflix go down over the last few weeks as investors are worried about how much they're doing this deal and what this deal means for the.
- [07:48]
Host/Interviewer
Company. We thought it would carry over into 2026, and it looks like it will. All right, Lucas. Good stuff as always. Really appreciate it. Lucas Shaw he's managing editor of Media and Entertainment here at Bloomberg News and also writer of the Screen Time newsletter. Really the keeper of the Screen Time universe, joining us there from Los.
- [08:05]
Carol Massar
Angeles. Stay with.
- [08:07]
Vonnie Quinn
Us. More from Bloomberg businessweek Daily Coming up after.
- [08:10]
Carol Massar
This. When patients have a disease and the cause is known, it usually ends up needing a specific on the podcast targeting the toughest diseases, we explore the innovative tools, methods and unique philosophy Vertex Pharmaceuticals is using to search for treatments for some of humanity's most challenging diseases. Subscribe today Wherever you listen to podcasts. These days, it seems like AI agents are just about everywhere. You turn every field and every function, but without identity you can't trust those your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent, secure any agent. Okta secures AI support for the.
- [09:17]
Vonnie Quinn
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- [10:06]
Carol Massar
Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available@public.com disclosures when you.
- [10:26]
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- [11:34]
Carol Massar
FDIC. You're listening to the Bloomberg Business Week Daily.
- [11:38]
Vonnie Quinn
Podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or.
- [11:47]
Carol Massar
Watch us live on.
- [11:48]
Co-Host/Commentator
YouTube. Staying on the markets now and the minutes that just came out Obviously Ross Mayfield joins us. He's investment strategist at Baird Private Wealth Management. Ross, obviously you haven't had a chance to pass the minutes, but is there anything from what you heard in the last few minutes that would concern you or that would give you any more clarity about the path ahead for the.
- [12:07]
Vonnie Quinn
Fed? No. There's a lot to parse. I think a couple of key takeaways. The division is obviously not unprecedented but but fairly unprecedented for the last decade plus and I don't think that replacing Fed Chair Powell is going to alleviate that. So I think at some point in 2026 we'll start to see pressures at the long end of the curve again. Even in this bull market. The equity market has responded. When you've seen 10 year yields press up towards 5%, I don't know if we'll get there or not. But I do think that at some point the bond market will start to worry again about the politicization of the Fed and what that might mean for rates. The other key thing I think Is the Fed by cutting in December gives them room to not cut in January and then get to March when we will have several more months of clean data. We'll get to work through all of the shutdown idiosyncrasies and get a better picture of things as they move towards neutral, of course, all assuming that we don't have another government shut down before then, we.
- [13:08]
Co-Host/Commentator
Hope. Right. We don't know what's going to happen at the end of January, but hopefully there won't be a repeat. So, Ross, would you be more concerned right now about inflation coming down the pike, particularly with one big beautiful bill taking effect, or the labor market, which at least so far doesn't appear to be materially weakening. But there are some signs and there are very definitely people out there that are very concerned about.
- [13:30]
Vonnie Quinn
It. I'm far more concerned about the labor market. I think the Fed is doing the right thing by kind of resuming cutting mode to at least get to neutral, if not go a little bit below it in 2026. The uptick in the unemployment rate, some of the jolts and some of the survey data that we've seen is quite concerning. And then on the flip side, yes, inflation is sticky above 2%, but we really have never had inflation kind of just hover around 2% for a long period of time or even a medium period of time. You've got rents coming down, you've got energy costs under control. There might be some upside pressure from tariffs, but I do think that the major concern about tariffs is a bit overblown or that's what the data would say at this point. So much more concerned about the labor market. And so I do think that the Fed is directionally right to be cutting, though. I understand, you know, most of the members see it as a very close.
- [14:20]
Host/Interviewer
Call. Hey, you know, Ross, I just want to get into. You have done some work, you guys, and put out a note and you talk about eight themes heading into the, into the new year, everything from data center electricity, electricity consumption to roi, return on investment out of all of the spend. You look at what's going on in tariffs. You look, you talk about, you know, kind of reference us back to the dot com bubble and you also talk about Fed Chair Jay Powell. So I'm just curious. We can't go through all eight of them, but give us one or two that you think have to be top of mind in the new.
- [14:52]
Vonnie Quinn
Year. Yeah, so I'll give two quickly. I think the biggest thing next year as we talk about inflation and in a midterm year is going to be data centers and the price of electricity. This is already been kind of a burbling theme, but I think it'll come to a head next year. I think we'll see to the extent that it's possible government intervention in regulating or getting energy prices under control, especially in a midterm year when we know that inflation has been such a hot button political.
- [15:17]
Host/Interviewer
Issue. So how do you do that? Do you expect the President to say, hey, everybody, stop doing the AI spend, which is a major initiative for their administration? How do we do.
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Vonnie Quinn
That? I think the administration, at least in the near term, will lean on deregulation to kind of get some costs under control. That's been a, a theme in more traditional fossil fuel energy sector as well. But obviously the administration can't risk losing the AI race to adversaries like China, so you can't stop. But I do think that they're going to be very hypersensitive to electricity inflation when they won an election in 2022 or, I'm sorry, on 2024, on the back of inflation, affordability, cost of living, that that has people so up in arms. The other point I would just make is I think that the concerns about a bubble, while they make sense to me, I think we are so far from a bubble at this point, especially the dot com corollary. We're in a nice bull market. The market has roughly doubled off the October 2022 lows. But if you overlay it with what the market did in the late 90s, the market went up Eightfold into the 2000 top. I don't think that the sentiment is bubbly. I don't think that the price action is bubbly. And I think that the fundamentals of the underlying companies show that this is just a bull market driven by profits and not a.
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Co-Host/Commentator
Bubble. That will be very good news to a lot of people out there that are invested. What about the metals? Is there a bubble there? Are we in bubble territory for any of them? Gold, silver, any of.
- [16:46]
Vonnie Quinn
Them? To me, gold was, you know, we were talking about an AI bubble at a time when the real bubble in markets was in gold. Now it's deflated a bit. You know, we had the parabolic price move into the fall, a bit of consolidation here. And you tend to see that whether it's in gold or other assets, you have a parabolic price move, goes vertical. You need a period to consolidate, to reset sentiment. So I think over the intermediate term, bullishness on metals and using it as a diversification part of a portfolio makes a lot of sense, but I don't know that we resume that uptrend maybe until the middle of 2026. I think there's some sentiment that has to be reset and price action that has to be consolidated. But it certainly had a lot more signs of a bubble over the summer than we're seeing in stocks right.
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Host/Interviewer
Now. Still up 57% year to date. So there's a bubble. I'll take that crazy, right? All right. Good stuff. So appreciate it. Thanks so much for joining us. Ross Mayfield, investment strategist over at Baird Private Wealth.
- [17:43]
Carol Massar
Management. This is the Bloomberg Businessweek Daily Podcast. Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business.
- [17:54]
Vonnie Quinn
App. You can also listen live on Amazon Alexa from our flagship New York.
- [17:58]
Carol Massar
Station. Just say Alexa play Bloomberg.
- [18:01]
Host/Interviewer
11:30. All right, everybody, we're back on Bloomberg Markets. Carol Massar along with Vonnie Quinn live here at Bloomberg headquarters. There is a lot going on geopolitically was this past year will be probably again in 2026. Here's just a few of our stories that have crossed the Bloomberg on this Tuesday, the United Arab Emirates, Emirates, excuse me, said it will withdraw forces from Yemen following a flare up in tensions with Gulf ally Saudi Arabia over military operations in the conflic hit country. You've got U.S. central Command coming out saying U.S. forces and partners killed or captured nearly 25 Islamic State operatives following large scale airstrikes across Syria earlier this month. And then also European leaders held a call to talk about Ukraine after Russia said it would revise its negotiating position, claiming Ukrainian drones targeted a residence of President Vladimir Putin. There's a lot going on. So good to have back with us. Ed Price, he's senior fellow non resident at nyu. Former British trade official. He has advised members of the European and British parliaments. He also teaches Jiu Jitsu in New York, which I had no.
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Co-Host/Commentator
Idea. I did not know that either. Oh my God, didn't.
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Ed Price
I? Yeah, I'm.
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Co-Host/Commentator
Sure. Useful in your trade. Seriously though, it could be useful in your trade.
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Ed Price
Talks. No, it would have been yes, if you're allowed to wrestle but you sit there and.
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Carol Massar
Listen. I don't.
- [19:14]
Ad/Promo Announcer
Know. We've seen that in some, I.
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Host/Interviewer
Feel like parliaments overseas, maybe in Asia. Hey, how are.
- [19:18]
Ed Price
You? I'm good, thank you. Very.
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Host/Interviewer
Well. How are you doing? Okay. Like it's amazing that we are here in December. It was a year that felt like we had weeks that would never end and a year that would never end. And yet here we are. How's the world doing right now? And what are the, what are the parts of the world that you're watching most closely? What are the leaders that you are watching or who.
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Ed Price
Are. Well, I mean I'm always watching President Donald Trump. He lives in my head rent free and I think that's probably true of a lot of people. And then of course Putin. I'm watching Putin, Zelensky and that Nexus. It's interesting that I'm not really watching Xi Jinping at the moment, which.
- [19:54]
Co-Host/Commentator
I know, should you be? I mean we saw those exercises the last few days. It's, it's really popping off again if you like. I mean, is he just prodding the Japanese and the US or is he actually working on a.
- [20:04]
Ed Price
Plan? Well, I think he's biding his time and someone like me who's is always very excitable about the downside and I could list all the times I've got that run. I'm always watching China for its potential invasion of Taiwan. And it does seem this year and in the last few years that, that, that doesn't seem as imminent as you'd think. Now you're right to point out that there's visual data and there's military data that would suggest otherwise, but I think that's probably part of a strategy, as you suggest, to ratchet up the pressure and remind Japan and remind the United States that China has this new, this new foundability. It doesn't necessarily mean that if it deploys its forces it will employ them. So my conclusion after a while is that I've probably been a bit hysterical about the China Taiwan.
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Co-Host/Commentator
Issue. Well, no, but there is a deadline on it, right? I mean, Xi Jinping wants this done at the back end of a ten year plan, but yeah, continue.
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Host/Interviewer
Carl. No, no, no, you.
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Ed Price
Continue. Well, I mean, I mean, no, I mean again, it's, for me, I thought for a few years that it was imminent. I mean, I've said this before, the reason I think it isn't is that China understands that you can't just float a force over the 120 miles to the west coast of Taiwan without also confronting the Americans. So it's harder than they think at the.
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Host/Interviewer
Ed. Who do you think fears President Trump? Who do you really think considers he and the United States still an.
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Ed Price
Ally? Well, on the first one, who fears him? Vulnerable. Vulnerable members of our labour market, possibly Spanish speaking people who are here in good faith working hard to create the GDP that we need to confront China Or Russia, that's a bad thing, right? If you're, if your labor market is. Is shrinking and afraid in their gdp, geopolitical confrontation. And the second part of your question is, I think, who respects.
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Host/Interviewer
Him?
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Ed Price
Yes. Well, I mean, I mean, I'm exhaling. I don't know that he's respected.
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Host/Interviewer
Because you listen, we talk about your relationships that you've had, certainly in the UK and with European officials. I'm assuming you still have confidants and folks that you talk to. I mean, do they fear him? Do they respect him? Do they consider him certainly members of Naito still an.
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Ed Price
Ally? Well, I can't speak for NATO. I mean, I was in the economic side, the of. Of government fair. But yes, rendering them anonymous. Friends of mine who are still serving in various parts of the world do not respect President Donald Trump. And they don't respect him for one reason, which is that whereas Nixon presented a very effective mad madman routine, Donald Trump doesn't actually stick to his guns. And if you go through his record, I mean, I was talking in the Green Room about Liberation Day every single time he said, thus far and no further, or this will happen. You know, if X happens, why will happen? It hasn't really. So I think that people have now sort of realized that there's no incentive with him to, to do as he asks, necessarily because he doesn't follow.
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Host/Interviewer
Through. Well, so is.
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Ad/Promo Announcer
It. I.
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Host/Interviewer
Just. Is it so that the bark is worse than the bite ultimately for President.
- [22:54]
Ad/Promo Announcer
Trump? I.
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Vonnie Quinn
Mean.
- [22:55]
Host/Interviewer
Right. At times. Vonnie, we certainly felt the bite. Liberation Day in markets, investors.
- [23:00]
Ed Price
Iran. Yeah, he struck Iran. But I mean, I put it like this before. Teddy Roosevelt famously said, speak softly and carry a big.
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Vonnie Quinn
Stick.
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Ed Price
Yeah. And it seems that President Trump, with as much respect as I can muster, speaks incoherently and sort of occasionally carries a stick. And you can't infer as a rival power or an adversary or even an ally exactly what his behaviors are going to.
- [23:23]
Vonnie Quinn
Be.
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Co-Host/Commentator
Right. But that's what makes it so terrifying, especially if you're a Venezuela and you know, there is so many warships, ships and carriers and troops basically stationed off your coast. What's going to happen with.
- [23:37]
Ad/Promo Announcer
Venezuela?
- [23:38]
Ed Price
Ed? Whatever we do, we are damaging our power, whatever we do. In showing hard power in the way that we are and moving away from soft power, we are reducing the overall power of the United States. That's because the hard power of the United States is in part based on our soft power. People like us, they trust us, they lend us money, and we debt, finance a military So I don't know exactly what's going to happen in Venezuela. I imagine there's going to be more extrajudicial killings, but at some point that is going to seep into the market for US Debt and at some point people are going to notice in the next.
- [24:10]
Co-Host/Commentator
Decade. Why has it not so far? I mean, for a president who said we're not getting involved internationally in any international wars, we're, you know, in Russia, Ukraine, we're in not. Well, we're not in Taiwan yet, but maybe, maybe we would be Nigeria, Venezuela, I mean, where else there's so many going.
- [24:27]
Ed Price
On? Well, in striking people from the air, that's the Obama playbook. So I think there's some continuity there with, with President Trump. He hasn't put boots on the ground, so that would be the marker for a real sea change in his policy. If you put boots on the ground in Venezuela. But back to the point on Treasuries, I mean, I think that the dollar is on a structural course to some form of run on the dollar, some form of massive correction this century, perhaps even in the next quarter century. And that is going to be very difficult for economic policymakers to deal.
- [24:59]
Host/Interviewer
With. Is that why we've seen gold go up? Like, what's your take on the gold trade? Or do you have.
- [25:03]
Ed Price
One? Well, I mean, I mean, I think as the dollar smile potentially weakens, it won't completely go away, but it will fade. Yeah, people are going to want what they consider to be safer assets. I think that's gold. I think that's been Bitcoin, even though of course bitcoin has speculation attached to it. But what I really scratch my head about is if there was a new thesis that emerged that there were too many dollars in existence per se, what exactly would the economic policy response be? It couldn't be the response that we saw in the 2008 crisis, which was quantitative easing. It would have to be some sort of second folk, a shock and that would be disastrous. So. So I don't know why the treasury market isn't more illiquid I would have expected it to be, but that is the trend I would.
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Host/Interviewer
Foresee. What's the biggest risk to the.
- [25:48]
Carol Massar
World? Is it.
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Host/Interviewer
That? Is it. You know, there's a big risk to the world, there's a big risk to the United States. Take whichever one you.
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Ed Price
Want. The United States right now is the biggest risk to the world as expressed in the world that the United States built. And the United States has become the first country so far as I can see in history to voluntarily do dismantle its empire and to voluntarily annoy its own.
- [26:11]
Host/Interviewer
Allies. Can I ask you something? I worked with someone from the UK and she said, you have a young country, this kind of stuff's going to happen. Talk to me about the history of the United Kingdom and how it has changed. So how does this moment in time. We've only got about 45 seconds or a minute left here. How do you think possibly this moment in time fits into US.
- [26:32]
Ed Price
History? Well, the United States has always had a decision between a system of government based on lock, which is essentially consent. And this is something the ideas that Jefferson copied or Hobbes. And the bigger that America has got, the more that you've seen some American characters in history say, hold on, the president should be stronger and stronger. He should become the leviathan that Hobbes writes about. And this is what the Trumpian moment is. Are we going to continue down a consensus, consensus based model of governance or are we in fact going to see a much, much stronger executive.
- [27:06]
Host/Interviewer
Emerge? And I would say midterms, certainly. And the next election will give us an idea of where we go.
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Co-Host/Commentator
Next. We're going to have to have you come back in again, Ed. It's such a pleasure to have you in.
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Ed Price
Studio. Thank.
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Carol Massar
You.
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Co-Host/Commentator
Yeah. Senior fellow at New York University. And our thanks to him. Really just running the gamut there. Of all of the theaters of, I don't want to say theater of war, but theaters, let's say our stress points. Stress hotspots. Exactly.
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Carol Massar
Yeah. Stay with.
- [27:33]
Vonnie Quinn
Us. More from Bloomberg businessweek Daily coming up after.
- [27:36]
Carol Massar
This. These days it seems like AI agents are just about everywhere you turn every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent, secure any agent. Okta.
- [28:09]
Vonnie Quinn
Secures. AI support for the show comes from public. On public, you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI, it all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated Assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by.
- [29:01]
Carol Massar
Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only.
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Vonnie Quinn
And is not an investment recommendation or.
- [29:16]
Carol Massar
Advice. Complete disclosures available@public.com disclosures when you.
- [29:20]
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- [31:01]
Carol Massar
Acrobat. You're listening to the Bloomberg Business Week Daily.
- [31:05]
Vonnie Quinn
Podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or.
- [31:13]
Carol Massar
Watch us live on.
- [31:14]
Host/Interviewer
YouTube. All right going to keep on the markets here as we've got about just a shy of a minute. Wishful thinking. No, we have about an hour to go here and then one more day tomorrow. We do have just two trading days left to closes to get through here. Our next guest reminds us that the US Market has had a great year but has lagged other major markets. It's always a good perspective to kind of pull out from the US and see what's gone on around them around the world with more on the year that was and what may be in store in 2026. With us is Melissa Brown, head of investment decision research over at SimCorp. She joins us here in studio. I always like, we're like, oh, look what the US has done considering everything that was thrown at it this year, and yet take us through global market performances because if you widen out, you see some real.
- [32:01]
Melissa Brown
Outperformance. You absolutely do. That's not to say the US Market has not been unusually strong this year. It's just that that markets outside the developed markets, excluding the US have been much stronger and emerging markets have been even stronger than that. So you know, we've seen just huge strength across the globe with the US Kind of, you know, toward the back of the.
- [32:25]
Host/Interviewer
Pack. It's interesting. Do you think, well, okay, so do you think that continues in 2026 or how are you gauging what has happened this year and is it an indication of what could happen next.
- [32:35]
Melissa Brown
Year? Well, you know, if you look back historically at annual returns, so we've had, if, you know, unless something really changes between now and tomorrow, we'll have about a three year return of about 20% on average each year. That kind of strength three years.
- [32:54]
Host/Interviewer
In a row about the US.
- [32:55]
Melissa Brown
Market. I'm talking about the US market, guys. That kind of strain three years and in a row is typically followed by lower than average returns. In fact, when it's happened going back for the 100 years, we have data it's about half the time the market's been down in the subsequent year and about half the time the market's been up. But on average it's the, the return is about a third of the long term average.
- [33:19]
Co-Host/Commentator
Return. We also saw huge gains outside the U.S. so if you were a prudent investor, would you say, look, there's a lot of unknowns about the US Right now. Sure, there are a lot of knowns about emerging markets too, but maybe I'll just dip my toe in there.
- [33:32]
Melissa Brown
Better? I would agree with that, that sentiment because I, you Know, the world outside the US had lagged for many years, I think for about 20 years. So I think it's just starting its catch up phase and assuming that companies can report decent earnings, that economies stay reasonably strong, I think outside the U.S. you know, certainly offers a lot of opportunities. The problem comes, I think, is if the US market falls apart, in which case, you know, nobody is immune. Nobody is immune.
- [34:09]
Co-Host/Commentator
Exactly. Well then would you want to rotate a little bit into the bond universe, for example, or something a little bit safer? I mean, I would have said gold, but gold has just been on so much of a tear that I'm not sure that would be wise.
- [34:19]
Melissa Brown
Either. I mean, I also worry a little bit about the bond market because I think it really, you know, I think if the Fed is too aggressive in cutting rates, yeah, everybody is going to start to worry about longer term inflation and we're going to see longer rates going up. So I don't think that's going to be, at least right now you don't want to invest in, in.
- [34:40]
Host/Interviewer
Bonds. Melissa, you guys wrote a piece that looked at historical annual returns and you called it Forget the Fed, forget the trade, forget earnings, inflation, market concentration. What do statistics tell us about the US market in 2026? Do you feel like at this point that you have a good batch of statistics to figure out 2026 or do we have to wait a little.
- [35:00]
Melissa Brown
Bit? Well, you know, on the one hand you could say past performance is no indication of future, which any of us in this business know, we say all the time. But on the other hand, if you think about it intuitively, the market has been so strong, strong valuations are quite high. So unless we can come up with unusually good earnings growth at when at the same time inflation stays tame, employment stays strong, so we have the consumer staying in the market. It's intuitively, it's hard to imagine how we could get another year of 20% plus.
- [35:39]
Co-Host/Commentator
Returns. And yet, as I was saying to Carol earlier, if we get just a percent of a return now, it's going to feel like so disappointing, isn't.
- [35:46]
Melissa Brown
Will, when in fact it's probably not that bad. Particularly, you know, in a relatively low inflation environment, the real return is still pretty.
- [35:54]
Co-Host/Commentator
Good. So if momentum is shifting, where would you look to in the market? I mean, are we going to see a broad rotation into everything else, the 493, or will there be winners there.
- [36:03]
Melissa Brown
Too? Well, I think there will be winners there. I mean, the trade hasn't gone away. I think it's going to broaden out though, to companies who are adopting AI in, you know, in some way. I think, you know, if that can help their margins and, and just, you know, help their overall earnings. I think that's, we can see some running out, broadening out, but it probably needs to be selective. I don't think I would say, you know, sell the Mag 7 and buy everything else at this point. I think we still need to see what.
- [36:36]
Co-Host/Commentator
Happens. What are, what are clients asking you most? I mean, after they ask you the.
- [36:42]
Melissa Brown
Question? Well, you know, we're in the business of forecasting volatility more than forecasting returns. And the big question is why is volatility so low? It seems like there's so much uncertainty out there whether it's geopolitical or.
- [36:57]
Host/Interviewer
Economic. VIX right now at.
- [36:59]
Melissa Brown
14. Yeah, Vix at 14 hour risk risk models are at, you know, they're not at all time lows, but they're much, they're lower than.
- [37:07]
Host/Interviewer
Average. All right, Melissa, I'm your client. Why is it so.
- [37:09]
Melissa Brown
Low? Well, I think I'm not really.
- [37:13]
Host/Interviewer
His client, but why is it so low? Why so much.
- [37:16]
Melissa Brown
Complacency? I think one of the reasons is that you actually stocks are not moving together. You have low correlation. So you have the days the Mag 7 does well and everything else doesn't. Or maybe it's, you know, it's a tech move versus everything else. But stocks have very low correlations. So that translates into yes, the market has been going up, but it's been going up little bits every day. You're not getting these huge surges in returns. And I think that's one reason that both the VIX and models that predict volatility as we run continue to see volatility staying very low on the MOVE index as.
- [37:57]
Co-Host/Commentator
Well. Multi year lows. Thank you so much for joining. Fascinating conversation there. That is Melissa Brown joining us in studio. She's head of investment decision research at.
- [38:07]
Host/Interviewer
Simple. Happy New.
- [38:08]
Carol Massar
Year. This is the Bloomberg Business Week daily podcast available on Apple, Spotify and.
- [38:16]
Vonnie Quinn
Anywhere else you get your podcasts. Listen live Weekday afternoon from 2.
- [38:20]
Carol Massar
To 5pm Eastern on Bloomberg.com, the iHeartRadio.
- [38:24]
Vonnie Quinn
App, TuneIn and the Bloomberg Business app. You can also watch us live.
- [38:29]
Carol Massar
Every weekday on YouTube and always on the Bloomberg terminal. This podcast is brought to you by FedEx. The new power move. Hey, you know those people in your office who are always pulling old school corporate power moves, like the guy who weaponizes eye contact. He's confident, he's engaged, he's often creepy. It's an old school power move. But this alpha dog laser gaze won't keep your supply chain moving across borders. The real power move? Having a smart platform that keeps up with the changing trade landscape. That's why smart businesses partner with FedEx and use the power of digital intelligence to navigate around supply chain issues before they happen. Set your sights on something that will actually improve your business. FedEx. The new power move. These days it seems like AI agents are just about everywhere. You turn every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent, secure any agent. Okta secures AI. Here's a paradox. We buy insurance for peace of mind. Yet the very policies we trust can deliver the biggest financial shocks. Across America, millions of claims are denied every year. Not because people did anything wrong, but because policies quietly excluded the things that happened. The psychology of trust tells us we assume the contract is fair. But in insurance, the information gap is massive. The insurer knows every detail of what's covered. The policyholder rarely does. That's where my policy advocate comes in. For just 27 cents a day, their platform reads your policies and shows you in plain language where you're vulnerable. They're not selling insurance. They don't do that. It's about transparency, giving ordinary people the same understanding insurance companies have had for decades. Because when you know what's really in your policy, you can plan, protect and avoid surprises. Before you trust your policy to protect you, let my policy advocate tell you what it really says. Visit mypolicyadvocate.com today. Peace of mind starts with knowing the truth. Mypolicyadvocate.com hey, Ryan Reynolds here wishing.
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