00:10:34 · S8, S2, Claudia Sahm, S6, Kristina Campmany
[00:10:34] S8: I think the consumer is OK. [00:10:36] S2: And a lot of it is going to depend what does happen, for example, with the Iran war and with gas prices. You know, we're getting oil out of the Gulf because we are engaged in escort operations. But it's very expensive to get that oil out. And so the market, the oil market, is pricing in all risks around that. If we see a resolution to the Iran war, and you see a really. [00:11:01] S5: Durable a structure. [00:11:04] S2: Built around getting oil and gas out of the Gulf of Hormuz, or the Strait of Hormuz, then you're going to see oil prices come down. That's going to give immediate relief to people's pocketbooks. [00:11:14] S6: Constance, what are you going to write about this weekend? Folks, commercial free for you for the next 20 minutes. Kristina Campmany coming up with Invesco, but right now, Constance Hunter, EIU. What are you going to write about this weekend? I mean, you have such a broad mandate. I'm just fascinated. What's the Constance Hunter theme? [00:11:31] S2: Well, I'm looking at really what is happening with this global AI sell-off, right? So you had Hong Kong down. You had Taiwan down. Taiwan is engaged now in pricekeeping operations to stabilize that market. Where are those fault lines? We still have Japan engaged in this massive carry trade, invested in equities around the world. [00:11:53] S0: Are we at a tipping point there?
00:11:53 · Kristina Campmany, S2, Claudia Sahm, S6, Tom Keene
[00:11:53] S0: Are we at a tipping point there? [00:11:55] S2: What is happening with regard to economic policy that the Democrats are going to be able to enact? Obviously, this comes down to the state level, and one of the big themes that the market has been focusing on over the last several days is this sort of curb of AI. [00:12:12] S5: Build-out. [00:12:14] S2: Really, the thing is, to what extent is that happening, and are we talking about an end, or are we talking about some more sensible policies that make it more palpable to the general public? [00:12:23] S6: Right. [00:12:24] S2: Public is really against the AI build-out, and we don't do anything about it. Then we would have such significant backlash down the road. So I'll be looking at all of this and really thinking about what are the economic vectors we need to look at going forward. But if I were looking at just this jobs report, and not thinking about the shock of the election, I would say that we are on solid footing based on this jobs report. [00:12:49] S6: Thank you so much. Excuse me. Constance Hunter with us here from EIU. The last time Kristina Campmany came in, for whatever breaking news reason, we were so rude. [00:13:00] S3: You were here for. [00:13:03] S6: Two questions or something, and Vesto called up from Atlanta and said, how can. [00:13:07] S3: You treat her like that? [00:13:08] S6: So for a long conversation this morning, Kristina Campmany on this crazy global bond market and what it says to us. [00:13:17] S3: Were you in college at Villanova with Jalen?
00:13:17 · Tom Keene, Kristina Campmany, Paul Sweeney, Kristina Campmany, S6
[00:13:17] S3: Were you in college at Villanova with Jalen? [00:13:20] S0: I wish I could say I was. He's a number of years younger than me. But we have cheered him on. [00:13:26] S1: They're just over in Rome? Yes. [00:13:29] S0: Yes, they were. [00:13:29] S3: Did that work out? Did you go? [00:13:31] S0: We did not end up going. [00:13:32] S9: I was actually in Rome with a Villanova crew in May. But I feel like with the marathon and Halloween and the little kids, stayed stateside this time. [00:13:42] S3: We're dying on yield this morning. [00:13:44] S6: What an honor to go from Priya Misra to you, Ira Jersey, coming up. later with Tony Crescenzi as well. As I said, in this blur that we're all in, what will you write about or think about through the weekend on Yield? [00:13:58] S9: Well, it's interesting because we were even saying coming in today, like... It's payroll Friday. [00:14:03] S1: I completely forgot. [00:14:04] S9: And you're like, the market is most not focused on payrolls. And again, that's a big number. Those are big revisions. Even if you look at the three-month, I was looking, there are three-month moving average now for payrolls is 119. The six-month is only 73%. There's sort of like big gaps, but I don't think that's where the market's focused at all. I mean, it's been such a roller coaster week between elections and changes in oil prices and what's going on in the Middle East and obviously equity markets and AI. [00:14:33] S0: And it's just this confluence.
00:14:33 · Kristina Campmany, Kristina Campmany, Paul Sweeney
[00:14:33] S0: And it's just this confluence. [00:14:34] S9: Everyone's like, where are we and what is the driving path forward? And it feels like there's a lot of like fear and agita in the market for sure. [00:14:42] S1: How did the debt markets change? perform over the last few days? Because even during all this craziness, Meta came to market again with your bond offering. So, I mean, how's the bond market these days? [00:14:54] S0: We've actually, again, we sold off. [00:14:57] S9: I mean, it's been a drift to higher yields across the board across the curve across the globe all year. And we kind of got the peak five or six weeks ago. And for five or six weeks, we've retraced 40, 50 basis points kind of in every point across the curve. It feels a bit overdone. I think some of that was positioning. I think some of that, again, is this fear about AI. But I'm not sure that the underlying has changed so much. We also, I think, are still grappling with this Fed that's doesn't want to have forward guidance from the chair, but the rest of the committee is giving forward guidance, and we have very different messaging meeting to meeting. I think there are people out there that think there are real recession fears and this is the end of AI. [00:15:43] S0: We're a little skeptical of that. [00:15:44] S9: I think the base case is still that the Fed is going to go in December. [00:15:48] S0: And if you didn't get that. [00:15:49] S9: Communication ahead of the last inflation prints, you would have expected them to go in October as well.
00:15:49 · Kristina Campmany, Paul Sweeney, Tom Keene, Kristina Campmany
[00:15:49] S9: Communication ahead of the last inflation prints, you would have expected them to go in October as well. [00:15:58] S1: All right. So, again, the Fed probably is going to do what it does in markets pricing in certainly one for December, maybe one or two more for next year. But, again, I kind of go back to all the craziness this week about AI and about what it means for AI. Again, Meta just came out with this mega euro bond offering. So it kind of feels like the market. [00:16:18] S3: Did you buy it? [00:16:20] S9: We have been a bit cautious on some of the hyperscaler issuance, so we were not involved. But I think the market is also grappling with there are these massive CapEx numbers out to 27, 28, 29. [00:16:34] S0: And so I think. [00:16:35] S9: It's a question of does this blue sweep, does that change the speed of all of this buildup? [00:16:42] S0: Does it change that? [00:16:43] S3: I love that. It's about the speed. It's about the first and second derivatives. [00:16:47] S0: I think it is. [00:16:48] S9: I mean, we have had just exponential growth. And CapEx has been what has driven U.S. growth this year, right? That's not a deniable thing. It has been in the driver's seat. But I think people are still credit spreads have moved but are still tight by historical standards. I think People are being choosy and they know that because of this pipeline, there's a lot more to come. [00:17:15] S0: But I mean, deals are still being taken down for sure. [00:17:17] S3: Absolutely.
00:17:17 · Tom Keene, Paul Sweeney, Kristina Campmany, Kristina Campmany, Claudia Sahm, Stephanie Roth
[00:17:17] S3: Absolutely. [00:17:18] S1: Focus this week here was on U.S. domestic elections. You guys think globally. So what's your non-U.S. call these days? [00:17:27] S0: So I think FX is a little trickier. When we take a step back, we. [00:17:34] S9: Still are a bit more negative, the dollar. But that has been a bit challenging. You haven't had participation from Asia. I think that is, or dollar Asia. And I think you need to see dollar Asia resume lower. So the likes of the yen finally participating and strengthening. Corona coming back to the table. Some of those to see a broader FX rally, weaker dollar. [00:17:58] S5: Okay. [00:18:01] S9: And then globally, again, we still say we've rallied now 40, 50 basis points in the U.S. The rally has been driven by the– or has been led by the U.S. [00:18:10] S0: More than the rest of the world. [00:18:11] S9: So we do still think that there's value in some– we think Europe has probably more value. It's a kind of weaker underlying growth system. [00:18:20] S0: And– In EMs, too. I mean, Brazil, obviously. Was that only this week? [00:18:25] S10: I know. [00:18:25] S9: The second round election, maybe that was last week. [00:18:27] S0: I don't know. It's been a whirlwind. It's been nuts. October was a long month. [00:18:35] S3: Rob Waldner of Invesco wore a bow tie. Oh, yeah? I'm sorry. [00:18:41] S0: He had to match your style.