Single Best Idea with Tom Keene: Jordan Rochester & Nancy Lazar

Tom Keene breaks down the Single Best Idea from the latest edition of Bloomberg Surveillance Radio.

In this episode, we feature conversations with Jordan Rochester & Nancy Lazar

Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:12):
Single best idea, really interesting today, great equity market coverage GM.
Martin Adams was really quite sophisticated about the linkage between
technical analysis, fundamental and even economics. David Rosenberg joined us
from Canada. Thank you to his comments on King Charles speech.
He said the Canadian public really wasn't grabbed by the speech.

(00:35):
It was much more about the elites and the politicians
and all that. Katie Kaminski on trend Out at ELF
Simplex in Boston was really quite good, saying there is
beginning to be elements of a trend in the equity market.
We spoke on foreign Exchange with Jordan Rochester of Missouo
and what's so great about the shop is they have

(00:57):
dominic constant Steve Shudo and Jordan Rochester. I asked Jordan Rochester,
how do you piece those three minds together.

Speaker 3 (01:05):
What we think is there's gonna be no Fed cuts
this year. Steve's got one and a half percent GDP forecast,
but are three and a half percent inflation, So your
noomenal's at five and the Fed's going to be looking
at three and a half inflation. That's not an environment
where you're cutting rates, you need to have really big
weakness in the labor market to do so. However, what
Constant would point out, and what I point out too,

(01:26):
is that this market is very much inclined to say
that there's a very high bar to get to get
this market to think hikes are the next move by
the Fed. The market will continue to think that cuts
the next move, but we are of the view it
won't happen this year. So what that means for trades
is we like front end flatteners, So price out the
rate cuts for this year, pricing more cuts for next year,

(01:46):
because that's how this market is biased. So we have
a steep We're gonna have a flattening of the curve.
More cuts, price for twenty twenty six, less for twenty five.

Speaker 2 (01:53):
Jordan Rochester with Missoui there in the summer is as
he says, no FED rate cuts this year boring. We'll
off to see on that. But also then he is
euro out to one twenty stronger euro, not immediately, but
a stronger euro through two thousand and twenty five. Nancy

(02:14):
Lazarre was with us with Piper Sandler. She's definitive in
the business, and she was absolutely blistering about capital spending.

Speaker 1 (02:23):
Here, Nancy Lazzar, First, what's given is nominal GDP. That's
what's created by both monetary and physical policy. And nominal
GDP growth has been about five percent next year? Could
it move up to something a little bit more than that. Yes,
I've got to make some new stop.

Speaker 2 (02:38):
Are you saying six percent nominal GDP?

Speaker 1 (02:41):
Well, that's historically what the peak growth rate had been
prior to the GFC. That's not out of the question
going forward, as you could in place tax reform, as
you put in place full appreciation on capex, manufacturing structures
and also manufacturing equipment. Capital spending is just underappreciated as
the drive of growth. Without businesses and reinvesting in a country,

(03:03):
you end up with stagnation, which is what happened to
us after China joined WTO.

Speaker 2 (03:09):
I can't say how unusual that conversation is. If the
core equation is our nation's output, our GDP, howeve you
measure it is consumption seventy percent, investment eleven maybe thirteen percent.
Then you got government spending and all the uproar over
the debt and the deficit, and you bolt on the

(03:29):
back end, export, imports and all. How little within financial
media we speak about the eye investment and that's where
Nancy Lazar is completely focused. Is the idea, you can't
create jobs in any nation unless you have capital investment,
capital spending. Just brilliant Nancy Lazar with Piper Sandler across

(03:53):
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best idea MHM.