December 12, 2025 • 29 mins
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Paul Sweeney & Alexis Christoforous
Friday, December 12th, 2025
Featuring:
1) Ross Mayfield, Investment Strategist at Baird, discusses the case for diversifying internationally as earnings improve and global equities remain under owned.2) Priya Misra, Core Plus Bond ETF Portfolio Manager at JPMorgan Asset Management, discusses tight but justified credit spreads and the need for careful sector and balance sheet analysis.3) Sameer Singh, Co-Head of M&A North America at Citi, shares his 2026 outlook for the M&A space.
4) Lisa Mateo joins with the latest headlines in newspapers across the US, including Wall Street Journal reporting on growing interest in fully-furnished homes among luxury home buyers, and a Business Insider story on Canada's plans for its stockpiles of US-made alcohol.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
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(00:25):
or watch us live on YouTube.
Speaker 2 (00:27):
Let's just set the stage here. Kind of mid December
SMP of fifteen sixteen percent, NASTAC up twenty twenty one percent,
some pretty solid results out of the bond market as well,
high single digit returns. Where do we go from here?
Because that was a pretty solid year, despite some volatility
in the beginning of the year. Ross Mayfield joins us.
He's an investment strategist bear a private wealth and management. Ross,
(00:49):
let's set the stage for twenty twenty six here, what
are the conversations you're having with your clients these days?
Speaker 3 (00:56):
Yeah, I mean, with the market at all time highs,
a lot of the typical warriors that we hear from
investors have been tossed out for the moment, and the
main worry is just the strength itself.
Speaker 4 (01:06):
Right, are we have things been too good?
Speaker 3 (01:10):
And are we being set up for a disappointing twenty
twenty six? I think expectation management matters, right. Obviously, we
can't keep printing high teens twenty percent plus years year
after year, and this would be the fourth year of
gains of twenty twenty six is positive, but in a
bawl market that's not in common, and there are a
lot of tailwinds for the market as we turn the
(01:31):
page on twenty twenty five. So we're pretty optimistic, but
just managing those expectations.
Speaker 5 (01:36):
I also think, guys, what's kind of encouraging about this
market is yesterday we were able to hit records on
the Dow, a squeezed out one for the S and
P five hundred, but we did it largely without big
tech names, without those big AI names. So, ross, do
you think that this rally is broadening out and we
could see I don't want to say a change in leadership,
but at least a broader rally in twenty twenty six.
Speaker 4 (02:00):
Absolutely. I mean, for most of this rally, what has
been one of the.
Speaker 3 (02:03):
Main concerns, the concentration, the potential narrowness of the rally,
the focus on the AI trade and the mag seven
and the reality is different. Under the surface, You've got
things like financials working healthcare has staged a really nice
comeback after a lot of years underwater. Industrials have held
their own discretion areas breaking back out, So you have
a lot of other kind of you know, real economy
(02:26):
cyclical rate sensitive names working.
Speaker 4 (02:29):
Obviously, the rate cuts have helped.
Speaker 3 (02:31):
Spur some activity in those corners of the market, and
the fundamentals are expected to brought out too. You know,
even this last quarter we saw the SMP four ninety
three with double digit earnings growth, and if you look
at the earnings estimates for twenty twenty six, the expectation
is that continued broadening in the fundamentals. So I think
it would make sense for that to continue in the
price action as well.
Speaker 2 (02:50):
Hey, Ross Corporate America has really done its part here
to support this market. Earnings have come in really really
strong for the last several quarters. The earnings power for
twenty twenty six is enough to support this market.
Speaker 4 (03:05):
Yeah, absolutely.
Speaker 3 (03:06):
I mean we had the early part of a bullmarket
rally built on multiple expansion, which is really typical coming
out of a bear market low, and then earnings have
taken the baton and really carried the day here in
twenty twenty five, and I think that that will be
the case in twenty twenty six as well. Earnings growth
you know, expected broadly to be in the thirteen fourteen
percent range. Even if that comes down to something like
(03:28):
ten percent, that's more than enough to carry a bull
market through.
Speaker 4 (03:34):
Again, maybe we manage expectations.
Speaker 3 (03:35):
Maybe maybe single digit returns, low double digit returns is
kind of where we.
Speaker 4 (03:40):
Set our base case.
Speaker 3 (03:41):
But again, after three years of high teen or twenty
percent plus growth, that's more than enough. And that's pretty
typical for what a fourth to fifth year of a
bull market might look like. So I think the earnings growth,
the profit margin expansion, the breadth of that earnings growth
is more than enough to carry the day. And I
think it's the main one of the main pushbacks against
the argument that we're in a bubble. The fundamentals have
(04:03):
kept up with price by and large, and that's not
the case in most real bubbles.
Speaker 5 (04:07):
But ross as we look to maybe rejigger their portfolio,
as we you know, near these final days of the year,
is it time to buy the laggards? And if so,
what's sticking out to you?
Speaker 4 (04:20):
You know, I don't know if you need to buy
the laggards. I think you can just broaden out.
Speaker 3 (04:23):
I mean, as we mentioned earlier, there is strength, nascent
strength in some of these non tech areas. The place
that I am, you know, shouting from the rooftops for
investors to consider their portfolio positioning, and it's international, which
has not been a laggard this year, but has been
a laggard for most of the last fifteen years. And
so I think a lot of investors have thrown in
(04:44):
the towel on international and the reality is that this bullmarket.
We mentioned the breadth within the US, but it's really
a global bull market, and in a lot of ways,
the leadership.
Speaker 4 (04:53):
Is outside of the US.
Speaker 3 (04:54):
You look to Japan, you look to Europe, you look
at some of the emerging market names. A weaker dollar
has been a catalyst, but there is a fundamental strength
coming from abroad as well. I think a lot of
investors are structurally underweight international and can do you know,
could do a lot of work just to get back
to kind of a marketwaight or and neutral weight international.
That is one of the main things that I'm talking
(05:14):
about with investors as we close the book on twenty five.
Speaker 2 (05:17):
Here russ Let's follow up on the international play there.
Do you feel more comfortable than developed markets or emerging markets,
because we've heard folks talking up in emerging markets more
in the last three four or five months and a
half in a while.
Speaker 3 (05:31):
Yeah, absolutely, I mean there is I think it starts
and ends with a week dollars story, right, and if
you look at this year, it's been it's been a
week dollar story.
Speaker 4 (05:38):
But if you look at twenty.
Speaker 3 (05:39):
Twenty six, you know, you think about the FED continuing
to cut rates, you think about what a new potential
FED chair might want to do and continue to ease,
and then you look around the world and you see
global yields headed higher. Japan and Europe, Australia can a
lot of central banks are talking about their next move
being great hikes, and so if you think about interest
rate differentials, you could really build a case for a
(06:01):
continued weakness and the dollar that does tend to boost
emerging markets more. I think I'm a little more comfortable
going to some of those developed markets. You know, Japan
has been an incredible story breaking out after thirty plus
years underwater.
Speaker 4 (06:14):
But by and large, I.
Speaker 3 (06:14):
Think you can if you're just a typical long term investor,
you can probably just buy, buy the bulk of it,
you know, the MSCI All Country x US, and call
it a day, because I do again. I think the
main thing is you've got a home country bias and
you've had fifteen years of underperformance. I think a lot
of investors probably probably owned very little, if any international
(06:35):
at all, So just a blanket ownership of a broad
international index will.
Speaker 4 (06:41):
Do the job.
Speaker 2 (06:41):
Ross, thanks so much for joining us. Really appreciate it.
Ross Mayfield, investment strategist at BAIRED Private Valve Management. Stay
with us or from Bloomberg Surveillance. Coming up after.
Speaker 1 (06:49):
This, you're listening to the bloom Work Surveillance podcast. Catch
us live weekday afternoons from seven to ten am Eastern.
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (07:10):
Prea.
Speaker 2 (07:11):
Mister Joints is here Core plus a bond etf portfolio
manager at JP Morgan Asset Management Pria. Thanks so much
for joining us here in studio. It's a little chilly
at so we appreciate you leaving the confines of the
brand new JP Morgan Tower on Park Avenue.
Speaker 4 (07:24):
Which is just awesome.
Speaker 2 (07:25):
I walk by it every day the Penn Station. They
did a phenomenal job there. Love to get your thoughts
on the FED here. We're seeing some comments from mister Goldsby,
who was at the center, but he says, I kind
of need more data, but boy, rates can come down more,
he says, if the data warrants it. What did you
take away from the FED meeting this week?
Speaker 6 (07:45):
Sure, so thanks for having me. Always enjoy the conversation.
So I think what the FED did brilliantly was to
retain optionality.
Speaker 7 (07:54):
So we have a lot of data coming up next week.
We're also going to.
Speaker 6 (07:56):
Get another payrol report before the next jan meeting. So
they created the optionality that if the data is weak,
particularly on the labor front, that they can absolutely cut more.
But they did sort of signal that the bar to
cut any further is higher. So, you know, and I think,
and you know, you you reference President goals B. I
(08:17):
think there's a division of the FED because the risks
to the labor market and the risk to inflation are
both high, and different FED officials are putting more emphasis
on one risk versus another. I think President Goalsby is
probably in the inflation camp, you know, sort of worried
that inflation has not seen much progress this year. On
(08:37):
our end, we think that inflation, if you look at
the details of inflation, service inflation is heading lower. Wage
inflation is heading lower. So in our base case, we
do see a couple more cuts, you know, by the
time the Fed actually reaches neutral, but there's no urgency
so they can cut this, you know, over the next
six months. Of course, if the labor market is weak
and that unemployment rate, and that's what we're watching, if
(08:58):
that continues to move higher, I think this swead is
going to be a lot more aggressive.
Speaker 5 (09:02):
Yeah, and Powell even signaled that right that the labor
market he was saying, in not so many words, is
probably weaker than we think it is. Also, we're dealing
with backward looking data at the moment, so we're still
waiting again for that more data to come in. But pria,
we know that credit spreads are tight, but you say
they're justified.
Speaker 6 (09:20):
Yes, If I look at fundamentals of company balance sheets,
companies have not really levered up. That would make me
a little nervous if the debt levels kept increasing, large
debt issues done by companies that didn't have much debt.
So we're not that concerned about the fundamentals of whether
it's earnings or leverage or even interest coverage ratio.
Speaker 7 (09:40):
But spreads. So I think spreads are at the tighter
end of the range right for good reason.
Speaker 6 (09:46):
We are a little cautious that there's going to be
a lot of supply in January. There typically is, and
this time if the rest of the corporate sector, beyond
just the AI CAPEX companies are deciding they need to raise.
Speaker 7 (09:58):
Money either for investment in EI, in how.
Speaker 6 (10:02):
They're going to incorporate in their business, or MNA related financing,
we think there could be a lot of supply and
that is an opportunity. It wouldn't be worried, but we
are keeping some cash on the sideline waiting to buy
when that supply comes.
Speaker 2 (10:15):
Interesting, so does the bond market broadly defined? Are they
concerned about some of this AI spending and the debt
associated with the AI spending. Because I look at some
of these issues, I'd buy their bonds. I mean, these
are great companies, great cash flows, clean balance sheets. I
mean i'd be as much as you got, I'll take it.
Speaker 7 (10:31):
Yeah, I think you.
Speaker 6 (10:32):
Know, when you come in with a very large deal,
it has to be priced, so there was some I
would say supply in digestion. You've got a lot of
that supply in September. Look at all the posts deal pricing.
What has happened to the market. All those spreads are tighter,
So I mean Oracle has had their CDs widening. I
think there's concerns around how much more debt they're going
(10:53):
to need to issue, But broadly, I don't think the
credit market is nervous. There's a valuation question and do
I want a little bit of a new issue concession
to take.
Speaker 7 (11:01):
Down a large part. I think there's some of that.
Speaker 6 (11:03):
Look at the spread curve that has not really steepened.
I think there's a lot of demand for long end
corporate paper.
Speaker 7 (11:09):
It's there all in level of yields. Those spreads are narrow,
but look at all in eields.
Speaker 6 (11:13):
If you're getting six percent five six percent high quality
investment grade debt. I think that's why we're seeing continued demand,
and I don't think the supply will be an issue
beyond just that week.
Speaker 7 (11:25):
Maybe there's a little bit of spread widening.
Speaker 1 (11:27):
CRIA.
Speaker 5 (11:28):
What's your thinking with these companies, all these big buyouts
and so many companies taking on debt. Because we know
that Netflix is deal to buy Warner Brothers. Discovery includes
fifty nine billion dollars in bridge loans. Are you concerned
at all that companies are getting these deals done by
taking on such massive debt.
Speaker 7 (11:46):
I think that's always a concern.
Speaker 6 (11:47):
I gat bo activity or if there's worsening of the
credit I think, you know, obviously there'll be some cases
where maybe it's over down. On average, So far, we
haven't seen too much of debt fueled sort of bubbles.
Speaker 7 (12:01):
You know, do we get there next year?
Speaker 6 (12:03):
If the credit markets are open and the Fed's easy,
I would still say all in neils are not that
low for companies not getting free money, and so we are.
Speaker 7 (12:13):
Not that concern. But at certain pockets.
Speaker 6 (12:15):
Remember the cockroach hunting a few weeks ago or months ago,
we were all worried.
Speaker 7 (12:19):
I think you really want to minimize cockroaches.
Speaker 6 (12:22):
Do a lot of credit work to know that if
a company is taking on debt, will they see the
productivity gains? Can they see the economies of scale and MNA.
That's going to be a big issue. We're going to
be analyzing two companies merging. Do we think that they
can keep margins, they can make those debt payments. So far,
we haven't seen things that would worry us, but we
(12:43):
have to stay vigilant.
Speaker 2 (12:44):
So I think a lot of folks they are fairly
constructive on twenty twenty six, And it all starts with
I think the economy is in pretty good shape. I
think we're going to see some decent growth out of
the economy. Is that kind of where you guys are
of a JP Morganism management?
Speaker 7 (12:57):
We are.
Speaker 6 (12:58):
We think we're in a soft line. I think we've
been in one for the last two years. A lot
of that is based on bottom up company fundamentals as
well as consumer fundamentals. On average, balance sheets of the
corporate sector and the consumer look very strong, and I
think that's why the economy has been resilient.
Speaker 7 (13:14):
We've had so many.
Speaker 6 (13:15):
Shocks this year right right from tariffs, immigration, geopolitical, and
yet the economy is sort of powered through. In our
base case that remains the case over the next year.
I am a little concerned about the labor market, right
I'm not hearing companies saying that they're going to increase hiring,
so maybe this is a jobless recovery. We have to
see how long does that continue to power the consumer.
Speaker 7 (13:38):
Layoffs, is what I'm watching.
Speaker 6 (13:40):
I think that would unravel some of this, but I
think the FED then aggressively starts cutting rates.
Speaker 5 (13:46):
All right, Priyamysra of JP Morgan Asset Management, Coreplus bond
ETF Portfolio Manager, thanks for taking the short walk over
from JP Morgan's headquarters here to.
Speaker 2 (13:55):
Stay with us or from Bloomberg Surveillance coming up after this.
Speaker 1 (14:07):
You're listening to the Bloomberg Surveillance podcast. Catch us Live
weekday afternoons from seven to ten am Eastern. Listen on Apple,
Karplay and Android Otto with the Bloomberg Business app, or
watch us live on YouTube.
Speaker 2 (14:20):
Let's talk about M and A because we've been talking
about this big Warner Brothers trade for the last seven weeks,
but it's been a pretty darn good year for M
and A. It feels like and I think banks for talking.
Speaker 8 (14:29):
About twenty twenty six as well.
Speaker 2 (14:30):
So let's check in with somebody who does this stuff
for a living, Samir, seeing he's co head of M
and A North America for City. Samir, help just frame
out how twenty twenty five has been for M and A.
And then kind of how you guys are thinking about
twenty twenty six.
Speaker 9 (14:42):
Sure, happy to do it. Thanks Ball for having us
and looking forward to the conversation. Look, it's been an
interesting year, right, it's been just set the stage twenty
twenty five. This year is going to be the second
largest year in M and A volumes after twenty one,
which had a lot of spack volumes in it. Let's
also keep in mind, by the way, they were a
couple of months where we were in the old rooms
from an M and A standpoint, right around when tire
(15:02):
its came out. So all of this momentums really happen
if you think about it in the last eight months.
I think back when I say to myself, you know,
since twenty twenty we had like six megadeals fifty billion
plus right over the last four years. This year, in
the last two quarters, we've had four. This momentum is
not going away. It's been incredibly busy. And why is that.
(15:24):
We have a kind of confluence of some perfect factors
of here. Right, You've got rates coming off, growth remains strong,
there is a significant amount of investments that's coming in
from an AI and thus a data center infrastructure perspective.
I don't discount that that's a big driver this time,
and then I combine that with how strategics are looking
(15:45):
at deals. There is greater clarity on how to get
regulatory approval for the first time in half a decade
this time, and I think you're going to continue to
see this momentum build because people are able to think
about this as deal makers. We're able to look at
the landscape and say we can get an answer as
to whether something's going to pass muster. The administration's much
(16:07):
more open to looking at remedies as a solution, which
was not something that was available to the buyers, and
thus able to find the right way to navigate these
complex environments.
Speaker 5 (16:16):
All right, So a more friendly regulatory environment in which
to work. So we know we're seeing a lot of
consolidation in media, we know we're seeing consolidation in AI.
We're else outside of those sort of expected areas. Where
else are you seeing consolidation in the new year.
Speaker 9 (16:34):
It's a great question. You know, let's talk about AI,
and when we talk about AI, everyone talks about LMS,
But let's actually talk about what else happens beyond AI. Right,
AI is causing massive amounts of spending that's flowing into
data center infrastructure that impacts industrials. You think about let's
call it picks and shovels, but you think about the
volume that's coming in of spend over the next five
(16:57):
years that is having a big impact from an industry perspective.
So you're going to see a lot of flow on
over there. You're seeing a lot of flow on in
real estate as a function of that. And then let's
also consider the fact you're coming out of COVID. We've
had a change in human behavior that was forced on
people and as a function of that, companies have had
to adapt. You take those impacts, the need to fix
(17:20):
supply chains, you take the need to think about tariffs.
I think the other place. When you combine those two factors,
you're going to see a lot of changes in the
consumer landscape as well. That's not going away. So in
my mind, like I see it happening across the board.
Let's also consider you know the GLPS, right, you think
about healthcare and some of the impact that that's having.
(17:43):
I see this happening across sectors. So AI has a
flow on on industrials, real estate in a few other places.
I see a lot of change in consumers, and I
see a lot of momentum in the healthcare franchise as well.
Speaker 2 (17:56):
Smyr talked to us about the private equity clients or
sponsors out there. For you guys. You know, based on
my thirty year career on the street, it's easy to
raise money, and it's really easy to invest money. But man,
it's really hard to monetize those investments. And that's been
pronounced really over the last four or five years. What
are you hearing from your sponsor clients.
Speaker 9 (18:15):
It's gotten much better. Yes, there was a lot of
noise last year because you could not exit some of
these assets because of what was happening in the market.
So the markets have helped, I'll tell you this year
exits are at a significantly elevated level. And by the way,
if you look at the sponsor wallet of exits, forty
percent of the wallet is coming from one billion dollar
plus exits. It typically runs twenty to twenty five percent.
(18:38):
That's a forty percent. Well, the other thing that's happening,
you talk about capital coming in. You've got strategics who
are now in a position to act, but you've also
got a lot of let's call it sovereign wealth fund
money right, and these funds have moved away from being
passive LPs and they're starting to think much more aggressively
(18:59):
about being direct investors. With the GPS, that has helped
in a big way as well. So what you're seeing
in auction processes, I am seeing situations where processes are
getting preempted for quality assets. I'm seeing situations where strategics
are showing up before sponsors going to exit and saying
(19:19):
this is what I'm willing to do. This is an
asset I'm very focused on. We know there's a wave
of assets that are going to come. I don't want
to be distracted. I want certainty. I'm willing to pay
the right number, and I want to get the asset
that I want. That is something you are seeing in
a way that is surprising relative to where things were
twelve months ago. It is becoming much more than normal today.
Speaker 5 (19:40):
And I think part of that is the friendly regulatory
environment that you're discussing. So do you think that this
cross border I guess approach will call it an M
and A will continue into the new year.
Speaker 4 (19:52):
Yes, I do.
Speaker 9 (19:52):
I do believe it and I'll tell you it's interesting
again because what's happening is crossboard of volumes that are
again running at record highs. And it's like seven hun
than fifty billion in North America last year, but sixty
five percent of that was into the US. The US
is the bastion of growth in global markets today. And
you see this now both with foreign strategic acquirers who
(20:13):
understand the need to capture some of that growth and
localized supply chains. But you're also seeing it with the
same concept of sovereign wealth funds who see assets national treasure,
assets that could be very interesting to have ownership in.
You're going to continue to see that built for.
Speaker 2 (20:29):
Your strategic buyers, financial buyers. What's the capital markets like
these days? Are the banks lending? Are you relying more
on private credit because we see in just in this
Warner Brothers Discovery deal, big bridge loans being quoted, big
financing packages being thrown out there.
Speaker 8 (20:47):
It seems like it's pretty solid Westing.
Speaker 9 (20:49):
It's a good market. So the banks are leaning in,
the banks are leaning in on the right situations. They're thoughtful,
We're being very careful about where we'll lending. You have
private credit available as as well as as a credible alternative,
and it is showing up in some large deals. We've
obviously seen it in this one. We talked about it.
We're spending a lot of time advising the folks at Paramount,
(21:10):
and what I'll just say about this deal is, look,
I think the offer, the aggregate offer that's being provided
to the Warner Brother shoholders, we think our offer is
superior and that our client will prevail, and hopefully Shoholders
will see the value of the separate deal this is
the whole thing, and see the aggregate value they could
actually get in this and not have to take the risk.
Speaker 5 (21:33):
I don't want to get too political, but it's interesting
to me that an administration that is very much about
America first and an isolationist in many ways is open
to sovereign wealth funds and money coming from across the
border to be involved in a lot of these deals.
I mean, I just I find that curious.
Speaker 3 (21:53):
You know.
Speaker 9 (21:53):
The way I kind of think about it is that
I think what's going to end up happening is they
will be guardrails. Put look at what happened. We advised
Nippon Steel and US Steel there were some very clear
guardrails that were put on, not exactly your sovereign word fund,
but still we had a golden shar being issued for
the first time in the United States, more common in Europe.
I think the general theme over here is there are
(22:16):
global alliances being formed. There is an increasing emphasis on
the Middle East, and I think when you think about
it in that context, there is a view that this
capital that's coming in is going to benefit both the
American consumer and also the national interest because it's providing
capital and places that is, you know, it's investment is needed,
(22:36):
and it's providing that capital at some pretty interesting cost
of financing. That makes this attractive in the context of
the global alliances that the administration's trying to form.
Speaker 2 (22:46):
Samir, what's different for one I was in your seat,
is there's a lot of boutiques out there that are
really good. How do you City, with the diversified financial
offerings of City and Goldman and JP Morgan, how do you, guys,
I guess, set yourselves apart versus some of these boutiques.
Speaker 9 (23:03):
Look, I think it's you know, every every sector, every
industry has competition. We welcome competition. I think from our perspective.
We believe in the long term relationships that we have
with our clients, and we also have an ability to
provide a very holistic solution. So we've got very good
advisory functions are seen in the incredible year that we're
having an M and A at city this year, and
(23:24):
then I combine it with the broader balance sheet that
we can bring and by the way, a lot of
these deals, we'd start to get very complex other things
that we're spending time on that the team is going
to be working on through the holidays. For better or worse,
there's there's there's complications in these deals. And what you
want from an advisor is the ability to provide a
holistic solution and not bring in seven different providers and
(23:47):
then you worry about confidentiality. That becomes an issue. But
I think clients value the advice they advise, they value
the relationship, and we don't. When we look at our advice,
our advice is fairly holistic. Across the bank. We don't
have to sit there and say we just worded about
one pocket of of UH.
Speaker 8 (24:06):
Because you have a deeps a deep bench. That's the pitch.
Speaker 2 (24:08):
Yes, you do it with all Samir, thank you so much.
Really appreciate taking some of your time. Samir Sek, he's
co head of M and A for North America. For
city Name with us or from Bloomberg Surveillance. Coming up
after this.
Speaker 1 (24:27):
You're listening to the Bloomberg Surveillance podcast. Catch us Live
weekday afternoons from seven to ten am Eastern Listen on
Apple Karplay and Android autto with the Bloomberg Business app,
or watch US live on YouTube.
Speaker 2 (24:40):
It is that time of day, folks. You wait for it,
it's here newspapers Lisa Mittail at least.
Speaker 4 (24:45):
A half hours. All right.
Speaker 10 (24:46):
So we're talking about a new growing trend in the
housing market. You have more luxury home buyers. They're looking
for fully furnished homes. I'm not just talking, you know, furniture.
They want the sheets, the mattresses, the pots, the pens,
the utensils, like everything's to nuts. The question is how
much extra does something like that cost if you want it?
So the Wall Street Journal they talked to a seller
(25:07):
in Fort Lauderdale, Florida, tacked on an extra one hundred
and seventy five thousand dollars on top of the price
at the home to get all of that, and this
is luxury, so just.
Speaker 8 (25:16):
Gave it in mind. Wow, she even stocked it with
toilet paper and paper towels for them. Did we wear
that in for good measure?
Speaker 2 (25:21):
And when we bought our Carmel house, we did exactly
that you did. We loved their style, we loved everything
was perfect, like, hey, we'll just take it as is.
When we sold it, we sold it at with all
that stuff, so that this good stuff, I mean.
Speaker 8 (25:33):
That brings turn key to a whole new lab mess.
Speaker 10 (25:36):
Of course, and it's better because it can It's both
for both sides, you know, like you can sell it
faster and then the person comes in and you just
walk right in.
Speaker 5 (25:42):
We just walked and plopped down and just take your luggage,
I guess with your clothes and off you go.
Speaker 8 (25:47):
I guess an extra money to.
Speaker 2 (25:49):
No in nor did I feel like we were paying
for it. You know, it was just you know, it's
just kind of it's already stupid pre expense about there anyway.
Speaker 3 (25:56):
No, it is.
Speaker 2 (25:56):
It is.
Speaker 10 (25:57):
But they're saying, like what they're saying is that it
started to increase after the pandemic because in the pandemic
there were a lot of you know, people were trying
to get furniture, and everything happened supply chain, so trends
kind of stayed and they just like to come in
with everything. They don't have to worry about waiting for
a couch or waiting for a bet or anything.
Speaker 4 (26:13):
It's all there.
Speaker 5 (26:13):
And oftentimes these folks are brought in designers and whatever,
and so the house is beautiful.
Speaker 8 (26:18):
It's like a show palace. You're like, I'll take the
whole thing.
Speaker 7 (26:20):
I would do it.
Speaker 10 (26:22):
Okay. So we've talked about this before. Remember when a
couple of provinces Encounada, they stopped the imports of US alcohol, right,
they took it off the shelves, and response to President
Trump's have so, business Insider was saying, a few of
those provinces are actually planning to sell what's left in inventory,
and they're going to donate it to a good cause.
They're going to donate the money they make two food banks.
Speaker 8 (26:46):
They're going to donate the alcohol to the money.
Speaker 7 (26:48):
Yeah, selling it, yes, yes, yes, yes.
Speaker 10 (26:51):
So for example, Prince Edward Island, right, they put their
alcohol back on store shelves yesterday. The government anticipates a
profit about six hundred thousand Canadian dollars from the sale,
So that's going to be distributed to food banks all
across the island.
Speaker 2 (27:03):
I wonder what Canadians did they stop buying Jack Daniels
and Tito's and stuff.
Speaker 4 (27:07):
I guess.
Speaker 10 (27:08):
I mean they're saying they don't intend to place any
further orders for American ALcom.
Speaker 2 (27:13):
I mean, I have some Canadian friends.
Speaker 4 (27:15):
They are upset.
Speaker 8 (27:16):
Yes, it is deep, and it is across the board.
Speaker 2 (27:18):
I mean they are not happy with us.
Speaker 5 (27:20):
So, but they're buying the homemade stuff now, So I
guess it's good for Canada.
Speaker 2 (27:25):
Okay, Yeah right, that's the Canadian stuffy stuff up in Canada.
Speaker 10 (27:29):
Ye all right, I want to take you to Okay,
so we talk about AI, right, and how it's being
used for different things, even to find a soulmate. Yes,
AI on dating apps. It's going to cost you. I'll
get to the cost in just a second. But it's
business Insider. They spoke the CEO of this company called Keeper.
It's an AI matchmaking startup. They say they can find
(27:50):
you soul mate. If they can't, they'll let you know.
Speaker 4 (27:52):
You'll get rejected. So it uses out sorry for you exactly.
Speaker 10 (27:58):
They use like algorithms AI models to match people. But
you have to go through this lengthy process, right, I
mean there's you have to fill out a questionnaire with
your age, academic test scores, like your SATs, career ambitions,
your salary, net worth, all that kind of stuff.
Speaker 2 (28:12):
I don't think dudes care about that too much, but
I'm just speaking SAT score.
Speaker 10 (28:18):
It's funny you mentioned dudes because they're the only ones
who have to pay. Oh okay, So if you're a
man and you do find a mate and you wind
up getting married, you sign this marriage bounty and you
have to pay fifty thousand dollars. So if wow, find
out if you get a date, you have to pay
five thousand dollars for the date.
Speaker 5 (28:38):
So it's it's for certainly pleasle I mean, I don't
know about this.
Speaker 2 (28:43):
So it's it's just taking tender and match dot com
to the next level. Yes, so it's more than just
swiping left or right.
Speaker 10 (28:50):
Yes, okay, it's curated through algorithms.
Speaker 5 (28:53):
At least they're matching you with a real person. I
thought you're gonna tell me, like the AI jack becomes
like your soulmate, you know, which would be very scary.
Speaker 2 (29:00):
I think just going into a bar and you know,
figuring it out, that's not still still the way to go, exactly.
Speaker 8 (29:06):
With cocktails at like thirty bucks a pop.
Speaker 2 (29:07):
Right last, exactly, Lisa Mitteo.
Speaker 8 (29:09):
That's your newspapers, folks.
Speaker 1 (29:11):
This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
seven to ten am Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
(29:32):
always on the Bloomberg terminal
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple car Play or Android Auto with the Bloomberg
Business App. Listen on demand wherever you get your podcasts,
(00:25):
or watch us live on YouTube.
Speaker 2 (00:27):
Let's just set the stage here. Kind of mid December
SMP of fifteen sixteen percent, NASTAC up twenty twenty one percent,
some pretty solid results out of the bond market as well,
high single digit returns. Where do we go from here?
Because that was a pretty solid year, despite some volatility
in the beginning of the year. Ross Mayfield joins us.
He's an investment strategist bear a private wealth and management. Ross,
(00:49):
let's set the stage for twenty twenty six here, what
are the conversations you're having with your clients these days?
Speaker 3 (00:56):
Yeah, I mean, with the market at all time highs,
a lot of the typical warriors that we hear from
investors have been tossed out for the moment, and the
main worry is just the strength itself.
Speaker 4 (01:06):
Right, are we have things been too good?
Speaker 3 (01:10):
And are we being set up for a disappointing twenty
twenty six? I think expectation management matters, right. Obviously, we
can't keep printing high teens twenty percent plus years year
after year, and this would be the fourth year of
gains of twenty twenty six is positive, but in a
bawl market that's not in common, and there are a
lot of tailwinds for the market as we turn the
(01:31):
page on twenty twenty five. So we're pretty optimistic, but
just managing those expectations.
Speaker 5 (01:36):
I also think, guys, what's kind of encouraging about this
market is yesterday we were able to hit records on
the Dow, a squeezed out one for the S and
P five hundred, but we did it largely without big
tech names, without those big AI names. So, ross, do
you think that this rally is broadening out and we
could see I don't want to say a change in leadership,
but at least a broader rally in twenty twenty six.
Speaker 4 (02:00):
Absolutely. I mean, for most of this rally, what has
been one of the.
Speaker 3 (02:03):
Main concerns, the concentration, the potential narrowness of the rally,
the focus on the AI trade and the mag seven
and the reality is different. Under the surface, You've got
things like financials working healthcare has staged a really nice
comeback after a lot of years underwater. Industrials have held
their own discretion areas breaking back out, So you have
a lot of other kind of you know, real economy
(02:26):
cyclical rate sensitive names working.
Speaker 4 (02:29):
Obviously, the rate cuts have helped.
Speaker 3 (02:31):
Spur some activity in those corners of the market, and
the fundamentals are expected to brought out too. You know,
even this last quarter we saw the SMP four ninety
three with double digit earnings growth, and if you look
at the earnings estimates for twenty twenty six, the expectation
is that continued broadening in the fundamentals. So I think
it would make sense for that to continue in the
price action as well.
Speaker 2 (02:50):
Hey, Ross Corporate America has really done its part here
to support this market. Earnings have come in really really
strong for the last several quarters. The earnings power for
twenty twenty six is enough to support this market.
Speaker 4 (03:05):
Yeah, absolutely.
Speaker 3 (03:06):
I mean we had the early part of a bullmarket
rally built on multiple expansion, which is really typical coming
out of a bear market low, and then earnings have
taken the baton and really carried the day here in
twenty twenty five, and I think that that will be
the case in twenty twenty six as well. Earnings growth
you know, expected broadly to be in the thirteen fourteen
percent range. Even if that comes down to something like
(03:28):
ten percent, that's more than enough to carry a bull
market through.
Speaker 4 (03:34):
Again, maybe we manage expectations.
Speaker 3 (03:35):
Maybe maybe single digit returns, low double digit returns is
kind of where we.
Speaker 4 (03:40):
Set our base case.
Speaker 3 (03:41):
But again, after three years of high teen or twenty
percent plus growth, that's more than enough. And that's pretty
typical for what a fourth to fifth year of a
bull market might look like. So I think the earnings growth,
the profit margin expansion, the breadth of that earnings growth
is more than enough to carry the day. And I
think it's the main one of the main pushbacks against
the argument that we're in a bubble. The fundamentals have
(04:03):
kept up with price by and large, and that's not
the case in most real bubbles.
Speaker 5 (04:07):
But ross as we look to maybe rejigger their portfolio,
as we you know, near these final days of the year,
is it time to buy the laggards? And if so,
what's sticking out to you?
Speaker 4 (04:20):
You know, I don't know if you need to buy
the laggards. I think you can just broaden out.
Speaker 3 (04:23):
I mean, as we mentioned earlier, there is strength, nascent
strength in some of these non tech areas. The place
that I am, you know, shouting from the rooftops for
investors to consider their portfolio positioning, and it's international, which
has not been a laggard this year, but has been
a laggard for most of the last fifteen years. And
so I think a lot of investors have thrown in
(04:44):
the towel on international and the reality is that this bullmarket.
We mentioned the breadth within the US, but it's really
a global bull market, and in a lot of ways,
the leadership.
Speaker 4 (04:53):
Is outside of the US.
Speaker 3 (04:54):
You look to Japan, you look to Europe, you look
at some of the emerging market names. A weaker dollar
has been a catalyst, but there is a fundamental strength
coming from abroad as well. I think a lot of
investors are structurally underweight international and can do you know,
could do a lot of work just to get back
to kind of a marketwaight or and neutral weight international.
That is one of the main things that I'm talking
(05:14):
about with investors as we close the book on twenty five.
Speaker 2 (05:17):
Here russ Let's follow up on the international play there.
Do you feel more comfortable than developed markets or emerging markets,
because we've heard folks talking up in emerging markets more
in the last three four or five months and a
half in a while.
Speaker 3 (05:31):
Yeah, absolutely, I mean there is I think it starts
and ends with a week dollars story, right, and if
you look at this year, it's been it's been a
week dollar story.
Speaker 4 (05:38):
But if you look at twenty.
Speaker 3 (05:39):
Twenty six, you know, you think about the FED continuing
to cut rates, you think about what a new potential
FED chair might want to do and continue to ease,
and then you look around the world and you see
global yields headed higher. Japan and Europe, Australia can a
lot of central banks are talking about their next move
being great hikes, and so if you think about interest
rate differentials, you could really build a case for a
(06:01):
continued weakness and the dollar that does tend to boost
emerging markets more. I think I'm a little more comfortable
going to some of those developed markets. You know, Japan
has been an incredible story breaking out after thirty plus
years underwater.
Speaker 4 (06:14):
But by and large, I.
Speaker 3 (06:14):
Think you can if you're just a typical long term investor,
you can probably just buy, buy the bulk of it,
you know, the MSCI All Country x US, and call
it a day, because I do again. I think the
main thing is you've got a home country bias and
you've had fifteen years of underperformance. I think a lot
of investors probably probably owned very little, if any international
(06:35):
at all, So just a blanket ownership of a broad
international index will.
Speaker 4 (06:41):
Do the job.
Speaker 2 (06:41):
Ross, thanks so much for joining us. Really appreciate it.
Ross Mayfield, investment strategist at BAIRED Private Valve Management. Stay
with us or from Bloomberg Surveillance. Coming up after.
Speaker 1 (06:49):
This, you're listening to the bloom Work Surveillance podcast. Catch
us live weekday afternoons from seven to ten am Eastern.
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (07:10):
Prea.
Speaker 2 (07:11):
Mister Joints is here Core plus a bond etf portfolio
manager at JP Morgan Asset Management Pria. Thanks so much
for joining us here in studio. It's a little chilly
at so we appreciate you leaving the confines of the
brand new JP Morgan Tower on Park Avenue.
Speaker 4 (07:24):
Which is just awesome.
Speaker 2 (07:25):
I walk by it every day the Penn Station. They
did a phenomenal job there. Love to get your thoughts
on the FED here. We're seeing some comments from mister Goldsby,
who was at the center, but he says, I kind
of need more data, but boy, rates can come down more,
he says, if the data warrants it. What did you
take away from the FED meeting this week?
Speaker 6 (07:45):
Sure, so thanks for having me. Always enjoy the conversation.
So I think what the FED did brilliantly was to
retain optionality.
Speaker 7 (07:54):
So we have a lot of data coming up next week.
We're also going to.
Speaker 6 (07:56):
Get another payrol report before the next jan meeting. So
they created the optionality that if the data is weak,
particularly on the labor front, that they can absolutely cut more.
But they did sort of signal that the bar to
cut any further is higher. So, you know, and I think,
and you know, you you reference President goals B. I
(08:17):
think there's a division of the FED because the risks
to the labor market and the risk to inflation are
both high, and different FED officials are putting more emphasis
on one risk versus another. I think President Goalsby is
probably in the inflation camp, you know, sort of worried
that inflation has not seen much progress this year. On
(08:37):
our end, we think that inflation, if you look at
the details of inflation, service inflation is heading lower. Wage
inflation is heading lower. So in our base case, we
do see a couple more cuts, you know, by the
time the Fed actually reaches neutral, but there's no urgency
so they can cut this, you know, over the next
six months. Of course, if the labor market is weak
and that unemployment rate, and that's what we're watching, if
(08:58):
that continues to move higher, I think this swead is
going to be a lot more aggressive.
Speaker 5 (09:02):
Yeah, and Powell even signaled that right that the labor
market he was saying, in not so many words, is
probably weaker than we think it is. Also, we're dealing
with backward looking data at the moment, so we're still
waiting again for that more data to come in. But pria,
we know that credit spreads are tight, but you say
they're justified.
Speaker 6 (09:20):
Yes, If I look at fundamentals of company balance sheets,
companies have not really levered up. That would make me
a little nervous if the debt levels kept increasing, large
debt issues done by companies that didn't have much debt.
So we're not that concerned about the fundamentals of whether
it's earnings or leverage or even interest coverage ratio.
Speaker 7 (09:40):
But spreads. So I think spreads are at the tighter
end of the range right for good reason.
Speaker 6 (09:46):
We are a little cautious that there's going to be
a lot of supply in January. There typically is, and
this time if the rest of the corporate sector, beyond
just the AI CAPEX companies are deciding they need to raise.
Speaker 7 (09:58):
Money either for investment in EI, in how.
Speaker 6 (10:02):
They're going to incorporate in their business, or MNA related financing,
we think there could be a lot of supply and
that is an opportunity. It wouldn't be worried, but we
are keeping some cash on the sideline waiting to buy
when that supply comes.
Speaker 2 (10:15):
Interesting, so does the bond market broadly defined? Are they
concerned about some of this AI spending and the debt
associated with the AI spending. Because I look at some
of these issues, I'd buy their bonds. I mean, these
are great companies, great cash flows, clean balance sheets. I
mean i'd be as much as you got, I'll take it.
Speaker 7 (10:31):
Yeah, I think you.
Speaker 6 (10:32):
Know, when you come in with a very large deal,
it has to be priced, so there was some I
would say supply in digestion. You've got a lot of
that supply in September. Look at all the posts deal pricing.
What has happened to the market. All those spreads are tighter,
So I mean Oracle has had their CDs widening. I
think there's concerns around how much more debt they're going
(10:53):
to need to issue, But broadly, I don't think the
credit market is nervous. There's a valuation question and do
I want a little bit of a new issue concession
to take.
Speaker 7 (11:01):
Down a large part. I think there's some of that.
Speaker 6 (11:03):
Look at the spread curve that has not really steepened.
I think there's a lot of demand for long end
corporate paper.
Speaker 7 (11:09):
It's there all in level of yields. Those spreads are narrow,
but look at all in eields.
Speaker 6 (11:13):
If you're getting six percent five six percent high quality
investment grade debt. I think that's why we're seeing continued demand,
and I don't think the supply will be an issue
beyond just that week.
Speaker 7 (11:25):
Maybe there's a little bit of spread widening.
Speaker 1 (11:27):
CRIA.
Speaker 5 (11:28):
What's your thinking with these companies, all these big buyouts
and so many companies taking on debt. Because we know
that Netflix is deal to buy Warner Brothers. Discovery includes
fifty nine billion dollars in bridge loans. Are you concerned
at all that companies are getting these deals done by
taking on such massive debt.
Speaker 7 (11:46):
I think that's always a concern.
Speaker 6 (11:47):
I gat bo activity or if there's worsening of the
credit I think, you know, obviously there'll be some cases
where maybe it's over down. On average, So far, we
haven't seen too much of debt fueled sort of bubbles.
Speaker 7 (12:01):
You know, do we get there next year?
Speaker 6 (12:03):
If the credit markets are open and the Fed's easy,
I would still say all in neils are not that
low for companies not getting free money, and so we are.
Speaker 7 (12:13):
Not that concern. But at certain pockets.
Speaker 6 (12:15):
Remember the cockroach hunting a few weeks ago or months ago,
we were all worried.
Speaker 7 (12:19):
I think you really want to minimize cockroaches.
Speaker 6 (12:22):
Do a lot of credit work to know that if
a company is taking on debt, will they see the
productivity gains? Can they see the economies of scale and MNA.
That's going to be a big issue. We're going to
be analyzing two companies merging. Do we think that they
can keep margins, they can make those debt payments. So far,
we haven't seen things that would worry us, but we
(12:43):
have to stay vigilant.
Speaker 2 (12:44):
So I think a lot of folks they are fairly
constructive on twenty twenty six, And it all starts with
I think the economy is in pretty good shape. I
think we're going to see some decent growth out of
the economy. Is that kind of where you guys are
of a JP Morganism management?
Speaker 7 (12:57):
We are.
Speaker 6 (12:58):
We think we're in a soft line. I think we've
been in one for the last two years. A lot
of that is based on bottom up company fundamentals as
well as consumer fundamentals. On average, balance sheets of the
corporate sector and the consumer look very strong, and I
think that's why the economy has been resilient.
Speaker 7 (13:14):
We've had so many.
Speaker 6 (13:15):
Shocks this year right right from tariffs, immigration, geopolitical, and
yet the economy is sort of powered through. In our
base case that remains the case over the next year.
I am a little concerned about the labor market, right
I'm not hearing companies saying that they're going to increase hiring,
so maybe this is a jobless recovery. We have to
see how long does that continue to power the consumer.
Speaker 7 (13:38):
Layoffs, is what I'm watching.
Speaker 6 (13:40):
I think that would unravel some of this, but I
think the FED then aggressively starts cutting rates.
Speaker 5 (13:46):
All right, Priyamysra of JP Morgan Asset Management, Coreplus bond
ETF Portfolio Manager, thanks for taking the short walk over
from JP Morgan's headquarters here to.
Speaker 2 (13:55):
Stay with us or from Bloomberg Surveillance coming up after this.
Speaker 1 (14:07):
You're listening to the Bloomberg Surveillance podcast. Catch us Live
weekday afternoons from seven to ten am Eastern. Listen on Apple,
Karplay and Android Otto with the Bloomberg Business app, or
watch us live on YouTube.
Speaker 2 (14:20):
Let's talk about M and A because we've been talking
about this big Warner Brothers trade for the last seven weeks,
but it's been a pretty darn good year for M
and A. It feels like and I think banks for talking.
Speaker 8 (14:29):
About twenty twenty six as well.
Speaker 2 (14:30):
So let's check in with somebody who does this stuff
for a living, Samir, seeing he's co head of M
and A North America for City. Samir, help just frame
out how twenty twenty five has been for M and A.
And then kind of how you guys are thinking about
twenty twenty six.
Speaker 9 (14:42):
Sure, happy to do it. Thanks Ball for having us
and looking forward to the conversation. Look, it's been an
interesting year, right, it's been just set the stage twenty
twenty five. This year is going to be the second
largest year in M and A volumes after twenty one,
which had a lot of spack volumes in it. Let's
also keep in mind, by the way, they were a
couple of months where we were in the old rooms
from an M and A standpoint, right around when tire
(15:02):
its came out. So all of this momentums really happen
if you think about it in the last eight months.
I think back when I say to myself, you know,
since twenty twenty we had like six megadeals fifty billion
plus right over the last four years. This year, in
the last two quarters, we've had four. This momentum is
not going away. It's been incredibly busy. And why is that.
(15:24):
We have a kind of confluence of some perfect factors
of here. Right, You've got rates coming off, growth remains strong,
there is a significant amount of investments that's coming in
from an AI and thus a data center infrastructure perspective.
I don't discount that that's a big driver this time,
and then I combine that with how strategics are looking
(15:45):
at deals. There is greater clarity on how to get
regulatory approval for the first time in half a decade
this time, and I think you're going to continue to
see this momentum build because people are able to think
about this as deal makers. We're able to look at
the landscape and say we can get an answer as
to whether something's going to pass muster. The administration's much
(16:07):
more open to looking at remedies as a solution, which
was not something that was available to the buyers, and
thus able to find the right way to navigate these
complex environments.
Speaker 5 (16:16):
All right, So a more friendly regulatory environment in which
to work. So we know we're seeing a lot of
consolidation in media, we know we're seeing consolidation in AI.
We're else outside of those sort of expected areas. Where
else are you seeing consolidation in the new year.
Speaker 9 (16:34):
It's a great question. You know, let's talk about AI,
and when we talk about AI, everyone talks about LMS,
But let's actually talk about what else happens beyond AI. Right,
AI is causing massive amounts of spending that's flowing into
data center infrastructure that impacts industrials. You think about let's
call it picks and shovels, but you think about the
volume that's coming in of spend over the next five
(16:57):
years that is having a big impact from an industry perspective.
So you're going to see a lot of flow on
over there. You're seeing a lot of flow on in
real estate as a function of that. And then let's
also consider the fact you're coming out of COVID. We've
had a change in human behavior that was forced on
people and as a function of that, companies have had
to adapt. You take those impacts, the need to fix
(17:20):
supply chains, you take the need to think about tariffs.
I think the other place. When you combine those two factors,
you're going to see a lot of changes in the
consumer landscape as well. That's not going away. So in
my mind, like I see it happening across the board.
Let's also consider you know the GLPS, right, you think
about healthcare and some of the impact that that's having.
(17:43):
I see this happening across sectors. So AI has a
flow on on industrials, real estate in a few other places.
I see a lot of change in consumers, and I
see a lot of momentum in the healthcare franchise as well.
Speaker 2 (17:56):
Smyr talked to us about the private equity clients or
sponsors out there. For you guys. You know, based on
my thirty year career on the street, it's easy to
raise money, and it's really easy to invest money. But man,
it's really hard to monetize those investments. And that's been
pronounced really over the last four or five years. What
are you hearing from your sponsor clients.
Speaker 9 (18:15):
It's gotten much better. Yes, there was a lot of
noise last year because you could not exit some of
these assets because of what was happening in the market.
So the markets have helped, I'll tell you this year
exits are at a significantly elevated level. And by the way,
if you look at the sponsor wallet of exits, forty
percent of the wallet is coming from one billion dollar
plus exits. It typically runs twenty to twenty five percent.
(18:38):
That's a forty percent. Well, the other thing that's happening,
you talk about capital coming in. You've got strategics who
are now in a position to act, but you've also
got a lot of let's call it sovereign wealth fund
money right, and these funds have moved away from being
passive LPs and they're starting to think much more aggressively
(18:59):
about being direct investors. With the GPS, that has helped
in a big way as well. So what you're seeing
in auction processes, I am seeing situations where processes are
getting preempted for quality assets. I'm seeing situations where strategics
are showing up before sponsors going to exit and saying
(19:19):
this is what I'm willing to do. This is an
asset I'm very focused on. We know there's a wave
of assets that are going to come. I don't want
to be distracted. I want certainty. I'm willing to pay
the right number, and I want to get the asset
that I want. That is something you are seeing in
a way that is surprising relative to where things were
twelve months ago. It is becoming much more than normal today.
Speaker 5 (19:40):
And I think part of that is the friendly regulatory
environment that you're discussing. So do you think that this
cross border I guess approach will call it an M
and A will continue into the new year.
Speaker 4 (19:52):
Yes, I do.
Speaker 9 (19:52):
I do believe it and I'll tell you it's interesting
again because what's happening is crossboard of volumes that are
again running at record highs. And it's like seven hun
than fifty billion in North America last year, but sixty
five percent of that was into the US. The US
is the bastion of growth in global markets today. And
you see this now both with foreign strategic acquirers who
(20:13):
understand the need to capture some of that growth and
localized supply chains. But you're also seeing it with the
same concept of sovereign wealth funds who see assets national treasure,
assets that could be very interesting to have ownership in.
You're going to continue to see that built for.
Speaker 2 (20:29):
Your strategic buyers, financial buyers. What's the capital markets like
these days? Are the banks lending? Are you relying more
on private credit because we see in just in this
Warner Brothers Discovery deal, big bridge loans being quoted, big
financing packages being thrown out there.
Speaker 8 (20:47):
It seems like it's pretty solid Westing.
Speaker 9 (20:49):
It's a good market. So the banks are leaning in,
the banks are leaning in on the right situations. They're thoughtful,
We're being very careful about where we'll lending. You have
private credit available as as well as as a credible alternative,
and it is showing up in some large deals. We've
obviously seen it in this one. We talked about it.
We're spending a lot of time advising the folks at Paramount,
(21:10):
and what I'll just say about this deal is, look,
I think the offer, the aggregate offer that's being provided
to the Warner Brother shoholders, we think our offer is
superior and that our client will prevail, and hopefully Shoholders
will see the value of the separate deal this is
the whole thing, and see the aggregate value they could
actually get in this and not have to take the risk.
Speaker 5 (21:33):
I don't want to get too political, but it's interesting
to me that an administration that is very much about
America first and an isolationist in many ways is open
to sovereign wealth funds and money coming from across the
border to be involved in a lot of these deals.
I mean, I just I find that curious.
Speaker 3 (21:53):
You know.
Speaker 9 (21:53):
The way I kind of think about it is that
I think what's going to end up happening is they
will be guardrails. Put look at what happened. We advised
Nippon Steel and US Steel there were some very clear
guardrails that were put on, not exactly your sovereign word fund,
but still we had a golden shar being issued for
the first time in the United States, more common in Europe.
I think the general theme over here is there are
(22:16):
global alliances being formed. There is an increasing emphasis on
the Middle East, and I think when you think about
it in that context, there is a view that this
capital that's coming in is going to benefit both the
American consumer and also the national interest because it's providing
capital and places that is, you know, it's investment is needed,
(22:36):
and it's providing that capital at some pretty interesting cost
of financing. That makes this attractive in the context of
the global alliances that the administration's trying to form.
Speaker 2 (22:46):
Samir, what's different for one I was in your seat,
is there's a lot of boutiques out there that are
really good. How do you City, with the diversified financial
offerings of City and Goldman and JP Morgan, how do you, guys,
I guess, set yourselves apart versus some of these boutiques.
Speaker 9 (23:03):
Look, I think it's you know, every every sector, every
industry has competition. We welcome competition. I think from our perspective.
We believe in the long term relationships that we have
with our clients, and we also have an ability to
provide a very holistic solution. So we've got very good
advisory functions are seen in the incredible year that we're
having an M and A at city this year, and
(23:24):
then I combine it with the broader balance sheet that
we can bring and by the way, a lot of
these deals, we'd start to get very complex other things
that we're spending time on that the team is going
to be working on through the holidays. For better or worse,
there's there's there's complications in these deals. And what you
want from an advisor is the ability to provide a
holistic solution and not bring in seven different providers and
(23:47):
then you worry about confidentiality. That becomes an issue. But
I think clients value the advice they advise, they value
the relationship, and we don't. When we look at our advice,
our advice is fairly holistic. Across the bank. We don't
have to sit there and say we just worded about
one pocket of of UH.
Speaker 8 (24:06):
Because you have a deeps a deep bench. That's the pitch.
Speaker 2 (24:08):
Yes, you do it with all Samir, thank you so much.
Really appreciate taking some of your time. Samir Sek, he's
co head of M and A for North America. For
city Name with us or from Bloomberg Surveillance. Coming up
after this.
Speaker 1 (24:27):
You're listening to the Bloomberg Surveillance podcast. Catch us Live
weekday afternoons from seven to ten am Eastern Listen on
Apple Karplay and Android autto with the Bloomberg Business app,
or watch US live on YouTube.
Speaker 2 (24:40):
It is that time of day, folks. You wait for it,
it's here newspapers Lisa Mittail at least.
Speaker 4 (24:45):
A half hours. All right.
Speaker 10 (24:46):
So we're talking about a new growing trend in the
housing market. You have more luxury home buyers. They're looking
for fully furnished homes. I'm not just talking, you know, furniture.
They want the sheets, the mattresses, the pots, the pens,
the utensils, like everything's to nuts. The question is how
much extra does something like that cost if you want it?
So the Wall Street Journal they talked to a seller
(25:07):
in Fort Lauderdale, Florida, tacked on an extra one hundred
and seventy five thousand dollars on top of the price
at the home to get all of that, and this
is luxury, so just.
Speaker 8 (25:16):
Gave it in mind. Wow, she even stocked it with
toilet paper and paper towels for them. Did we wear
that in for good measure?
Speaker 2 (25:21):
And when we bought our Carmel house, we did exactly
that you did. We loved their style, we loved everything
was perfect, like, hey, we'll just take it as is.
When we sold it, we sold it at with all
that stuff, so that this good stuff, I mean.
Speaker 8 (25:33):
That brings turn key to a whole new lab mess.
Speaker 10 (25:36):
Of course, and it's better because it can It's both
for both sides, you know, like you can sell it
faster and then the person comes in and you just
walk right in.
Speaker 5 (25:42):
We just walked and plopped down and just take your luggage,
I guess with your clothes and off you go.
Speaker 8 (25:47):
I guess an extra money to.
Speaker 2 (25:49):
No in nor did I feel like we were paying
for it. You know, it was just you know, it's
just kind of it's already stupid pre expense about there anyway.
Speaker 3 (25:56):
No, it is.
Speaker 2 (25:56):
It is.
Speaker 10 (25:57):
But they're saying, like what they're saying is that it
started to increase after the pandemic because in the pandemic
there were a lot of you know, people were trying
to get furniture, and everything happened supply chain, so trends
kind of stayed and they just like to come in
with everything. They don't have to worry about waiting for
a couch or waiting for a bet or anything.
Speaker 4 (26:13):
It's all there.
Speaker 5 (26:13):
And oftentimes these folks are brought in designers and whatever,
and so the house is beautiful.
Speaker 8 (26:18):
It's like a show palace. You're like, I'll take the
whole thing.
Speaker 7 (26:20):
I would do it.
Speaker 10 (26:22):
Okay. So we've talked about this before. Remember when a
couple of provinces Encounada, they stopped the imports of US alcohol, right,
they took it off the shelves, and response to President
Trump's have so, business Insider was saying, a few of
those provinces are actually planning to sell what's left in inventory,
and they're going to donate it to a good cause.
They're going to donate the money they make two food banks.
Speaker 8 (26:46):
They're going to donate the alcohol to the money.
Speaker 7 (26:48):
Yeah, selling it, yes, yes, yes, yes.
Speaker 10 (26:51):
So for example, Prince Edward Island, right, they put their
alcohol back on store shelves yesterday. The government anticipates a
profit about six hundred thousand Canadian dollars from the sale,
So that's going to be distributed to food banks all
across the island.
Speaker 2 (27:03):
I wonder what Canadians did they stop buying Jack Daniels
and Tito's and stuff.
Speaker 4 (27:07):
I guess.
Speaker 10 (27:08):
I mean they're saying they don't intend to place any
further orders for American ALcom.
Speaker 2 (27:13):
I mean, I have some Canadian friends.
Speaker 4 (27:15):
They are upset.
Speaker 8 (27:16):
Yes, it is deep, and it is across the board.
Speaker 2 (27:18):
I mean they are not happy with us.
Speaker 5 (27:20):
So, but they're buying the homemade stuff now, So I
guess it's good for Canada.
Speaker 2 (27:25):
Okay, Yeah right, that's the Canadian stuffy stuff up in Canada.
Speaker 10 (27:29):
Ye all right, I want to take you to Okay,
so we talk about AI, right, and how it's being
used for different things, even to find a soulmate. Yes,
AI on dating apps. It's going to cost you. I'll
get to the cost in just a second. But it's
business Insider. They spoke the CEO of this company called Keeper.
It's an AI matchmaking startup. They say they can find
(27:50):
you soul mate. If they can't, they'll let you know.
Speaker 4 (27:52):
You'll get rejected. So it uses out sorry for you exactly.
Speaker 10 (27:58):
They use like algorithms AI models to match people. But
you have to go through this lengthy process, right, I
mean there's you have to fill out a questionnaire with
your age, academic test scores, like your SATs, career ambitions,
your salary, net worth, all that kind of stuff.
Speaker 2 (28:12):
I don't think dudes care about that too much, but
I'm just speaking SAT score.
Speaker 10 (28:18):
It's funny you mentioned dudes because they're the only ones
who have to pay. Oh okay, So if you're a
man and you do find a mate and you wind
up getting married, you sign this marriage bounty and you
have to pay fifty thousand dollars. So if wow, find
out if you get a date, you have to pay
five thousand dollars for the date.
Speaker 5 (28:38):
So it's it's for certainly pleasle I mean, I don't
know about this.
Speaker 2 (28:43):
So it's it's just taking tender and match dot com
to the next level. Yes, so it's more than just
swiping left or right.
Speaker 10 (28:50):
Yes, okay, it's curated through algorithms.
Speaker 5 (28:53):
At least they're matching you with a real person. I
thought you're gonna tell me, like the AI jack becomes
like your soulmate, you know, which would be very scary.
Speaker 2 (29:00):
I think just going into a bar and you know,
figuring it out, that's not still still the way to go, exactly.
Speaker 8 (29:06):
With cocktails at like thirty bucks a pop.
Speaker 2 (29:07):
Right last, exactly, Lisa Mitteo.
Speaker 8 (29:09):
That's your newspapers, folks.
Speaker 1 (29:11):
This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
seven to ten am Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
(29:32):
always on the Bloomberg terminal
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