Single Best Idea with Tom Keene: Troy Gayeski & Neil Dutta

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

In this episode, we feature conversations with Troy Gayeski & Neil Dutta.

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 (00:14):
Single best idea in the quarter ending Monday, I don't care.
I ended it today and we had a wonderful set
of conversations. Just the overview, not sixty thousand feet but
twenty thousand feet, lots of really good over James Steele
on Gold at HSBC was wonderful, free of beamish in
studio from Ts Lombard in London, just wonderful on the

(00:36):
Pacific rim and what we're going to see from China
quickly here though, On a Friday, Trey Guesci was in
with FS Investments and we looked at the optimism of
the market and he did as I do when I
think of someone like Michael Darta at Roth Capital, the
same thing, the idea of looking not at real GDP

(01:00):
or real wages, but the top line, the animal spirit,
nominal GDP.

Speaker 3 (01:07):
It's nominal GDP that drives revenue. And even last quarter
when you had real GDP contract nomal GDP expanded over
a three percent annualized rate. And clearly we're going to
get much better real growth this year. However, remember the
biggest struggle from the trade conflict is not how much
it reduces revenue. It's how much it impinges corporate margins,

(01:28):
and corporate margin expectations for growth coming into the year
were already over the optimistic, primarily because the most important
systemic tech companies already told you their margins were going
to expand that we're going to contract because of all
the investments are doing in AI. So we see it
revenue positive earnings of Obviously, earnings estimates have come down rightfully,

(01:49):
But I think at the end of the day, the
technical strength of markets continues to be underestimated, as well
as the continued strength of the consumer Trey.

Speaker 2 (01:58):
I ask you there on the non recent ession that
we've enjoyed the first half of twenty twenty five, the
market is absolutely remarkable. What's great about Renaissance Macro is
not only the quality of Neil Dutta, but he's working
with Jeff de Graf, who was literally a must read
out a Lehman years ago. Jeff de graph and Neil

(02:18):
Dutta synthesizing in economics with technical analysis and fundamental views
of a stock market. On the stock market, the economist Neil.

Speaker 4 (02:28):
Dutta clearly Tom the pain trade is stocks go higher.
I mean you have the market at basically new highs,
and you know, it looks like bears out number of bulls.
So that's, you know, I mean, pretty good sign the
pain trade is higher.

Speaker 1 (02:45):
You know.

Speaker 4 (02:46):
Look, I mean you know the I think you know,
the stock market is a very useful discounting mechanism, so
it's always important to keep an eye on it, especially
when you have a cautious economic view like I do.
But you know, it's also worth pointing out that it's
not a perfect counting mechanism, right, So when I think
about why stocks have gone up, you know, it's earnings
rates and risk premia and earnings estimates keep going higher.

(03:10):
Has been coming down, you know, you're getting soothing words
on trade, and interest rates have been coming down as
the markets bet you know, I guess more in the
direction of our fedview. So that's what's powering the stock
market higher, which kind of raises the stakes for what
earnings looks like going forward.

Speaker 2 (03:28):
On July fifteenth, I believe it's JP Morgan begins the
major earning season out. Absolutely fascinating, folks. I'm speechless over
what we've seen in economics, finance, investment, and yes, international
relations just deep into this June. It has been just extraordinary,
to say the least, on our podcast Yes on Apple,

(03:51):
on Spotify, on YouTube podcasts. This is a single best
idea

Speaker 1 (04:02):
Seven