Single Best Idea with Tom Keene: David Rosenberg & Alicia Levine

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

In this episode, we feature conversations with David Rosenberg & Alicia Levine.

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Episode Transcript

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

Speaker 2 (00:14):
The single best idea and the single best idea always
have great conversations through the week, we succeeded and a Friday,
you can let's slip away in the summer. But in
this odd bull market with the newsflow, the president off
to Scotland, it was an eventful Friday. David Rosenberg started
us off from Toronto, and what I thought was fascinating

(00:34):
was his bringing in inflation, in any kind of persistent inflation,
with what the inflation adjusted wage will do. Here's David
Rosenberg on the coming job economy.

Speaker 3 (00:48):
If we see cracks emerge in a labor market, and
we see a loosening up in a labor market, the
fat is going to feel quite a bit more relaxed
that the goods and inflation that we are seeing on
the terrifile. If it doesn't feed into wages, that's going
to be a comforting sign. So I'd say that the

(01:10):
employment number in its entirety, you know the headline, the revisions,
what the unemployment rate does, the participation rate, but also
keep a firmil on the wage number, because what's really
important here, and everybody's waxing on about how great the
US economy is doing. I think it's rather mixed. Is
that real work based income and inflation adjusted terms is

(01:31):
actually contracting. And that is going to be where you know,
the inflation from the tariffs is going to hit the
wall on the labor market. So nothing, we know. The
Fed's not going to do anything. I think they'll be
they'll keep their cards close to their vest in terms
of any guidance. The key is really going to be
the labor market. That's what we're waiting for in terms

(01:52):
of what it's going to mean for interest rates.

Speaker 2 (01:54):
David Roseberg there, and I would just editorialize slipping into
a Friday, in a big weekend and all that grocery
prices haven't pulled back. I just you know, I'm not
am I scientific about it.

Speaker 1 (02:08):
No.

Speaker 2 (02:08):
Can I tell you how a bag of potato chips
have changed? No, But I've just got this feeling out there,
the grocery prices, they're just migrating higher. Maybe that's a
whiff of the inflation to come here, maybe even with
rents not coming down like they have so far this year,
helping out that disinflationary tendency. What a great week of

(02:31):
equity analysis. On the show, we finished strong with Alisia
Levine at B and Y. Really really astute conversation Alicia
Levine on the chosen few of the seven.

Speaker 1 (02:44):
The top ten stocks in the SMP, you know, are
about thirty percent of the SMP, which actually is on
the low side as a percentage if you look at
other global markets. So in Germany the top ten is
over fifty percent, France the same, So if you look
at other global markets, the concentration in the US is
not unusual. What I will say is this is cyclicals

(03:05):
are outperforming defensives here because the industrials are working. The
financials are really working because with a deregulatory agenda, you
have other parts of the market working. And the mag
seven is sort of breaking apart. Right, We're gonna have
wind up with a new acronym here. But you need
tech to work, and it must work because the behemoths
of cash flow and margin growth are driving the rest

(03:26):
of the SMP margin. Right, the margins of the Magnificent
seven are double the margins of the rest of the
S and P. So that has to work, and the
cap x spend must produce earnings must It cannot just
go into a black hole.

Speaker 2 (03:42):
An important theme today. Sarah hannat Alpine Sex and What
said the same thing as Miss Lavine of B and Y.
Basic ideas. Okay, billions to cap X in big tech,
but there's got to be proof of concept out there
into two thousand twenty six. Our proof of concept is

(04:03):
the commute across the nation. Thank you so much for
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(04:23):
It's single best idea