Single Best Idea with Tom Keene: Mike Wilson & Darrell Cronk

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

In this episode, we feature conversations with Mike Wilson & Darrell Cronk.

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Episode Transcript

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

Speaker 2 (00:14):
Single best idea and the single best idea is we
understand it's a grind. We do economics, finance, investment, and
international relations. There's high points, there's big interviews and all that,
but part of it is just going from conversation to
conversation with the many different opinions about where the market's going.

(00:35):
We pay a little attention to who gets things right,
but we really pay attention and study who got things wrong.
It's something we're constantly dealing with and today was just
an absolutely vintage day of different opinions. Anastasia Amorosa with
us from Partners Group, many many others. Mike Wilson stopped

(00:56):
by from Morgan Stanley. He was a Pinata two years
ago on should you be in the market not be
in the market. He sees a new bull market here,
Wilson of Morgan Stanley.

Speaker 1 (01:07):
As usual, the markets get ahead of this and what
the markets are anticipating now, the bond market and the
equity markets that the Fed will be cutting sometime in
the next you know, two to six months, and you know,
even our house call, I mean our house calls for
no cuts this year, but then they have seven cuts
next year. I mean, that's like wildly bullish for equities. Okay,
so you know it's you almost had the perfect setup, Tom,

(01:28):
because what you have now is lagging economic data, which
is what the FED uses to make decisions, and you
have you already have the equity market and earning visions
telling you what's going to happen. So you know, they're
looking backwards and they're going to be looking at lagging
labor data, you know, and then of course lagging inflation data,
which should come down ultimately later this year next year,
and they're going to cut into that and but the

(01:49):
but you know, there's not going to be a knock
on negative effect for earnings revisions in the way that
people kind of assume when you get that sort of
decline in labor data. In fact, I would argue, because
it's gradual that we're going to see revisions go up,
because you know, when companies reduce headcount, it actually accrues
to margins.

Speaker 2 (02:06):
Mike Wilson, there, Morgan Stanley, that's a very important observation.
Have we even framed out the caution that we'll see
in September thirty ending quarter Q three and as we
go to the beginning of the year's earning season, call
it you know, October sixteen, seventeenth, eighteenth and tech earnings
October thirty, whatever those dates are. It's just fascinating to

(02:30):
see if we get the reticence again, no growth, low
single digit growth, mid single digit growth. Oops, once again
a better than good quarter. Joining us Darryl Krunk from
Wills Fargo. He's really really good at historic perspective. Just
can't say enough about the joy the density of his excellence.

(02:52):
Here's Daryl Krunk of Wills Fargo.

Speaker 3 (02:54):
I am elated about earnings, right, I mean, so we've
been waiting through twenty three twenty four earning SketchUp with
multiple expansion. I mean remember and recall first quarter earnings
S and B seven percent revenue growth, fifteen percent earnings.
This morning we're tracking six percent revenue growth, ten percent earnings.

Speaker 2 (03:12):
Right.

Speaker 3 (03:12):
I will take that all day long.

Speaker 2 (03:14):
Right.

Speaker 3 (03:15):
The margins are still holding up, so you're not seeing
the erosion in margin deterioration that everybody was concerned about
with higher prices. In the pass through effects yet of tariffs.
Maybe they come in the back half of the year
where we would stay away from We've just been bearish
on small caps for a long time. I mean, it's
interesting if you go back three years from right now
and I invested in a money market fund at four percent,

(03:36):
I outperformed small caps over the last three years.

Speaker 2 (03:38):
Joel Crack. There, it's an important observation there. It's done
money market We ever heard that from Russ Kostriche today
and Matt Brill as well. This idea of get the coupon,
get some total return, the low yield days are over,
and the total return, the risk adjusted total return rather
in bonds is something to study, to study as well

(04:02):
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