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What Goes Up

Bloomberg News

Hosts Mike Regan and Vildana Hajric are joined each week by expert guests to discuss the main themes influencing global markets. They explore everything from stocks to bonds to currencies and commodities, and how each asset class affects trading in the others. Whether you’re a financial professional or just a curious retirement saver, What Goes Up keeps you apprised of the latest buzz on Wall Street and what the wildest movements in markets will mean for your investments.


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Hosts Mike Regan and Vildana Hajric are joined each week by expert guests to discuss the main themes influencing global markets. They explore everything from stocks to bonds to currencies and commodities, and how each asset class affects trading in the others. Whether you’re a financial professional or just a curious retirement saver, What Goes Up keeps you apprised of the latest buzz on Wall Street and what the wildest movements in markets will mean for your investments.




Introducing: Elon, Inc.

At Bloomberg, we’re always talking about the biggest business stories, and no one is bigger than Elon Musk. In this new chat weekly show, host David Papadopoulos and a panel of guests including Businessweek’s Max Chafkin, Tesla reporter Dana Hull, Big Tech editor Sarah Frier, and more, will break down the most important stories on Musk and his empire. Listen wherever you get your podcasts. See omnystudio.com/listener for privacy information.


Listen Now: GMO's Jeremy Grantham on Merryn Talks Money

Hey 'What Goes Up' listeners, here's another Bloomberg podcast you might enjoy: Merryn Talks Money. It's hosted by senior columnist Merryn Somerset Webb and every week aims to explain how markets work – and how you can make them work for you. Every episode features a relaxed but in-depth conversation with a fund manager, a strategist, a Bloomberg expert or just someone Merryn finds particularly interesting in any given week. Listen in for the kind of insights and explanations everyone can use to help them make better saving and investing choices. This week Merryn speaks to GMO's Jeremy Grantham. Listen to part of the conversation here and the whole thing on the Merryn Talks Money feed. Enjoy Merryn Talks Money on Apple podcasts or wherever you get your podcasts: https://podcasts.apple.com/gb/podcast/merryn-talks-money/id1654809850 See omnystudio.com/listener for privacy information.


Why China’s Real Estate Crisis Is Different

The troubles facing highly indebted property developers in China have dominated conversations about the Asian nation’s economy and markets this year. Yet according to Rayliant Global Advisors’ Jason Hsu, there’s an important distinction between this housing crisis and previous ones elsewhere: The developers are the ones who are over-leveraged—not households. And that difference is guiding policymakers’ response. Hsu, chief investment officer of Rayliant and a co-founder of Research Affiliates, joined the What Goes Up podcast to discuss China and other emerging markets. “Chinese households are not levered when it comes to real estate,” he says. “They’re not levered because they can buy their first home with money down—and they pay quite a bit money down—and they generally have to sort of have enough income to cover the payment. That bankruptcy you’re seeing in the developer sector is very engineered. On the household side, there’s not a balance-sheet crisis, because they’re not buying real estate on leverage. So they really don’t think there’s a meaningful problem there.” See omnystudio.com/listener for privacy information.


Is the Fed Done Raising Rates? Ellen Zentner Thinks So

When it comes to the US Federal Reserve’s campaign to crush inflation by raising interest rates, Morgan Stanley Chief US Economist Ellen Zentner says this: “I have a strong view that they’re done here—but they have left the door open.” Zentner joined the What Goes Up podcast to discuss the Fed’s decision this week to pause rate hikes, and what she expects of monetary policy and the US economy going forward. Cooling inflation should keep the central bank on hold until it’s ready to cut rates next year, she says. In the near term, a potential government shutdown by Republicans would bolster the case for maintaining the status quo at the Fed’s November meeting. A shutdown, she explains, would leave policymakers without all of the economic data they need to make a decision. “In monetary-policy making, uncertainty tends to lead to policy paralysis,” Zentner says. “If we’re lacking data that the Fed can officially sink its teeth into, then that’s going to lead to an inability to make a decision about the path for rates.” See omnystudio.com/listener for privacy information.


Human Trafficking in the Crypto Rabbit Hole

A few years ago, an editor asked Bloomberg investigative reporter Zeke Faux to take a look at the cryptocurrency Tether, a so-called stablecoin meant to precisely track the US dollar by backing it with real-world reserves. What followed was a tour through some of the most-colorful corners of the crypto world, from Mighty Ducks actor Brock Pierce’s yacht to FTX founder Sam Bankman-Fried’s digs in the Bahamas and, finally, a hotbed for human trafficking in Cambodia. Faux joined the What Goes Up podcast to discuss his reporting, which is laid out in his new book Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall. “There's actually these whole office towers, floor after floor of people who've been lured from, say, like Vietnam, with the offer of a good job,” Faux says. “Then when they get there, they're trapped. They're told they can't leave. They're beaten. They get electric shocks, other forms of torture, and they're just given like 10 phones each and made to try to lure people into scams from around the world.” See omnystudio.com/listener for privacy information.


A Dip Worth Buying?

From artificial intelligence to electric vehicles and travel stocks, some of the previously hot equity-market themes have borne the brunt of the selling during the market’s dip in August and September. Sylvia Jablonski, chief executive of Defiance ETFs LLC, joined the What Goes Up podcast to discuss why that is. She also makes the case for buying the dip. “Everyone kind of panics, sells off tech, sells off growth and goes back into cash, cash equivalents, staples and kind of the defensive types of plays,” Jablonski explains. But “these are actually great opportunities, especially if you’re a young person investing for the long term. These are amazing opportunities to dollar-cost average. That’s how I would characterize this market this year.” See omnystudio.com/listener for privacy information.


How to Avoid Getting Burned by the AI Hype

There’s a lot of excitement around AI-focused stocks right now, but market veteran Art Hogan urges caution when it comes to companies that are just trying to take advantage of the hype without having true ties to the industry. The chief market strategist at B. Riley Wealth joined the What Goes Up podcast to discuss how he views the artificial intelligence investment landscape, as well as other market trends. “If we start to see the capital markets open, and we start to have a flood of newly minted companies that are AI-specific or adjacent, I would avoid that at all costs because they likely don’t have models,” he says. See omnystudio.com/listener for privacy information.


Matt Levine on Why 'Everything Is Securities Fraud'

Matt Levine, a columnist for Bloomberg Opinion who writes the Bloomberg newsletter Money Stuff, joined the What Goes Up podcast to discuss some of the hot finance topics he’s been covering and what he means when he says “everything is securities fraud.” “I have a genre of stories called ‘everything is securities fraud,’ which is where public companies do random bad things and people sue them for securities fraud,” Levine says. “It’s indicative of this really big, interesting trend in American securities laws where everything gets sort of reflected—all conduct gets reflected—through the notion of securities fraud because it’s easy to bring cases and the damages can be really large. And so you can like litigate, you can fight over, all sorts of political and social issues by calling them securities fraud.” See omnystudio.com/listener for privacy information.


BlackRock Shakes Up the Bitcoin ETF Race

Crypto fanatics have been pining for a Bitcoin exchange-traded fund for a decade now. But as the applications piled up, US regulators repeatedly declined to approve one, citing the risk of fraud and market manipulation in cryptocurrency markets. But with the entrance of BlackRock Inc. into the race, many market watchers are hopeful that one or more spot-Bitcoin ETFs will finally get the go-ahead. After all, the world’s largest asset manager has a strong track record of getting funds past regulatory roadblocks. On this week’s episode of the What Goes Up podcast, Eric Balchunas and James Seyffart from Bloomberg Intelligence join to discuss how BlackRock’s application dramatically changes the outlook for Bitcoin ETFs. “When they filed, it was a whole different ballgame in my opinion,” says Balchunas. “The fact is they generally like to bring a gun to a knife fight. This is a firm who doesn’t like to lose, who knows what they're doing, and they must see something.” See omnystudio.com/listener for privacy information.


The `Odd Lots' Crossover Episode

From the renewed and growing power of American organized labor to the case for minting a $1 trillion coin to end debt-ceiling brinkmanship once and for all, Bloomberg’s Odd Lots podcast has tried to tackle some of the most important topics related to the economy and financial markets. From Modern Monetary Theory to Bidenomics, the show hasn’t found a topic it can’t chew on. Now, the podcast’s hosts get the chance to answer some questions instead of asking them. Tracy Alloway and Joe Weisenthal joined the What Goes Up podcast to give their takes on some of the hot-button issues of the day. See omnystudio.com/listener for privacy information.


What You Need to Know About Gold

The price of gold tends to do well in times of elevated uncertainty about economies and financial systems—something the world has seen a lot of in the past few years. Yet each time the precious metal rallies above $2,000 an ounce, it quickly falls back below that threshold. Why is that? Joe Cavatoni, strategist at the World Gold Council, joined the What Goes Up podcast to explain what drives the price of gold, what buyers need to know and why that magic number has served as a ceiling. One main reason, he says, is that when prices go that high, they tend to reduce the real-world demand for gold—including from buyers of jewelry in China and India. “These are price-sensitive businesses and price-sensitive consumers,” Cavatoni says. “So when you start seeing those types of price levels develop, that’s when you see those types of consumers back away from buying—and investors aren’t ready to step back in in the long-term.” See omnystudio.com/listener for privacy information.


Vanguard's Hard Pass on a `Soft Landing'

A rallying stock market and better-than-expected second-quarter economic growth are just the latest developments pointing Wall Street skeptics to the possibility of a US “soft landing.” That’s where the Federal Reserve gets inflation back down to around 2% without triggering a downturn. For more than a year, Fed Chair Jerome Powell has waged war on inflation while a chorus of adamant recession predictions has fallen flat. But even now, with inflation cooling and the economy looking to be on the glidepath, some big names remain uncertain that he can pull it off. Vanguard Group is one of them. Joseph Davis, the firm’s global chief economist and head of its Investment Strategy Group, joined the What Goes Up podcast to explain why that is, as well as offer his reaction to the latest interest-rate increase and give his outlook for the bond market. “To get inflation down that last yard to 2%, you have to see a modest weakening in the labor market, which means the unemployment rate’s going to rise—although hopefully not drastically, let’s say four-and-a-half percent over the next year,” he says. “Well, that’s a hundred basis-point rise. So by definition, that is a recession. Now, anyone who thinks that that’s a soft landing is spitting in the face of 150 years of history.” See omnystudio.com/listener for privacy information.


When Will Commercial Real Estate Market Hit Bottom?

A slow-motion crisis is unfolding in the global commercial real-estate market, thanks to the double-whammy of higher interest rates and lower demand for office space following the Covid-19 pandemic. John Fish, who is head of the construction firm Suffolk, chair of the Real Estate Roundtable think tank and former chair of the Federal Reserve Bank of Boston, joined the What Goes Up podcast to discuss the problems facing the sector and what’s being done to help. “The biggest problem right now is the capital markets nationally have frozen,” he says of the US. “And the reason why they’ve frozen is because nobody understands value. We can’t evaluate price discovery because very few assets have traded during this period of time. Nobody understands where bottom is.” One step in the right direction, he says, is recent guidance from federal regulators that allows lenders more flexibility when it comes to borrowers who need to refinance properties. See omnystudio.com/listener for privacy information.


There's No Magic to Fed's 2% Inflation Target

US Federal Reserve officials have been adamant that they’re looking to get inflation levels back down to 2%. But the path to that goal could bring pain to millions of workers, a possible trade-off that “doesn’t make sense,” according to Rick Rieder, BlackRock Inc.’s chief investment officer of global fixed income. “This whole idea of there’s a magic to 2% doesn’t make any sense to me. You just had immense stimulus—let it play out,” he says on this week’s episode of the What Goes Up podcast. “Interest rates—how much would you have to move them to get the unemployment rate to a level to slow wages? It’s not worth it. Why would you take millions of people out of work because you need to go from 2.7% to 2%?” He called the Fed goal a search for “mystical perfection.” BlackRock manages about $2.7 trillion in fixed-income assets for its clients. Rieder adds that the segment of the population that gets hurt by higher inflation is the one that would bear the brunt of any potential layoffs. Meanwhile, raising rates creates an income benefit to wealthier people who tend to be savers, he says. “It’s illogical to me.” See omnystudio.com/listener for privacy information.


The World's Food Supply Needs to Change

Global shifts in incomes and populations, geopolitics and the climate crisis are combining to drastically alter the outlook for the world’s food supply. Taimur Hyat, chief operating officer for asset manager PGIM, joined the What Goes Up podcast to discuss his research into the changing world of food and what opportunities and risks it all presents to investors. “We think food is where the energy sector and this whole talk about energy transition was about 10 years ago,” Hyat says. “We are like 10 years behind in the thinking. And it’s going to catch up with us, because the current food system is simply not fit for purpose. It is not going to work for our planet, it’s not going to work for our consumption needs for a variety of reasons.” See omnystudio.com/listener for privacy information.


What If There Was a Recession and No One Noticed?

The disconnect between a roaring stock market and stubborn recession predictions has left many investors scratching their heads. The equity strategists at Bloomberg Intelligence however have an intriguing explanation: Maybe the part of the economic downdraft most likely to impact stocks started last year, and the worst could already be over. That’s what an economic-regime model suggests, according to BI Chief Equity Strategist Gina Martin Adams and her team. She joined the What Goes Up podcast to explain how the model works, and offer her mid-year update on the market. The model uses month-over-month changes in capacity utilization, continuing jobless claims, ISM Manufacturing data and the University of Michigan Consumer Sentiment level to define the economy’s health. “This indicator started suggesting there were economic risks emerging for the equity market as early as June of last year,” Martin Adams says. “And then it hit just an outright low level, like a low that you never see outside of recession. We effectively had this big loss of momentum in the economy that impacted the equity market—extremely negatively—between June and December.” She says that, by the model’s measure, the economy still isn’t out of the woods. “It’s still terrible. The reading is awful. It suggests we may actually still be in some form of an economic correction or recession, but it’s off of the low,” Martin Adams says. “So this is what’s really meaningful for price direction: As we know, equity prices are driven by shifts in momentum.” See omnystudio.com/listener for privacy information.


How Covid Rewired Markets and the Economy

While in some places life has mostly gotten back to normal following the Covid-19 pandemic, there are aspects of economies and markets that may have been altered permanently. Jared Gross, the head of institutional portfolio strategy at J.P. Morgan Asset Management, joined the What Goes Up podcast to discuss his team’s research into the post-pandemic landscape. According to Gross, some of the most-important legacies of the global health crisis will be disruptions to trade practices and the reaction of central banks to volatility in markets. Some highlights of the conversation: “It’s a rewiring of trade. The big pipe between China and the developed markets is being split apart. There’s a lot of reshoring, onshoring, friendshoring, nearshoring—all of that stuff is going on, and it’s a real thing, and it’s going to change the way trade happens,” Gross said. Another big change is that investors can’t expect the US Federal Reserve to come to the rescue when markets wobble, he says. “The central bank put, which everyone used to talk about, has probably been replaced with a fiscal put. If you’re looking for a backstop for market volatility, you probably can’t depend on the monetary authorities as much as you used to, because they now have to be very careful given the amount of fiscal stimulus in the economy. They can’t just cut rates because stocks go down. They can’t just cut rates because a bank is wobbling.” See omnystudio.com/listener for privacy information.


AI's 'Big Bang' Moment

Enthusiasm for artificial intelligence has powered a breakneck rally in US equities this year, far overshadowing the US Federal Reserve’s campaign to raise interest rates. So how should investors sort out the fundamentals from the hype? Mark Baribeau, the head of global equity at PGIM’s Jennison Associates, joined the What Goes Up podcast to discuss how he’s viewing the opportunity. He’s the lead manager of the PGIM Jennison Global Opportunities Fund, which is beating 99% of its peers with a more-than 30% gain so far in 2023. “The infrastructure layer that allows for this accelerated computing to go on is the way to play AI right now. Because we’re in the R&D phase, the applications are just getting developed,” Baribeau says. “Nvidia is an easy example. We kind of refer to their earnings release on May 24 as the ‘Big Bang’ because, in my history of doing growth equities since the ‘90s, I’ve never seen a company raise guidance for a quarter by $4 billion. That’s unprecedented.” See omnystudio.com/listener for privacy information.


Seema Shah Makes the Case for a Short-Lived Recession

According to Seema Shah, the chief global strategist for Principal Asset Management, the US economy will enter a recession, likely at the end of this year. Though she says it could be mild and short-lived. Shah joined the What Goes Up podcast to discuss why she thinks there will be a downturn, and why it could last just two quarters. Earnings have come down and could continue to do so, she says, which may “weigh on asset prices.” And while the labor market looks strong right now, she warns that it’s a lagging indicator and could weaken fairly quickly. “I know a lot of people out there who are expecting recession—they expect it to come in Q3. I look at the labor market, the strength of it, and I say that that's almost impossible,” Shah says. “By Q4, we would expect fairly mild negative growth, and then in Q1, a deeper downturn. But then by Q2, this is back to recovery. So this is historically a very short recession and historically a very, very mild recession.” See omnystudio.com/listener for privacy information.


Using AI to Explain Stock Moves

Artificial intelligence is all the rage on Wall Street. Some strategists see AI trends driving further gains for stocks as others point to how big banks are beginning to use it to automate some jobs. MarketReader, founded by Jens Nordvig, is leveraging AI to analyze US equity market trends and help predict why a stock might be moving a certain way. He joined the What Goes Up podcast to discuss how he sees AI helping investors digest information at a faster pace. “What’s happened this year is that actually applying AI has become so much easier than it was six months ago.” Nordvig says. “Our original plan was more focused on structural modeling, traditional fundamental modeling. But we’ve really seen how this actually allows us to do stuff that we just can’t do with traditional models.” See omnystudio.com/listener for privacy information.