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1:50This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. In the studio, Rebecca Patterson, authoress with Lizanne Saunders. And this is a triumph and indeed a celebration. investment wisdom for our friends and loved ones. Rebecca, I mean, you have the best blurb I've ever seen here. Chuck Schwab, founder, co-chairman of the Schwab Corporation, a wonderful collection of thoughts on investing, I think will keep Lizanne around. When you wrote the chapter up, what did you want to do about investment wisdom, Lizanne?

2:40Well, to some degree, Tom, I actually took advantage of something I had already written when I had just celebrated my 40th anniversary in this business. And it was really about the wisdom I've learned along the way, including from Chuck himself and many other greats, as well as the books I have poured over over the years and the advice that I gleaned from those. So that's how I approached my chapter. Mine was the final chapter. So I've been telling friends and loved ones that they should read the book from back to front. Back to front. Yes. Rebecca, you and Jenny Harrington, how did this whole thing come about?

3:23Because, I mean, we all, you know, value your opinion, Lizanne's opinion. I'm looking through who's contributed to this book. It's a who's who here of investment discussion. How did you kind of get this all together? Well, Jenny reached out to me about a year ago, a woman that she had known for a long time, very smart, very successful. was in the finance world, her husband sadly died. And she came to Jenny and said, I have to deal with the finances. I don't know where to start. And we quickly realized we know lots of people like that who are educated and smart, but personal finance is different than investment banking.

4:00You could grow up as a banker and still not know how to run your own money. So we start, exactly. We started thinking, all right, who else could give us a voice? Who else gets asked these questions by friends and family. Lizanne, obviously, and we reached out totaled. We have 25 authors. We didn't seek to make it a woman book, but it ended up being 25 female senior women in finance, which we thought was pretty darn cool. And we just said, what do you say when someone asks? What is your insight? What is your wisdom that you share and tie it to your life and your career? And Lizanne's chapter, I love, and we put it last because we wanted to have a strong finish and because we loved the book recommendations and the advice from all her mentors over the years.

4:48And people always say, what are some books I should read? So Lizanne's chapter had a bunch of great ones. And then we asked all of our other authors for their favorite investment book. Mine is actually not an investment book. It's an Uncertain Time by Doris Kearns Goodwin, which looks at history. And I always have believed that history helps you understand the present and future. I'll read anything she writes. Yes. That's for sure. Lizanne, what's kind of a theme that you kind of took from this book here? You know, one of my themes is just something that Tom says, the courage to be in the markets.

5:22What are some of the themes that you've taken away? I think that investing by its nature is an act of optimism. So I think there were a lot of optimistic threads through that book, too. The confidence is something you build over time, but I think you have to approach it with optimism. We tried to impart that. Rebecca Pattinson, Lizanne Saunders with us, of course, with all their duties, their heritage on the street. The jewel of a book is investment wisdom for our friends and loved ones. I'm sorry, it reads like a damn PowerPoint at Bessemer Trust years ago. This isn't like a novel, folks. She's not looking for a screenplay in a summer movie.

6:01It's like readable with charts in big, ugly letters like shut up and read this. It's a very hands on book. Lizanne mentioned it here. The heart of the matter up front in the book. And I see this every day. And it's wildly sexist because women will admit it and men won't. There's that lack of confidence in investing. What's the first step, Rebecca Patterson, to developing a confidence you don't have? You know, investing is a language, just like any language. And I think one of the first steps should be teach yourself a few vocabulary words. We try to avoid jargon in the book at all costs, actually.

6:43But there's a lot of jargon in our industry and a lot of words that maybe they're not even jargon, but you're not sure you understand. So start developing a vocabulary, a few words a week and educate yourself. You know, read the journal, read Bloomberg, read read whatever you want to pick to get more comfortable with it. Bloomberg, Bloomberg. There, Bloomberg. Read that first, then the journal. Well, we can read the journal as well. I love this poem. Melissa Lee over at the Death Star. Yep. Okay. Here's Melissa Lee at CNBC. Confucius. Okay. I had him in class. Confucius, he taught me, true knowledge is when one knows the limitations of one's knowledge.

7:24And this is, I mean, you're, you and Kevin, who's his name? Kevin. Gordon, I think. Gordon, you and Kevin Gordon are out there with people that acutely know the limitation of their knowledge. So then what? What's the then what if you know your constraint? I want to reiterate what Rebecca said is that there's the necessity of understanding jargon. But I think in the role that we have, try to cut through that and try to. I mean, one of the best pieces of advice I got in my entire 40 year career. or we probably talked about this, Tom, before, was from the late, great Louis Rukeyser when I was on Wall Street Week.

8:00And the first time I was on as a guest almost 30 years ago, he asked me if my parents were in the business. And in fact, I put this in the book and I said, no, they're not finance people. And he said, OK, when you come out here in 15 minutes to do the interview with me, get them to understand what you're talking about. And so that's always in my head. That voice is always in my head. Every time I get up on stage or get in front of a microphone at Bloomberg or sit down to write, it's talk about it, write about it, explain it in a way that everybody can understand. And what's interesting is more often than not, if somebody is kind enough to come up on the street or send me an email, although not in the last day, because if it's Outlook, it's people who say, I really appreciate that you write and speak in a manner that everybody can understand.

8:50And more often than not, they're on the more sophisticated end of the spectrum. It's not just the mom and pop saying, oh, thank you. I actually understood what you said. And I think that's the way to approach it, even from our chairs as people who have been doing this for quite some time. And I'd be remiss if I didn't make sure I got in. Just get started. Yeah. Yeah. I one of my I don't have many regrets. One of my biggest regrets in life is that I didn't appreciate the need to start investing, not saving, but investing when I was in my 20s. even if it was a small amount. And we have one chart in the book.

9:23We don't have a ton of charts, but we have one chart in the book that just shows over a lifetime, what is the difference in accrued income and accrued wealth you get if you start at 20 or 30 or you save versus invest. We all know about compounding. Compounding, though, as a word, overwhelms people. If you just show a simple chart, walk through very simple math, you're like, holy mackerel, I could have been a lot wealthier if I had started 10 years earlier. Lizanne, you spend a lot of your time talking to Schwab clients everywhere you're on the road. Talk to us about what the message is for younger people.

9:56I have four children in their mid to late 20s and early 30s. I think they're fully invested. They're doing a 401k. I get that message out. Although my daughter's getting a copy of this book this weekend, by the way. Thank you. And she's the smartest one of them. What do you say to the young folks these days? Investing is owning. Gambling is hoping. Amen. investing you are a participant in wealth creation as a gambler you are a spectator and lastly investing over the long term the odds are with you gambling the odds are not with you do not blur the lines between those two things chapter 17 it's like the Old Testament yeah Gina Martin Adams it's the folks out of my microbiology background Louis Pasteur he did you know like pasteurized milk and all that, but did a lot of other stuff as well in microbiology.

10:50Chance favors only the prepared mind. I see day after day in my family. My family is not like Paul's family. They're irresponsible louts. And what I see, Rebecca, is they don't want to be prepared. They want somebody else to do it. I don't buy it. If you have an advisor relationship, You have to be in the game as well. You just can't hand it off to Kevin Gordon, as frightening as that is. No, I agree. And I wrote a chapter on how to pick an advisor because everyone is different. Everyone has different needs, different personalities, someone in person, someone a phone call. Some don't want to talk to a human ever.

11:31They just want to do it all by text and Internet. And that's all fine. But there are some things you should think about when you're hiring them. How do they get paid? What is their track record? Is the team you're talking to when they're trying to get you as a client going to be the team that actually takes care of you going forward? And if someone leaves, who's the backup? I mean, there are some basic questions that would apply no matter what kind of investor you are. And I think that's pretty important for young people, too. Sometimes you just say, I'm going to go with this. I'm going to go on Calci and buy perpetual single stocks.

12:04Yeah, I know. And that goes to Lizanne's point. I would argue that's gambling, not investing. But it also shows that they haven't done their homework in terms of how to pick an advisor. There might be great Calci advisors at some point in the future. I would argue we're not there yet. But technology arguably makes it easier entrance to investing. I think the barriers to investing, I feel like, are lower today than they were when I was coming up. We at Schwab might have had a little something to do with commissions going to zero. I seem to recall that. But unfortunately, what that has also meant is that's ushered in a bit of a gambling mentality.

12:43And the other piece of advice I impart, and in part because I often get the question, not from you guys, blissfully, especially in a tumultuous period in the market. Okay, Lizanne, what are you telling your Schwab clients to do? Get in or get out. And I actually don't like the question, but I love getting it because then I get to say that neither get in nor get out is an investing strategy. That's just gambling on actually two moments in time. And investing should be a disciplined process over time. And I think that message is particularly important given that time horizons have shrunk so significantly, in part because there's so much less friction.

13:22The ease of being able to trade at a very low cost, all of which are good things. We need to educate about the discipline associated with successful investing. Love the chapter. Liz Thomas, who I adore from SoFi, divide and conquer asset allocation. And Liz, in the heart of this is the cloud of risk aversion in America and an industry developing products to meet that risk aversion. How do I escape that trap and actually take risk? that you're talking about your triple leverage all cash? It's been very successful, Dominic. They're putting it in the NVIDIA 401k here at any moment. Well, I'm more worried about some of the vehicles that are for the perceived big risk takers.

14:12And some of these inverse leveraged products that there's a lot of bells and whistles associated with the marketing of them and a lot of younger traders, I won't even say investors, that are getting involved without the necessary knowledge. Rebecca Patterson, final word here. How much fun was it herding cats? So writing a book with 25 senior women is not easier than writing it alone. But I would say it is definitely 25 times more interesting and satisfying. because one of the benefits I didn't count on writing this book or working on this book with Lizanne and Jenny and all the others is the community we build with each other, which is pretty darn special.

15:00It's a labor of love. Any author profits we make are going to Boys and Girls Club of America and Council for Economic Education. So we want to educate people and pay it forward. Jenny Harrington, Rebecca Patterson, Investment Wisdom. It's a jewel, folks. I can't say enough about investment wisdom. It's not a boring turn the page. I'll get through it. It's got some real bold, readable chapters, and they're short chapters. It's not like Dickens. It's not like great expectations. Know your audience. Yes. Thank you. Ladies, thank you so much. Stay with us. More from Bloomberg Surveillance coming up after this.

15:43If you invest or lead a business, one-sided views aren't enough. Join me, Brad Rogoff, and my team at Barclays Research as we debate what's driving markets on the Flipside podcast. Find the Flipside wherever you get your podcasts. With ChatGPT, you can do more than get answers. You can get things done. When you're running a business and looking to expand, you need a clear view of the landscape before making any decisions. ChatGPT can help you prepare. Connect your Google Drive, point to relevant files and reports, and ask Chat to research competitors, industry forecasts, and market signals. It can turn the findings into a strategic deck in your team's template that you can review before presenting to your leadership team.

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16:39You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. I want to give some color to this, and we're going to get away from the sensationalism of NVIDIA. When you have Dan Ives in the studio, truly with his global travel decades on the Pacific Rim, we can have a different conversation. Dan, you fly into Changi in Singapore. And what a lot of people don't know, it's the cargo center of the Pacific world. I mean, this is sitting on top of the prisoner of war camps from World War II.

17:23It's a ginormous, gorgeous airport. And they have SATS and DNATA terminals. They have express integrator hubs. They have Airport Logistic Park of Singapore. It's normal for NVIDIA chips to go through Singapore. That's like an everyday thing, right?

17:43Dan Ives: Yeah, I mean, look, I'd say to some extent, many would view like getting a cappuccino. In other words, like that is something where Singapore is always, it's a known loophole. I think investors have understood that. So that, now the point is, is that 5 % incremental of chips or 8 %? Right. So that was not, from an investor perspective, something that was so shocking. I think it's also relative to which types of chips. I continue to view it as third-rate NVIDIA chips that make their way essentially to China, not what I view as the gold standard. But into the weekend, triangulate the political heat in Washington, Secretary Lutnick and others, the tech weight of moving subpar chips or whatever to Singapore, and Andy Lin and our team in Hong Kong reporting those chips ended up in Shanghai.

18:37Dan Ives: Which of those stories matters to Dan Ives? The one that matters the most is that this is going to cause almost a major shutdown from an export control, any sort of loopholes that were making their way from NVIDIA chips into China. Because the reality is that NVIDIA chips are two to three years ahead of Huawei. So if you're Alibaba, JD, Tencent, name it, you want these chips because they're that far ahead of where Huawei is. On the same end, if you're a U.S. tech company wanting NVIDIA chips today, me and Paul put an order, okay, Sweeney Enterprises. Those chips you probably can't get till middle of 2028.

19:20Dan Ives: 2028 so the big question would be like why can u.s come why do u.s companies have to wait so long if quote unquote eight ten percent of those chips were going to china when you when it goes to everything with the spy and jensen the black guy moment the biggest issue is that is this loophole the biggest thing that separates china from the u.s first the reason u.s for the first time in 30 years ahead of china when it comes to hack a big reason for that is jensen you take jensen out of the picture that's why the best thing that ever happened in china is jensen out of the picture and video and that speaks to this arms race and this spiderweb relative that we're navigating from an ai perspective one could argue there there isn't a company out there that has a bigger key man at risk than nvidia with jensen wang what is the stock the stock call today on nvidia Look, many that are yelling, fire in a crowd theater yesterday, like I disagree.

20:21Dan Ives: Because to me, it was like, look, Jensen's worth a trillion dollars to the story. And we've talked about that. Call it$75 per share. $2.25 is the fair value for NVIDIA. We are buyers of NVIDIA at this level. Because, Paul, my view is there's one chip in the world fueling the AI revolution. It's NVIDIA. Now, are they going to be in just a massive amount of inquiries relative to D.C. Beltway? Like as Tom's talking about, like all the scrutiny? Yeah. But if your tech company going down the path spend three to four trillion, the one chip, it's NVIDIA. You can't change that. That's not changing for a stock trading at 10 times earnings.

21:02Dan Ives, Yorkville Ives with us here as we've done our coverage here through the week. Just extraordinary conversations. translate for mere mortals the fear that's out there these chips are powerful and they're going to get to the chinese and they're going to use them for bad things or are they going to go to alibaba servers to do you know the monthly income statement summary the the fear goes back to

21:30Dan Ives: the globe right now is two to three percent penetrated for ai so it's just say i'm not saying it goes to 100%, let's say another 40, 50%. It's US and China at this point, right? The fear is that if China gets that technology and that gives them just another leg up, it narrows the gap and when you think about Middle East, you think about Australia, you think about just the rest all throughout Asia, that right now is US's to lose. If China gets that, that's the fear right now that's going on. That's why DC is such a focus because they know you lose the AI race. It's a, you know, that's a very bad situation to be in.

22:15So one of the values that at least I could see from Jensen Wong, I don't know, is just the fact that he can do deals with everybody, everybody. Is there anybody else in that building that can get that done? Or do you have to, what does the company do here?

22:30Dan Ives: Now, Colette, CFO, she's someone that I always thought was going to be a major CEO of a tech company so that's not any surprise that she is the interim but does she have the global the global presence that she's done it before she understands who does cut to me it comes down to to me it comes down to like there's three there's three people right please quickly who it's cook is the and it's not and we've talked about it over the way it's not just because trump said cook checks every box and he's the one too okay who is technology in the shooter lies so much on I think the cash CEO of Palo Alto, I think he's someone that I view as very front and center.

23:11Dan Ives: And Tom Curry in a Google. I mean, those to me are the three that check those boxes. I want you, and maybe it's away from your remit, the politics. But Dan Ives in the Situation Room at the White House, where it's Secretary Besson and assorted others piling on the Secretary of Commerce, Mr. Lutnick. State the Lutnik case here to say we want to move chips because these are not evil chips. Is that is that the argument? The argument would be and this is Jensen's argument. Regardless, like Lutnik, Probe, Megaspeed, just take a step back. The view is that you need chips to get into China, NVIDIA chip, because if those chips are not in China, Huawei gets just that much more powerful.

23:58Dan Ives: Domestic competition increases. That's ultimately why NVIDIA and Jensen and what, Lisa Su and AMD has talked about as well, a foot in the China market. But are those chips that Andy Lin and our reporters have been killing themselves on this story, just to total amateur question, are those bad and evil chips? Or are they just run-of-the-mill chips? We don't care that they have them. I would view it more as the latter. Like, in other words, I view it more as like their second, third rate NVIDIA chips, not what I view as like the gold standard. When you think everything I would see with Rubin and Blackwell and kind of the core.

24:38Dan Ives: So that, to me, like those are far and few between relative to those chips. But as the investigation comes out, it's going to come out that any of these companies, they wanted those chips. Now, the only way to get them is through Jensen and NVIDIA. But you have to separate out. it's not just about nvidia chips do you get the you know call it the bronze or the gold and that's why the reason the stock is not like doomsday and i believe going back 200 225 because in that wall street institutional investor that's spending like time like myself in asia they understand this is much more of like the silver bronze level nvidia chips than what the goal is down here it does that you know it's like you say can we do a segui sure okay uh dan ives with this with Yorkville Ives here.

25:26Thrilled he could come in. Did you get this from Stroud or from Fernando? I mean, you're very Aramco. Yeah, this is Aston Martin, Singapore.

25:36Dan Ives: F1. F1, yeah. There you go. I can't keep up. Thank God for social media. Where's the car park? He's got on the Siegelman stable hat. Oh, Jalen, where's the hat? I didn't know that. Oh, my word. Mrs. Keith, I can see. I'm going to get home. Why don't I have a Siegelman? I actually, I've always seen the legend Keenan with the seat. I could see you with this hat on. With this hat on? Yeah. Okay. 100%. I could see it. Anthropic, do you know that we've hardly talked about this this week? Because we're doing the cacophony. When you hear six times oversubscribed on any deal, but in this case, Dario and Company, how do you translate that?

26:21Dan Ives: I mean, and look, we've seen it the whole week with the roadshow, like institutional. The roadshow has gone extremely well. I think they've walked investors step by step, both analysts and buy side, I think, a great job in terms of understanding the model. Because the reality is, is that is this a company that could do five, six, seven hundred billion a year in revenue? If it is, then it's a it's a two to three trillion dollar market. cap so that's why when it comes down to like is it 1.2 is 1.3 trillion the view is is that like they when it comes to foundationally with the ai revolution they are going to be a key piece the ipo going off successfully will also be very positive a broader tech market after the blue tidal wave the you know the crazy soft we saw last week which way overdone and the jensen black eye moment.

27:12Dan Ives: So that combination, you start to now with Anthropic IPO and strong Nvidia earnings, that starts to, I think, a step forward for this tech stocks. What does Jensen Wang do now? I can't believe he's just going to take his billions and go sit on the beach here. What does he do, do you think? He's going to do one of two things. He's going to work with Musk at SpaceX and help build it into what ultimately would be the biggest hyperscaler out there. Or he probably, like after three, six months, he starts his own company. And it's one like he'll obviously a huge PR and a lot of other issues that he's created all of himself.

27:51Dan Ives: But when it comes to technology, this goes back to the issue with Jensen is that it's been so mind boggling, shocking for anyone that's known him and seen him that this happened. But then from a technology perspective, he is irreplaceable. And he is, it's an asset for the United States relative to China that he continues to innovate. So that's where you get into a very balancing act relative, but we got to see what he's going to do. He's obviously going through all things that he ultimately caused. So how good of a day was it for Advanced Micro for the competitors here to see what happened at NVIDIA?

28:34Dan Ives: Yeah, I mean, look, if you're in Beijing, Shanghai, and this happens, you're doing cartwheels and champagne. So let's just say from a positive, okay? So China clearly benefits. AMD and Lisa Su, they are a natural benefit the way they're present. Broadcom, you could argue Alphabet as well relative on the chip side. And that's how investors are going to glean it out. Dan, I don't remember the exact instance other than you were dressed atrociously. But there was some point around Apple. Tim Cook is a failure. They're going to lose China. This and the other thing. And right now, folks, 12-month trailing, Apple's up 30%.

29:17The bid doesn't go down. I mean, it churns and then it goes up again. I'm popping a Walmart 40 multiple on Apple. You could still be long the Apple juggernaut now?

29:29Dan Ives: I think it's a$4 to$450 stock because I don't believe the AI monetization, 20 % of the world, they're going to access AI through an Apple device. And this is something that many will get caught in the PE and say it's expensive. Some of the parts, I actually view it as cheap, especially when you think about where the services business. So that's why, like, as they go toward the consumer monetization of AI and AI-enabled devices with Ternus and the way he's viewing this, it's a safety stock in a storm, as well as the innovation cycle is just starting. My essay of the year, Paul, to get one more in here.

30:10My essay of the year is Rob Arnott, Cam Harvey, at Duke here that gross profit matters. Apple, 44 cents on the dollar, has become 48, 47 cents on the dollar at the gross profit line. It's solid. That's how you roll. Crazy, crazy. All right, real quick. Penn State, 5-4 this year. It's been a disappointing year. Where does the program go from here?

30:31Dan Ives: Well, I mean, that was a great win at Washington, which is always a tough place to play. I think Minnesota this week, that's another. You know, P.J., what he's done with the team. I think you get through this, it's another huge win. Look, Campbell took this over with a depleted roster. I view this as a rebuild year. You go into sort of 27 strong. And look, I mean, I just think he is the guy that's going to take Penn State to the next level. I mean, Keith Segues from technology babble in Singapore, you sound like you're on ESPN or rocking Penn State. Four years at Happy Valley. Right now, retail loaded the boat when NVIDIA opened.

31:13I mean, that's in the zeitgeist. Which they should. So what's your target on NVIDIA coming off that$255?

31:21Dan Ives: $255 with, call it an interim CEO situation. If they get Cook, they cash curry. I'm talking like a global C. given where we are this could be 250 300 i mean trump put that out there he said why not but we talked about it a few we talked about this whole week okay because alexa to me it's just like he checks every box relative to global footprint understanding the technology as well as something that has relationships and this is not just about nvidia as a ceo this goes to like white house and And this is important for the U.S. technology world. This can't be an Intel situation. Dan, I got to go.

32:05Mrs. King just emailed in. I want the hat like Jalen. Says, I want the hat like my Jalen. Dan Ives, go away. Yorkville Ives. Ives Yorkville as well. Really interesting there. Stay with us. More from Bloomberg Surveillance coming up after this.

32:30You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. Ian Watt joins us on, Chief Economist, Huntington Bank. To me, the arch question brought up yesterday amid the NVIDIA blur is if or how nominal GDP comes in. Are you modeling out a slowdown in nominal GDP out 18 months? We are. We think the tax cut, the tax bill last year really helped boost and offset the gas price hike. So consumers are really spending. You're still seeing remarkably strong spending growth.

33:16I mean, if you look at the chart of retail sales, it's really been an upward trend in year over year growth on retail sales. Job growth's really been accelerating or just at a different pace since March. I mean, if you look at the last seven months or seven months prior, we've had 600 ,000 plus jobs added in the past seven months prior, 100 ,000. So there is this momentum in the economy, but consumers are outspending their income. And at some point, that tends to come in a little bit, that their spending growth is outpacing their income growth right now. So, Ian, what is kind of the underlying inflation from your perspective here?

33:53We've got oil prices up and down, up and down. We're down below 90 for WTI crude oil. But, boy, that's been an issue. What's the underlying inflation that is really a challenge for consumers? I actually think I'll pivot that. It's a challenge also for companies. And if you look at the PPI versus the CPI right now, it's an unusually large split we have where the PPI is tracking almost, I think it was close to 6%. And so you have this split. And oftentimes PPI leads CPI as well. So companies eventually have to pass this on. But we do see spaces like like food products where companies are struggling to pass on margins.

34:27Sales are pretty flat. While a lot of other spaces, companies are clearly able to maintain their margins. How is that analysis affected by oil? If we had 117 Brent crude, we come in today. I mean, if we get oil here or dare I say it breaks down even lower, that's got to be a huge benefit. Yeah. And part of what we've seen, too, is that the crack spreads come in, too. So part of it was when we were at$100 barrel oil, gasoline and diesel prices were a lot higher than they should have been relative to that oil price because the refining margins were way up. So even if we just see the gasoline and diesel prices come back a bit, I'll tell you, every single firm I talk to across the country talks about diesel surcharges.

35:10It's just a common theme. They said every bill we get, there's a diesel surcharge on it. And it's significant enough where builders are telling me it's hurting our margins. We're noticing it coming in on our construction costs are missing target, partly because of those surcharges. So one of the things we when we look at the labor market, full employment, I mean, you have 4.1 percent or whatever the number is. But wages aren't keeping up with inflation for most people, it seems like. Again, when does that become an issue? Yeah, it's partly it's really a white collar, blue collar story right now.

35:46If you pull out the jobs report and you look at what were the top sectors adding with income growth on week over week, I mean, sorry, average weekly earnings on a year over year basis. Top sector, utilities, construction, manufacturing, every single thing you can think of. Oh, oil and gas, too. Those are the top four sectors for wage growth right now. So those folks are all beating inflation. It's very much a blue collar story. It's a white collar. It's a retailer story where you're seeing people really coming in below. So there's a bit of a split in the economy. And we're seeing it when we talk to companies.

36:23I love your blue collar paragraph. But is the white collar? I mean, what's the why of white collar having less wage growth? Is it the dreaded AI? I would say that's part of the story. Is it Jensen Wang's fault? I would say it's part of the story. You know, I also run the team that does peer intelligence. We started using AskBee a couple months ago, or a couple quarters ago, and it does a great job breaking down a ton of what our peer earnings are doing. So it certainly has boosted my productivity and my team's productivity. But some of it started before then. If you looked at in software, there was that trend of, hey, did we overstaff?

37:05In banks for a while, in insurance, in the fire space, when rates went up a bunch, a lot of them were sitting on unrealized losses on their portfolios. And they were just more hesitant to expand, hesitant to hire during that span. So there's a few different factors pushing that. All right. December 9th, we're going to hear from the Fed next. I think most people are penciling in kind of a rate hike. Some folks are even suggesting maybe 50 basis points. I don't know where that craziness came from. I would say Governor Waller. He certainly was laying down a marker on where he thought things should go.

37:44If you look at the data, it's kind of remarkable. Look at the work function on Bloomberg and you'll see the implied rate probability. We were at peak of 1.8 hikes, maybe a 60, 70 percent chance of a December hike. And through the rest of the next year, 1.8 roughly was where we peak. Today, it's three and a half peak. Peak is three and a half. And we're at 110, 120%, basically meaning they're pricing at least a possibility of two hikes instead of one right now. So that move is really remarkable in a week. In Huntington Bank, after this election, where I'm guessing 40 out of 41 or 41 out of 42 data centers were crushed, what do you see in the Huntington Bank territory really on data centers?

38:29Is the zeitgeist accurate? it? Yes, certainly the political resistance has been significant all across the board. And if you look at data centers where we saw a lot of the bills passed, my team went through it and we said a good number of these bills passed in places that aren't significant data center construction centers because it is relatively regional. Texas is obviously number one right now in terms of construction in Virginia, but a lot of it is the Midwest. It's sort of old Huntington footprint, traditional footprint, Ohio, Indiana, places with access to the reality is Western PA is some of the cheapest natural gas in the country because they just don't have enough pipeline capacity to offload Appalachian gas.

39:10And so companies are leaning into that. If, for example, if the SoftBank data center ever gets completed to its maximum capacity, that'll be one of the largest data centers in the U.S. And that's in south central rural Ohio, a county of 27 ,000 people. They want to put a 10 gigawatt data center. Ian, thank you. Ian Watt, Huntington Bank with us here with a brief. Stay with us. More from Bloomberg Surveillance coming up after this. With ChatGPT, you can do more than get answers. You can get things done. When you're running a business and looking to expand, you need a clear view of the landscape before making any decisions.

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41:14you're listening to the bloomberg surveillance podcast catch us live weekday afternoons from 7 to 10 a.m eastern listen on apple carplay and android auto with the bloomberg business app or watch us live on youtube important perspective right now tani fukui joins us with met life here synthesize. I'm exhausted, Tanya. I remember when it used to be like calm. Like where are we having lunch on Friday? Barely. A long time ago. How do you study out a year or two years or three years given this noise box we're in? I think you have to go back to the fundamentals, which I think sometimes just means ignoring the volatility of the, especially the oil prices, but also the day-to-day noise.

42:05The things that we're focused on are sort of the slower moving things, the slower moving series, for example, the labor market. Labor market is a relatively slow moving series. It's been really strong and yes, low hire, low fire, but it's really improving. And I know consumers have been so mad about inflation with good justification, but they have jobs and that helps continue the spending. And so for the next year or so, we're looking at a fairly robust consumer. Obviously, the stock market can't crash, but if we have a fairly robust consumer, that's a good basis. So again, we've had Troy Lutka in here just earlier, still looking for GDP growth, real GDP growth next year, 2.5%.

42:56That seems like a pretty decent background for corporate earnings and for risk assets. Is that how you start your look at 27? Yeah, yeah. So, yeah, we're looking at our 27. We're at 2.4. So basically the same as that, as a two and a half. I think, yeah, essentially the consumer in the beginning, at the end of 2025, beginning of 2026, was not doing too well. They were kind of pulling back. AI stepped in and provided a lot of the economic growth for 2026. in the last little bit, in the last quarter's GDP, we start to see consumers really pushing ahead now. And I think that may continue. We see, as I said, we see that likely to continue.

43:40And if that continues, that's a solid growth pace. Inflation, boy, this thing is just not slowing down. Inflation is still an issue for so many people in this economy. When does it become like a real problem? for markets. It just seems like the market's plowing right through this. Yeah. And that's interesting. I mean, I think the hope really is, and this is, you know, when we look at our year on year inflation forecast, it's going to go down a lot. That's even if, you know, we've got something like$90 a barrel through, we use Brent, through year end. And that's just a lot of, that's a lot of coming down just by base effect.

44:24My greatest sympathy that you have to publish Monday. I can't imagine what you're going to write. This is going to be extraordinary. Tani, thank you so much. Tani Fikui with MetLife. Too short a visit. This is the Bloomberg Surveillance Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, 7 to 10 a.m. Eastern, on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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