US Stocks and Treasuries Fall as Oil Pushes Higher; Iran Refuses to Soften Demands

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1:28This 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. Lori Cavacina, she covers this stuff for RBC Capital Market. She's head of U.S. Equity Strategy. It's been a good year so far, Lori, for Stock Market Index. X's. How do you think about the fourth quarter setup? So, you know, we're not trying to make a call, you know, on December 31st per se, but we have said that we think risk of a 5 to 10 percent drawdown has risen. And in our weekly today, we also said, you know, that's still our base case, 5 to 10 percent.

2:10But every little bit you add here on the bond yield is pulling up a tier two risk. And I forget if it was last week or the week before, but we put out a piece, you know, we've had various things we're worried about, but we kind of honed in on the hiking cycle last week. And it was really fascinating because we went back and we looked at all the liftoffs since the mid-1990s. We kicked out 2022 because that one was just longer and deeper and very different than the others. And otherwise, the median drawdown that you saw sort of at the beginning of the hiking cycles was about 9.6 percent. And they range from about 8 percent to about 14 percent.

2:43So you do tend to see some turbulence around liftoff. And we haven't really gotten that yet. We had a sideways summer for the most part. But we think the risks are piling on. I do get your notes that you send out to clients. So I saw how you recently kept that 12 month price target at$81.50. And then you talked about the four tiers of fear framework. And you mentioned that briefly about the potential of 5 to 10 % drawdown. Walk us through those tiers. Yeah, so this was, you know, this is honestly, it's just a list of drawdowns based on my kind of lived experience in financial markets. I started in 2000.

3:13I joke that I got my job offer in March of 2000, right? Right at the peak. So I didn't see the melt up, but I did see the meltdown. And, you know, so we have tier one garden variety, five to 10 % drawdown that would take you to 7 ,000, 7 ,400 on the S &P. Won't feel good if I'm right on this, but the reality is it's pretty ordinary to get these kinds of drawdowns. Post-GFC, which is when I've been sort of in the hot seat, you know, as a lead senior strategist, really what we've noticed is that if you kind of fall below 10, you're going to gap down to like 14. And so we've had five of these distinct what we call growth scares, where you lose 14 to 20 percent.

3:52That's tier two. Really, it's fears of a recession or something new and crazy on the scene, and people are afraid things are spiraling out of control. But you don't have a recession. It's kind of a near miss. Tier three, recession pricing, and you lose a quarter to a third of the market value. I joke with tier four, we don't talk about those. Tech bubble meltdown, GFC, one was down 40, one was down 60. We approximate you lose half your value. And so, you know, I think the way we kind of compare it is a shopping mall elevator. So, you know, you sort of go down one level and then you reassess. And so around the Iran war, frankly, you know, back in March, we were having a lot of conversations with head funds and saying, if you really don't think that there's serious risk that we're going to have a recession and things spiraling out of control, et cetera, you probably want to buy the market around 10 % down.

4:36If you think there is a serious risk of a recession brewing, there's going to be another gap down. That's how we try to use it is reassessing at each of those levels. So typically in a midterm year, you'd see the drawdown usually average historically the last few decades, like 18%. And then the drawdown we saw back in March of the S &P was as much as 9%. So mathematically, does that just, in your view, leave us room to have another drawdown by year end? Yeah, and like what I will tell you is if you go back and you look at the history around midterms, and I have this chart in my deck I update it every week.

5:05You can sort of see the pressure in the summer. You bottom in October, you rally back. And then we bought that trend, though, this year. But we had another chart, like when we first put out all this midterm stuff back in August. I have to cut things down because the deck keeps getting too long. But we had this one where we looked at every single midterm year, and it's just the messiest chart you'd ever seen. So, yes, there is pressure, and it kind of tends to manifest in the summer. But the reality is most of these midterm years have their own beat. In 2018 and 2022, we had a lot of flipping back and forth, very extreme moves, you know, kind of peaking, you know, peaking initially, then falling, rallying back and then falling again.

5:42And so that's what we're worried about is these last two cycles, there's been a different pattern that's emerged. So earnings have just been extraordinary this year to date. If nothing else, the math tells you that the comps are going to be difficult for 27. How do you think about that? How do you think the market's discounting that? So I can tell you that what we have done is that we have put a 10 % cut. And again, we do this 12-month forward target. We're still using 2Q27 because we haven't finished 3Q just quite yet. But we're taking the bottom-up consensus and lopping 10 % off the top just to be conservative.

6:14Clients have found that interesting. We can still walk you through math where that earning strength, even with that haircut, offsets the multiple compression. And we lose that sliding scare, right? It kind of, you know, the earnings buffer erodes the more and more you raise bond yields and inflation. But that's what we've been talking a lot to clients about, to be honest. You have a lot of great analysis in your notes about the earnings call transcripts and what's popping up the most. What did you take away from this last earnings season? So I was kind of annoyed. And I think that, you know, at various points in time, I sort of railed publicly on this.

6:47I don't know that it really helped. But I felt back in the previous reporting season, we got a lot of really great color from companies on. this is how much hedging we have in place and inventories are there and we can handle oil at this. And then, you know, we sort of expect the war to go through the summer, the end of 2Q. And it felt like things were just quieter in this last reporting season. I saw a few companies would say things like, well, you know, these hedges on this particular commodity, you know, are starting to roll off, but these others are sticking around. So we got a little bit of that where you could see, you know, maybe some of the pain is going to start to be filtered in.

7:19I saw a couple of companies that said things like, well, we think we'll be okay if oil stays under 100, like around 90, but if it goes above 100, who knows? It just sort of felt like we're sort of hitting that pressure point and companies clammed up a little bit. So what I would really hope to hear in this next reporting season is, frankly, a more candid discussion similar to what we got two reporting seasons ago as opposed to the last one. Stay with us. More from Bloomberg Surveillance coming up after this.

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9:01You'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'm going to stay on these markets here, just give you a little S &P futures down 40, the Dow off 300, and the Nasdaq off 290 points. That's about nine-tenths of 1%, and yields are six to seven basis points higher. We'll keep an eye on that. Nimrod Kang joins us, Chief Investment Officer at Northstar Asset Management. Nimrod, thanks so much for joining us here. The 10-year yield didn't just test 5%, blew right past it, and now we are here at 522.

9:40What does that tell you? Does that concern you? Yeah, we're in this period of great normalization as far as bond yields go. You know, just like your previous guest said, the period of low rates is over. We are in a different regime altogether. High deficits, you know, in a time when we have booming economy, high debt. All we know is that the government is going to keep coming back to the markets for more and more. And that's why investors, allocators like me want higher yield to lock up our money for longer periods of time. You know, it's really as simple as that. And the other part of it is that we are in a different age.

10:21We are no longer have the tailwinds of globalization. We live in a very polarized world. We are constantly having all these supply shocks. you know, COVID, Ukraine war, Iran war, you know, all kinds of things related to disruptions that we are seeing and deglobalization. All of this bodes that we are not going to see that level of low inflation going forward. If anything, you know, just if we get a news of some cooling off here with the Iran war and the oil prices come down and inflation expectations come down a little bit, we still have to remember the bigger picture that we are just in a different era now.

11:04Nimrit, we haven't seen the S &P 500 post to 1 % decline in 41 consecutive sessions. And then at the same time, the 10-year Treasury yield is up roughly 50 basis points since Kevin Warsh had that speech at Jackson Hole. What exactly is the pain point threshold for yields to when you start seeing that pain spill over into equities? We are already seeing a lot of pain in a lot of interest rate sensitive and consumer facing sectors. I mean, from August 11th to now, consumer discretionary down significantly. Utilities, real estate, financials, all the sectors that are exposed to the interest rate sensitivity they are.

11:41What's hiding it all is the resilience of the AI trade. And that's what you see the semiconductor sector, the technology sector continuing to do well. And that's what's holding up the market. But underneath the hood, You know, look at the equal weight index, S &P equal weight index, down almost three and a half, four percent since that period. So you are seeing these violent rotations underneath the market, underneath the aggregate number. So, Nimrit, what is for you guys and for you, what is the AI call in the marketplace here? It seems to be one that's evolving over time as people try to, you know, invest with the infrastructure.

12:21Now maybe thinking about some of the users of AI. How do you guys think about it? Yeah, the market swings constantly on this AI, you know, from fear to greed, fear to greed. And we're seeing all of that. Our call has been for it has to go to broad-based monetization for AI to make sense for the longer term benefits of this massive, massive trillion dollar spend on AI. Companies that are implementing AI have to start seeing improvement in their revenues, their sale, their margins, productivity. you have to see that broad-based benefit for AI to make sense. And if you look back the history of any kinds of big CapEx cycles, you know, that investment cycle is always front-loaded, and then it takes years and years for productivity and the efficiency benefits to pay off.

13:09So we do think that the longer-term game and the story here is it will transition from the builders to the ones that are monetizing AI. If you look at where the VIX is trading right now, It's only around 16. So that's almost 10 percent below its one year average, which is above 18. And I know you were talking about in your notes the expectation for volatility to pick up ahead of midterms. We haven't quite seen that yet in the level of the VIX, but obviously underneath the hood of the indexes, we're seeing that on a micro level. When do you expect that to show up more in the VIX? VIX has been a really, you know, it's been a conundrum at this point because no matter what happens in the markets, the VIX is, you know, kind of pretty much very steady.

13:52So maybe VIX, as we know it, is no longer the right measure to monitor the volatility that's happening. Maybe the real way to think about what's happening in the market and the volatility is to look at the intrasector rotations that happen. And we see that, right? From even through the year, we constantly see this turmoil in the market going from one sector to the other. Semiconductors do really well. Then there's a a little bit of scare around semiconductors, they sell off and it goes to all the other sectors. Now there's all this fear around interest rate sensitivity. And you see that back, you know, that trade come back.

14:26So I question how effective is VIX going forward or has been in giving us the true gauge of what is the volatility in the market? Yeah, but Nimrit, the VIX is on my monitor. I quote it every day. I'm not doing something different. Mine too. Mine too. Nimrit, these earnings we've seen in the last three, four quarters have just been extraordinary stuff that's just way off the charts here. So if nothing else, the law of large numbers are going to make the comps next year kind of challenging here. Is that a risk for the market? Well, it's a risk for the very sectors that, you know, what we would say is the AI enablers, right, the semiconductors, the picks and shovels, they're the ones, the AI basket has grown their earnings 60 % just in Q2 here.

15:14And that's on the heels of, you know, several quarters of very strong, strong growth, right? And they continue to post that. We're seeing the rest of the sectors, the non-AI basket here, just starting to pick up, seeing some momentum in earnings. You know, they showed an improvement in earnings almost close to 26, 27 % here in Q2, which is a pretty strong number. And that was an acceleration from 14, 15 percent in the prior quarter. Our expectation is we have to see this acceleration for the rest of the market continue on. It's it'll be healthy. It'll be broad based. And there's a lot of catch up, because if you look at over the last several years, the non-AI sectors haven't shown a lot of earnings growth.

15:58Stay with us. More from Bloomberg Surveillance coming up after this.

16:06With 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. Growing a business is ambitious, and ChatGPT can help you do it with confidence. Get started at ChatGPT.com.

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17:40You'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. Jess Metten sitting in for Tom Keen on Paul Sweeney. We're live here in our Bloomberg Interactive Broker Studio. We're streaming live on YouTube as well. Jess, the president was busy this weekend. I mean, he was at the Texas-Tennessee football game Saturday. Great game. And then he went out to Chicago for the last day of the President's Cup, which the U.S. rallied big time to win here.

18:15I was assured that college football was not going to be brought up today. Oh, because your Texas A &M lost again. I feel like it's not a coincidence. Two Mondays in a row, Tom King's gone, and then I get asked to come in after my team unfortunately loses. Exactly. be. Henrietta Trez joins us here, co-founder and managing partner of Veda Partners. Henrietta, is there any strategy behind President Trump's traveling to these big, high-profile sporting events before the midterm? Or is it just a guy taking advantage of he's got a great plane at his disposal? He can go anywhere he wants, anytime he wants.

18:46Is there anything going on there? That certainly is true. And do a flyover in the presidential plane over the President's Cup has got to feel good for a lifetime golfer, I guess. It's in keeping with what the Senate spent their time doing last week, which was re-regulating college sports. So that's not just where the president is focused, but where the Republican Party is focused, spending a week on reforming college athlete regulations. So obviously, a stark contrast to what voters are paying attention to, which is the high prices of gas and diesel, especially even within the Republican Party, you have the farmers in Iowa versus the energy men down in Texas.

19:28So a different kind of sport maybe playing out, but not one that involves a ball. Well, looking at U.S. retail diesel prices, well above$4 a barrel here, obviously, if you're looking at a gallon rather. So what do you think when you're speaking with your clients here as far as we I mean, we have a little under, what, 40 days now before the midterm elections. So how are you viewing the direction here ahead of that? That's a great question, Alex. And that's what I'm trying to do for clients right now. You predict well in advance that the president is going to start talking about a diesel export ban.

20:04That's something that I'm able to identify as soon as Congress decides that they're going to pivot to college sports. They're not going to do anything to pass a gas tax suspension or otherwise lower prices. So if you look at the congressional calendar or something that me and Paul do all the time, it's really informative to get a sense of when your peak risk is going to come. So we talk about 40 days being left in the election. That's 40 days of gas at almost$4.50 a gallon. God knows where it's going to go from here. And diesel's so high, mortgage rates so high, and the Federal Reserve potentially hiking interest rates just a couple of days before November 3rd is wild to think about.

20:43So for investors, what I caution is that we have not hit peak Trump. We have not hit the peak stress points of this election. I understand that it's close, but it's still too far away to feel complacent. The conversation around a diesel export ban should be all the red flag you need to know that we are dealing with just executive actions now, which by definition are going to be more extreme than a legislative solution. And that's what we all need to be on alert for. So don't be surprised by things like, hey, the president's considering banning exports of an entire energy product because the senator pro tempore, Chuck Grassley, Republican farmer from Iowa, is asking him to.

21:22That's the kind of stuff that is our new normal and will be for the next 40 days. Is there any check? And I would say what happens after the midterms here? And assuming the Republicans get some, you know, one or maybe both the houses, but certainly the House here. Then what do we get from the White House, do you think, for the for the following two years? There's two periods of time that I think investors should consider. One is the immediate aftermath, the lame duck session. And the second is the next two years where we'll see, you know, an ending presidency, a full lame duck, focus on foreign policy, focus on tariffs and trade and all that stuff that we've been seeing except, you know, times a million because this is the last hurrah.

22:05But the fourth quarter, I think, is probably where we should reasonably focus. If Republicans lose the House and or the Senate, they have a couple of things that they really would like to do. It'll be tough to get members back in town. you're going to lose at least 63 different congressmen and senators through attrition or because they lost their seats because they're retiring. So you're going to get a lot of guys who don't want to come back into town being really put under pressure by their party leaders to say, hey, we need you to come take this vote. You know, Mitch McConnell is obviously frail.

22:35You need to be here, even though you're not going to be a senator next year. We need your vote. So that's going to be the dynamic and they need to fix the debt ceiling. They need to fund the federal government. We have no money for the Pentagon, which is crazy going into month seven of a war. And the Pentagon has been up on the Senate side giving closed doors briefings for the last week to members trying to explain exactly what they need. A hundred billion dollars for one point five trillion dollars is the request from the Pentagon overall. They've got a couple of things that they must do. And of course, they still want a farmer's bailout.

23:06So there's a lot that they're going to try to insulate the president from in the fourth quarter. It's going to be risky from here, not just going into the election, but after the election and then for the next two years. Stay with us. More from Bloomberg Surveillance coming up after this.

23:41point 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. Growing a business is ambitious, and ChatGPT can help you do it with confidence. Get started at chatgpt.com. The world of business is constantly evolving. Every day, new challenges, new opportunities, new ways of working. Comcast Business keeps you totally in step with secure AI-backed networking built to power the way modern business gets things done today in more than 100 countries around the world.

24:21That's some serious muscle. And get this, Comcast Business powers over 90 % of the Fortune 500 and millions of small businesses. Behind it all, network engineers, cybersecurity specialists, support teams, thousands of experts answering your call at 2 a.m. like it's 2 p.m. Always on, always ready. That's a lot of coffee. One partner powering how business gets done for companies of every size all around the globe. When you add it all up, no one does business like Comcast business.

25:00You'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. All right, Jess Benton, sitting in for Tom Keenum, Paul Sweeney. We're live here in our Bloomberg Interactive Broker Studio in New York City. I mean, you can work in San Diego if you want, but please. I mean, there's no character building in San Diego. It's nice every day. You don't get nor 'easters. You don't get snow. I feel like it's looking pretty good right now. Exactly. Our next guest, he's the smart one in the room.

25:32Rich Steinmeier, he's the CEO of LPL Financial. He's based out there in San Diego. Rich, I mean, LPL Financial. Talk to us, just describe what LPL is, because I think a lot of our listeners probably know of it, but they're not really sure. Yeah. Buy Assets, we're the third largest broker dealer in the US. There you go. So you go Morgan Stanley, Merrill Lynch, and then LPL Financial. We largely are oriented to support independent financial advisors. So we have over 32 ,000 financial advisors that affiliate with the firm,$2.6 trillion in assets under management. Boom. There you go. And you guys advertise with us.

26:05We appreciate that. Talk to us about AI and how that's going to impact your business. Yeah. I mean, first, I think it's going to raise the level of advice that's delivered. So we work through financial advisors, pure play wealth management firm. Advisors, by and large, have a standard of care that they deliver, but sometimes it varies by the size or complexity of their clients. And I think what you're seeing in AI is it's kind of rising the ability for those advisors to serve universally, consistently, higher, deeper levels of personalization and advice across their entire book. And so I think we see it impacting advice delivery, impacting the efficiency of the way we deliver the business.

26:43And then we do a lot of building our own capabilities. And I think the efficiency in building the capabilities is one area where we see material improvements, at least in the early stages. I've been crunching some numbers since we're at quarter end here on Wednesday. And I was looking at how the stocks relative to the Nasdaq 100, it's on pace for its worst quarter since 2007. But obviously, potentially some mean reversion going on there after chip stocks had their best quarter ever in the second quarter. So how are y 'all positioning when it comes to AI? because there's so many different fractions within it.

27:14And what are you buying? What are you selling? Yeah, I think the way that we think about delivering some macro-level advice into our advisors, who ultimately are the folks that are making those calls for their clients, is you can play that through many different... There are many different ways to play the AI trade, right? So you can play it through the hyposcalers. You can play it through chip manufacturers. But you can also play it through core materials as well as infrastructure. And I think that's one where we see a lot of different exposure. and, in fact, areas where you can broaden the diversity of how you play into the AI trade.

27:45So the infrastructure. Yeah. So why would an advisor leave a wire house like a Morgan Stanley, like a Merrill Lynch, and go onto the LPL platform? What's a typical reason that that happens? Yeah, usually you're looking for independence. You're looking for making your own call. You're looking for owning your own business. Think about this. Our advisors, by and large, are 1099s. And so that means that they're running their small business, means that they get capital gains treatment when they sell their greatest asset, which is usually their business itself. Greater flexibility. Sometimes you find in branch structure that you're often beholden to the manager, the branch manager, even the firm's direction.

28:23There's greater flexibility in how you actually affect your business and how you deliver advice. What corners of the market across all asset classes are you avoiding? Do you not want to have additional exposure to right now? Yeah, I think the areas that we think about where we're looking to make sure that folks are playing into long-term investing. I think we're looking at long-term investing. And I think where we see volatility driving up towards the midterms, I think we look to see folks playing in a kind of a buy and hold scenario and looking towards kind of core sectors. So scale, you're one of those businesses where scale matters, I would think, particularly given some of the investments that the industry and advisors have to make in technology.

29:11How do you do you guys have the scale? You mentioned your number three here. Is that a good place for you to be relative to some of the big wire houses? Yeah, I think when you think about wealth management and across a lot of different sectors, what you see is that the investments required to stay at the forefront of what technology capabilities are is increasingly demanding large scale. And so, in fact, we've been we've moved quite quickly. I joined eight years ago. We had 600 billion in assets under management. We're now 2.6 trillion. Our ability to make investments has expanded dramatically.

29:41And I think it is critically important for us. it's about capacity to invest plus flexibility to allow folks to run the business exactly the way that they want to run the business. What's your call for where stocks are headed for the fourth quarter? I think we look at the S &P 500 and say our call is that we're at where our full year target is. And so I think we'll see some sideways movement. But I think we're cautiously optimistic on equities, but I think we don't think that there's a big move. Alternative investments, is that something your guys are interested in pushing to their clients? Yeah, I think what you see, and it's occurred over the last five years and it's continuing to drive, but is this change in the traditional 60-40 portfolio asset allocation into more of a 40-30-30.

30:23And so you see increasing exposure into alternatives. There's a lot of burst of product availability and more advisors are bringing that into the portfolio construction. And so by extension, you see demand out there for end investors as well as through our advisors. Rich, you're going to stay with us for a couple of minutes. came all the way from san diego we're going to get some more time with you but we're gonna get this market open here today this is rich steinmeyer ceo of lpl financial he'll stay with us here futures pointing towards a negative open here but i hear the bell that means the boys are off and running here as they say sap down 30 in the futures market let's go to alexis christopher's for a opening all right thanks paul and as we know stocks have been under pressure all morning long as oil and treasury yields climb on concerns about higher inflation and the need for possibly more interest rate hikes.

31:13The S &P 500 down 34 points to start our week, a loss there of four tenths of one percent. Dow Jones Industrial Average going to start the day down 370 points, or about three quarters of a percent. And the Nasdaq down 132 points, or half a percent. Nasdaq 100 down 180, or about six tenths of one percent. Yields are still elevated. They have been throughout the morning. The 10-year yield up seven basis points at 5.23 percent. 30-year yield at 5.54 percent. And the two-year yield up six basis points to 4.92 percent. We have got Brent crude off its highs of the morning now up about 2 percent to 106.61 a barrel.

31:52WTI crude up 2 percent to 94.38 a barrel. Strength in the dollar resuming here with the Bloomberg Dollar Spot Index at 12.15.30. Bitcoin down more than 1 % at$83 ,500 and spot gold at$4 ,139 an ounce. Want to bring your attention to NVIDIA. That stock up 2.5 % out of the gate after the chip giant boosted its share buyback by a record$150 billion. That's your Bloomberg opening bell report. Paul and Jess. All right, Alexis. Thank you so much. We appreciate that. Jess Menten sitting in for Tom Keen. I'm Paul Sweeney. We're live here in our Bloomberg Interactive Broker Studio streaming live on YouTube as well.

32:27We're joined by Rich Steinmeier, CEO of LPL Financial. Rich, I think from the wealth management business, I know one of the overriding or overarching themes is this wealth transfer from the baby boomer generation to the next generation. The numbers, I'm sure you've got them, but are just monsters. How do you guys at LPL kind of position your team for that? Yeah, I think a lot of times what you're looking for is the ability to have connectivity across multiple generations. And I think that's how advisors are looking at that, which is, can I establish and build rapport with the next generation? And can I make sure that they're educated and there is a relationship?

33:04We obviously see that that is a big macro trend, which is the transfer of wealth. And so the question becomes, how do you make sure that you can prepare not just the existing generation, but the next generation to be able to responsibly inherit that wealth? Just a red headline crossing the Bloomberg terminals. Get that out there. Mongo's shares sink 26 % after the CEO steps down to join Meta. You don't see that very often. That's a big move here that we're seeing ahead of the opening bell. I'm curious when it comes to your clients, if they're willing to give up their high flyers and their winners just left to take profits toward the end of the quarter, or if they really have no signs of willing to let go of any of those just yet.

33:46Yeah, I think we're seeing that folks, Because again, our arc so often is across a long-term investing horizon. And so you don't see a lot of profit taking that occurs with those high flyers. I think more often than not, what you're seeing is a balanced portfolio. And there is, you know, you're looking at tax loss harvesting as well as you move towards the end of the year. But I think you see folks holding on to those high flyers for now. Just real quick, your advisors, how do they attract younger investors that maybe are more, hey, I can do it all with technology. gee, I don't need somebody here.

34:18How do you approach those people? Yeah, I think you often see, and in fact, I think you see it in the data, that as folks acquire wealth and as they move into more complex situations, there's a point in time where they're looking for professional advice. And so I think the advisors are in the marketplace making sure that they're connected. But as you get to those pivot points, you're getting married, you're having kids, or you're ascending through the workforce, you'll see the relationship connectivity really be established there. This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, and anywhere else you get your podcasts.

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