A lot of things going on at the index level, macrolevel. Look below the surface and there are some really interesting trends. 4. 88 . The reason for that, it has had to stop a kidney failure study that is being done early. That sounds like a bad thing. It is a fantastic thing, this thing is meeting all its goals early because of the success they are having with this drug which seems to be multiplying the number of things it can treat right now. Nova goes higher. If you are in the dialysis business, this is not good news. Down a little bit more earlier on. It is these kinds of clients that are providing some really interesting single stock opportunities right now. On the index level, we go nowhere. Alix something that hardly say, youre totally right and you can see that reflected here as well. Lets look under the hood for a second. Exxon is down by 4 , continuing to roll over here. Interestingly, one of the bestperforming stocks is caesars. You wouldnt think they would be doing so well at these light recession or a harder landing but there is a gaming expo happening in las vegas and apparently analysts are really pumped about what they said about las vegas, that it is still really moving, going all cylinders. That narrative doesnt really fit them when we to gmms ceo, when we talked about may be the economy having to slow. Guy absolutely, but thats the macro story. In order to get the market to move big in one direction, you need at least the heavily weighted stocks to be moving in the same direction. At the moment, everything is kind of canceling each other out. A big move that way, a big move that way. In aggregate, the market doesnt go anywhere. This start really kind of shows that beautifully. Look at where correlations are. Correlations are well below the fiveyear average as you can see down here. Definitely in the bottom, and that tells you that individual stocks are doing their own thing might now. Within the market, within the sector story we need to get a lot. The problem is that it is the hard to latch onto one of those traits for long and make money off it. Alix talk about m a trends. Now there is going to be erased to think the next target, for example. I talked to them about a potential consolidation. Shell companies cannot survive on their own long term. They are going to have to merge up, consolidate any part of diversified companies is my general opinion. This should happen in the next five years. Just is emblematic of kind of the story we are trying to focus on the our question today, can you pick stocks in this market . Can we figure out some of the trends that are going to be lasting enough to take advantage of . I am joined on set. Single stocks are doing quite a lot, bouncing around all over the place. On index level, you are not getting much volatility. Is this going to be the trend that persists for a while, and what would it take to change it . Alix i think what would change that is if we see a pickup in macro volatility. With people getting worried about the economic themes that affect the entire market again, i think that really is the question at the moment. We seen a big move down for the past couple of sessions but of course, that is driven by officials coming out and saying maybe we have done enough. But to what extent is that because we are meant to be worried about the economy now . Because recession coming back to the horizon is something that could affect many different sectors at the same time. Sounds like she is saying the macro is still the thing. Can micro finally win and you can pick stuff that is going to be ok for the end of the year . September we saw such drivers really got hit by assets pricing and higher for longer. I think weve seen some easing in that and you have more room for single stock stories to come in. I think going into the earnings season as we focus more on specific companies you are going to see a lot more of that. Earnings are going to create winners and losers and that dispersion is going to make people focus in on different symbol stocks. Guy energy stocks, everybody hated them, then they love them, then they hated them. If you look at the trend the story is creating, are these narratives longlasting enough for people to invest in them or is it simply in and out, day by day . Alix luxury is kind of europes big answer, answer to big tech. It is still considered pretty pricey. It was one of the bestperforming, and sales were a lot. Guy but is that something that is going to last, part of a trend . If you are trying to invest rather than trade, can you . If we have more disappointing reports like this may be, and the next few weeks i think that is going to be a persistent trend, especially if we continue to see yields pressuring what i recall being high data sectors and also if we see more economic about the consumers slowing down. In china, in the u. S. , europe. That is a theme that i see persisting. There are a lot of single stock stories they can be with you. With the alix when you pair that with the earnings season kicking off, im wondering how the macro overlay will affect the bottom up and the micro. At some point it has got to be about navigating the uncertainty. The focus is how resilient the economy and particular consumers have been. The focus here is like, are we going to see more the loans . I think what heather was alluding to is that we are already seeing some weakness at of the luxury sector, and that can be pretty worrying given that he has been kind of civilian throughout the pandemic and after that. The Chinese Consumer is not bouncing back as much as they expected. Thank you be a worrying picture given that we are going to enter a period where there is less rain volatility. I think anything that shakes up that narrative is going to be pretty detrimental. Guy at the moment, the majority of stocks moving in different directions. Within the market, a lot of single stock volatility. What would it take to get the shift over . What would it take for everything to move in the same direction . Does it need to be a macro trend . I just want to kind of see how this is going to work and how quickly he could unfold. The macro trend is probably it. Obviously when we are looking at indexes, a lot of it is driven by tech mega cuts. One thing i always found kind of funny when rates were going up, tech mega cuts did really weird well which is very weird given their high valuation. Especially with the ai trend, they are completely , given that most portfolios are now so heavily concentrated in these names. And you might wind up having the end of your windowdressing. We appreciate it. Coming up, more insight into the question of the day. Can you pick stocks in the market . This is bloomberg. Encore energy, americas Clean Energy Company poised for production in south texas, energizing america with reliable and Affordable Nuclear Energy fuel with an environmentally friendly extraction process. Encore energy. You have to look i think right now longerterm and to some of the areas that thematically are going to matter. Think about the Energy Transition and what just happened in the energy patch with merger, but also look longerterm. There is a whole area where people are talking about transitions but you are still going to have a long tail on a lot of these. Lng is going to become a bigger and Bigger Picture and i think if nothing else, some horrible things remind people that Energy Security is a real thing. Guy talking about the fact that there are trends, themes that you can pick stocks against that will last longer than what is in the markets right now. That takes us to the question of the day. Can you pick stocks in this market . Mark, great to see you. You are seeing a lot of movement in single stocks right now. Today is an example. The problem is that some of these trends dont last long enough to latch onto, and im wondering therefore, despite the volatility we are getting into, despite the movements, can you invest in those names right now and generate a decent return . When we are looking at a day like today where we see some names that are moving extraordinarily in one or the other direction, you do feel like you need to be very quick, theres very few lasting trends that we can hold onto. When we think about value prices, there is an element that goes into it. There are certainly Value Creation that can be done as well but we think of this is more of a tactical horizon. To think you have to be daytrading, i dont think theres trends, but also the broader economy that we can let trend two. I think there might be some changes on the Global Economy where they can be a bit more of a directional trend. Alix so it is still a macro world for you. So what are some of the trends that overlay the investment thesis . One of the most obvious ones is certainly that we are going to see the peak of Interest Rates and a very short amount of time, in our opinion. That is going to be one where we are going to see it being cut from a number of Central Banks this year. Winning is going to provide opportunities for fixed income investors in particular. It of course helps a little bit of time is when we see inflation rates coming down. We are going to see more about tomorrow. We are not far away from what the fed is targeting. He is suggesting that the tightening of financial conditions means we are not likely to see a lot more in the very short term. Guy i hear you are saying but in theory, a longer rent rates shouldnt be that sensitive. The movement that weve seen recently is not structural, it is about longterm deficits. It is about what china is doing, about a whole range of other things, and we still dont know the answers to those questions. How can you be so short the 10 year, the 30 year are really going to come down if the fed starts to signal maybe it is done and maybe starts to talk about cuts . Very valid point. If you think longterm duration, i think deficits in particular in places like the u. S. Hatch have yield levels that are much more significant which is going to be much more of a burden going forward. That is something that needs to be penalized when the market is starting to come back relative to normal level. I think there is a sweet spot if you go somewhere around 5, 10 years were received a good amount of value. Still very unlike any situation where we would see any potential defense, 500 countries like the u. S. And at the same time when we have trends both with inflation down, even with strong payroll numbers, underlying inflation pressures. Alix is that a signal to buy u. S. Stocks considering that on a relative basis, europe is not in that same position, or do you need to be neutral and equities with that perspective . We have been turning to light bonds a bit more than equities. Until they are a little bit away from some of the more expensive steps linked to u. S. And technology. They would be catchup potential in some cases that could be around the european consumer where everybody is urging the upn girls. How protecting portfolios in times of as well. Guy is the rate of return on the kind of strategy you are talking about, even over the next 612 months, is it going to be in excess of 5 . I will be honest and say i do think so. We think it is a return across both equities and bonds, likely to prove attractive. And for investors were looking at investment horizons, from the way that we construct and project, we do think there is more value in some of these portfolios along some of the major asset classes. Alix how much volatility do you think we are going to see . I hear you that a macro is going to be a driver. It is still tricky, how do you do it . What kind of volatility are you expecting from the end of the year when getting a clean read is really tricky . Obviously the conventional wisdom is there is always a lot of uncertainty to be had ahead of us. I would say i would have felt a lot more confident thing volatility was going up if you are in an environment where inflation is not undercontrol. Any Central Banks that can. While we are always thinking about going higher, i would have expected to go much higher if it wouldnt have had all parts at least easing some of. I think there is a reasonable way to think about both markets doing well. Alix we really appreciate it. Coming up, get back to that single stock story. The diabetes and weight loss drug is said to have success treating kidney failure. This is bloomberg. Thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh alix Dialysis Service providers are falling after a study that is mpeg is showing early signs of in kidney and diabetes patients. Walk us through what is going on, what are we learning . This is a phase 3 study of ozempic. These patients, 3500 patients were administered this. Essentially what they were looking for, does the administration of this drug delay the progression of heart disease, does it delay things like people dying from renal failure or cardiovascular disease associated with Chronic Kidney Disease . They specifically check patients who had been diagnosed already. What we know if the study was stopped because an independent Committee Said it already met some of the interim goals in terms of advocacy which suggests it was incredibly successful. We wont know the details until the first half of next year, but that is the overall finding. Guy so if you are in the dialysis business, what does this mean for you . This is not good for the folks in the dialysis business in the long term, certainly. In the near term, there are a bit more russians. Ultimately it means if you dont have Chronic Kidney Disease progressing, more people wont necessarily need dialysis. Dialysis is a huge extender of time and energy. They have to sit there for hours at a time. Son can do it at home but it is still an enormous amount of time and money so if you are in the business of providing dialysis or equipment for that, it is really bad and that is why we are seeing those shares fall. If you are in the Overall Health business it is a good thing because people arent getting to the levels of disease that kill you, frankly. Alix weve seen them talking about the reaction of what these drugs are due on their services. This is what these drugs are supposed to do, how people control their diabetes and help stop people from developing Chronic Kidney Disease. This isnt necessarily surprising from that end. What is surprising is going to be all the other things that could potentially be treated by these drugs for diabetes or for weight loss. Yes, weve heard from some retailers. Weve heard from airlines, analysts studying airlines about the potential to reduce fuel costs because people way less. Theres also studies of things like sleep apnea better going on. This has a broadbased impact, development. Negative implications of taking these drugs, this is clearly part of the health industry. Guy the impact that this drug is having at the moment, amazing to watch. You wonder whether this is one of the longterm trend that we could latch onto. Lets take a look at what weve got here. A day we see that in little bit earlier on. There is another drug stock doing well. We will deal with some more details a moment. The closes coming. This is bloomberg. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Hi, im jason and ive lost 202 pounds on golo. So the first time i ever seen a golo advertisement, i said, yeah, whatever. Theres no way this works like this. And threw it to the side. A couple weeks later, i seen it again after getting not so pleasant news from my physician. I was 424 pounds, and my doctor was recommending weight loss surgery. To avoid the surgery, i had to make a change. So i decided to go with golo and its changed my life. When i first started golo and taking release, my cravings, they went away. And i was so surprised. You feel that your body is working and functioning the way it should be and you feel energized. Golo has improved my life in so many ways. Im able to stand and actually make dinner. Im able to clean my house. Im able to do just simple tasks that a lot of people call simple, but when youre extremely heavy theyre not so simple. Golo is real and when you take release and follow the plan, it works. Guy im actually struggling to come up with anything useful to say about what is happening here in europe. London is absolutely flat. We saw those numbers this time yesterday. An index level, nothing to see here really. Lets talk through what has happened in terms of the session thus far. You got a brief glimpse of it. But look, really tight range. We might as well just have skipped over it. I want to show you the gap. One up by 5 , the other down by 7 . The dialysis business has already been impacted quite significantly by the expectation of ozempic having a significant impact. So the fact that we are getting even a bigger move today on the back of this kidney failure just speaks to the potential for ongoing damage. When are we going to see this all priced in . The numbers were out this time yesterday. It has been an ongoing trend. The expectation was that we were going to see week numbers. It just speaks to this multipolar slow down that we are seeing with the luxury story. China, the United States and now europe. It is all kind of coming together. To the strong get stronger . Maybe not. Do the strong get stronger relatively . That is when everybody is watching out for. That was today. Lets talk about tomorrow. Im going to get the oil report for alix. Really going to Pay Attention to that one. There are certainly signs that we are seeing cracks in the current story right now. Ecb minutes, i dont think we were allowed to call them minutes. And then sales and revenue for easyjet. Easyjet has had a pretty tough day today. But it has been a great summer. The question is what does winter bring . Alix winter is coming, as we joke about. Im not going there to europe unless europe goes to 103. There are some headlights headlines about activision and microsoft, so it looks like they will improve this deal in the coming days. Activision blizzard rising to session highs, slipping into positive territory. Microsoft up by about 7 10 of 1 . They need some tweaks to that deal to avoid a probe and it looks like th