Bloomberg Surveillance TV: December 15th, 2025

So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business. IBM. Get the news you need in just 15 minutes. Start your day with Bloomberg Daybreak, the podcast with a global view on the stories that matter. I'm Nathan Hager. And I'm Karen Moscow. Join us each morning for curated stories on current events, politics, business, and foreign relations. Plus one conversation on the day's biggest developments, all in just 15 minutes. Subscribe to Bloomberg Daybreak for a precise, thoughtful take on the stories that matter. Listen to Bloomberg Daybreak each morning on Apple, Spotify, or anywhere you listen. Bloomberg Audio Studios. Podcasts Radio News.

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferro, along with Lisa Abramwitz and Anne-Marie Hordern. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9 a.m. Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business App. Stocks trading near record highs once again after Friday's AI pullback. Sarah Hunt of Alpine Saxon Woods writing, we think this illustrates a level of concern from investors that there is too much spending on the horizon and not enough cash flow to fund it. Sarah joins us now for more. Sarah, wonderful to see you. Thank you for being here. Good morning. It's great to be here. So is it enough? Fear. Is it enough skepticism to make you actually interested in AI once again, or does it need to go a little bit further? Well, it certainly seemed like enough last week. I mean, there was some big moves last week, and I don't think the market, I mean, you look at Broadcom's earnings and the numbers themselves were very good. It's back to the expectations problem and the second derivative problem, which Cameron just mentioned, which is what happens when you're still spending a lot of money, but you're not spending it quite as fast as you were. And the more you spend, the bigger that the problem of large numbers comes in. And can I go 10? on every 10% or 20% every year, every year. And I think that's an issue. And now people are starting to question, where is that money coming from? And it wasn't, that question didn't happen in the beginning. And you've got some real issues with companies that used to be cash rich now getting more asset heavy. And I think that that's a little bit of... an absorption issue for investors right now. But have we gone a little too far with this with the idea that Microsoft and Google really are going to face some sort of insolvency risk or some sort of serious existential question because they're borrowing a bit from the bond market, right? I mean, have we sort of thrown the baby out with the bathwater to use John Sulphus's term, given the fact that people seem skeptical more broadly of the promise that they embraced two weeks ago? I think that that is just indicative of what we've been living with for the last several years out of the pandemic, which is narrative ships every day. And yes, the pessimism gets wildly bad and then it gets wildly fantastic again. And this is why I wouldn't say that this is a moment where you have to go, oh, my goodness, we have to change everything. But you have to think about who else might benefit and how that's going to go. And I actually think that even the story about the CDS for Oracle, I think that's much more about hedging the stock than it is about actually thinking that Oracle's not going to pay its bonds back in the end. a lot of this is the mechanics of how that spend is going to come about. And I don't think it's really challenging the fact that money is going to get spent. I want to say that Group Think is great, but I want to pick up on what you just said there, which is we have all of these narrative shifts, doing narratives. What does that say to you just about conviction, investors' conviction, in this, not just this trade, but in the prospects of AI generally? It is difficult to have because it's hard. I mean, the conviction that AI is going to be a big thing, it's going to make a lot of changes, I think hasn't changed. What those changes are going to be, who is going to benefit from those changes, and how fast they're going to be implemented seems to be a big part of the current concern. It was easier to say at the beginning of the year we see a ton of spending on infrastructure. There's still going to be a ton of spending on infrastructure. But now that that's getting questioned, is that the peak of infrastructure spend discussion. Now do we have to look at use cases and who's using it and how they're using it and is this?

going to improve margins? Because in the end, that's what it all comes down to. Is it going to make people more money? Because if it isn't, then it isn't going to raise earnings, then it's less exciting than if it is going to raise earnings. It's December. I'm in a retrospective mood. Perhaps you are as well. You mentioned that that question wasn't being asked at the beginning, which was how is all this is going to be paid for? Is it going to be cash? Is it going to be debt? What do you make of that in hindsight now, the fact that people weren't wrestling with those questions to begin with? I think with every big investing enthusiasm, there is a willingness to suspend belief about whether or not and how things have to happen to get to the point where everyone's excited about. And I think that it doesn't mean that we won't suspend that disbelief again, right? So there's going to be some technological changes. I don't see how you get the molecules and the electrons to as many data centers as we have. So I think that there will be changes. And those changes are going to occur in ways that are right now difficult to parse. So you don't know who's going to win and who's going to lose there. I think it was very clear at the infrastructure beginning, who was the winners? And now it's like, okay, who's going to win now? And are the winners really over, or is that just something that isn't going to grow as fast? Yeah, the conversation over the weekend was you almost need bubbles to fuel technological advancement. I mean, I know that that sounds really strange and perverse, but there is a sort of element of you need to finance absolutely everything. Is there sort of this feeling that you need to see the broadening out in the trade, the idea that other companies benefit from AI to keep the AI machine chugging, right? In order for people to justify valuations where they are in the big tech giants, you need to see participation on a broader scale. I think you absolutely need to see that participation. And I think that that was a question even earlier in this year in the beginning, at the end of the last year, which was who's going to use this? And then Walmart came out and said a few things about how it was helpful for margins. And other companies came out and said, yes, we can use it this way and it's going to be. And that sort of solved the short term problem. But longer term, that has to broaden out. And this is also the question about small caps. Can they use this? to make some margin improvements because the small cap earnings revolution was supposed to happen two years ago and then last year and then this year. And is that really going to come through? And I think all of those things are very important as we go forward and where valuations are right now, it's even more important. This is where the economy starts to matter again. This is where all of a sudden when we were talking about how anything related to AI could be in its own universe and the economy could keep sort of dragging along and basically being in a recession if it weren't for that AI investment. At what point can you see this expansion, this broadening out, unless you... see economic data like what we're going to be getting this week really pick up? It's interesting because I think that the government shutdown has not only made the data that's current difficult to see what happened just recently, but it also may have shifted some activity into next year. So it's going to be interesting to see that. You do have to see an economy that keeps struggling along. If it doesn't, you're going to have a problem. There's no question that that's going to be an issue. That's an issue for earnings, earnings lead to valuations. And that's the circle that investors are looking at. Speaking of circles, let's talk about circular investment and your sort of thoughts on that right now. I mean, we can't have this conversation about AI without going back to that. And I'm curious how worrisome that is to you. Have you been sufficient, have your worries been significantly or sufficiently assuaged by these companies saying that it's not a big deal? not sure that I can say one way or the other it's definitely not a big deal or it's a huge big deal. I know that in 2000 there were a lot of issues with vendor financing. It was quite simple, right? The companies were selling stuff and they were financing. Are these synonyms? Can we say circular deals and vendor financing are the same thing? I don't think that you can because I think that there are some of the players in that circle have much more cash than they did before. So last time it was vendors financing who didn't have the cash to companies who didn't have the cash. Now there is cash in the mix and there's quite a bit of cash. And that's where you're seeing the have and have.

nots on the tech side of who's cash rich and who's not and who are people concerned about whether or not they're going to raise money or not. Again, I don't think that Oracle anyone's concerned that it's going to go bankrupt, but I think that there are concerns about overburdening balance sheets right now. Lisa brought us to the economy. Let me go back to that sort of pull us away from that. They're just for a moment. But I'm curious, how do you think about growth in the year ahead? Are you, to borrow a phrase from Peter Scher, not sanguine about it, or are you feeling like prospects are good, things are going in the right direction? I think it's tough because the case. shaped economy is a real thing. People who are spending the most money or the people who have the most money, the lower end consumer is not doing well. A lot of the companies that track that are not doing well. And I think it's going to be, that's really a question now, how much have we overstated jobs, right? So in Jerome Powell's conference, he talked about some of those overstatements. And maybe instead of generating jobs, we're losing jobs every month. How much is that really occurring? What can we see and what do wages look like? Because all of those things matter. It's great that the high end can spend, but you really need for full economy to chug along, you need broader participation. Yeah, which is a reason why everyone's watching and hoping for this broader participation in the equity space. Sarah Hunt of Alpine, Saxon Woods is with us for the hour. Stay with us. More Bloomberg surveillance coming up after this.

Get the latest headlines from our nation's capital every weekday. Hi, I'm Joe Matthew. And I'm Kaylee Lines, inviting you to join us for the Balance of Power podcast. Every weekday, we deliver unbiased insight and analysis on the latest news from the White House and Capitol Hill. Along with in-depth conversations with lawmakers and the people making policy and shaping our world. Get the straight story without the spin. Listen and subscribe to the Balance of Power podcast on Apple, Spotify, or anywhere you listen. Here's the latest. President Trump telling the Wall Street Journal he's unsure his economic policies will lead to midterm wins. An NBC news poll showing the president's approval rating down to 42% as economic concerns weigh on Americans. Henrietta Trace of Veda Partners joins us now for more. Henrietta, how do you sort of view this interview in the Wall Street Journal in particular with President Trump, where he's saying that people just haven't felt the ramifications or the benefits from some of his policies? Will that actually make any headway early 2026? Yeah, that's absolutely true. The one big beautiful bill went into effect immediately for corporations. Indeed, we've seen that corporate tax revenue has dropped by about a third into federal coffers this year. That's because of the tax preferences that went out very quickly after they passed that bill on the corporate side. The individual side is back in, loaded, and starts in the new year when the tax filing season starts. So when you think about... the odds of a reconciliation bill 2.0, for example, or the $2,000 tariff rebate checks, for example. That requires another act of Congress. And as far as the White House is thinking about it, and indeed, when I talk to Republican staff on the House and Senate side, they're saying, you know, we already did the individual tax cuts. You just haven't seen them yet. So when Kevin Hassett comes out and says, 2026 is going to be a boon year for the consumer and individuals. It's because the tax preferences that hit the individual side of the docket really start in the new year. So if you are really looking forward to the salt deduction, that's coming for you. There's a really small segment of the economy that's on the no taxes on tips, no taxes on overtime piece. That all starts in the new year. And they're hoping that that's going to be enough to overcome the continued hit of tariffs, the continued negative narrative around affordability and the high cost of living. housing, health care going up by $1,000, et cetera. We'll see. Henrietta, as you talk to staffers on the Hill. I'm curious what they want this president to be doing. So you lay out very clearly sort of the benefits that will be very evident, I imagine, to the American public here come in the new year. What do they make of his emphasis on immigration on foreign policy, him not talking about affordability? What would they like him to be doing more? And what's the reaction to him not doing more on that front? It's a real mixed bag with the same answer. Get President Trump on the campaign trail. And for Republicans, they really want to see that because the majority of the new voter turnout of the last decade of sort of the MAGA base, they're here for President Trump. They're not here for your average run-in-the-mill rank-and-file Republican. So those members really want President Trump to come to their district, come on the campaign trail. You know, they would have liked to see him more in Tennessee, for example, a couple weeks ago, to boost the numbers because he is a turnout generating machine. And there's a lot of anxiety on the Republican side about going into a midterm election cycle where the president.

himself, who is highly popular with the Republican base and MAGA voters, is not on the docket. Those voters tend to not show up in a midterm, which is why you saw such a shalacking for the Republican conference in 2018. They don't want to see a repeat of that, so they really want Trump to get on the campaign trail, come rally their voters and get the turnout machine. Unfortunately, that's what Democrats also want because they know that Republican voters that are to the court of President Trump are more likely to stay home. And the majority of Americans now have a negative view of the Republican Party's handling of the state of the economy, inflation, prices, housing, and health care. And those are the top five issues of voters going into the midterm cycle. So Democrats similarly want President Trump to be front and center. So it's really a tough road to hoe for the Republican conference and for President Trump in particular. He's got to get out there. He's got to talk about affordability, but the more he talks about it, the more it helps Democrats. So it's sort of a catch-22. Good morning, Henrietta. So what of all those things that you mentioned, it seems to me that one of the most important things to try to nail down right now is healthcare, because you can't really change a rise in price levels. Whenever you do about further height doesn't matter as much as changing what's going to happen now with those subsidies. And this is a train wreck that's been coming and pushed off and pushed off and pushed off. Is there any, do you think that they can get something done in a time frame that's going to be meaningful? And do you think that there's enough bipartisan anything because everybody is going to be affected by this? How does that look in your opinion? Yeah, I'm not shy about making projections. There's no chance that they fix Obamacare before the end of the year. So we're going off the cliff. To put it into perspective, that's 22 million people that are going to be hit. Four million people will lose their insurance. If you're 60 years and older, your premiums are going up by almost $1,000 in the new year. That's going to happen. There is this period of time between January 5th and January 30th where they could find a solution. Our odds are pretty slim. My colleague Spencer Perlman is our health care expert, and he's now down to 25% that we get any two-year, one-year extension of the ACA subsidies. And you can hear it from Republicans in the United States Senate who saw this train wreck coming, as you rightly point out, and consider this, you know, a subsidy that needs to expire. We have a $38 trillion debt load in the United States. Let's cut this and make sure that it is not extended. Unfortunately, when American consumers look at Republicans speak to the health care issue, we're now on year 16 of not having an alternative to Obamacare. So that leads to an erosion of trust within voters of Democrats and Republicans alike around the entire concept of health care for the Republican conference. Former Speaker Boehner had the best quote the other day. He basically said, all these meetings with Republicans for a decade now. And we've never all been on the same page. And so as long as that's the case, you're not going to see a fix. And we'll go into the new year with that one. Stay with us. More Bloomberg surveillance coming up after this.

Pugia's free room of Barclays writing, we expect non-farm payroll and employment flat in October and up 50K in November, providing further evidence that the labor market is not slowing but not breaking. Pugua Sri Ruma of Barclays joining us now. Pujo, great to see you. Thank you so much for being with us. Thanks. So just looking at slowing but not breaking, what's the difference between the two? How narrow is the gap between slow and between broken? Yeah, I think that's a great question. I think we're getting close to the point where people, ourselves included, are seeing risks clearly to the downside. But in terms of breaking, that is a world where you expect labour market slack to shoot up. you know, pick up very rapidly and that's not something we're seeing either in the official data or in some of the other statistics like, you know, think about job openings and the separations rate there or jobless claims data. So it is a labor market which for a while now has been stuck. You know, we're not hiring, but we're not firing as much. So there is very little dynamism. Risks are to the downside. But we still think we're not at that point where we're ready to fall off the cliff. Well, I guess I'm wondering if we're at an inflection point of sorts, or maybe we've been grinding along, we could be heading toward an inflection point. Why wouldn't it be to the upside? Because we have seen smaller businesses really pull back in hiring. The hiring has been concentrated in the larger companies. If they get some stimulus, if there is these rate cuts that kind of start percolating through the economy, why wouldn't we see a pickup in hiring rather than sort of the other way around? That's a great question. And I think that's a very feasible scenario to keep in mind, just given, you know, we are quite constructive about growth into 2026. We're seeing a lot of positive impulses that could keep the economy highly supported. And in that world, yes, you could have a labor market that actually stabilizes. In fact, our own forecast, official forecast, the labor market looking quite resilient in 2026. And we have the unemployment rate coming down. So I think we really subscribe to that view that there is a world where the labor market stabilizes and eventually starts to look better. But given where we are now, I think it's reasonable to also see that risks could very well be to the downside. It would take very little to push the labor market in the opposite direction. I'm curious how you think about the legacy of what we have been through here with this government. down the delay of data that we hadn't seen before. And all the while, there was this conversation about what might be a decent substitute for the data that we weren't getting from the labor department. How could we get as good as sense as we could about the state of the labor market in light of not having that data? Now that we're beyond it, I'm curious of what we've learned about how good a sense we have of the jobs market in this country. We heard from the Fed share suggesting perhaps there are more fundamental problems with the way that these job numbers are collected and counted. How are you thinking about what we've been through? Absolutely. So I would say this, that the government shutdown basically brought to the forefront, the fact that we are highly, highly reliant on official statistics. And there's a good reason why. We have very talented statisticians.

who've been doing it the right way for a very long time. But at the same time, I think it also... expose the vulnerabilities of suddenly not having these data, or now we're in a scenario where the data could be clouded in some sense, right? To answer your question, we have looked at a dashboard of indicators which are quite useful and are reasonable alternatives to get a gauge of where the economy is headed. And, you know, these come in different shapes and forms. You've got job openings data. You've got job postings, some of them about hiring. So it gives you a decent picture of where... where things are, but we still don't think those are enough to substitute the official statistics. I suspect Lisa's going to ask about inflation a moment. Before we get there, let me just ask you about the Fed speak. By that obvious. I'm sorry. That Mike was mentioning all that we're going to hear from. And I'm curious, what are you listening for in specific? We've talked a lot about the silent dissents, the quietest sense that happened at that meeting. What are we likely to learn from kind of panoply of speakers who are going to be giving remarks and interviews over the course of the week? Yeah, I think the one thing that stood out in the December FOMC meeting is just how divergent views are within the committee. I mean, if you just look at even the dot plot, for example, in 2026, seven participants felt that it's appropriate to hold rates steady where they are now. So I think going into this week and also just beyond this week, we want to get a sense of who's thinking how. For example, we did hear from Goolsby that his dissent was to some part tied to the fact that he didn't have enough data to go by, right? And so that gives you some insight into, I guess, what he's looking for. And, you know, we're likely to get similar insights from others. And I'm sure, like a lot of other Fed watchers, we'll be trying to, you know, we're trying to place them on the dove hawk lineup to see exactly where their minds are at. And to give us a sense, really, of what the reaction function is for each of these participants. Over the weekend, San Francisco Fed President Mary Daley put out a blog post, and she was talking about why she supported cutting rates the last meeting. She talked about how, yes, it was a very difficult decision because there is this dual mandate that's very much in conflict. She was talking about inflation. Yes, I was going to talk about it, and how it has been really punitive for these families. But she said, how you get down to 2% matters, because if you get there too quickly, you break the labor market, and then you've got families grappling with both above average. inflation and potential job losses. Do you think that there is this theory right now presiding over the Fed to run the economy a bit hot, especially at a time of technological transition, with artificial intelligence posing some existential questions around the labor market in order to avoid some sort of labor market scarring at the expense of inflation not getting down to 2% any time in the near future? Well, this is what I think stood out to me in the December press. There seems to be this view in the Fed that inflation is really not a problem right now. In fact, Chair Jerome Powell's own comments on inflation is he's quite sanguine about it. I think in some part of the press, he did think that inflation, you strip it out of all the tariff effects, is somewhere in the low twos. Then he mentioned something about productivity, also likely to support the economy. So if you sort of put all those views together,

I think there is this view out there among the Fed participants that inflation is perhaps not a problem to be concerned about and what they need to be concerned about right now is the labor market. That's perhaps what Mary Daily is also subscribing to in some sense. My own take is I think it's a little too premature to think that inflation is going to take care of itself. We at Barclays have been saying for a while that we are yet to see the full effects of tariffs on the inflation data. While it may be a one-time price shock, I think it's a little too early to declare victory on inflation yet. Stay with us. More Bloomberg surveillance coming up after this. Join us for Bloomberg Power Players on September 10th in New York. Set against the backdrop of the U.S. Open Tennis Championships, Bloomberg convenes the leader shaping the future of sports business. From athletes and team owners to commissioners and investors, hear the market-moving conversations driving the multi-trillion dollar sports economy. Register now at Bloomberg.com slash powerplayers radio. That's Bloomberg.com slash powerplayers radio.

Keith Lerner of Truist writing, we are still positive tech longer term, but in the near term, there is a lack of a catalyst for the sector. So investors will need to be patient, investors known for their patience. Keith joins us now. Keith, thank you so much for being with us. I just want to start there. I mean, do you think that this sell-off that we've seen or underperformance, I should say, probably putting it more fairly in the tech sector, is something that can persist for a longer period of time, or is just sort of like an end-of-the-year melt-off, given how much it's been outperforming? Yeah, well, first, great to be with you. I didn't realize it was actually last full trading week of the year. So that's exciting in some ways. So to your point specifically, Lisa, I still think tech is long-term leadership, but. To your point, we went up off the lows about 70% versus 35% for the S&P 500. And now you get all these different questions as well. So I just think it's a point where, you know, that we have to kind of rebuild that wall of worry, which we're doing. But at the end of the day, the earnings momentum for the tech sector is still the strongest one out there. So I think in the near term, I think the challenge is what is the catalyst to move this up? Because, you know, we just went through earnings season. People are focused on obviously Oracle in video. comes out with some news about some more chip selling to China. It's not moving it. So I think it's just maybe a digestion phase. And I think, you know, next year at some point, maybe that's three months or six months from now. We'll see money rotate back into it. And when we look historically at bull markets, maybe my final point here is... The leadership of a bull market tends to endure towards the end, notwithstanding periodic pullbacks and rotations. We're seeing one of those rotations right now in this kind of broadening theme. And I think that boarding theme, at least in their term, has a bit more to go. You sound somewhat skeptical of it long term. Is that correct, Keith, that this broadening theme maybe is a short term blip, but not necessarily a 2026 full-year trend? No, I think, you know, at least if we were here a year ago, I think the theme was very similar about this boarding theme. It didn't work out. But no, I do think next year there's more of a reason that we couldn't see more boarding. So I think a lot of times people think about it's tech. or X. In our view, it can be both, especially as we have these sharp rotations. But, you know, the good news, I think, as we think about the Equalweight Index, we came into this year around the 17 multiple. We're ending the year around the 17 multiple, and it's been mostly earnings growth. The key for next year is profit margin. And do we see the adoption and the profit margin start to expand for these 493? But I think, listen, in the near term, we all seeing some positive action. We had industrials breakout last week. The Equalweight Index, just made it 52-week high. Here's an interest in stat, guys. You know, the Equate Index is only up about 4% since the November peak right after the election. So almost more than a year, we're only up 4%. So, no, I think it has further to go. I just think it's both not either or. There's a tendency to have this kind of monomaniacal focus on the big tech names, the Magnificent 7 and the like. Do you foresee as you look into your crystal ball?

More eagerness to look overseas in the year ahead, of course, it's done, markets overseas have done extremely well this year in many cases. Are you looking more to Europe, for instance, in 2026? I don't know that we're looking more, but it's kind of a similar story. When we look around the globe, I just checked this morning 98% of the markets retract more than 40 countries around the globe. They're in uptrend defined as above their 200-day moving averages. So it's kind of that similar story we just had. It's like either or no, both. We still have a tilt toward the U.S. because that's where the innovation and earnings are there. And if we think about the last year, the U.S. underperform, but that was after, you know, in the prior year, the U.S. had outperformed by the since the 90s in 2024. So we have a bit of mean reversion. And almost all the increase in international was PE valuation, not earnings, and the currency side. So I think as we move into next year, we had a bit of revaluation. Currency has come down with the U.S. dollar. So I think both will do well. We're still tilting towards the U.S. on the margin. We've been kind of threading this needle over the course of the three hours this morning. Mike Wilson's note, Mike Wilson and Morgan Stanley Wright, but how we're now firmly back in a good as bad, bad as good regime. As you look ahead to this week and the data that we're going to get, how are you thinking, you're in agreement with Mr. Wilson? I think the market likes Goldilocks. I think we want an economy that is still, you know, kind of chugging along. We expect a modest uptick into next year with, you know, with inflation that doesn't get out of control, which we don't think it will. And interest rates that remain, you know, kind of in this range that it's been overall. So I would say. On the margin, you know, solid news is good news. I don't think we want either extreme. If it's something that's really much stronger to the upside for the economy, that probably means rates go up and that will hit maybe valuations. If we see a real weakening in the labor market continues in this divergence between GDP data and labor market, I think that's problematic as well. So I think, you know, we're using an analogy for our outlook, the seventh-hand stretch. I think we want something kind of in the middle between those two extremes. Do you think, Keith, that this market's fully wrapped its heads around the idea that we have seen the end of one of the biggest global easing cycles ever outside of some sort of recession? You know, it's an interesting question because it hasn't really come up a whole lot in conversations as I speak with investors. So I think that is, you know, a potentially of risk. And I think the other thing, you know, all things come back or all worlds lead back to the 10-year Treasury. As we think about next year, we still are positive. We think the uptrend deserves the benefit of the doubt. But going to your point about central banks, I mean, I think the key tell for next year and the risk factor will be watching is the 10-year, which, again, seems relatively contained at this point. But that is a shift. And I think just like

this past year, I think earnings will be the key. Again, we expect solid earnings, and we do expect those earnings to borne out as we move through 2026. When you talk about earnings, this kind of leaves us in the same place of, yes, bonds may offer a hedge, but maybe you don't want that hedge in 2026. Maybe you want to be exposed to the equity space and then on the short end of the yield curve at a time of yield curve steepening. I mean, how do you look at that kind of interplay, given the fact that people are expecting enough growth, an accommodative Fed, despite that ongoing growth, and this yield curve steepening that we have seen really start to reassert itself. Yeah, so overall, heading into the year, we do have a modest tilt towards equity relative to fixed income and cash. We're still overweight gold as well, which we've been overweight all year long. And then on the fixed income side, you know, again, going back to the analogy around baseball, we still look at... you know, fixed income as that consistent header, kind of collecting that coupon, you know, all in all over the last year where the equity markets have done pretty well, we are having, you know, a solid year in fixed income with, you know, high quality returning six, seven percent. And I think as we think about next year, we talked about this, you know, there's a lot of cross currents, there's a midterm election year. And there's a scenario where the economy is stronger than expectations, or there's a scenario where the labor market weakens further. And the latter one, you would actually want bonds. So I think going back to diversifications, kind of the simple diversification aspect, you still want to have bonds. Are they at a modestly lower weight? Yes, but I still think it makes sense. But we are pairing that with some exposure to gold still into the new year. Let's stick with diversification, so there's just market masonry building the wall of worry. As you look beyond tech, if you look beyond big tech, telecommunications as well, where do you see opportunities sector-wise here in the year ahead that might have been neglected in 2025? Sure. So where we were overweight tech and communications for most of this past year, and we still are, again, we're still positive long term. What we've been doing is making incremental changes based on this broadening theme. So, you know, over the recent months, we added health care. You know, health care is a sector where just, you know, a little bit of good news can go a long way. I know it's done better recently, but it's out of, I'm sorry, it's underperform the S&P by over 50% over the last three years. And that's a historic extreme. So you just get a little good news that can go. long way and we're seeing valuations attractive and some better fundamentals there as well. And then just last week, we upgraded industrials. Industrials was a hot sector early in the year. Since July, it kind of moved sideways, only up about 2%. It just broke to the upside of a five-month trading range. And as we think about this economic uptick that we envision and some of the benefits from the one big, beautiful bill, like accelerated depreciation, we think that's an area that should benefit as well. So, again, tech communications now paired with health care and industrials. And something else, we're looking closely out, not quite there to upgrade. You know, financials with that steep a curve that Lisa mentioned earlier are acting very well.

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