Program and guest
Haslinda Amin, host of Bloomberg Insight, speaks with Ed Yardeni, president of Yardeni Research. Original English title: China Stocks Surge As Blue Wave Sinks Korea's Heavyweights. The subtitles cover 0:00–96:32; this article covers only the Yardeni interview (7:30–27:07) and does not cover the other guests' segments, including BNP Paribas's Bigos on China's economy starting at 29:38.
Key points
- A sharp drop in oil prices will ease inflation and reduce pressure on the Federal Reserve to keep raising interest rates, with bond yields falling accordingly. 8:11
- A 5% yield on the 10-year Treasury is in the normal range, not high, and a 5% coupon is very attractive. 11:41
- Under the Fed stock valuation model, a 5% yield on the 10-year Treasury corresponds to a forward price-to-earnings ratio of 20 times, while the current ratio is only 18.5 times, making stocks look cheap relative to bonds. 14:16
- Political constraints and a discerning bond market have put speed bumps in the way of the AI buildout. That is a good thing, because spending and borrowing had previously been moving too fast. 16:52
- The bull market is broadening: the S&P 493 has outperformed the Magnificent Seven this year, and the Russell 2000 correction is over. 17:55
- Foreign investors made net purchases of approximately 800 billion US dollars in US stocks in the first 10 months of this year, a record high. 24:26
Background and notes
This edition of Bloomberg Insight is a daily program featuring multiple guests. The subtitles cover 0:00–96:32; this article covers the Yardeni interview from 7:30 to 27:07 and does not cover the other guests' segments. Views and timestamps are paraphrased from the original subtitles; each timestamp marks the start of the corresponding passage.