Single Best Idea with Tom Keene: Ian Lyngen & Robert Schiffman
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Bloomberg Audio Studios. Podcasts. Radio. News. Single best idea on an odd Monday. There's no other way to put it. Odd for the news flow. Odd for the immediacy of the news flow. Which is through the weekend news and then overnight, Tokyo opening, the Asian markets, news, Taiwan dollar, explodes in strength.

And beyond much more than that, just other news. So it's a clumsy, clumsy Monday. We demanded clarity. Thank you, Dana Telsey. Really appreciate her coming in on the state of retail in America. Very, very informative and fluid and uncertain is the future for retail today.

America. Ian Lingen was in, without question, our Global Wall Street interview of the day. Ian Lingen here on the bond market. He looks for the 10-year yield out there to move from the 4.30 level down to 3.6%. Let's listen.

I do think tariffs complicate the calculus for lower rates, but I do think that the Fed is ultimately going to start the process of normalization again, but not until we've got greater clarity on what the trade war really means. And I do think 10-year yields in this year at 365, implicitly because the president keeps changing the rules or changing the trade dynamics,

It's very difficult to estimate what this all means for core PCE and therefore the Fed and the trajectory of the economy. I think the one clear takeaway is that there has been a concern raised about the dollar's status as a reserve currency and whether treasuries are still flight to quality assets. And the recent price action suggests that those two still hold for the time being. But that's going to be the major question for the next several months. Ian Lincoln with us there from BMO Capital Markets. Sometime news comes out.

You expect it. You've been waiting for it. That's the case with an Apple debt offering. I've been waiting for it about nine months, two years since they did their last offering. It's a tranche of four. At this taping, unknown what those levels will be. And I'm sure it'll be price up, yield lower and very near average.

a treasury yield. We are so advantaged at Bloomberg Intelligence to have Robert Schiffman with us and his team looking at corporate paper. He published immediately on the known and the unknown of the Apple transaction. Here, Robert Schiffman of Bloomberg Intelligence. It sort of goes back to my early days at MathCamp. Their weighted average cost of capital is dominated by their cost of equity.

which is about nine and a quarter percent. And their weighted average cost of debt is effectively zero when you have a $3 trillion equity market cap,

cost of debt is nothing. And that's why they keep a hundred odd billion dollars of debt on the book. So it makes math sense to borrow money and buy back more shares or give it away in dividends. And that's what they do. The real issue with Apple is they have a problem and their problem is they make too much money. They have a hundred billion dollars of annual free cashflow. So it keeps

flowing in. So what do they eventually do with it? Well, they give it away. But, you know, you borrow a little bit at a time. And for Apple, that's five or ten billion dollar chunks. Robert Schiffman, on short notice there on the Apple transaction, look to our Bloomberg Intelligence team and also to Bloomberg News for the publication of that transaction, Always Anticipated.

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