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Merryn Talks Money

Melt-Up or Mirage? Markets Ignore Everything but Earnings

08 May 2026

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What is the main topic discussed in this episode?

0.031 - 21.338 Unknown

Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts than add supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. Learn how podcasting can help your business. Call 844-844-iHeart. Imagine an Olympics where doping is not only legal but encouraged. It's the enhanced games.

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21.778 - 32.41 Unknown

Some call it grotesque. Others say it's unleashing human potential. Either way, the podcast Superhuman documented it all, embedded in the games and with the athletes for a full year.

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32.97 - 38.577 John Stepek

Within probably 10 days, I put on 10 pounds. I was having trouble stopping the muscle growth.

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39.377 - 60.746 Unknown

Listen to Superhuman on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. On the Look Back At It podcast. 1979, that was a big moment for me. 84 was big to me. I'm Sam Jay. And I'm Alex English. Each episode, we pick a year, unpack what went down, and try to make sense of how we survived it. With our friends, fellow comedians, and favorite authors.

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61.046 - 63.168 Unknown

Like Mark Lamont Hill on the 80s.

63.188 - 66.092 Merryn Somerset Webb

84 was a wild year.

66.112 - 82.907 Unknown

I don't think there's a more important year for black people. Listen to Look Back At It on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Bloomberg Audio Studios. Podcasts. Radio. News.

94.043 - 102.816 Merryn Somerset Webb

Welcome to the Merrin Talks Money Market Wrap, where we talk about the biggest moves in markets this week and what is driving them. I am Merrin Somerset-Webb, Editor-at-Large for Bloomberg UK Wealth.

103.437 - 107.443 John Stepek

And I'm John Stevick, Senior Reporter and author of the Money Distilled Newsletter.

Chapter 2: What are the current market trends and earnings driving the bull market?

314.738 - 336.471 Merryn Somerset Webb

Yeah, absolutely. 1999 was our trial issues and the first couple came out in early 2000. Although we were very, very bearish on the dot-com boom. We're bearish people, so... But nonetheless, that's when it launched. But that was because that was the time when people were prepared to finance a financial magazine because everyone was interested in markets and money and finance.

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336.491 - 353.491 Merryn Somerset Webb

Everyone wanted more and more information. So that's when people were prepared to put up the money. So presumably it was the same in 1929. People were prepared to put up the money for business week in a way they wouldn't have been able to otherwise. And I think just to be clear, you know, business week still exists and money week still exists. You know, you can survive these things. Exactly.

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353.671 - 370.932 Merryn Somerset Webb

Anyway, back to earnings, back to earnings. Everything that you will have received in the last couple of days, John, and every single thing that I have received in the last couple of days is all about, all about earnings and how everything is fine and how S&P 500 earnings are going to, this is a good one. I can't remember who this came from.

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371.273 - 376.279 Merryn Somerset Webb

S&P 500 earnings growth about to break out on the upside of a 90 year channel.

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377.221 - 379.465 John Stepek

Wow. That's good. TA.

379.545 - 397.657 Merryn Somerset Webb

You know, it's not just big tech. It's not just big AI. Across the board, across the board, we're seeing earnings surprises. So it's all marvelous. So from the point of view of most people looking at this, they're like, well, you know, stock prices are based on expected forward earnings. Expected forward earnings are great. So everything is absolutely fine.

397.677 - 418.888 Merryn Somerset Webb

I did see one, one kind of interesting one, which pointed out that Given what's going on with earnings, the peg ratio, so the forward P divided by long term's earning growth is down to only just over one. And back in the old days, we used to say if the peg ratio was one, everything was fine. So there you go. Everything is fine, unless earnings growth expectations are wrong.

419.611 - 429.826 John Stepek

Yeah. I think we can wrap this one up now. Just say, yeah, get out there and buy. Go crazy, guys. Knock yourselves out.

430.246 - 447.592 Merryn Somerset Webb

Although I was also looking back. I was looking back because, you know, you look at it and you think, well, is this like the end of the 60s? Is this like the 70s? Is it possible that, in fact, earnings growth was really great just before everything went wrong in the 1970s? And guess what? Yeah.

Chapter 3: How are magazine covers influencing market sentiment?

577.853 - 586.625 Unknown

From iHeart Podcast, Saigon. Please allow me to introduce Joseph Sherman. You don't think I'm serious about a free Vietnam? I should stop talking so much.

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586.845 - 588.027 John Stepek

I like hearing you talk.

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588.074 - 615.282 Unknown

One city, a divided country, and the war that tore America apart. This is for Vietnam. I've taken a hit from Japanese ground fire. Do you read me? They're pouring petrol all over him. He's holding matches. I'm on a landmine! Get out! Saigon, starring Kelly Marie Tran and Rob Benedict. Sting hears madness. The world should hear about this.

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615.542 - 625.253 Unknown

There's a fire coming to this country and it's going to burn out everything. Listen to Saigon on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

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629.823 - 648.767 Merryn Somerset Webb

You've been writing about something much more interesting, and I want to talk about that because regular listeners and readers will remember the challenge set to me by our colleagues in America. When was it? Last year, wasn't it? The end of last year to go out and buy a single share in AI so that I would have it when the great IPOs came.

648.868 - 658.08 Merryn Somerset Webb

And it turned out it was impossible to buy a share in OpenAI, which I think I'm heartily grateful, really. But you have views on those IPOs, John.

658.38 - 658.48

Yeah.

658.966 - 680.518 John Stepek

Well, I just think it's really interesting because one of the things that I think it's easy to forget is that stock markets, like any other market, the supply, the overall supply of stuff actually matters. And it was actually really convenient because our colleague Simon White over on the kind of very, very serious side of the business, he's the

680.498 - 699.79 John Stepek

He writes a column called Macroscope, which I think only goes to the terminal subscribers. But he was writing about share buybacks. And he was making the point that share buybacks are the biggest source in the US market of equity coming out of the market, of de-equitisation.

Chapter 4: What historical events relate to today's market conditions?

1130.453 - 1143.016 John Stepek

Yeah, I mean, I guess it's that whole thing about there not being any voter base for getting rid of inflation. I don't think that's just the UK, by the way.

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1143.136 - 1150.47 Merryn Somerset Webb

I mean, I think at this point it's a Western issue. There is no appetite anywhere for dealing with the core of the problem.

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1150.45 - 1159.744 John Stepek

Of all the countries, actually, the UK's, at least its theoretical fiscal pathway, is actually pretty good compared to a lot of them.

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1159.944 - 1163.189 Merryn Somerset Webb

Yeah, but you know that's nonsense, John. You know it's nonsense.

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1163.469 - 1170.419 John Stepek

Yeah, but at least, or not at least, but... At least we're pretending better than some other people. There's a discussion about it.

1170.58 - 1175.547 Merryn Somerset Webb

But no one believes it. If anyone believed it, would guilt heels be so high?

1175.527 - 1186.189 John Stepek

Well, I mean, that's true. Well, I mean, the only thing I would say about guilt yields, I think guilt yields are a function of inflation rather than panicking about the deficit or the debt at the moment.

1186.209 - 1187.933 Merryn Somerset Webb

Aren't those things connected?

1188.335 - 1208.034 John Stepek

Yeah. So inflation has consistently been about 1 percentage point higher than anywhere else. So if you want a real interest rate from a gilt, you have to charge the people who issue it more to compensate for that. And I mean, yes, you can argue the inflation is partly because we've never had brilliantly controlled public finances.

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