Bloomberg Surveillance Single Best Idea with Tom Keene: Ian Lyngen & Robert Schiffman
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May 5, 2025 Discover insights into the current financial market's unusual movements, including the strength of the Taiwan dollar and the outlook for American retail. Delve into the complexities of the Federal Reserve's interest rate strategies amid trade tensions. The conversation also highlights Apple's recent debt offerings and their impact on share repurchases and dividends. Tune in for expert analysis on navigating economic uncertainties and what lies ahead for the market.
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10-Year Yield Outlook
- Ian Lyngen expects the 10-year yield to decline from 4.30% to around 3.6% due to economic uncertainties.
- Trade tensions create complexity for rate normalization and affect Fed policy clarity.
Apple's Debt Strategy Explained
- Apple's cost of debt is almost zero despite a $3 trillion equity market cap, making borrowing favorable.
- The company uses low-cost debt to fund share buybacks and dividends due to large free cash flow.
Apple's Cash Flow Management
- Apple generates about $100 billion of free cash flow annually and continuously allocates it back to shareholders.
- They issue debt in small increments to manage their shareholder returns through buybacks and dividends.