WEBVTT - Bloomberg Surveillance TV: July 10, 2024 0:00:00.120 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.559 Terminal and the Bloomberg Business app. Brian Leavitt of Invesco 0:00:37.680 --> 0:00:40.680 joining the chorus of warnings, writing this, for the first 0:00:40.720 --> 0:00:44.120 time and a year, we favor a more defensive posture 0:00:44.120 --> 0:00:46.080 in the near term. That does not mean that we 0:00:46.159 --> 0:00:50.400 eliminate equities from the portfolio, but rather shift towards higher quality. 0:00:50.560 --> 0:00:51.440 Brian joins us for more. 0:00:51.440 --> 0:00:52.760 Brian and Morningtier. Good morning. 0:00:52.800 --> 0:00:55.200 Before we get into what you're doing beneath the surface, 0:00:55.240 --> 0:00:57.160 this is a big change for you. Typically you come 0:00:57.200 --> 0:00:59.200 on the program, you sort of push all the bears aside, 0:00:59.200 --> 0:01:00.600 and you say, I O want to be part of 0:01:00.600 --> 0:01:01.080 this market. 0:01:01.120 --> 0:01:01.760 What's changed for you? 0:01:02.160 --> 0:01:03.560 Well, the first thing I want to say, is I 0:01:03.600 --> 0:01:06.319 still believe over the intermediate term we want to be inequities. 0:01:06.360 --> 0:01:07.160 I still come. 0:01:07.080 --> 0:01:11.759 Back to peak inflation, peak rates, peak tightening is favorable 0:01:11.760 --> 0:01:14.200 for equities over the intermedia term time peer What we're 0:01:14.200 --> 0:01:17.240 looking at is more of a tactical indicator that says, look, 0:01:17.280 --> 0:01:21.000 the global economy is growing below trend and it looks 0:01:21.040 --> 0:01:23.720 like things are starting to soften. So when your below 0:01:23.880 --> 0:01:27.160 trend and things are weakening, you want to be more 0:01:27.240 --> 0:01:31.319 defensive in the portfolio. And some of that global weakness 0:01:31.440 --> 0:01:33.240 is being led by the United States. 0:01:33.319 --> 0:01:36.559 Things are slowing. It's not a recession call. 0:01:36.840 --> 0:01:40.679 It's not you know, something ominous is coming, but rather 0:01:40.840 --> 0:01:43.920 tactically things are slowing down and we're still waiting on 0:01:43.920 --> 0:01:44.720 the FED to respond. 0:01:44.880 --> 0:01:46.800 That's the change, and I think that's the important distinction. 0:01:46.880 --> 0:01:49.840 We've been talking about global growth xus below trend for 0:01:49.880 --> 0:01:52.120 quite a while now. The new ingredients is the US 0:01:52.200 --> 0:01:54.640 slowing down's slow, And something we've been talking about is 0:01:54.640 --> 0:01:57.200 at what point does someone like you become more concerned 0:01:57.200 --> 0:02:00.080 about what's slow down, that it's not just slowing, that 0:02:00.160 --> 0:02:00.880 it's slow. 0:02:00.760 --> 0:02:02.760 That it's slow, and that you may in fact have 0:02:02.800 --> 0:02:05.720 a recession. The good news is that we don't have 0:02:05.760 --> 0:02:08.200 a lot of excess in this economy. If you look 0:02:08.240 --> 0:02:11.520 at residential investment as a percent of GDP, if you 0:02:11.560 --> 0:02:15.160 look at inventory to sales ratios, this isn't an economy 0:02:15.200 --> 0:02:17.480 that's dealing with a lot of excess. We don't have 0:02:17.560 --> 0:02:20.200 businesses that are over levered, banks that are sitting on 0:02:20.240 --> 0:02:22.240 piles of bad loans, and you see it. 0:02:22.240 --> 0:02:23.160 In the corporate bomb market. 0:02:23.200 --> 0:02:26.239 Corporate bomb market isn't worried about this economy as of 0:02:26.360 --> 0:02:31.079 yet at all. Instead, what you're seeing is weakness, slow down, 0:02:31.120 --> 0:02:33.280 which by the way, is what the Federal Reserve wanted. 0:02:33.440 --> 0:02:36.040 It's here. The challenge is. 0:02:36.000 --> 0:02:37.679 We've got a five and a quarter five and a 0:02:37.720 --> 0:02:42.840 half percent FED funds target, and yet the economy is 0:02:43.480 --> 0:02:47.600 slowing and inflation's in the comfort zone. So you're you've 0:02:47.840 --> 0:02:50.520 you know, it's not a perfect backdrop for equities over 0:02:50.600 --> 0:02:51.360 the next few months. 0:02:51.440 --> 0:02:53.799 You know, you say, go into quality, and I wonder 0:02:54.200 --> 0:02:57.160 how quality has changed given the fact that some of 0:02:57.200 --> 0:03:00.480 the companies that are minting money have gained so much 0:03:00.560 --> 0:03:03.160 value over the past twelve months that they're the ones 0:03:03.160 --> 0:03:05.160 and I'm thinking of Market Stanley, they're the ones that 0:03:05.160 --> 0:03:07.520 people are getting nervous about are you on board with 0:03:07.560 --> 0:03:09.360 that This idea that some of the high flyers I'm 0:03:09.360 --> 0:03:12.320 thinking of Nvidia and thinking of Microsoft maybe have gotten 0:03:12.360 --> 0:03:14.120 over their skis well. 0:03:13.960 --> 0:03:15.799 Perhaps a little, but that doesn't mean that it doesn't 0:03:15.840 --> 0:03:16.160 go on. 0:03:16.600 --> 0:03:19.480 You know, as the economy slows, investors are going to 0:03:19.560 --> 0:03:22.799 be looking for a spot for businesses that they think 0:03:22.880 --> 0:03:25.360 are going to continue to do okay in this environment. 0:03:25.440 --> 0:03:27.720 And so I think part of the challenge was our 0:03:28.320 --> 0:03:32.720 risk on call, which started last July was a great one, 0:03:33.120 --> 0:03:36.040 but really most of the broadening of the rally happened 0:03:36.040 --> 0:03:39.120 in a couple of months, right small mid twenty percent 0:03:39.160 --> 0:03:42.240 in two months November and December on expectations of rate cuts, 0:03:42.360 --> 0:03:44.400 and then it's been all concentrated. 0:03:44.440 --> 0:03:47.080 So the risk on rally should have been broader. 0:03:47.600 --> 0:03:49.840 Then when you get to a more defensive spot, you 0:03:49.920 --> 0:03:52.880 tend to get more higher qualities. So yeah, they are 0:03:52.960 --> 0:03:55.240 perhaps a little bit elevated, but I think that's where 0:03:55.240 --> 0:03:58.360 investors camp out in a slowdown that could persist. 0:03:59.040 --> 0:04:02.120 Ultimately, what ends up happening. 0:04:01.760 --> 0:04:04.680 Over the next couple of years is in a easing 0:04:04.720 --> 0:04:08.040 cycle with a normalization the yield curve, you should broaden out, 0:04:08.400 --> 0:04:10.720 But in the near term I think investors hunker down 0:04:10.720 --> 0:04:12.040 a bit and stay in those names. 0:04:12.120 --> 0:04:13.960 So you're still a fomo kind of guy, just with 0:04:14.040 --> 0:04:16.720 respect to Nvidia and Microsoft, not necessarily what the rest 0:04:16.720 --> 0:04:17.880 of the broadening at is that correct? 0:04:17.920 --> 0:04:19.440 Well, I'm a fomo kind of guy. Over the next 0:04:19.440 --> 0:04:22.280 three to five years. Absolutely. Again, you know, in the 0:04:22.320 --> 0:04:24.960 near term the headline might be it turns a little 0:04:25.000 --> 0:04:26.360 bit bearish from where we've been. 0:04:26.360 --> 0:04:28.320 I mean, we were full risk on since July. 0:04:29.080 --> 0:04:32.200 As things slow and we wait for easing, we get 0:04:32.200 --> 0:04:34.560 a little bit more defensive. But again, over the next 0:04:34.600 --> 0:04:37.320 three to five years, peak tightening, peak rates, peak inflation, 0:04:37.440 --> 0:04:38.080 favor stocks. 0:04:38.200 --> 0:04:41.279 Some of these words that people use, like becoming cautious 0:04:41.560 --> 0:04:44.640 or being more risk on, have different meanings depending on 0:04:44.680 --> 0:04:47.240 who the person is, and the idea of being cautious 0:04:47.279 --> 0:04:50.320 in the past has been going into long bonds, having 0:04:50.360 --> 0:04:54.719 more cash and going into say dividend place in the 0:04:54.839 --> 0:04:58.080 equity market, what's the new conservative position. 0:04:58.160 --> 0:05:00.160 Yeah, So the way we think about it, if you 0:05:00.320 --> 0:05:03.719 take a sixty forty portfolio, when we're more risk on 0:05:03.880 --> 0:05:06.200 that forty percent fixed income is going to be far 0:05:06.240 --> 0:05:09.120 more credit. Credit tends to do well, in more of 0:05:09.160 --> 0:05:12.120 a recovery risk on type of environment, we would increase 0:05:12.200 --> 0:05:16.680 exposure to longer duration bonds, quality bonds play Frank can 0:05:16.680 --> 0:05:19.520 get some very nice yields there these days, and I 0:05:19.560 --> 0:05:22.200 would be a little bit cautious about sitting out in 0:05:22.240 --> 0:05:25.360 money markets because those yields will ultimately. 0:05:24.920 --> 0:05:28.240 Be coming down. On the equity side. 0:05:28.320 --> 0:05:31.160 When you're more cautious, you reduce some of your exposure 0:05:31.200 --> 0:05:34.880 to international and you move into factors like quality and 0:05:34.960 --> 0:05:37.880 low volatility, and you reduce a little bit of your 0:05:37.880 --> 0:05:40.920 small cap exposure and go more large cap. So it's 0:05:40.960 --> 0:05:45.040 not wholesale changes, it's protecting some of the gains you've 0:05:45.080 --> 0:05:48.359 had in the portfolio and adding some protection in the 0:05:48.360 --> 0:05:50.039 fixed income market to a portfolio. 0:05:50.120 --> 0:05:52.080 We had this debate yesterday about whether or not as 0:05:52.080 --> 0:05:54.360 an investor you can look through the noise of politics. 0:05:54.400 --> 0:05:58.320 Do you find potentially advantages ahead of November opportunities or 0:05:58.360 --> 0:05:59.000 do you think they're. 0:05:58.920 --> 0:06:01.520 Setbacks look through the noise of politics. 0:06:01.520 --> 0:06:05.480 If you look back historically and you look at volatility 0:06:05.680 --> 0:06:10.360 in markets, it doesn't come because of elections. So if 0:06:10.400 --> 0:06:12.960 you look at October and November of election years, the 0:06:13.000 --> 0:06:15.720 only years that you see a meaningful increase in volatility 0:06:15.880 --> 0:06:18.560 are two thousand and oh eight, and that was clearly 0:06:18.600 --> 0:06:21.600 for other reasons than what was going on in politics, 0:06:21.600 --> 0:06:23.640 And if we have time for it, I like to 0:06:23.680 --> 0:06:27.200 tell investors three points on politics. The first one is 0:06:27.480 --> 0:06:31.080 since nineteen fifty seven when the SMP went live, every 0:06:31.080 --> 0:06:34.720 president has had a positive return over their administration except 0:06:34.839 --> 0:06:37.520 w and Nixon because their terms ended in bad recessions 0:06:37.600 --> 0:06:41.239 or they left office in bad recessions. Number two, Trump's 0:06:41.279 --> 0:06:45.760 portfolio over Trump's term SMP was up sixty percent. Where's 0:06:45.760 --> 0:06:49.320 Biden right now? Sixty percent? So it didn't matter at all. 0:06:49.560 --> 0:06:51.280 And the third point I like to make is if 0:06:51.279 --> 0:06:54.920 politics matter so much, then how did Obama and Reagan 0:06:55.000 --> 0:06:57.040 both have two hundred percent advances in the. 0:06:57.000 --> 0:06:59.960 Market during their term? They both had great starting points. 0:07:00.480 --> 0:07:02.960 You know, I could become president in a recession when 0:07:02.960 --> 0:07:05.240 the Fed's helping out and probably get a two hundred. 0:07:05.279 --> 0:07:07.840 Are you running because I think that that's a Amory. 0:07:07.560 --> 0:07:08.960 Told me I have zero chance. 0:07:09.120 --> 0:07:11.280 So you could head to the convention in August and 0:07:11.320 --> 0:07:12.920 make a challenge if you want. I think some people 0:07:13.000 --> 0:07:15.320 might be thinking about that. There have been changes though 0:07:15.600 --> 0:07:19.040 over the last decade twenty sixteen. November sixteen, we were 0:07:19.040 --> 0:07:22.520 talking about investment in infrastructure, the Trump Trade. 0:07:22.640 --> 0:07:23.320 Twenty twenty. 0:07:23.400 --> 0:07:25.880 You saw what happened when we started to see signs 0:07:25.880 --> 0:07:28.560 of a blue sweep and the prospect of more fiscal 0:07:28.640 --> 0:07:31.680 stimulus coming down a pike. There have been changes, and 0:07:31.680 --> 0:07:34.040 we're starting to wonder whether there's going to be consequences 0:07:34.040 --> 0:07:36.680 for the bond market for two presidents, two leaders that 0:07:36.720 --> 0:07:38.760 don't seem to be willing to do anything about the 0:07:38.800 --> 0:07:40.360 deficit in a big way anytime soon. 0:07:40.480 --> 0:07:40.760 Yeah. 0:07:41.040 --> 0:07:43.480 Well, I mean with regards to the changes, you know, 0:07:43.640 --> 0:07:46.120 if we do go back to that twenty sixteen moment, 0:07:46.680 --> 0:07:49.280 it was the whole I think from a lot of 0:07:49.360 --> 0:07:53.720 voters that Trump could unlock growth, could unlock value, and 0:07:53.760 --> 0:07:55.840 you had very much the same market leadership you had 0:07:55.840 --> 0:07:59.480 on dur Obama. So we we didn't change the economic 0:07:59.680 --> 0:08:02.840 envo ironmen as a result of simply electing a new president. 0:08:02.840 --> 0:08:04.640 I mean, they basically get to get a couple of 0:08:04.680 --> 0:08:07.680 things done. They don't get to have their whole agenda 0:08:08.240 --> 0:08:11.440 play out. Now with regards to rates, I heard this 0:08:11.520 --> 0:08:13.640 a little bit a week or two ago. You would 0:08:13.680 --> 0:08:15.840 know better than me, but right there was a quick 0:08:15.880 --> 0:08:18.360 move up in the ten year treasury eight a handful 0:08:18.400 --> 0:08:20.720 of days ago, and people were asking me, is this 0:08:20.760 --> 0:08:22.880 the bond vigilantes or they finally here? 0:08:22.920 --> 0:08:25.240 There there's nothing in the bond. 0:08:24.960 --> 0:08:28.160 Market that suggests the bond vigilantes are here. This is 0:08:28.200 --> 0:08:31.880 a bond market that's been moving very much on nominal 0:08:31.920 --> 0:08:35.560 growth expectations and expectations for the Fed. If the bond 0:08:35.640 --> 0:08:39.280 vigilantes were here, the US dollar would not be as strong. 0:08:39.360 --> 0:08:40.000 As it is. 0:08:40.120 --> 0:08:43.800 So no, it doesn't seem as if the bond market 0:08:43.920 --> 0:08:46.520 views this as a problem. And I've been saying for 0:08:46.559 --> 0:08:48.600 a long time, John, I don't think that this is 0:08:48.640 --> 0:08:50.880 going to be a problem. My clients think it's the 0:08:50.880 --> 0:08:54.319 biggest problem we have. The US debt level job is 0:08:54.360 --> 0:08:56.760 to provide therapy. Well, I've been doing this for twenty 0:08:56.800 --> 0:09:00.319 five years, and the debts increase by seven times, five 0:09:00.360 --> 0:09:02.840 trillion to thirty five trillion, and yet rates are at 0:09:02.840 --> 0:09:05.400 four percent and the dollars strong. So you know, it's 0:09:05.440 --> 0:09:07.679 the Alfredy Newman what me worry at this point? 0:09:07.760 --> 0:09:07.880 Right? 0:09:08.000 --> 0:09:10.600 I mean it's it's we're a very wealthy country. 0:09:10.800 --> 0:09:13.320 Total household network, there's one hundred and fifty trillion in 0:09:13.320 --> 0:09:15.480 this country compared to thirty five trillion in debt. 0:09:15.720 --> 0:09:17.920 So I'm not overly concerned about this. Bran. 0:09:18.040 --> 0:09:31.480 It's going to see it, Bran Levitt IV Invesco. It's 0:09:31.520 --> 0:09:35.480 the latest Congresswoman Mikey Sheryl of New Jersey becoming the 0:09:35.640 --> 0:09:38.600 ninth House Democrat to call on President Biden to drop 0:09:38.640 --> 0:09:42.280 out of the race. Bidon's campaign working to restore confidence 0:09:42.400 --> 0:09:45.400 in his candidacy and bolster support from progressive leaders around 0:09:45.400 --> 0:09:47.880 the country. Joining us now, please to say is the 0:09:47.920 --> 0:09:51.960 Democratic Congressman Jonathan Jackson of Illinois. Congressman, thank you for 0:09:52.000 --> 0:09:54.199 being with Bloomberg Surveillance this morning. I just want to 0:09:54.240 --> 0:09:56.480 share a quote of yours with our audience, which I 0:09:56.480 --> 0:09:58.800 think is going to imply where you stand. I think 0:09:58.800 --> 0:10:02.280 he's up to the grueling of the presidential campaign season. 0:10:02.480 --> 0:10:04.360 A question I would have for you, Congressman, I think 0:10:04.440 --> 0:10:05.640 is a question that a lot of people in this 0:10:05.679 --> 0:10:08.280 country have too. It's not just about the four months 0:10:08.400 --> 0:10:11.080 ahead of us, it's the four years after that. What 0:10:11.200 --> 0:10:13.600 gives you the impression that he can handle not just 0:10:13.640 --> 0:10:16.480 the campaign for the next four months, but the four 0:10:16.520 --> 0:10:21.040 and a half years of governing. Kate still need today well. 0:10:21.120 --> 0:10:23.480 I think he's got a great team around him. I 0:10:23.520 --> 0:10:27.760 think his agenda is clear. His focus has been very precise. 0:10:28.160 --> 0:10:30.360 When I think of what the alternatives that we are 0:10:30.559 --> 0:10:33.960 confronting at the moment, it's about direction, it's about character. 0:10:34.600 --> 0:10:37.800 President Biden has been very robust on the campaign trail 0:10:37.880 --> 0:10:42.200 in the last week since that debate, if you will, 0:10:42.559 --> 0:10:44.560 and so I'm very excited for him. I think that 0:10:44.960 --> 0:10:47.840 he's got a very strong number two and Vice President 0:10:47.920 --> 0:10:51.559 Kamala Harris, and he was able to share with us 0:10:51.920 --> 0:10:55.560 as the CBC members on a private zoom call. He 0:10:55.640 --> 0:10:58.360 was able to take our questions, and so I'm very excited. 0:10:58.400 --> 0:11:00.920 I'm very confident that he can go forward and will go. 0:11:01.040 --> 0:11:03.200 So we'll go for in a very robust manner. 0:11:03.640 --> 0:11:05.480 If you think he has a strong number two, and 0:11:05.520 --> 0:11:08.160 he's eighty one years old, and the polls continuously show 0:11:08.320 --> 0:11:10.600 not just post to debate, this has been an issue 0:11:10.600 --> 0:11:12.960 with the electorate for over a year that they just 0:11:13.000 --> 0:11:16.280 think he is too old to continue. Why not promote 0:11:16.400 --> 0:11:17.040 the number two? 0:11:18.720 --> 0:11:22.160 I think he has been promoting Vice President Harris, and 0:11:22.240 --> 0:11:24.400 so we don't know what the future holds, but I 0:11:24.400 --> 0:11:27.640 would tell you this that they've been out on the campaign. 0:11:27.800 --> 0:11:31.520 This has been a scandal free administration. He's been very focused. 0:11:31.800 --> 0:11:34.680 If you look at what the alternative is on the chaos, 0:11:34.720 --> 0:11:37.800 the confusion, the calamity, if you will. I think the 0:11:37.840 --> 0:11:40.439 press has not put it in the proper lights. If 0:11:40.480 --> 0:11:43.600 you think at a person that's been convicted by jury 0:11:43.640 --> 0:11:46.520 of their peers of sexual assault, you usually get a 0:11:46.520 --> 0:11:50.960 handle on your name being called a sexual offender former president, 0:11:51.040 --> 0:11:53.040 but no, they've given him a pass on that. So 0:11:53.200 --> 0:11:55.440 character is on the battle, and I think the African 0:11:55.480 --> 0:11:58.480 American community is very clear at what's at stake. We've 0:11:58.520 --> 0:12:00.880 gone in the wrong direction with the United States Supreme Court, 0:12:01.400 --> 0:12:03.959 if you will. We've had one hundred and sixteen justices 0:12:04.000 --> 0:12:07.280 in American history, roughly twelve thousand, five hundred and ten 0:12:08.000 --> 0:12:12.000 representatives in the House of Representatives. We've had forty six presidents. 0:12:12.320 --> 0:12:15.199 But this non elected group of people, the citizen of 0:12:15.240 --> 0:12:18.200 the United States Supreme Court, is able to dictate law. 0:12:18.360 --> 0:12:20.079 I think we need to look at some sort of 0:12:20.160 --> 0:12:23.240 judicial reform in the future. That the power that they 0:12:23.280 --> 0:12:26.719 have and the corruption that they've displayed is unprecedented. So 0:12:26.760 --> 0:12:29.880 the Supreme Court is on the ballot for this election season. 0:12:29.920 --> 0:12:32.560 As well, and I would trust President Joe Biden and 0:12:32.640 --> 0:12:35.960 Vice President Harris to make that decision and recommendation before 0:12:36.000 --> 0:12:37.600 the American people Congress. 0:12:37.600 --> 0:12:38.960 And I want to share you some new data we 0:12:39.000 --> 0:12:42.000 got this morning from the Cook Political Report. They said 0:12:42.040 --> 0:12:46.000 that Trump's currently is forty seven to forty four percent lead, 0:12:46.200 --> 0:12:48.880 the most dramatic shift they've seen in this race. And 0:12:49.000 --> 0:12:52.160 David Walserman, an analyst there, said, quote, Trump's current numbers 0:12:52.160 --> 0:12:56.319 among Black and Latino voters are incompatible with any plausible 0:12:56.440 --> 0:13:00.200 Democratic victory scenario. What does Joe Biden need to do 0:13:00.600 --> 0:13:03.560 to really shore up the black and Latino communities. 0:13:05.480 --> 0:13:08.160 Well, I think he has to continue to stay in 0:13:08.200 --> 0:13:11.400 front of the community and also share with him all 0:13:11.440 --> 0:13:13.360 the things that he's done and what's to be promised 0:13:13.360 --> 0:13:17.120 in the future. We know on the Sunday before the 0:13:17.200 --> 0:13:20.400 Tuesday election, most Democratic candidates find their way to the 0:13:20.400 --> 0:13:23.280 African American Church. There are some more games that the 0:13:23.280 --> 0:13:26.960 African American Church certainly deserves in the African American community. 0:13:27.400 --> 0:13:29.760 If you think about what President Biden has done, one 0:13:29.800 --> 0:13:32.680 thing that's huge, and there have been many things, is 0:13:32.679 --> 0:13:34.839 that this is the first time an African American woman 0:13:35.200 --> 0:13:38.920 was even considered to go onto the nation's highest court 0:13:38.920 --> 0:13:41.800 in Katanji. Brown and her opinions and her decisions, her 0:13:41.920 --> 0:13:44.600 character is very important for us to have there. What 0:13:44.679 --> 0:13:48.080 he's done on trying to put people on the judiciary 0:13:48.320 --> 0:13:51.680 has been very outstanding. We're now seeing the erosion of 0:13:51.679 --> 0:13:55.520 African American wealth. We're looking at going towards twenty fifty 0:13:55.520 --> 0:13:58.560 where there'll be zero African American wealth. That's also being 0:13:58.600 --> 0:14:02.480 projected that we can talk about peace and security in 0:14:02.640 --> 0:14:06.040 Ukraine and Israel and Gaza and Taiwan and talk about 0:14:06.080 --> 0:14:10.040 rebuilding plans. We can talk about rebuilding urban America. Those 0:14:10.080 --> 0:14:12.360 persons that have had the history of being the descendants 0:14:12.520 --> 0:14:15.880 of Americans, that have been enslaved, that have faced redlining, 0:14:16.200 --> 0:14:19.160 that have faced all the worst of America, that have 0:14:19.240 --> 0:14:22.280 been truly American since the founding of this nation, have 0:14:22.400 --> 0:14:24.880 not had an economic plan that has been sustained and 0:14:24.920 --> 0:14:27.400 that has been implemented. Our cities don't have to look 0:14:27.440 --> 0:14:30.400 this drab, in this dire. We can also pick up 0:14:30.440 --> 0:14:32.640 people in America, and once we do so, we will 0:14:32.680 --> 0:14:35.200 expand the market. I believe in America. I believe there's 0:14:35.200 --> 0:14:37.920 a lot more potential when we saw the past of 0:14:38.000 --> 0:14:42.000 segregated athletic fields once they were transformed into a level 0:14:42.000 --> 0:14:44.680 playing field. Now we're proud of the NBA, proud of 0:14:44.720 --> 0:14:47.880 Major League Baseball, proud of all of these other endeavors. 0:14:47.920 --> 0:14:50.080 We can do that same with our economy when people 0:14:50.120 --> 0:14:52.480 have equal access to capital. That has to be a 0:14:52.520 --> 0:14:55.160 major focus of the Biden administration. What are they going 0:14:55.200 --> 0:14:58.840 to be the financial institutions created to have long term 0:14:59.000 --> 0:15:03.880 sustainable growth and inclusivity in the American economy. That's a promise, 0:15:03.880 --> 0:15:06.000 as a commitment that should be made to the African 0:15:06.040 --> 0:15:09.280 American community. It'd be good for America, it'd be good 0:15:09.320 --> 0:15:09.880 for the world. 0:15:10.320 --> 0:15:12.280 Congressman, I want to go back to what you were 0:15:12.280 --> 0:15:14.120 talking about at the outset, where you were saying that 0:15:14.160 --> 0:15:16.640 it's character on the ballot is who you are going 0:15:16.680 --> 0:15:20.520 to elect as just a person a candidate, and you're 0:15:20.560 --> 0:15:23.000 talking about Donald Trump. There are a number of polls 0:15:23.200 --> 0:15:26.480 that have shown that Kamala Harris or many other candidates 0:15:26.520 --> 0:15:30.200 would do better than Joe Biden across from the ballot, 0:15:30.520 --> 0:15:34.000 across from Donald Trump. Why are you still supporting Joe 0:15:34.040 --> 0:15:36.720 Biden if you think that he has a lesser chance 0:15:37.080 --> 0:15:40.760 than other potential Democratic contenders to win in an election 0:15:40.840 --> 0:15:42.720 that you're framing is quite important. 0:15:44.200 --> 0:15:46.040 Well, I would say it this way. You're talking to 0:15:46.080 --> 0:15:49.040 someone that's in elected office, and anyone that's been in 0:15:49.040 --> 0:15:53.440 this position before, you understand critics come after doers, and 0:15:53.520 --> 0:15:56.400 so we don't look at all the opinion polls. Opinion 0:15:56.400 --> 0:15:58.720 polls would tell us we're wrong. Opinion polls would tell 0:15:58.760 --> 0:16:02.120 us that we shouldn't, we can't win, and we've overcome 0:16:02.440 --> 0:16:05.200 many of those obstacles. We're in the position now of 0:16:05.280 --> 0:16:08.160 molding and shaping opinion. And that's where I stand on 0:16:08.200 --> 0:16:11.520 the side of I appreciate those that have dissented. I 0:16:11.600 --> 0:16:14.880 disagree with them. I think it's healthy that we have debates. 0:16:14.920 --> 0:16:16.920 I would have liked to have seen a more rigorous 0:16:16.960 --> 0:16:22.000 primary debate schedule that gives other persons the opportunity to 0:16:22.040 --> 0:16:24.280 get on the stage. But here we are. We're about 0:16:24.320 --> 0:16:27.480 four weeks away from the Democratic Convention, and I think 0:16:27.640 --> 0:16:33.200 these different opinions and party persons that may disagree, I 0:16:33.280 --> 0:16:35.760 disagree with them, but I respect their opinion. I think 0:16:35.800 --> 0:16:38.040 in the end, it all comes together. And so I 0:16:38.040 --> 0:16:40.960 don't want someone to be crowned the next president. If 0:16:40.960 --> 0:16:43.200 someone has a dissenting voice. I want them to be 0:16:43.240 --> 0:16:45.840 heard at the convention. Let's keep it open, let's keep 0:16:45.880 --> 0:16:48.440 the conversation robust, and let's take our case to the 0:16:48.520 --> 0:16:52.120 American people. This ultimately is decided not by the donors, 0:16:52.440 --> 0:16:55.960 but by a radical proposition, and that is that every 0:16:56.000 --> 0:16:58.840 person has a vote, and it counts on election day. 0:16:58.880 --> 0:17:01.520 One person, one vote. And so this is where the 0:17:01.520 --> 0:17:05.520 bigg in their class and the working class all have 0:17:05.880 --> 0:17:10.400 one voice, one vote on election ding. So I follow opinion. 0:17:10.560 --> 0:17:13.080 Now it's time for us to shift opinion, not simply 0:17:13.400 --> 0:17:15.200 follow what the opinion polls are seeing. 0:17:15.320 --> 0:17:17.200 A Congressman, I wish we had more time, because we've 0:17:17.200 --> 0:17:20.120 got plenty of follow ups to that particular last comment, Congressman, 0:17:20.160 --> 0:17:24.440 thank you. Congressman Jonathan Jackson of Illinois joining us from Washington, DC, 0:17:35.119 --> 0:17:38.960 Drew Pettit writing this sentiment around stocks with high exposure 0:17:39.000 --> 0:17:41.960 to AI is the most elevated it has been since 0:17:42.000 --> 0:17:46.000 twenty nineteen. We advocate taking some gains in AI high 0:17:46.000 --> 0:17:49.840 flyers and redistributing more broadly across the themes value chain. 0:17:50.119 --> 0:17:52.280 Drew joins us now for more dre It's wonderfully have 0:17:52.400 --> 0:17:54.120 you with us on the program. Lots of people talking 0:17:54.119 --> 0:17:56.159 about your note in the last twenty four hours. I 0:17:56.160 --> 0:17:58.320 think we have to draw a distinction, as you have done, 0:17:58.600 --> 0:18:02.760 between the AI and enablers and perhaps the AI adopters. 0:18:02.760 --> 0:18:04.920 Can you help us work through your framework for thinking 0:18:04.920 --> 0:18:06.399 about equacies at the moment. 0:18:07.720 --> 0:18:09.720 Yeah, well, thanks for having me on this morning. 0:18:09.800 --> 0:18:11.959 So when we think of AI, we think of it 0:18:12.000 --> 0:18:15.920 in three pieces. The enablers, so the semiconductors, the picks 0:18:15.960 --> 0:18:19.119 and shovels. We get that that's the trade that's really working. 0:18:19.640 --> 0:18:23.159 The creators, so the software sided thing things. After you 0:18:23.280 --> 0:18:25.680 have the hardware, you have to teach it to do 0:18:25.720 --> 0:18:28.359 something and package that in a product. And then I 0:18:28.400 --> 0:18:31.480 think the last category it's the users. So you call 0:18:31.520 --> 0:18:34.479 them the adopters, we called users. Those are the companies 0:18:34.520 --> 0:18:37.480 that are going to take those tools and either integrate 0:18:37.520 --> 0:18:40.000 it into their products to make it better or in 0:18:40.040 --> 0:18:43.719 their background processes to make their companies more efficient. So 0:18:43.760 --> 0:18:46.640 I think that whole value chain eventually benefits. But the 0:18:46.680 --> 0:18:49.520 market is just trading the enablers right now. 0:18:49.800 --> 0:18:51.840 In part true because it's very hard to see where 0:18:51.840 --> 0:18:53.720 the money is and we haven't seen it in the 0:18:53.760 --> 0:18:56.800 earnings for some of the end users. So why is 0:18:56.880 --> 0:18:59.639 this the right time in your view to make that shift. 0:19:01.240 --> 0:19:04.720 You've just had that almost parabolic move in some of 0:19:04.760 --> 0:19:08.840 these high flyers, like you see that with Nvidia, TSMC 0:19:09.000 --> 0:19:11.679 overnight is up another two percent. So a lot of 0:19:11.680 --> 0:19:15.720 these names, with how aggressive they have moved, portfolio managers 0:19:15.760 --> 0:19:19.640 are overweight. So we're not saying dump these names because 0:19:19.720 --> 0:19:22.680 to your point earlier, yeah, there's some career risks there 0:19:22.680 --> 0:19:25.479 if you're not in them, but if you're overweight, use 0:19:25.560 --> 0:19:26.680 that to fund the next leg. 0:19:27.160 --> 0:19:28.040 It will come. 0:19:28.400 --> 0:19:31.440 Markets don't stay on the same theme forever, and in 0:19:31.440 --> 0:19:35.640 some cases, I think the implied expectations with these enabler 0:19:35.720 --> 0:19:40.320 stock prices moving very far, very fast, get really hard 0:19:40.640 --> 0:19:42.400 to meet and exceed going forward. 0:19:42.520 --> 0:19:44.639