Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Single best idea After an exhausting week, I can honestly say,
Speaker 2: for the first time I walked in the office today
Speaker 2: somewhat awake. It has been an exhausting two weeks, an
Speaker 2: exhausting period here of tariff and its effect on the
Speaker 2: markets and all. Today we head in a set of
Speaker 2: political guests. Thank you for the fierce comments on the
Speaker 2: political guests those four and again, so it's always good
Speaker 2: to see that. And of course we looked at economics, finance, investment,
Speaker 2: but the heart of this, the deepest market is the
Speaker 2: bond market. Amand Alignum is expert on this at Blackrock.
Speaker 2: She can look out to ten years, the belly of
Speaker 2: the curve, five to seven years. Here amand Alignum of
Speaker 2: Blackrock in on the trust market.
Speaker 1: The rep the short term funding repo markets are definitely
Speaker 1: important in times like this. We're staying in very first contact.
Speaker 1: They are there. I would say liquidity is a bit challenged,
Speaker 1: but they're for sure open and functioning for corporate credit investors. Actually,
Speaker 1: the new issue debt capital markets has been a really
Speaker 1: important barometer of confidence during late twenty eighteen, during the
Speaker 1: pandemic even during periods of the commodity disruption. The freezing
Speaker 1: of those capital markets during those periods of time did
Speaker 1: catch the FEDS attention. We know that right now they're
Speaker 1: open and functioning, just at a higher cost. We're watching
Speaker 1: that very closely. The other thing, at a more macro level,
Speaker 1: is this feedback loop, this really important feedback loop. We
Speaker 1: would argue between corporate margins, the layoff rate, which is
Speaker 1: still low, consumer spending and overall economic activity. If pressures
Speaker 1: on margins are enough for corporates to flex that layoff
Speaker 1: tool more aggressively, we think that could really cause some
Speaker 1: concern in the broader economic backdrop.
Speaker 2: The man aligne of Blackrock. Just to pro tip here
Speaker 2: in other crises, we've always had libor ois, the comparison
Speaker 2: of the benchmark three month liboard to theis indicator, and
Speaker 2: that is sort of thing that's gone aside, if you will.
Speaker 2: And in the short term market, what I look at
Speaker 2: in the Bloomberg is the SO for ten year. Damien Sassauer,
Speaker 2: who's better than me, looks at SO for two years SOFR,
Speaker 2: and then ten year SOFR and then two year, and
Speaker 2: those thermometers as a mandoliin set have calmed down in
Speaker 2: the last number of days. Anastasia Ameroso is with IKEAP.
Speaker 2: She's mixed on the market. Boy was she a successful
Speaker 2: bull here for years. A very tentative view on the
Speaker 2: market here Anastasia Amroso on the MAG seven.
Speaker 3: The first place I would step into would not be
Speaker 3: the MAG seven. Stocks and semiconductors, for example, will likely
Speaker 3: be challenged if you have this cyclical slowdown in the
Speaker 3: global economy. They just get caught up in export controls
Speaker 3: and the overall slowdown. So I don't necessarily think that
Speaker 3: that part of it right now is the first place
Speaker 3: to be. They're not immune from US economic slowdown either,
Speaker 3: but I do think that, as I mentioned before, you
Speaker 3: want to align yourself with the direction of policy right now,
Speaker 3: and the direction of policy is focus on domestic companies
Speaker 3: who are sourcing their cost of goods sold here in
Speaker 3: the United States, and they're mostly selling to the US consumers.
Speaker 3: So that's why sector like utilities and real estate and
Speaker 3: consumer staples for example have outperformed. And by the way,
Speaker 3: also financials are held up as well. So that's why
Speaker 3: I would focus there right now. But I will say
Speaker 3: Tom that you know, if this administration succeeds longer term.
Speaker 3: And if this results in deals that brings production to
Speaker 3: the United States, if this results in a new world
Speaker 3: order we're actually griffs and non tariff barriers do drop,
Speaker 3: then maybe we do have this on shoring investment boom.
Speaker 3: And so you have to allow for the possibility, especially
Speaker 3: give and the tax pass in the US website so favorable.
Speaker 2: In the Stajamoroso with Ikap, Thank you so much for
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