WEBVTT - Trump Says US Talking With China; Alphabet and Intel Report 0:00:02.560 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.920 --> 0:00:13.240 This is Bloomberg business Week, Daily reporting from the magazine 0:00:13.240 --> 0:00:17.880 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.920 --> 0:00:22.800 and trends shaping today's complex economy. Plus global business finance 0:00:22.840 --> 0:00:26.160 and tech news as it happens. The Bloomberg Business Week 0:00:26.239 --> 0:00:31.760 Daily Podcast with Carol Masser and Tim Stenebek on Bloomberg Radio. 0:00:32.360 --> 0:00:34.880 We have a great guest, someone we turn too often 0:00:34.920 --> 0:00:37.400 when it comes to some of the big issues that 0:00:37.440 --> 0:00:40.880 are facing global relationships. Back with us, as Ed Price. 0:00:40.920 --> 0:00:44.200 He's a former British trade official. He's now nonresident Senior 0:00:44.240 --> 0:00:47.640 Fellow at New York University's advised members of the European 0:00:47.640 --> 0:00:50.320 and British parliaments. He's a former British trade official, and 0:00:50.320 --> 0:00:53.880 he writes often about politics, economic policy, and so much more. 0:00:54.680 --> 0:00:58.320 And he joins us now from upstate New York. Good 0:00:58.360 --> 0:01:00.000 to have you here. How are you? 0:01:00.960 --> 0:01:02.840 I'm well, Carol, thanks again for having me. 0:01:02.880 --> 0:01:05.480 How are you doing well? Trying to keep up and 0:01:05.520 --> 0:01:08.520 certainly taking our cues out of the White House and 0:01:08.520 --> 0:01:13.559 specifically just moments ago from the Oval Office. Let's start 0:01:13.600 --> 0:01:14.960 with I think what is top of mind? And it 0:01:15.040 --> 0:01:17.240 seemed to be top of mind for the discussion between 0:01:17.520 --> 0:01:20.440 the Prime Minister of Norway and President Trump just moments ago, 0:01:20.600 --> 0:01:24.480 and that is Russia Ukraine. US is expected to demand 0:01:24.480 --> 0:01:27.200 that Russia accept Ukraine's right to have its own army 0:01:27.560 --> 0:01:31.280 defense industry as part of a peace agreement between Moscow 0:01:31.520 --> 0:01:34.679 and Kiev. And Kiev, how do you see these developments 0:01:34.720 --> 0:01:37.000 and where it might be going and in what might 0:01:37.120 --> 0:01:39.640 bring this to an end, if anytime soon? 0:01:41.160 --> 0:01:45.160 Sure, So I'm very puzzled about the situation in Ukraine, honestly, 0:01:45.400 --> 0:01:47.920 because it seems to me from the outside that Putin 0:01:48.120 --> 0:01:51.520 has been slowly losing this war, and slowly losing this war, 0:01:51.600 --> 0:01:54.200 at least against his initial ambitions, which as we know, 0:01:55.080 --> 0:01:58.200 included the seizure of all of Ukraine and the installation 0:01:58.240 --> 0:02:00.960 of a puppet government. And so you go away and 0:02:01.000 --> 0:02:03.840 read about this, ask people that better informed than I, 0:02:03.920 --> 0:02:06.480 maybe who travel more frequently over there. They'll tell you 0:02:06.520 --> 0:02:09.640 that Putin is doing pretty poorly and that the Russian 0:02:09.680 --> 0:02:11.959 economy is not in the sort of place that could 0:02:12.000 --> 0:02:15.400 continue this war for long. And so when I see 0:02:15.880 --> 0:02:18.640 President Trump announce that he's going to come up with 0:02:18.800 --> 0:02:21.840 a deal, I don't understand why he doesn't push forward 0:02:21.960 --> 0:02:25.160 with more weapons and more supplies to Ukraine in order 0:02:25.200 --> 0:02:27.680 to push that deal forward, whatever it is. So it's 0:02:27.720 --> 0:02:30.920 very confusing because on the one hand, Trump seems to 0:02:30.960 --> 0:02:34.280 offer carrots to Putin, carrots that Putin hasn't asked for 0:02:35.000 --> 0:02:37.640 while withdrawing the stick. I haven't actually read the art 0:02:37.720 --> 0:02:39.160 of the deal. That might be how you're supposed to 0:02:39.160 --> 0:02:40.800 do it, but I'm not sure well, and. 0:02:40.840 --> 0:02:43.000 It does to be fair to the president, something that 0:02:43.040 --> 0:02:46.840 he has been consistent about is the disdain that he 0:02:46.919 --> 0:02:48.799 has for the loss of life, and it's something that 0:02:48.840 --> 0:02:51.480 he mentioned several times today talking about the thousands of 0:02:51.520 --> 0:02:54.920 young people who continue to die in Ukraine each and 0:02:54.919 --> 0:02:57.880 every week as a result of this war. Could it 0:02:57.919 --> 0:03:00.000 be in your view that he just wants to end 0:03:00.120 --> 0:03:00.640 the fighting. 0:03:02.440 --> 0:03:04.560 He may want to end the fighting, but I'm not 0:03:04.600 --> 0:03:07.800 sure that the same man who threatens Greenland, Panama and 0:03:07.960 --> 0:03:11.079 Canada with possible military action truly cares about the loss 0:03:11.080 --> 0:03:12.720 of life. So I would put that down to a 0:03:12.800 --> 0:03:15.360 nice talking point that he does well to repeat because 0:03:15.360 --> 0:03:18.120 it's a powerful one, and I should be careful myself 0:03:18.160 --> 0:03:21.800 as an analyst not to enjoy or celebrate wars, and 0:03:22.080 --> 0:03:24.560 we talk about this one in Ukraine very often. It 0:03:24.600 --> 0:03:28.320 is indeed tragic. Now that might be cynicism. I don't 0:03:28.400 --> 0:03:32.880 look at President Trump at his entire policy agenda, his 0:03:33.080 --> 0:03:35.960 entire foreign policy agenda, and think this is someone who 0:03:35.960 --> 0:03:39.600 cares about lives. Need I remind the people watching or 0:03:39.640 --> 0:03:43.560 listening to this live stream that we've also been sending 0:03:43.560 --> 0:03:46.600 people without due process to El Salvador. So I would 0:03:46.600 --> 0:03:49.320 certainly take President Trump's concern for human rights or the 0:03:49.360 --> 0:03:51.120 loss of life with a pinch of salt. 0:03:51.480 --> 0:03:53.920 The other thing is that the President has certainly talked 0:03:53.920 --> 0:03:57.240 a lot about and to be fair, it's and is 0:03:57.240 --> 0:03:59.520 maybe his quest and his mission to make sure that 0:03:59.560 --> 0:04:01.920 the US has what it needs for national security. And 0:04:01.920 --> 0:04:03.080 I think it's safe to say that a lot of 0:04:03.160 --> 0:04:05.760 nations are thinking about this at this point. He talked 0:04:05.800 --> 0:04:10.320 about Greenland important for international peace. You've been traveling ed. 0:04:10.960 --> 0:04:15.200 You've been not necessarily to Greenland anytime soon, but you 0:04:15.240 --> 0:04:17.680 have been to Panama, You've been to Canada. I am 0:04:17.800 --> 0:04:21.880 curious what you've been hearing seeing when it comes to 0:04:22.000 --> 0:04:23.760 maybe a new global order. 0:04:25.000 --> 0:04:27.440 Well, if there's a Bloomberg challenge for me to go 0:04:27.480 --> 0:04:31.680 to Greenland. I accept, and I'll put back. We'll work 0:04:31.720 --> 0:04:35.360 on it. Canada and Panama are in the same mood, 0:04:35.760 --> 0:04:38.800 and when an American citizen turns up and says, look, 0:04:38.800 --> 0:04:41.359 what do you think? The answer is not much. Both 0:04:41.440 --> 0:04:44.200 of those countries are very upset with the idea that 0:04:44.240 --> 0:04:47.920 the United States, the apparent champion of liberty and it's 0:04:47.960 --> 0:04:50.720 two hundred and forty nine year history, would be threatening 0:04:50.760 --> 0:04:56.640 the annexation of allies. It's completely bizarre, and it's also 0:04:56.720 --> 0:04:58.960 something that I think is causing quite a lot of stress. 0:04:59.000 --> 0:04:59.120 Now. 0:04:59.160 --> 0:05:01.880 The Canadians and the people in Panama were very polite 0:05:01.880 --> 0:05:04.480 to me. That might be because they were misled by 0:05:04.480 --> 0:05:07.239 my accent and they, you know, they thought I was British. 0:05:07.240 --> 0:05:09.120 But as soon as I said, look, I'm actually American 0:05:09.560 --> 0:05:12.440 in a hotel lobby or even at the checkpoint, there 0:05:12.440 --> 0:05:15.440 were raised eyebrows. So we always talk about whether Trump 0:05:15.520 --> 0:05:19.120 is serious in his foreign policy script. I don't know 0:05:19.160 --> 0:05:20.839 if he is or not. I think is, but other 0:05:20.920 --> 0:05:23.279 people abroad do. 0:05:23.279 --> 0:05:25.640 Do you think there's a legitimate argument for the United 0:05:25.640 --> 0:05:29.000 States to want to annex Greenland? 0:05:30.080 --> 0:05:30.200 No? 0:05:30.240 --> 0:05:33.440 I from a security perspective, ed, No. 0:05:33.440 --> 0:05:38.640 It's completely insane. Because whatever the gain in annex in Greenland, 0:05:39.240 --> 0:05:42.080 there would be a loss in the EU as an ally. 0:05:42.640 --> 0:05:45.240 And you know, you could never fully sit down with 0:05:45.279 --> 0:05:47.400 the eyes and ears of God and calculate what that 0:05:47.480 --> 0:05:50.400 net calculation would be. But I'm pretty sure you could 0:05:50.400 --> 0:05:53.480 take a rough estimate and say, okay, we expand our 0:05:53.520 --> 0:05:56.760 presence in Greenland, we formally change the deed, we say 0:05:56.760 --> 0:05:59.080 we own it, and we put a few more troops 0:05:59.080 --> 0:06:05.320 in there. Just imagine how annoyed and disgusted Denmark, France 0:06:05.360 --> 0:06:07.320 and other EU countries would be with US. I mean 0:06:07.480 --> 0:06:09.240 they could turn around and say, well, look, if the 0:06:09.320 --> 0:06:12.480 United States is actually willing to cross frontiers and take 0:06:12.600 --> 0:06:15.520 land that doesn't belong to them, maybe a deal with Beijing, 0:06:15.720 --> 0:06:17.800 which to be fair to the Chinese, you know they 0:06:17.800 --> 0:06:20.440 haven't actually done that. Maybe a deal with China is 0:06:20.480 --> 0:06:22.800 in our interests long term. So I think it's there's 0:06:22.800 --> 0:06:25.320 absolutely no argument for it when you sit down and 0:06:25.320 --> 0:06:27.560 do the next calculation. If you have a simple view 0:06:27.560 --> 0:06:29.960 of the world and you think this is mine, that's theirs, 0:06:30.240 --> 0:06:32.040 then you of course, like we said before, you can 0:06:32.080 --> 0:06:35.040 draw a sharpie around an area and say it's mine. 0:06:35.200 --> 0:06:37.200 But I don't think that that's taking into account the 0:06:37.240 --> 0:06:39.000 second order effect of losing the Europeans. 0:06:39.040 --> 0:06:41.239 Well, just a reminder of what the President said last 0:06:41.279 --> 0:06:43.720 month in an address to Congress, quote, we need Greenland 0:06:43.720 --> 0:06:47.719 for national security and even international security, and we're working 0:06:47.720 --> 0:06:50.039 with everybody involved to try to get it. One way 0:06:50.120 --> 0:06:51.800 or the other, We're going to get it. 0:06:52.000 --> 0:06:52.200 You know. 0:06:52.240 --> 0:06:55.040 One of the things I think about ED two as 0:06:55.160 --> 0:06:57.000 we are watching kind of the back and forth between 0:06:57.080 --> 0:07:00.120 world leaders, I guess what I'm most obsessed with is 0:07:00.480 --> 0:07:02.960 US and China, just because they are the two big 0:07:03.000 --> 0:07:06.080 economies and determine and control. I think it's safe to 0:07:06.080 --> 0:07:09.560 say so much. Having said that, what is you know, 0:07:09.600 --> 0:07:12.400 the strategic balance as China is not that China. It 0:07:12.480 --> 0:07:14.679 was five years ago or ten years ago that maybe 0:07:14.760 --> 0:07:17.320 needed an a SIST or twenty years ago, right when 0:07:17.400 --> 0:07:21.040 so many different global companies set up shop there. We've 0:07:21.080 --> 0:07:23.960 been talking a lot about the EV market and BYD 0:07:24.240 --> 0:07:29.679 and the advancements that China has made technologically in this world. 0:07:30.120 --> 0:07:32.920 And they have done this largely by supporting so many 0:07:32.960 --> 0:07:36.640 of their industries and helping them develop. So I do wonder. 0:07:37.000 --> 0:07:40.400 We had the Whirlpool CEO on yesterday, who manufactures about 0:07:40.400 --> 0:07:42.400 eighty percent here in the United States. Eighty percent of 0:07:42.400 --> 0:07:45.320 their supply chain is here, and is someone I would 0:07:45.360 --> 0:07:48.000 say safe to say supportive of some of the terraff 0:07:48.000 --> 0:07:50.760 pushback to help him develop his domestics. 0:07:50.760 --> 0:07:53.480 He's already got the domestic production, so he's in a 0:07:53.520 --> 0:07:54.040 good position. 0:07:54.120 --> 0:07:56.640 It's in a good position. So what is like as 0:07:56.680 --> 0:07:59.680 you talk to world leaders as you travel you know 0:08:00.080 --> 0:08:02.400 some of the argument many would say that Trump has 0:08:03.000 --> 0:08:06.120 makes some sense in terms of developing some industries here, 0:08:06.120 --> 0:08:09.400 protecting our national security. What is the balance for any 0:08:09.480 --> 0:08:13.120 nation US, China or the Europe region to have that 0:08:13.520 --> 0:08:17.680 and yet kind of get along on a global basis, 0:08:17.680 --> 0:08:21.280 which is necessary for things like climate change, the environment, 0:08:21.840 --> 0:08:22.720 and so much more. 0:08:24.200 --> 0:08:27.680 Well, let's go through the exercise, Carol, and let's be 0:08:27.840 --> 0:08:31.560 fair to President Trump. I think that he deserves an 0:08:31.600 --> 0:08:36.400 A plus on his report cards for identifying global problems. 0:08:36.600 --> 0:08:39.720 This is the man that's identified that the Breton Woods 0:08:39.840 --> 0:08:42.240 trade imbalance, that is that other countries have a higher 0:08:42.240 --> 0:08:45.239 tariff rate than the US. He's the man that identified 0:08:45.240 --> 0:08:47.839 that that's out of date, and he joined the dots 0:08:47.840 --> 0:08:51.959 between that and an unsustainable fiscal position in the United States. 0:08:52.440 --> 0:08:55.480 He's also right to be fair to the president to 0:08:55.559 --> 0:08:58.400 point out that great power politics and great power behavior 0:08:58.520 --> 0:09:01.360 is a feature, not a of history, and that the 0:09:01.440 --> 0:09:03.280 United States should be ready at some point in the 0:09:03.280 --> 0:09:06.480 twenty first century for conflict. So the president, from you know, 0:09:06.640 --> 0:09:09.920 some analyst like me, gets an A plus on identifying 0:09:09.920 --> 0:09:13.520 the problems. Where we run into trouble is the execution 0:09:13.800 --> 0:09:17.320 and the suggestion that Donald Trump, alone, in his sort 0:09:17.320 --> 0:09:23.000 of chaotic ad hoc behavior, is helpfully moving the United States, 0:09:23.080 --> 0:09:26.280 its allies, and the world back into a new, more 0:09:26.320 --> 0:09:30.160 helpful equilibrium. So I don't think that that's what he's doing. Yes, 0:09:30.240 --> 0:09:33.360 the United States cannot continue to borrow the way it's 0:09:33.400 --> 0:09:36.680 borrowing and subsidize the world's security. But the way to 0:09:36.720 --> 0:09:40.520 fix that is to keep our allies closer, is to 0:09:40.559 --> 0:09:42.880 do trade deals with the people that like us, and 0:09:42.920 --> 0:09:46.080 maybe even reduce tariffs with them. So he has to 0:09:46.120 --> 0:09:48.880 get what A D A D minus. You know, I 0:09:48.920 --> 0:09:50.480 don't want to fail the guy out right, because he's 0:09:50.480 --> 0:09:52.480 the President of the United States and his success is 0:09:52.480 --> 0:09:56.280 everybody's success. But this sort of right, this chaotic approach 0:09:56.320 --> 0:09:59.080 to things, is not going to bring the world into 0:09:59.320 --> 0:10:01.960 so far as I can see, any new equilibrium, despite 0:10:02.000 --> 0:10:06.120 what Scott Besson and Marco Rubio tried to do. After 0:10:06.160 --> 0:10:07.840 Trump has spoken which is toned up in the press 0:10:07.840 --> 0:10:09.319 and say actually this is what he really meant. 0:10:09.600 --> 0:10:11.400 Yeah, it's why folks like David Brooks of The New 0:10:11.480 --> 0:10:13.800 York Times has said, you know, the President is maybe 0:10:14.360 --> 0:10:16.240 the wrong answer to the right question, because I think 0:10:16.240 --> 0:10:19.920 many would say, whether it's tariffs or geopolitics or positions 0:10:19.920 --> 0:10:21.440 in the world, that he's brought up a lot of 0:10:21.480 --> 0:10:25.720 issues that need to be dealt with and discussed ed. 0:10:25.760 --> 0:10:28.360 We apologize things have gotten a little hectic today and 0:10:28.360 --> 0:10:31.760 obviously we had to listen to President Trump there at 0:10:31.800 --> 0:10:33.680 the White House. But we hope we can get you 0:10:33.720 --> 0:10:35.880 back real soon. Really appreciate you weighing it. Ed Price 0:10:36.240 --> 0:10:40.880 always timely, senior fellow at NY You non resident senior fellow, 0:10:40.920 --> 0:10:44.480 former British trade official, joining us once again here on Bloomberg. 0:10:45.160 --> 0:10:48.720 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:48.800 --> 0:10:52.280 live weekday afternoons from two to five pm Eastern. Listen 0:10:52.280 --> 0:10:55.840 on Applecarplay and the Android Auto with the Bloomberg Business app, 0:10:56.000 --> 0:10:58.640 or watch us live on YouTube. 0:10:59.000 --> 0:11:00.960 All right, folks, we've been watching some of the airlines. 0:11:00.960 --> 0:11:02.240 I feel like we've been watching them for a few 0:11:02.280 --> 0:11:04.959 weeks at this point. But we did have American come 0:11:04.960 --> 0:11:07.840 out withdrawing its full year earnings out look, joining a 0:11:07.840 --> 0:11:12.079 growing number of companies that say unease about the US economies, 0:11:12.080 --> 0:11:14.760 making it difficult to forecast how the year will play at. 0:11:14.840 --> 0:11:18.079 You also had Alaska Air saying second quarter earnings will 0:11:18.080 --> 0:11:21.320 come in below Wall Street estimates, and then Southwest Air 0:11:21.480 --> 0:11:24.920 raining and growth this year as volatility surrounding US trade 0:11:24.960 --> 0:11:27.880 policy is chilling out consumer demand on air travel. I'm 0:11:27.920 --> 0:11:30.520 just hoping fares come down. But we are watching this sector. 0:11:30.720 --> 0:11:32.400 We've got a great voice to talk about it. 0:11:32.480 --> 0:11:34.400 Yeah, it's great to add back with someone who knows 0:11:34.400 --> 0:11:37.320 the industry so well. Sheila Kaiaalu's here. She's managing director 0:11:37.360 --> 0:11:39.920 and equity research at Jeffrey. She joins us here in 0:11:39.960 --> 0:11:42.760 the studio. How bad is it for airlines right now? 0:11:43.200 --> 0:11:45.200 It seems like it's stabilizing. It was pretty bad a 0:11:45.240 --> 0:11:46.080 month ago, and it. 0:11:46.160 --> 0:11:48.199 Was when we yea heard from Delta with drawing. 0:11:48.320 --> 0:11:51.000 Yes, Delta with drawing. We downgraded the sector to half 0:11:51.040 --> 0:11:54.200 cell ratings and underperform ratings. But that news the sort 0:11:54.200 --> 0:11:54.480 of price. 0:11:54.520 --> 0:11:54.640 Dan. 0:11:54.720 --> 0:11:57.240 That's why you're seeing American and Southwest kind of tread 0:11:57.240 --> 0:12:01.400 water today because we've seen this tape before with domestic 0:12:01.520 --> 0:12:05.600 leisure really being the soft spot off peak hours Tuesday Wednesday, 0:12:05.600 --> 0:12:09.439 Blying really not getting passenger demand. Southwest putting up seventy 0:12:09.480 --> 0:12:11.600 three percent load factors. That means the plane is about 0:12:11.600 --> 0:12:14.640 three forts full, should be eighty two to eighty five 0:12:14.679 --> 0:12:18.640 percent full. So we've seen that that's where the maronment that's. 0:12:18.520 --> 0:12:20.480 More than three percent. I was kind of shocked when 0:12:20.520 --> 0:12:22.600 I went to look at what the price was. I thought, Okay, 0:12:22.600 --> 0:12:24.439 it's going to be selling off. But you're saying most 0:12:24.440 --> 0:12:26.120 of that stuff is it's starting. 0:12:25.760 --> 0:12:28.080 To get its chriced in because we've heard it now 0:12:28.120 --> 0:12:31.680 for a month and it seems like the consumers able 0:12:31.760 --> 0:12:34.800 to hold stable. But we also have a pause on tariff, 0:12:34.840 --> 0:12:37.120 so let's see how that works itself out. We heard 0:12:37.120 --> 0:12:39.600 from Boeing this week, we heard from General Electric and Raytheon. 0:12:39.720 --> 0:12:42.800 These are aftermarket suppliers on engines, et cetera, and so 0:12:42.920 --> 0:12:45.560 what they're doing is they're cutting their departure forecast from 0:12:45.840 --> 0:12:48.079 mid single digit to low single digit. That means the 0:12:48.160 --> 0:12:51.000 numbers of planes that are taking off, but that's based 0:12:51.040 --> 0:12:54.199 on what's already happened with Delta and United cutting capacity 0:12:54.559 --> 0:12:59.240 and even Southwest cutting mildly, and they're not really seeing 0:12:59.240 --> 0:13:02.280 further weakness internationally. That's what we're hearing. That the market's 0:13:02.280 --> 0:13:05.800 holding stable over the last six to eight weeks from 0:13:06.000 --> 0:13:07.839 the fall off we saw starting March first. 0:13:07.840 --> 0:13:09.120 So how's business travel? 0:13:09.920 --> 0:13:13.400 Corporate travel seems like it's okay, but it depends on 0:13:13.440 --> 0:13:15.599 the sector in the airline. You know, Southwest was a 0:13:15.640 --> 0:13:19.360 little bit more robust. American has a very idiosyncratic story 0:13:19.360 --> 0:13:23.200 because they removed their corporate booking channels last year, so 0:13:23.240 --> 0:13:26.120 they have a super easy comp United and Delta called 0:13:26.120 --> 0:13:31.200 out weakness obviously across government customers and certain manufacturing markets 0:13:31.240 --> 0:13:33.880 like autos and even aerospace where they saw softness, but 0:13:34.400 --> 0:13:36.080 financials tech was still holding up. 0:13:36.120 --> 0:13:39.280 So we'll see not a great reveal, but we've got 0:13:39.320 --> 0:13:42.400 like two, three, four trips going out to the West 0:13:42.440 --> 0:13:44.520 Coast in like the next month or so. 0:13:44.720 --> 0:13:47.280 Yeah, and we've booked zero tickets at this point. That's 0:13:47.320 --> 0:13:47.760 fun to do. 0:13:48.000 --> 0:13:49.880 I have one booked, I have one book So what 0:13:49.960 --> 0:13:52.120 are the airlines doing in terms of pricing? I know, 0:13:52.160 --> 0:13:53.920 somebody else who was looking for a flight and saying, well, 0:13:53.920 --> 0:13:56.800 wait are there's some softness and it was so expensive. 0:13:57.120 --> 0:13:59.600 I think you go to Puerto Rico or something like 0:13:59.880 --> 0:14:00.920 a hearing in terms of pricing. 0:14:00.960 --> 0:14:03.040 Well, I haven't checked out Puerto Rico flights. I wish 0:14:03.040 --> 0:14:05.079 I would, but I met it's a Brazil and Paris 0:14:05.120 --> 0:14:07.360 and a Dallas trip coming up, and none of them 0:14:07.400 --> 0:14:10.760 are book yet. You know, folks post pandemic are booking 0:14:10.800 --> 0:14:14.360 closer in and so you don't have flights book neither 0:14:14.400 --> 0:14:16.680 do I. We haven't seen that price. I haven't seen 0:14:16.679 --> 0:14:19.400 the pricing softness. No, but the airlines are calling it out, 0:14:19.480 --> 0:14:22.200 especially in that domestic leisure market. So if we were 0:14:22.200 --> 0:14:24.840 going to Florida and May, we'd probably get a discount 0:14:24.840 --> 0:14:27.640 a ticket, or you know, Southwest called out that route 0:14:27.680 --> 0:14:31.680 from Tucson to Albany. I'd like to know the guy 0:14:31.960 --> 0:14:32.680 doing that route. 0:14:32.760 --> 0:14:35.200 But that's where they're seeing that weakness. I love you 0:14:35.200 --> 0:14:37.760 and Tucson in Albany that we're just going to say, yeah. 0:14:38.040 --> 0:14:44.160 Yeah, I do wonder about just really what's happening when 0:14:44.200 --> 0:14:46.880 you think about demand from the perspective of international travel. 0:14:47.080 --> 0:14:48.560 You said that it's kind of holding up. But at 0:14:48.560 --> 0:14:52.120 the same time, we're hearing reports that travelers coming to 0:14:52.160 --> 0:14:54.960 the US from outside of the US are holding off, 0:14:55.000 --> 0:14:57.080 and we're seeing that fall a little bit. Is that 0:14:57.200 --> 0:15:00.440 showing up yet in results or in bookings, especially for 0:15:00.480 --> 0:15:00.880 the summer? 0:15:01.320 --> 0:15:05.440 It seemed like for now international still holding up, especially 0:15:05.440 --> 0:15:10.120 with europe strength there. We heard some rumblings about Canadian weakness. 0:15:11.400 --> 0:15:13.360 Folks have sort of put an end to that, saying 0:15:13.360 --> 0:15:16.680 it's only down ten percent, not the significant numbers we've seen. 0:15:16.720 --> 0:15:20.080 So ten percent is something, it's significant, but we were 0:15:20.080 --> 0:15:22.400 seeing numbers in the realm of seventy percent, so the 0:15:22.440 --> 0:15:25.400 ten percent definitely scaled it back. So Canada is an 0:15:25.400 --> 0:15:29.400 area we've heard weakness. We saw some European airlines call 0:15:29.440 --> 0:15:33.280 out weakness coming into the US versus US originated flights 0:15:33.320 --> 0:15:36.320 to Europe are still holding out pretty well, which is interesting. 0:15:36.760 --> 0:15:38.720 Yeah, I'm kind of surprised because I do feel like 0:15:38.760 --> 0:15:41.120 there's some headlines on stories that are like, oh my god, 0:15:41.160 --> 0:15:43.800 nobody's coming in, you know, traveling to the US and 0:15:44.480 --> 0:15:47.440 or you know, even traveling elsewhere. Can we talk a 0:15:47.440 --> 0:15:50.400 little bit about Boeing, Sure, tell me you're thinking, you know, 0:15:50.480 --> 0:15:53.040 you cover the company. They've reported first quarter results exceeded 0:15:53.040 --> 0:15:56.960 Wall Street estimates. You know they've done a deal, right, 0:15:57.000 --> 0:16:01.120 getting rid of their flight navigation unity. What's how are 0:16:01.120 --> 0:16:03.760 you thinking about next six twelve months for Boeing or 0:16:03.800 --> 0:16:04.600 even longer term. 0:16:04.840 --> 0:16:07.040 I love Boeing when folks get negative, so the days 0:16:07.040 --> 0:16:09.400 when it hits one forty, when we hear about people 0:16:10.200 --> 0:16:14.400 canceling airplanes or thoughts of that. But you know, Kelly Orper, 0:16:14.480 --> 0:16:17.840 yesterday the Bowing CEO said there's no change in the skyline. 0:16:17.880 --> 0:16:20.160 Folks are waiting six years for the aircraft. They've been 0:16:20.160 --> 0:16:23.200 waiting since twenty nineteen. Right Southwest is still waiting. We're 0:16:23.240 --> 0:16:25.960 all waiting for airplanes to be delivered. No one's moving 0:16:25.960 --> 0:16:28.360 out of line. The only customer who is is China. 0:16:28.560 --> 0:16:30.400 But they've been reducing for a while. 0:16:30.520 --> 0:16:33.280 China's been reducing. They've been about twenty percent of deliveries. 0:16:33.320 --> 0:16:36.560 They're actually only five to seven percent of the official backlog, 0:16:36.880 --> 0:16:40.720 but Chinese operators use undisclosed, So yesterday we know that 0:16:40.800 --> 0:16:44.280 it's about fifteen percent of deliveries this year. In the 0:16:44.320 --> 0:16:48.000 first quarter, Boeing delivered eighteen aircraft to China. They expect 0:16:48.000 --> 0:16:50.240 another fifty for the full year, and our estimates are 0:16:50.280 --> 0:16:52.440 around four hundred and seventy five. So China is a 0:16:52.520 --> 0:16:54.760 risk and probably why Boeing didn't sound a little bit 0:16:54.760 --> 0:16:57.280 more bullish. But they seem like things are working well 0:16:57.320 --> 0:16:59.640 with the ramp on the three seven and all the 0:16:59.680 --> 0:17:00.600 rest of the skyline. 0:17:00.600 --> 0:17:02.920 The President sending a message on his social media platform 0:17:02.920 --> 0:17:05.880 this morning about Boeing, saying, quote, Boeing should default China 0:17:05.920 --> 0:17:08.680 for not taking the beautifully finished planes that China committed 0:17:08.680 --> 0:17:11.080 to purchase. This is just a small example of what 0:17:11.200 --> 0:17:15.800 China has done to the USA for years, the Washington 0:17:15.840 --> 0:17:18.399 involvement with Boeing, for better or for worse. I mean, 0:17:18.440 --> 0:17:20.119 there's been a lot of criticism too, come from the 0:17:20.119 --> 0:17:22.840 President about the new version of Air Force one, the 0:17:22.880 --> 0:17:27.560 seven forty seven. Ken Boeing just sell those planes to 0:17:27.600 --> 0:17:30.160 other countries because there is such a backlog if China 0:17:30.240 --> 0:17:30.960 were to dry up. 0:17:31.040 --> 0:17:33.000 I think there was a headline about an hour ago 0:17:33.040 --> 0:17:35.800 saying Air India might buy those Chinese planes. So here's 0:17:35.840 --> 0:17:37.520 a note we put out three weeks ago. It was 0:17:37.560 --> 0:17:39.399 called how many planes does it take to get to 0:17:39.400 --> 0:17:42.119 the bottom of the trade deficit? When you think about 0:17:42.160 --> 0:17:45.199 aerospace and defense. It is the only manufacturing center with 0:17:45.400 --> 0:17:49.119 a sector with a sixty two billion dollar surplus. So 0:17:49.200 --> 0:17:51.080 what can you buy if you have a trade deficit 0:17:51.160 --> 0:17:54.040 that costs seventy million or four hundred million an airplane? 0:17:54.080 --> 0:17:56.240 It's easily trackable. So we did a note where we 0:17:56.280 --> 0:17:59.280 looked at every one point of reduction to the Chinese 0:17:59.359 --> 0:18:01.359 US deficode, which is two hundred and finety five billion 0:18:01.720 --> 0:18:04.159 is about fifty plans. So obviously it would take a 0:18:04.240 --> 0:18:05.639 lot of planes from China. 0:18:05.400 --> 0:18:06.240 To offset it. 0:18:06.320 --> 0:18:09.199 But it's a good chip President Trump could put on 0:18:09.240 --> 0:18:10.040 the table for folks. 0:18:10.320 --> 0:18:13.120 All right, on your radar for Boeing last twenty seconds, 0:18:13.359 --> 0:18:14.240 just watch what. 0:18:15.160 --> 0:18:17.920 Free cash flow and max production. That's all that matters. 0:18:18.000 --> 0:18:20.080 All right, great stuff, Thank you so much, sheille I 0:18:20.080 --> 0:18:23.000 really appreciate it. She's managing director and equity research over 0:18:23.040 --> 0:18:25.360 at Jeffreys, joining us here in studio. 0:18:27.560 --> 0:18:31.359 This is the Bloomberg Business Week Podcast. Listen live each 0:18:31.359 --> 0:18:34.359 weekday starting at two pm Eastern on Apple car Play 0:18:34.440 --> 0:18:37.280 and Android Auto with the Bloomberg Business App. You can 0:18:37.320 --> 0:18:40.479 also listen live on Amazon Alexa from our flagship New 0:18:40.560 --> 0:18:44.480 York station, just Say Alexa played Bloomberg eleven thirty. 0:18:45.400 --> 0:18:47.159 Three point eight percent of the upside is where we 0:18:47.200 --> 0:18:50.679 see shares of Alphabet, the parent company of Google. The 0:18:50.720 --> 0:18:54.600 company reported first quarter revenue and profit that exceeded analysts expectations. 0:18:54.640 --> 0:18:58.600 It was bullied by continued strength in its search advertising business. 0:18:58.800 --> 0:19:00.399 And that's exactly where we want to go. 0:19:00.440 --> 0:19:00.560 Now. 0:19:00.600 --> 0:19:02.720 We've got back with us Mark Douglas. He's president and 0:19:02.760 --> 0:19:05.760 CEO of Mountain. The company is software that helps companies 0:19:05.760 --> 0:19:10.040 target advertising on smart TVs. He understands the ad spend market. 0:19:10.080 --> 0:19:12.399 He joins us from Miami. Mark, good to talk with 0:19:12.440 --> 0:19:16.480 you again. Does this surprise you given the trends that 0:19:16.520 --> 0:19:18.000 you're seeing when it comes to advertising? 0:19:19.080 --> 0:19:23.560 Not given the trends I think the trends for I 0:19:23.600 --> 0:19:25.800 want to talk more specifically about Google. 0:19:26.000 --> 0:19:26.200 Yeah. 0:19:26.200 --> 0:19:28.399 I think we started the you know, we started the 0:19:28.480 --> 0:19:32.960