1
00:00:00,080 --> 00:00:06,760
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

2
00:00:11,600 --> 00:00:15,440
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

3
00:00:15,440 --> 00:00:18,400
Speaker 2: with Lisa Bromwitz and a Marie Hordern. Join us each

4
00:00:18,480 --> 00:00:21,360
Speaker 2: day for insight from the best in markets, economics, and

5
00:00:21,400 --> 00:00:24,720
Speaker 2: geopolitics from our global headquarters in New York City. We

6
00:00:24,760 --> 00:00:27,400
Speaker 2: are live on Bloomberg Television weekday mornings from six to

7
00:00:27,480 --> 00:00:31,000
Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify

8
00:00:31,200 --> 00:00:33,479
Speaker 2: or anywhere else you listen, and as always on the

9
00:00:33,479 --> 00:00:35,840
Speaker 2: Bloomberg Terminal and the Bloomberg Business App.

10
00:00:36,520 --> 00:00:38,960
Speaker 1: Steve Englander of stand Chart joins us.

11
00:00:39,000 --> 00:00:39,280
Speaker 3: Now.

12
00:00:39,440 --> 00:00:41,640
Speaker 1: Steve, thank you so much for joining us. So this

13
00:00:41,840 --> 00:00:44,599
Speaker 1: was pretty much baked in. But really, depending on where

14
00:00:44,760 --> 00:00:47,400
Speaker 1: US policy goes, is that going to be the deciding

15
00:00:47,440 --> 00:00:49,400
Speaker 1: factor for this BOJ.

16
00:00:51,680 --> 00:00:55,440
Speaker 4: Well, you know, if you read and watch what the

17
00:00:55,440 --> 00:00:59,680
Speaker 4: boj is saying. Yesterday, they lifted up their inflation forecast,

18
00:00:59,760 --> 00:01:02,200
Speaker 4: talk talked about upside risk. I actually think that a

19
00:01:02,240 --> 00:01:06,240
Speaker 4: lot of this is driven by what's happening in Japan.

20
00:01:07,600 --> 00:01:12,920
Speaker 4: The timing, I think is dictated by concerns over you know,

21
00:01:13,040 --> 00:01:16,679
Speaker 4: is it going to be you know, full Trump or

22
00:01:16,760 --> 00:01:19,440
Speaker 4: mini Trump in terms of the policy actions that he's

23
00:01:19,480 --> 00:01:22,880
Speaker 4: taking in the disruption that he causes. But it's you know,

24
00:01:23,120 --> 00:01:25,600
Speaker 4: I think the big surprise yesterday because a lot of

25
00:01:25,600 --> 00:01:28,480
Speaker 4: people came into the meeting thinking that Boj was going

26
00:01:28,560 --> 00:01:31,919
Speaker 4: to hike and then say, you know, we can afford

27
00:01:31,920 --> 00:01:35,000
Speaker 4: to wait. They seem to have much more intensity about

28
00:01:35,000 --> 00:01:37,360
Speaker 4: further hikes. We think that's all hike twice more this year,

29
00:01:37,400 --> 00:01:38,640
Speaker 4: going up to one.

30
00:01:38,480 --> 00:01:42,839
Speaker 5: Percent, and yet it's a yen that's reaction has kind

31
00:01:42,880 --> 00:01:47,520
Speaker 5: of disappeared from this market. Steve, your interpretation seems to

32
00:01:47,560 --> 00:01:50,720
Speaker 5: be one of a more hawkish Ueita and Boj than

33
00:01:50,760 --> 00:01:53,720
Speaker 5: perhaps this market was expecting. Are you surprised we're not

34
00:01:53,760 --> 00:01:56,040
Speaker 5: seeing more strength at this moment from the end.

35
00:01:57,080 --> 00:02:00,600
Speaker 4: Yeah, I'm actually doubly surprised, because you know, it's not

36
00:02:00,680 --> 00:02:05,240
Speaker 4: responding obviously to the sort of great differential story and

37
00:02:05,920 --> 00:02:09,640
Speaker 4: at the short end, and in addition, in the past

38
00:02:09,639 --> 00:02:13,480
Speaker 4: that's actually been pretty well correlated with CNH and the

39
00:02:13,520 --> 00:02:15,760
Speaker 4: fact that the CNH has strengthened a lot and yet

40
00:02:15,840 --> 00:02:17,800
Speaker 4: hasn't said, you know, done much this week.

41
00:02:17,840 --> 00:02:19,919
Speaker 6: I think is remains a surprise.

42
00:02:20,080 --> 00:02:23,000
Speaker 4: But I think if the market begins to think that

43
00:02:23,080 --> 00:02:25,320
Speaker 4: the BOJ is serious about hiking.

44
00:02:26,960 --> 00:02:29,519
Speaker 6: You know, we'll see those great differentials clothes.

45
00:02:29,560 --> 00:02:32,760
Speaker 4: I mean, the rates gap between the UK and Switzerland

46
00:02:33,000 --> 00:02:36,840
Speaker 4: is actually quite much wider than between the US and Japan.

47
00:02:37,480 --> 00:02:40,480
Speaker 4: So I think that the you know, that story over time,

48
00:02:40,560 --> 00:02:41,480
Speaker 4: I think will evolve.

49
00:02:42,120 --> 00:02:45,000
Speaker 5: Steve, maybe we can add tripley surprise to this, because

50
00:02:45,040 --> 00:02:49,120
Speaker 5: this is the week of Trump's inauguration, most asset classes

51
00:02:49,160 --> 00:02:51,359
Speaker 5: have been trading and arranged. The place that we've seen

52
00:02:51,400 --> 00:02:54,839
Speaker 5: the most volatility has come from this currency market, whether

53
00:02:54,960 --> 00:02:58,600
Speaker 5: it be dollar, mex whether it be the Canadian looney.

54
00:02:59,080 --> 00:03:01,760
Speaker 5: That's where we've seen the even strength coming from the euro.

55
00:03:01,880 --> 00:03:03,720
Speaker 5: What do you make of the fact that it's been

56
00:03:03,919 --> 00:03:06,440
Speaker 5: FX this week, the asset class that's seen the most

57
00:03:06,560 --> 00:03:09,160
Speaker 5: reactiveness to the things coming from the Trump administration.

58
00:03:10,639 --> 00:03:12,720
Speaker 6: Well, the way I see it, and if you if

59
00:03:12,760 --> 00:03:13,280
Speaker 6: you look at what.

60
00:03:13,280 --> 00:03:17,280
Speaker 4: Happened, say from the beginning of October when Trump presidential

61
00:03:17,320 --> 00:03:19,960
Speaker 4: out started going up to you know, say the middle

62
00:03:20,000 --> 00:03:24,480
Speaker 4: of last week, dollar strengthened way ahead, way beyond what

63
00:03:24,560 --> 00:03:27,919
Speaker 4: interest rate differentials were telling you it should strengthen. And

64
00:03:28,200 --> 00:03:30,360
Speaker 4: we think a lot of that was risk premium markets

65
00:03:30,360 --> 00:03:33,799
Speaker 4: were going into the inauguration thinking sixty percent Haras on China,

66
00:03:33,919 --> 00:03:36,880
Speaker 4: you know whatever, ten percent to twenty five percent, on

67
00:03:37,680 --> 00:03:41,040
Speaker 4: the US's friends in the world, and a lot of

68
00:03:41,120 --> 00:03:43,760
Speaker 4: risk premium, I think, and the focus was the FX

69
00:03:43,840 --> 00:03:47,360
Speaker 4: market because that was kind of ground zero for where

70
00:03:47,400 --> 00:03:49,800
Speaker 4: all of this would play out. And so I think

71
00:03:49,800 --> 00:03:52,120
Speaker 4: what we're seeing is then unwind of that. You know,

72
00:03:52,160 --> 00:03:54,440
Speaker 4: there's still a bit to go, but you know, euro

73
00:03:54,520 --> 00:03:56,600
Speaker 4: could go up one percent and you could say it's

74
00:03:56,680 --> 00:03:59,120
Speaker 4: risk premium. If it went up three percent, it would

75
00:03:59,120 --> 00:04:02,000
Speaker 4: have to be something beyond that at this stage.

76
00:04:03,440 --> 00:04:08,640
Speaker 7: Steve Michael Purvis here this is maybe a slightly bizarre question,

77
00:04:08,680 --> 00:04:11,520
Speaker 7: but do you think Trump can make Europe great again?

78
00:04:11,600 --> 00:04:15,320
Speaker 7: And what I mean by that is will if he

79
00:04:15,440 --> 00:04:20,560
Speaker 7: goes aggressive on Europe, will it put the European countries,

80
00:04:20,960 --> 00:04:23,719
Speaker 7: for example Germany in a place where they're going to

81
00:04:23,720 --> 00:04:27,320
Speaker 7: be more fiscally expansive than they have been in the

82
00:04:27,360 --> 00:04:30,760
Speaker 7: past and maybe even putting some reforms into their economies.

83
00:04:31,480 --> 00:04:35,039
Speaker 7: There is that a scenario that we should be looking at.

84
00:04:36,040 --> 00:04:38,479
Speaker 4: It couldn't be, but you know, I worked at the

85
00:04:38,880 --> 00:04:42,520
Speaker 4: OECD thirty years ago and in the same structural issues

86
00:04:43,160 --> 00:04:45,880
Speaker 4: that are still existing in Europe existed.

87
00:04:45,920 --> 00:04:47,679
Speaker 6: Then it's a generation and a half ago.

88
00:04:48,839 --> 00:04:50,960
Speaker 4: I do think you're right, and we think you're right

89
00:04:51,040 --> 00:04:54,479
Speaker 4: that there's a chance that say, if we you know,

90
00:04:54,520 --> 00:04:57,600
Speaker 4: we have a change in government, not to the a

91
00:04:57,680 --> 00:05:00,000
Speaker 4: FD of course, but to the center and the strong

92
00:05:00,000 --> 00:05:05,040
Speaker 4: longer cent as government, that they will sort of ease

93
00:05:05,160 --> 00:05:08,680
Speaker 4: up on the death situation and they could do more

94
00:05:08,680 --> 00:05:11,919
Speaker 4: fiscal expansion. I mean, if I had to bet on

95
00:05:11,960 --> 00:05:15,840
Speaker 4: Europe changing policy for whatever reason, they may change macro.

96
00:05:16,360 --> 00:05:19,600
Speaker 4: They seem determined not to do the sorts of things

97
00:05:19,600 --> 00:05:23,400
Speaker 4: that you and I would call structural, fundamental micro structural reforms.

98
00:05:24,200 --> 00:05:26,400
Speaker 1: Wow, Steve England or thank you so much for joining

99
00:05:26,480 --> 00:05:37,840
Speaker 1: us this morning. Begin this hour, though with stocks at

100
00:05:37,839 --> 00:05:40,560
Speaker 1: record highs after President Trump said he would rather not

101
00:05:40,920 --> 00:05:44,560
Speaker 1: impose tariffs on China, Margie Patel of all Spring Global Investments,

102
00:05:44,600 --> 00:05:48,440
Speaker 1: writing quote, Trump administration has announced many changes to regulations

103
00:05:48,480 --> 00:05:51,200
Speaker 1: and new initiatives. It is too early to judge their

104
00:05:51,240 --> 00:05:54,440
Speaker 1: effects in the economy and financial markets, but we believe

105
00:05:54,560 --> 00:05:57,279
Speaker 1: many will reinforce the areas of the economy which we

106
00:05:57,360 --> 00:06:00,600
Speaker 1: have expected strong growth. And Margie joins us. Now, thank

107
00:06:00,640 --> 00:06:03,080
Speaker 1: you so much for joining us this morning. I would

108
00:06:03,120 --> 00:06:05,240
Speaker 1: love to just get your reaction to the past twenty

109
00:06:05,240 --> 00:06:09,520
Speaker 1: four hours. And what surprised you the most about what

110
00:06:09,520 --> 00:06:12,640
Speaker 1: we've heard from forty seventh President Donald Trump and the

111
00:06:12,680 --> 00:06:17,560
Speaker 1: second administration seemingly touching every part of global financial markets.

112
00:06:19,560 --> 00:06:22,599
Speaker 8: Well, I think that's really coming out strong and stating

113
00:06:22,600 --> 00:06:25,680
Speaker 8: a lot of his positions and positions as you pointed out,

114
00:06:25,720 --> 00:06:28,359
Speaker 8: maybe he doesn't expect to be achieved, but it's a

115
00:06:28,360 --> 00:06:30,080
Speaker 8: good place to negotiate from.

116
00:06:30,600 --> 00:06:31,600
Speaker 9: And I think the most.

117
00:06:31,360 --> 00:06:35,560
Speaker 8: Important thing, frankly, is that the idea of higher taxes

118
00:06:35,640 --> 00:06:37,599
Speaker 8: is totally off the board. That was a big risk

119
00:06:37,680 --> 00:06:40,640
Speaker 8: of the market last year looking out into twenty twenty five.

120
00:06:40,720 --> 00:06:43,120
Speaker 8: So I think that's the number one important thing is

121
00:06:43,760 --> 00:06:47,160
Speaker 8: no increases in taxes and maybe even some lower taxes

122
00:06:47,200 --> 00:06:49,760
Speaker 8: as well as lower regulation, which of course will be

123
00:06:49,839 --> 00:06:51,160
Speaker 8: very positive for the markets.

124
00:06:51,320 --> 00:06:54,000
Speaker 5: Margie, you are describing as status quo of sorts though,

125
00:06:54,120 --> 00:06:56,720
Speaker 5: just an extension of the tax cuts. And Anne Marie

126
00:06:56,800 --> 00:06:59,640
Speaker 5: got to this when she was reading some of your thoughts.

127
00:07:00,080 --> 00:07:02,960
Speaker 5: How do you disaggregate the strength that this market is

128
00:07:03,040 --> 00:07:06,280
Speaker 5: pricing in and the continued strength of equities just being

129
00:07:06,279 --> 00:07:10,000
Speaker 5: a good business environment from a strong starting place versus

130
00:07:10,040 --> 00:07:14,000
Speaker 5: actual policy. How dominant will politics actually be for risk assets.

131
00:07:15,720 --> 00:07:18,280
Speaker 8: Well, I hope not too strong. I hope that the

132
00:07:18,360 --> 00:07:21,600
Speaker 8: changes that are made will in fact reinforce the areas

133
00:07:21,640 --> 00:07:24,080
Speaker 8: of strong growth that we've seen. And I think this

134
00:07:24,280 --> 00:07:26,880
Speaker 8: year is going to be another year of continuing trends

135
00:07:26,880 --> 00:07:31,480
Speaker 8: where technology is very strong, data center investments is very strong,

136
00:07:31,800 --> 00:07:35,040
Speaker 8: Improving electrical grid is very strong, and we'll see more

137
00:07:35,080 --> 00:07:38,400
Speaker 8: investment in our domestic energy sector. So those were all

138
00:07:38,400 --> 00:07:40,800
Speaker 8: in play last year and I think they'll continue and

139
00:07:40,840 --> 00:07:43,960
Speaker 8: this will be another year of surprisingly good profits and

140
00:07:44,040 --> 00:07:45,680
Speaker 8: a surprisingly good equity market.

141
00:07:46,000 --> 00:07:48,080
Speaker 5: There has been a shift though, over the past month

142
00:07:48,160 --> 00:07:51,280
Speaker 5: or so, since about mid December, marking what you've seen outperform.

143
00:07:51,560 --> 00:07:57,920
Speaker 5: It's been energy, utilities, industrials, financial cyclical parts of this

144
00:07:58,040 --> 00:08:00,360
Speaker 5: market that are sensitive to growth. It is this extreme

145
00:08:00,440 --> 00:08:03,800
Speaker 5: growth optimism that we're pricing in. Does that continue on

146
00:08:03,960 --> 00:08:05,920
Speaker 5: or do we have an amend that makes us run

147
00:08:05,960 --> 00:08:07,920
Speaker 5: back to the safety corners of the mag seven.

148
00:08:09,440 --> 00:08:12,160
Speaker 8: Well, I don't think it's extreme optimism. I think when

149
00:08:12,200 --> 00:08:15,440
Speaker 8: you look basically, putting aside the politics and we may

150
00:08:15,600 --> 00:08:18,720
Speaker 8: get out of the new administration, is the US economy

151
00:08:18,840 --> 00:08:22,080
Speaker 8: is really in good shape. We're growing at a sustained level,

152
00:08:22,120 --> 00:08:24,000
Speaker 8: of you know, say two two and a half percent,

153
00:08:24,520 --> 00:08:27,200
Speaker 8: and there are signs that growth may even be stronger,

154
00:08:27,320 --> 00:08:30,600
Speaker 8: maybe closer to three percent. So that's really very very positive,

155
00:08:30,600 --> 00:08:32,600
Speaker 8: and that would allow the stock market to be up

156
00:08:32,679 --> 00:08:36,640
Speaker 8: say a ten twelve percent conservatively this year, maybe even higher.

157
00:08:36,880 --> 00:08:39,840
Speaker 8: So I think the surprises might be continued growth and

158
00:08:39,920 --> 00:08:42,400
Speaker 8: maybe even stronger than we're expected. Maybe that's what the

159
00:08:42,440 --> 00:08:47,479
Speaker 8: market is really telegraphing, is continuation and further strengthening, particularly

160
00:08:47,559 --> 00:08:50,160
Speaker 8: when we see these other areas that have broadened.

161
00:08:49,720 --> 00:08:50,440
Speaker 10: Out a little bit.

162
00:08:52,400 --> 00:08:55,800
Speaker 7: Margie, one question for you. You know, we're dealing with

163
00:08:55,840 --> 00:08:58,280
Speaker 7: a very high valuation on the S and P five

164
00:08:58,400 --> 00:09:02,760
Speaker 7: hundred and through a lot of the sub and disease there.

165
00:09:02,920 --> 00:09:04,720
Speaker 7: You know, it's about you know, sort of top two

166
00:09:04,800 --> 00:09:10,760
Speaker 7: percent valuations here. Do you see at multiple compression as

167
00:09:10,800 --> 00:09:12,719
Speaker 7: sort of something that's going to happen or do you

168
00:09:12,760 --> 00:09:15,679
Speaker 7: think the market will the earnings will be so explosive

169
00:09:15,679 --> 00:09:18,440
Speaker 7: this year that it will actually bring the multiple down

170
00:09:18,520 --> 00:09:22,040
Speaker 7: to more normalized levels that way, Well.

171
00:09:22,120 --> 00:09:24,200
Speaker 8: I don't think the market is you know, an average

172
00:09:24,240 --> 00:09:26,440
Speaker 8: doesn't tell you the whole story. If you look, you

173
00:09:26,520 --> 00:09:29,000
Speaker 8: have a small, relatively small number of stocks that have

174
00:09:29,160 --> 00:09:32,120
Speaker 8: very high growth, you know, earnings growth of say twenty percent.

175
00:09:32,520 --> 00:09:34,760
Speaker 8: Those are the ones that are trading at big premiums

176
00:09:34,800 --> 00:09:37,200
Speaker 8: for PE. And then a lot of the market that's

177
00:09:37,760 --> 00:09:41,319
Speaker 8: actually having very low growth has a relatively more modest PE.

178
00:09:41,360 --> 00:09:43,439
Speaker 8: So when you put it together, it looks optically a

179
00:09:43,480 --> 00:09:45,960
Speaker 8: little higher. But I think the market is fairly priced,

180
00:09:46,280 --> 00:09:48,040
Speaker 8: and I think that a lot of the uncertainty that

181
00:09:48,120 --> 00:09:51,679
Speaker 8: we have has has really gone out. There's a more

182
00:09:51,720 --> 00:09:54,400
Speaker 8: positive outlook. I do think though last year we had

183
00:09:54,480 --> 00:09:57,200
Speaker 8: a lot of our total return in the standard pores,

184
00:09:57,240 --> 00:10:00,559
Speaker 8: which was up twenty five percent, was due to expansion

185
00:10:00,600 --> 00:10:03,480
Speaker 8: of the price earnings multiple. I think this year we'll

186
00:10:03,480 --> 00:10:07,160
Speaker 8: probably see more companies whose earnings are high will get

187
00:10:07,360 --> 00:10:10,280
Speaker 8: a higher stock price, and not that expansion in PE

188
00:10:10,480 --> 00:10:14,200
Speaker 8: just really look more dependent on the profit growth of companies.

189
00:10:14,679 --> 00:10:15,079
Speaker 11: Gotcha.

190
00:10:15,840 --> 00:10:17,840
Speaker 7: So PE's going to stay where they are. But are

191
00:10:17,920 --> 00:10:20,560
Speaker 7: you Are you bullish on the rotation away from big

192
00:10:20,600 --> 00:10:24,960
Speaker 7: tech in the more cyclical parts right now?

193
00:10:26,480 --> 00:10:28,800
Speaker 8: Well, I think only those cyclical parts that are part

194
00:10:28,840 --> 00:10:32,440
Speaker 8: of this more secular change in secular growth, which is

195
00:10:32,480 --> 00:10:35,560
Speaker 8: I think the reshoring back to America is real and

196
00:10:35,600 --> 00:10:38,480
Speaker 8: it's going to continue. I think the investment we need

197
00:10:38,520 --> 00:10:42,400
Speaker 8: for data centers is a decade long process. And also

198
00:10:42,559 --> 00:10:45,840
Speaker 8: the electrical grid, which looks very stable for a long time,

199
00:10:45,920 --> 00:10:48,800
Speaker 8: now suddenly looks as if we'll have growth in demand

200
00:10:48,880 --> 00:10:51,840
Speaker 8: for power and we need to strengthen the grid expanding it.

201
00:10:52,080 --> 00:10:54,880
Speaker 8: So that's a lot of additional revenue for the industrial

202
00:10:54,960 --> 00:10:57,480
Speaker 8: sector and technology is part of that. So we think

203
00:10:57,480 --> 00:11:00,520
Speaker 8: those will continue. And the energy, domestic energy, it looks

204
00:11:00,600 --> 00:11:02,319
Speaker 8: now as if there was sort of a cloud over

205
00:11:02,640 --> 00:11:05,880
Speaker 8: that energy sector, I think is actually more positive. We

206
00:11:05,880 --> 00:11:08,160
Speaker 8: may see more investment from the energy sector.

207
00:11:08,559 --> 00:11:11,480
Speaker 1: It's something Washington, DC is definitely focused on, whether it's

208
00:11:11,520 --> 00:11:14,640
Speaker 1: AI data centers or just unleashing more when it comes

209
00:11:14,640 --> 00:11:17,560
Speaker 1: to American energy. Margie Patel, thank you so much for

210
00:11:17,559 --> 00:11:20,520
Speaker 1: your time this morning. Of course, of all Spring global investments,

211
00:11:30,600 --> 00:11:33,400
Speaker 1: Mohammab and Salman made a six hundred billion dollar pledge

212
00:11:33,440 --> 00:11:37,360
Speaker 1: to Trump on Wednesday. Former senior US intelligence official Norman

213
00:11:37,440 --> 00:11:40,880
Speaker 1: Rule calling the pledge quote powerful evidence that real believes

214
00:11:40,880 --> 00:11:44,400
Speaker 1: the US will remain its foundational security and economic partner

215
00:11:44,640 --> 00:11:47,440
Speaker 1: for decades. Norman, thank you so much for joining us

216
00:11:47,480 --> 00:11:50,400
Speaker 1: this morning. He's also part of CSIS. When it comes

217
00:11:50,440 --> 00:11:53,240
Speaker 1: to the Saudi's investing this amount of money into the

218
00:11:53,320 --> 00:11:55,439
Speaker 1: United States. Now Trump up a nanny and saying, maybe

219
00:11:55,480 --> 00:11:56,839
Speaker 1: we can get to a trillion dollars. Like the way

220
00:11:56,880 --> 00:11:59,160
Speaker 1: that sounds better at the end of the day is

221
00:11:59,280 --> 00:12:01,760
Speaker 1: just as Red choosing Washington over Beijing.

222
00:12:03,760 --> 00:12:04,360
Speaker 11: Good morning.

223
00:12:04,600 --> 00:12:08,360
Speaker 3: In part, this is Riod choosing Washington over the world.

224
00:12:08,720 --> 00:12:12,200
Speaker 3: But this is also Riod choosing the American high tech

225
00:12:12,280 --> 00:12:17,000
Speaker 3: sector over the world. Saudi Arabia's drivers are the success

226
00:12:17,040 --> 00:12:20,760
Speaker 3: of the Vision twenty thirty, transformation of its society as

227
00:12:20,800 --> 00:12:25,840
Speaker 3: well as its economy. It believes that artificial intelligence will

228
00:12:26,160 --> 00:12:31,280
Speaker 3: accelerate that process, provide jobs for a rising generation, transform

229
00:12:31,400 --> 00:12:34,680
Speaker 3: the kingdom's industries, and all of that goodness, all of

230
00:12:34,720 --> 00:12:38,480
Speaker 3: that power will come from a long term relationship with

231
00:12:38,520 --> 00:12:39,400
Speaker 3: the United States.

232
00:12:39,679 --> 00:12:41,959
Speaker 5: It's not the only place that Trump made headlines when

233
00:12:41,960 --> 00:12:44,120
Speaker 5: it comes to Saudi. Norm he also said that he

234
00:12:44,160 --> 00:12:47,400
Speaker 5: would ask Saudi to lower the price of oil. Is

235
00:12:47,440 --> 00:12:50,320
Speaker 5: that relationship strong enough? Is what Saudi gets out of

236
00:12:50,360 --> 00:12:53,319
Speaker 5: the US when it comes to economic security. Some of

237
00:12:53,320 --> 00:12:56,240
Speaker 5: the things you're talking about enough of an incentive for

238
00:12:56,320 --> 00:12:59,040
Speaker 5: them to act in a way that might be against

239
00:12:59,240 --> 00:13:01,199
Speaker 5: some of their economic benefit.

240
00:13:02,400 --> 00:13:06,000
Speaker 3: Well, here's it. Becomes more complicated. First, this is an

241
00:13:06,000 --> 00:13:09,680
Speaker 3: OPECK plus decision. There are some OPECK plus members that

242
00:13:09,880 --> 00:13:13,400
Speaker 3: might be willing to produce more, but some are at capacity.

243
00:13:13,520 --> 00:13:17,400
Speaker 3: So this really does just leave Saudi Arabia, the Emirates

244
00:13:17,480 --> 00:13:18,120
Speaker 3: and Kuwait.

245
00:13:18,440 --> 00:13:20,800
Speaker 11: But there's a bit of a tension here.

246
00:13:21,240 --> 00:13:25,360
Speaker 3: The lower oil prices become, the less revenue Sadi will

247
00:13:25,360 --> 00:13:28,400
Speaker 3: have to invest, not only in its Vision twenty thirty

248
00:13:28,400 --> 00:13:31,360
Speaker 3: domestic plans, but within the United States itself.

249
00:13:31,640 --> 00:13:33,479
Speaker 11: So I think you're looking at oil.

250
00:13:33,240 --> 00:13:36,959
Speaker 3: Prices that once they would say, reach the sixty dollars sixties,

251
00:13:37,640 --> 00:13:40,240
Speaker 3: really cutting into the amount of money that Saudi Arabia

252
00:13:40,280 --> 00:13:43,679
Speaker 3: would have to put it to meet its investment promises

253
00:13:43,720 --> 00:13:44,800
Speaker 3: to the Trump administration.

254
00:13:45,800 --> 00:13:48,600
Speaker 10: That's one of the contradictions of asking for more production

255
00:13:48,679 --> 00:13:50,520
Speaker 10: if you think it's going to lower prices, because in

256
00:13:50,559 --> 00:13:52,880
Speaker 10: the end, what you end up doing is saying, Okay,

257
00:13:53,080 --> 00:13:55,920
Speaker 10: where's that volume versus price argument? And so I think

258
00:13:55,960 --> 00:13:58,880
Speaker 10: that they probably have the most spare capacity, But you

259
00:13:58,920 --> 00:14:02,400
Speaker 10: could also vision that there might be a small give

260
00:14:02,480 --> 00:14:04,880
Speaker 10: back on production because they are holding some back as

261
00:14:04,880 --> 00:14:07,120
Speaker 10: opposed to a major giveback on production. Do you have

262
00:14:07,160 --> 00:14:09,440
Speaker 10: any thought about how that actually plays out? In the

263
00:14:09,440 --> 00:14:11,160
Speaker 10: real world as opposed to just a request.

264
00:14:12,400 --> 00:14:15,800
Speaker 11: Sure, the Kingdom has two primary goals market.

265
00:14:15,559 --> 00:14:22,200
Speaker 3: Stability and maintaining a capacity to be a swing producer

266
00:14:22,440 --> 00:14:26,080
Speaker 3: driver to prevent any sudden shifts within the market. That

267
00:14:26,080 --> 00:14:28,480
Speaker 3: will drive a relationship with Russia because they have a

268
00:14:28,520 --> 00:14:32,040
Speaker 3: capacity to impact the market. But the Kingdom actually has

269
00:14:32,200 --> 00:14:35,240
Speaker 3: less control over what happens in the United States in

270
00:14:35,320 --> 00:14:38,360
Speaker 3: terms of its market. So we're sort of reaching the

271
00:14:38,760 --> 00:14:40,960
Speaker 3: end or the high point of what fracking can do.

272
00:14:41,040 --> 00:14:44,360
Speaker 3: The Kingdom can produce probably another million or two million

273
00:14:44,400 --> 00:14:47,520
Speaker 3: barrels of on the market. The Emirates could do the

274
00:14:47,560 --> 00:14:49,760
Speaker 3: same thing, and I think some from Kuwait. But I

275
00:14:49,760 --> 00:14:52,160
Speaker 3: think in the end, stability in the market is going

276
00:14:52,240 --> 00:14:54,840
Speaker 3: to be the driver that shapes where OPEC plus goes.

277
00:14:55,480 --> 00:14:58,080
Speaker 1: Norm When it comes to the three big adversaries in

278
00:14:58,080 --> 00:15:01,120
Speaker 1: the United States, China, Russian Iron we've seen President Trump

279
00:15:01,200 --> 00:15:04,200
Speaker 1: in his first week really focus in on Russia and

280
00:15:04,280 --> 00:15:06,440
Speaker 1: putting the onus on Putin to get to the table.

281
00:15:06,720 --> 00:15:09,000
Speaker 1: What's the strategy when it comes to ending this war.

282
00:15:10,200 --> 00:15:12,480
Speaker 11: Well, I think the strategy is clear.

283
00:15:12,960 --> 00:15:16,200
Speaker 3: First, he has assigned General Keith Kellogg, a very experienced

284
00:15:16,280 --> 00:15:19,720
Speaker 3: national security official, to work this and General Kellogg's work

285
00:15:19,800 --> 00:15:23,360
Speaker 3: is continuing, but it is low profile. Second, he has

286
00:15:23,400 --> 00:15:25,440
Speaker 3: gone to the Ukrainians and has said, you know, you

287
00:15:25,520 --> 00:15:28,280
Speaker 3: need a deal. But at the same time, just as

288
00:15:28,320 --> 00:15:32,720
Speaker 3: Trump produces to encourages NATO to increase his spending against Russia,

289
00:15:32,920 --> 00:15:37,200
Speaker 3: he has encouraged Ukraine to enlist eighteen to twenty five

290
00:15:37,280 --> 00:15:41,320
Speaker 3: year olds in its army. So I think Ukraine, he believes,

291
00:15:41,400 --> 00:15:43,560
Speaker 3: is ready for a deal, but Russia.

292
00:15:43,240 --> 00:15:45,520
Speaker 11: Has yet to come to the table in a meaningful way.

293
00:15:45,560 --> 00:15:49,520
Speaker 3: And that explains the President's comments on Russia's the pressure

294
00:15:49,560 --> 00:15:51,960
Speaker 3: we bring on Russia's economy, which are real. I mean,

295
00:15:52,040 --> 00:15:55,360
Speaker 3: Russia is spending a tremendous amount of money in this war.

296
00:15:55,800 --> 00:15:59,120
Speaker 3: We're talking over forty percent of its budget is now

297
00:15:59,120 --> 00:16:04,080
Speaker 3: devoted to military issues. Its labor market is being squeezed

298
00:16:04,080 --> 00:16:07,840
Speaker 3: to the limits. You're looking at a collapse of foreign investment.

299
00:16:07,920 --> 00:16:10,360
Speaker 3: It's lost markets. I mean, this is a This is

300
00:16:10,440 --> 00:16:13,320
Speaker 3: really a tremendous blow to any of the world's economy.

301
00:16:13,320 --> 00:16:15,920
Speaker 3: And I think the President's views of I will put

302
00:16:16,000 --> 00:16:19,320
Speaker 3: more pressure on that economy is how he plans to

303
00:16:19,320 --> 00:16:20,120
Speaker 3: bring this forward.

304
00:16:20,560 --> 00:16:22,280
Speaker 1: Norman, thank you so much for your time this morning.

305
00:16:22,280 --> 00:16:34,720
Speaker 1: Norman Rule of CSIS joining US now is Libby Cantrell

306
00:16:34,840 --> 00:16:37,400
Speaker 1: of PIMPKO. So he's making a ton of news. It's

307
00:16:37,440 --> 00:16:40,600
Speaker 1: the first full week, basically working week of his administration,

308
00:16:41,320 --> 00:16:44,920
Speaker 1: slew of executive orders, John voting the Fed, telling the

309
00:16:44,960 --> 00:16:47,480
Speaker 1: Saudis to add more barrels to the market, and then

310
00:16:47,560 --> 00:16:51,480
Speaker 1: last night seemingly signaling to China that he has the

311
00:16:51,560 --> 00:16:53,200
Speaker 1: power in tariff them, but he doesn't want to use

312
00:16:53,240 --> 00:16:55,040
Speaker 1: them yet. What do you take away from all of this?

313
00:16:55,320 --> 00:16:57,680
Speaker 9: Yeah, I mean it has been flooding the zone. You

314
00:16:57,760 --> 00:17:01,720
Speaker 9: forgot about the big Ai announcement. Course itself would have

315
00:17:01,760 --> 00:17:04,280
Speaker 9: been a massive announcement that would have driven news for

316
00:17:04,280 --> 00:17:06,080
Speaker 9: a week, and yet it was a little bit drowned

317
00:17:06,160 --> 00:17:08,959
Speaker 9: out because of all these executive orders. I mean, obviously

318
00:17:08,960 --> 00:17:11,320
Speaker 9: a lot of our clients very focused on tariff risk.

319
00:17:11,600 --> 00:17:14,800
Speaker 9: I think, you know, taking some comfort in the fact

320
00:17:14,880 --> 00:17:19,320
Speaker 9: that President Trump hasn't done anything at least definitive on

321
00:17:19,480 --> 00:17:21,879
Speaker 9: China or other countries. I mean, we think it's a

322
00:17:21,920 --> 00:17:25,119
Speaker 9: little premature to start celebrating, and we think the direction

323
00:17:25,160 --> 00:17:28,199
Speaker 9: of travel here is very clear. They did issue an

324
00:17:28,200 --> 00:17:32,520
Speaker 9: America First Trade memorandum that made it was basically a

325
00:17:32,600 --> 00:17:35,960
Speaker 9: roadmap for how they are thinking about trade. It goes

326
00:17:36,000 --> 00:17:39,320
Speaker 9: from everything from kind of rewriting free trade agreements to

327
00:17:39,440 --> 00:17:43,600
Speaker 9: looking at currency relationships to looking at outbound investment from

328
00:17:43,640 --> 00:17:45,920
Speaker 9: the US to China. So I think what we are

329
00:17:46,040 --> 00:17:48,240
Speaker 9: telling our clients and then also I'm telling our traders

330
00:17:48,280 --> 00:17:50,960
Speaker 9: is let's not sort of celebrate this too prematurely. This

331
00:17:51,000 --> 00:17:53,400
Speaker 9: is a deep seated ideology. As we've talked about, there's

332
00:17:53,400 --> 00:17:56,520
Speaker 9: a revenue component here, but there's also you know, I

333
00:17:56,520 --> 00:17:58,960
Speaker 9: think you know, he believes in tariffs. He believes in

334
00:17:58,960 --> 00:18:01,000
Speaker 9: tariff's work in terms of you've seen the trade deficit

335
00:18:01,240 --> 00:18:03,879
Speaker 9: as it relates to China. I mean, it is complicated, right,

336
00:18:03,880 --> 00:18:06,080
Speaker 9: There are other things that I think the President wants

337
00:18:06,080 --> 00:18:09,560
Speaker 9: from China as it relates to the Ukraine War, for instance,

338
00:18:10,280 --> 00:18:13,000
Speaker 9: And I think that he will is intentionally sort of

339
00:18:13,000 --> 00:18:16,199
Speaker 9: slow walking a tariffs or actions on China. I just

340
00:18:16,359 --> 00:18:19,000
Speaker 9: we should not conflate that though with no future action,

341
00:18:19,080 --> 00:18:21,440
Speaker 9: because I do believe that teriffs will be increasing, probably

342
00:18:21,480 --> 00:18:23,440
Speaker 9: across the board, but also in China in particular.

343
00:18:23,520 --> 00:18:25,880
Speaker 1: Well, when it comes to the signal he's sending, maybe

344
00:18:25,880 --> 00:18:28,240
Speaker 1: he's slow walking it. That's been a huge relief rally

345
00:18:28,280 --> 00:18:32,280
Speaker 1: even just today in Asia, in Europe, in global currencies,

346
00:18:32,320 --> 00:18:35,240
Speaker 1: you know, the dollars much much weaker. When it comes

347
00:18:35,280 --> 00:18:37,120
Speaker 1: to China. It's not just the war in Ukraine, it's

348
00:18:37,119 --> 00:18:40,000
Speaker 1: also TikTok. There's so many levers he's trying to pull.

349
00:18:40,520 --> 00:18:42,720
Speaker 1: Where does all of this stack up in terms of

350
00:18:42,760 --> 00:18:43,920
Speaker 1: the priority list.

351
00:18:44,320 --> 00:18:46,680
Speaker 9: Yeah, well, I think that's that's an no good question.

352
00:18:48,200 --> 00:18:51,200
Speaker 9: And I do think, I mean, these are our different dimensions.

353
00:18:51,240 --> 00:18:55,040
Speaker 9: I think different advisors care about different things here. Of course,

354
00:18:55,200 --> 00:18:57,240
Speaker 9: you know, as we've talked about, he has a cadre

355
00:18:57,320 --> 00:18:59,600
Speaker 9: of folks who are advising him under Trump two point zero,

356
00:18:59,600 --> 00:19:01,840
Speaker 9: who are all so they're under Trump one point zero,

357
00:19:02,280 --> 00:19:05,200
Speaker 9: who don't necessarily trust the Chinese. They view that the

358
00:19:05,320 --> 00:19:07,920
Speaker 9: Chinese do not honor the Phase one trade agreement. I

359
00:19:07,960 --> 00:19:10,040
Speaker 9: think there's going to be a real review. I mean,

360
00:19:10,280 --> 00:19:14,399
Speaker 9: in this memorandum, there's an order to actually look at

361
00:19:14,440 --> 00:19:16,080
Speaker 9: the Phase one trade agreement, to kind of create a

362
00:19:16,080 --> 00:19:18,840
Speaker 9: scorecard around that, and to publish that. So I do

363
00:19:18,960 --> 00:19:21,720
Speaker 9: think again, this is you know, actions are likely coming

364
00:19:21,800 --> 00:19:24,520
Speaker 9: on China. I do think the market, though, should celebrate

365
00:19:24,600 --> 00:19:26,720
Speaker 9: the fact that it's going to be intentional, it's going

366
00:19:26,800 --> 00:19:28,879
Speaker 9: to be thought out. It's going to be strategic and

367
00:19:28,920 --> 00:19:31,920
Speaker 9: maybe not sort of the worst fear that the market

368
00:19:31,920 --> 00:19:32,760
Speaker 9: at least was predicted.

369
00:19:32,800 --> 00:19:34,439
Speaker 5: Can I just go back to where we started, this

370
00:19:34,680 --> 00:19:37,359
Speaker 5: very simple fact that we got so much this week.

371
00:19:37,440 --> 00:19:38,919
Speaker 5: I mean, it is a reminder of what it was

372
00:19:39,000 --> 00:19:42,040
Speaker 5: like around last time that you have him talking to reporters,

373
00:19:42,040 --> 00:19:45,000
Speaker 5: making news, posting things on social media and making news,

374
00:19:45,040 --> 00:19:46,080
Speaker 5: giving different speeches.

375
00:19:46,119 --> 00:19:47,159
Speaker 1: It is a lot.

376
00:19:47,359 --> 00:19:50,120
Speaker 5: What is your advice to your traders, to your clients

377
00:19:50,680 --> 00:19:52,359
Speaker 5: and how to sort through all of it, what to

378
00:19:52,400 --> 00:19:54,919
Speaker 5: pay attention to and maybe what you can ignore.

379
00:19:55,400 --> 00:19:56,520
Speaker 1: Yeah, I mean, great question.

380
00:19:57,640 --> 00:19:59,800
Speaker 9: I think you know from US from a fixed income perspective,

381
00:20:00,160 --> 00:20:04,679
Speaker 9: you know what drives bond yields, growth, inflation, currency, and

382
00:20:04,680 --> 00:20:06,119
Speaker 9: of course obviously the FED at the end of the

383
00:20:06,200 --> 00:20:07,040
Speaker 9: day in terms.

384
00:20:06,800 --> 00:20:07,440
Speaker 5: Of the US.

385
00:20:08,040 --> 00:20:11,080
Speaker 9: So anything that really will have a tangible impact on

386
00:20:11,160 --> 00:20:14,320
Speaker 9: those drivers. A lot of these executive orders, I call

387
00:20:14,359 --> 00:20:16,399
Speaker 9: them kind of more sizzle than steak. A lot of

388
00:20:16,400 --> 00:20:18,720
Speaker 9: them are, you know, for the sort of shock and

389
00:20:18,800 --> 00:20:21,560
Speaker 9: awe value versus actually the substance value. Now, a lot

390
00:20:21,560 --> 00:20:23,440
Speaker 9: of them will be more substantive, and I think even

391
00:20:23,840 --> 00:20:26,000
Speaker 9: on the federal workforce, some of the things he's done

392
00:20:26,000 --> 00:20:29,000
Speaker 9: in terms of the hiring freeze, rolling back the DEI.

393
00:20:29,440 --> 00:20:31,439
Speaker 9: While that may have a long tail, that will have

394
00:20:31,480 --> 00:20:33,560
Speaker 9: an impact in terms of you know, employment of federal

395
00:20:33,560 --> 00:20:36,800
Speaker 9: workforce and potentially incrementally on the budget. The end of

396
00:20:36,840 --> 00:20:39,320
Speaker 9: the day, though, the big things that drive the markets

397
00:20:39,359 --> 00:20:41,320
Speaker 9: are going to be again the big macro movers. A

398
00:20:41,400 --> 00:20:43,240
Speaker 9: lot of that has to do with Congress, and we

399
00:20:43,280 --> 00:20:45,919
Speaker 9: haven't you know, Congress, we Van Marie and I Lament.

400
00:20:46,000 --> 00:20:49,480
Speaker 9: You know, Congress is understandably trying to get their ducks

401
00:20:49,520 --> 00:20:53,560
Speaker 9: in a row with navigating incredibly narrow majorities, and so

402
00:20:54,640 --> 00:20:55,960
Speaker 9: you know, I think that I think the focus will

403
00:20:55,960 --> 00:20:58,040
Speaker 9: turn probably turn away sort of inevitably from him a bit,

404
00:20:58,440 --> 00:21:02,000
Speaker 9: and you know, onto on Congress once they start proceeding

405
00:21:02,000 --> 00:21:04,520
Speaker 9: with this reconciliation bill and taxes and spending. Got someonet,

406
00:21:04,520 --> 00:21:04,720
Speaker 9: have you?

407
00:21:05,280 --> 00:21:08,360
Speaker 12: Levy Jay here, I'm curious as to you how important

408
00:21:08,440 --> 00:21:11,840
Speaker 12: the foreign investor base is for treasuries. We have a

409
00:21:11,840 --> 00:21:15,600
Speaker 12: tremendous amount of treasury issuance coming this year, dollars starting

410
00:21:15,600 --> 00:21:20,440
Speaker 12: to weaken. Foreign investors very heavily invested in US assets.

411
00:21:20,720 --> 00:21:23,040
Speaker 12: Is there any concern at all that perhaps this can

412
00:21:23,080 --> 00:21:26,919
Speaker 12: build on itself and foreign investors become less interested in

413
00:21:26,960 --> 00:21:30,119
Speaker 12: treasuries and pushing the price or sorry, pushing the yields

414
00:21:30,160 --> 00:21:30,880
Speaker 12: up and price down.

415
00:21:31,040 --> 00:21:33,439
Speaker 9: Yeah, And I think that this has been a concern

416
00:21:33,480 --> 00:21:35,720
Speaker 9: in the marketplace over the last few years around sort

417
00:21:35,720 --> 00:21:39,760
Speaker 9: of de dollarization, around foreign central banks sort of diversifying

418
00:21:39,800 --> 00:21:42,879
Speaker 9: away from kind of dollar based assets into a basket

419
00:21:42,920 --> 00:21:47,240
Speaker 9: of other currencies and other sovereign assets. I'm not sure

420
00:21:47,280 --> 00:21:50,760
Speaker 9: we've really seen a lot of data that actually supports that.

421
00:21:51,280 --> 00:21:54,359
Speaker 9: In fact, when you did see sort of some foreign

422
00:21:54,359 --> 00:21:56,240
Speaker 9: buyers kind of pull away over the last few years,

423
00:21:56,240 --> 00:21:59,920
Speaker 9: you actually saw some domestic pension plans and institutional investors

424
00:22:00,080 --> 00:22:03,080
Speaker 9: actually sort of fill that gap. But recently it looks like,

425
00:22:03,119 --> 00:22:05,280
Speaker 9: according to the data, that there has been more activity

426
00:22:05,640 --> 00:22:08,439
Speaker 9: in terms of foreign central banks. And that's partly just

427
00:22:08,440 --> 00:22:11,919
Speaker 9: because fields look pretty nice, right, I mean, is the

428
00:22:12,080 --> 00:22:15,840
Speaker 9: US bomb market actually, you know, looks pretty attractive right

429
00:22:15,840 --> 00:22:18,000
Speaker 9: now from both a nominal yield but also a real

430
00:22:18,080 --> 00:22:19,040
Speaker 9: yield perspective.

431
00:22:19,400 --> 00:22:20,680
Speaker 1: And if you think.

432
00:22:20,440 --> 00:22:23,440
Speaker 9: That maybe he's going to may do something on tariffs,

433
00:22:23,440 --> 00:22:25,160
Speaker 9: but it won't be the sort of the full kind

434
00:22:25,160 --> 00:22:27,560
Speaker 9: of manty on tariffs, then maybe you're sort of starting

435
00:22:27,600 --> 00:22:30,000
Speaker 9: to dip your toe into the water. So I don't

436
00:22:30,040 --> 00:22:32,320
Speaker 9: think we see that as a real concern. And again,

437
00:22:32,320 --> 00:22:34,280
Speaker 9: there seems to be a lot of domestic demand that

438
00:22:34,320 --> 00:22:36,560
Speaker 9: has supplemented.

439
00:22:35,880 --> 00:22:39,000
Speaker 1: That does he wait for tariffs because he wants the

440
00:22:39,040 --> 00:22:42,240
Speaker 1: good news that can happen with a reconciliation what he

441
00:22:42,359 --> 00:22:45,640
Speaker 1: calls one big, powerful, beautiful, powerful bill to come out.

442
00:22:45,920 --> 00:22:47,760
Speaker 1: Is that what he's waiting on bake in the good

443
00:22:47,760 --> 00:22:50,720
Speaker 1: news first the financial markets, and then potentially add in

444
00:22:50,760 --> 00:22:52,080
Speaker 1: some of the not so great.

445
00:22:52,160 --> 00:22:53,439
Speaker 9: Yeah, and may do you think there is going to

446
00:22:53,440 --> 00:22:55,920
Speaker 9: be a consideration around sort of eating your vegetables any

447
00:22:55,920 --> 00:22:58,080
Speaker 9: dean dessert, And I think trying to give both to

448
00:22:58,119 --> 00:23:01,720
Speaker 9: the market, not just trying to chew on one and

449
00:23:01,760 --> 00:23:04,760
Speaker 9: not chew on the other. And you know, obviously, you know,

450
00:23:04,960 --> 00:23:07,360
Speaker 9: as we all know, folks in this administration are very

451
00:23:07,359 --> 00:23:11,760
Speaker 9: markets oriented. You know, they President Trump views the economy

452
00:23:11,840 --> 00:23:15,000
Speaker 9: under Trump one point zero, the SMP under Trump one

453
00:23:15,000 --> 00:23:16,600
Speaker 9: point oh, as you know, part.

454
00:23:16,440 --> 00:23:17,120
Speaker 1: Of his legacy.

455
00:23:17,200 --> 00:23:18,800
Speaker 9: So I do think they're going to be mindful of

456
00:23:18,840 --> 00:23:21,320
Speaker 9: all of this. Again, though I wouldn't confuse this with

457
00:23:21,400 --> 00:23:23,639
Speaker 9: the fact that we're not going to see terrriffaction. And

458
00:23:23,720 --> 00:23:25,480
Speaker 9: I do think, you know, maybe something that in the

459
00:23:25,480 --> 00:23:28,720
Speaker 9: marketplace that's maybe not being taken as seriously is sort

460
00:23:28,720 --> 00:23:31,040
Speaker 9: of the threat on Canada and Mexico. As we know,

461
00:23:31,200 --> 00:23:35,000
Speaker 9: the USMCA review is coming up next year. It sounds

462
00:23:35,000 --> 00:23:37,720
Speaker 9: like President Trump might want it to actually pull that forward,

463
00:23:38,000 --> 00:23:40,200
Speaker 9: and the sort of the tariff threat might be sort

464
00:23:40,200 --> 00:23:41,240
Speaker 9: of associated with that.

465
00:23:41,440 --> 00:23:46,080
Speaker 13: The review started, he's negotiating the review is sorry, and

466
00:23:46,160 --> 00:23:48,199
Speaker 13: you know who will be negotiating that on behalf of

467
00:23:48,240 --> 00:23:51,760
Speaker 13: Canada sort of TBD obviously, but I do think that

468
00:23:51,760 --> 00:23:52,240
Speaker 13: that is.

469
00:23:52,160 --> 00:23:53,639
Speaker 9: You know, sort of part and parcel of this. So

470
00:23:53,960 --> 00:23:56,520
Speaker 9: you know, while I think investors and we have been

471
00:23:56,640 --> 00:23:59,200
Speaker 9: sort of focused on the China potential China actions, they

472
00:23:59,240 --> 00:24:01,280
Speaker 9: actually might be you know, much much closer to the

473
00:24:01,359 --> 00:24:04,040
Speaker 9: United States, our neighbors of North Luby Cantrell of Pempco,

474
00:24:04,160 --> 00:24:04,880
Speaker 9: thank you so much.

475
00:24:05,600 --> 00:24:09,160
Speaker 2: This is the Bloomberg Surveillance podcast, bringing you the best

476
00:24:09,160 --> 00:24:12,440
Speaker 2: in markets, economics, and geopolitics. You can watch the show

477
00:24:12,520 --> 00:24:15,480
Speaker 2: live on Bloomberg TV weekday mornings from six am to

478
00:24:15,600 --> 00:24:19,359
Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify

479
00:24:19,520 --> 00:24:21,760
Speaker 2: or anywhere else you listen, and as always on the

480
00:24:21,760 --> 00:24:24,200
Speaker 2: Bloomberg terminal and the Bloomberg Business app,