WEBVTT - Tariffs, Markets, and the Dollar 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:28.680 us live on YouTube and off of the weekend. 0:00:28.720 --> 0:00:31.560 I love what jillmo X said at AXA in Paris. 0:00:31.600 --> 0:00:35.400 He said, it is searching in vain for information. 0:00:36.000 --> 0:00:40.239 In charge of information for Bloomberg Surveillance, Lori Kelvisina with 0:00:40.520 --> 0:00:42.560 RBC Capital Markets. 0:00:42.800 --> 0:00:44.160 I say, when you walked in. 0:00:44.040 --> 0:00:46.360 Today, what'd you first look at? But like all of us, 0:00:46.400 --> 0:00:50.000 you were working all weekend. What were you both stirring 0:00:50.600 --> 0:00:53.040 in the Kelvisina system this weekend? 0:00:53.159 --> 0:00:55.840 Well, so I'll tell you. On Friday I wrote my 0:00:55.880 --> 0:00:58.040 weekly and then what I was doing Saturday night and 0:00:58.080 --> 0:01:00.240 Sunday night because I have little kids, so you know, 0:01:00.280 --> 0:01:01.440 I have to do a lot of this at night 0:01:01.480 --> 0:01:02.320 after they go to sleep. 0:01:02.360 --> 0:01:06.039 But I was reading Please, you said the what's the masters? 0:01:06.360 --> 0:01:09.000 Mom's got to work, I was saying to Gargy earlier. 0:01:09.000 --> 0:01:11.080 I'm now starting to watch White Lotus. This is the 0:01:11.080 --> 0:01:13.000 first TV show I've watched in years because I just 0:01:13.040 --> 0:01:16.400 don't have time. But honestly, my free time this weekend, 0:01:16.400 --> 0:01:18.840 I was reading through Earning's called transcripts, and then I 0:01:18.880 --> 0:01:21.759 was also reading through conference transcripts. And my team had 0:01:21.760 --> 0:01:23.800 done a first pass on me last week for me 0:01:23.880 --> 0:01:27.199 last week, but we were reading across the Russell three thousand, 0:01:27.319 --> 0:01:29.839 not just the SMP five hundred. And I'm a little 0:01:29.880 --> 0:01:32.440 bit of a transcript junkie. I have been really since 0:01:32.480 --> 0:01:36.080 twenty sixteen, twenty seventeen, twenty eighteen, and we've learned that 0:01:36.120 --> 0:01:38.800 in these periods where everything is uncertain and shifting, don't 0:01:38.840 --> 0:01:41.600 just look at the SMP five hundred. The Russell companies, 0:01:41.640 --> 0:01:44.200 the smaller cap companies have simpler business models and they 0:01:44.240 --> 0:01:47.319 can often sort of help you home in on specific 0:01:47.360 --> 0:01:48.640 issues with a lot more clarity. 0:01:48.760 --> 0:01:51.240 And this is so much in honor of work at 0:01:51.240 --> 0:01:55.200 Bloomberg by rich Yamarone, who we had lost way too early. 0:01:55.760 --> 0:02:00.320 Yamarone did the Orange Book, which invented forget about all 0:02:00.360 --> 0:02:04.560 the numbers, just listen to people. After someone like Lauri 0:02:04.720 --> 0:02:06.520 Kelvicina says, great. 0:02:06.320 --> 0:02:10.080 Quarter exactly, So, Laurie, what have you guys done at 0:02:10.160 --> 0:02:12.960 RBC and your group there with your S and P 0:02:13.080 --> 0:02:15.000 five hundred targets and your earnings. 0:02:15.160 --> 0:02:19.000 So we've cut them twice this year. March seventeenth was 0:02:19.040 --> 0:02:21.280 the first time. I'm honestly it was. It was the 0:02:21.400 --> 0:02:25.639 Thursday night after Liberation Day. I can't remember what date 0:02:25.680 --> 0:02:29.920 that was that we did the second hut. Time is 0:02:29.960 --> 0:02:33.480 warping in here, but we cut things twice. And what 0:02:33.560 --> 0:02:37.000 we did in that sort of early April adjustment was 0:02:37.000 --> 0:02:39.160 we shifted from our bullcase to our barecase. And we've 0:02:39.160 --> 0:02:42.079 been telegraphing that we would need to do so if 0:02:42.120 --> 0:02:45.040 we broke below ten percent from the February peak. What 0:02:45.120 --> 0:02:47.800 was interesting was pre rose Garden the market was trying 0:02:47.840 --> 0:02:50.240 to hold in sort of garden variety five to ten 0:02:50.280 --> 0:02:53.360 percent correction territory. The market's kind of doing the same 0:02:53.360 --> 0:02:55.280 thing right now in growth scare territory. 0:02:55.320 --> 0:02:56.200 We went down on. 0:02:56.120 --> 0:02:59.399 Tuesday's clothes and touched minus eighteen point nine percent from 0:02:59.400 --> 0:03:02.000 the peak. That is very similar to what we did 0:03:02.040 --> 0:03:04.240 back in twenty eighteen, and that's basically in line with 0:03:04.280 --> 0:03:06.840 your average kind of growth scare where there's a fear 0:03:06.840 --> 0:03:08.959 of a recession or big breakdown that doesn't happen. 0:03:09.480 --> 0:03:12.679 So what do we I guess, let's just go to 0:03:12.720 --> 0:03:14.480 the earning front. Since we're starting to kick into the 0:03:14.480 --> 0:03:17.280 earning season here, it's not so much what they what 0:03:17.320 --> 0:03:19.080 we're going to hear about their first quarter performance as 0:03:19.080 --> 0:03:22.639 warm about what companies are. Do you expect any companies 0:03:22.639 --> 0:03:24.239 to provide guidance or how do you think about the 0:03:24.280 --> 0:03:24.760 earnings out. 0:03:24.680 --> 0:03:26.480 Well, so there are some that are still doing it 0:03:26.520 --> 0:03:28.080 and there are some that are not. What I will 0:03:28.080 --> 0:03:30.160 tell you is a positive development, Paul, and I know 0:03:30.200 --> 0:03:32.560 I was sort of ranting about this on television last week, 0:03:32.680 --> 0:03:36.640 but companies are finally giving us a more detailed conversation 0:03:36.840 --> 0:03:39.440 about their exposure, not just to China. We've been hearing 0:03:39.480 --> 0:03:41.760 about that since November, but they're finally starting to talk 0:03:41.800 --> 0:03:45.040 about Vietnam and Mexico and Canada and other countries. So 0:03:45.120 --> 0:03:47.560 they've been sort of shocked into having a more honest 0:03:47.640 --> 0:03:50.760 and detailed conversation with the south Side community and the 0:03:50.800 --> 0:03:54.360 Byside community. Frankly, and to me, that's more important than 0:03:54.400 --> 0:03:57.400 why whether or not, you know, we suspend guidance. Some 0:03:57.560 --> 0:04:00.520 companies are baking some tariffins, some aren't, But it's the 0:04:00.600 --> 0:04:03.880 level of discussion. We just have needed more disclosure. I 0:04:03.880 --> 0:04:06.280 think that's why we've seen such big gaps in here. 0:04:07.000 --> 0:04:08.600 So what do we do going forward? 0:04:08.600 --> 0:04:08.800 Here? 0:04:08.920 --> 0:04:09.120 Is it? 0:04:10.760 --> 0:04:14.080 Are you recommending more cash and you typically do? Are 0:04:14.120 --> 0:04:17.120 you reckoning a bigger treasury portfolio than you typically do? 0:04:17.279 --> 0:04:19.720 Or so I stick in the equity world, and so 0:04:19.960 --> 0:04:22.440 you know, I don't you know, I always like us equities, 0:04:22.480 --> 0:04:24.520 you know, I tend to say, And you know, we 0:04:24.560 --> 0:04:26.640 haven't made a change in our target. We're still sticking 0:04:26.680 --> 0:04:28.680 with the fifty five to fifty. We have said if 0:04:28.760 --> 0:04:31.080 recession is starting to get baked in, we're going to 0:04:31.080 --> 0:04:33.159 have another break lower. I don't think that's baked into 0:04:33.200 --> 0:04:35.279 the price now. Okay, But I was on the road 0:04:35.360 --> 0:04:38.000 last week with Amy with Silverman, my partner in crime, 0:04:38.040 --> 0:04:39.960 over at RBC, and we were seeing a bunch of 0:04:40.000 --> 0:04:43.000 clients and we actually saw these younger guys who'd only 0:04:43.000 --> 0:04:45.200 been in the business a couple of years, and they 0:04:45.320 --> 0:04:47.040 just sort of, you know, I forget how we got 0:04:47.040 --> 0:04:49.000 on this topic. And the advice I gave them, I 0:04:49.040 --> 0:04:52.479 think applies to everybody. I said, we never know in 0:04:52.560 --> 0:04:54.440 these periods, in the moment where we bought them, we 0:04:54.480 --> 0:04:56.400 never know how low exactly it's going to go. We 0:04:56.440 --> 0:04:58.520 have our milestones. We're going to check those off. We're 0:04:58.560 --> 0:05:00.560 going to keep an eye on those. We want to 0:05:00.600 --> 0:05:02.920 do two things right now. You want to look for 0:05:03.160 --> 0:05:06.599 the defensive opportunity and the rebound opportunity, and you kind 0:05:06.600 --> 0:05:09.360 of have to do both. So on the defensive side, 0:05:09.480 --> 0:05:12.120 we've liked utilities all along, we're sticking with that. On 0:05:12.160 --> 0:05:16.039 the offensive side, we really like financials. And our point 0:05:16.080 --> 0:05:18.279 to these guys was you're not going to be able 0:05:18.320 --> 0:05:20.040 to peg the bottom, so don't even try. 0:05:20.680 --> 0:05:24.120 All right, So financials on the rebound d s. Do 0:05:24.200 --> 0:05:26.320 you hear anything on Friday that it kind of gave 0:05:26.320 --> 0:05:27.880 you a greater conviction when we heard from some of 0:05:27.880 --> 0:05:29.360 the big banks, and we hear from Goldman today. 0:05:29.440 --> 0:05:32.320 Yeah, so you know, we're definitely seeing, right the benefits 0:05:32.400 --> 0:05:35.880 of increased activity and getting some rotation in the market 0:05:35.920 --> 0:05:38.480 and things, you know, generally functioning properly. I know there 0:05:38.480 --> 0:05:40.880 were some questions about that on the bond market last week, 0:05:40.880 --> 0:05:42.840 but that seems to have been, you know, died down 0:05:42.880 --> 0:05:45.960 at this point anyway. But I think that what I 0:05:46.040 --> 0:05:49.280 really have heard, you know, from the banking community in particular, 0:05:49.880 --> 0:05:52.280 is their ability to manage through crises and so all 0:05:52.320 --> 0:05:55.240 of the learnings from the GFC, even SBB. Frankly, I 0:05:55.240 --> 0:05:57.400 think was a great road test for these companies and 0:05:57.560 --> 0:06:00.000 I felt like I heard that confidence come through last week. 0:06:00.400 --> 0:06:00.880 What's the. 0:06:02.360 --> 0:06:07.960 Idea of do nothing? Is that an efficacious strategy? 0:06:08.120 --> 0:06:10.360 It is sometimes you need to sit and listen to 0:06:10.400 --> 0:06:12.520 the market and let things play out. And I know 0:06:12.600 --> 0:06:15.640 that that is difficult for Wall Street people to do, 0:06:15.800 --> 0:06:17.719 but I do think this is one of those times. 0:06:18.240 --> 0:06:22.880 Excuse me, folks, I'm distracted learning about the amazing Blue 0:06:22.880 --> 0:06:25.720 Origin flight we're going to see here in twenty minutes, 0:06:25.800 --> 0:06:27.000 really extraordinary. 0:06:27.040 --> 0:06:28.320 Lori Kelvcina, where. 0:06:28.120 --> 0:06:32.360 It's for those of you across the nation, across Canada 0:06:32.520 --> 0:06:35.640 of RBC Capital Markets, the Royal Bank of Canada. Good 0:06:35.640 --> 0:06:38.559 Morning worldwide as well in your commute and of course 0:06:38.560 --> 0:06:42.640 on YouTube subscribe to Bloomberg Podcast. Just can't say enough 0:06:42.800 --> 0:06:45.839 about the YouTube distribution. We knew it was working, but 0:06:45.960 --> 0:06:48.400 in this crisis, we've been humbled by the growth. Thank 0:06:48.440 --> 0:06:52.240 you so much. Their futures up eighty eight, I mean, 0:06:52.320 --> 0:06:55.559 Gold and Sacks went out and it's completely unfair question 0:06:55.640 --> 0:06:59.680 to you. They popped a forty billion dollars share buyback 0:07:00.279 --> 0:07:04.280 twenty five point two percent of their market cap? Are 0:07:04.279 --> 0:07:06.760 we going to see more of these shocks where people 0:07:06.920 --> 0:07:09.720 just say, we don't know what the White House is 0:07:09.760 --> 0:07:11.760 going to do, We're going to be opportunistic. 0:07:12.400 --> 0:07:14.800 So when I was talking to investors last week, we 0:07:14.800 --> 0:07:17.560 were sort of debating pe multiples. Can you even really 0:07:17.640 --> 0:07:19.640 you know, value a company right now and we don't 0:07:19.640 --> 0:07:22.920 have visibility into the earnings. And what one investor told 0:07:22.960 --> 0:07:25.800 me was, they're really buying good management teams right now, 0:07:26.120 --> 0:07:27.920 and I think that's a very you know, sort of 0:07:27.960 --> 0:07:30.320 smart way to think about it. Who can navigate through? 0:07:30.720 --> 0:07:33.640 I will say on the buybacks in particular, when I 0:07:33.760 --> 0:07:35.760 did my last round of updates on my S and 0:07:35.760 --> 0:07:38.200 P earnings model, we actually had actual data and for 0:07:38.280 --> 0:07:40.880 share counts as of one queue and it grew by 0:07:40.880 --> 0:07:43.920 I think point nine percent year over year, and that's 0:07:43.960 --> 0:07:45.960 the biggest we've seen. But we've had a string of 0:07:45.960 --> 0:07:48.840 several quarters where the sharecounts have been growing, so I 0:07:48.880 --> 0:07:51.120 don't think that And of course you have buybacks, but 0:07:51.120 --> 0:07:52.840 there's issue went so but when you do all the 0:07:52.880 --> 0:07:56.400 math right, like, we haven't had a de equitization theme, 0:07:56.840 --> 0:07:59.280 you know, the way my former colleague Brob Bucklin used 0:07:59.280 --> 0:08:02.640 to talk about. So it's it's interesting, you know, to 0:08:02.680 --> 0:08:04.600 sort of hear that news in the context of this 0:08:04.640 --> 0:08:07.600 hasn't really been a great period for shrinking the share counts. 0:08:07.680 --> 0:08:13.040 Paul's the equidization English or is that Lori Kelvicina. 0:08:12.680 --> 0:08:16.560 Ill That's that's Rob Bucklan, my old one of my 0:08:16.600 --> 0:08:17.880 old mentors in the city. 0:08:18.200 --> 0:08:21.160 What is it where we with small and mid cap 0:08:21.200 --> 0:08:22.040 stocks these days? 0:08:22.160 --> 0:08:24.640 So they were trying really hard before the rest starting 0:08:24.760 --> 0:08:27.040 to bottom, and you're actually seeing some outperformance on the 0:08:27.040 --> 0:08:30.120 big down days. As we have moved past that event, 0:08:30.520 --> 0:08:34.319 investors are sort of toggling between sluggish growth, near stall 0:08:34.360 --> 0:08:36.640 speed or recession. I don't think that it's a clear 0:08:36.720 --> 0:08:38.760 cut case for recession yet, to be honest, but the 0:08:38.800 --> 0:08:41.320 small caps are acting like it is, and so we 0:08:41.440 --> 0:08:44.040 continued to see some underperformance. You've also been starting to 0:08:44.040 --> 0:08:46.719 see growth outperform value, which is also consistent with the 0:08:46.760 --> 0:08:50.720 sluggish economy. So it's there's opportunity there. We know we 0:08:50.800 --> 0:08:52.920 need to buy them mid recession if we get one. 0:08:53.480 --> 0:08:57.559 But in the short term they're they're expressing the economic case. 0:08:57.440 --> 0:08:59.840 You mentioned being some financials just you know, to pick 0:09:00.040 --> 0:09:03.840 on them in this Meliu is this where smaller banks 0:09:03.880 --> 0:09:05.599 throw in the towel and we get an M and 0:09:05.640 --> 0:09:08.920 A surprise and small in midcast I think. 0:09:08.800 --> 0:09:11.080 That, you know, an old investment or back in my 0:09:11.240 --> 0:09:13.480 back in my my first investment bank, I worked at 0:09:13.559 --> 0:09:16.439 an investment banker there once told me that you look 0:09:16.440 --> 0:09:18.920 at confidence, you look at the vics, you know, for 0:09:19.080 --> 0:09:21.600 M and A deals, and we have lousy confidence. And 0:09:21.640 --> 0:09:23.800 we've actually, you know, no one's debating if the BIX 0:09:23.880 --> 0:09:26.400 is broken anymore. We've seen a breakout there. So I 0:09:26.679 --> 0:09:29.520 do have a feeling, at least in the short term, 0:09:29.640 --> 0:09:31.679 the kind of gloom on M and A that you 0:09:31.760 --> 0:09:33.560 heard from some of the bigger banks late last week 0:09:33.600 --> 0:09:35.079 is probably deserved and. 0:09:35.080 --> 0:09:39.040 We should not expect or rely upon the FED to 0:09:39.160 --> 0:09:42.040 kind of magically fix this. They can't really deal with 0:09:42.240 --> 0:09:45.559 consumer confidence and those types of issues. 0:09:45.679 --> 0:09:48.080 Look, we have a data driven FED, right, and I 0:09:48.120 --> 0:09:50.400 think that there you know, let's put aside what was 0:09:50.440 --> 0:09:52.760 going on in the bond market last week, right, but 0:09:53.320 --> 0:09:55.040 if you if you just think about sort of the 0:09:55.120 --> 0:09:59.080 tension between you know, inflation and the potential inflation that 0:09:59.120 --> 0:10:03.200 may be coming from the A policy, that it's a 0:10:03.240 --> 0:10:05.240 tough spot for them to be in that is part 0:10:05.240 --> 0:10:07.360 of their mandate, and the labor data is holding up. 0:10:07.400 --> 0:10:09.280 And to be honest, in everything I've read, and I've 0:10:09.320 --> 0:10:12.560 been reading really closely across the rustle three thousands since 0:10:13.080 --> 0:10:15.520 probably like the last two weeks of February, and I'm 0:10:15.559 --> 0:10:19.320 not seeing a lot of alarmism on labor. We do 0:10:19.440 --> 0:10:21.480 see it in the survey data, but in terms of 0:10:21.520 --> 0:10:24.120 what companies are actually saying when they're going out to conferences, 0:10:24.120 --> 0:10:26.320 when they're on earnings calls, they're not ringing the alarm 0:10:26.320 --> 0:10:27.240 bell on labor right. 0:10:27.160 --> 0:10:30.800 Now, even lower lower wage labor because of you know, 0:10:31.000 --> 0:10:33.960 President Trump and his administration have been pretty effective in 0:10:34.080 --> 0:10:37.120 kind of slowing down, if not stopping illegal immigration. Have 0:10:37.200 --> 0:10:39.880 we seen that in the housing market in the Are 0:10:39.880 --> 0:10:41.200 we hear in any of the agricultural world. 0:10:41.320 --> 0:10:43.360 So I didn't read any homebuilders from like the last 0:10:43.400 --> 0:10:45.760 week and a half, But in my last batch of reading, 0:10:45.800 --> 0:10:47.679 I did read a couple of the homebuilders that reported 0:10:47.679 --> 0:10:50.199 early and they specifically said they weren't seeing any kind 0:10:50.200 --> 0:10:53.160 of derivative negative pressures on labor because of immigration. 0:10:53.480 --> 0:10:56.760 David Sasar is north of New York City. You should 0:10:56.800 --> 0:10:58.600 see what he's like. Eight thousand square. 0:10:58.720 --> 0:10:59.400 Oh good for him. 0:11:00.280 --> 0:11:02.840 The Christmas tree, it's almost as big as scarlet foods. 0:11:03.760 --> 0:11:03.880 Yea. 0:11:04.080 --> 0:11:07.200 Damien said, it's just booming. He said, there's absolutely no 0:11:07.360 --> 0:11:08.599 let up whatsoever. 0:11:09.000 --> 0:11:11.120 And look, I will say if we're thinking short term 0:11:11.160 --> 0:11:13.600 long term, if you go back to twenty eighteen, companies 0:11:13.640 --> 0:11:16.040 didn't really raise the alarm bell on tariffs until like 0:11:16.120 --> 0:11:19.360 September in that conference season, before the earnings reporting season, 0:11:19.400 --> 0:11:21.560 kind of post labor day. So it may take some 0:11:21.679 --> 0:11:24.760 time to see the residual impacts. We are seeing in 0:11:24.800 --> 0:11:28.760 company commentary indications of tariff pre buying. We saw one 0:11:28.800 --> 0:11:31.320 of the banks call that out. And also you know, 0:11:31.679 --> 0:11:33.520 some and some of my clients I met with last 0:11:33.559 --> 0:11:35.760 week also clued me in on this. But the idea 0:11:35.800 --> 0:11:39.000 of managing your inventories and pulling forward some of that inventory, 0:11:39.320 --> 0:11:41.679 I would you know, we called this earning season in 0:11:41.720 --> 0:11:44.360 our latest weekly as potentially like a box of chocolates. 0:11:44.360 --> 0:11:46.240 We don't know exactly what we're going to get. We 0:11:46.280 --> 0:11:47.319 could get some good ones. 0:11:47.440 --> 0:11:49.440 You have to stop talking, But if you could just 0:11:49.520 --> 0:11:52.000 sit there, because when you sit here, the market goes up. 0:11:52.320 --> 0:11:53.600 Yeah, that works. 0:11:54.880 --> 0:11:57.480 SMB Futures ninety dow p getting them ere up five 0:11:57.559 --> 0:11:59.960 hundred and four to seventy four on a Lori Kelvin 0:12:00.120 --> 0:12:03.880 scene of Dow Jones Industrial Average. Miss Calvacina is with 0:12:03.920 --> 0:12:08.000 the Royal Bank of Canada RBC Capital Markets. 0:12:12.640 --> 0:12:16.240 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:12:16.280 --> 0:12:19.440 weekday afternoons from seven to ten am Eastern Listen on 0:12:19.520 --> 0:12:23.200 Applecarplay and Android Auto with the Bloomberg Business app, or 0:12:23.360 --> 0:12:25.079 watch us live on YouTube. 0:12:25.600 --> 0:12:26.719 We're gonna digress here. 0:12:26.720 --> 0:12:29.280 We got too short a visit with Gargi Chowdry, but 0:12:29.360 --> 0:12:31.160 we've got to take the time out of here because 0:12:31.160 --> 0:12:33.920 it's a time of year where someone like me looks 0:12:33.920 --> 0:12:36.480 out the window goes, I gotta get in shape. We 0:12:36.559 --> 0:12:39.360 got a division here today in the studios, Folks are 0:12:39.480 --> 0:12:42.119 wonderful studios here at Bloomberg. 0:12:42.320 --> 0:12:47.400 Over here on the north side of the studio is the. 0:12:47.960 --> 0:12:52.160 Out of shape Sunday. We're going to run studio. On 0:12:52.200 --> 0:12:55.959 the other side of the studio, Lisa Matteo and Gargy 0:12:56.080 --> 0:12:58.120 Choudry are the real deal. 0:12:58.520 --> 0:12:59.520 Gargy, how do you. 0:12:59.480 --> 0:13:03.520 Get moti evated to jump into the Hudson River swim five. 0:13:03.320 --> 0:13:07.560 Miles two and a half, But I will say that 0:13:07.559 --> 0:13:10.920 the Hudson is cleaner than its reputation has you believe. 0:13:12.000 --> 0:13:14.439 See, but again just a whole look. 0:13:15.320 --> 0:13:18.280 Dogs get okay, there are. 0:13:18.200 --> 0:13:19.439 Certain people that do that stuff. 0:13:19.480 --> 0:13:21.360 I get this some missus Keane. You got to learn 0:13:21.440 --> 0:13:24.400 to stretch. Can you see me stretching? Lisa and Gargy, 0:13:24.679 --> 0:13:28.240 how do you stretch? What's the most efficacious way to stretch? 0:13:28.920 --> 0:13:31.880 Yoa glass? Yoga? 0:13:32.160 --> 0:13:33.160 Oh there you go? 0:13:33.800 --> 0:13:34.440 What's yoga? 0:13:34.679 --> 0:13:34.880 Yeah? 0:13:35.760 --> 0:13:37.520 Lisa? How do you stretch? You got to get out 0:13:37.520 --> 0:13:38.120 of you to the body. 0:13:38.320 --> 0:13:40.720 Do it a little pilates? Maybe I have a machine. 0:13:40.880 --> 0:13:43.040 I have a machine too. If that Bill has it, 0:13:43.200 --> 0:13:45.480 you know it's a dog pilates. Thank you for that. 0:13:45.920 --> 0:13:46.040 Uh. 0:13:46.480 --> 0:13:47.640 These two are really. 0:13:47.360 --> 0:13:50.240 Committed to doing iron Man and triathle On and all that. 0:13:50.280 --> 0:13:52.600 It's wonderful to see that Gurgy. I got to get 0:13:52.600 --> 0:13:55.199 the boy market one l think out. 0:13:55.040 --> 0:13:56.960 Making the circuit this weekend. 0:13:57.520 --> 0:14:00.640 Explain the worry at black Rock that we hear from 0:14:01.040 --> 0:14:03.080 Larry Fink and that we hear from Gardisha. 0:14:03.440 --> 0:14:05.160 Color, the quality of the. 0:14:05.080 --> 0:14:08.560 Angst, color, the quality of the angst. I love that. 0:14:08.720 --> 0:14:11.880 So I think the best way I can speak to 0:14:11.920 --> 0:14:14.480 it is what we saw sort of over forty eight 0:14:14.559 --> 0:14:17.880 period where thirty treasury yields moved up by call it 0:14:18.200 --> 0:14:22.600 seventy two basis price down, yields moved up price down, Yes, 0:14:22.880 --> 0:14:24.920 and I think a part of that we all know 0:14:25.200 --> 0:14:27.160 was to make room for the auction. Some of that 0:14:27.360 --> 0:14:30.080 was the big basis unwind, it was around swap spreads. 0:14:30.440 --> 0:14:32.680 But I do want to be very clear there was 0:14:32.760 --> 0:14:36.320 no panic in the market. There was volumes trading. You know, 0:14:36.360 --> 0:14:39.040 we monitor a lot what ETFs are doing as a 0:14:39.080 --> 0:14:41.360 percentage of tape. You had a few days where et 0:14:41.440 --> 0:14:45.000 apps were allowing to be that release valve of the market. 0:14:45.360 --> 0:14:49.480 So yes, a big fear around what deficits might do, 0:14:49.560 --> 0:14:52.320 which is leading to long ends moving higher. Today they 0:14:52.320 --> 0:14:54.360 are a bit stable, but certainly that's been the price 0:14:54.400 --> 0:14:56.640 action for long end which is why we think the 0:14:56.680 --> 0:14:59.760 belly of the curve still offers you better value at 0:14:59.800 --> 0:15:05.200 the same time, not panicked move. There's still risk changing hands. 0:15:05.240 --> 0:15:07.400 I think that's really important for all your listeners to 0:15:07.400 --> 0:15:07.880 be aware of. 0:15:08.080 --> 0:15:12.440 So just broadly speaking in terms across all of your portfolio, 0:15:12.440 --> 0:15:14.520 I mean black Rock's got a couple of dollars under management. 0:15:14.760 --> 0:15:18.520 We understand that. How do you guys internally when you 0:15:18.560 --> 0:15:21.240 sit down and have your meetings, say, what are we 0:15:21.280 --> 0:15:24.240 going to do this week? Is realistically, we have no 0:15:24.360 --> 0:15:26.560 idea what's going to come out of the White House 0:15:26.600 --> 0:15:29.280 which will whipsaw markets? How do you guys have black 0:15:29.360 --> 0:15:30.720 Rock kind of think about that. 0:15:30.800 --> 0:15:32.960 Yeah, So you know, we have a lot of internal 0:15:32.960 --> 0:15:35.840 meetings as you point out, and senior investors get together 0:15:35.920 --> 0:15:37.840 and talk about what they're seeing in their corner of 0:15:37.880 --> 0:15:40.040 the markets. And I think one of the things that 0:15:40.120 --> 0:15:43.280 everyone's trying to do is separate the signal from the noise. 0:15:43.760 --> 0:15:48.240 So there obviously has been some noise around, especially this weekend, 0:15:48.280 --> 0:15:51.880 around some exceptions perhaps and then some tweets around maybe 0:15:51.880 --> 0:15:54.320 those exceptions are not exactly what we first not them 0:15:54.360 --> 0:15:57.960 to be. But taking a giant step back coming into 0:15:58.000 --> 0:16:00.680 the cl what was the tariff rate and what do 0:16:00.720 --> 0:16:03.320 we think projections for tariff rates are going to be 0:16:03.520 --> 0:16:06.760 in the next few months. Looking at the soft versus 0:16:06.760 --> 0:16:10.200 the hard data, obviously soft data a little bit worrisome. 0:16:10.280 --> 0:16:13.640 We saw that Michigan softening again and inflation picking up 0:16:13.640 --> 0:16:16.920 pretty meaningfully in the Michigan five to tenure inflation expectations, 0:16:17.120 --> 0:16:19.320 but at the same time in the herd data you 0:16:19.600 --> 0:16:22.760 have not yet seen. Any of the concerns are on 0:16:22.880 --> 0:16:26.800 rising inflation and slowing growth. So recognizing both of those 0:16:26.920 --> 0:16:30.120 and most importantly telling our clients what to do. That's 0:16:30.160 --> 0:16:35.120 our role. Telling clients stay invested, add some diversifiers, add 0:16:35.200 --> 0:16:38.280 some hedges, clip some coupons, and the fixed and come markets. 0:16:38.440 --> 0:16:41.640 What do you do with cash? Do you increase cash? 0:16:42.320 --> 0:16:45.720 Do you wait with cash? I mean to me, you know, 0:16:45.760 --> 0:16:48.320 to our listeners and viewers. That's a key key question. 0:16:48.160 --> 0:16:50.200 Here, Tom great question when we. 0:16:50.160 --> 0:16:52.920 Think, yeah, this is it, I'm going home. 0:16:53.120 --> 0:16:56.720 Cash has seen a lot of inflows. SGOV, which is 0:16:56.800 --> 0:17:00.400 our t bill sort of ETF, has seen the most 0:17:00.400 --> 0:17:04.800 amount of inflos. It's one of the highest gathering asset 0:17:04.840 --> 0:17:09.280 classes this year. So investors are thinking about cash as 0:17:09.280 --> 0:17:11.879 an asset class. I think we need to recognize that 0:17:11.920 --> 0:17:16.200 there continues to be a role for things like SGOV 0:17:16.280 --> 0:17:19.480 in your portfolio. But what we're telling investors is also 0:17:19.640 --> 0:17:23.320 think of opportunities to you sort of look at areas 0:17:23.320 --> 0:17:25.240 of the market that have had perhaps too much of 0:17:25.280 --> 0:17:29.120 a correction. We're telling investors add some minimum volatility, add 0:17:29.200 --> 0:17:32.800 some gold, think of areas to buy quality technology, in 0:17:32.840 --> 0:17:34.159 your portfolio. 0:17:34.200 --> 0:17:35.800 So longer term. 0:17:35.880 --> 0:17:38.400 I mean again, the administration is promising perhaps some near 0:17:38.480 --> 0:17:40.920 term pain for some longer term gain in terms of 0:17:40.960 --> 0:17:46.280 productivity investment. Is that something you can think about or 0:17:46.320 --> 0:17:47.760 is it just trying to deal with the day. 0:17:47.640 --> 0:17:50.800 To day No, absolutely, that's the job trying to think about. 0:17:50.840 --> 0:17:52.960 Like I said, what is the signal versus what is 0:17:53.000 --> 0:17:56.000 the noise in the future? Is the signal towards a 0:17:56.080 --> 0:17:58.919 more productive world in the future. Are we going to 0:17:59.000 --> 0:18:02.000 get to a point where we can point to higher 0:18:02.040 --> 0:18:04.320 growth as a result of all of the noise that 0:18:04.359 --> 0:18:06.520 we might be getting today. I think it's a little 0:18:06.560 --> 0:18:09.399 too early to tell. I'm looking at price action in 0:18:09.440 --> 0:18:12.040 the markets now, and I'm very relieved to see that 0:18:12.119 --> 0:18:16.120 bond markets are behaving in a pretty normalized manner, which 0:18:16.160 --> 0:18:19.040 gives us a little bit of confidence in where equities 0:18:19.040 --> 0:18:19.360 can go. 0:18:19.320 --> 0:18:20.960 To the Okay, this is Keith, thank you for bringing 0:18:21.000 --> 0:18:23.119 us up. I've got a whole set of things. I 0:18:23.160 --> 0:18:25.920 look at some of them pretty esoteric. I look at 0:18:25.920 --> 0:18:28.320 libr or ois a new and SO for ten year. 0:18:28.720 --> 0:18:32.639 Damien Sasauer looks at SO for two year. They're behaving well. 0:18:32.720 --> 0:18:36.359 This morning, Sweeney's brilliant. He looks at the TUESDA ten spread. 0:18:36.400 --> 0:18:40.239 What does Gargie Chowdery suggest we should look at to 0:18:40.280 --> 0:18:42.640 say the bond market's deteriorating? 0:18:42.920 --> 0:18:44.159 The bond market's. 0:18:43.800 --> 0:18:46.520