1 00:00:01,400 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along 2 00:00:04,160 --> 00:00:06,240 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,400 Speaker 1: we bring you interviews from CEO, market pros, and Bloomberg experts, 4 00:00:10,440 --> 00:00:13,640 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,640 --> 00:00:16,960 Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:21,560 Speaker 1: and on Bloomberg dot com. Yesterday mark the day Phase 7 00:00:21,680 --> 00:00:25,240 Speaker 1: two reopening for New York City. One of the areas 8 00:00:25,280 --> 00:00:28,440 Speaker 1: that got a little bit of relief was the restaurant business. 9 00:00:28,520 --> 00:00:33,200 Speaker 1: Outdoor dinning now allowed uh as the restaurant industry tries 10 00:00:33,240 --> 00:00:34,680 Speaker 1: to get back on its feet. To get a sense 11 00:00:34,720 --> 00:00:37,760 Speaker 1: of how that went and how the restaurant industry globally 12 00:00:37,960 --> 00:00:40,960 Speaker 1: is faring here in this pandemic world, we welcome Kate, 13 00:00:41,000 --> 00:00:44,239 Speaker 1: a creator food editor for Bloomberg Pursuits. Kate, thanks so 14 00:00:44,320 --> 00:00:46,680 Speaker 1: much for joining us. Give us a sense of how 15 00:00:47,159 --> 00:00:51,120 Speaker 1: you think the reopening of the restaurant business in New 16 00:00:51,200 --> 00:00:53,280 Speaker 1: York City is gonna go. We're all gonna be sitting 17 00:00:53,320 --> 00:00:55,240 Speaker 1: on sidewalks and in the middle of the street, I guess, 18 00:00:55,800 --> 00:00:57,640 Speaker 1: But what did you what did you see yesterday and 19 00:00:57,640 --> 00:01:00,160 Speaker 1: what are some of the restaurant tours thinking as as 20 00:01:00,400 --> 00:01:04,520 Speaker 1: they reopen. Um, that's a really good question. Um. And 21 00:01:04,560 --> 00:01:06,959 Speaker 1: I think, um, I think how it went and how 22 00:01:06,959 --> 00:01:09,319 Speaker 1: it's gonna go, it depends on who you ask. Because 23 00:01:09,800 --> 00:01:12,720 Speaker 1: for some people, so that's what terms. I think a 24 00:01:12,720 --> 00:01:15,360 Speaker 1: lot of them are just delighted that they get to 25 00:01:15,400 --> 00:01:18,480 Speaker 1: be back in business and serving people. And you know, 26 00:01:18,560 --> 00:01:21,759 Speaker 1: they've been setting up table six ft apart and you know, 27 00:01:22,360 --> 00:01:24,840 Speaker 1: all of a sudden like activating their parking lots and 28 00:01:24,840 --> 00:01:28,479 Speaker 1: turning them into dining rooms. Um. But for then for 29 00:01:28,520 --> 00:01:31,360 Speaker 1: some other people, it's not a one size fits all situation. 30 00:01:31,760 --> 00:01:33,880 Speaker 1: And so for some people they realized that selling a 31 00:01:33,920 --> 00:01:38,800 Speaker 1: ten dollar full of soup is not financially viable when 32 00:01:38,920 --> 00:01:41,480 Speaker 1: you can only do fifty percent capacity and have people 33 00:01:41,560 --> 00:01:45,000 Speaker 1: six feet apart. So it's different, it's different throughout. But 34 00:01:45,040 --> 00:01:48,960 Speaker 1: I think there's a costive optimism, that's what I would say. Overall. Yeah, Okay, 35 00:01:48,960 --> 00:01:51,640 Speaker 1: there are twenty seven thousand restaurants in New York City. 36 00:01:51,720 --> 00:01:55,880 Speaker 1: Surely all of them don't have outside room, do they? No? 37 00:01:56,040 --> 00:01:59,400 Speaker 1: They they go not in New York City. I mean 38 00:01:59,600 --> 00:02:02,040 Speaker 1: they're has clothes. I think, like forty three miles of 39 00:02:02,200 --> 00:02:06,400 Speaker 1: streets and that some of that can live the alleviate. 40 00:02:06,520 --> 00:02:09,639 Speaker 1: A lot of restaurants were able to apply for outdoor 41 00:02:09,680 --> 00:02:12,800 Speaker 1: seating permits in a place like Peter Luger and Brooklyn 42 00:02:12,800 --> 00:02:16,280 Speaker 1: that has never ever served stake outside their doors. Um 43 00:02:16,520 --> 00:02:19,680 Speaker 1: got the permit, got the permit, and as of Thursday, 44 00:02:19,919 --> 00:02:23,000 Speaker 1: is going to have tables outside their restaurant and it's 45 00:02:23,040 --> 00:02:25,720 Speaker 1: putting the parking lot into a sort of picnic area. 46 00:02:26,280 --> 00:02:29,680 Speaker 1: So um, So a lot of restaurants can take advantage 47 00:02:29,680 --> 00:02:32,480 Speaker 1: of it, but certainly you're right, not all of them can, 48 00:02:32,919 --> 00:02:35,560 Speaker 1: and not all of them want to just to follow there. 49 00:02:35,639 --> 00:02:38,239 Speaker 1: I wasn't sure if you needed a permit. How does 50 00:02:38,280 --> 00:02:41,760 Speaker 1: the permitting system work and how much does it cost? Um, 51 00:02:41,800 --> 00:02:44,440 Speaker 1: that's a good question that I haven't applied to a permit, 52 00:02:44,480 --> 00:02:47,360 Speaker 1: and I'm not sure I know that. I know that 53 00:02:47,480 --> 00:02:51,000 Speaker 1: the permitting um went live on I think it was 54 00:02:51,040 --> 00:02:53,120 Speaker 1: it was either Thursday or Friday. So it's just like 55 00:02:53,400 --> 00:02:56,840 Speaker 1: four or five days ago to have a permit for Monday. 56 00:02:56,919 --> 00:02:59,200 Speaker 1: So there's been a lot of There hasn't always been 57 00:02:59,200 --> 00:03:02,120 Speaker 1: great messaging from the government, you know. I think that 58 00:03:02,200 --> 00:03:05,360 Speaker 1: a lot of restaurants and restaurateurs continue to have a 59 00:03:05,360 --> 00:03:08,239 Speaker 1: lot of questions about what to do. For instance, you're 60 00:03:08,240 --> 00:03:10,200 Speaker 1: eating outdoors, but what happens if you have to go 61 00:03:10,240 --> 00:03:14,080 Speaker 1: to the bathroom because there's all these rules about distance 62 00:03:14,200 --> 00:03:16,280 Speaker 1: and how many people can use the bathroom and all 63 00:03:16,320 --> 00:03:19,160 Speaker 1: of it. So there's still a ton of questions. Um, 64 00:03:19,160 --> 00:03:21,800 Speaker 1: But the permitting process, I think it went really quickly 65 00:03:22,040 --> 00:03:25,320 Speaker 1: once people could apply, but the applications went up very late. 66 00:03:25,360 --> 00:03:29,120 Speaker 1: As I understand it. It's okay. I know Leslie Patton 67 00:03:29,240 --> 00:03:31,840 Speaker 1: and you wrote a story for Today on the Bloomberg 68 00:03:32,120 --> 00:03:34,720 Speaker 1: and that the headline really grabbed me. Two point two 69 00:03:34,720 --> 00:03:40,040 Speaker 1: million restaurants worldwide teeter on the brink of collapse? Can 70 00:03:40,040 --> 00:03:44,200 Speaker 1: this restaurant industry? Is this gonna be permanently scarred here? Yeah? 71 00:03:44,280 --> 00:03:46,680 Speaker 1: Oh my gosh, we're never gonna you know, if you 72 00:03:46,880 --> 00:03:48,400 Speaker 1: think we're gonna get back to what it was like 73 00:03:48,440 --> 00:03:52,800 Speaker 1: in February and we're not, you know, I think, Um, 74 00:03:52,840 --> 00:03:58,080 Speaker 1: there's there's no way, there's no there's no going back. 75 00:03:58,160 --> 00:04:01,440 Speaker 1: Everybody has to move forward on the successful people, the 76 00:04:01,520 --> 00:04:04,760 Speaker 1: most successful restfuls were going to be the one realize 77 00:04:04,800 --> 00:04:09,119 Speaker 1: that figure out see new new ways, new way forward, 78 00:04:09,400 --> 00:04:12,960 Speaker 1: an opportunity. But um, there was reports from the National 79 00:04:13,000 --> 00:04:17,159 Speaker 1: Restaurant Association that the industry has already lost twenty billion 80 00:04:17,480 --> 00:04:19,680 Speaker 1: and they don't think they can be profitable for at 81 00:04:19,720 --> 00:04:23,839 Speaker 1: least six months, and I think six months is optimistic, actually, yeah, 82 00:04:23,880 --> 00:04:26,440 Speaker 1: And I mean for restaurants, you have to be profitable 83 00:04:26,440 --> 00:04:29,000 Speaker 1: on a weekly basis in order to keep the running cade. 84 00:04:29,200 --> 00:04:32,920 Speaker 1: How will the restaurants that have low occupancy to begin with, 85 00:04:33,320 --> 00:04:36,560 Speaker 1: I mean several on My Street alone can only fit 86 00:04:36,680 --> 00:04:38,920 Speaker 1: a certain amount of people. How do they manage week 87 00:04:38,920 --> 00:04:41,200 Speaker 1: to week if they just don't get those extra ten 88 00:04:41,320 --> 00:04:44,880 Speaker 1: customers that they need to make that profit margin. Yeah, Vanny, 89 00:04:44,960 --> 00:04:47,120 Speaker 1: that's such a good question. And I think, especially right 90 00:04:47,120 --> 00:04:50,640 Speaker 1: now in days two works all outdoor season. Um this 91 00:04:51,000 --> 00:04:53,719 Speaker 1: um chef my Price at the Clam in New York 92 00:04:53,800 --> 00:04:56,720 Speaker 1: was saying, you could have a slow Monday day, but 93 00:04:56,760 --> 00:05:01,360 Speaker 1: you're Saturday Saturday would cover your cost. And now there's 94 00:05:01,360 --> 00:05:04,640 Speaker 1: so many variables. And also outdoor seating is depending on weather. 95 00:05:04,720 --> 00:05:06,920 Speaker 1: So if you have a rainy Saturday and you thought 96 00:05:07,120 --> 00:05:09,680 Speaker 1: you had sold that, you know sort of sold out 97 00:05:10,040 --> 00:05:12,880 Speaker 1: and then you can't get everybody in, that's a disaster. 98 00:05:13,080 --> 00:05:15,000 Speaker 1: I mean a lot of them, A lot of restaurants 99 00:05:15,040 --> 00:05:18,840 Speaker 1: have been enterprising and turned themselves into like grocery stores 100 00:05:18,880 --> 00:05:23,640 Speaker 1: and selling cocktails, and that's done a surprisingly good job 101 00:05:23,680 --> 00:05:28,960 Speaker 1: of helping, um, helping create income. But I think exactly 102 00:05:28,960 --> 00:05:31,120 Speaker 1: as you said, it's still like the margins are so 103 00:05:31,279 --> 00:05:36,160 Speaker 1: slim anyway. So, um, it's a real uh, it's it's 104 00:05:36,279 --> 00:05:39,919 Speaker 1: a very challenging future. So just real quick, Um, in 105 00:05:39,960 --> 00:05:42,960 Speaker 1: New York City, how many restaurants are expected that boy 106 00:05:43,040 --> 00:05:46,560 Speaker 1: just go out of business? I guess, um, that's it's 107 00:05:46,600 --> 00:05:50,080 Speaker 1: a good and scary question. Um. Open table to the survey, 108 00:05:50,200 --> 00:05:54,479 Speaker 1: and they thought nathma of restaurants wouldn't make get I 109 00:05:54,560 --> 00:05:57,560 Speaker 1: think in New York that number might be higher. I'm sure. 110 00:05:57,600 --> 00:06:00,080 Speaker 1: I mean, I think that's a conservative estimate. Anyway, it 111 00:06:00,160 --> 00:06:03,520 Speaker 1: in New York, as you guys were saying, space is 112 00:06:03,600 --> 00:06:07,279 Speaker 1: much tighter, soft occupancy is is a big difference, like 113 00:06:07,320 --> 00:06:10,560 Speaker 1: ten people, like Bonnie said, So I think that numbers 114 00:06:10,560 --> 00:06:12,599 Speaker 1: can be higher. I would not be surprised if it's 115 00:06:12,600 --> 00:06:16,960 Speaker 1: like at least it's a very scary number. Yeah, it's terrifying. Kate, 116 00:06:16,960 --> 00:06:19,320 Speaker 1: there's some great details in your story. I would urge 117 00:06:19,320 --> 00:06:21,880 Speaker 1: everyone to read a two point two million restaurants worldwide 118 00:06:21,880 --> 00:06:25,600 Speaker 1: teeter on brink of collapse. That's Kate Crater. They're joining us. 119 00:06:25,640 --> 00:06:29,280 Speaker 1: And one of those paragraphs, Paul lays out just how 120 00:06:29,320 --> 00:06:32,560 Speaker 1: much it costs to change to contact less takeout orders 121 00:06:32,560 --> 00:06:36,480 Speaker 1: and delivery, of course, and this equipment walkie talkies, masks, thermometers, 122 00:06:36,640 --> 00:06:40,240 Speaker 1: but five thousand dollars a month for the average restaurant apparently, Yeah, 123 00:06:40,279 --> 00:06:42,720 Speaker 1: that's the economics on delivery business not nearly as good 124 00:06:42,720 --> 00:06:49,000 Speaker 1: as in store dining. Daty check Research produces a morning 125 00:06:49,080 --> 00:06:52,720 Speaker 1: note that is always, always thought provoking, five days a week. 126 00:06:53,440 --> 00:06:57,080 Speaker 1: Something just sparks the thought process when you take a 127 00:06:57,080 --> 00:07:00,240 Speaker 1: look at the email. And in recent days the under 128 00:07:00,320 --> 00:07:03,440 Speaker 1: Nicholas has been looking at everything from yield curve control 129 00:07:03,520 --> 00:07:07,120 Speaker 1: to the impact of the upcoming elections on stocks and 130 00:07:07,160 --> 00:07:11,320 Speaker 1: on markets, and how this do nothing market is just 131 00:07:11,440 --> 00:07:14,720 Speaker 1: a little bit baffling, and some ideas for what to 132 00:07:14,720 --> 00:07:16,480 Speaker 1: do in this do nothing market. Let's bring him in now, 133 00:07:16,600 --> 00:07:20,200 Speaker 1: Nikola's co founder of data check or Research. Nick. Let's 134 00:07:20,200 --> 00:07:23,120 Speaker 1: start with yield curve control, only because you pointed out 135 00:07:23,160 --> 00:07:26,040 Speaker 1: today the New York Fed blog out which explains why 136 00:07:26,320 --> 00:07:30,160 Speaker 1: yield curve control is more efficient than quantitative easing and 137 00:07:30,200 --> 00:07:33,000 Speaker 1: at the same time in a different region, the St. 138 00:07:33,040 --> 00:07:35,720 Speaker 1: Louisfide President Jim Bullard is saying, no, we're not going 139 00:07:35,760 --> 00:07:39,760 Speaker 1: to have yield curve control. It's it's unnecessary. Yes, it 140 00:07:39,840 --> 00:07:42,320 Speaker 1: was fascinating to see the New York Fed actually put 141 00:07:42,320 --> 00:07:46,440 Speaker 1: out a blog analyzing the Japanese experience with yold curve 142 00:07:46,520 --> 00:07:49,880 Speaker 1: control and pointed out very clearly the yield curve control 143 00:07:49,960 --> 00:07:52,960 Speaker 1: has the advantage of not requiring as much capital from 144 00:07:53,000 --> 00:07:56,160 Speaker 1: a central bank to execute a given rate target for 145 00:07:56,240 --> 00:07:59,000 Speaker 1: say the long end of the curve. Instead of spending 146 00:07:59,360 --> 00:08:02,040 Speaker 1: tents and tens and tens of billions of dollars to 147 00:08:02,120 --> 00:08:05,200 Speaker 1: hold rates at a certain level, simply telling the market 148 00:08:05,240 --> 00:08:07,360 Speaker 1: we're going to peg it at X means you have 149 00:08:07,440 --> 00:08:10,080 Speaker 1: to spend much less money to make it stay at X. 150 00:08:10,200 --> 00:08:12,280 Speaker 1: So it's fascinating to see the New York Feds saying 151 00:08:12,440 --> 00:08:14,800 Speaker 1: there is some merit to yield of control in terms 152 00:08:14,840 --> 00:08:18,880 Speaker 1: of efficiency in central bank balance sheets. Hey, Nick, I 153 00:08:18,880 --> 00:08:21,320 Speaker 1: mean so when you think about this market here, are 154 00:08:21,320 --> 00:08:24,400 Speaker 1: you concerned about what I'm going to term or the 155 00:08:24,520 --> 00:08:28,520 Speaker 1: lack of breath if you will in this market? You know, 156 00:08:28,520 --> 00:08:31,640 Speaker 1: this move off the bottom, it's you know, centered on 157 00:08:31,680 --> 00:08:33,960 Speaker 1: a handful of names, the Amazons on the apples of 158 00:08:33,960 --> 00:08:37,000 Speaker 1: the world. How much of a concern is that for you? Yeah, 159 00:08:37,000 --> 00:08:39,400 Speaker 1: it's a fascinating point. I mean, if you look at 160 00:08:39,400 --> 00:08:42,200 Speaker 1: the two thousand nine rallied, for example, which there are 161 00:08:42,240 --> 00:08:45,200 Speaker 1: many analogs to the current rally, in that one, the 162 00:08:45,240 --> 00:08:47,880 Speaker 1: two thousand nine rally was all about the banks. The 163 00:08:47,960 --> 00:08:52,080 Speaker 1: banks doubled in value from March nine, two thousand nine, 164 00:08:52,480 --> 00:08:55,160 Speaker 1: through the next sixty days, ninety days rather you know, 165 00:08:55,240 --> 00:08:57,920 Speaker 1: basically the same days today, So it was led by 166 00:08:58,040 --> 00:09:01,120 Speaker 1: banks even more than this has been led by tech. 167 00:09:01,240 --> 00:09:04,880 Speaker 1: So it does feel that big snapback rallies off the 168 00:09:04,880 --> 00:09:08,000 Speaker 1: bottom are always led by something. In OH nine, it 169 00:09:08,120 --> 00:09:10,720 Speaker 1: was banks for all the obvious reasons. This time around, 170 00:09:10,720 --> 00:09:12,880 Speaker 1: it's been tech because of all the stay at home, 171 00:09:12,960 --> 00:09:16,079 Speaker 1: work at home phenomena that we're seeing still play out 172 00:09:16,120 --> 00:09:19,200 Speaker 1: to this day, and that seems so caught investors attention. 173 00:09:19,320 --> 00:09:22,080 Speaker 1: So I'd say, as unusual as it is, it does 174 00:09:22,120 --> 00:09:24,840 Speaker 1: fit a paradigm for snap back rallies like OH nine 175 00:09:24,920 --> 00:09:29,400 Speaker 1: and Nick Robin Hood has been a huge source of 176 00:09:29,440 --> 00:09:31,319 Speaker 1: interest to you know, so many people all over the 177 00:09:31,360 --> 00:09:35,040 Speaker 1: country in the recent days and weeks. Retail platform for 178 00:09:35,120 --> 00:09:38,720 Speaker 1: retail traders. How much of an impact are these people 179 00:09:38,840 --> 00:09:41,480 Speaker 1: that maybe have an average account size that you say, 180 00:09:41,600 --> 00:09:43,600 Speaker 1: less than five thou dollars. How much of an impact 181 00:09:43,600 --> 00:09:46,800 Speaker 1: are they really having on the market, you know, as 182 00:09:46,840 --> 00:09:49,480 Speaker 1: a market impact, I'd say not that much. They do 183 00:09:49,559 --> 00:09:51,720 Speaker 1: get a lot of press because of things like hurts 184 00:09:51,800 --> 00:09:53,640 Speaker 1: and the U. S O E. T F before that, 185 00:09:54,240 --> 00:09:56,679 Speaker 1: So they are making some rookie mistakes because that's what 186 00:09:56,800 --> 00:09:59,480 Speaker 1: rookies do, and that's fine. But as you said, the 187 00:09:59,480 --> 00:10:02,960 Speaker 1: account anances are relatively small. Robin Hood doesn't even have 188 00:10:03,000 --> 00:10:06,200 Speaker 1: an I Rara product. This is all kind of discretionary 189 00:10:06,280 --> 00:10:09,440 Speaker 1: retail money, taxable money, people putting in a couple of 190 00:10:09,440 --> 00:10:12,440 Speaker 1: thousand dollars to play the market while sports betting is closed. 191 00:10:12,679 --> 00:10:14,480 Speaker 1: So I think it's interesting, but I don't think it's 192 00:10:14,480 --> 00:10:16,600 Speaker 1: had a big effect in terms of money flows. But 193 00:10:16,920 --> 00:10:19,600 Speaker 1: I tell you, I mean, having looked at markets for 194 00:10:19,600 --> 00:10:22,000 Speaker 1: thirty years, it is fascinating to see, you know, a 195 00:10:22,000 --> 00:10:24,560 Speaker 1: couple of million people decided they want to trade stocks 196 00:10:24,559 --> 00:10:26,760 Speaker 1: in the course of ninety days, because that hasn't happened 197 00:10:26,760 --> 00:10:29,560 Speaker 1: in twenty years. So it's it's interesting to see. But 198 00:10:29,679 --> 00:10:33,120 Speaker 1: from a money flow perspective, not all that relevant. Well, Nick, 199 00:10:33,160 --> 00:10:35,520 Speaker 1: you are no rookies, you say thirty years, you're a 200 00:10:35,520 --> 00:10:38,400 Speaker 1: grizzled veteran here. So you've been through a lot of 201 00:10:38,440 --> 00:10:43,640 Speaker 1: presidential elections here, and somebody told me is an election year. 202 00:10:44,200 --> 00:10:47,000 Speaker 1: How are you kind of nobody's really focusing on it 203 00:10:47,080 --> 00:10:49,880 Speaker 1: right now because obviously there are bigger issues, more immediate 204 00:10:49,920 --> 00:10:53,520 Speaker 1: issues for folks and investors. How are you thinking about 205 00:10:53,559 --> 00:10:57,559 Speaker 1: the presidential election coming up here in the fall. You know, 206 00:10:57,640 --> 00:10:59,640 Speaker 1: the way we're thinking about it is not just the 207 00:10:59,679 --> 00:11:02,320 Speaker 1: president in the election, but the congressional ones as well. 208 00:11:02,760 --> 00:11:05,240 Speaker 1: And we did some work for clients last night that 209 00:11:05,320 --> 00:11:08,400 Speaker 1: looked at Okay, sit back in the nine. How does 210 00:11:08,440 --> 00:11:11,520 Speaker 1: the market do when one party controls both the White 211 00:11:11,559 --> 00:11:15,160 Speaker 1: House and Congress both chambers. It's only happened in thirty 212 00:11:15,200 --> 00:11:18,360 Speaker 1: years over the last seventy five, so less than half 213 00:11:18,440 --> 00:11:21,560 Speaker 1: the time. But when it does happen, if Republicans hold 214 00:11:21,559 --> 00:11:23,319 Speaker 1: both White House and Congress, the S and P s 215 00:11:23,400 --> 00:11:26,920 Speaker 1: up an average of six and when Democrats hold both 216 00:11:26,960 --> 00:11:30,480 Speaker 1: houses both chambers and the White House, it's a fourteen 217 00:11:30,559 --> 00:11:33,120 Speaker 1: point three percent on average, And the drawdowns are never 218 00:11:33,200 --> 00:11:36,240 Speaker 1: really bad. Those are both better than the average sup 219 00:11:36,400 --> 00:11:38,959 Speaker 1: returns in World War two, which is eleven. So the 220 00:11:39,080 --> 00:11:42,800 Speaker 1: really important thing is somebody, either party, somebody has to 221 00:11:42,880 --> 00:11:46,119 Speaker 1: own the economy, own the problems, and find the solutions. 222 00:11:46,160 --> 00:11:49,360 Speaker 1: And as long as that happens, markets tend to do okay. 223 00:11:49,440 --> 00:11:52,400 Speaker 1: So we're not as worried or focused on whether it's 224 00:11:52,480 --> 00:11:55,600 Speaker 1: Mr Trump or Mr Biden as much as someone's got 225 00:11:55,600 --> 00:11:58,760 Speaker 1: to own it, because particularly in the economy is still 226 00:11:58,760 --> 00:12:00,480 Speaker 1: gonna need to need a lot of help, and if 227 00:12:00,480 --> 00:12:03,600 Speaker 1: one party owns it, one party has to fix it. Yeah. 228 00:12:03,640 --> 00:12:05,920 Speaker 1: We actually heard the black men say that yesterday as well, 229 00:12:06,040 --> 00:12:10,679 Speaker 1: that he's not making any predictions or any trades based 230 00:12:10,679 --> 00:12:12,160 Speaker 1: on who might be the next president. And at the 231 00:12:12,200 --> 00:12:15,679 Speaker 1: same time, Nick, we're going to have such different policies 232 00:12:15,800 --> 00:12:22,120 Speaker 1: under a Joe Biden than under a second term President Trump. Right, absolutely, 233 00:12:22,160 --> 00:12:24,360 Speaker 1: I mean that the biggest worry I think for markets 234 00:12:24,440 --> 00:12:27,959 Speaker 1: is okay. Corporate taxes obviously came down in two thousands 235 00:12:27,960 --> 00:12:31,400 Speaker 1: seventeen will almost certainly go back up if Democrats control 236 00:12:31,480 --> 00:12:34,720 Speaker 1: both chambers and the White House. But we might also 237 00:12:34,760 --> 00:12:40,680 Speaker 1: see continuations of fiscal stimulus programs if unemployment continues to 238 00:12:40,720 --> 00:12:44,319 Speaker 1: be high, and if one party owns the economy next year, 239 00:12:44,400 --> 00:12:46,800 Speaker 1: they will have to figure out a way to make 240 00:12:46,840 --> 00:12:49,959 Speaker 1: growth happen, even if it means more fiscal stimulus. So 241 00:12:50,320 --> 00:12:53,040 Speaker 1: to me, it's TwixT and tween between the two problems. Yes, 242 00:12:53,080 --> 00:12:56,360 Speaker 1: probably higher corporate taxes, but if we can we escape 243 00:12:56,400 --> 00:12:59,679 Speaker 1: velocity and achieve a better economy through fiscal stimulus, that's 244 00:12:59,679 --> 00:13:02,960 Speaker 1: a stive, So I think it balances out. So Nick, 245 00:13:03,000 --> 00:13:05,200 Speaker 1: it seems like I'm just looking at the chart just 246 00:13:05,400 --> 00:13:08,640 Speaker 1: on and showing kind of the COVID cases in the 247 00:13:08,679 --> 00:13:10,840 Speaker 1: US and the you know, it's re recently, it's kind 248 00:13:10,840 --> 00:13:13,680 Speaker 1: of turned the other way the wrong way here. Yet 249 00:13:13,679 --> 00:13:16,880 Speaker 1: the market seems to be kind of discounting that so much. 250 00:13:16,880 --> 00:13:19,040 Speaker 1: Whereas if this if we'd seen the spike up in 251 00:13:19,440 --> 00:13:23,360 Speaker 1: big states like you know, Texas or Florida, we see 252 00:13:23,559 --> 00:13:25,800 Speaker 1: I think a pretty negative reaction the markets back in 253 00:13:25,840 --> 00:13:29,080 Speaker 1: February and early March and early April. What is your 254 00:13:29,120 --> 00:13:31,280 Speaker 1: sense of kind of how the markets thinking about the 255 00:13:31,360 --> 00:13:36,720 Speaker 1: virus per se, Yeah, very very important point. I think 256 00:13:36,760 --> 00:13:39,839 Speaker 1: two things. The first is this is why tech is 257 00:13:39,880 --> 00:13:43,280 Speaker 1: still rallying. You know, tech was the playoff to bottom 258 00:13:43,400 --> 00:13:45,800 Speaker 1: because of work at home and all the other things 259 00:13:45,840 --> 00:13:48,920 Speaker 1: we know, and tech continues to lead. That's one way 260 00:13:48,920 --> 00:13:51,640 Speaker 1: of knowing that the market is saying, we're not going 261 00:13:51,679 --> 00:13:54,480 Speaker 1: to play the rebound. The classic rebound trades were playing 262 00:13:54,559 --> 00:13:57,960 Speaker 1: tech because those things work regardless of what happens with 263 00:13:58,040 --> 00:14:01,559 Speaker 1: the virus and infection rates and how states managed lockdowns 264 00:14:01,559 --> 00:14:04,280 Speaker 1: and so forth. The second point I think the market 265 00:14:04,320 --> 00:14:07,680 Speaker 1: is saying is America is basically going to try to 266 00:14:07,679 --> 00:14:10,600 Speaker 1: power through this. Infection rates are going up, but it 267 00:14:10,600 --> 00:14:13,800 Speaker 1: seems to be among younger people with at least historically 268 00:14:13,840 --> 00:14:17,360 Speaker 1: lower mortality rates, and so this will be a problem, 269 00:14:17,480 --> 00:14:19,720 Speaker 1: but it won't be the existential problem that it was 270 00:14:19,720 --> 00:14:21,720 Speaker 1: when we locked down the entire country for the better 271 00:14:21,720 --> 00:14:24,560 Speaker 1: part of a month. So the market is saying profits 272 00:14:24,600 --> 00:14:26,440 Speaker 1: going to recover, but we still want to be in 273 00:14:26,440 --> 00:14:28,960 Speaker 1: the more defensive names for this environment, which is tech 274 00:14:29,160 --> 00:14:31,720 Speaker 1: and technically it's the market higher and Nick, thanks so 275 00:14:31,800 --> 00:14:34,120 Speaker 1: much for joining us once again. As always, we learn 276 00:14:34,280 --> 00:14:36,440 Speaker 1: a thing or two when we talk with you. Nicholas, 277 00:14:36,760 --> 00:14:40,880 Speaker 1: co founder, Data Trek Research. I recommend you read his stuff. 278 00:14:40,960 --> 00:14:45,520 Speaker 1: It's just really, really insightful, really gives you some food 279 00:14:45,560 --> 00:14:48,640 Speaker 1: for thought as we think about navigating these markets here 280 00:14:48,640 --> 00:14:53,560 Speaker 1: in these uncertain times. But we learned a lot about 281 00:14:53,600 --> 00:14:57,720 Speaker 1: Apple's strategy yesterday from him Cove at the Worldwide Developers Conference, 282 00:14:57,720 --> 00:15:01,360 Speaker 1: which supplies virtually it can news. Let's bring in somebody 283 00:15:01,360 --> 00:15:03,120 Speaker 1: who knows all about Apple and who can tell us 284 00:15:03,160 --> 00:15:05,080 Speaker 1: what exactly we need to be watching out for. David 285 00:15:05,080 --> 00:15:08,360 Speaker 1: Garrity as chief market strategist at laid Law and Company. 286 00:15:08,680 --> 00:15:11,400 Speaker 1: So we got the big announcement yesterday, David that Apple 287 00:15:11,480 --> 00:15:14,920 Speaker 1: is going to replace chips with its own chips, So 288 00:15:15,320 --> 00:15:19,480 Speaker 1: Intel no longer needed, Intel no longer inside Apple inside 289 00:15:19,600 --> 00:15:23,000 Speaker 1: these days, what else can we anticipate will emanate from 290 00:15:23,000 --> 00:15:28,960 Speaker 1: the week that would be of useful interest to investors? Yeah, no, certainly, Vonnie. 291 00:15:29,840 --> 00:15:31,920 Speaker 1: What's been coming into the conference, apart from the fact 292 00:15:31,920 --> 00:15:34,680 Speaker 1: that they move away from Intel to their own design chips, 293 00:15:35,120 --> 00:15:37,400 Speaker 1: is the fact that with regards to chip designs, they're 294 00:15:37,400 --> 00:15:40,400 Speaker 1: going to use a r M designed chips as a 295 00:15:40,440 --> 00:15:44,960 Speaker 1: platform across their entire range of hardware products, with the 296 00:15:45,040 --> 00:15:47,680 Speaker 1: idea that this can not only provide benefits in terms 297 00:15:47,720 --> 00:15:51,800 Speaker 1: of reduced power consumption, but also provide a standardized platform 298 00:15:51,840 --> 00:15:55,880 Speaker 1: that their developers can write programs to across all of 299 00:15:55,920 --> 00:15:59,680 Speaker 1: their products. So, David, give us a sense it seems 300 00:15:59,760 --> 00:16:01,440 Speaker 1: like a have a big deal to me to moving 301 00:16:01,480 --> 00:16:04,800 Speaker 1: away from you know, the tried and true chip maker 302 00:16:04,960 --> 00:16:07,960 Speaker 1: that is Intel that they've used for many years, to 303 00:16:08,160 --> 00:16:10,360 Speaker 1: their own chip. Why are they doing it? Why are 304 00:16:10,360 --> 00:16:14,600 Speaker 1: they doing it now? What's kind of the rationale? Well, 305 00:16:14,640 --> 00:16:17,920 Speaker 1: I mean Apple certainly has gotten to a scale where 306 00:16:17,920 --> 00:16:20,280 Speaker 1: it's possible for them to consider investments, so they may 307 00:16:20,280 --> 00:16:23,560 Speaker 1: not have done previously. Note, however, that you know, Apple 308 00:16:23,720 --> 00:16:27,080 Speaker 1: historically has had a business in which they've been involved 309 00:16:27,080 --> 00:16:31,720 Speaker 1: in designing semiconductors. Now they've had this in cooperation with 310 00:16:31,840 --> 00:16:35,960 Speaker 1: IBM in terms of IBM was running the semiconductor fabrication 311 00:16:36,040 --> 00:16:39,320 Speaker 1: plant where Apple design chips were made. So this is 312 00:16:39,360 --> 00:16:42,640 Speaker 1: not entirely a new business for Apple and also speaks 313 00:16:42,640 --> 00:16:45,880 Speaker 1: to the scale and also arguably speaks to what their 314 00:16:45,920 --> 00:16:49,400 Speaker 1: own intentions are for their technology that perhaps Intel was 315 00:16:49,440 --> 00:16:53,040 Speaker 1: not able to support as readily now in terms of 316 00:16:53,080 --> 00:16:56,480 Speaker 1: supporting its developer community. Uh, Tim Coke has been trying 317 00:16:56,520 --> 00:16:59,440 Speaker 1: to do a good job. But the US and Europe 318 00:16:59,600 --> 00:17:03,760 Speaker 1: isn't astigating Apple over antitrust allegations. How much it takes 319 00:17:03,760 --> 00:17:06,840 Speaker 1: from developers in the app store and so on. What happens? 320 00:17:07,040 --> 00:17:11,520 Speaker 1: How does the story end. Well, you know, it's certainly 321 00:17:11,840 --> 00:17:14,359 Speaker 1: this has gotten to be the services business for Apple 322 00:17:14,400 --> 00:17:17,360 Speaker 1: has gotten to be a fairly significant portion of their 323 00:17:17,440 --> 00:17:22,040 Speaker 1: overall revenue. High last year about forty six billion dollars 324 00:17:22,119 --> 00:17:25,200 Speaker 1: of what Apple made was coming out of services. These 325 00:17:25,240 --> 00:17:29,679 Speaker 1: are fueled by third party developers. Now, as we've read, 326 00:17:29,720 --> 00:17:34,720 Speaker 1: and no Apple charges its third party developers of their 327 00:17:34,760 --> 00:17:38,520 Speaker 1: revenues to actually have their products listed in the app store. Uh, 328 00:17:38,560 --> 00:17:41,600 Speaker 1: you know, from the standpoint of business development, is a 329 00:17:41,600 --> 00:17:45,040 Speaker 1: pretty big cut. One would argue that Apple perhaps could 330 00:17:45,040 --> 00:17:48,119 Speaker 1: get by with something half or less of that and 331 00:17:48,280 --> 00:17:51,760 Speaker 1: still provide a very encouraging signal to its third party 332 00:17:51,840 --> 00:17:55,240 Speaker 1: developer community and at the same time themselves grow a 333 00:17:55,359 --> 00:17:59,439 Speaker 1: very substantial business. So clearly the argument here around the 334 00:17:59,440 --> 00:18:03,520 Speaker 1: economic in terms of this business model. Certainly Apple is 335 00:18:03,560 --> 00:18:06,760 Speaker 1: in a position potentially to give more in order to 336 00:18:06,800 --> 00:18:11,399 Speaker 1: maintain a vibrant third party developer community. David, A big 337 00:18:11,560 --> 00:18:15,720 Speaker 1: part of the bull case for Apple stock is five 338 00:18:15,880 --> 00:18:20,000 Speaker 1: G and the arrival of five G presumably will spark 339 00:18:20,119 --> 00:18:23,639 Speaker 1: a super cycle in phone replacements. Of course Apple will 340 00:18:23,680 --> 00:18:26,480 Speaker 1: benefit from that. What do you expect to hear what 341 00:18:26,560 --> 00:18:29,919 Speaker 1: have we heard at this conference about five G and 342 00:18:29,960 --> 00:18:35,560 Speaker 1: what it means for Apple, Uh, nothing in particular as 343 00:18:35,600 --> 00:18:38,160 Speaker 1: of yet, but I would expect that the company should 344 00:18:38,160 --> 00:18:41,520 Speaker 1: be making some indications that will get people excited about 345 00:18:41,520 --> 00:18:44,760 Speaker 1: the upcoming launch in late September of the five G 346 00:18:44,920 --> 00:18:47,600 Speaker 1: I phone. UM, you know, certainly the five G I phone. 347 00:18:47,640 --> 00:18:50,679 Speaker 1: Apple in this regardless following other competitors as Apple as 348 00:18:50,760 --> 00:18:53,919 Speaker 1: want to do in terms of adopting new technologies, but 349 00:18:54,359 --> 00:18:57,879 Speaker 1: having an Apple product able of using five G networks 350 00:18:57,960 --> 00:19:01,080 Speaker 1: and the greater speeds in data k of abilities those 351 00:19:01,119 --> 00:19:04,879 Speaker 1: networks have, we do believe very much will prompt and 352 00:19:05,040 --> 00:19:07,959 Speaker 1: upgrade in terms of the user base for the Apple 353 00:19:08,000 --> 00:19:12,640 Speaker 1: iPhone something clearly. I think that given the scale of Apple, uh, 354 00:19:12,720 --> 00:19:14,600 Speaker 1: you know, should be an important development for them in 355 00:19:14,680 --> 00:19:17,840 Speaker 1: terms of not only their smartphone business but that of 356 00:19:17,920 --> 00:19:22,879 Speaker 1: the overall smartphone market. Tim Cook was very vocal today 357 00:19:23,000 --> 00:19:27,320 Speaker 1: about the President's decision to suspend the giving out of 358 00:19:27,440 --> 00:19:29,120 Speaker 1: H one B visas through the end of the year 359 00:19:29,280 --> 00:19:32,520 Speaker 1: new ones at least, and I'm curious, David, will this 360 00:19:32,640 --> 00:19:38,239 Speaker 1: have an immediate impact on Apple? UM. I think if 361 00:19:38,280 --> 00:19:41,560 Speaker 1: there's anything that we've learned, not specifically from Apple, but 362 00:19:41,720 --> 00:19:45,400 Speaker 1: more from dealing with the COVID nineteen pandemic is that 363 00:19:45,520 --> 00:19:48,320 Speaker 1: companies are more and more capable of operating on a 364 00:19:48,400 --> 00:19:52,080 Speaker 1: distributed basis. We don't necessarily need to have workers co 365 00:19:52,200 --> 00:19:54,919 Speaker 1: located now. It's obviously the intent of the H one 366 00:19:55,000 --> 00:19:58,600 Speaker 1: B VISA program was to be bringing workers physically into 367 00:19:58,600 --> 00:20:01,960 Speaker 1: a location here the United States in order to operate. 368 00:20:02,320 --> 00:20:04,560 Speaker 1: I don't think that, you know, not having an H 369 00:20:04,600 --> 00:20:07,440 Speaker 1: one B VISA program is going to be detrimental to 370 00:20:07,520 --> 00:20:10,520 Speaker 1: Apple in the near term. The bigger implication, I think, 371 00:20:10,560 --> 00:20:13,159 Speaker 1: not for Apple, but more for the US economy, is 372 00:20:13,200 --> 00:20:17,800 Speaker 1: that by potentially denying five thousand high paid workers UH 373 00:20:18,080 --> 00:20:22,120 Speaker 1: presence in the United States economy, the Trump administration has 374 00:20:22,160 --> 00:20:25,680 Speaker 1: deprived the US economy of the spending that those five 375 00:20:26,680 --> 00:20:29,560 Speaker 1: thousand well paid workers would bring with them. And so 376 00:20:29,680 --> 00:20:32,439 Speaker 1: from this standpoint, it seems to our view sort of 377 00:20:32,480 --> 00:20:35,639 Speaker 1: a cut the nose off, despite your face, kind of 378 00:20:35,680 --> 00:20:39,840 Speaker 1: moved by the Trump administration, not very well informed and 379 00:20:39,920 --> 00:20:44,520 Speaker 1: certainly misguided. David just got about a minute left. Is 380 00:20:44,560 --> 00:20:48,479 Speaker 1: the overhang from regulatory risk that was building for the 381 00:20:48,480 --> 00:20:51,479 Speaker 1: tech industry last year and going into this year, has 382 00:20:51,480 --> 00:20:53,080 Speaker 1: that kind of abated given all that's going on in 383 00:20:53,119 --> 00:20:57,439 Speaker 1: the world. Now. UM, I would say that, you know, 384 00:20:57,880 --> 00:21:01,160 Speaker 1: there are a matter of prior news or triage, if 385 00:21:01,160 --> 00:21:03,359 Speaker 1: you will, in terms of dealing with the things that 386 00:21:03,560 --> 00:21:08,160 Speaker 1: confronts society COVID nineteen being first and foremost. But when 387 00:21:08,200 --> 00:21:11,080 Speaker 1: things do settle down, once we get past the November election, 388 00:21:11,520 --> 00:21:14,280 Speaker 1: I certainly do expect that there will continue to be 389 00:21:14,720 --> 00:21:18,560 Speaker 1: demands for greater oversight with respect of the technology community, 390 00:21:19,000 --> 00:21:22,119 Speaker 1: focus on data privacy. Um. You know, the extent to 391 00:21:22,119 --> 00:21:24,879 Speaker 1: which media continues to be used, uh and to be 392 00:21:24,920 --> 00:21:29,639 Speaker 1: manipulated with regards to the upcoming election remains a vital concern. 393 00:21:29,760 --> 00:21:31,960 Speaker 1: So you know, there's a great deal that still remains 394 00:21:31,960 --> 00:21:34,919 Speaker 1: to be done. Jack Dorsey, the CEO of Twitter, you know, 395 00:21:35,080 --> 00:21:38,440 Speaker 1: certainly has broken ranks with others such as Zuckerberg and 396 00:21:38,520 --> 00:21:40,760 Speaker 1: saying that they would take down political content or be 397 00:21:40,760 --> 00:21:44,359 Speaker 1: more aggressive in policing this content. Um. But no, we're 398 00:21:44,359 --> 00:21:46,119 Speaker 1: not out of the woods by any stretch of the 399 00:21:46,119 --> 00:21:51,040 Speaker 1: imagination as far as greater oversight of the technology community. Hey, David, 400 00:21:51,040 --> 00:21:53,200 Speaker 1: thanks so much for joining us. As always, A good 401 00:21:53,440 --> 00:21:55,240 Speaker 1: wrap up a kind of what's going on at Apple 402 00:21:55,320 --> 00:21:58,440 Speaker 1: their event this week, as well as all things technology. 403 00:21:58,520 --> 00:22:02,359 Speaker 1: David Garretty chief mark strategist at laid Law and also 404 00:22:02,440 --> 00:22:05,359 Speaker 1: a partner at bt Block, giving us his overview of 405 00:22:05,400 --> 00:22:09,399 Speaker 1: the market. Alsy, remember when trade headlines used to quit 406 00:22:09,400 --> 00:22:12,239 Speaker 1: the markets? Exactly right. We had a little reminder of 407 00:22:12,240 --> 00:22:14,879 Speaker 1: that yesterday and into this morning when Peter Novarro, the 408 00:22:14,880 --> 00:22:17,879 Speaker 1: White House advisor, who of course has been appointed to 409 00:22:17,920 --> 00:22:22,080 Speaker 1: help the president on US trade with China, sold confusion 410 00:22:22,160 --> 00:22:24,280 Speaker 1: in a Fox interview. He said basically that the US 411 00:22:24,400 --> 00:22:27,000 Speaker 1: China trade agreement was over. Well, you might think that 412 00:22:27,000 --> 00:22:29,359 Speaker 1: that would have snuck by markets, but no, we got 413 00:22:29,560 --> 00:22:33,320 Speaker 1: a big change in markets, and US President Donald Trump 414 00:22:33,359 --> 00:22:36,760 Speaker 1: actually had to come out and clarify and say no, actually, 415 00:22:36,800 --> 00:22:39,439 Speaker 1: the deal with China is fully intact. For more on 416 00:22:39,480 --> 00:22:41,400 Speaker 1: what went on behind the scenes and what we should 417 00:22:41,440 --> 00:22:43,560 Speaker 1: expect trade wise over the next six months, let's bring 418 00:22:43,560 --> 00:22:47,800 Speaker 1: in Bloomberg Trades. Are Brendan Murray joining us from London? Brendan, 419 00:22:48,080 --> 00:22:50,320 Speaker 1: what was this all about? Was Peter Navarro trying to 420 00:22:50,920 --> 00:22:55,720 Speaker 1: sew some mischief for the Chinese? Well he sounded like uh. 421 00:22:55,760 --> 00:22:59,120 Speaker 1: In an answer to a question on a TV interview 422 00:22:59,520 --> 00:23:02,720 Speaker 1: that the that the that the that the China US 423 00:23:02,760 --> 00:23:04,960 Speaker 1: trade deal, this Phase one deal that they signed in 424 00:23:05,040 --> 00:23:08,679 Speaker 1: January was over. Uh, and so that's that obviously is 425 00:23:08,760 --> 00:23:13,080 Speaker 1: underpinning a lot of agricultural purchases and uh and other 426 00:23:13,160 --> 00:23:16,560 Speaker 1: things that you know, the Trump administration negotiated. Uh and 427 00:23:16,560 --> 00:23:19,119 Speaker 1: they you know, put the American companies under a lot 428 00:23:19,160 --> 00:23:22,400 Speaker 1: of stress with tariffs over the past few years. So 429 00:23:22,920 --> 00:23:26,280 Speaker 1: the news that or the apparent news that that that 430 00:23:26,359 --> 00:23:29,120 Speaker 1: that deal had come undone, uh, you know, was really 431 00:23:29,160 --> 00:23:33,280 Speaker 1: what's investors now. It turns out that President Trump tweeted 432 00:23:33,320 --> 00:23:35,640 Speaker 1: just a little while later that that that the deal 433 00:23:35,720 --> 00:23:39,320 Speaker 1: was still intact. That uh, you know Peter Navarro, you know, 434 00:23:39,320 --> 00:23:42,320 Speaker 1: who wrote a book called Death by China incidentally, uh, 435 00:23:42,400 --> 00:23:46,000 Speaker 1: you know, was was misunderstood. So you know, he's obviously 436 00:23:46,040 --> 00:23:48,160 Speaker 1: one of the you know, one of the most one 437 00:23:48,160 --> 00:23:51,639 Speaker 1: of the most hawkish um members of the Trump economic 438 00:23:51,680 --> 00:23:54,639 Speaker 1: team on China. So it's no surprising that you know, 439 00:23:54,760 --> 00:23:58,480 Speaker 1: he you know, he thinks that you know, the trust 440 00:23:58,520 --> 00:24:01,560 Speaker 1: has gone. But uh, yeah, it's definitely it goes to 441 00:24:01,560 --> 00:24:03,760 Speaker 1: show you that, you know, markets are you know, kind 442 00:24:03,800 --> 00:24:07,640 Speaker 1: of on edge, and and if that trade deal disintegrates, 443 00:24:07,720 --> 00:24:11,000 Speaker 1: then you know, we might see you know, even more selling. 444 00:24:11,640 --> 00:24:14,720 Speaker 1: So Brendan, what is the status of the Phase one deal. Ever, 445 00:24:14,760 --> 00:24:18,040 Speaker 1: it's some reports where maybe China's only bought maybe or 446 00:24:18,080 --> 00:24:21,240 Speaker 1: so or of what they were committed to in terms 447 00:24:21,280 --> 00:24:23,880 Speaker 1: of agricultural products and and other other products. Where are 448 00:24:23,880 --> 00:24:26,600 Speaker 1: we with phase one? So the person to listen to 449 00:24:26,680 --> 00:24:29,880 Speaker 1: on Phase one is Robert Lightheiser, the U S trade representatives, 450 00:24:30,040 --> 00:24:33,480 Speaker 1: the deal he negotiated. He you know, seems to be 451 00:24:33,560 --> 00:24:36,400 Speaker 1: the point person on at not to Barrow. So if 452 00:24:36,440 --> 00:24:40,920 Speaker 1: you if you listen to Lightheiser, he thinks that basically China, uh, 453 00:24:40,920 --> 00:24:43,800 Speaker 1: and he testified in Congress last week that China really 454 00:24:43,840 --> 00:24:48,560 Speaker 1: didn't get started buying uh, you know, the agricultural commodities 455 00:24:48,560 --> 00:24:52,200 Speaker 1: that they promised to until maybe March or April kind 456 00:24:52,200 --> 00:24:55,159 Speaker 1: of once they got through the worst of the coronavirus 457 00:24:55,760 --> 00:25:00,119 Speaker 1: outbreaks there. So he he sounds a bit sympathetic, and 458 00:25:00,359 --> 00:25:02,119 Speaker 1: you know, it's giving them the benefit of the doubt, 459 00:25:02,160 --> 00:25:05,399 Speaker 1: and you know it's and has seen some purchases in 460 00:25:05,480 --> 00:25:10,320 Speaker 1: recent weeks. Uh. You know, whether that continues is anybody's guess. 461 00:25:10,359 --> 00:25:13,639 Speaker 1: But Lightheizer, for his part, at least, you know, seems 462 00:25:13,720 --> 00:25:17,840 Speaker 1: to be still still confident that that it's gonna that 463 00:25:17,880 --> 00:25:19,520 Speaker 1: purchase are going to pick up in the second half 464 00:25:19,520 --> 00:25:21,760 Speaker 1: of the year in China will keep you know, keep 465 00:25:21,880 --> 00:25:24,080 Speaker 1: those commitments well. And there was always the question mark 466 00:25:24,119 --> 00:25:27,080 Speaker 1: over whether China could actually fulfill all the purchases that 467 00:25:27,119 --> 00:25:31,520 Speaker 1: I had promised. But separately from that, Brendan, was there 468 00:25:31,560 --> 00:25:36,680 Speaker 1: any impact on the deal from the John Bolton allegations 469 00:25:36,720 --> 00:25:40,199 Speaker 1: that the president sort of asked China too. You know, 470 00:25:40,280 --> 00:25:42,840 Speaker 1: it's not something we didn't know or didn't suspect, but 471 00:25:43,040 --> 00:25:45,760 Speaker 1: the sort of very black and white the idea that 472 00:25:45,800 --> 00:25:49,480 Speaker 1: the National Security Advisor was saying that President Trump straight 473 00:25:49,480 --> 00:25:53,240 Speaker 1: out asked China to buy agricultural goods in states where 474 00:25:53,400 --> 00:25:57,080 Speaker 1: he might be you know, on the balance between getting 475 00:25:57,080 --> 00:25:59,240 Speaker 1: reelected and not reelected. Will that have any impact on 476 00:25:59,240 --> 00:26:02,720 Speaker 1: the talks? It doesn't seem to have had an impact on, 477 00:26:03,080 --> 00:26:06,199 Speaker 1: you know, the actual deal that they signed itself. But 478 00:26:06,280 --> 00:26:10,000 Speaker 1: it just throws it just throws the whole relationship, you know, 479 00:26:10,080 --> 00:26:13,960 Speaker 1: into more into into more turmoil. And you know, if 480 00:26:13,960 --> 00:26:17,040 Speaker 1: you doubted, uh, you know, if you doubted whether there 481 00:26:17,040 --> 00:26:21,400 Speaker 1: were political motivations behind um, you know that that that 482 00:26:21,480 --> 00:26:24,520 Speaker 1: deal that Trump was pushing, you know, you might you might, 483 00:26:24,880 --> 00:26:27,880 Speaker 1: you might think twice now, but but it's it's it's 484 00:26:28,320 --> 00:26:31,320 Speaker 1: definitely added a layer of intrigue and UH and and 485 00:26:31,400 --> 00:26:34,359 Speaker 1: a lot to talk about in Washington. In Washington at 486 00:26:34,440 --> 00:26:39,360 Speaker 1: least so Brendan, you say, Robert, Robert Laheiser's is one 487 00:26:39,359 --> 00:26:41,320 Speaker 1: of the folks in Washington we should be listening to. 488 00:26:41,440 --> 00:26:43,879 Speaker 1: And he recently said in Bloomberg News was reporting that 489 00:26:44,400 --> 00:26:48,240 Speaker 1: UH tariffs, maybe even higher tariffs on medical supplies and 490 00:26:48,320 --> 00:26:50,760 Speaker 1: PPE would be a good thing. I'm just not sure 491 00:26:50,800 --> 00:26:52,879 Speaker 1: how that would be to the extent we are seeing 492 00:26:53,359 --> 00:26:56,480 Speaker 1: some spikes in cases and we may have a you know, 493 00:26:56,560 --> 00:27:00,399 Speaker 1: kind of another wave of the virus in the all. 494 00:27:00,720 --> 00:27:03,159 Speaker 1: What do you think his logic is there? Well, his 495 00:27:03,240 --> 00:27:07,320 Speaker 1: logic is that if we put tariffs on on imports, 496 00:27:07,600 --> 00:27:12,560 Speaker 1: then then producers will have an incentive to make them domestically. 497 00:27:13,000 --> 00:27:16,520 Speaker 1: So his his you know, tariffs drive you know, the 498 00:27:16,600 --> 00:27:21,439 Speaker 1: return of manufacturing jobs to to the U S in uh. Uh. 499 00:27:21,600 --> 00:27:26,040 Speaker 1: Ambassador Lightheiser's, um, you know world, And you know that's 500 00:27:26,040 --> 00:27:30,040 Speaker 1: debatable obviously, but um, you know, it's it's it's it 501 00:27:30,119 --> 00:27:33,080 Speaker 1: gives you a sense of of all that we've been 502 00:27:33,119 --> 00:27:35,600 Speaker 1: through two years of the trade war with China, three 503 00:27:35,680 --> 00:27:40,280 Speaker 1: hundred and seventy billion dollars worth of of teariffs, of 504 00:27:40,280 --> 00:27:43,280 Speaker 1: of products that have tariffs on them. You know that 505 00:27:43,320 --> 00:27:46,639 Speaker 1: he still finds UH and some problems with the you know, 506 00:27:46,720 --> 00:27:50,439 Speaker 1: the medical supplies, the personal prospective equipment coming to the 507 00:27:50,520 --> 00:27:53,439 Speaker 1: US during the during the worst of the pandemic. You 508 00:27:53,480 --> 00:27:55,960 Speaker 1: know that that tariffs still UH, you know, are the 509 00:27:56,000 --> 00:27:58,000 Speaker 1: answer for him and UM. You know it kind of 510 00:27:58,400 --> 00:28:00,000 Speaker 1: it could give you a sense to of where where 511 00:28:00,080 --> 00:28:03,320 Speaker 1: we might be headed with UH, with Europe in the 512 00:28:03,320 --> 00:28:07,960 Speaker 1: trade relationship. That's that's not getting better either, UM and UH, 513 00:28:08,160 --> 00:28:10,560 Speaker 1: and you know sets up sets us up for an 514 00:28:10,560 --> 00:28:13,600 Speaker 1: interesting second half of the year. Brendan Murray with the 515 00:28:13,680 --> 00:28:16,719 Speaker 1: understatement of the day, perhaps Brendan Murray trades are for 516 00:28:16,760 --> 00:28:20,800 Speaker 1: Bloomberg News. We always appreciate getting your perspective on trade 517 00:28:20,800 --> 00:28:22,159 Speaker 1: and his bonny. As you mentioned, it's kind of a 518 00:28:22,200 --> 00:28:24,480 Speaker 1: topic we haven't spent too much time on over the 519 00:28:24,520 --> 00:28:27,240 Speaker 1: past couple of months as we've been dealing with the pandemic. 520 00:28:27,280 --> 00:28:29,800 Speaker 1: But as you suggested earlier, Vannie, that that it is 521 00:28:29,840 --> 00:28:33,680 Speaker 1: still you know, right front and center for the markets 522 00:28:33,680 --> 00:28:37,200 Speaker 1: here because it really impacts the economic trajector duty if 523 00:28:37,200 --> 00:28:40,080 Speaker 1: not only the United States, but also our trading partners 524 00:28:40,160 --> 00:28:42,880 Speaker 1: around the world so it bears watching, and folks like 525 00:28:42,880 --> 00:28:45,720 Speaker 1: Brenda Murray help us do that. Thanks for listening to 526 00:28:45,720 --> 00:28:49,000 Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to 527 00:28:49,120 --> 00:28:52,880 Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer. 528 00:28:53,120 --> 00:28:56,160 Speaker 1: I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn. And 529 00:28:56,320 --> 00:28:59,400 Speaker 1: Paul Sweeney I'm on Twitter at pt Sweeney. Before the podcast, 530 00:28:59,440 --> 00:29:01,960 Speaker 1: you can always is catch us worldwide at Bloomberg Radio