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Speaker 3: Lingen with US Now with BMO Capital Marcus Ian on
Speaker 3: full faith and Credit. You have had a vector of
Speaker 3: lower interest rates, price up, yield down. Have you been
Speaker 3: tripped by tariffs?
Speaker 4: I do think tariffs complicate the calculus for lower rates.
Speaker 4: But I do think that the Fed is ultimately going
Speaker 4: to start the process of normalization again, but not until
Speaker 4: we've got greater clarity on what the trade war really means.
Speaker 4: And I do think tenure yields in this year at
Speaker 4: three sixty five, and I'm holding that call for now.
Speaker 3: That's extraordinary to go to a three sixty five right now,
Speaker 3: the ten year yield, Folks, if my eyes won't fail me,
Speaker 3: here's a four thirty rather four point three zero. I
Speaker 3: justin Wolfer's of Michigan, just out with the massive trade
Speaker 3: surplus of movies. If mister Trump goes after services, that's
Speaker 3: more instability.
Speaker 5: Are you able to make an.
Speaker 3: Intelligent forecast out three hours or three months.
Speaker 4: Well implicitly, because the president keeps changing the rules or
Speaker 4: changing the trade dynamics, it's very difficult to estimate what
Speaker 4: this all means for core PCE and therefore the FED
Speaker 4: and the trajectory of the economy. I think the one
Speaker 4: clear takeaway is that there has been a concern raised
Speaker 4: about the dollars status as a reserve currency and whether
Speaker 4: treasuries are still flight to quality assets. And the recent
Speaker 4: price action suggests that those two still hold for the
Speaker 4: time being. But that's going to be the major question
Speaker 4: for the next several months.
Speaker 6: Ian Tom has been drawing our attention to what's happening
Speaker 6: with Taiwan's dollar serving as much as five percent today.
Speaker 6: How do you look at what's happening in other countries
Speaker 6: with their currencies with regard to the dollar, but also
Speaker 6: to the treasury market here in the US. It does
Speaker 6: it send you a signal.
Speaker 4: So there are two aspects of that. First is what's
Speaker 4: going on with the dollar is almost by design for
Speaker 4: a president who is attempting to make US exports more
Speaker 4: attractive by cheapening them on the global stage. As that
Speaker 4: relates to the treasury market. That also makes treasuries comparatively
Speaker 4: cheaper than they might have otherwise been, but only if
Speaker 4: the dollar remains the go to currency, and that's what
Speaker 4: has been focused on this week's auctions. We have the
Speaker 4: ten year tomorrow and the thirty year on Thursday.
Speaker 6: So demand there, What do you anticipate and is it
Speaker 6: going to send you a signal about this whole idea
Speaker 6: of whether or not the US continues to be this
Speaker 6: global safe haven.
Speaker 4: The tenure will be the most important auction of the week.
Speaker 4: We're expecting reasonably solid demand across all the major bidding groups,
Speaker 4: but the market will be focused on the indirect awards.
Speaker 4: They tend to use that as a proxy for overseas demand,
Speaker 4: and that will define how the market reacts and whether
Speaker 4: or not we find ourselves back in a narrative where
Speaker 4: we're worried about the collective buyer strike on US treasures.
Speaker 3: The solution andling in for a lot of governments is
Speaker 3: to extenderation to initiate thirty year, fifty year even farther
Speaker 3: out paper. Is that efficacious? I mean, who wins with
Speaker 3: fifty year paper? Well?
Speaker 4: I don't think that it's been particularly successful at least
Speaker 4: not historically, and so the idea of pushing out the
Speaker 4: average maturity of treasuries borrowing, for example, for the time being,
Speaker 4: is off the table. The only argument that that starts
Speaker 4: to make sense would be in a significant reprice into
Speaker 4: a lower rate environment, where Bessett would choose to lock
Speaker 4: in attractive financing.
Speaker 3: Inanling and thank you so much, greatly appreciate with being
Speaker 3: my capital market this morning. In the stunning call, he
Speaker 3: reaffirms from a ten year yield price up yield down
Speaker 3: a four point three zero to a three point six
Speaker 3: five ish yield. That's a brave call right now out.
Speaker 3: They're not that many people on board that ian. Thank
Speaker 3: you so much.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 3: Specialties, Alicia Levigne would be and ymelth Wealth to get
Speaker 3: us through the market opening and beyond. Alicia, I want
Speaker 3: you to talk to people whose heads are spinning and
Speaker 3: they're in cash, how do they deploy into the markets?
Speaker 7: Well, thanks for having me today. You know, we also
Speaker 7: like to look at markers about when to deploy. We
Speaker 7: try to tell our clients you can't ever time the market,
Speaker 7: but after that nine days, which as you know you've
Speaker 7: all noted, is the best nine days since two thousand
Speaker 7: and four, I think we're going to do a little
Speaker 7: bit of backing and filling here. What we tell our
Speaker 7: clients is, you know, if you're fresh capital, it's always
Speaker 7: good to dust dollar cost average in, meaning you allocate
Speaker 7: some percentage I would say over three months, you know,
Speaker 7: one third, one third, one third, So you don't, you know,
Speaker 7: have all your assets that are that are coming in
Speaker 7: all at the same time. Because markets move around, they're
Speaker 7: two way. It just seems like a better risk adjusted
Speaker 7: way to getting into markets here, and so that's what
Speaker 7: that's what we would that's what we would advise. I
Speaker 7: think with the last four weeks has reiterated to market
Speaker 7: participants who have been in these markets for decades or
Speaker 7: to new ones, is that markets can recover a lot
Speaker 7: more quickly than the real economy, and at times bottom
Speaker 7: on really horrible news, even as the headlines are swirling
Speaker 7: around us, and I think it was just another reminder
Speaker 7: of that the last four weeks really really amazing.
Speaker 8: How the market ended April.
Speaker 3: Yeah, it is.
Speaker 6: It's like I was saying earlier, if you went to
Speaker 6: sleep at the beginning of April and you woke up
Speaker 6: kind of nothing actually happened, and it masked really the
Speaker 6: volatility that we saw. You said bottomed. So my question
Speaker 6: to you was that the bottom at least for this cycle.
Speaker 7: So for the tariff tantrum, are we're calling this the
Speaker 7: tariff tantrum? For the tariff tantrum, we think that forty
Speaker 7: eight to thirty five is likely the bottom, but with
Speaker 7: a huge caveat. And the caveat is, you know, is
Speaker 7: there a credit crisis coming that reverberates throughout the economy
Speaker 7: and then could it be undercut? But I think that
Speaker 7: ultimately the conversation that we've had, every single economist has
Speaker 7: talked about sagflation. A US recession has become the base
Speaker 7: case scenario. We've heard about empty container ships from China,
Speaker 7: We've heard about empty shelves in the US. Christmas is gone,
Speaker 7: Halloween is gone. These are some pretty nasty headlines and
Speaker 7: I don't want to make light of it, because I
Speaker 7: actually do think the US is going to slow down
Speaker 7: and hit an air pocket in the next few months.
Speaker 7: But I think the market already priced it in when
Speaker 7: it dropped almost twenty percent in about a week. And
Speaker 7: what we know when the market drops to that extent,
Speaker 7: it tends to have positive forward returns. And whether you
Speaker 7: measure by the elevated fix or whether you measure by
Speaker 7: the drop down in twenty percent, or whether you measure
Speaker 7: by rock bottom consumer and investor sentiment. And in a sense,
Speaker 7: the market did what it always done, which is, you know,
Speaker 7: it recovered when things look the bleakst and it looked
Speaker 7: the bleakest.
Speaker 3: I love your bottom fishing here the idea that when
Speaker 3: there's the catharsis there very quickly or Alesia, we've got
Speaker 3: to get to the market opening.
Speaker 5: But have you witnessed Catharsis yet? I haven't seen it.
Speaker 7: So I think we had Catharsis. You know that that
Speaker 7: Thursday and Friday after after Liberation Day, so that the
Speaker 7: third and the fourth of April was I mean that
Speaker 7: dropped was about twelve drop in the I think we
Speaker 7: had it.
Speaker 3: A Lesha. I want you to talk to people about
Speaker 3: meg seven. I got Apple with a bond offering this
Speaker 3: morning at Microsoft and other cloud types doing better than good.
Speaker 3: Was there a reinformation in April of ownership of the
Speaker 3: mag seven.
Speaker 7: So look, the conversation we've had for the last few
Speaker 7: months is that American exceptionalism is over, that the rest
Speaker 7: of the world is a better place to invest, that
Speaker 7: Europe is going to far outperform the US this year,
Speaker 7: and by the way, it might, but over a cycle
Speaker 7: we have to discuss. And I think, you know, there
Speaker 7: was a talk of you know, international investors fleeing US markets,
Speaker 7: whether it was the dollar, or the bond market or
Speaker 7: the US equity market. Now there's some truth in that,
Speaker 7: but I think what we saw from earning season was
Speaker 7: what made US markets so compelling. Are the triple beats, right,
Speaker 7: triple beats beat on the top line, beat on the margins,
Speaker 7: and therefore beat on the bottom line. I find it
Speaker 7: hard to find companies in the rest of the world
Speaker 7: that can deliver this kind of outcome quarter after quarter.
Speaker 7: Now there will be a day where this doesn't happen,
Speaker 7: and the thirty percent concentration of the Magnificent seven in
Speaker 7: the SMP is going to be the thirty percent concentration
Speaker 7: is going to be a problem, but it's not today.
Speaker 7: And I think it's just a reminder that you know,
Speaker 7: you're not buying a political situation situation, you're buying companies
Speaker 7: with earnings. And I know there's been an aversion for
Speaker 7: international investors coming into US market, but the US and
Speaker 7: market has sold US and particularly let's call it individual investors.
Speaker 7: They're all in Nope, they didn't sell and they were
Speaker 7: buying more. And I think it's a great example when
Speaker 7: you shed risk, when you shed length, when you know
Speaker 7: longs have to be discarded in favor of shorts, it's
Speaker 7: sort of a right opportunity for the pain trade to
Speaker 7: be the other way.
Speaker 3: Right, which is Alicia, Thank you so much, Alicia Levine
Speaker 3: be and win wealth this morning greatly. I appreciate that.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch US live
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Speaker 3: Hugely anticipated with the Joy of Luxury Road from Madison
Speaker 3: down to the Avenue of the Joy of Costco adapting
Speaker 3: each day to the trade war. Dana Telsey joins us
Speaker 3: this morning with a Telsey Advisory group. Will there be
Speaker 3: empty shelves?
Speaker 2: It certainly feels like it. Consumers, well, the retailers. First
Speaker 2: of all, thank you for having me. The retailers need
Speaker 2: to place their orders within the next few weeks for holiday.
Speaker 2: We're hearing retailers starting to market and advertise back to school.
Speaker 2: They're going to start on June first. Some kids aren't
Speaker 2: even out of school by June first, and yet they're
Speaker 2: going to start marketing and advertising on June first. That's
Speaker 2: because they want to have the goods available for the parents.
Speaker 2: And overall, when you think about this, we have companies
Speaker 2: that whether it's low end or high end, price increases.
Speaker 2: There's a third to third a third of what you
Speaker 2: can do to combat this. You can diversify your sourcing,
Speaker 2: but that takes time. It doesn't just happen overnight. You
Speaker 2: share the cost of the manufacturers, and I think that's
Speaker 2: something that's being negotiated almost on a daily basis, depending
Speaker 2: on what the tariff may look like. And at the
Speaker 2: end of the day, you raise prices to the consumer.
Speaker 3: You have a roll of dex like no one in
Speaker 3: the business back to your childhood and your affiliation with
Speaker 3: the good people at BERGDRF. Goodman. Which company do you
Speaker 3: want to call right now to find out the pulse
Speaker 3: of the Trump trade war?
Speaker 2: I mean overall, I want to hear about all a
Speaker 2: lot of the apparel retails and the footwear companies. The
Speaker 2: footwear companies overall have some the biggest exposure to China
Speaker 2: and to Asia. Steve Madden, you want to call Steve
Speaker 2: Madden fifty eight percent of their sourcing.
Speaker 5: Steve Madden, My walls lighter, pick it up.
Speaker 6: You mentioned empty shelves, and I think a lot of
Speaker 6: people over the past couple of weeks have been sort
Speaker 6: of sounding the alarm here about empty shelves and higher prices.
Speaker 6: Yet we haven't seen that yet will we see it?
Speaker 2: So you're exactly right. Basically, it's week by week that
Speaker 2: we're watching things. You heard all the retail real estate
Speaker 2: landlords report last week resilient consumer, good traffic. When would
Speaker 2: you see it? Probably sometime during the summertime.
Speaker 6: That's too soon. I think a lot of people would say,
Speaker 6: how close there are you watching? What's happening with shipping?
Speaker 6: Port of Los Angeles, Port of Long Beach, we heard,
Speaker 6: We've heard analysts who track the ships that are coming in.
Speaker 2: We're hearing around thirty sixty percent.
Speaker 6: Yeah, when you're down one third, two thirds, that's a
Speaker 6: very big deal. When does the consumer start to see that?
Speaker 2: So overall, everything we've heard is retail is inventory levels.
Speaker 2: They were up at the end of the fourth quarter.
Speaker 2: First quarter is still first going to be reported. You
Speaker 2: have a big day this Thursday coming up. Then we'll
Speaker 2: go from there. I think you'll continue to see inventories
Speaker 2: being up. But when you're going to see empty shelves,
Speaker 2: it's going to take a little while, is it. Some
Speaker 2: empty items in midsummer could look like that?
Speaker 3: Okay, Steve Madden shoe sho How cute, Lisa, you get
Speaker 3: that there's symbols shoe Shooh. They're down fifty seven percent
Speaker 3: from the shocking success back ten years of Steve Madden.
Speaker 3: What is Steve Madden actually doing in May?
Speaker 2: Overall? In May, and we're going to hear exactly what
Speaker 2: they're saying, because they're going to report their earnings this week.
Speaker 2: I think they have more newness in their product. I
Speaker 2: think we're going to hear that fifty eight percent is
Speaker 2: coming down hopefully by the end of the year to
Speaker 2: forty percent of sourcing coming from China or even a
Speaker 2: little bit less than that. And look what they just
Speaker 2: announced a couple months ago they bought Kurt Geiger, which
Speaker 2: is a more more fashion forward women's brand that's based overseas.
Speaker 2: Look what it was just announced a half hour ago.
Speaker 2: Sketchers is being bought for sixty three dollars a share
Speaker 2: by three G Capital. So you're seeing some combinations begin
Speaker 2: to happen, even.
Speaker 3: Sketches taking it interesting. Dan Chelsea with its encyclopedic and
Speaker 3: retail we all come all here across the country on
Speaker 3: your morning commute on YouTube. Good morning as well, Tim
Speaker 3: Stenovik in for Paul Suni.
Speaker 6: Tim, Hey, Dana, your top pick for apparelin footwear is Perkinstock.
Speaker 2: Why is that don't have sourcing in Asia? You were
Speaker 2: going to say that as the end Germany and Portugal
Speaker 2: take a look at the pricing power that they have
Speaker 2: with the newness. They don't have a lot lot of
Speaker 2: stores and from women's to men's to kids, you name it,
Speaker 2: the age group, there's appeal.
Speaker 6: Still the how big of a business is the US
Speaker 6: for them? Because they're still importing so that's going to
Speaker 6: be an issue if it's not made in the US.
Speaker 6: President Trump's not happy, right, But it's still a.
Speaker 2: Lower tariff than what yeah from Asia. It's a continuing
Speaker 2: growing business for them, and it's becoming even bigger.
Speaker 3: Okay, Hailey Biber, Hailey Bieber is Hailey Bieber Biber.
Speaker 6: I heard it's Bieber. I heard it's Bieber.
Speaker 3: Okay, Hailey showed up. Hailey Bieber invintaged Guccie at the
Speaker 3: met Gala last year.
Speaker 5: Are you going today?
Speaker 7: I'm not a you.
Speaker 2: No, I think the most fits for you to go
Speaker 2: no more.
Speaker 3: I said, we're going, and she was, She's just going
Speaker 3: to offendy for the Pope, the new Pope. But but
Speaker 3: the met Gala is definitive. Can Gucci begin to salvage
Speaker 3: their brand at the Met Gala?
Speaker 2: Very hard. I think you could more likely see life
Speaker 2: at Gap at the Met Gala rather than Gucci, given
Speaker 2: what you have in the storage right now.
Speaker 3: Discuss within all your heritage here, Discuss the collapse of
Speaker 3: what everybody had to have five years ago.
Speaker 2: Compared to five years ago when Gucci was the biggest
Speaker 2: thing was mixed match patterns and prints. That was all
Speaker 2: the rage at Gucci. Now it is who is Gucci?
Speaker 2: Is it relevant anymore? Where's the newness? Who's taken the place?
Speaker 2: And where there's increases Memeu from Prada, that's where all
Speaker 2: the increases are coming from. And that's where you've seen, you've.
Speaker 3: Been, we've seen a collapse ever like carrying Gucci.
Speaker 2: You know we've seen collapses before. You look at Burbery,
Speaker 2: Burbery went way by the wayside, Look at Ferragamo which
Speaker 2: still hasn't come back, and there's a lot of work
Speaker 2: to be done. So we've seen things. And one of
Speaker 2: the things with luxury brands, you have iconic items that
Speaker 2: have heritage and authenticity. It's easier to reinvent than create
Speaker 2: on a tee?
Speaker 9: Can they be.
Speaker 5: Reinvented under lvmh is mister Arnauld chopped?
Speaker 3: It's a bit to take out Gucci or something.
Speaker 2: I'm not hearing that I'm hearing Bernard Arnault is focused
Speaker 2: on La Loouis Vauton brand and the Christian.
Speaker 5: Now, I mean, come on, Tiffany's a struggle.
Speaker 2: Tiffany's has done a great job. The Louis Vauton brand
Speaker 2: and the Christian Dura brand are what the works are
Speaker 2: in progress. Look at all the designer changes that you've
Speaker 2: had at LVMH. A designer needs to get the feel
Speaker 2: of the brand and then introduce the newness.
Speaker 6: So who's your top pic for luxury right now?
Speaker 2: On the luxury side, I think Tapestry. I think Coach
Speaker 2: is continuing to take share from Michael Cores and they'll
Speaker 2: report this Thursday, Okay.
Speaker 6: So we'll get more details then. I'm thinking about this
Speaker 6: in the context of the I don't know, bigger stuff
Speaker 6: that we see each and every day. So not the
Speaker 6: Louis Vauton's not the LVMH's what we see at the
Speaker 6: grocery store, the expensive eggs that Tom Keene is still
Speaker 6: talking about, right, how are you seeing those prices moderate
Speaker 6: come down or not come down?
Speaker 2: So Primark Primark, which is the value retail, they have
Speaker 2: nearly thirty stores in the US. They're from the UK.
Speaker 2: They reported their numbers last week and they said, with
Speaker 2: the tariffs in the US now and their prices are
Speaker 2: below ten dollars for the most part. They said, going forward,
Speaker 2: and what it looks like if these tariffs at one
Speaker 2: hundred and forty five percent really are the name of
Speaker 2: the game, your prices will be up forty to fifty percent.
Speaker 2: That's significant for the low income consumer.
Speaker 3: Steve Madden creators you brought up, Thank you so much,
Speaker 3: Dana Telsey. TJX, which you and I can agree, are
Speaker 3: the best execution out there. What's the pixie dust at TJX?
Speaker 3: The curing and Steve Madden and Costco Egg department have
Speaker 3: to learn.
Speaker 2: Keep in mind TJX is very different from the others.
Speaker 2: The others are brand designers and creators that have their
Speaker 2: own branded product. TJX has an assortment of branded product
Speaker 2: for the most part, but they make their own Also,
Speaker 2: they're buying a lot of it for discounts or less
Speaker 2: than what the full price is. That's what's so exciting
Speaker 2: about tj It's a treasure hunt.
Speaker 3: Talk about what you were readingow as a child at
Speaker 3: fifty seventh and fifth Avenue. Scarcity. Scarcity is still out
Speaker 3: there like a target, is there? Scarcity?
Speaker 2: You have limited edition and collaborations that are scarcity. Look
Speaker 2: what Alto just announced for seven tours. They're going to
Speaker 2: be the beauty destination for Beyonce for Beyonce's Cowboy Carter Tour.
Speaker 2: That's interesting. That's what scarcity is doing in order to
Speaker 2: drive newness and innovation at mass price levels.
Speaker 6: I've seen some pictures of concerts not fully attended. Can
Speaker 6: you believe I'm saying that a Beyonce concert that's not
Speaker 6: sold out that's surprising?
Speaker 5: Is that an issue?
Speaker 4: Right?
Speaker 2: I've not heard that's an issue. It's just starting now
Speaker 2: for them. It's seven concerts that they'll be involved with.
Speaker 5: One more question, Dana, single best buy right now.
Speaker 2: Single best buy right now. I like Birkenstock. I think
Speaker 2: with Joe Feldman, he's talking about Costco's.
Speaker 3: Okay, what's it come on? This is I know you
Speaker 3: listen every day at Lisa's got Costco on the brain.
Speaker 3: Everyone process that others have to replicate.
Speaker 2: Their private label is quality, their assortment and pricing is competitive.
Speaker 2: They can they can solve a vost business and also
Speaker 2: offer for home, and their prices and the service levels,
Speaker 2: the in stock levels are differentiated versus everyone else. They've
Speaker 2: got quality and value.
Speaker 3: Dana TELCEA, thank you so much, Chelsea Advisory Group. The
Speaker 3: spirit of New York City. I really can't say enough
Speaker 3: about the vibrancy, even in these troubling times.
Speaker 6: What's your birkinstock of choices at the Arizona.
Speaker 3: At the Boston Birkenstocks. There's a few floating around the house.
Speaker 3: I try to give them to the dogs to chew.
Speaker 3: I hear that I don't. I don't. I do the
Speaker 3: clause Dana Telsea, goodbye.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 3: It's now a huge value at first always Henrietta Treys
Speaker 3: the Veda Partners and you're Washington, Henriette. I look at
Speaker 3: my phone from a distance at home, It'll be three
Speaker 3: feet away, seven feet away. I don't want to pick
Speaker 3: it up and look at the news flows. So I
Speaker 3: look at the Hill just as an example of a
Speaker 3: Washington internet site that's putting out all the gossip and
Speaker 3: it's just a cacophony of stories. Is that the way
Speaker 3: you feel about Washington right now?
Speaker 9: It's a constant day louge. You're just drinking from a
Speaker 9: fire hose. It's a lot, for sure. The latest stuff
Speaker 9: that y'all are just talking about with Barbie's is just
Speaker 9: the least of it.
Speaker 8: It's all over the place and all over the map.
Speaker 3: If it's all over the map, if I use the
Speaker 3: word the negotiation or deals, do you see any evidence
Speaker 3: there are negotiations or deals or is it just all blather?
Speaker 9: Yeah, So this is a great point. And really the
Speaker 9: question I have is are you talking about trade deals?
Speaker 9: Are you talking about the tax deals? Because they are
Speaker 9: both incredibly fraught, very far from conclusion, and much less
Speaker 9: than the White House is presenting them as.
Speaker 4: So.
Speaker 9: On the trade front, I'm expecting the earliest we get
Speaker 9: deals in the next couple of weeks to be with
Speaker 9: the trio of countries that combined make up less than
Speaker 9: one percent of our trade and goods deficit, the Dominican Republic,
Speaker 9: Peru and Colombia.
Speaker 8: That's not going to move the needle.
Speaker 9: That's not going to bring shipping in from China or
Speaker 9: Vietnam or any other Asian nations, which.
Speaker 8: Is really what we need.
Speaker 9: And then on the tax front, we are facing the
Speaker 9: real crunch time and the House is about to walk
Speaker 9: the plank on one and a half trillion dollars worth
Speaker 9: of spending cuts on things that are extremely popular like medicaid,
Speaker 9: food subsidies for the poor, and the corporate tax rate
Speaker 9: and individual tax rates that.
Speaker 8: Ultimately the Senate will not tick up and will not
Speaker 8: vote on.
Speaker 9: So it's really going to be a question of what issue,
Speaker 9: what trade deals, what negotiations on the tax front are
Speaker 9: you watching?
Speaker 6: Well, let's start with the tax front before we get
Speaker 6: to the trade front, rather before we get to the
Speaker 6: tax front. If indeed what we hear this in the
Speaker 6: coming weeks are deals that only represent such a small
Speaker 6: portion of the trade that we do. Can we still
Speaker 6: look to the details of those deals to understand what
Speaker 6: those bigger trade deals could potentially look like. Will it
Speaker 6: be meaningful, will.
Speaker 9: It move Well, so far it's really just around these
Speaker 9: countries making good on the trade and goods deficits. So
Speaker 9: what that means is LNG exports, soy exports, and other
Speaker 9: agricultural commodities. But it doesn't get to any of the
Speaker 9: core issues that presumably President Trump really had a problem
Speaker 9: with on the campaign trails sufficiently or substantially enough to
Speaker 9: launch trade wars with every single nation on Earth.
Speaker 8: They're just not moving in that direction.
Speaker 9: And if they do those trade deals will take years
Speaker 9: months to negotiate, just like they did in his first term,
Speaker 9: So any kind of deal of magnitude is months away.
Speaker 9: South Korea is the one that I think Howard Lutnik
Speaker 9: is referencing when he says a deal could be reached soon,
Speaker 9: referencing last week.
Speaker 8: They don't even have an administration, they don't have a president.
Speaker 9: So negotiating and reaching a deal with South Korea, which
Speaker 9: by the way, we already have a free trade agreement
Speaker 9: with and ninety five percent of the goods coming in
Speaker 9: are tireff at zero percent rates is not going to
Speaker 9: move the needle. And then I think compounding all these
Speaker 9: issues is the very real reality that now we have
Speaker 9: twenty five percent tariffs on automobiles and parts. I don't
Speaker 9: know about you, but I got to go and get
Speaker 9: a new engine and four tires. I might not need
Speaker 9: twenty dollars, but last time I checked, I do require
Speaker 9: four tires on my car. So that's going to all
Speaker 9: be more expensive when I go on Wednesday to get
Speaker 9: that done.
Speaker 6: Exemptions, tariff exemptions, You've got to know that sort of
Speaker 6: go fund me there is you always do you you
Speaker 6: don't always you know, Look we're not driving.
Speaker 3: We're not driving much.
Speaker 6: Do you always need to get four new tires?
Speaker 3: Yes, that's the way, Well, that's the way it works.
Speaker 3: That's a weird little man, is correct.
Speaker 6: You can't Okay, continue, Henrietta, you've got a new note
Speaker 6: oubt It says it's beginning to look a lot like COVID.
Speaker 6: In the context of these tariff exemptions industries you mentioned
Speaker 6: toy importers, retailers, big box retailers. How are you looking
Speaker 6: at the interest groups in Washington? What's been happening, who's
Speaker 6: had the president's ear?
Speaker 9: So interest groups are fanned out across the hill trying
Speaker 9: to talk to any member that they can, when really
Speaker 9: they need to get into the White House. And this
Speaker 9: has been a pervasive problem for House and Senate members.
Speaker 8: All year as they've been preparing for the presidents.
Speaker 9: So they go members and constituents will go to their
Speaker 9: local representative or their senator if they're able to get
Speaker 9: a meeting, and then that senator has no recourse. There
Speaker 9: are not sufficient staffers at USTR or Commerce or Treasury,
Speaker 9: let alone an exclusions process.
Speaker 8: So what that is actually done?
Speaker 9: And now that we're into the tariff for and there
Speaker 9: are tariffs on every nation at a minimum of ten
Speaker 9: percent and a whole host of different product lines at.
Speaker 8: Usually twenty five percent rates.
Speaker 9: Is that those entities, those businesses, toymakers, footwear retailers, shippers, truckers, retailers,
Speaker 9: they are now moving away from asking for an exclusion
Speaker 9: because it's too late for that to now a bail out.
Speaker 9: So one thing I would encourage folks to watch is
Speaker 9: the upcoming tax build from Ways and Means. One of
Speaker 9: the biggest revenue raisers that they have in there at
Speaker 9: seventy billion dollars is an elimination of the employee retention
Speaker 9: tax credit. Y'all remember that from COVID when everybody was
Speaker 9: firing everybody, and we started paying businesses to keep people
Speaker 9: on their payroll to stop the damage as we saw
Speaker 9: a vaccine. Now Here, the employee retention tax credit is
Speaker 9: slated for complete removal and pulling it.
Speaker 8: Out of the system if it's maintained. That's your first
Speaker 8: indication of a bailout.
Speaker 5: Henrietta, I need you up in New York. I hope
Speaker 5: you have real ID for May seventh.
Speaker 3: Next time we have entered a trace and we're going
Speaker 3: to talk about this real ID disaster. We're in Henrietta
Speaker 3: trace Veda Partners.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 3: Today, Lisa Manteo, what do you go? We do?
Speaker 10: Okay, So we've been talking about President trumpright wanting to
Speaker 10: impose that one hundred percent tariffs on films produced overseas.
Speaker 10: So screen Time Lukashaw has a really good look into
Speaker 10: how it's going to impact Hollywood.
Speaker 2: So he has a few things.
Speaker 10: He says, there's few details. That's one of the issues.
Speaker 10: It's not clear if the president wants to tax movies
Speaker 10: that are shot overseas finished in the US, because that's
Speaker 10: a whole different story, or if he plans a tax.
Speaker 10: TV show has made overseas for international audiences but available
Speaker 10: in the US, and that's huge for Netflix companies like Netflix.
Speaker 10: So he says a lot of producers and executives they
Speaker 10: just want to shoot more in the US, but it's
Speaker 10: a little bit more expensive.
Speaker 2: So that's the whole point.
Speaker 10: You talk Tom about John Boyd going to mar A
Speaker 10: Lago and talking about different federal incentives. But he goes
Speaker 10: into how the entertainment industry still exports three times as
Speaker 10: much as it imports, so Hollywood is really making a
Speaker 10: lot of money exporting its product all over the world.
Speaker 10: So he kind of breaks it down in that way.
Speaker 3: I thought that note was great. Lucas put it out
Speaker 3: late late last night with this uproar, and like you say,
Speaker 3: it's a surplus business. This is like the least of
Speaker 3: our headaches, and yet that's what we're worried about. Yeah,
Speaker 3: and I get autos is a headache.
Speaker 5: I get that, but movies at the end of the
Speaker 5: day really isn't.
Speaker 10: Yeah, and you have streaming like Netflix or Disney Amazon.
Speaker 10: They produce shows for global audiences dozens of markets, so
Speaker 10: it's it's a big deal for falsesimalss.
Speaker 5: Streaming makes money. I still don't get it.
Speaker 6: If your Netflix it makes money. Yeah, Yeah, I just
Speaker 6: don't get I think the lawyers are going to be
Speaker 6: busy with this one.
Speaker 3: They're a little busy right now. Yes, So leaves with
Speaker 3: that court case over the weekend too.
Speaker 5: On the law firms least, So what are you got next?
Speaker 10: So this is an interesting one from the Wall Street
Speaker 10: Journal talking about how corporate America is leaving more jobs unfulfilled.
Speaker 10: They're not laying off of workers, but the trade war
Speaker 10: has them just pausing hiring. So they're saying it's this
Speaker 10: new approach you hire less or not at all. So
Speaker 10: they can point out companies like Jet Blue, t rowe Price.
Speaker 10: They say jobs advertise on indeed down one person in
Speaker 10: the past two weeks, so they're showing how people are
Speaker 10: hiring lit. But me, while you had the report on
Speaker 10: Friday that was a surprisingly strong number.
Speaker 3: It was strong, but it was at the same time
Speaker 3: with revisions. It was done for like one hundred and
Speaker 3: nineteen thousand and again. You know, we'll see that.
Speaker 5: I said this tim six weeks ago.
Speaker 3: I said may seconds important, but June seventh or June
Speaker 3: sixth is the next jobs report. To me, it has
Speaker 3: way way more important.
Speaker 6: Yeah, you got also wonder how the Fed is looking
Speaker 6: at things this week. Set to start their meeting tomorrow.
Speaker 6: We'll hear from Jay Powell on Wednesday. Any labor market
Speaker 6: commentary obviously will be closely watched.
Speaker 3: I think his goals to get through it in that
Speaker 3: one piece.
Speaker 10: Give us one more least, all right, So we're talking
Speaker 10: about AI and how could replace certain jobs. This was
Speaker 10: an interesting one from the Financial Times. It says an
Speaker 10: AI law firm in Europe could be replacing some real
Speaker 10: life lawyers. So it's a company called Garfield AI. They
Speaker 10: recently got approval. They were founded by this former London
Speaker 10: litigator quantum physicist. And what they do is there mainly
Speaker 10: for small claims courts, but they do it for people
Speaker 10: on the cheap. So they create like a quote polite
Speaker 10: chaser letter for just over two dollars, filing documents for
Speaker 10: claims for just over sixty five dollars and this is
Speaker 10: all AI. The founder says he will review things to
Speaker 10: make sure that everything is complete and is in check.
Speaker 10: But it just points at this different trend of how
Speaker 10: AI can step into different sectors like law, finance, different
Speaker 10: area they going to replace us.
Speaker 3: I don't think so.
Speaker 6: It impossible, Tom, There is no replacement.
Speaker 2: There is no replace, There is no the personality.
Speaker 3: Thank you, have you used any of this stuff? Guys?
Speaker 3: How do you give you? Yeah? Take quite a bit.
Speaker 3: Wisenthal really did a survey of it, like he lose
Speaker 3: like four or five, six of them. And I've heard
Speaker 3: Jenini is getting a buzz YEP with Google YEP, but
Speaker 3: I haven't used I mean, I use them in the search,
Speaker 3: and I've said I'm stumbling into it.
Speaker 6: It's finally you can finally ask questions and get answers
Speaker 6: like what search? What online search was supposed to be?
Speaker 5: Okay for the newspapers today, Lisa Mateo, thank you so much.
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