1 00:00:02,520 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:08,880 --> 00:00:13,240 Speaker 2: This is Bloomberg business Week Daily reporting from the magazine 3 00:00:13,240 --> 00:00:17,840 Speaker 2: that helps global leaders stay ahead with insight on the people, companies, 4 00:00:17,880 --> 00:00:22,760 Speaker 2: and trends shaping today's complex economy. Plus global business, finance 5 00:00:22,800 --> 00:00:26,120 Speaker 2: and tech news as it happens. The Bloomberg Business Week 6 00:00:26,239 --> 00:00:31,720 Speaker 2: Daily Podcast with Carol Masser and Tim Stenebek on Bloomberg Radio. 7 00:00:32,280 --> 00:00:34,360 Speaker 3: A rally is one way to put it. Maybe Vince 8 00:00:34,400 --> 00:00:36,560 Speaker 3: Signerello would call it a rip your face off rally. 9 00:00:36,560 --> 00:00:40,120 Speaker 3: The Nasdaq can posit higher by ten point nine percent, 10 00:00:40,159 --> 00:00:41,600 Speaker 3: the S and P five hundred up by eight and 11 00:00:41,640 --> 00:00:44,000 Speaker 3: a half percent, the dowd Jones Industrial average up by 12 00:00:44,040 --> 00:00:46,600 Speaker 3: seven point four percent. I do want to bring in 13 00:00:46,680 --> 00:00:49,479 Speaker 3: Vince Signerello. He's Bloomberg News macro strategist. He joins us 14 00:00:49,479 --> 00:00:52,519 Speaker 3: this afternoon from White Plains. How do you describe the 15 00:00:52,560 --> 00:00:53,880 Speaker 3: market action the tape today? 16 00:00:55,320 --> 00:00:58,200 Speaker 4: I've ripping your face off a really, really good way 17 00:00:58,240 --> 00:01:00,959 Speaker 4: to put it. Put it, Tim, I mean, this is 18 00:01:02,240 --> 00:01:04,560 Speaker 4: you know, I've often get asked by traders, what was 19 00:01:04,560 --> 00:01:06,679 Speaker 4: it like trading in the eighties? And this is about 20 00:01:06,720 --> 00:01:09,679 Speaker 4: as close as I've seen it in a very very 21 00:01:09,760 --> 00:01:10,479 Speaker 4: very long time. 22 00:01:10,800 --> 00:01:14,320 Speaker 5: So for those who weren't around in the eighties, we 23 00:01:14,319 --> 00:01:17,080 Speaker 5: were what does that mean? 24 00:01:18,120 --> 00:01:21,800 Speaker 4: The volatility was fantastic. I mean you you know, you 25 00:01:21,840 --> 00:01:24,560 Speaker 4: have to remember this is pre euro so you had 26 00:01:24,680 --> 00:01:29,080 Speaker 4: well every country had their own currency, and there were 27 00:01:29,160 --> 00:01:32,200 Speaker 4: days where you could see the German mark move ten 28 00:01:32,240 --> 00:01:35,840 Speaker 4: big figures up, ten big figures down, then five or 29 00:01:35,880 --> 00:01:38,280 Speaker 4: six up again, back and forth, like I mean, you 30 00:01:38,280 --> 00:01:41,640 Speaker 4: could see a thirty big figure day in one day, 31 00:01:41,680 --> 00:01:44,280 Speaker 4: back and forth. I was trading cable during the eighties 32 00:01:44,280 --> 00:01:47,960 Speaker 4: after Maggie announced her reelection and Sterley went from this 33 00:01:48,200 --> 00:01:52,040 Speaker 4: very sleepy currency to moving three, four, five big figures 34 00:01:52,040 --> 00:01:55,080 Speaker 4: in a day. And to put that in perspective, just 35 00:01:55,120 --> 00:01:58,000 Speaker 4: a one million pound position on five big figures is 36 00:01:58,000 --> 00:02:01,640 Speaker 4: a fifty thousand dollar chain and l so when you're 37 00:02:01,680 --> 00:02:05,160 Speaker 4: trading fifty to one hundred million pounds, you can imagine 38 00:02:05,160 --> 00:02:06,600 Speaker 4: that if you get that wrong, you could give a 39 00:02:06,600 --> 00:02:10,040 Speaker 4: bank away in a heartbeat. So you know, we haven't 40 00:02:10,080 --> 00:02:15,600 Speaker 4: seen anything like that until literally this week, and I'm tired. 41 00:02:16,520 --> 00:02:18,600 Speaker 3: Well it's only Wednesday, Vince. You got a couple more 42 00:02:18,680 --> 00:02:22,400 Speaker 3: days to go here, hey, Gina Martin Adams said, a 43 00:02:22,400 --> 00:02:24,400 Speaker 3: move such as this concerns her, whether it's to the 44 00:02:24,520 --> 00:02:26,840 Speaker 3: upside or whether it is to the downside. This doesn't 45 00:02:26,880 --> 00:02:28,959 Speaker 3: make her any less concerned about the direction of the 46 00:02:29,040 --> 00:02:31,600 Speaker 3: US economy, about what earnings we're going to get as 47 00:02:31,639 --> 00:02:34,440 Speaker 3: companies start to report. We heard from Delta earlier today, 48 00:02:34,440 --> 00:02:37,760 Speaker 3: the company suspending its guidance for the year as a 49 00:02:37,800 --> 00:02:41,120 Speaker 3: result of concerns over tariffs in the economy. We're going 50 00:02:41,160 --> 00:02:44,320 Speaker 3: to hear from JP Morgan on Friday, among other banks. 51 00:02:44,880 --> 00:02:46,720 Speaker 3: Are you concerned about a move higher like this? 52 00:02:47,800 --> 00:02:47,880 Speaker 6: No? 53 00:02:48,040 --> 00:02:52,760 Speaker 4: I And I'm sure what Gina was referring to whose 54 00:02:52,760 --> 00:02:56,200 Speaker 4: analysis is brilliant by the way that the difference between 55 00:02:56,240 --> 00:02:57,920 Speaker 4: Main Street and Wall Street. I mean, this is just 56 00:02:57,960 --> 00:03:01,480 Speaker 4: Wall Street. Main Street is it needs to react in 57 00:03:01,480 --> 00:03:04,000 Speaker 4: a completely different way to this, what the tariffs really 58 00:03:04,000 --> 00:03:06,200 Speaker 4: mean to them, what it's going to mean for earnings. 59 00:03:07,040 --> 00:03:09,280 Speaker 4: Move down or move up in the stock market doesn't 60 00:03:09,320 --> 00:03:12,480 Speaker 4: necessarily change the scope of what it does. If you're 61 00:03:12,560 --> 00:03:15,520 Speaker 4: the CEO or CFL of a company trying to source 62 00:03:15,560 --> 00:03:19,640 Speaker 4: trade and look at what your cost price analysis is 63 00:03:19,639 --> 00:03:22,800 Speaker 4: going to be going forward, and again, obviously earnings are 64 00:03:22,840 --> 00:03:26,280 Speaker 4: a big picture. I think it's going to be interesting 65 00:03:26,360 --> 00:03:29,200 Speaker 4: is to see what sentiment indicators look like on Friday, 66 00:03:29,240 --> 00:03:32,200 Speaker 4: and of course we've got inflation in terms of CPI 67 00:03:32,280 --> 00:03:34,640 Speaker 4: PPI coming up in the next couple of days as well. 68 00:03:35,840 --> 00:03:38,760 Speaker 4: I wouldn't worry so much about the stock market. This 69 00:03:38,920 --> 00:03:42,320 Speaker 4: is just a lot of you know, a lot of 70 00:03:42,320 --> 00:03:45,560 Speaker 4: back and forth on headlines. It is completely separate from 71 00:03:45,600 --> 00:03:49,440 Speaker 4: what the real economy is going to be doing. I 72 00:03:49,480 --> 00:03:53,120 Speaker 4: was encouraged though by Besson's comment earlier this morning where 73 00:03:53,120 --> 00:03:55,800 Speaker 4: he said he was going to take sort of front 74 00:03:55,800 --> 00:03:58,400 Speaker 4: and center of the trade negotiations, and that seemed to 75 00:03:58,400 --> 00:04:01,280 Speaker 4: put both Naviro and but Nick on the backbench, which 76 00:04:01,400 --> 00:04:03,400 Speaker 4: I think that was the real encouragement I think for 77 00:04:03,480 --> 00:04:06,680 Speaker 4: investors in that sort of the sound mind, the sound 78 00:04:08,800 --> 00:04:12,840 Speaker 4: voice coming from Washington is going to speak. And then 79 00:04:12,920 --> 00:04:15,200 Speaker 4: later today basically saying he was going to try to 80 00:04:15,200 --> 00:04:18,120 Speaker 4: get an alliance together if you will try to make 81 00:04:18,160 --> 00:04:22,120 Speaker 4: individual trade agreements with all different allies and then form 82 00:04:22,160 --> 00:04:25,240 Speaker 4: a consortium of sorts against China, which really would put 83 00:04:25,320 --> 00:04:27,320 Speaker 4: China in a box if you were able to do that, 84 00:04:28,120 --> 00:04:30,880 Speaker 4: because that would be a really really strong negotiating power. 85 00:04:30,920 --> 00:04:33,680 Speaker 4: You're not just talking about sort of NATO or Canada 86 00:04:33,720 --> 00:04:36,599 Speaker 4: and Mexico you're talking about Latin America, you're talking about Japan, 87 00:04:36,960 --> 00:04:41,279 Speaker 4: talking about Asia, Europe a whole lot. Now facing China 88 00:04:41,320 --> 00:04:44,359 Speaker 4: and saying this is where we stand. We're tired of, 89 00:04:44,600 --> 00:04:47,719 Speaker 4: you know, patent infringement, We're tired of the non monetary 90 00:04:47,760 --> 00:04:50,760 Speaker 4: tariff situation. We're standing up to you. Now, what are 91 00:04:50,760 --> 00:04:53,599 Speaker 4: you going to do? And if you don't capitulate, we're 92 00:04:53,640 --> 00:04:55,359 Speaker 4: all just going to play nice with each other. And 93 00:04:55,400 --> 00:04:57,839 Speaker 4: that's going to put China, I think in an extraordinarily 94 00:04:57,839 --> 00:05:00,560 Speaker 4: difficult situation. I know what ended was saying about, it's 95 00:05:00,560 --> 00:05:02,680 Speaker 4: not an all one way street, but I think I 96 00:05:02,720 --> 00:05:05,400 Speaker 4: think in this particular trade war, if Beuston pulls off 97 00:05:05,400 --> 00:05:07,480 Speaker 4: what he's trying to do, it puts China in an 98 00:05:07,480 --> 00:05:10,159 Speaker 4: incredibly difficult situation and one they can't win. 99 00:05:10,640 --> 00:05:13,640 Speaker 5: You know, yeah, exactly. And I keep thinking of the 100 00:05:13,680 --> 00:05:18,800 Speaker 5: interview that Shanelli had with Boas Weinstein and the whole 101 00:05:18,800 --> 00:05:22,599 Speaker 5: idea of the one thing that's difficult is that President 102 00:05:22,640 --> 00:05:25,680 Speaker 5: Trump presumably will be in the White House for four 103 00:05:25,760 --> 00:05:28,880 Speaker 5: years in total, and that the uncertainty genie is out 104 00:05:28,920 --> 00:05:31,760 Speaker 5: of the bottle and we have seen that this is 105 00:05:31,800 --> 00:05:34,040 Speaker 5: a president and I think it's fair to say this 106 00:05:34,120 --> 00:05:37,720 Speaker 5: is truthful, is that he can change his mind on 107 00:05:37,839 --> 00:05:42,280 Speaker 5: things and that level of uncertainty and it's ramped up 108 00:05:42,480 --> 00:05:44,880 Speaker 5: more than maybe we saw in the first administration, and 109 00:05:45,120 --> 00:05:47,400 Speaker 5: there are not the guardrails necessarily. I know you talk 110 00:05:47,440 --> 00:05:50,200 Speaker 5: about the Treasury Secretary, but it's taken a while I 111 00:05:50,240 --> 00:05:53,520 Speaker 5: feel like for maybe a potential guardrail to come forward. 112 00:05:53,839 --> 00:05:58,040 Speaker 5: So I just wonder, you know, Vince, traders like volatility, 113 00:05:58,120 --> 00:06:01,680 Speaker 5: but CEOs don't, right, and can consumers don't. They need 114 00:06:01,720 --> 00:06:04,960 Speaker 5: things to be certain at this point to make decisions 115 00:06:05,000 --> 00:06:08,159 Speaker 5: and to spend money. So I am just curious that 116 00:06:08,520 --> 00:06:11,839 Speaker 5: this trade we could see another sell off tomorrow. I mean, 117 00:06:12,200 --> 00:06:14,080 Speaker 5: are there any guarantees at this point? 118 00:06:14,839 --> 00:06:17,400 Speaker 4: No, I don't think there are any guarantees whatsoever. And 119 00:06:17,480 --> 00:06:20,480 Speaker 4: I think you make a really really good point. Corporation 120 00:06:20,680 --> 00:06:24,400 Speaker 4: ceo CFOs do not like this. Consumers certainly don't like this. 121 00:06:25,440 --> 00:06:28,320 Speaker 4: I think what you're going to see is probably a 122 00:06:28,320 --> 00:06:32,920 Speaker 4: little pulled back in investment, particularly capex from corporations, particularly 123 00:06:33,000 --> 00:06:35,400 Speaker 4: the larger corporations. You're going to see mid sized small 124 00:06:35,440 --> 00:06:38,839 Speaker 4: businesses be very very cautious about how they spend money. 125 00:06:39,400 --> 00:06:41,440 Speaker 4: One of the big things that you know, I ran 126 00:06:41,480 --> 00:06:43,360 Speaker 4: a small business, and one of the key things about 127 00:06:43,400 --> 00:06:45,880 Speaker 4: running a small business is cash flow. And the last 128 00:06:45,960 --> 00:06:48,680 Speaker 4: thing you want to do is put yourself in a situation. 129 00:06:49,040 --> 00:06:51,320 Speaker 4: You know, it's a difficult situation. You want to spend 130 00:06:51,360 --> 00:06:55,080 Speaker 4: money on inventory anticipating you know, price increases, but at 131 00:06:55,120 --> 00:06:57,360 Speaker 4: the same time you need to preserve cash flow because 132 00:06:57,520 --> 00:06:59,719 Speaker 4: you could buy all this inventory and then nobody comes 133 00:06:59,720 --> 00:07:02,480 Speaker 4: into by it from you, correct just they're worried about 134 00:07:02,600 --> 00:07:05,919 Speaker 4: the future. And so now you're stuck with shelves that 135 00:07:05,960 --> 00:07:09,920 Speaker 4: are full of lower price items, but still nobody wants them. So, 136 00:07:10,320 --> 00:07:12,559 Speaker 4: you know, for a smaller business, it's a really really 137 00:07:12,560 --> 00:07:15,320 Speaker 4: tough situation. You know, for mid sized businesses as well. 138 00:07:15,400 --> 00:07:17,880 Speaker 4: You know, the big, big companies, you know, Pepsicos of 139 00:07:17,920 --> 00:07:20,240 Speaker 4: the World and such. You know, they can withstand this 140 00:07:20,320 --> 00:07:22,040 Speaker 4: for a while, Apples of the world. They've got the 141 00:07:22,080 --> 00:07:26,080 Speaker 4: balance sheet to to eat that inventory for quite a 142 00:07:26,080 --> 00:07:29,560 Speaker 4: long time. But other businesses do not, and that is 143 00:07:29,880 --> 00:07:34,000 Speaker 4: probably going to weigh on both sentiment spending and the economy. 144 00:07:34,120 --> 00:07:36,880 Speaker 4: We're still looking at We're still looking at first quarter 145 00:07:36,960 --> 00:07:39,880 Speaker 4: growth pen from the Atlanta GDP at minus two point 146 00:07:39,920 --> 00:07:40,720 Speaker 4: four percent. 147 00:07:40,760 --> 00:07:42,760 Speaker 5: Right down, but not as bad as it was, but 148 00:07:42,800 --> 00:07:43,400 Speaker 5: still down. 149 00:07:43,920 --> 00:07:45,440 Speaker 4: It does have it from two point eight to two 150 00:07:45,480 --> 00:07:47,040 Speaker 4: point FOURY, you're absolutely right, but we did. 151 00:07:47,160 --> 00:07:49,600 Speaker 5: We just have a headline crossing Goldman Sachs rescinding its 152 00:07:49,640 --> 00:07:54,120 Speaker 5: recession call after this move by the President on tariffs. 153 00:07:54,160 --> 00:07:56,080 Speaker 5: I feel like it's like bing bing bing, you know, 154 00:07:56,200 --> 00:07:59,320 Speaker 5: ricochet rabbit, Like you are just seeing people who just 155 00:07:59,440 --> 00:08:03,320 Speaker 5: see I know who that is, Google it everybody, No, 156 00:08:03,440 --> 00:08:07,360 Speaker 5: but it's just right, like, so that's that's the world 157 00:08:07,560 --> 00:08:11,640 Speaker 5: we live in, right, and so that's a difficult environment. 158 00:08:12,600 --> 00:08:15,800 Speaker 4: It's totally I mean, Goldman made this call literally before 159 00:08:16,280 --> 00:08:18,760 Speaker 4: the announcement, so they couldn't have found it any worse. 160 00:08:18,800 --> 00:08:21,120 Speaker 4: I mean, not that you know, it was their fault. 161 00:08:22,200 --> 00:08:24,160 Speaker 4: And so of course they're coming pulling it back now 162 00:08:24,240 --> 00:08:26,520 Speaker 4: and it goes. It speaks exactly to what you say 163 00:08:26,520 --> 00:08:29,320 Speaker 4: as to how businesses are trying to find their way 164 00:08:29,360 --> 00:08:32,199 Speaker 4: in this world and they're constantly changing their mind. And 165 00:08:32,280 --> 00:08:35,040 Speaker 4: when you have that uncertainty, if you're running a business, 166 00:08:35,040 --> 00:08:38,480 Speaker 4: you're going to basically say, full stop, we're not investing, 167 00:08:38,559 --> 00:08:41,800 Speaker 4: we're not hiring, we're not we're not moving forward with 168 00:08:41,960 --> 00:08:45,199 Speaker 4: plans at the moment. Let's shelve everything. We're going to 169 00:08:45,320 --> 00:08:47,960 Speaker 4: keep looking at the situation. We're going to wait and 170 00:08:48,000 --> 00:08:50,319 Speaker 4: see and then more likely they're not. They're going to 171 00:08:50,400 --> 00:08:52,960 Speaker 4: wait and see for things to really develop before they 172 00:08:53,000 --> 00:08:55,240 Speaker 4: step in. You don't want to step in on day one, 173 00:08:55,320 --> 00:08:58,480 Speaker 4: thinking again, maybe somebody changes their mind. You're going to 174 00:08:58,520 --> 00:09:01,720 Speaker 4: want to see this developed. I think in the long run, 175 00:09:01,920 --> 00:09:05,640 Speaker 4: this will develop positively. I think that you know, China 176 00:09:05,640 --> 00:09:08,560 Speaker 4: will eventually Trump is going to need to look for 177 00:09:08,600 --> 00:09:11,520 Speaker 4: a way to give President she Away a face saving 178 00:09:11,559 --> 00:09:14,200 Speaker 4: way out, to give him an opportunity to come to 179 00:09:14,240 --> 00:09:18,160 Speaker 4: the table to have this conversation. If that happens, I 180 00:09:18,200 --> 00:09:20,840 Speaker 4: think you can just you know, wipe all of this away. 181 00:09:21,120 --> 00:09:24,640 Speaker 4: Starting from you know, the beginning, things are going to 182 00:09:24,679 --> 00:09:27,160 Speaker 4: move positive. I think you'll see a lot freer trade, 183 00:09:27,880 --> 00:09:30,320 Speaker 4: a different form of globalization, if you will. 184 00:09:30,480 --> 00:09:32,080 Speaker 3: Vince to the point that Carol just brought up this 185 00:09:32,120 --> 00:09:35,080 Speaker 3: headline crossing that says Goldman Sachs rescinds its recession call 186 00:09:35,480 --> 00:09:39,480 Speaker 3: after the Trump tariff pause. I'm confused about what fundamentally 187 00:09:39,559 --> 00:09:43,160 Speaker 3: changes here, because as we heard from the Treasury Secretary, 188 00:09:43,200 --> 00:09:46,719 Speaker 3: as we saw in that post from the President, this 189 00:09:46,760 --> 00:09:50,800 Speaker 3: is a ninety day pause on countries that are not 190 00:09:50,920 --> 00:09:54,600 Speaker 3: retaliating right now, this doesn't seem like a fundamental shift 191 00:09:55,040 --> 00:09:58,680 Speaker 3: in the way the president is thinking about tariffs. Why 192 00:09:58,720 --> 00:10:02,960 Speaker 3: does the recession risk rem then, at least according to Goldman. 193 00:10:03,400 --> 00:10:05,920 Speaker 4: Yeah, but if you think about the countries that are retaliating, 194 00:10:06,040 --> 00:10:09,559 Speaker 4: it's really just the European Union, Canada and China. 195 00:10:09,559 --> 00:10:10,800 Speaker 3: Those are big trading partners. 196 00:10:11,360 --> 00:10:13,959 Speaker 4: Yeah no, but Canada, Canada is in a different situation. 197 00:10:14,040 --> 00:10:16,760 Speaker 4: Cartney's running for reelection, so you expect him to talk tough. 198 00:10:17,080 --> 00:10:20,240 Speaker 4: One would assume he is the the the front runner 199 00:10:20,280 --> 00:10:22,760 Speaker 4: at this point. He is the odds on a favorite. 200 00:10:23,040 --> 00:10:25,480 Speaker 4: Will he change his tune after he is elected? I 201 00:10:25,600 --> 00:10:28,040 Speaker 4: think he will. I think he's going to look to 202 00:10:28,120 --> 00:10:31,880 Speaker 4: do something something positive for Canada, and that's going to 203 00:10:31,920 --> 00:10:35,160 Speaker 4: be Yeah. You know, listen, we're allies. Let's let's let's 204 00:10:35,160 --> 00:10:37,840 Speaker 4: cut this out. You know, where we're enemies, we're allies. 205 00:10:38,040 --> 00:10:40,200 Speaker 4: Let's let's put this aside and let's figure out what 206 00:10:40,200 --> 00:10:42,880 Speaker 4: our differences are similar to what Shine Maam is doing 207 00:10:42,920 --> 00:10:43,480 Speaker 4: in Mexico. 208 00:10:43,640 --> 00:10:45,079 Speaker 3: Right, Yeah, that's a good viewing. 209 00:10:45,160 --> 00:10:47,360 Speaker 4: It's definitely. I think the EU is definitely going to 210 00:10:47,400 --> 00:10:49,679 Speaker 4: come around again because they're not in great shape right now. 211 00:10:49,720 --> 00:10:52,120 Speaker 3: There was a question shouted at the Treasury Secretary as 212 00:10:52,120 --> 00:10:54,280 Speaker 3: he was walking away, what about the EU? What about 213 00:10:54,280 --> 00:10:56,920 Speaker 3: the EU? Because they have retaliated. So we'll expect to 214 00:10:56,920 --> 00:10:58,880 Speaker 3: hear maybe something on that and we will bring it 215 00:10:58,880 --> 00:11:01,000 Speaker 3: to you when we do get an answer. Vince, thank 216 00:11:01,040 --> 00:11:03,720 Speaker 3: you for jumping in today. Vince SIGMREALI. He's a global 217 00:11:03,760 --> 00:11:04,839 Speaker 3: macro strategist. 218 00:11:05,360 --> 00:11:09,040 Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us 219 00:11:09,160 --> 00:11:12,120 Speaker 1: live weekday afternoons from two to five d's during Listen 220 00:11:12,200 --> 00:11:15,760 Speaker 1: on Applecarplay and Android Auto with the Bloomberg Business app, 221 00:11:15,920 --> 00:11:18,680 Speaker 1: or watch us live on YouTube. 222 00:11:20,760 --> 00:11:23,040 Speaker 3: Let's drive to the clothes with a brand Shooty, Chief 223 00:11:23,040 --> 00:11:26,880 Speaker 3: investment officer at Northwestern Mutual Wealth Management. The firm has 224 00:11:26,920 --> 00:11:29,440 Speaker 3: more than three hundred billion dollars in assets under management. 225 00:11:29,520 --> 00:11:33,080 Speaker 3: The division that Brent oversees has about ninety billion dollars 226 00:11:33,080 --> 00:11:36,679 Speaker 3: in AUM. He joins us from Milwaukee. We got to 227 00:11:36,720 --> 00:11:42,360 Speaker 3: start with just today's trade and what we're seeing. Superlatives abound. Brent, 228 00:11:44,160 --> 00:11:46,760 Speaker 3: is this the environment people should be buying? 229 00:11:48,520 --> 00:11:48,720 Speaker 4: Well? 230 00:11:48,760 --> 00:11:50,680 Speaker 6: I think if your time arising is longer term, I 231 00:11:50,679 --> 00:11:52,880 Speaker 6: think usually any day is a good opportunity to buy. 232 00:11:53,240 --> 00:11:54,880 Speaker 6: I think in the near term, I still think there's 233 00:11:55,040 --> 00:11:58,079 Speaker 6: tremendous volatility still out there. I don't think we've learned 234 00:11:58,200 --> 00:12:00,240 Speaker 6: too much new We have a reprieve, but certain we 235 00:12:00,280 --> 00:12:02,040 Speaker 6: still have ninety days of uncertainty. As you and your 236 00:12:02,040 --> 00:12:04,520 Speaker 6: previous guests were talking about, and during that time period, 237 00:12:04,520 --> 00:12:06,760 Speaker 6: I think anything's on the table, and so to me, 238 00:12:06,880 --> 00:12:08,520 Speaker 6: you still want to make sure that you're careful. You 239 00:12:08,520 --> 00:12:10,440 Speaker 6: want to make sure that you're at your allocation and 240 00:12:10,440 --> 00:12:12,679 Speaker 6: not overweight, and that you're prepared in case the market 241 00:12:12,679 --> 00:12:14,960 Speaker 6: does go down again, that you will stay through to 242 00:12:15,000 --> 00:12:16,800 Speaker 6: the other side to get to the higher returns that 243 00:12:16,800 --> 00:12:18,040 Speaker 6: are somewhere off in the future. 244 00:12:18,120 --> 00:12:20,120 Speaker 3: When you say prepared, when you say prepared, do you 245 00:12:20,160 --> 00:12:23,440 Speaker 3: just mean like, have the stomach for it to stay 246 00:12:23,480 --> 00:12:24,800 Speaker 3: the course? Is that what you mean? 247 00:12:25,559 --> 00:12:27,439 Speaker 6: Yeah, stay the course and have the stomach for it. Look, 248 00:12:27,440 --> 00:12:29,719 Speaker 6: I think unfortunately a lot of investors are still concentrated. 249 00:12:29,760 --> 00:12:31,640 Speaker 6: I see it when I travel around the country. They 250 00:12:31,679 --> 00:12:33,480 Speaker 6: only want to own US large cap stocks, and they 251 00:12:33,480 --> 00:12:35,080 Speaker 6: want to own a narrow swath of the US large 252 00:12:35,120 --> 00:12:38,120 Speaker 6: cap stocks. To me, the trend has changed, the environment 253 00:12:38,160 --> 00:12:40,920 Speaker 6: has changed, whether or not the tariffs go through. I 254 00:12:40,960 --> 00:12:43,920 Speaker 6: think some form of them still do. The tariffs are 255 00:12:43,960 --> 00:12:46,560 Speaker 6: still something that I think the President has an affinity 256 00:12:46,600 --> 00:12:48,960 Speaker 6: for and believes are the right thing to do. I 257 00:12:48,960 --> 00:12:51,679 Speaker 6: don't think he really is in love with trade altogether. 258 00:12:52,200 --> 00:12:54,800 Speaker 6: He just decided today that the market damage was probably 259 00:12:54,800 --> 00:12:56,920 Speaker 6: more than he wanted in the near term, and so 260 00:12:56,960 --> 00:13:00,480 Speaker 6: therefore pulled them back. I want people to diversify every 261 00:13:00,520 --> 00:13:03,240 Speaker 6: economic cycle. Whether or not this cause of the recession 262 00:13:03,280 --> 00:13:06,079 Speaker 6: or not will find out, but every cycle has new leadership. 263 00:13:06,600 --> 00:13:08,719 Speaker 6: And to me, the S and P five hundred is 264 00:13:08,720 --> 00:13:11,400 Speaker 6: still trading at twenty times, even though it's off its 265 00:13:11,440 --> 00:13:13,760 Speaker 6: highs by quite a bit. Twenty times forward earnings, there 266 00:13:13,760 --> 00:13:16,360 Speaker 6: are opportunities other places that are trading at thirteen or 267 00:13:16,360 --> 00:13:19,200 Speaker 6: fourteen times, where I think there are better opportunities for 268 00:13:19,280 --> 00:13:21,400 Speaker 6: those people willing to think intermediate to longer term, which 269 00:13:21,440 --> 00:13:22,959 Speaker 6: is what you're supposed to do when you buy equities. 270 00:13:22,960 --> 00:13:25,280 Speaker 5: All right, So you're saying, Brent at this point that 271 00:13:25,920 --> 00:13:30,240 Speaker 5: the S and P five hundred is still overpriced over values, and. 272 00:13:30,160 --> 00:13:32,000 Speaker 6: That's where I think, Yeah, no one cares about No 273 00:13:32,000 --> 00:13:34,240 Speaker 6: one cares about valuation on the upside. But when people 274 00:13:34,320 --> 00:13:36,079 Speaker 6: like me start thinking about when they're going to dip 275 00:13:36,120 --> 00:13:39,000 Speaker 6: their toe in or potentially buy more OVERVOT stocks. On 276 00:13:39,040 --> 00:13:43,040 Speaker 6: the downside, they start doing valuation exercises because that's marginal safety. 277 00:13:43,640 --> 00:13:45,520 Speaker 6: And to me, that's where I think people need to 278 00:13:45,520 --> 00:13:47,760 Speaker 6: think about the next side of this. You know, if 279 00:13:47,760 --> 00:13:50,080 Speaker 6: it's up, up, and a way, then we truly have 280 00:13:50,200 --> 00:13:51,880 Speaker 6: those areas of the market that are cheaper that I 281 00:13:51,880 --> 00:13:54,200 Speaker 6: would expect to do better if it's not some other 282 00:13:54,280 --> 00:13:57,679 Speaker 6: those other parts of the market have evaluation you know, 283 00:13:58,000 --> 00:14:00,360 Speaker 6: floor to them, And so that's where I I just 284 00:14:00,400 --> 00:14:02,920 Speaker 6: want people to diversify because no one knows exactly how 285 00:14:02,960 --> 00:14:05,120 Speaker 6: that's going to play out, and today the anadote for 286 00:14:05,200 --> 00:14:07,800 Speaker 6: that is diversification, not concentration, all. 287 00:14:07,800 --> 00:14:09,320 Speaker 5: Right, So that's where I want to go to because 288 00:14:09,360 --> 00:14:11,720 Speaker 5: I'm curious if no one knows where this is going 289 00:14:11,760 --> 00:14:13,880 Speaker 5: to play out, and if it might be another ninety 290 00:14:13,960 --> 00:14:17,880 Speaker 5: days before we really know maybe what the next sequence is, 291 00:14:19,360 --> 00:14:23,640 Speaker 5: you know, uncertainty continues to rain. You said, trade has changed, 292 00:14:23,720 --> 00:14:27,920 Speaker 5: environment has changed. So what is exactly diversification in this environment? 293 00:14:28,080 --> 00:14:31,680 Speaker 5: How do you see it? What's the equity fixed income mix, 294 00:14:31,800 --> 00:14:34,960 Speaker 5: what's the US versus global mix? What is the do 295 00:14:35,040 --> 00:14:36,560 Speaker 5: I just kind of throw it in some kind of 296 00:14:36,560 --> 00:14:39,240 Speaker 5: cash like investment. What do you do here? We are 297 00:14:39,320 --> 00:14:41,080 Speaker 5: like over the last three days, you got beaten up. 298 00:14:41,080 --> 00:14:43,760 Speaker 5: If you had a lot of equity exposure, just got 299 00:14:43,760 --> 00:14:45,920 Speaker 5: a bounce. Do we sell at the end of this 300 00:14:46,320 --> 00:14:48,600 Speaker 5: and put it into something safer for I don't know, 301 00:14:48,760 --> 00:14:50,760 Speaker 5: six months, twelve months, who knows? 302 00:14:51,600 --> 00:14:54,080 Speaker 6: Hopefully today shows you that you shouldn't put anything into cash, 303 00:14:54,120 --> 00:14:57,120 Speaker 6: and cash only whens in so many different circumstances, not many, actually, 304 00:14:57,680 --> 00:14:59,960 Speaker 6: And that's where if you put your assets in one 305 00:15:00,120 --> 00:15:02,480 Speaker 6: asset class such as cash, you're telling me that you 306 00:15:02,520 --> 00:15:04,280 Speaker 6: know exactly what's going to happen. And I'm telling you, 307 00:15:04,440 --> 00:15:06,880 Speaker 6: after doing this for thirty years, I don't, and I 308 00:15:06,920 --> 00:15:10,000 Speaker 6: don't especially know with what's happening today, given the back 309 00:15:10,000 --> 00:15:12,320 Speaker 6: and forth that can occur and these huge swings that 310 00:15:12,320 --> 00:15:15,200 Speaker 6: can occur. Look, we've been cautious for a little while. 311 00:15:15,760 --> 00:15:17,880 Speaker 6: We're towards the end of an economic cycle. The market 312 00:15:17,920 --> 00:15:20,960 Speaker 6: is fully valued and there is the tariff uncertainty out 313 00:15:20,960 --> 00:15:23,400 Speaker 6: there that's more of the near term. That doesn't mean 314 00:15:23,400 --> 00:15:25,800 Speaker 6: that you abandon your equity ratio and what's in your 315 00:15:25,840 --> 00:15:28,000 Speaker 6: financial plan, but that means you're at your target are 316 00:15:28,000 --> 00:15:30,720 Speaker 6: just a bit below and you're cautious about what could happen, 317 00:15:30,720 --> 00:15:33,280 Speaker 6: and you're ready to hold through whatever occurs. On the 318 00:15:33,360 --> 00:15:35,640 Speaker 6: other side of this, I think of valuation becoming much 319 00:15:35,680 --> 00:15:37,840 Speaker 6: much more important once again in the future, and I 320 00:15:37,880 --> 00:15:40,000 Speaker 6: think about a three, five, seven, ten year time holding 321 00:15:40,040 --> 00:15:42,720 Speaker 6: period where valuation does matter, and that's where I think 322 00:15:42,720 --> 00:15:45,120 Speaker 6: there's opportunities in people that have in parts of the 323 00:15:45,120 --> 00:15:47,520 Speaker 6: market that people have decided to move out of because 324 00:15:47,560 --> 00:15:49,200 Speaker 6: they haven't done well for the prior a few years. 325 00:15:49,400 --> 00:15:51,200 Speaker 6: That's where I think their opportunity is going forward. And 326 00:15:51,240 --> 00:15:53,760 Speaker 6: if you're not diversified, hopefully today is a wake up 327 00:15:53,800 --> 00:15:55,320 Speaker 6: call that it's time to do so. 328 00:15:55,320 --> 00:15:58,160 Speaker 3: So are you know thinking about this from the perspective 329 00:15:58,160 --> 00:16:01,080 Speaker 3: of valuations, which you just mentioned, If people are thinking 330 00:16:01,080 --> 00:16:04,160 Speaker 3: about dipping their toes back in, what is a valuation 331 00:16:04,240 --> 00:16:05,800 Speaker 3: that you would want to see on the S and 332 00:16:05,800 --> 00:16:07,720 Speaker 3: P five hundreds, It's say, okay, now's the time. 333 00:16:09,200 --> 00:16:11,240 Speaker 6: It's not twenty times for darrings that expected to go 334 00:16:11,280 --> 00:16:11,760 Speaker 6: ten days. 335 00:16:11,920 --> 00:16:12,560 Speaker 3: Is it eighteen? 336 00:16:14,240 --> 00:16:16,640 Speaker 6: I think perhaps it's somewhere lower than eighteen, maybe sixteen, 337 00:16:16,680 --> 00:16:18,520 Speaker 6: maybe fifteen, depending on if we have a recession or 338 00:16:18,520 --> 00:16:21,600 Speaker 6: now that's certainly important, but maybe eighteen's more reasonable, and 339 00:16:21,640 --> 00:16:23,240 Speaker 6: if you do the math on that with the earnings, 340 00:16:23,240 --> 00:16:25,720 Speaker 6: you're a lower number than what you are today. That's 341 00:16:25,760 --> 00:16:27,400 Speaker 6: not to say that you should be selling that. It's 342 00:16:27,440 --> 00:16:29,160 Speaker 6: just saying that there are better opportunities than things like 343 00:16:29,200 --> 00:16:32,200 Speaker 6: small midcaps, which I know are economically sensitive and so 344 00:16:32,280 --> 00:16:35,680 Speaker 6: does everyone else. They traded thirteen to fourteen times earnings. 345 00:16:35,880 --> 00:16:38,400 Speaker 6: That's historically more normal, and that gives them more of 346 00:16:38,440 --> 00:16:40,400 Speaker 6: a margin of safety, and that gives them more opportunity 347 00:16:40,400 --> 00:16:44,120 Speaker 6: for upside when valuation matters in the longer term. 348 00:16:44,200 --> 00:16:47,560 Speaker 3: Yeah, it's okay, Okay, that makes sense. Okay, from the 349 00:16:47,600 --> 00:16:50,120 Speaker 3: perspective of if we drill down a little bit beyond 350 00:16:50,200 --> 00:16:54,360 Speaker 3: in disease and sort of regionally. You said that you 351 00:16:54,440 --> 00:16:56,200 Speaker 3: still go around the world and you hear people want 352 00:16:56,200 --> 00:17:01,120 Speaker 3: to buy megacap us companies. Do you see that changing 353 00:17:01,160 --> 00:17:03,160 Speaker 3: at all in the near term. There's a lot of 354 00:17:03,240 --> 00:17:07,000 Speaker 3: questions right now about this idea of US exceptionalism. 355 00:17:07,640 --> 00:17:11,040 Speaker 6: If history is any guide, look historically and tell me 356 00:17:11,080 --> 00:17:13,920 Speaker 6: how long one trend has lasted. Has it lasted forever? 357 00:17:13,960 --> 00:17:15,640 Speaker 6: I think back to the late nineteen ninety nine period, 358 00:17:15,680 --> 00:17:17,960 Speaker 6: which is exactly what this reminds me of, and that 359 00:17:18,080 --> 00:17:20,760 Speaker 6: was a period of American exceptionalism. That was a period 360 00:17:20,800 --> 00:17:23,400 Speaker 6: when everyone only wanted to own large cap, mega tech 361 00:17:23,720 --> 00:17:27,399 Speaker 6: tech stocks and then they were essentially didn't make a 362 00:17:27,400 --> 00:17:29,280 Speaker 6: new high for seventeen years, while every other part that 363 00:17:29,280 --> 00:17:32,240 Speaker 6: they didn't want to own did make new highs. And 364 00:17:32,320 --> 00:17:35,479 Speaker 6: so no one theme has dominated forever. I think the 365 00:17:35,520 --> 00:17:38,000 Speaker 6: backdrop has changed. The backdrop of the prior three or 366 00:17:38,000 --> 00:17:40,960 Speaker 6: four or five years has been American exceptionalism driven by 367 00:17:41,080 --> 00:17:44,040 Speaker 6: a lot of debt, which is a bipartisan thing. Now 368 00:17:44,040 --> 00:17:45,960 Speaker 6: you're seeing places like Europe where they're waking up to 369 00:17:45,960 --> 00:17:48,080 Speaker 6: the reality that they have to spend money on defense 370 00:17:48,080 --> 00:17:51,520 Speaker 6: and infrastructure. Places like Germany haven't issued a lot of debt, 371 00:17:51,960 --> 00:17:53,879 Speaker 6: and so I think you're seeing a definite trend change. 372 00:17:53,880 --> 00:17:56,359 Speaker 6: And it's not to say that those companies in the 373 00:17:56,440 --> 00:17:58,439 Speaker 6: US are companies that you should have known. I just 374 00:17:58,480 --> 00:18:00,000 Speaker 6: want people to admit they don't know what's going on 375 00:18:00,119 --> 00:18:03,000 Speaker 6: to happen and not concentrate, because when you concentrate, you 376 00:18:03,000 --> 00:18:05,879 Speaker 6: have to make difficult decisions like do you sell something 377 00:18:05,960 --> 00:18:07,600 Speaker 6: now or do you think that one part of the 378 00:18:07,600 --> 00:18:09,639 Speaker 6: market is what's going to be going forward, and no 379 00:18:09,640 --> 00:18:10,800 Speaker 6: one knows that answer, Bret. 380 00:18:10,840 --> 00:18:12,679 Speaker 5: What I really keep thinking about is what are the 381 00:18:12,720 --> 00:18:15,639 Speaker 5: long term implications for investors, for the world at large, 382 00:18:15,680 --> 00:18:18,840 Speaker 5: for trade at large. Maybe we don't have clarity on 383 00:18:18,920 --> 00:18:22,040 Speaker 5: that too. But are you assuming that on the other 384 00:18:22,160 --> 00:18:25,639 Speaker 5: side things are changed dramatically and that means the growth 385 00:18:25,680 --> 00:18:28,280 Speaker 5: outlook for US companies has changed, the growth for the 386 00:18:28,400 --> 00:18:31,000 Speaker 5: US economy has changed. I'm just curious if you can 387 00:18:31,040 --> 00:18:32,120 Speaker 5: go that far out here. 388 00:18:33,440 --> 00:18:36,320 Speaker 6: I think the administration, the president most likely once a 389 00:18:36,359 --> 00:18:39,680 Speaker 6: currency that's lower. I think that's a tailwind towards international stocks. 390 00:18:40,560 --> 00:18:43,120 Speaker 6: I mentioned Europe spending more money, possibly in other parts 391 00:18:43,119 --> 00:18:45,840 Speaker 6: of the world spending more money, which is something that 392 00:18:45,880 --> 00:18:48,640 Speaker 6: they probably need to do on defense. Anyway, I think 393 00:18:48,640 --> 00:18:52,920 Speaker 6: about perhaps even more domestic US. Does that benefit small caps? 394 00:18:52,920 --> 00:18:56,600 Speaker 6: What about deregulation going forward? Certainly there are different things 395 00:18:56,600 --> 00:18:59,720 Speaker 6: that happen during every economic cycle. They're probably similar and 396 00:18:59,720 --> 00:19:02,080 Speaker 6: how play out, But I think the backdrop for the 397 00:19:02,080 --> 00:19:04,240 Speaker 6: next one had shifted, and that's where I think there 398 00:19:04,240 --> 00:19:06,359 Speaker 6: are other opportunities. Plus, if you think about the opposite 399 00:19:06,400 --> 00:19:08,919 Speaker 6: side of our trade deficit, that is a financial account 400 00:19:08,920 --> 00:19:11,440 Speaker 6: surplus where foreigners have put a lot of money into 401 00:19:11,480 --> 00:19:14,000 Speaker 6: our markets. Does that lower our raise our cost to 402 00:19:14,040 --> 00:19:16,399 Speaker 6: capital in the future, Do they buy less of our treasuries? 403 00:19:16,560 --> 00:19:18,560 Speaker 6: Which I think was a question people were asking earlier 404 00:19:18,560 --> 00:19:21,240 Speaker 6: today as the bond market kind of blew out, Was 405 00:19:21,280 --> 00:19:24,119 Speaker 6: that because foreigners were becoming less interested? And so I 406 00:19:24,119 --> 00:19:25,919 Speaker 6: think there are lots of trend changes that occur no 407 00:19:25,960 --> 00:19:28,879 Speaker 6: matter what happens in the next few weeks and days, 408 00:19:29,520 --> 00:19:31,440 Speaker 6: and that's where I think there's opportunities on the other 409 00:19:31,480 --> 00:19:33,320 Speaker 6: side for parts of the market that have been left 410 00:19:33,320 --> 00:19:36,520 Speaker 6: behind for the prior two or three years. And every 411 00:19:36,560 --> 00:19:38,639 Speaker 6: cycle ends this way. I take you back to the 412 00:19:38,720 --> 00:19:41,520 Speaker 6: late eighties, people only wanted to own Japan. I take 413 00:19:41,560 --> 00:19:44,280 Speaker 6: you back to the late nineteen ninety nine time period. 414 00:19:44,280 --> 00:19:46,000 Speaker 6: People only wanted to own tech. They didn't want to 415 00:19:46,000 --> 00:19:47,919 Speaker 6: own international, they didn't want to own the Eurozone, they 416 00:19:47,920 --> 00:19:50,000 Speaker 6: didn't want to own commodities. Then we got to two 417 00:19:50,000 --> 00:19:51,800 Speaker 6: thousand and seven, two thousand and eight, people were certain 418 00:19:51,840 --> 00:19:53,679 Speaker 6: that China was going to drive US forward, and that 419 00:19:53,720 --> 00:19:55,919 Speaker 6: commodities were the asset class they all should own, and 420 00:19:55,960 --> 00:19:59,080 Speaker 6: that the US was the dirtiest shirt or whatever the 421 00:19:59,080 --> 00:20:01,960 Speaker 6: commentary was back then. And then things have changed. Once again, 422 00:20:02,040 --> 00:20:04,600 Speaker 6: the future will be different in the past. At least 423 00:20:04,600 --> 00:20:05,760 Speaker 6: that's what history has shown me. 424 00:20:05,920 --> 00:20:08,480 Speaker 5: Okay, So one thing that we've been asking some of 425 00:20:08,520 --> 00:20:10,400 Speaker 5: our guests, I mean, are we getting to a point 426 00:20:10,440 --> 00:20:12,240 Speaker 5: where when we think about the future, as you said, 427 00:20:12,280 --> 00:20:14,639 Speaker 5: people only wanted to own Japan or some different things. 428 00:20:14,840 --> 00:20:16,600 Speaker 5: Do we get to a point where a lot of 429 00:20:16,600 --> 00:20:19,000 Speaker 5: global investors don't want to own the United States that 430 00:20:19,080 --> 00:20:20,480 Speaker 5: it's uninvestable. 431 00:20:22,160 --> 00:20:24,879 Speaker 6: I don't know about that. I mean, I think perhaps 432 00:20:24,920 --> 00:20:26,959 Speaker 6: there's some sort of pullback from that from the treasure 433 00:20:27,359 --> 00:20:30,199 Speaker 6: perspective or somewhere else. But right now, we still are 434 00:20:30,200 --> 00:20:32,520 Speaker 6: the deepest, most liquid markets, and we do have companies 435 00:20:32,560 --> 00:20:35,359 Speaker 6: that do an incredible job of creating profits. That's something 436 00:20:35,400 --> 00:20:37,560 Speaker 6: that's likely not to change. And so I don't think 437 00:20:37,560 --> 00:20:39,520 Speaker 6: people are going to pull back dramatically from the US. 438 00:20:39,560 --> 00:20:42,399 Speaker 6: But certainly right now there is a heavy allocation to 439 00:20:42,560 --> 00:20:45,679 Speaker 6: US across the world. There's probably just a little bit 440 00:20:45,680 --> 00:20:47,439 Speaker 6: of room for that to be taken back to a 441 00:20:47,480 --> 00:20:50,399 Speaker 6: touch and put towards other places that may be a 442 00:20:50,440 --> 00:20:53,200 Speaker 6: better at least in the near term place going forward. 443 00:20:53,960 --> 00:20:57,320 Speaker 2: You are listening to the Bloomberg Business Week podcast catch 444 00:20:57,400 --> 00:21:01,080 Speaker 2: us Live weekday afternoons from two to five Eastern Listen 445 00:21:01,080 --> 00:21:04,639 Speaker 2: on Applecarplay and the Android Auto with the Bloomberg Business app, 446 00:21:04,800 --> 00:21:07,440 Speaker 2: or watch us live on YouTube. 447 00:21:08,880 --> 00:21:10,560 Speaker 5: All right, we have a guest in studio we want 448 00:21:10,600 --> 00:21:11,960 Speaker 5: to bring in and talk a little bit more about 449 00:21:12,200 --> 00:21:16,240 Speaker 5: the market's Danielle di Martino, Booth, CEO and chief Strategies 450 00:21:16,240 --> 00:21:18,840 Speaker 5: at Quill Intelligence, former advisor to the President of the 451 00:21:18,880 --> 00:21:22,159 Speaker 5: Dallas Fed here in our Bloomberg Interactive Broker's studio, a 452 00:21:22,200 --> 00:21:23,919 Speaker 5: little bit out of breath, just trying to keep up. 453 00:21:23,920 --> 00:21:27,080 Speaker 5: How are you and what are you thinking about the 454 00:21:27,119 --> 00:21:30,800 Speaker 5: news today and what fundamentally has changed, if anything, in 455 00:21:30,880 --> 00:21:31,639 Speaker 5: terms of the market. 456 00:21:31,920 --> 00:21:34,680 Speaker 7: Fundamentally is a great big word, and I'm not so 457 00:21:34,720 --> 00:21:37,080 Speaker 7: sure that the bond market has the answer to that question. 458 00:21:37,119 --> 00:21:40,359 Speaker 7: The stock market seems like it's it's already given you 459 00:21:40,400 --> 00:21:43,120 Speaker 7: an answer. But we're still up on the benchmark ten 460 00:21:43,200 --> 00:21:45,840 Speaker 7: year yield. You know, we're about four basis points on 461 00:21:45,880 --> 00:21:48,280 Speaker 7: the day it crossed over the four fifty line. In 462 00:21:48,320 --> 00:21:52,800 Speaker 7: overnight trading. We're seeing continued unwind of the basis trade 463 00:21:52,800 --> 00:21:56,240 Speaker 7: obviously in overnight trading. I'm not gonna I'm not going 464 00:21:56,320 --> 00:21:58,200 Speaker 7: to stop watching the markets at the Asian open. 465 00:21:58,680 --> 00:21:59,439 Speaker 5: I'll probably still. 466 00:21:59,280 --> 00:22:00,720 Speaker 7: Wake up in the mole and I to see how 467 00:22:00,760 --> 00:22:04,159 Speaker 7: the bond market is faring. But we have no idea 468 00:22:04,359 --> 00:22:06,040 Speaker 7: if this is the art of the deal or the 469 00:22:06,160 --> 00:22:08,520 Speaker 7: art of playground fighting, and China is going to come 470 00:22:08,520 --> 00:22:10,760 Speaker 7: back with yet more retaliatory. 471 00:22:11,040 --> 00:22:12,719 Speaker 5: Measures of their own. We don't know. 472 00:22:12,880 --> 00:22:14,360 Speaker 7: This is just going to keep ramping up. 473 00:22:14,960 --> 00:22:17,120 Speaker 3: So I want to get to China in a second. 474 00:22:17,160 --> 00:22:18,680 Speaker 3: But before we get there, you brought up the bond 475 00:22:18,720 --> 00:22:20,760 Speaker 3: market and the equity market. 476 00:22:21,000 --> 00:22:21,119 Speaker 5: Hm. 477 00:22:21,720 --> 00:22:22,920 Speaker 3: Who's right in your view? 478 00:22:23,480 --> 00:22:23,800 Speaker 5: Gosh? 479 00:22:23,960 --> 00:22:26,880 Speaker 7: I mean, you know, look, we're coming into earning season, right, 480 00:22:27,400 --> 00:22:30,800 Speaker 7: Delta was obviously battening down the hatches as the first example. 481 00:22:31,480 --> 00:22:34,280 Speaker 7: Do we really think that with banks tightening lending standards? Right? 482 00:22:34,320 --> 00:22:37,280 Speaker 7: The dallasht To Reserve release a survey just a few 483 00:22:37,320 --> 00:22:40,560 Speaker 7: days ago that said that loan demanded already declined, lending 484 00:22:40,560 --> 00:22:44,320 Speaker 7: standards had already tightened prior to April to second, So 485 00:22:44,880 --> 00:22:46,800 Speaker 7: are bank's going to pull back on any plans that 486 00:22:46,840 --> 00:22:49,800 Speaker 7: they had due to this uncertainty because of one announcement? 487 00:22:50,400 --> 00:22:53,360 Speaker 7: And I think we'll learn a lot more from Corporate America. 488 00:22:53,840 --> 00:22:55,200 Speaker 5: Yeah, that's what they're saying. 489 00:22:55,320 --> 00:22:57,280 Speaker 3: We hear that from Gina Marnadams. I mean we've heard 490 00:22:57,280 --> 00:22:59,879 Speaker 3: that from everyone, like, okay, earnings are starting, yes right now? 491 00:23:00,040 --> 00:23:02,000 Speaker 3: Heard from Delta Today Friday, we'll hear from some of 492 00:23:02,040 --> 00:23:04,840 Speaker 3: the big banks, including JP, Morgan Chase. What do you 493 00:23:04,840 --> 00:23:06,440 Speaker 3: want to hear from these companies? Like, what is the 494 00:23:06,560 --> 00:23:08,520 Speaker 3: question that you need to have answered? 495 00:23:09,040 --> 00:23:11,000 Speaker 7: I want to know if they're comfortable with where their 496 00:23:11,000 --> 00:23:13,560 Speaker 7: margins are going forward, or if they feel that they're 497 00:23:13,680 --> 00:23:16,879 Speaker 7: going to have to continue to preemptively cut costs and 498 00:23:17,119 --> 00:23:20,840 Speaker 7: continue to push through as we saw today with the 499 00:23:20,840 --> 00:23:23,040 Speaker 7: newly found group that I can't even think of the 500 00:23:23,119 --> 00:23:26,720 Speaker 7: name that now owns JP, J C. Penny and Brooks Brothers. 501 00:23:26,760 --> 00:23:29,240 Speaker 7: They just pushed through a nine percent layoff announcement today. 502 00:23:29,280 --> 00:23:31,520 Speaker 7: I want to know if the margins are protected enough 503 00:23:31,760 --> 00:23:34,960 Speaker 7: or if they're going to continue to react by continuing 504 00:23:34,960 --> 00:23:37,760 Speaker 7: to cut costs. You know, we've seen we've seen corporate 505 00:23:37,800 --> 00:23:41,000 Speaker 7: bankruptcies up twenty percent this year through March. That has 506 00:23:41,040 --> 00:23:44,280 Speaker 7: nothing to do with this tariff terror as I like 507 00:23:44,320 --> 00:23:44,800 Speaker 7: to call it. 508 00:23:45,000 --> 00:23:46,399 Speaker 5: You're talking about Catalyst brands. 509 00:23:46,680 --> 00:23:49,119 Speaker 7: I'm talking about Catalyst brand. Yes, that came across the 510 00:23:49,200 --> 00:23:50,200 Speaker 7: terminal this afternoon. 511 00:23:50,359 --> 00:23:53,920 Speaker 5: You know, I'm thinking you go back and you put 512 00:23:53,920 --> 00:23:56,960 Speaker 5: out a new report from Queer Qi Research in the morning, 513 00:23:57,000 --> 00:24:00,320 Speaker 5: and is it a case of do you say things 514 00:24:00,320 --> 00:24:03,440 Speaker 5: have changed, you know, dramatically, or do you say, hey 515 00:24:03,480 --> 00:24:06,679 Speaker 5: folks again, Right, there's worries in the bond market, like 516 00:24:06,800 --> 00:24:10,920 Speaker 5: this is something that necessarily has not changed, right. 517 00:24:10,760 --> 00:24:13,520 Speaker 7: And you know, we had the probability of a FED 518 00:24:13,680 --> 00:24:17,320 Speaker 7: rate cut in May. Came off quite a bit to day, 519 00:24:17,359 --> 00:24:18,280 Speaker 7: but there's still. 520 00:24:18,080 --> 00:24:20,680 Speaker 5: A lot of FED speakers are saying differently. They're still 521 00:24:20,680 --> 00:24:21,560 Speaker 5: on inflation watch. 522 00:24:21,960 --> 00:24:24,480 Speaker 7: They are still on inflation watch, but I can guarantify 523 00:24:24,560 --> 00:24:27,119 Speaker 7: it they've been on liquidity watch for the last seventy 524 00:24:27,160 --> 00:24:30,399 Speaker 7: two hours. Because remember above all else, above both the 525 00:24:30,440 --> 00:24:34,120 Speaker 7: inflation and employment mandate. They are the lender of last resort, right, 526 00:24:34,160 --> 00:24:36,800 Speaker 7: And I think that it has been the moves in 527 00:24:36,880 --> 00:24:39,720 Speaker 7: the bond market, the moves in bond market volatility, the 528 00:24:39,760 --> 00:24:43,560 Speaker 7: moves in investment grade spreads and highield spreads. These are 529 00:24:43,600 --> 00:24:47,080 Speaker 7: the things that really are going to spook the FED. 530 00:24:47,480 --> 00:24:50,320 Speaker 7: And they have to start paying attention to their employment mandate. 531 00:24:50,480 --> 00:24:52,160 Speaker 5: Do you buy? And I have to find my notes 532 00:24:52,200 --> 00:24:55,120 Speaker 5: here scrolling. Sorry, it's been one of those days where 533 00:24:55,119 --> 00:24:56,879 Speaker 5: you have to kind of scroll your script back and forth. 534 00:24:57,119 --> 00:25:00,640 Speaker 5: US Treasury Secretary Scott Bessett earlier downplay the recent sell 535 00:25:00,680 --> 00:25:03,119 Speaker 5: off in US treasuries. He attributed it to a normal 536 00:25:03,160 --> 00:25:06,440 Speaker 5: deleveraging process in the bond market. Is that what we 537 00:25:06,440 --> 00:25:09,480 Speaker 5: were seeing was a normal deleveraging process in the bond market. 538 00:25:09,480 --> 00:25:12,719 Speaker 5: He's someone who very much understands the financial markets. How 539 00:25:12,800 --> 00:25:15,320 Speaker 5: do you see you also understand the financial markets and 540 00:25:15,400 --> 00:25:18,239 Speaker 5: have seen a fair amount of cycles, right, was that 541 00:25:18,359 --> 00:25:20,120 Speaker 5: a normal deleveraging process? 542 00:25:20,280 --> 00:25:22,439 Speaker 7: Well, when you've got the owner of seven hundred and 543 00:25:22,440 --> 00:25:25,800 Speaker 7: sixty billion dollars over the US treasuries under attack, I 544 00:25:25,880 --> 00:25:28,040 Speaker 7: eat China. The answer is I don't know, and I 545 00:25:28,080 --> 00:25:31,600 Speaker 7: don't think he can know either, So it really the 546 00:25:31,840 --> 00:25:36,199 Speaker 7: jury's out again. Just because it's only theoretically China in 547 00:25:36,240 --> 00:25:39,440 Speaker 7: the crosshers, that does not take away the fact that tariffs. 548 00:25:39,119 --> 00:25:39,840 Speaker 5: Remain in place. 549 00:25:39,840 --> 00:25:42,359 Speaker 7: We still have a ten percent tariff exactly, and we 550 00:25:42,600 --> 00:25:44,960 Speaker 7: still don't know what the ripple effects are going to 551 00:25:44,960 --> 00:25:48,000 Speaker 7: be across the rest of Asia and other large holders 552 00:25:48,280 --> 00:25:50,560 Speaker 7: of our treasuries and how this is going to play 553 00:25:50,600 --> 00:25:51,560 Speaker 7: out in the bond market. 554 00:25:52,160 --> 00:25:54,359 Speaker 5: You know what it's what's terrifying. Is I feel like 555 00:25:54,400 --> 00:25:57,680 Speaker 5: for years we have had conversations. I've certainly had conversations 556 00:25:57,720 --> 00:25:59,760 Speaker 5: with my husband, but it's like, what if all of 557 00:25:59,840 --> 00:26:02,520 Speaker 5: us then China says we're not going to buy your treasuries, 558 00:26:02,640 --> 00:26:04,800 Speaker 5: or what if not like Japan or Japan? 559 00:26:05,119 --> 00:26:05,320 Speaker 4: Right? 560 00:26:05,640 --> 00:26:08,520 Speaker 5: And I don't I'm not going to say that's exactly 561 00:26:08,600 --> 00:26:09,600 Speaker 5: what's happening, but. 562 00:26:09,560 --> 00:26:11,280 Speaker 7: It feels like there's a lot of but there is 563 00:26:11,320 --> 00:26:14,040 Speaker 7: some of this happening, right there is there's some of 564 00:26:14,040 --> 00:26:16,800 Speaker 7: it happening. And right now the United States treasury market 565 00:26:16,840 --> 00:26:20,639 Speaker 7: is not being treated as its old safe haven self, 566 00:26:20,680 --> 00:26:24,520 Speaker 7: and it's supposedly the world's risk free asset. 567 00:26:24,320 --> 00:26:27,119 Speaker 5: Rule of law safe haven, all of those trustworthy, right. 568 00:26:27,160 --> 00:26:30,159 Speaker 7: And you know, I had somebody in my Bloomberg chat 569 00:26:30,200 --> 00:26:32,800 Speaker 7: room today come out and say, if it was me 570 00:26:33,000 --> 00:26:35,359 Speaker 7: and I was a credit rating agency, I would still 571 00:26:35,400 --> 00:26:38,159 Speaker 7: downgrade this sovereign daddy, the United States because of this 572 00:26:38,280 --> 00:26:41,920 Speaker 7: crazy behavior, because it is so unsettling, it's so meant 573 00:26:42,119 --> 00:26:45,560 Speaker 7: so much uncertainty. You know, even in the hard data, 574 00:26:45,560 --> 00:26:47,720 Speaker 7: as far as the Federal Reserve is concerned, going forward, 575 00:26:48,080 --> 00:26:51,560 Speaker 7: we haven't even seen a sintilla of evidence of the 576 00:26:51,640 --> 00:26:54,879 Speaker 7: eighty thousand people who took the buyout from the federal 577 00:26:54,920 --> 00:26:57,959 Speaker 7: government and or all of the layoffs and closures that 578 00:26:57,960 --> 00:27:00,199 Speaker 7: have that have followed this, and we still have a 579 00:27:00,200 --> 00:27:03,240 Speaker 7: household we still have an impaired household balance sheet on 580 00:27:03,240 --> 00:27:04,000 Speaker 7: top of all of that. 581 00:27:04,280 --> 00:27:07,359 Speaker 3: Where does that show up? You cited data right there, 582 00:27:07,400 --> 00:27:09,320 Speaker 3: But where are we going to start to see cracks form? 583 00:27:09,359 --> 00:27:10,720 Speaker 3: It sounds like you're a little concerned. 584 00:27:10,920 --> 00:27:14,399 Speaker 7: I'm definitely concerned. Were not only up twenty percent year 585 00:27:14,400 --> 00:27:16,639 Speaker 7: over year with corporate bankruptcies, we're up fifteen percent year 586 00:27:16,640 --> 00:27:19,640 Speaker 7: over year with household bankruptcies. So we're starting to see 587 00:27:19,640 --> 00:27:20,760 Speaker 7: that unravel as well. 588 00:27:20,960 --> 00:27:21,560 Speaker 5: I don't think that. 589 00:27:21,640 --> 00:27:25,160 Speaker 7: Earlier today, Jamie Diamond said that he expected increased defaults 590 00:27:25,160 --> 00:27:28,840 Speaker 7: going forward, and magically they disappeared with the wave of 591 00:27:28,880 --> 00:27:32,200 Speaker 7: one announcement. It doesn't work that way when credit markets 592 00:27:32,320 --> 00:27:36,560 Speaker 7: begin to come unglued and we have not seen, you know, 593 00:27:36,600 --> 00:27:39,240 Speaker 7: the insurance to protect against a default in investment grade. 594 00:27:39,240 --> 00:27:41,200 Speaker 7: It came down quite a bit today, but it certainly 595 00:27:41,240 --> 00:27:43,760 Speaker 7: didn't rally like the stock market. So we have to 596 00:27:43,760 --> 00:27:48,440 Speaker 7: be going cognizant of this massive leveraging up across corporate America, 597 00:27:48,640 --> 00:27:51,320 Speaker 7: across household balance sheets. The New York Fed told US 598 00:27:51,400 --> 00:27:54,240 Speaker 7: nine point seven million student loan bars or at risk 599 00:27:54,280 --> 00:27:56,240 Speaker 7: of having their FI go scores fall. There are a 600 00:27:56,280 --> 00:27:59,959 Speaker 7: lot of things going on right now, A miss again 601 00:28:00,440 --> 00:28:03,720 Speaker 7: continued cost cutting in corporate America. I continue to go 602 00:28:03,800 --> 00:28:06,760 Speaker 7: back to that because it is their obligation, it's their 603 00:28:06,800 --> 00:28:09,840 Speaker 7: obligation to shareholders, or it's their obligation to their family 604 00:28:09,840 --> 00:28:12,160 Speaker 7: if they run a dry cleaning company, to make sure 605 00:28:12,240 --> 00:28:14,640 Speaker 7: that they shore up their margins and stay in business. 606 00:28:14,680 --> 00:28:17,280 Speaker 5: Everybody's looking at their balance sheets right now, absolutely right 607 00:28:17,400 --> 00:28:21,879 Speaker 5: and rightly so exactly so, Danielle, do you then see that, Okay, 608 00:28:22,000 --> 00:28:24,640 Speaker 5: ninety day pause, ninety day extension. As you said, there's 609 00:28:24,640 --> 00:28:26,800 Speaker 5: still ten percent tariffs out there, But so are we 610 00:28:26,840 --> 00:28:30,879 Speaker 5: in limbo potentially for another ninety days unless something else 611 00:28:31,119 --> 00:28:31,600 Speaker 5: comes up. 612 00:28:31,800 --> 00:28:34,400 Speaker 7: So I think we're in relief, and then I think 613 00:28:34,440 --> 00:28:37,120 Speaker 7: that that relief is going to dissipate fairly quickly when 614 00:28:37,119 --> 00:28:40,520 Speaker 7: we realize how much we still don't know. We don't 615 00:28:40,800 --> 00:28:44,320 Speaker 7: I mean, you still hear Treasure Secretary Vessent talking tough 616 00:28:44,360 --> 00:28:47,240 Speaker 7: about Canada. We don't know what's going to happen in Mexico. 617 00:28:47,320 --> 00:28:50,520 Speaker 7: But by everything we're seeing from those two countries, pmis 618 00:28:50,640 --> 00:28:53,160 Speaker 7: they're in recession, right, So our neighbor to the north 619 00:28:53,200 --> 00:28:54,920 Speaker 7: and our neighbor to the south are both in recession. 620 00:28:54,920 --> 00:28:58,160 Speaker 7: I'm from the great State of Texas. If Mexico's in recession, 621 00:28:58,400 --> 00:29:00,960 Speaker 7: Texas is in recession, I guarantee you, because we're the 622 00:29:00,960 --> 00:29:04,200 Speaker 7: biggest exporting state and there's a ton of uncertainty that 623 00:29:04,280 --> 00:29:09,000 Speaker 7: continues to weigh on, especially the auto sector, but also lumber. 624 00:29:10,320 --> 00:29:14,200 Speaker 7: We need Canada's heavy sweet crude because our refineries don't 625 00:29:14,240 --> 00:29:16,480 Speaker 7: refine what we pull out of the ground, so we 626 00:29:16,600 --> 00:29:20,240 Speaker 7: need for that trade to continue, and we need resolution 627 00:29:20,680 --> 00:29:22,880 Speaker 7: closer to home first, I would say, so, if. 628 00:29:22,800 --> 00:29:25,520 Speaker 3: You were advising folks in the White House right now 629 00:29:25,560 --> 00:29:27,960 Speaker 3: on economic policy, how would you advise them? 630 00:29:29,320 --> 00:29:33,080 Speaker 7: I would say to stop saying that this is all negotiations, 631 00:29:33,960 --> 00:29:37,120 Speaker 7: because if it's negotiations, it's certainly not how negotiations are 632 00:29:37,160 --> 00:29:41,560 Speaker 7: done among adults. We have to recognize who our economic 633 00:29:41,680 --> 00:29:46,880 Speaker 7: allies are and we need to forge relationships going for 634 00:29:47,000 --> 00:29:50,840 Speaker 7: If China is the sworn enemy, so be it. But 635 00:29:51,000 --> 00:29:54,880 Speaker 7: why should there necessarily need to be collateral damage in 636 00:29:54,920 --> 00:29:56,960 Speaker 7: the form of the layoffs that we saw them out 637 00:29:56,960 --> 00:30:02,240 Speaker 7: of Canada last week, Why we harm thy neighbor. No, 638 00:30:02,600 --> 00:30:04,520 Speaker 7: I don't think that's how it's done. I think that 639 00:30:04,600 --> 00:30:07,280 Speaker 7: we need to have a little bit I'm going to 640 00:30:07,360 --> 00:30:09,720 Speaker 7: say this out loud, a little bit more bessent and 641 00:30:09,720 --> 00:30:10,680 Speaker 7: a little bit less Navarro. 642 00:30:12,200 --> 00:30:14,360 Speaker 5: Is that likely? Do you think based on what we got? 643 00:30:14,480 --> 00:30:14,640 Speaker 6: Oh? 644 00:30:14,680 --> 00:30:18,400 Speaker 7: I do think Besson has a more of President Trump's ear. 645 00:30:19,040 --> 00:30:23,440 Speaker 7: He does because I think Besson's besons initial wanting to 646 00:30:23,520 --> 00:30:27,560 Speaker 7: take a slower approach, wanting to have more caret less stick, 647 00:30:27,800 --> 00:30:30,920 Speaker 7: wanting to provide in numerous interviews that he did prior 648 00:30:30,960 --> 00:30:34,920 Speaker 7: to being confirmed, saying we need to give American corporations time. 649 00:30:35,360 --> 00:30:37,040 Speaker 7: If we want for them to re sure, we need 650 00:30:37,080 --> 00:30:39,080 Speaker 7: to give them time. And for Heaven's sake, we can't 651 00:30:39,080 --> 00:30:42,480 Speaker 7: beat them over the head for friend shoring because it's 652 00:30:42,480 --> 00:30:45,280 Speaker 7: what they were told to do. So you can't invest 653 00:30:45,320 --> 00:30:48,720 Speaker 7: billions of dollars in Mexican auto plants and then be 654 00:30:48,800 --> 00:30:51,600 Speaker 7: told that that's sorry, write it off, it's a sunk cost. 655 00:30:51,920 --> 00:30:53,000 Speaker 7: It doesn't work that way. 656 00:30:53,240 --> 00:30:54,920 Speaker 5: It's interesting because I think I'm trying to remember who 657 00:30:54,960 --> 00:30:57,400 Speaker 5: we who said that to us? Was it Maybe it 658 00:30:57,440 --> 00:30:59,560 Speaker 5: was Josh Wing Grove who said that I think best 659 00:30:59,640 --> 00:31:02,880 Speaker 5: Into and Lutnik were in the Oval office or in 660 00:31:02,920 --> 00:31:08,080 Speaker 5: the room when the President put out that social media 661 00:31:08,200 --> 00:31:12,320 Speaker 5: post talking about the ninety day pause. All right, so 662 00:31:12,480 --> 00:31:15,040 Speaker 5: walk us through. I don't know the next couple of days, 663 00:31:15,040 --> 00:31:17,520 Speaker 5: like how are you thinking about Lot's radar? 664 00:31:17,920 --> 00:31:20,520 Speaker 7: And I'm back to being data dependent, I really am 665 00:31:21,080 --> 00:31:25,200 Speaker 7: what data right now? Is the US economic weekly jobless 666 00:31:25,240 --> 00:31:28,640 Speaker 7: claims and you know what, not the CPI but the PPI. 667 00:31:29,120 --> 00:31:31,720 Speaker 7: I want to know how much input costs are rising 668 00:31:32,080 --> 00:31:35,360 Speaker 7: and therefore how much margins are at risk, because either 669 00:31:35,400 --> 00:31:39,840 Speaker 7: you pass those higher costs through or you are post 670 00:31:40,040 --> 00:31:43,160 Speaker 7: serial and you're closing two plants down, which was announced 671 00:31:43,160 --> 00:31:45,600 Speaker 7: earlier today, because Americans are only going You can't squeeze 672 00:31:45,600 --> 00:31:47,960 Speaker 7: blood from rock if their budget is their budget and 673 00:31:47,960 --> 00:31:50,040 Speaker 7: their income is their income. You know, this is why 674 00:31:50,520 --> 00:31:52,080 Speaker 7: you know we found out just a few weeks ago 675 00:31:52,160 --> 00:31:55,280 Speaker 7: that seventeen percent of existing home sales in twenty twenty 676 00:31:55,320 --> 00:31:58,360 Speaker 7: four were to multi generational households, right, because people are 677 00:31:58,360 --> 00:32:00,959 Speaker 7: doing what they can to live within budgets, even if 678 00:32:00,960 --> 00:32:03,360 Speaker 7: it's trading down to a generic brand and you can 679 00:32:03,400 --> 00:32:05,520 Speaker 7: no longer buy that post box that you'd prefer to 680 00:32:05,560 --> 00:32:09,760 Speaker 7: buy life is light. We have to live within our budgets, I. 681 00:32:09,720 --> 00:32:11,840 Speaker 3: Think, you know, and we're going to be talking about 682 00:32:11,920 --> 00:32:14,640 Speaker 3: China in a second. I said we'd come back to China. Yeah, 683 00:32:14,680 --> 00:32:17,160 Speaker 3: after we talked with you a little bit. I think 684 00:32:17,240 --> 00:32:19,280 Speaker 3: that's still for a lot of investors and for a 685 00:32:19,320 --> 00:32:22,000 Speaker 3: lot of observers, the big question. 686 00:32:21,720 --> 00:32:24,000 Speaker 7: Mark, well, it certainly is. I mean, you know, quietly 687 00:32:24,080 --> 00:32:27,800 Speaker 7: we announced that they were a currency manipulator. They might 688 00:32:27,880 --> 00:32:32,000 Speaker 7: or might not have challenges with trying to prevent flight 689 00:32:32,160 --> 00:32:33,560 Speaker 7: out of the country. 690 00:32:33,600 --> 00:32:35,080 Speaker 3: So I'll ask you the same question I asked Joe 691 00:32:35,080 --> 00:32:38,200 Speaker 3: Wisenthal earlier, which is what's the off ramp or the 692 00:32:38,240 --> 00:32:41,920 Speaker 3: de escalation for China? Because every day it just seems 693 00:32:41,960 --> 00:32:46,000 Speaker 3: like more tit for tat, more retaliatory tariffs, and more 694 00:32:46,040 --> 00:32:46,920 Speaker 3: tariffs being imposted. 695 00:32:46,960 --> 00:32:49,160 Speaker 5: It's a dangerous game of chicken, right, it really is. 696 00:32:49,240 --> 00:32:52,240 Speaker 7: And my grandmother Di Martino from Connecticut, may she rest 697 00:32:52,240 --> 00:32:55,120 Speaker 7: in peace, would say that you were dealing with two calabress, 698 00:32:55,200 --> 00:32:59,120 Speaker 7: two men with very thick heads and huge egos. And 699 00:32:59,160 --> 00:33:03,240 Speaker 7: that's why again my greatest concern, why I'll be watching Asia, 700 00:33:03,360 --> 00:33:06,560 Speaker 7: why I'll be watching you know, the offshore you won 701 00:33:06,720 --> 00:33:09,320 Speaker 7: was up about a half percentage point before this announcement 702 00:33:09,360 --> 00:33:12,480 Speaker 7: closed down. I'll be watching that pig set. I'll be 703 00:33:12,560 --> 00:33:15,920 Speaker 7: watching to see if we're going to have a continued escalation, 704 00:33:16,000 --> 00:33:17,880 Speaker 7: because you know what, the last time we escalated, they 705 00:33:17,880 --> 00:33:19,040 Speaker 7: went right back at us. 706 00:33:20,640 --> 00:33:22,920 Speaker 5: What do you make of when the President says China 707 00:33:22,920 --> 00:33:24,920 Speaker 5: doesn't know how to go about it, China wants to 708 00:33:24,960 --> 00:33:26,920 Speaker 5: make a deal, it doesn't know how to go about it. 709 00:33:27,000 --> 00:33:31,240 Speaker 7: Great, So you you you basically stick a fork in 710 00:33:31,280 --> 00:33:32,960 Speaker 7: the eye of somebody who doesn't want to lose face. 711 00:33:34,760 --> 00:33:37,560 Speaker 5: I mean, what do you mean, Well, it's all about 712 00:33:37,600 --> 00:33:38,720 Speaker 5: losing face. Okay? 713 00:33:39,440 --> 00:33:42,120 Speaker 7: So and and by the way, so was. 714 00:33:42,160 --> 00:33:46,360 Speaker 5: Retaliation by China losing? Was it that that was keeping face? 715 00:33:46,440 --> 00:33:48,200 Speaker 5: But but for China? 716 00:33:48,400 --> 00:33:48,760 Speaker 2: Yes? 717 00:33:48,760 --> 00:33:50,560 Speaker 5: But do you think the president was surprised by that? 718 00:33:50,720 --> 00:33:54,680 Speaker 5: I mean, I know, we're just kind of or do 719 00:33:54,680 --> 00:33:56,440 Speaker 5: you think he expected it in terms of this game 720 00:33:56,480 --> 00:33:57,000 Speaker 5: back and forth. 721 00:33:57,000 --> 00:33:59,560 Speaker 7: I certainly don't think you should have been surprised by it. 722 00:33:59,600 --> 00:34:02,720 Speaker 7: But then we rereramped it up today now it's one 723 00:34:02,840 --> 00:34:06,360 Speaker 7: hundred and twenty five percent. At some point, regardless of 724 00:34:06,400 --> 00:34:09,480 Speaker 7: what happens with China's neighbors, if you take the Chinese 725 00:34:09,520 --> 00:34:12,880 Speaker 7: economy down to its knees. It will affect its neighbors' 726 00:34:12,880 --> 00:34:13,719 Speaker 7: economies as well. 727 00:34:15,800 --> 00:34:18,880 Speaker 5: Wh okay, we're going to get into the Chinese economy 728 00:34:18,880 --> 00:34:21,360 Speaker 5: in just a moment. Thank you so much, such a pleasure. 729 00:34:21,440 --> 00:34:26,120 Speaker 5: Danielle Di Martino, Booth, CEO and chief strategists of Qi Research, 730 00:34:26,200 --> 00:34:29,120 Speaker 5: QI Research, Right Research, Qui Research, former advisor, as we 731 00:34:29,160 --> 00:34:31,479 Speaker 5: mentioned earlier too, to the President of the Dallas Fed. 732 00:34:32,320 --> 00:34:37,200 Speaker 2: This is the Bloomberg Business Week podcast, available on Apple, Spotify, 733 00:34:37,280 --> 00:34:41,040 Speaker 2: and anywhere else you get your podcasts. Listen live weekday 734 00:34:41,040 --> 00:34:45,080 Speaker 2: afternoons from two to five pm Eastern on Bloomberg dot com, 735 00:34:45,120 --> 00:34:49,040 Speaker 2: the iHeartRadio app, tune In, and the Bloomberg Business app. 736 00:34:49,239 --> 00:34:52,160 Speaker 2: You can also watch us live every weekday on YouTube 737 00:34:52,239 --> 00:34:54,400 Speaker 2: and always on the Bloomberg terminal.