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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
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Speaker 2: Terminal and the Bloomberg Business app. Black Rocks Kate Moore
Speaker 2: saying this, after a healthy pullback inequities over the last
Speaker 2: few weeks, the pressure on earnings and constructive guidance is
Speaker 2: particularly high. The biggest right tail risk for twenty twenty
Speaker 2: four is that earnings come in much stronger than current forecast.
Speaker 2: Kate is with us around the table.
Speaker 3: Kate, good mornch Good morning.
Speaker 2: It's been too long. It's great to see you in
Speaker 2: person here in New York. Let's talk about that upside
Speaker 2: potential on the big tech names over the next week.
Speaker 2: Ac count great is it?
Speaker 4: So?
Speaker 5: I think the big thing to watch here is not
Speaker 5: what happened in the first quarter. I mean, we want
Speaker 5: to see some monetization on AI, We want to see
Speaker 5: constructive guidance on AI. But I really think it's going
Speaker 5: to be the tone for a management. You guys were
Speaker 5: talking about Tesla a moment ago, and I think this
Speaker 5: was the critical thing turning the stock price there is
Speaker 5: that it sounds like there's a plan, and I think
Speaker 5: there's been a lot of good news priced into a
Speaker 5: lot of the big tech companies. But this is a
Speaker 5: chance to really kind of show me what does the
Speaker 5: rest of twenty twenty four look like, how are we
Speaker 5: thinking about AI spending, what does customer demands look like?
Speaker 3: And then we can go from there.
Speaker 2: Do you say we need a c sweet therapy session
Speaker 2: on anix cos Yeah, we.
Speaker 5: Need to see a constructive happy face from all of
Speaker 5: these leaders.
Speaker 3: By the way, a funny bit.
Speaker 5: We've talked about this before, but we always want to
Speaker 5: listen to CEOs and say they're kind of the strategists,
Speaker 5: are the ones thinking big picture. But it's also really
Speaker 5: really important to listen to the CFOs who tend to
Speaker 5: get really down into the dirt. And so I'm going
Speaker 5: to be listening to both for both the strategy as
Speaker 5: well as the hard data well happy talk.
Speaker 1: Work for the likes of Meta or even Alphabet.
Speaker 5: Given how much the shares have gained so far this year,
Speaker 5: I think we've taken some pressure off of those stocks
Speaker 5: in recent weeks, as you know, some prices have come down,
Speaker 5: and we've seen kind of growth in general as a
Speaker 5: factor fade a little bit since the end of the
Speaker 5: first quarter. That said, they really do need to deliver.
Speaker 3: I think these are well owned names. They are well
Speaker 3: loved names.
Speaker 5: They are names that are expected to really lead the market,
Speaker 5: not just through twenty twenty twenty four, but through the rest.
Speaker 3: Of this cycle.
Speaker 5: So I think it's possible for them to get people excited,
Speaker 5: but we recognize that they're well held, well owned going
Speaker 5: into reporting.
Speaker 1: Moving outside of big tech, your idea here is a
Speaker 1: really fascinating one that the biggest risk is upside risk,
Speaker 1: right that we actually get better than expected earnings data
Speaker 1: and that could fuel a rally among a lot of
Speaker 1: pessimism still out there. Why do you think that's the
Speaker 1: biggest upside risk at a time where it seems like
Speaker 1: there's still a lot of bullish sentiment right now.
Speaker 5: So I think it's about the mechanics of how we
Speaker 5: get to the bottom line that really matter here, and
Speaker 5: in this case, I want everyone to have some confidence
Speaker 5: in US companies doing the right thing, continuing to manage
Speaker 5: their cost continuing to manage their labor force, thinking really
Speaker 5: long and hard about where they're putting their dollars in
Speaker 5: each businesses, so that they can really deliver on earnings
Speaker 5: even an environment where revenue growth is just okay. And
Speaker 5: I think we've heard that from some of the companies
Speaker 5: that have reported so far. It's really the bottom line
Speaker 5: I want to see companies deliver on. And we saw
Speaker 5: actually since the earnings recession ended that this focus on
Speaker 5: cost control and this focus on delivering earnings has been
Speaker 5: front and center.
Speaker 1: This doesn't speak of some sort of screaming hot economy though.
Speaker 5: Yeah, I don't think we want a screaming hot economy
Speaker 5: for a variety of different reasons. We want a solid economy,
Speaker 5: we want solid demand, we want rates and to be stable,
Speaker 5: and we want certainty or a light least lack of
Speaker 5: uncertainty when it comes to policy. I think that's an
Speaker 5: environment that corporates are looking to kind of capitalize on
Speaker 5: and that they do well on and one thing we're
Speaker 5: not mentioning here is the election year, and of course
Speaker 5: the uncertainty around the election outcome and what that might
Speaker 5: mean for policy is weighing on companies a little bit.
Speaker 5: So if we have stability in these other areas and
Speaker 5: growth and demand and policy rates are relatively stable, I
Speaker 5: think that gives them some confidence to continue to do
Speaker 5: these cost cutting and really managing their margins.
Speaker 6: How are CEOs thinking about the election? Imagine on these
Speaker 6: earnings call they get asked about it, and we have
Speaker 6: to really walk a very fine line, be very careful.
Speaker 5: Yeah, I mean, I think that they're being deliberately evasive
Speaker 5: because they don't really know what to expect. And we
Speaker 5: know that there's a huge amount of different policy outcomes
Speaker 5: for both administrations depending on who wins in November, because
Speaker 5: a lot is going to depend on Congress. So they
Speaker 5: don't want to bank too much one way or another
Speaker 5: on support or on challenges. They're just trying to kind
Speaker 5: of manage over the next few quarters.
Speaker 6: But given the fact that we do know who these
Speaker 6: two individuals are, Yeah, they're basically two incumbents up against
Speaker 6: each other. Does that help executives plan for the future.
Speaker 5: I think we understand big picture some of the main
Speaker 5: tenets of each of these policy programs. That said, it's
Speaker 5: really hard to say what the details are going to be,
Speaker 5: what the timing of any changes might be. And I'm
Speaker 5: going to go back to this Congress point again. There's
Speaker 5: a limitation to how much an executive can get done,
Speaker 5: a chief executive in this case, without.
Speaker 3: Support from Congress.
Speaker 5: So I'm going to be watching, frankly, the Senate and
Speaker 5: House races very closely going into the fall.
Speaker 1: Which is the reason why a lot of people are
Speaker 1: looking for some sort of split in terms of Republican
Speaker 1: and Democrat on the different sides of the government. I
Speaker 1: am curious about what you said, which is at least
Speaker 1: stable rates.
Speaker 3: Which raises this question.
Speaker 1: If the Fed holds rates at this level, is that
Speaker 1: fine as long as there isn't any volatility, that that's
Speaker 1: going to be enough to potentially fuel a pretty significant
Speaker 1: rally in equities.
Speaker 5: I think stability and certainty are things that equity markets love,
Speaker 5: right and when it comes to rates, would be nice
Speaker 5: if we saw some raycots, sure, but we also know
Speaker 5: that eighty percent of US large cap debt is long
Speaker 5: term fixed.
Speaker 3: We don't really have to worry about this.
Speaker 5: In twenty twenty four or even the beginning of twenty
Speaker 5: twenty five. Well, we do want to kind of, you know,
Speaker 5: be able to incorporate is you expectations for the next
Speaker 5: couple quarters and if we're constantly adjusting and it's will
Speaker 5: the FED be cutting or will they not? I think
Speaker 5: that holds back some decisions that corporate leaders need to
Speaker 5: make which would be supportive for growth. So stability is
Speaker 5: better than any outcome, I would.
Speaker 1: Say, Well, to Enry's point, it's hard to talk about
Speaker 1: stability at a time where we can't really come up
Speaker 1: with any clear narrative. When we're talking about the potential
Speaker 1: for tariffs and we're talking about geopolitical risk. I mean,
Speaker 1: how much does that sort of give you some pause
Speaker 1: in terms of the degree of bullishness and where you're
Speaker 1: looking to hedge just on the margins.
Speaker 5: Well, I think the thing I'm watching in regards to
Speaker 5: that uncertainty, the geopolitical uncertainty, and perhaps the policy the
Speaker 5: government policy uncertainty is what happens to capital expenditure, and
Speaker 5: particularly if companies just go through with regular maintenance necessary
Speaker 5: capex and hold off on real expansionary Capex until they
Speaker 5: get through the US election, But of course we know
Speaker 5: it's not just the US election. They're elections all over
Speaker 5: the world of this year, and frankly, you know, US
Speaker 5: companies are mostly or many of the large cab ones
Speaker 5: are geographically dispersed, right, So they have big businesses in
Speaker 5: many different regions, so policies in each of those regions
Speaker 5: will affect their decisions. So I'm kind of waiting to
Speaker 5: see how do they talk about capital expenditure. Are they
Speaker 5: waiting to get more clarity on the political side, or
Speaker 5: do they see such a long term secular tailwind to
Speaker 5: whatever this project is that they're willing to spend despite
Speaker 5: the uncertainty.
Speaker 1: Or international companies better hedged or worse hedged right now,
Speaker 1: given the fact that they do face different political regimes
Speaker 1: and frankly different economic realities, well, it's.
Speaker 5: Very very challenging to manage a global multinational corporation. Regulations here,
Speaker 5: political change, there, change in demand, consumer behavior.
Speaker 3: So I get all of that.
Speaker 5: I like the geographic diversity though of these multinationals. I
Speaker 5: think that's going to really lend strength to them through
Speaker 5: multiple parts of the business cycle and through all these elections.
Speaker 2: You like Japan. Can we finish on Japan?
Speaker 3: We can?
Speaker 2: Does the effects market matter? Sort of preoccupied with the
Speaker 2: prospect of breaking through one point fifty five, which with
Speaker 2: about that far away from doing Does that matter?
Speaker 5: I mean it matters, But I think there's more on
Speaker 5: the ground that we like about the Japanese.
Speaker 2: Most so we hear can you come for the details?
Speaker 3: Yeah, I mean I think that we're seeing a change
Speaker 3: in consumption. I think, for the.
Speaker 5: First time in a very long time, over ten years,
Speaker 5: a real shift, and how corporates are being forced to
Speaker 5: behave which is much more shareholder friendly, you know what.
Speaker 5: I like to see more Japanese individual investors buy into
Speaker 5: the market.
Speaker 3: Absolutely, we don't want this just to.
Speaker 5: Be a market that's participated in by international investors. But
Speaker 5: I think both the macro side and some of the
Speaker 5: structural bits in the market are quite supportive.
Speaker 3: The currency could be supportive as well, but.
Speaker 5: I don't want to base my thesis on that because frankly,
Speaker 5: I don't have a great track record on FX trading.
Speaker 2: Yeah, FX is difficult, but what I hear from you
Speaker 2: is this is not just some sort of short term
Speaker 2: tactical trade. This is fundamental that's longer term.
Speaker 5: We believe it's fundamental, and so we're buying really high
Speaker 5: quality companies that benefit both from things like you know,
Speaker 5: the the macro demand global So this is where geographic
Speaker 5: diversity really helps, as well as companies that are going
Speaker 5: to kind of come up in the market as they
Speaker 5: make these big corporate changes.
Speaker 2: Okay, this was awesome on the dates of this morning,
Speaker 2: the dates of tomorrow and going into the FED next week,
Speaker 2: and please to say that with us is Tiffany Wildeck
Speaker 2: of Pimco. Tiffany, wonderful to catch up with you again.
Speaker 2: Just had a bit of economic datesa this morning. Going
Speaker 2: get into GDP tomorrow. What are you expecting from the
Speaker 2: first quarter and how do you think everything we've seen
Speaker 2: in the first quarter of this year will shape the
Speaker 2: conversation next week.
Speaker 7: Yeah, so we're looking for a pretty strong report. I
Speaker 7: think the Bloomberg consensus, as you mentioned, is two and
Speaker 7: a half, but our lene as well is on the
Speaker 7: higher side of that. And I think the more important
Speaker 7: thing that we'll be focused on, you know, is just
Speaker 7: the core measure of GDP final domestic demand growth which
Speaker 7: economists call it.
Speaker 3: That's going to be incredibly strong.
Speaker 7: That strips out the volatyle trade in inventories categories, and
Speaker 7: that looks like that's going to be above three, you know.
Speaker 7: And the thing that we've been really highlighting and focusing
Speaker 7: in is that will be the third quarter in a
Speaker 7: row that we've gotten core GDP growth of above three,
Speaker 7: and that's something that we haven't seen since twenty fourteen,
Speaker 7: absent the pandemic related rebounds. So all of this is
Speaker 7: to say is that GDP in the United States is
Speaker 7: incredibly strong, and that strength has continued after twenty twenty three.
Speaker 7: We've seen strong momentum going into twenty twenty four. All
Speaker 7: of that suggests that inflationary pressures in the economy, you know,
Speaker 7: we're running, we're running at a hot economy here, and
Speaker 7: it's not really consistent with inflationary pressures further moderating.
Speaker 2: Do you think that we'll shape the language and the
Speaker 2: statement next Wednesday when we open that up at two
Speaker 2: pm Eastern time, It's that going to look any different?
Speaker 8: Yeah?
Speaker 7: I mean, I certainly I think you could see some
Speaker 7: changes to the statement, But I think what markets will
Speaker 7: be more focused on is what Powell says in the
Speaker 7: press conference and his you know, in the past. At
Speaker 7: least Powell has made reference to the SEP projections prior
Speaker 7: SEP projections at a non SUP meeting and given us
Speaker 7: some hints on how he thinks they could change. And
Speaker 7: we think that's potentially what he could do now set
Speaker 7: the stage for more revisions to the SEP that we're
Speaker 7: going to get in June, you know, say that the
Speaker 7: inflation forecasts are likely going to have to be revised up,
Speaker 7: and then as a result of.
Speaker 3: That sort of hint at the.
Speaker 7: Fact that you could take out maybe one or even
Speaker 7: two cuts in the forecast for twenty twenty four.
Speaker 1: Tiffany, I hate to do this.
Speaker 3: I feel kind of a little bit dirty doing this, but.
Speaker 1: Is this a pivot to the pivot that we got
Speaker 1: in December?
Speaker 7: Well, it does seem like in some sense the pivot
Speaker 7: party from December is over, you know, and I think
Speaker 7: that'says a result of the inflation prints that we've seen,
Speaker 7: you know, and again, just the economy is just incredibly strong,
Speaker 7: you know. We have argued you know that, you know,
Speaker 7: the so called last mile on the inflation in the
Speaker 7: inflation race is going to be the toughest, you know,
Speaker 7: and that's just because we have a strong economy, labor
Speaker 7: markets are tight, and that and that just is likely
Speaker 7: to result in inflation hanging above their target. And really
Speaker 7: the question is is, you know, are they okay with that?
Speaker 7: And it seems like, you know, there is some threshold
Speaker 7: maybe we think it's three percent where they won't be
Speaker 7: okay with that, but you know, above three it's okay.
Speaker 7: But again, you know, it's it's a bit you know,
Speaker 7: monetary policy is a bit of an art and a
Speaker 7: science here, so you know, I think the art is
Speaker 7: that you know, they don't really need to be cutting,
Speaker 7: they shouldn't be in a rush, and so really it's
Speaker 7: up to them to choose when they start to do it.
Speaker 1: You said, the pivot party is over, and when people
Speaker 1: were talking about the pivot party, it was including.
Speaker 3: A real rally in risk assets.
Speaker 1: So I wonder, okay, pivot party is over, the earnings
Speaker 1: party just getting started. Is this basically an economy that
Speaker 1: can handle where we're at right now? And that's basically
Speaker 1: what we're hearing from a lot of people around this table.
Speaker 7: Yeah, I mean it's certainly if you not only obviously,
Speaker 7: if you the equity market. We look at equity risk
Speaker 7: premiums and even though you've seen some weakness in the
Speaker 7: equity market, you know, the additional yield over treasuries, earning
Speaker 7: ziel that you get over treasuries is still looking okay.
Speaker 7: There are still looking rather narrow in the equity market.
Speaker 7: So from evaluation perspective, you know, equities you know, still look.
Speaker 8: Somewhat rich here.
Speaker 7: But but nevertheless, I would just say, if we look
Speaker 7: at the GDP data, the data that I focus on more,
Speaker 7: we're seeing a reacceleration in cyclical sectors of the economy,
Speaker 7: that is, residential investment, you know, even in cap backs
Speaker 7: and things like that. Corporate profits, Nippu corporate profits have
Speaker 7: have reaccelerated as well. And this is at these high
Speaker 7: level of interest rates. So it does seem like the
Speaker 7: peak effects of the monetary policy drags, you know, they
Speaker 7: are increasingly behind us. And that suggests that, yeah, maybe
Speaker 7: the economy can withstand rates at these higher levels.
Speaker 1: Which raises this question how much do financial conditions frankly,
Speaker 1: how rich stocks are, how well bid credit markets are,
Speaker 1: how much does that influence how long inflation can be
Speaker 1: persistently above the FEDS target.
Speaker 7: Yeah, I think I think overall, you know, the federal
Speaker 7: reserve where monetary policy works through not only the policy rate,
Speaker 7: but but a broader context of financial.
Speaker 3: Conditions, you know.
Speaker 7: And the point that we've been making lately is that
Speaker 7: you need financial conditions to tighten here in order to
Speaker 7: cool the economy down. And the question is how does
Speaker 7: the FED engineer that. Now, partly they can engineer that
Speaker 7: through just staying on hold. The bond market is still
Speaker 7: pricing in cuts, So the longer they push that out
Speaker 7: stay on hold, you know, that should sort of mechanically
Speaker 7: tighten financial conditions. And I think that's what the FED
Speaker 7: will try to do and just see if that's enough,
Speaker 7: you know, and maybe rates on hold longer will get
Speaker 7: them that financial conditions tightening that they need in order
Speaker 7: to cool things down a bit here, you know. But
Speaker 7: of course if not, then they'll have to find other
Speaker 7: ways to try to tighten a little bit more.
Speaker 6: I know we're all focused on inflation this week, but
Speaker 6: I want to ask you about the jobs market because
Speaker 6: in your note you talk about elevated immigration boosting boats
Speaker 6: supply and demand. What happens if we still don't have
Speaker 6: those same levels of immigration, Whether or not it's executive
Speaker 6: order that Henrietta Trace says to be coming out of
Speaker 6: the Biden administration or a whole new paradigm next year,
Speaker 6: if we get an entire different administration.
Speaker 7: Yeah, so that will result in growth slowing for sure,
Speaker 7: because you know, because immigration boosts both supply and demand,
Speaker 7: the effects on inflation are are more nuanced, we would argue,
Speaker 7: and they're they're less clear. So you know, what we
Speaker 7: could see is if you have immigration that is falling
Speaker 7: without a lot of asylum seekers cross you know, across
Speaker 7: our borders over the last couple of years, we estimate
Speaker 7: that that's contributed around point five fifty basis points to
Speaker 7: Hunter basis points to GDP growth. So if you don't
Speaker 7: get that, we will absolutely see growth slowing. But in
Speaker 7: terms of the inflationary effects, you know, that's certainly less clear.
Speaker 7: You know, now there are folks that are in the
Speaker 7: economy now, they have workers permits, they're waiting for their
Speaker 7: asylum hearings. You know, I guess if there's policies to
Speaker 7: try to you know, make them wait in Mexico or
Speaker 7: other places like that, you know that that growth drag
Speaker 7: will be even more you know, but it'll just we'll
Speaker 7: just have to see how that plays out.
Speaker 2: It's infinity. As we were talking and we're talking about
Speaker 2: US strength, how pronounced there is, how much longer it
Speaker 2: could last. I was just thinking of your sycl care
Speaker 2: outlook that you helped lead and readies through that note,
Speaker 2: the amount of divergence that we can expect. What about
Speaker 2: everybody else? What is the growth back drop going to
Speaker 2: look like the US versus the rest of the world.
Speaker 7: Yeah, well, well, ultimately, you know, we we still think that,
Speaker 7: you know, there is some durability in this US exceptionalism story.
Speaker 7: You know that started in twenty twenty three, you know,
Speaker 7: and really the factors that we believe contributed to that
Speaker 7: was just the fact that the US government fiscal stimulus
Speaker 7: during the pandemic was much larger than it was in
Speaker 7: other developed markets. We've also seen you know what I
Speaker 7: call less mean reversion in our federal government fiscal deficits.
Speaker 7: Since then, they've been kind of structurally hanging around six
Speaker 7: to seven percent. Everybody else has managed to get, you know,
Speaker 7: more fiscal retrenchment. The other thing for the United States
Speaker 7: is that we've seen less passed through of monetary policy,
Speaker 7: you know, via the interest rates that people actually pay.
Speaker 7: We have a large stock of mortgages that are you know,
Speaker 7: low duration, low interest pay, long duration, low interest paying.
Speaker 7: That's just not you know, the consumer is not feeling
Speaker 7: really the effects of higher mortgage rates in the United States.
Speaker 3: They are elsewhere.
Speaker 7: So we think these things can can continue, you know,
Speaker 7: at least through our cyclical horizon. You know. I think
Speaker 7: structurally the US economy is also just delivering better productivity
Speaker 7: growth than some of our peers, and I think that
Speaker 7: can certainly continue, you know, versus Europe, for example, where
Speaker 7: they've had you know, a pretty big energy shock that's
Speaker 7: made them somewhat less competitive. Obviously, you know, weakness in
Speaker 7: China's also had a bigger impact on Europe. You know.
Speaker 7: But all of these things in our minds can you know,
Speaker 7: can contribute to this US exceptionalism story, and eventually, you know,
Speaker 7: that's also going to create divergence and monetary policy.
Speaker 1: We think.
Speaker 2: Tiffinitely enjoyed this and enjoyed the not as well. Tiffany
Speaker 2: Wolding there of Pincott to trace a Veder Parmas joined
Speaker 2: us now to break this down head before we race
Speaker 2: off into the detail. I just want to sit on
Speaker 2: this just for a moment. We've talked so much about
Speaker 2: the division down in Washington. Only a few months ago,
Speaker 2: some people thought the prospect of this happening was almost unthinkable.
Speaker 2: Just how united did Washington become on this issue in
Speaker 2: the last few months.
Speaker 4: They gained i want to say, eight votes since February
Speaker 4: from the Republican Party who had been so opposed providing
Speaker 4: the A to Ukraine, Israel, and Taiwan. This is really
Speaker 4: a case of members wanted to be on the right
Speaker 4: side of history. You know, last week when Speaker Johnson said, Hey,
Speaker 4: go into the sitroom, look at all of the foreign intel,
Speaker 4: look at the data that we have backing this up,
Speaker 4: and why we need A to Ukraine.
Speaker 8: We need America to be strong against Putin and she
Speaker 8: and Iran.
Speaker 4: And that is exactly what the members decided to ultimately deliver.
Speaker 4: I think this is a testament to the foreign policy
Speaker 4: arm of Joe Biden's career in the Senate as President.
Speaker 8: Obviously Chuck Schumer.
Speaker 4: But in no small account it's Mitch McConnell who wants
Speaker 4: this to be his legacy, which is something we've been
Speaker 4: hearing from staff for seven months since the October seventh
Speaker 4: attacks in Israel and well before that in Ukraine.
Speaker 6: But Henrietta, this got through with our border policy, which
Speaker 6: Republicans are basically promising their caucus that we would make
Speaker 6: sure we would do. Where does that leave that potential
Speaker 6: legislation or is this just one hundred percent become an
Speaker 6: election issue and no one in Congress is going to
Speaker 6: work on it until maybe next year.
Speaker 4: Congress is definitely not going to be able to do
Speaker 4: anything on the border. Republicans had their chance, they decided
Speaker 4: it wasn't good enough. They let the perfect be the
Speaker 4: enemy of the good and all the cliches that we
Speaker 4: hear from Lindsay Graham repeatedly on issues like this, and
Speaker 4: we haven't passed immigration reform in decades. I still remember
Speaker 4: twenty thirteen when we came so close. They do not
Speaker 4: have the ability to get to yes on immigration. But
Speaker 4: the administration is planning a series of executive orders on
Speaker 4: border policy, which we'll see potentially as early as next week.
Speaker 4: So I expect that to be the bulk of what
Speaker 4: we do on foreign policy, excuse me, on border security
Speaker 4: in this Congress, and.
Speaker 6: Of course that's going into the election. We have a
Speaker 6: new poll out this morning which shows that Biden bumpy
Speaker 6: head following the state of the Union has evaporated. He
Speaker 6: really only has control right now with Michigan. And it
Speaker 6: continuously comes back to the economy, especially inflation. What is
Speaker 6: the messaging from the White House going to be because
Speaker 6: it's not landing on voters.
Speaker 4: You know, the economy has been a weak point for
Speaker 4: President Biden for many years now. He one thing I'd
Speaker 4: really point into into your polls, which I think have
Speaker 4: an incredible margin of error just one percent, you know,
Speaker 4: speaking to the testament of how thorough your polls are
Speaker 4: of the.
Speaker 8: Swing states, Michigan is an interesting one. Obviously.
Speaker 4: President Biden has made huge efforts to get with the
Speaker 4: Union groups on that. He got another endorsement today, But
Speaker 4: Kennedy did get on the ballot in Michigan, which is
Speaker 4: potentially going to be a problem for the Biden team
Speaker 4: and the Trump team. But when it comes to the economy,
Speaker 4: the president has had an underwater darth with women voters.
Speaker 8: Female voters specifically because.
Speaker 4: Of their exposure to inflation and the cost of household
Speaker 4: goods and gas prices, which are a disproportionate share of
Speaker 4: where money is spent in America from the women of
Speaker 4: the household, and that delta is potentially being superseded by
Speaker 4: the abortion issue, which for the first time in your poll,
Speaker 4: is now a major issue of very important to a
Speaker 4: majority of voters in those swing states that includes Democrats, independence,
Speaker 4: and what we saw from twenty twenty two. If we
Speaker 4: want to learn from something beyond just the polls, the
Speaker 4: actual boots on the ground, that issue has a history
Speaker 4: of superseding even the economic issues and inflation, as we
Speaker 4: saw in twenty twenty two when inflation was even higher
Speaker 4: at nine point one percent. So I do think that
Speaker 4: it is going to be a situation where Biden keeps
Speaker 4: having to tout the state of the US economy, which
Speaker 4: is by all accounts strong, which is why the Fed
Speaker 4: is struggling to cool it enough to bring inflation down,
Speaker 4: but really getting that message across I think something that's
Speaker 4: occurring as they're trying to two step it with abortion.
Speaker 4: I'd like to see where immigration falls in the polls
Speaker 4: when I get a chance to read a little deeper
Speaker 4: into it. That's also something Republicans a lot of season,
Speaker 4: But the economy continues to be paramount.
Speaker 1: Henry, we were saying that now that this ninety five
Speaker 1: billion dollar bill was passed, there's a question of what next,
Speaker 1: what gets done before the election? Anne Marie Well said
Speaker 1: electioning will probably get done, not.
Speaker 3: A whole lot else.
Speaker 1: You talked about the potential for some sort of single
Speaker 1: executive actions on the border issues, What about tariffs?
Speaker 3: What about other.
Speaker 1: Issues that might come to the four including from the
Speaker 1: FTC that very much are in line.
Speaker 3: With what Biden has been talking about.
Speaker 4: Oh yeah, I'm finally expecting for tariffs and trade to
Speaker 4: be front and center. Ambassador Tie was on Capitol Hill
Speaker 4: yesterday last week in the House on the Senate side,
Speaker 4: and there were some major announcements. Three times higher steel tariffs,
Speaker 4: which is only about two percent of US imports, so
Speaker 4: don't expect that to be a major mover for steel
Speaker 4: prices in the US, But directionally and from a sort
Speaker 4: of messaging standpoint on China, very important in a new
Speaker 4: section three oh one investigation into shipbuilding, which is an
Speaker 4: area that the United States is way behind on in
Speaker 4: China dominates with and then a coordinated effort with Mexico
Speaker 4: potentially also Canada via the new USMCA that inveastamdor Tie
Speaker 4: was integral and getting past during the last administration, could
Speaker 4: be used to look into electric vehicles, their import from
Speaker 4: China on the components side, and sort of preemptively getting
Speaker 4: in front of that entire sector. So I think a
Speaker 4: lot of activity on trade. And then of course we
Speaker 4: are eagerly awaiting a conclusion of the Section three oh
Speaker 4: one review, which covers the three hundred and seventy billion
Speaker 4: dollars worth of tires that are currently in place, and
Speaker 4: by the end of next month, Investment Tide will announce
Speaker 4: which and whether any exclusions that we're agreed to in
Speaker 4: the last year will be extended. So lots of movement
Speaker 4: on the trade front. But to your point on Congress,
Speaker 4: don't expect anything.
Speaker 8: They're going to be gone campaigning.
Speaker 6: For the rest of the year when it comes to
Speaker 6: trade front. You know, you mentioned steel. I think Pennsylvania.
Speaker 6: You mentioned potential evs on Chinese terror, So I think
Speaker 6: of Michigan. What lever could Biden pull before the election
Speaker 6: to short votes in Wisconsin if he has to keep
Speaker 6: the blue wall, which Mario Parker colleague in Washington says,
Speaker 6: he has to keep the blue wall to win, you.
Speaker 8: Have to keep the blue wall.
Speaker 4: You really want to see the heartening part of the
Speaker 4: data for the Biden team in your poll this morning
Speaker 4: is Michigan, where he continues to maintain his lead even
Speaker 4: though he's underwater everywhere else. I would also say the
Speaker 4: primary vote in Pennsylvania last night is really interesting. Nikki Haley,
Speaker 4: who hasn't been on the ticket for months now, got
Speaker 4: seventeen percent of the vote. So I think what Biden
Speaker 4: is going to do is try to continue moving forward
Speaker 4: with the steel workers.
Speaker 8: Again.
Speaker 4: That three times higher steel tire is something that he
Speaker 4: is calling for that speaks.
Speaker 8: Directly to the steel workers.
Speaker 4: And what we know about the unions the team stirs
Speaker 4: the steel workers and all those groups is that they
Speaker 4: will go to the mat to get their two hundred
Speaker 4: and fifty thousand members in any individual union to.
Speaker 8: Vote in the direction that they're advocating for.
Speaker 4: So I think that Biden is really taking that labor
Speaker 4: message to heart, which is an integral in Pennsylvania, Wisconsin,
Speaker 4: Michigan and the whole Ross belt.
Speaker 2: Hen reader, you are one of the best. It's great
Speaker 2: a cat show with you. Hen read a trace there.
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