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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: DA Davidson and in charge of all of institutional research,

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Speaker 2: Gil Laura, joins us this morning. It's on Tech and

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Speaker 2: on Nvidian and you know all the rest of it. Gil,

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Speaker 2: you follow thirty companies. You got a very measured out look.

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Speaker 2: Fourteen buy sixteen holds off the Bloomberg this morning, What

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Speaker 2: is the character of your enthusiasm on Nvidia given fourteen

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Speaker 2: buy sixteen, hold zero cells.

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Speaker 3: They're doing very well and they're set up to do

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Speaker 3: well this year. But this may be as good as

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Speaker 3: it gets for video. Their big customers have increased spend

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Speaker 3: the most into the fourth quarter of last year. They're

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Speaker 3: probably going to start moderating the growth and spend this year,

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Speaker 3: so this may be as good as it gets for Nvidia.

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Speaker 2: Off the screen, you got a neutral on in video,

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Speaker 2: neutral on Salesforce, Nutrol on Zoom. I'm loving this neutral

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Speaker 2: on five to nine Away we go what's a neutral?

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Speaker 2: Should I hold the stack? Do I want to find

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Speaker 2: something else to do? What does neutral mean? Gilherty?

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Speaker 3: There's better things to do, so if we're to look,

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Speaker 3: last night was a great view of what the AI

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Speaker 3: trade is, right and video was the AI trade a

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Speaker 3: couple of years ago, and last year Salesforce is not

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Speaker 3: quite ready for AI. Snowflake was a fantastic report. Infrastructure

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Speaker 3: software is incredibly important for companies to be able to

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Speaker 3: run AI application. They need to get their data ready

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Speaker 3: and Snowflake is leading the way in terms of doing that.

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Speaker 3: They have the main analytical database, the leading product, and

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Speaker 3: so companies are using them to put all the data

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Speaker 3: in one place so they can even start building AI applications.

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Speaker 3: That's why Snowflake did well. That's why we like infrastructure

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Speaker 3: software companies like Snowflake, Data Dog, Dina, trace Jyfrog. We

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Speaker 3: like half the companies. We just prefer them over the

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Speaker 3: other half.

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Speaker 2: All these names, Detroit, Lions, blue Light, all these names.

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Speaker 2: Is it like two thousand reducts? It sounds like a

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Speaker 2: Super Bowl list from two.

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Speaker 4: Thousand exactly right?

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Speaker 5: Hey, Gil, we just had President Trump put out a

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Speaker 5: tweet saying that these tariffs are going into place, including China.

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Speaker 4: Here, how does the.

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Speaker 5: Tech world view a world of increasing tariffs, Well.

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Speaker 3: It depends on if you're selling hard goods or if

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Speaker 3: you're selling software. If you're selling hardware, let's say in Nvidia,

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Speaker 3: this makes your life a little bit more complicated. Higher

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Speaker 3: tariff borders between the US and China, between China and Taiwan,

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Speaker 3: between Taiwan and where they source their materials, all those

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Speaker 3: types of tariffs will add up to make the product

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Speaker 3: more expensive. For the software companies, in the internet companies,

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Speaker 3: it'll be more subtle. Let's not forget part of the

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Speaker 3: reason we're talking about putting tariffs on Europe is that

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Speaker 3: the Europeans have made a habit of charging our big

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Speaker 3: technology companies billions of dollars at a time as quote

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Speaker 3: unquote penalties for whatever behavior they choose to penalize. So

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Speaker 3: as we escalate with Europe, those companies may suffer more.

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Speaker 3: As we escalate with China, Apple may get in the

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Speaker 3: crosshairs again. So it could have an impact, But it

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Speaker 3: really depends on how much follow through there is in

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Speaker 3: terms of tariffs and how combative our adversaries are going

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Speaker 3: to be. Once we do raise tariffs.

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Speaker 5: So if you're a Microsoft, how much attention are you

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Speaker 5: paying to what's happening in Washington, DC with tariffs?

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Speaker 3: A lot of attention again, especially as it has to

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Speaker 3: do with Europe. Again, the Europeans have fined Microsoft many times,

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Speaker 3: have extracted their penalties and fees out of Microsoft, and

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Speaker 3: they'll go right back to that. Well if they decide

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Speaker 3: that's a good way to retaliate against tariffs that we

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Speaker 3: put on European cars. Perhaps, So for all of these companies,

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Speaker 3: they're paying a lot of attention because on many of

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Speaker 3: these frontiers they are right in the crosshairs of retaliation.

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Speaker 5: So in the eleven o'clock hour, Gil Caroline Heide to

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Speaker 5: Bloomberg Television is going to be interviewing mister Jasse from Amazon.

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Speaker 5: What do you need to hear from mister Jesse in

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Speaker 5: the days and weeks to come Amazon, because I know

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Speaker 5: that's one of the names you have a buyer reading on.

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Speaker 2: Yeah.

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Speaker 3: So the progress they're making across the board is very impressive.

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Speaker 3: It's our favorite megacap pig because they're leading the way

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Speaker 3: in terms of facilitating enterprise AI because AWS is the

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Speaker 3: biggest hyperscaler. They're also going to have the biggest AI

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Speaker 3: business there. On the consumer side, the introd Alexa plus

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Speaker 3: yesterday have rufus on the shopping app so they're helping

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Speaker 3: consumers shop through better and better AI tools. And then

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Speaker 3: on the retail business they're doing well as the US

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Speaker 3: consumer holds up, the European consumer can possibly pick up.

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Speaker 3: And all these things feed into each other. The advertising

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Speaker 3: business is getting better with AI with more volume, so

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Speaker 3: that flywheel is working pretty well for Amazon right now.

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Speaker 2: How is their box business? See, people like you, Gil,

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Speaker 2: you never talk about you get a cardboard box? You know?

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Speaker 2: Did you like the new phone ones? Paul? They little

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Speaker 2: little thing you need?

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Speaker 4: All right?

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Speaker 2: You know? What do you what do you think? I mean?

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Speaker 2: Is a box business going to put the US Post Office,

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Speaker 2: FedEx and everybody else out of business?

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Speaker 3: The UPS and FedEx a few years ago when Amazon

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Speaker 3: came to them before it started doing its own delivery

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Speaker 3: and asked them for price concessions, and they said no.

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Speaker 3: And boy do they regret it, because now Amazon's already

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Speaker 3: surpassed UPS and will will soon make those two companies

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Speaker 3: smaller and smaller. They're they're making US postal service smaller.

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Speaker 3: I know the Amazon trucks at my house at least

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Speaker 3: two or three times a day.

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Speaker 2: I mean, it's great here. But you know, one of

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Speaker 2: the things you know, with Gil Lauria and d Davidson, folks,

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Speaker 2: we can do this because a really holistic view on

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Speaker 2: securities research. We were talking earlier to Carolina. She swears

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Speaker 2: they still got one day delivery in the United Kingdom.

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Speaker 2: Grant's tenzy waens. I mean at the distance from Carolina

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Speaker 2: Hie to John Faraow's house now England is like forty

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Speaker 2: two miles. But is one day delivery gone? That was

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Speaker 2: an experiment Giloria of years ago. Have they just given

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Speaker 2: that up quietly so they can profit? No, it's quite

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Speaker 2: the contrary. Delivery times they are still getting shorter, and

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Speaker 2: they are absolutely relentless about it. They are constantly adding

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Speaker 2: more fulfillment centers, last mile operations. They're still talking about

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Speaker 2: using drones. They are going to be relentless about shortening

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Speaker 2: delivery times and while keeping the delivery costs lower. They're

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Speaker 2: investing billions of dollars in it, and they're not going

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Speaker 2: to stop until we get everything we want the same

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Speaker 2: day we go to surveillance. How many boxes are at

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Speaker 2: the front door, correspond at Lisa Matteo, do you, Lisa,

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Speaker 2: I don't buy it. I don't see one day delivery

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Speaker 2: anymore at Amazon, do you.

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Speaker 4: I get a sad Yeah. Absolutely, that's where I live.

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Speaker 5: It could be just yeah, no, I mean you make

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Speaker 5: a phone call when you're doing your morning, you know,

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Speaker 5: run around during your morning towards by the time you

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Speaker 5: get back home and right there.

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Speaker 2: Okay, so that's Mayor Adam's fault. We'll talk to him about.

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Speaker 5: What's upper eastside things cans about four day delivery. It's

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Speaker 5: a whole third avenue taking over.

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Speaker 4: As John Tucker always reports to.

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Speaker 5: Us, Apple, Gil, you have a buy rating on Apple

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Speaker 5: if I'm an, If I'm Apple, I.

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Speaker 4: Still have to worry about China.

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Speaker 5: I get twenty percent of my revenue in China'm despite

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Speaker 5: what I'm trying to do when friendshuring and on shurn,

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Speaker 5: my supply chain is completely tied to China. Here, How

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Speaker 5: can I buy Apple stock if I've got that China

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Speaker 5: is still hanging over me.

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Speaker 3: Yeah, China is the big risk. It's it's the most

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Speaker 3: competitive market, it's the most dynamic market. And again it's

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Speaker 3: it gets ensnared in the UI. China dispute, trade dispute.

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Speaker 3: So it is a risk. It's down to fifteen percent,

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Speaker 3: it may go down to even less of Apple's revenue

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Speaker 3: going forward. And at the same time, Apple is investing

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Speaker 3: in the next break market, which is India, and they're

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Speaker 3: hoping to get over the next twenty thirty years the

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Speaker 3: same type of growth they've gone out of China over

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Speaker 3: the last twenty years, because China is not going to

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Speaker 3: be supportive of the growth story on the product side.

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Speaker 3: And then to your point, it's also a challenge in

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Speaker 3: terms of the supply chain. Apple has diversified away from

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Speaker 3: China largely, but again with a higher tariffs. Any goods

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Speaker 3: in service, any goods that get shipped anywhere in the world,

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Speaker 3: are going to be at risk of having higher costs.

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Speaker 5: All right, So stepping back, GIL, looking across all your

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Speaker 5: coverage and again cover you know thirty some odd names

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Speaker 5: in broad tech. Have we seen peak AI.

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Speaker 2: That's come up a couple of times today.

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Speaker 3: Yeah, it's important, not at all, not at all. We're

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Speaker 3: just getting started. AI is going to make all of

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Speaker 3: us more productive. It's going to be a contributor to

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Speaker 3: GDP growth. It's just not going to happen overnight. There's

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Speaker 3: going to be different waves of benefit. Again, the last

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Speaker 3: wave was Microsoft and Nvidia. Now the wave is infrastructure software. Again,

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Speaker 3: I highlighted Snowflake, but there's others. And then in two

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Speaker 3: or three years there's going to be a wave of

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Speaker 3: applications that take off and drive a lot of activity there,

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Speaker 3: including through the Apple ecosystem, which will make the iPhone

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Speaker 3: more valuable. Eventually, it'll be becomes so big that it'll

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Speaker 3: make all of us more productive. We'll all have personal

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Speaker 3: assistance that can help us at work, can help with

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Speaker 3: our personal lives. This future is coming, it's just not

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Speaker 3: going to happen overnight. And unfortunately we had some companies

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Speaker 3: raise expectations as if it's imminent, when in fact it'll

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Speaker 3: take a few more years before we see it in

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Speaker 3: everyday life all the time.

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Speaker 2: Yeah, that's absolutely brilliant. I mean, that's a very nice summary, Gilory.

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Speaker 2: That's why we're having you on here. But I don't

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Speaker 2: where's the proof of concept. I mean, give me one

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Speaker 2: infrastructure thing in the New York Tri state area. I mean,

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Speaker 2: is AI helping them land airplanes at EWR, is AI

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Speaker 2: helping with the building of the many tunnels under the

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Speaker 2: Hudson River, the Sweeney Tunnels. We're calling though mean where

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Speaker 2: Giloria is the first proof of concept of AI doing that.

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Speaker 3: Software code. Software engineers were, if you look two three

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Speaker 3: years ago, were in such short supply that the main

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Speaker 3: reason we didn't have advances in softwares we didn't have

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Speaker 3: enough software engineers. What's happening now is Generator of AI

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Speaker 3: is actually perfectly suited for software because it's a language

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Speaker 3: that easy to understand and easy to translate to. And

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Speaker 3: so we're having an explosion of software code development. It's

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Speaker 3: going to take a couple of years before we see

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Speaker 3: the results of it, but it's already starting to happen.

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Speaker 3: And those are the infrastructure software companies that we're talking

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Speaker 3: about again, names like get lab and JFrog are helping

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Speaker 3: develop more code. Snowflake is helping store these new applications.

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Speaker 3: That's already happening. That's why those companies are doing better

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Speaker 3: than other software companies right now. But it's going to

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Speaker 3: take time before we see it in our everyday life.

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Speaker 3: For now, we just have chatbots and Alexa plus ordering

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Speaker 3: April towels when you ask it to don't.

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Speaker 2: Be a stranger. This is really informative. Thank you so much,

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Speaker 2: gil Loria, with a nice mix of uys and neutrals.

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Speaker 2: We like to see that. On the sell side.

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Speaker 1: watch us Live on YouTube.

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Speaker 2: This is a joy in an important day to speak

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Speaker 2: to Wendy Schiller's professor at Brown University, but far more nationally,

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Speaker 2: and forget about the Republican Democrat thing. Just here is

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Speaker 2: our civics second paragraph. This happens to be from the

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Speaker 2: Washington Post, Professor Schiller. The brief administrative order, which did

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Speaker 2: not address the underlying legal issues, will allow time for

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Speaker 2: a full Supreme Court review. Professor Schiller, what should our

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Speaker 2: listeners either pro Trump, anti Trump, anti Democrat pro this

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Speaker 2: da What should we expect from Justice Roberts in the

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Speaker 2: Supreme Court?

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Speaker 6: Well, I mean, I think, Tom, I go all way

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Speaker 6: back to John Marshall. I mean, I really do think

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Speaker 6: about Marvey v. Madison. I think about crucial decisions that

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Speaker 6: the Court has made in history that shift the balance

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Speaker 6: of power across branches. And that's certainly what MARVV Medicine did,

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Speaker 6: elevating this I courts power and reducing president's power. Thomas

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Speaker 6: Jefferson was not happy about that. I think in this case,

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Speaker 6: this isn't just a one off. This isn't there's a

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Speaker 6: whole series of cases that will, in fact, you know,

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Speaker 6: affirm or restrain or expand the president's discretionary power over

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Speaker 6: the money that Congress appropriates across the board. It's not

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Speaker 6: just about aid, it's not just about DEI, It's not

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Speaker 6: about just a single thing. So this is a real

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Speaker 6: moment for Roberts, who's had a number of these really

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Speaker 6: important moments. The immunity decision obviously, but even going back

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Speaker 6: to Obamacare, you know, affirming the you know, Obamacare is

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Speaker 6: a program, but then also limiting the federal government's power

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Speaker 6: to be coercive in how it distributes money. And that's

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Speaker 6: this balancing act that Roberts is facing.

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Speaker 2: I think right now, let's take a given justice. I'm

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Speaker 2: going to go with Wizard White, Byron White, hugely respected

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Speaker 2: with the our Supreme Court history, legitimate college you have

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Speaker 2: to lead at Colorado, legitimate baseball draftee with the Pittsburgh Pirates.

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Speaker 2: He got to the Supreme Court, and he surprised those

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Speaker 2: people that thought Wizard White would do this, do this,

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Speaker 2: do this. Are we going to get the same surprise

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Speaker 2: from the more conservative members of the court or do

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Speaker 2: you suggest they'll go lockstep with a president.

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Speaker 6: I think they're probably literally starting to think about middle ground.

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Speaker 6: I don't know that they'll go completely lock step, but

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Speaker 6: there's a lot of room in this structure Articles one, two,

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Speaker 6: and even three of the Constitution to have the president

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Speaker 6: exert power. The difference today from any other Roman history

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Speaker 6: is the size and scope of the federal government. That's

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Speaker 6: the big new factor in the sense of this constitutional arrangement.

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Speaker 6: You know, they were writing Constitution for a president that

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Speaker 6: was overseeing a very tiny federal government, and that stayed

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Speaker 6: tiny for on more than one hundred years. So now

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Speaker 6: we've got something that affects everybody's daily life. You know,

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Speaker 6: what does that mean? How much responsibility does the president

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Speaker 6: have in power and how much does Congress have a

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Speaker 6: say in it? And this is going to be crucial

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Speaker 6: going forward because of the scope of the federal government.

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Speaker 6: It really does affect everybody's life. And that's where the

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Speaker 6: Court now has so much more at stake, not just

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Speaker 6: for the separation powers, but for its own survival. If

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Speaker 6: you give the president, you know, free reign over everything,

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Speaker 6: what's to say he's not going to want changes in

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Speaker 6: the Court or ignore the Court. So the Court's survival

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Speaker 6: in terms of influential here is also on the line.

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Speaker 4: Professor.

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Speaker 5: We had President Trump's first cabinet meeting yesterday, Tellwes, and

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Speaker 5: we had mister Musk there. What did you take away

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Speaker 5: from that cabinet meeting?

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Speaker 6: Well, I mean it's something you could not even imagine,

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Speaker 6: even like in a movie, you know, like you wouldn't

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Speaker 6: even you know, Wag the you know, Wag the Dog,

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Speaker 6: that movie about sort of a fake war. And we thought, oh,

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Speaker 6: these things can't ever happen. I never, in my days

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Speaker 6: teaching every thought this would be the first photo of

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Speaker 6: a major cabinet meeting. I thought Trump was doing Trump.

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Speaker 6: He was sort of giving Elon Musk a little bit

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Speaker 6: you know, of shade at some point, but then also

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Speaker 6: reaffirming Musk's authority. He clearly wants to walk away with

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Speaker 6: a definitive, visible cut in the size of the federal workforce,

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Speaker 6: and whoever can get there first will be Trump's favorite,

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Speaker 6: and so right now it's Musk. But if it starts

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Speaker 6: to cause some backlash and problems, He'll just instruct all

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Speaker 6: of his cabinet members to do that and literally say

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Speaker 6: do it or you're fired. I mean, this is the

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Speaker 6: way he will run the cabinet. So it was a

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Speaker 6: bit surreal, but you could see that Trump was power

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Speaker 6: playing even within his own cabinet, which every president does.

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Speaker 5: By the way.

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Speaker 4: It's interesting.

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Speaker 5: I mean, I think you know, you looked around the

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Speaker 5: table when you saw mister Musk, and I figure, if

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Speaker 5: you're a cabinet person, this is kind of the.

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Speaker 4: Peak of your political career. You've become.

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Speaker 5: You know, you have your heading up a big department

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Speaker 5: within US government, but I guess you kind of have

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Speaker 5: to report to mister Musk. Is that kind of the

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Speaker 5: vibe taken from yesterday?

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Speaker 6: Well, I mean, certainly it's the public visible vibe, but

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Speaker 6: of course underneath, you know, behind the scenes, you're gonna

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Speaker 6: see cabinet members now they're confirmed, and the FBI is

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Speaker 6: an awfully powerful place, the Treasury is an awfully powerful place.

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Speaker 6: I think these people will assert themselves behind the scenes constantly.

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Speaker 6: With Trump trying to sort of minimize Musk's capacity to

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Speaker 6: tell them what to do. But we have real things happening. Sadly,

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Speaker 6: somebody died. I think at least one person has died

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Speaker 6: of measles in Texas. That's something that RFK has to

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Speaker 6: deal with as a cabinet member. You know, there are

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Speaker 6: things that will happen that will affect people that will

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Speaker 6: be negative. What does Trump do then? Does he blame

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Speaker 6: Musk or does he blame Kennedy? You know, and they're

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Speaker 6: all trying to like basically avoid blame for the backlash

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Speaker 6: and the bad things that will happen from making such drastic,

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Speaker 6: you know, visible cuts so quickly.

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Speaker 2: One final question, what do you glean is a relationship

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Speaker 2: between the leadership of the GOP Senate and the GOP House.

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Speaker 6: I knew you were going to ask me this. I

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Speaker 6: did some homer before I came on. Ye, so are

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Speaker 6: we the Senate Republican majority leaders are saying, Yeah, that

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Speaker 6: House resolution that barely passed, that was lauded as a

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Speaker 6: political victory twenty four hours ago, Yeah, we're not taking that.

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Speaker 6: We're not interested in that one. That's not going to

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Speaker 6: do it for us. We want lots of changes, in

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Speaker 6: particular Medicaid. This is where senators represent entire states. They

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Speaker 6: deal with governors much more frequently, and they understand that

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Speaker 6: all the people in the state are affected. Medicaid effects states.

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Speaker 6: So this is where you see the institutional design of

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Speaker 6: the House and Senate really coming through a particularly on Medicaid.

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Speaker 6: On this Budgy resolution, they said the tax cuts weren't

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Speaker 6: permanent enough. I'm not sure what that means. George W.

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Speaker 6: Bush wanted permanent tax cuts. It's hard to do. So

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Speaker 6: the Senate is already planting its flag and telling the

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Speaker 6: House that there's a lot of work to be done.

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Speaker 2: Professor, you get an a thank you so much, Wendy

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Speaker 2: Schuler Brown University. I really appreciate her input.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Apple Corplay and Android

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Speaker 1: play Bloomberg eleven thirty.

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Speaker 4: Join us right now.

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Speaker 2: Huge response in Julia Pollocks on she's a ZipRecruiter? Really

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Speaker 2: is a chief US Economists A starkly different take on

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Speaker 2: the labor economy. Julia, we had not ZIP recruiter. He's

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Speaker 2: from a small internet firm City Group. Andrew Hollenhorst was

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Speaker 2: just on saying there seemed to be a little bit

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Speaker 2: of cracks in the employment armor. Do you agree.

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Speaker 7: I think it's too soon to tell. So on the

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Speaker 7: one hand, you have consumer confidence falling, there's so many

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Speaker 7: new things happening. We know that uncertainty can be a

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Speaker 7: drag on investments and hiring as companies wait for clarity,

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Speaker 7: so it's possible that that is happening. We also know

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Speaker 7: that some specific companies are concerned about tariffs and the

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Speaker 7: effect on their businesses. But we also know that there

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Speaker 7: are many many employers who are basically euphoric. They expect

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Speaker 7: far fewer investigations from the government, They expect looser, more

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Speaker 7: favorable regulation, a better business environment. So it's really mixed

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Speaker 7: bag at the moment, and we don't know how it's

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Speaker 7: going to work out. And the aggregate figures, I expect

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Speaker 7: this job support will still be a pretty strong one.

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Speaker 5: So what drives just stepping back here from a corporation,

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Speaker 5: what drives my hiring strategy on a kind of a

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Speaker 5: six to twelve month basis, do.

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Speaker 7: You look at the market, you see the products and

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Speaker 7: services that you are producing, You see how much you

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Speaker 7: are able to make for them. If you see an

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Speaker 7: opportunity to expand into a new product line or a

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Speaker 7: new service and make money, you know, if the profit

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Speaker 7: is going to be positive, the revenue will exceed the costs,

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Speaker 7: then you go for it. You know, there are lots

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Speaker 7: of reasons that people hold back and try to hire

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Speaker 7: fewer people. One, the tax code encourages it. You hire

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Speaker 7: a person, you pay payroll tax, you get a machine,

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Speaker 7: you get a full tax right off. So we have

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Speaker 7: a couple of things that we need to do in

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Speaker 7: this country to you know, make sure that's what's not inevitable.

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Speaker 7: It doesn't happen because we force it to. So, you know,

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Speaker 7: people are worried that robust will take over jobs. Well,

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Speaker 7: our policies kind of encourage that. There are also states

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Speaker 7: with very very tough label laws where employers are terrified

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Speaker 7: of hiring someone because they're worried they won't be able

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Speaker 7: to terminate them without being sued. So there are lots

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Speaker 7: of things that make employers hold back.

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Speaker 2: Julie, and we're going to do the economic data here

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Speaker 2: in a moment, Julia Pollock with us a zip recruiter.

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Speaker 2: Let's go back to first principles. What do you see

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Speaker 2: distinctive Zip recruiter? Fossils like us look at it and go, oh,

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Speaker 2: it's Internet. It's people you know on a laptop at

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Speaker 2: Starbucks trying to find their jobs so they can work

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Speaker 2: from home four days a week. That's a stereotype, Julia Pollock.

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Speaker 2: What do you see at zip recruiter? What's unique your

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Speaker 2: website effort?

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Speaker 7: So the difficulty in the labor market is that this

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Speaker 7: is the most heterogeneous market on the planet. No jobs

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Speaker 7: are the same and no workers are the same, and

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Speaker 7: so there's a tremendously difficult matching problem. And that's where

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Speaker 7: zippercruiter comes in. We help connect the right employers with

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Speaker 7: the right jobs at the right moment. And that is

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Speaker 7: not a trivial problem.

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Speaker 5: It's not just about wages here, Julia. I mean, it

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Speaker 5: seems like wage growth is pretty darn solid. Yes, inflation's

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Speaker 5: a big, big issue for all consumers out there, but

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Speaker 5: wage growth has been pretty darn good. Is that seemed

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Speaker 5: solid to you?

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Speaker 7: You? Wage growth has exceeded inflation now for about two

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Speaker 7: years and I think workers are trying to are starting

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Speaker 7: to feel that after twenty five months of negative real

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Speaker 7: wage growth in twenty twenty one twenty two made them

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Speaker 7: feel pretty gloomy. Many are feeling less financial strain now.

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Speaker 7: In our job seeker confidence surveys, we've seen the financial

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Speaker 7: index go up a lot in the last few months.

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Speaker 2: Right, Let make you the economic data. We do this

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Speaker 2: for Julia Pollock and ZIP recruiter. We say good morning

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Speaker 2: to all of you futures. We're up thirty thirty five.

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Speaker 2: We're watching right now. Seems to be a lift this morning.

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Speaker 2: GDB comes in level two point three percent on a

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Speaker 2: second look, but far more consumption and tick up four

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Speaker 2: point two percent. Critically, the GDP Price Index. Julia, let

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Speaker 2: me give you this exactly. It was a two. It's

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Speaker 2: a wow statistic two point two percent prior the second

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Speaker 2: look GDP is not two point two percent. It's such

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Speaker 2: a lift. I wonder if it's a typo. We'll have

434
00:24:35,920 --> 00:24:42,280
Speaker 2: to watch that four point two percent. On a simplistic basis,

435
00:24:42,440 --> 00:24:44,280
Speaker 2: you take a two three and a four to two,

436
00:24:44,840 --> 00:24:46,880
Speaker 2: add them together, and you got a six point five

437
00:24:46,920 --> 00:24:50,760
Speaker 2: percent nominal GDP. That's an amateur take but that gives

438
00:24:50,800 --> 00:24:55,000
Speaker 2: you the shock of this GDP price index statistic from

439
00:24:55,119 --> 00:24:57,760
Speaker 2: the survey was two point two percent, and it's a

440
00:24:57,760 --> 00:25:02,400
Speaker 2: true jump condition to four point two percent. Durable goods

441
00:25:02,840 --> 00:25:04,840
Speaker 2: right now, I'm going to say with a lift as

442
00:25:04,880 --> 00:25:09,480
Speaker 2: well an x aircraft. What Julia Pollack looks at is

443
00:25:09,520 --> 00:25:14,920
Speaker 2: again sprightly zero point three is larger zero point eight

444
00:25:15,000 --> 00:25:17,760
Speaker 2: and on claims we finally get the weakness here. Two

445
00:25:17,800 --> 00:25:21,200
Speaker 2: twenty one comes in at two forty two, so it's

446
00:25:21,280 --> 00:25:23,600
Speaker 2: market moving equities don't do much. But I'm going to

447
00:25:23,680 --> 00:25:26,280
Speaker 2: go down here. We've been talking all morning. The Sweeney

448
00:25:26,359 --> 00:25:30,119
Speaker 2: yield actually churns at a four point zero nine up percent.

449
00:25:30,200 --> 00:25:33,280
Speaker 2: The ten year real yield comes in ever so slightly

450
00:25:33,359 --> 00:25:38,800
Speaker 2: one point ninety one percent. Julia Pollock did the nominal

451
00:25:38,840 --> 00:25:43,080
Speaker 2: GDP amateur take. But just to be safe here, do

452
00:25:43,160 --> 00:25:46,240
Speaker 2: we still see a run rate of animal spirits in

453
00:25:46,240 --> 00:25:50,000
Speaker 2: the nation of five percent plus?

454
00:25:50,680 --> 00:25:53,520
Speaker 7: Well, this is sort of interesting, isn't it. I mean,

455
00:25:53,760 --> 00:25:57,639
Speaker 7: GDP is coming in lower than previously estimated and inflation higher,

456
00:25:57,680 --> 00:26:00,879
Speaker 7: and that's consistent with the change which is in the

457
00:26:00,920 --> 00:26:04,920
Speaker 7: Fed's projections recently. And I think that is consistent with

458
00:26:05,359 --> 00:26:09,239
Speaker 7: the shift and sentiment recently as well. The economy is

459
00:26:09,440 --> 00:26:12,879
Speaker 7: still growing at a robust rate. I mean, people didn't

460
00:26:12,880 --> 00:26:16,560
Speaker 7: expect two percent GDP growth now given our demographic shifts,

461
00:26:17,320 --> 00:26:20,600
Speaker 7: So that's still fairly strong, but it's not as strong

462
00:26:20,640 --> 00:26:23,840
Speaker 7: as we once thought. Employment growth also, we saw those

463
00:26:23,880 --> 00:26:26,879
Speaker 7: huge revisions, the big benchmark revisions was not as strong

464
00:26:26,880 --> 00:26:29,240
Speaker 7: in twenty twenty three and twenty twenty four as we

465
00:26:29,280 --> 00:26:33,680
Speaker 7: initially thought. And inflation is proving more stubborn.

466
00:26:34,119 --> 00:26:37,440
Speaker 2: What's a character of inflation you see at ZIP recruiter.

467
00:26:39,560 --> 00:26:43,359
Speaker 7: So this is not wage driven inflation. For the most part,

468
00:26:43,720 --> 00:26:49,640
Speaker 7: productivity growth is strong and employers do have pretty substantial

469
00:26:49,920 --> 00:26:53,439
Speaker 7: wage setting power, even though yes, there are industries with

470
00:26:53,560 --> 00:26:56,520
Speaker 7: labor shortages where where employers are sort of boxed in.

471
00:26:58,280 --> 00:27:01,920
Speaker 7: The issue here really is housing. That's the biggest source

472
00:27:01,960 --> 00:27:03,960
Speaker 7: of inflation in the United States, and then of course

473
00:27:04,400 --> 00:27:10,919
Speaker 7: energy goes up and down with geopolitical swings. So housing

474
00:27:11,000 --> 00:27:13,000
Speaker 7: is the big one though, and the FED has proven

475
00:27:13,400 --> 00:27:17,520
Speaker 7: somewhat ineffective at dealing with it because when the FED

476
00:27:17,600 --> 00:27:21,640
Speaker 7: raises interest rates, we see inventories shrink, and so prices

477
00:27:21,720 --> 00:27:24,520
Speaker 7: remain high and price growth rough and strong.

478
00:27:25,000 --> 00:27:27,840
Speaker 2: Julia, thank you so much, particularly during this economic data,

479
00:27:27,960 --> 00:27:32,920
Speaker 2: really really appreciated.

480
00:27:34,560 --> 00:27:38,439
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

481
00:27:38,520 --> 00:27:41,919
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

482
00:27:41,960 --> 00:27:44,760
Speaker 1: with the Bloomberg Business app. You can also watch us

483
00:27:44,800 --> 00:27:48,680
Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal.

484
00:27:48,800 --> 00:27:51,240
Speaker 2: This is a joy in an important day to speak

485
00:27:51,240 --> 00:27:55,960
Speaker 2: to Wendy Schiller, professor at Brown University, but far more nationally,

486
00:27:56,520 --> 00:28:00,160
Speaker 2: and forget about the Republican Democrat thing, Jess. Here is

487
00:28:00,160 --> 00:28:03,399
Speaker 2: our civics second paragraph. This happens to be from the

488
00:28:03,480 --> 00:28:08,240
Speaker 2: Washington Post, Professor Schiller. The brief administrative order, which did

489
00:28:08,240 --> 00:28:12,879
Speaker 2: not address the underlying legal issues, will allow time for

490
00:28:13,000 --> 00:28:18,240
Speaker 2: a full Supreme Court review. Professor Schiller, what should our

491
00:28:18,280 --> 00:28:23,440
Speaker 2: listeners either pro Trump, anti Trump, anti Democrat pro this

492
00:28:24,119 --> 00:28:28,639
Speaker 2: d D. What should we expect from Justice Roberts in

493
00:28:28,720 --> 00:28:29,639
Speaker 2: the Supreme Court?

494
00:28:30,920 --> 00:28:32,720
Speaker 6: Well, I mean, I think, Tom, I go all the

495
00:28:32,720 --> 00:28:34,439
Speaker 6: way back to John Marshall. I mean, I really do

496
00:28:34,520 --> 00:28:38,080
Speaker 6: think about Marve v. Madison. I think about crucial decisions

497
00:28:38,120 --> 00:28:41,200
Speaker 6: that the Court has made in history that shift the

498
00:28:41,280 --> 00:28:45,280
Speaker 6: balance of power across branches. And that's certainly what Marvey v.

499
00:28:45,360 --> 00:28:49,400
Speaker 6: Madison did, elevating this report's power and reducing president's power.

500
00:28:49,520 --> 00:28:51,920
Speaker 6: Thoma Jefferson was not happy about that. I think in

501
00:28:51,960 --> 00:28:54,400
Speaker 6: this case, this isn't just a one off. This isn't

502
00:28:54,480 --> 00:28:57,440
Speaker 6: there's a whole series of cases that will, in fact,

503
00:28:57,920 --> 00:29:03,400
Speaker 6: you know, affirm or restrain or expand the president's discretionary

504
00:29:03,440 --> 00:29:07,440
Speaker 6: power over the money that Congress appropriates across the board.

505
00:29:07,440 --> 00:29:10,719
Speaker 6: It's not just about AID, it's not just about DEI,

506
00:29:11,120 --> 00:29:13,720
Speaker 6: It's not about just a single thing. So this is

507
00:29:13,760 --> 00:29:16,560
Speaker 6: a real moment for Roberts, who's had a number of

508
00:29:16,600 --> 00:29:20,400
Speaker 6: these really important moments. The immunity decision obviously, but even

509
00:29:20,440 --> 00:29:23,440
Speaker 6: going back to Obamacare, you know, affirming the you know,

510
00:29:23,480 --> 00:29:26,440
Speaker 6: Obamacare is a program, but then also limiting the federal

511
00:29:26,480 --> 00:29:29,440
Speaker 6: government's power to be coercive in how it distributes money.

512
00:29:29,520 --> 00:29:32,280
Speaker 6: And that's this balancing act that Roberts is facing.

513
00:29:32,280 --> 00:29:34,560
Speaker 2: I think right now, let's take a given justice. I'm

514
00:29:34,560 --> 00:29:38,920
Speaker 2: going to go with Wizard White. Byron White, hugely respected

515
00:29:39,160 --> 00:29:43,920
Speaker 2: within our Supreme Court history, legitimate college athlete at Colorado,

516
00:29:44,280 --> 00:29:48,200
Speaker 2: legitimate baseball draftee with the Pittsburgh Pirates. He got to

517
00:29:48,240 --> 00:29:52,640
Speaker 2: the Supreme Court and he surprised those people that thought

518
00:29:52,680 --> 00:29:54,800
Speaker 2: Wiz or Wight would do this, do this, do this.

519
00:29:55,240 --> 00:29:58,200
Speaker 2: Are we going to get the same surprise from the

520
00:29:58,280 --> 00:30:01,760
Speaker 2: more conservative members of the court or do you suggest

521
00:30:01,800 --> 00:30:03,680
Speaker 2: they'll go lockstep with a president.

522
00:30:05,400 --> 00:30:08,640
Speaker 6: I think they're probably literally starting to think about middle ground.

523
00:30:08,760 --> 00:30:11,800
Speaker 6: I don't know that they'll go completely lock step, but

524
00:30:11,840 --> 00:30:15,360
Speaker 6: there's a lot of room in this structure Articles one, two,

525
00:30:15,440 --> 00:30:18,320
Speaker 6: and even three of the Constitution to have the president

526
00:30:18,440 --> 00:30:21,800
Speaker 6: exert power. The difference today from any other Roman history

527
00:30:22,000 --> 00:30:24,920
Speaker 6: is the size and scope of the federal government. That's

528
00:30:25,040 --> 00:30:28,880
Speaker 6: the big new factor in the sense of this constitutional arrangement.

529
00:30:29,120 --> 00:30:30,960
Speaker 6: You know, they were writing Constitution for a president that

530
00:30:31,000 --> 00:30:34,240
Speaker 6: was overseeing a very tiny federal government, and that stayed

531
00:30:34,280 --> 00:30:37,400
Speaker 6: tiny for more than one hundred years. So now we've

532
00:30:37,400 --> 00:30:40,240
Speaker 6: got something that affects everybody's daily life. You know, what

533
00:30:40,280 --> 00:30:42,800
Speaker 6: does that mean? How much responsibility does the president have

534
00:30:42,920 --> 00:30:45,960
Speaker 6: in power and how much does Congress have a say

535
00:30:46,000 --> 00:30:48,200
Speaker 6: in it? And this is going to be crucial going

536
00:30:48,240 --> 00:30:50,640
Speaker 6: forward because of the scope of the federal government. It

537
00:30:50,680 --> 00:30:54,040
Speaker 6: really does affect everybody's life. And that's where the Court

538
00:30:54,160 --> 00:30:56,520
Speaker 6: now has so much more at stake, not just for

539
00:30:56,560 --> 00:30:59,400
Speaker 6: the separation powers, but for its own survival. If you

540
00:30:59,440 --> 00:31:01,840
Speaker 6: give the president and then you know, free reign over everything,

541
00:31:02,120 --> 00:31:04,080
Speaker 6: what's to say he's not gonna want changes in the

542
00:31:04,120 --> 00:31:07,840
Speaker 6: court or ignore the court. So the Court's survival in

543
00:31:07,920 --> 00:31:11,040
Speaker 6: terms of influential here is also on the line.

544
00:31:11,600 --> 00:31:12,080
Speaker 4: Professor.

545
00:31:12,160 --> 00:31:17,720
Speaker 5: We had President Trump's first cabinet meeting yesterday, Tellwies, and

546
00:31:17,760 --> 00:31:19,760
Speaker 5: we had mister Musk there. What did you take away

547
00:31:20,200 --> 00:31:21,160
Speaker 5: from that cabinet meeting?

548
00:31:22,280 --> 00:31:24,400
Speaker 6: Well, I mean it's something you could not even imagined,

549
00:31:24,520 --> 00:31:26,640
Speaker 6: even like in a movie, you know, like you wouldn't

550
00:31:26,640 --> 00:31:28,440
Speaker 6: even you know, Wag the you know, Wag the Dog,

551
00:31:28,520 --> 00:31:30,640
Speaker 6: that movie about sort of a fake war, and thought, Oho,

552
00:31:30,720 --> 00:31:34,040
Speaker 6: these things can't ever happen. I never, in my days teaching,

553
00:31:34,080 --> 00:31:35,960
Speaker 6: ever thought this would be the first photo of a

554
00:31:36,000 --> 00:31:39,560
Speaker 6: major cabinet meeting. I thought Trump was doing Trump. He

555
00:31:39,680 --> 00:31:41,960
Speaker 6: was sort of giving Elon Musk a little bit you know,

556
00:31:42,040 --> 00:31:46,480
Speaker 6: of shade at some point, but then also reaffirming Musk's authority.

557
00:31:46,880 --> 00:31:50,760
Speaker 6: He clearly wants to walk away with a definitive, visible

558
00:31:50,880 --> 00:31:53,960
Speaker 6: cut in the size of the federal workforce, and whoever

559
00:31:54,040 --> 00:31:57,120
Speaker 6: can get there first will be Trump's favorite. And so

560
00:31:57,240 --> 00:31:59,480
Speaker 6: right now it's Musk. But if it starts to cause

561
00:31:59,480 --> 00:32:02,680
Speaker 6: some backline problems, he'll just instruct all of his cabinet

562
00:32:03,080 --> 00:32:05,800
Speaker 6: members to do that and literally say do it or

563
00:32:05,840 --> 00:32:07,360
Speaker 6: you're fired. I mean, this is the way he will

564
00:32:07,440 --> 00:32:10,160
Speaker 6: run the cabinet. So it was a bit surreal, but

565
00:32:10,240 --> 00:32:12,800
Speaker 6: you could see that Trump was power playing even within

566
00:32:12,840 --> 00:32:15,800
Speaker 6: his own cabinet, which every president does. By the way.

567
00:32:16,320 --> 00:32:16,920
Speaker 4: It's interesting.

568
00:32:16,920 --> 00:32:19,760
Speaker 5: I mean, I think you know, you looked around the

569
00:32:19,760 --> 00:32:22,480
Speaker 5: table when you saw mister Musk, and I figure, if

570
00:32:22,520 --> 00:32:24,760
Speaker 5: you're a cabinet person, this is kind.

571
00:32:24,600 --> 00:32:26,800
Speaker 4: Of the peak of your political career. You've become.

572
00:32:27,200 --> 00:32:30,040
Speaker 5: You know, you have, you're heading up a big department

573
00:32:30,080 --> 00:32:33,360
Speaker 5: with a US government, But I guess you kind of

574
00:32:33,600 --> 00:32:35,840
Speaker 5: have to report to mister Musk. Is that kind of

575
00:32:36,160 --> 00:32:37,480
Speaker 5: the vibe taken from yesterday?

576
00:32:38,400 --> 00:32:40,600
Speaker 6: Well, I mean, certainly it's the public visible vibe, but

577
00:32:40,640 --> 00:32:43,360
Speaker 6: of course underneath, you know, behind the scenes, you're gonna

578
00:32:43,360 --> 00:32:46,400
Speaker 6: see cabinet members now they're confirmed, and the FBI is

579
00:32:46,440 --> 00:32:50,120
Speaker 6: an awfully powerful place, the Treasury is an awfully powerful place.

580
00:32:50,880 --> 00:32:54,600
Speaker 6: I think these people will assert themselves behind the scenes constantly,

581
00:32:54,640 --> 00:32:58,080
Speaker 6: with Trump trying to sort of minimize Musk's capacity to

582
00:32:58,120 --> 00:33:01,800
Speaker 6: tell them what to do. But we have real things happening. Sadly,

583
00:33:01,880 --> 00:33:03,960
Speaker 6: somebody died. I think at least one person has died

584
00:33:04,000 --> 00:33:07,880
Speaker 6: of measles in Texas. That's something that RFK has to

585
00:33:07,920 --> 00:33:09,960
Speaker 6: deal with as a cabinet member. You know, there are

586
00:33:10,040 --> 00:33:12,360
Speaker 6: things that will happen that will affect people that will

587
00:33:12,360 --> 00:33:15,480
Speaker 6: be negative. What does Trump do then? Does he blame

588
00:33:15,560 --> 00:33:18,360
Speaker 6: Musk or does he blame Kennedy? You know, and they're

589
00:33:18,360 --> 00:33:21,880
Speaker 6: all trying to like basically avoid blame for the backlash

590
00:33:21,920 --> 00:33:24,880
Speaker 6: and the bad things that will happen from making such drastic,

591
00:33:25,080 --> 00:33:26,560
Speaker 6: you know, visible cuts so quickly.

592
00:33:26,720 --> 00:33:30,120
Speaker 2: One final question, what do you glean is a relationship

593
00:33:30,120 --> 00:33:34,440
Speaker 2: between the leadership of the GOP Senate and the GOP House.

594
00:33:35,760 --> 00:33:37,360
Speaker 6: I knew you were going to ask me this. I

595
00:33:37,400 --> 00:33:40,840
Speaker 6: did some homer before I came on. Yeah. So already

596
00:33:41,040 --> 00:33:44,640
Speaker 6: the Senate Republican majority leaders are saying, yeah, that House

597
00:33:44,680 --> 00:33:47,840
Speaker 6: resolution that barely passed, that was lauded as a political

598
00:33:47,880 --> 00:33:50,560
Speaker 6: victory twenty four hours ago, Yeah, we're not taking that.

599
00:33:50,680 --> 00:33:52,920
Speaker 6: We're not interested in that one. That's not going to

600
00:33:52,960 --> 00:33:55,040
Speaker 6: do it for us. We want lots of changes, in

601
00:33:55,080 --> 00:33:59,160
Speaker 6: particular Medicaid. This is where senators represent entire states. They

602
00:33:59,160 --> 00:34:01,880
Speaker 6: deal with governors much more frequently, and they understand that

603
00:34:01,920 --> 00:34:04,680
Speaker 6: all the people in the state are affected. Medicaid effects states.

604
00:34:05,000 --> 00:34:07,040
Speaker 6: So this is where you see the institutional design in

605
00:34:07,080 --> 00:34:09,720
Speaker 6: the House and Senate really coming through, particularly on Medicaid.

606
00:34:09,719 --> 00:34:12,080
Speaker 6: On this Budgy resolution, they said the tax cuts weren't

607
00:34:12,080 --> 00:34:14,680
Speaker 6: permanent enough. I'm not sure what that means. George W.

608
00:34:14,760 --> 00:34:17,600
Speaker 6: Bush wanted permanent tax cuts. It's hard to do. So

609
00:34:17,719 --> 00:34:20,480
Speaker 6: the Senate is already planting its flag and telling the

610
00:34:20,520 --> 00:34:22,400
Speaker 6: House that there's a lot of work to be done.

611
00:34:22,520 --> 00:34:25,040
Speaker 2: Professor, you get an a thank you so much, Wendy

612
00:34:25,080 --> 00:34:30,120
Speaker 2: Shler Brown University. I really appreciate her input.

613
00:34:30,600 --> 00:34:35,440
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

614
00:34:35,560 --> 00:34:39,840
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

615
00:34:39,960 --> 00:34:43,200
Speaker 1: seven to ten am Easter and on Bloomberg dot Com,

616
00:34:43,360 --> 00:34:47,160
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.

617
00:34:47,440 --> 00:34:50,560
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618
00:34:50,840 --> 00:34:52,880
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