WEBVTT - Bloomberg Surveillance TV: December 26th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordern. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.880 Terminal and the Bloomberg Business app. 0:00:36.320 --> 0:00:39.360 Stocks aiming to extend the year end rally, Victoria Fernandez 0:00:39.360 --> 0:00:42.479 of Crossmark Global Investments, writing, we begin the year with 0:00:42.520 --> 0:00:46.480 equity valuations at somewhat rich levels and lots of optimism 0:00:46.560 --> 0:00:50.000 already baked into those valuations, setting a high bar for 0:00:50.080 --> 0:00:54.000 positive surprises and paving the way for moderate returns. Victoria 0:00:54.080 --> 0:00:56.440 joins us. Now, Victoria, thank you so much for joining us. 0:00:56.600 --> 0:00:58.960 If the bar is so high for next year, do 0:00:58.960 --> 0:01:00.560 you think we are going to see some sort of 0:01:00.560 --> 0:01:01.640 correction in the markets? 0:01:02.960 --> 0:01:05.600 I think we will and ray, and it's typical that 0:01:05.680 --> 0:01:08.520 you'll see that in a midterm election anyway. So you 0:01:08.640 --> 0:01:10.920 add in the element of coming into the year at 0:01:10.959 --> 0:01:13.960 high valuations and you're setting yourself up for that. I mean, 0:01:14.000 --> 0:01:17.600 you typically look at a midterm election year and coming 0:01:17.680 --> 0:01:21.280 into that year, you've already priced in those pro growth components, 0:01:21.400 --> 0:01:25.720 the optimism around things being positive after our new administration 0:01:25.840 --> 0:01:30.240 comes into term, and as those positive elements actually come 0:01:30.319 --> 0:01:33.399 to fruition in a midterm election year, you start to 0:01:33.440 --> 0:01:37.200 see some pullback, some entry year corrections, sometimes up to 0:01:37.240 --> 0:01:40.679 as much as fifteen, sixteen, seventeen percent, you can see. 0:01:40.720 --> 0:01:42.400 So there's a lot of volatility. 0:01:42.640 --> 0:01:45.440 You usually get higher yields, so we wouldn't be surprised 0:01:45.440 --> 0:01:47.600 to see yields move a little bit higher as well. 0:01:48.200 --> 0:01:50.160 Setting this up for a year where you're going to 0:01:50.160 --> 0:01:54.040 see a lot of churning but have moderate returns, not 0:01:54.280 --> 0:01:55.800 like we're going to you know, like we've seen the 0:01:55.840 --> 0:01:57.760 last couple of years with these huge returns. 0:01:57.880 --> 0:01:59.720 So do you think we're going to see investors want 0:01:59.760 --> 0:02:03.440 to have more defensive trades? Could we see also rotation 0:02:03.600 --> 0:02:04.120 in the market. 0:02:05.080 --> 0:02:08.800 Yeah, we're already seeing some of that rotation, not necessarily 0:02:08.919 --> 0:02:12.800 into staples per se. Right, Staples are still struggling, so 0:02:13.080 --> 0:02:16.200 you're not getting that full on defensive shift. But what 0:02:16.360 --> 0:02:18.720 you are seeing is people come out of some of 0:02:18.760 --> 0:02:23.240 those high flyers, those hyperscalers, the high leverage tech or 0:02:23.280 --> 0:02:26.320 not leverage, but the high valuation tech names that are 0:02:26.360 --> 0:02:28.880 out there. You're seeing them trim those names back and 0:02:28.919 --> 0:02:32.320 going into some areas where you're starting to see uptrends 0:02:32.400 --> 0:02:35.880 in the sector. So whether it's healthcare, whether it's metals, 0:02:35.880 --> 0:02:39.559 like you guys were talking about, we've seen it in financials, 0:02:39.600 --> 0:02:43.040 We're seeing it in industrials. There's opportunities there to go 0:02:43.160 --> 0:02:47.400 in Staples are still dragging, so we haven't seen, like 0:02:47.440 --> 0:02:49.760 I said, that full rotation to defensive, but I think 0:02:49.800 --> 0:02:51.240 you're going to want to have a little bit of 0:02:51.240 --> 0:02:52.400 that in your portfolio. 0:02:52.800 --> 0:02:55.400 If we get a typical midterm year like we normally do. 0:02:55.760 --> 0:02:58.400 Let's sayce Victoria, it's going to be pretty quiet until 0:02:58.680 --> 0:03:01.680 mid January when corporate earnings come out for the fourth 0:03:01.760 --> 0:03:04.560 quarter numbers. And given that we had this government shut 0:03:04.560 --> 0:03:08.200 down the longest on record, disrupt the flow of economic data, 0:03:08.280 --> 0:03:10.520 it feels like there's going to be more importance placed 0:03:10.560 --> 0:03:14.080 on what companies say, especially how the forecast things for 0:03:14.120 --> 0:03:17.280 the coming year than what we've been getting from official data. 0:03:17.320 --> 0:03:19.520 What are you thinking in terms of the big themes 0:03:19.680 --> 0:03:22.200 you're anticipating from some of those sectors that you mentioned. 0:03:23.200 --> 0:03:26.560 Yeah, I think everyone's going to be looking at the capex, 0:03:26.919 --> 0:03:30.280 not just for those AI names, but across the board. 0:03:30.560 --> 0:03:31.600 That's really a driver. 0:03:31.800 --> 0:03:33.600 I think of some of the optimism that we have 0:03:33.800 --> 0:03:36.880 is this increasing capex. Some of that do to the 0:03:36.880 --> 0:03:40.000 OB three bill that was passed and the tax advantages 0:03:40.080 --> 0:03:43.680 associated with that, but we know capex helps growth, it 0:03:43.720 --> 0:03:47.920 gives you increased productivity, increase profitability, so people will be 0:03:48.000 --> 0:03:51.000 watching for that CAPEX component. I think we're also going 0:03:51.040 --> 0:03:53.440 to be looking at those retail names to see how 0:03:53.480 --> 0:03:56.920 does that consumer continue to spend. We know there's this 0:03:57.040 --> 0:03:59.040 divergence and it's going to be focused on the high 0:03:59.120 --> 0:04:02.840 income consumer. Will they continue to support the economy with 0:04:02.920 --> 0:04:05.520 their spending. So we'll be paying a lot of attention 0:04:05.600 --> 0:04:08.800 to that and really what the expectations are for profit margins, 0:04:08.920 --> 0:04:11.840 whether you're looking at EPs growth, revenue growth. 0:04:11.760 --> 0:04:12.840 Or profit margins. 0:04:13.000 --> 0:04:17.000 Those numbers are getting really high for twenty twenty six 0:04:17.080 --> 0:04:19.760 and going into twenty twenty seven, I think people are 0:04:19.839 --> 0:04:22.480 going to want to see can they actually see those 0:04:22.560 --> 0:04:24.880 numbers come to fruition or are those going to be 0:04:24.920 --> 0:04:27.279 pulled back some So those will all be elements to 0:04:27.320 --> 0:04:28.080 watch in earnings. 0:04:28.160 --> 0:04:30.839 And I'm so glad you highlighted Capex because when the 0:04:30.960 --> 0:04:33.680 AI build out first began, CAPEX was something that was 0:04:33.680 --> 0:04:36.480 seen as almost a positive because it showed a company's 0:04:36.480 --> 0:04:40.640 commitment to the future. However, increasingly it's become something of 0:04:40.640 --> 0:04:43.839 a burden, something that stretches their balance sheet. What's the 0:04:43.960 --> 0:04:47.760 sentiment towards capex Because if you don't have any ROI 0:04:47.800 --> 0:04:50.000 to show for immediately, is it going to be seen 0:04:50.040 --> 0:04:50.600 as a negative. 0:04:51.680 --> 0:04:52.680 That's exactly right. 0:04:52.720 --> 0:04:54.440 You've got to be able to see that there's some 0:04:54.640 --> 0:04:57.000 kind of return that you're getting on the money that 0:04:57.040 --> 0:05:00.680 you're investing, especially if it's disrupting your balance sheet, and 0:05:00.720 --> 0:05:02.680 I think that's the issue people are going to watch. 0:05:02.720 --> 0:05:05.440 It's very much company specific because you can look at 0:05:05.440 --> 0:05:08.719 something like Oracle, where they're having to go to the 0:05:08.760 --> 0:05:11.480 debt market, their free cash flow is going to be 0:05:11.839 --> 0:05:15.240 drawn down significantly. That's a very different story than looking 0:05:15.320 --> 0:05:18.359 at someone like an Alphabet, where they're still going to 0:05:18.360 --> 0:05:21.200 have very strong free cash flow. Yes, they can go 0:05:21.240 --> 0:05:23.799 to the debt market, but that free cash flow number 0:05:23.839 --> 0:05:26.600 continues to be strong, so there's not as much concern 0:05:26.800 --> 0:05:28.919 when it comes to a company like that. It'll really 0:05:28.960 --> 0:05:32.279 be driving down into the balance sheet to see how 0:05:32.360 --> 0:05:36.120 is the CAPEX going to affect cash flow going forward? 0:05:36.360 --> 0:05:39.040 What does that mean in terms of earnings, What does 0:05:39.080 --> 0:05:41.159 that mean in terms of dividends if it's a dividend 0:05:41.240 --> 0:05:44.119 paying stock. Those are all elements that will play into 0:05:44.200 --> 0:05:47.560 what CAPEX looks like for each specific company, But as 0:05:47.600 --> 0:05:52.000 a whole, we know it's typically supportive of GDP and productivity, 0:05:52.279 --> 0:05:55.480 so people will be they'll be biased towards positivity as 0:05:55.480 --> 0:05:57.000 long as the balance sheets can handle it. 0:05:57.080 --> 0:05:59.160 Picture you mentioned the midterm election years tend to be 0:05:59.279 --> 0:06:02.440 high growth. What are you expecting from the administration to 0:06:02.480 --> 0:06:04.520 make sure they keep that growth continuing. 0:06:05.600 --> 0:06:08.760 Yeah, I think we're going to see not just some 0:06:08.800 --> 0:06:11.159 stimulus coming for the consumer, but we'll see it for 0:06:11.240 --> 0:06:12.240 corporations as well. 0:06:12.320 --> 0:06:14.440 So we talked about CAPEX, what that looks like. 0:06:15.400 --> 0:06:15.840 R and D. 0:06:15.960 --> 0:06:18.200 There's going to be benefits associated with R and D 0:06:18.480 --> 0:06:23.279 and building infrastructure here in the US, so that onshoing benefit, 0:06:23.480 --> 0:06:26.520 but consumers as well. There's a lot of tax advantages 0:06:26.520 --> 0:06:29.680 for consumers not just no tax on tips, but you're 0:06:29.720 --> 0:06:33.279 looking at interest on car payments, You're looking at changes 0:06:33.320 --> 0:06:38.040 in regards to salt taxes, in regards to the child deductions. 0:06:37.480 --> 0:06:37.960 That you get. 0:06:38.000 --> 0:06:40.240 There's a lot of elements there that I think will 0:06:40.240 --> 0:06:43.799 be beneficial to the consumer as well that will lift 0:06:43.839 --> 0:06:46.680 them up for at least probably the first half of 0:06:46.720 --> 0:06:48.760 the year. Those are some of the things that I 0:06:48.800 --> 0:06:52.320 think you'll see coming specifically from the administration. And there's 0:06:52.440 --> 0:06:55.240 always talk about something new, right We're hearing talks about 0:06:55.839 --> 0:06:58.360 checks being given because of the tariffs that have come 0:06:58.400 --> 0:07:01.280 in and the elements that that are positive there, So 0:07:01.640 --> 0:07:05.000 all sorts of things that I think could boost consumers 0:07:05.040 --> 0:07:07.720 in the first quarter coming from the administration. And then 0:07:07.800 --> 0:07:09.600 add on to some of the things you have like 0:07:09.640 --> 0:07:12.720 the World's Cup coming, two hundred and fiftieth birthday party 0:07:12.720 --> 0:07:15.120 for the nation, all of these things that will generate 0:07:15.480 --> 0:07:18.960 more activities here in the US and generate more GDP. 0:07:19.400 --> 0:07:20.880 So they're looking forward to the World Cup. 0:07:20.920 --> 0:07:23.520 But when it comes to things like tax refunds, do 0:07:23.520 --> 0:07:26.000 you think consumers because they know what's coming, do you 0:07:26.000 --> 0:07:28.280 think consumers are already out there spending that money right now? 0:07:28.320 --> 0:07:30.840 On the holiday season, They. 0:07:30.760 --> 0:07:33.560 Might be in anticipation of that, so it could be 0:07:33.920 --> 0:07:35.800 less of effect. It kind of goes to that point 0:07:35.800 --> 0:07:38.400 that we're saying, where you come into the year with 0:07:38.520 --> 0:07:41.320 a lot of those growth elements already built in for 0:07:41.400 --> 0:07:43.360 your optimism for what you think is going to happen 0:07:43.360 --> 0:07:45.600 in the market, and when it comes to fruition, there's 0:07:45.640 --> 0:07:46.680 not much of an effect. 0:07:46.960 --> 0:07:47.960 That could be part of it. 0:07:48.000 --> 0:07:50.240 They could be spending that now, but it seems like 0:07:50.400 --> 0:07:53.800 lower income consumers really are holding on right now. You're 0:07:53.840 --> 0:07:57.239 not seeing savings rates go down tremendously, which is telling 0:07:57.320 --> 0:07:59.880 us that it's the high income consumer that's really spent. 0:08:00.520 --> 0:08:01.800 Low income consumers are. 0:08:01.720 --> 0:08:04.320 Not dipping in to those savings just yet, and year 0:08:04.360 --> 0:08:08.360 over year holiday spending for that cohort is actually negative, 0:08:08.600 --> 0:08:11.360 So I think they're holding back a little bit, waiting 0:08:11.400 --> 0:08:13.840 to see what happens, and a little bit of extra 0:08:13.920 --> 0:08:17.000 cash coming in next quarter could be a benefit for them. 0:08:17.080 --> 0:08:19.600 Well, high income consumers are spending in part because of 0:08:19.640 --> 0:08:22.000 the wealth effect, and Marie has told us several times 0:08:22.000 --> 0:08:24.160 about how the S and P five hundred closed at 0:08:24.160 --> 0:08:25.520 a record high for a thirty. 0:08:25.400 --> 0:08:27.200 Ninth time on Wednesday. 0:08:27.680 --> 0:08:30.520 If there's a sudden market pullback, if we see those 0:08:30.720 --> 0:08:33.559 gains unravel, how quickly could we see the wealth effect 0:08:33.760 --> 0:08:34.600 work in reverse. 0:08:35.960 --> 0:08:39.840 Yeah, I think that's actually something we really need to watch, Scarlett. 0:08:39.920 --> 0:08:43.800 So you're right, lower income consumers spend based on what 0:08:43.840 --> 0:08:46.600 they're making, right, what their salaries are, and what the 0:08:46.679 --> 0:08:49.679 job market looks like. High income consumers do spend based 0:08:49.679 --> 0:08:51.559 on wealth effects. So as long as the market. 0:08:51.360 --> 0:08:53.240 Is doing well, they're going to spend. 0:08:53.559 --> 0:08:56.760 If we see that pullback, if we see the volatility 0:08:56.800 --> 0:08:58.960 that we think we'll see in twenty twenty six, you 0:08:59.000 --> 0:09:01.640 should see the high come consumer pull back a little bit. 0:09:01.760 --> 0:09:05.160 They won't stop spending completely because they still have the 0:09:05.280 --> 0:09:08.680 job component there, but as they see housing prices maybe 0:09:08.679 --> 0:09:10.199 start to come back a little bit, as they see 0:09:10.240 --> 0:09:13.160 the market pull back a little bit, their spending will 0:09:13.200 --> 0:09:14.600 start to shift slightly. 0:09:14.640 --> 0:09:16.040 I think that means you have to be a little 0:09:16.040 --> 0:09:16.520 bit more. 0:09:16.400 --> 0:09:21.880 Cautious on those more expensive retail companies that are out there. 0:09:22.080 --> 0:09:25.520 Those high income retail companies will probably suffer a little 0:09:25.520 --> 0:09:28.040 bit if that happens, so there'll be a much lower 0:09:28.120 --> 0:09:29.559 level of spending that will occur. 0:09:29.679 --> 0:09:31.600 Soterory, let's just send on the big debate going into 0:09:31.600 --> 0:09:34.000 next year in financial markets, in terms of the fed's 0:09:34.120 --> 0:09:37.000 next mute move, what are you pricing in for twenty 0:09:37.120 --> 0:09:37.679 twenty six. 0:09:38.640 --> 0:09:41.680 Yeah, we're really only pricing in one cut for twenty 0:09:41.720 --> 0:09:44.959 twenty six. We think they'll hold in January just because 0:09:45.000 --> 0:09:47.439 there's still a lot of unknowns going on. We did 0:09:47.480 --> 0:09:50.000 have a strong GDP number, but they do have a 0:09:50.040 --> 0:09:53.760 whole month of January to wait. They'll get more inflation numbers, 0:09:53.800 --> 0:09:54.960 they'll get more job numbers. 0:09:54.960 --> 0:09:55.840 We'll see what happens. 0:09:56.000 --> 0:09:59.040 But the debate here, I really think is where is 0:09:59.160 --> 0:10:01.640 neutral and how accommodative are. 0:10:01.520 --> 0:10:04.680 We right now? I think that's the underlying battle that's 0:10:04.720 --> 0:10:05.120 going on. 0:10:05.240 --> 0:10:08.080 It's a FED and how accommodative do they want to 0:10:08.120 --> 0:10:11.280 be in order to not stoke kind of the flames 0:10:11.280 --> 0:10:13.960 of inflation. That'll be the battle we continue to see. 0:10:14.000 --> 0:10:16.840 We think we're probably closer to neutral than what many 0:10:16.960 --> 0:10:20.400 people think, which means they'll be fewer rate cuts going forward. 0:10:22.280 --> 0:10:25.720 Stay with US Multilemberg. Savannah's coming up off to this. 0:10:35.080 --> 0:10:38.000 Here's the latest US consumer confidence dropping for a fifth 0:10:38.040 --> 0:10:40.880 consecutive month in December, according to fresh data from the 0:10:40.880 --> 0:10:44.200 Conference Board. Aaron McLaughlin of the Conference board writing expect 0:10:44.240 --> 0:10:47.040 real GDP growth to weaken amid a fragile balance of 0:10:47.080 --> 0:10:50.920 resilient labor markets and softening consumer demand due to tariff 0:10:51.000 --> 0:10:54.080 induced inflation. Aaron joins us now erin thank you so 0:10:54.160 --> 0:10:56.240 much for joining us, and hopefully you had a lovely holiday. 0:10:56.440 --> 0:10:59.559 When it comes to the consumer and the latest readout, 0:11:00.040 --> 0:11:02.720 I was struck by how more consumers are actually starting 0:11:02.800 --> 0:11:05.760 to actually be also worried about keeping their job. 0:11:06.760 --> 0:11:10.880 Yes, so we find that consumers really tighten up when 0:11:10.920 --> 0:11:16.400 they don't have jobs, And so the concept of deteriorating 0:11:16.480 --> 0:11:22.920 business conditions, the weight of tariffs, and inflation all definitely 0:11:23.240 --> 0:11:29.199 influence consumer spending and consumer sentiment. But concepts around rising unemployment, 0:11:29.240 --> 0:11:31.400 we've seen it tick up now to four point six 0:11:31.960 --> 0:11:34.640 in the concepts there are less jobs out there, jobs 0:11:34.640 --> 0:11:38.280 are not as plentiful, will really weigh on the consumer. 0:11:38.360 --> 0:11:39.760 In twenty twenty six. 0:11:39.960 --> 0:11:42.880 We know that government shutdown did not help matters. It 0:11:42.920 --> 0:11:45.560 made people feel more nervous, and it certainly created a 0:11:45.559 --> 0:11:48.640 lot of uncertainty. And I know it's over, but I 0:11:48.720 --> 0:11:51.920 bring this up because we could face another government shutdown 0:11:51.960 --> 0:11:53.240 in January as well. 0:11:53.360 --> 0:11:55.320 So how do we fold in. 0:11:55.360 --> 0:11:58.199 The government shutdown and what that does to consumer sentiment 0:11:58.360 --> 0:12:01.439 even as it's become a more freaking occurrence. 0:12:03.080 --> 0:12:05.280 Well, that was the longest shutdown we've had in modern 0:12:05.360 --> 0:12:08.480 history that we just had. It certainly impacted economists, it 0:12:08.600 --> 0:12:14.680 impacted consumers, especially this year. Consumers are just facing it's 0:12:14.720 --> 0:12:22.080 sort of constant news about politics, geopolitics, tariffs, inflation, and 0:12:22.120 --> 0:12:26.160 that constant news impacts them, and so another government shutdown 0:12:26.200 --> 0:12:29.600 will certainly also impact them, even if they don't feel 0:12:29.600 --> 0:12:32.960 the immediate effects of a shutdown. And sort of the 0:12:33.000 --> 0:12:36.160 news today and the concept that there could be rising 0:12:36.240 --> 0:12:40.760 oil prices in oil and gasoline excluding fuel oil for 0:12:40.880 --> 0:12:46.640 homes has been pretty low as on the inflation spectrum, 0:12:46.679 --> 0:12:50.440 but even news like we're hearing today, if prices go up, 0:12:50.640 --> 0:12:52.360 how does that impact consumers? 0:12:53.240 --> 0:12:55.160 The administration has been out there trying to paint a 0:12:55.160 --> 0:12:58.439 picture of a robust economy. Howard Lutnik, the Commerce Secretary, 0:12:58.520 --> 0:13:01.600 went on to talk about the third quarter of growing 0:13:01.600 --> 0:13:03.800 more than four percent and how that was a sign 0:13:03.960 --> 0:13:07.680 that things were better. He also mistakenly equated that with 0:13:07.760 --> 0:13:12.120 an increase in people's pay as well. How is that contradiction, 0:13:12.160 --> 0:13:14.880 that seeming contradiction of data that shows the economies holding well, 0:13:15.040 --> 0:13:19.520 holding up well, balancing with this sense from consumers that 0:13:19.559 --> 0:13:22.319 things are not getting better necessarily, especially on the job front. 0:13:23.360 --> 0:13:26.440 Well, consumers are not paying attention to GDP the way 0:13:26.440 --> 0:13:30.480 that we are in the way that economists and business 0:13:30.520 --> 0:13:34.040 and financial markets are necessarily paying attention to these readings. 0:13:34.240 --> 0:13:37.920 What they really feel is the effects of prices for 0:13:38.000 --> 0:13:41.400 things that they buy every week, every day, every month. 0:13:41.679 --> 0:13:45.200 And so those things include coffee, which has gone up 0:13:45.240 --> 0:13:49.320 in price twenty to forty percent, Beef and other proteins 0:13:49.360 --> 0:13:51.959 at the grocery store have gone up, and some big 0:13:52.080 --> 0:13:55.720 structural costs have really not come down, the cost of 0:13:55.760 --> 0:13:59.880 housing and in particular insurance, and the price of a more, 0:14:00.280 --> 0:14:02.800 while it has come down a little bit, is nowhere 0:14:02.840 --> 0:14:07.440 near as low as it was pre pandemic. And so 0:14:07.559 --> 0:14:10.880 when you see some of these really big price structural 0:14:10.960 --> 0:14:14.199 changes happen, that also weighs on consumer sentiment. 0:14:14.600 --> 0:14:18.360 What about when you look at trade induced inflation? 0:14:18.800 --> 0:14:20.600 What are you looking at for next year? Given the 0:14:20.600 --> 0:14:21.200 fact that. 0:14:21.200 --> 0:14:27.120 This administration will be renegotiating USMCA. 0:14:25.240 --> 0:14:30.640 We really think that federal policy, particularly around trade and tariffs, 0:14:30.680 --> 0:14:33.680 is going to have a huge impact on consumers next year. 0:14:34.400 --> 0:14:39.160 Our three largest trading partners are Mexico, followed by China, 0:14:39.240 --> 0:14:43.320 followed by Canada. Those three trading partners, our agreements with 0:14:43.360 --> 0:14:45.560 them are not settled. You know. We sort of kick 0:14:45.600 --> 0:14:48.160 the can down the road twelve months from China from 0:14:48.200 --> 0:14:51.640 November of this past year to November of next year. 0:14:51.720 --> 0:14:55.760 And then the USMCA, which is essentially NATA version two, 0:14:56.120 --> 0:15:00.760 will enter a version three phase as it can be negotiated, 0:15:00.920 --> 0:15:03.760 and that deadline is in July. And there is so 0:15:04.040 --> 0:15:07.480 much that we just trade between our three largest trading 0:15:07.520 --> 0:15:11.520 partners that there is really the potential for a lot 0:15:11.720 --> 0:15:16.120 higher inflation and price pressures on consumers for some items 0:15:16.120 --> 0:15:21.480 that we get that again, are include non discretionary as 0:15:21.520 --> 0:15:23.560 well as discretionary items like food. 0:15:24.320 --> 0:15:26.440 Stay with US mult Bloomberg surveillance. 0:15:26.520 --> 0:15:38.960 Coming up after this, Ukrainian President Vladimir Lensky saying he 0:15:38.960 --> 0:15:39.480 plans to. 0:15:39.520 --> 0:15:41.200 Meet with Trump in the coming days. 0:15:41.440 --> 0:15:44.560 Zlensky signaling a lot could be decided before the new year. 0:15:44.640 --> 0:15:46.800 After a Christmas Day sit down with. 0:15:46.960 --> 0:15:50.320 US envoys Steve Wikoff and Jared Kushner, Ed Mills of 0:15:50.400 --> 0:15:54.040 Raymond James joins US. Now, so, ed, you do have 0:15:54.200 --> 0:15:56.920 Zelenski looking like he's going to be going over to Florida, 0:15:56.960 --> 0:15:58.960 mar A Laga, where the President will be for the 0:15:59.000 --> 0:16:02.680 remainder of the Smith New Year holiday. Do you think 0:16:02.720 --> 0:16:06.760 potentially we could get a deal before twenty twenty six, a. 0:16:06.760 --> 0:16:07.760 Marie, It's possible. 0:16:07.840 --> 0:16:11.120 I think that there is probably more to work out 0:16:11.160 --> 0:16:14.680 on the Russian side. I think Zelenski is trying to 0:16:14.840 --> 0:16:19.160 find what he can get with the American contingent here 0:16:19.200 --> 0:16:21.760 because I think he wants to put pressure on Putin 0:16:22.280 --> 0:16:25.760 right now. The twenty point plan that Zelensky and the 0:16:25.800 --> 0:16:31.040 Americans have agreed to is probably unacceptable to Putin. This 0:16:31.120 --> 0:16:33.160 here is trying to reverse some of the pressure that 0:16:33.240 --> 0:16:36.840 has come onto him in the recent months, especially that 0:16:37.000 --> 0:16:40.800 kind of pre Thanksgiving deadline that the Trump administration had 0:16:40.800 --> 0:16:43.640 put on him. So I'd say there's going to be progress, 0:16:44.080 --> 0:16:47.920 But I don't think people are really expecting that what 0:16:48.520 --> 0:16:52.080 Zelensky and Trump workout will be acceptable to Putin, at 0:16:52.160 --> 0:16:54.320 least in the near term. We probably need at least 0:16:54.320 --> 0:16:56.360 one more round of this before things get settled. 0:16:56.400 --> 0:16:59.320 Well, as you we're speaking, Dimitri Peskov is speaking right now, 0:16:59.360 --> 0:17:01.960 and he's saying Russia has analyzed the information on the 0:17:01.960 --> 0:17:05.320 peace plans, according to the TAST news agency, or you 0:17:05.400 --> 0:17:09.160 shake off. They're saying that contacted US representatives. He's been 0:17:09.400 --> 0:17:12.399 one of the main negotiations. Senior Russian diplomat at the 0:17:12.480 --> 0:17:15.560 table and the Kremlin saying it is contact the US 0:17:15.720 --> 0:17:18.800 on Ukraine peace plan. Do you think Putin is just 0:17:18.800 --> 0:17:22.280 playing for time or do you think they are serious 0:17:22.600 --> 0:17:24.080 about getting to an agreement. 0:17:25.200 --> 0:17:27.280 I think that they are open to an agreement. I 0:17:27.280 --> 0:17:30.280 think that they are really going to be looking at 0:17:30.280 --> 0:17:32.480 these territorial concessions. 0:17:32.840 --> 0:17:34.520 And I think this is really what it comes down to. 0:17:34.440 --> 0:17:38.399 Emory, because what is the future of the Dumbos region. 0:17:38.840 --> 0:17:42.880 How much does Ukraine have to fully kind of acknowledge 0:17:42.920 --> 0:17:46.560 that Russia has kind of certain parts of this territory. 0:17:46.680 --> 0:17:49.119 How much of it is a de militarized zone. How 0:17:49.200 --> 0:17:52.040 much does Ukraine get to control this, How much does 0:17:52.880 --> 0:17:53.960 Russia get to control this? 0:17:54.240 --> 0:17:55.800 I think that's the critical issue. 0:17:56.200 --> 0:17:58.960 The second issue is even if you kind of create 0:17:59.000 --> 0:18:01.800 a de militari zone, what are the security guarantees. I 0:18:01.800 --> 0:18:04.600 think that Zelensky and Ukraine are willing to give up 0:18:05.440 --> 0:18:08.919 more of that territory, at least as a demilitary size 0:18:09.000 --> 0:18:10.800 zone if they get. 0:18:10.600 --> 0:18:12.440 Those kind of security guarantees. 0:18:12.760 --> 0:18:15.520 But if there's not the security guarantees, they're not willing 0:18:15.520 --> 0:18:17.600 to do that. And I do think that Putin is 0:18:17.640 --> 0:18:20.359 not going to be okay with the security guarantees that 0:18:20.440 --> 0:18:23.200 Zelensky wants, and are probably not going to be okay 0:18:23.200 --> 0:18:27.399 with a demilitary zone. They want more territorial concessions, I 0:18:27.400 --> 0:18:29.639 think than what the US and Ukraine are willing to 0:18:29.640 --> 0:18:30.320 give at this point. 0:18:30.400 --> 0:18:33.000 So these are all pretty familiar sticking points thinks that 0:18:33.040 --> 0:18:36.280 have really locked both sides into their respective positions for 0:18:36.359 --> 0:18:39.840 months now. And what about Europe Henry was mentioning earlier, 0:18:40.040 --> 0:18:41.960 Europe is kind of missing in all of this. And 0:18:42.160 --> 0:18:46.360 if Zelensky goes to mar Lago on Sunday, does your 0:18:46.440 --> 0:18:47.440 play any role in this? 0:18:48.480 --> 0:18:48.840 They could? 0:18:48.920 --> 0:18:51.000 I think what we've seen, Scarlett is that Europe has 0:18:51.040 --> 0:18:54.080 played a bit of a backstop. 0:18:53.680 --> 0:18:54.760 To these negotiations. 0:18:54.800 --> 0:18:57.199 If they seem as if they are going too far 0:18:57.840 --> 0:19:01.280 towards Russia, if they are seen going kind of to 0:19:03.200 --> 0:19:07.720 aggressive towards Ukraine, there are kind of key constituencies within 0:19:07.760 --> 0:19:10.320 Europe that step up. I do think what we're going 0:19:10.359 --> 0:19:12.400 to see if we do have a demilitarized zone. 0:19:12.760 --> 0:19:15.320 How much do NATO or European forces. 0:19:15.640 --> 0:19:18.440 I lean more towards European forces, so it's not seen 0:19:18.440 --> 0:19:22.240 as a specific NATO operation could be part of that 0:19:22.320 --> 0:19:24.800 security guarantee in that area. But they just want to 0:19:24.800 --> 0:19:26.920 make sure that Ukraine is not on the wrong end 0:19:26.920 --> 0:19:29.560 of any of these negotiations, so they stay out for now, 0:19:29.760 --> 0:19:31.879 but if it goes in the wrong direction, they step 0:19:31.960 --> 0:19:34.359 up that diplomatic pressure on the US envoy. 0:19:34.480 --> 0:19:37.560 Okay, And of course we are anticipating a visit between 0:19:37.840 --> 0:19:42.120 Zelenski and Trump in the coming days. According to Vladimir Zelenski, 0:19:42.240 --> 0:19:43.800 I also want to get your take on what happened 0:19:43.840 --> 0:19:46.640 over the holiday, which is the US launching Christmas Day 0:19:46.720 --> 0:19:51.040 military strikes in Nigeria against the ISIS targets. And of 0:19:51.040 --> 0:19:53.800 course we had known that in November the President threatened 0:19:54.000 --> 0:19:57.520 possible military action if the government did not halt the 0:19:57.640 --> 0:19:58.800 killing of Christians. 0:19:59.359 --> 0:20:00.159 Talk a little bit. 0:20:00.040 --> 0:20:02.520 About why now and whether this is a one time 0:20:02.640 --> 0:20:05.399 action or this is the start of something more sustained. 0:20:06.280 --> 0:20:08.439 Yeah, so President Trump has said this is at the 0:20:08.440 --> 0:20:11.719 request of the government. He does view kind of the 0:20:11.760 --> 0:20:14.520 defeat of ISIS during his first term as his signature 0:20:15.280 --> 0:20:19.760 geopolitical kind of military achievement of that first term. To 0:20:19.800 --> 0:20:22.720 the extent that he is going to have requests and 0:20:22.800 --> 0:20:25.280 it is against ISIS, I don't think that there's anything 0:20:25.320 --> 0:20:29.399 that he would hold back trying to go after that group. 0:20:29.920 --> 0:20:31.960