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Speaker 1: Now, want to get to what was a red sticky
Speaker 1: here at Bloomberg about two hours ago. This is when
Speaker 1: a big headline crosses the Bloomberg terminal.
Speaker 3: And that's that Amazon has submitted an offer to purchase TikTok.
Speaker 3: The company submitted a bid to the White House to
Speaker 3: purchase the app from its Chinese owner. This according to
Speaker 3: a perfect person familiar with the matter. The company did
Speaker 3: send its proposal to Vice president Jad Evance. He's heading
Speaker 3: up efforts to help facilitate a sale of the video platform.
Speaker 3: Commerce Secretary Howard Lutnik two. This, according to the people,
Speaker 3: so with what we know and why Amazon might want
Speaker 3: TikTok with us. As Bloomberg News Technology and e commerce
Speaker 3: reporter Spencer Sober, he follows Amazon very closely been reporting
Speaker 3: on this company for years, he joins us of course
Speaker 3: from our Seattle bureau. Spencer, why would Amazon want TikTok?
Speaker 3: What would it do with TikTok?
Speaker 4: So if you think about it in the most like
Speaker 4: the simplest terms, right, people spend a lot of time
Speaker 4: on TikTok and people spend a lot of money on Amazon,
Speaker 4: and both of them have been trying to kind of
Speaker 4: become more more of the other. So if Amazon were
Speaker 4: to gain We're to buy TikTok, it would be very
Speaker 4: beneficial just in terms of having people's attention where you know,
Speaker 4: right now they've got a lot of wallets share, but
Speaker 4: it's really a site where people dip in, buy what
Speaker 4: they need, dip out, which you know, which has been
Speaker 4: very good for Amazon. But if it could get people
Speaker 4: to linger around and be entertained there, all the better,
Speaker 4: you know, people spend even more and its advertising business
Speaker 4: will be will be that much more lucrative.
Speaker 1: You know, I think about kind of the merge of
Speaker 1: commerce right with TikTok. To me, it makes a lot
Speaker 1: of sense.
Speaker 2: Is that a big part of it?
Speaker 1: Spencer?
Speaker 4: Yeah, exactly. You think about like Amazon is a place
Speaker 4: you go when you're ready to buy something right, You
Speaker 4: don't really you don't really go there to kill time.
Speaker 4: You don't really go there to be inspired or discover things.
Speaker 4: But those are things that you do on TikTok. You
Speaker 4: might just kind of scroll through TikTok to kill time
Speaker 4: or follow people you think are funny or entertaining, but
Speaker 4: you also see products on there, you know, And so
Speaker 4: TikTok is really trying to be a destination for discovering products,
Speaker 4: which Amazon never really has been. So that would be
Speaker 4: kind of the you know, the match that Amazon would
Speaker 4: be looking for.
Speaker 3: Not to say though that the company hasn't tried to
Speaker 3: make it a place to discover with the social first
Speaker 3: videos and the option in the app to sort of
Speaker 3: have that content that's generated to try to create this
Speaker 3: social shopping experience and certainly not something that I spent
Speaker 3: a lot of time doing, but Amazon is certainly trying
Speaker 3: to do that. Hey, spencer, before we let you go
Speaker 3: regulatory issues around this, potentially, especially with regard to their
Speaker 3: past contentious relationship that Bezos had with this administration.
Speaker 4: Yeah, well that's what you think about. You know that
Speaker 4: they're under any trust scrutiny, and they you know, there
Speaker 4: was any trust scrutiny about them buying like eye Robot,
Speaker 4: you know, so this would be like a massive, massive acquisition.
Speaker 4: And does that does is there like a new age
Speaker 4: in the Trump administration that would be more favorable to
Speaker 4: these kind of big deals, And especially since the administration
Speaker 4: is directly involved in making this happen with jd Vance
Speaker 4: kind of running running the show and running these bids,
Speaker 4: that that makes it more possible for Amazon to swing
Speaker 4: big on acquisitions.
Speaker 1: One thing I wonder the bid first reported by the
Speaker 1: New York Times. You guys to hear at Bloomberg reporting
Speaker 1: this at that it's not being considered seriously by the administration.
Speaker 1: According to one person in the know, the company has
Speaker 1: declined to comment. How serious Amazon, you know, I mean,
Speaker 1: I'm calling you Amazon because your Amazon spencer. How serious
Speaker 1: spencer should investors be taking this?
Speaker 4: Yeah, that's the million dollar question. And there's a lot
Speaker 4: of eleventh hour bids coming in, like after the news
Speaker 4: broke about Amazon. Now there's a couple others who have
Speaker 4: been reported, like app love in and maybe some consortium
Speaker 4: that includes like OnlyFans. So there's been a lot of
Speaker 4: eleventh hour bids and there can be reasons for companies
Speaker 4: to do that, even if they think they're a long shot,
Speaker 4: you know one, it might just give them kind of
Speaker 4: a seat at the table to figure out what's happening
Speaker 4: and how this thing might be carved up in case
Speaker 4: they end up interesting, you know, competing with TikTok. And
Speaker 4: then another reason is just to try to up the
Speaker 4: price in the event. Hey, if I'm not going to
Speaker 4: get this thing, maybe at least make the person who
Speaker 4: does pay a little more.
Speaker 3: That's what I was thinking, especially if Oracle is a
Speaker 3: serious bidder here, Spencer, maybe this company Amazon just wants
Speaker 3: to say, hey, we want or Oracle is going to
Speaker 3: bid for this, and we're competitor Oracle, we want them
Speaker 3: to pay more than they're going to pay.
Speaker 4: Yeah, that's that's definitely part of the play, as well
Speaker 4: as well as some visibility into into what's happening, because
Speaker 4: this is still a very complicated process. You need you
Speaker 4: need uh, you need to approval, not only a blessing
Speaker 4: from the White House, but you're gonna need Bike Dance
Speaker 4: to buy in and the Chinese government to buy in.
Speaker 4: So there's a lot of players here, and some you know,
Speaker 4: I imagine anyone, you know, if they think they're a
Speaker 4: long shot. They just be curious about what the heck's
Speaker 4: going on, and putting in a putting in a bid
Speaker 4: might give them more visibility than sitting it out.
Speaker 1: But we should know something at least by Friday, right
Speaker 1: April fifth, because that's the deadline, is that right, third?
Speaker 5: Fourth?
Speaker 6: Fifth?
Speaker 1: Actually Saturday?
Speaker 5: I think it is, right.
Speaker 3: So sometimes you just got up the calendar, open out.
Speaker 4: And that's the and that's the second that's the second deadline.
Speaker 4: So he knows if we'll have another deadline, you know
Speaker 4: what I mean. It's like these these deadlines can come
Speaker 4: and go. But but yeah, that's the that's the date
Speaker 4: for now, and supposedly there might be some news coming
Speaker 4: today about it.
Speaker 1: Yeah, we understand that the president is meeting with his
Speaker 1: advisors about it, right. Thank you so appreciate it. Spencer
Speaker 1: soper As to mention, been following Amazon for so many years,
Speaker 1: understands this company's Bloomberg News Technology and e commerce reporter.
Speaker 1: Joining us out there in Seattle.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Applecarplay and Android Auto with the Bloomberg Business app
Speaker 2: or watch us live on YouTube.
Speaker 3: Okay, so everything we've done for the last couple of
Speaker 3: weeks has certainly been through the lens on the backdrop
Speaker 3: of US tariffs. It's something that touches all of the
Speaker 3: investment in business worlds, including potentially the AI investment world.
Speaker 3: And today at Bloomberg headquarters, our Bloomberg Intelligence team is
Speaker 3: hosting Bloomberg's fourth Generitive AI Conference, and it's an event
Speaker 3: that looks at Jenai posts the Deepseek news earlier this
Speaker 3: year and Carol as a reminder for all of us
Speaker 3: that really shook up the narrative around the AI build out.
Speaker 1: Absolutely, we are featuring a couple of speakers from the event,
Speaker 1: and that includes our next guest, delighted to have with us,
Speaker 1: Dave Brown, vice president AWS Computing and Networking at Amazon Services,
Speaker 1: joining us here in studio. Dave, good to have you here.
Speaker 7: It's great to be here. Thank you for having me.
Speaker 1: There's so much going on there is I do need
Speaker 1: to ask you. We know this isn't your world. Nothing
Speaker 1: happens in a bubble. You were just listening to Spencer.
Speaker 1: I thought I saw you chuckle at one point. The
Speaker 1: report about Amazon putting in a last minute bit. You know,
Speaker 1: I think about AI, it is about content, it is
Speaker 1: about data, and I just wonder how might a social
Speaker 1: media site like TikTok makes sense in an AI world,
Speaker 1: you know, whether it's at Amazon or somewhere else.
Speaker 5: Well, you know, in terms of Amazon's bid, that smells
Speaker 5: something I'm able to comment about. Obviously, no madmoster corporate
Speaker 5: about this, nothing at all.
Speaker 7: I walked into the studio and I saw the news.
Speaker 5: So but you know, Bikedons has been a really good
Speaker 5: customer of AWS and honestly a customer that's actually used
Speaker 5: a lot of compute and he's now using a lot
Speaker 5: of AI. And one of the things very excited about
Speaker 5: what they've been doing, and unrelated to any of the
Speaker 5: news that you might be reporting, is they've used a
Speaker 5: lot of the customer accelerators that we've that we've built
Speaker 5: at AWS. One of the challenges with AI, and you know,
Speaker 5: is how do we get the cost down? How do
Speaker 5: we make sure that it is affordable for every company
Speaker 5: out there that thinks they could use it in some
Speaker 5: way that would change their product. But really we have
Speaker 5: to be able to get the cost down. And one
Speaker 5: of the ways we can do that is through things
Speaker 5: like you saw with deep seek, improving the models, making
Speaker 5: the model simpler than making them easy to train. But
Speaker 5: the other way is to build different silicon, build silicon
Speaker 5: that's able to get the cost down for customers. And
Speaker 5: so Biketones has been a big user of our custom
Speaker 5: silicon in the very early days of Inferential which improved
Speaker 5: inference models. They've also consumed Graviton, which is our customer
Speaker 5: on chip, and they also using our Trainium chips as well,
Speaker 5: So we work very closely with Byketons.
Speaker 3: From that point of view, how do you make sure
Speaker 3: that you keep a company such as bytans as a
Speaker 3: customer when there is so much competition in this space?
Speaker 7: I mean, think about it from the.
Speaker 3: Perspective of the three biggest players you of course Microsoft,
Speaker 3: Azure and then Google Cloud and we've seen a big investment.
Speaker 3: We'll talk about that for Google just in the last
Speaker 3: couple of weeks. How do you make sure that you
Speaker 3: stay ahead in your view of the pack and keep
Speaker 3: these customers from jumping ship.
Speaker 5: I think there are a few things. I think one
Speaker 5: of it is innovation. You know, the cloud has just
Speaker 5: brought an enormous amount of innovation in to the corporate world.
Speaker 3: But some people might look at this and say, is
Speaker 3: this a commodity at this point?
Speaker 5: I don't think so, because my next point would be execution.
Speaker 5: An execution really rarely matters. It's one thing to say
Speaker 5: we have a hard.
Speaker 7: Mean I feel like no.
Speaker 1: For yeah, absolutely executive execution all the time.
Speaker 7: What does it mean in your world?
Speaker 5: Well, what it does mean is, you know, bring running AI.
Speaker 5: For example, so the servers behind AI, whether you're running
Speaker 5: an Invertio GPU or you're running some customs Silicon such
Speaker 5: as our Tranium chip, they're not easy machines to run.
Speaker 5: They're incredibly complicated, they're incredibly hard to make sure that
Speaker 5: they're highly available, and they also need incredibly advanced networking capability.
Speaker 5: So we've had to build network capabilities to be able
Speaker 5: to bring hundreds of thousands of these accelerators together in
Speaker 5: a single cluster. Now at AWS, we spend a lot
Speaker 5: of time making sure that we provide those clusters and
Speaker 5: those those systems to be as highly available as possible
Speaker 5: for our end customer. And so when you choose your technology,
Speaker 5: if you're running on a you know, a solution, whether
Speaker 5: it's something you've built yourself or a provider, and that's
Speaker 5: not working for you. That's what I mean by execution.
Speaker 5: It has to be flawless and it has to work,
Speaker 5: and at AWS we think that's one of the ways
Speaker 5: we're able to differentiate ourselves.
Speaker 1: Are you at all worried about overbuilding? Like obviously with
Speaker 1: Deep Seek, the narrative all of a sudden, like in
Speaker 1: a heartbeat, switched in terms of, well, maybe we can
Speaker 1: do this more cheaply, maybe it doesn't require the buildup
Speaker 1: that we've been talking about for more than two years.
Speaker 1: Are you worried about overbuilding? Are we possibly in a
Speaker 1: bubble when it comes.
Speaker 5: To well, I think from our point of view, Sydney, Well,
Speaker 5: from our point of view, we're not really listening to
Speaker 5: sort of the narrative. I think the narrative is very interesting.
Speaker 5: We've been following it. What we're listening to is customers
Speaker 5: and what a customers want to do with AI. There
Speaker 5: certainly no shortage of customer demand for the chips right,
Speaker 5: whether it's in video chips so uncustomed silicon you've seen partnerships.
Speaker 1: No doubt about that demand. And the demand is smart
Speaker 1: because it's being put to use and it's going to
Speaker 1: be monetized. Yeah, no, worry.
Speaker 5: Well, I mean the other thing is you just have
Speaker 5: to you have to make good investments. And so the
Speaker 5: trick is to say, what are we building in terms
Speaker 5: of customer demand? Not are we building in terms of
Speaker 5: the narrative? And I think from a customer demand point
Speaker 5: of view, it's very very strong. We expect it to
Speaker 5: continue to grow, and we're very comfortable with the investments
Speaker 5: that we're making.
Speaker 3: So it brings us back to the way that we
Speaker 3: started this conversation. We're speaking to you on Wednesday, April second,
Speaker 3: ahead of President Trump's announcement that's set to come at
Speaker 3: four pm Wall Street time from Washington, DC, So we
Speaker 3: don't know what he's going to say at this point.
Speaker 3: How do you watch an event such as that? How
Speaker 3: do you watch tariffs? How does that affect your world?
Speaker 7: Yeah?
Speaker 5: I think one of the things when you're running what
Speaker 5: is probably one of the largest supply chain supply chains
Speaker 5: in the world, right, we have to think about every
Speaker 5: single component, whether it costs a few cents or it's
Speaker 5: millions of dollars.
Speaker 7: Within our You're talking about.
Speaker 3: The aw aws, not the retails, not the retail session
Speaker 3: it's certainly effective.
Speaker 7: The retail side is.
Speaker 5: Certainly helpful to us, and it's taught us a lot
Speaker 5: about how to run an effective supplies right and so
Speaker 5: on the AWS side. Running a supply chain, we've got
Speaker 5: to think about every single possible outcome, you know, the
Speaker 5: sort of things that you're talking about now with regards
Speaker 5: to track tariffs or you know, global uncertainty, whatever it
Speaker 5: might be, we're going to think about how they would
Speaker 5: affect our supply chain. And we've put mitigating steps in place,
Speaker 5: and we're thinking about these as we to make sure
Speaker 5: that any outcome means that we can still serve our customers.
Speaker 5: What are some of those mitigating steps that you've put
Speaker 5: in place. There's als of things you can do from
Speaker 5: a supply chain point of view. A lot of the
Speaker 5: sil can manufacture ourselves. We always think about multiple multiple suppliers,
Speaker 5: like are you stockpiling this stuff right now? I don't
Speaker 5: believe we're stockpiling. But there's many many things that we're
Speaker 5: doing to ensure that we're going to be.
Speaker 7: Okay, such as.
Speaker 5: Such as making sure that we have multiple locations for service,
Speaker 5: such and making sure that we have a cost structure
Speaker 5: that we think is maintainable for our end customer. It's
Speaker 5: just it's supply chain technology based.
Speaker 1: Is most of your supply chain safe in terms of
Speaker 1: let's say it's an all out trade war.
Speaker 5: The reality is I think in the IT space that
Speaker 5: we're where depending on global supply chain, not just a
Speaker 5: WS but the world. But our chips are made most
Speaker 5: of them are manufactured in the Far East, most of
Speaker 5: the you know, the technology and cloud comes from the US,
Speaker 5: and the realities we're living in a global supply chain
Speaker 5: and we're going to have to take whatever the announcement
Speaker 5: might be later today and understand how that affects the
Speaker 5: supply chain that we've built out to be as redundant
Speaker 5: as it possibly can be.
Speaker 7: But we're going to have to see what happens.
Speaker 3: Is there a spectrum in terms of the cost hit
Speaker 3: that you think you could take as a result of
Speaker 3: these tariffs.
Speaker 5: That's not something that I think we've been discussing. I mean,
Speaker 5: I think there will be things we'll have to think through,
Speaker 5: but I don't have any sort of spectrum in mind.
Speaker 3: What about thinking about raising prices for customers as a
Speaker 3: result of higher inputs.
Speaker 5: You know, that's that's something I think a similar situation
Speaker 5: would be the sort of the energy prices increases that
Speaker 5: we saw, you know, during the COVID time there was
Speaker 5: energy shortage and slightly off the COVID in Europe, and
Speaker 5: that was a big question back then, as you know,
Speaker 5: is able is going to raise prices because we've we've
Speaker 5: seen energy prices spike in Europe. Other providers did raise
Speaker 5: prices at that time, and from an als point of view,
Speaker 5: we were able to actually not raise prices on our
Speaker 5: customers and ride out that increasing commodity prices and we
Speaker 5: were able to get back to, you know, a better
Speaker 5: cost structure for ourselves after this, and that's really what
Speaker 5: we're looking to do. We'll have to see what happens
Speaker 5: later today and see how supply, how supply chain holds up.
Speaker 1: I'm also curious about deep Seek in terms of, you know,
Speaker 1: what might be a more efficient AI model, how that
Speaker 1: is affecting the design of your own chips at aws
Speaker 1: and kind of how you think about how AWF offers
Speaker 1: compute and compute services and so on.
Speaker 5: Yeah, deep Seek itself, you know, it was good technology.
Speaker 7: It came out. I think it surprised a lot of folks.
Speaker 5: We're expecting to see these kinds of significant improvements step FUNCTIONINGY,
Speaker 5: you weren't shocked by deep seek, Well, certainly the news
Speaker 5: it wasn't something that everybody knew about. But what I
Speaker 5: wasn't just shocked about is that we're going to see
Speaker 5: these these order the magnitude improvements in models. I'm expecting
Speaker 5: more like the technology is so new still and we
Speaker 5: are going to see massive improvements. And I think you
Speaker 5: know the one thing is when you do see a
Speaker 5: cost reduction in these models, what it does do is
Speaker 5: it unlocks companies to be able to deploy more and
Speaker 5: so why it's cheaper to do it just means that
Speaker 5: you can do more of it.
Speaker 7: And that's one of the reasons why we're not.
Speaker 5: Worried about some of the investments we've made because we
Speaker 5: can see the demand. We know if the price goes down,
Speaker 5: our customers are.
Speaker 7: Going to do more.
Speaker 5: They're going to change the user experience for more of
Speaker 5: their customers, and so you know, that's what really excites us.
Speaker 7: About the opportunity really cool stuff.
Speaker 1: Great to talk with someone like yourself who's kind of
Speaker 1: front row seat to all that's going on in AI.
Speaker 5: Dave, thank you so much ye, thank you for your time.
Speaker 4: Dave Brown.
Speaker 1: He's the vice president of a WS Computing and Networking
Speaker 1: at Amazon Web Services.
Speaker 2: This is the Bloomberg Business Week Podcast. Listen live each
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Speaker 2: Just Say Alexa played Bloomberg eleven thirty.
Speaker 1: All right, now, let's get to some of the news
Speaker 1: that certainly has caught our attention. This has to do
Speaker 1: with New York City Mayor Eric Adams, and that is
Speaker 1: that a federal judge dismissed corruption charges against Eric Adams,
Speaker 1: bringing a permanent end to the case and capping an
Speaker 1: extraordinary series of events that so discord within the Justice Department.
Speaker 3: With more on the judges ruling, we turned to Bloomberg's
Speaker 3: legal reporter ABA Benny Morrison, who joins us from New York.
Speaker 3: What exactly was this ruling? Is that it everything thrown out?
Speaker 8: It certainly looks like it. The judge really took his
Speaker 8: time considering all the arguments that have been flying out
Speaker 8: in the courthouse over the past few months, and he
Speaker 8: reached the decision today that everyone had been anticipating that
Speaker 8: he was going to dismiss the case against Eric Adams
Speaker 8: without prejudice. Now that last bit is important because that
Speaker 8: means this case can't be revived on the track. You
Speaker 8: may remember that the Justice Department in Washington had wanted
Speaker 8: to dismiss the case with prejudice, which would have given
Speaker 8: it the option to bring back the case against Adams
Speaker 8: if they felt the need to, and this led to
Speaker 8: concerns that Washington wanted to maintain leverage over New York's mayor,
Speaker 8: which didn't seem to sit well with the judge.
Speaker 1: It's interesting too, because in that ruling, the judge criticized
Speaker 1: the effort by President Trump's Justice partn't to leave the
Speaker 1: refiling option open.
Speaker 7: What is that?
Speaker 8: Yes, he referred to this situation as unprecedented, and it
Speaker 8: was certainly something that I haven't reported on before. Judge
Speaker 8: said that it was very clear that everything here smacks
Speaker 8: of a bargain dismissal of the indictment in exchange for
Speaker 8: immigration policy concessions. But he warned that dismissing the case
Speaker 8: without prejudice would create that unavoidable perception that the mayor's
Speaker 8: freedoms depended on his ability to carry out the president's wishes,
Speaker 8: so that's why he decided to dismiss the case without prejudice.
Speaker 1: So basically, the mayor can do whatever he wants right
Speaker 1: in terms of even whatever he agreed to maybe with
Speaker 1: President Trump, because he doesn't have to worry about every filing.
Speaker 6: That's right.
Speaker 8: He doesn't have this case hanging over his head anymore.
Speaker 8: So some may argue that he doesn't have the pressure
Speaker 8: of having to do what Washington wants him to do.
Speaker 8: But you know, we saw him today outside Gracie Mansion
Speaker 8: and he was holding out a copy of FBI Director
Speaker 8: Cash Ptel's book Government Gangsters, which is very critical of
Speaker 8: law enforcement. So we've had little indications from him over
Speaker 8: the past few months of him kind of edging closer
Speaker 8: to the current administration. Whether he decides to continue that
Speaker 8: sialance we don't know.
Speaker 3: Is that the book just is that the book with
Speaker 3: the list in it of people.
Speaker 8: I'm not sure I know that the book. In the book,
Speaker 8: he's been quite critical of law enforcement and the way
Speaker 8: they go about things, and Adams made the comment that
Speaker 8: he had to turn to that book to fund the
Speaker 8: rationale for the DOJ bringing the case against him.
Speaker 7: Twenty seconds.
Speaker 3: All of his legal problem we know his political challenges
Speaker 3: are his legal problems. Over twenty seconds.
Speaker 8: It certainly looks like it for the time being. He
Speaker 8: may have avoided a criminal trial, but he's still facing
Speaker 8: an uphill battle when it comes to politics. He's buying,
Speaker 8: He's facing several candidates who want to unseat him, and
Speaker 8: a string of polls have put him losing the primary election.
Speaker 1: Yeah. Quote, A public opinion can be pretty rough, especially
Speaker 1: when your New York voters or New York City voters. Ava,
Speaker 1: thank you so much, and I see with admiration. Ava,
Speaker 1: thank you so much.
Speaker 5: Ava.
Speaker 1: Benny Morrison, legal reporter at Bloomberg joining us romacle.
Speaker 4: How about you let me drive?
Speaker 6: Oh no, no, no, no, this is not a toy job.
Speaker 2: All right, please gravels excuse me.
Speaker 1: I want to drive.
Speaker 3: It's good question.
Speaker 2: This is the drive to the clothes punk's amusing well
Speaker 2: dry run on Bloomberg Radio.
Speaker 1: All right, TikTok everybody you just got have TikTok, TikTok?
Speaker 7: Oh exactly?
Speaker 3: It's like, is it because the Amazon thing is at
Speaker 3: the Financial Times report? Why are you tiktoking right now. Yeah,
Speaker 3: maybe you're just like ttok okay.
Speaker 1: TikTok to the clothes and TikTok TikTok until we get
Speaker 1: from the president right what he's going to lay out
Speaker 1: in terms of terrorists. It is expected at four pm
Speaker 1: Wall Street time, so we are just about eighteen minutes
Speaker 1: away from that as expected if everything goes on schedule,
Speaker 1: and also just about eighteen minutes away from the closing bill.
Speaker 1: As you heard from Bill Maloney and Charlie Pellett. We
Speaker 1: are up about six tens of a percent on the
Speaker 1: S and P five hundred, folks. We're definitely off our
Speaker 1: loads of the session and off our highs, but a
Speaker 1: little bit of a leg up in the last half hour.
Speaker 1: So down John's Industrial average if you care, up two
Speaker 1: hundred and thirty points, up about half a percent. Nasdaq
Speaker 1: one hundred, where you find all those big cap tech
Speaker 1: names up about eight tens of a percent tim again
Speaker 1: of about one hundred and fifty one points.
Speaker 3: I'm curious how Noahman is watching this. He's founder and
Speaker 3: CEO of Advisor Shares. Noah you argue that we got
Speaker 3: to look at Trump's first term to understand equity market implications.
Speaker 3: But as our own end o'current reminded us a little
Speaker 3: earlier in the hour, this could be way way bigger.
Speaker 3: In fact, these measures could mark the biggest protectionist move
Speaker 3: in ninety years. Are there still lessons from the first term?
Speaker 6: I think so. The first big lesson is to remember
Speaker 6: he threatened a lot of tariffs and then pulled back
Speaker 6: on Mexico and Canada. China's harriffs at the time on
Speaker 6: I think aluminum steel continue to remain in place, So
Speaker 6: any minute, any people can change their mind. I think
Speaker 6: I was just seeing something pop up about even Canada
Speaker 6: suggesting they would remove their terrace in return for us
Speaker 6: removing all of our terrasts. So I think the thing
Speaker 6: to remember is anything can change in a minute, and
Speaker 6: when we look back at what happened back then, yet
Speaker 6: a volatile market, but overall the market continued to climb.
Speaker 6: The challenges it saw at that time are far more
Speaker 6: about fed tightening, I think, than anything else.
Speaker 1: So are you on hold though? Do you want the
Speaker 1: details before you figure out kind of what to do next?
Speaker 6: I think so? Or depends on what kind of investor
Speaker 6: you are, right, if you're a long term investor based
Speaker 6: at least on history which may not repeat, of course,
Speaker 6: But I might continue to do what I'm doing right
Speaker 6: my monthly four to one K deposit, I'll allocate it
Speaker 6: to the market. I'll sort of buy this dip that
Speaker 6: we've seen going on in the US markets. I might
Speaker 6: start to look a little bit more at international markets.
Speaker 7: Not as much about.
Speaker 6: Terrace, but they've been strong this year. That's been one
Speaker 6: of the bright spots. Is you know, Epha's up I
Speaker 6: think almost six or seven percent. So is Aqui Xus.
Speaker 6: So if you're a long term investor, I think I'd
Speaker 6: just probably not worry about it too much. Expect volatility.
Speaker 6: If you're a trader, you might be, you know, thriving
Speaker 6: on an increased volatility.
Speaker 3: No, there are some folks out there who are concerned
Speaker 3: about the fundamentals of the US economy. And I'm talking
Speaker 3: like structural here, like something could shift substantially unlike what
Speaker 3: we've seen really in our lifetimes. I've talked to friends
Speaker 3: who are not involved in the markets on a day
Speaker 3: to day basis who said I'm getting out of the US.
Speaker 3: I'm going to cash or other friends who say I'm
Speaker 3: going overseas now with my money. Again, these are not
Speaker 3: what I would call sophisticated investors or traders. They're just
Speaker 3: really thinking differently about asset allocation. What would you say
Speaker 3: to them?
Speaker 6: So, I would say the idea of moving international just again,
Speaker 6: given what we've seen happen earlier this year, and it
Speaker 6: just feels like it's time for international markets. They've been
Speaker 6: underperforming for so long. That's probably not a bad idea.
Speaker 6: But the market's what five, iver six or seven percent
Speaker 6: off of all time highs. And if you're selling your
Speaker 6: portfolio go into cash, don't forget that tax bill that's
Speaker 6: coming as a result of that. So, you know, if
Speaker 6: that makes you feel comfortable, I think that that's fine.
Speaker 6: There's nothing wrong with that. Again, consider those tax implications.
Speaker 6: But if you think it's going to be a lot worse,
Speaker 6: then you don't mind paying the taxes on it. But
Speaker 6: I think otherwise, you know, I'd be a little cautious.
Speaker 6: I just it feels like the news changes every minute,
Speaker 6: every hour, and I would not probably make big abrupt
Speaker 6: changes until I have better clarity.
Speaker 1: You know what's interesting is Noah, I think we're all
Speaker 1: waiting to see if the negative sentiment that we've been
Speaker 1: talking about so much. We've talked about cap x by
Speaker 1: businesses pulling back consumer sentiment. We've already seen the airlines
Speaker 1: talk about cutbacks, but again they've been talking about the
Speaker 1: current quarter and not necessarily for the rest of the year.
Speaker 1: Sentiment becomes a problem when it, though, does turn into
Speaker 1: actions and people stop spending, Companies stop spending, companies stop hiring.
Speaker 1: How much do you think that sentiment will turn into
Speaker 1: negative action and be with us for the rest of
Speaker 1: the year. Are you more upbeat about the rest of
Speaker 1: twenty twenty five or the second half of twenty twenty
Speaker 1: five in general?
Speaker 6: I'm more upbeat, But you're picking your spots, right. I
Speaker 6: think ADP just came out with some surprisingly high numbers, right.
Speaker 6: I think it was one hundred and fifty five thousand
Speaker 6: private sector jobs. There's been plenty of announcements of international
Speaker 6: companies making capital investments in the US for big plants
Speaker 6: and manufacturing.
Speaker 4: Right.
Speaker 6: In part part of this plan tarif.
Speaker 1: Drama plans, right, commitments plans, But it doesn't mean there'll
Speaker 1: be a reality.
Speaker 6: Right, excellent point. But I think if it's not a reality,
Speaker 6: then you know, things can probably go both ways. Right,
Speaker 6: Maybe things won't be quite as bad here, but you
Speaker 6: do see it in pockets. When you mentioned things like airlines,
Speaker 6: I think, yeah, it wouldn't be surprising to see much
Speaker 6: more business travel cutting back with a little bit of uncertainty.
Speaker 6: We've already seen reports, especially along the Canadian.
Speaker 7: Border, where they're.
Speaker 6: Not too happy with US as of lately, and they're
Speaker 6: cutting back. You know, travel plans where they come here
Speaker 6: and they spend and they go to amusement parks or
Speaker 6: they stay at nice hotels, and so you see things
Speaker 6: like that cutting back. But if some of those plans
Speaker 6: turn into real jobs, it could create a production growth
Speaker 6: opportunity within the US that will still be several years out,
Speaker 6: but could really create long term opportunity. But boy, is
Speaker 6: it going to be noisy involved along the way.
Speaker 3: Yeah, And look, I think certainly the cutting back that
Speaker 3: we're seeing from international tourists to the north makes sense.
Speaker 3: Something Carol and I have talked a lot about, especially
Speaker 3: in the context of some of the airline downgrades that
Speaker 3: we saw this week from Jeffreys. And the pullback that
Speaker 3: airlines have talked about is a cutback that American consumers
Speaker 3: are feeling in discretionary spending, are you seeing that pop
Speaker 3: up at all.
Speaker 6: A little bit. You know, you've seen weakness in that
Speaker 6: hotel sector. You've seen weakness, as you mentioned just a
Speaker 6: second ago, in airlines. I think, you know, there's vices,
Speaker 6: right and when I think about things like Corona beer
Speaker 6: and the impact and maybe people are going to spend
Speaker 6: less if the price of that beer is going to
Speaker 6: go up, Well they can still you know, buy some
Speaker 6: sam Adams that's made you know, made in the US,
Speaker 6: and those prices won't go up, or at least they
Speaker 6: won't go up to the extent that they're not affected
Speaker 6: by the supply component, right, the metal that's made in
Speaker 6: their cans to distribute their product. So you know, yes,
Speaker 6: you've seen some consumer spending pulled back, certainly pulled back
Speaker 6: with the market. But same thing. It feels short term,
Speaker 6: it feels temporary, but always subject to change.
Speaker 1: So in terms of dip buying, have you been doing
Speaker 1: that on the pullback?
Speaker 6: I have, Yeah, absolutely so. Right now, I really haven't
Speaker 6: changed my asset allocation that much except for what I
Speaker 6: mentioned earlier, which is I'm leaning into the international markets
Speaker 6: a little bit more. I'm also looking at where maybe
Speaker 6: we might see interest rates maybe going down, which could
Speaker 6: provide a spark and some ignite, you know, some opportunities
Speaker 6: in the US. The best spots, it seems like this
Speaker 6: here has been energy and financials probably, but for the
Speaker 6: most part just I'm continuing to dip by not going
Speaker 6: to worry about it too much. And I think, as
Speaker 6: you guys were saying earlier, I need to see what
Speaker 6: really happens before I take too strong of an action.
Speaker 1: All right, Gonna leave it on that note.
Speaker 5: Noah.
Speaker 7: Thanks.
Speaker 1: Noah Hammond, founder and CEO of Advisor Shares joining us
Speaker 1: on this Wednesday, folks. We've just got about ten minutes
Speaker 1: to go, taking a look at the trade. Definitely off
Speaker 1: our worst levels of the session. Green across the screen,
Speaker 1: s and p up about forty points. Now's de Q
Speaker 1: one hundred, a gain of one hundred and sixty two.
Speaker 1: Stick around. We're counting you down to the clothes on
Speaker 1: this Wednesday.
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