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Speaker 2: I'm cue here. Ian Lincoln publishes BM on Capitol Americans.
Speaker 2: We're double barrel, yeah, Ian Lnoln Publishing, and Dan Scully
Speaker 2: just darkened the door. Lets me get better than this.
Speaker 2: Let me quote exactly for Global Wall Street. Mister Lincoln,
Speaker 2: with this backdrop, we struggle with the notion of wanting
Speaker 2: to aggressively fade the rally. That's price up, yield down.
Speaker 2: Don't go against that. On the other hand, is three
Speaker 2: handle tens approach the four point zero zero to four
Speaker 2: point zero two percent zone will be difficult to breach
Speaker 2: solely based on sentiment in from the holiday weekend. Ian Lincoln,
Speaker 2: there moments ago, we are so advantaged that Dan Skelly's
Speaker 2: here off of that statement from Bank of Montreal. Mister
Speaker 2: Skelley is with Morgan Stanley Wealth Management. Is it a
Speaker 2: new bond regime. I'm looking at the Bloomberg and it's
Speaker 2: saying there's a trend in place. Do you buy it?
Speaker 3: Good morning, Tom. It does feel like people are risk
Speaker 3: off at the moment. Obviously, you've got this on the
Speaker 3: one hand, dissonance in the fact that people want to
Speaker 3: play global reflation, small caps international, and on the other
Speaker 3: hand you're seeing just bondyields lower in terms of I
Speaker 3: think further fears of further concern around the AI trade
Speaker 3: within the US.
Speaker 2: We're linking the AI trade dynamics over to price up,
Speaker 2: yield down.
Speaker 3: You can't do it with the economic data, whether it
Speaker 3: be the surprise index at multi month highs, whether it
Speaker 3: be the jobs data as of the last week or two.
Speaker 3: So you can't link it that way, Dan, I.
Speaker 4: Mean, nobody does tech research better than the Morgan Stanley complex.
Speaker 5: You guys have been leading on that for decades. Here,
Speaker 5: what do you guys make of this fade?
Speaker 4: Software just broadly defined, I mean, software is a story
Speaker 4: that just works for everybody all the time.
Speaker 5: Now it's really under some risk here.
Speaker 3: Sure, and thank you, Paul, appreciate that that kudos, so
Speaker 3: number one. I think it's one of these many examples
Speaker 3: of dissonance at the moment. On the one hand, the
Speaker 3: market is fearful over AI spending on the other hand
Speaker 3: of the market saying.
Speaker 6: Software is going to be disrupted. So I can't.
Speaker 3: Explain that one in terms of efficacy versus disruption. And look,
Speaker 3: I would say not all software, not to be that
Speaker 3: completely out of consensus, but not all software is created equal.
Speaker 3: When I look at the varying types of software. Some
Speaker 3: of these companies are actually.
Speaker 6: Partnered with the AI model makers today.
Speaker 4: You know, it's funny we were talking about software and
Speaker 4: just tech research and think Mary Meeker.
Speaker 5: She was in the news again this weekend.
Speaker 4: Mary Meeker, she won the AT and T Pebble Beach
Speaker 4: pro am No Way, Way.
Speaker 2: Go Way.
Speaker 4: What does she do hand or power I don't know,
Speaker 4: Hardoin I saw that.
Speaker 2: Remember power Point to sit there in a bar Alexis,
Speaker 2: you'd sit at a bar in midtime Manhattan, right with
Speaker 2: the beverages of your choice, beverages. It'd be what Dan,
Speaker 2: It'd be sixty four pages. And the problem with Mary,
Speaker 2: every page had vailue.
Speaker 5: Yep, yep, that was a problem.
Speaker 6: You know it was sixty four was the intro?
Speaker 5: Yes, yes, exactly. So what are we doing here?
Speaker 4: Broady defined with equities here twenty twenty five, excellent returns
Speaker 4: in the US, even better returns outside of the US.
Speaker 4: What's the set up here for twenty twenty six?
Speaker 3: So number one, we're saying to stick with the international
Speaker 3: trade right, So on the one hand, whereas the AI
Speaker 3: centric optimism has now seeded to concern that's obviously benefiting
Speaker 3: international number one. Number Two, you've got policy and fiscal
Speaker 3: tailwinds helping Japan, helping Latin America, helping arguably Europe in
Speaker 3: some degree with this defense spending in a revamping of
Speaker 3: the military industrial complex.
Speaker 6: There.
Speaker 3: Number two, we're telling folks don't abandon the large cap
Speaker 3: quality adopters in the US. I think the biggest dissonance
Speaker 3: I've observed over the last month, and we've known software
Speaker 3: is going to be disrupted for the last two years,
Speaker 3: so that's not the big surprise. It's that every other
Speaker 3: sector of the market has seemingly been taken out to
Speaker 3: the disruption. Woodshed and a lot of these, by the way,
Speaker 3: were the names that were the biggest adopters of AI previously.
Speaker 6: That's the big dissonance.
Speaker 5: Earnings were, you know, three quarters the way through earnings.
Speaker 5: It seems pretty.
Speaker 4: Solid out there as earning's been solid enough for this market.
Speaker 6: Not at the moment.
Speaker 3: Yeah, I think the market is losing sight of We
Speaker 3: talked about the macroeconomic data earlier pretty solid and above itself,
Speaker 3: and earnings is broadening out. I think the key trend
Speaker 3: at the moment is that you're seeing Russell three thousand
Speaker 3: median earnings growth of around eleven percent, and that's up
Speaker 3: from call it, low single digits the last year or so.
Speaker 2: I mean, I look at the Google bond deal the
Speaker 2: other day, Lisa Shell loaded the boat for Morgan Staly
Speaker 2: one hundred year British piece. But I'm sitting there this week,
Speaker 2: You're going, Okay, Microsoft's in the tank, down a couple
Speaker 2: dollars this morning as well. It's closed at four oh one,
Speaker 2: it's trading three ninety nine. Okay, Dan Skelly fine, But
Speaker 2: can't they and others in one Bloomberg headline change the
Speaker 2: zeitgeist by saying we're going to do a ginormous bond
Speaker 2: deal off Dan Skelly's desk it Morgan Stanley, Well.
Speaker 6: We'd welcome that, welcome the partnership, no doubt. Listen.
Speaker 3: I think when you look at the majority of AI
Speaker 3: spend it's still being funded from cash flow. On the margin,
Speaker 3: there is leverage coming into the system. But tom, as
Speaker 3: you know, many of the Max seven balance sheets are
Speaker 3: net cash balance sheet.
Speaker 6: They could afford to take on some leverage.
Speaker 2: Am I right that they could do one? What do
Speaker 2: your tech people say? Can they do one? Trunch?
Speaker 7: Two?
Speaker 2: Trunch? Thirty billionaire, twenty billionaire? Sixteen point five?
Speaker 6: Demand is off the charts, as you know, and so
Speaker 6: you know, we.
Speaker 2: Think there's some nuts pot.
Speaker 5: No, I'm with you.
Speaker 3: We think there's some room to take on on some
Speaker 3: leverage here. But look, at the end of the day,
Speaker 3: we think the market is efficiently and probably rightfully taking
Speaker 3: a pause on MAG seven at the moment, and the
Speaker 3: SMP because we've had this massive spending ramp up, we
Speaker 3: have alternatives for the first time in a decade, We
Speaker 3: have other markets with momentum. And we all know what
Speaker 3: momentum as a factor has meant for equities over the
Speaker 3: last several years. It has truly taken the baton from
Speaker 3: valuation and so at the moment, momentum matters.
Speaker 4: So does that lean outside of the US versus US here?
Speaker 4: Because I mean, when you look at the Europeans markets,
Speaker 4: they've both traded at a discount to those because they
Speaker 4: don't have that tech exposure that we have.
Speaker 5: Is that now the time for them to shine as
Speaker 5: they did last year.
Speaker 3: Yeah, it's a fabulous point, Paul. And number one, that's true,
Speaker 3: it's the absence of a negative at the moment. Number two,
Speaker 3: it's real fundamental catalyst. So whether it be defense we
Speaker 3: talked about in a post Ukraine recovery effort, we might
Speaker 3: see a Marshall Plan type equivalent rebuilding infrastructure out there.
Speaker 3: And number three, when I look at fiscal policy, right,
Speaker 3: we've talked a lot about the US fiscal and political situation.
Speaker 3: Look at what's going on with Japan post the elections.
Speaker 3: We now have a super majority.
Speaker 2: I point out Microsoft there out thirty five years on
Speaker 2: their longest piece. I mean, I'm sorry, Margot Stanley needs
Speaker 2: to bring a one hundred year Microsoft Sure they get
Speaker 2: six point xx per se.
Speaker 5: I know what they're doing over there.
Speaker 2: So let's just squeeze one more question. And here, Dan
Speaker 2: Skelley to all the people listening across this nation watching
Speaker 2: on YouTube, do you quote unquote go to cash here?
Speaker 3: We would not, Tom, We would say stay invested. Right,
Speaker 3: We've been telling folks to be diversified, right, and we've
Speaker 3: said this.
Speaker 6: For over a year.
Speaker 3: And initially a year ago I commented Max seven would
Speaker 3: go from this monolith everything up together to more of
Speaker 3: a peloton where there's more dispersion within the MAC seven.
Speaker 3: That's played out, and roughly six to nine months ago
Speaker 3: we started thinking about broadening out, whether that be value
Speaker 3: trades within the US or whether that be internationally. So
Speaker 3: we think there's enough opportunities at the moment not to
Speaker 3: go to the cat.
Speaker 2: I thought you were talking for you and me that
Speaker 2: it was a peloton trade because we were broadening out.
Speaker 2: We get a three day weekend report from Surveillance Peloton
Speaker 2: corresponding Paul Sweeney, how many times are you on the
Speaker 2: beast this weekend?
Speaker 4: Multiple times on the bike and the treadmill, both full service.
Speaker 2: This is getting in the beachway right?
Speaker 5: Oh yeah, absolutely, yeah, very good. It's just you know,
Speaker 5: we're there, We're there.
Speaker 2: I don't know, it's it's Skelly. Thank you so much.
Speaker 2: Really important comments there from Morgan Steia had to market
Speaker 2: research and strategy Morgan Stanley Wealth Management. Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after.
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Speaker 2: We start strawing this morning over Schmedia joins us with
Speaker 2: Wrenberg Bank Just fabulous on the Transatlantic tensions of the moment, Holgar,
Speaker 2: do you see a global disinflation? Is China messed up
Speaker 2: enough where they export price stability or price decline, which
Speaker 2: means BUN prices.
Speaker 7: Up yields down well on its own. This is exactly
Speaker 7: what China is, of course doing.
Speaker 8: It's dumping the results of its industrial over capacities on
Speaker 8: global markets.
Speaker 7: But there are other forces pointing the other way.
Speaker 8: Of course, the US tariffs are not yet fully reflected
Speaker 8: in US consumer prices.
Speaker 7: There is some further upward pressure on US consumer prices
Speaker 7: to come. Also, many raw materials are telling a very
Speaker 7: different story, namely that global inflation pressures will stay a
Speaker 7: little elevated or could rise over time and longer term
Speaker 7: simply labor shortages on both sides of the Atlantic, and
Speaker 7: also longer term in China, labor shortages will probably mean,
Speaker 7: in the end a rebound in wage pressures, perhaps not immediately,
Speaker 7: but say next year and thereafter. So I would not
Speaker 7: bet too much on global disinflation.
Speaker 5: Oger.
Speaker 4: Here in the US we have a lot of economic data.
Speaker 4: Last week we received in terms of inflation data, labor
Speaker 4: market data.
Speaker 5: The data suggests that maybe.
Speaker 4: The FED can sit idly by and let's say, economy
Speaker 4: hero along, what do you think this United States, for
Speaker 4: the Reserve.
Speaker 5: Should be doing.
Speaker 7: That's exactly what the FED should be doing. There is
Speaker 7: no reason in the US to cut rates further. Rates
Speaker 7: are already fairly low, especially against the backdrop of a
Speaker 7: very expoundary fiscal policy. The US economy is clearly still
Speaker 7: expanding above its trend rate, which in our of you
Speaker 7: is now one point five percent the trend rate. But
Speaker 7: the current pace of growth is above two percent, and well, yes,
Speaker 7: the labor market does not require further central bank help
Speaker 7: for the time being, so the FED should stay put.
Speaker 7: Our call remains that when the new FED chair comes
Speaker 7: into an office, the committee may grant him one twenty
Speaker 7: five basis point rate cut, but thereafter probably vans it
Speaker 7: for the FED. In terms of cuts.
Speaker 2: You're the first one to overtly mention that, I mean,
Speaker 2: this is a huge deal. Do you think, within your
Speaker 2: reading of central bank history that when a new guy
Speaker 2: shows up, what do you call it in golf? Is
Speaker 2: it like a mulligan?
Speaker 7: Is that ye?
Speaker 2: Preskice book chairman wors get a mulligan, Holger Schmieding, Well,
Speaker 2: that's that's possible.
Speaker 8: By that the time he comes in, we may see
Speaker 8: that the labor market is not quite as strong as
Speaker 8: it was in the January data. You can always argue
Speaker 8: sort of about twenty five basis points yes or no.
Speaker 8: So to bet on in our view, one further rate
Speaker 8: cut to come under the new president makes sense. A
Speaker 8: boy betting on more rate cuts to come in the US,
Speaker 8: as many in the market are doing, in our view,
Speaker 8: is overdone done. Simply, the US economy does not need
Speaker 8: a rate cut, and longer term, while the US economy
Speaker 8: will likely lose momentum next year, longer term inflationary pressure
Speaker 8: stemming from basically a lack of labor, including the immigration clampdown,
Speaker 8: should then see to it that there is no further
Speaker 8: reason for a cut.
Speaker 6: Holger.
Speaker 4: Almost a year ago, we in response to the tariff
Speaker 4: issues we saw European economy step up and really talk
Speaker 4: about spending more on infrastructure, spending more on defense.
Speaker 5: Have we actually seen those funds be committed.
Speaker 7: Well, you use the right word. We are seeing those
Speaker 7: funds being committed. That is, we've seen a major search,
Speaker 7: for instance, in German industrial orders late last year, huge
Speaker 7: search related largely to defense, similar things and to some
Speaker 7: extent to infrastructure spending.
Speaker 8: We are seeing it in orders. We are not you're
Speaker 8: really seeing it yet in production. It takes time for
Speaker 8: companies to ramp up production, but the orders are coming
Speaker 8: in and on a much smaller scale. Even countries such
Speaker 8: as Italy, France and the UK are trying to raise
Speaker 8: their defense spending somewhat. Yes, there is a fiscal stimulus coming.
Speaker 2: How do you frame euro holgersh meeting? I mean it
Speaker 2: gets away from your you know, I mean, I get
Speaker 2: that Beerenberg Bank's acutely aware of the euro but against
Speaker 2: the dollar. Are we in for some boldness here of
Speaker 2: euro movement?
Speaker 7: Well, probably not much in the near term. We have
Speaker 7: serious geopolitic attendance, which tend to be a bit dollar positive.
Speaker 7: We also do not expect the FAT to deliver as
Speaker 7: much as many rate cuts as others in the market think,
Speaker 7: so that's a bit of dollar positive. Having set all that,
Speaker 7: the European economy last year surprised a little to the upside,
Speaker 7: and there is come again for the European economy this
Speaker 7: year to do a little better than last year, not
Speaker 7: extremely well, but a little better. Also, there is this
Speaker 7: long run erosion of global trust in the US, it's
Speaker 7: institutions and its currency, as we see with this switch
Speaker 7: of some emerging market central banks out of dollar assets
Speaker 7: into gold. So longer run, I think the dollar remains
Speaker 7: on the way down.
Speaker 2: I mean, this is if we're gonna hold her about
Speaker 2: the Swiss franc, the ft Holger right up the Swiss franc.
Speaker 2: I think that once but twice this weekend. I'm looking
Speaker 2: at the two church EuroSwiss and also dollars Swissy and
Speaker 2: the bottom line years there's some huge Swiss strength. What
Speaker 2: does that signal to our American audience.
Speaker 7: Well, that signals a bit of a move to safe havens,
Speaker 7: and Switzerland is a safe haven seen as very safe,
Speaker 7: but it's very very small, a bit like goat. A
Speaker 7: small move into safe havens makes a huge difference to gold,
Speaker 7: makes a huge difference to the Swiss Frau, but much
Speaker 7: less of a difference. Say to the US dollar Halger.
Speaker 2: Thank you so much. Hugers schmeeting with us with Wareenberg
Speaker 2: a brief stay with us. More from Bloomberg Surveillance coming
Speaker 2: up after this.
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Speaker 2: Blimmy Caretrel joins US now managing director, head a public
Speaker 2: policy at Pimco. My basic take, Libby, is everything's rushed.
Speaker 2: Like in February. We're living what would be a normal
Speaker 2: may or June before an election year. Am I right
Speaker 2: out that?
Speaker 5: That is right?
Speaker 2: Yeah?
Speaker 5: Good morning Tom.
Speaker 9: Yeah, I mean you're absolutely right. This year is compressed
Speaker 9: just because of course the midterm elections. I think both
Speaker 9: the House and the Senate leaders are going to be
Speaker 9: eager for their members to go back to their districts
Speaker 9: and states to campaign in advance of November. So our
Speaker 9: expectation is in many ways this Congress probably will likely
Speaker 9: come to kind of its end, you know, near July. Now,
Speaker 9: of course they'll be back in session in September to
Speaker 9: fund the government, hopefully fund the government once again for
Speaker 9: a fiscal year twenty twenty seven. But outside of that,
Speaker 9: we're not really expecting much legislation, you know, beyond the
Speaker 9: August or the summer recess.
Speaker 4: Libby in one of your recent notes in your Washington
Speaker 4: Watch note you have entitled was twenty twenty five peak Trump?
Speaker 2: What do you mean by that? Yeah?
Speaker 9: So, in many ways, this is pretty consistent with other
Speaker 9: presidential cycles. The first year of an administration, particularly when
Speaker 9: the party in the White House controls both chambers of Congress,
Speaker 9: does see its sort of peak presidential power. Congress is
Speaker 9: usually gives a wide berth to their president to sort
Speaker 9: of do what they want to do. The courts in
Speaker 9: this case of Trump, have been sort of slow to
Speaker 9: catch up. So in twenty twenty five, like twenty twenty
Speaker 9: one was for Biden, for President Biden, like in some
Speaker 9: ways two thousand and nine was for President Obama, we
Speaker 9: do believe that twenty twenty five was peak Trump in
Speaker 9: that it was sort of his apex of presidential power.
Speaker 9: Twenty twenty six and we've already seen some signs of
Speaker 9: this at the end of twenty twenty five, in the
Speaker 9: beginning of this year, we think the constraints of both
Speaker 9: the Congress and the courts will bind this President Mortigan.
Speaker 9: This is less of something sort of specific to President Trump,
Speaker 9: and it's much more indicative of the general political cycle,
Speaker 9: where you know, members of Congress in particular start pivoting
Speaker 9: to their own survival and pivot to midterms, and as
Speaker 9: a result, you know, start pushing back on on their president,
Speaker 9: even when it's the president of their own party.
Speaker 2: Is the Senate at risk? I mean, can the Democrats
Speaker 2: win the Senate?
Speaker 9: From where you sit, Livy, You know, I think if
Speaker 9: you had asked me several months ago, I would have
Speaker 9: said absolutely not. Now I still it's still not our
Speaker 9: base case. We still think that the GOP will control
Speaker 9: the Senate. But there are some primaries that are going
Speaker 9: to be quite important. Texas in particular on March third.
Speaker 9: You know, who wins that on the Republican and Democratic
Speaker 9: side I think will be you know, we'll sort of
Speaker 9: tell whether that state is actually in play. But as
Speaker 9: you know, Tom, right now, Republicans control the Senate by
Speaker 9: four seats. Not only would Democrats have to defend seats
Speaker 9: in Georgia and Michigan. Those are seats that they have
Speaker 9: right now that of course Trump won in those states,
Speaker 9: but they would have to win four of six, you know,
Speaker 9: pretty reddish pinkish states, including North Carolina and Maine, but
Speaker 9: also Ohio, Texas, Iowa, Alaska. You know, again, they would
Speaker 9: have to have a perfect night. I think to take
Speaker 9: back the House they would have to have a soso night,
Speaker 9: but in order to take back the Senate, they would
Speaker 9: have to have a perfect night.
Speaker 4: So Lebby, you mentioned the courts here, I guess we're
Speaker 4: still waiting on Supreme Courts ruling on tariffs A. Are
Speaker 4: you surprised that it's taken this long? And does that
Speaker 4: tip your the hand to maybe how they may vote here?
Speaker 9: Yeah, I'm gonna I'm going to defer to to the
Speaker 9: sort of the court experts, which I am not one of.
Speaker 9: Ian I think, you know, according to those experts, though
Speaker 9: this timing doesn't seem you know, all that suspicious or
Speaker 9: or all that much of a tell. I do think
Speaker 9: that that Roberts is likely trying to, if you know,
Speaker 9: if this verdict does go against the White House, probably
Speaker 9: trying to get as much of a majority on that
Speaker 9: opinion as possible, so that may justify the delay or
Speaker 9: what have your explained the delay. I think the bottom
Speaker 9: line here for markets and what we're telling our clients
Speaker 9: is that even if the even if the court does
Speaker 9: rule against the White House, and again just based on
Speaker 9: the oral arguments, it looks like at least in some
Speaker 9: form or fashion, they may But this White House still
Speaker 9: has many other tools that Congress has given them. Maybe
Speaker 9: not AIPA, which is the law that's you know in
Speaker 9: jeopardy here, but section one twenty two, section three ZHO
Speaker 9: one sort of this number soup of provisions. They can
Speaker 9: still impose their their tariff agenda.
Speaker 2: Let me talked to Peter Navarro last week and he
Speaker 2: was spirited to say the least be saying, mister doctor
Speaker 2: Navarro for his appearance, and I got him upset talking
Speaker 2: about how McKinley, late in his term before his tragic assassination,
Speaker 2: made what was called the buffalo pivot. Are we in
Speaker 2: a slow motion buffalo pivot right now? Is a president
Speaker 2: brings down tariffs? Yeah?
Speaker 9: Well, I think they look. I think there's likely some
Speaker 9: sort of suggestion that you know, some folks in the
Speaker 9: White House do realize that you know, tariffs on things
Speaker 9: that the US cannot produce, you know, bananas and coffee
Speaker 9: for instance, Are you know areas where maybe some tariff
Speaker 9: relief is necessary. There's of course some reports that there
Speaker 9: is you know, some tweaking of the steel and aluminum
Speaker 9: tariffs as well. So I mean, could we see a
Speaker 9: bit of a softening on tariffs, sure as sort of
Speaker 9: again real politique kind of sets in here in advance
Speaker 9: of the midterms. I think though, however, Tom to underestimate
Speaker 9: this president and his sincerity and conviction on tariffs is
Speaker 9: something the markets continue to do, and I think they
Speaker 9: continue to be on the wrong side of that. This
Speaker 9: is this is an ideology of course he's had for decades.
Speaker 9: The president feels a sense of urgency to administer his
Speaker 9: trade agenda. And again, even if there is some sort
Speaker 9: of political expediency that sets in, I think our view
Speaker 9: is that the markets and the economy are still going
Speaker 9: to have to digest tariff policy and trade policy risk
Speaker 9: as long as this president's in the White House.
Speaker 4: Libby affordability has become a big issue in this cycle
Speaker 4: of economic discussion here, and particularly one of the areas
Speaker 4: is housing, and then the lack of affordability in housing.
Speaker 4: And I know that the House is expected to pass
Speaker 4: the Housing for the twenty first Century Act. What does
Speaker 4: this act and does it have a chance to become law?
Speaker 4: And how are leaders trying to make housing more affordable?
Speaker 9: Yeah, so it does, and it did, and the House
Speaker 9: and the Senate have now passed their own sort of
Speaker 9: respective bills. This will now go into what's called the
Speaker 9: Conference committee, which, as you guys know, is sort of
Speaker 9: the fancy way of basically saying that the House and
Speaker 9: the Senate will kind of hammer out their differences in
Speaker 9: that legislation and then we'll have to go past a
Speaker 9: unified bill. I do think this will be signed into law.
Speaker 9: This does the thing show you that both sides of
Speaker 9: the aisle are quite worried about this issue. Just politically speaking,
Speaker 9: of course, housing affordability continues to be one of the
Speaker 9: big laments among voters on both sides of the aisle.
Speaker 9: The reality is, however, that at the federal level, they're
Speaker 9: just you know, few lovers that policymakers can really pull
Speaker 9: that have a meaningful impact on supply. One thing that
Speaker 9: we do think that the White House has done and
Speaker 9: probably will continue to do that could help is for
Speaker 9: the GSS to continue to buy mortgages. That's what they've
Speaker 9: been doing that over the last few months. That has
Speaker 9: brought down mortgage rates at least incrementally. We continue to
Speaker 9: expect them to do more of that.
Speaker 2: But the key thing I heard there, Libby, is from
Speaker 2: here to eternity, you don't see any more legislation coming
Speaker 2: out of the Senate or the House signed by the President.
Speaker 9: No, and sorry, I know I do.
Speaker 7: We do.
Speaker 5: I think the House will.
Speaker 9: I think that the President will sign this housing bill
Speaker 9: into law.
Speaker 5: But outside of that.
Speaker 9: And then again a funding bill for fiscal year twenty
Speaker 9: twenty seven, there just may not be very much. I
Speaker 9: think there's been some hope among market participants or some
Speaker 9: expectation that the Congress may pass something in advance of
Speaker 9: the midterms that could boost the economy. We don't think
Speaker 9: that is the case. We don't think there will be
Speaker 9: this another reconciliation bill, no more tariff dividends or what
Speaker 9: have you, which Congress of course has to authorize. So yeah,
Speaker 9: I think that's going to be you know, some cats
Speaker 9: and dogs, Tom, but nothing really significant from a markets personality.
Speaker 2: Cancill, thank you so much with Pimco. Stay with us
Speaker 2: more from Bloomberg Surveillance coming up after this.
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Speaker 2: Newspapers, what do you have?
Speaker 10: I want to start with Goldman Sachs because it's going
Speaker 10: to remove DEI criteria for its board members. This is
Speaker 10: an exclusive in the Wall Street Journal. So last year
Speaker 10: you'll remember, Goldman Sachs removed a requirement that companies have
Speaker 10: at least two diverse board members before advising that company
Speaker 10: ongoing public. So now this is taking it a step further.
Speaker 10: So it plans to diversify, to remove diversity equity inclusion
Speaker 10: criteria from factors considered in identifying potential board members. It's
Speaker 10: going to be having a shareholder meeting in the spring.
Speaker 10: So it's doing this change now. And this was really
Speaker 10: at the request of the conservative activity or activist nonprofit
Speaker 10: National League and Policy Center, which I didn't realize owns
Speaker 10: a small stake in Goldman Sacks. But they're not the
Speaker 10: first ones to do this. City groups, banks. How America
Speaker 10: did it is?
Speaker 2: It was a topic this weekend. What do you think?
Speaker 2: Was it like an era that's drifting away?
Speaker 5: Yep?
Speaker 2: It seems like after President Trump, does it just come
Speaker 2: right back?
Speaker 5: Don't I don't know. I don't think so. I think
Speaker 5: the EI, for whatever reason, just this hads time in
Speaker 5: the sun.
Speaker 2: Next, where do you go?
Speaker 10: All right, we're gonna do a hard turn here and
Speaker 10: go to a New York Post story. Costco transforming the
Speaker 10: way you can now order your custom cakes because Tom,
Speaker 10: I know you like to get your custom cakes to Coscod. Yeah,
Speaker 10: so customers are soon going to be able to place
Speaker 10: those cake and deli tray orders directly through the company's
Speaker 10: mobile app and website. How revolutionary is that because prior
Speaker 10: to this, you had to drive to Costco, take out
Speaker 10: your pen and fill out a paper form in order
Speaker 10: to get your custom cakes. So they're moving into the
Speaker 10: twenty first century and now you can actually make that
Speaker 10: order online.
Speaker 2: Imagine Costco more digital, more like online savvy. Yeah sure, amazing.
Speaker 10: I mean they should they kind of have to. They
Speaker 10: didn't even say when this is going to happen. They
Speaker 10: just said later this year, And fans are already taking
Speaker 10: to social media.
Speaker 5: They're very excited about this. Okay, very good, let's still
Speaker 5: get the hot and I like.
Speaker 10: This story a lot. This is something I didn't know.
Speaker 10: So you learn something new every day with newspapers. In
Speaker 10: the New York Times, a story about how a President
Speaker 10: Trump tax break is helping breathe new life into horse racing.
Speaker 10: So look, horse racing. It's been plagued by cheating scandals,
Speaker 10: worries about animal safety, but the sportive kings seeing a
Speaker 10: bit of a renaissance here. Last year, owners spent about
Speaker 10: one and a half billion on racehorses. That is up
Speaker 10: twenty one percent from twenty twenty four. A big reason
Speaker 10: is a tax break tucked away in President Trump's One Big,
Speaker 10: Beautiful Bill. It's called a bonus depreciation. That means businesses
Speaker 10: can immediately deduct the full cost of certain assets like
Speaker 10: machinery and equipment to enhance their cash flow. So now
Speaker 10: it applies to racehorses, and it's helping turn these animals
Speaker 10: into a hot investment for wealthy people.
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