WEBVTT - Markets React To Powell, Super Tuesday Results 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.160 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:47.279 the Bloomberg Terminal, and the Bloomberg Business App. Joining us 0:00:47.280 --> 0:00:51.920 now from Charles Schwab Liz Anne Saunders. I am really 0:00:52.000 --> 0:00:56.000 upset this morning about the financial media. OMG, Apple, We're 0:00:56.000 --> 0:00:58.120 all gonna die. I don't know what Apple's going to do. 0:00:58.560 --> 0:01:00.760 I know it's inappropriate for you to talk about an 0:01:00.760 --> 0:01:06.600 individual security, but where did we lose? Looking at support 0:01:06.840 --> 0:01:11.720 of trend out one year? Dare I say out three years? 0:01:12.080 --> 0:01:16.200 Or for retirement plan investors a five year window. Just 0:01:16.280 --> 0:01:19.119 the Apple chat of the last twenty four hours has 0:01:19.160 --> 0:01:20.279 been appalling. 0:01:19.920 --> 0:01:24.320 Because time horizons have shrunk two you know, nanoseconds. It's 0:01:24.360 --> 0:01:26.319 fine to talk about three years and five years. I 0:01:26.319 --> 0:01:28.959 think that matters, but a lot of the money in 0:01:29.000 --> 0:01:32.880 the market trades in a fraction of that time horizon. 0:01:33.120 --> 0:01:36.920 And you know, in the case of not just Apple, 0:01:37.000 --> 0:01:41.440 but Tesla and even Alphabet, it's the China tie. But 0:01:42.280 --> 0:01:46.200 it's not unhealthy that we're seeing some dispersion, not just 0:01:46.280 --> 0:01:50.240 among them Magnificent seven, but churn under the surface that 0:01:50.320 --> 0:01:54.320 in a stealthy way, there is actually some action and 0:01:54.360 --> 0:01:58.600 participation down the cap spectrum in other areas. You know, 0:01:58.600 --> 0:02:01.840 industrials have broken out and to some degree financials and 0:02:02.280 --> 0:02:03.080 that's not a bad thing. 0:02:03.280 --> 0:02:05.560 So we've had Luziana such a great move in the 0:02:05.560 --> 0:02:09.200 stock market in November December last year, really driving the 0:02:09.200 --> 0:02:11.560 market high. We've actually started the year off very well. 0:02:11.600 --> 0:02:13.440 If you look at the SFP at the index level. 0:02:13.480 --> 0:02:15.320 At the index level, that's where I want to go. 0:02:15.440 --> 0:02:17.480 So we go beneath. What are you telling your clients 0:02:17.600 --> 0:02:20.560 like if they're saying, I don't feel it, you know, 0:02:20.639 --> 0:02:21.320 I don't feel it. 0:02:21.360 --> 0:02:21.680 I know that. 0:02:21.639 --> 0:02:23.959 Everybody's tell me. The s andp's up six seven percent 0:02:24.000 --> 0:02:26.200 this year. It rallied hard last year, but I don't 0:02:26.240 --> 0:02:26.520 feel it. 0:02:26.520 --> 0:02:29.959 What do you tell me, well, I it's understandable because 0:02:30.040 --> 0:02:33.040 let's use the Nasdaq as an example, because the extremes 0:02:33.160 --> 0:02:38.880 here are are more significant. But that NASDAK, notwithstanding yesterday 0:02:39.160 --> 0:02:46.680 trading around highs and at the index level, that NASDAK 0:02:46.720 --> 0:02:48.639 has not had more than a three percent maximum draw 0:02:48.680 --> 0:02:50.800 down from a year to date high. Right, But the 0:02:50.880 --> 0:02:55.000 average member Nasdaq member maximum draw down from your to 0:02:55.080 --> 0:02:56.919 date highs is negative twenty two percent. 0:02:57.040 --> 0:02:59.160 Really, wow, I didn't So what do you call that 0:02:59.240 --> 0:02:59.920 a bear market? 0:03:00.320 --> 0:03:02.959 Well, it's it's churned under the surface, and it's draw 0:03:03.040 --> 0:03:06.880 downs at different times. But yes, you've had you've had 0:03:06.960 --> 0:03:12.200 bear market level draw downs among the average stock within 0:03:12.240 --> 0:03:12.760 the Nasdaq. 0:03:12.880 --> 0:03:17.040 Jud John Tucker, that describes your entire tool one k. Right, 0:03:18.480 --> 0:03:20.079 would you say it's a duck market. 0:03:20.480 --> 0:03:22.960 It's calm, that Michael Caine line of calm on the 0:03:23.040 --> 0:03:25.160 surface and paddling like the chickens. 0:03:25.919 --> 0:03:27.840 Yeah, So listen, what do you tell folks? I mean, 0:03:27.840 --> 0:03:30.440 and maybe I mean Tom's been long magnificent seven, he's 0:03:30.440 --> 0:03:32.960 been clipping coupons. He's fine. How about the rest of us? 0:03:33.000 --> 0:03:34.680 Where do we go from here? If we haven't been 0:03:35.280 --> 0:03:37.440 long those magnificent seven? I mean, where do we go 0:03:37.480 --> 0:03:37.880 from here? 0:03:38.440 --> 0:03:42.200 So I think I think there is money that is 0:03:42.240 --> 0:03:45.680 itching to find opportunities outside of that small group, also 0:03:45.680 --> 0:03:48.320 helping displain some of the dispersion that we're seeing there. 0:03:48.640 --> 0:03:50.560 I don't don't think though, that this is the time 0:03:50.600 --> 0:03:54.279 you want to sacrifice quality. We've got this recent resurgence 0:03:54.360 --> 0:03:57.480 again in you know, today's versions of the meme stocks, 0:03:57.520 --> 0:03:59.560 and that's a little bit troubling, But I would I 0:03:59.600 --> 0:04:03.240 would fade that type of move under the surface and 0:04:03.360 --> 0:04:06.760 lean into quality, especially if you're going down the cap spectrum, 0:04:06.800 --> 0:04:08.400 because in the case of the Wrestle of two thousand, 0:04:08.880 --> 0:04:11.320 you still have somewhere between thirty and forty percent of 0:04:11.320 --> 0:04:14.920 that index of stocks that are some combination of zombie 0:04:14.960 --> 0:04:18.279 companies and or nonprofitable companies. I don't think we're at 0:04:18.320 --> 0:04:19.840 the part of the cycle where you want to lean 0:04:19.880 --> 0:04:22.799 into low quality. There are times where for a trade 0:04:22.839 --> 0:04:24.599 that makes sense, it's where the leverage is to an 0:04:24.640 --> 0:04:26.680 upturn in the economy. I don't think we're there yet. 0:04:26.880 --> 0:04:29.240 And now, folks for Global Wall Street, all of you 0:04:29.320 --> 0:04:33.040 out on applecarplay and YouTube, the question that matters where 0:04:33.120 --> 0:04:39.560 is Lizion Sanders on rebalancing? How do we rebalance without 0:04:39.760 --> 0:04:45.360 over rebalancing or selling our winners. What's the sunders process. 0:04:45.440 --> 0:04:48.120 Well, rebalancing is more about adding and trimming, not buying 0:04:48.200 --> 0:04:51.560 and selling. So that's that's the beautiful component of that 0:04:51.680 --> 0:04:57.560 discipline is it forces it's ad low trim high, distinct 0:04:57.560 --> 0:05:00.360 from by low sell high. And one of the things 0:05:00.360 --> 0:05:03.240 that individuals can consider doing, which is in contrast to 0:05:03.279 --> 0:05:07.960 what most institutions, particularly cohorts like mutual funds, that have 0:05:08.080 --> 0:05:11.960 that calendar based rebalancing final week of every quarter, I 0:05:11.960 --> 0:05:14.919 think for individuals, and you have to take into consideration 0:05:15.000 --> 0:05:19.360 the effect of turnover and transaction costs and even things 0:05:19.400 --> 0:05:22.120 like tax brackets. So this is not a blanket recommendation, 0:05:22.320 --> 0:05:25.760 but for investors to at least consider what I call 0:05:25.880 --> 0:05:29.200 portfolio based rebalancing. Let your portfolio tell you when it's 0:05:29.240 --> 0:05:31.719 time to do something, whether it's at the asset class 0:05:31.800 --> 0:05:36.320 level or even within asset classes, as opposed to making 0:05:36.360 --> 0:05:40.160 that decision on some sort of predetermined calendar schedule. 0:05:41.000 --> 0:05:43.120 I don't know. I can buy a two year treasure 0:05:43.160 --> 0:05:44.880 and get four point five to five percent, Why don't 0:05:44.920 --> 0:05:47.320 I just do that and get ready for my beach? 0:05:47.839 --> 0:05:49.960 For some investors, that does make a lot of sense. 0:05:49.960 --> 0:05:52.760 But one of the reasons why, and you guys know, 0:05:52.839 --> 0:05:56.040 are fixed income my fixed income counterparts, particularly Kathy Jones, 0:05:56.839 --> 0:06:01.760 that when we talk about during extending duration, you get 0:06:01.760 --> 0:06:04.760 that natural question, well, why would I go to a 0:06:04.800 --> 0:06:06.719 ten year you know, four point two percent when I 0:06:06.760 --> 0:06:09.159 can get something much shorter duration at a higher yield. 0:06:09.160 --> 0:06:12.960 But there's the reinvestment risk, of course it comes into play. 0:06:13.040 --> 0:06:17.440 But for many investors, the safety of treasuries, regardless of 0:06:17.480 --> 0:06:21.200 where on the maturity spectrum, is a wonderful thing right now. 0:06:21.240 --> 0:06:24.400 And you know, in the ZERP environment, so many investors 0:06:24.440 --> 0:06:27.000 were forced out the risk spectrum, either into higher risk 0:06:27.040 --> 0:06:29.760 segments of fixed income or into the equity market. And 0:06:29.760 --> 0:06:31.200 that's not the case, which is one of the reason 0:06:31.240 --> 0:06:33.520 why I think the six trillion dollars in money markets 0:06:33.960 --> 0:06:35.960 could be a little bit stickier. And I don't know 0:06:36.000 --> 0:06:38.919 that we should consider it so imminent pool of money 0:06:38.920 --> 0:06:40.719 that's going to jump into the equity market. 0:06:40.800 --> 0:06:43.160 You've been right on that. But what do you what 0:06:43.279 --> 0:06:47.400 is the action of the trillions at schwab What do 0:06:47.440 --> 0:06:50.039 you see people doing on a micro basis month to. 0:06:50.080 --> 0:06:55.080 Month, Well, a lot more money in the safety of areas, 0:06:55.160 --> 0:06:58.479 like whether it's money markets or treasuries, and I think 0:06:58.520 --> 0:07:02.120 that's a good thing for that component of portfolios that 0:07:02.200 --> 0:07:05.880 they want to have that sort of high liquidity, fairly 0:07:05.920 --> 0:07:10.840 low risk. You know, we've been very factor focused on 0:07:10.880 --> 0:07:14.680 the equity side of things. You know, we have sector biases, 0:07:14.840 --> 0:07:19.680 but we think even applying it within individual sectors is 0:07:19.720 --> 0:07:22.520 focused on factors, which is just investing based on characteristics. 0:07:22.560 --> 0:07:25.200 I got to exqueeze this in you provided a service 0:07:25.240 --> 0:07:27.480 to the nation with fiscal reviews for one of our 0:07:27.520 --> 0:07:31.200 presidents coming in years ago. Things have changed now it's 0:07:31.280 --> 0:07:34.880 trillions a month in debt and deficit. Should our listeners 0:07:34.920 --> 0:07:38.760 and viewers be concerned about the burgeoning deficits? 0:07:38.800 --> 0:07:42.080 Absolutely, and I think the investor class is gravely concerned 0:07:42.080 --> 0:07:44.800 about this. I cannot remember the last time I did 0:07:44.800 --> 0:07:47.360 a client event or a webcast where the first question 0:07:47.480 --> 0:07:49.920 wasn't about the deficit and debt. The problem is that's 0:07:49.960 --> 0:07:52.640 the investor class. I think broader constituents don't seem to 0:07:52.680 --> 0:07:54.360 care much about it, which is why neither side of 0:07:54.360 --> 0:07:56.640 the aisle tends to care about it. I think, frankly, 0:07:56.680 --> 0:07:59.600 we need more adults in the room down in DC 0:07:59.760 --> 0:08:00.960 having this conversation. 0:08:01.000 --> 0:08:03.040 We're gonna go out with this because Lizzie sent me 0:08:03.080 --> 0:08:06.040 a mean note I did nickelback one day. Ye oh yeah, 0:08:07.880 --> 0:08:11.760 she was just like crushed. Lizzienne Saunders, thank you so much. 0:08:22.400 --> 0:08:25.200 This is the conversation of the day on the arch 0:08:25.560 --> 0:08:29.040 theory that is out there, which is things are good 0:08:29.480 --> 0:08:34.640 because the wage growth after adjusting for inflation, is finally constructive. 0:08:34.720 --> 0:08:36.560 Jeff you with a chart of the week, chart of 0:08:36.559 --> 0:08:39.080 the month, chart of the first quarter. He's with bn Y. 0:08:39.160 --> 0:08:41.760 Mellon joins us out. Jeff you, thank you. You've got 0:08:41.760 --> 0:08:45.720 the United States and we're popping four percent plus wages 0:08:45.760 --> 0:08:49.560 and after inflation, there's a real wage. What is it 0:08:49.600 --> 0:08:54.959 about Italy where they've got wage growth pushing eight percent 0:08:55.760 --> 0:08:59.680 and they got disinflation deflation. How good are things in Italy? 0:09:01.120 --> 0:09:03.679 Well, just based on headline numbers, they certainly are looking 0:09:03.720 --> 0:09:05.559 are very good. And you know there were one offs 0:09:05.559 --> 0:09:10.120 in place heading towards December, so that generated a nominal 0:09:10.160 --> 0:09:13.280 wage of them seven point ninety percent. But there's genuine 0:09:13.280 --> 0:09:16.400 disinflation in Italy as well due to lower growth as 0:09:16.440 --> 0:09:19.760 you would expect, lower demand. So that buffer is in 0:09:19.800 --> 0:09:21.600 place right now and if you fink it's what several 0:09:21.600 --> 0:09:24.600 Eurozone policy makers are worried about. They're looking at real 0:09:24.600 --> 0:09:27.080 wage growth and saying people can still spend. Are we 0:09:27.120 --> 0:09:28.240 talking about cutting rates? 0:09:28.360 --> 0:09:30.000 Go to the other end of the spectrum in your 0:09:30.120 --> 0:09:33.840 magnificent chart, I'm still this church, and that is I've 0:09:33.880 --> 0:09:39.680 got inflation substantial in Japan, and I don't have wage growth. 0:09:40.040 --> 0:09:44.280 I got an ugliness. Is Japan borderline as you studied 0:09:44.280 --> 0:09:46.680 at LC nineteen thirties England. 0:09:48.120 --> 0:09:50.040 Oh, I think those are going to be very different 0:09:50.080 --> 0:09:52.640 demographics to us start off, where than what is them 0:09:52.720 --> 0:09:56.000 driving things that you know net that's what you're hearing 0:09:56.000 --> 0:10:00.320 from Japanese policymakers. Japanese lawmakers. They want to see real 0:10:00.400 --> 0:10:02.880 wage growth, not just a one off bounce, which is 0:10:02.920 --> 0:10:06.280 maybe what happened in Italy, but so that to become entrenched, 0:10:06.400 --> 0:10:09.880 only then can they consider to raise rates. And they 0:10:09.920 --> 0:10:13.160 want to generate some inflation expectations to encourage corporates to 0:10:13.200 --> 0:10:16.000 start paying higher nominal wages and generate real wage growth 0:10:16.000 --> 0:10:19.480 as well. So basically, you know, that's the ebb and 0:10:19.520 --> 0:10:21.599 flow of policy right now. And to be frank and 0:10:21.640 --> 0:10:23.360 for those of us who think the yen should strengthen 0:10:23.360 --> 0:10:24.920 in Japan. It is proving frustrating. 0:10:25.720 --> 0:10:28.439 So Jeffrey, we're going to hear from Fed Truman, Jpal today. 0:10:28.600 --> 0:10:31.800 What are the central banks in Europe? What are they 0:10:31.840 --> 0:10:32.880 saying these days? 0:10:32.920 --> 0:10:34.720 Are they following the US FED? 0:10:34.720 --> 0:10:38.199 Do they have some independent thinking visa v their economies 0:10:38.200 --> 0:10:39.160 and their rate structure? 0:10:40.040 --> 0:10:43.480 Oh, totally be independent. But what is DCB thinking? What 0:10:43.600 --> 0:10:45.839 is the government council thinking? It depends on which Government 0:10:45.880 --> 0:10:48.120 Council member you are going to ask, right, there were 0:10:48.160 --> 0:10:51.800 some members which said March should be so tomorrow should 0:10:51.800 --> 0:10:54.120 have been a live meeting, and there others who question, 0:10:54.240 --> 0:10:56.440 why are we even talking about rate cuts this year? 0:10:56.600 --> 0:10:58.240 I think you know that's been brought onto the table 0:10:58.440 --> 0:11:00.920 for the FED as well. So very different views. I'm 0:11:00.960 --> 0:11:03.560 out there at this point, but we think Q two 0:11:03.600 --> 0:11:06.080 they will need to move on rates. Eurozone economy, look 0:11:06.120 --> 0:11:09.000 at manufacturing contracting that is not in a good place 0:11:09.040 --> 0:11:09.880 compared to the US. 0:11:10.520 --> 0:11:12.480 And I know just kind of the expectations here in 0:11:12.520 --> 0:11:16.160 the US, Jeffrey, been tempered from early this year when 0:11:16.240 --> 0:11:18.440 maybe five to six rate cuts were priced and now 0:11:18.480 --> 0:11:21.120 maybe you know, kind of three or four as something 0:11:21.200 --> 0:11:25.040 similar happened in the ECB and the BOE from the 0:11:25.080 --> 0:11:27.360 market's expectations perspective. 0:11:28.000 --> 0:11:33.040 Yes, totally so. Triple digits in total cuts were expected 0:11:33.320 --> 0:11:36.120 in Europe towards the end of last year due to 0:11:36.120 --> 0:11:39.160 the soft numbers. That certainly has them turned around as well. 0:11:39.520 --> 0:11:42.920 Right now, you're seeing energy prices, for example, contributing positively 0:11:43.400 --> 0:11:46.400 to headline inflation. And you know, funny that's going on now. 0:11:46.440 --> 0:11:49.079 You know, given core inflation was too high last year, 0:11:49.120 --> 0:11:51.000 now headline inflation is them too high, So what are 0:11:51.040 --> 0:11:53.400 you really targeting? So that's where going back to my 0:11:53.480 --> 0:11:55.800 euro dollar, going back to parity core for this year, 0:11:55.960 --> 0:11:59.439 where we think the ECB will acknowledge that manufacturing really 0:11:59.480 --> 0:12:01.440 is slowing too much such that they have to move early. 0:12:01.760 --> 0:12:04.599 It's a great coverage yesterday, Jeff You and the NPC 0:12:05.480 --> 0:12:08.200 and basically three thousand people in a room with the 0:12:08.240 --> 0:12:12.120 President of China trying to move forward as a communist party. 0:12:12.640 --> 0:12:16.000 Jeff You, when you see a Bloomberg headline that says 0:12:16.160 --> 0:12:21.400 President g wants quote new productive forces to fit local conditions, 0:12:21.920 --> 0:12:23.880 What a god's name does that mean? Jeff you? 0:12:25.440 --> 0:12:30.040 If you actually go back to an NDRC document, I 0:12:30.080 --> 0:12:33.400 believe it was from a month ago. They actually specifically 0:12:33.559 --> 0:12:39.920 cite the academic who came up with these theories are 0:12:39.920 --> 0:12:42.800 within the fifth and Dove sufctral Revolution and the like. 0:12:43.080 --> 0:12:46.160 So it really is basically about resilience. It really is 0:12:46.240 --> 0:12:50.240 about identifying aspects of the economy technology at its core 0:12:50.520 --> 0:12:54.840 being able to generate high quality growth, generate productivity growth, 0:12:55.000 --> 0:12:58.120 to compensate for things like soft demographics and also potential 0:12:58.160 --> 0:13:01.040 supply chain challenges as well. That is the plan. Can 0:13:01.080 --> 0:13:03.520 it deliver growth and we shall see, But overall we 0:13:03.559 --> 0:13:05.680 do think there's upside surprise that flows into China. 0:13:05.720 --> 0:13:10.680 Technologies in the news. Ed Ludlow, Sure, I don't know 0:13:10.679 --> 0:13:13.559 what to get the man, but Jeff, you technologies in 0:13:13.640 --> 0:13:16.240 the news, whether it's ASML in the Netherlands or you 0:13:16.240 --> 0:13:20.320 know you as Microme and litigation the other day, is 0:13:20.360 --> 0:13:24.720 the Taiwan magic of TSMC? Is it at risk? 0:13:26.720 --> 0:13:30.040 So right now, China has said in the past that 0:13:30.120 --> 0:13:32.080 if let's just say supply chains are going to be 0:13:32.080 --> 0:13:36.040 at risk, then China is counting on its own innovative capacity, 0:13:36.320 --> 0:13:39.880 its own universities, its own education system to start to 0:13:39.960 --> 0:13:42.120 generate that innovation. And then if we look at what's 0:13:42.160 --> 0:13:45.760 happened over the last few decades. Of course, globalizations has 0:13:45.760 --> 0:13:49.760 helped being able to access and global knowledge, but should 0:13:49.800 --> 0:13:53.360 we also count China out in terms of its ability 0:13:54.080 --> 0:13:57.200 not being able to innovate them alike. I think that 0:13:57.360 --> 0:13:59.800 is a big assumption as well, because you know, when 0:13:59.840 --> 0:14:02.400 some times you are forced into a position where you 0:14:02.400 --> 0:14:05.360 have to innovate yourself back into growth out of the 0:14:05.400 --> 0:14:08.559 supply chain challenges, that's when sparks in a tend to happen. 0:14:08.640 --> 0:14:12.359 So I think globally, you know this trend towards deglobalization, 0:14:12.559 --> 0:14:15.120 not just China but everywhere people sharing less with each other, 0:14:15.360 --> 0:14:18.280 trading less with each other. That doesn't mean you are 0:14:18.280 --> 0:14:21.320 going to achieve your strategic objectives. So I do think 0:14:21.440 --> 0:14:23.520 with the electoral season upon us and these are things 0:14:23.520 --> 0:14:26.320 that policymakers will make us really need to think about. 0:14:26.520 --> 0:14:29.520 Thanks for the brief on Europe with the ECB tomorrow. 0:14:33.200 --> 0:14:35.600 We had Super Tuesday, but I don't know as far 0:14:35.600 --> 0:14:38.080 as Super Tuesdays goes didn't feel that super to me. 0:14:38.080 --> 0:14:39.760 But let's check in with somebody who thinks about this 0:14:39.760 --> 0:14:43.360 stuff full time, Jen Flinton. She's head of US Government 0:14:43.360 --> 0:14:45.200 affairs for Investco. 0:14:45.440 --> 0:14:45.640 Jen. 0:14:45.720 --> 0:14:49.840 We had fifteen States, and I guess Samoa as well, 0:14:50.600 --> 0:14:53.080 voting yesterday. Key takeaways for you. 0:14:54.120 --> 0:14:57.280 Yeah, I think we saw what we expected to see, 0:14:57.440 --> 0:15:02.360 which was Donald Trump pretty much taking control of the 0:15:02.400 --> 0:15:06.320 fifteen states, all but one Vermont, which he seems to 0:15:06.320 --> 0:15:10.120 have lost to Nicky Haley. But the expectation was that 0:15:10.280 --> 0:15:13.320 after Super Tuesday, NICKI Haley would leave the race, and 0:15:13.360 --> 0:15:14.960 it looks like we're going to get that around ten 0:15:14.960 --> 0:15:15.640 o'clock today. 0:15:16.440 --> 0:15:19.040 All right, So where do we go from here? For 0:15:19.440 --> 0:15:21.880 this is going to be a very long campaign because, 0:15:21.920 --> 0:15:25.840 as I remember, the election is not till November. So 0:15:25.920 --> 0:15:30.240 what do each of these politicians, these candidates, what did 0:15:30.240 --> 0:15:31.880 they do for the next you know, I don't know, 0:15:31.960 --> 0:15:33.760 nine eight months. 0:15:34.040 --> 0:15:36.400 Yeah, this is going to be a really early start 0:15:36.520 --> 0:15:41.800 to the general election season. And we're already starting to 0:15:41.840 --> 0:15:48.120 see some of that momentum building up for the policy discussion. Right, 0:15:48.200 --> 0:15:50.960 and we have this State of the Union on Thursday, 0:15:51.800 --> 0:15:54.080 where I think the President's going to telegraph some of 0:15:54.120 --> 0:15:59.360 his messaging going forward into this very long general election season. 0:15:59.880 --> 0:16:02.440 And as we approach the summer, which. 0:16:02.240 --> 0:16:03.200 Is the conventions. 0:16:03.880 --> 0:16:06.920 In July, you'll have the Republican Convention there in Wisconsin, 0:16:07.400 --> 0:16:10.840 followed in August by the Democratic Convention in Chicago, and 0:16:10.840 --> 0:16:13.840 then we'll immediately go into general election season. I think 0:16:13.880 --> 0:16:15.920 the big question right now is are we going to 0:16:15.920 --> 0:16:17.000 see debates in the fall? 0:16:17.520 --> 0:16:19.560 Okay, well, you know, I'll go with all that. But 0:16:19.600 --> 0:16:21.240 I think there's a lot going on beneath. And I 0:16:21.240 --> 0:16:25.480 know California got the Steve Garvey remember him on first base? 0:16:25.960 --> 0:16:27.520 Yes, first first base? 0:16:27.840 --> 0:16:31.160 He is janormous. Yeah, and he did a genormous day yesterday, 0:16:31.200 --> 0:16:33.880 I guess. But Jen, what did you learn about like 0:16:34.160 --> 0:16:37.680 the future of the House off of Super Tuesday? Can 0:16:37.720 --> 0:16:42.160 you say tildmore Republican likely tilmore Democratic? Lady? Which way 0:16:42.200 --> 0:16:42.560 does that go? 0:16:43.360 --> 0:16:43.480 Well? 0:16:43.520 --> 0:16:48.240 I was watching some specific races a little lessoteric, but 0:16:48.520 --> 0:16:52.000 in Arkansas you had some fights for some of your 0:16:52.040 --> 0:16:57.920 more traditional Republicans against some type primaries to their right, 0:16:59.240 --> 0:17:03.280 most notably Steve Womack, and he survived with a nice 0:17:03.280 --> 0:17:07.120 little cushion there. Looking into Texas, some of those races 0:17:07.160 --> 0:17:09.520 you're going to have to have some additional primary runoffs, 0:17:09.560 --> 0:17:13.000 so that's going to require some spend and money. But 0:17:13.080 --> 0:17:19.160 I think going into going into this next election day 0:17:19.240 --> 0:17:23.240 on March twelfth, you know, the Senate is looking really 0:17:23.280 --> 0:17:24.680 strong for Republicans. 0:17:25.080 --> 0:17:28.199 And I believe after Duke takes the acc and we 0:17:28.280 --> 0:17:32.200 have selections Sunday, isn't there a Florida primary out there? 0:17:32.280 --> 0:17:34.280 Like within two cups of coffee? 0:17:35.400 --> 0:17:38.960 That's right, Florida and last night was Texas. 0:17:39.359 --> 0:17:41.320 These are the two states. 0:17:40.840 --> 0:17:44.399 That are the most difficult states for Republicans right This map, 0:17:44.480 --> 0:17:48.920 this Senate map is really advantaged for Republicans right now. 0:17:49.160 --> 0:17:51.199 So you know, if you think Texas and. 0:17:51.560 --> 0:17:54.240 Florida are they're tough estates, you know that that's not 0:17:54.320 --> 0:17:57.320 really that tough. While you have the Democrats defending a 0:17:57.400 --> 0:17:58.119 number of states. 0:17:58.240 --> 0:18:02.479 So what if Haley drops out, where's we come out? 0:18:02.520 --> 0:18:04.720 We got to justify a road trip down there. Jennifer 0:18:04.800 --> 0:18:07.120 help us. How do we what's going to be the 0:18:07.160 --> 0:18:09.960 tension of the Florida primary? 0:18:11.040 --> 0:18:16.159 Well, I mean, look, Florida is a pretty ruby red 0:18:16.400 --> 0:18:18.840 state now. I mean it wasn't long ago that it 0:18:18.920 --> 0:18:22.880 was a purple place, but it's a pretty red state now. 0:18:22.920 --> 0:18:23.720 I will say this. 0:18:23.840 --> 0:18:29.000 You had the Biden campaign sort of telegraphing expanding the 0:18:29.080 --> 0:18:33.200 map into Florida, which kind of raised a question mark 0:18:33.240 --> 0:18:33.680 over my head. 0:18:33.680 --> 0:18:35.280 I'm not quite sure how that's going to happen. 0:18:35.640 --> 0:18:40.320 I'm really quite frankly focused in on these battleground states. 0:18:40.440 --> 0:18:45.160 I'm after, you know, Haley drops out and we start 0:18:45.200 --> 0:18:48.879 this general election and Trump probably takes the delegates he 0:18:48.960 --> 0:18:54.840 needs by next week. I'm looking at Arizona, Nevada, Wisconsin, Michigan, Pennsylvania, 0:18:54.920 --> 0:18:55.480 and ja. 0:18:55.800 --> 0:18:57.280 I am honed in on those states. 0:18:57.359 --> 0:19:00.040 I'm enough of a fossil where Florida was actually a. 0:19:00.040 --> 0:19:05.240 Battleground bund exactly, all right, Jen, the Republican Party, it 0:19:05.320 --> 0:19:08.840 is the party of Donald Trump. My father, who would 0:19:08.920 --> 0:19:11.280 vote for Nixon today if he were on the ballot, 0:19:11.520 --> 0:19:14.920 would not recognize this party. What is the Republican National Committee, 0:19:14.920 --> 0:19:17.800 the apparatus, the machine? What does it do over the 0:19:17.840 --> 0:19:18.520 next eight months? 0:19:19.160 --> 0:19:20.320 Yeah, that's a great question. 0:19:20.480 --> 0:19:25.719 So what we're seeing is as Trump really consolidating his 0:19:26.040 --> 0:19:30.359 support there and turning over the leadership at the rn C. 0:19:30.600 --> 0:19:32.720 This will now be his RNC. 0:19:33.080 --> 0:19:36.040 He's putting his daughter in law at sort of the 0:19:36.080 --> 0:19:40.040 front face of the RNC and then moving Chris Losa Vida. 0:19:40.800 --> 0:19:46.280 He's one of Trump's co campaign shairs and runs the 0:19:46.359 --> 0:19:49.359 campaign there next to Susie Wiles. He's going in and 0:19:49.400 --> 0:19:51.960 he's going to be doing a lot of the operational 0:19:52.000 --> 0:19:55.199 work at the rn C, and what they will be 0:19:55.240 --> 0:19:59.080 focused on are those battleground states and getting really strong 0:19:59.119 --> 0:20:00.800 captains to those days. 0:20:01.200 --> 0:20:05.560 Carry out suppose really important question, and I take your point. 0:20:05.640 --> 0:20:08.119 The leader takes over the party. That's the way it 0:20:08.240 --> 0:20:12.800 used to be. What's a Trump methodology in Pennsylvania versus 0:20:12.920 --> 0:20:17.240 Republican and name only Mitt Romney's methodology in Pennsylvania. 0:20:18.040 --> 0:20:21.080 Right, It's going to be focused on those. 0:20:20.840 --> 0:20:26.240 Suburbs right in the Pittsburgh area, in the Philadelphia area 0:20:26.520 --> 0:20:32.520 and trying to raise those numbers he has clearly has 0:20:32.800 --> 0:20:36.440 He clearly has a lot of growth that he needs 0:20:37.280 --> 0:20:39.399 to make there with suburban women. 0:20:40.080 --> 0:20:53.880 Okay, this has been a great brief Selvita Supermanian who 0:20:53.920 --> 0:20:56.640 joins us now from Bank of America and Sevida, what's 0:20:56.640 --> 0:21:00.520 important about this conversation. If you've made the trek across 0:21:00.560 --> 0:21:04.000 a year and a half from a more measured, cautious 0:21:04.280 --> 0:21:09.280 XPX call out to well over five thousand, describe that trek. 0:21:09.359 --> 0:21:12.600 What was the path in the process to get to 0:21:12.640 --> 0:21:13.800 your new optimism. 0:21:14.720 --> 0:21:17.320 Yeah, so it was it was a path that was 0:21:17.400 --> 0:21:18.920 paved with potholes. 0:21:19.880 --> 0:21:21.880 You know, we I think at the beginning of. 0:21:21.920 --> 0:21:26.439 Last year, all of our sentiment models were flashing green 0:21:26.720 --> 0:21:31.440 because everyone was so bearish on everything, and that was 0:21:31.480 --> 0:21:34.000 a point at which you know, we we basically saw 0:21:34.040 --> 0:21:37.280 that the real risk was being underinvested in equities. Then 0:21:37.320 --> 0:21:40.800 you had, you know, another bank blow up, you had 0:21:40.880 --> 0:21:43.960 some volatility. 0:21:42.640 --> 0:21:43.840 Closer to the end of the year. 0:21:44.119 --> 0:21:46.399 But I think it was really a year where most 0:21:46.440 --> 0:21:51.680 of our models were flashing green except valuation. And I think, 0:21:51.880 --> 0:21:55.919 you know, today we are still constructive on equities, but 0:21:56.000 --> 0:22:01.240 I would say we're less convicted in that outright. And 0:22:02.080 --> 0:22:04.199 the reason is, you know, we're at a more of 0:22:04.200 --> 0:22:07.320