WEBVTT - Late Day Stock Drop; Auto Industry On Edge From Trump Tariffs 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.920 --> 0:00:13.240 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.240 --> 0:00:17.840 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.880 --> 0:00:22.760 and trends shaping today's complex economy. Plus global business finance 0:00:22.800 --> 0:00:26.120 and tech news as it happens. The Bloomberg Business Week 0:00:26.239 --> 0:00:31.720 Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.080 --> 0:00:34.280 Just looking at the major industry groups in the S 0:00:34.280 --> 0:00:36.960 and P five hundred today, there are eleven your best 0:00:36.960 --> 0:00:39.519 performing group financials, but they were still down about four 0:00:39.520 --> 0:00:41.680 tenths of a percent. Bottom of the pack. Energy was 0:00:41.720 --> 0:00:43.920 down about two and a half percent. Real Estate was 0:00:43.920 --> 0:00:46.400 down about two and a half percent, Consumer discretionary down 0:00:46.400 --> 0:00:49.120 about two and a half percent, Materials down almost three percent. 0:00:49.200 --> 0:00:52.120 All eleven of the main industry groups are down today. 0:00:52.360 --> 0:00:54.920 Let's see what Vince Cignerella makes of the trade that 0:00:54.960 --> 0:00:58.880 we've seen not only today but since the tariffs were imposed. Vince, 0:00:58.880 --> 0:01:02.440 of course, is Bloomberg Macros strategist joining us. So, Vince, 0:01:02.680 --> 0:01:04.880 it looked like we were going to have we did 0:01:04.880 --> 0:01:07.279 have a rally, and it looked like maybe it would hold, 0:01:07.480 --> 0:01:08.000 and then. 0:01:08.600 --> 0:01:11.080 That was not to be the case is it looks. 0:01:10.800 --> 0:01:16.320 Like trade tariffs and talk about that between the US 0:01:16.319 --> 0:01:18.840 and China flared up again. Talked to us about the 0:01:18.880 --> 0:01:20.600 trade today and what was significant for you. 0:01:21.319 --> 0:01:24.080 Well, I mean the tariff is the you know again, 0:01:24.160 --> 0:01:27.399 the tariffs are the word tariff is the trade. You know, 0:01:27.480 --> 0:01:31.479 there was a little bit of excitement this morning when 0:01:31.640 --> 0:01:35.680 Trump was announcing potential deals with South Korea and Japan, 0:01:36.040 --> 0:01:38.480 and that Italy's Maloney was coming in a couple of 0:01:38.560 --> 0:01:41.720 weeks to discuss trade. So things were looking on the up. 0:01:42.360 --> 0:01:46.720 And then the reinforcement that China tariffs was still with 0:01:46.840 --> 0:01:49.400 US and we're going to hit it about one hundred 0:01:49.440 --> 0:01:53.080 and four percent tonight. That was confirmed or reconfirmed, i 0:01:53.080 --> 0:01:56.720 should say. And the reality what we heard from Trump 0:01:56.760 --> 0:01:59.520 this morning was, you know, China wants to do a deal. 0:01:59.560 --> 0:02:02.680 They don't know how to contact us, you know, I 0:02:02.720 --> 0:02:06.480 mean they went to the wto this morning complaining of 0:02:06.560 --> 0:02:10.360 Ouz Harris. So that that's hardly that's hardly a country 0:02:10.400 --> 0:02:12.119 looking to do a deal with the US. And it's 0:02:12.200 --> 0:02:15.560 really unlikely that President she is going to be knocking 0:02:15.600 --> 0:02:18.000 on the White House door with hat in hand looking 0:02:18.000 --> 0:02:19.960 to do a trade with Trump. So this is going 0:02:20.040 --> 0:02:21.639 to be extended for a while, I think. 0:02:21.560 --> 0:02:23.600 And that's extended in what says like, we know the 0:02:23.639 --> 0:02:27.959 fight's going to be extended, but the carnage that we're 0:02:27.960 --> 0:02:31.120 seeing if your long equities, how long is that going 0:02:31.160 --> 0:02:34.560 to be extended? What turns that around? I mean stocks 0:02:34.560 --> 0:02:36.320 have been in free fall in the last four days. 0:02:37.160 --> 0:02:40.560 Yeah, it's a really really good question. Talking to traders today, 0:02:40.639 --> 0:02:43.760 we're definitely seeing some folks stepping in at the clothes, 0:02:43.840 --> 0:02:48.400 getting their toes in the water. The extension that possibly 0:02:48.520 --> 0:02:50.679 that people are talking about is forty five hundred in 0:02:50.720 --> 0:02:53.919 the SMP cash. We're still about four hundred away from that. 0:02:54.000 --> 0:02:56.440 But you know, there's going to be a lot of 0:02:56.440 --> 0:03:00.240 give and take, and even if that happens, we're is 0:03:00.480 --> 0:03:02.320 just a lot of talk and I don't want to 0:03:02.320 --> 0:03:04.920 really go into this too much because it's just a 0:03:04.919 --> 0:03:07.800 lot of scuttle but on the street about if things 0:03:07.880 --> 0:03:11.959 continue like this, will the Trump administration look for a scapegoat? 0:03:12.280 --> 0:03:14.720 Will it be will it be Lutnik? Will it be 0:03:14.840 --> 0:03:17.360 the Varro? And traders today are putting more bets on 0:03:17.400 --> 0:03:18.840 the Varrol than Ludnik. 0:03:18.480 --> 0:03:20.320 So what would what would that do to markets? If 0:03:20.360 --> 0:03:22.960 if Navarro got the booth, and look again, you're saying 0:03:22.960 --> 0:03:24.680 this is scuttle. You're saying this is scuttle, but. 0:03:25.360 --> 0:03:27.959 It's totally rumored, just totally conversation on this. 0:03:28.200 --> 0:03:28.840 But there's it. 0:03:28.960 --> 0:03:32.360 But would that actually o fact to this whatsoever? But 0:03:32.440 --> 0:03:34.839 if Navarro would get the booth tomorrow, you probably see 0:03:34.880 --> 0:03:37.680 about a two thousand point rally in out. 0:03:37.680 --> 0:03:39.800 To be honest, well, you know, it's so funny that 0:03:39.840 --> 0:03:41.440 you say that, because we were talking with our Max 0:03:41.480 --> 0:03:43.560 Chafkin about some of the back and forth between Elon 0:03:43.680 --> 0:03:48.120 musk Uh and Peter Navarro, and you know what, there's 0:03:48.160 --> 0:03:53.080 been some speculation again rumor careful, let's be smart here, 0:03:53.280 --> 0:03:56.040 but that, yes, but that the president, you know, looking 0:03:56.120 --> 0:03:59.080 for an off ramp, and I guess we just assumed 0:03:59.080 --> 0:04:01.800 it would be in deal with countries. But you do 0:04:01.880 --> 0:04:06.000 wonder if he is looking for some individual to say, listen, 0:04:06.000 --> 0:04:09.200 that was his plan. Maybe it was wrong. Let's get him, 0:04:09.240 --> 0:04:11.280 you know, let him go, and let's let's let's redo this. 0:04:11.880 --> 0:04:13.200 But again, who knows? 0:04:13.360 --> 0:04:16.320 Right, Yeah, I mean I think the I think what 0:04:16.440 --> 0:04:18.520 you said, the former part of that is really where 0:04:18.520 --> 0:04:20.560 it's going to come from. You're going to see deals 0:04:20.600 --> 0:04:24.520 getting done okay, And I think the administration is going 0:04:24.560 --> 0:04:27.400 to be touting more of the deals getting done in 0:04:27.400 --> 0:04:29.520 the next couple of weeks as opposed to the deals 0:04:29.680 --> 0:04:32.919 not getting done as in visa vich China, And I 0:04:32.920 --> 0:04:35.039 think we're going to start to see a little bit 0:04:35.120 --> 0:04:37.479 more positive comments come out of the White House to 0:04:37.600 --> 0:04:39.920 turn this little bit. Don't forget. We've even seen the 0:04:40.040 --> 0:04:42.919 Republicans pushing back against Trump where they tried booking the 0:04:42.960 --> 0:04:46.040 Senate and some in the House trying to basically impose 0:04:46.080 --> 0:04:48.520 a bill that basically says Trump has to go through 0:04:49.480 --> 0:04:51.640 the Senate in the House in order to impost harffs 0:04:51.720 --> 0:04:54.920 it's dead on arrival. It's nice, it's it's not going 0:04:54.960 --> 0:04:58.440 to absolutely so, it's it's the OA, it's not going anywhere. 0:04:58.480 --> 0:05:00.960 But just the idea that they would even consider that, 0:05:01.040 --> 0:05:03.760 and that his own party is pushing back is definitely 0:05:03.800 --> 0:05:06.280 going to have some conversation going on in the White House. 0:05:06.320 --> 0:05:09.200 And I think it's very very interesting that in the 0:05:09.279 --> 0:05:12.960 last twenty four maybe even forty eight hours, we haven't 0:05:12.960 --> 0:05:16.240 heard a peep at a Ludnik and he's been the 0:05:16.279 --> 0:05:18.960 real bull in the China shop, if you will. In 0:05:19.080 --> 0:05:22.360 the same camp As Navarro talking really tough on trade. 0:05:22.520 --> 0:05:24.920 Okay, so maybe that's the case. Who we have heard 0:05:24.960 --> 0:05:27.880 a lot from his Treasury secretary Scott Bessett. What do 0:05:27.880 --> 0:05:30.560 you make of that. He's been out each and every day. 0:05:31.480 --> 0:05:34.360 Yeah, you know, he's not going to go against Trump, 0:05:34.520 --> 0:05:37.159 but he is again in terms of what the market 0:05:37.160 --> 0:05:40.919 sees is a voice or reason, so he's more likely 0:05:41.000 --> 0:05:44.560 to put a positive spin on things than a negative 0:05:44.560 --> 0:05:46.920 spin on things. Remember like the rumors yesterday what has 0:05:46.960 --> 0:05:49.039 it where he said Trump was going to consider a 0:05:49.120 --> 0:05:53.560 ninety day pause. That headline was complete fiction. Came out 0:05:53.560 --> 0:05:58.200 of a conversation on Fox, which was an elaboration on 0:05:58.279 --> 0:06:00.719 a very very on very some thing has to said 0:06:00.720 --> 0:06:02.480 that I really had nothing to do with a pause, 0:06:02.720 --> 0:06:07.000 And you saw the market react like surging on that news. 0:06:07.080 --> 0:06:10.680 They're desperately looking for good news to buy into this. 0:06:10.800 --> 0:06:13.280 People do have cash, they do want to get into this, 0:06:13.760 --> 0:06:15.760 But you just don't want to step in front of 0:06:15.800 --> 0:06:19.000 the steamroller right now because it's still it's still coming. 0:06:19.040 --> 0:06:22.320 As we saw today, although like think about like in 0:06:22.360 --> 0:06:25.160 the last fifteen minutes, the Dow was down over eight hundred, 0:06:25.520 --> 0:06:29.279 down three twenty into the close, so there's still a 0:06:29.440 --> 0:06:32.640 lot of possibility for this to turn around that I 0:06:32.640 --> 0:06:34.480 would just be really careful if you want to dip 0:06:34.520 --> 0:06:37.120 your toes in a little bit. It's not a bad idea, yeah, 0:06:37.120 --> 0:06:39.880 but definitely don't be sticking your head through the door. 0:06:40.360 --> 0:06:42.200 Vince, Vince, it's you know, I want to go back 0:06:42.240 --> 0:06:44.520 to this idea that you know, if we saw a 0:06:44.600 --> 0:06:49.880 head roll, if you you you say, if you see 0:06:49.880 --> 0:06:52.720 a head roll, we could see a Look. We kind 0:06:52.720 --> 0:06:55.720 of saw this yesterday with this ninety day reprieve. You know, 0:06:56.520 --> 0:06:59.760 read all about it on the terminal. Great stories from 0:06:59.760 --> 0:07:03.000 Bailey Lipschulten more about what happened yesterday. Carol, you were out, 0:07:03.040 --> 0:07:05.039 but it was crazy, Yeah. 0:07:04.839 --> 0:07:06.120 I believe it or not. 0:07:06.600 --> 0:07:07.720 You've paid attention occasionally. 0:07:07.720 --> 0:07:09.840 I was like reading it because I hate you can't I. 0:07:12.080 --> 0:07:14.960 Was. But Vince, if we were to see a head roll, 0:07:15.880 --> 0:07:20.040 that doesn't necessarily mean that Trump would back off this policy, 0:07:20.160 --> 0:07:24.080 he told our editor in chief John Mikelswade before the election. 0:07:24.800 --> 0:07:28.280 Tariff is his favorite word in the English language. 0:07:28.760 --> 0:07:31.960 I remember that conversation very very well. See what I 0:07:32.000 --> 0:07:35.640 think what people really need to understand is and forget 0:07:35.680 --> 0:07:39.360 about the short term view oh, the markets are going down. 0:07:39.440 --> 0:07:41.120 Trump's going to change his mind. This, that, and the 0:07:41.160 --> 0:07:44.920 other thing. He really really is an attempting to rewrite 0:07:45.080 --> 0:07:48.200 economic policy for the United States for the last forty years. 0:07:48.520 --> 0:07:52.560 He wants to bring us back before globalization, before the 0:07:52.640 --> 0:07:56.760 Clinton globalization years, more towards that nineteen eighty eight, Reagan, 0:07:56.880 --> 0:08:01.040 nineteen ninety two, George Bush kind of concept. Are trying 0:08:01.080 --> 0:08:04.240 to bring, you know, manufacturing back to the United States. 0:08:04.360 --> 0:08:06.400 The only way he's going to do that is to 0:08:06.480 --> 0:08:10.680 somehow undermine and cripple the manufacturing state of China. And 0:08:10.720 --> 0:08:13.040 the only way to do that is to outlast them. 0:08:13.320 --> 0:08:15.520 You know, we can't outspend them. We have a thirty 0:08:15.520 --> 0:08:19.480 six in building a trillion dollar deficit. This isn't This 0:08:19.520 --> 0:08:23.280 isn't Reagan against against Russia in the eighties where he 0:08:23.320 --> 0:08:26.480 outspent Russia and sort of won that war, if you will. 0:08:27.120 --> 0:08:30.200 But to be fair, to be fair, Vince, you know, 0:08:30.280 --> 0:08:32.480 this is something we talked about Tom Morlock earlier. I mean, 0:08:32.480 --> 0:08:34.720 we have what a one point two trillion dollar trade 0:08:34.760 --> 0:08:39.000 deficit with China, and I mean that's real money, right, 0:08:39.040 --> 0:08:42.400 And the whole reason that American companies wanted to be 0:08:42.440 --> 0:08:43.960 in China and they set up shop there and so 0:08:44.000 --> 0:08:46.000 on and so forth. Is they wanted to tap into 0:08:46.000 --> 0:08:49.000 the one billion plus consumers of China and it hasn't 0:08:49.040 --> 0:08:52.959 necessarily worked out as well as some might have anticipated. 0:08:53.200 --> 0:08:55.679 And so this is about I feel like, or is 0:08:55.720 --> 0:08:59.560 it about us and China or China kind of playing 0:08:59.559 --> 0:09:04.200 more in a way in terms of trade back and forth. 0:09:05.200 --> 0:09:07.480 You know, I think so if you realistically, if you 0:09:07.480 --> 0:09:11.480 look at globalization, the idea of globalization was we were 0:09:11.480 --> 0:09:14.920 going to float all boats. So we in the United States, 0:09:14.960 --> 0:09:17.679 for instance, and the developed countries I shouldn't say just 0:09:17.760 --> 0:09:22.760 the United States. We were going to invest in underdeveloped 0:09:22.760 --> 0:09:25.559 countries and such. We were going to lift up their 0:09:25.600 --> 0:09:28.080 economies and then they were going to buy our goods, right, 0:09:28.320 --> 0:09:30.559 and all boats were going to float and everyone was 0:09:30.640 --> 0:09:33.120 going to prosper. Well, that didn't happen. If you look 0:09:33.160 --> 0:09:35.880 at globalization in and of itself, it was a failed policy. 0:09:36.160 --> 0:09:39.240 What happened was the developed countries spent a lot of 0:09:39.240 --> 0:09:43.000 money into underdeveloped countries and they didn't buy anything of ours. 0:09:43.040 --> 0:09:45.280 We just bought a lot of their cheaper stuff, and 0:09:45.360 --> 0:09:49.040 that created deficits across the developed nations. Mostly of course, 0:09:49.040 --> 0:09:52.439 in the United States because our consumers spend more than 0:09:52.559 --> 0:09:55.520 anyone else in the world. And so what Trump is 0:09:55.520 --> 0:09:58.280 trying to do is recalibrate that. And you know, you 0:09:58.320 --> 0:10:00.920 can't fix it all in one day, but bring it 0:10:00.960 --> 0:10:05.679 back a little closer to the middle where essentially we 0:10:05.760 --> 0:10:08.440 get some meeting of the ways where they get a 0:10:08.440 --> 0:10:10.240 little bit I get that balance and trade. 0:10:10.400 --> 0:10:12.320 Yeah, maybe you can look, maybe you can get Japan 0:10:12.360 --> 0:10:14.840 to buy more US autos because we buy so many 0:10:14.880 --> 0:10:18.520 autos from Japan that for example. But is there a 0:10:18.559 --> 0:10:22.040 way in your view to actually go back in time, 0:10:22.679 --> 0:10:24.719 because I think the ship has sailed the genies out 0:10:24.720 --> 0:10:26.960 of the bottle. That seems to be like, this is 0:10:27.000 --> 0:10:30.400 not a world of forty years ago. This is a 0:10:30.440 --> 0:10:33.800 world where you know, we're we're using WhatsApp to connect 0:10:33.840 --> 0:10:36.840 with people all over the world right now on devices 0:10:37.200 --> 0:10:41.920 that are made with components that include Africa, Asia, Europe, 0:10:42.120 --> 0:10:45.160 the United States. Like, this is a different world that 0:10:45.200 --> 0:10:47.800 we live in. We're not making clothes in the US 0:10:47.840 --> 0:10:51.240 that we wear like, this is a completely different world. 0:10:52.440 --> 0:10:56.920 Yes, and we're we're not going to be making We're 0:10:56.920 --> 0:10:59.800 not going to be making textiles, you know, cheap textiles 0:10:59.840 --> 0:11:03.360 and United States. I think realistically, the manufacturing he wants 0:11:03.400 --> 0:11:05.600 to bring back to the United States is a bit 0:11:05.640 --> 0:11:09.280 more high end. Where he's talking about guatos, for instance, chips, 0:11:10.720 --> 0:11:12.800 you know, things of that nature. We're not we're not 0:11:12.920 --> 0:11:16.440 talking about we're not talking about making sweaters and socks 0:11:16.480 --> 0:11:18.360 in the United States. It's more on the high end 0:11:18.360 --> 0:11:22.920 stuff and setting and setting perhaps in the high end 0:11:23.000 --> 0:11:26.880 of things, a more level playing field, you know, as 0:11:26.920 --> 0:11:30.640 opposed to as opposed to what happens now. And you know, look, yeah, 0:11:30.720 --> 0:11:33.080 to think of it realistically, all of the rhetoricrat they 0:11:33.080 --> 0:11:35.560 are saying tariffs are bad, tariffs are bad, tariffs are bad. Well, 0:11:35.559 --> 0:11:37.760 if they're so bad, why do so many other countries 0:11:37.800 --> 0:11:41.000 have them? To some extent, it's definitely benefiting a lot 0:11:41.040 --> 0:11:43.640 of other countries. And I think that is what he's 0:11:43.679 --> 0:11:45.480 trying to do, just to get a little bit of 0:11:45.480 --> 0:11:48.640 a fairer trade situation. Right as you mentioned it, we're 0:11:48.679 --> 0:11:51.160 not going back to the nineteen eighties. We're not going 0:11:51.240 --> 0:11:53.800 to you know, steel mills are now. There's going to 0:11:53.840 --> 0:11:55.920 be propped up all over this country tomorrow. 0:11:56.200 --> 0:11:58.080 But we haven't gone back to smooth Holly. I'm just 0:11:58.120 --> 0:11:58.880 going to say. 0:11:59.120 --> 0:12:02.040 Going back further, I know, love it, love it, just 0:12:02.080 --> 0:12:02.920 for those on radio. 0:12:03.320 --> 0:12:05.000 Vince actually like rolled his eyes on that. 0:12:05.600 --> 0:12:07.440 Having said that, Vince, I want to go back. 0:12:07.640 --> 0:12:09.040 I want to go back to the market. 0:12:09.240 --> 0:12:14.200 You know, we technically intraday saw a twenty percent correction 0:12:14.840 --> 0:12:16.920 on the S and P five hundred and so technically 0:12:17.040 --> 0:12:18.000 hitting a bear market. 0:12:18.040 --> 0:12:19.400 We bounced back off of it. 0:12:19.480 --> 0:12:21.960 Is that significant that we didn't close there? 0:12:24.520 --> 0:12:26.400 I think we need to see how we do overnight 0:12:26.480 --> 0:12:29.120 and have China markets where the Asian markets react overnight. 0:12:29.160 --> 0:12:31.839 I mean, we could easily see us testing to get 0:12:31.880 --> 0:12:37.120 in tomorrow into the US session, depending upon the rhetoric. 0:12:37.160 --> 0:12:39.319 I mean, you know, how is China going to push 0:12:39.400 --> 0:12:41.800 back tonight? We don't know, We don't We don't know 0:12:41.800 --> 0:12:43.280 what kind of comments we're going to get from she 0:12:43.679 --> 0:12:48.080 or or or other trade ministers from China. You know, 0:12:48.120 --> 0:12:51.240 we we've we've pushed them pretty hard, you know, and 0:12:51.600 --> 0:12:55.280 to expect them again to come to the table is naive. 0:12:55.400 --> 0:12:58.520 I think, what's the what's the commentary that you're finding 0:12:59.640 --> 0:13:02.240 as you you you know, talk with traders throughout the day. 0:13:02.440 --> 0:13:06.240 I mean, yes, it's a lot of selling. Yes, the 0:13:06.280 --> 0:13:08.960 markets have functioned well For those of us who are 0:13:08.960 --> 0:13:12.600 here during the Great Financial Crisis, it was crazy and 0:13:12.640 --> 0:13:15.319 you really felt like I mean, I just remember thinking, 0:13:15.360 --> 0:13:17.080 oh my god, the financial market system. 0:13:17.240 --> 0:13:19.520 It doesn't feel like that to you now though it doesn't. 0:13:20.000 --> 0:13:24.160 I mean, I think everybody clearly understands why the market 0:13:24.200 --> 0:13:27.559 is selling off. There is a clear catalyst, and. 0:13:27.520 --> 0:13:30.199 We call it self self inflicted. 0:13:30.760 --> 0:13:34.760 Yeah, and so exactly. So I how do you what 0:13:34.800 --> 0:13:38.120 do people say about the market selling about this and 0:13:38.200 --> 0:13:41.560 when does it become something much more problematic than an 0:13:41.640 --> 0:13:44.240 understanding that it's coming from the White House directly. 0:13:45.240 --> 0:13:48.280 Well, you know, I think the endgame, I mean, obviously 0:13:48.320 --> 0:13:50.920 the administration's endgame, but I think everybody would kind of 0:13:50.920 --> 0:13:53.000 think the same. If you look at this in the 0:13:53.040 --> 0:13:57.400 more medium to long term, this will pass, as as 0:13:58.040 --> 0:13:59.959 if you think about the financial crisis that you made, 0:14:00.120 --> 0:14:03.160 you passed. I can remember the crash in the late eighties, 0:14:03.480 --> 0:14:05.680 looking over my shoulder and every time I looked over 0:14:05.720 --> 0:14:08.040 at the Tiller eight, which was back then, and see 0:14:08.080 --> 0:14:10.240 whether the dob was going going, oh my god, we're 0:14:10.280 --> 0:14:14.680 still going down. Yeah, you know, the the the sell 0:14:14.720 --> 0:14:19.760 off of this magnitude, I think it's it's different in 0:14:19.800 --> 0:14:23.160 the sense that it's all happening in kind of one week, 0:14:23.240 --> 0:14:26.840 and then not just the sell off, but the volatility. 0:14:27.200 --> 0:14:29.360 We're down, we're up, We're down, we're up. It kind 0:14:29.360 --> 0:14:31.560 of reminds me of training currencies back in the eighties. 0:14:31.840 --> 0:14:33.840 This is a kind of volatility that we saw in 0:14:33.920 --> 0:14:36.920 currency markets forty five years ago. You don't really see 0:14:36.920 --> 0:14:40.160 it in equity market so much so it's it's unusual, 0:14:40.320 --> 0:14:44.160 and it's and it's different, and I think a lot 0:14:44.160 --> 0:14:46.480 of folks in equities are just not accustomed to this. 0:14:47.120 --> 0:14:49.400 Uh And I don't think any traders are really accustomed 0:14:49.440 --> 0:14:51.720 to this. Since we've gone electronic, we haven't had it. 0:14:51.960 --> 0:14:53.080 Will this kind of evolve? 0:14:53.200 --> 0:14:56.240 Vince? Is there is there is there a technical signal 0:14:56.360 --> 0:15:02.160 that you can glean from stocks starting higher, then losing 0:15:02.160 --> 0:15:06.280 that momentum, and then finishing decidedly in the red. 0:15:08.640 --> 0:15:11.080 Well, you know, you look at this, and you look 0:15:11.080 --> 0:15:13.920 at you know, these are ugly tapes. I mean, without question, 0:15:14.280 --> 0:15:16.320 you don't like to see this kind of price action 0:15:16.440 --> 0:15:18.760 where you where you start out high in the morning 0:15:18.800 --> 0:15:21.520 and you have this positive euphoria and then the sort 0:15:21.520 --> 0:15:23.440 of puke into the into the afternoon. 0:15:23.560 --> 0:15:26.840 That's a technical term right, yeah, definitely. 0:15:26.560 --> 0:15:29.960 Technically right into the close, but there was I will 0:15:30.000 --> 0:15:32.080 say there was a positive to the close. I mean 0:15:32.120 --> 0:15:34.160 we were down about eight hundred and fifty points. I 0:15:34.160 --> 0:15:36.840 think in the now we closed down around three twenty, 0:15:37.160 --> 0:15:40.680 So there was definitely there was definitely some capitulation, some buying. 0:15:40.880 --> 0:15:43.440 We're starting on just glancing over futures is still trading 0:15:43.440 --> 0:15:48.200 abower as we head into the last hour before the 0:15:48.240 --> 0:15:50.600 break at five o'clock, So we are seeing a little 0:15:50.640 --> 0:15:52.640 bit of a sell off in future and it's not terrible, 0:15:52.680 --> 0:15:57.520 it's not aggressive. You know, we have inflation numbers coming 0:15:57.560 --> 0:16:00.800 on Thursday and Friday, sentiment numbers coming on Friday, and 0:16:00.880 --> 0:16:03.400 we start the earning season with banks on Friday. So 0:16:04.560 --> 0:16:07.240 my guess is the earnings bar is probably going to 0:16:07.280 --> 0:16:09.600 be set pretty low for next week and for the 0:16:09.600 --> 0:16:12.000 banks on Friday. So there is a very good chance 0:16:12.040 --> 0:16:15.440 we get some good numbers. And if the tariff conversation 0:16:15.640 --> 0:16:18.720 just quiets a little and we get some positive earnings 0:16:18.760 --> 0:16:21.120 next week and a good week of earnings, we could 0:16:21.160 --> 0:16:22.920 easily see this rebound dramatically. 0:16:23.120 --> 0:16:26.320 Well, listen around the markets. We went with you, thank you, 0:16:26.400 --> 0:16:30.840 thank you, thank you. Vince Signorellacome macro strategists joining us 0:16:30.880 --> 0:16:32.120 here on this Tuesday. 0:16:32.680 --> 0:16:36.400 You're listening to the Bloomberg Business Week podcast. Catch us 0:16:36.480 --> 0:16:39.440 live weekday afternoons from two to five e's during listen 0:16:39.520 --> 0:16:43.080 on Applecarplay and Android Otto with the Bloomberg Business app 0:16:43.240 --> 0:16:47.480 or watch us live on YouTube. 0:16:47.280 --> 0:16:49.920 From Wall Street to Capitol Hill. Because politically, this trade 0:16:49.960 --> 0:16:53.280 war is creating divisions in the Republican net Party, Republican 0:16:53.320 --> 0:16:56.960 senators expressed anxiety over the potential economic toll of Donald 0:16:56.960 --> 0:17:00.000 Trump's global tariffs and pressed his trade representative from more 0:17:00.120 --> 0:17:03.720 clarity on the President's objectives in the trade conflict. Check 0:17:03.720 --> 0:17:06.800 Out what Tom Tillis of North Carolina said today, quote 0:17:07.000 --> 0:17:10.399 Who's throat? Do I get to choke? If this turns 0:17:10.400 --> 0:17:13.440 out to be wrong? This was as US Trade Representative 0:17:13.480 --> 0:17:16.800 Jameson Greer testified before the Senate Finance Committee. You got 0:17:17.000 --> 0:17:20.160 Ted Cruz extending his critique of the tariffs, and then 0:17:20.440 --> 0:17:23.360 carry you got to note Elon Musk, the billionaire presidential 0:17:23.400 --> 0:17:26.240 advisor he attacked White House Trade Counselor Pete Navarro is 0:17:26.320 --> 0:17:30.000 dumber than a sack of bricks over this fight. This 0:17:30.119 --> 0:17:32.159 terriff regime's spilling onto social media. 0:17:32.000 --> 0:17:34.800 Today, we want to ask what Wendy Schiller thinks and 0:17:34.840 --> 0:17:36.680 makes of all of this. She's professor of political science 0:17:36.680 --> 0:17:40.320 at Brown University, joining us from Providence, Rhode Island. Professor Shiller, 0:17:40.359 --> 0:17:42.440 great to have you back with us. It does feel 0:17:42.480 --> 0:17:46.159 like some Republicans are getting a little uncomfortable with some 0:17:46.200 --> 0:17:47.360 of the President's policies. 0:17:47.359 --> 0:17:48.040 How do you read it? 0:17:48.440 --> 0:17:51.240 Well, good after Carol and Tim. I think this is 0:17:51.280 --> 0:17:53.640 going to be an interesting sort of power play within 0:17:53.680 --> 0:17:56.280 the Republican Party and it will spill over to the 0:17:56.320 --> 0:18:00.000 tax cut bill because the only leverage that the Republicans 0:18:00.080 --> 0:18:04.640 Senators have even Visa VI the House Republicans and President 0:18:04.680 --> 0:18:07.639 Trump is the tax bill, which President Trump really really 0:18:07.760 --> 0:18:11.879 wants as an accomplishment, particularly for this year. So, you know, 0:18:11.960 --> 0:18:14.160 if they're not getting the answers they want, if they're 0:18:14.160 --> 0:18:17.080 getting if they want to protect particular industries in their states, 0:18:17.440 --> 0:18:20.199 even at the most local level, big businesses that are 0:18:20.240 --> 0:18:23.320 suffering from these tariffs or will suffer from the tariffs, 0:18:23.520 --> 0:18:25.919 they're going to have to play hardball with the President's 0:18:25.960 --> 0:18:29.280 most preferred legislative package, and that's the tax cuts. So 0:18:29.440 --> 0:18:31.720 you're going to start to see behind the scenes, but 0:18:31.840 --> 0:18:34.920 also maybe publicly. Ran Paul's been pretty out there from 0:18:34.960 --> 0:18:37.719 Kentucky saying he's not happy about this either. And I 0:18:37.720 --> 0:18:41.200 think that's what's beginning to disrupt the inter chamber negotiations 0:18:41.200 --> 0:18:41.920 on the tax bill. 0:18:42.160 --> 0:18:44.080 Bet in the House, in the Senate, how much power 0:18:44.160 --> 0:18:48.000 do these members of Congress actually have because the Resident 0:18:48.000 --> 0:18:52.879 has shown he is not afraid to support primarying some 0:18:53.000 --> 0:18:56.480 of these folks if they don't get behind his agenda. 0:18:56.960 --> 0:18:59.760 Yeah, you know, his Trump's success record in primaries in 0:18:59.800 --> 0:19:01.480 the in the Senate level, at the cement level is 0:19:01.520 --> 0:19:04.159 not all that great. His success is a little bit 0:19:04.160 --> 0:19:06.359 better on the House side, but not really on the 0:19:06.359 --> 0:19:08.760 Senate side. And you mentioned Tom Tillis who's running for 0:19:08.800 --> 0:19:12.119 reelection in North Carolina, Joony Ertz running for re election 0:19:12.200 --> 0:19:13.560 in Iowa, just to name a few. 0:19:13.960 --> 0:19:15.640 And so those seats. 0:19:15.440 --> 0:19:18.840 Particularly North Carolina, could be heavily contested. You know, let's 0:19:18.840 --> 0:19:22.400 say the former governor where Cooper wants to run. That's 0:19:22.400 --> 0:19:24.840 gonna be a problem for Tom Tillis. So they've got 0:19:24.840 --> 0:19:27.679 to show some returns. What is the endgame on the 0:19:27.760 --> 0:19:31.439 tariff fights? What does he expect to accomplish? The President Trump, 0:19:31.760 --> 0:19:34.879 As you say in your prior conversations, you're not bringing 0:19:34.920 --> 0:19:37.800 textile manufacturing back to North Carolina. You have had a 0:19:37.840 --> 0:19:41.000 resurgence on a micro level of some companies making things 0:19:41.000 --> 0:19:41.960 in North Carolina. 0:19:42.000 --> 0:19:44.920 That's ouriasonal stuff. I think people would say. 0:19:44.800 --> 0:19:47.280 Truly, well, you know no, I mean my understanding. I 0:19:47.320 --> 0:19:50.560 think there's a couple of companies that's taking over factories 0:19:50.600 --> 0:19:53.120 and done pretty well. But you know what is Tom 0:19:53.160 --> 0:19:57.000 Till's gonna say uh to North Carolina when things really 0:19:57.040 --> 0:19:59.960 become more expensive or inflation goes up and the Tower 0:20:00.119 --> 0:20:02.399 sort to blame unless Trump pulls the plug on the 0:20:02.440 --> 0:20:06.360 tariffs before those contemplationary pressures can really exert their will. 0:20:06.400 --> 0:20:08.200 Wendy, what do you think is the endgame? I mean 0:20:08.320 --> 0:20:12.120 President Trump has talked about terriffs for a long, long, long, 0:20:12.200 --> 0:20:14.240 long time, right. This has been part of his playbook, 0:20:14.280 --> 0:20:16.399 and he didn't get to do as much as I 0:20:16.440 --> 0:20:17.960 think it's safe to say that he hoped to do, 0:20:18.040 --> 0:20:21.280 maybe the first time around, doing something a lot more 0:20:21.359 --> 0:20:25.760