1 00:00:02,920 --> 00:00:07,280 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,960 --> 00:00:13,840 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 3 00:00:13,920 --> 00:00:17,320 Speaker 2: weekdays at ten am Eastern on Applecarplay and Android Auto 4 00:00:17,360 --> 00:00:20,279 Speaker 2: with the Bloomberg Business App. Listen on demand wherever you 5 00:00:20,360 --> 00:00:24,040 Speaker 2: get your podcasts, or watch us live on YouTube. 6 00:00:25,000 --> 00:00:27,560 Speaker 3: The SMP is down by over one percent. A big 7 00:00:27,600 --> 00:00:31,040 Speaker 3: part of this was the Bloomberg report overnight that we 8 00:00:31,080 --> 00:00:35,280 Speaker 3: could potentially see severe trade restrictions if companies like Tokyo 9 00:00:35,320 --> 00:00:39,760 Speaker 3: Electron and ASML continue to give China access to advance 10 00:00:39,800 --> 00:00:43,400 Speaker 3: to semiconductor technology, and that whole situation. 11 00:00:43,000 --> 00:00:44,560 Speaker 4: Is weighing on the chip stocks. 12 00:00:44,600 --> 00:00:48,640 Speaker 3: And the current Bloomberg Global Economy reporter is joining us, 13 00:00:48,840 --> 00:00:51,720 Speaker 3: and can you walk us through the potential what the 14 00:00:51,720 --> 00:00:53,600 Speaker 3: Biden administration is thinking about. 15 00:00:54,720 --> 00:00:57,680 Speaker 5: So it's a pretty draconian next step. Essentially, what the 16 00:00:57,680 --> 00:01:01,200 Speaker 5: administration talking about is making use all of something calledly 17 00:01:01,320 --> 00:01:04,840 Speaker 5: foreign Direct Product Rule, and in essence that means that 18 00:01:04,880 --> 00:01:07,720 Speaker 5: gives the US leverage over any kind of technology that 19 00:01:07,880 --> 00:01:11,880 Speaker 5: includes any kind of US input or material or technology 20 00:01:11,880 --> 00:01:14,720 Speaker 5: in any way. So it would be a big next 21 00:01:14,720 --> 00:01:16,200 Speaker 5: step if the word to go around this route and 22 00:01:16,240 --> 00:01:19,200 Speaker 5: try and put the clampers down on ASML and on 23 00:01:19,280 --> 00:01:22,920 Speaker 5: Tokyo Electron, Like you mentioned. Now, the thing about this 24 00:01:23,040 --> 00:01:26,000 Speaker 5: is it raises questions in two ways. It's delicate dance 25 00:01:26,080 --> 00:01:28,080 Speaker 5: for the US in terms of how it approaches this 26 00:01:28,160 --> 00:01:31,360 Speaker 5: with allies. Could be diplomatic tension between both Japan and 27 00:01:31,400 --> 00:01:34,280 Speaker 5: the Netherlands. Companies in the middle of this already say 28 00:01:34,280 --> 00:01:36,840 Speaker 5: that they've been hit hard enough. And then on the 29 00:01:36,840 --> 00:01:39,000 Speaker 5: other side, it raises the questions about, well, just how 30 00:01:39,080 --> 00:01:41,440 Speaker 5: effective have the US policies been Because it was back 31 00:01:41,480 --> 00:01:44,560 Speaker 5: towards late twenty twenty two when the US announces sweeping 32 00:01:44,600 --> 00:01:48,360 Speaker 5: measures on chip technology export restrictions to China. Back then 33 00:01:48,880 --> 00:01:50,600 Speaker 5: it was expected to be a big deal and will. 34 00:01:50,640 --> 00:01:53,919 Speaker 5: Clearly it's not necessarily having the impact that they wanted. 35 00:01:53,960 --> 00:01:57,760 Speaker 5: So it's a potential major set, but raised lots of 36 00:01:57,840 --> 00:01:59,800 Speaker 5: questions about where policy is going. 37 00:02:00,080 --> 00:02:02,880 Speaker 6: The same time, realistically, what do you hear from I 38 00:02:02,880 --> 00:02:07,240 Speaker 6: guess the industry about the ability to continue or to 39 00:02:07,280 --> 00:02:10,359 Speaker 6: try to really make a change in where chips come from, 40 00:02:10,440 --> 00:02:14,000 Speaker 6: how they're manufactured, the trade flows on shoring friends shoring, 41 00:02:14,760 --> 00:02:15,839 Speaker 6: How realistic is that? 42 00:02:17,240 --> 00:02:20,120 Speaker 5: Well, we know there is some shifting or production manufacturing 43 00:02:20,120 --> 00:02:22,720 Speaker 5: going on of not just a chip chain, but other 44 00:02:22,760 --> 00:02:24,639 Speaker 5: production chains as well. We know, of course that the 45 00:02:24,639 --> 00:02:27,160 Speaker 5: big subsidies that the US have Roulette has attracted a 46 00:02:27,200 --> 00:02:30,000 Speaker 5: lot of investment in the semi conductor space, So things 47 00:02:30,040 --> 00:02:32,720 Speaker 5: are moving around, but there's still a lot of reliance, 48 00:02:32,760 --> 00:02:35,440 Speaker 5: as you say, on some key, key kind of nodes 49 00:02:35,480 --> 00:02:38,720 Speaker 5: in that and key companies like ASML and like in 50 00:02:38,760 --> 00:02:41,400 Speaker 5: Taiwan and the like. But the other sort of feeling 51 00:02:41,560 --> 00:02:45,760 Speaker 5: I think among the macroeconomic side of this is that 52 00:02:46,160 --> 00:02:48,480 Speaker 5: people are kind of on pause now with investment and 53 00:02:48,960 --> 00:02:52,239 Speaker 5: spending plans until see where the US election goes in 54 00:02:52,280 --> 00:02:53,799 Speaker 5: a few months. So, you know, the one hand, it 55 00:02:53,800 --> 00:02:58,200 Speaker 5: could either be broadly speaking, continuity with current administration, or 56 00:02:58,200 --> 00:02:59,839 Speaker 5: if it's a chaine of administration, it could be quite 57 00:02:59,840 --> 00:03:02,320 Speaker 5: a different approach, maybe even more hokish. That's what all 58 00:03:02,320 --> 00:03:05,000 Speaker 5: the signals are, That's what our own interviewed former President 59 00:03:05,000 --> 00:03:07,720 Speaker 5: Trump signals. So there's a lot open the air here, 60 00:03:07,720 --> 00:03:11,400 Speaker 5: and I think this kind of potentially big step of 61 00:03:11,480 --> 00:03:13,840 Speaker 5: the administration so late in the political cycle, I think 62 00:03:13,960 --> 00:03:16,919 Speaker 5: is giving people poses just ask questions about where is 63 00:03:17,040 --> 00:03:20,359 Speaker 5: US policies Ward Shawna going in the near to medium term. 64 00:03:21,000 --> 00:03:22,840 Speaker 3: I mean, of course, It's always hard to understand the 65 00:03:22,840 --> 00:03:25,960 Speaker 3: stock reaction with these kind of headlines because political hedging 66 00:03:26,200 --> 00:03:28,560 Speaker 3: has not really worked, and also you have some of 67 00:03:28,600 --> 00:03:30,760 Speaker 3: these stocks that have had a huge run up anyway, 68 00:03:30,840 --> 00:03:33,400 Speaker 3: so we have to sort of take that with a. 69 00:03:33,360 --> 00:03:34,120 Speaker 4: Grain of salt. 70 00:03:34,400 --> 00:03:38,040 Speaker 3: Do we understand though, what more trade restrictions will do 71 00:03:38,240 --> 00:03:41,520 Speaker 3: to the global economy? I know the President Trump's team 72 00:03:42,040 --> 00:03:43,840 Speaker 3: says that it's okay because we'll have lower taxes and 73 00:03:43,840 --> 00:03:45,720 Speaker 3: more consumption, and it's going to be the other countries and 74 00:03:45,720 --> 00:03:48,120 Speaker 3: companies that will pay for it, not the United States. 75 00:03:49,560 --> 00:03:51,920 Speaker 4: What do you think? What's your research tell you? 76 00:03:52,480 --> 00:03:54,200 Speaker 5: I think people are starting to focus on this now, 77 00:03:54,280 --> 00:03:55,880 Speaker 5: alex in the way that they were during the last 78 00:03:55,880 --> 00:03:58,640 Speaker 5: few weeks. The political cycle in the US has changed 79 00:03:58,680 --> 00:04:00,800 Speaker 5: a lot, and I think both in the US and 80 00:04:00,840 --> 00:04:03,040 Speaker 5: globally now people are saying, if there is a change 81 00:04:03,040 --> 00:04:05,760 Speaker 5: of administration, what would it mean for the trade and 82 00:04:05,880 --> 00:04:09,680 Speaker 5: flow of goods and capital and services. Obviously US China 83 00:04:09,800 --> 00:04:12,360 Speaker 5: is a center of it. It's red hot, but it's 84 00:04:12,400 --> 00:04:16,000 Speaker 5: not just US China. Former President Trump is talking about putting, 85 00:04:16,080 --> 00:04:19,960 Speaker 5: you know, raising tariffs and driving hard bargains with all 86 00:04:20,000 --> 00:04:22,839 Speaker 5: trading partners who have a deficit with the US, So 87 00:04:22,880 --> 00:04:27,720 Speaker 5: it's it's just cementing this idea of heading for deeper protectionism, 88 00:04:27,960 --> 00:04:31,400 Speaker 5: maybe deeper mercantilism, certainly less kind of cooperation on the 89 00:04:31,400 --> 00:04:33,920 Speaker 5: world stage. And then how does that flow through the 90 00:04:33,960 --> 00:04:36,920 Speaker 5: prices and people at home consumers. It probably means more 91 00:04:36,960 --> 00:04:39,839 Speaker 5: expensive productions are more more expensive goods to buy, and 92 00:04:39,839 --> 00:04:42,760 Speaker 5: that's the whole inflationary story. So I think there's a 93 00:04:42,760 --> 00:04:44,880 Speaker 5: lot of uncertainty about where this is all going, but 94 00:04:45,160 --> 00:04:47,200 Speaker 5: at the same time, people now are starting to focus 95 00:04:47,279 --> 00:04:49,080 Speaker 5: hard on it in case of there is a change 96 00:04:49,120 --> 00:04:51,120 Speaker 5: of administration in a few months in the US. 97 00:04:51,600 --> 00:04:54,560 Speaker 6: Certainly having an impact on the market, that is for sure. 98 00:04:55,279 --> 00:04:55,720 Speaker 7: End of current. 99 00:04:55,760 --> 00:04:57,280 Speaker 6: Thank you so much for joining us in the current. 100 00:04:57,320 --> 00:04:59,839 Speaker 6: Is a global economy reporter for Bloomberg News, joining us 101 00:04:59,880 --> 00:05:03,040 Speaker 6: from Washington, DC. And as you mentioned, Alex, really having 102 00:05:03,040 --> 00:05:04,840 Speaker 6: an impact on the market. The S and P off 103 00:05:04,839 --> 00:05:08,599 Speaker 6: one percent, but the NASDAK off two point three percent, 104 00:05:08,640 --> 00:05:10,480 Speaker 6: so that's where you're seeing it. I saw the van 105 00:05:10,800 --> 00:05:15,599 Speaker 6: k Etf Semiconductor ETF fun lost about four percent of 106 00:05:15,640 --> 00:05:18,120 Speaker 6: its value today, so kind of across the board. But 107 00:05:18,120 --> 00:05:19,960 Speaker 6: as you mentioned, Alex, we're coming off of those all 108 00:05:20,000 --> 00:05:22,919 Speaker 6: time highs. So this market was certainly looking for a 109 00:05:22,920 --> 00:05:25,200 Speaker 6: little bit of a reason to pull back, and I 110 00:05:25,200 --> 00:05:28,120 Speaker 6: think a little bit of political policy uncertainty that's kind 111 00:05:28,120 --> 00:05:30,160 Speaker 6: of crypt into the market that would be the thing. 112 00:05:30,200 --> 00:05:30,360 Speaker 5: Here. 113 00:05:31,880 --> 00:05:35,799 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 114 00:05:35,839 --> 00:05:39,360 Speaker 2: weekdays at ten am Eastern on applecar Play and Android 115 00:05:39,400 --> 00:05:42,200 Speaker 2: Auto with the Bloomberg Business App. You can also listen 116 00:05:42,320 --> 00:05:45,400 Speaker 2: live on Amazon Alexa from our flagship New York station 117 00:05:45,760 --> 00:05:48,800 Speaker 2: Just Say Alexa, playing Bloomberg eleven thirty. 118 00:05:50,160 --> 00:05:53,200 Speaker 3: So Alex Deeal alongside paulse we need. This is Bloomberg 119 00:05:53,200 --> 00:05:55,600 Speaker 3: Intelligence Radio. We bring you all the top news and business, 120 00:05:55,600 --> 00:05:58,760 Speaker 3: economics and finance and sometimes in politics with our lens 121 00:05:58,800 --> 00:06:01,440 Speaker 3: of our Bloomberg Intelligence folks. They cover two thousand companies 122 00:06:01,440 --> 00:06:04,719 Speaker 3: in one hundred and thirty industries worldwide. It was the 123 00:06:04,800 --> 00:06:08,480 Speaker 3: business Week piece that has now been heard around the world. 124 00:06:09,120 --> 00:06:13,119 Speaker 3: It was an incredible front page on what Trump would 125 00:06:13,120 --> 00:06:16,159 Speaker 3: do with taxes, teariff, the Fed, and more. It's a 126 00:06:16,200 --> 00:06:18,479 Speaker 3: real deep dive into trumpanomics in a way that I 127 00:06:18,560 --> 00:06:23,080 Speaker 3: have not seen yet. It's actionable, it feels realistic, and 128 00:06:23,120 --> 00:06:25,640 Speaker 3: it's really boiled down. So we can really get a 129 00:06:25,720 --> 00:06:28,800 Speaker 3: grasp on what a Trump two point zero and trumpanomics 130 00:06:28,839 --> 00:06:31,000 Speaker 3: actually means. And we can thank Bradstone, the editor of 131 00:06:31,000 --> 00:06:34,280 Speaker 3: BusinessWeek for Bloomberg to kind of put all this together 132 00:06:34,320 --> 00:06:37,560 Speaker 3: for us. He joins us now from San Francisco to California. 133 00:06:37,640 --> 00:06:40,559 Speaker 3: Brad I found this to be an extremely helpful piece 134 00:06:40,640 --> 00:06:43,440 Speaker 3: because if you listen or you read excerpts from interviews 135 00:06:43,440 --> 00:06:47,200 Speaker 3: with Trump, it's very difficult to get to concrete ideas. 136 00:06:47,240 --> 00:06:49,360 Speaker 3: And you guys did an amazing job of doing that. 137 00:06:49,880 --> 00:06:50,680 Speaker 4: How hard was it? 138 00:06:52,440 --> 00:06:55,640 Speaker 8: Yeah, thank you, alex Well. I mean, look, he wanted 139 00:06:55,640 --> 00:06:59,520 Speaker 8: to talk. We'd actually put queries out to both campaigns. 140 00:06:59,560 --> 00:07:03,400 Speaker 8: We heard first from from former President Trump. You know, 141 00:07:03,520 --> 00:07:06,760 Speaker 8: this is Business Week, so our mandate is business obviously, 142 00:07:06,880 --> 00:07:10,720 Speaker 8: economics the world order, and we went there to interrogate 143 00:07:10,800 --> 00:07:14,480 Speaker 8: him about an economic plan that many economists think is 144 00:07:14,560 --> 00:07:18,760 Speaker 8: a bit contradictory. I mean, President Trump talks about lowering inflation. 145 00:07:19,560 --> 00:07:26,800 Speaker 8: The agenda is, you know, higher tariffs, less immigration, you know, 146 00:07:26,840 --> 00:07:31,160 Speaker 8: which which potentially raises wages. He talks a lot about 147 00:07:31,200 --> 00:07:34,040 Speaker 8: lowering interest rates and then bringing members of the business 148 00:07:34,080 --> 00:07:36,880 Speaker 8: community into his administration. So this is a topic he 149 00:07:36,920 --> 00:07:39,320 Speaker 8: wanted to talk about. To put it in context, we 150 00:07:39,400 --> 00:07:42,400 Speaker 8: talked to him two days before the first presidential debate 151 00:07:42,440 --> 00:07:46,120 Speaker 8: and about two weeks before the assassination attempt. But even then, 152 00:07:46,200 --> 00:07:48,679 Speaker 8: I think, you know, he is writing what he believes, 153 00:07:48,680 --> 00:07:51,320 Speaker 8: at least and his campaign believes, is a heightened sense 154 00:07:51,360 --> 00:07:52,360 Speaker 8: of momentum. 155 00:07:53,320 --> 00:07:55,800 Speaker 6: So Brad, that's there's a lot of areas here in 156 00:07:55,800 --> 00:07:58,360 Speaker 6: the terms of economics to explore. Talk about taxes. How 157 00:07:58,360 --> 00:08:00,840 Speaker 6: does he feel about taxes these days? He certainly had 158 00:08:00,840 --> 00:08:04,720 Speaker 6: some big tax legislation in his first term, that's right. 159 00:08:04,600 --> 00:08:08,160 Speaker 8: And one part of his plan is to extend the 160 00:08:08,200 --> 00:08:11,720 Speaker 8: Trump tax cuts. Another part, which he told us, was 161 00:08:11,760 --> 00:08:14,320 Speaker 8: to lower the corporate tax rate. He told the Business 162 00:08:14,400 --> 00:08:16,360 Speaker 8: roundtable that he wanted to bring it down to twenty 163 00:08:16,360 --> 00:08:19,040 Speaker 8: percent from twenty one percent, if for no other reason 164 00:08:19,080 --> 00:08:22,880 Speaker 8: that he likes big, large numbers. But then he said 165 00:08:22,920 --> 00:08:24,960 Speaker 8: he would even get it down to fifteen percent if 166 00:08:24,960 --> 00:08:27,800 Speaker 8: he could. You know, the challenge here, of course, is 167 00:08:28,640 --> 00:08:32,720 Speaker 8: you know that there's no they don't delineate any way 168 00:08:32,760 --> 00:08:34,960 Speaker 8: to pay for this, to make the numbers partial out 169 00:08:34,960 --> 00:08:37,640 Speaker 8: and do anything other than raise the federal deficit. And 170 00:08:38,000 --> 00:08:40,400 Speaker 8: there's real there is really I think a paucity of 171 00:08:40,960 --> 00:08:44,280 Speaker 8: specifics here, which is one reason why proxies have kind 172 00:08:44,280 --> 00:08:47,240 Speaker 8: of tried to fill the void with things like Project 173 00:08:47,720 --> 00:08:51,360 Speaker 8: twenty twenty five, which then Trump really distanced himself from. 174 00:08:51,720 --> 00:08:54,120 Speaker 9: But you know, I think, I think, you know, with 175 00:08:54,120 --> 00:08:54,800 Speaker 9: the broad. 176 00:08:54,559 --> 00:08:57,800 Speaker 8: Brushstrokes we got is Trump wants to lower taxes and 177 00:08:57,880 --> 00:08:59,160 Speaker 8: extend his tax cuts. 178 00:09:00,080 --> 00:09:04,160 Speaker 3: I also felt was very interesting is the myriad of views. 179 00:09:03,960 --> 00:09:05,480 Speaker 4: In relation to the tech industry. 180 00:09:05,880 --> 00:09:08,360 Speaker 3: So in the one hand of Klawer Tax's ya tech industry, 181 00:09:08,600 --> 00:09:11,319 Speaker 3: he seems to embrace crypto clearly. 182 00:09:11,440 --> 00:09:11,880 Speaker 4: With JD. 183 00:09:12,000 --> 00:09:15,400 Speaker 3: Vans, there's sort of an embrace of vcs, but big 184 00:09:15,440 --> 00:09:18,880 Speaker 3: tech is very complicated, and how did you parse through that? 185 00:09:20,679 --> 00:09:23,679 Speaker 8: There's some contradictions here, Alex. I mean, the first is, 186 00:09:24,720 --> 00:09:28,320 Speaker 8: you know, he's he's he's obviously very pro American business, 187 00:09:28,640 --> 00:09:32,120 Speaker 8: and yet he's he's turned on TikTok and believes that 188 00:09:32,200 --> 00:09:36,520 Speaker 8: banning TikTok would only empower Mark Zuckerberg and Facebook. The 189 00:09:36,559 --> 00:09:38,720 Speaker 8: second thing is, you know, in the in the first term, 190 00:09:39,040 --> 00:09:42,199 Speaker 8: he talked a lot about cryptocurrency. 191 00:09:41,440 --> 00:09:43,120 Speaker 9: And how it might engender fraud. 192 00:09:43,960 --> 00:09:47,439 Speaker 8: He wasn't wrong about that, obviously, but now he's flipped 193 00:09:47,440 --> 00:09:50,240 Speaker 8: on that as well. The bottom line here and the 194 00:09:50,240 --> 00:09:53,080 Speaker 8: way I interpreted, is that for Trump it's all about 195 00:09:53,160 --> 00:09:54,599 Speaker 8: personal relationships. 196 00:09:54,840 --> 00:09:55,960 Speaker 9: And he went and talked. 197 00:09:55,720 --> 00:09:57,720 Speaker 8: A lot about Tim Cook and how smart he thought 198 00:09:57,760 --> 00:10:00,440 Speaker 8: Tim Cook was, in large part because Tim Cook went 199 00:10:00,480 --> 00:10:02,880 Speaker 8: to the White House to ask for relief from the 200 00:10:02,880 --> 00:10:05,280 Speaker 8: first set of tariffs. You know, he likes it when 201 00:10:05,320 --> 00:10:08,680 Speaker 8: people come and you know, pay their respects or at 202 00:10:08,760 --> 00:10:12,200 Speaker 8: least visibly look to be on what he considers to 203 00:10:12,200 --> 00:10:14,800 Speaker 8: be Team Trump. And so, you know, in terms of 204 00:10:14,840 --> 00:10:18,320 Speaker 8: Crypto and a lot of people in that community are 205 00:10:18,320 --> 00:10:21,080 Speaker 8: now pro Trump, and you know, in terms of TikTok 206 00:10:21,080 --> 00:10:23,840 Speaker 8: where he's very popular on TikTok, and of course jeff 207 00:10:23,920 --> 00:10:26,160 Speaker 8: yass one of the backers of Byte Dance as a 208 00:10:26,160 --> 00:10:29,520 Speaker 8: Trump supporter. You can kind of see why these contradictions 209 00:10:29,520 --> 00:10:32,360 Speaker 8: are sort of bundled into his views on technology. 210 00:10:33,520 --> 00:10:36,120 Speaker 6: Tariffs, certainly, it seems to be the topic, at least 211 00:10:36,120 --> 00:10:38,280 Speaker 6: in the trading today. We've had both sides of the 212 00:10:38,320 --> 00:10:41,720 Speaker 6: aisle talking about tariffs and tough tariff talk. 213 00:10:42,800 --> 00:10:44,440 Speaker 7: Mister Trump used tariffs. 214 00:10:44,120 --> 00:10:48,679 Speaker 6: Quite you know, liberally liberally in the first term words. 215 00:10:48,840 --> 00:10:50,600 Speaker 7: How's you think about tariffs these days? 216 00:10:50,880 --> 00:10:53,520 Speaker 8: It's interesting, Paul, you know, I have not spent much 217 00:10:53,520 --> 00:10:57,760 Speaker 8: time thinking about President William McKinley, the twenty fifth president. 218 00:10:58,520 --> 00:11:01,800 Speaker 8: He's from my he was from my former state of Ohio, 219 00:11:02,120 --> 00:11:05,120 Speaker 8: and Trump brought him up repeatedly because you know, here's 220 00:11:05,120 --> 00:11:08,640 Speaker 8: this nineteenth century president who, before the age of a 221 00:11:08,679 --> 00:11:13,080 Speaker 8: federal income tax, was raising the raising tariffs and bringing 222 00:11:13,080 --> 00:11:13,480 Speaker 8: in money. 223 00:11:13,520 --> 00:11:17,040 Speaker 9: And he said that McKinley is overlooked. Who knows what 224 00:11:17,120 --> 00:11:18,040 Speaker 9: book club. 225 00:11:18,120 --> 00:11:21,760 Speaker 8: He's part of, but clearly they've been reading histories and 226 00:11:21,880 --> 00:11:25,240 Speaker 8: he wants to raise tariffs. He thinks tariffs are underrated. 227 00:11:25,280 --> 00:11:28,280 Speaker 8: He's talking about a ten percent across the board tariff. 228 00:11:28,480 --> 00:11:31,920 Speaker 8: He's talking about raising the tariff on Chinese goods to 229 00:11:32,120 --> 00:11:33,920 Speaker 8: sixteen percent or even one hundred percent. 230 00:11:34,480 --> 00:11:37,439 Speaker 9: And you know, he says they're a great negotiating ployee. 231 00:11:38,080 --> 00:11:40,760 Speaker 8: You know, he tried that in the first term, and 232 00:11:40,840 --> 00:11:43,840 Speaker 8: obviously then you know, a lot of US companies, particularly 233 00:11:43,920 --> 00:11:47,040 Speaker 8: tech companies, complained, and they did. They were quite generous 234 00:11:47,040 --> 00:11:51,240 Speaker 8: in their carve outs. But this is a big part 235 00:11:51,320 --> 00:11:54,800 Speaker 8: of Trumpanomics. And most economists think that companies don't pay 236 00:11:54,800 --> 00:11:57,520 Speaker 8: those tariffs, they turn around and pass them to customers 237 00:11:57,520 --> 00:12:00,320 Speaker 8: in the form of higher prices. So there. We pressed 238 00:12:00,360 --> 00:12:02,199 Speaker 8: him on it, and I think there are some unresolved 239 00:12:02,200 --> 00:12:03,760 Speaker 8: contradictions and tensions there. 240 00:12:04,000 --> 00:12:06,760 Speaker 3: What's also interesting, I was reading a JP Morgan note 241 00:12:06,800 --> 00:12:10,640 Speaker 3: about commodities and what the Trump administration would do to commodities. 242 00:12:11,040 --> 00:12:14,080 Speaker 3: Obviously that's my beat, but what they made the point 243 00:12:14,160 --> 00:12:16,960 Speaker 3: is it really depends on the sequencing. So if you 244 00:12:17,000 --> 00:12:20,280 Speaker 3: go to corporate taxes first, tariffs come later. Like the 245 00:12:20,320 --> 00:12:23,480 Speaker 3: sequencing of how all of this works will really depend 246 00:12:23,520 --> 00:12:26,040 Speaker 3: then on what the market reaction is. Did you get 247 00:12:26,080 --> 00:12:27,000 Speaker 3: any sense of that. 248 00:12:28,760 --> 00:12:31,080 Speaker 9: In terms of how we would do it. I didn't, 249 00:12:31,240 --> 00:12:33,000 Speaker 9: But I mean, one thing. 250 00:12:32,880 --> 00:12:38,559 Speaker 8: That impressed us, or is impressed upon us, is that 251 00:12:39,679 --> 00:12:43,840 Speaker 8: in twenty sixteen, you know, he was unprepared to win, 252 00:12:44,240 --> 00:12:48,280 Speaker 8: and he surrounded himself with people, maybe a bit impulsively, 253 00:12:48,400 --> 00:12:50,400 Speaker 8: and he says that he would do it differently this time, 254 00:12:50,400 --> 00:12:53,920 Speaker 8: that he knows who's loyal and who's not, and he's experienced, 255 00:12:53,920 --> 00:12:56,680 Speaker 8: and he knows everybody this time, and it just seemed 256 00:12:56,679 --> 00:12:59,120 Speaker 8: to us that they were you know, that he is 257 00:12:59,200 --> 00:13:01,679 Speaker 8: prepared to move quickly in what order I don't know, 258 00:13:02,000 --> 00:13:06,560 Speaker 8: but particularly if he controls both houses in Congress, that 259 00:13:06,640 --> 00:13:09,520 Speaker 8: they have an agenda that they're pretty much willing to 260 00:13:09,600 --> 00:13:10,079 Speaker 8: implement that. 261 00:13:10,200 --> 00:13:16,400 Speaker 6: Blitz Creed Speed Jamie Diamond as Secretary of Treasury thirty 262 00:13:16,440 --> 00:13:17,360 Speaker 6: seconds spread. 263 00:13:17,600 --> 00:13:21,920 Speaker 8: Yeah yeah, what did he call him an overrated globalist once? 264 00:13:22,240 --> 00:13:24,360 Speaker 9: Look, he's courting the business community. 265 00:13:24,720 --> 00:13:27,200 Speaker 8: I you know, who knows if Diamond would do that, 266 00:13:27,240 --> 00:13:31,920 Speaker 8: particularly considering how former members of Trump's administration often ended 267 00:13:32,000 --> 00:13:35,880 Speaker 8: up being treated somewhat badly or breaking with him. But yeah, 268 00:13:35,960 --> 00:13:39,080 Speaker 8: I mean, I think Trump wants to go and it's 269 00:13:39,160 --> 00:13:41,560 Speaker 8: very important to him that business leaders like him. I 270 00:13:41,559 --> 00:13:43,920 Speaker 8: mean that comes through in the interview, and so he's 271 00:13:43,960 --> 00:13:45,360 Speaker 8: doing it, but to court them as well. 272 00:13:45,920 --> 00:13:48,480 Speaker 4: Brad, thank you so much. Really, it was a great piece. 273 00:13:48,559 --> 00:13:51,160 Speaker 3: It was so helpful and it helps to bring perspective 274 00:13:51,160 --> 00:13:53,880 Speaker 3: then to market reactions as well. Bradstone, he is editor 275 00:13:54,120 --> 00:13:56,480 Speaker 3: of Bloomberg Business Week. So usually I have a routine. 276 00:13:56,960 --> 00:13:58,480 Speaker 3: I have a routine on the way in, I'm like 277 00:13:58,480 --> 00:14:00,280 Speaker 3: when I'm reading and how fast I have to it 278 00:14:00,320 --> 00:14:00,840 Speaker 3: to get rid in? 279 00:14:00,960 --> 00:14:03,880 Speaker 4: And this article just messed up everything it does. 280 00:14:03,920 --> 00:14:06,800 Speaker 6: And the New Business Week gets a monthly now keeping 281 00:14:06,800 --> 00:14:09,240 Speaker 6: the Business Week name because it's got some brand value 282 00:14:09,240 --> 00:14:09,760 Speaker 6: and it's cool. 283 00:14:11,080 --> 00:14:13,160 Speaker 1: It is like thick, yeah yeah. 284 00:14:13,160 --> 00:14:16,320 Speaker 6: Yeah, And The first cover was Arnault talking about luxury. 285 00:14:16,800 --> 00:14:19,560 Speaker 6: The second issue Trump. So they're killing it here, so 286 00:14:19,960 --> 00:14:20,960 Speaker 6: twelve times a year. 287 00:14:21,080 --> 00:14:23,080 Speaker 4: Yeah, So definitely check it out. Guys, It's definitely worth it. 288 00:14:23,080 --> 00:14:24,880 Speaker 4: If you're interested in anything Trump related. 289 00:14:26,240 --> 00:14:30,120 Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live 290 00:14:30,200 --> 00:14:33,000 Speaker 2: weekdays at ten am Eastern on fo CarPlay and then 291 00:14:33,040 --> 00:14:35,960 Speaker 2: Broid Auto with the Bloomberg Business App. Listen on demand 292 00:14:35,960 --> 00:14:40,320 Speaker 2: wherever you get your podcasts, or watch us live on YouTube. 293 00:14:41,720 --> 00:14:43,800 Speaker 3: Joining us now for the market take is Sarah Ponzik, 294 00:14:43,880 --> 00:14:47,200 Speaker 3: a financial advisor at UBS Private Wealth Management, and she's 295 00:14:47,240 --> 00:14:50,240 Speaker 3: joining us from Local Rich in Florida. Sarah, it's so 296 00:14:50,520 --> 00:14:53,280 Speaker 3: fun to chat with you. So I understand we're seeing 297 00:14:53,280 --> 00:14:55,120 Speaker 3: a decline the NASDAK. I understand the S and P 298 00:14:55,240 --> 00:14:57,120 Speaker 3: is selling off. I also see that small caps are 299 00:14:57,160 --> 00:15:00,840 Speaker 3: still holding their own here. Is this real about Trump? 300 00:15:00,920 --> 00:15:03,480 Speaker 3: Is this really about trade restrictions? Or is this the 301 00:15:03,560 --> 00:15:04,640 Speaker 3: continued rotation? 302 00:15:05,840 --> 00:15:08,040 Speaker 10: Well, Alex, really quickly, I can tell you it's todder 303 00:15:08,280 --> 00:15:09,800 Speaker 10: here than it is in New York right now, So 304 00:15:10,120 --> 00:15:14,840 Speaker 10: whenever you sticking where you're at. But as for the rotation, look, yes, 305 00:15:14,960 --> 00:15:17,440 Speaker 10: we've seen some political headlines come out. Yes, we are 306 00:15:17,480 --> 00:15:19,720 Speaker 10: seeing semiconductors still off and we're seeing. 307 00:15:19,480 --> 00:15:20,520 Speaker 1: Another tech fell off. 308 00:15:20,800 --> 00:15:24,080 Speaker 10: But to your question, no, I don't think it's solely 309 00:15:24,640 --> 00:15:27,640 Speaker 10: about headlines that you know, came out over the last 310 00:15:27,640 --> 00:15:28,720 Speaker 10: twenty four hours. 311 00:15:28,800 --> 00:15:30,120 Speaker 1: Rather, what we're seeing. 312 00:15:30,200 --> 00:15:34,560 Speaker 10: Is a continuation of this rotation that really caught steam. 313 00:15:34,680 --> 00:15:37,960 Speaker 10: And really we saw fuel added to the fire last 314 00:15:38,040 --> 00:15:41,480 Speaker 10: week after CPI surprised to the downside for the third 315 00:15:41,520 --> 00:15:44,320 Speaker 10: string month. So we're seeing, you know, this changing of 316 00:15:44,360 --> 00:15:46,600 Speaker 10: the guards within the markets. 317 00:15:46,640 --> 00:15:47,960 Speaker 1: There's been talk. 318 00:15:47,840 --> 00:15:50,440 Speaker 10: For a while how long can the magnificent seven or 319 00:15:50,520 --> 00:15:54,400 Speaker 10: large cap tech or semiconductors continue to fuel the way higher? 320 00:15:54,720 --> 00:15:57,560 Speaker 10: And it seems like last week we did see not 321 00:15:57,680 --> 00:15:59,160 Speaker 10: only a bend but a break with. 322 00:15:59,160 --> 00:16:00,800 Speaker 1: A really swi lift rotation. 323 00:16:00,880 --> 00:16:02,320 Speaker 10: I mean, you just look at small caps over the 324 00:16:02,400 --> 00:16:06,920 Speaker 10: last five days of twelve percent. Meanwhile the Nazac's flack 325 00:16:07,120 --> 00:16:10,000 Speaker 10: that just shows you the rotation, you know, right there 326 00:16:10,040 --> 00:16:12,600 Speaker 10: and then so now the question becomes, all right, well 327 00:16:12,760 --> 00:16:13,960 Speaker 10: is this going to continue? 328 00:16:14,480 --> 00:16:16,560 Speaker 6: So what is the thought here, Shrek, because I think 329 00:16:16,600 --> 00:16:18,720 Speaker 6: you know, one of the concerns I'm sure you hear 330 00:16:18,760 --> 00:16:21,920 Speaker 6: from your clients is that how healthy can it be 331 00:16:21,960 --> 00:16:25,360 Speaker 6: for this stock? Market to be anchored by six seven 332 00:16:25,520 --> 00:16:27,880 Speaker 6: eight names in terms of the performance a year to date, 333 00:16:27,920 --> 00:16:30,440 Speaker 6: that doesn't sound like a healthy market. 334 00:16:30,520 --> 00:16:31,800 Speaker 7: How much of a risk is that for you? 335 00:16:33,000 --> 00:16:34,800 Speaker 1: Right, We do hear that question all the time. 336 00:16:34,840 --> 00:16:37,640 Speaker 10: And to give you an idea of just you know, 337 00:16:37,800 --> 00:16:41,000 Speaker 10: how consolidated the rally has been. If you look at 338 00:16:41,000 --> 00:16:44,080 Speaker 10: the amount of companies that have outperformed the S and 339 00:16:44,120 --> 00:16:46,680 Speaker 10: P five hundred year to date on an individual basis, 340 00:16:46,920 --> 00:16:49,320 Speaker 10: it's only twenty four percent, So not even a quarter 341 00:16:49,440 --> 00:16:52,920 Speaker 10: of companies within the index are outperforming the index, which 342 00:16:53,120 --> 00:16:56,520 Speaker 10: just shows you how important a few companies have been 343 00:16:57,000 --> 00:17:00,520 Speaker 10: so really dragging the games higher. Now, is it a Yes, 344 00:17:00,560 --> 00:17:03,520 Speaker 10: there's always concern over narrowness in the markets. 345 00:17:03,560 --> 00:17:05,600 Speaker 1: But at the same time, when we think about why 346 00:17:05,640 --> 00:17:06,879 Speaker 1: there has been this narrowness in. 347 00:17:06,880 --> 00:17:10,440 Speaker 10: The markets, it's because these you know, large cap tech 348 00:17:10,480 --> 00:17:14,760 Speaker 10: companies have been or become the epitome of quality. You know, 349 00:17:14,800 --> 00:17:19,040 Speaker 10: investors have been flocking to quality names with high earnings 350 00:17:19,080 --> 00:17:22,080 Speaker 10: growth over the past year and a half, let's say, 351 00:17:22,440 --> 00:17:24,640 Speaker 10: and that's what's driven this. 352 00:17:24,760 --> 00:17:25,800 Speaker 1: Narrowness in the market. 353 00:17:25,880 --> 00:17:28,200 Speaker 11: So it hasn't been too large of a concern for 354 00:17:28,680 --> 00:17:32,040 Speaker 11: us in particular, and we actually are still most preferred 355 00:17:32,040 --> 00:17:35,200 Speaker 11: on technology, and we still think technology companies have a 356 00:17:35,320 --> 00:17:37,040 Speaker 11: very important place in a portfolio. 357 00:17:37,240 --> 00:17:38,879 Speaker 1: But yes, seeing a broadening. 358 00:17:38,560 --> 00:17:42,000 Speaker 10: Out, seeing small taps perform, seeing some cypical areas of 359 00:17:42,040 --> 00:17:45,920 Speaker 10: the market, like industrials start to catch up and perform 360 00:17:45,960 --> 00:17:49,440 Speaker 10: better as well, that's definitely a well taken sign. 361 00:17:49,640 --> 00:17:51,800 Speaker 1: We are glad to see the broadening. 362 00:17:51,480 --> 00:17:54,359 Speaker 10: Of the markets, and it's very possible that what you 363 00:17:54,400 --> 00:17:57,480 Speaker 10: could see then is this you know, internal rotation of 364 00:17:57,560 --> 00:17:58,080 Speaker 10: the markets. 365 00:17:58,119 --> 00:18:00,199 Speaker 1: We're sure we might see tech pull back of it. 366 00:18:00,280 --> 00:18:03,239 Speaker 10: That's only natural and healthy given the fact that look 367 00:18:03,280 --> 00:18:06,359 Speaker 10: look at semiconductors for example, this year, semi conductors are 368 00:18:06,440 --> 00:18:08,760 Speaker 10: up about thirty and twenty twenty four alone and up 369 00:18:08,920 --> 00:18:11,000 Speaker 10: for fifty percent over the last year. 370 00:18:11,520 --> 00:18:13,360 Speaker 1: So it would be healthy for us to. 371 00:18:13,320 --> 00:18:16,600 Speaker 10: See a rotation in the markets, see the old guards 372 00:18:16,600 --> 00:18:18,919 Speaker 10: start to you know, hold back a little bit. But 373 00:18:19,000 --> 00:18:21,280 Speaker 10: as possible, we could see the market continue, you know, 374 00:18:21,400 --> 00:18:21,960 Speaker 10: if you look. 375 00:18:21,800 --> 00:18:24,560 Speaker 1: At the index level, continue to at least move sideways 376 00:18:24,640 --> 00:18:25,679 Speaker 1: or move higher from here. 377 00:18:25,880 --> 00:18:27,720 Speaker 10: If we see other areas of the market that have 378 00:18:27,840 --> 00:18:30,119 Speaker 10: underperformed start to outperform. 379 00:18:29,600 --> 00:18:31,879 Speaker 4: Going forwards, Yeah, that was kind of my question. 380 00:18:31,960 --> 00:18:34,160 Speaker 3: It's like is it a cell tech by small caps, 381 00:18:34,160 --> 00:18:35,639 Speaker 3: which is sort of the narrative that we were starting 382 00:18:35,680 --> 00:18:39,400 Speaker 3: to see yesterday. And if we get some impulse where 383 00:18:39,440 --> 00:18:42,359 Speaker 3: small caps can't sustain this move that we've seen in 384 00:18:42,400 --> 00:18:45,560 Speaker 3: the last five trading days, m tech still sells off, 385 00:18:45,640 --> 00:18:47,480 Speaker 3: and it feels like we're in for a different, u 386 00:18:47,920 --> 00:18:50,800 Speaker 3: different kind of sell off right right. 387 00:18:50,880 --> 00:18:52,960 Speaker 10: And when we think about this rotation that we're seeing, 388 00:18:53,000 --> 00:18:56,600 Speaker 10: there's really four factors that we feel as though need 389 00:18:56,800 --> 00:18:59,760 Speaker 10: to happen in order for this rotation to continue in 390 00:18:59,800 --> 00:19:02,440 Speaker 10: a healthy way for the market to continue to prove hire. 391 00:19:02,760 --> 00:19:05,160 Speaker 10: And what those four factors are are, you know, One, 392 00:19:05,200 --> 00:19:09,400 Speaker 10: inflation needs to be contained, which for the CPI data 393 00:19:09,440 --> 00:19:12,760 Speaker 10: we got last week, looks like as possible to The 394 00:19:12,760 --> 00:19:15,840 Speaker 10: Federal Reserve needs to start cutting rates. You know, we've 395 00:19:15,880 --> 00:19:17,880 Speaker 10: been talking about it for a long time now, but 396 00:19:17,920 --> 00:19:19,720 Speaker 10: we are as close as we have ever been, and 397 00:19:19,760 --> 00:19:22,600 Speaker 10: we're finally seeing the whites of the eyes potentially of 398 00:19:22,720 --> 00:19:24,840 Speaker 10: interest rate cuts and the market's fully pricing and a 399 00:19:24,880 --> 00:19:25,679 Speaker 10: cut starting. 400 00:19:25,400 --> 00:19:28,600 Speaker 1: In September and to this year and continuing into next year. 401 00:19:29,119 --> 00:19:32,840 Speaker 10: The last two factors are probably more so where the 402 00:19:32,960 --> 00:19:35,760 Speaker 10: risk is. So the third factor is that you know, 403 00:19:35,920 --> 00:19:38,320 Speaker 10: economic growth needs to remain resilient here. 404 00:19:38,440 --> 00:19:40,640 Speaker 1: Sure, we had great retail sales data this. 405 00:19:40,560 --> 00:19:44,040 Speaker 10: Week, but if we see any signs that the economy 406 00:19:44,320 --> 00:19:47,399 Speaker 10: is veering off, we could easily see investors, you know, 407 00:19:47,520 --> 00:19:50,240 Speaker 10: start to flock back again to those high quality growth companies. 408 00:19:50,560 --> 00:19:52,200 Speaker 1: So there is a little bit of a risk there. 409 00:19:52,480 --> 00:19:53,680 Speaker 1: And then the last one that I. 410 00:19:53,600 --> 00:19:56,800 Speaker 10: Would say is that we need to see earnings growth 411 00:19:56,840 --> 00:20:00,880 Speaker 10: converge between you know, these seven companies and then the 412 00:20:00,920 --> 00:20:01,560 Speaker 10: S and P five. 413 00:20:01,440 --> 00:20:03,040 Speaker 1: Hundred, actually seven companies. 414 00:20:03,520 --> 00:20:05,840 Speaker 10: It might sound surprising because we have seen you know, 415 00:20:06,240 --> 00:20:09,440 Speaker 10: fantastic stock you know runs over the last year and 416 00:20:09,480 --> 00:20:09,960 Speaker 10: a half. 417 00:20:09,800 --> 00:20:12,960 Speaker 1: Two years, but we're actually about to see in the second. 418 00:20:12,800 --> 00:20:16,119 Speaker 10: Quarter if you look at SMP earnings and you remove 419 00:20:16,200 --> 00:20:18,840 Speaker 10: you strip out those magnificent seven, the large seven companies, 420 00:20:19,280 --> 00:20:21,320 Speaker 10: this is actually going to be the first time since 421 00:20:21,359 --> 00:20:24,800 Speaker 10: twenty twenty two that we're going to see earnings. 422 00:20:24,359 --> 00:20:27,040 Speaker 1: For shared growth for the rest of the S and 423 00:20:27,040 --> 00:20:27,840 Speaker 1: P five hundred. 424 00:20:28,160 --> 00:20:30,160 Speaker 10: So we need to see that continue, and we need 425 00:20:30,200 --> 00:20:32,639 Speaker 10: to see those earnings catch up, you know, with the 426 00:20:32,640 --> 00:20:35,920 Speaker 10: earnings growth, continual double digit earnings growth that we've seen 427 00:20:36,400 --> 00:20:37,760 Speaker 10: from those seven companies. 428 00:20:37,440 --> 00:20:43,399 Speaker 6: Alone, So you know, it feels like for this market, 429 00:20:43,720 --> 00:20:45,879 Speaker 6: earnings are going to matter at this season. You know, 430 00:20:45,920 --> 00:20:47,680 Speaker 6: it's not just the FED and the Fed's going to 431 00:20:47,720 --> 00:20:49,520 Speaker 6: lift this market. Earnings have to come through. How are 432 00:20:49,520 --> 00:20:51,840 Speaker 6: you guys thinking about this earning season that we're just 433 00:20:51,920 --> 00:20:55,160 Speaker 6: kind of in your early stages, zo right, Earnings? 434 00:20:55,160 --> 00:20:58,080 Speaker 10: Earnings absolutely do have to come through. Well, I mean 435 00:20:58,119 --> 00:20:59,760 Speaker 10: there's a couple of things that we'll be paying attention to. 436 00:21:00,320 --> 00:21:02,480 Speaker 10: You look at the first quarter earning season, the amount 437 00:21:02,480 --> 00:21:05,840 Speaker 10: of companies that mentioned artificial intelligence NAI and their earnings 438 00:21:05,840 --> 00:21:08,760 Speaker 10: calls was just through the room. So are we going 439 00:21:08,800 --> 00:21:11,639 Speaker 10: to continue to see them talking up AI? That'll certainly 440 00:21:11,640 --> 00:21:14,440 Speaker 10: be an interesting trend at least to watch from the 441 00:21:14,520 --> 00:21:17,879 Speaker 10: numbers perspective. For us, it's really seeing, okay, are we 442 00:21:18,040 --> 00:21:21,760 Speaker 10: going to see EPs growth for cyclical sectors and say, 443 00:21:21,800 --> 00:21:25,080 Speaker 10: for consumer discretionaries start to move higher? If you look 444 00:21:25,119 --> 00:21:27,879 Speaker 10: at where expectations currently are for the fourth quarter of 445 00:21:27,960 --> 00:21:30,320 Speaker 10: this year, so not you know, not where we currently are, 446 00:21:30,359 --> 00:21:33,160 Speaker 10: but future looking out a little bit further into the year. 447 00:21:33,440 --> 00:21:35,320 Speaker 1: The expectation is that we're going to. 448 00:21:35,240 --> 00:21:38,560 Speaker 10: See you know, year over year earnings growth for those 449 00:21:38,560 --> 00:21:40,720 Speaker 10: four hundred and ninety three companies so again strip out 450 00:21:40,720 --> 00:21:42,959 Speaker 10: those large seven of about eleven percent. 451 00:21:43,400 --> 00:21:45,480 Speaker 1: So double digit earnings growth. 452 00:21:45,320 --> 00:21:48,280 Speaker 10: Is the expectation for you know, the majority of S 453 00:21:48,320 --> 00:21:51,440 Speaker 10: and P five hundred companies, not including those you know, tech. 454 00:21:51,359 --> 00:21:53,359 Speaker 1: And you know the large companies that have continued to 455 00:21:53,359 --> 00:21:53,680 Speaker 1: do what. 456 00:21:54,240 --> 00:21:56,719 Speaker 10: They've continued to do best and make money and you know, 457 00:21:56,840 --> 00:22:00,280 Speaker 10: produce earnings. So yes, starting this quarter, we need to 458 00:22:00,320 --> 00:22:02,760 Speaker 10: see that that's actually going to be a reality and 459 00:22:02,800 --> 00:22:04,600 Speaker 10: that we are going to see earning's growth come to 460 00:22:04,640 --> 00:22:06,000 Speaker 10: fruition because like I said. 461 00:22:05,840 --> 00:22:08,439 Speaker 1: You know, we really haven't seen that since twenty twenty two. 462 00:22:08,880 --> 00:22:10,359 Speaker 4: Do you guys like the Smalls right now? 463 00:22:11,800 --> 00:22:13,160 Speaker 1: We do? We do. We see. 464 00:22:13,280 --> 00:22:15,920 Speaker 10: Look, if if you're someone who believes that interest rates 465 00:22:15,960 --> 00:22:17,840 Speaker 10: are going to come down, which we are, you know, 466 00:22:17,960 --> 00:22:20,760 Speaker 10: our economist prediction is that we'll see a FED break 467 00:22:20,800 --> 00:22:23,320 Speaker 10: cut in September, another one later in the year will 468 00:22:23,359 --> 00:22:26,280 Speaker 10: continue through the year. We're also you know, our our 469 00:22:26,320 --> 00:22:28,639 Speaker 10: chief Investment office expects that ten year treasure fields will 470 00:22:28,640 --> 00:22:31,560 Speaker 10: probably end the year some around three eighty five. One 471 00:22:31,560 --> 00:22:34,119 Speaker 10: of you know, the most pure ways to play a 472 00:22:34,200 --> 00:22:38,120 Speaker 10: decline in interest rates is small caps, because those companies 473 00:22:38,119 --> 00:22:40,960 Speaker 10: that have higher debt burdens are you know, at the 474 00:22:41,000 --> 00:22:45,080 Speaker 10: forefront of the deck game given that they just have 475 00:22:45,160 --> 00:22:47,680 Speaker 10: more debt on their balance sheets. So yes, we do 476 00:22:47,720 --> 00:22:50,240 Speaker 10: feel as though right now, you know, if you don't 477 00:22:50,240 --> 00:22:52,640 Speaker 10: have any small cap exposure in your portfolio, it could 478 00:22:52,680 --> 00:22:56,199 Speaker 10: be time to add some as the tactical play. But 479 00:22:56,440 --> 00:22:58,480 Speaker 10: you know, small caps in general have more risks than 480 00:22:58,600 --> 00:23:00,840 Speaker 10: large caps, so making sure you and take on that risk. 481 00:23:00,880 --> 00:23:03,640 Speaker 10: But yes, we do, you know, see potential for small 482 00:23:03,640 --> 00:23:05,600 Speaker 10: caps to outperform, you know, from here on out. 483 00:23:06,000 --> 00:23:08,040 Speaker 6: All right, Sarah, thank you so much for joining us. 484 00:23:08,040 --> 00:23:10,880 Speaker 6: Always great to catch up with you. Sarah Ponsek, Financial Advisor, 485 00:23:11,000 --> 00:23:13,920 Speaker 6: UBS Private Wealth Management. Full disclosure I am a client 486 00:23:13,960 --> 00:23:16,280 Speaker 6: of UBS Private Wealth Management. 487 00:23:16,320 --> 00:23:19,560 Speaker 4: Tonio c full disclosure. I'm a fan of Sarah Ponzicks. 488 00:23:19,760 --> 00:23:22,760 Speaker 7: I know she's great. Yeah, Bloomberg News, Bloomberg Radio TV 489 00:23:22,880 --> 00:23:24,880 Speaker 7: back in the day, and now she's at UBS, so. 490 00:23:24,840 --> 00:23:26,080 Speaker 4: You both have our biases there. 491 00:23:26,200 --> 00:23:29,600 Speaker 7: Yes, fair going down to down at Booler, Florida. So 492 00:23:29,680 --> 00:23:30,000 Speaker 7: very good. 493 00:23:31,440 --> 00:23:35,359 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 494 00:23:35,440 --> 00:23:38,920 Speaker 2: weekdays at ten am Eastern on applecar Play and Android 495 00:23:38,960 --> 00:23:42,120 Speaker 2: Auto with the Bloomberg Business. You can also listen live 496 00:23:42,240 --> 00:23:45,399 Speaker 2: on Amazon Alexa from our flagship New York station, Just 497 00:23:45,480 --> 00:23:50,280 Speaker 2: say Alexa playing Bloomberg eleven thirty. 498 00:23:49,880 --> 00:23:51,920 Speaker 7: Alex Steele, Paul Swinger. We're live here in our Bloomberg 499 00:23:51,920 --> 00:23:52,959 Speaker 7: Interactive Broker Studio. 500 00:23:53,040 --> 00:23:55,800 Speaker 6: We're also streaming live on YouTube hit or YouTube dot 501 00:23:55,800 --> 00:23:57,720 Speaker 6: com and search Bloomberg Podcast. 502 00:23:58,000 --> 00:23:59,960 Speaker 7: All right, twenty twenty four. It's an election. 503 00:24:00,440 --> 00:24:03,280 Speaker 6: We all know that, and that means an election is 504 00:24:03,320 --> 00:24:05,720 Speaker 6: certain to be pivotal catalysts for markets and companies in 505 00:24:05,800 --> 00:24:10,800 Speaker 6: terms of legislation, regulations, enforcement, and other government actions. 506 00:24:10,880 --> 00:24:11,919 Speaker 7: Let's put some numbers on that. 507 00:24:12,280 --> 00:24:15,920 Speaker 6: Twenty five billion of health insured revenue that's at risk 508 00:24:16,080 --> 00:24:20,560 Speaker 6: as subsidies expire, five to nineteen percent potential increase in 509 00:24:20,680 --> 00:24:25,160 Speaker 6: required capital for large banks. Twenty eight percent corporate tax 510 00:24:25,240 --> 00:24:27,480 Speaker 6: rate possible if Democrats sweep. So there are just a 511 00:24:27,520 --> 00:24:31,119 Speaker 6: million variables out there that will be impacted by this election. 512 00:24:31,280 --> 00:24:33,680 Speaker 7: So what do you do. You go to Bloomberg Intelligence. 513 00:24:33,760 --> 00:24:38,000 Speaker 6: They've got a definitive research report on this election, the 514 00:24:38,040 --> 00:24:40,120 Speaker 6: two candidates, the two policies, and what it can mean 515 00:24:40,200 --> 00:24:44,080 Speaker 6: for banks and all types of companies around this country. 516 00:24:44,160 --> 00:24:46,720 Speaker 6: Nathan Dean joints us here he's the mastermind of this report. 517 00:24:46,760 --> 00:24:50,719 Speaker 6: Forty two pages. It is Bloomberg Intelligence senior policy analysts. Nathan, 518 00:24:51,200 --> 00:24:52,960 Speaker 6: I don't know where to start here because you've got 519 00:24:53,040 --> 00:24:56,520 Speaker 6: the Republican Party and the Democratic Party clearly have different 520 00:24:56,520 --> 00:25:01,240 Speaker 6: priorities as it relates to economic policy, regulatory policy. 521 00:25:01,800 --> 00:25:02,679 Speaker 7: Where did you start? 522 00:25:03,680 --> 00:25:03,800 Speaker 5: So? 523 00:25:04,080 --> 00:25:05,720 Speaker 12: I think what we did is we started with the 524 00:25:05,760 --> 00:25:08,240 Speaker 12: report by looking at what are the key sectors to watch, 525 00:25:08,280 --> 00:25:10,560 Speaker 12: and we really had five of them. The first one 526 00:25:10,640 --> 00:25:13,800 Speaker 12: was investment banks, as you mentioned earlier, if President Biden wins, 527 00:25:14,200 --> 00:25:16,360 Speaker 12: you know, you could see somewhere between seven to ten 528 00:25:16,440 --> 00:25:20,720 Speaker 12: eight percent increase in capital requirements. If President Trump wins, 529 00:25:20,800 --> 00:25:23,360 Speaker 12: that could be off the table. We looked at electric vehicles. 530 00:25:23,440 --> 00:25:26,160 Speaker 12: You know, the tax credits for the electric vehicles could 531 00:25:26,160 --> 00:25:28,560 Speaker 12: be at risk during a tax reform debate next year. 532 00:25:29,000 --> 00:25:32,520 Speaker 12: Like you mentioned, in terms of tax global manufacturers, President 533 00:25:32,560 --> 00:25:35,040 Speaker 12: Trump has called for a fifteen percent corporate tax rate. 534 00:25:35,280 --> 00:25:37,960 Speaker 12: In just a few minutes ago, Representative Steve Scalise said 535 00:25:38,080 --> 00:25:40,639 Speaker 12: he's going to make the tax cuts for individuals permanent. 536 00:25:40,680 --> 00:25:43,399 Speaker 12: So tax reform and the impact of manufacturing, and the 537 00:25:43,440 --> 00:25:46,800 Speaker 12: other two were healthcareacter that twenty five billion dollar subsidies 538 00:25:46,880 --> 00:25:49,679 Speaker 12: that's really for seventeen and United Health. And then finally 539 00:25:49,720 --> 00:25:52,240 Speaker 12: it was big tech, because whether you get President Biden 540 00:25:52,320 --> 00:25:54,680 Speaker 12: or President Trump, more likely than not you're going to 541 00:25:54,720 --> 00:25:58,680 Speaker 12: get a very skeptical Washington towards big tech, certainly both 542 00:25:58,680 --> 00:26:00,679 Speaker 12: in Congress and also in the four side. 543 00:26:00,800 --> 00:26:00,960 Speaker 4: Nay. 544 00:26:01,000 --> 00:26:02,719 Speaker 3: Then the question then becomes what can he and this 545 00:26:02,800 --> 00:26:05,320 Speaker 3: has been the question throughout his four years. Also what 546 00:26:05,400 --> 00:26:07,080 Speaker 3: can he do on his own and what would he 547 00:26:07,119 --> 00:26:08,359 Speaker 3: need a Republican Congress for? 548 00:26:09,520 --> 00:26:11,720 Speaker 12: Yeah, So, you know, I think one of the biggest 549 00:26:11,760 --> 00:26:14,359 Speaker 12: questions we get from clients is what does the executive 550 00:26:14,520 --> 00:26:18,480 Speaker 12: order landscape look like if President Trump wins? And I'd 551 00:26:18,520 --> 00:26:20,920 Speaker 12: say about ninety percent of the time, an executive order 552 00:26:21,040 --> 00:26:22,800 Speaker 12: is a fancy way of the president picking up the 553 00:26:22,800 --> 00:26:25,439 Speaker 12: phone and saying to his staff, I expect you to 554 00:26:25,480 --> 00:26:28,040 Speaker 12: do X, Y and Z. But there's a difference there. 555 00:26:28,080 --> 00:26:31,840 Speaker 12: The difference is for trade, tariffs and foreign relations. The 556 00:26:31,880 --> 00:26:34,120 Speaker 12: power of the presidency is a lot more powerful when 557 00:26:34,119 --> 00:26:36,960 Speaker 12: it comes to that. So when President Trump uses words 558 00:26:36,960 --> 00:26:39,840 Speaker 12: like nasty calling the European Union, as he did in 559 00:26:39,880 --> 00:26:43,399 Speaker 12: this Business Week interview that I recommend everybody read, you know, 560 00:26:43,480 --> 00:26:45,960 Speaker 12: that's something that investors have to pay attention to. Now 561 00:26:45,960 --> 00:26:48,000 Speaker 12: when it comes to tariffs, the President can certainly go 562 00:26:48,040 --> 00:26:50,560 Speaker 12: out there and say I want to do this, but 563 00:26:50,600 --> 00:26:52,760 Speaker 12: then it's going to be up for Congress and the 564 00:26:52,800 --> 00:26:56,280 Speaker 12: business community and so forth. But todentially try and influence 565 00:26:56,320 --> 00:26:58,720 Speaker 12: the White House to either get to the appropriate amount 566 00:26:58,800 --> 00:27:01,120 Speaker 12: or try in some cases stop it from even happening. 567 00:27:02,160 --> 00:27:06,200 Speaker 6: So are there certain industries that you know, I think 568 00:27:06,200 --> 00:27:09,640 Speaker 6: about the healthcare industry. I'm trying to think about regulated industries, 569 00:27:09,880 --> 00:27:12,639 Speaker 6: and healthcare is certainly one of them. And you mentioned 570 00:27:12,640 --> 00:27:16,720 Speaker 6: the subsidies. But are the Republicans and the Democrats think 571 00:27:16,720 --> 00:27:18,440 Speaker 6: differently about the economics of healthcare? 572 00:27:19,359 --> 00:27:22,480 Speaker 12: Yeah, it does. And this is really where the process 573 00:27:22,520 --> 00:27:25,320 Speaker 12: comes into play, because that's subsidies. That twenty five billion 574 00:27:25,320 --> 00:27:29,160 Speaker 12: dollars subsidies is Obamacare subsidies, and that requires an Act 575 00:27:29,200 --> 00:27:31,399 Speaker 12: of Congress. And I think you don't need to be 576 00:27:31,400 --> 00:27:34,040 Speaker 12: a Washington expert to know that gridlock is going to 577 00:27:34,080 --> 00:27:37,160 Speaker 12: continue no matter who wins the presidency. So look for 578 00:27:37,280 --> 00:27:41,840 Speaker 12: subdued actions from Congress when it comes to healthcare. Now, 579 00:27:41,960 --> 00:27:45,400 Speaker 12: the difference is on the regulatory side. On the regulatory side, 580 00:27:45,440 --> 00:27:47,159 Speaker 12: and this is where you look at the FDA and 581 00:27:47,200 --> 00:27:49,400 Speaker 12: a lot of the actions they've been doing. You can 582 00:27:49,440 --> 00:27:53,760 Speaker 12: bypass democratic opposition and just implement your own policies, but 583 00:27:53,840 --> 00:27:56,919 Speaker 12: it takes time, and so I would say just general 584 00:27:57,000 --> 00:27:59,639 Speaker 12: rule of thumb for a lot of the healthcare issues 585 00:27:59,680 --> 00:28:03,119 Speaker 12: that are going out at the agencies after President Trump, 586 00:28:03,160 --> 00:28:06,879 Speaker 12: if he wins, where the input input is new regulatory leadership, 587 00:28:07,320 --> 00:28:09,840 Speaker 12: at that point, you probably have another eighteen months and 588 00:28:09,920 --> 00:28:13,399 Speaker 12: twenty four month window for any regulatory change. So for 589 00:28:13,440 --> 00:28:16,520 Speaker 12: the healthcare industry, there's a lot of time to prepare 590 00:28:16,560 --> 00:28:19,040 Speaker 12: for any changes. You'll know exactly what's going to happen 591 00:28:19,080 --> 00:28:19,840 Speaker 12: well before it does. 592 00:28:20,200 --> 00:28:23,159 Speaker 3: Going back to the EV point, it definitely feels like 593 00:28:23,240 --> 00:28:27,160 Speaker 3: solar EV's stuff like hydrogen from the IRA, like those 594 00:28:27,200 --> 00:28:29,879 Speaker 3: are the stuff maybe potentially on the chopping block potentially 595 00:28:30,480 --> 00:28:32,920 Speaker 3: where the President Trump win. But then the Musk thing 596 00:28:33,000 --> 00:28:36,880 Speaker 3: is weird because President President Musk, what does that mean? 597 00:28:37,640 --> 00:28:41,920 Speaker 3: Elon Musk has definitely become a big supporter of President 598 00:28:41,920 --> 00:28:45,440 Speaker 3: Trump donating to super packs, and I'm wondering if that 599 00:28:45,560 --> 00:28:48,800 Speaker 3: relationship will change the calculus to how President Trump sees 600 00:28:48,840 --> 00:28:49,720 Speaker 3: electric vehicles. 601 00:28:50,720 --> 00:28:52,320 Speaker 12: Absolutely, you hit it right on the head. And we 602 00:28:52,360 --> 00:28:54,640 Speaker 12: even say this in the report. There's a difference between 603 00:28:54,640 --> 00:28:57,000 Speaker 12: headline risk and reality. So if you look at the 604 00:28:57,040 --> 00:28:59,600 Speaker 12: electric vehicles, you can look at statements that President Trump 605 00:28:59,640 --> 00:29:02,280 Speaker 12: and other Republicans have said saying they do not like 606 00:29:02,320 --> 00:29:05,120 Speaker 12: these electric vehicle tax credits out there and so forth. 607 00:29:05,240 --> 00:29:07,120 Speaker 12: But then you balance it with the Elon Musk and 608 00:29:07,200 --> 00:29:10,240 Speaker 12: even taking it to grander scale on the Inflation Reduction Act. 609 00:29:10,480 --> 00:29:12,640 Speaker 12: A lot of the benefits of the IRA are going 610 00:29:12,640 --> 00:29:15,560 Speaker 12: to gop led states. So what you have to do 611 00:29:15,680 --> 00:29:18,800 Speaker 12: here is a take the statement. Okay, if President Trump 612 00:29:18,800 --> 00:29:21,600 Speaker 12: says I want to do away with the electric vehicle 613 00:29:21,640 --> 00:29:23,880 Speaker 12: tax credit, how am I going to do that? Most 614 00:29:23,920 --> 00:29:26,040 Speaker 12: likely I'll do that as part of tax reform and 615 00:29:26,160 --> 00:29:29,080 Speaker 12: via the reconciliation process, which means I probably won't have 616 00:29:29,120 --> 00:29:31,239 Speaker 12: any Democrats going aboard with me, so I need all 617 00:29:31,280 --> 00:29:34,160 Speaker 12: Republicans on board at that point. If the Elon Musk 618 00:29:34,200 --> 00:29:37,080 Speaker 12: starts whispering saying, hey, we like these tax credits for 619 00:29:37,120 --> 00:29:39,560 Speaker 12: the eb world, then that change may not even be 620 00:29:39,600 --> 00:29:42,040 Speaker 12: a high priority anymore. So I would just say that 621 00:29:42,160 --> 00:29:43,920 Speaker 12: for a lot of the statements, you have to remember 622 00:29:44,200 --> 00:29:47,280 Speaker 12: short term risk versus long term risk. And as we 623 00:29:47,360 --> 00:29:50,719 Speaker 12: see with every single election, politicians of both parties love 624 00:29:50,760 --> 00:29:52,440 Speaker 12: to go out there and say I'm going to do X, 625 00:29:52,560 --> 00:29:54,160 Speaker 12: Y and Z, but then when they get into power, 626 00:29:54,400 --> 00:29:56,960 Speaker 12: it's XYZ minus a whole bunch of other stuff because 627 00:29:56,960 --> 00:29:58,520 Speaker 12: I'm going to be a little bit more moderate now. 628 00:29:59,000 --> 00:30:01,640 Speaker 6: And Nathan, how about for our good friends on Wall Street, 629 00:30:01,720 --> 00:30:05,440 Speaker 6: M and A bankers and lawyers. Under this administration, the 630 00:30:05,480 --> 00:30:07,720 Speaker 6: regulator has been pretty tough, and it's been pretty tough 631 00:30:07,760 --> 00:30:08,480 Speaker 6: to get big M and. 632 00:30:08,440 --> 00:30:11,920 Speaker 7: A deals approved. Presumably that would. 633 00:30:11,720 --> 00:30:15,560 Speaker 6: Be more Wall Street friendly M and A friendly with 634 00:30:15,640 --> 00:30:16,640 Speaker 6: a Republican administration. 635 00:30:17,480 --> 00:30:20,480 Speaker 12: It really depends on the leadership that President Trump again, 636 00:30:20,520 --> 00:30:22,120 Speaker 12: if he were to win, would put in place at 637 00:30:22,160 --> 00:30:24,880 Speaker 12: the FTC and the DOJ. Because you have one side, 638 00:30:24,880 --> 00:30:28,120 Speaker 12: you have the Republican business friendly view, the stereotypical Republican 639 00:30:28,160 --> 00:30:30,840 Speaker 12: business friendly view. If you get somebody like Jamie Diamond, 640 00:30:30,920 --> 00:30:33,240 Speaker 12: I'm just picking on the banking execs. If you get 641 00:30:33,240 --> 00:30:35,720 Speaker 12: somebody from Wall Street, like a Gary Cohne individual that 642 00:30:35,840 --> 00:30:40,520 Speaker 12: was in his last administration, then you could just reasonably 643 00:30:40,560 --> 00:30:42,440 Speaker 12: say that M and A activity will get a little 644 00:30:42,480 --> 00:30:44,640 Speaker 12: bit earlier or a little bit easier. But if you 645 00:30:44,680 --> 00:30:47,200 Speaker 12: get somebody that comes from the economic populist side of 646 00:30:47,200 --> 00:30:50,600 Speaker 12: the party, for example, Senator Vance, the vice presidential candidate, 647 00:30:50,880 --> 00:30:53,520 Speaker 12: spoke in favor of the FDAC chair will Lim and 648 00:30:53,600 --> 00:30:56,800 Speaker 12: Kahn and said that she was one of Biden's best picks. 649 00:30:57,120 --> 00:30:59,520 Speaker 12: And so if President Trump comes out and picks it, 650 00:30:59,600 --> 00:31:02,520 Speaker 12: e I'm a populist for the heads of the FTC 651 00:31:02,640 --> 00:31:05,480 Speaker 12: and the DOJ, M and A made very difficult for 652 00:31:05,520 --> 00:31:07,959 Speaker 12: the next few years. It really just depends who's going 653 00:31:08,000 --> 00:31:10,080 Speaker 12: to get that nod, and that would come right after 654 00:31:10,120 --> 00:31:12,600 Speaker 12: the election or right after inauguration at President Trumpe wins. 655 00:31:12,800 --> 00:31:14,800 Speaker 3: Now, obviously, what we're seeing in the market today is 656 00:31:14,840 --> 00:31:17,440 Speaker 3: a steep reaction to tech selling off, but also the 657 00:31:17,480 --> 00:31:20,760 Speaker 3: news that potentially President Biden administration is looking for other 658 00:31:20,800 --> 00:31:25,960 Speaker 3: ways to curb foreign technology chips making it into Chinese things. So, 659 00:31:26,000 --> 00:31:31,320 Speaker 3: ASML took you Electric Electron getting hit, are these kind 660 00:31:31,360 --> 00:31:34,320 Speaker 3: of companies in this sector going to be hurt like 661 00:31:34,400 --> 00:31:37,880 Speaker 3: no matter what, like either way, both administrations are going 662 00:31:37,920 --> 00:31:39,960 Speaker 3: to crack down even harder on China. And how do 663 00:31:40,000 --> 00:31:40,760 Speaker 3: we think about that? 664 00:31:41,600 --> 00:31:43,960 Speaker 12: So the answer is at a high level, yes. So 665 00:31:44,000 --> 00:31:46,600 Speaker 12: the Biden administration has already even put out a proposal 666 00:31:46,640 --> 00:31:49,040 Speaker 12: on Treasury at the Treasury Department has put it on 667 00:31:49,040 --> 00:31:54,360 Speaker 12: a proposal limitating private equity investments into Semiconductor's artificial intelligence 668 00:31:54,440 --> 00:31:59,400 Speaker 12: quantum computing in China being seen as tough on China's 669 00:31:59,400 --> 00:32:01,920 Speaker 12: good politics no matter who you are. But the one 670 00:32:01,960 --> 00:32:03,960 Speaker 12: thing that we're seeing from statements from the White House, 671 00:32:04,000 --> 00:32:06,800 Speaker 12: but whether it's Trump or Biden, is that there's always 672 00:32:07,080 --> 00:32:10,400 Speaker 12: chances for flexibility down the line. Because the way this 673 00:32:10,520 --> 00:32:12,560 Speaker 12: works is that the president goes out and makes a 674 00:32:12,600 --> 00:32:15,080 Speaker 12: statement and then it's up to his staff to actually 675 00:32:15,120 --> 00:32:17,880 Speaker 12: implement it. And as you go through this implementation, you 676 00:32:18,000 --> 00:32:21,600 Speaker 12: often see instances where the president dials back because look, 677 00:32:21,960 --> 00:32:24,400 Speaker 12: whether it's President Biden or President Trump, they have to 678 00:32:24,440 --> 00:32:26,520 Speaker 12: look Jiji being in the face and say we're going 679 00:32:26,560 --> 00:32:29,120 Speaker 12: to do this. So I would just say that, you know, 680 00:32:29,240 --> 00:32:32,000 Speaker 12: starting it right now, the answer would be yes, no 681 00:32:32,040 --> 00:32:33,600 Speaker 12: matter who you are as president, it's going to be 682 00:32:33,680 --> 00:32:36,720 Speaker 12: seen is difficult. But let's look at the geopolitical tensions 683 00:32:36,760 --> 00:32:39,320 Speaker 12: as we get into twenty twenty five, and let's see 684 00:32:39,320 --> 00:32:42,840 Speaker 12: if the president's stance has changes ending because ultimately what 685 00:32:42,880 --> 00:32:45,400 Speaker 12: we could face with and say twenty twenty six could 686 00:32:45,440 --> 00:32:46,440 Speaker 12: be dramatically different. 687 00:32:47,200 --> 00:32:49,120 Speaker 7: All Right, Nathan Deane, thank you so much. We appreciate it. 688 00:32:49,200 --> 00:32:52,680 Speaker 6: Nathan Deane, Senior Policy on also Bloomberg Intelligence. If you 689 00:32:52,680 --> 00:32:56,680 Speaker 6: have a Bloomberg terminal BI Laws laws Is takes you 690 00:32:56,720 --> 00:32:59,680 Speaker 6: to the takes you to the dashboard that has all 691 00:32:59,720 --> 00:33:02,320 Speaker 6: the policy research from Bloomberg Intelligence, and they got it 692 00:33:02,600 --> 00:33:04,720 Speaker 6: neatly laid out there, and you can click on the 693 00:33:04,760 --> 00:33:07,760 Speaker 6: election matrix and they got all the election research that's 694 00:33:07,800 --> 00:33:11,640 Speaker 6: been written by all the BI analysts across Bloomberg Intelligence 695 00:33:11,760 --> 00:33:15,600 Speaker 6: how different administrations would impact their individual industry. So it's 696 00:33:15,640 --> 00:33:18,920 Speaker 6: a great place see all that research in one place. 697 00:33:20,480 --> 00:33:24,360 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 698 00:33:24,440 --> 00:33:27,960 Speaker 2: weekdays at ten am Eastern on applecar Play and Android 699 00:33:28,000 --> 00:33:30,760 Speaker 2: Auto with the Bloomberg Business app. You can also listen 700 00:33:30,880 --> 00:33:34,000 Speaker 2: live on Amazon Alexa from our flagship New York station. 701 00:33:34,360 --> 00:33:37,120 Speaker 2: Just say Alexa play Bloomberg eleven thirty. 702 00:33:38,640 --> 00:33:40,280 Speaker 6: Alex Steel and Paul Sweeney. We're live here in our 703 00:33:40,280 --> 00:33:42,720 Speaker 6: Bloomberg and are Active Brokers Studio. We're streaming live on 704 00:33:42,760 --> 00:33:45,720 Speaker 6: YouTube as well. To check us out on YouTube, good 705 00:33:45,720 --> 00:33:48,280 Speaker 6: over there and search Bloomberg Podcast and that's where you'll 706 00:33:48,320 --> 00:33:51,600 Speaker 6: find us. I'm just looking at the chart of Tesla 707 00:33:51,760 --> 00:33:54,160 Speaker 6: all over the place. I mean it stocks flat year 708 00:33:54,200 --> 00:33:57,400 Speaker 6: to date, but it's up seventy five percent from an 709 00:33:57,440 --> 00:34:00,600 Speaker 6: April twenty twenty four low here, So it's just been 710 00:34:00,640 --> 00:34:03,240 Speaker 6: all over the place. I think it reflects the uncertainty 711 00:34:03,280 --> 00:34:07,000 Speaker 6: in the market as to ultimate demand for electric vehicles 712 00:34:07,040 --> 00:34:09,719 Speaker 6: on a global scale. Taly Miller joins us. She's a 713 00:34:09,840 --> 00:34:14,040 Speaker 6: chief business officer at Re Automotive, joining us via Zoom 714 00:34:14,040 --> 00:34:16,879 Speaker 6: from Tel Aviv, Israel. Tally, thanks so much for joining us. 715 00:34:17,000 --> 00:34:20,400 Speaker 6: I wonder in your business, because your company is in. 716 00:34:20,440 --> 00:34:21,840 Speaker 7: This EV business. 717 00:34:22,360 --> 00:34:24,680 Speaker 6: What's your view of kind of what we're seeing in 718 00:34:24,719 --> 00:34:27,880 Speaker 6: maybe some waxing and waning in demand around the world 719 00:34:27,880 --> 00:34:28,680 Speaker 6: for evs. 720 00:34:28,960 --> 00:34:29,640 Speaker 7: What's your view? 721 00:34:30,880 --> 00:34:33,160 Speaker 13: Hi, good morning, and thanks so much for having me. 722 00:34:33,840 --> 00:34:36,319 Speaker 13: What we see as we are focused on the EV 723 00:34:36,400 --> 00:34:38,600 Speaker 13: commercial market and I can tell you that we see 724 00:34:38,960 --> 00:34:41,839 Speaker 13: more and more demand driven on the one hand by 725 00:34:42,200 --> 00:34:46,160 Speaker 13: fleet asking for electric trucks as well as the infrastructure 726 00:34:46,239 --> 00:34:51,680 Speaker 13: being ready steadily, So we do see a growing demand 727 00:34:52,680 --> 00:34:53,560 Speaker 13: on our side. 728 00:34:53,800 --> 00:34:54,680 Speaker 4: So why is that? 729 00:34:54,760 --> 00:34:54,880 Speaker 1: So? 730 00:34:55,000 --> 00:34:58,640 Speaker 3: Why will the commercial vehicles and fleets be easier to 731 00:34:58,719 --> 00:35:00,759 Speaker 3: move over than like all buying an EV. 732 00:35:03,600 --> 00:35:08,120 Speaker 13: Sure, So the commercial EV market has been growing, I 733 00:35:08,160 --> 00:35:11,680 Speaker 13: would say slower or started picking up slower than the 734 00:35:12,080 --> 00:35:15,640 Speaker 13: passenger EV but we've seen more and more demand recently, 735 00:35:15,719 --> 00:35:18,440 Speaker 13: and it's mostly due to the fact that the fleets 736 00:35:18,960 --> 00:35:22,720 Speaker 13: understand that there is a strong side on the total 737 00:35:22,760 --> 00:35:25,759 Speaker 13: cost of ownership, so the overall unit economics, that makes 738 00:35:25,760 --> 00:35:30,160 Speaker 13: a lot of sense for them to transfer into EV 739 00:35:30,760 --> 00:35:33,840 Speaker 13: In addition to that, the infrastructure is being put in place, 740 00:35:33,840 --> 00:35:38,920 Speaker 13: and therefore this combination makes it more attractive for them, 741 00:35:39,040 --> 00:35:42,120 Speaker 13: and that's the reason we see this growing demand in 742 00:35:42,160 --> 00:35:43,520 Speaker 13: the IVY commercial space. 743 00:35:44,280 --> 00:35:46,560 Speaker 6: So I mean, but I think one of the challenges, 744 00:35:46,719 --> 00:35:50,200 Speaker 6: just certainly in the in the automotive and personal use 745 00:35:50,200 --> 00:35:53,960 Speaker 6: space is cost and the relative high cost of evs 746 00:35:54,000 --> 00:35:55,920 Speaker 6: and the inability to bring those cost down. 747 00:35:55,760 --> 00:35:58,719 Speaker 7: And profitably build vehicles at a lower price point. 748 00:35:59,719 --> 00:36:02,520 Speaker 6: Is that how do you view that issue overall and 749 00:36:02,760 --> 00:36:03,799 Speaker 6: how do you think that'll play out. 750 00:36:05,480 --> 00:36:09,080 Speaker 13: That's a very good point, and indeed, this is one 751 00:36:09,120 --> 00:36:11,640 Speaker 13: of the elements that is key for our customers. They 752 00:36:11,640 --> 00:36:14,680 Speaker 13: call it overall the total cost of ownership or overall 753 00:36:14,719 --> 00:36:17,759 Speaker 13: it's not only the acquisition costs, but then it's what 754 00:36:17,840 --> 00:36:20,879 Speaker 13: does it take when you use the vehicle. So commercial 755 00:36:20,920 --> 00:36:23,719 Speaker 13: fleets are being used most of the day, so let's 756 00:36:23,719 --> 00:36:26,200 Speaker 13: say ninety five of the percent of the time the 757 00:36:26,280 --> 00:36:29,160 Speaker 13: vehicle is being used, and therefore the fact that it's 758 00:36:30,040 --> 00:36:36,480 Speaker 13: electric rather than internal combustion makes it more favorable overall 759 00:36:36,640 --> 00:36:39,239 Speaker 13: on the TCO. This is a feelback that we get 760 00:36:39,280 --> 00:36:42,920 Speaker 13: from our customers fleet customers such as pens Key and 761 00:36:43,000 --> 00:36:44,520 Speaker 13: you Haul with which we work. 762 00:36:45,000 --> 00:36:48,520 Speaker 3: There's other ways to sort of also move away from 763 00:36:48,600 --> 00:36:51,600 Speaker 3: fossil fuels, right there's hydrogen, maybe hydrogen cars at some point, 764 00:36:51,640 --> 00:36:57,880 Speaker 3: fuel cell batteries, biofuels, e gasoline. Are you noticing a 765 00:36:58,000 --> 00:37:00,840 Speaker 3: rise in any of those options when it comes to 766 00:37:00,920 --> 00:37:02,560 Speaker 3: commercial fleets. 767 00:37:04,840 --> 00:37:08,600 Speaker 13: Overall? What we see from again from a reperspective, is 768 00:37:08,640 --> 00:37:11,560 Speaker 13: we are really agnostic to power. The first trucks that 769 00:37:11,640 --> 00:37:15,240 Speaker 13: we put on place are in the medium duty sector 770 00:37:15,800 --> 00:37:18,640 Speaker 13: are electric trucks, and this is where we see a 771 00:37:18,680 --> 00:37:22,000 Speaker 13: lot of demand right now. But eventually we are completely agnostic. 772 00:37:22,360 --> 00:37:25,439 Speaker 13: Since our corner technology the core of what we're doing. 773 00:37:25,480 --> 00:37:30,840 Speaker 13: The technology can be applicable to any source of power. 774 00:37:31,680 --> 00:37:34,480 Speaker 6: Are you seeing different demand in different parts of the world, 775 00:37:34,520 --> 00:37:38,640 Speaker 6: And I know your company is in the US, They're in. 776 00:37:37,760 --> 00:37:39,439 Speaker 7: China and other parts of the world. 777 00:37:39,520 --> 00:37:42,239 Speaker 6: It just feels like in the US might be behind 778 00:37:42,719 --> 00:37:44,680 Speaker 6: some other parts of the world in terms of consumer 779 00:37:44,719 --> 00:37:46,200 Speaker 6: demand or just user demand. 780 00:37:47,760 --> 00:37:51,520 Speaker 13: Yeah, so overall, indeed, there is a difference between the 781 00:37:51,560 --> 00:37:55,560 Speaker 13: different locations in the world. So we have started our 782 00:37:55,640 --> 00:37:58,160 Speaker 13: activities in the US market and this is where we 783 00:37:58,200 --> 00:38:00,799 Speaker 13: see a lot of demand right right now. We have 784 00:38:01,480 --> 00:38:04,239 Speaker 13: certified that We're vehicles in the beginning of the year, 785 00:38:04,280 --> 00:38:06,439 Speaker 13: were actually the first vehicle to have certify the full 786 00:38:07,000 --> 00:38:08,960 Speaker 13: by wire and see a lot of demands for that. 787 00:38:09,960 --> 00:38:13,320 Speaker 13: In Europe there is demand but for a slightly different 788 00:38:13,400 --> 00:38:15,960 Speaker 13: vehicle than the ones we see in the US on 789 00:38:16,000 --> 00:38:20,239 Speaker 13: the commercial space, and China is is that, I would say, 790 00:38:20,280 --> 00:38:26,600 Speaker 13: a different market in this space. So we are currently 791 00:38:26,640 --> 00:38:28,480 Speaker 13: focused on US. 792 00:38:28,480 --> 00:38:30,080 Speaker 4: In Canada, we talk. 793 00:38:30,000 --> 00:38:32,879 Speaker 3: A lot here about traditional car companies and then sort 794 00:38:32,920 --> 00:38:35,160 Speaker 3: of the upstarts, right, I mean Tesla that an upstart, 795 00:38:35,200 --> 00:38:39,240 Speaker 3: but Rivian, Lucid et cetera. Volkswagen plowing but five billion 796 00:38:39,320 --> 00:38:43,480 Speaker 3: dollars into a tie up with Rivian Automotive. What are 797 00:38:43,520 --> 00:38:45,640 Speaker 3: your thoughts about that they're going to jointly develop a 798 00:38:45,680 --> 00:38:50,160 Speaker 3: battery powered vehicle and software. It helps the German carmaker 799 00:38:50,200 --> 00:38:53,719 Speaker 3: get a boost to US company technology and Ravine gets 800 00:38:53,719 --> 00:38:57,000 Speaker 3: a lifeline basically, what are your thoughts from your perspective 801 00:38:57,040 --> 00:38:57,600 Speaker 3: on this deal. 802 00:38:59,120 --> 00:39:03,719 Speaker 13: So I think it's a brilliant deal for these two companies. 803 00:39:03,760 --> 00:39:07,560 Speaker 13: But also this indicates the market about the readiness of 804 00:39:07,880 --> 00:39:13,960 Speaker 13: legacy OEMs to integrate proven and superior technologies. So from 805 00:39:14,040 --> 00:39:17,480 Speaker 13: a VW point of view, indeed, they integrate that the 806 00:39:17,520 --> 00:39:20,520 Speaker 13: technology the software defined vehicles and and for even is 807 00:39:20,560 --> 00:39:23,000 Speaker 13: great because they can tap into the supply chain of 808 00:39:23,080 --> 00:39:27,240 Speaker 13: VW and they're together they can bring an attractive vehicle 809 00:39:27,280 --> 00:39:32,799 Speaker 13: from a technology and cost standpoint for the market. What 810 00:39:32,880 --> 00:39:35,960 Speaker 13: it shows is shows that legacy OEMs are ready to 811 00:39:36,080 --> 00:39:40,920 Speaker 13: integrate now uh technologies, exteriory technologies that are proven and 812 00:39:40,920 --> 00:39:43,680 Speaker 13: that are superior into the core of what they're doing. 813 00:39:43,920 --> 00:39:46,880 Speaker 13: And therefore it's very relevant for us at a re audibilive. 814 00:39:47,400 --> 00:39:49,480 Speaker 6: All Right, Talley Miller, thank you so much for joining us. A. 815 00:39:49,560 --> 00:39:52,480 Speaker 6: Tally Miller is the chief business officer for Re Automotive. 816 00:39:52,480 --> 00:39:55,080 Speaker 6: It's a public trade company on the nasdack. 817 00:39:54,840 --> 00:39:56,640 Speaker 7: R EE is the ticker. 818 00:39:57,000 --> 00:39:59,120 Speaker 6: She joined us via Zoom from tel Aviv. 819 00:39:59,520 --> 00:40:01,640 Speaker 7: Is your worth company is based here. 820 00:40:01,920 --> 00:40:03,920 Speaker 6: But it just goes, you know, we saw some news, 821 00:40:04,360 --> 00:40:06,680 Speaker 6: you know, just really our the last six nine months, 822 00:40:06,719 --> 00:40:12,200 Speaker 6: the us OEM's auto companies just dialing back their EV rollout, 823 00:40:12,400 --> 00:40:17,440 Speaker 6: either timetable volume targets, things like that, and they're basically 824 00:40:17,480 --> 00:40:19,719 Speaker 6: saying that they don't see the demand. And that's kind 825 00:40:19,719 --> 00:40:22,000 Speaker 6: of been the issue, you know, and so. 826 00:40:22,120 --> 00:40:22,680 Speaker 7: Is it price? 827 00:40:22,800 --> 00:40:25,720 Speaker 6: Is it the fact that you know, you can't charge 828 00:40:25,719 --> 00:40:28,000 Speaker 6: it as efficiently as you can, as a lot of 829 00:40:28,000 --> 00:40:30,919 Speaker 6: people would like, what's really holding the demand back? 830 00:40:31,520 --> 00:40:31,719 Speaker 4: Yeah? 831 00:40:31,760 --> 00:40:35,640 Speaker 3: And interestingly enough, when Bloomberg reporters talked to President Trump 832 00:40:35,680 --> 00:40:39,640 Speaker 3: and editors and they spoke with them, they asked about 833 00:40:39,680 --> 00:40:42,360 Speaker 3: EV's and President Prum said, I have no objection to the. 834 00:40:42,320 --> 00:40:43,439 Speaker 4: Electric vehicle, the EV. 835 00:40:43,680 --> 00:40:47,200 Speaker 3: I think it's great, and that sort of in response 836 00:40:47,239 --> 00:40:49,520 Speaker 3: to if President Joe Biden's done anything with respect to 837 00:40:49,600 --> 00:40:50,279 Speaker 3: the economy. 838 00:40:51,000 --> 00:40:53,200 Speaker 4: And then he says the cars don't go far enough. 839 00:40:53,280 --> 00:40:57,239 Speaker 3: They're really expensive, they're also very heavy, and this is 840 00:40:57,280 --> 00:41:02,239 Speaker 3: all in that great Bloomberg BusinessWeek p So it's hard 841 00:41:02,280 --> 00:41:05,080 Speaker 3: to like, that's different, Like that's different than saying, like 842 00:41:05,239 --> 00:41:06,600 Speaker 3: EV stink, we got to go back. 843 00:41:06,520 --> 00:41:08,919 Speaker 4: To internal internal combustion enders. They don't go far enough, 844 00:41:08,960 --> 00:41:09,719 Speaker 4: Like what does that mean? 845 00:41:09,920 --> 00:41:11,560 Speaker 6: Yeah, So it's just you know, it's kind of what 846 00:41:11,600 --> 00:41:13,800 Speaker 6: I think a lot of people tell you performance versus cost, 847 00:41:14,360 --> 00:41:18,239 Speaker 6: versus reliability versus preserving value in terms of the resale market. 848 00:41:18,280 --> 00:41:20,239 Speaker 6: So there's a lot of issues out there, and you know, 849 00:41:20,320 --> 00:41:20,719 Speaker 6: a lot of. 850 00:41:20,640 --> 00:41:22,280 Speaker 7: The bulls are still saying it's a bump. 851 00:41:22,040 --> 00:41:22,359 Speaker 3: In the road. 852 00:41:22,360 --> 00:41:25,120 Speaker 7: We're still going to move towards electric. 853 00:41:25,520 --> 00:41:30,040 Speaker 2: This is the Bloomberg Intelligence Podcast, available on Apples, Spotify, 854 00:41:30,239 --> 00:41:33,439 Speaker 2: and anywhere else you'll get your podcasts. Listen live each 855 00:41:33,480 --> 00:41:36,840 Speaker 2: weekday ten am to noon Eastern on Bloomberg dot com, 856 00:41:36,960 --> 00:41:40,360 Speaker 2: the iHeart Radio app, tune In, and the Bloomberg Business app. 857 00:41:40,480 --> 00:41:43,600 Speaker 2: You can also watch us live every weekday on YouTube 858 00:41:43,680 --> 00:41:45,560 Speaker 2: and always on the Bloomberg terminal.