WEBVTT - Morgan Stanley Chief US Equity Strategist Mike Wilson Talks ‘Liberation Day’ Not a Clearing Event 0:00:02.520 --> 0:00:07.080 Bloomberg Audio Studios, podcasts, radio news. 0:00:07.640 --> 0:00:08.880 There will still be volatility. 0:00:08.960 --> 0:00:11.560 We're in this deep fog, pull over the side of 0:00:11.600 --> 0:00:13.720 the road and blinkers on kind of unservedia. 0:00:13.920 --> 0:00:18.640 This is Bloomberg Surveillance with Jonathan Ferrell, Lisa Bromowitz, and 0:00:18.680 --> 0:00:19.800 Anne Marie Hordern. 0:00:21.120 --> 0:00:23.720 The second Dow of Bloomberg Surveilance starts right now, and 0:00:23.760 --> 0:00:26.239 we start with some scores. Equity futures on the S 0:00:26.320 --> 0:00:28.760 and P five hundred negative by nine tenths of one 0:00:28.800 --> 0:00:31.320 percent on the Nasdaq. The NASDAK looks like this, the 0:00:31.400 --> 0:00:33.839 NASTAG one hundred down by one point two five, the 0:00:33.920 --> 0:00:36.720 Russell down by one point two. In the bond market 0:00:36.800 --> 0:00:39.159 two year, ten year, thirty year, we receive a bid 0:00:39.240 --> 0:00:41.639 yields down by six basis points at the front end, 0:00:41.920 --> 0:00:44.880 down by five on tens, down by five on thirty. 0:00:45.000 --> 0:00:49.880 So your week ahead is absolutely stacked full of economic data, 0:00:49.920 --> 0:00:53.080 including payrolls on Friday and an address from fetchad Jpowell 0:00:53.120 --> 0:00:55.400 going into the weekend. But before we get there, it's 0:00:55.440 --> 0:00:58.440 all about Wednesday, Liberation Day. It's April second. 0:00:58.520 --> 0:01:00.880 It's April second, and it feels like the has shifted. 0:01:00.960 --> 0:01:02.720 What we've heard from the President last week was that 0:01:02.760 --> 0:01:04.880 he's willing to be lenient, He's willing to be flexible. 0:01:04.920 --> 0:01:07.200 The reporting now seems they're going back to what he's 0:01:07.240 --> 0:01:10.640 been speaking about for months on the campaign trail, honestly 0:01:10.680 --> 0:01:14.399 for decades when it comes to tariffs, a universal tariff. 0:01:14.680 --> 0:01:17.160 Now the big question is is Wednesday the start of 0:01:17.160 --> 0:01:19.640 a negotiation when it comes to US and they're trading partners. 0:01:19.800 --> 0:01:20.600 Does Trump come. 0:01:20.440 --> 0:01:23.440 In with a very maximalist approach or is this going 0:01:23.520 --> 0:01:26.160 to be the new trader rules of the road for 0:01:26.240 --> 0:01:27.600 this administration going forward. 0:01:27.680 --> 0:01:29.560 We've all got a wake up to what's actually happening, 0:01:29.560 --> 0:01:32.360 and what's happening as more tariffs repeatedly over the last 0:01:32.360 --> 0:01:34.880 few months. So what's happening on Wall Street? More revisions? 0:01:35.040 --> 0:01:37.200 This from Goldman Sachs. So David Couston is now at 0:01:37.240 --> 0:01:40.480 fifty seven hundred year end, started the year at sixty five, 0:01:40.760 --> 0:01:43.080 dropped that to sixty two on a month ago. Fifty 0:01:43.120 --> 0:01:45.280 seven hundred is the year end Downlook. Then you've got 0:01:45.319 --> 0:01:47.840 Jan Hansis and the team at Goldman Sachs looking for 0:01:47.880 --> 0:01:51.360 the stagflation remix that's getting everyone's attention. Three point five 0:01:51.400 --> 0:01:54.760 percent on psee just one percent on GDP. 0:01:54.960 --> 0:01:56.680 And what's driving a lot of that is the fact 0:01:56.720 --> 0:01:59.960 that for the second time this month, Goldman Saxe raised 0:02:00.040 --> 0:02:02.760 where they expect the tariff barriers to go, So they 0:02:02.760 --> 0:02:05.160 are expecting higher walls to go up when it comes 0:02:05.160 --> 0:02:08.080 to this administration. It's not just Also on Wall Street, 0:02:08.120 --> 0:02:11.520 Jonathan over the weekend, CBS polling a majority of Americans 0:02:11.560 --> 0:02:14.480 are saying they want this president to bring inflation down, 0:02:14.880 --> 0:02:18.560 costs down of goods and services, and focus less on teriffs. 0:02:18.680 --> 0:02:20.880 A few reports over the weekend, the Washington Post saying 0:02:20.919 --> 0:02:23.080 that the president wants to go big. It's pushing the 0:02:23.120 --> 0:02:26.400 team to go large. Politico reporting that no one in 0:02:26.440 --> 0:02:28.639 the administration knows what the president is going to do 0:02:28.960 --> 0:02:29.720 in two days time. 0:02:29.840 --> 0:02:32.200 Well, Kevin Hasset, his NEC director, had this to say, 0:02:32.200 --> 0:02:34.280 I'm Fox News. I can't give you any forward guidance 0:02:34.280 --> 0:02:36.080 on what's going to happen this week. The President has 0:02:36.080 --> 0:02:37.919 got a heck of a lot of analysis before him, 0:02:38.000 --> 0:02:40.440 and he's going to make the right choice. I'm sure 0:02:40.680 --> 0:02:43.520 now is that the President has made a decision that 0:02:43.639 --> 0:02:45.880 I'm not fully on board with, or is that we 0:02:46.000 --> 0:02:48.240 actually don't know what the president is going to decide. 0:02:48.280 --> 0:02:51.280 There is a key report coming out tomorrow. A question 0:02:51.360 --> 0:02:53.320 that I'm talking to a lot of folks about Washington 0:02:53.360 --> 0:02:55.280 is whether or not the report is going to mad public. 0:02:55.520 --> 0:02:58.399 When Trump came into office, he told his trade representative 0:02:58.600 --> 0:03:01.640 he wants a full announce on well, how the US 0:03:01.760 --> 0:03:03.960 is dealing with other trade partners when it comes to trade, 0:03:03.960 --> 0:03:08.280 devisits reciprocity, everything under the sun. That report goes in 0:03:08.280 --> 0:03:10.040 front of the President tomorrow, and then I think he'll 0:03:10.040 --> 0:03:11.000 make his final decision. 0:03:11.120 --> 0:03:13.320 Not many people want to be long going into that event. 0:03:13.520 --> 0:03:15.320 Space to the move we're seeing this morning, We're down 0:03:15.320 --> 0:03:17.000 by nine tenths of one percent on the S and 0:03:17.080 --> 0:03:19.600 P coming up this soum. Mike Wilson of Morgan Stanley 0:03:19.600 --> 0:03:21.960 with stocks on a three day slide, Hendrod of Trays 0:03:21.960 --> 0:03:24.560 of Vada Partners as the world prepares for Liberation Day, 0:03:24.800 --> 0:03:27.680 and vic Ram Malholter of Mazoo and why AI data 0:03:27.720 --> 0:03:30.440 center concerns may be overblown. We begin this sound with 0:03:30.520 --> 0:03:34.040 stock softer as trade uncertainty hangs over markets. Mike Wilson 0:03:34.040 --> 0:03:37.520 of Morgan Stanley, writing this week's reciprocal tariff announcement, it's 0:03:37.680 --> 0:03:41.800 likely a stepping stone for further negotiations as opposed to 0:03:41.880 --> 0:03:44.720 a clearing event. Mike joins us now for more. Mike, 0:03:44.760 --> 0:03:47.440 good morning, Good morning, Joane. Why is that distinction important? 0:03:47.760 --> 0:03:49.640 Well, I think that you know, everybody's looking for like 0:03:49.680 --> 0:03:51.920 a final piece here. This is gonna this is going 0:03:51.960 --> 0:03:54.920 to take time, you know, and not unlike a lot 0:03:54.960 --> 0:03:56.840 of the other policies that have come out this year, 0:03:56.880 --> 0:03:59.080 like this is this is what we kind of signed 0:03:59.160 --> 0:04:01.600 up for, right think to what so far what the 0:04:01.640 --> 0:04:04.960 President has done has really been surprising. All of the 0:04:05.000 --> 0:04:08.400 policy changes so far have been growth negative, and that 0:04:08.920 --> 0:04:11.160 you know, we've ad likened this to a new CEO 0:04:11.280 --> 0:04:12.560 coming in, right they have. 0:04:12.600 --> 0:04:14.080 They're one a restructure to company. 0:04:14.520 --> 0:04:16.960 They're restructuring the company, they're going to kitchen sink it, 0:04:17.400 --> 0:04:19.000 and then they're going to try to make you know, 0:04:19.040 --> 0:04:21.480 their plan work for next year. So this is a 0:04:21.720 --> 0:04:23.360 this is going to take some time, and you know, 0:04:23.600 --> 0:04:25.640 this level that we're at now is critical from a 0:04:25.680 --> 0:04:29.279 market standpoint, not so much from the administration standpoint. 0:04:29.320 --> 0:04:31.240 I think that's also something of knowledge. 0:04:31.279 --> 0:04:33.440 It's also very on brand for Trump to take a 0:04:33.520 --> 0:04:36.279 maximalist approach in the very beginning. But how messy. Could 0:04:36.279 --> 0:04:39.040 it be if he comes in with this maximalist, aggressive 0:04:39.080 --> 0:04:42.320 approach and then we have retaliation from trading partners. 0:04:42.000 --> 0:04:43.960 Well, like, it's the NAFTA and so like you know, 0:04:44.040 --> 0:04:47.159 it's the best alternative to a negotiating agreement and the 0:04:47.200 --> 0:04:51.400 batna and that is that is classic negotiating tactic. You 0:04:51.400 --> 0:04:53.640 you come in way over here to the right with 0:04:53.720 --> 0:04:55.279 the hope of kind of settling in the middle. 0:04:55.400 --> 0:04:57.000 So I don't think that's unusual either. 0:04:57.680 --> 0:05:00.960 The response from trade partners is that means engaging, okay. 0:05:01.080 --> 0:05:03.960 So that's that's how you get people to engage in 0:05:04.000 --> 0:05:06.640 your discussion. You come out with a big splash. They 0:05:06.680 --> 0:05:09.520 have to come to the table and negotiations begin. We're 0:05:09.520 --> 0:05:11.440 not even at the table yet, okay. So that's why 0:05:11.480 --> 0:05:13.480 this is going to be very uncertain for a period 0:05:13.480 --> 0:05:13.680 of time. 0:05:13.760 --> 0:05:15.320 I think some countries think that they are at the 0:05:15.320 --> 0:05:17.120 table because they sent a few representatives here in the 0:05:17.120 --> 0:05:18.880 past few weeks. But I agree with you, it really 0:05:18.880 --> 0:05:22.240 hasn't started. So what do you do if you're an investor, Well. 0:05:22.040 --> 0:05:24.159 You've done what we've sort of done, is you avoid 0:05:24.279 --> 0:05:26.760 areas that are going to be most effective consumer discretionary 0:05:26.760 --> 0:05:29.120 goods and that area has been hit the hardest. So 0:05:29.320 --> 0:05:32.240 maybe that's getting a little bit extreme. I would say, 0:05:32.279 --> 0:05:34.400 you know, defensively position high quality. 0:05:34.480 --> 0:05:35.720 That's been our core portfolio. 0:05:35.800 --> 0:05:37.760 Now we've made some trading calls lately that would have 0:05:37.880 --> 0:05:39.960 gone against that. Some of those works, some of those 0:05:40.000 --> 0:05:41.640 didn't work. But I think at this point you want 0:05:41.640 --> 0:05:43.440 to be up the quality courage, want to be in 0:05:43.480 --> 0:05:45.799 businesses that can kind of mitigate some of these concerns. 0:05:45.839 --> 0:05:48.040 You have pricing power, you have the ability to kind 0:05:48.040 --> 0:05:51.040 of move production around, you can take inventory on to 0:05:51.120 --> 0:05:53.120 kind of buffer this for sixty or ninety days, which 0:05:53.120 --> 0:05:55.520 you've seen all those mitigation strategies, something we work wrote 0:05:55.520 --> 0:05:57.440 about in our note today. So those are the kind 0:05:57.480 --> 0:05:59.400 of companies we want to own in this period of time. 0:05:59.760 --> 0:06:01.480 I do believe there will be a clearing event at 0:06:01.520 --> 0:06:03.240 some point this year, but we're not there yet. 0:06:03.400 --> 0:06:05.039 Some of the changes you have made the art work, 0:06:05.040 --> 0:06:08.279 and let's talk about them. International NEX this morning down 0:06:08.320 --> 0:06:12.520 two percent, nie K overnight down four percent. International starting 0:06:12.520 --> 0:06:15.200 to turn subtle change from where we were over the 0:06:15.279 --> 0:06:16.640 last month or so. What's changing? 0:06:16.800 --> 0:06:19.480 Well, that's right, and so last week's note we kind 0:06:19.520 --> 0:06:21.680 of made the call that US probably does better than 0:06:21.720 --> 0:06:23.600 these other regions because at the end of the day, 0:06:23.640 --> 0:06:26.560 those reasons you mentioned are most sensitive to global trade, 0:06:26.640 --> 0:06:29.679 particularly Japan. So the fact that was down four percent, 0:06:29.720 --> 0:06:32.200 I think is another sign that hey, actually in the 0:06:32.240 --> 0:06:35.120 market now is laser focused on this terror for trade 0:06:35.160 --> 0:06:37.320 issue as opposed to some of the other issues that 0:06:37.360 --> 0:06:40.479 it's been kind of worrying about here. So that relative value, 0:06:40.520 --> 0:06:42.719 if you will, looks still looks good to us. It 0:06:42.720 --> 0:06:45.839 may happen in a downtape, okay, which is also somebody 0:06:45.839 --> 0:06:48.280 to consider, because the US is still the highest quality 0:06:48.760 --> 0:06:51.839 market in the world, and a uncertain world, high quality 0:06:51.920 --> 0:06:52.600 will outperform. 0:06:52.680 --> 0:06:55.000 But you think that's European long sort of built up 0:06:55.000 --> 0:06:56.760 over the past few months, there might be in trouble here. 0:06:56.880 --> 0:06:57.400 I think that's right. 0:06:57.400 --> 0:07:01.000 I think there's a little extension in our European strategy 0:07:01.000 --> 0:07:03.280 team is in the same page. I mean, there are 0:07:03.320 --> 0:07:05.680 some good things going on in Europe that haven't been 0:07:05.680 --> 0:07:09.000 happening for decades potentially, But boy, that's gonna take that's 0:07:09.000 --> 0:07:11.440 gonna take even longer than this, you know, sort of 0:07:11.440 --> 0:07:14.320 tariff negotiation you're talking about, you know, country spending more 0:07:14.360 --> 0:07:17.320 money on fiscal deregulation. I mean, this is a multi 0:07:17.440 --> 0:07:20.400 year transition in the stock market. You know, some cases 0:07:20.440 --> 0:07:21.560 are fifteen to twenty percent. 0:07:21.640 --> 0:07:26.120 So besides Ryan Mattel or any other industrial military company 0:07:26.280 --> 0:07:27.840 in Europe, do you like anything there? 0:07:28.040 --> 0:07:29.840 Well, I mean, I think the financials have been still 0:07:29.880 --> 0:07:32.600 a place to think about that have a potential structural 0:07:32.680 --> 0:07:35.200 change or benefit in that regard, I think things that 0:07:35.200 --> 0:07:37.600 have levered to the consumer. But once again, these are 0:07:37.720 --> 0:07:41.040 these kind of got extended, you know, and from my standpoint, 0:07:41.120 --> 0:07:43.360 I think there's better value now in the US and 0:07:43.400 --> 0:07:44.120 some of these areas. 0:07:44.240 --> 0:07:45.800 I'm sure you saw the new numbers coming out at 0:07:45.800 --> 0:07:48.480 Goldman Saxon, the same new full costs from Yon Hatsias. 0:07:48.480 --> 0:07:49.880 If we can just throw them up on the screen. 0:07:50.240 --> 0:07:53.640 One percent on GDP, three point five percent on PCEA, 0:07:54.000 --> 0:07:56.520 that's a stackflation remix. What are your time in clients 0:07:56.560 --> 0:07:59.040 that we're asking you about how we would tried stackflation 0:07:59.400 --> 0:08:00.000 in America? 0:08:00.320 --> 0:08:02.680 We're not quite in the stagflation camp. We're more in 0:08:02.720 --> 0:08:05.120 the camp that you know, expectations are probably not where 0:08:05.200 --> 0:08:07.880 reality is, which is that growth is worse than people 0:08:07.960 --> 0:08:10.240 thought and inflation is a bit stickier. And that's how 0:08:10.240 --> 0:08:12.440 we came into this year, so we don't we don't 0:08:12.440 --> 0:08:13.960 mess around with our year end targets, but we have 0:08:14.000 --> 0:08:15.960 been messing around with our short term targets. So we're 0:08:15.960 --> 0:08:18.280 in that fifty five hundred to I would say, fifty 0:08:18.320 --> 0:08:20.280 eight to fifty nine. Now we've kind of chopped off 0:08:20.320 --> 0:08:22.480 the upper end of that for the first half. 0:08:22.320 --> 0:08:22.840 Of this year. 0:08:23.400 --> 0:08:25.360 I'm not willing to throw in the towel yet completely 0:08:25.440 --> 0:08:28.240 on the full year because, as we've been saying, the 0:08:28.280 --> 0:08:30.480 good stuff of you know, the policy changes that we 0:08:30.520 --> 0:08:33.240 expect could start to feed into the equity markets by 0:08:33.360 --> 0:08:36.080 year end. Could we pushed that timing out, you know, 0:08:36.120 --> 0:08:37.000 three six months? 0:08:37.040 --> 0:08:37.400 Sure? 0:08:37.640 --> 0:08:39.400 But you know, right now we're still in that fifty 0:08:39.440 --> 0:08:41.360 five hundred to sixty one hundred range with the probably 0:08:41.360 --> 0:08:44.800 a truncated upper band. And now if you get universal terrafs, 0:08:44.840 --> 0:08:47.040 which is something that we talked about in this morning's note, 0:08:47.200 --> 0:08:49.520 then that lower half, that lower end of the band 0:08:49.559 --> 0:08:50.360 maybe comes down. 0:08:50.520 --> 0:08:52.440 So we're you know, we if we. 0:08:52.320 --> 0:08:54.920 Break down this week and universal terrrifs for the reason, 0:08:55.200 --> 0:08:57.240 we could see something even lower than fifty five hundred 0:08:57.280 --> 0:08:57.800 in the short term. 0:08:57.800 --> 0:09:00.360 Can we talk about the rebalancing you're expecting though, the 0:09:00.440 --> 0:09:03.160 ultimate vision of this administration and why you still believe 0:09:03.200 --> 0:09:05.640 the more complete policy mix is still bullish. 0:09:05.920 --> 0:09:07.480 Yeah, I think, well, I think it's constructive. 0:09:07.480 --> 0:09:10.280 I'm not sure it's wildly bullish, because you know, valuations 0:09:10.320 --> 0:09:12.319 were probably the biggest constraint coming in. I think it's 0:09:12.320 --> 0:09:13.880 bullish for a lot of parts of the market that 0:09:13.920 --> 0:09:16.600 have underperformed for the last three or four years. I mean, 0:09:17.000 --> 0:09:19.560 you know, our vision, or I think the administration's vision 0:09:19.640 --> 0:09:22.120 quite frankly, it's very simple. They want to affect a 0:09:22.160 --> 0:09:25.079 slowdown in government. They want to kind of liberate the 0:09:25.120 --> 0:09:28.720 private economy through things like deregulation, keeping tax rates lower. 0:09:28.920 --> 0:09:31.800 Maybe tariffs are part of that storyline. Fine, and that 0:09:31.880 --> 0:09:35.960 transition from kind of public government allocation of resources to 0:09:36.080 --> 0:09:39.640 private enterprise allocation of resources actually at least start broadening 0:09:39.720 --> 0:09:42.679 out something that's been absent really for the last two 0:09:42.720 --> 0:09:44.440 or three or something. You know, we've talked about here 0:09:44.559 --> 0:09:48.120 many times, this crowding out feature of the government crowding 0:09:48.160 --> 0:09:51.600 out small businesses, crowding out the average consumer. And look, 0:09:51.600 --> 0:09:53.439 I think they've been crystal clear in their in their 0:09:53.600 --> 0:09:56.000 and sort of their messaging. It's not going to be 0:09:56.080 --> 0:09:58.560 fun for a period of time. Okay, it's we have 0:09:58.600 --> 0:10:02.360 to sort of detox. As the Secretary Treasury mentioned, you 0:10:02.400 --> 0:10:04.360 know that there's going to be an adjustment period, as 0:10:04.360 --> 0:10:05.080 a president has said. 0:10:05.120 --> 0:10:06.560 So it's been crystal clear what they've been. 0:10:06.440 --> 0:10:08.360 Doing the whole Eat your vegetables, then get a dessert. 0:10:08.440 --> 0:10:10.559 When it comes to dessert, we're only talking about current 0:10:10.559 --> 0:10:13.840 policy extension. How exciting is that for the market if 0:10:13.880 --> 0:10:16.240 you're just talking about extension of TCJA. When it comes 0:10:16.280 --> 0:10:19.439 to tax cuts and not actual additional tax cuts. 0:10:19.200 --> 0:10:20.080 Well, that's okay. 0:10:20.080 --> 0:10:22.120 So what you're talking about is fiscal stimulus, and that's 0:10:22.160 --> 0:10:24.560 what we have to detox from. So we don't need 0:10:24.600 --> 0:10:27.640 more fiscal stimulus. We need less fiscal stimulus. We need 0:10:27.640 --> 0:10:31.040 the private enterprise of America doing organic growth. 0:10:31.200 --> 0:10:34.320 If taxes are going up on sales goods, don't need 0:10:34.360 --> 0:10:37.280 more tax cuts for individual Well. 0:10:37.120 --> 0:10:39.920 That's the idea, is that we're going to keep taxes lower, 0:10:39.960 --> 0:10:42.800 maybe lower than further if tariff's a bring in revenue, 0:10:42.840 --> 0:10:44.560 and b there's a negotiating. 0:10:44.000 --> 0:10:45.040 Ploy so we'll see. 0:10:45.120 --> 0:10:47.240 I mean, this is going to be very messy, and 0:10:47.760 --> 0:10:49.400 this is not going to be easy transition. 0:10:49.480 --> 0:10:51.079 But John asks, what is. 0:10:51.040 --> 0:10:53.520 The bullet story, you know, over the next twelve months, 0:10:53.679 --> 0:10:55.880 I think it's that, and it's going to be a 0:10:55.880 --> 0:10:58.920 lot of uncertainty, but I still think that is the plan. 0:10:59.000 --> 0:11:01.760 I still think what I so far is a is a. 0:11:01.720 --> 0:11:04.520 Direction in that in that manner, and and looks stock 0:11:04.559 --> 0:11:07.319 operators and financial market operators just gonna have to deal 0:11:07.360 --> 0:11:10.120 with this adjustment. And that's that's what's the that's the 0:11:10.200 --> 0:11:11.520 consternation right now. 0:11:11.400 --> 0:11:14.400 My Trump put versus FED put, who blinks first? And why? 0:11:14.720 --> 0:11:16.640 Well, I mean I've taken the view that's probably the 0:11:16.679 --> 0:11:20.640 FED because growth is deteriorating further here now. In other words, 0:11:21.160 --> 0:11:23.440 I think that the concern around terrors on what that's 0:11:23.440 --> 0:11:25.839 doing to inflation is it kind of gave the FED 0:11:25.960 --> 0:11:28.040 excuse to take a break. Let's not let's not forget 0:11:28.120 --> 0:11:31.640 the FED kind of hundred basis points last fall really 0:11:31.640 --> 0:11:34.440 in the absence of any you know, labor issues. So 0:11:35.000 --> 0:11:37.560 the question is, you know, we're digesting that. Also, the 0:11:37.600 --> 0:11:40.079 back end of the bomb market rates went up during 0:11:40.080 --> 0:11:43.040 that period, So I think the terrorfs provide a nice 0:11:43.080 --> 0:11:45.640 excuse for the FED to take a pause here. But 0:11:45.720 --> 0:11:47.680 I have no doubt that if we saw a major 0:11:47.720 --> 0:11:50.280 deterioration in the labor market, the Fed would act. And 0:11:50.320 --> 0:11:52.680 I don't think the President is in a hurry to 0:11:53.000 --> 0:11:56.440 blink because as we were discussing kind of off camera, 0:11:56.480 --> 0:11:58.360 I mean, they have to do things quickly here, and 0:11:58.400 --> 0:12:00.720 they've said that, like we got to We've got to 0:12:00.720 --> 0:12:02.600 do as much as we can the first six months 0:12:02.960 --> 0:12:04.719 for a couple of reasons. A we don't want to 0:12:04.720 --> 0:12:07.200 get dragged back into the quicksand okay of you know, 0:12:07.240 --> 0:12:09.920 the policy making. And secondarily, you know, the midterms come 0:12:10.000 --> 0:12:12.040 up in two years. You know, your last guest was 0:12:12.080 --> 0:12:14.320 just talking about some of the political ramifications. I think 0:12:14.559 --> 0:12:16.720 that's not a concern now, but it probably becomes more 0:12:16.760 --> 0:12:17.880 of a concern later this year. 0:12:17.960 --> 0:12:20.240 But when it looks at the political ramifications, you are 0:12:20.280 --> 0:12:22.680 seeing it come up not just consumer sentiment, but also polls. 0:12:22.760 --> 0:12:25.320 People are still concerned about the cost of goods now, 0:12:25.520 --> 0:12:28.520 and they're concerned about tariffs. Adding to that, what is 0:12:28.520 --> 0:12:31.600 going to regulate Trump If it's not the politics. 0:12:31.520 --> 0:12:34.200 I think, look, he's he's really trying to follow his agenda. 0:12:34.240 --> 0:12:36.480 He's trying to check the boxes on the things that 0:12:36.520 --> 0:12:38.840 he promised he would do for the American people. And 0:12:38.840 --> 0:12:41.120 a lot of those things are market unfriendly. I mean, 0:12:41.120 --> 0:12:43.520 that's what we're really discussing here. Is he market Is 0:12:43.559 --> 0:12:45.160 he worried about the market? Is he worried about his 0:12:45.240 --> 0:12:47.920 agenda and doing those things. I think he's more worried 0:12:47.920 --> 0:12:50.880 about his agenda. And that was a big adjustment period. 0:12:50.880 --> 0:12:52.920 I think in January February were talking about this, and 0:12:52.960 --> 0:12:55.040 I think people were a little complacent in this idea 0:12:55.080 --> 0:12:57.360 that he was going to be so market's focused, and 0:12:57.400 --> 0:12:59.560 to me, that was that's really when the stock market 0:12:59.640 --> 0:13:02.160 in the US started to have problems, is when first 0:13:02.160 --> 0:13:05.160 the Treasury Secretary said it and then the President basically 0:13:05.240 --> 0:13:08.520 supported that view. And that's the big adjustment thing for 0:13:08.600 --> 0:13:12.560 the markets. Okay, not not the economy, not jobs, not confidence, 0:13:12.559 --> 0:13:14.320 but the markets. And the problem is we're such a 0:13:14.360 --> 0:13:17.800 financialized economy now that the market's hard to the economy, and 0:13:17.800 --> 0:13:20.319 that's really weighing on consumer sentiment. 0:13:20.200 --> 0:13:22.480 My credit. See you, I remember that morning very early 0:13:22.520 --> 0:13:23.880 on this year and you came in and you said, 0:13:23.880 --> 0:13:26.480 he's not talking about the market. He's not talking about 0:13:26.480 --> 0:13:29.080 the market, and he's continued to ignore the stump market. 0:13:29.120 --> 0:13:31.160 The focus that we've had is main Street of a 0:13:31.160 --> 0:13:33.000 wolf Street, and that has a shift and a second 0:13:33.080 --> 0:13:34.800 term right ative to the first time. 0:13:34.880 --> 0:13:36.520 That's the term I was going to use Main Street 0:13:36.559 --> 0:13:38.240 of a Wall Street, because it's the term the Treasury 0:13:38.280 --> 0:13:41.480 secretary he has used time and time again. He sat 0:13:41.520 --> 0:13:43.439 in a room at the Economic Club of New York 0:13:43.520 --> 0:13:45.240 just a few weeks ago and said, Wall Street has 0:13:45.240 --> 0:13:45.959 done very well. 0:13:46.160 --> 0:13:46.960 I was one of you. 0:13:47.320 --> 0:13:50.920 Our focus is squarely on mainstream and making sure everyday 0:13:50.960 --> 0:13:54.240 Americans are doing better, which means bringing jobs back to 0:13:54.320 --> 0:13:55.480 the US heartland. 0:13:55.559 --> 0:13:56.800 Yeah. I want to add something here. 0:13:56.840 --> 0:14:00.480 I think that I think people weren't aware of Trump's 0:14:00.520 --> 0:14:03.360 first term. We had a massive slack in the economy. 0:14:03.400 --> 0:14:05.920 We were coming off a period of secular stagnation. So 0:14:06.120 --> 0:14:09.000 you know, reflationary policy, right, which is what Trump came 0:14:09.040 --> 0:14:10.679 in with the first time, made a lot of sense 0:14:10.720 --> 0:14:12.360 and we were very bullish on that at the time. 0:14:12.679 --> 0:14:14.880 This time around, we came in with no slack. We 0:14:14.920 --> 0:14:17.520 have a negative output gap. Okay, So it's just a 0:14:17.600 --> 0:14:20.680 very different setup. Even if they wanted to be pro growth, 0:14:20.760 --> 0:14:23.400 they really can't, which is why I think they're focused 0:14:23.440 --> 0:14:25.840 on the bond market back in Yells as opposed to 0:14:25.960 --> 0:14:28.360 the stock market and to me. That fits neatly with 0:14:28.600 --> 0:14:31.360 the setup that we had, had nothing to do with 0:14:31.360 --> 0:14:31.760 the election. 0:14:32.040 --> 0:14:33.160 That's just a setup that we're in. 0:14:33.480 --> 0:14:35.760 Mike Clinic has always got to catch up. Appreciate it. 0:14:35.760 --> 0:14:37.480 Mike Wilson, that of Mark and Stanley