WEBVTT - US Consumer Confidence Drops by Most Since 2021

0:00:02.720 --> 0:00:10.520
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. You're listening to the

0:00:10.560 --> 0:00:14.480
<v Speaker 1>Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

0:00:14.560 --> 0:00:17.840
<v Speaker 1>Eastern on Apple Corplay and Android Auto with the Bloomberg

0:00:17.880 --> 0:00:21.000
<v Speaker 1>Business App. Listen on demand wherever you get your podcasts,

0:00:21.320 --> 0:00:23.040
<v Speaker 1>or watch us live on YouTube.

0:00:23.720 --> 0:00:26.320
<v Speaker 2>Alex deal At, Paul Sweeny, John Tucker, this is Bloomberg

0:00:26.360 --> 0:00:28.280
<v Speaker 2>Intelligence Radio. I want to get back to this data

0:00:28.320 --> 0:00:30.200
<v Speaker 2>because it is moving the bond market. In particular, the

0:00:30.240 --> 0:00:32.880
<v Speaker 2>ten year yields now down by full ten basis points,

0:00:32.960 --> 0:00:35.560
<v Speaker 2>kind of encroaching on the two hundred day moving average.

0:00:35.680 --> 0:00:38.479
<v Speaker 2>All that consumer confidence data following the most since August

0:00:38.479 --> 0:00:42.120
<v Speaker 2>of twenty twenty one, joining us now as Stefani Guie Schard,

0:00:42.120 --> 0:00:46.199
<v Speaker 2>a senior economist at the Conference Board, what led this

0:00:46.320 --> 0:00:47.440
<v Speaker 2>decline in confidence?

0:00:49.040 --> 0:00:53.320
<v Speaker 3>So, first, this decline of confidence was broad based across

0:00:53.320 --> 0:00:57.520
<v Speaker 3>income and edge groups, and it was ready driven by

0:00:58.240 --> 0:01:03.880
<v Speaker 3>a return to pasimes in terms of expectations for future

0:01:04.800 --> 0:01:06.880
<v Speaker 3>business condition and future employment.

0:01:07.920 --> 0:01:10.759
<v Speaker 4>Stephanie, it seems like when we had the election, there

0:01:10.840 --> 0:01:14.200
<v Speaker 4>was this burst of optimism across the number of fronts,

0:01:14.200 --> 0:01:18.040
<v Speaker 4>including the economic front, that perhaps the Trump administration would

0:01:18.080 --> 0:01:22.399
<v Speaker 4>be very pro business, pro growth, less regulation, lower taxes,

0:01:22.440 --> 0:01:24.960
<v Speaker 4>all that kind of the data kind of suggests that

0:01:24.959 --> 0:01:26.440
<v Speaker 4>that is fading a little bit.

0:01:26.480 --> 0:01:28.920
<v Speaker 5>Is that Is that how you interpret a data point

0:01:28.959 --> 0:01:29.160
<v Speaker 5>like this?

0:01:30.440 --> 0:01:34.600
<v Speaker 3>So I think what you were mentioning before was reflected

0:01:34.720 --> 0:01:39.279
<v Speaker 3>in our CEO Confidence Index that search over the last quarter.

0:01:40.680 --> 0:01:44.800
<v Speaker 3>So we published this last week. In terms of consumers,

0:01:44.800 --> 0:01:47.760
<v Speaker 3>we are really focused on the short term, on what's

0:01:47.800 --> 0:01:52.160
<v Speaker 3>happening right now, to inflation, to the job market. We

0:01:52.280 --> 0:01:55.280
<v Speaker 3>saw some increase in the price of some key stapers

0:01:55.280 --> 0:01:58.360
<v Speaker 3>for consumers, like the price of X, and this is

0:01:58.400 --> 0:02:01.560
<v Speaker 3>really affecting their mood and how they think about the economy.

0:02:03.560 --> 0:02:06.360
<v Speaker 2>Is this data bifurcated in terms of party lines, because

0:02:06.480 --> 0:02:09.160
<v Speaker 2>we typically see, say in the Umish surveys, the Republicans

0:02:09.200 --> 0:02:13.120
<v Speaker 2>feeling good, Democrats feeling bad, particularly well under President Trump.

0:02:14.520 --> 0:02:17.520
<v Speaker 3>Yeah, so that's still the case. I mean, Republicans are

0:02:17.560 --> 0:02:20.480
<v Speaker 3>feeling much better than Democrats. But what we saw this

0:02:20.680 --> 0:02:27.120
<v Speaker 3>month is a decline across the board, strong decline for

0:02:27.560 --> 0:02:32.680
<v Speaker 3>independents and Democrat consumers, and a slight decline also for Republicans.

0:02:33.480 --> 0:02:35.600
<v Speaker 5>Stephanie, thank you so much for joining us. Really appreciate it.

0:02:35.600 --> 0:02:39.799
<v Speaker 4>Stephanie Gisha Senior Commerce for the Conference Board. Joining us

0:02:39.960 --> 0:02:42.720
<v Speaker 4>from New York via zoom.

0:02:43.080 --> 0:02:46.760
<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

0:02:46.840 --> 0:02:49.960
<v Speaker 1>weekdays at ten am Eastern on Apple Coarclay, and Android

0:02:49.960 --> 0:02:53.240
<v Speaker 1>Otto with the Bloomberg Business App. Listen on demand wherever

0:02:53.320 --> 0:02:56.440
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:02:57.040 --> 0:02:59.400
<v Speaker 2>We bring you all the top news in business, economics

0:02:59.400 --> 0:03:02.239
<v Speaker 2>and finance, broadcasting to live from our interactive broker studio

0:03:02.320 --> 0:03:05.000
<v Speaker 2>right here in midtown Manhattan. Just taking a look care

0:03:05.040 --> 0:03:06.799
<v Speaker 2>at the markets. As John Tucker was just talking about,

0:03:06.800 --> 0:03:08.519
<v Speaker 2>we're around the loads of the session. The NASDAG is

0:03:08.520 --> 0:03:10.359
<v Speaker 2>now out by almost full two percentage points, the S

0:03:10.400 --> 0:03:12.919
<v Speaker 2>and P off by one percent. The semis are also

0:03:12.960 --> 0:03:15.120
<v Speaker 2>getting hit quite hard. But really the rollover picked up

0:03:15.120 --> 0:03:17.840
<v Speaker 2>a little bit of steam after that. US consumer confidence

0:03:17.880 --> 0:03:20.239
<v Speaker 2>that have fell the most since August of twenty twenty one.

0:03:20.360 --> 0:03:24.040
<v Speaker 2>Carolshlife is chief investment Officer at BIMO Family Office and

0:03:24.200 --> 0:03:26.320
<v Speaker 2>joins US now. Carol, I know you look longer term,

0:03:26.840 --> 0:03:28.680
<v Speaker 2>but what do you make of that market action we've

0:03:28.720 --> 0:03:31.000
<v Speaker 2>seen over the last three days. It feels like the

0:03:31.040 --> 0:03:33.280
<v Speaker 2>buy the dip is sort of losing some steam here.

0:03:34.440 --> 0:03:37.600
<v Speaker 6>Well, maybe by the dip is But it's important to

0:03:37.600 --> 0:03:40.000
<v Speaker 6>remember too, we hit all time highs a week ago,

0:03:40.640 --> 0:03:44.200
<v Speaker 6>so and markets have gone a very long period of

0:03:44.240 --> 0:03:48.240
<v Speaker 6>time without the normal level of volatility that you'd see.

0:03:48.280 --> 0:03:50.440
<v Speaker 6>You would expect a five to ten percent kind of

0:03:50.440 --> 0:03:53.640
<v Speaker 6>pullback in the normal range of things. We haven't really

0:03:53.760 --> 0:03:57.480
<v Speaker 6>seen that, and so for markets to come a bit

0:03:57.600 --> 0:04:00.640
<v Speaker 6>off that US exceptionalism story. And look at there are

0:04:00.680 --> 0:04:03.560
<v Speaker 6>a lot of moving parts going in the economy right now,

0:04:03.960 --> 0:04:07.720
<v Speaker 6>but consumer confidence, business confidence, some of that stuff is

0:04:07.720 --> 0:04:11.200
<v Speaker 6>starting to waiver. We came off of the elections with

0:04:11.240 --> 0:04:15.240
<v Speaker 6>a lot of exuberance in both places, and it's important

0:04:15.240 --> 0:04:18.160
<v Speaker 6>to look at those numbers and realize that people are

0:04:18.200 --> 0:04:21.520
<v Speaker 6>just kind of like it's been an awful, big barrage

0:04:21.520 --> 0:04:23.919
<v Speaker 6>of news in the last forty five days, and so

0:04:24.080 --> 0:04:26.960
<v Speaker 6>taking a step back to take a breath and process

0:04:27.000 --> 0:04:28.280
<v Speaker 6>some of that is pretty normal.

0:04:28.760 --> 0:04:31.880
<v Speaker 4>So, Karl, I know you folks over there at BIMO

0:04:32.160 --> 0:04:35.760
<v Speaker 4>Family Office take a longer term view here. But putting

0:04:35.760 --> 0:04:38.120
<v Speaker 4>in the context that we've had investors in twenty three

0:04:38.160 --> 0:04:40.840
<v Speaker 4>and twenty four had really really really good equity returns

0:04:40.880 --> 0:04:44.160
<v Speaker 4>north of twenty percent, how do you kind of reset

0:04:44.200 --> 0:04:46.600
<v Speaker 4>here for twenty twenty five. What are the conversations you're

0:04:46.600 --> 0:04:48.320
<v Speaker 4>having most often with your clients.

0:04:48.760 --> 0:04:50.760
<v Speaker 6>Well, I think a piece of it too is to

0:04:50.839 --> 0:04:54.760
<v Speaker 6>realize that having balanced in the portfolio and having balanced

0:04:54.760 --> 0:04:58.440
<v Speaker 6>portfolios didn't work in twenty two, but it definitely has

0:04:58.560 --> 0:05:00.960
<v Speaker 6>worked some in twenty three and twenty four. And so

0:05:01.520 --> 0:05:04.719
<v Speaker 6>having some high quality fixed income in the portfolio being

0:05:04.760 --> 0:05:08.120
<v Speaker 6>willing to take some trims in there instead and in

0:05:08.440 --> 0:05:11.760
<v Speaker 6>cash that's fielding four and a half five five percent

0:05:12.080 --> 0:05:14.640
<v Speaker 6>is a pretty nice way to balance some of this

0:05:14.800 --> 0:05:17.400
<v Speaker 6>off in the short run. Now, not trying to time

0:05:17.440 --> 0:05:18.880
<v Speaker 6>it all the way in or all the way out,

0:05:18.920 --> 0:05:21.680
<v Speaker 6>but there is an ability to be able to have

0:05:21.800 --> 0:05:24.720
<v Speaker 6>some of that dry powder, if you will, on the sidelines.

0:05:24.800 --> 0:05:27.400
<v Speaker 6>And we wouldn't be alone because clearly Warren Buffett has

0:05:27.440 --> 0:05:28.760
<v Speaker 6>a lot of dry powder as well.

0:05:28.960 --> 0:05:31.680
<v Speaker 7>Oh yeah, it was eleven billion an interest in funny

0:05:31.680 --> 0:05:32.000
<v Speaker 7>market for.

0:05:34.279 --> 0:05:34.720
<v Speaker 5>Sitting there.

0:05:34.760 --> 0:05:38.120
<v Speaker 7>Yeah, I'll take that. What we have seen though, yeah, right.

0:05:38.200 --> 0:05:41.120
<v Speaker 2>Is money kind of flows starting to move out of

0:05:41.160 --> 0:05:43.039
<v Speaker 2>the US and into Europe. Do you think that that

0:05:43.200 --> 0:05:44.919
<v Speaker 2>actually is a trend that had legs?

0:05:45.560 --> 0:05:48.720
<v Speaker 6>Yeah, we do think that You've got that. You know,

0:05:48.880 --> 0:05:53.119
<v Speaker 6>you've had a lot of conversation around Trump tariff's notwithstanding

0:05:53.200 --> 0:05:57.719
<v Speaker 6>that there is an appreciation for Chairman Chief, for example,

0:05:57.920 --> 0:06:01.320
<v Speaker 6>and there's a suspicion that all the tariff talk is

0:06:01.360 --> 0:06:03.240
<v Speaker 6>because he wants to cut a deal there. So we

0:06:03.279 --> 0:06:06.440
<v Speaker 6>do suspect that you've got a lot going on. And

0:06:06.480 --> 0:06:09.359
<v Speaker 6>it's interesting because I saw some stats yesterday that talked

0:06:09.400 --> 0:06:14.279
<v Speaker 6>about the performance in ETFs since inauguration day, and when

0:06:14.279 --> 0:06:16.640
<v Speaker 6>you look at that, the US is flat, China's up

0:06:16.680 --> 0:06:20.520
<v Speaker 6>close to twenty percent, And so you've got a lot

0:06:20.520 --> 0:06:24.359
<v Speaker 6>of different interesting things going on there. And we have

0:06:24.560 --> 0:06:29.880
<v Speaker 6>recently just actually taken a country position in China specific

0:06:30.320 --> 0:06:32.720
<v Speaker 6>as well as the Japan specific one that we've had

0:06:32.760 --> 0:06:35.480
<v Speaker 6>on from a house view standpoint for a very long

0:06:35.520 --> 0:06:36.239
<v Speaker 6>period of time.

0:06:36.400 --> 0:06:38.479
<v Speaker 4>Well, talk to us about that China call, because we

0:06:38.600 --> 0:06:41.080
<v Speaker 4>just had a segment we were talking with Bloomberg economists

0:06:41.120 --> 0:06:44.440
<v Speaker 4>just about the tariffs and the trade situation with China.

0:06:44.920 --> 0:06:47.000
<v Speaker 4>So what is your view on China these days?

0:06:47.520 --> 0:06:49.920
<v Speaker 6>Well, I think another piece of it is is when

0:06:49.920 --> 0:06:52.880
<v Speaker 6>you look at the technology leadership that they've gotten, not

0:06:53.080 --> 0:06:56.680
<v Speaker 6>just deepseek, but you go back to twenty fifteen when

0:06:56.720 --> 0:07:00.520
<v Speaker 6>they first initiated the China twenty twenty five plan industries

0:07:00.560 --> 0:07:03.600
<v Speaker 6>they wanted to own and the ten years they've had

0:07:03.640 --> 0:07:06.640
<v Speaker 6>to really focus on them. There's a lot of technological

0:07:06.800 --> 0:07:10.880
<v Speaker 6>innovation and work around and the more we restrict advanced

0:07:10.880 --> 0:07:13.360
<v Speaker 6>technology from them, the more they try to figure out

0:07:13.360 --> 0:07:16.560
<v Speaker 6>how to make it work. And so between that and

0:07:16.600 --> 0:07:19.080
<v Speaker 6>the beaten up valuations, not just in China but in

0:07:19.160 --> 0:07:23.520
<v Speaker 6>Southeast Asia in particular, there's a lot of interesting things

0:07:23.600 --> 0:07:25.960
<v Speaker 6>going on there from trying to balance off the world

0:07:26.120 --> 0:07:30.760
<v Speaker 6>and it's always been a challenge. We've always led with,

0:07:30.960 --> 0:07:34.320
<v Speaker 6>if you will, with globally diversified portfolios, but that's been

0:07:34.320 --> 0:07:37.320
<v Speaker 6>a really hard argument to make in the last few years,

0:07:37.440 --> 0:07:43.320
<v Speaker 6>as as the US markets have so vastly outperformed so

0:07:43.400 --> 0:07:46.000
<v Speaker 6>many others. But we think you're seeing a broadening out

0:07:46.040 --> 0:07:49.680
<v Speaker 6>of that. So having balanced portfolios. And the key challenge

0:07:49.720 --> 0:07:52.800
<v Speaker 6>is for long term investors is never knowing exactly when

0:07:52.840 --> 0:07:55.440
<v Speaker 6>those when those non US markets are.

0:07:55.320 --> 0:07:56.360
<v Speaker 5>Going to move interesting.

0:07:56.360 --> 0:07:58.000
<v Speaker 4>All right, Kenl, thank you so much for a few

0:07:58.000 --> 0:08:00.040
<v Speaker 4>minutes your time. We really appreciate a couch life. The

0:08:00.080 --> 0:08:02.960
<v Speaker 4>Chief Investment Officer BIMO Family Office.

0:08:03.000 --> 0:08:04.280
<v Speaker 5>Here.

0:08:04.960 --> 0:08:08.640
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us Live

0:08:08.720 --> 0:08:12.239
<v Speaker 1>weekdays at ten am Eastern on Applecarclay, and Android Auto

0:08:12.240 --> 0:08:15.280
<v Speaker 1>with the Bloomberg Business app. Listen on demand wherever you

0:08:15.320 --> 0:08:18.679
<v Speaker 1>get your podcasts, or watch us live on YouTube.

0:08:18.880 --> 0:08:22.200
<v Speaker 4>One of the other big global economic issues out there

0:08:22.720 --> 0:08:27.040
<v Speaker 4>for global trade is the US relationship with China. It

0:08:27.120 --> 0:08:30.600
<v Speaker 4>got tough under Trump's first administration, President Biden kind of

0:08:30.840 --> 0:08:33.800
<v Speaker 4>keeping some of that rhetoric up as well, and now

0:08:33.920 --> 0:08:36.160
<v Speaker 4>the second Trump administration trying to take up another level.

0:08:36.200 --> 0:08:37.400
<v Speaker 4>So we want to get a sense of kind of

0:08:37.400 --> 0:08:40.679
<v Speaker 4>where that this may go. And there's no one better

0:08:40.720 --> 0:08:42.960
<v Speaker 4>to speak to than Tom Orlick. He's a senior economist.

0:08:43.040 --> 0:08:46.640
<v Speaker 4>I mean, he is the Bloomberg Economics chief economist, lived

0:08:46.640 --> 0:08:48.720
<v Speaker 4>and worked in Beijing for many years, so we really

0:08:48.720 --> 0:08:52.720
<v Speaker 4>really understand what's going on over there. Tom, give us

0:08:52.720 --> 0:08:54.320
<v Speaker 4>a sense of kind of how you think the second

0:08:54.360 --> 0:08:58.559
<v Speaker 4>Trump administration is going to approach China and maybe how

0:08:58.640 --> 0:08:59.680
<v Speaker 4>China will react.

0:09:01.480 --> 0:09:04.280
<v Speaker 8>Well, it's great to be here, Paul. So I think

0:09:04.320 --> 0:09:06.440
<v Speaker 8>it's interesting. I think there's going to be two rival

0:09:06.520 --> 0:09:09.680
<v Speaker 8>groups who are kind of jockeying for position in terms

0:09:09.720 --> 0:09:15.120
<v Speaker 8>of shaping Trump's second term China policy. The first group, well,

0:09:15.120 --> 0:09:18.959
<v Speaker 8>that's the China Hawks. That's the folks who think China's

0:09:19.000 --> 0:09:22.280
<v Speaker 8>catching up with the US way too fast. It's playing

0:09:22.320 --> 0:09:24.840
<v Speaker 8>fast and loose with the rules on global trade, on

0:09:24.880 --> 0:09:28.320
<v Speaker 8>intellectual property, and the US needs to take a really

0:09:28.400 --> 0:09:32.920
<v Speaker 8>really strict stand on this. And the second group, and

0:09:33.000 --> 0:09:36.600
<v Speaker 8>you saw them on stage at the inauguration, well that's

0:09:36.640 --> 0:09:40.600
<v Speaker 8>the tech titans. It's folks like Tim Cook who have

0:09:41.040 --> 0:09:43.559
<v Speaker 8>the entire supply chain or a substantial part of their

0:09:43.559 --> 0:09:49.640
<v Speaker 8>supply chain located in China. It's folks like Nvidia who

0:09:50.679 --> 0:09:55.000
<v Speaker 8>have a huge part of their business depending on China's

0:09:55.080 --> 0:09:59.680
<v Speaker 8>electronics supply chain. So of course that group would very

0:09:59.760 --> 0:10:04.160
<v Speaker 8>much like to see something which looks more predictable, more stable,

0:10:04.520 --> 0:10:08.680
<v Speaker 8>more open in terms of US China relations. Early days,

0:10:09.280 --> 0:10:13.280
<v Speaker 8>but we've got some reporting from Bloomberg News saying that

0:10:13.679 --> 0:10:16.960
<v Speaker 8>Trump officials are speaking with the Netherlands and speaking with

0:10:17.240 --> 0:10:23.080
<v Speaker 8>Japan about further toughening controls on China's access to semiconductors.

0:10:23.600 --> 0:10:26.640
<v Speaker 8>So what that suggests is that the China Hawks, at

0:10:26.720 --> 0:10:29.040
<v Speaker 8>least for now, are trying to set the agenda.

0:10:30.400 --> 0:10:32.480
<v Speaker 2>So based on that, we're taking a look at the

0:10:32.480 --> 0:10:35.400
<v Speaker 2>socks INDECKS semi index down over one and a half percent.

0:10:35.440 --> 0:10:37.120
<v Speaker 2>So let's just go with the idea that we'll see

0:10:37.559 --> 0:10:39.080
<v Speaker 2>stricter curbs on chips.

0:10:39.440 --> 0:10:41.599
<v Speaker 7>Will it work? I mean, we saw what happened with

0:10:41.640 --> 0:10:42.760
<v Speaker 7>deep seek for example.

0:10:44.200 --> 0:10:48.600
<v Speaker 8>Yeah, it's a great point, Alex. So I think if

0:10:48.640 --> 0:10:51.040
<v Speaker 8>you were speaking with one of the folks that did

0:10:51.080 --> 0:10:55.040
<v Speaker 8>the export controls in Biden's first term, they'd probably make

0:10:55.080 --> 0:10:59.080
<v Speaker 8>a couple of points. So the first is that the

0:10:59.080 --> 0:11:03.600
<v Speaker 8>first round of export controls, the Biden administration told everyone

0:11:03.679 --> 0:11:06.600
<v Speaker 8>about it six months before it came into force, right,

0:11:07.200 --> 0:11:09.559
<v Speaker 8>And that's a kind of fairly obvious misstep.

0:11:09.800 --> 0:11:10.000
<v Speaker 5>Right.

0:11:10.280 --> 0:11:12.840
<v Speaker 8>If you tell China in six months time you can't

0:11:12.880 --> 0:11:16.560
<v Speaker 8>buy any advanced semiconductors, well, of course China is going

0:11:16.600 --> 0:11:22.080
<v Speaker 8>to spend six months assiduously stockpiling those advanced semiconductors. And

0:11:22.160 --> 0:11:25.760
<v Speaker 8>then the second thing I think those China hawks would

0:11:25.800 --> 0:11:29.600
<v Speaker 8>say would be, well, we always knew China was going

0:11:29.640 --> 0:11:34.160
<v Speaker 8>to catch up pretty quick on the large language models.

0:11:35.040 --> 0:11:38.200
<v Speaker 8>We knew they were only a few months behind chat GPT,

0:11:38.880 --> 0:11:42.440
<v Speaker 8>so deepseak wasn't the surprise. The export controls are really

0:11:42.480 --> 0:11:46.959
<v Speaker 8>aimed at preventing China from taking that next step towards

0:11:47.120 --> 0:11:49.320
<v Speaker 8>autonomous general intelligence.

0:11:49.840 --> 0:11:52.560
<v Speaker 4>TOM based upon your experience in China, how do you

0:11:52.720 --> 0:11:58.240
<v Speaker 4>think presidency and the Chinese government will I guess respond

0:11:58.600 --> 0:11:59.520
<v Speaker 4>and deal.

0:11:59.320 --> 0:12:00.480
<v Speaker 5>With this trumpet ininustration?

0:12:00.679 --> 0:12:04.120
<v Speaker 4>Did they understand how transactional President Trump can be and

0:12:04.160 --> 0:12:06.800
<v Speaker 4>therefore maybe there is a quote unquote deal to be

0:12:06.840 --> 0:12:10.200
<v Speaker 4>worked out to maybe just avert some of the bigger issues.

0:12:11.720 --> 0:12:16.440
<v Speaker 8>So we've had this news overnight from Bloomberg reporters on

0:12:16.520 --> 0:12:20.000
<v Speaker 8>the on the Trump team speaking with their counterparts in

0:12:20.040 --> 0:12:25.360
<v Speaker 8>the Netherlands and Tokyo. So clearly there's not nothing going

0:12:25.400 --> 0:12:29.600
<v Speaker 8>on on US China policy. At the same time, if

0:12:29.600 --> 0:12:32.120
<v Speaker 8>we think about where the kind of the major focus

0:12:32.160 --> 0:12:37.400
<v Speaker 8>of attention for Trump has been in his first few weeks, well,

0:12:39.120 --> 0:12:42.439
<v Speaker 8>it's been on Ukraine, it's been on Gaza in the

0:12:42.480 --> 0:12:46.520
<v Speaker 8>Middle East. There have been tariffs on China, certainly, but

0:12:46.559 --> 0:12:51.479
<v Speaker 8>there's also been tariff threats against Canada, tariff threats against Mexico.

0:12:52.400 --> 0:12:56.240
<v Speaker 8>So China, relative to where I think we could have been,

0:12:57.200 --> 0:13:00.000
<v Speaker 8>doesn't appear to be the kind of top of mind

0:13:00.040 --> 0:13:04.200
<v Speaker 8>gender item for the Trump administration. Now, I don't have,

0:13:04.280 --> 0:13:08.000
<v Speaker 8>you know, a hotline into China's leadership compound. I don't

0:13:08.200 --> 0:13:12.400
<v Speaker 8>I'm not privy to chi jianpings inner thoughts. But my

0:13:12.520 --> 0:13:17.600
<v Speaker 8>guests would be that's kind of good news from their perspective, right,

0:13:18.240 --> 0:13:20.800
<v Speaker 8>and they'd be pretty happy if Trump expends all of

0:13:20.840 --> 0:13:24.920
<v Speaker 8>his energy focused on Ukraine and the Middle East and

0:13:25.280 --> 0:13:29.120
<v Speaker 8>near neighbors and perhaps doesn't spend so much time thinking

0:13:29.120 --> 0:13:32.040
<v Speaker 8>about China and China's rise as a geopolitical challenger.

0:13:32.960 --> 0:13:34.280
<v Speaker 7>All right, Tom, I always appreciate it.

0:13:34.280 --> 0:13:36.440
<v Speaker 2>Thank you so much, Tom, Or like Bloomberg Economics chief

0:13:36.480 --> 0:13:39.600
<v Speaker 2>economists joining us on potential chip controls over China and

0:13:39.600 --> 0:13:41.000
<v Speaker 2>then the ramifications of that.

0:13:42.880 --> 0:13:46.559
<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

0:13:46.640 --> 0:13:49.720
<v Speaker 1>weekdays at ten am Eastern on Apple Coarclay and Android

0:13:49.720 --> 0:13:53.040
<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

0:13:53.120 --> 0:13:56.200
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:13:57.120 --> 0:13:57.920
<v Speaker 5>Steal and Paul Swinging.

0:13:57.960 --> 0:14:00.600
<v Speaker 4>We're live here on Bloomberg Interactive Broker Studio in New

0:14:00.679 --> 0:14:01.040
<v Speaker 4>York City.

0:14:01.080 --> 0:14:02.760
<v Speaker 5>We're also streaming live on YouTube.

0:14:02.920 --> 0:14:05.280
<v Speaker 4>Head over to YouTube dot com and search Bloomberg Podcast

0:14:05.360 --> 0:14:07.400
<v Speaker 4>Live and that's where you find us. Well after the

0:14:07.440 --> 0:14:11.840
<v Speaker 4>close tomorrow in Nvidia reports, and that is always a

0:14:11.960 --> 0:14:15.199
<v Speaker 4>big day for in Nvidia shareholders, I think for technology

0:14:15.280 --> 0:14:16.640
<v Speaker 4>shareholders as well, and as.

0:14:16.520 --> 0:14:17.839
<v Speaker 5>The markets overall.

0:14:18.440 --> 0:14:20.400
<v Speaker 4>Really, for the last couple of years, in Vidia has

0:14:20.440 --> 0:14:22.480
<v Speaker 4>been a market moving event. So we want to get

0:14:22.480 --> 0:14:24.520
<v Speaker 4>a little bit of your preview there, and then we're

0:14:24.520 --> 0:14:25.800
<v Speaker 4>also going to talk Hamburgers.

0:14:26.200 --> 0:14:27.720
<v Speaker 5>How we make the connection here, I don't know, but

0:14:27.760 --> 0:14:28.360
<v Speaker 5>we'll try to do it.

0:14:28.440 --> 0:14:28.880
<v Speaker 7>I like it.

0:14:29.000 --> 0:14:33.000
<v Speaker 4>Kim Farst, founder and chief investment officer Boquet Capital Partners

0:14:33.080 --> 0:14:36.320
<v Speaker 4>in Pittsburgh. So, Kim, I'd love to take advantage of

0:14:36.360 --> 0:14:40.320
<v Speaker 4>your technology, chops. What should we be looking for when

0:14:41.320 --> 0:14:42.440
<v Speaker 4>in Vidia reports tomorrow?

0:14:43.520 --> 0:14:47.400
<v Speaker 9>Sure, well, I'll say what I say for absolutely every

0:14:47.440 --> 0:14:50.480
<v Speaker 9>company who really cares what happened last quarter. I want

0:14:50.520 --> 0:14:52.120
<v Speaker 9>to know what's going to happen next quarter in the

0:14:52.200 --> 0:14:55.760
<v Speaker 9>quarter after that. And I think never has this been

0:14:55.840 --> 0:14:59.720
<v Speaker 9>more important than for a company like Nvidia. Who is

0:14:59.720 --> 0:15:03.840
<v Speaker 9>it the forefront of a very new technology that you know,

0:15:04.480 --> 0:15:07.560
<v Speaker 9>literally hundreds of billions of dollars are being thrown at.

0:15:08.000 --> 0:15:11.000
<v Speaker 9>So the question that we have is this is it

0:15:11.040 --> 0:15:13.600
<v Speaker 9>for real? Are people still going to pay up? Are

0:15:13.680 --> 0:15:19.000
<v Speaker 9>they still going to you know, build these huge data

0:15:19.040 --> 0:15:23.400
<v Speaker 9>centers to run something that we don't have a problem

0:15:23.440 --> 0:15:27.760
<v Speaker 9>that we can identify that that the money is fixing

0:15:28.440 --> 0:15:30.080
<v Speaker 9>that is the question.

0:15:30.760 --> 0:15:33.120
<v Speaker 7>And what do you think that's going to be best?

0:15:33.160 --> 0:15:35.840
<v Speaker 7>Guess yes, I.

0:15:37.400 --> 0:15:41.240
<v Speaker 9>Well for a couple of reasons. Firstly, you know, I'm

0:15:41.240 --> 0:15:46.320
<v Speaker 9>a nerd. I'm a proud nerd was I was a

0:15:46.360 --> 0:15:49.920
<v Speaker 9>software engineer in AI doing stuff with neural networks. How

0:15:50.000 --> 0:15:52.480
<v Speaker 9>lucky are we that like this all has come up

0:15:52.640 --> 0:15:58.960
<v Speaker 9>and I know about it? Okay, But anyhow, here's the problem.

0:15:59.000 --> 0:16:00.960
<v Speaker 9>The only thing that I can and see that large

0:16:01.040 --> 0:16:04.680
<v Speaker 9>language models really solve is the ability to get information

0:16:04.880 --> 0:16:09.280
<v Speaker 9>in and out from humans to computers a little bit better.

0:16:09.800 --> 0:16:12.120
<v Speaker 9>And who's going to benefit? I say, right now it

0:16:12.160 --> 0:16:15.800
<v Speaker 9>looks like search that people are using it to search,

0:16:15.920 --> 0:16:19.120
<v Speaker 9>they love it, and all these other kind of higher

0:16:19.280 --> 0:16:23.160
<v Speaker 9>order smarter things we're not really able to pull off, like,

0:16:23.680 --> 0:16:29.720
<v Speaker 9>you know, take care of my travel to go to Sydney, Australia,

0:16:30.040 --> 0:16:32.360
<v Speaker 9>right and here are the dates and get me the

0:16:32.480 --> 0:16:36.920
<v Speaker 9>cheapest fastest airline there. It can't do that, not yet,

0:16:37.160 --> 0:16:39.960
<v Speaker 9>maybe not ever. We don't know who cares. But right

0:16:40.000 --> 0:16:42.440
<v Speaker 9>now I think the companies that are putting money into

0:16:42.480 --> 0:16:45.800
<v Speaker 9>this are those that have some sort of search that

0:16:45.800 --> 0:16:50.080
<v Speaker 9>they're trying to maintain their market share. So Google, I'm

0:16:50.080 --> 0:16:53.520
<v Speaker 9>talking to you and to a certain extent meta right,

0:16:53.600 --> 0:16:56.680
<v Speaker 9>and Microsoft is the third one. So those people are

0:16:56.680 --> 0:16:58.840
<v Speaker 9>going to continue or those companies are going to continue

0:16:58.840 --> 0:17:02.080
<v Speaker 9>to pour money into this area for the foreseeable future.

0:17:02.200 --> 0:17:05.439
<v Speaker 4>All Right, here's the hard pivot from AI to hamburgers.

0:17:05.440 --> 0:17:09.000
<v Speaker 4>And here's my take on the hamburger business. Wendy's. I

0:17:09.000 --> 0:17:13.520
<v Speaker 4>will stack up a good old Wendy's burger against a

0:17:13.560 --> 0:17:15.560
<v Speaker 4>lot of the new ones out there, whether it's the Shakeshack,

0:17:15.600 --> 0:17:17.280
<v Speaker 4>the five Guys, all that kind of stuff that Wendy's

0:17:17.280 --> 0:17:20.760
<v Speaker 4>burger hangs in there. How about the stock here, Kim,

0:17:20.840 --> 0:17:23.320
<v Speaker 4>what do you guys think about Wendy's here?

0:17:24.240 --> 0:17:27.440
<v Speaker 9>It has not been hanging in That's the first thing, right,

0:17:27.560 --> 0:17:30.040
<v Speaker 9>New is always better. People go hey, let me try

0:17:30.040 --> 0:17:32.280
<v Speaker 9>that shake Shack, and then they're going to drop a

0:17:32.280 --> 0:17:34.480
<v Speaker 9>lot of money and go, well, that was an okay burger,

0:17:34.520 --> 0:17:37.560
<v Speaker 9>But okay, next time, maybe I want to do something different.

0:17:38.119 --> 0:17:41.000
<v Speaker 9>That's one of our theories is the growth of Shakeshack

0:17:41.240 --> 0:17:45.840
<v Speaker 9>is going to reintroduce people to a good hamburger. Like McDonald's,

0:17:45.840 --> 0:17:49.800
<v Speaker 9>has its own flavor profile. It's not like a regular

0:17:49.840 --> 0:17:52.280
<v Speaker 9>hamburger that you'd make it home and I guess Wendy's

0:17:52.280 --> 0:17:55.280
<v Speaker 9>isn't either because it's square. But we move on from that,

0:17:55.440 --> 0:18:00.320
<v Speaker 9>right anyhow, back to it now, the company's been trying

0:18:00.320 --> 0:18:04.359
<v Speaker 9>to grow in breakfast and that has impacted its earnings,

0:18:04.880 --> 0:18:07.760
<v Speaker 9>and we're looking past that, saying, hey, they've got a

0:18:07.800 --> 0:18:13.320
<v Speaker 9>good idea. They're mostly a franchise e chain. The company owns,

0:18:13.480 --> 0:18:17.800
<v Speaker 9>you know, some of the restaurants. This is a good model.

0:18:18.200 --> 0:18:20.240
<v Speaker 9>And you know, we're hanging in there thinking they have

0:18:20.280 --> 0:18:23.159
<v Speaker 9>a pretty good product and it might be time to

0:18:23.200 --> 0:18:25.120
<v Speaker 9>look at it because it's sold off recently.

0:18:25.880 --> 0:18:28.760
<v Speaker 2>So how do you pick between all the fast food guys?

0:18:28.800 --> 0:18:31.919
<v Speaker 2>It's sort of like, you know, can you own a

0:18:31.960 --> 0:18:34.000
<v Speaker 2>lot of them at this point when you have exposure

0:18:34.000 --> 0:18:36.440
<v Speaker 2>to inflation, when you have exposure to the consumer.

0:18:38.480 --> 0:18:42.200
<v Speaker 9>Well, I kind of go on my own, right, because

0:18:42.200 --> 0:18:45.000
<v Speaker 9>I'm a consumer and I'm kind of a picky I

0:18:45.080 --> 0:18:47.040
<v Speaker 9>like really high quality stuff, but I don't want to

0:18:47.080 --> 0:18:50.160
<v Speaker 9>pay a lot for it, and Wendy's kind of fits

0:18:50.200 --> 0:18:52.919
<v Speaker 9>that profile in many ways. First of all, they skew

0:18:53.040 --> 0:18:57.119
<v Speaker 9>to a higher income buyer than a lot of the

0:18:57.160 --> 0:18:59.800
<v Speaker 9>other chains, So that's something that I like. And I

0:19:00.080 --> 0:19:05.359
<v Speaker 9>also like that in any sort of consumer oriented pick

0:19:05.480 --> 0:19:08.720
<v Speaker 9>because as the I think there was news out yesterday

0:19:08.720 --> 0:19:12.120
<v Speaker 9>maybe by Bloomberg that the top ten percent is spending

0:19:12.160 --> 0:19:15.040
<v Speaker 9>more than they ever have, and they spend on things

0:19:15.119 --> 0:19:18.800
<v Speaker 9>like hamburgers, right, So we like that, we like their

0:19:18.880 --> 0:19:22.480
<v Speaker 9>salads in the summertime, they get a lot of traffic

0:19:22.520 --> 0:19:25.679
<v Speaker 9>away from Panera again because it's a value option and

0:19:25.720 --> 0:19:28.800
<v Speaker 9>it's convenient. So that's kind of my view. I don't

0:19:28.800 --> 0:19:30.800
<v Speaker 9>want to own the whole lot of them. I want

0:19:30.840 --> 0:19:34.080
<v Speaker 9>to own companies that are poised to beat the competition.

0:19:34.640 --> 0:19:35.080
<v Speaker 5>How about them?

0:19:35.119 --> 0:19:37.440
<v Speaker 4>I think, how about on the cost side, the costs

0:19:37.480 --> 0:19:39.879
<v Speaker 4>of beef. I know that's been an issue for cost of.

0:19:39.960 --> 0:19:43.840
<v Speaker 9>Beef is And here's the problem. They're fresh nut frozen,

0:19:43.880 --> 0:19:46.680
<v Speaker 9>so they're buying from America. They don't really have the

0:19:46.880 --> 0:19:49.120
<v Speaker 9>luxury that a lot of the other burger chains who

0:19:49.119 --> 0:19:53.159
<v Speaker 9>are buying from South America and Australia. So that is

0:19:53.200 --> 0:19:55.199
<v Speaker 9>an issue and that's something that we're all going to

0:19:55.240 --> 0:19:58.280
<v Speaker 9>have to suffer through for a little while here. But hey,

0:19:58.320 --> 0:19:59.880
<v Speaker 9>I hear they're these things called.

0:19:59.720 --> 0:20:03.879
<v Speaker 7>Tear Yes truth. I hate Kim always good to catch up.

0:20:03.920 --> 0:20:06.719
<v Speaker 2>Appreciate you at Kim forrest overbook Capital partners.

0:20:06.760 --> 0:20:07.640
<v Speaker 7>Thank you very much.

0:20:08.280 --> 0:20:12.960
<v Speaker 1>This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

0:20:13.160 --> 0:20:17.120
<v Speaker 1>and anywhere else you get your podcasts. Listen live each weekday,

0:20:17.359 --> 0:20:20.639
<v Speaker 1>ten am to noon Eastern on Bloomberg dot com, the

0:20:20.720 --> 0:20:24.560
<v Speaker 1>iHeartRadio app, tune In, and the Bloomberg Business app. You

0:20:24.600 --> 0:20:27.879
<v Speaker 1>can also watch us live every weekday on YouTube and

0:20:28.119 --> 0:20:30.880
<v Speaker 1>always on the Bloomberg terminal