1
00:00:01,400 --> 00:00:04,120
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

2
00:00:04,120 --> 00:00:06,240
Speaker 1: with my co host of Bonnie Quinn. Every business day

3
00:00:06,240 --> 00:00:10,360
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

4
00:00:10,400 --> 00:00:13,600
Speaker 1: along with essential market moving news. Find the Bloomberg Markets

5
00:00:13,600 --> 00:00:17,000
Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,

6
00:00:17,000 --> 00:00:19,880
Speaker 1: and on Bloomberg dot com. If we're gonna take a

7
00:00:19,880 --> 00:00:21,799
Speaker 1: look at the bond markets, we're gonna do that with

8
00:00:21,920 --> 00:00:26,800
Speaker 1: Eric Stein, chief investment officer for fixed income at Eaton Vance. Eric,

9
00:00:26,800 --> 00:00:28,600
Speaker 1: thanks so much for joining us here. We had some

10
00:00:28,880 --> 00:00:32,440
Speaker 1: pretty big political news that we're digesting today. It appears

11
00:00:32,760 --> 00:00:37,159
Speaker 1: it's not already called, but it appears that the Democrats

12
00:00:37,320 --> 00:00:42,240
Speaker 1: will win both seats uh Senate seats in Georgia. Um,

13
00:00:42,280 --> 00:00:45,239
Speaker 1: what does that mean do you think for markets? We're

14
00:00:45,240 --> 00:00:48,120
Speaker 1: seeing a big move in the treasury market here with

15
00:00:48,120 --> 00:00:52,440
Speaker 1: a tenure trading above one, you know, above one percent,

16
00:00:52,520 --> 00:00:54,880
Speaker 1: close to one point zero five percent. What's it mean

17
00:00:54,920 --> 00:00:56,480
Speaker 1: to you as it relates to the bond markets and

18
00:00:56,480 --> 00:01:00,880
Speaker 1: a Democrat in the White House and perhaps controlling the Senate. Yeah, well,

19
00:01:00,960 --> 00:01:02,800
Speaker 1: first off, thanks thanks for having me on. I guess

20
00:01:02,840 --> 00:01:06,040
Speaker 1: you know, before the presidential election and the congressional election.

21
00:01:06,080 --> 00:01:07,880
Speaker 1: We had an early November, everyone was talking about a

22
00:01:07,880 --> 00:01:09,800
Speaker 1: blue wave and it didn't happen. And now it's you know,

23
00:01:09,840 --> 00:01:11,840
Speaker 1: I'd say we're kind of having a blue wave light

24
00:01:11,959 --> 00:01:14,080
Speaker 1: if you will. Uh So, certainly, you know, if you

25
00:01:14,080 --> 00:01:16,880
Speaker 1: look at the market reaction today, the selloff and Treasury

26
00:01:17,000 --> 00:01:19,800
Speaker 1: is the steepening of the yield curve, sectors like the

27
00:01:19,840 --> 00:01:22,840
Speaker 1: banking sector, you know, outperforming. I think, you know, markets

28
00:01:22,840 --> 00:01:26,520
Speaker 1: are focused on the potential for more fiscal stimulus coming

29
00:01:26,560 --> 00:01:29,360
Speaker 1: from the Democrats, you know, assuming that that the second

30
00:01:29,400 --> 00:01:32,160
Speaker 1: race you know, holds and off Off wins with thet

31
00:01:32,240 --> 00:01:35,520
Speaker 1: split and Kemla Harris having the tie breaking vote control

32
00:01:35,520 --> 00:01:37,240
Speaker 1: of the Senate. And you know, to me, the real

33
00:01:37,319 --> 00:01:40,640
Speaker 1: question is, you know, how much should markets and focus

34
00:01:40,680 --> 00:01:43,520
Speaker 1: on the fiscal stimulus versus the potential for higher taxes

35
00:01:43,720 --> 00:01:46,919
Speaker 1: and more regulation. And my prior would be it's probably

36
00:01:46,920 --> 00:01:48,680
Speaker 1: gonna be more of the fiscal stimulus, which is more

37
00:01:48,720 --> 00:01:51,560
Speaker 1: of a positive than the regulation and tax increases, just

38
00:01:51,600 --> 00:01:54,400
Speaker 1: because of the razor thin margin UH in both the

39
00:01:54,400 --> 00:01:57,040
Speaker 1: House and UH and certainly in the Senate. But you know,

40
00:01:57,080 --> 00:01:59,160
Speaker 1: I think that's what markets are focused on. That's why

41
00:01:59,160 --> 00:02:01,120
Speaker 1: we have the steeping of the yield curve, you know

42
00:02:01,240 --> 00:02:03,600
Speaker 1: right now. So what's the next move for the yield curve?

43
00:02:03,720 --> 00:02:05,560
Speaker 1: Would be time to load the vote on ten years

44
00:02:05,560 --> 00:02:09,280
Speaker 1: and beyond or or look, I know to me, this

45
00:02:09,360 --> 00:02:11,400
Speaker 1: is where you know, what the FED does is going

46
00:02:11,440 --> 00:02:13,720
Speaker 1: to be particularly interesting. So if you think about the

47
00:02:14,040 --> 00:02:15,760
Speaker 1: FED policy, and we saw it, you know, over the

48
00:02:15,800 --> 00:02:18,600
Speaker 1: summer with the virtual Jackson hole and then more comments

49
00:02:18,600 --> 00:02:20,680
Speaker 1: from Powell and the rest of the FOMC, if this

50
00:02:20,760 --> 00:02:24,359
Speaker 1: average inflation targeting concept where the Fed, you know, it

51
00:02:24,560 --> 00:02:27,480
Speaker 1: is kind of committed to not let bygones be bygones.

52
00:02:27,520 --> 00:02:29,960
Speaker 1: So if they're missing to the downside, which they have

53
00:02:30,040 --> 00:02:32,440
Speaker 1: been on their inflation target, to run easy policy and

54
00:02:32,480 --> 00:02:35,600
Speaker 1: so you know, I think we're assuming all holds with

55
00:02:35,600 --> 00:02:38,400
Speaker 1: with the vaccine rollout and we get this cyclical recovery

56
00:02:38,400 --> 00:02:40,720
Speaker 1: that I think very likely will happen, but you don't

57
00:02:40,720 --> 00:02:43,000
Speaker 1: know what until it really happens and you get more

58
00:02:43,000 --> 00:02:46,120
Speaker 1: fiscal stimulus, you'll have some pressure on the back end

59
00:02:46,560 --> 00:02:48,520
Speaker 1: of the curve, and I think the FED will be

60
00:02:48,560 --> 00:02:53,079
Speaker 1: okay with that if it's because of recoveries, recovering the

61
00:02:53,120 --> 00:02:56,280
Speaker 1: economy and because higher inflation, So real rates aren't going

62
00:02:56,360 --> 00:02:58,200
Speaker 1: up a lot. Where I think the FED might step

63
00:02:58,200 --> 00:03:01,520
Speaker 1: in and buy more bonds, you know, would be if

64
00:03:01,600 --> 00:03:04,080
Speaker 1: real rates are going up and if financial conditions are

65
00:03:04,080 --> 00:03:06,600
Speaker 1: getting tighter preemptively in their view. So I think it's

66
00:03:06,600 --> 00:03:09,720
Speaker 1: gonna be really important to watch the Fed's reaction going

67
00:03:09,760 --> 00:03:12,880
Speaker 1: forward and how that interacts with both fiscal policy and

68
00:03:13,240 --> 00:03:15,560
Speaker 1: you know, hopefully a cyclical recovery you know, post the

69
00:03:15,639 --> 00:03:18,760
Speaker 1: vaccine rollout. So ered, what what is your view on

70
00:03:18,919 --> 00:03:21,880
Speaker 1: inflation here? We're seeing a tick up a little bit recently.

71
00:03:21,880 --> 00:03:23,160
Speaker 1: What are your what are you thinking? Is you think

72
00:03:23,200 --> 00:03:26,360
Speaker 1: about your I think there's a lot of conditions in

73
00:03:26,400 --> 00:03:29,440
Speaker 1: place for an increase in inflation. Um, you know, as

74
00:03:29,440 --> 00:03:32,040
Speaker 1: I said, you mentioned before, the whole the point of

75
00:03:32,080 --> 00:03:35,520
Speaker 1: FED policy right now, you know, the FED policy over

76
00:03:35,560 --> 00:03:37,839
Speaker 1: the past you know, six months or so, as we've

77
00:03:37,840 --> 00:03:41,400
Speaker 1: had this recovery uh in markets. But obviously the economy

78
00:03:42,280 --> 00:03:44,400
Speaker 1: things are a little better, but still mostly on hold

79
00:03:44,440 --> 00:03:47,240
Speaker 1: with with covid um. The Feds you know, been at

80
00:03:47,320 --> 00:03:49,240
Speaker 1: zero and not doing much, which isn't you know and

81
00:03:49,400 --> 00:03:52,080
Speaker 1: say is doing so much for the economy, but it's

82
00:03:52,120 --> 00:03:54,800
Speaker 1: doing something. When the economy starts to take off. If

83
00:03:54,840 --> 00:03:57,280
Speaker 1: the FED really does keep rates at low and you know,

84
00:03:57,320 --> 00:03:59,240
Speaker 1: at zero and tries to stay behind the curve, that's

85
00:03:59,240 --> 00:04:02,920
Speaker 1: an impulse for inflation. If there's a cyclical pickup, that's

86
00:04:02,920 --> 00:04:05,920
Speaker 1: an impulse for inflation. Even you know, forgetting the FED

87
00:04:05,960 --> 00:04:08,280
Speaker 1: policy which is which is going to be easier, and

88
00:04:08,320 --> 00:04:12,000
Speaker 1: then you get fiscal and potentially more more government spending

89
00:04:12,000 --> 00:04:14,160
Speaker 1: and you see commodity prices and other things start to

90
00:04:14,160 --> 00:04:16,640
Speaker 1: go up. I think there's a lot of things lining

91
00:04:16,720 --> 00:04:19,480
Speaker 1: up to get more inflation, and we're starting to see

92
00:04:19,480 --> 00:04:23,120
Speaker 1: that priced into two various asset markets. How is the

93
00:04:23,160 --> 00:04:27,400
Speaker 1: weakening dollar index changing how you're looking at bond markets

94
00:04:27,400 --> 00:04:31,000
Speaker 1: around the world argon and where you're placing your bets. Yes,

95
00:04:31,040 --> 00:04:33,000
Speaker 1: so you know, I certainly think that you know, we

96
00:04:33,040 --> 00:04:36,480
Speaker 1: will continue to see a weakening dollar, you know from here.

97
00:04:37,160 --> 00:04:39,320
Speaker 1: You know, if you're a U. S. Dollar based investor,

98
00:04:39,720 --> 00:04:43,720
Speaker 1: it makes non non dollar assets, you know, more attractive.

99
00:04:43,800 --> 00:04:45,600
Speaker 1: So you know, I think you know, in our let's say,

100
00:04:45,720 --> 00:04:49,400
Speaker 1: advanced global macro strategy, looking for non dollar currencies going

101
00:04:49,400 --> 00:04:52,960
Speaker 1: along currencies against the the US dollar, And you know,

102
00:04:54,120 --> 00:04:58,880
Speaker 1: coronavirus is all over the world and you can't discount yeah, correct,

103
00:04:58,920 --> 00:05:01,039
Speaker 1: And you know there's there's there's there's some places that

104
00:05:01,080 --> 00:05:04,200
Speaker 1: are you know, more more attractive than than others, you know,

105
00:05:04,320 --> 00:05:06,800
Speaker 1: for for sure. Um, you know, I think of you know,

106
00:05:07,160 --> 00:05:09,960
Speaker 1: one place from both a bond and a currency perspective,

107
00:05:10,000 --> 00:05:11,920
Speaker 1: I'll say is China. And you talk about the place

108
00:05:11,960 --> 00:05:14,960
Speaker 1: that that has had the corona even the coronavirus originated there,

109
00:05:15,000 --> 00:05:17,520
Speaker 1: certainly has had it more under control. You know, you

110
00:05:17,560 --> 00:05:21,520
Speaker 1: have significantly more attractive government bond yield stuff. Then you

111
00:05:21,600 --> 00:05:23,960
Speaker 1: get in the US and frankly, you know a lot

112
00:05:23,960 --> 00:05:26,480
Speaker 1: of other places not only developed but the emerging world,

113
00:05:26,880 --> 00:05:28,719
Speaker 1: and you know, to some extent, and we'll have to

114
00:05:28,760 --> 00:05:32,599
Speaker 1: see how you know, US policy is visa vach China

115
00:05:32,720 --> 00:05:34,640
Speaker 1: with the Biden administration, I think that's you probably do

116
00:05:34,640 --> 00:05:36,720
Speaker 1: the whole whole segment on that. But I think you know,

117
00:05:36,760 --> 00:05:40,400
Speaker 1: the Chinese are okay with with running a fairly strong

118
00:05:40,600 --> 00:05:42,960
Speaker 1: uan policy. And so if you have a uh, you know,

119
00:05:43,040 --> 00:05:45,920
Speaker 1: week dollar environment, which I think we're in and we'll

120
00:05:45,920 --> 00:05:48,280
Speaker 1: continue to be in. Uh And you also have the

121
00:05:48,360 --> 00:05:51,880
Speaker 1: Chinese policymakers that are okay with the yuan getting stronger. Uh.

122
00:05:52,000 --> 00:05:54,360
Speaker 1: You know, I think being invested in Chinese government bonds

123
00:05:54,400 --> 00:05:57,520
Speaker 1: both from an interest rate perspective quite attractive, but also

124
00:05:57,560 --> 00:06:00,800
Speaker 1: from a US dollar investment perspect div I think the

125
00:06:00,880 --> 00:06:04,720
Speaker 1: Uan will will appreciate versus the US dollar. ERED love

126
00:06:04,760 --> 00:06:07,040
Speaker 1: to get your thoughts on kind of the credit quality

127
00:06:07,080 --> 00:06:10,080
Speaker 1: out there you're seeing perhaps in your portfolio. I mean, we're,

128
00:06:10,120 --> 00:06:12,200
Speaker 1: you know, ten eleven months into this pandemic and the

129
00:06:12,240 --> 00:06:15,839
Speaker 1: economic fallout. Are you starting to really see it in

130
00:06:15,960 --> 00:06:19,160
Speaker 1: credit quality? Yeah? You know, Look, look when we talk,

131
00:06:19,200 --> 00:06:21,440
Speaker 1: you know, I think of you know, eating vance fixed income.

132
00:06:21,520 --> 00:06:23,279
Speaker 1: Really it's our our bread and butter. Is our you know,

133
00:06:23,320 --> 00:06:26,280
Speaker 1: bank loan and high yield, investment grade credit or credit shop.

134
00:06:26,360 --> 00:06:28,880
Speaker 1: And you also sovereign a musicipal credit, uh, you know

135
00:06:28,960 --> 00:06:30,800
Speaker 1: as well. And you know, I certainly think in the

136
00:06:30,839 --> 00:06:32,760
Speaker 1: more leverage parts of the market and bank loans and

137
00:06:32,839 --> 00:06:35,440
Speaker 1: high yield. For sure, you've had higher default rates, you know,

138
00:06:35,480 --> 00:06:37,359
Speaker 1: the past twelve months, and then you had you know,

139
00:06:37,400 --> 00:06:40,120
Speaker 1: the previous twelve months in two thousand nineteen, But a

140
00:06:40,120 --> 00:06:42,479
Speaker 1: lot of those default rates aren't nearly as high as

141
00:06:42,640 --> 00:06:45,520
Speaker 1: as beefore. Certainly thinking about March of last year in

142
00:06:45,560 --> 00:06:47,919
Speaker 1: the kind of heart of the of the pandemic, and

143
00:06:47,960 --> 00:06:49,720
Speaker 1: we you know, we started to see recovery and more

144
00:06:49,720 --> 00:06:51,840
Speaker 1: of the COVID sensitive names, and so I think the

145
00:06:52,160 --> 00:06:56,080
Speaker 1: best thing, um, you know, for for credit markets right now,

146
00:06:56,120 --> 00:06:58,159
Speaker 1: you know, it's really two things. One is if the

147
00:06:58,160 --> 00:07:01,280
Speaker 1: economy picks up, that helps you cash flows for businesses

148
00:07:01,320 --> 00:07:03,560
Speaker 1: and it makes them um more credit worthy. But you

149
00:07:03,600 --> 00:07:05,240
Speaker 1: know the other thing we're seeing is the bond markets

150
00:07:05,240 --> 00:07:07,600
Speaker 1: are just open for issuance. I mean you get emails

151
00:07:07,720 --> 00:07:10,800
Speaker 1: record issuance, and the investment grade market kind of markets

152
00:07:10,800 --> 00:07:13,240
Speaker 1: off and off and running with you know, with lots

153
00:07:13,280 --> 00:07:16,640
Speaker 1: of issuance. And so capital markets are open. Uh. And

154
00:07:16,680 --> 00:07:20,240
Speaker 1: if companies or or sovereigns or municipalities can take advantage

155
00:07:20,240 --> 00:07:23,239
Speaker 1: of those, that kind of by construction makes them better

156
00:07:23,280 --> 00:07:26,840
Speaker 1: credits because they're they're paying relatively low interest rates and

157
00:07:27,040 --> 00:07:30,080
Speaker 1: have you know, you know, relatively good terms to issue debt.

158
00:07:30,160 --> 00:07:33,640
Speaker 1: So I think we're certainly kind of in this sweet spot, uh,

159
00:07:33,960 --> 00:07:36,320
Speaker 1: in that regards with capital markets open and with the

160
00:07:36,320 --> 00:07:41,280
Speaker 1: economy hopefully it looks like but again very vaccine dependent. Uh,

161
00:07:41,320 --> 00:07:43,720
Speaker 1: you know, about to take a cyclical increase, you know

162
00:07:43,840 --> 00:07:46,800
Speaker 1: at some point once once the rolla happens. Eric, how

163
00:07:46,840 --> 00:07:49,560
Speaker 1: disciplined have you been how much drive powder or easily

164
00:07:49,560 --> 00:07:52,720
Speaker 1: accessible powder. Let's say, do you have at your disposal

165
00:07:52,800 --> 00:07:56,000
Speaker 1: percentage wise? Yeah, there was a great question, I'd say,

166
00:07:56,040 --> 00:07:57,640
Speaker 1: you know, to me. To me, the great thing about

167
00:07:57,640 --> 00:07:59,760
Speaker 1: how we're structured to eat advance is all of our

168
00:07:59,800 --> 00:08:02,520
Speaker 1: differ and investment teams invest differently. So there's not there's

169
00:08:02,520 --> 00:08:04,920
Speaker 1: not one particular number. You know, we have multiple different

170
00:08:04,920 --> 00:08:08,120
Speaker 1: funds on multiple different teams. Um you know where where

171
00:08:08,160 --> 00:08:11,080
Speaker 1: cash is different, you know, percentages across those, So there's

172
00:08:11,080 --> 00:08:13,880
Speaker 1: not there's not one you know, perfect answer to that.

173
00:08:13,920 --> 00:08:16,160
Speaker 1: But but i'd say, you know, in general, you know,

174
00:08:16,200 --> 00:08:18,920
Speaker 1: we're a place looking for kind of relative value across

175
00:08:19,000 --> 00:08:22,200
Speaker 1: markets as opposed to just timing markets with with having

176
00:08:22,240 --> 00:08:24,280
Speaker 1: cash and and and dry powder. Although that you know,

177
00:08:24,320 --> 00:08:28,280
Speaker 1: certainly various strategy by strategy. Eric, you know, we've seen

178
00:08:28,360 --> 00:08:31,720
Speaker 1: in the equity markets a rotation trade, if you will,

179
00:08:31,840 --> 00:08:34,360
Speaker 1: from some of the tried and true high growth tech

180
00:08:34,440 --> 00:08:37,960
Speaker 1: names into some of the more cyclical areas of the market,

181
00:08:38,000 --> 00:08:41,079
Speaker 1: anticipating you know, the other side of this pandemic and

182
00:08:41,480 --> 00:08:45,000
Speaker 1: economic reopening and rebound beginning arguably some time in the

183
00:08:45,040 --> 00:08:49,240
Speaker 1: middle of this year. Have you been doing something similar

184
00:08:49,400 --> 00:08:53,000
Speaker 1: with your fixed income portfolios. Yes, so I think it's

185
00:08:53,000 --> 00:08:55,000
Speaker 1: a great question. To me, it's it's the number one

186
00:08:55,040 --> 00:08:57,600
Speaker 1: thing I'm I'm watching from a you know, from a

187
00:08:57,600 --> 00:09:00,520
Speaker 1: financial market perspective, is does this rotation trade that you

188
00:09:00,520 --> 00:09:03,400
Speaker 1: know kind of started, uh you November of last year

189
00:09:03,480 --> 00:09:05,959
Speaker 1: kind of post election, post those two mondays that that

190
00:09:06,040 --> 00:09:08,440
Speaker 1: we had the good vaccine news. Uh. And you know,

191
00:09:08,679 --> 00:09:11,559
Speaker 1: obviously I think it's it's you know, growth stocks to cyclical,

192
00:09:11,760 --> 00:09:14,880
Speaker 1: but it's also you know, US to non us um.

193
00:09:14,920 --> 00:09:16,520
Speaker 1: But I think it's you know, a setonymous from a

194
00:09:16,559 --> 00:09:19,800
Speaker 1: bond market perspective, with with a steeper yield curve with

195
00:09:19,920 --> 00:09:23,880
Speaker 1: COVID credits, um, you know, the COVID hit credits outperforming

196
00:09:23,880 --> 00:09:25,240
Speaker 1: and things like that. And so I think when you

197
00:09:25,280 --> 00:09:28,800
Speaker 1: look at broad markets, obviously, you know, broad market valuations,

198
00:09:28,880 --> 00:09:32,560
Speaker 1: pe ratios, spreads and whatnot, you know, could look fairly stressed,

199
00:09:32,600 --> 00:09:35,200
Speaker 1: you know, stretched or at least fully valued. But I

200
00:09:35,240 --> 00:09:37,559
Speaker 1: think the you know, that cyclical trade, I think is

201
00:09:37,559 --> 00:09:40,520
Speaker 1: probably where there's still some value left across financial markets.

202
00:09:40,520 --> 00:09:43,199
Speaker 1: And assuming again assuming I'll reiterate this again, that the

203
00:09:43,240 --> 00:09:46,280
Speaker 1: vaccine rollout goes well, I expect money to continue to

204
00:09:46,280 --> 00:09:48,440
Speaker 1: flow there. So yeah, I think, you know, selectively, we've

205
00:09:48,440 --> 00:09:50,640
Speaker 1: been adding in some of the COVID related credits and

206
00:09:50,679 --> 00:09:53,400
Speaker 1: also you know, inflation break evens and they used to

207
00:09:53,440 --> 00:09:55,880
Speaker 1: continue to go up. But I think, you know, markets

208
00:09:55,920 --> 00:09:59,360
Speaker 1: that will benefit from um, you know, inflation going up,

209
00:09:59,360 --> 00:10:01,720
Speaker 1: so inflation break even trades or other you know types

210
00:10:01,760 --> 00:10:03,640
Speaker 1: of trades that will benefit from a steeper reel curve.

211
00:10:03,800 --> 00:10:05,439
Speaker 1: You know we have we do have some of those

212
00:10:05,480 --> 00:10:07,640
Speaker 1: in our portfolios for sure. Alright, I'm sure you how

213
00:10:07,679 --> 00:10:10,199
Speaker 1: to call this morning. Was there any sort of target

214
00:10:10,200 --> 00:10:15,040
Speaker 1: on the tenure yield? I don't have a particular call,

215
00:10:15,480 --> 00:10:17,280
Speaker 1: you know on the tenure. Yeah, I would think that

216
00:10:17,360 --> 00:10:19,040
Speaker 1: it you know, it probably goes up a little bit

217
00:10:19,080 --> 00:10:21,480
Speaker 1: from here. To me, the most important thing will be,

218
00:10:21,840 --> 00:10:24,400
Speaker 1: you know, what is the what is the FED respond

219
00:10:24,480 --> 00:10:26,320
Speaker 1: How does the FED respond to it? And again I

220
00:10:26,320 --> 00:10:28,839
Speaker 1: think if it's if it's because we're getting cyclical growth,

221
00:10:28,880 --> 00:10:31,080
Speaker 1: it's because we're getting higher inflation, they're okay with it.

222
00:10:31,280 --> 00:10:33,640
Speaker 1: If real rates start to go up a lot and

223
00:10:33,640 --> 00:10:36,280
Speaker 1: that tightens financial conditions, then I think the Fed, the

224
00:10:36,320 --> 00:10:38,800
Speaker 1: FED jumps in. So to me, that's the most important

225
00:10:38,840 --> 00:10:41,280
Speaker 1: thing to watch when thinking about the ten year treasury.

226
00:10:41,280 --> 00:10:43,120
Speaker 1: But my bias would be that it probably goes up

227
00:10:43,200 --> 00:10:46,360
Speaker 1: a little bit from here. So, Eric, where is the

228
00:10:46,400 --> 00:10:50,800
Speaker 1: best value that you're seeing in the market right here? Yeah?

229
00:10:50,840 --> 00:10:52,600
Speaker 1: So I think you know a couple of places, you know,

230
00:10:53,040 --> 00:10:56,200
Speaker 1: emerging market local currencies I think are good value. I

231
00:10:56,240 --> 00:10:59,000
Speaker 1: think bank loans are good value. I think parts of

232
00:10:59,000 --> 00:11:03,760
Speaker 1: the you know, securitized market clos are good value. UM.

233
00:11:03,920 --> 00:11:06,800
Speaker 1: And I think they're they're certainly selective opportunities, you know,

234
00:11:06,880 --> 00:11:10,880
Speaker 1: across across those uh, those markets, you know, as well

235
00:11:10,920 --> 00:11:13,000
Speaker 1: as trades that have been on a steeper yield curve

236
00:11:13,080 --> 00:11:16,360
Speaker 1: or better been on higher inflation, so things in the

237
00:11:16,440 --> 00:11:20,719
Speaker 1: recovery UM kind of bucket. I would think that, you know,

238
00:11:20,760 --> 00:11:23,840
Speaker 1: there's probably the best value out there, but again, nothing

239
00:11:23,920 --> 00:11:25,920
Speaker 1: is the value of what it was, you know, post

240
00:11:25,960 --> 00:11:28,400
Speaker 1: that mark sell off, even back the summer markets have

241
00:11:28,520 --> 00:11:30,600
Speaker 1: moved a lot. But but I still think there's there's

242
00:11:30,640 --> 00:11:34,200
Speaker 1: some selective areas of opportunity for sure. All right, Eric,

243
00:11:34,280 --> 00:11:37,120
Speaker 1: thank you so much for joining today, and excellent day

244
00:11:37,160 --> 00:11:38,839
Speaker 1: to be speaking with us, and for us to be

245
00:11:38,880 --> 00:11:41,520
Speaker 1: speaking with you, I should say rather. Eric Stein is

246
00:11:41,720 --> 00:11:46,559
Speaker 1: chief investment officer for fixed income at the massive, humongous

247
00:11:46,640 --> 00:11:53,320
Speaker 1: Boston based to eat in Vans. The calculus could potentially

248
00:11:53,360 --> 00:11:57,960
Speaker 1: be changing given induction results in Georgia. We haven't got

249
00:11:57,960 --> 00:12:01,160
Speaker 1: the absolute final figures yet, but one thing we did

250
00:12:01,240 --> 00:12:03,520
Speaker 1: have today was a DP employment change which showed a

251
00:12:03,600 --> 00:12:08,560
Speaker 1: drop of one three thousand private sector payrolls. Economists were

252
00:12:08,559 --> 00:12:10,240
Speaker 1: looking for that to be a positive figure of seventy.

253
00:12:11,120 --> 00:12:15,839
Speaker 1: So let's bring in Carl Weinberger finder and High Frequency

254
00:12:15,360 --> 00:12:19,480
Speaker 1: Economics chief economists to explain to us how the calculus

255
00:12:19,520 --> 00:12:22,360
Speaker 1: for him has changed over the last twenty four hours. Literally,

256
00:12:22,440 --> 00:12:27,480
Speaker 1: Carl Vannie, good morning. Um, yeah, it's an exciting night

257
00:12:27,640 --> 00:12:31,679
Speaker 1: overnight for anyone watching the US economic and budget prospects.

258
00:12:32,240 --> 00:12:37,640
Speaker 1: We see likely wins, although still not confirmed by Democratic candidates,

259
00:12:37,720 --> 00:12:41,320
Speaker 1: and um, the Georgia runoff. Everybody knows that already. That

260
00:12:41,440 --> 00:12:43,560
Speaker 1: opens up the door to getting more done under the

261
00:12:43,559 --> 00:12:48,959
Speaker 1: Biden administration, probably not a full blown new green economic deal,

262
00:12:49,559 --> 00:12:52,959
Speaker 1: but putting together a package that can appeal to most

263
00:12:53,000 --> 00:12:55,440
Speaker 1: of the center of the road Democrats and maybe drawing

264
00:12:55,720 --> 00:12:58,520
Speaker 1: some of the center of the road Republicans and pulled

265
00:12:58,559 --> 00:13:02,120
Speaker 1: together a coalition and to send it to enable Biden

266
00:13:02,160 --> 00:13:05,200
Speaker 1: to realize some of his goals. That probably means some

267
00:13:05,280 --> 00:13:08,560
Speaker 1: reversal of some of the Trump tax increases. It probably

268
00:13:08,640 --> 00:13:13,400
Speaker 1: means more support for incomes of people. UH. And again

269
00:13:13,440 --> 00:13:16,640
Speaker 1: tweaks here and there on the Trump program to bring

270
00:13:16,720 --> 00:13:19,520
Speaker 1: up more inline democratic thinking. I don't think we get

271
00:13:19,600 --> 00:13:23,560
Speaker 1: radical results out of it, but we will see change. Carl,

272
00:13:23,600 --> 00:13:27,680
Speaker 1: what kind of spending bill do you believe UH has

273
00:13:27,800 --> 00:13:31,200
Speaker 1: perhaps the most bipartisan support in what looks like to

274
00:13:31,240 --> 00:13:34,400
Speaker 1: be this new Congress, and and and what will have

275
00:13:34,440 --> 00:13:38,840
Speaker 1: the biggest impact on the economy. Yeah, so I think

276
00:13:38,880 --> 00:13:41,640
Speaker 1: that the first word that comes to mind his income support.

277
00:13:41,880 --> 00:13:43,960
Speaker 1: And we're going to get some increase in the package

278
00:13:44,240 --> 00:13:48,360
Speaker 1: that that we've seen UH that was put out so far.

279
00:13:48,840 --> 00:13:51,520
Speaker 1: The American households need that kind of support right now,

280
00:13:51,760 --> 00:13:53,520
Speaker 1: and this is the time to go to the trenches

281
00:13:53,679 --> 00:13:57,880
Speaker 1: and get it. Number two infrastructure, all right, great depression alright,

282
00:13:57,880 --> 00:14:00,240
Speaker 1: ifd are sending people out to dig dig is in

283
00:14:00,320 --> 00:14:02,800
Speaker 1: the build ugly roads in New Jersey and ugly bridges

284
00:14:03,000 --> 00:14:05,840
Speaker 1: that are still standing today out of concrete. Um, we

285
00:14:05,920 --> 00:14:08,480
Speaker 1: have to put people to work, and infrastructure projects or

286
00:14:08,480 --> 00:14:11,000
Speaker 1: a way to do that. I think that infrastructure is

287
00:14:11,000 --> 00:14:13,600
Speaker 1: something that even Republicans who are trying to get themselves

288
00:14:13,600 --> 00:14:17,120
Speaker 1: reelected and as soon as two years have to be

289
00:14:17,160 --> 00:14:19,840
Speaker 1: able to agree with the Democrats on and number three,

290
00:14:19,880 --> 00:14:21,800
Speaker 1: I think taxes. I think this is a big cry

291
00:14:21,800 --> 00:14:24,960
Speaker 1: among the Democrats. We're going to see some unrolling at

292
00:14:25,000 --> 00:14:27,560
Speaker 1: least of some of the higher income tax breaks that

293
00:14:27,600 --> 00:14:32,120
Speaker 1: came out of the Trump administration's tax efforts. We'll see

294
00:14:32,160 --> 00:14:36,760
Speaker 1: probably a restoration of the state and local tax deductions, um,

295
00:14:36,880 --> 00:14:40,080
Speaker 1: and things like that. Yeah, I mean, that's a huge

296
00:14:40,080 --> 00:14:44,800
Speaker 1: agenda if Chuck Schumer does actually display Republican leader Mitch

297
00:14:44,880 --> 00:14:47,640
Speaker 1: McConnell of the centers thereby deciding on what can come

298
00:14:47,680 --> 00:14:51,720
Speaker 1: before the chamber for a full vote. And you know,

299
00:14:51,840 --> 00:14:54,880
Speaker 1: Joe Biden has Kamala Harris to sort of cast a

300
00:14:54,920 --> 00:14:58,800
Speaker 1: tie breaking vote. Just how to the left will Joe

301
00:14:58,840 --> 00:15:01,480
Speaker 1: Biden go with as legislation. And I mean a lot

302
00:15:01,520 --> 00:15:06,040
Speaker 1: of Democrats that are elected are pretty moderate too. Yeah, well, Bunnie,

303
00:15:06,120 --> 00:15:09,040
Speaker 1: let's remember how we got the president stimulus bill done

304
00:15:09,320 --> 00:15:11,560
Speaker 1: just to look for a third way. Um, if I

305
00:15:11,600 --> 00:15:15,000
Speaker 1: can borrow that phrase from somebody else. Um. We saw

306
00:15:15,200 --> 00:15:19,360
Speaker 1: moderate Republicans joined together with moderate Democrats to get fifty

307
00:15:19,360 --> 00:15:21,280
Speaker 1: one votes in the Senate to bring the bill to

308
00:15:21,320 --> 00:15:26,440
Speaker 1: the floor, going around Mitch McConnell's view that objections to

309
00:15:26,480 --> 00:15:28,640
Speaker 1: bringing it to the floor at all. And this is

310
00:15:28,640 --> 00:15:31,760
Speaker 1: another way that this can move forward, alright, movement towards

311
00:15:31,800 --> 00:15:34,960
Speaker 1: the center on ideas that appeal to both moderate Democrats

312
00:15:34,960 --> 00:15:37,560
Speaker 1: and moderate Republicans. This is the way things used to

313
00:15:37,600 --> 00:15:39,720
Speaker 1: work in Congress. You know, we'd find a place in

314
00:15:39,760 --> 00:15:42,880
Speaker 1: the middle that everybody could get to with each side

315
00:15:42,920 --> 00:15:45,560
Speaker 1: is being willing to make compromises. I think you can't

316
00:15:45,640 --> 00:15:47,520
Speaker 1: rule that out as a way that this is going

317
00:15:47,560 --> 00:15:50,800
Speaker 1: to go, that it's going to be the center as

318
00:15:50,920 --> 00:15:53,120
Speaker 1: much as the majority leader who's going to be driving

319
00:15:53,120 --> 00:15:56,000
Speaker 1: the agenda in the Senate. Corl Let's switch gears a

320
00:15:56,000 --> 00:15:58,520
Speaker 1: little bit to China. We've had some news today about

321
00:15:58,560 --> 00:16:01,640
Speaker 1: the delisting appears to be off on some of these

322
00:16:01,680 --> 00:16:05,120
Speaker 1: China telecom names. What do you what is your expectation

323
00:16:05,320 --> 00:16:10,280
Speaker 1: for um trade under a Biden administration? How do you

324
00:16:10,440 --> 00:16:14,320
Speaker 1: expect this administration will uh address a trade and just

325
00:16:14,360 --> 00:16:18,240
Speaker 1: broad at tensions issues with China? Paul, I thought you

326
00:16:18,280 --> 00:16:21,800
Speaker 1: were going to ask me about inflation on China. All Right,

327
00:16:21,960 --> 00:16:25,880
Speaker 1: We're going to see I think not such a big

328
00:16:26,280 --> 00:16:29,120
Speaker 1: We'll see a change in attitude and an approach, but

329
00:16:29,240 --> 00:16:32,360
Speaker 1: not such a big series of concessions coming right out

330
00:16:32,400 --> 00:16:35,880
Speaker 1: of the gun. The Trump administration has left a lot

331
00:16:35,920 --> 00:16:38,760
Speaker 1: of chips on the table for the Biden administration to play.

332
00:16:39,040 --> 00:16:41,560
Speaker 1: I think the Biden administration will be tough on China,

333
00:16:41,760 --> 00:16:44,120
Speaker 1: although perhaps coming at it from a more balanced point

334
00:16:44,120 --> 00:16:47,280
Speaker 1: of view, and they're not going to unwind tariffs and

335
00:16:47,360 --> 00:16:50,720
Speaker 1: sanctions unless they get something back for it. The test

336
00:16:50,760 --> 00:16:52,880
Speaker 1: of that theory will be whether the Chinese think it's

337
00:16:52,920 --> 00:16:56,440
Speaker 1: important anymore to play cade American interest, but whether they're

338
00:16:56,440 --> 00:16:59,520
Speaker 1: completing a pivot toward Europe that gives Europe a role

339
00:16:59,560 --> 00:17:02,240
Speaker 1: on China, this geo strategy that the US might have

340
00:17:02,320 --> 00:17:04,520
Speaker 1: had but now won't have. So there's a lot of

341
00:17:04,560 --> 00:17:07,720
Speaker 1: potential dynamics there. But I don't think the Biden administration

342
00:17:07,800 --> 00:17:10,439
Speaker 1: is going to come out making nice nice with the

343
00:17:10,440 --> 00:17:13,920
Speaker 1: government in China. I think that any rolling back of

344
00:17:14,000 --> 00:17:18,320
Speaker 1: trade restrictions is going to be um uh sast over time.

345
00:17:18,600 --> 00:17:21,679
Speaker 1: One other point, despite all the sanctions and all the

346
00:17:21,680 --> 00:17:25,960
Speaker 1: other things, goodness gracious, China book the record trade surface

347
00:17:26,080 --> 00:17:28,560
Speaker 1: with the United States on record exports in the last

348
00:17:28,560 --> 00:17:32,000
Speaker 1: monthly report. It's not killing them. What the Trump administration

349
00:17:32,040 --> 00:17:35,399
Speaker 1: has been doing. Hey, Carl, thanks so much for joining us.

350
00:17:35,400 --> 00:17:39,480
Speaker 1: We always appreciates your thoughts. UH and out LA Carl Winberg,

351
00:17:39,560 --> 00:17:43,080
Speaker 1: founder and chief International Economists for High Frequency Economics, based

352
00:17:43,119 --> 00:17:47,240
Speaker 1: in New York City. Another fascinating story we've been following

353
00:17:47,280 --> 00:17:49,480
Speaker 1: for the last several days is the New York Stocks

354
00:17:49,600 --> 00:17:53,200
Speaker 1: Change UH and its dealings with some of these Chinese

355
00:17:53,200 --> 00:17:56,479
Speaker 1: telecom companies and the n y SC surprise markets. Again

356
00:17:56,560 --> 00:17:59,920
Speaker 1: today it's reverting to its original plan to de lish

357
00:18:00,000 --> 00:18:03,560
Speaker 1: shares of three Chinese companies. From where we bring advance

358
00:18:03,640 --> 00:18:07,679
Speaker 1: reporter Lenan Newon in New York. Lennon, I've been getting

359
00:18:07,760 --> 00:18:11,159
Speaker 1: whip sale, like I'm sure many investors have by the

360
00:18:11,160 --> 00:18:14,119
Speaker 1: New York Soacker Change and it's listing delisting of these

361
00:18:14,200 --> 00:18:18,240
Speaker 1: Chinese companies. What's the latest. So, the latest, Paul, which

362
00:18:18,280 --> 00:18:21,320
Speaker 1: is something that we um we're reporting on sources yesterday,

363
00:18:21,720 --> 00:18:25,160
Speaker 1: is that NYC will go ahead with the listing through

364
00:18:25,160 --> 00:18:28,320
Speaker 1: the Chinese companies. Now, what it has done is gotten

365
00:18:28,720 --> 00:18:32,399
Speaker 1: specific guidance from the Treasury Department that these companies and

366
00:18:32,400 --> 00:18:35,520
Speaker 1: those securities are in scope, and so it's decided to

367
00:18:35,560 --> 00:18:40,480
Speaker 1: proceed again with the listing right so you know, you

368
00:18:40,480 --> 00:18:43,280
Speaker 1: you sort of answer my next question to certain extend

369
00:18:43,320 --> 00:18:47,040
Speaker 1: Treasury Secretary Steven Mnuchen calling on n YSC President Stacy

370
00:18:47,119 --> 00:18:51,639
Speaker 1: Conningham to say he opposed the Shock announcements to grant

371
00:18:51,680 --> 00:18:55,360
Speaker 1: the company's a reprieve. So how much do pause explain

372
00:18:55,480 --> 00:18:58,560
Speaker 1: to the saga how much are they allowed to? I

373
00:18:58,680 --> 00:19:02,119
Speaker 1: think there's a lot of politics already embedded in that question, body,

374
00:19:02,200 --> 00:19:06,000
Speaker 1: And this is a highly highly political story here. So

375
00:19:06,520 --> 00:19:09,359
Speaker 1: obviously we can't look at this without looking at the

376
00:19:09,560 --> 00:19:12,320
Speaker 1: context of the U. S. And China trade tensions and

377
00:19:12,480 --> 00:19:15,679
Speaker 1: you know, trade war that we're in Wisconsin right now,

378
00:19:15,800 --> 00:19:19,200
Speaker 1: and so obviously, um, you know, a U S Stock

379
00:19:19,240 --> 00:19:24,520
Speaker 1: exchange deciding to delist securities of Chinese companies is highly political,

380
00:19:24,760 --> 00:19:28,959
Speaker 1: highly contentious. Obviously, it was criticized in China. Those companies

381
00:19:29,000 --> 00:19:31,439
Speaker 1: are kind of watching the situation closely, and also it's

382
00:19:31,520 --> 00:19:34,680
Speaker 1: being watched very closely by the US business community as well.

383
00:19:35,080 --> 00:19:38,920
Speaker 1: Many US firms, including the biggest US banks, are trying

384
00:19:39,000 --> 00:19:41,560
Speaker 1: to expand in China, and so you know, this kind

385
00:19:41,600 --> 00:19:45,280
Speaker 1: of puts things in a sort of contentious um and

386
00:19:45,520 --> 00:19:50,480
Speaker 1: and tense environment. So I kind of was surprised. I

387
00:19:50,560 --> 00:19:53,240
Speaker 1: guess it was most surprising was yesterdays announcement or they

388
00:19:53,240 --> 00:19:56,400
Speaker 1: announced by the n y s E to uh suspend

389
00:19:56,560 --> 00:19:59,480
Speaker 1: the delisting if you will. Did they kind of go

390
00:19:59,720 --> 00:20:05,560
Speaker 1: row there yesterday? It's very unclear. A lot of our

391
00:20:05,680 --> 00:20:08,600
Speaker 1: sources are still scratching their heads. There are a lot

392
00:20:08,640 --> 00:20:11,320
Speaker 1: of questions about what happened behind the scenes here, Paul,

393
00:20:11,440 --> 00:20:14,399
Speaker 1: So unfortunately I can't answer that question too directly, but

394
00:20:14,520 --> 00:20:16,639
Speaker 1: what I can say is that, um, you know, it

395
00:20:16,800 --> 00:20:19,480
Speaker 1: sounds like this was messy on both sides. It sounds

396
00:20:19,520 --> 00:20:21,159
Speaker 1: like it was messy in terms of, um, you know,

397
00:20:21,400 --> 00:20:24,520
Speaker 1: how how it was handled and decided within government and

398
00:20:24,600 --> 00:20:28,520
Speaker 1: also how it was rolled out by NYC. Obviously, big

399
00:20:28,720 --> 00:20:32,280
Speaker 1: U S companies don't tend to you know, take action,

400
00:20:32,520 --> 00:20:35,520
Speaker 1: reverse and then reverse again. Um. And so obviously there

401
00:20:35,680 --> 00:20:37,320
Speaker 1: there's going to be some soul searching about what what

402
00:20:37,480 --> 00:20:41,160
Speaker 1: exactly happened here. So it's pretty messy, um, and we're

403
00:20:41,200 --> 00:20:43,639
Speaker 1: still trying to figure out exactly what went wrong. Have

404
00:20:43,800 --> 00:20:46,840
Speaker 1: you been watching the market today, lan R, A d

405
00:20:47,000 --> 00:20:49,960
Speaker 1: R is reacting, Yeah, Well, A d R s have

406
00:20:50,200 --> 00:20:52,960
Speaker 1: reacted throughout this whole process. They kind of went went,

407
00:20:53,480 --> 00:20:56,080
Speaker 1: you know, fell when the listeners were announced and then

408
00:20:56,119 --> 00:20:58,080
Speaker 1: went back up when they were pulled back, and so

409
00:20:58,560 --> 00:21:00,040
Speaker 1: I think it's a bit of a roller coaster. But

410
00:21:00,160 --> 00:21:04,199
Speaker 1: what's key here is that it looks like these securities

411
00:21:04,320 --> 00:21:06,920
Speaker 1: are you know, in scope of the executive order, and

412
00:21:07,200 --> 00:21:09,680
Speaker 1: it means that investors do have to get rid of

413
00:21:09,720 --> 00:21:14,399
Speaker 1: them my next week. So what's the you know, speaking

414
00:21:14,440 --> 00:21:17,280
Speaker 1: to some observers here and more from a geopolitical perspective,

415
00:21:17,359 --> 00:21:22,400
Speaker 1: is maybe the concern that perhaps China will retaliate against

416
00:21:22,480 --> 00:21:25,240
Speaker 1: the US and maybe some US companies. Is that a

417
00:21:25,280 --> 00:21:29,200
Speaker 1: realistic concern from the folks you talked to. Definitely a

418
00:21:29,280 --> 00:21:33,439
Speaker 1: realistic concern for sure. Um. And again these are subtle, um,

419
00:21:33,560 --> 00:21:36,240
Speaker 1: this is a nuanced situation. Pause though it's not as

420
00:21:36,280 --> 00:21:38,920
Speaker 1: if you know, we're hearing about any kind of tit

421
00:21:39,080 --> 00:21:42,480
Speaker 1: for tat threats. But you know, the US business community

422
00:21:42,560 --> 00:21:44,720
Speaker 1: does want to have a good relationship with China, and

423
00:21:44,840 --> 00:21:48,200
Speaker 1: so the escalating trade war um, you know, particularly in

424
00:21:48,240 --> 00:21:51,560
Speaker 1: the financial community is not looked upon well here. So

425
00:21:52,240 --> 00:21:55,960
Speaker 1: I do think whether you know, US companies are talking

426
00:21:56,080 --> 00:21:59,920
Speaker 1: to their Chinese base or talking to their Chinese context, well,

427
00:22:00,000 --> 00:22:03,639
Speaker 1: whether they're just anticipating um, you know, negative blowback. UM.

428
00:22:04,320 --> 00:22:07,080
Speaker 1: I think that's a very real concern. What does the

429
00:22:07,119 --> 00:22:09,479
Speaker 1: financial community tell you about how much work will need

430
00:22:09,520 --> 00:22:12,600
Speaker 1: to be done by a Biden administration to improve the relationship,

431
00:22:12,680 --> 00:22:15,719
Speaker 1: and whether they feel like that's what the Biden administration

432
00:22:15,760 --> 00:22:19,160
Speaker 1: will even try to do. Well. I think first of all,

433
00:22:19,359 --> 00:22:22,960
Speaker 1: they want to sift through the issues that are in

434
00:22:23,040 --> 00:22:25,600
Speaker 1: front of them right now, which is how to um,

435
00:22:25,720 --> 00:22:27,679
Speaker 1: you know, help the trading of the securities that are

436
00:22:27,680 --> 00:22:30,639
Speaker 1: affected by this executive order. UM. And then you know,

437
00:22:30,800 --> 00:22:33,320
Speaker 1: see what happens in the next couple of weeks as

438
00:22:33,400 --> 00:22:36,320
Speaker 1: the Trump administration leaves, whether there are any other you know,

439
00:22:36,440 --> 00:22:38,960
Speaker 1: trade related issues that could come up in the next

440
00:22:39,000 --> 00:22:42,040
Speaker 1: couple of weeks. Obviously it's very unpredictable time. Uh. And

441
00:22:42,119 --> 00:22:44,320
Speaker 1: then going forward, yes, I think the business community is

442
00:22:44,480 --> 00:22:47,760
Speaker 1: very very interested in trying to rebuild and repair relationships

443
00:22:47,800 --> 00:22:51,280
Speaker 1: with China. UM. And it's you know, it's not exactly

444
00:22:51,359 --> 00:22:54,520
Speaker 1: clear how the Biden administration will react to this, but

445
00:22:54,640 --> 00:22:57,600
Speaker 1: there is obviously a lot of legislative UM sort of

446
00:22:57,640 --> 00:23:00,480
Speaker 1: hawkishness around China as well. So it's not just about

447
00:23:00,640 --> 00:23:04,520
Speaker 1: the administration, it's also about what's happening in Congress, all right,

448
00:23:04,560 --> 00:23:08,359
Speaker 1: so lean's assuming we don't get any new wrinkles in

449
00:23:08,400 --> 00:23:10,840
Speaker 1: the story, and that's a big assumption. I guess what

450
00:23:11,240 --> 00:23:14,680
Speaker 1: is the expected timing here? If I own these stocks,

451
00:23:15,359 --> 00:23:16,879
Speaker 1: I guess I have to sell them? And when do

452
00:23:17,000 --> 00:23:18,920
Speaker 1: I have to sell them? And what's the timing there?

453
00:23:19,880 --> 00:23:23,160
Speaker 1: So the industry is really looking at Monday as being

454
00:23:23,240 --> 00:23:25,600
Speaker 1: a key date because that's when you are not allowed

455
00:23:25,680 --> 00:23:28,840
Speaker 1: to trade the securities anymore, either buy or sell kind

456
00:23:28,880 --> 00:23:31,840
Speaker 1: of like actively, um you know, transact them. So that

457
00:23:31,920 --> 00:23:34,320
Speaker 1: means all of the indexes, for instance, are going to

458
00:23:34,440 --> 00:23:37,560
Speaker 1: have to sort of remove these securities, and the exchanges

459
00:23:37,560 --> 00:23:39,399
Speaker 1: are going to have to remove them, and so there

460
00:23:39,400 --> 00:23:41,119
Speaker 1: are a lot of kind of follow on effects if

461
00:23:41,160 --> 00:23:43,280
Speaker 1: you have a kind of passive holding in your portfolio

462
00:23:43,359 --> 00:23:47,840
Speaker 1: that has to be divested by November. But um, you know,

463
00:23:47,920 --> 00:23:50,320
Speaker 1: everyone else in the markets, the real kind of day

464
00:23:50,359 --> 00:23:53,080
Speaker 1: to day people are looking at Monday as the real

465
00:23:53,280 --> 00:23:59,400
Speaker 1: stop dead date. And why three telecommunications companies in particular,

466
00:23:59,520 --> 00:24:02,680
Speaker 1: There are plenty to have other Chinese companies listed. Will

467
00:24:02,720 --> 00:24:08,360
Speaker 1: they be next? Or is is the impetus specifically telecoms? Well,

468
00:24:08,680 --> 00:24:10,840
Speaker 1: I think one of the things that the industry is

469
00:24:10,960 --> 00:24:13,560
Speaker 1: kind of signed with release today is that it got

470
00:24:13,720 --> 00:24:17,800
Speaker 1: specific guidance from the Treasury as to which entities were

471
00:24:17,840 --> 00:24:20,000
Speaker 1: sort of viewed as you know, being linked to the

472
00:24:20,119 --> 00:24:23,040
Speaker 1: Chinese military. So that's that's the move, right that it

473
00:24:23,119 --> 00:24:27,000
Speaker 1: originates with the executive order, and it originates with the administration.

474
00:24:27,160 --> 00:24:29,600
Speaker 1: So you know, one of the things that the industry

475
00:24:29,640 --> 00:24:32,920
Speaker 1: has been clamoring for is clarity around which securities, not

476
00:24:33,080 --> 00:24:37,119
Speaker 1: just which kind of over overarching companies, but also which subsidiaries,

477
00:24:37,160 --> 00:24:40,680
Speaker 1: which kickers, et cetera. And they were looking for details, um.

478
00:24:40,760 --> 00:24:43,240
Speaker 1: And so that that is one question that has been

479
00:24:43,320 --> 00:24:45,840
Speaker 1: at least put to rest today, UM in terms of

480
00:24:46,080 --> 00:24:49,159
Speaker 1: you know, which companies were selected. Again that's to do

481
00:24:49,280 --> 00:24:52,399
Speaker 1: with the links to the you know, Chinese government and

482
00:24:52,800 --> 00:24:56,520
Speaker 1: its military. So that was the call by the administration.

483
00:24:57,200 --> 00:24:59,199
Speaker 1: And then and just finally, I think about some other

484
00:24:59,240 --> 00:25:00,920
Speaker 1: big Chinese cup It is list to hear, you know,

485
00:25:01,000 --> 00:25:03,120
Speaker 1: the Ali Bobbs of the world that j DS dot com.

486
00:25:03,160 --> 00:25:06,800
Speaker 1: These are huge companies as well. I wonder if there're

487
00:25:06,800 --> 00:25:10,639
Speaker 1: at risk. Well, I think there has been a ratcheting

488
00:25:10,720 --> 00:25:14,960
Speaker 1: up of executive orders in recent days, and obviously the

489
00:25:15,040 --> 00:25:20,959
Speaker 1: outgoing administration is um you know, making taking action on China. Um.

490
00:25:21,160 --> 00:25:24,480
Speaker 1: We will see whether that is continued extended once the

491
00:25:24,520 --> 00:25:27,520
Speaker 1: new administration comes in or not. But certainly, you know,

492
00:25:27,600 --> 00:25:30,480
Speaker 1: in these last couple of weeks of the Trump administration,

493
00:25:30,560 --> 00:25:33,840
Speaker 1: we are seeing a ratcheting up of sort of tensions

494
00:25:33,960 --> 00:25:38,160
Speaker 1: with China on multiple fronts. Lanan, thank you so much

495
00:25:38,280 --> 00:25:40,600
Speaker 1: for jumping on the phone. There her wonderful story to day,

496
00:25:40,640 --> 00:25:44,720
Speaker 1: and we'll see reverses again with plants list China teleconference.

497
00:25:44,760 --> 00:25:46,600
Speaker 1: She's written a few of those in the last two days,

498
00:25:46,640 --> 00:25:50,880
Speaker 1: but she has not felt confused. Laana Nuian covering stocks

499
00:25:50,960 --> 00:25:53,919
Speaker 1: and all sorts of stories and and UH finance reporter.

500
00:25:54,080 --> 00:25:59,679
Speaker 1: More broadly for us at Bloomberg, we are awaiting comments

501
00:25:59,760 --> 00:26:02,560
Speaker 1: from President Trump is he delivers remarks at the Women

502
00:26:02,760 --> 00:26:07,040
Speaker 1: for America First March to Save America rally in Washington,

503
00:26:07,320 --> 00:26:09,640
Speaker 1: d C. Let's get a little preview what we might

504
00:26:09,800 --> 00:26:11,960
Speaker 1: hear and kind of what's going on at the White House.

505
00:26:12,040 --> 00:26:13,800
Speaker 1: We can do that with Josh wind Grove. He's a

506
00:26:13,840 --> 00:26:17,520
Speaker 1: White House correspondent for Bloomberg News. Josh, thanks so much

507
00:26:17,520 --> 00:26:20,160
Speaker 1: for joining us here. We're waiting comments from President Trump

508
00:26:20,280 --> 00:26:24,000
Speaker 1: in Washington. Do you expect anything new today or will

509
00:26:24,080 --> 00:26:26,520
Speaker 1: this be some of his speaking points as it relates

510
00:26:26,560 --> 00:26:30,160
Speaker 1: to the election. Yeah, good morning. I think it will

511
00:26:30,200 --> 00:26:33,080
Speaker 1: be a greatest hits album. For lack of a better phrase.

512
00:26:33,160 --> 00:26:36,000
Speaker 1: He's been tweeting through last night and in the morning

513
00:26:36,640 --> 00:26:40,480
Speaker 1: urging Mike Pants to reject the results today in Congress,

514
00:26:40,560 --> 00:26:43,040
Speaker 1: which mc pence doesn't have the power to do, and

515
00:26:43,119 --> 00:26:45,240
Speaker 1: it's given no signal that he's willing to do, but

516
00:26:45,400 --> 00:26:48,000
Speaker 1: it's kept quiet on. So I suppose those room for

517
00:26:48,160 --> 00:26:52,080
Speaker 1: a surprise on that Trump is discrediting the results, uh,

518
00:26:52,640 --> 00:26:55,119
Speaker 1: you know, over the objections of the Republican state officials

519
00:26:55,160 --> 00:26:58,720
Speaker 1: who are running this election. But it's also tacitly acknowledged

520
00:26:58,720 --> 00:27:01,480
Speaker 1: that they've lost the Senate and is using it as

521
00:27:01,680 --> 00:27:06,560
Speaker 1: a motivation for Republican senators and members of members of

522
00:27:06,600 --> 00:27:10,359
Speaker 1: the House to overturned biden victory and keep him in

523
00:27:10,640 --> 00:27:13,280
Speaker 1: the presidency so that he can veto things. So, you know,

524
00:27:13,640 --> 00:27:16,920
Speaker 1: Trump has been fundraising office office, He's been a font

525
00:27:16,960 --> 00:27:20,760
Speaker 1: of misinformation. H he has been stoking the anger of

526
00:27:20,800 --> 00:27:23,479
Speaker 1: his supporters. It's very unclear how the air will come

527
00:27:23,480 --> 00:27:26,119
Speaker 1: out of this balloon. Yeah, I mean, Nathan Hayar just

528
00:27:26,200 --> 00:27:29,240
Speaker 1: played some sound from a woman at today's pro Trump

529
00:27:29,400 --> 00:27:31,439
Speaker 1: Riley saying that they weren't going to go down easily.

530
00:27:31,600 --> 00:27:33,680
Speaker 1: What does that mean, Josh? What I mean is there

531
00:27:33,880 --> 00:27:35,760
Speaker 1: is there a lot of security in Washington, d C.

532
00:27:36,000 --> 00:27:42,600
Speaker 1: And And and is anybody concerned huge security, tons of

533
00:27:42,720 --> 00:27:44,960
Speaker 1: road closures. No one I know living in Washington is

534
00:27:45,080 --> 00:27:48,000
Speaker 1: going anywhere near that part of town right now if

535
00:27:48,040 --> 00:27:50,880
Speaker 1: they don't have to, um, we don't know. Like fighting,

536
00:27:51,080 --> 00:27:54,359
Speaker 1: Is this like animating language of the Republican Party right now?

537
00:27:54,440 --> 00:27:56,359
Speaker 1: If you had to, like look for one quality that

538
00:27:56,440 --> 00:27:59,399
Speaker 1: people want Republicans, it's fighting. But right now it's sort

539
00:27:59,440 --> 00:28:02,600
Speaker 1: of performance art more than any sort of out of options.

540
00:28:02,720 --> 00:28:06,359
Speaker 1: And in particular, Trump looks like he's lost the Senate majority.

541
00:28:06,800 --> 00:28:09,280
Speaker 1: It's too early to call it, but John Ausus is

542
00:28:09,400 --> 00:28:13,280
Speaker 1: leading for that because in part, he told people the

543
00:28:13,320 --> 00:28:16,080
Speaker 1: election was ragged. In other words, the Republican voters in

544
00:28:16,080 --> 00:28:18,040
Speaker 1: Georgia were told that this is all a sham, it's

545
00:28:18,080 --> 00:28:20,040
Speaker 1: all ragged, but they should take time to vote anyway.

546
00:28:20,080 --> 00:28:22,400
Speaker 1: You can appreciate why some of them. Maybe he didn't

547
00:28:22,440 --> 00:28:25,520
Speaker 1: do that. And so, I mean, you know, Trump four

548
00:28:25,560 --> 00:28:28,640
Speaker 1: years ago swept power on the strength of the electoral College.

549
00:28:28,680 --> 00:28:32,000
Speaker 1: What he's urging people to do today is essentially kneecap

550
00:28:32,280 --> 00:28:36,720
Speaker 1: the electoral college by cherry picking which states to accept

551
00:28:36,800 --> 00:28:39,280
Speaker 1: in which states did not. Of course, two years ago

552
00:28:39,440 --> 00:28:43,000
Speaker 1: he lost the House. It looks like now he loses

553
00:28:43,080 --> 00:28:47,160
Speaker 1: the Senate and he is departing message, assuming he actually

554
00:28:47,200 --> 00:28:50,480
Speaker 1: physically departs the White House is to his supporters that

555
00:28:50,560 --> 00:28:55,040
Speaker 1: this was all ragged. Josh, how small is the inner

556
00:28:55,080 --> 00:28:58,720
Speaker 1: circle around the president right now here? Because his behavior

557
00:28:58,800 --> 00:29:01,000
Speaker 1: obviously is as a relates to the election in the

558
00:29:01,080 --> 00:29:05,040
Speaker 1: viability the election and has been so odd. I guess

559
00:29:05,640 --> 00:29:08,000
Speaker 1: is a word can be used, How much support does

560
00:29:08,040 --> 00:29:12,280
Speaker 1: he still have within the White House? It is unclear.

561
00:29:12,640 --> 00:29:16,400
Speaker 1: It's smaller than ever though. I mean, it just seems

562
00:29:16,520 --> 00:29:19,400
Speaker 1: to a shrunk, you know, by the day, the number

563
00:29:19,400 --> 00:29:22,040
Speaker 1: of people willing to put their names on statements. Trump

564
00:29:22,120 --> 00:29:24,400
Speaker 1: put out a pretty explosive statement last night. Didn't even

565
00:29:24,400 --> 00:29:26,000
Speaker 1: put it out through the White House. He put it

566
00:29:26,000 --> 00:29:28,920
Speaker 1: out through the campaign. Um, so you know, it looks

567
00:29:28,960 --> 00:29:31,880
Speaker 1: to be down to just a handful of folks, including

568
00:29:31,960 --> 00:29:35,400
Speaker 1: rue Di Giuliani, who just spoke at this rally as

569
00:29:35,440 --> 00:29:37,440
Speaker 1: we wait for President Trump to arrive and talked about

570
00:29:37,520 --> 00:29:40,440
Speaker 1: doing trial by combat. So you know, we're using these

571
00:29:40,520 --> 00:29:44,200
Speaker 1: really loaded language that of course has raised security concerns

572
00:29:44,280 --> 00:29:46,680
Speaker 1: many of the people attending the rally, addressing sort of

573
00:29:46,680 --> 00:29:50,280
Speaker 1: like quasi militia type gear. So you know, take that

574
00:29:50,520 --> 00:29:53,760
Speaker 1: for what it is. But you know, right now, Donald Trump,

575
00:29:54,440 --> 00:29:56,080
Speaker 1: I think it's an open question as to what his

576
00:29:56,200 --> 00:29:58,520
Speaker 1: legacy is in the party and the House of Representatives.

577
00:29:58,560 --> 00:30:00,880
Speaker 1: It seems pretty strong. We're gonna like a hundred or

578
00:30:00,960 --> 00:30:05,000
Speaker 1: more members of the House object today, and in part

579
00:30:05,080 --> 00:30:08,240
Speaker 1: that's because they are scared of primary challenges. Eric Trump,

580
00:30:08,280 --> 00:30:13,160
Speaker 1: the president's son, threatened yesterday to help primary any Republican

581
00:30:13,160 --> 00:30:16,440
Speaker 1: Congressman who did not object to the results. Senators, on

582
00:30:16,480 --> 00:30:18,560
Speaker 1: the other hand, are a little less exposed to primary

583
00:30:18,680 --> 00:30:21,320
Speaker 1: challenges longer terms early up every six years, and so

584
00:30:21,440 --> 00:30:26,200
Speaker 1: that's why we're only seeing thirteen Republican Senators object in

585
00:30:26,280 --> 00:30:27,640
Speaker 1: the same way as supposed to as to say a

586
00:30:27,760 --> 00:30:31,160
Speaker 1: hundred or more Republican House members. Yeah, that is phenomenal.

587
00:30:31,200 --> 00:30:33,880
Speaker 1: I mean, the theater of this is just something else, Josh.

588
00:30:33,960 --> 00:30:40,280
Speaker 1: But I mean common inauguration night, will that theater all stop? Um?

589
00:30:40,360 --> 00:30:42,120
Speaker 1: I don't think so Trump as a showman, I mean

590
00:30:42,160 --> 00:30:45,200
Speaker 1: the official like you know, most very few people think

591
00:30:45,240 --> 00:30:47,280
Speaker 1: that Donald Trump will still be in the White House,

592
00:30:47,440 --> 00:30:50,520
Speaker 1: you know, as a the end of January. But he

593
00:30:50,640 --> 00:30:54,120
Speaker 1: will go down or he's telegraphing at least if you

594
00:30:54,120 --> 00:30:56,720
Speaker 1: will go down, continuing to say it's rigged, you will

595
00:30:56,760 --> 00:30:59,600
Speaker 1: never admit it's not. He's fundraising off of it. He's

596
00:30:59,640 --> 00:31:02,800
Speaker 1: a mass quite a war chest in his pack from

597
00:31:02,880 --> 00:31:05,320
Speaker 1: doing so. This will allow him to direct the money

598
00:31:06,080 --> 00:31:09,240
Speaker 1: more or less whatever he wants politically, including whatever candidate

599
00:31:09,320 --> 00:31:12,080
Speaker 1: he wants. We will continue to see him flex his muscles,

600
00:31:12,200 --> 00:31:15,280
Speaker 1: and you know, we'll see what happens. What the yesterday

601
00:31:15,320 --> 00:31:18,760
Speaker 1: it might have shown is similar to what two eighteen showed,

602
00:31:18,800 --> 00:31:21,200
Speaker 1: which is that Trump has his supporters clearly, but when

603
00:31:21,240 --> 00:31:25,000
Speaker 1: he is not on the ballot physically, like if you know,

604
00:31:25,040 --> 00:31:26,920
Speaker 1: people aren't showing up to vote for him, they don't

605
00:31:26,920 --> 00:31:28,800
Speaker 1: show up in the same numbers, and that hurt them

606
00:31:28,920 --> 00:31:32,120
Speaker 1: yesterday in the runoff, that hurt them in It remains

607
00:31:32,160 --> 00:31:34,160
Speaker 1: to be seen what that will mean in the mid

608
00:31:34,280 --> 00:31:37,520
Speaker 1: terms and heading into four. Of course, the big question

609
00:31:37,880 --> 00:31:40,560
Speaker 1: is Trump hasn't wanted to talk about four in terms

610
00:31:40,600 --> 00:31:42,880
Speaker 1: of his own ambitions. Will he run again? This is

611
00:31:43,320 --> 00:31:45,360
Speaker 1: one of the open ones and so you know, the

612
00:31:45,640 --> 00:31:48,960
Speaker 1: betting odds kind of depend on who you ask, but

613
00:31:49,600 --> 00:31:51,800
Speaker 1: that might be the next shoe to draw. The rhetoric

614
00:31:51,880 --> 00:31:54,480
Speaker 1: from Joe Biden and company will have to be extremely

615
00:31:54,680 --> 00:31:58,640
Speaker 1: extremely important in the next few days, right, Josh, You

616
00:31:58,720 --> 00:32:01,960
Speaker 1: know Joe Biden will probably speak more than a very

617
00:32:02,040 --> 00:32:07,240
Speaker 1: early in his term president normally would. Yeah. I think

618
00:32:07,640 --> 00:32:10,400
Speaker 1: in some ways the pandemic will give them a chance

619
00:32:10,480 --> 00:32:14,160
Speaker 1: to redirect focus. They've said that that is priority number one.

620
00:32:14,800 --> 00:32:16,920
Speaker 1: We've seen a little bit of waffling actually today on

621
00:32:17,000 --> 00:32:19,560
Speaker 1: the issue of checks. Remember Joe Biden went to Georgia

622
00:32:19,600 --> 00:32:23,480
Speaker 1: and told everyone Bover, John Assu and Michael uh Warren,

623
00:32:24,240 --> 00:32:28,440
Speaker 1: Reverend Warnock, and you will get two checks. And today

624
00:32:28,760 --> 00:32:33,360
Speaker 1: Warnock is saying that, whereas Biden ally, Chris Coons is

625
00:32:33,400 --> 00:32:35,719
Speaker 1: not really saying that. He's saying checks will move more

626
00:32:35,840 --> 00:32:39,000
Speaker 1: quickly but not necessarily immediately. And John Auso didn't put

627
00:32:39,000 --> 00:32:40,680
Speaker 1: a dollar value on how much you think people should

628
00:32:40,680 --> 00:32:42,520
Speaker 1: get when he spoke today. So a little bit of

629
00:32:42,760 --> 00:32:45,360
Speaker 1: muddied water already beginning. But I think we'll see Biden

630
00:32:45,480 --> 00:32:49,320
Speaker 1: put a unrelenting focus on the virus early on and

631
00:32:49,440 --> 00:32:51,320
Speaker 1: maybe hope that that will take the temperature down a

632
00:32:51,360 --> 00:32:56,040
Speaker 1: little bit. Hey, Josh, we had President George W. Bush

633
00:32:56,520 --> 00:32:59,760
Speaker 1: announced that he will and his wife will attend uh

634
00:33:00,040 --> 00:33:03,160
Speaker 1: the inauguration. What do we know about President Trump? Will

635
00:33:03,200 --> 00:33:07,400
Speaker 1: he attend? We don't know. And Jim Cliburn Yesterday's want

636
00:33:07,400 --> 00:33:10,680
Speaker 1: to buy them top allies in Congress said that they're,

637
00:33:11,320 --> 00:33:13,000
Speaker 1: you know, budgeting for a lot of what if they

638
00:33:13,080 --> 00:33:15,320
Speaker 1: do not know whether Temple want to go or not go,

639
00:33:15,480 --> 00:33:17,880
Speaker 1: they kind of have to plan for both scenarios. One

640
00:33:17,880 --> 00:33:21,160
Speaker 1: other thing that they don't know really right now is, uh,

641
00:33:21,360 --> 00:33:24,240
Speaker 1: you know, whether it'll be safe for Biden to, for instance,

642
00:33:24,280 --> 00:33:27,040
Speaker 1: walk down Pennsylvania Avenue, which is normally you know, what

643
00:33:27,200 --> 00:33:31,000
Speaker 1: happens during an inauguration. They say Trump might put out

644
00:33:31,000 --> 00:33:32,800
Speaker 1: a call for a supporters to do what they're doing today,

645
00:33:32,880 --> 00:33:35,240
Speaker 1: come out and protest, in which case maybe the Secret

646
00:33:35,280 --> 00:33:38,080
Speaker 1: Service might not love the idea of Bidom walking down Pennsylvania.

647
00:33:38,440 --> 00:33:41,040
Speaker 1: So it's all up in the air. But yeah, George W.

648
00:33:41,240 --> 00:33:44,240
Speaker 1: Bush continuing to send signals to the party on this.

649
00:33:44,440 --> 00:33:48,840
Speaker 1: He was very early to recognize Biden's victory on November three. Trump,

650
00:33:48,880 --> 00:33:51,719
Speaker 1: of course, has never done that. He's conceded and now

651
00:33:51,960 --> 00:33:54,120
Speaker 1: you know, him, thank you'll attend the inauguration. I think

652
00:33:54,160 --> 00:33:57,280
Speaker 1: it's to sort of move the party past where we're at.

653
00:33:57,320 --> 00:33:58,960
Speaker 1: And as I say, in the Senate, we're seeing some

654
00:33:59,080 --> 00:34:01,520
Speaker 1: of that. Right. We've got thirteen or so who are objecting.

655
00:34:02,080 --> 00:34:05,360
Speaker 1: That means the vast majority thirty seven whatever it is,

656
00:34:05,800 --> 00:34:08,360
Speaker 1: or so are not. Many of them are pretty staunch

657
00:34:08,400 --> 00:34:10,759
Speaker 1: Trump supporters, but they're saying, hey, it's not in the

658
00:34:10,840 --> 00:34:13,400
Speaker 1: constitution for us to just like pick and choose who

659
00:34:13,480 --> 00:34:15,640
Speaker 1: we want to win elections. Yeah, I mean, I was

660
00:34:15,640 --> 00:34:18,000
Speaker 1: just gonna say, an absolute nightmare for the Secret Service

661
00:34:18,160 --> 00:34:22,920
Speaker 1: preparing for literally every eventuality, so many permutations and combinations. Josh,

662
00:34:23,000 --> 00:34:24,520
Speaker 1: thank you. I know you'll keep us up to date

663
00:34:24,640 --> 00:34:26,919
Speaker 1: throughout the day. That is Josh wind Grove, our White

664
00:34:26,960 --> 00:34:32,480
Speaker 1: House correspondent who is in Washington, d C. Thanks for

665
00:34:32,560 --> 00:34:36,000
Speaker 1: listening to Bloomberg Markets podcast. You can subscribe and listen

666
00:34:36,080 --> 00:34:39,560
Speaker 1: to interviews at Apple Podcasts or whatever a podcast platform

667
00:34:39,640 --> 00:34:43,040
Speaker 1: you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn,

668
00:34:43,239 --> 00:34:45,560
Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney.

669
00:34:45,640 --> 00:34:48,319
Speaker 1: Before the podcast, you can always catch us worldwide at

670
00:34:48,360 --> 00:34:49,080
Speaker 1: Bloomberg Radio