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Speaker 1: Welcome to the Bloomberg pim L Podcast. I'm pim Fox

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Speaker 1: along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether at the grocery store or

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Speaker 1: the trading floor. Find the Bloomberg p L Podcast on iTunes,

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Speaker 1: SoundCloud and at Bloomberg dot com. I want to bring

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Speaker 1: in Mark Niquette are fearless Bloomberg politics reporter who has

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Speaker 1: been covering this uh tick by tick every minute. You've

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Speaker 1: probably been up all night. Uh So he's so popular,

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Speaker 1: he's still in fact, he's more popular today than he

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Speaker 1: was yesterday. Um, we're here waiting for Hillary Clinton to speak.

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Speaker 1: She's expected to uh head to a hotel, the New

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Speaker 1: Yorker in Midtown Manhattan to give a concession speech. We're

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Speaker 1: also finding out that President Barack Obama is scheduled to

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Speaker 1: speak from the White House at twelve fifteen. Mark, what's

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Speaker 1: the most important thing to be watching as far as uh,

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Speaker 1: the tenor of these speeches or the substance. Well, I

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Speaker 1: think a lot of it's just going to be the tenor.

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Speaker 1: I mean, how does she present this defeat? And you know,

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Speaker 1: the ability of the country to move forward now. I mean,

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Speaker 1: obviously she has you know, um an army of supporters

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Speaker 1: who are incredibly stunned and disappointed today and you know,

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Speaker 1: just can't believe they're waking up in a in a

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Speaker 1: world where Donald Trump is going to be their president.

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Speaker 1: And you know, she has a sort of a duty

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Speaker 1: now to sort of now that she's lost, you know,

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Speaker 1: bring bring the country together, at least get the people

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Speaker 1: who are behind her to look to her a greater

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Speaker 1: you know good here, and that is, you know, moving

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Speaker 1: the country forward, even though you know it's just going

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Speaker 1: to be incredibly difficult for you know, a lot of

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Speaker 1: her supporters and in the country to accept this result. Marco,

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Speaker 1: I wonder if we could go through some of the

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Speaker 1: policy areas that might not necessarily be at the forefront

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Speaker 1: of everyone's minds. But obviously investors need to pay attention

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Speaker 1: to these things. We've been talking about healthcare stocks. During

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Speaker 1: the opening of the market today, you see big move

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Speaker 1: higher in healthcare. This have to do with drug pricing

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Speaker 1: or is there something else going on? Well, it's probably

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Speaker 1: all wrapped up into the broader you know fight over

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Speaker 1: Obama Affordable Care Act. Yeah, I mean it seems pretty

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Speaker 1: clear that there will be some effort to repeal and

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Speaker 1: you know, replace the sticky wicked of this all. What

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Speaker 1: are the what are the politics of that? Given that

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Speaker 1: you've got to control Republican control in the Senate plus

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Speaker 1: Republican control in the House. Well, now they have the

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Speaker 1: ability to do it. I mean what I was gonna

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Speaker 1: say is the you know, the hang up here all

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Speaker 1: along is what is the replace? I mean, repeal is

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Speaker 1: easy and and Trump has talked about health savings accounts,

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Speaker 1: you know, but we're gonna need a broader plan to emerge.

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Speaker 1: And I think that the markets can really understand that

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Speaker 1: what would be the replacement to you know, obamacareff. In fact,

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Speaker 1: we're gonna you know, trash and start over. So I

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Speaker 1: imagine you've been speaking with political strategists and people pretty

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Speaker 1: close to the Clinton camp. What has the mood been,

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Speaker 1: What has the color band that you've gotten? Mostly just

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Speaker 1: they're stunned. I mean they they really went in thinking that,

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Speaker 1: you know, the odds were in their favor, that sure

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Speaker 1: there was the possibility that Donald Trump could win, but

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Speaker 1: you know, all the dominoes had to fall the right

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Speaker 1: way for that to happen. And that's exactly what did happen.

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Speaker 1: I mean, he won Florida, North Carolina, Ohio, Iowa, all

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Speaker 1: the battleground states. He had to win all that. She

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Speaker 1: all she had to do was win one of those

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Speaker 1: and protect this the Democratic States, and she didn't. She

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Speaker 1: didn't do any of it. And you know, I think,

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Speaker 1: like I said, just stunt that has all happened. And

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Speaker 1: you know, after you know, three years essentially of of

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Speaker 1: running and getting ready to run, you know, it comes

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Speaker 1: to this. Well, and then how about on the Republican side,

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Speaker 1: I mean, I imagine you've also been touched with operatives

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Speaker 1: on the Republican side, both within the Trump camp as

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Speaker 1: well as outside of the camp. I mean, there's still

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Speaker 1: a pretty big bridge to cross here. I mean, how

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Speaker 1: Speaker Ryan in particular, who's going to be speaking in

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Speaker 1: a little bit, certainly has had his issues with Trump.

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Speaker 1: I mean, what's the tenor more broadly among Republicans. I

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Speaker 1: think uncertainty about how it's all going to come together.

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Speaker 1: Because now Republicans, as you said, have power, they have

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Speaker 1: control over everything. But you know, there's a significant gap

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Speaker 1: in the Republican Party led by Paul Ryan, Speaker of

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Speaker 1: the House on think about issues like trade, immigration, where

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Speaker 1: you know, Trump was very far from where the party was,

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Speaker 1: particularly on trade. And you know what's gonna have to

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Speaker 1: happen now is how does sort of the governing class

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Speaker 1: of the Republican Party led by Paul Ryan reconcile with

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Speaker 1: sort of the outsider, you know, different brand of Republicanism

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Speaker 1: that you know Trump now represents is going to bring

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Speaker 1: to the White House. Um, it's just gonna be fascinating

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Speaker 1: to watch, actually, and you know, you see, you know,

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Speaker 1: establishment Republican figures like like Paul Ryan, I think trying

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Speaker 1: to like reconcile this because he never really did get

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Speaker 1: behind Trump in the camp pain and now he has

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Speaker 1: to govern with him. Mark, as we await Mrs Clinton

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Speaker 1: schedule to speak at the New Yorker Hotel, is there

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Speaker 1: a future leader of the Democratic Party that you say,

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Speaker 1: what happens next? Is it Elizabeth Warren? Is that Bernie Sanders?

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Speaker 1: What what happens to the Democrats? Now? That's a great question.

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Speaker 1: That's gonna be one that I think is gonna be

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Speaker 1: a dominant one in the next few days within the

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Speaker 1: within the party because you know, you hear all the

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Speaker 1: handring has already started about while, you know, couldn't we

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Speaker 1: have somebody better than Hillary Clinton as our standard bear

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Speaker 1: in this in this cycle. But you know, the people

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Speaker 1: you think about are like Joe Biden or like you say, Elizabeth,

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Speaker 1: you know, Warren, and it's it's unclear whether they would

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Speaker 1: have had any better, you know, running against um um

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Speaker 1: Donald Trump. And the big question now is what is

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Speaker 1: the Democratic bench? Who are going to be the Democratic money?

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Speaker 1: Well that's the other question exactly. I mean, it's it's

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Speaker 1: there's gonna have to be a fundamental sort of soul

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Speaker 1: searching within the Democratic Party and possibly a realignment because

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Speaker 1: the other thing that was going on in this cycle,

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Speaker 1: you know, the same thing on the Republican side, you

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Speaker 1: saw a push from the left against Hillary Clinton. You know,

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Speaker 1: That's how we saw in Bloomberg Business Week throughout the

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Speaker 1: entire cycle is just as you're just just just as

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Speaker 1: you're describing it. One thing that I thought was really

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Speaker 1: compelling as I watched the results coming in was, uh,

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Speaker 1: the stark divide between rural and urban areas. And I

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Speaker 1: wonder from a political perspective, whether, how, how how abnormal

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Speaker 1: is this from a historical perspective in the United States,

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Speaker 1: of America that there is such a market divide between

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Speaker 1: rural and urban communities. It's not unusual in the sense

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Speaker 1: of of party id or or ideology, where you know,

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Speaker 1: ural America had tended, you know, for a while now

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Speaker 1: to be more conservative, more republican. Um. But you know,

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Speaker 1: one of the things we're going to be looking at

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Speaker 1: today just sort of analyzing that, you know, that stark difference,

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Speaker 1: because if you know, just starting to scratch the surface,

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Speaker 1: you can tell that Donald Trump had much much better

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Speaker 1: and a lot of these rural areas than say Mitt

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Speaker 1: Romney did. So again, are we looking at sort of

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Speaker 1: a fundamental realignment of where um, you know, America is

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Speaker 1: on you know, these issues like you know, trade and

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Speaker 1: immigration and things that you know, we really hadn't thought

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Speaker 1: of a sort of mainstream Republican even if these folks

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Speaker 1: were voting Republican. But there's clearly something going on now

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Speaker 1: that you know, we're going to have to get behind

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Speaker 1: and understand, because you're right, there's just a stark divide

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Speaker 1: in this country between you know, the rural areas and

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Speaker 1: even suburban areas that we thought were going to be

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Speaker 1: a little more divided and and even more favorable for

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Speaker 1: Hillary Clinton. That just we're all in for Donald Trump.

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Speaker 1: Mark a very close uh popular vote as well. Correct. Well,

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Speaker 1: could be that Hillary Clinton ends up winning the popular

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Speaker 1: vote nationwide. So in that case that context tell us

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Speaker 1: about third party candidates? Is that a factor at all

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Speaker 1: in what transpired last night? Well, we're gonna have to

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Speaker 1: see within these individual states that mattered whether the third

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Speaker 1: party would have been enough to change the outcome. Um

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Speaker 1: My initial senses, it probably didn't. That this was really

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Speaker 1: much more an election about Donald Trump and Hillary Clinton,

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Speaker 1: And to the extent that people were voting for third party,

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Speaker 1: it wasn't necessarily diverting votes from one or the other.

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Speaker 1: What is this election going to do for the whole

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Speaker 1: polling industry? There was a story out in the Bloomberg

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Speaker 1: uh this morning talking about how polls just completely blew

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Speaker 1: it that most of the dominant ones, including hours I,

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Speaker 1: had put Hillary Clinton at a steady uh advantage for

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Speaker 1: a lot of the kimp Unlike that Los Angeles Times

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Speaker 1: poll that we spoke about, Well, that wasn't There was

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Speaker 1: an l A Times poll that everybody kind of treated

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Speaker 1: as an outlier. How did they get it so wrong? Well,

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Speaker 1: and again, that's gonna be another thing that has to

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Speaker 1: be reassessed, and I think people are going to be,

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Speaker 1: you know, really looking at hard you know what happened here.

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Speaker 1: I mean, you know, there was a lot of talk

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Speaker 1: after the Brexit vote about how did the polls get so,

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Speaker 1: you know, we're the polls so wrong? You know, there

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Speaker 1: were theories going into this election that the polls might

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Speaker 1: not be trustworthy, that Trump supporters maybe weren't answering the

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Speaker 1: phone when posters called, or they weren't being honest about

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Speaker 1: who they support, where they were really expressing their views

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Speaker 1: on social media and Facebook and Twitter rather than going

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Speaker 1: to more conventional places for their information. But also to

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Speaker 1: be as you just described, call by posters. Hold, I

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Speaker 1: just want to say that the latest difference right now

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Speaker 1: for the national popular vote is for Hillary Clinton to

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Speaker 1: have almost two more votes in the popular vote, So

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Speaker 1: see your point, Mark, But yeah, and the pulling side

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Speaker 1: of it, you know, I think there's gonna have to

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Speaker 1: be a reassessment in that industry too. I mean, you know,

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Speaker 1: a lot of a lot of the success of success

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Speaker 1: of a poll is based on what kind of sample

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Speaker 1: you have, who do you decide to pull cover you've

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Speaker 1: been called on, You've been covering this forever, right, Um,

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Speaker 1: was there a moment last night where something clicked and

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Speaker 1: you thought, boy, that's the game changer, that's the thing

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Speaker 1: we didn't see. I don't think there was. I mean,

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Speaker 1: there was just sort of a running sense during the

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Speaker 1: night that you know this was going to happen, because again,

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Speaker 1: going in, you knew it could happen, but it had

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Speaker 1: to be pick your metaphor the inside straight running the table,

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Speaker 1: and you could see it. You could, Yeah, you could

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Speaker 1: tell that, particularly after Donald Trump won Florida and North Carolina,

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Speaker 1: and then it became this question of, well, if Hillary

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Speaker 1: Clinton was going to win this race, she would have

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Speaker 1: to hold Pennsylvania, Michigan, and Wisconsin. And you could tell

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Speaker 1: just the way those votes were breaking down that it

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Speaker 1: was entirely possible she was not going to hold all

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Speaker 1: three and likely that she probably the big was it

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Speaker 1: was it also the big win for Donald Trump in Ohio.

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Speaker 1: I think Ohio was factored in. I think the feeling

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Speaker 1: going into the race that Donald Trump was probably gonna

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Speaker 1: win Ohio, he was probably gonna win Iowa, but that

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Speaker 1: big and that Ohio, yeah, maybe not that big. I mean,

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Speaker 1: it was it was thought to be a Trump state,

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Speaker 1: but when you look at even the breakdown in Ohio,

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Speaker 1: he won all but seven counties, and he won these

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Speaker 1: huge democratic areas these and it's sort of the classic,

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Speaker 1: you know, narrative that we've thought about for this race,

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Speaker 1: Like in Ohio, he won counties where you have unemployed

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Speaker 1: steel workers and areas that lost all kinds of manufacturing

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Speaker 1: jobs where this appeal to working class voters really resonated. Um.

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Speaker 1: But you know, during the night, it was just you know,

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Speaker 1: you could you could see that, you know, if if

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Speaker 1: she was going to be president, she would have to

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Speaker 1: hold areas that Republicans have no business winning and in

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Speaker 1: some cases have not one since nine you know, I'm

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Speaker 1: talking Pennsylvania and Michigan for example, and you know it happened.

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Speaker 1: I don't want to bring into the conversation Marca Grant.

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Speaker 1: He is the chief fixed income strategist at Hilltop Securities,

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Speaker 1: and Marca, we wanted to follow up on our conversation

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Speaker 1: that we had with you yesterday. Uh, you called the election,

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Speaker 1: what happens next and maybe just give us your reaction

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Speaker 1: to the news. Well, I think that the country was

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Speaker 1: stunned in Europe was stunned. I think a lot of

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Speaker 1: the sell off. Lisa just made a comment about it.

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Speaker 1: I speak with a lot of very large money managers

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Speaker 1: all over the world. There's been a big sell off

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Speaker 1: in Europe, and um, I think that's what is causing

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Speaker 1: to a great extent attends in the thirty year treasuries.

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Speaker 1: Backing up here, I don't think the FAT is going

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Speaker 1: to do anything in December. Wait, wait, holds, I get

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Speaker 1: marked back up. Can you walk us through why a

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Speaker 1: sell off in Europe would make yields in the US

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Speaker 1: go up? Sure, A lot of European institutions have been

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Speaker 1: buying US treasuries and agencies and corporates because our yields

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Speaker 1: are so much higher than European yields. And this Mr

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Speaker 1: Trump's election I nerved a lot of those people and

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Speaker 1: they began to sell and earnest um the US securities.

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Speaker 1: And I think that's having a big impact upon our

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Speaker 1: yields this morning. And we're an investor is counting on

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Speaker 1: an interest rate increase in December? Yes, they were, and

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Speaker 1: I don't think we're going to get one now. I

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Speaker 1: think that I said would be incredibly arrogant, given the

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Speaker 1: volatility and interest rates, and given Mr Trump's election to

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Speaker 1: try to impose that upon the markets. And also a course,

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Speaker 1: with interest rates up like this, borrowing is becoming more

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Speaker 1: expensive and that will certainly also have an impact on

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Speaker 1: the markets. Are you're buying banks right now? I'm looking

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Speaker 1: at JP Morgan shares UH substantially on the I was

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Speaker 1: going to ask David about that, because you've seen bank

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Speaker 1: stocks move higher. For example, Wells Fargo is up by

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Speaker 1: nearly three percent. JP more can chase up more than

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Speaker 1: three Why would bank stocks go higher if there isn't

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Speaker 1: going to be an increase in interest rates? I thought

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Speaker 1: that was holding back their profitability. Well, but again we

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Speaker 1: are seeing bond yields up, so that's a plus for

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Speaker 1: them in terms of their ability to earn money on

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Speaker 1: their whole days. And then you have to consider what

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Speaker 1: happens to the restrictions on their business. You know, the

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Speaker 1: Frank Act. You know, do you see changes there under

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Speaker 1: a Republican president of Republican Congress. Certainly anticipation that, you know,

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Speaker 1: the the regulatory environment will become more favorable for the banks,

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Speaker 1: mark you know, to what extent? You know you were

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Speaker 1: talking about how there's been a lot of selling from

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Speaker 1: European investors. To what extent are we seeing selling from

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Speaker 1: European investors and buying from US investors? I think a

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Speaker 1: lot of US investors are standing back. A number of

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Speaker 1: very large US institutions don't want to do anything for

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Speaker 1: the moment, until the death settles. So I think you're

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Speaker 1: seeing this selling foreign selling and US investors kind of

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Speaker 1: standing pad until they can see what happens. And the

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Speaker 1: comment that was just made on regulations for the banks,

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Speaker 1: I think that's what's driving the bank stocks hire is

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Speaker 1: the thought that there will be far fewer regulations. And

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Speaker 1: Mr Trump and Mr Obama were certainly in the MS.

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Speaker 1: Clinton and people are taking a more positive approach to

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Speaker 1: financials right now. Mark Grant that you've previously spoken about

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Speaker 1: the natural gas and energy industry, and I'm wondering if

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Speaker 1: that is still an area that is going to be

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Speaker 1: affected in your mind by this by Donald Trump's victory.

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Speaker 1: I think that the natural gas oil US fracking firms,

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Speaker 1: we'll get a very positive impact from Donald Trump being president. UH.

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Speaker 1: He uh has made it very clear and his policies

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Speaker 1: that he wants to encourage that as opposed to buying

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Speaker 1: oil from foreign countries that have a decidedly a different

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Speaker 1: take on moral standards and values, and we do, and

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Speaker 1: I must say that is something support. You know. I'm

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Speaker 1: looking at the thirty year yield up to two points

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Speaker 1: almost two eight percent now from two point six yesterday.

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Speaker 1: Will this stick? I mean at year end, are we

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Speaker 1: gonna be looking at at three year yields are even

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Speaker 1: higher than this or will they come back down? I

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Speaker 1: think they're going to come back down as people adjust

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Speaker 1: to the fact that Donald Trump is going to be

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Speaker 1: the president, and I think there'll be some more stability

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Speaker 1: in the market. I think, as I said, we're seeing

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Speaker 1: a lot of foreign selling which is causing this backup,

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Speaker 1: and the U S institutions aren't picking up the slacks.

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Speaker 1: So I'm kind of a waiting the things stabilized, and

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Speaker 1: then I think it will be a very good opportunity

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Speaker 1: to be a buyer. Well, I want to thank you

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Speaker 1: very much a Mark Grant joining us as the chief

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Speaker 1: fixed income strategist for Hilltop Securities. He was on the

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Speaker 1: program yesterday and he said that he believed Donald Trump

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Speaker 1: was going to become the next president at the United States.

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Speaker 1: He said that was his biggest contrarian call, and he

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Speaker 1: got it right, and he did get it right, and

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Speaker 1: thank you for beating with us. What better way than

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Speaker 1: to sort of take that and introduce Carl rick O.

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Speaker 1: Donna are expert when it comes to the economy, He's

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Speaker 1: the chief expert when it comes to james Ville, Wisconsin.

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Speaker 1: Well in a way, he's been he's been there, and

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Speaker 1: and there's a reason for this is because, okay, Carl

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Speaker 1: um as the chief US economist for Bloomberg Intelligence. Sometimes

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Speaker 1: the you know, economist actually hits the ground and you

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Speaker 1: go and see why is Jamesville, Wisconsin interesting in this election? Uh?

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Speaker 1: Post election debate? Boy, it is really the key stone

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Speaker 1: of what happened overnight. So Jamesville, Wisconsin was the site

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Speaker 1: of pickup manufacturing for General Motors. The factory was closed down.

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Speaker 1: And so these are the December two exactly. These are

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Speaker 1: the older white males who tend to have high school

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Speaker 1: education or some college who went overwhelmingly in favor of

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Speaker 1: Donald Trump. Uh. Now, this message right as we as

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Speaker 1: we look at the exit polls and the wound licking

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Speaker 1: and the reassessment all occurs, what we really have to

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Speaker 1: do is look where the surprises occurred, and the surprises

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Speaker 1: occurred across the rust belt. Ohio and Indiana were leaning

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Speaker 1: towards Trump. But when we look to states like Pennsylvania,

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Speaker 1: which was supposed to be in the blue column, UH,

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Speaker 1: that went for Trump. UH, Michigan same story. UH, Minnesota

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Speaker 1: still too close to call. UH in Wisconsin was the

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Speaker 1: game changer. Now Hillary supposedly UH did not visit Wisconsin

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Speaker 1: since the primaries here, so this is UH. We have

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Speaker 1: to just give Carl the recognition that he deserves because truly, Carl,

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Speaker 1: I know, off Mike and off camera, for the last

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Speaker 1: really eight to ten months, twelve months, you have been

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Speaker 1: steadfast in your analysis of the election saying that you

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Speaker 1: really thought that Donald Trump was going to prevail, especially

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Speaker 1: that he would carry rust belt states. The free trade

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Speaker 1: message does not ring well in those states because those

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Speaker 1: are the states, places like Jamesville, Wisconsin, where workers have

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Speaker 1: really felt the blunt edge of free trade agreements. So

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Speaker 1: let's break that down. Let's talk about what specifically, UH,

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Speaker 1: they objected to some of the people who wanted some

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Speaker 1: change and UH discard and to discard the trade trade agreements,

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Speaker 1: and what are the implications the economic complications. Well, I

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Speaker 1: think one of the key statistics here is look at

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Speaker 1: the dramatic support from unions for Hillary Clinton. However, exit

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Speaker 1: polls show she only carried about fifty one percent of

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Speaker 1: union votes. That means there were a lot of reruns

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Speaker 1: of the Reagan Democrats that are now Trump Democrats, and

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Speaker 1: I think they are very focused on issues like free

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Speaker 1: trade because every time a trade deal comes down the pike, Uh,

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Speaker 1: they don't necessarily feel the cheaper prices that they're getting

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Speaker 1: at Walmart, but they are seeing jobs fleeing across the

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Speaker 1: border into Mexico or elsewhere in the global economy, and

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Speaker 1: they don't see other jobs replacing those. So they feel

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Speaker 1: like free trade has been a losing bet for them.

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Speaker 1: So what happens now? What happens now? I think that uh,

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Speaker 1: you know, Trump has to build his coalition, and uh,

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Speaker 1: you know, the first thing you do when you arrive

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Speaker 1: at the White House is figure out how you're going

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Speaker 1: to uh win your second term. And if he wants

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Speaker 1: to win a second term, he has to hang on

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Speaker 1: to that coalition of rust belt states, which means he

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Speaker 1: has to do something to help them. So there's gonna

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Speaker 1: be a real test for free trade policy. And questioning

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Speaker 1: the merits of free trade, especially in these rust belt states. Uh,

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Speaker 1: and uh, you know that's going to be critical to

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Speaker 1: whether he has a successful term. Now that being said,

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Speaker 1: it's very unused usual for the White House and both

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Speaker 1: the Houses of Congress to all fall under one party control,

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Speaker 1: especially to fall under Republican control. So we've seen that

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Speaker 1: three times in the post World War two period, once

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Speaker 1: in nineteen fifty two with President Eisenhower and then in

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Speaker 1: two thousand and two thousand and four with President Bush.

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Speaker 1: Hang on, Carl, because we want to just bring into

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Speaker 1: the conversation Matt Maylee, equity strategist at Miller tay Back.

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Speaker 1: And Matt, thanks for being with us. Your reaction to

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Speaker 1: the election results, and then what you have been hearing

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Speaker 1: from your customers and clients. Well, number one, the reaction, Uh,

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Speaker 1: you know, it was funny because last night, of course,

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Speaker 1: this down hundred points on the SMP was way overdone.

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Speaker 1: To be perfectly honest with you, I think that, uh,

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Speaker 1: this is a little bit overdone. Back to the bounces,

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Speaker 1: been a little overdone. There's still gonna beat. Markets don't

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Speaker 1: like uncertainty, and uh, there's still gonna be a lot

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Speaker 1: of uncertainty out there, and we also have you know,

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Speaker 1: yield back up getting close to two on the tenure

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Speaker 1: on the tenure yield. Uh, So I think that, uh,

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Speaker 1: if people want to buy, I think they'll be able

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Speaker 1: to buy at lower levels as we move forward. As

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Speaker 1: for our customers, UM, they're you know, cautiously optimistic. They're

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Speaker 1: trying to you know, put trying to put a good

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Speaker 1: light on it. But more than anything else, they're trying

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Speaker 1: to figure out what groups do they need to buy,

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Speaker 1: what groups will do best in a Trump presidency. And uh,

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Speaker 1: that's really what they're working on right now, and they're

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Speaker 1: asking a lot of questions on that on that front.

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Speaker 1: So so, Matt, if you think that prices will go

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Speaker 1: lower here and evaluations will will deteriorate further, are you

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Speaker 1: suggesting that people sort of hold back and sort of

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Speaker 1: keep their cash until there's a more attractive entry point. Yes, exactly.

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Speaker 1: You know, before this all happened, I had been saying,

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Speaker 1: you know, if if pull the rabbit out of a hat,

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Speaker 1: which which he did, Uh, this would not be the

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Speaker 1: end of the world. We don't have to sell everything.

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Speaker 1: So I'm certainly not saying that this bounce is something

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Speaker 1: we have to sell aggressively. But I do think with

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Speaker 1: people who have money on the sidelines, they should be

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Speaker 1: able to get it get back in at lower levels.

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Speaker 1: Just again, because it was the uncertainty out there, and

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Speaker 1: and also with the way the yields are looking at

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Speaker 1: that that's gonna be a problem at some point, you know, Carl,

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Speaker 1: So that was saying that that Trump pulled a money

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Speaker 1: out of a hat, but you were saying, you know,

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Speaker 1: this is sort of actually the expected outcome at least

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Speaker 1: when you were looking at the picture. Is there anything

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Speaker 1: that you can say concretely about what Donald Trump's economic

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Speaker 1: proposals will look like and how it will affect markets? Well?

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Speaker 1: First of all, uh, you know, looking back through past

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Speaker 1: presidential elections, the move on the morning after tends to

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Speaker 1: be negative on average, slightly better than the one percent

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Speaker 1: decline about point seven on the spire. Uh that whatever

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Speaker 1: that move is on the morning after tends to be

431
00:23:45,119 --> 00:23:47,440
Speaker 1: sustained for the next week and month, But it doesn't

432
00:23:47,480 --> 00:23:51,400
Speaker 1: tell us very much about market performance one year down

433
00:23:51,440 --> 00:23:53,399
Speaker 1: the road. I just want to let everyone know that

434
00:23:53,440 --> 00:23:56,320
Speaker 1: we are of course awaiting Hillary Clinton. She will is

435
00:23:56,359 --> 00:23:59,520
Speaker 1: scheduled to speak in just about two and a half minutes,

436
00:23:59,520 --> 00:24:01,160
Speaker 1: and we don't know whether it's going to be on time,

437
00:24:01,200 --> 00:24:02,639
Speaker 1: but we will of course bring that to you in

438
00:24:02,720 --> 00:24:05,520
Speaker 1: its entirety. She has scheduled to speak at the New

439
00:24:05,600 --> 00:24:10,520
Speaker 1: Yorker Hotel in Midtown, Manhattan, Y. Yes, So to jump

440
00:24:10,560 --> 00:24:15,240
Speaker 1: into actually answer Lisa's question about what policy would look like,

441
00:24:15,800 --> 00:24:19,480
Speaker 1: I think in some regards, right, we're mourning m O

442
00:24:19,800 --> 00:24:22,600
Speaker 1: you R N I N G in New York at least,

443
00:24:23,160 --> 00:24:27,320
Speaker 1: you know, collectively, given the difference between the the outcome

444
00:24:27,320 --> 00:24:33,520
Speaker 1: in New York versus national outcomes. But but this looks

445
00:24:34,320 --> 00:24:37,280
Speaker 1: a little bit like mourning in America back in nineteen

446
00:24:37,320 --> 00:24:41,760
Speaker 1: eighty under President Reagan. Here because we're embarking on uh,

447
00:24:41,840 --> 00:24:45,240
Speaker 1: you know, the next four years probably having a significant

448
00:24:45,400 --> 00:24:50,399
Speaker 1: deficit financed government spending, whether it's infrastructure or defense or

449
00:24:50,440 --> 00:24:54,560
Speaker 1: what not. UH, tax reform and most likely tax cuts

450
00:24:54,560 --> 00:24:58,879
Speaker 1: that hang on. Let Matt Malee, even hearing what Carl

451
00:24:59,200 --> 00:25:02,520
Speaker 1: has been described having, do you concur with him? Well,

452
00:25:02,640 --> 00:25:05,280
Speaker 1: the one of the things that yes and no, which

453
00:25:05,320 --> 00:25:07,040
Speaker 1: is not the probably the answer you really wanted. But

454
00:25:07,080 --> 00:25:09,439
Speaker 1: on the one hand, and the you know, this was

455
00:25:09,440 --> 00:25:12,960
Speaker 1: supposed to be a election of change and nobody thought

456
00:25:13,000 --> 00:25:14,880
Speaker 1: we were going to get it. Well, sure enough we did,

457
00:25:15,240 --> 00:25:17,960
Speaker 1: and that's going to be positive. Uh just just just

458
00:25:18,000 --> 00:25:19,680
Speaker 1: the way people say, let's give him a shot, let's

459
00:25:19,720 --> 00:25:21,320
Speaker 1: let me we We were so sick and tired of

460
00:25:21,320 --> 00:25:23,280
Speaker 1: what's been going on in Washington and nothing has been

461
00:25:23,280 --> 00:25:25,800
Speaker 1: gotten done. But they're gonna have to get fall through

462
00:25:25,840 --> 00:25:28,720
Speaker 1: and get some things done. My concern is, though, is

463
00:25:28,760 --> 00:25:31,760
Speaker 1: that we have because of you know, what's happened over

464
00:25:31,800 --> 00:25:33,840
Speaker 1: the last eight years with what the FETE has done,

465
00:25:33,840 --> 00:25:36,879
Speaker 1: has caused all these corporations, uh to spend you know,

466
00:25:37,280 --> 00:25:39,480
Speaker 1: add more depth. There's more total debt in in the

467
00:25:39,520 --> 00:25:41,439
Speaker 1: in the U S and there was in two thousand seven.

468
00:25:41,680 --> 00:25:44,280
Speaker 1: More importantly, the depth that's been put on is not debt.

469
00:25:44,320 --> 00:25:46,760
Speaker 1: That that that's helped service that debt is stuff to

470
00:25:46,800 --> 00:25:49,199
Speaker 1: buy back shares. They have not had any kind of

471
00:25:49,240 --> 00:25:51,600
Speaker 1: investment in their own businesses. That do not does not

472
00:25:52,240 --> 00:25:54,359
Speaker 1: provide the kind of foundation that we need that we

473
00:25:54,520 --> 00:25:56,960
Speaker 1: usually get for a nice, big recovery. And we're already

474
00:25:56,960 --> 00:25:59,360
Speaker 1: eight years in the recovery. So I wouldn't be surprised

475
00:25:59,359 --> 00:26:00,800
Speaker 1: that we saw a little will pull back. Can we

476
00:26:00,840 --> 00:26:05,920
Speaker 1: just do okay, okay? Can we just do December interest rates.

477
00:26:06,240 --> 00:26:09,840
Speaker 1: Are we still on for that basis point increase? I

478
00:26:09,880 --> 00:26:12,320
Speaker 1: believe a lot of people are saying, now it's off

479
00:26:12,320 --> 00:26:14,520
Speaker 1: the table. I don't think so. I think that uh,

480
00:26:14,720 --> 00:26:16,840
Speaker 1: first of all, Number one, the FED is more market

481
00:26:16,880 --> 00:26:19,959
Speaker 1: dependent than most people realize. There's certainly not totally marked dependent.

482
00:26:20,440 --> 00:26:23,040
Speaker 1: But if the market can hold in there, uh, you know,

483
00:26:23,080 --> 00:26:24,760
Speaker 1: even if it pulls back a little bit, but if

484
00:26:24,800 --> 00:26:27,679
Speaker 1: we you know, I think the Fed, you know, they

485
00:26:27,680 --> 00:26:29,280
Speaker 1: don't want to be They're already losing a lot of

486
00:26:29,320 --> 00:26:31,840
Speaker 1: credibility anyway that you know, the royal pride, wolf, etcetera.

487
00:26:32,400 --> 00:26:34,479
Speaker 1: If they can do it, if the markets are steady

488
00:26:34,560 --> 00:26:36,840
Speaker 1: and we don't see any real crazy things coming out

489
00:26:36,880 --> 00:26:39,199
Speaker 1: of Trump or with the economy, I think they'll go

490
00:26:39,240 --> 00:26:42,040
Speaker 1: ahead and go a lot of people saying it completely

491
00:26:42,080 --> 00:26:43,880
Speaker 1: takes it off the table. And that's what we're seeing,

492
00:26:43,920 --> 00:26:46,360
Speaker 1: of course, with the with the the short term rates

493
00:26:46,359 --> 00:26:48,080
Speaker 1: staying low and the long term rates moving up, which

494
00:26:48,080 --> 00:26:50,560
Speaker 1: is positive for the banks, but we want to break

495
00:26:50,560 --> 00:26:52,959
Speaker 1: in there. I mean with the longer term yields rising.

496
00:26:53,040 --> 00:26:55,040
Speaker 1: I want to talk about inflation. When you're talking about

497
00:26:55,040 --> 00:26:58,400
Speaker 1: how companies haven't been necessarily reinvesting in sort of development

498
00:26:58,520 --> 00:27:03,679
Speaker 1: and pro growth type of activities. Do you buy what

499
00:27:03,760 --> 00:27:06,480
Speaker 1: the bond market is telling us today, which is the

500
00:27:06,600 --> 00:27:10,760
Speaker 1: inflation will pick up under Donald Trump as president. Lisa,

501
00:27:10,880 --> 00:27:14,320
Speaker 1: I think that it's telling us more inflation, but it's

502
00:27:14,320 --> 00:27:17,720
Speaker 1: telling us more inflation as a result of faster economic growth.

503
00:27:17,760 --> 00:27:20,080
Speaker 1: So there's two major trends we really have to keep

504
00:27:20,280 --> 00:27:22,480
Speaker 1: our eye on here. One is the fact that the

505
00:27:22,520 --> 00:27:24,800
Speaker 1: economy has gone through full employment. So we may be

506
00:27:24,880 --> 00:27:28,359
Speaker 1: worried about market disruptions and whatnot, but taking the unemployment

507
00:27:28,440 --> 00:27:31,399
Speaker 1: rate from ten percent down to five percent means about

508
00:27:31,480 --> 00:27:35,280
Speaker 1: fifteen million workers got a job. That makes the economy

509
00:27:35,359 --> 00:27:39,040
Speaker 1: much more resilient and able to withstand any uncertainty or

510
00:27:39,520 --> 00:27:43,240
Speaker 1: shocks here. So UH one factor is we've were very

511
00:27:43,280 --> 00:27:45,480
Speaker 1: close to full employment or we've gone through it, which

512
00:27:45,480 --> 00:27:48,399
Speaker 1: means more wage pressures next year, which will provide a

513
00:27:48,440 --> 00:27:51,359
Speaker 1: significant tail wind to consumer spending. The other half of

514
00:27:51,400 --> 00:27:54,720
Speaker 1: the story is government spending. So there's been this gridlock

515
00:27:54,880 --> 00:27:59,720
Speaker 1: between the administration and Congress over expanding fiscal stimulus. H

516
00:27:59,800 --> 00:28:02,720
Speaker 1: that is likely to go by the wayside given the

517
00:28:02,880 --> 00:28:07,879
Speaker 1: Republican UH sweep across the halls of Washington, d C.

518
00:28:08,400 --> 00:28:11,520
Speaker 1: And so if we're looking at more government spending, UH,

519
00:28:11,640 --> 00:28:15,200
Speaker 1: tax cuts UH, and wider deficits that the Loane tells

520
00:28:15,240 --> 00:28:17,400
Speaker 1: you you should be looking at the higher interest rates.

521
00:28:17,520 --> 00:28:19,639
Speaker 1: Can I just put this on the table and Matt

522
00:28:19,680 --> 00:28:21,840
Speaker 1: you come in on this as well. But Carl, I

523
00:28:22,040 --> 00:28:25,320
Speaker 1: want to kind of continue that thread from Chainsville, Wisconsin

524
00:28:25,359 --> 00:28:28,639
Speaker 1: and the production of automobiles or the non production. Looking

525
00:28:28,680 --> 00:28:32,320
Speaker 1: at the shares Afford Motor they are down nearly three percent. Uh,

526
00:28:32,440 --> 00:28:36,560
Speaker 1: you see steel stocks moving higher. But once you could

527
00:28:37,320 --> 00:28:39,920
Speaker 1: tell us a little bit about t P T t P,

528
00:28:40,640 --> 00:28:44,880
Speaker 1: the trade agreement and what you believe will happen. God,

529
00:28:44,960 --> 00:28:47,200
Speaker 1: Lisa's l I just I really wanted to get Matt

530
00:28:47,240 --> 00:28:49,200
Speaker 1: real quick your take on inflation. Do you think it's

531
00:28:49,200 --> 00:28:51,160
Speaker 1: going to pick up? Well? One of the things that

532
00:28:51,440 --> 00:28:56,000
Speaker 1: I worry about is, uh, this whole increases ciscal spending. Yes,

533
00:28:56,040 --> 00:28:58,200
Speaker 1: it's it's coming, but when is it coming? I Mean

534
00:28:58,200 --> 00:29:01,680
Speaker 1: there's a reason that that that there's a presidential election cycle,

535
00:29:01,720 --> 00:29:04,200
Speaker 1: and the reason for that is that when they anytime

536
00:29:04,200 --> 00:29:08,280
Speaker 1: a new president comes in, especially if they have a majority,

537
00:29:08,360 --> 00:29:11,640
Speaker 1: they want to put things in that will help them

538
00:29:11,800 --> 00:29:14,560
Speaker 1: get re elected down the road. They make the tough

539
00:29:14,600 --> 00:29:17,520
Speaker 1: decisions in the first year that they may they pass

540
00:29:17,600 --> 00:29:19,920
Speaker 1: things in the first year in the fiscal side, but

541
00:29:20,000 --> 00:29:22,160
Speaker 1: those things tend to kick in in the third and

542
00:29:22,200 --> 00:29:24,520
Speaker 1: fourth year, so it helps them get re elected. That's

543
00:29:24,520 --> 00:29:27,000
Speaker 1: why the presidential election cycle is not just doesn't just

544
00:29:27,040 --> 00:29:29,240
Speaker 1: happened by by chance. That's why it happens that way.

545
00:29:29,440 --> 00:29:31,719
Speaker 1: So I'm worried that some of these things that that

546
00:29:31,720 --> 00:29:34,880
Speaker 1: that we're talking about here on the fiscal side will

547
00:29:34,920 --> 00:29:38,040
Speaker 1: not really help the economy uh immediately, And that's why

548
00:29:38,040 --> 00:29:40,520
Speaker 1: I'm a little bit more concerned about two thousand seventeen.

549
00:29:40,720 --> 00:29:43,920
Speaker 1: It might be very helpful down the road, but nearer term,

550
00:29:43,960 --> 00:29:45,760
Speaker 1: when I'm talking about near term, over the next year,

551
00:29:45,960 --> 00:29:48,400
Speaker 1: it may not be as positive as some people are thinking.

552
00:29:48,520 --> 00:29:51,720
Speaker 1: Right now. Fiscal spending is positive for the economy, but

553
00:29:51,800 --> 00:29:54,720
Speaker 1: it usually gets pushed out because of the way that

554
00:29:55,400 --> 00:29:57,720
Speaker 1: just the way politics works. They like to make sure

555
00:29:58,080 --> 00:30:01,000
Speaker 1: that those programs kick in and third and fourth year

556
00:30:01,240 --> 00:30:03,440
Speaker 1: of an administration, so it helps them get reelected down

557
00:30:03,440 --> 00:30:06,200
Speaker 1: the road. I I agree with the general shape of

558
00:30:06,240 --> 00:30:09,760
Speaker 1: the profile that those policies maybe things that blossom a

559
00:30:09,760 --> 00:30:11,920
Speaker 1: little later in the term. Uh. That being said, I

560
00:30:12,000 --> 00:30:15,240
Speaker 1: do think that tax reform, both corporate tax reform UH

561
00:30:15,240 --> 00:30:20,560
Speaker 1: and UH individual income tax have returned, will be high priorities. Uh.

562
00:30:20,600 --> 00:30:23,920
Speaker 1: They were already high priorities for candidate Trump. But I

563
00:30:23,960 --> 00:30:27,080
Speaker 1: think that Paul Ryan in the House of Representatives is

564
00:30:27,080 --> 00:30:29,160
Speaker 1: really going to want to strike while the iron's hot,

565
00:30:29,400 --> 00:30:32,040
Speaker 1: uh and make some significant progress on that front. And

566
00:30:32,080 --> 00:30:36,240
Speaker 1: there also could be foreign earnings repatriation has been one

567
00:30:36,280 --> 00:30:38,959
Speaker 1: of the priorities of the House Republicans Carbadna, can can

568
00:30:39,000 --> 00:30:41,400
Speaker 1: we do a little on trade and what this means

569
00:30:41,440 --> 00:30:44,920
Speaker 1: for companies that depend on trade? Absolutely? So I think

570
00:30:44,960 --> 00:30:48,040
Speaker 1: that you know, uh, you know, looking at that things

571
00:30:48,040 --> 00:30:51,080
Speaker 1: like the t p P UH. You know, initially President

572
00:30:51,120 --> 00:30:55,040
Speaker 1: Obama UH suggested that maybe he was optimistic he could

573
00:30:55,040 --> 00:30:58,120
Speaker 1: push it through before the end of his term, basically

574
00:30:58,480 --> 00:31:01,800
Speaker 1: ramming it through a lay dut Congress UH. And I'm

575
00:31:01,840 --> 00:31:04,400
Speaker 1: not you know, if you look at those rust belt states,

576
00:31:04,440 --> 00:31:08,400
Speaker 1: they are very anti t p P on anti trade agreements,

577
00:31:08,720 --> 00:31:13,640
Speaker 1: and so what possibly his last ditch efforts to push

578
00:31:13,640 --> 00:31:18,120
Speaker 1: that through. Uh. And also uncertainty that was created through

579
00:31:18,160 --> 00:31:22,400
Speaker 1: the primaries with Bernie Sanders UH that that Hillary really

580
00:31:22,520 --> 00:31:24,840
Speaker 1: was not against the t p P or would be

581
00:31:24,880 --> 00:31:28,760
Speaker 1: happy with some very cosmetic changes to it before she

582
00:31:28,800 --> 00:31:32,080
Speaker 1: would jump on board. Tim Caine also a big pro

583
00:31:32,200 --> 00:31:38,160
Speaker 1: what trade, uh politician. Uh, that uncertainty was maybe just

584
00:31:38,400 --> 00:31:44,240
Speaker 1: enough to push Donald Trump over the edge in Minnesota, Wisconsin, Michigan, Ohio,

585
00:31:44,480 --> 00:31:48,040
Speaker 1: Pennsylvania and throughout the rust belt. Matt I imagined that

586
00:31:48,160 --> 00:31:52,840
Speaker 1: right now you're looking through all the different possible proposals

587
00:31:52,840 --> 00:31:55,320
Speaker 1: and doing research on companies that could benefit from it.

588
00:31:56,000 --> 00:31:59,240
Speaker 1: What are some of the stocks that you're looking at, uh,

589
00:31:59,360 --> 00:32:02,880
Speaker 1: that you're waiting to get cheap enough to jump on. Well,

590
00:32:02,960 --> 00:32:06,480
Speaker 1: it's interesting the couple of things that that we we want.

591
00:32:06,480 --> 00:32:09,440
Speaker 1: I mean, obviously, the steeper yel curve is very positive

592
00:32:09,440 --> 00:32:11,720
Speaker 1: for the bank stocks, and they they have all uh

593
00:32:11,760 --> 00:32:14,080
Speaker 1: they've already had a nice run and they're moving much

594
00:32:14,120 --> 00:32:17,320
Speaker 1: higher today. Uh. But I'd like to Again, maybe it's

595
00:32:17,320 --> 00:32:19,000
Speaker 1: more wishful thinking, but I do think the mark will

596
00:32:19,000 --> 00:32:21,120
Speaker 1: pull back, and these are the things I'll be looking at.

597
00:32:21,480 --> 00:32:22,920
Speaker 1: The other areas that I don't think a lot of

598
00:32:22,960 --> 00:32:25,120
Speaker 1: people are talking about. Obviously, people are talking about healthcare

599
00:32:25,200 --> 00:32:27,440
Speaker 1: right now again that that may be a little bit

600
00:32:27,440 --> 00:32:29,480
Speaker 1: of a short covering rally. We may get another opportunity

601
00:32:29,480 --> 00:32:31,200
Speaker 1: to buy them a little bit cheaper levels. But the

602
00:32:31,240 --> 00:32:33,320
Speaker 1: one area that I don't think people are looking at

603
00:32:33,320 --> 00:32:35,200
Speaker 1: it's quite as much as they should be, isn't the

604
00:32:35,240 --> 00:32:37,719
Speaker 1: defense stocks. So some of these stocks, again they've had

605
00:32:37,800 --> 00:32:41,520
Speaker 1: a nice bounce, But the situation in Syria, I don't

606
00:32:41,560 --> 00:32:45,280
Speaker 1: think people I'm not an expert on on on international relations,

607
00:32:45,320 --> 00:32:48,320
Speaker 1: but I do believe that the situation in Syria is

608
00:32:48,440 --> 00:32:51,760
Speaker 1: much more uh involved than than some people think. And uh,

609
00:32:52,040 --> 00:32:54,120
Speaker 1: it's very very important to the Russians. They've moved in

610
00:32:54,160 --> 00:32:57,440
Speaker 1: there very very carefully, a very very in a major way.

611
00:32:57,840 --> 00:33:00,440
Speaker 1: And uh, that may be a bigger flat point that

612
00:33:01,000 --> 00:33:02,920
Speaker 1: It's funny because we all worry about a black swan.

613
00:33:02,960 --> 00:33:05,200
Speaker 1: It's something that comes out of the blue. Well sometimes

614
00:33:05,200 --> 00:33:07,400
Speaker 1: a black swan. Sometimes we get a big event after

615
00:33:07,480 --> 00:33:09,640
Speaker 1: something of something we already know about, but we just

616
00:33:09,680 --> 00:33:11,280
Speaker 1: don't realize as big as it is. I was just

617
00:33:11,280 --> 00:33:14,560
Speaker 1: gonna tell you a Lockheed Martin shares are up four

618
00:33:14,680 --> 00:33:17,600
Speaker 1: and three quarters of a percent right now, and and

619
00:33:18,160 --> 00:33:19,840
Speaker 1: I think that these are ones that could go a

620
00:33:19,880 --> 00:33:21,840
Speaker 1: lot higher. I mean again, I expect the market to

621
00:33:21,840 --> 00:33:23,760
Speaker 1: pull back a little bit. Nothing moves on a straight line.

622
00:33:24,040 --> 00:33:26,800
Speaker 1: I think it would be positive. How but hang on

623
00:33:26,800 --> 00:33:28,920
Speaker 1: a second, man, I just want to understand something, because

624
00:33:29,200 --> 00:33:31,760
Speaker 1: prior to the results of the election, you had many

625
00:33:32,000 --> 00:33:37,800
Speaker 1: equity strategists explain why a Clinton victory would be better

626
00:33:37,880 --> 00:33:41,480
Speaker 1: for the stock market than a Trump victory. And yet

627
00:33:41,520 --> 00:33:44,160
Speaker 1: today what we see is a rally and you just

628
00:33:44,600 --> 00:33:47,360
Speaker 1: nailed it, right, Lockheed Martin. The shares are up four

629
00:33:47,400 --> 00:33:50,760
Speaker 1: and a half, Raytheon is up six, General Dynamics is

630
00:33:50,840 --> 00:33:52,920
Speaker 1: up four. I mean, I could go on and on.

631
00:33:53,040 --> 00:33:56,360
Speaker 1: So I'm just wondering, how is it that the thinking,

632
00:33:56,400 --> 00:34:00,080
Speaker 1: the perspective can change so radically when just the the

633
00:34:00,160 --> 00:34:02,800
Speaker 1: day everyone was saying Clinton that would be good for

634
00:34:02,800 --> 00:34:05,680
Speaker 1: the stock market. Trump would be bad for the stock market.

635
00:34:05,760 --> 00:34:08,759
Speaker 1: Make any sense? Well, I think the biggest difference are

636
00:34:08,800 --> 00:34:12,440
Speaker 1: the biggest surprise, and and what people were not expecting

637
00:34:13,040 --> 00:34:16,319
Speaker 1: was for either side, but especially the GOP to win

638
00:34:16,360 --> 00:34:19,720
Speaker 1: the whole the whole combang and so uh. In other words,

639
00:34:19,920 --> 00:34:23,080
Speaker 1: everybody's been saying, hey, divided government is really good, and

640
00:34:23,120 --> 00:34:26,760
Speaker 1: that has absolutely been the case historically, but this time around,

641
00:34:26,760 --> 00:34:28,680
Speaker 1: people are like, wait a minute, we are sick and

642
00:34:28,760 --> 00:34:32,239
Speaker 1: tired of of nothing getting done. So I think that

643
00:34:32,400 --> 00:34:35,719
Speaker 1: people are are something that's going. Okay, something's going to change.

644
00:34:35,760 --> 00:34:37,160
Speaker 1: You know, he may not get as much as if

645
00:34:37,160 --> 00:34:38,879
Speaker 1: we don't want him to get us, maybe as much

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00:34:38,880 --> 00:34:41,800
Speaker 1: as everything that he's talked about and not letting anybody

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00:34:41,800 --> 00:34:44,000
Speaker 1: in the country and all sorts of other things. But

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00:34:44,200 --> 00:34:47,680
Speaker 1: they do feel that we need change, and if it's

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00:34:47,680 --> 00:34:49,520
Speaker 1: going to happen, the only way it's going to happen

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00:34:49,560 --> 00:34:51,400
Speaker 1: is if we have the president and both houses on

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00:34:51,480 --> 00:34:54,280
Speaker 1: the same side. This gives us more of a chance

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00:34:54,320 --> 00:34:58,040
Speaker 1: to see some of the changes, get something through, something passed. Uh.

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00:34:58,040 --> 00:34:59,600
Speaker 1: And let's say that a lot of these people didn't

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00:34:59,600 --> 00:35:01,279
Speaker 1: like Trump's so much, but it's like, let's give him

655
00:35:01,280 --> 00:35:03,040
Speaker 1: a trial. Let's be we've been doing the same thing

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00:35:03,080 --> 00:35:05,359
Speaker 1: for how many decades. It hasn't worked in the last

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00:35:05,360 --> 00:35:08,200
Speaker 1: two decades. Let's try something else. So I think that's

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00:35:08,239 --> 00:35:11,240
Speaker 1: the change here. I know that sounds very good, uh backward,

659
00:35:11,280 --> 00:35:14,359
Speaker 1: but I mean, let's we we people want change. And

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00:35:14,600 --> 00:35:16,239
Speaker 1: I have been saying for the last couple of weeks

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00:35:16,360 --> 00:35:18,799
Speaker 1: that a divided government would actually be negative from the

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00:35:18,800 --> 00:35:20,919
Speaker 1: market because people are so sick of it. And now

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00:35:20,960 --> 00:35:23,160
Speaker 1: that we're not getting it, that's the surprise that people

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00:35:23,320 --> 00:35:26,040
Speaker 1: uh uh not so much. The Clinton loss is that

665
00:35:26,120 --> 00:35:29,160
Speaker 1: we have a one uh, you know, the Republicans having

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00:35:29,160 --> 00:35:32,120
Speaker 1: control control of the government. Uh. And then finally some

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00:35:32,120 --> 00:35:33,920
Speaker 1: some real things are gonna pass, some real things are

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00:35:33,920 --> 00:35:36,640
Speaker 1: gonna change, and hopefully those are good things. If they

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00:35:36,640 --> 00:35:38,759
Speaker 1: turn out to be bad things, not so good. But

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00:35:38,880 --> 00:35:42,280
Speaker 1: sometimes people are like change is good. Well, we certainly

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00:35:42,280 --> 00:35:44,719
Speaker 1: got a lot of it today, Matt Maylee, thanks very much,

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00:35:44,719 --> 00:35:48,799
Speaker 1: equity strategist at Miller tay Back. Carbra Kadonna, Chief US

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00:35:48,840 --> 00:35:50,960
Speaker 1: economist Boomberg Intelligence, You want to just give you a

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00:35:51,000 --> 00:35:55,439
Speaker 1: final word. Sure, parting thought the sequester is dead, long lived,

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00:35:55,480 --> 00:35:57,960
Speaker 1: the sequester h And what you're seeing in the market

676
00:35:57,960 --> 00:36:00,200
Speaker 1: trends today, I think is, you know, higher interest rate,

677
00:36:00,239 --> 00:36:03,279
Speaker 1: so obviously that should be favorable for banks. But you

678
00:36:03,320 --> 00:36:07,279
Speaker 1: see more defense spending, more infrastructure spending uh, and potential

679
00:36:07,640 --> 00:36:10,400
Speaker 1: barriers to trade being elevated. Those are going to dominate

680
00:36:10,440 --> 00:36:12,480
Speaker 1: the market reaction in the near term until we get

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00:36:12,480 --> 00:36:15,560
Speaker 1: more detail. Carl Kadonna, Bloomberg Intelligence, thank you so much.

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Speaker 1: Thanks for listening to the Bloomberg P and L podcast.

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00:36:24,840 --> 00:36:28,640
Speaker 1: You can subscribe and listen to interviews at iTunes, SoundCloud,

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00:36:28,840 --> 00:36:33,040
Speaker 1: or whatever podcast platform you prefer I'm pim Fox. I'm

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00:36:33,040 --> 00:36:35,960
Speaker 1: out there on Twitter at pim Fox. I'm out there

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00:36:36,000 --> 00:36:39,280
Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.

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00:36:39,320 --> 00:36:42,040
Speaker 1: You can always catch us worldwide on Bloomberg Radio