WEBVTT - US Factory Activity Nears Stagnation, Trump Tariffs 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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<v Speaker 2>We want to get to this economic data. ISM manufacturing

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<v Speaker 2>data came out. We're looking at the fifty point three.

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<v Speaker 2>The consensus was fifty point seven, so a little bit

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<v Speaker 2>weaker there. New orders kind of interesting. Consensus was fifty

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<v Speaker 2>four point six. Came at forty eight point six, so

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<v Speaker 2>a big miss there. Tim Fury joins his chairman of

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<v Speaker 2>the Manufacturing Business Survey for the Institute for Supply Management, Tim,

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<v Speaker 2>what do you make of this ISM data coming out

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<v Speaker 2>here on our Manufacturing Buddies by Hi Paul Hilo.

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<v Speaker 3>So hey, I think the real story here, let's get

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<v Speaker 3>right to it, is the prices number sixty two points four.

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<v Speaker 3>We're up seven point five points, and you know in

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<v Speaker 3>December and January we had some price growth too. We

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<v Speaker 3>really were putting our prices then for the twenty twenty

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<v Speaker 3>five economic year, for the delivery year.

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<v Speaker 4>So there's really no reason for this number to go

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<v Speaker 4>up so high, except for the fact that.

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<v Speaker 3>As soon as terifts were announced on the lunium and steel,

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<v Speaker 3>the spot market immediately jumped up twenty percent. Now, our

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<v Speaker 3>sixty two point four number is a measurement really.

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<v Speaker 4>Of why the lake is, not how deep it is.

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<v Speaker 3>So what this is really saying is a lot of

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<v Speaker 3>companies were impacted by the stealing lunum increase that was

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<v Speaker 3>almost immediate and had to carry over factor I think

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<v Speaker 3>on what's happening in a new order level, because it's

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<v Speaker 3>essentially frozen people from placing orders because suppliers and sellers

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<v Speaker 3>are arguing amongst themselves about who's going to pay for this. Then,

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<v Speaker 3>on top of that, the inventory number grew in part

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<v Speaker 3>because of the Chinese lunar New Year materials being delivered,

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<v Speaker 3>but also because people were pulling forward material in anticipation

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<v Speaker 3>of tariffs. And then your supplier delivery number went up too,

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<v Speaker 3>in part because suppliers may be refusing to deliver until

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<v Speaker 3>customers agree to pay the increased costs. So you know, overall,

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<v Speaker 3>this is the fifty point three look pretty good, But to.

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<v Speaker 4>Gut to this doesn't look pretty good.

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<v Speaker 3>Yeah, if you had if you had a stable input

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<v Speaker 3>number Stummer wouldn't been in the forty eight range, so wow.

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<v Speaker 5>Okay.

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<v Speaker 6>Also, the employment number dipped significantly as well. I felt

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<v Speaker 6>like the narrative before it was that we weren't seeing layoffs,

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<v Speaker 6>but we weren't seeing hiring. Has that now changed?

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<v Speaker 4>No, you're well, you're exactly right.

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<v Speaker 3>We're continuing on the same cycle that we've been for

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<v Speaker 3>the last three or four months. I think what's happening

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<v Speaker 3>here is in the absence of some confidence that we're

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<v Speaker 3>going to start to grow here and not have a burp.

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<v Speaker 3>You know this, This does not support another rate cut.

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<v Speaker 3>I think what's happening is people are continuing to release people,

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<v Speaker 3>but they're not doing it so much. Alex's time on layoffs.

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<v Speaker 3>It's more about attrition and freezes.

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<v Speaker 4>So they're not overreacting here, but they are.

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<v Speaker 3>Deciding that, well, let's continue to d staff. You're a slightly,

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<v Speaker 3>but we're not going to use a layoff activity. We're

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<v Speaker 3>just going to freeze and we're going to trip down

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<v Speaker 3>until the environment becomes clearer.

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<v Speaker 2>All right, Tim, thanks so much for joining us. Really

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<v Speaker 2>appreciate it. Tim Furrey, he's the chairman of the Manufacturing

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<v Speaker 2>Business Survey at the Institute for Supply Management. Smart kids

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<v Speaker 2>call it IM. This may be, I guess, kind of

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<v Speaker 2>one of the first concrete data points that will point

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<v Speaker 2>back to us about the potential impact of some of

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<v Speaker 2>these tariff discussions on actual manufacturing activities. So we'll keep

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<v Speaker 2>that in mind.

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<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 6>Josh Wingrove is joining us Bloomberg Senior White House Reporter.

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<v Speaker 6>He joins us now in the White House lawn. Hey, Josh,

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<v Speaker 6>good to chat with you. We're clearly waiting for these

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<v Speaker 6>tariffs to be put into effect tomorrow. My question, though,

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<v Speaker 6>is how sensitive do you think the administration currently is

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<v Speaker 6>to the market, which is saying some thing a little

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<v Speaker 6>different than maybe we were expecting, say, four months ago.

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<v Speaker 7>Yeah. I think that that is seen as the sort

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<v Speaker 7>of one true guard rail that President Trump pays attention to.

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<v Speaker 4>Now.

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<v Speaker 7>That said, many of his aides have been saying, look like,

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<v Speaker 7>in the first term, we did a lot of tariffs

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<v Speaker 7>and things didn't really you know, go sideways. Although you

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<v Speaker 7>know inde bend anailists will tell you there was a

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<v Speaker 7>lot of sort of weakness periodically on the underrelly of

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<v Speaker 7>the economy in the first term. The big question right

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<v Speaker 7>now is, you know, is this all a bluff? And

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<v Speaker 7>remember this is only one stream of tariffs, and if

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<v Speaker 7>you've been having trouble keeping the plot, not that any

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<v Speaker 7>of us have, obviously, but it would be understandable because

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<v Speaker 7>you've got these ones. You've got ones next week on

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<v Speaker 7>steel and aluminum, which by the way, would hit Canada

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<v Speaker 7>and Mexico pretty hard, regardless of whether there's another delay

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<v Speaker 7>tonight or not. And then of course in April you

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<v Speaker 7>have not only the sectoral tariffs on autos, maybe lumber,

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<v Speaker 7>maybe chips, maybe pharmaceutical drugs, all of which could hit

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<v Speaker 7>Canada and or Mexico pretty hard. And and those other

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<v Speaker 7>dare so so called reciprocal tariffs that would be on

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<v Speaker 7>a country back country basis, including of course maybe Canada,

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<v Speaker 7>Mexico and China on top of whatever does or does

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<v Speaker 7>not happen tonight. So things are coming down multiple paths,

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<v Speaker 7>and there's been going to be a lot of focus

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<v Speaker 7>of course, to I know, whether these go in or not.

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<v Speaker 7>It's you know, a bit unusual that we're sitting here.

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<v Speaker 7>We don't know. A month ago we were in the

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<v Speaker 7>same position of what happened. There were calls between President

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<v Speaker 7>Trump and President Shinbaum in Mexico and Prime Minister Trudeau

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<v Speaker 7>in Canada, who only has a few days left or

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<v Speaker 7>so as Prime minister. We don't know right now whether

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<v Speaker 7>those calls are on tap. That would do one thing

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<v Speaker 7>to look for today as a signal of whether there'll

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<v Speaker 7>be another deferral. Remember, of course, the China tariffs also

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<v Speaker 7>could be doubled from ten to twenty percent today. No

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<v Speaker 7>real sign of any indication that that would be put off.

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<v Speaker 7>So you know, these things could all move into Pendley.

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<v Speaker 7>It's maybe not all, sort of all three or none.

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<v Speaker 2>Josh, We're going to hear from President Trump addressing the

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<v Speaker 2>Joint Session of Congress tomorrow evening any preview there. What's

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<v Speaker 2>kind of the agenda.

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<v Speaker 7>I mean, he wants to take a victory lab he

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<v Speaker 7>wants to talk about the things that they've done in

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<v Speaker 7>the first month. I think we're going to talk about

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<v Speaker 7>the border that is context for the tariffs, and really

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<v Speaker 7>it's kind of an eye the beholder, think on how

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<v Speaker 7>you choose to read that. He's been, you know, tweeting

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<v Speaker 7>or posting about border numbers coming way down. Of course,

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<v Speaker 7>the border is the justification for some of these tariffs,

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<v Speaker 7>so you know he'll either be there to say, look,

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<v Speaker 7>I just dropped tariffs on a trillion and a half

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<v Speaker 7>in goods, and you know, here we are and we're

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<v Speaker 7>into a trade fight now, or he can declare victory

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<v Speaker 7>on the border. Maybe that gives him a window to

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<v Speaker 7>defer at least some of these terraffs. But other than that,

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<v Speaker 7>I think we'll hear a lot about the border. We're

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<v Speaker 7>going to hear a lot about, of course, America first messaging.

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<v Speaker 7>The backdrop of that, of course, will be the fallout

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<v Speaker 7>from last Friday and the ongoing question of what will

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<v Speaker 7>happen in Ukraine, Will there be a minerals deal? These

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<v Speaker 7>are all just swirling in the air. So you know,

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<v Speaker 7>Trump is a showman at heart, so I think a

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<v Speaker 7>lot of this will be pomp and show and circumstance.

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<v Speaker 7>Of course, he wants to point to what he's done,

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<v Speaker 7>but there are questions, huge questions swirling about what comes next.

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<v Speaker 6>So what's the off ramp?

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<v Speaker 5>For the tariffs is.

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<v Speaker 7>If Trump decides that Mexico and Canada in particular have

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<v Speaker 7>done enough on the border, then he might defer them.

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<v Speaker 7>Secretary Besson, of course, has talked about maybe reciprocal. That's

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<v Speaker 7>maybe a bad word to choose, because we're reasoning another

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<v Speaker 7>thing matching tariffs on China that Mexico and Canada have

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<v Speaker 7>either talked about or in some cases already done. So

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<v Speaker 7>that's been a bit of a puzzler. He's sort of

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<v Speaker 7>asking for stuff that's already out the door. And if

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<v Speaker 7>they can get sort of this Fortress North America type

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<v Speaker 7>of idea into President Trump's sort of, you know, get

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<v Speaker 7>his buy in on it, then maybe there's a deferral.

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<v Speaker 7>We also don't know that these will move at the

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<v Speaker 7>same time. Remember a month ago Mexico was deferred before

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<v Speaker 7>Canada was. Trudeau and Trump had two calls. Trump has

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<v Speaker 7>been very critical of Trudeau. So right now we don't

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<v Speaker 7>know if anyone or all three will again move as one.

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<v Speaker 7>I think this is a really important point. The way

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<v Speaker 7>they've technically done it is by doing separate executive orders,

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<v Speaker 7>so they can pull in punt and you adjust on

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<v Speaker 7>the fly. One other quick thing to flag is last

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<v Speaker 7>night they tweaked the can of their Mexico ones. It

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<v Speaker 7>is either a signal that they plan to proceed or

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<v Speaker 7>at least a signal that they want to be seen

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<v Speaker 7>as threatening to plan to proceed with these terrats. And

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<v Speaker 7>what it did is tweak some of the rules on

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<v Speaker 7>deminimus change, which affects parcelshipping, basically punting that until they

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<v Speaker 7>can figure out a way to collect terrafts from either

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<v Speaker 7>individual retailers or mom and pop shipping things across the border.

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<v Speaker 7>And so that is a if they're fine tuning, that

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<v Speaker 7>suggests that they're at least holding open the option to

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<v Speaker 7>go ahead with these terrats, if not planning to do

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<v Speaker 7>so explicitly.

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<v Speaker 6>I mean, in the meantime, President Trump, I'll be speaking

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<v Speaker 6>later on today. He hinted that there'll be some economic

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<v Speaker 6>policy rolled out. The Wall Street Journal now reporting that

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<v Speaker 6>a TSMC is expected to announce one hundred billion dollar

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<v Speaker 6>investment in the US for chip making facilities. You like,

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<v Speaker 6>twenty seconds. Is this the kind of thing we can

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<v Speaker 6>expect now at one o'clock.

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<v Speaker 7>I mean, I will defer to my friends of the

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<v Speaker 7>journal if they're reporting that Trump has loved to make

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<v Speaker 7>these announcement big numbers. I will say, until now, the

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<v Speaker 7>numbers have not always withstood the full life of day

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<v Speaker 7>when you dig into the details. So we'll be looking

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<v Speaker 7>for those details today.

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<v Speaker 6>Well, so Josh appreciate that. Josh Winning Grow Bloomberg Senior

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<v Speaker 6>White House reporter and Bloomberg. Of course, we'll be bringing

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<v Speaker 6>you that live later on this afternoon. The Journal reporting

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<v Speaker 6>that TSMC expected to announce one hundred billion dollars in

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<v Speaker 6>investment in the US.

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<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Coarclay, and Android

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<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

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<v Speaker 6>All right, The other stock on the move is Kroger.

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<v Speaker 6>That stock down over one percent. Apparently the CEO resigns

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<v Speaker 6>over quote, personal conduct after a board probe. Want to

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<v Speaker 6>get more on this with Jaywon Kong, Bloomberg retail reporter

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<v Speaker 6>joining us. Do we know Jaywon what this personal conduct was?

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<v Speaker 5>We do not. It's pretty limited. You know what we

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<v Speaker 5>know right now?

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<v Speaker 8>We know that the CEO resigned after the the board

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<v Speaker 8>conducted an investigation into his personal conduct. We know that

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<v Speaker 8>it was a personal conduct and that the behavior did

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<v Speaker 8>not involve the company's operations, but that it was inconsistent

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<v Speaker 8>with their policy on business ethics. So now you know

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<v Speaker 8>Brodney mcmull and he's resigned effective immediately. And Braun Sergeant,

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<v Speaker 8>who's been on the board of the company for almost

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<v Speaker 8>twenty years, he'll serve as in terms CEO.

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<v Speaker 2>So how important is this CEO that did resign, mister McMullan,

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<v Speaker 2>How important he has he has he been to the story.

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<v Speaker 8>He's been in his role for you know, over a decade,

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<v Speaker 8>and he's you know, led the company through really important moments,

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<v Speaker 8>whether it's you know, really getting into the e commerce business,

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<v Speaker 8>led the company through the pandemic, you know, the period

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<v Speaker 8>of historic inflation that we've lived through, and most recently,

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<v Speaker 8>he tried to merge with Albertson's in what could have

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<v Speaker 8>been the biggest grocery deal in in the US and

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<v Speaker 8>history of course.

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<v Speaker 5>That you know did not come through after the government

0:11:14.280 --> 0:11:14.720
<v Speaker 5>blocked it.

0:11:14.840 --> 0:11:18.160
<v Speaker 8>But he's, you know, someone that's been at the Helm

0:11:19.320 --> 0:11:22.760
<v Speaker 8>for for quite a while after a long tenure at

0:11:22.760 --> 0:11:27.800
<v Speaker 8>the company, and is someone yeah that's you know what

0:11:27.960 --> 0:11:30.000
<v Speaker 8>the company through a lot of important moments.

0:11:30.440 --> 0:11:32.480
<v Speaker 6>How's Kroger doing otherwise? Did we just take that away

0:11:32.480 --> 0:11:35.160
<v Speaker 6>for a second. What's it like to uh be in

0:11:35.240 --> 0:11:36.360
<v Speaker 6>Kroger business right now?

0:11:37.640 --> 0:11:38.160
<v Speaker 5>Yeah, So.

0:11:39.679 --> 0:11:43.200
<v Speaker 8>It's you know, the company did really well during the

0:11:43.240 --> 0:11:46.560
<v Speaker 8>pandemic and inflation, like a lot of its other peers

0:11:46.600 --> 0:11:50.440
<v Speaker 8>in the retail business. That growth has started to moderate,

0:11:50.960 --> 0:11:52.240
<v Speaker 8>partly as people.

0:11:51.960 --> 0:11:53.280
<v Speaker 5>Look to save money.

0:11:54.280 --> 0:11:56.600
<v Speaker 8>And you know, as we talked about the Albertson's deal,

0:11:56.720 --> 0:12:00.000
<v Speaker 8>that had been sort of an overhang on on the company,

0:12:00.120 --> 0:12:04.360
<v Speaker 8>you for the last few years as they tried to merge,

0:12:05.040 --> 0:12:06.720
<v Speaker 8>you know, and then that deal about blocked by.

0:12:06.640 --> 0:12:07.120
<v Speaker 5>D f TC.

0:12:07.480 --> 0:12:10.720
<v Speaker 8>They had to go to court to defend it, and

0:12:10.960 --> 0:12:13.760
<v Speaker 8>we know the result now, which is that it didn't

0:12:13.840 --> 0:12:16.560
<v Speaker 8>you know, go through. But that's been you know, a

0:12:16.559 --> 0:12:19.760
<v Speaker 8>bit of a distraction for for quite a while. And

0:12:20.360 --> 0:12:23.960
<v Speaker 8>on top of that, the management team is also pretty new.

0:12:24.240 --> 0:12:29.520
<v Speaker 8>The CFO left last year and joined a competitor at Costco.

0:12:30.000 --> 0:12:32.319
<v Speaker 8>The chief merchant, which is of course a really important

0:12:32.400 --> 0:12:34.920
<v Speaker 8>role in the retail business. He also left at the

0:12:35.000 --> 0:12:38.720
<v Speaker 8>end of last year for a different opportunity, and so

0:12:39.559 --> 0:12:42.160
<v Speaker 8>we're you know, kind of seeing both of those factors

0:12:43.360 --> 0:12:46.200
<v Speaker 8>starting to play out now as they you know, tried

0:12:46.280 --> 0:12:47.760
<v Speaker 8>to operate and.

0:12:49.160 --> 0:12:51.120
<v Speaker 5>Navigate through a lot of macro uncertainties.

0:12:52.360 --> 0:12:55.360
<v Speaker 2>So what's the Is there another m and a trade

0:12:55.400 --> 0:12:57.840
<v Speaker 2>in there for the in that supermarket business? Again, you

0:12:57.880 --> 0:13:00.640
<v Speaker 2>mentioned Kroger's had some success and they've had and deals blocked.

0:13:00.679 --> 0:13:03.360
<v Speaker 2>Are they still in the market for growth of the acquisition.

0:13:04.360 --> 0:13:06.560
<v Speaker 8>It's hard to say right now. I mean the Alberson

0:13:06.640 --> 0:13:09.720
<v Speaker 8>theel just fell apart, you know, a few months ago.

0:13:10.760 --> 0:13:13.439
<v Speaker 8>The expectation, I think from people who follow the company

0:13:13.559 --> 0:13:16.040
<v Speaker 8>is that, you know, Kruger could look to do other

0:13:16.160 --> 0:13:19.200
<v Speaker 8>deals down the line, But I think for now, the

0:13:19.240 --> 0:13:22.920
<v Speaker 8>main priority is getting back to business and pursuing you know,

0:13:23.480 --> 0:13:24.319
<v Speaker 8>organic growth.

0:13:24.960 --> 0:13:26.520
<v Speaker 6>Thank you so much to in turn my Mike there,

0:13:26.600 --> 0:13:29.360
<v Speaker 6>my bad man, It's Monday, Jay One. Thanks a lot,

0:13:29.400 --> 0:13:31.839
<v Speaker 6>great reporting. We appreciated Jay Won Kong joining us a

0:13:31.840 --> 0:13:34.120
<v Speaker 6>Bloomberg retail reporter.

0:13:35.960 --> 0:13:39.640
<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

0:13:39.720 --> 0:13:42.800
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:13:42.840 --> 0:13:46.120
<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

0:13:46.200 --> 0:13:49.760
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:13:50.280 --> 0:13:52.240
<v Speaker 2>Alex Steeve, Paul Sweening. We're live here in our Bloomberg

0:13:52.240 --> 0:13:55.000
<v Speaker 2>Interactive Broker studio. We are streaming live on YouTube's ahead

0:13:55.000 --> 0:13:58.360
<v Speaker 2>over YouTube dot com starts Bloomberg Podcast Live, and that's

0:13:58.400 --> 0:14:00.880
<v Speaker 2>where you'll find it. I've seen, like I was mentioning

0:14:00.960 --> 0:14:03.439
<v Speaker 2>Alex earlier, that in the last few weeks, we've heard

0:14:03.480 --> 0:14:07.560
<v Speaker 2>from professional investors that there's growing concerns maybe about the

0:14:08.040 --> 0:14:11.440
<v Speaker 2>US economic growth and the exceptionalism thereof. And if so,

0:14:12.520 --> 0:14:15.080
<v Speaker 2>what do you do with your investments? Christina Hooper joins

0:14:15.160 --> 0:14:20.000
<v Speaker 2>US here. She is chief Global market Strategist for Investco. Christina,

0:14:20.040 --> 0:14:22.440
<v Speaker 2>how do you think about US economic growth over the

0:14:22.520 --> 0:14:26.160
<v Speaker 2>last several weeks? Has your outlook change it all? And

0:14:26.200 --> 0:14:28.320
<v Speaker 2>if so, how did you maybe change kind of the

0:14:28.360 --> 0:14:30.200
<v Speaker 2>way you're looking at investment opportunities.

0:14:31.280 --> 0:14:33.880
<v Speaker 9>Well, Paul, Alex, it's great to be with you. My

0:14:34.040 --> 0:14:37.280
<v Speaker 9>outlook hasn't changed much. Our expectation when we put out

0:14:37.280 --> 0:14:40.320
<v Speaker 9>our twenty twenty five outlook in November was that we're

0:14:40.520 --> 0:14:45.600
<v Speaker 9>likely to see better performance from developed markets x US

0:14:45.640 --> 0:14:48.880
<v Speaker 9>in twenty twenty five, and so that is playing out.

0:14:49.760 --> 0:14:52.640
<v Speaker 9>The US has been doing so well for so long,

0:14:52.960 --> 0:14:56.520
<v Speaker 9>and this seems to be a time in which we're

0:14:56.680 --> 0:15:01.000
<v Speaker 9>likely to see key drivers like greater monetary policy easing

0:15:01.920 --> 0:15:07.400
<v Speaker 9>and lower valuation supporting other markets. So my view is

0:15:07.440 --> 0:15:09.680
<v Speaker 9>that we're likely to see some hiccups. It doesn't mean

0:15:09.720 --> 0:15:12.000
<v Speaker 9>we're going to see a dramatic downturn, but we do

0:15:12.120 --> 0:15:15.600
<v Speaker 9>have as a frame of reference the twenty eighteen twenty

0:15:15.720 --> 0:15:19.840
<v Speaker 9>nineteen Terra force which were negative for US stocks, so

0:15:19.880 --> 0:15:21.000
<v Speaker 9>we want to be careful there.

0:15:21.920 --> 0:15:23.760
<v Speaker 6>So does that mean, Okay, we had someone else on

0:15:23.800 --> 0:15:25.600
<v Speaker 6>the last hour that said by the dip, It sounds

0:15:25.600 --> 0:15:28.280
<v Speaker 6>like it's more let it play out and see what

0:15:28.320 --> 0:15:30.120
<v Speaker 6>happens by stealth elsewhere.

0:15:31.800 --> 0:15:36.160
<v Speaker 9>So I think first and foremost it's about rebalancing. Most

0:15:36.200 --> 0:15:41.720
<v Speaker 9>investors are likely overweight US equities and underweight European equities,

0:15:41.840 --> 0:15:46.680
<v Speaker 9>UK equities, EM equities, so this is an opportunity to rebalance.

0:15:47.640 --> 0:15:51.160
<v Speaker 9>US stocks have had a great run over multiple years,

0:15:51.840 --> 0:15:56.560
<v Speaker 9>and it's about in doing so. In rebalancing, one is

0:15:56.600 --> 0:15:59.960
<v Speaker 9>going to have an overall valuation on one's portfolio that's lower,

0:16:00.680 --> 0:16:06.200
<v Speaker 9>that might be less vulnerable to some of the turmoil

0:16:06.600 --> 0:16:11.520
<v Speaker 9>and uncertainty that we're seeing right now, and so essentially

0:16:11.720 --> 0:16:14.000
<v Speaker 9>maintain exposure to the US. But this is not a

0:16:14.040 --> 0:16:16.400
<v Speaker 9>time to be overweight the US, in my opinion.

0:16:16.200 --> 0:16:18.400
<v Speaker 2>Interesting because I'm looking on a year to day basis

0:16:18.400 --> 0:16:20.720
<v Speaker 2>the S and P five hundred up about one percent,

0:16:20.760 --> 0:16:23.920
<v Speaker 2>but the stocks europe six hundred price indext which I

0:16:23.920 --> 0:16:26.640
<v Speaker 2>think is kind of the broadest view of European investing,

0:16:26.800 --> 0:16:29.760
<v Speaker 2>that's up eleven percent year to date. Do you expect

0:16:29.800 --> 0:16:30.920
<v Speaker 2>that to continue, Christina?

0:16:32.000 --> 0:16:35.920
<v Speaker 9>I do think so. We have some powerful drivers. First

0:16:35.960 --> 0:16:40.120
<v Speaker 9>of all, we've got, you know, potentially significant ECB easing

0:16:40.240 --> 0:16:44.960
<v Speaker 9>this year. But beyond that, what we have is low

0:16:45.040 --> 0:16:51.360
<v Speaker 9>valuations and we have economic surprise. It's positive. Sentiment has

0:16:51.440 --> 0:16:57.200
<v Speaker 9>been pretty negative on European equities and they're exceeding expectations.

0:16:57.360 --> 0:16:59.040
<v Speaker 9>So I think this should be a good year for

0:16:59.640 --> 0:17:03.440
<v Speaker 9>your inequities, and I think it could very well be

0:17:03.480 --> 0:17:06.720
<v Speaker 9>a good year for UK equities, Japanese equities and in

0:17:06.760 --> 0:17:08.120
<v Speaker 9>fact EAM equities as well.

0:17:08.680 --> 0:17:10.399
<v Speaker 6>But what about the whole tariff thing, because that's going

0:17:10.480 --> 0:17:12.760
<v Speaker 6>to hurt everybody, right, So is it just that because

0:17:12.840 --> 0:17:15.040
<v Speaker 6>valuation is so much lower in Europe in the UK

0:17:15.160 --> 0:17:17.119
<v Speaker 6>than the US and it can absorb that kind of hit.

0:17:18.440 --> 0:17:21.200
<v Speaker 9>Well, I think that's certainly part of the story. Also,

0:17:21.320 --> 0:17:24.440
<v Speaker 9>you of course have those other drivers that I think

0:17:24.520 --> 0:17:28.240
<v Speaker 9>can soften the blow, For example, additional easing. If we

0:17:28.320 --> 0:17:32.160
<v Speaker 9>look at emerging markets central banks, more easing was expected

0:17:32.200 --> 0:17:35.520
<v Speaker 9>last year than we got, so I suspect that that

0:17:35.720 --> 0:17:38.400
<v Speaker 9>is what will come this year. We had to wait

0:17:38.440 --> 0:17:40.520
<v Speaker 9>a little bit, but I think this is probably good

0:17:40.520 --> 0:17:43.200
<v Speaker 9>timing and should be supportive of any kind of headwinds

0:17:43.280 --> 0:17:44.240
<v Speaker 9>created by tariffs.

0:17:45.480 --> 0:17:49.360
<v Speaker 2>Walmart recently reported earnings, and people look to Walmart. It's

0:17:49.480 --> 0:17:53.399
<v Speaker 2>just a great gauge of the US consumer here. What

0:17:53.400 --> 0:17:55.159
<v Speaker 2>did you see from Walmart? What do you How do

0:17:55.200 --> 0:17:56.960
<v Speaker 2>you feel about the US consumer here?

0:17:58.359 --> 0:18:04.639
<v Speaker 9>So Walmart was I think very very rational and reasonable

0:18:04.680 --> 0:18:08.119
<v Speaker 9>in saying that we don't know exactly what's going to

0:18:08.119 --> 0:18:11.000
<v Speaker 9>happen this year. There's an awful lot of uncertainty, and

0:18:11.320 --> 0:18:13.800
<v Speaker 9>I think that's the reality that the consumer has been

0:18:13.840 --> 0:18:16.200
<v Speaker 9>quite resilient, but we don't know how things play out

0:18:16.240 --> 0:18:19.760
<v Speaker 9>this year. And I think that makes sense. The US

0:18:19.840 --> 0:18:25.200
<v Speaker 9>consumer is coming under greater pressure. Sentiment is down significantly,

0:18:25.560 --> 0:18:29.280
<v Speaker 9>and we saw on Friday that personal spending was down.

0:18:30.160 --> 0:18:34.440
<v Speaker 9>We have to be concerned that there are pressures now.

0:18:34.480 --> 0:18:37.040
<v Speaker 9>Having said that, they could be very short term in nature,

0:18:37.119 --> 0:18:39.840
<v Speaker 9>since they seem to be driven largely by tariffs and

0:18:39.880 --> 0:18:42.440
<v Speaker 9>the potential for tearfors. So if this were to be

0:18:42.440 --> 0:18:44.760
<v Speaker 9>behind us, it could be very similar to what we

0:18:44.800 --> 0:18:48.399
<v Speaker 9>saw in twenty eighteen twenty nineteen, where as soon as

0:18:48.520 --> 0:18:52.280
<v Speaker 9>as the bulk of the tear wars are over, there

0:18:52.359 --> 0:18:56.960
<v Speaker 9>is a resumption in not just improved sentiment on the

0:18:56.960 --> 0:18:59.400
<v Speaker 9>part of consumers and businesses, but improved spending.

0:19:00.560 --> 0:19:02.800
<v Speaker 6>What are the most typical questions that you're getting right

0:19:02.840 --> 0:19:05.360
<v Speaker 6>now from clients based on this global view that you.

0:19:05.359 --> 0:19:09.560
<v Speaker 9>Have, Well, are we going into a recession in the US?

0:19:09.600 --> 0:19:12.680
<v Speaker 9>And I think that's only been amplified by the Atlanta

0:19:12.800 --> 0:19:18.400
<v Speaker 9>Fed GDP now estimate, which has shifted from growth expectations

0:19:18.440 --> 0:19:21.520
<v Speaker 9>of over two percent to now a negative growth in

0:19:21.560 --> 0:19:25.800
<v Speaker 9>the first quarter. My answer is that we need to

0:19:25.880 --> 0:19:29.920
<v Speaker 9>wait and see. It's unclear. Our base case certainly has

0:19:30.000 --> 0:19:33.160
<v Speaker 9>not been for a recession this year, but we are

0:19:33.280 --> 0:19:37.040
<v Speaker 9>seeing a deterioration in economic data, so we want to

0:19:37.040 --> 0:19:40.760
<v Speaker 9>follow this very closely. Now, it could very well be

0:19:40.880 --> 0:19:43.720
<v Speaker 9>that we do see growth in the first quarter. Keep

0:19:43.720 --> 0:19:46.960
<v Speaker 9>in mind that the Atlanta Fed GDP now here is

0:19:47.040 --> 0:19:49.960
<v Speaker 9>real time, so it can easily shift. But I do

0:19:50.000 --> 0:19:51.920
<v Speaker 9>think we want to be more on top of this,

0:19:53.200 --> 0:19:56.320
<v Speaker 9>more cognizant of every data point and what it might

0:19:56.359 --> 0:19:59.680
<v Speaker 9>be telling us. We want to find those canaries in

0:19:59.720 --> 0:20:00.720
<v Speaker 9>the cold right now.

0:20:01.200 --> 0:20:01.480
<v Speaker 5>Yep.

0:20:01.800 --> 0:20:04.920
<v Speaker 6>And you're not alone in that. Michael Feroli over JP

0:20:05.040 --> 0:20:08.520
<v Speaker 6>Morgan just cut his first quarter real GDP estimate from

0:20:08.560 --> 0:20:10.560
<v Speaker 6>two point two five percent to one point five So

0:20:10.600 --> 0:20:13.040
<v Speaker 6>like it's moving really fast, Christina, Thank you so much.

0:20:13.080 --> 0:20:16.360
<v Speaker 6>Christina Hooper joining us from Invesco. Always wonderful to get

0:20:16.400 --> 0:20:17.280
<v Speaker 6>your perspective.

0:20:18.200 --> 0:20:22.879
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0:20:30.440 --> 0:20:34.000
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