WEBVTT - Bloomberg Surveillance TV: April 29, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.479 Terminal and the Bloomberg Business App. Stephanie Rath of Wolfe 0:00:37.760 --> 0:00:40.200 has one of the lowest estimates on the Street rising. 0:00:40.200 --> 0:00:44.000 We're looking for ninety thousand non farm payrolls, weather, seasonal factors, 0:00:44.040 --> 0:00:48.400 and the Canada alone suggests a substantial headwind. Stephanie joins 0:00:48.479 --> 0:00:49.959 us now for more. Stephanie, Good morning. 0:00:49.840 --> 0:00:50.400 Good morning. 0:00:50.560 --> 0:00:52.400 Is it too early to expect to see a hit 0:00:52.560 --> 0:00:55.720 from the policy volatility? Dan in Washington, No, I. 0:00:55.640 --> 0:00:57.800 Think we should start to see that companies probably pause 0:00:57.800 --> 0:01:00.200 on their hiring if we don't know what the outlook is. 0:01:00.240 --> 0:01:02.200 A lot of companies are quite uncertain about where things 0:01:02.200 --> 0:01:04.119 are going. It makes sense that they're gonna pause on hiring. 0:01:04.440 --> 0:01:07.399 And then from the comments that you just read, there's 0:01:07.480 --> 0:01:10.160 seasonal factors weighing on the print, calendar factors weighing on 0:01:10.200 --> 0:01:11.720 the print. It makes sense for it to be below 0:01:11.720 --> 0:01:12.160 one hundred. 0:01:12.400 --> 0:01:14.759 Has been described as a random number generator at time 0:01:15.520 --> 0:01:17.840 in the survey week claims are okay. Does that make 0:01:17.880 --> 0:01:19.440 a difference to you, No. 0:01:19.360 --> 0:01:24.080 Because the seasonal stuff is not really an effect of firing. 0:01:24.400 --> 0:01:27.399 It's more just timing around the survey week compared to 0:01:27.520 --> 0:01:30.160 last month there was bad weather. That doesn't mean that 0:01:30.200 --> 0:01:32.160 there was actual firing, so that shouldn't correlate with the 0:01:32.200 --> 0:01:35.160 claims data. This is more function of this particular non 0:01:35.160 --> 0:01:35.959 farm pails print. 0:01:36.120 --> 0:01:39.280 Does it matter which jobs end up getting removed or 0:01:39.520 --> 0:01:42.280 maybe seeing a weak performance in this report given the 0:01:42.319 --> 0:01:45.000 fact that there has been this ballast of healthcare as 0:01:45.000 --> 0:01:47.600 well as a couple of other sectors, including the government, 0:01:47.800 --> 0:01:50.000 that have really driven things over the past couple of years. 0:01:50.160 --> 0:01:51.960 Yeah, And I think that's something that we're going to 0:01:52.000 --> 0:01:54.400 see over the next couple of months, is the parts 0:01:54.400 --> 0:01:57.160 of the labor market that were really strong should start 0:01:57.200 --> 0:02:00.720 to slow down. Government in particular healthcare is well, especially 0:02:00.720 --> 0:02:03.880 since grants are likely to be slowing down healthcare hiring, 0:02:04.120 --> 0:02:05.320 and then on top of that, you should start to 0:02:05.320 --> 0:02:07.960 see the cyclical parts of the economy slow down. That 0:02:08.000 --> 0:02:10.680 one I don't expect for this print necessarily. I think 0:02:10.680 --> 0:02:14.119 we should see a sort of more gradual slowdown from 0:02:14.120 --> 0:02:16.600 that perspective. But we should start see construction, should see 0:02:16.600 --> 0:02:19.640 ahead wind from some of the weather stuff, healthcare, government 0:02:19.639 --> 0:02:21.440 sho should be a little bit softer in this print, 0:02:21.560 --> 0:02:24.399 and then in the next print things like rail employment, 0:02:24.480 --> 0:02:26.840 stuff that's actually tied to the goods economy. That's probably 0:02:26.880 --> 0:02:28.640 less of a story for this print. It's probably more 0:02:28.639 --> 0:02:29.679 about the Maypairels print. 0:02:29.760 --> 0:02:31.520 You know, this has been a really confusing moment. 0:02:31.600 --> 0:02:33.840 On one hand, a lot of people are predicting a 0:02:33.840 --> 0:02:36.519 lot of pain and potentially a real headwind to growth. 0:02:36.560 --> 0:02:39.560 On the other hand, you do have companies with drawing guidance. 0:02:39.560 --> 0:02:42.080 You have others like some of the travel companies cruise 0:02:42.120 --> 0:02:46.799 liners and hotels increasing theirseph fullier forecast because they see 0:02:46.840 --> 0:02:49.480 people still traveling, people still want to go around, The 0:02:49.520 --> 0:02:50.960 consumer is still strong. 0:02:51.320 --> 0:02:52.800 How do you pair these two. 0:02:52.639 --> 0:02:55.240 Ideas and put them together in some sort of outlook. 0:02:55.360 --> 0:02:58.000 I think it makes sense today the economy is fine. 0:02:59.160 --> 0:03:01.440 There will be something unificant headwinds in the next couple 0:03:01.480 --> 0:03:04.520 of months unless Trump pulls back the tariffs. 0:03:04.200 --> 0:03:05.840 On China in particular in a big way. 0:03:06.200 --> 0:03:08.200 So if he doesn't do that in the next couple 0:03:08.200 --> 0:03:10.720 of weeks, we might be on a sort of unsustainable 0:03:10.720 --> 0:03:12.840 path towards recession base cases. 0:03:12.880 --> 0:03:14.120 He probably pulls down. 0:03:14.080 --> 0:03:17.000 The tariffs on China in particular fairly notably in the 0:03:17.040 --> 0:03:18.800 next couple of weeks, otherwise we might be looking at 0:03:18.840 --> 0:03:21.919 bare shelves and COVID like environment. 0:03:21.960 --> 0:03:24.360 But it was a self inflicted one Stephanie, what's fairly 0:03:24.400 --> 0:03:27.000 notable in terms of pulling the tariffs down sixty percent? 0:03:27.560 --> 0:03:29.160 That still feels like to many people. 0:03:29.160 --> 0:03:31.800 In trade of bargo you need tariff rates to be 0:03:31.800 --> 0:03:34.720 below fifty five percent roughly all in. That includes the 0:03:34.760 --> 0:03:39.320 fentanyel tariffs, that includes the reciprocal tariffs. And then, by 0:03:39.320 --> 0:03:40.800 the way, you have to be cognizant that there are 0:03:40.800 --> 0:03:43.000 three oh one tariffs from the last trade war as well, 0:03:43.120 --> 0:03:45.320 some of them up to twenty five percent, right, so. 0:03:45.280 --> 0:03:46.680 It's a massive cumulative rate. 0:03:46.960 --> 0:03:50.000 You said something earlier, you said you don't expect companies 0:03:50.040 --> 0:03:52.480 to be hiring. They're on pause. Do you expect them 0:03:52.480 --> 0:03:54.279 to be firing at this moment. 0:03:54.320 --> 0:03:55.560 At this moment, probably not. 0:03:55.640 --> 0:03:57.920 There's just so much uncertainty, there was so much difficulty 0:03:58.000 --> 0:03:59.920 hiring in the past couple of years. It probably makes 0:04:00.040 --> 0:04:02.320 send for them to just pause for a little while. 0:04:02.600 --> 0:04:04.200 Of course, there's going to be still some hiring to 0:04:04.240 --> 0:04:06.880 some extent, there's just a business eased, the economy still growing, 0:04:07.120 --> 0:04:09.240 but to the extent that at the margin, if you're 0:04:09.280 --> 0:04:11.120 not sure you need the position, you might just kind 0:04:11.120 --> 0:04:12.920 of wait for the next couple of months, see how 0:04:12.920 --> 0:04:15.320 things play out, and then make a decision about whether 0:04:15.320 --> 0:04:16.520 you actually want to hire in that position. 0:04:16.640 --> 0:04:18.960 Later on this morning, we get consumer confidence numbers, and 0:04:19.040 --> 0:04:21.600 within that you offer to read on attitudes to the 0:04:21.680 --> 0:04:24.640 labor market, how difficult or hard it might be to 0:04:24.960 --> 0:04:27.000 get a job. And I think this is really important 0:04:27.000 --> 0:04:29.400 on taking the temperature not only for that, but also 0:04:29.560 --> 0:04:31.760 the potential for second round effects when it comes to 0:04:32.160 --> 0:04:36.000 inflation and price hikes. Now, if I'm worried about getting 0:04:36.040 --> 0:04:38.440 a job, how likely is it that I'm going to 0:04:38.440 --> 0:04:40.839 get a pay rise anytime soon, or at least ask 0:04:40.920 --> 0:04:41.480 for one. 0:04:42.000 --> 0:04:43.880 Probably less so, so you're probably going to start to 0:04:43.920 --> 0:04:46.400 see a little bit of deceleration from our wage perspective. 0:04:46.880 --> 0:04:50.200 The one thing is the immigration stuff actually has a 0:04:50.200 --> 0:04:52.880 different implication for the for the blue collar work or 0:04:52.920 --> 0:04:53.400 the lower end. 0:04:53.480 --> 0:04:55.560 So there is a bit of stuff. 0:04:55.279 --> 0:04:57.400 Happening kind of under the surface that is quite nuanced. 0:04:57.560 --> 0:04:59.800 So we might start to see an unusual tightening for 0:05:00.080 --> 0:05:02.960 blue collar worker, even though the white collar worker might 0:05:03.000 --> 0:05:05.760 actually be having a little bit more difficulty finding it. 0:05:06.000 --> 0:05:07.640 So, just for the record, ask for a pay rise, right, 0:05:09.400 --> 0:05:10.720 really please? Always? 0:05:11.480 --> 0:05:15.080 Okay, So that's you basically, So in some please. 0:05:15.520 --> 0:05:19.000 Rachel, this can become self fulfilling, don't you think People 0:05:19.040 --> 0:05:20.800 start to worry about these things, so they back off, 0:05:20.800 --> 0:05:23.040 they stop spending, and it takes on a life of its. 0:05:22.960 --> 0:05:24.760 Own, which is the reason why I think it's really 0:05:24.800 --> 0:05:27.480 salient that you mentioned these surveys and how people feel 0:05:27.480 --> 0:05:30.599 about their jobs, people staying longer, the quits rate. Later 0:05:30.640 --> 0:05:32.440 this morning, when we get that joelt Stata is going 0:05:32.480 --> 0:05:34.800 to be key in terms of people's confidence not just 0:05:34.839 --> 0:05:36.760 to ask for a raise, but to leave their jobs. 0:05:37.000 --> 0:05:39.719 And as we're talking about this ups and how's his plans? 0:05:39.720 --> 0:05:42.960 You got twenty thousand jobs this year as a result of. 0:05:42.880 --> 0:05:43.800 The Amazon tie up. 0:05:44.000 --> 0:05:46.560 You're seeing this on the margins, cost cutting coming more 0:05:46.600 --> 0:05:47.080 into the floor. 0:05:47.400 --> 0:05:50.760 Where is the consumer price tolerance right now going into 0:05:50.839 --> 0:05:53.720 potentially higher prices, not very high. 0:05:53.800 --> 0:05:58.679 So the biggest driver of consumer inflation expectations is past inflation. 0:05:59.320 --> 0:06:01.920 So today, the extent that consumers are worried about the 0:06:01.960 --> 0:06:04.680 inflation that we saw this time, they're quite worried about 0:06:04.680 --> 0:06:06.039 inflation that we're going to see in the future, in 0:06:06.040 --> 0:06:07.919 which case they're probably going to be pulling back on spending. 0:06:07.920 --> 0:06:10.040 They're gonna be very attuned to the prices that they're 0:06:10.040 --> 0:06:11.800 seeing on the shelves. So this is very different than 0:06:11.839 --> 0:06:14.279 the last trade war for a number of reasons. The magnitude, 0:06:14.279 --> 0:06:16.360 of course, but also where we are coming from, and 0:06:16.600 --> 0:06:18.920 in twenty eighteen we didn't have a period of inflation. 0:06:18.920 --> 0:06:21.039 People weren't really expecting inflation, they didn't really know what 0:06:21.040 --> 0:06:21.560 it felt like. 0:06:21.760 --> 0:06:24.560 This time, consumers field are very very different versus where 0:06:24.560 --> 0:06:24.840 we were. 0:06:25.040 --> 0:06:27.160 Amazon has a different idea of how this might play out. 0:06:27.240 --> 0:06:29.160 Right, Amazon, I think is gonna get very political and 0:06:29.160 --> 0:06:31.360 tru administration is not gonna like this. Punch Bowl says 0:06:31.360 --> 0:06:33.600 that they're going to add what the tariff rate is 0:06:33.640 --> 0:06:36.080 on top of the cumulative price. So if you're a 0:06:36.080 --> 0:06:38.440 consumer and you see something's five dollars and now it's 0:06:38.600 --> 0:06:42.360 ten to seven, whatever, you see the additional tariff input 0:06:43.000 --> 0:06:46.159 that is going to I think really irk the administration. 0:06:46.279 --> 0:06:47.880 Yeah, the politics of that is going to be interesting 0:06:48.000 --> 0:06:49.680 for the next few months or so if that's how 0:06:49.680 --> 0:06:51.839 it plays out. Stephanie's good to see you as always. 0:06:51.839 --> 0:06:59.760 Thanks for dropping by, Stephanie roth Lair of Wolf Research. 0:07:04.120 --> 0:07:06.159 Let's turn to a busy week of data ahead and 0:07:06.240 --> 0:07:08.600 a busy week for Washington as well. The Fed's next 0:07:08.640 --> 0:07:11.320 rate decision just a week away. Colin Martin of Chiles 0:07:11.440 --> 0:07:14.520 Swelb writing, while self data has been concerning, the hard 0:07:14.600 --> 0:07:17.480 data has held up well. If this week's data disappoints, 0:07:17.480 --> 0:07:21.000 the Fed won't necessarily react. Colin joint us now for more. Colin, 0:07:21.040 --> 0:07:23.520 good Mornick, Good morning, Tilson Slock Apollo. I don't know 0:07:23.520 --> 0:07:24.680 if you saw this. I'm going to share it with 0:07:24.720 --> 0:07:28.120 you now. The survey week for employment this week was 0:07:28.160 --> 0:07:31.240 the week after Liberation Day tariffs were announced. It goes 0:07:31.240 --> 0:07:33.680 on to say the consensus expects one hundred and thirty k. 0:07:34.080 --> 0:07:36.400 There are significant risk the number is going to be lower, 0:07:36.440 --> 0:07:39.080 perhaps even negative. What's your reaction to that. 0:07:39.560 --> 0:07:40.640 It'd be pretty disappointing. 0:07:40.680 --> 0:07:42.480 I mean, when we look at the labor market outlook, 0:07:42.520 --> 0:07:45.320 there's all these thoughts and concerns about what can happen 0:07:45.680 --> 0:07:48.080 as the tariffs are put in place over the next 0:07:48.080 --> 0:07:50.400 few months, and there isn't too much concern in the 0:07:50.440 --> 0:07:53.360 here and now opposite, you know, aside from what Wordslock 0:07:53.800 --> 0:07:55.600 just put out. I mean, I think the consensus estimate 0:07:55.680 --> 0:07:58.000 is one hundred and sixty five thousand something like that. 0:07:58.680 --> 0:08:02.000 If we were to see slow down here in April, 0:08:02.640 --> 0:08:04.880 I don't think that would change the FEDS calculus for 0:08:04.960 --> 0:08:05.520 next week. 0:08:05.640 --> 0:08:06.880 We kind of heard that from a lot of FED 0:08:06.880 --> 0:08:08.040 officials in terms. 0:08:07.760 --> 0:08:10.880 Of no move in May. Maybe it gets pulled up 0:08:10.920 --> 0:08:13.200 to June. I think it'd be bad for the markets, though, 0:08:13.440 --> 0:08:16.920 if we got that negative reading this early, this quickly, 0:08:17.000 --> 0:08:18.760 I think that'd be a pretty bad outcome. 0:08:18.840 --> 0:08:21.840 When you see the markets, you're talking risk assets in particular, 0:08:21.880 --> 0:08:23.480 and what we have seen so far is a real 0:08:23.560 --> 0:08:26.040 divergence between the front end of the yield curve, which 0:08:26.040 --> 0:08:29.720 has really signals a great more pain than certainly risk assets, 0:08:29.720 --> 0:08:32.880 whether it's credit instruments or whether it's equity ones. Do 0:08:32.920 --> 0:08:35.720 you think that that divergence needs to close to more 0:08:35.720 --> 0:08:38.160 weakness on the risk side of things, or do you 0:08:38.200 --> 0:08:41.720 think that people are pricing in an overly large response 0:08:41.760 --> 0:08:42.680 by the Federal Reserve. 0:08:43.440 --> 0:08:45.160 I don't think they are. 0:08:45.320 --> 0:08:48.679 If you look at the ten year treasury, for example, 0:08:48.679 --> 0:08:50.760 I mean, that's been hovering in that four to two 0:08:50.880 --> 0:08:52.679 to four five range. I think a lot of that 0:08:52.720 --> 0:08:56.080 comes down to potential confidence dollar concerns, things like that. 0:08:56.280 --> 0:08:58.559 If you look at the Fed funds futures market, they 0:08:58.600 --> 0:09:01.280 have been pricing in relatively aggressive cuts. 0:09:01.360 --> 0:09:03.320 We somewhat disagree with that. 0:09:03.760 --> 0:09:05.680 We don't think we're going to see that slow down 0:09:05.720 --> 0:09:08.800 as quickly as a three or four rate cut outcome suggests. 0:09:09.240 --> 0:09:10.959 But it does come down to the labor market. If 0:09:10.960 --> 0:09:14.240 we see that weakening, we think the Fed over time 0:09:14.320 --> 0:09:17.079 will react. We're seeing Powell kind of pivotal away a 0:09:17.120 --> 0:09:18.520 little bit. I think a week and a half ago 0:09:18.760 --> 0:09:21.840 he mentioned maybe we'll focus on the inflation mandate more 0:09:21.880 --> 0:09:24.679 than the labor market mandate. That seems to be the 0:09:24.679 --> 0:09:27.840 minority right now, based on concerns and comments we've heard 0:09:27.880 --> 0:09:28.760 from other Fed officials. 0:09:28.920 --> 0:09:30.040 This is a fascinating moment. 0:09:30.080 --> 0:09:31.760 Where a lot of Fi Crui of gold mis Sax 0:09:31.840 --> 0:09:33.920 yesterday came on the show, and so that he actually 0:09:34.160 --> 0:09:37.000 prefers credit risk to sovereign risk right. 0:09:36.840 --> 0:09:39.040 Now and talking about removing. 0:09:38.640 --> 0:09:41.080 From some of the volatility that you're seeing in treasury 0:09:41.120 --> 0:09:44.400 markets to really go with corporations that are telling you 0:09:44.480 --> 0:09:47.320 we have no clue, that are one after another saying 0:09:47.320 --> 0:09:49.040 we can't give you any forward guidance. 0:09:49.440 --> 0:09:51.320 Can you reconcile that? Do you agree with that? 0:09:51.880 --> 0:09:53.600 You know somewhat, But I guess it depends how much 0:09:53.640 --> 0:09:55.880 credit risk we're talking about. We're still a little bit 0:09:55.920 --> 0:09:58.840 cautious on the very low rated parts of the market, 0:09:58.880 --> 0:10:01.400 I mean junk in general. We're worried that spreads can 0:10:01.440 --> 0:10:05.439 blow out if we get this prolonged trade war investment creed. 0:10:06.040 --> 0:10:08.880 We're still pretty comfortable taking that risk. So, whether it's 0:10:09.080 --> 0:10:11.720 credit on the corporate side, whether it's municipal credit risk, 0:10:11.960 --> 0:10:14.840 we're okay there because the hard data leading up to 0:10:14.920 --> 0:10:19.040 now was generally okay. Corporations are in pretty solid footing, 0:10:19.120 --> 0:10:22.040 especially ig rated. We're looking at really strong balance sheets, 0:10:22.160 --> 0:10:25.360 plenty of liquid assets. If profits slow down, I think 0:10:25.400 --> 0:10:27.760 that might need more of a stock market issue that's 0:10:27.760 --> 0:10:29.439 an earnings issue, not a balance sheet issue, and we 0:10:29.480 --> 0:10:32.080 think they have really strong balance sheets right now. Again, 0:10:32.160 --> 0:10:34.640 IG issues. They've pushed back that maturity wall a little bit, 0:10:34.880 --> 0:10:36.360 so IG we're okay with. 0:10:36.600 --> 0:10:40.040 But we're not really taking low credit risk right now. 0:10:40.040 --> 0:10:41.960 This is a really tough time to be an investor. 0:10:42.000 --> 0:10:44.920 I have to say, I can just begin to imagine 0:10:45.080 --> 0:10:47.680 there's so many different themes that are kind of overlaid. 0:10:47.679 --> 0:10:49.679 You've got this question of credit versus software risk, and 0:10:49.679 --> 0:10:51.840 then you've got a question of just international appetite for 0:10:51.920 --> 0:10:54.439 US dollars nominated assets, and that has been one of 0:10:54.480 --> 0:10:56.880 the biggest shifts over the past few weeks, is that 0:10:56.880 --> 0:10:59.560 that's really been called into question. How much have you 0:10:59.679 --> 0:11:03.040 changed your allocation to shift away from US dollars to 0:11:03.120 --> 0:11:05.920 nominated assets, just to touch on the margins, to immunize 0:11:05.960 --> 0:11:08.719 yourself from that type of narrative that does seem to 0:11:08.760 --> 0:11:10.440 becoming entrenched in certain pockets. 0:11:10.600 --> 0:11:12.400 I could say we're talking about it a lot more 0:11:12.840 --> 0:11:14.640 with our clients than we were a few months ago 0:11:14.720 --> 0:11:16.000 and over the past few years. When we look at 0:11:16.000 --> 0:11:19.440 international markets a Schwab, it's not really a big aspect 0:11:19.480 --> 0:11:21.680 of what we look at I think most US investors 0:11:21.679 --> 0:11:25.560 from a bond standpoint, are probably under allocated to international debt. 0:11:25.840 --> 0:11:27.800 With the dollar being as strong as it's been over 0:11:27.800 --> 0:11:29.560 the past few years, there hasn't been as much of 0:11:29.559 --> 0:11:32.319 a case because you have that yield disadvantage when you 0:11:32.360 --> 0:11:35.840 consider other global developed markets. If the outlook is for 0:11:35.880 --> 0:11:39.040 the dollar to weaken a little bit from here, then 0:11:39.080 --> 0:11:40.840 the case can be made to shift a little bit 0:11:40.880 --> 0:11:42.960 to international assets. We're not saying go nuts, We're not 0:11:43.000 --> 0:11:46.600 saying go overweight, but it probably makes sense, especially when. 0:11:46.440 --> 0:11:48.520 You talk about the idea of a. 0:11:48.040 --> 0:11:51.480 Loss of confidence or sovereign risk. You don't hear about 0:11:51.480 --> 0:11:54.040 those concerns with some of the higher rated issuers and 0:11:54.120 --> 0:11:57.440 say Europe for example. So I think it's a decent option, 0:11:57.559 --> 0:12:00.160 but really just for investors who are probably un are 0:12:00.200 --> 0:12:02.800 allocated right now versus Hey take all your money out 0:12:02.800 --> 0:12:04.760 of the US and go into Europe for example. 0:12:04.880 --> 0:12:06.360 You said you're talking to your clients about this. 0:12:06.559 --> 0:12:11.120 Are they nervous about us losing something like reserve status? 0:12:11.200 --> 0:12:14.079 Yes, full stop. I mean that's over the past few 0:12:14.080 --> 0:12:14.880 weeks we've done. 0:12:14.679 --> 0:12:15.760 You've never heard this before. 0:12:16.360 --> 0:12:17.240 We get it a lot. 0:12:17.720 --> 0:12:21.120 It's a question that it always lingers, especially when you 0:12:21.160 --> 0:12:23.680 have the idea of rising debts, rising deficits. There's no 0:12:23.760 --> 0:12:26.559 shortage of concerns about the outlook for the dollar and 0:12:26.840 --> 0:12:29.360 how investors should be positioned. But over the past few weeks, 0:12:29.440 --> 0:12:33.280 especially since so called Liberation Day, the client events and 0:12:33.320 --> 0:12:36.760 requests for communications have been through the roof no supply, 0:12:36.920 --> 0:12:40.200 no surprise, and that's a major concern. The question is 0:12:40.240 --> 0:12:44.120 what's going on with treasury, with foreigners potentially selling our debt, 0:12:44.440 --> 0:12:46.880 what's the outlook for the dollar. We try not to 0:12:46.880 --> 0:12:49.040 be too alarmist about it. We don't think the dollar 0:12:49.120 --> 0:12:53.120 is going to lose its reserve currency status overnight. I 0:12:53.160 --> 0:12:54.760 think there could be a risk over the long run. 0:12:54.840 --> 0:12:58.840 If the goal here by the Trump administration is to 0:12:58.880 --> 0:13:02.120 reduce those trade deficits, then maybe that means we have 0:13:02.240 --> 0:13:04.760 less of a capital account surplus, and it means foreigners 0:13:04.760 --> 0:13:07.959 over time don't need to hold as many dollars. It's 0:13:08.000 --> 0:13:10.320 a very long term view, though, so we're trying not 0:13:10.360 --> 0:13:13.560 to be alarmist. Obviously there's concerns out there, but we're 0:13:13.559 --> 0:13:15.400 not saying you need to get out of the dollar 0:13:15.520 --> 0:13:17.240 or dollar denominated assets right now. 0:13:17.280 --> 0:13:18.839 It's not something that happens. I have an eye something 0:13:18.880 --> 0:13:20.720 that happens gradually, and we have start to say this 0:13:20.760 --> 0:13:24.160 type place the dollar stats awaken goldsteins to appreciate that's 0:13:24.160 --> 0:13:25.960 been a story for the last couple of years now. 0:13:26.320 --> 0:13:27.920 And some of the people would also point to the 0:13:27.920 --> 0:13:29.960 state of cufs. We've seen this well, less of a 0:13:29.960 --> 0:13:32.840 willingness to hold the long bonped particularly moments of strengths 0:13:32.840 --> 0:13:35.240 and equity markets. You're not even seeing sensual signs of 0:13:35.240 --> 0:13:36.359 this stime to accumulate. 0:13:37.080 --> 0:13:37.719 What do you mean by. 0:13:37.679 --> 0:13:41.079 Starting to accumulate with foreign investors and nervousness about long term. 0:13:40.880 --> 0:13:44.520 Debt, nervousness about holding US assets, particularly a time of stress. 0:13:44.600 --> 0:13:46.280 You know, I don't know if it's so much a nervousness. 0:13:46.440 --> 0:13:48.840 I think it's just a gradual shift away. Hey, there's a. 0:13:48.840 --> 0:13:51.120 Lot going on right now. And if you're a foreign. 0:13:50.800 --> 0:13:53.280 Investor, and it seems like it might be private investors 0:13:53.320 --> 0:13:56.000 as opposed to turn for banks, obviously these are negative 0:13:56.040 --> 0:13:58.040 headlines if you're a foreigner, just the idea of maybe 0:13:58.080 --> 0:14:00.320 I don't want to hold that asset right now. But John, 0:14:00.360 --> 0:14:02.040 you hit the nail on the head. It's a long 0:14:02.200 --> 0:14:06.840 term potential shift This takes years for something like this 0:14:06.920 --> 0:14:09.120 to happen, and it's not our outlook great now, mainly 0:14:09.120 --> 0:14:10.880 because where else can you go? I mean, the dollar 0:14:11.000 --> 0:14:14.600 is still the most held asset, the most traded asset, 0:14:14.720 --> 0:14:16.400 so it's not something that we're worried about right now. 0:14:16.400 --> 0:14:17.679 And if you've been away for a while and came 0:14:17.720 --> 0:14:19.280 back and saw de x y A ninety nine, you 0:14:19.280 --> 0:14:20.240 probably wouldn't freak out. 0:14:20.440 --> 0:14:20.960 That's for sure. 0:14:21.160 --> 0:14:22.960 Going to see a Colin appreciate it as always, Colin 0:14:23.000 --> 0:14:35.000 mouse in there of Charles Swam on the latest Savita 0:14:35.000 --> 0:14:37.600 SUPERMANI but Bank for America writing, the only thing to 0:14:37.680 --> 0:14:40.640 fear is fear itself. Folks are worried about a recession, 0:14:40.720 --> 0:14:43.840 so they are acting recession rate speed and achieving policy 0:14:43.840 --> 0:14:47.040 clarity is healthy essence. Savita joined us now for more Sevita, 0:14:47.160 --> 0:14:47.560 good morning. 0:14:47.600 --> 0:14:48.120 It's good to see it. 0:14:48.160 --> 0:14:49.480 I'm morning great to see. 0:14:49.480 --> 0:14:52.120 A lot of cuts to outlooks. We're seeing suspensions of 0:14:52.240 --> 0:14:55.320 guidance repeatedly across the board from Corporate America this morning. 0:14:55.320 --> 0:14:56.520 What does that mean for you and the team. 0:14:56.640 --> 0:15:00.480 Yeah, well, I mean it's not great, It's definitely not good. 0:15:01.000 --> 0:15:03.720 We're seeing the revision ratio, just a number of cuts 0:15:03.760 --> 0:15:07.760 to number of raises to earnings approaching all time lows. 0:15:08.560 --> 0:15:10.440 Guidance is being suspended. 0:15:10.920 --> 0:15:11.880 That's a hit. 0:15:11.960 --> 0:15:14.760 I mean, we saw the same thing during COVID, probably 0:15:14.800 --> 0:15:17.680 more so during COVID because there was a much higher 0:15:17.800 --> 0:15:18.920 level of uncertainty. 0:15:19.760 --> 0:15:22.760 And what we found was the companies that continued. 0:15:22.200 --> 0:15:26.240 To guide actually traded at the widest premium to the 0:15:26.360 --> 0:15:29.360 non guiders or the suspenders that we've seen. So I 0:15:29.360 --> 0:15:32.960 think right now people want transparency, investors want to know, 0:15:34.040 --> 0:15:36.440 So that's that's one thing we're watching. I think what's 0:15:36.480 --> 0:15:38.800 interesting is that in the last week we've heard more 0:15:38.840 --> 0:15:44.840 companies talk about mitigation tactics for tariffs. 0:15:44.320 --> 0:15:46.480 Than we did in prior weeks. 0:15:47.320 --> 0:15:49.200 So I think that what we're in right now is 0:15:49.240 --> 0:15:51.520 the environment where corporates are doing what they always do, 0:15:51.560 --> 0:15:54.400 which is adapt, you know, figure out where they can, 0:15:54.520 --> 0:15:57.440 you know, kind of change things around the edges. And 0:15:57.680 --> 0:15:59.880 on top of that, we're seeing kind of a defer 0:16:00.400 --> 0:16:03.600 of big decisions. So it almost feels like we're in 0:16:03.640 --> 0:16:05.280 this phase where there's. 0:16:05.080 --> 0:16:07.000 No hiring, but no firing. 0:16:07.120 --> 0:16:10.400 There's you know, no new capital committed to projects, but 0:16:10.800 --> 0:16:14.520 projects aren't necessarily being canceled, and I think that's both 0:16:14.520 --> 0:16:15.040 good and bad. 0:16:15.080 --> 0:16:16.000 I mean, this pause. 0:16:16.080 --> 0:16:18.960 The longer it lasts, you know, the worse it gets 0:16:18.960 --> 0:16:22.640 for the economy. But at least we're not seeing just 0:16:22.640 --> 0:16:26.440 this sort of reactive firing canceling, you know, kind of 0:16:26.680 --> 0:16:27.880 a downdraft and activity. 0:16:28.000 --> 0:16:30.320 This is important for the data that comes on Friday Pace. 0:16:30.680 --> 0:16:33.280 When you say adapt, then if they're not firing, how 0:16:33.320 --> 0:16:34.080 are they adapting? 0:16:34.080 --> 0:16:34.720 What are they doing? 0:16:35.280 --> 0:16:38.640 So what they're doing is they're sort of shifting supply chain. 0:16:38.840 --> 0:16:41.800 They're thinking about more manufacturing in the US. 0:16:42.720 --> 0:16:45.680 I think that the idea that we've seen this. 0:16:45.760 --> 0:16:49.760 Movie before, back in twenty eighteen, especially with respect to China, 0:16:50.280 --> 0:16:53.360 gives companies a little bit more confidence that they know 0:16:53.480 --> 0:16:54.880 how to negotiate this. 0:16:55.120 --> 0:16:56.760 So I think that's a positive. 0:16:57.040 --> 0:17:00.400 What's interesting, though, is that you're hearing more weakness around 0:17:00.440 --> 0:17:05.800 consumer and even in consumer staples. So if you think 0:17:05.840 --> 0:17:08.639 you can hide in the food stocks and the you know, 0:17:08.680 --> 0:17:12.360 the defense not necessarily working this time, and I think 0:17:12.400 --> 0:17:16.640 that's also noteworthy. I will tell you, I mean everything 0:17:16.680 --> 0:17:20.480 we're looking at really points us in one direction, which 0:17:20.520 --> 0:17:24.400 is large cap value. And I feel like it's almost 0:17:24.440 --> 0:17:28.320 this kind of unassailable theme in an environment where the 0:17:28.440 --> 0:17:31.359 risks are you know, potentially higher yields, and we can 0:17:31.800 --> 0:17:36.040