WEBVTT - Bloomberg Surveillance TV: August 8th, 2025 0:00:02.400 --> 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 --> 0:00:35.840 Terminal and the Bloomberg Business App. 0:00:36.400 --> 0:00:38.559 We'll begin this hour with SMP five hundred set for 0:00:38.560 --> 0:00:41.440 a weekly gain. Savita Supermanian, a Bank of America writing 0:00:41.800 --> 0:00:44.760 sentiment is far from uphork. The consensus Wall Street broker 0:00:44.880 --> 0:00:48.720 is recommending an average at location of just fifty six percent. 0:00:49.120 --> 0:00:53.400 To US docs, this is not euphoria, Siviita joins us. Now, 0:00:53.440 --> 0:00:55.880 thank you so much, good morning, Thanks thanks for joining us. 0:00:56.040 --> 0:00:58.520 So it's not euphoria. What are we in right now? 0:00:58.520 --> 0:01:00.640 What is this world? Yeah, the world. 0:01:00.480 --> 0:01:02.800 Feels weird, but I think we're in that sort of 0:01:02.880 --> 0:01:07.160 wall of worry stage where there are certain themes that 0:01:07.200 --> 0:01:10.040 are getting a lot of credence and credibility like AI. 0:01:10.640 --> 0:01:12.840 Other themes are kind of falling out of bed like 0:01:12.920 --> 0:01:17.160 GLP one, and then you've got this potential broadening of 0:01:17.200 --> 0:01:20.120 the market that we've all been waiting for with baited breath, 0:01:20.560 --> 0:01:24.080 that I think is at a moment where it's it's 0:01:24.120 --> 0:01:27.320 actually in the work. So if you read the transcripts, 0:01:27.319 --> 0:01:30.320 and I love Lori's quote, but I think that when 0:01:30.360 --> 0:01:34.280 you read the transcripts, companies are worried, but they're also 0:01:34.720 --> 0:01:38.600 talking about the fact that they've delayed a lot of projects. 0:01:38.600 --> 0:01:41.800 They haven't canceled them, they've delayed them. That means there's 0:01:41.840 --> 0:01:45.240 a lot of pent up activity, business activity in the 0:01:45.319 --> 0:01:48.760 pipes that is likely to be unfurled over the next 0:01:48.760 --> 0:01:51.600 couple of quarters. And I think what really stemied that 0:01:51.720 --> 0:01:55.480 pickup in broadening and you know kind of other companies 0:01:55.520 --> 0:01:59.720 actually moving from you know they're very low low multiples 0:01:59.760 --> 0:02:03.280 and low low levels, is the idea that we're past 0:02:03.360 --> 0:02:06.240 a lot of the tariff uncertainty. I mean, granted, there 0:02:06.240 --> 0:02:08.400 are curveballs that are thrown at us every day, but 0:02:08.480 --> 0:02:10.760 we do know what's going on with Europe. You know, 0:02:10.760 --> 0:02:14.359 we've got a better handle on how companies can actually 0:02:14.400 --> 0:02:17.400 plan and do business. We're also starting to see I 0:02:17.400 --> 0:02:20.360 think the beginnings of this m and A cycle, even 0:02:20.400 --> 0:02:23.560 cross border MNA, so I think those are other animal spirits. 0:02:23.560 --> 0:02:27.000 I could on LESHA a broader pickup in economic activity. 0:02:27.639 --> 0:02:29.920 And then when we look at things like you know, 0:02:30.440 --> 0:02:35.280 companies reporting, I think what's really noteworthy is that at 0:02:35.280 --> 0:02:39.320 this point about eighty percent of companies have beat on revenue. 0:02:39.639 --> 0:02:40.360 That's new. 0:02:40.560 --> 0:02:43.400 We haven't seen this revenue surprise in a while. 0:02:43.919 --> 0:02:45.080 So what that means is that. 0:02:45.000 --> 0:02:49.560 Analysts mark down expectations very low for sales and demand, 0:02:50.000 --> 0:02:52.840 and they're beating those lowered expectations. So I think this 0:02:52.960 --> 0:02:55.320 all bodes well for a broader market. 0:02:55.440 --> 0:02:56.240 I would stick with. 0:02:56.280 --> 0:02:59.760 Large cap value stocks, companies that are you know, really 0:02:59.760 --> 0:03:02.760 in the penalty box but could actually start to work 0:03:02.800 --> 0:03:05.360 in an environment where you know, we do see earnings 0:03:05.360 --> 0:03:07.120 broaden in a bigger pickup. 0:03:07.160 --> 0:03:09.960 What happens if you add in rate cuts to all 0:03:10.000 --> 0:03:12.200 of that, is that just jet fuel for the broadening 0:03:12.200 --> 0:03:14.080 out and even maybe for some of the smaller companies. 0:03:14.160 --> 0:03:16.760 I think it's jet fuel for small caps. I don't 0:03:16.840 --> 0:03:19.600 know if large caps need a rate cut. I mean, 0:03:19.880 --> 0:03:21.320 the thing that I like about the S and P 0:03:21.400 --> 0:03:23.880 five hundred is it's kind of immune to the FED 0:03:24.480 --> 0:03:26.680 because a lot of these stocks really move more on 0:03:26.800 --> 0:03:29.800 long rates rather than short rates. So I think that, 0:03:30.200 --> 0:03:33.560 you know, the refinancing risk is really firmly in the 0:03:33.639 --> 0:03:36.120 Rustle two thousand rather than the S and P five hundred. 0:03:36.560 --> 0:03:38.560 But I do think that a FED cutting. 0:03:38.240 --> 0:03:40.880 Rates from these levels would be sort of a driver 0:03:41.000 --> 0:03:44.320 for more positive sentiment on stocks, a shift out of 0:03:44.400 --> 0:03:48.480 cash into stocks if inflation remains high. 0:03:48.800 --> 0:03:49.880 I think there's one. 0:03:49.840 --> 0:03:53.920 Pocket that the bulk of individual investors have to go to. 0:03:54.160 --> 0:03:57.360 So think about individual investors that are mostly retirees. They're 0:03:57.400 --> 0:04:01.000 sitting in big tech stocks and cash. If cash shields 0:04:01.000 --> 0:04:04.760 are coming down but inflation is still relatively. 0:04:04.240 --> 0:04:06.720 High, what are you going to do for real yield? 0:04:06.960 --> 0:04:10.119 This is where I think that dividends, cash return, etc. 0:04:10.560 --> 0:04:13.720 Come in. What worries me a little bit. 0:04:13.680 --> 0:04:15.880 About the big ballast of the S and P five 0:04:15.960 --> 0:04:19.359 hundred the AI spenders is that these guys are becoming 0:04:19.520 --> 0:04:24.479 more capital intensive and that might not be great for 0:04:24.880 --> 0:04:25.960 multiples for. 0:04:26.240 --> 0:04:27.599 Cash return, et cetera. 0:04:27.800 --> 0:04:30.919 In fact, we wrote a note this morning highlighting that 0:04:31.000 --> 0:04:34.600 the magnificent six if you take out Tesla is growing 0:04:34.760 --> 0:04:38.440 much more capital intensive and less R and D focused, 0:04:38.480 --> 0:04:41.800 and I think that's something to watch because we're sort 0:04:41.800 --> 0:04:45.400 of in the middle innings. I think of an AI 0:04:45.560 --> 0:04:50.640 spend cycle, and if that continues, the asset lightness of 0:04:50.720 --> 0:04:53.760 these megacap tech stocks is potentially compromised. 0:04:54.000 --> 0:04:54.720 Your note you have. 0:04:54.800 --> 0:04:57.840 We are moving from quote everyone spending on tech to 0:04:57.960 --> 0:04:59.720 tech spending on everything data. 0:05:00.000 --> 0:05:01.679 This has been a story of the entire quarter. 0:05:01.800 --> 0:05:03.760 Yeah, it has been the story, and it's been a 0:05:03.760 --> 0:05:05.760 lot of the reason why it's hard to be bearished. 0:05:05.760 --> 0:05:08.080 But I do think this idea of the business model 0:05:08.160 --> 0:05:11.200 changing is so interesting Cevita, because part of the thing 0:05:11.320 --> 0:05:14.360 that people bought tech for was because they were capital 0:05:14.440 --> 0:05:17.880 lights and you could get those really high valuations. 0:05:17.320 --> 0:05:20.039 And great growth and yeah, great growth and free cash level. 0:05:20.120 --> 0:05:22.520 So is there now a ceiling or will there start 0:05:22.560 --> 0:05:26.040 to be a ceiling on multiples on valuations if it's 0:05:26.040 --> 0:05:27.360 a different business model and. 0:05:27.279 --> 0:05:29.120 All of a sudden they're capital intensive. 0:05:28.800 --> 0:05:31.080 Well, I think you need to see the revenue beats 0:05:31.120 --> 0:05:34.200 for these companies, because if you don't see top line 0:05:34.400 --> 0:05:38.520 really accelerate along with capex, you're cutting into that earnings. 0:05:38.520 --> 0:05:40.120 You're cutting into that free cash flow. 0:05:40.400 --> 0:05:44.240 We've already seen the total shareholder return for the Magnificent 0:05:44.400 --> 0:05:49.360 six drop since twenty fifteen. We've seen capex to sales 0:05:49.400 --> 0:05:51.880 pick up, We've seen R and D to sales decline. 0:05:52.120 --> 0:05:55.480 It's all happening. The question is when will it get 0:05:55.480 --> 0:05:58.120 priced in? Because these stocks are trading near their all 0:05:58.200 --> 0:06:00.719 time highs in terms of multiples. I think what we 0:06:00.800 --> 0:06:04.000 start to see is a tradeoff where old economy stocks 0:06:04.200 --> 0:06:07.240 are getting all these new tools to get more efficient 0:06:07.520 --> 0:06:12.160 asset light, labor light, et cetera, whereas tech companies are 0:06:12.200 --> 0:06:15.440 starting to get more asset intensive. It's a very sort 0:06:15.440 --> 0:06:20.919 of slow burn shift or handing off of you know, 0:06:21.000 --> 0:06:22.920 multiple expansion to multiple contraction. 0:06:23.000 --> 0:06:24.520 But I think it's something to keep an eye on. 0:06:24.560 --> 0:06:26.320 When it comes to policy. We have the one big, 0:06:26.320 --> 0:06:29.040 beautiful bill. There is a little bit more of an understanding. 0:06:29.600 --> 0:06:31.800 What's going on with terras? Yeah, what are you waiting 0:06:31.800 --> 0:06:33.880 for out of Washington? What's the next shoot to drop? 0:06:34.200 --> 0:06:36.920 You know, I think right now there's there are not 0:06:37.120 --> 0:06:39.640 a lot of catalysts, and maybe you know the FED obviously, 0:06:39.760 --> 0:06:42.440 but I think that you know, we're in an environment 0:06:42.480 --> 0:06:44.200 where our near turn out look. 0:06:44.000 --> 0:06:45.279 On equities isn't great. 0:06:45.360 --> 0:06:47.440 I mean, we think a lot of the good news 0:06:47.520 --> 0:06:50.920 is priced into the market. If you look at reactions 0:06:50.960 --> 0:06:53.640 to beats, they were pretty good, but reactions to missues 0:06:53.720 --> 0:06:59.000 were terrible. In fact, the worst downdraft to earnings missues 0:06:59.000 --> 0:07:01.400 and sales missus in the history of our data since 0:07:01.760 --> 0:07:04.280 reg FD back in two thousand and one. So this 0:07:04.360 --> 0:07:06.640 means the good news is probably more than priced in 0:07:06.720 --> 0:07:08.920 in the near term. I do think if we see 0:07:08.960 --> 0:07:11.440 this broadening of earnings growth and we see a pickup 0:07:11.480 --> 0:07:14.960 in some of the economic indicators, maybe the FED cut 0:07:15.000 --> 0:07:18.320 is compromised or a continued cutting cycle is compromised, but 0:07:18.400 --> 0:07:20.360 I think that's the driver for better earnings. 0:07:20.360 --> 0:07:21.640 And you still think we're going to be at sixty 0:07:21.640 --> 0:07:22.600 three hundred year end. 0:07:22.920 --> 0:07:25.600 So sixty three one hundred is our year end forecast. 0:07:25.640 --> 0:07:28.240 I think it's tricky because we've also got the mid 0:07:28.360 --> 0:07:32.200 term elections coming up, So our twelve month forecast, which 0:07:32.240 --> 0:07:36.920 is probably more important or relevant, is really for more 0:07:37.080 --> 0:07:40.760 like five percent gains from here. I think what's interesting, though, 0:07:40.840 --> 0:07:43.320 is that the years where you've seen the biggest earnings 0:07:43.320 --> 0:07:47.560 recoveries haven't necessarily seen the strongest market returns. So that's 0:07:47.600 --> 0:07:49.760 kind of what we're operating on, is the idea. 0:07:49.520 --> 0:07:50.840 That earnings are coming back. 0:07:51.080 --> 0:07:56.600 We're exiting a manufacturing recession, but market returns aren't necessariarily 0:07:56.600 --> 0:07:57.560 going to be blockbuster. 0:07:57.720 --> 0:07:59.440 Tavita, thank you so much for your time this morning. 0:07:59.440 --> 0:08:00.600 Thank you, fantastics. 0:08:00.680 --> 0:08:13.160 Vita Supermanian of a Bank of America. We're joined by 0:08:13.160 --> 0:08:17.160 former Chief International Trade Counsel for the Senate Finance Committee, 0:08:17.200 --> 0:08:20.240 Bruce Hirsch, and he writes, our trading partners have had 0:08:20.280 --> 0:08:22.880 to adjust to the idea that these deals need to 0:08:22.880 --> 0:08:26.560 include offers to purchase specific US goods or commit to 0:08:26.640 --> 0:08:30.119 invest in the United States. The bigger the number, the better. Bruce, 0:08:30.160 --> 0:08:32.320 thank you so much for joining us. This is exactly 0:08:32.360 --> 0:08:35.040 what Danny and Oliver were just getting at. The issue 0:08:35.080 --> 0:08:37.760 I have with this premise for Switzerland is that they 0:08:37.760 --> 0:08:41.880 are top five foreign direct investor already into the United States. 0:08:43.080 --> 0:08:45.680 Well, they certainly are, and we have a close trading 0:08:45.720 --> 0:08:48.240 relationship with them, but we also have a trade deficit 0:08:48.280 --> 0:08:50.280 with them, and a large part of that deficit is 0:08:50.320 --> 0:08:53.840 on pharmaceuticals, and pharmaceuticals is one of the areas of 0:08:53.920 --> 0:08:57.319 great concern that President Trump he wants to onshore that manufacturing. 0:08:57.640 --> 0:08:59.240 So he's going to look at that deal perhaps a 0:08:59.280 --> 0:09:00.960 little bit differently, and he looks at some of the 0:09:01.000 --> 0:09:05.200 others also. He's really been counting on our trading partners 0:09:05.200 --> 0:09:07.600 to reduce their terrorists the close to zero and that's 0:09:07.640 --> 0:09:11.680 difficult politically for a country like Switzerland are doing agricultural products. 0:09:12.040 --> 0:09:14.640 So what do you think Switzerland can offer at this point, 0:09:14.679 --> 0:09:17.800 given the fact that Oliver just outlined how difficult these 0:09:17.800 --> 0:09:19.080 negotiations have become. 0:09:20.559 --> 0:09:23.439 Well, I mean, there's the possibility that they'll make some 0:09:23.559 --> 0:09:28.520 very tough decisions on agricultural terriffs. Beyond that, you know, 0:09:28.600 --> 0:09:31.959 if there have any other investments in the bank to 0:09:33.040 --> 0:09:35.480 put on the table here, that probably is going to 0:09:35.480 --> 0:09:38.320 be critical. I mean, I suspect that President Trump is 0:09:38.320 --> 0:09:42.120 looking for some sort of investments in domestic manufacturing here 0:09:42.200 --> 0:09:45.560 of pharmaceuticals, because that, again is what he cares about. 0:09:45.800 --> 0:09:48.280 But it's hard to say, and they really are between 0:09:48.280 --> 0:09:49.240 a rock and hard place. 0:09:49.520 --> 0:09:52.040 Bruce Amory's have done really great reporting on this that 0:09:52.280 --> 0:09:54.800 it did look like the Swiss and the US had 0:09:54.840 --> 0:09:57.760 a deal before all of this unraveled. It's a less 0:09:57.800 --> 0:10:01.680 traditional type of negotiation that you need to satisfy the 0:10:01.720 --> 0:10:05.640 President himself rather than a coalition of stakeholders or the 0:10:05.679 --> 0:10:08.200 Senate itself. You've been in the room under more traditional 0:10:08.240 --> 0:10:11.000 trade frameworks. How does it change the negotiation when you're 0:10:11.000 --> 0:10:14.280 really trying to favor a party of one instead of 0:10:14.320 --> 0:10:15.199 more stakeholders. 0:10:16.080 --> 0:10:17.840 Well, it's going to lead to a bit of confusion 0:10:17.880 --> 0:10:20.120 on both sides at the table because I mean, as 0:10:20.160 --> 0:10:22.440 you mentioned at one point, the question was, how do 0:10:22.480 --> 0:10:25.160 you satisfy Congress? They're the ones who have to approve 0:10:25.200 --> 0:10:27.240 the deal. With the end of the day, the groundwork 0:10:27.280 --> 0:10:30.640 will have been done with Congress, with stakeholders to develop 0:10:30.679 --> 0:10:33.520 a US position. Consultations will continue, your good sense of 0:10:33.520 --> 0:10:36.400 what you need to do. Now you're trying to satisfy 0:10:36.400 --> 0:10:39.320 a party of one. And because President Trump has a 0:10:39.360 --> 0:10:42.880 number of objectives and they can shift whether it's revenue 0:10:43.000 --> 0:10:46.640 or industrial policy, or leverage for trade or non trade objectives, 0:10:46.840 --> 0:10:48.520 you just don't know. So both sides are at the 0:10:48.520 --> 0:10:51.000 table and they're trying to figure out what will satisfy 0:10:51.080 --> 0:10:52.959 President Trump, and they're not really quite sure. 0:10:53.280 --> 0:10:55.480 Well to that point, we're in this environment where it 0:10:55.520 --> 0:10:57.320 has been figured out the top line of the deal 0:10:57.679 --> 0:11:00.920 first and then the details later bruce to what grief, 0:11:00.960 --> 0:11:04.559 does that actually give the US more leverage as things progress. 0:11:04.679 --> 0:11:06.880 The fact that we don't have these details, and it 0:11:06.960 --> 0:11:09.760 is something that Washington can push back on because you 0:11:09.800 --> 0:11:13.400 don't have the details in the fine print yet, well. 0:11:13.360 --> 0:11:15.880 Well, you know, it certainly gives the opportunity for leverage. 0:11:15.920 --> 0:11:18.920 It also gives the opportunity to disrupt the deals that 0:11:18.960 --> 0:11:21.959 you've just cut. We've already seen in some of the 0:11:22.320 --> 0:11:25.360 deals both with the EU and Japan. You know, they're 0:11:25.400 --> 0:11:28.079 concerned about when certain parts of the deal with regard 0:11:28.120 --> 0:11:31.720 to Section two thirty two National Security Secral tariffs, when 0:11:31.720 --> 0:11:33.360 they're going to be implemented. They were expecting them to 0:11:33.400 --> 0:11:37.080 be implemented right away and that hasn't happened. So, yes, 0:11:37.240 --> 0:11:40.160 it gives leverage, but you know, the question is at 0:11:40.160 --> 0:11:43.120 what cost and will it blow up the deal? So 0:11:43.160 --> 0:11:47.080 it's a great challenge. It also sort of undermines a 0:11:47.120 --> 0:11:50.000 lot of what these countries are looking for and what 0:11:50.000 --> 0:11:52.920 the markets you're looking for, which is stability, because to 0:11:52.960 --> 0:11:56.240 the extent that there are things like that, there are 0:11:56.240 --> 0:11:59.640 these opportunities to disrupt the deals by continuing to push 0:11:59.720 --> 0:12:01.880 after the top line has been agreed to. You know, 0:12:01.920 --> 0:12:05.360 that can undermine that sense of stability that everybody's seeking. 0:12:05.720 --> 0:12:08.480 Mody is looking for stability right now, Bruce. What's going 0:12:08.480 --> 0:12:10.880 on with India and that trade negotiation. 0:12:12.440 --> 0:12:15.600 Well, again, this really highlights the fact that the deals 0:12:15.600 --> 0:12:17.640 are made at the top. And you know, we had 0:12:17.640 --> 0:12:19.920 a situation in which the negotiators are right up to 0:12:20.000 --> 0:12:22.200 the cabinet level thought they had a deal with India. 0:12:22.520 --> 0:12:25.200 It was presented to President Trump and he looked at 0:12:25.240 --> 0:12:29.160 it eventually and decided not enough. Again, a lot of 0:12:29.200 --> 0:12:31.400 countries are going to zero. India wasn't willing to go 0:12:31.440 --> 0:12:35.199 to zero on their agricultural goods, and so he just 0:12:35.240 --> 0:12:38.160 said no. And this is going to create a real 0:12:38.320 --> 0:12:41.640 challenge for a number of reasons. You know, we have 0:12:41.720 --> 0:12:43.800 to India is going to have to make some tough choices. 0:12:43.840 --> 0:12:47.560 Potentially they may have themselves kind of check of some sort. 0:12:47.880 --> 0:12:50.920 But politically it's very difficult for Prime Minister Moti because 0:12:50.960 --> 0:12:54.240 he presents himself as a strong leader and having to 0:12:54.559 --> 0:12:57.040 appear to cave to pressure is really going to be 0:12:57.120 --> 0:13:00.800 very difficult for him, either on these tariffs or on 0:13:00.840 --> 0:13:03.880 the relationship with Russia. So it's going to be a challenge. 0:13:03.640 --> 0:13:05.599 On that one, and he's even go out with the 0:13:05.679 --> 0:13:08.880 rhetoric saying this is going to be challenging, but I'm 0:13:08.920 --> 0:13:10.560 going to have to do it. He doesn't want to 0:13:10.559 --> 0:13:13.120 cave at this moment. We're gonna be watching those trade 0:13:13.160 --> 0:13:17.160 negotiations very carefully. Former Chief International Trade Council for the 0:13:17.200 --> 0:13:18.000 Senate Finance. 0:13:17.840 --> 0:13:20.240 Committee, Bruce Hirsh, thank you so much for joining us. 0:13:30.040 --> 0:13:32.840 Don Vin of Key Bank has a sector weight rating 0:13:32.880 --> 0:13:33.880 on Intel's shares. 0:13:33.960 --> 0:13:34.960 John joins us now. 0:13:35.160 --> 0:13:37.920 John Mandeep is really outlining here that it's not just 0:13:37.960 --> 0:13:40.040 the President of the United States. He might be the 0:13:40.080 --> 0:13:43.000 final nail in the coffin, but actually there is the 0:13:43.160 --> 0:13:46.839 board that's pushing back on the CEO strategy right now 0:13:46.880 --> 0:13:47.840 when it comes to Intel. 0:13:47.920 --> 0:13:50.480 Do you think he can stay in the top position? 0:13:53.200 --> 0:13:56.000 I think he can, right. I think if you kind 0:13:56.000 --> 0:13:59.120 of take a step back, there's only a handful of 0:13:59.520 --> 0:14:02.840 executive is out there that are capable of leading Intel. 0:14:03.000 --> 0:14:07.000 And clearly during the search he was their top pick, 0:14:07.240 --> 0:14:10.520 right he was on the board of Intel's deeply familiar 0:14:10.640 --> 0:14:14.120 with the challenges that they had. He's had a lot 0:14:14.160 --> 0:14:20.120 of success historically, He's been successfully run Cadence. So I 0:14:20.160 --> 0:14:21.920 think he's you know, I think there's a lot of 0:14:21.960 --> 0:14:24.880 noise going on right now. But you know, taking a 0:14:24.920 --> 0:14:28.240 step back, he's the right person to kind of run 0:14:28.280 --> 0:14:29.080 Intel at this point. 0:14:29.920 --> 0:14:31.240 He's the right person John. 0:14:31.400 --> 0:14:33.760 But what happens if it's a White House that is 0:14:33.880 --> 0:14:37.120 unsatisfied if he stays on as CEO, Just how painful 0:14:37.160 --> 0:14:38.440 could they make things for Intel? 0:14:40.600 --> 0:14:44.000 Yeah, I think he's got to learn to kind of 0:14:44.040 --> 0:14:47.560 manage up, if you will, to the White House. Obviously, 0:14:47.760 --> 0:14:52.320 this is an uncharted territory for public company CEOs if 0:14:52.360 --> 0:14:55.480 you are singled out by the President of the United States. 0:14:55.520 --> 0:14:59.920 But yes, this would be extremely difficult if he doesn't 0:15:00.360 --> 0:15:02.440 figure out how to kind of manage up to the 0:15:02.440 --> 0:15:06.120 White House. You know, a big beneficiary Intel is of 0:15:06.160 --> 0:15:07.960 the of the Chips Act, Right, They're going to get 0:15:07.960 --> 0:15:11.720 a significant amount of funding from the US government to 0:15:11.760 --> 0:15:15.960 support their manufacturing initiatives. And if he's not willing to 0:15:16.520 --> 0:15:20.520 play nice and manage manage up, you know, a lot 0:15:20.560 --> 0:15:22.760 of that funding could be at the at risk. 0:15:23.240 --> 0:15:25.760 Well, he wrote a note made it public as well, 0:15:25.800 --> 0:15:27.600 basically saying that they're trying to work with the White 0:15:27.640 --> 0:15:30.280 House to alleviate any concerns John, what would it look 0:15:30.360 --> 0:15:33.680 like to manage up how would Intel get out of 0:15:33.720 --> 0:15:36.520 the situation in the ire of the president that they 0:15:36.520 --> 0:15:37.160 have right now. 0:15:38.600 --> 0:15:41.480 Yeah, I think at this point, I think the tension 0:15:41.840 --> 0:15:46.800 between the administration and Lipu right now is how much 0:15:46.880 --> 0:15:50.640 they're willing to commit to manufacturing the US. I think 0:15:50.680 --> 0:15:54.320 if you look at Lipwui's predecessor, Pat he kind of 0:15:55.120 --> 0:15:57.000 maybe was a little bit too aggressive in terms of 0:15:57.000 --> 0:16:01.160 building out capacity to manufacture in the US is of 0:16:01.200 --> 0:16:03.960 the mindset of if we build out this capacity, they 0:16:03.960 --> 0:16:07.720 will come. Lippoo, as we've seen, has taken a much 0:16:07.760 --> 0:16:11.760 more discipline approach at spending. He's come out and he said, 0:16:11.800 --> 0:16:15.080 you know, we are very excited about our next process 0:16:15.120 --> 0:16:18.080 Note fourteen A, but we are going to be much 0:16:18.120 --> 0:16:21.720 more disciplined about it. Right if fourteen A doesn't pan 0:16:21.840 --> 0:16:26.480 out as we'd like, I'm not ready at this point 0:16:26.520 --> 0:16:31.320 to fully commit to fourteen A, which is leading manufacturing 0:16:31.320 --> 0:16:34.520 in the US. So I think he's got to carefully 0:16:34.600 --> 0:16:38.520 choose his words and commit communicate to the White House 0:16:38.760 --> 0:16:41.720 that he's fully committed to US manufacturing, but he's got 0:16:41.720 --> 0:16:46.880 to be very careful about committing the full amount there 0:16:46.960 --> 0:16:49.240 and just be very careful about how he selects his words. 0:16:49.360 --> 0:16:51.600 John, How can he be explicit to the President of 0:16:51.600 --> 0:16:53.560 the United States when the Wall Street Journal this morning 0:16:53.640 --> 0:16:57.200 is saying that he and some Intel directors have disagreed 0:16:57.520 --> 0:17:00.280 about simple questions as whether or not the company should 0:17:00.320 --> 0:17:03.080 stay in the manufacturing business or exit entirely. 0:17:03.360 --> 0:17:04.600 Doesn't he need to shore. 0:17:04.440 --> 0:17:08.480 Up his own company, the directors the board before he 0:17:08.600 --> 0:17:11.159 starts making matter of fact statements to the President of 0:17:11.160 --> 0:17:11.800 the United States. 0:17:14.320 --> 0:17:18.199 Yes, I do agree that he's got to kind of 0:17:18.200 --> 0:17:22.480 figure out also how to manage the board. But it's 0:17:22.480 --> 0:17:25.800 not a surprise that they're having differences. But I think 0:17:25.800 --> 0:17:27.600 this is why they needed to bring them in, you know, 0:17:27.600 --> 0:17:31.240 I'll pat the previous YEO had the full support of 0:17:31.240 --> 0:17:35.600 the board, and obviously that strategy wasn't working, so they 0:17:35.640 --> 0:17:38.560 had to bring somebody in to kind of change up 0:17:38.600 --> 0:17:41.200 the strategy. And I think that's that's what the board 0:17:41.359 --> 0:17:43.520 and Laboo are going through it now. They're going through 0:17:43.560 --> 0:17:45.320 some of those growing pains. 0:17:45.680 --> 0:17:47.080 John, I would love to get your read on the 0:17:47.080 --> 0:17:48.879 wider chip sector now that we've had some of their 0:17:48.920 --> 0:17:49.960 earnings under our belt. 0:17:50.000 --> 0:17:50.480 It was an. 0:17:50.400 --> 0:17:54.480 AMD that was punished for voicing uncertainty when it comes 0:17:54.480 --> 0:17:56.159 to whether or not they'll be able to sell some 0:17:56.200 --> 0:17:58.840 of their key technology in China. You had the lights 0:17:58.880 --> 0:18:01.600 of NXP for exams Semple saying they were uncertain of 0:18:01.640 --> 0:18:03.800 how much of a pull forward they had in terms 0:18:03.800 --> 0:18:06.359 of orders. Just how much clarity do you have on 0:18:06.359 --> 0:18:08.520 the sector as a whole for where we move from 0:18:08.520 --> 0:18:11.119 here with some of these tensions still very front and center. 0:18:12.840 --> 0:18:14.920 Yeah, there are clearly a lot of cross currents right now. 0:18:15.280 --> 0:18:17.800 I think the trend that we are seeing Last night 0:18:17.840 --> 0:18:21.680 we had Marketship, which was a great print. Stocks down 0:18:23.000 --> 0:18:25.119 eight percent pre market today. I think what we're seeing 0:18:25.200 --> 0:18:28.240 right now is it doesn't matter how good your print 0:18:28.320 --> 0:18:31.440 is and how good your results and guidance is, everything's 0:18:31.440 --> 0:18:33.720 getting sold in this market. I think people are very 0:18:33.760 --> 0:18:37.000 nervous that a lot of the strong results that we're 0:18:37.000 --> 0:18:40.520 getting in this environment is a function of pull forward 0:18:40.560 --> 0:18:43.200 demand related to tariffs. I think there's a lot of 0:18:43.240 --> 0:18:46.879 concerns that this could result in a weaker second half. 0:18:46.960 --> 0:18:49.560 There's a lot of concerns that this could undermine kind 0:18:49.560 --> 0:18:51.840 of the cyclical recovery that we're seeing in the broader 0:18:52.600 --> 0:18:54.560 chip sector. And then on top of that, right, you've 0:18:54.600 --> 0:18:59.040 got these geopolitical uncertainty that is layering on top of that. Right, 0:18:59.240 --> 0:19:02.240 just the other day in the middle of the earning period, 0:19:02.760 --> 0:19:05.480 you know, you have the Trumpet administration levy one hundred 0:19:05.480 --> 0:19:10.280 percent check tariff on companies that aren't willing to commit 0:19:10.359 --> 0:19:12.159 to building in the US. 0:19:12.359 --> 0:19:14.720 Right, and then potentially export controls. 0:19:14.760 --> 0:19:17.760 And do they actually mean that they're going to be 0:19:18.040 --> 0:19:20.200 licenses that are going to be taken back or will 0:19:20.240 --> 0:19:21.760 they just be you turned like we saw at the 0:19:21.800 --> 0:19:23.800 age twenty, John, thank you so much for your time 0:19:23.840 --> 0:19:37.639 this morning, John Vin of key Bank Capital Markets, Colin Marker, 0:19:37.760 --> 0:19:40.560 Charles Schwab writing the need for new FED chair to 0:19:40.600 --> 0:19:41.440 cut rates. 0:19:41.240 --> 0:19:42.640 Could be a point. 0:19:42.760 --> 0:19:45.120 By the time FED chair pals term is up next year, 0:19:45.440 --> 0:19:48.040 the FED may have cut three or four times. 0:19:48.400 --> 0:19:50.600 Colin joins us now for more. Is this the irony 0:19:50.640 --> 0:19:50.919 of all this? 0:19:51.000 --> 0:19:53.480 The President is really job boning the FED and wants 0:19:53.520 --> 0:19:56.080 to talk about maybe regime change at the FED by 0:19:56.119 --> 0:19:57.360 time to get some of these appointments. 0:19:57.400 --> 0:19:58.639 They were dumb what he wants. 0:19:58.920 --> 0:20:00.640 I think Sid, I don't think it's going to matter 0:20:00.680 --> 0:20:03.760 because what we saw with obviously the headline about the 0:20:03.760 --> 0:20:06.480 weakening labor market. Now, there was already some support for 0:20:06.560 --> 0:20:09.040 RAID cuts. It seems like there's even more support for 0:20:09.119 --> 0:20:11.719 RAID cuts based on comments from various FED officials, and 0:20:11.960 --> 0:20:13.879 the data basically says that if we do get that 0:20:13.920 --> 0:20:17.840 weakening labor market, and if we look forward to say April, 0:20:17.840 --> 0:20:19.600