1 00:00:02,440 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,640 --> 00:00:10,040 Speaker 2: This is the. 3 00:00:10,000 --> 00:00:13,440 Speaker 3: Bloomberg Daybreak Aisia podcast. I'm Doug Prisner. You can join 4 00:00:13,480 --> 00:00:16,239 Speaker 3: Brian Curtis and myself for the stories, making news and 5 00:00:16,320 --> 00:00:19,439 Speaker 3: moving markets in the Apec region. You can subscribe to 6 00:00:19,480 --> 00:00:22,200 Speaker 3: the show anywhere you get your podcast and always on 7 00:00:22,239 --> 00:00:26,080 Speaker 3: Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app. 8 00:00:27,240 --> 00:00:30,440 Speaker 4: The White House is fighting Parkinson rumors today and the 9 00:00:30,480 --> 00:00:33,199 Speaker 4: President is still standing very defiant. I want to get 10 00:00:33,200 --> 00:00:36,320 Speaker 4: into both of those things, at least White House. The 11 00:00:36,400 --> 00:00:40,360 Speaker 4: battle today questions about why a neurologist has been visiting 12 00:00:40,520 --> 00:00:42,680 Speaker 4: at the White House, joining us as Bloomberg White House 13 00:00:42,680 --> 00:00:45,680 Speaker 4: reporter Josh Wingrove, who's cover of the story and he 14 00:00:45,720 --> 00:00:48,920 Speaker 4: has the write up on the Bloomberg Terminal. Josh, thanks 15 00:00:48,920 --> 00:00:52,239 Speaker 4: so much. The report is that this neurologist is a 16 00:00:52,280 --> 00:00:54,040 Speaker 4: Parkinson's specialist. What do we know? 17 00:00:55,560 --> 00:00:58,800 Speaker 2: Yeah, this is circulated from several outlets and the question 18 00:00:58,880 --> 00:01:01,920 Speaker 2: is basically, you know, why was this doctor at the 19 00:01:01,960 --> 00:01:04,440 Speaker 2: White House? Now? The visitor laws I should mention, have 20 00:01:05,280 --> 00:01:08,000 Speaker 2: you know tens or hundreds of thousands of entries, all 21 00:01:08,080 --> 00:01:10,480 Speaker 2: kinds of people come to the White House, it's not 22 00:01:10,520 --> 00:01:14,600 Speaker 2: reliable in terms of listing who they meet with. But 23 00:01:14,640 --> 00:01:16,360 Speaker 2: what jumped out today is the White House just simply 24 00:01:16,360 --> 00:01:20,800 Speaker 2: would not say whether this doctor ever met with either 25 00:01:20,920 --> 00:01:25,000 Speaker 2: President Biden's doctor or President Biden himself. And so it's 26 00:01:25,040 --> 00:01:27,760 Speaker 2: sort of left us with more questions than we began with. 27 00:01:27,920 --> 00:01:29,960 Speaker 2: But just a thirty thousand feet you know, Biden is 28 00:01:30,000 --> 00:01:33,440 Speaker 2: sort of digging in. He is telling his own party 29 00:01:33,480 --> 00:01:35,240 Speaker 2: to sort of, you know, shut up and get in 30 00:01:35,280 --> 00:01:39,000 Speaker 2: line because he's going to be the nominee. And for 31 00:01:39,120 --> 00:01:41,520 Speaker 2: many of them, frankly, that's been working. You know, they're 32 00:01:41,520 --> 00:01:43,640 Speaker 2: saying this is the reality, is not really a mechanism 33 00:01:43,680 --> 00:01:47,360 Speaker 2: to force him out if he's dead set ongoing. And 34 00:01:47,440 --> 00:01:52,000 Speaker 2: of course he's declining to respond to suggestions or calls 35 00:01:52,040 --> 00:01:55,880 Speaker 2: for you know, other medical testing since that debate to 36 00:01:56,040 --> 00:01:58,040 Speaker 2: give McLean bill of health. So that's where we're at 37 00:01:58,120 --> 00:01:58,840 Speaker 2: on this one right now. 38 00:01:59,000 --> 00:02:02,240 Speaker 4: Yeah, and I'm going to get to his being defiant 39 00:02:02,280 --> 00:02:04,640 Speaker 4: and just a second, we're going to get there. But 40 00:02:04,880 --> 00:02:07,880 Speaker 4: the gist is that a krange Jean Pierre saying that 41 00:02:07,920 --> 00:02:10,440 Speaker 4: he has had these as a matter of fact, the 42 00:02:10,520 --> 00:02:12,919 Speaker 4: latest in February and read from part of it as 43 00:02:12,960 --> 00:02:16,239 Speaker 4: part of his routine physicals, So just dismissing it, right. 44 00:02:16,760 --> 00:02:19,960 Speaker 2: Yeah, these are the annual physicals that he has, and 45 00:02:20,000 --> 00:02:25,239 Speaker 2: they do sort of preliminary screenings for neurological disorders, including 46 00:02:25,320 --> 00:02:29,160 Speaker 2: Parkinson's sort of preliminary thing, and his most recent one 47 00:02:29,320 --> 00:02:32,160 Speaker 2: from whatever that would be five months ago. Now said 48 00:02:32,200 --> 00:02:34,400 Speaker 2: that there was no indication of fear. Of course, the 49 00:02:34,480 --> 00:02:37,320 Speaker 2: worry is a p a lot of Democrats. President Biden 50 00:02:37,360 --> 00:02:42,760 Speaker 2: has noticeably slowed or had more verbal fumbles in the 51 00:02:42,760 --> 00:02:46,000 Speaker 2: months since that, since that physical, and so we asked 52 00:02:46,040 --> 00:02:49,239 Speaker 2: today is there another physical that's going to be coming, 53 00:02:49,720 --> 00:02:51,679 Speaker 2: and they said not this year, So at the White 54 00:02:51,680 --> 00:02:54,080 Speaker 2: House's position as the president doesn't need to be examined 55 00:02:54,440 --> 00:02:56,799 Speaker 2: or have another full physical before the election. 56 00:02:57,320 --> 00:03:02,400 Speaker 4: Yeah, Now you mentioned the president remaining defiant today. This 57 00:03:02,480 --> 00:03:05,960 Speaker 4: is in the face of some stories that we're running, 58 00:03:06,000 --> 00:03:09,880 Speaker 4: some very influential donors saying that he should step aside. 59 00:03:09,880 --> 00:03:12,200 Speaker 4: But basically he's just pushing back on them as well. 60 00:03:12,800 --> 00:03:15,960 Speaker 2: Biden earlier today began the day by saying, look, you know, 61 00:03:16,360 --> 00:03:18,160 Speaker 2: I don't care what millionaires think. And then you know, 62 00:03:18,200 --> 00:03:20,399 Speaker 2: three hours later he was just call with donors, which 63 00:03:20,400 --> 00:03:24,359 Speaker 2: speaks to the potential risk right if big money donations 64 00:03:24,800 --> 00:03:26,840 Speaker 2: dry up for him. But you know, it's really a 65 00:03:26,840 --> 00:03:29,560 Speaker 2: defining day across the board for him, both with donors 66 00:03:30,000 --> 00:03:33,000 Speaker 2: and with House members. Excuse me kicking off the day 67 00:03:33,480 --> 00:03:35,720 Speaker 2: with a letter to them. You know, he hasn't called 68 00:03:35,760 --> 00:03:39,960 Speaker 2: the vast majority of Democratic legislators saying basically, I'm not 69 00:03:40,080 --> 00:03:43,360 Speaker 2: setting down, I'm not getting out of this. Get behind me. 70 00:03:43,600 --> 00:03:46,360 Speaker 2: The more equival about this, the worse it gets. But 71 00:03:46,440 --> 00:03:50,680 Speaker 2: we've seen there's a steady drumbeat of Democrats offering either 72 00:03:50,880 --> 00:03:54,920 Speaker 2: very tepid statements, some supportive statements for sure, but others 73 00:03:54,960 --> 00:03:56,720 Speaker 2: saying cloud out that they don't think Biden should be 74 00:03:56,720 --> 00:03:59,280 Speaker 2: the nominee. So it's the fluid situation right now. Biden 75 00:03:59,280 --> 00:04:02,600 Speaker 2: I think expressing optimism that they sort of quelled the revolt, 76 00:04:02,920 --> 00:04:04,760 Speaker 2: but it's unclear to me. Yeah. 77 00:04:04,800 --> 00:04:08,320 Speaker 4: But and just to make things a little more complicated, 78 00:04:09,120 --> 00:04:11,360 Speaker 4: we're hearing the next few days will tell the tale. 79 00:04:11,360 --> 00:04:14,680 Speaker 4: The next few days will tell the tale. NATO begins tomorrow. 80 00:04:14,880 --> 00:04:17,240 Speaker 4: He's not going to pull out while while those meetings 81 00:04:17,279 --> 00:04:19,640 Speaker 4: are in progress, is he or am I just totally 82 00:04:19,640 --> 00:04:20,720 Speaker 4: walking a different direction? 83 00:04:21,360 --> 00:04:23,159 Speaker 2: I mean, of course, and as of now, Just to 84 00:04:23,200 --> 00:04:27,120 Speaker 2: be clear, Biden, there's no intention of play out as 85 00:04:27,160 --> 00:04:30,760 Speaker 2: the nominee, and certainly none of you resigning as the president. 86 00:04:30,800 --> 00:04:32,920 Speaker 2: And it's not only NATO. He's announced he's going to Michigan, 87 00:04:32,920 --> 00:04:35,440 Speaker 2: a key swing state, on Friday, and next week he's 88 00:04:35,480 --> 00:04:38,040 Speaker 2: going to Texas and Nevada. And Nevada of course, another 89 00:04:38,560 --> 00:04:42,240 Speaker 2: key swing state. He is preceding full steam as if 90 00:04:42,279 --> 00:04:45,520 Speaker 2: he is the nominee. There's no real sort of big 91 00:04:45,640 --> 00:04:48,719 Speaker 2: marquee name Democrats yet that are really calling on him 92 00:04:49,040 --> 00:04:51,600 Speaker 2: to step aside. In fact, some big names have come 93 00:04:51,640 --> 00:04:54,000 Speaker 2: out in the last few hours saying they support him. 94 00:04:54,000 --> 00:04:57,440 Speaker 2: One of them is Alexandria Tasio Cortez, a very prominent progressive, 95 00:04:58,000 --> 00:05:00,760 Speaker 2: who said she spoke to with Biden atte link this weekend. 96 00:05:00,839 --> 00:05:03,720 Speaker 2: Of course, we curious why they would be speaking so long. 97 00:05:03,720 --> 00:05:06,480 Speaker 2: It sort of suggests that she was trying to relay 98 00:05:06,560 --> 00:05:08,680 Speaker 2: something to him, but says that he's dead set on 99 00:05:08,800 --> 00:05:10,560 Speaker 2: running and that the matter is settled. So I think 100 00:05:10,600 --> 00:05:12,920 Speaker 2: if Biden gets more cases like that, he might come 101 00:05:12,920 --> 00:05:14,440 Speaker 2: out of the woods. Of course, the risk is that 102 00:05:14,480 --> 00:05:17,520 Speaker 2: he has another issue like this debate, you know, another appearance, 103 00:05:17,880 --> 00:05:20,440 Speaker 2: maybe even the press conference that he's got scheduled for Thursday. 104 00:05:20,440 --> 00:05:22,839 Speaker 2: At the end of that, NATO stomach goes badly and 105 00:05:22,880 --> 00:05:24,880 Speaker 2: things could just flare up again. But right now it 106 00:05:24,920 --> 00:05:26,360 Speaker 2: looks like he's trying to clamp down. 107 00:05:26,680 --> 00:05:28,440 Speaker 4: Looks like he's playing out the string. 108 00:05:28,520 --> 00:05:28,680 Speaker 2: Now. 109 00:05:29,080 --> 00:05:31,560 Speaker 4: Just one more question about this, and not to overdo it, 110 00:05:31,640 --> 00:05:36,160 Speaker 4: but maybe I've missed something. But if how came Jefferies 111 00:05:36,240 --> 00:05:38,640 Speaker 4: and Chuck Schumer came out and said he's the man 112 00:05:39,200 --> 00:05:41,200 Speaker 4: get in line, wouldn't that end all of this? 113 00:05:42,520 --> 00:05:45,520 Speaker 2: It might. Both of them have come out with quasi 114 00:05:45,600 --> 00:05:50,039 Speaker 2: stavements of support in the past handful of hours. They've 115 00:05:50,040 --> 00:05:53,320 Speaker 2: been kind of silent before that. It's tough for them 116 00:05:53,400 --> 00:05:56,440 Speaker 2: because their frontline members want to not really run so 117 00:05:56,600 --> 00:05:59,760 Speaker 2: close to buy them the people that will determine whether 118 00:05:59,800 --> 00:06:01,560 Speaker 2: they either take the House or in the case of 119 00:06:01,640 --> 00:06:03,719 Speaker 2: send and hold the Senate, And so it's a tougher 120 00:06:03,760 --> 00:06:06,240 Speaker 2: calculus for them. I think you'd have to have just 121 00:06:06,279 --> 00:06:09,560 Speaker 2: almost like across the board united stalance of every big 122 00:06:09,640 --> 00:06:12,560 Speaker 2: name Democrat you've ever heard of, coming out armed linked 123 00:06:12,600 --> 00:06:15,440 Speaker 2: telling Joe Biden not to run again. Hey, there's absolutely 124 00:06:15,440 --> 00:06:17,599 Speaker 2: no evidence that that's coming together right now. On the 125 00:06:17,640 --> 00:06:21,600 Speaker 2: contrary more than we're supporting not and B it's not 126 00:06:21,640 --> 00:06:23,720 Speaker 2: clear that he would respond to the visiting. 127 00:06:24,279 --> 00:06:28,039 Speaker 4: All right, Josh, awesome information as always really appreciated, Thank 128 00:06:28,080 --> 00:06:31,200 Speaker 4: you so much. That is a Bloomberg White House reporter. 129 00:06:31,320 --> 00:06:33,640 Speaker 4: One of our White House reporters, Josh Winingrow. 130 00:06:40,640 --> 00:06:43,680 Speaker 5: We wanted to take a closer look at France and 131 00:06:43,760 --> 00:06:47,640 Speaker 5: the aftermath of some pretty turbulent elections there. Joining us 132 00:06:47,640 --> 00:06:51,760 Speaker 5: now is Jacob Kuka Garden, Senior Fellow at the Peterson 133 00:06:51,800 --> 00:06:57,520 Speaker 5: Institute for International Economics. So Jacob looks like divided parliament here? 134 00:06:57,680 --> 00:07:00,560 Speaker 5: Will we have stasis? Will we have bridlock? 135 00:07:02,680 --> 00:07:05,039 Speaker 6: I certainly think there is a possibility of gridlock, But 136 00:07:05,080 --> 00:07:09,120 Speaker 6: I think the key message from this election was really that, certainly, 137 00:07:09,120 --> 00:07:13,920 Speaker 6: in financial terms, I would argue that the true tail risks, 138 00:07:14,040 --> 00:07:18,320 Speaker 6: which would have been a potentially very confrontational right wing 139 00:07:18,360 --> 00:07:23,880 Speaker 6: government on the penn or a fiscally extremely prolificate left 140 00:07:23,920 --> 00:07:28,520 Speaker 6: wing government, has both been avoided. Instead, you have this 141 00:07:29,680 --> 00:07:34,880 Speaker 6: in French political recent political history, unprecedented situation of yes, 142 00:07:35,080 --> 00:07:39,200 Speaker 6: a hung parliament, but nonetheless a parliament where at least 143 00:07:39,240 --> 00:07:46,000 Speaker 6: mathematically there is a possibility for as centrist, the moderate left, 144 00:07:46,520 --> 00:07:50,560 Speaker 6: the question will be really generate, what is the norm 145 00:07:50,880 --> 00:07:54,640 Speaker 6: in many European countries of sort of you know, parties 146 00:07:54,680 --> 00:08:00,520 Speaker 6: coming together in compromises for majority coalitions that is not 147 00:08:01,160 --> 00:08:04,160 Speaker 6: has to really not been necessary in France, and we 148 00:08:04,200 --> 00:08:07,080 Speaker 6: will see whether in the coming weeks this is possible. 149 00:08:07,440 --> 00:08:10,600 Speaker 3: So let's begin here with the idea that Macrome made 150 00:08:10,680 --> 00:08:13,600 Speaker 3: this decision for a snap election after the elections for 151 00:08:13,720 --> 00:08:18,000 Speaker 3: European Parliament. We can debate what his strategy may have 152 00:08:18,040 --> 00:08:21,480 Speaker 3: been at the time. Do you think he succeeded in 153 00:08:21,640 --> 00:08:26,480 Speaker 3: trying to avoid a cliff if we can understand it 154 00:08:26,480 --> 00:08:29,040 Speaker 3: in those terms, which is to say, a lot more 155 00:08:29,080 --> 00:08:33,640 Speaker 3: momentum being developed on the far right side. Did he 156 00:08:33,720 --> 00:08:37,080 Speaker 3: avoid that? I mean, clearly Le Penn's party did not 157 00:08:37,120 --> 00:08:39,760 Speaker 3: get a majority. The polls that we had at the 158 00:08:39,840 --> 00:08:42,600 Speaker 3: end of last week forecast that her party would have 159 00:08:42,880 --> 00:08:45,800 Speaker 3: controlled the majority of the assembly. That did not happen. 160 00:08:45,840 --> 00:08:49,800 Speaker 3: But did this necessarily the entire shift that we're discussing here, 161 00:08:49,960 --> 00:08:51,040 Speaker 3: did that need to happen? 162 00:08:52,080 --> 00:08:54,880 Speaker 6: I think, you know, if you look at the possible 163 00:08:55,280 --> 00:08:59,600 Speaker 6: alternative to calling this snap election, which would have been 164 00:08:59,720 --> 00:09:04,240 Speaker 6: that the previous parliament would probably over the course of 165 00:09:04,720 --> 00:09:09,000 Speaker 6: twenty twenty four have yielded a vote of no confidence 166 00:09:09,160 --> 00:09:15,280 Speaker 6: against the government anyway, leading to a likely a new 167 00:09:15,360 --> 00:09:20,600 Speaker 6: election in the fall or in the fourth quarter, and 168 00:09:20,640 --> 00:09:25,680 Speaker 6: then coming out of the clear victory Biolet Penn in 169 00:09:25,720 --> 00:09:29,880 Speaker 6: the European elections, Maccom basically decided cleanly to gamble to 170 00:09:30,000 --> 00:09:35,240 Speaker 6: try to blunt the political momentum of Marie Penn and 171 00:09:35,280 --> 00:09:39,439 Speaker 6: I think he succeeded in that. Alternatively, in my opinion, 172 00:09:39,440 --> 00:09:43,520 Speaker 6: who would have risked becoming an outright lame duck and 173 00:09:43,640 --> 00:09:47,959 Speaker 6: basically sort of had to continue for the derainder, for 174 00:09:48,080 --> 00:09:52,520 Speaker 6: the remainder of his parliamentary or term in office. With 175 00:09:52,720 --> 00:09:56,800 Speaker 6: Marie de Penn as the clear favorite for the presidency 176 00:09:56,880 --> 00:10:00,520 Speaker 6: in twenty twenty seven, I think also that is far 177 00:10:00,640 --> 00:10:07,160 Speaker 6: less certain today. So while he certainly lost seats in 178 00:10:07,200 --> 00:10:11,679 Speaker 6: his party, lost about eighty seats in the new parliament, 179 00:10:12,480 --> 00:10:16,479 Speaker 6: but nonetheless he has managed to blunt the political momentum 180 00:10:16,640 --> 00:10:18,640 Speaker 6: of Maline de Penn and I think that was his 181 00:10:18,800 --> 00:10:21,559 Speaker 6: primary motivation and in that he succeeded. 182 00:10:22,280 --> 00:10:23,760 Speaker 5: Okay, I want to ask you a little bit of 183 00:10:24,320 --> 00:10:26,840 Speaker 5: out of left field question here. So it looks like 184 00:10:26,880 --> 00:10:29,960 Speaker 5: in France you'll have probably some sort of combination of 185 00:10:30,080 --> 00:10:33,160 Speaker 5: a moderate to left government here there had been a 186 00:10:33,200 --> 00:10:35,600 Speaker 5: lot of fears that this would drift to the right. 187 00:10:36,080 --> 00:10:39,080 Speaker 5: In the UK, you have the more liberal of the 188 00:10:39,120 --> 00:10:44,080 Speaker 5: two major parties gaining power. Does that hold implications for 189 00:10:44,120 --> 00:10:46,600 Speaker 5: the United States? I mean, does that bode well for 190 00:10:46,800 --> 00:10:48,760 Speaker 5: perhaps the Democrats in the US election? 191 00:10:50,400 --> 00:10:53,760 Speaker 6: Well, I mean, to the extent that that type of 192 00:10:53,760 --> 00:10:58,600 Speaker 6: political news travels across borders, I think it does. I mean, 193 00:10:58,640 --> 00:11:04,160 Speaker 6: I think it does show that a sort of moderist, 194 00:11:04,640 --> 00:11:11,800 Speaker 6: leftist coalition or political agenda does have even in today, 195 00:11:11,960 --> 00:11:16,560 Speaker 6: his stay and age does have residents with voters in 196 00:11:16,640 --> 00:11:22,200 Speaker 6: advanced democratic market economies, including of course both France, Sengmand 197 00:11:22,200 --> 00:11:25,160 Speaker 6: and the United States. But of course, again you know, 198 00:11:25,200 --> 00:11:29,280 Speaker 6: each country's circumstances are different. But you know, if I 199 00:11:29,360 --> 00:11:32,120 Speaker 6: was Joe Biden, I would be happier than if I 200 00:11:32,280 --> 00:11:36,320 Speaker 6: was Donald Trump. Reading about the election results in both 201 00:11:36,360 --> 00:11:37,320 Speaker 6: the UK and France. 202 00:11:38,120 --> 00:11:40,160 Speaker 3: One of the things that came up in our conversation 203 00:11:40,640 --> 00:11:44,200 Speaker 3: the night that we were getting the early results from 204 00:11:44,240 --> 00:11:48,480 Speaker 3: the parliamentary elections in the European Union was the issue 205 00:11:48,520 --> 00:11:51,680 Speaker 3: of supporting war in Ukraine, and our guest at that 206 00:11:51,760 --> 00:11:54,440 Speaker 3: time said, you really have to wait until the outcome 207 00:11:54,480 --> 00:11:56,720 Speaker 3: of the French election to determine whether or not the 208 00:11:56,720 --> 00:11:59,120 Speaker 3: EU is going to continue in this effort. Do you 209 00:11:59,160 --> 00:12:01,520 Speaker 3: have a read on that. I mean, with the results 210 00:12:01,520 --> 00:12:05,520 Speaker 3: that we're describing, will the European Union continue to do 211 00:12:05,600 --> 00:12:09,680 Speaker 3: everything that it can to support Zelensky and his mission. 212 00:12:11,120 --> 00:12:14,439 Speaker 6: Yes. I think that one of the few unambiguous things 213 00:12:14,440 --> 00:12:18,640 Speaker 6: you can actually say from this hung parliament is that 214 00:12:19,080 --> 00:12:23,640 Speaker 6: it was very good news for Ukraine because even a 215 00:12:23,760 --> 00:12:28,360 Speaker 6: hung parliament, or at least a parliament in which President Maccon, 216 00:12:28,480 --> 00:12:31,319 Speaker 6: who is obviously has turned into one of the most 217 00:12:31,320 --> 00:12:35,679 Speaker 6: hawkish European leaders on Ukraine, he will not, under any 218 00:12:35,720 --> 00:12:41,720 Speaker 6: circumstances be confronted with a sort of an antagonistic and 219 00:12:43,240 --> 00:12:49,320 Speaker 6: somewhat at least far more pro Russian parliamentary majority led 220 00:12:49,360 --> 00:12:54,920 Speaker 6: by Marie Lepen which means that he, as president is 221 00:12:54,960 --> 00:12:59,679 Speaker 6: still going to be able to exercise his dominant leadership 222 00:12:59,760 --> 00:13:05,680 Speaker 6: role on foreign affairs, including French support for Ukraine. And 223 00:13:06,280 --> 00:13:11,040 Speaker 6: he's also likely, I certainly believe, to have a government 224 00:13:11,120 --> 00:13:16,400 Speaker 6: or a parliament that will ultimately appropriate either by presidential 225 00:13:16,480 --> 00:13:22,920 Speaker 6: decree or by parliamentary majority, more French taxpayers money for Ukraine. 226 00:13:23,520 --> 00:13:27,720 Speaker 6: So if you combine that with clearly the support also 227 00:13:27,840 --> 00:13:31,760 Speaker 6: by the new labor led government in the UK, the 228 00:13:31,800 --> 00:13:37,480 Speaker 6: government in Poland, the German government, etc. Yes, then absolutely 229 00:13:38,240 --> 00:13:45,080 Speaker 6: European support following the French election is probably more united 230 00:13:45,880 --> 00:13:50,600 Speaker 6: behind continuing supporting Ukraine than at any moment since the 231 00:13:50,600 --> 00:13:51,120 Speaker 6: war began. 232 00:13:51,640 --> 00:13:55,559 Speaker 5: Yeah, well back to the domestic story in France just briefly, 233 00:13:55,559 --> 00:13:57,840 Speaker 5: because we need to get a prime minister or premier. 234 00:13:58,600 --> 00:14:01,040 Speaker 5: Is it the new Popular Front that would have the 235 00:14:01,080 --> 00:14:04,120 Speaker 5: sort of early step in this would they would they 236 00:14:04,120 --> 00:14:07,080 Speaker 5: put forward somebody? And how does that process play out? 237 00:14:08,240 --> 00:14:12,800 Speaker 6: Well, constitutionally, it's still the president, it's McCall who has 238 00:14:12,840 --> 00:14:19,320 Speaker 6: the prerogative to nominate the prime minister. Then the new 239 00:14:19,400 --> 00:14:23,720 Speaker 6: parliament can choose to reject that parliament that that prime 240 00:14:23,760 --> 00:14:27,400 Speaker 6: minister by by passing a vote of no confidence. But 241 00:14:28,080 --> 00:14:32,360 Speaker 6: there's no doubt that the Popular Front on the left 242 00:14:32,400 --> 00:14:36,440 Speaker 6: will try to sort of seize the political initiative by 243 00:14:36,560 --> 00:14:41,120 Speaker 6: putting forward a candidate that they then would would sort 244 00:14:41,160 --> 00:14:45,160 Speaker 6: of try to impose on President McCall, But that he's 245 00:14:45,280 --> 00:14:49,880 Speaker 6: under no political obligation to do to to accept that 246 00:14:49,960 --> 00:14:53,840 Speaker 6: candidate if that candidate is not to his political liking, 247 00:14:54,720 --> 00:14:58,120 Speaker 6: which may be the case if the candidate is from 248 00:14:58,720 --> 00:15:02,560 Speaker 6: the sort of most left, this part of the Popular 249 00:15:02,600 --> 00:15:07,120 Speaker 6: Front coalition. So there's going to be a political struggle 250 00:15:07,160 --> 00:15:10,080 Speaker 6: to come up with the right candidate. But again the 251 00:15:10,160 --> 00:15:14,240 Speaker 6: key point is that so far, what President McComb has done, 252 00:15:14,320 --> 00:15:19,880 Speaker 6: he has rejected the offer to resign by the incumbent 253 00:15:19,960 --> 00:15:24,880 Speaker 6: Prime Minister Attal. He's asked him to stay in power 254 00:15:24,920 --> 00:15:27,760 Speaker 6: for the duration of the Olympics and probably the summer. 255 00:15:27,840 --> 00:15:29,920 Speaker 5: All right, Jacob, thank you so much for joining us. 256 00:15:29,960 --> 00:15:33,120 Speaker 5: Jacob funk Kirka Gard, Senior Fellow at the Peterson Institute 257 00:15:33,160 --> 00:15:44,200 Speaker 5: for International Economics, talking here about the French election. Well, 258 00:15:44,280 --> 00:15:46,640 Speaker 5: joining us now on the program for Look at Markets 259 00:15:46,680 --> 00:15:51,600 Speaker 5: is Quincy Crosby, chief Global strategist at LPL Financial. Quincy 260 00:15:51,720 --> 00:15:54,480 Speaker 5: so as Doug highlighted, and we've talked about all morning 261 00:15:54,880 --> 00:15:58,160 Speaker 5: this week, Powell and Congress, the CPI report, and the 262 00:15:58,200 --> 00:16:01,560 Speaker 5: start of the second quarter earned this period, which one 263 00:16:01,560 --> 00:16:04,280 Speaker 5: do you think will prove most impactful. 264 00:16:05,440 --> 00:16:07,800 Speaker 7: I think it's going to be the CPI followed by 265 00:16:07,880 --> 00:16:11,320 Speaker 7: the PPI. Just as we heard, Powell is going to 266 00:16:11,400 --> 00:16:16,880 Speaker 7: try to stay close as he can to a lack 267 00:16:16,920 --> 00:16:21,800 Speaker 7: of commitment towards a rate cut, that the House of 268 00:16:21,880 --> 00:16:25,160 Speaker 7: Representatives are going to go after him, Many of the 269 00:16:25,200 --> 00:16:29,280 Speaker 7: Senators are going to go after you know, basically begging 270 00:16:29,360 --> 00:16:33,400 Speaker 7: for a rate cut, tempting to have him understand how 271 00:16:33,440 --> 00:16:36,520 Speaker 7: many of their constituents are hurting with the higher interest 272 00:16:36,600 --> 00:16:42,440 Speaker 7: rates and the ensuing late payments. The delinquencies are stacking up, 273 00:16:42,440 --> 00:16:45,360 Speaker 7: and we'll hear that from the banks starting on Friday. 274 00:16:45,880 --> 00:16:48,920 Speaker 3: So do the data support the idea that we could 275 00:16:48,920 --> 00:16:50,880 Speaker 3: get a rate cut as soon as September? 276 00:16:50,920 --> 00:16:56,040 Speaker 7: In your view, yes, I mean if it continues. We're 277 00:16:56,080 --> 00:17:01,120 Speaker 7: seeing a slow down in the economic landscape now about 278 00:17:01,160 --> 00:17:05,160 Speaker 7: one point five percent for the second quarter. This follows 279 00:17:05,240 --> 00:17:10,639 Speaker 7: a week first quarter, and we're also seeing the consumer 280 00:17:11,240 --> 00:17:14,360 Speaker 7: more and more discerning. Granted, you know, we do see 281 00:17:14,400 --> 00:17:18,720 Speaker 7: people taking cruises, they're traveling, the airlines are doing really well. 282 00:17:18,920 --> 00:17:21,840 Speaker 7: But what we're going to be looking for over the 283 00:17:21,840 --> 00:17:24,760 Speaker 7: next couple of weeks and during the earning seasons as well, 284 00:17:25,440 --> 00:17:29,360 Speaker 7: is whether or not we're hearing from companies, whether we're 285 00:17:29,359 --> 00:17:32,320 Speaker 7: hearing from some of the data that we receive. Isn't 286 00:17:32,400 --> 00:17:36,000 Speaker 7: just the lowest way, journer, because what we're suggesting now 287 00:17:36,359 --> 00:17:39,239 Speaker 7: is that it is moving up the wage scale, and 288 00:17:39,400 --> 00:17:42,800 Speaker 7: that is where the concern comes in. Not that we 289 00:17:42,840 --> 00:17:46,159 Speaker 7: don't care about the lowest wage journers, but if it 290 00:17:46,280 --> 00:17:50,280 Speaker 7: starts crawling up the wage scale, you're looking at, you know, 291 00:17:50,400 --> 00:17:53,199 Speaker 7: the most important element in the economy, which is the 292 00:17:53,240 --> 00:17:56,400 Speaker 7: consumer becoming even more careful. 293 00:17:57,119 --> 00:17:59,480 Speaker 5: Yeah, and you know, if you're the fed, you don't 294 00:17:59,520 --> 00:18:01,520 Speaker 5: exist in it vacuum. You have to live in the 295 00:18:01,560 --> 00:18:04,480 Speaker 5: real world. You have an extremely dead, laid in economy. 296 00:18:04,760 --> 00:18:08,520 Speaker 5: The last thing you want or need is to see 297 00:18:08,560 --> 00:18:11,440 Speaker 5: a sort of you know turn and all of a 298 00:18:11,480 --> 00:18:14,040 Speaker 5: sudden you're losing jobs and you sort of bring deflation 299 00:18:14,200 --> 00:18:16,760 Speaker 5: back into the picture. That would be a disaster. So 300 00:18:17,119 --> 00:18:19,520 Speaker 5: you think that they would that they would want to 301 00:18:19,600 --> 00:18:23,040 Speaker 5: embrace the dual mandate and to be looking at both. 302 00:18:24,440 --> 00:18:28,639 Speaker 7: Well, you know, Chairman Powell has been talking about maximum 303 00:18:28,680 --> 00:18:31,679 Speaker 7: employment more and more. He's even gone as far as saying, 304 00:18:32,200 --> 00:18:35,640 Speaker 7: if we expect and see deterioration in the labor market, 305 00:18:35,880 --> 00:18:38,879 Speaker 7: we will go in and start to cut rates, you know, 306 00:18:39,000 --> 00:18:40,720 Speaker 7: for the market. When we look at it from the 307 00:18:40,760 --> 00:18:44,160 Speaker 7: market's perspective, that's not what they want to see. They 308 00:18:44,200 --> 00:18:47,520 Speaker 7: want to see rates coming down because inflation is coming down, 309 00:18:47,640 --> 00:18:51,480 Speaker 7: and therefore it doesn't warrant the higher rates. But we 310 00:18:52,160 --> 00:18:54,879 Speaker 7: look at all all of the data. We see the 311 00:18:54,920 --> 00:18:57,879 Speaker 7: four point one percent unemployment, We see the two months 312 00:18:57,880 --> 00:19:03,800 Speaker 7: of downgrades, and also the ism service sector going into contraction, 313 00:19:04,480 --> 00:19:08,400 Speaker 7: manufacturing in contraction. You don't have to be a PhD 314 00:19:08,560 --> 00:19:12,879 Speaker 7: economist to put this all together and say it's cooling. 315 00:19:13,080 --> 00:19:17,600 Speaker 7: Cooling does not mean collapsing. But the FED is so worried, 316 00:19:17,720 --> 00:19:21,280 Speaker 7: I think because they made such a big mistake early on, 317 00:19:21,560 --> 00:19:24,440 Speaker 7: you know, with the supply chaine, that they don't want 318 00:19:24,480 --> 00:19:27,600 Speaker 7: to make a mistake now. But the worry is that 319 00:19:27,680 --> 00:19:29,320 Speaker 7: they could. They don't. 320 00:19:29,359 --> 00:19:31,760 Speaker 5: You know, you said cooling is not collapsing. You know, 321 00:19:31,800 --> 00:19:34,520 Speaker 5: cutting twenty five or fifty bases points is also not 322 00:19:34,840 --> 00:19:37,480 Speaker 5: a caving right exactly. 323 00:19:37,800 --> 00:19:42,359 Speaker 7: The ECB did it. They had inflation coming down but 324 00:19:42,440 --> 00:19:45,959 Speaker 7: not fast enough. They had some wage inflation that they 325 00:19:46,000 --> 00:19:48,880 Speaker 7: had to deal with. But you saw in the minutes, 326 00:19:49,040 --> 00:19:52,640 Speaker 7: their version of our minutes, the notes. They said it 327 00:19:52,680 --> 00:19:55,439 Speaker 7: was prudent to do it, It was prone to do 328 00:19:55,480 --> 00:19:59,840 Speaker 7: it because you can't catch it necessarily quickly enough into 329 00:20:00,160 --> 00:20:03,119 Speaker 7: use that medicine of a rate cut quickly enough. And 330 00:20:03,160 --> 00:20:05,159 Speaker 7: they said that they're going to be obviously watching to 331 00:20:05,200 --> 00:20:07,919 Speaker 7: see if inflation picks up again, but they felt that 332 00:20:08,000 --> 00:20:10,760 Speaker 7: they had to do it. The FED, I think, is 333 00:20:10,800 --> 00:20:14,080 Speaker 7: so worried about this that they're making a mistake that 334 00:20:14,119 --> 00:20:18,080 Speaker 7: they may wind up making a more serious mistake, especially 335 00:20:18,160 --> 00:20:22,440 Speaker 7: if the employment landscape begins to deteriorate. As he said 336 00:20:22,440 --> 00:20:24,840 Speaker 7: at a faster clip, So the earning season. 337 00:20:25,080 --> 00:20:28,080 Speaker 3: Oh yeah, sorry, Well that's a great segue into earnings 338 00:20:28,119 --> 00:20:31,080 Speaker 3: because I want to talk about risk assets next. Given 339 00:20:31,200 --> 00:20:33,760 Speaker 3: everything that you just laid out, how do you view 340 00:20:33,800 --> 00:20:35,320 Speaker 3: the environment for risk assets? 341 00:20:36,400 --> 00:20:40,320 Speaker 7: It's still obviously price action tells us it's still very good. 342 00:20:40,359 --> 00:20:43,800 Speaker 7: We always have to focus on price action. It's still good. 343 00:20:44,080 --> 00:20:48,280 Speaker 7: But what's interesting, though, is the role that the megatech 344 00:20:48,480 --> 00:20:52,879 Speaker 7: actually play that when you start getting worried about the economy, 345 00:20:53,119 --> 00:20:56,000 Speaker 7: you get worried about what's going on in your is 346 00:20:56,080 --> 00:20:58,919 Speaker 7: Asia is slowing, is China is still slowing? Where do 347 00:20:58,960 --> 00:21:01,920 Speaker 7: you want to be? Want to be in those very names. 348 00:21:02,200 --> 00:21:06,520 Speaker 7: So you see a migration back into the megaatech names 349 00:21:06,880 --> 00:21:11,240 Speaker 7: simply because they have very strong balance sheets, their margins 350 00:21:11,240 --> 00:21:13,960 Speaker 7: are attractive, they don't have debt, they have all the 351 00:21:14,080 --> 00:21:17,520 Speaker 7: things you want During the difficult period. The only thing 352 00:21:17,560 --> 00:21:20,600 Speaker 7: that you don't want of those heavy valuations. And so 353 00:21:20,760 --> 00:21:23,880 Speaker 7: that's that's what we've seen over and over again. Every 354 00:21:23,920 --> 00:21:26,280 Speaker 7: time there's been a threat that a recession is coming, 355 00:21:26,600 --> 00:21:28,399 Speaker 7: money goes right to those names. Again. 356 00:21:30,080 --> 00:21:33,440 Speaker 5: The equity market has had this kind of extraordinary ability 357 00:21:33,520 --> 00:21:35,720 Speaker 5: to keep its head above water here. I mean, you know, 358 00:21:35,760 --> 00:21:37,960 Speaker 5: you'll get a couple of days where you've got to 359 00:21:37,960 --> 00:21:40,920 Speaker 5: sell off Nvidia and some of the AI players, but 360 00:21:40,960 --> 00:21:43,359 Speaker 5: then yeah, on the same day, you'll have Apple and 361 00:21:43,440 --> 00:21:45,800 Speaker 5: Amazon up, you know, and day like today, you know, 362 00:21:45,840 --> 00:21:48,520 Speaker 5: and Video recovered and Apple was up, but then you 363 00:21:48,560 --> 00:21:52,520 Speaker 5: had Google Meta and and also Microsoft down. 364 00:21:52,840 --> 00:21:53,040 Speaker 6: You know. 365 00:21:53,119 --> 00:21:55,320 Speaker 5: It's almost as though like there's a puppet master up 366 00:21:55,320 --> 00:21:56,359 Speaker 5: there kind of pulling the string. 367 00:21:58,080 --> 00:22:01,560 Speaker 7: No, that's absolutely true. You know, a couple of months ago, 368 00:22:01,680 --> 00:22:05,000 Speaker 7: we thought we were going to have a pullback. You know, 369 00:22:05,040 --> 00:22:08,159 Speaker 7: the market was overbought, it was staying overbought, and we 370 00:22:08,160 --> 00:22:10,560 Speaker 7: thought we'll have a pullback, and it was healthy. We 371 00:22:10,600 --> 00:22:13,960 Speaker 7: wanted a pullback. Lo and behold and Video comes out 372 00:22:13,960 --> 00:22:17,120 Speaker 7: with a comment, no pullback. In fact, the market moves 373 00:22:17,160 --> 00:22:21,040 Speaker 7: higher with the megatech names. It is fairly astounding, but 374 00:22:21,240 --> 00:22:23,560 Speaker 7: the fact of the matter is, you know, when we 375 00:22:23,600 --> 00:22:26,399 Speaker 7: look at something more more basic, we look at the 376 00:22:26,400 --> 00:22:31,280 Speaker 7: consumer staples and we look at consumer discretionary. Consumer discretionary 377 00:22:31,320 --> 00:22:35,199 Speaker 7: is still holding up versus consumer staples. So if we 378 00:22:35,240 --> 00:22:39,000 Speaker 7: see a ship there moving over to consumer staples, it 379 00:22:39,080 --> 00:22:43,000 Speaker 7: is telling. That's so the market telling us consumers are 380 00:22:43,240 --> 00:22:46,240 Speaker 7: pulling away from discretionary items. And I know that you 381 00:22:46,240 --> 00:22:48,440 Speaker 7: could say that Tesla is in that group, but we 382 00:22:48,920 --> 00:22:51,120 Speaker 7: tend to pull that out and look at the rest 383 00:22:51,160 --> 00:22:55,320 Speaker 7: of consumer discretionaries. They are still holding up. So right 384 00:22:55,359 --> 00:23:00,080 Speaker 7: now the verdict is still, you know, a cooling economy. 385 00:22:59,800 --> 00:23:04,359 Speaker 3: But I'm sorry there, I just was acknowledging in the affirmative. 386 00:23:04,400 --> 00:23:06,560 Speaker 3: I agree with you. And one of the other things 387 00:23:06,560 --> 00:23:08,520 Speaker 3: that we want to get in before we let you 388 00:23:08,600 --> 00:23:12,199 Speaker 3: go here is the earnings Delta Airlines, PEPSI Thursday, but 389 00:23:12,280 --> 00:23:14,880 Speaker 3: the big numbers happen on Friday. With the banks. We've 390 00:23:14,920 --> 00:23:17,879 Speaker 3: got City Group in there, JP, Morgan, Wells, Fargo. I 391 00:23:17,920 --> 00:23:20,639 Speaker 3: even think Bank of New York will report. How do 392 00:23:20,680 --> 00:23:23,040 Speaker 3: you view the financials in the current environment that we're 393 00:23:23,080 --> 00:23:23,679 Speaker 3: talking about. 394 00:23:24,800 --> 00:23:25,760 Speaker 1: They're doing well. 395 00:23:25,840 --> 00:23:29,080 Speaker 7: They're doing well. In fact, the big banks, the big 396 00:23:29,080 --> 00:23:31,840 Speaker 7: money center banks are going to have a nice tail 397 00:23:31,920 --> 00:23:36,960 Speaker 7: one from investment. Banking deals are starting to pick up. 398 00:23:37,040 --> 00:23:41,120 Speaker 7: Granted it's not you know, the boom days, it's not gangbusters, 399 00:23:41,160 --> 00:23:42,840 Speaker 7: but it is starting to pick up and they're going 400 00:23:42,880 --> 00:23:46,320 Speaker 7: to find that that's going to help them. And also, 401 00:23:46,600 --> 00:23:49,200 Speaker 7: you know, the fact of the matter is loans are 402 00:23:49,200 --> 00:23:53,280 Speaker 7: still attractive. The credit market, that's something we watch assiduously, 403 00:23:53,840 --> 00:23:57,919 Speaker 7: is still holding up, except we're starting to see weakness 404 00:23:58,119 --> 00:24:01,800 Speaker 7: at the very lower end. The spreads are widening, So 405 00:24:01,840 --> 00:24:04,640 Speaker 7: we want to have them talk about that and whether 406 00:24:04,760 --> 00:24:07,560 Speaker 7: or not the credit card payments are being made is 407 00:24:07,680 --> 00:24:10,360 Speaker 7: getting worse. And again, as they said, what are they 408 00:24:10,440 --> 00:24:15,359 Speaker 7: seeing above the lowest wage germs because they have credit 409 00:24:15,359 --> 00:24:18,560 Speaker 7: cards that cover it. But I want to add one more. Yeah, 410 00:24:20,160 --> 00:24:23,080 Speaker 7: the banks are coming out. We like industrials. Pay attention 411 00:24:23,200 --> 00:24:28,960 Speaker 7: to fastenal Fast that's the ticker. Why because they are 412 00:24:29,240 --> 00:24:34,639 Speaker 7: a industrial distributor across the country. They are very close 413 00:24:34,720 --> 00:24:37,520 Speaker 7: to the regions. They're close to the ground and you 414 00:24:37,680 --> 00:24:39,600 Speaker 7: kind of hear what they have to say. They trade 415 00:24:39,600 --> 00:24:42,800 Speaker 7: on NASDAK. We will be watching them along with the 416 00:24:42,800 --> 00:24:45,879 Speaker 7: big banks, but they'll tell us a story about our economy. 417 00:24:46,280 --> 00:24:50,919 Speaker 5: Yeah, all right, Quincy, good advice there, Fastenal. We'll keep 418 00:24:50,920 --> 00:24:54,680 Speaker 5: an eye on. Quincy Crosby, Chief Global Strategistic LPL Financial. 419 00:25:01,600 --> 00:25:07,560 Speaker 5: Anna rathmad Cio at CBIZ Investment Advisory Services. Anna, We're 420 00:25:07,560 --> 00:25:10,960 Speaker 5: coming into earning season and you've got analyst upgrades on 421 00:25:11,359 --> 00:25:15,400 Speaker 5: profit outnumbering down grades. But at the same time, you've 422 00:25:15,440 --> 00:25:20,080 Speaker 5: got forward to say, twelve month earnings estimates at an 423 00:25:20,119 --> 00:25:22,520 Speaker 5: all time high, and that's coming at a time when 424 00:25:22,560 --> 00:25:25,440 Speaker 5: it looks like the economy is slowing. Does the bond 425 00:25:25,520 --> 00:25:27,840 Speaker 5: market look more attractive now than the stock market? 426 00:25:29,440 --> 00:25:33,000 Speaker 8: Good evening, Thanks for having me well. I feel like 427 00:25:33,080 --> 00:25:35,560 Speaker 8: the bond market and stock market have different things to 428 00:25:35,640 --> 00:25:39,800 Speaker 8: worry about, you know. Starting with the stock market, we 429 00:25:39,920 --> 00:25:43,600 Speaker 8: are not just price for a perfection here, We're a 430 00:25:43,640 --> 00:25:46,399 Speaker 8: price for outperforming perfection. And on top of that, as 431 00:25:46,440 --> 00:25:49,560 Speaker 8: you mentioned, the expectations keep going up. I do think 432 00:25:49,640 --> 00:25:52,960 Speaker 8: that the market is probably right for some kind of 433 00:25:53,000 --> 00:25:57,240 Speaker 8: a downturn, and so from that perspective, maybe bonds are 434 00:25:58,040 --> 00:25:59,520 Speaker 8: more attractive if you look. 435 00:25:59,359 --> 00:26:01,200 Speaker 1: At some as yield action. 436 00:26:01,440 --> 00:26:06,200 Speaker 8: Definitely from last week, there was a response to some 437 00:26:06,280 --> 00:26:10,200 Speaker 8: of the weaker underpinnings of the labor market on Friday, 438 00:26:10,880 --> 00:26:13,760 Speaker 8: despite the fact that the headlines at twenty six thousand 439 00:26:13,920 --> 00:26:17,600 Speaker 8: jobs gained, the tenure actually fell. So I do think 440 00:26:17,680 --> 00:26:21,080 Speaker 8: that there's room for the treasury market to actually react 441 00:26:21,160 --> 00:26:24,959 Speaker 8: to some of the slower economics, softer economic data that 442 00:26:25,000 --> 00:26:28,600 Speaker 8: we do anticipate will continue. So if we're looking at 443 00:26:28,800 --> 00:26:31,560 Speaker 8: bonds versus stocks, I do think that there's room for 444 00:26:31,640 --> 00:26:34,960 Speaker 8: stocks to gain, and certainly room for I mean bonds 445 00:26:35,000 --> 00:26:39,080 Speaker 8: to gain, and for certainly room for stocks to correct. 446 00:26:39,200 --> 00:26:41,440 Speaker 3: So you're talking about the reaction to the bond market. 447 00:26:41,480 --> 00:26:44,200 Speaker 3: I'm more curious about the reaction function on the part 448 00:26:44,240 --> 00:26:45,760 Speaker 3: of the Fed. I mean, when do we get the 449 00:26:45,760 --> 00:26:46,600 Speaker 3: first rate cut. 450 00:26:48,280 --> 00:26:50,880 Speaker 1: So we'll see what he says tomorrow, mister Powell. 451 00:26:51,240 --> 00:26:53,280 Speaker 8: I mean that testimony is going to be sliced and 452 00:26:53,359 --> 00:26:56,000 Speaker 8: diced like the meaning medts were. But I think this 453 00:26:56,119 --> 00:26:59,760 Speaker 8: is there's a lot of anticipation for tomorrow, especially because 454 00:26:59,760 --> 00:27:03,160 Speaker 8: in the meeting minutes it was pretty clear that we're 455 00:27:03,240 --> 00:27:06,560 Speaker 8: sort of coming off of the worries about inflation. There 456 00:27:06,600 --> 00:27:11,480 Speaker 8: is definitely some confirmation of belief that this inflationary forces 457 00:27:11,520 --> 00:27:14,439 Speaker 8: will continue. And so now we're paying attention to labor market, 458 00:27:14,480 --> 00:27:17,159 Speaker 8: and then boom on Friday, we got a labor market 459 00:27:17,200 --> 00:27:20,119 Speaker 8: that was softer than expected. So we'll see what he 460 00:27:20,200 --> 00:27:24,400 Speaker 8: says tomorrow. If he is dubvish, we have always been 461 00:27:24,520 --> 00:27:28,439 Speaker 8: one cut in December. I think depending on how he 462 00:27:28,480 --> 00:27:32,040 Speaker 8: addresses Congress tomorrow and Wednesday, we may be looking at 463 00:27:32,080 --> 00:27:33,000 Speaker 8: a second cut. 464 00:27:34,040 --> 00:27:37,400 Speaker 5: So you're looking for a correction, and I wonder whether 465 00:27:37,440 --> 00:27:40,720 Speaker 5: or not you know, during that correction you might see 466 00:27:41,160 --> 00:27:43,320 Speaker 5: a little bit of weakness or at least a little 467 00:27:43,320 --> 00:27:46,879 Speaker 5: bit of a warning or a slowdown for Nvidia and 468 00:27:46,920 --> 00:27:49,480 Speaker 5: some of the AI players. And if you got those 469 00:27:49,640 --> 00:27:53,119 Speaker 5: things together, could it go further than say, a roughly 470 00:27:53,200 --> 00:27:54,199 Speaker 5: ten percent correction. 471 00:27:56,320 --> 00:28:01,400 Speaker 8: Certainly, the narrow leadership in the marketplace that that's definitely possible. 472 00:28:01,440 --> 00:28:03,840 Speaker 8: I mean, if we're talking about a technical definition of 473 00:28:03,880 --> 00:28:07,679 Speaker 8: a correction ten percent, it certainly could be bigger. But 474 00:28:07,720 --> 00:28:11,359 Speaker 8: we're talking about Nvidia and certainly Max seven, and if 475 00:28:11,400 --> 00:28:14,000 Speaker 8: you think about it, they're all sort of codependent on 476 00:28:14,000 --> 00:28:17,199 Speaker 8: one another there, I mean, the other max evans that 477 00:28:17,200 --> 00:28:20,320 Speaker 8: are sort of incubating the AI programs that are not 478 00:28:20,440 --> 00:28:25,760 Speaker 8: yet cash positive, they're relying on Nvidia, and Nvidia is 479 00:28:25,800 --> 00:28:28,480 Speaker 8: relying on them. So if there's softness in any one 480 00:28:28,520 --> 00:28:30,720 Speaker 8: of them relating to the AI narrative. 481 00:28:30,720 --> 00:28:34,080 Speaker 1: I think you can see a pretty big action there. 482 00:28:34,760 --> 00:28:37,040 Speaker 8: But I will say that I don't think everything is 483 00:28:37,080 --> 00:28:37,719 Speaker 8: about AI. 484 00:28:38,040 --> 00:28:39,520 Speaker 1: About the big tech companies. 485 00:28:40,200 --> 00:28:42,280 Speaker 8: If you think about it, they do have a lot 486 00:28:42,280 --> 00:28:44,680 Speaker 8: of cash, they do have a lot of earnings, They 487 00:28:44,720 --> 00:28:48,560 Speaker 8: have pretty safe balance sheets, so a lot of capital 488 00:28:48,720 --> 00:28:50,840 Speaker 8: chasing these names. 489 00:28:50,960 --> 00:28:52,160 Speaker 1: I think part of it. 490 00:28:52,000 --> 00:28:55,520 Speaker 8: Is just chasing quality, chasing a better balance sheets. 491 00:28:56,080 --> 00:28:57,600 Speaker 1: Never mind that there is risk of. 492 00:28:57,560 --> 00:29:01,480 Speaker 8: These codependency and certainly the AI hype, so I think 493 00:29:01,520 --> 00:29:04,360 Speaker 8: there's a little bit of a mixed story there. So 494 00:29:04,440 --> 00:29:07,960 Speaker 8: that would be one scenario in which the downside may 495 00:29:08,000 --> 00:29:09,960 Speaker 8: not be as big as we might expect. 496 00:29:10,040 --> 00:29:13,960 Speaker 3: To what degree is there the risk of market volatility 497 00:29:13,960 --> 00:29:16,400 Speaker 3: as the result of the November election. I mean, this 498 00:29:16,520 --> 00:29:18,800 Speaker 3: is kind of stunning what we're dealing with just in 499 00:29:18,840 --> 00:29:21,720 Speaker 3: the news cycle lately, and it's kind of surprising that 500 00:29:21,760 --> 00:29:23,920 Speaker 3: the market is holding up, you know, in a pretty 501 00:29:23,920 --> 00:29:27,040 Speaker 3: stable fashion. Is there some point at which this turns 502 00:29:27,080 --> 00:29:32,440 Speaker 3: into a case of greater volatility. 503 00:29:31,720 --> 00:29:35,400 Speaker 8: Normally, I don't really expect to see the markets react 504 00:29:35,520 --> 00:29:38,800 Speaker 8: to any kind of election uncertainty until the fall, so 505 00:29:39,160 --> 00:29:43,560 Speaker 8: I'm sort of waiting until after Labor Day. Now, if 506 00:29:43,600 --> 00:29:46,240 Speaker 8: we do have a FED cut in September. That might 507 00:29:46,280 --> 00:29:49,200 Speaker 8: be different using and there's a lot of moving parts there. 508 00:29:49,880 --> 00:29:54,320 Speaker 8: But I think that the markets, Treasury markets included, they're 509 00:29:54,480 --> 00:29:57,760 Speaker 8: sort of looking for will will there be a sweep 510 00:29:58,160 --> 00:30:01,800 Speaker 8: by one party? It's not just the Biden versus any 511 00:30:01,800 --> 00:30:04,000 Speaker 8: other candidate. We still have a little bit of time 512 00:30:04,040 --> 00:30:07,680 Speaker 8: for that. I think we have at least a month, right, 513 00:30:08,920 --> 00:30:13,320 Speaker 8: But if we have, if the voters lose such confidence 514 00:30:13,400 --> 00:30:16,120 Speaker 8: that there is a one party suite, let's say a 515 00:30:16,120 --> 00:30:17,160 Speaker 8: Republican Party suite. 516 00:30:17,160 --> 00:30:19,160 Speaker 1: It's not so much about the Republican. 517 00:30:18,640 --> 00:30:22,200 Speaker 8: Party, but it's that one party can actually pass something 518 00:30:22,280 --> 00:30:26,640 Speaker 8: that could be detrimental to the current crisis in the 519 00:30:26,680 --> 00:30:29,600 Speaker 8: deficit profile and the debt profile of the United States. 520 00:30:29,680 --> 00:30:30,240 Speaker 1: And I think the. 521 00:30:30,200 --> 00:30:33,320 Speaker 8: Markets will react to a one party suite rather than 522 00:30:33,400 --> 00:30:34,440 Speaker 8: who becomes president. 523 00:30:35,600 --> 00:30:38,840 Speaker 5: And this program is about Asia, and we often talk 524 00:30:38,920 --> 00:30:41,640 Speaker 5: about the sort of intersection with the clothes on Wall 525 00:30:41,680 --> 00:30:44,160 Speaker 5: Street and the opening of markets here, and then we 526 00:30:44,160 --> 00:30:47,239 Speaker 5: phase into you know, more distinct coverage of Asia. We 527 00:30:47,280 --> 00:30:49,479 Speaker 5: do have some big things coming up. We've got the 528 00:30:49,520 --> 00:30:53,120 Speaker 5: Third planum in China, and also we're looking at a 529 00:30:53,160 --> 00:30:56,560 Speaker 5: situation in Japan where you know, you're also facing some change. 530 00:30:56,720 --> 00:30:59,120 Speaker 5: Do either of those markets interest you at this juncture? 531 00:31:00,960 --> 00:31:04,240 Speaker 1: You know, we have been a bit dubvish on China. 532 00:31:04,320 --> 00:31:07,720 Speaker 8: Dubbish not in the Fed sense, but softer on China 533 00:31:07,800 --> 00:31:11,280 Speaker 8: in terms of outlook, and we have been underweight, and 534 00:31:11,320 --> 00:31:13,320 Speaker 8: a huge part of it is that I don't think 535 00:31:13,360 --> 00:31:17,560 Speaker 8: the real estate of debacle maybe not, that's not the 536 00:31:17,600 --> 00:31:18,640 Speaker 8: best choice of words. 537 00:31:19,480 --> 00:31:22,280 Speaker 1: Is over and we do, we do. 538 00:31:22,480 --> 00:31:27,480 Speaker 8: We are afraid of some of the intervention by the government, 539 00:31:27,680 --> 00:31:30,080 Speaker 8: and so we're a little bit softer on China. On Japan, 540 00:31:30,200 --> 00:31:34,080 Speaker 8: we have been relatively bullish. The only issue is the currency, 541 00:31:34,440 --> 00:31:36,520 Speaker 8: right the weakness and currency tells us something. 542 00:31:36,720 --> 00:31:38,920 Speaker 5: Yeah, all right, NNA, thank you for joining us, Anna 543 00:31:39,000 --> 00:31:42,640 Speaker 5: Rathba and Cio at CBIZ Investment Advisory Services. 544 00:31:44,520 --> 00:31:47,479 Speaker 3: This has been the Bloomberg Daybreak Asia podcast, bringing you 545 00:31:47,520 --> 00:31:50,640 Speaker 3: the stories making news and moving markets in the Asia Pacific. 546 00:31:51,120 --> 00:31:54,280 Speaker 3: Visit the Bloomberg Podcast channel on YouTube to get more 547 00:31:54,280 --> 00:31:57,920 Speaker 3: episodes of this and other shows from Bloomberg. Subscribe to 548 00:31:57,920 --> 00:32:01,720 Speaker 3: the podcast on Apple, Spotify, or anywhere else you listen, 549 00:32:01,800 --> 00:32:04,920 Speaker 3: and always on Bloomberg Radio, the Bloomberg Terminal, and the 550 00:32:04,920 --> 00:32:06,000 Speaker 3: Bloomberg Business App.