WEBVTT - Apple Will Add 20,000 US Jobs Amid Threat from Trump Tariffs 0:00:02.720 --> 0:00:10.560 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.560 --> 0:00:14.560 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.600 --> 0:00:17.840 Eastern on Apple, Cocklay and Android Auto with the Bloomberg 0:00:17.880 --> 0:00:21.040 Business App. Listen on demand wherever you get your podcasts, 0:00:21.320 --> 0:00:23.080 or watch us live on YouTube. 0:00:23.720 --> 0:00:26.439 Here's a really special treat. Sitting next to me in 0:00:26.520 --> 0:00:30.440 studio in New York, Mark German, Bloomberg Chief correspondent on 0:00:30.600 --> 0:00:33.760 Global Technology. I worked here for thirteen years, and I 0:00:33.800 --> 0:00:36.440 don't think I've ever seen you in person. You're usually 0:00:36.440 --> 0:00:38.160 on the West Coast, but like you're real. 0:00:38.280 --> 0:00:40.520 He's forty here last week as well, So I don't 0:00:40.560 --> 0:00:41.559 know what's happening. 0:00:42.240 --> 0:00:43.640 My goodness, I was off last week. 0:00:44.040 --> 0:00:46.400 Okay, So obviously we're talking about this news that Apple 0:00:46.479 --> 0:00:49.239 is going to add about twenty thousand US jobs. To 0:00:49.320 --> 0:00:52.960 your understanding, how did this come about from Apple? 0:00:53.320 --> 0:00:59.920 Okay, So during the first Trump administration, Tim Cook other companies, 0:01:00.000 --> 0:01:02.400 we're obviously very worried about tariffs, right, and so their 0:01:02.440 --> 0:01:05.440 strategy was we can try to make a deal here. 0:01:05.680 --> 0:01:10.280 What does Trump want? Trump wants his supporters to know 0:01:10.640 --> 0:01:14.199 or see that he's bringing jobs back to the US, 0:01:14.400 --> 0:01:17.520 bringing money back to the US, bringing manufacturing back to 0:01:17.520 --> 0:01:21.560 the US. Apple doesn't want tariffs on the phone, and 0:01:21.600 --> 0:01:23.839 it wants to keep as much phone manufacturing in China 0:01:23.840 --> 0:01:26.039 as possible. We don't have to get into the reasons 0:01:26.040 --> 0:01:29.319 why there's a ton of them. Okay, So you have 0:01:29.360 --> 0:01:32.080 these two sides, right, there is a universe in which 0:01:32.120 --> 0:01:34.160 both parties can get exactly what they want. 0:01:34.360 --> 0:01:35.520 It's like a trade. 0:01:35.480 --> 0:01:40.759 Right, And so you saw that strategy in full form 0:01:41.120 --> 0:01:46.400 this morning. Trump for months, obviously the Secondministration, has been 0:01:46.400 --> 0:01:49.600 talking again about bringing back jobs, has been talking again 0:01:50.280 --> 0:01:53.320 about moving things to the US, has been talking again 0:01:53.360 --> 0:01:57.120 about extra tariffs some goods from China. So Apple comes 0:01:57.160 --> 0:02:00.160 out with the press release this morning. We're investing five 0:02:00.240 --> 0:02:03.280 hundred billion dollars in the US over the next four years, which, 0:02:03.320 --> 0:02:07.680 by the way, that's Trump's term, right, he just started. Okay, 0:02:08.360 --> 0:02:13.200 twenty thousand new jobs AI server manufacturing, Fox con in Houston, 0:02:14.080 --> 0:02:17.120 doubling our manufacturing fund from five billion to ten billion, 0:02:18.000 --> 0:02:21.080 setting up a manufacturing academy like a school in Detroit. 0:02:22.080 --> 0:02:25.200 So you ask yourself, what's really going on here. They 0:02:25.280 --> 0:02:29.000 want Trump to know that they're investing heavily in the US. 0:02:30.400 --> 0:02:32.840 And since we're doing that. We don't want tariffs, and 0:02:32.880 --> 0:02:35.000 so the spin to Trump is that we're doing this 0:02:35.240 --> 0:02:39.200 because of you. The reality is somewhere in the middle. 0:02:39.919 --> 0:02:42.080 The reality is that Apple has been investing as part 0:02:42.120 --> 0:02:45.040 of its business operations in the US from the very beginning. 0:02:45.880 --> 0:02:49.120 The reality is in twenty twenty one, Apple announced the 0:02:49.120 --> 0:02:52.440 four hundred and thirty billion dollar investment in the US. 0:02:53.280 --> 0:02:56.280 The reality is that Apple hires four thousand R and 0:02:56.360 --> 0:03:00.600 D employees a year in the US. Anyways, what's actually 0:03:00.639 --> 0:03:04.000 new here? To be fair to both Trump and Apple, 0:03:04.560 --> 0:03:07.520 there is a bit of an acceleration. So their typical 0:03:07.560 --> 0:03:12.079 spend on the twenty twenty one US investment plan eighty 0:03:12.120 --> 0:03:18.480 six billion dollars annually. Okay, the new plan one hundred 0:03:18.480 --> 0:03:21.200 and twenty five billion dollars a year annually. So you're 0:03:21.200 --> 0:03:26.720 getting a forty billion dollar Trump under Trump, and you're 0:03:26.760 --> 0:03:29.400 moving from four thousand people on the R and D 0:03:29.440 --> 0:03:34.200 side hired annually to five thousand people. So incremental, sure, 0:03:34.800 --> 0:03:36.000 but definitely an acceleration. 0:03:37.040 --> 0:03:40.480 Okay, one minute, is there a quid pro quote here? 0:03:40.640 --> 0:03:43.120 Do you think Apple actually already has a deal with 0:03:43.160 --> 0:03:45.560 President Trump that they will be exempt from tariffs? 0:03:45.920 --> 0:03:46.960 No, okay, But. 0:03:46.920 --> 0:03:50.920 Tim Cook went to Donald Trump's office last week and 0:03:50.960 --> 0:03:53.640 presented this to him, said, we're going to do this 0:03:53.680 --> 0:03:56.800 because of you, man. Oh and by the way, we 0:03:56.840 --> 0:04:00.800 don't want to pay tariffs. And Trump knows that Trump 0:04:00.840 --> 0:04:06.320 doesn't care about giving Apple or a Prieve on teriff. 0:04:06.360 --> 0:04:08.520 He's happy to do it. And he's happy to do 0:04:08.560 --> 0:04:10.200 it and tell people that he did it. Because Tim 0:04:10.200 --> 0:04:14.040 Cook is investing half a trillion dollars during his presidency. 0:04:14.440 --> 0:04:16.560 He can go back to his supporters, his base, he 0:04:16.560 --> 0:04:18.760 can go back to Congress, he can go back to 0:04:18.760 --> 0:04:21.279 the world and tell them that the world's biggest technology company, 0:04:21.320 --> 0:04:23.960 the most famous company in the world, is investing half 0:04:23.960 --> 0:04:27.839 a trillion dollars. It's biggest investment commitment ever, right because 0:04:27.880 --> 0:04:31.599 of me and for Trump, that's awesome. Yep. And for 0:04:31.640 --> 0:04:34.039 Tim Cook, not having to pay tariffs is awesome. And 0:04:34.160 --> 0:04:36.919 I think that's good enough to get some sort of 0:04:36.960 --> 0:04:39.280 tariff for prieve. And by the way, let's say Trump 0:04:39.360 --> 0:04:43.000 doesn't give them a tiff for prieve. Who cares? Right, 0:04:43.400 --> 0:04:45.080 I was doing this anyways, if I'm Tim. 0:04:44.920 --> 0:04:50.080 Cook, you're listening to the Bloomberg Intelligence podcast. Catch us 0:04:50.160 --> 0:04:53.200 live weekdays at ten Am Eastern on Apple Cocklay and 0:04:53.200 --> 0:04:56.480 Android Auto with the Bloomberg Business App. Listen on demand 0:04:56.520 --> 0:04:59.960 wherever you get your podcasts, or watch us live on YouTube. 0:05:00.839 --> 0:05:03.760 Alex Steel here alongside Paul Sweeney. This is Bloomberg Intelligence 0:05:03.880 --> 0:05:07.080 Radio Happening right now in Hollywood, Florida. Is the BEMO 0:05:07.200 --> 0:05:09.719 Metals Conference and Metals and Mining Conference. I used to 0:05:09.760 --> 0:05:11.440 go back in my day when I was covering gold. 0:05:11.480 --> 0:05:13.599 It's really cool you get to talk about metals, and 0:05:13.600 --> 0:05:16.279 we're lucky enough to talk now to Kathleen Quirk, President 0:05:16.320 --> 0:05:19.680 and CEO of Freeport Macmaar and Copper and Gold. Kathleen, 0:05:20.000 --> 0:05:22.520 it's a sincere pleasure. If I take a look at 0:05:22.560 --> 0:05:25.320 your stock versus the copper price, you usually track each 0:05:25.320 --> 0:05:27.560 other in the last couple of months. That hasn't been 0:05:27.560 --> 0:05:30.520 the case. Is that a demand issue? Is that a 0:05:30.560 --> 0:05:32.440 supply issue? How do you explain that. 0:05:34.000 --> 0:05:36.040 Alex is good to be with you and you need 0:05:36.080 --> 0:05:37.200 to come back to Hollywood. 0:05:37.240 --> 0:05:38.400 This is a great conference. 0:05:39.520 --> 0:05:43.480 In terms of the stock price and the copper price, 0:05:43.600 --> 0:05:48.599 we've seen somewhat of a disconnect in recent weeks. I 0:05:48.600 --> 0:05:51.839 think there's some concern in the market about China and 0:05:51.960 --> 0:05:55.440 about the trajectory of copper prices as we go forward. 0:05:55.520 --> 0:05:59.000 So there's some risks that people are discounting the current 0:05:59.320 --> 0:06:02.760 copper price, but as we look at the situation and 0:06:02.880 --> 0:06:07.520 look at copper demand going forward, Copper, as you know, 0:06:07.720 --> 0:06:11.320 is the metal when it comes to electrification, and we're 0:06:11.360 --> 0:06:15.000 looking ahead at all of the build out that needs 0:06:15.000 --> 0:06:18.200 to take place and energy infrastructure, not just in the 0:06:18.320 --> 0:06:21.440 US but around the globe. China has already been doing it, 0:06:21.880 --> 0:06:25.080 but we're starting to see it taking place in the 0:06:25.200 --> 0:06:29.880 US and other places. It's very copper intensive, and we 0:06:29.960 --> 0:06:33.400 see a situation where demand for copper is going to 0:06:33.400 --> 0:06:39.480 be faced with a secular uplift of opportunity for growth 0:06:39.480 --> 0:06:44.200 and copper unrelated to cyclical drivers. So we're actually we're 0:06:44.200 --> 0:06:48.040 actually really bullish about where copper is today and what 0:06:48.120 --> 0:06:50.320 the likelihood for increases are for the future. 0:06:50.800 --> 0:06:54.480 Kathleen, I think so far every S and P five 0:06:54.560 --> 0:06:58.159 hundred CEO on their conference call has been asked about 0:06:58.200 --> 0:07:02.200 tariffs and the impact on their business. What will a 0:07:02.360 --> 0:07:06.159 rising tariff regime potentially mean for your business. 0:07:07.040 --> 0:07:11.280 We're following it very closely. We're looking at it trying 0:07:11.320 --> 0:07:15.200 to understand exactly what degree of terraff will be imposed. 0:07:15.240 --> 0:07:18.880 No one exactly knows what it will be, although companies 0:07:18.920 --> 0:07:23.840 are preparing for it. Freeport operates all over the world, 0:07:24.280 --> 0:07:28.320 but we have a significant operation, significant presence in the US, 0:07:29.160 --> 0:07:32.800 and actually we're integrated in the US. We not only 0:07:32.840 --> 0:07:36.560 have minds that produce copper, but we also have a 0:07:36.600 --> 0:07:41.840 smelter that processes our copper. So we don't have a 0:07:41.920 --> 0:07:46.120 need as a company to import copper from other countries. 0:07:46.240 --> 0:07:50.200 Copper is imported into the US because there's not enough 0:07:50.240 --> 0:07:54.200 current current supply of copper to meet the demand. But 0:07:55.560 --> 0:07:58.560 from a micro standpoint, as we look at what the 0:07:58.600 --> 0:08:03.160 market is pricing in for the impact of tariffs, actually 0:08:03.200 --> 0:08:05.920 the US price of copper, when you look at where 0:08:06.120 --> 0:08:10.480 US commodity prices are today and copper prices are today, 0:08:11.120 --> 0:08:14.080 the US price is something on the order of twenty 0:08:14.120 --> 0:08:19.120 five cents per pound higher than copper that's priced on 0:08:19.200 --> 0:08:25.880 international markets. So actually, for Freeport, we're actually receiving for 0:08:25.960 --> 0:08:29.000 the copper that we sell in the US, we're actually 0:08:29.040 --> 0:08:32.720 receiving a premium to copper that we sell out of 0:08:32.800 --> 0:08:36.160 say South America or out of Indonesia. So it's actually 0:08:36.559 --> 0:08:39.960 right now in the short term a benefit for Freeport 0:08:40.040 --> 0:08:44.920 several hundred million dollars a year potentially. But the thing 0:08:45.000 --> 0:08:47.360 that we're watching, and the thing as we've talked to 0:08:47.440 --> 0:08:52.920 investors and other business leaders, is the impact the potential 0:08:53.000 --> 0:08:58.200 impact of tariffs on global growth. China is a big 0:08:58.240 --> 0:09:03.720 consumer of copper consumes, likely above fifty percent five zero 0:09:03.760 --> 0:09:07.720 percent of the market, and so an all our trade 0:09:07.760 --> 0:09:14.439 war could impact global growth. It could impact copper prices, 0:09:15.240 --> 0:09:18.680 it could impact you know, say manifest it self through 0:09:18.679 --> 0:09:23.079 a strong dollar, which also impacts commodity prices. 0:09:23.160 --> 0:09:26.480 So we're watching those macro issues. 0:09:26.920 --> 0:09:29.880 But in terms of the on the ground today we 0:09:29.960 --> 0:09:32.800 are getting a premium for the copper that we sell 0:09:32.880 --> 0:09:33.560 in the US. 0:09:33.880 --> 0:09:35.559 We have about thirty seconds and then you have to 0:09:35.600 --> 0:09:38.600 run to an investor meeting. So in twenty seconds, what 0:09:38.679 --> 0:09:40.000 do you think the copper price is going. 0:09:39.960 --> 0:09:40.800 To do this year? 0:09:40.800 --> 0:09:42.400 If we take a look at the lme are we 0:09:42.480 --> 0:09:45.319 looking at ten twelve thousand? 0:09:46.800 --> 0:09:48.160 You know, it's very difficult. 0:09:48.200 --> 0:09:50.839 We're not in the business of predicting short term prices, 0:09:50.840 --> 0:09:52.120 alex as. 0:09:52.000 --> 0:09:52.640 You probably know. 0:09:52.679 --> 0:09:55.520 We're in the business to control our costs, to invest 0:09:55.559 --> 0:09:59.280 wisely and prudently. We have a very positive long term 0:09:59.280 --> 0:10:03.240 outlook for comp upper. It just you can't replace copper 0:10:03.280 --> 0:10:07.000 today for four hours a pound. We need higher prices 0:10:07.040 --> 0:10:11.000 in the future in order to invest in the business 0:10:11.080 --> 0:10:14.720 and generate the growth and demand, growth and supply to 0:10:14.760 --> 0:10:18.640 meet the expected growth in demand. So we're very positive 0:10:18.640 --> 0:10:21.800 on the long term, but the short term is difficult 0:10:21.880 --> 0:10:23.120 to assess. 0:10:23.600 --> 0:10:25.600 All right, Kathleen, we appreciate it. Please come back when 0:10:25.600 --> 0:10:27.040 we all have more time. We'd love to break down 0:10:27.040 --> 0:10:29.080 some more stuff with you. Kathleen Quirk as President and 0:10:29.160 --> 0:10:32.280 CEO of Freeport Macarin, Copper and Gold. 0:10:34.080 --> 0:10:37.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:10:37.840 --> 0:10:41.200 weekdays at ten am Eastern on Applecarplay and Android Otto 0:10:41.320 --> 0:10:44.400 with the Bloomberg Business App. Listen on demand wherever you 0:10:44.440 --> 0:10:47.440 get your podcasts, or watch us live on YouTube. 0:10:48.200 --> 0:10:51.680 Alex deal here alongside Paul Sweeney. This is Bloomberg Intelligence Radio. 0:10:51.720 --> 0:10:53.880 We bring you all the top news in business, economics 0:10:53.920 --> 0:10:56.240 and finance through our lens of our Bloomberg Intelligence folks. 0:10:56.240 --> 0:10:58.640 They cover two thousand companies and one hundred and thirty 0:10:58.640 --> 0:11:02.160 industries world. We go now for a broader view. Victoria 0:11:02.200 --> 0:11:05.760 Fernandez is chief market strategistic Crossroad to global investments, and 0:11:05.840 --> 0:11:09.200 she joins us now from Houston, Victoria. By the dip 0:11:09.480 --> 0:11:12.040 has been the norm, then there's been chattering that by 0:11:12.080 --> 0:11:14.480 the dip won't last and that we're on borrowed time 0:11:14.520 --> 0:11:16.160 for that. Where do you stand on that? 0:11:17.600 --> 0:11:19.800 Yeah, I think it depends alex on the size of 0:11:19.800 --> 0:11:22.600 the dip that we're looking at. When we have small 0:11:22.600 --> 0:11:26.520 pullbacks that happen just in regular volatility due to the 0:11:26.840 --> 0:11:30.120 uncertainty around whether it's going to be fed policy or 0:11:30.160 --> 0:11:33.480 whether it's fiscal policy, and those are going to be 0:11:33.520 --> 0:11:35.360 things where I'm not sure you want to jump in 0:11:35.640 --> 0:11:37.240 and start buying a lot of names. 0:11:37.440 --> 0:11:39.079 But I do think that as we. 0:11:39.120 --> 0:11:41.559 Go through the first half of this year, we probably 0:11:41.640 --> 0:11:44.320 will have a chance as there will be a more 0:11:44.360 --> 0:11:47.360 significant pullback. I'm not saying we're going into recession by 0:11:47.360 --> 0:11:49.720 any means, but I do think you're going to see 0:11:49.720 --> 0:11:53.439 things start to pull back, probably led by maybe weaker earnings. 0:11:53.520 --> 0:11:56.000 As we get the first quarter earnings of this year, 0:11:56.360 --> 0:11:59.120 we see those slow down, We see the labor market. 0:11:58.840 --> 0:12:01.280 Slow down, consumer spending slow down. 0:12:01.760 --> 0:12:03.800 That I think then is going to be your opportunity 0:12:03.840 --> 0:12:07.360 to go in and find those areas within the market 0:12:07.480 --> 0:12:11.480 where you have seen sectors start to struggle and maybe 0:12:11.520 --> 0:12:14.439 form a trough and on their way back to have 0:12:14.720 --> 0:12:17.720 up upside trends. That's where you'll want to go in 0:12:17.760 --> 0:12:18.440 and start buying. 0:12:18.840 --> 0:12:21.280 So, Victoria, you mentioned earnings were about little more than 0:12:21.280 --> 0:12:24.760 eighty percent of the way through the fourth quarter earnings there. 0:12:24.800 --> 0:12:27.320 What are your takeaways from those earnings and maybe from 0:12:27.320 --> 0:12:27.880 the guidance. 0:12:29.600 --> 0:12:33.400 Yeah, so you know, Paul, surprisingly, earnings have been really 0:12:33.440 --> 0:12:35.839 good for the fourth quarter. I mean we're looking at 0:12:35.840 --> 0:12:40.200 what fifteen percent earnings growth, five percent revenue growth. I 0:12:40.240 --> 0:12:43.800 think energy is really the only sector where we have 0:12:43.920 --> 0:12:48.439 seen negative growth as as a whole for the. 0:12:48.440 --> 0:12:50.760 Sector, So really strong there. 0:12:51.000 --> 0:12:53.080 And I thought we would have start to seen some 0:12:53.160 --> 0:12:56.600 of the effects of the higher rates that we had 0:12:56.640 --> 0:12:58.960 throughout twenty twenty four. I thought we would see some 0:12:59.000 --> 0:13:02.600 of the effects of the labor market weakenings start there. 0:13:02.640 --> 0:13:05.959 But maybe it's getting pushed in to the first quarter 0:13:06.000 --> 0:13:10.120 earnings as tariff concerns pulled forward a lot of elements 0:13:10.160 --> 0:13:14.439 into the fourth quarter of twenty twenty four. So strong earnings, 0:13:14.480 --> 0:13:17.160 and I think that's why you saw probably the S 0:13:17.200 --> 0:13:20.360 and P hit a high last week because that animal 0:13:20.520 --> 0:13:24.960 spirit is still running due to the earnings and that 0:13:25.080 --> 0:13:27.760 support to the economy, but that's probably going to start 0:13:27.760 --> 0:13:29.720 fading away. We saw it at the end of last week. 0:13:29.720 --> 0:13:32.000 I think we'll see some more of that over the 0:13:32.040 --> 0:13:32.720 coming weeks. 0:13:32.960 --> 0:13:35.439 Yeah, and speaking of this is from Bloomberg Intelligence, just 0:13:35.440 --> 0:13:38.800 talking about earnings. Apparently companies that guided high on profit 0:13:38.920 --> 0:13:41.240 and sales have outperformed the S and P by six 0:13:41.280 --> 0:13:44.080 point seven percent within a day of posting results, the 0:13:44.160 --> 0:13:47.160 most since twenty twenty. I found that to be really interesting. 0:13:47.200 --> 0:13:52.000 I had noticed the dispariting effect there, So victoria though 0:13:52.160 --> 0:13:55.520 despite earnings, we have seen rotation into European equities. Do 0:13:55.600 --> 0:13:58.200 we think that that actually continues or the US exceptionalism 0:13:58.280 --> 0:13:59.520 theme rains. 0:14:01.040 --> 0:14:03.160 Yeah, I'm not surprised that we've seen this switch. 0:14:03.200 --> 0:14:06.240 I mean, I know all morning long, we've had the 0:14:06.240 --> 0:14:09.400 conversation around valuation, right, and if it's still something that 0:14:09.440 --> 0:14:12.640 people are looking at, clients aren't asking about it. You've 0:14:12.679 --> 0:14:15.800 talked with Bob Dall, my CEO Mike Wilson earlier this 0:14:15.840 --> 0:14:19.400 morning talking about that. But valuations in Europe are much 0:14:19.440 --> 0:14:21.360 lower than what we're seeing in the markets here. So 0:14:21.400 --> 0:14:23.960 I think as investors say, where can I get maybe 0:14:24.000 --> 0:14:26.360 a bigger bang for my buck, and you're looking at 0:14:26.360 --> 0:14:30.800 that valuation number makes sense, especially in the financials. Financials 0:14:30.800 --> 0:14:34.359 are doing well globally, so it gives you an opportunity 0:14:34.440 --> 0:14:36.360 to get in there. And you also have to start 0:14:36.400 --> 0:14:40.440 thinking from an FX perspective what that's going. 0:14:40.440 --> 0:14:40.840 To look like. 0:14:40.880 --> 0:14:44.560 Are you going to see continued rate cuts from the 0:14:44.600 --> 0:14:47.720 ECB and what does that mean for the euro and 0:14:47.800 --> 0:14:50.240 what kind of carry trade we're looking there? Obviously the 0:14:50.320 --> 0:14:53.080 yen carry trade people are starting to watch once again. 0:14:53.320 --> 0:14:55.680 So I think there's a lot of different factors, but 0:14:55.760 --> 0:14:57.680 it wouldn't hurt to kind of dip your toe a 0:14:57.760 --> 0:15:03.560 little bit internationally though, I still think globally you'll see 0:15:03.560 --> 0:15:05.280 the US over time. 0:15:05.160 --> 0:15:07.480 Continue to be the strongest economy. 0:15:08.000 --> 0:15:10.480 Yeah, I'm glad you you brought up international investing. Is 0:15:10.520 --> 0:15:12.280 I'm just looking at an email I got from Torston 0:15:12.360 --> 0:15:16.560 Slocket from Apollo this morning talking about the market capitalization 0:15:16.600 --> 0:15:20.680 with how the gap between the US and the rest 0:15:20.720 --> 0:15:24.000 of the developed world is widening, so that concentration in 0:15:24.120 --> 0:15:26.720 the US equity markets rerolled through the rest of the 0:15:26.760 --> 0:15:29.560 world is just getting more and more. To what extent 0:15:29.600 --> 0:15:30.360 is that a concern. 0:15:31.960 --> 0:15:35.160 Well, concentration is always a concern for US, Paul, because 0:15:35.200 --> 0:15:37.760 you don't want to, you know, to use the old phrase, 0:15:37.800 --> 0:15:39.720 you don't want to put all your eggs in one basket. 0:15:40.040 --> 0:15:42.160 What we're starting to see in the US is some 0:15:42.200 --> 0:15:45.440 of those elements where all that concentration was those Max 0:15:45.560 --> 0:15:48.840 seven names. You're starting to see pullbacks in those names, 0:15:49.080 --> 0:15:51.960 and hopefully we will see things broaden out. 0:15:52.120 --> 0:15:54.320 But it really hasn't been as strong as a lot 0:15:54.360 --> 0:15:56.280 of people thought it would be. 0:15:56.440 --> 0:15:59.160 When you're looking at the other four hundred and ninety three, 0:15:59.240 --> 0:16:02.280 I mean, you look the SMP making it's high last week, 0:16:02.320 --> 0:16:04.840 but the advanced decline line for the New York Stock 0:16:04.880 --> 0:16:05.840 Exchange did. 0:16:05.600 --> 0:16:08.520 Not meet it and go to a highlight. 0:16:08.280 --> 0:16:11.960 That we're still only seeing about fifty three percent of 0:16:11.960 --> 0:16:16.280 the SMP above it's fifty day moving average, So we're 0:16:16.320 --> 0:16:19.000 not seeing that broadening out that we like to see 0:16:19.040 --> 0:16:21.360 for a sustainable move higher in the markets. 0:16:21.520 --> 0:16:23.160 Will continue to watch that. 0:16:23.360 --> 0:16:26.480 But we really want to see that concentration start to 0:16:26.520 --> 0:16:30.320 diminish a little bit and have more of a widespread 0:16:30.480 --> 0:16:31.840 uptrend in these names. 0:16:32.120 --> 0:16:35.120 Does any of that include say, small and midcaps. 0:16:35.920 --> 0:16:38.560 Well, we would hope so right small and midcaps is 0:16:38.600 --> 0:16:41.280 really kind of what will tell us, Yes, we have 0:16:41.400 --> 0:16:45.360 found our footing, we're feeling better, we like what's going on. 0:16:45.760 --> 0:16:50.000 But look, we've seen yields move lower even though inflation 0:16:50.160 --> 0:16:54.600 expectations have moved higher. So to me, that's saying, okay, wait, 0:16:54.960 --> 0:16:58.200 these are growth concerns that we have right now. If 0:16:58.400 --> 0:17:02.320 growth and the concern over a lack of growth is 0:17:02.360 --> 0:17:05.680 what's pulling yields down, that's not going to be great 0:17:05.760 --> 0:17:08.000 for small and midcaps. And we also have to look 0:17:08.040 --> 0:17:10.240 at the fact that you know, we're hanging in around 0:17:10.240 --> 0:17:12.800 that four forty four to fifty level on the US tenure. 0:17:13.040 --> 0:17:15.960 We've got about a third of all corporate debt in 0:17:16.000 --> 0:17:18.880 the US small, mid and large cap coming due over 0:17:18.920 --> 0:17:21.560 the next five years. That's going to be a concern 0:17:21.600 --> 0:17:24.320 for those small and midcaps when it comes to refinancing. 0:17:24.440 --> 0:17:26.800 So we'll have to see what happens there. But for 0:17:26.920 --> 0:17:29.320 right now, I think we continue to wait on some 0:17:29.400 --> 0:17:32.240 of those small cap names until they get some better 0:17:32.280 --> 0:17:35.200 footing and we see the economy on its way back up. 0:17:35.600 --> 0:17:38.640 Victoria thirty seconds. What's the fixed income call here? 0:17:40.280 --> 0:17:42.960 Well, look, we've been doing Barbell strategies in our fixed 0:17:43.000 --> 0:17:46.119 income portfolio. Is really wanting to capture some of the 0:17:46.200 --> 0:17:48.439 higher yields on the shorter end. As we think the 0:17:48.480 --> 0:17:51.479 Fed stays higher longer, that keeps those short rates higher, 0:17:51.720 --> 0:17:54.720 and we have seen inflation push the longer end up 0:17:54.760 --> 0:17:56.680 as well, although over the last. 0:17:56.520 --> 0:17:58.040 Couple weeks there's been a flattening. 0:17:58.280 --> 0:18:00.359 So I think maybe lock in a little bit of 0:18:00.400 --> 0:18:02.760 these rates on the longer end, take advantage of the 0:18:02.800 --> 0:18:05.200 short end, and we'll let the belly of the curve 0:18:05.280 --> 0:18:07.320 adjust to the volatility that we've seen. 0:18:07.840 --> 0:18:09.879 Victoria, thank you so much for joining us. Always appreciate 0:18:09.960 --> 0:18:13.040 getting a few minutes of your time. Victoria Frenendez, chief 0:18:13.119 --> 0:18:16.760 market strategist for cross Mark, a global investment She's based 0:18:16.800 --> 0:18:19.280 down there in Houston, Texas. 0:18:21.040 --> 0:18:24.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:18:24.840 --> 0:18:28.200 weekdays at ten am Eastern on Applecarplay and Android Auto 0:18:28.320 --> 0:18:31.399 with the Bloomberg Business app. Listen on demand wherever you 0:18:31.440 --> 0:18:34.400 get your podcasts, or watch us live on YouTube. 0:18:35.200 --> 0:18:38.560 Musk Federal work or Order divides Trump Administration. Elon Musk 0:18:38.600 --> 0:18:41.560 demanded that over two million federal employees submit five bullet 0:18:41.600 --> 0:18:44.520 points accounting for the past week, but he's getting some 0:18:44.560 --> 0:18:49.359 pushback from some of the folks that lead these departments, 0:18:49.480 --> 0:18:52.760 like the FBI, like the Secretary of Defense. Let's check 0:18:52.760 --> 0:18:54.520 in with Max Chaffckin. He covers all this stuff. He 0:18:54.560 --> 0:18:58.280 does all the Elon Musk stuff for Bloomberg News. Is 0:18:58.320 --> 0:19:02.840 this kind of the first cracks I'm actually from Elon 0:19:02.960 --> 0:19:04.879 Musk with his and his heavy handed dog, I'd. 0:19:04.760 --> 0:19:07.480 Say it's the most significant cracks that we've seen. You know, 0:19:07.520 --> 0:19:11.440 we've seen like little maybe micro fissures or something before. 0:19:11.840 --> 0:19:14.720 But in terms of you have Musk over the weekend 0:19:15.680 --> 0:19:18.960 for sending this email out or having this email sent 0:19:19.000 --> 0:19:21.919 be sent out, and then tweeting essentially NonStop about how 0:19:22.000 --> 0:19:24.440 important it is, how easy it is, how anyone who 0:19:24.480 --> 0:19:28.400 doesn't respond, you know, doesn't deserve their job. Meanwhile, as 0:19:28.400 --> 0:19:31.879 you said, important parts of the federal government either saying 0:19:31.920 --> 0:19:35.359 publicly or semi publicly, like in an all staff memo, 0:19:35.680 --> 0:19:38.320 that they should not respond to these emails. That is 0:19:38.640 --> 0:19:43.119 significant and that I think you really see first of all, 0:19:43.320 --> 0:19:45.679 the extent to which you know there are probably going 0:19:45.760 --> 0:19:47.720 to be limits to what Elon Musk can do no 0:19:47.800 --> 0:19:52.040 matter what Donald Trump says. And also, as you see 0:19:52.359 --> 0:19:56.399 these sort of stronger personalities, people like Cash Bettel, the 0:19:56.400 --> 0:20:00.280 new director of the FBI, get into their positions. They 0:20:00.320 --> 0:20:02.760 are also going to be power centers, and they are 0:20:02.800 --> 0:20:06.200 going to potentially push back or even challenge Elon Musk 0:20:06.240 --> 0:20:06.600 oft times. 0:20:06.840 --> 0:20:09.720 We wouldn't it all just take President Trump to call 0:20:09.840 --> 0:20:12.639 up the naysayers and be like, no, what Elon says goes. 0:20:13.080 --> 0:20:13.320 Yeah. 0:20:13.400 --> 0:20:16.639 It's not totally clear what Trump wants here, although Trump 0:20:16.680 --> 0:20:19.840 did did do a truth social message essentially saying I 0:20:19.880 --> 0:20:22.680 want Elon Musk to be even more aggressive exactly, and 0:20:23.000 --> 0:20:26.439 Musk has taken that as permission, but Trump has not 0:20:26.720 --> 0:20:30.680 explicitly endorsed this. Uh. My sense is anyway, that that 0:20:30.720 --> 0:20:36.159 Trump wants Elon to be the bulldog here, right, and and. 0:20:36.080 --> 0:20:38.919 Perhaps also take the heat at the same time exactly. 0:20:39.040 --> 0:20:42.120 Maybe maybe you know, move the Overton window or whatever, 0:20:42.240 --> 0:20:46.120 make some of make some of these more extreme uh measures, 0:20:46.240 --> 0:20:49.959 extreme reforms, uh you know, attacks on the quote unquote 0:20:49.960 --> 0:20:54.400 administrative state, as conservatives call it, more palatable, more politically palatable. 0:20:54.440 --> 0:20:58.359 While while as he said, Alex not attracting the heat himself, 0:20:58.400 --> 0:21:02.360 allowing Musk uh and also his cabinet appointees to sort 0:21:02.359 --> 0:21:04.120 of fight it out even in public. Max. 0:21:04.160 --> 0:21:06.600 In addition to being a Bloomberg BusinessWeek senior reporter, you're 0:21:06.640 --> 0:21:10.280 also the co host of Elon Inc. The podcast about 0:21:10.359 --> 0:21:13.960 Elon the people you talk to with this podcast. Is 0:21:13.960 --> 0:21:17.880 there any kind of consensus about how long Elon Musk 0:21:17.920 --> 0:21:21.000 and President Trump will co exist peacefully before maybe these 0:21:21.000 --> 0:21:24.159 two large egos kind of start butting heads and it 0:21:24.200 --> 0:21:25.439 may blow up to some extent. 0:21:25.560 --> 0:21:28.960 You know, early on in the Trump presidency, you saw 0:21:29.480 --> 0:21:32.200 people who were who had sort of covered Trump, were 0:21:32.200 --> 0:21:35.959 close to Trump world, more skeptical about Musk. Right, see 0:21:36.000 --> 0:21:38.920 the fact that Trump has over the years had these 0:21:38.920 --> 0:21:41.280