1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,840 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,040 Speaker 1: or watch us live on YouTube. 6 00:00:27,560 --> 00:00:32,239 Speaker 2: Cannot stop talking about the precious metals right, So we're 7 00:00:32,280 --> 00:00:35,519 Speaker 2: seeing some signs of moderating here this morning. But the 8 00:00:35,560 --> 00:00:37,920 Speaker 2: size of the losses that we have seen in precious 9 00:00:37,960 --> 00:00:40,839 Speaker 2: metals and silver, gold, copper is one really for the 10 00:00:40,920 --> 00:00:43,360 Speaker 2: history books. So let's talk more about it and where 11 00:00:43,400 --> 00:00:46,720 Speaker 2: things might be headed with James Steele, chief Precious Metals 12 00:00:46,720 --> 00:00:50,760 Speaker 2: analyst at HSBC. He joins us live in our Bloomberg Studios. James, 13 00:00:50,800 --> 00:00:52,159 Speaker 2: good to see you. Happy Monday morning to. 14 00:00:52,120 --> 00:00:53,160 Speaker 3: You, Thank you, good morning. 15 00:00:53,240 --> 00:00:56,240 Speaker 2: So is this just really about this gold and silver 16 00:00:56,360 --> 00:00:59,400 Speaker 2: trade being too crowded and people were just trying to 17 00:00:59,480 --> 00:01:01,520 Speaker 2: try to get out or is there something else going 18 00:01:01,560 --> 00:01:02,040 Speaker 2: on here? 19 00:01:02,800 --> 00:01:05,080 Speaker 3: Well, I think you've effectively hit the head on the 20 00:01:05,120 --> 00:01:07,959 Speaker 3: nail for the immediate reason. I mean, any commodity that 21 00:01:08,160 --> 00:01:12,040 Speaker 3: has this parabolic rally that gold and silver had and 22 00:01:12,400 --> 00:01:15,119 Speaker 3: the new entrance into the market, which way they were 23 00:01:15,120 --> 00:01:18,880 Speaker 3: flooding in and have been for many, many months now. 24 00:01:19,680 --> 00:01:24,399 Speaker 3: It really does invite a volatility and be profit taking 25 00:01:24,480 --> 00:01:29,000 Speaker 3: stroke liquidation on any news or developments that run counter 26 00:01:29,640 --> 00:01:32,280 Speaker 3: to gold, and we had a couple of them within 27 00:01:32,319 --> 00:01:35,920 Speaker 3: a few days, and it really did give us a 28 00:01:35,959 --> 00:01:39,800 Speaker 3: big and deserved, I think correction in both gold and silver. 29 00:01:40,120 --> 00:01:43,199 Speaker 4: James, you've been at this precious metal game for decades now. 30 00:01:43,560 --> 00:01:47,440 Speaker 4: Just put into context the volatility both on the upside 31 00:01:47,480 --> 00:01:51,160 Speaker 4: and then the downside. On Friday, there's handful of daysaw, 32 00:01:51,280 --> 00:01:52,640 Speaker 4: just extraordinary volatility. 33 00:01:52,680 --> 00:01:53,720 Speaker 5: Just put that into context. 34 00:01:54,200 --> 00:01:57,880 Speaker 3: Well, yes, you're right, and uh it's extraordinary and a 35 00:01:57,960 --> 00:02:00,880 Speaker 3: bit so and so was a rally. Yep. You know, 36 00:02:01,600 --> 00:02:05,240 Speaker 3: we were talking about gold made a fifty four I 37 00:02:05,280 --> 00:02:10,600 Speaker 3: think new highs last night, and people were talking about 38 00:02:10,600 --> 00:02:13,519 Speaker 3: a new high and new high and I always cautioned everybody. 39 00:02:13,520 --> 00:02:16,520 Speaker 3: I said, look, it's not a new high until we 40 00:02:16,760 --> 00:02:20,440 Speaker 3: go above in real terms what it was in nineteen eighty. 41 00:02:20,480 --> 00:02:23,200 Speaker 3: In January of nineteen eighty, gold hit eight hundred and 42 00:02:23,280 --> 00:02:27,520 Speaker 3: fifty dollars an ounce, and that's about thirty four hundred 43 00:02:27,560 --> 00:02:30,360 Speaker 3: dollars in today's There you go, And they did that 44 00:02:30,400 --> 00:02:33,360 Speaker 3: in April last year, and then I said, Okay, now 45 00:02:33,880 --> 00:02:36,600 Speaker 3: we can genuinely talk about a new high. We can 46 00:02:36,680 --> 00:02:40,600 Speaker 3: genuinely talk about a real rally. And the difference between 47 00:02:40,600 --> 00:02:44,400 Speaker 3: now and seventy nine was a limited number of buyers 48 00:02:44,440 --> 00:02:49,480 Speaker 3: at that time, a hunt Brothers, especially in silver, but 49 00:02:49,600 --> 00:02:53,880 Speaker 3: also a much more broad based church this time, a 50 00:02:53,919 --> 00:02:57,600 Speaker 3: lot of lot a lot in it. But the volatility, nonetheless, 51 00:02:58,160 --> 00:02:59,600 Speaker 3: and to look at it this way, we had a 52 00:02:59,639 --> 00:03:02,840 Speaker 3: swing in a couple of days that was equal to 53 00:03:02,880 --> 00:03:05,840 Speaker 3: the absolute number that gold was trading at when I 54 00:03:05,880 --> 00:03:06,640 Speaker 3: started covering it. 55 00:03:06,919 --> 00:03:09,920 Speaker 2: Wow, that put it in perspective, right, So you know, 56 00:03:10,000 --> 00:03:14,240 Speaker 2: it's just when you look at where we've come. I mean, 57 00:03:14,360 --> 00:03:17,120 Speaker 2: gold top fifty five hundred dollars announced last week, it's 58 00:03:17,120 --> 00:03:19,520 Speaker 2: now at about forty seven to fifty. I guess spot gold. 59 00:03:19,800 --> 00:03:23,280 Speaker 2: Silver wiped out thirty percent of its value in just 60 00:03:23,400 --> 00:03:27,240 Speaker 2: three days. Do you have a target for gold by 61 00:03:27,280 --> 00:03:29,280 Speaker 2: the end of this year, because for many who had 62 00:03:29,320 --> 00:03:31,200 Speaker 2: their target at fifty five hundred, well, it already blew 63 00:03:31,240 --> 00:03:32,480 Speaker 2: past that in just the first month. 64 00:03:33,000 --> 00:03:35,040 Speaker 3: Yeah, are high for the rest of the year is 65 00:03:35,080 --> 00:03:38,760 Speaker 3: fifty five. We have an average which is almost where 66 00:03:38,760 --> 00:03:42,280 Speaker 3: it is now, and we're expecting a very wide range. 67 00:03:43,160 --> 00:03:46,400 Speaker 3: A good news could take us down closer to the 68 00:03:46,440 --> 00:03:51,680 Speaker 3: four thousand dollars level. But what we think will likely 69 00:03:53,080 --> 00:03:56,760 Speaker 3: the research view is that we have a moderately softer 70 00:03:56,880 --> 00:03:59,840 Speaker 3: dollar this year according to our effects people who've been 71 00:04:00,000 --> 00:04:04,560 Speaker 3: aready bang on on that. And also we would I 72 00:04:04,600 --> 00:04:07,400 Speaker 3: think very likely see a resumption in a greater central 73 00:04:07,400 --> 00:04:10,560 Speaker 3: bank buying. I mean, they are the ones that kicked 74 00:04:10,560 --> 00:04:14,280 Speaker 3: off the genesis of this rally back in twenty twenty two. 75 00:04:15,520 --> 00:04:17,320 Speaker 3: If you look at it this way, in twenty two, 76 00:04:17,440 --> 00:04:20,520 Speaker 3: twenty three, twenty four, almost one out of every three 77 00:04:20,560 --> 00:04:23,400 Speaker 3: ounces of gold that came out of the ground went 78 00:04:23,440 --> 00:04:28,000 Speaker 3: into a central bank vault, double or triple the average 79 00:04:28,000 --> 00:04:29,080 Speaker 3: for the previous ten years. 80 00:04:29,080 --> 00:04:29,799 Speaker 2: That's incredible. 81 00:04:29,880 --> 00:04:30,920 Speaker 3: Yeah, truly. 82 00:04:31,320 --> 00:04:32,719 Speaker 5: So I think about a commodity. 83 00:04:32,839 --> 00:04:36,640 Speaker 4: Let's just take oil prices spike up, they start drilling 84 00:04:36,680 --> 00:04:37,599 Speaker 4: holes in Texas. 85 00:04:38,040 --> 00:04:40,840 Speaker 5: What happens when you see gold just spike up? 86 00:04:40,960 --> 00:04:44,560 Speaker 4: I mean they don't start digging more mind No, well 87 00:04:44,600 --> 00:04:46,440 Speaker 4: not in the near term. 88 00:04:46,920 --> 00:04:47,120 Speaker 6: You know. 89 00:04:48,080 --> 00:04:51,039 Speaker 3: Again, when I first started covering the markets, by the 90 00:04:51,120 --> 00:04:54,080 Speaker 3: time a group of geologists said I think there's some 91 00:04:54,120 --> 00:04:56,479 Speaker 3: gold here, to the time when it went round your finger, 92 00:04:56,640 --> 00:05:02,200 Speaker 3: your neck, it was about ten years wow, exploration, permitting, 93 00:05:02,320 --> 00:05:06,320 Speaker 3: et cetera, et cetera. It's closer to twenty now. It 94 00:05:06,360 --> 00:05:09,880 Speaker 3: takes a very long time. You know, it's highly capital 95 00:05:09,960 --> 00:05:14,240 Speaker 3: intensive and the low hanging fruit has been picked. So 96 00:05:14,279 --> 00:05:18,760 Speaker 3: we're going into into different regions and areas. What is 97 00:05:18,839 --> 00:05:23,599 Speaker 3: flexible is recycling because gold, unlike oil and grain, is 98 00:05:23,640 --> 00:05:29,000 Speaker 3: never consumed. It's stored somewhere. It's either around your bank 99 00:05:29,320 --> 00:05:31,680 Speaker 3: or on your neck in a central bank vault and 100 00:05:32,240 --> 00:05:34,800 Speaker 3: a vault some other place, and a bar and a coin, 101 00:05:35,560 --> 00:05:39,200 Speaker 3: and that's what can be mobilized at fairly short Now. 102 00:05:39,240 --> 00:05:42,640 Speaker 3: What we've noticed is that we haven't seen the response 103 00:05:42,800 --> 00:05:45,880 Speaker 3: on the recycling side. It is higher, there's not as 104 00:05:45,960 --> 00:05:48,560 Speaker 3: high as I would have expected. And it's rather like 105 00:05:48,600 --> 00:05:51,760 Speaker 3: owning a home. If the market keeps going up, you 106 00:05:51,800 --> 00:05:56,000 Speaker 3: may refrain from putting your flat on the market, but 107 00:05:56,040 --> 00:05:58,440 Speaker 3: when it comes down a bit, you might then say, okay, 108 00:05:58,480 --> 00:06:01,040 Speaker 3: maybe we've hit the high I should sell now. So 109 00:06:01,080 --> 00:06:03,000 Speaker 3: we may see a pickup in recycling. 110 00:06:03,680 --> 00:06:05,880 Speaker 2: You know, I just wonder, I mean, outside of just 111 00:06:06,080 --> 00:06:10,120 Speaker 2: of investors, what is the larger impact on the economy, 112 00:06:10,360 --> 00:06:12,320 Speaker 2: the fact that we have gold prices and we do 113 00:06:12,560 --> 00:06:16,320 Speaker 2: use gold in different ways every day. Gold and silver 114 00:06:16,400 --> 00:06:19,120 Speaker 2: prices being as high as they are, even despite the 115 00:06:19,160 --> 00:06:22,039 Speaker 2: pullback we saw recently, they're still relatively high. What is 116 00:06:22,080 --> 00:06:23,920 Speaker 2: that impact on the broader economy. 117 00:06:24,520 --> 00:06:29,800 Speaker 3: Well, it has been good for jewelry, simply put. A 118 00:06:29,880 --> 00:06:33,440 Speaker 3: jewelry is often about fifty percent of physical gold demand. 119 00:06:34,080 --> 00:06:36,800 Speaker 3: We calculate that last year it was only thirty five percent. 120 00:06:37,720 --> 00:06:40,440 Speaker 3: It's been down double digit. Also there's a reduction in 121 00:06:40,480 --> 00:06:45,599 Speaker 3: coin demand. But generally speaking, gold does not have huge 122 00:06:45,600 --> 00:06:50,560 Speaker 3: macroeconomic impacts. It reacts to macroecerdomics. It doesn't set It's 123 00:06:50,560 --> 00:06:53,239 Speaker 3: not like oil. It doesn't set the stage. It reacts 124 00:06:53,279 --> 00:06:57,800 Speaker 3: to the stage. And that's why you know, you've got 125 00:06:57,839 --> 00:07:00,960 Speaker 3: to pay attention because the gold price, let's tell you 126 00:07:01,120 --> 00:07:05,240 Speaker 3: that there are geopolitical or economic risks. It doesn't they 127 00:07:05,279 --> 00:07:09,000 Speaker 3: may not materialize, but right, you know, the geopolitical risk 128 00:07:09,080 --> 00:07:12,800 Speaker 3: index is fairly high and persistently high. 129 00:07:13,200 --> 00:07:13,880 Speaker 5: All right, folks. 130 00:07:13,960 --> 00:07:16,880 Speaker 4: G LCO that is the function of the day, gives 131 00:07:16,880 --> 00:07:18,960 Speaker 4: you all the global commodities. You click on the metals 132 00:07:19,280 --> 00:07:22,320 Speaker 4: and then it breaks it down between base metals, ferris metals, 133 00:07:22,360 --> 00:07:23,680 Speaker 4: and precious metals. 134 00:07:23,680 --> 00:07:24,360 Speaker 5: So there you go. 135 00:07:24,400 --> 00:07:26,400 Speaker 4: That's the function you need to be on top of 136 00:07:26,520 --> 00:07:28,240 Speaker 4: what's happening in the world of commodities. 137 00:07:28,280 --> 00:07:30,119 Speaker 5: James Steel, thank you so much. We appreciate it. 138 00:07:30,240 --> 00:07:34,280 Speaker 4: James's chief Precious Metals analyst at HSBC. Whatever we see 139 00:07:34,320 --> 00:07:37,440 Speaker 4: big moves in precious metals by far. The first phone 140 00:07:37,440 --> 00:07:39,480 Speaker 4: call we go out to is to James Steele, and 141 00:07:39,520 --> 00:07:41,320 Speaker 4: he's kind of to give us some of his time there. 142 00:07:43,000 --> 00:07:46,160 Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this. 143 00:07:52,360 --> 00:07:55,960 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 144 00:07:56,000 --> 00:07:59,960 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Applecarplay, 145 00:08:00,040 --> 00:08:03,520 Speaker 1: Android Auto with the Bloomberg Business Up, or watch us 146 00:08:03,600 --> 00:08:04,720 Speaker 1: live on YouTube. 147 00:08:04,960 --> 00:08:07,840 Speaker 4: The alexis Christopher sitting in for Tom Keena Paul Sweeneyer 148 00:08:07,880 --> 00:08:10,600 Speaker 4: live here in our Bloomberg Interactive Brokers studio, streaming live 149 00:08:11,040 --> 00:08:13,560 Speaker 4: on YouTube as well. I can see one of the 150 00:08:13,720 --> 00:08:16,280 Speaker 4: other networks that Polsted Tiny Field. The Beast is out, 151 00:08:16,440 --> 00:08:17,920 Speaker 4: so I just I'm not sure if the Beast has 152 00:08:17,920 --> 00:08:20,000 Speaker 4: seen its shadow or not. We'll bring that to you 153 00:08:20,040 --> 00:08:22,600 Speaker 4: as that news breaks. Let's get back to these markets 154 00:08:22,640 --> 00:08:26,880 Speaker 4: here today. Madison Faller joins US Global investment strategists at 155 00:08:26,920 --> 00:08:31,400 Speaker 4: JP Morgan Private Bank, located in London Madison. Twenty twenty 156 00:08:31,400 --> 00:08:34,040 Speaker 4: five great year for equity markets. The US equity markets 157 00:08:34,080 --> 00:08:37,040 Speaker 4: did really well. A lot of markets outside of the 158 00:08:37,120 --> 00:08:40,679 Speaker 4: US did even better. How are you thinking about global 159 00:08:41,160 --> 00:08:42,280 Speaker 4: equity stock. 160 00:08:42,040 --> 00:08:43,680 Speaker 5: Price performance in twenty twenty six? 161 00:08:45,920 --> 00:08:48,240 Speaker 7: Sure so, I think you know. Of course, twenty twenty 162 00:08:48,280 --> 00:08:51,760 Speaker 7: five was an incredibly strong year for markets broadly and 163 00:08:51,840 --> 00:08:55,320 Speaker 7: also for XUS, outperforming the US, which is not something 164 00:08:55,360 --> 00:08:58,720 Speaker 7: that we always see. As we look forward into this year, 165 00:08:58,800 --> 00:09:02,080 Speaker 7: I think it's another store where we are very much 166 00:09:02,120 --> 00:09:04,520 Speaker 7: focused on being globally diversified. 167 00:09:04,800 --> 00:09:06,839 Speaker 8: We still do believe that the US should. 168 00:09:06,559 --> 00:09:10,240 Speaker 7: Remain the core of portfolios, given the access to growth 169 00:09:10,480 --> 00:09:14,040 Speaker 7: in technology and potential productivity gains that it can provide. 170 00:09:14,200 --> 00:09:16,000 Speaker 7: But at the same time, we are also seeing a 171 00:09:16,040 --> 00:09:21,080 Speaker 7: world where national champions across different regions are also growing 172 00:09:21,280 --> 00:09:25,760 Speaker 7: in increased focus, especially as it's underpinned by fiscal stimulus efforts, 173 00:09:25,760 --> 00:09:28,400 Speaker 7: and that's also starting to show through into the earnings 174 00:09:28,480 --> 00:09:32,160 Speaker 7: momentum as well. So I expect a continued narrowing of 175 00:09:32,200 --> 00:09:34,160 Speaker 7: the gap between the US and the rest of the world, 176 00:09:34,240 --> 00:09:35,920 Speaker 7: especially when it comes to earnings growth. 177 00:09:36,000 --> 00:09:36,720 Speaker 8: Heading into this. 178 00:09:36,679 --> 00:09:40,199 Speaker 2: Year in Madison, we keep talking about broader market participation 179 00:09:40,360 --> 00:09:42,679 Speaker 2: with our guests and we're seeing more and more of it. 180 00:09:42,800 --> 00:09:46,760 Speaker 2: Which sectors regions are sort of your top pick outside 181 00:09:46,880 --> 00:09:48,959 Speaker 2: of the usual big tech names. 182 00:09:51,040 --> 00:09:54,079 Speaker 7: So when we look across the market, there are a 183 00:09:54,120 --> 00:09:55,920 Speaker 7: few different things that I would call out, and I 184 00:09:56,000 --> 00:09:59,960 Speaker 7: think that different regions are showcasing that they have different 185 00:10:00,160 --> 00:10:00,800 Speaker 7: strengths that. 186 00:10:00,760 --> 00:10:01,440 Speaker 8: They can offer. 187 00:10:01,800 --> 00:10:04,680 Speaker 7: So in the US, yes, you mentioned we do like 188 00:10:04,760 --> 00:10:06,680 Speaker 7: big tech, but I do think that there's a broadening 189 00:10:06,679 --> 00:10:08,720 Speaker 7: out beyond that where we want to be focused on 190 00:10:08,760 --> 00:10:12,559 Speaker 7: the entire AI ecosystem, so not just the hyper scalers, 191 00:10:13,160 --> 00:10:15,880 Speaker 7: but the entire AI value chain, from the hardware to 192 00:10:16,000 --> 00:10:21,240 Speaker 7: the software, to power to data center infrastructure. But you're 193 00:10:21,240 --> 00:10:24,319 Speaker 7: also seeing support within the US around financials and a 194 00:10:24,400 --> 00:10:26,120 Speaker 7: catchup from healthcare, for instance. 195 00:10:26,720 --> 00:10:28,080 Speaker 8: In Europe, I think it's very. 196 00:10:28,040 --> 00:10:32,000 Speaker 7: Much a focus on energy security, on defense, we do 197 00:10:32,120 --> 00:10:35,800 Speaker 7: know that spending continues to become unlocked in that area. 198 00:10:36,120 --> 00:10:38,599 Speaker 8: When it comes to emerging markets. 199 00:10:38,880 --> 00:10:42,080 Speaker 7: You know em can't be I think painted with one 200 00:10:42,200 --> 00:10:45,160 Speaker 7: broad brushstroke, but there's certainly a lot of opportunity there 201 00:10:45,200 --> 00:10:49,680 Speaker 7: where it be broad broad India, which is a focus 202 00:10:49,679 --> 00:10:52,880 Speaker 7: of ours in addition to China Tech, and I would 203 00:10:52,880 --> 00:10:55,840 Speaker 7: also call out Taiwan and Korea as well in terms 204 00:10:55,840 --> 00:10:57,200 Speaker 7: of areas of focus within Asia. 205 00:10:57,679 --> 00:11:00,760 Speaker 4: Breaking news here Hawks of Tony Phil predict six more 206 00:11:00,800 --> 00:11:04,480 Speaker 4: weeks of winters to be no surprise, although two of 207 00:11:04,480 --> 00:11:07,040 Speaker 4: my offspringer in California and they both are texting me 208 00:11:07,160 --> 00:11:07,640 Speaker 4: like from the. 209 00:11:07,600 --> 00:11:09,600 Speaker 5: Beach, from the golf course. 210 00:11:09,720 --> 00:11:13,480 Speaker 4: Well that's just NaSTA, this is me, Yeah, Madison, talk 211 00:11:13,480 --> 00:11:16,080 Speaker 4: to us about the bond market again. Fix income results 212 00:11:16,080 --> 00:11:19,040 Speaker 4: in twenty twenty five for were really really solid. 213 00:11:19,080 --> 00:11:21,280 Speaker 5: How do you think about opportunities to fixing come in 214 00:11:21,280 --> 00:11:22,040 Speaker 5: twenty twenty six. 215 00:11:23,760 --> 00:11:26,439 Speaker 7: What I think about fixed income, I think what I 216 00:11:26,480 --> 00:11:29,800 Speaker 7: would be looking for are carry like returns. I think 217 00:11:29,840 --> 00:11:32,320 Speaker 7: that now that we have most developed world central banks 218 00:11:32,320 --> 00:11:35,520 Speaker 7: that are wrapping up their easing cycles, I do expect 219 00:11:35,520 --> 00:11:40,320 Speaker 7: that bond yields will stabilize around these more elevated levels. 220 00:11:40,360 --> 00:11:41,960 Speaker 7: And as a result of that, I think that we 221 00:11:42,000 --> 00:11:44,160 Speaker 7: can expect to you know, clip that carry as we 222 00:11:44,200 --> 00:11:46,520 Speaker 7: move along. Of course, if we were to be in 223 00:11:46,559 --> 00:11:50,800 Speaker 7: a more downside growth scenario, bonds could offer protection, but 224 00:11:50,880 --> 00:11:52,560 Speaker 7: I think at the you know, the flip side of 225 00:11:52,559 --> 00:11:55,760 Speaker 7: that is that if we do see more inflation volatility, 226 00:11:55,800 --> 00:11:58,200 Speaker 7: bonds might not be enough, which is why we're very 227 00:11:58,280 --> 00:12:03,520 Speaker 7: much focused on complementing that with real assets like infrastructure 228 00:12:03,559 --> 00:12:04,800 Speaker 7: and commodities like gold. 229 00:12:04,920 --> 00:12:06,040 Speaker 8: Especially on the pullback. 230 00:12:06,520 --> 00:12:08,880 Speaker 2: What are you doing with this gold trade right now? That, 231 00:12:09,000 --> 00:12:10,800 Speaker 2: I mean, it went up so fast? I guess we 232 00:12:10,800 --> 00:12:13,319 Speaker 2: shouldn't be too surprised, Paul, right that it's violently the 233 00:12:13,720 --> 00:12:17,800 Speaker 2: violent move to the downside. But do you if you 234 00:12:17,920 --> 00:12:19,960 Speaker 2: have gold, do you stick with it right now? Do 235 00:12:20,000 --> 00:12:21,920 Speaker 2: you just hold if you're not in it, do you 236 00:12:22,000 --> 00:12:23,959 Speaker 2: forget the fomo and stay out for now? 237 00:12:24,000 --> 00:12:24,839 Speaker 5: What do you do with gold? 238 00:12:26,080 --> 00:12:27,000 Speaker 8: We're buyers here. 239 00:12:27,280 --> 00:12:30,440 Speaker 7: I think that this pullback offers another you know, re 240 00:12:30,600 --> 00:12:33,920 Speaker 7: entry point for investors, especially if they aren't allocated already. 241 00:12:34,440 --> 00:12:37,160 Speaker 7: For those that are allocated, we we'd certainly be holding 242 00:12:37,160 --> 00:12:38,000 Speaker 7: those positions. 243 00:12:38,480 --> 00:12:38,840 Speaker 9: Uh. 244 00:12:39,200 --> 00:12:41,160 Speaker 8: And I think you mentioned mentioned it. 245 00:12:41,320 --> 00:12:41,440 Speaker 1: Uh. 246 00:12:41,640 --> 00:12:42,960 Speaker 7: You know, I think there's a you know a little 247 00:12:42,960 --> 00:12:45,560 Speaker 7: bit of a sentiment driven effect that's you know driven 248 00:12:45,800 --> 00:12:48,200 Speaker 7: driven prices lower over the course of the last few 249 00:12:48,280 --> 00:12:51,320 Speaker 7: trading days. But I think the you know, structural drivers 250 00:12:51,480 --> 00:12:54,880 Speaker 7: very much remain in place, whether that be this continued 251 00:12:54,960 --> 00:12:59,640 Speaker 7: uncertainty premium, whether that's debt fiscal whether it's you know, 252 00:12:59,679 --> 00:13:02,320 Speaker 7: do youolitically driven, But at the same time, we know 253 00:13:02,360 --> 00:13:05,640 Speaker 7: that there's a lot of central bank buying. Retail buying 254 00:13:05,720 --> 00:13:09,040 Speaker 7: is also not I think, to elevate it and remains 255 00:13:09,080 --> 00:13:11,800 Speaker 7: below twenty twenty highs that we saw during COVID, So 256 00:13:11,840 --> 00:13:14,400 Speaker 7: I think the seeds are still there. We'd certainly be buyers, 257 00:13:14,520 --> 00:13:18,280 Speaker 7: and we actually just recently moved our targets higher north 258 00:13:18,360 --> 00:13:21,080 Speaker 7: of six thousand Madison. 259 00:13:21,120 --> 00:13:22,599 Speaker 4: We're just kind of right smack in the middle of 260 00:13:22,640 --> 00:13:27,079 Speaker 4: earnings here. I guess to date they've been pretty solid. 261 00:13:27,400 --> 00:13:29,040 Speaker 4: What are you taking away from earnings and what do 262 00:13:29,040 --> 00:13:30,600 Speaker 4: you think the market needs to see from an earnings 263 00:13:30,679 --> 00:13:31,360 Speaker 4: perspective here? 264 00:13:33,160 --> 00:13:35,719 Speaker 7: I think the market needs to see that corporations can 265 00:13:35,800 --> 00:13:38,240 Speaker 7: continue to you know, push through a lot of the 266 00:13:38,320 --> 00:13:41,720 Speaker 7: unknowns that we've seen take place. It's certainly over the 267 00:13:41,720 --> 00:13:44,040 Speaker 7: course of the last year. And so I think for 268 00:13:44,080 --> 00:13:46,640 Speaker 7: me it's more, you know, whether or not they can 269 00:13:46,679 --> 00:13:49,600 Speaker 7: really continue to show that resilience. We are looking at 270 00:13:49,679 --> 00:13:52,520 Speaker 7: Q four looking to produce, you know, just under twelve 271 00:13:52,559 --> 00:13:55,240 Speaker 7: percent year of year earnings growth, which is yet another 272 00:13:55,480 --> 00:13:58,240 Speaker 7: quarter of double digit profit growth, which is really meaningful, 273 00:13:58,520 --> 00:14:00,760 Speaker 7: and on top of that, we're all so seeing that 274 00:14:01,360 --> 00:14:06,679 Speaker 7: profit margins are especially resilient and are historically high, so 275 00:14:07,000 --> 00:14:09,720 Speaker 7: we're looking to see whether that continues to be the case. 276 00:14:10,320 --> 00:14:12,800 Speaker 7: But the second thing that I would also point out is, 277 00:14:13,480 --> 00:14:16,040 Speaker 7: you know how this continues to broaden out between sectors. 278 00:14:16,360 --> 00:14:18,199 Speaker 8: So we know that the earnings growth. 279 00:14:17,920 --> 00:14:21,040 Speaker 7: Gap between you know, the big tech, you know players 280 00:14:21,080 --> 00:14:22,600 Speaker 7: of the world and the rest of the market was 281 00:14:22,640 --> 00:14:25,000 Speaker 7: still quite wide and twenty twenty five, even if it 282 00:14:25,080 --> 00:14:27,680 Speaker 7: narrowed a bit, we're looking to see if that continues 283 00:14:27,680 --> 00:14:29,960 Speaker 7: to narrow and so far that that does seem to 284 00:14:30,000 --> 00:14:33,760 Speaker 7: be the case, with other sectors certainly starting to participate more. 285 00:14:34,320 --> 00:14:36,800 Speaker 2: I have exciting news. I'm looking at my weather app 286 00:14:36,840 --> 00:14:40,440 Speaker 2: and it's hit double digits. So here in midtown Manhattan 287 00:14:40,640 --> 00:14:43,600 Speaker 2: it is now of bolly twelve degrees. Madison, what is 288 00:14:43,640 --> 00:14:44,920 Speaker 2: it like by you? Are you in London? 289 00:14:46,120 --> 00:14:49,440 Speaker 7: I'm in London and it is cold and dreary and rainy, 290 00:14:49,720 --> 00:14:51,600 Speaker 7: And I must say, I'm originally from Florida, So when 291 00:14:51,600 --> 00:14:54,760 Speaker 7: you're talking about the weather and you know, pictures of sunshine, 292 00:14:54,760 --> 00:14:56,760 Speaker 7: that's something that I certainly miss and I see from 293 00:14:56,760 --> 00:14:57,520 Speaker 7: all my family members. 294 00:14:57,720 --> 00:14:59,960 Speaker 2: You're also a graduate of the University of Notre Dame. 295 00:15:00,080 --> 00:15:02,440 Speaker 2: So you're no stranger to like harsh Winters, right. 296 00:15:03,040 --> 00:15:05,640 Speaker 8: Correct, correct, I felt all the climates. 297 00:15:06,200 --> 00:15:07,480 Speaker 5: Madison, thanks so much for joining us. 298 00:15:07,480 --> 00:15:11,160 Speaker 4: Appreciate it as always, Madison follow Global Investment Strategist JP Morgan, 299 00:15:11,200 --> 00:15:11,800 Speaker 4: Private Bank. 300 00:15:13,800 --> 00:15:16,960 Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this. 301 00:15:23,160 --> 00:15:26,760 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 302 00:15:26,800 --> 00:15:29,960 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 303 00:15:30,040 --> 00:15:33,440 Speaker 1: Apple Karplay and Android Auto with the Bloomberg Business app, 304 00:15:33,640 --> 00:15:35,360 Speaker 1: or watch us live on YouTube. 305 00:15:35,600 --> 00:15:39,400 Speaker 4: We're joined now by Joe Davis, Global Chief Economists at Vanguard. 306 00:15:39,720 --> 00:15:41,520 Speaker 5: Joe, I want to start with our feder Reserve. 307 00:15:41,560 --> 00:15:43,440 Speaker 4: We've had a lot of news over the last week 308 00:15:43,480 --> 00:15:47,240 Speaker 4: the Federal Reserve kind of staying pat with their rates, 309 00:15:47,800 --> 00:15:50,680 Speaker 4: but now we have the nomination of a new FED chair. 310 00:15:50,720 --> 00:15:52,920 Speaker 4: I love to just kind of get your you know, 311 00:15:53,120 --> 00:15:56,120 Speaker 4: FED thinking these days from at that thirty thousand foot level. 312 00:15:57,400 --> 00:16:00,280 Speaker 6: Well, again, I think it's really a good choice just 313 00:16:00,320 --> 00:16:04,400 Speaker 6: from what I know of just pass track records, and 314 00:16:04,480 --> 00:16:06,680 Speaker 6: our view was that the Federal Reserve, you know, may 315 00:16:06,760 --> 00:16:10,480 Speaker 6: ease once in twenty twenty six, but it would be 316 00:16:10,560 --> 00:16:13,560 Speaker 6: GDP growth that could eventually add a little bit more 317 00:16:14,000 --> 00:16:16,960 Speaker 6: half to labor market, which is pretty much stalled, and 318 00:16:17,040 --> 00:16:19,600 Speaker 6: so I think we'll see that over the course of 319 00:16:19,640 --> 00:16:22,960 Speaker 6: this year. Again we could have surprises on the jobs front. 320 00:16:23,880 --> 00:16:26,840 Speaker 6: But again overall, plaud and I think the financial markets 321 00:16:27,160 --> 00:16:28,560 Speaker 6: would agree. Joe. 322 00:16:28,560 --> 00:16:30,920 Speaker 2: I want to talk a little inflation in twenty twenty six. 323 00:16:31,280 --> 00:16:33,320 Speaker 2: Last week we got a backward looking number as we 324 00:16:33,360 --> 00:16:35,720 Speaker 2: continue to play catch up from the government shutdown. We 325 00:16:35,800 --> 00:16:39,160 Speaker 2: got the December producer price index and inflation at the 326 00:16:39,160 --> 00:16:42,720 Speaker 2: wholesale level was hotter than expected. What are your expectations 327 00:16:42,720 --> 00:16:45,600 Speaker 2: for inflation this year? And I wonder if the tariff 328 00:16:45,720 --> 00:16:49,000 Speaker 2: passed through is now behind us, because I don't nobody's 329 00:16:49,040 --> 00:16:50,520 Speaker 2: really talking about it anymore. 330 00:16:50,960 --> 00:16:53,320 Speaker 6: I know, I know, well again it was delayed, was 331 00:16:53,480 --> 00:16:55,960 Speaker 6: never dead. The tariff passed through, and so we should 332 00:16:56,000 --> 00:16:59,640 Speaker 6: see some moderation and inflation. So the progress should be 333 00:16:59,680 --> 00:17:02,080 Speaker 6: good yet frustrating. You know again, that's not you know, 334 00:17:02,280 --> 00:17:04,520 Speaker 6: that's certainly our view, it's it's others view. I think 335 00:17:04,560 --> 00:17:07,120 Speaker 6: as well. It's been stubborn inflation. It's almost five years 336 00:17:07,160 --> 00:17:11,120 Speaker 6: above target. And again I applaud Kevin worse I think 337 00:17:11,119 --> 00:17:13,480 Speaker 6: he's pointed to the fact that we found in our 338 00:17:13,480 --> 00:17:19,000 Speaker 6: research fiscal easing or easy physical conditions have some modest 339 00:17:19,000 --> 00:17:20,960 Speaker 6: boost on inflation. I think that's one of the reasons 340 00:17:21,000 --> 00:17:21,840 Speaker 6: why it's been suffered. 341 00:17:23,320 --> 00:17:26,200 Speaker 4: What is your call about inflation going forward here? Because 342 00:17:26,240 --> 00:17:30,399 Speaker 4: again it's been persistent sticky. One could argue that this 343 00:17:30,440 --> 00:17:33,680 Speaker 4: one big, beautiful bill may result in maybe even pushing 344 00:17:33,720 --> 00:17:34,760 Speaker 4: inflation a little bit higher. 345 00:17:34,760 --> 00:17:35,439 Speaker 5: How do you think about that? 346 00:17:36,359 --> 00:17:38,600 Speaker 6: Well, I think what will happen in twenty twenty six 347 00:17:38,720 --> 00:17:41,359 Speaker 6: is going to be the key just you know, tension 348 00:17:41,440 --> 00:17:43,840 Speaker 6: for the next three years, and that is can AI 349 00:17:43,960 --> 00:17:46,520 Speaker 6: and some of this productivity events as we've seen, be 350 00:17:46,600 --> 00:17:50,880 Speaker 6: a relief valve on inflation versus if we don't have 351 00:17:51,040 --> 00:17:54,199 Speaker 6: those sort of dividends, you're going to have, you know, 352 00:17:54,240 --> 00:17:57,720 Speaker 6: some some fiscal based price pressures. That really is the 353 00:17:57,760 --> 00:17:59,600 Speaker 6: tug of war we see, not just for this year. 354 00:17:59,720 --> 00:18:02,560 Speaker 6: This year it's more modest, but is your bold enough 355 00:18:02,600 --> 00:18:04,439 Speaker 6: to look out two or three years That is the 356 00:18:04,480 --> 00:18:06,680 Speaker 6: tug of war. Can we get lower inflation with high 357 00:18:06,760 --> 00:18:10,360 Speaker 6: growth or the inverse? That is clearly when I think 358 00:18:10,400 --> 00:18:12,800 Speaker 6: the goal prices versus tech stocks point too on any 359 00:18:12,800 --> 00:18:14,679 Speaker 6: given day Joe. 360 00:18:15,080 --> 00:18:17,520 Speaker 2: Growth at four percent is pretty darn solid. Is it 361 00:18:17,640 --> 00:18:20,120 Speaker 2: sustainable though? For the rest of the year. 362 00:18:20,760 --> 00:18:22,879 Speaker 6: Well, I think we have some someone off. So we 363 00:18:22,960 --> 00:18:26,159 Speaker 6: obviously had some trade you know, volatility that boosted the 364 00:18:26,200 --> 00:18:29,480 Speaker 6: current numbers up. But our view was for twenty twenty 365 00:18:29,520 --> 00:18:32,080 Speaker 6: six remains intact, and that is we could have economic 366 00:18:32,160 --> 00:18:35,960 Speaker 6: upside from the US economic perspective, really driven at the 367 00:18:36,080 --> 00:18:40,399 Speaker 6: margin by greater business investment and resilient consumer. You know, 368 00:18:40,440 --> 00:18:43,040 Speaker 6: we were talking about, you know, the risks above two. 369 00:18:43,160 --> 00:18:46,240 Speaker 6: Now we're clearly above that. We will see some moderation. 370 00:18:46,920 --> 00:18:51,200 Speaker 6: But our our thesis of economic upside despite market froth, 371 00:18:51,280 --> 00:18:55,000 Speaker 6: which gives us some concerns, that that core message remains intact. 372 00:18:55,840 --> 00:18:58,480 Speaker 4: Hey, Joe, the labor market, I guess you know, one 373 00:18:58,480 --> 00:18:59,639 Speaker 4: could call it resilient. 374 00:19:00,200 --> 00:19:02,000 Speaker 5: Doesn't seem to be a lot of hiring, doesn't seem 375 00:19:02,040 --> 00:19:04,960 Speaker 5: to be a lot of firing. Maybe that's okay. How 376 00:19:05,000 --> 00:19:06,200 Speaker 5: do you think about the labor market. 377 00:19:07,160 --> 00:19:10,840 Speaker 6: Well, again, we've had supply and demand moved down in locksteps, 378 00:19:10,880 --> 00:19:13,679 Speaker 6: so clearly there's been a coin from a hiring perspective, 379 00:19:13,680 --> 00:19:15,359 Speaker 6: But we have one of the one of the deepest 380 00:19:15,400 --> 00:19:17,760 Speaker 6: labor market signals in the world. Given our four one 381 00:19:17,840 --> 00:19:22,000 Speaker 6: k record keeping surface, you know, millions of real time 382 00:19:22,000 --> 00:19:23,800 Speaker 6: we can see in real time how many are being 383 00:19:23,880 --> 00:19:27,560 Speaker 6: hired let go, and also their wage increases. And so 384 00:19:27,600 --> 00:19:31,159 Speaker 6: what we see is is affirming at a low level. 385 00:19:31,359 --> 00:19:35,760 Speaker 6: Wage growth is stronger than employment growth. And if we're right, 386 00:19:36,080 --> 00:19:38,359 Speaker 6: we should see a little bit greater, bigger in the 387 00:19:38,440 --> 00:19:39,960 Speaker 6: labor market in the back half of the year. But 388 00:19:40,000 --> 00:19:41,320 Speaker 6: we're not out of that yet. I mean, we are 389 00:19:41,359 --> 00:19:44,960 Speaker 6: prepared to see in some month a modest negative non 390 00:19:45,000 --> 00:19:48,280 Speaker 6: farm payroll that's that break, even with the supply having 391 00:19:48,320 --> 00:19:51,000 Speaker 6: coming down, so that I think could be a you know, 392 00:19:51,119 --> 00:19:54,000 Speaker 6: some market nervousness. You could see a federal reserve easing 393 00:19:54,040 --> 00:19:56,600 Speaker 6: into that, you know, between now and the summer. But 394 00:19:56,640 --> 00:19:58,640 Speaker 6: if you're bold enough to look past that, we see 395 00:19:58,680 --> 00:19:59,960 Speaker 6: some firming in the labor market. 396 00:20:00,520 --> 00:20:01,720 Speaker 5: Joe, thanks so much for joining us. 397 00:20:01,760 --> 00:20:04,159 Speaker 4: Really appreciate getting a few minutes of your time. Joe Davis, 398 00:20:04,280 --> 00:20:07,520 Speaker 4: he's global chief economist at Vanguard Group. 399 00:20:09,240 --> 00:20:12,359 Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this. 400 00:20:18,600 --> 00:20:22,200 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 401 00:20:22,240 --> 00:20:25,399 Speaker 1: weekday afternoons from seven to ten am. Eastern Listen on 402 00:20:25,520 --> 00:20:28,920 Speaker 1: Apple Karplay and Android Auto with the Bloomberg Business app, 403 00:20:29,080 --> 00:20:31,000 Speaker 1: or watch us live on YouTube. 404 00:20:31,760 --> 00:20:35,560 Speaker 4: Lexus Christopher sitting in for Tom Keene this morning on Paulsweeny. 405 00:20:35,600 --> 00:20:38,040 Speaker 4: We live here in our Bloomberg Enrector Broker studio in 406 00:20:38,080 --> 00:20:40,480 Speaker 4: New York City. We're streaming live on YouTube as well. 407 00:20:40,480 --> 00:20:40,600 Speaker 6: Well. 408 00:20:40,600 --> 00:20:42,359 Speaker 5: The US government stumbled. 409 00:20:42,280 --> 00:20:45,720 Speaker 4: Into a partial shutdown while waiting for the House to 410 00:20:45,760 --> 00:20:48,280 Speaker 4: approve a funding deal. President Donald Trump worked out with 411 00:20:48,440 --> 00:20:51,600 Speaker 4: Democrats to get the latest reporting from what's happening down 412 00:20:51,600 --> 00:20:52,040 Speaker 4: there in DC. 413 00:20:52,160 --> 00:20:53,560 Speaker 8: We go to Henrietta. 414 00:20:53,160 --> 00:20:56,320 Speaker 4: Tres co founder of Veda Partners. Henrietta, when are we 415 00:20:56,359 --> 00:21:00,280 Speaker 4: going to get this government this partial shutdown partially re opening? 416 00:21:01,880 --> 00:21:04,800 Speaker 10: Yeah, that might be what it is, a partial, partial reopening. 417 00:21:05,520 --> 00:21:08,720 Speaker 10: We are looking at votes tonight in the Rules Committee 418 00:21:08,720 --> 00:21:12,240 Speaker 10: around four o'clock. Maybe movement on the House floor around 419 00:21:12,320 --> 00:21:14,960 Speaker 10: six pm at the earliest. But Speaker Johnson is setting 420 00:21:14,960 --> 00:21:17,439 Speaker 10: the table for Tuesday votes, so it's going to be 421 00:21:17,440 --> 00:21:19,480 Speaker 10: a little while yet. I think we are on a 422 00:21:19,520 --> 00:21:23,320 Speaker 10: path towards reopening, but you should expect some drama on 423 00:21:23,359 --> 00:21:23,960 Speaker 10: and off today. 424 00:21:24,280 --> 00:21:26,720 Speaker 2: So what's the sticking point here? Henriette is it's still 425 00:21:26,720 --> 00:21:31,680 Speaker 2: about immigration, ICE and how the White House is dealing 426 00:21:31,760 --> 00:21:32,239 Speaker 2: with all of it. 427 00:21:33,040 --> 00:21:36,680 Speaker 10: Yeah, definitely, And I think more than just the technicals 428 00:21:36,680 --> 00:21:38,840 Speaker 10: and the policy will fight that fight for the next 429 00:21:38,840 --> 00:21:42,439 Speaker 10: two weeks over masks and IDs and videotapes and stuff 430 00:21:42,440 --> 00:21:45,720 Speaker 10: for all the ICE officers. But right now, it's really 431 00:21:45,760 --> 00:21:49,639 Speaker 10: about the House Democratic Conference getting socialized the idea that 432 00:21:49,680 --> 00:21:51,399 Speaker 10: they're going to need to provide quite a lot of 433 00:21:51,440 --> 00:21:55,000 Speaker 10: votes to this, and Speaker Johnson accepting that. So Leader 434 00:21:55,040 --> 00:21:57,800 Speaker 10: Schumer and President Trump were able to negotiate a deal 435 00:21:57,840 --> 00:22:00,600 Speaker 10: that would work on the Upper Chamber, but now you 436 00:22:00,640 --> 00:22:02,600 Speaker 10: know the House has to weigh in. What I look 437 00:22:02,640 --> 00:22:06,040 Speaker 10: at from the inside is where members who are not 438 00:22:06,160 --> 00:22:09,800 Speaker 10: Hakeem Jeffries are. Where not on the far left, you 439 00:22:09,880 --> 00:22:13,720 Speaker 10: have guys that are stalwarts in DC like Steady Hoyer 440 00:22:13,760 --> 00:22:15,960 Speaker 10: and Jim Clyburn saying that they want to support the bill, 441 00:22:16,000 --> 00:22:18,840 Speaker 10: and they're encouraging their moderate members to do so. I 442 00:22:18,880 --> 00:22:21,080 Speaker 10: suspect you'll see, much like in the Senate side, a 443 00:22:21,080 --> 00:22:23,359 Speaker 10: good chunk of bipartisanship to get this over the finish 444 00:22:23,400 --> 00:22:24,960 Speaker 10: line later on this week. 445 00:22:24,920 --> 00:22:28,679 Speaker 4: Henretta, I believe the polling suggests that most Americans do 446 00:22:28,840 --> 00:22:32,919 Speaker 4: not approve of the tactics Ice is employing here. How 447 00:22:32,960 --> 00:22:36,280 Speaker 4: does that translate into, you know, what some of these 448 00:22:36,320 --> 00:22:39,280 Speaker 4: Republican members of Congress do in terms of maybe this 449 00:22:39,440 --> 00:22:42,320 Speaker 4: vote and maybe pushing back on some of the other 450 00:22:42,359 --> 00:22:43,760 Speaker 4: president's agenda items. 451 00:22:43,800 --> 00:22:44,720 Speaker 5: Where do we stand there? 452 00:22:45,400 --> 00:22:48,600 Speaker 10: Yeah, it's it's amazing. Everything is just broken right now. 453 00:22:48,920 --> 00:22:51,600 Speaker 10: So you can't just say up and down this is 454 00:22:51,640 --> 00:22:55,240 Speaker 10: a red versus Blue issue or a D versus R issue. 455 00:22:55,359 --> 00:22:58,720 Speaker 10: You have members up for reelection in Texas who saw 456 00:22:58,760 --> 00:23:02,680 Speaker 10: a thirty one point swing in a state Senate seat 457 00:23:03,280 --> 00:23:04,280 Speaker 10: just this weekend. 458 00:23:04,840 --> 00:23:06,200 Speaker 9: That's crazy town. 459 00:23:06,320 --> 00:23:09,760 Speaker 10: So you start to then fracture what would otherwise be 460 00:23:09,840 --> 00:23:13,080 Speaker 10: a unified Republican or Democratic base. President Trump is going 461 00:23:13,119 --> 00:23:16,480 Speaker 10: to do some serious arm twisting on I would say 462 00:23:16,520 --> 00:23:19,639 Speaker 10: at least thirty forty members of the Republican Party to 463 00:23:19,680 --> 00:23:22,000 Speaker 10: get them on board with this package. And on the 464 00:23:22,040 --> 00:23:23,800 Speaker 10: Democrat side, you're going to have to see a lot 465 00:23:23,800 --> 00:23:27,200 Speaker 10: of movement into the realm of being willing to negotiate 466 00:23:27,240 --> 00:23:29,879 Speaker 10: with Speaker Johnson and with the White House. 467 00:23:29,920 --> 00:23:32,920 Speaker 9: So it's the wild less out there right now. 468 00:23:33,440 --> 00:23:35,359 Speaker 2: I just want to broaden this and go international for 469 00:23:35,440 --> 00:23:39,720 Speaker 2: a moment. Henriette. Because things are heating up here. It's 470 00:23:39,760 --> 00:23:43,000 Speaker 2: worrying between Iran and the US. I know that over 471 00:23:43,040 --> 00:23:45,520 Speaker 2: the weekend around Supreme Leader warned the US of what 472 00:23:45,600 --> 00:23:48,639 Speaker 2: he called a regional war. He said, quote, the Americans 473 00:23:48,640 --> 00:23:50,679 Speaker 2: should know if they start a war this time, it 474 00:23:50,760 --> 00:23:53,840 Speaker 2: will be a regional war. Talk to us a little 475 00:23:53,840 --> 00:23:55,840 Speaker 2: bit about that, and where do things stand right now? 476 00:23:56,720 --> 00:23:59,000 Speaker 10: Yeah, I mean, military advisors will tell you that that's 477 00:23:59,040 --> 00:24:02,359 Speaker 10: a posture that must take on domestically because they do 478 00:24:02,440 --> 00:24:04,639 Speaker 10: not have the firepower to go against the United States 479 00:24:04,640 --> 00:24:06,320 Speaker 10: one on one, so they need to turn it into 480 00:24:06,320 --> 00:24:12,520 Speaker 10: a regional theater. And what has occurred obviously as a result, 481 00:24:12,520 --> 00:24:15,480 Speaker 10: because so many folks in DC, myself included, are worried 482 00:24:15,520 --> 00:24:18,280 Speaker 10: about escalation on the military front, some sort of kinetic 483 00:24:18,280 --> 00:24:21,240 Speaker 10: event where we are in Iran or somewhere nearby. 484 00:24:21,320 --> 00:24:24,000 Speaker 9: We know the USS Abraham Lincoln is in. 485 00:24:23,960 --> 00:24:27,440 Speaker 10: The region prepared to do what it was not prepared 486 00:24:27,440 --> 00:24:28,760 Speaker 10: to do, you know, a week or two ago. 487 00:24:29,000 --> 00:24:30,640 Speaker 9: So things have absolutely escalated. 488 00:24:30,720 --> 00:24:34,439 Speaker 10: But the United States Senate already has members who are 489 00:24:34,480 --> 00:24:37,199 Speaker 10: out there trying to put a war powers resolution on 490 00:24:37,280 --> 00:24:40,840 Speaker 10: the floor to limit the president's ability to go you know, 491 00:24:40,880 --> 00:24:43,359 Speaker 10: to the next level with Iran. So I think there's 492 00:24:43,400 --> 00:24:47,080 Speaker 10: going to be a sustained push that the president can't avoid. 493 00:24:47,119 --> 00:24:49,119 Speaker 10: He doesn't get to just act in a vacuum here 494 00:24:49,359 --> 00:24:51,959 Speaker 10: like perhaps was the case with Venezuela. Now members are 495 00:24:52,040 --> 00:24:54,480 Speaker 10: very keen to what's going on. They do not want 496 00:24:54,520 --> 00:24:56,399 Speaker 10: to see another regional war in the whole of the 497 00:24:56,440 --> 00:24:59,119 Speaker 10: Middle East. That does not play well with the American public, 498 00:24:59,240 --> 00:25:01,400 Speaker 10: and Republicans don't want that on their backs going into 499 00:25:01,440 --> 00:25:04,200 Speaker 10: a midterm election cycle either. So a lot of oversight 500 00:25:04,280 --> 00:25:06,680 Speaker 10: that we did not see earlier in the year with Venezuela. 501 00:25:07,240 --> 00:25:10,639 Speaker 4: So we were going into this election year, Henriette, thinking 502 00:25:10,680 --> 00:25:13,520 Speaker 4: that perhaps Democrats could get control of the House, and 503 00:25:13,560 --> 00:25:17,879 Speaker 4: then we see this state race in Texas that you mentioned, 504 00:25:17,920 --> 00:25:20,960 Speaker 4: which was a real surprise win for the Democrat there. 505 00:25:22,080 --> 00:25:25,840 Speaker 4: What's the feeling on the calculus for midterm elections here? 506 00:25:26,000 --> 00:25:29,040 Speaker 5: So so early in the year, yeah, I. 507 00:25:28,960 --> 00:25:32,639 Speaker 10: Mean, in this Texas seat, you had a plus seventeen 508 00:25:32,840 --> 00:25:35,720 Speaker 10: for Trump electoral outcome, and I want to say that 509 00:25:35,800 --> 00:25:38,280 Speaker 10: now it would swung back to plus thirteen for the 510 00:25:38,280 --> 00:25:40,240 Speaker 10: Democratic candidate over the weekend. 511 00:25:40,600 --> 00:25:42,560 Speaker 9: That is absolutely not normal. 512 00:25:42,800 --> 00:25:45,960 Speaker 10: That is obviously the trajectory of what you see in 513 00:25:45,960 --> 00:25:47,960 Speaker 10: a wave of election cycle. It builds up of what 514 00:25:48,040 --> 00:25:51,200 Speaker 10: Democrats were able to notch as wins across the Northeast 515 00:25:51,240 --> 00:25:56,040 Speaker 10: in November and Minnesota, Georgia, and Mississippi around the same 516 00:25:56,040 --> 00:25:58,000 Speaker 10: time as they were doing the governor's races in New 517 00:25:58,080 --> 00:25:59,120 Speaker 10: Jersey and Virginia. 518 00:26:00,000 --> 00:26:01,480 Speaker 9: Sage is really quite clear. 519 00:26:01,560 --> 00:26:05,680 Speaker 10: I thought Senator Tillis had a really important point for Republicans, 520 00:26:05,720 --> 00:26:07,800 Speaker 10: which is, you know, the House is very likely to 521 00:26:07,840 --> 00:26:10,360 Speaker 10: switch to Democratic control where at like eighty five percent 522 00:26:10,840 --> 00:26:12,760 Speaker 10: on the Senate side, though our odds are much more 523 00:26:12,880 --> 00:26:15,919 Speaker 10: muted at thirty percent. But look at the fundraising in 524 00:26:16,000 --> 00:26:20,439 Speaker 10: a race like Alaska, where the Democratic challenger freized, you know, 525 00:26:20,480 --> 00:26:23,200 Speaker 10: one and a half million dollars in twenty four hours, 526 00:26:23,400 --> 00:26:26,760 Speaker 10: which is more than the current incumbent Republican race all quarter. 527 00:26:27,160 --> 00:26:31,160 Speaker 10: There is okay, galvanization and enthusiasm, and it's coast to coast, 528 00:26:31,200 --> 00:26:34,160 Speaker 10: I mean Jersey to Alaska. You can't get more inclusive 529 00:26:34,200 --> 00:26:34,520 Speaker 10: than that. 530 00:26:34,800 --> 00:26:37,600 Speaker 4: Zachy similar types of weather though, Henrietta, thank you so much. 531 00:26:37,600 --> 00:26:39,960 Speaker 5: I appreciate henning you to Trece, co founder of Beta. 532 00:26:39,680 --> 00:26:45,159 Speaker 1: Partners, this is the Bloomberg surveillance podcast available on Apple, Spotify, 533 00:26:45,280 --> 00:26:49,560 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 534 00:26:49,720 --> 00:26:52,960 Speaker 1: seven to ten am Easter and on Bloomberg dot Com, 535 00:26:53,080 --> 00:26:56,920 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 536 00:26:57,200 --> 00:27:00,000 Speaker 1: You can also watch us live every weekday on YouTube 537 00:27:00,040 --> 00:27:02,600 Speaker 1: Tube and always on the Bloomberg Terminal 538 00:27:09,560 --> 00:27:10,000 Speaker 2: MHM