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Speaker 2: Seem Ashaw with us right now. Thrilled to ever with
Speaker 2: us from London. Always here on the shifting tides that
Speaker 2: we see with Principal Asset Management, their chief global strategies.
Speaker 2: See I look at the discussion of the last forty
Speaker 2: eight hours, maybe seventy two hours, and there seems to
Speaker 2: be a threat to technology, a threat that takes risk,
Speaker 2: risk loving out of the markets.
Speaker 3: Is that shiftable?
Speaker 2: Do you think that there can be a rebuttal where
Speaker 2: we get back on board and optimism about software, AI
Speaker 2: and technology.
Speaker 4: Yeah, Hi Todd, I certainly think that this is a
Speaker 4: fleeting moment. I mean, I do think that the narrative
Speaker 4: around tech, the potential displacement from which would come from AI,
Speaker 4: is something which is going to be lingering in the
Speaker 4: market for a while.
Speaker 5: But overall, I do think that.
Speaker 4: That sense of risk on can return. The macro backdrop
Speaker 4: is pretty strong. There's a lot of concerns at the
Speaker 4: moment about what I could do two jobs. I think
Speaker 4: a lot of that is a little bit misplaced, very
Speaker 4: very forward looking. So I think as time goes and
Speaker 4: the market should settle down and start to really refocus
Speaker 4: on those fundamentals. But I would continue to expect shopping
Speaker 4: markets going forward.
Speaker 6: So Sima, we've seen that rotation out of some of
Speaker 6: the high growth, higher multiple stocks really starting kind of
Speaker 6: late last year into this year. Is that a short
Speaker 6: term trade? Is that something a longer term theme for
Speaker 6: twenty twenty six, maybe into more value, into maybe wall
Speaker 6: or in mid camp.
Speaker 7: Yeah, Sidy, we.
Speaker 4: Have increasingly light small cups since around Q three of
Speaker 4: last year, and there's you know, there's a couple of
Speaker 4: really key reasons. One is you need to have constructive
Speaker 4: growth backjobs only that's something that we're seeing or just
Speaker 4: in the US for globally. You need to have rate cuts.
Speaker 4: You need to have ideally signs of deregulation. So these
Speaker 4: three things are all coming and then especially at a
Speaker 4: time when valuations are really very favorable for small cups,
Speaker 4: so that continue to be the case. And similar to
Speaker 4: value as well, like a lot of the stuff which
Speaker 4: has been somewhat unloved, has been shifting towards looking at
Speaker 4: other parts of the market, such as value. I think
Speaker 4: that's been interesting is that there's a number of different
Speaker 4: themes going on in the market though, so of course
Speaker 4: there's a shift towards small cap and value. There's also
Speaker 4: been this kind of really strong performance from some of
Speaker 4: the defensives and then at times really strong performance from
Speaker 4: deep cycles. So this is a confusing market. There's a
Speaker 4: lot of different cross currents going on at the moment.
Speaker 2: I mean, this really caught my intention lesson right. Netflix's
Speaker 2: forward pe on the Bloomberg is higher, larger than Microsoft's
Speaker 2: forward welling.
Speaker 3: Okay, that is how things have shifted.
Speaker 8: That's how it has Seema.
Speaker 6: We've seen, you know, as we look back to twenty
Speaker 6: twenty five and so far this year in twenty twenty six,
Speaker 6: non US equity markets perform outperforming the US here across
Speaker 6: the board in a lot of key, key geographical markets.
Speaker 6: How do you think about the US versus rest of
Speaker 6: the world.
Speaker 4: Yeah, you know, this is I mean, this is one
Speaker 4: of those those trades that started last year there were
Speaker 4: question marks around whether it's going to be sustained for
Speaker 4: twenty twenty six. But as we've seen you go into
Speaker 4: this year and actually it seems like it's gaining momentum.
Speaker 4: We've actually seen more and more clients really becoming more
Speaker 4: interested in the national into the international trade. And again
Speaker 4: there's a couple of reasons for that.
Speaker 5: I mean, I think the.
Speaker 4: Global micro performance continues to be pretty strong. You've got good,
Speaker 4: I guess, supportive fiscal emunctory cycles, and a number of
Speaker 4: different parts of the world, there's a week dollar and
Speaker 4: then on top of that, I think the lack of
Speaker 4: certainty with regards to US policy is really starting to
Speaker 4: grate on a lot of investors. And so when you
Speaker 4: have got these cheap evaluations in international markets, when ernest
Speaker 4: growth for these markets is also performing fairly well, and
Speaker 4: then you have the policy uncertainty you thrown into there,
Speaker 4: Certainly that international space is looking more and more interesting,
Speaker 4: and you know, you can point in parts of Europe,
Speaker 4: you can point parts of Asia emerging markets, so a
Speaker 4: ton of other opportunities beyond the US.
Speaker 2: We continue with Seema Shure, a chief global strategiest principal,
Speaker 2: said Management Sam, I look at one of the great
Speaker 2: thoughts out there and what I've seen in the zeitgeist.
Speaker 2: Is Europe still wants to invest in America? Is the
Speaker 2: flow of equity purchase still coming into America?
Speaker 9: Yeah?
Speaker 4: I mean, you know, it's not like the tap has
Speaker 4: been completely switched off. European investors are still looking for
Speaker 4: where there's innovation and growth. But I guess I think
Speaker 4: the opportunities have been really compelling in order to offset
Speaker 4: the currency respects, offset their policy uncertainty, So it has
Speaker 4: to be a very interesting trade. Whereas before just buying
Speaker 4: into the US was almost enough to get that pickup,
Speaker 4: there's just a lot more differentiation, and there's also stronger
Speaker 4: performance out of Europe.
Speaker 5: So I think the hurdle.
Speaker 4: For insting in the US is a little bit higher,
Speaker 4: and it's probably more that the hurdle for investing domestically
Speaker 4: is that much lower.
Speaker 6: The bond market, we've seen bonds, you know, give you
Speaker 6: some solid returns in twenty twenty five, solid returns so
Speaker 6: far here in the start twenty twenty six, radious. The
Speaker 6: opportunities in the bond market.
Speaker 4: Look, we continue to have a fairly constructive outlook for
Speaker 4: US growth, for global growth, so that means that we
Speaker 4: can still be really focused on credit and still focus
Speaker 4: on segments of high yield, but really focusing within the
Speaker 4: higher quality segments of high yield. Probably more than anything,
Speaker 4: there is emerging market debt which continues to look really
Speaker 4: strong for US, and actually emerging markets both across the
Speaker 4: equity space and bond markets. You know, we have a
Speaker 4: belief that the dollar is going to continue to weaken,
Speaker 4: and that certainly helps out that narrative. But certainly we
Speaker 4: do think fixed income is interesting. It's just that we
Speaker 4: would have a probably greater preference for exits in other
Speaker 4: parts of the market.
Speaker 3: Seem very quickly here.
Speaker 2: I just looked at two standard deviation chart of the
Speaker 2: standard of course five hundred. We haven't even had a correction.
Speaker 2: I mean, where we are now, we've barely nudge. Should
Speaker 2: our listeners and viewers focus on the larger index or
Speaker 2: the uproar over technology and software?
Speaker 4: I mean, you're right, it's interesting because there's been so
Speaker 4: much noise and yet absolutely indexes it's very much pretty
Speaker 4: much unchanged. But I do think investors can be looking
Speaker 4: beyond the tech side. There's been a broadening of earnings
Speaker 4: growth to a number of different sectors. We're looking at
Speaker 4: which of the sectors that can benefit from from AI
Speaker 4: and not really be disrupted by AI. So there's a
Speaker 4: lot of opportunities and of course valuations and more compelling
Speaker 4: outside of the tech sector.
Speaker 5: So I think for investors look beyond.
Speaker 4: The index, you know, look to you know, where can
Speaker 4: and this really provide the additional information and sophistication.
Speaker 2: Thank you for the brief to get to start and
Speaker 2: see Mishaw with us with Principal Asset Management.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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Speaker 2: Snow the Sire Franklin Templeton. But let's secuw you into it.
Speaker 2: Robert Schiffman. I don't think he went home for the storm.
Speaker 3: No, he stays, he's got like a pop ten, you know,
Speaker 3: like back on the food court. Yep, down at one
Speaker 3: twenty park. Schiffman just publishes second sense. He notices it's
Speaker 3: snowing today. Second sentence, maybe a bond deal today? Question mark?
Speaker 3: Oh okay, and it's like totally out in the zeitgeist.
Speaker 3: It is.
Speaker 6: I mean, and we've seen you know, Rob Schiffman covers
Speaker 6: all them names, the tech names from a credit perspective,
Speaker 6: and he's been writing about all these big bond deals.
Speaker 6: We've seen, Tom, from the big tech companies and he says,
Speaker 6: the market's still up and bring.
Speaker 3: Them inside baseball. We go to Franklin Templeton today.
Speaker 2: The woman that picks up the phone at Franklin Templeton
Speaker 2: when Google or microsoftware ampletool bond deal, sonew de Side
Speaker 2: joins the CIO fixed income Franklin Templeton. So how does
Speaker 2: it work? Like, I get there's a bond deal, like
Speaker 2: John Dee does the thing? Okay, fine, But if a
Speaker 2: big tech company does an offering, a trunch offering six
Speaker 2: seven eight trunches?
Speaker 3: Do they call Franklin Templeton? Do you call them? Do
Speaker 3: you meet it a Starbucks? How does it work?
Speaker 8: No?
Speaker 5: It doesn't put that way, Tom, I wish you did.
Speaker 5: I'd say that. The first instance, what we have observed is.
Speaker 10: That very large institutional bias tend to have there are
Speaker 10: discussions which take place. I'm talking about large pension funds
Speaker 10: and so on, and so forth. But we absolutely thought
Speaker 10: up as the deals come to market.
Speaker 3: They do they listen to you?
Speaker 2: I mean the heritage of Franklin on the West Coast
Speaker 2: and Templeton and the Bahamas and the huge emotional merger
Speaker 2: decades ago.
Speaker 3: Do they listen to your experts?
Speaker 2: Or is it almost a bond deal of a hyperscaler
Speaker 2: is dictated to the street?
Speaker 3: Which is it?
Speaker 10: You know I had currently in the recent past, I
Speaker 10: would say that these hyperscalers essentially are dictating to the street.
Speaker 10: And this is the truth over the last year when
Speaker 10: we look at the shar volume of debt which has
Speaker 10: been issued, that there is a certain amount of expectation
Speaker 10: of some indigestion as we go further into this year,
Speaker 10: because even those initial assumptions that we would have around
Speaker 10: OLF a trillion of issues this year has now picked
Speaker 10: up to over seven hundred billion this year itself.
Speaker 5: I'd say that we're watching all this with some question.
Speaker 10: It's not that we think the deals will go bad,
Speaker 10: but spreads are likely to take a bit of a
Speaker 10: hit from the quantity of just the share volume.
Speaker 5: It's absorbable, absolutely, but.
Speaker 10: I would anticipate that spreads take a bit of a
Speaker 10: hit on this quantity of supply.
Speaker 6: So we've seen such a tremendous supply of new issuance
Speaker 6: come out of the tech space, which is a little
Speaker 6: bit unusual because the tech companies historically have had great
Speaker 6: cash character, which is great free cash, so it didn't
Speaker 6: really need the bond market.
Speaker 3: At what point do you think the.
Speaker 8: Bond market starts pushing back a little.
Speaker 6: Bit, maybe on the rates, maybe on some covenant language.
Speaker 6: When do you think that it may shift a little
Speaker 6: bit towards the buyer gets a little bit more power here?
Speaker 10: I think the buyer this is the year that happens, right,
Speaker 10: just given again the volume, and I think the first
Speaker 10: elements of pushback are coming. You see it in equity markets,
Speaker 10: and I think you also are seeing it broadly in
Speaker 10: fixed inco markets in the sense that when we looked
Speaker 10: at these issues, they are the picks and shovels piece
Speaker 10: of AI.
Speaker 5: Right.
Speaker 10: For a few years, everything was about mag seven and
Speaker 10: people were super excited and everything looked wonderful, and then
Speaker 10: a lot of the tech companies who did in fact
Speaker 10: have all of that free cash flow, we are now
Speaker 10: observing that the cash flow is not quite as free anymore.
Speaker 10: It's drying up a little bit. They're coming to the
Speaker 10: market for very big tapics. So I think what we
Speaker 10: might start seeing is more of more of the industry
Speaker 10: treating these growth firms, if you will, more like traditional,
Speaker 10: which means show us the money, show us the returns.
Speaker 10: And I think you're beginning to see a little bit
Speaker 10: of that. And since we had the bigs and trouvels,
Speaker 10: then we were looking where is the return that showed
Speaker 10: me the money? Couldn't find it, and therefore I think
Speaker 10: the market switched to saying, so who's losing? And that's
Speaker 10: what's hitting software right now. We're still in a bit
Speaker 10: of a gap, which is, show me the big winners,
Speaker 10: and we don't have them yet, we can't know. And
Speaker 10: I think that's a little bit of almost cognitive dissonance
Speaker 10: right now in the market, which is we all a
Speaker 10: create AI as transformative, but who is it transforming in
Speaker 10: a positive sense?
Speaker 6: So now let's just step back a little bit here.
Speaker 6: In twenty twenty five, fixed income had a very very
Speaker 6: solid year of high single digit all in total returns.
Speaker 6: Here in twenty twenty six, should I be content with
Speaker 6: just clipping coupons here? And if so, where.
Speaker 5: Yes, the answer is yes.
Speaker 10: Look, we are looking at incredibly tight spreads. Everything that
Speaker 10: we see wants us to be a little bit cautious
Speaker 10: in terms of additional spread tightening and in terms of
Speaker 10: where in the fixed income space you look for a terms,
Speaker 10: I'd say look at emergent markets, look a little more global,
Speaker 10: because those areas are still underinvested for most US investors.
Speaker 5: I think it's a good time to start looking at
Speaker 5: some of this again.
Speaker 10: And I also think I would not say don't look
Speaker 10: at high yield. You should be looking at high You
Speaker 10: should be looking at all of these sectors. Because the
Speaker 10: market typically throws a baby out with the bath water.
Speaker 10: All software is not in. It's in a death spiral,
Speaker 10: and you might think it is based on what we're seeing.
Speaker 10: So we are trying to look very carefully to find
Speaker 10: things which might in fact be mispriced at the current market.
Speaker 2: A question from the time where Franklin literally invented folks
Speaker 2: triple tex free. We make a joke about it, but
Speaker 2: somebody had to first do that, and I give Franklin
Speaker 2: all that Dreyfus was there as well. I really give
Speaker 2: Franklin all the credit. Sonew it's just as simple as
Speaker 2: I can. Are the hybrid kind of debt like convertible
Speaker 2: bonds or equity preferreds?
Speaker 3: Are they attractive? Here?
Speaker 2: Are they a legacy from another time and place.
Speaker 5: Common they go?
Speaker 10: And I think converts are still attractive. You have to
Speaker 10: just be careful about which points you pick them right.
Speaker 10: And I think that the question of whether you should
Speaker 10: be looking at interesting triplecs should you be looking at converts,
Speaker 10: that's always going to be from and I think that
Speaker 10: continues to be the case. I think it's definitely premature
Speaker 10: to say that their day is over.
Speaker 2: Hugely valuable. Thank you so much for those comments, Tonew.
Speaker 2: I hope compliance wasn't listening talking about like how do
Speaker 2: you digest a bond deal? That was really informative. Sonel
Speaker 2: Deci with the CIO fixed in at Franklin at Temper
Speaker 2: and we hope she keeps your job.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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Speaker 2: Mandy sing with us here this morning. Of course, on Nvidia.
Speaker 2: The cell side's all in on this. I looked at
Speaker 2: the A and R function. No one's not in love
Speaker 2: with this thing. Some of the you know, they're popping
Speaker 2: up forty two percent return out twelve months. Where is
Speaker 2: the confidence in Nvidia given the tech crisis that we.
Speaker 9: Have, And you're right, I think the tech crisis points
Speaker 9: to the fact that this disruption is real when it
Speaker 9: comes to the AI impact, and Nvidia is the poster
Speaker 9: child when it comes to the demand that they have
Speaker 9: seen for their chips and look all the hyperscalers. We
Speaker 9: started the year thinking they're going to grow their capex
Speaker 9: thirty percent. Now that number is sixty percent. Some of
Speaker 9: that increases because of memory prices, but then you are
Speaker 9: also seeing an increased plans to add capacity, and that's
Speaker 9: where an Nvidia will likely have upside to their numbers tonight.
Speaker 9: The question still remains around the sustainability of growth, because
Speaker 9: when you are growing seventy percent at the scale that
Speaker 9: Nvidia is at, you know, three hundred billion dollars round
Speaker 9: rate for twenty twenty six, the numbers, the growth rates
Speaker 9: will taper.
Speaker 8: It's a given. So that's the part that I think.
Speaker 9: The visibility is what you want to figure out in
Speaker 9: terms of how much visibility the company has and what
Speaker 9: that means in terms of growth rates.
Speaker 6: I mean, again I'm looking at the FA function, which
Speaker 6: is a consensus of all the analysts forecasts here and
Speaker 6: again in Counter twenty six or Counter really twenty six
Speaker 6: fifty percent revenue growth. I mean, it's just extraordinary here.
Speaker 6: What does the street need to hear from Nvidia tonight?
Speaker 6: What's the what are they focusing on these days?
Speaker 9: I mean, Jensen has called out demand being stronger at
Speaker 9: least ten times, you know, since the start of the
Speaker 9: year Cees Davos, and yesterday, you know the fact that
Speaker 9: AMD had this deal with Meta where they ended up
Speaker 9: giving away ten percent of the stock as warrants. To me,
Speaker 9: that's a sign Invidia still is the leader when it
Speaker 9: comes to you know, everyone clamoring to get their chips
Speaker 9: and everyone else is trying to make sure they stay
Speaker 9: in the race, which is what the move I thought
Speaker 9: AMD had yesterday.
Speaker 2: Yesterday, I mean basically put the surveillance cork in my
Speaker 2: mouth and man, he lectured me on the use of AI.
Speaker 2: I look at it as a twenty dollars subscription. How
Speaker 2: God's name did they pay for the billions of data
Speaker 2: centers with twenty dollars from Alexis, twenty dollars from Paul,
Speaker 2: and twenty dollars from Time.
Speaker 9: So right now they are subsidizing it and it is
Speaker 9: being priced below the costs that you know, these hyperscalers
Speaker 9: have to pay to Nvidia to get the chips because
Speaker 9: Nvidia clearly is not taking a hit on their margins.
Speaker 9: They still have that mid seventy percent margins, So prices
Speaker 9: will go up, that twenty dollars subscription will go up,
Speaker 9: and extreme I know, and also the enterprise API usage
Speaker 9: that's a big part of adoption.
Speaker 8: Don't just focus on the corporation. That's corporation.
Speaker 3: They don't pay twenty dollars a bag person.
Speaker 9: Yeah, they're signing multimillion dollar deals right now.
Speaker 6: I mean in Nvidia, you just mentioned three hundred million
Speaker 6: dollars in revenue. I just went on to look at
Speaker 6: AMD forty five billion dollars in revenue. It's not even.
Speaker 3: Close, dude.
Speaker 6: So is Nvidia that much ahead of everybody else in
Speaker 6: terms of this story?
Speaker 8: They are?
Speaker 9: And and that Blackwell chip ramp, that they showed last quarter.
Speaker 9: I mean you will see it in full gear and
Speaker 9: the results tonight. Now they have announced it in next architecture,
Speaker 9: the Ruben architecture. So that's how far ahead there at least,
Speaker 9: you know, eighteen months ahead of everyone in terms off
Speaker 9: the efficiency and the compute capacity and power that they
Speaker 9: are able to show with their.
Speaker 2: Chair accrossination today, Mandy Singe, So then are on ground.
Speaker 2: I just can't say enough about Bloomberg intelligence ability on technology.
Speaker 2: We threaten they have both of them on together, but
Speaker 2: they can't be in the same room at the same time. Okay, Mandy,
Speaker 2: here's the real world on depreciation. I had a twenty
Speaker 2: nineteen Intel cheese grater, fancy fancy Mac computer, fancy people
Speaker 2: like me can buy. It is a depreciated value of
Speaker 2: under four hundred dollars. The fancy Nvidia chip in the
Speaker 2: bottom of my cheese grater is now holding up a
Speaker 2: martini at five PM. I mean, tell us about the
Speaker 2: depreciation and the technological pressure that mister Winning is under
Speaker 2: to get better, better, better, and everything else becomes a
Speaker 2: coffee table for a martini.
Speaker 9: Yes, and that's a great point about the long term.
Speaker 9: You know, multiple that this company can get despite its
Speaker 9: growth is because of that aspects. But right now, the
Speaker 9: real constraint is power. So everyone has a finite amount
Speaker 9: of power, and you want the best compute and that's
Speaker 9: why people are willing to upgrade to Invidia's latest architecture
Speaker 9: because they can't add more power.
Speaker 8: They want to use the chip that is.
Speaker 9: Best optimized for the power they have available, which is
Speaker 9: why Nvidia is releasing their new generations so quickly within
Speaker 9: a year.
Speaker 8: In some cases it's blackwell it is I don't know,
Speaker 8: I get.
Speaker 9: The rental pricing of the older versions of their chips.
Speaker 8: They are pricing rental, yes, I mean they're still off
Speaker 8: the charge.
Speaker 9: Everyone wants to get a hold of whatever the market
Speaker 9: has to offer in terms of the rental price.
Speaker 6: All right, so in the last three, four, five, six
Speaker 6: weeks we've had to sell off in software stocks. What
Speaker 6: are you and onnrock tone institutional investors these days about that.
Speaker 9: That it's going to take a while to clear this
Speaker 9: out in terms of these companies adapting, you know, the
Speaker 9: LM's situation.
Speaker 8: Now they have to integrate llms, they.
Speaker 9: Have to offer you know, functionality that's built on top
Speaker 9: of llms and it's going to take a while too.
Speaker 6: But day run, don't I just run out and buy
Speaker 6: Salesforce dot com? Hand over fist here? I mean, is
Speaker 6: this is AI going to put a Salesforce dot Com.
Speaker 8: Not out of business?
Speaker 9: The terminal value is not in question, but it's going
Speaker 9: to take a while to figure out the margin impact
Speaker 9: when the grow to a rebound, and it's not going
Speaker 9: to happen within Finally.
Speaker 6: Tom, these tech analysts investors actually have to do some
Speaker 6: work before they could just sit back and say, my
Speaker 6: business is going twenty thirty He's built his career on
Speaker 6: just my.
Speaker 8: Business and girl twenty.
Speaker 6: Thirty percent a year in Rocky you just plug it in. Now,
Speaker 6: I think they got it, like, oh boy.
Speaker 3: Okay, find Christian and why it's waiting for us here?
Speaker 2: We gotta we gotta get them on man deep saying
Speaker 2: Microsoft AI transform with Microsoft AI where trust meets innovate.
Speaker 2: Great NBA statement. Okay, wonderful. What's the level of panic
Speaker 2: at Microsoft right now? Good question in the AI wars.
Speaker 9: I mean, look, the whole Open AI situation is what's
Speaker 9: really causing the panic. Microsoft is still deeply embedded to
Speaker 9: Paul's point, you know they are a system of record
Speaker 9: and a lot of the cases and most likely you
Speaker 9: are going to add AI on top of Microsoft software.
Speaker 9: You're not going to rewrite you know what Microsoft is
Speaker 9: doing with Office or Windows or all the other software
Speaker 9: they have. The question is they don't have the own
Speaker 9: LLLM and that's where the reliance on open ai is
Speaker 9: hurting them because open ai wants to get into applications themselves,
Speaker 9: and that whole thing is not panning out.
Speaker 2: I thought l was a law degree out of the
Speaker 2: United king I have no idea. We got to thank
Speaker 2: you so much, appreciate it.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
Speaker 1: Apple Karplay and Android Otto with the Bloomberg Business app,
Speaker 1: or watch us live on YouTube.
Speaker 2: This is going to be a delicate conversation. Here's respect
Speaker 2: for Patrick McHenry. I mean, he said, you know, it's
Speaker 2: like North Carolina and it's Winston Salem and some of
Speaker 2: the world. These are close events, like he won by
Speaker 2: seventy percent. He won by seventy one percent. Seventy two percent.
Speaker 2: But Patrick mcchenry, when you were serving in the House,
Speaker 2: with all of your leadership, House, financial Services and all that,
Speaker 2: all that, you knew Republicans that were winning by two
Speaker 2: percent or two tenths of a percent. I look last night,
Speaker 2: it's a State of the Union. The judges have to
Speaker 2: show up the winning team. In this case, your Republicans
Speaker 2: have to show up. Some of the Democrats didn't show up.
Speaker 2: Elizabeth Warren from the Commonwealth of Massachusetts is sitting there
Speaker 2: all by yourself.
Speaker 3: Is a generalization? What does it mean?
Speaker 2: What's a symbolism when elected officials don't show up for
Speaker 2: the state of the Union.
Speaker 11: Well, first of all, what the Democratic Party did, the
Speaker 11: Democratic leaders in the House and the Senate did was
Speaker 11: effectively give over the state of Union to a rally
Speaker 11: of Republicans. And then they left the gadflies of the
Speaker 11: Democratic Party the far left to make a scene.
Speaker 7: And so Rakim.
Speaker 11: Jefferies was trying to manage his members and say, don't
Speaker 11: take de bay, don't don't fight Trump, don't yell at them,
Speaker 11: don't do stupid things, because our voters that we need
Speaker 11: to win the midterms are people in the middle let's
Speaker 11: not tick them off. And yet we still saw the outburst.
Speaker 11: We saw the outburst of members getting out, getting pulled out.
Speaker 11: We saw the outburst with Democratic members using profanity in
Speaker 11: the middle of the State of Union.
Speaker 7: I mean, this is just gotten out of hand.
Speaker 11: A bad look for the Democratic Party, huge missed opportunity
Speaker 11: for them in trying to give some balance to what
Speaker 11: President Trump said last time.
Speaker 2: It's been wonderful having you as a Bloomberg contributor because
Speaker 2: you're really looking at both sides, even though you're diehard.
Speaker 2: I get a GOP. He was like twelve years old
Speaker 2: when he entered Congress. Yeah, I mean no, you know,
Speaker 2: it's amazing, you know, thinking about that. Folks, John Tucker,
Speaker 2: what were you doing when you were twenty one?
Speaker 8: I was in this seat?
Speaker 3: Okay, right here, Matt.
Speaker 2: Patrick Henry at twenty one says I want to serve America.
Speaker 2: I think that's really cool. Patrick McHenry. The congresswoman from
Speaker 2: the first District of Iowa isn't as lucky as you.
Speaker 3: Miller Meeks.
Speaker 2: Doctor Miller Meeks of Davenport has a razor thin vote.
Speaker 2: What kind of Democrat will defeat her?
Speaker 11: It's going to be somebody who motivates their base, consolidates
Speaker 11: their base, but also is able to reach out to
Speaker 11: the middle, just like Marionette Miller Meeks did and when
Speaker 11: she was elected with the closest election the twenty two cycle.
Speaker 11: So she's battle tests, she knows what she's doing. She's
Speaker 11: a really hard working individual. So you have to have
Speaker 11: somebody that is the Democratic equivalent of Marionette.
Speaker 7: That's a very hard it's a very hard recruit.
Speaker 11: To get somebody mainstream and also tenacious enough to fight
Speaker 11: in a battleground.
Speaker 6: Congressman, this is an election year. What do you think,
Speaker 6: how do you think the President's State of the Union
Speaker 6: speech last night played for Republicans and Democrats as they
Speaker 6: enter into this election season.
Speaker 11: Well, look, since Lincoln, the goal here, since Abraham Lincoln,
Speaker 11: the goal here is to consolidate your traditional base and
Speaker 11: then reach out to those that are persuadable. We're in
Speaker 11: an area, we're in a time frame where there are
Speaker 11: very few persuadables in America today.
Speaker 7: So last night's State of the Union was about.
Speaker 11: Consolidating Conservatives, consolidating Republicans, making sure that President Trump maintains
Speaker 11: this very high, historically high approval rating among his party,
Speaker 11: which I think he was able to do, and then
Speaker 11: reach out to those independents that he had in the
Speaker 11: twenty twenty four election that brought him back to the way. Okay,
Speaker 11: So that message on the economy, health, on healthcare but
Speaker 11: specifically prescription drugs, his emphasis on even smaller issues on
Speaker 11: data and energy use around data centers. That type of
Speaker 11: targeted messaging was about bringing home those people that are
Speaker 11: the truit coalist.
Speaker 2: Come Patrick, man, you're a beast at this. I mean
Speaker 2: you're like total grizzled pro I got eight ways to
Speaker 2: go here, Okay, as simple as I can. How does
Speaker 2: he get back the Latino vote that he shattered?
Speaker 11: Well, first of all, the visual of Minneapolis was horrifying
Speaker 11: to the American people and it really shook the roundup
Speaker 11: approach that the tomorrowent Homeland Securities had the very high profile,
Speaker 11: out very public roundups. That is really alienated Hispanic voters
Speaker 11: that came to President Trump in the twenty twenty four elections, like,
Speaker 11: we got the biggest Hispanic vote the Republicans a Republican
Speaker 11: nominee for president's ever gotten.
Speaker 7: So he's got to stop that.
Speaker 11: Number One, he's got to refocus on traditional his success
Speaker 11: at the border, which he took a victory lap on
Speaker 11: last night, and get into the question of deporting criminal
Speaker 11: illegals that are of a part of crime, families in gangs.
Speaker 11: When you do that, when he does that, that is
Speaker 11: a solid immigration and immigration enforcement message. Not getting in
Speaker 11: fights with liberal protesters and sanctuary cities.
Speaker 7: That doesn't look good.
Speaker 11: Nobody thinks that's effective, nobody thinks that's smart use of
Speaker 11: federal law enforcement.
Speaker 7: And so that.
Speaker 11: Means he's got to get more Holman and less Gnome.
Speaker 11: That is going to be I think we're going to
Speaker 11: see in the coming months, and they've already made that pivot.
Speaker 6: Congressmen, Most polling shows that these tariffs, they don't poll
Speaker 6: very well with most voters out there. Yet, are you
Speaker 6: surprised that the president after the Supreme Court ruling, effectively
Speaker 6: doubled down on the tariff narrative.
Speaker 11: Yes, I'm well, I'm not surprised because the president loves tariffs.
Speaker 7: Regardless of what the polling says. The winning message on
Speaker 7: tariffs is.
Speaker 11: The geopolitical struggle with China that the West has with China.
Speaker 11: This should be the unifying element around his trade agenda,
Speaker 11: and instead of emphasizing that which will culminate in the
Speaker 11: summit with She in a month's time or in months time. Frankly,
Speaker 11: with their scheduled three scheduled meetings this year, he should
Speaker 11: He should emphasize the job lost with China and how
Speaker 11: he's trying to bring that back through the u of terifs,
Speaker 11: but tariffs as the means to the end of job
Speaker 11: creation and wage growth in the United States. He needs
Speaker 11: more of that and less than the emphasis on the
Speaker 11: word T for tariff.
Speaker 6: Yeah, but let's be honest, that's not working. I mean,
Speaker 6: the average person on the street has no idea what's
Speaker 6: going on in China, doesn't care about China. All that
Speaker 6: person knows is prices at the store are very high.
Speaker 6: And I've got somebody in my ear telling me tariffs
Speaker 6: are the reason. That's a tough political play there.
Speaker 7: It is tough.
Speaker 3: It is tough.
Speaker 11: But what I'm saying is the overwhelmingly the bigger issue
Speaker 11: here for us with national security, with economic security is China,
Speaker 11: and the administration is de emphasize that in anticipation of
Speaker 11: a sit down with She and the hope of getting
Speaker 11: a global tariff regime and a new trading relationship with China.
Speaker 11: So they've been too quiet, and they should be stoking
Speaker 11: the American people about this challenge that we have really
Speaker 11: a generational challenge with I know, and we haven't heard
Speaker 11: of that of that. So therefore the dominant effect is
Speaker 11: that tariffs are affiliar with price increases, which is born
Speaker 11: out in economic data, rather than tariffs being the utility
Speaker 11: to go fight the bad guys.
Speaker 7: And we need to have a little more emphasis on
Speaker 7: fighting the bad guys.
Speaker 3: Congress mccanney, if.
Speaker 7: I'm strategizing for the White House, that's what I'm saying.
Speaker 2: Okay, Congress McCanny. A couple issues here. I know you
Speaker 2: haven't been north of the Mason Dixon line since twenty twelve.
Speaker 2: If you ever get to New York, we would blow
Speaker 2: out like half an hour of the show just to
Speaker 2: talk to you. I have such respect for you what
Speaker 2: you did when you were in your early twenties. And
Speaker 2: the second thing is, if you come up here, you
Speaker 2: got to lose the fleece vest. You got to show
Speaker 2: up with a bow tie. Okay, I mean, it's all there.
Speaker 3: Is to it.
Speaker 7: I'm sorry I don't have the boat's eye on.
Speaker 11: I was much more addressed for radio this morning after
Speaker 11: a late night on the city.
Speaker 2: I'm always dress for radio. Actually my bow tie is
Speaker 2: today as well. Patrick McHenry, he is always of the
Speaker 2: Carolina as a Bloomberg.
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