WEBVTT - Tariff Whiplash Sends Tech Stocks Back into Retreat 0:00:02.520 --> 0:00:09.840 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:09.880 --> 0:00:15.880 where innovation, money and power collide in Silicon Valley and beyond. 0:00:16.040 --> 0:00:45.599 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:35.080 --> 0:00:37.720 Live from New York and San Francisco. This is Bloomberg 0:00:37.800 --> 0:00:40.720 Technology Investors. They are back on edge of the President 0:00:40.760 --> 0:00:44.360 Trump's tariff pause and monster rally yesterday. And this is 0:00:44.360 --> 0:00:47.560 tariff's on China remain in place. Markets now bracing for 0:00:47.600 --> 0:00:51.160 a potentially protracted period of global trade volatility. 0:00:51.320 --> 0:00:52.479 Let's check in on these markets. 0:00:52.600 --> 0:00:55.960 We're currently up over the last two days almost eight percent. 0:00:56.080 --> 0:00:59.760 Remember the euphoria that swept through the markets as tariff 0:00:59.760 --> 0:01:03.760 are put on paus all countries except for China and 0:01:03.880 --> 0:01:06.760 now have a ten percent blanket tariff. But we drop 0:01:06.800 --> 0:01:08.840 again once again today, Ed, and it looks as though 0:01:08.880 --> 0:01:11.679 the anxiety about what China really means the broader markets 0:01:11.800 --> 0:01:12.319 is still there. 0:01:13.120 --> 0:01:16.160 Yeah, let's get some illustrative examples of the company's impacted. 0:01:16.240 --> 0:01:16.399 Right. 0:01:16.440 --> 0:01:20.160 Tesla jumps twenty two percent yesterday. This is a two 0:01:20.240 --> 0:01:23.000 day chart. It's pulled back today, So it goes from 0:01:23.040 --> 0:01:27.200 having its biggest jump since twenty thirteen to pulling back Apple, 0:01:27.360 --> 0:01:30.760 another company impacted, right, switching up the boards and looking 0:01:30.760 --> 0:01:35.120 in Apple ninety day pause on fifty six countries that 0:01:35.280 --> 0:01:39.200 had tariffs implemented, while the administration boosts the tariff level 0:01:39.240 --> 0:01:41.680 on China. Apple so interesting and later in the show 0:01:41.720 --> 0:01:45.120 will dig deep into it. Why that Reuter's report that 0:01:45.160 --> 0:01:49.800 they airlifted tons literally one point five million iPhones from 0:01:49.880 --> 0:01:52.520 India into the US. This is kind of crazy markets 0:01:52.520 --> 0:01:54.160 news cycle and I'm here. 0:01:54.040 --> 0:01:55.520 For it, aren't we? 0:01:55.800 --> 0:01:59.360 Just and President Trump's tariff pause is a welcome relief 0:01:59.520 --> 0:02:01.680 ed but look, investors, our remaining warry of the wider 0:02:01.720 --> 0:02:04.000 economic impacts. So there's one hundred and twenty five percent 0:02:04.040 --> 0:02:07.680 tariff still on China. White House National Economic Council Director, 0:02:07.680 --> 0:02:11.280 that's Kevin Hassett saying there have been well advanced trade 0:02:11.280 --> 0:02:13.160 talks and offers with other nations. 0:02:13.520 --> 0:02:14.720 New Megs Caney lines. 0:02:14.520 --> 0:02:18.520 Breaks it down just the intricacy the ten percent blanket 0:02:18.560 --> 0:02:21.480 tariff on everyone but China, but some get close to 0:02:21.520 --> 0:02:23.960 a deal, it seems yeah. 0:02:24.040 --> 0:02:26.639 According to Kevin Hassett, who was speaking on another network, 0:02:26.639 --> 0:02:29.160 he's the director of the National Economic Council, they've already 0:02:29.160 --> 0:02:32.360 had more than fifteen deals presented to them, and they 0:02:32.400 --> 0:02:35.079 are intending to take these bilaterally one by one. The 0:02:35.200 --> 0:02:37.320 entire trade team, which could include Hassett, but as well 0:02:37.320 --> 0:02:40.480 as Treasury Secretary Scott Besson and Commerce Secretary Howard Lutnick, 0:02:40.720 --> 0:02:44.640 and of course President Trump himself, who admitted yesterday that 0:02:44.680 --> 0:02:47.919 while this is about negotiation, it was also about the market. 0:02:47.919 --> 0:02:50.040 Despite the messaging we initially got from the White House 0:02:50.040 --> 0:02:53.679 Press Secretary and Secretary Bessent that this was always part 0:02:53.680 --> 0:02:55.040 of the plan, this was the art of the deal. 0:02:55.080 --> 0:02:57.840 It's all about negotiations. The President himself admitted he was 0:02:57.880 --> 0:02:59.960 watching the bond market get a little queasy and felt 0:03:00.080 --> 0:03:03.080 that people were getting Yippi, and that contributed to this 0:03:03.200 --> 0:03:05.639 move at least to lower or to pause ninety day 0:03:06.040 --> 0:03:08.800 four ninety days reciprocal tariffs on all countries except China. 0:03:08.880 --> 0:03:10.880 But yes, that ten percent is still in place, and 0:03:10.880 --> 0:03:12.960 that one hundred and twenty five percent levy on China 0:03:14.000 --> 0:03:16.119 in place as well, in addition to the eighty four 0:03:16.160 --> 0:03:19.520 percent reciprocal tariff that China has placed on US imports, 0:03:19.520 --> 0:03:22.880 and that could effectively have the effect of starting a 0:03:22.960 --> 0:03:25.960 decoupling of the two largest economies, which obviously has major 0:03:26.000 --> 0:03:29.720 implications for firms with heavy Chinese exposure, including the technology 0:03:29.720 --> 0:03:31.880 companies that we saw ripping yesterday. As you guys were 0:03:31.919 --> 0:03:33.960 just talking about giving back some of those games today, 0:03:34.000 --> 0:03:36.440 is there is still risk here for a company like 0:03:36.480 --> 0:03:39.280 Apple in Nvidia. And although President Trump said yesterday he 0:03:39.320 --> 0:03:41.600 does think China wants to make a deal, He's expecting 0:03:41.600 --> 0:03:43.680 a phone call from Beijing and would love to talk 0:03:43.720 --> 0:03:46.440 to Shijinping, there has been no sign from shir the 0:03:46.520 --> 0:03:49.800 Chinese government yet that they are interested in making that 0:03:49.920 --> 0:03:53.080 forward progress, suggesting that China does not necessarily want to 0:03:53.120 --> 0:03:55.480 blink first here. Keeping in mind that the idea that 0:03:55.520 --> 0:03:59.240 they're still ongoing conversations over a TikTok divestiture deal as 0:03:59.240 --> 0:04:02.559 an additional piece of leverage and complication to any conversations 0:04:02.560 --> 0:04:03.040 that are had. 0:04:03.760 --> 0:04:05.200 You know, Apple's going to be a big focus in 0:04:05.240 --> 0:04:07.320 the show today because the White House keeps talking about it. 0:04:07.400 --> 0:04:10.480 Yesterday's jump the biggest since nineteen ninety eight. It's this 0:04:10.600 --> 0:04:14.160 crazy times, and India's a focus. I was interested in 0:04:14.200 --> 0:04:16.920 our reporting that Bes listed India as one of the 0:04:17.000 --> 0:04:20.560 nations he'd speak with early on What is the DC reaction? 0:04:20.680 --> 0:04:23.320 Right If you're a Democrat and you're trying to respond 0:04:23.760 --> 0:04:26.279 to the White House tariff policy, what are you hearing? 0:04:27.680 --> 0:04:30.840 Well, Essentially, what Democrats argue is that this is just chaotic, 0:04:30.920 --> 0:04:33.200 that there is so much uncertainty around the policy, and 0:04:33.200 --> 0:04:36.120 then that has the same detrimental impacts of these policies 0:04:36.120 --> 0:04:38.640 staying in place. There was also a lot of concern 0:04:38.640 --> 0:04:41.680 on the part of primarily Democrats yesterday about the potential 0:04:41.720 --> 0:04:45.240 market manipulative effect of President Trump's swings when it comes 0:04:45.360 --> 0:04:47.640 or vacillations when it comes to this policy. Keeping in 0:04:47.640 --> 0:04:49.680 mind that it was yesterday morning he said on true 0:04:49.680 --> 0:04:52.360 Social it was a good time to buy, then hours 0:04:52.400 --> 0:04:55.040 later sparked the biggest rally we've seen since two thousand 0:04:55.040 --> 0:04:57.840 and eight with this decision. In Many including Senator Adam 0:04:57.839 --> 0:05:01.200 Schiff of California, have suggested that this requires an investigation 0:05:01.320 --> 0:05:04.440 into possible insider trading. So that is another narrative we 0:05:04.480 --> 0:05:06.640 are hearing. All of it though, just speaks to the 0:05:06.720 --> 0:05:09.080 uncertainty around this policy. Keeping in mind that while the 0:05:09.120 --> 0:05:12.440 President is now saying that China tariffs are sticking in place, 0:05:12.520 --> 0:05:14.760 that there is a ninety day pause in place for 0:05:14.839 --> 0:05:17.360 other countries. We have seen time and again that he 0:05:17.400 --> 0:05:19.360 does have the power to change his mind to do 0:05:19.440 --> 0:05:23.000 so very quickly. What stands today on Thursday isn't necessarily 0:05:23.240 --> 0:05:26.440 going to stand tomorrow necessarily. And of course we're going 0:05:26.480 --> 0:05:29.599 to have potentially multiple opportunities to hear from the President today. 0:05:29.640 --> 0:05:31.880 He's scheduled to be holding a cabinet meeting right now. 0:05:32.200 --> 0:05:34.640 Signing a bill later presents some opportunities for him to 0:05:34.640 --> 0:05:36.280 speak to the press, and we'll see if he has 0:05:36.320 --> 0:05:38.920 any additional surprising tariff news for US. 0:05:39.600 --> 0:05:41.960 For the most Kaylee Lines in Washington, d C. Thank you 0:05:42.160 --> 0:05:45.400 very much. Another story. Over night, China also announced it 0:05:45.440 --> 0:05:49.720 will quote moderately reduce the number of US movies allowed 0:05:49.720 --> 0:05:52.440 into the country in response to the US government's tariffs. 0:05:52.480 --> 0:05:54.479 The move is seen as a new front in the 0:05:54.520 --> 0:05:58.800 trade war and could signal Beijing's willingness to target American services, 0:05:58.960 --> 0:06:03.800 which could include travel, intellectual property royalties, and transportation care. 0:06:04.320 --> 0:06:08.080 Still so much to digest on the wider tariff implications 0:06:08.080 --> 0:06:08.520 on tech. 0:06:08.880 --> 0:06:09.520 Let's get to it. 0:06:09.640 --> 0:06:12.359 Jay Hatfields with US Infrastructure Capital Management CEO. 0:06:13.200 --> 0:06:15.920 Can you trade in this erratic market? 0:06:17.360 --> 0:06:19.280 You can, but it's very easy to lose a lot 0:06:19.279 --> 0:06:23.000 of money doing so. It's really better for most investors 0:06:23.160 --> 0:06:27.200 to hold their positions, although I will say we have 0:06:27.320 --> 0:06:31.680 been even before the tariff halt, we had said that 0:06:31.720 --> 0:06:34.359 five thousand was a good support level. So now that 0:06:34.400 --> 0:06:37.039 we've kind of bounced off that hard, I think we're 0:06:37.080 --> 0:06:40.839 just neutral on equities right now. But I would counsel 0:06:40.960 --> 0:06:46.159 even HEDGHOM managers to trade cautiously because there's erratic policy 0:06:46.160 --> 0:06:48.560 coming out of the White House. They can announce it 0:06:48.600 --> 0:06:52.320 at one ten in the afternoon, and so it's better 0:06:52.400 --> 0:06:55.800 to just get to your position and kind of hold 0:06:55.839 --> 0:06:56.920 it when. 0:06:56.800 --> 0:07:00.360 You're thinking about potentially the names that you've love and 0:07:00.400 --> 0:07:02.720 want to recommit to. How much are you thinking about 0:07:02.760 --> 0:07:04.239 exposure for China at the moment? 0:07:05.040 --> 0:07:08.640 One hundred percent, I guess, and also to overseas markets, 0:07:08.680 --> 0:07:11.560 so we favor I think you had a guest on 0:07:11.760 --> 0:07:16.240 earlier regional banks. They have no exposure to international They 0:07:16.240 --> 0:07:18.720 do have credit exposure, but we think we have a 0:07:18.760 --> 0:07:22.320 non consensus called economy is pretty strong, and so those 0:07:22.360 --> 0:07:24.800 banks have come down almost as hard as the investment banks. 0:07:24.800 --> 0:07:27.200 But they're not dependent on investment banking. They're really just 0:07:27.240 --> 0:07:31.320 dependent on rates and spreads, So be more conservative in 0:07:31.360 --> 0:07:31.880 this market. 0:07:33.640 --> 0:07:37.440 Jay, I'm just staring at a five day Nasdaq one 0:07:37.480 --> 0:07:41.640 hundred chart, and I'm staring at it because effectively net 0:07:41.640 --> 0:07:45.160 were flat over the course of five trading days. Then 0:07:45.240 --> 0:07:48.160 you think about the drama that we're within those five 0:07:48.200 --> 0:07:53.000 trading days. Do you net understand the tariff policy of 0:07:53.040 --> 0:07:56.160 the White House and are you able to make informed 0:07:56.560 --> 0:07:59.760 markets decisions based on your understanding of that policy? 0:08:01.160 --> 0:08:01.360 Thanks? 0:08:01.480 --> 0:08:04.080 Ed, definitely not. I mean that's really why we're neutral 0:08:04.120 --> 0:08:07.600 on equities. We're actually pretty very constructive on inflation, which 0:08:08.120 --> 0:08:11.880 that view is validated this morning. So we had negative 0:08:12.000 --> 0:08:18.160 headline inflation. And just to mention that too, that everybody 0:08:18.200 --> 0:08:20.240 wants to talk about terroffts, but nobody talks about the 0:08:20.280 --> 0:08:23.960 twenty percent drop and energy. That's very profound, that's very 0:08:24.000 --> 0:08:27.680 stimulative to the US economy. It's very positive for inflation, 0:08:28.640 --> 0:08:33.640 but it never gets mentioned. But to your point about uncertainty, 0:08:33.640 --> 0:08:37.199 there's basically two camps in the White House, the Hawks 0:08:37.600 --> 0:08:40.480 and the doves. Doves are more pro business. You kind 0:08:40.480 --> 0:08:45.680 of saw that when Elon Musk called Navarro a dumb 0:08:45.720 --> 0:08:49.000 bag of bricks, like that's almost unprecedent. I don't think 0:08:49.040 --> 0:08:54.520 that happens in normal organizations where colleagues are highly pejorative. 0:08:54.960 --> 0:08:58.599 So because we don't really know who's gonna win that debates, 0:08:58.720 --> 0:09:02.319 it seems like Bessent't has the Lakes victory. We are, 0:09:02.400 --> 0:09:06.479 like I said, we're neutral on stocks, would be more conservative, 0:09:06.720 --> 0:09:09.280 and also fixed income looks pretty attractive. 0:09:10.760 --> 0:09:15.000 Jay recession calls were pulled on the White House's ninety 0:09:15.040 --> 0:09:20.360 day pause. Should our audience of technology investors, technology employees, founders, 0:09:20.440 --> 0:09:23.680 startup leaders be braced for a recession in your mind? 0:09:24.720 --> 0:09:28.439 Our call is there's no recession but slow growth. But 0:09:28.480 --> 0:09:31.720 the real thing that also people are missing in our 0:09:31.760 --> 0:09:35.600 opinion is that the slowdowns mostly caused by hawkish Federal 0:09:35.600 --> 0:09:39.760 reserve policy and not by tariff policy. As I mentioned, 0:09:40.240 --> 0:09:45.520 energy decline pretty much offsets the tariff increase, So the 0:09:45.559 --> 0:09:49.400 real issue is ultra tight FED policy. We think the 0:09:49.520 --> 0:09:56.439 Fed has a flawed structure policy framework. They're very dangerous 0:09:56.520 --> 0:09:58.760 and there potentially could create a recession. But we do 0:09:58.840 --> 0:10:01.480 think the inflation data is going to be so positive 0:10:01.480 --> 0:10:04.200 they'll be forced to cut rates later in the year. 0:10:04.600 --> 0:10:10.440 I'm really interested in that US economy positivity basically and 0:10:10.480 --> 0:10:12.720 the fact that it means maybe we've got a resilient 0:10:12.800 --> 0:10:15.760 consumer for Apple phones, maybe we've got a resilient consumer 0:10:15.800 --> 0:10:18.640 for Amazon products. Are there any stocks in the tech 0:10:18.679 --> 0:10:21.600 world that you think are worth adding to, not just 0:10:21.679 --> 0:10:22.400 regional banks. 0:10:23.280 --> 0:10:27.200 Absolutely, and this doesn't sound conservative, but we think is 0:10:27.240 --> 0:10:33.679 more conservative. Amazon. They're kind of half Walmart and their 0:10:33.720 --> 0:10:37.440 price and sensitive. They're just passed through entity, and the 0:10:37.480 --> 0:10:40.480 CEO is on this morning saying that AWS demand is 0:10:41.280 --> 0:10:45.120 extremely strong, so they get traded like a tech stock, 0:10:45.120 --> 0:10:48.120 but they're half for retail stock and they're cutting costs. 0:10:48.520 --> 0:10:52.840 So that's, again, like regional banks, pretty defensive. In a 0:10:53.040 --> 0:10:56.760 market that has been destabilized by this white house, they 0:10:56.800 --> 0:10:59.239 can't really sort out who's in charge. 0:10:59.480 --> 0:11:03.200 And you've been putting out his investor and shareholder letter 0:11:03.240 --> 0:11:08.359 today and responding to some of the well current volatility 0:11:08.640 --> 0:11:11.760 than his consumers see. But then push us forward is 0:11:11.800 --> 0:11:14.559 to what your view is on AI and if AWS 0:11:14.600 --> 0:11:17.200 still sees insatiable demand. Many have been trying to work 0:11:17.240 --> 0:11:19.920 out whether the AI bubble that has so inflated this 0:11:20.000 --> 0:11:21.320 market is anyway intact? 0:11:21.400 --> 0:11:21.679 Is it? 0:11:22.400 --> 0:11:26.120 We think so everybody looks at the market and says, oh, well, 0:11:26.160 --> 0:11:28.640 the stocks are way down, so AI must be falling apart, 0:11:28.840 --> 0:11:32.000 they're just high beta stocks. They have two betas, so 0:11:32.040 --> 0:11:34.880 they're twice as volatile as the market. So the market's 0:11:34.920 --> 0:11:36.880 going down, what do you sell. You sell the volatile stuff, 0:11:36.880 --> 0:11:39.480 you sell the investment banks, you sell tech stocks. This 0:11:39.480 --> 0:11:42.480 doesn't mean the AI market has changed, and that's one 0:11:42.520 --> 0:11:46.280 reason though, because we do believe there'll be continued AI spending, 0:11:46.320 --> 0:11:50.640 and Jasse's comments certainly validate that. Really it's investment and 0:11:50.679 --> 0:11:54.840 not consumption that drives recessions. So AI spending is offsetting 0:11:55.880 --> 0:11:59.520 slow housing market and another thing that people haven't Folks 0:11:59.600 --> 0:12:02.880 on have come down fifty basis points. It was disconcerting 0:12:02.960 --> 0:12:06.160 yesterday when they were skyrocketing by the way. I thought 0:12:06.200 --> 0:12:09.400 the market might crash then, But that is helpful. It's 0:12:09.440 --> 0:12:11.920 not going to get the housing market to boom, but stabilize. 0:12:11.960 --> 0:12:14.839 So if you look at investment, you can predict recessions 0:12:14.840 --> 0:12:20.280 pretty well. Stabilizing housing strong tech spending that adds up 0:12:20.320 --> 0:12:24.040 to slow growth. Say you know in that one to 0:12:24.120 --> 0:12:25.280 two percent range. 0:12:27.080 --> 0:12:30.040 J our case study today I think is Apple and 0:12:30.240 --> 0:12:33.400 in the short term they're airlifting iPhone handsets from India 0:12:33.440 --> 0:12:36.400 into the United States. In the long term, the White 0:12:36.400 --> 0:12:39.160 House sees a world in which the iPhone is assembled 0:12:39.280 --> 0:12:43.160 in the United States. Do you see that future being 0:12:43.200 --> 0:12:44.640 achievable for this White House? 0:12:46.760 --> 0:12:50.640 Not really. That's sort of the fundamental flaw of the 0:12:50.920 --> 0:12:55.199 hawkish trade outlook is there's a notion that you can 0:12:55.280 --> 0:12:59.840 have a trade balance with all countries, which is ridiculous 0:13:01.120 --> 0:13:06.480 in the sense that low income countries have low labor, 0:13:06.480 --> 0:13:08.959 they're going to be exporters. That's one way they grow. 0:13:10.800 --> 0:13:12.600 And then the second thing is, if you run a 0:13:12.679 --> 0:13:15.640 gigantic budget deficit, you have to have a trade deficit. 0:13:16.040 --> 0:13:19.840 Financial flows need to equal physical flows. So the first 0:13:19.880 --> 0:13:21.280 thing you need to do if you want to have 0:13:21.400 --> 0:13:27.000 zero trade deficit is lower your budget deficit. So that 0:13:27.120 --> 0:13:30.840 objective is ridiculous. It might have led to the bag 0:13:30.880 --> 0:13:37.600 of bricks comment from Mosque not me, and so that's 0:13:37.679 --> 0:13:40.880 why it's disconcerting to be in this market because one 0:13:40.960 --> 0:13:43.880 side is arguably nutty and the other side is more 0:13:43.880 --> 0:13:45.760 pro business, and we don't know who's going to win. 0:13:46.360 --> 0:13:48.080 Jay At the moment, it looks as of the House 0:13:48.200 --> 0:13:50.880 is going to adopt a plan to advance Trump's tax 0:13:50.920 --> 0:13:54.040 cuts and also the debt ceiling hike. I want to 0:13:54.040 --> 0:13:56.960 get your take on how we can align what many 0:13:56.960 --> 0:13:59.200 had thought would be a tax policy the offset some 0:13:59.240 --> 0:14:01.880 of the volatility of tariffs. If the House can push 0:14:01.960 --> 0:14:04.320 forward and agree one and a half trillion dollars in 0:14:04.440 --> 0:14:06.920 cuts for the budget, is that the right policy right now? 0:14:07.640 --> 0:14:11.040 Absolutely? So that offsets the If we end up with 0:14:11.160 --> 0:14:13.679 sort two percent of GDP, that's about a six hundred 0:14:14.080 --> 0:14:16.920 billion dollar tax increase, So we need to offset that. 0:14:17.400 --> 0:14:20.720 And in fact, that's what the flaw of the initial 0:14:20.760 --> 0:14:24.560 strategy was, is that it just came too fast. You 0:14:24.560 --> 0:14:26.320 could have just said, well, in a year, we'll do this, 0:14:26.400 --> 0:14:28.680 and then you had plenty of time, and so they 0:14:28.720 --> 0:14:32.560 came way before the tax cut, and that's what's destabilizing market. 0:14:32.600 --> 0:14:35.200 And it's just an own goal if you play soccer, 0:14:35.480 --> 0:14:37.920 because they didn't they they didn't need to do that. 0:14:38.000 --> 0:14:40.280 It was just coming out of this Oh good, yeah good. 0:14:41.720 --> 0:14:43.400 I tried that with one of your reporters and they're 0:14:43.480 --> 0:14:47.160 like looked at me, like, what does that mean. I'm 0:14:47.160 --> 0:14:49.160 the biggest soccer fan either, but I know what that is. 0:14:49.440 --> 0:14:53.280 So that's the issue is that timing was horrible. They 0:14:53.280 --> 0:14:56.200 could have gotten the exact same place by just saying 0:14:56.240 --> 0:14:58.080 they're going to do this without doing it right away, 0:14:58.120 --> 0:15:00.480 waiting for the tax cut, waiting for the FED to 0:15:00.520 --> 0:15:03.160 figure out inflation's coming down. So it was just at 0:15:03.200 --> 0:15:06.800 the absolute wrong moment. Also, it wasn't earning season. We 0:15:06.840 --> 0:15:10.040 think earning scenes will calm people down, maybe not get 0:15:10.040 --> 0:15:13.160 the market skyrocket, but when you hear from companies, their 0:15:13.200 --> 0:15:16.240 stocks tend to rally because then you get certainty, even 0:15:16.280 --> 0:15:20.120 if it's not great, like Delta's guidance was highly you know, 0:15:20.440 --> 0:15:25.840 was bad actually, and stock this is before the announcement skyrocketed. 0:15:26.080 --> 0:15:28.840 So we think any news or most news will be 0:15:28.920 --> 0:15:32.560 viewed positively and the earning season will stabilize it. So 0:15:32.640 --> 0:15:36.400 all this tariff news came into absolute terrible time during 0:15:36.440 --> 0:15:40.280 a normally week March. So now not that we're super 0:15:40.280 --> 0:15:43.160 bold up about the market, but we think it'll stabilize 0:15:43.200 --> 0:15:46.240 kind of in this five to six thousand range. It's 0:15:46.280 --> 0:15:50.320 not very stable five to six thousand, but be banging 0:15:50.360 --> 0:15:53.440 around in that range. So we're neutral, not negative. We 0:15:53.440 --> 0:15:56.120 were negative before this policy change. 0:15:56.680 --> 0:15:59.560 Jay Hofield of Infrastructure Capital Management, who I think was 0:15:59.640 --> 0:16:02.880 quite Howard marks on the own goal analogy, thank you 0:16:02.960 --> 0:16:05.160 very much. Now coming out with tariff threats actually helped 0:16:05.240 --> 0:16:09.000 fuel TSMC's AI related growth surge at the start of 0:16:09.040 --> 0:16:23.320 the year. We'll have more next. This is Bloomberg Technology. 0:16:23.080 --> 0:16:25.720 Quick check on the US listed shares of TSMC. 0:16:25.840 --> 0:16:26.600 Their ADRs. 0:16:26.600 --> 0:16:28.120 Look, they're going to be following the road and market 0:16:28.200 --> 0:16:30.120 lower at the moment, off by four point eight percent 0:16:30.160 --> 0:16:33.000 after they rallied hard yesterday. But we've got to keep 0:16:33.000 --> 0:16:36.360 in mind that the company actually posted sales growth forty 0:16:36.440 --> 0:16:39.960 two percent. On of course, AI demand are a head 0:16:40.000 --> 0:16:43.040 of US tariffs. For more, let's bring in Peter Elstrom, 0:16:43.240 --> 0:16:46.280 and what's interesting is the inventory build up is so 0:16:46.480 --> 0:16:47.280 plain to see. 0:16:47.320 --> 0:16:49.800 This is the chip provider for Apple, for Nvidia. 0:16:50.160 --> 0:16:52.840 Right, we don't have all the numbers from TSMC yet. 0:16:52.840 --> 0:16:56.160 All we've gotten is the revenue for this quarter. As 0:16:56.160 --> 0:16:58.000 you say, though it's a forty two percent growth rate, 0:16:58.040 --> 0:17:00.800 it's very very strong. They bumped up revenue to twenty 0:17:00.800 --> 0:17:03.240 five point five billion dollars. So you've got one hundred 0:17:03.360 --> 0:17:06.520 billion dollar run rate company that's growing at forty two percent. 0:17:06.560 --> 0:17:09.120 It's pretty extraordinary. What we don't know what we'll find 0:17:09.119 --> 0:17:11.800 out next week as they report more broadly their earnings, 0:17:11.800 --> 0:17:14.040 we'll get more detail on that. We'll figure out how 0:17:14.119 --> 0:17:17.080 much of this is inventory. As you say, there's probably 0:17:17.119 --> 0:17:20.359 some stockpiling going on right here. To Their biggest customers 0:17:20.359 --> 0:17:24.640 are Apple and Nvidia in particular, they may be accelerating 0:17:24.680 --> 0:17:26.600 some of their purchases to get ahead of some of 0:17:26.640 --> 0:17:29.440 these tariffs so that their customers don't have to pay 0:17:29.520 --> 0:17:32.520 high tariffs as they get into the next few days. 0:17:33.119 --> 0:17:35.159 You know, the data is highly analogous with what we 0:17:35.200 --> 0:17:37.879 saw from PC shipments right front running tariffs thing you 0:17:37.920 --> 0:17:41.480 were coming that short term long term TSMC is pledged 0:17:41.800 --> 0:17:44.920 billions of dollars to build chips in this country. Have 0:17:45.000 --> 0:17:47.480 we learned anything more about that in its progress? 0:17:47.640 --> 0:17:50.440 Well, they didn't say anything at this point, but you're right. 0:17:50.520 --> 0:17:54.280 They had previously pledged in sixty five billion dollars. More 0:17:54.320 --> 0:17:56.280 recently they said they're going to add another one hundred 0:17:56.320 --> 0:17:59.480 billion dollars onto that in US investments. They clearly want 0:17:59.480 --> 0:18:02.800 to make chips in the US, partly to diversify themselves, 0:18:02.840 --> 0:18:05.879 to geopolitically. Partly they'll be able to serve these customers 0:18:06.119 --> 0:18:09.520 like Apple, like in Nvidia, like Tesla more effectively if 0:18:09.520 --> 0:18:11.600 they're able to do it in the US, and they'll 0:18:11.640 --> 0:18:13.479 avoid some of those tariffs if they're going to get 0:18:13.560 --> 0:18:16.480 hit with US Now TSMC doesn't sell that many chips 0:18:16.520 --> 0:18:20.000 directly into the US, but via Apple and via Nvidia 0:18:20.080 --> 0:18:22.320 some of their other customers, they could get hit by 0:18:22.400 --> 0:18:24.720 tariffs that go through their end products. 0:18:25.720 --> 0:18:26.200 Playboys. 0:18:26.200 --> 0:18:29.359 Peter Elstrom, thank you quick look at shares of Apple 0:18:29.640 --> 0:18:33.760 falling after yesterday's massive rally. But there's also reports that 0:18:33.800 --> 0:18:36.720 it shipped about one and a half million iPhones from 0:18:36.760 --> 0:18:38.840 India to the United States in an effort to beat 0:18:38.880 --> 0:18:42.520 President Trump's tariffs es. According to Reuter's ed, is fascinating 0:18:42.560 --> 0:18:46.320 that six hundred tons worth from India. Who knows what 0:18:46.359 --> 0:18:48.160 they were shipping on jumbo jets from China? 0:18:48.280 --> 0:18:51.120 Right right? I did the math. I checked the math. 0:18:51.200 --> 0:18:54.320 Six hundred tons. The average weight of iPhone around seven ounces, 0:18:54.400 --> 0:18:57.120 so with packaging, I think one point five million makes 0:18:57.119 --> 0:18:59.960 sense that short term, long term, the only question is 0:19:00.119 --> 0:19:02.800 can they build the iPhone outside of China and were 0:19:02.880 --> 0:19:05.440 here in the United States? Who knows. Let's get more 0:19:05.480 --> 0:19:08.399 on the fallout of US China tariffs and its impact 0:19:08.480 --> 0:19:11.000 on Apple currently in a million acy president and prison 0:19:11.080 --> 0:19:15.119 analyst that creative strategies joins US. I mean in a 0:19:15.160 --> 0:19:18.000 world where the iPhone's built in America. There are many estimates. 0:19:18.000 --> 0:19:19.960 Bank of America this week said it would be ninety 0:19:20.040 --> 0:19:25.080 percent more expensive. That is an interesting scenario, Carolina. 0:19:26.560 --> 0:19:28.960 Is a very interesting scenario, one that I don't think 0:19:29.040 --> 0:19:31.560 is going to happen anytime soon. I think that Apple 0:19:31.680 --> 0:19:34.880 has other options before coming to the US. And that's 0:19:34.960 --> 0:19:38.359 because unless we are moving part at least of a 0:19:38.359 --> 0:19:41.640 supply chain to the US, is really unreasonable to think 0:19:41.720 --> 0:19:45.880 that Apple can be successfully building iPhones here. So what 0:19:45.960 --> 0:19:50.040 you're seeing with the shipment coming from India is that 0:19:50.680 --> 0:19:53.439 Apple has the opportunity not just to ship, but to 0:19:53.600 --> 0:19:58.640 actually rethink how and where they build iPhones that are 0:19:59.119 --> 0:20:03.119 targeting the US market. So they could shift from China 0:20:03.480 --> 0:20:08.439 to India or other manufacturing facilities to avoid some of 0:20:08.480 --> 0:20:13.640 the harsher targets that China is faced with today. Obviously, 0:20:13.680 --> 0:20:16.080 all of these can change tomorrow or this afternoon. 0:20:16.480 --> 0:20:19.600 What about, of course it can for the margin pressure. 0:20:19.880 --> 0:20:22.240 How much will they suck up some of the margin pressure? 0:20:22.320 --> 0:20:24.440 How much do you think they can pass on to 0:20:24.440 --> 0:20:26.480 a pretty stress consumer here in the US right now? 0:20:27.920 --> 0:20:29.200 There's two aspects of it. 0:20:29.240 --> 0:20:33.080 One is to remember how strong Apple relationship with their 0:20:33.119 --> 0:20:37.240 supplier manufacturer is and so there might be a negotiating 0:20:37.280 --> 0:20:40.600 part there where it's not about just Apple passing on 0:20:40.600 --> 0:20:44.719 to the consumer, but is Apple trading with their supply 0:20:44.840 --> 0:20:49.960 chain to see how best everybody can ride this way. 0:20:50.119 --> 0:20:51.960 Right at the end of the day, you want to 0:20:52.040 --> 0:20:55.120 keep the Apple business with you for the longer time, 0:20:55.520 --> 0:20:57.960 and then when it comes to consumer. I think it's 0:20:57.960 --> 0:21:00.440 a very critical moment for Apple here in the US 0:21:00.560 --> 0:21:04.200 market when it comes to services and Apple Intelligence in particular. 0:21:04.320 --> 0:21:08.480 So they will want the upgrade cycle to continue, and 0:21:08.560 --> 0:21:12.119 they might decide that it's worth sacrifice in some of 0:21:12.160 --> 0:21:14.960 their margins in the short term to then have more 0:21:15.040 --> 0:21:18.840 revenue coming from services and Apple Intelligence longer term. 0:21:18.960 --> 0:21:21.240 The story's hit the terminor just now clarifying that the 0:21:21.240 --> 0:21:23.920 Trump tariffs on China now add up to one hundred 0:21:23.920 --> 0:21:26.800 and forty five percent. You see Apple declines accelerating five percent, 0:21:26.800 --> 0:21:31.439 and as that one hundred pushing even lower an airlift though, 0:21:31.640 --> 0:21:33.280 have you ever seen that in your career? We just 0:21:33.320 --> 0:21:35.080 have thirty seconds, Carolina. 0:21:35.720 --> 0:21:36.240 I had not. 0:21:36.760 --> 0:21:40.399 It's definitely something new, and I think it comes with 0:21:40.560 --> 0:21:42.440 the volatility that we're in right now. 0:21:43.400 --> 0:21:46.520 Carolina Milanesi there with all the expertise and the context 0:21:46.600 --> 0:21:57.560