1 00:00:00,120 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,680 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amrie Hortern. Join us each day 4 00:00:18,760 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,440 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,960 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,319 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:37,640 Speaker 2: Terminal and the Bloomberg Business Apples to Shanada Morgan Stanley 10 00:00:37,720 --> 00:00:40,400 Speaker 2: right in the following. Markets have been extremely active over 11 00:00:40,400 --> 00:00:42,960 Speaker 2: the past month as traders have duced up the already 12 00:00:43,000 --> 00:00:47,160 Speaker 2: a brilliant scenario baited into equity valuations, adding improved odds 13 00:00:47,159 --> 00:00:50,800 Speaker 2: of a Republican sweep to the list of goodies already discounted. 14 00:00:50,960 --> 00:00:53,320 Speaker 2: Lisa joins us, now for more. Lisa, that's quite a quote. 15 00:00:53,360 --> 00:00:54,120 Speaker 2: Good morning to you. 16 00:00:54,240 --> 00:00:54,840 Speaker 3: Good morning. 17 00:00:54,880 --> 00:00:57,120 Speaker 2: Are you suggesting this market's gone a little bit too 18 00:00:57,200 --> 00:00:58,160 Speaker 2: far and things stretched? 19 00:00:59,200 --> 00:01:01,920 Speaker 1: Absolutely? I mean, you know we've been talking about for 20 00:01:01,960 --> 00:01:04,360 Speaker 1: a while that on a valuation basis, this is a 21 00:01:04,520 --> 00:01:11,240 Speaker 1: very expensive market, on very ambitious earnings expectations. Let's just 22 00:01:11,280 --> 00:01:14,680 Speaker 1: take a step back and think about what companies have reported. 23 00:01:15,040 --> 00:01:17,600 Speaker 1: All right, if you look at the twelve month trailing 24 00:01:17,720 --> 00:01:22,360 Speaker 1: earnings for the quarter end of June thirtieth year over 25 00:01:22,440 --> 00:01:25,679 Speaker 1: year s and P five hundred profits, including the MAG seven, 26 00:01:25,720 --> 00:01:28,840 Speaker 1: we're growing at about five percent year over year in 27 00:01:28,880 --> 00:01:31,680 Speaker 1: the quarter so far. What's been reported in the mag 28 00:01:31,720 --> 00:01:33,399 Speaker 1: seven haven't all reported. 29 00:01:33,000 --> 00:01:35,000 Speaker 3: Yet, we're up three percent. 30 00:01:35,400 --> 00:01:38,360 Speaker 1: The expectation for full year twenty twenty four is we're 31 00:01:38,400 --> 00:01:40,360 Speaker 1: going to get to a year over year compare up 32 00:01:40,480 --> 00:01:43,000 Speaker 1: nine to ten percent, and then next year we're going 33 00:01:43,080 --> 00:01:49,320 Speaker 1: to accelerate to fifteen percent. So these are ambitious reacceleration numbers. 34 00:01:50,000 --> 00:01:53,400 Speaker 1: And so you know, when we think about what's baked 35 00:01:53,480 --> 00:01:55,840 Speaker 1: in and why we said there's a lot of goodies here, 36 00:01:56,120 --> 00:01:58,560 Speaker 1: there's a view that we're going to get that reacceleration. 37 00:01:58,800 --> 00:02:02,800 Speaker 1: It's going to be base on margin expansion profit margins 38 00:02:02,800 --> 00:02:05,640 Speaker 1: that are higher, but it's going to be so called immaculate. 39 00:02:05,680 --> 00:02:09,520 Speaker 1: We're not going to cut jobs to get there, which means, 40 00:02:09,880 --> 00:02:13,600 Speaker 1: you know, you've got to get productivity gains. And with 41 00:02:13,800 --> 00:02:16,280 Speaker 1: all of this wonderful news happening, the Fed's going to 42 00:02:16,400 --> 00:02:19,880 Speaker 1: keep cheerleading from the sides and cut you know, twenty 43 00:02:19,880 --> 00:02:24,160 Speaker 1: five BIPs a quarter at least, and so and then 44 00:02:24,200 --> 00:02:27,840 Speaker 1: the you know, the latest is, you know, all goes well, 45 00:02:27,919 --> 00:02:30,080 Speaker 1: we get a red sweep in Washington, there is no 46 00:02:30,160 --> 00:02:32,919 Speaker 1: more regulation, we get goodies like taxes. None that tax 47 00:02:33,000 --> 00:02:36,880 Speaker 1: is a and yeah, and the world is a wonderful place. 48 00:02:37,800 --> 00:02:40,200 Speaker 1: And so I guess you know, from where we sit, 49 00:02:40,360 --> 00:02:43,600 Speaker 1: we just look at risk premiums, and so, you know, 50 00:02:43,639 --> 00:02:46,200 Speaker 1: as Lisa was just talking about the importance of this 51 00:02:46,360 --> 00:02:51,200 Speaker 1: move in the treasury markets, why are stocks shrugging it off? 52 00:02:51,840 --> 00:02:52,160 Speaker 3: Right? 53 00:02:52,240 --> 00:02:54,639 Speaker 1: I mean, typically this kind of move on the long 54 00:02:54,760 --> 00:02:59,280 Speaker 1: end of the curve, particularly as underlying real rates approach 55 00:02:59,360 --> 00:03:03,960 Speaker 1: two percent, which historically has been that obstacle for stock valuations. 56 00:03:04,639 --> 00:03:07,360 Speaker 1: I think it's a bit dangerous for the stock market 57 00:03:07,440 --> 00:03:08,960 Speaker 1: right here to be shrugging this off. 58 00:03:09,000 --> 00:03:10,520 Speaker 3: This is a significant move. 59 00:03:10,919 --> 00:03:14,720 Speaker 1: We've seen moves in the real rate, in inflation expectations, 60 00:03:14,760 --> 00:03:21,560 Speaker 1: in term premiums, in auction performance, and so I'm very 61 00:03:21,919 --> 00:03:24,119 Speaker 1: focused on watching these moves in the yields. 62 00:03:23,919 --> 00:03:25,760 Speaker 4: And the bond auctions, which is the reason why we 63 00:03:25,800 --> 00:03:27,799 Speaker 4: will always welcome you on this show. So there's a 64 00:03:27,880 --> 00:03:31,360 Speaker 4: question here about whether yield's rising for the right reasons 65 00:03:31,360 --> 00:03:33,520 Speaker 4: will actually be supportive to the equity market. And that's 66 00:03:33,520 --> 00:03:35,200 Speaker 4: been an argument that a lot of people have made, 67 00:03:35,200 --> 00:03:36,680 Speaker 4: and we've gone over quite a bit on this show, 68 00:03:36,720 --> 00:03:39,560 Speaker 4: and there's a question of why you think that the 69 00:03:39,640 --> 00:03:41,320 Speaker 4: yield rise that we're seeing right now is for the 70 00:03:41,360 --> 00:03:43,680 Speaker 4: wrong reasons, or if it doesn't matter. It has reached 71 00:03:43,680 --> 00:03:45,800 Speaker 4: it has breached that threshold where it needs to be 72 00:03:45,880 --> 00:03:48,760 Speaker 4: something that stock investors start to pay attention to. 73 00:03:49,280 --> 00:03:51,839 Speaker 1: Look, I think that the bond market has this right. 74 00:03:52,040 --> 00:03:55,200 Speaker 3: I do think real growth has been better. I do. 75 00:03:55,320 --> 00:03:59,400 Speaker 1: I am in the camp that says inflation expectations and 76 00:03:59,440 --> 00:04:03,680 Speaker 1: the potential for an inflation boomerang next year is actually rising, 77 00:04:04,240 --> 00:04:07,240 Speaker 1: especially if you bake in the part of the story 78 00:04:07,600 --> 00:04:08,600 Speaker 1: about a red sweep. 79 00:04:08,680 --> 00:04:10,720 Speaker 3: You don't get the red sweep with again all the. 80 00:04:10,720 --> 00:04:13,960 Speaker 1: Goodies but none of the collateral damage, which as we know, 81 00:04:14,520 --> 00:04:18,400 Speaker 1: you know, tariffs and closed borders could be inflationary. So, 82 00:04:18,920 --> 00:04:21,599 Speaker 1: you know, I do think that the bond market is 83 00:04:21,640 --> 00:04:25,479 Speaker 1: anchoring on you know, some hypotheses that's very anchored in 84 00:04:25,520 --> 00:04:28,520 Speaker 1: the data. And I do think that the stock market 85 00:04:28,560 --> 00:04:30,120 Speaker 1: is going to have to wake up and pay attention 86 00:04:30,200 --> 00:04:30,839 Speaker 1: at some point. 87 00:04:31,000 --> 00:04:32,200 Speaker 5: So what do you do with that? 88 00:04:32,320 --> 00:04:33,800 Speaker 4: I mean, you just sort of go into gold and 89 00:04:33,800 --> 00:04:35,359 Speaker 4: go into a bunker and hope for the best. 90 00:04:35,680 --> 00:04:38,560 Speaker 1: So what we're what we're doing is we're really focusing 91 00:04:38,640 --> 00:04:43,479 Speaker 1: on value and diversification. We're saying, valuation in this market matters. 92 00:04:44,240 --> 00:04:46,560 Speaker 1: So we're playing in the parts of the stock market 93 00:04:46,600 --> 00:04:50,159 Speaker 1: that are somewhat you know, cheaper, quite frankly, and so 94 00:04:50,240 --> 00:04:54,880 Speaker 1: that has included some of the value Codhord, It's included financials, 95 00:04:54,920 --> 00:04:58,360 Speaker 1: it's included a handful of industrial as a handful of 96 00:04:58,520 --> 00:05:02,400 Speaker 1: healthcare stocks. And that's really been our approach is to say, 97 00:05:02,440 --> 00:05:05,239 Speaker 1: let's even it out, let's not take very big bets 98 00:05:06,160 --> 00:05:08,359 Speaker 1: here and and aim. 99 00:05:08,200 --> 00:05:11,360 Speaker 4: For some diversification. Financials is a trump bet. And yet 100 00:05:11,400 --> 00:05:13,240 Speaker 4: you're saying it's actually a very different bet. 101 00:05:13,440 --> 00:05:16,760 Speaker 1: I thank you for pointing that out. Yeah, our preference 102 00:05:16,800 --> 00:05:20,760 Speaker 1: for for financials is not premised, uh necessarily on some 103 00:05:20,880 --> 00:05:25,400 Speaker 1: big deregulatory push. We think you know that that basil 104 00:05:25,480 --> 00:05:31,600 Speaker 1: two endgame easing of those capital requirements is going to 105 00:05:31,640 --> 00:05:35,039 Speaker 1: happen regardless. We think that that's already you know, kind 106 00:05:35,040 --> 00:05:35,560 Speaker 1: of been. 107 00:05:35,440 --> 00:05:36,760 Speaker 3: Signaled by regulators. 108 00:05:37,440 --> 00:05:40,359 Speaker 1: What cas Us excited about financials is not just the 109 00:05:40,360 --> 00:05:43,440 Speaker 1: potential for cost cutting and operating leverage, but the capital 110 00:05:43,480 --> 00:05:46,560 Speaker 1: markets activity really looks like it's going to come back 111 00:05:47,200 --> 00:05:51,200 Speaker 1: over the next two years, as you know, financial sponsors 112 00:05:51,200 --> 00:05:54,200 Speaker 1: and the private equity guys finally get off the sidelines 113 00:05:54,240 --> 00:05:57,680 Speaker 1: with these kind of market valuations and start transacting and 114 00:05:57,720 --> 00:05:58,400 Speaker 1: doing deals. 115 00:05:58,640 --> 00:05:59,640 Speaker 3: Lisa, what the red sweep. 116 00:05:59,640 --> 00:06:01,919 Speaker 6: You get the goodies along with some of the potentially 117 00:06:01,960 --> 00:06:04,159 Speaker 6: the bad things that can hurt the financial markets. 118 00:06:04,160 --> 00:06:06,200 Speaker 3: But what if it's not. What if the. 119 00:06:06,040 --> 00:06:10,200 Speaker 6: Polling and the betting markets are underestimating the support Kamala 120 00:06:10,200 --> 00:06:13,080 Speaker 6: Harris and some of these democrats have with issues like abortion, 121 00:06:14,080 --> 00:06:16,080 Speaker 6: How are you going to think about the next few years. 122 00:06:16,600 --> 00:06:18,800 Speaker 1: Yeah, so, look, I think that there's you know, a 123 00:06:18,960 --> 00:06:22,920 Speaker 1: Harris when at this point, I do think markets would 124 00:06:22,960 --> 00:06:23,640 Speaker 1: be surprised. 125 00:06:23,640 --> 00:06:24,360 Speaker 3: I do think we. 126 00:06:24,400 --> 00:06:29,159 Speaker 1: Got somewhere between you know, two and five percent pullback 127 00:06:30,279 --> 00:06:32,560 Speaker 1: on that because I do think that there's been you know, 128 00:06:32,600 --> 00:06:34,720 Speaker 1: some pretty big rotation. But I think you get a 129 00:06:34,800 --> 00:06:38,839 Speaker 1: lot of status quo type moves, right. I think we 130 00:06:39,000 --> 00:06:42,640 Speaker 1: continue to get a continuation of the fiscal stimulus programs 131 00:06:43,400 --> 00:06:47,320 Speaker 1: that we saw under the Biden administration. But we you know, 132 00:06:47,440 --> 00:06:51,520 Speaker 1: we don't get necessarily, you know, some of the issues 133 00:06:51,760 --> 00:06:55,000 Speaker 1: and the inflation threats. So we continue maybe on this 134 00:06:55,320 --> 00:07:00,000 Speaker 1: soft landing trajectory as opposed to this no landing trajectory. 135 00:07:00,040 --> 00:07:02,719 Speaker 1: So I think the bond market comes back in as well. 136 00:07:02,800 --> 00:07:04,640 Speaker 3: But oh so you think the bond market. I think 137 00:07:04,720 --> 00:07:05,719 Speaker 3: yields come back in. 138 00:07:06,000 --> 00:07:07,600 Speaker 6: And that's all about fiscal spending. 139 00:07:08,040 --> 00:07:12,080 Speaker 1: Yeah, I do because because her plans if you actually, 140 00:07:12,240 --> 00:07:14,840 Speaker 1: you know, do the analysis, and our team has done it. 141 00:07:15,880 --> 00:07:19,360 Speaker 1: Fiscal deficits under her current plan to be are going 142 00:07:19,400 --> 00:07:22,200 Speaker 1: to run about half what he's proposed so far. 143 00:07:22,960 --> 00:07:24,680 Speaker 2: So hard to game this out if you think about 144 00:07:24,720 --> 00:07:27,000 Speaker 2: twenty sixteen, and we always go back to this. Trump 145 00:07:27,040 --> 00:07:29,240 Speaker 2: was parished for markets. Yeah, up until the night of 146 00:07:29,280 --> 00:07:31,040 Speaker 2: the election, and then we woke up two, three, four 147 00:07:31,040 --> 00:07:32,320 Speaker 2: am in the morning and all of a sudden it 148 00:07:32,360 --> 00:07:35,040 Speaker 2: was bullish right to twenty twenty. Throw the scenarios out 149 00:07:35,080 --> 00:07:37,600 Speaker 2: the window. We got the vaccine FC data in November 150 00:07:37,720 --> 00:07:40,080 Speaker 2: twenty twenty. Everyone seems to forgotten about that. It had 151 00:07:40,120 --> 00:07:42,320 Speaker 2: nothing to do with the election. That's all the markets 152 00:07:42,360 --> 00:07:44,000 Speaker 2: Lisa absolutely rip that month. 153 00:07:44,120 --> 00:07:45,760 Speaker 4: Yeah, So here's the question, how much is it the 154 00:07:45,760 --> 00:07:48,720 Speaker 4: setup going in versus the actual candidate themselves and this 155 00:07:48,840 --> 00:07:51,520 Speaker 4: time around, and we've talked about this. If he can 156 00:07:51,600 --> 00:07:54,400 Speaker 4: implement the tariffs but he can't get rid of some 157 00:07:54,480 --> 00:07:58,200 Speaker 4: of the regulations and the taxes unilaterally in the same speed, 158 00:07:58,400 --> 00:08:01,720 Speaker 4: does that change that dissonance the reaction function of markets. 159 00:08:01,800 --> 00:08:03,480 Speaker 5: Lisa, this was a clinic. It's good to see you. 160 00:08:03,520 --> 00:08:05,680 Speaker 2: I appreciate it as a thank you for coming in, Lisa. 161 00:08:05,680 --> 00:08:17,080 Speaker 2: Shan At there of Morgan Stanley, John. 162 00:08:17,000 --> 00:08:18,760 Speaker 5: Leeper, if you write your group joins us. 163 00:08:18,800 --> 00:08:21,560 Speaker 2: Now, John, let's just start with the Harris campaign accusing 164 00:08:21,800 --> 00:08:24,640 Speaker 2: the former present of being a fascist during parallels with 165 00:08:25,000 --> 00:08:27,920 Speaker 2: Nazi rallies of decades ago. When you look at the polls, 166 00:08:28,160 --> 00:08:30,160 Speaker 2: when you look at where things around a week away 167 00:08:30,160 --> 00:08:32,480 Speaker 2: from the election, is any of it landing. 168 00:08:34,440 --> 00:08:36,320 Speaker 7: No, it doesn't seem like it. I mean, nothing's moved 169 00:08:36,320 --> 00:08:38,439 Speaker 7: in this race except for one big event, which was 170 00:08:38,520 --> 00:08:42,040 Speaker 7: Joe Biden dropping out. Otherwise it's been pretty steady. You 171 00:08:42,200 --> 00:08:46,960 Speaker 7: have seen some movements among subgroups, particularly independent voters, which 172 00:08:47,000 --> 00:08:49,960 Speaker 7: were shifting towards Harris and now moving back towards Trump. 173 00:08:50,320 --> 00:08:52,000 Speaker 7: But you look at kind of any of the big 174 00:08:52,080 --> 00:08:57,280 Speaker 7: set pieces of the campaign, the DNC, the RNC, even 175 00:08:57,280 --> 00:09:01,719 Speaker 7: Trump's assassination event attempt. You weren't seeing big movements, and 176 00:09:01,760 --> 00:09:03,920 Speaker 7: you're not really seeing them in the closing days. In fact, 177 00:09:04,000 --> 00:09:07,040 Speaker 7: one of the big markers of this campaign has been 178 00:09:07,080 --> 00:09:10,240 Speaker 7: how incredibly steady it is and how most people's views 179 00:09:10,240 --> 00:09:13,040 Speaker 7: of both of these candidates are totally baked. 180 00:09:12,720 --> 00:09:13,960 Speaker 4: In, you know, and John I was thinking a lot 181 00:09:14,000 --> 00:09:15,680 Speaker 4: about this last night, how a lot of this is 182 00:09:15,720 --> 00:09:17,480 Speaker 4: cultural works kind of coming to the Ford. It's the 183 00:09:17,480 --> 00:09:20,280 Speaker 4: reason why we're seeing a massive gender gap. And on 184 00:09:20,280 --> 00:09:23,960 Speaker 4: one side you have the preeminence of cancel culture and 185 00:09:24,000 --> 00:09:28,640 Speaker 4: sort of people who are really looking for potential issues, 186 00:09:28,640 --> 00:09:30,560 Speaker 4: and you have other people who say anything and it 187 00:09:30,559 --> 00:09:31,520 Speaker 4: doesn't really register. 188 00:09:31,960 --> 00:09:33,280 Speaker 3: That's why I think it's notable. 189 00:09:33,640 --> 00:09:37,760 Speaker 4: Has this incident at masis the Square Garden broken through 190 00:09:37,880 --> 00:09:41,440 Speaker 4: in a way that some of these other comments really haven't. 191 00:09:41,800 --> 00:09:43,520 Speaker 7: Well. I think the risk is that it's a really 192 00:09:43,559 --> 00:09:46,600 Speaker 7: close election and you've got about half a million Hispanic 193 00:09:46,679 --> 00:09:49,560 Speaker 7: voters in Pennsylvania, many of whom are from Puerto Rican origin, 194 00:09:50,040 --> 00:09:52,920 Speaker 7: so it's entirely possible that it doesn't take a big 195 00:09:52,960 --> 00:09:55,840 Speaker 7: movement in the polls or even a big event that's 196 00:09:55,880 --> 00:09:57,800 Speaker 7: going to be the thing that decides this election. I mean, 197 00:09:57,840 --> 00:10:00,960 Speaker 7: it would be extremely ironic if it were a unfunny 198 00:10:01,000 --> 00:10:03,920 Speaker 7: joke from a no name comedian and an unnecessary rally 199 00:10:03,920 --> 00:10:06,480 Speaker 7: in Manhattan that ended up costing the Trump this election. 200 00:10:06,760 --> 00:10:09,640 Speaker 7: But an election where the two candidates are going to 201 00:10:09,640 --> 00:10:12,600 Speaker 7: be separated by as few as ten or twenty thousand votes, 202 00:10:12,760 --> 00:10:16,280 Speaker 7: that is completely plausible in this election cycle, which is 203 00:10:16,320 --> 00:10:19,760 Speaker 7: why these Puerto Rico comments and the other comments from 204 00:10:19,840 --> 00:10:22,839 Speaker 7: the Manhattan rally are resonating so much. And has Trump 205 00:10:22,840 --> 00:10:24,000 Speaker 7: trying to do damage control? 206 00:10:24,360 --> 00:10:26,200 Speaker 4: John, what do you make given how close this is 207 00:10:26,440 --> 00:10:28,920 Speaker 4: of the fires for the ballot boxes that we saw 208 00:10:28,920 --> 00:10:32,640 Speaker 4: in Washington State, some of the supposedly only one hundred 209 00:10:32,720 --> 00:10:35,560 Speaker 4: or a couple of hundred different ballots were destroyed. But 210 00:10:35,640 --> 00:10:38,640 Speaker 4: how much is there that risk going forward of this 211 00:10:38,760 --> 00:10:40,240 Speaker 4: type of activity increasingly? 212 00:10:40,760 --> 00:10:42,440 Speaker 7: Yeah, I think there's a lot of risk of that. 213 00:10:42,480 --> 00:10:44,880 Speaker 7: And you have to acknowledge that the Republicans have been 214 00:10:44,880 --> 00:10:47,439 Speaker 7: convincing themselves for the last four years that the election 215 00:10:47,640 --> 00:10:50,160 Speaker 7: was stolen, and in doing so, have basically studied some 216 00:10:50,200 --> 00:10:52,160 Speaker 7: good techniques of how to try to steal an election. 217 00:10:52,559 --> 00:10:54,559 Speaker 7: So I think that's a big factory. I mean, I 218 00:10:54,559 --> 00:10:56,280 Speaker 7: don't think it's a big going to end up being 219 00:10:56,320 --> 00:10:58,679 Speaker 7: a big factory here. But the thing that I think 220 00:10:58,679 --> 00:11:00,960 Speaker 7: we should keep our eye on are is people's trust 221 00:11:01,200 --> 00:11:03,000 Speaker 7: in the system. So one of the problems we're trying 222 00:11:03,000 --> 00:11:05,600 Speaker 7: to tampering we're trying to tamper with the ballot box 223 00:11:05,840 --> 00:11:08,360 Speaker 7: is you don't know whose ballots you're burning, so you 224 00:11:08,400 --> 00:11:12,319 Speaker 7: can target different neighborhoods and have you know, try to 225 00:11:12,360 --> 00:11:14,520 Speaker 7: go after different demographic groups who you think are have 226 00:11:14,559 --> 00:11:17,120 Speaker 7: a higher propensity to vote one way or the other. 227 00:11:17,360 --> 00:11:19,920 Speaker 7: I mean, Washington State is not going to vote for Trump, 228 00:11:19,960 --> 00:11:23,400 Speaker 7: we know that, but you know, I do think that 229 00:11:23,440 --> 00:11:25,200 Speaker 7: this is going to be an issue where people lose 230 00:11:25,240 --> 00:11:28,800 Speaker 7: faith in the process if they see that proper safeguards 231 00:11:28,840 --> 00:11:31,480 Speaker 7: aren't in place to protect the sanctity of every single 232 00:11:31,480 --> 00:11:34,720 Speaker 7: person's ballots, and that long term, has a really negative 233 00:11:34,720 --> 00:11:37,280 Speaker 7: effect on people's belief in the fairness of the system. 234 00:11:37,480 --> 00:11:40,240 Speaker 7: And it's how you get a majority of Republicans believing 235 00:11:40,280 --> 00:11:42,199 Speaker 7: the last election was stolen. And I think that's a 236 00:11:42,280 --> 00:11:44,040 Speaker 7: very dangerous and disturbing trend. 237 00:11:44,200 --> 00:11:46,080 Speaker 6: Washington State's not going to vote for Trump, but where 238 00:11:46,080 --> 00:11:48,760 Speaker 6: this ballot box was. It's in a congressional district where 239 00:11:48,800 --> 00:11:51,800 Speaker 6: the Democrat incumbent is facing a very tough challenge from 240 00:11:51,840 --> 00:11:55,320 Speaker 6: Republican Just when you look at the map, John right now, 241 00:11:55,400 --> 00:11:58,080 Speaker 6: the Harris campaign thinks they can hold the blue Wall. 242 00:11:58,080 --> 00:12:01,160 Speaker 6: The Trump camp they thinks they can at least take 243 00:12:01,320 --> 00:12:04,199 Speaker 6: one of those states. When you look at Wisconsin, Michigan, 244 00:12:04,200 --> 00:12:07,160 Speaker 6: and Pennsylvania, which one is most ripe to flip? 245 00:12:08,320 --> 00:12:10,079 Speaker 7: I think, to me, it looks like Harris is the 246 00:12:10,080 --> 00:12:13,600 Speaker 7: weakest in Michigan. She's got big problems with Arab American voters, 247 00:12:13,679 --> 00:12:16,120 Speaker 7: and she's been a little bit weaker with white voters 248 00:12:16,120 --> 00:12:19,160 Speaker 7: than she's been in other places. And so I think 249 00:12:19,160 --> 00:12:21,080 Speaker 7: that's the place where the Trump team had things They 250 00:12:21,120 --> 00:12:24,560 Speaker 7: have probably the best opportunity. Pennsylvania is obviously the biggest 251 00:12:24,600 --> 00:12:26,800 Speaker 7: and most important state and the one that is very 252 00:12:26,920 --> 00:12:30,080 Speaker 7: very close in the polls. Wisconsin seems like it's shaded 253 00:12:30,120 --> 00:12:31,920 Speaker 7: a little bit towards Harris. So if I had to 254 00:12:32,000 --> 00:12:33,720 Speaker 7: choose one, I would say Michigan is going to be 255 00:12:33,960 --> 00:12:35,600 Speaker 7: the big battleground in this election. 256 00:12:36,000 --> 00:12:36,560 Speaker 3: It's easy. 257 00:12:36,800 --> 00:12:40,719 Speaker 6: It's interesting you chose Michigan because in Wisconsin and Pennsylvania, 258 00:12:40,920 --> 00:12:43,199 Speaker 6: those are the two Senate races that are now looking 259 00:12:43,240 --> 00:12:46,480 Speaker 6: more like coin tosses when they were leaning Democrat. Do 260 00:12:46,559 --> 00:12:49,360 Speaker 6: you think those Senate races could go red but the 261 00:12:49,400 --> 00:12:51,760 Speaker 6: top of the ticket and those states go blue. 262 00:12:52,160 --> 00:12:53,760 Speaker 7: Yeah again, I mean, it doesn't take much in this 263 00:12:53,880 --> 00:12:57,880 Speaker 7: cycle for you don't need a lot of split ticket 264 00:12:57,960 --> 00:13:00,120 Speaker 7: voters for something like that to happen. I think all 265 00:13:00,160 --> 00:13:05,360 Speaker 7: three of those races are competitive. In Wisconsin, Baldwin and 266 00:13:05,559 --> 00:13:09,760 Speaker 7: in Pennsylvania, Casey has the benefit of being incumbents, and 267 00:13:09,920 --> 00:13:13,920 Speaker 7: incumbency brings high name recognition and that does help incumbents 268 00:13:14,280 --> 00:13:18,040 Speaker 7: survive even very good challengers in a decent year for 269 00:13:18,080 --> 00:13:18,760 Speaker 7: the out party. 270 00:13:19,000 --> 00:13:20,960 Speaker 2: Hey Jump, good to get your thoughts. As always. John 271 00:13:21,040 --> 00:13:34,120 Speaker 2: Leber there of Jurasia Group The Cook Political Report, writing 272 00:13:34,160 --> 00:13:38,240 Speaker 2: Trump's closing argument his campaign says is this Harris broke it. 273 00:13:38,440 --> 00:13:41,559 Speaker 2: Trump will fix it. And yet even with all these advantages, 274 00:13:41,800 --> 00:13:44,480 Speaker 2: the race remains locked in a dead heat. The reason 275 00:13:44,480 --> 00:13:47,679 Speaker 2: for this, of course, is Trump himself. The Cook Political Reports. 276 00:13:47,760 --> 00:13:49,640 Speaker 2: Jessica tay That joins us now for more. Jessica, welcome 277 00:13:49,640 --> 00:13:50,200 Speaker 2: to the program. 278 00:13:50,240 --> 00:13:50,480 Speaker 3: Thank you. 279 00:13:50,600 --> 00:13:51,960 Speaker 2: I was good to see you in person. There is 280 00:13:52,000 --> 00:13:54,000 Speaker 2: this stat in your research, and I'm going to share 281 00:13:54,000 --> 00:13:57,440 Speaker 2: it with our audience. There is no Trump policy that 282 00:13:57,480 --> 00:13:59,840 Speaker 2: comes without his polarizing behavior, style and approach. And this 283 00:14:00,120 --> 00:14:03,480 Speaker 2: timber Coook Political Reports, Swing State Project poll just thirty 284 00:14:03,520 --> 00:14:06,520 Speaker 2: four percent of voters that they like Trump's policies and 285 00:14:06,640 --> 00:14:07,720 Speaker 2: his leadership style. 286 00:14:08,000 --> 00:14:10,280 Speaker 5: How much of a problem is that for the former president. 287 00:14:10,400 --> 00:14:11,760 Speaker 8: I mean, I think that if this was sort of 288 00:14:11,800 --> 00:14:14,480 Speaker 8: a generic Republican, this race would probably be over. It's 289 00:14:14,559 --> 00:14:16,600 Speaker 8: voters have to make a choice of Okay, you liked 290 00:14:16,640 --> 00:14:19,440 Speaker 8: where the economy was under Trump, but you get all 291 00:14:19,480 --> 00:14:21,680 Speaker 8: of these other all of the rest of this baggage 292 00:14:21,680 --> 00:14:23,800 Speaker 8: that comes with him. So that's where we're seeing Harris's 293 00:14:23,800 --> 00:14:28,400 Speaker 8: closing message. You know, he's he's an authoritarian, he's a fascist. 294 00:14:28,440 --> 00:14:30,840 Speaker 8: This is the chaos trying to remind them of people, 295 00:14:31,080 --> 00:14:32,680 Speaker 8: and I think some of the things that came out 296 00:14:32,680 --> 00:14:35,840 Speaker 8: of that, you know, Madison Square Garden rally, he's he's 297 00:14:35,880 --> 00:14:36,840 Speaker 8: having to answer for them. 298 00:14:36,880 --> 00:14:37,120 Speaker 3: Today. 299 00:14:37,120 --> 00:14:40,200 Speaker 8: He's going to Pennsylvania, Allentown, where there's a large Puerto 300 00:14:40,280 --> 00:14:44,280 Speaker 8: Rican Hispanic population, and that is now the story in 301 00:14:44,320 --> 00:14:48,160 Speaker 8: this final week before before the race. It's not focusing on, 302 00:14:48,520 --> 00:14:50,600 Speaker 8: you know, how he would be a change. He's trying 303 00:14:50,600 --> 00:14:52,000 Speaker 8: to make it a focus on how he would be 304 00:14:52,040 --> 00:14:56,800 Speaker 8: a change from a Biden Harris administration. But Harris and 305 00:14:56,960 --> 00:14:59,360 Speaker 8: Democrats are arguing, yes, but he was a change, and 306 00:14:59,480 --> 00:15:01,080 Speaker 8: you're going to get all of this chaos, You're going 307 00:15:01,120 --> 00:15:03,360 Speaker 8: to get all of this sort of insanity back again. 308 00:15:03,560 --> 00:15:05,600 Speaker 6: Just are you seeing anything in the polls that Trump 309 00:15:05,680 --> 00:15:08,200 Speaker 6: is going to be able to go past that ceiling 310 00:15:08,400 --> 00:15:09,880 Speaker 6: that he's basically been capped at. 311 00:15:10,040 --> 00:15:11,920 Speaker 8: Yeah, this is the real question, and this is why, 312 00:15:12,000 --> 00:15:14,160 Speaker 8: you know, I think the polls. I think that's the 313 00:15:14,160 --> 00:15:15,400 Speaker 8: thing at the back of our head is that the 314 00:15:15,400 --> 00:15:17,320 Speaker 8: Poles were wrong in twenty sixteen, they were wrong in 315 00:15:17,320 --> 00:15:20,000 Speaker 8: twenty twenty, but like they're still capturing about where he 316 00:15:20,080 --> 00:15:22,440 Speaker 8: was at. They sorted this forty seven forty eight percent, 317 00:15:22,720 --> 00:15:24,640 Speaker 8: and that's what we haven't seen. We really haven't seen 318 00:15:24,680 --> 00:15:26,720 Speaker 8: him grow his coalition. So the question is, I think 319 00:15:26,720 --> 00:15:28,840 Speaker 8: with these undecided voters, did they sort of go over 320 00:15:28,880 --> 00:15:30,960 Speaker 8: to him, did they stay home? Does Hairs get them 321 00:15:30,960 --> 00:15:33,520 Speaker 8: in her coalition? I think that's the real question as 322 00:15:33,560 --> 00:15:35,680 Speaker 8: we're looking at some of this swing state polling that's 323 00:15:35,720 --> 00:15:36,840 Speaker 8: just very deadlocked, and. 324 00:15:36,840 --> 00:15:39,760 Speaker 6: Cook Political Report now has it as a toss up race. 325 00:15:39,800 --> 00:15:42,440 Speaker 8: For presidential Yes, all of the seven swing states we 326 00:15:42,840 --> 00:15:45,080 Speaker 8: rate his toss up, so it is as close as 327 00:15:45,080 --> 00:15:46,920 Speaker 8: it can be out. I mean, the poles I continue 328 00:15:46,960 --> 00:15:48,840 Speaker 8: to see out, private and public. 329 00:15:48,800 --> 00:15:51,280 Speaker 3: All are within just one or two points. Basically. 330 00:15:51,400 --> 00:15:54,360 Speaker 6: The financial markets, though, are pricing in a red sweep. 331 00:15:54,520 --> 00:15:56,480 Speaker 6: Part of that has to do with the Senate map, 332 00:15:56,680 --> 00:16:00,480 Speaker 6: and you've done some great work on actually senators are 333 00:16:00,640 --> 00:16:04,440 Speaker 6: defending seats Democrats in Wisconsin, in Pennsylvania but actually might 334 00:16:04,480 --> 00:16:05,160 Speaker 6: be toss ups. 335 00:16:05,320 --> 00:16:07,840 Speaker 8: What does the map look like today? The map is 336 00:16:07,960 --> 00:16:10,400 Speaker 8: favoring Republicans. And that's why if we're looking at a 337 00:16:10,480 --> 00:16:14,840 Speaker 8: Republican trifecta that's more most likely to flip has always 338 00:16:14,840 --> 00:16:17,440 Speaker 8: been the Senate. That's because Democrats have a fifty one 339 00:16:17,440 --> 00:16:19,360 Speaker 8: to forty nine majority, but they're already we already know 340 00:16:19,400 --> 00:16:21,960 Speaker 8: they're going to lose West Virginia. John Tester in Montana 341 00:16:22,320 --> 00:16:24,400 Speaker 8: is the underdogs. So that gets you to fifty one 342 00:16:24,560 --> 00:16:27,520 Speaker 8: for Republicans. Right then, then the question is, as you mentioned, 343 00:16:27,560 --> 00:16:29,640 Speaker 8: the races that we've seen tighten up in the past 344 00:16:29,680 --> 00:16:30,320 Speaker 8: few weeks have. 345 00:16:30,280 --> 00:16:32,600 Speaker 3: Been those blue wall states. Wisconsin. 346 00:16:32,920 --> 00:16:35,680 Speaker 8: Ohio is the next, probably with shared Brown that's still 347 00:16:35,720 --> 00:16:38,080 Speaker 8: a very difficult state and a state that Trump won 348 00:16:38,120 --> 00:16:40,760 Speaker 8: by eight points. But I'm seeing tightening polls in Wisconsin 349 00:16:40,840 --> 00:16:44,280 Speaker 8: with Tammy Baldwin and Eric Covevey there. In Pennsylvania, that's 350 00:16:44,320 --> 00:16:46,440 Speaker 8: the race that we moved last weekend to toss up 351 00:16:46,720 --> 00:16:51,560 Speaker 8: with Bob Casey and David McCormick there. Michigan still remains closer. 352 00:16:51,800 --> 00:16:54,640 Speaker 8: I would probably still rather be a slightly Ilissa Slotkin 353 00:16:54,680 --> 00:16:58,000 Speaker 8: in that instance, but they're all very close. 354 00:16:58,240 --> 00:16:59,920 Speaker 3: We've seen those races just close. 355 00:17:00,040 --> 00:17:02,600 Speaker 8: So I think as the presidential race goes, probably the 356 00:17:02,760 --> 00:17:06,000 Speaker 8: Senate races go Because in twenty sixteen, every single Senate 357 00:17:06,080 --> 00:17:07,840 Speaker 8: race went the same way as the presidential race. In 358 00:17:07,880 --> 00:17:10,920 Speaker 8: twenty twenty, only Susan Collins managed to win, even as 359 00:17:10,920 --> 00:17:13,320 Speaker 8: Biden carried her state. So I think we're seeing a 360 00:17:13,359 --> 00:17:15,760 Speaker 8: delta of just a couple of points. I think we 361 00:17:15,800 --> 00:17:18,800 Speaker 8: could see split tickets in Arizona, for instance, where Trump 362 00:17:18,920 --> 00:17:23,200 Speaker 8: is favored there but the Democrat Ruben geyego is so well, how. 363 00:17:23,240 --> 00:17:25,360 Speaker 4: Can you just walk us through what a red wave 364 00:17:25,400 --> 00:17:27,560 Speaker 4: looks like, what a red sweep looks like. Given the 365 00:17:27,560 --> 00:17:30,760 Speaker 4: fact that not all Republicans are the same, not all 366 00:17:30,800 --> 00:17:33,000 Speaker 4: Democrats are the same, how much are we looking at 367 00:17:33,000 --> 00:17:36,199 Speaker 4: Trump truly having a clutch over the Republican Party in 368 00:17:36,240 --> 00:17:39,040 Speaker 4: a way where he could get through his policies very easily, 369 00:17:39,359 --> 00:17:40,879 Speaker 4: even with just a simple majority. 370 00:17:40,960 --> 00:17:42,920 Speaker 8: I think that's why you see Republicans that are wanting 371 00:17:42,960 --> 00:17:44,920 Speaker 8: to get to, you know, fifty three to fifty four seats, 372 00:17:45,000 --> 00:17:46,920 Speaker 8: because if it's just a very narrow fifty one to 373 00:17:46,960 --> 00:17:49,760 Speaker 8: forty nine majority, the most important people in the Senate 374 00:17:49,800 --> 00:17:53,240 Speaker 8: become the moderates Lisa Mkowski of Alaska, Susan Collins of Maine, 375 00:17:53,240 --> 00:17:55,359 Speaker 8: who's up for reelection in twenty twenty six if she 376 00:17:55,440 --> 00:17:58,040 Speaker 8: runs again. They have such a favorable map they want 377 00:17:58,040 --> 00:18:00,359 Speaker 8: to take advantage of this, especially if you see Trump 378 00:18:00,560 --> 00:18:02,879 Speaker 8: winning and I think the House is very deadlocked. You 379 00:18:02,920 --> 00:18:04,679 Speaker 8: only need four seats one way or the other. We 380 00:18:04,720 --> 00:18:06,960 Speaker 8: see that as a toss up. And you know, there's 381 00:18:06,960 --> 00:18:09,800 Speaker 8: some places where in here, in New York and in 382 00:18:09,840 --> 00:18:13,200 Speaker 8: California that are more democratic areas that Republicans need to 383 00:18:13,240 --> 00:18:15,960 Speaker 8: run ahead of. But then we have seats in Michigan 384 00:18:16,040 --> 00:18:18,600 Speaker 8: that are I think going to be very very close 385 00:18:18,640 --> 00:18:21,560 Speaker 8: as well. So you know, I think that probably is 386 00:18:21,600 --> 00:18:24,280 Speaker 8: the way the presidency goes, Probably the House goes as well, 387 00:18:24,480 --> 00:18:27,040 Speaker 8: But that's why Republicans want to sort of get that 388 00:18:27,080 --> 00:18:27,920 Speaker 8: bigger majority. 389 00:18:28,119 --> 00:18:30,080 Speaker 3: Gives President Trump a possible cushion. 390 00:18:30,160 --> 00:18:30,840 Speaker 5: When we talk. 391 00:18:30,720 --> 00:18:33,760 Speaker 4: About what's going to potentially change the outcome, everyone talks 392 00:18:33,760 --> 00:18:36,960 Speaker 4: about turnout and potentially who has the better ground game, 393 00:18:36,960 --> 00:18:38,720 Speaker 4: who has the better around voting game. 394 00:18:38,760 --> 00:18:39,800 Speaker 3: What are you seeing on that front? 395 00:18:40,280 --> 00:18:43,920 Speaker 8: Democrats have a very sophisticated operation that is sort of 396 00:18:43,960 --> 00:18:46,240 Speaker 8: their bread and butter, getting those people out, knowing where 397 00:18:46,280 --> 00:18:48,240 Speaker 8: to target them, and that I do hear some concern 398 00:18:48,280 --> 00:18:51,199 Speaker 8: among Republicans because the Trump campaign has largely sort of 399 00:18:51,200 --> 00:18:54,200 Speaker 8: farmed us out to Turning Point USA to Elon Musk. 400 00:18:54,240 --> 00:18:57,240 Speaker 8: But then we also are seeing some encouraging early voting 401 00:18:57,240 --> 00:19:01,280 Speaker 8: signs in places like Nevada, wherects typically have a very 402 00:19:01,320 --> 00:19:05,320 Speaker 8: strong ground game. There Republicans are having much better turnout, 403 00:19:05,640 --> 00:19:07,840 Speaker 8: you know. But I think it's a question of have 404 00:19:07,960 --> 00:19:12,360 Speaker 8: Republicans sort of learned to love early voting or encourage 405 00:19:12,359 --> 00:19:14,840 Speaker 8: their people. So is this sort of cannibalizing their early 406 00:19:15,160 --> 00:19:17,959 Speaker 8: their election day voting that we typically see is more 407 00:19:18,000 --> 00:19:21,560 Speaker 8: Republican or is this indicative of just more Republican enthusiasm 408 00:19:21,640 --> 00:19:24,439 Speaker 8: than Democratic enthusiasm. We sort of won't know until that 409 00:19:24,480 --> 00:19:28,080 Speaker 8: election day turnout. But Republicans banking votes early because in 410 00:19:28,119 --> 00:19:30,200 Speaker 8: the Vada, for instance, we saw that Senate race decided 411 00:19:30,240 --> 00:19:32,680 Speaker 8: by just a few hundred votes. That you know, if 412 00:19:32,720 --> 00:19:35,720 Speaker 8: they'd sort of emphasized early voting early on, they might 413 00:19:35,760 --> 00:19:37,239 Speaker 8: have won that Senate scene and that could have been 414 00:19:37,280 --> 00:19:40,080 Speaker 8: the They would have had it much closer, you know, 415 00:19:40,600 --> 00:19:41,280 Speaker 8: Senate this passed. 416 00:19:41,480 --> 00:19:43,280 Speaker 6: Rump gave a nod to this at the garden, and 417 00:19:43,320 --> 00:19:44,800 Speaker 6: you have seen the R and C do a lot 418 00:19:44,840 --> 00:19:46,920 Speaker 6: more work to say early voting is safe. 419 00:19:46,960 --> 00:19:48,919 Speaker 3: You should go out vote early. Just make sure you 420 00:19:49,000 --> 00:19:50,679 Speaker 3: vote your best case. 421 00:19:51,000 --> 00:19:53,320 Speaker 6: In terms of when do you think this election will 422 00:19:53,320 --> 00:19:55,720 Speaker 6: be decided, I mean I'm preparing. 423 00:19:55,920 --> 00:19:58,199 Speaker 8: I think we can know the Senate pretty early on 424 00:19:58,280 --> 00:20:01,080 Speaker 8: based on what happens in Montana, Ohio. We get those 425 00:20:01,119 --> 00:20:03,679 Speaker 8: notes if we get those results, but I mean I 426 00:20:03,680 --> 00:20:07,240 Speaker 8: think Friday, Saturday, it just you know, Pennsylvania is not 427 00:20:07,320 --> 00:20:08,960 Speaker 8: going to be able to count some of their absentees. 428 00:20:09,119 --> 00:20:11,760 Speaker 8: If it's a sort of a wave one way or 429 00:20:11,760 --> 00:20:14,320 Speaker 8: the other. If we're seeing you know, North Carolina, Georgia 430 00:20:14,400 --> 00:20:17,320 Speaker 8: go one way, Trump picks off one of those sort 431 00:20:17,359 --> 00:20:19,720 Speaker 8: of blue wall states, we might see I think earlier 432 00:20:19,760 --> 00:20:22,680 Speaker 8: results in a place like Wisconsin or Michigan, or if 433 00:20:22,720 --> 00:20:24,600 Speaker 8: it goes Harris, you know. But I think if it's 434 00:20:24,720 --> 00:20:27,720 Speaker 8: very close, it may not be for several days. And 435 00:20:27,720 --> 00:20:29,280 Speaker 8: I think we sort of need to steal ourselves for 436 00:20:29,320 --> 00:20:29,960 Speaker 8: that possibility. 437 00:20:29,960 --> 00:20:31,560 Speaker 2: And this is what a lot of market participants have 438 00:20:31,600 --> 00:20:33,879 Speaker 2: focused on. How long it takes to get this result. 439 00:20:33,960 --> 00:20:36,640 Speaker 6: Well, the Maricopa County election officials, I keep going back 440 00:20:36,680 --> 00:20:40,160 Speaker 6: to this because it dragged on in twenty twenty, they're 441 00:20:40,200 --> 00:20:42,879 Speaker 6: saying ten to thirteen days. Now, Yes, they want you 442 00:20:43,000 --> 00:20:46,120 Speaker 6: going into this with a low bar that potentially they 443 00:20:46,119 --> 00:20:48,000 Speaker 6: could get out of this a little bit quicker. But 444 00:20:48,040 --> 00:20:51,080 Speaker 6: ten to thirteen days, I mean we're talking about weeks. 445 00:20:50,800 --> 00:20:51,280 Speaker 5: Not days. 446 00:20:51,440 --> 00:20:53,480 Speaker 2: Nobody wants to repeat if that mess, that's for sure. 447 00:20:53,560 --> 00:20:55,840 Speaker 2: Jessica is good to see you. Thanks for Thank you, 448 00:20:55,960 --> 00:20:59,000 Speaker 2: Jessica tight of there of the Cook Political Report. 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