Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays
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Speaker 3: Carol Masser along with Barry Redholts, we are in for
Speaker 3: Tom and Paul here on Bloomberg Surveillance on this Wednesday edition.
Speaker 3: We want to get into it and talk about some
Speaker 3: of the big trends that are out there. We've got
Speaker 3: a great guest to do that, Ifan Devitt. She is
Speaker 3: chief Global strategist over at Minetta. It is a one
Speaker 3: hundred percent partner owned registered investment advisor, and she joins
Speaker 3: us on this Wednesday if in good to have you
Speaker 3: here with Barry and myself. There's a lot to kind
Speaker 3: of tackle that is coming out investors right now. Some
Speaker 3: would say between the elections, geopolitics, concerns, maybe about earnings.
Speaker 3: It's early on the season that meet. We just kind
Speaker 3: of park a bunch of stuff in cash at this
Speaker 3: point and kind of write it out.
Speaker 1: What do you say?
Speaker 4: Probably not what we're going to advise though, Whereas having
Speaker 4: stuff and cash worked well when interest rates were high. Unfortunately,
Speaker 4: our clients aren't really in a position to tactically move
Speaker 4: things around. So what we're really trying to get them
Speaker 4: to do is stay the course, not be too reactive,
Speaker 4: and wait and see and have a bit of a
Speaker 4: strong stomach at this point, because we do think that
Speaker 4: the next twenty plus days are going to be a
Speaker 4: bit of a wild ride. We can see some expectations exceeded,
Speaker 4: some dashed, and a political backdrop, as you just noted,
Speaker 4: that is really unprecedented.
Speaker 5: So so I'm glad you mentioned not trying to be tactical.
Speaker 5: But at the same time, lots of investors have been
Speaker 5: thrilled getting five percent in money market funds at least
Speaker 5: for the past year or so. What are you guys
Speaker 5: doing with just spare cash that's looking for yield now
Speaker 5: that we're starting to see money market yield kind of
Speaker 5: slide below five.
Speaker 4: That's a great question. I mean, it's sliding slowly below five.
Speaker 4: So we're still in a much better place than we
Speaker 4: were when cash used to be a drag on portfolios,
Speaker 4: but we are starting to look at the margin back
Speaker 4: into the fifth income complex, see where opportunities.
Speaker 6: Are interesting there.
Speaker 4: Spreads are pretty tight, but still you're still getting a
Speaker 4: yield that's higher than you would have got a few
Speaker 4: years ago. And we've always had a pretty core exposure
Speaker 4: to equities, and that wasn't particularly thematic, so it wasn't
Speaker 4: writing with the volatility of tech stock.
Speaker 6: So that's looking quite good.
Speaker 4: And we've always been open at least to some of
Speaker 4: the alternatives and some of the areas like private credit
Speaker 4: that have really stayed the course have been a very
Speaker 4: steady source of income, and we haven't been as open
Speaker 4: to some more speculative asset classes. But we've always been
Speaker 4: in education mode around that.
Speaker 6: Huh.
Speaker 5: Really interesting. In your most recent note, you mentioned oil
Speaker 5: is down about four percent, and that kind of implies
Speaker 5: the market is not really worried about geopolitics. Kind of
Speaker 5: shocking considered how much stuff is going on not just
Speaker 5: Russian and Ukraine, but the Middle East, and not just
Speaker 5: Gaza but now spreading out to other parts of that
Speaker 5: conflict and the threat of a broader war. How are
Speaker 5: you looking at what's taking place geopolitically.
Speaker 4: It remains a modern wonder of our age that markets
Speaker 4: are continuing to be so resilient despite the political mails
Speaker 4: from on the domestic front, and despite what Ian Bremer
Speaker 4: describes as a geopolitical recession. We never had our actual
Speaker 4: economic recession, but we have had geopolitical recession in terms
Speaker 4: of just this coincidence of massive numbers of shocks and
Speaker 4: surprises on the geopolitical front. These do have the potential
Speaker 4: to disrupt supply chains and disrupt the price of these
Speaker 4: raw goods, but it's not happening, and we can see
Speaker 4: that perhaps there has been a lot more near shoring.
Speaker 4: The pandemic certainly really tested these supply chain networks, and
Speaker 4: you can see that they've come out the other side
Speaker 4: more resilient, that they've perhaps been stronger where the cracks were.
Speaker 4: And now we can see that markets are so sailing
Speaker 4: through breezely without paying much attention to it. So it
Speaker 4: remains a wonder. I don't quite understand it, because I
Speaker 4: think there is some more concern, but you know, it's
Speaker 4: a nice problem to have in that the portfolio remains resilient.
Speaker 6: Portfolios of our clients remain resilient.
Speaker 5: Well.
Speaker 3: I do wonder even in terms of the commodity market,
Speaker 3: specifically when you talk about oil, energy that there's a
Speaker 3: lot of supply out there, and I feel like the
Speaker 3: metrics have changed dramatically, So I do wonder about that
Speaker 3: as an indicator. Having said that, I also do wonder
Speaker 3: about the last twenty years or so, certainly the last
Speaker 3: decade of just money being so cheap and things distorted,
Speaker 3: and are we yet through that cycle here today?
Speaker 4: I would say, no, we're not through the cycle of
Speaker 4: cheap money and searching for yield. We can see that
Speaker 4: immediately there's a dip in the market, there's a flood
Speaker 4: of money in out of money market funds into equity funds.
Speaker 4: So there's still a sense that you are not going
Speaker 4: to make money investing in cash or investing in bonds,
Speaker 4: especially if you have FOMO when you look at those
Speaker 4: double digit record number and equity markets, so there is
Speaker 4: still that sense that we would need to get risk
Speaker 4: on on of a very strong drive to do that.
Speaker 6: I'd say overall, we can see that.
Speaker 4: And when it comes to the geopolitics and the focus
Speaker 4: on energy, yes, we are in a place now where
Speaker 4: energy security is clearly of prime importance, but we've done
Speaker 4: much better job around supply. The exception to that is
Speaker 4: Europe coming into the winter. Now there's going to be
Speaker 4: a question mark around what Europe potentially will have when
Speaker 4: it comes to their energy supply. Inflation's very low here,
Speaker 4: it won't upset the apple cart, but that is a
Speaker 4: bit of a question mark around energy here.
Speaker 5: You mentioned inflation low. UK inflation coming in at one
Speaker 5: point seven percent.
Speaker 3: I feel I'm pretty happy this morning, right, And.
Speaker 5: You know, I'm still perplexed by people who are fighting
Speaker 5: the last war and are arguing about sticking inflation. It's
Speaker 5: clearly not happening in Europe or in Asia at two
Speaker 5: two and a half percent. Can we declare the inflation
Speaker 5: battle one? Now here in the US we.
Speaker 4: Can the people who are not celebrating a course, as
Speaker 4: anybody who has their assets in Sterling, which has taken
Speaker 4: another dive against the dollar today based on the expectation
Speaker 4: that the next rate cup is a whopper one, a
Speaker 4: fifty basis point jumbo cut here in London the Bank
Speaker 4: of England. So clearly the there is are rough and
Speaker 4: the smooth with those inflation numbers. But yes, your point,
Speaker 4: I think we have now moved on. I've seen the
Speaker 4: language used around a hinge economy. Has the economy now
Speaker 4: kind of turned a page. Inflation is not a concern.
Speaker 4: We're back to worrying about growth where we get it
Speaker 4: from employment. We're not worried about overheating, and in the
Speaker 4: nice position that the central banks have a significant amount
Speaker 4: of arsenal with which to stimulate the economy when they
Speaker 4: need to. So is it over Well, certainly we don't
Speaker 4: know whether all supply chain problems are fixed, but certainly
Speaker 4: it's not over as an election issue though, as you
Speaker 4: well know, because this is still front of the center
Speaker 4: of the voters' minds.
Speaker 3: Yea, and I would say that stronger inflation reading for
Speaker 3: September in the US made everybody kind of reset in
Speaker 3: terms of their expectations for the fed efan we got
Speaker 3: to run Ifan Devitt, chief Global market strategist over at Manetta,
Speaker 3: joining us on this Wednesday.
Speaker 2: You're listening to the Bloomberg Surveillance Podcast. Catch us live
Speaker 2: weekday afternoons from seven to ten am Easter Listen on
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Speaker 3: Let's see what Anna Moletti has to say. She's head
Speaker 3: of equity over at Allspring Global Investments, joining us on
Speaker 3: this Wednesday. Hey, and great to be checking in with
Speaker 3: you again. Let's start with the election. You guys, you
Speaker 3: looked into it, wrote a paper on it. How are
Speaker 3: you thinking about what investors should or shouldn't be doing
Speaker 3: when it comes to the US presidential election.
Speaker 1: Well, I think you summarized it really well, Carol. You know, look, investors,
Speaker 1: we're all human means, and we get fearful of change,
Speaker 1: and especially when it's in our face every day. I
Speaker 1: live in a swing state in Wisconsin. There's polarization happening
Speaker 1: around what each of the policies for you know, the
Speaker 1: Republican candidate or the Republican candidate, the Democrat or the
Speaker 1: Republican candidate could could produce. But the reality is history
Speaker 1: does suggest equities can continue to do well through either administration.
Speaker 1: And likely it's also because it's not just the president
Speaker 1: who determines right these things. It's also because the Senate
Speaker 1: in the House. Do you make a big difference.
Speaker 3: Right, And we keep talking about that what happens in
Speaker 3: those down ballot races, particularly what happens in Congress, is
Speaker 3: important to what a president get done. Having said that,
Speaker 3: we are spending so much time and talking about John Micklethwaite,
Speaker 3: editor in chief of Bloomberg News, sitting down with Donald Trump.
Speaker 3: Donald Trump talked a lot about tariffs. We've done some
Speaker 3: of the research about now what tariffs across the board,
Speaker 3: whether it's China or even other some of our allies,
Speaker 3: as Trump has talked about what it would mean in
Speaker 3: terms of the impact on the US economy. If that
Speaker 3: happens and we have a second term by a Trump
Speaker 3: White House, would that change your thinking about what that
Speaker 3: might mean for some companies here in the US and
Speaker 3: how some equities trade.
Speaker 1: Look, you know, either administration could have an impact on
Speaker 1: individual companies, but we know that they will adjust. I
Speaker 1: think this tariff issue is an interesting one because two
Speaker 1: things could be true. Tariffs could increase inflation and make
Speaker 1: and have increased some challenges for some companies, but you know,
Speaker 1: maybe if you do get growth alongside of it, you
Speaker 1: don't feel that. And I think that's one of the
Speaker 1: most important things that I've learned in my career in
Speaker 1: the equity markets is that you can't look at things
Speaker 1: in isolation. And even when we're looking at economic data,
Speaker 1: there's no one set of data that really will kind
Speaker 1: of rule the forward path it's a collective sets of data,
Speaker 1: and so we tend to look at these things in silos,
Speaker 1: like what would happen with the tariffs? I think it's
Speaker 1: what would happen with tariffs? What would happen with the
Speaker 1: growth rate? What would happen with all of these things?
Speaker 6: And what is the.
Speaker 1: Impact ultimately on companies that are trying to manage through it?
Speaker 1: And I think the reality is that companies typically do
Speaker 1: adjust and find ways of adjusting to a new set
Speaker 1: of rules. Sometimes it takes a little bit of time,
Speaker 1: but they typically do adjust, which again leads to the
Speaker 1: performance that Barry also talked about at the initial outset.
Speaker 5: So, Anne, I want to throw out a contrarian idea
Speaker 5: and get your response to it. People have been talking
Speaker 5: about this election like it's a big change election, but
Speaker 5: can't we say either we're going to get a second
Speaker 5: Trump term which isn't going to look very different than
Speaker 5: the first Trump term, or a first Harris term where
Speaker 5: there isn't going to be a whole lot of daylight
Speaker 5: between her and Biden. I know she's trying to cut
Speaker 5: her own course, but isn't this just choosing between one
Speaker 5: former incumbent or the other? How big of a change
Speaker 5: election can this be?
Speaker 1: You know, I actually think that's a really interesting point.
Speaker 1: A couple of months ago, when I was on the show,
Speaker 1: I had talked about this to Berry. I think these
Speaker 1: are kind of two known entities in terms of what
Speaker 1: is what the potential outcome could be. It is very
Speaker 1: likely that Trump two point zero will be similar with
Speaker 1: his policies and what we saw with his first term.
Speaker 1: It also is very likely that although Harris would like
Speaker 1: to cut her own path, you will see some of
Speaker 1: the same policies that we've seen over the last four years.
Speaker 1: So despite all of the drama out there and uncertainty,
Speaker 1: these are known entities, and we haven't had an election
Speaker 1: where both sides are so well known.
Speaker 5: So let's stay with this theme and look forward if
Speaker 5: we kind of get a sense of what we're going
Speaker 5: to get with either candidate. I want to focus your
Speaker 5: discussion on quality and moving down the market cap size
Speaker 5: into mid and small cap. Does that matter who gets
Speaker 5: elected or is that just broad allocation regardless of the
Speaker 5: twenty twenty four presidential election outcome.
Speaker 1: I actually think it's regardless of the election outcome. Again,
Speaker 1: I don't want to look at anything in a vacuum.
Speaker 6: So there's always some.
Speaker 1: Relation to bigger picture issues. But one of the things
Speaker 1: that we've seen over the past several years is this
Speaker 1: increased concentration into the large cap space. Now, as you know,
Speaker 1: fundamentals have driven that earning's growth. Revenue growth has been higher,
Speaker 1: substantially higher in some of those large cap companies. But
Speaker 1: now index investors, passive index investors in particular, are taking
Speaker 1: very concentrated bets when they're investing in a straight SMP
Speaker 1: five hundred index, for example, and it becomes not only
Speaker 1: more difficult for those large cap companies to grow, but
Speaker 1: there's also more scrutiny for those large cap companies. I mean,
Speaker 1: today we see forty three percent of the SMP five
Speaker 1: hundred is under anti trust investigation, which is interesting and
Speaker 1: may not be the whole hunt.
Speaker 3: I'm sure they feel that there's a different word rather
Speaker 3: than interesting.
Speaker 2: Right, there's on the.
Speaker 1: Radar, that's right, and it may not mean a lot
Speaker 1: in your term. We all know these things get caught
Speaker 1: up in court and other things. But it also likely
Speaker 1: hampers the management's ability to be as flexible as they'd
Speaker 1: like to be.
Speaker 3: And I will say Donald Trump was asked about Google,
Speaker 3: and the cases are the government case against Google, so
Speaker 3: something that we know will continue into probably whatever administration,
Speaker 3: or maybe not, maybe it'll calm down a little bit
Speaker 3: and great stuff. As always, Am Maletti be while head
Speaker 3: of Equity over at all Spring Global Investments.
Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: just say Alexa playing Bloomberg eleven thirty.
Speaker 3: Let's see what Lachman Achuthon's has to say. A founder of,
Speaker 3: of course, the Economic Cycle Research Institute based here in
Speaker 3: New York City. Ecri Key is right now though in
Speaker 3: our Bloomberg Interactive Broker Studio, and his.
Speaker 5: Leading economic indicators is one of my favorite economic data.
Speaker 3: Well, that's what I was going to say. He knows
Speaker 3: data really well, lots of data, and it's accurate in
Speaker 3: terms of you think of where you were of the
Speaker 3: summer and what's played out, how are you.
Speaker 7: Well, It's so good to see you guys, and I
Speaker 7: think that I think the points that you're making are
Speaker 7: spot on.
Speaker 2: Right.
Speaker 7: It's surprising I think people when they saw that that
Speaker 7: employment report, and Barry, your point is exactly spot on,
Speaker 7: as it often is.
Speaker 3: I learned, all right, we're good, we're done.
Speaker 8: We're done.
Speaker 7: So the whole thing we're doing is monitoring cycles, economic cycles,
Speaker 7: cycles and growth cycles and employment cycles and inflation, and
Speaker 7: no one data point is good. They're all they're all
Speaker 7: really faulty. So we use indexes. We we spent a
Speaker 7: lot of time, decades, dare I say, three generations, putting
Speaker 7: together groups of indicators that give us a little bit
Speaker 7: of a heads up if there's a directional change. And so, Barry,
Speaker 7: I remember you and I were talking last April, we
Speaker 7: were doing your master's in business, and I was saying, Hey,
Speaker 7: the window of vulnerability, the cyclical window of vulnerability is closing.
Speaker 7: There's a whole bunch of reasons. We can tell the
Speaker 7: story in the data, but the risk of a hard
Speaker 7: landing isn't really there. And you know, in the summer,
Speaker 7: people got really excited, Hey is there a recession? All
Speaker 7: this stuff, and lo and behold, we're hanging in there.
Speaker 7: We're slowing down, but we're not crashing. And you know,
Speaker 7: It's kind of a little goldilocks at the moment. Not
Speaker 7: too hot, not too cold.
Speaker 3: Do we have to have a landing of some sort
Speaker 3: at some point? They are cycles, they have highs.
Speaker 7: They have close You do, you absolutely do. The question
Speaker 7: is is it hard or soft? And right now it
Speaker 7: looks decidedly soft as far as we can see. We
Speaker 7: can't see that far. I don't want to say we
Speaker 7: know what's going to happen down the line, but for
Speaker 7: everything that we're monitoring and managing cycle risk, now is
Speaker 7: not the time to play super duper defense.
Speaker 2: Right.
Speaker 5: You said something that has stayed with.
Speaker 7: Me for a long time.
Speaker 5: I want to say twenty thirteen, twenty fourteen, we were
Speaker 5: talking about we were still suffering a little PTSD post crisis,
Speaker 5: and a lot of people then were forecasting recessions. And
Speaker 5: one of the things that has always stayed with me
Speaker 5: is the economy. Think of someone walking down the street
Speaker 5: and you get bumped or jostled. A steady, healthy person
Speaker 5: a running back is going to keep their feet for
Speaker 5: one of these surprises, one of these shocks to cause recession.
Speaker 5: You need a weekened economy that's very vulnerable. Talk a
Speaker 5: little bit about how strong a weak the overall state
Speaker 5: of the economy is right.
Speaker 7: So that's your cyclical vulnerability. I've said over the years
Speaker 7: people who have listened to us, we talk about a
Speaker 7: window of vulnerability a week in immune system in a
Speaker 7: free market oriented economy, and we've studied them all over
Speaker 7: the place for a very long time. There are cycles,
Speaker 7: ebbs and flows. There's times when your immune system is
Speaker 7: strong and times when it's weaker, when you're off kilter.
Speaker 7: When you're off kilter, almost any shock can be a
Speaker 7: recessionary shock. When you're standing firm, you can take a
Speaker 7: hit and keep on going. Remember Katrina, we're talking. We're
Speaker 7: in a hurricane season. And when Katrina hit, a lot
Speaker 7: of people say, oh, that's recessionary. A quarter of the
Speaker 7: economy shut down for a minute, and lo and behold,
Speaker 7: there was no sicklical vulnerability, and we walked through it.
Speaker 7: Here we've got some hurricanes. What's going on. We're going
Speaker 7: to get jumpiness in the data. I guarantee you it's
Speaker 7: going to happen. Maybe someone will run with it and
Speaker 7: say it means this, and it means that when you
Speaker 7: look at the composite indexes, that tells you a little
Speaker 7: bit clearer picture. And right now, even though we're likely
Speaker 7: to get some ups and downs here, it's steady as
Speaker 7: she goes and all the activity that gets hit during
Speaker 7: the hurricanes. On the other side, you're going to have rebuilding.
Speaker 7: And I got to tell you one of the sectors
Speaker 7: that's been a bulwark here has been the construction sector,
Speaker 7: non residential can struction. Now I bet residential construction comes back.
Speaker 5: In So so the one question I keep asking people
Speaker 5: and not getting a satisfactory answer, is why do you
Speaker 5: now press that? But you're the right person to answer
Speaker 5: ask this, Given that window of vulnerability, why did so
Speaker 5: many economists so expect a recession that never showed up?
Speaker 3: Remember how many interest rate cuts they were thinking at
Speaker 3: the end of.
Speaker 5: Last year, last year, the year before.
Speaker 3: Yeah, okasion they've been talking about forever a couple less,
Speaker 3: all right.
Speaker 7: I think that I think the fundamental reason is labor hoarding.
Speaker 7: Now we're talking post COVID stuff, right, right, So we're
Speaker 7: coming off we got rate hikes going like crazy, and
Speaker 7: we've got a big slow down, and everything cyclical, anything
Speaker 7: discretionary was slowing down. Even employment was coming down. The
Speaker 7: growth in the cyclical discretionary parts of the economy was
Speaker 7: slowing really, really hard. However, the non discretionary think teachers,
Speaker 7: I think doctors and nurses. Okay, that employment component, which
Speaker 7: is a lot of people, was running near three decade highs,
Speaker 7: and it's growth rate it was solid, and it was
Speaker 7: it was so structurally difficult to get recessionary declines and
Speaker 7: employment even with the big cyclical slow down. I think
Speaker 7: that labor hoarding continues today. The only reason we're having
Speaker 7: some slow down in jobs growth right now is because
Speaker 7: that non discretionary component of the jobs market is slowing.
Speaker 7: It's coming off of crazy three decade highs, and the
Speaker 7: cyclical component, the discretionary component, I think it's actually tropic.
Speaker 3: So lax, Do you get upset or nervous if we
Speaker 3: stop to see we don't see that labor hoarding anymore.
Speaker 3: If we start to see layoffs we haven't seen.
Speaker 6: If we start to see that.
Speaker 7: Sure layoffs, I think layoffs I would take as seriously
Speaker 7: as someone who got layoff. Okay, those are serious things.
Speaker 7: We don't see them here. Jobless claims are a great
Speaker 7: thing to look at.
Speaker 3: We have a so the Boeing or the of us
Speaker 3: that we talked about this morning, that's want to see.
Speaker 7: These are companies specific I don't see. There's so you
Speaker 7: use ps PTSD before. There's so much PTSD about that,
Speaker 7: that difficulty in hiring post COVID, and there's no hard
Speaker 7: I'm still stung.
Speaker 3: Companies are still stung from that.
Speaker 7: Look, it's very expensive to let someone go and then
Speaker 7: hire them back again.
Speaker 5: And there's a shortage of workers out there.
Speaker 7: And so we have a whole you know, there's there's
Speaker 7: demographic things going on. We can get into that, but
Speaker 7: the long and short of it is to your point, Carol,
Speaker 7: I don't see the recessionary level job losses in front
Speaker 7: of us. Look that could change. I don't know what's
Speaker 7: happening in a couple of quarters. I do want to
Speaker 7: make one last point quick. Going into twenty sixteen election
Speaker 7: and twenty twenty election, leading indicators were firming as they
Speaker 7: are now.
Speaker 3: Really cool stuff, so much fun to reconnect lachmon achthon
Speaker 3: of course of ECRI.
Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: Bloomberg terminal.
Speaker 3: We're also keeping the election and the race on our
Speaker 3: radar as well. On that, Donald Trump defending his plans
Speaker 3: to overhaul the US economy through dramatic tariff increases and
Speaker 3: more direct consultation with the Fed. He caught up with
Speaker 3: John Mickelthade, our Bloomberg News editor in chief, in an
Speaker 3: interview at the Economic Club of Chicago. Talked about something
Speaker 3: so important to the Bloomberger audience. We're talking about tariffs.
Speaker 9: Because we're about growth. She's got no growth whatsoever, and
Speaker 9: we're all about growth. We're going to bring companies back
Speaker 9: to our country. You look at even today as I
Speaker 9: was driving over, I see these empty, old, beautiful like
Speaker 9: steel mills and factories that are empty and falling down.
Speaker 9: Some have been converted to senior centers and homes. But
Speaker 9: that's not going to do the trick. And we're going
Speaker 9: to bring the companies back. We're going to lower taxes
Speaker 9: still further for companies that are going to make their
Speaker 9: product in the USA. We're going to protect those companies
Speaker 9: with strong tariffs. Because I'm a believer in tariffs, I'm
Speaker 9: not sure that you are. I don't think you are,
Speaker 9: But I congratulate you in your career. But to me,
Speaker 9: the most beautiful word in the dictionary is tariff, and
Speaker 9: it's my favorite word. It needs a public relations firm
Speaker 9: to help it, but it's.
Speaker 8: To miss the most beautiful word in the tariff, tariffs.
Speaker 8: Do you think that will bring in the revenues to
Speaker 8: use another bipartisan group, Yeah, Peace and Institute. They said,
Speaker 8: I only bring in two hundred billion dollars that is
Speaker 8: only that's barely the cost of two of your promises.
Speaker 9: Yeah, but that's like for what company you're talking about. Okay, look,
Speaker 9: I've I've brought in with tariffs, and I was just
Speaker 9: getting started. Then COVID came and we had a which
Speaker 9: you know, because I tell you what, I did a
Speaker 9: very good job in COVID. Nobody knew what the hell
Speaker 9: it was. I call it the China virus because I
Speaker 9: like being a little more accurate. But when that came,
Speaker 9: but we got hundreds of billions of dollars just from
Speaker 9: China alone, and I hadn't even started yet. But tariff's
Speaker 9: are two two things if you look at it. Number
Speaker 9: one is for protection of the companies that we have
Speaker 9: here and the new companies that we'll move in because
Speaker 9: we're going to have thousands of companies coming into this country.
Speaker 9: We're going to grow it like it's never grown before,
Speaker 9: and we're going to protect them when they come in,
Speaker 9: because we're not going to have somebody undercut them.
Speaker 3: All right, of course, that is Donald Trump form president
Speaker 3: Donald Trump Trump, Republican presidential candidate, as you all know,
Speaker 3: speaking with our Bloomberg News editor in chief John mickl Thraite.
Speaker 3: That was yesterday at an interview in the Economic Club
Speaker 3: of Chicago. They talked Terrris, but they covered a lot
Speaker 3: of ground. Let's get to it with Kelly Lines. She's
Speaker 3: host co host of Bloomberg's Balance of Power on Bloomberg
Speaker 3: Radio and Bloomberg Television. Kelly, I'm not quite sure where
Speaker 3: to begin. It was a long conversation. It took while
Speaker 3: for it to begin. What stood out for you the
Speaker 3: same that we've gotten from mister Trump on the campaign
Speaker 3: trail or anything different.
Speaker 10: There wasn't much new news in this interview, Carol. We
Speaker 10: have heard a lot of this language and these policy
Speaker 10: proposals already from Donald Trump over the course of his campaign,
Speaker 10: including his proclivity toward tariffs, his favorite word in the dictionary.
Speaker 10: As he said, he really pushed back against any idea
Speaker 10: that his tax policy would add to the deficit or
Speaker 10: that tariffs could add to inflation, which is what most
Speaker 10: economists would tell you will happen if these policies become reality.
Speaker 10: But he essentially said, we can grow our way out
Speaker 10: of tax cuts. Tariff income can help offset some of
Speaker 10: the lost revenue from lower taxes, and again most economists
Speaker 10: do push back on that. But it raises the question
Speaker 10: of the audience Donald Trump was really speaking to yesterday.
Speaker 10: There was obviously many people gathered in that room in Chicago,
Speaker 10: many of whom were clapping at his ideas. Who like
Speaker 10: what he is saying. While some on Wall Street and
Speaker 10: financial markets may not like the idea of blink, get
Speaker 10: tariffs put on China and what that could do to
Speaker 10: the US China trade relationship. For an American worker, a
Speaker 10: manufacturing worker in the rust belt states like Michigan, Wisconsin,
Speaker 10: and Pennsylvania, which could help decide the election, it may
Speaker 10: be a message that is a bit more well received
Speaker 10: in those areas.
Speaker 5: So, Kaylie, you hit on exactly the question I was
Speaker 5: going to ask. Given the near universal consensus that tariffs
Speaker 5: are a tax hike on consumers and are inflationary. Who
Speaker 5: is in that audience applauding tariffs. I can imagine it's
Speaker 5: the usual members of the economic club of Chicago, or
Speaker 5: am I completely misunderstanding their economic outlook.
Speaker 10: Well, there were members of Chicago's business community that were there.
Speaker 10: There were also many people that are part of Trump's
Speaker 10: staff and campaign who were there. While we didn't get
Speaker 10: to see, you know, an aerial shot of the room
Speaker 10: every single time the applause was going on to see
Speaker 10: how many people in the room were clapping. Clearly there
Speaker 10: were people in there who are supportive of these ideas. Chicago,
Speaker 10: of course, is midwestern state manufacturing, and bringing back American
Speaker 10: manufacturing specifically maybe a more popular idea in some of
Speaker 10: these areas. And I would point out that is really
Speaker 10: what we heard Donald Trump say quite a few times,
Speaker 10: is that this is about bringing manufacturing back to the
Speaker 10: US that he would like to put into place what
Speaker 10: he described as tariff so obnoxious that they'll all come
Speaker 10: rushing in. Obviously, supply chains take much longer than immediately
Speaker 10: immediacy to actually reroute themselves. Factories can take a long
Speaker 10: time to build, but that's kind of the premise here
Speaker 10: making more in the US, and that is something that
Speaker 10: at least to blue collar voters might sound pretty good.
Speaker 5: So I know Chicago is in the Midwest, but when
Speaker 5: he presented his case to the Economic Club of New York,
Speaker 5: you heard very similar applause to lines that you typically
Speaker 5: think as very counter to economic consensus. So I'm just
Speaker 5: kind of fascinated. Who's in the room, who's in the
Speaker 5: audience is this I know that he did a town
Speaker 5: hall recently and was a very friendly audience. Who's in
Speaker 5: the Economic Club audience?
Speaker 10: Well, they can bring people into the room so that
Speaker 10: are more friendly to Donald Trump, are well known or
Speaker 10: affiliated with his campaign. As you reference his appearance at
Speaker 10: the New York Economic Club, there were people who actually
Speaker 10: were able to ask him questions on that stage, who
Speaker 10: have been very supportive of his economic ideas. And so
Speaker 10: I think there is the question of the kind of
Speaker 10: people Donald Trump is asking to be in that room.
Speaker 10: Who is getting credentialed for these places, knowing that he
Speaker 10: does like to play to an audience that is in
Speaker 10: his favor. You saw a lot of that in that
Speaker 10: interview yesterday where he was talking to the audience and
Speaker 10: kind of you know, making jokes, trying to create these
Speaker 10: these laugh lines, a lot of personality around it as
Speaker 10: he went through all of these various topics.
Speaker 3: Yeah, well, certainly interesting everything that we're seeing on the
Speaker 3: campaign trail on both sides. Kelly Lines, thank you so much,
Speaker 3: host of Bloomberg's Balance of Power, of course on the
Speaker 3: twenty twenty four presidential race.
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