WEBVTT - Bloomberg Surveillance TV: January 14th, 2026 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.440 with Lisa Bromwitz and a Marie Hortern. Join us each 0:00:18.520 --> 0:00:21.440 day for insight from the best in markets, economics, and 0:00:21.480 --> 0:00:24.759 geopolitics from our global headquarters in New York City. We 0:00:24.800 --> 0:00:27.479 are live on Bloomberg Television weekday mornings from six to 0:00:27.560 --> 0:00:31.040 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.240 --> 0:00:33.519 or anywhere else you listen, and as always on the 0:00:33.520 --> 0:00:35.880 Bloomberg Terminal and the Bloomberg Business App. 0:00:36.520 --> 0:00:39.600 I am here in Atlanta, Georgia, with the CEO of 0:00:39.720 --> 0:00:42.839 Delta ed Baston here alongside me. After that earning support 0:00:42.880 --> 0:00:45.520 yesterday and that projection of twenty percent earnings per share 0:00:45.560 --> 0:00:48.640 growth in twenty twenty six, Now that you've had a 0:00:48.720 --> 0:00:50.960 day to say, jest, have you been surprised by the 0:00:51.000 --> 0:00:53.880 market's reaction and frankly by the lines of inquiry that 0:00:53.880 --> 0:00:54.720 you got yesterday? 0:00:55.120 --> 0:00:55.160 No? 0:00:55.320 --> 0:00:57.160 Really. First of all, thank you for coming down. It's 0:00:57.160 --> 0:00:59.040 great to have you on our campus down here in Atlanta. 0:00:59.560 --> 0:01:02.240 There were a lot of expectations. We have a lot 0:01:02.240 --> 0:01:05.240 of momentum in our business and as we're going into 0:01:05.240 --> 0:01:07.039 the year, we've seen the first part of the year 0:01:07.080 --> 0:01:09.839 that momentum picked up yet again in the early early 0:01:09.920 --> 0:01:12.319 days of January. And so as a result of that, 0:01:12.360 --> 0:01:15.800 I think our investor base was curious as to whether 0:01:15.840 --> 0:01:19.039 they see that momentum continuing to build, continue to the 0:01:19.080 --> 0:01:22.200 flatline to bop around a little bit. And we just 0:01:22.240 --> 0:01:25.720 finished a year where we saw some pretty significant challenges, 0:01:25.760 --> 0:01:28.800 whether it was the Liberation Day impact on consumer sentiment, 0:01:29.480 --> 0:01:32.199 shutdown of the government and the airspace and the latter 0:01:32.240 --> 0:01:34.280 part of the year. So we wanted to make certain 0:01:34.280 --> 0:01:36.319 we had a little bit of wiggle room, some caution 0:01:36.840 --> 0:01:39.800 as to how we thought about projecting the year out. 0:01:39.840 --> 0:01:42.840 And so I think there was more inquiries to just 0:01:42.920 --> 0:01:47.920 how much caution is there and what couldat look like? Right, 0:01:48.000 --> 0:01:49.600 And so I think that's more of what we saw. 0:01:49.760 --> 0:01:52.600 So we'll get into what great could look like. Let's 0:01:52.600 --> 0:01:54.200 get into the caution and some of the things that 0:01:54.240 --> 0:01:57.640 are less foreseeable, including a proposed ten percent. 0:01:57.360 --> 0:01:59.200 Cap on a credit card. 0:02:00.360 --> 0:02:03.360 And it raises this question about the loyalty program at Delta, 0:02:03.400 --> 0:02:06.480 considering the fact that American Express and the partnership there 0:02:06.720 --> 0:02:11.400 contributed something like fourteen percent according to my calculations of 0:02:11.480 --> 0:02:13.880 the revenue growth over the past year. I'm just wondering 0:02:14.040 --> 0:02:14.880 how big of a hit is this. 0:02:14.919 --> 0:02:17.120 Have you started to not that out at all? I 0:02:17.160 --> 0:02:17.840 think it's early. 0:02:17.919 --> 0:02:20.920 I think it's premature. This that's not our business as 0:02:20.919 --> 0:02:23.680 the financial services world and the bank and climate. I 0:02:23.680 --> 0:02:25.520 think the banks that have already come out and spoken 0:02:25.560 --> 0:02:29.280 about it are expressing a tremendous amount of concern. So 0:02:29.840 --> 0:02:32.680 I understand it would require legislation, is what I'm told, 0:02:33.200 --> 0:02:36.600 and we know the challenges of getting anything through Congress 0:02:36.960 --> 0:02:40.560 these days. I also think the knock on effects are 0:02:40.560 --> 0:02:44.480 pretty significant. When you think about what seems to be 0:02:44.520 --> 0:02:47.480 maybe a good idea to help the lower income strata, 0:02:47.680 --> 0:02:51.720 give them some income tax or text some interest rate relief, 0:02:52.160 --> 0:02:55.560 the reality is is going to eliminate their ability for credit, 0:02:55.880 --> 0:02:58.560 and it's going to freeze up tremendous amount of credit 0:02:58.639 --> 0:03:00.280 lines that the banks aren't can be able to forward 0:03:00.320 --> 0:03:04.920 to provide. So I'm not it's not my business. Of course, 0:03:04.919 --> 0:03:06.880 we're going to work closely with America Express. The second 0:03:06.919 --> 0:03:10.000 factor is is that AMEX is a premium car provider, 0:03:10.440 --> 0:03:14.040 so that's really not the income level that we focus 0:03:14.080 --> 0:03:15.200 on in our business. 0:03:15.360 --> 0:03:17.720 At the same time, there is a sense that's a 0:03:17.760 --> 0:03:20.120 growing part of the revenues. We saw an eleven percent 0:03:20.200 --> 0:03:23.799 increase in the contribution that this particular aspect made to 0:03:24.960 --> 0:03:28.160 Delta's revenue. So I just wonder how much do you 0:03:28.240 --> 0:03:30.400 expect that to grow? All things being. 0:03:30.280 --> 0:03:34.400 Equal, we're expecting high single digit growth in the current year. 0:03:34.440 --> 0:03:36.760 We've been seeing double digit growth for the last several years, 0:03:36.800 --> 0:03:39.800 and it's a really important part of our business model. 0:03:39.800 --> 0:03:42.240 But I don't think it's something that we look back 0:03:42.280 --> 0:03:46.080 and start getting causert. I think this idea has a 0:03:46.080 --> 0:03:48.440 lot of roadblocks and obstacles ahead of it. 0:03:48.760 --> 0:03:50.280 One thing that you said in an interview with the 0:03:50.320 --> 0:03:52.880 colleague talking about what could great look like is that 0:03:52.920 --> 0:03:54.880 effectively all the growth that you've seen so far has 0:03:54.880 --> 0:03:57.640 been from the premium cabin, not from the main cabin. 0:03:58.160 --> 0:03:59.440 Why do you think that is. 0:03:59.440 --> 0:04:01.920 Is it because just incredible strength at the premium end, 0:04:02.040 --> 0:04:04.440 or is it because of weakness in the main cabin. 0:04:04.960 --> 0:04:06.880 I think the main reason is the demand set for 0:04:06.960 --> 0:04:10.440 the premium seats and the premium product that we offer 0:04:11.040 --> 0:04:12.680 is a continues to be. 0:04:12.600 --> 0:04:14.040 At a record high. 0:04:14.120 --> 0:04:16.760 The more we look at the health of the consumer. 0:04:16.800 --> 0:04:17.880 We talk about the K. 0:04:18.520 --> 0:04:20.320 We're at the top end of that K in terms 0:04:20.320 --> 0:04:22.919 of who our consumer is, and when you have a 0:04:23.000 --> 0:04:26.440 high demand set, that's what drives pricing strength, and that's 0:04:26.480 --> 0:04:29.160 what drives the growth that we've seen over the last 0:04:29.200 --> 0:04:32.080 several years. That said, on the main cabinet, it's still 0:04:32.080 --> 0:04:34.080 a big part of our business. It's what pays the 0:04:34.080 --> 0:04:37.440 bills i'd like to think of. And as we see 0:04:37.920 --> 0:04:41.039 some of the rationalization that's occurring because you have a 0:04:41.080 --> 0:04:45.360 lot of lower end airlines with low end seats, too 0:04:45.440 --> 0:04:49.880 many seats chasing still enough low end consumer demand, that 0:04:50.480 --> 0:04:53.120 space is where a lot of the rationalization you see 0:04:53.120 --> 0:04:57.520 it in the industry currently. As that backdrop continues to 0:04:57.560 --> 0:05:01.440 get into a healthier environment because all those airlines have 0:05:01.520 --> 0:05:04.120 to find a way to earn their cost of capital, 0:05:04.160 --> 0:05:06.039 they're not going to be around and so as a 0:05:06.040 --> 0:05:09.840 result of that, whatever happens there, we will benefit from 0:05:09.880 --> 0:05:13.000 that and we'll keep that premium demand set growing. So well, 0:05:13.000 --> 0:05:15.120 we're not growing in that space, but it will still 0:05:15.320 --> 0:05:17.640 be a good one for us. In terms of improvement, you've. 0:05:17.520 --> 0:05:20.200 Talked about consolidation in the lower end of the industry 0:05:20.279 --> 0:05:22.120 and how you expect this to be a pretty big 0:05:22.160 --> 0:05:24.520 year of that as people try to justify their existence 0:05:24.920 --> 0:05:27.280 and survive. Would you play in that and anyway, would 0:05:27.279 --> 0:05:28.400 you make any acquisitions. 0:05:28.720 --> 0:05:31.320 We're not going to comment on that question, but when 0:05:31.400 --> 0:05:33.920 you look at who Delta is, you can answer that 0:05:34.000 --> 0:05:34.799 question for yourself. 0:05:35.160 --> 0:05:38.320 Well, I guess the other question is how much is 0:05:38.360 --> 0:05:41.240 the growth going to come from organic versus inorganic? Is 0:05:41.240 --> 0:05:43.200 there sort of a plan, especially given how much you've 0:05:43.240 --> 0:05:47.960 reduced leverage to really increase by acquisition some of your capacity. 0:05:48.440 --> 0:05:51.040 Well, when we look at growth for US, international is 0:05:51.320 --> 0:05:54.040 a big part of our growth strategy, and we announced 0:05:54.120 --> 0:05:57.360 yesterday a big new order for the Boeing Dreamliner. We're 0:05:57.440 --> 0:06:01.320 very happy about that, excited about that. Think about our industry. 0:06:01.400 --> 0:06:03.640 They come to me, they say, where's the future for 0:06:03.839 --> 0:06:04.560 travel going to come? 0:06:04.600 --> 0:06:04.720 From? 0:06:04.760 --> 0:06:07.720 One hundred years old? It is international. When you think 0:06:07.720 --> 0:06:09.800 about only one in five people in the world have 0:06:09.920 --> 0:06:12.120 ever stepped foot on an airplane. That means you have 0:06:12.160 --> 0:06:14.520 to go new places, You have to find new opportunities 0:06:14.560 --> 0:06:16.560 to grow and expand, and that's going to be the 0:06:16.960 --> 0:06:19.560 statement of the second century of flight. I believe it's 0:06:19.560 --> 0:06:22.560 about making the world a much more connected place than 0:06:22.560 --> 0:06:23.160 it is today. 0:06:23.320 --> 0:06:25.960 You know, this comes at a time the international travel 0:06:25.960 --> 0:06:30.280 growth that the rhetoric between countries has been incredibly heated 0:06:30.440 --> 0:06:33.600 and more about putting up walls. Are you concerned that 0:06:33.600 --> 0:06:36.600 that could have consequences and put barriers When you talk 0:06:36.640 --> 0:06:39.320 about the international travel and the growth that you're seeing 0:06:39.360 --> 0:06:40.520 in that sector, there. 0:06:40.320 --> 0:06:43.599 Have always been walls. There's always been in politics. Are 0:06:43.720 --> 0:06:46.760 soilings what we look at the world today? We know 0:06:46.839 --> 0:06:50.120 the one thing that really does unite the world is 0:06:50.160 --> 0:06:52.479 when you can actually travel and see and experience and 0:06:52.560 --> 0:06:55.440 get to know people, and you bring the countries physically 0:06:56.000 --> 0:06:59.120 closer together. So yes, it's not going to be a 0:06:59.160 --> 0:07:01.919 straight line up. You know, in this business, we know 0:07:02.000 --> 0:07:04.640 there's a lot of terribulence in the sky, not just 0:07:04.720 --> 0:07:07.960 in the business models sometimes, but when we actually do 0:07:08.080 --> 0:07:11.880 physically get connected back together and the world start come 0:07:11.960 --> 0:07:14.160 a closer place, that's where real opportunity. 0:07:14.240 --> 0:07:16.960 Since you're talking about the demand so far this year, 0:07:16.960 --> 0:07:19.320 and you've seen I believe, record demand so far in 0:07:19.360 --> 0:07:22.480 the first week and a half of January, I'm just wondering, 0:07:23.040 --> 0:07:25.760 is it mostly still coming from premium? Is it equal 0:07:25.840 --> 0:07:28.560 across all tiers? Is it also an economy to the 0:07:28.600 --> 0:07:31.000 same degree that you're seeing in terms of the robust 0:07:31.040 --> 0:07:32.080 interest at the top end. 0:07:32.360 --> 0:07:34.280 It continues to be. At the top end, it continues 0:07:34.240 --> 0:07:36.640 to be in business. We're seeing double digit growth in 0:07:36.680 --> 0:07:39.120 business at the start of the year. We had our 0:07:39.240 --> 0:07:43.160 largest weekly sales in our history just last week, up 0:07:43.240 --> 0:07:45.840 double digits over the same week a year ago. So 0:07:46.000 --> 0:07:48.320 if this demand set continues, we're going to have a 0:07:48.320 --> 0:07:48.760 great year. 0:07:49.200 --> 0:07:51.120 So I have to end with this because my colleagues 0:07:51.120 --> 0:07:54.800 asked me to do this. The lounges, the regular lounges, 0:07:54.800 --> 0:07:57.400 not the Delta one. They're getting really crowded. How are 0:07:57.440 --> 0:07:59.040 you going to manage that? Considering that a lot of 0:07:59.040 --> 0:08:01.120 people have complaint about Well, we've. 0:08:01.000 --> 0:08:03.880 Been experiencing that for the last handful of years, and 0:08:04.920 --> 0:08:07.000 it's a problem. What no good deed goes unpunished. You know, 0:08:07.000 --> 0:08:09.000 you build something great and everybody wants to be in there, 0:08:09.000 --> 0:08:12.360 and it's not doesn't feel as exclusive any longer. We've 0:08:12.360 --> 0:08:14.200 been working through that for the last several years. American 0:08:14.240 --> 0:08:17.760 Express is our close partner on that expresses building lounges. 0:08:17.800 --> 0:08:19.760 We're building new lounges where you've got the Delta one 0:08:19.800 --> 0:08:21.960 lounges that are coming. We're going to continue to build 0:08:22.000 --> 0:08:24.600 more supply, in more capacity to take care of all 0:08:24.640 --> 0:08:25.560 of our great customers. 0:08:26.560 --> 0:08:27.200 Stay with us. 0:08:27.520 --> 0:08:40.120 More Bloomberg surveillance coming up after this. In another world, 0:08:40.160 --> 0:08:42.360 i'd say the President's right. These bankers want hire rates 0:08:42.360 --> 0:08:44.360 to make more money. Unfortunately, when it comes to these 0:08:44.400 --> 0:08:46.360 policies that are being recommended at the moment by the 0:08:46.360 --> 0:08:48.480 White House, the warning you're hearing in the last twenty 0:08:48.520 --> 0:08:50.160 four hours, I think is agreed by a lot of 0:08:50.160 --> 0:08:53.559 people on Wall Street. These kind of policy proposals could 0:08:53.640 --> 0:08:57.319 lead to an otherwise unjustified timing of financial conditions, high rates, 0:08:57.320 --> 0:08:59.600 a shilling of credit availability. They are the kind of 0:08:59.600 --> 0:09:01.960 things that resident this White House does not want to say. 0:09:02.080 --> 0:09:03.959 Right, you put a cap on something that means you're 0:09:03.960 --> 0:09:05.400 going to have less of something, and it might be 0:09:05.480 --> 0:09:08.920 actually harder, especially individuals and lower income to actually get 0:09:08.960 --> 0:09:12.480 access to having the ability to use a credit card. 0:09:12.679 --> 0:09:14.840 Which is why you're seeing a tremendous amount of pushback 0:09:14.840 --> 0:09:17.000 from a lot of economists. You see a lot of 0:09:17.040 --> 0:09:19.199 these bank CEOs not just trying to curry favorite the 0:09:19.240 --> 0:09:22.520 President of the United States calling Treasury, but if they 0:09:22.559 --> 0:09:25.680 have to to Tyler's point. They're thinking about potential credit 0:09:25.720 --> 0:09:27.440 card that they could come out with that has a 0:09:27.480 --> 0:09:30.680 lower rate maybe for certain individuals. But this is going 0:09:30.720 --> 0:09:32.880 to be a year long story, especially since you have 0:09:32.920 --> 0:09:36.079 two bills circulating right now in Congress. 0:09:35.280 --> 0:09:37.360 And most of us now Raem and James ed welcome 0:09:37.360 --> 0:09:39.160 to the program. So I always get to hear from you. 0:09:39.640 --> 0:09:42.120 I've been telling this is just popular spark, there's no bite. 0:09:42.240 --> 0:09:43.640 I think it could be a bite like so of 0:09:43.679 --> 0:09:44.160 this year. 0:09:46.320 --> 0:09:46.840 Possible. 0:09:47.400 --> 0:09:50.160 John, I think that the bigger issue for a lot 0:09:50.200 --> 0:09:53.439 of folks that I've talked to is that Interchange bill, 0:09:53.480 --> 0:09:57.040 that credit Card Competition Act. There is not a sense 0:09:57.080 --> 0:09:59.240 that we could see in Congress as a cap on 0:09:59.280 --> 0:10:00.600 those credit card in rates. 0:10:00.880 --> 0:10:01.720 We've examined this. 0:10:01.800 --> 0:10:06.760 There's no executive authority, even using emergency authority that exists 0:10:07.120 --> 0:10:07.840 to put this through. 0:10:07.920 --> 0:10:11.000 But a lot of investors are nervous for a couple 0:10:11.040 --> 0:10:11.480 of reasons. 0:10:11.520 --> 0:10:15.760 One, when Donald Trump says something, oftentimes he goes out 0:10:15.800 --> 0:10:19.360 with the most extreme position and then negotiates into something 0:10:19.400 --> 0:10:22.320 that will be considered reasonable later. So a lot of questions, 0:10:22.400 --> 0:10:24.040 is it going to be thirty six percent? Is there 0:10:24.080 --> 0:10:27.280 something else out there? And then from an investor perspective. 0:10:27.520 --> 0:10:29.400 One thing that we've talked a lot about at Raymond 0:10:29.480 --> 0:10:32.720 James is oftentimes for financials, you need one hundred reasons 0:10:32.720 --> 0:10:35.560 to own them one reason to sell them. Investors are 0:10:35.600 --> 0:10:38.200 starting to warm up to financials again, and now all 0:10:38.200 --> 0:10:39.160 of a sudden, out of. 0:10:39.080 --> 0:10:41.679 The blue, we start get bombarded with some of. 0:10:41.640 --> 0:10:44.800 These one offs that get a lot of people asking, 0:10:45.160 --> 0:10:47.719 can you sustain a rally in this group if you're 0:10:47.720 --> 0:10:49.000 going to have that policy risk. 0:10:49.480 --> 0:10:51.719 Yeah, for the fourth quarter credit cards and the new 0:10:51.800 --> 0:10:55.560 cockroaches when it comes to this legislation potentially in Congress. 0:10:55.760 --> 0:10:58.160 So you think the competition bill has a lot more 0:10:58.200 --> 0:11:00.920 legs than the actual cap on to card interest. 0:11:00.720 --> 0:11:02.320 Rates, Yeah, Amory. 0:11:02.400 --> 0:11:04.760 So back when I worked on Capitol Hill, one of 0:11:04.800 --> 0:11:06.920 the signature bills that I worked on for a couple 0:11:06.960 --> 0:11:09.800 of years was the Card Act hanging up here on 0:11:09.800 --> 0:11:14.400 my wall, which implemented all the consumer protections around credit card. 0:11:14.440 --> 0:11:16.800 So this is something I've worked on for more than 0:11:16.840 --> 0:11:20.320 twenty years, and what I've seen is there's not a 0:11:20.320 --> 0:11:23.760 lot of support for rate caps because there are concerns 0:11:23.760 --> 0:11:28.760 about credit availability. However, on interchange it's just a completely 0:11:28.760 --> 0:11:29.320 different fight. 0:11:29.400 --> 0:11:30.760 You have two really well. 0:11:30.800 --> 0:11:35.640 Heled lobbies, the retailers versus the banks. We've had Durbin 0:11:35.760 --> 0:11:38.600 in the past, strike lightning in the bottle and changed 0:11:38.640 --> 0:11:43.680 the interchange rates on debit card transactions. Marshall, a Republican 0:11:44.000 --> 0:11:47.560 from Kansas, used the kind of push by Donald Trump 0:11:47.840 --> 0:11:50.800 on rate caps to get him onto this bill on 0:11:50.840 --> 0:11:53.880 credit card competition. And whenever there's a vote on something 0:11:53.920 --> 0:11:56.920 emory that can be the whole ballgame. There's been a 0:11:57.040 --> 0:12:00.480 concerted effort since the Durbin Amendment pass back in twenty 0:12:00.559 --> 0:12:04.079 ten on credit card or debit card interchange to never 0:12:04.240 --> 0:12:07.000 have another vote on this because when there's a vote, 0:12:07.080 --> 0:12:08.240 it's unpredictable. 0:12:08.320 --> 0:12:10.000 I still don't think it passes. 0:12:10.280 --> 0:12:13.400 But the risk is higher on the interchange bill than 0:12:13.440 --> 0:12:15.000 the cap on interest rates. 0:12:15.120 --> 0:12:17.839 So do you think the banks are overreacting a little bit. 0:12:18.880 --> 0:12:20.880 I think what the banks are doing is they're trying 0:12:20.920 --> 0:12:23.520 to figure out what they can do to put a 0:12:23.559 --> 0:12:27.079 cap on the risk. Is there something that they can do, 0:12:27.640 --> 0:12:30.360 kind of from a business perspective, to get Donald Trump 0:12:30.440 --> 0:12:34.280 to focus elsewhere. He is very focused on affordability. They 0:12:34.320 --> 0:12:37.079 are having a huge list of other things that they 0:12:37.120 --> 0:12:41.000 want to see happen in DC. The deregulatory agenda is 0:12:41.040 --> 0:12:44.439 a big tailwind for the banks. So if they don't 0:12:44.440 --> 0:12:46.760 do something on credit cards, does some of the other 0:12:46.880 --> 0:12:50.400 parts of the deregulatory agenda get sidelined? Do they not 0:12:50.520 --> 0:12:53.640 get the relief that they're expecting on tailoring or capital 0:12:53.679 --> 0:12:56.280 return on stress tests. There's so many things that the 0:12:56.320 --> 0:12:59.840 banks have going right now in DC. They don't want 0:12:59.840 --> 0:13:02.640 this to be the thing that stops all the other 0:13:02.679 --> 0:13:04.760 benefits that they're getting out of federal regulators. 0:13:04.800 --> 0:13:06.840 That what's been your reaction to the communication with the 0:13:06.840 --> 0:13:09.680 mayor of New York, your reaction to the communication with 0:13:09.720 --> 0:13:12.760 the senator from Massachusetts. What's the strategy there for the 0:13:12.800 --> 0:13:13.319 White House? 0:13:14.320 --> 0:13:16.400 You know, part of the reason that Donald Trump was 0:13:16.400 --> 0:13:18.760 able to get elected in twenty sixteen and again in 0:13:18.800 --> 0:13:22.880 twenty twenty four was tapping into populism. There was a 0:13:23.040 --> 0:13:27.040 crossover between Bernie Sanders voters and folks that have voted 0:13:27.040 --> 0:13:30.040 for Donald Trump in the general election. It is not 0:13:30.080 --> 0:13:32.400 a surprise to me that he has embraced some of 0:13:32.440 --> 0:13:36.240 these conversations in the credit card ten percent cap that's 0:13:36.280 --> 0:13:40.199 a Bernie Sanders bill. With Josh Holly, a Republican from Missouri, 0:13:40.640 --> 0:13:43.360 but he is tapping into things that he knows are 0:13:43.440 --> 0:13:46.560 popular with voters. He sees what Manami was able to 0:13:46.600 --> 0:13:49.280 do in the primary, being able to win in New York, 0:13:49.640 --> 0:13:53.120 tapping into an energy that he tapped into himself, and 0:13:53.160 --> 0:13:55.880 seeing if he can get that for the midterm elections, 0:13:56.080 --> 0:13:59.520 because he sees a midterm elections with increasing headwinds, and 0:13:59.559 --> 0:14:02.200 when he sees these headwinds, he and he alone, thinks 0:14:02.240 --> 0:14:03.680 that he can fix the problem. 0:14:03.840 --> 0:14:06.320 And how big is that group of voters that aren't 0:14:06.360 --> 0:14:09.760 married to a political party but tap into these very ideas, 0:14:10.600 --> 0:14:10.920 you know. 0:14:10.840 --> 0:14:11.960 It's at least ten percent. 0:14:12.120 --> 0:14:15.400 I think that there is a good number of folks 0:14:15.400 --> 0:14:18.560 who look at DC and don't think that they're on 0:14:18.640 --> 0:14:22.240 their side. They think that things are unaffordable. And so 0:14:22.440 --> 0:14:25.840 when we have affordability as his pitch, he thinks that 0:14:25.840 --> 0:14:28.680 that's an opportunity to bring those voters or keep those 0:14:28.760 --> 0:14:30.920 voters on his side. So we're going to have a 0:14:31.000 --> 0:14:33.520 Davo speech that focuses on housing. We're going to focus 0:14:33.560 --> 0:14:35.880 on energy, and that's going to brings in Venezuela. We're 0:14:35.920 --> 0:14:39.320 focusing on the cost of credit. The fight with Jay Powell. 0:14:39.680 --> 0:14:41.960 He's not going to say, it's a fight about kind 0:14:41.960 --> 0:14:44.440 of independence. It's about a fight about how much it 0:14:44.560 --> 0:14:47.880 costs you to run your life, and affordability is a 0:14:47.960 --> 0:14:50.760 much better place to put your kind of center that 0:14:50.800 --> 0:14:54.760 political fight versus a fight over independence, which most voters 0:14:55.040 --> 0:14:57.800 don't really focus on fed independence. It's much more the 0:14:57.840 --> 0:15:00.640 market that does. It's a hugely important thing, but it's 0:15:00.720 --> 0:15:02.280 not something that sways the average voter. 0:15:02.360 --> 0:15:04.240 John, stay with us. 0:15:04.560 --> 0:15:16.920 More Bloomberg Surveillance coming up after this. There's a few 0:15:16.920 --> 0:15:19.360 One Wall Street this morning. Alex Heltman of Barclay's writing, 0:15:19.360 --> 0:15:21.400 for the time being, investors will have to navigate the 0:15:21.440 --> 0:15:24.040 noise of coming Q four earnings and try to deploy 0:15:24.080 --> 0:15:28.200 capital into themes that should be agnostic to the whipsawing headlines. Alex, 0:15:28.440 --> 0:15:30.840 I'm excited for this. Tell me how to do that. 0:15:30.920 --> 0:15:32.000 Good morning, Good morning. 0:15:32.920 --> 0:15:38.680 So keep it really simple, as simple as possible thematically, 0:15:39.080 --> 0:15:40.640 as far as we as a team of concerned. 0:15:40.680 --> 0:15:43.680 There's one very obvious theme which. 0:15:43.480 --> 0:15:45.000 You can deploy in a lot of different ways, and 0:15:45.040 --> 0:15:47.760 that is the US China de coupling. It's that simple, 0:15:48.240 --> 0:15:50.440 and that I think is going to be running and 0:15:50.520 --> 0:15:51.240 humming in the. 0:15:51.160 --> 0:15:53.440 Background and at the center of that for US. 0:15:53.520 --> 0:15:57.280 Of course, you've got topics like defense, you've got topics 0:15:57.600 --> 0:16:02.560 like commodity security, and just like US hegemony as well 0:16:02.600 --> 0:16:05.440 and anything within that, we're particularly focused on the commodity angle. 0:16:05.480 --> 0:16:07.920 We think this is like one of the most interesting 0:16:08.040 --> 0:16:09.440 themes that I've personally seen. 0:16:09.480 --> 0:16:10.040 Let's get into that. 0:16:10.080 --> 0:16:11.840 We're saying it in metals this morning, and it's not 0:16:11.840 --> 0:16:15.360 just precious metals gold, silver, you're seeing and camper in tin. 0:16:15.600 --> 0:16:16.960 Does that speak to the kind of things you and 0:16:17.000 --> 0:16:18.080 the team are thinking about. 0:16:17.920 --> 0:16:18.520 Very much so. 0:16:18.520 --> 0:16:20.840 So, look, we've seen a precious metal rally and that 0:16:21.000 --> 0:16:24.400 is obviously to do with debasement and de dollarization, all 0:16:24.400 --> 0:16:26.680 this kind of thing. Industrial metals is kind of something 0:16:26.680 --> 0:16:28.640 which we pivot to quite hard in the fourth quarter 0:16:28.680 --> 0:16:31.520 of last year, and the reason is because of that decoupling. 0:16:31.600 --> 0:16:33.800 And just to keep you the exact summary in its 0:16:33.840 --> 0:16:36.720 simplest form, US and China used to code depend on 0:16:36.720 --> 0:16:38.400 one another, or still do codepend. 0:16:38.000 --> 0:16:39.120 On a lot of resources. 0:16:39.280 --> 0:16:41.280 If we're moving to a world of decoupling, and we're 0:16:41.280 --> 0:16:43.160 in a sort of a detante right now up until 0:16:43.200 --> 0:16:44.680 the time in these selection is the beginning of twenty 0:16:44.720 --> 0:16:48.920 twenty eight, We've effectively got two years for these countries 0:16:48.960 --> 0:16:53.440 to secure as much resource as possible, not just physical demand, 0:16:53.440 --> 0:16:55.640 but also just the line of sight on future supply. 0:16:56.360 --> 0:16:58.640 And what's really important about that is at the moment, 0:16:58.680 --> 0:17:01.600 the US is relying on over fifty percent imports on 0:17:01.640 --> 0:17:04.399 about forty seven critical metals and resources. It's not just 0:17:04.480 --> 0:17:10.479 rare earths, it's everything, copper, lead, lithium, electrification systems, aluminium, everything. 0:17:10.880 --> 0:17:12.840 If that is your base case, then can we see 0:17:12.880 --> 0:17:15.760 more noise when it comes to geopolitics? The president a 0:17:15.800 --> 0:17:18.640 week ago, a little more of a week ago, captured Maduro. 0:17:18.720 --> 0:17:21.080 He's now talking about Greenland, and. 0:17:21.480 --> 0:17:25.120 Let's not exclude Ukraine as well, massive on critical minerals 0:17:25.119 --> 0:17:27.200 and resources as well. So yes, I think a lot 0:17:27.200 --> 0:17:29.640 of the foreign policy decisions are being driven by those 0:17:29.640 --> 0:17:33.000 two factors, by defense and commodity security. 0:17:33.200 --> 0:17:34.879 Is this how to do with the AI trade in 0:17:34.920 --> 0:17:38.119 building out data centers or is this to increase the 0:17:38.200 --> 0:17:41.600 availability of these minerals and metals we need for our military. 0:17:41.880 --> 0:17:44.080 Well, I think it's both of those, and on top, 0:17:44.160 --> 0:17:45.679 if you just want to run an economy, if you 0:17:45.720 --> 0:17:47.640 just want to build infrastructure, if you want to build 0:17:47.720 --> 0:17:51.119 roads and bridges and electrification of grid and modernize your 0:17:51.280 --> 0:17:54.880 entire economy. You need access to critical minerals and metals. 0:17:55.160 --> 0:17:57.160 And of course people talk a lot about the AI 0:17:57.240 --> 0:18:00.800 narrative when it's an important incremental demand for copper, but 0:18:00.840 --> 0:18:03.879 we're talking about maybe five or six percent of global 0:18:03.880 --> 0:18:07.000 demand is coming from AI data centers. China is accounting 0:18:07.040 --> 0:18:09.000 for sixty percent of global copper demand. 0:18:09.320 --> 0:18:11.520 Let's finish on the priceless story. So some of those 0:18:11.520 --> 0:18:15.520 metals are already training all time highs. Silver copper in 0:18:15.560 --> 0:18:17.439 a bank sector, we've seen some record highs in that 0:18:17.480 --> 0:18:20.280 sector as well, and they've gone into earning season following 0:18:20.280 --> 0:18:24.080 a massive rally. We've pushback from earning season. I just 0:18:24.119 --> 0:18:26.560 wonder if you're taking any early indicators from the way 0:18:26.560 --> 0:18:28.760 the stock has behaved in response to the earnings we've 0:18:28.760 --> 0:18:30.200 seen in the last twenty four. 0:18:30.040 --> 0:18:33.359 Hours, specifically in the financial financials. Yeah, I mean, I 0:18:33.440 --> 0:18:33.960 think you've. 0:18:33.800 --> 0:18:36.160 Obviously got this noise around the credit card data, which 0:18:36.240 --> 0:18:39.200 which you guys have already covered against that. You've also 0:18:39.200 --> 0:18:41.240