WEBVTT - Fed Easing and Tariffs 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.240 on Apple car Play or Android Auto with the Bloomberg 0:00:21.320 --> 0:00:24.840 Business App. Listen on demand wherever you get your podcasts, 0:00:25.280 --> 0:00:27.000 or watch us live on YouTube. 0:00:27.120 --> 0:00:29.560 We got to get to one of the key bullmarket indicators. 0:00:29.840 --> 0:00:31.120 Ed your Donny Joints. 0:00:30.960 --> 0:00:32.320 Ed, what's the name of your dog? 0:00:33.840 --> 0:00:38.840 Well, Max, Max's always likes to show up here. And 0:00:38.840 --> 0:00:41.960 for those of you on radio, the Max indicator continues 0:00:42.000 --> 0:00:43.560 to see a bullmarket. 0:00:43.720 --> 0:00:47.360 Max is snoozing on the couch. Max on the market 0:00:47.440 --> 0:00:50.959 right shoulder. And because he's his head is closer to 0:00:51.000 --> 0:00:56.880 the armrest. That's any bullish indicator. Paul. Max's signal get 0:00:56.960 --> 0:00:59.040 us going, Yeah, he's very mellow. 0:00:58.920 --> 0:01:02.480 And thanks so much for joining here. Eventful Jackson Hole. 0:01:03.080 --> 0:01:05.800 Last week Tom Keen and his team were out there 0:01:06.000 --> 0:01:08.039 reporting on that. What did you take away from FRED 0:01:08.120 --> 0:01:09.080 chairman j Palse. 0:01:08.920 --> 0:01:13.120 Well, I think what was important and what the market 0:01:13.400 --> 0:01:18.120 sense was that he didn't say something he had earlier 0:01:18.160 --> 0:01:21.000 this year, started saying that we are in no rush 0:01:21.560 --> 0:01:26.039 to lower interst rates, referring to the Federal Open Market Committee, 0:01:26.440 --> 0:01:29.360 and at Jackson Hole on Friday, he did not say 0:01:29.400 --> 0:01:31.920 we are in no rush to lower interst rates. He 0:01:32.000 --> 0:01:35.080 basically said, well, we maybe were ready to make some 0:01:35.160 --> 0:01:38.960 adjustments here, and the market heard that as FED put 0:01:39.000 --> 0:01:43.160 is coming. And what was interesting is he also didn't 0:01:43.200 --> 0:01:45.679 mention that, oh, by the way, between now and the 0:01:45.680 --> 0:01:51.320 September sixteen, seventeenth meeting, there'll be more economic indicators, and 0:01:51.400 --> 0:01:55.440 those indicators are very important. There'll be two inflation indicators 0:01:55.960 --> 0:02:00.800 in peril employment, and they might change the change everybody's 0:02:00.800 --> 0:02:02.440 mind about what the FED should do next. 0:02:03.040 --> 0:02:05.560 Yeah, I mean, I think he suggested that maybe the 0:02:06.240 --> 0:02:09.320 labor dynamic of this economy is taking a little bit 0:02:09.360 --> 0:02:12.440 of precedence for the FED visa VI inflation. But boy, 0:02:12.840 --> 0:02:15.840 he can't discount inflation perking up because it just we 0:02:15.880 --> 0:02:19.120 had more tariffs announced today with the furniture. So how 0:02:19.120 --> 0:02:20.440 do you think about inflation. 0:02:21.040 --> 0:02:27.799 Well, he himself said that tariff effects on inflation can 0:02:27.880 --> 0:02:29.400 be sort of a one shot deal. 0:02:29.880 --> 0:02:30.120 Said. 0:02:30.120 --> 0:02:33.800 The problem is if the tariff implementation isn't one shot 0:02:33.840 --> 0:02:36.919 and kind of gets spread over time, that could continue 0:02:36.960 --> 0:02:40.520 to create some inflationary pressures. I think what also is 0:02:40.919 --> 0:02:43.880 missing in the discussion here and he didn't discuss it, 0:02:43.919 --> 0:02:49.440 is that there's some indications that services inflation. Maybe if 0:02:49.440 --> 0:02:52.359 it's not heating up, it's certainly not cooling off. I 0:02:52.400 --> 0:02:56.040 think what tariffs have done. If they've stalled the progress 0:02:56.080 --> 0:02:58.920 on getting down to two percent and now we're kind 0:02:58.960 --> 0:03:02.519 of stalled at three percent because durable goods inflation has 0:03:02.560 --> 0:03:05.120 come up, and that's clearly an indication of the tariffs 0:03:05.840 --> 0:03:06.560 and one of the. 0:03:06.480 --> 0:03:10.160 Great triumphs of the Ardent and folks. I'd link this 0:03:10.240 --> 0:03:13.560 with the great technical analyst Welthanka, for it is the 0:03:13.680 --> 0:03:18.200 belief in revenue growth, in earnings. I mentioned nominal GDP, 0:03:19.000 --> 0:03:21.480 the animal spirit of the nation at your Denny member 0:03:21.560 --> 0:03:26.160 at Jackson Hall that I have in eighteen twenty years before. 0:03:26.840 --> 0:03:31.720 If we get an elevated nominal GDP through real growth 0:03:31.919 --> 0:03:35.920 or inflation for a stock market, does it really matter 0:03:36.040 --> 0:03:38.800 which is pushing nominal GDP up? 0:03:39.080 --> 0:03:42.400 We just go, don't we? Yeah, revenues or revenues. 0:03:43.400 --> 0:03:47.880 The PE time Z is done in nominal terms and 0:03:48.320 --> 0:03:53.280 the E is in nominal terms, so that's correct. We 0:03:53.400 --> 0:03:56.920 look at the revenues and then we look at earnings, 0:03:57.000 --> 0:04:00.760 and the implication is profit margins. And what we see 0:04:00.800 --> 0:04:03.880 in the data is that the first and second quarter 0:04:04.440 --> 0:04:09.240 earnings were remarkably strong, much stronger than expected that they 0:04:09.320 --> 0:04:11.920 usually is a positive earning surprise, but there was particularly 0:04:12.400 --> 0:04:15.600 strong in both quarters. And now during the second quarter, 0:04:15.680 --> 0:04:17.520 we have earnings on the S and P five hundred 0:04:17.839 --> 0:04:19.760 at an all time record high, and no wonder the 0:04:19.800 --> 0:04:22.720 stock market is an all time record high. Of course, 0:04:22.760 --> 0:04:27.080 it helps that the valuation multiple is elevated at twenty two. 0:04:27.839 --> 0:04:30.640 But I'm thinking the bill market continues here on earnings, 0:04:31.160 --> 0:04:33.960 and I think that earnings will continue to push stock 0:04:34.000 --> 0:04:34.680 prices higher. 0:04:35.040 --> 0:04:38.520 Bottle that, folks, and whether you agree or disagree with 0:04:38.800 --> 0:04:42.400 Edgar Denny, go to the beginning of that conversation where 0:04:42.440 --> 0:04:48.320 he's agnosket agnostic on why we have buoyant nominal GDP. 0:04:49.000 --> 0:04:52.040 This is sacrilegion the modern days, Paul, And I'm sorry, 0:04:52.120 --> 0:04:52.440 doctor you. 0:04:52.560 --> 0:04:56.920 Denny is correct. Nominal gets everything going. That's right. 0:04:57.920 --> 0:05:00.599 So we did they have pretty strong earnings here. How 0:05:00.640 --> 0:05:04.120 do you think about our earnings strong enough to support 0:05:04.200 --> 0:05:05.240 this market going forward? 0:05:06.480 --> 0:05:10.560 Well, I think so. Here's my arithmetic on that. 0:05:11.600 --> 0:05:13.719 I think by year end we could get to sixty 0:05:13.800 --> 0:05:17.320 six hundred on the S and B five hundred, that's 0:05:17.400 --> 0:05:19.720 not that far off, and I think we can get 0:05:19.760 --> 0:05:23.560 to seventy seven hundred by the end of next year. 0:05:23.839 --> 0:05:26.360 And my assumption is that by. 0:05:26.279 --> 0:05:29.400 The end of this year, when we're thinking about what 0:05:29.680 --> 0:05:32.640 earnings could be next year, we'll be looking at analys 0:05:32.839 --> 0:05:36.480 talking about three hundred dollars per share, and then at 0:05:36.480 --> 0:05:38.200 the end of next year, I think they'll be talking 0:05:38.240 --> 0:05:42.640 about three hundred and fifty dollars per share. Multiply those 0:05:42.720 --> 0:05:47.320 by the current twenty two multiple and evaluation marketable and 0:05:47.440 --> 0:05:50.320 you get sixty six hundred and seventy seven hundred. 0:05:50.560 --> 0:05:53.080 The tech moment that we're in, ed Yard Denny. 0:05:53.200 --> 0:05:56.720 Does that change the way any of us calculate our 0:05:56.800 --> 0:06:00.360 so called terminal value? If we have a see if 0:06:00.400 --> 0:06:03.840 a one oh one five year view or seven year 0:06:04.080 --> 0:06:08.040 study of terminal value is a new terminal. 0:06:07.720 --> 0:06:09.960 Value out more, just as we think we're going to 0:06:10.000 --> 0:06:10.640 grow so much. 0:06:12.000 --> 0:06:15.599 Well, I think that if you just kind of take 0:06:15.720 --> 0:06:20.400 normal assumptions of what the economy can deliver and has 0:06:20.480 --> 0:06:23.320 delivered in the past, you get to ten thousand on 0:06:23.400 --> 0:06:26.360 the S and P five hundred by the end of 0:06:26.440 --> 0:06:30.640 the decade. That's the end of twenty twenty nine, and 0:06:31.120 --> 0:06:35.280 the assumption there is that earnings expectations get up to 0:06:35.360 --> 0:06:40.320 four hundred dollars a share. And again that's all pretty straightforward, 0:06:41.120 --> 0:06:44.279 consistent with the kind of growth rate of six seven 0:06:44.440 --> 0:06:49.320 eight percent that we've seen in earnings over the years. 0:06:49.320 --> 0:06:53.320 And if we get better than that, the market I 0:06:53.360 --> 0:06:55.680 could very well close even higher than that. 0:06:56.800 --> 0:06:58.960 And how concerned are you, if at all, about some 0:06:59.080 --> 0:07:01.520 of the concentration we see in this market. A lot 0:07:01.560 --> 0:07:04.600 of folks are saying it's just too too concentrated here 0:07:04.640 --> 0:07:05.800 with some of those big tech names. 0:07:06.400 --> 0:07:08.440 It doesn't bother me at all other than the fact 0:07:08.480 --> 0:07:13.080 that you know, it's I haven't been concentrated in my 0:07:13.120 --> 0:07:15.440 own portfolio like that. It's it's hard to be that 0:07:15.680 --> 0:07:20.200 concentrated to own thirty percent of your portfolio. And seven 0:07:20.320 --> 0:07:24.320 stocks is not exactly diversification, but it is what it is. 0:07:24.960 --> 0:07:27.280 And the ETFs that reflect the S and P five 0:07:27.400 --> 0:07:31.920 hundred obviously are in fact divers are in fact showing 0:07:32.000 --> 0:07:37.120 the concentration of thirty percent market capitalization accounted for by 0:07:37.200 --> 0:07:40.800 the seven stocks. You know, there's stock markets around the 0:07:40.840 --> 0:07:43.640 world that are very concentrated, have been concentrated for years 0:07:44.360 --> 0:07:48.080 and I think there's nothing terrible about what's happening here. 0:07:48.160 --> 0:07:51.680 And by the way, if the Fed in fact doesn't 0:07:51.760 --> 0:07:54.760 listen to me and goes ahead and lowers interest rates, 0:07:55.320 --> 0:07:58.239 then we'll continue to see the broadening in the market 0:07:58.280 --> 0:07:59.160 to smidcaps. 0:08:00.080 --> 0:08:03.000 See her Denny is a governor vice chairman. Shure it'd 0:08:03.080 --> 0:08:04.160 be too much, folks. 0:08:04.320 --> 0:08:09.400 I use the famous Secunda interpolation calculator on the Bloomberg 0:08:10.320 --> 0:08:16.200 at your Denny said, end of the decade, Paul ten thousand, SPX, folks. 0:08:16.240 --> 0:08:19.640 Are you ready. I've never done this before. I've never 0:08:19.800 --> 0:08:27.120 said this before. Paul dow seventy thousand seven zero yep, 0:08:27.400 --> 0:08:30.400 seventy thousand, end of the decade, Ed, your Denny. 0:08:30.360 --> 0:08:33.120 We're at forty five right now. Hey, Ed, talk to 0:08:33.240 --> 0:08:36.439 us about just kind of where else in the marketplace 0:08:36.640 --> 0:08:40.160 that you find value here? Is that to the except 0:08:40.160 --> 0:08:42.120 people are looking for? Hey, I just need to find 0:08:42.200 --> 0:08:44.400 some decent value here, and I don't need to chase 0:08:44.800 --> 0:08:46.720 the hottest thing out There are certain sectors out there 0:08:46.760 --> 0:08:47.120 that you like. 0:08:48.000 --> 0:08:48.200 Well. 0:08:48.440 --> 0:08:51.760 I still do prefer the large caps over the smid caps, 0:08:51.840 --> 0:08:55.839 but you know, I also pay attention to what the 0:08:55.960 --> 0:08:59.360 market's doing and respect what the market is saying, and 0:08:59.520 --> 0:09:05.640 clearly there's a move here towards cheaper stocks. So therefore 0:09:06.240 --> 0:09:10.320 people are looking at the smaller and MidCap sector. Within those, 0:09:10.480 --> 0:09:12.480 I would kind of focus on the sectors that we 0:09:12.679 --> 0:09:16.199 like in the large caps, which would be information technology, 0:09:17.240 --> 0:09:22.280 industrials and financials. So I think you can look in 0:09:22.400 --> 0:09:27.280 that part of the market cap segment to find cheaper stocks. 0:09:27.320 --> 0:09:31.000 I mean, the S and P five hundred is twenty 0:09:31.080 --> 0:09:35.839 two forward pe the large cap, the MidCap and small 0:09:35.920 --> 0:09:40.880 caps are at fourteen fifteen. So yeah, there are certainly 0:09:40.920 --> 0:09:43.240 a lot cheaper we're just kind of waiting for their 0:09:43.280 --> 0:09:46.079 earnings to improve. The problem I had with smid caps 0:09:46.160 --> 0:09:49.040 is they keep getting snapped up by the lodge caps 0:09:49.080 --> 0:09:51.559 every time. You know, you never get to own a 0:09:51.679 --> 0:09:54.920 Microsoft because before it before it becomes a Microsoft, to 0:09:54.960 --> 0:09:59.400 get snapped up by Microsoft, the leverag is up its technologies. 0:10:00.679 --> 0:10:03.040 How about in a fixed income space, ED, how do 0:10:03.120 --> 0:10:05.800 you think about just the allocation stocks and bonds these days? 0:10:07.040 --> 0:10:09.800 Well, I think bonds are basically where they should be. 0:10:11.040 --> 0:10:14.280 I think we've normalized the bond yield where it was 0:10:14.360 --> 0:10:17.679 before the Great Financial Crisis. So I'm thinking that the 0:10:17.800 --> 0:10:20.480 ten year bond yield should in fact be about four 0:10:20.520 --> 0:10:23.320 and a half percent plus minus twenty five basis points, 0:10:23.720 --> 0:10:26.400 and we've been in that range really since the beginning 0:10:26.440 --> 0:10:29.440 of the year, and I think that's kind of settling down. 0:10:29.559 --> 0:10:33.000 So if you're very a conservative investor, I think you 0:10:33.040 --> 0:10:36.240 can buy yourself a ten year treasury and feel fairly 0:10:36.960 --> 0:10:39.679 comfortable that you know, if you have to sell. 0:10:39.520 --> 0:10:42.640 It early, you're not going to take a hit at 0:10:42.679 --> 0:10:43.240 your Denny. 0:10:43.720 --> 0:10:45.760 On index funds, Paul and I were looking at the 0:10:45.840 --> 0:10:49.800 ownership of Nvidia before, and of course it's hugely index 0:10:49.920 --> 0:10:52.800 fund based. I mean, in the old days of CJ. 0:10:53.000 --> 0:10:56.600 Lawrence said, your Denny it was individual stocks. You actually 0:10:56.720 --> 0:11:01.000 know perhaps what you were buying your Denny index funds? 0:11:01.160 --> 0:11:02.880 Is it made our thinking sloppy. 0:11:05.320 --> 0:11:08.959 Well, it's you know, I have a kind of a 0:11:09.400 --> 0:11:13.240 realistic view of things, and my motto wants something like 0:11:13.320 --> 0:11:16.960 this is it is what it is. The ETFs are 0:11:17.040 --> 0:11:22.800 here to stay. I think you can certainly argue that 0:11:23.240 --> 0:11:26.640 they've kind of mucked up valuation because if somebody says, 0:11:26.679 --> 0:11:28.000 you know, I want to be in the market, and 0:11:28.040 --> 0:11:29.640 all they do is jump into the s and P 0:11:29.840 --> 0:11:34.880 five hundred, they are contributing to the high valuation of 0:11:35.000 --> 0:11:40.120 the Magnificent seven because it's so concentrated. But it is 0:11:40.559 --> 0:11:42.840 still a market. There's still plenty of people who can 0:11:43.559 --> 0:11:45.400 trade it one way or the other, and so I 0:11:45.480 --> 0:11:48.120 think the market is still efficient. Paul, get one worry 0:11:48.120 --> 0:11:50.960 in here. Max needs this morning walk exactly. 0:11:51.320 --> 0:11:53.280 Hey, yeah, talk to us about the US dollar here. 0:11:53.320 --> 0:11:56.920 The Bloomberg dollar innex is down still about nine percent 0:11:57.280 --> 0:11:58.960 from its high earlier in the year. 0:11:59.000 --> 0:11:59.640 What do you make of that? 0:12:00.920 --> 0:12:04.080 I think I'm getting a sense that I'm just one 0:12:04.120 --> 0:12:08.120 of the only bulls left on the dollar. Let's put 0:12:08.160 --> 0:12:08.559 it this way. 0:12:08.720 --> 0:12:10.199 I'm one of the only. 0:12:11.559 --> 0:12:14.959 Strategists looking at the dollar. That isn't it the bearish 0:12:15.120 --> 0:12:18.120 There's so much bearish talk about the dollar. And yet 0:12:18.200 --> 0:12:21.840 when you look at the Treasury data on monthly net 0:12:22.360 --> 0:12:26.679 capital inflows the past twelve both through June, we had 0:12:26.800 --> 0:12:30.720 a record inflow into the US equity market by foreigners 0:12:30.760 --> 0:12:34.600 that's on a net basis of over six hundred billion dollars. 0:12:35.200 --> 0:12:37.760 And you look at all capital inflows, they were one 0:12:37.840 --> 0:12:41.520 point seven trillion dollars over the past twelve months. So 0:12:41.640 --> 0:12:45.120 foreigners didn't get that that memo, that You're supposed to 0:12:45.160 --> 0:12:48.600 be selling the dollar and buying the euro, but that's 0:12:48.679 --> 0:12:53.880 what somebody's been doing that And I'm thinking that, technically speaking, 0:12:53.960 --> 0:12:57.800 were probably at the bottom of a of a channel 0:12:57.880 --> 0:13:00.959 that's still got an upward trend to it. So I'm 0:13:01.000 --> 0:13:02.880 not giving up on the dollar. I think it's still 0:13:04.080 --> 0:13:07.040 going to remain a vitally important currency. 0:13:07.360 --> 0:13:08.840 Edgar Denny, thank you so much. 0:13:08.920 --> 0:13:12.760 Just thrilled with your effort for Edgear Denny's important nodes. 0:13:12.840 --> 0:13:15.839 Go to your Denny Research. We greatly appreciate it. 0:13:17.120 --> 0:13:17.760 Stay with us. 0:13:18.080 --> 0:13:21.199 More from Bloomberg Surveillance coming up after this. 0:13:28.600 --> 0:13:32.160 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:13:32.240 --> 0:13:35.360 weekday afternoons from seven to ten am Eastern Listen on 0:13:35.480 --> 0:13:38.840 Apple Karplay and Android Otto with the Bloomberg Business app, 0:13:39.080 --> 0:13:40.720 or watch us live on YouTube. 0:13:40.880 --> 0:13:42.920 We are strong here at the end of August forget 0:13:42.920 --> 0:13:45.280 about the summer. Dildos Henry out to Trey's wanders in 0:13:45.320 --> 0:13:48.520 the Door and joins us here for an extended conversation. Okay, 0:13:48.840 --> 0:13:51.079 if you go to eight sources, there's what you do 0:13:51.160 --> 0:13:54.120 with VEDA partners. I look at Amy Walter summing it 0:13:54.240 --> 0:13:59.800 up at the political report. The Jerry Mander uproar is about, 0:14:00.000 --> 0:14:03.800 so what will Latino voters do? Who's winning the high 0:14:03.840 --> 0:14:07.360 ground for twenty six and twenty eight with Latino voters. 0:14:07.960 --> 0:14:09.599 I don't know that there's a high ground to be 0:14:09.800 --> 0:14:14.480 one right now, but there definitely is a regret trade 0:14:14.720 --> 0:14:18.000 on the Trump side, and you're seeing a migration, which 0:14:18.080 --> 0:14:20.360 is very normal for any majority party. 0:14:20.480 --> 0:14:20.960 To come back. 0:14:21.040 --> 0:14:23.200 So I wouldn't say that Democrats are winning per se, 0:14:23.480 --> 0:14:25.280 but Trump is not continuing to win. 0:14:25.400 --> 0:14:28.640 Do you look at the multiple state Jerrymander debate and 0:14:28.800 --> 0:14:31.880 say I have a winner or is it an unknown unknown? 0:14:32.320 --> 0:14:35.400 I think it has to be a permanent state of wartime, 0:14:35.680 --> 0:14:39.200 and I think that these gerrymandering redistricting cases are going 0:14:39.240 --> 0:14:41.120 to be a constant source of what we see as 0:14:41.200 --> 0:14:43.560 long as the two parties remain as competitive as they are. 0:14:43.920 --> 0:14:46.120 When you have margins that are this slim in the house, 0:14:46.400 --> 0:14:48.200 you kind of have to keep up with the Joneses, 0:14:48.280 --> 0:14:50.640 and so whatever Republicans do, Democrats are going to do, 0:14:50.720 --> 0:14:51.320 and vice versa. 0:14:51.840 --> 0:14:54.200 Henry, it it seemed like the market, at least the 0:14:54.280 --> 0:14:58.120 equity markets, to put the trade concerns kind of in 0:14:58.160 --> 0:15:02.080 a river mirror. But then I see President Trump announcing 0:15:02.680 --> 0:15:06.520 major tariff on furniture, So I forgot all about that 0:15:06.720 --> 0:15:09.760 sector stuff that could be material. Talk to us about 0:15:09.800 --> 0:15:11.960 like what's going on at the sector level, because I 0:15:12.000 --> 0:15:13.680 thought all this was in the rearview mirror. 0:15:13.920 --> 0:15:16.200 Yeah, I think the whole street would like it to 0:15:16.280 --> 0:15:18.520 be in the rear view mirror. But I honestly, and 0:15:18.600 --> 0:15:19.840 I know this is a lot to say, I think 0:15:19.880 --> 0:15:21.240 the second half of this year is going to be 0:15:21.320 --> 0:15:23.920 more volatile on tariffs than the first half of this year. 0:15:24.360 --> 0:15:27.080 And that's because as soon as this week, if not 0:15:27.120 --> 0:15:30.680 in the next couple weeks, the Federal Circuit Court of 0:15:30.680 --> 0:15:32.760 Appeals has been to rule on whether the President has 0:15:32.800 --> 0:15:35.120 the authority to maintain these AIPA tariffs, which is where 0:15:35.120 --> 0:15:36.880 we're getting two point seven trillion. 0:15:36.640 --> 0:15:37.920 Dollars worth of revenue happens. 0:15:38.160 --> 0:15:40.960 Well, it's widely anticipated that the courts are going to 0:15:41.280 --> 0:15:44.119 side with the Court of International Trade, which determined unanimously 0:15:44.200 --> 0:15:46.760 that Trump does not have the authority to impose these tariffs. 0:15:47.000 --> 0:15:50.520 So what must happen thereafter is the President has to 0:15:50.600 --> 0:15:53.400 pivot to Section two thirty two and three zero one tariffs, 0:15:53.400 --> 0:15:56.360 which is where the furniture announcement came from So for clients, 0:15:56.640 --> 0:15:58.280 what I've said for the last couple of weeks now 0:15:58.440 --> 0:16:01.040 is watch to see if the administration starts to launch 0:16:01.080 --> 0:16:03.960 new investigations on a sector basis, And they launched two 0:16:04.080 --> 0:16:07.160 last week win turbines and furniture. And it's because the 0:16:07.240 --> 0:16:10.240 Department of Justice is aware that they're very likely to 0:16:10.320 --> 0:16:13.840 lose this case and the entire IEPA structure will be upending. 0:16:13.960 --> 0:16:16.200 So is the simplistic phrase, it doesn't go to the 0:16:16.240 --> 0:16:17.000 Supreme Court? 0:16:17.360 --> 0:16:19.160 It doesn't, it does? 0:16:19.480 --> 0:16:19.760 It will? 0:16:20.000 --> 0:16:22.120 I mean that's the expectation if they choose to take 0:16:22.120 --> 0:16:23.320 it up, Yes, which they will. 0:16:23.360 --> 0:16:27.040 I mean, the Trump and the administration they're on a 0:16:27.080 --> 0:16:29.480 winning streak here. I mean, they've got tons of momentum. 0:16:29.520 --> 0:16:32.160 It just feels like, so why wouldn't they take everything 0:16:32.240 --> 0:16:33.040 to the Supreme Court. 0:16:33.440 --> 0:16:35.920 They're certainly going to try. They're obviously telegraphing that this 0:16:36.080 --> 0:16:38.480 is going to be the biggest disaster since the nineteen 0:16:38.520 --> 0:16:41.320 twenties if they don't have this continued tariff authority, which 0:16:41.360 --> 0:16:43.400 is ironic because obviously that's the last time we had 0:16:43.520 --> 0:16:46.240 tariffs of this magnitude in the first place. But the 0:16:46.280 --> 0:16:49.080 administration is definitely prepared to go to the Supreme Court, 0:16:49.120 --> 0:16:51.080 and they're very likely to lose at the Court of Appeals. 0:16:51.080 --> 0:16:55.080 And it becomes is this a constitutional legal case or 0:16:55.160 --> 0:16:57.200 is it more about politics? And that's where you're winning 0:16:57.320 --> 0:16:58.320 sort of argument comes in. 0:16:59.320 --> 0:17:02.560 So, I mean, I guess investors here we should not 0:17:02.720 --> 0:17:05.359 get too complacent. Is that kind of what we're saying here? No, 0:17:05.480 --> 0:17:08.359 because the stock market's setting all time highs here and 0:17:08.480 --> 0:17:11.240 it seems again the market seems so discounted that risk 0:17:11.320 --> 0:17:11.840 here a little bit. 0:17:12.119 --> 0:17:13.720 Well, I think the number one thing I'd say is 0:17:13.800 --> 0:17:17.879 that when Powell says we could see tariffs be a 0:17:17.960 --> 0:17:20.320 one and done kind of event, think about what's happening. 0:17:20.640 --> 0:17:24.520 We're getting deminimus changed for I don't know the fourth, fifth, sixth. 0:17:24.400 --> 0:17:25.520 Time this week. 0:17:25.880 --> 0:17:28.480 We're getting fifty percent tires put on India. Now we're 0:17:28.480 --> 0:17:31.680 having additional tires put on furniture. Those tariffs are going 0:17:31.760 --> 0:17:35.320 on countries that we already have fifty percent TIFFs on, whether. 0:17:35.200 --> 0:17:39.360 It's India, China, Vietnam. 0:17:39.600 --> 0:17:41.719 I mean, the sector analysts are the ones that are 0:17:41.720 --> 0:17:43.440 really going to struggle for the back half this year. 0:17:43.600 --> 0:17:48.280 What is Henrietta Tres's inside story on the body language 0:17:48.320 --> 0:17:51.480 from a collective White House. The perception is it's all 0:17:51.560 --> 0:17:56.720 about President Trump. I get that, But are the cabinet 0:17:56.800 --> 0:17:58.840 members and the advisors are they working? 0:17:59.359 --> 0:17:59.680 Is one. 0:18:00.240 --> 0:18:02.480 I think it's everything everywhere, all at once. If you 0:18:02.560 --> 0:18:06.159 are a cabinet secretary for Defense or the IRS or 0:18:06.640 --> 0:18:09.639 Treasury or wherever, find an issue that you can seize 0:18:09.680 --> 0:18:12.520 on and blow it out of the water, whatever you 0:18:12.640 --> 0:18:15.800 can do to draw attention to whatever your issue is 0:18:15.920 --> 0:18:18.600 of the day. We're looking for all news items, all 0:18:18.680 --> 0:18:19.879 headlines at all times. 0:18:21.440 --> 0:18:25.639 Midterms, I don't know, it's a year away. What's the 0:18:26.240 --> 0:18:27.560 current thinking about midterms? 0:18:27.640 --> 0:18:31.639 Heare current thinking is basically the default to conventional wisdom, 0:18:31.640 --> 0:18:34.960 which is that on average, the majority party loses twenty 0:18:35.000 --> 0:18:37.199 four seats in the House. And I think Democrats are 0:18:37.200 --> 0:18:39.280 more and more excited about the opportunities that they have 0:18:39.320 --> 0:18:41.520 in the United States Senate with Sheret Brown and Ohio, 0:18:41.680 --> 0:18:44.879 with Tom Tillis dropping out in North Carolina, seeing Susan 0:18:44.920 --> 0:18:47.040 Collins in Maine, they launched a new candidate in the 0:18:47.160 --> 0:18:50.960 last couple of weeks. Everybody's excited, ready to get into 0:18:51.000 --> 0:18:52.920 the election probably be a pretty high turned out event. 0:18:53.520 --> 0:18:58.120 So do you feel that the Senate's in play barely? 0:18:59.119 --> 0:19:01.960 Yeah, want to be too optimistic about it. I would 0:19:02.040 --> 0:19:05.080 anticipate that Republicans are still the majority next year. 0:19:05.400 --> 0:19:08.160 And in the House, I think the House should flip. 0:19:08.440 --> 0:19:11.639 Just statistically, they should flip by anywhere between you know, 0:19:11.880 --> 0:19:13.560 five and twenty five seats. 0:19:13.680 --> 0:19:15.600 Take us back to Civix one on one, What does 0:19:15.640 --> 0:19:16.720 that mean for the president? 0:19:17.400 --> 0:19:22.360 That means indictments, That means all day, every day, oversight, investigation, 0:19:22.720 --> 0:19:26.720 subpoenas for every cabinet, secretary, every official. You'll usually see 0:19:26.840 --> 0:19:30.479 massive turnover in an administration in that scenario, but Trump's 0:19:30.520 --> 0:19:33.000 life gets very uncomfortable, which is obviously why they're trying 0:19:33.080 --> 0:19:35.840 so hard to redistrict Texas for example. 0:19:36.000 --> 0:19:39.479 Well, you're so savvy at this, and Paul's got eighteen 0:19:39.600 --> 0:19:42.159 questions I should cut in by hand. Is he a 0:19:42.320 --> 0:19:46.440 lame duck the first Wednesday of November twenty twenty six? 0:19:47.640 --> 0:19:47.800 Yeah? 0:19:47.880 --> 0:19:48.320 Absolutely. 0:19:48.320 --> 0:19:50.639 If Democrats win the House the second they're sworn in, 0:19:51.000 --> 0:19:51.920 over it's over. 0:19:52.240 --> 0:19:52.440 Yeah. 0:19:52.960 --> 0:19:55.160 But you know, in this administration, he's doing so much 0:19:55.200 --> 0:19:58.639 with tariffs and executive actions that even though he's already 0:19:58.680 --> 0:20:03.280 a lame duck president, already the last administration that he'll have. It's, 0:20:03.800 --> 0:20:06.600 you know, guns blazing all the way, no shortage of activity. 0:20:06.760 --> 0:20:10.800 So is there any sense that the Democratic Party needs 0:20:10.840 --> 0:20:16.600 a just a fundamental redo to really challenge not just 0:20:16.720 --> 0:20:20.359 President Trump here, but you know, maybe the President Trumps supporters, 0:20:20.400 --> 0:20:23.040 that the MAGA supporters, and just that that that branch 0:20:23.119 --> 0:20:24.880 of the Republican Party which seems to be in such 0:20:25.000 --> 0:20:29.440 control of that party. Is there sense that the Democratic 0:20:29.480 --> 0:20:31.200 Party needs a complete rebrand? 0:20:31.520 --> 0:20:32.119 Absolutely? 0:20:32.200 --> 0:20:33.959 And I think they're having that fight, and they keep 0:20:34.040 --> 0:20:35.800 launching new little child balloons. 0:20:36.200 --> 0:20:38.600 Something's got to stick, but they're trying. 0:20:38.960 --> 0:20:40.040 Henrietta Trees with a. 0:20:40.040 --> 0:20:42.720 Saveta partner, thrilled to ever in the studio here to 0:20:42.800 --> 0:20:45.080 get your last week of the summer started futures at 0:20:45.160 --> 0:20:48.480 negative twenty, the Vicks of fourteen level pulls back fifteen 0:20:48.600 --> 0:20:49.400 point one four. 0:20:49.800 --> 0:20:53.639 But there is a cadence in August cadence to it 0:20:53.840 --> 0:20:56.080 right now, a lot of good economic data coming up 0:20:57.440 --> 0:20:59.000 this week. How's the mayor? 0:20:59.119 --> 0:21:01.600 Yes? Is there an the national interest in the mayor 0:21:01.720 --> 0:21:04.600 race of New York City? Mister momma DONI I guess 0:21:04.640 --> 0:21:06.480 trouble work in the bar this weekend. 0:21:06.920 --> 0:21:08.560 I saw that I don't think I could bench one 0:21:08.640 --> 0:21:11.639 hundred and thirty five. I'm pretty sure that's not what 0:21:11.720 --> 0:21:15.240 I trained for. But yeah, no, I think that there's 0:21:15.280 --> 0:21:17.960 a lot of interest because of the attention that it's 0:21:18.000 --> 0:21:21.159 captured in New York City and the number of you know, 0:21:21.320 --> 0:21:26.520