WEBVTT - Trump Hush Money Trial Closing Arguments 0:00:02.480 --> 0:00:09.840 Bloomberg Audio Studios, podcasts, radio news. 0:00:10.680 --> 0:00:14.480 This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis 0:00:14.480 --> 0:00:17.200 along with Doug Krisner join us each day for the 0:00:17.239 --> 0:00:20.640 stories making news and moving markets in the Asia Pacific. 0:00:20.840 --> 0:00:23.280 You can subscribe to the show anywhere you get your 0:00:23.280 --> 0:00:27.240 podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and 0:00:27.280 --> 0:00:28.640 the Bloomberg Business app. 0:00:29.520 --> 0:00:32.440 All right, let's get to that. Closing arguments in Donald 0:00:32.440 --> 0:00:36.440 Trump's hush money trial today round very long and late. 0:00:36.560 --> 0:00:39.600 Joining us live as Hadrianna Loan Crown, who is a 0:00:39.680 --> 0:00:43.280 national politics reporter. Thank you, Hadriana, really appreciate it you 0:00:43.280 --> 0:00:46.280 were in court today. Now we're going to go through 0:00:46.320 --> 0:00:48.280 what happened. But that was a long day. What an 0:00:48.280 --> 0:00:49.879 adjourney to eight Eastern. 0:00:51.200 --> 0:00:54.080 Yes, it was definitely a long day. We started at 0:00:54.120 --> 0:00:58.240 around nine five, wrapped up at around eight pm. It 0:00:58.400 --> 0:01:04.760 was a six hour long summation from the prosecution. It 0:01:04.920 --> 0:01:06.959 was a bid over two and a half three hour 0:01:07.160 --> 0:01:09.040 to two two and a half hours, i would say, 0:01:09.080 --> 0:01:11.320 for the defense, which is what we began our morning with. 0:01:11.720 --> 0:01:13.760 So it was a long day for sure. 0:01:14.520 --> 0:01:17.479 So let's go through it. Defense first, and the theme 0:01:17.520 --> 0:01:20.360 would be that both Stormy Daniels and Michael co under 0:01:20.480 --> 0:01:21.640 liars correct. 0:01:22.720 --> 0:01:26.720 Right, So essentially Todd Blantz has been arguing that Trump 0:01:26.840 --> 0:01:30.480 committed no crimes in that Stormy Daniels, you know, the 0:01:30.600 --> 0:01:34.480 adult film actress kind of part of the centerpiece of 0:01:34.680 --> 0:01:38.039 this of this big puzzle here, was trying to extort 0:01:38.160 --> 0:01:42.040 money from Trump. In twenty sixteen, Blanch even produced a 0:01:42.160 --> 0:01:45.679 top ten list of reasonable doubts for jurors. Is, as 0:01:45.720 --> 0:01:48.760 you know, all we need is one juror to have 0:01:49.000 --> 0:01:53.600 some form of reasonable doubt to prevent a conviction here, 0:01:53.800 --> 0:01:56.520 and so part of that list included a claim that 0:01:56.600 --> 0:02:01.400 prosecutors failed to produce evidence that Trump used some unlawful 0:02:01.480 --> 0:02:05.080 means to influence the election, that Trump himself never reviewed 0:02:05.200 --> 0:02:07.920 checks he signed for Michael Cohen because he was too 0:02:08.000 --> 0:02:10.960 busy running the country, kind of portraying this as something 0:02:11.080 --> 0:02:15.040 that his associates had done without him being aware, because 0:02:15.120 --> 0:02:18.679 he was in the capacity of president and therefore was 0:02:18.800 --> 0:02:21.280 not paying attention to this issue. So that was really 0:02:21.360 --> 0:02:23.200 what Blant was trying to argue here. 0:02:23.880 --> 0:02:27.679 Yeah, Now, the prosecution its job then was to go 0:02:27.880 --> 0:02:31.720 back and try to back up what Cohen and Daniels 0:02:31.800 --> 0:02:33.720 had testified, right. 0:02:33.720 --> 0:02:36.040 And so we knew all along, I mean, having Michael 0:02:36.120 --> 0:02:41.239 Cohen be the star witness could be potentially risky for 0:02:41.480 --> 0:02:45.240 the prosecution just given of course his own criminal history. 0:02:45.360 --> 0:02:49.280 So a big part of you know, the direct and 0:02:50.000 --> 0:02:53.040 the you know, the questioning of Cohen as well as 0:02:53.160 --> 0:02:56.160 now here in the wrap up for the prosecution has 0:02:56.400 --> 0:03:01.400 been to try to get around Cohen's credibility problems, really 0:03:01.880 --> 0:03:06.880 pointing to evidence instances of corroboration with other witnesses that 0:03:06.960 --> 0:03:09.760 were called to testify, such as David Pecker, who was 0:03:10.120 --> 0:03:13.160 who you know, ran a natural inquirer, which, as we 0:03:13.240 --> 0:03:16.400 all know from earlier in the trial, had agreed to 0:03:17.120 --> 0:03:19.720 be the kind of eyes and ears of of the 0:03:19.960 --> 0:03:24.200 campaign and catch and kill really you know, buying stories 0:03:24.440 --> 0:03:26.880 that were negative about Trump and then not publishing them, 0:03:27.120 --> 0:03:30.079 publishing hit pieces on Trump's opponents, and then also publishing 0:03:30.240 --> 0:03:33.600 positive pieces on Trump. So a big part of the 0:03:33.680 --> 0:03:37.600 prosecution was to again, uh, try to get other you know, 0:03:37.680 --> 0:03:40.000 try to prove that there wasn't as much of a 0:03:40.120 --> 0:03:43.440 credibility issue with Cohen, that there were other witnesses to 0:03:43.560 --> 0:03:46.240 corroborate it, as well as to lay out it's you know, 0:03:46.680 --> 0:03:50.120 their own evidence with phone wrecords, et cetera, showing that 0:03:50.240 --> 0:03:52.440 Trump did in fact know that all of this was 0:03:52.520 --> 0:03:55.440 taking place, even using his own tweets where he, you know, 0:03:55.560 --> 0:03:59.400 said very plainly this was a reimbursement to Michael Cohen. 0:04:00.160 --> 0:04:03.320 Now, just go through the ground rules here. The prosecution 0:04:04.040 --> 0:04:06.600 had to raise the bar to election fraud to make 0:04:06.680 --> 0:04:09.360 this a felony. Is there any way that the jury 0:04:09.400 --> 0:04:11.160 and we understand they come back tomorrow, I'll ask you 0:04:11.200 --> 0:04:13.440 about that that the jury or the judge can come 0:04:13.520 --> 0:04:17.080 back and say no felony, but convict of a misdemeanor. 0:04:19.040 --> 0:04:24.840 That's I mean, that's something that is something that I 0:04:24.880 --> 0:04:28.560 think we'll learn more about tomorrow because the judge has 0:04:28.680 --> 0:04:31.120 to kind of instruct the jury. He's going to spend 0:04:31.120 --> 0:04:34.120 about an hour or so tomorrow morning. They're coming back 0:04:34.160 --> 0:04:36.280 at ten. Usually it's nine thirty, but we get a 0:04:36.360 --> 0:04:39.640 half hour of sleeping in so the judge will really 0:04:40.400 --> 0:04:44.000 walk the jury through exactly what is needed, what can 0:04:44.200 --> 0:04:47.080 be concluded at the end of the deliberation. So we'll 0:04:47.160 --> 0:04:49.360 definitely get more details about that tomorrow. 0:04:49.880 --> 0:04:52.359 Okay, And as you say, they come back at ten Eastern, 0:04:53.880 --> 0:04:57.039 not knowing there is no way to predict what juries 0:04:57.080 --> 0:04:59.520 will do and this needs to be unanimous to get 0:04:59.520 --> 0:05:02.680 a felony. Have you heard any feeling you were in 0:05:02.760 --> 0:05:05.800 the courtroom, any gut and I know you're a reporter, 0:05:06.000 --> 0:05:09.680 but any gut on on who was stronger here or 0:05:09.720 --> 0:05:10.600 what we're going to look for. 0:05:12.120 --> 0:05:14.280 Well, you know, it's interesting. There are a couple of 0:05:14.279 --> 0:05:17.880 things to point out here. One is, obviously the prosecution 0:05:18.160 --> 0:05:21.360 is kind of the last taste in the jurors you 0:05:21.440 --> 0:05:25.840 know minds, and so earlier on today we had Blanche 0:05:25.960 --> 0:05:29.120 kind of repeatedly say, you know, here's an instance of 0:05:29.240 --> 0:05:32.440 Cohen lying in the past. Here's another instance, really trying 0:05:32.600 --> 0:05:36.480 to prove that they should not rely on Cohen to 0:05:36.680 --> 0:05:39.760 make their decision. And at the end of that, you know, 0:05:39.920 --> 0:05:42.600 one might say, you know, that was pretty strong. Okay, 0:05:42.680 --> 0:05:45.040 I'm seeing this. He's a liar. Why should I trust him? 0:05:45.080 --> 0:05:45.200 Right? 0:05:45.360 --> 0:05:48.520 But then you go on to the prosecution. Obviously it 0:05:48.640 --> 0:05:51.920 was six hours, there was a lot more, you know, 0:05:52.040 --> 0:05:56.120 kind of painstakingly walking through so many different pieces of evidence. 0:05:56.320 --> 0:05:58.720 A lot of the evidence, as I just said, was 0:05:58.880 --> 0:06:02.720 Trump himself showing that he had knowledge of what was 0:06:02.800 --> 0:06:05.520 going on. Again, a tweet saying it was a reimbursement 0:06:06.000 --> 0:06:09.760 you know of documents with Alan Weisselberg, the CFO, his 0:06:10.040 --> 0:06:13.400 handwriting and all of these different pieces. So after that, 0:06:13.560 --> 0:06:16.480 I mean, I think that anyone who was kind of 0:06:16.560 --> 0:06:20.279 worried about Cohen now realizes, well, it's not just Cohen 0:06:20.680 --> 0:06:23.479 as maybe they had thought before. They're reminded of every 0:06:23.600 --> 0:06:26.160 single witness before that, because there were you know, a 0:06:26.240 --> 0:06:29.599 dozen or so witnesses, and so because the prosecution spent 0:06:29.680 --> 0:06:32.560 a lot of time detailed detailing that, I think that 0:06:32.720 --> 0:06:35.080 does suggest or you know, maybe poke holes a bit 0:06:35.120 --> 0:06:39.400 at the defense's argument, which really focused around Cohen Cohen Cohen. 0:06:39.800 --> 0:06:41.840 So I think that that could have been, you know, 0:06:42.200 --> 0:06:44.520 a choice that maybe ends up backfiring on them. And 0:06:44.560 --> 0:06:48.320 then of course something to consider in our attempt to 0:06:48.839 --> 0:06:51.480 you know, figure out in advance what could happen is 0:06:51.560 --> 0:06:54.440 how long the jury takes to deliberate. And what I'm 0:06:54.480 --> 0:06:57.080 hearing from sources who I'm speaking with is that generally 0:06:57.240 --> 0:07:01.000 the longer the deliberations, the more likely it is that 0:07:01.080 --> 0:07:03.920 they you know, maybe a hung juries or something else 0:07:04.240 --> 0:07:06.960 that would you know, rule in I guess you could 0:07:07.000 --> 0:07:09.680 say the favor of Trump or not in the favor 0:07:10.000 --> 0:07:12.040 of the prosecution, So that's something we'll keep an eye 0:07:12.080 --> 0:07:12.760 out for as well. 0:07:12.920 --> 0:07:15.640 Yeah yeah, and the as you say, the instructions tomorrow. 0:07:15.960 --> 0:07:18.920 Great job, Hedriana, Thank you. We really appreciate your time. 0:07:19.200 --> 0:07:22.240 That is a Adriana loenkra on that National politics reporter 0:07:22.400 --> 0:07:24.920 if she was in the court room at today, and 0:07:25.920 --> 0:07:30.440 a lot for the jury to consider. In San Francisco, 0:07:30.520 --> 0:07:31.640 I'm a boxer. 0:07:38.400 --> 0:07:41.880 Joining us now with Sarah Malick Cio of Vene for 0:07:42.440 --> 0:07:45.480 her take on markets. Sarah, I think we can talk 0:07:45.520 --> 0:07:47.840 about a lot of different asset classes. I know you're 0:07:47.960 --> 0:07:51.520 quite gifted in that regard, but let's start off first 0:07:51.600 --> 0:07:53.960 with I think the perception is that stocks have been 0:07:54.040 --> 0:07:57.480 rallying like crazy, and it's not totally the case. I mean, 0:07:57.520 --> 0:08:00.400 we have seen the S and P five hundred bound 0:08:00.480 --> 0:08:03.160 from a bit of a sell off in April, and 0:08:03.280 --> 0:08:04.640 I was just having to look at some of the 0:08:04.760 --> 0:08:09.280 key names. If you look at companies like Microsoft and Amazon, 0:08:09.400 --> 0:08:12.480 they're basically flat over the past three months. Meta is 0:08:12.480 --> 0:08:15.360 actually down a little over the last three months, and 0:08:15.440 --> 0:08:18.040 you have Apple, which has made a comeback. So it's 0:08:18.080 --> 0:08:19.920 a little bit of mix and match there in the market. 0:08:20.040 --> 0:08:21.120 So what do you like at the moment? 0:08:22.680 --> 0:08:26.480 Well, I think definitely, the market rally has been fairly narrow. 0:08:27.080 --> 0:08:29.280 First of all, it's been wrapped up by the strength 0:08:29.320 --> 0:08:31.840 of Nvidia and their earnings last week. And Apple was 0:08:31.880 --> 0:08:34.520 another company you brought up. And Apple actually, you know, 0:08:34.559 --> 0:08:37.319 the while a quarter was not incredibly impressive because the 0:08:37.320 --> 0:08:39.800 stock was so under owned. That's why Apple rallied. 0:08:40.040 --> 0:08:40.160 You know. 0:08:40.240 --> 0:08:41.760 What I make of the market though, is that there's 0:08:41.800 --> 0:08:44.760 two drivers from here, and that's earnings and the economy. 0:08:45.120 --> 0:08:47.960 First quarter earnings were very strong. Eighty percent of companies 0:08:48.120 --> 0:08:50.760 beat earnings estimates and that's a big driver for the markets. 0:08:50.840 --> 0:08:54.680 And then the economy has remained fairly strong. Manufacturing data 0:08:54.720 --> 0:08:57.160 has been you know, somewhat on the stronger side. Perils 0:08:57.240 --> 0:09:00.400 data remains fairly strong. And all of that means our 0:09:00.400 --> 0:09:04.120 economy is still growing while inflation has stopped reaccelerating like 0:09:04.240 --> 0:09:06.719 we saw earlier this year. So all that together is 0:09:06.800 --> 0:09:09.760 why the market continues to have a strong performance. 0:09:10.800 --> 0:09:14.120 Yeah, the environment feels pretty good. It seems like I mean, 0:09:14.160 --> 0:09:17.000 if you go back and look at the two year yield, 0:09:17.120 --> 0:09:19.719 the last time it was close to five percent, like 0:09:19.800 --> 0:09:23.800 this because investors you get nervous about rising market interest rates. 0:09:24.600 --> 0:09:27.640 The SEB five hundred was a thousand points lower, so 0:09:27.760 --> 0:09:31.000 we've gained a thousand points. That yield on the two 0:09:31.080 --> 0:09:35.079 year basically sideways the level that the two years at 0:09:35.160 --> 0:09:38.760 is essentially I guess telling you you might only get one, 0:09:39.559 --> 0:09:43.240 maybe two cuts from the FED over the next two years, 0:09:44.040 --> 0:09:47.000 and yet the markets have hung in there. And I 0:09:47.080 --> 0:09:49.880 think it's interesting that you mentioned in Nvidia, but a 0:09:49.920 --> 0:09:51.920 lot of the companies that might be riding on the 0:09:52.040 --> 0:09:55.719 back of Nvidia companies that I mentioned, like Amazon and 0:09:55.840 --> 0:09:59.160 Microsoft and Google. While Google's done pretty well, some of 0:09:59.160 --> 0:10:01.240 the others didn't really do much over the past month. 0:10:01.320 --> 0:10:03.040 So it does leave you with a lot of choices 0:10:03.559 --> 0:10:06.679 here in if you're trying to play AI, where to 0:10:06.800 --> 0:10:09.280 go to maybe get some games. 0:10:10.640 --> 0:10:13.640 Well, there's very limited winners in the AI space at 0:10:13.679 --> 0:10:16.319 this point that win no matter what. And those two 0:10:16.360 --> 0:10:18.960 companies are first of all, in Vidia because it basically 0:10:19.040 --> 0:10:22.120 supplies to anyone trying to grow in the AAI space, 0:10:22.320 --> 0:10:25.160 and secondive Microsoft, which has had a very strong lead 0:10:25.240 --> 0:10:27.959 and head start in artificial intelligence by spending tens of 0:10:28.040 --> 0:10:30.600 billion in that area. So those are the two key players. 0:10:30.960 --> 0:10:33.560 That's one reason why Nvidia continues to perform well. Second, 0:10:33.880 --> 0:10:36.319 for those concerned about Nvidia and the rally that it's had, 0:10:36.520 --> 0:10:39.520 if you look at Nvidia's EE ratio versus the semic 0:10:39.559 --> 0:10:42.079 inductor space for twenty twenty five in video is actually 0:10:42.120 --> 0:10:44.960 still trading at a discount, So the argument that Invidia 0:10:45.120 --> 0:10:49.280 is expensive really doesn't hold true. As for the markets 0:10:49.320 --> 0:10:52.679 going higher from here, you know, continued consumer spending has 0:10:52.720 --> 0:10:57.120 been what's driven the markets higher, and inflation has stopped 0:10:57.200 --> 0:10:59.520 reaccelerating like it did earlier this year. So when we 0:10:59.559 --> 0:11:02.319 talk about less FED rate cuts than expected, and why 0:11:02.400 --> 0:11:04.839 are the markets okay with that, it's because the FED 0:11:04.960 --> 0:11:07.360 is cutting less for the right reasons, and those reasons 0:11:07.400 --> 0:11:10.559 are that the economy remains strong. So the Fed is said, Okay, 0:11:10.600 --> 0:11:12.199 we don't need to cut as much because we're not 0:11:12.520 --> 0:11:13.960 imminently going into a recession. 0:11:14.760 --> 0:11:17.600 You know, at some point the bond vigilantes may come back. 0:11:17.880 --> 0:11:21.840 We saw a little bit of weak auction sales today. 0:11:22.360 --> 0:11:25.720 It kind of brings to mind what happens when investors 0:11:25.800 --> 0:11:29.520 finally get worried about debt and deficits. Are we there yet? 0:11:30.880 --> 0:11:32.480 You know, I don't think we're there yet, but it 0:11:32.600 --> 0:11:35.360 is definitely a concern when we look at the level 0:11:35.440 --> 0:11:38.079 of US debt and interest rates that are going to 0:11:38.160 --> 0:11:40.160 stay higher for longer. I think that is a long 0:11:40.240 --> 0:11:43.320 term structural issue for the US, except it's not something 0:11:43.360 --> 0:11:45.000 as we can see with the markets up you know, 0:11:45.120 --> 0:11:47.240 quite nicely year to date, that the markets are that 0:11:47.400 --> 0:11:50.000 concerned about, you know, switching over to fixed income as 0:11:50.040 --> 0:11:51.920 an asset class. I think, you know, what you can 0:11:52.000 --> 0:11:54.240 lock in now is yield in certain areas that we 0:11:54.320 --> 0:11:56.880 haven't seen in many years than often times decades. So 0:11:57.240 --> 0:12:01.840 fundamentally strong acet classes like municipal bonds, high yield municipal 0:12:01.880 --> 0:12:04.080 bonds are offering very attractive yeals at this point. 0:12:05.440 --> 0:12:08.840 Are you seeing any attractive options in Asia at the moment? 0:12:08.920 --> 0:12:11.480 I mean, obviously this is Bloomberg daybreak Asia. We tend 0:12:11.800 --> 0:12:14.720 to focus on Asia once we get past the initial 0:12:14.760 --> 0:12:17.040 Wall Street wrap up. What do you like out here? 0:12:18.440 --> 0:12:20.640 Yeah? Sure, So two things we think about with Asia 0:12:20.720 --> 0:12:23.880 and markets outside of the US, and that's currency and 0:12:24.120 --> 0:12:26.319 what's going on with inflation. You know, with currency, I 0:12:26.360 --> 0:12:28.960 think that could be a positive outside of the US 0:12:29.080 --> 0:12:31.559 because as the FED finally gets the rate cuts or 0:12:31.640 --> 0:12:34.520 the economy starts to slow, that should make the dollar 0:12:34.559 --> 0:12:36.520 a little bit weaker here and that's more positive for 0:12:36.720 --> 0:12:40.040 international investments for Asia. I think Japan still has a 0:12:40.080 --> 0:12:43.079 lot of legs, strong corporate governments and strong earnings or 0:12:43.160 --> 0:12:47.480 drivers there. And we have three themes in Japan reopening, reflation, 0:12:47.640 --> 0:12:51.199 and restoring post the pandemic. We like sectors like defense, 0:12:51.600 --> 0:12:55.800 artificial intelligence because of the demographics issues in Japan, exporters 0:12:55.840 --> 0:12:59.000 as the end may weaken from here. And also we 0:12:59.240 --> 0:13:03.319 like companies outside of Japan in areas for example, that 0:13:03.400 --> 0:13:05.839 are exposed to China, which is kind of lagged, and 0:13:05.880 --> 0:13:07.959 as that perhaps comes back with some spending, I think 0:13:08.000 --> 0:13:10.520 that could be positive for China exposed companies. 0:13:11.640 --> 0:13:15.520 Bloomberg did a survey of a dozen economists looking at China, 0:13:15.600 --> 0:13:18.319 looking at the property market and the efforts that we've 0:13:18.400 --> 0:13:21.719 seen here of late in terms of pushing some of 0:13:21.720 --> 0:13:25.080 the big cities to lower some of their buying restrictions 0:13:25.160 --> 0:13:27.360 for housing. It seems to be working a little bit. 0:13:27.520 --> 0:13:31.280 According to this survey, seven out of twelve respondents see 0:13:31.360 --> 0:13:35.600 a jump across the board in China and they're seeing 0:13:35.679 --> 0:13:39.000 growth improve. The economists see growth in twenty twenty four, 0:13:39.440 --> 0:13:41.959 edging up to four point nine percent. How much of 0:13:42.040 --> 0:13:46.040 a concern for you is the property sector and whether 0:13:46.120 --> 0:13:47.840 or not it's ongoing in terms of stress. 0:13:49.080 --> 0:13:51.640 Yeah, two areas of concern for us in China. One 0:13:51.760 --> 0:13:54.640 is the property sector. Two is trade issues with other 0:13:54.679 --> 0:13:58.280 countries doing less trade with China, including US. China has 0:13:58.360 --> 0:14:01.440 bounced off the bottom as folio managers from a global 0:14:01.480 --> 0:14:03.719 basis have come back in to buy in China. We 0:14:03.800 --> 0:14:06.320 have seen a pickup in some of the electronic spaces 0:14:06.600 --> 0:14:09.240 and luxury apparel spaces. But I think those two structural 0:14:09.280 --> 0:14:12.080 issues of trade and property are still ones that China 0:14:12.160 --> 0:14:14.199 may need to overcome. So you know, the question of 0:14:14.360 --> 0:14:17.199 do you want to chase China from here after you 0:14:17.280 --> 0:14:19.120 know some of the bounce off the bottom that we've seen. 0:14:19.440 --> 0:14:21.520 I would like to see more progress with the property 0:14:21.560 --> 0:14:24.480 sector and understand where the trade issues might bottom. 0:14:25.640 --> 0:14:29.760 I've been looking very carefully at ways of playing you know, 0:14:29.880 --> 0:14:33.400 derivative plays on AI and you know, some of them, 0:14:33.680 --> 0:14:36.560 like the independent power producers and utilities, they've already seen 0:14:36.600 --> 0:14:38.560 a big balance. A piece are kind of high. So 0:14:38.680 --> 0:14:40.440 let me put it to you, what's your number one 0:14:40.600 --> 0:14:42.880 pick in the AI sphere. 0:14:44.160 --> 0:14:46.200 I think you know, you can look outside of in video. 0:14:46.240 --> 0:14:48.520 You can look at areas that may benefit as AI 0:14:48.680 --> 0:14:52.000 becomes more highly used. So one is infrastructure, which has 0:14:52.080 --> 0:14:54.400 multiple tail on. Number one is we need to build 0:14:54.440 --> 0:14:57.600 more manufacturing. This is US infrastructure in the United States 0:14:57.640 --> 0:15:00.640 and even global infrastructure. You know, in order to meet 0:15:00.680 --> 0:15:04.280 the needs of artificial intelligence. Infrastructure will benefit. Second trend 0:15:04.320 --> 0:15:07.400 for infrastructure renewable energy. As we upgrade our grids, will 0:15:07.440 --> 0:15:10.400 need more renewable energy and more infrastructure. And then we 0:15:10.560 --> 0:15:13.200 look across sectors like healthcare and financial services that use 0:15:13.200 --> 0:15:16.160 a ton of data, which is also very promising targets. 0:15:16.560 --> 0:15:18.960 All right, Sarah, thanks so much for joining us. Sarah Malex, 0:15:19.040 --> 0:15:30.160 cio of newbe Charlie Ripley, Senior investment strategist at Alian's 0:15:30.280 --> 0:15:34.040 Investment Management for our Closer look at markets, Charlie. In 0:15:34.160 --> 0:15:37.320 some ways, the auctions grabbed the most attention today. The 0:15:37.400 --> 0:15:41.000 US Treasury sold seventy billion dollars of five year notes 0:15:41.080 --> 0:15:43.880 at four point five to five three percent. That was 0:15:43.960 --> 0:15:46.600 above the pre auction level of four point five to 0:15:46.640 --> 0:15:49.520 four percent. It doesn't sound like a lot, but it 0:15:49.640 --> 0:15:52.960 did send ripples through the market and yields did pop 0:15:53.040 --> 0:15:57.160 on that up eight basis points. Are the bond vigilantes 0:15:57.640 --> 0:15:58.880 getting ready to do their thing? 0:16:00.920 --> 0:16:02.120 Hi, Brian, thanks for having me on. 0:16:02.320 --> 0:16:02.520 Yeah. 0:16:02.840 --> 0:16:05.840 You know, when you look at today's auction set, you know, 0:16:06.480 --> 0:16:08.520 there is a different set of investors that invest in 0:16:09.120 --> 0:16:10.960 you know, the three year and the five year and 0:16:11.000 --> 0:16:13.880 the seven year space. And you know, I think today's 0:16:13.920 --> 0:16:16.880 tailing auctions, you know, probably did feed into some of 0:16:16.920 --> 0:16:19.400 that negative pricing that we saw on the bond market, 0:16:19.520 --> 0:16:22.200 but I don't think it's going to be particularly reflective 0:16:22.280 --> 0:16:24.400 of what we what we might see and you know, 0:16:24.480 --> 0:16:27.000 maybe the longer end of the curve, you know, I 0:16:27.040 --> 0:16:29.160 think those are a different set of investors, you know, 0:16:29.200 --> 0:16:32.160 particularly insurance investors that are looking for longer duration. So 0:16:33.200 --> 0:16:35.400 it'll be interesting to see how that plays out next month, 0:16:35.520 --> 0:16:38.800 but you know, it's likely not you know, a precursor 0:16:38.920 --> 0:16:41.520 to to what we'll see at auctions next month. 0:16:43.080 --> 0:16:45.240 There was a Wall Street Journal story just a short 0:16:45.280 --> 0:16:47.880 while ago that broke, and I just want to mention 0:16:48.000 --> 0:16:51.320 it briefly and then ask you a question about M 0:16:51.360 --> 0:16:54.160 and a murk. According to the Wall Street Journal, is 0:16:54.240 --> 0:16:57.960 nearing one point three billion dollar deal for an eye 0:16:58.040 --> 0:17:02.280 drug company called I Biotech. We did actually have a 0:17:02.360 --> 0:17:08.200 flurry of deals getting some coverage today in the marketplace. Obviously, 0:17:08.280 --> 0:17:11.919 the big one was Hess Investors approving the Chevron fifty 0:17:11.960 --> 0:17:15.520 three billion dollar takeover, but another one involving energy trends 0:17:15.600 --> 0:17:21.320 for acquiring assets from WTG and also T Mobile acquiring 0:17:21.600 --> 0:17:25.480 some of US Cellular's wireless operations. And it bigs the 0:17:25.600 --> 0:17:28.240 question about whether this pickup in M and A that 0:17:28.280 --> 0:17:31.200 we're seeing, is it sending a broad message or is 0:17:31.280 --> 0:17:32.160 it too early to say. 0:17:33.560 --> 0:17:36.040 You know, I think it's too early to say. You know, typically, 0:17:36.600 --> 0:17:38.920 you know, in a higher rate environment, it's harder to 0:17:38.960 --> 0:17:42.080 see some of these larger M and A deals get 0:17:42.119 --> 0:17:44.800 through with interest rates at these levels. So you know, 0:17:44.880 --> 0:17:47.280 I think, you know, because we've been at you know, 0:17:47.359 --> 0:17:50.280 high interest rate levels for some time, maybe there's a 0:17:50.320 --> 0:17:53.400 little bit less patience to get some of these deals done. 0:17:53.480 --> 0:17:55.600 But you know, I think the real catalyst is going 0:17:55.680 --> 0:17:58.040 to be, you know, a lower interest rate environment that 0:17:58.160 --> 0:18:00.920 really drives you know, additional M and A activity. 0:18:01.520 --> 0:18:04.480 And do you see a lower interest rate environment coming. 0:18:06.320 --> 0:18:08.080 That's a great question. And I think, you know, when 0:18:08.119 --> 0:18:10.720 you look at the set of probabilities and you know, 0:18:10.800 --> 0:18:13.520 a data dependent FED and and you know everything that's 0:18:13.560 --> 0:18:15.840 happening on the inflation front. You know, I think the 0:18:15.920 --> 0:18:19.840 path of probabilities is a little bit wider than expected, 0:18:19.880 --> 0:18:21.560 and you know, I think people are a little bit 0:18:21.640 --> 0:18:25.920 less convicted about the directions of rates in this environment. 0:18:26.320 --> 0:18:28.600 You know, you did mention we have seen, you know, 0:18:28.720 --> 0:18:31.920 some mixed data sets on the economic front, and even 0:18:31.960 --> 0:18:34.160 when you look at the FED speak from policy makers, 0:18:35.320 --> 0:18:37.960 you know, Neil cash Car's comments today, you know, alluded to, 0:18:38.640 --> 0:18:41.320 you know, the potential for rate hikes should they need 0:18:41.400 --> 0:18:45.040 to move in that direction. So, you know, against this 0:18:45.160 --> 0:18:48.040 backdrop where you know, we have a very data dependent 0:18:48.119 --> 0:18:51.520 FED and a very reactionary function from them, you know, 0:18:51.560 --> 0:18:53.720 I think it's going to be you know, difficult to 0:18:53.800 --> 0:18:56.640 have a high conviction of of of anything in any 0:18:56.720 --> 0:19:00.760 direction if they're basing policy specifically on inflation data. 0:19:01.640 --> 0:19:01.840 Yeah. 0:19:02.000 --> 0:19:04.639 Is it dangerous to a certain extent that the FED 0:19:05.000 --> 0:19:09.200 is data dependent in that it's sort of disallowing itself 0:19:09.200 --> 0:19:11.160 from getting out in front of something. And I talk 0:19:11.160 --> 0:19:15.439 about that because you have a lag in the lag defect, 0:19:15.520 --> 0:19:19.320 I mean, we're we're not seeing the strong impact on 0:19:19.400 --> 0:19:23.240 the economy that we expected from higher interest rates, and 0:19:23.480 --> 0:19:27.320 we're also seeing a kind of slow lag in inflation 0:19:27.480 --> 0:19:30.080 coming down to where we think it should be. So 0:19:30.560 --> 0:19:32.960 should the should the Fed make a call and act 0:19:33.080 --> 0:19:34.480 on it, or do you think it's right to be 0:19:34.600 --> 0:19:35.280 data dependent? 0:19:36.880 --> 0:19:39.000 You know, I think they they've committed to the data 0:19:39.080 --> 0:19:43.080 dependent you know, transparency view. You know, you look at 0:19:43.640 --> 0:19:45.800 you know, December of last year. You know, they'll let 0:19:45.840 --> 0:19:48.440 the proverbial genie out of the out of the out 0:19:48.480 --> 0:19:51.239 of the bottle when they decided to forecast three rate 0:19:51.320 --> 0:19:53.679 cuts for the year. And you know, perhaps maybe they 0:19:53.720 --> 0:19:55.760 did get a little bit ahead of themselves and in 0:19:55.880 --> 0:19:58.720 terms of being a little bit preemptive there, but you know, 0:19:58.760 --> 0:20:01.080 I think the reality is, you know, that the data 0:20:01.240 --> 0:20:03.880 is moving slower than what they had made it expected 0:20:03.960 --> 0:20:06.160 back then, and they have to adjust to that today. 0:20:06.200 --> 0:20:08.800 And I think that's why we're seeing, you know, market 0:20:08.880 --> 0:20:14.359 pricing from market participants on rate cuts continue to go 0:20:14.520 --> 0:20:16.640 lower and lower, or get pushed out further and further. 0:20:17.280 --> 0:20:21.320 Yeah, we're just reminded sometimes of the differences in the 0:20:21.400 --> 0:20:26.560 way central banks look at interest rates. For instance, in Europe, 0:20:27.119 --> 0:20:32.040 they don't mess around with owner's equivalent rent and so 0:20:32.400 --> 0:20:36.680 our data pumped through their system, inflation would be running 0:20:36.680 --> 0:20:39.960 around two percent, it would be acceptable. But since we 0:20:40.280 --> 0:20:43.920 do have this owner's equivalent rent and you know, sort 0:20:43.920 --> 0:20:48.840 of a lagged input into the numbers from that, we're 0:20:48.880 --> 0:20:52.280 stuck in this position. Do you do you worry that 0:20:53.359 --> 0:20:55.960 that inflation is going to stay high too long? Or 0:20:56.040 --> 0:20:57.720 do you think that, hey, it's really not all that 0:20:57.760 --> 0:21:00.080 bad at these levels. And the reason we and the 0:21:00.119 --> 0:21:01.719 way we know that is look at the markets. 0:21:03.440 --> 0:21:05.440 Yeah, I think that's a great question. You know, obviously, 0:21:05.560 --> 0:21:07.680 in the first half of this year so far, we've 0:21:07.760 --> 0:21:11.680 seen you know, the impact on service inflation, particularly rents, 0:21:11.720 --> 0:21:15.119 and how that's been a legging factor. But you know, 0:21:15.200 --> 0:21:18.600 when we think about how the FED, you know, should 0:21:18.680 --> 0:21:22.720 should position through that, you know, it really makes sense 0:21:23.640 --> 0:21:27.120