WEBVTT - Mega Cap Earnings, Eco Data, Russia Releases US Hostages 0:00:02.920 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.520 --> 0:00:12.880 This is Bloomberg business Week inside from the reporters and 0:00:13.080 --> 0:00:16.640 editors who bring you America's most trusted business magazine, plus 0:00:16.720 --> 0:00:20.840 global business, finance and tech news. The Bloomberg Business Week 0:00:20.880 --> 0:00:25.800 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:29.480 --> 0:00:32.120 I know somebody who's watching all this very very closely. 0:00:32.240 --> 0:00:33.000 It's got to be busy. 0:00:33.040 --> 0:00:36.040 That is Gina Martin Adams. She's Bloomberg Intelligence Chief equity strategist. 0:00:36.080 --> 0:00:39.160 She's here in our Bloomberg Interactive at Brokers Studio. Gina 0:00:39.200 --> 0:00:41.159 on a daylight today and the context stuff. Where we 0:00:41.200 --> 0:00:43.080 are with earning season, Where do we even begin? 0:00:43.400 --> 0:00:46.760 Yeah, good question, you know, you tell me it's been 0:00:46.840 --> 0:00:50.199 so busy between you know, the different policy shifts that 0:00:50.240 --> 0:00:52.240 we've experienced over the last couple of weeks, right in 0:00:52.280 --> 0:00:54.320 the midst of earning season, which is a pretty exciting 0:00:54.360 --> 0:00:58.600 earning season. Frankly, you know, I think big picture where 0:00:58.600 --> 0:01:00.480 we begin is what's happening in the end agregate, and 0:01:00.480 --> 0:01:02.960 what's happening in the aggregate is a pretty significant rotation, 0:01:03.320 --> 0:01:05.319 and we're all kind of trying to dismiss it as 0:01:05.360 --> 0:01:08.520 it is a temporary it's not really lasting. But you know, 0:01:08.640 --> 0:01:12.479 small caps six hundred as an example, is touching close 0:01:12.520 --> 0:01:15.000 to new highs at this point in time. We've seen 0:01:15.040 --> 0:01:19.040 some really strong recovery on the on the policy put trade, 0:01:19.319 --> 0:01:22.160 the Powell trade. What's going to happen at the FED 0:01:22.240 --> 0:01:27.120 is extremely meaningful for driving stocks returns, and fundamentally, what's 0:01:27.160 --> 0:01:30.200 happening outside of the MAG seven is really important to 0:01:30.240 --> 0:01:32.480 keep your eye on. We have seven percent earnings growth 0:01:32.480 --> 0:01:34.880 for that group. It's the first quarter of earnings growth 0:01:34.880 --> 0:01:38.160 since twenty twenty two, So suddenly we're starting to see 0:01:38.200 --> 0:01:41.920 some recovery. Financials have been leading that charge. Small cap 0:01:41.959 --> 0:01:45.480 financials in particular have been surging. We saw a massive 0:01:45.480 --> 0:01:48.480 beat among the financials companies. So what happens with tech 0:01:49.640 --> 0:01:53.400 can be very distracting, right because tech expectations were the highest, 0:01:53.400 --> 0:01:55.760 These were the biggest stocks. But what's happening beneath that 0:01:56.520 --> 0:01:59.560 is very compelling evidence of a pretty big bull market 0:01:59.600 --> 0:02:00.880 starting to emergen. 0:02:00.480 --> 0:02:03.360 Stocks enough to support the overall indices. Though, yes, when 0:02:03.360 --> 0:02:05.080 those other names are so influent. 0:02:04.840 --> 0:02:11.440 Depends on your index, right, the S and P five percent? No, yeah, 0:02:12.040 --> 0:02:15.040 so the MAG seven is just too big. These megacap 0:02:15.040 --> 0:02:17.960 stocks have driven all the valuation rerating so far this year, 0:02:17.960 --> 0:02:19.840 and stocks are up double digits. It's been a great 0:02:19.919 --> 0:02:21.400 year as far as the S and P five hundred 0:02:21.440 --> 0:02:25.520 is concerned, because of that concentrated gain. If those stocks 0:02:25.639 --> 0:02:28.560 turn over and become more volatile, as I think we're 0:02:28.560 --> 0:02:31.280 starting to see, it's really difficult for the rest the 0:02:31.280 --> 0:02:33.640 other four ninety three to make up for that loss 0:02:33.639 --> 0:02:36.200 of leadership. Instead, the S and P five hundred maybe 0:02:36.280 --> 0:02:42.079 churns in a sideways fashion. If the MAGS seven do fine, yeah, 0:02:42.120 --> 0:02:44.680 and the rest is catching up, that's an incredible market. 0:02:45.360 --> 0:02:47.760 And I think that that's actually a possibility given what 0:02:47.800 --> 0:02:49.160 we've seen in earnings so far. 0:02:49.320 --> 0:02:52.760 Well that's in terms of MAG seven or in terms. 0:02:52.600 --> 0:02:54.639 Of the MAG seven. Maybe they're not actually turning over, 0:02:54.680 --> 0:02:57.200 but they're moving into a period of just not no 0:02:57.280 --> 0:03:00.160 longer being leaders on the market, and that's okay. They 0:03:00.160 --> 0:03:01.680 don't have to lead for the S and P five 0:03:01.760 --> 0:03:04.040 hundred to move higher. So it is a critical question 0:03:04.080 --> 0:03:07.880 for the index. Beyond that, non domestic stocks are breaking out, 0:03:07.919 --> 0:03:10.799 small caps are breaking out, sort of global equities are 0:03:10.880 --> 0:03:15.840 suddenly emerging as real possibilities. Japan's been weak without a doubt. 0:03:16.280 --> 0:03:20.280 China is still a little dodgy, but Europe's been doing fantastically, 0:03:20.440 --> 0:03:24.480 Canada's breaking out, so there's there's some interesting opportunities that 0:03:24.520 --> 0:03:25.520 are starting to emerge. 0:03:25.919 --> 0:03:28.120 Is it a long term in your view, trend that 0:03:28.160 --> 0:03:31.240 will start to see diversification away from winners in the 0:03:31.280 --> 0:03:32.920 S and P five hundred? I mean the S ANDP 0:03:33.040 --> 0:03:34.880 has beat everybody for the last three decade. 0:03:34.960 --> 0:03:38.600 Yeah, we should, you know, over a decade. That's a 0:03:38.600 --> 0:03:41.680 little outside my pay grade to be quite honesome. I'll 0:03:41.760 --> 0:03:44.840 just take over the next year ready and go with that. 0:03:44.920 --> 0:03:48.080 But I do think what we should see is some 0:03:48.160 --> 0:03:51.240 of the laggards of this cycle start to catch up. 0:03:51.360 --> 0:03:54.240 And by the cycle, I mean for me, it was 0:03:54.280 --> 0:03:57.080 a critical moment in twenty twenty two when the earning 0:03:57.120 --> 0:03:58.040 stream for the. 0:03:57.960 --> 0:03:59.400 Globe started to turn over. 0:03:59.520 --> 0:04:01.560 The S and P five hundred was at the early 0:04:01.600 --> 0:04:05.480 stages of that. Small caps joined in the party. Europe 0:04:05.560 --> 0:04:09.000 is just now getting past its low point, right. The 0:04:09.080 --> 0:04:11.640 S and P five hundred, led by the megacaps, led 0:04:11.640 --> 0:04:15.320 the uptrend in twenty twenty three. Now we're starting to 0:04:15.320 --> 0:04:18.160 see the rest of the world's economy start to participate. 0:04:18.240 --> 0:04:20.679 And it's difficult to paint it with one big brush 0:04:20.760 --> 0:04:24.080 US versus the rest. It's not necessarily that's not necessarily 0:04:24.120 --> 0:04:27.120 what's going on. But there are some laggards of that 0:04:27.160 --> 0:04:30.440 cyclical recovery that are starting to get on board, and 0:04:30.640 --> 0:04:33.560 I would anticipate that the results of that is some 0:04:33.720 --> 0:04:36.600 of that just hasn't had any attention. Some of those 0:04:36.640 --> 0:04:39.520 stocks just have been left for dead. Looks. You know, 0:04:39.800 --> 0:04:43.120 nobody's even putting any capital to work outside of the 0:04:43.240 --> 0:04:44.440 US and the Megan It's amazing. 0:04:44.480 --> 0:04:47.800 I feel like conversations used to be much more like, oh, yeah, 0:04:47.800 --> 0:04:49.560 you always want to make sure if something overseas, and 0:04:49.600 --> 0:04:51.520 it really has been so US focused. 0:04:51.600 --> 0:04:51.840 Yeah. 0:04:51.880 --> 0:04:54.160 You put out research today right that fed rate cut 0:04:54.240 --> 0:04:58.400 cycles outside of recessions have historically have historically led to 0:04:58.480 --> 0:05:01.800 global risk rally. Yeah, outside of recessions. We had a 0:05:01.800 --> 0:05:04.960 conversation earlier with our Ira Jersey and he's still thinking 0:05:04.960 --> 0:05:07.040 that we're going to get some kind of recession. 0:05:07.560 --> 0:05:10.760 Well, the earnings stream would tell you not, that's not happening. 0:05:11.080 --> 0:05:14.800 So you know, I care most about earnings, and earnings 0:05:14.839 --> 0:05:17.120 went through a recession in twenty twenty two, and they're 0:05:17.120 --> 0:05:21.080 in a recovery. Now will earnings turn over and hint 0:05:21.160 --> 0:05:23.760 some kind of recession emerging in twenty twenty five. That's 0:05:23.800 --> 0:05:26.560 a real possibility, but it's not happening right now. And 0:05:27.320 --> 0:05:30.560 the way that we structure our product is really all 0:05:30.560 --> 0:05:33.000 about real time movements, what's happening in real time, not 0:05:33.080 --> 0:05:35.280 what do we think is going to happen into the future. 0:05:35.360 --> 0:05:37.880 And so from an equities perspective, I think it's important 0:05:37.920 --> 0:05:40.800 to acknowledge where we are in the cycle and where 0:05:40.800 --> 0:05:44.960 we are is actually improving. We're improving off of lows. 0:05:44.960 --> 0:05:47.400 For instance, in Europe. Europe had its worst quarter of 0:05:47.480 --> 0:05:50.440 year over year growth just in the first quarter, and 0:05:50.480 --> 0:05:54.200 it's starting to dig out of that recessionary experience, at 0:05:54.279 --> 0:05:56.280 least in terms of the stock market, right that's not 0:05:56.320 --> 0:05:58.560 necessarily the economy, and I know that there are very 0:05:58.560 --> 0:06:02.000 big differences on occasion. The US is in very similar 0:06:02.120 --> 0:06:05.120 position where we were digging our way out of that 0:06:05.160 --> 0:06:07.960 earnings recession but really just led by a few names. 0:06:08.080 --> 0:06:10.760 Now we're starting to see some real earnings growth emerge 0:06:10.800 --> 0:06:12.840 small caps, for instance. By the end of this year, 0:06:12.880 --> 0:06:14.600 the analyst community is telling us we're going to get 0:06:14.640 --> 0:06:15.680 small cap revenue. 0:06:15.360 --> 0:06:17.320 Growth they've been upping numbers and they've been. 0:06:17.240 --> 0:06:20.599 Moving higher, So I do think it's important to follow 0:06:20.600 --> 0:06:23.919 the c clinton. Certainly, if recessionary signals emerge in the 0:06:23.920 --> 0:06:26.040 earning stream, then I have to get a little bit worried. 0:06:26.880 --> 0:06:29.240 But will we or won't we fall into recession in 0:06:29.279 --> 0:06:31.279 the economy? You know, I think we've I've learned my 0:06:31.400 --> 0:06:33.919 lesson the hard way over the last several years. I 0:06:33.960 --> 0:06:35.919 can't project what the economy is going to do, and 0:06:35.960 --> 0:06:37.839 neither can the stock market, So we're going to stick 0:06:37.880 --> 0:06:39.880 to earnings, and that's what really drives stock prices. 0:06:40.000 --> 0:06:41.960 Do you know one thing that keeps coming up in 0:06:42.000 --> 0:06:44.920 conversations that we have internally when we're planning for our 0:06:44.960 --> 0:06:47.760 show is a conversation that we had with you back 0:06:47.800 --> 0:06:50.560 at Bloomberg invest where you talked about AI and you 0:06:50.640 --> 0:06:53.400 talked about I believe. I asked you the question about 0:06:54.000 --> 0:06:57.800 whether or not we're seeing AI gains show up in 0:06:57.880 --> 0:07:02.520 non AI specific companies, and you said that that hasn't 0:07:02.520 --> 0:07:06.080 happened yet. Here we are, it's only been six weeks 0:07:06.080 --> 0:07:08.520 since we've had that conversation, but we're hearing from more 0:07:08.520 --> 0:07:11.600 companies over the last couple of weeks. About how AI 0:07:11.720 --> 0:07:13.960 is helping them. Has your view shifted at all or 0:07:14.000 --> 0:07:15.760 we still not seeing margin improvement things. 0:07:16.880 --> 0:07:18.800 I think it's early yet in the earning season. I 0:07:18.840 --> 0:07:21.520 need to get further through the consumer numbers and the 0:07:21.520 --> 0:07:25.800 industrials numbers to make really vast conclusions. In financials, which 0:07:25.840 --> 0:07:29.400 was the one area that we already were detecting companies 0:07:29.440 --> 0:07:33.680 talking about implementing AI and utilizing AI to drive growth, 0:07:34.040 --> 0:07:36.440 we are starting to see some real margin improvements, some 0:07:36.480 --> 0:07:39.560 real cost cutting measures. So there's a little bit happening 0:07:39.600 --> 0:07:40.280 in financials. 0:07:40.400 --> 0:07:44.000 What's happening They're able to hire fewer analysts, are they 0:07:44.040 --> 0:07:47.280 able to use get rid of customer service agents because 0:07:47.280 --> 0:07:48.680 they can use chatbots? What do we know? 0:07:49.000 --> 0:07:52.000 Well, so far, what we know is it's making them faster, Okay, right, 0:07:52.080 --> 0:07:54.920 So if anything, it's just making turnover faster. It's not 0:07:55.000 --> 0:07:57.800 necessarily resulting in job cuts, which I think is everybody's 0:07:57.800 --> 0:08:00.000 biggest year is that the bots are going to replace us. 0:08:00.200 --> 0:08:01.680 We haven't necessarily seen that. 0:08:01.920 --> 0:08:02.520 I'm scared of it. 0:08:03.440 --> 0:08:06.760 But it is making existing worksporce faster at what they do, 0:08:06.920 --> 0:08:09.760 so I would say it's just making profitability improvements and 0:08:09.840 --> 0:08:14.200 efficiency gains more than anything else will that change going forward. 0:08:14.240 --> 0:08:16.840 We're certainly open to seeing that. I'm most curious to 0:08:16.840 --> 0:08:19.200 see how it impacts the industrial space in the consumer 0:08:19.320 --> 0:08:23.800 space because those are big, big swaths of the economy 0:08:23.880 --> 0:08:26.240 that can really make a big difference in the overall 0:08:26.280 --> 0:08:30.200 economic outlook. And we just haven't seen enough companies come 0:08:30.200 --> 0:08:33.000 out with reports yet, so we'll see. It is something 0:08:33.000 --> 0:08:36.760 that we're definitely tracking. I think that from a tech perspective, 0:08:36.800 --> 0:08:39.080 it's still very much a big part of the conversation. 0:08:39.920 --> 0:08:41.880 I think you get fits and starts depending upon the 0:08:41.920 --> 0:08:43.760 company that you're talking to as to whether or not 0:08:43.840 --> 0:08:46.040 the analyst community maybe got ahead of their skis and 0:08:46.080 --> 0:08:49.640 anticipating the impact or not. And that's really a company 0:08:49.640 --> 0:08:52.920 to a company specific conversation, and that's having an impact 0:08:52.920 --> 0:08:56.560 on stock prices. But net there, we're still in the upweight. 0:08:56.880 --> 0:08:59.920 Okay, well, but in terms of like fundamental analysis, when 0:09:00.040 --> 0:09:01.599 you look at a company, I feel like you go 0:09:01.679 --> 0:09:04.320 back a year and if somebody reported and they didn't 0:09:04.320 --> 0:09:06.640 talk about AI or talk about how they're planning some 0:09:06.679 --> 0:09:10.120 of their investing, they got penalized in the trade. Now 0:09:10.120 --> 0:09:12.520 it's like we're a little bit more, you know, kind 0:09:12.559 --> 0:09:16.760 of scrutinizing, you know, the CAPEX spend and looking for 0:09:16.800 --> 0:09:19.839 the ROI is that smart to be thinking about that? 0:09:20.000 --> 0:09:21.920 I mean, you know what I think about. Companies have 0:09:22.040 --> 0:09:24.680 to invest for the future, and sometimes it takes a while, 0:09:25.000 --> 0:09:26.200 but I'm curious how you. 0:09:26.120 --> 0:09:26.800 Are looking at them. 0:09:26.880 --> 0:09:31.360 Yeah, I think it's too early for AI specific capital 0:09:31.360 --> 0:09:35.360 spending to really overwhelm capital spending trends across the entire index, 0:09:36.000 --> 0:09:38.160 but it is a really big focus within the tech 0:09:38.160 --> 0:09:41.120 and communications space and the tech I call those tech 0:09:41.120 --> 0:09:44.160 and tech adjacent companies where it is very clear that 0:09:44.200 --> 0:09:46.480 you have to spend and have to now spend smart. 0:09:46.679 --> 0:09:48.200 A year ago you had to spend now you have 0:09:48.240 --> 0:09:51.760 to spend smart. In those groups the rest of the index, 0:09:51.880 --> 0:09:54.440 I think there's a lot of tolerance for spending on this. 0:09:54.840 --> 0:09:57.920 CAPEX is really just at long term average share of sales, 0:09:58.400 --> 0:10:01.520 so we're not looking at an ende that is overspent 0:10:01.800 --> 0:10:05.679 by any stretch of the imagination, and sales are improving incrementally, 0:10:05.800 --> 0:10:07.600 So as long as cash flow and sales are improving, 0:10:07.640 --> 0:10:09.600 there's a lot of wiggle room for them to spend 0:10:09.600 --> 0:10:12.600 a bit more. And frankly, I think that the market 0:10:12.760 --> 0:10:17.719 loves to see spending in the anticipation of future growth prospects. 0:10:18.280 --> 0:10:20.720 So I think that these companies can announce a lot 0:10:20.760 --> 0:10:23.640 more spending outside of tech and tech adjacent without having penalties. 0:10:23.840 --> 0:10:25.840 Kind of explained the metastory right in terms of all 0:10:25.840 --> 0:10:28.880 the spending, and yet they're bread and butter helped by AI. 0:10:29.000 --> 0:10:31.160 But in terms of advertising, even though we can't quite 0:10:31.280 --> 0:10:34.160 quantify maybe the impact, it certainly shows. I want to 0:10:34.200 --> 0:10:35.960 go back to the markets, because here we are looking 0:10:35.960 --> 0:10:37.800 at a day where we are seeing a fair amount 0:10:37.840 --> 0:10:40.040 of selling. I want to go back to something like 0:10:40.080 --> 0:10:43.400 the socks which up seven percent yesterday, down eight percent today, 0:10:43.720 --> 0:10:46.800 Like that's a wide gap. So I'm trying to understand. 0:10:47.000 --> 0:10:49.719 Definitely a lot more volatility in this market, but I'm 0:10:49.760 --> 0:10:51.280 not quite sure what it says to me about kind 0:10:51.280 --> 0:10:53.320 of where we go from here, especially if I hear 0:10:53.360 --> 0:10:56.200 from you that, hey, guys, earnings look pretty good and 0:10:56.240 --> 0:10:58.760 it's widening out just the usual suspects. 0:10:58.880 --> 0:11:01.200 Yeah, I think it's a great point because semiconductors have 0:11:01.280 --> 0:11:05.120 been our fearless leader in this market advance for the 0:11:05.200 --> 0:11:07.640 last year and a half or however long it's been. 0:11:07.720 --> 0:11:11.040 Semiconductors has been this very strong, very big breakout sector, 0:11:11.440 --> 0:11:14.200 and so loss of leadership in semiconductors is always going 0:11:14.240 --> 0:11:16.920 to be someone uncomfortable, and without a doubt, we have 0:11:17.160 --> 0:11:19.120 lost a lot of that leadership. It is now a 0:11:19.200 --> 0:11:23.319 very volatile contributor on a day to day basis. Investors 0:11:23.320 --> 0:11:26.760 are getting a little bit nervous, and justifiably so considering 0:11:27.440 --> 0:11:32.559 how extremely overbought that sector was, and I think this 0:11:32.600 --> 0:11:36.559 is the really important point. New investment opportunities are emerging 0:11:36.640 --> 0:11:39.160 outside of that space. And something we did talk about 0:11:39.200 --> 0:11:41.800 six weeks ago when we were together is we went 0:11:41.840 --> 0:11:46.080 through an anomalous period of time where and AI affiliated organizations, 0:11:46.080 --> 0:11:49.280 in particular semiconductors, really drove all of the optimism on 0:11:49.320 --> 0:11:52.600 the index. It was the only source of sort of 0:11:53.480 --> 0:11:57.839 growth and capital naturally concentrated there. So it has been 0:11:57.960 --> 0:12:00.640 very painful as some of that is unwound and sought 0:12:01.280 --> 0:12:05.080 new sources of opportunity. But in the longer term, it 0:12:05.160 --> 0:12:07.800 is a much healthier market if it has more than 0:12:07.840 --> 0:12:10.960 one leader, and I do think we're moving into a 0:12:11.000 --> 0:12:14.000 slightly healthier market condition, but that can be kind of 0:12:14.040 --> 0:12:17.360 painful in the short run. You know, when you had 0:12:17.400 --> 0:12:20.200 your biggest champion that suddenly kind of takes a back seat, 0:12:20.679 --> 0:12:22.680 and you have all these new smaller leaders kind of 0:12:22.679 --> 0:12:23.240 move forward. 0:12:23.360 --> 0:12:26.040 Gina. One thing that has changed significantly since we last 0:12:26.080 --> 0:12:29.240 spoke to you is what the election looks like in November. Yeah, 0:12:29.280 --> 0:12:31.199 how is your team watching a change at the top 0:12:31.240 --> 0:12:33.360 of the ticket And yeah, who could be in the 0:12:33.360 --> 0:12:34.360 White House come January. 0:12:34.600 --> 0:12:34.840 Yeah. 0:12:34.880 --> 0:12:36.800 I think that there are two issues that are really 0:12:36.840 --> 0:12:40.520 important to watch, and that is how policy prescriptions play 0:12:40.520 --> 0:12:42.520 out on trade and how they play out on tax. 0:12:42.600 --> 0:12:44.720 And what I think is most important to watch in 0:12:44.800 --> 0:12:48.400 this election is really, no matter who you watch, we 0:12:48.520 --> 0:12:52.880 have a populist sort of tax structure that could emerge 0:12:52.880 --> 0:12:54.920 over the course of the next year, no matter who's 0:12:54.960 --> 0:12:57.360 in office. And this is important to consider because I 0:12:57.400 --> 0:13:01.880 think there is a mental constant among most people that 0:13:01.960 --> 0:13:05.520 invest in stocks that there's one party that's historically been 0:13:05.679 --> 0:13:09.600 much friendlier to companies in terms of tax and the 0:13:09.640 --> 0:13:13.000 other one is less friendly. But in this election, it 0:13:13.040 --> 0:13:15.440 looks to us like tax rates are generally going to 0:13:15.520 --> 0:13:18.600 change and go higher, no matter who is at the 0:13:18.600 --> 0:13:20.520 top of the ticket and who wins in November, and 0:13:20.520 --> 0:13:22.920 I think that that's incredibly important to watch. Trade is 0:13:22.920 --> 0:13:25.920 the other issue to watch, but it'll depend upon how 0:13:25.960 --> 0:13:27.840 policy prescriptions evolve over time. 0:13:27.960 --> 0:13:29.960 Any of you who are listening watching missed any of it, 0:13:29.960 --> 0:13:31.880 You got to download our podcasts because that's everything you 0:13:31.920 --> 0:13:34.360 need to know. Thank you as always, Gina Martin Adams 0:13:34.360 --> 0:13:36.360 are Bloomberg Intelligence Chief Equity Strategy. 0:13:37.480 --> 0:13:41.040 You're listening to the Bloomberg Business Week podcast. Catch us 0:13:41.080 --> 0:13:44.319 live weekday afternoons from two to five pm Easter Listen 0:13:44.360 --> 0:13:46.520 on Apple car Play and ed Brout Auto with a 0:13:46.520 --> 0:13:50.199 Bloomberg Business app, or watch US live on YouTube. 0:13:51.400 --> 0:13:54.520 So Market's certainly front and center, but also front and 0:13:54.600 --> 0:13:57.800 center is geo political news. And this has to do 0:13:57.840 --> 0:14:01.280 with Russia, freeing Wall Street Journal reporter Van Gershkovich as 0:14:01.280 --> 0:14:05.000 well as Gerald Kremlin critics in the largest prisoner exchange 0:14:05.000 --> 0:14:07.440 with the Western decades in return for a prized assassin 0:14:07.520 --> 0:14:11.200 sought by President Vladimir Putin. President Biden addressing the exchange, 0:14:11.240 --> 0:14:13.400 calling it a good day earlier from the White House, 0:14:13.559 --> 0:14:15.880 he was surrounded by family members of the four prisoners 0:14:15.880 --> 0:14:17.640 who are now coming home to the US. 0:14:18.200 --> 0:14:20.280 This still would not have been made possible without our 0:14:20.320 --> 0:14:24.720 allies Germany, pauland Slovenia and Norway. In Turkey. They all 0:14:24.720 --> 0:14:27.760 stepped up. The deal that made this possible was a 0:14:27.800 --> 0:14:33.400 feat of diplomacy and friendship. Friendship vulnerable countries help get 0:14:33.400 --> 0:14:38.240 this done. They joined a difficult complex negotiations at my request, 0:14:38.960 --> 0:14:41.440 and I personally thanked them all again. 0:14:41.960 --> 0:14:44.560 That was President Biden. Earlier today from the White House 0:14:44.600 --> 0:14:47.560 with Moore, were joined by doctor Angelas Stant, senior fellow 0:14:47.680 --> 0:14:51.760 at Brookings Institution, also the author of Putin's World, Russia 0:14:51.800 --> 0:14:54.080 Against the West End with the Rest. She's a former 0:14:54.240 --> 0:14:58.040 National intelligence officer for Russia and Eurasia at the National 0:14:58.080 --> 0:15:01.000 Intelligence Council. Also served in the Office Policy Planning at 0:15:01.000 --> 0:15:04.119 the US Department of State. He joins us now from Nantucket. 0:15:04.120 --> 0:15:07.280 Doctor Stent. Always appreciate you taking the time and joining 0:15:07.360 --> 0:15:10.640 us on a Bloomberg business week. Why is this swap 0:15:10.680 --> 0:15:11.680 happening right now? 0:15:12.160 --> 0:15:12.240 So? 0:15:12.360 --> 0:15:14.800 I think, first of all, we have to congratulate the 0:15:14.800 --> 0:15:17.920 Biden administration, the White House Estate Department, all the people 0:15:18.120 --> 0:15:22.280 who work very, very hard and tirelessly to get this done. 0:15:22.440 --> 0:15:26.400 I think it's happening now because Putin really wanted this 0:15:26.560 --> 0:15:29.840 assassin from Germany back. I think the message that he's 0:15:29.880 --> 0:15:32.320 trying to send to his own people when they try 0:15:32.360 --> 0:15:35.280 and recruit them to join the intelligence services. You know, 0:15:35.320 --> 0:15:37.160 we have your back, and we're not going to let 0:15:37.200 --> 0:15:40.160 you die in some other prison you know where. We're 0:15:40.160 --> 0:15:41.920 going to take care of you. So I think it 0:15:41.960 --> 0:15:44.560 was very important for him to get this particular man back. 0:15:45.000 --> 0:15:49.120 But also I think it's partly to show that, hey, 0:15:49.800 --> 0:15:53.320 you can negotiate with us, we're reasonable, and to sort 0:15:53.360 --> 0:15:56.200 of make the Ukrainians look as if they're not reasonable 0:15:56.440 --> 0:15:59.400 because right now, of course, the Ukrainians are saying they're 0:15:59.400 --> 0:16:02.040 not going to go negotiate with Russia because there's nothing 0:16:02.240 --> 0:16:04.640 to negotiate. So I suspect there are a number of 0:16:04.720 --> 0:16:09.120 reasons for this, and Putin obviously decided not to wait 0:16:09.400 --> 0:16:11.920 until the US election to do this, but to do 0:16:12.000 --> 0:16:12.760 this now. 0:16:12.960 --> 0:16:16.280 That's what I wondered, Why not wait until the next administration. 0:16:16.440 --> 0:16:19.120 Is there any you think strategizing around that in terms 0:16:19.200 --> 0:16:21.280 of who might ultimately we know we're going to get 0:16:21.280 --> 0:16:23.200 a change. We know it's not going to be President Biden. 0:16:24.000 --> 0:16:25.600 It's either going to be we assume at this point, 0:16:25.640 --> 0:16:29.280 either Donald Trump or Kamala Harris. Do you think any 0:16:29.320 --> 0:16:31.040 of that played in to his thinking? 0:16:31.080 --> 0:16:34.480 Angela, Well, I think when the Kremlin looks at what's 0:16:34.480 --> 0:16:37.920 happening in the US. They see all the polarization and 0:16:37.960 --> 0:16:40.600 the chals here, and they're actually not quite sure what's 0:16:40.640 --> 0:16:44.760 going to happen after November. Don't forget Germany was a 0:16:44.840 --> 0:16:48.080 key country in this because Chancellor Schultz had to agree 0:16:48.160 --> 0:16:51.360 to release an assassin who was in a German prison 0:16:52.440 --> 0:16:55.360 as part of a US deal essentially with Rocha, although 0:16:55.360 --> 0:16:59.479 it was multinational, as President Biden said today in his remarks, 0:17:00.240 --> 0:17:02.200 but they just weren't sure what was going to happen. 0:17:02.240 --> 0:17:05.080 And at least they knew that at this point. And 0:17:05.119 --> 0:17:09.040 apparently Vice President Harris also was negotiating earlier on with 0:17:09.160 --> 0:17:12.000 Chancellor Schultz. She was involved in this, so they knew 0:17:12.040 --> 0:17:15.240 that it could happen with the current people in the administration, 0:17:15.320 --> 0:17:18.800 but they just weren't sure about what would happen after November. 0:17:18.840 --> 0:17:21.159 And I think at that point, who you know, he 0:17:21.240 --> 0:17:25.200 got back a number of spies, you know, the Russians 0:17:25.240 --> 0:17:28.200 got from the Western country spies, and what the West 0:17:28.240 --> 0:17:31.760 got was sixteen people who were essentially political prisoners. It 0:17:31.840 --> 0:17:34.560 was probably viewed to be a better deal for Russia. 0:17:34.400 --> 0:17:37.160 Better deal for Russia, So talk to US a little 0:17:37.200 --> 0:17:39.760 bit about Vidim Krasikov, who was serving a life sentence 0:17:39.760 --> 0:17:41.960 in Germany for a twenty nineteen killing of a Chechen 0:17:42.000 --> 0:17:44.240 separatist in a Berlin park. What do we need to 0:17:44.280 --> 0:17:44.840 know about him? 0:17:45.000 --> 0:17:46.719 So what you need to know about him was that 0:17:46.800 --> 0:17:49.600 you know, he joined the Russian security services. He was 0:17:49.640 --> 0:17:53.399 a trained assassin. He had assassinated other people before, and 0:17:53.480 --> 0:17:56.679 he very methodically planned how he got to Germany. The 0:17:56.760 --> 0:17:59.720 man he killed was a Georgian citizen, but an ethnic 0:17:59.840 --> 0:18:03.439 che who was a rebel and who'd been involved in 0:18:03.480 --> 0:18:06.560 fighting the Russian government, and so he was sent to 0:18:06.600 --> 0:18:10.199 assassinate him. He had, of course a false passport. He 0:18:10.320 --> 0:18:15.600 traveled to Germany via various other countries composed as a tourist, 0:18:15.200 --> 0:18:18.960 and he shot the man in broad daylight in the Teargarten, 0:18:19.040 --> 0:18:22.880 one of the main parks in Berlin. He was apprehended 0:18:22.880 --> 0:18:26.280 shortly thereafter. For years he wouldn't tell them who he 0:18:26.359 --> 0:18:29.480 really was. It took the German police, obviously with other 0:18:29.480 --> 0:18:32.360 in conjunction with other services, trying to figure out who 0:18:32.359 --> 0:18:35.680 the man was. And he was in prison in Germany 0:18:35.680 --> 0:18:38.720 having been convicted of this. So he is a trained 0:18:38.760 --> 0:18:42.680 assassin and from everything. We know Putin really wanted him back. 0:18:42.720 --> 0:18:45.840 He was the number one person that Russia wanted back. 0:18:46.040 --> 0:18:49.119 So if this is maybe a show of faith on 0:18:49.800 --> 0:18:54.320 the part of Russian Russia and Russian President Vladimir Putin, Angela, 0:18:54.520 --> 0:18:56.560 is it also showing that he might be open to 0:18:56.600 --> 0:18:58.920 some kind of negotiation to end this war? 0:19:00.280 --> 0:19:02.119 Ball But you know, if you listen to what National 0:19:02.119 --> 0:19:05.600 Security Advisor Jake Sullivan said earlier today, there really is 0:19:05.600 --> 0:19:10.000 no connection between this prisoner swap, which was meticulously worked 0:19:10.040 --> 0:19:13.720 out over months and which is a kind of a 0:19:13.760 --> 0:19:18.080 finite negotiation, and the much broader question of how would 0:19:18.119 --> 0:19:21.760 you begin negotiations to have a cease fire or to 0:19:21.800 --> 0:19:24.040 see an end to the war with Ukraine. And we 0:19:24.119 --> 0:19:26.480 do know that what Putin would like to use is 0:19:26.520 --> 0:19:29.840 to sit down with the US president two if there 0:19:29.920 --> 0:19:33.600 are going to be negotiations, and President Biden was also 0:19:33.720 --> 0:19:36.840 asked Thatt briefly today that's not going to happen with 0:19:36.960 --> 0:19:40.080 this administration. We don't know about what would happen after. 0:19:39.960 --> 0:19:44.200 January, doctor stan If Americans who travel to Russia understand 0:19:44.200 --> 0:19:48.800 that they could be arrested and held and indeed convicted 0:19:48.880 --> 0:19:51.320 for things that they have no connection to or did 0:19:51.359 --> 0:19:54.159 not do. What are the implications of that for a 0:19:54.240 --> 0:19:57.000 relationship that is certainly already strained. I mean, I think 0:19:57.040 --> 0:19:59.399 about the freedom of the press and the lack of 0:19:59.440 --> 0:20:03.040