WEBVTT - Earnings, Tariffs, and Markets 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 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:26.800 us live on YouTube. 0:00:26.920 --> 0:00:28.920 Joining us out with our interview of the day without 0:00:29.040 --> 0:00:33.160 question is liz Ane Sanders icondic at Charles Schwabs spend 0:00:33.200 --> 0:00:35.840 there for at least I think it's five years, seven years, 0:00:35.840 --> 0:00:39.640 something like that. Joining us in studio Lizzie Saunders today. Okay, 0:00:40.200 --> 0:00:44.000 forget about all the equity discussion. I want to know 0:00:44.080 --> 0:00:47.400 the act of your Twitter feed. Yesterday your Twitter feed 0:00:47.920 --> 0:00:52.479 looked like the Federal Reserve analyzing economic data. It was 0:00:52.560 --> 0:00:57.800 a rock star feed of like fifteen studies of GDP 0:00:57.920 --> 0:01:00.680 and the dynamics into the equity mark good are you 0:01:00.760 --> 0:01:02.160 doing that in your spare time? 0:01:02.360 --> 0:01:06.520 Well, I'm not creating most of the charts, you know, 0:01:06.640 --> 0:01:09.479 that's Kevin's domain. If I had to create, it would 0:01:09.480 --> 0:01:15.839 be you know, from the terminals with crayon. So thankfully 0:01:15.959 --> 0:01:19.560 I've got a great uh pair of folks with Kevin 0:01:19.560 --> 0:01:23.640 and Adrian who do the charts. But you know, there 0:01:23.640 --> 0:01:27.760 are there are days where weeks happen, and this week 0:01:27.840 --> 0:01:29.480 is one of those unbelievable weeks. 0:01:29.800 --> 0:01:32.440 When I get breakfast at Sarah Bass in Central Park 0:01:32.520 --> 0:01:35.000 South today and do like a four hour conversation on 0:01:35.080 --> 0:01:38.200 this moment at hand, I got brain crude under sixty 0:01:38.280 --> 0:01:42.840 dollars a barrel global slow down, US slowdown? Is that 0:01:42.880 --> 0:01:44.160 what you model in? Yeah? 0:01:44.400 --> 0:01:46.240 I think what we're seeing now is there was a 0:01:46.240 --> 0:01:49.040 lot of debate in the onset of the escalation of 0:01:49.080 --> 0:01:51.040 the trade war as to whether the growth hit would 0:01:51.040 --> 0:01:54.000 come first of the inflation pop would come first. And 0:01:54.040 --> 0:01:56.640 it looks like the growth hit, YEP, maybe coming first. 0:01:57.080 --> 0:01:59.520 So Liz, we've got the S and P five hundred. 0:01:59.520 --> 0:02:00.760 I mean that good news. 0:02:00.280 --> 0:02:03.560 Bad news is we're down ten percent from the high 0:02:03.600 --> 0:02:05.240 early in the ear, but the good newses were ten 0:02:05.240 --> 0:02:06.160 percent higher. 0:02:05.880 --> 0:02:09.400 From the bottom. What do you make of this? What 0:02:09.440 --> 0:02:10.520 do you think we should be doing here? 0:02:10.639 --> 0:02:13.240 I think what we're seeing in the month of April, 0:02:13.320 --> 0:02:18.680 particularly since the low, is a sign that the retail 0:02:18.760 --> 0:02:21.480 trader is still very active. They're still in the by 0:02:21.520 --> 0:02:26.440 the dip mentality. You've got tech BAC and the leaderboard 0:02:26.600 --> 0:02:28.720 on a month to date basis even though it's toward 0:02:28.760 --> 0:02:32.000 the bottom on a year to date basis. Vand Track 0:02:32.120 --> 0:02:35.600 tracks what retail traders are doing. And that's in start 0:02:35.600 --> 0:02:40.920 contrast to hedge funds and other institutions and CTAs that 0:02:41.000 --> 0:02:43.800 have been going more risk off. And then when you 0:02:43.800 --> 0:02:46.600 see something, you know, Goldman Sachs has those great indexes 0:02:46.600 --> 0:02:50.760 and boxes of baskets, and their Meme stock basket has 0:02:50.800 --> 0:02:53.840 been soaring in the last month too, another proxy for 0:02:54.360 --> 0:02:55.240 retail traders. 0:02:56.040 --> 0:02:57.560 What do you make here of earnings? 0:02:57.600 --> 0:02:57.680 Right? 0:02:57.680 --> 0:03:00.240 Guess we're almost halfway through the earning cycle. Ie, I 0:03:00.280 --> 0:03:00.560 see a. 0:03:00.520 --> 0:03:02.320 Lot of companies probably doing what I would do, which 0:03:02.360 --> 0:03:03.760 is like, I don't know what's going on at there, 0:03:03.760 --> 0:03:05.720 so I'm going to pull my guidance or give you 0:03:05.800 --> 0:03:07.480 some ranges or some scenarios. 0:03:07.480 --> 0:03:08.720 What are you taking away from earning shot? 0:03:08.720 --> 0:03:11.640 I think companies have put themselves into time out, you know. 0:03:11.720 --> 0:03:14.079 Earning so far for first quarter a little bit better 0:03:14.160 --> 0:03:16.960 than expected, not quite the beat rate that we've seen 0:03:17.000 --> 0:03:21.000 over the last year. So, but that's through March data. 0:03:21.120 --> 0:03:24.519 So it's the guidance are lack thereof that I think 0:03:24.639 --> 0:03:27.240 is really important. And it is starting to feel a 0:03:27.240 --> 0:03:29.720 little bit like the early stages of the pandemic, when 0:03:29.760 --> 0:03:32.120 at that time you've had a re percentage of companies 0:03:32.600 --> 0:03:33.560 got and solved together. 0:03:33.840 --> 0:03:37.680 Is institutional under owned in the MEGS seven that retail 0:03:37.760 --> 0:03:38.400 owns up. 0:03:38.320 --> 0:03:43.240 To their eyeballs in many cases yes, because of certain 0:03:43.320 --> 0:03:46.960 funds requirements that they have a max on the amount 0:03:47.000 --> 0:03:50.000 they can hold percentage wise in any individual stock. Even 0:03:50.000 --> 0:03:53.960 some of the sector exchange traded funds are limited are limited, 0:03:54.120 --> 0:03:58.640 so they they're by default can't get couldn't have developed 0:03:58.640 --> 0:04:02.600 the same concentration problem is what was embedded in cap 0:04:02.640 --> 0:04:03.680 weighted in Texas the. 0:04:03.760 --> 0:04:07.120 Charon at the University of Delaware a few years ago, 0:04:07.880 --> 0:04:12.760 Liz Anne Saunders read Securities Analysis. This is a Seth 0:04:12.840 --> 0:04:19.200 Klarman version. I actually read the first edition, which starts 0:04:19.240 --> 0:04:22.640 with railroad stocks and the Reason I bring us forward 0:04:22.640 --> 0:04:26.600 by Warren Buffet, Graham Dodd and Coddalhealth two out of 0:04:26.640 --> 0:04:29.640 colaun of this good work out of Columbia Lizzianne and 0:04:29.720 --> 0:04:31.640 I read this cover to cover a few years ago, 0:04:31.960 --> 0:04:35.720 and out there Lizzyanne is a terminal value. I am 0:04:35.880 --> 0:04:40.000 appalled at the media's shortsightedness. What's Microsoft going to do 0:04:40.120 --> 0:04:43.360 next quarter? What's Apple going to do next quarter? How 0:04:43.400 --> 0:04:45.920 do we get back to actually looking at a five year, 0:04:46.040 --> 0:04:49.480 a seven year analysis of what some of these juggernaut 0:04:49.520 --> 0:04:50.360 stocks are doing. 0:04:50.839 --> 0:04:53.760 Can I plug our version of May Day today? Yes, 0:04:54.400 --> 0:04:58.200 so we are launching today the inaugural of be an 0:04:58.200 --> 0:05:02.320 annual event called national in Day. May first is purposeful 0:05:02.440 --> 0:05:04.919 because what it means in our world is that was 0:05:04.960 --> 0:05:07.200 the year fifty years ago or the day fifty years 0:05:07.200 --> 0:05:11.000 ago on May first, where the sec ended fixed Commission, 0:05:11.600 --> 0:05:17.400 much of Wall Street decided to raise commissions and Juck 0:05:17.440 --> 0:05:19.920 Schwab himself said, yeah, let's lower them. 0:05:20.600 --> 0:05:22.200 It was revolutionary, that was. 0:05:22.400 --> 0:05:29.720 But the day is about encouraging everyone to at least 0:05:29.720 --> 0:05:34.320 take one day a year and educate themselves about investing 0:05:34.560 --> 0:05:38.280 and learn a bit more, become engaged and you want 0:05:38.320 --> 0:05:39.159 to empowered investor? 0:05:39.640 --> 0:05:40.040 Why did that? 0:05:40.160 --> 0:05:40.800 How long time? 0:05:40.920 --> 0:05:42.680 This at the top of the interview. I'm running at 0:05:42.680 --> 0:05:45.719 a time here and mister Schwab deserves some love here 0:05:46.240 --> 0:05:49.600 for really what he courageously did there. I mentioned Arthur 0:05:49.680 --> 0:05:54.520 Levitt is well, so today is your May Day. It's 0:05:54.560 --> 0:05:59.520 a number one mistake the media makes in short termism right. 0:05:59.400 --> 0:06:03.479 Now, asking people like me the question should investors get 0:06:03.480 --> 0:06:07.920 in or get out. I mean, that's just shame on 0:06:08.000 --> 0:06:11.200 anybody that that's not investing, that's gambling, not just on 0:06:11.279 --> 0:06:12.839 a moment in time, but in two moments. 0:06:12.839 --> 0:06:16.760 And is back to the humor, but the sadness folks 0:06:17.279 --> 0:06:22.600 of America missing out on the Lizone Saunders great bull market, 0:06:22.880 --> 0:06:25.760 the joke of the triple leverage all cash fun The 0:06:25.839 --> 0:06:29.160 fact is it's not funny. It Can you come back 0:06:29.279 --> 0:06:29.799 like soon? 0:06:30.360 --> 0:06:30.560 Yeah? 0:06:30.680 --> 0:06:32.720 You know, I mean I love being in here in person. 0:06:32.839 --> 0:06:35.080 Have you seen Robert Plant this summer or you know, 0:06:35.440 --> 0:06:37.080 we got any tour guy with the floods. 0:06:37.279 --> 0:06:40.800 If he decides to pair back up with Page and 0:06:41.160 --> 0:06:46.120 John so cool, Jason speaking, well, they are, they're on 0:06:46.240 --> 0:06:48.120 speaking terms. Plant doesn't want to do it. 0:06:48.200 --> 0:06:50.120 The only reason they go out is when somebody gets 0:06:50.160 --> 0:06:51.920 divorced and they have to pay for it. I mean, 0:06:51.920 --> 0:06:52.360 that's you know. 0:06:52.480 --> 0:06:55.159 You know, there was rumor that Sir Richard Branson offered 0:06:55.160 --> 0:06:57.760 them almost a billion dollars a number of years ago 0:06:58.120 --> 0:07:02.440 to just do two concerts and wanted msg here. Wow, 0:07:02.720 --> 0:07:05.680 And it was apparently Robert Plant that said, wow, I. 0:07:05.680 --> 0:07:12.000 Know, there you go. Folks are surveying Bloeplin Sanaders. I 0:07:12.040 --> 0:07:16.080 would look for her in Birmingham with Ira Jersey at 0:07:16.080 --> 0:07:19.600 the Aston Villa. Was it pan Terror's playing? 0:07:19.800 --> 0:07:21.560 I know that's a big show. 0:07:22.000 --> 0:07:24.760 Lisa Mateo, Lizzie Sanders. They love Pantera. 0:07:25.680 --> 0:07:29.600 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:07:29.640 --> 0:07:32.240 starting at seven am Eastern on Apple cor Play and 0:07:32.240 --> 0:07:35.280 Android Auto with the Bloomberg Business App. You can also 0:07:35.400 --> 0:07:39.040 listen live on Amazon Alexa from our flagship New York station. 0:07:39.600 --> 0:07:42.960 Just say Alexa play Bloomberg eleven thirty Right. 0:07:42.840 --> 0:07:46.560 Now, Daniel Ives joins us, and he's the greatest thing 0:07:46.560 --> 0:07:49.080 about Ives is when he's right, he doesn't do the 0:07:49.200 --> 0:07:51.720 rhyme right and right and right thing. He just moves 0:07:51.760 --> 0:07:54.280 on to the next analysis. So I'm going to go 0:07:54.360 --> 0:07:57.760 CEFA on your Dan. I joining from Webb Bush. 0:07:58.200 --> 0:08:02.400 The thing I don't get is the terminal value of 0:08:02.560 --> 0:08:07.760 revenue growth for these juggernauts. The media is out one quarter, 0:08:08.000 --> 0:08:12.440 if we're lucky, three quarters a year, The streets out 0:08:12.520 --> 0:08:15.920 two years. I was trained to go out five or 0:08:15.960 --> 0:08:20.520 even seven years. Do they have persistency of revenue growth 0:08:20.960 --> 0:08:22.760 out to two thousand and thirty two? 0:08:24.680 --> 0:08:24.920 Look? 0:08:25.000 --> 0:08:29.200 I think, for really the first time, maybe ever big 0:08:29.280 --> 0:08:33.560 tech because of this AI revolution, the visibility and the 0:08:33.679 --> 0:08:38.000 demand that they're seeing gives them what I believe is 0:08:38.040 --> 0:08:42.880 almost hypergrowth into the next call it five six, seven years. 0:08:42.880 --> 0:08:45.840 And I think that's that's essentially what we're seeing play 0:08:45.840 --> 0:08:48.520 out here, whether it's on digital media, whether it's on cloud, 0:08:49.120 --> 0:08:52.760 across the board, even in the tariff uncertainty, Big tech 0:08:53.280 --> 0:08:56.640 Rock of Gibraltar. I mean, it's playing through as we 0:08:56.720 --> 0:08:57.120 see it. 0:08:58.120 --> 0:08:59.480 Hey, Dan, I'm looking at a Microsoft. 0:08:59.480 --> 0:09:03.000 I mean, here's a three trillion dollars market cap company, 0:09:03.360 --> 0:09:05.040 stocks up t pre market. 0:09:05.080 --> 0:09:06.680 I mean, it's just amazing here. 0:09:07.080 --> 0:09:10.680 Talk to us about what's got the street enthused tier 0:09:10.679 --> 0:09:11.760 about Microsoft this morning? 0:09:12.000 --> 0:09:14.080 Well, first off, I mean think about all the rumors 0:09:14.080 --> 0:09:18.760 abandoned data centers here and there that well, how about 0:09:18.800 --> 0:09:22.000 them apples? Right? You don't see I don't think those 0:09:22.000 --> 0:09:25.160 a banded datas. I think that story is gonna disappear, 0:09:25.200 --> 0:09:28.880 right because the reality is like Azure two hundred bits 0:09:28.920 --> 0:09:32.400 above street, accelerating into the next quarter or two. I 0:09:32.440 --> 0:09:34.720 mean to put some numbers in, I basically think like 0:09:35.720 --> 0:09:39.600 you could be looking at for a typical Microsoft customer, 0:09:40.280 --> 0:09:43.600 you could be looking at thirty to forty dollars of 0:09:43.640 --> 0:09:47.000 every hundred hours that they've already spent thirty to forty 0:09:47.040 --> 0:09:50.480 incremental just on AI spent. You put that together and 0:09:50.559 --> 0:09:53.800 you can essentially be looking at cloud numbers are essentially 0:09:53.880 --> 0:09:56.280 double every two years. 0:09:56.880 --> 0:09:57.080 Dan. 0:09:57.160 --> 0:09:59.200 Prior to the beginning of this year, all we talked 0:09:59.200 --> 0:10:02.120 about was AI for the past couple of years, and 0:10:02.200 --> 0:10:05.000 for the last you know, four months, we've talked about 0:10:05.040 --> 0:10:06.000 nothing but tariffs. 0:10:06.480 --> 0:10:09.040 How is the AI story unfolding? Now? Can you give 0:10:09.080 --> 0:10:09.600 us an update? 0:10:10.880 --> 0:10:13.200 Yeah, look, i'd say, and we talk about it. You 0:10:13.240 --> 0:10:16.240 know that that Tom reference. In the last few weeks, 0:10:16.280 --> 0:10:19.640 like all of our checks, I mean, we've we've seen 0:10:19.800 --> 0:10:23.320 some almost acceleration and a lot of the AI spend 0:10:23.640 --> 0:10:26.719 because I think companies are basically saying like this is 0:10:27.600 --> 0:10:30.880 you cannot touch this, because this is really what's driving 0:10:30.920 --> 0:10:33.880 the strategic shitter view of a lot of these coms 0:10:33.920 --> 0:10:35.920 over the coming years. And I think we're talking to 0:10:36.640 --> 0:10:38.800 two and a half trillion that's going to be spent 0:10:38.880 --> 0:10:43.000 with AI, with really a small amount of companies that 0:10:43.040 --> 0:10:45.720 are going to benefit. And I think when it comes 0:10:45.720 --> 0:10:46.800 to tariffs is not impound. 0:10:47.080 --> 0:10:49.560 I got a return on invested capital, Folks, that one 0:10:49.600 --> 0:10:52.640 of the best screens in the Bloomberg terminal is w 0:10:52.840 --> 0:10:56.480 acc Way did the average cost a capital study. It's 0:10:56.520 --> 0:11:00.000 what's called a stern Stewart study from a million years ago, 0:11:00.520 --> 0:11:03.360 and I got a persistent twenty five percent return on 0:11:03.559 --> 0:11:08.840 invested capital for satchin company. Dan eives. I got revenue 0:11:08.880 --> 0:11:12.720 pre pandemic of one hundred and twenty six gazillion. They've 0:11:12.720 --> 0:11:16.240 done a double to where we are. Now do they 0:11:16.320 --> 0:11:19.440 get out to I can't believe I've never said this number. 0:11:19.840 --> 0:11:22.960 Are they going to get out to five hundred billion 0:11:23.559 --> 0:11:28.080 in annual revenue two thousand and thirty one, two thousand 0:11:28.120 --> 0:11:30.200 and thirty two? What's in the way of that? 0:11:31.800 --> 0:11:34.920 I mean, I think four fifty to five hundred. I 0:11:34.960 --> 0:11:38.400 mean it's it's hit able because just given I don't 0:11:38.440 --> 0:11:42.000 see what's gonna stop it, just given where companies are 0:11:42.040 --> 0:11:44.679 going and just to I mean, you put in perspective 0:11:44.760 --> 0:11:49.880 today like you only have two percent of US enterprises 0:11:49.920 --> 0:11:52.720 that have gone down the true aipath. It just should 0:11:53.080 --> 0:11:56.160 that's just US. None in Europe none, really, I mean 0:11:56.200 --> 0:11:58.719 outside of China it's minimum in termed agent. It just 0:11:58.760 --> 0:12:02.760 shows where this is going on. Despite obviously tariff uncertainty. 0:12:03.400 --> 0:12:05.480 Hey Dan, We're going to get our good friends from 0:12:05.800 --> 0:12:08.880 Cooper Tino. Apples can report after the close here today. 0:12:09.200 --> 0:12:09.959 What are you looking for? 0:12:11.160 --> 0:12:13.280 I know like they're not going to give guidance, right, 0:12:13.360 --> 0:12:15.920 I mean, I'd be shocked, and I think I think 0:12:15.920 --> 0:12:18.959 the big question for them is the quarter itself actually 0:12:18.960 --> 0:12:21.920 is pretty strong and even something that could be pulled forward. 0:12:22.360 --> 0:12:25.240 The big question for them is like, how do you 0:12:25.440 --> 0:12:31.240 navigate coming out with iPhone seventeen in a typical cycle 0:12:31.640 --> 0:12:34.520 with these tariffs? What are you waiting for from the administration? 0:12:34.840 --> 0:12:35.120 Is there? 0:12:35.559 --> 0:12:38.079 And I think that's the question. Does the timing get 0:12:38.120 --> 0:12:41.760 the way we've talked about for Apple obviously being bullsh 0:12:42.040 --> 0:12:45.000 you know, for a ducade, this is you don't look 0:12:45.040 --> 0:12:47.200 at over the next three months. You got to look 0:12:47.240 --> 0:12:49.040 as you know, as tom Owi's reverence, you got to 0:12:49.040 --> 0:12:51.240 look over the next twelve to eighteen months. I'll give 0:12:51.320 --> 0:12:54.160 free cash flow, I'll get the install base, and even 0:12:54.200 --> 0:12:58.440 if things move around and I didn't, negotiations ultimately come through, 0:12:58.480 --> 0:13:02.400 and I think they will be much more unsteed relative 0:13:02.480 --> 0:13:04.480 to you know, where we see things stay when it 0:13:04.520 --> 0:13:05.640 comes to towers. 0:13:06.600 --> 0:13:09.120 Tom Apple's gonna have over one hundred billion dollars a 0:13:09.200 --> 0:13:09.959 free cash flow. 0:13:10.400 --> 0:13:10.600 Yeah. 0:13:11.400 --> 0:13:14.360 I mean, well, Dan, what do they do here with 0:13:14.400 --> 0:13:15.439 this free cash flow here? 0:13:17.160 --> 0:13:19.880 I mean, look, M and A has obviously been minimal 0:13:21.120 --> 0:13:23.640 to that the way that they viewed in kuper Tina, 0:13:24.520 --> 0:13:27.800 it's it's basically from an R O I C. It's 0:13:27.840 --> 0:13:30.800 about to buy back and it's about ultimately how they 0:13:31.240 --> 0:13:33.920 how they're going to continue return that to Cheryl right. 0:13:34.240 --> 0:13:36.800 I mean, you. 0:13:36.880 --> 0:13:38.920 Notice you don't see this on Bluebird Radio, but you 0:13:38.960 --> 0:13:41.920 see it on YouTube. What I've does is he's at 0:13:41.960 --> 0:13:43.840 some golf courses. He in Arizona. 0:13:43.840 --> 0:13:44.480 I don't know where he is. 0:13:44.800 --> 0:13:46.320 I'm in an area airport. 0:13:46.920 --> 0:13:50.920 He drops in the wet bush backdrop of some class 0:13:51.520 --> 0:13:54.320 hotel room. He's like in a motel five or a 0:13:54.360 --> 0:13:58.200 Motel four somewhere instead of some two thousand dollars a 0:13:58.280 --> 0:14:01.000 night golf course in Scott's you know, one of the 0:14:01.040 --> 0:14:05.960 places sweeties been. Dan. I look at the belief here, 0:14:06.559 --> 0:14:10.120 and what I see more than anything is mag seven 0:14:10.280 --> 0:14:16.920 is under owned by disbelieving institution chefs. Retail America loves Apple. Okay, 0:14:17.000 --> 0:14:20.520 that's a generalization of my part. But what happens when 0:14:20.560 --> 0:14:23.400 we wake up this morning with thirty three percent as 0:14:23.480 --> 0:14:26.840 your growth rate, what we get from Amazon tomorrow, whatever, 0:14:27.000 --> 0:14:29.760 I just count the boxes at your bottom at discussion, 0:14:31.680 --> 0:14:35.600 where is the institutional Wall Street these companies? 0:14:36.040 --> 0:14:40.640 I think, well, I can nailed that retail, stuck with it, institutional. 0:14:41.080 --> 0:14:43.600 They've hit the exit and I think they got and 0:14:44.240 --> 0:14:46.640 they've got scared out a lot of the mags haven 0:14:46.680 --> 0:14:49.120 a lot attack and now guess what's going to happen 0:14:49.160 --> 0:14:51.920 over the coming weeks. They're they're going to have to 0:14:51.920 --> 0:14:54.040 double down. And I think that's why I think the 0:14:54.200 --> 0:14:57.280 run here that we can see intact over the next 0:14:57.320 --> 0:15:00.240 three four weeks, especially as we go through I think 0:15:00.280 --> 0:15:04.600 could be massive because it's under own institutionally. Because well 0:15:04.920 --> 0:15:07.360 is Paul talked about Stock being on nine in terms 0:15:07.400 --> 0:15:09.240 of mist there was a view that they were gonna 0:15:09.240 --> 0:15:13.120 miss azure. They absolutely I mean, this is an Aaron 0:15:13.200 --> 0:15:14.360 Judge like performance. 0:15:15.160 --> 0:15:17.800 Hey, yes it is Aaron Judge. 0:15:18.080 --> 0:15:20.200 Happened even a better year this year than last year 0:15:20.200 --> 0:15:23.120 if that season impossible exactly? Hey, Dan talk to us 0:15:23.160 --> 0:15:26.080 about Tesla and I think a lot of people are 0:15:26.120 --> 0:15:30.360 probably most interested in Elon Musk. We haven't heard from 0:15:30.480 --> 0:15:32.760 him much over the past month or two on the 0:15:32.880 --> 0:15:34.520 Doge front. 0:15:34.440 --> 0:15:37.320 Where do you and I know you've been very very. 0:15:37.120 --> 0:15:40.800 Public and very outspoken about suggesting that he really needs 0:15:40.840 --> 0:15:43.520 to get back to his day job at Tesla. What 0:15:43.560 --> 0:15:45.600 do we know about Elon Musk and Tesla these days? 0:15:45.840 --> 0:15:48.520 Yeah, and then obviously you know the Journal article of 0:15:48.560 --> 0:15:51.880 j obviously a board denied. Then that came out last 0:15:51.960 --> 0:15:55.120 night about you know, looking for a CEO potentially, Look, 0:15:55.200 --> 0:15:57.840 the reality is a must. That was a code red 0:15:57.920 --> 0:16:00.920 situation and it was the most important comments call he 0:16:01.000 --> 0:16:03.200 ever had to do, and he handled it. I think 0:16:03.320 --> 0:16:06.400 the best I've ever seen him. Pick Tesla. He's going 0:16:06.480 --> 0:16:08.840 to lead them into this next chapter when it comes 0:16:08.880 --> 0:16:11.840 to autonomous robotics and ultimately I think that more and 0:16:11.840 --> 0:16:15.400 more a growth reband that we see in China and 0:16:15.720 --> 0:16:19.040 his days the White House are done. However you want 0:16:19.080 --> 0:16:20.680 to call it one to two days that we I mean, 0:16:20.720 --> 0:16:22.680 I think this is the be and the end. The 0:16:22.720 --> 0:16:25.640 board was not gonna take it, CHERYLD is not going 0:16:25.720 --> 0:16:28.040 to take it. But that's you're talking about one of 0:16:28.080 --> 0:16:32.440 the biggestess up the technology companies or a Muscus, Tesla's Musk. 0:16:32.280 --> 0:16:34.480 And your community across the nation. This morning, and of 0:16:34.480 --> 0:16:37.600 course on YouTube, Dan, I's with us with Webbush looking 0:16:37.640 --> 0:16:40.400 over here to see the Secretary of Treasury and conversation. 0:16:40.840 --> 0:16:44.040 I believe with Maria over at Fox Furs will monitor 0:16:44.080 --> 0:16:47.560 those headlines from the Secretary of Treasury. It seems Paul 0:16:47.840 --> 0:16:50.600 every time he speaks is that press conference the other day, 0:16:51.120 --> 0:16:52.080 he moves the markets. 0:16:52.120 --> 0:16:54.920 Guys, Hey, Dan, just on the EV front here, I 0:16:54.920 --> 0:16:57.800 mean there's a lot of I guess, fundamental concerns here. 0:16:57.840 --> 0:17:00.920 If you're a Tesla investor, I guess just from the 0:17:01.080 --> 0:17:01.640 car business. 0:17:01.680 --> 0:17:04.920 I know Elon's trying to have your focus on other areas, 0:17:04.920 --> 0:17:08.359 but boy, by D and the Chinese operators are just 0:17:09.320 --> 0:17:10.400 really tough, aren't they. 0:17:11.040 --> 0:17:12.560 Yeah, it look b what I mean we've seen in 0:17:12.640 --> 0:17:15.720 firsthand in China. You know many times BYD has done 0:17:16.240 --> 0:17:19.960 phenomenal and but I think it's not a mutually exclusive 0:17:19.960 --> 0:17:21.960 in other words, like Tessa is going to be also 0:17:22.080 --> 0:17:26.200 successful in China like they have been when it comes 0:17:26.240 --> 0:17:30.040 to the EV market. I mean, Paul, I think ninety 0:17:30.520 --> 0:17:33.760 the future value of Tessa is going to be autonomous 0:17:33.880 --> 0:17:36.159 about it. I mean that's my. 0:17:38.480 --> 0:17:40.480 And and Dan just just to be clear here, the 0:17:40.520 --> 0:17:42.960 board at Tesla thinking about a replacement. 0:17:43.000 --> 0:17:45.840 That's not even that's not even thought of. Is it really? 0:17:46.800 --> 0:17:47.080 Again? 0:17:47.240 --> 0:17:50.200 Keene came, he didn't want to do it, so after 0:17:50.280 --> 0:17:52.360 he was after he took his hat out of the ring, 0:17:52.560 --> 0:17:55.520 there was there was no one left. Look, I think, 0:17:56.520 --> 0:17:59.320 but Paul, they had to do something, whether it Tesla 0:17:59.359 --> 0:18:02.280 denies or they had to do a warning shot. It 0:18:02.359 --> 0:18:04.080 got to and we talked about with you guys while 0:18:04.119 --> 0:18:07.800 on the ship. They it hit. It hit that moment, true. 0:18:07.960 --> 0:18:11.439 Dan, I got a minute left on Tesla. Have you 0:18:11.560 --> 0:18:14.239 been in one of the Chinese EV's have you you know, 0:18:14.240 --> 0:18:16.359 you're such a hitter. Have you been like in a 0:18:16.440 --> 0:18:19.840 B Y D yep? Are they are they nice? Are 0:18:19.840 --> 0:18:20.199 they like? 0:18:20.400 --> 0:18:20.440 No? 0:18:20.600 --> 0:18:23.120 They're they're there so that you go, what are. 0:18:23.000 --> 0:18:26.359 They like you? He doesn't. Michael bar Ives doesn't even 0:18:26.400 --> 0:18:29.840 know what a ugo is. It's sort of like a pinto. 0:18:30.119 --> 0:18:32.440 I wish I didn't know what you go, Jives, what's 0:18:32.480 --> 0:18:35.320 the quality of a Chinese EV? Look? 0:18:35.440 --> 0:18:37.920 I mean by d high quality, I mean I think 0:18:37.960 --> 0:18:40.240 even someone like Sweeney would take that to the golf. 0:18:40.080 --> 0:18:43.280 Course where I go, Dan, I thank you so much, 0:18:43.320 --> 0:18:46.200 your trooper. I can't say enough about the hours Paul, 0:18:46.240 --> 0:18:47.720 you mentioned the hours he works. 0:18:53.359 --> 0:18:56.960 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:18:57.040 --> 0:19:00.000 weekday afternoons from seven to ten a m Eastern. Listen 0:19:00.119 --> 0:19:03.720 on Apple, Karplay and Android Otto with the Bloomberg Business app, 0:19:03.840 --> 0:19:05.600 or watch us live on YouTube. 0:19:05.920 --> 0:19:09.280 Leland Miller is a China basebook. Where's thrilled he could 0:19:09.359 --> 0:19:13.320 join us this morning? What's the thing in the zeitgeist 0:19:13.480 --> 0:19:17.760 on the China US US China trade war that's not 0:19:17.920 --> 0:19:18.920 talked about enough? 0:19:19.440 --> 0:19:22.000 Well, I think too much is being made of the 0:19:22.119 --> 0:19:24.320 idea that she can't come to the table and Trump 0:19:24.400 --> 0:19:26.440 can't come to the table because each of them has 0:19:26.480 --> 0:19:28.200 to have the other one go to the table first. 0:19:28.560 --> 0:19:30.840 It's in the boat interest of both these countries to 0:19:30.920 --> 0:19:33.600 eventually move towards some sort of negotiation. That doesn't mean 0:19:33.600 --> 0:19:35.320 that the negotiation is going to move to anything, but 0:19:35.560 --> 0:19:38.439 the terriffs are in a very very high level of 0:19:38.480 --> 0:19:41.640 both directions. They don't even serve an economic purpose past 0:19:41.680 --> 0:19:43.199 a certain point. And if you have tariffs at one 0:19:43.240 --> 0:19:46.440 hundred and forty five percent, even at half that, you're 0:19:46.480 --> 0:19:49.520 not making an economic difference because no Chinese goods are 0:19:49.600 --> 0:19:51.680 cost competitive at even half of one hundred and forty 0:19:51.720 --> 0:19:52.159 five percent. 0:19:52.560 --> 0:19:55.040 So the tariffs are sort of arbitrary at a certain point. 0:19:55.200 --> 0:19:58.160 If the President wants to come to the table say look, 0:19:58.160 --> 0:20:00.400 we'll bring things down in return you do some things 0:20:00.440 --> 0:20:03.960 for us, that certainly is a possibility if he's feeling 0:20:03.960 --> 0:20:07.000 economic pressure, if he's feeling pressure to sort of coalesce 0:20:07.240 --> 0:20:10.960 the Republican Party in one direction towards towards the tax 0:20:10.960 --> 0:20:12.840 bill as well. So there's a lot of pressures that 0:20:12.840 --> 0:20:14.919 are building up as we get towards summertime, they're going 0:20:14.920 --> 0:20:17.560 to sort of change the dynamics around the tariff discussion. 0:20:18.280 --> 0:20:20.639 Lee, then, can you give us a sense of where 0:20:21.040 --> 0:20:23.880 you think China is in terms of its relative strength 0:20:24.440 --> 0:20:26.760 in negotiating with the United States. 0:20:27.240 --> 0:20:28.160 Give us a sense. 0:20:27.920 --> 0:20:31.240 Of how things are in China and how they might 0:20:31.359 --> 0:20:33.240