WEBVTT - Bloomberg Surveillance TV: July 2, 2024 0:00:02.440 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.240 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:36.960 Terminal and the Bloomberg Business app. The beginning, our top 0:00:37.000 --> 0:00:40.200 story investors mapping out growing guards of a second drum term. 0:00:40.360 --> 0:00:43.080 Joe Quinlan and Maryland Bank for America Private Bank writing this. 0:00:43.320 --> 0:00:46.440 The key variable to watch is the US dollar. Will 0:00:46.520 --> 0:00:49.440 foreigners vote with their wallet per the US election? Owning 0:00:49.520 --> 0:00:53.400 twenty eight percent of marketable treasuries, thirty two percent of 0:00:53.479 --> 0:00:57.200 the corporate bond market, and twenty percent of US secreits. 0:00:57.320 --> 0:00:59.560 Joe joins us. Now for more, Joe, let's talk about this. 0:00:59.600 --> 0:01:02.160 You'll rection to what happened on Thursday night and what 0:01:02.280 --> 0:01:04.000 you think it means for this market. 0:01:05.480 --> 0:01:08.839 Well, John, Post Thursday night, I was watching a dollar 0:01:08.959 --> 0:01:11.240 very carefully over in Asia and Europe, and really no 0:01:11.440 --> 0:01:15.000 sell off here related to any political unrest here in 0:01:15.000 --> 0:01:17.920 the United States or uncertainty. You know, you're just talking 0:01:17.920 --> 0:01:21.200 your lease about the dollar. It's what the dollar has strength. 0:01:21.200 --> 0:01:24.039 I'm surprised it's not stronger because what's behind the dollar 0:01:24.160 --> 0:01:26.720 is the great US economy, the private sector, the most 0:01:26.720 --> 0:01:30.520 productive economy out there. And when I talk to foreign wealth, 0:01:30.640 --> 0:01:33.959 sovereign wealth funds or family offices around the world, they 0:01:34.000 --> 0:01:36.720 want to own US assets, and there's a preference in 0:01:36.760 --> 0:01:39.760 a premium on owning US securities. I don't think that's 0:01:39.760 --> 0:01:42.280 going to change between now and the election. Some uncertainty, 0:01:42.360 --> 0:01:43.320 but no big change. 0:01:43.440 --> 0:01:45.680 John. Let's talk about what would happen on a Trump win. 0:01:45.840 --> 0:01:47.440 I've got to go through a couple of steps here, 0:01:47.440 --> 0:01:49.720 but for the sake of scenario analysis, let's say he 0:01:49.760 --> 0:01:52.000 gets a win. Let's even go one step further. Let's 0:01:52.000 --> 0:01:54.080 say we get that red waves. I'm thinking back to 0:01:54.120 --> 0:01:56.320 twenty sixteen. A lot of people are thinking about the 0:01:56.320 --> 0:01:59.320 Trump playbook at that time, and this bond market was 0:01:59.400 --> 0:02:04.160 demanded bond issuance. In fact, the economic backdrop demanded fiscal stimulus. 0:02:04.200 --> 0:02:06.640 That's not where we're at in twenty twenty four and 0:02:06.680 --> 0:02:08.919 if you think about the trades that works back then, Yes, 0:02:09.000 --> 0:02:12.000 yields climbed, Yes, the dollar rallied, but small caps that 0:02:12.120 --> 0:02:16.720 month in November twenty sixteen, rallied by eleven percent. Joe, 0:02:16.720 --> 0:02:18.720 I'm just wondering, give that's the trade this time around, 0:02:18.720 --> 0:02:20.440 because that's not what I say in small camps in 0:02:20.480 --> 0:02:21.480 the last twenty four hours. 0:02:22.680 --> 0:02:25.760 I mean, the small caps are still in purgatory here. Good. 0:02:25.880 --> 0:02:28.079 You could be right in the sense that if you've 0:02:28.080 --> 0:02:30.880 got to, if you've got an administration that's bent on 0:02:31.320 --> 0:02:34.960 doing things here in the United States terrors, anti immigration, 0:02:35.480 --> 0:02:36.760 we're going to have to raise the bar. 0:02:36.919 --> 0:02:37.560 We're going to have. 0:02:37.560 --> 0:02:40.440 To increase our production across the board, not just large 0:02:40.480 --> 0:02:43.520 gap small caps. So it could spread, but you know, 0:02:43.600 --> 0:02:47.440 to me, for all the wrong reasons, you know, nationalism, protectionism. 0:02:47.520 --> 0:02:50.120 So I think that trade is it could come back, 0:02:50.200 --> 0:02:52.240 but to me, it doesn't. It doesn't give me any 0:02:52.240 --> 0:02:55.079 comfort because I think we're small casts can come back 0:02:55.120 --> 0:02:55.720 on their own. 0:02:55.800 --> 0:02:56.920 But if we suit. 0:02:56.840 --> 0:02:59.600 Policy protectionism, that's a different animal. 0:02:59.720 --> 0:03:00.000 Together. 0:03:00.080 --> 0:03:02.720 I understand exactly where you're going in small caps will 0:03:02.720 --> 0:03:07.160 have their day. I think under a Republican suite. 0:03:06.760 --> 0:03:09.079 Jo, I'm wondering how far out you can actually make 0:03:09.120 --> 0:03:11.920 some sort of prediction. We were talking earlier, John raised 0:03:12.080 --> 0:03:14.440 Lori Calvacina and talking about how there's just this no 0:03:14.560 --> 0:03:17.560 visibility around twenty twenty five. Do you feel the same way. 0:03:18.800 --> 0:03:21.919 No, Actually I don't so I think twenty twenty five, yes, 0:03:22.040 --> 0:03:24.480 the policy backdrop becomes uncertain. 0:03:24.720 --> 0:03:27.040 But when you step back, look at the AI. 0:03:26.840 --> 0:03:31.880 Revolution, the productivity that's coming, look at the US economy 0:03:31.960 --> 0:03:34.079 in general relative to the rest of the world, look 0:03:34.080 --> 0:03:37.200 at the geopolitics, and there are places put money to work. 0:03:37.240 --> 0:03:41.520 There's a premium out of resources, the infrastructures build, it's 0:03:41.560 --> 0:03:44.880 going to continue. So there's policy fog, but I think 0:03:44.920 --> 0:03:49.240 there's opportunities put money to work in certain sectors that irregardless, 0:03:49.600 --> 0:03:53.120 it doesn't matter what's happening with politics, it's going to 0:03:53.160 --> 0:03:55.840 continue into the second half of this decade. 0:03:56.000 --> 0:03:58.640 A lot of people were worried about valuations, particularly in 0:03:58.840 --> 0:04:01.400 the areas that you mentioned, AI in particular, looking at 0:04:01.560 --> 0:04:04.040 videos some kind of one hundred and forty percent gains 0:04:04.040 --> 0:04:06.280 so far this year, you're seeing it kind of trade 0:04:06.400 --> 0:04:09.080 range bound over the past few trading sessions do you 0:04:09.120 --> 0:04:12.480 agree that it is concerning where valuations are that there 0:04:12.480 --> 0:04:15.000 should be some sort of retlacement before you feel comfortable 0:04:15.800 --> 0:04:18.400 really doubling down on those names. 0:04:19.080 --> 0:04:19.719 I think to it. 0:04:19.760 --> 0:04:22.320 Agree, So, yes, we're getting well, you know, there's a 0:04:22.360 --> 0:04:25.600 lot of bullet sentiments in the market, so we're careful 0:04:25.600 --> 0:04:28.159 about that putting new money to work. But these companies 0:04:28.160 --> 0:04:31.800 are backing up these valuation with earnings growth and we 0:04:31.800 --> 0:04:32.600 see that continuing. 0:04:32.640 --> 0:04:34.640 Is that going to continue in the twenty twenty five? 0:04:34.880 --> 0:04:35.440 Probably not. 0:04:35.560 --> 0:04:37.960 Your your comps are going to come down, But we're 0:04:38.080 --> 0:04:41.560 still comfortable owning this market broadening out. 0:04:41.880 --> 0:04:42.960 We like the cyclicals. 0:04:43.200 --> 0:04:46.839 We still like energy, I like commodities, anything related to 0:04:46.880 --> 0:04:50.359 transportation and distribution, transmission. 0:04:49.760 --> 0:04:52.839 We like that space as well. So we're very bullsh 0:04:52.880 --> 0:04:56.279 on defense spending, giving where we are. So, yes, there's 0:04:56.320 --> 0:04:59.560 parts of the market that could be allegedly overvalued. 0:05:00.160 --> 0:05:02.840 This is backed up by a strong economy, good earnings, 0:05:02.880 --> 0:05:05.160 good consumption, and foreign demand. 0:05:05.320 --> 0:05:07.720 Coming back to you for US securities. 0:05:07.320 --> 0:05:11.320 Joe build on that energy defense. Is there some connection 0:05:11.360 --> 0:05:12.320 there between the two. 0:05:13.520 --> 0:05:16.040 Absolutely, John, because what's the premium? 0:05:16.279 --> 0:05:20.960 United States is energy independent relatively speaking, but certainly relative 0:05:21.000 --> 0:05:21.560 to Europe. 0:05:21.920 --> 0:05:23.200 And Asia. 0:05:23.279 --> 0:05:26.839 So you've got all the demand for AI the data centers. 0:05:27.000 --> 0:05:30.600 There's only one country really that can feed this beast, right, 0:05:30.640 --> 0:05:34.680 this AI beast in a relative way, and that's the 0:05:34.760 --> 0:05:37.960 United States. Because we're energy independent. People haven't made the connection. 0:05:38.040 --> 0:05:41.880 If you want to drive data, drive AI, you need energy. 0:05:41.920 --> 0:05:42.719 Who has the energy? 0:05:42.760 --> 0:05:45.600 The United States We're going to pull ahead because of 0:05:45.600 --> 0:05:48.360 our energy independence driving AI. 0:05:48.720 --> 0:05:51.400 Artificial intelligence, We're going to pull ahead of the rest 0:05:51.400 --> 0:05:51.919 of the world. 0:05:51.920 --> 0:05:54.080 And that's what the bet people are making when they 0:05:54.120 --> 0:05:56.000 buy the US relative to the rest of the world. 0:05:56.200 --> 0:05:58.120 John Le's got one step. What am I buying then 0:05:58.200 --> 0:06:03.120 you say it's energy, Is that the oil produces energy services? 0:06:03.120 --> 0:06:03.880 Where am I going for that? 0:06:04.080 --> 0:06:04.240 Right? 0:06:05.040 --> 0:06:08.080 Our equity ailst like the whole spectrum, John, but also 0:06:08.240 --> 0:06:13.839 transmission distribution utilities and really across the spectrum. We like 0:06:13.880 --> 0:06:17.520 renewables as well. In this space the interconnection queue. People 0:06:17.560 --> 0:06:19.599 don't talk about that. We've got to get that better. 0:06:19.800 --> 0:06:22.000 We've got to be able to take all this renewable 0:06:22.160 --> 0:06:25.880 capacity and plug it in. It's that simple, and we're 0:06:25.920 --> 0:06:28.440 missing it. So I think that's coming down the pipeline. 0:06:28.480 --> 0:06:34.400 More infrastructure on just basic transmission wires, distribution getting this out, 0:06:34.480 --> 0:06:37.680 and I think that's a whole new ballgame for US competitiveness. 0:06:37.880 --> 0:06:39.800 I want to be at the Independence Day celebration at 0:06:39.800 --> 0:06:41.719 your house, Joe. It seems like it's going to be exciting. 0:06:41.800 --> 0:06:44.000 I do think that there is a question when you 0:06:44.040 --> 0:06:46.240 talk about energy, particularly on a day like today where 0:06:46.279 --> 0:06:48.559 you do see oil prices climbing to the highest levels 0:06:48.600 --> 0:06:51.479 going back to April. And this is on the heels 0:06:51.520 --> 0:06:54.880 of both the hurricane barrel that's going the first one 0:06:55.240 --> 0:06:57.840 on records going back to the eighteen hundreds that really 0:06:57.880 --> 0:07:01.160 has reached that category five level. Well, how concerned are 0:07:01.200 --> 0:07:04.279 you about a potential spike in prices over the summer 0:07:04.360 --> 0:07:07.120 if there is some sort of hurricane season that is 0:07:07.160 --> 0:07:08.919 as violent as some people are worried about. 0:07:10.080 --> 0:07:11.680 Well, listen, I would say to be short term the 0:07:11.760 --> 0:07:15.000 spike up in prices, because there's plenty of oil out 0:07:15.040 --> 0:07:17.240 there globally, not just stay here in the United States 0:07:17.280 --> 0:07:17.680 as well. 0:07:17.720 --> 0:07:21.120 So yes, that's a concern. It could to me. 0:07:21.360 --> 0:07:24.480 Longer term is everything we just talked about. It's the 0:07:24.520 --> 0:07:28.760 demand for electricity, EVS data centers. So we're watching the 0:07:28.840 --> 0:07:32.400 hurricane season in particularly when it comes to insurance companies. 0:07:32.400 --> 0:07:35.320 What does it mean to get insurance in for housing 0:07:35.360 --> 0:07:37.360 and these other businesses that we've been talking about. 0:07:37.400 --> 0:07:38.840 That's a big issue buyers. 0:07:38.840 --> 0:07:42.280 You know, the climate change, the climate mitigation is becoming 0:07:42.360 --> 0:07:45.400 broadening out for insurance companies. It's broadening out. It's going 0:07:45.440 --> 0:07:47.280 to affect more consumers. I think that's going to be 0:07:47.320 --> 0:07:49.280 a big issue in the second half of this decade. 0:07:49.280 --> 0:07:50.160 They're going to be talking. 0:07:50.000 --> 0:07:52.840 About Brent back in the high eighties, eighty seven, Joe, 0:07:52.920 --> 0:07:55.160 it's going to hear from your Joe quinnin of Mariland 0:07:55.160 --> 0:07:58.680 Banks for America Private Bank, Keith theme for Joe, preference 0:07:58.680 --> 0:08:03.600 for hard power, defend herd assets, commodities, hard hats, infrastructure, 0:08:13.000 --> 0:08:15.960 President Biden slamming a Supreme Court ruling that could allow 0:08:16.080 --> 0:08:18.680 Donald Trump to escape prosecution for his role in the 0:08:18.760 --> 0:08:21.840 January sixth right on Capitol Hill. Bannon's comments coming as 0:08:21.840 --> 0:08:24.640 his campaign looks to move the narrative away from last 0:08:24.640 --> 0:08:27.880 week's debate tobacco, which saw a growing number of Americans 0:08:27.960 --> 0:08:30.600 question the president's ability to serve. Joining US now is 0:08:30.640 --> 0:08:34.000 Jeanette loves Fatigua's a bad company. Jeanette, I've got to say, 0:08:34.120 --> 0:08:36.440 you're on the money when it comes to what you're 0:08:36.480 --> 0:08:39.400 focused on, and that's the tight senate races that we 0:08:39.440 --> 0:08:41.880 should all be watching. And if those start to shift, 0:08:41.920 --> 0:08:45.480 maybe this president's in even more trouble than he already is. Jene, 0:08:45.520 --> 0:08:47.080 what are you seeing in those type races now? 0:08:48.120 --> 0:08:50.040 Yeah, good mornings. I mean, it's a great point. 0:08:50.080 --> 0:08:50.280 One. 0:08:50.440 --> 0:08:52.720 The big thing that we're seeing coming out of Thursday 0:08:52.760 --> 0:08:55.760 is that everyone's worried about Trump I mean sorry, Biden 0:08:55.840 --> 0:08:58.280 being at the top of the ticket and now potentially 0:08:58.760 --> 0:09:02.240 having that debate perform Mormans. That really did not change 0:09:02.280 --> 0:09:04.719 the election trajectory the way he wanted it to do. 0:09:05.120 --> 0:09:07.440 The bigger impact is what's going to happen in these 0:09:07.440 --> 0:09:10.320 down ballot races. And so one thing that's really important 0:09:10.360 --> 0:09:13.960 is that you are seeing Democratic senators who are in 0:09:14.000 --> 0:09:17.400 general it is more difficult to actually unseat an incumbent senator. 0:09:17.640 --> 0:09:21.280 View Democratic senators in states like Pennsylvania and Wisconsin, in 0:09:21.320 --> 0:09:25.120 Arizona who are actually currently out running Biden in the polls, 0:09:25.400 --> 0:09:27.320 and so I think that if you start to see 0:09:27.600 --> 0:09:30.640 those numbers really change direction over the course the next 0:09:30.640 --> 0:09:33.320 few weeks. Right now, the Democratic Party is kind of 0:09:33.400 --> 0:09:36.160 rallying around Biden saying that they're going to have him 0:09:36.240 --> 0:09:36.839 remain at. 0:09:36.800 --> 0:09:37.600 The top of the ticket. 0:09:37.840 --> 0:09:40.200 But if you really start to see deterioration in the polls, 0:09:40.280 --> 0:09:43.719 deterioration and fundraising and deterioration and the polling for these 0:09:43.760 --> 0:09:45.920 down ballot states, that's going to pose a lot more 0:09:46.000 --> 0:09:48.000 trouble for the Democratic Party come November. 0:09:48.120 --> 0:09:51.760 You mentioned three things there, polling, fundraising, down ballot Senate races. 0:09:51.800 --> 0:09:54.560 Can we talk about fund raising some of the numbers 0:09:54.559 --> 0:09:57.319 that I've been seeing Jeanette say, there's no problem here whatsoever. 0:09:57.440 --> 0:09:59.640 What the numbers that you're looking at. 0:10:00.000 --> 0:10:01.520 But right now there is no problem. 0:10:01.600 --> 0:10:03.720 So they have pretty good numbers over the weekend for 0:10:03.760 --> 0:10:06.679 the Democratic side, We'll have to see. I think right 0:10:06.720 --> 0:10:12.000 now they're definitely concerned that the Republicans are having really 0:10:12.040 --> 0:10:15.040 good fundraising and kind of eating into the fundraising advantage 0:10:15.040 --> 0:10:18.080 that Biden did have earlier this year. But right now 0:10:18.120 --> 0:10:20.920 there is kind of this rallying right around him. You 0:10:21.040 --> 0:10:23.280 had the President come out and speak last night about 0:10:23.280 --> 0:10:26.400 the Supreme Court decision. This is really him trying to reframe, 0:10:26.720 --> 0:10:28.880 maybe try to get some of those images of Thursday 0:10:28.960 --> 0:10:31.240 night out of the public view and put some new 0:10:31.520 --> 0:10:35.040 images out there. So him taking that stand last night 0:10:35.080 --> 0:10:37.640 to make a statement was important for the campaign to 0:10:37.679 --> 0:10:40.320 try to reset and to try to change the narrative 0:10:40.360 --> 0:10:42.640 a little bit away from that debate performance and be 0:10:42.679 --> 0:10:43.920 a little bit more presidential. 0:10:44.600 --> 0:10:47.000 So I think that we're going to be watching those numbers. 0:10:47.080 --> 0:10:49.920 Right now, everything does seem to be okay, but I 0:10:49.920 --> 0:10:51.520 think the next couple of weeks are going to be 0:10:51.559 --> 0:10:52.760 really critical for this race. 0:10:53.120 --> 0:10:56.920 There's some discussion of the DNCA Bloomberg reporting with Democratic 0:10:57.040 --> 0:11:00.640 National Convention is thinking committee is thinking of actually pulling 0:11:00.679 --> 0:11:03.720 forward the nomination of Joe Biden to try to throw 0:11:04.240 --> 0:11:07.200 a sense of support behind him. Is this the right 0:11:07.240 --> 0:11:10.240 idea given the facts that anger is still out there? 0:11:10.360 --> 0:11:12.640 Very much so. And there's a question of why the 0:11:12.679 --> 0:11:18.000 internal circle around Biden isn't necessarily being more transparent about 0:11:18.040 --> 0:11:20.480 this process, right. 0:11:20.320 --> 0:11:22.600 And this is something that was actually kind of planned 0:11:22.640 --> 0:11:25.440 a little bit earlier. They were thinking about doing it 0:11:25.480 --> 0:11:28.760 before August seventh, just because there had been issues with 0:11:28.800 --> 0:11:31.480 the Ohio ballot, and so the party wanted to have 0:11:31.679 --> 0:11:35.240 him basically nominated early just so that there couldn't be 0:11:35.320 --> 0:11:39.040 any turmoil at the convention in August. If you have 0:11:39.080 --> 0:11:41.880 a contentious convention that generally doesn't vode very well for 0:11:41.960 --> 0:11:44.600 the party ahead of the actual election, and so that 0:11:44.720 --> 0:11:47.440 was something that they were actually trying to avoid. But 0:11:47.480 --> 0:11:49.199 one of the things that they're trying to do now 0:11:49.280 --> 0:11:51.960 is thinking about, Okay, well we can actually move this 0:11:52.120 --> 0:11:55.480 forward that would kind of solidify Biden as the nominee. 0:11:55.520 --> 0:11:57.680 You can't have people coming up with the convention trying 0:11:57.679 --> 0:11:59.680 to throw another candidate's name into the hat. 0:12:00.120 --> 0:12:02.880 But this is ultimately going to be for better or 0:12:02.920 --> 0:12:03.280 for worse. 0:12:03.320 --> 0:12:05.880 This is down to Biden making the decision whether he 0:12:05.920 --> 0:12:07.719 wants to stay at the top of the ticket or 0:12:07.760 --> 0:12:09.080 if he wants to step down. 0:12:09.320 --> 0:12:11.000 He can do that before the convention. 0:12:11.440 --> 0:12:15.720 That could be very messy having a multiple delegates having 0:12:15.800 --> 0:12:18.040 votes to figure out who should be the next nominee. 0:12:18.360 --> 0:12:21.480 The committee can also do it after the convention as well, 0:12:21.760 --> 0:12:23.960 or we could see Biden's stay in the entire time. 0:12:24.000 --> 0:12:27.160 But I think this move to potentially have the nomination 0:12:27.320 --> 0:12:30.480 done in July is a way to try to squash 0:12:30.559 --> 0:12:33.640 any dissent. If Biden can keep his numbers up over 0:12:33.640 --> 0:12:36.199 the next couple of weeks, we don't see the great 0:12:36.200 --> 0:12:39.400 deterioration in polling. If we can see him making more 0:12:39.440 --> 0:12:42.560 statements like last night than last Thursday, I think that 0:12:42.600 --> 0:12:44.920 would be something that would allow him to stay at 0:12:44.960 --> 0:12:45.400 the ticket. 0:12:45.800 --> 0:12:47.959 But this is something definitely to be watching tonight. 0:12:48.040 --> 0:12:50.679 Yesterday we had a series of guests talking about how 0:12:50.720 --> 0:12:53.120 Thursday night was a game changer for them in the market, 0:12:53.360 --> 0:12:56.400 that essentially they were looking at the higher likelihood, much 0:12:56.440 --> 0:12:59.440 higher likelihood of a Republican sweep, exactly going to your 0:12:59.440 --> 0:13:01.600 first point, which is essentially you need to watch down 0:13:01.640 --> 0:13:04.959 ballot and see how many people basically stay home, are 0:13:04.960 --> 0:13:07.360 not excited about the top of the ticket, don't feel 0:13:07.440 --> 0:13:11.320 like they're being heard by the Democratic Party. How much 0:13:11.559 --> 0:13:13.679 is that something that you're seeing is a much greater 0:13:13.880 --> 0:13:16.160 likelihood today than say, Thursday morning. 0:13:17.200 --> 0:13:17.920 So I will agree. 0:13:17.920 --> 0:13:20.000 I think the consensus is is that there is definitely 0:13:20.040 --> 0:13:22.240 a greater chance that we're going to have a Republicans 0:13:22.240 --> 0:13:24.480 sweep in this election. But I do think it is 0:13:24.520 --> 0:13:27.640 important to not assume that would be the case. Again, 0:13:27.679 --> 0:13:30.080 these down ballot races are quite important. What we have 0:13:30.200 --> 0:13:32.400 kind of seen is that it seems that there's much 0:13:32.400 --> 0:13:35.280 bigger problem with Biden and Harris at the top of 0:13:35.320 --> 0:13:38.600 the ticket. Rather than an overall problem with the Democratic brand. 0:13:38.880 --> 0:13:42.080 So you do see House races that have done quite well. 0:13:42.200 --> 0:13:44.120 You do also see these Senate races again where the 0:13:44.120 --> 0:13:48.760 Democratic candidates are outperforming Biden in key swing states. The 0:13:48.800 --> 0:13:50.640 other thing I think that what it's important to watch 0:13:50.679 --> 0:13:52.400 is we don't want to just watch just what the 0:13:52.440 --> 0:13:53.040 polls say. 0:13:53.240 --> 0:13:55.280 We want to see actual results. So we've been. 0:13:55.160 --> 0:13:58.880 Watching the special elections that have occurred since January, and 0:13:58.960 --> 0:14:03.320 Democrats have been out performing by eleven percentage points versus 0:14:03.320 --> 0:14:06.240 what happened in those districts in the last election. So 0:14:06.320 --> 0:14:08.560 that does seem to indicate that there could be some 0:14:08.600 --> 0:14:11.760 tickets splitting this year. It could be that voters might 0:14:11.800 --> 0:14:14.040 think that they could vote for maybe Trump at the 0:14:14.040 --> 0:14:16.280 top of the ticket, but then Democrats and either in 0:14:16.280 --> 0:14:18.840 the House or the Senate races. The important thing to 0:14:18.880 --> 0:14:22.160 remember is that currently Congress has very tight majorities in 0:14:22.200 --> 0:14:24.480 both the House and the Senate. It will not take 0:14:24.520 --> 0:14:26.480 a lot of seats one way or the other to 0:14:26.560 --> 0:14:29.240 really move that. But there is still the possibility that 0:14:29.320 --> 0:14:31.920 maybe we don't see a Republican sweep, maybe we actually 0:14:31.960 --> 0:14:33.480 see a divide in Congress next year. 0:14:33.640 --> 0:14:35.680 Jane, you get the distinct sense right now that a 0:14:35.680 --> 0:14:37.680 lot of people in this country feel like they're being 0:14:37.840 --> 0:14:41.479 like to, like there's a division emerging between the campaign 0:14:41.840 --> 0:14:44.120 and the rest of this country. And I don't know 0:14:44.160 --> 0:14:46.240 what this campaign does about that. If I think about 0:14:46.240 --> 0:14:48.560 some of the stories over the weekend, we saw even 0:14:48.640 --> 0:14:51.880 CNN getting blamed for the makeup they used on Joe Biden, 0:14:51.920 --> 0:14:54.880 as if that was the problem on Thursday Night. What 0:14:55.000 --> 0:14:56.680 do you think they're going to do over the next 0:14:56.720 --> 0:15:00.120 four months to try and write course what we've been saying, 0:15:00.280 --> 0:15:05.040 not just on Thursday Night, but for the last twelve months, right, And. 0:15:05.040 --> 0:15:07.600 So I mean, I think that this is Thursday's debate 0:15:07.680 --> 0:15:11.800 definitely reinforced voters concerns about Biden's age, about his fitness 0:15:11.880 --> 0:15:15.640 to continue to serve as a president, and the president 0:15:15.760 --> 0:15:18.400 really needs to try to change this race. It is 0:15:18.440 --> 0:15:21.520 currently a referendum on his first term in office. His 0:15:21.600 --> 0:15:25.000 approval rating is hovering around forty percent. That is not 0:15:25.040 --> 0:15:26.840 good if you're looking to get re elected. 0:15:27.160 --> 0:15:29.360 So he really does need to change this into a choice. 0:15:29.520 --> 0:15:32.000 There are some key factors to look for in the 0:15:32.040 --> 0:15:35.360 coming days. Obviously, with the Supreme Court decision yesterday, you 0:15:35.400 --> 0:15:37.840 saw Biden's statement to try to change this just try 0:15:37.840 --> 0:15:40.200 to say, Okay, that was the decision, but I'm going 0:15:40.240 --> 0:15:42.320 to try to frame this as more of a choice. 0:15:42.040 --> 0:15:44.400 Between me and former President Trump. 0:15:44.800 --> 0:15:48.040 You also have Trump's sentencing coming up next week, so 0:15:48.120 --> 0:15:50.520 that's going to be a important point. Things I'll stove 0:15:50.560 --> 0:15:52.720 to watch for us. Who is the vice presidential pick 0:15:52.720 --> 0:15:56.680 on the Republican ticket. So there are options for the 0:15:56.800 --> 0:16:00.360 Democratic Party to try to reframe the race to make 0:16:00.400 --> 0:16:02.640 it just more of a choice between Trump and Biden, 0:16:02.960 --> 0:16:05.800 But there already is kind of this baked in feeling 0:16:05.960 --> 0:16:09.720 that voters have been concerned about Biden's age that wasn't 0:16:09.720 --> 0:16:11.760 alleviated over the course of the last week. 0:16:11.600 --> 0:16:13.000 And that's something that we're going to have to figure 0:16:13.000 --> 0:16:13.320 out how. 0:16:13.280 --> 0:16:13.640 To deal with. 0:16:13.800 --> 0:16:16.360 Jeanette, this was great. Janette low As Fatigas, thank you. 0:16:27.000 --> 0:16:29.120 Let's continue this conversation and gets to the panel. Joining 0:16:29.160 --> 0:16:32.720 us now is Point seventy two's Dean Macki alongside Femos 0:16:33.040 --> 0:16:34.880 in Linga. Gents, it's great to catch up with you both, 0:16:34.960 --> 0:16:36.560 and I'm going to come to you first. What is 0:16:36.600 --> 0:16:39.160 more important to this bond market right now? The economic 0:16:39.240 --> 0:16:41.360 data that we get this week or the debate that 0:16:41.400 --> 0:16:43.000 took place Thursday evening. 0:16:44.400 --> 0:16:47.200 Well over the course of the last two training sessions, 0:16:47.280 --> 0:16:51.600 it has undoubtedly been the political tides in Washington and 0:16:51.680 --> 0:16:54.880 what it means for November. That being said, we have 0:16:55.000 --> 0:16:58.400 payrolls on Friday, but perhaps more importantly, next week, we 0:16:58.480 --> 0:17:01.680 get CPI again, and that will give the market some 0:17:01.800 --> 0:17:03.880 very good context for whether or not we'll see that 0:17:04.000 --> 0:17:07.000 September rate cut. That's the active debate that matters at 0:17:07.040 --> 0:17:07.399 the moment. 0:17:07.600 --> 0:17:09.879 And there's still some banks out there suggesting that maybe 0:17:10.000 --> 0:17:12.800 payrolls this Friday is more important than CPI next week. 0:17:13.119 --> 0:17:14.520 Would you take the other side of that? 0:17:16.200 --> 0:17:18.159 I would take the other side of it in a 0:17:18.240 --> 0:17:21.280 consensus print. But if there's a surprise, if you hit 0:17:21.320 --> 0:17:26.000 a four point two unemployment rate or a some one 0:17:26.080 --> 0:17:29.119 hundred thousand break four headline payrolls, and then all of 0:17:29.160 --> 0:17:34.120 a sudden, the dual mandate employment aspect becomes a lot 0:17:34.200 --> 0:17:35.880 more relevant than CPI. 0:17:36.280 --> 0:17:38.080 Dean, how are you thinking about that trade off? If 0:17:38.160 --> 0:17:41.480 unemployment continues to creep hire this Friday, does it take 0:17:41.520 --> 0:17:44.440 some way away from the importance of CPI next Thursday. 0:17:45.800 --> 0:17:48.080 I think at this point the fad really is focused 0:17:48.080 --> 0:17:53.920 on inflation. The FED needs to see inflation headed back 0:17:54.000 --> 0:17:56.800 toward the two percent target, and if that's the case, 0:17:56.880 --> 0:17:59.280 then we can have a strong payroll report and the 0:17:59.280 --> 0:18:03.280 FED will still about cutting. So I think the Fed's 0:18:03.359 --> 0:18:05.840 focus really is on the CPI next week. 0:18:06.320 --> 0:18:09.280 Dean, how do you understand what some of the data 0:18:09.320 --> 0:18:12.800 has been saying in terms of slowing but not slow? 0:18:13.080 --> 0:18:15.280 There is this feeling right now, especially as you look 0:18:15.320 --> 0:18:17.680 more to the inflation print than you do the labor market. 0:18:18.320 --> 0:18:21.160 There has been this feeling that we're on the precipice 0:18:21.400 --> 0:18:25.600 of something that could be more punitive for the US economy. 0:18:26.080 --> 0:18:30.160 Do you agree? And if not, why not? I don't agree. 0:18:30.400 --> 0:18:33.560 I think there's been some mixshifts within the data that 0:18:33.680 --> 0:18:36.719 make some of the data look weaker than it really is. So, 0:18:36.760 --> 0:18:40.360 for example, consumers are shifting away from spending on goods 0:18:40.400 --> 0:18:44.040 and food services and towards other categories, but those other 0:18:44.119 --> 0:18:47.119 categories are not included in retail sales, So retail sales 0:18:47.119 --> 0:18:50.359 looks weaker than overall consumers spending, but markets tend to 0:18:50.359 --> 0:18:52.199 focus only on the retail sales report. 0:18:52.720 --> 0:18:54.240 So that's part of what's. 0:18:54.040 --> 0:18:57.680 Happening, is that consumers are shifting toward pre COVID norms, 0:18:57.960 --> 0:18:59.760 and that's not showing up in some of the data 0:18:59.800 --> 0:19:00.879 that people are focused on. 0:19:01.480 --> 0:19:02.760 Do you agree in ian. 0:19:04.200 --> 0:19:07.600 So, I would say that generally speaking on the consumption side, 0:19:07.680 --> 0:19:10.720