June 26, 2025 • 18 mins
Asian stocks advanced after a gauge of global equities touched a record high Thursday on calming geopolitical concerns and increased expectations for Federal Reserve interest-rate cuts this year. Equities in Japan, South Korea and Australia all rose Friday after the S&P 500 advanced 0.8% to within striking distance of a new high. The Nasdaq 100 achieved the feat after rising 0.9% on Thursday, helping MSCI's global shares index to a record high. US stock futures edged higher Friday. We get market insights from Rebecca Walser, President at Walser Wealth Management.
Plus - Commerce Secretary Howard Lutnick says the US and China have finalized a trade understanding reached last month in Geneva. The China deal, which Lutnick said had been signed two days ago, codifies the terms laid out in trade talks between Beijing and Washington, including a commitment from China to deliver rare earths used in everything from wind turbines to jet planes. Lutnick speaks with Bloomberg Balance of Power hosts, Joe Mathieu and Kailey Leinz.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:10):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Chrisner.
Today President Trump provided an update on ongoing trade negotiations,
and he said that he signed a deal with China
on Wednesday. Now, the President really didn't elaborate much, but
later we got a few details from Commerce Secretary Howard Lutnik,
who spoke earlier to Bloomberg's Balance of Power, and will
(00:31):
bring you that conversation in a moment or two. But
we begin with markets today, the S and P five
hundred flirted with an all time high. Now, much of
the focus was on a resumption of FED rate cuts.
We caught up earlier with the head of the San
Francisco Fed, Mary Daily. She told us it doesn't look
like tariffs will cause a big spike in inflation, and
now she's open to cutting interest rates in the fall.
Speaker 3 (00:54):
It's both sides of our mandate that have really come
into frame since we brought inflation down from the really
high levels to something that's closer.
Speaker 4 (01:02):
To our target.
Speaker 3 (01:03):
Ultimately, we have to watch both sides and that's what
I'm doing. And then the fall looks promising for a
rate cut.
Speaker 2 (01:08):
That's Mary Daily there, head of the San Francisco FED,
speaking earlier to Bloomberg. Joining me now is Rebecca Waalzer.
She is president at Wallser Wealth Management, and she is
here in our New York studio. Nice of you to
drop by. It's great to see you, as always.
Speaker 1 (01:22):
Thank you, thanks for having me.
Speaker 4 (01:24):
There seems to.
Speaker 2 (01:24):
Be a lot of aggressive betting in the market right
now that we're going to get maybe as many as
three yeah, great cuts this year. How are you feeling
about what the Fed may deliver between now and let's
say December.
Speaker 1 (01:37):
Yeah, we just saw that today.
Speaker 5 (01:38):
Actually, Doug that the swaps market said maybe even a
third today, which was a little bit unusual. Listen, in
my opinion, I think Pal's hands and the board's hands
are tied until we at least get past July nine,
which is, you know, the tariff kind of due date
of getting these things resolved. We're getting alerts that Europe
is really getting closer to some kind of you know,
a policy tariff policy interchange with Trump administration. And of
(02:01):
course then we have the China situation, which is, you know,
unfortunately not nearly as far along as it should be,
you know, it's not going to stop at the fifty five.
That was just kind of a barometer trying to get
to July, and obviously they're not going to want tariffs
anywhere near that. So to Chairman Pal's defense, he can't
make policy in the absence of what's going to happen
(02:24):
after July nine, or after we get at least some
indication of how these these tariff and trade deals are
going to interact and play. And so from that perspective,
I understand why they're they're basically as such a small
percentage at least there was a small percentage of any
kind of cut for the July meeting, which would then
lead us obviously till September. If you think they're going
(02:45):
to get three dug and we don't start until September,
that's going to make it really tight, you know, because
you're going to have September, October, November, December, and it's
going to have to be almost to cut at every meeting.
So that almost would indicate to me that there's there's
systemic problems that would require recuts, and I just don't
see because of the animosity, unfortunately between President Trump and
(03:07):
the Federal Reserve at least with Powell. I don't see
Powe trying to assist necessarily with that aggressive of cuts
in the end of latter half of the year.
Speaker 2 (03:15):
So he was already floating the idea of naming another
fed Shairman even before Powell's term expires in eleven months
from now exactly. I think it's fair to assume that
whoever it is, they're going to be more jubvish than
Powell has been. Could this potentially create a problem.
Speaker 5 (03:32):
I mean, you know, I think the Supreme Court tried
to dispel any kind of ambiguity with what authority President
Trump had around the appointment or the removal of Powell
by basically stating in an unsigned order that Powe was
not removable. And so then you can see that Trump
is reacting to that by stating, hey, let me rautle
(03:53):
your cage by giving you maybe some anominees already.
Speaker 1 (03:55):
And I think that that's probably that's not good for us.
Speaker 2 (03:58):
We need to be nine it if his success for
as a dove, what could that do?
Speaker 1 (04:02):
I mean, that's a good point.
Speaker 4 (04:04):
You know.
Speaker 1 (04:04):
It's kind of similar to.
Speaker 5 (04:05):
A lot of these CEOs and a lot of these
countries hedging tariff policy and what they should do with
their factories and their supply chains, because they're saying, what's
really going to happen.
Speaker 1 (04:13):
In four years?
Speaker 5 (04:14):
Right, So if you have a Trump naming a successor
to pal who is vastly different than POW, then you
are going to upset the markets because they're going to
know that whatever policy power puts in place is going
to be probably immediately turned around eleven months from now.
Speaker 2 (04:29):
So you were talking about tariff policy as it relates
to July ninth, we're going to have this Commerce Department
investigation on the basis of national security issues and whether
or not they're going to be new tariffs on things
like pharmaceuticals, semiconductors, certain metal products, maybe even steel remains
an issue in terms of national security. We'll have to
(04:50):
wait and see. How are you feeling about how this
could feed into the equity market.
Speaker 5 (04:55):
Well, I think that it absolutely would boost any argument
for ten pffs. And I think that's because the American
people just don't really have a great understanding dug of
how the coronavirus supply chain problem really happen.
Speaker 1 (05:08):
With the biopharmaceutical products.
Speaker 5 (05:10):
We get a lot of our materials for our pharmaceuticals
from China, and whether it's an intentional thing of because
of tariff policy, or if it's a you know, pandemic
thing because the shipping lanes are closed, whatever the case
may be, our country cannot be beholden to Asia and
specifically China for the health of our citizens. And I
think when Americans understand how desperately dependent we are, then
(05:33):
you are probably going to see, you know, I think
that the means to an end. Tariffs in and of
themselves are not good, but there are means to an end.
So if it's too cheap to make something over there,
but it's costing you national security, then it might cost
more over here.
Speaker 1 (05:47):
But then we have it.
Speaker 5 (05:48):
On our shores and we don't have to worry about shipping,
and we don't have to worry about all kinds of
you know, wars, any kinds of things like those things.
Speaker 2 (05:54):
Does it surprise you that the equity market is trading
your record high right now?
Speaker 1 (05:57):
It's such a dichotomy. Even if you look at.
Speaker 5 (05:59):
The University of Michigan consumer sentiment right it plunged twenty
nine percent in the first four months. We don't usually
get a plunge that fast, that aggressively without a recession following.
It's always indicative in the last seventy nine years of
the survey of some kind of recession following. So to
get that the first part of the year and then
get these almost record highs, it is so mind boggling.
Speaker 1 (06:19):
But really, doug what it is is it's almost a bifurcation.
Speaker 6 (06:23):
Right.
Speaker 5 (06:23):
You're seeing, well, we don't nowhere else to invest in
the world, and I know a lot of money has
left the United States, a lot of the hedge funds
of transferred money out and gone to Europe and those things.
But really what you saw at the beginning of the
year was a lot of you know, negativity around this
tariff policy.
Speaker 1 (06:37):
It's going to cost more, we don't have.
Speaker 5 (06:38):
The growth going into this year to sustain these tariffs,
and so the the but the end of the day,
investors return home and say, gosh, this is the best
place to be, even though this has problems too. So
it is really weird to see such a high market
and know that consumers still are very tenuous at best
about this economy.
Speaker 2 (06:58):
So what are you telling aliens when they ask is
there opportunity? Have you identified one corner of the market
where there is I.
Speaker 5 (07:05):
Think that there's always opportunity right now, and you can
say that with absolute confidence because we are at the
beginning stages still of monetization of the Fourth Industrial Revolution.
So there is a ton of opportunity around AI, around robotics,
around blockchain technology and so crypto. So all of those
things are in their infancy and have a yet to
(07:26):
be fully monetized, which means that there is a long
runway for that, and that is not going to change
no matter who is the administration, no matter what the
terror policy is, no matter what's going on. So that
is an opportunity now it has yet to monetize, and
that does and so what happens if you think of
dot com before it monetized, it did come back down
and there's a massive pullback dot com crash. I'm not
suggesting that we might have that because we do have Nvidio,
(07:48):
We do have a lot of applications. You can see
you can type text messages now, your email now is
focused versus all because.
Speaker 1 (07:54):
It's got AI in there.
Speaker 5 (07:55):
So there are already it's already been monetized, but not
anywhere near to where we're going.
Speaker 1 (08:00):
So there is opportunity, but it'll be on the longer term.
Speaker 5 (08:03):
If we get into any kind of global war escalation
Doug and if these tarift policies really do become protections
of the United States where we have to really do
and change up supply chains, then you're going to see
equity global equity pullback.
Speaker 2 (08:15):
You're not concerned about valuations. I think the Nasdaq one
hundred is around thirty one times earnings right now.
Speaker 5 (08:20):
I am a thousand percent concerned about valuations. But this
is not a Trump trend or even a recent trend.
This trend goes back to two thousand nine global financial
crisis and really the United States changing from what I
would say, whatever monetary policy you want to say we
had before, to modern monetary theory. You can look at
the stimulus between monetary and fiscal from two thousand and
(08:40):
nine to and overlap lay that with the S and
P five hundred and you will see where the money went.
So these valuations have been propped up massively since the
global financial crisis.
Speaker 2 (08:51):
What about opportunities offshore? Are you seeing any right now?
Particularly in Asia?
Speaker 5 (08:56):
I mean, we think that there's a long term runway
in Asia but it's too risky for US right now
because of the fact that there's an animosity between Asia
and the West right now, and it's just Asia ex China.
Speaker 2 (09:09):
What about Japan South Korea?
Speaker 4 (09:11):
Sure?
Speaker 5 (09:11):
Sure, But then I would say you have to worry
about Japanese their debt problem. I mean, they obviously have
the worst debt problem in the world, and so far,
using the carry trade, it's.
Speaker 1 (09:20):
Been okay for them.
Speaker 5 (09:21):
But if that unwinds at any time like we saw
August fifth of last year, then Japan's going to have
a massive problem.
Speaker 2 (09:27):
Is India a market that you like?
Speaker 1 (09:28):
India? Absolutely?
Speaker 5 (09:29):
And they have a lot of natural resources, and they
absolutely have the population to sustain maybe new supply chains
that move out of China over to India, so I mean,
and they have the capacity as far as intellectual property
and their engineers. I mean, just an extremely smart population.
Speaker 2 (09:44):
So if you think the market has got it wrong
in pricing in aggressive FED rate cuts, does that mean
that the bond market is over its skis to the
point where you would avoid the bond market right now?
Speaker 1 (09:54):
I mean it's a little bit alarming to me.
Speaker 5 (09:57):
How fast the two year, the three year, and even
the ten year has pulled back in just the last
ten days, and you have to say to yourself, what
is this that's happening underline?
Speaker 1 (10:07):
You have to really look.
Speaker 5 (10:08):
I mean, you know, Doug, I have come in here
multiple times our last year and half and said, look,
we have a global macroeconomic currency turnover that has begun
away from the dollar.
Speaker 1 (10:18):
The d dollarsation even of China.
Speaker 5 (10:20):
Is so rapid and so fast that that is the
long term concern is that how are we as Americans
going to escape ultimately this and yet still not be
the sole superpower that has the total four x currency reserves,
Like we never are one hundred percent, but we were
so much higher than we are now. So that's the
bigger play is what is macroeconomically globally going to be
(10:40):
going on with currency? And do we even need a
reserve currency more now that we can buy directionally chain
trade with central bank digital currencies.
Speaker 2 (10:48):
Rebecca, thank you so much for joining us. Rebecca Waltzer there,
she is the president at Walser Wealth Management, joining here
in New York on the Daybreak Asia podcast. Welcome back
to the Daybreak Asia Podcast. I'm Doug Chrisner. Earlier today,
Commerce Secretary Howard Lutnik told us the US and China
(11:11):
finalized a trade framework reached last month during talks in Geneva.
He made the remarks late Thursday during an appearance on
Bloomberg's Balance of Power radio and TV program. Here's part
of the secretary's conversation with Bloomberg's Joe Matthew and Kaylee Lines.
Speaker 7 (11:26):
Secretary, I'm really interested in exploring the relationship between the
tax bill and tariffs. If you can maybe take us
by the hand here, does the tax bill only work
when you have the revenue coming from tariffs? And we're
of course having this conversation as we walk ever closer
to July ninth, the deadline here for the reciprocals. If
the bill alters anymore, does the tariff program need to
(11:48):
change with it?
Speaker 4 (11:50):
Not at all.
Speaker 6 (11:51):
The tariff program is in the power of the presidency, right.
Congress has given the president the power to work on
these towers to set these tariffs.
Speaker 4 (12:01):
So that's presidential power.
Speaker 6 (12:03):
So what's really interesting is this big, beautiful bill does
not count the eighty eight billion dollars of tariff revenue
we've received, and now we're earning up to thirty billion
a month in tariff revenue so far, and as you
get to July ninth, that number is only going to
go higher.
Speaker 4 (12:23):
We're going to announce a.
Speaker 6 (12:24):
Whole bunch of deals over the next week or so,
and then we're just going to send letters out to
everybody who's responded to us, put them in the right category.
Speaker 4 (12:32):
And awful go.
Speaker 6 (12:32):
So there's going to be tens of billions per month,
and that it's not included in the bill. So when
they talk about the deficit, when they're talking about the bill,
they're only talking about the things that that bill touches.
The extra four hundred or five hundred billion dollars a
year that the tariffs bring in, the new tariffs bring in,
(12:53):
that just doesn't count for the bill.
Speaker 4 (12:55):
But of course, of course that Kaiosh counts for America.
Speaker 8 (13:00):
Secretary, you just said that you're going to announce a
whole bunch of deals over the course of the next
week with what countries, And does that include the China
deal the President suggested was signed yesterday? What is that?
Speaker 4 (13:11):
So the China deal? We inked the deal.
Speaker 6 (13:14):
You remember, we had a trip to Geneva and then
that was being slow played. We got back together in London,
and that deal was signed and sealed two days ago.
Speaker 4 (13:26):
President just said it just the other just you know,
I don't know, fifteen minutes ago.
Speaker 6 (13:31):
And then he also suggested that we are, of course
at the very close finish line with India. Of course,
the way these deals happen is their Prime Minister and
their parliament have to approve it, and the President likes
to close these deals himself. I mean, he's the deal maker.
He loves to close it. I think we have deal
after deal after deal. The President's going to make his calls.
(13:52):
He's going to decide exactly the finishing touches on them,
and then what we're going to do is we're going
to lay out a structure of all the different kinds
of tariff arrangements with different countries. Right there are countries
with huge deficits, there are countries that are balanced. We're
going to set that all up and get that ready
for July ninth.
Speaker 7 (14:10):
So it sounds to me, Secretary, correct me if I'm
wrong as I listen to you, that we either get
eighty eight deals announced in the next two weeks or
there's going to be action one way or the other
by this administration that July ninth will be conclusive.
Speaker 4 (14:23):
If there's no deal, here's the.
Speaker 1 (14:24):
New recick world tariff?
Speaker 4 (14:25):
Is that right, of course? So what we're going to
do is we'll announce some deals. But basically the deals
we're going to announce are the are.
Speaker 6 (14:32):
Sort of the head of the class, the structural spot
in the line, and then all the other countries will
fit behind those categories. Right, So we're going to do
tom ten deals, put them in the right category, and
then these other countries will fit behind. So you'll have
South American deals and you'll have African deals. You'll have
it all structured and set up, and that's the model
how you do leadership. And we will put these people
(14:56):
in their proper buckets on July ninth. So those who deals,
we'll have deals, and everybody else who's been negotiating with us,
they'll get a response from us, and then they'll go into.
Speaker 4 (15:06):
That package and July ninth will go forward.
Speaker 6 (15:08):
And as the President said, if people want to come
back and negotiate further, they're entitled to, but that tariff
rate will be set and off will go.
Speaker 8 (15:17):
Where does Europe fall in that sequence, mister Secretary, There
was reporting from Politico today that the European Commission has
received the latest offer from the US. Are you expecting
that offer to potentially be accepted by next week?
Speaker 4 (15:30):
I think that Europe has done an excellent job. They
are working hard.
Speaker 6 (15:34):
They remember it was a very very slow process, if
you remember, and the President put out a truth. Kind
of motivated them. With that truth, as Donald Trump is
capable of doing, they came to the table.
Speaker 4 (15:44):
Then they started negotiating. They really put it on the table.
And I'm actually I've become optimistic.
Speaker 6 (15:50):
I think if you had asked me three weeks ago
before that truth, I would have said no way. But
since that truth by the President, I really feel I'm optimistic.
I think we could get a dealed now. Europe will
be right at the end. But you got to remember
there are largest trading partners. To the fact that they
come at the very end makes some sense. It's deep,
it's complex, but I'm kind of optimistic now. I wasn't
optimistic three weeks ago, but now since the President got involved,
(16:13):
I'm pretty optimistic.
Speaker 7 (16:14):
Actually, how about that fascinating secretary before you leave US?
I just went to trump Card dot Gov says trump
Card is coming. It's still on the way, when does
this happen? How many will you sell when this is
finally available? You've been saying that the phone's ringing off
the hook. Here where are they coming from?
Speaker 4 (16:31):
All?
Speaker 6 (16:31):
Right? Our waiting list, right, and we've got a sort
of a filtered waiting list where we go in and
make sure the emails.
Speaker 4 (16:39):
Are correct, the people are correct.
Speaker 6 (16:40):
Seventy five thousand people online at five million each. Right,
we're talking just under four hundred billion dollars with the
people online waiting for.
Speaker 4 (16:51):
It to go live.
Speaker 6 (16:52):
So obviously our focus is the big beautiful bill, and
once the big beautiful bill comes off.
Speaker 4 (16:57):
We're going to go with the Trump Card.
Speaker 6 (16:58):
And I'm really really excited for our objectives.
Speaker 4 (17:02):
That has two things.
Speaker 6 (17:02):
Both it'll bring in hundreds of billions of dollars to
reduce the deficit of the United States of America, and
it brings in great entrepreneurs into America and they'll build
our economy as well, so you get a double positive
from the Trump card.
Speaker 2 (17:16):
That's Commerce Secretary Howard Lutnik there speaking with Bloomberg's Joe
Matthew and Kaylee lines Here on the Daybreak Asia podcast.
Thanks for listening to today's episode. Of the Bloomberg Daybreak
Asia Edition podcast. Each weekday, we look at the story
shaping markets, finance, and geopolitics in the Asia Pacific. You
(17:37):
can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,
or anywhere else you listen. Join us again tomorrow for
insight on the market moves from Hong Kong to Singapore
and Australia. I'm Doug Chrisner, and this is Bloomberg
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:10):
Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Chrisner.
Today President Trump provided an update on ongoing trade negotiations,
and he said that he signed a deal with China
on Wednesday. Now, the President really didn't elaborate much, but
later we got a few details from Commerce Secretary Howard Lutnik,
who spoke earlier to Bloomberg's Balance of Power, and will
(00:31):
bring you that conversation in a moment or two. But
we begin with markets today, the S and P five
hundred flirted with an all time high. Now, much of
the focus was on a resumption of FED rate cuts.
We caught up earlier with the head of the San
Francisco Fed, Mary Daily. She told us it doesn't look
like tariffs will cause a big spike in inflation, and
now she's open to cutting interest rates in the fall.
Speaker 3 (00:54):
It's both sides of our mandate that have really come
into frame since we brought inflation down from the really
high levels to something that's closer.
Speaker 4 (01:02):
To our target.
Speaker 3 (01:03):
Ultimately, we have to watch both sides and that's what
I'm doing. And then the fall looks promising for a
rate cut.
Speaker 2 (01:08):
That's Mary Daily there, head of the San Francisco FED,
speaking earlier to Bloomberg. Joining me now is Rebecca Waalzer.
She is president at Wallser Wealth Management, and she is
here in our New York studio. Nice of you to
drop by. It's great to see you, as always.
Speaker 1 (01:22):
Thank you, thanks for having me.
Speaker 4 (01:24):
There seems to.
Speaker 2 (01:24):
Be a lot of aggressive betting in the market right
now that we're going to get maybe as many as
three yeah, great cuts this year. How are you feeling
about what the Fed may deliver between now and let's
say December.
Speaker 1 (01:37):
Yeah, we just saw that today.
Speaker 5 (01:38):
Actually, Doug that the swaps market said maybe even a
third today, which was a little bit unusual. Listen, in
my opinion, I think Pal's hands and the board's hands
are tied until we at least get past July nine,
which is, you know, the tariff kind of due date
of getting these things resolved. We're getting alerts that Europe
is really getting closer to some kind of you know,
a policy tariff policy interchange with Trump administration. And of
(02:01):
course then we have the China situation, which is, you know,
unfortunately not nearly as far along as it should be,
you know, it's not going to stop at the fifty five.
That was just kind of a barometer trying to get
to July, and obviously they're not going to want tariffs
anywhere near that. So to Chairman Pal's defense, he can't
make policy in the absence of what's going to happen
(02:24):
after July nine, or after we get at least some
indication of how these these tariff and trade deals are
going to interact and play. And so from that perspective,
I understand why they're they're basically as such a small
percentage at least there was a small percentage of any
kind of cut for the July meeting, which would then
lead us obviously till September. If you think they're going
(02:45):
to get three dug and we don't start until September,
that's going to make it really tight, you know, because
you're going to have September, October, November, December, and it's
going to have to be almost to cut at every meeting.
So that almost would indicate to me that there's there's
systemic problems that would require recuts, and I just don't
see because of the animosity, unfortunately between President Trump and
(03:07):
the Federal Reserve at least with Powell. I don't see
Powe trying to assist necessarily with that aggressive of cuts
in the end of latter half of the year.
Speaker 2 (03:15):
So he was already floating the idea of naming another
fed Shairman even before Powell's term expires in eleven months
from now exactly. I think it's fair to assume that
whoever it is, they're going to be more jubvish than
Powell has been. Could this potentially create a problem.
Speaker 5 (03:32):
I mean, you know, I think the Supreme Court tried
to dispel any kind of ambiguity with what authority President
Trump had around the appointment or the removal of Powell
by basically stating in an unsigned order that Powe was
not removable. And so then you can see that Trump
is reacting to that by stating, hey, let me rautle
(03:53):
your cage by giving you maybe some anominees already.
Speaker 1 (03:55):
And I think that that's probably that's not good for us.
Speaker 2 (03:58):
We need to be nine it if his success for
as a dove, what could that do?
Speaker 1 (04:02):
I mean, that's a good point.
Speaker 4 (04:04):
You know.
Speaker 1 (04:04):
It's kind of similar to.
Speaker 5 (04:05):
A lot of these CEOs and a lot of these
countries hedging tariff policy and what they should do with
their factories and their supply chains, because they're saying, what's
really going to happen.
Speaker 1 (04:13):
In four years?
Speaker 5 (04:14):
Right, So if you have a Trump naming a successor
to pal who is vastly different than POW, then you
are going to upset the markets because they're going to
know that whatever policy power puts in place is going
to be probably immediately turned around eleven months from now.
Speaker 2 (04:29):
So you were talking about tariff policy as it relates
to July ninth, we're going to have this Commerce Department
investigation on the basis of national security issues and whether
or not they're going to be new tariffs on things
like pharmaceuticals, semiconductors, certain metal products, maybe even steel remains
an issue in terms of national security. We'll have to
(04:50):
wait and see. How are you feeling about how this
could feed into the equity market.
Speaker 5 (04:55):
Well, I think that it absolutely would boost any argument
for ten pffs. And I think that's because the American
people just don't really have a great understanding dug of
how the coronavirus supply chain problem really happen.
Speaker 1 (05:08):
With the biopharmaceutical products.
Speaker 5 (05:10):
We get a lot of our materials for our pharmaceuticals
from China, and whether it's an intentional thing of because
of tariff policy, or if it's a you know, pandemic
thing because the shipping lanes are closed, whatever the case
may be, our country cannot be beholden to Asia and
specifically China for the health of our citizens. And I
think when Americans understand how desperately dependent we are, then
(05:33):
you are probably going to see, you know, I think
that the means to an end. Tariffs in and of
themselves are not good, but there are means to an end.
So if it's too cheap to make something over there,
but it's costing you national security, then it might cost
more over here.
Speaker 1 (05:47):
But then we have it.
Speaker 5 (05:48):
On our shores and we don't have to worry about shipping,
and we don't have to worry about all kinds of
you know, wars, any kinds of things like those things.
Speaker 2 (05:54):
Does it surprise you that the equity market is trading
your record high right now?
Speaker 1 (05:57):
It's such a dichotomy. Even if you look at.
Speaker 5 (05:59):
The University of Michigan consumer sentiment right it plunged twenty
nine percent in the first four months. We don't usually
get a plunge that fast, that aggressively without a recession following.
It's always indicative in the last seventy nine years of
the survey of some kind of recession following. So to
get that the first part of the year and then
get these almost record highs, it is so mind boggling.
Speaker 1 (06:19):
But really, doug what it is is it's almost a bifurcation.
Speaker 6 (06:23):
Right.
Speaker 5 (06:23):
You're seeing, well, we don't nowhere else to invest in
the world, and I know a lot of money has
left the United States, a lot of the hedge funds
of transferred money out and gone to Europe and those things.
But really what you saw at the beginning of the
year was a lot of you know, negativity around this
tariff policy.
Speaker 1 (06:37):
It's going to cost more, we don't have.
Speaker 5 (06:38):
The growth going into this year to sustain these tariffs,
and so the the but the end of the day,
investors return home and say, gosh, this is the best
place to be, even though this has problems too. So
it is really weird to see such a high market
and know that consumers still are very tenuous at best
about this economy.
Speaker 2 (06:58):
So what are you telling aliens when they ask is
there opportunity? Have you identified one corner of the market
where there is I.
Speaker 5 (07:05):
Think that there's always opportunity right now, and you can
say that with absolute confidence because we are at the
beginning stages still of monetization of the Fourth Industrial Revolution.
So there is a ton of opportunity around AI, around robotics,
around blockchain technology and so crypto. So all of those
things are in their infancy and have a yet to
(07:26):
be fully monetized, which means that there is a long
runway for that, and that is not going to change
no matter who is the administration, no matter what the
terror policy is, no matter what's going on. So that
is an opportunity now it has yet to monetize, and
that does and so what happens if you think of
dot com before it monetized, it did come back down
and there's a massive pullback dot com crash. I'm not
suggesting that we might have that because we do have Nvidio,
(07:48):
We do have a lot of applications. You can see
you can type text messages now, your email now is
focused versus all because.
Speaker 1 (07:54):
It's got AI in there.
Speaker 5 (07:55):
So there are already it's already been monetized, but not
anywhere near to where we're going.
Speaker 1 (08:00):
So there is opportunity, but it'll be on the longer term.
Speaker 5 (08:03):
If we get into any kind of global war escalation
Doug and if these tarift policies really do become protections
of the United States where we have to really do
and change up supply chains, then you're going to see
equity global equity pullback.
Speaker 2 (08:15):
You're not concerned about valuations. I think the Nasdaq one
hundred is around thirty one times earnings right now.
Speaker 5 (08:20):
I am a thousand percent concerned about valuations. But this
is not a Trump trend or even a recent trend.
This trend goes back to two thousand nine global financial
crisis and really the United States changing from what I
would say, whatever monetary policy you want to say we
had before, to modern monetary theory. You can look at
the stimulus between monetary and fiscal from two thousand and
(08:40):
nine to and overlap lay that with the S and
P five hundred and you will see where the money went.
So these valuations have been propped up massively since the
global financial crisis.
Speaker 2 (08:51):
What about opportunities offshore? Are you seeing any right now?
Particularly in Asia?
Speaker 5 (08:56):
I mean, we think that there's a long term runway
in Asia but it's too risky for US right now
because of the fact that there's an animosity between Asia
and the West right now, and it's just Asia ex China.
Speaker 2 (09:09):
What about Japan South Korea?
Speaker 4 (09:11):
Sure?
Speaker 5 (09:11):
Sure, But then I would say you have to worry
about Japanese their debt problem. I mean, they obviously have
the worst debt problem in the world, and so far,
using the carry trade, it's.
Speaker 1 (09:20):
Been okay for them.
Speaker 5 (09:21):
But if that unwinds at any time like we saw
August fifth of last year, then Japan's going to have
a massive problem.
Speaker 2 (09:27):
Is India a market that you like?
Speaker 1 (09:28):
India? Absolutely?
Speaker 5 (09:29):
And they have a lot of natural resources, and they
absolutely have the population to sustain maybe new supply chains
that move out of China over to India, so I mean,
and they have the capacity as far as intellectual property
and their engineers. I mean, just an extremely smart population.
Speaker 2 (09:44):
So if you think the market has got it wrong
in pricing in aggressive FED rate cuts, does that mean
that the bond market is over its skis to the
point where you would avoid the bond market right now?
Speaker 1 (09:54):
I mean it's a little bit alarming to me.
Speaker 5 (09:57):
How fast the two year, the three year, and even
the ten year has pulled back in just the last
ten days, and you have to say to yourself, what
is this that's happening underline?
Speaker 1 (10:07):
You have to really look.
Speaker 5 (10:08):
I mean, you know, Doug, I have come in here
multiple times our last year and half and said, look,
we have a global macroeconomic currency turnover that has begun
away from the dollar.
Speaker 1 (10:18):
The d dollarsation even of China.
Speaker 5 (10:20):
Is so rapid and so fast that that is the
long term concern is that how are we as Americans
going to escape ultimately this and yet still not be
the sole superpower that has the total four x currency reserves,
Like we never are one hundred percent, but we were
so much higher than we are now. So that's the
bigger play is what is macroeconomically globally going to be
(10:40):
going on with currency? And do we even need a
reserve currency more now that we can buy directionally chain
trade with central bank digital currencies.
Speaker 2 (10:48):
Rebecca, thank you so much for joining us. Rebecca Waltzer there,
she is the president at Walser Wealth Management, joining here
in New York on the Daybreak Asia podcast. Welcome back
to the Daybreak Asia Podcast. I'm Doug Chrisner. Earlier today,
Commerce Secretary Howard Lutnik told us the US and China
(11:11):
finalized a trade framework reached last month during talks in Geneva.
He made the remarks late Thursday during an appearance on
Bloomberg's Balance of Power radio and TV program. Here's part
of the secretary's conversation with Bloomberg's Joe Matthew and Kaylee Lines.
Speaker 7 (11:26):
Secretary, I'm really interested in exploring the relationship between the
tax bill and tariffs. If you can maybe take us
by the hand here, does the tax bill only work
when you have the revenue coming from tariffs? And we're
of course having this conversation as we walk ever closer
to July ninth, the deadline here for the reciprocals. If
the bill alters anymore, does the tariff program need to
(11:48):
change with it?
Speaker 4 (11:50):
Not at all.
Speaker 6 (11:51):
The tariff program is in the power of the presidency, right.
Congress has given the president the power to work on
these towers to set these tariffs.
Speaker 4 (12:01):
So that's presidential power.
Speaker 6 (12:03):
So what's really interesting is this big, beautiful bill does
not count the eighty eight billion dollars of tariff revenue
we've received, and now we're earning up to thirty billion
a month in tariff revenue so far, and as you
get to July ninth, that number is only going to
go higher.
Speaker 4 (12:23):
We're going to announce a.
Speaker 6 (12:24):
Whole bunch of deals over the next week or so,
and then we're just going to send letters out to
everybody who's responded to us, put them in the right category.
Speaker 4 (12:32):
And awful go.
Speaker 6 (12:32):
So there's going to be tens of billions per month,
and that it's not included in the bill. So when
they talk about the deficit, when they're talking about the bill,
they're only talking about the things that that bill touches.
The extra four hundred or five hundred billion dollars a
year that the tariffs bring in, the new tariffs bring in,
(12:53):
that just doesn't count for the bill.
Speaker 4 (12:55):
But of course, of course that Kaiosh counts for America.
Speaker 8 (13:00):
Secretary, you just said that you're going to announce a
whole bunch of deals over the course of the next
week with what countries, And does that include the China
deal the President suggested was signed yesterday? What is that?
Speaker 4 (13:11):
So the China deal? We inked the deal.
Speaker 6 (13:14):
You remember, we had a trip to Geneva and then
that was being slow played. We got back together in London,
and that deal was signed and sealed two days ago.
Speaker 4 (13:26):
President just said it just the other just you know,
I don't know, fifteen minutes ago.
Speaker 6 (13:31):
And then he also suggested that we are, of course
at the very close finish line with India. Of course,
the way these deals happen is their Prime Minister and
their parliament have to approve it, and the President likes
to close these deals himself. I mean, he's the deal maker.
He loves to close it. I think we have deal
after deal after deal. The President's going to make his calls.
(13:52):
He's going to decide exactly the finishing touches on them,
and then what we're going to do is we're going
to lay out a structure of all the different kinds
of tariff arrangements with different countries. Right there are countries
with huge deficits, there are countries that are balanced. We're
going to set that all up and get that ready
for July ninth.
Speaker 7 (14:10):
So it sounds to me, Secretary, correct me if I'm
wrong as I listen to you, that we either get
eighty eight deals announced in the next two weeks or
there's going to be action one way or the other
by this administration that July ninth will be conclusive.
Speaker 4 (14:23):
If there's no deal, here's the.
Speaker 1 (14:24):
New recick world tariff?
Speaker 4 (14:25):
Is that right, of course? So what we're going to
do is we'll announce some deals. But basically the deals
we're going to announce are the are.
Speaker 6 (14:32):
Sort of the head of the class, the structural spot
in the line, and then all the other countries will
fit behind those categories. Right, So we're going to do
tom ten deals, put them in the right category, and
then these other countries will fit behind. So you'll have
South American deals and you'll have African deals. You'll have
it all structured and set up, and that's the model
how you do leadership. And we will put these people
(14:56):
in their proper buckets on July ninth. So those who deals,
we'll have deals, and everybody else who's been negotiating with us,
they'll get a response from us, and then they'll go into.
Speaker 4 (15:06):
That package and July ninth will go forward.
Speaker 6 (15:08):
And as the President said, if people want to come
back and negotiate further, they're entitled to, but that tariff
rate will be set and off will go.
Speaker 8 (15:17):
Where does Europe fall in that sequence, mister Secretary, There
was reporting from Politico today that the European Commission has
received the latest offer from the US. Are you expecting
that offer to potentially be accepted by next week?
Speaker 4 (15:30):
I think that Europe has done an excellent job. They
are working hard.
Speaker 6 (15:34):
They remember it was a very very slow process, if
you remember, and the President put out a truth. Kind
of motivated them. With that truth, as Donald Trump is
capable of doing, they came to the table.
Speaker 4 (15:44):
Then they started negotiating. They really put it on the table.
And I'm actually I've become optimistic.
Speaker 6 (15:50):
I think if you had asked me three weeks ago
before that truth, I would have said no way. But
since that truth by the President, I really feel I'm optimistic.
I think we could get a dealed now. Europe will
be right at the end. But you got to remember
there are largest trading partners. To the fact that they
come at the very end makes some sense. It's deep,
it's complex, but I'm kind of optimistic now. I wasn't
optimistic three weeks ago, but now since the President got involved,
(16:13):
I'm pretty optimistic.
Speaker 7 (16:14):
Actually, how about that fascinating secretary before you leave US?
I just went to trump Card dot Gov says trump
Card is coming. It's still on the way, when does
this happen? How many will you sell when this is
finally available? You've been saying that the phone's ringing off
the hook. Here where are they coming from?
Speaker 4 (16:31):
All?
Speaker 6 (16:31):
Right? Our waiting list, right, and we've got a sort
of a filtered waiting list where we go in and
make sure the emails.
Speaker 4 (16:39):
Are correct, the people are correct.
Speaker 6 (16:40):
Seventy five thousand people online at five million each. Right,
we're talking just under four hundred billion dollars with the
people online waiting for.
Speaker 4 (16:51):
It to go live.
Speaker 6 (16:52):
So obviously our focus is the big beautiful bill, and
once the big beautiful bill comes off.
Speaker 4 (16:57):
We're going to go with the Trump Card.
Speaker 6 (16:58):
And I'm really really excited for our objectives.
Speaker 4 (17:02):
That has two things.
Speaker 6 (17:02):
Both it'll bring in hundreds of billions of dollars to
reduce the deficit of the United States of America, and
it brings in great entrepreneurs into America and they'll build
our economy as well, so you get a double positive
from the Trump card.
Speaker 2 (17:16):
That's Commerce Secretary Howard Lutnik there speaking with Bloomberg's Joe
Matthew and Kaylee lines Here on the Daybreak Asia podcast.
Thanks for listening to today's episode. Of the Bloomberg Daybreak
Asia Edition podcast. Each weekday, we look at the story
shaping markets, finance, and geopolitics in the Asia Pacific. You
(17:37):
can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,
or anywhere else you listen. Join us again tomorrow for
insight on the market moves from Hong Kong to Singapore
and Australia. I'm Doug Chrisner, and this is Bloomberg
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