April 9, 2025 • 21 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
President Donald Trump announced a 90-day pause on higher reciprocal tariffs that hit dozens of trade partners after midnight, while raising duties on China to 125%.
The president’s about-face comes roughly 13 hours after higher reciprocal duties on 56 nations and the European Union took effect, fueling market turmoil and stoking recession fears. Trump came under massive pressure from business leaders and investors to reverse course.
“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately,” Trump posted Wednesday on social media.
Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:
- Bloomberg Politics Contributors Rick Davis and Jeanne Sheehan Zaino.
- Bloomberg's Scarlet Fu.
- Bloomberg's Joe Weisenthal.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. You're listening to the
Bloomberg Balance of Power podcast ketch us live weekdays at
noon and five pm Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (00:25):
Instant reaction to the post on True Social we just
got from President Trump. It's kind of a first it's sour,
then it's sweet scenario. I'm actually going to lead with
the sweet part at the back end of this post
show because that's what's driving markets. The presidents suggesting based
on the fact that more than seventy five countries have
called representatives of this administration to discuss and negotiate a
(00:46):
solution two matters of trade, he says countries that have
not retaliated in any way, shape or form against the
United States, he is authorizing a ninety day pause on
the tariffs and a substantially lowered reciprocal tariff during this period,
he says, of ten percent, also effective immediately after he
led this post by saying effective immediately, he was raising
the tariff on China, which has retaliated to one hundred
(01:08):
and twenty five percent, but clearly risk assets and others
are seizing more on the ninety day pause for everyone
else ex China.
Speaker 3 (01:14):
I guess he read Bill Ackman's tweet.
Speaker 2 (01:16):
Yeah, that is exactly what he suggested.
Speaker 3 (01:19):
Based on the lack of respect. Kind of interesting. We've
got a red headline now in the terminal. This is
all happening before our eyes here on balance of power,
which is something that we're getting used to these days.
Ninety day tariff pause on non retaliating countries, remembering Scott
Bessett warned them not to retaliate, suggesting their behavior might
be rewarded. And here we are today, just hours after
(01:40):
retaliatory tariffs went into effect.
Speaker 2 (01:43):
We're now up nearly seven percentage points on the mast
and one hundred as a result of this just goes
to show you how eagerly markets were waiting for anything
they perceive as positive news on tariff. Clearly this pause
being read that way.
Speaker 3 (01:54):
And answers the question that this market could in fact
rally after being so technically broken. Clearly a market hungry
for news, and our political panel is at the ready here.
Bloomberg Politics contributors Rick Davis and Genie Shanzano are with us.
She is, of course democratic analyst, senior Democracy fellow with
the Center for the Study of the Presidency and Congress,
Rick partner at Stone Court Capital. President Trump said, Genie,
(02:18):
it's a good time to buy right now, Is he right?
Speaker 4 (02:22):
Well, yeah, I think this is the first sign we've
gotten in the last week that the president may be
listening to the markets and that wiser and cooler heads
may be prevailing over his decisions. And so I agree
the ninety day pause very very welcome news for everyone.
But I do think this raises other questions. If this
(02:43):
was all about negotiating, then is he still interested in reshoring?
If this was about raising revenue, it can't be a
negotiating tool. And so what this was all about, this
uncertainty and all of this destruction is a big looming question,
and I think his supporters have the right to ask that,
(03:04):
particularly those folks in the UAW who, against a lot
of odds, have supported him throughout this. You know, last week,
as he's raised these tariffs around the world and talked
about re shoring and permanent tariffs and never giving up.
Speaker 2 (03:19):
Well, certainly buyers are not giving up right now. They
are having a grand old time. It seems we are
approaching an eight percent now crossed it, eight percent gain
on the day for the Nasdaq one hundred. That would
be the biggest single day price move going back to
the depths of the COVID pandemic in March of twenty twenty.
The S and P five hundred right now up six
and a half percent. Take a single stock like Apple,
(03:40):
it's up the better part of twelve percentage points in
Nvidia around there as well, Nike. Some of these countries
we know were highly vulnerable in this tariff scenario are
rallying in a big way. Nikes up the better part
of eight percent, two and Rick. All of this coming
after just hours ago the President Trump told the public
it's a good time to buy. Did the President just
decly make a choice to help out financial markets here?
Speaker 5 (04:05):
You know, it's hard to tell, you know, what's what's
I mean? Obviously, you know the trade news is positive,
But everybody's been watching all day for this treasury benchmark
sale and thirty nine billion dollars went on to market
and it was a very well received sale auction. So
it could be a combination of all these things. It
(04:26):
could be any one of these things driving the outcome.
What I find fascinating is the fact that Donald Trump's
kind of predicting, I mean, like predicting people, you know,
buying at the you know, dip, and then actually making
news within the trading day to affect that. I mean,
we're in uncharted territory here when it comes to market manipulation.
(04:50):
And I'm not suggesting there's anything of malfeasance involved in this,
but you certainly have markets reacting both on the upse
and on the downside of every word that is uttered
out of Donald Trump's mouth, specifically to tariff policy. And
this is big news to ratchet up your tariff war
(05:12):
with the biggest trading partner and other largest economy in
the world, China, and at the same time given relief
to those people who aren't arguing or aren't retaliating. And
we don't have a list of who they are, we
assume that it's within that core group of countries that
he's already raised tariffs with and will now delay their
(05:34):
implementation at least on the reciprocal side, for the next
ninety days ninety days. But to think that this is
going to add any stability to the market. I would
be shocked and surprised.
Speaker 3 (05:46):
It's pretty Wild's here at the S and P five
hundred and now up seven point three percent. The Nasdaq
is up by almost nine percent. Gnia Tesla, by the way,
rising eleven percent. It's back above two hundred and forty
seven dollars here in heavy volume. Remembering that Howard Lutnik
suggested that people buy the shares, he said a lot
(06:06):
more than that. Actually at the time, this is when
the stock was at about two hundred and thirty five dollars.
He said to Fox two hundred and thirty five dollars
eighty six cents. Buy the stock. It'll never be this
cheap again. Donald Trump, this is a great time to buy.
Rick Davis just said it out loud. Do Democrats start
accusing this White House or calling for investigations into market manipulation?
Speaker 4 (06:31):
Oh? I think they absolutely are going to do that.
I think that we will be hearing about that. You know,
the reality is is that we have a president who
has just with the sort of stroke of a pen.
But it's not even that it is just going on
truth social can move this much of the market, and
(06:52):
you bet that Democrats are going to be wanting to
ask questions. The problem is investigation is hard in Congress
when you are in the minority, so that'll be trouble
for them. But I do think that the president is
hearing from these folks who have been hurt badly. And
you know you've mentioned Dilon Musk, You've mentioned a few
of these people. Bill Ackman, Dave Portnoy is a big voice,
(07:15):
and he has been saying he would consider even voting
Democratic if this continued. Ken Langon, So a lot of
people very close to Donald Trump who've lost a lot
of money. So I think we are certainly going to
hear Democrats call for investigations.
Speaker 2 (07:30):
All right. Geanie Schanzano and Rick Davis our political panel,
Bloomberg Politics and contributors, the both of them, thank you
so much for being with us as we contend with
this breaking news from President Trump. Yes, maybe bad news
for China's that tariff is immediately going up to one
hundred and twenty five percent, according to the President, but
for those who have chosen not to retaliate against the
US measures, a ninety day pause will also be immediately implemented,
(07:53):
and it has had an immediate impact on financial markets
off of the dramatic eize of the session. But we
are still talking about some very big moves here Joe
seven and a half percent rally on the Nasdaq, one
hundred more than six percent on the S and P,
and some of the individual movers incredibly remarkable as well.
Apple up double digits, Nvidia the.
Speaker 3 (08:11):
Same remarkable strength in this rally here. And this is
only a couple of minutes old. You wonder how much
longer we can keep this kind of momentum in a
market that has been so badly beaten down. Remarkable in
real time as we watch this unfold right now live
on Bloomberg, and.
Speaker 2 (08:28):
Our colleague Scarlet, who is watching it unfold with the
rest of us, she prepares to get us counted down
to the closing bell later. It's a very different story, Scarlet,
than what we were dealing with just a few minutes ago.
Speaker 6 (08:38):
Yeah, we were wondering whether the stock market was going
to extend its declines, and it looked like we're bouncing
around all morning. But this was kind of the signal
that everyone was waiting for. They were waiting for President
Trump to back off of his tariffs. He did that
for the countries that are negotiating, and this is something
that the administration has been very fourth rate on positing
(08:58):
all the different countries that have been coming up and
making phone calls and trying to reach out to speak
with the administration about some kind of negotiations, even though
it's not clear what exactly would move the Trump administration
to remove or mitigate some of those tariffs. What's notable
here is President Trump's comments about encouraging people to buy
the stock market. I wonder to what extent he's trying
(09:20):
to call the market bottom in the similar way that
President Obama did back in March of two thousand and nine.
Obama spoke on March third, and just over a week later,
the market hit its low point and from that point
on moved higher.
Speaker 3 (09:36):
We're talking about a social media post here, Scarlett. We
don't have an actual piece of paper from the White House.
We don't even know exactly what countries qualify as non retaliatory.
Speaker 6 (09:48):
Yeah, good point.
Speaker 3 (09:48):
We do have to acknowledge the fluidity here in this
market and the stakes after such severe losses. Why should
investors have confidence in anything to do with tariffs right now?
Speaker 6 (10:01):
I don't know that it's confidence to do with tariffs.
But for now, this is a bit of relief.
Speaker 5 (10:07):
This is a.
Speaker 6 (10:07):
Respite from the constant selling the bad news on Wall Street.
The projections that the US economy would tip into recession
have been steadily growing. A lot of people, including Larry
Fink of Blackrock. We're saying that many company executives were
telling him that the economy was already in recession. So
it kind of became this default scenario that we were
(10:28):
in recession and it would be only a matter of
time before the data backed that up. So this is
a break in that bad news story. So far this week,
we've seen the bad news really turn to the bond market.
Last week was all about the stock market kind of
in collapse mode, and it's been a lot more fluid
volatile this week. But the bond market has really taken
it on the chin this week, and there's a lot
(10:49):
of question marks over whether this is fundamentally driven or
technically driven.
Speaker 2 (10:54):
I just want to point out for those who have
been following the commentary of Bill Ackman in regard to
tariffs too, as Joe Us just moments ago did push
for the ninety day pause to begin with, which is
what Donald Trump seems to have decided here. He posts
simple message on x now just thank you, nothing else,
So I guess he likes what he's seeing here, just
as risk asset investors do. But Scarlett's remarkable that we
(11:15):
get this news today after we already have learned today
about instances of multiple companies making decisions or having to
issue guidance that is unclear or pull that guidance because
of these tariffs. Delta, of course not willing to stand
by a forecast. We had Bloomberg reporting of Amazon actually
pulling orders of inventories on goods coming from China. Already,
(11:35):
this is affecting corporate behavior, even if the President has
now decided that there will be a pause at least
in some instances.
Speaker 5 (11:41):
Yeah.
Speaker 6 (11:41):
Absolutely, It's difficult for any company to go out there
and say very much about how they anticipate the year
to shape up when they don't know what's going to happen.
At the end of the day, nobody knows anything, and
to give firm numbers is just inviting scrutiny and inviting
people to knock your stock down when it won't come
to fruition. And I think that's pretty much the case
(12:03):
we were speaking with a pharmaceutical analyst who was talking
about how this promise by President Trump to impose tariffs
on the pharmaceutical industry is of course meant to encourage
these companies to move their manufacturing back to the US,
But because their supply chain is so complex and it
would take years for them to do so, they're not
ready to commit to anything else. They already have a
(12:25):
lot of their manufacturing, their high value manufacturing, in the
United States, but they are able to bring in a
lot of their products from overseas, you know, into their
warehouses and work off of their inventory. They probably have
a two year waiting period where they don't need to
do anything and can see how this all shakes out.
Speaker 3 (12:42):
Bloomberg Scarlett Foo in the throes of the rally right now,
the S and P five hundred up three hundred and
ninety points, almost eight percent, Kaylee. The Nasdaq is up
by more than nine percent. A powerful move here, one
four hundred and fifty five point rally. As the Commerce
Secretary takes to Twitter Scott Best and I, he writes,
retweeting or showing a screen grab of President Trump's post
(13:04):
on truth social sat with the President, he says, well,
he wrote one of the most extraordinary truth posts of
his presidency. The world is ready to work with President
Trump to fix global trade, he says, and China has
chosen the opposite direction.
Speaker 1 (13:21):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Almalcarclay and Android Auto with the Bloomberg Business App. Listen
on demand wherever you get your podcasts, or watch us
live on YouTube.
Speaker 3 (13:37):
The Press Secretary and the Treasury Secretary in the driveway
outside the West Wing sparring with reporters there, answering questions
after Donald Trump made clear that the ninety day review
period would begin for countries not retaliating to reciprocal tariffs
placed by the United States. In fact took effect at
twelve one am. There's a big exception here, and that's
(13:57):
China now facing a one hundred twenty five percent tariff.
Markets taking off on news of this review. Scott Bessen
just now saying we have a ten percent temporary floor,
and something we've heard him say before, Kaylee, the initial
Trump tariffs are the maximum level. The idea would be
engaged with this White House, we start to pull them
(14:18):
back interesting to hear him suggest the president goaded China
into this position.
Speaker 2 (14:23):
Suggesting this was his strategy all along, And interesting to
hear as well the Press secretary telling the media assembled
to speak with these two that they misunderstood or were
missing Trump's art of the deal. Despite characterizations initially of
these tariffs being non negotiable and not a negotiating tactic,
maybe it all was for the deal at the end.
Speaker 3 (14:41):
You wonder if Peter Navarro read that book, because he's
been projecting six trillion dollars in revenue over the next
decade from these tariffs that are in some cases maybe
never going to take effect.
Speaker 2 (14:52):
Well, certainly the market is hoping maybe that that's the case.
At the very least, they're satisfied. Investors seem to be
with this ninety day pause. Again, the Nasdaq one hundred
nearly nine percent higher on the day. It's a seven
percent gain as we speak for the S and P
five hundred, and it's on that note we turn to
our colleague Joe Wisenthal, who of course is the host
of the Odd Lots podcast. Joe, is this just proof
that investors were waiting with baited breath for the opportunity
(15:14):
to buy the dip.
Speaker 7 (15:15):
I mean, what I'll say is, I think it's evidence
that it's a huge relief that there's at least some
impulse to take an off ramp here. And last night,
when we saw treasure yields blowing out, when we saw
the ten year hit four point five percent, these are
dynamics that happen when there is like extreme stress, illiquidity
(15:37):
run dynamics happening in financial markets that can't persist very long.
When you see moves like what we saw last night.
I know the Secretary of vest there said this was
not a response to what we were seeing in market volatility,
that it was all you know, art of the deal,
et cetera. Nonetheless, you know clearly the markets were under
(15:57):
extreme distress. And I'll just say a couple other things.
You know, the market is you know, I'm looking at
Nasdaq one hundred futures there's still down five and a
half percent. The China terrifts are still huge. That's going
to be you know, a huge effect on lots of
American companies. There's the ten percent sort of floor tariffs.
Those are still in place. So look, I think it's
a big relief that obviously some of this has been delayed,
(16:20):
but I think there's still quite a bit to work
through here at a very minimum before there's some sort
of like true all clear. Every major index is still
like deeply in the red on the year. S ANDP
is down nine point six percent on the year.
Speaker 3 (16:34):
Yeah, wow, Joe, it's great to have you with us here.
As this evolves before our eyes. One of the reporters
in the driveway asked a really important question of the
Treasury Secretary. Why should investors have confidence that this isn't
going to change again in the next twelve hours. These
just took effect at twelve oh one am. Speak to
the the psychology at this moment on Wall Street.
Speaker 7 (16:56):
I mean, I think there's two things.
Speaker 1 (16:58):
It's like.
Speaker 7 (16:58):
One is like, yes, we've now seen that these headlines
can change all the time. I guess like it seems
plausible that, Okay, for the next ninety days you get
some sort of respite on the non China companies. But
I think even outside of stock market, you have to
think about actual business investing, hiring, et cetera. And we've
seen the business side sentiment surveys absolutely horrendous. We haven't
(17:23):
gotten a lot of hard data that really speaks to
what was happening economically in the middle of Mark. You know,
earlier in the week we heard Larry Fink said every
CEO that he talks to thinks the recession has already begun.
Jamie Diamond talk about recession being the base case. So
even with the ninety day pause and the non China countries,
it's worthwhile to think about, like what the last several
(17:46):
days have done for the business community in terms of saying, like,
wait are you you don't know the rules now? We
don't know what the rules are going to be for
like three months probably, and so we continue to have
this environment where, if nothing else, the trading relationship is
highly uncertain, which at least of the short term, is
not conducive to investment. But they would probably argue, yeah,
(18:07):
it is short term pain for long term game.
Speaker 2 (18:10):
Well, it's incredible that these headlines hit in the one
o'clock hour ahead of the FED Minutes, which are due
to come out just a few minutes from now. Joe,
I guess whatever news we might have seen in them
probably overshadowed by these developments. Keeping in mind it's backward
looking minutes and they didn't know what the tariff levels
were going to be in the first place, let alone
that they would be pulled back. But it speaks to
the kind of uncertainty we keep hearing Chairman Pal talk
(18:30):
about as to why the Fed isn't entice to move
in any direction because so much is so unclear.
Speaker 7 (18:36):
There's so much that's so unclear, you know, short term
market based inflation measures going up, long term wants going down,
so much uncertainty, soft data going down, hard data still going.
Speaker 1 (18:47):
Up, you know.
Speaker 7 (18:48):
And the other thing is speaking of uncertainty. Look, you heard,
we all heard, you know, the White House's presentation there
about the art of the deal, and China has now
been go toed to being revealed as the bad actor, etc.
And Okay, that's you know, that's a fine story. However,
last week at the Rose Garden, those reciprocal tariffs were
very specifically presented in such a manner that every country
(19:10):
that runs a bilateral trade surplus with US, which is
almost every other every country was per se engaged in
bad acting. That this is that's the whole premise of reciprocity.
And so you know, it's clearly not presented that China
was anything particularly special last week. The story has evolved.
The story has evolved, whether it's negotiations first, non negotiations,
(19:33):
et cetera. So, you know, again, I'm not surprised that
there is this sort of massive, massive sigh of relief.
We actually knew that there would be a massive sigh
of relief on Monday when we got the fake headline
about a ninety day pause that so we knew the
market was looking for something like this. But I think
there's still a lot of question marks about the sort
of what any negotiations would like look like and what
(19:55):
kind of economic degradation we see.
Speaker 3 (19:57):
In the meantime, I'd love to hear the Trump interview
on odd lots. I have to say, we've only got
a minute left. We want to clear out in time
for fed minutes, Joe. But we heard the President said
last night this is a great time to buy, so
that this morning, in fact, everything is going to work out. Well,
is there a world in which you're allowing him to
eventually be correct?
Speaker 7 (20:18):
Yeah, of course no, I hope So, like you know,
I you know, there was a few things. It's like
one is obviously you hope to have like a prosperous
global economy, which would be fantastic. Even prior to the
Trump administration, there's been a lot of anxiety about the
nature of but the US and really everyone's reliance on
(20:40):
China for domestic manufactured goods. Obviously, the Biden tried administration
tried to affect change on that respect, at least with
respect to sort of like cutting edge tech like semiconductors,
et cetera. There is a lot that could be better
about the world. Again, you know, when you look at
how much the markets sell off, that's really indicative indicative
(21:01):
of like investors are much more pessimistic than they were
about this day of the world than they were at
the beginning of the year. But you know, look, like
I said, I understand and I think it makes total
sense why there's this massive cyber relief happening in market
right now.
Speaker 3 (21:16):
What a great chance to spend some time with Joe
Wisenthal next odd loss out of the Riot. It's great
to see. Thank you at World headquarters in New York.
Thanks for listening to the Balance of Power podcast. Make
sure to subscribe if you haven't already, at Apple, Spotify,
or wherever you get your podcasts. And you can find
us live every weekday from Washington, DC at noontime Eastern
(21:40):
at Bloomberg dot com.
Bloomberg Audio Studios, Podcasts, radio News. You're listening to the
Bloomberg Balance of Power podcast ketch us live weekdays at
noon and five pm Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 2 (00:25):
Instant reaction to the post on True Social we just
got from President Trump. It's kind of a first it's sour,
then it's sweet scenario. I'm actually going to lead with
the sweet part at the back end of this post
show because that's what's driving markets. The presidents suggesting based
on the fact that more than seventy five countries have
called representatives of this administration to discuss and negotiate a
(00:46):
solution two matters of trade, he says countries that have
not retaliated in any way, shape or form against the
United States, he is authorizing a ninety day pause on
the tariffs and a substantially lowered reciprocal tariff during this period,
he says, of ten percent, also effective immediately after he
led this post by saying effective immediately, he was raising
the tariff on China, which has retaliated to one hundred
(01:08):
and twenty five percent, but clearly risk assets and others
are seizing more on the ninety day pause for everyone
else ex China.
Speaker 3 (01:14):
I guess he read Bill Ackman's tweet.
Speaker 2 (01:16):
Yeah, that is exactly what he suggested.
Speaker 3 (01:19):
Based on the lack of respect. Kind of interesting. We've
got a red headline now in the terminal. This is
all happening before our eyes here on balance of power,
which is something that we're getting used to these days.
Ninety day tariff pause on non retaliating countries, remembering Scott
Bessett warned them not to retaliate, suggesting their behavior might
be rewarded. And here we are today, just hours after
(01:40):
retaliatory tariffs went into effect.
Speaker 2 (01:43):
We're now up nearly seven percentage points on the mast
and one hundred as a result of this just goes
to show you how eagerly markets were waiting for anything
they perceive as positive news on tariff. Clearly this pause
being read that way.
Speaker 3 (01:54):
And answers the question that this market could in fact
rally after being so technically broken. Clearly a market hungry
for news, and our political panel is at the ready here.
Bloomberg Politics contributors Rick Davis and Genie Shanzano are with us.
She is, of course democratic analyst, senior Democracy fellow with
the Center for the Study of the Presidency and Congress,
Rick partner at Stone Court Capital. President Trump said, Genie,
(02:18):
it's a good time to buy right now, Is he right?
Speaker 4 (02:22):
Well, yeah, I think this is the first sign we've
gotten in the last week that the president may be
listening to the markets and that wiser and cooler heads
may be prevailing over his decisions. And so I agree
the ninety day pause very very welcome news for everyone.
But I do think this raises other questions. If this
(02:43):
was all about negotiating, then is he still interested in reshoring?
If this was about raising revenue, it can't be a
negotiating tool. And so what this was all about, this
uncertainty and all of this destruction is a big looming question,
and I think his supporters have the right to ask that,
(03:04):
particularly those folks in the UAW who, against a lot
of odds, have supported him throughout this. You know, last week,
as he's raised these tariffs around the world and talked
about re shoring and permanent tariffs and never giving up.
Speaker 2 (03:19):
Well, certainly buyers are not giving up right now. They
are having a grand old time. It seems we are
approaching an eight percent now crossed it, eight percent gain
on the day for the Nasdaq one hundred. That would
be the biggest single day price move going back to
the depths of the COVID pandemic in March of twenty twenty.
The S and P five hundred right now up six
and a half percent. Take a single stock like Apple,
(03:40):
it's up the better part of twelve percentage points in
Nvidia around there as well, Nike. Some of these countries
we know were highly vulnerable in this tariff scenario are
rallying in a big way. Nikes up the better part
of eight percent, two and Rick. All of this coming
after just hours ago the President Trump told the public
it's a good time to buy. Did the President just
decly make a choice to help out financial markets here?
Speaker 5 (04:05):
You know, it's hard to tell, you know, what's what's
I mean? Obviously, you know the trade news is positive,
But everybody's been watching all day for this treasury benchmark
sale and thirty nine billion dollars went on to market
and it was a very well received sale auction. So
it could be a combination of all these things. It
(04:26):
could be any one of these things driving the outcome.
What I find fascinating is the fact that Donald Trump's
kind of predicting, I mean, like predicting people, you know,
buying at the you know, dip, and then actually making
news within the trading day to affect that. I mean,
we're in uncharted territory here when it comes to market manipulation.
(04:50):
And I'm not suggesting there's anything of malfeasance involved in this,
but you certainly have markets reacting both on the upse
and on the downside of every word that is uttered
out of Donald Trump's mouth, specifically to tariff policy. And
this is big news to ratchet up your tariff war
(05:12):
with the biggest trading partner and other largest economy in
the world, China, and at the same time given relief
to those people who aren't arguing or aren't retaliating. And
we don't have a list of who they are, we
assume that it's within that core group of countries that
he's already raised tariffs with and will now delay their
(05:34):
implementation at least on the reciprocal side, for the next
ninety days ninety days. But to think that this is
going to add any stability to the market. I would
be shocked and surprised.
Speaker 3 (05:46):
It's pretty Wild's here at the S and P five
hundred and now up seven point three percent. The Nasdaq
is up by almost nine percent. Gnia Tesla, by the way,
rising eleven percent. It's back above two hundred and forty
seven dollars here in heavy volume. Remembering that Howard Lutnik
suggested that people buy the shares, he said a lot
(06:06):
more than that. Actually at the time, this is when
the stock was at about two hundred and thirty five dollars.
He said to Fox two hundred and thirty five dollars
eighty six cents. Buy the stock. It'll never be this
cheap again. Donald Trump, this is a great time to buy.
Rick Davis just said it out loud. Do Democrats start
accusing this White House or calling for investigations into market manipulation?
Speaker 4 (06:31):
Oh? I think they absolutely are going to do that.
I think that we will be hearing about that. You know,
the reality is is that we have a president who
has just with the sort of stroke of a pen.
But it's not even that it is just going on
truth social can move this much of the market, and
(06:52):
you bet that Democrats are going to be wanting to
ask questions. The problem is investigation is hard in Congress
when you are in the minority, so that'll be trouble
for them. But I do think that the president is
hearing from these folks who have been hurt badly. And
you know you've mentioned Dilon Musk, You've mentioned a few
of these people. Bill Ackman, Dave Portnoy is a big voice,
(07:15):
and he has been saying he would consider even voting
Democratic if this continued. Ken Langon, So a lot of
people very close to Donald Trump who've lost a lot
of money. So I think we are certainly going to
hear Democrats call for investigations.
Speaker 2 (07:30):
All right. Geanie Schanzano and Rick Davis our political panel,
Bloomberg Politics and contributors, the both of them, thank you
so much for being with us as we contend with
this breaking news from President Trump. Yes, maybe bad news
for China's that tariff is immediately going up to one
hundred and twenty five percent, according to the President, but
for those who have chosen not to retaliate against the
US measures, a ninety day pause will also be immediately implemented,
(07:53):
and it has had an immediate impact on financial markets
off of the dramatic eize of the session. But we
are still talking about some very big moves here Joe
seven and a half percent rally on the Nasdaq, one
hundred more than six percent on the S and P,
and some of the individual movers incredibly remarkable as well.
Apple up double digits, Nvidia the.
Speaker 3 (08:11):
Same remarkable strength in this rally here. And this is
only a couple of minutes old. You wonder how much
longer we can keep this kind of momentum in a
market that has been so badly beaten down. Remarkable in
real time as we watch this unfold right now live
on Bloomberg, and.
Speaker 2 (08:28):
Our colleague Scarlet, who is watching it unfold with the
rest of us, she prepares to get us counted down
to the closing bell later. It's a very different story, Scarlet,
than what we were dealing with just a few minutes ago.
Speaker 6 (08:38):
Yeah, we were wondering whether the stock market was going
to extend its declines, and it looked like we're bouncing
around all morning. But this was kind of the signal
that everyone was waiting for. They were waiting for President
Trump to back off of his tariffs. He did that
for the countries that are negotiating, and this is something
that the administration has been very fourth rate on positing
(08:58):
all the different countries that have been coming up and
making phone calls and trying to reach out to speak
with the administration about some kind of negotiations, even though
it's not clear what exactly would move the Trump administration
to remove or mitigate some of those tariffs. What's notable
here is President Trump's comments about encouraging people to buy
the stock market. I wonder to what extent he's trying
(09:20):
to call the market bottom in the similar way that
President Obama did back in March of two thousand and nine.
Obama spoke on March third, and just over a week later,
the market hit its low point and from that point
on moved higher.
Speaker 3 (09:36):
We're talking about a social media post here, Scarlett. We
don't have an actual piece of paper from the White House.
We don't even know exactly what countries qualify as non retaliatory.
Speaker 6 (09:48):
Yeah, good point.
Speaker 3 (09:48):
We do have to acknowledge the fluidity here in this
market and the stakes after such severe losses. Why should
investors have confidence in anything to do with tariffs right now?
Speaker 6 (10:01):
I don't know that it's confidence to do with tariffs.
But for now, this is a bit of relief.
Speaker 5 (10:07):
This is a.
Speaker 6 (10:07):
Respite from the constant selling the bad news on Wall Street.
The projections that the US economy would tip into recession
have been steadily growing. A lot of people, including Larry
Fink of Blackrock. We're saying that many company executives were
telling him that the economy was already in recession. So
it kind of became this default scenario that we were
(10:28):
in recession and it would be only a matter of
time before the data backed that up. So this is
a break in that bad news story. So far this week,
we've seen the bad news really turn to the bond market.
Last week was all about the stock market kind of
in collapse mode, and it's been a lot more fluid
volatile this week. But the bond market has really taken
it on the chin this week, and there's a lot
(10:49):
of question marks over whether this is fundamentally driven or
technically driven.
Speaker 2 (10:54):
I just want to point out for those who have
been following the commentary of Bill Ackman in regard to
tariffs too, as Joe Us just moments ago did push
for the ninety day pause to begin with, which is
what Donald Trump seems to have decided here. He posts
simple message on x now just thank you, nothing else,
So I guess he likes what he's seeing here, just
as risk asset investors do. But Scarlett's remarkable that we
(11:15):
get this news today after we already have learned today
about instances of multiple companies making decisions or having to
issue guidance that is unclear or pull that guidance because
of these tariffs. Delta, of course not willing to stand
by a forecast. We had Bloomberg reporting of Amazon actually
pulling orders of inventories on goods coming from China. Already,
(11:35):
this is affecting corporate behavior, even if the President has
now decided that there will be a pause at least
in some instances.
Speaker 5 (11:41):
Yeah.
Speaker 6 (11:41):
Absolutely, It's difficult for any company to go out there
and say very much about how they anticipate the year
to shape up when they don't know what's going to happen.
At the end of the day, nobody knows anything, and
to give firm numbers is just inviting scrutiny and inviting
people to knock your stock down when it won't come
to fruition. And I think that's pretty much the case
(12:03):
we were speaking with a pharmaceutical analyst who was talking
about how this promise by President Trump to impose tariffs
on the pharmaceutical industry is of course meant to encourage
these companies to move their manufacturing back to the US,
But because their supply chain is so complex and it
would take years for them to do so, they're not
ready to commit to anything else. They already have a
(12:25):
lot of their manufacturing, their high value manufacturing, in the
United States, but they are able to bring in a
lot of their products from overseas, you know, into their
warehouses and work off of their inventory. They probably have
a two year waiting period where they don't need to
do anything and can see how this all shakes out.
Speaker 3 (12:42):
Bloomberg Scarlett Foo in the throes of the rally right now,
the S and P five hundred up three hundred and
ninety points, almost eight percent, Kaylee. The Nasdaq is up
by more than nine percent. A powerful move here, one
four hundred and fifty five point rally. As the Commerce
Secretary takes to Twitter Scott Best and I, he writes,
retweeting or showing a screen grab of President Trump's post
(13:04):
on truth social sat with the President, he says, well,
he wrote one of the most extraordinary truth posts of
his presidency. The world is ready to work with President
Trump to fix global trade, he says, and China has
chosen the opposite direction.
Speaker 1 (13:21):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on
Almalcarclay and Android Auto with the Bloomberg Business App. Listen
on demand wherever you get your podcasts, or watch us
live on YouTube.
Speaker 3 (13:37):
The Press Secretary and the Treasury Secretary in the driveway
outside the West Wing sparring with reporters there, answering questions
after Donald Trump made clear that the ninety day review
period would begin for countries not retaliating to reciprocal tariffs
placed by the United States. In fact took effect at
twelve one am. There's a big exception here, and that's
(13:57):
China now facing a one hundred twenty five percent tariff.
Markets taking off on news of this review. Scott Bessen
just now saying we have a ten percent temporary floor,
and something we've heard him say before, Kaylee, the initial
Trump tariffs are the maximum level. The idea would be
engaged with this White House, we start to pull them
(14:18):
back interesting to hear him suggest the president goaded China
into this position.
Speaker 2 (14:23):
Suggesting this was his strategy all along, And interesting to
hear as well the Press secretary telling the media assembled
to speak with these two that they misunderstood or were
missing Trump's art of the deal. Despite characterizations initially of
these tariffs being non negotiable and not a negotiating tactic,
maybe it all was for the deal at the end.
Speaker 3 (14:41):
You wonder if Peter Navarro read that book, because he's
been projecting six trillion dollars in revenue over the next
decade from these tariffs that are in some cases maybe
never going to take effect.
Speaker 2 (14:52):
Well, certainly the market is hoping maybe that that's the case.
At the very least, they're satisfied. Investors seem to be
with this ninety day pause. Again, the Nasdaq one hundred
nearly nine percent higher on the day. It's a seven
percent gain as we speak for the S and P
five hundred, and it's on that note we turn to
our colleague Joe Wisenthal, who of course is the host
of the Odd Lots podcast. Joe, is this just proof
that investors were waiting with baited breath for the opportunity
(15:14):
to buy the dip.
Speaker 7 (15:15):
I mean, what I'll say is, I think it's evidence
that it's a huge relief that there's at least some
impulse to take an off ramp here. And last night,
when we saw treasure yields blowing out, when we saw
the ten year hit four point five percent, these are
dynamics that happen when there is like extreme stress, illiquidity
(15:37):
run dynamics happening in financial markets that can't persist very long.
When you see moves like what we saw last night.
I know the Secretary of vest there said this was
not a response to what we were seeing in market volatility,
that it was all you know, art of the deal,
et cetera. Nonetheless, you know clearly the markets were under
(15:57):
extreme distress. And I'll just say a couple other things.
You know, the market is you know, I'm looking at
Nasdaq one hundred futures there's still down five and a
half percent. The China terrifts are still huge. That's going
to be you know, a huge effect on lots of
American companies. There's the ten percent sort of floor tariffs.
Those are still in place. So look, I think it's
a big relief that obviously some of this has been delayed,
(16:20):
but I think there's still quite a bit to work
through here at a very minimum before there's some sort
of like true all clear. Every major index is still
like deeply in the red on the year. S ANDP
is down nine point six percent on the year.
Speaker 3 (16:34):
Yeah, wow, Joe, it's great to have you with us here.
As this evolves before our eyes. One of the reporters
in the driveway asked a really important question of the
Treasury Secretary. Why should investors have confidence that this isn't
going to change again in the next twelve hours. These
just took effect at twelve oh one am. Speak to
the the psychology at this moment on Wall Street.
Speaker 7 (16:56):
I mean, I think there's two things.
Speaker 1 (16:58):
It's like.
Speaker 7 (16:58):
One is like, yes, we've now seen that these headlines
can change all the time. I guess like it seems
plausible that, Okay, for the next ninety days you get
some sort of respite on the non China companies. But
I think even outside of stock market, you have to
think about actual business investing, hiring, et cetera. And we've
seen the business side sentiment surveys absolutely horrendous. We haven't
(17:23):
gotten a lot of hard data that really speaks to
what was happening economically in the middle of Mark. You know,
earlier in the week we heard Larry Fink said every
CEO that he talks to thinks the recession has already begun.
Jamie Diamond talk about recession being the base case. So
even with the ninety day pause and the non China countries,
it's worthwhile to think about, like what the last several
(17:46):
days have done for the business community in terms of saying, like,
wait are you you don't know the rules now? We
don't know what the rules are going to be for
like three months probably, and so we continue to have
this environment where, if nothing else, the trading relationship is
highly uncertain, which at least of the short term, is
not conducive to investment. But they would probably argue, yeah,
(18:07):
it is short term pain for long term game.
Speaker 2 (18:10):
Well, it's incredible that these headlines hit in the one
o'clock hour ahead of the FED Minutes, which are due
to come out just a few minutes from now. Joe,
I guess whatever news we might have seen in them
probably overshadowed by these developments. Keeping in mind it's backward
looking minutes and they didn't know what the tariff levels
were going to be in the first place, let alone
that they would be pulled back. But it speaks to
the kind of uncertainty we keep hearing Chairman Pal talk
(18:30):
about as to why the Fed isn't entice to move
in any direction because so much is so unclear.
Speaker 7 (18:36):
There's so much that's so unclear, you know, short term
market based inflation measures going up, long term wants going down,
so much uncertainty, soft data going down, hard data still going.
Speaker 1 (18:47):
Up, you know.
Speaker 7 (18:48):
And the other thing is speaking of uncertainty. Look, you heard,
we all heard, you know, the White House's presentation there
about the art of the deal, and China has now
been go toed to being revealed as the bad actor, etc.
And Okay, that's you know, that's a fine story. However,
last week at the Rose Garden, those reciprocal tariffs were
very specifically presented in such a manner that every country
(19:10):
that runs a bilateral trade surplus with US, which is
almost every other every country was per se engaged in
bad acting. That this is that's the whole premise of reciprocity.
And so you know, it's clearly not presented that China
was anything particularly special last week. The story has evolved.
The story has evolved, whether it's negotiations first, non negotiations,
(19:33):
et cetera. So, you know, again, I'm not surprised that
there is this sort of massive, massive sigh of relief.
We actually knew that there would be a massive sigh
of relief on Monday when we got the fake headline
about a ninety day pause that so we knew the
market was looking for something like this. But I think
there's still a lot of question marks about the sort
of what any negotiations would like look like and what
(19:55):
kind of economic degradation we see.
Speaker 3 (19:57):
In the meantime, I'd love to hear the Trump interview
on odd lots. I have to say, we've only got
a minute left. We want to clear out in time
for fed minutes, Joe. But we heard the President said
last night this is a great time to buy, so
that this morning, in fact, everything is going to work out. Well,
is there a world in which you're allowing him to
eventually be correct?
Speaker 7 (20:18):
Yeah, of course no, I hope So, like you know,
I you know, there was a few things. It's like
one is obviously you hope to have like a prosperous
global economy, which would be fantastic. Even prior to the
Trump administration, there's been a lot of anxiety about the
nature of but the US and really everyone's reliance on
(20:40):
China for domestic manufactured goods. Obviously, the Biden tried administration
tried to affect change on that respect, at least with
respect to sort of like cutting edge tech like semiconductors,
et cetera. There is a lot that could be better
about the world. Again, you know, when you look at
how much the markets sell off, that's really indicative indicative
(21:01):
of like investors are much more pessimistic than they were
about this day of the world than they were at
the beginning of the year. But you know, look, like
I said, I understand and I think it makes total
sense why there's this massive cyber relief happening in market
right now.
Speaker 3 (21:16):
What a great chance to spend some time with Joe
Wisenthal next odd loss out of the Riot. It's great
to see. Thank you at World headquarters in New York.
Thanks for listening to the Balance of Power podcast. Make
sure to subscribe if you haven't already, at Apple, Spotify,
or wherever you get your podcasts. And you can find
us live every weekday from Washington, DC at noontime Eastern
(21:40):
at Bloomberg dot com.
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