Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple CarPlay or Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
(00:25):
us live on YouTube.
Speaker 2 (00:27):
No one better than Anastasia Amroso, chief investment strategist at ICAP,
who was trumpeting large cap growth participate when it was
a very lonely call. Let's recapitulate right now, I'm hearing
people come over to the Amoroso side. Is it still
large cap growth in tech? Look?
Speaker 3 (00:48):
I think so. I think back in March we were
talking about the sell off being temporary, and of course
you know you were now in late May and here
we are. The SAP is up, and actually we talked
about software, and software is up. AI software in particular
is up about twelve percent for the year. So yes,
I think the reasons are still plentiful to continue to
stick with stocks. And you know, Tom, one of the
things you have to do is you'll have to look
(01:10):
at the economy. And while the sentiment around the economy
fell apart, the hard economic data never did so. As
a result, we're still looking at two point three percent
GDP growth this quarter when everybody was worried about the
tariff impact. So that's the first thing. The second thing
is the determination you just heard from Peter Navarro to
cut those deals and continue to negotiate is absolutely there.
(01:32):
So as long as that's the drum beat, then I
think we have to discard any sort of data that
goes against that. And then the last thing I would say,
tom you know, tomorrow we get the core PC inflation report,
which is projected to be about two and a half percent,
and whether it's oil prices that are lower, whether it's
wages that are lower, all of that is supportive. So
(01:52):
I still think investors are not tapped out. It's not
max bullish by any means. So I think we add here.
Speaker 2 (01:58):
I have been brought up the three point ex trillion
of cash Paul out there.
Speaker 4 (02:03):
Yep, Yes, it's always been out there. I mean earlier
this year it was out of the US, out of cyclicals,
out of tech. Now it seems to be if I
look at the S and P five hundred, if I
look at nastacy, it seems to be that that trade's
getting reverse ship hereople coming investments, coming back to the US,
back into cyclicals, back into tech. Was it just a
(02:23):
what was that?
Speaker 3 (02:24):
Oh, there's a lot of discussion around that. And first
of all, the month of May has all been about
these star reversals back into the US tech and back
into the US and back into cyclicals. But if you
actually look at the performance here to date, it's the
defensive sectors like utilities, for example, that lead the SMP.
They're up about five or six percent. The semiconductors, for example,
(02:45):
are down about five to six percent. So I don't
think it's actually too late for this rotation trade. And look,
we were never in the camp of the US exceptionalism
being over, because what's not over, for example, is the
fact that we have one of the most constructive tax
policies relative to our developed market peers. The fact that
(03:06):
the corporate tax rate in the US is twenty one
percent and with some write offs, maybe is the effective
one is even eighteen percent. That is a very constructive
environment to do business in the United States, and obviously
that's what the administration is trying to foster through terror
policy as well.
Speaker 4 (03:22):
Do we have to bring the evaluation discussion back on
the table because boy, when the market's sold off, a
lot of folks are saying, wait, eighteen times earnings, I'm
going to go in and buy this thing. But now
we're back, you know above twenty times, How do you
think about earnings? Because there still may be some earnings risk.
Speaker 3 (03:34):
In this market, right, So a few weeks ago we
sort of had when we didn't know what is likely
to happen with terrorists, we sort of had this binary risk.
We either have to price in a recession and therefore
recession or earnings, which could have taken us well, it
has taken us as low as five thousand, but could
have taken us lower if we also had to assign
a recession in multiple. Now we don't have to assign
a recession in multiple, and we actually have to focus
(03:56):
on the earnings not only this year but next year,
which are expected to be around three hundred and seven dollars.
So if you apply the existing multiple to that, you
actually do get north of six thousand on the S
and P five hundred. And that's why to Tom's point,
I say, large cap stocks are certainly worth staying with.
Speaker 2 (04:13):
What does free cash flow look like? In use of cash?
I mean back when you were lonely and correct. The
answer is the free cash flow came in and I'm
hearing a lot of fancy Well, it's not going to
be this first second derivative, Da da da da da.
Do you see sustained free cash flow by the market leaders?
Speaker 3 (04:32):
I mean, look, I do, and the use of free
cash flow I think certainly would benefit the share repurchases
and buybacks, and Tom, that's what we're seeing in the market.
We actually have some of the record authorizations for corporate
buybacks and that is such a strong presence in the
market as well, which is why I say market participants
are not tapped out. It's individual investors, it's hedge funds,
(04:53):
it's CTAs, but it's also corporate is buying back those shares. Look,
the beauty of the setup, Tom, is a corporate margins
are in your highs and so there's a lot of
room to absorb the potential negative impact of tariffs.
Speaker 2 (05:09):
Just quickly here, how lonely do you feel now? Is
everybody in the AMRO support I think it's sort of
a pretty lonely call. There's a lot of fear out there, right,
you know.
Speaker 3 (05:19):
I still think there's a degree of fear out there.
But I'll just quote these stats you know that you know,
back in April you had about sixty six percent of
investors that were bearish. That is not the number today.
It's probably closer to thirty percent now, couple. It's a
big reversal. A couple of weeks ago you probably had
only twenty percent of investors that were bullish. Today that's
(05:40):
about thirty seven percent, But it's not fifty It's not
half of the investors that we're in the bullish camp
to start the year. So I think we need a
few more to join the party.
Speaker 2 (05:48):
Don't be a stranger. Come back again to sure of
visits today. Anastasia am Aroso with that capital, She's been
courageous about long in the market for years.
Speaker 1 (06:02):
You're listening to the Bloomberg Surveillance podcast. Catch us live
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Speaker 2 (06:15):
Now joining US d ives in videos not Cisco right.
Speaker 5 (06:20):
It's almost an insult to in video when you say
look because the reality is that it's a fourth Industrial
revolution and it's being led by godfather of AI, Jensen
and video. There's only one chip in the world, few
on this and that's why I believe four trillion and
eventually five trillion is where we're going to see for in.
Speaker 2 (06:37):
Okay, in the ives perspectives on this page forty two
risk factors. What's the risk factor for the certitude this
thing's going to work out?
Speaker 5 (06:47):
Look, I mean when you think about China, and obviously
that's all factored in here. I mean, anything that gets
a little positive in terms of moves on trade and
tariffs between US and China is ultimately that that to
me right now, the biggest risk is just trying to
and I think Jensen called it out shout across about
Trump administration. You're essentially giving away the China business because
(07:10):
of the AH twenty to Huawei, and that's the biggest risk.
But tom it just comes down to, like it is
Jensen and Nvidia's world. Everyone else is paying rent when
it comes to AI.
Speaker 4 (07:20):
So what was the biggest takeaway from the earnings?
Speaker 5 (07:22):
Last night?
Speaker 4 (07:22):
It stocks up five six percent this morning, what's the
street taken away from it?
Speaker 5 (07:26):
Was a staggering quarter in a bullish way relative to
the demand. I believe right now, demands that Truman supply
eight to one.
Speaker 4 (07:34):
You got SOPs supplying supply eight to one.
Speaker 6 (07:38):
Eight to one.
Speaker 4 (07:39):
Wow, So what where does this company go? What does
Nvidia do now to kind of take advantage of that
demand out there?
Speaker 5 (07:47):
It's when you think about autonomous robotics physical AI. Eventually
keen with a robot, you know, in his in his palace.
Speaker 2 (07:56):
You've been talking to Mikey.
Speaker 5 (07:58):
Look, this is the only way it's fueled is by Nvidia.
So to me, now, the AI revolution coming to Middle
East sovereigns they want to be online.
Speaker 2 (08:10):
It's on a unit basis. They're selling these things, right,
do you have a linear I mean, I got seventy
seven percent up free cash flow, but these numbers we've
never seen this. How do you extrapolate the unit growth
into the future. Forget about price, forget about tech boys
with their fancy shoes and you going out to all
(08:31):
the conferences you go to on a unit basis? Is
it a linear extrapolation?
Speaker 5 (08:37):
Look, it's it's unprecedent in terms of what we've seen.
But to give granted, but if you look, it's almost
it's linear. But to the point that right now you
only have three percent of enterprises in the US that
have actually even gone down the AI path. So when
you think about the demand trajectory and where we ultimately
(08:57):
see this playing out, I mean you will be on
a trajector to ten dollars today.
Speaker 2 (09:02):
Paul knows it. Cold pract and gamble. What in God's
name is shamp vellow ballsom shampoo. What are they gonna
do with AI?
Speaker 5 (09:11):
They're gonna look at marketing penetration and customers. They're gonna
look at all their data, probably seventy percent of it
that they basically they have not analyzed, and they're gonna
come up with eight, ten, fifteen use cases for how
AI agents could be deployed. Which is bullish from Microsoft,
bullish from MESSI of AI pound tier, bullish ultimately for
(09:34):
the rest of the food chain.
Speaker 2 (09:35):
Well, I looked at the chart yesterday. I mean the
quiet story at Q two is the moonshot in Microsoft
maybe record highs this morning, yep, yep.
Speaker 4 (09:43):
So Nvidia expec's revenue about forty five million in forty
five billion in the second fiscal quarter despite new export
restrictions costing about eight billion. That's a headwind.
Speaker 5 (09:53):
Okay, let's just talk Apple, And there's why the stocks
up Apples to Apples Street, which is say April second,
you know libration, they didn't happen streets at forty eight billion, yep, okay,
Apples Apples, it would have been fifty three a five
billion piece. So Paul, that to me, it's when but
that speaks apples to apples, and everyone recognizes, I mean
(10:15):
you are you're looking at something that's really been unpressed
and I had relative to what we're seeing with them.
Speaker 2 (10:21):
Can I on it?
Speaker 4 (10:23):
Can my chip guys do a workaround whatever the US
restrictions are?
Speaker 5 (10:26):
Well, that's that the market's basically reading through this saying
at one point you're gonna have to come to the table.
Part of negotiations. When you get chips on the table,
it's in video, it's Apple. When you think about trum administration,
come to the table. And and that's something where there
could be some work around eight billion that they've given away,
maybe half of that they get back.
Speaker 2 (10:47):
Okay, Apple. Unfortunately the chart doesn't look like Microsoft. I
got Apple right now down twenty two percent from the peak.
We don't have time for the Why how does Tim
Cook turn it around?
Speaker 5 (10:59):
I mean he this is continues to be a hall
of fame moment in terms of how he's now the
get moment.
Speaker 2 (11:04):
Come on, Paul told me to buy this thing at
the beginning of the year. I'm down twenty, but not
a hall of fame moment.
Speaker 5 (11:11):
It's a hall of fame moment relative to the China
tariffs and getting around in ultimately India being the life raft.
You're gonna have sixty five seventy percent of assembly coming
out of India. And I think, look, no company is
more caught in the storm when it comes tariffs than
Cook and Cooper. Tina will be at WWDC. It's the
start of that broader AI strategy. I first said that
(11:32):
last year, No and Tom. If you take out tariffs,
this is a stock that's forty to fifty dollars higher.
So my view is that Cook is ten percent politician,
nineteen percent CEO. He'll navigate around this. And I think
we city are six months from now. The name that
I think is way miss priced is Apple.
Speaker 4 (11:56):
Elon's going back to work. It seems like, what do
you expect it in the next six six months until.
Speaker 5 (12:00):
I mean the dark chapter is over right, and and
I think it's bullet because now the autonomous and robotics
feature is here. And ultimately, look this, it was a
fork in the road moment he bet on Tasla, And
now I think, even though there is still some brand
damage that remains, we weave the path through to a
two trillion dollar mark out for Tasla is now on
the table.
Speaker 2 (12:20):
Lisa, if your daughter in her prom, if her date
shows up in a tuxedo, that's that pink.
Speaker 7 (12:29):
That's the trend.
Speaker 4 (12:29):
Now that's what the kids are doing.
Speaker 2 (12:31):
The kids are doing. The kids going to show up
in tuxedo with.
Speaker 7 (12:36):
Like no everything like bananas, pineapples, like whatever on this ser.
Speaker 2 (12:42):
Toxedo.
Speaker 5 (12:43):
Because I keep thinking, I keep waiting for the keen
pink boats tie. We know, I think it's I think
with AI it could be coming with.
Speaker 2 (12:55):
Today they said ives was here and I went with pink.
But I think you look I did.
Speaker 5 (13:00):
It's phenomenal in the pink bow tie. I'm just I'm
just saying.
Speaker 4 (13:03):
You know, I just give my charity yesterday you did
what Yeah my tux seedo that had I had worn.
Speaker 7 (13:11):
In twenty years.
Speaker 6 (13:12):
Okay, that's why.
Speaker 2 (13:14):
Yeah, the difference, Paul, Paul, you would still get into
the tex exactly my tuxedo from twenty years ago.
Speaker 5 (13:21):
It happened single best buy Apple, single best buye Here
to me, it's Tesla, given the given the autonomous path,
and must recommitted that continues to be front and center.
Speaker 2 (13:34):
You're pro. I'm an amateur. I don't buy it. I
just can't get there, Paul, can you get there?
Speaker 6 (13:39):
I can't bet against Elon in this stock.
Speaker 4 (13:41):
It's just been.
Speaker 2 (13:42):
It's just been.
Speaker 4 (13:43):
It's been amazing story. And if he's back, if he's
really back, that's good for that He's back.
Speaker 2 (13:48):
That's the way we rolled. Dan's Thank you so much.
Speaker 1 (13:52):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay.
Speaker 8 (13:59):
And Android Auto with the Bloomberg Business App.
Speaker 1 (14:01):
You can also listen live on Amazon Alexa from our
flagship New York station, Just say Alexa, play Bloomberg eleven thirty.
Speaker 2 (14:09):
It is the most important interview of the day, folks,
Riveting America is with Andrew Gilbert joining us. Now he's
with ECP, but forget about that, far far more. Andrew
Gilbert has a massive cred out of stern On Data Centers. Yep,
you need to be neuutilities. I have seen the collective's
(14:31):
amount of hot air from people that didn't take thermodynamics
now is off the chart. Cut to the chase. Is
retail Electric America going to pay for Microsoft or in
Video's data center electric bill?
Speaker 6 (14:47):
Well, first, thanks for having me on.
Speaker 9 (14:48):
Happy to be here in really exciting time in our
industry for nuts for twenty five years, no growth, and
all of a sudden, we're on TV here after Nvidia earnings.
Speaker 2 (15:00):
It's better than me, so it works. Are we going
to pay for nvidious data center?
Speaker 7 (15:05):
Yeah?
Speaker 6 (15:05):
So across across it's a great question.
Speaker 9 (15:07):
Across the country, regulators are trying to figure out how
to make those companies pay for it, How to make Microsoft,
Amazon pay for it.
Speaker 2 (15:14):
Confidence they will, they will, and.
Speaker 9 (15:16):
I think they're already finding a better way to do
that in competitive markets. So regulated utilities want you and
I to pay it on our content bill, But competitive
markets it's different. Companies like ours invest in competitive generation
and we take the risk. And I think that's the
big difference between regulated areas like the southeast of the
country and competitive markets like the Northeast and Texas.
Speaker 4 (15:38):
So how do we power all these data centers. What's
the what's the path forward? Because I keep seeing Nvidia
and other companies from Microsoft and that we're building, We're building,
we're building, we're building. You've got to power this stuff.
I mean, I watch landman, I know how the oil
and gams industry works.
Speaker 2 (15:52):
Oh, here we go.
Speaker 5 (15:53):
Talk to us.
Speaker 6 (15:53):
How we're going to power this stuff with everything?
Speaker 2 (15:55):
Okay?
Speaker 9 (15:56):
This this is an industry that really again hasn't had
much demand growth, all of a sudden has an explosion
of it, and so we're going to need electricity from
all sources. Gas is going to have to be a
big component of it. Renewables as well, and that stuff
faces challenges with with tariffs and protectionist policies, with tax
credit risk on the renewable side. On the gas side,
it's just industry that for a while was sort of
(16:18):
adapting to almost no growth. So companies like ge Vernova
and Siemens are ramping up production capacity, but it's not
there yet, so it's going to take time.
Speaker 4 (16:27):
Is it a public private partnership here? What's the regulatory
environment that you guys in on the financial side.
Speaker 5 (16:35):
Need to see?
Speaker 9 (16:37):
Uncertainty has been I think used a lot in the
show and many shows recently. We need policy certainty. The
industry is ready to make investment the investments needed the industry.
Speaker 4 (16:45):
What is the industry? Is it just the power industry?
Speaker 2 (16:49):
Is it old?
Speaker 4 (16:49):
Is it exceon Mobile?
Speaker 2 (16:51):
Is electric?
Speaker 9 (16:53):
It's competitive generators like Constellation, Vistra Energy Talent companies like
that are the companies that going to move more quickly
than regulated utilities. But regular utilities, the dominions, the southerns,
they will be part of this too.
Speaker 2 (17:05):
Ge Vernova GV, I really don't know what it is.
All I know is mister Colp's genius. I got a
moonshot one fifty to four eighty five. Is that the
future of your business, whether it's private you know, like
your shop like ECP or public utilities boring Grammar, stock dominion.
I need to divo it an increase. Is this total
(17:27):
return of ge Fornova the future?
Speaker 9 (17:30):
It's all about the shortage of gas turbines. That's what's
driving gev's performance and that's what we're seeing.
Speaker 2 (17:37):
Yeah, but guess turbines aren't spinning windmules going around. Don't
give me this renewable energy. Song and dance is traditional energy.
Dare I say coal going to power Microsoft's need for
the fourteenth data center.
Speaker 9 (17:51):
Colon not Cole will survive a bit longer, but it's
declining and that's not going to change. Gas has really changed.
Gas has been the biggest kind of placement of coal,
and that's going to accelerate because data centers need twenty
four to seven electricity. Wind in solar don't provide that,
but wind in solar are cheap and that they can
be constructed quickly. So we need all of it to
(18:12):
meet this challenge. You can't do it with one feel source.
Speaker 2 (18:15):
See that.
Speaker 4 (18:15):
That's what I've understood.
Speaker 1 (18:17):
You got to have it all.
Speaker 4 (18:18):
Talk to us about nuclear I like the modular nuclear things.
Pop that baby right next to a data center. Let
it power it is that realistic?
Speaker 9 (18:25):
Well, if you're willing to pay I don't know, seven
times the price of gas, maybe really and we think
it will be a factor that cost will come down
over time, but it's not ready two years from now.
It's probably ten years from now.
Speaker 2 (18:39):
Man, I thought that was a cool, Well, this is fascining.
He's gonna be with us for the next four hours.
Andrew Gilbert with us. He's partner at ECP. We've been
dying to do this. Palls in the meeting at three am.
When are we going to do data centers? We're doing
it right now. Are the tech companies open or are
they opaque about their plan? It's like they're like, you know,
(19:01):
we have to keep our image jump. If you know,
Cooper Tino, they're out there wearing sneakers and you know,
you know they're Lulu Lemon and all that. Are they
Are they transparent about their electrical demand needs?
Speaker 6 (19:14):
Well, what's we mentioned uncertainty.
Speaker 9 (19:16):
What's certain is the top five or six companies are
going to spend four hundred million dollars a year on
this stuff. And that's good and that's going to drive
electricity demand growth.
Speaker 6 (19:24):
Yes, per year.
Speaker 9 (19:26):
On the on the opacity, sure, it's hard to get
projects connected. So if you're a meta and you have
a two gigawatt need, you're going to apply for projects
in different parts of each market and hope that one
of them kind of gets service, gets connected. So you've
got to make sure. You've got to have contingency plans.
So I think they're doing some of that. I think
(19:46):
they're becoming more transparent.
Speaker 4 (19:48):
You're thirty eight years old, dude, how did you You
guys are doing some serious stuff at ECPs. What's the
focus of what you guys are doing. You're investing equity
credit for power generation? Where's the where's the next five years?
Speaker 9 (20:07):
As I mentioned before, this industry was even the electricity
I think is the most exciting commodity in the world.
Speaker 6 (20:12):
Nobody cared about it three years ago.
Speaker 2 (20:14):
I've seen you at a bar. The whole bar goes
to sleep when you start talking gigawatts.
Speaker 6 (20:20):
But that is our focus, and it's an industry all
of a sudden is growing.
Speaker 4 (20:24):
Is this an administration that wants to support smart energy development,
whether it's fossil fuels or green I hope.
Speaker 2 (20:33):
So. Okay, how'd you react when Spain went dark? To
me the heart of the matter. You know, I did
a little bit of the act. Yes, I survived thermodynamics, folks,
not quantum mechanics. But that's a different story. Okay, great
Spain goes dark because of the grid and the rap is.
I'm speaking out of turn, folks, a bunch of touchy
(20:56):
feely theory. How does America avoid apearch black Spain for
two days?
Speaker 9 (21:02):
I think it's about paying and compensating generators for reliability.
A big challenge in the electricity market is the capacity
that's not needed most of the time, but is needed
in that five percent scenario. And you've got to make
sure those those units are compensated, and they're starting.
Speaker 2 (21:17):
To be and honor Dan Fuss, Boston, Looma's sales. Can
Quebec Hydro come to the rescue. Can the Canadians be
a data center conduit to keep us in or is
it just too far to get it to some data
center in French Hills, Arkansas?
Speaker 9 (21:31):
They need they need it up there too, need it
up there up there, especially during the winter. So it's
it's not twenty four to seven reliable type type generation,
which is what we need now.
Speaker 2 (21:39):
Lisa emails in, should I put solar panels on my
garage roof?
Speaker 9 (21:44):
Maybe maybe losing that tax credit soon to do that
so it could get a little bit more expensive.
Speaker 2 (21:49):
Should we have the text credit? Yes, it's radio. You
got to talk.
Speaker 4 (21:54):
What's the I mean, just real quickly, what's the what's
the next investment you guys want to make? Where do
you want to put capital for your Where do you
want to put your client's capital?
Speaker 6 (22:04):
Today it's it's powering data centers.
Speaker 9 (22:07):
So it's partnering with the biggest companies in the world
to supply these needs and to make sure that rate
payers aren't paying for it so it doesn't show up
on our electricity bills.
Speaker 2 (22:16):
Unfair question. Final question, Andrew Gilbert, which traditional utility has
best practices for the future.
Speaker 6 (22:25):
I think what.
Speaker 9 (22:27):
Some of the western utilities are doing in terms of
hardening and the efforts they're making around wildfire prevention is excellent.
It's a huge challenge they face to keep that, to
keep the wire safe, to keep people safe, and I
think they're doing a fantastic job turning those businesses around.
Speaker 2 (22:43):
Don't be strange.
Speaker 6 (22:44):
Yeah, I would love to come back.
Speaker 2 (22:45):
Do you pay the congestion tax? Or who figure out
get around that? It's tough. It's tough, absolutely superb But folks,
I hope you love this. Somebody said, Lisa or Paul
came to the rescue and so get some geek on
all the data center elector stuff. Andrew Gilbert, did you
do take thermodynamics?
Speaker 10 (23:04):
And I did not.
Speaker 6 (23:05):
I'm not bright enough for that stuff.
Speaker 2 (23:07):
That's all.
Speaker 4 (23:08):
He's a banker.
Speaker 2 (23:10):
Andrew Gilbert, thank you so much. With ECP, we'll do
This again is the story, huge story.
Speaker 1 (23:21):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay.
Speaker 8 (23:28):
And Android Auto with the Bloomberg Business app.
Speaker 1 (23:30):
You can also watch us live every weekday on YouTube
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Speaker 2 (23:36):
We are honored to bring you the nation's expert in
civics or textbooks are absolutely foundational. Wendy Schiller is professor
at Brown University, the Tubyne Center and such. Wendy, so
honored to have you here. The document is incredibly detailed
for a hack like me. Halfway through on page twenty
five discussion, they go right to the Shiller matter. They
(23:59):
go right back to seventeen eighty eight, James Madison, Federalists
number forty eight. Where's the legislature? Whatever you believe in, folks,
whatever the issue is, pro Trump, anti Trump, etc. Wendy Schiller,
where is the legislature in this tariff battle?
Speaker 10 (24:18):
Well, it's fascinating that the court, this sort of structure
for tariff courts, has now intervened and said these are illegal.
You would have thought the Congress with you know, tariffs
are import taxes. Congress, particularly the House of Representatives have
a constitutional authority to generate revenue and to authorize spending.
(24:40):
Only the House can initiate that, and so they do
have jurisdiction over tariffs. And the president can suspend the rules,
you know, indefinitely if he so chooses. But the idea
was that this is just for an emergency and that
the power really rests with Congress. But the Republican dominated
House and Senate has chos and to let the president
(25:01):
extend this authority literally.
Speaker 8 (25:03):
Chosen to do that.
Speaker 10 (25:04):
They could have repriked it earlier this year, but they didn't.
So this is really fascinating that now the court that
is part of the trade, international trade and domestic trade
system has said no, these are illegal. Where is Congress?
Speaker 2 (25:17):
What will the appeal process looked like? Peter Navarro with
this year in an hour and a half from sixteen
hundred Pennsylvania Avenue Professor Schuler, Navarro's going to be apoplectic
over this. Who does the Trump administration appeal to? Who
are those guys?
Speaker 10 (25:34):
Well, that's the big question mark, I mean everything. This
is sort of an embedded government structure. So you know,
when you think about the final word, who has the
final word? And the Trump administration is not that interested
in any other structure in the American piblical system having
of power over them.
Speaker 2 (25:51):
You know, does everything go to.
Speaker 10 (25:52):
The Supreme Court? And the Supreme Court is interesting to watch.
We have a lot of decisions coming down in June
that we can expect, and you know, where do they
reign in executive power? And the important thing with the
Supreme Court is to make sure this isn't about Donald Trump.
This is about the balance of power in the system itself.
So that's where the education on tariffs lie. In immigration,
(26:15):
and we've seen the Court say to the President and Congress.
Congress has authority to make the laws on immigration, make
the laws. The president cannot just create immigration law. So
is that the same thing that will be applied to tariffs.
We're probably about to find out.
Speaker 4 (26:30):
So, Wendy, what happens in the interim here? I mean,
I feel like the United States negotiating with dozens of
countries over tariffs. What do I do if I'm I
don't know, China, Canada, Mexico, What do I do now
with this ruling?
Speaker 2 (26:44):
Well, I mean, when you think.
Speaker 10 (26:45):
About the other countries, she also think about small businesses.
Rhode Island is to state with a disproportionate amount of
small business owners.
Speaker 8 (26:51):
How do they plan? You know, are you paying the tax?
Speaker 10 (26:54):
Are you're not paying the attacks? And I call it
attacks because it is a tax, a tariff.
Speaker 6 (26:58):
You know, what do you do?
Speaker 10 (26:59):
Do you reach your prices?
Speaker 2 (27:00):
Now? You know? How much do you order?
Speaker 10 (27:02):
What do we think about the economy? It creates and
generates of course uncertainty. We saw the markets react badly
to major tariffs, then they come down. Now the market
is settled, and now there's continued uncertainty. So if you're
Navarro and you want to make the argument that government
that businesses should invest in the United States, they need
a stable, consistent business environment. And right now the trumpinstration
(27:24):
is not providing a stable and consistent business environment.
Speaker 4 (27:28):
How how hard do you think the Trump administration will
fight this court ruling and fight for its tariff mandates.
Speaker 10 (27:37):
The instinct to fight comes straight from the top.
Speaker 2 (27:39):
Yep.
Speaker 10 (27:40):
Trump is a fighter and he doesn't like limits on
his power. You know, he could be talked into lowering them,
and he has been talked into lowering them. And so
when you think about this, the president will fight for
the sake of retaining executive power, and Congress has to
send him a signal eventually, but they aren't acting on that. Again,
(28:00):
when we look at this tax bill, once it's out
of the way, what does Conger doud reserve itself. I
don't have great expectations for Congress to reserve itself once
this tax bill is done. I think the Republicans realize
that's not the only thing they're gonna get done this year.
Speaker 2 (28:12):
And your commute across the nation. A hugely eventful Thursday
with legal opinions which will brief you on a number
of times. Yere across the morning. Good Morning on YouTube
worldwide as well. Wendy Schiller of Brown University is with
us today. Wendy, I'm just going to cherry pick here.
And a gentleman from New Jersey, Samuel Alito, is on
the Supreme Court. Let's assume if it's a decision of
(28:37):
eight to one, seven to two, nine to one, whatever,
ninety two, three four, Alito's leading a certain charge to
support the executive branch. Describe the thinking of the people
like Judge Alito, who says, wait, you three judge, Court,
you can't do that. Describe Alito's federalists and Madisonian vial me.
Speaker 10 (29:00):
When you look at Alito and Thomas, they're different, I
think in the way they vote a lot similarly a
lot of the time. But Alito truly believes that the
entire apparatus of the federal government is far too large
and is completely inconsistent with the constitutional structure and the
intent of the federal government as it was created, which
(29:20):
was basically to protect the national defenses and allow an
economy to flourish, but basically let the original thirteen colonies
live the way they were. They were very different from
each other when they entered into the Union. And so
his argument is, nobody ever built, nobody ever intended for
this to be so big, nobody wanted it to bill
out this large. So I'm going to take every opportunity
(29:43):
to basically reduce the scope of the government. And what
he believes is that Congress drives the size of the
federal government, and not the President, that the President executes,
but that the president can in fact reduce the size
of the government.
Speaker 2 (29:57):
This is so important, I got to squeeze it in,
Professor Schuller, I look at a three judge court, Reagan, Trump,
what was it? Obama? Reagan Trump Obama judges. Nobody's talking
a regionalist theory here. They're just talking nuts and bolts
of a nineteen seventy seven agreement. And the huge detail
in their professionalism is this going to just go back
(30:17):
to originalist theory a la Thomas and Alito and what
President Trump supports.
Speaker 10 (30:23):
The problem for Thomas and Aldo to do that is
that original theory literally in not only the Federalist papers,
but the Constitution itself, is that the House controls tariff policy.
That you can't just wake up in the morning and
say I'm going to impost one hundred and thirty percent
or forty five percent on an individual country if you're
the president of the United States, only under extraordinary circumstances.
And the Constitution and the founders are very clear that
(30:44):
when you execute these powers as president in extraordinary circumstances,
those circumstances have to be extraordinary. So this is the
problem for Ledo on Thomason. Goes completely against their theory
of originalism to put all this power and opportunity in
the president's hands, and the Constitution that's quite explicit that
it should rest with the Congress, particularly the House represent.
Speaker 2 (31:03):
I can't Imagine your day, Wendy Show, Thank you so
much for being with us this morning with Brown University.
Speaker 1 (31:09):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple, Cocklay.
Speaker 8 (31:15):
And Android Auto with the Bloomberg Business App.
Speaker 1 (31:18):
You can also listen live on Amazon Alexa from our
flagship New York station, Just say Alexa Play Bloomberg eleven
thirty Lisa Matteo.
Speaker 2 (31:26):
Now with the newspapers, what do you happen?
Speaker 7 (31:29):
All right, I'm starting with this Wall Street Journal exclusive.
This is about Paramount Global. They're offering reportedly offering President
Trump fifteen million dollars to settle that lawsuit he had
against Paramount CBS News, But sources are telling the journal
that the President feels it's not enough. He wants more
than twenty five million. He also reportedly wants an apology
from CBS. If you remember that lawsuit, it was it
(31:51):
all surrounds how the network supposedly edited a sixty minutes
interview with Kamala Harris to make her sound better. CBS
says that's not true, but they're all also saying that
the President's team has dreatened another lawsuit against CBS related
to bias on its news coverage. But there's supposed to
be a session today like where this is unprecedented.
Speaker 2 (32:12):
I mean, isn't CBS supposed to fight back? Is the news?
Speaker 4 (32:15):
The reason they're not fighting back is they have a
planned merger with Skydance Media and they want.
Speaker 2 (32:19):
That to go through.
Speaker 4 (32:19):
They need the FCC approval and presumably there's some concerns
that the government will use this suit as a reason
not to approve the deal. Sherry Redstone needs the merger
to go through so she can get paid out. It's
as simple as that. So it's uh, you know, they'll
come to something.
Speaker 2 (32:34):
We've seen some just point out separate from this news.
We've seen resignations at CBS.
Speaker 6 (32:39):
Yeah, I mean, yep.
Speaker 2 (32:40):
There's a lot, a lot going on.
Speaker 4 (32:42):
There, a lot going on there, and it's all because
they need to get this deal approved and get it through.
So it's all about money as it just as it
always is.
Speaker 7 (32:52):
Neclas Okay, all right, we'll take you to luxury okay,
lvmh Okay. They said they could increase the price bits
goods by about three percent to office at tariffs. But
there are two things that they say they cannot raise
a price on and that is cognac and lower priced
beauty products, the lower priced end.
Speaker 2 (33:09):
Uh.
Speaker 7 (33:10):
They say things like jewelry, those high end jewelry they
can withstand the price increases because their buyers can take
on the price increases.
Speaker 8 (33:19):
But they've had a.
Speaker 7 (33:19):
Tough time with the alcohol sales. Apparently the Konnak Spirits
division they've dipped in the past year. They're selling fewer
champagne bottles on top of it too, so they're saying
those are the things they can't.
Speaker 5 (33:29):
I don't think I've ever had.
Speaker 4 (33:30):
Cognac is a variety of brandy named after the Commune
of Cognac, France.
Speaker 6 (33:37):
All right, it's not bad, Yeah, yes, Cognac.
Speaker 7 (33:40):
I did a little Hennessy sometimes.
Speaker 6 (33:46):
In the desk.
Speaker 4 (33:47):
It's the Hennessy Cognac, all.
Speaker 7 (33:49):
Right, it has and Champagne.
Speaker 2 (33:56):
I can't remember the name of the company now, but
it's a small, secure French thing, and like one third
of their business is Cognac or whatever. And it ain't happening.
I mean, it's not just LV, it's overall. So they're
not lowering the price of all the merch that sundry Keenes.
Speaker 7 (34:15):
Look at of the cognac and the spirits of the
other high end jewelry and that kind of stuff.
Speaker 2 (34:21):
Lewis Viewton shoes too much for the prom.
Speaker 7 (34:24):
Yes, definitely, that was a discussions. You can't even see
the feet with the dress, so don't even think about it. Next,
we've been talking a lot about AI and will they
replace jobs, right, so this story about salesforce kind of
puts that into perspective a little bit. They said they're
reducing the hiring for some roles because of its AI tools.
So its CFO gave this example and she said five
(34:47):
hundred customer service workers will be moved to different positions
within the company and that'll save them about fifty million dollars.
Also said they're hiring fewer engineers on top of it.
They say they hope it's going to make their staff
more productive. But at the same time, where they're increasing
are the ranks of its salesforce. So that's where they're
starting to see the difference. But we've seen it, you know,
different companies like Microsoft told.
Speaker 4 (35:09):
Offspring number three, get to a business where you have
a revenue number next to your.
Speaker 2 (35:14):
Name, that's it.
Speaker 4 (35:15):
That's my strategy, that's my advice. You know, get to
a business, and so salesforce?
Speaker 2 (35:19):
Do you do you believe equipment? We don't have the
time here, but like all these jobs are going to
go away, I just don't buy it.
Speaker 4 (35:26):
Well, I think a lot of them are. I mean,
I just think of my investment banking business. I mean,
do I need three analysts staffed on a deal to
draft inspect models. I don't think so.
Speaker 6 (35:37):
I don't think so.
Speaker 4 (35:38):
So I think there's gonna be an issue there.
Speaker 2 (35:39):
The newspaper SAIDY Lisa Matteo, thank you so much.
Speaker 1 (35:43):
This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each weekday,
seven to ten am Easter and on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(36:03):
and always on the Bloomberg terminal