Jim Bianco joins Bloomberg to discuss the Bond Market, Rate Cut Timing & the Post-Lockdown Economy

[Music] the second hour of Bloomberg surveillance begins right now live from New York City this morning good morning good morning for our audience worldwide this is Bloomberg surveillance your Equity Market on the S&P 500 positive on the week for a third consecutive week and positive on a session Equity Futures up by a third of 1% a stacked 60 Minutes for you coming up on the program Jim biano of biano research on why the 10-year yield could test 5% we'll speaked to I capitals Anastasia amaroso with stocks on course for three weeks of gains and Norman role of csis as Benjamin Netanyahu strikes a defiant tone we begin with our top story treasury yelds holding steady with a slew of fed speak on Deck Jim biano of biano research moving to neutral on bonds and writing this I expect a 10-year yield move to 5 to 550 to produce extreme sentiment and set up a decent Bon rally jimers are with us around the table for the next 60 minutes or so Jim good morning to you good morning to you you had phrase I think of the last 12 months that disinflation is transitory could you just tell us what was behind that Cole and where we are now well yeah I think you know that two things can be true at the same time that in 2122 you did have this transitory part of inflation with the supply chains normalizing and on CPI that produced 9% um then it came down but I think once we got rid of that transitory inflation what we're finding is is that we're probably stuck in a 3% inflation world so we're not going back to where we were pre pandemic we are in a higher nominal growth world we are in a higher inflation world but again it's a 3% inflation World which means elevated interest rates but nothing like Zimbabwe or anything like that well let's talk about the elevated level of race that we should be used to nothing like zimb way what should it be like well I think that what we're looking at with a 450 yield right now is probably pretty close to I'm talking about on the 10year yield you know something normal this is about normal is anything lower than that would probably come about with weakness in the economy and if the economy was to show more signs of inflation or strength you could probably see us push back into the five handle again we've got to talk about what this means for the bond market more broadly as well you've got a piece in the Ft out this morning the headline is the total return strategy in bonds is far from dead what prompted this particular one uh Bill gross wrote a piece last week and he said that total return strategy is dead and I um took issue with it to say that a certain style of Total return strategy is dead just explain that yeah so in in the bond market Bill gross Pimco they really developed the idea of Total return you buy bonds to get a a coupon a yield and then you also have price appreciation the two of them is Total return for the last 40 years the total return strategy has been driven by lower interest rates and ever higher prices well that era probably ended in 2020 but that doesn't mean that bonds as an investable class or a total return is done there's a big yield in the the bond market now a 5% yield you could start off every year saying I can get a 5% yield and if you manage around that properly you could maybe do a little bit better than that or a little bit worse if you don't but I think there is strategies in the bond market that can still be very profitable Jim it's not even total return that folks have declared are over there are a lot of strategies out there that if you're right if interest rates are settling at a higher level perhaps seem like they don't work m&a is a great example of private Equity just waiting in the wings for their to be cuts for rates to go back below to where they are so what doesn't work total return Works what doesn't well I think any strategy that was Reliant upon lower interest rates you're right a lot of the levered uh m&a strategies that were really the foundation of those strategies was near zero interest rates those are going to be very difficult you're going to have to look at your interest cost relative to the business you're buying and the cash flows that it throws off and that's going to make the hurdle rates for a lot of these purchases or a lot of these Acquisitions a lot more difficult uh we're not I don't think we're going to be going back to those microscopically low rates that we saw from 2008 to 2020 that was a unique era that even got us to negative interest rates in Europe and Japan that probably isn't going to be repeated anytime soon what happens to the deals that have already been done that have had a lot of Leverage on them that refinance when rates are low what happens to them if rates don't go back down they struggle they struggle because the companies won't be able to throw off enough of a cash flow to actually meet those debt service costs and it's going to be a difficult period for them Jim let's build on that what's the timeline for you around that the phrase we hear a lot on this program is survive until 25 when do you start to see that pressure start to build I think it probably starts to build sooner rather than later I think when you look at the economy I like to say that every time there is a financial crisis or recession and we had both in 2020 the economy changes and this one did change now change does not me worse change means different and the biggest thing that came out of this is you've seen lower you've seen lower personal savings rates you've seen higher levels of spending it seems like people for lack of a better term they got PTSD after the lockdown and then we had Revenge travel and that never stopped still yeah we still have it we still have people spending we have the government spending 6% deficit to GDP and that's going to continue to push this economy forward and it's going to continue to keep it running hot now that's good that's going to keep the unemployment rate which has been below 4 % for 27 months probably down at those levels but the price of that is going to be elevated inflation the credit stress though that you mentioned can we just sit on that for a while longer just a couple of Beats how ring fenced is that going to be and let's go back 12 months to last spring get some Regional Banks starting to fail people are thinking it's the end of a psycho hard Landing it was dealt with we've moved on from that how ring Fen are these pockets of credit stress going to be I you know I think that they are going to be in the regional Banks is a good example of that they really struggled in the face of a higher interest rates with the case of Silicon Valley but then also the realization that came in last year that office real estate is not going to bounce back as much as everybody thought and that's why the regional Banks and um a lot of the smaller Banks got hit and it was R ring fence to the extent that if you look at their stock prices and if you look at the stress that that sector went under it never really translated to like the general economy or GDP or retail sales or anything so you've seen the Pockets keep coming through as we've tried to adjust to this world of higher interest rates so so to be clear you don't see any of those Pockets necessarily filtering through to the broader economy if there is that stress no I don't at this point um there's an economist Rudy dornbush who used to work with a lot with the fed and he had a famous line that expansions don't die of old age they're usually murdered and we don't have now the murder weapon historically has been a spike in oil prices geopolitical events or suffocating interest rates and I don't think 5% is anywhere near suffocating interest rates we don't have that and short of that I think that the general economy will continue to do okay if not better than okay uh now I'm always on the lookout like everybody else is about that murder weapon that could come I thought maybe a year ago it might have been the banks but it turned out not to be the banks well you mentioned you have the two Big Spenders still out there you have the government and you have everyday consumers the government doesn't seem like it's going to stop regardless of who's in the white house when it comes the consumer you mentioned that that low savings rate something around 3% they're still spending is this the forever now is that PTSD just enduring from time on out here this cycle that that the the spending I I hear a lot of people talk about that the consumer is going to slow well they'll EB and flow but what the consumer will do is they will keep spending this cycle what I mean by this cycle we get that murder we have a recession then attitudes change again um maybe they change that the um savings rate goes to zero maybe they changes the savings rate goes 5% but for this whole cycle I think that that's not going to change at Leisa is not here in this conversation's getting dark very quickly let's just talk a little bit more about benchmarking to extremes you almost corrected yourself when you talked about inflation you said it's not Zimbabwe right and when the word stagflation comes up people often come out and say well it's not the 1970s and we heard that from chairman pal last Wednesday do you think stagflation is as much a laughing matter as maybe as it was to the chairman last week well you're right about you know benchmarking yourself because a lot of these terms when you talk about inflation or stagflation everybody goes to the extreme if you say that there's going to be inflation you they think hyperinflation or something and they're they're not ready to think about the idea of it being you know somewhat elevated as far as stagflation goes yeah if the definition of stagflation is elevated inflation in an era of slower growth yeah that's very possible but if you if you want a definition of stagflation of you know 56 7% inflation with Contracting growth that's an extreme definition that I don't think we need to go to just yet it's the weaker growth I want to get my hands around Danny's done great at this over the last couple of days just going through some of the consumer facing companies that are facing difficulties others that aren't at all then we get the economic data over the last week and it's actually pretty easy to construct maybe a decent story of how bad things are right now even though you might make the argument they're not at all this came from Andrew hos I shared this quote a little bit earlier on the program I think it's worth going over again companies cons serving on labor costs by slowing hiring The Cutting working hours small business hiring intentions have dropped multi-year lows individuals are becoming more concerned about finding a new job and are quitting at lower rates have you got a Counterpoint to any of that no all of that's true the only Counterpoint I would give let me take the last one that they're quitting at uh lower rates it's still the quit rate is higher than anything we saw before 2020 and a lot of these numbers that we're looking at were saying yeah they have slowed from that RedHot Pace that we had in the middle of 20 when we were pred almost 5% GDP but if you compared it to say a pre-2020 era these numbers are complet are I want to say completely different but they're in a different level than we've saw before this econom is at a different PL pace so yeah the the economy is ebbing but I I don't you know and it was flowing big last year but I don't necessarily think that this e is going to lead to anything more than just a downturn within an economy that continues to grow at least a trend okay well let's put a bow on it and get get the policy call so torsson SLO Apollo no Cuts this year so Jen no Cuts this year lining faga of Steve for on with us just about 10 minutes ago saying basically no Cuts this year where are you I'm at the same point and you basically no Cuts I I'll give you two reasons for it one I do believe the FED is political I do believe that they've noticed the schedule that June July and September is the middle of a presidential election they'll move if the data warrants it meaning that there needs to be a shock in much weaker data uh and otherwise we're looking at November or December and only if the data does weaken enough because Paul said I need confidence and I don't have it well we're waiting for that data to show up you've got to drop that in and not move on we're going to sit on this for a while longer they are political politically biased or politically sensitive there is a difference right um um colam The Economist gave me a great term she she said that they're not partisan but they are po IAL partisan they don't sit around the fomc table figuring out which candidate they want elected they do not do that do not consider that political they've noticed the calendar they've noticed the the winds in Washington they've noticed where their reputation is and so that's what I mean by political they've noticed that the July 31st meeting is right in the middle of the Republican and Democrat convention to give you one example that's what I mean by political got it Jim you're going to stick with us through the next 45 minutes or so Jim biano there of biano research Equity Futures right now on the S&P positive 13 of 1% let's get you an update on stories elsewhere this morning here your Bloomberg brief with shenali bassek hey shenali hey John Sony plans to sell off the historic Paramount Pictures lot in Hollywood if it purchases the company and that's according to people familiar with the matter Sony which already owns a large film and TV production facility is said to only be interested in Paramount for its IPS like the godfa trilogy and the Top Gun films in a report from The New York Times Sony also plans to sell Paramount's TV stations and streaming service and there's a new investigation into the door panel blowout on a Boeing 737 max9 plane in early January the SEC is scrutinizing the statements made by the company about its safety practices be fire and after the incident on the Alaska Airlines flight the investigation is focused on whether comments by the company or its Executives misled investors in violation of the Wall Street regulator's rules according to three people with knowledge of the probe the reviews don't always lead to enforcement actions but they can lead to fines for companies or officials and persing square founder bill akman was criticized for his attacks on diversity and inclusion policies in a closed door panel discussion at the milen conference in Los Angeles Amman has previously labeled Dei initiatives as inherently racist and illegal at least one speaker said his comments reflected a poor understanding of the civil rights movement in a statement issued afterwards Amman said he has written thousands of words about his Nuance views on this important topic and he asked people to read them fully to understand his perspective and that's your Bloomberg brief John shenali thank you more from Chenal in about 30 minutes time up next on the program is bad news still good news as we sit here right now some of the good bad news is good news at some point in time that bad news turns to bad news so I think the FED will come out cut rates and make sure we do again elongate this recovery we'll continue that conversation in just a moment Equity Futures positive here by a 13 of 1% on the S&P 500 live from New York this morning good [Music] morning live from New York City Welcome to the program anarie down in Washington we'll catch up with amh in just a moment brammo taking a long weekend Danny Burger alongside me this morning for the next couple of hours Equity Futures on the S&P 500 positive by third of 1% yield Tire by let's call it a single basis point for 4 4610 as yields Retreat for a second consecutive week they climbed just a little bit on the session under sanus this morning is bad news still good news as we had that pullback over the last you know couple of weeks that was a time to you know maybe put a little bit more money to work into the equity Market but I think going forward the risk are more balanced as you mentioned uh as we sit here right now some of the good bad news is good news at some point in time that bad news turns to bad news so I think the FED will come out cut rates and make make sure we do again elongate this recovery so here's the latest this morning the S&P 500 climbing to its highest level since early April as economic data supports the case for rate Cuts Anastasia amaroso of I Capital writing this we find more positives than negatives for the environment right now so we would be adding to equity's exposure if underwe relative to strategic allocations Anastasia joins us now for more Anastasia can we start by talking about the setup going into next week with some big data points on Deck including CPI and retail sales can you walk us through that sure well good morning John and first of all I want to comment on this bad news conversation uh going into next week I don't actually think we have much in terms of bad news you know we had slightly weaker GDP report but if you look underneath the hood we actually have a very strong core demand in the economy when you look at the real-time consumer data it's actually improving from earlier in the year and then if you look at the manufacturing surveys maybe they disappoint a little bit on a one- Monon bases but I still look at the inventory levels and I think they're low enough to start to jump start a restocking cycle so I think the setup going into next week the CPI report next week and then Nvidia the week after I think the setup is fairly strong from the growth perspective and you know in terms of inflation um you know if we were waiting for the last mile of inflation guess what it's here it's upon us we've managed to go from 5.8% CPI a year ago to now hopefully 3.8% or below this year so that's almost 2 percentage points of improvement and you know if you look at the core PC metric it's 2.8% so that's a two handle so I think we are in that last Mile and that's actually positive development Anastasia you sound like someone who would be very comfortable being a bull in this Equity market right now we're past 5200 can you keep buying yes uh I can and obviously the risk reward was better when we were closer to 5,000 uh and that's why we were saying that we should be adding to allocations if you're underweight relative to strategic ones but still if I look ahead and if I look at the current multiple which I think can be sustained as long as this economic environment is sustained and if I apply that to $278 in S&P 500 earnings for next year that gets me to an imply price target of 5,400 on the S&P I think that's the base case scenario and so I do think stocks are worth uh being in and worth staying for and you know maybe the upside of 54 00 is not all that great but that's for the S&P and I think you can find pockets of opportunity within the market that should be able to outperform Anastasia it's Jim biano I want to ask you about the bond market we started the year at the 10year yield at around 3.9% we got as high as 4.7% a couple of weeks ago we're around four and a half now is that uptrend going to continue do you think or do you think we've kind of finding a high yield for the year yeah I think thanks for the question Jim and I think for now we have sufficiently priced in the new reality which is growth that is remaining uh pretty robust which is inflation expectations that have picked up and of course the Central Bank policy which apparently may not have much in terms of rate Cuts this year so I think Jim dap moved to 4.7 that sufficiently reflected that and when we look at the implied fair value on a 10year based on some of the some of the models out there relative to where the 10e is today it is trading above some of those fair value models so I do actually think that that that's what gives me more optimism on the equity Market is if the 10e can pause around these current levels then that's less uh drag on valuations for equities do you think that the um fed is going to move this year and would that change your outlook a lot if they were to move Look I do think the FED will likely move once maybe twice this year and obviously that has to be later in the year um look the FED I think realizes that they solve what they could solve which is slowing down demand in the interest rate sensitive parts of the economy what the FED cannot solve is the supply of labor and the supply of Housing and when you look at inflation today what's really making it sticky it's the fact that wages are still rising and the fact that there's a shortage of workers and I'm in Miami uh this week and apparently the unemployment rate in Miami is 1.9% W so talk about a lot of demand and lack of lack of Labor the FED can't really solve that you know the FED can't also solve the shortage of Housing and the underbuilding that we've had in the economy of housing over the last 10 years they could slow to the demand and they have done that but they can quickly turn on the supply spet so I think having this realization is the reason why the FED will likely cut interest rates because they've done a lot and certain parts of the economy certain pockets are certainly feeling the strain which is commercial real estate especially in office uh and of course that's relates to the regional Banks as well so I do think you know if inflation continues to be somewhere in the two to 3% range uh as we move through the year they should cut rates Anastasia you've been constructive for a while you've had a buas to buy I remember you called the pull back in April a better entry point clearly based on the last few weeks you've been right could you tell us how independent your Market call is from your fed call it's fairly independent Jonathan uh when we wrote the outlook for this year we did expect uh rate Cuts uh but at the same time we said what if the FED doesn't cut interest rates and the conclusion was it is still in equity Market that's worth staying in and worth being in and the reason we said that was because of the growth resilience that we were expecting you know there's this notion of the US exceptionalism of the US economic exceptionalism and it is so true because this economy is not all that interest rate sensitive and in fact when you look at the consumer uh what we pay in terms of mortgage has not actually reset higher because only 5% of mortgages are floating rate and yet the amount of income that we earn by parking the cash that we had in a money market account is quite significant it's a significant pickup so this is why you know we've thought that the consumer can handle 5% interest rates as they have uh supporting the economy and that's why even if the FED doesn't cut rates the economic backdrop should support equity valuations and Equity uh earnings of course and so far it has Anastasia been great it's good to catch up Anastasia amaroso there of I capital on the backdrop for the Federal Reserve and this Market as well it's been a confusing one for a lot of people Jim help us explain it how we've gone from pricing in seven cuts to one and this Equity Market has been okay I think when we were at seven cuts in January we were under the impression that we were solidly going to a soft Landing with some wh whispers about a recession and that we were solidly on our way on that last mile to 2% then over the past four months the data has really surprised to the upside and it kind of dashed at least initially the recession call then it dashed the soft Landing call and as far as the last mile for inflation it's been pushed out and I think that that's what happened there was an expectation like I said we were going to see if you go back to the Bloomberg consensus data we were going to see something like a 1% GDP growth year and now we're at two and a half and that's a big difference massive difference Jim biano is going to be sticking with us up next on the program Israel's Benjamin Netanyahu striking a defiant tone following President Biden's pause on weapons shipments we'll get the latest from former senior us intelligence official Norman R sitting down with amarie down in Washington DC if you are just joining us equities are positive by third of 1% we are up on the morning we are up on the week heading towards three weeks of gains on the S&P 500 yields are a little bit high this morning by let's call it almost the basis point on a 10e at 446 and in the FX Market of Euro doing not much at all 10777 to round it out and crude for you approaching 80 all over again 7987 on WTI and positive 0.8% welcome to the program stocks doing okay up a third of 1% on the S&P 500 in the green across the screen on the NASDAQ as well up by 0.4 under russle up by 4% too on the S&P as you might have heard repeatedly through this program so far headed towards three weeks of gains on the S&P longest weekly winning streak going back to February switch up the board and get to the bond market two weeks of falling guils on a 10-year down again this week up on a session just a little bit by a single basis point 44610 and the 2-year poised to close basically where it closed last Friday anchored at the front end without much economic data through this week with the exception of that higher than expected jobless claims print just yesterday morning at 8:30 eastern time let's finish on Foreign Exchange and the challenge posed in the FX Market to Japanese authorities from the Japanese y 15572 positive by .1% Danny Berger all over the place over the last two weeks I I just think it's so remarkable to First you have theof coming out and saying hey we're going to intervene in this thing they do intervene they say it again we're willing to intervene and then you have U saying that okay perhaps it changes monetary policy and we are at 155 John that's the key Point does it change monetary policy and do you actually have to hike to actually get the market to believe it because right now I think they just think he's paying lip surface to what's happening will he actually consider moving interest rates higher well look I mean the boj is literally part of the government they are part of the government he's had conversations with kashida you know we talk about oh is is the Fed political I mean the boj has to be political cuz they are part of a political arm so in some ways yes they could easily hike under the influence of the government 15572 on doen under svanis this morning a slew of fed speak on Deck we'll hear from bman Logan kashgari gby and others over the next few days Traders looking for hints on the fed's path forward ahead of the next week CPI PR together with retail sales PPI and jobless claims we've got jimano with us for the next 30 minutes or so what hasn't been said that can be said a little bit later from beneficials nothing I think the problem that they're facing right now is the June 12th meeting the probabilities are like 8% the fed's going to move the July 31st meeting the problems 30% the fed's going to move so the market thinks we're on hold there's nothing they can say we'll have to wait for data to see if it surprises in either direction that would get them to move off of their current stance you've now did in either direction this is what interests me what little data it would take to reintroduce a summer rate cut conversation how much more data would it take to reintroduce a conversation about the prospect of hikes after pal tried to bury them last Wednesday in the news conference yeah I mean we went on last Wednesday we went from asking him if he's going to hike rates on Wednesday to Friday maybe a summer cut because we had a Miss in payrolls uh but yeah you know uh CPI next week if it was to miss or to beat it could really change the narrative over the next couple of weeks but um right now we're just kind of in that weight mode so when fed officials come out right now the next meeting June 12th is kind of baked in the cake so we all know that there will be a lot more data before the meeting after that CPI next week together with retail sales you hear from some retailers as well Walmart and Home Depot just around a corner tsmc they posted a 60% jump in April sales on the back of seemingly never ending demand for AI semiconductors and a rebound in the global smartphone industry too it follows a 34% sales increase in March happen to stock saw to an all-time high just last month Danny this sets us up I think for NVIDIA May 22nd the last big one to report remember arm the other day when everyone was like oh they yeah but they were like oh arm is giving a worse forecast surely that means at some point the AI demand is going to pet her out obviously not I think it was Morgan Stanley they had something like 300 billion was going to be the capex for AI spend by 2030 as we were talking about yesterday the runway for NVIDIA it literally looks infinite at this point you mentioned Peter chair of Academy Securities Peter chair this over the weekend coming into this week talked about how 10% was new 1% for Tech names after earnings what' you make of the outsides moves we've seen as their single name level over the last few weeks oh it's been extraordinary especially because what you've seen from a market perspective is they report after the close and then you get most of the move after the close my mother was asking me about that maybe I should have you explain how does something move after it closes you know but that's what's going to happen with Nvidia we're going to wait all day and Traders can start their day at 4 p.m. you know Eastern at that point it's kind of bizarre isn't it it's all we're going to be doing on 22nd everyone's going to start work at 4 p.m. eastern time in the afternoon let's turn to our next stocks on the S&P 500 positive here by a third of 1% we are about 100 minutes away from the open and B we're counting you down here on blimber surveillance you to hire by single basis point 446 49 on a us 10e under surveillance this morning President Biden cracking down on Chinese EVS the Chinese double down on their um what we call non-market practices it's a kind of predatory pricing practice uh worldwide that has driven out producers in other economies leaving the Chinese economy having cornered the market in production um right now uh we're still 85% uh relyant on Chinese production and Supply in solar panels we've also seen it in um uh batteries we're seeing it now in EVS so here's the latest President Biden said to unveil new tariffs on China next week targeting key strategic sectors including EVS batteries and solar panels the reporter behind the story Josh wingrove joined us now for more Josh fantastic story sir enjoyed the read first thing this morning what are you in the team learning about what we might hear next week well right now we're just trying to figure out the scope of this you know this has been going on for some time as you know since 2022 they've been doing this review and the question has kind of been you know how high will they ratchet it up will they offset it with declines in other sort of less critical sectors to try to make it a wash it doesn't look like that's going to be the case and so what they're reporting here is that certain key sectors will see tariffs rise either from existing levels uh uh or you know uh from from the floor from zero uh depending on what they are those include electric vehicles solar cells batteries but potentially other things we don't know the full list we also don't know the levels that they're going to uh on the flip side the other existing tariffs outside of those key sectors are expected to be pretty much more or less maintained in other words no across theboard offsetting decline of some of those originally Trump tariffs and so Biden is looking to sort of go tougher on China here while also stopping short of what Trump wants which is sort of new across the board tariff 60% on all Chinese Goods Democrats think that would Stoke inflation and pricing they're going to steer clear of that it seems instead looking at these key sectors of course Autos also has a pretty strong election overlay as you know and Biden is trying to win an election that runs through Michigan and a handful of other states so it's hard to ignore the 2024 angle here as well well let's get into the angle just a little bit more if we can Josh can you just explain to me as far as we're aware Chinese EVS don't exactly have a big Market in America right now so what are they addressing I think a wave could be tumming if they don't do anything and it's the same thing on steel and aluminum Biden has sort of teased this announcement in Pittsburgh a few weeks ago with an a call to raise tariffs on steel and aluminum uh in some cases from 0 to 25% it's a fairly big jump and you know it's really tiny volumes that we see from China coming into the US from both those Metals uh but they were expected to rise they're worried about dumping the US has expressed concern that China will try to export or dump its way out of sluggish growth and some of the woes it's experiencing right now and it's the same thing with EVS there are broader concerns with EVs and connected Vehicles as well around data security and what information uh the US is comfortable handing Chinese companies you're seeing debates about this in all sorts of sectors related to China of course Tik Tok being top of Mind as one of them so really on both steel aluminum and EVS this is a case of you know heading off what the US expects could be a seismic shift as opposed to addressing a big part of the market today well Josh Josh when it comes to EV is specifically the irony isn't lost on most people that both Europe and China have lobbied similar accusations against the US China even filed something to the WTO basically saying that the subsidies that you require for your EVS are discriminator so knowing China's stance already on that how are they likely to respond that's the uh multi-billion dollar question I suppose right now some of the analysts overnight from our colleagues in Asia are saying that they aren't sure necessarily that there'll be a response immediately that China wouldn't want to trigger sort of a full tit fortat trade War at least during an election year it does seem like some kind of response would be necessary we've seen the Chinese government uh you know criticizing the American for taking this reported step I'm sure of course they're waiting to see the fine print as we all are so right now I think this is the the question is how far this will go remember Trump of course had a bit of a back and forth tariffs on American agriculture exports that hit sort of his political base so the potential to get back to that kind of environment of course hangs in the air is just right not right now not clear what will happen and if it did happen what goods would be targeted would they try to Target Biden's sort of political backyard or would they target trumps or would they target both it's really unclear hey Josh great reporting sir as always blomberg's Josh wiro there on the latest from the team Josh Jennifer Jacobs Eric Martin the president and the administration poised to unveil a sweeping decision on Chinese tariffs as soon as next week Jim biano is with us around the table of biano research Jim just some final thoughts the election is it still too early to think about some of these themes yeah I think it is a little bit too early because we still don't really know we're still so wrapped up in personalities right now with these elections and all of these other issues and brain worms and everything else and we're not really ready to talk about executing dos yeah exactly when are we going to get to talking about policy and when are we going to get to talking about contrasting what what my Administration means as versus their Administration so all we're left with is kind of these generic well Republicans do this and Democrats do that and that I always feel like is always kind of in the market anyway so David C of Goldman would make the argument not necessarily trade on policy but trade on just volatility around the election should we get a result where Trump for example doesn't accept the results again and there you get volatility and you should be prepared for that should we be prepared for that I think so but that's probably an October or November story you know actually you know it could actually be November to December story more than anything else but I don't think you're going to see that kind of volatility come into you know till at least the conventions at the earliest and many elections it used to be a difference in degree and not kind it just feel feel was like there's massive differences now between administrations from one to another does it make it difficult to look ahead to 25 this is a conversation we started having on this program in the last week how do you construct a view on 2025 in the American economy and in American markets without a decent understanding of what policy is going to look like from the White House and it's impossible to understand because you know certain things get said all the time for instance a couple of weeks ago the Biden Administration talked about a 44% capital gains tax and everybody got all tizzy always but we forgot he none of that happens until Congress passes a law and the president signs it he's not a monarch and so we hear these kind of things and then we got to remember it's not just the president it's also Congress and what they're willing to want to do as well and they've already tried to do that and I think it was Cinema out of Arizona that prevented that from happening already under a bidon Administration yeah and and it just shows you how difficult it is to get any of these proposals through like Trump wanting to put himself on the Federal Reserve board what did you make of that story can we finish there I've heard from so many different people who have all said the same thing about that journal story they have yet to hear anyone from Camp Trump say it on the record what' you make of that story you know I I I understand his his feeling he's already publicly said he would fire uh Paul if he became the president and he's already got that committee headed by Arthur laugher that is looking at potentially who would be the next Federal Reserve chairman and Arthur laugher decided it's probably Arthur laugh exactly so I I know that the expectation is is that there will be big changes at the Federal Reserve should uh Trump come back uh but as far as again as far as him putting himself on the Federal Reserve board you got to rewrite that Cong you got to rewrite the Federal Reserve Act to do it you just don't get to just you know say I'm on the board now hey Jim you'd be great on the board if we could make it happen Jim biano Bano research thank you Jim appreciate it coming up in the next hour of blomberg surveillance taking you towards the weekend with Dan Suzuki of Richard birstein we'll catch up with Oliver Chen of TD cow and looking ahead to some of the big retailers next week we'll hear from Walmart we're here from the likes of Home Depot and we'll talk a little luxury with him as well Neil data on the latest economic data in America rmax very best on CPI and retail sales next week and M deep sing on some of the earnings from Big Tech Equity Futures on the S&P 500 positive here by onethird of 1% [Music]

Channel: Bianco Research

Views: 8,263

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Id: nsu26wv6fOs

Length: 37min 5sec (2225 seconds)

Published: Fri May 10 2024