Latest / Bloomberg Intelligence / Apple Will Add 20,000 US Jobs Amid Threat from Trump Tariffs

Transcript

Apple Will Add 20,000 US Jobs Amid Threat from Trump Tariffs · Bloomberg Intelligence

• 0:02
  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
• 0:10
  Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
• 0:14
  Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg
• 0:17
  Speaker 1: Business App. Listen on demand wherever you get your podcasts,
• 0:21
  Speaker 1: or watch us live on YouTube.
• 0:23
  Speaker 2: Here's a really special treat. Sitting next to me in
• 0:26
  Speaker 2: studio in New York, Mark German, Bloomberg Chief correspondent on
• 0:30
  Speaker 2: Global Technology. I worked here for thirteen years, and I
• 0:33
  Speaker 2: don't think I've ever seen you in person. You're usually
• 0:36
  Speaker 2: on the West Coast, but like you're real.
• 0:38
  Speaker 3: He's forty here last week as well, So I don't
• 0:40
  Speaker 3: know what's happening.
• 0:42
  Speaker 4: My goodness, I was off last week.
• 0:44
  Speaker 2: Okay, So obviously we're talking about this news that Apple
• 0:46
  Speaker 2: is going to add about twenty thousand US jobs. To
• 0:49
  Speaker 2: your understanding, how did this come about from Apple?
• 0:53
  Speaker 5: Okay, So during the first Trump administration, Tim Cook other companies,
• 1:00
  Speaker 5: we're obviously very worried about tariffs, right, and so their
• 1:02
  Speaker 5: strategy was we can try to make a deal here.
• 1:05
  Speaker 5: What does Trump want? Trump wants his supporters to know
• 1:10
  Speaker 5: or see that he's bringing jobs back to the US,
• 1:14
  Speaker 5: bringing money back to the US, bringing manufacturing back to
• 1:17
  Speaker 5: the US. Apple doesn't want tariffs on the phone, and
• 1:21
  Speaker 5: it wants to keep as much phone manufacturing in China
• 1:23
  Speaker 5: as possible. We don't have to get into the reasons
• 1:26
  Speaker 5: why there's a ton of them. Okay, So you have
• 1:29
  Speaker 5: these two sides, right, there is a universe in which
• 1:32
  Speaker 5: both parties can get exactly what they want.
• 1:34
  Speaker 6: It's like a trade.
• 1:35
  Speaker 5: Right, And so you saw that strategy in full form
• 1:41
  Speaker 5: this morning. Trump for months, obviously the Secondministration, has been
• 1:46
  Speaker 5: talking again about bringing back jobs, has been talking again
• 1:50
  Speaker 5: about moving things to the US, has been talking again
• 1:53
  Speaker 5: about extra tariffs some goods from China. So Apple comes
• 1:57
  Speaker 5: out with the press release this morning. We're investing five
• 2:00
  Speaker 5: hundred billion dollars in the US over the next four years, which,
• 2:03
  Speaker 5: by the way, that's Trump's term, right, he just started. Okay,
• 2:08
  Speaker 5: twenty thousand new jobs AI server manufacturing, Fox con in Houston,
• 2:14
  Speaker 5: doubling our manufacturing fund from five billion to ten billion,
• 2:18
  Speaker 5: setting up a manufacturing academy like a school in Detroit.
• 2:22
  Speaker 5: So you ask yourself, what's really going on here. They
• 2:25
  Speaker 5: want Trump to know that they're investing heavily in the US.
• 2:30
  Speaker 5: And since we're doing that. We don't want tariffs, and
• 2:32
  Speaker 5: so the spin to Trump is that we're doing this
• 2:35
  Speaker 5: because of you. The reality is somewhere in the middle.
• 2:39
  Speaker 5: The reality is that Apple has been investing as part
• 2:42
  Speaker 5: of its business operations in the US from the very beginning.
• 2:45
  Speaker 5: The reality is in twenty twenty one, Apple announced the
• 2:49
  Speaker 5: four hundred and thirty billion dollar investment in the US.
• 2:53
  Speaker 5: The reality is that Apple hires four thousand R and
• 2:56
  Speaker 5: D employees a year in the US. Anyways, what's actually
• 3:00
  Speaker 5: new here? To be fair to both Trump and Apple,
• 3:04
  Speaker 5: there is a bit of an acceleration. So their typical
• 3:07
  Speaker 5: spend on the twenty twenty one US investment plan eighty
• 3:12
  Speaker 5: six billion dollars annually. Okay, the new plan one hundred
• 3:18
  Speaker 5: and twenty five billion dollars a year annually. So you're
• 3:21
  Speaker 5: getting a forty billion dollar Trump under Trump, and you're
• 3:26
  Speaker 5: moving from four thousand people on the R and D
• 3:29
  Speaker 5: side hired annually to five thousand people. So incremental, sure,
• 3:34
  Speaker 5: but definitely an acceleration.
• 3:37
  Speaker 3: Okay, one minute, is there a quid pro quote here?
• 3:40
  Speaker 3: Do you think Apple actually already has a deal with
• 3:43
  Speaker 3: President Trump that they will be exempt from tariffs?
• 3:45
  Speaker 4: No, okay, But.
• 3:46
  Speaker 5: Tim Cook went to Donald Trump's office last week and
• 3:50
  Speaker 5: presented this to him, said, we're going to do this
• 3:53
  Speaker 5: because of you, man. Oh and by the way, we
• 3:56
  Speaker 5: don't want to pay tariffs. And Trump knows that Trump
• 4:00
  Speaker 5: doesn't care about giving Apple or a Prieve on teriff.
• 4:06
  Speaker 5: He's happy to do it. And he's happy to do
• 4:08
  Speaker 5: it and tell people that he did it. Because Tim
• 4:10
  Speaker 5: Cook is investing half a trillion dollars during his presidency.
• 4:14
  Speaker 5: He can go back to his supporters, his base, he
• 4:16
  Speaker 5: can go back to Congress, he can go back to
• 4:18
  Speaker 5: the world and tell them that the world's biggest technology company,
• 4:21
  Speaker 5: the most famous company in the world, is investing half
• 4:23
  Speaker 5: a trillion dollars. It's biggest investment commitment ever, right because
• 4:27
  Speaker 5: of me and for Trump, that's awesome. Yep. And for
• 4:31
  Speaker 5: Tim Cook, not having to pay tariffs is awesome. And
• 4:34
  Speaker 5: I think that's good enough to get some sort of
• 4:36
  Speaker 5: tariff for prieve. And by the way, let's say Trump
• 4:39
  Speaker 5: doesn't give them a tiff for prieve. Who cares? Right,
• 4:43
  Speaker 5: I was doing this anyways, if I'm Tim.
• 4:44
  Speaker 1: Cook, you're listening to the Bloomberg Intelligence podcast. Catch us
• 4:50
  Speaker 1: live weekdays at ten Am Eastern on Apple Cocklay and
• 4:53
  Speaker 1: Android Auto with the Bloomberg Business App. Listen on demand
• 4:56
  Speaker 1: wherever you get your podcasts, or watch us live on YouTube.
• 5:00
  Speaker 2: Alex Steel here alongside Paul Sweeney. This is Bloomberg Intelligence
• 5:03
  Speaker 2: Radio Happening right now in Hollywood, Florida. Is the BEMO
• 5:07
  Speaker 2: Metals Conference and Metals and Mining Conference. I used to
• 5:09
  Speaker 2: go back in my day when I was covering gold.
• 5:11
  Speaker 2: It's really cool you get to talk about metals, and
• 5:13
  Speaker 2: we're lucky enough to talk now to Kathleen Quirk, President
• 5:16
  Speaker 2: and CEO of Freeport Macmaar and Copper and Gold. Kathleen,
• 5:20
  Speaker 2: it's a sincere pleasure. If I take a look at
• 5:22
  Speaker 2: your stock versus the copper price, you usually track each
• 5:25
  Speaker 2: other in the last couple of months. That hasn't been
• 5:27
  Speaker 2: the case. Is that a demand issue? Is that a
• 5:30
  Speaker 2: supply issue? How do you explain that.
• 5:34
  Speaker 7: Alex is good to be with you and you need
• 5:36
  Speaker 7: to come back to Hollywood.
• 5:37
  Speaker 8: This is a great conference.
• 5:39
  Speaker 7: In terms of the stock price and the copper price,
• 5:43
  Speaker 7: we've seen somewhat of a disconnect in recent weeks. I
• 5:48
  Speaker 7: think there's some concern in the market about China and
• 5:51
  Speaker 7: about the trajectory of copper prices as we go forward.
• 5:55
  Speaker 7: So there's some risks that people are discounting the current
• 5:59
  Speaker 7: copper price, but as we look at the situation and
• 6:02
  Speaker 7: look at copper demand going forward, Copper, as you know,
• 6:07
  Speaker 7: is the metal when it comes to electrification, and we're
• 6:11
  Speaker 7: looking ahead at all of the build out that needs
• 6:15
  Speaker 7: to take place and energy infrastructure, not just in the
• 6:18
  Speaker 7: US but around the globe. China has already been doing it,
• 6:21
  Speaker 7: but we're starting to see it taking place in the
• 6:25
  Speaker 7: US and other places. It's very copper intensive, and we
• 6:29
  Speaker 7: see a situation where demand for copper is going to
• 6:33
  Speaker 7: be faced with a secular uplift of opportunity for growth
• 6:39
  Speaker 7: and copper unrelated to cyclical drivers. So we're actually we're
• 6:44
  Speaker 7: actually really bullish about where copper is today and what
• 6:48
  Speaker 7: the likelihood for increases are for the future.
• 6:50
  Speaker 3: Kathleen, I think so far every S and P five
• 6:54
  Speaker 3: hundred CEO on their conference call has been asked about
• 6:58
  Speaker 3: tariffs and the impact on their business. What will a
• 7:02
  Speaker 3: rising tariff regime potentially mean for your business.
• 7:07
  Speaker 7: We're following it very closely. We're looking at it trying
• 7:11
  Speaker 7: to understand exactly what degree of terraff will be imposed.
• 7:15
  Speaker 7: No one exactly knows what it will be, although companies
• 7:18
  Speaker 7: are preparing for it. Freeport operates all over the world,
• 7:24
  Speaker 7: but we have a significant operation, significant presence in the US,
• 7:29
  Speaker 7: and actually we're integrated in the US. We not only
• 7:32
  Speaker 7: have minds that produce copper, but we also have a
• 7:36
  Speaker 7: smelter that processes our copper. So we don't have a
• 7:41
  Speaker 7: need as a company to import copper from other countries.
• 7:46
  Speaker 7: Copper is imported into the US because there's not enough
• 7:50
  Speaker 7: current current supply of copper to meet the demand. But
• 7:55
  Speaker 7: from a micro standpoint, as we look at what the
• 7:58
  Speaker 7: market is pricing in for the impact of tariffs, actually
• 8:03
  Speaker 7: the US price of copper, when you look at where
• 8:06
  Speaker 7: US commodity prices are today and copper prices are today,
• 8:11
  Speaker 7: the US price is something on the order of twenty
• 8:14
  Speaker 7: five cents per pound higher than copper that's priced on
• 8:19
  Speaker 7: international markets. So actually, for Freeport, we're actually receiving for
• 8:25
  Speaker 7: the copper that we sell in the US, we're actually
• 8:29
  Speaker 7: receiving a premium to copper that we sell out of
• 8:32
  Speaker 7: say South America or out of Indonesia. So it's actually
• 8:36
  Speaker 7: right now in the short term a benefit for Freeport
• 8:40
  Speaker 7: several hundred million dollars a year potentially. But the thing
• 8:45
  Speaker 7: that we're watching, and the thing as we've talked to
• 8:47
  Speaker 7: investors and other business leaders, is the impact the potential
• 8:53
  Speaker 7: impact of tariffs on global growth. China is a big
• 8:58
  Speaker 7: consumer of copper consumes, likely above fifty percent five zero
• 9:03
  Speaker 7: percent of the market, and so an all our trade
• 9:07
  Speaker 7: war could impact global growth. It could impact copper prices,
• 9:15
  Speaker 7: it could impact you know, say manifest it self through
• 9:18
  Speaker 7: a strong dollar, which also impacts commodity prices.
• 9:23
  Speaker 8: So we're watching those macro issues.
• 9:26
  Speaker 7: But in terms of the on the ground today we
• 9:29
  Speaker 7: are getting a premium for the copper that we sell
• 9:32
  Speaker 7: in the US.
• 9:33
  Speaker 2: We have about thirty seconds and then you have to
• 9:35
  Speaker 2: run to an investor meeting. So in twenty seconds, what
• 9:38
  Speaker 2: do you think the copper price is going.
• 9:39
  Speaker 4: To do this year?
• 9:40
  Speaker 2: If we take a look at the lme are we
• 9:42
  Speaker 2: looking at ten twelve thousand?
• 9:46
  Speaker 8: You know, it's very difficult.
• 9:48
  Speaker 7: We're not in the business of predicting short term prices,
• 9:50
  Speaker 7: alex as.
• 9:52
  Speaker 8: You probably know.
• 9:52
  Speaker 7: We're in the business to control our costs, to invest
• 9:55
  Speaker 7: wisely and prudently. We have a very positive long term
• 9:59
  Speaker 7: outlook for comp upper. It just you can't replace copper
• 10:03
  Speaker 7: today for four hours a pound. We need higher prices
• 10:07
  Speaker 7: in the future in order to invest in the business
• 10:11
  Speaker 7: and generate the growth and demand, growth and supply to
• 10:14
  Speaker 7: meet the expected growth in demand. So we're very positive
• 10:18
  Speaker 7: on the long term, but the short term is difficult
• 10:21
  Speaker 7: to assess.
• 10:23
  Speaker 2: All right, Kathleen, we appreciate it. Please come back when
• 10:25
  Speaker 2: we all have more time. We'd love to break down
• 10:27
  Speaker 2: some more stuff with you. Kathleen Quirk as President and
• 10:29
  Speaker 2: CEO of Freeport Macarin, Copper and Gold.
• 10:34
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 10:37
  Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Otto
• 10:41
  Speaker 1: with the Bloomberg Business App. Listen on demand wherever you
• 10:44
  Speaker 1: get your podcasts, or watch us live on YouTube.
• 10:48
  Speaker 2: Alex deal here alongside Paul Sweeney. This is Bloomberg Intelligence Radio.
• 10:51
  Speaker 2: We bring you all the top news in business, economics
• 10:53
  Speaker 2: and finance through our lens of our Bloomberg Intelligence folks.
• 10:56
  Speaker 2: They cover two thousand companies and one hundred and thirty
• 10:58
  Speaker 2: industries world. We go now for a broader view. Victoria
• 11:02
  Speaker 2: Fernandez is chief market strategistic Crossroad to global investments, and
• 11:05
  Speaker 2: she joins us now from Houston, Victoria. By the dip
• 11:09
  Speaker 2: has been the norm, then there's been chattering that by
• 11:12
  Speaker 2: the dip won't last and that we're on borrowed time
• 11:14
  Speaker 2: for that. Where do you stand on that?
• 11:17
  Speaker 9: Yeah, I think it depends alex on the size of
• 11:19
  Speaker 9: the dip that we're looking at. When we have small
• 11:22
  Speaker 9: pullbacks that happen just in regular volatility due to the
• 11:26
  Speaker 9: uncertainty around whether it's going to be fed policy or
• 11:30
  Speaker 9: whether it's fiscal policy, and those are going to be
• 11:33
  Speaker 9: things where I'm not sure you want to jump in
• 11:35
  Speaker 9: and start buying a lot of names.
• 11:37
  Speaker 4: But I do think that as we.
• 11:39
  Speaker 9: Go through the first half of this year, we probably
• 11:41
  Speaker 9: will have a chance as there will be a more
• 11:44
  Speaker 9: significant pullback. I'm not saying we're going into recession by
• 11:47
  Speaker 9: any means, but I do think you're going to see
• 11:49
  Speaker 9: things start to pull back, probably led by maybe weaker earnings.
• 11:53
  Speaker 9: As we get the first quarter earnings of this year,
• 11:56
  Speaker 9: we see those slow down, We see the labor market.
• 11:58
  Speaker 4: Slow down, consumer spending slow down.
• 12:01
  Speaker 9: That I think then is going to be your opportunity
• 12:03
  Speaker 9: to go in and find those areas within the market
• 12:07
  Speaker 9: where you have seen sectors start to struggle and maybe
• 12:11
  Speaker 9: form a trough and on their way back to have
• 12:14
  Speaker 9: up upside trends. That's where you'll want to go in
• 12:17
  Speaker 9: and start buying.
• 12:18
  Speaker 3: So, Victoria, you mentioned earnings were about little more than
• 12:21
  Speaker 3: eighty percent of the way through the fourth quarter earnings there.
• 12:24
  Speaker 3: What are your takeaways from those earnings and maybe from
• 12:27
  Speaker 3: the guidance.
• 12:29
  Speaker 9: Yeah, so you know, Paul, surprisingly, earnings have been really
• 12:33
  Speaker 9: good for the fourth quarter. I mean we're looking at
• 12:35
  Speaker 9: what fifteen percent earnings growth, five percent revenue growth. I
• 12:40
  Speaker 9: think energy is really the only sector where we have
• 12:43
  Speaker 9: seen negative growth as as a whole for the.
• 12:48
  Speaker 4: Sector, So really strong there.
• 12:51
  Speaker 9: And I thought we would have start to seen some
• 12:53
  Speaker 9: of the effects of the higher rates that we had
• 12:56
  Speaker 9: throughout twenty twenty four. I thought we would see some
• 12:59
  Speaker 9: of the effects of the labor market weakenings start there.
• 13:02
  Speaker 9: But maybe it's getting pushed in to the first quarter
• 13:06
  Speaker 9: earnings as tariff concerns pulled forward a lot of elements
• 13:10
  Speaker 9: into the fourth quarter of twenty twenty four. So strong earnings,
• 13:14
  Speaker 9: and I think that's why you saw probably the S
• 13:17
  Speaker 9: and P hit a high last week because that animal
• 13:20
  Speaker 9: spirit is still running due to the earnings and that
• 13:25
  Speaker 9: support to the economy, but that's probably going to start
• 13:27
  Speaker 9: fading away. We saw it at the end of last week.
• 13:29
  Speaker 9: I think we'll see some more of that over the
• 13:32
  Speaker 9: coming weeks.
• 13:32
  Speaker 2: Yeah, and speaking of this is from Bloomberg Intelligence, just
• 13:35
  Speaker 2: talking about earnings. Apparently companies that guided high on profit
• 13:38
  Speaker 2: and sales have outperformed the S and P by six
• 13:41
  Speaker 2: point seven percent within a day of posting results, the
• 13:44
  Speaker 2: most since twenty twenty. I found that to be really interesting.
• 13:47
  Speaker 2: I had noticed the dispariting effect there, So victoria though
• 13:52
  Speaker 2: despite earnings, we have seen rotation into European equities. Do
• 13:55
  Speaker 2: we think that that actually continues or the US exceptionalism
• 13:58
  Speaker 2: theme rains.
• 14:01
  Speaker 4: Yeah, I'm not surprised that we've seen this switch.
• 14:03
  Speaker 9: I mean, I know all morning long, we've had the
• 14:06
  Speaker 9: conversation around valuation, right, and if it's still something that
• 14:09
  Speaker 9: people are looking at, clients aren't asking about it. You've
• 14:12
  Speaker 9: talked with Bob Dall, my CEO Mike Wilson earlier this
• 14:15
  Speaker 9: morning talking about that. But valuations in Europe are much
• 14:19
  Speaker 9: lower than what we're seeing in the markets here. So
• 14:21
  Speaker 9: I think as investors say, where can I get maybe
• 14:24
  Speaker 9: a bigger bang for my buck, and you're looking at
• 14:26
  Speaker 9: that valuation number makes sense, especially in the financials. Financials
• 14:30
  Speaker 9: are doing well globally, so it gives you an opportunity
• 14:34
  Speaker 9: to get in there. And you also have to start
• 14:36
  Speaker 9: thinking from an FX perspective what that's going.
• 14:40
  Speaker 4: To look like.
• 14:40
  Speaker 9: Are you going to see continued rate cuts from the
• 14:44
  Speaker 9: ECB and what does that mean for the euro and
• 14:47
  Speaker 9: what kind of carry trade we're looking there? Obviously the
• 14:50
  Speaker 9: yen carry trade people are starting to watch once again.
• 14:53
  Speaker 9: So I think there's a lot of different factors, but
• 14:55
  Speaker 9: it wouldn't hurt to kind of dip your toe a
• 14:57
  Speaker 9: little bit internationally though, I still think globally you'll see
• 15:03
  Speaker 9: the US over time.
• 15:05
  Speaker 4: Continue to be the strongest economy.
• 15:08
  Speaker 3: Yeah, I'm glad you you brought up international investing. Is
• 15:10
  Speaker 3: I'm just looking at an email I got from Torston
• 15:12
  Speaker 3: Slocket from Apollo this morning talking about the market capitalization
• 15:16
  Speaker 3: with how the gap between the US and the rest
• 15:20
  Speaker 3: of the developed world is widening, so that concentration in
• 15:24
  Speaker 3: the US equity markets rerolled through the rest of the
• 15:26
  Speaker 3: world is just getting more and more. To what extent
• 15:29
  Speaker 3: is that a concern.
• 15:31
  Speaker 9: Well, concentration is always a concern for US, Paul, because
• 15:35
  Speaker 9: you don't want to, you know, to use the old phrase,
• 15:37
  Speaker 9: you don't want to put all your eggs in one basket.
• 15:40
  Speaker 9: What we're starting to see in the US is some
• 15:42
  Speaker 9: of those elements where all that concentration was those Max
• 15:45
  Speaker 9: seven names. You're starting to see pullbacks in those names,
• 15:49
  Speaker 9: and hopefully we will see things broaden out.
• 15:52
  Speaker 4: But it really hasn't been as strong as a lot
• 15:54
  Speaker 4: of people thought it would be.
• 15:56
  Speaker 9: When you're looking at the other four hundred and ninety three,
• 15:59
  Speaker 9: I mean, you look the SMP making it's high last week,
• 16:02
  Speaker 9: but the advanced decline line for the New York Stock
• 16:04
  Speaker 9: Exchange did.
• 16:05
  Speaker 4: Not meet it and go to a highlight.
• 16:08
  Speaker 9: That we're still only seeing about fifty three percent of
• 16:11
  Speaker 9: the SMP above it's fifty day moving average, So we're
• 16:16
  Speaker 9: not seeing that broadening out that we like to see
• 16:19
  Speaker 9: for a sustainable move higher in the markets.
• 16:21
  Speaker 4: Will continue to watch that.
• 16:23
  Speaker 9: But we really want to see that concentration start to
• 16:26
  Speaker 9: diminish a little bit and have more of a widespread
• 16:30
  Speaker 9: uptrend in these names.
• 16:32
  Speaker 2: Does any of that include say, small and midcaps.
• 16:35
  Speaker 10: Well, we would hope so right small and midcaps is
• 16:38
  Speaker 10: really kind of what will tell us, Yes, we have
• 16:41
  Speaker 10: found our footing, we're feeling better, we like what's going on.
• 16:45
  Speaker 9: But look, we've seen yields move lower even though inflation
• 16:50
  Speaker 9: expectations have moved higher. So to me, that's saying, okay, wait,
• 16:54
  Speaker 9: these are growth concerns that we have right now. If
• 16:58
  Speaker 9: growth and the concern over a lack of growth is
• 17:02
  Speaker 9: what's pulling yields down, that's not going to be great
• 17:05
  Speaker 9: for small and midcaps. And we also have to look
• 17:08
  Speaker 9: at the fact that you know, we're hanging in around
• 17:10
  Speaker 9: that four forty four to fifty level on the US tenure.
• 17:13
  Speaker 9: We've got about a third of all corporate debt in
• 17:16
  Speaker 9: the US small, mid and large cap coming due over
• 17:18
  Speaker 9: the next five years. That's going to be a concern
• 17:21
  Speaker 9: for those small and midcaps when it comes to refinancing.
• 17:24
  Speaker 9: So we'll have to see what happens there. But for
• 17:26
  Speaker 9: right now, I think we continue to wait on some
• 17:29
  Speaker 9: of those small cap names until they get some better
• 17:32
  Speaker 9: footing and we see the economy on its way back up.
• 17:35
  Speaker 3: Victoria thirty seconds. What's the fixed income call here?
• 17:40
  Speaker 9: Well, look, we've been doing Barbell strategies in our fixed
• 17:43
  Speaker 9: income portfolio. Is really wanting to capture some of the
• 17:46
  Speaker 9: higher yields on the shorter end. As we think the
• 17:48
  Speaker 9: Fed stays higher longer, that keeps those short rates higher,
• 17:51
  Speaker 9: and we have seen inflation push the longer end up
• 17:54
  Speaker 9: as well, although over the last.
• 17:56
  Speaker 4: Couple weeks there's been a flattening.
• 17:58
  Speaker 9: So I think maybe lock in a little bit of
• 18:00
  Speaker 9: these rates on the longer end, take advantage of the
• 18:02
  Speaker 9: short end, and we'll let the belly of the curve
• 18:05
  Speaker 9: adjust to the volatility that we've seen.
• 18:07
  Speaker 3: Victoria, thank you so much for joining us. Always appreciate
• 18:09
  Speaker 3: getting a few minutes of your time. Victoria Frenendez, chief
• 18:13
  Speaker 3: market strategist for cross Mark, a global investment She's based
• 18:16
  Speaker 3: down there in Houston, Texas.
• 18:21
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 18:24
  Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto
• 18:28
  Speaker 1: with the Bloomberg Business app. Listen on demand wherever you
• 18:31
  Speaker 1: get your podcasts, or watch us live on YouTube.
• 18:35
  Speaker 3: Musk Federal work or Order divides Trump Administration. Elon Musk
• 18:38
  Speaker 3: demanded that over two million federal employees submit five bullet
• 18:41
  Speaker 3: points accounting for the past week, but he's getting some
• 18:44
  Speaker 3: pushback from some of the folks that lead these departments,
• 18:49
  Speaker 3: like the FBI, like the Secretary of Defense. Let's check
• 18:52
  Speaker 3: in with Max Chaffckin. He covers all this stuff. He
• 18:54
  Speaker 3: does all the Elon Musk stuff for Bloomberg News. Is
• 18:58
  Speaker 3: this kind of the first cracks I'm actually from Elon
• 19:02
  Speaker 3: Musk with his and his heavy handed dog, I'd.
• 19:04
  Speaker 6: Say it's the most significant cracks that we've seen. You know,
• 19:07
  Speaker 6: we've seen like little maybe micro fissures or something before.
• 19:11
  Speaker 6: But in terms of you have Musk over the weekend
• 19:15
  Speaker 6: for sending this email out or having this email sent
• 19:19
  Speaker 6: be sent out, and then tweeting essentially NonStop about how
• 19:22
  Speaker 6: important it is, how easy it is, how anyone who
• 19:24
  Speaker 6: doesn't respond, you know, doesn't deserve their job. Meanwhile, as
• 19:28
  Speaker 6: you said, important parts of the federal government either saying
• 19:31
  Speaker 6: publicly or semi publicly, like in an all staff memo,
• 19:35
  Speaker 6: that they should not respond to these emails. That is
• 19:38
  Speaker 6: significant and that I think you really see first of all,
• 19:43
  Speaker 6: the extent to which you know there are probably going
• 19:45
  Speaker 6: to be limits to what Elon Musk can do no
• 19:47
  Speaker 6: matter what Donald Trump says. And also, as you see
• 19:52
  Speaker 6: these sort of stronger personalities, people like Cash Bettel, the
• 19:56
  Speaker 6: new director of the FBI, get into their positions. They
• 20:00
  Speaker 6: are also going to be power centers, and they are
• 20:02
  Speaker 6: going to potentially push back or even challenge Elon Musk
• 20:06
  Speaker 6: oft times.
• 20:06
  Speaker 2: We wouldn't it all just take President Trump to call
• 20:09
  Speaker 2: up the naysayers and be like, no, what Elon says goes.
• 20:13
  Speaker 7: Yeah.
• 20:13
  Speaker 6: It's not totally clear what Trump wants here, although Trump
• 20:16
  Speaker 6: did did do a truth social message essentially saying I
• 20:19
  Speaker 6: want Elon Musk to be even more aggressive exactly, and
• 20:23
  Speaker 6: Musk has taken that as permission, but Trump has not
• 20:26
  Speaker 6: explicitly endorsed this. Uh. My sense is anyway, that that
• 20:30
  Speaker 6: Trump wants Elon to be the bulldog here, right, and and.
• 20:36
  Speaker 2: Perhaps also take the heat at the same time exactly.
• 20:39
  Speaker 6: Maybe maybe you know, move the Overton window or whatever,
• 20:42
  Speaker 6: make some of make some of these more extreme uh measures,
• 20:46
  Speaker 6: extreme reforms, uh you know, attacks on the quote unquote
• 20:49
  Speaker 6: administrative state, as conservatives call it, more palatable, more politically palatable.
• 20:54
  Speaker 6: While while as he said, Alex not attracting the heat himself,
• 20:58
  Speaker 6: allowing Musk uh and also his cabinet appointees to sort
• 21:02
  Speaker 6: of fight it out even in public. Max.
• 21:04
  Speaker 3: In addition to being a Bloomberg BusinessWeek senior reporter, you're
• 21:06
  Speaker 3: also the co host of Elon Inc. The podcast about
• 21:10
  Speaker 3: Elon the people you talk to with this podcast. Is
• 21:13
  Speaker 3: there any kind of consensus about how long Elon Musk
• 21:17
  Speaker 3: and President Trump will co exist peacefully before maybe these
• 21:21
  Speaker 3: two large egos kind of start butting heads and it
• 21:24
  Speaker 3: may blow up to some extent.
• 21:25
  Speaker 6: You know, early on in the Trump presidency, you saw
• 21:29
  Speaker 6: people who were who had sort of covered Trump, were
• 21:32
  Speaker 6: close to Trump world, more skeptical about Musk. Right, see
• 21:36
  Speaker 6: the fact that Trump has over the years had these
• 21:38
  Speaker 6: people who kind of come into the center of his world,
• 21:41
  Speaker 6: often these business figures who briefly have a run and
• 21:44
  Speaker 6: are then forced out or end up in public disputes.
• 21:48
  Speaker 6: You know, Anthony Scaramucci, the short lived Press secretary, being
• 21:52
  Speaker 6: kind of the most famous example of this. I have been,
• 21:56
  Speaker 6: I'd say more optimistic that Elon Musk and down Trump
• 22:00
  Speaker 6: will last. And that's partly because Elon Musk has showed
• 22:04
  Speaker 6: and it showed again and again that as you know,
• 22:07
  Speaker 6: as much as we think of Musk as having this
• 22:09
  Speaker 6: big ego, he has been willing to kind of play
• 22:12
  Speaker 6: second fiddle to Trump. We saw those that kind of
• 22:15
  Speaker 6: relationship on the Sean Hannity Show last week where he
• 22:17
  Speaker 6: had Trump kind of cutting in at times, essentially telling Elan,
• 22:20
  Speaker 6: I'll speak for you. So so he has been more
• 22:23
  Speaker 6: willing than usual to sort of, you know, play play
• 22:27
  Speaker 6: second fiddle to Trump, to embrace Trump kind of fully
• 22:32
  Speaker 6: rather than trying to create a distance. And then the
• 22:34
  Speaker 6: other thing is Musk has real leverage over Trump, more
• 22:37
  Speaker 6: leverage than any of these other business guys have. He
• 22:40
  Speaker 6: is he was the biggest donor to the in the
• 22:43
  Speaker 6: twenty twenty four cycle and is a potential mega donor
• 22:48
  Speaker 6: in the midterm. So if as Trump looks to kind
• 22:51
  Speaker 6: of rein in contain influence a Congress that is potentially
• 22:55
  Speaker 6: going to be very difficult to influence, Musk is probably
• 22:58
  Speaker 6: the most important set that he has because Musk can say, hey,
• 23:02
  Speaker 6: if you don't support this nominee, if you don't support
• 23:04
  Speaker 6: this budget, I am going to primary you, And that
• 23:06
  Speaker 6: is going to be a credible threat. And we've seen
• 23:09
  Speaker 6: Musk do that already. I think we're going to see
• 23:11
  Speaker 6: him do more of that.
• 23:12
  Speaker 2: And just to the point we were talking about it,
• 23:14
  Speaker 2: in the newsroom earlier that like, all the negative vibes
• 23:17
  Speaker 2: are on Musk right now, not Trump, even if they
• 23:19
  Speaker 2: believe the same thing.
• 23:21
  Speaker 9: That's like a really lovely foil.
• 23:23
  Speaker 6: Absolutely, yes, I think I think you're right, and I
• 23:25
  Speaker 6: think that Trump has you know, it's hard to know
• 23:28
  Speaker 6: like what he's doing. What's you know, definitely strategy and
• 23:31
  Speaker 6: what are just tactics or whatever. But it does seem
• 23:34
  Speaker 6: like one of the results of this approach is that
• 23:37
  Speaker 6: Musk is becoming more unpopular for some of these things,
• 23:42
  Speaker 6: and Trump is kind of not necessarily touched by it,
• 23:45
  Speaker 6: right He's people are mad at Musk for sending these
• 23:48
  Speaker 6: aggressive emails, or for firing federal workers, or for you know,
• 23:51
  Speaker 6: defunding charities that they know about, They're not necessarily taking
• 23:55
  Speaker 6: it out on Trump. I guess the risk here for
• 23:58
  Speaker 6: Trump is that he becomes like must become just so controversial. Yes,
• 24:03
  Speaker 6: And he's also just as we saw during the appearance
• 24:06
  Speaker 6: at Seapack, you know, he's potentially erratic. He potentially on
• 24:10
  Speaker 6: any given day, any given hour, he can make himself
• 24:13
  Speaker 6: the story. And again, once you start getting to more
• 24:17
  Speaker 6: tense things, for instance, negotiations of the budget that are
• 24:19
  Speaker 6: coming or in Ukraine or whatever. You can imagine that
• 24:22
  Speaker 6: stuff creating lots of risk and problems for Trump.
• 24:26
  Speaker 2: All right, Max, really appreciate it, really wonderful stuff. Max
• 24:29
  Speaker 2: sat Chafkin, Bloomberg BusinessWeek, Senior reporter, co host of Elon Inc.
• 24:33
  Speaker 4: Podcast.
• 24:35
  Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
• 24:39
  Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,
• 24:44
  Speaker 1: ten am to noon Eastern on Bloomberg dot com, the
• 24:47
  Speaker 1: iHeartRadio app tune In, and the Bloomberg Business App. You
• 24:51
  Speaker 1: can also watch us live every weekday on YouTube and
• 24:54
  Speaker 1: always on the Bloomberg terminal