Latest / Trend Watch / Episode 44: Trump's Cabinet, Biden's Pardon, and Syria's Civil War

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Episode 44: Trump's Cabinet, Biden's Pardon, and Syria's Civil War · Trend Watch

• 0:04
  SPEAKER_01: Ready to take a deeper look at where history, politics, and economics all intersect?
• 0:10
  SPEAKER_01: Well then, you've come to the right place.
• 0:13
  SPEAKER_01: Each week,
• 0:14
  SPEAKER_01: here's where we pull back the headlines and focus on the big trends,
• 0:18
  SPEAKER_01: the stuff that actually shapes our future.
• 0:21
  SPEAKER_01: Through the noise, we focus on the signal.
• 0:24
  SPEAKER_01: I'm your host, Neil Howe, and this is Trend Watch.
• 0:30
  SPEAKER_01: today is december 5th 2024 and this is trend watch welcome back everybody as usual
• 0:37
  SPEAKER_01: i have on my fellow analyst christian ford so christian how was your week it was
• 0:43
  SPEAKER_00: pretty good neil you know just getting all my christmas shopping done just about
• 0:47
  SPEAKER_00: finished with that it's eggnog season which i always enjoy
• 0:51
  SPEAKER_01: I won't go into too much about your eggnog, what you put in it.
• 0:55
  SPEAKER_01: I was recently back from California, actually.
• 1:01
  SPEAKER_01: Right.
• 1:02
  SPEAKER_01: Get together with my family.
• 1:04
  SPEAKER_01: We usually do that on Thanksgiving.
• 1:07
  SPEAKER_01: And it was in the Sierras, and it was unseasonably cold.
• 1:11
  SPEAKER_01: We had a huge storm hit the northwest.
• 1:15
  SPEAKER_01: I was up in the Tahoe area, and there was lots of snow.
• 1:20
  SPEAKER_01: We may talk about global warming,
• 1:22
  SPEAKER_01: but I remember as a kid going up to that same place and there was almost never snow
• 1:26
  SPEAKER_01: at the beginning of December.
• 1:29
  SPEAKER_01: But this time, yeah, this time was cold.
• 1:31
  SPEAKER_01: A lot of snow, a lot of winter sports going on.
• 1:36
  SPEAKER_01: It was great.
• 1:37
  SPEAKER_01: It was great to relive those childhood memories.
• 1:40
  SPEAKER_01: Yeah.
• 1:41
  SPEAKER_01: So look,
• 1:42
  SPEAKER_01: as always,
• 1:43
  SPEAKER_01: I want to remind all you listeners,
• 1:45
  SPEAKER_01: if you like this podcast,
• 1:47
  SPEAKER_01: please go ahead and share it with your family and friends.
• 1:49
  SPEAKER_01: Repost it on social media.
• 1:51
  SPEAKER_01: From now on, only certain episodes will remain free.
• 1:56
  SPEAKER_01: So Christian, I think we should get into today's podcast.
• 1:59
  SPEAKER_01: We have a lot to talk about.
• 2:01
  SPEAKER_01: I know we skipped a week.
• 2:04
  SPEAKER_01: You know, first we got market news as usual.
• 2:07
  SPEAKER_01: We be covering a lot of stories from, you know, here at home and around the world.
• 2:13
  SPEAKER_01: Let me just go through what we got and then we'll come back and have you catch us up on the market.
• 2:20
  SPEAKER_01: One thing we'll be talking about,
• 2:22
  SPEAKER_01: obviously,
• 2:22
  SPEAKER_01: is more recapping of the 2024 election results and what we know to date about the
• 2:27
  SPEAKER_01: incoming Trump White House.
• 2:31
  SPEAKER_01: Almost, almost any, yeah, an unlimited amount we could talk about here, but we'll try to sum it up.
• 2:38
  SPEAKER_01: And then some interesting items in one of his final acts as president,
• 2:42
  SPEAKER_01: Joe Biden gives his son Hunter a surprisingly broad pardon for any crimes he has
• 2:47
  SPEAKER_01: committed or may have committed during the past 10 or 11 years.
• 2:52
  SPEAKER_01: We'll certainly be talking a bit about that.
• 2:55
  SPEAKER_01: In a White House briefing, Biden officials revealed that a Chinese hack on U.S.
• 2:59
  SPEAKER_01: telecommunications data first revealed in September is worse than originally reported,
• 3:05
  SPEAKER_01: and that Americans using their phones may still be under surveillance by Chinese agents.
• 3:11
  SPEAKER_01: And then we'll go on to talk about what's happening globally.
• 3:15
  SPEAKER_01: South Korean President Yoon Suk-yeol surprised his country Sunday night by
• 3:20
  SPEAKER_01: declaring martial law in a television address.
• 3:24
  SPEAKER_01: before rescinding that declaration several hours later amid calls for his resignation or impeachment.
• 3:30
  SPEAKER_01: In France,
• 3:31
  SPEAKER_01: the National Assembly voted no confidence in the government of Michel Bernier,
• 3:37
  SPEAKER_01: which leaves President Emmanuel Macron without a government just weeks before
• 3:42
  SPEAKER_01: France's current year budget expires.
• 3:45
  SPEAKER_01: And finally,
• 3:46
  SPEAKER_01: the Syrian civil war has reignited,
• 3:50
  SPEAKER_01: suddenly reignited with the victories of a rebel group,
• 3:54
  SPEAKER_01: Hayat Tahrir al-Asham,
• 3:56
  SPEAKER_01: or HTS,
• 3:57
  SPEAKER_01: over the government forces of Bashar al-Assad in Aleppo and Homs and who knows
• 4:03
  SPEAKER_01: what's next.
• 4:05
  SPEAKER_01: So with all that on the plate, let's take a look at the market.
• 4:08
  SPEAKER_00: All right, Neil.
• 4:09
  SPEAKER_00: The S&P 500 closed down 0.19%.
• 4:09
  SPEAKER_00: And over the last five market days, it's up 1.27%.
• 4:11
  SPEAKER_00: As for the global Dow, that closed up at 0.31%.
• 4:13
  SPEAKER_00: Over the last five days, it's up 1.15%.
• 4:15
  SPEAKER_00: As for the VIX, that's at 13.42%, lower than we have been seeing.
• 4:18
  SPEAKER_00: And the 10-year Treasury, that is at 4.18%.
• 4:33
  SPEAKER_00: down 8.3 basis points over the last five days.
• 4:36
  SPEAKER_01: Yeah, look, I mean, I know it's kind of unusual that bonds and stocks are going the same direction.
• 4:43
  SPEAKER_01: This is sort of that positive correlation we've noticed for a while.
• 4:46
  SPEAKER_01: It makes it difficult for the
• 4:49
  SPEAKER_01: a typical bond-stock combined portfolio strategy that no longer work with each other.
• 4:58
  SPEAKER_01: But the Trump trade is still on, right?
• 5:01
  SPEAKER_01: The equity markets are still going up, at least before today.
• 5:05
  SPEAKER_01: And the dollar is going down, which is a little bit of a correction from what we saw earlier.
• 5:11
  SPEAKER_01: And most of all, the U.S.
• 5:14
  SPEAKER_01: equities have continued to power ahead
• 5:18
  SPEAKER_01: above the rest of the developed world,
• 5:20
  SPEAKER_01: particularly Europe,
• 5:21
  SPEAKER_01: which really hasn't gone anywhere since late spring,
• 5:26
  SPEAKER_01: whereas the U.S.
• 5:27
  SPEAKER_01: has done well spring and summer and has done at least as well since Trump was elected.
• 5:34
  SPEAKER_01: So there you have it.
• 5:37
  SPEAKER_01: Anything we got around the world that you have to offer?
• 5:40
  SPEAKER_00: Well, we can do some indicators.
• 5:42
  SPEAKER_00: We'll start here with the U.S., Neil.
• 5:44
  SPEAKER_00: We have PMIs for November, both from the S&P and ISM.
• 5:48
  SPEAKER_00: Let's start with S&P.
• 5:49
  SPEAKER_00: Manufacturing rose from 48.5 to 49.7, and services rose from 55 to 56.1.
• 5:59
  SPEAKER_00: Now, the ISM got more of the media attention.
• 6:02
  SPEAKER_00: Manufacturing also rose, similar to the S&P, from 46.5 to 48.4.
• 6:05
  SPEAKER_00: But services was the big surprise.
• 6:06
  SPEAKER_00: It declined from 56 to 52.1.
• 6:15
  SPEAKER_01: Right.
• 6:15
  SPEAKER_01: That is a big surprise.
• 6:16
  SPEAKER_01: Four points down.
• 6:17
  SPEAKER_01: Services is most of the economy, obviously.
• 6:20
  SPEAKER_01: And in both of these PMIs, the services continues to contract, right?
• 6:29
  SPEAKER_01: But of course,
• 6:30
  SPEAKER_01: we're not Europe,
• 6:30
  SPEAKER_01: which I understand it's contracting everywhere,
• 6:34
  SPEAKER_01: both services and manufacturing.
• 6:36
  SPEAKER_01: I know you're about to get into that.
• 6:38
  SPEAKER_00: Yeah, we'll go to the Eurozone where we have PMIs also for November.
• 6:42
  SPEAKER_00: Manufacturing fell from 46 to 45.2, and services fell from 51.6 to 49.5.
• 6:49
  SPEAKER_00: That's the first contraction we have seen since January.
• 6:54
  SPEAKER_00: We also have some PMIs, Neil, from China.
• 6:56
  SPEAKER_00: We have the NBS PMIs, which are the bigger, more state-owned companies.
• 7:01
  SPEAKER_00: Manufacturing barely rose to 50.3 and services slightly declined to 50.
• 7:07
  SPEAKER_00: So they're just right on the edge of growth.
• 7:12
  SPEAKER_01: Right.
• 7:13
  SPEAKER_01: Well, we'll see if Xi Jinping still has a response to the Trump election.
• 7:20
  SPEAKER_01: We've often hypothesized that this is when they bring out their big fiscal bazooka
• 7:25
  SPEAKER_01: in preparation for the tariffs,
• 7:28
  SPEAKER_01: which I think we're going to talk about in just a couple of minutes.
• 7:33
  SPEAKER_01: That's it.
• 7:33
  SPEAKER_01: Anything else you got to offer?
• 7:36
  SPEAKER_00: Not much.
• 7:36
  SPEAKER_00: Should we just start with our first story here?
• 7:38
  SPEAKER_00: Why don't we just go into it?
• 7:40
  SPEAKER_00: All right.
• 7:40
  SPEAKER_00: Let's start with just, you know, some final wrap up thoughts of the election.
• 7:44
  SPEAKER_00: You know,
• 7:45
  SPEAKER_00: I know we're getting now the final kind of turnout numbers were around 64 percent
• 7:50
  SPEAKER_00: of the voting eligible population.
• 7:51
  SPEAKER_00: That's slightly below what we saw in 2020 at 66 percent.
• 7:56
  SPEAKER_00: Do you have any comments as these last numbers come out?
• 7:58
  SPEAKER_01: Well,
• 7:59
  SPEAKER_01: it's still a high that's equal to the peak year of 1968,
• 8:07
  SPEAKER_01: probably equal to any number in the last century.
• 8:09
  SPEAKER_01: So a little bit below, as we anticipated from the turnout rate in 2020.
• 8:14
  SPEAKER_01: But still, we are a very partisan and committed nation with a lot of people voting.
• 8:21
  SPEAKER_01: There's no question about it.
• 8:22
  SPEAKER_01: Another interesting thing, as we see, with nearly all the votes counted,
• 8:27
  SPEAKER_01: It looks as though Trump received 77.2 million votes.
• 8:31
  SPEAKER_01: That's kind of where we are.
• 8:32
  SPEAKER_01: It's going to be a little bit higher when the very final count is out.
• 8:36
  SPEAKER_01: That's almost exactly 50 percent of all votes counted versus 74.9 million or about
• 8:46
  SPEAKER_01: 48.4 percent for Kamala Harris.
• 8:48
  SPEAKER_01: That means Trump beat Harris by 1.6 percentage points of the popular vote.
• 8:53
  SPEAKER_01: And that's interesting,
• 8:55
  SPEAKER_01: Christian,
• 8:55
  SPEAKER_01: because that's almost exactly the same margin,
• 8:58
  SPEAKER_01: 1.7%,
• 8:59
  SPEAKER_01: by which Trump beat Harris in Pennsylvania.
• 9:03
  SPEAKER_01: And as you know,
• 9:04
  SPEAKER_01: this is how we measure the electoral college premium is the difference between
• 9:09
  SPEAKER_01: those two numbers,
• 9:10
  SPEAKER_01: meaning that if you had taken away the same percentage of vote in every state,
• 9:16
  SPEAKER_01: You know, at what point would Trump have lost?
• 9:18
  SPEAKER_01: Well,
• 9:18
  SPEAKER_01: he would have lost Pennsylvania,
• 9:21
  SPEAKER_01: which was the threshold state,
• 9:25
  SPEAKER_01: if you had taken away 1.7 percent of votes for member state.
• 9:30
  SPEAKER_01: And that's exactly the point at which he would have lost the popular vote.
• 9:33
  SPEAKER_01: Right.
• 9:33
  SPEAKER_01: So this means that the Electoral College premium that has so favored the Republican
• 9:38
  SPEAKER_01: Party in recent years has pretty much disappeared in this election.
• 9:41
  SPEAKER_01: Right.
• 9:42
  SPEAKER_01: So I think that's interesting.
• 9:44
  SPEAKER_01: And it it really shows how that,
• 9:47
  SPEAKER_01: you know,
• 9:47
  SPEAKER_01: one aspect of the voting was that Trump received his biggest disproportionate
• 9:52
  SPEAKER_01: support in deep blue states and in particularly in in.
• 10:00
  SPEAKER_01: urban areas in deep blue states, plus Latinos who generally do not live in battleground states.
• 10:11
  SPEAKER_01: So this is how Trump actually got a lot of votes he didn't need.
• 10:15
  SPEAKER_01: So kind of erased that margin we choose to talk about.