Latest / Balance of Power / US Hiring Slows, Curbing Momentum

Transcript

US Hiring Slows, Curbing Momentum · Balance of Power

0:02
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
0:10
Speaker 1: Bloomberg Balance of Power podcast kettas live weekdays at noon
0:14
Speaker 1: and five pm Eastern on Apple Cocklay and Android Auto
0:17
Speaker 1: with the Bloomberg Business App. Listen on demand wherever you
0:20
Speaker 1: get your podcasts, or watch us live on YouTube.
0:25
Speaker 2: Checking out the markets on this Thursday, that is helping
0:28
Speaker 2: us close out the trading week because yes, of course
0:30
Speaker 2: tomorrow is the holiday ahead of the July fourth holiday,
0:34
Speaker 2: which is on a Saturday this year, which is why
0:35
Speaker 2: we had the very unusual Thursday jobs report. We don't
0:38
Speaker 2: see that very often. But of course it was today
0:40
Speaker 2: that we got the print due to the holiday, and
0:42
Speaker 2: the print was weaker than most economists expected. I believe
0:46
Speaker 2: only one in the Bloomberg survey thought the print would
0:48
Speaker 2: be as low as it was at fifty seven thousand
0:51
Speaker 2: jobs added in the country in the month of June
0:55
Speaker 2: and downward revisions as we mentioned to the prior two
0:58
Speaker 2: months as well. So it paints a picture of a
0:59
Speaker 2: labor market that perhaps is not as strong as the
1:03
Speaker 2: White House would like to sell it as, though certainly
1:06
Speaker 2: we did hear the National Economic Council Director Kevin Hassett
1:09
Speaker 2: saying that this is still a strong labor market we're
1:11
Speaker 2: seeing when he spoke to our colleague Danny Berger.
1:13
Speaker 3: Earlier, I think this is a really strong, healthy job
1:16
Speaker 3: market and that this was a little bit on the
1:18
Speaker 3: other side of expectation, but the trend over three or
1:21
Speaker 3: four months is consistent with our view that again that
1:24
Speaker 3: we were growing about three percent, and that we're going
1:26
Speaker 3: to have a better second half of the year as
1:28
Speaker 3: those factories turn on the lights.
1:32
Speaker 4: Interesting that we want to spend some time on this
1:34
Speaker 4: with Michael McKee, Bloomberg's International Economics and Policy correspondent, with
1:38
Speaker 4: questions about why the number could be so far off,
1:41
Speaker 4: and in fact, if there is strength under the hood,
1:44
Speaker 4: as Kevin Hassett suggests, Mike, we're confounded by the numbers.
1:48
Speaker 4: BI by the way, was far beyond the market consensus.
1:51
Speaker 4: At two hundred thousand.
1:53
Speaker 5: We saw the.
1:53
Speaker 4: Biggest decline in leisure and hospitality payrolls since twenty twenty.
1:57
Speaker 5: We saw the pullback in participation. What do you make
1:59
Speaker 5: of all this?
2:00
Speaker 6: Well, I think there are parts of this that are
2:02
Speaker 6: just going to get tossed out by economists. They're not
2:04
Speaker 6: going to really worry about it. Because they're so out
2:07
Speaker 6: of line that they have the characteristics of things that
2:11
Speaker 6: are just randomly statistically weird, and they'll probably snap back.
2:16
Speaker 6: And one of them is the labor force falling by
2:19
Speaker 6: seven hundred and twenty thousand, and as part of the
2:21
Speaker 6: unemployment report, the household survey of employment fell by five
2:27
Speaker 6: hundred thousand, and that's kind of a ridiculously high number.
2:31
Speaker 6: So people are going to just kind of take some
2:33
Speaker 6: of that with a grain of salt, and they're going
2:36
Speaker 6: to do the same with the leisure and hospitality You
2:38
Speaker 6: were talking about that loss of sixty one thousand jobs.
2:42
Speaker 6: This is the time of year when normally leisure and
2:45
Speaker 6: hospitality establishments are hiring people, so there's probably some seasonal
2:50
Speaker 6: adjustment issue there, and then maybe something else statistically fluky.
2:55
Speaker 6: And so really what it comes down to is the
3:00
Speaker 6: that is going to do what it always does and
3:01
Speaker 6: look at the unemployment rate and say, the unemployment rate
3:06
Speaker 6: is as low as it probably will go, and that
3:09
Speaker 6: means we have at least a steady stable labor market
3:13
Speaker 6: for the moment.
3:15
Speaker 2: Well, so if that's how the Fed will read it,
3:18
Speaker 2: it may not call for rate hikes this year, then, Mike,
3:23
Speaker 2: but maybe not call for rate cuts either. Is the
3:26
Speaker 2: economic picture we're seeing painted here one that suggests that
3:30
Speaker 2: actually rates probably are where.
3:31
Speaker 7: They need to be right now.
3:33
Speaker 6: I think that's going to be the majority of opinion
3:36
Speaker 6: on the Open Market Committee. They will have to look
3:39
Speaker 6: at the latest inflation figures when we get them and
3:43
Speaker 6: see if they have eased somewhat now that oil prices
3:46
Speaker 6: are going down, and if that's the case, they'll probably
3:49
Speaker 6: stay on hold. There is sticky inflation on the services
3:53
Speaker 6: side of the economy that is not related necessarily to
3:56
Speaker 6: either tariffs or to the war, and if that continues,
4:00
Speaker 6: there'll still be some hawks who are worried about it.
4:03
Speaker 6: But at this point it looks like the most likely
4:06
Speaker 6: outcome is they just stay on hold for the rest
4:08
Speaker 6: of the year. The markets still think at the moment
4:11
Speaker 6: that they will raise rates by the end of the year.
4:13
Speaker 6: The December Fed Fund's futures suggest that, but that obvious
4:19
Speaker 6: is going to move around a lot as we get
4:21
Speaker 6: more and more details.
4:23
Speaker 4: We've talked so much about the affordability issue with regard
4:26
Speaker 4: to the consumer MIC. We're looking at sixty eight dollars
4:29
Speaker 4: a barrel oil for WTI, I'm looking at three dollars
4:32
Speaker 4: and eighty three cents gas prices slowly coming down. Could
4:35
Speaker 4: we start to see a reflection of that in consumer
4:39
Speaker 4: sentiment surveys in the months ahead.
4:41
Speaker 5: Well, it's something to watch for.
4:42
Speaker 6: We thought we might see that in the Conference Board
4:44
Speaker 6: Consumer Sentiment Index Confidence Index that came out earlier this week,
4:49
Speaker 6: and we did not.
4:51
Speaker 8: But it may have.
4:52
Speaker 6: Been just too late in the survey and too uneven
4:56
Speaker 6: because gas prices vary around the country. However, as we
5:00
Speaker 6: go forward, we should see that improve a little bit.
5:04
Speaker 6: Probably the more worrying thing for the administration is the
5:07
Speaker 6: consumer confidence numbers from the Conference Board showed declining trust
5:12
Speaker 6: in the job market, concerns about what the labor market
5:16
Speaker 6: is going to be. And then in today's jobs report
5:20
Speaker 6: you had the weak hiring, which, as I said, won't
5:23
Speaker 6: matter so much to the Fed, but that's the number
5:25
Speaker 6: that kind of will stick in people's minds. The story
5:29
Speaker 6: that'll get printed in the small town newspaper is going
5:32
Speaker 6: to be that hiring is weak, and so that's an
5:36
Speaker 6: issue for the president. And then the whole question of
5:40
Speaker 6: our average hourly earnings. While they ticked up a little bit,
5:43
Speaker 6: they're still well below inflation. Americans are still losing ground,
5:46
Speaker 6: and that is, of course, as you know, a big
5:50
Speaker 6: cross for the president to bear at this point.
5:53
Speaker 2: All right, Bloomberg's Michael McKee in New York are Economics
5:57
Speaker 2: and Policy correspondent. Thank you so much for joining us,
6:01
Speaker 2: and with the economic picture that Mike just described, we
6:04
Speaker 2: want to turn now to Capitol Hill, where we still
6:06
Speaker 2: find the chair of the House Ways and Means Committee,
6:09
Speaker 2: Congressman Jason Smith of Missouri, is joining us. You might
6:12
Speaker 2: be one of the very few people left in the
6:15
Speaker 2: rotunda after the House went home for the July fourth
6:17
Speaker 2: recess a bit early, mister chairman. It's good to have
6:20
Speaker 2: you back on Bloomberg TV and Radio. I hope you
6:23
Speaker 2: find yourself in a well air conditioned space, as it
6:25
Speaker 2: is very hot here in the capital. I'm sure you
6:30
Speaker 2: heard some of what our colleague Mike was just describing
6:33
Speaker 2: the weakness we have seen in consumer confidence data, some
6:37
Speaker 2: weakness in hiring, specifically economic data that does not paint
6:42
Speaker 2: a picture of an economy that has reaped massive benefit
6:45
Speaker 2: from the one big, beautiful bill that was signed almost
6:47
Speaker 2: a year ago. Should we not be seeing that show
6:50
Speaker 2: up more materially in the economy by.
6:52
Speaker 8: Now, you know.
6:54
Speaker 9: I think the bigger question is is to look at
6:56
Speaker 9: all these reports and the data, because they've been all
6:59
Speaker 9: over the place, and so there's a reason why they've
7:02
Speaker 9: been all over the place, and then whenever they go
7:05
Speaker 9: back and revise the prior month's reports being so far.
7:09
Speaker 8: Off that that shouldn't be the case. We need to
7:11
Speaker 8: do a better job on that.
7:12
Speaker 9: But in regards to what I'm hearing from people on
7:16
Speaker 9: the ground of what they've experienced from the working family's
7:20
Speaker 9: tax cuts, the big beautiful Bill, a lot of people's
7:23
Speaker 9: very happy. I always point to this young lady two
7:27
Speaker 9: months ago who stopped me in Fredericktown, Missouri, and she's like, Congressman,
7:32
Speaker 9: I want to say thank you.
7:34
Speaker 8: I just did my taxes.
7:35
Speaker 9: I got a refund of over ten thousand dollars. This
7:39
Speaker 9: was a single mom of three kids who benefited from
7:42
Speaker 9: the EXPANTA child tax credit of twenty two hundred dollars
7:45
Speaker 9: made permanent plus. She was a waitress, no tax on tips,
7:48
Speaker 9: plus she works overtime, no tax on overtime. And because
7:51
Speaker 9: of that, she said, I'm going to be able to
7:53
Speaker 9: pay for my rent for an entire year. I had
7:56
Speaker 9: a waiter that came up to me and said, because
7:59
Speaker 9: of the no tax some tips alone provision, it's going
8:02
Speaker 9: to allow them to pay for their utility bills for
8:05
Speaker 9: the whole year. Those are pretty big things for just
8:09
Speaker 9: everyday average Americans.
8:12
Speaker 4: Yeah, and I know that you're celebrating one year since
8:16
Speaker 4: the bill crossed, and we'll be talking about that more.
8:19
Speaker 4: I just, Chairman, I want to go back to your
8:22
Speaker 4: answer initially on the jobs report today. Are you concerned
8:25
Speaker 4: that there's bad data in the system, that these anomalies
8:29
Speaker 4: are because of a poor response rate, that we're not
8:32
Speaker 4: actually seeing a reflection of the economy in these reports.
8:36
Speaker 9: I absolutely have concerns with the data and that we
8:38
Speaker 9: need to make sure that the data gets better, because
8:41
Speaker 9: consistently the reports are revised every month. Let's get it right,
8:47
Speaker 9: And I think that's because the data has just not
8:49
Speaker 9: been proper.
8:53
Speaker 10: Well.
8:53
Speaker 2: I guess we'll look to see if the data becomes
8:56
Speaker 2: more clear as the months go on. Obviously, as we
8:59
Speaker 2: talk about the one big beautiful bill when you're on
9:01
Speaker 2: that was Budget reconciliation one point zho. We just saw
9:05
Speaker 2: recently two point oh cross to fund ICE and CBP.
9:08
Speaker 2: Now there is an active conversation as I'm sure you're
9:10
Speaker 2: well aware, mister Chairman, about Reconciliation three point zero. How
9:15
Speaker 2: quickly is there a real chance of that getting done
9:19
Speaker 2: when currently nothing is able to get across the House floor.
9:22
Speaker 2: To do to certain colleagues of yours who want to
9:24
Speaker 2: see the Save America Act passed by both chambers, first, you.
9:28
Speaker 9: Know, I'm focused on legislating. I'm focused on accomplishing great
9:34
Speaker 9: pieces of legislation, putting them on the President's desk. We
9:38
Speaker 9: did that in the One Big Beautiful Bill, which was
9:40
Speaker 9: a partisan approach. It was a reconciliation bill. Now on
9:44
Speaker 9: the Ways and Means Committee, we're working on a lot
9:46
Speaker 9: of bipartisan things. For example, the First Ladies Fostering the
9:50
Speaker 9: Future initiative to help foster kids who are aging out
9:52
Speaker 9: the system. It passed out of the Ways and Means
9:55
Speaker 9: Committee and the House of Representatives with every single Republican
9:59
Speaker 9: and every single Democrat voting for it. We're also working
10:03
Speaker 9: on some bipartisan tax issues, and bipartisan trade and bipartisan healthcare.
10:08
Speaker 9: That is what we need to deliver to the President's desk.
10:11
Speaker 9: That's what we can accomplish over the next very few
10:15
Speaker 9: legislative days.
10:16
Speaker 8: That are left.
10:18
Speaker 2: So is the Ways and Means Committee, Mister Chairman, not
10:20
Speaker 2: currently looking at any possible tax provisions that could be
10:23
Speaker 2: folded into a third reconciliation bill.
10:25
Speaker 9: Oh, we absolutely are looking at every vehicle that could
10:28
Speaker 9: be used. Reconciliation, though, is only a tool of the
10:32
Speaker 9: United States Senate. It allows them to overcome the sixty
10:36
Speaker 9: vote filibuster rule and to just pass with fifty one
10:38
Speaker 9: in the House of Representatives. We just need to pass
10:41
Speaker 9: the good tax policies, the good legislation, and that's done
10:44
Speaker 9: with the simple majority, whether you do it in reconciliation
10:47
Speaker 9: or not. And that's what we're focused on, is trying
10:49
Speaker 9: to deliver legislative means.
10:51
Speaker 8: But let me tell you, I have a list of
10:54
Speaker 8: ideas that I.
10:55
Speaker 9: Would love in any piece of tax legislation moving forward.
11:00
Speaker 4: I'm curious your thought on this idea by Elizabeth Warren
11:03
Speaker 4: and Bernie Moreno to see a d in an r
11:05
Speaker 4: A combined on this is interesting. A proposal to eliminate
11:09
Speaker 4: the Social Security tax cap, which would mean a pretty
11:12
Speaker 4: big increase and you can, I'm sure, quantify this more
11:15
Speaker 4: on top earners, the idea to prevent cuts to benefits
11:19
Speaker 4: as soon as twenty thirty two, Is that an idea
11:22
Speaker 4: you would support?
11:24
Speaker 8: You know, it's a.
11:24
Speaker 9: Big concern about the insolvency of Social Security, which is
11:28
Speaker 9: expected at twenty thirty two, also with Medicare, and it's
11:31
Speaker 9: something that Republicans and Democrats have to come to the
11:34
Speaker 9: table figure out something, and it has to be bipartisan.
11:36
Speaker 9: It cannot just be with one party fixing this. And
11:39
Speaker 9: I think we're going to have to look at every
11:42
Speaker 9: every idea that's out there, both Republicans and Democrats, because
11:46
Speaker 9: we ultimately cannot fill with the American people because too
11:49
Speaker 9: many people, including my mother, relies on Social Security.
11:55
Speaker 5: Well, i'll tell you what you know.
11:57
Speaker 4: You can you can, of course pass a lot of bills,
11:59
Speaker 4: but you need the president to sign them. And I'm
12:00
Speaker 4: just curious if you know anything about the bipartisan Housing Bill.
12:03
Speaker 4: We've had so many Republicans and Democrats join us, mister Chairman,
12:08
Speaker 4: most recently last evening, Mike Flood trumping the benefits of
12:12
Speaker 4: this bill that the President calls a big yawn.
12:14
Speaker 5: Do you know if he plans to sign it.
12:17
Speaker 9: I don't know what the President's intentions are in regards
12:20
Speaker 9: to the Housing bill. The Housing bills within the Financial
12:22
Speaker 9: Services Committee. So I'm surely just focused on tax, trade,
12:26
Speaker 9: and healthcare. The President keeps me fairly busy whenever we
12:29
Speaker 9: we're looking at those three different areas. But I couldn't
12:34
Speaker 9: predict what happens in regards to the housing book.
12:38
Speaker 2: Okay, so I'll pick one of those three areas.
12:40
Speaker 11: Trade.
12:40
Speaker 2: The US announced yesterday it doesn't intend to renew the
12:43
Speaker 2: USMCA trade agreement. What will that mean for our economy
12:48
Speaker 2: if we move from a trilateral deal to potentially to
12:51
Speaker 2: bilateral deals or pull ourselves out of this altogether.
12:55
Speaker 9: You know, when I look at the USMCA, the trading
12:59
Speaker 9: relation with canadon Mexico, it's super important. It's important to
13:03
Speaker 9: all three countries. But have they been fulfilling and honoring
13:07
Speaker 9: the parameters of the original USMCA.
13:10
Speaker 8: Absolutely not.
13:10
Speaker 9: We've been raising concerns where, for example, the Canadians when
13:14
Speaker 9: it comes to dairy the issues that they've been doing there.
13:17
Speaker 9: We also had issues with Mexico when it came to
13:20
Speaker 9: corn I represent a very rural congressional district and these
13:23
Speaker 9: issues are very very important to my people, and I
13:27
Speaker 9: appreciate that the administration it's not just going to sign
13:32
Speaker 9: off on it.
13:32
Speaker 8: They want to continue negotiations.
13:34
Speaker 9: They're not saying we don't need a trading relationship with
13:37
Speaker 9: Canada and Mexico. They're saying that we need a better
13:40
Speaker 9: trading relationship with Canada Mexico.
13:42
Speaker 4: And I'm one hundred percent behind that, mister Chairman. We've
13:46
Speaker 4: only got a couple of minutes left. Love to get
13:47
Speaker 4: your take on this story about the government potentially taking
13:50
Speaker 4: steak in another company, or maybe several companies, as open
13:53
Speaker 4: AI has reportedly opened discussions about giving the government a
13:58
Speaker 4: five percent steak and might include other firms as well,
14:03
Speaker 4: like Anthropic or Alphabet. Is there a national interest in
14:08
Speaker 4: doing so or does that run counter to your conservative
14:12
Speaker 4: values as a lawmaker.
14:14
Speaker 9: Well, I don't know much about what the proposal is
14:18
Speaker 9: that you're referring to. But what I will say in
14:21
Speaker 9: concept that just what I will say in concept is
14:25
Speaker 9: is that AI is extremely important.
14:28
Speaker 8: It's transformational.
14:29
Speaker 9: We need to make sure that the United States is
14:32
Speaker 9: the leader in AI and not China. That's what we're
14:34
Speaker 9: seeing a battle out in so many different different items
14:38
Speaker 9: plan out. I don't know all the details of what's
14:40
Speaker 9: necessary to make sure that the United States is the
14:43
Speaker 9: is the continuous leader of the world when it comes
14:45
Speaker 9: to AI, but I definitely don't want to allow it
14:48
Speaker 9: to be countries such as China.
14:50
Speaker 4: Yeah, some would call it socialism though, the government taking
14:53
Speaker 4: stakes in private companies. Do you worry about that becoming
14:57
Speaker 4: a trend?
14:59
Speaker 8: Yeah, let me tell you.
15:00
Speaker 9: I'm about the government's less involvement in everything so across
15:06
Speaker 9: the board, I'm worried about that. I think government's too
15:09
Speaker 9: big and it needs to be limited.
15:12
Speaker 4: Well, I'm glad you could join us to spend some
15:13
Speaker 4: time ahead of the holiday. Mister chairman, enjoy your fourth
15:16
Speaker 4: and try to stay cool out there if you're staying
15:18
Speaker 4: in town. My god, it's going to be one hundred
15:20
Speaker 4: degrees Kaly by the end of this day and just
15:23
Speaker 4: as hot for the celebrations this weekend. They're now telling
15:26
Speaker 4: people not to attend the rehearsal for the big concert
15:30
Speaker 4: on the Maltamar and it's going to be too hot.
15:32
Speaker 4: We're going to turn up the air conditioning and come
15:34
Speaker 4: back later this hour. Susan del Bene, chair of the
15:36
Speaker 4: d Triple C stay.
15:38
Speaker 5: With us on balance of Power. We'll have much more
15:40
Speaker 5: coming up after this.
15:44
Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch
15:48
Speaker 1: us live weekdays at noon and five pm Eastern on
15:51
Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business App.
15:54
Speaker 1: You can also listen live on Amazon Alexa from our
15:57
Speaker 1: flagship New York station.
15:59
Speaker 5: Just say Alexa, play Bloomberg. Eleven thirty.
16:03
Speaker 2: Feels like one hundred and one degrees right now. Yes,
16:06
Speaker 2: the heat dome does extend up north. We're not just
16:09
Speaker 2: suffering from it here in Washington, where the real feel
16:12
Speaker 2: currently is also triple digits. We're at an even one
16:15
Speaker 2: hundred right now, and it's only going to get hotter
16:18
Speaker 2: as the weekend progresses, including on July fourth, when, of course,
16:22
Speaker 2: celebrations are scheduled on the National Mall as they are
16:24
Speaker 2: every Independence Day, though this one is extra special as
16:27
Speaker 2: it is the semi quincentennial and there are celebrations for
16:30
Speaker 2: America's two hundred and fiftieth birthday, with forty minutes of
16:33
Speaker 2: fireworks planned in the district around eleven pm because President
16:37
Speaker 2: Trump is planning to address the crowds on the National
16:40
Speaker 2: Mall before that. Assuming there are crowds, it's going to
16:44
Speaker 2: be really hot. You can't bring in coolers, you can't
16:46
Speaker 2: bring in chairs. There's probably going to be a lot
16:49
Speaker 2: of potential suffering alongside the celebrating in heat like this.
16:54
Speaker 2: But it speaks to one of the many challenges around
16:58
Speaker 2: this event is it's also something that grown to be
17:01
Speaker 2: quite political due to the heavy involvement of President Trump,
17:04
Speaker 2: who of course has his own Freedom to fifty operation
17:07
Speaker 2: beyond the bipartisan America to fifty which was of course
17:10
Speaker 2: originally put into place by Congress.
17:13
Speaker 4: This is going to be quite a weekend around here,
17:14
Speaker 4: by the way, because of the extreme heat. Capital Police
17:17
Speaker 4: now say the public is not invited tonight's rehearsal for
17:20
Speaker 4: a Capital Fourth concert. That's the one that runs tomorrow
17:24
Speaker 4: night when the President is at Mount Rushmore, the big
17:27
Speaker 4: one on Saturday. You're talking about you can't bring anything
17:29
Speaker 4: but yourself basically, and we're going to have that triple
17:33
Speaker 4: digit heat combined with enormous amounts of smoke from what
17:37
Speaker 4: will be a record setting fireworks display where till the
17:40
Speaker 4: Guinness people are here for this, you know they've got
17:42
Speaker 4: to mark down the biggest air show ever, biggest fireworks
17:45
Speaker 4: display ever.
17:45
Speaker 5: Are both set for Saturday.
17:47
Speaker 4: The National Park Service, with documents obtained by the Washington
17:51
Speaker 4: Post deeply concerned about air quality, predicting very hazardous and
17:55
Speaker 4: unhealthy levels of a particulate matter coming from the from
18:00
Speaker 4: the fireworks. The Capital weather gang at the Washington Post
18:04
Speaker 4: predicting so much smoke will collect over the mall that
18:07
Speaker 4: it is possible no one will see the bulk of
18:10
Speaker 4: the fireworks.
18:11
Speaker 5: Yeah, so down.
18:13
Speaker 2: There, really celebratory.
18:14
Speaker 4: Absolutely. We haven't mentioned the fundraising dispute either. We'll get
18:18
Speaker 4: into with our panel, should we bring him in? Rick
18:20
Speaker 4: Davis is back with us Bloomberg Politics contributor, Republican strategist
18:24
Speaker 4: and partner at stone Court Capital, and Matt Robison is
18:27
Speaker 4: here too, Democratic strategist, former campaign manager.
18:31
Speaker 5: Gents happy fourth of July.
18:33
Speaker 4: When we start talking about America two fifty, and we'll
18:36
Speaker 4: get into this whole fundraising mess, the freedom two fifty
18:39
Speaker 4: versus America two fifty?
18:41
Speaker 5: Rick Davis?
18:41
Speaker 4: Are we in a world in which celebrating the country's
18:45
Speaker 4: birthday has become a partisan activity? We're hanging a flag,
18:49
Speaker 4: an American flag in front of your house is an
18:51
Speaker 4: indication of your political persuasion?
18:54
Speaker 12: Yeah, I don't think it's gotten that far. I think
18:57
Speaker 12: there's been plenty of competition in Washington around who controls
19:01
Speaker 12: what events and that kind of thing. I mean, obviously,
19:04
Speaker 12: the President when he took office created his own group
19:07
Speaker 12: Freedom two fifty to compete with the congressionally mandated official
19:11
Speaker 12: celebrations that have worked for years to prepare the country for.
19:14
Speaker 8: This great anniversary.
19:16
Speaker 12: But I got to tell you, Joe, after you and
19:18
Speaker 12: Kayley's description of the mall, who in the.
19:22
Speaker 7: World would go down there?
19:24
Speaker 12: I mean, is there something positive you could say, like, oh,
19:28
Speaker 12: by the way, the gods will.
19:29
Speaker 5: Be really good or something we're working on it.
19:32
Speaker 2: We're looking well, Joe did mention they're trying to set
19:34
Speaker 2: againness world record for number of fireworks. You may not
19:37
Speaker 2: be able to see them, but you could still say
19:39
Speaker 2: you were there when the record is set. And at
19:41
Speaker 2: the end of the day, Matt, is this not about patriotism?
19:43
Speaker 2: Are we lacking that? Is we celebrate two hundred and
19:46
Speaker 2: fifty years.
19:48
Speaker 13: I don't think we're lacking patriotism, but I agree Kayley,
19:51
Speaker 13: you've just done a bang up job of describing what
19:54
Speaker 13: sounds like hell noxious vapor, a stifling heat, a fetid swamp.
19:59
Speaker 5: Where the reflecting it used to be.
20:01
Speaker 11: Yeah, I'm not exactly finding up for that. Look I
20:04
Speaker 11: agree with Rick, though, there's been no better display of
20:08
Speaker 11: the true spirit of America than what's been widely reported
20:11
Speaker 11: around the country. Real Americans welcoming visitors from around the
20:15
Speaker 11: world to our home soil World Cup, showing the generosity
20:19
Speaker 11: of spirit, the friendliness, the neighborliness that really is quintessentially American.
20:25
Speaker 11: So that's what I like to focus on. I was
20:27
Speaker 11: watching the World Cup match last night with my family.
20:30
Speaker 11: We had our American flag out proudly displayed. I don't
20:33
Speaker 11: think that's become particularly part is in yet. As for
20:36
Speaker 11: the celebrations on the National Mall, yeah.
20:39
Speaker 5: Not so much.
20:40
Speaker 4: Okay, well that sound glad to hear you're both together
20:43
Speaker 4: on that, Rick. I'll tell you what were regardless of
20:46
Speaker 4: America two fifty or Freedom two fifty, you would have
20:48
Speaker 4: felt that tingle when you saw the Thunderbirds F sixteen
20:51
Speaker 4: fly over there a little while ago. And it's going
20:53
Speaker 4: to be a riot, I'm sure on Saturday. I need
20:55
Speaker 4: to see some of this stuff. But I do want
20:57
Speaker 4: to ask you about the fundraising matter, because this is
20:59
Speaker 4: real new. The Washington Post reports that House Democrats are
21:03
Speaker 4: accusing President Trump's allies of working to divert funds away
21:07
Speaker 4: from the official congressionally mandated event you referred to America
21:11
Speaker 4: two fifty and toward Freedom two fifty, whose officials and allies,
21:17
Speaker 4: they say, steered money away from America two fifty and
21:21
Speaker 4: toward projects shaped by President Trump. Some donors were given
21:26
Speaker 4: routing and account numbers that directed funds to Freedom to fifty,
21:31
Speaker 4: the Trump event.
21:32
Speaker 5: So what's going on here?
21:35
Speaker 12: Yeah? Look, I mean Freedom tow to fifty is basically
21:38
Speaker 12: a for profit organization. The commitment initially was that private
21:43
Speaker 12: funds would be used to foster this kind of patriotic activity.
21:49
Speaker 8: Doesn't seem like.
21:49
Speaker 5: A lot of the events have panned out that well.
21:53
Speaker 12: Various celebrations on the mall didn't attract the kind of
21:56
Speaker 12: headliners you wanted. So the headliner mccame Donald Trump. Now
22:00
Speaker 12: Donald Trump's given a speech on the fourth of July. Sure,
22:04
Speaker 12: everyone is just hot in anticipation of that happening for
22:08
Speaker 12: a couple hours before the fireworks. But look, I mean,
22:12
Speaker 12: all of this stuff, unfortunately inside the Beltway is Matt
22:16
Speaker 12: and I describe is a sess pool makes a reflecting
22:19
Speaker 12: pool look clear, And the reality is all going to
22:23
Speaker 12: be investigated significantly throughout the course of this year and
22:27
Speaker 12: next by Democrats in Congress, especially if they get the majority.
22:31
Speaker 12: And it'll just add to the frustration that the American
22:34
Speaker 12: voters have about whether or not their leaders in Washington
22:38
Speaker 12: care more about themselves than voters and citizens of their country.
22:43
Speaker 12: A sad reflection of our country's two hundred and fiftieth anniversary.
22:48
Speaker 5: Look forward to the hearings.
22:50
Speaker 2: Well, yeah, especially as we consider the potential outcome of
22:54
Speaker 2: the midterms, as we consider the American voter. Though Matt,
22:58
Speaker 2: knowing that when this country was found, did some of
23:00
Speaker 2: the very founders, though they eventually did divide into factions
23:04
Speaker 2: that turned into political parties, warned against party systems. George
23:08
Speaker 2: Washington obviously didn't want that to happen. And yet here
23:12
Speaker 2: we have not only a party system, but one in
23:14
Speaker 2: which it seems that they're growing farther and farther apart,
23:18
Speaker 2: in a country that is getting more polarized, polarized in
23:21
Speaker 2: terms of political opinion than people being brought together. And
23:25
Speaker 2: I just wonder, especially as we consider what we're seeing
23:28
Speaker 2: in this primary season, how you see this playing out.
23:32
Speaker 2: Are we still going to have a two party system
23:34
Speaker 2: or are we going to have a four party system
23:36
Speaker 2: that includes the far left, the far right, and then
23:39
Speaker 2: those more in the middle.
23:42
Speaker 5: Well, Kaylee, that's a fascinating question.
23:44
Speaker 11: I hadn't really thought about it that way, but you're right,
23:47
Speaker 11: that is kind of the dynamic that we're seeing play
23:49
Speaker 11: out right now, where people with outsider credentials are doing
23:53
Speaker 11: well in democratic primaries. We've seen this kind of dynamic
23:56
Speaker 11: on the Republican side before. Of course, the ultimate avatar
23:59
Speaker 11: of the outsider credential is Donald Trump himself, and it
24:03
Speaker 11: does seem like party establishments on both sides do have
24:08
Speaker 11: a vested interest in quietly trying to preserve the system
24:12
Speaker 11: against outsiders who seem pretty bent on radical change. And
24:19
Speaker 11: in the case of the Republican Party, I'm sorry to say,
24:22
Speaker 11: a certain amount of corruption and graft that we're seeing
24:25
Speaker 11: grow up around this Trump administration. The news of how
24:28
Speaker 11: much profit Trump has garnered through his cryptocurrency ventures, the
24:33
Speaker 11: mining venture that Howard Lutnik announced, which is going to
24:38
Speaker 11: profit his sons and Trump's sons, that doesn't seem to
24:41
Speaker 11: be the direction that the American people would want or
24:45
Speaker 11: that the founders envisioned. So I don't necessarily foresee a
24:49
Speaker 11: fracturing of the parties into four. But I do see
24:53
Speaker 11: kind of a common set of shared interests emerging. Where
24:57
Speaker 11: the question is really going to be, do we want
24:59
Speaker 11: to presume the system that we're celebrating over the course
25:02
Speaker 11: of two hundred and fifty years, do we think that
25:04
Speaker 11: that's been largely successful? Or do we all feel invested
25:07
Speaker 11: in it?
25:08
Speaker 8: Or do we not?
25:11
Speaker 4: Way in on this, Rick, you were still working with
25:13
Speaker 4: John McCain in the Senate when the Tea Party emerged.
25:16
Speaker 4: You've been through distortions before, particularly in a primary season,
25:21
Speaker 4: particularly in an off year when the party is in.
25:23
Speaker 5: A minority position on the hill.
25:25
Speaker 4: Is this just par for the course, or is Kaylee
25:28
Speaker 4: Wright we could be going outside of the lines of
25:31
Speaker 4: these traditional party structures in this next cycle.
25:35
Speaker 7: Yeah.
25:35
Speaker 12: Look, I mean there's always going to be the flanks
25:38
Speaker 12: of the party that pose a obstacle to party unity.
25:43
Speaker 12: And yet I would say one of the things that
25:46
Speaker 12: is disturbing to me, I'm a big fan of the
25:49
Speaker 12: two party system. I think it's done really well for
25:52
Speaker 12: our country for a long period of time, creating security
25:54
Speaker 12: and prosperity. But at the end of the day, more
25:57
Speaker 12: and more voters are just basically rejected in the concept
26:00
Speaker 12: of being a Republican or a Democrat. I just saw
26:03
Speaker 12: a recent pall that new registrants are basically splitting twenty
26:07
Speaker 12: seven to twenty seven percent each for Republican and Democrat,
26:11
Speaker 12: but the rest are all identifying as independence, which is
26:13
Speaker 12: a massive increase in the number of self identified new
26:18
Speaker 12: registered voters going on the independent route, meaning that they're
26:22
Speaker 12: not happy with either party or looking for options at
26:25
Speaker 12: the end of the day. I was very impressed with
26:28
Speaker 12: your interview just now about with the Chairman of the
26:32
Speaker 12: Ways of the Means committe who said, you know what,
26:33
Speaker 12: we're working on all these bipartisan bills, and he enumerated
26:36
Speaker 12: a number of them. I never thought today I would
26:39
Speaker 12: hear such a deep throated endorsement of bipartisanship from a
26:43
Speaker 12: Republican in Congress.
26:44
Speaker 5: So there's hope.
26:47
Speaker 12: Maybe it's a message for the next two hundred and fifty.
26:49
Speaker 2: Years, and we will leave it on that hopeful note.
26:53
Speaker 2: Rick Davis and Matt Rosen our Political Panel, thank you
26:56
Speaker 2: so much for joining us on this eve of the
26:58
Speaker 2: holiday weekend, and a very happy Fourth of July to you,
27:01
Speaker 2: and of course, the conversations around America to fifty Freedom
27:04
Speaker 2: to fifty the semi Quincentennial. Do not stop with Balance
27:07
Speaker 2: of Power. There will be plenty more to come this weekend,
27:09
Speaker 2: including a special broadcast of Bloomberg. This weekend, David Gura,
27:12
Speaker 2: Christina Raffini, and Lisa Matteo will be broadcasting live from
27:16
Speaker 2: the Intrepid with special coverage celebrating America's two hundred and
27:20
Speaker 2: fiftieth birthday. You can find it all morning on the
27:22
Speaker 2: deck of the Intrepid on the Hudson River. Watch and
27:25
Speaker 2: listen live on Bloomberg Television, Bloomberg Radio, and of course,
27:28
Speaker 2: the Bloomberg Business App. On Saturday, July fourth, starting at
27:32
Speaker 2: seven am.
27:32
Speaker 4: Eastern, stay with us on Balance of Power. We'll have
27:35
Speaker 4: much more coming up after this.
27:40
Speaker 1: You're listening to the Bloomberg Balance of Power podcast ketas
27:44
Speaker 1: live weekdays at noon and five pm Eastern on Alpa
27:47
Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen
27:51
Speaker 1: on demand wherever you get your podcasts, or watch us
27:54
Speaker 1: live on YouTube.
27:57
Speaker 4: It is the final trading session of the week and
27:59
Speaker 4: so have a focus on stocks and bonds as we
28:03
Speaker 4: get closer to the close.
28:04
Speaker 5: Won't be back to trading until Monday.
28:07
Speaker 4: It's been a really busy newsweek that we've packed into
28:09
Speaker 4: a shortened trading week, and the Supreme Court had a
28:11
Speaker 4: lot to do with that with some landmark rulings this
28:14
Speaker 4: week that got a lot of attention, including first and
28:17
Speaker 4: foremost birthright citizenship. But the ruling on political spending was
28:22
Speaker 4: key and one that we've been focused on here on
28:25
Speaker 4: balance of power, throwing out federal limits Kayley to coordinate
28:30
Speaker 4: essentially between spending between candidates and campaigns, and it resulted
28:34
Speaker 4: in with the analysis, if you buy it, an advantage
28:37
Speaker 4: to Republicans, a huge fundraising hall for Democrats in the House.
28:42
Speaker 2: Yeah, and that's what we want to speak to now,
28:44
Speaker 2: as well as the climate overall as we get closer
28:46
Speaker 2: and closer to the midterms and of course or in
28:48
Speaker 2: the thick of primary season, as we turn to the
28:50
Speaker 2: chairwoman of the Democratic Congressional Campaign Committee, Congressman Stusan Del
28:54
Speaker 2: Bennet of Washington, is back with us here on Bloomberg
28:58
Speaker 2: TV and Radio. Chairwoman, it's good to have you in
29:01
Speaker 2: a very happy fourth of July weekend.
29:03
Speaker 7: To you.
29:03
Speaker 2: Almost on Joe's point around the Supreme Court decision, in
29:07
Speaker 2: the closer coordination we could see with the party committees
29:10
Speaker 2: and individual candidates. The conversation in the aftermath was net
29:15
Speaker 2: benefit Republicans because they have the fundraising advantage. How do
29:19
Speaker 2: you turn this into an advantage for you?
29:22
Speaker 10: Well know, we saw this coming. Republicans have been trying
29:27
Speaker 10: to rig the system. They know they're losing, and they've
29:29
Speaker 10: attacked everything, trying to attack voting rights, Jerry Mandarin and
29:34
Speaker 10: obviously with this case to the Supreme Court, Traditionally, our
29:39
Speaker 10: candidates are stronger fundraisers, their campaigns have been stronger, and
29:44
Speaker 10: Republicans have struggled, and they wanted to get rid of
29:47
Speaker 10: limits so that committees could come in and help invest
29:51
Speaker 10: more in their candidates. And that's exactly what the Supreme
29:54
Speaker 10: Court is allowing them to do. We have incredibly strong
29:59
Speaker 10: candidates running all across the country. We're going to have
30:02
Speaker 10: the resources to make sure they communicate and they're on
30:05
Speaker 10: the side of the American people.
30:07
Speaker 7: That's absolutely why we're going to win.
30:09
Speaker 10: A disappointing decision for what this means going forward and
30:13
Speaker 10: kind of highlights how important it is that Congress takes
30:16
Speaker 10: action on campaign finance.
30:19
Speaker 4: Well, a lot of Democrats snap to attention, it seems,
30:23
Speaker 4: Madam Chairwoman thanks again for joining us D trip. According
30:26
Speaker 4: to what I'm reading here, raise four hundred thousand dollars
30:28
Speaker 4: in the twenty four hours following the ruling, biggest day
30:31
Speaker 4: in more than a year, and twenty percent of the
30:33
Speaker 4: earnings that day came from over one thousand new donors,
30:38
Speaker 4: the biggest increase in new donors in a single day
30:41
Speaker 4: this year. Should we also maybe look at this as
30:46
Speaker 4: the best thing that could have happened to your fundraising
30:48
Speaker 4: efforts in the midterm cycle?
30:51
Speaker 10: Well, people across the country hate what Republicans are doing here.
30:56
Speaker 7: They hate the decision of the court.
30:58
Speaker 10: They want to be able to pick their representatives, not
31:02
Speaker 10: have politicians pick their voters. And more and more we
31:06
Speaker 10: are seeing Republicans in an attempt to do that because
31:09
Speaker 10: they know they're losing, and people are reacting.
31:12
Speaker 7: We saw that and people reacting.
31:14
Speaker 10: Because of the jerrymandering that's gone on when people had
31:17
Speaker 10: to say and write the vote. They've rejected Republican attempts here.
31:21
Speaker 10: And what you're.
31:22
Speaker 5: Seeing now if donations continued.
31:25
Speaker 10: People are standing up, they're speaking out, They're going to
31:28
Speaker 10: stand up, and this is one way they're also going
31:31
Speaker 10: to stand up with their votes in November.
31:33
Speaker 4: I'm sorry to interrupt, but is this wave of donations
31:36
Speaker 4: continuing since that first twenty four hours.
31:40
Speaker 7: I can't tell you.
31:41
Speaker 10: I don't have all the exact numbers more recently, but
31:45
Speaker 10: I know people are pretty outrage ands I won't be
31:48
Speaker 10: surprised to continue to see people respond again. They want
31:54
Speaker 10: to make sure that we have elections, that candidates are
31:57
Speaker 10: running those elections, and that it's not just Republicans using
32:01
Speaker 10: outside money to impact elections.
32:05
Speaker 2: Well, let's talk about the elections that are happening prior
32:08
Speaker 2: to November. What we're seeing this primary season, where we
32:12
Speaker 2: have seen in four instances Democratic Socialist candidates victorious in
32:17
Speaker 2: primaries and in multiple cases ousting incumbents. We could see
32:21
Speaker 2: a few more instances of incumbents facing DSA challengers or
32:25
Speaker 2: challengers younger than them, the likes of Wesley Bell or
32:28
Speaker 2: At Case or Joe Larsen. Does d TRIP plan on
32:31
Speaker 2: spending on behalf of the incumbents in those.
32:34
Speaker 10: Races, Well, first of all, you're talking about a handful
32:37
Speaker 10: of races in very very bright blue districts. Sure our
32:41
Speaker 10: focus is on those purple districts, So those are the
32:43
Speaker 10: ones that are going to decide the majority. The D
32:46
Speaker 10: tripleC is working with in our opportunities across the country
32:51
Speaker 10: to flip seats to take.
32:53
Speaker 7: Back the House.
32:54
Speaker 10: Those purple seats absolutely have incredible candidates running who are
33:00
Speaker 10: actually winning across the ideological spectrum. To bring folks together
33:04
Speaker 10: to win in these swing districts. That's our goal, make
33:07
Speaker 10: sure we take back the majority.
33:09
Speaker 7: And that's where the detrip is focused.
33:12
Speaker 4: We have been hearing from a lot of Republicans, as
33:15
Speaker 4: you might imagine a congresswoman, about these self described democratic
33:21
Speaker 4: socialists as a national trend, and they're celebrating these wins
33:25
Speaker 4: as they come along in primary season in terms of
33:29
Speaker 4: the Progressive Change Campaign Committee, though they're embracing the criticism
33:34
Speaker 4: from Republicans and in fact trying to turn it against them.
33:37
Speaker 4: You might have seen this new ad in which they
33:39
Speaker 4: highlight Speaker Mike Johnson his comments about Progressive Democrats as
33:44
Speaker 4: socialist Democrats, and they just flip the words and say, yeah,
33:47
Speaker 4: that's exactly who we are.
33:48
Speaker 5: Here's a taste of the ad that's running. They put
33:51
Speaker 5: this on paper.
33:52
Speaker 12: They're saying the quiet things out lock, replace the two
33:54
Speaker 12: party system with a multi party democracy.
33:56
Speaker 7: YEP.
33:57
Speaker 5: Expand the House of Representatives. That's right.
34:01
Speaker 4: You see progressive candidates saying yep, that's right when he's
34:05
Speaker 4: sending the barbs. I just wonder when we hear so
34:08
Speaker 4: much about the role that HOCKEYM. Jefferies is playing endorsing
34:11
Speaker 4: candidates there in some cases, and I realize to your point,
34:13
Speaker 4: it's only a handful of races. Why not just embrace
34:16
Speaker 4: them and say that there's a big ten in the
34:18
Speaker 4: Democratic Party, maybe enjoy some of the energy behind these campaigns.
34:23
Speaker 10: You know, we are focused on making sure we get
34:26
Speaker 10: done the work of the American people. People are having
34:29
Speaker 10: their say in elections across the country, but the math
34:33
Speaker 10: for the majority so that we have the gavels to
34:35
Speaker 10: get things done runs through purple districts, and that math
34:39
Speaker 10: has not changed. We have forty five districts where we're
34:43
Speaker 10: on offense across the country to flip seats and across
34:46
Speaker 10: the board, strong candidates talking about the issues that matter,
34:51
Speaker 10: winning in seats where people have many different political views.
34:55
Speaker 10: In fact, these generally are seats that Donald Trump won
34:59
Speaker 10: last well, we won fourteen of those seats in twenty
35:02
Speaker 10: twenty four with Democratic candidates. We're winning across the country
35:06
Speaker 10: and we're focused on the issues that matter, number one
35:10
Speaker 10: being the economy and the challenges that families are facing.
35:14
Speaker 2: Well, your point is well understood, Chairwoman, on focusing on
35:17
Speaker 2: the purple swing district. So let's take one of them
35:19
Speaker 2: as an example, New York seventeenth, currently held by Republican
35:23
Speaker 2: Congressman Mike Lawler. We had him on this program the
35:26
Speaker 2: day after the New York primary when we discovered or
35:29
Speaker 2: learned that it's Kate Conley. He would be up against
35:32
Speaker 2: someone who is not a Democratic Socialist who could be
35:34
Speaker 2: described as more moderate. That is something he disputed, and
35:37
Speaker 2: he said, look, she doesn't disagree with many of these policies.
35:40
Speaker 2: Does it make it harder for d trip four candidates
35:43
Speaker 2: in the Purple district that they're going to inevitably by
35:46
Speaker 2: their Republican opponents be compared to the Democratic Socialist movement
35:51
Speaker 2: and being asked to disavow those policies doesn't make your
35:54
Speaker 2: job more difficult, even if it isn't directly impacting the
35:58
Speaker 2: candidates those races that they may not be Democratic Socialist
36:02
Speaker 2: candidates but are still going to be lumped.
36:05
Speaker 8: In with them.
36:06
Speaker 10: Well, I don't think anyone's going to be confused. Kate
36:09
Speaker 10: Conley has a strong record of service to her community, a.
36:14
Speaker 7: Strong record of service in the military.
36:18
Speaker 10: No one's going to be confused about where Kate Conley stands.
36:22
Speaker 10: Mike Lawler, though, has been clearly a rubber stamp for
36:25
Speaker 10: Donald Trump over and over and over again, and he's
36:29
Speaker 10: running scared, and so you know, instead of focusing on
36:32
Speaker 10: the needs of his community, he's going to say whatever
36:37
Speaker 10: he's going to say because he's trying to protect his seat.
36:40
Speaker 10: But just look at his record, his record of being
36:42
Speaker 10: a rubber staff for Donald Trump, raising prices on his community.
36:46
Speaker 10: And we have this incredibly strong candidate who has a
36:50
Speaker 10: record of public service, who's going to win in New
36:54
Speaker 10: York seventeen. And no matter what he says, it doesn't
36:58
Speaker 10: stick because it can't because when people know Kay Conley,
37:03
Speaker 10: they know it's absolutely not true.
37:05
Speaker 7: She cheers.
37:06
Speaker 5: The Democratic Commissional Campaign.
37:07
Speaker 7: Committee we have all across the country.
37:10
Speaker 10: That's one instance of districts that we have across the country.
37:14
Speaker 4: Yeah, congress Woman, thank you for joining us. Susan del Bene,
37:18
Speaker 4: the Democrat from Washington, Happy fourth Congresswoman. We'll see on
37:22
Speaker 4: the other side of the holiday as we track Wall
37:24
Speaker 4: Street as well. On this job's day far below expectations
37:28
Speaker 4: fifty seven thousand when we look at payrolls when the
37:31
Speaker 4: market was looking something in excess of a hundred thousand.
37:34
Speaker 4: Market's keying off of that to an extent, Kayley. But
37:37
Speaker 4: we're seeing this rotation continue with another record likely in
37:40
Speaker 4: store for the Dow Industrial Average. But we're watching the
37:43
Speaker 4: Nasdaq and the S and P five hundred sinc on
37:45
Speaker 4: some tough moves here for chip stocks, primarily the semis
37:48
Speaker 4: are being unwound, and we just wanted to compare notes
37:50
Speaker 4: with Eric Wiener for a moment to talk about this.
37:53
Speaker 4: Bloomberg new senior editor for Equities joins us live from
37:56
Speaker 4: New York.
37:56
Speaker 5: Is this the real rotation this time?
37:58
Speaker 10: Eric?
37:58
Speaker 5: Is it going to stick?
38:00
Speaker 14: Whether it sticks or not, is really the questions. What
38:06
Speaker 14: appears to be going on is sort of a consolidation
38:09
Speaker 14: of the AI trade, where we're really focusing now on
38:15
Speaker 14: the chip stocks, the memory stocks that are part of
38:18
Speaker 14: the build out of the AI data centers, but everybody
38:23
Speaker 14: else is kind of taking it on the chin. There's
38:25
Speaker 14: skepticism about the spending, their skepticism about the spenders, their
38:30
Speaker 14: skepticism about where the money's coming from. Because it's not
38:33
Speaker 14: coming from their cash piles. It's coming from equity or
38:36
Speaker 14: from debt, and that raises a whole bunch of other
38:40
Speaker 14: questions about whether this money is going to end up
38:45
Speaker 14: showing up. So once this happens, and I mean, you
38:48
Speaker 14: also have to realize chips are extremely volatile, so they
38:52
Speaker 14: go through these swings like this a lot, and they'll
38:56
Speaker 14: have there, they'll have down years. Micron has lost money
39:01
Speaker 14: in the last three years. So you know, this isn't
39:05
Speaker 14: all that weird. It's just it's a market led by
39:09
Speaker 14: a very strange group, which is chip stocks.
39:13
Speaker 2: Well, and when we consider the heavy weight that they
39:16
Speaker 2: have in the market, it helps explain why you're seeing
39:19
Speaker 2: a difference in performance between the market weight at an
39:21
Speaker 2: equal weight at S and P five hundred today. Certainly
39:25
Speaker 2: when we consider what we'll have big weighting though. SpaceX
39:28
Speaker 2: of course is now one of the biggest public companies
39:30
Speaker 2: out there. And am I correct Eric that it's going
39:32
Speaker 2: to join at least the Nasdaq one hundred next week.
39:36
Speaker 14: Yes, well, I don't know exactly when, but that is
39:39
Speaker 14: the word okayly eligible, Yeah, yeah, they're going to ease
39:44
Speaker 14: the eligibility. Actually, a bunch of other than the S
39:47
Speaker 14: and P five hundred. A bunch of indexes are going
39:49
Speaker 14: to allow it in. And we're also going to get
39:51
Speaker 14: the listing for sk Heinez, which is another memory chip maker,
39:57
Speaker 14: and they will probably go right into the nas Taq
40:00
Speaker 14: one hundred as well, and that'll keep this rotation kind
40:04
Speaker 14: of going. The question is whether, I mean, like today,
40:08
Speaker 14: we have this upward bias and yet they're selling because
40:11
Speaker 14: of chipstocks. So you know, at what point the cart
40:15
Speaker 14: leads the horse, and the horse leads the cart is
40:19
Speaker 14: really where the market needs to figure things out.
40:23
Speaker 2: All right. Eric Wiener Blomberg, new Senior editor for Equities America's,
40:27
Speaker 2: thank you so much for joining us. And it's fascinating,
40:30
Speaker 2: Joe to see the market trying to figure out what
40:32
Speaker 2: to do with this AI trade at the very same
40:34
Speaker 2: time that there seems to be an active conversation in
40:36
Speaker 2: Washington about the government having a stake in some of
40:39
Speaker 2: these AI companies. Bok and Ai were to go public
40:42
Speaker 2: and be subject to this kind of volatility in the
40:44
Speaker 2: US government would have a five percent stake in that game.
40:48
Speaker 2: Maybe it's not necessarily a good thing.
40:50
Speaker 4: It's worked out pretty well for Intel so far, but
40:52
Speaker 4: that it might be a little bit difficult to duplicate, Kaylee,
40:55
Speaker 4: we should know breaking news, President on truth Social declaring
40:58
Speaker 4: a National Scollops Day, and in fact opening the northern
41:01
Speaker 4: edge of Georgia's bank off Cape Cod to scallop fishing.
41:06
Speaker 4: If you're with us on ninety two nine in Boston,
41:07
Speaker 4: this is a big business story, something we might have
41:09
Speaker 4: more on later on.
41:10
Speaker 2: I would have read that as scallop depends if.
41:12
Speaker 5: You're from New England.
41:13
Speaker 4: Okay, Boston. Thing we'll see a little later on Balance
41:16
Speaker 4: of Power. You're on Bloomberg. Thanks for listening to the
41:22
Speaker 4: Balance of Power podcast. Make sure to subscribe if you
41:25
Speaker 4: haven't already, at Apple, Spotify, or wherever you get your podcasts,
41:29
Speaker 4: and you can find us live every weekday from Washington,
41:32
Speaker 4: DC at noontime Eastern at Bloomberg dot com.