Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business Week, Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
A couple of stocks making big moves today. Shares an Apple fell as much as seven point three percent earlier in this session, the stock on track for its biggest three day sell off in decades. I mean, i'mgoing uncertainty about the Trump Administration's tariff policies. Look a lot can happen in the next ninety minutes, but that's how things
were earlier. Today, Tesla shares fell as much as ten point five percent, extending losses, dropping below a price at which Howard Lutnik, the Commerce Secretary, predicted they'd never fall to again. Dan Ives is watching these moves closely. He's globe ahead of technology at Webbush Securities. Yesterday he cut
his price targets on both of these stocks. He joins us here in the Bloomberg Business Week Studio, Dan, I want to start with Tesla because you are a longtime ball I never thought I would see the day where you became bearish on the stock. But this weekend you lowered your price target from five hundred and fifty dollars to three hundred and fifteen dollars. There are haircuts, and there are haircuts. This is a big haircut. Why'd you do it?
I mean there's two reasons.
One the political damage that Musk has self inflicted between Doge and obviously everything we're seeing play out, you know, along with the Trump administration. I believe it's destructed demand. Twenty percent in Europe, ten percent in the US. Net could be conservative, and I think that's something that's also starting to show up in China, which is ultimately look that's if you look at our new estimates, it's really taken a huge haircut to what China growth is going
to look like. The second thing is when you look at the tariff, tariff's ahead one, there's no way as sure code and the reality that the US Car Company makes cars in the US with all US parts. That's a fairy tale, it's Pinocchio story. And I think for Tesla, and for Musk, it's a moment of truth because you can't be three percent CEO ninety percent Doge and the
brand issues. It's created Tesla into a political symbol and that that is a very, very bad thing, and I think it speaks to what's happened to stop.
Do you see any hope that that image could be turned around? And I asked that not so much in terms of what mus can do, but maybe the question that investors aren't going to start having to ask is whether the company just needs new leadership altogether.
Look, I mean, in the next four to six weeks, he makes a choice, you step out of Doge. You literally now back to CEO of Tesla. You could still be some sort of you know, official unofficial advisor or whatever it may be. But the reality is then the brand damage would be contained.
It would be stitches a black eye? Will it though?
Because it's on him. I mean, it's not just people saying, oh, we think Tesla is a bad car. They're looking at the CEO and they're saying, you know, we think you're you know, from not my words, you're a fascist, you're a Nazi. These are things. These are and this is a taint that you just don't scrub off overnight.
And I don't think you scrib it all. There's no way that you scrub it all. Like you said, there's a permanent brand damage up tire. But here's the key. You continue down this road, then that permanent brand damage it becomes something much bigger. And the shame is that and it's Look, the reason we kept the rating and then downgrade is because I believe in one with Nvidia to the best disruptive technology companies in the world. But
here's the thing. This is to fork in the road for Musk now to make the right decision.
Maybe email him with that as the subject line and see if see if he replies, Hey, do you want to get some breaking news? Apple plants to source more iPhones from India over tariffs.
We're going to talk about that.
Andjustment at the Wall Street Journal is reporting that I want to go back to Tesla though and talk about China a little bit. Shaw me byd the technology that those car companies have among other car companies in China. You've spent a lot of time traveling around the world looking at this technology. Do Americans actually understand how innovative Chinese homegrown evs are no.
And actually it almost speaks broader to even some of the issues that would tell aout in terms of like tariffs to constant that we can meet things here in the US. Look China when you look on the EV side, I mean, China's really front and center, because.
That seems like a huge headwind for TESTAE well.
Especially when it comes to BYD in terms of because thinking about it right now, BYD they're going after Europe, South America aggressively, going after rest of the world at a time where Tesla this should be the time that it's go time that you're going after the rest of the world. But the political damage, the brand damage that US is done self created has it's hurt that issue. So my whole point is is that the longer term for Tesla, this is it's one of those moments where
its future will be determined. A lot of it how must handles next thirty sixty to ninety days.
But this is still a company that gets pretty much happen if it's revenue from outside of the United States's a big chunk of that in China, at least based on the numbers that they end up last year. So if China goes or at least it starts to wither to a much smaller percentage of sales, can he make up those sales anywhere else in around the world.
No?
No, I mean that's why it's the hearts and wungs. There's no When you and I was like, when you look at what's happened in China, and we've talked about over the weekend, all the issues with tariffs and everything China, Whiz it do drives buy more domestic byd over Tesla, Huawei over Apple. It speaks to the broader issue that a lot what's happened here is that the companies that take a moost on the Chin, we'll be Tesla and Apple.
But with Tesla.
Just one last question on Tesla, though, is what's the alternative if I'm shopping for an electric vehicle? And this was the advantage Tesla had for years, Really was there really wasn't an alternative and not a viable alternative. Now I know there are a lot more vehicles out there, ev vehicles out there, but not necessarily at the scale of production. The Tesla had no one careerly for the pricing the Tesla.
Price and look in that, but it speaks to what's so frustrating about what's going on If this was Intel. Look, these are disasters relatives like Okay, the stock is a cheap of fallen knife Tesla. It's about the massive opportunity ahead. But when Musk is doing in terms of it's a self inflicted wound that needs stitches now surgery.
And that's our whole point. It's like, you got made the decision, let's get to Apple.
Shares of Apple right now are lower by about four point two percent. You cut your price target on the stock to two hundred and fifty dollars from three hundred and twenty five dollars. I want to start with the headline that we're getting from the Wall Street Journal. The company plans to source more iPhones from India as a potential fix for tariffs. A big part of your note
has to do with exposure to China. Maybe in the first Trump administration, this would be news that investors would cheer because okay, well, India hadn't been hit with tariffs. It was between the US and China during the first Trump administration with global tariffs, does anything matter?
But that's the whole I mean think about Vietnam. You moved to Vietnam. Vnam's worse than China. And then like when you do about India, it would take years to even make that more than five percent, just given the logistics and the nature of India. You know, in terms of as Apple tries to move some stuff there, Look, no company in the world is hurt more from ones that came out of Trump's mouth in terms of Taiwan
and China tariffs than Apple. Yeah, because you're talking about ninety percent iPhones are made in China, and the reality and even over the way what we got meeking you as it. Here's the deal. If you won thirty five hundred dollars iPhones, we should make them in New Jersey, maybe make them in California. If you like thousand dollar iPhones, yeah, you make them in China.
And that's just the reality.
Well, it raises the question too, is whether Apple really would try to move I mean, do they have enough pricing power where if they have to raise the cost of an iPhone by twenty thirty percent, I mean, I don't know they've convinced people somehow to pay one thousand bucks or more for it already.
But that'd be massive demand destruction. And Okay, my whole point is is that it would take tens of billions of dollars to even move ten percent on the suppot chaet. That would take three years. So that's why the reality right now what's going on in terms of taffs and the reaction investors, Okay, it's untenable and it would be an economic army geddon to US tech industry, in my opinion, is set US tech industry back a decade.
Do you think the White House understands the economic armageddon?
Look, I think it's easy to stand in front of a microphone and I get it politicians talk. The reality is when you spend time walking through fabs in Taiwan Fox con in terms of China, you spend time there and then you come here and you actually think, given our labor for its manufacturing costs of weaver, that we're going to meet that here.
That is just, in my.
Opinion, it's massively unrealistic. And that's why it just speaks to what's happened with stocks because investors they're not this has none the Republican Democrat investors know math in the reality.
Yeah, I'm kind of playing devil's advocate here. But with regards to Apple and its ability to find some transition through all of this, is there a way that they could maybe increase sales outside of the US. And I bring that up because Tim Cook was just over there in China for that big meeting. He obviously toured a lot of other facilities and universities for some reason or another. He seems to have a relatively decent relationship with the
Chinese government politician ninety percent. Yeah, and he's done it right. He navigated the first Trump administration, and I do wonder if maybe we're counting him out that he might find a way to navigate through this.
Look the five hundred billion they announced that getting some sort of exemption here and there. Look, and that's something that investors are holding out for. But the reality is, if you want a body blown an upper cut and cut the knees off of the it might be probably the best technology starward in the world in terms of Apple.
This does it well?
Forgive me, Dan, I want to go back to Tesla because I'm getting a question from a viewer right now who says that Elon's brand damage has been evident for months. Why Did you just downgrade the stock as a result of this?
That's a great question because I believe from everything we're seeing in Europe and the US and deliveries going into two Q that it went from something that was containable five percent set to something much broader. And I believe it was also our view that he'd hold the line start to step back instead he hasn't. So the point is that brand damage, when we model that out into three Q and four QWO, that's us basically modeling out what we believe the brand damage is going to do
to the next few quarters. And look, and I would also say, like it's something where it's become a life of its own and Tesla has become a political symbol and it's a very unfortunate situation. But on but look, it's self inflicted by musk.
We're heading into earning season. At some point they're going to have to address investors directly. I think Tesla reports in mid April and then Apple not to May. First, what do you think the CEOs and the CFOs for that matter, can actually tell investors to sort of calm them down.
No company is going to give guidance, in my opinion, during earning season. A guy, I'd be shocked if any company gives God, if you want to play blindfold the darts look, and I think the reality is actually blindfold dogs actually is pretty fun. Beside the point it's look, I think they're basically going to have to give some sort of guard rails. How they're going about it, How are these scenario planning? And that because invest want to unders in worst case bea'st case. Best case.
Dan, i'ves Global head of Technology at Webbush Securities.
Thanks so much for coming. Great to be here, Good to see you.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five e's during Listen on Apple, Karplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.
I got the HCPI function on the Bloomberg terminal fell as much as four point seven percent today rose as much as three point four percent. As we just heard from Charlie Pellett. We're down right now by about four tenths of one percent. Lots of volatility, to say the least, and that's exactly why we wanted to talk to Eric Wiener.
He's Bloomberg News Equities Team America's team leader. He's the author of several books, including What goes Up, An oral history of Wall Street from the Great to Press through the Internet Bubble. In the nine to eleven attacks, he joins us from just outside, Well, no, you're here today.
I'm here. Oh my gosh, he's back with us.
On Friday, he was remote and we relied a lot on you, and we're doing that again because when you wrote that book What goes Up, that time span included Black Monday. A lot of people over the weekend. The chatter online was a little concern that what we're going to see on Monday is going to look a little bit like what we saw in nineteen eighty seven, the volatility. Yes, maybe the massive crash. No, I would say there was
in eighty seven. There was a palpable sense of things coming on Glude and then on the Sunday before, well it was the Saturday and the Sunday before, Targery secretary at the time, Jim Baker came out and made a couple of remarks.
That really scared the market. So when you came in on Monday morning, when the traders came in on Monday morning. They were looking at it going, oh my god, you know, things are going to blow up here. It was less clear. I mean, I remember I was looking at futures last night. They came down a lot, but they weren't down as much as say, China was, So there wasn't this sense that like the US was just going to bottom out. If anything, it was going to be like more of
a global spread. So Black Monday was kind of a more predictable route, and then it had to be lifted out by the Fed. This was something where you know, it's it's kind of building.
What does that tell us then about the sell off that we're in. If this is just gradually building, we don't have one Black Monday? Does that mean.
That's exactly it? So the concern, bizarrely, the concern is that things are actually moving fairly normally, which means we haven't hit a bottom, which means we aren't seeing panic or capitulation, whatever word you really want to use. What you are seeing is people desperately wanting the President to back off of tariffs. So as soon as that rumor hit,
we went up. You know, we moved, as you pointed out, you know, eight basis eight percentage points, so wham swing up and then it gets taken out because that's not exactly true. But there is a very simple cure. Like
Black Monday was, there were systemic problems. There were people who were missing right, Yeah, there were people who were going to have This is what I was watching for last night, was like margin calls and situations where big hedge funds had been caught off sides weren't going to be able to make the payments, and now you have counterparties that are wondering where the money's going to come from. That is not the case. Now they're just begging in Trump to get rid of the tariffs. In other words,
like you said on Friday, this is orderly. This is orderly. It's and the orderliness of it is what's scary to market pros because it's when things get disorderly you sort of have that catharist we're still waiting for the caiss The difference is that this was and you know, it's been pointed out by many, many Wall Street people other than me, that this is caused by one thing exactly.
And I think, you know, one of the criticisms I've see of this h on TV. Our markets guests we speak to outside of the building online, is that they're saying this is self inflicted.
Yeah, it's like shooting yourself in the foot. Now, what Trump? The question is what the goal is with these tariffs. So if the goal is to reshure industry, that's going to take a long time.
We had Dan Ives from Red Bush sitting in that chair right there, telling us an hour ago that he spent time in Taiwan. He's seen the way that these devices are made, He's seen the factories. He said, that's not happening in New Jersey. No, and it's and it would take forever to do.
I mean, there's a reason why they moved there in the first place as well. And so if we want cheaper goods, that's part of this. There are a bunch of different things that go into the creation of our you know, our economic flow. This is like, what are we what are we trying to do? Are we trying to change the behavior of other countries? Are we trying to behave change the financial system itself? What's the goal?
I also think of you know, if I were running a business, what I necessarily start building a factory in the US and completely pull my operations from offshore, only to then have potentially these tariffs reversed slightly and then you already started building.
Do you think that's a good point? Is that that's this is all in the this is going to all be in the earnings reports. Because what's going what you do, if you're a CEO right now is sort of stand pat So growth is going to be more challenging. The idea of expansion becomes should we or shouldn't we? I mean, you have to realize that there's a reason why manufacturing move to Malaysia, move to Vietnam, and that's because China
has become more expensive. You know, because because as economies grow, their employees expect more pay so they go to the lowest producer. So the idea that like we're going to bring everything back here, that's a multi year project with dubious results and flies in the face of capitalism as we know it. If the idea is to get countries to change their behavior and negotiate with the president, then we'll see what we can do.
So when Emily came over here twenty minutes ago, the S and P five hundred was in the green. It's now down eight tenths of one percent. Why is there such a lack of conviction directionally with today's trade.
Because we don't really know what's going on. There was there.
Conviction based on saving the white House port cold water on Oh yeah, there was, Well, there was conviction when we came in and we were down like four percent right away or whatever it was.
And then there was conviction on the upside because what that leak was was something that the traders have kind of been expecting, so that kind of played into their priors and suddenly it just went whoosh, everything went up. But the right now, it's hard to know where we're going to go next.
What you're referring to it is actually the most read story on the Bloomberg terminal in the last hour. I encourage everybody to go check it out. Jess Mett and Bailey Lipschultz, Eshra Day. It's called this is madness. The fifteen minutes that rock to stock market desks.
We got to get these people on. At just after ten am, shouting erupted on the Seabert trading floor in downtown Manhattan. I won't read the rest of the story, but that is the tough it's kind of wild.
We were going through it as on the team as it was happening. I mean it it was happening all around us, and it was wild. We were yeah, go ahead. Well I'm wondering.
I mean, you've obviously seen a lot of market downturns, a lot of single day crashes. How does this one compare to history? When you think about this sell off seems to be all focused on one very specific event, whereas I don't know, I think the financial crisis obviously there wasn't just one headline that traders were all counting.
On or waiting for.
But this is so specific to just one.
So the the scary thing with crashes is when credit is heavily involved, When you have your traders concerned that debts aren't going to get paid off, or that you know, rates are just you know, tumbling or rising. This is not a credit meltdown. It's it's an equity meltdown. And it's because stock prices went way up on AI speculation, and then if growth is going to be paired back, which is what tariffs would probably do, then you have
to take out some of this. So it's not as scary I would say, as when you look at the global financial crisis in like eight nine, there was a sense like the knife was going to keep falling and if you grabbed it, you know, it was going to slide right through your hands and slice your hand off. This is not that kind of thing. This is more like it actually could be stopped by one guy. Like that's and that's different.
A weird thing happened to me this weekend Eric and I was with. It was when I was with a lot of friends who are about my age. You know, we're kind of getting close to middle age. Think not thinking about retirement, but people who have kids saving for college, that sort of thing, and they started talking to me about the stock market. These are normal people who don't work in the industry. I have a good friend who's trying to sell everything right now because he is scared
that something fundamentally is shifting in the economic landscape. He's the second person I've talked to who's expressed concern to me that those words this time is different. What would you say to those folks, having studied other crises, I.
Would say that they're the contrarian indicators. That's actually what we want to hear. It's the same thing going up. The famous story is Sidney Weinberg, who at the time was the head of Goldman Sachs, getting tips from his shoeshine guy and he walks back into Goldman and he's like, sell everything because this is just going to be a nightmare.
And so when you start seeing people who normally aren't engaged with this stuff having very strong convictions about where things are going to go, they tend to go and the other way. There really isn't a systemic problem here. That's the thing.
It's not a systemic problem, he argues with the markets. He thinks it's a systemic problem with globalization and with the president changing the world order that he grew up with.
I just don't think that Wall Street is ready to give up the global order. And the global order is global like, so it's not just Wall Street. China doesn't want to give it up, you know. So people want the financial markets. They want the financial markets to work, and the question is how and when that will start happening. But I don't see us reordering away from capitalism because even in the trade landscape, you have other countries that
are trying to band together to create trade alliances. On their own without us, So this genie is out of the bottle.
Ericquener, good to see you, Thanks so much for joining us. Really appreciate you taking the time today.
Happy to be here.
This is the Bloomberg Business. Listen live each weekday starting at two pm Eastern on Applecarflay, and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play.
Bloomberg eleven thirty.
Lacross asset team spent all weekend working on it. It's about how Wall Street is just collateral damage in Trump's trade war. Bloomberg News Cross Asset reporter Isabelle Lee is part of the team that worked on the story. She joins us here in the Bloomberg Interactive Brokers Studio. Isabelle, congratulations on this story. I know a lot of work went into it. I just want to start a big picture the investor class. It was a class that I
think was served well under the first Trump administration. It was optimistic that it would see the same this administration, and it's not at all happening.
Yes, exactly. We actually missed Emily. If Emily was around her. She would have been part of this story. But Emily and I are our seatments, and I bug her way more than I should have. So exactly, and this is what you call the wealth effect. You know, the past two years, investors were all feeling flushed, would check your four oh one k every single day because markets were up. It's up twenty percent for back to back two years. And then now please don't check your four oh one
k because we're seeing the reverse wealth effect. And a lot of the people that we talked to over the weekend we're saying that this has real implications. It will ripple throughout the economy because if you see your stock, stocks or whatever your investments edging lower, it will really impact how you behave. You won't spend enough, maybe you'll hold off from that appliance, you'll hold off from that vacation.
And companies will also maybe lower their capex. And at the same time, there could be an argument that you know, only fifty percent of Americans own stocks, but that still half of the country, and for those average Americans, their portfolios on average are just around the retirement especially around two hundred plus thousand. There was a study on that and twenty percent of that is still significant. It's forty thousand, and that is your entire nest egg. We're not even
talking about billionaires like Elon Musk. It's the normal, average American. So it affects you.
What was the general vibe of the portfolio manager's hedge fund investors that you spoke to over the weekend. Were they were they angry? Were they confused? Were they looking for opportunities in the marketplace?
Definitely angry, definitely frustrated. And one Jay Hatfield, CEO of Infrastructure Capital, was saying actually that he wasn't that much frustrated with Trump. It was more Scott Besson because they were expecting more from him, given that, you know, he came from the industry. But some were also really shocked because I think this was above what a lot of people expected. This was so called worse than what they expected.
And then what do you do? They say, you get over it, and then you adjust your portfolio.
In terms of assets that the president watches, we know he used to like to talk about the Dow and the S and P five hundred and equity market records. You and the team write about different assets that he's got his eye on bonds, especially or treasury, I should say, and then also on commodities.
Yes, there's that, and actually that's new because usually before it was just the doubt that he was really looking at. And there were reports over the weekend that even Fox News removed the doubt ticker, which was a first in history. I've read that, but I need to fact check, so I probably shouldn't have shared it. But it's out there. But now Trump is also looking at ten year treasuries and oil. So as stocks creator those also moved violently,
they sank basically, and he's also looking at that. But we also have him saying that the patient has lived. You know, this is short term pain, but you can interpret that phrase in many different ways.
It's well, you've done a lot of work over the years about the wealth effect and how it's this idea that when the stock market goes up, people see that their portfolios are doing well, so they feel good and then they go out and spend. And you wrote in this piece the rich who own most of the shares most of the stocks, that ten percent class that you mentioned him also count for roughly half of the country's
consumer spending. And I thought that was really interesting that, like these people that wanted Trump in office because he would support Wall Street also are a big part of consumption. And now I gues see economies getting a double whammy exactly.
I mean, not to get into politics. Also, I can't vote. I always tell Emily that. But it's interesting because these people are the ones who are driving much of the consumer spending. I mean, maybe the average American they're finding it tough. Every time I go to the grocery, I'm just shocked at my bill. But the rich people still buy. I mean, they still buy jewelry, they still buy gold. You see them still buying Lambeau, which is a joke we say in the crypto world. But they're still out
there spending. But maybe after this weekend they may not. But yes, you're right, America is largely a consumer drive an economy, and one can't really doubt whether, like I feel like you can't ignore this anymore. They will be affected no matter how rich you are. Probably, or I mean maybe I wouldn't known.
Isabelle Bloomberg news cross After reporter always great when you join us. Check out her story. It's among the most read on the Bloomberg terminal. It is today's big take Wall Street. It's just collateral damage in Trump's trade war. This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you get your podcasts.
Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App.
You can also watch us live every weekday on YouTube and always on the Bloomberg terminal