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A lot to get to. We want to bring in Max Chafkin, senior reporter at Bloomberg business Week, co host of the Everybody's Business and Elon In podcast so much more, a very close follower of all things Elon. You've been listening along with us. Elon kind of not leaving though, no, not leaving.
And you know, I think those of us who follow us closely kind of expected this to some extent. I mean, Trump signaled it last night in his post on truth Social Also, you know, for all this talk of Elon getting pushed out or making his exit, we've seen those headlines. There have sure been a lot of events at the White House or at Trump related things over the last month. They brought up the presidential travel musk joining Trump on
this tour in the middle East. We've also seen these kind of valedictory This isn't even the first valedictory kind of appearance. There was a cabinet meeting I believe last month. The thing is Trump needs Elon Musk. The Republicans need Elon Musk. He was the most the biggest donor to Republican candidates or Republican campaigns in the twenty twenty four cycle.
They are certainly counting on him in the twenty twenty six cycle and having him on side, having him a part of this, having this show of unity is helpful to the president in helping to bring Republican members of Congress around to you know, to pass the big beautiful bill or anything else, you know. On the other hand, Musk also needs Trump. He for all the reasons that made him an enthusiastic supporter of Donald Trump. I mean, SpaceX is a large government contractor, Tesla is a highly
regulated company. It goes on and on. Having this close relationship is very valuable. So I think it's in both their interests to keep this going. It is clear though that Elon Musk's kind of connection to Doge, and I think to a greater extent, the kind of prominence of Doge. The vision of Doge is this kind of Elon Musk driven maximalist for netic getting in there and breaking stuff that feels like it's sunsetting.
And to be fair, there have been numbers put out by the administration and others about you know, I think Elon specifically said that he still expects to hit that I think a trillion dollars in cuts over the years or something, some large numbers. But the point is everybody's done a lot of reporting, including Bloomberg that really questions some of the numbers that have been out there and what ultimately they will achieve in terms of cuts. Yeah.
Well, and even if you take what he said right, it's a trillion dollars over an undefined time period. A big difference from where Elon Musk was, you know during the campaign when when during an event with Howard Lutnik he said two trillion a year that was then downgraded to one trillion. And and so, you know, by his own admission, and I think anyone who.
Was familiar with the working of the federal government.
Could have told him this. There were experts certainly at the time saying this is going to be very hard you know that that was probably an unrealistic goal. Of course, Elon Musk is all about unrealistic goals, right, That's kind of his thing. He likes He even by his own account, you know, likes to set these audacious goals. You know, even if you fall short, even if you're a little late, it's still impressed.
If you get a black guy for me five year seven.
Yeah, he's going to argue that, you know, one hundred and sixty billion, which is the claimed figure, is significant.
It's it's not a small number.
It's just it's just so far off from where they were and when you look at you know, the deficit projections from even from this latest spending bill, right, it's not a huge number.
And Musk even pointed out that he wants to focus more on his businesses. I mean, if you're looking at Tesla's stock down close to thirteen percent a year to date. But Trump said himself that Musk will be back and forth. So how would shareholders and investors in his companies feel about this?
He's what Elon Musk is walking a line here, and it's even there's even sort of some kind of contradictions within the movements of the share price, because of course, the stock went crazy up after Trump was elected. The story we heard back then was, well, the stock is going up because Elon Musk is going to have all this access, and then we reached a point where the stock went up started trading up because Elon Musk said
he was stepping away. Now I think the truth is Tesla investors are very much on board with pretty much whatever Elon Musk says. They believe that this is a shareholder base that is different from most publicly traded companies. There is a level of belief in the CEO that is greater than a normal company. They are trusting that Elon Musk can walk a line that he can simultaneously
focus on all these companies. He's bringing five companies at the same time while maintaining his role as we heard just now as an advisor.
I mean, there was a little bit of a shift there.
You heard a question about is he going to be involved twenty four to seven with sum It was a claim that Elon Musk made on Twitter just.
A few days ago. Elon Musk didn't.
Respond to that directly, but he did say I will continue to be an advisor and a friend. I hear that, and I think this is you know, this relationship as we you know, as we heard from the President and from Elon Musk, it will continue.
Really fascinating stuff. Max, thank you so much, really appreciate Max Chaffkins, Senior reporter at Bloomberg business Week, co host of the Everybody's Business and Elon Inc. Podcast. Check it out because they really do follow the day to day gyrations of all things Elon.
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We did hear from President Trump just from the Oval Office. He did say he expected to speak to Chinese President Xi ximping after accusing China of violating in agreement with the United States to East tariff. So we did see kind of a ratcheting up of tensions between the world's two largest economies that was initially putting pressure on some of the trade. But it didn't seem that some of that eased as we did hear a comment out of the White House saying that he expected to actually speak
to the Chinese president. But I have to say geopolitically, so much going on. We've got the strained and evolving US China relationship, the Russia Ukraine War, how that may end, when it will end, the Middle East, Israel and Hamas, Greenland and more. Everyone is kind of looking at maybe what is the new global world order going forward? And eighty years later, it's hard not to wonder if the world has really kind of headed toward another Yaulta conference
and a carving up of our world. Our next guest actually wrote about it Fornerfairs magazine that caught our attention. It's great to have with us. Monica Tuft. She's professor of International Politics at the Fletcher School at Tufts University. She's taught at Oxford University's Blovotnik School of Government, Harvard University's jfk School of Government, and she spent four years in the US Army as a Russian linguist. And she joins us from Medford, Massachusetts. Monica, great to have you
here with us. How are you.
I'm terrific. Thanks for having me.
Carol and Jess, Well, it's good to have you here. There's so much coming at us domestically, but also continually geopolitically. The President just talking about various parts of the world, whether it's Russia, Ukraine, whether it's about China and trade just from the Oval Office. Is the world about to be carved up in a new way, just like we saw after World War Two?
It's a question still. I think we have to watch it.
I did write this piece, and it's a speculative piece in the sense of using history basically, of looking at prior history to try to understand and what's happening. We do seem to be in a liminal moment right now where you have leaders who are talking about expansive aims. And when I talk about expansive aims, it's not only economically,
but it's politically. So you have President Trump coming in and talking about Greenland, maybe it would be nicely Greenland to be part of the United States Canada and then taking control over the Panama Canal. And then you have Russian President Vladimir Putin actually going in and taking Crimea
and then four other provinces. And then of course we know China's president she would love to reacquire Taiwan, and they seem to be in a position right now politically to be able to talk about this and you know, this kind of language of expanding their nations geographically, and each of them seems to have sort of ideas that this is somewhat desirable. So the question is whether they succeed right Putin is not succeeding right now. Taiwan has not made a I mean, China has not made a
play for Taiwan. And President Trump it's not clear that he has the capacity or the full design to take great Land Canada, so it's a question mark.
Still.
Well, this concept of professor toft of spears of influence or spear of influence not a new one. It's been around, they change, right, So I don't know if we think about a new carving up, is it a good thing or a bad thing or tbd.
I think it depends upon your perspective. So for the states that are managed to in the statesmen that manage to establish a new sphere of influence, it.
Could be a good thing.
But for the states that are sort of gobbled up within that sphere, it's not such a great thing because basically those larger countries, what they're doing is they're using their advantages in military power, military might, economic leverage, and diplomacy right to secure those spheres of influence, get control of those geographic areas in order to exert more control economically,
militarily without necessarily exercising formal sovereignty. And the question is is over time, are they benign so do they do good right? Will they help develop up the countries that they sort of move into, or are they maligned?
They are they repressive? Generally speaking?
When we were living in the world between nineteen forty five and let's say nineteen ninety one, during the Cold War period, we had the liberal West right and that was one block, and that was our sphere with Western Europe, and then you had this sort of Warsaw Pact, and within the Warsaw Pact that was considered the Soviet Union sphere, and it didn't go so well for the East Europeans, which is why today or in the post nineteen ninety period,
the post Cold War period, many of those Eastern European countries try to get into the Western side, right, into the West sphere, and the United States was the great stabilizer. What's kind of tossed this all up in the air at this point is two things. The first factor is Russian President Vladimir Putin going into Ukraine and actually using force to do that. And then secondarily you now have a US president talking in these expansive terms about possibly
expanding United States territory. So so it does seem to be a situation where there is change, uh, you know, afloat uh. And and whether it's a good or bad thing, it's a it's I think we need to suspend judgment. But I will tell you it tends not to be a good thing. In fact, I could have you know, titled the piece spheares of war, right, because what happens is you get up into those buffer areas between where the different spheres rub up against one another, and who gets to control what part?
How deep do you go into each other's sphere of influence?
How does China play into this?
It's a great question. And the thing is is, if you think about President She, he's very conservative in his movements.
Right.
Basically, the President She wants to keep the Chinese economy, economy humming, right, so he has to keep the middle class happy, keep the jobs, make sure that the real estate market doesn't collapse. And so for him, the economy is everything, because it's the legitimacy in which the Communist Party and President She built his power. On the other hand, you have this thing looming in the background, which is nationalism. And Chinese, just like the Americans, there's nationalism and they
believe that Taiwan is part of Chinese territory. And when you've got another major power of the United States supporting Taiwan, which the Chinese see is theirs, that leads to tensions. And so the Chinese, on the one hand, under President She recognized that war is very costly. We understand that war can be quite costly. Yet on the other hand,
there's these impulses that they need to expand economically. Oh and by the way, politically national In terms of nationalism, it would be nice to reacquire some territories that they see as rightfully their own.
We are talking with Monica Toft. She's professor of International politics at the Fletcher School at Tufts University. We're talking about an article that she has written for Foreign Affairs entitled the Return of Spheres of Influence. Monica, I want to Professor Toft, I want to relate it to the Bloomberg audience and I think about every story, there is I feel like a money component to it, right, a
market component, economic component. So if indeed we are seeing up a new carving up and as you said, you know, it depends on kind of how it gets carved up. But should we assume that there are implications then for financial markets, for economies. And I do think about this
US exceptionalism where it seems to be waning. We're talking about that a lot more today than at the beginning of the year January first, when we talked about US exceptionalism rating supreme and that applied to financial markets.
Yeah, I mean it does.
It does matter quite a bit for the economy and for trade and few exceptionalism. And I think what's happening the under the Trump administration is they're sort of tossing that exceptionalism further up.
In the air.
Right, So you know, we do have sort of now competing powers. China has risen economically, and what's so interesting about the Chinese case is the United States helped that through the nineteen nineties and early two thousands until all of a sudden we have the crisis in two thousand and eight and China and actually both China.
Under She and Russian President.
Putin look at that two thousand and eight crisis and think maybe that Western capitalism isn't so great, maybe the American dollar isn't as secure as we thought it was.
And so they started, you started.
Seeing sort of the decoupling and trying to sort of vary out and diversify their economies a little bit more so.
Economics is absolutely critical to this story.
But I think, you know, it's interesting. I'm now, you know, talking to people about political risk. It used to be geoeconomic risk, right, and now people are thinking, wow, politics really matter, And I'm thinking, of course they do.
I'm a political scientist by training.
But when you have leaders making major decisions about tariffs and trade and who the rival is, right, then you're going to have changes in the economic market.
We'll leave a couple of minutes left. I want to ask you if, indeed, when we see some end to the Russia Ukraine war, if Ukraine has to give back or let go of some territory, and that is certainly seen as another win in terms of President Putin expanding his territory again after that initial annexation of Crimea. That sends a very big message right to the world in terms of great powers being able to take land.
Yes, what it does is it validates the use of force, right, So it basically says, if you use force, then potentially you're going to be able to keep the territory that you.
Have actually conquested and now occupy.
But you know what I want to do is I'd love for the audience to think about sort of extending their time horizons.
So in the shorter term of the.
Medium term, it may be the case that Ukraine may have to modify some of its territorial you know construct right that the nature and the size of the state. But over the longer term, you know, Putin is not going to be in power the whole time. You may not have such sort of a hypernationalist in power, and Ukraine may be able to renegotiate or get that territory back, maybe by having a referendum down the road and having some you know, proper electoral processes that allow the Crimeans
and then those four provinces the folks there. So it doesn't necessarily have to be seen as a done deal.
Yes, in the moment, and would be quite painful.
Again, I was talking about Chinese nationalism right, Ukrainians and nationalists right, This is going to be very painful right for the country. So yes, you know, Ukraine could be left in a rump state, but what I'd say is over the longer term they may be able.
To get that territory back. It's happened before historically.
So it's interesting. I mean political changes in governments, whether it's Russia, the United States, China. I mean, these things, as you say, kind of are going to impact things more longer term. Monica, Thank you so much. Monica Talk, Professor National Politics at the Fletcher School at Tufts University, joining us from Medford, Massachusetts.
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Heky everybody just about eighteen minutes, coming up on the close on this Friday, wrapping up the day and the trading week overall. Just heard from Bill and Charlie. We're definitely I said a rally, but I met earlier like rally off our lows, but we're still just down about two points on the S and P five hundred and just down about forty three on the NAWS DEAK one hundred, but much more positive than we were earlier in the session.
That's right, and it looks like the S and P five hundreds still on course for its best May since nineteen ninety carousel. We'll see if that can hold through four PM.
Thirty five years. That's a long time, all right, Let's get to it. Tyler Rosinlicht is with US portfolio manager, head of natural resource equities at the publicly held investment from Cohen and Steak years. He is here in our Bloomberg Interactor Broker studio. Keep in mind the firm has about eighty seven billion in assets under management. Tyler, you mentioned you reminded me it's been a while. Good to have you back. Just let's start broadly, big picture, your
investment thesis and focus. Talk to us a little bit about it, especially against the backdrop of you know, every day we're following news out of Washington and what kind of impact that has in policy and ultimately industries and corporate earnings.
Well, thanks so much for having me. I guess there's kind of two pieces that I can talk about. One is the infrastructure side and one is natural resource equities, and I think both of them are really well positioned today. You know, I'd start with infrastructure. You know, I think there's a lot of uncertainty out there, and every day we wake up to new news that's causing a lot of concern.
Right.
What we like about infrastructure is it's really predictable, you know. We think about it as a lower volatility downside protected asset class. It's the stuff that you have to pay for as a consumer. It's what helps make the economy run. So we've seen a lot of interest in infrastructure, and it's very sensible to us.
You have a lot of energy companies in that fund specifically.
So within infrastructure, it's just utilities and then pipeline companies. For us, it's really the present is truly the infrastructure, just the infrastructure. Now we have natural resource equities as well, which invests across the energy value chain, metals and mining and agribusiness. That's also seeing a lot of interesting things today, just given all the volatility that we have.
So how do you read with everything going on with the economic data to the back and forth with the trade headlines. How do you use those types of stories to then try to figure out what the best investment thesis is.
Yeah, let's start with infrastructure. So one of the unique things about it as an asset class is the risk that really keeps us up at night is regulatory risk and changes to regulation, changes to policy that can be on the national level. Are we going to potentially privatize Amtrak? What that could that mean for us as investors? Or on the more local level, so is the Utility Commission going to change the rules of the game or the
returns for a local utility? So our focus a lot more nuclear are allow more nuclear, which we're really excited and bullish on.
So seeing the President on some executive orders to wrap that up in the.
Yeah, I'm tuss that's really a good thing. Like we think we're in an energy deficit globally, we think there's this tension between trying to find decarbonization efforts but also have predictable baseload energy. Nuclear to us is a great example. It's going to require a lot of government support and so making sure that we can understand what's going on from a policy perspective is what's going to drive investment opportunities for US?
I am curious in this fund. I'm just looking at year to date. I think it is up. I'm just looking at here. Is it up? About? Why am I not seeing this number?
Probably kind of like mid single digits? Called it seven or eight percent?
Yeah, okay, Well, I just think about in terms of the market volatility that we've been seeing, is it have you been adding? Have you been subtracting? Like I'm just curious how like moving in and out?
So I'd start with the investor appetite. We've definitely seen a lot of investor interest in infrastructure in particular. Again, certainty is really high, and folks are looking for ways to get equity like returns but with a little bit less volatility, and that's what infrastructure does. Clearly, sort of there's a lot of news out there on we need more infrastructure development, how do we finance that? And listed companies in particular benefiting for US. I'd say we've been
somewhat defensively positioned. We think sort of there's concerns around the macroeconomy, things like freight rail volumes and so forth are a little bit less predictable. So we've definitely moved I'd call it like a four and a half or five on a zero to ten scale in terms of risk on risk off, which is just kind of balanced. There's some concerns out there, but we're not super concerned, and we just are trying to find the right stocks and sectors today.
What do you think of the hottest picks within infrastructure if you're looking kind of more within groups or maybe more specific companies that are listed.
Yeah, nuclear to us is really interesting. You know, we invest in.
That everybody's kind of energy the utility because of the data, you know, I'm thinking about all the AI and the data and the energy needs or was that more it seemed to kind of supercharge it, if you will, But I'm just curious if it was kind of circulating anyway.
I think that's part of it.
But it goes a little bit beyond that, which is, we think the world needs more energy, and we want energy that is, you know, good for the environ mint.
But we all see the nuclear waste well for sure, for sure.
We went to figure that one out, but we also want it that's predictable and what we call baseload you know the problem with a lot of renewables is that they're intermittent, and when the sun's not shining, the wind's not blowing, they don't produce power. Guess what if you're a data center CEO, that's a big problem. You need to make sure that the powerms stay on. So nuclear to us is like the one resource that serves both masters. It is decarbonized. Yes, there's a spent uranium with which
to deal with, but it's also baseload. It runs at very high capacity factors at very low variable costs, and I think people are saying, hey, we know we need the energy. This is the sort of best of the worst, if you want to think about it that way, And that's why it's coming back in vogue.
What about commodity investors, because I know you're looking at kind of the performance of real assets now versus how they would have been the last decade.
Yeah, we're really excited about the commodity cycle, and we're really excited about the natural resource equity cycle as well. I mean, we've thought about it as we've exited this period of abundance, which was kind of the two thousand and seven A twenty twenty period, and we've entered what we call the air of scarcity. Elite demand for commodities and materials is pretty strong. We've underinvested in the supply
side for a really long time. Commodity producers, you know, if you can find the right ones that aren't going to sort of miss in terms of their production profiles, they're really cheap, and we think marginal costs for what they produce are going to rise and that's going to be good for them.
Son if it's more Canadian investors or US if you're looking at the commodities aspect, it.
Really depends on the commodity you're talking about and sort of the investment. Like, for instance, take oil. We're actually pretty bearish oil, but we particularly don't like US shale producers because of the depletion right they see massive declines and volumes every year. We like the Canadian oil sands producers because they produce with a lot less sort of base declients.
So generally speaking, the Canadian.
Economy is a lot more commodity centric, but I think you can find good opportunities in both places.
Let's talk about a couple of companies you do like in particular, and one of them is trp TC Energy Corporation. Tell us about this one.
Yeah, just very broadly speaking, it's an energy natural gas pipeline company.
Very predictable.
You know, they're ebit that when they say what it's going to be at the beginning of the year tends to be what it is at the end of the year. We think demand for natural gas is going to keep growing. We think data centers and everything else are going to require more investment in gas pipelines. They've got a really good footprint, and they do own some nuclear assets in Ontario that we think will sort of see some life
extensions that could be good for them. But it's a very predictable way to play energy infrastructure across North America.
Canadian company looks like it's up about almost nine percent so far year to date. One last one got about thirty seconds Waste Connections tickers WCN. This is an American company or US company.
Yeah, it's funny.
A lot of people don't necessarily think about and environmental services as infrastructure.
We think they are. For us. It's about pricing power.
It's what businesses to deal with it.
It is you have to stay the bill and guess what they can raise their rates with inflation or better than inflation. So for us, we're always on the hunt for what businesses have pricing power. We've found that in a lot of waste management business over time, and that tends to be one that we feel really good from a volume perspective as well.
Yeah, and that name is up almost about fifteen percent year to date.
Wow.
Yeah, I think about this stuff a lot. No waste is like Unfortunately, it's part of our world. You got to figure it out. Really good stuff. Thank you so much. Good to see you. Yeah, all right, look forward to next time. Tyler Rosenlicht, he's portfolio manager head of natural resource equities over at Conan Steers, joining us here in our Bloomberg Interactive Brokers studio. Folks were coming up on
ten minutes until we wrap up this trading day. Just up my hair on the S and P five hundred and you've got a Nasdaq one hundred that's down about twenty nine. Carol Mass just betting in. This is Bloomberg Business Weekdaily.
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