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All right, so there's a pretty interesting story on the Bloomberg terminal and at Bloomberg dot Com. Basically, Bloomberg News used a large language model to scan more than three hundred of President Trump's public comments between August of twenty twenty four mid March, as well as more than three thousand social media posts from the president members of his administration since the start of twenty twenty five. Basically, this technique allows for comparing meaning across large volumes of text,
even if the specific wording differs. Now the results they were reviewed by our reporters, and what they showed was a correlation between Trump administration contacts with Vladimir Putin and subsequent comments that echoed the Russian leader's own positions on subjects including the occupation Kiev's goal of joining NATO and Ukrainian President Voldemir Zelenski's political legitimacy now the netnet. President Trump's views on the war in Ukraine teim increasingly aligned with the Kremlin, and.
That despite most recently President Trump seeming to be more critical of Russia and Putin. For some thoughts on this and where the war goes next, back with us is doctor Angelos stan She's senior fellow at the Brookings Institution, also a former National Intelligence officer for Russia and Your Age at the National Intelligence Council. She also served in the Office of Policy Planning at the US Department of State.
She's the author of the book came out in twenty nineteen, Putin's World, Russia Against the West and with the Rest. She joins us from Washington, DC. Doctor send, good to have you along with us. It's been a little bit since we talked to you. How would you characterize the way that the President has been speaking and acting with
regard to Russia's invasion of Ukraine? Would you agree with the LM analysis that has found that there is a correlation between Trump administration contacts with Putin and subsequent comments that echoed Putin's own positions on subject related to the war.
Yeah, I would definitely agree with that. I think that was true even before he was elected president a second time. Certainly, Steve Witkoff, every time that he the chief negotiator, every time he's met with Putin, has come out and essentially repeated the Russian version of all events, and President Trump
has most of the time too. You occasionally get instances like on Saturday after he met with President Zelenski when he was critical of Russia for its continued bombing and killing of Ukrainian civilians, particularly since these negotiations have begun. But I think his view of the world, his view of the conflict echoes Putin well. Blaming NATO, he of course also blames Presidents Obama and Biden, and then essentially saying that Crimea has always been Russian, which of course
is not true. And then you know, repeating that the Ukrainians will have to recognize the areas that Russia has now occupied since the twenty two war began as belonging to Russia.
All right, so we've heard from the Secretary of State too. I think about the President having to make or expected maybe to kind of come to some conclusion this week when it comes to I guess US involvement in the Russia Ukraine War. I don't know what are you expecting to come next here, Angela.
Yeah, it's interesting. The Financial Times just have a story saying that Europeans are now increasingly worried that in fact, President Trump will say, you know, this is too difficult, I've tried, it's over, and he'll turn his attention to something else. I think it's possible. The messages that we've heard, both from President Trump himself and from Secretary Rubio do indicate that some kind of decision is going to be
made this week. I don't know whether it's tied to the first hundred days, but I think we just have to keep remembering that there are two sets of negotiations going on, and that even if President Trump says he's not interested anymore in trying to end the war and negotiate it's too hard, the restoration and improvement of US Russian relations will probably go ahead, And of course that's what Putin really wants.
Well, explain that how is he leveraging Russia's invasion of Ukraine to improve relations between the US and Russia.
Well, I think that from the beginning, as soon as President Trump was inaugurated the second time, he indicated that he wanted to restore relations with Russia, that he wanted to end the sanctions, that he wanted to work on maybe another strategic nuclear arms agreement with President Putin. So I think those things have always been separate in President Trump's mind, and they've certainly been separate in President Putin's
mind and the people around him. Because even though Putin has now announced, you know, a three day cease fire from March eighth to March eleventh, I believe it is we have no idea whether that will happen. But the very next day, his foreign minister, in an interview with CBS, repeated all the maximalist Russian demands, including international recognition of the annexation of these four territories that Russia doesn't fully control.
So I think in both president's minds, these negotiations have been separated, and it's quite possible that the US and Russia can continue to improve ties, you know, restore the personality embassy and things like that, maybe lift sanctions, go into big business deals with Russia. Maybe, but that the walk still go on and the message to the Europeans from the US will be you have to take care of this.
Any outcome where President Putin gets to hold on to the territory that he has taken over and is more favorable to him, does that only embolden him going forward?
Well, of course it does, because right now, as we believe the negotiations stand, the Trump administration is willing to say that Russia should only one should only recognize that part of those four territories that Russia actually occupies, and that the unoccupied parts of these four territories would still be Ukrainian. And so you know that would certainly be a mild gain for Ukraine.
And what does embolded mean? Does it mean we've talked with you about this before? Like, does it just mean I don't know, in a year, two years, five years, six months, he goes after some thing else. Potentially.
Yeah.
So let's say there's a ceasefire and it's more than thirty days. I mean, the initial ceasefire that Zelensky has agreed to would be for thirty days. Russia hasn't agreed to that yet. But if there were a ceasefire for thirty days, then we would have to see would Russia then immediately start bombing again, or would the thirty day cease fire lead to a more permanent cease fire, in which case Russia might wait some time to attack again.
But the way that the Russians are talking at the moment is that they still want to achieve their maximum goals, which they can do right now. I mean when President Trump said, well, it's already a concession that Russia hasn't taken over all of Ukraine, That's exactly what they tried to do in February of twenty twenty two when they couldn't. So they might try that again later.
On, doctor Sten before we let you go just thirty seconds. You know, I ask you this every time and past you repeatedly over the last three years as you've joined us. Given what we know now, how do you see this war ending?
So?
I think at the moment it still looks as if it would end with some kind of territorial I mean recognition by Ukraine that at least temporarily the territory that Russia now occupies in Ukraine will remain with Russia. I think you could have a cease fire again. Going back to the North Korean South Korean example, but you would have to have that very heavily policed with some forces, and then you know it would be over for a while.
But I don't see at the moment this ending in any way that one could be really sure that Russia wouldn't attack again unless Ukraine joins NATO.
Doctor Angelas stant Thinks Always Always, Senior fellow at the Brookings Institution, former National Intelligence Officer for Russia and Eurasia at the National Intelligence Council, author of the book Putins World.
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All Right, you know this already. We've been talking about it. This week, marking the first one hundred days of President trump second term, we covered it. Question is we want to dig a little bit more into tim what comes next?
The US Treasury Secretary Scott Besson and congressional Republicans will meet to sketch out the plan for passing a multi trillion dollar tax cut in the coming weeks. As polling shows that voters largely disapprove of the White House's handling of the economy. President Trump leighing in on taxes yesterday as he was traveling back to Washington, DC.
We're going to be taking in a tremendous amount of money.
And we're going to make a lot of money, and we're.
Going to cut.
Taxes for the people of this cutting this possible.
We'll do a complete tax cut, because I think the daris will be enough to cut all of the income.
Tax, enough to cut all of the income tax.
I don't have to pay income tax anymore.
I think Congress will have something to do with that. Let's ask Nathan Dane.
All right, let's bring him in. He's Bloomberg Intelligence senior policy analyst, typically based in DC. Likely for us to be here at Bloomberg headquarters in New York City all income tax.
No, I don't think it's going to happen, but you are going to get There are going to be some tax cuts in this bill.
I mean, so what they're.
Talking about is a five point three trillion dollar reconciliation bill. There's about one point five trillion earmarked in therefore tax cuts. Primarily, what we're thinking is no taxes on tips, no taxes on overtime, and for you know, no taxes on Social Security. Those are like the three main priorities. But there has been this push by President Trump to try and lower you know, other taxes for individuals that make less than two hundred thousand dollars.
That's what they're thinking. The idea here is that tariffs are going to pay for it.
And you know, all the analysis that we've done, all the analysis that we've seen for other people do is it's not exactly sure that money is ever going to be there.
So, you know, we.
From Paris for the Tax correct and.
So what we're telling our clients is that we've i think as of right now, with specifics likely to come out over the next couple of weeks, the more likely scenario is you are going to see Congress pretty much kick the can on a lot of these cuts. We don't think there's going to be material cuts to snap Medicaid, the Inflation Reduction Act, but what you are going to see is most likely a very large deficit inducing bill at the end of this which could be multiple trillion dollars.
Because it's much easier from the policy perspective to kick the can of the issue down the road than it is to take a bill or a vote that's going to actually pull back benefits within the near time.
Can I just say we've kicked the cans how far the Cans and mars right at this point? I mean, we just keep doing this and doing this well.
And again that's the problem is is that you know, for a lot of in both sides of the aisle, it's both Democrats and Republicans. For them to actually take a vote that actually claused back some provisions or entitlements and so forth, it's extremely difficult. In fact, it was reporting over the weekend that from some of the tax provisions,
let's talk about Medicaid and snap benefits. Rather than implementing those cuts immediately, the thought now is that you would implement it after the election, whether it's the midterm election or even four years, and now implement.
It after the Trump administration.
So they understand, they being the Republicans, understand that this is not a popular vote. We've seen Senator Josh Holly from Missouri come out and say don't touch Medicaid. We've seen the Chairman of the House Ad Committee, Glenn Thompson, come out and say, look, we can't really touch snap benefits outside of maybe just trying to combat waste and fraud. So there's a lot of ideas out there, but at the end of the day, it's much easier to kick the can on the deficit than to do anything else.
So do you think that indeed we will see tax on tips taken away? So no tax in this next bill, no taxes on tips, no taxes on social security, and no taxes on overtime. Do you think that'll pass?
I think that's like the idea. So what we're waiting for is markups. So this week we have a couple of markups from the Bloomberg client perspective, not the most. If you're in the defense industry, you'll care, but for the macro investor, not all that important. The big one you're looking for is the House Ways and Means Committee, probably going to be around in mid March, I'm sorry, mid May, and that is the one that's going to have a lot of these ideas in there.
And what's the total there that would add up to? What are some rough estimates on how much revenue the government would lose out on as a result of not taxing those things.
So here's the interesting thing.
So the Senate resolution and the House resolution had two different They were the same at the top number, five point three trillion dollar bill, but where it differs is how are you going to cut in order to pay for this one point five trillion.
What the Senate did is they said, well.
We're going to just as a floor cut four billions, so with a B the House that we're going to cut one point five trillion, so we'll have like for like. But it's much easier to say that you're just going to kick the can than it is to cut. So that one point five trillion will most likely include some form of no taxes on tips, no form on overtime. We'll have to see what the estimates actually come out
to be. And for the New Yorkers in Connecticut and New Jersey folks, the salt deduction most likely, we think we'll go from around ten thousand dollars to the general dealing in Washington right now is around twenty five to thirty thousand.
What do you think, Carol Better? Okay Better? Is this governing? Is this governing for the people or is this just governing to make sure I keep my job? So by members of Congress.
This is governing to avoid the filibuster and to do something without the opposition party. And so this is how President Obama got Obamacare through. This is how President Biden got the Inflation Net Reduction Act through, and this is how President Trump got Trump one point zero tax cuts through. But using reconciliation, you have a majority vote in the House, a majority vote in the Senate, you bypass the filibuster. But the Cavia idea is that you should only be
able to do things that impact the budget. What the Senate did is they said, you know what, the current cost of these Trump era tax cuts of extending it is effectively zero because it's current policy, that's something that hasn't really worked in the past. They just said we're going to do at this time and as a result, the deficit now may go up significantly as a result of this.
But you know, we're also to.
Our clients that there are a lot of deficit hawks out there that wouldn't be going for this. But we think President Trump ultimately would use his political capital to get those Republicans on.
Board, meaning sign this, go with me, or you're getting primary.
Exactly and you march down to Capitol Hill, look them in the eye and say, are you're going to do real my plan?
Yeah?
And look, Jordan Favian was talking about this earlier, Carol. He only has so much political capital at this point, especially with some of the poll numbers coming in that we've seen.
Is that exactly Is that good enough, Nathan to keep the Republicans come the mid terms?
Well, I would just say here, what's the ultimate goal for the Republicans in this package, and that is to ensure that individual taxes don't go up.
At the end of the year. Right now, they're trying for a permanent.
Text cut, but nothing says that. If they can't come up with a deal that maybe they say, you know, instead of ten years or permanent, let's just do this four years so that taxes would go up and under the next administration, that brings the price tag lower and then would make it much easier to pass a bill.
Is it ever permanent?
Well, it is for the corporate tax right, That's what they did in the first one.
Permanent.
No other administration can come in or no other Congress can come in and change it.
Well, you can obviously change it if it's but it's permanent and from the standpoint that there's no sunset provision.
Okay, got it, got it, got it, got it. I mean it's going to take legislative action to change it.
When you have the pencil sharpened, when you have Excel open, and you're going through these calculations, how do you think about potentially the burden being eased on lower income Americans with some of these provisions, but then potentially the inflationary aspects of tariffs if those indeed remain in place. Because the President says, hey, this is a revenue raiser for us. We saw a lot of reports over the weekend about companies starting to add a specific line item as a
result of an import tax and import duty. Does that then hit those Americans who this would likely benefit?
Yeah, you know, I just saw our restaurant analyst, Michael Halen's downstairs, and you know, I was talking with a bunch of our consumer.
Analysts a few minutes ago.
And the questions that we have from this package is Commerce Secretary Howard likes to say that it's stimulating, but if you're spending the bulk of this extending current policy, where's the stimulus. So when it comes to retail in particular. You know, there's a lot of our analysts are looking at this and they're just saying, look, you know, you know spending is still somewhat strong from now, but what happens if we get supply chains and a few supply
chain shortages in a few weeks. There's a lot of different questions here, but ultimately the question is can the consumer to continue to spend as they're spending today And a lot of our analysts aren't exactly sure that can happen.
What do you hear from the investor base and you know, various corporate base. You are a policy expert analyst in terms of trying to figure out what the next I don't know one hundred days or next six months are for a Trump White House.
So the first question is obviously on the tariffs. The number one question we get is when are these exceptions or when is President Trump going to quote unquote back down on tariffs? And what we tell our clients is is that, like, look, within the next three to four weeks president Trump. Bloomberg News reported this over the weekend that President Trump is going to announce deals within quote three to four weeks, but Treasury Secretary Scott Bessont.
Isn't going to wait that long.
He's feeling the pressure, and so you are going to see I think later this week or beginning of next week quote unquote understandings or memor amums. I think essentially, I think it's like three to four page bullet points rather than an actual deal.
So obviously that's goin too well.
I don't know if I China, but you know, they're negotiating with seventy countries, and the idea from the Treasury Department that we've learned is that this isn't so much of a US China negotiation, but rather you know, they've been saying India potentially could be a first one in South Korea Japan. So you have this tariff argument that's going or this tariff debate that's taking place with I don't want to say the ultimate answer, but at least
some more clarity. But then the Republicans on the House are trying to get this tax extension bill. They want to get it done by Memorial Day. We don't think that can happen. I think it's going to happen during my vacation in late July, but more likely than not because the debt ceiling is included. I think they will get it done before the mid July.
I hope for your sake it doesn't happen on your vacation, Nick, and I want to go back to something that you said about stimulative effects or potential stimulative effects of this bill. There's this narrative that has emerged in recent weeks, given the challenges that the that analysts are saying the economy faces as a result of this tariff policy, that there needs to be some sort of stimulus to the economy,
and they're saying it's all about the tax bill. They're using this as a way to say, Okay, we got to get this tax bill through because that is what's going to push the economy. You just spoke to the folks on the retail side. Is that indeed the case? Can it be stimulative in its current iteration?
Well, I mean when you're essentially extending current policy, you know, I think the stimulation from yesterday's taxes to tomorrow's taxes sorry, tariffs and taxes. You know you're not going to see much change in the current way of current taxes. Then you're going to see this no taxes on tip, no taxes and overtime. Potentially this like tax cut the President Trump's talking about.
Is that enough that really gets the market going?
We're not exactly sure that's the case, but I will say is is that, you know, Republicans, there's no other option here if they don't pass this, they you know, there's really no other bills out there that people are talking about between now and the midterm elections that are going to try and address this, even bills to try
and claw back authority from President Trump on tariffs. Just the White House just this morning put out a veto threat on a resolution that's going to come in the Senate later this week.
So this is it, Democrats. The Democrats are messaging for twenty twenty six.
Mean, they don't have the power at the moment, and when you're the party in minority, you know you essentially have to prepare for tomorrow.
Unbelievable interesting times, no doubt about it. Nathan, so much, so great to have you here in studio. Thank you, thank you, do you appreciate it. Bloomberg Intelligence Senior policy analyst Nathan Dean joining us.
This is the Bloomberg Business Week Podcast. Listen live each weekday starting a two pm Eastern up on Apple car Play and the 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.
President Trump promised Americans a quote boom like no other if they elected in president, But based on the stock market's performance during his first one hundred days in office, it depends on what you mean by boom. Esha Day writes about Trump's first one hundred days and the worst stock slump in the first one hundred days in more than fifty years. Asha's US Equities deputy team leader senior
reporter for Bloombergner. She joins us from New York. Give us the numbers here, Kasha, what did you What does boom mean in this case?
And thanks for having me? So? Yeah, I mean the boom was also a lot of volatility, which I guess none of us who are watching markets day to day can't really forget about. We're still kind of in the midst of it. But let's look at the numbers, of course. So SMP five hundred as of today's close, which was ten minutes back, is down about eight percent, just shy of eight percent since Jan. Twenty eighth, which was an
inauguration day for Donald Trump. Now, Trump's one hundred day would be April twenty ninth, So by April thirtieth, which is like the end of this month, he would have completed like one hundred days of his administration. So we have like one or two more sessions to go to kind of see where this record lands. But right now, this is the worst decline for the SIMP five hundred in a precedent's first hundred day since Gerald Ford was
president in nineteen seventy four. So yeah, I mean, we all remember what a tumultuous time that was for American politics at that point.
This is ti.
Multious too, so you know, it's a long time and also not a very good comparison to look at.
So there's that when.
You look at and you drill down into sectors and so on, Right, what else do you see and how broad based all the selling was.
Selling was very broad based, But the biggest declines that came since Jan. Twenty eight came from the two most expensively valued sectors as well, and also the two sectors that house most of the megacap like the top seven names, the ones we call the magnificent seven, right, So that's the technology sector within the sent five hundred and the consumer discretionary sectors. These had the biggest declines as sectors
over these almost one hundred days. And then when we look into stocks, we really kind of see a lot of these stocks that took like the biggest beatings are the ones that will be in the forefront of this kind of higher tariff regimes. And if the tariffs that have been proposed by these administration they stick around, we would be seeing the highest tariffs on these trading partners since over the past hundred years. So that that's a big hit, and that kind of explains why these names
are taking such a head. So for example, you know Deckers Outdoors, this is a footwear maker, is one of the biggest stickliners Bugs.
Those are the companies that they have.
That's correct, That's correct. I mean it's almost a household name, right, like we all know these brands. Then there are chip makers. Chip makers you know, show up very widely. These of course are not household names. So these are again and almost like the front line of this stariff war. Chip making, the semi conductor sector really is a globally spread supply chain, just as autos, and these are going to be hit very badly, and we have seen the shares kind of
starting to tell that story. Another group that did pretty badly is the travel group. And that makes sense, right, like, if there's concern about the economy, if there's concerns about economy growth, people are unsure about spending. That's kind of the discretionary spending that gets hit travel and leisure. So all the big airline names, the legacy airline names, the
United Deltas, and the American airlines of the world. They have come out, they're reported results already for the first quarter, and the outlooks have been very money to say the least. Or the other big group within the travel sector that took a big hits are the cruise liners. Again a really classic example of that kind of discretionary spending that can be really impacted when consumers are feeling unsure.
And unsteady interested in sort of how you're thinking about what companies have said thus far, at least about the outlook. Carol mentioned this note from Gina mar n Adam's a little earlier today, Esha, you know there are those out there who say this is short term pain for a
stronger America longer term. That's what the administration would say if a member of the administration we're sitting here right now, is is that what you're hearing from companies that this could be a minor speed bump or is this something they're worried about something bigger.
It's a great question, I think right now. The lack of clarity is such that what we're hearing over and over again from these companies is that we just have no clue about what's coming next. And that was kind of I would say. There is the outlook from United Airlines, which reported early on in the first quarter reporting season, where it came out with essentially two sets of outlook
for two different scenarios. So in case there's a recession, this is what we expect to happen, and in case there's no recession, this is how much we expect to earn. That is something everybody's kind of pointing out too. And seeing that that tells you that, oh, like they're completely flying in the dark at this point.
Hey, one thing I want to ask you, and this is something like we were trying to get to with Eric Wiener, who also follows the markets for us here at Bloomberg. But I am just curious about positioning within the market that whether it's equity positioning or fixing positioning, like what it tells us about the psyche of investors at this point, which might determine whether or not, you know, they're ready to kind of change if the sentiment or the narrative changes quickly.
Yeah. No, that's a great question. So when we look at positioning data, especially from the big banks who are kind of sharing those numbers, what we are seeing, and a doatcha bank every week puts out really good set of stats on this, and they're still seeing that equity positioning is really near the bottom of its range, which
is kind of typical for times of great uncertainties. At the same time, you know, when we talk about positioning, we really have to talk about all these kind of sentiment surveys that are coming out and showing us over and over again how investor sentiment has really turned extremely bullish at this point and given this really low positioning once some kind of certainty, and this is something when I talk to my sources comes up over and over again.
Once there's some kind of certainty the bounce back in the markets. There's enough clue from positioning to tell us that the bounce back from the markets could be strong enough, especially since both these things. Positioning is towards the bottom and sentiment is just really kind of near rock bottom almost. But then, what people really need, it's something solid, something
concrete to latch onto. This more kind of vague promises, our ideas of agreements deals that is not going to cut it at this point because money managers, institutional investors, they've just seen it a lot, and they're absolutely not willing to kind of buite the bullet at this point.
Interesting, interesting, right, gets to kind of the center to me and psyche out there. Esha, thanks so much, Esha Day. She's US Equity's deputy team leader, senior reporter at Bloomberg News, joining us right here in New York City. Now about you let me drive?
Oh no, no, no, no, this is not a toy.
Please gravel ecuse I want to drive. It's a good question.
This is the drive to the clothes punks a thing well on Bloomberg Radio.
What a trade today?
I know?
Are you feeling bored?
I would never say I'm bored, Carol. What I will say with the whiplash of the last three weeks. Yeah, it's like this feels a little weird to me.
It feels a little it feels like a calm before the storm.
Perhaps.
Yeah, I don't know that that's going to be the case. You doing a lot coming right now? Yeah, I mean, super super interesting. Let's see what our drive to the closed guest has to say. Great to have back with us, Carol Schleife. She's investment strategist at BMO Family Office, joining us from minneappleist Carol, Good to have you here. It does feel a little quiet and subdued today, considering what we've seen over the last month. What's you read here?
It does feel no one really wants to take too strong a stance coming into We've got big earnings, we've got big data. It's sort of like peak week for a lot of a lot of information, and it's nerve wracking, I think for anyone to want to get a too bold in front of that.
I mean, I'm having a hard time understanding the next catalyst here because we thought we'd get it with alphabet last week. We got the jobs report coming up on Friday, We've got earnings of slew of earnings. We got Microsoft, we got Amazon, we got Apple coming in the next couple of days. What do you see as the biggest catalyst, hopefully.
Of a narrative change if we can get Congress really focusing on and some of the more pro growth business aspects of things and get movement there. It's going to be difficult because investors are hanging on a lot of these earnings reports hoping to get guidance from companies on what they're doing relative to tariffs. But it's honestly, we're not going to get that kind of clarity probably until the next quarter of the following quarter, when we figure
out what they're doing. Because if you're a retailer right now, you're trying to decide do I take the goods do I take the chance that there might be big tariffs on those goods coming in for the fall and Christmas, because we're moving into those months where they have to make those decisions, and so as investors, we're not necessarily going to get clarity on that. Although I do think it's positive that you're seeing a lot of companies either
suspend guns bring it down. It smells a lot like it did in March of twenty twenty, when companies set the bar very low. Then things stabilized and we were able to move.
Off of that.
So I think the only sort of catalysts we're going to get for markets in the very short term is a narrative catalyst change. If Congress can can be back in talking about you know, accelerated depreciation being reinstated, and perhaps some credits for manufacturing construction, that if we can get the narrative focused on that, that will help.
But Carol's safe to say that it's hard to make that investment bet on stable markets right until we get more clarity. And so does that mean for investors are putting not committing new money, taking existing money and putting in in safer plays like what's going on? And I understand investors invest for the long term, but it's got to be a little startling to see what's happened over the last month.
I think the piece of it is is we've been trying for years to get people to invest in globally diversified portfolios, and so I think part of it is refocusing on that. Let's look outside the United States and poke around at some of the other areas, and fixed
income actually is held in Okay. There's been a lot of nervousness about the tenure and extending extending out, but it's actually most of the capital markets have behaved very reasonably in here despite the volatility we've seen, and so looking at those portfolios, rounding up where we might be underweight, because you know, for years the only trade was to invest in the US, and now while you're waiting for some clarity there, maybe picking away at other things on the fringes makes some sense.
Like when you say fringes, what do.
You mean, I just mean broader in terms of looking at some of the you know, we've actually had play participation in China, Japan for some China, I know is very controversial, but you look at them as an investment opportunity.
You look at some of the non US markets where a little we're more underweight than we would want to be in Europe right now, but there's some places to look there too, and so global funds as well, because you know, the one thing you've seen is that if you look at the All Country World Index, the US used to be fifty five percent of it. For decades, and then over the last number of years it's grown
to percent. You're back to rebalancing the world. So looking at your portfolio and seeing if it's more aligned with what global GDP is would be one way to take it.
Do you think about longer term two in terms of the US being more disconnected from the global economy, or do you just think this is a moment of chaos and that things will settle down and be more normal quote unquote in terms of the US relationship to the world.
I think this is where my long term optimist keeps raising its head up. Having watched this for a very long period of time, I have to, in my heart of hearts, believe that in the long run, maybe that the shine is off the US exceptionalism crown. I'm not giving up on the US. It's a place to invest because I do believe we've got the innovation. We'll figure out a way to do things. And the interesting thing is, is this near term cast for companies. It doesn't mean
they're standing still behind the scenes. They're monking a bunch of different things, and once it gets some sort of clarity, they're going to be quick off those starting blocks to figure out how to participate in this because companies have to grow. It's part and parcel of what we are. They either have to grow for their shareholders, they have to grow for their owners, or they have to grow for their bankers. So, you know, one way, shape or form, they have to figure this out. And we still have
a lot of innovation going on here. And if we can get this figured out, where we pick key industries we want to invest in and we start investing in them, that's a pretty great long cicture too.
You know, we've been taught, Carolyn. I've been talking a lot about the US's place in the world, and just in the last forty five seconds that we have with you, when it comes to innovation, is there do you see a risk, given what's happening in trade, that the US sort of loses the mantle as this most innovative place.
I do see a risk in that, and I see a risk in what we're doing to hire ed and interest in some of that. If we want to own those industries, we need a whole infrastructure and ecosystem that
goes with those industries. So we have to be very careful to make sure that we're not discouraging great young people from coming here to innovate, and the government needs to fund some of that, like they have all along, or we wouldn't have iPhones, who wouldn't have GPS, We wouldn't have all of what we had if it hadn't been for the public private partnership. And there is a risk there if we're not very careful.
Interesting, Carol, Thank you so much. Carrol's Life, chief investment strategist at BMO Family Office, joining us from Minneapolis, Minnesota.
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