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We did mention our big story at the sour President Trump and President Putin of Russia speaking today in a long phone call about ninety minutes on how to bring an end to the Russia Ukraine wall. President Putin committed to limit Russian attacks on Ukrainian energy assets, but did decline to agree to a broader thirty day ceasefire, as the United States had sought with more. Let's head to
the White House into Bloomberg's Tyler Kendall. She's there on the lawn of the White House, Tyler, Is this a step forward to ending the war between Russia and Ukraine?
White House would like to paint it as such, But importantly you mentioned they are Vladimir Putin falling short of backing a thirty day ceasefire fire proposal that the US had been hoping for. Importantly, that White House readout goes on to say that negotiations will start for a maritime ceasefire on the Black Sea, followed hopefully by talks for
a full seaspire and then a more permanent piece. Importantly, I just want to point out that the last time Zelenski was here at the White House, that Oval Office meeting devolved. He then went to Europe and presented to our European allies a similar path that he wanted to see a ceasefire in the sea and the sky, as
he called it. You know, Bloomberg News had been reporting that Russia might have been trying to slow roll these negotiations earlier this morning, breaking the headline that Vladimir Putin would like to see a halt of all weapon flows into Ukraine, or, at least, according to sources familiar, the
halt of US weapon flows into Ukraine. It remains to be seen if that is something this White House would really get behind, considering just last week it did reverse its own halt on US military assistance and intelligence sharing in order to get Ukraine to sign on to this thirty day piece proposal. Carol just quickly still a big questions, particularly considering that this readout does say that both countries want a lasting piece. That is raising questions about what
that really looks like. Considering that we know that our European allies and Ukraine have been asking this White House what sort of firmer security guarantees they're willing to provide.
Hey, Tyler, just very belief briefly fifteen seconds. Do we know what Ukraine would be giving up in exchange for the ceasefire?
Well, that really remains to be seen at this point. They have said that they are willing to negotiate, but they need Russia to also come to the table. Ukraine has asked the US to ramp up sanctions if they do not get this thirty day cease fire into effect as quickly as possible.
All Right, We're going to.
Leave it on that note, Hey, Tyler, thank you so much. Tyler Kendall, Bloomberg News reporter there on the lawn of the White House. All Right, let's stay with this story because back with us for someone to share her expertise on Russia. Its longtime leader is doctor Angela Stent. She's senior fellow at the Brookings Institution, a member of the Council on Formulation, a former National intelligence Officer for Russia
and Eurasia at the National Intelligence Council. And she's also the author of Putin's World, Russia against the West and with the Rest, which I am guessing she is probably working on updating. She joins us from Washington, DC, Doctor Stent.
Always good to have you with Tim and myself. First of all, I'm just curious about the optics of how we got to today and whether or not you see this this conversation and the headlines that we have seen out of this conversation between President Trump and President Putin?
Is this progress? Is this a step forward?
So the way we go, well, thank you for having me on again. The way we got here is right. The President Trump said during the campaign that he was going to end this war in twenty four hours. It would never have started had he been president at the time.
It took a little more than twenty four hours to get this particular phone call with Putin, although we know that he had previous ones after his election, and so he got the Ukrainians by putting pressure on them to agree to a thirty day total cease fire, and that's what he said he wants from the Russians. I've just been reading the Russian readoubt the Kremlins readout of the talks.
It's a little different from the one that we got from the US side, and it mentions that Trump asked Putin for a cease fire on hitting energy and infrastructure targets, and it said that, you know, Putin was favorably inclined to it, it didn't actually necessarily say that he agreed with it. And a lot of it had to do with the restoration of US Russian relations, and apparently they're going to organize hockey games between Russia and the United States.
But the thing that's most notable in the Russian one, and I think your correspondent already alluded to it, is that Putin's saying that they have to get to the fundamental causes, the root causes of why this war broke out, and that's going to go right back to NATO, to Ukraine wanting to be part of the West, and to Putin essentially saying that can happen. So I will be curious to see how this works out. I'd also like to know how they're going to enforce this very limited
but still important ceasefire. Don't forget Russia has destroyed seventy percent of Ukraine's electricity production during this war. How are they going to monitor this and then what comes after it?
But Angela doesn't seem like to you that it is indeed the beginning of the end of this war.
It may be, I think what it's certainly the beginning of the US and Russia established, re establishing relations, and we've heard that from President Trump is a big Is it the beginning of the end of this war? I'm still I think the jury's out on that. I think we have to see how long Putin drags out the negotiation before he agrees to a total cease fire. And again, he hasn't really shown that he's interested in ending this
war anytime soon. He's much more interested in restoring these relations with the US and ending his isolation.
That's interesting.
The other thing I wonder, Angeline, something that we've talked about with you before. I mean, are there ever really any guarantees that President Pultant won't try to invade Ukraine or another country again? And how does the outcome of this negotiate negotiation for an end to the war kind of determine the likelihood of that happening again?
So as President Zelensky, unfortunately for him, pointed out in the Oval Office when he then got the president, the vice president very angry with him, Russia has violated every cease fire it's signed with Ukraine, certainly since the annexation of Primere in twenty fourteen. And Russia has also violated every treaty it's signed with Ukraine since its independence. So
I think one has to be very skeptical. And this is of course why President Zelenski, again unfortunately for him, in the Oval Office, wanted to talk about security guarantees, because without very robust security guarantees, there's absolutely no reason to believe that Russia wouldn't try and invade Ukraine again. The best security guarantee we know would be Ukraine joining NATO.
That's been taken off the cards now by the Trump administration, but it needs these guarantees, and the Europeans, the French, the British, and other European countries have said they're willing to provide security guarantees, boots on the ground to be a stabilizing force stabilization force once the war ends, but they say they need American backup for this, and that's something which the Trump administration has not committed itself to Angela.
Let's say this is the beginning of the end of the war, and it does. And what does Russia look like on the other side of this is is it stronger or weaker than it was? Is it more? Is Putin more emboldened than he was pre invasion?
Yeah, So what it looks like is, I mean, the economy is not in good shape and it's going to get worse the longer this war goes on for Putin. So if the war ends, that would and obviously if the sanctions are removed, which they would be if the war ends at some point, then that would be very beneficial for Putin. But yes, he comes out of this looking stronger. He invaded another country and provoked and presumably, I mean, we have to see if Ukraine has to
make territorial concessions to Russia. He will then you know, have taken twenty percent of Ukraine. And unless there are these very robust security guarantees, he could invade again. And now he'll be in you know, he'll be invited back to the United States. Maybe the Europeans won't want to deal with him for any time soon, but Russia's actually strengthened its international position in many ways while it's been fighting this rule.
You know, I think about something Tim brought up, and it just reminded us. Was it a debate where Mitch Romney said, who was asked, you know, I guess or the candidates, was it two thousand and eight or before that, twenty twelve, and what was the biggest right, what was the biggest concern or national security concern for the United States?
He said Russia and was kind of laughed off the stage.
But is there some credibility Angela in President Trump trying to create some kind of economic cooperation or more economic cooperation between the US and Russia to create a different future and relationship with Russia going quote, and is there some good to that?
Well, in the nineteen nineties, there were a lot of American firms that were very active in Russia. Energy companies, launch firms, small funds. They were making money and they were doing quite well, and yet the political relationship between the US and Russia was very difficult. There were a couple of high points after nine eleven when the US and Russia with Putin, you know, worked together in terms
of the beginning of the US campaign in Afghanistan. Also, I should point out that there were thousands of American business people in Ukraine when Russia invaded. That didn't stop Russia from invading. So of course there are arguments to build up economic ties with Russia, but I think history shows us and even the experience of the last thirty years.
Putin always likes to separate economics from politics, and you can have a good or a strong economic relationship with Russia and it doesn't seem to have that much impact on what Russia does politically or militarily, particularly under Putin.
You know, I asked what Russia would look like after this, but what about Ukraine? Because this is the country that three years ago we were talking to you and so many other people thought this war would be over just in a matter of hours, a matter of days, a matter of weeks. But look what Ukraine has been able to do to defend itself. What does Ukraine look like on the other side.
Well, you know, on.
The good side, Ukraine now has the strongest and largest army in Europe. It's developed very sophisticated technical technological capabilities. It's been using electronic warfare, it's much more sophisticated than that. On the other hand, of course, its economy has suffered greatly, and you know, it's had cities and villages obliterated by the Russians, so it's going to need an enormous amount of economic assistance and investment if it is to recover.
It's also lost a large number of soldiers. We don't quite know, but I think for both Ukraine and Russia it's in the hundreds of thousands. And it also has millions of Ukrainians are now living abroad because of the war. They need to come back and they need to help rebuild the country. So economically it's it's, you know, in very poor shape, even though other aspects militarily it's better off, but it will still be in a very fragile state at the end of the war.
Angela.
You know, I was thinking about this a lot, like what is the relationship between President Putin and President Trump? And I know we've talked with you about this before.
And what is it? You know, is it is Russia great power?
Is it a great economy? You already referenced that it wasn't. They're businesses, their alliances, their leadership.
I mean, is.
It an economic and political model to emulate. I'm asking a little bit facetiously, but I'm trying to understand, you know why there is this relationship.
Well, it's not an economic model to emulate because it's essentially a hydrocon an exporter. It doesn't have a very modern economy. You know, I always when I teach my students, I say, tell me how many products in your home are from China? On how many from Russia. Well you know the answer to that, there many of them from China, they're on from Russia. So it earns a lot of money by selling hydrocarbons, but it doesn't have really a
modern economy. It has a shrinking population. It has a major demographic problem, and it's had that ever since the fall of the Soviet Union and even before then. But militarily it is a superpower, and that's in history. Russia has always been a great power because of its military, not because of its economy. And so it is you know, I think the largest nuclear power, the US and Russia,
the two nuclear superpowers. The Russians have more warheads than we do, and so in that sense it's a great power. And because of the hydrocarbons and of course it's location. It's the largest country in the world world sitting astride Europe in Asia, so it has many strong endowments, but economically it really does need to modernize.
Hey, just thirty seconds left, doctor sten. It does raise the question, though, how the rest of the world keeps putin in check, given the strength of its military and given his ambitions, how does that happen? Well, we know that.
He has ambitions that go beyond Ukraine, and that's why the Europeans are very worried about it. And now you see France offering you a nuclear umbrella to the rest of Europe. You see some European countries, even Poland, talking
about should they acquire nuclear weapons. So this is one of the impacts of this brutal war is at least country countries in Europe reminding themselves that they're still vulnerable to a potential Russian invasion, and some of them are talking about the possibility of a war with Russia within the next five years.
Bottom line ten seconds. This is a good this is a good move. This is some progress.
On the call. Yes it is, I mean hopefully if they implement this for us ceas file. Of course it's a good move.
All right, my guests, is we're going to be coming back to you a lot more still on this, and we so appreciate that we can.
Angela, thank you so much.
Doctor Angela Stent, Senior Fellow at the Brookings Institution, a member of the Council on Foreign Relations, and her book author of Putin's World.
Be sure to check it out.
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One of the things we wanted to talk about is, of course, the upcoming FED decision tomorrow. We did see the Federal Reserve Bank of Atlanta's gpt GDP now index suggesting US gross domestic product will retract one point seven six percent, so a negative one point seven six percent the first quarter versus a negative two point zero six percent and its previous release on March seventeenth, So you've
got that going on. Meantime, US Treasury Secretary Scott Bessett, well, he doesn't seem too worried about US growth.
He spoke on Fox Business this morning.
The underlying economy is healthy. There is no reason we have to have a recession. Can we have a pause as we go from this incredible level of government spending which is just unsustainable?
That, of course is US Treasury Secretary Scott Besson earlier today on Fox Business. So let's get into it the US economy tomorrow's FED decision. Back with Tim and me is doctor Steven Skankee, chief economist advisor at the Wealth Advisor, I should say chief economist at the Wealth Advisor kill Point. He's also a former US Treasury and White House National Security Council staff member. He's out there in Washington, d C. And then right here in our New York studio is
Bloomberg Economics US economist Stuart Paul. Hey, Stuart, I want to start with you. The FED is expected to hold rate steady this week. Tomorrow's decision really.
All about the dot plot.
Is mostly about the dot plot, and beyond what we actually get from the media and FOMC members expectations for the path of interest rates, we're also going to get a few clues about what they expect for the economy and what's going to be guiding their interest rate decision. So we're also probably going to see a downward revision of their expectations for twenty twenty five growth, and we're also probably going to see an upward revision of their
estimates for core PCE inflation for the year ahead. And between the two of those, the question is what ends up dominating. Is it the cooler growth that will lead to more rate cuts? Is it the higher inflation that'll keep them on hold. We're expecting the median dot to still show two cuts in the year ahead, but if anything, the distribution of dots we think will be skewed to fewer cuts this year because of that uptick in inflation expectations.
Steve, is that the focus for you too? The dot plot? Is that what you're focused on as well?
Certainly it is because it gives us some better understanding of what they're thinking about. That's sort of first step and than what share Powl says and is press conference. They've had a lot of disparate information in the various Federal Reserve Bank branches and it'll be interesting to see how that gets reflected in the board member's expectations.
Well, and I.
Guess one of the interesting things too is and you know. Let me ask you, Steve, we just know the Treasury secretary. It's kind of interesting, you know, saying the underlying economy is healthy, no reason that we should have a recession, and yet nobody's really ruling it out right.
Can you ever really rule out a recession?
Certainly not, because while the economy came into this year very strong, and even today with you know, slower than trend growth in retail sales and all of the negative consumer sentiment that has been causing consumers to pull back in their spending, the economy is still robust, The labor market is strong, and and yes there's changes at the margin, but it would take a lot to tip the economy
into recession. But at the same time, and I think this is what frightens markets the most, is that the President, his Treasury secretary, his Commerce secretary have all said that basically, they're okay if the market is down and if we tip into a recession, they're not worried about it because they're they're larger plan is to to reset, reboot, rebuild, recalibrate the economy, and they seem to be willing to accept that as as a necessary cost. If that should happen.
I just get to I.
Just got to say, as you're saying this about, I'm seeing Stewart kind of smile a little bit.
Stuart, you're smiling.
Why, Well, because I think that policymakers, even in the White House, they do about economic outcomes. Of course, they say that there's going to be a bit of an economic realignment. But if we think back to past presidents, we saw George W. Bush inheriting in the first term the bursting of the tech bubble. We saw Obama inheriting the global financial crisis. S and P five hundred in the first let's say one hundred days that they were in office was off at most, probably about fifteen percent.
There's only so much that sort of self inflicted pain from policy decisions, policy announcements, tariff imposite, tariffs being imposed and then being walked back that the White House can really stomach before they feel some pain. The key difference, of course, would be that was Bush's first term Obama's first term that were running for reelection. If Trump is seeing this truly as his last term and not part of some broader magma movement, maybe Steve is right. Maybe
he's a little bit insulated. I think that policymakers tend to be responsive to public sentiment. I think that they tend to be responsive to voters.
And when you only have.
Let's say, for example, three seats in the Senate that are going to be up in twenty twenty six, I think that Yeah, I think that it's probably a closer call than it might sound. They might be more responsive than you're suggesting.
So what are you saying, Stort. Are you saying that policymakers will continue to be responsive or they have this insulation because the President is not up for reelection and there aren't that many Senate seats that are coming up either.
I think that they're saying that they're going to be They're going to be less responsive than they have been historically. I think that there will come a point in time where we do get a little bit less rhetoric out of the White House and a little bit more of a reaction to both the printed data and financial market activity. Carol very wisely noted that the FED the Atlanta Fed's GDP now cast looks pretty dismal for the first quarter.
We don't think that it's going to be quite that bad, but printing let's say an annualized pace of half of one percent in the president's first term. The president's first quarter of this term in office is not going to be something that's easy to brush off from a public sentiment perspective or from a markets perspective.
Steve, you worked in government, your former US Treasury and White House National Security Council staff member, What do you make of what Stuart is saying with regard to the responsiveness of policymakers.
Well, the story that they're telling right now, and that the President is telling and his cabinet just sort of marches in step with him, is that there is going to be pain, there is going to be adjustment, and he's willing to take that. I think what's different this time, and I don't disagree with Stuart that the White House and congressional policy making offices elected officials are sensitive and
they don't want to get hoisted. But I think what's different is that this president sees this as his last opportunity to do some things that will, in his opinion, remake the economy into a better place for the future. And anytime you do that, that's going to cause disruption,
and in fact, a lot of it now. The other thing that I think we have to be careful about is that they can do a lot of things that reduced confidence, lower industrial production, lower consumers spending, and by the time they decide they've maybe pushed too hard, they probably have already set in motion the process of the economy following into a recession.
Well, and we know, we've heard, we've heard from the administration officials it's like, Okay, we're going to do this, and then we're going to get the tax cuts, and then you know, it's the reverse of the first time around. I mean, Stuart, he is said to be remaking the economy, but there is pain and if he gets it wrong, could we see something problematic and maybe a longer standing recession.
Just got about thirty seconds.
We're not expecting so much of a long standing recession. We're expecting about one and a half percent full year growth for twenty twenty five. That's still about half the pace that we saw printed in each of the last two years, a bit more than half of that. So not really a long standing recession. But it's not exactly something that's going to bolster your voting base, and it's not something that you can take into the midterms with a lot.
Of confidence, not growth, at least for a little bit or less growth.
Guys, thank you so much, Steve Skanky over at kill Point, and of course Bloomberg Economics US economist Stewart Paul.
This is the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern up on Applecarplay 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.
Well, it is time for another edition of Bloomberg Plugged in your weekly look at evs. Amlikra Fey and I talked about this yesterday when it was one of the most read stories in the Bloomberg terminal, and it's certainly worth revisiting because BYD shares jumped to a record after the Chinese automaker unveild a lineup of evs that it says can charge almost as fast as it takes just
to refuel a regular car. Being able to charge a car and the time it takes a combustion engine to vehicle to pull in and out of a gas station could be a game changer could convince drivers who aren't willing to make lengthy stops to actually go electric. Curious what Michael Stadler thinks about this. He's the CTO and co founder of Zendi. It makes software that helps design EV infrastructure. He joined us from San Diego. Michael, I want to get your reaction to this byd news in
a second. But I got to tell you I described your company as making software that helps to design EV structure infrastructure. Did I get that right? Because I had a heck of a time finding exactly what your company does well.
I mean, of course we do electic vehicles, and thanks for having make good afternoon, but we do a little bit more than electic vehicles with tools and microgrids, and I think that's what we have discussed in maybe today and how we charge his elected vehicles.
Okay, so you're watching closely the different types of EV charging systems, the different types of batteries. What do you make of this bid news? Because look here in the US, we're not going to be driving these vehicles anytime soon, I assume, unless the President decides to change the way that rules are structured around importing Chinese evs. But if this is indeed something that can be done, it's a game changer for evs.
Now. No, it's very cool, and I also read it to data.
It's very cool to add two hundred and fifty miles in five minutes.
But it also creates a challenge for.
The distribution system and the infrastructure because you have to provide that power. And if you think about that a lot of these cars are around, then it will be really a huge challenge for the utility system. And I think that's what the problem when a challenge starts with charging all these electric vehicles in that time.
So, Michael, tell us how your system works, and I'm just curious kind of where you are in this process in terms of acquiring customers, putting it to work.
Give us some kind of size and scope.
Yeah, So we are software company, as you guys said, and engineering company, and we help our clients puilding the infrastructure place which is needed to provide this high power. I mean the utilities for example, I mean they have huge challenges to provide this power. I mean it can take seven to ten years to upgrade the distribution system
to provide this power. Right, So this is why we help our clients to design, plan, install, and run so called micro grids, which is basically co generation at the place where you charge the electric vehicles.
So who are your customers right now?
Well, I mean we have a diverse portfolio here.
I mean, of course the engineering company is installing this infrastructure to provide the power, but there's also of course fleet management says providers who really want to implement electric vehicle trucks and all this. We have multiple clients here, but mostly engineering companies installing micro infrastructure, micro rates, and eating infrastructures.
How has business been given the challenge that we've seen over the last couple of years for American companies to sell evs, the idea that they've gotten a little too expensive for consumers, the demand that a lot of these American companies thought would be there. Look what happened with four, looking happen with the GM. Even Tesla is seeing a sales decline this year. What has your demand been like? Has it held steady or has it been affected by what customers are doing?
Actually insteady, Yes, of course there's uncertain the current blended market. But I mean almost thirty percent of all the people shopping around from new cars are still considering elected vehicles because elected vehicles are fun to try to fear cheaper. I mean, I mean, I'm on my fourth electric vehicle and I would never go back to a gas car, right, So no of us. The market is stable and it's actually increasing.
Hey, so give us a little idea. We are Bloomberg is we always like to throw out there. Give us an idea. I know we've been asking about customers. We are on your website, Walmart, bloom Energy, Generaic. You've got some academic universities as u US San Diego, Georgia Tech, but there's a lot of other companies. It sounds like you guys are doing a lot of research with folks. But give us a little bit more idea of where the businesses and and the growth that you are seeing, whether it's top line.
I'm assuming you're not profitable.
Yet or is that we are.
But the thing is we are really rooted in research because what we are doing is a methodology which really helps you to install.
Infrastructure, meaning.
Generators, natural gas generators, bat or as renewables at the place where you'd charge your electic vehicle where you need the power for a micro If we call this migrant right, And that can be a technical challenging process and it needs to be standardized so that you can do this really quickly and at an efficient cost.
Right.
And this is why we still do a lot of research and we at the cutting edge of research also when it comes to new technologies. And this is why we're working with universities because we don't have only this power problem on the elactic vehicle side. I mean, if you think about data centers, right, you also want to get a lot of power now from the utility system
and they're talking about small modular reactors these days. So we have to research all these technologies and bring them in our software platform to providers, to our clients to efficiently plan those microgrids.
Hey, Michael, in terms of infrastructure here, what is this administration meant for your business? Certainly he's close with Elon Musk, but that hasn't really helped the EV industry. He wants to roll back these tax credits. Does that affect your business?
So far?
It hasn't affected us, because I think it's it's I mean we I mean, as I said, electric vehicles are for real and they're not going away, right, And and the project takes the projects that we're seeing to take a year or two years or whatever it is, so you're not just canceling them because of uncertainly that we're seeing right now. So so far we actually have a nice growth in the micro space, which is not only the elected vehicle space. Uh and and we actually grew in better than last year.
Michael Stadler, you're gonna have to leave it there. Thanks for joining us. Do appreciate it. Cto and co founder of Zendy joining us from San Diego.
Let me drive.
Oh no, no, no no, this is not a twin.
Honey, Please, I want to try it.
It's a good question time.
This is the drive to the clothes.
Plums for music.
Well driver held.
Don on Bloomberg Radio.
All right, TikTok, everybody, We've got just about eighteen minutes to go until we see the closing bell. Here are the closing bell on Wall Street. Busy little Tuesday. Charlie and Bel Maloney just breaking down the trade here. But we're off our loads of the session, but still down about one point six percent on the Nasdaq one hundred and down about one percent on the S and P. Tim One of the stories that was really interesting to me reading in is what investors are up to, slashing
holdings of US equities by the most on record. That was according to BAA's latest survey, underscoring the massive rotation that's underway in global markets. So we saw fund managers reported being about twenty three percent underweight in ustocks and tim I think that was a plunge of about forty percentage points from the pre be A survey.
Wow, it's a dramatic shift, and it shows just how quickly traders have ditched their optimism about American markets, with the S and B five hundred tumbling just about eight percent from an all time high back in February. Let's see what our drive to the Closed guests has to say about this. We've got Scott Ladner with us CIO at the RIA Horizon Investments. They've got about ten billion dollars in AUM joining us this afternoon. Hey Scott, good to have you on the program. I'm curious what you
make of this Bank of America survey. Is this a sign that it could be kind of contrarian, that it's a time to buy, that so many investors have slashed their holdings.
Well, yeah, I think actually that there is some truth in that. I mean, the.
Slashing of the holdings in the US makes a little bit of.
Sense, though.
Look, Trump, if Trump has done one thing, he is basically bullied, slash scared both Europe and China into actions that they probably wouldn't otherwise have taken. So, you know, expect to Europe, you know, getting off the debt break and basically starting to end money from a fiscal standpoint for the first time since really twenty twelve. It can be game changing for the revenue for some of those companies.
And then when you you know, you pivot out to China and you know they're clearly worried about what, you know, what Trump's terror policy, trade policy is going to do to their already somewhat weak economy. And you've seen she pivot off of common prosperity. And so you know, these these two moves, you know, which were really really you know, holding down the equity values in both China and Europe.
You know, Trump is kind of bullied them into changing those things, and that's actually to the benefit of that, you know, the equity hold you know, equity market send those two geographies, which are almost uninvestable for much of the last decade. Yeah, I mean the S and P five hundred dollars performance of the rest of the world has just been remarkable. But what does that do to US investors that buy US companies here? If we're seeing out performance outside of the US, what I mean, is
that going to continue? Given what we've heard from the White House and what we've heard from advisors that essentially they're not necessarily paying attention to them markets right now and that with time they will recover. So I think actually it makes the case for US equities more compelling, but not probably for another quarter or two. So you know that you know this is this is a time when you know, frankly, in the last five years, diversification
has been nothing but punished. So you've done anything other than invest in the Max seven or the top of the US market, you and you're a benchmarket really anything, you've gotten creamed, and so Benet you know you've just been you've been punished by by diversifying the last few months and probably for the next couple of quarters.
We think you're actually gonna benefited.
By by from diversification, and so you know, this is a this is a time when we're going to see some pretty good buying opportunities for US stocks. I mean, we're getting some of these things at a bigger deal than we would have otherwise had because folks are rotating out of US and into these other markets. We think that's probably more of a trade. But maybe a trade this can go on for a quarter or two, not for a year or two.
So you don't think, Okay, so you still think US will ultimately outperform by the end of the year versus European markets are not necessarily.
Not necessarily for the end of twenty twenty five, right, I mean, Europe and China had pretty big leads right now, so like in terms of like making up those leads,
don't know if we get there. But as we kind of entering into twenty twenty six, when some of the you know, some of these fairly challenging things that Trump's doing right now with respect to the you know, sort of the ideological shifts, you know, those might actually have a chance to pay start paying some dividends on the deregulatory front, or the taxes front, or some of these other things by the time we turn the calendar into
next year. So you know, I think there probably are some opportunities, but I'm not sure US is going to catch them this year.
Are you worried at all about a recession?
And do you buy the argument that we get from the administration that all right, guys, it's going to be a little tough, we could get have some economic pain, maybe a recession, maybe not. Nobody seems to want to kind of throw their hat into that ring definitively, it seems. But do you buy that idea that tariffs now, tax cuts later and that and maybe regulatory moves and that.
Will be an engine for economic growth?
Yeah, I do.
I do buy that.
And now we are clearly experiencing somewhat of growth slow down because everybody's just you know, we're kind of entering out slow down.
Like I'm seeing a lot of stories where companies are like, nope, you know it's it's we thought we'd be doing a lot of deals and we're not.
Well, look, if you can't plan, you can't invest. If you can't plan, you can't act. Like nobody can plan in an environment in which we don't really understand what the operating principle is going to be for seministration, we have some clues, you have some direction. You know, we have know this sort of the direction of these things, but we know nobody knows anything about the specifics of how, you know, how we're going to prosecute some of these policies.
And so that's until we get some of that detail and we and we will get it. I mean it's not we're never going to have it like, we will get it at some point, but until we get it, it's going to be it's just a really tough operating environment, whether you're a consumer, an investor, or a business owner.
Well, okay, so what do you do then? In terms of for investors, is it do you put new money into equities? We've talked about equities, you know, being cut back. Would you put new money into US stocks to oversee stocks?
Or would you play the fixed income world?
I definitely not play the fixed income world.
So you look, we think yields are probably about in the right right now, you do, yeah, and so you know, the yield drop It makes sense in the context of tariffs, which everybody thinks tariffs are inflationary, tarifts are deflationary.
No, I would argue with you because if you are putting tariffs on products that come in that obviously raises their costs unless somebody eats them, but it also gives an opportunity for domestic producers to say, well, if those prices are higher, I can raise my prices. There is some of that argument there as well.
There absolutely is.
You're right, Carrol, But I would just argue that taxing terifs, at the end of the day, are still a tax, and taxes are growth retardant, and growth retardant things are tend to be deflationary over time, so that probably it's not again not a twenty twenty five deflation story, like that's not That's not what I'm trying to say. But as far as like going forward, if we're looking at a ten year yield, you ten year old's going to care a lot.
More about it.
You think tariffs are a good idea.
I think if you can get so no, okay, simply no.
But here.
But there's a caveat to that though, which is important, And I don't think that people in the market are pricing this.
It's the state of the world.
So let me give you a state of the world which I think could exist, and.
Just got about forty five.
Yes.
Second, so the state of the world that could exist.
That would be interesting would be if the reciprocal idea kind of takes hold and other countries actually lower tariffs on the US, right, you might end up in a regime where you have lower global tariffs overall. Like that'll be a pretty big boost to global growth that I
don't think is in the market right now. But I'm not saying that's necessarily a base case, but that is a state of the world that is possible if under the sort of reciprocal tariffs agreement where like, hey, we just want everybody to pay sort of the same rate, all right, We.
Will certainly see mix for an interesting investing year, and no doubt about it. Got to leave it there, but thank you so much, really appreciate it. Scott Laudner's chief investment officer of Horizon Investments. As we mentioned, they've got about ten billion dollars in assets under management. Joining us right here in our Bloomberg Interactive Broker studio.
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