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Here's a really special treat. Sitting next to me in studio in New York, Mark German, Bloomberg Chief correspondent on Global Technology. I worked here for thirteen years, and I don't think I've ever seen you in person. You're usually on the West Coast, but like you're real.
He's forty here last week as well, So I don't know what's happening.
My goodness, I was off last week.
Okay, So obviously we're talking about this news that Apple is going to add about twenty thousand US jobs. To your understanding, how did this come about from Apple?
Okay, So during the first Trump administration, Tim Cook other companies, we're obviously very worried about tariffs, right, and so their strategy was we can try to make a deal here. What does Trump want? Trump wants his supporters to know or see that he's bringing jobs back to the US, bringing money back to the US, bringing manufacturing back to the US. Apple doesn't want tariffs on the phone, and it wants to keep as much phone manufacturing in China
as possible. We don't have to get into the reasons why there's a ton of them. Okay, So you have these two sides, right, there is a universe in which both parties can get exactly what they want.
It's like a trade.
Right, And so you saw that strategy in full form this morning. Trump for months, obviously the Secondministration, has been talking again about bringing back jobs, has been talking again about moving things to the US, has been talking again about extra tariffs some goods from China. So Apple comes out with the press release this morning. We're investing five hundred billion dollars in the US over the next four years, which,
by the way, that's Trump's term, right, he just started. Okay, twenty thousand new jobs AI server manufacturing, Fox con in Houston, doubling our manufacturing fund from five billion to ten billion, setting up a manufacturing academy like a school in Detroit. So you ask yourself, what's really going on here. They want Trump to know that they're investing heavily in the US. And since we're doing that. We don't want tariffs, and so the spin to Trump is that we're doing this
because of you. The reality is somewhere in the middle. The reality is that Apple has been investing as part of its business operations in the US from the very beginning. The reality is in twenty twenty one, Apple announced the four hundred and thirty billion dollar investment in the US. The reality is that Apple hires four thousand R and D employees a year in the US. Anyways, what's actually new here? To be fair to both Trump and Apple,
there is a bit of an acceleration. So their typical spend on the twenty twenty one US investment plan eighty six billion dollars annually. Okay, the new plan one hundred and twenty five billion dollars a year annually. So you're getting a forty billion dollar Trump under Trump, and you're moving from four thousand people on the R and D side hired annually to five thousand people. So incremental, sure, but definitely an acceleration.
Okay, one minute, is there a quid pro quote here? Do you think Apple actually already has a deal with President Trump that they will be exempt from tariffs?
No, okay, But.
Tim Cook went to Donald Trump's office last week and presented this to him, said, we're going to do this because of you, man. Oh and by the way, we don't want to pay tariffs. And Trump knows that Trump doesn't care about giving Apple or a Prieve on teriff. He's happy to do it. And he's happy to do it and tell people that he did it. Because Tim Cook is investing half a trillion dollars during his presidency.
He can go back to his supporters, his base, he can go back to Congress, he can go back to the world and tell them that the world's biggest technology company, the most famous company in the world, is investing half a trillion dollars. It's biggest investment commitment ever, right because of me and for Trump, that's awesome. Yep. And for Tim Cook, not having to pay tariffs is awesome. And I think that's good enough to get some sort of tariff for prieve. And by the way, let's say Trump
doesn't give them a tiff for prieve. Who cares? Right, I was doing this anyways, if I'm Tim.
Cook, you're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten Am Eastern on Apple Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Alex Steel here alongside Paul Sweeney. This is Bloomberg Intelligence Radio Happening right now in Hollywood, Florida. Is the BEMO Metals Conference and Metals and Mining Conference. I used to go back in my day when I was covering gold. It's really cool you get to talk about metals, and we're lucky enough to talk now to Kathleen Quirk, President and CEO of Freeport Macmaar and Copper and Gold. Kathleen,
it's a sincere pleasure. If I take a look at your stock versus the copper price, you usually track each other in the last couple of months. That hasn't been the case. Is that a demand issue? Is that a supply issue? How do you explain that.
Alex is good to be with you and you need to come back to Hollywood.
This is a great conference.
In terms of the stock price and the copper price, we've seen somewhat of a disconnect in recent weeks. I think there's some concern in the market about China and about the trajectory of copper prices as we go forward.
So there's some risks that people are discounting the current copper price, but as we look at the situation and look at copper demand going forward, Copper, as you know, is the metal when it comes to electrification, and we're looking ahead at all of the build out that needs to take place and energy infrastructure, not just in the US but around the globe. China has already been doing it, but we're starting to see it taking place in the
US and other places. It's very copper intensive, and we see a situation where demand for copper is going to be faced with a secular uplift of opportunity for growth and copper unrelated to cyclical drivers. So we're actually we're actually really bullish about where copper is today and what the likelihood for increases are for the future.
Kathleen, I think so far every S and P five hundred CEO on their conference call has been asked about tariffs and the impact on their business. What will a rising tariff regime potentially mean for your business.
We're following it very closely. We're looking at it trying to understand exactly what degree of terraff will be imposed. No one exactly knows what it will be, although companies are preparing for it. Freeport operates all over the world, but we have a significant operation, significant presence in the US, and actually we're integrated in the US. We not only have minds that produce copper, but we also have a
smelter that processes our copper. So we don't have a need as a company to import copper from other countries. Copper is imported into the US because there's not enough
current current supply of copper to meet the demand. But from a micro standpoint, as we look at what the market is pricing in for the impact of tariffs, actually the US price of copper, when you look at where US commodity prices are today and copper prices are today, the US price is something on the order of twenty five cents per pound higher than copper that's priced on
international markets. So actually, for Freeport, we're actually receiving for the copper that we sell in the US, we're actually receiving a premium to copper that we sell out of say South America or out of Indonesia. So it's actually right now in the short term a benefit for Freeport several hundred million dollars a year potentially. But the thing that we're watching, and the thing as we've talked to investors and other business leaders, is the impact the potential
impact of tariffs on global growth. China is a big consumer of copper consumes, likely above fifty percent five zero percent of the market, and so an all our trade war could impact global growth. It could impact copper prices, it could impact you know, say manifest it self through a strong dollar, which also impacts commodity prices.
So we're watching those macro issues.
But in terms of the on the ground today we are getting a premium for the copper that we sell in the US.
We have about thirty seconds and then you have to run to an investor meeting. So in twenty seconds, what do you think the copper price is going.
To do this year?
If we take a look at the lme are we looking at ten twelve thousand?
You know, it's very difficult.
We're not in the business of predicting short term prices, alex as.
You probably know.
We're in the business to control our costs, to invest wisely and prudently. We have a very positive long term outlook for comp upper. It just you can't replace copper today for four hours a pound. We need higher prices in the future in order to invest in the business and generate the growth and demand, growth and supply to meet the expected growth in demand. So we're very positive on the long term, but the short term is difficult to assess.
All right, Kathleen, we appreciate it. Please come back when we all have more time. We'd love to break down some more stuff with you. Kathleen Quirk as President and CEO of Freeport Macarin, Copper and Gold.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Otto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Alex deal here alongside Paul Sweeney. This is Bloomberg Intelligence Radio. We bring you all the top news in business, economics and finance through our lens of our Bloomberg Intelligence folks. They cover two thousand companies and one hundred and thirty industries world. We go now for a broader view. Victoria Fernandez is chief market strategistic Crossroad to global investments, and
she joins us now from Houston, Victoria. By the dip has been the norm, then there's been chattering that by the dip won't last and that we're on borrowed time for that. Where do you stand on that?
Yeah, I think it depends alex on the size of the dip that we're looking at. When we have small pullbacks that happen just in regular volatility due to the uncertainty around whether it's going to be fed policy or whether it's fiscal policy, and those are going to be things where I'm not sure you want to jump in and start buying a lot of names.
But I do think that as we.
Go through the first half of this year, we probably will have a chance as there will be a more significant pullback. I'm not saying we're going into recession by any means, but I do think you're going to see things start to pull back, probably led by maybe weaker earnings. As we get the first quarter earnings of this year, we see those slow down, We see the labor market.
Slow down, consumer spending slow down.
That I think then is going to be your opportunity to go in and find those areas within the market where you have seen sectors start to struggle and maybe form a trough and on their way back to have up upside trends. That's where you'll want to go in and start buying.
So, Victoria, you mentioned earnings were about little more than eighty percent of the way through the fourth quarter earnings there. What are your takeaways from those earnings and maybe from the guidance.
Yeah, so you know, Paul, surprisingly, earnings have been really good for the fourth quarter. I mean we're looking at what fifteen percent earnings growth, five percent revenue growth. I think energy is really the only sector where we have seen negative growth as as a whole for the.
Sector, So really strong there.
And I thought we would have start to seen some of the effects of the higher rates that we had throughout twenty twenty four. I thought we would see some of the effects of the labor market weakenings start there. But maybe it's getting pushed in to the first quarter earnings as tariff concerns pulled forward a lot of elements
into the fourth quarter of twenty twenty four. So strong earnings, and I think that's why you saw probably the S and P hit a high last week because that animal spirit is still running due to the earnings and that support to the economy, but that's probably going to start fading away. We saw it at the end of last week. I think we'll see some more of that over the coming weeks.
Yeah, and speaking of this is from Bloomberg Intelligence, just talking about earnings. Apparently companies that guided high on profit and sales have outperformed the S and P by six point seven percent within a day of posting results, the most since twenty twenty. I found that to be really interesting. I had noticed the dispariting effect there, So victoria though
despite earnings, we have seen rotation into European equities. Do we think that that actually continues or the US exceptionalism theme rains.
Yeah, I'm not surprised that we've seen this switch.
I mean, I know all morning long, we've had the conversation around valuation, right, and if it's still something that people are looking at, clients aren't asking about it. You've talked with Bob Dall, my CEO Mike Wilson earlier this morning talking about that. But valuations in Europe are much lower than what we're seeing in the markets here. So I think as investors say, where can I get maybe a bigger bang for my buck, and you're looking at
that valuation number makes sense, especially in the financials. Financials are doing well globally, so it gives you an opportunity to get in there. And you also have to start thinking from an FX perspective what that's going.
To look like.
Are you going to see continued rate cuts from the ECB and what does that mean for the euro and what kind of carry trade we're looking there? Obviously the yen carry trade people are starting to watch once again. So I think there's a lot of different factors, but it wouldn't hurt to kind of dip your toe a little bit internationally though, I still think globally you'll see the US over time.
Continue to be the strongest economy.
Yeah, I'm glad you you brought up international investing. Is I'm just looking at an email I got from Torston Slocket from Apollo this morning talking about the market capitalization with how the gap between the US and the rest of the developed world is widening, so that concentration in the US equity markets rerolled through the rest of the world is just getting more and more. To what extent is that a concern.
Well, concentration is always a concern for US, Paul, because you don't want to, you know, to use the old phrase, you don't want to put all your eggs in one basket. What we're starting to see in the US is some of those elements where all that concentration was those Max seven names. You're starting to see pullbacks in those names, and hopefully we will see things broaden out.
But it really hasn't been as strong as a lot of people thought it would be.
When you're looking at the other four hundred and ninety three, I mean, you look the SMP making it's high last week, but the advanced decline line for the New York Stock Exchange did.
Not meet it and go to a highlight.
That we're still only seeing about fifty three percent of the SMP above it's fifty day moving average, So we're not seeing that broadening out that we like to see for a sustainable move higher in the markets.
Will continue to watch that.
But we really want to see that concentration start to diminish a little bit and have more of a widespread uptrend in these names.
Does any of that include say, small and midcaps.
Well, we would hope so right small and midcaps is really kind of what will tell us, Yes, we have found our footing, we're feeling better, we like what's going on.
But look, we've seen yields move lower even though inflation expectations have moved higher. So to me, that's saying, okay, wait, these are growth concerns that we have right now. If growth and the concern over a lack of growth is what's pulling yields down, that's not going to be great for small and midcaps. And we also have to look at the fact that you know, we're hanging in around that four forty four to fifty level on the US tenure.
We've got about a third of all corporate debt in the US small, mid and large cap coming due over the next five years. That's going to be a concern for those small and midcaps when it comes to refinancing. So we'll have to see what happens there. But for right now, I think we continue to wait on some of those small cap names until they get some better footing and we see the economy on its way back up.
Victoria thirty seconds. What's the fixed income call here?
Well, look, we've been doing Barbell strategies in our fixed income portfolio. Is really wanting to capture some of the higher yields on the shorter end. As we think the Fed stays higher longer, that keeps those short rates higher, and we have seen inflation push the longer end up as well, although over the last.
Couple weeks there's been a flattening.
So I think maybe lock in a little bit of these rates on the longer end, take advantage of the short end, and we'll let the belly of the curve adjust to the volatility that we've seen.
Victoria, thank you so much for joining us. Always appreciate getting a few minutes of your time. Victoria Frenendez, chief market strategist for cross Mark, a global investment She's based down there in Houston, Texas.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Musk Federal work or Order divides Trump Administration. Elon Musk demanded that over two million federal employees submit five bullet points accounting for the past week, but he's getting some pushback from some of the folks that lead these departments, like the FBI, like the Secretary of Defense. Let's check in with Max Chaffckin. He covers all this stuff. He
does all the Elon Musk stuff for Bloomberg News. Is this kind of the first cracks I'm actually from Elon Musk with his and his heavy handed dog, I'd.
Say it's the most significant cracks that we've seen. You know, we've seen like little maybe micro fissures or something before. But in terms of you have Musk over the weekend for sending this email out or having this email sent be sent out, and then tweeting essentially NonStop about how important it is, how easy it is, how anyone who
doesn't respond, you know, doesn't deserve their job. Meanwhile, as you said, important parts of the federal government either saying publicly or semi publicly, like in an all staff memo, that they should not respond to these emails. That is significant and that I think you really see first of all, the extent to which you know there are probably going to be limits to what Elon Musk can do no
matter what Donald Trump says. And also, as you see these sort of stronger personalities, people like Cash Bettel, the new director of the FBI, get into their positions. They are also going to be power centers, and they are going to potentially push back or even challenge Elon Musk oft times.
We wouldn't it all just take President Trump to call up the naysayers and be like, no, what Elon says goes.
Yeah.
It's not totally clear what Trump wants here, although Trump did did do a truth social message essentially saying I want Elon Musk to be even more aggressive exactly, and Musk has taken that as permission, but Trump has not explicitly endorsed this. Uh. My sense is anyway, that that Trump wants Elon to be the bulldog here, right, and and.
Perhaps also take the heat at the same time exactly.
Maybe maybe you know, move the Overton window or whatever, make some of make some of these more extreme uh measures, extreme reforms, uh you know, attacks on the quote unquote administrative state, as conservatives call it, more palatable, more politically palatable. While while as he said, Alex not attracting the heat himself, allowing Musk uh and also his cabinet appointees to sort of fight it out even in public. Max.
In addition to being a Bloomberg BusinessWeek senior reporter, you're also the co host of Elon Inc. The podcast about Elon the people you talk to with this podcast. Is there any kind of consensus about how long Elon Musk and President Trump will co exist peacefully before maybe these two large egos kind of start butting heads and it may blow up to some extent.
You know, early on in the Trump presidency, you saw people who were who had sort of covered Trump, were close to Trump world, more skeptical about Musk. Right, see the fact that Trump has over the years had these people who kind of come into the center of his world, often these business figures who briefly have a run and are then forced out or end up in public disputes. You know, Anthony Scaramucci, the short lived Press secretary, being
kind of the most famous example of this. I have been, I'd say more optimistic that Elon Musk and down Trump will last. And that's partly because Elon Musk has showed and it showed again and again that as you know, as much as we think of Musk as having this big ego, he has been willing to kind of play second fiddle to Trump. We saw those that kind of relationship on the Sean Hannity Show last week where he had Trump kind of cutting in at times, essentially telling Elan,
I'll speak for you. So so he has been more willing than usual to sort of, you know, play play second fiddle to Trump, to embrace Trump kind of fully rather than trying to create a distance. And then the other thing is Musk has real leverage over Trump, more leverage than any of these other business guys have. He is he was the biggest donor to the in the twenty twenty four cycle and is a potential mega donor
in the midterm. So if as Trump looks to kind of rein in contain influence a Congress that is potentially going to be very difficult to influence, Musk is probably the most important set that he has because Musk can say, hey, if you don't support this nominee, if you don't support this budget, I am going to primary you, And that is going to be a credible threat. And we've seen Musk do that already. I think we're going to see him do more of that.
And just to the point we were talking about it, in the newsroom earlier that like, all the negative vibes are on Musk right now, not Trump, even if they believe the same thing.
That's like a really lovely foil.
Absolutely, yes, I think I think you're right, and I think that Trump has you know, it's hard to know like what he's doing. What's you know, definitely strategy and
what are just tactics or whatever. But it does seem like one of the results of this approach is that Musk is becoming more unpopular for some of these things, and Trump is kind of not necessarily touched by it, right He's people are mad at Musk for sending these aggressive emails, or for firing federal workers, or for you know, defunding charities that they know about, They're not necessarily taking it out on Trump. I guess the risk here for
Trump is that he becomes like must become just so controversial. Yes, And he's also just as we saw during the appearance at Seapack, you know, he's potentially erratic. He potentially on any given day, any given hour, he can make himself the story. And again, once you start getting to more tense things, for instance, negotiations of the budget that are coming or in Ukraine or whatever. You can imagine that stuff creating lots of risk and problems for Trump.
All right, Max, really appreciate it, really wonderful stuff. Max sat Chafkin, Bloomberg BusinessWeek, Senior reporter, co host of Elon Inc.
Podcast.
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