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The SMP is down by over one percent. A big part of this was the Bloomberg report overnight that we could potentially see severe trade restrictions if companies like Tokyo Electron and ASML continue to give China access to advance to semiconductor technology, and that whole situation.
Is weighing on the chip stocks.
And the current Bloomberg Global Economy reporter is joining us, and can you walk us through the potential what the Biden administration is thinking about.
So it's a pretty draconian next step. Essentially, what the administration talking about is making use all of something calledly foreign Direct Product Rule, and in essence that means that gives the US leverage over any kind of technology that includes any kind of US input or material or technology in any way. So it would be a big next step if the word to go around this route and try and put the clampers down on ASML and on Tokyo Electron, Like you mentioned. Now, the thing about this
is it raises questions in two ways. It's delicate dance for the US in terms of how it approaches this with allies. Could be diplomatic tension between both Japan and the Netherlands. Companies in the middle of this already say that they've been hit hard enough. And then on the other side, it raises the questions about, well, just how effective have the US policies been Because it was back towards late twenty twenty two when the US announces sweeping
measures on chip technology export restrictions to China. Back then it was expected to be a big deal and will. Clearly it's not necessarily having the impact that they wanted. So it's a potential major set, but raised lots of questions about where policy is going.
The same time, realistically, what do you hear from I guess the industry about the ability to continue or to try to really make a change in where chips come from, how they're manufactured, the trade flows on shoring friends shoring, How realistic is that?
Well, we know there is some shifting or production manufacturing going on of not just a chip chain, but other production chains as well. We know, of course that the big subsidies that the US have Roulette has attracted a lot of investment in the semi conductor space, So things are moving around, but there's still a lot of reliance, as you say, on some key, key kind of nodes in that and key companies like ASML and like in
Taiwan and the like. But the other sort of feeling I think among the macroeconomic side of this is that people are kind of on pause now with investment and spending plans until see where the US election goes in a few months. So, you know, the one hand, it could either be broadly speaking, continuity with current administration, or if it's a chaine of administration, it could be quite
a different approach, maybe even more hokish. That's what all the signals are, That's what our own interviewed former President Trump signals. So there's a lot open the air here, and I think this kind of potentially big step of the administration so late in the political cycle, I think is giving people poses just ask questions about where is US policies Ward Shawna going in the near to medium term.
I mean, of course, It's always hard to understand the stock reaction with these kind of headlines because political hedging has not really worked, and also you have some of these stocks that have had a huge run up anyway, so we have to sort of take that with a.
Grain of salt.
Do we understand though, what more trade restrictions will do to the global economy? I know the President Trump's team says that it's okay because we'll have lower taxes and more consumption, and it's going to be the other countries and companies that will pay for it, not the United States.
What do you think? What's your research tell you?
I think people are starting to focus on this now, alex in the way that they were during the last few weeks. The political cycle in the US has changed a lot, and I think both in the US and globally now people are saying, if there is a change of administration, what would it mean for the trade and flow of goods and capital and services. Obviously US China is a center of it. It's red hot, but it's
not just US China. Former President Trump is talking about putting, you know, raising tariffs and driving hard bargains with all trading partners who have a deficit with the US, So it's it's just cementing this idea of heading for deeper protectionism, maybe deeper mercantilism, certainly less kind of cooperation on the world stage. And then how does that flow through the prices and people at home consumers. It probably means more expensive productions are more more expensive goods to buy, and
that's the whole inflationary story. So I think there's a lot of uncertainty about where this is all going, but at the same time, people now are starting to focus hard on it in case of there is a change of administration in a few months in the US.
Certainly having an impact on the market, that is for sure.
End of current.
Thank you so much for joining us in the current. Is a global economy reporter for Bloomberg News, joining us from Washington, DC. And as you mentioned, Alex, really having an impact on the market. The S and P off one percent, but the NASDAK off two point three percent, so that's where you're seeing it. I saw the van k Etf Semiconductor ETF fun lost about four percent of its value today, so kind of across the board. But as you mentioned, Alex, we're coming off of those all
time highs. So this market was certainly looking for a little bit of a reason to pull back, and I think a little bit of political policy uncertainty that's kind of crypt into the market that would be the thing.
Here.
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So Alex Deeal alongside paulse we need. This is Bloomberg Intelligence Radio. We bring you all the top news and business, economics and finance and sometimes in politics with our lens of our Bloomberg Intelligence folks. They cover two thousand companies in one hundred and thirty industries worldwide. It was the business Week piece that has now been heard around the world. It was an incredible front page on what Trump would
do with taxes, teariff, the Fed, and more. It's a real deep dive into trumpanomics in a way that I have not seen yet. It's actionable, it feels realistic, and it's really boiled down. So we can really get a grasp on what a Trump two point zero and trumpanomics actually means. And we can thank Bradstone, the editor of BusinessWeek for Bloomberg to kind of put all this together for us. He joins us now from San Francisco to California.
Brad I found this to be an extremely helpful piece because if you listen or you read excerpts from interviews with Trump, it's very difficult to get to concrete ideas. And you guys did an amazing job of doing that.
How hard was it?
Yeah, thank you, alex Well. I mean, look, he wanted to talk. We'd actually put queries out to both campaigns. We heard first from from former President Trump. You know, this is Business Week, so our mandate is business obviously, economics the world order, and we went there to interrogate him about an economic plan that many economists think is a bit contradictory. I mean, President Trump talks about lowering inflation. The agenda is, you know, higher tariffs, less immigration, you know,
which which potentially raises wages. He talks a lot about lowering interest rates and then bringing members of the business community into his administration. So this is a topic he wanted to talk about. To put it in context, we talked to him two days before the first presidential debate and about two weeks before the assassination attempt. But even then, I think, you know, he is writing what he believes, at least and his campaign believes, is a heightened sense of momentum.
So Brad, that's there's a lot of areas here in the terms of economics to explore. Talk about taxes. How does he feel about taxes these days? He certainly had some big tax legislation in his first term, that's right.
And one part of his plan is to extend the Trump tax cuts. Another part, which he told us, was to lower the corporate tax rate. He told the Business roundtable that he wanted to bring it down to twenty percent from twenty one percent, if for no other reason that he likes big, large numbers. But then he said he would even get it down to fifteen percent if
he could. You know, the challenge here, of course, is you know that there's no they don't delineate any way to pay for this, to make the numbers partial out and do anything other than raise the federal deficit. And there's real there is really I think a paucity of specifics here, which is one reason why proxies have kind of tried to fill the void with things like Project twenty twenty five, which then Trump really distanced himself from.
But you know, I think, I think, you know, with the broad.
Brushstrokes we got is Trump wants to lower taxes and extend his tax cuts.
I also felt was very interesting is the myriad of views.
In relation to the tech industry.
So in the one hand of Klawer Tax's ya tech industry, he seems to embrace crypto clearly.
With JD.
Vans, there's sort of an embrace of vcs, but big tech is very complicated, and how did you parse through that?
There's some contradictions here, Alex. I mean, the first is, you know, he's he's he's obviously very pro American business, and yet he's he's turned on TikTok and believes that banning TikTok would only empower Mark Zuckerberg and Facebook. The second thing is, you know, in the in the first term, he talked a lot about cryptocurrency.
And how it might engender fraud.
He wasn't wrong about that, obviously, but now he's flipped on that as well. The bottom line here and the way I interpreted, is that for Trump it's all about personal relationships.
And he went and talked.
A lot about Tim Cook and how smart he thought Tim Cook was, in large part because Tim Cook went to the White House to ask for relief from the first set of tariffs. You know, he likes it when people come and you know, pay their respects or at least visibly look to be on what he considers to
be Team Trump. And so, you know, in terms of Crypto and a lot of people in that community are now pro Trump, and you know, in terms of TikTok where he's very popular on TikTok, and of course jeff yass one of the backers of Byte Dance as a Trump supporter. You can kind of see why these contradictions are sort of bundled into his views on technology.
Tariffs, certainly, it seems to be the topic, at least in the trading today. We've had both sides of the aisle talking about tariffs and tough tariff talk.
Mister Trump used tariffs.
Quite you know, liberally liberally in the first term words.
How's you think about tariffs these days?
It's interesting, Paul, you know, I have not spent much time thinking about President William McKinley, the twenty fifth president. He's from my he was from my former state of Ohio, and Trump brought him up repeatedly because you know, here's this nineteenth century president who, before the age of a federal income tax, was raising the raising tariffs and bringing in money.
And he said that McKinley is overlooked. Who knows what book club.
He's part of, but clearly they've been reading histories and he wants to raise tariffs. He thinks tariffs are underrated. He's talking about a ten percent across the board tariff. He's talking about raising the tariff on Chinese goods to sixteen percent or even one hundred percent.
And you know, he says they're a great negotiating ployee.
You know, he tried that in the first term, and obviously then you know, a lot of US companies, particularly tech companies, complained, and they did. They were quite generous in their carve outs. But this is a big part of Trumpanomics. And most economists think that companies don't pay those tariffs, they turn around and pass them to customers in the form of higher prices. So there. We pressed him on it, and I think there are some unresolved contradictions and tensions there.
What's also interesting, I was reading a JP Morgan note about commodities and what the Trump administration would do to commodities. Obviously that's my beat, but what they made the point is it really depends on the sequencing. So if you go to corporate taxes first, tariffs come later. Like the sequencing of how all of this works will really depend then on what the market reaction is. Did you get any sense of that.
In terms of how we would do it. I didn't, But I mean, one thing.
That impressed us, or is impressed upon us, is that in twenty sixteen, you know, he was unprepared to win, and he surrounded himself with people, maybe a bit impulsively, and he says that he would do it differently this time, that he knows who's loyal and who's not, and he's experienced, and he knows everybody this time, and it just seemed to us that they were you know, that he is prepared to move quickly in what order I don't know, but particularly if he controls both houses in Congress, that
they have an agenda that they're pretty much willing to implement that.
Blitz Creed Speed Jamie Diamond as Secretary of Treasury thirty seconds spread.
Yeah yeah, what did he call him an overrated globalist once?
Look, he's courting the business community.
I you know, who knows if Diamond would do that, particularly considering how former members of Trump's administration often ended up being treated somewhat badly or breaking with him. But yeah, I mean, I think Trump wants to go and it's very important to him that business leaders like him. I mean that comes through in the interview, and so he's doing it, but to court them as well.
Brad, thank you so much. Really, it was a great piece.
It was so helpful and it helps to bring perspective then to market reactions as well. Bradstone, he is editor of Bloomberg Business Week. So usually I have a routine. I have a routine on the way in, I'm like when I'm reading and how fast I have to it to get rid in?
And this article just messed up everything it does.
And the New Business Week gets a monthly now keeping the Business Week name because it's got some brand value and it's cool.
It is like thick, yeah yeah.
Yeah, And The first cover was Arnault talking about luxury. The second issue Trump. So they're killing it here, so twelve times a year.
Yeah, So definitely check it out. Guys, It's definitely worth it. If you're interested in anything Trump related.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on fo CarPlay and then Broid Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Joining us now for the market take is Sarah Ponzik, a financial advisor at UBS Private Wealth Management, and she's joining us from Local Rich in Florida. Sarah, it's so fun to chat with you. So I understand we're seeing a decline the NASDAK. I understand the S and P is selling off. I also see that small caps are still holding their own here. Is this real about Trump? Is this really about trade restrictions? Or is this the continued rotation?
Well, Alex, really quickly, I can tell you it's todder here than it is in New York right now, So whenever you sticking where you're at. But as for the rotation, look, yes, we've seen some political headlines come out. Yes, we are seeing semiconductors still off and we're seeing.
Another tech fell off.
But to your question, no, I don't think it's solely about headlines that you know, came out over the last twenty four hours.
Rather, what we're seeing.
Is a continuation of this rotation that really caught steam. And really we saw fuel added to the fire last week after CPI surprised to the downside for the third string month. So we're seeing, you know, this changing of the guards within the markets.
There's been talk.
For a while how long can the magnificent seven or large cap tech or semiconductors continue to fuel the way higher? And it seems like last week we did see not only a bend but a break with.
A really swi lift rotation.
I mean, you just look at small caps over the last five days of twelve percent. Meanwhile the Nazac's flack that just shows you the rotation, you know, right there and then so now the question becomes, all right, well is this going to continue?
So what is the thought here, Shrek, because I think you know, one of the concerns I'm sure you hear from your clients is that how healthy can it be for this stock? Market to be anchored by six seven eight names in terms of the performance a year to date, that doesn't sound like a healthy market.
How much of a risk is that for you?
Right, We do hear that question all the time.
And to give you an idea of just you know, how consolidated the rally has been. If you look at the amount of companies that have outperformed the S and P five hundred year to date on an individual basis, it's only twenty four percent, So not even a quarter of companies within the index are outperforming the index, which just shows you how important a few companies have been so really dragging the games higher. Now, is it a Yes, there's always concern over narrowness in the markets.
But at the same time, when we think about why there has been this narrowness in.
The markets, it's because these you know, large cap tech companies have been or become the epitome of quality. You know, investors have been flocking to quality names with high earnings growth over the past year and a half, let's say, and that's what's driven this.
Narrowness in the market.
So it hasn't been too large of a concern for us in particular, and we actually are still most preferred on technology, and we still think technology companies have a very important place in a portfolio.
But yes, seeing a broadening.
Out, seeing small taps perform, seeing some cypical areas of the market, like industrials start to catch up and perform better as well, that's definitely a well taken sign.
We are glad to see the broadening.
Of the markets, and it's very possible that what you could see then is this you know, internal rotation of the markets.
We're sure we might see tech pull back of it.
That's only natural and healthy given the fact that look look at semiconductors for example, this year, semi conductors are up about thirty and twenty twenty four alone and up for fifty percent over the last year.
So it would be healthy for us to.
See a rotation in the markets, see the old guards start to you know, hold back a little bit. But as possible, we could see the market continue, you know, if you look.
At the index level, continue to at least move sideways or move higher from here.
If we see other areas of the market that have underperformed start to outperform.
Going forwards, Yeah, that was kind of my question.
It's like is it a cell tech by small caps, which is sort of the narrative that we were starting to see yesterday. And if we get some impulse where small caps can't sustain this move that we've seen in the last five trading days, m tech still sells off, and it feels like we're in for a different, u different kind of sell off right right.
And when we think about this rotation that we're seeing, there's really four factors that we feel as though need to happen in order for this rotation to continue in a healthy way for the market to continue to prove hire. And what those four factors are are, you know, One, inflation needs to be contained, which for the CPI data we got last week, looks like as possible to The
Federal Reserve needs to start cutting rates. You know, we've been talking about it for a long time now, but we are as close as we have ever been, and we're finally seeing the whites of the eyes potentially of interest rate cuts and the market's fully pricing and a cut starting.
In September and to this year and continuing into next year.
The last two factors are probably more so where the risk is. So the third factor is that you know, economic growth needs to remain resilient here.
Sure, we had great retail sales data this.
Week, but if we see any signs that the economy is veering off, we could easily see investors, you know, start to flock back again to those high quality growth companies.
So there is a little bit of a risk there. And then the last one that I.
Would say is that we need to see earnings growth converge between you know, these seven companies and then the S and P five.
Hundred, actually seven companies.
It might sound surprising because we have seen you know, fantastic stock you know runs over the last year and a half.
Two years, but we're actually about to see in the second.
Quarter if you look at SMP earnings and you remove you strip out those magnificent seven, the large seven companies, this is actually going to be the first time since twenty twenty two that we're going to see earnings.
For shared growth for the rest of the S and P five hundred.
So we need to see that continue, and we need to see those earnings catch up, you know, with the earnings growth, continual double digit earnings growth that we've seen from those seven companies.
Alone, So you know, it feels like for this market, earnings are going to matter at this season. You know, it's not just the FED and the Fed's going to lift this market. Earnings have to come through. How are you guys thinking about this earning season that we're just kind of in your early stages, zo right, Earnings?
Earnings absolutely do have to come through. Well, I mean there's a couple of things that we'll be paying attention to. You look at the first quarter earning season, the amount of companies that mentioned artificial intelligence NAI and their earnings calls was just through the room. So are we going to continue to see them talking up AI? That'll certainly be an interesting trend at least to watch from the
numbers perspective. For us, it's really seeing, okay, are we going to see EPs growth for cyclical sectors and say, for consumer discretionaries start to move higher? If you look at where expectations currently are for the fourth quarter of this year, so not you know, not where we currently are, but future looking out a little bit further into the year.
The expectation is that we're going to.
See you know, year over year earnings growth for those four hundred and ninety three companies so again strip out those large seven of about eleven percent.
So double digit earnings growth.
Is the expectation for you know, the majority of S and P five hundred companies, not including those you know, tech.
And you know the large companies that have continued to do what.
They've continued to do best and make money and you know, produce earnings. So yes, starting this quarter, we need to see that that's actually going to be a reality and that we are going to see earning's growth come to fruition because like I said.
You know, we really haven't seen that since twenty twenty two.
Do you guys like the Smalls right now?
We do? We do. We see.
Look, if if you're someone who believes that interest rates are going to come down, which we are, you know, our economist prediction is that we'll see a FED break cut in September, another one later in the year will continue through the year. We're also you know, our our chief Investment office expects that ten year treasure fields will
probably end the year some around three eighty five. One of you know, the most pure ways to play a decline in interest rates is small caps, because those companies that have higher debt burdens are you know, at the forefront of the deck game given that they just have more debt on their balance sheets. So yes, we do feel as though right now, you know, if you don't have any small cap exposure in your portfolio, it could
be time to add some as the tactical play. But you know, small caps in general have more risks than large caps, so making sure you and take on that risk. But yes, we do, you know, see potential for small caps to outperform, you know, from here on out.
All right, Sarah, thank you so much for joining us. Always great to catch up with you. Sarah Ponsek, Financial Advisor, UBS Private Wealth Management. Full disclosure I am a client of UBS Private Wealth Management.
Tonio c full disclosure. I'm a fan of Sarah Ponzicks.
I know she's great. Yeah, Bloomberg News, Bloomberg Radio TV back in the day, and now she's at UBS, so.
You both have our biases there.
Yes, fair going down to down at Booler, Florida. So very good.
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All right, twenty twenty four. It's an election.
We all know that, and that means an election is certain to be pivotal catalysts for markets and companies in terms of legislation, regulations, enforcement, and other government actions.
Let's put some numbers on that.
Twenty five billion of health insured revenue that's at risk as subsidies expire, five to nineteen percent potential increase in required capital for large banks. Twenty eight percent corporate tax rate possible if Democrats sweep. So there are just a million variables out there that will be impacted by this election.
So what do you do. You go to Bloomberg Intelligence.
They've got a definitive research report on this election, the two candidates, the two policies, and what it can mean for banks and all types of companies around this country. Nathan Dean joints us here he's the mastermind of this report.
Forty two pages. It is Bloomberg Intelligence senior policy analysts. Nathan, I don't know where to start here because you've got the Republican Party and the Democratic Party clearly have different priorities as it relates to economic policy, regulatory policy.
Where did you start?
So?
I think what we did is we started with the report by looking at what are the key sectors to watch, and we really had five of them. The first one was investment banks, as you mentioned earlier, if President Biden wins, you know, you could see somewhere between seven to ten eight percent increase in capital requirements. If President Trump wins, that could be off the table. We looked at electric vehicles.
You know, the tax credits for the electric vehicles could be at risk during a tax reform debate next year. Like you mentioned, in terms of tax global manufacturers, President Trump has called for a fifteen percent corporate tax rate. In just a few minutes ago, Representative Steve Scalise said he's going to make the tax cuts for individuals permanent. So tax reform and the impact of manufacturing, and the other two were healthcareacter that twenty five billion dollar subsidies
that's really for seventeen and United Health. And then finally it was big tech, because whether you get President Biden or President Trump, more likely than not you're going to get a very skeptical Washington towards big tech, certainly both in Congress and also in the four side.
Nay.
Then the question then becomes what can he and this has been the question throughout his four years. Also what can he do on his own and what would he need a Republican Congress for?
Yeah, So, you know, I think one of the biggest questions we get from clients is what does the executive order landscape look like if President Trump wins? And I'd say about ninety percent of the time, an executive order is a fancy way of the president picking up the phone and saying to his staff, I expect you to do X, Y and Z. But there's a difference there. The difference is for trade, tariffs and foreign relations. The power of the presidency is a lot more powerful when
it comes to that. So when President Trump uses words like nasty calling the European Union, as he did in this Business Week interview that I recommend everybody read, you know, that's something that investors have to pay attention to. Now when it comes to tariffs, the President can certainly go out there and say I want to do this, but then it's going to be up for Congress and the
business community and so forth. But todentially try and influence the White House to either get to the appropriate amount or try in some cases stop it from even happening.
So are there certain industries that you know, I think about the healthcare industry. I'm trying to think about regulated industries, and healthcare is certainly one of them. And you mentioned the subsidies. But are the Republicans and the Democrats think differently about the economics of healthcare?
Yeah, it does. And this is really where the process comes into play, because that's subsidies. That twenty five billion dollars subsidies is Obamacare subsidies, and that requires an Act of Congress. And I think you don't need to be a Washington expert to know that gridlock is going to continue no matter who wins the presidency. So look for subdued actions from Congress when it comes to healthcare. Now,
the difference is on the regulatory side. On the regulatory side, and this is where you look at the FDA and
a lot of the actions they've been doing. You can bypass democratic opposition and just implement your own policies, but it takes time, and so I would say just general rule of thumb for a lot of the healthcare issues that are going out at the agencies after President Trump, if he wins, where the input input is new regulatory leadership, at that point, you probably have another eighteen months and
twenty four month window for any regulatory change. So for the healthcare industry, there's a lot of time to prepare for any changes. You'll know exactly what's going to happen well before it does.
Going back to the EV point, it definitely feels like solar EV's stuff like hydrogen from the IRA, like those are the stuff maybe potentially on the chopping block potentially where the President Trump win. But then the Musk thing is weird because President President Musk, what does that mean? Elon Musk has definitely become a big supporter of President Trump donating to super packs, and I'm wondering if that relationship will change the calculus to how President Trump sees electric vehicles.
Absolutely, you hit it right on the head. And we even say this in the report. There's a difference between headline risk and reality. So if you look at the electric vehicles, you can look at statements that President Trump and other Republicans have said saying they do not like these electric vehicle tax credits out there and so forth. But then you balance it with the Elon Musk and even taking it to grander scale on the Inflation Reduction Act. A lot of the benefits of the IRA are going
to gop led states. So what you have to do here is a take the statement. Okay, if President Trump says I want to do away with the electric vehicle tax credit, how am I going to do that? Most likely I'll do that as part of tax reform and via the reconciliation process, which means I probably won't have any Democrats going aboard with me, so I need all
Republicans on board at that point. If the Elon Musk starts whispering saying, hey, we like these tax credits for the eb world, then that change may not even be a high priority anymore. So I would just say that for a lot of the statements, you have to remember
short term risk versus long term risk. And as we see with every single election, politicians of both parties love to go out there and say I'm going to do X, Y and Z, but then when they get into power, it's XYZ minus a whole bunch of other stuff because I'm going to be a little bit more moderate now.
And Nathan, how about for our good friends on Wall Street, M and A bankers and lawyers. Under this administration, the regulator has been pretty tough, and it's been pretty tough to get big M and.
A deals approved. Presumably that would.
Be more Wall Street friendly M and A friendly with a Republican administration.
It really depends on the leadership that President Trump again, if he were to win, would put in place at the FTC and the DOJ. Because you have one side, you have the Republican business friendly view, the stereotypical Republican business friendly view. If you get somebody like Jamie Diamond,
I'm just picking on the banking execs. If you get somebody from Wall Street, like a Gary Cohne individual that was in his last administration, then you could just reasonably say that M and A activity will get a little bit earlier or a little bit easier. But if you get somebody that comes from the economic populist side of the party, for example, Senator Vance, the vice presidential candidate, spoke in favor of the FDAC chair will Lim and Kahn and said that she was one of Biden's best picks.
And so if President Trump comes out and picks it, e I'm a populist for the heads of the FTC and the DOJ, M and A made very difficult for the next few years. It really just depends who's going to get that nod, and that would come right after the election or right after inauguration at President Trumpe wins.
Now, obviously, what we're seeing in the market today is a steep reaction to tech selling off, but also the news that potentially President Biden administration is looking for other ways to curb foreign technology chips making it into Chinese things. So, ASML took you Electric Electron getting hit, are these kind of companies in this sector going to be hurt like no matter what, like either way, both administrations are going to crack down even harder on China. And how do we think about that?
So the answer is at a high level, yes. So the Biden administration has already even put out a proposal on Treasury at the Treasury Department has put it on a proposal limitating private equity investments into Semiconductor's artificial intelligence quantum computing in China being seen as tough on China's good politics no matter who you are. But the one thing that we're seeing from statements from the White House, but whether it's Trump or Biden, is that there's always
chances for flexibility down the line. Because the way this works is that the president goes out and makes a statement and then it's up to his staff to actually implement it. And as you go through this implementation, you often see instances where the president dials back because look, whether it's President Biden or President Trump, they have to look Jiji being in the face and say we're going
to do this. So I would just say that, you know, starting it right now, the answer would be yes, no matter who you are as president, it's going to be seen is difficult. But let's look at the geopolitical tensions as we get into twenty twenty five, and let's see if the president's stance has changes ending because ultimately what we could face with and say twenty twenty six could be dramatically different.
All Right, Nathan Deane, thank you so much. We appreciate it.
Nathan Deane, Senior Policy on also Bloomberg Intelligence. If you have a Bloomberg terminal BI Laws laws Is takes you to the takes you to the dashboard that has all the policy research from Bloomberg Intelligence, and they got it neatly laid out there, and you can click on the election matrix and they got all the election research that's been written by all the BI analysts across Bloomberg Intelligence
how different administrations would impact their individual industry. So it's a great place see all that research in one place.
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Alex Steel and Paul Sweeney. We're live here in our Bloomberg and are Active Brokers Studio. We're streaming live on YouTube as well. To check us out on YouTube, good over there and search Bloomberg Podcast and that's where you'll find us. I'm just looking at the chart of Tesla all over the place. I mean it stocks flat year to date, but it's up seventy five percent from an April twenty twenty four low here, So it's just been
all over the place. I think it reflects the uncertainty in the market as to ultimate demand for electric vehicles on a global scale. Taly Miller joins us. She's a chief business officer at Re Automotive, joining us via Zoom from Tel Aviv, Israel. Tally, thanks so much for joining us. I wonder in your business, because your company is in.
This EV business.
What's your view of kind of what we're seeing in maybe some waxing and waning in demand around the world for evs.
What's your view?
Hi, good morning, and thanks so much for having me. What we see as we are focused on the EV commercial market and I can tell you that we see more and more demand driven on the one hand by fleet asking for electric trucks as well as the infrastructure being ready steadily, So we do see a growing demand on our side.
So why is that?
So?
Why will the commercial vehicles and fleets be easier to move over than like all buying an EV.
Sure, So the commercial EV market has been growing, I would say slower or started picking up slower than the passenger EV but we've seen more and more demand recently, and it's mostly due to the fact that the fleets understand that there is a strong side on the total cost of ownership, so the overall unit economics, that makes a lot of sense for them to transfer into EV In addition to that, the infrastructure is being put in place,
and therefore this combination makes it more attractive for them, and that's the reason we see this growing demand in the IVY commercial space.
So I mean, but I think one of the challenges, just certainly in the in the automotive and personal use space is cost and the relative high cost of evs and the inability to bring those cost down.
And profitably build vehicles at a lower price point.
Is that how do you view that issue overall and how do you think that'll play out.
That's a very good point, and indeed, this is one of the elements that is key for our customers. They call it overall the total cost of ownership or overall it's not only the acquisition costs, but then it's what does it take when you use the vehicle. So commercial fleets are being used most of the day, so let's say ninety five of the percent of the time the vehicle is being used, and therefore the fact that it's electric rather than internal combustion makes it more favorable overall
on the TCO. This is a feelback that we get from our customers fleet customers such as pens Key and you Haul with which we work.
There's other ways to sort of also move away from fossil fuels, right there's hydrogen, maybe hydrogen cars at some point, fuel cell batteries, biofuels, e gasoline. Are you noticing a rise in any of those options when it comes to commercial fleets.
Overall? What we see from again from a reperspective, is we are really agnostic to power. The first trucks that we put on place are in the medium duty sector are electric trucks, and this is where we see a lot of demand right now. But eventually we are completely agnostic. Since our corner technology the core of what we're doing. The technology can be applicable to any source of power.
Are you seeing different demand in different parts of the world, And I know your company is in the US, They're in.
China and other parts of the world.
It just feels like in the US might be behind some other parts of the world in terms of consumer demand or just user demand.
Yeah, so overall, indeed, there is a difference between the different locations in the world. So we have started our activities in the US market and this is where we see a lot of demand right right now. We have certified that We're vehicles in the beginning of the year, were actually the first vehicle to have certify the full by wire and see a lot of demands for that.
In Europe there is demand but for a slightly different vehicle than the ones we see in the US on the commercial space, and China is is that, I would say, a different market in this space. So we are currently focused on US.
In Canada, we talk.
A lot here about traditional car companies and then sort of the upstarts, right, I mean Tesla that an upstart, but Rivian, Lucid et cetera. Volkswagen plowing but five billion dollars into a tie up with Rivian Automotive. What are your thoughts about that they're going to jointly develop a battery powered vehicle and software. It helps the German carmaker get a boost to US company technology and Ravine gets a lifeline basically, what are your thoughts from your perspective on this deal.
So I think it's a brilliant deal for these two companies. But also this indicates the market about the readiness of legacy OEMs to integrate proven and superior technologies. So from a VW point of view, indeed, they integrate that the technology the software defined vehicles and and for even is great because they can tap into the supply chain of VW and they're together they can bring an attractive vehicle
from a technology and cost standpoint for the market. What it shows is shows that legacy OEMs are ready to integrate now uh technologies, exteriory technologies that are proven and that are superior into the core of what they're doing. And therefore it's very relevant for us at a re audibilive.
All Right, Talley Miller, thank you so much for joining us. A. Tally Miller is the chief business officer for Re Automotive. It's a public trade company on the nasdack.
R EE is the ticker.
She joined us via Zoom from tel Aviv.
Is your worth company is based here.
But it just goes, you know, we saw some news, you know, just really our the last six nine months, the us OEM's auto companies just dialing back their EV rollout, either timetable volume targets, things like that, and they're basically saying that they don't see the demand. And that's kind of been the issue, you know, and so.
Is it price?
Is it the fact that you know, you can't charge it as efficiently as you can, as a lot of people would like, what's really holding the demand back?
Yeah?
And interestingly enough, when Bloomberg reporters talked to President Trump and editors and they spoke with them, they asked about EV's and President Prum said, I have no objection to the.
Electric vehicle, the EV.
I think it's great, and that sort of in response to if President Joe Biden's done anything with respect to the economy.
And then he says the cars don't go far enough.
They're really expensive, they're also very heavy, and this is all in that great Bloomberg BusinessWeek p So it's hard to like, that's different, Like that's different than saying, like EV stink, we got to go back.
To internal internal combustion enders. They don't go far enough, Like what does that mean?
Yeah, So it's just you know, it's kind of what I think a lot of people tell you performance versus cost, versus reliability versus preserving value in terms of the resale market. So there's a lot of issues out there, and you know, a lot of.
The bulls are still saying it's a bump.
In the road.
We're still going to move towards electric.
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