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It's chicking with Mike mcglohan.
He's our commodity strategiest down there in Miami Beach.
Hey, microsceine.
I guess predictable and we get a little ease and attentions in the Middle East, and we see.
Oil pull back here? How much should to the extent?
And let's assume that President Trump does want to find an off rampire and cease operations in Iran. Where do you expect oil to go and over what time frame by.
The time we get to the midterms, Paul, I think that front crudial contract will be closer to fifty than one hundred. Right now, it's seventy three dollars a barrow. That's the December contract. So on futures and come on. So like to say we're going where the pucks skating? Where the pucks going, Well, that's where it's going. The high was seventy eight, so the front contract was unable to get above one hundred, and now it's taking down.
But we have good reasons.
So I think that high we put in this year around one to twenty is going to last for years, very similar one to thirty in twenty twenty two and one forty seven in two thousand and eight.
And the key question is now we have the bottom line is we have.
The leader of the world's most significant energy producer net exporter of crudel natural gas who wants prices lower, and there's election in November.
So to me, that's where it's going.
So you see it all lining up. How long does it take before we see prices at the pump? How diesel prices propean prices start to fall in tandem?
Scarlett, I'm glad you went there.
So we got to four or three ninety six or so in the average gallon of gasoline country, I think that's the peak, right around a four diesel, right around five dollars and thirty cents.
I think that's probably the peak.
How much lower they go, good example, we've never gone this high, and gasoline typically drops around two dollars a gallon. I think that's going to happen. There's one key theme. There's a key point this morning, our morning meeting, Chris Kane, our equity strategies pointed one thing that's happening, and thats CB five hundred drop below its two hundred day movement average.
But volatily is still too low.
So what I think is, once we have volatily coming from the energy market and the gold market tricking over the stock market, that's part of your pressure to make all these prices go lower and potentially have crude aill go back to the level I've been looking for forever, which is forty.
Dollars a barrel.
That's been the bottom for three times since two thousand and eight.
So, Mike, there are reports that there has been as a result of the war and attacks by Israel Iran, some damage to some of the infrastructure in the Gulf region here, does that argue for maybe a little bit higher than the normal levels given there might be a supply constraint for a number of years.
Paul, that's part of that global recession that's really help hurting the rest of the world.
World.
The US is a net exporter of crude o, natural gas, corn soybeans and wheat, and the key theme.
There is probably natural gas.
For the rest of the world, most knownly Europe, that's a problem a lot of that Qatar natural gas cut out might take years to bring that back on. But in the US it means a glowing glutt will have to export, so that's why it's really significant. But this to me is part of that trigger for that global recession that we already are heading to, potentially hard because
they're all fighting tariffs. So now it's about as long as the US can repress the ability for a RAN to have an offensive capabilities to close the straight, which we're kind of getting. Their goal's already figured that out, then this is probably a peak we're going to see for years.
And Crewdill this year.
I'm glad you bring up gold. I wanted to go there next because we've seen gold parrots' losses. It's now down only two point one percent, but it's still a long way off from the peaks that it made at the start of this year when it hit a closing high fifty three fifty four. Has that bull run ended? I mean, is that the top here?
I out of blame.
I think that bull runs over Scarlett.
It's very similarly Inklings to nineteen eighty and the peak of twenty eleven.
As far as a high velocity.
Gold was the most expensive ever versus the Bloomberg Commodity Index at the end of February and the highest and almost fifty years versus sixty month moving average. So it is a tremendous front runner indicator for what's happened. It bought the rumor, now sign the fact, and now it's just way too expensive. Same and silver, and typically when you put in highs like this, you do at this kind of velocity, they last for years.
So I think it's going to languish. Thank you very much. Has been a great bull market and it's done.
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Here's the big take story.
I like it.
Tim Cook doesn't want to talk about retirement yet. John Turnas is emerging as his most likely successor.
Who's to blame for that. That's Mark Dermott.
He's a managing entner for a global consumer tech He's in Los Angeles, and that's the big take story.
Higgs. You know, we talk about Apple, you don't really talk.
About succession for mister Kim Cook, but he is sixty five, and I guess you have to think about it.
Yeah, And I mean he's a consummate planner, so you know that something's in the works there, yep.
And I think a lot of investors kind of looked at the Disney situation and said, Bolly, I hope we can do a better job in succession than they did at Disney. So we'll see how this plays that. But Mark Dermot, he is the man on the Apple story. Mark, thanks so much for joining us here. I was just mentioning miss Scarlett. We don't really talk about succession at Apple too.
Often, but maybe we should. What's your story today?
You know?
I think, actually, I know you were just talking about Disney. I think the Disney situation has actually made it a bigger level of importance within Apple's executive team and within the board there. They don't want a repeat of what happened, and clearly they picked the wrong guy a few years ago, and it seems like they got it right this time with Josh Tomorrow and Dana Walden, and I think Apple wants to get it right on its first try for
succeeding Tim Cook. Now, remember this is an interesting succession because this is going to be the first planned CEO transition in Apple's modern history, certainly post nineteen ninety seven brink of bankruptcy Apple.
Remember Steve Jobs stepped.
Down prematurely due to health reasons unfortunately before passing away, and Tim Cook was the COO at the time, so Jobs appointed him as CEO, and Cook has done a remarkable job over the last fifteen years. But this is really going to be the beginning of a new era, a real transition for the company. John Turnis, the senior VP of Hardware Engineering, is at the center of the action.
He's about fifteen years younger than Cook, ten to fifteen years younger than the rest of the other options on Apple's executive teams charge of devices engineering, so eighty percent of the revenue. The company brings in a brilliant mastermind engineer, someone who's deeply ingrained in the Apple culture. And I think as young as he is. This would be a continuity pick for Apple.
A continuity pick. Is he someone that investors are familiar with. Have they gotten enough exposure to him? Do they know what he's like and feel that they can trust that he can steer this company into the next century.
Well if they read my yeah, Well, if they read my article today, they'll learn a lot about him and perhaps become comfortable with the idea of a John Turnas as CEO. They've been pushing him to the forefront in events. The MacBook Neo that was introduced in early March March fourth, it was Turnus who did the introduction of that, and it was Turnus who went on Good Morning America to talk about the launch of the MacBook Neo as well. Obviously those are things that you would typically see Tim
Cook do himself. But obviously that Torch was past the Turnus for major products introductions.
So in terms of John Turnis, what is his special distinction? I mean, Steve Jobs was, you know, the head designer in many ways, he kind of was the innovation guru for Apple. Could see around corners in terms of figuring out what people needed before they did. And Tim Cook was a supply chain genius. That was his forte. What does John Turns bring to the table, That is really his distinction.
He's an engineering expert, right, he knows how to build these products. He's the one who takes these products from concept to manufacturing.
Right.
So this is someone who is really in charge of the products. And if Apple's going to remain a hardware centric company, a product centric company, he's the person to take them into the next fifteen twenty years. If this is going to turn into an AI company, a software company, services company, certainly not the right pick. So it really comes down to what Apple's board sees as the future of the company, and I would bet that they continue to see hardware as the very center of the action there.
Hey, Mark, When I think of Tim Cook, I think is.
Almost as much as a statesman as he is a corporate CEO. A statesman in terms of dealing with maybe the US administration as well as international partners, most notably China.
What do we know about mister Turnas in that regard, We.
Don't know much.
He does lots of meetings with regulators and some government officials around the world. But I mean, I guess you're asking about Trump that relationship is managed by one person and one person only, and that's Tim Cook. There's some government affairs folks involved with the Trump relationship, but this
is really a president to CEO relationship. And don't forget, you know, Donald Trump is going to be President of the United States until early twenty twenty nine, so we've got, you know, several years left of that three years left of that administration. And even if Tim Cook is no longer CEO while Trump is in office, Cook is still going to be managing that relationship.
Now.
I don't anticipate that Cook will be out before Trump per se, but I do believe Cook will be part of Apple, I would say for the next ten to twelve years, even if that doesn't mean he's CEO. I fully expect him to remain part of Apple as executive chairman or some sort of president role, even post CEO tenure, where he would be operating in that sort of government official capacity.
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Poll Sweeney and scarletfu here on Bloomberg Intelligence with you in New York City, And Paul, can you believe it's been just over months since the Supreme Court basically said, you know what, We're not going to go forward with those a tariffs. Yeah, I mean, there's so much has happened in March. It's kind of yes, kind of hard to believe that it's been about a month. But since then, we know a lot of retailers, we know a lot
of companies have been applying for refunds. They are seeking refunds for those tariffs that they paid since the tariffs were imposed. Steve Lamar is President and CEO of the American Apparel and Footwear Association. Of course, many of his members have a lot of money at stake here, Steve, just give us a state of the state of the world here when it comes to your members and how they are trying to secure refunds from the government.
Well, yeah, and first off, thank you for having me on. We were very appreciative of the Supreme Court taking this decision. It was the right decision. Really confirms that Congress is responsible for tariff policy article on section eight. You can look it up if you don't believe me. And we're really pleased to see the court made that decision. Our attitude is that refunds should be returned the same way they were collected, automatically, fully, quickly to the import of record.
You know, the individual that paid the tariffs, they should be the ones that get the money back. They can then decide what they end up doing with it, if it gets passed along to the consumer, if it gets passed to the workforce, if it's used for investment. A lot of our manufacturers they've had to put investment on hold for the last year because they haven't had the money to be able to make those investments. And now and probably one of the biggest pro manufacturing things that
have happened. All these manufacturers in our industry and in other places are going to be able to see that money again so they can be able to drive those investments going forward.
I think, Steve, a lot of people are very skeptical that this process of returning the terrors can.
Even work, will work. What do you guys think We think it will work.
We think it has to work, you know, Congress. Well, you know, whenever the US government takes money that they're not allowed to take. I mean, it's a well established principle. It's a very immutable law, probably more so than gravity. You know, they have to return the money, and they have to return the money with interest. In fact, probably half a billion dollars of interest gets incurred by the
US government every month. There is a delay, so there's a powerful incentive not only to repay the money that they've already taken incorrectly, but to do it quickly so they don't keep running up the bill at the taxpayer expense.
Do we have any evidence that the process has started that, you know, some of your manufacturers are going to get a refund in a week, two weeks.
Five weeks. I wish I could tell you those specific numbers. I'll give you two data points. One is the US government refunds customs tariffs every single day. They've been doing it for years and years and years. It is part of the natural rhythm. Companies import, they overpay their tariffs, get the tariffs back. So and you can look this up.
The Treasury Department reports this on a daily basis. Reality actually is the amount of tariffs that we're talking about, and the amount of refund entities that we're talking about is much less than what the US government does every year when they refund taxes to individual tax filers about one hundred and seventeen million tax filers in twenty twenty four, three hundred and thirty one thousand importers record, So you can tell the numbers are just a fraction when we
look at the tariff refunds. And the other thing is that the Court of International Trade, which is the court that has jurisdiction over these issues, directed by the Supreme Court, is in a very far along in a process with Customs and Border Protection to oversee the development of a system to ensure the orderly repayment of the refunds, again with interest to the importer's record. So that process is well and well advanced.
President Trump.
The administration remains very hawkish as it remained it relates to tariffs, talking about Section one twenty two, Section three oh one, blah blah blah.
How is that going to play out?
Well, the President is a big fan of tariffs, as you pointed out, and he is really looking at trying to recreate the system that was struck down by the Supreme Court. They've turned on one never used before provision of trade law, the section one twenty two. A lot of confusion, a lot of conflict about whether that's an
appropriate step to take. Section threeh one, which is a more established provision of trade law, is being used here in this situation as well, and there's a case there where maybe it's being used in a way that it's not normally being used. I mean, normally Section three oh one is an investigation in search of answers, but right now we sort of have an answer kind of in search of an investigation, because they're literally trying to recreate this system that they had in placed before.
Steve, we also have to ask you about the war in Iran and what that means for your members. Certainly, rising oil prices trickles through right away, and that has increased our costs at a time when there were already concerns about whether the economy was slowing down even before the war began.
Yeah, so we're obviously it's a it's a it's a terrible situation. We hope they'll be able to resolve this as quickly as possible to you know, wars is always is always really difficult. But you know, when you look at it from the lens of oil, oil is oil is more than just fuel. I mean it shows up in fabric and fertilizer, in you know, so many different ways, in freight, and and ultimately that can then become part of the final price tag that you as consumers pay.
And again that's just not just in our industry. We would see that really across the boards, I think, really looking beyond just our industry, which is very globally folk, you have really a lot of our economy is praying for looking for a quick resolution. So not only do we see the adverse impacts on oil, but also the adversee impacts on the logistics that had been.
Created as a result of this.
And keep in mind we still have the problem with the Red Sea, which hasn't fully returned to normal. There's some tentative steps there, but that's far from where it should be.
Steve about thirty seconds left with some hindsight, Now do we know who paid tariffs?
Who is paying tariffs?
Well, with hindsight and foresight, tariffs are paid by the importer of record. In some cases that gets passed along in some cases that gets totally eaten by the manufacturer, the importer whoever actually paid the tariffs. Really it is a case by case thing where you have to each individual company and infect on many of the different product lines will have very very different answers, So.
We don't like, I guess a lot of folks are saying, hey, it's certainly wasn't the exporter probably, So it's some combination of consumer the corporate food chains.
That's kind of where it's all kind of dealt.
With exactly right. Some tariffs are a costs that's imposted on the supply chain, and different companies will absorb or pass that cost along, and that will change over time, you know, ultimately, ultimately, ultimately over many years. Tariffs are costs that, like every other cost, ultimately get passed along to consumers, sometimes in the form of fire prices, but they make their way really throughout the entire supply chain a lot of differents.
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