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Alex Steel, Paul Sweeney, We're live here in our Bloomberg Interactive Broker Studio. We're streaming live on YouTube as well as check us out. There a lot going on as it does as it seems to be every single day from a policy perspective, news flow coming out of the White House fast and furious. That's why we check in with our next guest almost every day, Nathan Dean, senior policy analyst at Bloomberg Intelligence. He's responsible for all this, folks.
So if you want to complain to somebody, to go to Nathan Dean. Nathan, what is kind of the latest feeling within DC as to how this tariff situation may unfold? Here to now that the courts are starting to weigh in?
So I think the Washington and started taking the approach that you know, this terrif fight is not over. Obviously, the courts have said that you know, President Trump's authority on AEPA or this International Emergency Economic Powers Act is somewhat limited, and obviously we'll see that play out at the Supreme Court later this week. But you know, President Trump has other tools in his tool belt. Now I'll say things like section one twenty two or three thirty
eight or three ZHO one. But what you need to know is President Trump does have the authority under one twenty two to implement a fifteen percent tariff right away up to one hundred and fifty days. Three thirty eight can go up to a fifty percent tariff. Now this three oh one two thirty two that requires investigations. Where I'm going at with this is that there are other tools that President Trump has.
To implement these tariffs.
And so the courts came down on AEPA, and that's certainly that court case is going to play out. But if the White House decides to retreat and says, you know what, let's go about a different avenue here. And this is what Peter Navarro hinted at when he spoke earlier on Bloomberg Television. You know, they can certainly reinstitute these tariffs. It's just going to have to go through
a different process. The good news for investors though, is that the pro is usually a little bit more transparent than President Trump just implementing these via truth.
Social Does it matter, How does this read through to say the budget deficit, because raising revenue through tariffs was like a big part of that bill.
So it doesn't really impact it all that much.
So Congress is trying to actually pass this one big, beautiful bill, and they've known in the back of their minds that this tariff discussion is taking place, but it's not in the record, it's not part of the calculations of that bill.
So you know, it's almost like.
They're just keeping in the back of the mind and said, Okay, maybe we're going to be able to support this. But if you take out all the tariff for revenue and you just presume that we're not going to collect anything else, Congress is still going.
To pass this bill.
You know, the Republicans are fairly aligned with President Trump when it comes to extending these tax cuts and also for these additional one point five trillion dollars in taxes in terms of like no taxes on tips, no taxes on overtime.
Et cetera.
So the cost proportion of it is there, but I don't think Congress is really going to pay attention to it.
They're going to still pass this thing.
So what's the status of this tax bill? I mean just timing wise talked about getting lost in the clutter of the news here. Where are we with the timing here?
Yeah, so the White House wants this passed by the fourth of July. It's obviously past the House. It's now over in the Senate. Now the Senate is out this week, there's been discussions among staffers of trying to figure out what in.
The House will pass what's known as the Bird rule.
Essentially, are there provisions of this House bill that just won't work through the process of reconciliation.
Now, I don't think that really is all that important to.
The tax or the Medicaid or to the Inflation Reduction Act portion. But next week we should see the Senators come back and we'll start to see discussions of what are they going to pair back from the House bill, things like Medicaid work requirements, you know they would kick in under at the end of twenty twenty six that potentially geld get pushed.
Back very important to solar investors.
The Inflation Reduction Act, some of that language could also get paired back.
We'll probably see that play out.
Over the next two to three weeks, and then I think the Senate, if they had all their ducks aligned, would try and go for a vote, probably by mid to late June. But I don't be surprised if this just leads back another couple weeks and we see this in July.
Elon Musk apparently Ditch and d C didn't like the bureaucracy going to go back to his company. What does that do for DOGE, for cost cutting, for anything.
So there's two really aspects of the DOGE that's really important to investors, and that's obviously you know, what is the federal government spending outside of this one big beautiful bill aka the appropriations process? Now Bloomberg Government actually put out a piece this morning. They have a really cool chart in there that shows you the government expenditures by agency for the month of May for twenty twenty five versus twenty twenty four, and the agencies are spending almost
about half of what they spent last year. So DOGE has definitely done an importance. You know, the influence in terms of getting agencies to spend less. But ultimately it is Congress that needs to decide what the appropriations is and what is to spend here. That's going to come up in September, but it's also going to come up in a recision package. The White House will most likely send you to the House next week and they'll say, look, we want to codify a lot of these Doge cuts.
We need you to pass this.
I would say, though, even though the filibuster isn't subject to this, so just it requires a majority vote the House.
In the Senate, a lot of.
Times policymakers are like, look, I love the idea of cutting federal waste on paper, but a lot of that federal waste is also going to buy my district. So I'm not sure this package will continue or it will pass. And I will say, just at least at a first glance, we're not seeing many market impacts to this recisions package.
All right, I'm just looking at some BI litigation. We have some folks in Bloomberg Intelligence that just look at litigation because it impacts industries and impacts companies, and sure enough, tariffs are first and foremost here. BI litigation analysis thinks there's a sixty percent chance the Supreme Court will side with the Court's ruling and that teriffs may exceed the
President's authority, but it will be very close. So that seems to be what President Trump and this administration are betting on that they can get this past the court.
Yeah, you know, so that obviously, you.
Know that's my colleagues, and my colleague Holly from is the one that's leading this effort. She's actually chatting with
clients as we speak. But I will say that I was talking to her prior to coming on air, and she said that if the Supreme Court were to come out and say we are going to take up this case and potentially implement at stay, that could be indicative of their thinking going forward, because you know the red line that you showed before I came on the air, talked about how the Supreme Court could potentially take this
up this week. If we see signs from the Supreme Court that they're somewhat amicable to fast tracking this ultimately, it could be beneficial.
Now still it's very close to call.
But Holly's original timeline is that if the Supreme Court says that they're not going to take it up, and this actually may have to go through the court appeals and so forth. You would see an ultimate decision on this in the fourth quarter of this year.
What kind of questions are clients asking me right now, Like the world really changed in the last couple of weeks, Where do they asking you the most?
Well, obviously with today, you know, it's the tear for news and how our companies preparing for this are tariff's off as we speak, you know, And our response to that is obviously, you know, the White House has the ability to re appeal.
They have appealed.
But really it's just the future of what President Trump wants to do in terms of tariffs.
Obviously there was discussion yesterday the taco.
Trade, if you will, And what I will say is that President Trump truly believes in tariffs. He still believes in them. He believes them as a point of leverage and a point of negotiation. And so whether or not it's using AEPA or Section three oh one or Section two thirty two, tariffs are here to stay, and they're most likely here to stay for the next four years. But are you getting a tariff like one hundred and forty five percent tariff on China or are you getting
a ten percent tariff on the United Kingdom. Those are the questions that the clients want to know, and we'll see that play out.
Over the next few weeks and months.
And Nathan, I can't help but notice that the Democrats are awfully, awfully quiet these days. They've been since the beginning of President Trump's administration. And my understanding was, yes, they're a minority, but not by much and those razors, wh's a majority for the Republicans. It doesn't feel that way from the Democrats. It might overthinking then.
No, actually, the Democrats are somewhat irrelevant when it comes to tariff's.
And also the One Big Beautiful Bill.
Because tariffs, President Trump is doing this via executive authority, so the Democrats aren't involved. And when it comes to the One Big Beautiful Bill, they're doing it via reconciliation, which bypasses the Democrats. But the Democrats will be able to start to fight back later this year because once the Big Beautiful Bill passes, that's.
About it for Congress.
And so come September you're gonna have things like the government funding or a government shutdown, and so forth, and the Democrats are really going to try and start positioning themselves for next year. It's just that the Republicans are using procedures and processes at the moment that bypasses them, and as a result, Democrats are really struggling to figure out how to combat that.
All right, Nathan, really appreciate it.
Thank you very much, Nathan Dean, Bloomberg Intelligence Senior policy analyst. He's definitely really busy, but I feel like maybe things have.
Calmed down a little bit for him.
Yeah, and he's relative from what this breadth.
Of knowledge is just amazes me about how all that stuff works.
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.
Let's get more on where we are with Harvard and President Trump. I'm the latest evolution of this drama. Janet Lauren, higher education finance reporter. I joins us now from Bloomberry. I didn't think you probably didn't think you'd be this busy in this particular way.
All right, what's the latest well the latest well right now, commencement is going on.
Okay, so that's the speakers this year.
Yesterday, i believe it for the class date was Kareem Abdul Jabbar for the undergraduate cool. So you know, this should be in some ways a really happy celebratory time for Harvard, which it is, and especially for students and their parents and their grandparent parents who welcome.
But just like last year, there is a palpable.
Tension at Harvard around graduation. Last year the question of protests.
What was going to happen an animal rights.
Activist through glitter on President Alan Garber during the ceremony.
And today, you.
Know, there is also a very palpable tension, but it's a very different one, especially with international students, because it's unclear what their fate is. It appeared that yesterday the State Department has perhaps widened that ban on visas regarding all all those with Chinese affiliations at Harvard. It keeps things keep changing. It's hard to keep track on what's actually happening. But but today, you know, should be a happy day for the students at Harvard.
Harvard it just feels again I have zero affiliation with Harvard. They're being targeted here by this administration visa VI Ivy League schools or the University of Texas or the University of Florida or anything like that.
Do we know why, Well, Harvard is the biggest prize out there.
It's you know, we've talked about this before.
It's the oldest university in America, it predates the country. It's the richest school with a fifty three billion dollar endowment. And in some ways it's more symbolic. What else if you want to make a point, everybody in the world knows the brand of Harvard very powerful, you know, almost in some ways like a luxury good, especially when viewed overseas. And yesterday President Trump talked in the Oval Office about Harvard should cap the number of foreign students at fifteen percent.
It's more like twenty seven percent now, and I think that number is surprising to a lot of people, that these campuses have almost more than a quarter of the students are from other countries.
Well to that point, there is a headline that the Harvard case judge is now expanding the block of president comes foreign student ban. Does that imply that more foreign students get to stay on are allowed to sort of stay at Harvard or apply to be at Harvard.
Well, keep in mind that just because the judge has blocked something doesn't mean if you're a student, you're going to be making decisions based on what's going to happen over the next two years or four years, and you want to be able to stay and complete your education.
And I have to think, oh my god, I have to transfer.
I have to find a place that has an open spot and would take me.
And you know, with my affiliation with Duke University, I saw this at the board level the first Trump administration, and now again it's the exact same thing is happening.
Now.
They're seeing it drop in applications and interests from foreign students because they just don't know what the situation is going to be a week from now, a year from now, three years from now. All they know is I don't feel as welcomed as I thought I would or I'm going to need to be. So I'm going to look to Canada, I'm going to look to Europe and things like that. Hell hard, do you think Harvard really is going.
To fight this?
Do you think just all of these things across the whole. I guess, you know, panically what's going on.
Well, Harvard has already filed two lawsuits. The first one was in April in response to a letter that the administration made lots of demands, and Harvard doesn't disagree with some of the things the government is asking for, but it does disagree in the way that it is going about it. So Harvard also has to feel like it's supporting its constituency, the students.
They have to show that they're supporting the students.
And I think in some ways the Harvard faculty has never felt more unified. You know, there's lots of different factions there. Certainly the humanities faculty are not going to agree with some things that the that the science faculty and priorities, But in some ways this has unified them and perhaps alumni because they somebody is standing up to Trump and Harvard is a very rich entity.
Jenet, fascinating.
I'm sure going to be talking to you more in the future regarding this and other topics in higher education. Janet Lauren, higher education financial reporter for Bloomberg News, joining us live here in our interactive Growker's studio.
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.
Let's go to match. Docky, chief portfolio manager for Equity said. He said, Northwestern Mutual Wealth out there in Milwaukee, pound for pound, some of the best money managers.
In the world a Milwaukee.
I have no idea. Why, Matt, what do you make of this market? I mean, we were down twenty percent, we've retraced much of that decline, and now you're to date, we're basically unched on the year.
Where do we go from here?
Well, good morning, thanks for having me back. Look, I mean, I think the market's like they stay pretty volatile. You know, while you know we've round tripped, you know, the Terriff and Duce losses in April, by no means that we have the woods, just in terms of the uncertainty that still remains in terms of what trade policy is going to look like a month or two or three from now.
And so you know days like today where you have really strong arrange reports after the clothes you know from the video kind of carrying the open higher and then kind of with sawing back down. I think you are kind of par for the course. Is we kind of think through kind of how markets should behave from now to the end of the year, just given you know, certainly that still remains.
So when it comes to Nvidia, is this the ballance that we are all hoping for? Like does that really help unleash animal spirits or is that just confirmation and everything's okay?
But that's harder for upside.
Yeah, for Navidia specifically, I think what's unusual about to set up into the print was you know, this was one of these times where the video was somewhat cheap relative to expectations, and so it comes into the question whether or not, you know, the buyside and salesite we're mismatched in terms of where those expectations sat, and you know, just.
Kind of get into it a little bit deeper.
You know, back in April and the video traded south of one hundred dollars a share, and if you believe kind of the base case that a lot of cell side shops are pitching you know, we're talking you know, six dollars plus per share in counter your twenty twenty six in terms of earnings per share. That makes na Vidia sub s and P five hundred multiple name and you know that's where kind of the stock was heading
into the print. Of course, it had kind of rebounded with the rest of the market in April, but Navidia had historically had always traded thirty five forty times forward earnings and it was sub twenty and so you know, this has just been a little bit of a sigh relief if you're in the video shareholder that the growth story is still intact and some of the concerns about supply chains and being able to really ramp up you know, rack scale black roll systems in the back half of
this year, it seemed to be in the rear view mayor.
So Matt does the Nvidia results last night a little bit better than expected. That that give kind of a green light for tech broadly defined here is that can that can can tech continue to be a leader in this market?
Well, if Navida doesn't work with in tech, what else is really going to work with in tech?
So and it should.
Probably be a little bit a little more specific with that within semic inductors level were just going to keep it to that kind of industry. Look, how many companies can you point to that have to sacrifice ten and a half billion dollars for the pigh margin revenue over two quarters in the form of base twenty revenue still outperform the overall market on a year of date and one year basis. There's not a whole lot of them, And the video is the only one that I can think of that's been able.
To clear that hurdle.
But you know, I think if we kind of also think about the setup into the quarter, you're kind of clearing some of the China uncertainly by just kind of removing the revenue piece altogether for them specifically, That's not the case for the rest of technology. There's still terror related concerns for a lot of other names within tech. Navidia is just kind of already kind of pass that, and we'll probably have to see some others also pass that into the future.
So we got this trade ruling and then we got in Vidia. Does this clear the runway for the S and P and now test again record highs or is it too early to call that?
You know, I think it's too early to necessarily, you know, believe that you know, the trade related and teriff related fears are behind us. You know, while a lot of the terriffs were rescinded via the quarter over last night, the other avenues to restoring those tariff levels, whether we're talking about Section two seventy two, which is still in front of us, or some other of the authorities that the President has to restore the tariff levels country by country.
So you know, that uncertainy from my perspective, still remains. And and so you know, the runway from here, I think is is really just a function of kind of how the labor market holds in. We see sentiment data really bounce around quite a bit, you know, with the consumer with you know, the April second announcement kind of really plunging consumer and business confidence, but then it's starting to ramp back up a little bit during the Instagram period.
If we're looking at the April credit card data or what we've seen from the Chase card data in the weeks of May that you know, sour sentiment on the consumer level hasn't really translated to changing spending behavior. In fact, it's kind of been a little bit better than expected and at least in line with trend level growth that
we saw earlier in this year. And so while consumers are telling us that you know, they're they're anxious about kind of the outlook, yeah, that isn't affecting their behavior and that's that's ultimately what drives startings.
All right, good stuff. Really appreciate that you, right, Matt, Matt Stuck you vice president, chief portfolio manager of Equities at Northwestern a Mutual.
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