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President Vladimir Zelenski joined Bloomberg News Editor in chief John mclethwaite for an exclusive sit down in Davos, Switzerland. He commented on the relationship between Donald Trump and Chinese President Jiji Ping. Let's listen in the.
Phone call during the war not to watch not enough. I think, yes, he can push putin to piece. I'm sure. I think that's only President Trump is strongest ancient zimpion. I think that there's no other allies who can really do it. Yes, because his economy put in a corner after sanch after everything depends worthy much of China.
That was Ukraine President Bottomla Zelenski speaking with Bloomberg News editor in chief of John Micklethwaite, want to go to Ras Mathis and now Bloomberg News Director for Europe, Middle East and Africa. Zelenski also telling Bloomberg News the peacekeeping troops in his country must include the US. That's quite a headline. What's the reality of.
That, Well, it's a reality that he says any peacekeeping troops supplied by others, including the US, won't be nearly enough. He says he needs many, many more peacekeeping troops to really act as a proper deterrent to Russia in this case. And it's also acknowledgement even in Europe amongst allies, it's going to be a tricky question to get commitments to a sizeable number of peacekeepers. You've got governments in Europe
that are fairly fragile at the moment. We've got political chaos still in a couple of countries, elections coming up in Germany, and the mood at home in these countries may not be about putting their own troops potentially directly in the line of five. Because that's what Zelenski is talking about in this interview that we had at Davos. It's not about peace keeping troops back way back behind the lines in cities. It's possibly being directly in harm's way.
And so you can imagine for Donald Trump, who really is averse to troops going into conflict zones and to war as a whole, like committing to put US troops potentially in harm's way. That's going to be a very big call.
Okay, let's step back a little bit. Ros what's the feeling within your part of the world about President Trump and his administration being able to bring about some type of ceasefire in Ukraine? Is that are the odds hiring? Maybe there were several days ago, and is there center timing.
That certainly seems to be the direction of travel. It was happening even before Donald Trump took office. You could see that both Russia and Ukraine are position themselves to get in the best possible space to negotiate. It's clear that, you know, after years of war here that it's grinding on. Russia is still making advances, and the mood, you know, not just outside Ukraine, but increasingly inside Ukraine is do
we move towards some kind of negotiated solution. And you can see in the comments from Zelenski in the interview he's really acknowledging that. And so Donald Trump is going to give that a big push, that's for sure, and maybe he's the one who can really push Vladimir Putin to the table, but it's definitely the direction of travel either way.
How do you think the next few weeks play out in relation to the chess pieces on the board?
Here?
An interesting thing is whether there is a phone call between Vladimir Putin and Donald Trump. Is at a preliminary step they have a phone call. Trump has said he is willing to meet Putin in person. That would be a really big meeting. Obviously, you know, thinking about just location where they could do that for a start, and what are the stakes having a face to face meeting.
But we're looking for that conversation to happen, and then how does that conversation lead us towards the idea of maybe a formal meeting between the two, and then at some point do we get towards a full sit down? And Ukraine obviously saying it needs to be very much part of any of those negotiations. It cannot be that Trump and Putin do a deal on the sidelines, and very much that's been a vein of the comments in the interview we had today.
So Ross, what is this broadly defined? You know that your sources over there in Europe, how are they viewing what's kind of transparent in the last few days here with President Trump at being sworn in and maybe some of the announcements coming out of the White House about of various topics. What's the feeling in Europe generally, Well, you.
Can see that it's interesting the conversations at DUBOS because they're very very upbeat on the US, be it CEOs or others, and they're talking about the opportunities in the US economy and the US market and very downbeat in turn on Europe. But for leaders in a mea, it's concerned about are we going to see a trade or are we going to see this really descend into high level trade friction protectionism?
What does that look like?
Is there a fight between the US and Europe over regulation including a big tech for example, So a lot of worry about how does this play out in practicality. It's very clear Donald Trump is fast out of the gate on a lot of things, and he wants to get a lot of stuff done and he wants to do it fast.
Hi, Ras, thanks a lot, really appreciate it. Rids Mathison, Bloomberg News director for Europe, Middle East and Africa, someone we talked to you yesterday on the show is like, if you have something that Donald Trump wants, like, now's the time to show it. A lot of that's in the ground. I don't quite know what Europe brings to that part of the table.
No, and as kind of you know, we just look at europeconomically a lot of challenges. There are a lot of headwinds, you know, even with its leading economy's most notably Germany and France.
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Let's get to Trump Day two here. So the latest, of course, was now talking about ten percent TARA on China, President Trump saying yesterday that other countries are bigger users, though it's not just China. He also mentioned the European Union and the three hundred and fifty billion dollar deficit with them joining us now. Wendey Schiller, Professor at Brown University, Professor, are we overestimating or underestimating what the tariff reality will be at this point.
Alex, I mean, I think this is really a sort of restraint by you know, literally restraint by Trump in response to I think who you saw at the inauguration inside the capitol, you know, big business, big tech, you know, on a number of fronts, not just tarifs, but also thinking about visas for workers.
You know, he's trying to balance.
This so that he doesn't impose a big shock to the economy which would raise prices for goods, while he's also deporting a lot of people who do work in the shadow economy, and labor costs are going to go up to So having all that happen means that his promise to reduce inflation will be much harder to keep. So I think that's where he's sort of walking the line of keeping his word but really keeping an eye on what the impact would.
Be on inflation.
Wendy, I guess one of the issues that I think has kind of been put on the back burner just a little bit is some of these cabinet nominees they still have to go through Senate approval. Are we can have any real challenges laid down by the Senate for some of these nominees, well, Paul.
You know, I would have thought heg Seth would sail through, you know, And you know, there's a pretty good margin in the Senate in terms.
Of their margin of votes.
They fifty three, so unlike the House where they can't really move without one person defecting then installs everything.
So these are only the purview of the Senate.
But you know, new allegations have come out about Hexseth's behavior, and this question is that a liability Trump really wants to assume and be commander in chief, and so I think that's a little bit tenuous. I think Telsey Gabbard's a little tenuous, and Robert Kennedy Junior.
Still there are some questions among some Republicans.
It really depends on where the Senate Republicans want to draw a line in the sand with Donald Trump.
We haven't seen any of that line yet.
But as sort of reaverb comes back on some of the decisions he's making to executive.
Orders, there's more pressure on the Senate to exert itself.
We saw a little bit around the pardon of January sixth individuals. There was like a touch of that in the Senate, but nothing's sort of full throated, how long do you think that's going to take for us to get a good read on?
Well, I think Republican senators are going to pick their battles.
Part of that's going to be who's up for reelection, Like Joni Ernst on the hexeth nomination. She's from Iowa, She's got reelection at twenty twenty six. They're worried about being primary. Do they really think Trump will still have the mojo to get somebody really good to primary them
a year from now? They're calculating their electoral future, and then the other senators are trying to figure out what's going to be the most important thing to try to block from the Trump administration when it comes to either their beliefs or their state, it's too early for them to make that move or.
Make that call.
The only ones I think who could step out are people who are not up for reelection for another four years because they don't really see themselves.
As tied to Trump electorally.
So this is about electoral politics, but it's also about the center prerogative. Rand Paul's gone out there about using the military in terms of deportations.
He said, no, he doesn't want to see that.
So we'll have to look to the Senate because the House is just barely hanging on in its majority. The Senate Republicans will be key to either moving things forward, objecting or stalling.
Uh, Professor, what's the latest on DOGE. What's the filling in Washington, DC about what kind of efficacy that unit could have?
Well, well, this is where labeling matters.
Department of Government efficiency sounds really official, like it's a big cabinet department, but Congress has to create cabinet departments.
You can't just do that whole cloth as president.
So now it's really just sort of a commission seless agency which the president can create. In fact, Obama created sort of a similar thing on digital technology. So when you think about that, that makes it sort of smaller and maybe a little bit less scary.
It'll be people who are embedded in all of the agencies and.
The departments that say, you know, do we need this many people? Can we do this more efficiently?
You know?
How can we streamline cost expenses and jurisdiction? You know, can we get the federal government to shrink not only in its size but in its reach? And I think that's where Trump can skirt any kind of congressional stalling or objections.
Does it make a difference. Can those little tinkerings make a dent in the deficit or budget?
Well, you know, everything adds up when you think about it, not just federal employees, which, by the way, Trump is ordering back to work following a lot of big industries, a lot of big companies are saying it's time to come back to work in the office.
And of course we've.
Seen the damage to local economies big and small in terms of the loss of all those people coming to and from work. So Trump is going to make the claim that getting people back in the office is there for the economy, and if that happens, if local economies pick up because of that, he'll be proven correct.
In that assumption.
Hi, Wendy, thank you so much. As always, Wendy Schuler, Professor at Brown University.
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David Kopla joins us. He's a founder, chief executive officer and chief investment strategist at Mainstay Capital Management. Hey, David, early into this earning season, but again, you know, double digit earnings is kind of what analysts are forecasting, and some people see that as a head risk. Which what's your sense as to earnings and kind of support for this market.
Well, I think that earnings are going to be the catalyst this year. We need earnings to be strong. We're looking at twelve percent earnings growth our estimate for the fourth quarter. As you said, as the introduction of the segment. We had just blowout bank earnings last week, fantastic. We had Netflix come through with very good news, and we think that we'll have a strong earning season and we'll
continue to have strong earnings into this year. There's some pretty lofty forecasts, you know, looking at fourteen to fifteen percent earnings for twenty twenty five, and there are some problems that could come. But you know, if we look what's happened so far. Everyone was worried about tariffs. I was quoted in an article last week about tariffs that I think that President Trump will use tariffs more as a negotiating tool than just a simple economic tool. Just
impose them, to impose them. He's threatened tariffs at twenty five percent on Canada and Mexico, ten percent on China, but hasn't done anything yet, hasn't his His announcements on at with everything in the last couple of days at least have been pretty benign. So the market has read that as good news because that would be certainly an impact because of impact costs, input costs, potential inflation driver,
that could be an impact on earnings. But so far, we continue to look for good earnings in twenty five, and we're seeing good earning surprises so far for the fourth quarter of twenty four.
So to that point, will and I'm kind of laughing at myself as I say this, but I mean it will twenty twenty five be the year of the stock picker. Will this finally be the case that you may not see the whole index rise as much, but individually some of these sectors, some of these names can really outperform.
Yeah, you know, we hear that all the time. I mean, we hear it all the time. This will be the year of the stock picker. Right now, it's time to pick stocks. You just can't buy the market. I would say in this year that is going to be true. It's important to us as tactico asset allocators. You know, That's what we've been talking about our clients and the other people we're educating, is you know, in an election year,
there's so many people that moved the sidelines. Look how much money went to money market funds last year just because of uncertainty or such a conviction about if this candidate wins or this candidate wins, what that'll mean for the market. What's really most important are what are the policies of each of those candidates. The thing to do
is stay invested. Twenty twenty four prove that again best election year in decades, right for the markets, And as we roll into twenty twenty five, we're doing well again. But it's we're seeing where policy is going to matter, and we're already seeing where that's affecting these different sectors and different companies. Look at Oracle, you know, with this five hundred billion dollar project that's been announced they might
participate in. They've rallied on that news. So it is going to be going through sector by sector, industry by industry, which with the policies that are going into effect which will be favorably impact which won't. And yes, that will drive I think more of a selection of at least sectors versus stocks, and or sectors and stocks versus just being in the index.
So, David, one of the stats I see thrown about a lot money market funds and now it's close to seven trillion in assets. Is it fair to think of that as fuel for potential stock and bond rallies or is that just money that is in money market funds and don't expect it to come into risk your assets.
I think it's fair to think of it as fuel or dry powder for the markets to a degree. As I said, we know a lot went into the market or went into money markets last year because of concern over the election. I think that'll start coming back out.
But also we have now the highest interest rates right, the highest yields on money market accounts that we've had in years over a decade, and so people can enjoy a four and a half five percent return in a money market account with a guaranteed return and feel very safe about that. But you look at last year, there were people that did that and then saw what the
market did and looked at that opportunity cost. So I think that as Trump rolls out his policies, we see that the economy is doing maybe better than some might expect. It certainly doesn't look like a recession right now. That we could see the markets continue to do well, and we'll see that money come back in which came out a lot right at the end of last year early this year. And really, you know, when we're setting a record for money market accounts, that's a lot of cash on the sidelines.
All right, we appreciate it. Thank you so much for the insight. Looking forward to how this year unfold.
I got to be honest at.
David Coodluck, Calendar, CEO and Chief Investment Strategy.
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