April 7, 2025 • 29 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Tesla Inc.’s stock extended losses Monday, dropping below a price at which Commerce Secretary Howard Lutnick predicted they’d never fall to again.The shares plunged as much as 9.2% to $217.41 as of 9:41 a.m. in New York, amid a broader selloff in global equity markets. Lutnick said during a Fox News interview on March 19 — when Tesla closed at $235.86 — that viewers should buy the stock, saying “it’ll never be this cheap again.” Chief Executive Officer Elon Musk told Tesla employees the following day that they should hang on to their shares.
Meanwhile waves of volatility shook broader markets anew, with stocks, bonds and commodities getting whipsawed by another deluge of headlines around President Donald Trump’s trade war that only reinforced the clouds hanging over the outlook for investing and the economy.
Traders looking for equities to snap back after a selloff of trillions of dollars were faced with a series of twists and turns on Monday. While the S&P 500 moved away from the threshold of a bear market, its bottom-to-top intraday reversal was the biggest since 2020 when Covid upended global trading. Treasuries weakened, with yields across all maturities higher by over 10 basis points — a stark turnaround from the plunge earlier in the day.
Today's show features:
- Dan Ives, Global Head of Technology Research at Wedbush Securities
- Bloomberg News Equities Americas Team Leader Eric Weiner
- Bloomberg News Cross-Asset Reporter Isabelle Lee
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business Week,
Daily reporting from the magazine that helps global leaders stay
ahead with insight on the people, companies, and trends shaping
today's complex economy. Plus global business finance and tech news
(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:32):
A couple of stocks making big moves today. Shares an
Apple fell as much as seven point three percent earlier
in this session, the stock on track for its biggest
three day sell off in decades. I mean, i'mgoing uncertainty
about the Trump Administration's tariff policies. Look a lot can
happen in the next ninety minutes, but that's how things
were earlier. Today, Tesla shares fell as much as ten
point five percent, extending losses, dropping below a price at
(00:52):
which Howard Lutnik, the Commerce Secretary, predicted they'd never fall
to again. Dan Ives is watching these moves closely. He's
globe ahead of technology at Webbush Securities. Yesterday he cut
his price targets on both of these stocks. He joins
us here in the Bloomberg Business Week Studio, Dan, I
want to start with Tesla because you are a longtime
ball I never thought I would see the day where
you became bearish on the stock. But this weekend you
(01:13):
lowered your price target from five hundred and fifty dollars
to three hundred and fifteen dollars. There are haircuts, and
there are haircuts. This is a big haircut. Why'd you
do it?
Speaker 3 (01:23):
I mean there's two reasons.
Speaker 4 (01:24):
One the political damage that Musk has self inflicted between
Doge and obviously everything we're seeing play out, you know,
along with the Trump administration. I believe it's destructed demand.
Twenty percent in Europe, ten percent in the US. Net
could be conservative, and I think that's something that's also
starting to show up in China, which is ultimately look
(01:47):
that's if you look at our new estimates, it's really
taken a huge haircut to what China growth is going
to look like. The second thing is when you look
at the tariff, tariff's ahead one, there's no way as
sure code and the reality that the US Car Company
makes cars in the US with all US parts. That's
a fairy tale, it's Pinocchio story. And I think for Tesla,
(02:09):
and for Musk, it's a moment of truth because you
can't be three percent CEO ninety percent Doge and the
brand issues. It's created Tesla into a political symbol and
that that is a very, very bad thing, and I
think it speaks to what's happened to stop.
Speaker 5 (02:26):
Do you see any hope that that image could be
turned around? And I asked that not so much in
terms of what mus can do, but maybe the question
that investors aren't going to start having to ask is
whether the company just needs new leadership altogether.
Speaker 4 (02:38):
Look, I mean, in the next four to six weeks,
he makes a choice, you step out of Doge. You
literally now back to CEO of Tesla. You could still
be some sort of you know, official unofficial advisor or
whatever it may be. But the reality is then the
brand damage would be contained.
Speaker 3 (02:55):
It would be stitches a black eye? Will it though?
Speaker 5 (02:59):
Because it's on him. I mean, it's not just people saying, oh,
we think Tesla is a bad car. They're looking at
the CEO and they're saying, you know, we think you're
you know, from not my words, you're a fascist, you're
a Nazi. These are things. These are and this is
a taint that you just don't scrub off overnight.
Speaker 4 (03:14):
And I don't think you scrib it all. There's no
way that you scrub it all. Like you said, there's
a permanent brand damage up tire. But here's the key.
You continue down this road, then that permanent brand damage
it becomes something much bigger. And the shame is that
and it's Look, the reason we kept the rating and
(03:34):
then downgrade is because I believe in one with Nvidia
to the best disruptive technology companies in the world. But
here's the thing. This is to fork in the road
for Musk now to make the right decision.
Speaker 2 (03:50):
Maybe email him with that as the subject line and
see if see if he replies, Hey, do you want
to get some breaking news? Apple plants to source more
iPhones from India over tariffs.
Speaker 3 (03:58):
We're going to talk about that.
Speaker 2 (04:00):
Andjustment at the Wall Street Journal is reporting that I
want to go back to Tesla though and talk about
China a little bit. Shaw me byd the technology that
those car companies have among other car companies in China.
You've spent a lot of time traveling around the world
looking at this technology. Do Americans actually understand how innovative
(04:21):
Chinese homegrown evs are no.
Speaker 4 (04:25):
And actually it almost speaks broader to even some of
the issues that would tell aout in terms of like
tariffs to constant that we can meet things here in
the US. Look China when you look on the EV side,
I mean, China's really front and center, because.
Speaker 3 (04:37):
That seems like a huge headwind for TESTAE well.
Speaker 4 (04:40):
Especially when it comes to BYD in terms of because
thinking about it right now, BYD they're going after Europe,
South America aggressively, going after rest of the world at
a time where Tesla this should be the time that
it's go time that you're going after the rest of
the world. But the political damage, the brand damage that
(05:00):
US is done self created has it's hurt that issue.
So my whole point is is that the longer term
for Tesla, this is it's one of those moments where
its future will be determined. A lot of it how
must handles next thirty sixty to ninety days.
Speaker 5 (05:20):
But this is still a company that gets pretty much
happen if it's revenue from outside of the United States's
a big chunk of that in China, at least based
on the numbers that they end up last year. So
if China goes or at least it starts to wither
to a much smaller percentage of sales, can he make
up those sales anywhere else in around the world.
Speaker 3 (05:35):
No?
Speaker 4 (05:35):
No, I mean that's why it's the hearts and wungs.
There's no When you and I was like, when you
look at what's happened in China, and we've talked about
over the weekend, all the issues with tariffs and everything China,
Whiz it do drives buy more domestic byd over Tesla,
Huawei over Apple. It speaks to the broader issue that
a lot what's happened here is that the companies that
(05:58):
take a moost on the Chin, we'll be Tesla and Apple.
Speaker 3 (06:02):
But with Tesla.
Speaker 5 (06:03):
Just one last question on Tesla, though, is what's the
alternative if I'm shopping for an electric vehicle? And this
was the advantage Tesla had for years, Really was there
really wasn't an alternative and not a viable alternative. Now
I know there are a lot more vehicles out there,
ev vehicles out there, but not necessarily at the scale
of production. The Tesla had no one careerly for the
pricing the Tesla.
Speaker 4 (06:22):
Price and look in that, but it speaks to what's
so frustrating about what's going on If this was Intel. Look,
these are disasters relatives like Okay, the stock is a
cheap of fallen knife Tesla. It's about the massive opportunity ahead.
But when Musk is doing in terms of it's a
(06:43):
self inflicted wound that needs stitches now surgery.
Speaker 3 (06:47):
And that's our whole point. It's like, you got made
the decision, let's get to Apple.
Speaker 2 (06:52):
Shares of Apple right now are lower by about four
point two percent. You cut your price target on the
stock to two hundred and fifty dollars from three hundred
and twenty five dollars. I want to start with the
headline that we're getting from the Wall Street Journal. The
company plans to source more iPhones from India as a
potential fix for tariffs. A big part of your note
has to do with exposure to China. Maybe in the
(07:13):
first Trump administration, this would be news that investors would
cheer because okay, well, India hadn't been hit with tariffs.
It was between the US and China during the first
Trump administration with global tariffs, does anything matter?
Speaker 4 (07:26):
But that's the whole I mean think about Vietnam. You
moved to Vietnam. Vnam's worse than China. And then like
when you do about India, it would take years to
even make that more than five percent, just given the
logistics and the nature of India. You know, in terms
of as Apple tries to move some stuff there, Look,
no company in the world is hurt more from ones
(07:49):
that came out of Trump's mouth in terms of Taiwan
and China tariffs than Apple. Yeah, because you're talking about
ninety percent iPhones are made in China, and the reality
and even over the way what we got meeking you
as it. Here's the deal. If you won thirty five
hundred dollars iPhones, we should make them in New Jersey,
(08:11):
maybe make them in California. If you like thousand dollar iPhones, yeah,
you make them in China.
Speaker 3 (08:16):
And that's just the reality.
Speaker 5 (08:17):
Well, it raises the question too, is whether Apple really
would try to move I mean, do they have enough
pricing power where if they have to raise the cost
of an iPhone by twenty thirty percent, I mean, I
don't know they've convinced people somehow to pay one thousand
bucks or more for it already.
Speaker 4 (08:32):
But that'd be massive demand destruction. And Okay, my whole
point is is that it would take tens of billions
of dollars to even move ten percent on the suppot chaet.
That would take three years. So that's why the reality
right now what's going on in terms of taffs and
the reaction investors, Okay, it's untenable and it would be
an economic army geddon to US tech industry, in my opinion,
(08:54):
is set US tech industry back a decade.
Speaker 2 (08:57):
Do you think the White House understands the economic armageddon?
Speaker 4 (09:00):
Look, I think it's easy to stand in front of
a microphone and I get it politicians talk. The reality
is when you spend time walking through fabs in Taiwan
Fox con in terms of China, you spend time there
and then you come here and you actually think, given
our labor for its manufacturing costs of weaver, that we're
going to meet that here.
Speaker 3 (09:21):
That is just, in my.
Speaker 4 (09:23):
Opinion, it's massively unrealistic. And that's why it just speaks
to what's happened with stocks because investors they're not this
has none the Republican Democrat investors know math in the reality.
Speaker 5 (09:37):
Yeah, I'm kind of playing devil's advocate here. But with
regards to Apple and its ability to find some transition
through all of this, is there a way that they
could maybe increase sales outside of the US. And I
bring that up because Tim Cook was just over there
in China for that big meeting. He obviously toured a
lot of other facilities and universities for some reason or another.
He seems to have a relatively decent relationship with the
(10:00):
Chinese government politician ninety percent. Yeah, and he's done it right.
He navigated the first Trump administration, and I do wonder
if maybe we're counting him out that he might find
a way to navigate through this.
Speaker 4 (10:11):
Look the five hundred billion they announced that getting some
sort of exemption here and there. Look, and that's something
that investors are holding out for. But the reality is,
if you want a body blown an upper cut and
cut the knees off of the it might be probably
the best technology starward in the world in terms of Apple.
Speaker 3 (10:31):
This does it well?
Speaker 2 (10:32):
Forgive me, Dan, I want to go back to Tesla
because I'm getting a question from a viewer right now
who says that Elon's brand damage has been evident for months.
Why Did you just downgrade the stock as a result
of this?
Speaker 4 (10:43):
That's a great question because I believe from everything we're
seeing in Europe and the US and deliveries going into
two Q that it went from something that was containable
five percent set to something much broader. And I believe
it was also our view that he'd hold the line
start to step back instead he hasn't. So the point
(11:05):
is that brand damage, when we model that out into
three Q and four QWO, that's us basically modeling out
what we believe the brand damage is going to do
to the next few quarters. And look, and I would
also say, like it's something where it's become a life
of its own and Tesla has become a political symbol
and it's a very unfortunate situation. But on but look,
(11:26):
it's self inflicted by musk.
Speaker 5 (11:28):
We're heading into earning season. At some point they're going
to have to address investors directly. I think Tesla reports
in mid April and then Apple not to May. First,
what do you think the CEOs and the CFOs for
that matter, can actually tell investors to sort of calm
them down.
Speaker 4 (11:42):
No company is going to give guidance, in my opinion,
during earning season. A guy, I'd be shocked if any
company gives God, if you want to play blindfold the
darts look, and I think the reality is actually blindfold
dogs actually is pretty fun. Beside the point it's look,
I think they're basically going to have to give some
sort of guard rails. How they're going about it, How
(12:03):
are these scenario planning? And that because invest want to
unders in worst case bea'st case. Best case.
Speaker 2 (12:09):
Dan, i'ves Global head of Technology at Webbush Securities.
Speaker 3 (12:12):
Thanks so much for coming. Great to be here, Good
to see you.
Speaker 1 (12:15):
You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2 (12:30):
I got the HCPI function on the Bloomberg terminal fell
as much as four point seven percent today rose as
much as three point four percent. As we just heard
from Charlie Pellett. We're down right now by about four
tenths of one percent. Lots of volatility, to say the least,
and that's exactly why we wanted to talk to Eric Wiener.
(12:53):
He's Bloomberg News Equities Team America's team leader. He's the
author of several books, including What goes Up, An oral
history of Wall Street from the Great to Press through
the Internet Bubble. In the nine to eleven attacks, he
joins us from just outside, Well, no, you're here today.
Speaker 3 (13:05):
I'm here. Oh my gosh, he's back with us.
Speaker 2 (13:08):
On Friday, he was remote and we relied a lot
on you, and we're doing that again because when you
wrote that book What goes Up, that time span included
Black Monday. A lot of people over the weekend. The
chatter online was a little concern that what we're going
to see on Monday is going to look a little
bit like what we saw in nineteen eighty seven, the volatility. Yes,
(13:32):
maybe the massive crash. No, I would say there was
in eighty seven. There was a palpable sense of things
coming on Glude and then on the Sunday before, well
it was the Saturday and the Sunday before, Targery secretary
at the time, Jim Baker came out and made a
(13:52):
couple of remarks.
Speaker 3 (13:53):
That really scared the market. So when you came in
on Monday morning, when the traders came in on Monday morning.
They were looking at it going, oh my god, you know,
things are going to blow up here. It was less clear.
I mean, I remember I was looking at futures last night.
They came down a lot, but they weren't down as
(14:14):
much as say, China was, So there wasn't this sense
that like the US was just going to bottom out.
If anything, it was going to be like more of
a global spread. So Black Monday was kind of a
more predictable route, and then it had to be lifted
out by the Fed. This was something where you know,
(14:37):
it's it's kind of building.
Speaker 6 (14:40):
What does that tell us then about the sell off
that we're in. If this is just gradually building, we
don't have one Black Monday? Does that mean.
Speaker 3 (14:52):
That's exactly it? So the concern, bizarrely, the concern is
that things are actually moving fairly normally, which means we
haven't hit a bottom, which means we aren't seeing panic
or capitulation, whatever word you really want to use. What
you are seeing is people desperately wanting the President to
(15:17):
back off of tariffs. So as soon as that rumor hit,
we went up. You know, we moved, as you pointed out,
you know, eight basis eight percentage points, so wham swing
up and then it gets taken out because that's not
exactly true. But there is a very simple cure. Like
Black Monday was, there were systemic problems. There were people
(15:39):
who were missing right, Yeah, there were people who were
going to have This is what I was watching for
last night, was like margin calls and situations where big
hedge funds had been caught off sides weren't going to
be able to make the payments, and now you have
counterparties that are wondering where the money's going to come from.
That is not the case. Now they're just begging in
(16:00):
Trump to get rid of the tariffs. In other words,
like you said on Friday, this is orderly. This is orderly.
It's and the orderliness of it is what's scary to
market pros because it's when things get disorderly you sort
of have that catharist we're still waiting for the caiss
(16:21):
The difference is that this was and you know, it's
been pointed out by many, many Wall Street people other
than me, that this is caused by one thing exactly.
Speaker 2 (16:31):
And I think, you know, one of the criticisms I've
see of this h on TV. Our markets guests we
speak to outside of the building online, is that they're
saying this is self inflicted.
Speaker 3 (16:45):
Yeah, it's like shooting yourself in the foot. Now, what Trump?
The question is what the goal is with these tariffs.
So if the goal is to reshure industry, that's going
to take a long time.
Speaker 2 (17:00):
We had Dan Ives from Red Bush sitting in that
chair right there, telling us an hour ago that he
spent time in Taiwan. He's seen the way that these
devices are made, He's seen the factories. He said, that's
not happening in New Jersey. No, and it's and it
would take forever to do.
Speaker 3 (17:17):
I mean, there's a reason why they moved there in
the first place as well. And so if we want
cheaper goods, that's part of this. There are a bunch
of different things that go into the creation of our
you know, our economic flow. This is like, what are
we what are we trying to do? Are we trying
to change the behavior of other countries? Are we trying
(17:39):
to behave change the financial system itself? What's the goal?
Speaker 6 (17:43):
I also think of you know, if I were running
a business, what I necessarily start building a factory in
the US and completely pull my operations from offshore, only
to then have potentially these tariffs reversed slightly and then
you already started building.
Speaker 3 (18:04):
Do you think that's a good point? Is that that's
this is all in the this is going to all
be in the earnings reports. Because what's going what you do,
if you're a CEO right now is sort of stand
pat So growth is going to be more challenging. The
idea of expansion becomes should we or shouldn't we? I mean,
you have to realize that there's a reason why manufacturing
(18:26):
move to Malaysia, move to Vietnam, and that's because China
has become more expensive. You know, because because as economies grow,
their employees expect more pay so they go to the
lowest producer. So the idea that like we're going to
bring everything back here, that's a multi year project with
(18:47):
dubious results and flies in the face of capitalism as
we know it. If the idea is to get countries
to change their behavior and negotiate with the president, then
we'll see what we can do.
Speaker 2 (19:01):
So when Emily came over here twenty minutes ago, the
S and P five hundred was in the green. It's
now down eight tenths of one percent. Why is there
such a lack of conviction directionally with today's trade.
Speaker 3 (19:16):
Because we don't really know what's going on. There was there.
Speaker 2 (19:19):
Conviction based on saving the white House port cold water
on Oh yeah, there was, Well, there was conviction when
we came in and we were down like four percent
right away or whatever it was.
Speaker 3 (19:28):
And then there was conviction on the upside because what
that leak was was something that the traders have kind
of been expecting, so that kind of played into their
priors and suddenly it just went whoosh, everything went up.
But the right now, it's hard to know where we're
going to go next.
Speaker 2 (19:49):
What you're referring to it is actually the most read
story on the Bloomberg terminal in the last hour. I
encourage everybody to go check it out. Jess Mett and
Bailey Lipschultz, Eshra Day. It's called this is madness. The
fifteen minutes that rock to stock market desks.
Speaker 6 (20:02):
We got to get these people on. At just after
ten am, shouting erupted on the Seabert trading floor in
downtown Manhattan. I won't read the rest of the story,
but that is the tough it's kind of wild.
Speaker 3 (20:13):
We were going through it as on the team as
it was happening. I mean it it was happening all
around us, and it was wild. We were yeah, go ahead.
Well I'm wondering.
Speaker 6 (20:22):
I mean, you've obviously seen a lot of market downturns,
a lot of single day crashes. How does this one
compare to history? When you think about this sell off
seems to be all focused on one very specific event,
whereas I don't know, I think the financial crisis obviously
(20:43):
there wasn't just one headline that traders were all counting.
Speaker 3 (20:46):
On or waiting for.
Speaker 6 (20:47):
But this is so specific to just one.
Speaker 3 (20:50):
So the the scary thing with crashes is when credit
is heavily involved, When you have your traders concerned that
debts aren't going to get paid off, or that you know,
rates are just you know, tumbling or rising. This is
not a credit meltdown. It's it's an equity meltdown. And
(21:14):
it's because stock prices went way up on AI speculation,
and then if growth is going to be paired back,
which is what tariffs would probably do, then you have
to take out some of this. So it's not as
scary I would say, as when you look at the
global financial crisis in like eight nine, there was a
sense like the knife was going to keep falling and
(21:36):
if you grabbed it, you know, it was going to
slide right through your hands and slice your hand off.
This is not that kind of thing. This is more
like it actually could be stopped by one guy. Like
that's and that's different.
Speaker 2 (21:48):
A weird thing happened to me this weekend Eric and
I was with. It was when I was with a
lot of friends who are about my age. You know,
we're kind of getting close to middle age. Think not
thinking about retirement, but people who have kids saving for college,
that sort of thing, and they started talking to me
about the stock market. These are normal people who don't
(22:09):
work in the industry. I have a good friend who's
trying to sell everything right now because he is scared
that something fundamentally is shifting in the economic landscape. He's
the second person I've talked to who's expressed concern to
me that those words this time is different. What would
you say to those folks, having studied other crises, I.
Speaker 3 (22:32):
Would say that they're the contrarian indicators. That's actually what
we want to hear. It's the same thing going up.
The famous story is Sidney Weinberg, who at the time
was the head of Goldman Sachs, getting tips from his
shoeshine guy and he walks back into Goldman and he's like,
sell everything because this is just going to be a nightmare.
And so when you start seeing people who normally aren't
(22:54):
engaged with this stuff having very strong convictions about where
things are going to go, they tend to go and
the other way. There really isn't a systemic problem here.
That's the thing.
Speaker 2 (23:04):
It's not a systemic problem, he argues with the markets.
He thinks it's a systemic problem with globalization and with
the president changing the world order that he grew up with.
Speaker 3 (23:15):
I just don't think that Wall Street is ready to
give up the global order. And the global order is
global like, so it's not just Wall Street. China doesn't
want to give it up, you know. So people want
the financial markets. They want the financial markets to work,
and the question is how and when that will start happening.
But I don't see us reordering away from capitalism because
(23:40):
even in the trade landscape, you have other countries that
are trying to band together to create trade alliances. On
their own without us, So this genie is out of
the bottle.
Speaker 2 (23:50):
Ericquener, good to see you, Thanks so much for joining us.
Really appreciate you taking the time today.
Speaker 3 (23:55):
Happy to be here.
Speaker 1 (23:58):
This is the Bloomberg Business. Listen live each weekday starting
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Speaker 3 (24:13):
Bloomberg eleven thirty.
Speaker 2 (24:16):
Lacross asset team spent all weekend working on it. It's
about how Wall Street is just collateral damage in Trump's
trade war. Bloomberg News Cross Asset reporter Isabelle Lee is
part of the team that worked on the story. She
joins us here in the Bloomberg Interactive Brokers Studio. Isabelle,
congratulations on this story. I know a lot of work
(24:36):
went into it. I just want to start a big
picture the investor class. It was a class that I
think was served well under the first Trump administration. It
was optimistic that it would see the same this administration,
and it's not at all happening.
Speaker 7 (24:54):
Yes, exactly. We actually missed Emily. If Emily was around her.
She would have been part of this story. But Emily
and I are our seatments, and I bug her way
more than I should have. So exactly, and this is
what you call the wealth effect. You know, the past
two years, investors were all feeling flushed, would check your
four oh one k every single day because markets were up.
It's up twenty percent for back to back two years.
(25:16):
And then now please don't check your four oh one
k because we're seeing the reverse wealth effect. And a
lot of the people that we talked to over the
weekend we're saying that this has real implications. It will
ripple throughout the economy because if you see your stock,
stocks or whatever your investments edging lower, it will really
impact how you behave. You won't spend enough, maybe you'll
hold off from that appliance, you'll hold off from that vacation.
(25:37):
And companies will also maybe lower their capex. And at
the same time, there could be an argument that you know,
only fifty percent of Americans own stocks, but that still
half of the country, and for those average Americans, their
portfolios on average are just around the retirement especially around
two hundred plus thousand. There was a study on that
and twenty percent of that is still significant. It's forty thousand,
(25:58):
and that is your entire nest egg. We're not even
talking about billionaires like Elon Musk. It's the normal, average American.
So it affects you.
Speaker 6 (26:04):
What was the general vibe of the portfolio manager's hedge
fund investors that you spoke to over the weekend. Were
they were they angry? Were they confused? Were they looking
for opportunities in the marketplace?
Speaker 7 (26:19):
Definitely angry, definitely frustrated. And one Jay Hatfield, CEO of
Infrastructure Capital, was saying actually that he wasn't that much
frustrated with Trump. It was more Scott Besson because they
were expecting more from him, given that, you know, he
came from the industry. But some were also really shocked
because I think this was above what a lot of
people expected. This was so called worse than what they expected.
(26:40):
And then what do you do? They say, you get
over it, and then you adjust your portfolio.
Speaker 2 (26:44):
In terms of assets that the president watches, we know
he used to like to talk about the Dow and
the S and P five hundred and equity market records.
You and the team write about different assets that he's
got his eye on bonds, especially or treasury, I should say,
and then also on commodities.
Speaker 7 (27:04):
Yes, there's that, and actually that's new because usually before
it was just the doubt that he was really looking at.
And there were reports over the weekend that even Fox
News removed the doubt ticker, which was a first in history.
I've read that, but I need to fact check, so
I probably shouldn't have shared it. But it's out there.
But now Trump is also looking at ten year treasuries
and oil. So as stocks creator those also moved violently,
(27:27):
they sank basically, and he's also looking at that. But
we also have him saying that the patient has lived.
You know, this is short term pain, but you can
interpret that phrase in many different ways.
Speaker 6 (27:37):
It's well, you've done a lot of work over the
years about the wealth effect and how it's this idea
that when the stock market goes up, people see that
their portfolios are doing well, so they feel good and
then they go out and spend. And you wrote in
this piece the rich who own most of the shares
(27:57):
most of the stocks, that ten percent class that you
mentioned him also count for roughly half of the country's
consumer spending. And I thought that was really interesting that,
like these people that wanted Trump in office because he
would support Wall Street also are a big part of consumption.
(28:18):
And now I gues see economies getting a double whammy exactly.
Speaker 7 (28:22):
I mean, not to get into politics. Also, I can't vote.
I always tell Emily that. But it's interesting because these
people are the ones who are driving much of the
consumer spending. I mean, maybe the average American they're finding
it tough. Every time I go to the grocery, I'm
just shocked at my bill. But the rich people still buy.
I mean, they still buy jewelry, they still buy gold.
You see them still buying Lambeau, which is a joke
(28:44):
we say in the crypto world. But they're still out
there spending. But maybe after this weekend they may not.
But yes, you're right, America is largely a consumer drive
an economy, and one can't really doubt whether, like I
feel like you can't ignore this anymore. They will be
affected no matter how rich you are. Probably, or I
mean maybe I wouldn't known.
Speaker 2 (29:06):
Isabelle Bloomberg news cross After reporter always great when you
join us. Check out her story. It's among the most
read on the Bloomberg terminal. It is today's big take
Wall Street. It's just collateral damage in Trump's trade war.
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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Speaker 3 (29:25):
Listen live weekday afternoons from two to five pm Eastern
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Speaker 2 (29:35):
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(00:23):
as it happens. The Bloomberg Business Week Daily Podcast with
Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2 (00:32):
A couple of stocks making big moves today. Shares an
Apple fell as much as seven point three percent earlier
in this session, the stock on track for its biggest
three day sell off in decades. I mean, i'mgoing uncertainty
about the Trump Administration's tariff policies. Look a lot can
happen in the next ninety minutes, but that's how things
were earlier. Today, Tesla shares fell as much as ten
point five percent, extending losses, dropping below a price at
(00:52):
which Howard Lutnik, the Commerce Secretary, predicted they'd never fall
to again. Dan Ives is watching these moves closely. He's
globe ahead of technology at Webbush Securities. Yesterday he cut
his price targets on both of these stocks. He joins
us here in the Bloomberg Business Week Studio, Dan, I
want to start with Tesla because you are a longtime
ball I never thought I would see the day where
you became bearish on the stock. But this weekend you
(01:13):
lowered your price target from five hundred and fifty dollars
to three hundred and fifteen dollars. There are haircuts, and
there are haircuts. This is a big haircut. Why'd you
do it?
Speaker 3 (01:23):
I mean there's two reasons.
Speaker 4 (01:24):
One the political damage that Musk has self inflicted between
Doge and obviously everything we're seeing play out, you know,
along with the Trump administration. I believe it's destructed demand.
Twenty percent in Europe, ten percent in the US. Net
could be conservative, and I think that's something that's also
starting to show up in China, which is ultimately look
(01:47):
that's if you look at our new estimates, it's really
taken a huge haircut to what China growth is going
to look like. The second thing is when you look
at the tariff, tariff's ahead one, there's no way as
sure code and the reality that the US Car Company
makes cars in the US with all US parts. That's
a fairy tale, it's Pinocchio story. And I think for Tesla,
(02:09):
and for Musk, it's a moment of truth because you
can't be three percent CEO ninety percent Doge and the
brand issues. It's created Tesla into a political symbol and
that that is a very, very bad thing, and I
think it speaks to what's happened to stop.
Speaker 5 (02:26):
Do you see any hope that that image could be
turned around? And I asked that not so much in
terms of what mus can do, but maybe the question
that investors aren't going to start having to ask is
whether the company just needs new leadership altogether.
Speaker 4 (02:38):
Look, I mean, in the next four to six weeks,
he makes a choice, you step out of Doge. You
literally now back to CEO of Tesla. You could still
be some sort of you know, official unofficial advisor or
whatever it may be. But the reality is then the
brand damage would be contained.
Speaker 3 (02:55):
It would be stitches a black eye? Will it though?
Speaker 5 (02:59):
Because it's on him. I mean, it's not just people saying, oh,
we think Tesla is a bad car. They're looking at
the CEO and they're saying, you know, we think you're
you know, from not my words, you're a fascist, you're
a Nazi. These are things. These are and this is
a taint that you just don't scrub off overnight.
Speaker 4 (03:14):
And I don't think you scrib it all. There's no
way that you scrub it all. Like you said, there's
a permanent brand damage up tire. But here's the key.
You continue down this road, then that permanent brand damage
it becomes something much bigger. And the shame is that
and it's Look, the reason we kept the rating and
(03:34):
then downgrade is because I believe in one with Nvidia
to the best disruptive technology companies in the world. But
here's the thing. This is to fork in the road
for Musk now to make the right decision.
Speaker 2 (03:50):
Maybe email him with that as the subject line and
see if see if he replies, Hey, do you want
to get some breaking news? Apple plants to source more
iPhones from India over tariffs.
Speaker 3 (03:58):
We're going to talk about that.
Speaker 2 (04:00):
Andjustment at the Wall Street Journal is reporting that I
want to go back to Tesla though and talk about
China a little bit. Shaw me byd the technology that
those car companies have among other car companies in China.
You've spent a lot of time traveling around the world
looking at this technology. Do Americans actually understand how innovative
(04:21):
Chinese homegrown evs are no.
Speaker 4 (04:25):
And actually it almost speaks broader to even some of
the issues that would tell aout in terms of like
tariffs to constant that we can meet things here in
the US. Look China when you look on the EV side,
I mean, China's really front and center, because.
Speaker 3 (04:37):
That seems like a huge headwind for TESTAE well.
Speaker 4 (04:40):
Especially when it comes to BYD in terms of because
thinking about it right now, BYD they're going after Europe,
South America aggressively, going after rest of the world at
a time where Tesla this should be the time that
it's go time that you're going after the rest of
the world. But the political damage, the brand damage that
(05:00):
US is done self created has it's hurt that issue.
So my whole point is is that the longer term
for Tesla, this is it's one of those moments where
its future will be determined. A lot of it how
must handles next thirty sixty to ninety days.
Speaker 5 (05:20):
But this is still a company that gets pretty much
happen if it's revenue from outside of the United States's
a big chunk of that in China, at least based
on the numbers that they end up last year. So
if China goes or at least it starts to wither
to a much smaller percentage of sales, can he make
up those sales anywhere else in around the world.
Speaker 3 (05:35):
No?
Speaker 4 (05:35):
No, I mean that's why it's the hearts and wungs.
There's no When you and I was like, when you
look at what's happened in China, and we've talked about
over the weekend, all the issues with tariffs and everything China,
Whiz it do drives buy more domestic byd over Tesla,
Huawei over Apple. It speaks to the broader issue that
a lot what's happened here is that the companies that
(05:58):
take a moost on the Chin, we'll be Tesla and Apple.
Speaker 3 (06:02):
But with Tesla.
Speaker 5 (06:03):
Just one last question on Tesla, though, is what's the
alternative if I'm shopping for an electric vehicle? And this
was the advantage Tesla had for years, Really was there
really wasn't an alternative and not a viable alternative. Now
I know there are a lot more vehicles out there,
ev vehicles out there, but not necessarily at the scale
of production. The Tesla had no one careerly for the
pricing the Tesla.
Speaker 4 (06:22):
Price and look in that, but it speaks to what's
so frustrating about what's going on If this was Intel. Look,
these are disasters relatives like Okay, the stock is a
cheap of fallen knife Tesla. It's about the massive opportunity ahead.
But when Musk is doing in terms of it's a
(06:43):
self inflicted wound that needs stitches now surgery.
Speaker 3 (06:47):
And that's our whole point. It's like, you got made
the decision, let's get to Apple.
Speaker 2 (06:52):
Shares of Apple right now are lower by about four
point two percent. You cut your price target on the
stock to two hundred and fifty dollars from three hundred
and twenty five dollars. I want to start with the
headline that we're getting from the Wall Street Journal. The
company plans to source more iPhones from India as a
potential fix for tariffs. A big part of your note
has to do with exposure to China. Maybe in the
(07:13):
first Trump administration, this would be news that investors would
cheer because okay, well, India hadn't been hit with tariffs.
It was between the US and China during the first
Trump administration with global tariffs, does anything matter?
Speaker 4 (07:26):
But that's the whole I mean think about Vietnam. You
moved to Vietnam. Vnam's worse than China. And then like
when you do about India, it would take years to
even make that more than five percent, just given the
logistics and the nature of India. You know, in terms
of as Apple tries to move some stuff there, Look,
no company in the world is hurt more from ones
(07:49):
that came out of Trump's mouth in terms of Taiwan
and China tariffs than Apple. Yeah, because you're talking about
ninety percent iPhones are made in China, and the reality
and even over the way what we got meeking you
as it. Here's the deal. If you won thirty five
hundred dollars iPhones, we should make them in New Jersey,
(08:11):
maybe make them in California. If you like thousand dollar iPhones, yeah,
you make them in China.
Speaker 3 (08:16):
And that's just the reality.
Speaker 5 (08:17):
Well, it raises the question too, is whether Apple really
would try to move I mean, do they have enough
pricing power where if they have to raise the cost
of an iPhone by twenty thirty percent, I mean, I
don't know they've convinced people somehow to pay one thousand
bucks or more for it already.
Speaker 4 (08:32):
But that'd be massive demand destruction. And Okay, my whole
point is is that it would take tens of billions
of dollars to even move ten percent on the suppot chaet.
That would take three years. So that's why the reality
right now what's going on in terms of taffs and
the reaction investors, Okay, it's untenable and it would be
an economic army geddon to US tech industry, in my opinion,
(08:54):
is set US tech industry back a decade.
Speaker 2 (08:57):
Do you think the White House understands the economic armageddon?
Speaker 4 (09:00):
Look, I think it's easy to stand in front of
a microphone and I get it politicians talk. The reality
is when you spend time walking through fabs in Taiwan
Fox con in terms of China, you spend time there
and then you come here and you actually think, given
our labor for its manufacturing costs of weaver, that we're
going to meet that here.
Speaker 3 (09:21):
That is just, in my.
Speaker 4 (09:23):
Opinion, it's massively unrealistic. And that's why it just speaks
to what's happened with stocks because investors they're not this
has none the Republican Democrat investors know math in the reality.
Speaker 5 (09:37):
Yeah, I'm kind of playing devil's advocate here. But with
regards to Apple and its ability to find some transition
through all of this, is there a way that they
could maybe increase sales outside of the US. And I
bring that up because Tim Cook was just over there
in China for that big meeting. He obviously toured a
lot of other facilities and universities for some reason or another.
He seems to have a relatively decent relationship with the
(10:00):
Chinese government politician ninety percent. Yeah, and he's done it right.
He navigated the first Trump administration, and I do wonder
if maybe we're counting him out that he might find
a way to navigate through this.
Speaker 4 (10:11):
Look the five hundred billion they announced that getting some
sort of exemption here and there. Look, and that's something
that investors are holding out for. But the reality is,
if you want a body blown an upper cut and
cut the knees off of the it might be probably
the best technology starward in the world in terms of Apple.
Speaker 3 (10:31):
This does it well?
Speaker 2 (10:32):
Forgive me, Dan, I want to go back to Tesla
because I'm getting a question from a viewer right now
who says that Elon's brand damage has been evident for months.
Why Did you just downgrade the stock as a result
of this?
Speaker 4 (10:43):
That's a great question because I believe from everything we're
seeing in Europe and the US and deliveries going into
two Q that it went from something that was containable
five percent set to something much broader. And I believe
it was also our view that he'd hold the line
start to step back instead he hasn't. So the point
(11:05):
is that brand damage, when we model that out into
three Q and four QWO, that's us basically modeling out
what we believe the brand damage is going to do
to the next few quarters. And look, and I would
also say, like it's something where it's become a life
of its own and Tesla has become a political symbol
and it's a very unfortunate situation. But on but look,
(11:26):
it's self inflicted by musk.
Speaker 5 (11:28):
We're heading into earning season. At some point they're going
to have to address investors directly. I think Tesla reports
in mid April and then Apple not to May. First,
what do you think the CEOs and the CFOs for
that matter, can actually tell investors to sort of calm
them down.
Speaker 4 (11:42):
No company is going to give guidance, in my opinion,
during earning season. A guy, I'd be shocked if any
company gives God, if you want to play blindfold the
darts look, and I think the reality is actually blindfold
dogs actually is pretty fun. Beside the point it's look,
I think they're basically going to have to give some
sort of guard rails. How they're going about it, How
(12:03):
are these scenario planning? And that because invest want to
unders in worst case bea'st case. Best case.
Speaker 2 (12:09):
Dan, i'ves Global head of Technology at Webbush Securities.
Speaker 3 (12:12):
Thanks so much for coming. Great to be here, Good
to see you.
Speaker 1 (12:15):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five e's during Listen
on Apple, Karplay and Android Otto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (12:30):
I got the HCPI function on the Bloomberg terminal fell
as much as four point seven percent today rose as
much as three point four percent. As we just heard
from Charlie Pellett. We're down right now by about four
tenths of one percent. Lots of volatility, to say the least,
and that's exactly why we wanted to talk to Eric Wiener.
(12:53):
He's Bloomberg News Equities Team America's team leader. He's the
author of several books, including What goes Up, An oral
history of Wall Street from the Great to Press through
the Internet Bubble. In the nine to eleven attacks, he
joins us from just outside, Well, no, you're here today.
Speaker 3 (13:05):
I'm here. Oh my gosh, he's back with us.
Speaker 2 (13:08):
On Friday, he was remote and we relied a lot
on you, and we're doing that again because when you
wrote that book What goes Up, that time span included
Black Monday. A lot of people over the weekend. The
chatter online was a little concern that what we're going
to see on Monday is going to look a little
bit like what we saw in nineteen eighty seven, the volatility. Yes,
(13:32):
maybe the massive crash. No, I would say there was
in eighty seven. There was a palpable sense of things
coming on Glude and then on the Sunday before, well
it was the Saturday and the Sunday before, Targery secretary
at the time, Jim Baker came out and made a
(13:52):
couple of remarks.
Speaker 3 (13:53):
That really scared the market. So when you came in
on Monday morning, when the traders came in on Monday morning.
They were looking at it going, oh my god, you know,
things are going to blow up here. It was less clear.
I mean, I remember I was looking at futures last night.
They came down a lot, but they weren't down as
(14:14):
much as say, China was, So there wasn't this sense
that like the US was just going to bottom out.
If anything, it was going to be like more of
a global spread. So Black Monday was kind of a
more predictable route, and then it had to be lifted
out by the Fed. This was something where you know,
(14:37):
it's it's kind of building.
Speaker 6 (14:40):
What does that tell us then about the sell off
that we're in. If this is just gradually building, we
don't have one Black Monday? Does that mean.
Speaker 3 (14:52):
That's exactly it? So the concern, bizarrely, the concern is
that things are actually moving fairly normally, which means we
haven't hit a bottom, which means we aren't seeing panic
or capitulation, whatever word you really want to use. What
you are seeing is people desperately wanting the President to
(15:17):
back off of tariffs. So as soon as that rumor hit,
we went up. You know, we moved, as you pointed out,
you know, eight basis eight percentage points, so wham swing
up and then it gets taken out because that's not
exactly true. But there is a very simple cure. Like
Black Monday was, there were systemic problems. There were people
(15:39):
who were missing right, Yeah, there were people who were
going to have This is what I was watching for
last night, was like margin calls and situations where big
hedge funds had been caught off sides weren't going to
be able to make the payments, and now you have
counterparties that are wondering where the money's going to come from.
That is not the case. Now they're just begging in
(16:00):
Trump to get rid of the tariffs. In other words,
like you said on Friday, this is orderly. This is orderly.
It's and the orderliness of it is what's scary to
market pros because it's when things get disorderly you sort
of have that catharist we're still waiting for the caiss
(16:21):
The difference is that this was and you know, it's
been pointed out by many, many Wall Street people other
than me, that this is caused by one thing exactly.
Speaker 2 (16:31):
And I think, you know, one of the criticisms I've
see of this h on TV. Our markets guests we
speak to outside of the building online, is that they're
saying this is self inflicted.
Speaker 3 (16:45):
Yeah, it's like shooting yourself in the foot. Now, what Trump?
The question is what the goal is with these tariffs.
So if the goal is to reshure industry, that's going
to take a long time.
Speaker 2 (17:00):
We had Dan Ives from Red Bush sitting in that
chair right there, telling us an hour ago that he
spent time in Taiwan. He's seen the way that these
devices are made, He's seen the factories. He said, that's
not happening in New Jersey. No, and it's and it
would take forever to do.
Speaker 3 (17:17):
I mean, there's a reason why they moved there in
the first place as well. And so if we want
cheaper goods, that's part of this. There are a bunch
of different things that go into the creation of our
you know, our economic flow. This is like, what are
we what are we trying to do? Are we trying
to change the behavior of other countries? Are we trying
(17:39):
to behave change the financial system itself? What's the goal?
Speaker 6 (17:43):
I also think of you know, if I were running
a business, what I necessarily start building a factory in
the US and completely pull my operations from offshore, only
to then have potentially these tariffs reversed slightly and then
you already started building.
Speaker 3 (18:04):
Do you think that's a good point? Is that that's
this is all in the this is going to all
be in the earnings reports. Because what's going what you do,
if you're a CEO right now is sort of stand
pat So growth is going to be more challenging. The
idea of expansion becomes should we or shouldn't we? I mean,
you have to realize that there's a reason why manufacturing
(18:26):
move to Malaysia, move to Vietnam, and that's because China
has become more expensive. You know, because because as economies grow,
their employees expect more pay so they go to the
lowest producer. So the idea that like we're going to
bring everything back here, that's a multi year project with
(18:47):
dubious results and flies in the face of capitalism as
we know it. If the idea is to get countries
to change their behavior and negotiate with the president, then
we'll see what we can do.
Speaker 2 (19:01):
So when Emily came over here twenty minutes ago, the
S and P five hundred was in the green. It's
now down eight tenths of one percent. Why is there
such a lack of conviction directionally with today's trade.
Speaker 3 (19:16):
Because we don't really know what's going on. There was there.
Speaker 2 (19:19):
Conviction based on saving the white House port cold water
on Oh yeah, there was, Well, there was conviction when
we came in and we were down like four percent
right away or whatever it was.
Speaker 3 (19:28):
And then there was conviction on the upside because what
that leak was was something that the traders have kind
of been expecting, so that kind of played into their
priors and suddenly it just went whoosh, everything went up.
But the right now, it's hard to know where we're
going to go next.
Speaker 2 (19:49):
What you're referring to it is actually the most read
story on the Bloomberg terminal in the last hour. I
encourage everybody to go check it out. Jess Mett and
Bailey Lipschultz, Eshra Day. It's called this is madness. The
fifteen minutes that rock to stock market desks.
Speaker 6 (20:02):
We got to get these people on. At just after
ten am, shouting erupted on the Seabert trading floor in
downtown Manhattan. I won't read the rest of the story,
but that is the tough it's kind of wild.
Speaker 3 (20:13):
We were going through it as on the team as
it was happening. I mean it it was happening all
around us, and it was wild. We were yeah, go ahead.
Well I'm wondering.
Speaker 6 (20:22):
I mean, you've obviously seen a lot of market downturns,
a lot of single day crashes. How does this one
compare to history? When you think about this sell off
seems to be all focused on one very specific event,
whereas I don't know, I think the financial crisis obviously
(20:43):
there wasn't just one headline that traders were all counting.
Speaker 3 (20:46):
On or waiting for.
Speaker 6 (20:47):
But this is so specific to just one.
Speaker 3 (20:50):
So the the scary thing with crashes is when credit
is heavily involved, When you have your traders concerned that
debts aren't going to get paid off, or that you know,
rates are just you know, tumbling or rising. This is
not a credit meltdown. It's it's an equity meltdown. And
(21:14):
it's because stock prices went way up on AI speculation,
and then if growth is going to be paired back,
which is what tariffs would probably do, then you have
to take out some of this. So it's not as
scary I would say, as when you look at the
global financial crisis in like eight nine, there was a
sense like the knife was going to keep falling and
(21:36):
if you grabbed it, you know, it was going to
slide right through your hands and slice your hand off.
This is not that kind of thing. This is more
like it actually could be stopped by one guy. Like
that's and that's different.
Speaker 2 (21:48):
A weird thing happened to me this weekend Eric and
I was with. It was when I was with a
lot of friends who are about my age. You know,
we're kind of getting close to middle age. Think not
thinking about retirement, but people who have kids saving for college,
that sort of thing, and they started talking to me
about the stock market. These are normal people who don't
(22:09):
work in the industry. I have a good friend who's
trying to sell everything right now because he is scared
that something fundamentally is shifting in the economic landscape. He's
the second person I've talked to who's expressed concern to
me that those words this time is different. What would
you say to those folks, having studied other crises, I.
Speaker 3 (22:32):
Would say that they're the contrarian indicators. That's actually what
we want to hear. It's the same thing going up.
The famous story is Sidney Weinberg, who at the time
was the head of Goldman Sachs, getting tips from his
shoeshine guy and he walks back into Goldman and he's like,
sell everything because this is just going to be a nightmare.
And so when you start seeing people who normally aren't
(22:54):
engaged with this stuff having very strong convictions about where
things are going to go, they tend to go and
the other way. There really isn't a systemic problem here.
That's the thing.
Speaker 2 (23:04):
It's not a systemic problem, he argues with the markets.
He thinks it's a systemic problem with globalization and with
the president changing the world order that he grew up with.
Speaker 3 (23:15):
I just don't think that Wall Street is ready to
give up the global order. And the global order is
global like, so it's not just Wall Street. China doesn't
want to give it up, you know. So people want
the financial markets. They want the financial markets to work,
and the question is how and when that will start happening.
But I don't see us reordering away from capitalism because
(23:40):
even in the trade landscape, you have other countries that
are trying to band together to create trade alliances. On
their own without us, So this genie is out of
the bottle.
Speaker 2 (23:50):
Ericquener, good to see you, Thanks so much for joining us.
Really appreciate you taking the time today.
Speaker 3 (23:55):
Happy to be here.
Speaker 1 (23:58):
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Speaker 3 (24:13):
Bloomberg eleven thirty.
Speaker 2 (24:16):
Lacross asset team spent all weekend working on it. It's
about how Wall Street is just collateral damage in Trump's
trade war. Bloomberg News Cross Asset reporter Isabelle Lee is
part of the team that worked on the story. She
joins us here in the Bloomberg Interactive Brokers Studio. Isabelle,
congratulations on this story. I know a lot of work
(24:36):
went into it. I just want to start a big
picture the investor class. It was a class that I
think was served well under the first Trump administration. It
was optimistic that it would see the same this administration,
and it's not at all happening.
Speaker 7 (24:54):
Yes, exactly. We actually missed Emily. If Emily was around her.
She would have been part of this story. But Emily
and I are our seatments, and I bug her way
more than I should have. So exactly, and this is
what you call the wealth effect. You know, the past
two years, investors were all feeling flushed, would check your
four oh one k every single day because markets were up.
It's up twenty percent for back to back two years.
(25:16):
And then now please don't check your four oh one
k because we're seeing the reverse wealth effect. And a
lot of the people that we talked to over the
weekend we're saying that this has real implications. It will
ripple throughout the economy because if you see your stock,
stocks or whatever your investments edging lower, it will really
impact how you behave. You won't spend enough, maybe you'll
hold off from that appliance, you'll hold off from that vacation.
(25:37):
And companies will also maybe lower their capex. And at
the same time, there could be an argument that you know,
only fifty percent of Americans own stocks, but that still
half of the country, and for those average Americans, their
portfolios on average are just around the retirement especially around
two hundred plus thousand. There was a study on that
and twenty percent of that is still significant. It's forty thousand,
(25:58):
and that is your entire nest egg. We're not even
talking about billionaires like Elon Musk. It's the normal, average American.
So it affects you.
Speaker 6 (26:04):
What was the general vibe of the portfolio manager's hedge
fund investors that you spoke to over the weekend. Were
they were they angry? Were they confused? Were they looking
for opportunities in the marketplace?
Speaker 7 (26:19):
Definitely angry, definitely frustrated. And one Jay Hatfield, CEO of
Infrastructure Capital, was saying actually that he wasn't that much
frustrated with Trump. It was more Scott Besson because they
were expecting more from him, given that, you know, he
came from the industry. But some were also really shocked
because I think this was above what a lot of
people expected. This was so called worse than what they expected.
(26:40):
And then what do you do? They say, you get
over it, and then you adjust your portfolio.
Speaker 2 (26:44):
In terms of assets that the president watches, we know
he used to like to talk about the Dow and
the S and P five hundred and equity market records.
You and the team write about different assets that he's
got his eye on bonds, especially or treasury, I should say,
and then also on commodities.
Speaker 7 (27:04):
Yes, there's that, and actually that's new because usually before
it was just the doubt that he was really looking at.
And there were reports over the weekend that even Fox
News removed the doubt ticker, which was a first in history.
I've read that, but I need to fact check, so
I probably shouldn't have shared it. But it's out there.
But now Trump is also looking at ten year treasuries
and oil. So as stocks creator those also moved violently,
(27:27):
they sank basically, and he's also looking at that. But
we also have him saying that the patient has lived.
You know, this is short term pain, but you can
interpret that phrase in many different ways.
Speaker 6 (27:37):
It's well, you've done a lot of work over the
years about the wealth effect and how it's this idea
that when the stock market goes up, people see that
their portfolios are doing well, so they feel good and
then they go out and spend. And you wrote in
this piece the rich who own most of the shares
(27:57):
most of the stocks, that ten percent class that you
mentioned him also count for roughly half of the country's
consumer spending. And I thought that was really interesting that,
like these people that wanted Trump in office because he
would support Wall Street also are a big part of consumption.
(28:18):
And now I gues see economies getting a double whammy exactly.
Speaker 7 (28:22):
I mean, not to get into politics. Also, I can't vote.
I always tell Emily that. But it's interesting because these
people are the ones who are driving much of the
consumer spending. I mean, maybe the average American they're finding
it tough. Every time I go to the grocery, I'm
just shocked at my bill. But the rich people still buy.
I mean, they still buy jewelry, they still buy gold.
You see them still buying Lambeau, which is a joke
(28:44):
we say in the crypto world. But they're still out
there spending. But maybe after this weekend they may not.
But yes, you're right, America is largely a consumer drive
an economy, and one can't really doubt whether, like I
feel like you can't ignore this anymore. They will be
affected no matter how rich you are. Probably, or I
mean maybe I wouldn't known.
Speaker 2 (29:06):
Isabelle Bloomberg news cross After reporter always great when you
join us. Check out her story. It's among the most
read on the Bloomberg terminal. It is today's big take
Wall Street. It's just collateral damage in Trump's trade war.
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (29:25):
Listen live weekday afternoons from two to five pm Eastern
on Bloomberg dot com, the iHeartRadio app, tune In, and
the Bloomberg Business App.
Speaker 2 (29:35):
You can also watch us live every weekday on YouTube
and always on the Bloomberg terminal
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