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1:01

Bloomberg audio studios.

1:03

Podcasts Radio. This

1:07

is Bloomberg Business Week Daily,

1:10

reporting from the magazine that

1:12

helps global leaders stay ahead,

1:15

with insight on the people,

1:17

companies, and trends shaping today's

1:20

complex economy. Plus, global business,

1:22

finance, and tech news as

1:24

it happens. The Bloomberg Business

1:27

Week Daily podcast with Carol

1:29

Maser and Tim Stenovich on

1:32

Bloomberg Radio. Hey, now to the

1:34

ominous tone when it comes to

1:36

the macro. record. And his economists

1:39

anticipate President Trump's trade war makes

1:41

a US recession almost a coin flip.

1:43

We had to Washington DC and

1:45

to Bloomberg's Michael McKee. He's a

1:47

Bloomberg TV and a radio international

1:49

economics and policy correspondent.

1:51

He's live in our DC Bureau right now.

1:53

Mike, you're wrapping up the meetings that I

1:55

am at the IMF. I want to get

1:57

from you just the general consensus, the general.

1:59

tone the vibes for lack of a better term,

2:02

but before that, I want to bring up the

2:04

you-mish data that we got earlier today and

2:06

really what it told us. What was the signal

2:08

there? Well, the signal is the

2:10

same as it was with the

2:12

preliminary numbers. These were a little

2:15

bit better, but they basically say

2:17

Americans don't think the economy is

2:19

in good shape, and they're worried

2:21

about where it's going from here.

2:23

The question always is with these

2:25

sentiment surveys. Do they translate that

2:27

into action? Do they start pulling

2:29

back? The inflation expectations numbers, certainly

2:31

not good, a little bit better,

2:33

you know, by basis point than

2:36

they were in the preliminary, but

2:38

they're still very high. If Americans

2:40

are worried about prices going up

2:42

and they are worried about the

2:44

economy, they might pull back on

2:46

their spending and then you've got

2:48

a demand problem that slows the

2:51

economy at a time when tariffs

2:53

might be something of a shock

2:55

on the supply side and push

2:57

up inflation. That's the nightmare scenario.

2:59

So you can sort of game

3:01

out bad news from this report

3:04

if you want to go far

3:06

enough. All right, so when do you just

3:08

kind of speculate that it's going to turn

3:10

into bad actions? I mean, is there a

3:12

reading, Mike, that you say, okay, we're

3:14

there. People are definitely holding back and

3:16

it doesn't look good. Well, you'll have

3:18

to look at the consumer spending numbers,

3:21

both the retail sales numbers and of

3:23

course the spending numbers that come at

3:25

the end of the month. But there

3:27

was a study done a couple of

3:29

years ago by Danny Blancheflower. You know,

3:32

well, he's an economics professor up at

3:34

Dartmouth College that shows there is a

3:36

strong correlation between big drops in consumer

3:38

confidence and recessions. And I have... been

3:40

at the other end of his emails where

3:42

he's been saying lately, I told you and

3:45

this is what's going to happen. So we

3:47

shall see if that does indeed prove out.

3:49

Okay, I promised we'd talk about the vibes

3:51

down in Washington. You've been there the

3:53

entire week. I'm sure the weather has

3:56

been great spring-like. Nice in Washington

3:58

right now. What about the vibes? What's

4:00

the takeaway from the spring IMF

4:02

meetings? And really everyone that you've

4:04

run into, everyone you've heard from.

4:07

I think everybody just wants to

4:09

get out of this town. The

4:11

talk, as you say, no matter

4:13

what comes up, it all ends

4:16

up back on tariffs and what

4:18

the U.S. role in the global

4:20

economy is going to be going

4:23

forward. And the problem for everybody,

4:25

besides just the basics of tariffs

4:27

are bad for economics, is that

4:30

the uncertainty caused by the president's

4:32

waffling around on tariffs and what

4:34

they're going to be is... really

4:36

paralyzed everybody. Countries are trying to

4:39

figure out how they can defend

4:41

themselves and protect their economies from

4:43

tariffs, but they don't know what the tariffs

4:46

are actually going to be, what they'll be

4:48

applied upon, when they'll be applied. So it's

4:50

very hard for anyone to get a clear

4:52

idea of where we go from here. And

4:54

of course we're all in this echo chamber

4:56

where that's all what gets talked about, so

4:59

I think people may be glad when this

5:01

event is over. Well, that's interesting too.

5:03

Like I do wonder when the Echo

5:05

Chamber, like we just kind of are

5:08

in this vacuum, we're like bad, bad,

5:10

bad. Having said that, Ploomburg did their

5:12

own survey of economists, and they basically

5:14

are saying a couple of things. They

5:17

say the US economy is set to

5:19

expand 1.4 percent. This year, what an

5:21

app present next year, not great. Compare

5:24

with 2% and 1.9% in the last

5:26

month's poll. The median respondent now sees

5:28

a 45% chance of a downturn in

5:30

the next 12 months. That's up from

5:33

30% in March. You're the expert here.

5:35

I know it's all just numbers. I

5:37

know it's just a survey. But you

5:39

go back a few months. We really

5:41

weren't talking to US recession. And now

5:43

it's part of the narrative. I feel like

5:46

we're playing Family Feud here.

5:48

The survey reflects basically the

5:50

feeling on Wall Street and

5:52

among almost all economists. A

5:54

recession is not necessarily likely,

5:56

but the odds of it

5:58

have gone. up significantly and

6:01

a lot of it is

6:03

going to depend on what

6:05

consumers do. We also see

6:07

a the beginnings of a real

6:09

slowdown in business investment. We saw

6:11

that in some of the categories

6:13

of durable goods. We had a

6:15

big durable goods number yesterday based

6:17

on Boeing sales, but machinery sales,

6:19

machinery orders, computer orders, things like

6:22

that, fell during the month. So

6:24

if businesses are pulling back and

6:26

Fed officials tell us that that's

6:28

what they're hearing as well, then

6:30

the odds go up significantly that

6:32

a recession could occur wouldn't take

6:34

much to tip us in. to

6:36

what? How big of a grain of salt should

6:39

we take surveys? Or not surveys such as

6:41

this, but what economists think will happen. And

6:43

I think back to what, two, three years

6:45

ago at this point, Mike, when pretty much

6:47

everyone was saying we'd be in recession, and

6:49

that didn't end up happening. Well,

6:52

I think the difference this time is

6:54

economists know that this is sort of

6:56

an impossible situation to be in and

6:58

I've talked to a lot of them

7:01

this week who all say that I'm

7:03

lucky because I get to be an

7:05

economist who doesn't have to make a

7:07

forecast. They get paid for making forecasts

7:09

and they don't have a whole lot

7:12

of good data to make that forecast

7:14

upon. So it's very difficult for them

7:16

to know whether this 45% is a...

7:18

good strong number or not. I think

7:21

as we go along and get more

7:23

hard data they'll refine their views but

7:25

for right now I think they're being

7:27

they're just being cautious because the odds

7:29

are the story is lining up that

7:31

we could go into recession but it

7:34

doesn't necessarily mean that's going to happen.

7:36

Right and at least they're putting out

7:38

some numbers right they're not saying well we

7:40

could go this way or we go this

7:42

way I mean it's like kind of an

7:45

interesting environment as you know with corporate earnings

7:47

where we're getting some C- We keep bringing

7:49

up United Airlines, but I think there's a

7:51

few others saying, well, it could go this

7:54

way or it could go this way, depending

7:56

on the tariffs and depending on the U.S.

7:58

economy. Mike, the Fed's being... You Ryan

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A function music will drive us

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to the dawn. On Bloomberg Radio.

35:58

All right everybody just got about

36:01

18. half minutes to go until

36:03

we wrap up the trade. On

36:05

this Friday also for the week

36:07

overall we've got kind of a

36:10

mixed market but up on the

36:12

S&P just slightly. You heard Charlie

36:14

and Bill Maloney breaking down the

36:16

numbers just up about 22 on

36:18

the S&P 500. NASDAQ 100 again

36:21

of about 7 tons of a

36:23

percent. But we have seen as

36:25

Tim mentioned earlier Most names, a

36:27

majority of the names in the

36:30

S&P 500 are lower, so more

36:32

of a risk-off trade on this

36:34

Friday. But we are up pretty

36:36

significantly for the week overall. Thank

36:39

you, Mega Cap Tech. Yeah, woo-hoo.

36:41

Yeah, we'll see what happens next

36:43

week. We got Apple reporting? Yes,

36:45

we will. We've got platforms, we

36:48

got Amazon. Yes, we will. Hey,

36:50

let's speak to Adrian Maki, bring

36:52

her in, she's found her managing

36:54

partner of strategic wealth capital. Adrian

36:57

good to have you back with

36:59

us. It's been kind of a

37:01

wild ride this week as Carol

37:03

mentioned the S&P 500 what it's

37:06

on its best four-day street Carol's

37:08

going back to January something like

37:10

that something like that so don't

37:12

quote me on it something like

37:14

that that's okay as Carol reminds

37:17

us all the time What fundamentally

37:19

has changed when it comes to

37:21

the trade war? Not necessarily much.

37:23

On track for its longest advance

37:26

is January. There we go. Well

37:28

done, Mr. Stenev. Okay, we got

37:30

that one, right? Sorry, Adrian. What

37:32

are you hearing right now from

37:35

clients? The trickiest thing right now,

37:37

of course, as everyone knows, is

37:39

not just the uncertainty of what's

37:41

going to stick. So with tariffs,

37:44

with interest rates, since there have

37:46

been a lot of reversals, but

37:48

it's What I have found, a

37:50

lot of my clients are New

37:53

York, DC, California, and the values

37:55

of and the policies of the

37:57

administration have been a bit hard.

37:59

So one thing I am telling

38:02

clients to do, I have had

38:04

more than one family ask if

38:06

they should move. abroad or move

38:08

their assets abroad, which I have

38:10

not had before. I know. And

38:13

I do have a client who

38:15

is also going to be moving

38:17

to Europe and getting a passport.

38:19

I can say I've never had

38:22

that before, but I talk it

38:24

through with them. One thing that

38:26

I do cancel everyone regardless of

38:28

political persuasion is to just try

38:31

to separate the business, the stock

38:33

market, their earnings and companies from

38:35

the government piece. It's not easy,

38:37

but when you're making the financial

38:40

decisions, you have to try to

38:42

be able to separate emotionally from

38:44

the two. Wait, so why are

38:46

they doing it? What did they

38:49

tell you why they were doing

38:51

it? That's such a good question.

38:53

It was really interesting. So one

38:55

client said, I'm worried that the

38:58

current administration will dissolve a lot

39:00

of protectionist measures we have, like

39:02

insurance. for savings accounts. And she

39:04

was concerned that because if we're

39:06

no longer, for example, a reserve

39:09

currency, and if our currency goes

39:11

through severe devaluation, she wanted to

39:13

be sure that she would have

39:15

enough funds. She has quite a

39:18

lot of savings and was wondering

39:20

should she hedged And my answer

39:22

in her case, because if someone

39:24

is planning to move abroad, a

39:27

client who own properties in multiple

39:29

countries, that might make sense. But

39:31

the risk of moving it abroad

39:33

to euros, for example, and back,

39:36

when it's going to be ultimately

39:38

spent in dollars, didn't make sense.

39:40

And for most people, it doesn't.

39:42

So what did you advise her?

39:45

Just do nothing? Because she's obviously

39:47

anxious about what's going on here.

39:49

And look, we've... I haven't totally,

39:51

I've spoken to people who are

39:54

very anxious too. Not necessarily taking

39:56

steps as drastic as that, but

39:58

definitely selling US assets and buying

40:00

assets outside of the US. Yeah,

40:02

so it's I think the last

40:05

time I was on the show

40:07

was I think the first or

40:09

second business day of this year

40:11

I was just looking through that

40:14

when I was reviewing my notes

40:16

different tone different sentiment different narrative

40:18

a little bit different sentiment but

40:20

my advice yeah so the consistency

40:23

of asset allocation and diversification that's

40:25

always going to be important and

40:27

the so I had talked about

40:29

international assets yeah And last year

40:32

I talked to a number of

40:34

clients who said, I don't like

40:36

Europe, they have high taxes, low

40:38

growth, population growth. But what I,

40:41

what we had talked about in

40:43

January was, yes, but you're investing

40:45

in multinational blue chip companies that

40:47

happen to be based abroad. And

40:50

I know we had talked about

40:52

like Toyota and Honda companies that

40:54

build abroad. And we talked about

40:56

European consumer product companies. Even with

40:59

the tariffs, if you look at

41:01

the makeup, a lot of these

41:03

companies have sales outside of the

41:05

US. And it's funny because, and

41:07

only what, three months, four months?

41:10

I mean, we've seen, I mean,

41:12

the IFA is up about almost

41:14

9% I saw today, and SME

41:16

is down about six. So if

41:19

you look at the difference, that's

41:21

15% in what, four months. It's

41:23

a lot. The timing, nobody knows

41:25

the timing, but if the fundamentals

41:28

are there and international was trading

41:30

at discounts, it's going to be

41:32

the case. That's, that everything will

41:34

revert to the fundamentals. And it

41:37

did. It just happens a little

41:39

bit faster than we expected. What

41:41

are the fundamentals though? Because the

41:43

US has outperformed over the past

41:46

decade or so. And you know,

41:48

those people with global equity portfolios

41:50

have said, okay, this is the

41:52

year. Is the era of U.S.

41:55

exceptionalism in the U.S. outperformance over?

41:57

So there are two things we're

41:59

thinking of. we're talking about. One

42:01

is a stock market and the

42:04

other is the US as a

42:06

country which produces, which has top

42:08

institutions and quite

42:10

a large presence in the

42:13

world state, I mean, from

42:15

education to research and technological

42:18

advances. The short answer is

42:20

on the business side and

42:23

the market side, companies are

42:25

much more nimble than governments.

42:28

And When some of this

42:31

uncertainty clears up, and

42:33

it's always going to exist

42:35

in some form, I'm not

42:38

concerned about the companies. The

42:40

US companies will find ways

42:43

to remain profitable. I am

42:45

more concerned, however, about the

42:48

US as an institution. It's

42:50

not a fear so much

42:53

as I think the cornerstones

42:55

that the administration is trying

42:58

to change. I think that will

43:00

be detrimental. Even if we just

43:02

look at universities, if students

43:04

are afraid of coming here

43:06

and researching and staying and starting

43:09

businesses, it's going to be tough

43:11

to remain exceptional. Okay, because Adrian,

43:13

it sounds like it's really going

43:15

to be too also hard to

43:18

separate because I feel like the

43:20

markets and the government, well

43:22

separate, you know, are connected, you

43:24

know, what I mean? So I do wonder how...

43:26

you know, there's no faith in

43:28

the U.S. government what that

43:30

does to kind of the

43:32

whole U.S. marketplace. Like, it's just

43:35

20 seconds or so. Yeah, so go

43:37

ahead. Oh, it's not a, we don't

43:39

invest in a government. There's a lot

43:41

of interplay, but the most important thing

43:43

is to look at the earnings of

43:45

the companies. So just like when we

43:48

invest in Europe, we're not investing in

43:50

a specific country's government. We're investing in

43:52

the companies that are domiciled there. Interesting.

43:54

Absolutely the same thing for us as

43:56

well. All right, that's an interesting perspective.

43:58

Good perspective to hear. Great Time

44:42

is precious and so are our pets.

44:45

So time with our pets is extra

44:47

precious. That's why we started Dutch. Dutch

44:49

provides 24-7 access to licensed vets with

44:51

unlimited virtual visits and follow-ups for up

44:54

to five pets. You can message a

44:56

vet at any time and schedule a

44:58

video visit the same day. Our vets

45:00

can even prescribe medication for many ailments

45:03

and shipping is always free. With Dutch

45:05

you'll get more time with your pets

45:07

and year-round piece of mind when it

45:09

comes to their vet care. podcasts.