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- [00:00]
Joe Matthew
So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM, Bloomberg Audio Studios Podcasts, Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [00:55]
Joe
We have been informed via Iranian media that Iran's deputy foreign minister says talks in Qatar have ended. They, of course, began yesterday in Doha. The US Envoy, Steve Whitcoff and Jared Kushner were in attendance. Though these were not direct conversations happening between those envoys and Iranian officials, they were instead indirect. All the same, the president said earlier today that there's been very good meetings. We're just not clear what exactly those meetings have accomplished and whether or not there have been any material breakthroughs in these conversations.
- [01:26]
Joe Matthew
Joe, you know, we keep throwing around the word progress and maybe optimism based on what day it may or may not be from either side. The US Or Iran officials in Qatar have actually been trying hard to downplay expectations here. Again, these are indirect talks and I don't believe we have another actual round of negotiations on the calendar. So we wanted to get to the bottom of all of this now that this latest attempt has come to an end. Bloomberg White House correspondent Jeff Mason is with us right now in our Washington bureau. And Jeff, it's great to have you back. Anything to show for this? Do we have a sen of whether anything was accomplished?
- [02:01]
Kaylee
It's just, it's really a parsing job. Right? I mean, the fact that they're telling us it's over is a little bit of news because we know it's over. And then we have to try to figure out what they talked about. I think probably the broader takeaway is that they are talking and that the attack and that's, that's, that's not just rhetorical. I mean, there were just a few days ago there were live attacks going on between the United States and Iran again. So the fact that that did not end up derailing these talks is probably significant. The president was little bit dismissive when he talked about it in the Oval Office the other day, saying they might be interesting, they might not be interesting, but they're certainly trying to put a positive spin on it right now.
- [02:41]
Joe
Okay, so those are talks that are taking place in terms of diplomacy and trying to mediate an end to the conflict between the US And Iran. I also want to talk about trade talks that are not taking place with us and our partners to the north and south. Today was the day for the USMCA to be renewed or not. The Trump administration has decided against that renewal. We know that this will basically mean that everything stays the same for the next 10 years with Conversations, but what do we need to know?
- [03:07]
Kaylee
Jeff, I appreciate the skeptical look on your face, because that is how I'm feeling about it as well. It's not being renewed and yet. Am I reading that correctly? It's or questioning anyway, because I have the same question.
- [03:21]
Joe
That was a little squinty.
- [03:23]
Kaylee
It was more of a, what does this all mean? It stays in place until 2036, which is another 10 years. And yet my understanding is that the US can basically try to make changes to it in these annual negotiations that are now going to probably disrupt the trade relationship even further than it already has been between the United States and Canada and Mexico. It's really its closest trade allies. And as Joe and I were talking about in the last hour, the irony of all of that is President Trump heralded and pushed through this agreement during his first term and called it basically the most important trade agreement ever. Which, you know, the president is known for a little bit of hyperbole, but he's also known for changing his mind and for lashing out against people who were partners and allies if the game changes for him. And right now, the game is changing.
- [04:14]
Joe Matthew
Come a long way from that first term. And of course, he says, well, we only needed that then to get out of nafta, and we're in a different place now. I guess some things could happen in the next couple of years, but there's a lot of question about his financial disclosures. Before you leave us, we got hundreds of pages on Donald Trump last night. I think it was like, events. What did we have for the vice president? Those didn't seem to make a lot of news. Donald Trump, $1.4 billion from crypto alone. And he had been taking profits on Nvidia, Apple and Palantir. Based on the headlines we saw last evening. Quarter of a million here, quarter of a million. We're in the billions range when it comes to crypto. And of course, this is a, an industry that his family works in. And you've made the point one, that he has pushed back on the idea of regulating.
- [04:59]
Kaylee
Indeed, he has absolutely pushed back or slightly another way of saying that is pulled back from, from intensive regulation of the crypto market, which you have to wonder if he's thinking about his financial interests when he's making those decisions. I'm not saying he is, but people who are looking at this are certainly right to raise that question or have a reason to raise that question. Also, the companies that you just mentioned, what did you say? Apple, Nvidia, I mean, those CEOs are in and around President Trump and his White House and Air Force One business with the government all the time.
- [05:32]
Joe Matthew
Yeah.
- [05:33]
Kaylee
I mean, when we were going to China several weeks ago, I remember, you know, I broke the story of which which CEOs were going on that trip and initially Jensen.
- [05:42]
Joe Matthew
All three of those companies, actually.
- [05:44]
Kaylee
Yes, indeed. Except for initially Jensen Huang. And then he ended up getting added on the tarmac in Alaska. I was talking to a former White House official yesterday, actually, who said that he interpreted them, changing topics a little bit, but sticking with the CEOs that he interpreted that sort of back and forth to be. Maybe some people in the White House were unhappy with Nvidia about their position on export controls. And then the president, and this ties this back into our previous conversation, said, no, Jensen Huang is my friend and he needs to come. So all of that wrapping it all together is he's friends with a lot of these CEOs and is also making money from their.
- [06:21]
Joe Matthew
We should probably note, though, Kaylee, there is nothing illegal said to have been done here, Correct?
- [06:26]
Kaylee
Indeed.
- [06:26]
Joe Matthew
Conflict of interest is not breaking the law.
- [06:28]
Kaylee
Important to note that. Absolutely. And yet unusual politically for a president not to divorce himself more from that when he has an administration that has an impact on it.
- [06:39]
Joe
Yeah.
- [06:40]
Jay Timmons
All right.
- [06:40]
Joe
Jeff Mason covering the White House for us here at Bloomberg. Thank you so much. And on the subject of the president being divorced or not from decisions made with his finances, he was questioned by reporters around these financial disclosures today, and he said a lot of these decisions are not his own.
- [06:55]
Joe Matthew
Listen, I don't get involved in my personal. We have funds that run my money.
- [07:01]
Nora Melinda
But you are benefiting.
- [07:02]
Joe Matthew
Well, I've made a lot of money before I became president and they invest my money and I don't talk to them. I never, I don't even speak to them. They're big institutions and they run it. But yeah, I've Had a great career in business. I've had a great career.
- [07:17]
Joe
Critics would say you're profiting off of residency.
- [07:20]
Joe Matthew
Well, you know why I'm profiting? Because the stock market's going up. Everybody's profiting. How's your 401k done? It's about up 85%. Thank you, President Trump.
- [07:31]
Joe
So, on that note, we turn now to today's political panel. Democratic strategist Laura Fink is with us, the CEO and founder of Rebelle Communications, alongside Republican strategist T.W. origi, Vice President at Push Digital. Welcome to you both. Laura, I'll come to you first, as we know that this midterm cycle is supposed to be all about affordability, and certainly that's the messaging that Democrats are focusing on. It's quite the contrast between affordability, messaging and a president who made $1.4 billion last year off crypto alone, $1.4 billion
- [08:05]
Laura Fink
with his crypto coin leading the way in terms of his investments and all of the foreign governments that are pouring capital into those funds. You know, in the first term, we saw people going and spending money at his hotels and his golf courses from foreign nations in an exponential way from prior to when he was president. But here we see it is more, they have the ability for far more investment into Trump and to curry favor. And so the voters will make that decision because you're correct, there aren't laws against this right now. But before, the political consequences of appearing to have these conflicts of interest were deadly for Republicans and for Democrats. Trump has really eradicated that sort of public and political shaming. And so, but it's not entirely gone. And so I think when you see for the first time a president making over a billion dollars, when previous presidents, Republican and Democrat, made, you know, maybe a million 1.4 on normal stock market investments, there's something, there's something rotten in the state of Denmark there. So I think you'll see voters who are struggling to put food on the table and to pay their bills rally against that in the fall.
- [09:15]
Joe Matthew
Well, knowing that crypto has pulled back a lot this year, be deeply curious to see what his 26 disclosures look like. How are you thinking about this, TW as a Republican, as someone who is no stranger to the financial markets, the president did not break the law. So it becomes a question of whether this is a bad look for all Republicans or maybe he's setting a new precedent. Do presidents get rich now in the White House?
- [09:38]
T.W. Origi
I hope not.
- [09:39]
Joe Matthew
No.
- [09:39]
T.W. Origi
I hope not. And obviously, Donald Trump is breaking A lot of norms across the, across his presidency. And I hope we don't get to a point where this becomes a norm. Part of theone of the things that thrust Donald Trump into office was a deep distrust of Washington. Right. Drain the swamp. Talked a lot about the corruption in the Biden years, especially Hunter Biden, et cetera, et cetera. Two wrongs don't make a right. So I think President Trump has done a lot of good, that he should be out there talking, but instead we're talking about all these other things instead of the wins. Why? Because he is. Some of them are quite egregious. I think World Liberty Financial being the chief among them. The Wall Street Journal report on that a handful of months ago was damning. So, yes, I think the President needs to be more open about what's going on. And if it is in a blind trust, we need to confirm that and confirm that there is no, no dealings going on. Because as money flows in from foreign entities into companies associated with the Trumps, the Wyckoffs or whoever, there is going to be the, the implication that something foul is going on.
- [10:43]
Joe
Yeah, because of course, it's not just the president. There's questions around his family as well. We've already seen a statement from Senator Elizabeth Warren, who's the ranking member on the Banking Committee, talking about how as the Senate is considering advancing crypto regulation legislation, that it needs to guarantee in law that the president, any president and their families aren't going to be able to have ethical conflict in that space. Could that actually disrupt the Clarity act getting through in your mind?
- [11:10]
T.W. Origi
I think it's rich. Any member of Congress talking about anything in financial markets when it's okay to insider trade in Congress. So until they start policing themselves, they ought not throw stones. As we talked about in the previous segment, if Congress wants to act to put more ethical guidelines on the presidency, they have the power to do that. But I also think it's rotten to point the finger and say, you, you, you are bad. When Nancy Pelosi was both sides of the aisle. But Nancy Pelosi being an egregious example of someone who's made a ton of money off of information she had about
- [11:40]
Joe Matthew
the st to check. Nance etf.
- [11:42]
T.W. Origi
Yeah, I know. I'm investing.
- [11:44]
Joe Matthew
It's a. Yeah, well, that's, it's quite a model, Laura. This is the kind of thing that actually can lead to new rules of the road, can actually lead to legislation. Is that the case when the pendulum starts to swing? Next time there is a Democrat in the White House or a Democratic controlled Congress. Do we see a reaction to these types of headlines where we're looking back saying, could you believe the President was allowed to do that back then?
- [12:10]
Laura Fink
I hope so. I mean, this President's potential corruption if found and certainly, you know, you don't have to be a genius to figure out that when you make billions of dollars via a speculative coin and you change your position in order to do so that there's something amiss. And I think we don't want to just to comment on whether, you know, stock trading versus crypto, president versus Congress. We have to sew it all up. And where we start, it might be more palatable for Congress members not to regulate themselves, but to regulate the President. Start anywhere you can get traction and keep going. I think voters are going to really respond too because they've sort of considered this level of graft baked in the pie, but we have never seen it to this degree and at this scale. I mean, the President and his family have made more money since President Trump has been in office, far more than they have prior to that. And in fact, he used to hide his financial returns because he didn't want them being examined or released. And now he's very comfortable doing so because he's in the black and succeeding and succeeding using his office. So if it is very clear that we need to regulate these new forms of investment and potential influence that outsiders and our national interest is truly at stake, American tax dollars are at stake. And there really is no way to to properly underscore how important this is.
- [13:34]
Joe
Laura, while we have you, I also want to get your take on the results we saw in Colorado's primary Yesterday, specifically the 1st congressional district where a 5th 15 term incumbent lost to a Democratic socialist rival who wasn't even born yet. When Diana deget first was elected to the House, we were told last week New York is not the country. But does Colorado tell us something about the way the party is heading?
- [14:00]
Laura Fink
Well, deep blue Denver might be a reflection of New York in more ways than one, but I think there is this. You know, Diana DeGette was not an uncle popular incumbent per se, but voters are looking at choice and they're asking for change. And so you see this energy around the new, around younger candidates, around a more blunt and direct vision and against sort of the perceived inaction of the current Congress. And I think age has a huge part of it. When you have Gen Z voters and younger millennial voters stepping up, they want to see something different. And Diana Degette wasn't able to restart respond to that. And it's also a testament to the quality of the candidates in terms of their ability to communicate a message that resonates. So we saw that again in Colorado last night.
- [14:46]
Joe Matthew
TW We've got less than a minute. You're loving all this, right? Every one of these headlines comes together to create a composite story that Republicans want to tell.
- [14:54]
T.W. Origi
Absolutely. Look, in 2010, Republicans faced the same thing. We nominated a bunch of people who are with us on taxes, who are with us on a balanced budget, but had other views that were way outside the mainstream. And those people lost races they should have won. Today. The the energy on the Democratic Party is with socialists. The woman who won in in Colorado said, We brought 911 on ourselves and a whole slew of other things. The New York there's there's more that we could ever say. So yes, we're excited to have that that debate.
- [15:21]
Joe Matthew
This is a great panel. TW Come back and see us. It's great to have the toast of Boston with us. TW Origi, Push Digital and Laura Fink, Rebel Communications. I'm Joe Matthew in Washington. Patrick McHenry is on the way in next. Stay with us on Balance of Power. We'll have much more coming up after this.
- [15:41]
Public.com Announcer
Support for the show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on Public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent and not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public
- [16:37]
Joe
Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors LLC. SEC registered advisor complete disclosures available@public.com disclosures.
- [16:50]
Joe Matthew
You're listening to the Bloomberg Balance of Power podcast. Catch up us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also Listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130.
- [17:09]
Joe
We're all in the middle of the heat wave that is going to be quite literally hanging over the holiday weekend and the celebrations here on the National Mall for the Fourth of July, which are going to go very late into the evening and include a speech from President Trump. Of course, perhaps a lot of people that won't be in attendance are those elected representatives who represent constituencies in Congress because everybody has gone home already for the 4th of July recess. The House had to adjourn early yesterday because once again, the speaker was not able to get proceedings going on the floor, losing yet another rule vote to advance the ndaa, the National Defense Authorization act, that had tied to it an amendment around the Save America act, which certain members of the House want to see passed, but of course has no path forward in the Senate due to the filibuster, hence the effort perhaps to get it into a reconciliation 3.0 bill. The problem, of course, with the reconciliation process is it has to be budgetary. It's not clear that the Save America act fully is in nature. And that's one of the reasons why President Trump has suggested repeatedly that the Senate parliamentarian who rules in that process needs to go. He took to True Social once again earlier this afternoon. Joe, to reiterate that the Senate parliamentarian should be fired by the Majority leader, John Thune, quote, immediately.
- [18:25]
Joe Matthew
Who could blame them for leaving? This has been quite a fun time for members of Congress. Every time the Republican Party seems to be near a rule or at the actual, well, even signing of a bill that's been passed, a piano falls on them named Donald Trump. We have a lot to talk about with Patrick McHenry now that everybody's gone back to their, their corners and I guess March and 4th of July parades is big question about what will take place when they come back. He's of course, a Bloomberg Politics contributor, a man who once held the gavel, former speaker of the House pro tem and former chair of the House financial services committee. Mr. McHenry, it's great to see you. I can't imagine that you're blaming anyone for not being here. Members. By the way, we're not supposed to go home until tomorrow and we've got a floor of your former House of Representatives that has essentially been closed by hardliners for any number of reasons. Now the president drops another blockade. How the Republican Senate is not firing the parliamentarian who was appointed by Harry Reid, he says, and Barack Obama is beyond me. Is John Thune under his desk somewhere today? How do we get out of this?
- [19:33]
Patrick McHenry
Well, we have an election. That's how we get out of this. This is, this is what happens at the this is typically what happens in the summer before a midterm election. This is not surprising. This is a summer before any election, frankly, in Washington, you have a majority trying very hard to clean things up and get the final pieces of legislation through before the election comes. And you have the least reliable members being the least reliable members and making it difficult to do those things. And that's what's happening here. That's why you have this crazy set of agenda items that Congress is trying to resolve, yet very little goodwill and resolution coming about.
- [20:19]
Joe
Well, so if we can't even in the House see, the NDAA must pass pretty standard protocol reauthorization move forward, how are we expected to believe, Mr. Chairman, that a reconciliation 3.0 package could be successful?
- [20:37]
Patrick McHenry
Oh, I'm hard pressed to see how they get that done. The National Defense Authorization act is the only bill that Congress has passed annually since Harry Truman was in office. It is either begins as a partisan process oftentimes, but always ends as a bipartisan product. When the House of Representatives can't even bring up that piece of legislation before the July 4th recess. And when there are a record number of amendments offered on that piece of legislation, over 1400amendments offered in the House, about 300 were made in order. And yet with member priorities, you know, as a that number is a really standout measure of member interest in a bill and prioritization for their policy or politics. And they couldn't even bring the bill up. That means that for the majority in the House, that has to pass the rule. They couldn't pass a rule on a bill that had that level of interest from members. It is almost impossible for them to do a narrow partisan bill on any matter, period. Not, not considering taxes or any other piece of political messaging going into the election. I really don't see the votes there for much of anything. That means that Congress should just leave town and get on with the electioneering because all that they're going to do is engender ill will among themselves and look worse in the press for not being able to get things done.
- [22:11]
Joe Matthew
And that's apparently exactly what is happening. I've got to ask you, Mr. Chairman, about the financial disclosures from President Trump, not whether you think there's a conflict of interest there. Weigh in as you see fit. I'm curious to know what the potential splashback on the Clarity act might be once there was finally a deal on stablecoin yield, there was a real debate remaining about language around conflict of interest and whether the President, the Executive would be mentioned. Does this derail Clarity when the likes of Elizabeth Warren are crying foul?
- [22:44]
Patrick McHenry
It certainly doesn't help the passage of important crypto legislation like Clarity. What you've had is the progressive left, there is anti crypto use Trump ethics as a justification for opposing this piece of crypto legislation. That does have important impacts on those Democratic members that are pro crypto, that recognize that this is a liability, a political liability for them to leave it unaddressed. And the Clarity act really has nothing to do with presidential ethics whatsoever. It provides legal clarity on what is a digital asset and how it is regulated. Those things are currently unresolved right now. This would actually provide important legal clarity on what is in fact crypto. But the politics of this are really hot. For the Democratic Party and Democratic Senators that are necessary to get the 60 votes in the Senate to pass the Clarity Act. This is really the only major piece of the major issue remaining before the Clarity act can be passed. And the President's financial disclosure statement is significant as it was the enhancement of the gains in his portfolio were significant over the, over the reporting year. That really reinforces the Democrats policy challenge is really a political challenge though for them to answer to their base and to their, their politics on trying to oppose the President and whatever economic involvement he has in the private sector.
- [24:26]
Joe
Well, so how much time is there to get Clarity done then? Realistically, Mr. Chairman, if it doesn't happen before the August recess, is this effort going to go the way of the market structure bill you tried to get the through the last Congress fit 21.
- [24:40]
Patrick McHenry
It has, it has some markings of that. It has some markings of that that that hitting August recess in an election year means that whatever serious things you're working on is effectively dead. The difference here is that you have a significant coalition. You have majorities in both the House and the Senate. You have a bill already passed out of the House. Means instead of the situation I was in, that coming back to September where I had effectively a 2% chance, I say 2% because that was me dreaming that I at least had some chance. Much more like a comment of saying, so you're saying there's a chance more than serious likelihood. I think in this situation you come back and there is a, there is some level of opportunity in September to resolve Clarity. If it's not resolved in July and next to none in October. This, this makes it very, very difficult to see clarity enacting a law unless it's passed in the month of July. The Senate has four weeks to do that. There is possibility for them to wrestle with this and then put it to a vote, at least a test vote at the beginning of the month, hopefully. And then getting, in my view, I think if they did a test vote, they would know where the situation lies and then they can resolve the final issues with the bill to get the commensurate 60 votes and I think later, soon. And Chairman Scott and Senator Lummis absolutely view that as a major priority and their Democratic friends are trying to figure that out as well.
- [26:20]
Joe Matthew
You know, there'll be an opportunity in September as well, Mr. Chairman, to fund the government. And by that we can also say an opportunity to shut it down because of the lack of cooperation here with Democrats and Republicans, the most recent swing at reconciliation and all the madness even within the Republican Party in the House. More specifically, we're hearing the word shutdown in not so quiet conversations at this point. Point. Should we be listening to them?
- [26:49]
Patrick McHenry
No, we should. But look, we had the longest government shutdown in American history. The Democratic Party were the instigators of that. It paid no political price for that. The Department of Homeland Security is effectively chunks of it are still closed down. The Democratic Party has effectively not paid a price for that. So I think the likelihood of a government shutdown come October 1st is fairly high because the Democratic Party that possessed the votes to shut the government down have yet to pay a political price for this. So I think that is what's likely to come in October. The second thing is what we see out of the Democratic primaries, like the primary in Colorado yesterday, we see the socialists on the rise. We see within the Democratic Party. They have the heat, the energy, the activists class, and they're telling their elected officials the Democrat base is that they want to fight. And the way to show a fight is a government shutdown. So I think that becomes much more likely. And what, how does that affect people? I think it just makes it much more difficult to be a federal employee and a government employee because your pay is interrupted. That's an unfortunate fortunate thing that gets caught up in these politics. It's done when Republicans do it and I think it's equally done when Democrats do it.
- [28:14]
Joe
All right, we'll leave it on that note. The former chair of the House Financial Services committee, former Speaker Pro10, former Congressman from North Carolina, Patrick McHenry, now, of course a Bloomberg Politics contributor. Thank you so much as always for joining us.
- [28:26]
Joe Matthew
Stay with us on Balance of Power. We'll have much more coming up after this.
- [28:33]
Public.com Announcer
Support for this show comes from public.com if you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge on Public. You can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English like if the Vix hits 25, buy a put option on the S&P 500 or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk, monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com market and fund your account in five minutes or less. That's public.com market paid for by Public
- [29:29]
Joe
Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, LLC, SEC registered advisor.
- [29:38]
Jay Timmons
Complete disclosures available@public.com disclosures you're listening to
- [29:44]
Joe Matthew
the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple, CarPlay Play and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Rabbit rabbit is the first day of July. That means the first day of the quarter and the second half. And so we are taking a moment here to just take stock of where we are on Wall street after the best quarter in four years, the S&P 500, daring to add six points to that. As Amy just mentioned, the NASDAQ is struggling a bit and our IPO of the day is having a great one. Bending spoons Kelly, I I was feeling old with the Vimeo and AOL references this morning, but apparently these brands are still moneymakers.
- [30:30]
Joe
Yeah, and they're rolling them all together, I guess, trying to become the next tech conglomerate. And perhaps the money raised in this IPO will send them on their way to doing so. It's really a company of companies, if
- [30:41]
Joe Matthew
that's right, if you will.
- [30:42]
Joe
That seems to be the model here. And clearly there's investor appetite for that, with the the Stock now up 23% at the moment in this trading debut. So let's get more on that now as we turn to Norma Linda, our chief markets correspondent for Bloomberg tv. So Nora when we consider the debut for bending spoons here, what is this signaling about the ongoing investor appetite, it seems, for these new offerings?
- [31:05]
Nora Melinda
Well, Kelly, it never ends. And you're seeing the market really latching on to any names that are able to get more and more creative. So what stands out to me, particularly about this ipo, is the CEO saying that it's almost like Google had a baby, like private equity and Google had a baby together. And that's how a lot of people are thinking about this company, because it's not quite just a focus. It's not quite just tech. It's literally a company that is purchasing already existing companies in the tech space and building them and making them better. And so you're seeing the CEO essentially kind of doing a contrast Korean bet where you're seeing a lot of these startups coming out. Well, the company is essentially thinking that we can purchase these companies, snatch them up altogether into a bundle and make them better, instead of spending time on an actual startup from scratch.
- [31:51]
Joe Matthew
Mm. So how are we feeling about this market, Nora? As we roll into the second half here, there are a lot of calls for a potential further unwinding in the trade. For instance, Micron's taking it pretty hard today. Even the president. The president posted some nice words about Micron and its CEO. The stock's down about $100 even after that monster quarter it reported last week. Are we in the throes of a rotation, or could we see a summer pullback?
- [32:16]
Nora Melinda
I mean, I've been hearing a bit of a split on both sides of the sources that I've been speaking with. On the one hand, we've been seeing this continuous rotation as people go in and out of the tech space. Investors not wanting to put all of their money necessarily into tech, and not seeing these companies actually see some return on investment and seeing all the things that they're clamoring for, all the money that they're spending actually being put to work correctly. But then, on the other hand, you're still seeing people considerably, considerably bullish on the tech space. I mean, we saw the s and P500 up about 10% so far this year. A lot of investors are still looking for certain pockets of tech that they think makes sense. So this essentially, from what I'm hearing from my sources, it's going to be the season of investor being picky. They're going to start diving into individual names and seeing which ones actually stand out.
- [33:04]
Joe Matthew
So I just need to listen to what Nora is talking about here. We'll meet you on the Late edition, Nora Melinda, live from world headquarters in New York. And we'll have another read on the markets from Amy Morris coming up at 2pm Eastern Time. Top of the hour as we welcome Bloomberg Businessweek Daily. Really important story today in Washington and has to do with the usmca. And it may not be a surprise if you read the terminal or are reporting@Bloomberg.com, the administration is pulling away from this whole concept, deciding now against renewing its trade deal with Canada and Mexico, choosing instead to conduct annual reviews, remembering this is the day, of course, that it rolls into a renewal without a negotiation. So nothing's technically changed. Now the question is what will be the administration's posture going forward, knowing that it has evolved quite a bit since the president first negotiated the usmca. Listen, the USMCA is the largest, fairest, most balanced and modern trade agreement ever achieved. I would rather not have the agreement, but I may sign it. We do better as a country if we don't have an agreement and we don't have an agreement. Well, I guess technically to change anything, again, we roll into a new year with the same usmca. And joining us to talk about this, its impact on manufacturing and a lot of other issues, is an important voice of industry. Jay Timmons is here, the president, CEO, national association of Manufacturers. A word overdue. Jay, it's great to see you. Welcome back to Bloomberg.
- [34:31]
Jay Timmons
Good to see you.
- [34:32]
Joe Matthew
Are you troubled by this headline or do you take comfort in knowing that this actually doesn't make a big difference today?
- [34:37]
Jay Timmons
Well, it's kind of both.
- [34:39]
Public.com Announcer
Right.
- [34:39]
Joe Matthew
Okay.
- [34:39]
Jay Timmons
So look, I think we kind of expected this. The administration has signaled the president has certainly signaled that he has some concerns that he wanted to see addressed. As you noted, the agreement still is in effect for 10 years.
- [34:51]
Joe Matthew
Yes.
- [34:52]
Jay Timmons
I actually don't think an annual review is a bad thing because the economy changes constantly. The world has changed. I mean, we see it over the last year. We've seen how the world changes. So there are a few issues that probably need to be addressed. So Chinese transshipments is one that the administration's goal when USMCA was put into place during the first Trump administration was to pivot manufacturing away from Asia and into the North American continent. That has largely happened. We see the numbers, the ISM numbers today kind of proving that to be the case. But there's still some issues with some of those issues that they were trying to address back then. I mentioned the transshipment, getting into the energy sector or the energy market down in Mexico is one thing that I think we want to see. Address some of the agricultural issues with Canada. Those are some things that need to be addressed. But overall, I have to think that this, this USMCA deal was a great success story for the United States and North America.
- [35:54]
Joe
Well, so when we considered the administration's suggestion that it's going to pursue basically separate conversations with Mexico and Canada, what would be lost for the manufacturing sector if they had to navigate basically two different trading systems, if that is ultimately a new. Two new sets of deals that are negotiated rather than one North American pact?
- [36:13]
Jay Timmons
Yeah, I mean, look, I think that that is a possibility, Kayleigh, but it has worked so well, you know, as a trilateral agreement, that I'm hoping that we can get back to that point. And I know, and I've met with the ministers of both countries, I've talked with my counterparts in Mexico and Canada, and we know that with the right policies in place, it can work. So our hope is that we'll get through some of these hurdles, if you will, that the administration has identified, and then we'll have a solid agreement moving forward.
- [36:49]
Joe Matthew
I want to talk to you about energy, which is on our minds every day around here. And following the reopening of the strait, we've seen a pretty remarkable decline in oil prices. $68 a barrel for WTI, we're at 71 for Brent right now. Diesel is its own story, though. And I'm wondering what you're hearing from members, if there's a sense of relief or concern that we just spent several months paying a lot more money to get around.
- [37:12]
Jay Timmons
You know, it's kind of funny, just as an anecdote, I was in. I was in Colorado yesterday, driving to the airport, and I was stopped at a stoplight, and there's a gas station right to my right, and they had an electronic board. I would literally watch the price drop $0.12 while I was sitting there. Right. So when the President says that things will move quickly, it certainly, it certainly was borne out at that gas station. But to your question, Joe, look, energy costs are a huge input factor for manufacturers. We use 20% of the nation's energy in manufacturing. So. So every time something moves up on the energy side or the cost of energy, that does have a negative impact for manufacturers. So we're glad to see, obviously, that there is this agreement that has been negotiated, a ceasefire, at least for now, and we're hopeful that it sticks because it is problematic when energy prices do go up. But it also, I think, points out the Relative stability that we seen and you mentioned 68 right now, it shows how important it is for us to be pursuing energy dominance here in the United States. And so the more we are able to produce here at home, the better it is for the global market. And of course, prices are set on a global scale, and it has a big impact based on what we can produce right here in the United States.
- [38:37]
Joe
Well, so when we consider the energy mix here in the United States, we've obviously seen the President pushing more toward nuclear power, for example, as we're in the middle of a heat wave here on the east coast, there's a question as to whether or not our grids are going to be able to sustain it. In all these power sources and especially data center ally as well in Northern Virginia, there's obviously a lot of competition for energy. So how is the manufacturing sector thinking about, about the mix here? What's your involvement?
- [39:05]
Jay Timmons
So we're always for all of the above. We always have been. But, you know, we had a really great set of news come out today. There are three advanced nuclear reactors that are actually up and running and they're going to be producing electricity within the next two or three years. That announcement literally came this morning that we hit three of those. The President challenged the nuclear industry to be able to produce those by July 4th, Independence Day this year. And I'm really pleased to see that that is, that is the case that we're moving forward with that, with that vision. That is going to be critical. But, you know, it's not just nuclear, obviously, it's not just oil and gas. It's alternatives. It is wind, it is solar, all of those. And that is important for the energy mix in this country as well as globally. We're seeing it in other countries as well.
- [39:51]
Joe Matthew
It's really interesting how far we've come from Three Mile island in terms of public perception and the drive to get small modular reactors in place. Space adjacent to data centers. Is that part of the association Jensen Huang likes to call data centers AI factories. Is that part of your group that.
- [40:09]
Jay Timmons
Yes, absolutely.
- [40:10]
Joe Matthew
Or is it the companies that are building data centers?
- [40:12]
Jay Timmons
So we have, we have lots of technology members and technology manufacturers in our membership. And you're exactly right. AI AI factories, you know, are, are the future. And we, to your point, we help build those factories. We utilize AI ourselves in manufacturing operations. And it's helping us become more efficient, more productive and being able to utilize the technology to invent new things and new and new ways of doing business.
- [40:43]
Joe
Do you see artificial intelligence or more automation in general as something that eventually is going to lead to fewer manufacturing jobs in this country?
- [40:51]
Jay Timmons
I do not. It's, I get that question a lot, as you can imagine. And I don't blame, I don't blame folks for asking it. But what we have seen, our real life experience is AI is being used to enhance the manufacturing workplace and actually allowing workers to be more productive and to be more successful. That is a question that has existed for decades. So think about when automation first really started to take off or when the assembly line, you know, back in Henry Ford's days or automation and then the personal computer, all of those technological advances has led to that question. Is this going to hurt manufacturing jobs? And in every single instance, it has allowed manufacturers to do more with different tools, if you will. Right.
- [41:40]
Joe Matthew
So give us a state of play ahead of the jobs report tomorrow. It would be a little weird getting a job Thursday, but that's our plan for 8:30am what will manufacturing bring to us in terms of growth in this report?
- [41:51]
Jay Timmons
Like I've heard that we will likely see a slight increase in manufacturing employment, which does not surprise me because as, as we indicated, the ISM numbers came out six straight months of growth manufacturing. But here's the, here's the other side of that. We have today 500 open jobs in manufacturing. So, wow, I want to see us fill a lot more of those. Right?
- [42:17]
Joe Matthew
That sounds like a training story.
- [42:18]
Jay Timmons
What's that?
- [42:18]
Joe Matthew
Is that a training story? How do you fill those jobs?
- [42:21]
Jay Timmons
It's really, it's really just a match of qualifications.
- [42:25]
Public.com Announcer
Right.
- [42:25]
Jay Timmons
And, and attracting more people into the industry. We're not alone. Every sector of the economy has open jobs for the most part. But this number is, is, I would think, a big concern for policymakers because for every job that is filled in manufacturing, there are another three or four jobs created in other sectors. For every dollar that is produced in manufacturing, you have another $85 of spin off economic activity. So the more people that are in manufacturing, the better an economy does.
- [42:57]
Joe
All right, we'll leave it on that note. The president and CEO of the national association of Manufacturing, Jay Timmons here with us in our Washington, D.C. studio. It's good to see you.
- [43:08]
Joe Matthew
Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at noontime eastern@bloomberg.com
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Joe
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