Target Surprises With Upbeat Forecast on Improving Demand

Summary

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Bloomberg Intelligence Podcast: Target Surprises With Upbeat Forecast on Improving Demand

Date: March 3, 2026
Hosts: Paul Sweeney, Scarlet Fu
Key Guests: Emily Cohen (Bloomberg News Consumer Team Leader), Lee Klaskow (Senior Transport Logistics and Shipping Analyst, Bloomberg Intelligence), Kirsten Fontaine Rose (Atlantic Council Senior Fellow), Nathan Dean (Senior Policy Analyst, Bloomberg Intelligence)

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Episode Overview

This episode offers a multifaceted analysis of recent market movers and geopolitical events, centering on:

• Target’s surprisingly positive earnings and its strategy under a new CEO
• The impact of escalating conflict in the Middle East on global trade and supply chains
• The U.S.-Iran conflict’s broader geopolitical context and domestic political repercussions

Expert guests deliver deep dives on company outlooks, logistics shocks, and political dynamics shaping Wall Street and global risk.

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Target’s Earnings and Consumer Strategy

[01:59–07:11]

Key Topics & Insights

• Target Outperforms Expectations:
  • New CEO Michael Fidelke’s first earnings call delivered better-than-expected full-year profit and an upbeat forecast for the coming year.
  • Emphasis is on improving store experiences to reignite Target’s “cheap chic” appeal.
  • Quote:

    “There’s some optimism here. There’s an upbeat forecast on the coming year and [the CEO is] talking about improving the store experience and bringing shoppers back with that cheap chic appeal that the stores have definitely lost in recent years.”
    —Emily Cohen [02:22]

• Differentiation in a Tough Retail Environment:
  • Target aims to stand out by accelerating partnerships with known brands (e.g., ongoing collaboration with Roller Rabbit and more to come).
  • Quote:

    “Bringing in brands that you know and love into Target at a good price point… I think that’s part of the way they want to differentiate themselves.”
    —Emily Cohen [03:14]

• Competitive Landscape:
  • Target competes directly with Walmart and Amazon, both of which have drawn customers with strong grocery offerings.
  • Target acknowledges its lag in grocery and plans to become more competitive in that segment.
  • Quote:

    “They haven’t invested as much in grocery as Walmart has. So one of the reasons that Walmart is seeing higher income shoppers come… is because [of their] appealing grocery section.”
    —Emily Cohen [04:09]

• Product Categories & Store Investments:
  • Focus on “essentials” like food, beverage, and beauty—seen as current bright spots.
  • Target is also investing in store operations: hiring more workers, raising pay, and upgrading the in-store experience.
  • CEO signals a significant $1 billion spend on store improvements, after layoffs at corporate level.
  • Quote:

    “Raising pay is key. I think, you know, they’re going to spend a billion dollars on making the stores more pleasant.”
    —Emily Cohen [05:58]

• Turnaround Strategy:
  • Observers await further detail at Investor Day regarding concrete steps in Target’s turnaround.
  • Early moves: leadership reshuffle, corporate layoffs, planned investments in store experience.

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Geopolitical Risks: Mideast Conflict and Supply Chains

[10:11–14:42]

Key Topics & Insights

• Impact of U.S.-Israeli War on Iran:
  • Oil and gas prices are surging amid the conflict, with broad implications for logistics, shipping, and global supply chains.
• Freight & Tanker Rate Shocks:
  • Tanker day rates have spiked near $500,000 due to premium on capacity and insurance constraints in the region.
  • Higher diesel prices from disruptions are compressing margins for shipping, rail, and trucking companies.
  • Quote:

    “Biggest impact is going to be the inflationary aspect and the higher diesel prices… margins getting pressed…one, two punch…less discretionary [spending] means less stuff shipped around.”
    —Lee Klaskow [10:37]

• Avoiding a Repeat of Pandemic Bottlenecks:
  • While rates are up, container liner operations remain outside the most affected region. The deepest impacts remain within energy markets.
  • Quote:

    “I don’t think you’re going to see what we saw during the pandemic… The biggest impact really is the crude and energy markets.”
    —Lee Klaskow [11:59]

• Knock-On Effects in Air Freight:
  • Middle East airspace closures disrupt both passenger and cargo flights, raising costs notably for DHL, with lesser effects on FedEx and UPS unless disruptions are prolonged.
• Freight Forwarder Opportunities:
  • Disrupted traditional flows create demand for freight forwarders’ services—potential winners amid ongoing chaos.

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U.S.-Iran Conflict: Geopolitics and Domestic Politics

[17:29–32:09]

Key Topics & Insights

• Why the U.S. Acted Now:
  • U.S. intelligence assessed Iran as “toying” with nuclear negotiations; Iran’s development of nuclear and missile capabilities seen as reaching a now-or-never point for military action.
  • Israeli pressure and dense Iranian leadership gatherings created a unique “window.”
  • Quote:

    “The US team said Iran is just toying with us… The time was now or never. The other pressure was… signals from Israel that they were going to strike potentially unilaterally…”
    —Kirsten Fontaine Rose [18:12]

• U.S. Military Strategy & Timelines:
  • Operation aims: destroy Iranian military/navy/nuclear assets, enable regime change if possible.
  • Prioritization: Air defenses, missile facilities, leadership targets. Timeline depends largely on intelligence and Iran’s evasion tactics.
  • Quote:

    “Operation…to destroy an entire military…all the bases, any missile facilities…The battle plan is there. It’s just whether or not intelligence shifts day to day that lays out whether or not the timeline stays solid.”
    —Kirsten Fontaine Rose [22:16]

• Regional Involvement:
  • Gulf cooperation will be tightly coordinated, especially to avoid accidental escalation and manage interceptor/defensive resources. Civilian casualties remain a top concern.
  • Qatar and Saudi have already been drawn in via defensive actions; further Gulf involvement possible as attacks spread.
• U.S. Domestic Political Response:
  • Congressional war powers effort is “mostly symbolic,” aimed at putting members on record before midterms; little chance of overriding a Trump veto.
  • Quote:

    “This is essentially a symbolic vote here…Congress doesn’t like it when presidents start conflicts… but in an election year, people like to play politics.”
    —Nathan Dean [28:20]

  • Prediction markets favor Democrats taking the House (80–85% odds), but only 40% chance for Democrats taking the Senate; Texas primaries seen as a key battleground.
  • Timeline perspectives: majority of market participants think the conflict will end this month, but many expect longer-lasting effects, particularly in the Strait of Hormuz.
  • Quote:

    “The majority of folks think that this is going to be over this month. That’s very different… geopolitical risk will continue for months.”
    —Nathan Dean [31:24]

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Notable Quotes (with Timestamps)

• “There’s some optimism here… bringing shoppers back with that cheap chic appeal.”
  —Emily Cohen [02:22]
• “They haven’t invested as much in grocery as Walmart has.”
  —Emily Cohen [04:09]
• “Raising pay is key. They’re going to spend a billion dollars on making the stores more pleasant.”
  —Emily Cohen [05:58]
• “Biggest impact is the inflationary aspect and the higher diesel prices… margins getting pressed.”
  —Lee Klaskow [10:37]
• “The US team said Iran is just toying with us… The time was now or never.”
  —Kirsten Fontaine Rose [18:12]
• “Operation… to destroy an entire military… The battle plan is there. It’s just whether or not intelligence shifts day to day.”
  —Kirsten Fontaine Rose [22:16]
• “This is essentially a symbolic vote here… Congress doesn’t like it when presidents start conflicts.”
  —Nathan Dean [28:20]
• “The majority of folks think that this is going to be over this month. That’s very different… geopolitical risk will continue for months.”
  —Nathan Dean [31:24]

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Timestamps for Important Segments

• Target Earnings & Strategy — [01:59–07:11]
• Global Logistics & Supply Chain Shock — [10:11–14:42]
• U.S.-Iran Conflict: Military and Geopolitical Context — [17:29–25:10]
• Congressional and Election-Year Politics — [27:56–32:09]

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Summary

This episode provides critical insights into Target’s new direction under CEO Michael Fidelke, with focus on reinvigorating the shopper experience and regaining its unique market positioning. It contextualizes Target’s performance within broader trends of changing consumer habits and competition in essentials and discretionary categories.

Simultaneously, the episode layers in geopolitical analysis, highlighting how conflict in the Middle East is sparking volatility throughout global trade, energy markets, and logistics. The experts break down the implications for transport costs, supply chains, and inflation—while touching on the prospects for policy and elections stateside.

Overall, the discussion blends company research, macro risks, and policy analysis, distilling market-moving events for investors and listeners alike.

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Transcript

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[Bloomberg Intelligence Host]

All about the geopolit politics, you know, front and center here. But there are earnings companies reporting earnings and one of the companies we want to focus on here is Target because it goes to the consumer here. Emily Cohen joins us, consumer team leader for Bloomberg News. Target reported some numbers better than expected profit for the full year. What you learned from the Target and what's the management saying?

[Emily Cohen]

So on management, it's important to remember this is a new CEO Michael Fidelke. First earnings call and there's some optimism here. There's an upbeat forecast on the coming year and he's talking about improving the store experience and bringing shoppers back with that cheap chic appeal that the stores have definitely lost in recent years. So the stock is responding quite positively.

[Podcast Panelist]

I love the term cheap chic. I do agree that when I go to Target I find some quirky finds and I'm like is this really this cheap? But how does Target plan to differentiate itself from competitors like Walmart and Amazon, especially as consumers remain price sensitive and their spending is shifting towards more essentials and not anymore the random things that totally find.

[Emily Cohen]

Yeah, you nailed it. I mean what we, what Target used to do really well is you'd go in for some rolls of toilet paper and you'd come out with sweatshirts and sweatpants and fun things that you didn't know you needed. That was that Target appeal. It attracted wealthier clients to Target. That was its advantage over Walmart for many years. It's lost that appeal. A big part of it is partnership. So we heard Fidelke just now speaking about increasing the pace of partnerships. They have a partnership with Roller Rabbit and more to come. That's part of it. Bringing in brands that you know and love into Target at a, at a good price point. They have a partnership with other partnerships with other brands coming out over the course of the year. I think that's part of, part of the way they want to differentiate themselves for sure. Food and beverage, we heard about this morning too.

[Bloomberg Intelligence Host]

Who do they really compete against day to day, do you think?

[Emily Cohen]

I mean, I think it's obviously Walmart and Amazon. I think one of the reasons Target is struggling right now is because they haven't invested as much in grocery as Walmart has. So one of the reasons that Walmart is seeing higher income shoppers come to Walmart increasingly is because they've made their grocery section a lot more appealing. You can find organic there, you can find a lot of fresh products. You go to Target, it's just not there. So I think with you're going to increasingly see Target try to get more competitive in the grocery aisles, which would put it up against lots of other grocery companies.

[Podcast Panelist]

So does Target then plan to expand their food and essential assortments to, I don't know, maybe stabilize traffic or do you think it'll double down on more discretionary or style LED categories?

[Emily Cohen]

Yeah, I think we'll see, we'll see a bit of both. I think that they called out beauty and food and beverage this morning as some bright spots and I think we'd expect to see more of that.

[Bloomberg Intelligence Host]

So what's Target saying about their consumer? How's their consumer behaving?

[Emily Cohen]

Yeah, I mean the word of the, you know that we're still seeing like very picky consumers who aren't spending as much in the discretionary categories. So I think Target is focusing on what it can do to bring people back. The CEO just said that they're going to be investing in hiring more workers and raising pay. That's pretty key to making the stores more enjoyable. To shop in because that's what Alexis

[Bloomberg Intelligence Host]

Christophers was saying earlier about her Target experiences. Not enough help on the floor. Is that something that's a shared concern among is a company aware of that kind of issue?

[Emily Cohen]

It sounded like it. I mean, raising pay is key. I think, you know, they're going to spend a billion dollars on making the stores more pleasant. I think they laid off a lot of corporate employees too. You know, perhaps that investment is going into making the stores better. So yeah, that is a problem. Slow lines, lots of things locked up in cages when you try.

[Bloomberg Intelligence Host]

Don't get Matt Miller started on stuff.

[Podcast Panelist]

I know. So then with a new CEO, any cultural or operational changes that signaled that the company is truly turning a page after recent challenges? Because you have probably skeptics saying maybe this is a one off.

[Emily Cohen]

Yeah, I mean we've seen he's been in the job for a month. We've seen a reshuffling in leadership. We've seen some layoffs. But where, you know, the company is hosting its Investor Day later today. So we're hoping to learn more about what that turnaround strategy is and any specifics on new initiatives. How big are these investments in stores? Those are the things we're looking for later today with the event that's kicking off shortly.

[Bloomberg Intelligence Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

[IBM Representative]

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[Podcast Host]

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Andro Auto with the Bloomberg business app Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Bloomberg Intelligence Host]

This military conflict in the Mid east cannot be good for logistics, the global supply chain, all that kind of stuff. We learned about this. Every time there's something wrong in the world, it impacts global trade. Which means we need to check in with Lee Klaskow, senior Transport Logistics and Shipping Analyst for Bloomberg Intelligence. Lee, what do you make here of what we're seeing in the Middle east and how it may impact global trade? How are you thinking about it?

[Lee Klaskow]

Yeah, so I mean, at the end of the day it's going to put upward pressure on rates because there's now a premium on capacity, especially as it relates to the tanker industry. We've seen tanker rates get close to almost $500,000 a day. That is just being driven by the fact that people want oil, they're going to have to pay to get it. And the ripple effect really for my world because you know, I Cover marine shipping, air freight guys, and also the folks here in the US the railroads and trucking companies. The biggest impact is going to be the inflationary aspect and the higher diesel prices. When diesel prices rise significantly, it tends to weigh on margins because there is a lag effect on the fuel surcharges that they charge their customers. So you're going to see margins getting pressed. And also the, you know, the one, two punch from that is going to be if consumers have less discretionary money to spend on goods, that means there's going to be less stuff shipped around. So, you know, there's really kind of a ripple effect going on with the events unfolding in the Middle East.

[Podcast Panelist]

If disruptions persist, do you think we could see supply chain bottlenecks similar to 2021-2022? And if so, which sectors do you see will be falling first or will be affected first?

[Lee Klaskow]

I don't think you're going to see what we saw during the pandemic, because at the end of the day, the biggest impact really is the crude and energy markets. So, you know, container liners that are leaving Asia are still going to go to Southern California to unload their goods. You know, the only time it's going to become a problem is that if, you know, this is really prolonged and just people just don't have the energy to manufacture stuff. But let's hope we don't get there.

[Podcast Panelist]

What about vessels? With vessels stalled and rerouting around choke points, how sharply are freight and tanker rates going to rise, in your view?

[Lee Klaskow]

You know, my colleague Ken Lowe out of Singapore, he just put out a note on the Bloomberg terminal earlier today. He was calling for over $500,000 a day in time, charter rates. Again, you know what, it's not so much the diversion, it's the kind of the demand. So people are willing to pay up high. A lot of insurance companies are no longer insuring in the. And so the Strait of Hormuz is pretty much, you know, the Persian Gulf and the Strait of Hormuz is pretty much shut down no matter what the Iranians do.

[Bloomberg Intelligence Host]

So, Lee, if I'm a FedEx pilot, I'm not flying anywhere near that airspace, so I'm going to fly around it. Isn't that going to raise costs for everybody?

[Lee Klaskow]

Yeah. And so like the ripple effect, you know, after the ocean markets, probably the air markets are most impacted, a lot of the airspace in the Middle east has been shut down. A lot of commercial flights are no longer going in and out. And you know what the commercial airlines do is you know where we put our luggage. They also take cargo so that capacity is not available. And you know it is going to impact FedEx, UPS and DHL. DHL is more exposed to the Middle east than the other two. But you know, I think right now it's kind of a de minimis impact to UPS and FedEx. The real question is is how long does this go for? You know, is it going to be days, weeks or months? You know if, if it's just going to be weeks the impact earnings probably won't be that that significant for the FedEx is the EPS is the world and slightly more for DHL. And then also you know a lot of, a lot of these businesses they have forwarder freight forwarding businesses as well. And when you have these supply chains disruptions, shippers will lean heavily on the freight forwarders to help them navig new situations. So you might see, you know, the freight forwarders also tend could benefit. They can benefit from a higher rates and B also getting more customs business.

[Bloomberg Intelligence Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

[IBM Representative]

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you're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am 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.

[Bloomberg Intelligence Host]

The US Israeli war on Iran has entered its fourth day, with oil and gas prices surging and the world adjusting to a conflict that President Donald Trump says has no fixed timeline. And now we're seeing other countries in the region being pulled into the conflict, with Iranian response hitting a number of countries in the region. Our Next guest has 20 years of experience working in the Middle east through various forms of the U.S. government and private practice. Kirsten Fontaine Rose joins us here, senior fellow at the Atlantic Council, joining us via Zoom from Washington, D.C. kirsten, what do you make of the U.S. action against Iran here, just from your experience in the State Department and other areas?

[Kirsten Fontaine Rose]

If the question is why are we doing this now or why is the US Getting involved, there are two answers. One is that during the talks that people were tracking on the nuclear file, the US Team assessed that Iran was not actually making concessions. We heard encouraging things about movement being made, but the reality is what Iran was offering was not to enrich uranium for three years. This time period is what the International Atomic Energy Agency, the IAEA told us same timeframe it would take Iran to restore their uranium enrichment if no restrictions were placed on it. So the US Team said Iran is just toying with us. This is the same delay diplomacy they've been displaying for several U.S. administrations. This is a problem back in D.C. the military and the National Security Council and the president and her team said when the regime revealed this that they were not willing to truly make concessions on the nuclear file or on their missile file. Even Though the US had a massive military buildup on their shores, it caused the US administration to say they intend to build out both programs to the point where the international community would lose any leverage to negotiate with them. They would either build up their nuclear program to the extent that you could no longer safely go after their missile program kinetically, or they would build up their missile program to the extent that it made it too risky to destroy any of their nuclear facilities. So if the current threat on their borders was not enough, nothing would be. And therefore the time was now or never. The other pressure that was in was the US got signals from Israel that they were going to strike potentially unilaterally because of their own feeling of this being a small window of opportunity and it being an existential threat. The US knew that that would mean that the US would be receiving attacks, our bases would be on the receiving end because the Iranian regime had made it clear that any strike by Israel would also be considered a strike by the us. So combine, then add in, sprinkle in intelligence that told us that there would be clustered meetings of senior Iranian leadership. Almost too good to be true. And you wound up with the recipe for strikes when they happened.

[Podcast Panelist]

So with Iran signaling readiness for a long war, where does that leave the US when it comes to reshaping their strategy? We have some people saying it'll be three, four, five weeks.

[Kirsten Fontaine Rose]

It's not really reshaping. However, the US battle plan has been laid. You know, these contingencies have been on the shelf for quite some time. And of course they've been updated, massively updated. But the intent is to wipe out the military, wipe out the navy, and prevent Iran from having a nuclear weapon and create a pathway for the Iranian people to govern themselves, to decide whether they want that to be someone new or to be levels 3 or 4 down within the regime. It's on them. But this kind of operation to destroy an entire military, an entire navy, including underwater assets, all the ships, all the bases, any missile facilities, drone facilities, factories, manufacturing stockpiles, the like, take some time. So the US and Israel started with those air defenses that would prevent Iran from being able to guard against these kinds of strikes. And it went then to long range, medium range ballistic missiles, things that would threaten our bases and Israel. And it's moving on then to leadership, to things like the short range ballistic missiles that Iran barely touched in the June war and is what we're seeing them fire along with drones onto their Gulf neighbors now. So there's kind of a tiered hierarchy of Places that were first priority to hit and now moving down. But the US Operations won't finish until they hit all of their high value target list. Some of those being individuals, but mostly being regime assets. The ways they exert control.

[Bloomberg Intelligence Host]

So given your experience there, Kirsten, is this, is this something that can be achieved in the space of four to five weeks, as President Trump was suggesting, or going to go perhaps even longer?

[Kirsten Fontaine Rose]

It depends on the state of Iran's air defenses, which right now we assess being pretty low, and then on intelligence because we know Iran moves things around. So right now satellite imagery, for instance, is helping our jets that are doing launcher hunting. They're literally scanning the air to look for launchers being moved from the places where they are secretly stored to the places where they are intended to launch, taking them out that way. How many of the stockpiles underground can we, can we reach? Is the leadership on that list moving around? Do we know where they are? So it's the battle plan is there. It's just whether or not intelligence shifts day to day that lays out whether or not the timeline stays solid or not. It also will depend on some geopolitical factors. How is the economy reacting around the world? What kind of damage is coming to the two Gulf partners? It's not that things like damage would cut short US Operations. In fact, if anything, it would probably speed them up.

[Podcast Panelist]

What are the odds that Gulf states like Qatar or UAE will be pulled deeper into a direct confrontation? Perhaps.

[Kirsten Fontaine Rose]

Well, the US May not even want that. These Gulf states have a lot of assets. They have standoff weaponry, they have great air defenses that the US Is interoperable with. But you don't want to clutter the area space. You don't want more situations like we had in Kuwait. We're turning on Kuwait's air defenses, wound up crashing three US Fighter jets. So anything would have to be well coordinated. The US has planned the battle plan around those territories and that airspace not being available. So it certainly won't be a message. Hey, everybody, pitch in when you're ready. All of that would be integrated. The Gulf also tends to have a lot of their air defenses on auto mode, so it expends quite a bit of interceptor stockpile on perhaps one drone and its remnants and the like. So the US Would want to say, before you get involved directly in anything offensive, let's really watch your defenses and make sure they're being well strategically expended. And then if we're going to use things like your standoff weapons, let's coordinate targeting. We want to really limit civilian casualties here. That's a big percentage of the planning has gone into how to limit those civilian casualties. But when you look around, even them participating in air defense is a contribution. And now that you have their civilians being hit, they're much more likely to say we would like to participate. On the offensive side. You saw Qatar already take down two jet fighters. That's more than just turning on Jammer, for instance. And now that Saudi has had embassies hit in their capital, they may they're rethinking the Saudis prior to any engagement message to the Iranians. Very clearly we're not allowing the US to use us as a base for launches. But if you do anything that strikes civilian architecture, we will consider it an act of war. And everything's on the table then. So we could be seeing the Gulf being drawn in.

[Bloomberg Intelligence Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

[IBM Representative]

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[Bloomberg Intelligence Host]

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[Podcast Host]

you're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am 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.

[Bloomberg Intelligence Host]

Congressional war power votes aimed at blocking President Donald Trump Trump from further military action in Iran will likely fail. That is the assessment of our next guest, Nathan Dean, senior policy analyst at Bloomberg Intelligence. He's down there in D.C. i mean, this is just for show, isn't it, Nathan? I mean, the Congress has given up the whole, you know, war powers thing a long time ago to this, to our US Presidency, haven't they?

[Nathan Dean]

Yeah, absolutely. I mean, this is essentially a symbolic vote here. I mean, in order to get this through law, you would have to have both chambers pass it and you'd have to pass it in a way to get a veto proof majority because President Trump would obviously veto this measure. So I think what Senator Tim Kaine, who is the sponsor of this legislation or this resolution, and he did something very similar to Venezuela is aiming to do, is just essentially just put people on record ahead of the US midterms because current polling suggests that 60% of Americans are not on board with President Trump's strategy in Iran. And you know, as you can do in an election year, people like to play politics. And so this is something that I think just generally is more so about political aspects as we get closer and closer to November.

[Podcast Panelist]

But even if passed, resolutions would need a super majority to override Trump's veto. And so that leaves them with, to Paul's point, something largely symbolic. So what is the ideal situation in your view?

[Nathan Dean]

Yeah, so there's two reasons why Senator Tim Kaine is pushing this. The first is Congress doesn't like it when presidents start conflicts and you don't even have to have a Republican president or a Democratic president. You go all the way back over the last 50, 60 years. Congress doesn't like when president starts conflicts without going for congressional authorization. So this is the first reason. The second reason is that, you know, just going back to my point about Politics, all 435 members of the House of Representatives and one third of the Senate are running in November. And this could be a situation where Senator Kaine wants to put people on the record so that if that 60% of the American populace isn't on board with President Trump's Iran strategy grows larger, you can have some very difficult conversations. I mean, this is not going to change President Trump's strategy. When he says that he doesn't need to even think of the polling numbers, he's correct. But you know, he's also not running on the ticket in November. You know, there are going to be some Republicans on the other hand, who are looking at this and looking at the chances the Democrats take the House in November. And I'm not going to say they're going to speak in opposition to this, but they certainly would be a little bit more wary or at least their uneasiness would rise as a result of this vote.

[Bloomberg Intelligence Host]

Nathan, realistically, is the Senate up for play here in the midterms?

[Nathan Dean]

So right now the prediction markets have it about a 40% chance that the Democrats are going to take the Senate. And a lot of it hinges on today, specifically what's happening here. Primary day in Texas. Now you have two races. You have the Republican race and the Democratic race race. You have Ken Paxson, the Attorney General, who according to the prediction markets, has an 85% chance of beating the incumbent, Senator John Cornyn. On the Democratic side, A similar number, 82%, suggests that James Talarico, the moderate Democrat, has a good chance of beating Jasmine Crockett, the progressive. That is the ticket that the Democrats want to see if they have a chance of taking the Texas race. But again, I think most people, at least according to the prediction markets here in Washington, are sort of just taking into account as their scenario. The Democrats a have a really decent chance of taking the house, about 80 to 85%, according to the prediction markets. The Senate is still going to be very difficult despite what happens today.

[Podcast Panelist]

What's the most likely geopolitical scenario your sources are telling you, say, in the next 30 days. What are they preparing for? Maybe best case or worst case scenarios? Best case, depending on the view you're taking.

[Nathan Dean]

Yeah, you know, obviously I think it's the timeline of Iran. I mean, our colleague from Bloomberg Economics was looking at this. Our colleague Wayne Sanders has been looking at this and there's this idea. If you look at the prediction markets, again, in terms of where this is going to end, Kalshi has a contract here. It essentially says the majority of folks think that this is going to be over this month. That's very different to this idea of the geopolitical risk will continue for months, especially in terms of the Strait of Hormuz and all that other stuff. So I think that's the number one thing here to keep in mind from the geopolitical perspective. But I would also just say from the US Domestic perspective, keep in mind that there's going to be a rush to push legislation out this month and next month because Congress, I said, is going to really focus on the midterm elections and that generally stops them from passing legislation.

[Podcast Host]

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and and always on the Bloomberg Terminal.

[Kirsten Fontaine Rose]

Bloomberg Daybreak is your best way to get informed first thing in the morning, right in your podcast feed. Hi, I'm Karen Moscow.

[Nathan Hager]

And I'm Nathan Hager. Each morning we're up early putting together

[Bloomberg Intelligence Host]

the latest episode of Bloomberg Daybreak US Edition.

[Nathan Hager]

It's your daily 15 minute podcast on the latest in global news, politics and international.

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