Bloomberg Intelligence Podcast – Episode Summary

Episode Title: US Consumer Sentiment Drops, Gold Breaks Through $3,000
Date: March 14, 2025
Hosts: Alix Steel and Paul Sweeney
Special Guests:

• Joanne Hsu (Director, University of Michigan Surveys of Consumers)
• Kathy Entwistle (Managing Director, Morgan Stanley Private Wealth Management)
• Brian Platt (Bloomberg Canadian Government Reporter)
• Mike McGlone (Senior Commodity Strategist, Bloomberg Intelligence)

Overview

This episode centers on three major themes:

1. US Consumer Sentiment – A sharp decline in morale driven by inflation and policy instability
2. Major Economic Shifts – Including gold’s historic surge beyond $3,000/oz, equity and bond market anxieties, and how investors are adjusting
3. Global Developments – North American trade tensions, Canadian political upheaval, and commodity trends

Episode Breakdown

1. Plunge in US Consumer Sentiment

Guest: Joanne Hsu, University of Michigan
Time: [01:41]–[03:45]

• Long-Term and Short-Term Worries:
  • The University of Michigan’s consumer sentiment index plummeted to 57.9, well below consensus and prior readings—a drop of 22% since the start of 2025 ([02:28]).
  • Declines were sustained across three consecutive months, signaling reversal of six months of prior improvement.
• Key Drivers Identified:
  • Spiking inflation expectations, with one-year inflation seen at 4.9% ([01:41]).
  • “It’s very clear consumers are really worried about the impact of these policy changes, particularly these tariffs that are changing on a daily basis…concerned this is going to pass through to the prices.” – Joanne Hsu [02:07]
  • Deteriorating sentiment wasn’t just political; decreases were observed among Republicans, Independents, and Democrats alike ([03:31]).
• Memorable Quote:
  • “Consumers are seeing a lot of downside risks in the years ahead.” – Joanne Hsu [02:49]

2. Market Reactions and Investment Strategies

Guest: Kathy Entwistle, Morgan Stanley
Time: [04:08]–[10:37]

• Client Concerns Escalating:
  • Recent calls from clients filled with fear and anxiety about the markets, uncertainty about volatility, and the broader economic outlook ([04:49]).
  • “There’s a lot of anxiety and fear about the markets. But part of our job is to walk them through it.” – Kathy Entwistle [04:49]
• Market Positioning Advice:
  • Focus on quality growth at a reasonable price (“QGARP”) and mid-cap growth or large-cap value stocks ([05:13]).
  • Patience and strategic allocation are emphasized: “If you take your money out, you have the potential to pay cap gain taxes. You also have the potential to not know when the right time is to get back in.” – Kathy Entwistle [06:55]
• Fixed Income & Credit:
  • Municipal bonds for taxable accounts, corporate bonds for retirement accounts—a move toward safety and yield as volatility rises ([07:58]).
  • Avoid taking on high-yield/corporate credit risk given insufficient compensation for the risk: “I come from a time when we had a lot of corporate defaults back in the 80s…There’s no need to take more risk in something that’s supposed to be safer.” – Kathy Entwistle [08:52]
• Alternative Investments:
  • Growing interest in alternatives (20% allocation typical), especially “evergreen” structures that provide liquidity without capital calls ([09:36]).
• Filtering Noise vs. Reality:
  • “Part of our job is to take…the emotions out…and look at where are the opportunities and how can we keep our clients invested in the markets?” – Kathy Entwistle [06:55]

3. Canada’s Political and Trade Reset

Guest: Brian Platt, Bloomberg
Time: [10:59]–[15:41]

• Leadership Change:
  • Justin Trudeau exits, Mark Carney steps in as Prime Minister; expected to call snap elections within a week or two ([14:46]).
• US-Canada Trade Tensions:
  • Carney plans to maintain Canada’s retaliatory tariffs against the US until “the US fully commits to a free and fair trade relationship,” reflecting pressure from Canadian public opinion ([12:30]).
  • “Canadian public opinion is demanding retaliation and in fact probably wants even harsher retaliation.” – Brian Platt [12:30]
• Provincial Retaliation and Tactics:
  • Provinces implementing additional measures, e.g., removing US liquors from shelves in local markets ([13:47]).
• Election Dynamics:
  • Political polls have swung from a likely Conservative sweep to a dead heat, fueled by Trump's tariff threats and Trudeau’s resignation ([15:18]).
• Anecdotal Highlight:
  • “When I was down in Houston, Texas… people were like, Canadians, just mad. Like full on mad.” – Paul Sweeney [13:16]

4. Gold’s Surge Past $3,000 and Commodity Trends

Guest: Mike McGlone, Bloomberg Intelligence
Time: [18:03]–[23:48]

• Historic Commodity Moves:
  • Gold breaks through $3,000/oz, a level McGlone and the hosts never envisioned in prior decades ([18:03]).
  • “The key reason gold’s rallying now is because it’s anticipating the deflation…if US risk assets, most noted stock market, continues to…go down.” – Mike McGlone [18:32]
• Valuation Philosophy:
  • Unlike stocks, gold often goes up just because it went up—scarcity and global monetary demand as persistent drivers ([19:49]).
  • “The main lesson you learn in commodities is they go down because they went up…The big difference is gold.” – Mike McGlone [19:49]
• Global Factors:
  • Deflation in China and potential 20–30% stock market corrections in the US could push gold even higher ([21:09]).
  • The role of US gold reserves and theories about mark-to-market strategies—debated but not material to global pricing ([21:33]).
• Industrial Metals Divergence:
  • Copper remains high but due to US-LME price disparity and tariffs, not organic demand ([22:55]).
  • Industrial metals’ lack of surge—sign of severe global deflationary pressures.
• Notable Reflection:
  • “Gold is up about 65% since February of 2020…The key thing is looking forward is we’re seeing deflationary forces in China potentially kicking over in this country.” – Mike McGlone [19:49]

Notable Quotes & Timestamps

• “Consumers are seeing a lot of downside risks in the years ahead.” – Joanne Hsu [02:49]
• “There’s a lot of anxiety and fear about the markets. But part of our job is to walk them through it.” – Kathy Entwistle [04:49]
• “Canadian public opinion is demanding retaliation and in fact probably wants even harsher retaliation.” – Brian Platt [12:30]
• “The key reason gold’s rallying now is because it’s anticipating the deflation…if US risk assets…continues to…go down.” – Mike McGlone [18:32]

Key Segments & Timestamps

• [01:41]–[03:45] – US Consumer Sentiment Collapse (Joanne Hsu)
• [04:08]–[10:37] – Market Strategy Amid Volatility (Kathy Entwistle)
• [10:59]–[15:41] – Canadian Political and Trade Shifts (Brian Platt)
• [18:03]–[23:48] – Gold’s Milestone and Commodities Outlook (Mike McGlone)

Tone & Style Highlights

• The conversation is brisk, data-driven, with occasional humor—typified by Paul Sweeney’s “gold nerds and gold bugs” comments, and candid anecdotes from the field.
• Each expert offers measured realism, blending statistical insights with practical advice for listeners navigating choppy economic waters.

This episode delivers a comprehensive look at how shifting policy, inflation, international tensions, and historic commodity moves are testing investor nerves—while providing practical, calmly reasoned guidance for those seeking opportunity in uncertainty.