Tech Hit in Late Hours as Alphabet, AMD Tumble | Bloomberg: The Close 02/04/2025

Tech Hit in Late Hours as Alphabet, AMD Tumble | Bloomberg: The Close 02/04/2025

Show Video

>> A TINGE OF OPTIMISM RETURNED TO THE STREET. FROM STUDIO TWO A BLOOMBERG HEADQUARTERS IN NEW YORK, I AM ROMAINE BOSTICK. >> AND I AM ALIX STEEL. IT'S LIKE YESTERDAY NEVER HAPPENED. TO THAT POINT, TAKE A LOOK AT THE S&P. IF YOU CLOSE ABOVE THE SAFETY .71 LEVEL, THAT IS WHERE WE CLOSED LAST THURSDAY. FOR THE S&P, WE HAVE NOT YET MADE UP THAT DECLINE OVER THE LAST 2.5 DAYS BUT THE VIEW I X IS DEFINITELY CALMING DOWN.

THE TWO YEAR YIELD COMING IN LOWER BY THREE BASIS POINTS WHICH HAS BASICALLY EVENED OUT OVER THE LAST THREE DAYS. GOLD CONTINUES TO GO AT A RECORD SO THERE IS STILL THAT SAFE HAVEN OF BUYING EVEN IF EQUITIES HAVE MADE SEMI-ROUND-TRIP. ROMAINE: THERE IS SORT OF WHEN YOU LOOK AT THE CHAOTIC APPROACH TO U.S. TRADE POLICY, THERE IS STILL

SORT OF A CAP ON RISK SENTIMENT RIGHT NOW. YOU SAW THAT WITH GOLD. IMPLIED VOLATILITY FOR THE DOLLAR STILL FITS WELL ABOVE ITS ONE YEAR AVERAGE. TREASURY FUTURES SEEING STRONG DYING DEMAND FOR A SECOND DAY AND EQUITIES, THE STRONGEST BIDS ARE THE INDIVIDUAL STOCKS TO THE STRONGEST COMPANIES. APPLE, NVIDIA, AMAZON, AND META.

>> YOU HAVE AN ABUNDANCE OF LONG-TERM GROWTH STORIES THAT CAN BE SOMEWHAT INFLATED FROM THIS TARIFF NOISE. ROMAINE: MAYBE THAT IS WHAT INVESTORS ARE LOOKING FOR. THAT NOISE HAS BEEN LOWERED TO A HOME FOR NOW AS CANADA AND MEXICO NEGOTIATED A ONE MONTH REPRIEVE FROM THOSE NEW TARIFFS BUT THE SPECTER STILL LOOMS IN THE PROMISED PHONE CALL HAS YET TO HAPPEN. CALVIN KLEIN PARENT COMPANY PVH NOW ON CHINA'S BLACK LIST AND SO IS A GENE SEQUENCING COMPANY AND A BRITISH COMPANY WHICH GETS ITS ALCOHOL SALES FROM NORTH AMERICA, SCRAPPING ITS LONG-HELD SALES TARGETS. CEO'S ON CONFERENCE CALL TODAY PEPPERED WITH QUESTIONS ABOUT HOW THEY ARE PREPARING FOR AN ESCALATING TRADE WAR.

ONE OF THOSE QUESTIONS LIKELY TO BE PITCHED AT EXECUTIVE TONIGHT WHEN A FLURRY OF EARNINGS ACROSS A SWATH OF SECTORS CROSSES AFTER THE BELL WHILE TECH HEAVYWEIGHTS LIKE ALPHABET MAY BE ABLE TO WHETHER THE TRADE TUMULT. OTHER COMPANIES REPORTING THAT THEY ARE LIVING IN A DIFFERENT REALITY, JUGGLING WORRIES ABOUT TARIFFS, JUGGLING WORRIES ABOUT HIGH INTEREST RATES, AND JUGGLING WORRIES ABOUT STILL STUBBORN INFLATION. ALIX: ALL OF THAT LEADING TO CONTINUED WORRIES ABOUT INFLATION. MORGAN STANLEY MOVING THE FED CALL TO ONE CUT THIS YEAR IN JUNE INSTEAD OF TWO AND THESE -- THIS CHART ILLUSTRATES WHY. THE ORANGE LINE IS THE 10 YEAR BREAKEVEN. RIGHT HERE IS WHERE THE ELECTION HAPPENED AND EVER SINCE THEN, THE TWO YEAR YIELD HAS CONTINUED TO CLIMB.

TWO-YEAR INFLATION EXPECTATION CONTINUES TO CLIMB AND GOT A REALLY BIG SPIKE AT THE END OF LAST WEEK AS WELL SO YOU HAVE HIGHER INFLATION EXPECTATIONS NOW AND FED CUTS BEING DIALED BACK FOR THIS YEAR AND YOU SAW THAT REFLECTED VERY MUCH IN THE BOND MARKET YESTERDAY WITH SELLING OF THE FRONT END AND BUYING OF THE LONG END, ROMAINE. ROMAINE: LET'S GET RIGHT TO IT WITH THE SENIOR PORTFOLIO MANAGER OF THE GLOBAL DEBT TEAM. ALL RIGHT. WHAT IS THE BOND MARKET TELLING US RIGHT NOW? >> WE ARE JUGGLING TWO DIFFERENT TEAMS. YOU SAW THAT YESTERDAY. WITH THE TWIST AND THAT THERE IS A BID TO THE FRONT AND, WE LOOK AT IT AND SAY IT IS PERFECTLY PRICE HERE. WE ARE FLAT TO POLICY RATES AND

THERE IS VALUE. THE LONG END WILL KIND OF WOBBLE BETWEEN IF YOU HAVE FLIGHT TO QUALITY BID AS WE ARE ALL DIGESTING THESE HEADLINES IN A CHANGING MINUTE BY MINUTE AND THE REALITY OF DO WE HAVE SOFTER GROWTH COMING DOWN THE PIKE? DO WE HAVE MORE INFLATION? DO WE NEED TO BUILD PREMIUM FOR ALL THE SUPPLY THAT IS COMING? ROMAINE: ALL THIS SEEMS TO LINK BACK TO THE WHITE HOUSE AND WE ARE WAITING TO HEAR FROM PRESIDENT TRUMP YET AGAIN. MORE EXECUTIVE ORDERS AND MORE COMMENTARY ON SOME OF THE TRADE POLICIES. HOW DOES A MARKET SORTER REACT TO SOMETHING THAT IS ALMOST NOT REACTIVE WILL BECAUSE YOU DON'T REALLY KNOW WHAT IS COMING NEXT? >> WE ARE ALL DEALING WITH A WORLD OF UNCERTAINTY AND I THINK FROM THE TIME WE GOT THE ELECTION RESULTS IN NOVEMBER, WE SAID WHAT ARE HIS BIGGEST PRIORITY INITIATIVES? IT SEEMS TO BE IMMIGRATION, TARIFFS, TAXATION, AND DEREGULATION. WHAT ORDER DO WE GET THEM, WHAT IS THE MAGNITUDE, HOW QUICKLY DO WE GET THEM? WE ARE ONLY ON DAY 14 POST INAUGURATION. IT HAS BEEN FAST AND FURIOUS. WE STILL NEED TIME TO DIGEST WHAT WILL BE THE IMPACT OF THESE, RIGHT? WE ARE SEEING MUCH BIGGER HEADLINE TARIFF NUMBERS BUT THEY ARE ON PAUL'S ALREADY.

SO WE HAVE HAD A LOT TO DIGEST. IT WILL TAKE SOME TIME TO SEE HOW IT FLOWS THROUGH. ALIX: INITIAL REACTION CAN CHANGE. THE S&P HAS ALMOST CIRCLED BACK TO WHERE WAS AT THE END OF THURSDAY. TWO-YEAR MOST DEFINITELY HAS, RIGHT WHERE WE CLOSED ON THURSDAY AFTERNOON FROM THE TREASURY MARKET SO HOW DO YOU DO AND INVESTABLE THING AND TRADING THING IN THE TREASURY MARKET RIGHT NOW? KRISTINA: WHAT DO WE KNOW AND WHAT ARE WE WAITING FOR? IN TERMS OF OUR ANCHOR FROM HERE IS WE THINK THE FRONT END OFFERS VALUE BECAUSE WE ARE AT FLAT TO POLICY RATES. WE DON'T HAVE NEGATIVE CARRY AND THEN WE CAN STRUCTURE PORTFOLIOS AROUND THAT WHETHER IT IS MORTGAGES OR SHORT DURATION CORPORATE BONDS. THOSE KINDS OF THINGS.

I THINK OUT THE CURB, IT BECOMES A LOT HARDER AND WE ARE ALL SITTING HERE AND SAYING THREE MONTHS OUT, SIX MONTHS OUT, WHAT ARE THE IMPACTS? DO WE HAVE LABOR MARKET IMPACT BECAUSE OF IMMIGRATION? IS THE BIGGEST PAIR OF IMPACT, IS IT A GROWTH NEGATIVE OR INFLATION SHOP? >> IT COULD BE BOTH BUT THEN WHERE DO YOU WEIGH IT THE MOST? WHEN DO YOU WIND IT -- WIND UP TAKING INTO ACCOUNT ISSUANCE? IT DOESN'T LOOK LIKE THERE IS A LOT OF CHANGE IN TERMS OF HOW MUCH BORROWING BUT WHEN DOES THAT START TO MATTER? >> OVER THE LAST NUMBER OF YEARS, THE U.S. EXCEPTIONALISM STORY CONTINUED TO DRAW MONEY INTO THE U.S. BECAUSE IT IS NO OTHER MARKET LIKE IT AND I THINK AS THE U.S. AS AN ISSUER CONTINUES TO BENEFIT FROM THAT, IF YOU LOOK AT THE AMOUNT OF SUPPLY OUT THERE, THE CURB SHOULD BE STEEPER BUT WE HAVE NOT GOTTEN THERE AND I THINK THE PUSH AND PULL IN THE LONG AND WILL BE IS IT THE FEAR FACTOR CONCERNS ABOUT WHAT THE DOWNSIDE IS THAT HAS A FLIGHT TO QUALITY BID OR IS IT BUILDING IN TERM PREMIUM? >> I'M SORRY TO CUT YOU OFF. I'M CURIOUS ABOUT WHAT YOUR EXPECTATION IS WITH HOW THE FED FACTORS INTO THIS. WE HEARD FROM A NUMBER AS WELL KIND OF INDICATING THAT THEY ARE WILLING TO JUST KIND OF WAIT AND SEE HERE JUST TODAY -- THE TEAM LOWERED THEIR OUTLOOK TO JUST ONE THIS YEAR.

>> THE CLEAREST OPTION SEEMS TO BE KIND OF A SIX MONTH WAITING PERIOD. WE KNOW THAT THE FED KIND OF HISTORICALLY, ONE DATA PRINT DOESN'T DO IT. IF IT IS TWO IN ONE DIRECTION OR ANOTHER, THEY START TO GET WORRIED AND THREE, THEY NORMALLY CAN REACT ON. IF YOU LOOK AT THE LABOR MARKET DATA AND WE HAVE PAYROLLS ON FRIDAY, THE LAST THREE OR FOUR NUMBERS HAVE ALL HAD THESE NOISE FACTORS, WHETHER IT IS THE HURRICANES, THE WILDFIRES, THERE'S BEEN ALL THESE BITS AND PIECES.

THE INFLATION NUMBERS, WE HAVE ALL OF THESE POLICIES THAT ARE NOW BEING PUT INTO EFFECT SO EVEN TO SAY YOU GET THE ONE INFLATION PRINT, CAN THEY REACT TO THAT? I THINK JUNE IS PROBABLY THE SOONEST YOU CAN REALLY TALK ABOUT WHAT WE DO AND I THINK THE FED CAN COMFORTABLY SIT AND SAY WE HAVE DELIVERED 100 BASIS POINT OF EASING. KNOW THAT THERE ARE LAGS. THAT'S WAIT AND SEE WHAT WE GET. WE DON'T WANT TO BUY INTO BEING A POLITICAL ORGANIZATION AND WE ARE GOING TO DO WHAT WE CAN WITH THE REAL DATA WHEN WE GET IT. ROMAINE: GREAT STUFF. GREAT TO HAVE YOU HERE TO KICK US OFF TO THE CLOSE. CHRISTINA, SENIOR PORTFOLIO

MANAGER OF THE GLOBAL DEBT TEAM AT INVESCO. STICK AROUND. WE WILL HEAR IT BACK. ROMAINE: LET'S GET A VIEW. BIG MOVERS ON THE BACK OF ANALYST RECOMMENDATIONS THAT WE START WITH JUNIPER NETWORKS.

EVERCORE ISI UPGRADING THE COMMUNICATIONS EQUIPMENT COMPANY TO OUTPERFORM. WHILE THE U.S. JUSTICE DEPARTMENT MAY THREATENING THE DEAL TO MERGE WITH HEWLETT-PACKARD ENTERPRISES, JUNIPER WILL STILL BE JUST FINE WITHOUT IT. THAT IS GIVEN THE COMPANY'S POTENTIAL FOR MARGIN EXPANSION AND CLOUD SERVICES. NEXT UP, PALANTIR RAISED AT MORGAN STANLEY.

THE PRICE TARGET BUNCH TO 95 FROM 60 AFTER LAST NIGHT'S EARNINGS REPORT. THE ANALYST TOUTS THE STRENGTH OF PALANTIR'S OUTLOOK DRIVEN BY DEMAND FOR BOTH ITS COMMERCIAL AND GOVERNMENTAL UNITS. THOSE SHARES AT A RECORD HIGH. AMC ENTERTAINMENT, AND UPGRADE TO NEUTRAL ON THE BELIEF THAT THE SHARES SHOULD BE AT OR NEAR THE BOTTOM. THE BOX OFFICE SHOULD BE ENTERING A POSITIVE CYCLE TO WHICH THE ANALYST SAYS COULD HELP AMC RETURN TO POSITIVE CASH FLOW. THE STOCK WHICH HAS BEEN

FLATLINED WITH MORE THAN A YEAR NOW AFTER PLUNGING FROM $388 A SHARE, UP 3% TO THREE DOLLARS AND $.17 A SHARE AND THOSE ARE SOME OF OUR TOP CALLS. ONE COMPANY THAT IT'S REAPING THE BENEFITS OF A POSITIVE BOX OFFICE CYCLE IS WHAT DISNEY. THE MEDIA AND ENTERTAINMENT CONGLOMERATE WILL RELEASE ITS FIRST QUARTER REPORT TOMORROW MORNING AND INVESTORS ARE EAGER TO HEAR MORE ABOUT THAT STREAMING BUSINESS AS WELL AS WHETHER DISNEY THEME PARKS ARE ABLE TO BRING THE MAGIC.

THENCE WHEN BERGSTEN AHEAD OF U.S. MEDIA RESEARCH AT MORGAN STANLEY, HAS GOTTEN OVERWEIGHT RATING ON THE SHARES. NUMBER ONE THING YOU ARE GOING TO BE LOOKING FOR OUT OF THAT REPORT TOMORROW MORNING? >> THANKS FOR HAVING ME. I'M FOCUSED ON THE EXPERIENCE THIS SEGMENT TO YOUR POINT ABOUT THE PARKS BUSINESS.

THIS IS OVER A $38 BILLION ANNUAL SALES SEGMENT FOR THE WALT DISNEY COMPANY, ALMOST TWO THIRDS OF THE EARNINGS BASE. WE KNOW THERE ARE SOME HURRICANES IN THE FISCAL FIRST QUARTER THAT WILL PRESSURE RESULTS BUT WE ARE REALLY FOCUSED ON THE FORWARD OUTLOOK. IN PARTICULAR HOW THEY ARE GOING TO COMPETE WITH THE NEW EPIC UNIVERSE FROM COMCAST COMING TO ORLANDO IN MAY. >> IS THAT A REAL THREAT? WHEN I THINK ABOUT DISNEY SPECIFICALLY, THEY ALMOST SEEM LIKE THIS SINGULAR THING ON THEIR OWN. I KNOW THERE ARE OTHER PARKS IN CALIFORNIA BUT I DON'T KNOW. NOBODY RAISES THEIR HAND -- LIKE UNIVERSAL STUDIOS. THEY SAY TAKE ME TO DISNEY

WORLD. >> NONE TAKEN AND LOOKED, I GENERALLY AGREE WITH YOU. WHAT I WOULD SAY IS I THINK INVESTORS ARE CONCERNED. IT IS THE BIGGEST NEW OPENING IN THE ORLANDO MARKET IN DECADES. AND THE REALITY IS THAT DISNEY'S PARKS PERFORMANCE IN 2024 WAS A BIT DISAPPOINTING SO THE COMPANY EXPECTS IMPROVEMENT THROUGH FISCAL 25 AND WE ACTUALLY THINK THEY COULD OUTPERFORM EXPECTATIONS IN PART BECAUSE OF SOME NEW CRUISE SHIPS COMING TO MARKET. THE STOCK WE THINK HAS BEEN STUCK A BIT AS A RESULT OF CONCERNS OVER COMPETITION AND LAST YEAR'S PERFORMANCE SO THAT IS WHY WE THINK TOMORROW COULD BE A POSITIVE CATALYST FOR THE STOCK IF THE COMPANY IS ABLE TO DELIVER GOOD NUMBERS ALIX: AND GIVE CONVICTION TO THEIR OUTLOOK. ALIX:I'M SURE THEY WILL SAY THEY LOVE

THE COMPETITION. LET'S TALK ABOUT STREAMING FOR A SECOND. WHAT WOULD BE A GOOD ENOUGH GROWTH IN STREAMING? >> LAST MONTH, THEY MADE MONEY IN STREAMING FOR THE FIRST TIME SINCE THEY GOT INTO THAT BUSINESS. $1 BILLION AT EBAY AND THERE IS REAL OPPORTUNITY FOR UPSIDE IN 2025 RELATIVE TO EXPECTATIONS. THEY GOT INTO A SLIGHT DECLINE

IN DISNEY PLUS CUSTOMERS IN THE FIRST FISCAL QUARTER BUT THEY DID HAVE VERY BIG FILMS FROM THE SUMMER AND FALL COME ONTO THE SERVICE. THINK ABOUT DEADPOOL THREE. AT THE BOX OFFICE, THEY HAD A REALLY STRONG PERFORMANCE OVER THE HOLIDAYS, PARTICULARLY WITH NO ONE AT TWO. A POSITIVE NUMBER WOULD BE GOOD AND AS WE LOOK AHEAD, WE THINK THAT IS REAL OPPORTUNITIES FOR THEM TO GROW THAT BUSINESS, DOUBLE DIGITS ON THE TOP LINE. >> DEADPOOL AND WOLVERINE IS LIKE MY FAVORITE. WHO DO WE COMPARE DISNEY'S STREAMING TO? CANNOT COMPARE IT TO NETFLIX. THAT IS NOT GOING TO BE GOOD FOR THEM. WHAT IS GOOD TO SEE IF THOSE

STREAMERS ARE GOOD ENOUGH? >> IT IS A GREAT POINT. I MEAN, NETFLIX IS IN A WORLD OF ITS OWN FOR SURE FROM A SKILL POINT OF VIEW BUT FOR DISNEY, WE THINK THIS COULD BE THEIR FASTEST-GROWING EARNINGS BASE AND IF WE GO BACK TO SORT OF BIG PICTURE WHAT IS THE WALT DISNEY COMPANY? HISTORICALLY, IT HAS BEEN A MEDIA COMPANY THAT BUILT ITS EARNINGS BASED ON TRADITIONAL TV. THAT IS NO LONGER THE CASE AS WE THINK ABOUT TODAY AND OVER THE NEXT THREE TO FIVE YEARS. IT IS FIRST AND FOREMOST EXPERIENCES AND SECONDLY STREAMING, PARTICULARLY IF YOU LOOK OUT OVER THE LONGER TERM SO WHEN WE THINK ABOUT DOUBLE DIGIT EARNINGS GROWTH STARTING IN 2026 AND HOPEFULLY GETTING INTO THE TEENS, THE BIGGEST DRIVER OF THAT GROWTH RATE IS GOING TO COME FROM SCALING DISNEY PLUS IN THEIR STREAMING BUSINESS. ALIX:

IS THIS -- ROMAINE: IS THIS IDEA THAT ALL OF ITS MOTIVE CONNECT TOGETHER? THERE HAS BEEN A LOT OF DISCUSSION. I THINK BOB IGER HAS PUSHED BACK ON IT BUT THERE HAS BEEN A LOT OF DISCUSSION ABOUT WHETHER SOME OF THESE BUSINESSES SHOULD BE SPLIT OFF BASICALLY TO STAND ON THEIR OWN. I WAS ALWAYS UNDER THE IMPRESSION THAT KIND OF THE HOLE WAS ALMOST BETTER THAN THE PARTS. CLOCKS YES. I THINK IN GENERAL, YOU ARE RIGHT. I OFTEN MAINTAIN THE VIEW WITH INVESTORS THAT THE PRIMARY WAY WALT DISNEY MONETIZES ITS ICONIC BRANDS AND FRANCHISES IS ACTUALLY THROUGH THE PARKS, THE PHYSICAL MANIFESTATION OF THE IP AND EXPERIENTIAL ASSETS WHICH WE THINK HAVE LONG-TERM SECULAR GROWTH TALENTS TO THEM.

YOU THINK ABOUT MAKING MOVIES AND MONETIZING THEM INDUSTRY READING THEM TO THE BOX OFFICE. YOU MONETIZE THEM THROUGH STREAMING. ALL OF IT DOES FIT TOGETHER AND ONE OF THE MOST INTERESTING AREAS OF DEBATE AS WE LOOK OUT THROUGH THE REST OF THIS YEAR IS THE SPORTS CASE ON ESPN WHICH IS GETTING TO BE A SMALLER PART OF THE EARNINGS PRIVATE SPORTS IS SO IMPORTANT TO THE U.S. AND GLOBAL CONSUMERS SO FIGURING OUT HOW ESPN FITS OR DOESN'T I THINK IS A BIG TOPIC.

>> WE REALLY APPRECIATE IT. THEN JOINING US FROM MORGAN STANLEY, THANK YOU VERY MUCH. COMING UP, WE ARE GOING TO SPEAK TO BILL DUDLEY ABOUT HIS LATEST BLOOMBERG OPINION PIECE TALKING ABOUT HOW TRUMP'S TARIFFS ARE EVEN WORSE THAN I IMAGINED. MORE ON THIS ON THE CLOSE ON BLOOMBERG. ♪ >> PRESIDENT TRUMP AGREEING TO DELAY THE 25% TARIFFS ON CANADA AND MEXICO FOR A MONTH AND SET TO SPEAK WITH PRESIDENT XI JINPING ON CHINA VERY SOON. IN HIS LATEST PIECE, BILL DUDLEY RICE THE TARIFFS ON CANADA AND MEXICO WILL DEEPLY DAMAGE AN ECONOMIC ECOSYSTEM THAT HAS HELPED THE U.S.

REMAIN GLOBALLY COMPETITIVE. BILL DUDLEY JOINS US NOW WITH MORE. WE APPRECIATE YOUR TIME TODAY. DO YOU FEEL LIKE THE EFFECT WILL BE FELT MORE ON THE INFLATION SO IT -- INFLATION SIDE OR THE GROWTH SIDE? >> WE DON'T KNOW WHAT IS GOING TO HAPPEN BUT ASSUMING THE TARIFFS ARE ENACTED A MONTH FROM NOW, THE EFFECTS WILL BE ON BOTH SIDES. WE HAVE HIGHER PRICES AND LOWER GROWTH BECAUSE EVERYTHING IS GOING TO BE MORE EXPENSIVE AND ALSO, THE TARIFFS ARE GOING TO DISRUPT SUPPLY CHAINS SO THAT IS ALSO GOING TO LOWER PRODUCTIVITY GROWTH.

THE KEY THING ABOUT WHICH ONE PREDOMINATES, PRICES OR GROSS, IS WHETHER THE INCREASE IN THE PRICE LEVEL CAUSED BY THE TARIFFS BEATS PEOPLE'S VIEWS OF INFLATION ON AN ONGOING BASIS. INFLATION EXPECTATIONS ARE WELL ANCHORED LIKE IN 2017, 2018, 2019. THE FED COULD LOOK THROUGH THAT INCREASING THE LEVEL AND FOCUS ON GROWTH BUT IF THE PRICE LEVEL INCREASE GETS INTO INFLATION EXPECTATIONS, THAT IS A MUCH MORE DIFFICULT SITUATION AND THE SITUATION IS OBVIOUSLY DIFFERENT NOW THAN IT WAS BACK IN 2018 AND 2019 BECAUSE THEN, INFLATION WAS RUNNING BELOW THE TWO PERCENT OBJECTIVE. WE HAVE BEEN RUNNING ABOVE THE FED'S 2% OBJECTIVE FOR OVER FOUR YEARS. >> THAT BRINGS ME TO SOMETHING WE BROUGHT UP EARLIER IN THE SHOW. THE TWO-YEAR INFLATION BREAKEVEN HAS BEEN RISING SINCE THE ELECTION SO IF I AM LOOKING AT THAT JUST AROUND 3% AND YOU WERE STILL AT THE FED, HOW WOULD YOU BE UNDERSTANDING THAT? >> I WOULD BE TRYING TO FIGURE OUT IF THIS IS A ONE-TIME BLIP OR SOMETHING THAT IS GOING TO LAST A LOT LONGER.

THERE ARE ALSO MEASURES OF INFLATION EXPECTATIONS IF YOU LOOK AT LONG-TERM INFLATION EXCITATIONS. FOR EXAMPLE, YOU CAN LOOK AT THE SPREAD BETWEEN TIPS AND TREASURY SECURITIES AND TREASURY -- CALCULATE FROM FIVE YEARS TO 10 YEARS FORWARD. THAT HAS NOT MOVED VERY MUCH SO THAT IS THAT WHEN THE FED WILL BE FOCUSING ON, LONG-TERM INFLATION EXPECTATIONS RATHER THAN THE SHORT TERM. TO THE EXTENT THAT TARIFFS ARE GOING UP, WE KNOW PRICES WILL GO UP IN THE SHORT-TERM. >> IS THERE A CASE TO BE MADE WHEN WE TALK ABOUT WHAT TRUMP IS DOING WORK WHAT HE HAS PUBLICLY SAID HE IS DOING THAT IT CAN BALANCE OUT? I ASK THAT IN THE CONTEXT THAT HE WAS KIND OF ASKED SPECIFICALLY ABOUT THE ECONOMIC IMPACT AND THE MARKET IMPACT AND HE SEEMED TO SUGGEST THE ISSUES HE SAYS HE'S TRYING TO RESOLVE ARE ALSO HAVING AN ECONOMIC DRAG AND HE'S BASICALLY TRYING TO FIND BALANCE BETWEEN THE TWO. >> WELL, I SUPPOSE YOU COULD MAKE THAT ARGUMENT BUT THE CASE OF THE 25% ACROSS-THE-BOARD TARIFFS BUT ON CANADA, WHAT DID CANADA DO TO DESERVE THAT? THERE IS NOT A LOT OF ILLEGAL IMMIGRATION FROM CANADA INTO THE U.S. AND THE FENTANYL THAT SEEMED TO

BE COMING ACROSS THE CANADIAN BORDER TO THE UNITED STATES IS A DE MINIMIS. THAT SEEMS MORE OF AN EXCUSE TO PUT CANADA WITH A 25% TARIFFS. THE BIG PROBLEM WITH 25% TARIFFS ON CANADA AND MEXICO IS THEY ARE PART OF AN INTEGRATED ECONOMIC TRADE ZONE. THE SHORING THAT HAS BEEN TAKING PLACE OVER THE LAST 10 YEARS INTEGRATED THE CANADIAN AND MEXICAN ECONOMY WITH THE U.S. ECONOMY. YOU ARE BLOWING UP THAT INTEGRATION -- THE ECONOMIC INTEGRATION WHICH HAS HAD QUITE A FEW BENEFITS FOR THE UNITED STATES. >> LET'S FACE IT, TRUMP IS EFFECTIVELY RIPPING UP HIS OWN U.S. NORTH AMERICAN TRADE DEAL WHICH

OF COURSE HE RIPPED UP THE PREVIOUS ONE PRIOR TO THAT. FROM AN ECONOMIST STANDPOINT, WE HEARD FROM SEVERAL MEMBERS OVER THE LAST FEW DAYS IN A COUPLE OF OTHERS WHO MADE IT CLEAR THAT THEY ARE JUST GOING TO WAIT AND SEE TENANT THAT THEY REALLY WANT TO SEE THE EYES OF INFLATION BEFORE THEY REACT AND I WANT TO PUT THIS DELICATELY. BUT IS THERE A CASE TO BE MADE FOR THE FED TO BE MORE PROACTIVE? >> I THINK IT MAKES SENSE FOR THE FED TO WAIT AND SEE FOR TWO REASONS. NUMBER ONE, THEY THINK POLICY CURRENTLY IS RESTRICTIVE SO WE DID NOT SEE A RESTRICTIVE SETTING SO THAT DESERVES A BIT MORE RESTRAINT FOR INFLATION AND WE CAN SEE HOW QUICKLY THINGS CAN CHANGE. I MEAN, IN THE LAST 48 HOURS, IT HAS GONE FROM 25% TARIFFS ON CANADA AND MEXICO WHICH WILL BE IMPLEMENT IT IMMEDIATELY TO A ONE MONTH HOLD AND WE WILL SEE WHAT HAPPENS WHEN THE TIME PERIOD EXPIRES IN EARLY MARCH.

>> SO HOW OFTEN -- HOW QUICKLY CAN THIS PASS-THROUGH TO THE ACTUAL CONSUMER INTO THOSE EXPECTATIONS IN YOUR HISTORY AND STUDIES? >> PRETTY FAST BECAUSE YOU KNOW, AS SOON AS SOMEONE KNOWS THE COST OF THE IMPORTS THEY ARE BRINGING IN ARE GOING TO GO UP SIGNIFICANTLY, THEY WILL PROBABLY START RAISING THE PRICES ON THE SHELF TODAY. THEY KNOW THEY WILL HAVE TO REPLACE THOSE GOODS WITH MORE EXPENSIVE GOODS SO THERE'S ALSO GOING TO BE HOARDING BY CONSUMERS. I MEAN, YOU KNOW, IF YOU KNOW THE PRICE IS GOING TO GO UP IN THE FUTURE, YOU WILL TRY TO BUY IT TODAY AND THAT WILL ALSO GIVE MORE PRICING POWER TO THE PERSON SELLING THAT PRODUCT. SO I THINK THAT IT WON'T TAKE VERY LONG FOR HIGHER TARIFFS TO GET INTO HIGHER PRICES. >> I'M SURE YOUR FAVORITE QUESTION, WE ARE LOOKING 34 BASIS POINTS OF CLOTS >> IN ON THE BLOOMBERG TERMINAL.

WE HAD MORGAN STANLEY HSA, YOU KNOW WHAT, ONE PLANT THIS YEAR, NOT TWO, AND THAT WILL BE IN JUNE. DOES THAT MAKE SENSE? LOOKING AT ONE TIME NOW? >> YES, THAT MAKES SENSE. MY THESIS IS THAT, YOU KNOW, INTEREST RATES ARE NOT EXERTING THAT MUCH ASK RESTRAINT ON THE ECONOMY. THE SO-CALLED MUTUAL REAL INTEREST RATE IS HIGHER THAN IT WAS IN THE LAST DECADE. AND WHEN YOU SEE THAT BY THE FACT THAT THE ECONOMY IS DOING FINE EVEN THOUGH IT'S MONETARY POLICY IS EXTREMELY RESTRICTIVE. SO I THINK WITH UNCERTAINTY PARTICULARLY HIGH, THE TARIFFS LIKELY TO PUSH UP PRICES, IT SEEMS LIKE WAITING IS THE RIGHT STRATEGY FROM THE FED RIGHT NOW.

ROMAINE: I WANT TO GO BACK TO THIS IDEA OF BALANCE AND DRAW UPON A COLUMN YOU WROTE I THINK LAST WEEK OR THE WEEK BEFORE ABOUT SOME OF TRUMP'S ECONOMIC POLICIES. WE HAVE GOT TO BE REMISS IN POINTING OUT WE ARE ONLY TWO WEEKS INTO THIS ADMINISTRATION. THERE IS A LONG LAUNDRY LIST OF THINGS FROM SAID HE WANTS TO DO AND THIS ONLY APPEARS TO BE PART OF IT. WE TALK ABOUT TAX CUTS WHICH WOULD HAVE TO GO THROUGH CONGRESS AND OTHER ECONOMIC MEASURES AND I DO WONDER IF YOU SEE ANY POTENTIAL UPSIDE TO THOSE POLICIES, ASSUMING THEY DO BECOME REALITY THAT COULD BLUNT THE IMPACT FROM AN INCREASE IN TARIFFS? >> THE THING PEOPLE POINT TO IS THAT TRUMP SAID HE'S GOING TO DEREGULATE AND THAT CAN OBVIOUSLY REDUCE THE COST FOR BUSINESS AND RAISE PRODUCTIVITY. YOU KNOW, FIGURING OUT WHAT REGULATIONS TO DO WITHOUT WITHOUT ENDANGERING PEOPLE, THAT IS MORE DIFFICULT. I MEAN, REGULATIONS ARE THERE FOR A REASON TYPICALLY AND OFTEN, THE REASON -- A GOOD REASON, FOR EXAMPLE, THINK ABOUT DRUG SAFETY. SO THAT IS THE PART OF THE

STORY THAT I THINK, YOU KNOW, THE MOST POSITIVE FEELING ABOUT IT. IF THEY -- PROPHETS WILL ARISE AND THAT SUPPORTS THE STOCK MARKET. >> HOW MUCH CONFIDENCE DO YOU HAVE RIGHT NOW IN THE FOMC NOT SO MUCH TO MAKE THE RIGHT DECISION BUT ALSO, AS WE KNOW, TO MAYBE RESIST SOME OF THE PRESSURE THAT THEY MIGHT BE GETTING FROM THE WHITE HOUSE TO MAKE DECISIONS THAT MAY BE WOULD BE OTHERWISE AGAINST THEIR OWN TRADITIONAL POLICIES? >> OBVIOUSLY, THE FED -- I THINK THE FED WILL DO THE BEST JOB IT POSSIBLY CAN AND WILL NOT BE RESPONDING TO POLITICAL PRESSURE ONE WAY OR THE OTHER. THEY WILL DO WHAT THEY THINK IS

APPROPRIATE TO ACHIEVE THEIR OBJECTIVES OF MAXIMUM SUSTAINABLE EMPLOYMENT IN THE CONTEXT OF 2% INFLATION TARGET. THAT IS WHAT THEY HAVE DONE AND THAT IS WHAT THEY HAVE ALWAYS DONE AND WHAT THEY WILL DO GOING FORWARD. AT TIMES, IT MAY LOOK POLITICAL IN THE SENSE THAT THE PRESIDENT WANTS THEM TO CUT INTEREST RATES, THEN THE FED DOESN'T DO THAT. IT'S NOT BECAUSE THE FEDERAL RESERVE IS TRYING TO BE DIFFICULT WITH RESPECT TO THE TRUMP'S ADMINISTRATION. IF THEY DON'T CUT RATES, IT'S BECAUSE THEY THINK IT IS NOT APPROPRIATE. ROMAINE:

WE HAVE BEEN TALKING A LOT ON THIS NETWORK ALL DAY LONG ABOUT WHATEVER THE HECK HAS BEEN GOING ON OVER AT THE TREASURY DEPARTMENT WITH SOME OF THE GUYS, AND THEY ARE ALL GUYS, THAT ELON MUSK SENT OVER THERE TO ROOT OUT WHATEVER THE HEAD HE WANTS TO ROOT OUT. WE HAVE SEEN OTHER MEASURES AND -- IN SOME NON-ECONOMIC MEASURES AND SOME OTHERS. WHY AM I TO BELIEVE THE FED WOULD SOMEHOW BE IMMUNE OR SAFE FROM THAT? >> I THINK THE FED IS GOING TO COME UNDER SCRUTINY FOR ITS EXPENDITURES. I THINK THE FED WILL COME UNDER SCRUTINY FOR WHATEVER IT IS DOING IN TERMS OF DIVERSITY, EQUITY, INCLUSION. I THINK THE FED WILL -- AS A RESULT, THE FED WILL BE VERY CAREFUL ABOUT HOW IT PROCEEDS AND THOSE KIND OF AREAS AND I WOULD EXPECT THE BUDGET AT THE FEDERAL RESERVE TO BE VERY AUSTERE OVER THE NEXT FEW YEARS. I THINK THE ISSUE ABOUT WHAT IS HAPPENING AT THE TREASURY IS A MUCH BIGGER ISSUE WHICH IS CONGRESS IS A PART OF THE GOVERNMENT THAT MAKES THE EXPENDITURE RULES AND IT IS NOT UP TO THE PRESIDENT TO DECIDE WHETHER THAT MONEY APPROPRIATED BY CONGRESS GETS SPENT OR NOT SO I THINK THIS IS GOING TO GO TO THE COURTS. ROMAINE: BILL DUDLEY.

BLOOMBERG OPINION COLUMNIST AND FORMER NEW YORK FED PRESIDENT. LET'S GO DOWN TO THE WHITE HOUSE RIGHT NOW WHERE PRESIDENT TRUMP IS SPEAKING. PRES. TRUMP: OK.

>> THANK YOU, SIR. PARKS NEXT UP. IN LIGHT OF NUMEROUS ACTIONS TAKEN BY A NUMBER OF BODIES OF THE UNITED NATIONS, WHICH EXHIBITED DEEP ANTI-AMERICAN BIAS, WE HAVE AN EXECUTIVE ORDER PREPARED FOR YOUR ATTENTION THAT WOULD WITHDRAW THE UNITED STATES FROM THE U.N. HUMAN RIGHTS COUNCIL, WITHDRAW THE UNITED STATES FROM THE U.N. RWA, WHICH IS A REFUGEE

ORGANIZATION, AND WOULD ALSO REVIEW AMERICAN INVOLVEMENT IN UNESCO WHICH HAS ALSO EXHIBITED ANTI-AMERICAN BIAS. MORE GENERALLY, THE EXECUTIVE ORDER CALLS FOR A REVIEW OF AMERICAN INVOLVEMENT AND FUNDING IN THE U.N. IN LIGHT OF THE WILD DISPARITIES AND LEVEL -- IN LEVELS OF FUNDING AMONG DIFFERENT COUNTRIES THAT AS YOU HAVE EXPRESSED PREVIOUSLY IS DEEPLY UNFAIR TO THE UNITED STATES. PRES. TRUMP:

I HAVE ALWAYS FELT THAT THE U.N. HAS TREMENDOUS POTENTIAL. IT IS NOT LIVING UP TO THAT POTENTIAL RIGHT NOW. IT REALLY ISN'T AND HAS NOT FOR A LONG TIME. THERE ARE GREAT HOPES FOR IT BUT IT IS NOT BEING WELL-RUN, TO BE HONEST, AND NOT DOING THE JOB.

A LOT OF THESE CONFLICTS, AND WE ARE WORKING ON THEM, SHOULD BE SETTLED OR AT LEAST WE SHOULD HAVE SOME HELP IN SETTLING THEM. WE NEVER SEEM TO GET HELP. THAT SHOULD BE THE PRIMARY PURPOSE OF THE U.N., THE UNITED NATIONS, AND AGAIN, IT HAS GOT GREAT POTENTIAL AND BASED ON THE POTENTIAL, WE WILL CONTINUE TO GO ALONG WITH IT GOT TO GET THEIR ACT TOGETHER. >> WHAT WOULD THEY NEED TO DO? >> THEY'VE GOT TO BE FAIR TO COUNTRIES THAT DESERVE FAIRNESS. SOME COUNTRIES AS YOU KNOW OUR OUTLIERS THAT ARE VERY BAD AND THEY ARE ALMOST PREFERRED AS COUNTRIES TO THOSE WHO DO THEIR JOB, ARE DOING A GOOD JOB, AND THEY HAVE TO -- THEY WILL LOSE A LOT OF COUNTRIES, THEY WILL LOSE THEIR CREDIBILITY LIKE OTHER ORGANIZATIONS AND THEN THEY WILL BE NOTHING. THE POTENTIAL OF THE UNITED NATIONS -- NOT EVERYBODY AGREES WITH MS. -- THE POTENTIAL OF THE POTENTIAL OF UNITED NATIONS

IS FANTASTIC IF PROPERLY RUN. WE WILL SEE WHAT HAPPENS. >> HOW MUCH MONEY ARE YOU GOING TO TAKE AWAY? >> WE ARE NOT LOOKING TO TAKE AWAY MONEY, THIS IS SO IMPORTANT THAT REALLY -- AS YOU KNOW, THE UNITED NATIONS IS LARGELY FUNDED BY US. IT SHOULD BE FUNDED BY EVERYBODY BUT WE ARE DISPROPORTIONATE AS WE ALWAYS SEEM TO BE. IF IT EVER LIVED UP TO THE POTENTIAL, IN 10 MINUTES IT WOULD MAKE UP THE DIFFERENCE, THAT'S THE KIND OF POWER IT COULD HAVE AND RIGHT NOW IT DOESN'T HAVE THAT POWER. >> THIS IS A NATIONAL SECURITY PRESIDENTIAL MEMORANDUM THAT SEEKS TO IMPOSE MAXIMUM PRESSURE ON THE GOVERNMENT OF IRAN. MANY PROVISIONS ARE SIMILAR TO

ACTIONS YOUR ADMINISTRATION TOOK DURING YOUR FIRST ADMINISTRATION. THE BASIC IDEA IS TO HAVE EVERY DEPARTMENT OR MANY DEPARTMENTS AND AGENCIES IN YOUR GOVERNMENT TO ATTEMPT TO SANCTION AND CONTROL IRANIAN ACTIVITIES PARTICULARLY AROUND THE NUCLEAR PROGRAM AND EXPORT OF TERRORISM THROUGH SUPPORTS OF PROXY GROUPS ABROAD AND THE INTENT IS TO GIVE YOU ALL THE POSSIBLE TOOLS TO ENGAGE WITH THE IRANIAN GOVERNMENT TO ENSURE GOING FORWARD THEY ARE LESS OF A MALIGN ACTOR ON THE WORLD STAGE. >> THIS IS ONE I AM TORN ABOUT, EVERYBODY WANTS ME TO SIGN IT AND I WILL DO THAT.

IT'S TOUGH ON IRAN, IT'S WHAT WE HAD BEFORE, YOU WOULD NEVER HAVE HAD OCTOBER 7 HAVE THE ELECTION GONE A DIFFERENT WAY, WHICH IT SHOULD HAVE. I THINK THIS ONE MORE THAN MADE UP FOR IT, MUCH MORE HISTORIC. THE IRAN SITUATION, HOPEFULLY -- I WILL SIGN IT BUT HOPEFULLY WE WON'T HAVE TO USE IT VERY MUCH. WE WILL SEE WHETHER OR NOT WE CAN ARRANGE, WORK OUT A DEAL WITH IRAN AND EVERYBODY CAN LIVE TOGETHER AND MAYBE THAT'S POSSIBLE AND MAYBE IT'S NOT.

I'M SIGNING THIS AND I AM UNHAPPY TO DO IT BUT I DON'T HAVE MUCH CHOICE BECAUSE WE HAVE TO BE STRONG AND FIRM AND I HOPE IT WON'T HAVE TO BE USED IN ANY GREAT MEASURE AT ALL. WOULD BE GREAT IF WE COULD HAVE A MIDDLE EAST AND MAYBE A WORLD AT TOTAL PEACE AND RIGHT NOW YOU DON'T HAVE THAT, WHEN I LEFT YOU HAD PEACE ALL OVER THE WORLD AND NOW THE WORLD IS BLOWING UP. BIBI IS COMING INTO SIMULATOR, WE WILL SEE WHAT WE CAN DO. I'M SIGNING THIS AND HOPEFULLY IT WILL BE A DOCUMENT WHICH WON'T BE VERY IMPORTANT AND WILL HARDLY HAVE TO BE USED. >> WHAT KIND OF DEAL WOULD YOU PREFER? >> WE WILL SEE. THEY CANNOT HAVE A NUCLEAR

WEAPON. WITH ME IT IS VERY SIMPLE, IRAN CANNOT HAVE A NUCLEAR WEAPON. WE DON'T WANT TO BE TOUGH ON IRAN OR ANYBODY BUT THEY CAN'T HAVE A NUCLEAR WEAPON. >> WOULD YOU ENGAGE IN CONVERSATIONS WITH YOUR COUNTERPART IN IRAN? >> I WOULD. >> DO YOU WANT TO BLOCK THE SALE OF IRANIAN OIL? >> WE CAN DO THAT, THAT'S WHAT WE DID BEFORE. THEN THEY WOULDN'T HAVE MONEY

FOR HEZBOLLAH OR ANYBODY ELSE. IF THINGS WENT THE WAY THEY SHOULD HAVE, THIS WOULD HAVE BEEN OVER LONG AGO. BUT IT IS NOT OVER. >> [INDISCERNIBLE] >> I THINK THEY ARE CLOSE. THEY ARE TOO CLOSE. AGAIN, YOU CAN GO BACK FOUR YEARS AND I WOULD HAVE SAID THEY WOULD HAVE IT DURING THIS INTERVENING PERIOD BUT THEY ARE PRETTY CLOSE. >> IF IT IS IRAN AND THEIR PROXIES WHO HAVE THREATENED TO RETALIATE AGAINST YOU AND YOUR TEAM BY KILLING YOU GUYS? >> THEY HAVEN'T DONE THAT. THAT WOULD BE A TERRIBLE THING FOR THEM TO DO, NOT BECAUSE OF ME -- IF THEY DID THAT THEY WOULD BE OBLITERATED. I'VE LEFT INSTRUCTIONS.

IF THEY DO IT, THEY GET OBLITERATED, THERE WON'T BE ANYTHING LEFT. AND BIDEN SHOULD HAVE SAID THAT BUT HE NEVER DID AND I DON'T KNOW WHY, LACK OF INTELLIGENCE PERHAPS, BUT HE NEVER SAID IT. IF THAT HAPPENS TO A LEADER OR CLOSE TO A LEADER, YOU HAVE OTHER PEOPLE INVOLVED, IT WOULD CALL FOR TOTAL OBLITERATION OF A STATE, TO INCLUDE IRAN. I'M SIGNING THIS AND IT IS A VERY POWERFUL DOCUMENT BUT HOPEFULLY WE WON'T HAVE TO USE IT. >> IF THE PRIME MINISTER WERE TO ASK FOR YOUR HELP IN STRIKING AT IRAN'S NUCLEAR FACILITIES TO PREVENT THE KIND OF PROGRESS TOWARD A NUCLEAR WEAPON, WOULD YOU GIVE HIM THE GREEN LIGHT EITHER TO DO IT HIMSELF OR FOR THE U.S.

WITH HIM? >> I DON'T KNOW IF THAT'S WHAT HE'S GOING TO BE ASKING FOR. WE WILL HAVE A PRETTY LONG MEETING AND DISCUSS A LOT OF THINGS. I WILL LET YOU KNOW IF THE TIME COMES TO LET YOU KNOW BUT RIGHT NOW THAT'S NOT SOMETHING I CAN DISCUSS.

>> YOU SAID IF THEY DO THEY WILL BE OBLITERATED, YOU ARE TALKING IF IRAN MADE AN ATTEMPT ON YOUR LIFE? >> THAT WOULD BE CALLED TOTAL OBLITERATION. I CAN'T IMAGINE THEY WOULD DO THAT. IT SHOULD HAVE BEEN STATED BY BIDEN BUT HE DIDN'T STATE IT BECAUSE HE HAD NO CLUE, AS YOU KNOW, AS EVERYBODY KNOWS. >> WHAT IS YOUR VISION FOR THE RELATIONSHIP WITH IRAN? >> G HAVE ANYTHING ELSE? I WOULD LOVE TO HAVE A GOOD RELATIONSHIP WITH EVERYBODY. THEY CAN'T HAVE A NUCLEAR WEAPON.

THAT WAS VERY IMPORTANT. BEYOND THAT, IT WOULD BE VERY TOUGH IF THEY INSIST ON DOING THAT. THEY HAVE SOME OF THEIR LEADERSHIP, I CAN TELL YOU RIGHT NOW, MAYBE YOU KNOW IT AND MAYBE YOU DON'T, THERE ARE MANY PEOPLE AT THE TOP RANKS OF IRAN WHO DON'T WANT TO HAVE A NUCLEAR WEAPON FOR THAT VERY REASON. >> WHAT IS YOUR REACTION TO CHINA'S RETALIATORY TARIFFS? >> IT'S FINE. WE WILL DO VERY WELL AGAINST CHINA AND EVERYBODY ELSE. RIGHT NOW THEY'VE TAKEN

ADVANTAGE OF THE BIDEN ADMINISTRATION LIKE I'VE NEVER SEEN. I'VE NEVER SEEN THE DEFICIT WITH CHINA, IT'S ABOUT A TRILLION DOLLARS. AND GIVE IT, $1 TRILLION, THEY ARE USING OUR MONEY TO BUILD THEIR MILITARY AND BIDEN LET THAT HAPPEN.

WE ARE TAKING A LOT OF FIRES HERE. WE CAME BACK -- THIS IS A DIFFERENT PLACE, AND GOOD NEWS IS WE ARE DOING VERY WELL, VERY WELL WITH COUNTRIES NOBODY EXPECTED WE WOULD DO WELL WITH, WE ARE RESPECTED AGAIN AS A NATION. MAYBE AT A LEVEL PEOPLE HAVEN'T SEEN FOR MANY MANY DECADES. WHEN I LEFT WE DIDN'T HAVE ANY WARS, I DEFEATED ISIS 100% OF THE ISIS CALIPHATE AND NOW THE WORLD SEEMS TO BE READY TO BLOW UP AND WE WILL SEE IF WE CAN STOP AT.

>> HAVE YOU REACHED OUT TO THE IRANIANS ABOUT A DEAL? >> I DON'T CARE IF I REACH OUT OR THEY REACH OUT. A LOT OF PEOPLE SAY LET THEM REACH OUT, IT IS JUST TALK. I WANT TO SEE EVERYBODY DO WELL, I WANT TO SEE GREAT COUNTRIES, PEACE IN THE MIDDLE EAST AND ELSEWHERE. WE ARE WORKING VERY HARD WITH RESPECT TO RUSSIA-UKRAINE, THAT IS A TOTAL BLOODBATH. WHAT IS GOING ON THERE IS INCREDIBLE. WHAT'S GOING ON WITH THE

SOLDIERS, YOUNG SOLDIERS BEING KILLED BY THE THOUSANDS. LITERALLY BY THE THOUSANDS, AND WE WANT TO SEE IF WE CAN GET THAT. I THINK WE'VE HAD GOOD TALKS. >> ANY UPDATE ON WHEN YOU WILL SPEAK TO PRESIDENT XI? >> AT THE APPROPRIATE TIME, I'M IN NO RUSH. >> -- CAN LEND ITSELF TO THE TYPE OF FREEZE FOR THE TARIFFS TO CANADA AND MEXICO? >> WE WILL SEE WHAT HAPPENS.

THEY HAVE AGREED TO BE STRONG ON THE BORDER, STRONGER THAN THEY WERE BY FAR, I A FACTOR OF ABOUT 30. IN ADDITION, WE'VE HAD NUMBERS LIKE YOU'VE NEVER SEEN BEFORE, THE BORDER IS NOW CLOSED, REALLY CLOSED, AND WITH THAT BEING SAID, WE ARE LETTING GOOD PEOPLE COME THROUGH AND WE WANT GOOD PEOPLE TO COME INTO OUR COUNTRY, BUT THE BORDER IS CLOSED. >> [INDISCERNIBLE] DO YOU INTEND TO PRESS HIM ON PALESTINIANS? >> I WILL TALK ABOUT HIM -- TALK TO HIM ABOUT THAT TOO.

I TALK ABOUT EVERYTHING. >> WHAT IS YOUR MESSAGE DURING THE MEETING? >> I'M HERE TO LISTEN. HE IS HERE TO SEE ME AND I AM HERE TO LISTEN. >> WILL YOU CONTINUE TO PRESS FOR -- PALESTINIANS FROM GAZA? >> I WOULD LIKE TO SEE JORDAN AND EGYPT.

THE GAZA THING HAS NOT WORKED, IT HAS NEVER WORKED. I FEEL VERY DIFFERENT LAYABOUT ABOUT GAZA THAN A LOT OF PEOPLE, I THINK THEY SHOULD GET A GOOD, FRESH, BEAUTIFUL PIECE OF LAND AND WE GET PEOPLE TO PUT UP THE MONEY TO BUILD IT AND MAKE IT NICE AND HABITABLE AND ENJOYABLE. >> THEY SAY THEY DON'T WANT TO LEAVE.

>> I DON'T KNOW HOW THEY COULD WANT TO STAY, IT IS A DEMOLITION SITE. IT IS A PURE DEMOLITION SITE. IF WE COULD FIND THE RIGHT PIECE OF LAND OR NUMEROUS PIECES OF LAND AND BUILD THEM SOME REALLY NICE PLACES, THERE'S PLENTY OF MONEY IN THE AREA THAT IS FOR SURE. I THINK IT WOULD BE A LOT BETTER THAN GOING BACK TO GAZA, WHICH HAS HAD DECADES AND DECADES OF DEATH. >> WHERE WOULD THE LAND BE? >> COULD BE IN JORDAN, COULD BE IN EGYPT, COULD BE IN OTHER PLACES. YOU COULD HAVE MORE THAN TWO, MORE THAN ONE, YOU COULD HAVE MORE THAN TWO, AND PEOPLE LIVING IN A PLACE THAT COULD BE VERY BEAUTIFUL AND SAFE AND NICE. GAZA HAS BEEN A DISASTER FOR

DECADES. >> WILL THE U.S. PAY FOR THAT? >> I THINK THERE ARE PLENTY OF PEOPLE THAT WOULD IN THE AREA, THEY HAVE A LOT OF MONEY. SOME OF THE COUNTRIES OVER THERE WOULD LIKE TO SEE AT. SAUDI ARABIA WANTS TO SEE PEACE, I COULD SEE THAT. MANY OF THE COUNTRIES, AS FAR

AS I'M CONCERNED, THEY ALL WANT PEACE. MAYBE I AM WRONG BUT I THINK IRAN WOULD LIKE TO SEE PEACE, THEY'VE HAD ENOUGH, DON'T YOU THINK THEY'VE HAD ENOUGH? >> JORDAN HAS SAID BLUNTLY THEY HAVE NO INTEREST IN DOING THIS. >> THEY MAY HAVE SAID THAT BUT A LOT OF PEOPLE HAVE SAID THINGS TO ME. THEY SAID THEY WOULDN'T TAKE ANYBODY BACK IN VENEZUELA AND NOW THEY ARE FLYING THEM BACK TO VENEZUELA. THEY ARE DOING THE RIGHT THING IN VENEZUELA. THE PANAMA CANAL IS IN ACTIVE

DISCUSSION RIGHT NOW, THEY'VE SAID THINGS ABOUT THAT. VIRTUALLY EVERYTHING THAT'S BEEN SAID HAS BEEN INCORRECTLY STATED BASED ON THE RESULT. >> -- FORCIBLY DISPLACING THOSE PEOPLE FROM GAZA? >> I DON'T THINK SO, THEY HAVE NO ALTERNATIVE RIGHT NOW.

THEY ARE THERE BECAUSE THEY HAVE NO ALTERNATIVE. WHAT DID THEY HAVE? IT IS A BIG PILE OF RUBBLE RIGHT NOW. HAVE YOU SEEN THE PICTURES OF IT, HAVE YOU BEEN THERE? IT'S TERRIBLE -- WHO COULD LIVE LIKE THAT? AND VERY DANGEROUS, SHOOTING ALL OVER THE PLACE, BOMBING ALL OVER THE PLACE, ON BOTH SIDES.

I WOULD THINK IF THEY HAD AN OPTION OF MOVING TO AN AREA IN A LARGE GROUP OR VARIOUS SMALLER GROUPS AND TAKE CARE OF THE CLOSE TO 2 MILLION PEOPLE I WOULD THINK THERE WOULD BE THRILLED TO DO IT. THEY DON'T HAVE AN OPTION. VERY DANGEROUS. >> YOU ARE SAYING THEY WOULD BE THRILLED TO LEAVE GAZA? >> I THINK THEY WOULD LOVE TO LEAVE GAZA IF THEY HAD AN OPTION. WHAT IS GAZA? THERE'S PRACTICALLY NOT A BUILDING STANDING AND THEY ARE VERY DANGEROUS. THOSE BUILDINGS ARE SHIFTING AND FALLING DOWN ALL OVER THE PLACE AND THERE'S GUNFIRE ALL OVER. IT WILL BE THAT WAY A WHILE.

>> WOULDN'T IT MAKE MORE SENSE TO GO BACK WHEN IT WAS MORE DANGEROUS THAN NOW WITH THE CEASE FIRE? >> STRIKES COULD START TOMORROW, THERE'S NOT A LOT LEFT TO STRIKE. IT'S A DEMOLITION SITE, THE WHOLE PLACE IS DEMOLISHED. IT'S UNSAFE, IT'S UNSANITARY. IT'S NOT A PLACE WHERE PEOPLE WANT TO LIVE. THEY HAVE NO ALTERNATIVE BUT TO GO BACK.

IF WE GAVE THEM AN ALTERNATIVE OF LIVING IN A BEAUTIFUL, OPEN PLACE WITH NICE HOUSING AND WE HAVE THE MONEY IN THE MIDDLE EAST TO BUILD THAT. >> DO YOU SUPPORT ISRAELIS MOVING BACK? >> NOT NECESSARILY. I SUPPORT CLEANING IT UP AND DOING SOMETHING WITH IT. IT HAS FAILED FOR MANY DECADES AND SOMEBODY WILL BE SITTING HERE IN 10 YEARS OR 20 YEARS FROM NOW AND THEY WILL BE GOING THROUGH THE SAME STUFF. THEY'VE HAD CIVILIZATIONS ON

GAZA, ANY CIVILIZATIONS ON GAZA, AND THEY ARE BURIED IN THE SAND. IT DOESN'T SEEM TO WORK. >> ELON MUSK, HOW OFTEN ARE YOU TALKING TO HIM AND HAVE THERE BEEN IDEAS HE'S BROUGHT TO YOU THAT YOU SAID NO, HE IS GOING TOO FAR? >> HE'S DONE A GREAT JOB, LOOK AT ALL THE FRAUD HE HAS FOUND IN USAID. IT IS A DISASTER WHAT THE PEOPLE, RADICAL LEFT LUNATICS, THEY HAVE THINGS NOBODY WOULD BELIEVE, 100 MILLION SPENT AND WITH MONEY GOING TO ALL SORTS OF GROUPS THAT SHOULDN'T DESERVE TO GET ANY MONEY -- I WOULD LOVE TO SEE WHAT THE KICKBACKS ARE.

HOW MUCH MONEY HAS BEEN KICKED BACK? WHO WOULD SPEND THAT KIND OF MONEY TO SOME OF THE THINGS YOU READ ABOUT AND I READ ABOUT AND I SEE EVERY NIGHT ON THE NEWS AND EVERY MORNING WHEN I READ THE PAPERS, WHO WOULD SPEND MONEY FOR THAT? I WOULD SAY THIS, THE PEOPLE THAT GOT THAT MONEY, ARE THEY KICKING IT BACK TO THE PEOPLE THAT GAVE IT FROM GOVERNMENT? TO ME, IT IS VERY CORRUPT. THE REAL QUESTION IS HOW MUCH OF A KICKBACK HAS THERE BEEN AND ONE OF THE THINGS I WANT TO INVESTIGATE RAPIDLY BECAUSE OF NEVER SEEN ANYTHING TO THIS EXTENT, THE TRAIN BEING BUILT BETWEEN LOS ANGELES AND SAN FRANCISCO IS THE WORST MANAGED PROJECT I THINK OF EVER SEEN AND I'VE SEEN SOME OF THE WORST. BILLIONS AND BILLIONS -- HUNDREDS OF BILLIONS OF DOLLARS OVER BUDGET. I READ WHERE YOU COULD TAKE EVERY SINGLE PERSON THAT WAS GOING TO GO ON THE TRAIN AND IT THE FINEST LIMOUSINE SERVICE IN THE WORLD AND TAKE THEM BACK AND FORTH WITH LIMOUSINES AND YOU WOULD HAVE HUNDREDS OF BILLIONS OF DOLLARS LEFT OVER. IT'S THE WORST THING AND WE WILL START AN INVESTIGATION BECAUSE IT'S NOT POSSIBLE. I BUILT FOR A LIVING, ON-TIME AND ON BUDGET AND IT IS IMPOSSIBLE SOMETHING COULD GO THAT MUCH AND NOW IT'S NOT EVEN GOING TO SAN FRANCISCO AND IS NOT GOING TO LOS ANGELES.

THEY MADE IT MUCH SHORTER. NOW IT'S AT LITTLE PLACES WAY AWAY FROM SAN FRANCISCO AND WAY AWAY FROM LOS ANGELES. WE WILL START A BIG INVESTIGATION ON THAT BECAUSE I'VE NEVER SEEN ANYTHING LIKE IT. NOBODY HAS EVER SEEN ANYTHING LIKE IT.

THE WORST OVERRUNS THERE HAVE BEEN IN THE HISTORY OF OUR COUNTRY. AND IT WASN'T EVEN NECESSARY, I WOULD HAVE SAID, YOU TAKE AN AIRPLANE, IT COST YOU NOTHING TO COST -- TWO TAKEN AIRPLANE. IF YOU HAVE TO, YOU DRIVE. HUNDREDS OF BILLIONS OF DOLLARS OF COST OVERRUNS AND IS NOT EVEN THE SAME PROJECT, IT IS MUCH SHORTER. IT'S WAY OUTSIDE OF SAN FRANCISCO AND WAY OUTSIDE OF LOS ANGELES. >> WHO IS GOING TO INVESTIGATE THAT? >> I'M DOING THAT MYSELF. >> THE DOGE ENGINEERS THAT ELON MUSK HAS HELPING HIM ARE AS YOUNG AS 19 YEARS OLD.

>> THEY ARE VERY SMART. THEY WORK OUT OF THE WHITE HOUSE, THEY ARE SMART PEOPLE. I LIKE WHAT THEY DO -- UNLIKE WHAT THEY DO IN CONTROL TOWERS, WE NEED SMART PEOPLE, WE WERE PUTTING PEOPLE INTELLECTUALLY DEFICIENT, THAT WAS ONE OF THE QUALIFICATIONS IS YOU COULD BE INTELLECTUALLY DEFICIENT. WE NEED SMART PEOPLE. SOME ARE YOUNG AND SOME ARE NOT YOUNG, SOME ARE NOT YOUNG AT ALL, BUT THEY FOUND GREAT THINGS. LOOK AT THE LIST OF THINGS --

MAYBE I WILL DO IT TOMORROW, READ OFF A LIST OF 15 OR TO ANY THEY FOUND INSIDE USAID. IT HAS TO BE CORRUPT, NOBODY COULD APPROVE THAT. THEY COULD ONLY APPROVE THAT IF THEY WERE GETTING KICKBACKS. YOU'RE TALKING ABOUT HUNDREDS OF MILLIONS OF DOLLARS. >> IT SOUNDS LIKE YOU ARE GOING TO -- DOWN USAID.

>> I THINK SO. >> WHICH PART OF THE GOVERNMENT -- >> I COULD SEE MARCO RUBIO BEING IN CHARGE, THE STATE DEPARTMENT. SOME OF THE MONEY IS WELL SPENT I GUESS BUT MUCH OF IT IS FRAUDULENT.

>> ON THE EDUCATION, WHY NOMINATE LINDA MCMAHON TO BE HIS SECRETARY IF YOU'RE GOING TO GET RID OF THE EDUCATION DEPARTMENT? >> I TOLD LINDA, I HOPE YOU DO A GREAT JOB AND PUT YOURSELF OUT OF A JOB. I WANT HER TO PUT YOURSELF OUT OF A JOB. WE ARE RANKED NUMBER 40 OUT OF 40 SCHOOLS. WE ARE NUMBER ONE PER PUPIL.

WE ARE RANKED AT THE BOTTOM OF THE LIST, AREA BADLY. WHAT I WANT TO DO IS LET STATES RUN SCHOOLS I BELIEVE STRONGLY IN SCHOOL CHOICE BUT IN ADDITION I WANT STATES TO RUN SCHOOLS. I WANT LINDA TO PUT HERSELF OUT OF A JOB. >> ARE YOU GOING TO DO THAT WITH AN EXECUTIVE ORDER OR CONGRESS? >> IF I CAN GIVE THE SCHOOLS BACK TO IOWA AND IDAHO AND INDIANA AND ALL OF THESE PLACES THAT RUN PROPERLY -- THERE ARE MANY OF THEM. IF YOU LOOK AT THE LIST. DENMARK MUST WEED INCOME IN

NORWAY, CHINA, A LIST OF WELL EDUCATED WHERE THEY RUN THE SCHOOL SYSTEM WELL. YOU HAVE A LOT OF COUNTRIES, NOT SURPRISING NAMES. IF YOU MOVED OUR SCHOOLS INTO SOME OF THESE STATES THAT ARE WELL RUN STATES THEY WOULD BE AS GOOD AS DENMARK AND NORWAY AND SWEDEN AND SOME OTHER STATES. THEN YOU HAVE THE LAGGARDS AND

YOU KNOW WHO THEY ARE. THE SAME LAGGARDS AS EVERYTHING ELSE, AND THAT INCLUDES CRIME. IF YOU WENT TO NEW YORK, YOU GO TO WESTCHESTER COUNTY, YOU GO TO DUTCHESS COUNTY, LONG ISLAND.

YOU HAVE MAYBE SIX OR SEVEN LOCATIONS AND YOU HAVE NEW YORK CITY WHICH WOULD INCLUDE THE FIVE BOROUGHS. I THINK EVEN THAT WOULD RUN MUCH BETTER THAN IT DOES RIGHT NOW. SAME THING WITH LOS ANGELES OR CALIFORNIA, YOU WOULD HAVE RIVERSIDE -- YOU WOULD BREAK IT UP. MOST OF THEM WOULD BE STATES AND YOU WOULD HAVE ONE, LIKE IN IOWA, YOU GIVE IT TO THE STATE OF IOWA, THE STATE OF INDIANA, THESE ARE REALLY WELL RUN STATES. THEY DON'T HAVE DEBT, THEY DON'T HAVE PROBLEMS, THEY DON'T HAVE ANY CRIMES RELATIVELY SPEAKING TO SPEAK OF. AND YOU WOULD HAVE EDUCATION THAT WOULD BE THE EQUIVALENT OF NORWAY AND DENMARK AND VARIOUS OTHER PLACES AT THE TOP OF THE LIST. WE ARE AT THE BOTTOM OF THE LIST -- THE TOP OF THE LIST

WHEN IT COMES TO COST. WE SPEND MORE MONEY PER PUPIL THAN ANY OTHER NATION IN THE WORLD AND YET WE ARE RATED NUMBER 40. THEY TALK ABOUT 40 COUNTRIES AND WE ARE NUMBER 40. IF WE DID THIS, WE WOULD GO 20, 30 NOTCHES UP. WE WOULD HAVE SOME OF THE BEST DISTRICT IN THE WORLD. >> ARE YOU GOING TO DO THAT WITH AN EXECUTIVE ORDER? >> SOME PEOPLE SAY I COULD.

WE WOULD HAVE TO WORK WITH THE TEACHERS UNION, IT'S THE ONLY ONE THAT IS OPPOSED TO IT, NOBODY ELSE WOULD WANT TO HOLD IT BACK. WE HAVE TO TELL THE TEACHERS UNION, WE ARE RATED LAST IN THE WORLD IN EDUCATION OF THE TOP 40. WE WERE 38 AND NOW WE ARE 40. 39, WENT TO 40, 37 AND NOW WE ARE 40. >> -- WOULD ALLOW AMERICAN CITIZENS WHO ARE COMING ALL'S TO BE PUT IN A DIFFERENT COUNTRY, IS THAT SOMETHING YOU ARE LOOKING TO DO? >> IF WE DID, IT IS FINE. WE HAVE HARDENED CRIMINALS, HORRIBLE PEOPLE, YOU SEE THEM PUSHING PEOPLE INTO SUBWAYS WHEN THE TRAIN IS COMING LAST WEEK, GUY WALKING AROUND, SEES SOME OF THE WINNING FOR THE TRAIN, IT'S COMING AT 40 MILES PER HOUR AND HE GETS PUSHED INTO THE SUBWAY. THAT HAPPENS ALL THE TIME,

THESE ARE SICK PEOPLE. IF WE COULD GET THEM OUT OF OUR COUNTRY. OTHER COUNTRIES WOULD TAKE THEM, IT'S NO DIFFERENT THAN A PRISON SYSTEM EXCEPT IT WOULD BE A LOT LESS EXPENSIVE AND A GREAT DETERRENT. SEND THEM TO OTHER COUNTRIES. IF WE COULD GO A STEP FURTHER,

WE ARE TALKING ABOUT GETTING THE CRIMINALS OUT OF OUR COUNTRY WHO COME IN THROUGH OTHER COUNTRIES ILLEGALLY, THE ILLEGAL MIGRANTS AS I CALL THEM. WE HAVE PEOPLE JUST AS BAD AS THEM IN OUR COUNTRY AND IF WE COULD GET THEM OUT I WOULD BE VERY HAPPY. >> -- SAID HE WANTS TO PAY A FEE FOR THAT, WOULD YOU PAY THAT? >> A VERY SMALL FEE COMPARED TO WHAT WE PAY FOR PRIVATE PRISONS.

VERY, VERY SMALL FEE. WE WILL HAVE TO FIND THAT OUT. IF WE HAVE THE LEGAL RIGHT TO DO IT, I WOULD DO IT IN A HEARTBEAT. I DON'T KNOW IF WE DO OR NOT, WE ARE LOOKING AT THAT. WE COULD MAKE DEALS TO GET THESE ANIMALS OUT OF OUR COUNTRY.

IF YOU TAKE THE SHOOTERS, THE PEOPLE THAT HIT OLD LADIES IN THE BACK OF THE HEAD WITH A BASEBALL BAT WHEN THEY ARE NOT LOOKING AND WALKED DOWN THE STREET -- YOU SEE IT, THE PEOPLE THAT TAKE OUT A GUN AND SHE YOU FOR NO REASON, IF WE COULD GET THESE ANIMALS OUT OF OUR COUNTRY AND PUT THEM IN A DIFFERENT COUNTRY UNDER THE SUPERVISION OF SOMEBODY WITH A RELATIVELY SMALL FEE TO MAINTAIN THESE PEOPLE, BECAUSE YOU KNOW WHAT, THESE ARE CRIMINALS -- YOU CALL THEM HARDENED CRIMINALS. THEY'VE BEEN IN JAIL 40 TIMES. THERE IS 1, 42 TIMES, AND EVERY TIME THE PERSON GETS OUT, IT IS A HE, HE COMMITS ANOTHER CRIME WITHIN 24 HOURS AND IT IS A HEINOUS CRIME, A ROUGH CRIME.

WE DON'T WANT THESE PEOPLE IN OUR COUNTRY EITHER. IF WE HAVE THE OPTION TO GET THEM OUT AND LET THEM BE BASED IN SOME OTHER COUNTRY AT A FRACTION OF THE COST, AND FRANKLY THEY COULD KEEP THEM BECAUSE THESE PEOPLE ARE NEVER GONNA BE ANY GOOD. THE PERSON THAT HAS BEEN ARRESTED 42 TIMES OR 22 TIMES OR 17 TIMES AND IS IN FOR MANSLAUGHTER AND EVERYTHING ELSE AND ONLY GETS OUT BECAUSE OF A VERY WEAK JUDICIAL SYSTEM THAT ONLY GOES AFTER PEOPLE LIKE TRUMP, THEY DON'T GO AFTER THE CRIMINALS, THEY DON'T GO AFTER PEOPLE LIKE THIS AND THEY LAUGH AT OUR LAW.

IF THAT TOOK PLACE YOU WOULD HAVE A LOT LESS CRIME AUTOMATICALLY. >> [INDISCERNIBLE] >> GUANTANAMO BAY, IS THERE SPACE TO ACCOMMODATE? >> THERE'S A LOT OF SPACE TO ACCOMMODATE A LOT OF PEOPLE AND WE WILL USE IT. WE HAVE IT. WE HAVE IT FOR NOTHING. LESS-EXPENSIVE AND EVEN MORE SECURE.

WE'VE HAD OTHER COUNTRY SAY WE WOULD LOVE TO DO THAT, WE WOULD LOVE TO TAKE YOUR CRIMINALS. I'M ONLY TALKING FOR THE MOST SEVERE CASES -- ROMAINE: YOU LISTENING TO THE PRESIDENT OF THE UNITED STATES IN THE OVAL OFFICE, THIS IS TAPE OF WHAT HE SAID A FEW MOMENTS AGO. YOU CAN LISTEN MORE ON YOUR BLOOMBERG TERMINAL.

WE NEED TO GET BACK TO THE MARKETS. REMAIN BOWING -- JUST A FEW MINUTES UNTIL THE CLOSING BELLS, MOST OF THE LOSSES FROM YESTERDAY BEING RECOUPED. ALIX: IF YOU LOOK BACK TO THURSDAY, WE HAVEN'T RECOUPED THOSE LOSSES WHEN IT COMES TO THE S&P, SO STILL ABOUT 40 POINTS TO MAKE UP. SCARLET: WE ARE ABOUT 1.2% OF RECORD HIGHS. IT SEEMS LIKE A LOT OF PEOPLE ARE PRICING IN THE FACT THAT -- THERE IS A LOT OF WIGGLE ROOM BEFORE THESE TARIFFS CAN BE CONSIDERED PERMANENT. ROMAINE:

THE VIX IS DOWN, NOT A LOT OF ACTION IN THE BOND MARKET BUT A LITTLE EMBRACE WITH DEALS SLIGHTLY DOWN. WE SHOULD POINT OUT WE ARE IN THE THICK OF EARNINGS SEASON. WE HAVE A SLEW OF EARNINGS AND AFTER THE BELL TONIGHT, INCLUDING SNAP, AMGEN, ELECTRONIC ARTS, CHIPOTLE, MATTEL. AND ALPHABET. THANKS FOR LISTENING. ALIX: I WAS TOTALLY LISTENING. THEY ARE AT A RECORD HIGH, THE NUMBERS COULD BE GANGBUSTERS AND ALSO THE STOCK IS VERY HIGH. SCARLET: THE STOCK IS AT A LOWER VALUATION THAN OTHER MAG SEVEN COMPANIES, THIS IS NOT NECESSARILY THE CHEAPEST BUT MOST OPPORTUNISTIC BY RIGHT NOW.

ROMAINE: MAG SEVEN GETTING MORE THAN A SLIGHT BIT ON THE DAY, NOT ENOUGH TO RECOUP LOSSES BUT I WAS LOOKING AT THE BIGGEST GAINERS OF THE DAY, YOU WERE HERE AFTER THE BELL, PALANTIR IS THE GAINER. A LOT OF PEOPLE WERE BEARISH ON THAT THIS STOCK. GIVEN HOW MUCH IT HAD RISEN BUT AT LEAST BASED ON THE EARNINGS REPORT LAST NIGHT, A LOT OF OPTIMISM ABOUT THE AMOUNT OF REVENUE THEY ARE RAKING IN. SCARLET:

THEY PUT IT AS UNTAMED ORGANIC GROWTH. ALIX: MORE BULLISH THAN THAT. SCARLET: THAT'S FROM THE COMPANY ITSELF, IT TELLS YOU SOMETHING ABOUT HOW IT IS CONFIDENT WITH THE PROJECTIONS. ROMAINE:

I WAS GOING TO SAY, YOUR FAVORITE STOCK, ESTEE LAUDER, PROBABLY THE BIGGEST DECLINER TODAY BECAUSE NO ONE IS INVESTING. ALIX: THIS IS MY THING, YOU HAVE TO INVEST IN EVERYBODY DID DURING THE PANDEMIC AND THERE'S AN EXECUTION ISSUE AND THEY ARE LOOKING AT DIFFERENT OPTIONS. SCARLET: THEY ARE NOW GOING TO PRIVATE LABEL TO INVEST IN THEIR FACE. ALIX: IT WILL BE CHEAPER, SO IT'S EASIER TO DIGEST. ROMAINE:

IS IT SAFE TO BUY RETINOL OFF OF TEMU? ALIX: DON'T DO THAT. THERE WILL BE A TARIFF NOW ON TEMU. ROMAINE: WE'VE BEEN TALKING ABOUT THE IMPACT OF TARIFFS.

PEPSI SAYING IT COULD REALLY KILL US. ALIX: ON RADIO EARLIER, I WAS TALKING TO SOMEONE SAYING TARIFFS ARE ALREADY SO HIGH ON STUFF FROM CHINA IN A WAY THAT 10% IS NOT THAT BIG OF A DEAL, PARTICULARLY ON THINGS LIKE ENERGY, CLEAN ENERGY AND TECH. SCARLET: IF YOU ARE BUYING APPLIANCES, A LOT OF PEOPLE DID THAT IN THE LEAD UP TO THE HOLIDAYS ON THE EXPECTATION TARIFFS ARE COMING. THAT'S WHAT MANUFACTURERS WERE TELLING PEOPLE TO DO. ROMAINE: PAYPAL DOWN, MARKED DOWN AS WELL, SPOTIFY WITH THE PRE-GOOD DAY AS WE GET THE CLOSING BELLS IN NEW YORK AS WE PREPARE FOR A DELUGE OF EARNINGS AFTER THE CLOSING BELL, THAT INCLUDES FROM ALPHABET, CLOSING HIGHER ON THE DAY, HOPING TO LIFT THE BROADER MARKET, THE DOW JONES LOOKS LIKE IT WILL AT ABOUT 135 POINTS. S&P UP ROUGHLY 4010 -- 40 POINTS. THE NASDAQ COMPOSITE AND 100

EACH UP ABOUT ONE POINT 3% AND THE RUSSELL 2000 UP ABOUT 1.4% ON THE DAY. SCARLET: LET'S LOOK AT THE I MAP THAT SHOWS THE SECTOR PERFORMANCES. THE SAFE HAVENS ARE THE ONES LEADING THE DECLINES, UTILITIES, STAPLES AND HEALTH CARE IN THE RED COLUMN. ENERGY STOCKS THE BEST

PERFORMERS UP BY 2% FOLLOWED BY COMMUNICATION SERVICES AND TECH. ALIX: ON THE BOND MARKET, INTERESTING DAY, BUYING ACROSS THE CURVE, LOOKING AT THE BACK END DOWN BY FOUR OR FIVE BASIS POINTS, REVERSING THE DECLINE WE SAW YESTERDAY ON THE SELLOFF AT THE FRONT END. THE TWO-YEAR WITH YIELDS DOWN ABOUT THREE BASIS POINTS. ROMAINE: A SUPPLIER TO APPLE WITH NET SALES IN THE FISCAL THIRD QUARTER AT ABOUT 556 MILLION, BLUFF STREET -- ABOVE STREET ESTIMATES. TWO DOLLARS 51 SINCE PER SHARE AND THE STREET WAS LOOKING FOR TWO DOLLARS 54. THE COMPANY SANG LOOKING FOR

350 TO 410 MILLION AND THE STREET WAS LOOKING FOR 360 MILLION AND THE SHARES HAVE BEEN A LITTLE HIGHER BEFORE THAT HEADLINE ON THE REVENUE NUMBER GUIDANCE. NOW THOSE SHARES UNCHANGED. ALIX: IN THE PRESS RELEASE THEY WERE TALKING ABOUT THEY EXPERIENCED STRONG DEMAND IN OUR SMART PHONE AUDIO COMPONENT INCLUDING AN AMPLIFIER AND SMART CODEC. PART OF THE BUSINESS IS DOING WELL, THE BASIC PART THAT GOES TO THE CONSUMER. SCARLET: THEY ALSO MAKE A MANAGEMENT CHANGE WITH THE APPOINTMENT OF JEFF WILLARD AS CFO EFFECTIVE FAVORITE 24TH.

LET'S GET YOU THE NUMBERS FOR BIOTECH FIRMS. AMGEN WITH THE FOURTH QUARTER ADJUSTED EPS OF $5.31. THAT BEAST ESTIMATE. FOR SKODA REVENUE ALSO HIGHER THAN ANTICIPATED WALL STREET ESTIMATE. IN TERMS OF THE OUTLOOK FOR THIS YEAR, 2025 REVENUE COULD BE UP TO 35.7 BILLION, HIGHER

THAN THE ESTIMATE. ROMAINE: ALPHABET EARNINGS, THE SHARES, KNEE-JERK REACTION MOVING LOWER ON THE BACK OF A REVENUE NUMBER FOR THE FOURTH QUARTER, $96.47 BILLION, THE STREET WAS LOOKING FOR 96.2, SO RELATIVELY IN LINE WITH ESTIMATES, TWO PENNIES HIGHER THAN WHAT THE STREET WAS LOOKING FOR ON AVERAGE. CLOUD REVENUE A MISS, 11.9 6 BILLION, STREET WAS LOOKING FOR

12.19. HERE IS YOUR YOUTUBE ADD REVENUE, 10 POINT 4 BILLION. SLIGHTLY AROUND WHAT THEY WERE LOOKING FOR. CAROLINE HYDE IS THE COHOST OF NUMBER TECHNOLOGY AND JOINS US IN STUDIO. THE KNEE-JERK REACTION TO THE DOWNSIDE, WHAT AM I MISSING? CAROLINE: CLOUD DRIVES THIS LOWER. IT HAS STARTED TO BEAR FRUIT

FOR GOOGLE. THEY'VE SOMEWHAT ALSO BEEN AN ALSO RAN COULD IF YOU'RE NOT LIVING UP TO EXPECTATIONS AND GOOGLE CLOUD, A LOT OF IT HAS TO DO WITH THE APPETITE FOR GENERATIVE AI. THE REVENUE EXCLUDING PAY FOR TRAFFICKING, THE ESTIMATE IS 82.8, THEY ARE SEEING AI POWERED GOOGLE CLOUD PORTFOLIO HAS CONTINUED TO SEE STRONGER DEMAND. WE DID SEE THAT WITH MICROSOFT NUMBERS. AZURE WEAKER THAN EXPECTED. THE GROWTH IN THE CLOUD HAS

STARTED TO DO MENU EIGHT. ALIX: THEY EXPECT 75 BILLION DOLLARS IN CAPEX IN 2025, WE KNEW THEY WOULD INVEST MORE, THEY TOLD US ON THE LEFT CALL, BUT 75 BILLION, HOW BIG IS THAT FOR THEM? CAROLINE: MICROSOFT IS SPENDING MORE THAN A BILLION, 75 BILLION IS WHERE THEY NEED TO COMMIT TO CONTINUE TO BUILD OUT THE OFFERING WHEN IT COMES TO GENERATIVE AI, LARGE LINK WHICH MODELS COULD THIS IS TEARING THE MARKET PARK MUCH YOU NEED TO INVEST AS MUCH AS YOU PREVIOUSLY COMMITTED TO? MOST OF THEM HAD COMMITTED TO SPENDING AS MUCH IF NOT MORE, META-HAD UPTICK SPENDING TO 65 BILLION OVERALL. IT SEEMS LIKE IT IS NOT GONNA BE BEARING FRUIT, WHERE IS THE RETURN ON THE AI INVESTMENT IF YOU'RE CLOUD ISN'T LIVING UP TO EXPECTATIONS, THE MARKET HAS SEEN ABOUT $58 BILLION OF SPEND AND THEY'RE COMING OUT WAS 75 BILLION, IT'S A LOT MORE THAN ANTICIPATED. SCARLET: A QUICK MENTION OF THE COMMENTS IN A PRESS RELEASE, THE FOURTH QUARTER WERE STRONG, WE ARE BUILDING AND TESTING AND LAUNCHING PRODUCTS FASTER THAN EVER.

THIS IS LIKE AI OVERVIEWS, USER ENGAGEMENT. WHAT WILL BE THE QUESTION PEOPLE WANT TO PIN HIM DOWN ON WHEN IT COMES TO THEIR EARNINGS CALL? CAROLINE: IN THE UNITED STATES, THE FACT HE WAS FRONT AND CENTER ON INAUGURATION DAY. ANTITRUST AND CHINA, HOW MUCH WILL HE BE EMBROILED IN TIT-FOR-TAT, ANDROID IN PARTICULAR IS THEIR BIG SELLER IN CHINA. AND PROBABLY, HOW MUCH THEY CAN COMPETE WITH SEARCH COMPETITORS. THUS FAR, COMPLEXITY AND OPENAI HAVEN'T MANAGED TO EAT INTO THE OVERALL MARKET SHARE WHEN IT COMES TO SEARCH.

WE ARE MANAGING TO USE THE GEMINI PRODUCT BUT IS THERE A RISK GOING FORWARD AND DO THEY NEED TO STILL BE SPINNING 75 BILLION ON DATA CENTERS? ROMAINE: ONE QUESTION, WHY ARE WE SEEING THIS BIG DROP IN ALPHABET WHEN META SEEM TO GET A PASS? THE ROI ON THE SPEND WASN'T ANY BETTER THAN ALPHABET, WHAT GIVES? CAROLINE: I THINK MANY PEOPLE FELT IT WAS ALREADY SHOWING IN THE ADVERTISING PICK UP, THEY COULD SEE MORE GENERATIVE AI USE IN ADVERTISING CREATORS AND PEOPLE COMING TO THEM TO GET MORE TARGETED DATA. LARGE LANGUAGE MODELS WAS ALSO THE DEEPSEEK ALSO RAN, MAYBE THERE IS SOME PROFIT-TAKING AS PEOPLE BUILT IN CHRISTIAN DOING. -- CRESCENDOING. ALIX: ELECTRONIC ARTS COMING IN, BOOKINGS A LITTLE BETTER THAN ESTIMATES. THE FULL YEAR ON THE HIGH-END, ABOUT $7.15 BILLION ON THE HIGH-END FOR THAT. FOR THE FOURTH QUARTER, $.65 TO ABOUT A DOLLAR. SCARLET:

MATTEL BEATING ANALYST ESTIMATES FOR THE FOURTH QUARTER AND ITS 2025 OUTLOOK. $.35 BEATING THE CONSENSUS ESTIMATE BY $.15. A BIT HIGHER THAN EXPECTED, FULL YEAR ANYWHERE FROM $1.66.

WHAT'S INTERESTING IS MATTEL SAYS IT'S CONSIDERING INCREASING THE PRICE OF BARBIE AND HOT WHEELS TOYS TO OFFSET THE COST OF TARIFFS. ALIX: OH MY GOSH. ROMAINE: THAT WON'T GO OVER WELL WITH SOME PARENTS. MEANWHILE, IN PHASE. FOURTH QUARTER NUMBERS, IT LOOKS LIKE A DECENT BEAT, 382, UP TO $383 MILLION, EPS ALSO A BEAT.

IF YOU'RE WONDERING ABOUT CAPEX, NOT QUITE WHAT WE ARE SEEING WITH ALPHABET, 8.1 MILLION DOLLARS IN CAPEX EXPENDITURES BELOW WHAT THE STREET WAS LOOKING FOR. ALIX: ALPHABET SHARES DROPPING FAST, LOOKING AT GOOGLE CLOUD REVENUE, THAT WAS THE BIG ONE. DESPITE THAT, YOUTUBE AND CLOUD, THE ANNUAL RUN RATE ABOUT $110 BILLION, THAT'S ABOUT 30% PLUS MORE GROWTH. CAN YOU PUT IT IN PERSPECTIVE HOW MUCH THOSE BUSINESSES ACCOUNT FOR GOOGLE. CAROLINE: IN TERMS OF THE GROWTH FOR MARKET SHARE, THIS COMPANY HAS TO RE-ORIENTATE ITS BUSINESS CONSTANTLY.

THE CASH COW HAS ALWAYS BEEN SEARCH BUSINESSES. YOUTUBE IS MORE INTEGRAL. THEY'VE MONETIZED THAT. FROM A TV PERSPECTIVE IS THE NUMBER ONE VIDEO SOURCE WE ALL TURNED TO AT THE MOMENT, THEY MANAGE TO MAKE INROADS AND UPTICK OF ADVERTISING BUT CLOUD HAD BEEN THIS NEW COMPETITOR FOR THEM A LITTLE BIT AND THEY WERE TRYING TO MAKE THEIR MIND UP AS TO -- LOOKING AT $12 BILLION OF THE FOURTH QUARTER COMPARED TO 80 BILLION IN TOTAL, IS NOT THE CASH COW AT THE MOMENT THAT SEARCH IS BUT IT IS THE FUTURE WHEN WE ARE THINKING ABOUT HOW WE TURN TO OVERALL COMMUTE -- COMPUTER NEEDS GOOD THAT CAN MAYBE SELL A LITTLE MORE ON THE COMPUTE. SCARLET: CLOUD IS SEEN AS FEATURING A SMALLER BASE THAN MICROSOFT OR AMAZON AS WELL. CAROLINE: THERE ARE NEW KIDS ON THE BLOCK AS WELL. SCARLET: WE TALKED ABOUT CAPEX, 2025 CAPEX AT ABOUT $75 BILLION.

ACCORDING TO OUR TECHNOLOGY EDITOR, THE CONSENSUS ESTIMATE WAS $57.9 BILLION, A HUGE BEAT IN TERMS OF HOW MUCH MORE THAN WHAT A LOT OF ANALYSTS ANTICIPATED. CAROLINE: BLOOMBERG INTELLIGENCE THOUGHT IT WAS COMING. SO I GUESS THE STREET HAD DIFFERENT MARK ASIANS OF WHERE THEY THOUGHT THE INVESTMENT WAS COMING FROM. BLOOMBERG INTELLIGENCE SAYING IT'S AS WE EXPECTED, THIS NUMBER SHOULDN'T BE A SHOCK, BUT REMEMBER MICROSOFT BEAT ON EVERY FOURTH QUARTER FISCAL NUMBER BUT EVERYONE WAS WORRIED ABOUT THE FACT THAT AZURE SLOW DOWN ONE PERCENTAGE POINT.

THE FACT ALPHABET IS NOT SEEING THE GROWTH WE WANT TO SEE FROM THE NEW MONEY SPENDER OF CLOUD IS PERHAPS TAKING SOME WIND OUT OF THE SAILS. ROMAINE: THIS WILL BE THE STORING THE CAP SESSION -- CASH SESSION TOMORROW. BROUGHT TRADING ON THE BACK OF THE ALPHABET NUMBER. CAROLINE: BROADCOM IS MAKING EVERYONE'S INTERNAL CHIPS. NOT WANTING TO BE TOTALLY DEPENDENT ON NVIDIA. WE ARE WAITING FOR AMD AS WELL, THEY ARE TRYING TO SHOW THEM AS A KEY COMPETITOR. THE SPHERE THAT MARKET SHARE

HAS NOT BEEN WINNING FOR THEM. ALIX: CAROLINE, THANK YOU, COHOST OF A BLOOMBERG TECHNOLOGY OR EARNINGS ROLLING OUT, LOOK AT SNAP, SOLID EARNINGS BEAT FOR THE FIRST QUARTER REVENUE AND FOURTH QUARTER DAILY ACTIVE USERS, BEAT 453 MILLION AND THE FIRST QUARTER REVENUE ON THE HIGH-END AT $1.36 BILLION, THAT'S A SOLID B. FOR THE FOURTH QUARTER SO A BEAT, JUST KEEP IT EARNINGS. ROMAINE: CHIPOTLE, NOT GOOD NEWS FOR THE NEW CEO, FOURTH QUARTER SALES MISSING. THE STREET LOOKING FOR 5.7, REVENUE COMING IN RELATIVELY IN

LINE WITH ESTIMATES AT ABOUT 2.8 BILLION OPERATING MARGINS, NARROWING TO 14.6%, ADJUSTED EPS IN LINE WITH ESTIMATES AND THE COMPANY NOW SAYING LOOKING FORWARD IS STILL SEES NEW RESTAURANTS IN THE 315 TO 345 RANGE, LOOKING FOR 336.91 AND SHARES DOWN 7% IN AFTER-HOURS TRADE. SCARLET: LET'S TALK ABOUT MONDA LEE'S -- MON DELEZ, NET REVENUE A LITTLE BELOW WHAT CONSENSUS ESTIMATE WAS AS WELL AND ADJUSTED GROSS MARGIN FOR THIRD QUARTER 31.5% BELOW THE ESTIMATE OF 33.4%.

THE ORGANIC REVENUE AT ABOUT 5%, THERE WERE LOOKING AT 5.2% SO A BIT OF A MESS. ROMAINE: WE WILL SAY GOODBYE TO ALIX STEEL, WE WILL CATCH UP WITH HER TOMORROW ON THE CLOSE, WE CONTINUE OUR COVERAGE, LOOKING AT SOME OF THE BIG MOVERS IN AFTER-HOURS TRADE, THE BIGGEST DRAG ON THE BUCKET RIGHT NOW, ALPHABET. THIS SEEMS TO BE MUCH LESS ABOUT THE TOP LINE NUMBER AND MORE ABOUT CAPEX X AND THE EFFECT ON THE BOTTOM LINE.

BRENDA JOINS US FROM JEFFRIES. HE HAS A BUY ON ALPHABET. WHAT WAS YOUR REACTION? BRENT: THE GROWTH RATE WENT FROM 35 TO 30 AND EVERYONE EXPECTED AI TO ACCELERATE CLOUD. MICROSOFT MISSED THEIR NON-CORE AI WORKLOADS AS WELL. WHAT IS GOING ON, TWO OF THE

BIG THREE ARE MISSING CLOUD NUMBERS, THAT'S THE FIRST THING. ALL EYES TURN TO AMAZON, DO THEY TAKE SHARE, AND I GO BACK TO MAKING THE NUMBERS. THIS IS NOT A BIG BEAT. ALPHABET DOESN'T GIVE US ANYTHING, W

2025-02-07 21:05

Show Video

Other news

Все равно купят?! — Тест RTX 5070 vs RTX 4070 SUPER, RTX 4070 Ti SUPER и RTX 5070 Ti 2025-06-02 18:18
Technology in the Workplace 2025-06-02 05:16
Bring your own model to Windows using Windows ML | BRK225 2025-05-26 17:57