Trump Open to Tariff Negotiation; Investors Await Labor Data and Powell

Bloomberg Audio Studios, Podcasts, Radio News.
Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the
stories we're following today, Karen.
The global market selloff continues as investors continue to digest
the impact of President Trump sweeping tariffs around the world
and their effects on the US economy. Concern is building
that the duties will hammer America's growth, but the President
now says he is open to bringing the tariff rates down.
It depends if somebody said that we're going to give
you something that's so phenomenal, as long.
As they giving us something that's good.
For instance, with TikTok as an example, we have a
situation with TikTok where China will probably say, will approve
a deal, but will you do something.
On the town.
President Trump spoke aboard Air Force one last night, a
day after reviewing a TikTok takeover offer from Oracle Blackstone
and Andrees and Horowitz. The Chinese owned video app has
until tomorrow to find a buyer or face a ban
in the US.
Well, Nathan, Despite yesterday's deepest sell off extending into this morning,
President Trump is predicting the market will boom once the
tariffs kick in. Mice President JD. Vans is echoing that.
In an interview with Newsmax, I.
Freankly thought, in some ways it could be worse in
the markets because this is a big transition. You saw
the President said earlier today. It's like a patient who
was very sick. We did the operation, and now it's
time to make the patient better.
And that's exactly what we're doing.
Vice President JD. Vans told Newsmac Newsmax last night that
the stock market will boom for a long time because
we're reinvesting in America.
Well, Karen, we continue to see the fallout from Trump's
tariffs in Europe. Let's go to London get the very
latest with Bloomberg's ew and Potts.
Good morning you in, Nathan and Karen.
No sign of the promised stock market boom in Europe today,
the stocks EATUNDUS sliding as much as two percent, reaching
its lowest since January fifteenth. While markets react to the
tariff Bazuka, Europe's political leaders a weighing their response, President
mccron of France saying there must be collective solidarity, urging
European businesses to reduce investments in the United States. They
use biggest economy Germany, also pushing for a more robust
response to the US president's threats in London, I'm Une
Potsplinberg Radio.
Right you and thank you. Well, let's turn back to
the markets here in the US, where futures again are
falling following yesterday's massive selloff on Wall Street. The NASDAG
plunged six percent, the S and P five hundred drop
four point eight percent. Well, the Dow fell almost seventeen
hundred points or four percent. So what should an investor do.
We have a couple of calls this morning, and we
bring in Bloomberg's John Tucker with the latest.
John, Good morning, Good morning Karen.
Let's start with what investors are afraid is going to happen.
Bob michael is with JP Morgan Investment.
How two stand as they were announced that's going to
push the US economy into recession?
Was caught off guarded by the severity of the tariffs.
They're even bigger than the smooth holy tariffs at the
beginning of the Great Depression. Jane Foley is with Robbobank.
These are at the top head really of many market
full costs that we had.
Semas shod principal Global Investors sees the threat of higher
inflation and slower growth, the dreaded stagflation.
And we know from looking at previous regime, previous market
movements over history, that stack fations typically the regime where
rarely does any asset class do particularly well.
You begs downgraded US stocks warning of prolonged market volatility.
Legendary investor Bill Grows warns potential dip buyers, this is
an epic economic and market event, and don't catch a
falling knife. So what stocks do well in such an environment?
Tobacco and household products, As Bloomberg columnist John Authors points out,
people will always smoke and go to the bathroom in
New York time, John Tucker, Bloomberg Radio.
Yes, indeed, thank you, John.
While all investors take a big hit to their portfolios,
some of the rich and famous were particularly hard hit.
Bloomberg's Lisa Matteo joins us with that angle on the
cell off. Good morning Lisa, Good morning there, Nathan.
Yeah, the world's five hundred riches people saw their combined
wealth plunge by two hundred and eight billion dollars yesterday. Now,
if that sounds like a big number. Well, it's because
it is. It's the fourth largest one day decline in
the Bloomberg Billionaires indexes thirteen year history. It's also the
largest in the height of the pandemic. Billionaires in the
US they were affected the most metas Mark Zuckerberg at
the top. The company's nine percent slide, well it cost
him seventeen point nine billion dollars. Amazon's nine percent plunge,
well that cost Jeff Bezos fifteen point nine billion in
personal wealth. And Tesla's Elon Musk he lost eleven billion.
The only region with the rich sawn net gains on
the index was the Middle East. Lisa Matteo, Bloomberg Radio.
All right, Lisa, thank you well that Trump tariff continues
to impact global markets. Joe Lavornia, chief economist at sm
sm BC Neco Securities and a former Trump economic advisor, says,
let's see how things play out long term.
We could disagree on the approach and the implementation. That's
we could debate that, but ultimately, where is the economy
next spring in summer? If it's turning up and turning
up powerfully, and it looks like the negotiator administration and
as trading partners are moving back to the center. Then
maybe all this is just a lot of noise and
things have settled down.
We have some minimal level of tariffs.
There's some protectionism, but generally speaking, cooler heads prevailed and
things worked out.
As NBC Neco Securities Joe Lavornia says, Trump's tariff announcement
was more aggressive than he anticipated, but he has not
yet changed his outlook for US growth In twenty twenty.
Five, well Karen.
New York Governor Kathy Hochel says tariffs have already hit
her state's economy.
She spoke with Bloomberg's Balance of Power.
This is the tenth largest economy in the world. We
have Wall Street, we have farms. We have a border
four hundred and fifty miles with Canada, so we have
trade relationship with candover fifty billion dollars. So already, here's
what we're seeing, droppings and bookings from Canadians coming to
New York State, a huge source of tourism all the
way to New York City. But it's certainly my hometown
in Buffalo where Canadians come over all the time and
they go to our sporting as, they shop.
In our source.
You York Governor Kathy Hokeel called the tariff's an unforced
error and said the state may have to adjust how
it funds various social programs in the coming year. Here
the full conversation on the Bloomberg Talks podcast. Watch it
on the Bloomberg Podcasts page on YouTube.
Well, Nathan. In addition to the tariff fueled market selloff,
investors will have another economic report to digest. At eight
thirty Wall Street time, we'll get the jobs report for
the month of March, and we get a preview with
the Bloomberg's and Michael McKee.
The Trump fallout is visible in the markets, but maybe
not so much in today's jobs numbers. Federal hiring may
have slowed or may come up slightly negative, but most
dose job cuts came after the March survey week, and
there's still a lot of confused us about who is
actually fired. What the Fed we'll want to see is
the unemployment rate, which they are viewing as a proxy
for the overall economy. Again, the issue is that too
is pre tariffs, so absent big moves in either job
creation or joblessness, today's jobs figures won't have a long
lasting impact on investor or Central bank thinking. Michael McKee,
Bloomberg Radio.
All right, Mike, thank you. Bloomberg Surveillance with Tom Keen
and Paul Sweeney will bring you full coverage of the
jobs are poored again. That's eight thirty Wall Street Time
right here on Bloomberg Radio.
Thank current. Investors are also going to hear from j
Powell this morning.
The Fed chief is getting ready to for a speech
on the state of the US economy. Powell's address and
that Job's report come as traders increase bets on rate cuts.
Money markets now show one hundred basis points of reductions
by year's end. That's up from about seventy five before
the tariffs were announced.
This week.
Catch Powell's full remarks at eleven thirty Wall Street Time
on Bloomberg Radio, Bloomberg Television, and the Bloomberg Podcasts YouTube page.
Well Nathan andother news This morning, Republicans are considering a
new tax bracket for millionaires. On Bloomberg's Amy Morris has
more from Washington.
The goal is to pass the tax bill to renew
the twenty seventeen tax cuts, but they have to pay
for it somehow, so sources tell Bloomberg. In a departure
from decades of opposition to such tax increases, Republicans are
weighing a new tax bracket with a top rate of
around thirty nine to forty percent. Another option being considered
raising the top tax rate from thirty seven to thirty
nine point six percent for incomes above six hundred twenty
six three hundred and fifty dollars. That reverts back to
the rate that was set by former President Obama. In Washington,
Amy Morris Bloomberg Radio.
Time Now for a look at some of the other
stories making news in New York and around the world.
And for that we're joined by Bloomberg's Michael Barr.
Michael, Good Morning, Good morning Karen. President Trump has removed
General Timothy Hawk from his position as director of the
National Security Agency. That's according to two top Democrats on
the Senate and House Intelligence committees. One lawmaker says it
makes us all less safe. The Washington Post, who first
reported the story, also says Hawk's civilian deputy at the NSA,
Wendy Noble, was reassigned to another position within the Pentagon.
Storm systems moving across the Midwest and South could bring
ten to fifteen inches of rain in some areas. Bloomberg
Media religis Craig Allen has the latest.
This is a wild, frightening, immovable setup right now, and
so the same areas continue to get pummeled by torrential
rainfall thunderstorms that reach severe levels and spawn tornadoes. We've
had over four dozen tornadoes reported already, and the same
areas will be affected over the next twenty four to
forty eight hours and perhaps right on through the rest
of the weekend.
Bloomberg's Craig Allen. At least seven people were found dead
after tornado's tour through the South and Midwest. Five of
those victims in Tennessee. That includes a massive ef three
Wednesday night in Selmer, Tennessee. Governor Bill Lee.
Entire neighborhoods that were completely wiped out, apartment complexes that
were destroyed by the tornado, many many families displaced, loss of.
Life, Governor Bill Lee.
In Bristol, Pennsylvania, three people were killed when they were
struck by an Amtrak train heading from New York to Philadelphia.
Police Chief Joe Moores.
When our officers arrived, the sergeant was starting to head
up to the subjects up on the railroad tracks when
an Excel A high speed train traveling southbound towards Philadelphia
struck all three subjects.
That were up on the track.
Service between New York and Philadelphia was temporarily suspended. Finally,
the Trump administration is poised to block five hundred and
ten million dollars in federal grants and contracts for Brown
University due to the school's response to anti semitism on campus.
The potential freeze followed similar moves again Columbia, Harvard, and
Princeton Global News twenty four hours a day and whenever
you want it with the Bloomberg News. Now, I'm Michael Barr,
and this is Bloomberg Karen.
All right, Michael Barr, thank you time now for the
Bloomberg Sports Update. Here's John Stanshower. John, good morning, Good.
Morning, Karen.
The Metz are back at Cityfield. Home opener starts at
three o'clark Tyler McGill on the mount against Toronto. The
Pirates have their home opener just after four. The Yankees
arrived in Pittsburgh late last night. I've turn around. The
Yanks finished a season opening homestand with a quick starting
against Arizona first inning, a double, a walk, and Aaron
Judge at the plate trip it out to us.
Enter field in deep He do see yas who did
the extra vase hit?
There's fifteen over the year and a three nothing Yankee lead.
Yes, then we're two innings later a Trent grisham to
run shot on one ding. After that, Jazz Chisholm with
a man aboard his fourth and Yanks twenty sank in
home run hitting their first six games, they led nine
to three. The Diamondbacks made an interestingam with the seventh
inn in Grand Slam, but the Yanks one nine to seven,
salvaged the game. In the series, the Red Sox won
eighty four at Baltimore Adox. Bregmant his first Boston home
run Socks and the Cardinals.
This afternoon at Fenway in Brooklyn.
Nets lost to Minnesota one oh five to ninety and
Milwaukee's winning Philadelphia Jannis Son to the COMFO thirty five points,
seventeen rebounds, twenty assists. Nick Day Jalen Brunson will practice.
They could return from his ankle injury tomorrow's game in Atlanta.
The Rangers tomorrow visit the Devils. Montreal won last night.
The Canadians have a two point lead on the Rangers
for the last.
Playoff spot in the East.
The NCAA Women's Final Four starts tonight in Tampa and
for our listeners on ninety nine to one in Boston
eleven to three zero in New York who can hear
the games starting at six? The men have their semifinals
tomorrow in San Antonio. The Patriots have traded quarterback Joe
miltonto Dallas for a fifth round draft pick John STASHEDWARER
Bloomberg Sports Cary Nathan.
Coast to coast on Bloomberg Radio, nationwide on Sirius Exam
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager.
Markets are coming off their worst day in nearly five years,
Roughly two and a half trillion dollars white from the
stock market after President Donald Trump unleashed new tariffs on
roughly every country in the world, and the losses continue
into the early morning hours. But the President says he's
not worried about the market reaction.
The markets are going to boom.
The stock is going to boom.
The country is going to boom and the.
Rest of the world wants to see, is there any
way that can make a deal.
That was the President speaking after the S and P
five hundred fell four point eight percent the.
Day after his tariff rollout.
Joining us this morning, Ben Laidler, head of equity strategy
at Bridesco Securities.
Ben, have you seen anything like this in your career?
Good morning.
My background in emerging market so unfortunately I have, but
we certainly haven't seen it in a while. And this
is early days of markets trying to price in what
was a near worst case scenario with higher tariffs than expected,
more opaque tariffs and expected, and more open ended tariffs unexpected.
So this has sent us recession risks through the roof,
and the market is grappling with that and starting to
try and price this in.
Is recession turning into a base case for you?
So recession probability risks were probably thirty percent last week
and rising. Now they're fifty and rising, So that's uncomfortably high.
The big debate of markets right now is are we
going into a real recession or is this just a
growth scare.
I'm leaning towards growth.
Scare, but I frankly wish I had more confidence in
that opinion than I do.
Part of the debate as well, is what to do
about this ongoing dip in the market. We heard Bill
gross Warren investors not to try to catch a falling knife.
Ed yard Denny of Yard Denny Research says, this is
a buying opportunity.
Which way do you swing that this kind of uncertainty.
Yeah, as I said, I'm leaning towards growth scare not recession.
If that's right, then I think you gradually dribble money
into this market. You dollar cost average it. You don't
jump in with both feet. This probably takes This is
probably more on a one day repricing event. I guess
the three things to watch. One economic uncertainty in the US.
Absolutely sky high right now. One hope that hopes.
That that gradually is the easies and comes down from here.
Maybe as we get sort of more visibility on some
of these tariff deals too. The underlying data does need
to stay resilient. And we have a job number today
and three. Some of this depends on the rest of
the world, the degree of TARA retaliation we get. Do
we go down this, you know, into a full blown
trade war or is there some restraint.
Those are the three things that I'm watching.
I'm modestly optimistic that they all turn out to be
a little bit less bad than expected.
But as I say, early days.
Yeah, to that point, we heard the President just last
night saying on Air Force one that he's willing to
lower teriff rates as if he gets some kind of
phenomenal deal from other countries. What does that tell you
about what the terify out look could be coming from
this White House?
It tells us that it may ease that this is transactional,
but that's sort of part of the problem. It's uncertainty
that markets and investors hate, and this is.
Just prolongs that uncertainty.
But again against the terrible backdrop this, maybe it becomes
a little bit less bad, and you know that may
be all you need when markets have got this stressed.
We do have a speech from Chairman Powell coming up
as well, so many potential catalysts for this market. Could
the Fed chair change the narrative here later today?
He may, but it may not be for good reasons.
If he talks and starts talking about the necessity for more.
Cuts than I think.
You know that may make a bad situation worse because
he's only going to be doing that if you know,
the growth risks are spiking. Having said that, you know,
I do think there is still a Trump puts out there,
just maybe further away that we would like. Ultimately, I
think there is still a FED put out there. Yes,
there's a lot of talk about sticky inflation and everything else,
but in the Fed's dual mandate, they've always prioritized style
of growth over higher inflation, and we are going into
a growth slowdown.
It's just a question of how big.
So the market's now pricing five cuts over the next
year or so rather than three, So you know, the
market's certainly hoping and maybe we get a little bit
of help from Fed pale from Chepawe letters today.
We're going into another earning season later next week as well.
How could all this play into earnings as we start
to get those reports coming out.
So I think this is all, you know, earnings per
se will probably be fine. I think the focus is
all going to be on the guidance, where there is
now just complete uncertainty, especially for anybody that's doing business
outside the United States. So I think people are going
to be very focused on the guidance companies trying to
grapple with what this means for earnings. Guidance is absolutely
going to be coming down. It's coming down from sort
of double digit levels, so it's from a good place,
but again the risk is all on the downside.
That's what we're pricing in right now.
All right, Ben, really appreciate you coming back on with
us this morning. That is Ben laydlor He is head
of equity strategy at Pridesco Securities.
Karen Nathan repeating some of our top stories this morning,
President Trump says he's willing to cut tariffs if other
countries offer something phenomenal. The world's richest lasting combined two
hundred eight billion dollars in yesterday's global stocks sell off.
New York Kathy Hochel tells Bloomberg the tariffs are already
hurting state tourism and sales tax revenue. She says the
potential silver lining of boosted manufacturing could take years, and
economists again have a speech from J. Powell and a
March Job's report to consider today. The consensus calls for
one hundred and forty thousand new jobs, and the unemployment
rates study at four point one percent, and we have
more on those stories coming up.
Nathan.
All right, Karen, thank you. Matter of fact, we have
more coming up right now. When it comes to the economy.
Let's bring in us economist at City, Veronica Clark, as
we assess the tariff.
Impact and look ahead to March jobs.
Veronica is with us this morning in our Bloomberg Interactive
Brokers studio.
It's good to have you with us on the scene. Veronica.
Where are you putting recession odds after the tariffs?
Good morning, Yeah, good morning, Thank you for having me.
I mean, we had already been seeing a lot of
slowing in the economy even last year headed into the
start of this year. We've had a particularly soft start
to consumer spending the first couple months of the year,
so we were already expecting, you know, growth to be
pretty close to flat for a couple quarters for the year. Obviously,
an added terrorifrist could could certainly push that over into
something like a couple quarters of negative growth.
Are you putting specific numbers on where inflation could go?
Where you could go?
Yeah, I mean, this of course is going to be
more inflation in our forecast, just mechanically than that we
were expecting. Of course, the tariffs themselves were a lot bigger,
adding you know, something like another percent maybe to to
CPI PC inflation, maybe getting close to four percent for
the end of the year. We are expecting that that's
just somewhat mechanical. You'll see it in goods prices. Maybe
the spillover isn't as broad because it will also shrink growth,
you know, something maybe close to a percentage point, you know,
drag on consumption investment off of growth for the year.
You're hinting at the box that that could put the
FED into if we do you see at least a
short term rise in inflation along with slowing growth. What
does the FED do in a scenario like this.
Yeah, it's a.
Very tricky situation, of course, and seeing a stronger inflation
data can.
Of course be uncomfortable.
But it is interesting that the FED is going into
this tariff inflation period expecting that tariff inflation will be transitory,
and I do think that's somewhat the right way to
look at it. You know, if growth is much softer,
then yeah, you'll see goods prices increase, but you won't
see the spillover necessarily to services. Obviously, long run inflation
expectations will be an important part of that, But I
think the growth risk.
Will really be what is new and concerning for them.
That was a risk that was not as evident to
Fed officials maybe six months ago, and I do think
they'll be reacting to that, and they'll be cutting a
lot more.
You know, when you use the word transitory, I'm sure
a lot of listeners goose bumps go up. What is
the risk that this could be something less than transittory,
that we could see a more structural change to inflation
going yeah forward.
Yeah, it was a bit interesting to hear Powell use
that word a couple of weeks ago. I think this
is just a very different economy than twenty twenty two,
a different demand backdrop than twenty twenty two. The labor
market has already been loosening. We've already seen the unemployment
rate gradually rise, Hiring rates are very low, wage growth
is slowing, and so this is not an economy that's
as prone to those self fulfilling kind of inflation wage
price spirals that we saw a couple of years ago.
Okay, since you mentioned the coolness that we're seeing in
the labor market. Let's transition to that. The March non
farm payrolls report coming up in just about three hours time.
What's your expectation what we're going to see from the
Labor Department later this morning.
Yeah, this one.
The risks of the market I think are very asymmetric,
because if it's strong, it's before this period where all
these risks from tariff tariffs has escalated. But if it's weak,
and we do think we'll see more slowing. We have
ninety five thousand jobs for March, the unemployment rate rising
to four point two percent. Well, then that's the labor
market that was already slowing before these new headwinds.
Is it slowing because of government layoffs? Are we going
to start to see that filter into these numbers?
There were more layoffs that happened in February. I think
the tricky part though, is that you know, there was
a court order to rehire some of these employees in March,
so maybe they don't drop off of the payroll number
right right now. Maybe that's really more in the summer
when we're getting those big government layoffs. I think this
report and maybe even the next one, though, the weakness
will maybe be driven by weak hiring.
This is a time of year when.
Hiring is supposed to pick up, and uncertainty, of course,
could constrain.
Hiring even more, and that alone can slow job growth.
Speaking of that uncertainty, what could the implementation of tariffs
mean for labor demand?
Yeah, I think the normal expectation would be that, you know,
businesses are not going to be hiring right now. Of
course you're gonna you're a hold back on adding any
extra costs if labor costs, you know, would add to
tariff costs, So I think the first response is to
to pull back on hiring. But eventually, if you're you know,
tariff related input costs are going up, you might start
to see layoffs.
There was a small.
Uptick in the Challenger job cuts by reasons being tariffs
in the report that we got from Challenger yesterday.
We might see that rise more as we get into
the summer.
What should the bigger focus be for the feds duel
mandate maximum employment or the inflation outlook given these new
tariffs said, we've got about a.
Minute left, Yeah, I think they'll They'll obviously have to
balance both sides of that mandate and We are coming
off of a period where you know, inflation was the
main concern, so they will be sensitive to to that.
But again, I think it goes back to how they're
thinking about this this kind of inflation and they're expecting
to see it in you know, goods prices in the
data temporarily, but that it would be a one time
level shift higher in certain prices and it would not
be the broad based necessarily.
I think if you're.
Seeing softer wage inflation services inflation, they're going.
To be much more worried about the employment side of
the manday.
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