manufactures, it is a very gloomy short-term view on apple that investors so far are not incorporating. lisa: is apple uniquely positioned in a poor spot given they are hamstrung with production and, frankly, also selling into china at the same time they are consumer-facing tech company with the iphone? are they uniquely in a bad >> there is not an external position relative to the other large tech companies? pressure catalyst on president patrick: they are unique and we trump right now to pull tariffs back. have segmented our list into most of the risks, potentially >> not only does this cause uncertainty, but they raise prices. you see inflationary impacts from them. >> the problem from the at risk and most at risk, and they are the most at-risk president is that a lot of world company related to china for the leaders are not sure they can negotiate with him. very reasons that we have they don't want to be embarrassed. outlined on this show today. >> there are a lot of moving parts. >> the president is asking the you just laid out there that the chinese consumers have a american people for a long leash voracious appetite for apple and we will see if the american people give it to him. >> this is bloomberg products and they get hit on the surveillance with jonathan ferro, lisa abramowicz, and

annmarie hordern. jon: live from new york city, reflective tariffs from china and they get hit on the terrace good morning, good morning. coming in the united states. so, somewhat free-trade limited bloomberg surveillance starts now. coming into tuesday following a to apple is limited to latin wild 24 hours and financial markets. america and europe at this rumors are flying the president point. trump was considering a pause on jonathan: i'm pleased you tariffs, slapped down by the white house. levy set to go into effect separated tariffs and the shortly after midnight tonight, cyclical downturn we might expect and the two headwinds for 20% on europe, 24% on china, 34% certain companies. something i think about from on china, when he 4% on japan. time to time is whether these companies in their current form have ever really been tested by the administration doubling down a cyclical downturn in the united states. i don't think the pandemic on china with the administration threatening an additional 50% counts, because we had so much import tax on the nation with stimulus flushed into the the treasury secretary leaving system. how did these companies respond the door open for everyone else saying that over 50 countries to a downturn? have responded. for years people said, keep we look forward to meaningful buying, keep buying, it is a negotiations with them over the secular growth theme. coming weeks. the question hasn't changed. how did these companies stand up to a cyclical downturn here in is it a negotiation or a new america? rule for the game? patrick: i'm glad you separated lisa: the fact that we are still out the pandemic, because it was asking that question and i a very different type of cannot answer that question, scenario. because no one can answer that we haven't seen a full on question, the fact that we have that question is why you saw a recession since 2008 here in the united states. $2.5 trillion swing in the s&p i would expect the same gameplay

500 in the span of 15 minutes to happen, where we would have massive layoffs, prices would go yesterday. what is the lesson? it is don't take risk in stocks down, interest rates would go and bonds, because your face may be ripped off. jon: the pendulum swinging from down to stimulate the economy. one idea to the next and in i think we would see probably at between you can do a lot of damage. lisa: the pendulum has been least a point reduction once we swinging. one thing that i take of note is are knee-deep in a recession to that yesterday the treasury stimulate it. secretary came out on an network but the challenge here, though, , fox news, but also on twitter, is, again, we are trying to figure out what the talking about the fact that he will be leading negotiations administration actually wants. starting with japan. do they want systemic change or that makes you think that a better deal? potentially this is the start of you cannot build a complex negotiations for a number of factor in the united states for trading partners, except for china. overnight, china with tough one, maybe two years at best, words when it comes to the and then you have run out of united states saying that the u.s. threat to escalate tariffs people to actually run those factories. on china is a mistake on top of we are already at low levels of a mistake and they will fight until the end. jon: vietnam's offer to drop unemployment, and workers in the tariffs, rejected. united states just don't want to is it clear what these countries do this type of activity. need to provide to this

administration? lisa: no. you would see likely a lot of everyone across the board doesn't have a clear understanding a part of that is because there are competing hugging and kissing between the united states and mexico. ideals in the white house about what the goal is. right? mexico is the next-best alternative to these very highly-tariff countries to be able to lower the overall cost. you have some people talking about the trade deficit, getting it to zero. other people say that it's about getting a better deal for the united states to increase if you look at the wages between production here. in the meantime, markets are reeling and it is hard to know when stability will come back mexico and kamala say, southeast into play. jon: equities are at least doing better this morning. china, they are still twice as over the next 60 minutes we will catch up with peter oppenheimer much, but you are looking around after a wild 24 hours of five dollars per hour. markets. so, that is the way i expect this to play out. the eurasia group, as top leis tariff hardball. a lot of doom and gloom. a lot of layoffs. and why investors are in max-bearish territory. and probably a down economic looking to snap a three having a losing streak is countries rushed to the negotiating table. environment that we have not seen in 25 years. jonathan: we hope to avoid it, we would argue that we are in an but that is your base case at the moment. event-driven bear market patrick moorhead of moor triggered by tariffs. insights during higher prices however, it could morph into a cyclical bear market given are a key feature of engineering growing recession risk. that supply-side response.

what is the difference between in the meantime, who is going to build that factory right now? the two? why is the distinction so important? when you are modeling the >> actually, the distinction message around washington, d.c., saying these might be the new isn't that much when you look at rules of the game? the typical falls you get. i think a lot of people my way. lisa: how many times have we in both cases the falls on heard this from mike worth of chevron? the time that it makes -- that average are roughly about 30%. it takes to make investments, there is a regional distribution predictability is the thing they need. around that, that's the average. jonathan: it certainly goes beyond the term of this presidency as well. the rules could change and this mainly, they are distinguished is another issue for everyone. by how long it takes for the market to fall and recover. in what we call event-driven on the s&p, up 2.5 percent. up next, nancy lazar, marta bear markets, that process is a lot faster. the difference between the two? orton. from new york, this is bloomberg. event-driven bear markets, as we call them, is triggered by an event, like tariffs, that really ♪ forces the economy off of its previous track, where a cyclical one, the most common type of bear market, is really about recessions. the critical thing from here is to what extent investors start

to fully price in a recession, which would imply profits fall and equity valuations further decline. lisa: i guess we are trying to figure out how much the damage is being done by simply uncertainty and how much of the damage is being done by actual profit margin contraction by consumers facing off higher prices. which is the bigger impetus for a recession in your mind? peter: one of the triggers is uncertainty. in the end, uncertainty is the enemy of activity and risk assets. what tends to happen is that both investors and companies, as well as consumers, hold back decisions. that results in slowing activity. obviously, as economies slow you tend to get other factors coming into play. the good thing i would say is that there are important

underlying supports of economic activity, private sector balance sheets are quite strong, both corporates and banks. there is generally room for central banks to cut interest rates, which will be helpful in time. it is usually one of the necessary conditions before equities really recover from a bear phase. at the moment, this is really about uncertainty and investors trying to calibrate how far economies slow and for how long. lisa: yesterday's price action was interesting because it highlighted the fragility of liquidity in the market on all sides. the idea of why would anyone have conviction -- attain now when you could be blown out of the water -- conviction to buy n ow when you could be blown out of the water? how much of that is for you to lower your forecast again for the s&p? peter: the critical issue comes

back to if there is to be a recession or not. our economists believe that the probability of a recession in the u.s. over the next 12 months is around 45%. indeed, if the expected tariffs come through and there is no pullback, that would likely trigger a recession.typically profits fall from 10% to 20% or more depending on what industries they are in and what regions, and if investors start a likely income, the most likely outcome, then equity indexes have further to decline as they price in lower profits and probably a lower valuation. so, we still have downside in the short run in our targets, but also the sort of conditions you're likely to see to really sustain a base in equity markets

for a proper recovery and not yet there, i would say. lisa: at the beginning of the year there was the idea that if the u.s. did not enact tariffs you would see pain greater you think those phone guys will ever figure out how to keep 5g home internet from slowing down during peak hours? their customers have to share a wireless signal with everyone in their area. oooh. -you know, it's kinda like when you bring a really big cake for your birthday, and then there is only a piece left for the birthday girl. well, wish her a happy birthday. happy birthday... -it's... ...to her. -no, it's me. have your cake and eat it, too. don't settle for t-mobile or verizon 5g home internet. get super fast xfinity internet you don't have to share. in the world in europe and even forty's going to be my year. jonathan: the opening bell, 60 minutes out. china. that has shifted although now we equities up 2.6% on the s&p. seem to be heading back to that idea? on the nasdaq, up by 2.5%. you think that the u.s. is the epicenter of pain or simply part on the russell, the small caps of a global trend that is not up by 3%. with your morning movers, here going to leave any bright spots? is dani burger. dani: kicking off with the peter: i think it's interesting, biggest mover to the upside the point that you raised. pre-market, that is humana. when we surveyed investors the health insurance giant up earlier this year, asking them 16.2%. about what they thought the this comes from a decision on the trump administration to impacts of u.s. policies would be, it was very much a focus on significantly increase the medicare payouts for private insurers. a negative for the rest of the world, particularly europe and 25 billion dollars that exceeds even the most optimistic of estimates. china as people focused on the impact of tariffs, but positive cbs, unitedhealth, all of those for the u.s. because people had are higher in the premarket. broadcom also higher. that is up 5.75 percent. in mind the potential for tax cuts and deregulation. while that potential still $18 billion buyback they are

putting into this market. exists, what has happened in the u.s. is that the focus has remarkable for company exposed to international supply chains shifted towards the impact of tariffs in the u.s., in terms of in the midst of tariffs. even so, they are doing this vote of confidence after their higher inflation and investment stock slid some 31% year-to-date. and growth uncertainty. it has now become a global levi's also reporting earnings. issue, engulfing the world in this is an interesting one. uncertainty, and therefore it is the first retailer to do so in the face of tariffs. raising the risks of an economic people are saying, what will shock that hits profitability they say about tariffs? you can see by the reaction they and profit margins more broadly. had not too negative comments. your team percent rise annmarie: we heard from the pre-market. treasury secretary yesterday who they maintain their outlook for talked about how the president 2025, but that assumes there is gave himself maximum negotiating no deterioration in the macro leverage and now scott bessent environment, in consumers, in and jamieson greer will be supply chains. the admitted they are having leading the negotiation starting with japan? trouble impacting -- studying can you put the genie back in the bottle? the impact of tariffs and have a peter: anything is possible. similar task force to understand that. jonathan: do you think in the we know that the tariffs are boardroom they realized how about to be enacted. effective it might be looking at that again in that stock? dani: it worked. of course, there is room for negotiation. the assumption was that they would mount and say things are those are the signals that have dire for us.

they did not do that. come out of the administration, but again negotiations can take this quarter tariffs have a minimal impact. what happens when they actually a long time and be quite need to incorporate those? jonathan: that stock is up by complex, and that is going to create an environment of uncertainty for period of time. 13%. brammo, everyone looks at that also, it demonstrates that we are in a changed global and they're like, playbook, let's go. they come out over the next several weeks and months and environment in terms of the say, we assume no change to the world trade architecture. macro outlook. this was already beginning to lisa: you have to wonder how much collectively wall street shift in the months that looks at that and says, that sounds great, cool. or how much people say, what are followed the pandemic as we talking about here? i can imagine based on the companies around the world tried rhetoric we have heard from a to diversify supply chains. number of executives, whether it is j.p. dimon, king griffin of we are in a less globalized environment. citadel, or larry fink of that will put some downward blackrock not telling erik pressure on world trade and has schatzker at the economic club implications for inflation and yesterday that most ceos he growth. speaks to believe we are in a i think that it is, of course, recession. how do you square that? possible that this is part of a jonathan: session highs. that is how we are squaring at the moment. or tariffs set to take effect tactic to negotiate and come to overnight. agreements, but we've got some some eco-data through the week. time and uncertainty. mike mckee has it all.

good morning, mike. bear in mind that we came into mike: good morning. the problem with this week's this year with relatively high valuations in risk assets, in data and the fed minutes is they are very back word -- equities and credit. they were not pricing much backward-looking. we are not going to get a lot of downside risk at all and we are still in the process of that information for the fed to make adjustment coming through. decisions on this week, even if we get some movement in the cpi lisa: talking about valuations, i wanted to end on the idea of or ppi. large-cap tech stocks that seem we might get some initial tariff to lead the way. reaction in that. i would point you to friday's some of the damage has been pretty impressive. michigan sentiment report instead. see how americans are reacting to the latest news. it will have data through apple has lost almost $640 billion of market capitalization liberation day and it will have since the end of the day on april 2. about 19% of its value. do you see big cap tech leading the tariff impact on inflation expectations. so, friday, look for the again global stocks given the university of michigan. fact that we are seemingly in a then next week we go to new world order? wednesday we get retail sales. peter: it is an interesting point. that will be important to see if people have started to cut back when we came into this year our whether or not there are strategy was very much about tariffs. that could influence the fed. diversification, geographically the fed is going to have to wait and see at this point whether given the huge dominance that the u.s. market had sustained inflation or growth take until that point, but also precedence under tariffs or across sectors and factors.

whether we even have tariffs. we emphasize the risk that the i would not expect a whole lot out of this week to move a lot u.s. market had become so of fed thinking. dominated and concentrated in a jonathan: the same debate just small number of super-large tech continues. companies. fed officials going around, worried about upside risk to of course, what we've seen since inflation, potentially downside risk to growth. the beginning of this year, aside from the slowdown in growth expectations, is that some of the big tech stocks have nancy lazar saying, easing aggressively would cause a been hit as new competition has re-acceleration in 2026. emerged, particularly from china. as of now after the tariff to be clear, these companies are inflation hits the economy in 2025 inflation is likely to slow profitable, with strong balance sheets and cash generative and in 2026. nancy joins us for more. in that sense defensive. we have done work comparing the are you suggesting to just wait then? nancy: i would prefer the fed be technology assent that we have slow, because what you don't seen in recent years to the want to do is repeat will be did period of the tech bubble a in 2021, which is east in a quarter of a century ago. there are major differences in temporary shock and create too terms of valuation. the large companies are nowhere much liquidity. i don't like the fact that he near the bubble-type valuations that we saw a quarter of a used the word transitory can. jonathan: not many people did. century ago around the internet, bob michele on the program with us sunday evening as we waited or in other bubble periods in for equity futures to open on

the s&p 500, he said maybe this history like japan in the late fed could not wait until the next meeting. 1980's. the next meeting is the first the tech sector will be an week of may. important cornerstone of the can they wait that long? nancy: this is not an recovery in equity markets as it interest-rate problem. comes through. the lagged effects of a fed many of the biggest companies easing cycle are still going to are relatively defensive in help the economy once terms of their balance sheets, uncertainty can come down and these price shocks can fade. and that is an important factor to bear in mind. jon: peter oppenheimer of as we move into the back half of the year they could already help goldman sachs, thank you. to support growth. later rather than sooner would be healthier for the long run inflation outlook. lisa: what is the historic a bit of stability, equity futures on the s&p are positive by 1.2%. analog to now, where we can get with an update, here is dani burger. dani: u.s. small business some sense of how inflation has behaved with tariffs at a time optimism fell last month i the where potentially you could also see some sort of demand shock? most since june of 2022. nancy: you can go back to 2018, business owners expecting better where you had two industries conditions the next six months that have big tariffs on them, fell 16 percentage point, the both waffen -- both washing steepest slide since december 2020. machines and furniture. you saw an increase in price it is trump policy leading to immediately and then a decline in unit sales immediately. increased uncertainty. over the next year you started billionaire ken griffin says that president trump's latest see -- started to see prices tariffs are a huge policy decline, and also the substitution effect. mistake and pay tax on families it would be best for the fed to

be patient as we go through this that will increase costs for price shock. everyday items. i see a dip in the economy. griffin, who is a republican maybe 1% gdp growth as we move mega donor, urged people to reach out to trump to reconsider into the second and third quarter. his tariff policy. i the back half, fourth quarter, apple, the threat of new tariffs end of 2026 you could see an caused a surge of customers incremental improvement in the economy. the fed doesn't have to do much to get that. lisa: some people would argue a panic-buying iphones because of concerns ofjon: more from dani e base case now of recession, including j.p. morgan. why should the fed look through that, given what the surveys are showing and given the fact that companies may come out and give hour. next, tariff confusion. guidance other than levi's, but >> would you be open to a pause may give guidance to that effect? nancy: they may incrementally in tariffs to allow for negotiation? ease, but the fed has already pres. trump: we are not looking at that. we have many countries coming to eased. our models were optimistic for 2025, ceiling healing -- seeing negotiate deals with us, fair deals. jon: live from new york city healing in the economy. this morning, good morning. now oil prices are down. ♪ there are basic supports for the economy. this is a one time price shock and to ease too aggressively risk jonathan: jonathan:

creating inflation next year. let's talk about those risks of it not being a one-time price shock. what are those sources of inflation that would worry you? nancy: wage inflation has been sticky over the last year. i whichever -- average hourly earnings have stopped slowing, which told us inflation was again sticky in 2024. i think the fed should heed that. you have also seen it in some of the price measures. where you have seen the ism price measures increase pretty much across the board within the regional fed measure. -honey... -but the gains are pumping! jonathan: neil dutta has made a dad, is mommy a "finance bro?" similar point about the risk of she switched careers to make money for your weddings. second round effects. oooh the asian market is blowing up! he talks about the anxiety of the consumers right now and you see it in the reports, in the hey who wants shots, huh?! -shots?? -of milk. surveys. they are anxious about higher the right money moves aren't as aggressive as you think. unemployment. if that is the case the idea that they are going to bid up wages anytime soon is difficult to get your head around. lisa: which is a reason why people are not looking to that kind of inflation. are you arguing that potentially a fed rate cut of even 50 basis points could engineer that confidence at a time where this

talk is not coming from elsewhere? nancy: i think the met -- the next major issue for the markets are going to be what inflation does in april and may. you are going to get a price shock, a big price increase from the tariffs that are being put in place. we think cpi could accelerate you need t. her around a 5% quarter to i need indeed. indeed you do. quarter annualized run rate. when you sponsor a job on indeed, that is going to take consumer it's easier for talented candidates to find it. spending down and we are watching our consumer confidence which makes it easier for you to hire them. survey. we think the fed can ease, they visit indeed.com/hire just cannot ease aggressively. they have already been an easing ♪ three little birds ♪ cycle. ♪♪ they have pulled back on qt, so let's not get carried away, because there are longer-term ♪♪ supports for the economy as we come out of this. and which hopefully is by the ♪♪ fourth quarter of this year. lisa: the couple of weeks ago discovering innovation today, helps drive growth tomorrow. people were talking about the sequencing of the policies coming out of this as a leading global asset manager, ministrations. the difficult stuff came first. pgim has established a track record of the tariffs, some of the helping investors capitalize on growth opportunities. negative growth shocks. and then the progrowth shocks come later on. pgim investments. shaping tomorrow, today. how much of people overlooking

that as a potential catalyst for some growth? frankly, potentially even inflation, and discounting how much of an upward stimulus that could be on the economy? nancy: i think that is a significant point. i started in summer 1981 and it jon: saying that it was like was chaos in the summer of 1981. volcker was not sure if he was firing a bazooka into the dark is what it has been like over going to be successful. reagan similarly, was going to the past few days. the s&p 500 bouncing back, take some pain allowing volcker positive by 1%. to do what he wanted to do. the gnostic up 0.8% -- the he fired people. i'm not can pairing reagan to nasdaq up zero point 8%. trump, i'm just saying it is tariff confusion. unusual for an administration. >> would you be up to a pause in the long-term positives are positive. to have on shoring is an tariffs to allow for incredible positive. there are people who want to negotiation? pres. trump: we are not looking work in factories. at that. we have many countries looking clarity on the tax reform. to negotiate deals with us, fair the regulation. a smaller government. deals. in certain cases, they will be there are some longer-term positives, if we can potentially paying substantial tariffs. they don't want to be in the hands of the chinese. negotiate some with these tariffs. i'm also for free trade. the chinese have turned out to be, really, not very good people i'm also for fair trade. if we come out of this turmoil with some fairer trade, then that are with us or with us.

yes, you can add that to the list of positives for 2025. we cannot be taken advantage of any longer. jon: president trump offering jonathan: i share that sentiment almost entirely. i think this has been a problem for a long time. i think this administration led by this president has done a little clarity on what he is trim and a job of articulating seeking from trading partners in that problem. exchange for lower tariffs. the president has done it going the president leaving the door open for talks but threatening all the way back to the 1980's. to impose an additional 50% import tax on china. this is about whether this is the right policy executed in the right way to remedy this tyler: set to kick in later situation. i think there are two separate tonight, is there space to conversations. you have to be knowledge of the negotiate or not? former and have a debate about the latter. tyler: good morning. that is the struggle a lot of big questions about what the white house is looking for. people are seeming to have at the moment over the past week or the administration seems to be so. lisa: i'm so glad you framed it signaling that it will take time to negotiate as president trump that way. rolls out a blanket pause. because a lot of people do agree that there are some issues, some problems that are very correctly identified by the i caught up with treasury administration. it is execution risk. secretary scott bessent yesterday and asked if we can it is this question of the expect any deals ahead of uncertainty itself that does tomorrow. he said, likely not. have a prolonged period of time when i asked if the white house and how it is a key feature in was considering lowering the 10% the way that maybe these deals might be being negotiated or tariff floor in place come he said that everything is on the not, or maybe this is simply table. policy. if everything is on the table, jonathan: nancy lazar of piper

what does it take to clinch a sandler. deal? it's becoming increasingly clear equities at the moment on the that it will take more than just s&p 500 higher by 2.4%. trying to work out this freeway lowering tariff barriers. take yesterday. game of chicken. the israeli prime minister the this is what marta norton of first to come face-to-face with empower had to say. president trump. he pledged that israel would it may be the only game in town when it comes to pulling the eliminate tariffs and israel's market out of its current trade surplus with the u.s. spiral. marta joins us now for more. president trump said that that welcome to the program. may not be enough, and that was let's talk about that trump put. considered to be the more does it exist? friendly approach. china and a statement earlier marta: i think that is what we today had tough words while are wrestling with. saying that they would prefer it is hard to put a probability dialogue to resolve disputes, on whether the trump put they did vowed to fight to the end as the rhetoric continues to actually exists. it is hard to know whether we escalate. are going to see serious negotiations around these tariffs. jon, i will mention one other important piece of reporting from bloomberg news yesterday. our concern heading into liberation day is that the market was not really pricing in the worst case around what tariffs could be. as we look forward now there is according to sources familiar, a bit more pricing in of the it appears that there are no established systems in place for range of outcomes, but still companies and countries like to that worst-case remains elusive, register complaints at commerce, ustr, or nec, further raising especially if the trump put confusion. annmarie: trump said yesterday remains elusive. jonathan: we are swinging from,

is it a negotiation, too, are the offer from ursula von der these the rules of the game, leyen wasn't enough to reset transatlantic relationships. from day-to-day. how much damage do we do in how are the europeans approaching washington now? between as we try to figure this oliver: part of the problem is out over the coming weeks and months? marta: i think in the near term that they have no idea what is a lot of the damage is happening enough to reset the trading and not necessarily likely to relationship, as you were alluding to. get more destructive. in the sense that we are already the european trade ministers assembled in luxembourg to get a in a very heightened, uncertain period. collective response, the first to the latest round of tariffs if we see these retaliatory tariffs from china, that raises from the trump administration. they have plan a and plan b. the stakes a bit. but i think the question is more plan a is a negotiated outcome on the longer-term outlook for where earnings land here. i think the markets can sustain a period of volatility, but if we see this terrified drag on to the end of tariffs, what everyone in europe would like to into the next quarter i think we see happen. when you speak to the trade ministers and you say, you get are looking at an environment we the impression that the trump could see the earnings growth administration is in any mood to talk? the answer is no. that people expected for 2025 what nontrade barriers he would come out altogether. lisa: can you take a step back there is a question right now like to be reduced to get a deal? about reordering the structure of public trade. these are lofty goals at a time no. plan b is a full throated where people have counted on the classic 60/40 portfolio. retaliation that includes

tariffs, potential taxes on services and regulations on tech do people have to rethink their companies and that is the plan longer-term allocations given slowly being assembled. that there are some pretty what european policymakers are massive changes that may be doing now, yesterday the word of underway? the day was de-escalation. marta: it is a really important they want to create as much runway as possible to have question. what i come back to in this negotiations with the trump environment, this is very different than 2022. administration. we understand we will get a in 2022 we could say measure of retaliatory tariffs diversification was of no value on aluminum and steel. whatsoever. that will be fairly modest, but especially from the stock/bond they want to give themselves perspective. today i know we are not getting space to communicate with an administration that so far seems that room fight of long-term to have no interest in speaking bonds that we would like to see, to them. jon: jon lieber of eurasia group but we are seeing bonds hold up in a way they did not in 2022. we are also getting that value joins us now. from a sector diversification. vietnam made an offer. consumer staples behaving very rejected. differently than what we are the eu reportedly made an offer. seeing from technology. rejected. and we are getting you have an idea of what the diversification geographically. administration would like to in terms of how we are seeing see? jon l.: manufacturing coming other markets respond to this environment. i think we could argue in some back to the united states. they're not interested in offers ways that the 60/40 or diversified approach is being or countries lowering trade reinforced in a way in today's barriers immediately. they want a long-term plan to environment it has not been in recent years. lisa: yesterday someone made the

send a signal to the market that the u.s. is planning to source from the u.s. argument that actually indexes are going to have less import that means that they have to right now than they have over commit to the tariff regime and that's a bad sign for countries the past decade or so. that want to do deals and a really bad sign for global simple because specific companies are going to handle growth and the u.s. economic outlook. each of the potential bruising annmarie: how long would that -- regime changes differently. apple is a perfect example, how actually take? jon l.: years. they are in the crosshairs i don't think anyone thinks it will happen overnight. versus a microsoft that might not be as exposed. you have 80 years of supply how do you counter that? chain deepening around the globe that the trump administration is the idea that the indexing era trying to dismantle piece by might be entering a new territory? marta: that is a powerful point, piece. we do think that there is some room for the tariff barriers to and i would argue the come down. idiosyncratic conversation you are raising in terms of how these different companies behave you remember trump's campaign, in this tariff era is something he campaigned on 60% tariffs on china and 10% on the rest of the to watch. i would also argue it is the market cap-weighted affect that set us up for the kind of world. we are currently above that, so there is a lot of space for destructive price action we have individual tariffs on individual seen so far in 2025. countries to move down. i think that the 10% for remains the technology coming out, in place and this will be a long process as other countries try to figure out who they can talk accounting for 30 the s&p 500. to, what they can offer the u.s. the mag seven accounting for one third of the s&p 500.

the u.s. is giving no signals of people were concentrated in a way they did not plan to be on where relief will come from, but an active basis just by eventually i don't think the passively tracking the market. i think we are seeing the risk donald trump or his political coalition can handle the kind of of that unfold in today's political and economic pain that environment and that is one of the reasons you would call for will follow from these tariffs, may be looking to some of these so they are likely to come down other ways to index the market. at some point, but not this month, maybe not this quarter. equal weight it is an extreme response to that, but there are we could be in for a long period of pain. different ways you can add annmarie: the first country to index-like exposure without having that market cap-weighted get to the negotiating table, exposure dominating your portfolios. jonathan: appreciate your take. japan, yesterday the treasury marta norton there of empower. secretary that he and jamieson greer, the ambassador of ustr, will be at the table having that this could change how people negotiation. invest. this is the system change we are is that a sign that if you want trying to get our teeth into. to get a deal done you have to we focus for good reason on what go through the treasury department? jon l.: not necessarily. might happen to the cycle. potentially off the back of scott bessent is only one man these changes. lisa: i love the point you made, and he has a team, but there are a lot of countries that have to be negotiated with.the raising stephen miron's point he made yesterday that essentially ustr has typically taken the lead in these negotiations. they are looking to restructure things. that the strength of the dollar was a bug, not necessarily a the japanese really wanted scott feature. the trade deficit and some of bessent to be the lead the structural issues, that that negotiator. they think that it is a sign of

might change. their importance in the u.s. trade relationship. if that changes, how does that shift the way people think about i think that there are asset allocation? diplomatic reasons to make the also, we have a whole lot more debt. treasury secretary the face of do we think about how our that particular negotiation, but response is if there is some i expect going forward the ustr sort of recession in the near has a bigger role. term? annmarie: we had a statement my head is spinning. it is hard to wrap your head from the commerce ministry in around, so sometimes it is good beijing talking about that if to say, everything's should sit the u.s. insists on his own way china will fight until the end. -- should stay the same. jonathan: america has not -- not they are calling for a to resolve the disputes. wrestled with its debt for a long time. yes, it comes with a bid for the how what point do you see beijing and washington having this discussion? u.s. dollar. jon l.: i'm not sure. i understand that. but that is a delicate balance. try and address one, you might it's difficult to say right now. upset the other. you look at the tit-for-tat i'm not sure that is something you want to do as you look to escalatory cycle of what's extend tax cuts in the not too happening, and i think that there's not a lot of deal space. distant lisa: future. lisa:if you are the major trade i think that the chinese are partner of the world and people probably correctly assessing need dollars to transact trade. that they can withstand -- the that means they want to invest in dollars to offset anything that happens to them. stability of the regime, the leadership, can withstand more if there is not that incentive, how do you have the privilege to disruption than the united states can, given how we have act recklessly in the same kind of way with the deficit that is elections here. at the highest level per gdp in history? jonathan: it is a delicate

trump's popularity will certainly go down and that will balance. start to cost him on capitol let's get you an update on stories. hill, it will cost him in the with your bloomberg brief, here midterms next year, and it will is dani burger. dani: can griffins has president cost republicans in 2028 when the elections happen. trump's tariffs are huge policy if i am the chinese, i think mistake and attacks on families that i have a lot of ability to that will increase costs for withstand this. everyday items. if an, who is a republican mega donor, urged people to reach out to trump to get him to they have been preparing for reconsider his tariff policy. tariffs for a long time and they seem to be comfortable retaliating against the u.s. with the end result of weakening elsewhere new york city's the u.s. economy and trump. congestion pricing program is likely to remain in place for the next several months. i think that will happen and i the mt and trump administration think that the chinese have the have agreed to a timeline that would keep congestion pricing ability to remain dug in and that doesn't leave a lot of deal tolls through late october as space. jon: senator cruz going into the most parties await a ruling. that according to a court document. weekend started to push back as in sports the following -- the florida gators other 2025 ncaa he got company on capitol hill. annmarie: he's talking about the men's tournament champions after fact that he thinks that this beating houston in a thrilling will be potentially damage when championship game. it comes to the economic the gators came back from a pressures are american families. then, he is of course thinking 12-point second-half deficit, taking the lead in the final minute after trailing for most about 2026 and the midterms. of the game. he said that if the damage it is florida's third-ever title and its first since 2007. continues there will be a bloodbath. today will be interesting. that is your bloomberg brief.

you want to know about other jonathan: up next, we will set people joining him? you up for the day ahead. let's see with the questions look like to jamieson greer who from new york city, you are will be on capitol hill in front watching bloomberg tv. of the senate finance committee ♪ trying to explain the mixed messages that we are hearing out of the white house. jon: and the methodology used to put major tariffs on company set to kick in overnight. lisa: which has defied a lot of logic and raised the question is it ultimately the trade deficit and formula that some places may not be able to complete? jon: next on the program, barclays on why investors are in max bearish dollar territory. that conversation, next. ♪

♪ at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today. jonathan: the opening bell, 39 minutes away. equity futures up by more than 2% on the s&p. on the russell, up by 2.5 percent. your calendar for the next few days looks like this. at 3:00 p.m., the president signing an executive order. at midnight supercold terrace kicking in. on wednesday, delta earnings just around the corner. thursday, cpi plus another round of jobless claims. on friday, ppi and university of

michigan sentiment. plus bank returns. let's head to washington, d.c. and catch up with tyler kendall. welcome back to the program. there has been -- and i know this phrase gets derided -- a shift in tone, is it fair to say in the past 24 hours? jonathan: so many downgrades to equities in the past few days. blackrock has joined the party. "the one thing about what we have been wrestling with in recent days is whether we are bearish enough." live from new york city, welcome to the program. off the back of a three-day losing streak, up by 1.3% on the s&p. nasdaq up by one full percentage point. dani: the best performing stocks in the premarket are moving not

just because of tariffs, but health insuran -- insurers. the trump administration offering bigger payouts via medicare to private insurers to the two and $5 billion. -- $25 billion. all of them rallying. broadcom putting out a buyback into the market. the shares of nearly 3%. a semiconductor company, very exposed to international supply chains and apple. the company saying we are confident. after a 50% slide, list -- 15% slide, the stock a lot cheaper to buy back. a sense of earnings after trump announced tariffs. you can see by the rally what they said was interesting. 13% higher, saying they are keeping their forecast for 20

25 because there's so much expectations for downgrades. this assumes no deterioration and the macroeconomic environment. they don't know how to incorporate tariffs and they have assembled the task force to try to do so. jonathan: that is a major assumption. can you imagine the rest of the companies coming out on friday, we don't assume any change to the macroenvironment? lisa: that is not a guidance and with the people wondering how clueless they actually are given the fact every economist has downgraded their expectations to growth. how can that not affect what consumers are going to end of doing? i would like to see guidance. jonathan: china vowing to fight to the end as president trump an additional 50% tariff. the blunt reaction from the chinese ministry of commerce suggesting they will resist negotiation. annmarie: you are seeing the tit for tat take place when it comes to beijing.

it comes with a warning that if they do not withdraw the 34% increase on april 10, the was comes into effect on april 9, it means the levy on china for some products will be north of 100%. that is why it's interesting to hear the likes of jamieson greer what the president has to say when it comes to beijing specifically. jonathan: we are slowly coming together. it is up to the president, one man deciding here. if you look at what the president said about doubling down on china, followed by secretary bessent who posted the following, "china has isolated to isolate itself. over 50 countries have responded openly. we look forward to meaningful negotiations with them." and the op-ed from peter navarro. there's a line of the in that said we will want to hear from countries including cambodia, mexico, and vietnam, and we will stop allowing china by shipping

exports for your country. they were coming together to isolate china and open the door to everyone else. that seems to be the offramp coming together. lisa: what this ultimately eight decoupling -- a more concrete decoupling look like between the u.s. and china? if there is no offramp and you have china doubling down, at what point can you maintain these international businesses? that is what i'm watching apple shares. that is one stock that is massive that really depends on the chinese economy and production. annmarie: i'm glad you mentioned vietnam and cambodia. xi jinping is heading there. this is where chinese manufacturers had went to try to avoid any retaliation, seeing the writing of the wall -- on the wall. they are getting hit with tariffs because trump wants to send a message to china and chinese manufacturers. jonathan: these are the contours

of an offramp that might be taken or built. "the fate of the market is in the hands of one individual who can unilaterally ease or deepen the shock." ken griffin calling president trump's tariffs a huge policy mistakes. he added bringing back u.s. jobs is a 20-year dream, not something achieved in 20 weeks. lisa: this goes to strategy and execution risk. how do you do that if you have a policy that goes on overnight? ken griffin is a super donor for republican congress members and the republican presidency. if he's being so vocal about this alongside bill ackman and a host of other business leaders, at what point is i get peoples attention? -- does that get peoples attention? jonathan: the wall street journal reporting it's a stopgap as the tech giant tries to negotiate with president trump for an exemption.

look back to the interview with commerce secretary howard lutnick before he became the commerce secretary and campaign season and said there will be no exemptions. i wonder how different things would be for apple this time around. lisa: it seems they are more exposed than previously because of what we are talking about with the tit for tat between the u.s. and china. they are doubly exposed. their sales in china and manufacturing in china. there is a meme of people working on iphones. you put these together, how long does it take to move some production chains and how expensive is it? apple is trying to get ahead of it in some capacity. jonathan: the only people affording iphones are the people working on wall street because they will be about $3500. lisa: it would take 10 years to build that out in the u.s. for apple, it's a time when they

don't have the time to execute. annmarie: i imagine that $3500 iphone that could be the future that tim cook says, do you want americans paying for this? they will not pay for this and it will be backlash on you politically. i imagine that's one of the chips he will use. howard lutnick said no carveouts, no exemptions. jonathan: the stores are packed with stockpiled iphones. getting ready to sell them on the black market. lisa: maybe our kids should be on the phones less. jonathan: nice. lisa: i went 20 people get used too a little rough around the edges -- at what point do people get used to a little rough around the edges? jonathan: apple up by 1.4%. the dollar under pressure. skyler koning writing, "our sentiment index is a maximum

bearish territory. historically, this has been a fairly reliable reversal sign." i wonder how different this time might be. skyler: it is interesting. the reaction to tariffs was unexpected for the dollar. u.s. tariffs should boost the dollar. i think is a logical expo nation in that our import substitution model shows dollar strength doesn't grow on u.s. tariffs but dollar weakness if volterra countries respond -- if all tariff countries respond in kind. europe only has new tariffs on exports to the u.s. we are reliant on how the economy -- u.s. tariffs. the second point has to do with growth and confidence. there is concern over u.s. policy. tariffs are not wrong of there's an existing distortion. but sweeping tariffs with little

nuance are suboptimal and raise recession odds. u.s. growth was already slowing with confidence under pressure. they are u.s. growth negative, whether they stay in place across the board or are renegotiated in some places or not. if there is some still some hope there are deals and we don't know where those deals would be yet, that reflects why you have this dollar downside. it is hard to maintain an environment of slowing global growth. jonathan: we discussed not just the shock to the cycle but a potential shock to the system. we will catch up with stephen miran later at the white house in an hour. one thing he said is that the security umbrella united states offer the world with reserve assets to facilitate trade, he's making the point that is distorting the u.s. dollar. there seems to be a pushback against the system. is that something we can fully

internalize now? in coming weeks and months and years how are you thinking about those changes? skyler: because we have these worries over u.s. policy that have brought into question the role of the u.s. and its the role of the dollar and the global system. in the market narrative away from u.s. assets, that puts pressure on the dollar. we think it is too early to make that call. for money to move the foreign market to need some kind of improved asset returns, which seems like a very high bar with global growth slowing. in china, margins are mid to high single digits. tariffs the was imposing could wipe that out if you passed a significant portion of that onto the consumer. bonds are relatively attractive. this is not the first time the market has falsely gotten excited about this narrative and it was not sustainable. we fed more than a decade of

policy that is very much favored the u.s. and it's hard to undo that. maybe just finishing by saying if it is the start of a massive rotation, that is something that will take a decade to play out. there is still time to position forward and you don't need to take on the early signaling case it is falls. that false -- in case it is false. that is kind of our base case in terms of china. one of the places the rhetoric has been clear. tariffs have gone into place. they have only escalated since trump has been in office. authorities have been artificially supporting the currency. current rates imply it should be much higher than current levels. there is a view they will not let the currency go because they are worried about capital flight, which will leave if the growth the teary rates significantly -- deteriorates

significant. they can either take the hit or let the currency go. they have been unwilling to do large-scale stimulus at least to spend again. it is more likely they let the currency go support the export market. our target is around 750. lisa: there's a question how europe will respond. we talked about the haven status and how fundamental it is to the system. in europe, they are planning to do fiscal stimulus and the could be other offsets regardless of whether there is a deal struck. how do you calculate the fiscal impulse into when the euro could strengthen in a more material way? skyler: the euro has benefited from the fact it is a liquid alternative to the dollar. it is more trading off of u.s. negativity more than perverse positives.

now there is a tug-of-war. we do expect -- that is definitely net. we have seen large-scale quantifying event. 1% of gdp in fiscal expansion is around 35 basis points. you can take the beta between yields and fx. -- in fx. we are waiting on the size of the stimulus to find out where the value is. you need to consider there are other components. that will put downward pressure on the euro. you need big fiscal stimulus to offset the tariffs we have seen. one measure says the fiscal from germany already is around 40 basis points european growth but a 5% tariff takes away 40%.

jonathan: we have to leave it there. skyler koning, thank you. if your equity market is getting hammered, you can negotiate or intervene. the stabilization fund deciding to support the stock market. intervention is one option. negotiating is another. japan, look at the nikkei overnight. up by six percentage points at the close this morning. lisa: there were some conciliatory language from scott bessent sandy had productive conversations with the japanese and president trump he said he did feel good about his conversation with the prime minister. it does raise the question and goes back to which countries is the administration willing to negotiate with. japan, sure. mexico and canada arguing summer. where does europe get left -- are getting somewhere. where does europe get left with cars and meat and cheese?

jonathan: a rock and a hard place with china and the united states. equity futures up on the s&p. here is dani burger. dani: china urging a fast retailers not to move production of the country. the ministry of commerce has discouraged shein and other countries are moving to other countries in reaction to president trump's tariffs. larry fink said most ceos think the u.s. is already in a recession. he warned stocks could keep falling as president trump's tariff policies destabilize the economy. he said in the long run this is more of a buying opportunity that it is a selling opportunity. new york city's congestion pricing program is likely to remain in place for several months. they have agreed to a timely that would keep congestion pricing tolls through late

october. that is the bloomberg brief. jonathan: thank you. next, repressing the fed put. >> if we have something that is both deteriorating economic growth and driving up the prices, that is to say something that is stagflationy, that is not a genetic response. jonathan: reaction from earl davis. you are watching bloomberg tv. ♪

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upside down. communist china on x. the embassy posting the video arguing against tariffs in the late 1980's. can you get your head around that? lisa: the trade system benefits china and they would like to preserve it. in the u.s., who would also like to preserve it because businesses run not. jonathan: they want the walls up at home and down everywhere else? lisa: this will be the crux of why this is so difficult to negotiate. annmarie: ed take advantage of the european union to forge close relationships. they need a market the dump on. the european union will say we need fresh markets as well. we can't go to the u.s., we have to go to beijing. jonathan: equity futures on the s&p positive by 1.4%, bouncing back by 1.2% on the nasdaq. what happened in the bond market

yesterday? we will talk about that in a moment. we are down by two basis points on the 10-year. under surveillance, repricing the fed put. >> our job is to look at the hard data. if we have something that is both deteriorating economic growth and driving up the prices, that is to say something that is stagflationary, there is not a generic answer in response to that. it depends on how much it drives up prices, how long it will last, and how much it reduces growth. jonathan: fed officials not rushing in to support the market, facing down downside risk to growth in upside risk to inflation. earl davis writing, "the fed will easily 50 basis points at or before the next fomc." that one is punchy. some people agree with you.

bob michele made the same point on sunday evening. what gives you the confidence they will do something different to what they are saying? earl: we believe growth and inflation are the major discussion points at the fed. you are hearing them debating both. we had one more point to the decision matrix. the sentiment of the populace. the reason why we put that in, the u.s. is a consumer economy. you don't get spending unless you have certainty. if we don't have certainty on policy or in regards to the retaliatory response or the fiscal side, you get it from the monetary policy side. we think the combination of growth, which will definitely be lower, plus consumer sentiment getting more fair and lower -- favorable and lower pushes towards easing. the reason why we feel 50 basis points of easing, it was heading into liberation day. without last week would be the week of peak uncertainty.

it was not. because of that we had not hit peak uncertainty yet. if and when the fatty goes -- fed goes, it will be by 50. lisa: 30-year yields widening out and rising at the fastest pace going back to the pandemic. if the fed does move, maybe the reaction and markets will not be what they are looking for. earl: i think you can look at it that way. i don't look at it that way as an active manager. the reason i don't is you have to always understand who is your marginal buyer or seller in the market. they are the ones that set the price. i'm not a believer the price or yield is a reflection of market expectations. it is a reflection of the marginal buyer or seller. the next question you have to ask is understanding to the marginal buyers and sellers are. yesterday was an uneconomic seller. they don't care about prices, don't care about losses. there are tw typeso -- two

types. someone who has a lot of leverage in the market. they just sell to get out of the position. the other is the possibility of selling. my default is that it was the first. not foreign selling but the first. what is the difference? if it is a hedge fund manager and the position is being closed, the persistence -- you can have a quick snapback. if it is foreign selling, you could see continued. i do believe the fed would step in because the plumbing of the system is no longer working. they will step in to stabilize the plumbing and have proper market functioning. it is one of their roles. we believe in u.s. 10s at a buying level. we see the longer-term range. lisa: this is a huge bet on the

fed put. maybe the fed has learned a lesson from the previous times that it has not hiked rates are has not cut rates but is underestimating inflation consistently. earl: it's almost like a triage. you have to deal with the most deadly sentiment the time. to say the longer-term impact will be beneficial. there is a risk. when do bonds really sell of f? the fed does 50 and does not introduce qe again, 10 years and 30 years selloff because of risks of inflation. if they do qe, it maintains it for a while. the objective of doing this, cutting 50, doing qe, is to move money off the sidelines. $7 trillion plus in money markets. move it back into investments and growth and you so that through qe from driving real yields into the negatives. i think that will be the game

plan from a medium-term perspective to get growth going and they don't have to ease as much following that. it is weary in is not easy. given my history, 30 years of an active manager in the market, this is the mechanisms i have seen in the past and what my expectation is right now. jonathan: appreciate your opinion on it. earl davis on the bond market. those moves got the attention of all of us and for you sitting at home. we have been talking about what would happen if equities risk gap to lower but bond yields started to climb. does that speak to foreign selling? there one reason you could take some comfort it was not happening yesterday. the u.s. dollar. did not see the accompanying dollar weakness. lisa: that is why people say that this is just margin calls for banks de-risking. jonathan: coming up next, julian emanuel, alex nowrasteh, daan struyven, and stephen miran, the

chair of the white house counsel of economic advisors. ♪

>> when you look at these moves, we describe it as a bang and a whimper. >> we went from stagflation in terms of people thinking recession in about two seconds. >> it is hard to avoid further moves down in the market. >> retaliation may not be just relating to tariffs. it could be investment in u.s. assets. >> we are taking a tremendous

about of near-term painful medicine. >> this is "bloomberg surveillance." jonathan: live from new york city, good morning. the second hour of "bloomberg surveillance" starts with equity futures on the s&p near session highs. it follows a three-day losing streak. higher by 1.3% on the nasdaq 100. one minute past midnight, 20% tariffs on europe, 24% on japan. an additional 50% on china. equities elevated. how is your day ahead? is there space to negotiate here or are these the rules of the game? the pendulum swings between one option to the next day-to-day. maybe there was a door opening to negotiate. lisa: it is because of the rhetoric and headlines. there has been a shift in town.

that is what people are keying in on. scott bessent talking about how there are negotiations and things beyond tariffs. peter navarro saying absolutely not. mixed messages is the course. there is a bit of a township. jonathan: but reflect on the conversation annmarie had on april 2 when the tariffs were announced. we felt like secretary bessent was not in the room. he sounded frustrated. now we're hearing reports in the last one for hours from politico, secretary bessent is back in the room and his strategies to get the president to suggest he is open to negotiations. annmarie: following the announcement the vision that treasury secretary had was shut down. the real tariff hawks won out in the beginning. potentially the president doesn't like what he is seeing and other treasury secretary will have a hand in this and he

will start from a maximalist position but negotiate towards lower tariff rates. something interesting. on the way down to palm beach, the president was behind howard lutnick. on the way back from palm beach to washington, d.c., who was standing behind the president? scott bessent. jonathan: a subtle shift but it can shift back. the fate of the equity market is in the hands of one individual who can unilaterally ease or deepen the shock. it's in the hands of the president. lisa: do we think we will get a resolution by midnight? you are shaking your head, annmarie. the answer is no. the answer is how do you plan at a time when you see whipsaw's of $2.5 trillion in 15 minutes? it is difficult if you're managing money to have any kind of strategy if it moves on a headline that may or may not be justified. jonathan: what a start to the week. equity futures up by 1.5%.

coming up, julian emanuel of evercore as investors are bracing for sweeping tariffs. later, the white house counsel of economic advisors stephen miran joins us. stocks pushing higher as markets look for signs of policy clarity. julian emanuel cutting the year-end price target on the s&p to 5600. "prolonged uncertainty has raised asset volatility, damaged confidence and increase the odds soft data eventually infects the hard." good morning. why are you so bullish? even with the price target cut, where does the bullishness come from? julian: an expectation that if we look at the last couple of weeks, we have arrived at the point of maximum uncertainty.

it is like whether you think about it in terms of market volatility, uncertainty measures, tariff rates which is the crux of where the uncertainty is from, all these things really are not sustainable in the long term because what ends up happening is you get the recession scenario. i think as an investor you have to believe a couple of things here. you really have to believe uncertainty is arriving at peak and you have to believe -- we do -- that washington has no desire to precipitate a recession. precipitating a recession has a lot of other knock on unintended consequences. jonathan: none of us can get into the mind of the president. no idea what he's thinking about the tariffs kicking in overnight. what is the forward multiple on the s&p right now? julian: well over 20 still. jonathan: does that speak to

maximum uncertainty? julian: it does not. we have maintained this for two years now and it has worked reasonably well in the last two years. valuation alone does not end a market cycle. what ends the market cycle is an oncoming recession, and uncooperative fed, or bond yields moving higher. if i think about the last couple weeks, there have been two significant wins.oil prices are a lot lower than i think anyone of us would have expected given the fact that russia and ukraine is still in escalation mode and the middle east is in escalation mode for the most part. and bond yields -- jonathan: i was just thinking tick, tick, tick. no willingness to step in. what is the circuit breaker? 7 you have to differentiate -- julian: you have to

differentiate between the fed he will step in and the fed that will say inflation, which in our view is in the mid-threes, i don't think he will remove the word transitory. our research shows essentially the real threat is less inflation. it is the one time hit for wherever we go. our operating you is that tariffs will actually settle in around 15% to 16% on a global-weighted basis by the end of the third quarter. that is how investors can live with a going forward. the real threat is the new tariff regime slowing growth even more. lisa: is a complacent to view this as business as usual and not consider structural changes that is the goal of this administration that could reorder trade and cause decoupling between the u.s. and china? julian: again, and 80 days you

are trying to -- in 80 days you are trying to reorder a system that took 80 years to build. to call it business as usual would be someone who did not take defensive measures to his or her portfolio in the last number weeks. the question is, are we going to get -- i think the secretary was right and proper in making the point that there needs to be more singing from the same hymn sheet and openness to cut deals. lisa: one concern yesterday was the bond market. we were talking about it. people called me. what are you hearing about this? it spooked people. the 30 selloff and 30-year bonds going back to the pandemic maybe because of disruption or foreign selling. at what point is that type of

disruption spook you and your bullish call for gains by the end of the year? julian: at this level yields are perfectly reasonable. part of what we are saying is that asset price volatility all over the place is much larger. if we are ranging between 3.9% and 4.4% in the 10-year yield, we will live with the volatility . on balance, that is a rate for forward discounting of shareprice multiples that we can live wiht. what was -- with. we do not buy it was international investors dumping bonds. logically, given the moves we have had in the last several weeks it is asset allocation. lisa: the idea that one headline can drive to $.5 trillion of value destruction and creation

over a blip, -- $2.5 trillion of value, that is not why people go to the u.s. on a risk-adjusted basis that undermines the whole premise of the u.s. market. why does that not shake your confidence there can be the same kind of dynamic going over it of some sort of american market exceptionalism? julian: you are right. that drives home the point. we have to have -- i wouldn't call it offense. we have to understand with the path forward could look like to be able to deal with and make assumptions and make capital allocation decisions, whether you are an investor or corporate. that is why the emerging policy has to have a direction of travel to where we have maxed out on uncertainty, maxed out on potential tariffs, and we are going to get in the art of the deal mode.

given this incredible volatility we are seeing in the markets, which does undermine confidence, the month of april is as important as it is to subdue the feeling and markets. two the good, if you look at it, the bearish sentiment is as intense as i has ever seen going back to 2008. you look at the sheer volume the last two days. off the charts record chair volumes. that tends to happen closer to trend changes then continuations. --than continuations. at least there is a ray of sunlight. annmarie: you think tariff will come down between 10% to 16%, basically for back-to-school. what about the damage between different administration officials singing from different hymn sheets between now and september? julian: that's the critical issue. that is white treasury secretary

bessent is trying to get people to come together on this to the extent it does or doesn't will be reflected in asset prices. the shock we have had to the system over the last month and in particular the last week and a half is such that you are in the zone where the sentiment data could materially in fact the hard data. to your point in home selling season which we are in the peak of now and then back-to-school, etc., that is why the economic risk lies. jonathan: larry fink said yesterday the ceos think we are already in a recession. i wonder what we will hear from the ceos on wall street on friday when the earnings come out. julian: i would think that jamie dimon will warn the way he has

about policy implementation and uncertainty. this is going to be in earnings season where, you know, it is similar to the unemployment report on friday. it doesn't matter what the numbers are. what matters is the level of expressed uncertainty and will companies pull guidance. i'm sure there are a full that would -- there are a few that will. jonathan: julian emanuel of evercore. so bad it might be good. i'm joking. that seems to be the argument from some. lisa: who would want to do this to the system? they will have to have an offramp. if they don't, that is the real question. how prepared is the market? jonathan: give you are with additional tariffs over the weekend. 10% on overnight. additional tariffs on europe, japan, china. annmarie: keep middle of the --

key politically -- i go back to what callie and shaw told me in washington. she was part of the trade negotiations. you said you need the uncertainty. the ambiguity is on purpose. that is how trump will extract maximum concessions at the negotiating table. jonathan: equity. futures on the sb bouncing back by 1.3% with an update on stories elsewhere, here is dani burger. >> the supreme court has allowed president trump to resume deporting alleged venezuelan gang members under the alien enemies act. the court granted the request in a 5-4 vote. they ruled detainees must have noticed any chance to make their case to a judge of for deportation. the house freedom caucus chairman andy harris says he's

open to the creation of a new 40% tax bracket for those earning $1 million or more. republicans have long opposed any form of a tax increase. the freedom caucus can block a thin republican majority as it tries to pass tax cuts amid physical constraints. chinese auto giant byd said profits good double after a bumper start to the year that saw vehicle sales top one million. total sales are 60% higher than a year ago and is overseas expansion achieved leapfrog growth in the quarter. that is your bloomberg green. jonathan: more from dani later in the hour. open to negotiations. >> for countries that don't retaliate, we are at a maximum tariff level. it is my hope that through good negotiations all we will do is see levels come down. jonathan: up next, reaction from the cato institute. we will catch up with alex nowrasteh. from new york city, good morning. ♪ ♪

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jonathan: the worst three-day slide since the pandemic. attempting to snap it this morning. on the russell, up by 2. open to negotiations. >> for countries that don't retaliate, we are at a maximum tariff level. it is my hope that through good negotiations all we will do is see levels come down. that will depend on the other countries. if president trump is going to be personally involved in the negotiations and he believes, as many of us do, there's been an unfair playing field, negotiations are going to be tough. jonathan: the treasury secretary

bessent saying everything is on the negotiating table when it comes to tariffs. deals will likely not be done before additional tariffs kicking tomorrow morning -- kick in tomorrow morning. tyler kendall, welcome back. how realistic is it we could get the -- we can negotiate the tariffs away? tyler: it appears that countries are bracing for those current tariffs as planned to go into effect tomorrow, even as the secretary says he's open to negotiations. it appears they are going to move ahead at the maximum tariff rate for countries that do not retaliate. i asked him yesterday which countries he was optimistic about striking a deal with. with all of them. whether or not all of them get a deal hinges on the fact there is little clarity on exactly what the administration needs to see done. is becoming clear it will likely take more than just lowering tariff barriers. in some cases, eliminating or

lowering a trade surplus with the u.s. some senior officials including peter navarro pending an op-ed saying this is not a negotiation as he doubles down that carveouts could undermine. with that said, it appears japan will get priority in trade talks moving forward. the treasury secretary minutes ago said potentially been alaska energy deal could be on the table, adding to the additional things we could see rolled into these broader conversations when we talk about the tariffs. white house officials said about 70 countries have reached out to negotiate. one clear trend is appearing. president trump once these negotiations to happen in person. he talks about how delegations are coming down to washington. jonathan: appreciate the update. tyler kendall and the nation's

capital. now alex nowrasteh of the cato institute. stephen miran will catch up with us later from the white house. he delivered an address. some amazing things jump out. he talked about the security america provides to the rest of the world. one thing he wrote about what forms countries can take in sharing the burden is other countries can accept tariffs on exports to the u.s. without retaliation providing revenue to the u.s. treasury to finance this public goods provision. what is this new era might be moving into? -- we might be moving into? alex: protectionism, high tariffs, and multiple justifications. we heard multiple different justifications for these tariffs from different members of the administration. subsidize american expense defense -- defend six

managers, getting levered -- subsidize american defense expenditures, getting leverage over other countries. donald trump's way is he does not like trade. that is the basis for all of this. we are having a lot of wishful thinking if we think people reverse himself on a lot of these tariffs. all these are justifications to keep going on tariffs, to keep raising rates and maybe make a small concession. we are going to higher tariff territory and it will last for a while. annmarie: does he not like trade or trade deficits? alex: he doesn't like trade in general. he sees economic exchanges with foreigners as zero-sum. if somebody wins, somebody loses. as we know from economics, these are not super meaningful numbers. you and i have trade deficits with our local grocery stores

but we certainly would be better off buying from them than growing your own food. annmarie: 20 comes to the tariff rate -- when it comes to the tariff rates staying higher, scott bessent says that is a cap and we can work towards a lower ceiling, how high do you think they will stay intact? alex: that is a huge question an important question. we will see a lot of fluctuation over the next several months. some countries will come down a little bit and others up. i would be surprised if the average weighted tariff rate goes below 20%. for at about 25%-20 6% right now. they could be over 100% with china in the near future with some of these retaliatory threats coming to bear. we are not going to go back to a situation prior to 80 days ago. we will not go back for quite a while. annmarie: what is congress' role in this?

alex: congress has given all tariff responsibly essentially to the president through various laws. the one used a lot recently is the ieap -- eepa law. under the constitution congress has power over trade policy. it could take that back. since agape is power to the president, it would have to pass a law and do it with a super majority to override presidential veto. congress has sidelined itself. it will be very difficult for it to bring that kind of power back. they should try. it's important for economic policy in the united states and security and good sound policy, but the chance of them succeeding is pretty minimal given how they have to overcome veto to get it. jonathan: what do we do between now and the next month? do you see things freezing up as

people wait to see what the rules of the game might be? alex: a lot of people are going to hold back because of the uncertainty of the situation. we saw an insane market swing yesterday in the course of a few minutes. that was based on a blip and a verbal pause by kevin hassett on television. people were looking for any kind of good sign these tariffs will go away. they are not going to go away. we will see some fluctuations and some variations in the rates in the next few months. generally, they will remain about as high as they are now on average. i suspect they will stay that way for years. jonathan: alex, appreciate your time. alex nowrasteh of the cato institute. imagine what things will like 12 months from now. lisa: it seems like these estimates for the s&p will end up coming down. there's a faith that cooler heads will prevail. there is a faith that if this is really that potentially economically damaging, they will

not go through with this. what every policy advisor said is they will. here we are. jonathan: you have to look industry to industry. some will be ok with the mystic capacity. places we don't have domestic capacity, we will struggle. some can ramp up quickly and others can't. this will play out industry by industry. they went to engineer supply-side response. the key mechanism is price. lisa: you cannot build a factory in two days. how else will you deal with the fact that demand could potentially be coming up when supplies coming down? jonathan:, daan struyven warning that oil could drop below $40 a barrel. this is bloomberg. happy little tree that lives... who recorded over my game footage? i just love his voice. great! it's lost forever now, don!

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jonathan: equity futures on the s&p 500 posited by 1.7%. nasdaq, the lift as well. bouncing back from a losing streak. dani: who said m&a was dead? it's a cross-border m&a. is a european company buying a bit of the u.s. the german tech company buying from marvell technology, their automotive networking business is crucial for self driving cars. $2.5 billion.

it is an expensive price tag and it makes sense for marvell the focus on ai. shares are up 4.25%. walgreens reporting beating on expectations thanks to cost cuts and improved health care business. those shares of 2.7%. this is getting a take private from sycamore partners that could close at the end of the year. how much this could rally is a little cap. stellantis. most automakers are moving higher. stellantis declining 4%. not only are they trying to navigate the tariffs, they have hired mckinsey to look at selling off maserati and alfa romeo. reports that italian production has fallen to the lowest in nearly seven decades. the unions say it will not get better. not only is it falling demand, it's also the impact from tariffs. jonathan: thank you. that company has got much more

-- much bigger problems than just tariffs and has for quite a while. president trump rejecting a last-ditch offer from the eu to drop tariffs on all bilateral trade and industrial goods. trump sang the offer is not enough to reset the transatlantic trade relationship. japan is poised to get priority from the u.s. on tariff negotiations after a productive call between president trump and the prime minister. scott bessent saying japan is an important ally and praises the country for coming to the table quickly. japan gets encouraged. annmarie: i think the european union is going to be looking at japan. japan will be the litmus test for all these allies with united states on how to approach negotiations. it's interesting who is leading the negotiations with tokyo. it is secretary bessent and jamieson greer. jamieson greer will be on capitol hill today. jonathan: he's got a little more

power in the last way. i don't mean greer. howard lutnick seems to have stepped to the side and the treasury secretary seems to be in the nixon away he wasn't last week. annmarie: i agree. the interview i had with him following the liberation day ceremony, he project the fact that i'm not -- i felt like he was think i was now part of these rates. i don't know why canada and mexico are not on this list. now he's the one that is going to be leading the negotiations for one of the u.s.'s most important allies. jonathan: in the oval office there was a get together within the president and the israeli prime minister. we expected questions about trade and we ended up with this. iran and talk to the united states. iran confirming the talks take place this weekend over the country's nuclear program. president trump sang the talks will be direct -- saying the talks will be direct around curbing their nuclear activities. annmarie: president trump teased this last week.

i asked my air force one on thursday. iran is talking about wanting to have a diplomatic offramp with the u.s. but they want an intermediary. trump said nothing that is true anymore. i believe they want to sit directly with us, it goes faster. you can understand the other side better. he doesn't think anyone wants intermediaries. he confirmed they will be a big meeting on saturday. iran's foreign minister says those talks are indirect. i think both cancer trying to save face and be able to say they were either direct in terms of the united states or indirect in terms of iran. i'm sure we will get a mix or match of the two. jonathan: all prices are taking higher following the biggest three-day slump going back to 2021. brent oil could fall by $40 a barrel in late 2020 six interesting outcomes including a global gdp slowdown and a full unwind of opec+ cuts. daan struyven joins us for more.

a couple of things going on here. i think the demand-side story is understood. could you share with us the developments on the supply-side that is driving the changes? daan: we have taken data base for brent crude oil prices to succeed dollar -- $62 by the end of the year. primarily on the back of the gdp downgrades economist have made over the last few weeks. we now expect oil demand to grow by only 300 kpb this year. we have been seeing modest increases in opec+ supply was not only a bigger increase that they have announced, and we assume two final small increments and june angela. more opec supply, lower gdp outlook.

while a sharp reversal on terra policy could lead to oil prices skewing to the downside because of greater increases in supply. lisa: last year was the year the logic died. has it been resurrected? if people are decreasing expectations for growth, you are seeing opec increasing their supply, cutting prices at a time when prices are already going down. what is behind the move? daan: two main drivers to increase the production hike. i think it's a strategic decision to incentivize better compliance her mother partners in the producer group, notably kazakhstan and iraq. i think the market is starting to shift towards equilibrium when opec announced production would gradually start to come back. the second reason is, opec looking at spot data in the market over demand increase.

it still looks reasonably tight. markets are forward-looking and focused on the risk to gdp ahead even if that is the case in commodities and the u.s. economy. the initial jobless claims are still -- markets are forward-looking. lisa: there was one analyst at pantheon macro that came out that the recent fall in oil prices and shipping cost will offset a quarter of the impact of tariffs that will trickle through inflation positive. on the flipside, it will decrease capital investment to such a degree in the u.s. because of the dominance of the oil industry. what is the price point at which it really becomes deleterious for the entire u.s. oil industry? daan: we think lower oil prices are in that positive for u.s. gdp because of the benefits to consumers from high-yield incomes outweighs the losses from capex in the energy sector. we think the average breaking

price is around $50 a barrel. if we move lower, we are in the center of distribution. a lot of producers will be under pressure. 2015, when prices drop to around $30 per barrel, we read of piecing the lower the prices is a good thing. it flipped and oil prices started to heard activity in the u.s. -- heard activity in the u.s. yes, the shale sector is bigger but less price sensitive. they are only investing about 50% of their cash flows that came into the business. in 2014, they were borrowing. investing 130% back into the business. annmarie: post-covid has changed where they are investing and using the capital. what is the breakeven price now? daan: in the u.s., $55 of brent.

we are starting to hit the price levels where it becomes relevant for more producers. in fact, we forecast you are -- u.s. to edge down. we were looking for increases, unless prices rebound, the supply has peaked for the next couple of years. annmarie: united states will have these talks with iran on saturday. how do you weigh the geopolitical applications in the oil market? if the deal is struck, maybe we see more iranian barrels on the market. if not, it's maximum pressure and that oil is going to china and may be taken out. daan: i would not inspect significant increases in iranian volumes. we don't believe sanctions have been a major constraint of iranian oil expert volumes. they have increased by about a million barrels a day over the last two years. if you saw a return to back some pressure, you could see a iranian volumes.

that would be positive for oil prices but opec has shown its willingness to rapidly bring barrels back to the market if the fundamentals are tight. we don't think you would see a major net tightening effect because opec sits on a lot of spare capacity and can bring the barrels back to the market. jonathan: going finish on gold? gold fell on thursday and friday. what is the relationship between golden risk assets at the moment? daan: it's a great entry point to go long gold. positioning has been cleaned up because of all the margin calls following losses on equity -- for selling. we think spec positioning dropped from the top 10% but we could go to probably now close to the historical average. excellent entry point. in the base case gold prices rise 10% by year-end. with a risk skewed to the

upside. you could rally to $4450 announced by year-end if markets are more focused on u.s. policy tail risk. jonathan: you think the relationship between risk and gold reestablishes itself becomes a haven asset? daan: if it were to moderate somewhat, i think the positive impact of heightened uncertainty of oil prices would be a start. jonathan: appreciate your time. daan struyven. gold still north of $3000. here is your bloomberg brief with dani burger. dani: former j.p. morgan status marco kalon of it says president trump is close to changing his trade policies due to market pressure. he thinks the trump put would kick in if the s&p 500 hit around 4800, saying the president's body language shows he believes he has lost the edge in his trade war. elon musk's fortune fell below $300 billion for the first time

since joining the trump administration. he lost nearly $4.5 billion in yesterday's trade as tesla shares extent of their losses. musk is still the world's richest person despite losing nearly $135 billion so far this year. a check on porsche shares. caring earlier losses. the carmaker's china sales plunged 42% of the forest quarter, -- first quarter, the worst since 2013. deliveries in north america rose 37% in the same period. the sustainability has come to question with new tariffs and potentially rising import costs. that is your brief. jonathan: thank you. more from dani in the next hour. projecting the tariff pause. >> would you be open to a pause? president trump: we are not looking at that. we have many countries that are coming to negotiate deals with us.

fair deals. jonathan: we will catch up with the chair the white house counsel of economic advisors stephen miran. from new york city this is bloomberg. ♪ ♪

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sandals jamaica sale is now on. from $199 per person per night. visit sandals.com. jonathan: session highs on the s&p up by 2.3%. nasdaq, 2.2%. the russell bouncing back by close to 3%. rejecting a tariff pause. >> would you be open to a pause in tariffs to allow for negotiations? president trump: we are not looking at that. many countries are coming to negotiate deals with us. fair deals. in certain cases they will be

paying substantial tariffs. they don't want to be in the hands of the chinese. the chinese have turned out to be really not very good at that. people that are with us are with us. we cannot be taken advantage of any longer. jonathan: the latest. president trump keeping investors on edge. additional tariffs kicking and in the next 24 hours. joining us to discuss i'm pleased to say the chair of the white house counsel of economic advisors stephen miran. welcome to the program. welcome to "bloomberg surveillance." the number one question on wall street at the moment, is this a negotiation with the new rules of the game? >> good morning and thank you for having me. it could be either. the president is famous for his negotiating skills. the president is renowned for pulling deals out of a hat when no one thought it was possible. the phase one china deal in 2018 20252 -- 2018-2019, was a

fantastic deal. it covered currency manipulation and all sorts of things. it was a fantastic deal. provide administration refused to enforce it and i was a big loss for america. the president is famous for creating deals when no one things he can. that is what it can turn into if other countries persuade the president. jonathan: let's talk about the right things. japan offered -- what would be the right kind of offer? are they aware of what the right kind of offer would be? stephen: a narrow focus on tariff rates is insufficient. the nontariff barriers pose enormous barriers to trade balancing over the long run. countries have to open their markets to u.s. exports. i don't know exactly what combination of -- what combination of details they have

to offer. all i can say is that negotiating is better than not negotiating. jonathan: you are aware of this, they are unclear whether it is about barriers to entry or just the deficit. they are two different things. which one is it? stephen: they are deeply related., inextricably related -- related. the trade deficit will respond to that. no question about that. annmarie: you gave a speech and talked about the way of burden sharing and other measures partners could take to potentially get to a deal. things like writing checks to the treasury. how would that work? stephen: there are a variety of ways. they could just simply say america is providing a defense umbrella that creates peace and allows us to prosper economically.

they could say america is creating global trading systems backed by this defense umbrella which allows us to trading creates our prosperity and we will help share the cost of those things. we will sense of money to help provide those things. of course, it depends on what the president decides. the president will negotiate the deals he things are best for america and americans. i cannot get ahead of him on those issues. annmarie: you talked about how partners can install factories in america or trading partners. could china do that? stephen: i think they could. it remains to be seen whether they have the ability to. china's policy has been to try to steal all the manufactured market share for themselves from many of our trading partners. it seems to me unlikely china would make that concession up front. i would welcome it. annmarie: china said they would

-- trump said that if china does not withdraw the retaliatory tariffs the u.s. will impose an additional 50% in less than 24 hours starting tomorrow. you respect those additional 50% tariffs to come into play? stephen: that depends on the chinese. my advice would be that if they have more to lose than america does, america holds the leverage and everybody knows that and therefore they should seek at the tot and offer -- ck the seek a detent. lisa: what you are seeing in markets, are you worried he was companies. investing in could stymie some progress you are hoping to engineer? stephen: the president has been clear that what he is engaging in is a long-term improvement in the economic welfare of the u.s. and a long-term improvement and putting american workers on fair

vis-a-vis the rest of the world. temporary uncertainty comes so that transition of policies. that is without question. i think it is important to understand uncertainty does not really cause recessions. i don't think is been a recession caused by people wondering what is going to happen tomorrow. uncertainty can delay decisions as you were saying. there could be some transfer of investment decisions and hiring decisions from one month to another. that is possible. there are limits to that. a firm will decide i really need to add this capacity or i really need to make a decision about what's going on. at some point waiting becomes not worth it. is there a chance the uncertainty causes distortions in the month to month or quarter to quarter macroeconomic data that make one quarter look weaker and another stronger? absolutely. that is likely. it is quite likely. companies cannot delay decisions forever. they have to pull the trigger

and invest based on their valuation of the most likely policy landscape in the future. the president has been clear about what that policy looks like. lisa: a lot of people have come out and said uncertainty can cause a recession. we have for that from a number of different wall street firms, a number of different companies and the small business consumer survey came out this morning and saw the steepest point we have seen going back years. there's a question about ultimately making decisions. when did they start laying people off? when you worried about execution risk when some structural changes take a lot longer than some policies are taking to implement? stephen: there isn't really any material sign of layoffs in the macroeconomic data. that is not something i'm seeing right now it all. what i would say is to remind people there are three legs to the stool. one is trade renegotiation, the other are deregulation and tax reform. those are in the pipeline. we are waiting on congress to

extend the historic tax cuts of 2017 which will preserve low marginal rates in american workers and firms. what we experienced on liberation day was a 30 percentage point rise in -- 13 percentage point rise in the tariff rate on all imports. that will create enormous amounts of revenue. hundreds of billions of dollars that could be used to provide additional tax relief for americans. the president has been clear laying out certain forms of tax relief. there is scope to go further than that. i personally would like to. it depends on what congress works out and negotiates with the president. i don't always get -- i'm not the president. the president will decide in collaboration with congress. using the revenue for additional tax relief would be a fantastic outcome. i think the regulation is underway. the combination of making america more competitive via tariffs and making it easier to build and invest and hire is fantastic. when you look to the future,

there will be an american that is the best place in the world to do business because the tariffs make it competitive, the regulation makes it easy, and tax reform exit efficient and keeps our money in people's pockets, makes it easier to h ire and invest. annmarie: you are talking about the entire policy proposal. markets are forward-looking and pricing and just that. the extension of tcja. you think we will get no tax on tips or social security? stephen: i think we will see that. i can't get ahead of congress or the president. the president has been clear calling for those things that i'm optimistic we will get them. i'm optimistic we will get some further tax relief beyond that. what form that takes is up to congress and the president. i think it will be a fantastic outcome for american workers if we took money raised by tariffs levied from foreigners and you set to lower taxes on americans.

that will create a more dynamic, competitive economy that would transition to the president's leadership. jonathan: how can be both a source of revenue for tax relief and an option for negotiations? stephen: tariffs raise revenue. jonathan: sure, but you said you can negotiate this. stephen: oh, yes. i understand what you are saying. if negotiations lead to better trade terms for american firms, you create a booming economy because there's more demand for exports. jonathan: and then we tie the tax relief back? stephen: did you don't have the additional revenue to pay for tax relief but congress and president are determined to extend the original tax cuts and provide the additional relief the president has spoken about. it's a question of how much further beyond that you can go. jonathan: we will keep struggling to make sense of it. stephen miran, white house counsel of economic advisors chair. the third hour of "bloomberg

surveillance" is up next. ♪

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>> there is not an extort her external pressure catalyst on

president trump right now to pull these tariffs back. >> they also raise prices. you see inflationary impacts. >> the problem for the president is a lot more leaders are not quite sure they can negotiate with him. they don't want to be embarrassed. >> there is still a lot of moving parts to this. >> the president is asking the american people for a long leash. we will see if the american people give it to him. >> this is "bloomberg surveillance." jonathan: the third hour of "bloomberg surveillance" starts right now. 90 minutes out from the opening bell and your equities are at session highs. on the nasdaq, firm or by 2.6%. one minute after midnight tonight additional tariffs. 20% on europe, 24% on japan, 34% on china, and may be another 50% still to come. is it avoidable? are these the new rules of the game or can you negotiate this?

stephen miron with us just moments ago saying it can be both. that is what we are struggling to figure out. lisa: people are not really having a good time trying to make this logical and make sense, so there are two cases here. the bear case, which is that the tariffs go on at midnight tonight and there is some sort of retaliation. the bull cases that everyone will come to their senses and realize that this is potentially really damaging and there will be some negotiating on some stance, whether it is the president or the federal reserve. it is hoped that ultimately what we saw briefly in markets, the surge of markets by $2.5 million and then crashing again in the span of 15 minutes. jonathan: if you believe in negotiations what can you offer? the eu came out and made a smaller offer, said we will drop tariffs on all of our industrial goods. rejected. there seems to be more than just tariffs. within just tariffs and maybe larger barriers to entry.

then you were told it is about the deficit. it is just about the deficit. we can inform the other, but at the moment say they drop everything. let's say they don't manipulate their currency. you are not going to get rid of that deficit with vietnam. that is not happening. lisa: i love the idea of, if you go to a grocery store to get your food you have a trade deficit with that grocery store. do you say you don't want to buy food from it anymore simply because you are going to grow your own food because that deficit is problematic? what deficit are we talking about? there is a fiscal deficit the united states needs to deal with and then there is a trade deficit that is a structural byproduct of the u.s. economy being the biggest in the world and the way it is set up. if you want to undo that what are you talking about? that is why strategists are trying to grapple with the unknown of what this new world order could look like. and what that could do to the footprint of american businesses. jonathan: three-day losing streak on the s&p. we snapped that this morning. coming up, european debt of jp

morgan, patrick moorhead of moor insights as apple looks for a way around trade barriers, and nancy lazar of piper sandler on how the president's levees will impact the economy. following three days of losses on the s&p 500, european debt writing, if tariffs stay in place we are likely to see recession this year and severely impaired profit growth. even if tariffs were paused or scraps, uncertainty scars could run deep. morning. let's on that line. even if they come off the uncertainty, how much damage away doing right now? meera; there are some things you cannot un-say. consumers can bounce back, but if you think about, things will get negotiated, maybe we come together with the deal, i want to wait until that deal is signed until i start to think about hiring and capex. if i think the tariffs are going to stay on for longer than i

really have to reconsider, how do i think about my structure and my costs and how i operate in this environment? either way people are hamstrung at this point, whether it is negotiation or a long-term thing. jonathan: we are told the payrolls don't matter. we are told the earnings this week, irrelevant. what are you putting your hands around to get an estimate for earnings for the coming 12 months? meera; you have seen across the street a lot of people wiping out their earnings expectations. it is so hard to think about where we ground ourselves because all of this is going to continue to engender volatility. when we think about a pop in the market today, we have seen pops during periods of heavy volatility. because people are trying to make sense of things. essentially you have a earnings season, which is probably going to look good, especially with a lower dollar. but me nothing going forward. we are going to have to hear about guidance and what companies are doing. that will help us ground ourselves to some extent. if we think about the economic

data it will broadly be dismissed for another month or so. the survey data, when it represented uncertainty was not telling us a whole lot. now that it is representing, where do i go from here, the soonest measure we get of the economic strength, we have to rely on that to some extent. that is rumors and headlines. lisa: we were speaking with the chairman of the council of economic advisors, who says uncertainty cannot cause recessions along. is that true? meera: i don't think that is true. if you are in wait and see mode those of the three most dangerous words for the economy. again, that uncertainty and those scars run deep, even if some of these tariffs do come off. that is the challenge here, because what comes off could come back on. it does seem like this is a negotiating position. if you think about the president's favorite word being tariff, he also wrote a book about making deals, so it is hard for us to get which way

he's leaning here, but we did see deals during the 2018, 20 19 period. we did see concessions during the first month of his presidency. and there are some talks in the works. but what more powerful position to be in then say, i have nothing to lose? i think that is the phase we are in. most market participants are not expected tariffs to last longer than a couple of months. if that is not the case there is more downside ahead. lisa: it is a difficult moment, because paralysis begets this question of, what haven can you invest in? that was highlighted yesterday when 30 year treasury yields surged the most going back to 2020. at what point does that raise concerns about the haven status of u.s. treasuries? meera: there is a tug-of-war when we think about slower growth, higher inflation, and yesterday's move was a reminder that inflation was potentially a concern. if you do get deals across the

board but the fed were to cut before that that puts them in a tricky position, and perhaps a reason why they may shy away from these emergency cuts people have been shying away from. if a deal is done they are still dealing with inflation. so, there is that fight between, do we see a recession versus do we see a deal and everything goes away? and we are starting to hear more conversations about debt and deficit. some of this reconciliation bill. it does feel like the administration is tying itself in knots. tariffs are aggressive. you are looking to pay for tax cuts that are progressive, but also tax cuts in a higher tax bracket. you are starting to see that the cohesion, as was pointed out in the last interview, thinking about negotiating versus revenue-raising, the cohesion in the overall strategy is hard for us as investors to think through. jonathan: i keep seeing everyone focused on the cycle and not the system. the stephen miron piece out

yesterday, the address to the hudson institute, i would encourage everyone to read. it talks about the financial dominance of america coming at a cost. he says, while it is true the demand for dollars has kept rates low, it has kept currency markets destroyed. are you thinking about how structural shifts would take away a structural bedford dollar-denominated assets and what that might mean for the multiple we should put on equities? what it might mean for borrowing costs? those kind of changes? meera: it would be a total reordering and we are grappling with what those changes would be. but we have long said when we think about different bricks countries coming together or countries is saying we are going to have a competing currency or a competing system or digital currencies, what we have always said is, the biggest threat to the u.s. dollar is what we are doing domestically. how we are thinking about debt and deficits. we don't want to get too complacent about that reserve currency status. the dollar underpins most financial transactions cross-border payments.

it is so entrenched in the system we are in, so it would take a long time to erode the power of the dollar. nonetheless, you can see some of this on the margins. i think a big example of that is the fact that we are seeing a lower dollar at a time where it was fear around the u.s. recession, which is unusual. lisa: i want to build on what jon was talking about. it is interesting when you read the economic underpinnings of what is going on and some of what is being positive. it actually does go completely against the trend we have seen in markets for the past 50 years. i'm wondering, even if it doesn't come to fruition, even if you cannot take it literally on its face, doesn't it make you want to go elsewhere anyway, just because the source of volatility is the united states right now? meera: there are some things you cannot on-site, and that is the challenge with this no matter what happens. we are seeing that it was supposed to be the year where growth continue to outperform value. u.s. continued to outperform international. ration underperformed.

we have seen a flip of most of that and seen within international markets they are outperforming the u.s. markets by almost double digits and had been positive up until recently. even though they are going to take on these tariffs they are also acting in a forward-thinking way of, how do we reduce some of this reliance on the u.s. when we think about defense spending, technology? just a greater attitude of self-reliance? you are seeing that, some people are saying we are going to play ball a little bit. when we think about international investing some of the areas that could look more interesting than others, areas like india, areas like latin america, where you are not seeing as much of an impact in higher tariff rates yet. we there is more of a gearing toward china. -- maybe there is more of a gearing toward china. we do look at the relative advantages across the market here. but certainly overall it is a really tough market. we don't want to get too cute. we don't want to rely on the

sensible diversification we have maintained, because a lot of those unloved areas are what are protecting portfolios right now. jonathan: it is good to see you. meera pandit of jp morgan asset management. up close to 3% on the s&p. is it a set of negotiations are or are these the new rules of the game? the pendulum keeps swinging between one of the other. over the weekend it was, these are the rules of the game. monday became these are negotiations. that continues this tuesday morning. lisa: you asked that to stephen myron and he said, you know, it could be both, it could be either. you know, it's the president. we are not getting a clear answer, by design. it seems as though this is a feature, not a bug, when it comes to the differing opinions and an approach where you have a lot of discussion among different people in the council. it just makes it very difficult for investors and very difficult for companies. jonathan: still working out whether it is one of the other, but uncertainty starts to hurt.

that comes up in the sentiment surveys. the reality of where the positive -- where it is now comes up in the sentiment surveys, and that shapes action. lisa: we also have to add to that we have seen a 10% baseline tariff implemented. it is not just uncertainty, it will be uncertainty of tariffs that go into effect. across the board that would set the tariff rate at a level it has not seen since the early 1900s. there is uncertainty, but also action and people are responding to that. jonathan: session highs up by 2.9% on the s&p. with an update, here is dani burger. dani: resident donald trump is set to sign an executive order expanding mining and the use of coal in america. they missed a power data centers and revive the fossil fuel industry. the order directs the federal government to take steps to reinvigorate whole and reaccelerate the export of u.s. coal and related tech. ecb governing council member says the central bank should cut

rates at next week's meeting due to the impact of president trump's tariffs. socgen also called for a 50 basis point cut next week and extra cuts to follow in june and july. harvard plans to borrow $750 million from wall street has federal funds come under threat from the trump administration. proceeds will be used for general corporate purposes. documents show goldman sachs as the sole broker on the transaction. the administration has already frozen funding for columbia and princeton university. that is your bloomberg brief. jonathan: thank you. up next, the morning calls, plus patrick moorhead as apple looks to look -- looks for a way around trade barriers. equities, your session highs. the s&p up by 2.8%. ♪ ♪

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jonathan: the opening bell, one hour and 40 minutes away. equities higher. up to .6% on the s&p. on the russell, up by 3%. it is the price action. let's get you some morning calls. jp morgan up rating levi strauss, noting pricing power that should offset tariff headwinds. that stock is bouncing back close to 13%. your second call from goldman, upgrading eli lilly, citing mcrae and angie point and predicting the company can maintain its pole position as sector leader. that stock is up by 3%. morgan stanley downgrading hp enterprise, saying thinner margin structure provides less buffer against tariff impacts. that's not just about positive

this morning. let's stick with tech. apple is planning to source more iphones from india to the u.s. to offset the china terrace. a short-term stopgap as the company looks to gain a tariff exemption from the white house. patrick, welcome back to the program. you are operating with the exception -- with the assumption that they can get that exemption. patrick: i'm currently not working under that, and i look back at history where apple has been exempt a few different times. china made some commitment to trade balances under trump 1.0. i just don't see it happening at this point, because if apple gets a reprieve, why not hp? why not dell for pc's? why not samsung for smartphones, where they have invested hundreds of millions of dollars just in semiconductors here? jonathan: this goes in several

phases. the names would keep coming. for apple the first phase seems to be people rushing to the store and getting iphones at a price they are at now. what is the next phase after that? what things look like for the company? patrick: it is really a long road ahead. china had to import workers from malaysia. there have been reports that i think if you back into the numbers it requires over a million workers in china to be able to put together iphones and ipads. and you can't just replicate that overnight in any country, including india. let's say 10% max can be moved over within 12 months. you are still staring down the barrel at up to 104 percent tariffs in china. again, it changes day-to-day. but the least 52%-plus tariff,

and even in india you have up to a 37% tariff. i do believe that if deals were made india would be at the front of the line, but unfortunately we have not seen any discussion on india. we have heard about japan. we have heard about israel. we have heard about vietnam. but nothing about india. so, what is better? 104% or 37%? it is 37%, but apple cannot move quickly enough. it could take five years if they wanted to move most of their manufacturing anywhere else in the world. lisa: apple has lost about 640 billion dollars of market capitalization since end of day on april 2. that is about 19% of its value. how much more downside do you see ahead if you don't get some sort of carveout from the tariffs that have been announced? patrick: i mean, i don't want to

be too dramatic here, but if you are more than doubling the price of an iphone in a worst-case scenario the stock value could be cut in half. people don't believe that. otherwise there would be treading on that and they are looking for some type of reprieve, but you have to factor in that possibility, that china is the number one negotiating point for the entire administration and i have a thesis that says, it is really only about china, right? it is building a blockade of partners who can take on china, and they will be the last line to negotiate out there. the other part which i have heard a couple of your guests talk about is this fear of recession. so, apple gets hit with a double whammy. they get hit with a chinese

taylor: we are seeing this white

house be more open when it comes to the negotiations, although it appears still some big hurdles to cross and we are not going to see any deals ahead of tomorrow. i will also say we are seeing a shift in tone from someone on wall street. fresh reaction from bill ackman, who thinks some may have misconstrued his recent comments, writing he supports president trump using tariffs to eliminate unfair trading practices and rather that he is actually advocating for a 30, 60 or 90-day pause to complete negotiations. president trump saying yesterday that he is not considering such a pause as they try to strike some deals moving forward. jonathan: tyler kendall, thank you. you know who is striking goal? bluecrest, gaining 20% on the tariff volatility. i always say this about mike platt of bluecrest. my goodness. the ability of that firm to trade through different regimes, different moments repeatedly over the course of the decade is just nothing short of phenomenal. just absolutely amazing. lisa: i would agree.

i want to understand the secret sauce. i want to understand how they played this the right way given the volatility we have seen based on headlines. this is a tough time, and not losing money has been the benchmark. jonathan: i've been trying to get -- trying to get mike to come other program for years. i will keep pushing, because this performance is amazing. let's talk about where we are right now. it is the difference between negotiating verses, are these the rules of the game? people believe the pendulum has shifted back toward negotiating. let's talk about negotiating. what can you negotiate right now? what is that this administration would like to see? the eu made an offer, rejected. now they are saying terrace and tariffs alone are insufficient. that this needs to be much broader than just that. lisa: which goes to the question you were asking. is this illuminating the trade deficit or something else? is this eliminating for europe the vat tax and this question

around non-tariff taxes are barriers to entry that might be different and noncomparative in the same kind of way? this week i think the most important point will be delta earnings. or then the banks, more than any of the economic data, whichever one will ignore him but if delta comes out and says people are canceling vacations and businesses are not spending, that indicates that this uncertainty and paralysis is going to shift into something that starts to take hold. we hope it doesn't. levi's, if they are the example -- jonathan: why not just come out and say nothing is going to change? lisa: if they say nothing is going to change, imagine how big that rally will be right now in markets? jonathan: just got a great message. we have the smartest audience on the planet. the most sophisticated. i got a message from a viewer about what they are calling the mismatch of maturities. maturity mismatch between addressing trade versus execution. policy has this set deadline, which is days, literally

overnight tariff implementation. and then you have got the dynamic that takes years to take effect, which is on showing of manufacturing. mismatch between the two is the difference between the pain you need to take now, for maybe the success down the road, and the destination is still not secure either. lisa: it is a wonderful way of framing at, to highlight that people do think there are some changes that need to occur with trade, and changes that need to occur with supply chains and manufacturing. the time that it takes to do that is much longer than a lot of these companies are dealing with when it comes to facing off with some of these tariffs. again, execution risk. that is what a lot of people are trying to understand. jonathan: we keep going back to the same question. i imagine tomorrow morning we will be asking the same question. are these the rules of the game or can you negotiate them? andrew scheer will help us alongside chris harvey, richard bernstein, and ryan patterson of

flex board. that conversation, timely. lisa: how much are people leaving ships in the middle of the ocean, not wanting to bring them in because they are not sure what they are going to have to pay for them and whether they can pass those costs along to the consumer? jonathan: we are higher by 2.4% on the s&p. thank you for choosing bloomberg tv. this was "bloomberg surveillance." ♪

matt: big bounce in markets this morning. 30 minutes until the start of the cash trade. katie: bloomberg "open interest" starts right now.

sonali: coming up, after a while 24 hours in markets stocks look to snap a three-day losing streak as countries rush to the tariff negotiating table. matt: more alarm bells ringing on wall street. goldman sachs warns of a bear market, while ke