Jobs report SHOCKS expectations but markets SURGE

[00:00:00] Speaker 1: WELCOME BACK. WE'RE JUST A FEW MOMENTS AWAY FROM THE JUNE JOBS REPORT. GETTING A WINDOW INTO JOBS RIGHT NOW. IT IS OUT IN ABOUT EXACTLY THREE MINUTES FROM NOW. ECONOMISTS ARE EXPECTING A GAIN OF JOBS OF 110,000 NONFARM JOBS CREATED FOR THE MONTH OF JUNE. THEY ARE EXPECTING THE UNEMPLOYMENT RATE TO HOLD STEADY AT 4.3%. JOINING ME NOW, ALL HANDS ON DECK, ALLIANCE CHIEF ECONOMIC ADVISER MOHAMMAD EL ARION IS HERE. LAFFER TANGLER INVESTMENT CEO NANCY TANGLER IS HERE. WE'RE LOOKING FOR THREE THINGS. ONE IS CONTINUED STRONG JOB GROWTH AND THAT'S ANYTHING BETWEEN 80,000 AND ABOVE. THANKS SO MUCH FOR BEING HERE. APPRECIATE IT. MOHAMMAD EL ARION, LET ME KICK THINGS OFF WITH YOU. WHAT SPECIFICALLY ARE YOU GOING TO BE LOOKING AT IN THIS JOBS [00:00:45] Mohammad El Arion: REPORT TO GIVE YOU MORE INFORMATION ON WHERE WE ARE IN THE MACRO STORY? GOOD MORNING, MARIA. HAPPY FOURTH. I'M GOING TO BE LOOKING FOR THREE THINGS. ONE IS CONTINUED STRONG JOB GROWTH AND THAT'S ANYTHING I'M GOING TO LOOK FOR. AND THEN THE SECOND THING I'M GOING TO LOOK FOR IS STEADY HOURLY EARNINGS GROWTH. SO NON-INFLATIONARY JOB GROWTH IF YOU LIKE. AND THEN THE THIRD THING IS SOMETHING WE DON'T LOOK AT OFTEN, LABOR FORCE PARTICIPATION. AND HOPEFULLY THAT'S NOT GOING TO GO DOWN FROM THE 61.8%. SO THAT'S THE THREE NUMBERS I'M GOING TO BE FOCUSING ON. ALL RIGHT. [00:01:14] Speaker 1: WE WILL FOCUS ON THAT AS WELL. THE NUMBER IS ABOUT TWO MINUTES AWAY. NANCY TANGLO, YOU'VE GOT TO BE IMPRESSED WITH THIS MARKET PERFORMANCE FIRST HALF OF THE YEAR. AS WE ENTER THE SECOND HALF OF THE YEAR WITH KEVIN HASSETT TELLING ME HE'S EXPECTING ECONOMIC GROWTH OF 4%. YOU GOT THE NASDAQ UP 25% IN THE SECOND QUARTER ALONE. MARIA, THIS IS REMINISCENT OF THE 90s WHEN WE HAD PRODUCTIVITY [00:01:32] Nancy Tangler: DRIVEN GROWTH THAT WAS DISINFLATIONARY. FED CHAIRMAN GREENSPAN UNDERSTOOD IT. IT'S CLEAR TO ME THAT KEVIN WARSCH IS CHANNELING HIS INNER CHAIRMAN GREENSPAN. HE HAD A SHORT STATEMENT. HE'S FOCUSED ON THE TASK FORCE WHICH BUYING TIME ON MONETARY QUALICY. SO WE'RE VERY OPTIMISTIC GOING INTO THE SECOND HALF OF THE YEAR. AND STEVE MOORE, YOU'VE GOT TO [00:01:55] Speaker 1: BELIEVE THE BIG BEAUTIFUL BILL WAS PART OF THAT. WE'LL SEE IF THEY CAN GET A RECONCILIATION PACKAGE DONE IN THE FEW DAYS LEFT BEFORE THE MIDTERMS AND BEFORE THE AUGUST RECESS. YEAH, LOOK, THIS IS THE ONE [00:02:09] Steve Moore: YEAR ANNIVERSARY, MARIA, OF THE PASSAGE OF THAT BIG BEAUTIFUL BILL. MONTH AFTER MONTH WE'RE REALLY DISCOVERING THE POSITIVE IMPACTS OF THAT. YOU KNOW, ONE OF THE THINGS WE'RE SEEING RIGHT NOW, WE'LL SEE IF I'M RIGHT ABOUT THIS IN A FEW MINUTES, CONSTRUCTION, MANUFACTURING, WE'RE BUILDING THINGS AGAIN IN AMERICA, A LOT OF NEW INVESTMENT. AND GUESS WHAT? THAT'S BECAUSE WE DRAMATICALLY REDUCED THE TAX ON INVESTMENT. IF YOU TAX SOMETHING LESS, YOU GET MORE OF IT, MARIA. [00:02:34] Speaker 1: THAT'S EXACTLY RIGHT. AND, CHERYL, WE'RE WAITING ON THESE NUMBERS. WE'RE GOING TO COME BACK TO YOU IN ABOUT 30 SECONDS TO GET THOSE NUMBERS FROM YOU, BREAKING NEWS. MARK TEPPER, WOULD YOU PUT NEW MONEY TO WORK TODAY IN THIS MARKET? ABSOLUTELY. [00:02:46] Mark Tepper: YEAH. SO, YOU KNOW, IT MIGHT SEEM CONTRADICTORY, BUT IN FACT, WHEN YOU BUY AT AN ALL-TIME HIGH, YOU ACTUALLY OUTPERFORM OVER THE COURSE OF THE NEXT 12 MONTHS BY ROUGHLY 1.7%. SO SOME PEOPLE THINK THE TRICK IS TO ONLY BUY AT THE BOTTOM. THAT'S NOT TRUE. I WOULD BE PUTTING NEW MONEY TO WORK RIGHT NOW. AND AS CHARLES AND I WERE TALKING ABOUT DURING THE BREAK, THERE'S A LOT OF NAMES OUT THERE THAT I WOULD BE HEAVILY BUYING ANYTIME THEY PUTTING PULLED BACK. NVIDIA CONTINUES TO REMAIN ONE OF THOSE NAMES. BROADCOM, TAIWAN SEMI, THREE GREAT SEMICONDUCTOR NAMES THAT ARE OUT THERE THAT, YOU KNOW, HAVEN'T PERFORMED LIKE THE MICRONS OF THE WORLD HAVE THIS YEAR. ANYTIME I SEE ANY WEAKNESS OUT THERE, THIS IS STILL A RAGING BULL MARKET. [00:03:32] Speaker 1: I WANT TO TAKE ADVANTAGE OF THE DEMOCRATS. THANK YOU SO MUCH. [00:03:36] Cheryl: SHONI, ON IT. RIGHT TO YOU, CHERYL. WE CAME IN UNDERNEATH EXPECTATIONS. WE CAME IN AT 50,000 NON-FARM JOBS. THE STREET WAS LOOKING FOR 110,000. THE UNEMPLOYMENT RATE FELL TO 4.2%, DOWN FROM 4.3%, WHICH IT HAD BEEN HOLDING STEADY AT FOR ABOUT THREE MONTHS. LOOKING AT A FEW OF THE NUMBERS JUST TO GIVE YOU A SENSE HERE, AGAIN, THAT 57,000 NUMBER IS FOR NON-FARM. AVERAGE HOURLY EARNINGS UP 3.5% COMING IN AT 8,000. REMEMBER, WE DON'T GET AN ESTIMATE FROM THAT GOING INTO THIS REPORT. AGAIN, FACTORY JOBS, MENUFACTURING JOBS, 3,000. AND THEN LOOKING BACK AT A COUPLE OF OTHER THINGS HERE, THE UNDEREMPLOYMENT RATE, THE U-6 RATE, 7.9%. AND THEN WE'RE ALSO LOOKING AT -- LET'S SEE HERE, PAYROLLS. YEAH, PAYROLL REVISIONS. I GOT TO GIVE YOU THIS REVISION. MAY PAYROLLS HAS JUST BEEN REVISED TO 129,000. APRIL JUST GOT REVISED TO 148,000. PRIVATE SECTOR JOBS THAT CAME IN AT 49,000. THE STREET WAS LOOKING FOR 110,000. SO AGAIN, LET ME TELL YOU WHAT THE GOVERNMENT IS TALKING ABOUT EXACTLY WHERE THESE CHANGES OCCURRED WITHIN THIS REPORT, MARINE, AND THEN I WILL SEND IT BACK TO YOU IN THE PANEL FOR FULL REACTION. BUT WHAT THEY'RE SAYING HERE IS THAT BASICALLY WE SAW TRENDING UP EMPLOYMENT STORIES IN PROFESSIONAL AND BUSINESS SERVICES, SOCIAL ASSISTANCE, HEALTH CARE, LEISURE AND HOSPITALITY LOST JOBS. SO WE SAW AN INCREASE IN HEALTH CARE, INCREASE IN SOCIAL ASSISTANCE, INCREASE IN PROFESSIONAL AND BUSINESS SERVICES, SOCIAL ASSISTANCE, HEALTH CARE, LEISURE AND HOSPITALITY LOST JOBS. SO WE SAW AN INCREASE IN HEALTH CARE, INCREASE IN SOCIAL ASSISTANCE, INCREASE IN PROFESSIONAL BUSINESS SERVICES, BUT WE SAW A FALL IN LEISURE AND HOSPITALITY. THAT IS KIND OF THE TOP LINE THERE. LABOR FORCE PARTICIPATION RATE ACTUALLY FELL BY THREE-TENTHS OF A PERCENT TO 61.5%. AND THAT'S SOMETHING THAT MOHAMMAD AL ARIAN WAS TALKING ABOUT. IT WAS AT 61.8%, MARIA. SO AGAIN, DIFFERENT STORIES THAN THE OTHER REPORTS THAT WE GOT, FRANKLY, FOR MARCH AND FOR APRIL AND FOR THE MONTH OF MAY. BUT AGAIN, LOWER NUMBERS AND THERE'S THE MARKET FOR YOU ON YOUR SCREEN, MARIA. WELL, LOOK AT THIS MARKET [00:05:46] Speaker 1: REACTION. WE ARE AT THE HIGHS OF THE MORNING RIGHT NOW AFTER THESE JOB NUMBERS. THE DOW INDUSTRIAL IS UP 152. THE NASDAQ UP 134. THIS FEELS LIKE A GOLDELOCK STORY ONCE AGAIN. STEVE MOORE. [00:06:00] Steve Moore: WELL, I'M JUST LOOKING AT SOME OF THE OTHER NUMBERS. AND LOOK, I MEAN, I'M A LITTLE DISAPPOINTED IN THIS, FRANKLY. AND IF YOU LOOK AT THE HOUSEHOLD SURVEY, IT SHOWED A HALF A MILLION, FEWER AMERICANS WORKING. SO I'M A LITTLE PUZZLED BY THIS. LOOK, THIS IS AN ECONOMY THAT REALLY HAS BEEN ON FIRE. AND AS INFLATION IS COMING DOWN, AND IT WILL CONTINUE TO COME DOWN. TRUMP IS EXACTLY RIGHT ABOUT THAT. YOU ARE GOING TO SEE CONTINUED REAL EARNINGS GROWTH. THE ONE KIND OF POSITIVE THING THAT SHERYL WAS TALKING ABOUT IS IT LOOKS LIKE WE'RE CONTINUING TO SEE GOOD PAYMENT FOR PEOPLE, AND THEIR SALARIES ARE GOING UP FASTER THAN INFLATION. THAT'S GOING TO CONTINUE AS THE INFLATION RATE COMES DOWN. [00:06:42] Speaker 1: WE'RE GOING TO SEE WHAT WE'RE GOING TO DO. ABSOLUTELY. AVERAGE HURLY EARNINGS UP 3.5%. CHARLES PAYNE, YOUR REACTION TO [00:06:48] Speaker 7: THE NUMBERS? IT IS GOLDILACHES WITH RESPECT, AGAIN, TO HOW THE STREET IS TRYING TO ANTICIPATE WHAT IT MEANS FOR THE FED, WHICH, OF COURSE, ONE OF THE THINGS WARS IS SAYING, HEY, WE'RE GOING TO GET BACK TO A TIME WHEN YOU DON'T THINK ABOUT WHAT WE'RE DOING, YOU LOOK AT THE FUNDAMENTALS OF THE MARKET AND THE ECONOMY. BUT THAT BEING SAID, IT'S GREAT NEWS FOR THOSE WHO WANTED TO BREATHE A SIGH OF RELIEF. LEASURE HOSPITALITY, THERE'S SOME THINGS IN THERE THAT MIGHT HAVE BEEN WORLD CUP INFLUENCE AND THINGS LIKE THAT. SO, OVERALL, IT'S A SOLID NUMBER. IT POINTS TO AN ECONOMY THAT'S STRONG, THAT'S RESILIENT, THAT'S GROWING. UNEMPLOYMENT RATE WENT DOWN. SO, ALL IN ALL, IT'S FANTASTIC. AND I THINK THIS IS THE KIND OF THING THAT WARS WON'T GET IN FRONT OF. I THINK HE WILL ALLOW MAIN STREET AMERICA TO HAVE A RAISE AND FOR MAIN STREET AMERICA TO DO BETTER. [00:07:33] Speaker 1: YEAH. AND HE'S NOT GOING TO BE AFRAID OF GROWTH. THESE MARKETS ARE SURGING ON THE NUMBERS. MOHAMMED, YOU HAD THREE VERY SPECIFIC ITEMS THAT YOU WANTED TO LOOK AT. YOU WALKED US THROUGH THEM EARLIER. YOUR REACTION? [00:07:46] Mohammad El Arion: SO, PUT ALL THREE TOGETHER, THIS IS ABOUT THE SUPPLY SIDE OF THE LABOR MARKET, NOT THE DEMAND SIDE. THE DEMAND IS STRONG AND YOU SEE THIS IN HOURLY EARNINGS, 3.5%. THAT'S SOLID GROWTH IN HOURLY EARNINGS. WHERE IS THE WEAKNESS? SOMETHING IS HAPPENING ON THE SUPPLY SIDE, AS STEVE MOORE SAID. WE HAVE LABOR FORCE PARTICIPATION COMING DOWN BY 0.3 PERCENTAGE POINT, SO 61.5. WE NEED TO LOOK WHAT IS GOING ON THERE. IN TERMS OF THE FED, I WAS WITH CHARLES, YOU HEARD ME EARLIER THIS WEEK. I COULDN'T UNDERSTAND WHY THE MARKET WAS INTERPRETING NEW FED SHARE WASHES SO HAWKISHLY. WE CAME IN TODAY WITH THE MARKETS EXPECTING ONE RATE [00:08:22] Speaker ?: HIKE. [00:08:22] Mohammad El Arion: IT WAS ONE AND A HALF RATE HIKE EARLIER THIS WEEK. IT WAS ONE RATE HIKE. I SUSPECT NOW WE'LL SEE THAT EXPECTATIONS COME DOWN. SO IT'S GOOD NEWS FOR THE MARKET IN TERMS OF INTEREST RATES, IN TERMS OF NON-INFLATIONAL GROWTH, BUT WE'VE GOT TO FIGURE OUT WHAT'S GOING ON ON THE SUPPLY SIDE. YEAH, WE SPOKE TO BRIAN MORNING HAND YESTERDAY AND YOU [00:08:41] Speaker 1: KNOW THAT BANK OF AMERICA IS AMONG THE MOST AGGRESSIVE OUT [00:08:43] Speaker ?: THERE. [00:08:43] Speaker 1: THEY'RE TELLING CLIENTS TO EXPECT THREE RATE HIKE BY THE END OF THE YEAR. YEAH, I DON'T KNOW WHERE THAT COMES FROM, MARIA. IT WOULDN'T SURPRISE ME IF [00:08:52] Mohammad El Arion: THEY WERE GOING TO REVISE THAT DOWN. I THINK THEY WERE A LITTLE BIT TOO AGGRESSIVE IN THE THREE RATE HIKE. IT'S FUNNY, MARK. [00:09:01] Speaker 1: BUT, YOU KNOW, BRIAN WAS TALKING ABOUT WHAT HIS ECONOMISTS WERE TALKING ABOUT WITH THEIR PREDICTION. THEY TALKED ABOUT INFLATION LONGER TERM FOR THE REASONING BEHIND THE THREE RATE HIKE PREDICTION. YEAH, I DON'T SEE THAT. [00:09:14] Mark Tepper: SO PRIOR TO THIS NUMBER COMING OUT, I THINK ABOUT ONE WAS BEING PRICED INTO THE MARKET. I WOULD HAVE TO ASSUME THAT THAT'S GOING TO BE PRICED OUT WITH THIS 57,000 NUMBER FOR PAYROLLS. MARIA, THE BIGGEST THING THAT JUMPS OUT TO ME, AND I CAN'T FIGURE OUT HOW WE ARRIVED AT THIS MATH, BUT AS CHERYL SAID, IN LEISURE AND HOSPITALITY, WE LOST 61,000 JOBS THERE, LEADING UP TO THE WORLD CUP, WHICH DOES NOT MAKE ANY SENSE TO ME AT ALL. I ACTUALLY EXPECTED US TO COME IN WITH A BETTER NUMBER DUE TO THE INCREASED HIRINGS FOR, YOU KNOW, THE HOTELS AND THE RESTAURANTS AND ALL THE THINGS THAT ARE CONTRIBUTING TO THIS WORLD CUP CRAZE THAT'S TAKEN OUR COUNTRY BY STORM. YEAH, THAT'S TRUE. SO THAT IS A HEAD-SCRATCHING COMPONENT OF THIS WHERE I CAN'T MAKE SENSE OF IT. YEAH. [00:10:03] Speaker 1: IT'S LIKE THE ONLY AREA THAT ACTUALLY SAW JOB LOSSES. BUT, CHERYL, YOU ARE ALREADY SEEING THE BETS FALLING IN TERMS OF RATE HIKES THIS YEAR. YEAH, WE'RE SEEING THAT TRADE [00:10:12] Cheryl: INSTANTLY HAPPENING RIGHT AS THESE NUMBERS HIT THE TAPE, MARIA. YOU'RE SEEING THE BETS FALL NOW ON SHORT-TERM INTEREST RATE TRADERS SAYING THAT THEY'RE NOT GOING TO GET THE HIKES THAT THEY EXPECTED AS MUCH. IN PARTICULAR, THE PRICING WAS MORE ONE HIKE LATER IN THE YEAR. BUT, YOU KNOW, SOMETHING THAT WAS MENTIONED EARLIER IN THE PROGRAM I THINK WE SHOULD REVISIT IS THAT, YOU KNOW, KEVIN WARSH, AGAIN, IS THIS PERSON REALLY GOING TO COME IN AND PUSH FOR ANY RATE HIKES? NO. WE'RE SEEING THAT THE FEDERAL RESERVE IN THE NEXT COUNTRY IS THE FEDERAL RESERVE. BUT THIS GIVES HIM A BETTER CUSHIONING FOR HIS NEXT POLICY MEETING. AND SOMETHING ELSE THAT HE SAID IN HIS FIRST MEETING AS FEDERAL RESERVE CHAIRMAN, HE CITED THE STRONG JOB MARKET AT THE TIME. AND ALSO THEY WERE LOOKING AT REAL-TIME DATA. SO WHILE THIS DATA THAT WE'VE GOT TODAY IS, YOU KNOW, KIND OF IN THE BACK MIRROR NOW, THE TRUTH IS, THE REAL-TIME DATA SHOWS YOU'VE GOT A SOLID ECONOMY, CONSUMER SPENDING INFLATION. SO I THINK THAT THE FEDERAL STORY, THAT MACRO STORY, THAT MACRO STORY IS REALLY STRONG. AND I THINK ALONG WITH THE FACT THAT THE TRADERS ARE NOW SAYING [00:11:15] Speaker 1: THEY DON'T SEE AS MUCH OF A CHANCE FOR A RATE HIKE LATER IN THE YEAR. WELL, PRESIDENT TRUMP HAS BEEN CALLING IT THE GOLDEN AGE. I GOT TO TELL YOU, IT CERTAINLY IS FEELING THAT WAY, NANCY. ONCE AGAIN, WE'VE GOT STRONG ECONOMIC GROWTH, WE'VE GOT A STRONG EARNINGS PERIOD AND A MARKET THAT JUST WON'T QUIT. WHAT WOULD BE AN APPROPRIATE PORTFOLIO MANEUVER TO DO TO ENSURE THAT WE ARE PARTICIPATING IN THIS EUPHORIA? [00:11:42] Nancy Tangler: YEAH, I THINK YOU WANT TO BE LONG STOCKS. I THINK MARK IS 100% RIGHT ABOUT THAT. YOU PUT NEW MONEY TO WORK. AND YOU DON'T SHY AWAY FROM THE TECH TRADE BECAUSE THAT IS DRIVING FUTURE GROWTH. BUT I THINK IMPORTANTLY WE'RE ALSO OVERWEIGHT CONSUMER DISCRETIONARY, MARIA. WE SAW CONSUMER SPENDING UP 2.1% IN MAY TO A HISTORIC HIGH. AND WHAT WE ALSO SAW WAS THAT EVEN THOUGH ENERGY PRICES WERE UP, CONSUMERS WERE NOT SHYING AWAY FROM GOODS AND SERVICES PURCHASES. SO I THINK WHEN YOU ADD THAT TO THE FACT THAT THESE JOBS NUMBERS HAVE BEEN NOTORIOUSLY WRONG AND REVISED MATERIALLY IN THE FUTURE, I THINK WE HAVE TO STEP BACK AND SAY THE TREND IS IN THE RIGHT DIRECTION. THE JOLTS NUMBER IS TELLING US THAT THERE ARE PLENTY OF JOBS FOR PEOPLE THAT WANT TO WORK. AND WE KNOW THAT MANUFACTURING JOBS ARE GOING UNFILLED TO THE TUNE OF 529,000 IN THE U.S. SO THERE'S PLENTY OF ROOM FOR PEOPLE THAT WANT TO WORK AND PEOPLE THAT WORK SPEND AND SPENDING DRIVES THIS ECONOMY. [00:12:43] Speaker 1: YEAH, DID WE HEAR ANYTHING YESTERDAY, MOHAMMED, FROM KEVIN WARSH THAT STRUCK YOU WHEN HE SPOKE AT THE ECB MEETING IN PORTUGAL? THE THING THAT STRUCK ME THE [00:12:52] Mohammad El Arion: MOST IS THAT HE IS LEADING A MODERNIZATION OF CENTRAL BANKING AROUND THE WORLD. NOW WE HEAR THE PRESIDENT OF THE ECB, THE GOVERNOR OF THE BANK OF ENGLAND ALL FOLLOWING SAYING, YOU KNOW WHAT, WE'RE NOT SURE ABOUT FORWARD GUIDANCE ANYMORE. WE THINK THAT RATHER THAN HAVE FORWARD GUIDANCE, WE SHOULD HAVE FRAMEWORK GUIDANCE. WE'RE NOT SURE THAT HE WANTS FORWARD GUIDANCE, THIS IS ALL WORDS THAT KEVIN WARSH HAS BEEN USING. AND THIS SHOWS YOU THAT HE IS ACTING AS A CATALYST FOR MODERNIZING CENTRAL BANKING. AS TO OTHER THINGS, WE HEARD HIS ASSESSMENT OF THE ECONOMY, WHICH IS THIS IS A SOLID ECONOMY. BUT I THINK THE MOST INTERESTING THING IS HE IS GOING TO REFORM NOT JUST THE FED, BUT HE IS GOING TO HELP REFORM CENTRAL BANKING IN THE G7 ECONOMIES. [00:13:41] Speaker 1: YES, FOR SURE. AND HOW WOULD YOU ASSESS THE G7 ECONOMIES, MOHAMMAD? COMPARE THOSE ECONOMIES TO THE U.S. RIGHT NOW. [00:13:47] Mohammad El Arion: THERE IS NO COMPARISON. THE U.S. IS OUTPACING BOTH IN TERMS OF CURRENT CONDITIONS AND WHAT IS EXPECTED. [00:13:53] Speaker 1: YEAH. GREAT POINT. YEAH. AND THAT IS EXACTLY THE STORY TO CELEBRATE AS WE GO INTO THIS JULY 4TH HOLIDAY. MARK TEFFER, DO YOU WANT TO BROADEN OUT OR STAY WITH THOSE AI NAMES? [00:14:05] Mark Tepper: WELL, MARIA, I'LL TELL YOU, ONE OF THE THINGS THAT WE'VE ACTUALLY BEEN DOING OVER THE COURSE OF THE LAST MAYBE 4 TO 6 WEEKS IS WE HAVE TRIMMED SOME OF OUR -- I'M GOING TO SOME OF THEM MAYBE HIGHER GROWTH, MORE SPECULATIVE SEMICONDUCTOR NAMES. WE SOLD ST MICRO WHICH WAS UP TRIPLE DIGIT SINCE WE GOT INTO IT. WE SOLD SILICON MOTION WHICH WAS UP TRIPLE DIGIT SINCE WE GOT INTO IT. TOOK PROFITS. WE CONTINUE TO BE CONCENTRATED IN NVIDIA, BROAD COM, TAIWAN SEMI AND THEN WE ALSO OWN SMH WHICH IS THE SEMICONDUCTOR ETF AS WELL TO GAIN A LITTLE BIT OF EXPOSURE. BUT SO TO ANSWER YOUR QUESTION, YES, THE MARKET IS BROADING OUT WITHOUT A DOUBT. I MEAN, THE S&P WAS UP QUITE A BIT LAST QUARTER. BUT SMALL CAPS DID EVEN BETTER. SMALL CAPS WERE UP I THINK 22%. MICRO CAP STOCKS WERE UP LIKE 25%, 26%. SO YOU ARE SEEING SMALLER AND SMALLER COMPANIES PARTICIPATE IN THIS BULL MARKET RALLY WHICH IS CERTAINLY A HEALTHY SIGN TO SAY THE LEAST. [00:15:07] Speaker 1: CHARLES, HOW DO YOU SEE IT? [00:15:09] Speaker 7: I GOT TO TELL YOU, THIS WEEK WE SAW ROBOTIC STOCKS GO THROUGH THE ROOF. ABSOLUTELY THROUGH THE ROOF. QUANTUM STOCKS. YOU WANT TO BE IN THESE AREAS RIGHT NOW. YOU WANT TO BE IN MEMORY ON ANY PULLBACK. YESTERDAY THAT NEWS FROM META, YOU WANT TO BUY THE NEO CLOUD STOCKS ON WEAKNESS, RIGHT? AND BY THE WAY, I JUST WANT TO CHIME IN. THE MOST IMPORTANT THING I THINK THAT WARSH WAS SAYING OVER AND OVER AGAIN AND IT FELT INFECTIOUS TO MOHAMMAD'S POINT. HE TALKED ABOUT THIS LINE HERE. RIGHT NOW THEY ARE INVESTING. HE'S TALKING ABOUT U.S. BUSINESSES IN THE FUTURE BECAUSE THEIR EXPECTATIONS OF THE SUPPLY SIDE OF THE ECONOMY WILL EXPAND AND IT HAS HUGE IMPLICATIONS FOR MONETARY POLICY. HE'S SAYING INSTEAD OF BUYING STOCK, AMERICAN COMPANIES ARE POURING TRILLIONS OF DOLLARS INTO A FUTURE THAT THEY BELIEVE IS GOING TO BE VERY BRIGHT. SO MANY PEOPLE ON WALL STREET HANDWRINGING ABOUT, OH, THEY'RE GOING TO GET RETURN ON INVESTMENT. THEY BELIEVE IT'S GOING TO HAPPEN AND THEY'RE PUTTING THEIR MONEY WHERE THEIR MOUTH IS. WARSH APLAUS THAT IN PART BECAUSE HE BELIEVES AI IS GOING TO GIVE THE FED THE ROOM THEY NEED TO BE ACCOMMODATED DOWN THE ROAD. [00:16:07] Speaker 1: YEAH. I MEAN, THIS IS PROBABLY THE BIGGEST BOOM IN CAPITAL EXPENDITURES THAT WE'VE EVER SEEN, IF NOT SINCE THE INDUSTRIAL REVOLUTION WITH ALL THIS MONEY MOVING INTO AI WHICH IS WHY I'M QUESTIONING BANK OF AMERICA'S PREDICTION ABOUT THREE RATE HEIGHTS. THEY HAVE A DASHBOARD, [00:16:25] Speaker 7: MARIA, BUT I DON'T KNOW THEIR DASHBOARD, I THINK SEVEN OF TEN THINGS WERE TICKED OFF A MONTH AGO THAT SAID THE RALLY WAS OVER. IT'S TOO MECHANICAL, TOO BACKWARD-LOOKING. I LOVE THEIR RESEARCH. THEY'RE BRILLIANT PEOPLE OVER THERE. THEY'RE GOING ON A RIDGID SET OF CIRCUMSTANCES THAT DON'T APPLY RIGHT NOW IN MY OPINION. [00:16:43] Speaker 1: WELL, I ASKED BANK OF AMERICA CHAIRMAN AND CEO BRIAN MOINAHAN ABOUT IT. HOLD ON, HERE'S WHAT BRIAN MOINAHAN SAID ABOUT HIS ECONOMIST PREDICTING THREE RATE HIKES. HE JOINED ME YESTERDAY. WATCH. YOU JUST MENTIONED YOUR ANALYSTS AND EXPECTING THREE FED RISES. YOU'RE RIGHT. THIS IS THE MOST AGGRESSIVE CALL ON WALL STREET RIGHT NOW. YOUR FIRM PREDICTING THREE RATE HIKES. MEANWHILE, GOING INTO THIS NEW KEVIN WARSH FED, THE PRESIDENT THOUGHT IT WAS GOING TO BE RATE CUTS. NOW WE'RE TALKING ABOUT RATE HIKES. WILL THAT LEAD US INTO A RECESSION? [00:17:14] Speaker 8: NO, BECAUSE IN THE END OF THE DAY, THAT'S THE BALANCE THE FED HAS TO HAVE. THEY'RE TRYING TO KEEP THE INFLATION FROM GETTING OUT OF CONTROL, PRICE STABILITY. CHAIR WARSH MADE IT CLEAR, THAT'S WHAT HE STANDS FOR. AND BY THE WAY, HE'S AN INSTITUTIONALIST. HE BELIEVES THAT INSTITUTION. HE SERVED IN A LONG TIME AGO. IT'S NOT LIKE HE'S GOING TO WALK IN AND SAY, HE'LL MAKE REFORMS AND DO THINGS, BUT HE'S FOCUSED ON THAT. THAT'S THEIR JOB. BUT YOU ALSO HAVE TO BE MINDFUL THE OTHER SIDE, WHICH IS RECESSION MEANS UNEMPLOYMENT GOES UP AND YOU HAVE TO STABILIZE UNEMPLOYMENT. SO THEY'VE GOT TO MINE THAT. NOW, WHEN YOU TRAVEL AROUND THE WORLD, THE U.S. ECONOMY IS GROWING BETTER THAN MOST. THE INFLATION IS HIGHER THAN PEOPLE WANT IT TO BE. BUT WE SHOULDN'T. [00:17:53] Speaker 1: STEVE MOORE, WERE YOU GOING TO SAY SOMETHING BEFORE THAT? [00:17:57] Steve Moore: YEAH, I MEAN, HE'S JUST WRONG, WRONG, WRONG. I THINK WE HAVE A CONSENSUS INFLATIONARY. LOOK, WE ARE AT THE BEGINNING STAGES THAT IS ALREADY HERE, MARIA, IN A PRODUCTIVITY BOOM. AND THAT IS DISINFLATIONARY. AND LISTEN, YOU KNOW, I WATCH YOUR SHOW EVERY DAY. YOU'VE HAD BUSINESS MEN AND WOMEN ON WHO CONTINUE TO SAY THEY'RE ALREADY DEPLOYING AI. IT IS ALREADY REDUCING THEIR COST STRUCTURES. SO WHERE IS THIS IDEA THAT INFLATION IS GOING TO COME UP? I HAD ONE OF MY MEMBERS THIS SOMEBODY SHOWING THAT THEY LIVE IN TEXAS BUT THEY ARE PAYING LESS THAN $3 A GALLON IN GASOLINE. GAS PRICES ARE FALLING. ENERGY PRICES ARE FALLING. PRODUCTIVITY IS IMPROVING. SOMEBODY SHOW ME HOW THAT WOULD INSPIRE THE FED TO RAISE RATES. I'M GOING TO MAKE A BET TO YOU THE NEXT MOVE THE FED MAKES IS TO LOWER RATES NOT TO RAISE THEM. IT'S HARD TO QUESTION WHAT WE [00:18:54] Speaker 1: HAVE BEEN WATCHING UNFOLD HERE. WE HAVE AN ECONOMY THAT IS STRONGER THAN ANY OTHER ECONOMY THAT WE TALK ABOUT IN THE INDUSTRIALIZED WORLD. WE HAVE A MARKET THAT WILL NOT QUIT. HITTING UNCHARTED TERRITORY EVERY DAY. NEW RECORD HIGHS. INVESTORS ARE REACTING TO THAT MACRO STORY. CHERYL, THERE'S MORE TO COME. WE JUST CAME OFF OF AN INCREDIBLE FIRST QUARTER EARNINGS SEASON. WE'RE ABOUT TO GET SECOND QUARTER EARNINGS IN ABOUT TWO WEEKS. WHAT ELSE ARE WE GOING TO BE LOOKING AT IN TERMS OF CATALYSTS GOING FORWARD, CHERYL? YOU'VE GOT EARNINGS THAT STARTS THERE IN TWO WEEKS, MARIA, ABSOLUTELY. [00:19:24] Cheryl: WE'VE ALSO GOT ON JULY 14TH WE'RE GOING TO GET CPI FOR THE MONTH OF JUNE. IT WILL TELL YOU WHAT THE EXPECTATION IS YOU'RE GOING TO SEE A NEGATIVE NUMBER FOR POSSIBLY A COUPLE OF MONTHS HERE. AT LEAST ON THE MONTH TO MONTH BASIS BECAUSE OF THAT ENERGY STORY AND THE FACT THAT GASOLINE PRICES ARE FALLING. I MENTIONED THE CONFIDENT CONSUMER A FEW MOMENTS AGO. THAT IS BECAUSE THE DATA BACKS THAT UP. THERE WAS DATA COMING OUT YESTERDAY THAT SHOWED US THAT PEOPLE ARE FEELING BETTER BECAUSE THEY'RE SAYING THEIR GASOLINE, THEIR PUMP PRICES GO DOWN. THAT'S ONE THING. JULY 14TH YOU GET CPI. THE NEXT DAY YOU'RE GOING TO GET JUNE PPI. WE'RE GOING TO GET TOGETHER. WE'RE GOING TO GET THE FED MINUTES. REMEMBER, THIS WILL BE THE MINUTES OF KEVIN WORSH'S FIRST MEETING AS FOR A RESERVE CHAIRMAN. IT GIVES US JUST ANOTHER WINDOW INTO THE THINKING, THE DISCUSSIONS THAT ARE HAPPENING BEHIND THE SCENES. THAT NEWS ACTUALLY BREAKS ON CHARLES PAYNE'S SHOW. GIVE YOU A LITTLE, YOU KNOW, SHAMELESS PLUG FOR YOUR PROGRAM, CHARLES. THANK YOU. SO, ABSOLUTELY. SO, ALL OF THIS I THINK IS JUST GOING TO BE JUST A POSITIVE, POSITIVE, THE FEDERAL ECONOMIC PICTURE FOR THE COUNTRY. I STILL CAN'T EXPLAIN THE LEASURE HOSPITALITY STORY. I'M STILL LOOKING INTO IT, [00:20:37] Speaker ?: MARIA. [00:20:37] Cheryl: BUT I DON'T KNOW WHAT'S HAPPENING THERE. BUT WE'VE ALSO GOT [00:20:40] Speaker 1: VALUATION CONCERNS. LET'S NOT FORGET WHAT HAPPENED OVERNIGHT IN KOREA, MARK. OKAY? CAN WE LOOK AT THE ASIAN MARKETS FOR A SECOND? BECAUSE ONCE AGAIN, WE'RE LOOKING AT PEOPLE ROTATING OUT OF CHIP NAMES. AND THAT HIT THE KOREAN MARKET HARD OVERNIGHT. THE SOUTH KOREAN INDEX THAT WE LOOK AT EVERY MORNING DOWN 8% AS MORE PRESSURE CAME ON THOSE CHIP MAKERS. YOUR THOUGHTS ON WHAT'S GOING ON WITH THESE CHIP STOCKS? [00:21:05] Mark Tepper: WELL, I MEAN, YOU KNOW, OBVIOUSLY THERE'S A NARRATIVE OUT THERE NOW. ESPECIALLY, LOOK, META YESTERDAY DECIDED THEY WERE GOING TO START SELLING SOME OF THEIR EXCESS AI. AND THEN THE QUESTION BECOMES, WELL, WHY IS THERE EXCESS AI? I THOUGHT WE NEEDED -- I THOUGHT WE NEEDED IT ALL. I MEAN, THAT COULD BE FLOWING THROUGH AND DAMPENING INVESTOR EXPECTATIONS A LITTLE BIT. BUT, MARIA, ONE THING I WANT TO COMMENT ON ABOUT THE JOBS NUMBERS, YOU KNOW, THE ADP EMPLOYMENT REPORT DOESN'T GET NEARLY AS MUCH ATTENTION AS THE NONFARM PAYROLLS. BUT THE ONE THING I LIKE ABOUT THE ADP REPORT IS IT BREAKS DOWN WHAT'S HAPPENING UNDER THE SURFACE. SMALL BUSINESSES VERSUS MEDIUM SIZED BUSINESSES VERSUS LARGE BUSINESSES. THE ADP REPORT IS WHERE THE MAJORITY OF THE JOBS WERE [00:21:52] Speaker ?: ADDED. [00:21:52] Mark Tepper: THE ADP REPORT IS THAT THROUGHOUT PRESIDENT BIDEN'S PRESIDENCY, SMALL BUSINESSES WERE DYING. THEY WERE SHEDDING JOBS EVERY SINGLE MONTH. MEDIUM SIZED BUSINESSES WERE STRUGGLING. ALL THE JOB GAINS HAPPENED IN LARGE BUSINESSES WITH 500-PLUS EMPLOYEES. THIS MOST RECENT ADP REPORT, SMALL BUSINESSES AND MEDIUM BUSINESSES WERE WHERE THE MAJORITY OF THE JOBS WERE ADDED. THEY WERE TALKING ABOUT THE BUSINESSES. IF YOU WERE TALKING ABOUT THE GOVERNMENT AND TRUMP, ALL OF A SUDDEN, THE SMALL MOM AND POP SHOPS ARE DOING BETTER. THEY ARE FIRING ON ALL CYLINDERS. SMALL BUSINESSES BACK. MEDIUM SIZED BUSINESSES BACK. AND THAT IS REALLY THE HEART OF [00:22:28] Speaker 1: THIS COUNTRY AND THE HEART OF THIS ECONOMY. I THINK THEY ARE EXPENSING LIKE MAD RIGHT NOW BECAUSE OF WHAT WAS IN THE BIG BEAUTIFUL BILL. WHEN YOU ACTUALLY UNDERSTAND WHAT WAS IN THAT LEGISLATION, WHERE THE TAX CODE CHANGES BENEFITED AND ENCOURAGED BUSINESSES TO HIRE NEW WORKERS, TO INVEST IN INFRASTRUCTURE, INVEST IN R&D, THAT IS WHAT [00:22:57] Nancy Tangler: YOU ARE SEEING AND THEY ARE INFRASTRUCTURE. I THINK THE POINT ABOUT CAPEX IS AN IMPORTANT ONE BECAUSE WHEN I GREW UP IN THIS BUSINESS, IF YOU SPENT ON CAPITAL IMPROVEMENTS OR RESEARCH AND DEVELOPMENT, THAT TOLD THE MARKET THAT YOU WERE OPTIMISTIC ABOUT YOUR OWN COMPANY'S FUTURE AND YOU WERE DEVELOPING FOR THE FUTURE. NOW IT IS A PENALTY. I THINK MARK RAISES THE META QUESTION. META IS AN OUTLIER IN MY VIEW BECAUSE THEY BUILT TOO MUCH CAPACITY AND THEY DON'T HAVE ANY WAY TO MONETIZE IT. SO NOW THEY ARE GOING TO SELL IT YOU WANT TO PARTICIPATE IN THAT. IT IS A LOT OF OTHER HYPER SCALERS. I THINK THAT IS ALL GOOD. THE MARKET EQUALIZES EVERYTHING. STEVE IS 100% RIGHT ABOUT THE ONE BIG BEAUTIFUL BILL ACT. WE ARE SEEING COMPANIES SPEND AND THAT IS GOOD FOR THE ECONOMY BUT ALSO GOOD FOR THE FUTURE. WE LAUNCHED THEMATIC PORTFOLIO MARIA ABOUT A YEAR AGO THAT SPACE, ROBOTICS, QUANTUM AND NUCLEAR AND CHARLES TALKED ABOUT THE FUTURE. WE WANT TO PARTICIPATE IN THAT AND I THINK EVERY INVESTOR SHOULD BE. YEAH. [00:23:55] Speaker 1: CHARLES, I THOUGHT THAT THE GUEST EARLIER FROM UBS, OLIKE, WAS REALLY, REALLY ZEROING IN ON THREE SECTORS THAT SHE THINKS IS GOING TO BE LEADING THE BROADER MARKET. OBVIOUSLY IT WAS A.I. BUT IT WAS ALSO LONGEVITY. CHARLES, WE HAVE BEEN TALKING ABOUT LONGEVITY FOR A LONG TIME ON THIS PROGRAM AS WELL. WHETHER IT'S PHARMA OR WELLNESS OR NURSER OR WE'RE LIVING LONGER, WE'RE GETTING AHEAD OF DISEASE AND SHE'S LOOKING AT LONGEVITY AS A MAJOR INVESTMENT THEME. YOU'RE ABSOLUTELY RIGHT. I DID A TOWN HALL ON IT. IT'S ABSOLUTELY PHENOMENAL. BIOTECK STOCKS ARE DOING GREAT. FOR ME IT'S HARD TO FIND OUT [00:24:28] Speaker 7: WHICH ONES TO BUY. BUT I'VE SEEN -- AND IT'S ALSO MENTAL HEALTH. PSYCHEDELIC STOCKS THAT HAVE GONE FROM $6 TO $40. IT'S REALLY ABSOLUTELY AMAZING WHAT'S HAPPENING. ALL OF IT THOUGH IS PART OF THE FOURTH INDUSTRIAL REVOLUTION. IT'S NOT ABOUT HIGH TECHNOLOGY. IT'S ABOUT MEDICAL. IT'S ABOUT A BETTER PROSPERITY AND HEALTH FOR EVERYBODY. DON'T FORGET GLP-1. THAT'S ANOTHER ENORMOUS MARKET OPPORTUNITY. YEAH, WHICH IS A MIRACLE DRUG. YEAH, WHICH IS A MIRACLE DRUG. YEAH. IT'S NOT ABOUT HIGH TECHNOLOGY. IT'S ABOUT MEDICAL. IT'S ABOUT A BETTER PROSPERITY [00:24:55] Speaker 1: AND HEALTH FOR EVERYBODY. YEAH. AND DON'T FORGET GLP-1. THAT'S ANOTHER ENORMOUS MARKET OPPORTUNITY. YEAH. WHICH IS A MIRACLE DRUG. YEAH. WE SPOKE WITH THE CEO OF FISER YESTERDAY, ALBERT BORLE. HE JUST DID AN ACQUISITION TO LAUNCH FISER RIGHT IN THE MIDDLE OF THIS GLP-1 WAR. HE'S TRYING TO TAKE THE CROWN TO PARTICIPATE IN THE NATO SUMMIT IN TURKEY. YOUR THOUGHTS ON WHAT'S GOING TO BE THE CONVERSATION OF THE DAY [00:25:25] Mohammad El Arion: AT THAT NATO SUMMIT. SO I'LL TELL YOU WHAT THE CONVERSATION SHOULD BE IS ABOUT THE FOUR SECTORS OF THE FUTURE. AI, LIFE SCIENCES, ROBOTICS, AND QUANTUM. AND I'M REALLY GLAD THAT THIS SHOW TALKS ABOUT THEM. THERE'S GOING TO BE A LOT OF DISCUSSION, OF COURSE, ABOUT JEOPOLITICS. THERE'S GOING TO BE A LOT OF DISCUSSION ABOUT JEOECONOMICS. WHEN I READ, FOR EXAMPLE, I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. [00:26:27] Speaker 1: I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. I'LL TAKE A LITTLE BIT. YOU KNOW, ONE OF THE KEY POINTS OF SCOTT BESSENT WHEN WE WERE WATCHING HIM AT THE NEW YORK ECONOMIC CLUB THE OTHER DAY WAS SUPPLY CHAINS. THIS WAS HIS NUMBER ONE POINT. AND HOW AMERICA CAN NO LONGER RELY ON PLACES LIKE CHINA TO MAKE THINGS THAT ARE CRITICAL TO THE ECONOMY AND OUR NATIONAL SECURITY, LIKE PRESCRIPTION DRUGS, LIKE SEMICONDUCTOR CHIPS MADE IN TAIWAN. I WANT TO TELL YOU WHAT YOUR THOUGHTS ARE AS THIS REPORT FROM THE FINANCIAL TIMES THAT OPEN A.I. HAS PROPOSED GOVERNMENT TAKE A 5% STAKE IN THE COMPANY. THAT WOULD BE VALUED AT ABOUT $40 BILLION, A 5% OWNERSHIP [00:27:11] Speaker ?: STAKE. [00:27:11] Speaker 1: APPARENTLY CEO SAM ULTMAN REPORTEDLY RAISED THE IDEA IN CONVERSATION WITH PRESIDENT TRUMP AND SENIOR OFFICIALS AND THE CONCEPT IS TO ENSURE THAT AMERICANS HAVE A STAKE IN THE WEALTH CREATED BY A.I. IN THE FACE OF ALL THIS PUSHBACK FROM THE BERNIE SANDERS OF THE WORLD. I WANT TO TAKE A LOOK AT THE COUNTRY. [00:27:30] Steve Moore: I WANT TO TAKE A LOOK AT THE COUNTRY OR BUILDOUT. THEY WANT A MORATORIUM ON IT. WELL, THERE'S A LOT THERE. FIRST OF ALL, THERE IS A SKILLS -- I DO THINK THERE'S A SKILLS DEFICIT IN THE UNITED [00:27:42] Speaker ?: STATES. [00:27:42] Steve Moore: I THINK THAT MAY ACCOUNT FOR WHY THIS NUMBER WASN'T BETTER. I WANT TO TAKE A LOOK AT THE EMPLOYEES. I WANT TO TAKE A LOOK AT THE EMPLOYEES THAT IT WAS MAKING BECAUSE EMPLOYERS DO WANT TO [00:27:51] Speaker ?: HIRE. [00:27:51] Steve Moore: SO YOUNG PEOPLE GET THE SKILLS YOU NEED. DON'T GET A PHILOSOPHY DEGREE. GET A DEGREE IN SOMETHING WHERE YOU'RE REALLY HELPING THE ECONOMY. THAT'S POINT NUMBER ONE. POINT NUMBER TWO, I ALMOST NEVER DISAGREE WITH YOU AND CHARLES. BUT I THINK YOU'RE COMPLETELY WRONG. I THINK WE'RE GOING TO BE CONSIDERING. THE OTHER THING WAS TO PRIVATIZE, TO GET GOVERNMENT TO SELL ASSETS, NOT TO BUY ASSETS. WE DO NOT WANT THE GOVERNMENT TO BE OWNING OUR PRIVATE SECTOR RESOURCES. I THINK IT'S TERRIBLE. IT'S GOING TO LEAD TO CORPORATE WELFARE. I THINK IT'S GOING TO HAPPEN. WHEN THE GOVERNMENT PICKS WINNERS AND LOSERS, I'VE BEEN DOING THIS FOR 40 YEARS. THEY PICK LOSERS. THEY DON'T PICK WINNERS. WE HAVE INCREDIBLY EFFICIENT COMPANIES THAT ARE PRICING THESE ASSETS IN A GREAT WAY. THAT'S ONE OF THE REASONS THE UNITED STATES ECONOMY IS THE BEST IN THE WORLD. BUT NO, WE DON'T WANT THE GOVERNMENT OWNING PRIVATE SECTOR COMPANIES. BECAUSE ONCE THEY DO, CHARLES AND MARIA, YOU KNOW WHAT? THEY'RE GOING TO START DICTATING WHAT THEY DO. HOW MANY -- YOU KNOW, THEY'RE GOING TO HAVE ALL THESE KINDS OF REGULATIONS ON THEM. I THINK IT'S A BAD IDEA. [00:28:48] Speaker 7: I CAN TELL YOU RIGHT NOW, THOUGH. [00:28:50] Speaker 1: LET ME JUST JUMP IN. WE SAW IT PLAY OUT, CHARLES. WHEN PRESIDENT TRUMP CAME OUT AND TOLD THE DEFENSE COMPANIES DON'T PAY DIVIDENDS. DON'T BUY BACK STOCK. WE HAVE MUCH MORE URGENT ISSUES HERE. WE NEED MASS PRODUCTION OF OUR DEFENSE EQUIPMENT. SO THAT'S ONE OF THOSE THINGS THAT YOU WORRY. LOOK, I THINK IT IS A SLIPPERY SLOPE. I REALLY DO. BUT I UNDERSTAND THE NEED TO HAVE A STAKE IN THINGS THAT ARE CRITICAL TO NATIONAL SECURITY, CHARLES. [00:29:15] Speaker 7: TAKE IT AWAY. IT'S NUTS. IT'S NOT -- THERE'S NO SUCH THING AS WE DON'T LIVE IN A VACUUM, RIGHT? CHINA IS SUBSIDIZING THESE CRITICAL INDUSTRIES TO THE TUNES WHERE THEY TAKE ALL MARKET SHARE AND ALL JOBS ALONG WITH IT. THIS TORPEADO, STEVE, YOUR NOTION OF REINDUSTRIALIZATION. WHY ARE WE EVEN PUSHING REINDUSTRIALIZATION? BECAUSE WE ALLOWED CHINA TO TILT THE SCALES AND TO DOMINATE IN SECTORS THAT WE SHOULD HAVE DOMINATED IN. OUR PRIVATE SECTOR IS NOT POWERFUL ENOUGH TO STOP THE SUBSIDIES. RIGHT NOW APPLE IS TRYING TO BUY CHIPS. LISTEN TO THIS. THEY WANT TO BUY CHIPS FROM CHINA BECAUSE MICRON CHIPS ARE TOO EXPENSIVE. THREE YEARS AGO WHEN NO ONE WANTED MICRON CHIPS, THEY BEGGED APPLE. THEY SAID APPLE, PLEASE, PLEASE PAY US A LITTLE BIT MORE. AND TIM COOKES SAID POUNCE IN. SO, I MEAN -- THEY WANT TO BUY CHINA. [00:30:04] Steve Moore: THEY WANT TO BUY CHIPS. THEY WANT TO BUY CHINA. THEY WANT TO BUY CHINA. THEY WANT TO BUY CHINA. THEY WANT TO BUY CHINA. INDUSTRY UP TO INDUSTRY. LOOK AT THE UNITED STATES STOCK MARKET. [00:30:12] Speaker 7: LOOK AT OUR STOCK MARKET VERSUS CHINA. OUR STOCK MARKET IS DRIVEN BY EARNINGS. GUESS HOW THESE EARNINGS GO UP. LOWER COSTS. IF YOU FIRE ALL AMERICANS AND [00:30:23] Speaker 1: GET CHEAP LABOR OVERSEAS, YOU [00:30:25] Speaker 7: COULD HAVE THE HOTTEST STOCK [00:30:26] Speaker 1: IN THE WORLD AND NOBODY IS WORKING. THEY WANT TO BUY CHINA. THEY WANT TO BUY CHINA. THEY WANT TO BUY CHINA. THEY WANT TO BUY CHINA. LET'S NOT FORGET THE ELEPHANT IN THE ROOM HERE WHILE WE HAVE THIS DISCUSSION. EVER SINCE THE GOVERNMENT TOOK A 10% STAKE IN INTEL, THE STOCK IS UP ALMOST 500%. [00:30:43] Mark Tepper: SO OBVIOUSLY IN RETROSPECT, THE MOVE WORKED FOR THE ADMINISTRATION. MARIA, IF YOU -- [00:30:48] Speaker 1: WHAT ABOUT SOLYNDRA? THE GOVERNMENT TOOK A HUGE SHARE IN SOLYNDRA AND WE LOST EVERYTHING. SOLYNDRA, SOLYNDRA WAS A CRITICAL TO U.S. ECONOMIC GROWTH AND TO U.S. NATIONAL SECURITY. SEMICONDUCTORS SURE ARE. MARIA, INTEL HADN'T MOVED IN 25 YEARS. IT WAS $20 IN 1998. [00:31:11] Mark Tepper: I MEAN, AND WE GOT IN FOR $20. THE U.S. GOVERNMENT INVESTED A 20 AND NOW THEY'VE 6XED THEIR MONEY. THAT'S INCREDIBLE. BUT I DO UNDERSTAND THE POINT THAT STEVE IS MAKING. IT'S A SLIPPERY SLOPE. YOU DON'T WANT GOVERNMENT [00:31:25] Speaker 1: TELLING YOU HOW TO GOVERN YOUR BUSINESS AND YOU DON'T WANT GOVERNMENT SAYING, LOOK, ALLOCATE CAPITAL THIS WAY AND NOT THAT WAY. I GET IT. GO AHEAD. ADMINISTRATIONS CHANGE AND I THINK THAT'S WHAT YOU'RE REFERENCING, MARIA. ADMINISTRATIONS DO CHANGE. [00:31:38] Cheryl: IF YOU SET UP CORPORATIONS TO BE A STEWART OF THE GOVERNMENT, THAT SLIPPERY SLOP COULD COME TO FURWISH NOT NOW BUT YEARS FROM NOW. NANCY IS NOT SAYING A WORD. I THINK I KNOW WHERE SHE STANDS ON IT. [00:31:51] Speaker 1: GO AHEAD, NANCY. JUMP IN. I THINK I KNOW WHERE YOU STAND ON THIS. GO AHEAD. I WILL SAY THAT I THINK THE [00:32:00] Nancy Tangler: OPEN AI OFFER IS A SIGN OF WEAKNESS. THIS IS A COMPANY THAT THEIR MANTRA AT THE CORPORATE LEVEL IS FOCUS. I DON'T KNOW WHY THAT NEEDS TO BE A MANTRA. THEY PULLED THEIR IPO. THEY STARTED ALL SORTS OF BUSINESSES THAT THEY'VE HAD TO MOVE AWAY FROM. SO I ACTUALLY AM LEANING AND ALWAYS HAVE AND WILL ON THE SIDE OF WHAT STEVE IS SAYING BECAUSE WE HAVE A HISTORY OF THIS. IT'S NOT JUST SOYLINDRA. IT WAS CHRYSLER BACK IN THE DAY. THERE ARE MANY TIMES WHEN THE GOVERNMENT DOES STEP IN. AND BECAUSE WHAT CHERYL SAID IS TRUE, ADMINISTRATIONS CHANGE. YEAH. I DON'T KNOW THAT I WANT THESE DECISIONS IN THE HAND OF SOMEONE SAY I DON'T KNOW WHO'S NEVER HAD A REAL JOB AND IS NOW RUNNING THE COUNTRY. YEAH, THAT'S RIGHT. I THINK THAT'S THE OPTION. WE WON'T USE ANY NAMES. [00:32:47] Speaker 1: EVERYBODY, THANK YOU SO MUCH. MOHAMMED ELLARIAN, NANCY TANGLA, STEVE MOORE, CHARLES PAIN, MARK TEPPER, SHERYL KUSSONI. GREAT CONVERSATION. HAVE A SAFE AND BEAUTIFUL 4TH OF JULY.