US Stock Rally Set to Stall; GOP Hits SALT Snag; Qatar Economic Forum | Bloomberg Brief 05/20/2025

>> GOOD MORNING FROM OUR HEADQUARTERS IN LONDON. I’M KRITI GUPTA IN FOR DANI BURGER. LET’S SET YOUR AGENDA THIS MORNING.

PRESIDENT TRUMP SAYS UKRAINE AND RUSSIA WOULD BEGIN CEASE-FIRE TALKS SOON AND WARNS THE U. S. WOULD BACK AWAY IF A DEAL IS NOT REACHED.

THE PRESIDENT PLANS TO RALLY HOUSE REPUBLICANS UNITE BEHIND HIS TAX BILL. AND MOUNTING RISKS. JAMIE DIMON WARNING HIS TARIFF COMPLACENCY AND CRACKS IN THE CREDIT MARKET AS ODDS OF A DOWNTURN RISE.

LET’S SEE HOW IT FACTORES INTO THE MARKETS. THE FUTURES PICTURE -- I’M NOT SEEING PANIC IN THE EARLY INDICATIONS. THE NAZ DECK 100 SEEMS TO BE WHERE THE SPAIN DOWN ABOUT .

4%. IN TERMS OF WHAT THE TONE IS, SOME OF THE STOCKS TO WATCH. WE’LL LOOK THE BOND MARKET.

WE ARE SEEING A BID INTO THE U. S. TREASURY MARKET.

ONLY DOWN BY ONE BASIS POINT ACROSS THE CURVE. THAT IS SOMETHING YOU’RE SEEING AS A TRACE OF YESTERDAY’S MOVE. BLOOMBERG’S JOE EITHER EASTON IS STAND BIG.

GOOD MORNING. JOE: GOOD MORNING. WE ARE SEEING SOME OF THE STOCKS GAINING.

SOME SLIPPING. WHAT I HAVE MY EYE ON IS ALPHA BETS AHEAD OF THIS CONFERENCE FROM GOOGLE WHERE THEY ARE GOING TO BE SHOWING OFF THEIR NEW AI FEATURES ACCORDING TO ANALYST PRAIKSES. BGOOGLE UP AROUND 0.

3% IN THE PREMARKET. TAKE A LOOK AT UNITED HEALTH. A BIG GAIN IN THAT STOCK YESTERDAY.

UP AROUND 8%. THE BIGGEST GAIN IN FIVE YEARS. THE COMPANY CONTINUING TO TRIM THOSE LOSSES.

AGO IN NEWS OF THE PROBE INTO THE MEDICARE BUSINESS AND FINALLY LOOKINGED A UBS, THE SWISS LENDER, $25 BILLION OF CAPITAL ON ITS BOOKS. THE BLOOMBERG FINANCE TEAM IS REPORTING THEY ARE POTENTIALLY GOING TO LOSE THEIR LATEST ATTEMPT TO LOWER THAT NUMBER IN TERMS OVER THE CAPITAL REQUIREMENT. AS USUAL, ALL OF THESE STORIES AND MORE AVAILABLE ON THE BEFORE THE BELL OPENING WRAP WHICH WILL BE AVAILABLE ON THE TERMINAL SHORTLY.

KRITI: WALKING US THROUGH SOME OF THOSE EARLY MOVERS. CBS STORIES FASCINATING. THANK YOU SO MUCH JOE.

COMING UP THIS HOUR, WE ARE LIVE FROM THE QATAR ECONOMIC FORUM. RYAN LANCE OF CONOCOPHILLIPS WILL BE JOINING THE PROGRAM THE PROGRAM SHORTLY. AND ERIK NELSON, WE’LL BE GETTING HIS VIEW IN JUST A MOMENT.

PRESIDENT TRUMP SPARKING FEARS OF U. S. DISENGAGEMENT.

SAID TRUCE TALKS WOULD BEGIN IMMEDIATELY BETWEEN KYIV AND MOSCOW. AFTER A NEARLY TWO-HOUR PHONE CALL WITH HIS RUSSIAN COUNTERPART DONALD TRUMP WARNED HE IS GOING BACK AWAY IF A DEAL IS NOT RELEASED. >> BIG EGOS INVOLVED.

I THINK SOMETHING GOING TO HAPPEN. IF IT DOESN’T, I WILL JUST BACK AWAY AND THEY WILL HAVE TO KEEP GOING. I DO HAVE A CERTAIN LINE.

I DON’T WANT TO SAY WHAT THAT LINE IS BECAUSE IT NATION NEGOTIATION MORE DIFFICULT THAN IT IS. >> PRESIDENT OF THE UNITED STATES SPEAKING ABOUT THE FUTURE OF THE RUSSIAN AND UKRAINIAN CONFLICT. BLOOMBERG’S RUSSIAN ECONOMY EDITOR JOINS US.

JUST YOUR INITIAL THOUGHTS ON HOW THIS PHONE CALL WENT. IS THAT A POSITIVE THAT HE IS STAYING THERE IS GOING TO BE SOME SORT -- SAYING THERE IS GOING TO BE SOME SORT OF PHONE CALL, DIALOGUE OR IS THE U. S.

PERHAPS TAKING A STEP BACK? HOW ARE YOU THINKING ABOUT IT? >> WELL, THE OPTIMIST WOULD SAY IT IS A GOOD THING THAT RUSSIA AND UKRAINE ARE NEGOTIATING.

THAT MAY LEAD TO AN AGREEMENT THAT WOULD END THE WAR BUT REALISTICALLY THAT WASN’T ONE UKRAINE AND EUROPE WAS HOPING FOR FROM THIS CALL. THEY WERE HOPING THAT TRUMP WOULD PUT PRESSURE ON PEUT ON THE AGREE TO AN UNCONDITIONLE CEASE-FIRE. PUTIN CLEARLY DIDN’T WANT TO DO THAT.

TRUMP WAS EXPECTED BY EUROPE AND UKRAINE TO THREATEN SANCTIONS ON PUTIN TO PUSH HIM TOWARD THAT POSITION. HE SAID HE WILL MAYBE WALK ASTAY WITH THEY CAN’T HAVE A DEAL. RUSSIA STARTED THIS WAR.

KRITI: TALK TO US ABOUT THE ROLE OF THE EUROPEANS THOUGH. IT IS SO TELLING THAT TRUMP NOT ONLY SAID HE HAD A PHONE CALL WITH PEUT AND ZELENSKYY AND SOME OF THE -- PUTIN AND ZELENSKYY. WHO TAKES THE LEAD IF NOT DONALD TRUMP?

>> YES, THE EUROPEANS ARE PRETTY -- ACTUALLY HAS TO BE SAID. THEY WERE HOPING AND THEY THOUGHT THEY HAD THE U. S.

ON THE SAME PAGE AS THEM ESSENTIALLY BUT IF YOU REMEMBER THEY ISSUED THIS ULTIMATUM THAT PUTIN SHOULD AGREE TO A CEASE-FIRE A WEEK AGO, IF NOT NEW SANCTIONS WOULD BE IMPOSED. THAT LINE CAME AND WENT AND IT TURNED OUT THAT TRUMP WAS NOT ON THE SAME PAGE AS EUROPE. IT IS HARD TO SEE WHO STEPS UP AS TRUMP STEPS BACK.

THE GERMAN CHANCELLOR IS ANGLING PAR THIS POSITION. FRANCE’S MACK VON CONSIDERED ONE OF THE FLEERSDZ THE EUROPEAN POSITION IN TRYING TO GET TOUGHER ON RUSSIA. PART OF THE PROBLEM IS THEY DON’T HAVE AN AGREED TO POSITION THAT EVERYONE WILL SIGN UP TO.

THEY ARE DISSENTING OVER THE IDEA OF TOUGHER SANCTIONS. KRITI: SOMETHING WE’RE GOING TO KEEP A VERY CLOSE EYE ON. EUROPEANS CAN PERHAPS CONTINUE TO HOLD THAT OR THE P.

THANK YOU SO MUCH FOR THAT CRUCIAL CONTEXT. THE POLICY COMING OUT OF WASHINGTON AND FOCUS INWARDS IF WE CAN. HOUSE REPUBLICANS FILING HASH OUT AN AGREEMENT ON A TAX BILL THAT SATISFIES SOME REPRESENTATIVES FROM HIGH TAX STATES.

MIKE JOHNSON ENDED A LATE NIGHT MEETING YESTERDAY WITH SOME OF THE HOLDOUTS. JOSHUA JOINS THUS MORNING. WALK US THROUGH DETAILS HERE.

HOW SHOULD WE BE THINKING ABOUT POTENTIAL TAX CUTS COMING DOWN PIKE? >> THE RECENT DEVELOPMENT SHOW WHAT A DIFFICULT COALITION THE REPUBLICANS HAVE TO BRING TOGETHER ON THIS. TYPICALLY TAX CUTS ARE A MAINSTAY OF REPUBLICAN POLICIES BUT WHAT WE’RE SEEING HERE IS THAT NOT ONLY THE LEVEL OF TAX CUTS BUT THE TARGETED CUTS IN SPEND ARRANGE DIVIDING COALITION.

SO A COUPLE OF THE MAIN POINTS THAT ARE GOING TO HAVE TO BE RESOLVE REASONABLE DOUBT A BIG ONE IS THE STATE AND LOCAL TAX DEDUCTION IN THE 2017 BILL THAT TRUMP MADE THESE TAX CUTS THAT ARE SET TO EXPIRE THIS YEAR. THEY LOWERED THE CAP. THEY PUT A CAP, A $10,000 CAP ON STATE AND LOCAL DEDUCTIONS FOR STATE INCOME TAXES.

STATES LIKE NEW YORK, CALIFORNIA, NEW JERSEY, REPUBLICAN REPRESENTEDDIVES ARE GETTING PRESSURE FROM THEIR CONSTITUENTS TO RAISE THAT CAP. THEY ARE NOT GOING TO GO ALONG WITH A BILL THAT DOESN’T LIFT THAT CONSIDERABLY. WHEN YOU TALKING ABOUT THE LEVEL OF CUTS THEY WANT TO DO OVER THE COURSE OF 10 YEARS, $3.

8 TRILLION. TRUMP IS HEADED TO THE CAPITAL TO BRING THEM TOGETHER. HE IS UP AGAINST SOME PRETTY STAUNCH OPPONENTS OF THAT PART OF THE BILL.

KRITI: CAN YOU TELL US WHAT HAPPENS IF THIS BILL MOVES FORWARD? IS THAT A GUARANTEED YES TO A LOT OF THOSE FEARS THAT THE DEFICIT IS GOING TO WIDEN AT A FASTER PACE THAN EXPECTED? >> WELL, NOTHING IS GUARANTEED AND OF COURSE THE ADMINISTRATION SAYS THAT YOU KNOW, THIS BILL WILL -- THIS LAW WOULD SPUR ECONOMIC GROWTH AND ECONOMIC GROWTH CHRIS TAX REVENUES AND THEREFORE DEFICIT WOULD NOT WIDEN.

THAT IS THEIR STICKING POINT BUT ECONOMIC ANALYSIS, THE YOU KNOW, TAX ANALYSIS BASICALLY SHOWS THEY ESTIMATE THAT THIS WOULD WIDEN THE DEFICIT BY TRILLIONS OF DOLLARS AS MUCH AS 3. 3 TRILLION. THAT WOULD BRING THE DEBT RATIO TO GDP UP NEAR 7% IN THE COMING YEARS SO -- AND WE HAVE SEEN TREASURY MARKETS REACTING AGAINST THAT SHOWING THAT INDEED THE MARKETS THINK THAT THIS BILL WOULD CREATE A GREAT DEAL OF BURDEN ON PUBLIC FINANCES.

SO YOU KNOW, AGAIN, THAT IS ANOTHER PART OF REPUBLICAN COALITION THAT IS GOING TO BE TOUGH TO BRING ALONG HERE. THERE ARE HAWKS IN THEIR FISCAL HAWKS THAT DON’T WANT TO SEE THE DEFICIT WIDEN. KRITI: ABSOLUTELY.

HOW DO YOU DO THE MATH AROUND TARIFF VOLATILITY AND THE IMPACT TO HAVE DOGE STORY AS WELL? THANK YOU FOR WALKING US THROUGH DYNAMICS. COMING UP MORE FROM THE QATAR ECONOMIC FORUM.

AN EXKLUSE I CONVERSATION WITH RYAN LANCE COMING UP NEXT. YOU’RE LOOKING AT A LIVE PANEL AT THE QATAR ECONOMIC FORUM, CURRENTLY A CONVERSATION, THE FORMER EGYPT FOREIGN MINISTER AND AMBASSADOR TO THE UNITED STATES AND OUR EDITOR IN CHIEF JOHN NICKELSON. YOU CAN CATCH THE CONVERSATION ON YOUR BLOOMBERG TERMINAL.

>> DAVID ALSO MENTIONED IRAN. TAKING THAT FORWARD. NOW THAT SYRIA HAS BEEN BROUGHT INTO THE FOLD DO YOU THINK THIS IS A CHANCE OF IRAN ALSO BEING BROUGHT BOOK IS THE FOLD?

>> THERE IS PROBABLY A BIT -- OVEROPTIMISTIC. THERE IS A CHANCE THERE COULD BE A NUKE DEAL THAT DOESN’T HAVE SOME OF THE SHORTCOMINGS OVER THE PREVIOUS NUCLEAR DEAL THAT COULD ENABLE THE LIFTING OF SANCTIONS, PROGRESSIVELY AND SO FORTH AS CONFIDENCE IS BUILT AND THAT COULD LEAD TO THEM BEING A MORE CONSTRUCTIVE PLAYER IN THE REGION THAN THEY CERTAINLY HAVE BEEN FOR MANY DECADES NOTING ALL THE DAMAGE THAT HAS BEEN DONE BY THEIR APPROXIMATIES IN THIS REGION. AND STILL BEING DONE BY THE HOUTHIS WHO HAVE STILL NOT RESOLVED THE ISSUES THERE.

SO I THINK IT IS AN OPPORTUNITY THAT ALL ARE WORKING AS HARD AS THEY CAN TO ACHIEVE. YOU CAN SEE THE NARROWING OF THE DIFFERENCES BETWEEN THE U. S.

POSITION AND THE IRANIAN POSITION. NO ENRICHMENT WHATSOEVER AS THE U. S.

OPENING MAYBE THAT ENDS UP BEING FOR THREE YEARS AND THEN YOU HAVE AN OPPORTUNITY TO DO SOMETHING SMALL. BUT YOU CAN ACTUALLY SEE THIS DEAL STARTING TO COME TOGETHER. AND ASSUMING IRAN THEN ALSO STOPS SOME OF THE TERRIBLE ACTIVITIES THAT THEY ARE DOING THROUGH PROXIES IN THE REGION WHICH HAVE BEEN SO DESTABILIZING THEN YOU CAN START TO SEE CONTOURS OF SOMETHING THAT COULD BE MUCH MORE POSITIVE.

>> DO YOU THINK THE REGIME KRITI: THIS IS "BLOOMBERG BRIEF. " I’M KRITI GUPTA IN LONDON. WE HEAD BACK TO THE QATAR ECONOMIC FORUM IN DOHA.

FRANCINE? FRANCINE: THANKS SO MUCH. I’M DELIGHTED TO BE JOINED BY RYAN LANCE OF CONOCOPHILLIPS.

THANK YOU FOR JOINING US. TALKING ABOUT DEMAND AND SUPPLY. FIRST OF ALL HOW DO YOU SEE U.

S. SHALE EVOLVING IN TERMS OF PRODUCTION GIVEN THE PRICES? >> YEAH, THE CURRENT PRICE DECK, YOU HAVE TO ASK THE QUESTION WHAT IS GOING TO BE THE SUSTAINED KIND OF PRICE?

IF THE PRICE IS GOING TO REMAIN IN THE 50’S ON A SUSTAINED BY AS IS FOR A PERIOD OF TIME, IT IS PROBABLY GOING TO START TO SLOWLY DECLINE. IF IT STAYS IN THE 60’S RANGE IT IS PROBABLY GOING TO -- A BIT. IF IT GOES BACK TO THE HIGH 60’S AND 70’S, WE’RE PROBABLY BACK ON A GROWTH TRAJECTORY FOR A COUPLE OF YEARS.

BUT SHALE IS MATURING. THOSE THAT DON’T HAVE ACERAGE LIKE OUR COMPANY DOES WILL START TO SEE THAT DETERIORATE. YOU’LL SEE THAT DURING PRODUCTION LATER THIS DECK NAID THE U.

S. FRANCINE: DO YOU THINK U. S.

SHALE PRODUCTION HAS PEAKED? >> NO, I DON’T. WE HAVE AN VOIRTD THAT IS PRETTY AN INVENTORY THAT IS PRETTY DURABLE OVER THE LONG HAUL.

HIGH 60’S TO 70’S YOU SEE SOME MODERATED GROWTH COMING BACK IN U. S. SHALE.

FRANCINE: YOU TOLD ME IT LOOKED LIKE THIS DOWNTURN IS DIFFERENT THAN 2015 AND 2020. WHAT IS SO DIFFERENT ABOUT IT? >> WHAT IS DIFFERENT IS WE ARE SEEING AN EXPECTATION O OF DEMAND FALLING OFF WITH SOME OF THE TRADE AND GEO-POLITICAL THINGS GOING TODAY.

WE DOANT DON’T BELIEVE A RECESSION IS GOING TO BE -- WE HAVE SEEN GDP BACK OFF A LITTLE BIT. THERE IS AN EXPECTATION OUT THERE THAT THINGS ARE GOING TO SLOW THAT CAUSES THE PRICE TO GO DOWN. PLACING DOWNWARD PRESSURE ON THE PRICE.

THIS ONE FEELS A LOT DIFFERENT THAN 2015 OR 2020. FRANCINE: I KNOW TARIFFS AND TRADE WARS HAVE SETTLED SOMEWHAT. WHAT KIND OF IMPACT HAVE YOU SEEN ON THE INDUSTRY LONG-TERM?

>> IT’S BEEN JUST A SMALLER IMPACT. FOR U. S.

COMPANIES TODAY, MOST OF THE IMPACT IS IN STEEL AND ALUMINUM, ABOUT 15% TO HAVE COST. THE OVERALL DEFLATION COMING AS A RESULT OF LOWER PRICES IS JOSEPING, THE INCREASED COST MAYBE EXPERIENCING SOME OF THE -- IN TARIFFS TODAY. OVERALL THE LOWER PRICE IS CAUSING DEFLATION, RIG RATES ARE COMING DOWN.

RIGS ARE COMING DOWN. YET THERE IS A ABOVE IT STICKINESS SITTING IN STEEL AND ALUMINUM. IT IS THOSE BIG HIGH QUALITY PRODUCTS, THINGS THAT ARE MANUFACTURED IN THE U.

S. THAT WE HAVE TO IMPORT FROM OUTSIDE THE U. S.

FRANCINE: HOW DO YOU SEE LNG? >> I THINK IT IS GOING TO BE A REMARKABLE -- OUR IN-HOUSE VIEW IS A LOT OF GROWTH IN THE LNG COMPANY. A 400 MILLION TON MARKET GROWING OVER 700 MILLION TONS OVER THE NEXT DECADE AND BEYOND.

THE U. S. IS BLESSED WITH TREMENDOUS AMOUNT OF GAS RESOURCES.

WE CAN DO REASON IS EXPORT CHANNEL. PROBABLY THAT $3 TO $450. THE U.

S. LET THE PRICES AROUND THE WHOLE GLOBE. WE’RE PRETTY BULLISH ON WHAT THE LNG MARKETS ARE GOING TO BE.

NOT ONLY FROM A SECURITY AND SUPPLY PERSPECTIVE BUT FROM AN EMISSIONS LIFE CYCLE PERSPECTIVE AS WELL ALMOST. FRANCINE: DO YOU WORRY ABOUT CAPEX NOT ENOUGH WILL BE INVESTED? >> C >> COMMODITY PRICES.

THIS BUSINESS IS ABOUT RETURN ON CAPITAL THAT YOU’RE INVESTING. YES, LOWER CASH FLOWS AND LOWER CAPITAL THAT WE CAN REINVEST IN THE BUSINESS. WE TAKE A LONG-TERM VIEW THERE.

THE VALUE INDUSTRIES ARE MUCHOVA BETTER. WE HAVE THE ABILITY AS AN INDUSTRY AND COMPANY TO WITHSTAND SOME OF THE CYCLES THAT WE’RE GOING THROUGH. FRANCINE: AS A COMPANY WHERE YOU L YOU INVEST MOST AND IN WHAT TIME FRAME?

>> WE ARE PROBABLY SCATTERED AROUND THE WHOLE GLOBE. NORTH AMERICA, THE UNCONVENTIONALS GET A LOT. WE’RE TRYING TO GROW THE LNG BUSINESS IN THE U.

S. AND HERE IN CAN TAR. WE’RE TRYING TO GROW INTO AN EXEN PANNED LNG BUSINESS.

WE’RE ABOUT LOW COST AND SUPPLY, WHERE IT IS AT, GAS AND OIL, IN THE U. S. AND GLOBALLY.

WE’RE TRYING TO GROW IT IN THE LONG HAUL. WE’RE TAKING A CONSTRUCTIVE VIEW. INVESTING IN OUR SHORTER CYCLE SHALE INVESTMENTS AS WELL.

FRANCINE: IF YOU LOOK AT SHALE PRODUCTION IN THE U. S. WHAT DOES IT MEAN FOR AUSTRALIA AND QATAR?

>> YOU MIGHT THINK WE’RE COMPETING BUT WE’RE REALLY COOPERATING THE LOT. THE NATURAL MARKET FOR THE U. S.

LN DISBRCH PRIMARILY INTO THE EUROPEAN MARKETS AND QATAR IS -- THEY CAN GO INTO THE ASIAN MARKETS AND EUROPEAN MARKETS. THEY ARE SUPPLYING SOME OF THE ASIAN MARKETS AND THE U. S.

IS SUPPLYING THE EUROPEAN MARKET. YOU LOOK OVER THE NEXT DECADE AND COLD AND BEYOND BETWEEN THE U. S.

AND QATAR. I HOPE AUSTRALIA GETS BETTER. NOW WE’RE TALKING ABOUT A PLACE ABOUT EXPORT CONTROLS IN AUSTRALIA.

IT IS AN AMAZING JUXTAPOSITION WHAT’S HAPPENING TODAY. I HOPE AUSTRALIA WAKES UP AND DOES SOMETHING DIFFERENT GOING FORWARD AS WELL. FRANCINE: PRESIDENT TRUMP HAS BEEN CLEAR HE WANTS LOWER OIL PRICE OR AT LEAST AT THESE LEVELS.

HOW MUCH DOES IT COMPLICATE IT FOR A COUNTRY LIKE QATAR THAT HAS LINKED OIL TO LNG PRICES? >> YOU CAN LINK LNG TO WHATEVER YOU WANT TO. IT IS GOING TO TAKE A CERTAIN PRICE TO GET A COMPETITIVE RATE OF RETURN ON THE INFRASTRUCTURE THAT YOU’RE BUILDING.

QATAR LEAKS TO OIL LINK THEIR PRICES. IN THE U. S.

IT IS TYPICALLY LINKED OFF OF HENRY HUB. IT TAKES A CERTAIN PRICE TO INCENTIVIZE TO BUILD THIS INFRASTRUCTURE AND BUILD THE SHIPS REQUIRED TO TRANSPORT IT. AND GET A COMPETITIVE RETURN ON THAT INVESTMENT.

I DON’T SEE THAT AS A LOT OF COMPETITION. IF YOU HAVE HIGHER PRICES YOU NEED A HIGHER SLOPED CONTRACT. WFRANCINE: RYAN LANCE, THANK YOU SO MUCH.

THE CHIEF EXECUTIVE OF CONOCOPHILLIPS. WITH THAT, BACK TO YOU IN LONDON, KRITI. PLENTY MORE THROUGHOUT THE DAY.

KRITI: FRANCINE LACQUA THERE WITH RYAN LANCE GIVING US INSIECT ON HOW HE SEES THE WORLD. COMING UP, A LOOK AT WHAT ELSE IS MAKING HEADLINES AROUND THE WORLD. WE’RE GOING TO DIVE INTO IT.

STICK WITH US. THIS IS BLOOMBERG. KRITI: THIS IS "BLOOMBERG BRIEF.

" I’M KRITI GUPTA IN LONDON. TIME FOR OUR FRONT PAGE NEWS. A LOOK AT HEADLINES AROUND THE WORLD.

FIRST UP ON THE FINANCIAL TIMES CHINESE BATTERY GIANTS SURGING IN ITS DEBUT IN HONG KONG. THE BIGGEST LISTING THIS YEAR RAISING $4. 6 BILLION DESPITE BEING BLACKLISTED BY THE PENTAGON.

THEY SUPPLY BUSINESSES TO TALK TO YOUR CUSTOMER. TESLA, VOLKSWAGEN, FORD AND MERCEDES-BENZ. NEXT UP ON THE WALL STREET JOURNAL, HOUSE MEMBERS TRY TO ADVANCE PRESIDENT TRUMP’S AGENDA OF TAX CUTS AND SPENDING REDUCTIONS BUT THE PARTY IS STILL SPLIT.

PRESIDENT TRUMP PLANNING TO SPEAK TO THE CONFERENCE ON CAPITOL HILL. DISAGREEMENTS REMAIN OVER THREE DIFFERENT ISSUES. LIFTING SALT CAP, MEDICAID WORK REQUIREMENT AS WELL AND THE JUSTICE DEPARTMENT SURGING A DEMOCRATIC HOUSE LAWMAKER WITH ASSAULT.

REPRESENTATIVE LAMONICA MCI’VE CHARGED OUTSIDE A PRIVATE DETENTION CENTER. MCI’VE SAID IN A STATEMENT THE CHARGES WERE PURELY POLITICAL. COMING UP, WE FOCUS BACK INTO THE MARKETS.

WELLS FARGO’S ERIK NELSON. HOW DO WE NAVIGATE THE TRADE STORY IN THAT CONVERSATION? KRITI: FROM OUR HEADQUARTERS IN LONDON, WELCOME TO "BLOOMBERG BRIEF.

" I’M KRITI GUPTA IN FOR DANI BURGER. LET’S SET YOUR AGENDA. STEPPING ASIDE, PRESIDENT TRUMP SAYS UKRAINE AND RUSSIA WOULD BEGIN CEASE-FIRE TALKS SOON, POSSIBLY WITHOUT THE UNITED STATES LEADING THE CHARGE.

AND POTUS ON CAPITOL HILL. THE PRESIDENT PLANS TO RALLY HOUSE REPUBLICANS TO UNITE BEHIND HIS TAX BILL AS SPEAKER JANE FAILS TO GET A DEAL. ECONOMIC CONCERNS PILE UP.

DAVID RUBENSTEIN JOINS THE CHORUS OF U. S. DEFICIT RISKS.

YOU’RE SEEING FEATURES ON THE BACK FOOT THIS MORNING. NASDAQ WHERE THE PRESSURE IS. S&P FUTURES DOWN .

4%. A QUICK CHECK ON THE BOND MARKET AS WELL. DEFICIT CONCERNS START TO FREAK OUT THE LONG GAME.

30-YEAR YIELD MARGELY MOVING HIGHER IN TERMS OF A SELLOFF. WHAT DOES THAT TELL YOU ABOUT ASSUAGE FEAR? MY GUESS IS NOT VERY MUCH.

JOE EASTON JOINS THUS MORNING. JOE: A MIXED PICTURE IN TERM TURNOVERS MAG 7 TODAY. WE ARE SEEING A FEW STOCKS GAINING.

GOOGLE, ALPHABET THE ONE STANDING OUT. THERE IS A BIG AI CONFERENCE TODAY IN CALIFORNIA. THEY ARE GOING TO SHOW US WHAT THEY ARE GOING TO ROLL OUT IN TERMS OF THAT AI.

WHETHER L THAT BE INCORPORATED INTO THE OTHER PART OF THEIR SERVICES AND UNITED HEALTH AGAIN YESTERDAY AR A GAIN AROUND 8%. WE SAW THE CRIMINAL PROBE RELATED TO MEDICARE. PICKING UP $25 MILLION WORTH OF STOCK YESTERDAY HELPING TO BOOST SENTIMENTS AND UBS SLIDING IN THE PREMARKET ON A BLOOMBERG REPORT SAYING THE COMPANY IS STRUGGLE TO RELIEVE SOME OF THE ISSUES RELATED TO CAPITAL HOLDINGS.

THEY ARE GOING TO HAVE TO HOLD ABOUT $25 BILLION ON THE BOOKS. UBS AROUND 2% IN THE FREE MARKET THIS MORNING. KRITI?

KRITI: FASCINATING ONE. UBS TRYING FIGHT THE CURVE. WE THANK YOU SO MUCH.

LET’S BROAD THEN OUT AND TALK ABOUT MAYBE THE LOOMING RISK ACROSS THE STOCK MARKET, THE BOND MARKET. WHAT CAUGHT EVERYONE’S EYE LAST FRIDAY INTO THE WEEKEND WAS THE MOODY’S DOWNGRADE. CONCERNS AROUND A BALLOONING DEAF SUBMIT THE THE STATES.

LET ME BRING YOUR ATTENTION TO JAPAN. TO SEE SOMETHING WE TALK ABOUT VERY OFTEN ON THE SHOW. LET’S GO IT.

THE JAPANESE 20-YEAR AUCTION, THIS IS A VERY NERDY TOPIC TO KEEP YOUR EYE ON. BUT THE BID TO COVER RATIO, THE DEMAND, THE WORST SINCE 2012. WHY DO WE CARE ABOUT THIS?

BECAUSE THIS IS ULTIMATELY THE SAME DEFICIT STORY IN THE STATES THAT FREAKED EVERYONE OUT ON MONDAY THAT IS FREAKING THE OTHER SIDE OF THE WORLD OUT THIS TIME AROUND. YOU ARE SEEING IT BECAUSE A LOT OF -- A GOOD CHUNK OF THE WORLD IS DEALING WITH THOSE DEFICIT CONCERNS. THE U.

S. , JAPAN, WE’LL THROW EUROPE IN THERE AS WELL. HOW DO YOU TRADE IT, ESPECIALLY WHEN THOSE TRADE WORRIES WITH LOOMING IN THE BACKGROUND?

ERIK NELSON HAS ALL THE ANSWERS. HE JOINS US AROUND THE TABLE THIS MORNING. ERIK, I’M CONFUSED.

DONALD TRUMP IS GOING TO CAPITOL HILL TODAY. HE IS TRYING TO GET THIS TAX BILL ACROSS THE FINISH LINE. TRYING TO GET THESE TAX CUTS ACROSS THE FINISH LINE AND YET THE DEFICIT IS STILL A CONCERN.

ISN’T THIS THE EXACT CONVERSATION WE HAD TWO YEARS AGO IN SEPTEMBER OF 2023. WHY DOES THE MARKET CARE NOW? >> WELL, A LOT’S CHANGED IN THREE, FOUR MONTHS.

RIGHT? I DON’T KNOW IF YOU REMEMBER WE WERE TALKING ABOUT THREE, THREE, THREE. SCOTT BESSENTS SAID BRING THE DEFICIT DOWN A COUPLE OF POINTS.

KRITI: YOU’RE THAT OLD? >> IT HAS COMPLETELY CHANGED. YOU CAN PUT THE DOGE BEING A HUGE NEEDLE MOVER BEHIND US.

WHY NOW? GROWTH IN THE U. S.

IS SLOWING DOWN. OBVIOUSLY WE HAVE SOME CONCERNS AROUND PEOPLE GLOBALLY KIND OF MOVING AWAY FROM U. S.

ASSETS AND THE U. S. SORT OF CONGRESS, EXECUTIVE ARE ALL COLLECTIVELY SAYING LET’S GO AHEAD AND PUSH ON WITH 7% DEFICITS FOR THE NEXT COUPLE OF YEARS.

LET’S FORGET ABOUT BIG SPENDING CUT AND REIGNING IN TAXES. THERE IS NOT A LOT OF INTEREST HERE EVEN FROM SOME OF THE HARDLINERS, BORDER LINE HARDLINERS ON BRINGING DEFICIT IN. THAT LACK OF REGARD HAS BECOME FULL CIRCLE SAND FRONT AND CENTER.

IT WAS HIGHLIGHTED BY THE MOODY’S DOWNGRADE ON FRIDAY EVEN IF THAT WAS OLD NEWS IN TERMS OVER THE ACTUAL CHANGE. KRITI: DOES THAT MEAN YOU DON’T WANT TO TOUCH THE LONG END OF THE CURVE IN ANY JURISDICTION? >> MAYBE NOT ANY JURISDICTION.

WE HAVE TO TAKE ACCOUNT OF THE CENTRAL -- IF YOU LOOK AT GERMANY, THE FISCAL DEFICIT SHIFT THERE IS LONG-AWAITED. IT IS A TEXTBOOK CASE FROM WHERE YOU WANT STIMULUS. RIGHT?

JUND UNDERUTILIZE CAPACITY. YOU’RE LOOKING AT A VERY DIFFERENT SITUATION THERE THAN IN THE U. S.

WHERE GROWTH IS SLOWING. THERE IS THE CASE FOR CONTINUED FISCAL STIMULUS AT THESE LEVELS IS LESS OBVIOUS. ALSO IN THE CENTRAL BANK SIDE, THE U.

K. , ACTIVELY SELLING GILTS. REMARKABLE IF YOU THINK ABOUT IT.

NOT TERRIBLY SURPRISING TO SEE UNDERPERFORMING. KRITI: DOES THE BOJ STAKE A STEP BACK AND SET THE TONE FOR THE REST OF THE WORLD? LET ME PLAY DEVILS ADVOCATE IF I CAN.

COULD THESE RETURNS BE OVERBLOWN? THEY CAN’T ACTUALLY QUANTIFY THE IMPACT OF TARIFFS OR DOGE JUST YET. THE ARGUMENT THAT THE PRESIDENT AND HIS ADMINISTRATION IS MAKING THAT THESE TAX CUT ALSO ULTIMATELY BE FUND BID TARIFF REVENUE AND SPENDING CUTS FROM THE FEDERAL GOVERNMENT.

IS IT FAIR TO SAY THAT IS STILL A POSSIBILITY? >> IT IS POSSIBLE. I GUESS YOU KNOW, TWO QUESTIONS KIND OF COME ABOUT, ESPECIALLY LOOKING AT THE TARIFF REVENUE AS A CONTRIBUTOR TO THE FISCAL OUTLOOK.

HOW LONG ARE THESE TARIFFS GOING TO REMAIN IN PLACE? THIS IS A QUESTION THAT IS ON THE MINDS OF THE CBO AND ON THE MINDS OF FOREIGN INVESTORS AND INVESTORS EVERYWHERE. CAN WE COUNT ON THIS REVENUE OVER THE LIFE OF OUR INVESTMENT OVER A SUSTAINED PERIOD OF TIME?

WHAT IS THE GROWTH IMPACT? IS IT NEGATIVE ENOUGH TO MAKE A DIFFERENCE ON PUSHING SPENDING HIGHER ON THINGS LIKE UNEMPLOYMENT AND SO ON AND SO FORTH? IT IS NOT A STRAIGHTFORWARD PICTURE ON HIGH REVENUE FROM TARIFFS.

KRITI: FROM AN INVESTMENT STAPTD, FROM A TRADING MACRO ALLOCATION STANDPOINT, IF YOU HAVE IT, NOT YOU BUT IF AN INVESTOR WERE SET ON THE IDEA THAT THE DEFICIT IS GOING TO BE AROUND FOR SOMETIME, WHEN DOES THAT KIND OF BOND-DOLLAR CORRELATION SNAP BACK GIVEN THAT NOW THEY ARE MOVING IN OPPOSITE DIRECTIONS? >> I THINK IT WILL ULTIMATELY THE QUESTION HERE IS WHAT’S DRIVING THE DOLLAR IN TERMS OF ACROSS THE CURVE AND WHAT PART OF YIELD CURVE? IT IS ALWAYS EVERYWHERE NEAR THE FRONT END.

WHAT IS THE FED DOING? WHAT IS GROWTH DOING? IF GROWTH SLOWS DOWN MEANINGFULFULLY THE U.

S. AND WE SEE MAYBE NOT A RECESSION BUT JUST A 1% OR 1. 5% OPPOSED TO 2%.

THE DOLLAR IS GOING TO COME DOWN ON THAT. JUST A CYCLICAL SLOWDOWN. THE REST OF THE WORLD DOES RELATIVE TERMS OK.

THINKING ABOUT MORE OF THE LONG END AND THE RELATIONSHIP TO THE DOLLAR THERE. EVERYONE ASKS ARE WE GOING TO SEE LIZ TRUSS? THE NAME ALWAYS COMES UP.

WE HAVE TO KEEP IN MIND THE COMPONENT OF THAT CRISIS IN 2022 WHICH YOU JUST DON’T HAVE IN THE U. S. CAN WE SEE SOME WEIRD ERUPTIONS SHORT-TERM?

SURE. WILL R-WE GOING TO SEE A 10% DROP IN DOLLAR? I’M NOT SO SURE.

KRITI: WE GOT SOME HEADLINES COMING OUT OF THE E. U. APPROVING THE SANCTIONS AGAINST RUSSIA.

THIS HAS BEEN IN THE WORKS FOR SOMETIME AS THE E. U. DOUBLES DOWN ON SOME OF THE PRESSURE ON RUSSIA WHICH BRINGS ABOUT ANOTHER QUESTION.

IF THE DOLLAR IS BECOMING LESS EXCEPTIONAL AND THESE FUND FLOWS ARE FINDING THEIR WAY INTO EUROPE, HOW SUSTAINABLE IS THAT? >> WELL, I THINK IT IS PERFECTLY SUSTAINABLE. JUST LIKE IT TAKES A LONG TIME, RIGHT?

SO WE TALK TO A LOT OF BIG ASSET MANAGERS AND PEOPLE WHO ARE KIND OF DRIVING SOME OF THESE BIG FLOWS. THE GENERAL SENSE IS WE’RE TALKING ABOUT IT. WE’RE NOT TAKING SIGNIFICANT OR QUICK ACTION.

RIGHT? THAT IS REALLY THE KEY. IF YOU LOOK AT PERFORMANCE ALLOCATION, ETC.

OVER TIME, THE GENERAL TREND HAS BEEN MOVING AWAY FROM DOMESTIC MARKETS AND TOWARD THE U. S. IT COMES IN THE FORM OF YES TO, SOME EXTENT GOING INTO EUROPE, EQUITIES, BONDS AND ALSO BRINGING MONEY HOME WHETHER THAT IS CANADA, JAPAN OR ELSEWHERE.

KRITI: A BIT OF REPATRIOTATION MOVING INTO THE MARKET THERE. ERIK. LET’S GO BACK TO DOHA WHERE WE ARE LIVE AT THE QATAR ECONOMIC PANEL.

EXCUSE ME, ECONOMIC FORUM. SPEAKING TO A PANEL ON THE BALANCE OF RISK AND REWARD IN THE FINANCIAL MARKETS. YOU CAN HOW DO YOU KNOW IN TO LIVEGO.

THE UNDERWRITER TO HAVE QATAR ECONOMIC FORUM POWERED BY BLOOMBERG. >> THE TRUMP ADMINISTRATION DOESN’T LIKE "GOVERNMENTS TO MEDDLE TOO MUCH WITH THEIR CURRENCIES. " SINGAPORE IS A SPECIAL CASE.

I JUST WONDER TO WHAT EXTENT THAT HAS TO BE FACTORS INTO YOUR DECISION MAKING IN AN ENVIRONMENT WHERE THE DOLLAR SEEMS TO BE WEAKENING? >> SO WE MANAGED ACCORDING TO -- AND SO IT IS NOT PRIMARILY THE U. S.

DOLLAR. BASKET OF CURRENCIES THAT WE MANAGE AGAINST. WE MANAGE IT AGAINST -- AND WE ARE ON AN APPRECIATING SLOPE.

GENERALLY APPRECIATING AGAINST OUR TRADING PARTNERS. AND WITHIN THE BASKET. WE’RE NOT OVERLY CONCERNED ABOUT THE BILATERAL EXCHANGE RATE WITH ANY ONE CURRENCY THERE.

THERE IS REGIME FOR US TO MANAGE WITHIN THAT. GENERALLY OVER DECADES WE HAVE BUILT UP CREDIBILITY IN OUR MONETARY POLICY REGIME THAT MARKET PARTICIPANTS WILL TAKE OUR SIGNAL AND USUALLY THE MARKET WILL BRING AND YOU KNOW, HELP US MEND THAT POLICY AND BRING US TO WHERE WE NEED TO BE. >> YOU AND I WERE ON A NATIONAL DAVOS A COUPLE OF MONTHS AGO TALKING ABOUT THE OUTLOOK FOR BANKING THIS YEAR AND ALL OF THE PANELISTS WERE EXCITED ABOUT THE PROSPECTS OF HAVING A PRO GROWTH ADMINISTRATION, WHAT THAT WOULD MEAN FOR THE BANKING SECTOR AND YOU ACTUALLY USED THE TERM WE HAVE A WAR CHEST THAT WE’RE READY TO DEPLOY.

HAVE YOU DEPLOYED THE WAR CHEST? HOW IS IT GOING? >> YES, NOT YET.

IS FIRST WANTED TO SAY I REALLY WANTED TO THANK MAYOR BLOOMBERG AND ALL OF THE BLOOMBERG ADMINISTRATION HERE FOR BRINGING THIS TO BE THE FIFTH ANNUAL ECONOMIC FORUM. IT IS A REALLY, REALLY IMPORTANT THING AND IN MANY WAYS BLOOMBERG IS OFTEN IN ADVANCE OF THE REST OF US AND SO -- AND YOUR EXCELLENCY THANK YOU SO MUCH FOR ALLOWING US TO BE WITH YOU HERE TODAY FOR THIS IMPORTANT DISCUSSION. JPMORGAN MORGANS HA BEEN IN THE REGION FOR 92 YEARS AND WE SERVE AGAINST 19 DIFFERENT COUNTRIES.

TODAY WE HAVE 370 PEOPLE HERE. PROBABLY ABOUT 500 IN THE COMING YEAR OR TWO. IT IS A VERY EXCITING PLACE FOR US TO BE AND AS A MATTER OF FACT I HAD MENTIONED WE ARE GOING TO HAVE THE JPMORGAN LEADERSHIP TEAM.

THERE IS ABOUT 700 OF US THAT ARE GOING TO COME AND KICK OFF THE YEAR OF 2026 RIGHT HERE IN THIS GREAT HOTEL. SO I THINK IT IS VAR EXCITING TIME FOR EVERYBODY TO BE THINKING ABOUT THIS AND I THINK IT VERY MUCH DOVE TAILS WITH ALL THE CONVERSATIONS THAT WE HAVE HAD. THE PRIME MINISTER MADE A GREAT POINT THAT THE WORLD CUP IS LIKE AN IPO OF THE COUNTRY AND YOU CAN FEEL IT WHEN YOU’RE HERE LIVE AND IN PERSON AND I JUST THINK THAT THERE ARE SO MANY THINGS HAPPENING IN WORLD WHERE IT IS A TIME OF GREAT RISK BUT IT IS A TIME OF GREAT OPPORTUNITY.

AND FIGURING OUT HOW TO NAVIGATE THAT IS REALLY IMPORTANT. THE CONVERSATION ABOUT THE DOLLAR IS AN EQUALLY IMPORTANT ONE. U.

S. EXCEPTIONALISM IS SOMETHING THAT THE U. S.

IS VERY PROUD OF AND BUT WITH THE WORLD ORDER CHANGING, AND RESHAPING ITSELF AS PEOPLE TRY TO FIGURE OUT WHERE THEY ARE, YOU HAVE 16 TRILLION DOLLARS WORTH OF FOREIGNERS IN THE U. S. STOCK MARKET AND JUST 1% OF THAT IS $160 BILLION MOVE IN THE U.

S. DOLLAR. SO THE THOUGHTS OF WHERE THE DOLLAR GOES, YOU REMEMBER BACK LAST AUGUST, WHEN THE YEN HAD ITS SHORT-TERM MOVEMENT PROBLEMS AND THE MARKETS HAD A VERY UNSETTLING RATTLED TIME PERIOD FOR A DAY OR TWO ESPECIALLY OVER THAT WEEKEND, AUGUST 7, I THINK IT WAS.

AND SO THESE ARE TIMES WHERE YOU REALLY HAVE TO THINK ABOUT WHAT IS THE RIGHT LONG-TERM ASSET ALLOCATION? YYOU HAVE BEEN VERY STRONG IN WEATHERING THE STORM. I DON’T IMAGINE RATING AGENCIES CHANGE WHAT PEOPLE ARE GOING TO THINK ABOUT ALLOCATING TO THE U.

S. VS. EUROPE VS.

ASIA AND OF COURSE HERE IN THE MIDDLE EAST. I THINK IT IS -- ONE OF THE OPPORTUNITIES. YOU LOOK AT THE GDP GULF COAST COUNTRY HERE.

WE HAVE 2. 5% RATE GOING NORTH. A LOT OF EXCITING THINGS.

TARGETS GROWING QUITE NICELY. YOU HAVE TO THINK ABOUT THAT FOR YOUR OVERALL ASSET ALLOCATION AND YOU HAVE TO THINK HOW MANY ASSETS DO I HAVE? KRITI: YOU CAN WATCH THE REST OF THE PANEL ON LIVEGO ON THE BLOOMBERG.

WOO GOING TO BRING YOU MORE MARKETS AND ANALYSIS AFTER THIS BREAK. STICK WITH US. THIS IS BLOOMBERG.

>> YOU MENTIONED IPOS. INTERVIEW WITH CONGRESSMAN JASON SMITH. THIS IS BLOOMBERG.

>> BIG EGOS INVOLVED. I’LL TELL YOU. BIG EGOS INVOLVED BUT I THINK SOMETHING IS GOING TO HAPPEN.

IF IT DOESN’T, I’LL JUST BACK AWAY AND THEY ARE GOING TO HAVE TO KEEP GOING. I DO HAVE A CERTAIN LINE BUT I DON’T WANT TO SAY WHAT THAT LINE IS. BECAUSE I THINK IT MAKES THE NEGOTIATION EVEN MORE DIFFICULT THAN IT IS.

KRITI: PRESIDENT TRUMP SPEAKING THERE AFTER A TWO-HOUR PHONE CALL WITH HIS RUSSIAN COUNTERPART, THE PRESIDENT WARNING HE IS GOING TO BACK AWAY IF A DEAL IS NOT REACHED SPARKING FEARS OF U. S. DISENGAGEMENT FROM PEACE TALKS BETWEEN RUSSIA AND UKRAINE.

JOINING US IS GREG SUL VANN. IS THIS A -- SULLIVAN. IS THIS A WIN FOR VLADIMIR PUTIN?

>> THAT IS A PRETTY FAIR CHARACTERIZATION OF THIS. WE HEARD FROM KYIV THEY WERE DEMANDING A 30-HOUR UNCONVENTIONAL CEASE-FIRE. THE U.

S. BACKED THAT DEMAND. THEN WE SAW AN AGREEMENT TO NEGOTIATE TOWARD A CEASE-FIRE, FAR FROM THE DEMAND THAT KYIV MADE.

COMING OUT OF THE CALL, WE DIDN’T SEE ANY AGREEMENTS ON A CEASE-FIRE. ANY MENTION OF SANCTION OR ADDITIONAL PRESSURE ON RUSSIA. LARGELY WHAT THIS DOES IS PLAY INTO PUTIN’S PLAY FOR TIME AS HE SEEKS TO MAKE BATTLEFIELD GAINS TO STRENGTHEN HIS POSITION AT THE NEGOTIATING TABLE.

HE IS REALLY TRYING TO ACHIEVE HIS DEMANDS THROUGH MILITARY FORCE AND THIS BASICALLY BUYS HIM MORE TIME. ADDITIONALLY, WE JUST HEARD FROM PRESIDENT TRUMP THERE THREATENING TO WALK AWAY FROM THE NEGOTIATIONS AND LEAVE THEM TO RUSSIA AND UKRAINE. THAT ALSO PLAYS INTO RUSSIA’S HANDS.

IN A LOT OF WAYS THIS WAS A BIG WIN FOR PUTIN COMING OUT OF THESE CALLS. KRITI: GREG SULLIVAN WALKING US THROUGH READOUT FROM DONNEL TRUMP’S PHONE CALL WITH VLADIMIR PUTIN. HE SPOKE WITH ZELENSKYY AND OTHERS AS WELL.

THANK YOU FOR THAT CRUCIAL CONTEXT. LET’S TALK ABOUT THE DOMESTIC POLITICS. ON CAPITOL HILL HOUSE REPUBLICANS FAILED TO AGREE ON THE PARTY’S LANDMARK TAX BILL AFTER SOME LATE NIGHT MEETINGS.

THEY CONTINUED TO FRUSTRATE HOUSE SPEAKER MIKE JOHNSON WHO HAS A SELF-IMPOSED DEADLINE AT THE END OF THE WEEK TO PASS THE BILL IN THE HOUSE BEFORE CONGRESS BREAKS FOR MEMORIAL DAY. JOSH, HOW CLOSE ARE WE TO A DEAL? WHAT ARE THE STICKING POINTS?

>> WELL, THERE ARE PRETTY BIG STICKING POINTS STILL THERE. IT IS HARD TO SAY HOW CLOSE THEY ARE TO RESOLVING THIS. THE MAIN STICKING POINTS ARE THAT THE, SOME LAWMAKERS FROM HIGH TAX STATES LIKE CALIFORNIA, NEW YORK, NEW JERSEY, THEY ARE LOOKING FOR BIGGER DEDUCTIONS, BIGGER FEDERAL DEDUCTIONS ON STATE AND LOCAL TAXES.

SO THIS IS REALLY IMPORTANT TO THEM. THEIR CONSTITUENTS FEEL VERY STRONGLY ABOUT IT. THEY HAVE HIGH PROPERTY VALUES AND HIGH PROPERTY TAXES AND HIGH INCOME TAX AND ARE PUSHING REALLY HARD FOR THIS.

RIGHT NOW LIMIT STANDS AT 30,000 AS A CAP AND SOME OF THEM ARE PUSHING FOR DOUBLE THAT. THAT IS A PRETTY BIG MOVEMENT. THESE SUPREME SAID THIS IS A NO-GO IF YOU DON’T RAISE IT.

ON THE OTHER HAND YOU HAVE PEOPLE COMING FROM LOWER INCOME AREAS WHO HAVE A LOT OF THEIR CONSTITUENTS WHO BENEFIT FROM NOT ONLY MEDICAID BUT ALSO FOOD SUBSIDIES FOR CHILDREN AND THOSE ARE THINGS THAT THIS BILL AIMS TO CUT SPENDING ON. SO THE -- THEY ARE FIGHTING VERY HARD FOR THOSE. THOSE GO IN TWO DIFFERENT DIRECTIONS.

ONE IS GOING TO BE A REVENUE PRODUCER AND ONE IS NOT. SO TRUMP IS HEADED TO CAPITOL HILL TODAY TRYING TO ROUND UP THE CAUCUS BUT I THINK THERE IS STILL A LOT OF WORK TO BE DONE. KRITI: A LOT OF WORK TO BE DONE ON THAT DEAL.

DOES IT ASSUAGE SOME OF THE MARKET CONCERNS AROUND THE DEFICIT OR BOOST SOME OF THE CONSUMER SPENDING THAT WE’RE SEEING A SLOWDOWN IN? JOSH WALKING US THROUGH DETAILS OF O THOSE CONVERSATIONS DUE TO HAPPEN ON CAPITOL HILL LATER TODAY. LET’S GO FROM THE POLITICS TO THE BUSINESS STORY.

HOME DEPOT SHARES FLAT IN THE MORNING. THE HOME IMPROVEMENT RETAILER REPORTING EARNINGS BEFORE THE BELL. ANALYSTS EXPECT SALES TO BE UNDER PRESSURE FROM HIGH PRICES AND TARIFF FEARS.

NOT UNLIKE WHAT WE HEARD FROM WAL-MART EARLIER. JENNIFER, WALK US THROUGH WHAT WE’RE WATCHING FOR WHEN IT COMES TO HOME DEPOT NUMBERS. >> WALL STREET IS EXPECTING IT TO BE A SLOW START TO YEAR FOR HOME DEPOT.

COMPARABLE SALES ARE EXPECTED TO SOFTEN IN FIRST QUARTER AT 2%. THAT COMES AFTER THEY FINALLY TURNED POSITIVE IN Q4 AFTER EIGHT CONSECUTIVE NEGATIVE QUARTERS. TWO MAIN REASONS, FIRST BEING WEAKENING CONSUMER SENTIMENT OVER HOW FAST CHANGING TARIFF POLICIES WILL AFFECT THE PRICE OF HOME PRODUCTS.

OF COURSE THEY ARE GETTING MORE EXPENSIVE. THAT IS GOING TO SQUEEZE TIGHT HOUSEHOLD BUDGETS. THE SECOND BEING HIGH INTEREST RATES AND HIGH HOME PRICES.

THAT HAS SLOWED DOWN SPENDING ON PROJECTS. CONSUMERS ARE NOT MOVING OR BUYING HOMES AS MUCH AS AS THEY USED TO. SOME OPTIMISTS ARE POINTING TO THE FACT THAT HALF OF ITS MERCHANDISE IS MANUFACTURED AT HOME SO IT IS NOT AS EXPOSED TO TARIFFS AS OTHER RETAILERS BUT IT IS GOING TO BE A LONG ROAD AHEAD FOR THE RETAILER.

KRITI: NOT UNLIKE WHAT WE HEARD FROM WAL-MART. VERY MUCH POSITIONED CLOSE TO EACH OTHER FOR THAT DIY CUSTOMER RETAIL AUDIENCE. COMING UP, WE’RE GOING GET YOU SET UP FOR YOUR TRADE TAKING.

MORE ABOUT EARNINGS COMING UP. STICK WITH US. KRITI: LOOK AT WHAT IS COMING UP TODAY.

HOME DEPOT IS GOING TO BE REPORTING BEFORE THE BELL. WE HAVE OUR EYES ON THAT. THE TARIFF IMPACT.

FINANCIAL CONFERENCE MARKETS PICKING UP. PRESIDENT’S REMARKS AT 9:00 A. M.

EASTERN. LIVE FROM DELL TECHNOLOGIES IN LAS VEGAS. WE’LL BRING YOU FULL COVERAGE.

A QUICK CHECK ON THESE MARKETS. WEAKNESS WHEN IT COMES TO THE FUTURES. S&P DOWN.

NASDAQ DOWN . 45% AND THE 30-YEAR YIELD AT 492. EURO-DOLLAR AT 11254.