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ALIX: WE ARE KICKING OFF TO THE CLOSING BELL BUT IT WAS A QUIET DAY. ROMAINE: I COULD FALL ASLEEP. CAROL: TWO DAYS -- ALIX: TWO DAYS IN A ROW, LACKLUSTER. VOLUME IS STILL QUITE LIGHT. WHERE YOU ARE SEEING ACTION IS GOLD, THE DOLLAR AND THE BOND MARKET. WE CONTINUE TO SEE THE DOLLAR AND BOND MARKET TRADING TOGETHER, BOTH LOWER, YIELDS UP, DOLLAR WEAKER AND GOLD PICKING UP TO THE DOWNSIDE. DOLLAR YIELDS AND GOLD TELL A SPECIFIC STORY OF ANXIETY. DISCOMFORT ABOUT U.S. DEBT CONTINUES IN THE MARKET. ROMAINE: A MENTORING BY SOME OF THE CORRELATIONS IN

THE MARKET PARTICULARLY IF YOU'RE TRYING TO FIND CONSENSUS ABOUT WHERE IT GOES NEXT. A BIT OF A FOOLS ERRAND BUT IT MAKES FOR A GOOD PARLOR GAME. THE RECENT STOCK RALLY OUTPACED FUNDAMENTALS, WE KNOW THAT. THE NASDAQ AND S&P LIPPING FROM OVERSOLD TO OVERBOUGHT IN JUST BARELY SIX WEEKS, AND CAUSING MORE CONCERN IS THE PULLBACK TODAY IS NOT BEING COUNTERED BY A BID TO BONDS OR TO THE DOLLAR. THAT CORRELATED THE DIP IN EARLY APRIL. KKR'S HENRY MCCRAY SAID GOVERNMENT BONDS ARE NO LONGER WORKING AS AN EFFECTIVE HEDGE. HE SAYS WITH BIGGER FISCAL DEFICITS AND

STICKIER INFLATION ON THE WAY, THE TRADITIONAL PYONGYANG WHERE BONDS SHOULD RALLY --YEN-YANG WHERE BONDS SHOULD RALLY IS NOT WORKING. >> MOVE GOT TO SEE A FUNDAMENTAL CHANGE IN THE SPENDING SYSTEM. ROMAINE: HE DIDN'T DIRECTLY REFERENCE THE MULTITRILLION DOLLAR TAX CUTTING MEDICAID SLASHING BILL IN CONGRESS, BUT WE WOULD BE REMISS TO NOT DRAW THE LINK. THE HOUSE SPEAKER TRYING TO END THE SQUABBLING AMONG THE LAST REMAINING REPUBLICAN HOLDOUTS NEEDED TO SQUEEZE THAT EGG, BEAUTIFUL BILL OUT THE DOOR, IT WAS A STANCE OF THE SUPPOSED TO PROVIDE EVEN MORE SUPPORT TO THE STOCK MARKET RALLY. ALIX: ARE

WE SEEING ACTUAL SUPPORT FOR THE EQUITY MARKET OR JUST POSITIONING? THIS CHART SAYS MAYBE WE HAVE RUN OUT OF STEAM. THE NASDAQ 100, YOU CAN SEE THE HUGE RALLY WE'VE SEEN SINCE EARLIER THIS YEAR. WE HIT THE BOTTOM IN APRIL. THE SECOND LINE IS THE OVERBOUGHT. WE HIT THAT LEVEL YESTERDAY. THE NASDAQ 100 OVER THE 70 RSI. WE ARE ALMOST TOUCHING 30 AT THIS POINT FUNDS LIKE CTAS AND VOLATILITY FUNDS HAVE ALREADY BOUGHT WHAT THEY NEEDED TO BUY. IS FOMO ENOUGH TO KEEP THE MARKET GOING OR WILL WE NATURALLY ROLL OVER IN THE ABSENCE OF

ACTUAL GOOD NEWS? ROMAINE: LET'S POSE THAT QUESTION TO OUR FIRST GUEST WHO JOINS US RIGHT NOW. DEPUTY CEO OF A GROUP WITH MORGAN STANLEY INVESTMENT MANAGEMENT TO KICK US OFF TO THE CLOSE. GREAT TO SEE YOU. WHEN YOU LOOK AT MARKET PRICING, PARTICULARLY THE LAST FEW WEEKS AND MAYBE WHEN YOU TAKE THE LAST COUPLE DAYS OUT, A LITTLE OFFKILTER. DO YOU GET A SENSE THAT THERE IS REAL CONVICTION IN BIDDING STOCKS HIGHER IN THE U.S.? >> I THINK THE MARKET HAS BEEN DOING OK INITIALLY BECAUSE THE FIRST QUARTER EARNINGS HAVE BEEN VERY DECENT AND THE

IMPLICATIONS ON BUSINESSES AND CONSUMERS IS STILL TO COME. I THINK WE HAVE TO WAIT AND SEE WHAT THE INDICATORS SUGGEST TO AGGRESSIVELY BY. THE CASE FOR INTERNATIONAL IS LOOKING MORE AND MORE COMPELLING AS DAYS GO BY IN THE MARKET AND DOLLAR. ROMAINE: LET'S GO THERE SINCE YOU TOOK US THERE. GREAT NOTES THIS MORNING TALKING ABOUT THE POTENTIAL OUTPERFORMANCE, CONTINUED OUTPERFORMANCE RELATIVE TO THE U.S. JP MORGAN HAD A BOLD CALL. DO YOU HAVE THAT SAME BULLISHNESS FOR EUROPEAN ASSETS? >> AND THINK IT'S IMPORTANT TO UNDERSTAND IN THE LAST EIGHT DECADES YOU HAD FOUR DECADES WITH INTERNATIONAL

OUTPERFORM AND FOUR DECADES WITH U.S. PERFORMANCE SO YOU CAN HAVE POINTS IN TIME THAT'S THE INTERNATIONAL SPACE STARTS OUTPERFORMING. EVEN OTHER MARKETS LIKE INDIA, OTHER EMERGING MARKETS, POCKETS OF JAPAN, THEY ALL LOOK VERY JUSTIN GIVEN WHERE THEY ARE FROM A RELATIVE GROWTH STANDPOINT. VALUATION AND MOST IMPORTANTLY ON THE ECONOMICS OF THOSE MARKETS WERE MONETARY AND FISCAL POLICY MIGHT GET MORE SUPPORTIVE AND THE REST OF THE WORLD RATHER THAN THE U.S. ALIX: BUT THEY DON'T HAVE TECH IN THE SAME WAY. I REALIZE NASDAQ IS DOWN 1% AND NOT THE BEST CASE BUT THE IDEA THAT U.S.

EXCEPTIONALISM HAS TO CONTINUE BECAUSE WE HAVE AI AND TECH? >> I THINK EVEN IN THE AI SPACE IT'S TIME TO BE LINKED TO DOCTORS OF AI AND I THINK YOU FIND POCKETS OF THOSE IN BUSINESS-TO-BUSINESS AND BUSINESS TO CONSUMER IN INTERNATIONAL MARKETS AS WELL. WHETHER IT IS ENTERPRISE SOFTWARE, CYBERSECURITY OR EVEN THE FAANG EQUIVALENTS IN INTERNATIONAL MARKETS, WHERE ARE THE MEDIA DIGITAL THAT FORMS OR MUSIC DIGITAL PLATFORMS OR E-COMMERCE DIGITAL PLATFORMS THAT ARE NOW PROTOTYPES OF SOME OF THESE EQUIVALENTS BUT IN OTHER INTERNATIONAL MARKETS? I THINK WE FIND ENOUGH OPPORTUNITIES IN THE TECH SPACE AND

EVEN OUTSIDE OF TECHNOLOGY WHERE DOMESTIC DEMAND AND FINANCIALS AND OTHER PARK IT'S -- POCKETS MIGHT BE LOOKING. ALIX: MY FAVORITE QUESTION IS WHY ARE YOU SO SHORT? [LAUGHTER] WE ARE GOING TO TAKE A WIDE SHOT. ROMAINE: I WILL ADJUST MY CHAIR. ALIX: WE'VE HEARD THE VALUATION PART FOR A WHILE SO WHY DOES IT NOW MAKES SENSE? >> TWO REASONS. AT THIS POINT IT'S THE EQUITY VALUATIONS AND CURRENCY VALUATIONS. I THINK GIVEN WHERE WE ARE IN THE DOLLAR AND THE REST OF THE G3 FX AND EMERGING-MARKET FX, THE VALUE OF THE CURRENCY IS AN IMPORTANT ELEMENT

AT THIS POINT. I THINK YOU FINALLY HAVE THE CATALYST TO UNLOCK THAT VALUATION. WE'VE BEEN -- RELATIVE VALUATIONS, WE'VE BEEN ARGUING EUROPE IS MUCH LOWER BUT NOW FISCAL PALACE -- FISCAL POLICY IS MORE POTENT. THE CONSUMER IS SITTING ON A BIGGER SURPLUS THAN THE U.S. ROMAINE: YOU WORRY ABOUT GEOPOLITICAL RISKS? I KNOW THERE ARE SOME TRADE ISSUES AND BUDGET ISSUES THAT HAVE BECOME FRONT AND CENTER, BUT WE STILL HAVE A LOT OF UNRESOLVED GEOPOLITICAL CONFLICTS THAT HAVE POTENTIAL RAMIFICATIONS GLOBAL TRADE IF THAT'S WHAT YOU ARE PURSUING. >> I DEFINITELY WORRY ABOUT IT AND THE PORTFOLIO

HAS GOT ENOUGH GEOPOLITICAL HEDGES IN THE FORM OF GOLD OR GAS, WHICH WOULD BECOME AN IMPORTANT COMMODITY TO ADDRESS THE TRADE DEFICITS WITH THE U.S., WHERE THE U.S. WILL SAY BUY FROM GAS -- BY SOME GAS FROM US. OR WHETHER IT'S DEFENSE NAMES. I THINK YOU NEED TO HAVE ENOUGH OF THAT IN THE PORTFOLIO TO OVERCOME SOME OF THE VOLATILITY. ALIX: WHAT OTHER PEOPLE ARE GOING TO BUY FROM US IS STUFF YOU WOULD LIKE? >> YES, THEY ALSO HAVE ENOUGH OF THEIR OWN TO BUY IN THE SENSE THAT THERE'S ENOUGH INTERESTING OPPORTUNITIES IN DEFENSE SEGMENTS

AND INDUSTRIALS. THERE ARE SOME COMPONENTS WHERE THERE COULD BE DEALS THAT CAN HELP SOME OF THESE U.S. COMPANIES AS WELL. WITH THE DOLLAR DEPRECIATING AND THEM BEING EXPORTERS, THEY COULD BE GOOD STORIES. ROMAINE: YOU EXPECT THAT TO CONTINUE? >> I DO. ROMAINE: ALWAYS GREAT TO TALK TO YOU. OUR GUEST FROM MORGAN STANLEY KICKING US OFF TO THE CLOSE. STOCKS HITTING SESSION LOWS AND YOU ARE SEEING BIG REVERSALS IN SOME OF THE BIG GAINERS OF THE DAY, INCLUDING HOME DEPOT, DOWN ABOUT 1% AFTER REPORTING BETTER THAN EXPECTED GUIDANCE. WE WILL TALK TO OUR GUEST ABOUT THAT

NEXT. ALIX: SPEAKING OF UNCERTAINTY, HOW THAT IS SHIPPING UP THE FEDERAL RESERVE A WAIT AND SEE APPROACH. WE WILL DISCUSS WITH RICHARD CLARIDA FROM KIMCO -- PIMCO. ROMAINE: AND OUR GUEST WILL BE JOINING US LATER ON THE PROGRAM FROM TENEO. STICK WITH US. THIS IS "THE CLOSE" ON BLOOMBERG. ♪ >> I MADE THE POINT, OBVIOUSLY I RESPECT THE PRESIDENT'S PERSPECTIVE ON THIS. WE WANT TO GET A BILL PASSED. WE DON'T WANT THE TAX CUTS TO EXPIRE BECAUSE THAT WOULD BE THE LARGEST TAX INCREASE IN AMERICAN HISTORY. BUT WE NEED TO COME TO AN AGREEMENT AND

OF BEEN VERY CLEAR FROM THE START I WILL NOT SUPPORT A TAX BILL THAT DOES NOT PROVIDE REAL TAX RELIEF TO MY CONSTITUENTS AND THAT REQUIRES LIFTING THE CAP ON SALT. ALIX: THAT WAS A REPUBLICAN REPRESENTATIVE SPEAKING EARLIER TODAY ABOUT WHY HE WON'T SUPPORT PRESIDENT TRUMP'S TAX BILL AND LESS THE SALT CAP IS LIFTED MORE. LET'S GET MORE CONTEXT WITH OUR GUEST FROM BROWN UNIVERSITY. THIS LEVEL OF DEBATE OVER SALT, HOW DOES IT RESOLVE? >> I THINK A BLUE STATE REPUBLICANS, NOT THAT MANY OF THEM, PROBABLY GET A NUMBER LIKE 30 GRAND, 25, AS OPPOSED

TO 10,000 BECAUSE IT'S BETTER THAN 10,000. THAT'S THE WHEELING AND DEALING THAT WILL HAPPEN. NO QUESTION THIS IS THE SINGULAR LEGISLATIVE A COBBLER SCHMIDT FOR THE REPUBLICAN PARTY IN THE HOUSE OF REPRESENTATIVES THIS YEAR. THEY HAVEN'T DONE MUCH OF ANYTHING ELSE AND THE PRESIDENT HAS GRABBED EVEN MORE POWER THAN PREVIOUS PRESIDENTS. IF THEY WANT TO CAMPAIGN ON SOMETHING THAT ISN'T DONALD TRUMP, THEY HAVE TO PASS THE TAX BILL. ROMAINE: I UNDERSTAND IT'S A BIG LEGISLATIVE ACHIEVEMENT PRIMARILY BECAUSE THEY HAVEN'T ACHIEVED A LOT ELSE, BUT I'M ALSO CURIOUS, IT SEEMS LIKE SO MANY ELEMENTS IN THIS

BILL GO DIRECTLY AGAINST A LOT OF THE THINGS THE PRESIDENT HIMSELF CAMPAIGN ON AS WELL AS SOME OF HIS SURROGATES IN CONGRESS AND I'M CURIOUS HOW THEY WILL SELL THIS TO THE AMERICAN PEOPLE AND I DON'T MEAN THE MONEY CLASS, I MEAN RANK-AND-FILE VOTERS. WILL THEY BUY INTO WHAT IS IN THIS BILL? WINDY: WE'VE SEEN SIGNALS FROM PEOPLE WHO SAY THEY'VE VOTED FOR DONALD TRUMP AND SOCIAL ARENAS WHERE THEY EXPRESSED OPINIONS, THEY ARE VERY UNHAPPY ABOUT CUTS TO THE VETERANS ADMINISTRATION OR CUTS TO SOCIAL SECURITY OR EVEN CUTS TO PHONELINE'S ASSOCIATE SECURITY, SO IT'S UNCLEAR

IF THIS WILL BE A WINNER WITH THAT POPULATION. THERE IS A SLIM NUMBER OF PEOPLE THE GOP NEEDS TO APPEAL TO TO KEEP THE HOUSE IN 2026 AND THE TAX CUTS AND WHAT THEY WILL SELL. THEY WILL SAY WE PROMISED YOU COULD TAKE -- KEEP TAX CUTS AND WE DELIVERED. THE PROBLEM IS THE TAX CUT COSTS WEIGHT EXCEEDS SPENDING. WE HAVE A DEFICIT AND IT WILL NOT GO DOWN AS A RESULT OF THIS BILL. THE FISCAL HAWKS THAT PROMISED THEY WOULD CUT FEDERAL SPENDING ARE GOING TO HAVE TO EXPLAIN WHY THE BILL THEY PASSED DID

NOT DO THAT. ALIX: GOING BACK TO THE SALT CAP, IT LOOKS LIKE WHAT PASS TO THE COMMITTEE WAS 30,000. WHY THE HOLDOUTS? WENDY: IF YOU CAN TRY TO GET MORE YOU CAN TRY TO GET MORE BUT THERE'S ANOTHER ELEMENT IN THE MIX WHICH IS MEDICAID. STATES LIKE LOUISIANA, 70%, THE FEDERAL GOVERNMENT PAYS 70% OF THE MEDICAID COSTS. SOME OF THOSE DEEP RED STATES REALLY RELY ON FEDERAL COST SHARE. PLACES LIKE CALIFORNIA, NEW YORK, ILLINOIS, VERY HIGH MEDICAID BILLS. THEY ARE TRYING TO POSITION THEMSELVES TO MAKE SURE HARDLINERS DON'T CUT MEDICAID MORE THAN THEY ALREADY SAY

THEY WANT TO. THE HOUSE BILL WILL PROBABLY GET MODIFIED BY THE SENATE. SENATORS EPPERSON ENTIRE STATES, YOU HAVE PEOPLE WHO ARE VERY WEALTHY AND PEOPLE LOW INCOME ON MEDICAID, ALL VOTING FOR SENATE. THUS I THINK WE WE WILL SEE MODIFICATION ON THE MEDICAID SPENDING CUTS. ROMAINE: LET'S ASSUME BASED ON WHAT WE KNOW ABOUT THE CONTOURS OF THE BILL, IT MAKES IT THROUGH AND IS ASSIGNED. IS THERE A SENSE THAT PROVISIONS OVER TIME WILL HELP TO COMPENSATE FOR THE TAX CUTS? MEETING SOME OF THE ISSUES WITH THE MORE BALANCED BUDGET AND DEALING WITH THE FISCAL DEFICIT,

DOES THAT GET MADE UP IN SOME WAY OR ANOTHER FROM MAGICAL TARIFF REVENUE WE SHOULD BE GETTING OR OTHER PROVISIONS BAKED INTO THE BILL? WENDY: THIS FEDERAL BUDGET KEEPS GETTING BIGGER AND BIGGER. IT DOESN'T MATTER IF DEMOCRATS OR REPUBLICANS ARE IN THE WHITE HOUSE, IT KEEPS CLIMBING. MAYBE IF THE ECONOMY BOOMS AND YOU HAVE ADDITIONAL TAX REVENUE EVEN WITH TAX CUTS, MORE PEOPLE MAKING MONEY, MORE TAX REVENUES FLOWING IN, YOU MIGHT MAKE A DENT. BUT IF YOU INCREASE DEFENSE SPENDING, MIXED SIGNALS ABOUT WHEN THAT WILL HAPPEN, AND YOU WON'T CUT MEDICARE OR SOCIAL SECURITY OR

RAISE THE AGE OF BENEFITS, NOT DOING ANY OF THAT, OVER THE LONGER TERM I DON'T SEE WHERE THAT REVENUE COMES FROM TO BALANCE THINGS OUT. THE MEDICAID BETS AT LEAST IN THE HOUSE BILL, THE REQUIREMENTS DON'T KICK IN UNTIL 2029 UNLESS THEY WILL CHANGE IT NOW AND THE RULES COMMITTEE. THAT'S AFTER THE MIDTERMS AND THE NEXT PRESIDENTIAL ELECTION. DON'T EXPECT CUTS SOON. ROMAINE: THERE ARE NO FISCAL CONSERVATIVES LEFT IN WASHINGTON IS WHAT YOU ARE TELLING ME. I'M NOT EVEN TRYING TO BE FUNNY -- WHERE ARE THEY? WENDY: I THINK THAT SHIP LEFT THE PORT A

LONG TIME AGO, EVEN STARTING WITH RONALD REAGAN, AND IT'S BEEN EXPANSION OF THE FEDERAL GOVERNMENT UNDER REPUBLICANS. WARS, THEN OBAMACARE, YOU KEEPS GROWING. THERE MIGHT BE A FEW REPUBLICANS WHO DON'T VOTE FOR THIS BILL AND A FEW DEMOCRATS WHO DO BECAUSE OF THE TAX CUT ELEMENT. LET'S LOOK AT DEMOCRATS FROM COMPETITIVE DISTRICTS AND SEE IF THEY END UP VOTING FOR THIS BILL. ROMAINE: GREAT STUFF. ONE OF THE BRIGHTEST MINDS OUT THERE, PROFESSOR OF POLITICAL SCIENCE AT BROWN UNIVERSITY. BLOOMBERG WILL HAVE EXCLUSIVE INTERVIEW WITH THE HOUSE SPEAKER TOMORROW MORNING AT 9:00 A.M. EASTERN. AND WE WILL

KEEP TABS THIS AFTERNOON ON THAT BILL AS IT WORKS THROUGH CONGRESS. HEAVY LOBBYING GOING ON RIGHT NOW BY SPEAKER JOHNSON AS WELL AS PRESIDENT TRUMP HIMSELF. MEANWHILE WE TURN BACK TO THE MARKETS TO TAKE A CLOSER LOOK AT SHARES OF HOME DEPOT, THEY RALLIED AND THEN TOOK A DIP LATER. WE WILL GO OVER THE EARNINGS AND SPEAK TO AN ANALYST WHO COVERS THE STOCK COMING UP IN THE STOCK OF THE HOUR. THIS IS BLOOMBERG. ♪ ROMAINE: LET'S GET A VIEW FROM THE SOUTH SIDE, TOM CALLS, BIG MOVES. WE START WITH CHUBB. THE ANALYST SEE A

FOCUS MOVING TOWARD WEAKENING UNDERLYING FUNDAMENTALS AND ONCE THEY FACE OUTSIDE -- OUTSIZED EXPOSURE. SHARES DOWN ON THE DAY. NEXT, HEWLETT-PACKARD ENTERPRISE. THE PRICE TARGET GETTING BUMPED UP AS WELL. ANALYSTS ENCOURAGED BY STRATEGIC MOVES, INCLUDING JUNIPER NETWORKS. FINALLY, KROGER. RECOMMENDATION LIFTED TO HOLD IN RAISING THE PRICE TARGET TO $70 FROM $58, SEEING LIMITED EXPOSURE TO TARIFFS IN THE RETAIL LANDSCAPE. THE FIRM ALSO ADDED THAT DIGITAL AND DELIVERY CAPABILITIES WILL HELP DRIVE TRAFFIC AND MITIGATE SHARE LOSSES. THOSE SHARES ON A FOUR DAY WIN STREAK. WE STAY IN RETAIL AND LOOK AT HOME DEPOT. THEY DID MAINTAIN THE

FULL-YEAR GUIDANCE. EXECUTIVES INDICATING THEIR BELIEF THAT THE WORST ECONOMIC CONCERNS HAVE PASSED AND THEY DON'T EXPECT ROD PRICE INCREASES ON CUSTOMERS FROM THOSE TARIFFS. MICHAEL BAKER JOINS US, HE HAS A BUY ON THE STOCK. LET'S START WITH TARIFFS AND THE PRICING. I THINK IT'S INTERESTING THEY MADE IT CLEAR THEY CAN HOLD THE LINE ON PRICING AND NOT RAISED BY MUCH, IS THAT BECAUSE THEY ARE ABSORBING COSTS OR NOT ACTUALLY TAKING THE COSTS TO BEGIN WITH? MICHAEL: MORE ABSORBING IT BUT THE TERM I WOULD USE IS OFFSETTING IT. THEY'VE SEEN LOWER COSTS IN THE SUPPLY CHAIN

THROUGH EFFICIENCY GAINS. THERE WAS A BIG ISSUE WITH SHRINK A COUPLE YEARS AGO. GIVING THEM THE GROSS MARGIN CURRENCY TO ABSORB HIGHER COSTS WITHOUT REALLY IMPACTING THE MARGINS. IN GENERAL, THEY SAID THEY ARE NOT RAISING PRICES ON A PORTFOLIO OF PRODUCTS. TO ME THAT MEANS SOME PRICES MIGHT GO UP, SOME MIGHT GO DOWN BUT WHEN WE LOOK AT THE ENTIRE BASKET, ABOUT NEUTRAL. ROMAINE: WHEN YOU SAW EARNINGS TODAY AND START TO LOOK AT THE GUIDANCE GOING FORWARD, YOU ARE COMFORTABLE WITH THAT? MICHAEL: SURE. YOU KNOW WHAT'S INTERESTING ABOUT THE RESULTS AND THE GUIDANCE IS THEY

COMPED POSITIVELY IN THE U.S., SECOND QUARTER AND EURO OF POSITIVE COMPS -- IN A ROW OF POSITIVE COMPS. FEBRUARY WAS A SOFT MONTH BUT IT GOT BETTER IN MARCH AND APRIL, APRIL WAS THE SECOND-BEST MONTH HOME DEPOT HAS HAD IN THE U.S. IN TERMS OF SALES GOING BACK ABOUT THREE YEARS. THAT MOMENTUM HAS CONTINUED INTO MAY SO THAT MAKES US CONFIDENT FOR THE FULL YEAR. LET'S BE CLEAR, ONE PERSON IS NOT WHERE IT SHOULD BE. BUT IN THE CURRENT ENVIRONMENT WHERE HOUSING IS PRETTY SOFT IN TERMS OF EXISTING HOME SALES TURNOVER, THE FACT THEY ARE

GETTING POSITIVE AND STAYING THERE IS NOT BAD. ALIX: WE DID SEE DEFERRAL OF BIG-TICKET PURCHASES FOR SMALLER TICKET ITEMS AND I'M WONDERING WHEN DOES HOME DEPOT NEED BIG PROJECTS TO COME THROUGH? MICHAEL: FOR THEM TO GET BACK TO THE THREE OR 4% COMP, YOU NEED TO SEE SOME PROJECTS COME THROUGH AND FOR THAT TO HAPPEN WE NEED MORE ACTIVITY IN THINGS LIKE SPENDING, LOWER RATES, ETC.. DOLLARS ARE GOING UP BUT NOT SPENT ENOUGH TO DRIVE BIG-TICKET PURCHASES PER A LOT OF THOSE ARE FINANCED. RATES ARE STILL A LITTLE TOO HIGH FOR THAT WE WOULD LIKE

TO SEE THOSE RATES COME DOWN, MAYBE 50 TO 100 BASIS POINTS AND I THINK YOU WILL SEE MORE ACTIVITY. ALIX: WAIT AND SEE JUST LIKE THE FED. WHAT ARE THE RATES FOR THE LOWS? MICHAEL: HOME DEPOT DID BEAT A LITTLE TODAY. IF YOU LOOK AT THE AVERAGE SPREAD BETWEEN HOME DEPOT AND LOWS THE LAST YEAR OR SO, IT'S BEEN ABOUT ONE PERCENTAGE POINT IN HOME DEPOT'S FAVOR. IF THAT HOLDS, LOWS WOULD HAVE TO COME DOWN ABOUT 1%. THE CONSENSUS IS DOWN TWO. LOWS NEEDS TO BEAT TO HOLD THE GAP. ALIX: THANK YOU, APPRECIATE YOU. I

FEEL LIKE WE ARE HEARING THIS, EVENTUALLY WIN DEFERRED PROJECTS BECOME NONEXISTENT AND WHEN ARE THEY JUST DEFERRED BY THREE TO SIX MONTHS AND WHEN ARE THEY JUST CANCELED? ROMAINE: WE'VE BEEN DOWN THIS ROAD BEFORE, HOW DO YOU ASSESS THAT? WE SEEM YOU'VE ENDED UP BEING WRONG SOMETIMES AND THINKING DEFERMENTS ARE COMPLETELY PUT OFF AND VICE VERSA, AND IS NOT NECESSARILY IN LINE WITH ONE COMPANY. HOME DEPOT MIGHT BENEFIT, LOWE'S MIGHT NOT. ALIX: YOU CAN MAKE THE ARGUMENT FOR THE SAME THING FOR BANKS AND M&A. WILL IT BE DEFERRED OR NEXT? THAT BRINGS US TO OUR

NEXT SEGMENT. WE WILL TALK ABOUT THE FED WITH RICHARD CLARIDA OF PIMCO. >> I THINK THE FED SHOULD NOT -- SHOULD NOT CUT INTEREST RATES. IT'S IN A VERY DIFFICULT POSITION TO TRY TO BALANCE THESE THINGS. THERE IS A GREAT DEAL OF UNCERTAINTY AND THERE IS A DETERIORATION IN SENTIMENT BUT REALLY, THE ACTUAL ECONOMY. THEY ARE IN A DIFFICULT POSITION. ROMAINE: THIS IS THE COUNTDOWN TO THE CLOSE. THAT WAS RAY DALIO. I AM ROMAINE BOSTICK. ALIX: I AM ALIX STEEL. HE SPEAKING TO SOME ALABASTER EARLIER AT THE BNP PARIBAS CONFERENCE. ROMAINE: THAT IS THE WIND

HAD HASN'T THE FED SAID THAT REPEATEDLY QUESTIONED MIKE WE HAVE HEADLINES FROM RAPHAEL BOSTIC WHO WAS SPEAKING FOR THE 12 TIME THIS WEEK AND HE KIND OF MADE THAT CLEAR AGAIN. THE FED HAS MADE IT CLEAR THEY HAVE NO UNCERTAINTY. THEY CANNOT DO ANYTHING UNTIL THEY HAVE THAT CERTAINTY. THAT MAY NOT COME UNTIL SEPTEMBER OR MAYBE LATER WHICH I DON'T THINK IT'S WHAT THE MARKET WANTS TO HEAR. GO AHEAD. ALIX: MORGAN STANLEY IS MY CALL SAYING HE EXPECT NO FED -- RATE CUTS UNTIL MARCH OF 2026 AND THEN SEVEN TIMES IN A ROW, 25 BASIS

POINT CUT, YES. EXACTLY. NO RATE CUTS UNTIL MARCH. LET'S GET MORE PERSPECTIVE ON THIS WITH THE GLOBAL ECONOMIC ADVISOR AT PIMCO. IN BIG REASON FOR THAT -- GOOD TO SEE YOU. INFLATION WILL FIRM UP NOW BUT UNEMPLOYMENT RISES NEXT YEAR. COULD THAT BE A PLAUSIBLE SCENARIO, NO CUTS UNTIL NEXT YEAR? >> IT COULD BE A PLAUSIBLE SCENARIO. OUR BASELINE VIEW IS WE WILL BEGIN TO SEE A PICKUP IN THE UNEMPLOYMENT RATE LATER THIS YEAR. THAT WILL PUT THE RED -- THE FED INTO THE MODE OF CUTTING RATES BUT IT'S ENTIRELY POSSIBLE IF THAT DOES NOT

CUT UNTIL THE END OF JAY POWELL'S TERM. IT WILL BE VERY DATA-DEPENDENT. THEY WILL NOT BE PREEMPTIVE AND TRY TO GET AHEAD OF THE CURVE THIS TIME. I THINK WAIT AND SEE IS THE MESSAGE OUT OF THE FED RIGHT NOW. ALIX: THEY HAVE BEEN MAKING THAT LOUD AND CLEAR. DO YOU GUYS THINK THE FED IS REALLY LEADING WHEN IT COMES TO MARKET REACTION AND THE ECONOMY OR IS IT GOING TO BE TARIFFS AND THE TAX? RICH: IT IS THE TAX BILL AND OF COURSE EVERY WEEK, WE GET YOU INFORMATION ON THE TARIFFS. THERE'S DEALS AMOUNT

AND OTHER INDICATIONS THAT OTHER COUNTRIES MAY BE HIT WITH AN ADDITIONAL TARIFFS SO THERE IS A LOT OF UNCERTAINTY. THE THINK AND REMEMBER IS THAT IN THE PAST INCLUDING DURING MY TIME WITH THE FED IN 2019, THE FED HAD THE ROOM TO ACT PREEMPTIVELY. WE CUT RATES BASED UPON A FORECAST THAT WAS -- FORECAST OF A SLOWDOWN. INFLATION IS ABOVE TARGET AND HAS BEEN ABOVE TARGET FOR FOUR YEARS AND I THINK YOU AND THE UNCERTAINTY ON TOP OF THAT AND THAT GIVES YOU THE FED ON HOLD SITUATION THAT WE SEE TODAY. ROMAINE: DON'T WE HAVE

A SENSE THAT WE KIND OF KNOW TO A CERTAIN EXTENT WHERE THESE METRICS ARE GOING TO GO OVER THE NEXT FEW MONTHS? I THINK MOST PEOPLE UNDERSTAND THAT INFLATION PROBABLY IS GOING TO BE HIGHER OVER THE NEXT FEW -- AND WE COULD EVEN SEE SOME POTENTIAL WEAKNESS IN THE LABOR MARKET AND I KNOW THAT IS NOT ENOUGH FOR THE FED TO PREEMPTIVELY ACT BUT AT WHAT POINT WHEN YOU GUYS ARE ALL IN THAT ROOM DO YOU KIND OF SAID, OK, THIS IS NOW STARTING TO ADD UP TO SOMETHING? RICH: I AM NOT IN THAT ROOM

ANYMORE. I CAN SPECULATE. CERTAINLY WHAT I BELIEVE IS IF WE GET AN INCREASE IN THE UNEMPLOYMENT RATE, SAY TO 4.7, 4.8, I THINK THAT WOULD BE ENOUGH TO GET THEM OFF THE DIME. THERE ARE OTHERS WHO THINK MAY BE SOMEWHAT LESS OF ARISE IN THE UNEMPLOYMENT RATE. THEY ALREADY LOOKED THROUGH THE NEGATIVE PRINT ON GDP GROWTH IN THE FIRST QUARTER. I THINK THEY UNDERSTAND THAT REALLY UNDERSTATED THE ECONOMY STRENGTH AND THE ECONOMY CAME INTO THE YEAR WITH A VERY GOOD SITUATION IN THE LABOR MARKET AND IN THE ECONOMY SO THERE IS THAT MOMENTUM AS WELL.

ALIX: -- ROMAINE: WITH REGARDS TO THE TARIFFS AND THE PINCHOT THAT POTENTIAL IMPACT, I READ SOME OF THE COMMENTS FROM JOHN WILLIAMS THE OTHER DAY -- I THOUGHT SOME OF HIS COMMENTS WERE INTERESTING. HE SAID MAYBE SEPTEMBER, WE WILL HAVE A BETTER LOOK AT WHAT THAT IMPACT IS WHICH FOR THE MARKET, HE MIGHT AS WELL HAVE SAID 10 YEARS FROM NOW BUT IT GETS TO THIS IDEA, AND WE ALL SORT OF THINK BACK TO THE PANDEMIC AND THE SUPPLY CHAIN DISRUPTIONS THERE AND HOW THE FED WAS SAYING, LOOK, THIS MIGHT BE TRANSITORY. LET'S WAIT AND

SEE. WE KNOW WITH THE BENEFIT OF HINDSIGHT THAT THEY WERE WRONG ON SOME OF THOSE ISSUES AND I'M CURIOUS IF THERE IS THAT SAME IMPETUS TO TO NOT BE WRONG AND NOT REPEAT THAT SAME MISTAKE. >> I THINK THAT IS A FAIR POINT. I THINK THAT THERE IS SOME PATH DEPENDENCE AND MONETARY POLICY. I THINK IN PARTICULAR BECAUSE, AND I WAS THERE OF COURSE IN 2021 AND IN PARTICULAR BECAUSE INFLATION REMAINED ABOVE THE 2% TARGET IN 2022, 2023, 20 24. I THINK WE ARE ALSO SEEING, FOR EXAMPLE, IN SOME OF THE SURVEY ESTIMATES, AN INCREASE

IN EXPECTED INFLATION. I THINK ALL THOSE FACTORS PUT TOGETHER DOES PUT THE FED IN A WAIT AND SEE MODE WHEREAS IN THE PAST, THEY MIGHT HAVE BEEN MORE PREEMPTIVE. ROMAINE: I WANT TO POINT OUT REAL QUICKLY HERE, YOU CALL ME RAPHAEL AND I JUST WANT TO SAY IF I'M GOING TO BE CONFUSED WITH ANYBODY, I'M GLAD -- RICH: I'M SORRY. YOU MENTIONED BOSTICK. ROMAINE: I'M GLAD YOU CONFLATED ME WITH SOMEBODY WAY SMARTER THAN I AM HERE AT GOOD. ALIX: I WILL TAKE THAT INTO ACCOUNT NEXT TIME. HEY, WE ALSO CAN'T IGNORE WHAT IS HAPPENING WITH

THE DEFICIT AS WELL AS THE BUDGET BILL AND TAX PLAN THAT IS GOING THROUGH CONGRESS AT THE MOMENT. THE COMMITTEE FOR A RESPONSIBLE BUDGET IS SAYING THE NET EFFECT WOULD ADD SOMETHING LIKE $3.3 TRILLION TO THE FEDERAL GOVERNMENT DEBT OVER A DECADE. HOW DOES THAT NEED TO FACTOR IN TO THE MARKET, TO THE ECONOMY? WHAT IS THE REAL IMPACT? >> WELL, OBVIOUSLY, THE U.S. IS AND HAS BEEN ON AN UNSUSTAINABLE FISCAL PATH AND I THINK THAT IN SOME WAYS, THIS IS NOT A LOT OF NEWS. THE MARKETS WERE ALREADY EXPECTING AN INCREASE IN DEFICITS RELATIVE

TO THE BASELINE PATH AND PROBABLY THE FED AS WELL. I THINK AN IMPORTANT OFFSET, HOWEVER, IS IF THE 10% TARIFFS DO STAY ON AND THE TRUMP FOLKS ARE SAYING THAT THEY HAVE NO INTENTION TO MOVE AWAY FROM THE ACROSS-THE-BOARD 10% TARIFFS, THAT'S GOING TO RAISE, YOU KNOW, ACCORDING TO SOME ESTIMATES MY YOU KNOW, NEARLY $3 TRILLION OVER 10 YEARS SO THIS IS A VERY COMPLEX PACKAGE. IT'S A BIG PACKAGE. IT'S NOT TAX CUTS, SOME CUTS IN SPENDING, AND THE TARIFFS, WHICH ARE NOT DIRECTLY FACTORED INTO THAT ANALYSIS, ARE ALSO GOING TO BE RELEVANT AS WELL.

ALIX: IF WE TAKE DEFAULT FOR THE U.S. OFF THE TABLE, WE ARE ALWAYS GOING TO PAY OUR BILLS, THERE'LL ALWAYS BE PEOPLE WHO BUY U.S. TREASURIES AND INVESTORS WHO BUY U.S. TREASURIES BUT AT WHAT PRICE? I'M JUST WONDERING AT WHAT PRICE DO YOU THINGS GET A LITTLE STICKY IN THE ECONOMY? 5%, 6%? RICH: I WILL PUT IT THIS WAY. A TERM WE HAVE USED FOR A LONG TIME AT PIMCO WHEN IT COMES TO TREASURIES IS THAT THEY ARE THE CLEANEST DIRTY SHIRT IN THE SOVEREIGN DEBT CLOSET AND SO THE REALITY IS THERE WAS A GLOBAL

MARKET FOR FIXED INCOME AND IF YOU LOOK AT MOST MAJOR COUNTRIES IN THE WORLD, JAPAN, MOST COUNTRIES IN EUROPE, UNFORTUNATELY, THEY GOT FISCAL PICTURES THAT LOOK ABOUT AS BAD AS THE U.S. SO OUR BASELINE VIEW IS THE DOLLAR REMAINS THE GLOBAL RESERVE CURRENCY AND TREASURIES REMAINED THE GLOBAL RESERVE ASSET IN PART BECAUSE THERE ARE NOT A LOT OF VIABLE ALTERNATIVES BUT YOU ARE CORRECT. YOU KNOW, RATES ARE HIGHER NOW THAN THEY WERE BEFORE THE PANDEMIC AND I THINK THAT DOES REFLECT THE REQUIRED EXTRA PREMIUM PEOPLE REQUIRED TO HOLD TREASURY DURATION. ROMAINE: DOES THAT CONSTRAIN THE

FED IF WE DO GET TO A POINT WHERE WE MAY BE DUE NEED ECONOMIC SUPPORT, DOES THAT CONSTRAIN THE FED? RICH: IT'S AN INTERESTING QUESTION BECAUSE IN THEORY, IT SHOWED. IF 10 YEAR YIELDS GO UP BECAUSE THE TREASURY IS HAVING TO PAY MORE TO BORROW, TO ROLLOVER ITS DEBT, OTHER THINGS BEING EQUAL, THAT SLOWS THE ECONOMY AND I THINK THE FED WOULD FACTOR THAT IN. INDEED, I REMEMBER IN NOVEMBER OF 2023, THE CHAIR OF THE FED MORE OR LESS SAID ONE REASON THEY WERE SAYING ON HOLD IS THAT BOND YIELDS HAVE GONE UP IN THAT

TIME SO AS LONG AS IT'S REFLECTING AN INCREASE IN THE REAL BORROWING COSTS ARE NOT EXPECTED INFLATION, I THINK AT THE MARGIN, IT IS EFFECTIVE FOR THE FED. ROMAINE: ALWAYS APPRECIATE YOU TAKING TIME FOR US. RICHARD CLARIDA, ONE OF THE BEST IN THE BUSINESS, NOW MANAGING DIRECTOR AND GLOBAL ECONOMIC ADVISOR AT PIMCO. WE SHOULD POINT OUT REAL QUICKLY, I MEAN, STOCKS HAVE BEEN ALL OVER THE PLACE TODAY. YIELDS ARE ELEVATED AGAIN. THEY ARE BACK KIND OF BUMPING UP AGAINST THE 5% LEVEL ON THE LONGER END OF THE CURVE HERE. FOR SHORT END OF THE CURVE,

NOT AS MUCH ACTION. ROMAINE: VERY SIMILAR TO THE PRICE ACTION WITHOUT THE REVERSAL. WE WERE DOWN .4% AND YIELDS WERE UP BY FIVE BASIS POINTS. WE HAVE NOT NECESSARILY REVERSED. ALIX: THERE ARE QUITE A FEW STOCKS MOVING TO THE UPSIDE BUT ALSO QUITE A FEW MOVING TO THE DOWNSIDE AND THAT INCLUDES THE OWNER OF VIKING CRUISES. ROUGH SEAS AHEAD AFTER THE CRUISE LINE OPERATOR REPORTED EARNINGS. WE ARE GOING TO TAKE A CLOSER LOOK AT WHY THOSE SHARES ARE DOWN 5.5 PERCENT ON THE DAY. THIS IS THE CLOSE ON BLOOMBERG. ROMAINE: SHARES OF VIKING HOLDINGS DOWN

ALMOST 6% DESPITE THE OPERATOR SAYING FIRST QUARTER REVENUE AND ADJUSTED EBITDA BEAT ESTIMATES. ANALYSTS ARE CONCERNED MORE ABOUT THE 20 26 BOOKINGS FORECAST AND -- SAYING THEY SHOWED DECELERATION FOR THE YEAR. JODY LURIE JOINS US RIGHT NOW WHO COVERS THE STOCK FOR US OVER ABENBERG INTELLIGENCE. I'M CURIOUS ABOUT THE SENTIMENT AROUND THIS PARTICULARLY GIVEN IT JUST SEEMED LIKE A MONTH OR TWO AGO, WE HEARD FROM CARNIVAL CRUISES, SAYING THAT THINGS ARE GREAT FOR US. WHAT IS THE DISPARITY BETWEEN WHAT IS GOING ON AT CARNIVAL AND WHAT IS GOING ON AT VIKING QUESTION MARKED DIFFERENT BUSINESS

MODELS, DIFFERENT CLIENTELE? >> COMPLETELY DIFFERENT BUSINESS MODELS. SOMEWHAT DIFFERENT CLIENTELE BUT VERY DIFFERENT BUSINESS MODELS. TALKING LARGE SHIPS VERSUS SMALL SHIPS. VIKING DOES HAVE THEIR OCEAN LINER WHICH IS DOING PRETTY WELL, A LOT OF IT IS RIVER CRUISES WHICH ARE MUCH SMALLER VESSELS. >> GO AHEAD. >> I WAS JUST GOING TO SAY YOU ALSO HAVE TO THINK ABOUT THE DEMOGRAPHIC. VIKING, A LOT OF THEIR CUSTOMERS ARE 55 AND OLDER. THEY ONLY APPEAL TO ADULTS. THERE ARE NO KIDS ON THEIR SHIPS. AND USUALLY, IT'S ABOUT TWO PEOPLE PER CABIN OR SOMETIMES ONE PERSON SO IT'S A

VERY DIFFERENT BUSINESS MODEL. ALIX: ROMAINE GOT VERY EXCITED ABOUT THAT POINT. PER CUSTOMER, WHERE IS THE STRAIN, WITH THE OLDER DEMOGRAPHIC WHERE THE FAMILY THAT HAS KIDS? >> I THINK A LOT OF THE MOVEMENT IN THE STOCK IS OVERDONE. I THINK THERE WAS A LOT OF READING INTO IT. VIKING HAS NEVER BEEN ONE TO BE VERY CONCRETE WITH THE ESTIMATES ARE TALK ABOUT A COMPANY THAT BEFORE ITS IPO, YOU COULD BARELY GET FINANCIALS EVEN THOUGH THEIR DATA WAS ALWAYS PUBLICLY TRADED AND HERE'S A SITUATION WHERE THEY ACTUALLY REPAID THEIR DEBT SO THEIR NET LEVERAGE IS

TWO TIMES, THE LOWEST AMONG THEIR PEERS. ROYAL CARIBBEAN WHICH JUST GOT INVESTMENT GRADE YESTERDAY IS STILL GETTING TO THE THREE TIMES LEVEL SO THAT IS WHAT WE ARE TALKING ABOUT. TWO TIMES ON NET-NET ROAD, THREE TIMES OUT OF GROSS LEVERAGE BASIS. I THINK THEY ARE DOING RELATIVELY WELL, ALL THINGS CONSIDERED. THAT SAID, I THINK THERE IS A LOT OF HESITANCY TO GET COMFORTABLE WITH A COMPANY INTO 2026, PARTICULARLY AS WE ARE THINKING ABOUT THE FACT THAT ROYAL IS COMING INTO THIS SECTOR IN 2027 WITH THEIR RIVER CRUISES. ROMAINE: SO JODIE COMER WHEN WE TALK ABOUT

THIS IDEA HERE OF TRAVEL DEMAND OVERALL, AND THIS GOES JUST BEYOND VIKING, IS THERE A SENSE HERE THAT IF WE DO BELIEVE ECONOMIC CONDITIONS GLOBALLY ARE SOFTER, DOES THAT MEAN THEN THAT WE DO SEE IMMATERIAL PULLBACK OVERALL IN THIS TRAVEL SPACE? >> I THINK IT IS A LITTLE BIT NUANCED. FIRST OF ALL, PEOPLE LOVE TO TRAVEL. WHAT WE SAW WITH OUR TRAVEL SURVEY WHICH WE PUBLISHED OVER THE LAST FEW DAYS IS THAT PEOPLE ARE STILL WANTING TO TRAVEL. ARE THEY GOING TO BE SPENDING AS MUCH AS THEY WERE PLANNING AT THE BEGINNING OF THE YEAR?

NO. THERE'S STILL A LARGE PORTION OF PEOPLE WHO ARE PLANNING ON TRAVELING AND TRAVELING LARGE, ESPECIALLY IF YOU LOOK AT THE MALE POPULATION. I THINK CRUISES JUST HAVE TO APPEAL TO MEN. ALIX: FAIR ENOUGH. NOW, I FEEL LIKE WE HAVE TO GO AND EXPERIENCE IT. >> I THINK THE MARKET HAS BEEN DOING OK INITIALLY BECAUSE THE FIRST QUARTER EARNINGS HAVE BEEN VERY DECENT AND I THINK THE IMPACT OF THE TARIFFS, THE IMPLICATIONS ON BOTH BUSINESSES AND CONSUMERS IS STILL TO COME. THE CASE FOR INTERNATIONAL IS LOOKING MORE AND MORE COMPELLING AS DAYS GO BY IN

THE MARKET AND IN THE DOLLAR. ROMAINE: KICKING US OFF TO THE CLOSE JUST ABOUT 15 MINUTES AGO AND STOCKS PRETTY MUCH WHERE THEY WERE WHEN WE STARTED THE SHOW, IN THE RED FROM ONLY FRACTIONALLY, BUT DEFINITELY A BIG CAUSE IN THAT RALLY. ALIX: WE HIT THE LOWS ABOUT 20 MINUTES AGO WITH THE EXCEPTION OF THE DOW TRANSPORTATION INDEX WHICH CONTINUES RIGHT AROUND THE LOWS, LED LOWER BY THE LIKES OF FEDEX. ENERGY CONTINUES TO BE ONE OF THE WORST PERFORMING SECTORS WITHIN THE S&P. SAW IT YESTERDAY AND WE ARE SEEING IT TODAY AS WELL, OFF ABOUT

1%. ROMAINE: THE VIX CAMPED AROUND 18 AND WE ARE STARTING TO SEE A BIT OF A RISING LONGER-TERM YIELDS. SEVEN BASIS POINTS HIGHER ON THE 30 YEAR YIELD. AS WE GET CLOSER TO THE CLOSING BILLS WITH JUST ABOUT NINE AND ITS AGO, HE IS THE CIO OF CAPITAL GROUP. CORRECT. >> CEO OF CIO CAPITAL. JUST MAKE IT AS CONFUSING AS POSSIBLE. ROMAINE: I APOLOGIZE. SORRY ABOUT THAT. GREAT TO HAVE YOU HERE ON THE PROGRAM. CEO OF THE CIO GROUP. TALK A LITTLE BIT ABOUT THE COMPLEXION OF THAT RALLY WHICH, YOU KNOW, MAY -- MAY BE

ON PAUSE, MAYBE IT CONTINUES. IT WAS A RALLY DRIVEN BY RETAIL. I SAW A GREAT DEBT YESTERDAY ABOUT HOW THE BIGGEST CONCENTRATION OF RETAIL BUYING THAT WE HAD SEEN IN HISTORY IN A SINGLE DAY WAS ACTUALLY YESTERDAY. >> IT'S A PRETTY REMARKABLE SHIFT IN BEHAVIOR. INSTITUTIONS WITH LIBERATION DAY COMING TOOK A VERY CONSERVATIVE VIEW OF WHAT THEY SHOULD DO AND RAISE CASH, MOVED MORE MONEY TO FIXED INCOME AND RETAIL DID THE TREMENDOUS BUY THE DIP WHICH HAS CONTINUED A SICKLY NOW FOR THREE WEEKS. FOREIGN INVESTORS HAVE TAKEN A HIATUS ON THE U.S. MARKET SO THERE

IS A REAL DICHOTOMY IN WHAT PEOPLE'S EXPECTATIONS ARE AND INSTITUTIONAL EXPECTATIONS ARE RIGHT NOW AND THE ROCKET PLACE. -- MARKETPLACE. ROMAINE: GIVE US A SENSE WHERE THE DISPARITY IN EXPECTATIONS CONVERGES OR IS THIS THE PATH WE ARE ON RIGHT NOW WHERE PEOPLE ARE INTERPRETING TWO DIFFERENT THINGS? >> ARE BASIC YOU IS YOU WILL SEE A SOFTENING OF THE ECONOMY. PEOPLE TALK ABOUT THE IMPACT OF TARIFFS, BUT THE FACT IS THAT THEY FILLED UP THE WAREHOUSES AND THEN YOU ARE GOING TO HAVE A FOUR-MONTH HIATUS IN TERMS OF GOODS MOVING TO THE COUNTRY THAT WILL AFFECT

SMALL AND MEDIUM-SIZED BUSINESSES AND SOME OF THE DATA YOU JUST SPOKE ABOUT WITCHES FEDEX DOING LESS WELL IN THE MARKET, ENERGY PRICES DOWN, ARE ALL INDICATORS OF A SOFTENING ECONOMY, SLOWING OF THE ECONOMY AND WE ARE GOING TO SEE SOME ON EMPLOYMENT OF HOURLY WORKERS COMING UP IN FRONT OF US AND THAT IS WHAT THE INSTITUTION'S SEE AND THEY SEE THAT CARRYING ON INTO 2026. ALIX: RETAIL IS LIKE WE ARE CONDITIONED TO BUY THE DIP RETAIL WILL NOT BE ENOUGH NECESSARILY TO LEAD US FOR ANOTHER HIGH SO WHAT DO WE NEED TO SEE FOR THAT?

>> MUCH MORE CLARITY ABOUT ECONOMIC POLICY AND WE NEED TO SEE WHAT FORWARD EARNINGS ARE GOING TO BE AND WE HAVE TO REMEMBER WE ARE ONLY SIX OR EIGHT WEEKS AWAY FROM THE 2026 PROJECTIONS. COMPANIES HAVE BEEN BACK EARNINGS ESTIMATE SO THAT IS WHAT WE ARE GOING TO RENDER THINK WE WILL NEED TO SEE THE GROWTH COMPANIES CONTINUE TO POWER AHEAD ESPECIALLY IN NAIA RELATED IMPLEMENTATIONS. THAT WILL BE A BIG INDICATOR OF WHETHER OR NOT CAPITAL INVESTMENT CONTINUES INTO 2026. ROMAINE: DO YOU THINK THE ECONOMIC CONDITIONS WILL BE CONDUCIVE TO THAT? >> I THINK THE

ANSWER IS MAY BE AND WE ARE GOING TO HAVE TO SEE A STOPPING OF THE GOVERNMENTS TENDENCY TO MEDDLE INTO ALL OF THESE THINGS. TARIFFS THEMSELVES ARE JUST ATTACKS ON THE CONSUMER AT THE END OF THE DAY AND SO LONG AS WE HAVE CONSISTENT POLICY, THE TAX BILL IS PASSED, WE CAN REALLY DO JUST THAT AND THEN PEOPLE HAVE TO DECIDE IF THEY CAN MAKE THE INVESTMENT SO I WOULD SAY THE JURY IS OUT AND I THINK IT IS LEADING TO THE NEGATIVE RIGHT NOW. ROMAINE: THERE IS A BROADER ISSUE ABOUT SENTIMENT AND THE WAY

PEOPLE VIEW THE U.S. POLICY AND U.S. MARKETS. A LOT OF HAY WAS MADE ABOUT THE MIDEAST DOWNGRADE AND WE CAN DEBATE WHETHER THAT WAS A LAGGING INDICATOR OR NOT BUT IT IS SOMETHING THAT EVERYONE IS TALKING ABOUT LONG DEFORMITIES FINALLY DECIDED TO WEIGH IN ON THIS, THE IDEA THAT DEFICITS ARE GETTING TOO HIGH AND THAT WILL LEAD TO HIGHER BORROWING COSTS, HIGHER INFLATION, AND TAMPED DOWN GROWTH. >> WHEN YOU LOOK AT MOST TALKED ABOUT ON BLOOMBERG LAST YEAR, IT WAS ALL ABOUT U.S. EXCEPTIONALISM AND THAT IS GONE AND TO THE IDEA OF THE U.S. MEETING

IN TERMS OF THE WORLD ECONOMY, THINKING GLOBALLY, IT'S GONE. THE WHOLE IDEA OF A STRONGER DOLLAR IS GONE. YOU'RE TALKING ABOUT AN ENTIRE DIFFERENT REGIME CHANGE THAT IS COMING UP AND WHAT INVESTORS HAVE NOT DONE IS TO BEGIN TO MOVE MONEY INTO INTERNATIONAL MARKETS, TO JAPAN, TO CHINA, TO EUROPE, TO A SMALL DEGREE. THEY HAVE NOT DIVERSIFIED THERE IS EVEN IN THE U.S., ADDING DIGITAL ASSETS OR ANYTHING TO THEIR PORTFOLIOS. THE INVESTORS EDGE JUST NOT ANTICIPATING WHAT IS GOING TO HAPPEN IN 2026. ALIX: ON THE SAME SIDE, WE WIND UP GETTING FOMO IN THE U.S.

HE WOULD HAVE MISSED -- THEY ARE STILL GOING GANGBUSTERS AND YOU CANNOT MISS THAT AND THAT LEADS TO ITS OWN SORT OF FOMO. HOW DO YOU DO BOTH? >> YOU THINK ABOUT PORTFOLIO QUALITY. THIS RALLY BESIDE POOR QUALITY COMPANIES, HIGHLY SHORTED COMPANIES THAT NEEDED TO HAVE SHORT COVERING AND THAT WAS A BIG PART OF THE RALLY AND SO YOU JUST SAID IS VERY IMPORTANT. OUR CLIENTS NEED TO MOVE MONEY INTO THE HIGHEST QUALITY SECURITIES, THOSE WITH THE MOST LIKELIHOOD OF SUCCEEDING OF -- UNDER THIS ECONOMIC REGIME. THERE IS MUCH MORE RISK TODAY AND THAT GOES

FOR GLOBAL COMPANIES AS WELL SO I THINK PORTFOLIO COMPOSITION IS GOING TO BE THE KEY TO SUCCESS AS WE GO INTO 2026. ALIX: THAT FEELS ARE SO FAR AWAY. HOW ACTIVE DO YOU NEED TO BE? >> I THINK YOU COULD SEE A PORTFOLIO SHIFT OF 10% TO 12% OF ENTIRE PORTFOLIOS NOW AND TWO SPECIFIC SECTORS. THAT'S A LOT COMPARED TO A NORMAL YEAR, INTO SPECIFIC SECTORS WHILE YOU TALK ABOUT U.S. TECH BUT IT HAS GOT TO BECOME INTERNATIONAL TECH INCLUDING SOME EXPOSURE TO CHINA. WE HAVE TO LOOK AT THE FINANCE SECTORS. THE REST OF THE

WORLD HAS VERY ATTRACTIVE INVESTMENTS IN 2026 AND ALL OF THESE WILL BE BENEFICIARIES OF THE CHANGES IN POLICY. ROMAINE: WHEN WE TALK ABOUT THE BIG STRUCTURAL THEMES THAT DROVE THE RALLY LAST YEAR WHICH WAS AI AND OTHER TECH SPENDING IN THAT ANY KIND OF ALLUDED TO THIS EARLIER ABOUT A CONTINUATION OF THAT, IS THAT GOING TO BE A GLOBAL STORY? IT HAS BEEN DRIVEN BY THE U.S.. >> WE WILL MOVE FROM THIS IDEA OF THE INVESTMENT INFRASTRUCTURE IN DATA CENTERS TO THE INVESTMENT BY COMPANIES IN UPGRADING THEIR OWN TECHNOLOGIES AND IMPLEMENTING THEM IN THEIR BUSINESSES

AND WHAT WE WANT TO SEE ARE COMPANIES THAT ARE DRIVING HIGHER EARNINGS GROWTH BY THE U.S. OF AI WHICH SHOULD BECOME THE THEME IN 2026 AND 2027. THAT HAS NOT BECOME CLEAR SO FAR. RIGHT NOW, IT'S ALL ABOUT THE INVESTMENT SO WE WILL SEE THAT TRANSLATION IN A BUNCH OF SERVICE BUSINESSES. ROMAINE: DAVID IS THE CEO OF THE CIO GROUP HERE IN STUDIO TWO, COUNTING US DOWN TO THE CLOSING BALANCE, NOW LESS THAN THREE MINUTES AWAY HERE. MOST OF THE MAJOR INDICES STILL HOLDING IN THE RED AND KIND OF INTERESTING TO SEE THE INDIVIDUAL NAMES

THAT ARE MOVING HERE. NO REAL HELP FOR THE MAC SECOND -- MAG SEVEN. ALIX: WHAT IS PRETTY STAGGERING IS HOW EXTENDED WE ARE ABOUT MOVING AVERAGES FOR THE MAJOR INDICES AND YET WE ARE STILL THING AROUND THOSE LEVELS. ROMAINE: AND YOU POINTED OUT AT THE TOP OF THE SHOW, THE RSI IS SHOWING WE ARE BACK INTO OVERBOUGHT CONDITIONS OR AT LEAST WE CAME IN TODAY IN OVERBOUGHT CONDITIONS ON BOTH THE S&P AND THE NASDAQ 100. BOTH OF THOSE INDICES IN THE RED AS WE BREAK IT ALL DOWN FOR YOU RIGHT NOW. >> THE CLOSING BELL,

BLOOMBERG'S CROSS-PLATFORM COVERAGE OF THE U.S. MARKET CLOSE, STARTS RIGHT NOW. ROMAINE: RIGHT NOW, TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK WITH ALIX STEEL TAKING YOU THROUGH THE CLOSING BELL, A GLOBAL SIMULCAST. IT STARTS RIGHT NOW. TIM STENOVEC IN THE RADIO BOOTH. WELCOME TO OUR PARTNERSHIP WITH YOUTUBE. ANOTHER MIDDLING DAY IN THE MARKETS, CAROL MASSAR, BUT THIS TIME UNLIKE YESTERDAY, FIRMLY TO THE DOWNSIDE. CAROL: WE TALKED WITH ERIC AND HE SAID SOME OF THAT DOWNTURN THAT WE SAW IN THE 2:00 HOUR HAD TO DO WITH SOME OF THE COMMENTS ELON MUSK

SAID ON A COMPETING NETWORK ABOUT ROBOTAXIS AND PRIORITIZING THAT. THAT IS AN EXPENSIVE COST. THERE'S A LOT OF QUESTIONS TO BE FIGURED OUT BY THAT SO HIS TAKE WAS THAT MAYBE IT WAS NERVOUSNESS IN THE MARKET. KEEP IN MIND TESLA IS 2% OF THE S&P 500 AND MORE THAN 3% OF THE NASDAQ 100 SO POSSIBLY PUTTING SOME PRESSURE THERE. >> TESLA WAS HIGHER BY AS MUCH AS 2.8%. YES, THAT WAS PRETTY BIG AND THEN IT MOVED LOWER. NOW, IT'S JUST ABOUT HALF A PERCENTAGE HIGHER. OTHER STOCKS ARE ACTUALLY LOWER RIGHT NOW. NVIDIA AND APPLE DRAGGING

THE INDEX DOWN. >> WHEN YOU TAKE A STEP BACK, THERE'S NO SIGNIFICANT ECONOMIC DATA. WE HAD THE PHILLY SERVICES TODAY. SO WE HAVE A MOMENTUM TURBINE MARKET FOR THE MOST PART. IN EQUITIES, THAT BASICALLY MEANS RECOVERING FROM THE POST APRIL 2 DROP AND THEN YOU HAVE A WEAKER DOLLAR AND OF COURSE, YOU HAVE HIGHER YIELDS BUT THE ACTUAL LEVELS DAY IN AND DAY OUT, YOU ARE TWEAKING AROUND THE MARGINS. ROMAINE: GOOD POINT. WE ARE ALSO HEADING INTO A THREE-DAY HOLIDAY WEEKEND IN THE UNITED STATES HERE SO THAT WILL HAVE A BIG EFFECT AS WELL. WE

EXPECT TO GET EARNINGS AFTER THE BELL AS WE GET THE CLOSING BILLS HERE IN NEW YORK RIGHT ACROSS THE SCREEN FOR MOST OF THE MAJOR INDICES. THE DOW JONES INDUSTRIAL AVERAGE DOWN MORE THAN 100 POINTS, OR .3%. THE NASDAQ FALLING BY A SIMILAR PERCENTAGE AMOUNT IN YOUR BRIGHT SPOT ON THE DAY THAT WILL LONG TO THE RUSSELL 2000. UP ONE POINT, SAM .1%. >> LOOKING AT THE S&P 500 GOING BACK TO THE BIG CAPS FOLKS, MOST NAMES IN THE INDEX LOWER IN TODAY'S SESSION. 328 TO THE DOWNSIDE. SCARLET, 173 GETTING GROUND HERE. SCARLET: A LOT

OF RED ON THE SCREEN AND THE WORST DECLINERS ON THE DAY ARE ENERGY STOCKS, DOWN BY 1%. THAT WAS THE SAME CASE AS YESTERDAY AND ENERGY IS DOWN 3% SO FAR THIS YEAR. COMMUNICATIONS SERVICES AND CONSUMER DISCRETIONARY LOWER BY HALF OF 1% AND ON THE UPSIDE, THERE ARE THREE SLIVERS OF GREEN PRICE ISIS. UTILITIES, HEALTH CARE, AND CONSUMER STAPLES. PRETTY DEFENSIVE SECTORS THERE. >> MODERNA DEFINITELY ONE OF THE OUTPERFORMER'S, UP ALMOST 15% IN TODAY'S SESSION WITH A GAIN OF ABOUT 6% HERE AND IT HAS HAD LIKE A TWO DAY GAIN OF 10 TO 12% HERE.

UP TODAY ALONG WITH SHARES OF OTHER VACCINE MAKERS INCLUDING NOVAVAX AFTER THE FDA OUTLINED AN APPROACH ON THE PATH FORWARD FOR COVERT SHOTS THAT IS VIEWED AS BETTER-THAN-EXPECTED. U.S. REGULATORS WILL NO LONGER APPROVE COVID BOOSTER SHOTS FOR HEALTHY ADULTS MORE FOR CHILDREN WITHOUT NEW STUDIES, ADDING A COSTLY REQUIREMENT FOR DRUGMAKERS ALTHOUGH THEY WILL STILL BE AVAILABLE FOR MILLIONS OF HIGH-RISK AMERICANS. THE POINT IS THE AGENCY'S WILLINGNESS TO CONTINUE MAKING THE SHOTS AVAILABLE FOR HIGH-RISK PEOPLE WITH A WIDE RANGE OF HEALTH CONDITIONS WAS A RELIEF TO THE INDUSTRY AS THEY FEARED KIND OF A BIGGER WAVE

OF RESTRICTIONS FROM THE TRUMP ADMINISTRATION SO WE DID NOT GET THAT. ROMAINE: RESTRICTIONS ON COVID SHOTS? >> YES. MAYBE PEOPLE DIDN'T HAVE TO GET THESE, YOU KNOW, VACCINES. ROMAINE: BUT IF YOU WANT TO GET THEM, YOU CAN DO THAT, RIGHT? THIS IS STILL AMERICA? JUST CHECKING. >> WILL INSURANCE COVER IT? THAT IS THE QUESTION. >> THAT IS A GOOD POINT, WHEN THERE'S NOT -- WHEN THERE'S MANDATES AND SO ON. ROMAINE: AM I ALLOWED TO BUY THIS? SORRY. GO AHEAD. >> IT'S UP ABOUT 11% AT ITS HIGHS, ABOVE 5% AT THE CLOSE. IT IS SOMETHING KIND

OF DIFFERENT. I KNEW ROMAINE WOULD LOVE IT. IT'S ABOUT A $2.2 BILLION MARKET CAP, ADVERTISING COMPANY AND AMAZON PUBLISHER SERVICES AND ASKED ATV COLLABORATION WITH THE COMPANY SO THAT REALLY SAW SOME MOVE TO THE UPSIDE. THEY STACK UP -- ROMAINE: I AM SURPRISED YOU DID NOT LEAD WITH THIS. CAROL: BUT THEN WHAT WOULD YOU COMPLAIN ABOUT? ALL RIGHT. UP ABOUT 19% IN TODAY'S SESSION. COMPANY BOOSTED ITS ADJUSTED PROFIT FORECAST FOR THE FULL YEAR AND REPORTED FIRST QUARTER RESULTS THAT TOPPED EXPECTATIONS. ROMAINE: I HATE TO INTERRUPT YOU AGAIN BUT THE PRESIDENT OF THE UNITED STATES IS

NOW IN THE OVAL OFFICE WITH THE SECRETARY OF DEFENSE. LET'S LISTEN IN. >> RONALD REAGAN WANTED IT MANY YEARS AGO BUT THEY DID NOT HAVE THE TECHNOLOGY BUT IT IS SOMETHING WE ARE GOING TO HAVE, HAVE IT AT THE HIGHEST LEVEL. I WANT TO THANK SECRETARY HEGSETH YOU HAS BEEN FANTASTIC AND SECRETARY RUBIO AND THE SPACE FORCE PRICE CHIEF OF SPACE OPERATIONS. I ALSO WANT TO RECOGNIZE DAN SULLIVAN, KEVIN CRAMER, JIM BANKS. FANTASTIC SENATORS MIGRATE POLITICAL TALENTS AND PEOPLE WHO LOVE OUR COUNTRY. IN THE CAMPAIGN, I PROMISE TO THE AMERICA PEOPLE I WOULD BUILD A

CUTTING-EDGE MISSILE-DEFENSE SHIELD TO PROTECT OUR HOMELAND FROM THE THREAT OF FOREIGN MISSILE ATTACK. AND THAT IS WHAT WE ARE DOING. TODAY, I AM PLEASED TO ANNOUNCE WE HAVE OFFICIALLY SELECTED AN ARCHITECTURE FOR THE STATE-OF-THE-ART SYSTEM THAT WILL FLOW NEXT-GENERATION TECHNOLOGIES ACROSS THE LAND, SEA, SPACE, INCLUDING SPACE-BASED SENSORS AND INTERCEPTORS AND CANADA HAS CALLED US AND THEY WANT TO BE PART OF IT SO WE WILL BE TALKING TO THEM. THEY WANT TO HAVE PROTECTION ALSO, SO AS USUAL, WE HELP CANADA, DOING THE BEST WE CAN. THIS DESIGN FOR THE GOLDEN DOME WILL INTEGRATE WITH OUR EXISTING

DEFENSE CAPABILITIES AND SHOULD BE FULLY OPERATIONAL BEFORE THE END OF MY TERM SO WE WILL HAVE IT DONE IN ABOUT THREE YEARS. ONCE FULLY CONSTRUCTED, THE GOLDEN DOME WILL BE CAPABLE OF INTERCEPTING MISSILES EVEN IF THEY ARE LAUNCHED FROM THE OTHER SIDE OF THE WORLD AND EVEN IF THEY ARE LAUNCHED FROM SPACE AND WE WILL HAVE THE BEST SYSTEM EVER BUILT. AS YOU KNOW, WE HELPED ISRAEL WITH THERE'S AND IT WAS VERY SUCCESSFUL, AND NOW WE HAVE TECHNOLOGY THAT IS EVEN FAR ADVANCED FROM THAT BUT INCLUDING HYPERSONIC MISSILES, BALLISTIC MISSILES, AND ADVANCED CREWS MISSILES, ALL

OF THEM WILL BE KNOCKED OUT OF THE AIR. WE WILL TRULY BE COMPLETING THE JOB THAT PRESIDENT REAGAN STARTED 40 YEARS AGO, FOREVER ENDING THE MISSILE THREAT TO THE AMERICAN HOMELAND AND THE SUCCESS RATE IS VERY CLOSE TO 100% WHICH IS INCREDIBLE IF YOU THINK OF IT. I AM ALSO PLEASED TO REPORT THAT THE ONE BIG BEAUTIFUL BILL WILL INCLUDE $25 BILLION FOR THE GOLDEN DOME TO HALT CONSTRUCTION GET UNDERWAY. THAT IS THE INITIAL SORT OF DEPOSIT AND WE HAVE PROBABLY YOU ARE TALKING ABOUT $175 BILLION TOTAL COST OF THIS WHEN IT IS COMPLETED. THIS

AFTERNOON, I AM ALSO ANNOUNCING I WILL APPOINT VERY IMPORTANTLY, THE GENERAL TO LEAD THE AMBITIOUS NEW EFFORT AS THE DIRECT REPORTING MANAGER FOR THE GOLDEN DOME. VERY TALENTED MAN AND I AM VERY HONORED TO HAVE BEEN THE ONE TO HAVE HELPED. SPACE FORCE HAS TURNED OUT TO BE A TREMENDOUS SUCCESS. WE WERE THIRD IN SPACE AND NOW WE ARE NUMBER ONE IN SPACE BY A LOT, NOT EVEN CLOSE. HE IS A FOUR STAR SPACEPORTS GENERAL, RECIPIENT OF THE DEFENSE DISTINGUISHED SERVICE MEDAL, ONE OF THE MOST PERSPECTIVE PEOPLE IN THE WORLD HAVING TO DO WITH DEFENSE.

WE HAVE OFFENSE AND DEFENSE AND I WILL BET HE'S GOOD AT OFFENSE, TOO. HE'S GOT AN UNMATCHED GROUND IN DEFENSE PROCUREMENT. THE GENERAL ALSO KNOWS THAT WE NEED TO MOVE FAST. NO ONE IS MORE QUALIFIED FOR HIS JOB AND EVERYBODY, THIS WAS A UNIVERSAL ACCEPTANCE OF HIM. EVERYBODY THAT KNOWS HIM AND KNOWS EVERYBODY ELSE HAS SAID THERE IS ONLY ONE MAN FOR THE JOB SO I HAVE A FEELING WE HAVE THE RIGHT GUY. BUT NOW, I WOULD LIKE TO INVITE SECRETARY HEGSETH AND THE GENERAL TO PLEASE SAY A FEW WORDS AND DESCRIBE THE SYSTEM A

LITTLE BIT. WE APPRECIATE YOU BEING HERE. THE PRESS HAS REALLY BEEN VERY FAIR OVER THE LAST PERIOD OF A COUPLE OF MONTHS. I DON'T KNOW WHAT HAPPENED TO YOU. SO MUCH MORE EXCITING THE OTHER WAY BUT YOU HAVE BEEN VERY FAIR. WE HAVE VERY HIGH POLLING NUMBERS, HIGHEST WE HAVE EVER HAD AND I THINK WE ARE DOING A GREAT JOB. WE HAD A TREMENDOUS TRIP TO THE MIDDLE EAST, AS YOU KNOW. A REALLY AMAZING TRIP AND NOW, I CAME HOME, AND THIS IS THAT WHEN I WAS REALLY LOOKING FORWARD TO, THIS DAY, BECAUSE THIS IS

VERY IMPORTANT FOR THE SUCCESS AND EVEN SURVIVAL OF OUR COUNTRY. IT IS AN EVIL WORLD OUT THERE. ROMAINE: YOU'RE LISTENING TO DONALD TRUMP IN THE OVAL OFFICE MAKING AN ANNOUNCEMENT ABOUT A MISSILE-DEFENSE SHIELD. HE'S IN THERE WITH THE SECRETARY OF DEFENSE, PETE HEGSETH, NOW TAKING QUESTIONS FROM REPORTERS. YOU CAN CONTINUE LISTEN TO THOSE COMMENTS AND HIS RESPONSES TO THOSE QUESTIONS BY TYPING IN LIVE <GO> ON YOUR BLOOMBERG TERMINAL AND WE WILL BRING YOU ANY BREAKING NEWS FROM THAT PRESS CONFERENCE AS SOON AS WE GET THEM. ROMAINE BOSTICK HERE ALONGSIDE SCARLET FU, ALIX STEEL IS OFTEN

THE REST OF THE DAY AND WE CONTINUE OUR COVERAGE HERE ON BLOOMBERG TELEVISION WITH BREAKING NEWS CROSSING THE WIRE RIGHT NOW. THIS INVOLVING PALO ALTO NETWORKS. SCARLET: THIRD-QUARTER RESULTS. REVENUE BEATING ANALYST ESTIMATES JUST SLIGHTLY. IN TERMS OF THE OUTLOOK FOR THIS QUARTER, GIVING A REVENUE FORECAST THAT BASICALLY MEETS THE MIDPOINT OF THE CONSENSUS ESTIMATE BUT WHEN YOU LOOK AT THE BOTTOM LINE, $.87 TO $.89, IT MEETS THE LOW END OF THE RANGE SO ACTION GIVES A HIGHER THAN EXPECTED, SLIGHTLY MORE NARROW HIGHER THAN EXPECTED RANGE FOR FOURTH-QUARTER ADJUSTED EPS AND IT SAYS THE NEXGEN SECURITY

ANNUAL RECURRING REVENUE WILL BE ANYWHERE FROM -- TO 5.57 BILLION DOLLARS. YOU ARE LOOKING AT A STOCK DOWN 3% IN AFTER-HOURS TRADING RIGHT NOW. ROMAINE: WE ARE STILL AWAITING ON THOSE EARNINGS AS WELL AND KEEP AN EYE ON TAKE TWO. SHARES MOVING LOWER ON THE BACK OF AN OFFERING. A LOT MORE COMING UP ON THE BIG PROGRAM. STICK WITH US. WE ARE GOING TO GET A BETTER READ ON SENTIMENT AT THE COPRESIDENT OF POLITICAL RISK ADVISORY, COMING UP IN JUST A BIT RIGHT HERE ON THE CLOSE ON BLOOMBERG. >> THE COUNTDOWN IS THE EDGE AT

THE END OF THE MARKET DAY. THIS IS THE CLOSE. SCARLET: WELCOME BACK TO THE CLOSED HAD I AM SCARLET FU. ROMAINE: I AM ROMAINE BOSTICK. STOCKS WERE DOWN, BONDS WERE DOWN ON A PRICE BASIS, AND THE DOLLAR WAS DOWN AND THAT'S ACTUALLY RELATIVELY RARE. OF COURSE, WE SAW THIS HAPPEN IN A BIG BLOW AWAY IN EARLY ALSO TO SEE A REPEAT OF THAT GETS TO THE IDEA OF INTERLOCKING CORRELATIONS WHICH IS MAKING IT HARDER FOR THE MARKET TO REALLY FIND ANY DIRECTION. HE SAW THAT REFLECTED IN THE PRICE ACTION TODAY AND IN A BIG WAY

TODAY. THE S&P MOVING LOWER BY .4% ON THE DAY. SIMILAR MOVES LOWER FOR MOST OF THE MAJOR INDICES WITH THE RUSSELL 2000 BEING THE MAJOR OUTLIER BUT YOU ARE TAKING A LOOK AT THE UTILITIES INDEX AND I PUT THAT UP THERE BECAUSE THAT WAS YOUR OUTPERFORM ON THE DAY. NOT ONLY WAS IT THE OUTPERFORMER, IT CLOSED AT A RECORD HIGH AND THAT PROBABLY GIVES YOU SOME SENSE INTO WHERE FOLKS HEADS ARE AT AND IT COMES TO RIGHT NOW RISK APPETITE. GOLD AT THE BOTTOM AND THAT WILL GIVE YOU A SENSE OF WHERE RISK APPETITE IS

AS WELL AS PEOPLE CONTINUE TO PILE INTO GOLD AS, I DON'T KNOW, MAY A HEAD FROM TROUBLE OR MAYBE IT HAS JUST BECOME A LITTLE BIT MORE OF A GROWTH YEAR STOCK. THERE WERE BRIGHT SPOTS OUT THERE BUT YOU WILL NOT NECESSARILY FIND THAT IN THE SPACE BUT YOU DID FIND IT AT OTHERS. SCARLET: LET'S GET TO SOME OF THOSE INDIVIDUAL MOVERS HERE. WE HAVE QUANTUM BECAUSE ROMAINE WAS TALKING ABOUT A BRIGHT STOCK. STOCK UP 26% ON THE DAY AFTER ANNOUNCING THE AVAILABILITY OF ITS NEXGEN QUARANTINE COMPUTING SYSTEM CALLED ADVANTAGE TWO. IT'S NOT CLEAR WHEN

THE COMPANY WILL BE ABLE TO BOOK MORE REVENUE FROM THE SYSTEM AND WE ARE ALSO LOOKING AT FAIR ISAAC, DOWN A PERCENT BUT IT FELL AS MUCH AS 21%. THIS IS A COMPANY THAT PROVIDES CREDIT SCORES FOR CONSUMER LOANS AS WELL AS MORTGAGES IT ACCORDING TO A NOTE FROM RBC, THE STOCK IS DOWN AFTER COMMENTS FROM BILL, WHO HEADS UP THE FEDERAL HOUSING FINANCE AGENCY, SUGGESTING MORE COMPETITION FOR THE CREDIT RATING COMPANY SO THAT STOCK TAKING A BIG LEG LOWER BUT OUR TOP STORY THIS HOUR IS HOW IT IS A MOMENT OF RECKONING FOR A

PAIR OF MAG SEVEN GIANTS. TESLA'S STOCK TOUCHED A THREE-MONTH HIGH AT ONE POINT AFTER ELON MUSK SIGNALED HE IS REFOCUSING ON THE EV MAKER. HE TOLD BLOOMBERG HE WILL REMAIN CEO FOR AT LEAST THE NEXT FIVE YEARS THAT HE PLANS TO SPEND LESS ON POLITICAL CAMPAIGNS. MEANTIME, INVESTORS ARE WATCHING TO SEE HOW ALPHABET RESETS THE NARRATIVE AT ITS DEVELOPER CONFERENCE. THE STOCK HAS UP -- UNDERPERFORMED ITS PEERS ON CONSISTENT CONCERN ALPHABET IS LOSING DOMINANCE IN THE SEARCH MARKET AT A TIME WHEN IT IS SPENDING HEAVILY ON AIA. -- ON AI. ROMAINE: LET'S FOCUS ON TREASURIES

RIGHT NOW. WE DID SEE A RISE ON LONG-TERM BOND YIELDS ON THE BACK OF ONGOING BUDGET NEGOTIATIONS IN WASHINGTON. THE 30 YEAR YIELD HOVERING BELOW THAT THRESHOLD. OUR NEXT GUEST WARNS OF BIG HEADWINDS IN FIXED INCOME TO ALLOW FOR SUMMER VOLATILITY WITH INCREASED U.S. DEFICIT FEARS LEADING THE CHARGE. JOINING US RIGHT NOW IS HEAD AMERICA'S FIXED SALES OVER AT INCOME AMERICA. GREAT TO SEE YOU. SO LET'S TALK ABOUT MAYBE WHAT COULD PORTEND FOR THE SUMMER. WE TALK ABOUT THIS TAX BILL WORKING ITS WAY THROUGH CONGRESS. WE KNOW THAT LONG-TERM, THEIR GOOD -- THERE COULD BE

SOME IMPLICATIONS ON BOND YIELDS PAID WHERE DID THEY GO? >> THE MOST IMPORTANT THING WE ARE HEARING IS OBVIOUSLY THE FOCUS ON WHAT WE CALL THE FISCAL TERM PREMIUM AND THAT IS BEING PRICED IN THE BACK OF THE CURVE AND THEREFORE, THERE'S A LOT OF FOCUS ON TAKING RISK WHEN YOU TALK ABOUT ADDING DURATION RISK. I THINK WHEN WE LOOK AT SORT OF WHERE WE HAVE BEEN, PARTICULARLY IF YOU LOOK AT THE LIBERATION DAY, WE HAVE ACTUALLY REGAINED THE RALLY THAT WE SAW AND WE HAVE HAD YIELDS RESET HIGHER. EVEN JUST LAST WEEK IN OUR

FRANCHISE, WE SAW THE LARGEST FLOWS IN U.S. TREASURIES OUTSIDE OF JANUARY A MONTH IN. IT IS SHOWING YOU PEOPLE ARE COMING IN AT HIGHER YIELDS AND SORT OF BUYING, BUT THE DEFICIT AND THE CONCERNS AROUND THE FISCAL PICTURE IS STILL PLAGUING THE MARKET AND CAUSING PRESSURE ON THE BACKEND END OF THE CURVE. ROMAINE: ON THAT TERM PREMIUM, I'M GLAD YOU POINT THAT OUT BECAUSE MOST OF THE ACTIVITY STILL SEEMS TO BE ON THE SHORTER END OF THE CURVE AND PART OF THAT IS THE DIFFERENTIAL IS NOT THAT GREAT AND WHEN YOU LOOK AT THE TERM

PREMIUM THAT YOU WOULD GET RELATIVE TO EQUITIES, IT IS CERTAINLY NOT WHERE IT WOULD BE ON AN HISTORICAL BASIS. WHEN DO WE START TO SEE THAT CREEP UP A LITTLE BIT MORE? I KNOW WE KIND OF GOT THAT POP BECAUSE OF THE DOWNGRADE BUT THEN IT CAME RIGHT BACK DOWN FOR WHATEVER REASON. >> LISTEN, IT SITS AROUND THE ECONOMIC DATA AND WE KNOW THE HARD DATA HAS BEEN OVERWHELMINGLY POSITIVE AND I THINK THAT IS GIVING INVESTORS SOME COMFORT THAT THE MARKET IS RESILIENT AND HAS BEEN ABLE TO HANDLE IT. THAT BEING SAID, THE DEFICIT WE

KNOW IS GOING TO ADD PRESSURE AND BECAUSE INTO THE SYSTEM SO IT STILL IS A FOCUS TO MAKE SURE THAT YOU ARE IN THE INTERMEDIARY PARTS AND THE SHORTER PART OF THE CURVE AND SORT OF WAIT AND SEE BUT I THINK INVESTORS JUST WANT CERTAINTY, RIGHT? I THINK WE WILL CONTINUE TO SEE VOLATILITY CERTAINLY OVER THE SUMMER UNTIL WE KNOW WHAT THE EFFECTS ARE AND THE COSTS IN PARTICULAR. THE RECONCILIATION BILL AND SEE HOW THAT SORT OF, YOU KNOW, FLOWS THROUGH THE SYSTEM. SCARLET: I KNOW THE MOODY'S DOWNGRADE LAST WEEK WAS EXPECTED BECAUSE THE S&P

HAD ALREADY DONE IT, FITCH HAD ALREADY DONE IT SO IT'S LIKE, OF COURSE, THEY WERE GOING TO DO IT AT SOME POINT AND THE U.S. FRANKLY STILL HAS THE HIGHEST CREDIT RATING, JUST NOT THE TOP OF INVESTMENT GRADE. WE DID LEARN HONG KONG PENSION FUNDS ARE NOT GOING TO BE ABLE TO INVEST AS MUCH IN THE U.S. DEBT MARKET BECAUSE THEY NEED TO INVEST IN ONLY AAA OR EQUIVALENT RATED BONDS. YOU THINK IS GOING TO BE MORE SKELETONS TO EMERGE THAT ARE SIMILAR LIKE THAT WHERE YOU HAVE SOME FUNDS SAYING WAIT A MINUTE, BECAUSE IT

IS NOT AAA, WE MIGHT NEED TO REDUCE OUR HOLDINGS? >> WHEN HE THINK ABOUT THE INDEX AND MOST PEOPLE BEING INDEXED IN THE INDICES, ETC., THE INVESTMENT GRADE RATING IS REALLY WHAT IS MOST IMPORTANT SO WE DON'T REALLY EXPECT TO SEE BROAD-BASED SELLING DUE TO THE DOWNGRADE. AS YOU MENTIONED, IT WAS EXPECTED. I THINK THE U.S. STILL LANDING WHERE IT IS WITH A POSITIVE OUTLOOK DESPITE THE CONCERNS ABOUT THE DEFICIT, WHICH WAS PART OF THE REASON FOR THE DOWNGRADE, I THINK THAT IS STILL, YOU KNOW, IT WILL ADD MORE NEGATIVE SENTIMENT TO THE MARKET BUT

WE DON'T EXPECT TO SEE FORCED SELLING BROAD-BASED. WHEN YOU TALK TO OUR MANY MANAGER COMMUNITIES, THEY ARE STILL SITTING PRETTY OK BECAUSE IT IS STILL AN INVESTMENT GRADE RATING. SCARLET: YOU MENTIONED THE TERM PREMIUM AND THE LONG-TERM STRUCTURAL CONCERNS ABOUT THE WIDENING DEFICIT AND THE INCREASED DEBT BURDEN. WHERE SHOULD THAT TERM PREMIUM BE OR IS THAT STILL IN DEBATE, STILL BEING WORKED OUT? >> I THINK IT IS BEING WORKED OUT. THE UNCERTAINTY AROUND WHERE THE RECONCILIATION PACKAGE WILL STILL ADD -- MAKE OUR DEFICIT GROW AND CAUSE EVEN MORE PAIN TO WHERE IT IS. THERE'S SOME

ESTIMATES OUT THERE WE ARE CALLING FOR BY THE END OF YEAR 26, NEXT YEAR, UP TO 7% AS OF GDP SO WE NEED CLARITY ON THAT. WE NEED CLARITY ON THOSE COSTS AND I THINK WE ALSO NEED CLARITY ON JUST, YOU KNOW, SORT OF DEFENSE TOOLKIT AND THE TREASURY'S TOOLKIT IN TERMS OF WHAT THEY WILL USE TO SUPPORT THE BACKEND OF THE TREASURY MARKET. WE HAVE BEEN FORTUNATE THAT WHEN YOU LOOK AT THE AUCTIONS WE HAVE HAD, THINGS HAVE BEEN PRETTY SMOOTH. SOME OF THE THINGS WE LOOK AT AS THE INDIRECT PARTICIPATION WHEN WE THINK

ABOUT FOREIGN BUYING AND FOREIGN BUYING HAS BEEN WANING AND THAT HAS HAPPENED OVER A PERIOD OF YEARS SO THAT IS ACTUALLY NOT A NEW PHENOMENON BUT WE WANT TO MAKE SURE THERE IS THAT MARGINAL BID FOR U.S. TREASURIES AND THE BACKEND SO THERE ARE THINGS THAT CAN BE DONE IN TERMS OF INCREASING COUPON SIZES, WEIGHTED AVERAGE MATURITY, AND ALL THAT IS WHAT WE ARE SORT OF LOOKING FOR. ROMAINE: THAT COMES FROM MARKET PRESSURE AND IT GOES TO THE DEBATE ABOUT THE PROVERBIAL BOND VIGILANTES WHICH MIGHT BE MISSING OUR HEADS. I AM CURIOUS AS TO HOW

MUCH PUSHBACK THE MARKET CAN HAVE ON SOME OF THE POLICIES COMING OUT OF WASHINGTON THAT ARE POTENTIALLY GOING TO BE INFLATIONARY OR TAMPED DOWN GROWTH IN A WAY WHERE YIELDS WOULD NEED TO RISE. >> I THINK THE MARKET SPEAKS ITS PEACE AND THEY DO IT IN TERMS OF WHERE THEY ARE DEPLOYING CAPITAL. I THINK THEY CAN DO IT IN TERMS OF BEING DEFENSIVE AND CERTAINLY, SHORTENING UP DURATION ON PORTFOLIO SPIRIT I MEAN, WHEN YOU LOOK AT THE FRONT END OF THE CURVE, IT'S QUITE ATTRACTIVE. WE ACTUALLY LIKE OWNING THAT. AND YOU KNOW, WE ARE A

LITTLE BIT MORE SKEPTICAL ON THE BACKEND IN TERMS OF BEING SHORT 30 YEAR ASSET SWAPS BUT I THINK THE MARKET WILL, YOU KNOW, THROUGH ASSET ALLOCATION, SHOW YOU WHAT IT IS WILLING TO ACCEPT. ROMAINE: AS INVESTORS LOOK AT THEIR ALLOCATIONS AS WELL, THERE WAS AN INTERESTING RESEARCH NOTE OUT THAT KKR, THEY CAN'T ABOUT THIS IDEA AND IN HIS VIEW, HOW HE DID NOT RELIEVE YOU GOVERNMENT BONDS AS BEING THE EFFECTIVE PAGE THEY ARE SUPPOSED TO BE BECAUSE RIGHT NOW, THE CORRELATIONS WITH OTHER ASSET CLASSES, RISK ASSETS, ARE SO TIGHT. >> IF YOU LOOK AT OTHER

ASSET CLASSES WHERE YOU HAVE MAY BE STRUCTURAL PROTECTIONS, YOU KNOW, LIKE IF YOU THINK ABOUT THE MORTGAGE MARKET PARTICULARLY WHERE YOU CAN, YOU KNOW, YOU CAN BUY AND SECURITIZE AAA ABS, FOR EXAMPLE, AND GET MORE PROTECTION, YOU KNOW, I THINK THAT GIVES INVESTORS SOME SAFE -- YOU KNOW, SOME SENSE OF WARMNESS ABOUT WHERE YOU CAN SORT OF BE IN THE CAPITAL STRUCTURE IN TERMS OF YIELD PROTECTION AS WELL AS STRUCTURAL PROTECTIONS SO THERE IS SOME TRUTH TO THAT. I THINK CORRELATIONS HAVE BEEN A LITTLE BIT OFF, CERTAINLY, JUST BECAUSE WE HAVE SUCH A STRUCTURAL CHANGE

PLAGUING THE MARKET WHEN HE THINK ABOUT THE U.S. TREASURY MARKET. THAT BEING SAID, YOU KNOW, IT IS STILL THE DOMINANT MARKET IN TERMS OF THE GLOBAL BOND MARKETS AND I ALWAYS SAY, YOU KNOW, CLIENTS HAVE TO OWN TREASURIES IN SOME SHAPE OR FORM. WE JUST WANT TO MAKE SURE IT MAKES SENSE IN TERMS OF YIELD RISK-REWARD. SCARLET: THANK YOU SO MUCH FOR JOINING US TODAY. I REALLY APPRECIATE IT AND HOPE TO SEE YOU BACK HERE. HEAD OF AMERICA'S FIXED SALES AT B OF A. COMING UP, ELON MUSK COMMITTING TO HIS ROLE AS CEO OF TESLA.

WE WILL HAVE THAT PART OF THE CONVERSATION, NEXT. THIS IS THE CLOSE ON BLOOMBERG. SCARLET: ELON MUSK BRUSHING OFF CONCERNS ABOUT TESLA'S SLUMPING SALES AND REASSURING INVESTORS THAT HE IS COMMITTED TO LEADING THE EV MAKER IN THE NEXT FIVE YEARS. HE SPOKE AT THE QATAR ECONOMIC FORUM WITH MICHELLE HUSSEIN. HERE IS PART OF THE INTERVIEW. >> TELL ME HOW COMMITTED YOU ARE TO TESLA. DO YOU SEE YOURSELF AND ARE YOU COMMITTED TO STILL BEING THE CHIEF EXECUTIVE OF TESLA IN >> FIVE YEARS TIME? YES. >> NO DOUBT ABOUT THAT AT ALL? >> WELL, NO, I

WOULD DIE. >> SHORT OF THAT -- >> I CAN'T IF I AM DEAD. >> DOES THAT MEAN THE VALUE OF YOUR PAIN DOES NOT HAVE ANY BEARING ON YOUR DECISION? >> WELL, THAT IS NOT REALLY A DISCUSSION IN THIS FORUM. I THINK OBVIOUSLY, THERE SHOULD BE A CONVERSATION -- COMPETITION SHOULD MATCH THAT SOMETHING INCREDIBLE WAS DONE. BUT I'M CONFIDENT THAT WHATEVER SOME ACTIVIST POSING AS A JUDGE IN DELAWARE WILL NOT AFFECT FUTURE COMPENSATION. >> THIS IS THE JUDGE YOU TWICE STRUCK DOWN, THE $56 MILLION PAY PACKAGE THAT WAS AWARDED TO YOU. I THINK ON THE

CURRENT VALUE OF STOCK OPTIONS. YES. >> NOT A JUDGE. THE ACTIVIST WHO WAS COSPLAYING A JUDGE IN A HALLOWEEN COSTUME. >> OK, THAT IS YOUR CHARACTERIZATION. ON THE THIRD VALUE OF STOCK OPTIONS -- ON THE CURRENT VALUE OF STOCK OPTIONS, I THINK THE VALUE OF THAT PAY PACKAGE STANDS AT ABOUT $100 BILLION. ARE YOU SAYING YOU ARE RELAXED ABOUT THE VALUE OF YOUR FUTURE PAY PACKAGE? YOUR DECISION TO BE COMMITTED TO TESLA FOR THE NEXT FIVE YEARS AS LONG AS YOU ARE STILL WITH US ON THIS PLANET IS COMPLETELY INDEPENDENT OF THAT? >> NO. >>

IS NOT INDEPENDENT, SO PAY IS A RELEVANT FACTOR TO YOUR COMMITMENT TO TESLA? >> SUFFICIENT VOTING CONTROL SUCH THAT I CANNOT BE OUSTED BY ACTIVIST INVESTORS IS WHAT MATTERS TO ME AND I SAID THIS PUBLICLY MANY TIMES. BUT LET'S NOT HAVE THIS WHOLE THING BE A DISCUSSION OF MY ALLEGED PAY. IT'S NOT A MONEY THING. IT'S A REASONABLE CONTROL THING OVER THE FUTURE OF THE COMPANY, ESPECIALLY IF THEY ARE BUILDING MILLIONS COME UP -- POTENTIALLY BILLIONS OF ROBOTS. I DON'T WANT TO GET TOSSED OUT FOR POLITICAL REASONS BY ACTIVISTS. THAT WOULD BE UNACCEPTABLE. THAT IS

ALL THAT MATTERS. ROMAINE: ELON MUSK IN CONVERSATION WITH OUR VERY OWN MICHELLE HUSSEIN AT THE QATAR ECONOMIC FORUM. THIS WAS AN INTERESTING INTERVIEW. IT GOT A LITTLE AWKWARD AT TIMES GIVEN THE DELAY. HE WAS NOT THERE IN PERSON. THERE WAS A LITTLE BIT OF A TIME LAG SO IT MADE THE QUESTIONS AND ANSWERS OVERLAP A LITTLE BIT. SCARLET: DEFINITELY, BUT I DID LIKE TO HEAR WHAT HE HAD TO SAY ABOUT TESLA SALES OVERALL AND HOW EUROPE WAS WEAK BUT HE SEES THEM RECOVERING REALLY NICELY. ROMAINE: WELL, WE DID NOT HEAR THAT PART. WHEN WE COME

BACK, WE WILL TAKE A LOOK BACK AT THIS DAY IN HISTORY, A DAY WHEN MICROSOFT AND THE PERSONAL FINANCE ROMAINE: LET'S TAKE A LOOK BACK IN HISTORY TO THIS DAY 30 YEARS AGO WHEN MICROSOFT ABANDONED ITS EFFORT TO BUY PERSONAL FINANCE SOFTWARE COMPANY INTO IT. THE SAGA STARTED ABOUT SEVEN RUNS EARLIER IN OCTOBER OF 1994 WHEN MICROSOFT ANNOUNCED A ONE POINT $5 BILLION STOCK DEAL FOR INTUIT IN WHAT WOULD HAVE BEEN THE BIGGEST PURCHASE EVER IN THE THEN BURGEONING PC SOFTWARE INDUSTRY. IT WAS AN ASTONISHING DEAL ON MANY LEVELS. MICROSOFT WAS PAYING A KING'S RANSOM

OF 12 TIMES ANNUAL REVENUE FOR A COMPANY THAT HAD JUST WENT PUBLIC MONTHS BEFORE AND FURTHERMORE, MICROSOFT HAD JUST SETTLED THE ANTITRUST INVESTIGATION INTO WHETHER IT WAS USING IT DOMINANT MARKET SHARE TO ILLEGALLY BUY UP OR CROWD OUT COMPETITION. THAT IS KEY. MICROSOFT, WHICH ALREADY CONTROLLED ALMOST ALL OF THE MARKET FOR PC OPERATING SYSTEMS WAS BECOMING A BUZZ SAW IN ITS THIRST TO EXPAND INTO APPLICATION SOFTWARE. FAILING OR SEVERELY HOBBLING WORK PERFECT, LOTUS 1-2-3, QUARTERDECK STACKER, YOU NAME IT. MICROSOFT SLAYED IT OR BOUGHT IT. IN 1991, INTO IT LOOKED LIKE IT WAS NEXT FOR THE

MEATGRINDER WHEN MICROSOFT UNVEILED A COMPETITOR TO QUICKEN CALLED MONEY. WHAT IT DID NOT COUNT ON WAS THAT INTUIT'S CEO WHO WAS READY FOR A FIGHT IN A JUSTICE DEPARTMENT THAT WAS ON ITS LAST NERVE. THEY FOUGHT BACK INITIALLY BY LOWERING THE PRICE BUT ULTIMATELY, MICROSOFT MONEY STRUGGLED NOT BECAUSE OF PRICE BUT BECAUSE OF THE STICKINESS OF PERSONAL FINANCE SOFTWARE. REMEMBER, AT THAT TIME, TRANSFERRING DATA FROM ONE SOFTWARE PROGRAM TO ANOTHER WAS CUMBERSOME IF NOT IMPOSSIBLE SO IF YOU HAD ALREADY SET UP YOUR PERSONAL FINANCES IN QUICKEN OR TURBOTAX OR SET UP SMALL BUSINESS PAYROLL THROUGH

QUICKBOOKS, YOU WOULD REALLY NEED A COMPELLING REASON TO GO THROUGH THE HASSLE OF SWITCHING. MICROSOFT GOT THAT LESSON WITH MONEY IN 1991. IT GOT IT AGAIN IN 1993 WHEN IT RELEASED A COMPETITOR TO QUICK BOOKS CALLED PROFIT AND AGAIN WITH TAX SAVER IN 1993. BY 1994, MICROSOFT DECIDED THAT IF YOU CANNOT EAT THEM, THEN BY THEM, BUT THE DOJ HAD OTHER PLANS, MAKING A FORMAL CHALLENGE TO BLOCK THE PURCHASE AND THAT LEADS ESTIMATE 20TH, 1995, WHEN BILL GATES FINALLY ACKNOWLEDGED THE WRITING ON THE WALL AND SAID RATHER THAN FACE YEARS OF LITIGATION, IT WAS TIME

TO MOVE ON. MICROSOFT OF COURSE IS NO WORSE FOR THE WEAR. IT IS NOW THE MOST VALUABLE PUBLICLY TRADED COMPANY OUT THERE AND ASKED FOR INTUIT, IT HAS DONE OK AS WELL, GROWING FROM A $500 MILLION MARKET VALUATION TO ALMOST $200 BILLION TODAY. SCARLET: BREAKING NEWS HERE. THE HOMEBUILDER COMING OUT WITH SECOND QUARTER RESULTS ON THE TOP LINE, BEATING ANALYST ESTIMATES. IN TERMS OF ITS OUTLOOK FOR THE THIRD QUARTER, IT'S DELIVERIES DOES MISS THE CONSENSUS ESTIMATE. 27.3% IS IN-LINE IF NOT SIGHTLY HIGHER THAN WHAT ANALYSTS WERE EXCEPTING. FOR THE FOYER, THEY REAFFIRMED GUIDANCE, MAINTAINING THE

FOYER DELIVERIES IN ITS USE THE GROWTH MARGIN OF 27 POINT 2%. AGAIN, CONSISTENT WITH WHAT IT IS EXPECTING FOR THIS CURRENT QUARTER. THE STOCK MARGINALLY HIGHER, GAINING 1.4% RIGHT NOW. LET'S TURN BACK TO TECH AND HEAD OVER TO LAS VEGAS WHERE BLOOMBERG TECHNOLOGY COHOST ED LUDLOW IS IN THE DELL TECHNOLOGIES WORLD CONFERENCE, FOCUSING ON THE FUTURE OF TECH AND INNOVATION. WHAT CAN YOU TELL US ABOUT HOW THE FUTURE OF TECH AND INNOVATION LOOKS LIKE RIGHT NOW? >> IT LOOKS LIKE THE ACTIVITY IS OUTSIDE THE UNITED STATES OFF THE BACK OF THE PRESIDENT'S VISIT TO THE

GULF LAST WEEK. THE BIGGEST QUESTION HE HAS IS HOW MUCH OF THE DEAL IS IT GOING TO CAPTURE? YOU KNOW, VERY SIMPLY, WHAT DELL DOES IS TAKE IN VS TECHNOLOGY AND PUT THEM INTO SERVERS AND THE SERVERS GO INTO DATA CENTERS AND IN CONVERSATION WITH ARTHUR LEWIS, WHO NEEDS THE INFRASTRUCTURE GROUP, HE BASICALLY SAID YES, WE WILL START TO MORE SOVEREIGN DEALS AWAY FROM THE SME'S AND OTHER SORT OF DIRECT DEALS THAT WE HAVE DONE BUT DID NOT EXPLICITLY ASK THE QUESTION -- ALSTOM HAS BEEN AN INTERESTING STORY TO FOLLOW THROUGHOUT THE DAY. AT ONE

POINT, MARKEDLY HIGHER, CLOSED FLAT AS THE REST OF THE MARKET LOOKS FOR DIRECTION AND ALSO DISCUSSION HERE IS X AI, THE BIG ANCHOR DATA CENTER CUSTOMER AND THEY ARE PLANNING TO EXPAND THAT RELATIONSHIP. YOU WILL SEE HEADLINES ON THE BLOOMBERG TERMINAL FROM ELON MUSK ABOUT THE AMBITIONS FOR THE MEMPHIS SITE IN PARTICULAR BUT THE MAIN CREDIT THAT DELL GETS IS A MOVE INCREDIBLY FAST. WHAT THEY ARE NOT ANSWERING IS WHAT DOES THAT LOOK LIKE? ARE THEY PLANNING TO ADD MORE AI, DOUBLE CAPACITY, AND WHERE ARE THE GPU IS COMING FROM? THAT IS THE CENTER OF

CONVERSATION HERE SO THE NET QUESTION WE ASK OURSELVES, THE NEXT PLACE TO LOOK IS WHERE DOES DELL POP UP IN THE GULF STATES IN PARTICULAR? ROMAINE: ED LUDLOW IN LAS VEGAS. DUELING CONFERENCES TAKING PLACE RIGHT NOW. LET'S SEE WHO HAD THE BETTER ASSIGNMENT. GOOGLE'S ANNUAL DEVELOPER CONFERENCE IS UNDERWAY WHERE THE TECH GIANT ANNOUNCED IT WOULD OFFER AI MODE IN SEARCH TO ALL U.S. USERS. JACKIE HAS BEEN ON THE GROUND OUT THERE IN MOUNTAIN VIEW, CALIFORNIA. JACKIE, WHAT ARE WE LEARNING? JACKIE: I LEARNED AI MODE IS REALLY THE NEXT BIG THING FOR GOOGLE'S SEARCH AMBITIONS. THIS

HAS BEEN THE BIGGEST QUESTION THAT INVESTORS AND USERS HAVE HAD ABOUT WHERE IT GOES NEXT. HOW WILL THEY UTILIZE THE AI MOMENT FOR ITS BIGGEST AND MOST PROFITABLE PRODUCT IN SEARCH? WHAT WE LEARNED TODAY IS AI MODE WILL REALLY KIND OF REINVIGORATE THAT TOOL AND REALLY MAKE IT MUCH MORE CONVERSATIONAL. YOU CAN'T JUST ONLY PUT IN TEXT. YOU CAN ALSO INCORPORATE VOICE AND IMAGES, KIND OF MAKING IT THIS CHATBOT LIKE STYLE SEARCH FEATURE AND IT'S REALLY BETTING THAT THIS IS GOING TO BE KIND OF THE NEXT GENERATION OF SEARCH. IT'S ALSO BANKING ON ITS AI

OVERVIEWS WHICH IT ROLLED OUT LAST YEAR. IT'S ALSO PRETTY GOOD TRACTION WITH 1.5 BILLION USERS USING THOSE OVERVIEWS SO YOU DON'T HAVE TO GO THROUGH ALL THE LINKS. IT SUMMARIZES THOSE UP TOP FOR YOU AND IT ALSO GAVE US AN INSIGHT INTO HOW IT IS THINKING ABOUT AGENTS. REMEMBER, THIS IS THE NEXT FRONTIER IN AI AND THE COMPANY IS BETTING THAT ITS INTEGRATION INTO CHROME AS WELL AS OTHER PRODUCTS WILL REALLY, YOU KNOW, IN GAUGING USERS IN A WAY THAT IS MORE PROACTIVE WHERE IT CAN ANTICIPATE WHAT YOU MIGHT NEED. A GREAT EXAMPLE IN SHOPPING.

SO THIS IS SOMETHING THAT YOU KNOW, YOU MIGHT BE LOOKING FOR A NEW PARISH SHOES THAT MIGHT GIVE YOU SOME OPTIONS ON HOW TO SEARCH FOR THAT. ULTIMATELY, IT WANTS TO DO THAT WORK FOR YOU, POTENTIALLY BY AN ON YOUR BEHALF. WE ALSO HAD SOME UNEXPECTED ANNOUNCEMENTS IN HARDWARE. SMART GLASSES ARE GETTING BACK INTO THE SMART GLASSES SPACE, REALLY STARTING TO GIVE META A RUN FOR ITS MONEY. >> EVERYBODY SEEM TO WANT TO GET BACK INTO THAT SPACE. GOOGLE GLASS DID NOT GET VERY FAR THE FIRST-EVER AROUND SO WE WILL SEE WHERE THAT GOES. ROMAINE:

WELL I HAVE TO SPEND ALL THAT? >> IF YOU THINK IT, MAYBE IT WILL HAPPEN. JACKIE REPORTING FROM THE GOOGLE CONFERENCE IN MOUNTAIN VIEW, CALIFORNIA. LET'S TAKE A LOOK AT HOW MARKETS CLOSED ON THE DAY. THE MAG SEVEN DROPPING .6%, A BIG REASON WHY THE S&P 500 TOOK A BREATHER DOWN FOR THE FIRST TIME IN SEVEN DAYS. I WAS LOOKING AT THE DAILY SWING IN THE DOW INDUSTRIALS. ONLY THREE TO 14 POINT INTRADAY SWING TODAY. ON AVERAGE THIS YEAR, GUESS HOW MUCH THE SWING IS? ON AVERAGE, 638. ON THE WILDEST DAYS, MORE THAN THAT. IT

GIVES YOU A SENSE OF HOW QUIET IT IT HAS BEEN THE LAST COUPLE OF DAYS AS WE WAIT FOR MORE HEADLINES ON TRADE DEALS AND ON THE TAX BILL AS WELL. 30 YEAR YIELD CREEPING UP ONCE AGAIN ALMOST SIX BASIS POINTS TO 4.96%. >> IMPORTS ARE ONLY 14% OF THE ECONOMY. THE ABILITY OF THOSE TYPES OF THINGS TO REALLY MOVE THE NEEDLE ON INFLATION ARE LIMITED. WE HAVE BEEN INTRODUCING TARIFFS SINCE DAY ONE OF THIS ADMINISTRATION AND WHAT WE HAVE SEEN IS TARIFFS HAVE STARTED TO COME UP. THEY BUILD A MEANINGFUL MACROECONOMIC EFFECT ON INFLATION.

SCARLET: JOINING US NOW FOR MORE ON HOW COMPANIES ARE STRATEGIZING THROUGH THIS TARIFF UNCERTAINTY IS KEVIN, COPRESIDENT OF POLITICAL RISK ADVISORY. KEVIN, THROUGH THIS EARNINGS SEASON, WE HAVE SEEN COMPANIES COMMUNICATE THE POTENTIAL IMPACT OF TARIFFS IN A NUMBER OF WAYS, RIGHT? THEY HAVE MAINTAINED THEIR GUIDANCE BUT NOT INCLUDED THE IMPACT WHICH THEY GOT PUNISHED FOR. THEY PULLED THEIR GUIDANCE ON THAT FRONT AND OFFERED A BASE CASE AND WORST-CASE LIKE UNITED AND IN MANY INSTANCES, THEY MAINTAINED GUIDANCES BUT ALSO SAID THAT THEY MAY RAISE PRICES. WHAT IS ACTUALLY HAPPENING INSIDE THE C-SUITE? WALK US THROUGH THESE

EXECUTIVES CALCULUS OF DETERMINING JUST HOW MUCH TO REVEAL, THE RISKS OF STAYING TOO MUCH VERSUS TOO LITTLE? >> SCARLET, THE EVIDENCE YOU PUT OUT OF ALL OF THE SORT OF DIVERSITY OF HOW COMPANIES AND EXECUTIVES ARE ARTICULATING WHAT THEY ARE -- WHAT THEIR SENSITIVITY IS TO INFLATION JUST GOES TO SHOW THAT NONE OF THEM ARE ANY MORE CLAIRVOYANT THAN ANYBODY ELSE AT THIS POINT. OBVIOUSLY, THERE WERE CONCERNS THAT WE WERE GOING TO SEE AN INCREASE IN INFLATION. THE HEADLINE NUMBERS HAVE BEEN PRETTY DECENT BUT WHEN YOU STARTED TO PICK AWAY, YOU SAW WHAT WAS BUBBLING

UP DOWN THERE AND OF COURSE LATE LAST WEEK, WE HAD SOME OF THE RETAILERS ARE TO SUGGEST PRICE INCREASES ARE COMING IN OBVIOUSLY, WE ARE IN THIS REPRIEVE MOMENT WITH REGARDS TO THE TARIFFS. THERE'S BEEN THIS 90 DAY SUSPENSION. WE ARE ABOUT HALFWAY THROUGH THAT OF THE RECIPROCAL TARIFFS, RIGHT? THAT IS LOOMING OUT THERE NOTWITHSTANDING THE DEALS THAT WERE CUT WITH THE UNITED KINGDOM AND WITH CHINA. THEY ARE SUPPOSED TO KICK IN IF ALL THE REST OF THE DEALS ARE NOT SATISFIED IN THE NEXT 200 DAYS -- OVER THE NEXT 45 DAYS OR SO. MY

POINT IS THAT THE IMPACT OF TARIFFS CONTINUES TO LOOM OUT THERE AND ONCE WE GET TO A POINT WHERE YOU HAVE A GOOD INDICATION OF WHAT THE FINAL NUMBERS ARE GOING TO LOOK LIKE, I THINK COMPANIES WILL HAVE A LOT MORE LESSONS TO BE MORE PRECISE OR THEY WILL BE DEMANDED BY INVESTORS THAT THEY BE MORE PRECISE ON WITH THOSE INFLATIONARY IMPACTS ARE GOING TO BE ON THEM. SCARLET: IN THE MEANTIME, THEY ARE TRYING TO GET A HANDLE OF THE LANDSCAPE AS WELL SO CAN YOU TALK ABOUT THEIR LOBBYING EFFORTS IN WASHINGTON? DO YOU SEND

THE CEO OUT TO MAKE A TRIP TO THE WHITE HOUSE AND TALK TO THE PRESIDENT HIMSELF OR HERSELF OR DO YOU DO IT FROM THE SAFETY OF AN INDUSTRY TRADE GROUP WHERE -- WITH YOUR COMPETITOR SO YOU WON'T BE SINGLED OUT AND SHAMED OUT LOUD LATER ON? >> LOOK, I THINK IT DEPENDS ON A NUMBER OF FACTORS HAD ONE IS THE STATURE OF THE CEO AND ANOTHER IS THE SENSITIVITY OF THE INDUSTRY THEY ARE IN AND HOW SENSITIVE THAT WILL BE TO ANY DISRUPTION OF THE GLOBAL SUPPLY CHAIN SO REALLY, YOU KNOW, MY COLLEAGUES WHO

ARE CANCELING THESE VERY CEO'S EVERY SINGLE DAY, YOU GOT TO TAKE IT AT A VERY CUSTOMIZED PERSPECTIVE DEPENDING ON WHERE THEY ARE IN THAT SPACE. ROMAINE: EVEN IF YOU ARE A B2B COMPANY, THERE HAS TO BE SOME EXPLANATION OF A HIGHER PRICE TAG ON YOUR PRODUCT, RIGHT? AND IF THAT PRICE TAG IS GOING UP DIRECTLY BECAUSE OF TARIFFS, DON'T YOU HAVE AN OBLIGATION AS AN EXECUTIVE TO COMMUNICATE THAT TO YOUR CUSTOMERS IN SOME FASHION? >> YES, BUT I THINK IT'S PREMATURE TO SAY EXACTLY WHERE EVERYTHING IS GOING TO END UP. WE MIGHT BE HEADING TOWARD

WHAT I WOULD CALL THE 10 AND 30 MODEL. IT LOOKS LIKE WE MAY BE HEADING, AND I WOULD NOT NECESSARILY STRAIGHT LINE THIS, BUT IT LOOKS LIKE WE MIGHT BE HEADING TOWARD AN ENVIRONMENT WHERE THERE WILL BE A BASELINE 10% TARIFF ON MOST COUNTRIES, 30% ON CHINA, AND THEN THERE WILL BE THESE ADDED SECTORAL TARIFFS. CAR PARTS, POSSIBLY PHARMACEUTICALS, ETC.. IF IT WINDS UP BEING A 10% TARIFF, THEN YOUR PRODUCT -- THAT YOUR PRODUCT IS SUBJECT TO, HOW YOU'RE GOING TO BE ABLE TO SPLIT THAT BETWEEN THE EXPORTER, THE IMPORTER, AND THE CONSUMER, YOU KNOW,

IS GOING TO IMPACT HOW YOU ARE GOING TO HAVE TO COMMUNICATE THAT. IF YOU PUT IT ALL ON THE CONSUMER, THAT IS ONE THING. IF YOU ARE WILLING TO ACCEPT MARGIN HIT, THAT WILL BE SOMETHING ELSE. THERE IS NO ONE-SIZE-FITS-ALL ANSWER TO THIS QUESTION IS THE ISSUE. ROMAINE: THIS GETS TO THIS IDEA OF WHAT THE MARKETING AND SALESMANSHIP OF IT IS GOING TO BE AND IS THAT THE CEO'S JOB OR IS THAT SOMETHING HE OR SHE CAN PUT OFF ON THEIR DEPUTY, SO TO SPEAK, TO SORT OF GO OUT THERE AND TRY TO FIND A

NARRATIVE THAT THEIR CUSTOMERS ARE GOING TO -- THIS WILL BE PALATABLE FOR THE CUSTOMERS AND MAYBE EVEN PALATABLE FOR THE WHITE HOUSE AND THE PRESIDENT. >> I THINK TARIFFS RIGHT NOW IS THE SUBJECT TO SHORE BUT WE KNOW IT'S ABOUT SO MUCH MORE THAN JUST THE ECONOMY. IT'S ABOUT SO MUCH MORE THAN JUST TRADE. IT'S ONE OF MANY GEOPOLITICAL ISSUES, ONE THAT TOUCHES CEO'S AND COMPANIES MORE DIRECTLY THAN A LOT OF THE OTHER ONES. BUT ALL THAT TO SAY THAT I THINK IN THIS ENVIRONMENT, THE CEO HAS TO BE THE CHIEF POLITICAL RISK OFFICER OF

A COUNTRY. IT IS GOING TO BE INCUMBENT ON THEM. >> EVEN IF SOME OF THE REQUESTS ARE UNREASONABLE? I THINK BACK TO THE COMMENT FROM TRUMP THE OTHER WEEK ABOUT APPLE MOVING ITS PRODUCTION TO INDIA. EVEN IF TIM COOK WANTED TO ABIDE BY TRUMP'S THREAT, THAT'S NOT SOMETHING YOU CAN JUST UNRAVEL IN A DAY OR TWO. KEVIN: NO, BUT LET'S BE CLEAR. I THINK APPLE AND TIM COOK HAVE BEEN UNDER THIS PRESSURE BEFORE. PRESIDENT OBAMA ASKED STEVE JOBS WHY THEY COULD NOT MAKE THE IPHONE IN THE UNITED STATES. THERE ARE GOOD REASONS FOR IT. IT

IS COMPLICATED, PROBABLY NOTHING MORE COMPLICATED OR MORE EMBLEMATIC OF THE GLOBAL SUPPLY CHAIN THAN APPLE. SCARLET: WE PAY SO MUCH ATTENTION TO IT BECAUSE APPLE IS A U.S. BASED COMPANY BUT IT'S A GLOBAL COUNTRY AND RELIES ON SALES FROM THE REST OF THE WORLD AND THAT BRINGS US TO THIS IDEA THAT AS MUCH AS EVERYONE IS FIXATED ON U.S. TARIFFS ON OTHER COUNTRIES, THE COUNTRIES ARE STILL MAKING DEALS WITH EACH OTHER AS WELL. HOW ARE CEO'S THINKING THROUGH THE LOGISTICS, THE STRATEGY WITH THAT WHILE STAYING FOCUSED ON THE UNCERTAINTY OF WHAT IS HAPPENING WITH THE

U.S.? KEVIN: IT IS BEING IS BEST INFORMED AS YOU POSSIBLY CAN BE. IT IS SO EASY TO OVER INDEX ON EXACTLY WHAT IS HAPPENING IN WASHINGTON. THE NOISE AND THE VELOCITY IS JUST SO GREAT. ON THE OTHER HAND, THIS TIME AROUND, OTHER COUNTRIES ARE NOT STANDING STILL, AS WE HAVE SEEN. THE DEAL YESTERDAY BETWEEN THE E.U. AND THE U.K., A NUMBER OF THE LATIN AMERICAN LEADERS WERE JUST IN CHINA LAST WEEK. XI JINPING DID A TRIP THROUGHOUT SOUTHEAST ASIA THE WEEK BEFORE SO THERE'S GOING TO BE, I THINK, AND INCREASED MOVE TO MORE BILATERAL AND

EVEN MULTILATERAL DEALS, KIND OF GOING AROUND THE U.S. REMEMBER THAT GLOBAL TRADE AS A PERCENTAGE OF GLOBAL GDP HAS REMAINED CONSTANT, AROUND 60% OF GLOBAL GDP IS GOING UP AND MOST OF THE WORLD. TRADE AS A PERCENTAGE OF GDP AT THE WHITE HOUSE POINTED OUT OVER A MINUTE AGO, IT'S GOING DOWN, 25% HERE AND IF YOU LOOK AT THE 10 FASTEST-GROWING TRADE ROUTES AND -- IN THE WORLD, ONLY TWO OF THOSE HAVE A TERMINUS IN THE UNITED STATES. THERE ARE GOING TO BE A LOT OF COUNTRIES THAT CONTINUE TO BELIEVE THE PRINCIPLES OF FREE TRADE

ARE TO THEIR BENEFIT AND THE BENEFIT OF THEIR COMPANIES SO YOU KNOW, INCREASINGLY, WE MAY SEE TRADE AROUND THE U.S. IN ADDITION TO TRADE WITH THE U.S. KIND OF WORKING ON TWO DIFFERENT CYCLES. ROMAINE: THAT'S REALLY ADJUSTING. WE GOT TO GET YOU BACK SOON. KEVIN IS THE COPRESIDENT OF POLITICAL RISK ADVISORY OVER AT TADDEO. WE ARE GOING TO SET YOU UP FOR WHAT TO WATCH OVER THE NEXT 24 HOURS AND THAT INCLUDES EARNINGS . STICK WITH US. ROMAINE: WE GOT EARNINGS THIS MORNING OUT OF HOME DEPOT AND SEVERAL OTHER RETAILERS OVER THE NEXT COUPLE OF

DAYS AND THAT INCLUDES LOWE'S, TARGET, TJX TOMORROW. ON TAP FOR THURSDAY. JOINING US RIGHT NOW IS THE SENIOR RETAIL ANALYST OVER AT BARCLAYS WHO COVERS TJX AND QUITE A FEW OTHER RETAILERS OUT THERE. RETAILERS THAT YOU KNOW HAVE BEEN A SHARP FOCUS PRIMARILY BECAUSE OF THE CONCERNS ABOUT TARIFFS. THERE IS SORT OF TO THINK GOING ON HERE. FIRST ON THE TARIFFS SIDE, SHOULD WE BE WORRIED? DO THEY HAVE OUTSIZED EXPOSURE TO IMPORTED GOODS? >> THEY DO NOT. WHAT WE LIKE TO TALK ABOUT IS SEPARATING COMPANIES INTO TWO BUCKETS, THOSE WHO HAVE FIRST COST, VERTICAL RETAILERS

LIKE GAP THAT DIRECTLY STORES OR THE BRAND MANUFACTURERS LIKE -- WE DIRECTLY SOURCE AND ALSO NIGHTLY WHO ALSO DIRECTLY SOURCE. THEY GET PASS-THROUGH COSTS. IT'S BASICALLY THE BRANDS SELLING TO THE RETAILERS AT FRONTLINE WHO THEN DO NOT SELL THEIR PRODUCT. THEY ACTUALLY SOLVE A PROBLEM SO THEY KIND OF CLEAN UP AND LIQUIDATE KIND OF ALL OF THE EXCESS INVENTORY IN U.S. RETAIL. THEY TEND TO BE IN THE DRIVER'S SEAT WHEN THEY NEGOTIATE EITHER THE RETAILER OR THE VENDOR. ROMAINE: THE OTHER SIDE IS THE ECONOMIC FACTOR. TYPICALLY, IT HAS TO BE A LITTLE BIT MORE RESILIENT

WHEN TIMES GET TOUGH AND FOLKS ARE LOOKING FOR BARGAINS BUT I AM LOOKING AT ANALYST ESTIMATES FOR THE YEAR AS WELL AS FOR PROFITABILITY AND THOSE ARE KIND OF TRENDING DOWN. WHY? ADRIENNE: WHAT I WOULD SAY IS IF YOU THINK ABOUT THE LAST TWO YEARS, 2023 WAS OF CLEANUP FROM THAT INVENTORY GLUT WE HAD IN 2022 AND IT WAS MOSTLY AT FRONTLINE RETAIL. THE YEAR WAS KIND OF, YOU KNOW, THE FRONTLINE RETAILERS CAN FALLING BACK ON INVENTORY PURCHASING FROM BRANDS LIKE NIKE, LIKE UNDER ARMOUR. SO WE HAD TWO YEARS WHERE WE ACTUALLY HAD INVENTORY FIRST

FROM THE RETAILERS AND SECONDLY FROM THE BRAND MANY FACTORIES THAT WAS KIND OF, YOU KNOW, HELPING OUT AND KIND OF REALLY, REALLY GOOD, JUICY INVENTORY. I THINK THAT WHAT IS HAPPENING AS PEOPLE HAVE THIS NOTION THAT THE CONSUMER IS GOING TO SLOW AND THERE WAS THIS CONCERN THAT MAY BE WE WOULD HAVE INVENTORY UNIT SHORTAGES SO PEOPLE ARE KIND OF THINKING THAT -- IT'S CONSERVATISM, ALLOWING THE OFF-PRICE MODEL TO SHOW THE STRENGTH AND THE POWER BUT YOU WOULD NEED TO SEE TRADE DOWN, RIGHT? SO THE UNDERLYING TRENDS, ACCORDING TO THE SELL SIDE MODEL WOULD SUGGEST

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

OTHER COMPANIES AND RETAIL HAVE HAD THEIR MULTIPLES CONTRACT, YOU HAVE ACTUALLY SEEN A FLIGHT TO QUALITY AND TJX HOLD. WHAT IS ACTUALLY ALMOST FIVE TURNS HIGHER THAN THEIR 3, 5, 10 YEAR HISTORICAL PE SO WHAT PEOPLE ARE SAYING IS THAT ANY SORT OF DISRUPTION, INVENTORY THAT DOES NOT LAND ON TIME, INVENTORY THAT GETS CANCELED, INVENTORY THAT GETS REDIRECTED TO EUROPE, PER SE, ALL OF THAT IS DISLOCATION, TEXTBOOK FODDER FOR THE OFF-PRICE CHANNEL AND TJX IS UNIQUELY POSITIONED WITH 20% EXPOSURE TO EUROPE AS WELL AS THE U.S. TO PROFIT FROM THAT. SCARLET: IT SOUNDS LIKE A

WIN-WIN SITUATION FOR THEM. SENIOR RETAIL ANALYST OVER AT BARCLAYS. ROMAINE: A LOT MORE COMING UP THAT COULD POTENTIALLY MOVE MARKETS. SOME OF THOSE BIG EARNINGS WE JUST TALKED ABOUT INCLUDING TARGET, INCLUDING THOSE, AT A COUPLE OF OTHERS ON THERE AS WELL. BAIDU, WHICH WE HAVE NOT TALKED ABOUT IN A WHILE, AND CONFLICT. TWO TECH STOCKS KEEP AN EYE ON. SCARLET: THERE IS SOME RETAILERS WHO ARE TOP OF MIND GIVEN THEIR EXPOSURE TO TARIFFS. ROMAINE: THEY WERE GOING TO GET A MORTGAGE -- THEY WERE GOING TO GET MORTGAGE APPLICATION DATA BUT REALLY THE STAR OF THE

SHOW TOMORROW IS GOING TO BE THIS EXCLUSIVE INTERVIEW WE HAVE WITH THE SPEAKER OF THE U.S. HOUSE OF REPRESENTATIVES, MIKE JOHNSON, THAT RECONCILIATION BILL THAT IS TRYING TO WORK ITS WAY THROUGH CONGRESS. SCARLET: THAT WILL BE WITH ANNMARIE HORDERN AND THE BIG QUESTION HERE IS WHETHER THEY WILL BE ABLE TO GET IT DONE BY THE END OF THIS MONTH. ROMAINE: HE SAID WE WOULD GET IT DONE BY MEMORIAL DAY WHICH IS MONDAY HERE IN THE UNITED STATES. WE ARE GOING TO GET SOME FED SPEAK AS WELL IF YOU CARE. AS FAR AS THAT MIKE JOHNSON

AND RECONCILIATION BILL, WE CAN FIND A LOT MORE ABOUT WHAT PROGRESS IS BEING MADE ON THAT WITH KAYLEE AND JOE IN BALANCE OF POWER WHICH STARTS AT THE TOP OF THE HOUR RIGHT HERE ON BLOOMBERG.