Difficulty of hitting it. They need to hit it if you are tesla or apple. Lets begin with apple. This from counterpoint research. Iphone sales in china following 24 . Lisa how much it this weakness in china and how much is this the nationalism around huawei and going away from apple phones . These are the Big Questions from apple and tesla. How much is this is endemic of an economy that is slowing. Jonathan lets go through these numbers from tesla. Tesla had a difficult session. The numbers from the china Passenger Car association, shipments out of the shanghai factory down 6 month on month and year down 19 . Lisa this is the reason you are seeing shares down 2 . Tesla is down more than 50 from its peak in 2021. This is very much a china story about demand for u. S. Auto manufacturers. It is hard for them to hit the price point. It is also about the idea u. S. And china are moving farther apart. He saw this with amd and regular issues that would get in the way of commerce. Jonathan tesla is down 24 this year alone. We have lost a quarter of our market cap in two months. Lease asking the right question. Is this about growth in china or rising nationalism . Annmarie i think it is little bit about both. You look at apple with huawei, you saw the surge in people buying them even as apple is cutting prices because of patriotism. This is not going away. Amd created a chip they thought the United States would give the green light come at the u. S. Is saying not so fast. It will be much harder for companies to do business in china regardless who wins the u. S. Election in november. Jonathan the politics are complex and the economy is struggling. Look at this from the government , we need policy support in joint effort from all fronts. They acknowledge the target they have put will be difficult to hit. Lisa theyre also saying we welcome Foreign Investment in our Manufacturing Sector. Is that going to be enough . Do you think anyone will say i will throw you a couple billion dollars because you want it . There is nothing concrete and that is why you do not feel a lot of enthusiasm. Jonathan we are negative one third of 1 on the s p. Financial markets look Something Like this. The 10 year down two or three basis points. A low bit of Dollar Strength. The euro 1. 0 849. Coming up, break battle, Matthew Bartlett im in bloombergs and do current and bloombergs enda curran. We begin with our top story. Cracks form between the magnificent seven. Greg battle saying tech is the part of the market with the biggest diversions but we think their ways to potentially hedge for diversify some of that risk. Greg is with us around the table. Lets get to the fragmentation in this big group of stocks. What is the signal . Greg part of this is not is these are not homogenous stocks. The catalyst has been this emergence of generative ai. The stocks most geared to that have done well. What we seek their are stocks with different exposures and china being a key feature. Jonathan lets get to china. Is that rising nationalism were Economic Growth slowed down. Greg the issue is a couple of those things intertwined. You look at the performance of china entities and that points to something more domestically cyclical. As we move forward towards the election the idea of tariffs and traits will be top of peoples mind. Lisa youre giving this bearish message, doom and gloom, how much pushback to clients give you . Greg clients are cognizant of this. Valuations are incredibly stretched. The news flow has been better. Growth data has been better. We have been in this environment. People expect the fed to cut. There is this balance between exuberance already priced in, crowding, but potentially very useful. Lisa if you think about these idiosyncratic stories, apple and tesla dealing with issues whether it is the smartphone cycle slowing down. Electric vehicle cycle slowing down. If you get Downside Risk to those stocks how much could that be a catalyst . Greg it depends on what happens elsewhere. If you have these idiosyncratic stocks but you have gains in the labor market and you have the ai story rumbling on in the background and their positive catalysts to keep the market going. It leaves the market more vulnerable if you see the ai story slowing. If you see the data becoming too hot or too cold, than the fact we have these cracks elsewhere is something that can leave the market more vulnerable. Annmarie do you categorize this as a bubble . Greg it is hard to categorize a bubble until it bursts. I they we have some of those characteristics. What differentiates this to prior bubbles is the stocks leading the market are cash generative stocks. Although valuations are elevated come the story has been who can monetize ai, who can generate cash from it. I do not know if we are in a bubble but we are in a point worsening exuberance. Jonathan lisa called you bearish you of a price target of 5150. That is bearish in this market . Greg that is characteristic of where we are. The idea you get modest positive returns is seen as bearish. Lisa what are you seeing that other people are not that are upgrading their forecasts to 5500. Talk about the betterthanexpected Economic Growth. Greg i am seeing it is already priced. We had this pivot from the fed in november and december. We have had better data. We have taken our target higher. We think we are following the story priced by the market. To look for an equity market that gives you materially higher returns than you can get from the riskfree rate in the bond market is something that will require a reacceleration of earnings, further than what is already priced by the market. The issue is if you get that you risk having things cut their still priced in from the fed. I think it is a two way pull. Lisa this is a really important week, the most important since last week. I am curious what youre looking for in terms of nonfarm payrolls and also on the elections. We will get into that, but im curious what you think will be the most important event. Greg i think there is a lot of political noise this week and the election is a big part of it. The thing about elections is very difficult to position for that when there a lot of water under the bridge. Much more immediately we have the payroll data and the cpi. That is very important. What has been driving the market s growth but also the narrative of disinflation. What we expect to get from the payrolls is a sequential calling from the hot print we saw last month, but is still a robust payroll print. In terms of cpi the consents is looking for a modest shift from the prior print. Those things would be consistent with the disinflation narrative we are looking for. If you were to have a print that is too hot creates risk for market. Annmarie in a print that is soft we are then in line for a soft landing . Greg at the moment there is a symmetry that we are more worried about overheating. It is not symmetric risk but you have the two tales. If you see the growth decelerate too rapidly people start to worry about growth. At the moment it feels like we are in the sweet spot of benign disinflation. I think the risks in the shortterm or if the data comes in too hot. Jonathan that is kind of what nouriel said to us yesterday that the risk is upside risk and that is bad news for the stock market. Lisa if you get rates that stay higher for longer you get froth out of the market. We have seen a lot of companies be rate in sensitive. At what point does the rate sensitivity kick in . That to me as one of the key questions. We have not seen at. Jonathan i found yesterday impressive the fact that we were only down 1 even though tesla was down close to 7 . We could say signs of exuberance , but at the end of the day, the fact we are still near alltime highs and we have apple down from the highs of the year by double digits, the likes of google have not done well either. Tesla, one quarter of its market cap is gone, and we are still near alltime highs. Greg the driver of that is not broadbased support from the market come is because there up in four or five stocks that have had exceptional returns. Jonathan is that justified . We can all say this down to a handful of names. Are the valuations justified . Is it justified by the fundamentals . Greg the marginal moves we see may be justified by the fundamentals. What i mean is what we have seen is better this year. The issue is starting valuations are very elevated. One of the things we question is whether the right way to play the rally is by the broad indices. If this is being driven by handful of stocks and you have to have High Conviction what the path is over the next decade or so. Jonathan greg boutle will stick with us. S p futures negative one third of 1 . Lets get you an update on stories elsewhere this morning with dani burger. Dani Advanced Micro Devices has hit a u. S. Government roadblock and attempting to sign in ai attempting to sell in ai chip tailored for the Chinese Market. Amd hope for a green light from the Commerce Department to sell the chip but u. S. Officials told amd the chip was still too powerful. Elon musk has lost his position at the top of the bloomberg billionaires index. Tesla shares tumbled 7. 2 yesterday. Now jeff bezos is at the top with a net worth of more than 200 billion. Elon musks fortune is 198 billion. The gap between the pair was once as wide as 142 billion but is shrinking. Tesla is down 50 from its 2021 peak. The International Space station has four new residents after the successful docking of the Spacex Dragon spacecraft. The three nasa astronauts and one russian cosmonaut will oversee during their sixmonth stay. Boeings new star liner capsule is due to arrive in late april while the dream chaser many shuttle is due a month or two later. Jonathan thank you. Up next, super tuesday has arrived. The poll numbers are very good. We are beating President Biden in almost every poll. It is time for a new generational leader who can leave the negativity at the baggage behind and get to work for the American People. Jonathan the conversation coming up next. Live from new york city this morning, good morning. Jonathan stocks on the s p 500 negative. Pulling back around one third of 1 . Yields a low bit lower. Your yield on the 10 year 4. 1818. Super tuesday has arrived. Poll numbers are very good. We are beating President Biden in almost every poll. The voters can take a person out of the race very quickly. We can do better than 280yearold candidates for president. It is time for a new generational leader who can leave the negativity and the baggage behind and get to work for the American People. Jonathan the biggest day of the primary season said to begin with voters in 15 states heading to the polls at a Pivotal Point for the gop nomination. Donald Trump Holding a wide lead over his last remaining challenger. A Strong Performance today may all but secure a trump and biden rematch. Joining us to discuss is Matthew Bartlett. My first question, define what success looks like tomorrow morning for nikki haley. Matthew it is unclear. It will not be a good morning for nikki haley. She might wait until november. If donald trump loses that could be success. Success could be a future effort by nikki haley. Right now it is unclear. It is super tuesday but this is much more of a stress test for the general election between former President Trump and current President Biden. This is heading in that direction. I think this nomination will be wrapped up in two weeks. Nikki haley is looking to get the prize without the winning, that might be sometime in the future. Annmarie does she end up endorsing the former president when he clinches the nomination . Matthew that is such a good question. It seems as if she does not have what it takes to get the gop nomination, but it is quite possible her voters can unlock a general election win for either trump or possibly joe biden. The notion she stated this week that she may not ultimately endorse trump really leaves up to question where do her voters go and does trump make an appeal for that. Does biden make an appeal for them . That is what im looking for today. What is the margins . Can nikki haley sneak past the goalie in virginia or vermont, and what does her exit look like , and what does trumps speech look like . Does he tried to welcome her or her supporters were does he go the vicious, vitriolic, it even vile speech like after New Hampshire . Annmarie she has raised 1 million in the first few days of march and raised 12 million in february. Down from 17 million in january. She is still bringing in money. To she just a in this race to build war chest for her future . Matthew that is a good point. She outraised donald trump. Donald trump has a cash crunch, personally and politically. That is absolutely worth noting. Nikki haley has a set of supporters and a set of donors. They like her and they like her message. Everybody knows this is not headed towards the nomination in 2024 or maybe even 2028, but they want her to soldier on because they like the spirit of what she is doing. It remains unclear how this ends because it is something of an illogical campaign. It is not a president ial campaign, it is a messaging campaign in that message is important for her and her supporters. Lisa we are talking about getting to the general election with about one third of all Republican Voters going to the primaries. How much are we looking at potential policies from each president ial candidate, from President Biden but also trump about what they plan to do with tariffs . What they plan to do with immigration . What their projection is for debt and tax cuts . All these things markets really care about . Matthew that is the key issue. What does the future look like for President Biden, for President Trump, for the American People . What are the issues . Right now it seems to be campaigns absent a lot of ideas were motivation. It tends to be very personal. Whether it is donald trump looking for revenge or joe biden saying im the only one who can beat donald trump. That is not a very compelling message. The economy being the top issue on voters minds. You would think both trump and biden would be on surveillance making their case to the American Public on the most pressing issues on hand. Hopefully we will get much more substance as things develop. Jonathan no president former or sitting wants to answer questions on american tv. Can you talk to me about policy thursday night when we hear from the president and get the state of the union address. What are the policy initiatives he will lead on more aggressively . Matthew this is going to be the biggest speech President Biden has given in his life. This will set the tone not just politically in congress but more importantly for the campaign trail. He needs to make sure he can bring together the coalition he had in 2020, make sure the left flank, which has been somewhat agitated in recent months over Foreign Policy issues stays with him. He needs to reach out to middle america, to voters that may feel disenfranchised over inflation or economic angst. He needs to make a compelling argument as well as his performance. In a town that does not make anything, that hardly does anything, how you present has an upside influence, whether you like it or not. Jonathan so true, and we appreciate the pitch for the interview. Matthew bartlett. Bramo, i know this is why youre frustrated. Thursday night is the opportunity to talk about policy. What kind of policy will he discuss . Lisa what people are talking about is how long he will speak, can he present vigor. What i want to know is the economic projections. We talked about the trump trade the last time around. You talk about this a lot. Can we repeat that . With President Biden what goals are there to the ongoing fiscal spending. There key questions that affect this economy. Jonathan in the sequencing of trump, greg boutle, it is your turn, was to go tax cuts and tariffs. This time it feels like an myco tariffs and tariffs. How do you set things up for clients when you discuss this issue . Greg much of this will not manifest until the back end of the year when we get the idea of who might win, whether it is a divided or united government. I think the reaction function now versus 2016 will be very different. Post trumps victory in 2016, what we saw with reflationary policies wellreceived by the market. If we were to have a reflationary tail wind is that is helpful for markets now as we have cited rates as the biggest risk for equity markets . The thing we are most focused on his tariffs, trade, and deglobalization. You had a lot of china related news flow at the top of the program, not related to the elections but due to issues we have already seen there to the likes of the more china exposed magnificent seven. Tariffs and trade will be the key feature for the election and a lot of the rhetoric into november. Annmarie whether or not it is biden or trump there will be tariffs, but with trump it is looking like it will be more aggressive. Trump is talking about a 60 blanket tariff on imports. Greg the way we have been talking about it is looking at the u. S. Names most exposed to this. You have these cross winds in china where the china equity market has struggled and is potentially i do not call it a bullish Inflection Point but people are looking at it more closely. The u. S. Names exposed to china have performed better. That is something we put in our outlook for 2024. You can take names exposed to china and put that as short china trade, put that in u. S. Thomistic cyclicals, or you can put it as something locally in china. Jonathan greg boutle of bnp paribas. 5150 is the a