The nasdaq a little more than 1 away from the alltime high. For scott we have a development on the proposed ceasefire between israel and hamas. And israeli official says the proposal that hamas has agreed to is not the framework it was agreed upon with mediators. Israel is examining the proposal and will respond. What we heard earlier is that an official said they would accept a ceasefire ahead of israel attacking the stronghold of rough. They issued evacuation orders. Weve heard in the past that you have egypt and qatar trying to get to a ceasefire agreement. Hamas has announced and accepted the proposal on the table but the proposal that theyve agreed to is not accepted to israel. We will follow the details on the situation. A key question on stocks is if they can get to record highs. And who better to emulate than Warren Buffett. In honor of his annual shareholder meeting, this will be a brookshire addition. With us is the chief investment officer. Up first, apple, it showed the value of the Stock Holding was down 22 , but he said hes not bailing. He did sell for tax reasons shares of apple are down. For me, we bounced off the 165 level and i think you have room to run to the 0. 02. Right now interesting how far off the highfrequency data in cell phone sales were down 20 . It was not that bad. They have an event tomorrow and relaunching the new ipad. Its been two years since theyve had a new one. And they finally figured out that maybe they should care about ai and introduce more features. I could see much faster replacement cycle this fall assuming they come out with new models investors want, which is a solid assumption. What about paramount global . This is when he said he took a loss on it. Shares of paramount are up 3 . What is your take . I think you will be jerked around with the news. I think you try to get out with whatever you can. Its a very messy fight because you have shareholders and leadership in the board of directors has been decimated. The trying to figure out what to do. The fcc is not to be super happy to have a private equity forum or a foreign firm coming in and you have other issues with other media owned and so the concern that this administration has not liked larger conglomerates getting larger, i think this would be a messy fight and i would sell and get out. If warren doesnt like it, i side with him. We have the big mystery stock wager on the financial industry saying it is an area that Warren Buffett has dialed back on in recent years over concerns of rising loan defaults. Charles schwab is one name that has been thrown out as a possibility. Shares are up about 11 this year. Your trade on Charles Schwab . Its a hold. I think it got so unfairly punished during the Regional Banking Crisis some people didnt understand its not a small bank. The mergers almost complete with td ameritrade. There focused on cutting costs and retiring expensive debt. If youre going to go into money market, we dont have the deposit risk. You see all the ways its more successful than a smaller Regional Bank especially with the brokerage arm getting more feebased assets and everyone has held the maturities pretty awful because Interest Rates have been jerked around. Schwab is more than a small bank and a huge opportunity. For us this is a hold. Its had a nice runoff over the last six months but i see you could see it continue to move forward. I see clear skies ahead. Anytime you have a completed merger you can work on synergy which means leading into technology to further reduce overhead costs. I see it having a lot of upside. What is your overall view of the market at todays levels . Richly priced . Room to get richer . The rich will get richer. Down 40 k. Earnings have been great. We have sticky inflation. I dont see a cut this year but we have a little bit of a push with powell taking rate hikes off the table and the weak labor report. Right now as long as the consumer holds up, you can still see continued earnings and theres no earnings recession, its good for you. And we like it here. Were watching the u. S. Dollar. Great to see you. Thank you for the insight and perspective. When we look at the markets in general, do we see signs of weakness in the economy . Joining me now is rich bernstein. It is great to see you today. Do you think it matters whether we get a cut this year or not or is all this speculation about what the fed will do baked into what we are saying in terms of a refocus on Companies Reporting earnings, and are they going to be profitable . Its great to be with you. I think its a little bit of both. Earnings and Interest Rates are the two factors that drive the equity market. On the earnings front we should expect them to rev up. The prophet cycle is accelerating. The Interest Rate side is more interesting right now because the reaction to the weakness we saw in the employment report was not for defensive stocks to outperform. It was for speculative access, in other words, the expectation the fed would cut it would be more liquidity for speculation. We are in the speculative period of the stock market. You had Consumer Staples and healthcare and all that against the backdrop of the geopolitical tension weve been reporting on the headlines coming out of israel and whether hamas has accepted a ceasefire and if israel doesnt. Does it factor at all into how your thinking about your investments more broadly . Definitely longerterm. I dont think we think we are smart enough to know whats can happen in the next two weeks or two months anymore than anyone else. But as you look out, these are symptoms of globalization. Whether its the middle east or Eastern Europe or our relationship with china. Some things going on in africa and latin america are symptoms of the bigger picture, which is globalization is contracting. We think it continues to be the major longterm investment theme. I know everyone is up on ai, but i think my colleagues would agree with me that the deglobalization and re industrialization of america is a critical theme to the u. S. Economy. You think thats can happen . We think it is starting already. Its been in the background. It has to happen. If it does not, we will have tremendous inflation in the u. S. Because we have a massive trade deficit in the u. S. , which was no big deal as long as globalization was expanding. But to be dependent on the rest of the world for everything, we are dependent on the rest of the work for everything at a point where globalization is starting to contract, it changes the story from secular disinflation to inflation. Except for corn. We have a lot of corn. But if thats the case and youre watching a contraction, then where do you put your money . How do you make money on that trend . Right. Look, theres the energy sector. We need a lot of energy infrastructure. Whether it is brown or green is a political question. We need to be energy independent. Utility restructure. Everyone is hyped on electric vehicles, but nobodys figured out that the grid cant support. Maybe the Industrial Companies will build out the electric grid as opposed to the eb companies themselves. The u. S. Is last in shipbuilding last in infrastructure among major economies. Imagine we went from last to fifth. That would be a good investment. Very interesting picture that you paint. Thank you. Always good to see you. And i love the ranger jersey. They are doing well. Todays power player is an exclusive interview with ken griffin. That is next. Ameritrade is now part of schwab. Bringing you an elevated experience, tailormade for trader minds. 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Welcome back. Stocks are up on renewed hopes that the fed could cut rates this year after fridays week job data. Lets go to the Milken Institute to hear from an investment type for his outlook on the fed, the markets, and more. Sarah eisen is there joined by a person whose thoughts are always welcome. We just got off the stage. Thank you for doing this. We are talking about the market and the fixation on the federal reserve. I think one of the central questions is how big of an inflation problem do we still have . Anything . We still have an inflation challenge. In goods the surge caused by the pandemic caused by supply chain challenges has peaked and dissipated. But now is very steady level of inflation right around 4 . And it 4 its a challenge which is why they are staying the course, and its the right policy path. They need to bring inflation down overtime. The question is how challenging will that be to get all the way back down to 2 . We do not know how sticky it will be when it comes to services with goods. Was great to see that it did dissipate. With goods theres a bit of the back story we need to worry about. With deglobalization we are likely to see the level of Inflationary Pressure and goods be higher than it was the last 30 years. And the fed has to know that. So theyre thinking about the fact that goods are likely to be higher baseline up for the foreseeable future and Services Still unacceptably high with where they are running today, which is why theyve made the right choice of staying higher for longer in looking to bring down inflation. Like everyone here i talked about the private equity players and theyre excited about rate getting cut. You borrow money, you want to pay less in interest. Would not be excited about that . Are you excited about the prospect of that as an economic catalyst . Look, it has a dual mandate. Inflation 2 is an unwritten rule and try and maximize unemployment. They have to be independent in the decisionmaking to best try to hit the dual mandate. Right now with employment insulation above where it should be cut they have to stay with higher rates to bring inflation back to track. How does the overall equity market look to you right now given this benign economic environment, a path toward rate cuts, ai tailwind. How much more does have left to go . We will find out and thats the best you can do late in the cycle. We will see how much further this has to go. Ai has transformed the mindset of Corporate America toward using technology to try to jumpstart productivity in Corporate America is rising to that moment. Its exciting to see how many groups are focusing on how to use Machine Learning how to use digitalization to drive up productivity. This improves the quality of life for the average american and helps to keep the economy strong. We been monitoring the regulations coming out of washington. We been speaking for months about theres a new one i wanted to ask about because youve taken the lead in this is the sec they call for transparency and surveillance. Do you find it problematic . What is the big issue . The issue is twofold. It creates repository of every trade done by every american with all their personal identifying information. As an american who had my tax returns stolen from the irs and published all over the pages of american papers, i worry about whether or not the federal government will take steps to protect my pii. They are strict and making Corporate America protect that but they have yet to agree on their own Cyber Security standards for the pii. That should give every american pause. Is the government working for them to protect their privacy . Thats number one. The program has been out of control spending. We will spend 200 million plus a year in administrating this program. Thats 20 of the entire budget of the fcc. Not one member of Congress Approved this legislation. This is the regulatory state growing out of control. And who pays that 200 million . American investors. They would say theyre trying to get more transparency and not using it to spy on you. Its always about cost benefit analysis, which has been woefully lacking in this undertaking. Since we launched our litigation, theyve been able to find tens of millions of dollars in savings and im sure we will see announcements about how they will try to address security, but it is really sad that took a lawsuit against the regulator to drive needed cost savings and to drive home the point that we need to have better security protocols. I think they should go back to the drawing board and think about the most costeffective way to hit the sweet of good market surveillance and protecting pii and do it in a manner that doesnt deprive american investors of the returns they should have from investing in the stock market there has been a long line of things are critical of. Has it had an impact on the market and on the economy the kind of overreach you accuse them of . Yes, it does. And it makes it harder for active managers to be successful. Why does that matter . 35 to 40 of the entire u. S. Equity market is owned by a passive investor the entire theory of passive investing is predicated on markets being official. Thats because the work of active Money Managers like citadel, like wellington, all these big firms is big commitments make americas equity market efficient. When the fcc introduced the rules that make it much more expensive to be an active money manager, they take away those participants who create the fairness equity that allows the promise of passive investing to work. Thats how capital moves across the economy and how millions of american safer retirement is in passive investment. What about the ftc . Doing the noncompete . How will that impact businesses like your own . Spoke weve had the most high progressive ftc in modern history. I dont understand the agenda. American businesses consolidating under long standing principles is good in terms of rationalization and efficiency. And, of note, one of the key ways that venturecapital businesses actually realize the full potential is when they are bought by Large Companies that have the distribution and scale to really capitalize on the innovation. So the ftcs antimerger stands israeli reducing the efficiency capital information from the u. S. We dont know how big that number is. Is it hundreds of millions or trillions . But the big hit. The most recent decision on anticompetes, i mean, three unelected officials just throughout tens of millions of contracts between employers and employees. And they were written in good faith and entered into in good faith by consenting parties. Why is this a problem . American companies have to invest a tremendous amount in building their workforces given how coege education is. American Companies Want to know as they make this investment, how would they be treated fairly . And much of this legislation will discourage the investment training in american workers. So maybe there will be a short term bump in pay, but overall, the federal government isnt doing its job of educating American People and that falls on the shoulders of american corporations. American corporations will be more hesitant to invest money in training people on the back of this legislative shift. For us its a different story. Its not protecting trade secrets. Theres a case where jane street argues that a trade secret they developed was taken by one of their traders now that was 1 billion a year. And they spend billions of dollars developing their property. Revenues were cut in half. In trading in protecting the trade secret citadel knows exactly what theyre doing. So for all intents and purposes, the secret is forever lost and gone. And all the money they spent to build it is gone. The judge said, why dont you have a noncompete . Thats why we have them in america. Its a protect trade secrets. They took away one of the only ways that they could protect their trade secret. They chose not to have a noncompete and they lost the trade secret and lost it forever. When you lose your trade secrets, you lose your incentives to invest in research and development. We been so good at creating insights and whether its technology, financial markets, healthcare that leads us as a world leader, eight world leader innovation and they said i dont care about american innovation. Back in the courts and here we go again. Does it make you less enthusiastic about President Biden . We have an election coming up. I know you were betting on nikki haley. Focusing more on state elections as far as where youre giving money. How to think about the world, and who would you rather see for all these key priorities that you have ask i would like to see biden and trump put forward their best schools. We have elections for reason. I think its more important we have a wholesome debate about the future direction of america. I worry about the Regulatory Overreach of the Biden Administration and i worry about the fact that the war in ukraine, i mean, its a war in europe. We never thought we would see a war in europe again. I never thought we would see one. A lot of things we are seeing i didnt think id see in my lifetime. So i would like to know from President Biden, what are you going to do to keep this country in the western world out of wars. I want concrete answers. And he drew a red line with china about the support of russia. This is a really critica