Trade Policy, Tariffs, and Global Supply Chans - The Tepner Appt Group

Jack ManleyMike Appt CIBC client call-20260925_134144-Meeting Recording

September 25, 2026, 5:41PM

36m 16s

Appt, Michael started transcription

Appt, Michael 0:12
Hi, hi, Jack.
Nice to meet you.

+19*******34 0:15
Hey, it's great to meet you too, Mike. Thanks for having me.

Appt, Michael 0:16
It's.
Fantastic. So Jack, who are you and what do you do?

+19*******34 0:22
So my name is Jack Manley, and I'm what's referred to in sort of corporate jargon as a global market strategist at J.P. Morgan Asset Management. Basically, what that means is I'm responsible alongside A handful of colleagues here in New York City, where Home Office is,
for creating and then delivering a timely macroeconomic and market insights to JPMorgan's largest, most important clients across the United States and Canada. So spending a lot of time on the road, a lot of time with conversations, a lot of time with analysis and
and things like this, Mike.

Appt, Michael 1:02
Fantastic. Well, look, there's lots going on in the world right now, so let's kind of jump right into it. What is your current take on the market right now? Do we have room to run?

+19*******34 1:07
Yeah.
Yeah, you know, I think to have a conversation about the equity market, we have to have a conversation about AI. And to have a conversation about AI, we need to have a conversation about the US equity market. And I think if we turn to the next page here, which will be titled AI Related Industries,
we can get into a little bit more detail on exactly how I think about this stuff. Right off the bat, I think it's important to kind of put my cards on the table and say, despite some underperformance relative to the rest of the world this year and certainly in 2025,

Appt, Michael 1:35
Fantastic!

+19*******34 1:49
I am still very much a big believer in US equity exceptionalism. And I'm a big believer in US equity exceptionalism because technology and tech adjacent things that of course includes artificial intelligence, but is not limited to artificial intelligence, has become a long-term secular trend in the sense that
It's everywhere. Its integration is only deepening. You are only seeing more tech reliance, not less. No one will tell you that 10 years from now, we'll be using less technology than we are at the moment. And the United States has really put itself into an exceptional position for dominance in that space. So right off the bat, again, I have to say, in general,
As A long-term investor, I am a big believer in US equity exceptionalism, which means I am a big believer in the US equity market. That said, and this is a big kind of like that said, big, big, big caveat. This is not an equity market that is perfect by any stretch of the imagination.
We have deep, deep concentration risk in the US equity market. And that concentration risk stems from a couple of things. It stems from the fact that the 10 largest companies in the S&P 500 account for roughly 40% of S&P 500 market capitalization. So just by buying a
small handful of names, you're almost getting half of the index. These things have enormous gravitational pull. What happens to the biggest names kind of ripples through the smallest names as you think about index-based investing. And then of course, thematically, we have a tonne of concentration. We can see on this page that AI-related industries, so things like
the hyperscalers, which will be NVIDIA plus a handful of those companies like Microsoft and Amazon and Alphabet, plus the broader semiconductor complex, hardware companies, software companies, power companies. These names account for over 50% of S&P 500 market capitalization.
This is a market that has done extraordinarily well over the past, let's call it four years, right? 20 plus percent returns in 2023 and 2024, 16% returns in US dollar terms last year were up about 13% year to date in 2026. But it is a market that

Appt, Michael 4:01
I.

+19*******34 4:10
hinges entirely on the success or failure of this one big, largely unproven piece of technology, which is artificial intelligence. Because I think we can all kind of agree that AI is cool and very impressive, and in many cases feels like science fiction. And I would guess that most of us interact with artificial intelligence one way or another, but what's really difficult to conceptualise
is just how much money has gone into building this stuff out. We're talking about trillions and trillions and trillions of dollars, more money than many countries GDPs getting spent by a small handful of names on developing this technology. And this technology has not solved any multi-trillion dollar problems.

Appt, Michael 4:54
Ohh.

+19*******34 4:55
just yet. And so that leaves the market.

Appt, Michael 4:56
So, are they overvalued? Are they overvalued?

+19*******34 4:58
Sorry, say the mic. So that's, yeah, I mean, that is the, you know, gazillion dollar question right now. The cheater's answer is it depends entirely on what your time horizon is. You know, I very much believe that somebody is going to figure out how to effectively monetize artificial intelligence, how to make the economies of

Appt, Michael 5:00
Are they overvalued?

+19*******34 5:20
scale actually work to justify this extraordinary amount of CapEx. There have been, as far as I know, very few historical examples of bubbles, if they are bubbles, bursting and then not reflating. They just reflate it at a slower pace. You kind of have prices grow into
or earnings rather grow into multiples as opposed to multiples just ballooning with nothing sort of underpinning them. I think if you are looking out over the next 5 to 10 years, you don't really have much to worry about with the AI complex or the biggest players in the space. If you're looking out over the next 6 to 12 months, you are looking at a market
that is not necessarily in trouble, but a market that is certainly susceptible to shocks. Whether those are like geopolitical, headline driven, whether it's macro data, whether it's adjustments in rate policy, like what we've seen happen over the past couple of weeks, this is a market that's going to be a lot choppier, a lot bumpier because valuations are somewhat stretched.
because AI, while awfully promising, is still a largely unproven technology, at least from an economic perspective.

Appt, Michael 6:29
Interesting. Tariffs. I mean, that's the topic that you are here in Canada, right? That's all we talk about is tariffs and what's going to happen to Canada, et cetera, et cetera. What's your view of seeing in New York on how this is going to play out?

+19*******34 6:32
Yeah.
Yeah.
Yeah, so I think to have that conversation, let's turn the page now to a slide entitled Trade Dynamics. And what this looks at is the Canadian sort of export market to the United States, both in dollar terms and in terms of share of total US imports of
these goods. There is an asymmetric trade relationship between the United States and Canada. Canada is the US's largest trading partner by a wide margin and maintains a pretty significant trade surplus with the US economy. In other words, Canada
exports a lot more than it imports from the US. And exports in general are a pretty big portion of the Canadian economy. They account for roughly 25% of GDP. And of those exports, about 75% of them are ultimately destined for the US market. I mean, it makes
perfect sense, right? When you think about the geographic linkages between our countries, you think about historically speaking, the political linkages between our countries, this extraordinary connectivity between the US and Canada is quite profound.
On the other hand, though, the US does not have that same sort of dependency on Canadian imports. Now, there are very specific pockets of Canadian imports that are extremely valuable to the United States. By far and away, the biggest one is crude oil.
and energy products more broadly. You can also toss in timber there as something that the US kind of struggles to find elsewhere. You can toss in steel and aluminium to some extent. You can also toss, and I always think this is an interesting one, nuclear fission material, something that's

Appt, Michael 8:38
Hmm.

+19*******34 8:40
that's extremely difficult to mine in the United States. You know, a lot of people don't realise this, but I was in Saskatoon a couple of years ago, and you look around the airport, and every single sign around the airport is for uranium mining. Because when you think about the most important sources of uranium at the global scale, Canada is by far and away the biggest

Appt, Michael 8:58
Mm.

+19*******34 9:00
and most politically stable slash friendly of all the different uranium producers. Like I think the number one uranium producer globally is Kazakhstan, but I would imagine that the US would rather do business with Canada than with Kazakhstan when it comes to importing nuclear materials, which are critical for
nuclear power generation. I guess what that means, right?

Appt, Michael 9:21
I assume potash falls into that, right? Potash as well.

+19*******34 9:24
And potash would fall into that as well. Commodities are a big portion of this relationship. So you're in this interesting position, right, where on paper, economically, Canada needs the US a lot more than the US needs Canada. But in reality, Canada has a handful of tricks up its sleeve, I suppose, that helps to kind of
level the playing field in these trade negotiations. Now, as things stand right now, I mean, there hasn't been a whole lot of good news, right? I mean, this feels like a *** for tat escalation. Now, granted, it is starting at relatively small, low numbers. Yes, we're talking about 50% tariffs in some cases.

Appt, Michael 9:58
No.

+19*******34 10:08
But these are 50 percent tariffs that are targeting only about 20 billion US dollars worth of goods. This is a small, small portion of the total relationship between the US and Canada. But I think symbolically it is sending a very clear message that the US president is looking to extract more concessions from his
Canadian counterpart in Carney and is trying to play tough in this relationship. I think...

Appt, Michael 10:36
How do you, how do you see it playing out?

+19*******34 10:39
So I think, first of all, from a macro perspective, you know, the two big questions you got to ask are, A, what does this mean for Canadian GDP growth? You know, does this translate into a recession? And B, what does this mean for Canadian inflation? Do tariffs levied on American imports result in higher prices? And I would say,
The risks to the former are a whole lot greater than the risks to the latter. I'm more worried about growth than I am worried about inflation if this trade war continues. And some of that is because of A, right, the huge exposure that the Canadian economy has to the US consumer, which we chatted about, but also
B, just a few weeks ago, the Canadian government instituted a policy for tariff rebates. If you can prove to the government that the thing that you imported from the US that is now being tariffed was essentially impossible to find elsewhere, right? If you can prove that
This thing that I brought in, I can't get it in Canada and I can't get it in Europe. I can only get it from the US that you're actually entitled to a refund. So there's less inflationary pressure in many cases than you might expect. I think longer term from a policy perspective, you're going to see a couple of things.
The first is that if Kearney ever decides to reduce or eliminate the export of Canadian crude products to the United States, that would very much wake up everybody in Washington and I think force a much more difficult and timely negotiation.
US policy makers right now don't really care about the tariffs and bans that have been levied on American products. Like sure, they wish that certain Canadian provinces still sold American alcohol, but it is not the thing that's going to break the camel's back. If you eliminate crude oil exports to the northern United States,
that all of a sudden becomes a big problem. I don't think we're going to get to that point. I think as with many other trade negotiations that have occurred between the US and its various trading partners, this is ultimately going to settle into something that kind of feels like where we were before things kicked off back in July. I think President
Trump is perhaps a little bit perplexed by how tough Mark Carney has been in these negotiations. And I would actually think that he's probably gained a lot of respect for the guy as somebody that's willing to stand up for his country and his interests. And I think ultimately, you are going to see
negotiation, a push through and these tariff rates lowered. I think you're also going to see Canada continue to look for alternate trading partners. And that's something that has been discussed for a little while and gained a lot of momentum very recently with that sort of announcement that Canada may become an associate member

Appt, Michael 13:35
Yep.

+19*******34 13:41
of the European Union. Now, Canada, I think most people don't need to know this, Canada is not in Europe and so it cannot become a part of the European Union, but it can enter into sort of strategic longer term defence contracts and partnerships, you know, idea sharing, IP sharing,
more open borders for easier exchange of goods and information and people. I think Canada is very keen on leaning more into alternate trading partners. But again, Mike, to just kind of drive this point home, the amount of trade that Canada did with the European Union was a 10th
of what it did with the United States last year. You know, even if you double that, you are still looking at the U.S. being the biggest fish in a relatively small pond. So there are a lot of changes that I think might be coming from a policy perspective, but ultimately, I'm still assuming that piece is the ultimate

Appt, Michael 14:23
Yeah.

+19*******34 14:43
Group result.

Appt, Michael 14:44
Well, that's good to hear. For the record, we are right next to France. I don't know if you're aware as an American, but St. Pierre-Miquelon is a French territory right off the coast of Newfoundland. So tactically, we're right next to Europe.

+19*******34 14:49
Nation.
I.
Could be an interesting, an interesting caveat there. I actually just read about that the other day for the first time. I had no idea. But yeah, we'll see. Maybe there's some really creative political gerrymandering that happens. But I'm not holding my breath.

Appt, Michael 15:09
Yeah.
No, no. Moving on, the other topic that comes up a lot in my world is, are we all going to be replaced, right? AI and labor. How is this going to play out? How is it going to affect who's vulnerable, who's exposed to losing their jobs, et cetera, et cetera.

+19*******34 15:14
What?
Well, let's turn to the next page here, which has a more descriptive title. It's called The Labour Market Will Likely Undergo Significant Job Transformation. You know, that's one way to answer your question, Mike, is to say that, look, you know, the AI is going to change up anything or change up everything.

Appt, Michael 15:40
Yeah.

+19*******34 15:46
And I pulled this slide from a selection of slides that a colleague of mine who does a lot of work on artificial intelligence has pulled together. And what it looks at is the current exposure to artificial intelligence based off of cloud usage for all these different major industries in the United States.
and then compares that to the potential AI exposure based off of the kind of cognitive tasks that employees would do day in, day out, based off of some survey and policy work. Now, the first thing I would point out here is that you have to take these kinds of analyses
with huge chunks of salt. Because if you look at the sources of this material, the biggest one is the Anthropic Economic Index. And this individual whose last name is Ilan Du, alongside a handful of other people. These researchers are all in the employment
of Anthropic and other large language models. And that doesn't necessarily mean that they aren't speaking objectively. But when Anthropic is signing your paychecks or OpenAI is signing your paycheck, then you might be tempted or encouraged to envision a world where everybody's going to be made redundant by this technology that you are helping to develop. So

Appt, Michael 17:00
Hmm.

+19*******34 17:08
As with so many other things out there, like just remember who you're hearing this from, you know, what the biases are, what the incentives are for putting out these sorts of things. But when you put that, you know, when you kind of put that in the back of your mind and you keep that in mind, the rest of this chart,
I think generally speaking makes a good amount of sense, right? If you take it from the left-hand side to the right-hand side, you generally speaking get a good idea of how exposed these sectors are to artificial intelligence. And when you go all the way to the right-hand side of things, I mean, it kind of makes sense, right? Like difficult to implement AI in phishing. I mean, you know, at the end of the day, you can do all sorts of

Appt, Michael 17:46
Yeah.

+19*******34 17:52
you know, interesting analytical work using artificial intelligence to figure out, you know, like the best time to go fishing and the best places to go fishing and, you know, the best kinds of nets or whatever. But at the end of the day, the robot's not going fishing, or at least the computer programme is not going fishing, not anytime soon. And so you'll see that, you know, things like construction or transportation or, you know, maintenance and repair

Appt, Michael 17:58
Sure.

+19*******34 18:13
food preparation, very limited exposure to artificial intelligence, things that we do with our hands that require the physical presence of a human being, not a whole lot of risk of being eliminated by AI. You think about the other side of the page and with education and mathematics and business and the legal world.
These are areas where you're not doing a whole lot of physical things, not a lot of manual labor, areas where most of the value is created through brain power, through cognitive tasks, and those cognitive tasks can ultimately be, in many cases, replicated by AI. But I have to say,
You know, not everybody feels this way, Mike. I have to say, I am not one of these AI doomers. I'm just not. I would much rather think of AI as being additive, as being positively augmentative, than a negative for the labour market. First,

Appt, Michael 19:17
That's good to hear.

+19*******34 19:17
because, well, I mean, and you know, maybe again, kind of coming back to my earlier comment, like maybe it's because I want that to be the case because my whole job is like, you know, in theory on the line based off of this chart. You know, I work in financial services, like I don't want to lose my job. So maybe there's some wishful thinking here, but I really do believe
that, A, at the end of the day, human beings are social creatures and they like to talk to other people. You will never replace the value of direct interaction person to person. And I think that really becomes that much more important when you're doing things in person, right? So, you know, everybody imagined
post-COVID, that, oh, we're never going to go back to the office again. Everything's going to be done virtual for the rest of humanity. That wasn't really the case, right? People started to realize, like, oh, it was actually kind of nice going back into the office or nice going out for lunch or nice going out to the movies. We're social. We like being with other people. I would say the other thing, right, is that this idea
that AI is going to eliminate all employment, just doesn't really jive with the whole ethos of several 100 years of industrial history. Like if you are a business owner, would you want to fire half of your employees and maintain the same output?
or keep your employee count steady and double your output. Like you're always looking for growth. I would much rather skew towards this idea that AI results in a slowdown in hiring and kind of stretches out the hiring process and it results in layoffs. And I think you're seeing that in the data, you know, you do
see every once in a while some pretty high-profile layoffs, but those high-profile layoffs are typically concentrated at the big technology names. And while technology is a big part of the equity market, it's actually a relatively small portion of the economy, particularly from a labour perspective. And I think
You're starting to see people kind of change their approach as to how they use AI to make it more additive, make it more augmentative. Now, without a doubt, there will be people left behind. There are always people left behind in technological cycles. That's the way it works, right? When the internal combustion engine was invented, what happened to the horse and buggy driver? Like, that's just the way
that these processes evolve. But again, I am not a doomer on the AI side of things. And while I think that this chart we have up in front of us is a very interesting academic exercise and maybe suggests that some of us should go back to trade school as opposed to going to university and pursuing a very expensive liberal arts degree,

Appt, Michael 21:52
Yeah.

+19*******34 21:55
And I say this as a history major, right? Like nothing against that. Like I love my liberal arts, but I think this definitely gets an interesting conversation going, but I don't think we're heading towards some sort of jobpocalypse.

Appt, Michael 22:08
Very good. All right. The other topic du jour really is interest rates, inflation, right? Oil, et cetera.

+19*******34 22:14
Yeah.

Appt, Michael 22:18
Your take on all that.

+19*******34 22:19
Yeah, well, yeah, well, I mean, if we look at the next page here, it's titled the Fed and interest rates. Obviously the big, big headline right now is that the Federal Reserve hiked interest rates last week by 25 basis points for the first time in three years. It's been a long time since the Fed had hiked rates. And it is the sort of culmination of an
extraordinary swing in rate expectations from the start of the year. I mean, there was a period when we kicked off to 2026 and kind of moved through those early months when the war in Iran really started to get going, that the market was pricing in three cuts.

Appt, Michael 22:50
Yep.

+19*******34 23:01
You know, now it's pricing in three hikes. Like, I can't remember the last time you had such an enormous swing in rate expectations in such a relatively short period of time. And a lot of that has to do with, I would say, signalling and posturing. You know, this idea that
Kevin Warsh is the new chairman of the Federal Reserve. He's been in charge for only a few months. There were concerns about his credibility, concerns around Fed independence. You know, is he just going to toe the line? Is he just going to do what his party demands of him? And maybe he felt compelled to raise interest rates by 25 basis points to kind of
shake off all these doubts and say, no, I'm my own guy. I'm paying attention to the data. I don't just do what I'm told and kind of restore that image of credibility. I think that's part of it. I think the other part, though, is that the Federal Reserve, for better or for worse, is worried about inflation.
And, you know, so much of that inflation has thus far come from higher energy prices. We were looking at the cost of a barrel of WTI off the boil, but not too far from $100 US per barrel. And that's put enormous upward pressure on prices globally. I mean, in the US, we saw inflation jump from
2.3% to 4.2% in only a few months in Canada, we saw a jump of almost that magnitude, not quite as intense, but almost that magnitude. But when I think about where we're going from here, there are a couple of big, big questions, right? I mean, one of them is,
how much more is the Fed willing to do? And the Fed seems to be signalling that there will likely be one more hike before the year is up, and that would most likely be at the December meeting, I think.
but we'll kind of see. December feels like a pretty good bet for that. And a lot of that is going to have to do with how the inflation numbers roll through. And for what it's worth, Mike, like I'm not as worried about inflation as the Fed is for whatever reason, because so much of that inflation is
limited just to energy. And it's very difficult to see where energy prices can bleed into broader prices in a way that's big enough that it really moves the needle. Like you were still looking at core inflation that's pretty close to 2%. And that is ultimately what's going to be most impactful, I would say, for the overall health of
of an economy. I also think the Fed has to realise that, look, no matter what it does with interest rates, it's not going to reopen the Strait of Hormuz. Like the Strait is not opened or closed based off of monetary policy. Some things are just outside of the control of Kevin Warsh. So I would guess that the Fed does less than more and that that symbolism behind the hike

Appt, Michael 25:49
No.

+19*******34 25:59
was perhaps as important as the macro data that supported it. The other big question is, as we move through October, is the Bank of Canada going to follow suit? And I don't envy Macklem right now being in a very tricky position where the looney has been under

Appt, Michael 26:11
Yep.

+19*******34 26:20
quite a bit of pressure because of these growing rate differentials. The economy has been under quite a bit of pressure in large part because of all these trade shenanigans that we were talking about earlier. And the macro data in Canada do not really support the idea of an interest rate hike.
And the labour market is notably softer. We got a wage print number not too long ago that was the lowest it had been since 2017, which is pretty depressing. You know, the unemployment rate is structurally higher than what you see in the States. Inflationary pressure hasn't bled as much in Canada, and CPI numbers are lower than what they are.
in the US, I don't think there's a very compelling argument for Macklem to raise interest rates. But if he doesn't, then he's sacrificing the Canadian dollar. And how he sort of squares that circle, how he makes this all work out, I frankly don't know. As a data-dependent central banker, I
think he would lean more towards allowing the loonie to further depreciate if it means helping to support consumers that have gotten a reprieve finally from that higher rate environment that was such a problem in Canada for so long. That's what I would guess happens. And so I don't think
and the BOC are going to follow the Fed. But it is something that's very much worth paying attention to in the coming weeks, especially as we get more Canadian macro data informing us on the health of the economy.

Appt, Michael 27:51
And I thought if the war in Iran straight reopens, could that and energy prices certainly start to drop? Could that bleed its way through inflation numbers, et cetera, and maybe postpone a raise? Or is it not big enough?

+19*******34 28:03
Yeah, it could certainly. But the problem with that, right, is that we've seen that happen before. You know, that we had that memorandum of understanding that was signed back in June and crude prices dropped by 20, 25 bucks a barrel and everything felt like it was okay. This is a

Appt, Michael 28:16
Yeah.

+19*******34 28:23
the energy market, like the stock market, is a market that is extremely sensitive to headline risk, extremely sensitive to, you know, individual kind of news points and geopolitical movements. And so I don't think a central bank is going to take comfort in this idea.
that maybe there's a memorandum of understanding 2.0 that's signed tomorrow. I don't think that's enough to push people off. And by the way, Mike, if we look at the next page here, it's entitled unemployment and wages. Just kind of underscore that point about the Canadian economy. These numbers are a little bit
stale, but that unemployment rate has stuck around at 6.4% per the August numbers. That wage growth number has dropped all the way down to 2% for the August number. So again, really underscoring the kind of softness in the labour market and the fact that Canada, unlike the US maybe, but certainly Canada on its own, is not really at risk of
of heading into some sort of wage price spiral that translates into more inflationary pressure. So further, or I guess more issues for Macklem to consider as he thinks about rate policy over the coming months.

Appt, Michael 29:39
spot to be in. Speaking of that, midterms, they're coming up. How do you see that kind of playing around and playing itself out? How do we position ourselves on something like that?

+19*******34 29:41
Of.
Yeah.
Yeah, well, you know, please don't remind me. This is like my least favourite period ever a couple of years because it's where all the attention shifts for a couple of months. People get very frenzied over what ultimately from a market's perspective actually doesn't mean a whole lot. So if we look at the next
page here, it's called control of the Senate and the House are close calls. I think it's important to level set, as I'm sure probably many people dialling in would know, the midterms are for control over the American legislative branch. So this is not a presidential election that's happening in a couple of years. This is purely
for our upper house and our lower house, the Senate and the House of Representatives. And what we show on this slide is that at the moment, Republicans control both chambers of Congress, which means they have the legislative branch captive, in addition to the executive branch, in the form of the White House and the president.
But the margins of control in the legislative branch are extraordinarily narrow, right? There are 100 seats in the US Senate. Republicans control 53 of them. There are 435 seats in the US House of Representatives. Republicans control 220 of them. We are
barely talking about 51, 52% margins of control here. And the way the US legislative system works, for better or for worse, is that simple majorities are oftentimes not particularly good at getting anything done. Because to beat a presidential veto, where like a bill gets put on the president's desk, and then he says, nope, I don't want this.
sends it back, or to beat what's referred to as a filibuster, which will typically happen in the Senate, where an individual senator will stand up and deliver a 36-hour long speech to delay the vote of something and kind of wear away at the individuals in the room to beat those things.
you need a 60 person super majority in the Senate. And even with full Republican control of Congress right now, we don't have that super majority. So the scope of what the legislative branch is able to accomplish is relatively narrow. Now, we know, historically speaking, that midterms
typically do result in pretty significant swings in votes. Usually the incumbent party gives up seats, the opposing party picks up those seats. But we are not looking for a swing so significant that it would shift to some sort of super majority. In other words, it's more likely than not that the Democrats
take control over the House of Representatives. Maybe they even take control over the Senate, although that seems very unlikely given some of the redistricting that's happened. But they are not going to gain a super majority that would allow them to really interfere with the president's agenda. And so what you're left with then is on the legislative front, kind of
divided government in the sense that, you know, yes, there are areas where there is room for bipartisan cooperation, you know, stuff that the US and excuse me, rather the stuff that the Republicans and Democrats agree on, like being tough on China. But it's very difficult to imagine that the Democrats are willing to give the Republicans anything. So there will likely be
stagnation there. And it means that you're going to be spending that much more time really focusing in on the power, the authority of the executive branch. And as a reminder, like this is a president that has been remarkably effective at testing the boundaries of that power. And most of the things that we talk about when it comes to like President Trump's, you know, hallmark
kind of policy changes have done, have been accomplished, so to speak, largely in the absence of congressional oversight. Like the tariffs that you and I were chatting about earlier had nothing to do with Congress. You know, what happened in Iran had nothing to do with Congress. The big changes to the regulatory environment, nothing to do with Congress.

Appt, Michael 33:50
Mhm.

+19*******34 34:02
big changes to immigration policy, nothing to do with Congress. So ultimately, right, we're going to spend a lot of time thinking about the potential outcomes of these midterms. And, you know, from a political perspective and from a personal perspective, of course, it makes sense to care. But from a market's perspective, we're not actually assuming
a big change in anything, which is a point that I think is reinforced on the next slide here. It's called consumer confidence by political affiliation. Just showing, in addition to a few other things, how the US economy and the US stock market have performed under various
a presidential regimes. And you know, I think it is fascinating where if you start with Obama on the left hand side, the S&P 500 under Obama returned 16% per year. Under Trump 1.0, 16% per year. Under Biden, 13.5%, under Trump 2.0, 18% per year.
per year. We are talking about double digit returns regardless of red or blue. Look at GDP growth under Obama, 2.2 percent, under Trump, 1.8 percent, under Biden, 3 percent, under Trump, 2.7 percent. We are talking about strong, healthy, normal economic growth regardless of red or blue. And so, you know, at the end of the day, Mike, the point always has to be like, look,

Appt, Michael 35:04
Yeah.

+19*******34 35:24
It's important to pay attention to this stuff, and it's important to vote your conscious. But when it comes to markets and it comes to portfolios, we always try to emphasise rather this idea that you should not let politics get in the way of how you invest. That, I think, is always the ultimate takeaway from this kind of stuff.

Appt, Michael 35:42
Yeah, it's hard to do that sometimes in Canada, looking at your what's coming out of the States these days, but...

+19*******34 35:49
Oh, I understand, and I'm sorry.

Appt, Michael 35:54
Well, look, thank you very much. Thank you very much for taking the time. Very insightful. Thought it would be interesting to hear an American's take on what's going on, so I really appreciate you doing that. Thanks.

+19*******34 36:03
It was a pleasure. Thanks for having me.

Appt, Michael 36:05
You got it. Okay. Bye-bye.

Appt, Michael stopped transcription

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