Moody's Downgrade and Tariffs Impact Markets
Digest
This podcast features four expert interviews and a news segment. Edward Yardeni offers a bullish stock market outlook despite tariff turmoil, recommending against certain sectors. Holger Schmieding analyzes the European economy, particularly in Southern Europe, and Brexit's ongoing impact, noting potential for future cooperation despite challenges. Angela Stent discusses Putin's Eurasianist worldview and the Ukraine conflict, highlighting the West's leverage through sanctions and oil prices. Dan Tannenbaum analyzes how US domestic issues hinder a strong response to the Russia-Ukraine conflict, impacting foreign policy. Finally, a news roundup covers the US Open, Thursday Night Football, and the National Zoo pandas.
Outlines
Economic Outlook and Market Analysis
Edward Yardeni discusses the V-shaped market recovery, the impact of tariffs on economic growth and inflation, his bullish stock market outlook (excluding certain sectors), bond yields, and the potential for a mini-debt crisis. Holger Schmieding analyzes the European economy and Brexit's ongoing impact, assessing the EU's receptiveness to the UK and potential for increased cooperation.
Geopolitical Analysis: Russia and Ukraine
Angela Stent discusses Vladimir Putin's Eurasianist worldview and the lack of progress in resolving the Ukraine conflict. She analyzes the West's potential leverage over Russia, including sanctions and oil prices, and assesses the risk of a domino effect in Eastern Europe. Dan Tannenbaum discusses how US domestic issues impact foreign policy, particularly regarding the response to the Russia-Ukraine conflict, analyzing the lack of significant US sanctions and their implications.
News Roundup
A brief news segment covers the upcoming renovations of the U.S. Open tennis tournament, the increased viewership of Thursday Night Football on Amazon Prime Video, and the potential for baby pandas at the National Zoo.
Keywords
V-shaped Recovery
A sharp and rapid economic rebound after a downturn.
Tariff Turmoil
Disruption and uncertainty in global trade caused by tariffs.
Eurasianism
A political ideology advocating for a geopolitical union of Eurasia.
Sanctions
Penalties imposed by one or more countries on another.
Brexit
The withdrawal of the United Kingdom from the European Union.
Geopolitical Implications
The political and strategic consequences of events on international relations.
Putin
President of Russia.
Ukraine Conflict
The ongoing military conflict between Russia and Ukraine.
US Foreign Policy
The foreign policy of the United States.
European Economy
The economic state of the European Union.
Q&A
What is Edward Yardeni's outlook on the stock market, and what sectors does he recommend avoiding?
Yardeni is bullish on the market but advises against investing in information technology, communications, industrials, and financials.
How is Brexit still impacting the UK and EU economies, and what is the potential for future cooperation?
Brexit continues to negatively impact the UK economy, but there's potential for pragmatic progress on military and economic issues, though the EU is unlikely to allow the UK to "cherry-pick" favorable aspects of EU membership.
What leverage does the West have against Russia in the Ukraine conflict, and what are the potential consequences if Putin wins?
Leverage includes sanctions, supplying arms to Ukraine, and impacting Russia's oil revenue. A Putin victory could trigger a domino effect, leading to further Russian aggression in Eastern Europe.
How are domestic issues in the US affecting its foreign policy, particularly regarding Russia?
US domestic issues are hindering a strong and unified response to Russia's actions in Ukraine, leading to a reluctance to impose sanctions and potentially weakening US influence in international affairs.
Show Notes
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyMay 20th, 2025
Featuring:
1) Ed Yardeni, president at Yardeni Research, joins for an extended discussion on the outlook for equities, his S&P target, and whether tariffs will weigh on corporate bottom lines. Asix-day winning streak in the S&P 500 is set to pause as investors bet that US stocks will lag the rest of the world. It comes as Hong Kong's pension fund managers are concerned about potential forced selling of their Treasury holdings due to Moody's downgrade of US debt, as they are only allowed to invest over 10% of their assets in Treasuries if the US has a AAA or equivalent rating.
2) Holger Schmeiding, Chief Economist at Berenberg, discusses UK-EU trade relations and the divergence of post-Soviet (lower case) liberalism and right-wing authoritarianism and their effects on European economies. It comes as European stocks are expected to outperform US stocks, driven by structural shifts such as higher investments in defense and infrastructure.
3) Angela Stent, Senior Fellow at the Brookings Institute and Georgetown professor, discusses the call between President Trump and Russian President Vladimir Putin and what it. European leaders are disappointed after a phone call between Trump and Putin, feeling that Trump is disengaging from diplomatic efforts to end the war in Ukraine and leaving Ukraine and its allies on their own.
4) Dan Tannebaum, Partner at Oliver Wyman, reacts to the Trump-Putin call and talks about what options the president has for putting pressure on Russia, as well as what opening up trade to Russia would mean. President Trump's plan for Russia and Ukraine to negotiate directly on a framework for peace talks before a truce is in place is seen as allowing Putin to buy time, with Russia presenting maximalist demands in previous talks.
5) Lisa Mateo joins with the latest headlines in newspapers across the US, including a NYT story on The US Open tennis tournament makeover and Bloomberg's story on Amazon tackling last place in the NFL ratings.
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Table of contents
United States
