What a Red Wave Means for America’s Economy 11/06/24
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On this episode of spot the morning after the twenty twenty four election, what a red sweep would mean for the markets.

I think you're going to see a united government think the country seems to want a united government. I think you're also likely to see the .

markets go up for a while. Billionaire private equity investor David rubinstein, on the economic road ahead for america's new leadership.

you'll have to deal with the deficit issues. But I think the markets don't really care about deficit.

That's what you learn. And his message to democrats, as downtown let races continue rolling in.

life will go on the country one fall apart is still the strongest country economically, technologically in the world.

M cnbc producer katy cramer squad pod election twenty twenty four another episode starts right now.

Donald trump, the former president and now president elect, has defeated rival vice president camera Harris and will return to the White house for another four years. Though N, B, C news didn't call the election until about five thirty wednesday morning. The U.

S. Stock markets were moving almost like they already new futures for the dow Jones industrial average before the market open, we're up over thirteen hundred points, over three percent. Futures for the S M, P five hundred were up over two percent, and the nasdaq futures were up one point seven. Tech is also upbeat on the news, at least so far. Tech analyst gene monster waited as we reported the returns on our special for our post election night edition of squared box.

the taos. The tax is that peace is probably a net mixed neutral on the regular ory front, this is going to be positive for a big tech. There is no question about IT.

Crypto currency bitcoin climbed to an all time high of seventy five thousand overnight, long time cyp to ball. Anthony ono says trump might achieve everything, but even if he only gets fifty percent done, IT would be powerful if you also creates .

the big insta teacher preserve. I think that will be a huge tail when, and i'll kick off this global game theory, right, if the united states source, welcome bitcoin, say, hey, this is an asset that we want on our baLance in other countries are going to have to respond.

Squad box anchors joe knin bc quick and Andrew ross sorkin spoke to David Robinson, cofounder of the carlie group, has more than four hundred billion dollars under management. The private actor billionaire is on the board of maDonna, owns the multiple orals oh, and he's interviewed four presidents for his most recent book just published in september, that he quick kicks things off.

joining us right now to talk about the implications as David rubinstein, he is cofounder and co chairman of the Carole group and David, good morning.

Good morning.

Thank you for having .

me let's talk about what this means for the markets. You you have seen the equity markets kind of often running game of maybe two and three quarters percent for the right now. We ve also seen treasury yields higher as well somewhere between twelve and fourteen basis points on the ten year. Um what do you think this means for the stock markets? First of all, clear.

the stock market is today will be up very strongly. I think many people in the financial markets were pushing for and one of the transfer tory and they got that. But also what you got got out of the election appears to be a very strong united government in the sense that the president is likely to have the house in the senate, not just a majority, but many people in the house and senate will feel they got elected because of him, and not since one thousand and sixty four, when the london Johnson won overwhelmingly, and he had big majorities in the house, in the senate, many of which are those seats came about because of Johnsons, a strong cotai.

Did you have a president with this kind of a power? So I do not trump has the power as president to do get a lot done through congress and I think members of congress will go along a lot with with what he wants. Even when president obama had majority of the house IT initially, he didn't have quite the cotai effects that I think of the trumps had in this election.

So I think you're going to see a united government. I think the country seems to want a united government. I think you're also likely to see um the markets go up for a while for sure.

So if he has a lot of sway over those senators and especially house republicans, um what do you think he will go after first? Because even if you have that kinds way, you can do everything at once, how do you think he will prioritize and what do you think the major initiatives are going to be?

Well, initially he said that he will do tarifa and I I suspect that that doesn't require congress uh, to be involved. I think his main legislation like obviously can speak for would probably be things in the tax area, uh, his tax cuts for years ago or are inspiring. And so if he wants to have them extended or enhance, you'll have to get that done relatively quickly.

I suspect to be controls the house ways and means committee, the city finance committee, looks like will he shouldn't have as much difficult to getting that done. You will have to deal with the deficit issues. But I think the markets don't really care about deficit. That's what you learn. So as long as if the markets don't care about deficits and I don't appear debate, I think he can get through this, that islam.

you might argue that the treasury market cares a little bit. And look, we had gary home saying as recently as last night that he doesn't think that this is necessarily concerned about deficits. You're just saying the treasury markets Normalize and having higher yields on the back into the curve. Um you think that's the case.

I think the theory will be that, uh, yes, will have some deficits for a while. But if economic growth can get to the level we want, that's the best way to solve deficits. There's no way we're going to solve deficits by cutting spending.

We just can't cut the key part of the government that really are ninety percent of the spending, which are entitlements, defence and interest. The only way you can really get more revenue in is greater economic growth. And I think the markets will sooner that will come about. 你 know if you were you didn't ask me about I want to say who is the big loser in this election。 It's probably a the powders the pollsters I think we're not that accurate and IT maybe artificial intelligence could be brought to the polling posting polling community because they seem to have not really predicted exactly what was happening and and now is clear that there was a gigantic wave in favor of president truman.

David a to your point about growth and and to point about dealing with deficit, the fast and we have an opportunity to see IT a Larry, think of black rock, uh, writing quote. We need to increase the size of our economy so that we are so that what we oh become smaller relative to what we make if GDP uh rate rises at an average of three percent real terms over the next five years, the country's det GDP ratio would stay roughly stable at a high but reasonable level. You believe that we can get and stay at a three percent or above rate given all of the sort of cross currents that we're just talking about.

Nobody knows for certain, but I would say that if you can get three percent or three and percent growth, that will solve a lot of problems right now that the budget is basically ninety percent interest that are entitlements, defense spending and there's no room to really cut there. And and as a result, you've got that only you're only going to get through this with with gross. There's no other way um that I can see.

Okay, let's talk maybe immigration. I would think that would be high on his list of things to get past two taxes, I understand and an immigration you think those are the first .

three immigration is an issue that the president can do a fair bit I want is um I don't know whether the president will go, I can't speak for, but whether you'll try to get legislation through congress, clearly it's very complicated to get that legislation through. But the legislation that was negotiated, uh, earlier this year that didn't pay us the congress.

Um if he were to support something like that, I suspect that we get through and the early days of his administration, the first hundred days, he should be able to get a large part of what he wants to get done. Just says rose about IT now the hundred days is an to measured but I think if in the first uh couple months, if president trump can get uh united uh uh behind a couple of ideas, I think you can get those through congress. I think congress is larger than to go along with what you what he wants because it's clear he had cotai effects throughout the nation in ways that .

the pollsters did I did not see to imagine the public and stands.

Ago I this day four years ago and I said then and I thought present trump would run again and if you go back and look at the tape, I think you were all skeptical um I didn't anticipate him exactly do what he did, but I didn't think that he really want of the proof that he had won the last time. And I think he he deserves some credit for going through very difficult circumstances.

Um he overcame a lot of financial problems, overcame a lot of legal problems, and I would not have anticipated he been able to do this but I did think he want to run I should say um finally, that president died in the world. Some credit for what he has done as well. He spent fifty years in public service um didn't do many things that he could have done on the private sector but he really dedicated his life to public service and I think a lot of things that he did will benefit the country and uh present trump. I think the chips act, for example, the infrastructure act will have benefits will see for many, many years so while president bite will be living in the political scene, I don't think we should just say that didn't accomplish a fair bit in four years even though he didn't control, uh, congress completely the way that the present trumped us.

Do you do you see the chips act surviving without being got a massive vely changed? At least same story with the again.

I I can't speak for the president, but I would say the new president, but I would say the iron ray will probably have some adjustments. I wouldn't be surprised, but don't think the I ra will go away because he does have some really good things in that. I think both republicans mocatta.

But I do think the chip sac well IT takes a while for to be felt IT will be beneficial. IT takes a while to go to foundry. You can overnight.

The infrastructure legislation, I do think, has some real benefits people already seeing. So anybody whose present on high states should feel that they have a emissions united country. And president trump said that last night, he wants to unite the country and try to bring the country together.

He isn't gona run for election again. And when you're you're freed from having to run for election again, I think you can do things that you wouldn't otherwise do. That's not a concern of his in the future. He doesn't have to worry about a being reelected. Um it's not it's not something that is going to be on as mine. So I think he deserves a lot of quit for bringing this campaign to the conclusion the way that he wanted the campaign had a lot of bitterness in IT and clearly gonna some hard feelings for some time but hopefully he can heal that and hopefully he can show some uh, Grace and and the a kindness or some is a competitors and political opponents. I think the country really wants to be united, and I think the country is looking for some strong leadership that he united the country in a way we haven't you have been able to do for a while here here.

David, on that front. But let me ask a separate question, which is to the extent that there we're gonna focus inside the democratic party that hopefully be interfecit on the morning like this and in the days and weeks and months to come, what is the lesson?

Well, the lesson is that the lesson for democrats? Y, i'm sorry.

I just was gonna and we see just called montano for SHE he. So that s, uh, David, just where we're waiting to speak, defeating john tester in monta, that boost of the G O, P. Center of majority, sorry.

to fifty two from the fifty one we are sorry.

Well, I clearly, uh, the senate is gonna republican by more than anybody thought. And I think the house from based what i've now seen is likely to be republican. And as a result, uh, present has a Mandate, I think, to do what what he wants.

Now we've learned in Mandate, they can evaporate. So if you don't get things done in the first six months or so, now you have a problem because eventually people don't like some of the things you want to do, 是 吧？ I think the president is likely to trying to do things quickly.

A lot of executive waters, which is what he did before. I think you'll have a number of executive waters in the beginning as president did as well. And I think you can get a lot done by executive waters. I think showing A H A willingness to work with the other side public can be helpful in getting some of the votes you might need from democrat because you can get everything you want with all republicans. Tes, but I an opportunity.

But back to the question of democratic, if if you were going to have dinner this evening, and maybe you are with obama or a clinton or Harris or the leadership, whatever you think the leadership given of the democratic party looks like, I don't even know if they are the leaders anymore um what would you be telling them? Well.

life will go on, uh, the country won't fall apart. Is still the strongest country economically, technologically in the world, were still the role model for metal countries around the world. But clearly, you've got to listen to what the voters want is a democracy, and the voters clearly didn't want what some people were selling, and you've got adjust in the business world.

You have to adjust when people don't want to buy your products. And in the political world of people on't buying what you want, you've got adjust. And I think that that's a lesson that we get out, get out of this.

We also realized that polls, polling is not as as a scientific as a profession. We thought. So what polling is lot Better than a wise ten or twenty or thirty years ago. It's still not perfect.

What if what if, uh, president truck want to democrat you ready for for whatever you want you for? You're good at things. You know a lot of things what you can see IT.

Ah I think the best thing for me to do is to help the bottom oils win a world series. That's my main mission.

I was going to gave IT all run the blind trust. You go into office.

they get to deal or something. I mean the your talent wasted if ask you what I know you.

I think that the best thing for me to do is to uh pear on your show from time to time. And I invited of the oils and do the best I can to help my company. Think there are a lot of Younger people in me who can do public service。

I did public service forty years ago. I got inflation to eighteen percent. Nobody is invited me back since then. And I think probably .

good reason for that. So i'm .

David rob. thanks.

If the door get, so do you might give up on the world. So thank you.

my you.

Cnbc has quick and easy to understand business news updates at the open midday and close every weekday markets, money and more from wall street to main street. I'm cnbc Jessica, adding to follow and listen to C, M, C. Business news updates wherever you get your podcasts.

Thank you for listening to this special episode of square pot as the twenty twenty four election results role in squad box is hosted by joe curin, Becky ick and Andrew scan spot is produced by me, katy cramer, Cameron costa and Caroline rohde is john laserjet our editor? Thank you for listening.

Have a great day. Cnbc has quick and easy to understand business news updates at the open midday and close every weekday. Markets, money and more from wall street to main street. I'm cnbc Jessica, adding to follow and listen to C, N, B, C. Business news updates wherever you get your podcasts.