A US-China Trade Deal Could Send Markets Soaring

0:28Hello, everyone. I need your help. My goal is to get to 1 million subscribers on YouTube, so go ahead and hit that button. There's 33 ,782 of you that have already done it, but with your help, we're going to get to our goal of 1 million. Hit the button, and let's get into today's episode. One of the big questions in finance right now, is artificial intelligence real? Is it a bubble? Are people overinvesting? Is there going to be some big market crash? Well, I sat down with Tom Lee, one of the best analysts on Wall Street, and I asked him a simple question. Is AI a bubble, Tom? Here's what he had to say.

1:00I mean, if we're measuring bubbles based on like risk reward, we're pretty far from it because in 1998, September, which is similar to today because Fed was on pause and then they started cutting again September 98. Cisco, which was the biggest company at the time, was trading at 56 times Ford PE. 18 months later, it got to 210 times. Now, Cisco made a commodity router that had many competitors. NVIDIA today is the singular most scarce company in AI. They make a chip that everyone who is building a premier model needs. It's trading at 27 times forward earnings. Costco trades at 50 times forward earnings and Walmart's 34 times.

1:44So NVIDIA is still cheaper than a membership club company. So I'd say that's why we're pretty far from a bubble. And when you bring that up to people who are skeptical or critical of kind of the AI companies, what is their response to that? I think people then say, well, there's a generalized stocks are expensive problem. And because I was just in Latin America and that's what a lot of the pension clients said. But to me, the problem people have is that stocks are trying to discount the future. And AI is not only a labor replacement. So we can calculate job replacement and that's a use case. But then there's this agentic and super intelligence potential, which creates productivity.

2:28So how do we discount that in the stock prices today? I actually think stocks are still cheap. And I know Jensen was in New York recently, met with some analysts. And I think a lot of the takeaways people had is that in the AI world, companies, enterprises that are spending are starting to see payoff on the AI spend, which means spending is picking up. I actually think AI spending is actually accelerating. Well, it always is funny to me how people are yelling bubble, but the more people who yell bubble, it seems like the less likely we're in one. Yeah. Then how do you have a bubble if every time you hear an AI CEO open their mouth, they're like, we can't keep up with demand, right?

3:07And then on top of that, the earnings reports are coming out and there's companies that are trillion plus dollar market caps that are like, we're growing faster than we thought we were going to grow. We're driving more profitability with less employees, which means that they're becoming more efficient, more productive, hence they should be more valuable, right? Yeah. Yeah. And you make a key point because I've experienced three bubbles in my three decades doing research. The biotech bubble was the most recent. The one before that was the housing bubble and the one previous that was internet bubble.

3:37And three of three times, not only were people denying the existence of the bubble because they could explain it away, but we saw behaviors that were indicative of a bubble. In the biotech bubble, hedge funds, healthcare hedge funds, were funding university projects so they could get in front of the molecule. I mean, if that was like bubble behavior to me, and as you know, in housing, people were doing ludicrous and absurd things. That's not happening in AI. In fact, everyone's so measured in AI today that it doesn't feel like a bubble. Now, I don't know about you, but hearing Tom talk about the different valuation multiples and the historical context, I'm not as worried as I might've been beforehand.

4:17AI doesn't seem to be a bubble. There's incredible demand. And all we keep hearing from companies is they can't keep up. Don't take my word for it. Tom's pretty smart. He also doesn't think it's a bubble. So keep your head on a swivel, calm down, and just think the bull market's probably just beginning. The US-China trade negotiations are the talk of financial markets. Everywhere I look, someone wants to know. They want clarity. They want to figure out what is going to happen. The disagreement between two of the world's largest economies, it's not helping things. People are confused and there's uncertainty on the horizon.

4:50It seems like every day there's a headline or a social media post that sends markets up or down. So what's really happening here? What should investors anticipate? Well, Binance Research points out that there is a 9 % chance of the proposed 100 % tariffs on China actually being in effect by November 1st. Only 9%. Now, those odds have cratered from more than 40 % just a few weeks ago. So from 40 % to 9%, the direction of travel is very important there. Now, Polymarket also currently says that there's an 80 % chance of the US and China reaching a tariff agreement by November 10th. This would be welcome clarity for investors that would allow them to pour more capital into the market and do it with confidence.

5:29And that would likely send stocks, Bitcoin and gold much higher. And as part of that tariff agreement, the market is now pricing in a 71 % chance of the agreed-upon tariffs being somewhere between 25 % and 40%. And that's relatively modest numbers when you compare it to the current threat of 100 % tariffs. So regardless of what your personal opinion is or what my opinion is, the prediction markets are telling us it is unlikely that China is going to be hit with 100 % tariff. And the markets are telling us that it's highly likely that we'll have a deal done by early November and the tariff rate is gonna settle somewhere under 40%.

6:06Capitalism versus socialism. It is a battle that has stood the test of time. Thankfully, we are now seeing in the United States of America, different cities pursue different strategies. So we're getting an A-B test. And so I sat down with Miami Mayor Francis Suarez to talk about how his city, Miami, has leaned into capitalism while cities like New York are starting to trend towards socialism. Suarez oversaw massive growth in Miami over the last couple of years. He's done it throughout his time in office, and he's also achieved record lows in crime. We're going to discuss his time in office, what lies ahead, and also this huge event that he's hosting soon.

6:42It's called the American Business Forum, and it features guests such as Lionel Messi and President Trump. Here's my conversation with Miami Mayor Francis Suarez. Francis, I thought a great place to start the conversation. there is a crisis going on in New York City. Everyone is worried about the socialist mayoral candidate winning, Zoran Mamdani. You guys have basically taken the exact opposite approach in Miami. You guys have embraced capitalism, seem to be thriving. Talk to me about what's going on and the difference between these two approaches. Well, they should be worried. What Mamdani is doing is what Fidel Castro did in the 1960s in Cuba, which is where my parents, unfortunately, were exiled from.

7:19And in there, what happened was you had this young, let's see if this creates any illusions. Young, charismatic, well-spoken guy, right? Who's not really saying anything substantively. But what he is saying is this, give me all your property, give me all your businesses and we'll make everybody equal. And he did. He made everybody equally miserable. He made everybody equally poor and he made everybody equally destitute and miserable and repressed. So he definitely made everybody equal. And that is precisely what's going to happen in New York if Mondami is elected on November 4th. It will create what I call a death spiral.

7:53And the death spiral is simple, right? You increase taxes, people that are wealthy leave, you have a budget hole, you increase taxes to fill the hole, people that are wealthy leave, you have a budget hole, you increase taxes. And so that continues until you have no more productive wealthy people who are hiring people. And you have what's called the death spiral until So basically the entire society or city collapses, which is what we've seen in Cuba. Cuba is literally a collapsed state where people are driving the same cars from the 1960s and 70s. Now, when you think about what you guys have done in Miami, I lived in Miami for a while.

8:25It's beautiful. It's amazing. I think you guys have done a fantastic job there. Talk about some of the capitalism type policies that you were able to help encourage and create an environment, but also kind of stay out of the way, right? And allow entrepreneurs to be entrepreneurs. So you were there with me every step of the way, Pump. And you saw that we had a very simple formula for success. We kept taxes low. We kept people safe. And we leaned into innovation. That's all we did. Right? We kept taxes low. I lowered taxes to the lowest rate in history. And we grew 150 % in 10 years. We used those resources to keep people safe.

8:59While some cities were defunding police or doing no-cash bail, we increased funding for our police departments. We increased our manpower. We increased technology. and we have the lowest homicide rate this year in recorded history. We started recording homicides in the 1940s. Our worst year was 220. Last year we had 27. And this year we're trending to be under 24, which is our lowest ever. And the last thing we did was we leaned into innovation. We realized that there was an inflection, right? That the world was changing. And you've been a big product of this change from a highly analog and sort of industrial world to an increasingly knowledge-based and digital world, right?

9:38Where information is flowing differently, where transactions are being done on the blockchain and are being done digitally as opposed to analogs and through fax machines and all that stuff, right? So the world is changing and for cities and countries to succeed, they have to be on the precipice of that change. So what did we do? We have the lowest unemployment in America. We have the highest median wage growth in America. We've moved companies that managed$13 trillion in assets to our community, right? The biggest names in finance, right? We increased our venture capital pipeline by over 500%, including in crypto.

10:10We were number one in the nation in crypto-based investments. We grew by 2 ,000 % in one year alone. Now, when you think about that stuff, what I found living there was there's a mix. There's a bunch of people who are kind of transplants. They've come from different areas in the country. You kind of put a flag in the ground. They're attracted to that and they go there. The other thing is though, there's a bunch of people from Miami or living in Miami already who not only one believe in capitalism, but also have a great technical chops and were able to build companies there long before people started to come.

10:39And so how have you fused together kind of the locals and the natives with the people who are coming from these other areas? It's easy because the people in Miami, sometimes maybe contrary to popular belief, they're hustlers. I mean, I think what you saw when you were here is people work hard. They want to scale. And what's great about this country is when you marry human capital with financial capital, you get scale. And when you get scale, you can change the world, right? You can create the kinds of technologies, the kinds of solutions that will actually literally change the world. And that's what I think makes Miami so successful as an American city in this environment that we're in today.

11:15If you remember, New York competed for the Amazon HQ2 prize, won it, and then said, no, thank you. So think about that for a minute. It's not just the 50 ,000 high paying jobs that you're saying no to. You're telling every other country that every other company that comes after you, hey, we don't want this trillion dollar company to bring 50 ,000 high paying jobs. That means we don't want you either. Right. So the signal is even more powerful, I think, than the decision itself. And in California, you had, you know, you had someone that said F Elon Musk and he replied, message received and went to Austin and created a gigafactory in Austin.

11:47At the same time, you remember in December 4th of 2020, there was a tweet that came out that said, what if we move Silicon Valley to Miami? And I responded, how can I help? That is a completely different attitude to the attitude that these American cities had. I wanted to bring innovators. We were number one in the nation in tech job growth, and we were number one in the nation in tech job migration. Now, when you look at this, one of the aspects I think is very fascinating is this is not just technology companies that are coming. Ken Griffin, Citadel, many other very large names in finance. Talk about the impact of these large financiers moving to South Florida and Miami specifically.

12:21The impact is dramatic, right? What we've learned is that if you have a job, and let's call this the new economy, versus the old economy, the delta between that new economy job and old economy job is two to one. In other words, it's a hundred percent increase. So what we're doing is we're upskilling adults to transition from the old economy to the new economy. But when you think about a company like Citadel, it's the same example as Amazon going to New York, right? These are high paying jobs. So it's no wonder that Miami right now is number one in the nation in an average increase of wages, in wage increase for the median income.

12:57So that's what happens when you bring a company like this, it boosts everybody up. Instead of a sinking tide sinks all boats, it's a rising tide that lifts all boats. Now, one of the things we got to talk about is every time I go to Miami, there are cranes everywhere. It is just build, build, build, build, build. Talk a little bit as to what's happening in terms of the transformation of the city itself. Well, we have a pro-growth mentality. We realize that if you reduce taxes, you will spur economic development and you'll spur investment. And then if you keep it safe, people will feel safe. I mean, the crux of investing, right, is taking reasonable risks that you can feel good about, right?

13:34That's what investing is all about, right? So people will invest in ecosystems that take care of their dollars, that take care of their people. And so we've experienced, so when I got to, became the mayor, our tax base, which is the value of all properties in Miami was approximately$40 billion. Today, as I finished my term, it's$132 billion. So it is literally 3X differential than what it was when I started. 300 % increase. Now, when you take a look at what you guys are doing with this America Business Forum, it's pretty interesting that you're bringing all these world leaders together. I think it's like Donald Trump is coming.

14:11You've got Lionel Messi. You've got all these different folks. Talk a little bit as like, what was the idea for this forum? And then what is the goal in terms of people leaving? So pump, let me sort of tie it all together for you. So this is happening the day after the New York election, right? The New York election is, is November 4th, right? And then November 5th and 6th in Miami, the two days after we're doing something radically different than New York shocker, right? So New York is taking its city in one direction, potentially hiring a democratic socialist and Miami is leaning in the opposite direction.

14:42We're bringing the biggest innovators in the world from finance, Jamie Dimon, Ken Griffin, from technology, Eric Schmidt, from sports, Leo Messi, Rafa Nadal, Gianni Infantino, Stefano Domenicali, right? From politics, the president of the United States, Donald Trump, Javier Millet, the president of Argentina, Maria Corina Machado, the democratically should have been elected president of Venezuela, and many, many more, Patrick Petave, a very popular podcaster down here in South Florida, who's interviewed a lot of these same people, and Steve Witkoff, who we just announced today. So it's really a collection of people that are solving the world's problems, that are making the world better, right?

15:23And they're going to be talking about how they made it. A lot of these guys, if not most of them, are one generation success stories, which is what makes this country phenomenal, right? You and I are both in that same category, right? People who work hard in one generation, make it. What were the adversities? What were the difficulties? How did you overcome them? How did you take defeat? How did you take no's? What do you want to announce today? How are you going to make news? How are you going to project into the future? So this is a aspirational conference that we're, by the way, you'll appreciate this.

15:53We're selling it to the public, the general public at a hundred dollars, right? For a two day conference with a ton of content, right? In the upper level,$200 in the middle level. So we're asking people to go to the website, www.americabusiness.com and hurry up and get the tickets because they're not going to last very along with the president, Leo Messi, and everybody else who's invited. Now, when you look at the term that you've had as Miami mayor, you have had, you know, massive positive impact on that city. Could you point back to one or two? I mean, obviously, the tweet is probably one of the biggest inflection points, but are there other inflection points that you kind of think about as to really driving so much of the change?

16:29Yeah, I think bringing Leo Messi's inter-Miami team to Miami, I think, wasn't a major inflection point. I mean, he could have gone anywhere in the world. He was offered $250 million by Saudi and came to Miami. So I think that's one of them. I think being in the Oval Office just a couple of weeks ago, announcing the G20 for next year, which is the greatest collection of world leaders in the world. America gets to do it once every 20 years. And when it's in your city, it can happen once in a lifetime or a generation. So I think those Those are things that have taken Miami from the capital of Latin America to a truly great global city where the impact, the decision-making, the decision-makers are all gathering here to change the world.

17:12That makes sense to me. And then when you think about the America Business Forum, you've got all these people coming in. What do you hope that people walking away from the event will walk away with? To be honest, I hope they're transformed. I hope that people come in understanding that they're going to get to hear the most exceptional people in the world. There's never been a collection like this. When these people come together, it's usually, as you know, Pump, in FII or in Davos or in Milken. You know, these are very closed conferences where you have to spend a lot of money to get access to this kind of content and to these people.

17:42I want them to come in. I want them to socialize. I want them to listen. And I want them to be transformed. I want them to leave with a thought that no mountain is too high to climb, that all their hopes and dreams are possible, and that all they have to do is delimit themselves and work hard, which is the main ingredient in this country, working hard and being ethical. Your term is coming up to an end. I think people in Miami are very sad to see you go. You're a winner. You've pretty much won in everything you've done. What are you going to do next? Oh, spend some time with my family. No, listen, as you know, I have a lot of businesses and I work a lot in the private sector.

18:16I'm a guy who has an insatiable appetite to have impact. I'm incredibly passionate about the projects that I get involved in. I love working with the people that I work with. I have a variety and diversity of things that I do from private equity to my law firm, to consulting for companies. So I do all those things. I'll probably do more of that. I want to find a way to keep my voice relevant in the conversation, whether it's going to be on a network, whether it's having a podcast, like what you've done so successfully. I want to make sure that my voice is there so that if there's another opportunity in the future, and if I'm in a place where, you know, I have little kids like you do, 11 and seven in my case, if I'm at a place where they're taking care of, my family's taking care of, and I can go back to public service, that might be something that I would look for in the future.

19:00That makes sense. Can I tell you what my favorite thing is you do as mayor? The way I dress or work out? Listen, you look amazing, perfect, the quintessential Miami mayor, but no, it's the workout videos. Come on, man. Yeah, you inspiring people and say, listen, if the mayor who's busy, he's got a lot of responsibilities, things going on, he could find time to work out, then everyone can do it. So I'll tell you two funny stories if you got a quick minute. One is the one thing I get the most compliments about in my social media is my workout video. So that tracks perfectly with what I hear in the street.

19:32The other one that was really funny was I was with my sisters and they have a trainer and their trainer asked my sisters, hey, how much can he bench 225? And I had never done it before. So I went out there and I did it for 13 times. I thought it was pretty decent, you know, because in the combine, that's not bad. So there was a video of Mondami and he was benching 135. I don't know if you saw this. Yeah, I saw it. 135 for two, barely with a spotter in the whole thing. So I put me benching the 13, 225, him benching the 135, barely. And I said, capitalism versus socialism. It went viral. So it was a lot of fun.

20:03Francis, you think I didn't see him lay down on the bench press? I was all over that one. I love it. I love it. All right. Where can we send people to follow along with you as you leave office, but also to learn more about America Business Forum. Yeah, I think let's start with America Business Forum. Please go to the website, www.americabusiness.com. The tickets are super reasonable. They will sell out fast. We have a couple of weeks left, so we're asking you to get on that quick. And then for me, you can just follow me on my social media, on Instagram. I have a Twitter account as well. Just look me up.

20:33I'm very accessible. And of course, just follow the news. Amazing. Well, thank you so much. We'll do it again in the future. Love you, man. Be good. I always enjoyed talking to Mayor Suarez He's an optimist. He's a capitalist. And he really understands how government and the private sector can work together to create an environment for companies to actually embrace innovation and create economic impact in the local community. That's it for today's show. Thank you guys so much for watching. Please remember to hit the subscribe button on YouTube. We have 33 ,782 subscribers. With your help, we'll get closer to our goal of 1 million.

21:05Hit that button and I'll see you guys live on Monday from the desk of Anthony Pompliano.