WEBVTT - Surveillance: US Hiring Tops Forecasts 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.200 --> 0:00:13.039 with Jonathan Farrell and Lisa Brownowitz Jay Lee, we bring 0:00:13.119 --> 0:00:17.159 you insight from the best and economics, finance, investment, and 0:00:17.239 --> 0:00:22.400 international relations. To find Bloomberg Surveillance on Apple podcast, SoundCloud, 0:00:22.800 --> 0:00:26.280 Bloomberg dot Com, and of course on the Bloomberg terminal. 0:00:29.400 --> 0:00:32.519 It is a jobs report that is always economic in 0:00:32.600 --> 0:00:36.120 about our lives, and because of that, always political as well. 0:00:36.800 --> 0:00:40.159 And this has become a wonderful tradition at Bloomberg to 0:00:40.280 --> 0:00:42.680 give pause to look at the data and then to 0:00:42.760 --> 0:00:45.240 speak to the Secretary of Labor of the United States 0:00:45.400 --> 0:00:49.000 former Mayor of Boston John Farrell, with Murty Walsh, the 0:00:49.080 --> 0:00:51.680 US Labor Secretary Marty while she joined us from Washington. 0:00:51.920 --> 0:00:54.160 Secredy Welsh. Fantastic to catch out with you, Sarah. Happy 0:00:54.160 --> 0:00:56.320 New Year to you. Let's get straight into the Job's Report. 0:00:56.600 --> 0:00:59.400 I remember a few months back asking you how can 0:00:59.440 --> 0:01:02.320 we get in ancient dawn without unemployment climate? Well, I 0:01:02.320 --> 0:01:04.080 think it's Jelf's report is just for you, sir. Can 0:01:04.120 --> 0:01:06.559 you tell me what's in this that you think makes 0:01:06.560 --> 0:01:10.920 it sustainable? Well, I hope we continue the steady growth 0:01:10.920 --> 0:01:13.559 that we're seeing, uh, seeing the unemployment number come down, 0:01:13.800 --> 0:01:16.040 I think we have room to grow in communities of color, 0:01:16.120 --> 0:01:18.200 particularly the black community. Let's, you know, community get those 0:01:18.280 --> 0:01:20.880 numbers down a little bit. We've seen, you know, wages 0:01:20.880 --> 0:01:24.080 are still year over year up four point one percent. 0:01:24.560 --> 0:01:27.000 We went down about one tenth of a percent. I think, 0:01:27.200 --> 0:01:29.000 you know, I think, well, we're in a very interesting 0:01:29.000 --> 0:01:32.520 economic time and I don't think that a recovery that 0:01:32.520 --> 0:01:34.560 that we used to coming out of recession and going 0:01:34.560 --> 0:01:38.000 intercession is compatible to what we're experiencing today. So I 0:01:38.040 --> 0:01:40.880 hope we can continue to see these job numbers moving forward. 0:01:40.920 --> 0:01:45.200 We saw good greens and construction, hospitality, leisure, education, and 0:01:45.240 --> 0:01:47.160 health those areas in the last couple of months. We 0:01:47.200 --> 0:01:49.200 haven't seen the growth we've seen today, so we just 0:01:49.200 --> 0:01:50.920 want to see it across the board. I think companies 0:01:50.960 --> 0:01:53.280 realize it too, that it's important for us to continue 0:01:53.320 --> 0:01:55.600 move our economy forward. They're bringing people on and we 0:01:55.680 --> 0:01:58.200 need to keep bringing inflationary pressures down. It's not just 0:01:58.240 --> 0:02:01.000 the numbers today, it's the jumps numbers we've seen a week. 0:02:01.040 --> 0:02:04.560 The job openings numbers still elevated, the quicksrate elevated, indicating 0:02:04.600 --> 0:02:07.000 some confidence. I'm looking at this at the moment. Secondy 0:02:07.000 --> 0:02:08.920 Wolst and I listened to the tech companies who are 0:02:08.919 --> 0:02:11.959 making these massive layoffs. How do you distinguish between what's 0:02:11.960 --> 0:02:15.520 happening there and what you see in the official data. Well, 0:02:15.520 --> 0:02:17.480 I think the tech companies are actually looking the way 0:02:17.520 --> 0:02:20.080 their business models are. They're looking at how inflict the 0:02:20.080 --> 0:02:22.640 inflation rate impacts their business. And a lot of these 0:02:22.680 --> 0:02:24.959 folks that are being laid off in the tech industry 0:02:25.000 --> 0:02:27.760 are finding jobs in areas that quite honestly, people looking 0:02:27.760 --> 0:02:30.079 for tech experts all across the country. But these tech 0:02:30.120 --> 0:02:33.239 companies had garbled up so much talent. Certainly I would 0:02:33.280 --> 0:02:35.000 like to see a lot short tracking in the near 0:02:35.080 --> 0:02:37.920 future these tech companies rehiring folks back. We don't want 0:02:37.960 --> 0:02:40.200 to see any industry in the United States of America 0:02:40.440 --> 0:02:42.960 going through a process of laying large amounts of people off. 0:02:42.960 --> 0:02:44.800 We want to see them are being successful. A lot 0:02:44.800 --> 0:02:47.760 of people arguing that we have still a tight labor market, 0:02:47.800 --> 0:02:49.440 and with that secondary worlsh You and I have been 0:02:49.440 --> 0:02:51.560 talking about the return of labor power, So let's touch 0:02:51.560 --> 0:02:53.000 on that a little bit. Can you give us an 0:02:53.040 --> 0:02:55.400 update on the West Coast sports situation. We've gone back 0:02:55.440 --> 0:02:57.680 and forth on this for I think about nine months now. 0:02:57.720 --> 0:02:59.639 Secondary WOLVESH what's coming on and how close are we 0:02:59.720 --> 0:03:01.880 to deal? Yeah, I went out there. I was out 0:03:01.919 --> 0:03:03.640 there a lot this week. Actually, Monday, I went out 0:03:03.680 --> 0:03:05.799 to the West Coast Ports. I had a meeting. I 0:03:06.120 --> 0:03:08.360 walked the port in in l A and uh in 0:03:08.440 --> 0:03:11.520 Long Beach, and we had good conversations. I asked both sides, 0:03:11.560 --> 0:03:14.000 the union and the company. Uh, they're back at the table. 0:03:14.040 --> 0:03:17.400 They're moving forward. UH, and they're having conversations and dialogues 0:03:17.480 --> 0:03:19.799 and UM. You know the one thing I did ask them, 0:03:19.800 --> 0:03:21.440 they didn't give me a date. I'd like to see. 0:03:21.639 --> 0:03:24.160 You know, the quicker week can get this resolved, the 0:03:24.200 --> 0:03:26.560 better because it will bring a little peace of mind 0:03:26.560 --> 0:03:30.359 to people, particularly in industries of shipping. And I think that, 0:03:30.400 --> 0:03:32.120 you know, I think both sides are committed to getting 0:03:32.120 --> 0:03:34.639 it done. I'm not concerned. This is a very different 0:03:34.639 --> 0:03:37.440 situation than the rails. The rails were a situation where 0:03:37.480 --> 0:03:40.560 both sides, in the beginning of the conversation weren't having conversations. 0:03:40.760 --> 0:03:44.320 In this particular case, the shipping companies and the unions 0:03:44.360 --> 0:03:46.760 have been talking all consistently all along. What would make 0:03:46.760 --> 0:03:51.080 you concerned? Um, if if we don't. It made me 0:03:51.120 --> 0:03:54.200 concerned if they have a breakdown and conversation. Uh, this 0:03:54.280 --> 0:03:57.960 contract like the like, like the rail contracts, the massive contract. 0:03:58.000 --> 0:04:00.560 There's lots of different pieces to it. But but if 0:04:00.600 --> 0:04:03.280 if one side indicate to me that they felt they 0:04:03.320 --> 0:04:05.440 would be in there was an obstacle in the way. 0:04:05.840 --> 0:04:08.040 And that's not the case, at least not as yet. 0:04:08.440 --> 0:04:11.160 I was you know, when we started talking about this 0:04:11.200 --> 0:04:12.960 in the very beginning, I was hoping that we'd have 0:04:13.000 --> 0:04:15.720 a contract by labor Day, but clearly I was very wrong. Well, 0:04:15.760 --> 0:04:17.839 we've gotta wait, and hopefully don't have to wait too long. 0:04:17.880 --> 0:04:20.800 Another story that involved the union movement secredy WLS. So 0:04:20.839 --> 0:04:23.640 you're also involved in Conico Phillips. You're aware of this 0:04:23.760 --> 0:04:26.760 situation with its Alaska operations, this eight billion dollar all 0:04:26.839 --> 0:04:29.640 project in the Arctic. On the one hand, you've got 0:04:29.760 --> 0:04:31.840 huge union support for the project. On the other hand, 0:04:31.880 --> 0:04:35.160 the environmentalist hates it. And what more involvement from the administration. 0:04:35.480 --> 0:04:37.359 Where are you won this? Secretary Wals Do you have 0:04:37.400 --> 0:04:39.960 a side in this one? No? I haven't in neittially 0:04:40.000 --> 0:04:42.040 had to sign this one, but I was asked earlier, 0:04:42.120 --> 0:04:44.279 and you know that the labor unions are certainly putting 0:04:44.320 --> 0:04:46.159 lots of pressure in calling me on this all the 0:04:46.200 --> 0:04:48.880 side because they're concerned about it. So we're kind of 0:04:48.880 --> 0:04:51.440 seeing as we move forward here, what's going to happen. 0:04:51.640 --> 0:04:53.880 Is there a compromise and what does that compromise look like. 0:04:54.560 --> 0:04:57.120 I'm not I'm not dead involved in the conversation, so 0:04:57.160 --> 0:04:59.600 I can't I can't answer that question if there's a compromise. 0:05:00.160 --> 0:05:02.480 Final question to you, then, on the situation in Washington 0:05:02.960 --> 0:05:05.360 struggle to vote a House speaker. Secondly, Welsh is someone 0:05:05.360 --> 0:05:07.640 who works in the administration. I think it's important. I 0:05:07.680 --> 0:05:10.200 saw some criticism of the situation in the United States 0:05:10.200 --> 0:05:12.719 from Chinese state media, and I asked the question at 0:05:12.720 --> 0:05:14.680 the time when I saw that criticism, what would we 0:05:14.720 --> 0:05:17.760 prefer some of the features of democracy where you get 0:05:17.800 --> 0:05:20.400 some chaos or what takes place in dictatorships. And I 0:05:20.400 --> 0:05:22.320 want to understand from you, do you see the situation 0:05:22.320 --> 0:05:24.679 in the House right now? Secondly, well, she's a feature 0:05:24.680 --> 0:05:28.520 of democracy or something worse, not yet, but but I 0:05:29.120 --> 0:05:32.080 do hope that the Congress can get a speaker of 0:05:32.120 --> 0:05:34.680 the House, even something that that I might not agree 0:05:34.720 --> 0:05:36.400 with completely, but we need to get we need to 0:05:36.400 --> 0:05:39.360 get our government up and running fully. Uh, certainly. And 0:05:39.640 --> 0:05:42.200 I think that you know that there the Republicans are 0:05:42.200 --> 0:05:43.840 going through some challenges right now and they're trying to 0:05:43.880 --> 0:05:46.360 figure out what's going to happen there and hopefully it 0:05:46.360 --> 0:05:49.000 will be worked out shortly. Secondly, Welsh, we appreciate your time, 0:05:49.040 --> 0:05:51.480 so happy New Year. We'll catch up soon, no doubt. 0:05:51.480 --> 0:05:58.040 Thank you. Right now, let's go to Randall Crossner. He 0:05:58.120 --> 0:05:59.800 is a former FED governor. I want to take this 0:05:59.800 --> 0:06:03.279 big green broaders Mike Gains Lisa says, massages the data. 0:06:03.360 --> 0:06:06.880 This with an equity lift in the market, bonds and determinant. 0:06:06.960 --> 0:06:09.159 Right now we have curb a little bit of curbing version. 0:06:09.200 --> 0:06:11.919 I don't want to oversell that. Randa Krasner to me, 0:06:12.040 --> 0:06:16.080 this is an Elizabeth Warren jobs report. We are employing 0:06:16.120 --> 0:06:20.680 America's Americans. These are good numbers. We need to revisit this. 0:06:21.360 --> 0:06:25.679 Why does the FED want unemployment? Why do they want 0:06:25.839 --> 0:06:28.280 us to have less jobs? I think that's a huge 0:06:28.400 --> 0:06:33.520 confusion for our listeners and viewers. I think that's right. 0:06:33.600 --> 0:06:35.719 It's an important point to make because it's not that 0:06:35.760 --> 0:06:38.919 the FED wants fewer jobs. What they want is lower 0:06:38.960 --> 0:06:45.440 wage growth more because they're worried about persistent inflation. Ument 0:06:45.560 --> 0:06:51.400 of all of the costs of UH of of our 0:06:51.560 --> 0:06:55.480 production in the US is related to jobs and wages, 0:06:55.760 --> 0:06:57.960 and so if that's going up really fast, that can 0:06:57.960 --> 0:07:00.040 make it very difficult for inflation to come down on. 0:07:00.880 --> 0:07:06.000 This is the immaculate disinflation report. UM that you're starting 0:07:06.000 --> 0:07:11.560 to get lowered wage growth, but um lower unemployment rate, 0:07:11.560 --> 0:07:15.360 continued high growth in jobs. As I had said before, 0:07:15.840 --> 0:07:17.800 this has never happened before where we've been able to 0:07:17.840 --> 0:07:22.440 bring the growth of wages down and the inflation rate 0:07:22.440 --> 0:07:25.600 down without having the unemployment rate go up. This is 0:07:25.640 --> 0:07:27.640 one of those new theories we're talking about before that 0:07:27.680 --> 0:07:30.560 the FED is putting forward. It would love to see 0:07:30.560 --> 0:07:34.840 this happen, that the the wage rate growth comes down 0:07:34.960 --> 0:07:38.440 without a significant increase in the unemployment rate. This is 0:07:38.520 --> 0:07:42.040 just one month's number, So let's not say that we've 0:07:42.080 --> 0:07:44.840 got that victory here, but it's consistent with this very 0:07:44.880 --> 0:07:49.480 optimistic view that that people have that potential, or that 0:07:49.520 --> 0:07:51.280 some people have that maybe we could get through this 0:07:51.360 --> 0:07:54.200 without a significant procession. Ready, let's say that this is 0:07:54.600 --> 0:07:57.560 the science of the immaculate disinflation that should talk about. 0:07:57.880 --> 0:08:00.520 And let's say we get another read like this next 0:08:00.560 --> 0:08:03.240 month and the month after. How many does it take 0:08:03.440 --> 0:08:05.920 for the FED to adjust given the balance of risks 0:08:06.280 --> 0:08:09.000 that this is not actually an accurate picture and that 0:08:09.120 --> 0:08:11.760 inflation is still strong and that the labor market is 0:08:11.800 --> 0:08:14.920 too strong for the Fed's wishes. So they're certainly going 0:08:14.960 --> 0:08:18.200 to continue to buy buy insurance. They're not gonna say, oh, 0:08:18.080 --> 0:08:21.400 h the the inflation wage inflation is coming down, just 0:08:21.440 --> 0:08:23.840 like overall inflations coming down, We're done. They're not going 0:08:23.880 --> 0:08:26.160 to say that at all. They're certainly going to continue 0:08:26.160 --> 0:08:28.440 to to raise rates at the end of this month, 0:08:29.040 --> 0:08:32.480 likely continue to do that in uh in in March, 0:08:33.040 --> 0:08:34.920 but it may make it more likely that they go 0:08:35.040 --> 0:08:37.720 twenty five basis points rather than fifty basis points at 0:08:37.720 --> 0:08:40.280 these meetings. I think that's really where it's going to be. 0:08:40.320 --> 0:08:43.120 But there's gonna be buying some inflation because they know 0:08:43.160 --> 0:08:47.880 that this is sort of a new and untested hypothesis. Um, 0:08:47.880 --> 0:08:49.959 maybe it'll work, but they're not going to take the 0:08:50.080 --> 0:08:54.000 risk that AH declare victory and then the wage rates 0:08:54.000 --> 0:08:55.520 start to go up. Inflation rates start to go up, 0:08:55.520 --> 0:08:58.480 and then they've really got to move in uh interest 0:08:58.559 --> 0:09:01.560 rates up because they worry about using credibility. And Randy, 0:09:01.600 --> 0:09:04.160 thank you, just wonderful converis from you as always lucky 0:09:04.160 --> 0:09:06.520 to catch up with Randy Cruiser that the University of 0:09:06.600 --> 0:09:19.200 Chicago and of course fullmerly the Federal saf Right now, 0:09:19.280 --> 0:09:22.920 Jeff Rosenberg joins his portfolio manager of the Conundrum Fund 0:09:23.200 --> 0:09:26.360 at black Rocker Thrill you could join us this morning, Jeff, 0:09:26.400 --> 0:09:27.760 I want to ask you the question I was gonna 0:09:27.760 --> 0:09:32.000 ask Professor Krassner, but instead I'll go to Professor Jeff Rosenberg, 0:09:32.440 --> 0:09:36.240 and that is, can you substitute a duration or a 0:09:36.440 --> 0:09:41.360 stasis in FED policy for going up to a higher rate? 0:09:41.440 --> 0:09:44.840 Can you actually get away with that shell game? Uh? 0:09:44.880 --> 0:09:48.000 You know, it depends on what we're looking at today 0:09:48.120 --> 0:09:51.160 in in the data and what it implies about inflation 0:09:51.240 --> 0:09:54.480 today is about you know, wage inflation, and you know, 0:09:54.559 --> 0:09:57.280 can the Fed get away with a pause is really 0:09:57.320 --> 0:10:03.439 about whether they're making good on the inflation uh trajectory 0:10:03.559 --> 0:10:06.160 as the market is expecting it to decline. So they'll 0:10:06.200 --> 0:10:09.439 pause if inflation is declining, but they won't be able 0:10:09.480 --> 0:10:14.560 to if they're not achieving their inflation objectives. Uh. You know, 0:10:15.040 --> 0:10:17.679 I just want to comment second on the report is 0:10:17.760 --> 0:10:21.520 mixed between the unemployment rate and the and the and 0:10:21.600 --> 0:10:25.680 the wages. As we have seen for a number of reports, 0:10:25.960 --> 0:10:29.560 the payroll report has really become kind of the stepchild 0:10:29.640 --> 0:10:33.480 of of economic reports relative to next week's cp I. 0:10:33.640 --> 0:10:36.680 So what's really important here is what can we look 0:10:36.840 --> 0:10:40.000 through into this report as to what it says about inflation. 0:10:40.280 --> 0:10:44.120 And obviously the headline on that is average hourly earnings 0:10:44.120 --> 0:10:46.040 and that's a little bit positive. But what I want 0:10:46.040 --> 0:10:47.920 to highlight out of this report is something we haven't 0:10:47.960 --> 0:10:51.479 talked about yet. You know, the big expectations in inflation 0:10:51.600 --> 0:10:55.760 is that you have this persistent expectation that goods deflation 0:10:55.920 --> 0:10:59.960 is going to support the consensus expectation for declining inflation. 0:11:00.440 --> 0:11:02.800 One thing out of today's payroll report I think that's 0:11:02.840 --> 0:11:05.160 interesting to highlight is that if you look at the 0:11:05.160 --> 0:11:11.080 goods components whosale, trade, retail transportation, those are up total 0:11:11.559 --> 0:11:14.839 twenty six k in terms of UH. In terms of 0:11:15.400 --> 0:11:20.040 UH the monthly payroll gains. That's a significant change relative 0:11:20.080 --> 0:11:22.720 to the pace of about a three month average of 0:11:22.760 --> 0:11:27.040 negative four six month average of around six, and if 0:11:27.080 --> 0:11:29.400 you look through and you squint a little bit, it 0:11:29.600 --> 0:11:32.080 is worth noting that this is a little bit of 0:11:32.120 --> 0:11:35.760 a different story that we've had an expectation that the 0:11:35.800 --> 0:11:39.120 good side is deflating. If you look into today's payroll report, 0:11:39.120 --> 0:11:40.920 it tells you a little bit of a different story 0:11:41.040 --> 0:11:43.199 that that maybe you're seeing some signs of life in 0:11:43.240 --> 0:11:45.880 the goods. If we see that into next week's pay 0:11:46.400 --> 0:11:49.720 CPI report, that's gonna be a big change relative to 0:11:49.760 --> 0:11:52.480 market expectations. I think that's one of the interesting takeaways 0:11:52.520 --> 0:11:55.400 from today's payroll report. People don't do nuance well, JEF, 0:11:55.480 --> 0:11:57.880 especially after living under the Fed's thumb for so long 0:11:57.920 --> 0:11:59.719 in terms of don't fight the Fed. So there is 0:11:59.720 --> 0:12:03.040 a question of as you pass through the nuances of 0:12:03.120 --> 0:12:05.880 this data, what do you do? How does it shift 0:12:06.080 --> 0:12:08.200 what you actually do in the markets which you buy? 0:12:08.320 --> 0:12:12.319 What your thesis is, Yeah, well, this is the thesis 0:12:12.440 --> 0:12:16.120 for the market consensus. Thesis is that goods deflation is 0:12:16.520 --> 0:12:21.520 supporting the p inflation expectations. That supports the bed pause 0:12:22.320 --> 0:12:25.720 and really feeds into the market the bond market expectation 0:12:25.800 --> 0:12:28.400 that the FED can can pivot, so you have the 0:12:28.440 --> 0:12:32.320 tension is really on the services inflation today. On the headline, 0:12:32.360 --> 0:12:34.120 you get a little bit of support for that because 0:12:34.160 --> 0:12:36.600 you see average eily earnings coming down. But this is 0:12:36.640 --> 0:12:40.960 still a strong labor report. It's still a strong labor market, 0:12:41.000 --> 0:12:44.880 and we are not yet seeing a significant tightening in 0:12:45.040 --> 0:12:48.360 labor markets from the significant tightening and interest rates. That 0:12:48.400 --> 0:12:51.000 maybe lags, but it may also point to a lack 0:12:51.000 --> 0:12:54.480 of interest rate sensitivity in the broader economy outside obvious 0:12:54.520 --> 0:12:56.600 candidates like real estate. I'm looking right now at the 0:12:56.600 --> 0:12:59.720 market reaction as market participants passed through this, you could 0:12:59.720 --> 0:13:02.680 see yields significantly lower on the front end. This to 0:13:02.720 --> 0:13:05.360 me is interesting. Down to four point four percent, it's 0:13:05.360 --> 0:13:07.760 something to write home about considering some of the follow 0:13:07.800 --> 0:13:10.000 toty we've seen. But would you lean against this, Jeff, 0:13:10.200 --> 0:13:13.280 would you actually say this labor market report is nothing 0:13:13.320 --> 0:13:17.600 particularly shocking in order to go against what people think 0:13:17.640 --> 0:13:20.120 in terms of a hawkish FED and that they're going 0:13:20.160 --> 0:13:22.200 to hold rates at five percent for much longer than 0:13:22.240 --> 0:13:25.280 currently priced into markets. I think you can't read too 0:13:25.400 --> 0:13:28.520 much into today's report. As as I said, it's it's mixed. 0:13:28.559 --> 0:13:30.880 It's got a little bit of everything, or a little 0:13:30.920 --> 0:13:34.080 bit of something for every point of view. Uh. And 0:13:34.120 --> 0:13:37.079 then I think if if you stare really closely at 0:13:37.120 --> 0:13:39.439 some of the data, there is a suggestion here that 0:13:39.760 --> 0:13:43.120 this consensus view on the good side, you know, maybe 0:13:43.200 --> 0:13:45.560 undermined a little bit. I wouldn't read too much into that, 0:13:45.600 --> 0:13:48.080 And I think the kind of mixed messages reflective in 0:13:48.080 --> 0:13:51.320 a relatively muted bond market reaction to the report so far, 0:13:51.720 --> 0:13:54.360 if you're joining us on radio and television, Jeffrey Rosenberg, 0:13:54.400 --> 0:13:56.520 where this black rock? We continue here with a nice 0:13:56.559 --> 0:14:00.240 lift of the market's features up down, features up two 0:14:00.320 --> 0:14:03.040 forty seven. The vix comes in nicely, so it is 0:14:03.080 --> 0:14:06.800 a better equity market off the report. A bit of 0:14:06.920 --> 0:14:10.559 disinversion in the two stents spread. We are on negative 0:14:10.600 --> 0:14:15.000 seventies six basis points, a less inversion here, uh seen 0:14:15.760 --> 0:14:20.080 by the report. Michael McKee calls it a conundrum, jeff F. Rosenberg, 0:14:20.240 --> 0:14:22.960 How do you allocate here? The hallmark of what we've 0:14:23.000 --> 0:14:27.200 seen the last two days in surveillance and conversation is 0:14:27.280 --> 0:14:31.800 everyone extending out their view. It doesn't matter which shops 0:14:31.800 --> 0:14:35.760 sell side by side, everybody's is reaching out. How do 0:14:35.800 --> 0:14:40.120 you allocate a portfolio given all this uncertainty? Right now, 0:14:40.560 --> 0:14:43.840 where the safety maybe just to take a stasis bet, 0:14:44.040 --> 0:14:48.640 not a dynamic bet out into two thousand three. Yeah, 0:14:48.760 --> 0:14:50.480 you know, there's a there's a lot of sort of 0:14:50.680 --> 0:14:55.320 false changing in positions that associated with you know, year 0:14:55.360 --> 0:14:58.160 ahead outlooks in the turn of the calendar. We haven't 0:14:58.200 --> 0:15:00.680 really changed much in terms of the arrative from where 0:15:00.720 --> 0:15:03.440 we left off at the end of last year. This 0:15:03.520 --> 0:15:07.720 is a market that is is split between kind of 0:15:07.760 --> 0:15:11.840 soft landing and hard landing scenarios. But where the consensus 0:15:11.880 --> 0:15:16.320 expectation around declining inflation, you know, leads the ability for 0:15:16.360 --> 0:15:18.480 the FED to pivot. And what's interesting and what we saw, 0:15:18.920 --> 0:15:21.040 you know, in the minutes earlier this week, is the 0:15:21.040 --> 0:15:25.320 tension that that creates with this financial conditions component of 0:15:25.400 --> 0:15:28.280 monetary policy transmission. That is, you know, the FED wanting 0:15:28.320 --> 0:15:31.520 to push back on markets getting too far ahead of 0:15:31.520 --> 0:15:33.760 of a FED pivot. And I think that means for 0:15:33.880 --> 0:15:37.320 portfolio positioning, you've got to take what the market gives you, 0:15:37.840 --> 0:15:39.840 and I think you've got to be pretty cautious going 0:15:39.880 --> 0:15:43.320 into that uncertainty. What the markets giving you right now 0:15:43.360 --> 0:15:45.800 in the fixed inco market is an inverted yield curve. 0:15:46.080 --> 0:15:48.960 Your best yields are found with the least amount of risk, 0:15:49.000 --> 0:15:50.720 and I think that's what you've got to take here 0:15:51.080 --> 0:15:54.400 until some of the clarity around hard soft landing, consensus 0:15:54.520 --> 0:15:59.320 views around inflation being realized start to get validated in 0:15:59.320 --> 0:16:02.000 the data. F Rosenberg, thank you so much with black rockets. 0:16:06.080 --> 0:16:08.880 So I'm let's talk about the explosion of hiring. The 0:16:09.000 --> 0:16:13.720 numbers out of Amazon, it just they're unimagined, just where 0:16:13.760 --> 0:16:16.880 airplanes are trucks. It's unamagine the tomp to add a 0:16:16.960 --> 0:16:19.520 million people to the workforce, and my single company and 0:16:19.840 --> 0:16:23.280 in what three is it's just phenomenal. We're gonna do this. 0:16:23.400 --> 0:16:25.560 I just used my fancy new iPhone to take an 0:16:25.600 --> 0:16:28.840 expanded shot here of Lisa Brand. What's Jonathan fair on? 0:16:28.880 --> 0:16:32.120 Our guest Dan ives he has senior equity research channelists 0:16:32.520 --> 0:16:36.440 Wedbush Securities. And we're supposed to talk Apple, except Tesla's 0:16:36.480 --> 0:16:39.120 not cooperating, So we will go over to Tesla printing 0:16:39.120 --> 0:16:41.680 on one or three point zero zero? Do you have 0:16:41.720 --> 0:16:45.160 in your head a price of Tesla where ms Mr 0:16:45.320 --> 0:16:49.120 Musk's world unravels. Look, I don't think we're there yet, 0:16:49.320 --> 0:16:51.840 I mean, but I will say that, look about sixties 0:16:51.920 --> 0:16:54.880 seventy hours of the sell off has been must Twitter driven. 0:16:54.960 --> 0:16:58.200 Now now, clearly this part is the demand story, the 0:16:58.280 --> 0:17:00.840 price cuts that we're seeing in China. Know, but I 0:17:00.920 --> 0:17:03.400 believe a look at a hundred hours, we're getting to 0:17:03.440 --> 0:17:06.200 a point that I believe this is starting to get 0:17:06.200 --> 0:17:09.600 to just a massive risk ward to own despite going 0:17:09.640 --> 0:17:12.720 into a Q four where clearly that they're gonna lower 0:17:12.760 --> 0:17:14.800 guide into and I think that's really the fear. Can 0:17:14.840 --> 0:17:17.600 you help me understand the demand backdrop, particularly in China, 0:17:17.640 --> 0:17:19.639 specifically in China, do you think I was off the 0:17:19.640 --> 0:17:21.640 back of the lockdowns just a lack of spending more 0:17:21.680 --> 0:17:23.960 broadly in that economy, or off the back of competition. 0:17:24.000 --> 0:17:27.760 I'm trying to work out what lasts here and what fights. Yeah, 0:17:27.800 --> 0:17:31.720 I think about thirty to view is COVID driven in 0:17:31.800 --> 0:17:35.240 terms of the lockdowns and really what we've seen in country. 0:17:35.280 --> 0:17:37.440 But but no doubt. I mean it's an arms race 0:17:37.520 --> 0:17:40.720 that's happening in China from from Neo X being to 0:17:41.000 --> 0:17:43.240 you know called twenty and thirty other o e M 0:17:43.280 --> 0:17:45.840 s that are really going after Tesla. But when I 0:17:45.840 --> 0:17:48.160 look at the e V market in China, we're still 0:17:48.160 --> 0:17:50.320 in the second third inning I just view this as 0:17:50.359 --> 0:17:54.119 the market going from hyper growth two more moderated growth 0:17:54.320 --> 0:17:57.880 incession when they've reopened. I think a lot of people 0:17:57.880 --> 0:17:59.639 would make the argument right now that this is a 0:17:59.680 --> 0:18:03.000 more actionalistic Chinese consumer when they reopen it, they've got 0:18:03.040 --> 0:18:05.560 the spare cash to spend and buy a vehicle and 0:18:05.640 --> 0:18:09.359 they buying Tesla's or they go in local. Well, that's 0:18:09.400 --> 0:18:13.439 been the being. Ultimately, the brand of Tessla continues to 0:18:13.520 --> 0:18:15.919 really be unmatched, and I think that's why if you 0:18:15.920 --> 0:18:18.880 look at the Chinese consumer, especially on the higher end, 0:18:18.960 --> 0:18:21.600 if they're going for E v s, I'd say two 0:18:21.640 --> 0:18:23.480 of every three is going for a Tesla. And now 0:18:23.520 --> 0:18:27.280 the problem is competition price. Competition was I due to 0:18:27.320 --> 0:18:30.399 margins and that's why the clock struck midnight for TESTSA 0:18:30.400 --> 0:18:33.120 in terms of hyper growth, and that's what you're seeing 0:18:33.160 --> 0:18:36.359 reflecting the stock. Although the as we said, seventy of 0:18:36.400 --> 0:18:40.359 the sell off we believe has been musk Twitter driven 0:18:40.480 --> 0:18:41.840 all right, well, and not to get into the whole 0:18:41.920 --> 0:18:43.720 drama there, but there is this question, if you strip 0:18:43.800 --> 0:18:46.960 out that isn't related to that, how much Tesla is 0:18:46.960 --> 0:18:49.280 representative of a bigger story within the text sphere in 0:18:49.320 --> 0:18:52.040 particular that you're seeing with a lack of demand, a 0:18:52.119 --> 0:18:56.120 saturation after so much buying of certain types of electronics 0:18:56.240 --> 0:18:59.040 during the pandemic. How much have we already seen a 0:18:59.160 --> 0:19:01.479 right sizing some of the tech companies if they do 0:19:01.560 --> 0:19:04.840 layoffs versus they're more to be going more to more 0:19:05.040 --> 0:19:07.639 room to actually cut. First of all tech companies, if 0:19:07.680 --> 0:19:09.360 you looked the last four or five years, and they 0:19:09.359 --> 0:19:13.399 were spending money like rock stars, so at that pace, 0:19:13.480 --> 0:19:16.479 if you look at it, that was not sustainable clearly, 0:19:16.480 --> 0:19:19.680 and then now going into a recessionary environment and will 0:19:19.760 --> 0:19:22.959 call a hangover post COVID from a growth perspective, you're 0:19:22.960 --> 0:19:25.000 gonna see the cuts. But I look, I view the 0:19:25.000 --> 0:19:26.960 cuts similar to as I view him in O. Nine 0:19:27.400 --> 0:19:29.919 and No. One oh two. It's ultimately the start of 0:19:29.920 --> 0:19:33.240 a right sizing that weeds the next up cycle. Is 0:19:33.280 --> 0:19:38.520 this Silicon Valley adulthood upon them given crisis and they 0:19:38.560 --> 0:19:40.919 saved us all with the cardboard boxes when we couldn't 0:19:40.960 --> 0:19:43.720 go out, just as one example. But is it now 0:19:44.160 --> 0:19:49.080 finally Silicon Valley, with cost cuts, with shocks financially finds 0:19:49.119 --> 0:19:52.280 a new adulthood, a new sobriety to act like other 0:19:52.320 --> 0:19:56.199 American companies. I think they're transitioning toward that, towards that 0:19:56.240 --> 0:19:58.480 adulthood because I think they have learned from their mistakes, 0:19:58.520 --> 0:20:01.120 and I think all Microsoft never had this problem. Well 0:20:01.119 --> 0:20:04.280 look if you look at Redmon and how Microsoft did ultimately, 0:20:04.320 --> 0:20:07.439 they've been tacticians as long as i'd say with Apple 0:20:08.160 --> 0:20:10.439 in terms of everything that cooks done. But I think 0:20:10.440 --> 0:20:12.520 when you look at the rest attack, I mean it 0:20:12.600 --> 0:20:15.359 was really an arms race to really outspend because of 0:20:15.400 --> 0:20:18.640 the talent level and what demand looked like. And now 0:20:18.680 --> 0:20:21.040 it's really happening. I think we go into this Q 0:20:21.240 --> 0:20:25.400 four earnings numbers get cut. I believe Texas under owned 0:20:25.400 --> 0:20:27.919 today's two thousand nine. The New York City cab drivers 0:20:27.960 --> 0:20:30.200 barrash on Tech, and then I think we sit here 0:20:30.200 --> 0:20:33.240 in February March, April to spend. Also what happens on macro. 0:20:33.640 --> 0:20:36.920 I think tech stocks ripped higher from here despite sentiment, 0:20:36.960 --> 0:20:39.240 which you know, many yelling fire in a crowd theater, 0:20:39.359 --> 0:20:40.800 but you think we've got a guy through the kitchen 0:20:40.800 --> 0:20:44.480 sinking moment the kitchen we has to happen the last 0:20:44.480 --> 0:20:47.199