1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 2 00:00:08,760 --> 00:00:11,520 Speaker 1: Along with my co host Lisa Bramowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:33,640 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Now 7 00:00:33,760 --> 00:00:36,960 Speaker 1: is the right time to pressure China on its trade 8 00:00:37,000 --> 00:00:40,040 Speaker 1: policy because the US economy is strong enough to handle it. 9 00:00:40,120 --> 00:00:44,239 Speaker 1: This according to President Trump's Kevin Hassett, he is the 10 00:00:44,840 --> 00:00:48,680 Speaker 1: White House Council of Economic Advisor's chairman. Meanwhile, the price 11 00:00:48,760 --> 00:00:52,440 Speaker 1: of soybeans falling to the lowest levels since at one 12 00:00:52,440 --> 00:00:57,200 Speaker 1: point since now a lot of the tariffs that China 13 00:00:57,320 --> 00:01:00,120 Speaker 1: is planning to impose on US goods will hit the 14 00:01:00,160 --> 00:01:03,800 Speaker 1: farm belt. Joining me now to discuss this is Tom Halverson. 15 00:01:03,880 --> 00:01:07,760 Speaker 1: He's chief executive of co Bank, which extends loans and 16 00:01:08,160 --> 00:01:14,480 Speaker 1: other banking services to farms and other other wholesale and 17 00:01:14,600 --> 00:01:18,600 Speaker 1: livestock producers. Thank you so much for joining me today, Tom, Um. 18 00:01:18,640 --> 00:01:21,360 Speaker 1: I want to start with the price of soybeans falling 19 00:01:21,560 --> 00:01:24,720 Speaker 1: and some of the other kind of market responses to 20 00:01:24,959 --> 00:01:28,640 Speaker 1: China's tariffs. It seems like people are expecting the farm 21 00:01:28,680 --> 00:01:31,399 Speaker 1: belt to get hit pretty hard. What are you hearing 22 00:01:31,480 --> 00:01:36,119 Speaker 1: directly from the farmers who you work with, Yes, good morning, Lisa. Well, 23 00:01:35,959 --> 00:01:39,240 Speaker 1: what we're hearing both from the level of production agriculture 24 00:01:39,280 --> 00:01:43,640 Speaker 1: as well as their their cooperatives and other agribusiness who aggregate, 25 00:01:43,720 --> 00:01:48,320 Speaker 1: process and sell their their products is meaningful amount of 26 00:01:48,360 --> 00:01:52,320 Speaker 1: concern because the market is already starting to respond to this. 27 00:01:52,440 --> 00:01:55,920 Speaker 1: As you indicate, the price of soybeans is falling as 28 00:01:55,960 --> 00:01:59,960 Speaker 1: our other commodity products. And given that we export almost 29 00:02:00,040 --> 00:02:03,520 Speaker 1: fifty all of the soybeans produced in the United States, 30 00:02:03,640 --> 00:02:09,080 Speaker 1: we are particularly susceptible to changes in foreign demand for 31 00:02:09,160 --> 00:02:14,239 Speaker 1: our products. Given that we export approximately of all US 32 00:02:14,320 --> 00:02:18,280 Speaker 1: agricultural products, particularly susceptible. Can you talk about what you 33 00:02:18,320 --> 00:02:23,119 Speaker 1: expect the financial consequences to be in real terms? Well, 34 00:02:23,160 --> 00:02:27,040 Speaker 1: I would. I would contextualize that by saying, since the 35 00:02:27,160 --> 00:02:31,560 Speaker 1: United States Department of Agricultures assessment of net farm income 36 00:02:31,600 --> 00:02:35,080 Speaker 1: in the United States, it's off fifty since when it 37 00:02:35,160 --> 00:02:39,359 Speaker 1: was at it's high. So while while the rest of 38 00:02:39,400 --> 00:02:43,840 Speaker 1: the macro economy is generally doing quite favorably, the real economy, 39 00:02:43,840 --> 00:02:47,600 Speaker 1: and generally agricultural economy in particular, is doing much less 40 00:02:47,600 --> 00:02:51,480 Speaker 1: well right now as a result of commodity prices already 41 00:02:51,520 --> 00:02:54,359 Speaker 1: having fallen significantly off the highs that they had three 42 00:02:54,440 --> 00:02:57,960 Speaker 1: or four years ago. And so what we're anticipating is 43 00:02:57,960 --> 00:03:01,000 Speaker 1: is the market is going to respond on hereby further 44 00:03:01,120 --> 00:03:04,640 Speaker 1: falls potentially in in prices UH, and a lot of 45 00:03:04,680 --> 00:03:07,959 Speaker 1: the product that that that is already an inventory or 46 00:03:08,000 --> 00:03:10,480 Speaker 1: has now been planted for this year and this year's 47 00:03:10,480 --> 00:03:15,080 Speaker 1: season UH is going to create new challenges from a 48 00:03:15,120 --> 00:03:19,320 Speaker 1: pricing perspective as we have to find alternative markets potentially 49 00:03:19,360 --> 00:03:23,040 Speaker 1: for these products. If these terroffts and these changes in 50 00:03:23,120 --> 00:03:27,720 Speaker 1: market behavior and the underlying UH disagreements that we have 51 00:03:28,040 --> 00:03:33,120 Speaker 1: with China and other important agricultural export market governments can't 52 00:03:33,160 --> 00:03:37,440 Speaker 1: be resolved amicably and swiftly, do you think that there 53 00:03:37,480 --> 00:03:41,520 Speaker 1: will be more defaults just from the financial perspective as 54 00:03:41,560 --> 00:03:46,080 Speaker 1: the price falls of a lot of these commodities. Well, 55 00:03:46,120 --> 00:03:49,240 Speaker 1: I think that the pressure that's been building in in 56 00:03:49,360 --> 00:03:52,360 Speaker 1: agricultural production in the United States over the last two, 57 00:03:52,480 --> 00:03:55,800 Speaker 1: three or four years for the reasons I described, is 58 00:03:55,920 --> 00:03:59,720 Speaker 1: likely to intensify. As I say, if these if these 59 00:03:59,720 --> 00:04:04,200 Speaker 1: trade uh disagreements are not amicably and swiftly resolved, and 60 00:04:04,200 --> 00:04:07,240 Speaker 1: and one consequence of that would of course be potentially, 61 00:04:07,720 --> 00:04:12,680 Speaker 1: you know, more producers and other institutions involved in agricultural 62 00:04:12,720 --> 00:04:16,679 Speaker 1: production and processing and the like falling into financial stress. 63 00:04:18,200 --> 00:04:24,479 Speaker 1: I'm wondering whether people within the farming community view this 64 00:04:24,800 --> 00:04:29,600 Speaker 1: as the US needing to capitulate or China needing to stop. 65 00:04:29,640 --> 00:04:31,640 Speaker 1: I mean, are they viewing this in political terms or 66 00:04:31,680 --> 00:04:35,400 Speaker 1: do they not really care? They just want the uncertainty 67 00:04:35,480 --> 00:04:37,960 Speaker 1: to sort of end and allow things to get back 68 00:04:38,000 --> 00:04:40,160 Speaker 1: to the way they used to be. Well, I think 69 00:04:40,480 --> 00:04:42,240 Speaker 1: I think if you ask you know, ten or a 70 00:04:42,320 --> 00:04:45,360 Speaker 1: hundred different people, you'll get ten or a hundred different opinions. 71 00:04:45,720 --> 00:04:48,960 Speaker 1: All of them, I would suggest, would be very well informed. 72 00:04:49,040 --> 00:04:53,440 Speaker 1: Because agricultural producers in the United States, being so significantly 73 00:04:53,480 --> 00:04:57,400 Speaker 1: dependent on foreign export markets, are actually quite knowledgeable and 74 00:04:57,440 --> 00:05:02,320 Speaker 1: sophisticated and understanding what's going on in places like China, Mexico, 75 00:05:02,360 --> 00:05:05,400 Speaker 1: and Canada where a lot of their product is sold. 76 00:05:05,440 --> 00:05:07,920 Speaker 1: And while they may have a thoughtful view about how 77 00:05:07,960 --> 00:05:10,440 Speaker 1: best to resolve these issues, I think for the for 78 00:05:10,520 --> 00:05:13,280 Speaker 1: the majority of people, what they want is for these 79 00:05:13,320 --> 00:05:16,040 Speaker 1: issues to be resolved and for some certainty to come 80 00:05:16,080 --> 00:05:19,520 Speaker 1: back into the marketplace, because they all know, as we do, 81 00:05:20,320 --> 00:05:22,920 Speaker 1: that that this is not just an issue today. Over 82 00:05:22,960 --> 00:05:25,560 Speaker 1: the next twenty years or twenty five years, we think 83 00:05:25,560 --> 00:05:27,479 Speaker 1: there will be more than two billion more people on 84 00:05:27,520 --> 00:05:30,719 Speaker 1: the earth, and of them will be in India, China, 85 00:05:30,760 --> 00:05:36,040 Speaker 1: and Africa. And that is a substantial upside trade export 86 00:05:36,080 --> 00:05:40,040 Speaker 1: opportunity for the United States, which has the world's most 87 00:05:40,040 --> 00:05:44,680 Speaker 1: successful and efficient agricultural production complex uh and and for 88 00:05:44,800 --> 00:05:47,480 Speaker 1: us to be able to capitalize on that opportunity over 89 00:05:47,520 --> 00:05:50,880 Speaker 1: the next five, ten, fifteen, twenty years, we need certainty, 90 00:05:51,279 --> 00:05:53,680 Speaker 1: and that certainty needs to be built on a foundation 91 00:05:53,760 --> 00:05:57,080 Speaker 1: of access on a free, fair and equitable basis to 92 00:05:57,160 --> 00:06:01,000 Speaker 1: foreign markets where people are going to need to buy 93 00:06:01,400 --> 00:06:04,320 Speaker 1: our surpluses and they're gonna want to buy our surpluses 94 00:06:04,400 --> 00:06:07,200 Speaker 1: because they're such high quality. Tom, just real quick here, 95 00:06:07,200 --> 00:06:09,920 Speaker 1: we just have a better minute left. Which state do 96 00:06:09,960 --> 00:06:14,520 Speaker 1: you think we'll get hit hardest by the tariffs? Uh? 97 00:06:14,560 --> 00:06:16,560 Speaker 1: You know, it depends on how all of this plays out. 98 00:06:17,120 --> 00:06:19,440 Speaker 1: And I can't tell you down to the down to 99 00:06:19,480 --> 00:06:21,560 Speaker 1: the dime, but if you look at you know, you 100 00:06:21,600 --> 00:06:25,560 Speaker 1: could answer that question almost specifically by commodity groups. So, 101 00:06:25,680 --> 00:06:29,440 Speaker 1: for example, almost of the cotton produced the United States 102 00:06:29,520 --> 00:06:34,560 Speaker 1: is is exported, right uh, Almost fifty of the soybeans 103 00:06:34,560 --> 00:06:38,159 Speaker 1: are exported. A substantial portion of that goes to goes 104 00:06:38,200 --> 00:06:40,560 Speaker 1: to China. While a lot of our soybeans come from 105 00:06:41,279 --> 00:06:45,680 Speaker 1: the Midwest, including places like you know, Iowa, Illinois and 106 00:06:45,800 --> 00:06:48,800 Speaker 1: other states. You know, it's the bread basket commodity producing 107 00:06:48,839 --> 00:06:53,760 Speaker 1: states particularly that produce some of the highest volume products 108 00:06:54,520 --> 00:06:58,839 Speaker 1: that may that may experience the most difficulties. Tom Haliverson, 109 00:06:58,920 --> 00:07:01,320 Speaker 1: thank you so much for joining me today. Tom Halverson 110 00:07:01,440 --> 00:07:04,839 Speaker 1: is President, chief executive officer of KO Bank, which extends 111 00:07:05,000 --> 00:07:09,640 Speaker 1: loans and other banking services to farms and other agricultural 112 00:07:09,680 --> 00:07:27,440 Speaker 1: producers across the US. It is hard to parse out 113 00:07:27,760 --> 00:07:31,680 Speaker 1: the noise from what you really need to pay attention to. 114 00:07:31,960 --> 00:07:34,200 Speaker 1: Right now, our next guest is going to talk about 115 00:07:34,840 --> 00:07:38,080 Speaker 1: that process from an investment perspective. Aaron Kennon joins us now. 116 00:07:38,080 --> 00:07:40,720 Speaker 1: He's co founder and chief executive officer of Clear Harbor 117 00:07:40,800 --> 00:07:44,520 Speaker 1: Asset Management, which is based in New York. Aaron, thank 118 00:07:44,560 --> 00:07:46,840 Speaker 1: you so much for being with me. And I just 119 00:07:46,880 --> 00:07:50,040 Speaker 1: want to start with the idea that the top headlines 120 00:07:50,080 --> 00:07:55,720 Speaker 1: today on this otherwise slow summer Monday has to do 121 00:07:56,080 --> 00:08:00,320 Speaker 1: with children being taken from their families and immigrant Asian 122 00:08:00,400 --> 00:08:02,760 Speaker 1: policy and who's to blame, and then you have a 123 00:08:02,760 --> 00:08:07,360 Speaker 1: potential trade war with China and the US. This in 124 00:08:07,400 --> 00:08:11,040 Speaker 1: the past few months has been noise for the markets 125 00:08:11,240 --> 00:08:14,120 Speaker 1: that most people have tried to block out. What are 126 00:08:14,160 --> 00:08:18,960 Speaker 1: you paying attention to right now? Well, thanks for having me, Lisa, 127 00:08:19,040 --> 00:08:21,760 Speaker 1: And certainly we don't want to discount the importance of 128 00:08:22,040 --> 00:08:26,200 Speaker 1: humanitarian concerns at the border, but we are keeping our 129 00:08:26,200 --> 00:08:29,080 Speaker 1: eyes on the fundamentals of what's happening in the economy 130 00:08:29,200 --> 00:08:33,560 Speaker 1: and trying to understand how that will impact various asset classes. So, 131 00:08:33,640 --> 00:08:36,199 Speaker 1: for example, in the United States, we're we're still looking 132 00:08:36,240 --> 00:08:40,560 Speaker 1: at a robust economic picture, both from the perspective of 133 00:08:40,640 --> 00:08:45,559 Speaker 1: fundamental data like retail sales and consumption and sentiment, as 134 00:08:45,559 --> 00:08:48,000 Speaker 1: well as frankly, that the underlying earnings, which as we 135 00:08:48,040 --> 00:08:50,559 Speaker 1: know in Q one were really strong and we expect 136 00:08:50,720 --> 00:08:53,600 Speaker 1: will be actually quite strong in Q two, based on 137 00:08:53,640 --> 00:08:56,720 Speaker 1: a bunch of different data points that that we're looking at. 138 00:08:57,120 --> 00:09:00,760 Speaker 1: I think that the story though on like two thousand 139 00:09:00,760 --> 00:09:04,280 Speaker 1: and seventeen, Lisa, where we saw this sort of synchronized 140 00:09:04,480 --> 00:09:09,400 Speaker 1: global growth story is that the Eurozone and even China 141 00:09:09,440 --> 00:09:12,240 Speaker 1: to a great extent, they're hitting some speed bombs, and 142 00:09:12,320 --> 00:09:15,000 Speaker 1: I think it's um It's it's not the tale of 143 00:09:15,000 --> 00:09:18,600 Speaker 1: two stories because growth is still positive, but certainly UH 144 00:09:18,840 --> 00:09:22,000 Speaker 1: there's much more to pass through at the moment. President 145 00:09:22,040 --> 00:09:27,160 Speaker 1: Trump's UH top economic advisor today said that this is 146 00:09:27,200 --> 00:09:31,920 Speaker 1: the time to start a trade skirmish with China because 147 00:09:31,960 --> 00:09:36,479 Speaker 1: the US economy is strong enough to withstand any potential setback, 148 00:09:36,520 --> 00:09:40,000 Speaker 1: even short term, given the fact that it's full speed 149 00:09:40,040 --> 00:09:44,520 Speaker 1: ahead right now. Do you agree? I don't. I think 150 00:09:44,880 --> 00:09:48,000 Speaker 1: the trade skirmishes are things that tend to happen in public, 151 00:09:48,160 --> 00:09:51,800 Speaker 1: and I think very important policy matters, even with countries 152 00:09:51,840 --> 00:09:54,720 Speaker 1: that are not our allies, but particularly countries that are 153 00:09:54,800 --> 00:09:57,360 Speaker 1: and I'm not referring now to China, but countries like 154 00:09:57,559 --> 00:10:00,599 Speaker 1: Canada and countries within the euro Zone. You deal with 155 00:10:00,600 --> 00:10:03,439 Speaker 1: a lot of disagreements in private, because when you come 156 00:10:03,440 --> 00:10:05,680 Speaker 1: to a conclusion, the other side is able to save 157 00:10:05,800 --> 00:10:08,559 Speaker 1: face and move forward, and that has huge political benefits. 158 00:10:08,559 --> 00:10:10,720 Speaker 1: So as much as I agree with some of the 159 00:10:10,720 --> 00:10:13,640 Speaker 1: concerns that the current administration has with China and maybe 160 00:10:13,640 --> 00:10:17,280 Speaker 1: even with some of our allies and reviewing things like NAFTA, 161 00:10:17,520 --> 00:10:19,920 Speaker 1: I think the approach is somewhat flawed and that it's 162 00:10:19,960 --> 00:10:22,960 Speaker 1: not allowing for them to achieve their own set objectives. 163 00:10:23,040 --> 00:10:27,640 Speaker 1: So are you changing any of your trading strategies or 164 00:10:27,679 --> 00:10:32,000 Speaker 1: your portfolios in response to some of these trade concerns 165 00:10:32,200 --> 00:10:36,839 Speaker 1: or is that sort of all hypothetical at this point? Well, so, 166 00:10:36,960 --> 00:10:39,240 Speaker 1: the real question on the trade war side is are 167 00:10:39,280 --> 00:10:41,920 Speaker 1: we actually going to enter a trade war or is 168 00:10:41,960 --> 00:10:44,400 Speaker 1: someone going to blank will be the US in the 169 00:10:44,440 --> 00:10:46,120 Speaker 1: case of the U S and China? What could it 170 00:10:46,200 --> 00:10:49,120 Speaker 1: be China. We don't know the outcome of that for sure, 171 00:10:49,559 --> 00:10:52,000 Speaker 1: as it pertains to how we're thinking about clients and 172 00:10:52,000 --> 00:10:56,560 Speaker 1: their portfolios. I mean, certainly one trend that's worth looking 173 00:10:56,600 --> 00:10:59,720 Speaker 1: at that isn't specific to to trade wars, but its 174 00:11:00,000 --> 00:11:02,240 Speaker 1: effect to a trend over the last six months is 175 00:11:02,280 --> 00:11:06,280 Speaker 1: inflation versus growth. Inflation was a real concern as we 176 00:11:06,320 --> 00:11:08,600 Speaker 1: sort of moved through the first quarter of this year. 177 00:11:08,920 --> 00:11:11,560 Speaker 1: It seems to have subsided. The data suggests that that's 178 00:11:11,559 --> 00:11:15,280 Speaker 1: warranted for it to be subsided um and now what 179 00:11:15,320 --> 00:11:18,200 Speaker 1: we're seeing is a concern around growth, and so for 180 00:11:18,320 --> 00:11:21,240 Speaker 1: the fixed income asset class. That's actually a bit of 181 00:11:21,240 --> 00:11:24,439 Speaker 1: a positive thing, right, So if inflation were to go up, 182 00:11:24,640 --> 00:11:28,040 Speaker 1: yields would probably trend higher, whereas if if growth were 183 00:11:28,040 --> 00:11:30,160 Speaker 1: to slow down, yields were to trend lower. So that's 184 00:11:30,280 --> 00:11:32,760 Speaker 1: sort of a roundabout wave me saying I don't mind 185 00:11:32,840 --> 00:11:36,880 Speaker 1: nudging sort of fixed income average maturity or average duration 186 00:11:37,320 --> 00:11:39,960 Speaker 1: towards a benchmark here, whereas the beginning of the year 187 00:11:40,280 --> 00:11:42,560 Speaker 1: I had a tendency to be a little shorter duration. 188 00:11:42,640 --> 00:11:46,040 Speaker 1: So we are making adjustments based on the economic fundamentals 189 00:11:46,040 --> 00:11:49,080 Speaker 1: that are that are occurring before us, UM, but we 190 00:11:49,080 --> 00:11:51,760 Speaker 1: were certainly not making predictions as to the likelihood of 191 00:11:51,880 --> 00:11:54,319 Speaker 1: an all out trade war. So you've been lengthening the 192 00:11:54,400 --> 00:11:58,120 Speaker 1: duration of your fixed income portfolio, Is that correct? Yeah? Yeah, 193 00:11:58,160 --> 00:12:00,760 Speaker 1: we we've We've been willing to to to move it 194 00:12:00,840 --> 00:12:04,720 Speaker 1: modestly outward as tenure treasuries have risen call it, fifty 195 00:12:04,760 --> 00:12:08,600 Speaker 1: basis points uh this year, and as the paradigm has 196 00:12:08,640 --> 00:12:12,959 Speaker 1: shifted from inflation to growth concerns. UM, we think that 197 00:12:13,000 --> 00:12:15,920 Speaker 1: it's a prudent thing for for us to do to 198 00:12:16,000 --> 00:12:19,200 Speaker 1: not make a huge bet by being a short duration 199 00:12:19,280 --> 00:12:22,760 Speaker 1: here at the moment as it pertains to equities. You 200 00:12:22,800 --> 00:12:25,559 Speaker 1: know what's interesting is earnings growth has been very robust 201 00:12:25,679 --> 00:12:28,840 Speaker 1: li so, but multiples forward multiples have come down, so 202 00:12:28,880 --> 00:12:33,240 Speaker 1: the markets cheaper even as corporate earnings have proven uh stronger. 203 00:12:33,360 --> 00:12:37,760 Speaker 1: So again we're we're not super bullish per se because 204 00:12:37,800 --> 00:12:41,880 Speaker 1: we've had a hugeage point running the United States, but 205 00:12:42,240 --> 00:12:44,920 Speaker 1: but we're still constructive. And I would also say that 206 00:12:44,960 --> 00:12:48,480 Speaker 1: when you look at the duration of this expansion since 207 00:12:48,840 --> 00:12:51,040 Speaker 1: the bottom of the Great Recession, or since the last 208 00:12:51,080 --> 00:12:53,800 Speaker 1: expansion every peak in the fall of two thousand and seven, 209 00:12:54,240 --> 00:12:58,319 Speaker 1: the cumulative GDP that has occurred since that period is 210 00:12:58,360 --> 00:13:02,160 Speaker 1: only about fifteen since so it's a very shallow expansion 211 00:13:02,200 --> 00:13:05,000 Speaker 1: that we've had. Now some could view that as a negative. 212 00:13:05,000 --> 00:13:08,080 Speaker 1: We view it as a positive, meaning that inventories haven't 213 00:13:08,120 --> 00:13:11,240 Speaker 1: been able to overshoot and that the expansion may have 214 00:13:11,400 --> 00:13:14,440 Speaker 1: many more months, many more quarters of legs here, unlike 215 00:13:14,480 --> 00:13:17,439 Speaker 1: some of the other expansionary periods of the last hundred years. 216 00:13:17,440 --> 00:13:20,400 Speaker 1: How concerned are you about the fact that non financial 217 00:13:20,440 --> 00:13:25,880 Speaker 1: companies are increasingly levering up right now, especially given the 218 00:13:25,880 --> 00:13:28,760 Speaker 1: fact that A. T and T and Comcast are poised 219 00:13:28,760 --> 00:13:33,760 Speaker 1: to buy Time Warner and possibly the Fox assets and 220 00:13:34,040 --> 00:13:37,880 Speaker 1: would end up with three hundred and fifty billion dollars 221 00:13:37,880 --> 00:13:40,480 Speaker 1: of bonds and loans on their books. That's according to 222 00:13:40,600 --> 00:13:42,560 Speaker 1: a study that was highlighted in the Wall Street Journal today. 223 00:13:42,600 --> 00:13:46,840 Speaker 1: Does that worry you, I think on on in isolation, 224 00:13:46,920 --> 00:13:50,319 Speaker 1: it doesn't worry us, or I should say in isolation, 225 00:13:50,320 --> 00:13:52,600 Speaker 1: it could worry us. But when when when we look 226 00:13:52,679 --> 00:13:54,800 Speaker 1: at the reality of where we are in the interst 227 00:13:54,840 --> 00:13:58,160 Speaker 1: rate complex, where monetary authorities are around the world, it's 228 00:13:58,200 --> 00:14:02,480 Speaker 1: just still a very easy money environment um with a 229 00:14:02,559 --> 00:14:05,280 Speaker 1: lack of inflation, with the ECB still at the zero bound, 230 00:14:05,280 --> 00:14:09,520 Speaker 1: and very devilish last week with Corona in Japan, very devish. 231 00:14:09,600 --> 00:14:12,760 Speaker 1: And yes, the United States is a sort of ahead 232 00:14:12,760 --> 00:14:16,360 Speaker 1: of the curve on on normalizing policy. We think that 233 00:14:16,400 --> 00:14:19,720 Speaker 1: if global growth truly does decelerate meaningfully, they're going to 234 00:14:19,800 --> 00:14:22,400 Speaker 1: hit the pause button. That's not our base case right now. 235 00:14:23,200 --> 00:14:25,640 Speaker 1: We still think that one or two rate hikes this year, 236 00:14:25,680 --> 00:14:29,440 Speaker 1: perhaps even two is possible. But M and A activity 237 00:14:29,480 --> 00:14:32,680 Speaker 1: has been robust. The cost of money relative to historicals 238 00:14:33,160 --> 00:14:37,120 Speaker 1: is still relatively inexpensive, so we're not particularly concerned about 239 00:14:37,160 --> 00:14:39,560 Speaker 1: that at the moment. Thank you so much for being 240 00:14:39,560 --> 00:14:42,040 Speaker 1: with me. Aaron Kennon is co founder and chief executive 241 00:14:42,080 --> 00:14:46,360 Speaker 1: officer of Clear Harbor Asset Management, based in New York. 242 00:14:47,200 --> 00:14:50,680 Speaker 1: Really interesting to hear this sort of on one hand 243 00:14:50,720 --> 00:14:53,040 Speaker 1: and on the other we are getting to, uh, sort 244 00:14:53,080 --> 00:14:55,360 Speaker 1: of the final innings, people say, although they've been saying 245 00:14:55,360 --> 00:14:58,160 Speaker 1: that for years of a credit cycle. Yet earnings do 246 00:14:58,240 --> 00:15:18,320 Speaker 1: look solid and expectations look solid going forward. We've entered 247 00:15:18,360 --> 00:15:22,880 Speaker 1: an escalatory cycle of tit for tat trade dispute. UH. 248 00:15:22,920 --> 00:15:26,920 Speaker 1: This is the conclusion to analysts led by Michael jesus 249 00:15:27,000 --> 00:15:29,960 Speaker 1: over at Morgan Stanley, chief US public Policy and municipal 250 00:15:29,960 --> 00:15:33,720 Speaker 1: strategist UH and Michael joins us. Now, Michael, thank you 251 00:15:33,760 --> 00:15:36,520 Speaker 1: so much for being with me. So just let's start there. 252 00:15:36,720 --> 00:15:41,160 Speaker 1: Why do you think that we're entering this cycle? Yeah, well, 253 00:15:41,880 --> 00:15:45,320 Speaker 1: so basically, I think the pattern of behavior now has 254 00:15:45,440 --> 00:15:50,160 Speaker 1: made it pretty clear that this isn't just a negotiation. UM, 255 00:15:50,280 --> 00:15:54,840 Speaker 1: that the US and its allies have some irustrating partners 256 00:15:54,840 --> 00:15:58,200 Speaker 1: to demonstrates some fundamentally different views of the payoffs of trade. 257 00:15:58,320 --> 00:16:01,040 Speaker 1: So what do I mean by that? Is at um 258 00:16:01,120 --> 00:16:04,200 Speaker 1: and when the US acts and the U responds, the 259 00:16:04,280 --> 00:16:07,200 Speaker 1: you or and or China responds, you know, the US 260 00:16:07,280 --> 00:16:09,480 Speaker 1: is acting in a way where it thinks it's leveling 261 00:16:09,520 --> 00:16:12,320 Speaker 1: the playing field. Trading partners are responding in the way 262 00:16:12,360 --> 00:16:14,920 Speaker 1: they think is leveling the playing field, and by definition 263 00:16:14,960 --> 00:16:17,440 Speaker 1: that means that they view the playing field differently, and 264 00:16:17,480 --> 00:16:20,640 Speaker 1: you continue to escalate. That's problem one, and then problem 265 00:16:20,680 --> 00:16:24,880 Speaker 1: too is um both sides kind of disagree on how 266 00:16:24,960 --> 00:16:27,960 Speaker 1: to kind of break the circuit right, and so negotiations 267 00:16:27,960 --> 00:16:30,960 Speaker 1: would be one obvious way, and it would seem, for example, 268 00:16:31,080 --> 00:16:34,800 Speaker 1: that the negotiations between the US and China, we're going 269 00:16:34,880 --> 00:16:37,960 Speaker 1: to or or thwart the initiation of the tariffs that 270 00:16:38,000 --> 00:16:41,080 Speaker 1: were announced on Friday. But that didn't necessarily happen. And 271 00:16:41,080 --> 00:16:43,080 Speaker 1: I think we got some insight into why that didn't 272 00:16:43,120 --> 00:16:46,680 Speaker 1: happen when wilb Ross told our European allies that he 273 00:16:46,720 --> 00:16:50,440 Speaker 1: didn't think that we couldn't negotiate um even after we've 274 00:16:50,520 --> 00:16:54,000 Speaker 1: instituted tariffs there, so that the institution of tariff shouldn't 275 00:16:54,000 --> 00:16:57,480 Speaker 1: they get um the possibility of negotiations. So in the 276 00:16:57,480 --> 00:17:01,880 Speaker 1: European Allies, Beer clear view it differently, so you don't 277 00:17:01,920 --> 00:17:04,920 Speaker 1: have an obvious circuit breaker, and you've got a dynamic 278 00:17:05,000 --> 00:17:07,800 Speaker 1: which is escalatory and so therefore we think markets are 279 00:17:07,800 --> 00:17:09,679 Speaker 1: going now going to have to think a couple of 280 00:17:09,680 --> 00:17:12,119 Speaker 1: steps ahead. It's not just about pricing what the Section 281 00:17:12,160 --> 00:17:14,040 Speaker 1: three or one tariffs are going to do the g 282 00:17:14,119 --> 00:17:17,680 Speaker 1: d P. You have to think about what the retaliation 283 00:17:17,800 --> 00:17:21,600 Speaker 1: and then the re retaliation means and when it accumulates together. 284 00:17:21,760 --> 00:17:23,879 Speaker 1: Our concern is that we think we are kind of 285 00:17:24,400 --> 00:17:28,000 Speaker 1: very close to unit offsetting all of the economic boost 286 00:17:28,040 --> 00:17:30,600 Speaker 1: that was created this year by ciscal policy, both the 287 00:17:30,680 --> 00:17:33,639 Speaker 1: tax cuts and the spending increases that were implemented. All right, 288 00:17:33,680 --> 00:17:35,639 Speaker 1: so let's go down the rabbit hole. Okay, what comes 289 00:17:35,680 --> 00:17:40,359 Speaker 1: next after the largely farm focused tariffs that China has 290 00:17:40,359 --> 00:17:46,960 Speaker 1: already announced. So those tariffs are if if the US 291 00:17:47,040 --> 00:17:49,000 Speaker 1: kind of follows what it's already said it would do 292 00:17:49,760 --> 00:17:53,600 Speaker 1: there in the middle of investigating and UM its news 293 00:17:53,640 --> 00:17:56,840 Speaker 1: is to be believed close to announcing, so perhaps sometime 294 00:17:56,880 --> 00:17:59,200 Speaker 1: in the next few weeks and intention to teariff another 295 00:17:59,240 --> 00:18:03,119 Speaker 1: one hundred billion dollars worth of UM Chinese imports, and 296 00:18:03,240 --> 00:18:05,520 Speaker 1: if China holds true to what it's stated it would do, 297 00:18:05,560 --> 00:18:10,200 Speaker 1: it would respond in kind, which would require another round 298 00:18:10,240 --> 00:18:13,200 Speaker 1: of tariffs on inside. Now, one of the interesting things 299 00:18:13,200 --> 00:18:15,960 Speaker 1: here is that UM China only imports about a hundred 300 00:18:15,960 --> 00:18:18,920 Speaker 1: and thirty billion dollars worth of good so UM how 301 00:18:18,960 --> 00:18:21,720 Speaker 1: it responds is a little bit murky, which is to say, 302 00:18:21,760 --> 00:18:24,280 Speaker 1: perhaps it's gonna have to just further increase its tariffs 303 00:18:24,280 --> 00:18:27,520 Speaker 1: to equate the economic damage, or well have to take 304 00:18:27,560 --> 00:18:31,200 Speaker 1: some other retaliatory actions. But that's kind of the next 305 00:18:31,280 --> 00:18:32,919 Speaker 1: level we think you have to count for there. And 306 00:18:32,920 --> 00:18:37,040 Speaker 1: then in terms of UM Europe, the response on the 307 00:18:37,080 --> 00:18:41,679 Speaker 1: steel aluminum tariffs, the US is flag that UM tariffing 308 00:18:42,080 --> 00:18:44,840 Speaker 1: foreign imports of autos is probably the next step there 309 00:18:44,880 --> 00:18:47,119 Speaker 1: that we have to account for. So those are the 310 00:18:47,160 --> 00:18:49,520 Speaker 1: two things we're watching out for now. Hundred billion dollars 311 00:18:49,520 --> 00:18:52,480 Speaker 1: on tariffs, hundred billion tariffs dre billion dollars with the 312 00:18:52,560 --> 00:18:55,640 Speaker 1: Chinese imports, and then foreign auto tariffs. Do you think 313 00:18:55,760 --> 00:19:00,359 Speaker 1: that the market is taking this seriously, this risk of 314 00:19:00,400 --> 00:19:04,040 Speaker 1: sort of a t for tat escalation. Yeah, I do. 315 00:19:05,080 --> 00:19:07,760 Speaker 1: I think it's very hard to price in exactly how 316 00:19:07,800 --> 00:19:12,480 Speaker 1: far this cycle goes before cooler heads prevail. So I 317 00:19:12,520 --> 00:19:15,199 Speaker 1: think what you've seen in you know, the equity markets, 318 00:19:15,240 --> 00:19:18,760 Speaker 1: for example, is I think it kind of healthy respect 319 00:19:18,800 --> 00:19:21,119 Speaker 1: for the unknown of this dynamic, it kind of sinks 320 00:19:21,160 --> 00:19:24,240 Speaker 1: with the view of our US equity strategy team, which 321 00:19:24,320 --> 00:19:26,879 Speaker 1: is that we're gonna be kind of range bound for 322 00:19:26,880 --> 00:19:29,840 Speaker 1: the balance of the year fifty price target and the 323 00:19:29,920 --> 00:19:32,800 Speaker 1: SMP with a range between twenty and twenty nine because 324 00:19:33,160 --> 00:19:35,399 Speaker 1: you know, ultimately we priced in at the end of 325 00:19:35,480 --> 00:19:38,800 Speaker 1: last year all the sort of benefits of the U. S. 326 00:19:38,840 --> 00:19:42,280 Speaker 1: Public policy agenda, i e. The fiscal impulse that we 327 00:19:42,440 --> 00:19:46,480 Speaker 1: got and you know, pe multiples peaked basically the day 328 00:19:46,520 --> 00:19:51,040 Speaker 1: that Senate the Senate passed UH tax reform, and now 329 00:19:51,040 --> 00:19:53,720 Speaker 1: we're in the middle of frightening in kind of the uh, 330 00:19:53,760 --> 00:19:56,040 Speaker 1: you know, the the less desirable parts of the U S. 331 00:19:56,080 --> 00:19:59,639 Speaker 1: Public policy agenda, and that means that we uh, you know, 332 00:19:59,720 --> 00:20:02,679 Speaker 1: we of a road the benefits that were priced in 333 00:20:02,760 --> 00:20:04,719 Speaker 1: at the end of the last year. So having kind 334 00:20:04,760 --> 00:20:07,280 Speaker 1: of a range bound, choppy and ultimately you know, kind 335 00:20:07,280 --> 00:20:10,400 Speaker 1: of a flattish market for the year makes sense to us. 336 00:20:10,840 --> 00:20:12,720 Speaker 1: We think these things are perhaps less than the price 337 00:20:12,720 --> 00:20:14,360 Speaker 1: if you look at the credit markets, which are still 338 00:20:14,359 --> 00:20:17,560 Speaker 1: hovering around all time tights, and I think the rates 339 00:20:17,600 --> 00:20:19,119 Speaker 1: markets over the course that you're going to show this 340 00:20:19,200 --> 00:20:22,119 Speaker 1: more through even flatter curves and ultimately a lower tenure 341 00:20:22,520 --> 00:20:24,760 Speaker 1: yield by the end of the year. Michael Jesus, thank 342 00:20:24,800 --> 00:20:26,840 Speaker 1: you so much for being with me. Your report was 343 00:20:26,880 --> 00:20:30,840 Speaker 1: fascinating and really illuminating, a really interesting way to look 344 00:20:30,880 --> 00:20:33,359 Speaker 1: at the fact that there isn't really a circuit breaker, 345 00:20:33,480 --> 00:20:37,679 Speaker 1: in your words, to change this cycle of the US 346 00:20:37,800 --> 00:20:41,560 Speaker 1: threatening tariffs, imposing them, and then the European Union in 347 00:20:41,640 --> 00:20:45,520 Speaker 1: China retaliating in kind. Michael Jesus is chief US Public 348 00:20:45,520 --> 00:20:53,080 Speaker 1: Policy and municipal strategist for Morgan Stanley in New York. 349 00:21:02,800 --> 00:21:06,760 Speaker 1: The new era of advertising is really interesting because it's 350 00:21:06,760 --> 00:21:09,879 Speaker 1: hard to know how companies should really be measuring the 351 00:21:09,920 --> 00:21:15,119 Speaker 1: efficacy of their advertisements on platforms such as Twitter and 352 00:21:15,320 --> 00:21:20,040 Speaker 1: Instagram and Facebook. Well. Jamie Gilpin focuses on this in 353 00:21:20,160 --> 00:21:24,800 Speaker 1: part as her role as chief marketing officer at Sprout Social. 354 00:21:25,080 --> 00:21:28,440 Speaker 1: She joins us, Now, Jamie, uh, your company just put 355 00:21:28,480 --> 00:21:32,639 Speaker 1: out a fascinating study taking a look at just how 356 00:21:32,960 --> 00:21:36,200 Speaker 1: companies are using social media, the fact that Facebook is 357 00:21:36,240 --> 00:21:40,320 Speaker 1: still the key the key social media platform that they use, 358 00:21:40,840 --> 00:21:43,719 Speaker 1: and the efficacy of some of these ads. Can we 359 00:21:43,760 --> 00:21:47,960 Speaker 1: just start with Facebook? Why does Facebook have such sticking 360 00:21:48,040 --> 00:21:52,320 Speaker 1: power as the influencer sure, and thanks for having me 361 00:21:52,359 --> 00:21:54,760 Speaker 1: really excited to talk about this. UM. There's so much 362 00:21:54,840 --> 00:21:57,720 Speaker 1: data in this report, UM, and you're right, we really 363 00:21:57,760 --> 00:22:00,119 Speaker 1: did focus on UM or actually the day to have 364 00:22:00,240 --> 00:22:02,720 Speaker 1: really brought to light UM the focus on our o 365 00:22:02,880 --> 00:22:05,440 Speaker 1: I and how marketers UM, all of us are thinking 366 00:22:05,520 --> 00:22:09,399 Speaker 1: differently about the social channels and and ultimately the value 367 00:22:09,440 --> 00:22:13,280 Speaker 1: they provide UM to our overall business strategy, not just marketing. UM. 368 00:22:13,320 --> 00:22:16,240 Speaker 1: And so you asked about Facebook, UM. You know, it's interesting. 369 00:22:16,520 --> 00:22:18,680 Speaker 1: We talked about this a lot internally. You know, Facebook 370 00:22:18,760 --> 00:22:20,960 Speaker 1: was in a lot of ways sort of the first 371 00:22:21,000 --> 00:22:24,560 Speaker 1: social UM, the first social channel or platform or network, 372 00:22:24,920 --> 00:22:27,159 Speaker 1: and so it's still because of that, you know, the 373 00:22:27,240 --> 00:22:29,959 Speaker 1: Kleenex if you will, UM, it's still has you know, 374 00:22:30,040 --> 00:22:34,400 Speaker 1: the the lion share of both usage from a consumer perspective, UM. 375 00:22:34,440 --> 00:22:38,320 Speaker 1: You've seen the report, it's it's upward of consumers use Facebook. UM. 376 00:22:38,400 --> 00:22:42,040 Speaker 1: But also on the marketer side, so marketers using UM 377 00:22:42,040 --> 00:22:45,000 Speaker 1: Facebook as one of their their major platforms. But what 378 00:22:45,080 --> 00:22:47,840 Speaker 1: I asked those thought was really interesting, UM, because the 379 00:22:47,920 --> 00:22:51,120 Speaker 1: data also shows the usage and so while it's still 380 00:22:51,160 --> 00:22:54,640 Speaker 1: one of the most popular networks from both a consumer 381 00:22:54,680 --> 00:22:57,280 Speaker 1: and from a marketer's point, of view. UM. Consumers are 382 00:22:57,280 --> 00:23:00,200 Speaker 1: starting to tell us that we're they're using Facebook, lass 383 00:23:00,320 --> 00:23:02,800 Speaker 1: and they're starting to use Instagram more right, they're starting 384 00:23:02,840 --> 00:23:06,000 Speaker 1: to use UM, YouTube, some of these other platforms more 385 00:23:06,480 --> 00:23:09,720 Speaker 1: UM than than perhaps the Facebook and some of the 386 00:23:10,240 --> 00:23:13,199 Speaker 1: early entrance. So just let's take a step back for 387 00:23:13,240 --> 00:23:17,200 Speaker 1: a second, and when a company decides how to engage 388 00:23:17,320 --> 00:23:21,719 Speaker 1: on social media with potential customers, how do they determine 389 00:23:21,880 --> 00:23:26,320 Speaker 1: whether their messages getting across effectively? Sure, and a lot 390 00:23:26,320 --> 00:23:29,240 Speaker 1: of this comes back to UM sort of the traditional 391 00:23:29,520 --> 00:23:33,520 Speaker 1: use cases of UM of listening or analytics UM. You know, 392 00:23:33,560 --> 00:23:37,040 Speaker 1: they've been around for a while. Actually, most organizations have 393 00:23:37,040 --> 00:23:40,760 Speaker 1: have been invested or investing in in these types of 394 00:23:40,960 --> 00:23:43,879 Speaker 1: UM sort of tools to help them here just actually 395 00:23:43,920 --> 00:23:47,119 Speaker 1: get insight into your exact question, UM, are we the 396 00:23:47,160 --> 00:23:49,280 Speaker 1: messages that we're putting out there, are they resonating with 397 00:23:49,320 --> 00:23:52,199 Speaker 1: our target audience? Because we we also hear a lot 398 00:23:52,240 --> 00:23:55,399 Speaker 1: of from brands UM, you know, just meeting with several 399 00:23:55,480 --> 00:23:58,200 Speaker 1: over the last few weeks, UM around. You know, the 400 00:23:59,160 --> 00:24:02,600 Speaker 1: audience on my social channels are for sure the kid 401 00:24:02,800 --> 00:24:05,400 Speaker 1: maybe of the parents who are making the decisions UM 402 00:24:05,440 --> 00:24:08,119 Speaker 1: to to buy certain products. UM. But how do we 403 00:24:08,160 --> 00:24:11,840 Speaker 1: really understand you know, the power or the influence of 404 00:24:11,880 --> 00:24:15,000 Speaker 1: those of that audience that we're reaching out to UM 405 00:24:15,040 --> 00:24:17,000 Speaker 1: and then more importantly, how do we ensure that we're 406 00:24:17,000 --> 00:24:19,359 Speaker 1: actually getting the audience that we need? And that really 407 00:24:19,359 --> 00:24:21,200 Speaker 1: comes back to again, a lot of these listening in 408 00:24:21,240 --> 00:24:24,719 Speaker 1: analytics tools UM that that that many brands are invested. 409 00:24:24,760 --> 00:24:26,840 Speaker 1: Hold on a second. When you say listening in analytics, 410 00:24:26,680 --> 00:24:30,320 Speaker 1: it's it's things like people clicking on an AD or 411 00:24:30,560 --> 00:24:33,679 Speaker 1: people you know, just going and shopping on that on 412 00:24:33,720 --> 00:24:38,560 Speaker 1: a website after visiting Facebook, which they could probably get 413 00:24:38,600 --> 00:24:40,960 Speaker 1: some insight into based on the cookies. Is that the 414 00:24:41,040 --> 00:24:43,920 Speaker 1: kind of okay exactly, I started to take a step back. 415 00:24:43,960 --> 00:24:46,840 Speaker 1: Sometimes I'm so far into this UM that that I 416 00:24:46,920 --> 00:24:49,400 Speaker 1: realized that that others don't have the sort of the context. 417 00:24:49,400 --> 00:24:51,800 Speaker 1: So so yeah, I think of that exactly like listening 418 00:24:51,880 --> 00:24:53,840 Speaker 1: at a broad scale. But there are tools that can 419 00:24:53,880 --> 00:24:56,480 Speaker 1: aggregate all of those different touchpoints that you just went 420 00:24:56,520 --> 00:24:59,439 Speaker 1: through UM to to give you insight into what's happening 421 00:24:59,440 --> 00:25:02,920 Speaker 1: at a broader So you're saying that you are starting 422 00:25:02,960 --> 00:25:06,160 Speaker 1: to notice that people are spending a little bit less 423 00:25:06,160 --> 00:25:10,280 Speaker 1: time on Facebook and going to YouTube or Twitter, Instagram instead. 424 00:25:10,920 --> 00:25:16,040 Speaker 1: Our companies are marketers responding to that by advertising less 425 00:25:16,119 --> 00:25:19,320 Speaker 1: or putting less of a focus on Facebook than perhaps 426 00:25:19,359 --> 00:25:23,320 Speaker 1: they have uh in the recent past. No, and the 427 00:25:23,359 --> 00:25:26,360 Speaker 1: main reason is just because consumers are saying they're using 428 00:25:26,359 --> 00:25:28,840 Speaker 1: it less. Um. They're still using it quite a bit, 429 00:25:28,880 --> 00:25:30,960 Speaker 1: I mean parts of twelve hours a week, right, but 430 00:25:31,080 --> 00:25:34,119 Speaker 1: consumers are spending on Facebook. So it is still a 431 00:25:35,400 --> 00:25:39,560 Speaker 1: very powerful networking platform for both consumers and and brands 432 00:25:39,600 --> 00:25:42,440 Speaker 1: and quite frankly for that connection between the two. Um. 433 00:25:42,520 --> 00:25:44,359 Speaker 1: But you are starting to see, and this is what 434 00:25:44,400 --> 00:25:47,840 Speaker 1: the data UM shows in the study, UM, that that 435 00:25:47,920 --> 00:25:50,879 Speaker 1: markers are starting to take a more serious look UM 436 00:25:50,920 --> 00:25:54,440 Speaker 1: at Instagram and Twitter in particular. UM. Still trying to 437 00:25:54,480 --> 00:25:58,800 Speaker 1: figure out Pinterest, UM, still trying to figure out YouTube. UM. 438 00:25:58,920 --> 00:26:02,760 Speaker 1: You know some of the definitely Snapchat, Um not quite 439 00:26:03,000 --> 00:26:05,119 Speaker 1: uh you know, to the level of of some of 440 00:26:05,160 --> 00:26:07,840 Speaker 1: the other new entrants. But but again, you know, we're 441 00:26:07,840 --> 00:26:09,520 Speaker 1: dipping our toes and we're trying to figure out how 442 00:26:09,560 --> 00:26:11,720 Speaker 1: we use these networks to make that ultimate connection that 443 00:26:11,760 --> 00:26:14,520 Speaker 1: we're trying to drive. Just real quick here, I'd love 444 00:26:14,520 --> 00:26:17,320 Speaker 1: to get your take on whether social media budgets in 445 00:26:17,359 --> 00:26:21,240 Speaker 1: general have been increasing by marketers and just the scope 446 00:26:21,240 --> 00:26:24,439 Speaker 1: of of just how much more uh, they're putting towards 447 00:26:24,800 --> 00:26:29,320 Speaker 1: social media. Sure, yeah, I found this actually really interesting. Um. 448 00:26:29,400 --> 00:26:31,240 Speaker 1: You know, we talked you know at the very beginning 449 00:26:31,240 --> 00:26:35,760 Speaker 1: of this conversation around r o I return on investment. Yeah, exactly, 450 00:26:35,800 --> 00:26:39,399 Speaker 1: return on investment and really turn honestly return on effort UM, 451 00:26:39,400 --> 00:26:41,840 Speaker 1: because this is more than just UM, it's more than 452 00:26:41,880 --> 00:26:44,640 Speaker 1: just budgets, is also people as well, and so um, 453 00:26:44,760 --> 00:26:49,360 Speaker 1: while marketers are are having a challenge really um applying 454 00:26:49,359 --> 00:26:52,359 Speaker 1: a direct return on investment from their social efforts, they 455 00:26:52,400 --> 00:26:55,600 Speaker 1: are still absolutely making an investment here. But what's interesting 456 00:26:55,640 --> 00:26:59,119 Speaker 1: is they're making it with their budget. So of marketers 457 00:26:59,160 --> 00:27:01,639 Speaker 1: are saying they're going to allocate more budget to social 458 00:27:01,680 --> 00:27:04,920 Speaker 1: marketing and that um that comes by ads, that comes 459 00:27:04,960 --> 00:27:07,399 Speaker 1: by by tools. Right, there's lots that goes into that. 460 00:27:07,440 --> 00:27:10,200 Speaker 1: But what's interesting on that is only said that they're 461 00:27:10,200 --> 00:27:13,480 Speaker 1: going to hire more staff. So while you know, and 462 00:27:13,520 --> 00:27:15,919 Speaker 1: that's where that sort of that lever was, we think 463 00:27:15,960 --> 00:27:19,320 Speaker 1: about marketers, the staff is a longer term investment and 464 00:27:19,400 --> 00:27:21,840 Speaker 1: so UM, while I see, while I know and I 465 00:27:21,920 --> 00:27:24,320 Speaker 1: have confident in this platform and networks as a as 466 00:27:24,359 --> 00:27:28,040 Speaker 1: a huge opportunity to communicate and more importantly, connect with 467 00:27:28,119 --> 00:27:31,040 Speaker 1: my customer and consumer base. UM. I'm willing to put 468 00:27:31,040 --> 00:27:33,400 Speaker 1: more budget there, but I'm still trying to figure out 469 00:27:33,440 --> 00:27:36,040 Speaker 1: the staff side. UM, and so I think there's a 470 00:27:36,160 --> 00:27:39,440 Speaker 1: really interesting nuance there in the data. Jamie Calvin, thank 471 00:27:39,440 --> 00:27:41,879 Speaker 1: you so much for joining me today. Jamie Gilpin is 472 00:27:41,960 --> 00:27:49,480 Speaker 1: chief marketing officer for Sprout Social. Thanks for listening to 473 00:27:49,480 --> 00:27:52,399 Speaker 1: the Bloomberg P and L podcast. You can subscribe and 474 00:27:52,440 --> 00:27:56,440 Speaker 1: listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast 475 00:27:56,440 --> 00:27:59,880 Speaker 1: platform you prefer. I'm Pim Fox. I'm on Twitter at 476 00:28:00,119 --> 00:28:03,480 Speaker 1: Pam Fox. I'm on Twitter at Lisa Abramo wits one. 477 00:28:03,720 --> 00:28:06,439 Speaker 1: Before the podcast, you can always catch us worldwide on 478 00:28:06,440 --> 00:28:07,280 Speaker 1: Bloomberg Radio