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Speaker 2: All right, Jessman and Paul Sweene here in the Bloomberg
Speaker 2: Interactive Broker studio and so much focus today. Paul has
Speaker 2: been on this story about how China is seeking to
Speaker 2: broaden this iPhone band to state firms and looking at
Speaker 2: what China's really trying to do here.
Speaker 3: And this also does.
Speaker 2: Come ahead of next week. We do have that September
Speaker 2: twelfth iPhone fifteen Apple Watch event that is quickly approaching.
Speaker 2: So investors really want to get a sense here as
Speaker 2: far as what this really means for Apple as well
Speaker 2: as companies when they are doing business in a country
Speaker 2: like China. So who better to bring back with us
Speaker 2: than Mark German, chief Technology correspondent at Bloomberg News, joining
Speaker 2: us on zoom from our Los Angeles. Mark I will
Speaker 2: look us through the latest developments here and just kind
Speaker 2: of broadly what this really is going to mean for
Speaker 2: Apple as well as other companies.
Speaker 4: Yeah, thank you both so much for having me. As always,
Speaker 4: this ban has become broader than just a ban of
Speaker 4: iPhones at work of government agencies. This is also related
Speaker 4: to state owned companies. Right in China, there are plenty
Speaker 4: of conglomerates that are operated or owned by the Chinese government,
Speaker 4: So certainly this is pretty broad. Now, I've seen some
Speaker 4: analyst reports indicating that this is very limited. Right, If
Speaker 4: Apple loses five hundred thousand or a million iPhone unit
Speaker 4: sales because of a ban at Chinese entities, it's not
Speaker 4: necessarily a big deal, But that misses the bigger picture.
Speaker 4: The bigger picture is Chinese nationalism. I don't think there's
Speaker 4: going to be an outright ban of iPhone sales in
Speaker 4: China for consumers or anything close to that. But you
Speaker 4: definitely have to consider the idea of consumers in China
Speaker 4: pushing back on the idea of buying iPhones because they
Speaker 4: see that their government is pushing back on iPhones in
Speaker 4: their own entities.
Speaker 5: Mark, what do we know about the quality of the
Speaker 5: Chinese phones in China? I mean it's me Chinese consumers
Speaker 5: are like any other consumers. I mean, they will go
Speaker 5: where they deem value and so I'm trying to get
Speaker 5: a sense of how good are those Chinese phones.
Speaker 4: The Chinese phones are getting better. Whalwei is rolling out
Speaker 4: a new phone. It's called the sixty Pro. It is
Speaker 4: quite impressive. It has a larger battery, a larger display,
Speaker 4: and far higher resolution cameras than the new iPhone fifteen
Speaker 4: Pro Max that's going to be announced next week, so
Speaker 4: certainly that's something to keep an eye out. It also
Speaker 4: has a price that undercuts the latest iPhone, so certainly
Speaker 4: that is something to keep an eye on. It also,
Speaker 4: as we've shown in our exclusive tear down in the
Speaker 4: last week or so for my colleagues in Asia, that
Speaker 4: it has a fairly advanced seven animeter chip using homegrown
Speaker 4: Chinese technology. And that's interesting to watch because right now,
Speaker 4: you know, the US has been banning exports of US
Speaker 4: components to component makers in China. So certainly China is
Speaker 4: showing that despite those bands and those export and import restrictions,
Speaker 4: that they're able to release some key components that really
Speaker 4: power these new devices.
Speaker 2: What do you think could potentially be some surprises next
Speaker 2: week that investors might be hoping to look for at
Speaker 2: the event.
Speaker 4: I'm not anticipating any surprises next week, it'll be pretty straightforward.
Speaker 4: You'll see four new iPhone fifteen models, too low and
Speaker 4: too high end, both in the same six point one
Speaker 4: inch and six point seven in screen sizes. You'll see
Speaker 4: a new titanium design for the iPhone fifteen Promee Promax.
Speaker 4: That's the first redesign in three years. You'll see on
Speaker 4: those higher end phones, a better battery life, a lighter
Speaker 4: frame in the A seventeen chip built on the new
Speaker 4: three and animeter production process, so a little leg up
Speaker 4: on what China's got in their new Wawei devices. The
Speaker 4: Apple Watch upgrades will be very minor. Faster processors, new components,
Speaker 4: new colors, a black version of the Apple Watch Ultra,
Speaker 4: and then on the air pods you'll see a move
Speaker 4: to USBC that new charging standard from Lightning, which is
Speaker 4: also going to be present on all four new iPhone models.
Speaker 3: Ay Mark.
Speaker 2: Apple also is working on a revamped iPad pro for
Speaker 2: next year, and actually would be the first major overhaul
Speaker 2: in about half a decade.
Speaker 3: What do we know so far about that?
Speaker 4: Yeah, the IPD pro that's going to be announced around
Speaker 4: the middle of next year. They're going to be moving
Speaker 4: to oh LED displays on those for the first time.
Speaker 4: OLED is the screen technology that Apple uses across many
Speaker 4: of its iPhones at this point. They started rolling it
Speaker 4: out with the iPhone ten back in twenty seventeen. Quite
Speaker 4: a bit better contrast, better color reproduction. It just looks
Speaker 4: better overall. And so that display technology will be at
Speaker 4: the heart of that iPad pro revamp, along with the
Speaker 4: new Magic keyboard with trackpad that has a metal design.
Speaker 4: It'll make the iPad look more like a MacBook.
Speaker 5: So talk to us about I wonder what Tim Cook
Speaker 5: is saying these days, Mark about China. I know he
Speaker 5: was over in China, you know, a month or so ago,
Speaker 5: and how important China is, not just from their supply
Speaker 5: chain and also as an end market. What are the
Speaker 5: folks of Koopertinos saying about kind of the I don't
Speaker 5: know the intermediate term relationship.
Speaker 6: With end or risk which China.
Speaker 4: I mean, they're not saying much and there's really nothing
Speaker 4: they can do. You know, all of their new iPhone
Speaker 4: fifteen pros are going to be built in China and
Speaker 4: they have to sell one hundreds of millions of those
Speaker 4: devices over the next couple of years. Twenty percent of
Speaker 4: their sales come from China, right, So there's really nothing
Speaker 4: that could be said from their standpoint. I'm sure they
Speaker 4: are worried internally, but from an outside perspective, they'll definitely
Speaker 4: show excitement about their future in the region.
Speaker 2: Something else I'm curious about, as would we do see
Speaker 2: US China trade tensions rising up again, How does that
Speaker 2: affect new production sites that are sort of changing the
Speaker 2: way that Apple's devices are made.
Speaker 4: Yeah, I don't think at this point there's any going back.
Speaker 4: I think Apple is expanding its supply chain outside of
Speaker 4: China to places like Thailand, Malaysia, Vietnam, and India foremost,
Speaker 4: so I certainly think that that's already a given. It's
Speaker 4: already a done deal. So I'm not really sure there's
Speaker 4: anything more that could be done on the tariff site
Speaker 4: to accelerate Apples push outside of China. That's already full
Speaker 4: blown and going full step ahead.
Speaker 5: Hey, Mark, when don't we have phone particularly with the phones.
Speaker 5: Is there any opportunity going forward or expectation that there
Speaker 5: will be any kind of leap frog type new versions
Speaker 5: coming on or is it just incremental here, incremental there,
Speaker 5: and then people are just going to get into some
Speaker 5: type of renewal cycle every three, four or five years.
Speaker 5: Is that kind of how they think about it.
Speaker 4: I'm not sure how they think about it, but I
Speaker 4: can tell you the way I think about it is
Speaker 4: that it's going to be very incremental over the next
Speaker 4: you know, three to four years or so, it's going
Speaker 4: to continue to be. The new devices this year are incremental.
Speaker 4: And while I say they're incremental, they're still going to
Speaker 4: be the most significant overhaul so the devices we've seen
Speaker 4: in three four years. So certainly you know you'll get
Speaker 4: your opinion from You can ask one hundred people their
Speaker 4: opinion and you might get a hundred different opinions.
Speaker 6: Well, I'm going with yours. I also talk to anairog ronnie.
Speaker 5: He knows a lot about the phone and he tells
Speaker 5: me when I need to upgrade.
Speaker 2: When it comes to different countries like India, I know
Speaker 2: that has definitely a hot place that companies have been
Speaker 2: going into.
Speaker 3: What's kind of the story there when it comes to Apple.
Speaker 4: Well, the strategy for Apple in India is to replicate
Speaker 4: the success that they've had in China over the past
Speaker 4: fifteen years. That is the creation of the country as
Speaker 4: both a production hub but also a key sales hub.
Speaker 4: Apple sees China as a market that it only has
Speaker 4: one to three percent penetration in, so there's a long
Speaker 4: way to go. Very few people comparatively have iPhones in India,
Speaker 4: and so Apple sees it as a completely untapped market,
Speaker 4: just like they saw China fifteen years ago. And the
Speaker 4: success that Apple has had in China over the last
Speaker 4: decade plus has been unprecedented, and they want to replicate
Speaker 4: that in India and they've started to lay the groundwork
Speaker 4: for that with two retale stores. They're working on three more.
Speaker 4: I've written definitely think they're going to start doing more
Speaker 4: for India on the product side as well.
Speaker 5: But I've also heard, as it relates to India maybe
Speaker 5: just emerging markets in general, that some people argue they
Speaker 5: just need a lower price phone. They can't go into
Speaker 5: some of these merging markets with their current lineup. It's
Speaker 5: just too expensive. What do you think about that?
Speaker 4: I don't necessarily think that Apple is going to do
Speaker 4: the lower cost phone in China's in those emerging markets,
Speaker 4: it's very hard for them to put the skews on
Speaker 4: a geography basis, So I think they're going to just
Speaker 4: push their lower price devices harder in those regions, like
Speaker 4: the iPhone se and some of the older models of
Speaker 4: the iPhone, like the iPhone twelve and thirteen, the base ones.
Speaker 4: I also think that they can lower prices once they
Speaker 4: get some tax relief based on production locally. Obviously, India
Speaker 4: lowers import taxes and such if you produce locally, which
Speaker 4: is one of the driving forces behind Apples work there.
Speaker 4: So I certainly think they're going to push pricing plans
Speaker 4: and installment packages rather than cut prices in India.
Speaker 2: Also, Vietnam has emerged as a popular.
Speaker 3: New hub for Apple. What do we need to know
Speaker 3: about that?
Speaker 4: Yeah, India or Vietnam. In addition to India, Malaysia and Thailand,
Speaker 4: that's one of the other countries where Apple's pushing. They
Speaker 4: opened up an online store there last year, which is
Speaker 4: one of the early indicators of when Apples trying to
Speaker 4: plant the flag in a particular new market. They have
Speaker 4: some retail presence, they're on the third parties, I'd imagine
Speaker 4: they would expand with more first party retail stores there eventually.
Speaker 4: I also anticipate Malaysia to be similar in that they're
Speaker 4: going to grow a retail footprint there too, and you're
Speaker 4: seeing some macro production in Vietnam, but primarily Apple watching AirPods.
Speaker 5: Hey, Mark, thanks so much for giving us your time.
Speaker 5: Appreciate getting the update of Apple certainly in the news today.
Speaker 5: Plus they're going to have their new product launches coming up,
Speaker 5: so we'll be in touch with you. Mark Herman, he's
Speaker 5: the chief technology correspondent for Bloomberg News. He's just the
Speaker 5: ace on it. He really is.
Speaker 6: He knew the news there.
Speaker 5: He joining us on Zoom from the Los Angeles bureau
Speaker 5: speaking in nice office that lost LA is awesome.
Speaker 6: Oh yeah.
Speaker 5: Like when I first went to LA, I was like
Speaker 5: boy for Bloomberg, which every office is overwhelmingly nice.
Speaker 6: I was like, eh, this is I was.
Speaker 5: Coming in And as soon as and I went back,
Speaker 5: like a year later, they changed offices. Spectacular, top of everything,
Speaker 5: and you know that's all I did was sayah, and
Speaker 5: they make the up grade.
Speaker 3: I have to know what it's like compete to this office.
Speaker 6: Awesome. They just and they've got a great view.
Speaker 5: They're right in Century City.
Speaker 6: Great office space there, so great job. That's where mister
Speaker 6: German is. So are you gonna upgrade your phone?
Speaker 2: You know what the battery is not quite good, So
Speaker 2: I feel like I might have to And.
Speaker 5: A lot of folks say, you know, maybe that's what
Speaker 5: Apple does. They kind of give you a battery life
Speaker 5: and then when the battery starts coming out right.
Speaker 6: In time for an upgrade, and there you go. So
Speaker 6: we'll see how that plays.
Speaker 5: Like S and P five hundred off three tents and
Speaker 5: one percent, the Dow up just fractionally, nastak off nine
Speaker 5: tenths of one percent, yields they are kind of pulling
Speaker 5: in a little bit tenure Treasury three zero point two
Speaker 5: six percent, So we keep an eye on that.
Speaker 6: We're gonna work coming up this.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
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Speaker 6: Let's talk companies now look software company.
Speaker 5: Brian Robbins. He's a chief financial officer for get Lab.
Speaker 5: He joined us on Zoom from Sunset South, Carolina. Are
Speaker 5: you kidding me?
Speaker 6: Sunset? I mean, how good is that?
Speaker 5: I've been to Sunset South?
Speaker 6: Now it is nice.
Speaker 5: I need to get in the low country to scam.
Speaker 5: I have to figure out what's behind this. Hey, Brian,
Speaker 5: thanks so much for joining us here. Talk to us
Speaker 5: about get lab. Just give us kind of the thirty
Speaker 5: second elevator pitch what you guys do, kind of you
Speaker 5: where you fit into the tech space.
Speaker 7: Absolutely thanks for having me on the show today. The
Speaker 7: best way to describe get lab for a non technical
Speaker 7: person is comparing it to the iPhone. And so about
Speaker 7: ten years ago, I used to travel about every week
Speaker 7: and I would pack a duffel bag of electronics. I
Speaker 7: would take my walk hands, I could go jogging in
Speaker 7: the park. I would take a camera so I could
Speaker 7: take pictures of all the cool sites. I'd have my
Speaker 7: Garmin GPS because you know, the ride share and companies
Speaker 7: weren't around to basically get somewhere if Matt Quest wasn't right,
Speaker 7: have my BlackBerry and have all the charges, and I
Speaker 7: have to take a duffel bag of basically all the
Speaker 7: electronics to go on a business trip. And then comes
Speaker 7: to iPhone and all the applications got integrated into a
Speaker 7: single platform and the user experience just went off the charts.
Speaker 7: And so get lab is an iPhone for software developers.
Speaker 7: We allow software developers, operations, and security professionals to create
Speaker 7: software faster, better, cheaper, and more secure. It doesn't matter
Speaker 7: what industry you're in or what geography, everybody uses the
Speaker 7: same platform.
Speaker 2: You just had earnings released in recent days and the
Speaker 2: stock if you look at this Paul Tickersingle GTLB up
Speaker 2: almost ten percent this month after the company did report
Speaker 2: second quarter results that did beat expectations and raise their.
Speaker 3: Full year forecast.
Speaker 2: What are you seeing when it comes to customer buying
Speaker 2: patterns and what do you think that really tells us
Speaker 2: about the economy.
Speaker 7: Yeah, you know, great question. Every company has to become
Speaker 7: a software company. Consumers are demanding data. We're understanding where
Speaker 7: their package is at. You know, like Amazon, they'll send
Speaker 7: you a text now if the drivers you know, eight
Speaker 7: stops away, and where your package is at. So everybody's
Speaker 7: creating software, they're putting them in the cloud. They're doing
Speaker 7: it for revenue generation and also to save money. And
Speaker 7: so get lab basically eliminates point solutions and allows people
Speaker 7: to do everything on one platform with a single application.
Speaker 7: And so even with the tougher economy, we're seeing a
Speaker 7: lot of companies come to get lad to save money.
Speaker 7: If you use our ultimate product, which is our high
Speaker 7: end product, it's ninety nine dollars per month per user,
Speaker 7: and it has a six month payback and over three
Speaker 7: years it's over a four hundred percent return on your investment.
Speaker 6: That sense pretty compelling for a lot of buyers. I
Speaker 6: would think.
Speaker 5: Talk to us about Google Cloud, how you guys partner
Speaker 5: with them?
Speaker 7: Yeah, absolutely, we have a partnership with Google Cloud. We're
Speaker 7: currently using their large language models to train some of
Speaker 7: our AI products that we're working on. You know, get
Speaker 7: Lab's core feature is to make the developers, operations and
Speaker 7: security professionals faster and better at creating software. And one
Speaker 7: of the ways that we're doing that is at an
Speaker 7: AI to our product. And so we currently have ten
Speaker 7: products under development. We have one that's generally available today
Speaker 7: called Suggested Reviewers, and we're working on one called code Suggestions.
Speaker 7: Well that will actually help populate code based on what
Speaker 7: you ask, you know, ask the software to do, and
Speaker 7: so we're using Google's large language models to actually train
Speaker 7: the software to do that. We have a different approach
Speaker 7: than other people where we're doing it with a privacy first,
Speaker 7: and so we want to protect the IP of customers
Speaker 7: that use it, and we don't want to allow that
Speaker 7: IP to be training other companies software.
Speaker 2: Whenever I hear AI, obviously we know, Paul how much
Speaker 2: it is all the rage this year from so many
Speaker 2: different industries, but I'm curious as far as when it
Speaker 2: comes to developer demand what that really means right now,
Speaker 2: when it comes to some of those AI tools.
Speaker 7: Yeah, you know, AI is important. It's another tool to
Speaker 7: allow developers become more efficient. But you know, this is
Speaker 7: a first time in my career where the media has
Speaker 7: actually talked about something way before the technology really being
Speaker 7: generally available. And so in the software development process, we
Speaker 7: just released a devop support that basically talks about in
Speaker 7: the process of making software, only about twenty five percent
Speaker 7: of it is actually done on coding, and so some
Speaker 7: of the AI tools will make coding more more efficient
Speaker 7: and more quicker, but you know, some of the other
Speaker 7: tools out in the market, this quickness and suggestion of
Speaker 7: code has actually created more vulnerabilities. And so our product's
Speaker 7: not currently generally available. It's in private beta. We hope
Speaker 7: to have it generally available later this year, and we're
Speaker 7: working on making sure that the code quality that's being
Speaker 7: recommended is of high quality and has very limited vulnerabilities.
Speaker 5: Hey, Brian, just about thirty seconds. How do you guys
Speaker 5: view cybersecurity? How is that engendered into your software?
Speaker 7: Yeah? Absolutely. Security is top of mind for every company,
Speaker 7: right and the security market continues to grow because you
Speaker 7: have the builders, the buyers, and the hackers, and the
Speaker 7: hackers are always getting better at trying to create different
Speaker 7: mouse traps to breach into the companies. And so one
Speaker 7: of the advantages of our platform is you actually have
Speaker 7: security integrated into the software development process. So the old
Speaker 7: way of actually creating software is the developers would actually
Speaker 7: code and develop the software. They then throw it over
Speaker 7: the wall to the ops and the security teams and
Speaker 7: they would come back and say, hey, you have the
Speaker 7: security vulnerabilities, please go rewrite these lines of codes. Our
Speaker 7: security function is actually built into the software, so as
Speaker 7: you're right in the code, the security is actually telling
Speaker 7: you you have a vulnerability, you need to fix us,
Speaker 7: and we'll fix it in all your code where that
Speaker 7: vulnerability is at.
Speaker 5: Fascinating stuff, coders, That's what we should have done back
Speaker 5: in the day coding.
Speaker 6: Brian Roberts, chief financial officer at get Lab.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
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Speaker 1: Just say Alexa Play Bloomberg eleven thirty.
Speaker 5: All right, let's switch to a big, big topic that's
Speaker 5: going to be even more news as we head towards
Speaker 5: the twenty twenty four elections.
Speaker 6: It's always a.
Speaker 5: Big political issue, and that is gun violence. Cassandra Crafossi
Speaker 5: joins us. He's a deputy director of the Center for
Speaker 5: Gun Violence Solutions, located at the Johns Hopkins Bloomberg School
Speaker 5: of Public Health. She joins us on zoom from Charms City, Baltimore, Maryland.
Speaker 5: The Bloomberg School of Public Health is supported by Michael R. Bloomberg,
Speaker 5: founder of Bloomberg LP, and Bloomberg philanthropiece Cassandra. I guess
Speaker 5: the way I think about the gun violence issue in
Speaker 5: the United States is a tweet that I just took
Speaker 5: a screenshot of and I keep and it reads something
Speaker 5: like this. In retrospect Sandy Hook marked the end of
Speaker 5: the gun control debate in the US once America decided
Speaker 5: killing children was bearable.
Speaker 6: It was over.
Speaker 5: That's kind of how I feel about it. That's sad.
Speaker 5: Hopefully there are a lot of people who are still
Speaker 5: passionate about trying to change things out there. Can you
Speaker 5: tell us where are we with the gun violence situation
Speaker 5: in this country right now?
Speaker 6: It just seems as bad as it's ever been.
Speaker 8: Unfortunately, we have seen increases in gun violence, particularly since
Speaker 8: the start of the pandemic.
Speaker 9: There is some promise though.
Speaker 8: Our data for twenty twenty two indicates that overall gun
Speaker 8: death rates have declined slightly since twenty twenty one, but
Speaker 8: we're still substantially higher than we were in twenty nineteen.
Speaker 8: In twenty twenty two, we saw over forty eight thousand
Speaker 8: people die from gun related deaths. That includes homicide and suicide,
Speaker 8: which is the leading cause of gun death in the US.
Speaker 5: Cassandra, is there any reason to have any confidence in
Speaker 5: common sense gun legislation being passed?
Speaker 9: Certainly, we have to be optimistic. At our center. There's
Speaker 9: a large group of us.
Speaker 8: Doing this really important work, which would be even harder
Speaker 8: if we weren't optimistic that we could see change.
Speaker 9: We have an amazing team.
Speaker 8: Of researchers and policy advocates who work at the state
Speaker 8: and federal level. In June of last year, following the
Speaker 8: Buffalo and Uvaldi shootings, we did see the bipartisan Safer
Speaker 8: Communities Act pass at the federal level provided funding for
Speaker 8: some important policies like extreme risk protection orders, but we
Speaker 8: also see a lot of progress at the state level.
Speaker 8: Just this year, we saw Michigan and Minnesota both pass
Speaker 8: extreme Risk Protection Order laws. These temporarily separate someone from
Speaker 8: their firearms during a time of crisis, So there is
Speaker 8: opportunity we have evidence based solutions that experience broad public support.
Speaker 8: We just really need to be pushing for these policies
Speaker 8: at the state and federal level.
Speaker 2: In Cassandra Japaul's point, Sandy Hook, that tragedy happened over
Speaker 2: a decade ago. What has prevented more major policy from
Speaker 2: actually happening in Washington.
Speaker 8: The challenge at the federal level is, I think there's
Speaker 8: a bit of complacency, that people feel like gun owners
Speaker 8: are single issue voters on guns, and that people who
Speaker 8: don't vote to advance these policies are going to continue
Speaker 8: to get re elected. But at the state level, we
Speaker 8: have seen that's actually not the case. Recently in Virginia
Speaker 8: there was a high profile shooting. They called a special
Speaker 8: session and nothing happen, and their legislature turned. They have
Speaker 8: many more Democrats and are putting some of these policies
Speaker 8: in place. We're watching closely to see what will happen
Speaker 8: in Tennessee following this very recent failed special session. I
Speaker 8: think the biggest challenge has been we see broad support
Speaker 8: for policies, but people haven't always been activated to make change,
Speaker 8: contacting their legislators, showing up to testify, and hopefully as
Speaker 8: people learn more about many of the evidence based solutions
Speaker 8: that are available, people will be contacting their elected officials
Speaker 8: and we will see change.
Speaker 5: What are some of the changes that you would like
Speaker 5: to see be implemented, whether it's at the federal or
Speaker 5: state level, that you think are reasonable to work towards
Speaker 5: In terms.
Speaker 6: Of LIKELI had to get it done.
Speaker 8: So we really advance five policy solutions. There are lots
Speaker 8: of important areas that need to be attended to, but
Speaker 8: we focus on these areas that have we think the
Speaker 8: strongest evidence base. The first is requiring people to get
Speaker 8: a license before buying a gun. This is associated with
Speaker 8: fewer guns diverted for use in crime, lower rates of
Speaker 8: mass shootings and homicide, lower rates of suicide, and also
Speaker 8: lower rates of shootings by police. The second policy is
Speaker 8: about regulating how people carry guns in public spaces. What
Speaker 8: kinds of objective criteria can we set out to minimize
Speaker 8: the harms when people are having guns in public spaces.
Speaker 8: The third policy is we generally refer to as firearm removal.
Speaker 8: This includes domestic violence and extreme risk protection order laws
Speaker 8: those that separate from someone who is at risk of
Speaker 8: harming themselves or others they're firearms and keep them from
Speaker 8: buying more for the duration of the order.
Speaker 9: The fourth policy is.
Speaker 8: About funding and effectively evaluating community based violence prevention programs,
Speaker 8: identifying those who are at elevated risk of violence involvement,
Speaker 8: and getting them supportive services. The final policy is about
Speaker 8: safe and secure gun storage, so having effective policies in
Speaker 8: place that hold people liable when they behave negligently with
Speaker 8: their firearms. But it's also about promoting responsible gun ownership.
Speaker 8: What are the kinds of behaviors we think come along
Speaker 8: with the rights of having a gun in the home,
Speaker 8: and that includes safely storing your guns to ensure that
Speaker 8: kids and teens can't gain.
Speaker 9: Access to them.
Speaker 2: And to your point, we only have about thirty seconds left.
Speaker 2: But gun doests among children are declining, but your data
Speaker 2: do show that guns are still the leading cause of
Speaker 2: death among children and teens. And is it due to
Speaker 2: what you were just talking about responsponsible gun ownership?
Speaker 8: Certainly, Unsecured firearms are an important source of injury for
Speaker 8: children and teens, including kids getting access to guns and
Speaker 8: taking them into schools. Guns are the leading cause of
Speaker 8: death for kids and teens. And while they have been
Speaker 8: on the decline, it's up almost over the last decade,
Speaker 8: So we really need to be promoting safe and secure
Speaker 8: gun storage.
Speaker 5: All right, Cassandra, thank you very much for your time.
Speaker 5: Really appreciate getting your thoughts. Casenter Crafossi, Deputy director of
Speaker 5: the Center for Gun Violence Solutions to JOHNS. Compkins Bloomberg
Speaker 5: School of Public Health, and of course the Bloomberg School
Speaker 5: of Public Health is supported by Michael R. Bloomberg, the
Speaker 5: founder of Bloomberg LP, Bloomberg Philanthropies and this little radio
Speaker 5: UH and TV operation here, So you appreciate getting time
Speaker 5: from Ms.
Speaker 7: Grafossi. Umbromcome a journal.
Speaker 5: How about you let me drive.
Speaker 6: Oh no, no, no, no, he's gone drive honey, please, I'll
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Speaker 5: It's a good question.
Speaker 1: This is the drive to the Globe.
Speaker 7: Dot com for me effect well ber jot it on.
Speaker 2: On Bloomberg Radio Jessamin and Paul Sweeney here in the
Speaker 2: Bloomberg Interactive Broker Studio in for Tim Senovic and Carol
Speaker 2: Masser today who have the day off and taking a
Speaker 2: look more broadly stocks coming off session loads. We have
Speaker 2: a little under forty minutes before the closing bell, the
Speaker 2: S and P five hundred, trimming some of those losses
Speaker 2: amid some gains here in defensive groups like utilities and healthcare,
Speaker 2: and traders also keeping a close eye on some of
Speaker 2: this latest economic data, Paul, when it comes to some
Speaker 2: of these solid jobbless claims, basically.
Speaker 3: Reinforcing the case that maybe the Fed to keep.
Speaker 2: Rates elevated at that September twentieth decision. But who better
Speaker 2: to walk us through some of this latest when it
Speaker 2: comes to the markets than Jake Jolly, head of investment
Speaker 2: analysis at B and Y Mellon Investment Management, here in
Speaker 2: the Bloomberg Interactive Broker Studio. Thanks so much for joining
Speaker 2: Paul and myself this afternoon, walk us through, starting off
Speaker 2: just with your take on today's market action and what
Speaker 2: you think is happening underneath the surface here.
Speaker 10: Yeah, I mean the way well, first off, thanks for
Speaker 10: having me. You know, the way I would sort of
Speaker 10: characterize what we've been seeing right is, let's know, where
Speaker 10: did we come from? Right through the summer, it was
Speaker 10: a pretty strong market, We had positive economics prizes, growth
Speaker 10: has been very resilient, disinflationary story has remained intact. Things
Speaker 10: probably got a little bit stretched towards the end of July.
Speaker 10: We've had, you know, the pullback in August. Sentiment I
Speaker 10: think has normalized a bit at the same time that
Speaker 10: we've obviously had much higher yields today rolling into Steptember.
Speaker 10: You know, we know that seasonality is going to be
Speaker 10: working against us, right, but I think you know, from
Speaker 10: our perspective, why we're maybe a little more cautious kind
Speaker 10: of through the end of the year is really around
Speaker 10: the fact that you know, what's priced in, and our
Speaker 10: view is that, you know, consensus has moved pretty aggressively
Speaker 10: towards a soft landing narrative, right, So what.
Speaker 6: Does that mean?
Speaker 10: It means that data incoming needs to basically reinforce that
Speaker 10: soft landing, and if it misses, you know, you could
Speaker 10: definitely see a repricing lower. So I think that, you know,
Speaker 10: obviously not today, there's some idiosyncratics things going on. But
Speaker 10: to me, the price action that we saw yesterday on
Speaker 10: the backside of the services prices paid in IM really
Speaker 10: suggests that this is a market that wants to kind
Speaker 10: of question that disinflation narrative out there.
Speaker 6: Absolutely. I mean, I don't know.
Speaker 5: I've been in the I took recession off the table,
Speaker 5: I would say three or four months ago, so I
Speaker 5: kind of feel like I was a little only released sight.
Speaker 5: But maybe I'm rongd Matt doesn't buy it. Matt Melow
Speaker 5: does not buy my call there, since I took all
Speaker 5: of I think two economics classes in my NBA career.
Speaker 5: So so Jake, So, how are you guys positioned at
Speaker 5: B and Y Melon, I mean, do we do you
Speaker 5: take risk on here, whether it's in the equity markets
Speaker 5: or fixed income or have you pulled back a little bit?
Speaker 10: Yeah, I mean it's a very difficult tactical call. You know,
Speaker 10: you were right to make that call to take the
Speaker 10: recession off the table for this year.
Speaker 6: Unfortunately.
Speaker 10: Our take on it is that when we look at
Speaker 10: the leading economic indicators, when we assess kind of where
Speaker 10: we think inflation is going to head, we think that
Speaker 10: there's still a material.
Speaker 6: Risk of a recession next year.
Speaker 10: So that's why kind of we don't think it's really
Speaker 10: the right time to be aggressively re risking right now.
Speaker 10: We really continue to see much better opportunities in terms
Speaker 10: of a risk reward trade off within high quality fixed income,
Speaker 10: so that that hasn't changed. We have been emphasizing to
Speaker 10: folks that you know, we are nearing the end of
Speaker 10: this this hiking cycle, and historically that's really when you
Speaker 10: want to start extending duration. And then on the equity side,
Speaker 10: equityside of the story, it's really about kind of where
Speaker 10: can you build you know, resilience into your portfolio. Right
Speaker 10: It's not about you know, sitting out the rally, because
Speaker 10: certainly there's enough uncertainty that you could, you know, definitely
Speaker 10: have another leg higher, but I think it's going to
Speaker 10: you know, really rely on that disinflationary story being reinforced
Speaker 10: by the incoming data, and we see that as being
Speaker 10: you know, the risk in this fall.
Speaker 2: One thing I'm curious about is when we look at
Speaker 2: the ten year treasury yield that's trading around four twenty
Speaker 2: six right now.
Speaker 3: A peaked out around a four.
Speaker 2: Thirty three last month. But when you think about where
Speaker 2: it its high last autumn versus where the S and
Speaker 2: P five hundred was trading at at that point that
Speaker 2: was thirty five hundred. You look now the S and
Speaker 2: P five hundreds up almost a thousand points since then.
Speaker 2: What's the difference in the bond market and why haven't
Speaker 2: we seen some same pressure and longer duration stocks like
Speaker 2: we would have seen a year ago.
Speaker 10: That's a great question, and there's no simple answer for that.
Speaker 10: That's why you have this job because and I think
Speaker 10: you know it deserves scrutiny. You know, that's the real answer,
Speaker 10: because last year was all about, you know, this aggressive
Speaker 10: hiking cycle, the de rating off of you know, elevated multiples.
Speaker 10: At the start of twenty twenty two, right I think
Speaker 10: the SMP was trading at about twenty three times at
Speaker 10: the start at twenty and twenty two. We had a
Speaker 10: trough last year at about sixteen times. Now we're back
Speaker 10: at nineteen twenty times. You know, is that a fair valuation.
Speaker 10: It's not extreme, I would say, but I would also
Speaker 10: say that it is elevated relative to you know, what
Speaker 10: we expect going forward, right, and that is that the
Speaker 10: recession risk is is still quite high. And by the way,
Speaker 10: if you kind of look, you know, underneath the hood,
Speaker 10: the you know, tech multiples are pretty much back to
Speaker 10: that twenty twenty two right, So it's actually the other
Speaker 10: sectors that have gotten a bit cheaper relative to the
Speaker 10: start twenty twenty two, but tech is looking kind of
Speaker 10: just where it started. So and that decoupling is kind
Speaker 10: of what you're referring to, the fact that we've had
Speaker 10: rates move higher, but long duration is kind of held
Speaker 10: in there.
Speaker 2: You know.
Speaker 10: Part of that, of course is the AI story, right,
Speaker 10: I mean, you're you're factoring in much better earnings growth expectations,
Speaker 10: So that's I think offsetting it a bit. But at
Speaker 10: the same time, I think it does speak to you know,
Speaker 10: there's still a lot of risk out there because we
Speaker 10: are in the middle of this tightening cycle. We think
Speaker 10: that there's still our risk to the cumulative tightening, and
Speaker 10: that means that there's risk to those multiples still well.
Speaker 5: So that's on the multiple side how about on the earnings.
Speaker 5: I you know, the second quarter earnings were a little
Speaker 5: bit better than expected. But if you've got a recession
Speaker 5: still kind of fifty to fifty out there, do you
Speaker 5: think there's still earnings risk out there that the market
Speaker 5: needs to deal with?
Speaker 10: And I think it's actually pretty similar to kind of
Speaker 10: what I was referring to in terms of the you know,
Speaker 10: the growth, economic growth, and this dissiflation story is being
Speaker 10: pretty optimistic. The same is actually kind of true on
Speaker 10: the earning side as well. Right, I would describe earnings
Speaker 10: results so far this year is basically being better than feared. Right,
Speaker 10: We mark down expectations quite a bit from kind of
Speaker 10: mid last year, and so far this year earnings have
Speaker 10: again been better than feared. So it hasn't derailed the rally.
Speaker 10: It hasn't sort of caused this knee jerk reaction to say, oh,
Speaker 10: you know, we're the earnings growth needs it to really
Speaker 10: come down. But now if you look at where consensus is,
Speaker 10: you're basically seeing that, Okay, two Q was the trough,
Speaker 10: and now we're going to have sequentially better and better
Speaker 10: earnings growth going forward and then into twenty twenty four
Speaker 10: for the s and P five hundred in aggregate ten
Speaker 10: percent earnings growth. Now that's you know, not kind of extreme,
Speaker 10: but it means you have a year where you don't
Speaker 10: have a recession, you have a solid recovery. And I
Speaker 10: think think that for this rally to continue, you know,
Speaker 10: the follow through has to be there. And our view
Speaker 10: is that companies are going to continue to face margin pressure,
Speaker 10: the labor costs.
Speaker 6: Side of the story.
Speaker 10: I don't think that's completely in the past now, so
Speaker 10: we are, you know, looking hard at that and think
Speaker 10: that that's where you could see a bit of risk.
Speaker 2: What's the top question that you hear from your clients.
Speaker 10: Probably when are you going to stop talking about recessions?
Speaker 10: I mean, you know, the thing is when you look
Speaker 10: at the leading indicators, right, I think the conference boards
Speaker 10: leading economic interacy has made I feel.
Speaker 2: Like investors also like to scrutinize that and say it's
Speaker 2: a lagging indicator.
Speaker 10: Right, Well, it is all known information right when it
Speaker 10: comes out, we already know everything that's in there. But
Speaker 10: the bottom line is that there's still information there. And
Speaker 10: I don't think we should dismiss it. Dismiss it just
Speaker 10: because we're facing fatigue, just because we've been talking about
Speaker 10: it so long. The reality is that you know, we
Speaker 10: have a bear market last year. We've now exited that
Speaker 10: bear market, and all of that happened without a recession. Historically,
Speaker 10: bear markets are associated with recessions, meaning that we are
Speaker 10: recovering out of recession. That is not the case. Now
Speaker 10: we're still facing down a risk of recession and to
Speaker 10: us that that really deserves caution, right and it should
Speaker 10: influence how you are trying to position your portfolio.
Speaker 2: Also, that ECFC function that we like to look at
Speaker 2: in the terminals, so that's where you can go. You
Speaker 2: can look at how economists are projecting kind of an
Speaker 2: aggregate in the terminal. You can look at yearly estimates
Speaker 2: as well as quarterly. But when you look at a
Speaker 2: quarterly basis, I mean, it's continued to be pushed out
Speaker 2: to where there's not a contraction anymore. It just looks
Speaker 2: like there's going to be flat growth in the fourth quarter,
Speaker 2: that it picks up again going into next year. But
Speaker 2: whenever people are talking about the consumer and the issues there,
Speaker 2: I mean, what really has to change things? Because it
Speaker 2: seems like whenever we're talking to different strategies, especially airlines
Speaker 2: and things like that a lot of people are still
Speaker 2: traveling in Europe, not as much domestically. But what really
Speaker 2: needs to change here to where we see see things
Speaker 2: actually shift since that is such a huge.
Speaker 3: Component when we talk about GDP growth, I mean.
Speaker 6: It's the labor market, right.
Speaker 10: The big conundrum through this cycle has been how consumer
Speaker 10: surveys have remained very pessimistic. They have not recovered since COVID,
Speaker 10: at the same time that the consumer buy and large
Speaker 10: has been much more resilient than people expected, right. And
Speaker 10: people point to the excess savings, they point to the
Speaker 10: moratoria among on student loans, you can talk about you know, yolo,
Speaker 10: all of these things that that sort of could be
Speaker 10: underpinning this, the underpinning the consumer. But the reality is
Speaker 10: that I think the simplest answer is probably the right one,
Speaker 10: which is to say that most people still have jobs.
Speaker 10: People are confident that they've you know, if they aren't
Speaker 10: getting a increase in their wages this year, they probably
Speaker 10: got one recently, so they're probably still, you know, feeling
Speaker 10: relatively optimistic about that. And ultimately, you know, the recessions.
Speaker 10: If you want to know how recession starts, you look
Speaker 10: at the jump and jobless claims and you just haven't
Speaker 10: seen that. He's seen a bit of weakness at the edges,
Speaker 10: but buy and.
Speaker 6: Large still holding together.
Speaker 10: But unfortunately that doesn't tell us too much about where
Speaker 10: we're all right.
Speaker 7: Yeah, the job markets has.
Speaker 5: Been an amazing that the market has been just amazing.
Speaker 6: Jake, thanks for work for joining us, Jake Jolly.
Speaker 5: He's head of investment analysis at b and Y Mellon
Speaker 5: Investment Management.
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