1
00:00:02,520 --> 00:00:13,760
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

2
00:00:13,840 --> 00:00:17,920
Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

3
00:00:18,200 --> 00:00:21,960
Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

4
00:00:22,320 --> 00:00:25,680
Speaker 1: Listen on demand wherever you get your podcasts, or watch

5
00:00:25,760 --> 00:00:26,880
Speaker 1: us live on YouTube.

6
00:00:26,920 --> 00:00:30,639
Speaker 2: Area Pollock, chief e commerce at zip Recruiter, joins us

7
00:00:30,760 --> 00:00:34,199
Speaker 2: Julia talk to us about how you're looking at the

8
00:00:34,280 --> 00:00:36,839
Speaker 2: labor market here in the US. Has it changed over

9
00:00:36,840 --> 00:00:38,600
Speaker 2: the last several months.

10
00:00:39,320 --> 00:00:41,880
Speaker 3: Yes, but it hasn't changed along the margin that people

11
00:00:41,920 --> 00:00:44,880
Speaker 3: were most worried about, So we haven't really seen layoffs

12
00:00:44,920 --> 00:00:48,200
Speaker 3: take up, and initial claims have been remarkably stable, even

13
00:00:48,400 --> 00:00:55,160
Speaker 3: in Washington, DC, Virginia and Maryland, the areas where federal

14
00:00:55,160 --> 00:00:59,760
Speaker 3: workers are most heavily concentrated. We haven't seen the impact

15
00:01:00,120 --> 00:01:02,560
Speaker 3: public layoffs on the rest of the economy yet. The

16
00:01:02,640 --> 00:01:07,520
Speaker 3: unemployment rate seems like it's pretty stable too, and there

17
00:01:07,520 --> 00:01:09,760
Speaker 3: are a couple of reasons for that. One is that

18
00:01:09,920 --> 00:01:12,080
Speaker 3: many of these workers are still on administrative leave, they're

19
00:01:12,080 --> 00:01:14,800
Speaker 3: still on payrolls. The other what we're seeing at zip

20
00:01:14,840 --> 00:01:17,920
Speaker 3: recruiter is that when these federal workers, even those who

21
00:01:17,920 --> 00:01:20,840
Speaker 3: haven't been cut yet, just those who anticipate possibly being

22
00:01:20,840 --> 00:01:23,240
Speaker 3: cut in the future go out and look for jobs.

23
00:01:23,280 --> 00:01:25,520
Speaker 3: They're actually faring better than the rest of the workforce.

24
00:01:25,959 --> 00:01:31,080
Speaker 3: So among those government workers who were just hired by

25
00:01:31,080 --> 00:01:34,000
Speaker 3: a new job in the last few months, seventy six

26
00:01:34,040 --> 00:01:36,959
Speaker 3: percent said the job search went well, compared to sixty

27
00:01:37,000 --> 00:01:39,760
Speaker 3: percent of the workforce overall. And among those who are

28
00:01:39,800 --> 00:01:42,240
Speaker 3: still searching, thirty two percent say their job search is

29
00:01:42,240 --> 00:01:43,880
Speaker 3: going well. That doesn't seem like a big number, but

30
00:01:43,880 --> 00:01:46,720
Speaker 3: it's three times higher than what we see among other

31
00:01:46,800 --> 00:01:49,360
Speaker 3: job seekers, only thirteen percent say their job search is

32
00:01:49,400 --> 00:01:49,960
Speaker 3: going well well.

33
00:01:49,960 --> 00:01:51,920
Speaker 4: That's interesting because I thought with the jobs the A.

34
00:01:52,000 --> 00:01:54,560
Speaker 4: Jolts number that we heard is that job switchers don't

35
00:01:54,560 --> 00:01:57,320
Speaker 4: have the upper hand anymore, definitely in terms of salary,

36
00:01:58,480 --> 00:02:00,880
Speaker 4: and that maybe job switching has to come down at

37
00:02:00,880 --> 00:02:04,240
Speaker 4: that quick rate, not necessarily as high. That's not what

38
00:02:04,280 --> 00:02:04,760
Speaker 4: you're seeing.

39
00:02:06,200 --> 00:02:09,239
Speaker 3: We are seeing that overall, but government workers are doing

40
00:02:09,280 --> 00:02:13,000
Speaker 3: better than most. And it is true though that a

41
00:02:13,080 --> 00:02:16,160
Speaker 3: pretty large share, about forty percent, are taking a pay

42
00:02:16,200 --> 00:02:18,840
Speaker 3: cut when they get that new job. We often hear

43
00:02:18,880 --> 00:02:21,520
Speaker 3: about federal workers being paid so much less than they

44
00:02:21,560 --> 00:02:27,200
Speaker 3: could make elsewhere, and they're sacrificing and to do public service.

45
00:02:27,720 --> 00:02:34,040
Speaker 3: It's not always exactly true. Public sector wages are fairly high. Actually,

46
00:02:34,080 --> 00:02:36,440
Speaker 3: they're not necessarily lower than what people can get in

47
00:02:36,440 --> 00:02:39,000
Speaker 3: the private sector, especially when you factor in total compensation,

48
00:02:39,160 --> 00:02:43,160
Speaker 3: benefits and the sort of value of job security. So

49
00:02:43,240 --> 00:02:46,040
Speaker 3: people are taking a pay cut in much higher numbers

50
00:02:46,120 --> 00:02:48,000
Speaker 3: than is ordinarily the case for job switches.

51
00:02:48,520 --> 00:02:52,480
Speaker 2: Julia, what is the ZIP Recruiter Job seekert Confidence Index

52
00:02:52,680 --> 00:02:53,720
Speaker 2: and what is it telling you that now?

53
00:02:54,919 --> 00:02:57,840
Speaker 3: So we measure job seecret confidence using a battery of

54
00:02:57,960 --> 00:03:02,440
Speaker 3: ten confidence questions, and then we also ask job seekers

55
00:03:02,680 --> 00:03:07,359
Speaker 3: every quarter about everything else that involved that job search

56
00:03:07,560 --> 00:03:10,680
Speaker 3: entails and how they're experiencing the labor market, what they

57
00:03:10,760 --> 00:03:14,560
Speaker 3: expected to get, what they're actually finding jobs at. Your

58
00:03:14,560 --> 00:03:17,440
Speaker 3: confidence is almost back at some of the lowest we've

59
00:03:17,520 --> 00:03:22,920
Speaker 3: ever measured. All of the soft data has gone south recently.

60
00:03:23,400 --> 00:03:27,000
Speaker 3: There was a brief surge of optimism in the fourth quarter,

61
00:03:27,080 --> 00:03:31,320
Speaker 3: but the first quarter data is fairly weak. There's a

62
00:03:31,320 --> 00:03:34,920
Speaker 3: tremendous amount of anxiety because there is just so much

63
00:03:34,960 --> 00:03:37,880
Speaker 3: uncertainty in this economy. And then, of course, you know

64
00:03:38,000 --> 00:03:40,720
Speaker 3: the labor market has slowed over over two years. Hiring

65
00:03:40,840 --> 00:03:43,560
Speaker 3: is very slow, and so it's a pretty good labor

66
00:03:43,560 --> 00:03:45,600
Speaker 3: market if you have a job that you love. If

67
00:03:45,640 --> 00:03:47,800
Speaker 3: you don't and you want to make a change, it's

68
00:03:48,000 --> 00:03:48,960
Speaker 3: a pretty tough one.

69
00:03:49,400 --> 00:03:51,160
Speaker 4: We take a look at, say, some of the confidence

70
00:03:51,600 --> 00:03:54,560
Speaker 4: data that we got earlier this week, Julia, and you're

71
00:03:54,600 --> 00:03:57,520
Speaker 4: starting to see some people worried about their jobs, worried

72
00:03:57,520 --> 00:04:02,600
Speaker 4: about the future, worried about their pay. Is that justified

73
00:04:02,920 --> 00:04:03,880
Speaker 4: from what you see?

74
00:04:05,160 --> 00:04:07,360
Speaker 3: So, I think that's a continuation of what we've seen

75
00:04:07,440 --> 00:04:09,400
Speaker 3: over the last two years, where the lame market has

76
00:04:09,440 --> 00:04:14,560
Speaker 3: cooled along multiple dimensions. First, hiring slowed and narrowed. So

77
00:04:14,680 --> 00:04:18,200
Speaker 3: if you're in healthcare or local government, you know there's

78
00:04:18,200 --> 00:04:22,080
Speaker 3: a pretty strong demand for what you can do. But elsewhere,

79
00:04:22,160 --> 00:04:24,719
Speaker 3: professional business services have added no jobs of the last

80
00:04:24,760 --> 00:04:27,720
Speaker 3: two years. Tech has added no jobs over the last

81
00:04:27,800 --> 00:04:29,760
Speaker 3: two years. And that's at a time when more and

82
00:04:29,800 --> 00:04:35,000
Speaker 3: more Americans have actually entered these occupations and trained for them.

83
00:04:35,040 --> 00:04:37,360
Speaker 3: We have more and more college graduates, We have more

84
00:04:37,360 --> 00:04:40,480
Speaker 3: and more of those college graduates majoring in computer science,

85
00:04:41,160 --> 00:04:45,640
Speaker 3: and so the lame market's not absorbing these new people

86
00:04:45,720 --> 00:04:48,120
Speaker 3: into the roles where they want to be. About fifty

87
00:04:48,120 --> 00:04:51,440
Speaker 3: percent are having to switch industries to roles they didn't

88
00:04:51,440 --> 00:04:54,360
Speaker 3: want in order to get hired. And then we're seeing

89
00:04:54,440 --> 00:04:57,240
Speaker 3: hours being cut too. So people aren't losing jobs, but

90
00:04:57,320 --> 00:04:59,960
Speaker 3: they're losing hours. The work week is just thirty four

91
00:05:00,000 --> 00:05:03,120
Speaker 3: four point one hours. That's a level we usually see

92
00:05:03,120 --> 00:05:06,560
Speaker 3: in recessions in good times, that usually harvers between thirty

93
00:05:06,560 --> 00:05:09,640
Speaker 3: four point three and thirty four point six hours. And

94
00:05:09,680 --> 00:05:12,919
Speaker 3: we're seeing it have effects. We're seeing it cause the

95
00:05:13,000 --> 00:05:15,600
Speaker 3: share of workers who are part time for economic reasons

96
00:05:15,640 --> 00:05:18,880
Speaker 3: to hit the highest level since January twenty nineteen. And

97
00:05:19,000 --> 00:05:23,040
Speaker 3: also we're seeing the highest number of workers working multiple

98
00:05:23,120 --> 00:05:26,400
Speaker 3: jobs and they're not making bus This is not just

99
00:05:26,520 --> 00:05:29,560
Speaker 3: opportunity driven. Yes, we have a very flexible labor market

100
00:05:29,600 --> 00:05:32,359
Speaker 3: where people are able to cobble together multiple gigs, but

101
00:05:32,440 --> 00:05:34,960
Speaker 3: it's not people doing that to earn more than they

102
00:05:34,960 --> 00:05:38,040
Speaker 3: would in one job. They're only coming out just as well.

103
00:05:38,080 --> 00:05:39,840
Speaker 3: According to a study by the Fed.

104
00:05:40,400 --> 00:05:43,080
Speaker 2: Julia, for the longest time, really over the last several years,

105
00:05:43,080 --> 00:05:45,479
Speaker 2: it just seems like employers have had a hard time

106
00:05:45,920 --> 00:05:50,400
Speaker 2: finding and retaining workers. We even talked about hoarding of employees.

107
00:05:50,600 --> 00:05:51,440
Speaker 2: Is that still a thing?

108
00:05:53,240 --> 00:05:55,960
Speaker 3: So the pendulum has swung back to employers, and most

109
00:05:56,040 --> 00:05:58,960
Speaker 3: employers now are saying that that's not their biggest struggle.

110
00:05:59,080 --> 00:06:02,960
Speaker 3: They are especially for for most roles, we actually see

111
00:06:02,960 --> 00:06:06,839
Speaker 3: pretty large numbers of applications for posting. If you're posting

112
00:06:06,839 --> 00:06:10,280
Speaker 3: a job for either an HR or for a receptionist

113
00:06:10,520 --> 00:06:14,000
Speaker 3: or for a PR manager, you are going to get

114
00:06:14,080 --> 00:06:19,320
Speaker 3: possibly hundreds of applications. There are a few industries where

115
00:06:19,760 --> 00:06:23,000
Speaker 3: employers are starved for talent. Those are sort of healthcare fields,

116
00:06:23,960 --> 00:06:29,080
Speaker 3: physical therapists, occupational therapists, speech and language pathologists, nurses. Those

117
00:06:29,279 --> 00:06:31,920
Speaker 3: roles are very hard to fill. And then the skilled

118
00:06:31,920 --> 00:06:37,240
Speaker 3: traits plumbers, electricians, carpenters, those are also very difficult. Fortunately,

119
00:06:37,279 --> 00:06:40,520
Speaker 3: we're seeing wages go up fastest in those sectors in

120
00:06:40,560 --> 00:06:45,240
Speaker 3: healthcare and manufacturing right now, and that is that that

121
00:06:45,320 --> 00:06:47,960
Speaker 3: information is actually getting through to job seekers. We're seeing

122
00:06:47,960 --> 00:06:51,279
Speaker 3: more and more people in role in vocational training programs

123
00:06:51,279 --> 00:06:53,680
Speaker 3: and more and more people enroll in nursing programs.

124
00:06:54,000 --> 00:06:56,200
Speaker 4: All right, we really appreciate Julia. Thank you so very much.

125
00:06:56,279 --> 00:06:58,400
Speaker 4: Julia Pollock, chief economist at ZIP Recruiter.

126
00:06:58,640 --> 00:07:02,080
Speaker 1: This is the Bloomberg Survey. Alen's podcast. Listen live each

127
00:07:02,120 --> 00:07:05,160
Speaker 1: weekday starting at seven am Eastern on Apple Corplay and

128
00:07:05,160 --> 00:07:08,200
Speaker 1: Android Auto with the Bloomberg Business app. You can also

129
00:07:08,320 --> 00:07:11,960
Speaker 1: listen live on Amazon Alexa from our flagship New York station,

130
00:07:12,520 --> 00:07:15,160
Speaker 1: Just say Alexa, Play Bloomberg eleven thirty.

131
00:07:15,440 --> 00:07:17,720
Speaker 2: Wendy Schulder joins it. She's a professor at Brown University.

132
00:07:17,720 --> 00:07:20,000
Speaker 2: If we love checking in with Wendy Shielder, get a

133
00:07:20,080 --> 00:07:22,160
Speaker 2: lay of the land on all things happening down in DC.

134
00:07:23,120 --> 00:07:26,360
Speaker 2: So when we look at these tariffs here, they're certainly

135
00:07:26,440 --> 00:07:29,200
Speaker 2: front center here for us on Global Wall Street. How

136
00:07:29,200 --> 00:07:33,360
Speaker 2: did the folks in Washington, DC think about this growing

137
00:07:33,560 --> 00:07:38,400
Speaker 2: trade war that seemingly is being ginned up by this

138
00:07:38,480 --> 00:07:42,040
Speaker 2: administration across a number of countries and a number of

139
00:07:42,080 --> 00:07:42,840
Speaker 2: different industries.

140
00:07:44,280 --> 00:07:47,880
Speaker 5: Well, I mean, I think the troministration has announced.

141
00:07:47,360 --> 00:07:51,120
Speaker 6: Really big tariffs and then pulled back or implemented them

142
00:07:51,160 --> 00:07:53,880
Speaker 6: for a day or two and pulled back, and so

143
00:07:54,040 --> 00:07:56,800
Speaker 6: far it sort of looks like a negotiating game.

144
00:07:57,120 --> 00:07:59,760
Speaker 5: What can we get? But this is a deeper issue

145
00:07:59,760 --> 00:08:00,680
Speaker 5: for the trumpministration.

146
00:08:00,720 --> 00:08:03,280
Speaker 6: In the first Trump administration, there was a promise to

147
00:08:03,280 --> 00:08:05,880
Speaker 6: make America great again and bring back jobs that had

148
00:08:05,880 --> 00:08:09,200
Speaker 6: been lost from really thirty years more than thirty years

149
00:08:09,240 --> 00:08:10,520
Speaker 6: of free trade policy.

150
00:08:10,920 --> 00:08:12,720
Speaker 5: You know, manufacturing plants.

151
00:08:12,320 --> 00:08:16,960
Speaker 6: Closed and relocated, primarily in this case to Mexico to

152
00:08:17,000 --> 00:08:20,000
Speaker 6: some extent to Canada. So you've got a situation where

153
00:08:20,000 --> 00:08:23,840
Speaker 6: the physical plant is gone or shut down. And you know,

154
00:08:23,880 --> 00:08:27,040
Speaker 6: Trump did not bring back manufacturing jobs in his first term,

155
00:08:27,160 --> 00:08:28,920
Speaker 6: so there seems to be a commitment to put a

156
00:08:28,920 --> 00:08:31,160
Speaker 6: lot of pressure to bring those back. But it takes

157
00:08:31,160 --> 00:08:32,920
Speaker 6: a very long time to build a new plant or

158
00:08:32,920 --> 00:08:35,680
Speaker 6: get an old plant up and running again, and it's

159
00:08:35,880 --> 00:08:38,880
Speaker 6: cost prohibitive right now and in a global market. So

160
00:08:39,120 --> 00:08:41,199
Speaker 6: how they do the second part of this is the

161
00:08:41,200 --> 00:08:43,960
Speaker 6: big question mark slapping tariffs on cost.

162
00:08:43,800 --> 00:08:45,200
Speaker 5: Consumers money in the short run.

163
00:08:45,400 --> 00:08:47,720
Speaker 6: The argument is the long run, it'll bring back jobs

164
00:08:47,720 --> 00:08:50,120
Speaker 6: to America, but there doesn't even be a plan.

165
00:08:49,960 --> 00:08:50,800
Speaker 5: To do that right now.

166
00:08:51,360 --> 00:08:52,560
Speaker 3: So that's a great question.

167
00:08:52,640 --> 00:08:54,360
Speaker 4: That's a great point because I was asking that at

168
00:08:54,400 --> 00:08:57,000
Speaker 4: Hugh Johnson just a few moments ago, and I was saying, look,

169
00:08:57,160 --> 00:09:00,280
Speaker 4: the move away from say a government support or aemy

170
00:09:00,320 --> 00:09:04,440
Speaker 4: supported by fiscal spend to an economy supported by private spend,

171
00:09:04,960 --> 00:09:08,080
Speaker 4: is that in general something that is realistic? And what

172
00:09:08,240 --> 00:09:10,319
Speaker 4: support do you think we need to see to then

173
00:09:10,400 --> 00:09:12,680
Speaker 4: help those companies and help the private money.

174
00:09:13,960 --> 00:09:15,880
Speaker 6: Well, Alex, something I think you can make an argument

175
00:09:16,000 --> 00:09:18,960
Speaker 6: that we could reduce the size and scope and footprint

176
00:09:19,040 --> 00:09:21,800
Speaker 6: of the federal government financially, in terms of people, in

177
00:09:21,840 --> 00:09:24,760
Speaker 6: terms of regulation. You can make that sound argument, and

178
00:09:24,880 --> 00:09:27,079
Speaker 6: you could actually try to implement that in a way

179
00:09:27,120 --> 00:09:29,760
Speaker 6: that's gradual. You can't, you know, it's like weaning off

180
00:09:29,800 --> 00:09:32,320
Speaker 6: anything else. You've got a full supply of this for

181
00:09:32,360 --> 00:09:34,400
Speaker 6: so long. People are quite used to it, and they

182
00:09:34,440 --> 00:09:39,439
Speaker 6: make decisions based on consumers, households, businesses make decisions about

183
00:09:39,440 --> 00:09:42,160
Speaker 6: the flow continue on the flow of federal money and

184
00:09:42,360 --> 00:09:45,120
Speaker 6: free trade. So you take both of those away at

185
00:09:45,160 --> 00:09:48,200
Speaker 6: the same time, I think you really bring the economy,

186
00:09:48,440 --> 00:09:50,480
Speaker 6: you know, not to a halt, but certainly do a

187
00:09:50,480 --> 00:09:54,200
Speaker 6: lot of damage not only to current spending but future planning.

188
00:09:54,240 --> 00:09:56,839
Speaker 6: And we're seeing consumer sentiment going down. We're seeing people

189
00:09:56,840 --> 00:09:58,720
Speaker 6: pull back. Now, if you want to buy a new car,

190
00:09:58,880 --> 00:10:01,280
Speaker 6: if these if these terrif fold, then it will be

191
00:10:01,360 --> 00:10:04,280
Speaker 6: more expensive or mind people of the supply chain issues

192
00:10:04,320 --> 00:10:07,000
Speaker 6: under COVID, when cars cost anywhere from three to six

193
00:10:07,120 --> 00:10:09,640
Speaker 6: thousand dollars more than they should have, that will slow

194
00:10:09,679 --> 00:10:12,400
Speaker 6: down consumer spending. And as you say, Alex, consumer spending

195
00:10:12,520 --> 00:10:15,160
Speaker 6: is still a big engine that drives a US economy.

196
00:10:16,120 --> 00:10:19,719
Speaker 2: Wendy, I'm thinking about where the president's support is here,

197
00:10:19,800 --> 00:10:22,520
Speaker 2: where maybe some of the Democratic support might be. And

198
00:10:22,600 --> 00:10:27,040
Speaker 2: I think we've got something coming up in Wisconsin next week,

199
00:10:27,080 --> 00:10:29,960
Speaker 2: an election for the state Supreme Court. I know Elon

200
00:10:30,080 --> 00:10:31,520
Speaker 2: Musk has spent a lot of money in there for

201
00:10:31,559 --> 00:10:35,800
Speaker 2: the GOP candidate. Are you looking to this state Supreme

202
00:10:35,800 --> 00:10:38,400
Speaker 2: court kind of situation in Wisconsin next week? Is that

203
00:10:38,559 --> 00:10:42,280
Speaker 2: any kind of referendum on where the president's support might be.

204
00:10:43,440 --> 00:10:45,160
Speaker 5: Well, this is a great question.

205
00:10:45,240 --> 00:10:48,199
Speaker 6: Democrats are trying to really rally their base and they

206
00:10:48,240 --> 00:10:51,960
Speaker 6: haven't really had anything to latch onto that's hit everybody right.

207
00:10:52,000 --> 00:10:54,120
Speaker 5: There hasn't been a massive national impact on some of

208
00:10:54,120 --> 00:10:56,320
Speaker 5: these policies yet. But these small elections.

209
00:10:56,360 --> 00:10:59,080
Speaker 6: There's one in Pennsylvania for state Senate Democrat won in

210
00:10:59,120 --> 00:11:00,199
Speaker 6: a Republican district.

211
00:11:00,880 --> 00:11:02,680
Speaker 5: Florida there's two congressional seats.

212
00:11:02,720 --> 00:11:06,000
Speaker 6: Those polls are looking much tighter than anybody would expect

213
00:11:06,000 --> 00:11:09,000
Speaker 6: in Republican leaning districts. So this Supreme Court race is

214
00:11:09,000 --> 00:11:11,360
Speaker 6: getting a lot of attention. If a Democrat or a

215
00:11:11,440 --> 00:11:14,400
Speaker 6: Liberal wins, then the court stays a little more liberal.

216
00:11:14,440 --> 00:11:17,120
Speaker 6: If the conservative wins, it reverts back to being more conservative.

217
00:11:17,400 --> 00:11:19,760
Speaker 6: So it's a benchmark, But there were lots of these

218
00:11:19,760 --> 00:11:23,040
Speaker 6: benchmarks leading into twenty four and the president won easily.

219
00:11:23,200 --> 00:11:26,440
Speaker 6: So I don't think it's a big harbinger of national trends.

220
00:11:26,720 --> 00:11:28,920
Speaker 6: But I do think that if it starts to build

221
00:11:29,040 --> 00:11:31,760
Speaker 6: pressure at the local level in states like Wisconsin and

222
00:11:31,760 --> 00:11:35,960
Speaker 6: Pennsylvania on Republican members of Congress, particularly Republicans in the House,

223
00:11:36,360 --> 00:11:38,840
Speaker 6: then signals get sent to the White House that maybe

224
00:11:38,840 --> 00:11:40,880
Speaker 6: they need to change some of the things that they're doing.

225
00:11:41,080 --> 00:11:42,160
Speaker 5: But we're a long way from.

226
00:11:42,000 --> 00:11:44,200
Speaker 4: That, a long way from that. And also we're sort

227
00:11:44,200 --> 00:11:46,720
Speaker 4: of moving towards a phase two, right, So you get

228
00:11:47,000 --> 00:11:50,040
Speaker 4: the tariffs first and then hopefully the tax cuts and deregulation.

229
00:11:51,679 --> 00:11:54,040
Speaker 4: How soon do we have to get that phase two

230
00:11:54,600 --> 00:11:56,960
Speaker 4: to calm any sort of underlying chaos.

231
00:11:58,480 --> 00:12:00,959
Speaker 6: Well, I mean, the tax cuts are something that people

232
00:12:01,000 --> 00:12:03,320
Speaker 6: talk about and they get sort of encouraged about. But

233
00:12:03,360 --> 00:12:05,840
Speaker 6: remember that's a long process too. When they come in,

234
00:12:06,280 --> 00:12:08,400
Speaker 6: that's a complicated process. The House and Senate are going

235
00:12:08,440 --> 00:12:11,360
Speaker 6: to come in very different in their packages. On the

236
00:12:11,400 --> 00:12:14,320
Speaker 6: tax bill, there's lots of different things, earned income tax

237
00:12:14,360 --> 00:12:17,280
Speaker 6: credit for example, people who are poor or people who.

238
00:12:17,120 --> 00:12:20,280
Speaker 5: Are low income. You know, is that going to still exist?

239
00:12:20,600 --> 00:12:23,480
Speaker 6: There are things that will affect all levels of the economy,

240
00:12:23,640 --> 00:12:25,559
Speaker 6: and so it's not clear that it will be a

241
00:12:25,600 --> 00:12:28,160
Speaker 6: win for the Republicans just to pass the bill. It

242
00:12:28,280 --> 00:12:30,640
Speaker 6: very much depends obviously what's in the bill and who

243
00:12:30,679 --> 00:12:32,160
Speaker 6: it's hitting and who it's helping.

244
00:12:32,400 --> 00:12:33,400
Speaker 5: So I think those.

245
00:12:33,200 --> 00:12:35,839
Speaker 6: Effects don't happen really until next year in terms of

246
00:12:35,880 --> 00:12:37,000
Speaker 6: the psyche of America.

247
00:12:37,040 --> 00:12:38,079
Speaker 5: But you know, the Biden.

248
00:12:37,800 --> 00:12:41,040
Speaker 6: Administration left Trump with high inflation, we can all agree

249
00:12:41,080 --> 00:12:45,000
Speaker 6: on that, but a relatively robust economy, and now that

250
00:12:45,120 --> 00:12:47,040
Speaker 6: economy is starting to look very shaky.

251
00:12:47,400 --> 00:12:49,280
Speaker 5: And that's the big question more for the Republicans in

252
00:12:49,559 --> 00:12:50,120
Speaker 5: the Congress.

253
00:12:50,200 --> 00:12:52,200
Speaker 6: Do you want to wait till that actually happens and

254
00:12:52,240 --> 00:12:54,840
Speaker 6: you're looking at twenty twenty six right in front of you,

255
00:12:55,160 --> 00:12:56,560
Speaker 6: or do you want to try to forestall that with

256
00:12:56,600 --> 00:13:00,360
Speaker 6: the Trump administration now be wedy?

257
00:13:00,559 --> 00:13:05,760
Speaker 2: Is this signal chat situation for this administration?

258
00:13:07,280 --> 00:13:09,400
Speaker 6: You know, I on Tuesday morning, I was talking about it,

259
00:13:09,440 --> 00:13:12,280
Speaker 6: and I thought, well, people make mistakes, people use apps,

260
00:13:12,320 --> 00:13:15,280
Speaker 6: they add people by mistake, and I didn't see the

261
00:13:15,320 --> 00:13:17,520
Speaker 6: Republicans sort of getting riled up about it. But the

262
00:13:17,520 --> 00:13:22,320
Speaker 6: Senate Republicans in particular Republican senators are very unhappy about this,

263
00:13:22,480 --> 00:13:25,360
Speaker 6: and Republican hardliners in the House on foreign policy are

264
00:13:25,440 --> 00:13:27,120
Speaker 6: unhappy about it, and they do.

265
00:13:27,280 --> 00:13:29,440
Speaker 5: Have seemed to have come together to say, clean up

266
00:13:29,440 --> 00:13:29,840
Speaker 5: your act.

267
00:13:30,120 --> 00:13:32,520
Speaker 6: You know, Trump will not get rid of anybody tomorrow,

268
00:13:32,760 --> 00:13:35,160
Speaker 6: but Trump will get rid of people if they are

269
00:13:35,360 --> 00:13:37,959
Speaker 6: not serving him well. And I think this is sort

270
00:13:37,960 --> 00:13:40,960
Speaker 6: of a signal literally no pun intended, you know, make

271
00:13:41,040 --> 00:13:43,880
Speaker 6: sure that this doesn't happen again. If it happens again,

272
00:13:44,360 --> 00:13:46,200
Speaker 6: then people start to think, Okay, we don't have any

273
00:13:46,240 --> 00:13:48,720
Speaker 6: confidence in the Pentagon or the leadership of the Pentagon

274
00:13:48,840 --> 00:13:52,080
Speaker 6: and the national security team that affects US worldwide. I

275
00:13:52,080 --> 00:13:54,520
Speaker 6: think that's something Trump would have to pay attention to.

276
00:13:55,280 --> 00:13:57,160
Speaker 4: When we take a look, say at foreign policy, we

277
00:13:57,280 --> 00:14:01,400
Speaker 4: just broaden that out then for a moment significant and

278
00:14:01,480 --> 00:14:04,600
Speaker 4: kind of where are we in the talks between US

279
00:14:04,600 --> 00:14:08,000
Speaker 4: and Russia about Ukraine? When can we really expect more

280
00:14:08,040 --> 00:14:08,680
Speaker 4: movement here?

281
00:14:10,320 --> 00:14:10,600
Speaker 5: Well?

282
00:14:10,640 --> 00:14:13,640
Speaker 6: You know, I think I think Trump is basically indicated putin, look,

283
00:14:13,679 --> 00:14:15,840
Speaker 6: you're gonna walk away. You could walk away with some

284
00:14:16,160 --> 00:14:19,000
Speaker 6: victory here, you know, if you end it. Then we

285
00:14:19,160 --> 00:14:23,440
Speaker 6: stop sending the arms, we stop aiding Ukraine, and you know,

286
00:14:23,600 --> 00:14:26,520
Speaker 6: you walk away with some territory and you're not getting

287
00:14:26,560 --> 00:14:28,440
Speaker 6: all your people killed, Like this is a good deal

288
00:14:28,480 --> 00:14:31,040
Speaker 6: for you, and we will get some mineral rights, or

289
00:14:31,040 --> 00:14:33,600
Speaker 6: we get some natural resource rights, We'll get some steak

290
00:14:33,800 --> 00:14:37,160
Speaker 6: in Ukraine. I mean, that's the ideal situation, frankly, for

291
00:14:37,200 --> 00:14:39,760
Speaker 6: all the parties involved. The United States gets a steak,

292
00:14:40,280 --> 00:14:43,160
Speaker 6: Ukraine still has the United States on its side, and

293
00:14:43,240 --> 00:14:46,480
Speaker 6: Russia gets out of a difficult and expensive war. But

294
00:14:46,680 --> 00:14:49,560
Speaker 6: so far Putin's not biting I think the way that

295
00:14:49,640 --> 00:14:52,560
Speaker 6: Trump had hoped. But I do think that's a consistent

296
00:14:52,560 --> 00:14:55,240
Speaker 6: position the United States can maintain. There's enough support in

297
00:14:55,280 --> 00:14:58,720
Speaker 6: Congress for continued a Ukraine, so Trump wants to keep

298
00:14:58,760 --> 00:15:01,400
Speaker 6: that going. He can get that permission and that aid

299
00:15:01,680 --> 00:15:04,120
Speaker 6: from Congress. It's Trump that's been saying it's not a

300
00:15:04,200 --> 00:15:06,400
Speaker 6: good deal for the United States. So I think in

301
00:15:06,400 --> 00:15:08,960
Speaker 6: that way, they're sort of waiting for Russia to decide

302
00:15:09,000 --> 00:15:10,800
Speaker 6: this is the best they're going to do, and so

303
00:15:10,840 --> 00:15:13,040
Speaker 6: far we're not getting the signal that Putin thinks that

304
00:15:13,080 --> 00:15:14,240
Speaker 6: it is the best that he can do.

305
00:15:14,680 --> 00:15:16,760
Speaker 2: Wendy thank you so much for joining us. We always

306
00:15:16,760 --> 00:15:18,760
Speaker 2: appreciate getting a few minutes of your time. Wendy Schuller,

307
00:15:19,240 --> 00:15:24,440
Speaker 2: She's a professor at a Brown University.

308
00:15:26,760 --> 00:15:30,360
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

309
00:15:30,400 --> 00:15:33,440
Speaker 1: weekday afternoons from seven to ten am. He's durn Listen

310
00:15:33,480 --> 00:15:37,040
Speaker 1: on Apple Karplay and Android Auto with the Bloomberg Business app,

311
00:15:37,240 --> 00:15:38,920
Speaker 1: or watch us live on YouTube.

312
00:15:39,040 --> 00:15:40,720
Speaker 2: Let's talk about TMT here. I want to talk about

313
00:15:40,720 --> 00:15:43,920
Speaker 2: technology stocks. I'm we got the NASTAC It's down ten

314
00:15:43,960 --> 00:15:46,920
Speaker 2: percent year today. That's a correction, kids. I don't know.

315
00:15:46,920 --> 00:15:49,160
Speaker 2: And if you need the tech market to lead this

316
00:15:49,200 --> 00:15:52,480
Speaker 2: market higher like it has forever, do we have a

317
00:15:52,520 --> 00:15:54,560
Speaker 2: problem for this market? Melissa Auto joins it. She's head

318
00:15:54,560 --> 00:15:58,440
Speaker 2: of TMT research for S and P Global Visible Alpha. Melissa,

319
00:15:58,600 --> 00:16:01,320
Speaker 2: when you talked to your clients, are you positive about

320
00:16:01,360 --> 00:16:05,280
Speaker 2: tech these days or not? Has it played itself out

321
00:16:05,280 --> 00:16:06,880
Speaker 2: at least for the near term?

322
00:16:06,920 --> 00:16:08,240
Speaker 7: Good morning, Great to be here.

323
00:16:09,240 --> 00:16:09,840
Speaker 6: It is.

324
00:16:10,840 --> 00:16:12,880
Speaker 7: Tech is a bit all over the place at the moment.

325
00:16:13,040 --> 00:16:18,360
Speaker 7: I think there are there's an overhang of uncertainty for

326
00:16:18,440 --> 00:16:22,880
Speaker 7: companies that have China exposure. There is shifting of tides

327
00:16:23,160 --> 00:16:28,600
Speaker 7: as companies are moving toward different aspects of AI, and

328
00:16:28,640 --> 00:16:32,040
Speaker 7: then there are there's a bit of slowing, you know,

329
00:16:32,120 --> 00:16:35,520
Speaker 7: as companies are more exposed to the consumer. So I

330
00:16:35,560 --> 00:16:40,400
Speaker 7: think it's you know, it's a tale of multiple aspects there.

331
00:16:40,560 --> 00:16:42,480
Speaker 4: And what I found is so interesting about the MAG

332
00:16:42,560 --> 00:16:45,200
Speaker 4: seven slide yesterday down three percent is that some of

333
00:16:45,200 --> 00:16:47,880
Speaker 4: the individual stories for within the MAG seven we're all

334
00:16:47,960 --> 00:16:50,720
Speaker 4: kind of different, right Like Tdcowan had a note out

335
00:16:50,760 --> 00:16:54,200
Speaker 4: about Microsoft canceling some data center projects, Tesla was cut

336
00:16:54,240 --> 00:16:57,880
Speaker 4: to hold, Nvidia might have some issues within China energy

337
00:16:58,000 --> 00:17:01,200
Speaker 4: rules for chip imports. Google said that maybe extually mean

338
00:17:01,280 --> 00:17:04,800
Speaker 4: Millennium said that Google could lose younger users to open

339
00:17:04,840 --> 00:17:07,359
Speaker 4: AI search like there were different things. That wasn't a

340
00:17:07,440 --> 00:17:11,560
Speaker 4: theme which is the biggest stresser for these guys right now.

341
00:17:12,480 --> 00:17:17,560
Speaker 7: The biggest stressor right now, I think is whether or

342
00:17:17,600 --> 00:17:22,600
Speaker 7: not we're going to really see inferencing its scale, and

343
00:17:22,840 --> 00:17:27,440
Speaker 7: what that means is that there's been so much infrastructure spent.

344
00:17:27,560 --> 00:17:30,000
Speaker 7: I mean, I've been on this show talking about the

345
00:17:30,000 --> 00:17:32,639
Speaker 7: billions and billions and billions of dollars in CAPEX that

346
00:17:32,640 --> 00:17:35,880
Speaker 7: we've seen from the cloud service providers that have gone

347
00:17:35,880 --> 00:17:41,280
Speaker 7: into data centers and what is that ultimately going to

348
00:17:41,440 --> 00:17:45,000
Speaker 7: net what's going to be the ROI of that for

349
00:17:45,640 --> 00:17:50,840
Speaker 7: all of the companies that are leveraging and using that compute.

350
00:17:51,400 --> 00:17:53,720
Speaker 7: And I think that's where we really haven't seen a

351
00:17:53,880 --> 00:18:00,320
Speaker 7: viable business model for generative AI, where companies are leveling

352
00:18:00,440 --> 00:18:05,720
Speaker 7: this and then the output of it still remains somewhat dicey,

353
00:18:06,400 --> 00:18:10,600
Speaker 7: especially for more complex anything that's got a little bit

354
00:18:10,640 --> 00:18:15,000
Speaker 7: of complexity around it is still not seeing the accuracy

355
00:18:15,320 --> 00:18:17,280
Speaker 7: that it requires.

356
00:18:17,320 --> 00:18:21,000
Speaker 2: In video, I mean it's down fifteen percent year to date.

357
00:18:21,119 --> 00:18:22,840
Speaker 2: I kind of and I think a lot of people

358
00:18:22,880 --> 00:18:25,320
Speaker 2: who don't traffic in this stuff every day, we kind

359
00:18:25,359 --> 00:18:28,639
Speaker 2: of look at M Video's kind of my litmus for

360
00:18:28,720 --> 00:18:31,360
Speaker 2: all things AI. It's down fifteen percent year to date.

361
00:18:31,440 --> 00:18:32,320
Speaker 2: What does that tell you?

362
00:18:33,080 --> 00:18:35,440
Speaker 7: Yeah, that's an interesting one. I mean, they had their

363
00:18:35,440 --> 00:18:39,520
Speaker 7: big GtC conference last week. Jensen gave his two hour

364
00:18:39,640 --> 00:18:43,879
Speaker 7: plus keynote. One of the interesting things though from that

365
00:18:45,000 --> 00:18:48,800
Speaker 7: is that Blackwell is continuing to see really strong demand

366
00:18:48,960 --> 00:18:53,440
Speaker 7: and it is Yes, it's really a solution. It's chip

367
00:18:53,520 --> 00:18:56,960
Speaker 7: plus software and some other stuff in there that essentially

368
00:18:57,160 --> 00:18:59,919
Speaker 7: enhances the compute, lowers the energy, makes it a lot

369
00:19:00,080 --> 00:19:05,639
Speaker 7: more cost efficient. The critical thing coming out of that

370
00:19:06,040 --> 00:19:12,520
Speaker 7: is what's been happening to estimates. We've seen Blackwell B

371
00:19:12,720 --> 00:19:17,119
Speaker 7: series two hundred be two hundred B three hundred expectations

372
00:19:17,440 --> 00:19:23,280
Speaker 7: come up fifteen percent for Q one, which tells me that, okay,

373
00:19:23,400 --> 00:19:27,600
Speaker 7: expectations are getting a little bit more positive coming into

374
00:19:28,400 --> 00:19:31,639
Speaker 7: next quarter and that maybe we're starting to see a

375
00:19:31,640 --> 00:19:32,720
Speaker 7: bit of momentum.

376
00:19:33,480 --> 00:19:37,200
Speaker 4: Okay. The other interesting side of this is the infrastructure

377
00:19:37,359 --> 00:19:40,200
Speaker 4: build out, which leads me to crowd weave and it's IPO.

378
00:19:41,160 --> 00:19:42,040
Speaker 3: What did you Yeah?

379
00:19:42,040 --> 00:19:44,160
Speaker 4: Okay, so I've had a lot of tutorials with ANURAG

380
00:19:44,200 --> 00:19:47,000
Speaker 4: because I'm like, I got to understand like all the

381
00:19:47,000 --> 00:19:51,440
Speaker 4: differentiation here, So what do you make about this potential

382
00:19:51,480 --> 00:19:54,280
Speaker 4: IPO and sort of where it's going to price at?

383
00:19:54,320 --> 00:19:56,280
Speaker 4: Like what is that going to tell us about the

384
00:19:56,320 --> 00:19:57,960
Speaker 4: thirst for AI infrastructure?

385
00:19:58,160 --> 00:20:00,720
Speaker 7: Yeah, I mean the valuation is going to be critical,

386
00:20:01,359 --> 00:20:04,280
Speaker 7: what sort of multiple they come in at? And uh,

387
00:20:04,600 --> 00:20:06,680
Speaker 7: it's just going to be a temperature check for sure.

388
00:20:07,960 --> 00:20:10,159
Speaker 4: Does that but in terms of what, like is it

389
00:20:10,240 --> 00:20:12,439
Speaker 4: in terms of how the big guys are spending? Is

390
00:20:12,440 --> 00:20:16,400
Speaker 4: it in terms of like the inferencing versus the LMS

391
00:20:16,440 --> 00:20:18,960
Speaker 4: and and training of it. What's it going to tell

392
00:20:19,040 --> 00:20:20,239
Speaker 4: us all of that?

393
00:20:20,520 --> 00:20:23,800
Speaker 7: I mean, I think right now there's so much uncertainty.

394
00:20:23,840 --> 00:20:27,199
Speaker 7: There's such an overhang in the market of everybody just

395
00:20:27,240 --> 00:20:29,959
Speaker 7: shrugging their shoulders and saying, can we get a bit

396
00:20:30,000 --> 00:20:32,040
Speaker 7: of clarity, Can we have a benchmark? Can we have

397
00:20:32,119 --> 00:20:34,320
Speaker 7: something out there in the market that's going to give

398
00:20:34,400 --> 00:20:38,119
Speaker 7: us an anchor? And that IPO may be one of those.

399
00:20:38,960 --> 00:20:40,920
Speaker 2: So what's single best idea right now?

400
00:20:41,840 --> 00:20:45,280
Speaker 7: Single best idea? Wow, that's a good question.

401
00:20:46,080 --> 00:20:47,879
Speaker 2: What I mean, do we just I just you know,

402
00:20:47,920 --> 00:20:49,680
Speaker 2: when I asked a tech person, I can say if

403
00:20:49,680 --> 00:20:52,680
Speaker 2: somebody asked me that Microsoft, you know, I mean, I.

404
00:20:52,600 --> 00:20:56,200
Speaker 7: Mean, I will say coming out of GtC And I

405
00:20:56,560 --> 00:20:59,040
Speaker 7: feel like I said this last year to Alex and

406
00:20:59,240 --> 00:21:03,879
Speaker 7: ed and the Tech Show, is that Jensen continues to

407
00:21:04,080 --> 00:21:08,760
Speaker 7: talk about Dell, and you know, we're continuing to see

408
00:21:08,880 --> 00:21:13,520
Speaker 7: a lot of you know, like closeness in relationship between

409
00:21:13,720 --> 00:21:16,760
Speaker 7: Dell and Nvidia, Dell and Nvidia, and I feel like

410
00:21:17,600 --> 00:21:22,960
Speaker 7: that end to end solution at the edge may be

411
00:21:23,240 --> 00:21:27,280
Speaker 7: something that could be a catalyst for the next upgrade cycle.

412
00:21:27,440 --> 00:21:30,520
Speaker 7: And the market's been waiting for this upgrade cycle for

413
00:21:30,560 --> 00:21:33,120
Speaker 7: like nine months, and maybe we're gonna start to see

414
00:21:33,119 --> 00:21:34,720
Speaker 7: it in the second half of the year, and that's

415
00:21:34,800 --> 00:21:36,080
Speaker 7: not really priced in yet.

416
00:21:36,240 --> 00:21:38,159
Speaker 2: All right, good stuff, Melissa Auto, thank you so much.

417
00:21:38,200 --> 00:21:38,760
Speaker 8: Appreciate that.

418
00:21:38,800 --> 00:21:41,760
Speaker 2: As always Melissa Auto, She's had of TMT Research s

419
00:21:41,840 --> 00:21:43,919
Speaker 2: and p Global Visible Alpha.

420
00:21:44,560 --> 00:21:48,480
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

421
00:21:48,520 --> 00:21:51,919
Speaker 1: starting at seven am Eastern on Alpacarplay and Android Auto

422
00:21:51,960 --> 00:21:54,920
Speaker 1: with the Bloomberg Business app. You can also listen live

423
00:21:55,000 --> 00:21:58,560
Speaker 1: on Amazon Alexa from our flagship New York station Just

424
00:21:58,600 --> 00:22:01,119
Speaker 1: say Alexa Play Bloomberg eleven thirty.

425
00:22:01,400 --> 00:22:05,000
Speaker 4: Joining us now is Leslie Palty Guzman, Senior non Resident

426
00:22:05,080 --> 00:22:09,320
Speaker 4: Fellow over at CSIS, which is Center for Strategic and

427
00:22:09,359 --> 00:22:14,640
Speaker 4: International Studies at NYU University SPS Center for Global Affairs,

428
00:22:15,119 --> 00:22:19,240
Speaker 4: where I sit. The gas question is quite important. Europe

429
00:22:19,240 --> 00:22:22,439
Speaker 4: is still buying some Russian gas. If there is a

430
00:22:22,520 --> 00:22:25,119
Speaker 4: resolution to the war, does it ramp up again to

431
00:22:25,160 --> 00:22:27,920
Speaker 4: the kind of levels that we saw pre twenty twenty two.

432
00:22:28,600 --> 00:22:32,560
Speaker 9: That's the question. So for me, Russia has been playing

433
00:22:32,600 --> 00:22:36,600
Speaker 9: the long game all along and has been hoping potentially

434
00:22:36,720 --> 00:22:41,280
Speaker 9: for the return of more of its commodities, and Europe

435
00:22:41,280 --> 00:22:45,600
Speaker 9: didn't wait for the US and Russia to start a resets.

436
00:22:46,040 --> 00:22:49,720
Speaker 9: Some European business interests had already in mind potentially a

437
00:22:49,760 --> 00:22:53,399
Speaker 9: return of more of Russian gas, especially because of the

438
00:22:53,440 --> 00:22:57,200
Speaker 9: competitiveness lack of competitiveness right now in Europe. I think

439
00:22:57,240 --> 00:23:01,400
Speaker 9: some pro Russian parties in Europe Extreme Ride had already

440
00:23:01,480 --> 00:23:05,040
Speaker 9: mentioned that we were starting already to see some discussion

441
00:23:05,280 --> 00:23:10,680
Speaker 9: around it. I think there will be nothing before peace agreement,

442
00:23:11,400 --> 00:23:15,159
Speaker 9: so it remains very preliminary. But I think utilities in

443
00:23:15,200 --> 00:23:20,720
Speaker 9: Europe without vocally screaming that they will be happy to

444
00:23:20,800 --> 00:23:23,760
Speaker 9: get some Russian molecules that are less potentially less expensive

445
00:23:24,640 --> 00:23:28,280
Speaker 9: and will bring down the prices in Europe has.

446
00:23:28,280 --> 00:23:30,520
Speaker 2: But Europe seems to have done a good job. Les

447
00:23:30,160 --> 00:23:34,880
Speaker 2: we kind of getting by without the Russian energy sources.

448
00:23:34,960 --> 00:23:36,720
Speaker 2: Is this something that can be a longer term play.

449
00:23:36,760 --> 00:23:40,480
Speaker 2: Do they want to not go back to Russia for

450
00:23:40,520 --> 00:23:41,080
Speaker 2: any reason?

451
00:23:41,359 --> 00:23:42,160
Speaker 6: Excit question?

452
00:23:42,359 --> 00:23:45,080
Speaker 9: Yeah, I think the trust has been broken. It will

453
00:23:45,160 --> 00:23:47,880
Speaker 9: never come back to the forty percent of market share

454
00:23:47,960 --> 00:23:53,520
Speaker 9: that Russia had in the European imports of gas, but

455
00:23:53,880 --> 00:23:58,600
Speaker 9: I think twenty percent is a possibility, and twenty twenty

456
00:23:58,640 --> 00:24:02,000
Speaker 9: four it was actually a ten percent. Both pipeline and

457
00:24:02,240 --> 00:24:05,960
Speaker 9: energy imports from Russia, and now it's way down because

458
00:24:06,000 --> 00:24:09,240
Speaker 9: there is a line via Ukraine that is completely out

459
00:24:09,280 --> 00:24:12,400
Speaker 9: of serve election. There is no more molecule going through

460
00:24:12,400 --> 00:24:14,399
Speaker 9: this line. But the trucks train is still running and

461
00:24:14,440 --> 00:24:17,840
Speaker 9: the Arctic energy, I mean, the Yama and Chicago are

462
00:24:17,880 --> 00:24:20,560
Speaker 9: still coming into Europe. So we still have some flows

463
00:24:20,800 --> 00:24:24,440
Speaker 9: they never left and they could ramp up a little

464
00:24:24,440 --> 00:24:31,200
Speaker 9: bit more. But again there are many not resolved issues. First,

465
00:24:31,200 --> 00:24:33,640
Speaker 9: there is a question of trust. Gas Prom has many

466
00:24:33,680 --> 00:24:37,560
Speaker 9: penalties it needs to sort out with the European utilities.

467
00:24:38,160 --> 00:24:40,240
Speaker 9: So the gas Prom owes a lot of money to

468
00:24:40,320 --> 00:24:43,199
Speaker 9: this company. I don't think they will sign again long

469
00:24:43,280 --> 00:24:45,119
Speaker 9: term contracts like they did before. I don't know what

470
00:24:45,240 --> 00:24:48,400
Speaker 9: kind of arrangement can be found, but it's very preliminary

471
00:24:48,440 --> 00:24:49,440
Speaker 9: and it's going to take time.

472
00:24:49,600 --> 00:24:52,520
Speaker 4: And that's what's so cool about commodities. It'll sort itself out. Right,

473
00:24:52,520 --> 00:24:54,280
Speaker 4: Like if more gas does come on the market, Europe

474
00:24:54,320 --> 00:24:56,400
Speaker 4: may not buy it, but it also means that it'll

475
00:24:56,720 --> 00:25:00,000
Speaker 4: you'll ship the flows around in terms of where are

476
00:25:00,040 --> 00:25:01,480
Speaker 4: all that energy and gas goes.

477
00:25:01,560 --> 00:25:03,960
Speaker 9: Yeah, and to your question, I think Europe doesn't need

478
00:25:04,240 --> 00:25:08,360
Speaker 9: the Russian gas, especially twenty twenty six two twenty seven,

479
00:25:08,480 --> 00:25:12,359
Speaker 9: when we see a much better well supplied global gas market,

480
00:25:12,480 --> 00:25:15,600
Speaker 9: we have much more supply coming online. So this Russian

481
00:25:15,640 --> 00:25:19,840
Speaker 9: gas can actually be displaced by other sources. And this

482
00:25:20,000 --> 00:25:22,760
Speaker 9: is one of the contradictions from the Trump administration is

483
00:25:22,760 --> 00:25:28,400
Speaker 9: that the baby Drill agenda doesn't go along with bringing

484
00:25:28,440 --> 00:25:30,879
Speaker 9: back more Russian molecule into Europe because it's going to

485
00:25:30,920 --> 00:25:32,480
Speaker 9: displace potentially US energy.

486
00:25:33,000 --> 00:25:34,800
Speaker 4: Before we let you go, I want to talk about

487
00:25:34,800 --> 00:25:37,560
Speaker 4: the crisis and the Red Sea, which basically when you

488
00:25:37,600 --> 00:25:40,960
Speaker 4: have vessels into detour around the Cape of Good Hope,

489
00:25:41,000 --> 00:25:43,440
Speaker 4: that just makes it crazy for freight rates. It makes

490
00:25:43,440 --> 00:25:47,080
Speaker 4: everything very difficult. Could we see a world where things

491
00:25:47,119 --> 00:25:48,760
Speaker 4: come down and the Red Sea and things can be

492
00:25:48,800 --> 00:25:50,240
Speaker 4: shipped through and how do we get there?

493
00:25:50,480 --> 00:25:53,160
Speaker 9: Yeah, so I think twenty twenty five it's not out

494
00:25:53,200 --> 00:25:56,080
Speaker 9: of the question that we could see a restoration of

495
00:25:55,640 --> 00:25:59,639
Speaker 9: the of the Red Sea route. However, you know, the

496
00:25:59,680 --> 00:26:04,840
Speaker 9: who need to be deterred again and the US need

497
00:26:04,920 --> 00:26:09,000
Speaker 9: to remain very convinced that freedom of navigation is in

498
00:26:09,160 --> 00:26:12,000
Speaker 9: the interests of the United States but also the rest

499
00:26:12,040 --> 00:26:16,720
Speaker 9: of the world. And there are many other positive externalities

500
00:26:16,720 --> 00:26:20,479
Speaker 9: for restoring the roots. You know, for all the goods

501
00:26:20,520 --> 00:26:23,240
Speaker 9: from the US to Asia, they would really benefit from

502
00:26:23,280 --> 00:26:26,719
Speaker 9: the shorter route. And we need to remember that the

503
00:26:26,720 --> 00:26:31,320
Speaker 9: Panama Canal is also less much less use because of

504
00:26:31,359 --> 00:26:34,560
Speaker 9: the draw So we have two roots right now that

505
00:26:34,760 --> 00:26:37,520
Speaker 9: are not at their full potential, the Panama Canal and

506
00:26:37,560 --> 00:26:41,119
Speaker 9: the Swiss Canal slash Right Sea. So we cannot believe

507
00:26:41,160 --> 00:26:44,119
Speaker 9: that we're in a better place without this route. And

508
00:26:45,840 --> 00:26:50,359
Speaker 9: also I think Washington is sending a message to China

509
00:26:50,400 --> 00:26:53,359
Speaker 9: and to Iran by being aggressive there because China is

510
00:26:53,400 --> 00:26:57,240
Speaker 9: watching and it's you know, China is looking for itself.

511
00:26:57,280 --> 00:26:59,120
Speaker 9: What's going on in the sas China Sea and if

512
00:26:59,119 --> 00:27:00,400
Speaker 9: the US would be strong there.

513
00:27:00,840 --> 00:27:03,800
Speaker 2: Yeah, I'm Google mapping the Red Sea as we speak.

514
00:27:04,200 --> 00:27:06,320
Speaker 2: It's important. It looks to me as it relates to

515
00:27:06,320 --> 00:27:09,399
Speaker 2: the SUSS global trade. So I'm learning a little bit

516
00:27:09,480 --> 00:27:11,760
Speaker 2: here as about the Red Seat. Leslie, thank you so

517
00:27:11,840 --> 00:27:15,160
Speaker 2: much for joining us. Leslie Paulty Guzman, Senior non Resident

518
00:27:15,160 --> 00:27:18,399
Speaker 2: Fellow at the Center First Strategic and International Studies and

519
00:27:18,600 --> 00:27:22,560
Speaker 2: NYU SPS Center, talking little geopolitics as it relates to

520
00:27:23,000 --> 00:27:28,000
Speaker 2: global trade.

521
00:27:29,359 --> 00:27:33,280
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

522
00:27:33,280 --> 00:27:36,320
Speaker 1: starting at seven am Eastern on Apple, Colarckplay, and Android

523
00:27:36,320 --> 00:27:39,359
Speaker 1: Auto with the Bloomberg Business app. You can also watch

524
00:27:39,400 --> 00:27:42,359
Speaker 1: us live every weekday on YouTube and always on the

525
00:27:42,400 --> 00:27:43,440
Speaker 1: Bloomberg terminal.

526
00:27:43,520 --> 00:27:46,919
Speaker 2: Ben Millen joins us. He's the CIO of IX Advisors,

527
00:27:47,160 --> 00:27:49,520
Speaker 2: joining us live here in our Bloomberg Interactive Brokers studio

528
00:27:49,640 --> 00:27:52,840
Speaker 2: up from Tampa, Florida, the winter home of the New

529
00:27:52,920 --> 00:27:55,879
Speaker 2: York Yankees. Opening day here at the stadium, three o'clock,

530
00:27:55,960 --> 00:27:58,920
Speaker 2: first pitch, so there'd be lots of folks running around

531
00:27:58,960 --> 00:28:01,480
Speaker 2: the city in their Yankee uniforms. Ben, what are you

532
00:28:01,480 --> 00:28:03,720
Speaker 2: looking at in this marketplace? How do you seeing kind

533
00:28:03,800 --> 00:28:06,159
Speaker 2: of what's unfolding here? It's been a tough start to

534
00:28:06,240 --> 00:28:07,080
Speaker 2: twenty twenty five.

535
00:28:07,680 --> 00:28:09,720
Speaker 8: It has, I mean, you know, like you said, market

536
00:28:09,720 --> 00:28:11,399
Speaker 8: sat and certainty, this is finance one on one and

537
00:28:11,440 --> 00:28:13,399
Speaker 8: we're seeing it play out in real time, and you

538
00:28:13,400 --> 00:28:15,639
Speaker 8: know it's take My big takeaway is kind of the

539
00:28:15,680 --> 00:28:18,760
Speaker 8: big reversals that we've seen, you know, depending on the headlines.

540
00:28:18,800 --> 00:28:21,040
Speaker 8: In fact, I think Bloomberg actually broke a story yesterday

541
00:28:21,040 --> 00:28:23,399
Speaker 8: that some of the auto tariffs might hit, you know,

542
00:28:23,480 --> 00:28:26,119
Speaker 8: yesterday afternoon and we saw this huge reversal from up

543
00:28:26,200 --> 00:28:28,080
Speaker 8: in the day to you know down big, and that's

544
00:28:28,119 --> 00:28:30,800
Speaker 8: just a continuation. And so we're looking very closely at

545
00:28:30,920 --> 00:28:33,639
Speaker 8: kind of the engine of the economy, so GDP and

546
00:28:33,680 --> 00:28:36,320
Speaker 8: the consumer. And this is kind of the conundrum we've seen.

547
00:28:36,359 --> 00:28:38,400
Speaker 8: You know, the hard data is looking pretty good, the

548
00:28:38,480 --> 00:28:40,920
Speaker 8: sentiment data not so much. So you know, we're kind

549
00:28:40,920 --> 00:28:42,240
Speaker 8: of peeling back the layers. And where we want to

550
00:28:42,320 --> 00:28:46,160
Speaker 8: understand is that sentiment data potentially an early precursor of

551
00:28:46,200 --> 00:28:47,720
Speaker 8: stuff that's going to show up in the hard data.

552
00:28:48,520 --> 00:28:50,120
Speaker 4: So aside from that, which is the sort of the

553
00:28:50,400 --> 00:28:52,880
Speaker 4: macro thesis, what do you make of the decline that

554
00:28:52,920 --> 00:28:55,120
Speaker 4: we've seen in tech and particularly the AI traits?

555
00:28:55,160 --> 00:28:57,360
Speaker 8: What are you telling clients, Well, that's I mean, I

556
00:28:57,400 --> 00:28:58,760
Speaker 8: think you hit the nail on the head. Is this

557
00:28:58,800 --> 00:29:01,200
Speaker 8: is you know, part of the the hype coming off,

558
00:29:01,280 --> 00:29:02,520
Speaker 8: you know, and we saw this. I'm old must to

559
00:29:02,520 --> 00:29:04,240
Speaker 8: remember the dot com bubble where it's like, you know,

560
00:29:04,240 --> 00:29:05,960
Speaker 8: you put pets dot com and all of a sudden

561
00:29:06,000 --> 00:29:08,240
Speaker 8: it's this you know, mega billion dollar company. And then

562
00:29:08,320 --> 00:29:10,440
Speaker 8: you know, people starting to realize, well, all right, a

563
00:29:10,480 --> 00:29:12,720
Speaker 8: lot of growth is being you know built into that assumption.

564
00:29:12,880 --> 00:29:14,640
Speaker 8: And you know, if we have interest rates back up

565
00:29:14,720 --> 00:29:17,320
Speaker 8: or god forbidter recession, even a mild one, that can

566
00:29:17,440 --> 00:29:20,200
Speaker 8: really take a lot of that valuation out of the

567
00:29:20,200 --> 00:29:22,360
Speaker 8: growth trade. So I think that's what we're saying. I

568
00:29:22,360 --> 00:29:24,640
Speaker 8: think that's also why we're seeing a bid for treasuries too,

569
00:29:25,040 --> 00:29:26,720
Speaker 8: is just kind of a flight to safety as people

570
00:29:26,760 --> 00:29:28,800
Speaker 8: reassess how much they want to pay for growth.

571
00:29:29,320 --> 00:29:30,720
Speaker 2: Look at this, I mean, you're look at in a

572
00:29:30,720 --> 00:29:33,720
Speaker 2: world of hurt out there. Gold up another sixteen bucks.

573
00:29:33,800 --> 00:29:35,920
Speaker 4: Yeah, that's live.

574
00:29:36,000 --> 00:29:37,800
Speaker 2: I mean the Golden Sex call of a month and

575
00:29:37,840 --> 00:29:39,560
Speaker 2: a half ago with thirty one hundred gold. Boy, that

576
00:29:39,600 --> 00:29:42,680
Speaker 2: looks good. Is that something you talk to folks about?

577
00:29:42,800 --> 00:29:46,960
Speaker 8: Yes, gold is probably you know, there's it's hard to

578
00:29:47,000 --> 00:29:49,200
Speaker 8: put conviction in the market like this, especially when you've

579
00:29:49,200 --> 00:29:51,040
Speaker 8: got you know, kind of different headlines and a lot

580
00:29:51,080 --> 00:29:53,840
Speaker 8: of what I would call exogronous risk factors. Gold is

581
00:29:53,880 --> 00:29:57,120
Speaker 8: probably one of the highest conviction that's out there. We think,

582
00:29:57,280 --> 00:29:59,800
Speaker 8: and in a lot of our client portfolios, you know,

583
00:30:00,080 --> 00:30:02,240
Speaker 8: putting in positions in gold or telling people they should

584
00:30:02,240 --> 00:30:04,920
Speaker 8: think about this. And I've been surprised, to be perfectly candid,

585
00:30:05,120 --> 00:30:07,080
Speaker 8: a lot of our institutional clients. You know, gold has

586
00:30:07,120 --> 00:30:09,160
Speaker 8: really not been on their radar. And you know, when

587
00:30:09,200 --> 00:30:12,280
Speaker 8: you look at the big structural threats out there, not

588
00:30:12,400 --> 00:30:14,240
Speaker 8: just this year, I'm talking you know, three, four, five,

589
00:30:14,280 --> 00:30:16,520
Speaker 8: ten years out, you know, gold is really good hedge.

590
00:30:16,520 --> 00:30:18,560
Speaker 8: And then let's not forget the least not the least

591
00:30:18,560 --> 00:30:21,760
Speaker 8: of which is all the central bank buying, you know, China, India,

592
00:30:21,920 --> 00:30:23,840
Speaker 8: now even some of the emerging market central banks are

593
00:30:23,840 --> 00:30:26,800
Speaker 8: literally selling treasuries and buying gold. China's even going so

594
00:30:26,840 --> 00:30:28,840
Speaker 8: far as to kind of obfuscate their buying, to hide

595
00:30:28,880 --> 00:30:31,480
Speaker 8: it from the marketplace. So that's not a trend we

596
00:30:31,520 --> 00:30:33,880
Speaker 8: see reversing anytime soon. And we think, you know, we

597
00:30:33,880 --> 00:30:35,760
Speaker 8: think gold is going to set all time highs, you know,

598
00:30:35,840 --> 00:30:37,160
Speaker 8: every year for the next few years.

599
00:30:37,640 --> 00:30:39,600
Speaker 4: Is JP Morgan had a great note out on this

600
00:30:39,720 --> 00:30:42,400
Speaker 4: thatch a look yesterday that looks through the different cycles

601
00:30:42,400 --> 00:30:45,120
Speaker 4: of gold buying and how what drove gold, say in

602
00:30:45,160 --> 00:30:48,160
Speaker 4: the last ten years. So it really yields, for example,

603
00:30:48,160 --> 00:30:50,240
Speaker 4: and the dollar is not necessarily driving it anymore, and

604
00:30:50,320 --> 00:30:54,120
Speaker 4: driving it more because countries want that gold because of

605
00:30:54,160 --> 00:30:57,600
Speaker 4: the sort of renationalization and the geopolitical strife and needing

606
00:30:57,600 --> 00:30:59,480
Speaker 4: to make sure like the money's in the country kind

607
00:30:59,520 --> 00:30:59,760
Speaker 4: of thing.

608
00:31:00,000 --> 00:31:02,520
Speaker 8: Oh absolutely, yeah. And you know, if you go back

609
00:31:02,560 --> 00:31:04,880
Speaker 8: ten fifteen years, you know, kind of the biggest marginal

610
00:31:04,880 --> 00:31:07,760
Speaker 8: buyer of gold was jewelry, you know, especially in countries

611
00:31:07,800 --> 00:31:09,320
Speaker 8: like India, and then all of sudden the ETFs, you know,

612
00:31:09,360 --> 00:31:11,440
Speaker 8: started getting more traction and now central banks. I mean,

613
00:31:11,440 --> 00:31:14,080
Speaker 8: if you look at their gold purchases, it's basically you know,

614
00:31:14,080 --> 00:31:16,960
Speaker 8: it's up orders of magnitude just really since COVID. And

615
00:31:17,000 --> 00:31:18,840
Speaker 8: you made a good point about real yields. Ironically, you know,

616
00:31:18,840 --> 00:31:21,080
Speaker 8: we're fundamentally a quad shop and we had a real

617
00:31:21,120 --> 00:31:24,360
Speaker 8: yield gold model that just you know, worked perfectly right

618
00:31:24,400 --> 00:31:26,280
Speaker 8: up until COVID and then it just you know, the

619
00:31:26,320 --> 00:31:28,480
Speaker 8: world changed. As Boonlog said, we're in a new normal,

620
00:31:28,560 --> 00:31:30,320
Speaker 8: and you know you can't price off that anymore.

621
00:31:30,800 --> 00:31:32,720
Speaker 2: Fiction income. What are you doing in the bond market

622
00:31:32,720 --> 00:31:34,760
Speaker 2: these as are sitting in to your treasury at two percent?

623
00:31:34,800 --> 00:31:36,080
Speaker 2: Are you taking some credit risk?

624
00:31:36,200 --> 00:31:38,520
Speaker 8: We're a little bit of both. So we've got you know,

625
00:31:38,640 --> 00:31:41,720
Speaker 8: we've got different products depending on client preferences, but generally speaking,

626
00:31:41,720 --> 00:31:43,240
Speaker 8: sitting in the short end of the curve. If you're

627
00:31:43,240 --> 00:31:45,520
Speaker 8: going to take credit risk do it and things that

628
00:31:45,560 --> 00:31:47,600
Speaker 8: are you know, senior secured, some you know, some good

629
00:31:47,680 --> 00:31:49,480
Speaker 8: We're big fans of ETFs out there just because of

630
00:31:49,480 --> 00:31:51,600
Speaker 8: the liquid that they provide. There's some good you know,

631
00:31:51,600 --> 00:31:54,920
Speaker 8: triple A clo ETFs short duration credit. But yeah, I

632
00:31:54,920 --> 00:31:57,400
Speaker 8: mean spreads are starting to widen, and you know, once

633
00:31:57,440 --> 00:31:59,560
Speaker 8: credit spreads start to widen, you know that's not a

634
00:31:59,600 --> 00:32:01,880
Speaker 8: highly mean reverting series like something like the vics that

635
00:32:01,880 --> 00:32:04,600
Speaker 8: can come back down quickly. You know, that's generally indicative

636
00:32:04,680 --> 00:32:07,760
Speaker 8: of you know, forward looking you know, clouds on the horizon,

637
00:32:07,800 --> 00:32:09,680
Speaker 8: so to speak. And so we're generally, you know, taking

638
00:32:09,680 --> 00:32:13,000
Speaker 8: a very cautious approach to approach to credit if at all.

639
00:32:13,120 --> 00:32:15,400
Speaker 4: Interesting, because I feel like that's an area where many

640
00:32:15,440 --> 00:32:17,640
Speaker 4: say it could be a lot worse. So we want

641
00:32:17,640 --> 00:32:19,600
Speaker 4: to take that risk to get the yield well.

642
00:32:19,640 --> 00:32:21,480
Speaker 8: And people are stretching for yield. I mean, that's part

643
00:32:21,480 --> 00:32:22,760
Speaker 8: and that's part of it, and that's part of the

644
00:32:22,760 --> 00:32:25,240
Speaker 8: client conversations too, is you know, don't necessarily go out

645
00:32:25,240 --> 00:32:27,080
Speaker 8: on the duration curve. I mean, often, to be candid,

646
00:32:27,120 --> 00:32:29,240
Speaker 8: we're having more of those conversations about not stretching on

647
00:32:29,320 --> 00:32:32,040
Speaker 8: duration for yield. But people are really reaching for the

648
00:32:32,080 --> 00:32:33,960
Speaker 8: credit yield. And so that's another thing when you know

649
00:32:33,960 --> 00:32:36,320
Speaker 8: we're kind of looking at, you know, kind of you know,

650
00:32:36,360 --> 00:32:38,920
Speaker 8: the two different outcomes. Do we have a soft landing

651
00:32:39,160 --> 00:32:41,560
Speaker 8: you you know, or do we have a productivity you know,

652
00:32:41,760 --> 00:32:45,640
Speaker 8: growth pull out of this? You know, you really this

653
00:32:45,680 --> 00:32:48,120
Speaker 8: is where you really, we think, want to be very

654
00:32:48,160 --> 00:32:50,480
Speaker 8: mindful of the risks you're taking, especially in credit, and

655
00:32:50,480 --> 00:32:52,880
Speaker 8: then keeping an eye on the tenure. Actually, on Yesterdays show,

656
00:32:52,920 --> 00:32:54,400
Speaker 8: you had a woman I think from Sockchen who made

657
00:32:54,400 --> 00:32:56,320
Speaker 8: a very compelling case for ten ure yields going down

658
00:32:56,320 --> 00:32:58,480
Speaker 8: to three point five. You know, there's a lot of

659
00:32:58,480 --> 00:33:00,960
Speaker 8: compelling cases why they could go up five. And I

660
00:33:00,960 --> 00:33:03,520
Speaker 8: think that's emblematic where we are. You know, it's just

661
00:33:03,760 --> 00:33:05,800
Speaker 8: there's there's it could go either way with kind of

662
00:33:05,800 --> 00:33:07,800
Speaker 8: equal probabilities. And so you just got to, you know,

663
00:33:07,920 --> 00:33:09,600
Speaker 8: really watch the till so to speak.

664
00:33:09,880 --> 00:33:11,640
Speaker 2: Ben, thanks so much for joining us. Really appreciate it,

665
00:33:11,680 --> 00:33:15,480
Speaker 2: Ben McMillan, he says, CIO at id X, at Visor.

666
00:33:16,080 --> 00:33:20,920
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify

667
00:33:21,040 --> 00:33:24,800
Speaker 1: and anywhere else you get your podcasts. Listen live each

668
00:33:24,840 --> 00:33:28,640
Speaker 1: weekday seven to ten am Eastern on bloomberg dot com,

669
00:33:28,800 --> 00:33:32,640
Speaker 1: the iHeartRadio app tune In, and the Bloomberg Business app.

670
00:33:32,920 --> 00:33:36,040
Speaker 1: You can also watch us live every weekday on YouTube

671
00:33:36,320 --> 00:33:38,360
Speaker 1: and always on the Bloomberg terminal