WEBVTT - US Payrolls Marked Down by Most Since 2009 in Prelim Data 0:00:02.920 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.840 --> 0:00:15.000 Bloomberg Intelligence podcast. Catch us live weekdays at ten am 0:00:15.040 --> 0:00:17.520 Eastern on fo car Playing and broyd Outo with the 0:00:17.520 --> 0:00:21.400 Bloomberg Business app. Listen on demand wherever you get your podcasts, 0:00:21.640 --> 0:00:24.480 or watch us live on YouTube. 0:00:25.239 --> 0:00:28.880 US payrolls marked down by most since two thousand and 0:00:28.960 --> 0:00:30.280 nine in preliminary data. 0:00:31.040 --> 0:00:32.239 It sounds important to me. 0:00:32.440 --> 0:00:34.560 Let's go to Ira Jersey. He's the bond guy. He 0:00:34.640 --> 0:00:37.879 covers yours an interest rate strategy for Bloomberg Intelligence. He's 0:00:37.920 --> 0:00:40.520 down and oh, I'm going to guess Princeton, New New Jersey. 0:00:40.560 --> 0:00:44.120 Why come to the world's financial market? God forbid? 0:00:44.960 --> 0:00:45.240 Hira. 0:00:45.240 --> 0:00:46.920 Thanks so much for joining us. You're the expert on 0:00:46.960 --> 0:00:48.839 this stuff. I love to talk to you about this 0:00:48.960 --> 0:00:52.040 US payroll data and about Jackson Hole. How are you 0:00:52.159 --> 0:00:54.480 kind of writing about this in your bi research. 0:00:55.720 --> 0:00:58.480 Yeah, the data I think Paul is was more or 0:00:58.560 --> 0:01:00.320 less what a lot of people that expect, did you know. 0:01:00.400 --> 0:01:02.240 Kudos to our colleagues. 0:01:01.840 --> 0:01:04.400 Over at Bloomberg Economics who saw a number very similar 0:01:04.400 --> 0:01:07.560 to this negative eight hundred and eighteen thousand for the revisions. 0:01:07.840 --> 0:01:09.880 Keep in mind this is old, this is going to 0:01:09.880 --> 0:01:10.800 be revised. 0:01:10.400 --> 0:01:16.759 Again, and also it's not information that's new, right, So 0:01:17.080 --> 0:01:20.160 if we think about all that this means is that, yes, 0:01:20.280 --> 0:01:23.440 the data was weaker in the economy was weaker between 0:01:23.480 --> 0:01:26.120 April of twenty twenty three and March of twenty twenty four. 0:01:26.800 --> 0:01:28.319 That doesn't necessarily tell us. 0:01:28.200 --> 0:01:30.240 Where we are now or where we're going over the 0:01:30.280 --> 0:01:33.479 next couple of a couple of quarters, but it does 0:01:33.520 --> 0:01:36.319 show that maybe things weren't quite as rosy as the 0:01:36.360 --> 0:01:37.679 preliminary data suggested. 0:01:38.040 --> 0:01:39.760 And Hira, I'm glad you brought that up because Paul 0:01:39.760 --> 0:01:41.480 and I were talking about a story I wrote ahead 0:01:41.480 --> 0:01:43.040 of that data, and it was just to that point 0:01:43.080 --> 0:01:45.800 where options traders weren't pricing at a big swing because 0:01:45.959 --> 0:01:48.560 they really saw this as backward looking, as basically a 0:01:48.600 --> 0:01:51.080 non event for the stock market when we're seeing the 0:01:51.120 --> 0:01:53.400 S and P five hundred still higher this morning. But 0:01:53.440 --> 0:01:55.040 when it comes to the bond side of things, that 0:01:55.080 --> 0:01:58.320 you focus on, what is speculative positioning telling us in 0:01:58.400 --> 0:02:04.080 the bond market? Ahead of speaking at Jackson Hole on Friday. 0:02:02.880 --> 0:02:04.400 Yeah, I don't think the positioning. 0:02:04.680 --> 0:02:07.280 The position really hasn't changed a whole ton over the 0:02:07.360 --> 0:02:10.639 last couple of months, and you know, speculators are still 0:02:10.680 --> 0:02:13.920 relatively you know, less short than they used to be, 0:02:14.000 --> 0:02:17.360 but there's still generally short rates. But that's because you know, 0:02:17.520 --> 0:02:19.960 real money investors are long, right, So for every long 0:02:20.080 --> 0:02:22.200 there's a short in futures positioning, so you have to 0:02:22.240 --> 0:02:24.560 keep that in mind. And a lot of those shorts 0:02:24.600 --> 0:02:26.400 are going to be against other things, right, so people 0:02:26.440 --> 0:02:28.720 are long credit or people who are trying to del 0:02:28.760 --> 0:02:31.720 to hedge options positions for example, So all of those 0:02:31.720 --> 0:02:33.920 things go into some of that futures positioning. 0:02:33.960 --> 0:02:34.840 So you can't take as. 0:02:34.760 --> 0:02:38.440 Much away from that one data set as you can 0:02:38.840 --> 0:02:42.240 from say, just the incoming data that we get, you know, 0:02:42.280 --> 0:02:45.120 in terms of Jackson Hole, you know, I think that 0:02:45.400 --> 0:02:47.400 one thing that this data that we received just a 0:02:47.400 --> 0:02:50.680 couple of minutes ago does suggest is that that the 0:02:50.680 --> 0:02:53.760 FED is more ammunition to cut interest rates. You know, 0:02:53.800 --> 0:02:57.120 people who are worried about them cutting twenty five or fifty, 0:02:57.240 --> 0:03:01.000 you know, the market kind of is now back in 0:03:00.560 --> 0:03:03.280 in terms of the first cut being maybe twenty five 0:03:03.320 --> 0:03:06.360 basis points, but this does give them some ammunition because 0:03:06.360 --> 0:03:08.360 they can say, oh, well, you know the economy is 0:03:08.400 --> 0:03:10.919 not as strong as we had thought, and because of that, 0:03:11.520 --> 0:03:13.000 you know, that gives us at least a little bit 0:03:13.040 --> 0:03:15.000 of comfort in the fact that we can slowly start 0:03:15.040 --> 0:03:19.800 to reduce the amount of monetary tightening that we've done. 0:03:20.560 --> 0:03:25.120 All right, Jackson Hole, Wyoming. Is it better for Truman J. 0:03:25.240 --> 0:03:27.880 Powe to just keep it short and sweet and just 0:03:27.960 --> 0:03:29.000 let things keep moving. 0:03:30.320 --> 0:03:33.720 Well, you know, it's yeah, that's that's a good question. 0:03:33.760 --> 0:03:35.680 You know, we get the minutes today at two o'clock, 0:03:35.760 --> 0:03:37.520 so I think that he's going to stick to almost 0:03:37.520 --> 0:03:39.080 whatever is said in the minutes. 0:03:39.880 --> 0:03:41.880 So I think it's gonna be very important to kind. 0:03:41.760 --> 0:03:46.440 Of read what a majority or most of the members 0:03:46.600 --> 0:03:48.920 of the Federal Reserve had said at the last meeting. 0:03:49.720 --> 0:03:51.800 But he I suspect that he is going to hint 0:03:51.800 --> 0:03:54.560 that the Federal Reserve is on a path the cutting 0:03:54.600 --> 0:03:57.320 interest rates. But he's going to remain and I think 0:03:57.800 --> 0:04:01.360 if you recall from his post meeting press conference, he 0:04:01.480 --> 0:04:03.800 still said like, look, you know, we haven't made any decisions. 0:04:03.840 --> 0:04:06.880 We're doing everything. But we're doing everything meeting to meeting. 0:04:07.600 --> 0:04:09.680 But when you look at a preponderance of the data, 0:04:09.720 --> 0:04:11.880 I know, the retail sales data last week was pretty decent, 0:04:11.960 --> 0:04:14.120 but a lot of the other data that we're getting 0:04:14.200 --> 0:04:17.760 is mixed to somewhat lower, and certainly today's employment data 0:04:17.960 --> 0:04:20.720 suggests that that, you know, things aren't as rosy as 0:04:20.760 --> 0:04:22.760 we had thought. And because of that, I think that 0:04:22.800 --> 0:04:25.200 he's going to hint that a cut is on the tape. 0:04:25.560 --> 0:04:28.320 Looking at the ten year treasury yield, creating just below 0:04:28.400 --> 0:04:30.600 three eighty what's the key levels when you're looking at 0:04:30.600 --> 0:04:32.200 the ten year or the two year right now? 0:04:32.560 --> 0:04:35.000 Yeah, so three seventy eight, so not too far from 0:04:35.000 --> 0:04:37.440 where we are right now is a reasonably important technical 0:04:37.520 --> 0:04:40.800 level on the ten year yield, and below that you're 0:04:40.839 --> 0:04:44.200 talking about somewhere in the three sixties kind of area. 0:04:44.240 --> 0:04:48.359 Three sixty four I think is the next big level. Interestingly, 0:04:48.400 --> 0:04:51.440 we've kind of over the last couple of weeks since 0:04:51.480 --> 0:04:54.280 I left on holiday, we've been in a more or 0:04:54.360 --> 0:04:57.719 lesser range. And because of that range, you've seen momentum 0:04:57.760 --> 0:04:59.680 indicators suggests that maybe we're going to stay in that 0:04:59.760 --> 0:05:02.320 range until we got something, you know, big that's gonna 0:05:02.360 --> 0:05:03.040 knock us out. 0:05:02.920 --> 0:05:04.800 It all right, Ira, thanks so much for joining us 0:05:04.800 --> 0:05:07.120 our Jersey. He's a chief US interest rate strategist for 0:05:07.160 --> 0:05:08.240 Bloomberg Intelligence. 0:05:09.680 --> 0:05:13.599 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:05:13.640 --> 0:05:17.160 weekdays at ten am Eastern on applecar Play and Android 0:05:17.200 --> 0:05:20.000 Auto with the Bloomberg Business app. You can also listen 0:05:20.120 --> 0:05:23.200 live on Amazon Alexa from our flagship New York station 0:05:23.560 --> 0:05:27.280 Just say Alexa playing Bloomberg eleven thirty. 0:05:28.000 --> 0:05:30.720 I tell you one of the stocks today again really 0:05:30.800 --> 0:05:33.400 jumps out at you is Target. Our friends at Tarje 0:05:33.600 --> 0:05:35.960 put up a solid quarter here and the market loves it. 0:05:36.000 --> 0:05:39.720 Stocks up thirteen percent, which again for a retailer, that's 0:05:39.839 --> 0:05:41.720 right size to have that kind of a move in 0:05:41.760 --> 0:05:43.400 a stock really kind of jumps out at you. 0:05:43.600 --> 0:05:46.520 And another one I'd point out too TJX YEP up 0:05:46.600 --> 0:05:48.440 five percent, trading at an all time high, also on 0:05:48.480 --> 0:05:49.440 the back of strong results. 0:05:49.560 --> 0:05:51.719 Let's check in with an expert on this stuff, Jen Bartasha. 0:05:51.760 --> 0:05:55.640 She's Bloomberg Intelligence senior analyst. She covers all that retail stuff. 0:05:55.680 --> 0:05:57.360 I'm not really sure what's going on there, but she's 0:05:57.400 --> 0:06:00.760 the expert. So Jen, talk to us about Target. What 0:06:00.760 --> 0:06:01.919 are they doing right there? 0:06:03.160 --> 0:06:05.880 Good morning, thanks for having me. And with Target, what 0:06:05.920 --> 0:06:09.760 we're really seeing is that they sort of reaffirmed their 0:06:09.800 --> 0:06:15.400 strategy around creating newness reducing prices and enhancing the value 0:06:15.440 --> 0:06:19.120 perception they have with customers. And this second quarter results, 0:06:19.160 --> 0:06:21.680 we really see that that is starting to resonate, especially 0:06:21.680 --> 0:06:24.720 because they're seeing traffic going back into stores as well 0:06:24.760 --> 0:06:28.520 as online. So really, you know, positive early signs from 0:06:28.560 --> 0:06:30.840 Target that this momentum might be able to continue. 0:06:32.240 --> 0:06:34.799 What about when it comes to consumer package good companies, 0:06:34.839 --> 0:06:36.400 because you and I have talked in the past, and 0:06:36.440 --> 0:06:39.599 we know that Richmond FED President Tom Barkin watches a 0:06:39.680 --> 0:06:41.600 price to mix very closely, and that's a lot of 0:06:41.640 --> 0:06:44.080 the data that you crunch over at Bloomberg Intelligence as 0:06:44.120 --> 0:06:46.560 far as what that means for inflation and also the 0:06:46.600 --> 0:06:49.320 direction potentially for FED policy. What are you seeing on 0:06:49.360 --> 0:06:51.599 there as we begin to get more consumer package good 0:06:51.600 --> 0:06:53.560 companies reporting as well. 0:06:53.720 --> 0:06:57.560 Well. What we're seeing is obviously there's political pressure with 0:06:57.600 --> 0:06:59.400 a lot of rhetoric going on right now about the 0:06:59.440 --> 0:07:03.679 need to lower prices. We're seeing retailers like Walmart, like Target, 0:07:03.760 --> 0:07:07.279 like Krger, like Albertson's pushing back on package food companies. 0:07:07.480 --> 0:07:09.680 Who are you know, in some instances still looking to 0:07:09.680 --> 0:07:13.200 push through some selective price increases. So there is that 0:07:13.360 --> 0:07:16.760 tension that's happening kind of behind the scenes, but overall, 0:07:16.840 --> 0:07:19.800 we are seeing prices on the shelf starting to come down, 0:07:20.360 --> 0:07:23.680 and that spells relief for consumers. It's just a matter 0:07:23.760 --> 0:07:26.480 of how long it takes for them to actually recognize 0:07:26.480 --> 0:07:29.440 it and appreciate it and reward it with higher volumes 0:07:29.480 --> 0:07:30.080 that they're buying. 0:07:31.000 --> 0:07:32.480 What is or I. 0:07:32.480 --> 0:07:34.960 Guess, what's Target saying about the consumer? What are the 0:07:35.000 --> 0:07:38.000 other retailers that you talk to, Jenny, you follow, what 0:07:38.000 --> 0:07:40.480 are they saying about the consumer today? Because I'm I 0:07:40.480 --> 0:07:42.200 think as investors we kind of feel like we're getting 0:07:42.240 --> 0:07:43.520 mixed messages about the consumer. 0:07:44.520 --> 0:07:47.000 Yeah, I think when you're talking about the staple space, 0:07:47.040 --> 0:07:49.720 which is you know where these companies that I follow fall, 0:07:50.480 --> 0:07:54.120 it's that the consumer is not getting worse, they're not 0:07:54.160 --> 0:07:57.600 necessarily getting better, but they're sort of holding study. And 0:07:57.920 --> 0:07:59.840 you know, part of that is that we've had some 0:08:00.000 --> 0:08:02.800 consumers you kind of trade down into those middle tier 0:08:02.880 --> 0:08:06.160 stores or even to some of the discount stores in 0:08:06.240 --> 0:08:08.200 order to save a little bit of money. So the 0:08:08.240 --> 0:08:11.560 companies in this space are pretty well positioned because they 0:08:11.560 --> 0:08:14.240 do well no matter what the economic circumstances are, and 0:08:14.280 --> 0:08:18.040 I think that's showing through with the results. But they're saying, 0:08:18.080 --> 0:08:21.080 you know, consumers are spending, but it's still very thoughtfully 0:08:21.720 --> 0:08:24.320 and so the things that will attract them to spending 0:08:24.920 --> 0:08:29.000 is your merchandise mix, your newness, your convenience, the quality 0:08:29.600 --> 0:08:31.920 things that will then tempt them into into spending the 0:08:31.960 --> 0:08:33.880 dollars that they're managing very carefully. 0:08:34.679 --> 0:08:37.960 We only have about a minute left here, but you've 0:08:37.960 --> 0:08:40.640 talked a lot about how you're expecting more consumer packaged 0:08:40.720 --> 0:08:43.680 good companies to roll out promotions in the second half 0:08:43.720 --> 0:08:45.720 of the year, like buy one, get one free, buy one, 0:08:45.720 --> 0:08:47.280 get one fifty percent off. What are you seeing so 0:08:47.400 --> 0:08:49.440 far with that as far as what companies are saying 0:08:49.480 --> 0:08:50.760 on these earnings calls. 0:08:51.120 --> 0:08:54.640 Yeah, promotions have definitely accelerated, and we are back at 0:08:54.760 --> 0:08:56.880 sort of the levels that we were at before the pandemic. 0:08:57.880 --> 0:09:00.840 What's interesting is most of these companies say that they're 0:09:00.880 --> 0:09:04.000 able to be more precise so that it's not just 0:09:04.040 --> 0:09:06.240 a blanket offer like you used to see on the 0:09:06.559 --> 0:09:09.240 front of an insert or a mailer, but they're sort 0:09:09.240 --> 0:09:12.360 of targeting promotions to customers based on what they buy, 0:09:12.720 --> 0:09:15.719 so they're able to preserve a little bit of profitability 0:09:15.760 --> 0:09:19.240 and still offer higher discounts and so I think that's 0:09:19.280 --> 0:09:21.880 a pattern that we're expecting to continue through the second 0:09:21.920 --> 0:09:24.080 half and probably into twenty twenty five as well. 0:09:24.520 --> 0:09:26.079 A Jen, thanks so much for joining us, as I 0:09:26.080 --> 0:09:27.920 always really appreciate getting a few minutes of your time. 0:09:28.000 --> 0:09:31.160 Jen Bartashis, she's a senior analyst of Bloomberg Intelligence covering 0:09:31.200 --> 0:09:33.760 all the retail space, one of the real leaders on 0:09:33.800 --> 0:09:37.079 Wall Street providing research analysis on. 0:09:37.080 --> 0:09:38.000 The retail space. 0:09:38.080 --> 0:09:42.200 Talking about Tarje Today. 0:09:40.840 --> 0:09:44.720 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:09:44.800 --> 0:09:47.560 weekdays at ten am Eastern on Apple car Playing and 0:09:47.640 --> 0:09:50.520 Broud Auto with the Bloomberg Business app. Listen on demand 0:09:50.559 --> 0:09:54.880 wherever you get your podcasts, or watch us live on YouTube. 0:09:56.360 --> 0:09:58.880 Jess Meant sitting in for Alex Deale on Paul Sweeney. 0:09:58.880 --> 0:10:01.120 You're live here in the Bloomberg Interact Broker Studio, streaming 0:10:01.160 --> 0:10:03.600 live on YouTube as well. Jess, you know someplace I 0:10:03.640 --> 0:10:06.480 really want to go that is way off the beaten trail, 0:10:06.480 --> 0:10:08.120 and I probably couldn't even get anybody to go with me. 0:10:08.520 --> 0:10:09.600 Santa Fe, New Mexico. 0:10:09.840 --> 0:10:14.360 Oh, I think very very cool, and he's finding people 0:10:14.360 --> 0:10:16.560 from there, little Bloomberg Intelligence trip. 0:10:16.440 --> 0:10:19.240 Think so, But now I think I might have a reason. 0:10:19.360 --> 0:10:21.439 Our next guest is from Santa Fe, so we'll go 0:10:21.440 --> 0:10:24.079 out and visited our good friends at Thornberg Investment Management, 0:10:24.240 --> 0:10:27.959 Emily Level, she's a portfolio manager. How she ever got 0:10:28.200 --> 0:10:31.680 to Santa Fe, New Mexico. I'm sure there's a story there, Emily. 0:10:31.679 --> 0:10:34.840 Thanks so much for joining us from Santa Fe, New Mexico. 0:10:35.679 --> 0:10:38.040 What do you make in of this market here, Emily? 0:10:38.080 --> 0:10:41.520 I mean, boy, we started two weeks ago Monday, a crazy, 0:10:41.600 --> 0:10:43.440 crazy day, a big sell off of the market. Maybe 0:10:43.440 --> 0:10:45.800 some panic in the market, I guess, but boy, we 0:10:45.880 --> 0:10:48.240 seem to have found our sea legs since then, What 0:10:48.280 --> 0:10:49.240 do you make of this market? 0:10:50.440 --> 0:10:53.120 It's it's been really interesting, hasn't it. I mean, yeah, 0:10:53.160 --> 0:10:54.880 two two and a half weeks ago, it felt like 0:10:54.920 --> 0:10:57.760 the bottom was falling out, and you know, we've really 0:10:57.840 --> 0:11:00.839 seen a recovery in the strength of the market in 0:11:00.880 --> 0:11:03.160 the last couple weeks in return of that momentum factor, 0:11:03.600 --> 0:11:05.520 you know, which I think is a really important indicator 0:11:05.679 --> 0:11:09.360 of you know, where the market goes from here, and 0:11:09.360 --> 0:11:11.320 and some pretty decent data as well. I mean, I 0:11:11.400 --> 0:11:15.000 remember part of that weakness was some of the data 0:11:15.000 --> 0:11:17.520 that came out, and then since then we've had, you know, 0:11:17.640 --> 0:11:21.240 pretty decent data on retail figures, some better data on 0:11:21.360 --> 0:11:24.560 jobs numbers, and I think now everyone's looking ahead to 0:11:24.600 --> 0:11:27.280 the FED and then obviously what's going to happen in September, 0:11:27.400 --> 0:11:29.000 and I think it's just really going to be data 0:11:29.040 --> 0:11:29.800 dependent from here. 0:11:30.600 --> 0:11:33.000 And we were just talking about Emily how some of 0:11:33.000 --> 0:11:36.360 that BLS data on the annual revisions through the year 0:11:36.360 --> 0:11:38.120 into through March were delayed. But if you look at this, 0:11:38.240 --> 0:11:40.800 US employment rose about one point three percent in the 0:11:40.880 --> 0:11:44.079 year through March of this year, BLS is saying as well. 0:11:44.440 --> 0:11:47.400 And then also I was looking at Goldman Sachs was 0:11:47.440 --> 0:11:49.480 talking about how the release so far points to a 0:11:49.520 --> 0:11:52.320 downward revision in the realm of about seventy thousand jobs 0:11:52.360 --> 0:11:54.640 per month. So waiting for that full release here, but 0:11:54.679 --> 0:11:57.120 wanted to pick your brain because this is obviously backward 0:11:57.200 --> 0:12:00.520 looking type data. Also Goldman Sacks, their economic desk, was 0:12:00.559 --> 0:12:02.680 pointing out how when it comes to because they're looking 0:12:02.720 --> 0:12:06.199 at wages and claims data, so it won't include undocumented workers. 0:12:06.240 --> 0:12:08.400 So there's about potentially up to a million of them 0:12:08.440 --> 0:12:10.360 that wouldn't be included in this data. So when there's 0:12:10.360 --> 0:12:13.720 a lot of jitters about say the July slowdown in payrolls, 0:12:13.720 --> 0:12:15.920 which is obviously just one month of data. We haven't 0:12:15.920 --> 0:12:18.600 seen a trend yet, and looking at how the market's 0:12:18.679 --> 0:12:20.760 reacting s and P five hundred is still hired, it 0:12:20.760 --> 0:12:22.840 seems like options market wasn't really pricing in a big 0:12:22.880 --> 0:12:24.840 move here. So what's your kind of view here when 0:12:24.880 --> 0:12:27.560 you're looking at obviously more backward looking data and does 0:12:27.800 --> 0:12:29.960 really shape anything? And how much does it really tell 0:12:30.040 --> 0:12:31.640 us about the labor market? 0:12:32.480 --> 0:12:35.960 Well, I think, you know, from memory, seventy thousand a 0:12:36.000 --> 0:12:38.559 monthly revision of about seventy thousand jobs is a little 0:12:38.559 --> 0:12:41.199 bit on the lower end of or sorry, on the 0:12:41.240 --> 0:12:43.880 higher end of what the market was expecting. I had 0:12:43.920 --> 0:12:46.320 in my mind something between thirty and fifty thousand, you know, 0:12:46.400 --> 0:12:49.160 based on some of the estimates from the cell side. 0:12:49.440 --> 0:12:51.880 So a little bit weaker, I think, and you know, 0:12:51.960 --> 0:12:53.920 probably one of the larger revisions we've had in the 0:12:53.960 --> 0:12:57.319 last decade. So, you know, we definitely think that we're 0:12:57.320 --> 0:12:59.800 in the later stages of an economic slowdown. I think 0:12:59.800 --> 0:13:04.239 this data probably confirms that, you know, we're seeing employment 0:13:04.280 --> 0:13:07.800 growth slow in the US. I think that's normal considering 0:13:08.040 --> 0:13:10.680 the big moves in rates that we've had over the 0:13:10.720 --> 0:13:13.480 last two and a half years. I think it's unrealistic 0:13:13.520 --> 0:13:16.360 that you go from zero percent to five and a 0:13:16.400 --> 0:13:20.680 half percent rates without any changes in the labor market 0:13:20.760 --> 0:13:23.640 and you know, sort of aggregate demand figures. So I 0:13:23.640 --> 0:13:25.840 think it's reasonable. I think we're in the later stages 0:13:25.960 --> 0:13:28.080 of a cycle. We see that in some of the 0:13:28.120 --> 0:13:31.560 mixed consumer data that's coming out as well. I don't 0:13:31.640 --> 0:13:33.960 know that it's going to change anything about, you know, 0:13:34.040 --> 0:13:36.480 how the FED acts. I think they have to thread 0:13:36.520 --> 0:13:41.760 this needle between you know, being proactive and data dependent 0:13:41.840 --> 0:13:45.280 but not seeming to panic. And so I think it 0:13:45.400 --> 0:13:48.080 probably you know, we still get twenty five basis points 0:13:48.080 --> 0:13:50.720 of cuts in September. Probably we get a couple more 0:13:50.720 --> 0:13:52.880 through the end of the year. But I don't know 0:13:52.920 --> 0:13:56.320 that this data really changes dramatically what Powell is going 0:13:56.360 --> 0:13:58.920 to say on Friday. 0:13:58.960 --> 0:14:02.280 Emily, you are the portfolio manager of the Thornburg International 0:14:02.320 --> 0:14:05.840 Growth Fund. Where do you guys erect internationally? Where do 0:14:05.920 --> 0:14:08.520 you see opportunities outside of Santa. 0:14:08.240 --> 0:14:12.880 Fe Well, well, it's so introgused. You say that we're 0:14:12.880 --> 0:14:15.760 almost international here. We used to be part of Mexico, 0:14:16.559 --> 0:14:21.000 but one of the things that that we've noticed in 0:14:21.000 --> 0:14:23.600 the selloff is, you know, while the SMP is just 0:14:23.640 --> 0:14:28.200 a touch off of all time highs, international markets haven't 0:14:28.240 --> 0:14:31.400 recovered quite as significantly from the selloffs. So the Nike, 0:14:32.040 --> 0:14:34.320 you know, still off about ten percent from its all 0:14:34.360 --> 0:14:37.080 time highs. Some of the markets in Europe as well, 0:14:37.560 --> 0:14:40.680 and as growth investors were really focused on finding the 0:14:40.680 --> 0:14:43.480 opportunities that are going to be able to grow earning's 0:14:43.520 --> 0:14:46.560 power throughout an economic cycle. So we actually see some 0:14:46.680 --> 0:14:50.120 pretty interesting opportunities that have been provided to us by 0:14:50.240 --> 0:14:53.800 the recent volatility. So we still like the AI theme. 0:14:53.960 --> 0:14:56.880 We get a ton of exposure and high quality businesses 0:14:56.920 --> 0:15:00.280 that are key to this infrastructure build out outside of 0:15:00.320 --> 0:15:04.520 the United States, so companies like ASML in the Netherlands, 0:15:04.720 --> 0:15:08.920 like Disco in Japan, there are a number of these 0:15:08.920 --> 0:15:12.280 semi cop TSMC as well in Taiwan. You know, these 0:15:12.720 --> 0:15:16.360 semiconductor and semicap equipment companies are core to this build out. 0:15:16.720 --> 0:15:18.960 Another area that we really like and where we see 0:15:18.960 --> 0:15:21.840 some strong long term winners in international markets is in 0:15:21.880 --> 0:15:24.960 the healthcare space. So we have Novo Nordisk, we have Astrozenica. 0:15:25.320 --> 0:15:28.240 You know, these are really best in class high quality 0:15:28.280 --> 0:15:31.800 businesses that are now trading you know, well off their 0:15:31.960 --> 0:15:34.440 their all time highs, particularly in the tech space. And 0:15:34.480 --> 0:15:36.400 then the other thing that's kind of interesting about what's 0:15:36.400 --> 0:15:38.480 what we've seen in the last few weeks with you know, 0:15:38.520 --> 0:15:40.160 the recent moves and the pricing and at the FED 0:15:40.200 --> 0:15:42.720 cut is a weakening of the US dollar. And what 0:15:42.760 --> 0:15:45.680 we like to tell our clients, especially as international investors, 0:15:45.720 --> 0:15:47.600 as you know, you really might want to think about 0:15:47.680 --> 0:15:52.359 diversification outside of the US. The MAG seven has dominated, obviously, 0:15:52.600 --> 0:15:55.520 you know, in everybody's minds, and MAG seven's up thirty 0:15:55.520 --> 0:15:58.280 eight forty percent year to date. But we've got companies 0:15:58.360 --> 0:16:02.720 outside of the US investors diversification that are up even 0:16:02.760 --> 0:16:05.920 more than the MAG seven this year. We affectionately dub 0:16:06.200 --> 0:16:09.560 two companies in Latin America New and Melli the MAG 0:16:09.680 --> 0:16:12.320 two of Latin America, and they're up a combined fifty 0:16:12.360 --> 0:16:14.160 one percent in US dollar terms here today. 0:16:14.480 --> 0:16:16.360 And you were mentioning the s and P five hundred 0:16:16.480 --> 0:16:18.760 being a whisker away from that all time high if 0:16:18.760 --> 0:16:21.440 you look great right now, Paul, the SMP's about nine 0:16:21.480 --> 0:16:25.040 tenths of away from that July sixteenth closing high after 0:16:25.080 --> 0:16:26.840 falling as much as eight and a half percent after 0:16:26.920 --> 0:16:29.280 that drawdown, and we sell earlier this month. Suddenly I'm 0:16:29.320 --> 0:16:31.320 curious because I know you were mentioning how you were 0:16:31.360 --> 0:16:35.040 managing this growth fund. What are you advising clients to buy? 0:16:35.120 --> 0:16:39.320 What are you basically suggesting them to sell after we 0:16:39.360 --> 0:16:41.640 saw such a big drawdown but then a huge bounce back. 0:16:43.200 --> 0:16:45.520 Yeah, you know, it's been it's been a wild ride. 0:16:45.720 --> 0:16:48.360 As as we were commenting at the beginning of the show, 0:16:48.480 --> 0:16:52.200 we really focus on building a diversified portfolio. So we 0:16:52.240 --> 0:16:55.640 talk about, you know, diversifying those sources of growth, and 0:16:55.720 --> 0:16:57.960 definitely what we're looking for right now are what are 0:16:57.960 --> 0:17:00.920 the businesses that can grow earning's power regardless of what's 0:17:00.920 --> 0:17:03.280 happening with GDP. So we talked a little bit about 0:17:03.600 --> 0:17:06.000 AI and that copex build out. We think that's going 0:17:06.040 --> 0:17:09.479 to be pretty resilient and insulated, not totally immune, but 0:17:09.520 --> 0:17:12.000 pretty insulated from you know, what's going on in the 0:17:12.040 --> 0:17:16.040 broader macroeconomy. We also think healthcare and some specific areas 0:17:16.080 --> 0:17:19.480 of healthcare. So you know, we're big holders of Nobonordisk. 0:17:19.840 --> 0:17:23.840 We think GLP ones have a tremendous runway for growth. 0:17:23.960 --> 0:17:27.359 There are almost a billion people suffering from obesity today, 0:17:27.880 --> 0:17:29.760 and when you look at the number of people that 0:17:29.800 --> 0:17:32.240 have been treated by GLP ones for obesity at this point, 0:17:32.280 --> 0:17:34.800 we're in the tens of millions. So you know that's 0:17:34.800 --> 0:17:36.840 going to grow. That demand is going to grow regardless 0:17:36.840 --> 0:17:40.000 of GDP. Another area that we really like within healthcare 0:17:40.080 --> 0:17:43.679 is ocular health cataract surgery. A company Alcon that just 0:17:43.720 --> 0:17:46.800 reported yesterday. You know, they're the leaders in cataract surgery 0:17:46.800 --> 0:17:51.080 and contact lenses globally, and again, demand for cataract surgery 0:17:51.119 --> 0:17:54.479 that just grows with an aging population. So inasmuch as 0:17:54.480 --> 0:17:58.359 investors can get diversification of growth and earnings power that 0:17:58.440 --> 0:18:02.280 is dependent not on on GDP, we think that that 0:18:02.520 --> 0:18:04.840 is sort of a wise area to be focusing on 0:18:04.960 --> 0:18:07.400 at all times, but particularly now when you know there's 0:18:07.400 --> 0:18:09.080 a lot of mixed messages. I mean, we were talking 0:18:09.119 --> 0:18:11.960 earlier about the consumer in the United States. You've had 0:18:12.200 --> 0:18:16.639 pretty mixed data from companies in the consumer space in general, 0:18:16.680 --> 0:18:19.439 I think pointing to a consumer trading down looking for 0:18:19.520 --> 0:18:22.480 value for money, and so you know, we're really being 0:18:22.520 --> 0:18:24.960 cautious in the consumer space and focusing on those areas 0:18:24.960 --> 0:18:27.280 of growth where we find businesses that can continue to 0:18:27.320 --> 0:18:28.720 go their earnings power through a cycle. 0:18:29.320 --> 0:18:31.480 Hey, Emily, thanks so much for joining us. Really appreciate 0:18:31.520 --> 0:18:32.720 getting your thoughts this morning. 0:18:32.760 --> 0:18:33.320 Emily Levelle. 0:18:33.440 --> 0:18:37.840 She's a portfolio manager Thornburg Investment Management, joining us from 0:18:38.160 --> 0:18:39.560 Santa Fe, New Mexico. 0:18:39.600 --> 0:18:41.680 I'm putting that on the bucket list. I'm going there, 0:18:41.800 --> 0:18:43.800 let's do it. I'm going to add, really, it looks cool. 0:18:43.800 --> 0:18:45.840 I was while you were talking to Emily. 0:18:45.880 --> 0:18:48.240 I was googling all through about Santa Fe, New Mexic what, 0:18:48.400 --> 0:18:49.560 not paying attention at all. 0:18:49.800 --> 0:18:52.639 It looks very very cool out there in the desert. 0:18:52.960 --> 0:18:54.439 It's got a big arts community and so on. 0:18:54.480 --> 0:18:56.399 But wait till it gets a little bit cooler. 0:18:56.640 --> 0:18:59.160 Maybe yes, because it is in the middle of the desert, 0:19:00.040 --> 0:19:02.280 it seems like a pretty cool place to be. And 0:19:02.320 --> 0:19:04.640