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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amerie Hordernt. Join us each day
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Speaker 2: with stocks adding to the record breaking rally at leash
Speaker 2: to the vnfbny Wath recently raising her year end target
Speaker 2: for the SMP to eight K. Earnings took over from
Speaker 2: macro and driving markets. The capex cycle continues to support
Speaker 2: the economy and industrial sectors as hyper scatter spending as
Speaker 2: power and earnings of twenty percent of the SMP Alisa
Speaker 2: joins us now from more Aisia. Good morning, Good morning,
Speaker 2: what a massive run we've sin in just a few
Speaker 2: days on tech's phenomenal What are your turn in class?
Speaker 1: It's phenomenal.
Speaker 3: Look.
Speaker 4: We think the market ends higher at the end of
Speaker 4: the year, we're in prints at eight thousand. I think
Speaker 4: it's probably moving higher. The forward earnings growth rate right
Speaker 4: here of the S ANDP is actually thirty percent.
Speaker 5: So the multiples come down even now.
Speaker 4: It's you know, the market sort of tread water around that,
Speaker 4: you know, seventy five hundred range since mid May kind
Speaker 4: of stuck there as the market rotated, and we've, as
Speaker 4: you talked about, we've had these clearing events. There are
Speaker 4: major questions hanging over this market. The first of which
Speaker 4: is the war restarted. Oil prices are higher, yields are higher.
Speaker 4: Can the market rally if the ten years over four
Speaker 4: point five percent, which was really the bogie in this
Speaker 4: entire cycle. The answer is yes, it can. The second
Speaker 4: thing was is there ROI on hyper scale or spending?
Speaker 4: Are they just spending into oblivion funding the balance sheets
Speaker 4: of every other company but not themselves as they go
Speaker 4: freach pretty cashful negative turns out, actually there's a business
Speaker 4: case for it, and their cycle reaccelerated through the growth rate.
Speaker 4: So that was answered as well. And so you've gotten
Speaker 4: two major questions out of the way. And then the
Speaker 4: third is this an earnings bubble? And the answer is. No,
Speaker 4: it is not, because you've got accelerated growth rates for
Speaker 4: the spenders and that once you've answered that question, it's
Speaker 4: pretty much clear out there.
Speaker 2: If there is a clearing event and you've identified several
Speaker 2: it seems to be benefiting everybody at the moment, and
Speaker 2: we're trying to figure out when do we start to
Speaker 2: discriminate again, because much of this year you saw chips
Speaker 2: do well but software bring out poorly. You saw an
Speaker 2: inverse correlation between the hyperscalis and the chip players at
Speaker 2: times as well. That's what ultimately blew up the likes
Speaker 2: of Situational Awareness, who were very long cantwhere and very
Speaker 2: short software and things flipped pretty quickly in the last
Speaker 2: month or so. Where do you see things going from here?
Speaker 2: What does the leadership come from? Surely you don't believe
Speaker 2: that everything can take just keeps on rallying the way
Speaker 2: it has been.
Speaker 4: No, there's definitely going to be there's going to be
Speaker 4: more selection here. I mean, this was sort of clearing chars,
Speaker 4: like you went through fifty to two hundred days in
Speaker 4: the last two weeks, which you really needed to do
Speaker 4: to clear the charts of the deteriorating software company so
Speaker 4: we cleared it. I think for the most part it's
Speaker 4: likely to be from the hyperscalers and less on the chips,
Speaker 4: in part because the chips have come so far, and
Speaker 4: there is that lingering question. You know what you quoted
Speaker 4: here which I said, which is they're funding the balance
Speaker 4: sheets and the p and ls of twenty percent of
Speaker 4: the S and P very clearly. And we know that
Speaker 4: Marcus trade on the rate of change. At some point
Speaker 4: there's going to be a question, can you grow earnings
Speaker 4: one thousand percent? Are you growing earnings twenty percent instead,
Speaker 4: which is still excellent, but it's not growing one thousand percent.
Speaker 4: And there's a reason some of these chip companies are
Speaker 4: trading in the single digits because the street just doesn't
Speaker 4: see this going forever. And I think that's where you're
Speaker 4: going to start to see the differentiation.
Speaker 5: You still haven't cleared the parabolas. That's an issue.
Speaker 4: So I think you're probably getting it to the unloved companies.
Speaker 4: Since November one of last year, that whole panoply of
Speaker 4: large cab tech has been terrible underperformed the S and P.
Speaker 4: It's underperformed the rustle, it's underperformed international, it's underperformed emerging markets,
Speaker 4: and I think that gets a little that gets reverted
Speaker 4: to here. I think the chips while benefiting and the
Speaker 4: investment cycle can go for a long time, eighteen months, more,
Speaker 4: three years maybe, who knows. Actually eventually the growth rate
Speaker 4: is going to slow on the earnings for those companies.
Speaker 6: How much is the success on return on investment and
Speaker 6: the likes of hyperscalers and software going to come at
Speaker 6: the expense of open AI and anthropic And I say
Speaker 6: this because it could be a volatility inducing event when
Speaker 6: they try to IPO, if they try to IPO, given
Speaker 6: some of the noise about exactly what this model looks
Speaker 6: like and how much of a moat they have over
Speaker 6: something that's increasingly open model.
Speaker 4: Look, it's really it's very unclear. I mean, there are
Speaker 4: many people who think the models are converging. So the
Speaker 4: latest for one LLM over another, they're starting to look
Speaker 4: very similar. And I think that is the question for
Speaker 4: those those business models, right, Like, you know, if you
Speaker 4: can't differentiate, then you know what's the value. On the
Speaker 4: other hand, I know everybody uses all of them, and
Speaker 4: so they seem to be terrific. Also, if you just
Speaker 4: look at the revenue growth rate. I mean, the revenue
Speaker 4: is compounding for both those companies at an extraordinary We're
Speaker 4: talking close to one hundred billion dollars for each coming
Speaker 4: off of zero two three years ago. So the revenues
Speaker 4: are sounding compounding at a sounding rate. So I think
Speaker 4: I think they'll be successful.
Speaker 6: Do you think that the doors are still as wide
Speaker 6: open for IPOs for raising money in the equity and
Speaker 6: debt markets now as they were two months ago at
Speaker 6: a time when there still is a huge bill coming
Speaker 6: for all of the.
Speaker 5: Build out here.
Speaker 4: I think that we're going to have to see some
Speaker 4: of the lockups on some of the marquee IPOs to
Speaker 4: kind of clear the deck a little bit. You know,
Speaker 4: in the end, you want the IPOs to be successful
Speaker 4: and that break price. And if you break price within
Speaker 4: a week or two, that's an issue. And I think
Speaker 4: that's why you've seen it slow down in the calendar
Speaker 4: right and then you have a lot of SpaceX because
Speaker 4: you have to you have to get through the lockup.
Speaker 4: You have to get through the lockups here. I don't
Speaker 4: think there's too much capital coming to the market. The
Speaker 4: S and P is sixty trillion dollars. I don't think
Speaker 4: the IPOs are too big. I think there's a massive
Speaker 4: wall of capital coming to this, not just in the US,
Speaker 4: but globally. You know, we're hearing from our Iflow team
Speaker 4: there's a massive, massive buying of US equities globally because
Speaker 4: where else are you going to go with that wall
Speaker 4: of money?
Speaker 5: Other markets are simply not big enough.
Speaker 4: So I'm not worried about the dollar amount, but there
Speaker 4: is that marketing thing right where you want it to
Speaker 4: be successful, and I think the markets have to calm
Speaker 4: down a little bit.
Speaker 2: On the previous parted too alphabet again and ahead of
Speaker 2: some of this, the additional supply to your point on SpaceX,
Speaker 2: anthropic on the horizon, open ai, just the reporting we've
Speaker 2: seen around open ai potentially pushing things out twenty seven
Speaker 2: maybe beyond, I don't know, Yeah.
Speaker 6: And potentially because of some of the concerns around the
Speaker 6: capital rais with respect to their model, competitive pressure, et cetera.
Speaker 6: At the same time, it seems like a lot of
Speaker 6: people are pretty ambitious some of their voice.
Speaker 4: It looks like both are winning. Like it looks like
Speaker 4: everybody's winning. You know, it doesn't look like once, but they're.
Speaker 5: All being a prize and you get a prize.
Speaker 7: It's one of the last four days it's felt like
Speaker 7: in the stock market.
Speaker 5: I'll take it, you know, it's finish, good change.
Speaker 7: At least just going to see you. Thanks, one of
Speaker 7: the best. Appreciate it at lea should have been there
Speaker 7: of bn y wealth.
Speaker 2: Stay with us. More Bloomberg surveillance coming up after this.
Speaker 2: It's the latest this morning, the president out in the
Speaker 2: US economy as midterm primary results roll in In the
Speaker 2: crucial swing state of Michigan, the Senate Democratic primary between
Speaker 2: progressive Abdul al Said and Representative Hattie Stephens still too
Speaker 2: close to cool.
Speaker 7: Aaron A.
Speaker 2: Sabbataur of More Than Stanley, writing, we think Democrats hold
Speaker 2: a slight edge, but the Senate map remains a major
Speaker 2: structural headwind. Arianna joins us now for more and good morning,
Speaker 2: it's going to see you. How is the state set
Speaker 2: for this economy into November and what does it mean
Speaker 2: for voters at the moment.
Speaker 1: Yeah, a lot of things to unpack there. Obviously, the
Speaker 1: economic picture is one of an aggregate of different indicators, right,
Speaker 1: so if you look at things like inflation, we're expecting
Speaker 1: more disinflation throughout the remainder of this year. If we
Speaker 1: look at things like consumption, the overall sentiment is not great,
Speaker 1: where we're a little bit higher off of the low lows,
Speaker 1: but we don't think that really translates to spending intentions.
Speaker 1: We still see relatively robust consumption this year around two percent.
Speaker 1: We just revised that up from one point seven percent.
Speaker 1: You know, the labor market still relatively sideways. So all
Speaker 1: of that paints sort of a decent picture for the ECON.
Speaker 1: We call it a benign macro backdrop. That's not the
Speaker 1: only thing that matters to voters. Obviously, affordability a top concern,
Speaker 1: but aside from that, we see prediction markets, we see polling,
Speaker 1: we see the presidential approval rating, all signaling a more
Speaker 1: favorable environment for Democrats come November.
Speaker 2: I remember thinking that bind it would get battered in
Speaker 2: the midterms into that and event a few years ago,
Speaker 2: and it didn't happen. The white people thought it would.
Speaker 2: What's the lesson from them? And how might it apply
Speaker 2: to this situation?
Speaker 1: So twenty two to two is actually really similar to
Speaker 1: this midterm election if you think about it. We had
Speaker 1: an energy shock in February of that year, right, and
Speaker 1: then the structural the map the Senate was really what
Speaker 1: was important in that election. There were some anomalies. Remember
Speaker 1: we had the Roe v. Wade decision leaked, which energized
Speaker 1: turnout among specifically women and college educated voters. I think
Speaker 1: that is what allowed the Democrats to maintain the edge.
Speaker 1: But back to the structural sort of dynamics here, the
Speaker 1: map is really important, and with this progressive win we
Speaker 1: saw in Michigan last night, that makes it really challenging
Speaker 1: as a general election seat for Democrats to flip right,
Speaker 1: And that's going to be kind of the key point
Speaker 1: between Michigan, North Carolina, Georgia races for November one.
Speaker 5: Are the main issues and I'm thinking.
Speaker 6: Specifically of the hyperscalar build out and some of the
Speaker 6: energy plants, and this concern about the cost of living
Speaker 6: that could potentially be tied to artificial intelligence. How much
Speaker 6: is that present in some of the discussions with constituents.
Speaker 1: Extremely present, And this is probably the biggest wedge issue
Speaker 1: heading into the midterm elections. Right, we know AI is unpopular.
Speaker 1: We know specifically among younger voters so eighteen to twenty nine,
Speaker 1: something like sixty percent are worried about job displacement. When
Speaker 1: we look at the data center build out specifically, the
Speaker 1: concerns are really threefold. So first is quality of life, right,
Speaker 1: so no one likes to see large scale construction in
Speaker 1: their neighborhoods. Second is around water usage, which we find
Speaker 1: to be a little bit less well founded than some
Speaker 1: of the other concerns. And then of course electricity inflation
Speaker 1: and what you're paying for your utility bill. That is
Speaker 1: more a phenomenon on a regional level rather than national,
Speaker 1: but it is certainly part of the discussion and part
Speaker 1: of the reason we're seeing this real political constraint in
Speaker 1: building out these data centers.
Speaker 6: Well, so, how much of a political constraint will this be,
Speaker 6: because so far the White House has been behind a
Speaker 6: lot of these efforts and saying we have to maintain
Speaker 6: a dominant edge. How much will it constrain some of
Speaker 6: those policies that have enabled to build out so far.
Speaker 1: So, look, we think there are ways to mitigate it.
Speaker 1: We think there are certain concessions that hyperscalers and other
Speaker 1: companies can offer these communities, whether that's bonuses to local
Speaker 1: community engagement or whether it's some sort of a large
Speaker 1: load tariff or commitments to grid modernization. We think there's
Speaker 1: enough they can sort of promise and provide to facilitate
Speaker 1: the build out. But that's importantly why we think it's conditional.
Speaker 1: We don't think this is going to be a uniform
Speaker 1: kind of one size fits all approach across the country.
Speaker 1: And what that leads to is basically a bifurcation between
Speaker 1: regions that allow data center development and regions that do not.
Speaker 2: It's the left tripping up on the national stage. Are
Speaker 2: you seeing sort of the highly progressive members and I've
Speaker 2: noted a few. I've seen a few in the last
Speaker 2: twenty four hours struggle to articulate that view and being
Speaker 2: sucked into major issues that have nothing to do with
Speaker 2: local ground issues.
Speaker 7: If you notice the.
Speaker 1: Same thing, I think what you're seeing is an amalgamation
Speaker 1: of concerns among the voter base. And right now, if
Speaker 1: you look at the Democrat Party, there's no clear front
Speaker 1: runner for leadership, right so we don't have a clear
Speaker 1: person that's ahead of the other candidates when it comes
Speaker 1: to even the twenty twenty eight election. So I think
Speaker 1: Democrats are right now going through a really important phase
Speaker 1: of sort of self discovery, right so figuring out which
Speaker 1: policy paths are the ones that are going to resonate
Speaker 1: with voters. And remember this is an election that's the
Speaker 1: pretext to twenty twenty eight, so this is the important
Speaker 1: time to sort of have those debates and those discussions.
Speaker 1: I think it's experimentation and we'll probably see it on
Speaker 1: the Republican side as well once Trump steps back.
Speaker 7: Aarana, it's good to see you.
Speaker 2: Thanks for Thank you, Ariana Sabato there of Morkan Stanley
Speaker 2: stay with us mult Bloomberg surveillance coming up after this.
Speaker 2: Andrew holmholsts the City, writing this this morning. We do
Speaker 2: not see risks that the labor market is retiming and
Speaker 2: becoming a source of upward pressure on wages and prices.
Speaker 2: Andrew joined us Now for more. Andrew and Morning Morning
Speaker 2: sending the ADP number we'd found to take that view.
Speaker 3: Yeah, a little bit weaker on the ADP.
Speaker 8: It's a pretty volatile number, but I would say in
Speaker 8: the context of labor market data that's just in general
Speaker 8: been very volatile. So we had much stronger payrolls readings
Speaker 8: at the beginning of the year, had a weaker report
Speaker 8: in the month of June. We think we're store for
Speaker 8: some weaker reports upcoming.
Speaker 2: Good services, energy and labor. The sources of inflation LABE,
Speaker 2: it's not really been a source of inflation over the
Speaker 2: last twelve months, not a major one anyway. The inflation
Speaker 2: is coming from other places. Where'd you get confidence that
Speaker 2: that disinflation repath will continue and what does it come from?
Speaker 8: You know, I'm a lot more confident now than I
Speaker 8: was even a few weeks ago after we had the
Speaker 8: Gune inflation report. You look at these various underlying measures
Speaker 8: of inflation, and there's always an issue when we say
Speaker 8: which measure are you looking at right? This is part
Speaker 8: of what came up in the press conference with Chair
Speaker 8: of Warsh last week. But when you look at the
Speaker 8: various measures that we have of underlying inflation, most of
Speaker 8: them are telling us that inflation is slowing and it's
Speaker 8: not that far off of target. I know that's very
Speaker 8: different than a lot of people's perceptions of what's going on.
Speaker 8: But if you look at the actual data, you can
Speaker 8: look at a trend, mean, you can look at a median,
Speaker 8: you can look at core CPI. Core CPI inflation is
Speaker 8: not an esoteric measure of inflation. This is one of
Speaker 8: the typical measures that anybody would look at to try
Speaker 8: to assess what's going on with inflationary pressure. Two point
Speaker 8: six percent core CPI year on year, that's not far
Speaker 8: off of what would historically normally be historically normally be
Speaker 8: two point three percent, And we think we're going to
Speaker 8: see that two point three percent number in the next
Speaker 8: couple months.
Speaker 5: Why do you think it's going to continue going down?
Speaker 3: Right?
Speaker 6: This goes to the question of sufficiently restrictive and the
Speaker 6: faith of the path of some of the inflation reads.
Speaker 5: Why isn't it just a one off tied to.
Speaker 6: Energy prices and a couple of other just comparative reasons
Speaker 6: for the disinflation.
Speaker 8: Yeah, what's happening with headline inflation? That is a function
Speaker 8: of energy prices. They came up that boosted headline, they've
Speaker 8: come back down. That's going to drag on headline. If
Speaker 8: you look at the core measure that we've got a
Speaker 8: very weak reading for core CPI and core PCE in
Speaker 8: the month of June. That extreme weakness might not repeat,
Speaker 8: But what we saw in those readings if you looked
Speaker 8: at the underlying data was broad based lack of inflationary pressure.
Speaker 8: You see it across all categories of inflation is significant
Speaker 8: slowing in the month of June in particular shelter prices,
Speaker 8: and I think go out and look at house prices,
Speaker 8: look at rents.
Speaker 3: These enter official measures of inflation with a.
Speaker 8: Lag of about a year, maybe a year and a half,
Speaker 8: and they've been very slow.
Speaker 3: So those shelter pressures should stay slow. That's a key
Speaker 3: reason that we're going to have slower inflation going forward.
Speaker 6: How do you then understand the move that we've seen
Speaker 6: down at the front end in terms of yields are
Speaker 6: essentially pinned and the rise.
Speaker 5: And long end of the yields.
Speaker 6: It seems like the market is saying something very different
Speaker 6: to what you're saying.
Speaker 5: How do you interpret that?
Speaker 8: So if you look at the market, and this is
Speaker 8: another thing that again maybe very different than how some
Speaker 8: people are talking about this. The market is not worried
Speaker 8: about inflation in the US if I look at the
Speaker 8: market that assesses that most carefully, which is the market
Speaker 8: for inflation link security. So if you look at inflation
Speaker 8: break evens, if you look at inflation swaps, we are
Speaker 8: pricing inflation to be around two percent for the next
Speaker 8: two years. We're pricing inflation to be around two percent
Speaker 8: for the next ten years. So this idea that higher
Speaker 8: longer term yields have something to do with a lack
Speaker 8: of heed credibility and an expectation that inflation is going
Speaker 8: to run persistently higher. It's just not the case when
Speaker 8: you look at markets. The movement that we've had higher
Speaker 8: in long term yields is in real yields. It's not
Speaker 8: in the inflation component. It's in the real yield component.
Speaker 8: And why are they higher. It's what you've been talking
Speaker 8: about all morning and apparently with your children at bed time,
Speaker 8: which is and the deficit in this country.
Speaker 2: Our inflation expectations anchored because people still believe this Fed
Speaker 2: will hike. If they believed your story, I wonder whether
Speaker 2: it'd be.
Speaker 8: We have a probability of a hike that's priced in right.
Speaker 8: The FED came into July, there was a thirty percent
Speaker 8: probability that they were going to hike coming into July.
Speaker 8: At some point there was a fifty percent probability that
Speaker 8: they were going to hike in July. The Fed declined
Speaker 8: to hike in July. We got a very small movement
Speaker 8: higher in inflation break events, but.
Speaker 3: Staying really at low levels.
Speaker 8: So what I saw there was an indication that the
Speaker 8: market doesn't need the FED to hike one time or
Speaker 8: two times, which is essentially was priced in right. One
Speaker 8: or two hikes from the FED. That's not going to
Speaker 8: be determinative for inflation. The trend in inflation is not
Speaker 8: going to be significantly affected by the FED being fifty
Speaker 8: basis points high or fifty basis points lower. If we
Speaker 8: have a big inflation problem in this country, if we're
Speaker 8: accelerating in inflation, you would need rates one hundred basis
Speaker 8: points higher, one hundred and fifty basis points higher.
Speaker 2: I don't think any of us suggesting we have a
Speaker 2: big inflation problem with regards to where the index the
Speaker 2: target is right now, but it's the problem. It's been
Speaker 2: five years above target, and is that not evidence? So
Speaker 2: they're not sufficiently restrictive.
Speaker 8: You don't restore the two things on that one. Number one,
Speaker 8: you don't restore credibility, And I agree credibility has been damaged. Right.
Speaker 8: This is a FED that said inflation is transitory, and
Speaker 8: five years later we still have above target inflation. So
Speaker 8: clearly there's been a hit to credibility. You don't re
Speaker 8: establish that by hiking just for the point of hiking
Speaker 8: and showing that you can be tough in the face
Speaker 8: of even many underlying inflation measures that are slowing. You
Speaker 8: establish credibility by watching the data and affecting the appropriate
Speaker 8: policy to bring inflation down. Now, the question is do
Speaker 8: we have the appropriate policy to bring inflation down? If
Speaker 8: you step back and you don't just look at the
Speaker 8: last six months, look at the last year of data,
Speaker 8: look at the last two years. Inflation is slow, the
Speaker 8: unemployment rate has come up. If you look at the
Speaker 8: housing sector, we clearly have restrictive rates for the housing sector.
Speaker 3: So I do think that we still have rates.
Speaker 8: That are modestly restrictive here, and I think a lot
Speaker 8: of FED officials actually think that also. Their voices are
Speaker 8: not as loud right now. That has not been the
Speaker 8: market narrative. But hiking twenty five to fifty basis points,
Speaker 8: I don't think we'll do anything to restrict.
Speaker 2: Mode is different to sufficient you'd acknowledge that modestly restrictive
Speaker 2: is different to being sufficiently restrictive to get inflation back
Speaker 2: to target.
Speaker 7: Do you think with sufficiently restrictive.
Speaker 8: Definitely sufficiently restrictive most measures of underlying inflation are basis
Speaker 8: points away from target, and in a couple months it's
Speaker 8: going to look even better than that.
Speaker 5: What's the argument for cutting rates?
Speaker 6: If you don't think that there's going to be much
Speaker 6: accomplished by hiking rates, what's going to be accomplished by
Speaker 6: cutting them?
Speaker 8: Yeah, so on the inflation side, that would really be
Speaker 8: the argument for not raising rates. If we're slowing down
Speaker 8: towards target inflation, then that's the reason not to raise rates.
Speaker 3: Cutting rates have to have some concern.
Speaker 8: About the labor market or about activity, and there are
Speaker 8: no concerns right now. Right so we're kind of looking
Speaker 8: at a FED and a market that's treating this and
Speaker 8: kind of a single mandate context because we just don't
Speaker 8: have a concern on the labor market or on activity
Speaker 8: we think we're going to see in the data because
Speaker 8: of a residual seasonal pattern that we have in the
Speaker 8: labor market data, softer labor market data over the next
Speaker 8: several months. We obviously had a softer reading for the
Speaker 8: month of June. If the unemployment rate starts moving up again,
Speaker 8: then it will no longer just be a question of
Speaker 8: what's the right rate to set for inflation. Then you'll
Speaker 8: be concerned about the labor market.
Speaker 6: What would it take in the data for you to
Speaker 6: just say that the Fed's going to be on hold
Speaker 6: with no more cuts.
Speaker 8: Unemployment rate that just stays where it is, snow one
Speaker 8: bounces around, you know, four three four four. Then they
Speaker 8: could be cutting eventually, but this is probably you know,
Speaker 8: sometime next year, maybe deep next year, because then you know,
Speaker 8: back to John's point for credibility, you might as well
Speaker 8: just stand pad and say, look, I want to be
Speaker 8: indicating that I'm super credible here inflation.
Speaker 3: We have no issue in the labor market.
Speaker 8: So I'm just going to hold things modestly restrictive until
Speaker 8: I see that we're at two percent inflation.
Speaker 3: And we're not there yet.
Speaker 7: What's your guest for Friday?
Speaker 3: One hundred and.
Speaker 8: Fifteen thousand on the payroll So I think it's a
Speaker 8: decent reading on the payrolls number. We had a much
Speaker 8: softer number in the month of June, which came through.
Speaker 8: The thing to watch for here is actually there are
Speaker 8: two things. One is, do we get a revision down
Speaker 8: to the June number? Further revision down that's what we've
Speaker 8: seen in previous Your lives and the unemployment rate. We
Speaker 8: have just picking up to four point three percent. Last month,
Speaker 8: that participation rate fell by three tenths of a percentage point.
Speaker 8: If that moves back up, unemployment can pop up much higher.
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