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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Apple car Playing and Broyd Auto with the

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Speaker 1: Bloomberg Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: But we're also going to talk about jobs and the

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Speaker 2: economic fundamentals and all that fun stuff. And for that,

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Speaker 2: Michael McKee is joining us. Bloomberg Economics. No, you're not

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Speaker 2: Bloomberg Economics. What your policy correspondent?

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Speaker 3: Well, economics.

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Speaker 4: It is a.

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Speaker 5: Title like that's the.

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Speaker 4: Thing red Sox analysts for I mean there's that too.

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Speaker 2: I gotta ask, are you surprised about the depth of

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Speaker 2: the reaction, like people trying to talk about a fifty

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Speaker 2: bases point cut in September, terminal rates being revised, lower

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Speaker 2: the bond rally.

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Speaker 6: I don't.

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Speaker 3: I don't ever get surprised by market reactions. I love

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Speaker 3: it said this. I've said this before and I'll say

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Speaker 3: it again. The fat has a reaction function. The markets

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Speaker 3: have an overreaction function, and they always go too far,

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Speaker 3: too fast, and then they come back a little bit

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Speaker 3: to sanity at some point. Because you get a hurt

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Speaker 3: instinct when some kind of news breaks and the markets

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Speaker 3: were leaning towards a bad report, and so this just

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Speaker 3: you know, pushed them in a direction they already wanted

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Speaker 3: to go. And I'll leave it to smarter people like

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Speaker 3: just to tell you why they want to do that,

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Speaker 3: but and whether or not lower rates are going to

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Speaker 3: be good for equities or not. But at this point,

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Speaker 3: I think it's today you just kind of look past

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Speaker 3: what happened in the markets, and Monday.

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Speaker 1: You come back.

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Speaker 5: Can't do that, this is the fun part for us.

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Speaker 3: But go ahead, well Monday, Monday, you come in and

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Speaker 3: you start thinking about what does this mean for the

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Speaker 3: overall economy. I'm telling everybody takes Saturday and Sunday just.

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Speaker 7: Well.

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Speaker 8: Have actually Austin Goulsby will be on Bloomberg Television noon.

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Speaker 8: I believe that's on our Eco go page here. So

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Speaker 8: when it comes to someone like that, who's obviously on

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Speaker 8: the federal reserve, what are you looking to potentially hear

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Speaker 8: from him? And what do you want to kind of

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Speaker 8: gauge here now coming out of obviously the Fed decision,

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Speaker 8: and because he at the beginning of July, he was

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Speaker 8: kind of one of the first people that really, we

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Speaker 8: know he's dubbish, but he started indicating that he felt

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Speaker 8: like cuts were coming pretty soon. Yeah.

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Speaker 3: Well, the chairman was very certain during his news conference

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Speaker 3: that everybody was in agreement that they should pause, and

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Speaker 3: I'm wondering if that's exactly true or if he was

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Speaker 3: maybe seeing what he wanted to see. And obviously, the

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Speaker 3: market is saying today that the FED made a mistake,

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Speaker 3: So do they think how do they defend themselves to

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Speaker 3: the idea of a mistake? And does this lock in September?

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Speaker 3: And obviously what do they think of a fifty basis point.

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Speaker 3: I don't think it's something that they want to do,

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Speaker 3: so I don't think that'll be a big deal.

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Speaker 2: I mean, I know that the markets overreact and the

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Speaker 2: FED onder I get all that, But if the market

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Speaker 2: has to price in a fifty bases point cut or

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Speaker 2: even an intermeting cut, then the FED has the enviable

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Speaker 2: job of having to walk back expectations to kind of

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Speaker 2: get that out of the market.

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Speaker 5: How did they do that when they also have to

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Speaker 5: acknowledge like things are going to beeker.

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Speaker 3: That's why they don't want to do that. They they

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Speaker 3: wouldn't do an intermeding cut unless there was some real

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Speaker 3: collapse in the economy. And we did get one hundred

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Speaker 3: and fourteen thousand jobs. It's what the Fed had been

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Speaker 3: looking for. They'd been looking for a more gradual ratchet down.

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Speaker 3: This was a fairly dramatic move, but it's not out

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Speaker 3: of It's not an abnormal result for the economy. And

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Speaker 3: the unemployment rate is four point three percent and that's

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Speaker 3: still historically low. So yes, things deteriorated, perhaps more quickly

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Speaker 3: than they anticipated, but they're not going to panic at

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Speaker 3: this point.

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Speaker 2: Okay, Mike, Actually stay with us, Hank tight for this segment,

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Speaker 2: we're going to bring in Jonny Bailey. She's chief workforce

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Speaker 2: analyst at employee Bridge, joining us now from Florida. Jony,

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Speaker 2: give us your take on the numbers, Like they weren't terrible.

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Speaker 2: I understand the job market's slowing, but what's your take.

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Speaker 9: If you can see that we have a cooling job market,

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Speaker 9: you know, and it's been coming for some time, you know,

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Speaker 9: over the last really even eighteen months. Most of the

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Speaker 9: job growth has been in the healthcare sector, in the

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Speaker 9: government sector.

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Speaker 10: And in leisure and hospitality.

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Speaker 9: But there's been many sectors that haven't been adding that

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Speaker 9: robust job growth. Manufacturing, professional business services has been struggling.

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Speaker 9: The temporary help sector has really been struggling. So I

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Speaker 9: think we're seeing more of the same. But this report

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Speaker 9: showed some signs of real weakening when you look at

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Speaker 9: the unemployment numbers. That is certainly what concerns me the most.

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Speaker 9: That we tipped up to four point three percent. We're

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Speaker 9: up to seven point one million unemployed people in the

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Speaker 9: United States and right now, I can't tell you that

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Speaker 9: that's going to change very quickly. I think we're going

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Speaker 9: to see more of that for the rest of this year.

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Speaker 8: What if any When it comes to inflationary costs or

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Speaker 8: driving people to go back into the workforce.

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Speaker 9: Oh, I think you are spot on when it comes

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Speaker 9: to that. We are seeing people enter back into the workforce,

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Speaker 9: so that that is a good sign. Even labor participation

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Speaker 9: tipped up to sixty two point seven percent, so people

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Speaker 9: are coming back. They have to come back to work,

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Speaker 9: and that is due to inflationationary costs. You know, we're

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Speaker 9: seeing people not only you know, need both parents maybe

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Speaker 9: to work in a family, but some taking second jobs,

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Speaker 9: looking for part time work or maybe gig work to

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Speaker 9: kind of supplement their incomes. So yes, unemployment will continue

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Speaker 9: to grow as we start to see more people participating

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Speaker 9: in the overall workforce. And unfortunately, job openings are starting

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Speaker 9: to decline month over month. I think we're down to

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Speaker 9: about eight point one million job openings and now we

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Speaker 9: have seven point one million unemployed workers. So you know,

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Speaker 9: there's still more jobs than there are unemployed people, but

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Speaker 9: that gap is really narrowing, and it could reverse that.

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Speaker 9: We will have more unemployed people than we do have

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Speaker 9: open jobs in the US in the next couple months.

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Speaker 3: One thing we saw in the report today that would

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Speaker 3: be ordinarily even a red flag is a drop in

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Speaker 3: temporary health services hiring. Basically, are you finding that companies

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Speaker 3: don't want to add anybody at this point?

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Speaker 9: Yes, you know, unfortunately the temporary help sector has been

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Speaker 9: hit the hardest over the last two years.

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Speaker 10: We've been seeing declines.

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Speaker 9: In you know, job growth for gosh, I think since

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Speaker 9: March of twenty twenty two, so again this month is concerning.

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Speaker 9: There was a loss of twenty two thousand jobs in

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Speaker 9: this sector, and you know, it really points to employers

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Speaker 9: are going to let their temporary workers go first and

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Speaker 9: try to hold on to their permanent staff before they

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Speaker 9: need to lay them off, and it has a profound

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Speaker 9: impact on the overall temporary health industry. Has been a

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Speaker 9: softness across the board. Certainly, I see it at Employee Bridge.

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Speaker 9: I'm also the chair of the board for the American

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Speaker 9: Staffing Association, and I can tell you the entire industry

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Speaker 9: is feeling it across the board.

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Speaker 10: We're hopeful, you know.

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Speaker 9: As we look at coming into the holiday and the

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Speaker 9: peak season, that employers are going to start adding to

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Speaker 9: their payrolls and hopefully twenty twenty five is a much

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Speaker 9: better year, but it would point to a challenging economic

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Speaker 9: climate right now and certainly concerns because employers are not

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Speaker 9: adding temporary workers, you know, to their payrolls.

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Speaker 8: Where are we still seeing bright spots within the labor force?

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Speaker 9: Jny, Well, you know, bright spots, I will say, can

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Speaker 9: still be in that healthcare sector. There's a tremendous amount

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Speaker 9: of job growth in healthcare and I expect those trends

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Speaker 9: to continue.

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Speaker 10: You know, we have been seeing construction jobs start to

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Speaker 10: come back, and.

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Speaker 9: If you look at the horizon, I do expect that

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Speaker 9: we will see a resurgence in manufacturing. We're just not

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Speaker 9: seeing that right now, but many plants are being you

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Speaker 9: know built across the country and those jobs will come

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Speaker 9: back in the US. I also think if you look

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Speaker 9: at the breakdown of unemployment, certainly having education, college degree,

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Speaker 9: you know, put you in a much better position.

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Speaker 10: My concern in this.

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Speaker 9: Month's report was actually those lower wage jobs, you know,

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Speaker 9: really not coming back and being eliminated. And when you

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Speaker 9: look at unemployment, we saw the largest jump in unemployment

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Speaker 9: in twenty five years of age and older. For individuals

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Speaker 9: that have not completed their high school diploma. It went

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Speaker 9: almost it went up almost a full point. We saw

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Speaker 9: that up to six point seven percent. So those low

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Speaker 9: wage jobs are certainly being impacted. College degree it's still

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Speaker 9: down to about three and a half percent unemployment, so

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Speaker 9: certainly lower than that four point three percent, So education

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Speaker 9: skills experience, those jobs are still out there and in demand.

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Speaker 3: Is this something the situation we have now with employment

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Speaker 3: that a FED rate cut is going to fix?

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Speaker 10: It will certainly help, you know.

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Speaker 9: I think most employers right now are being very focused

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Speaker 9: on you know, cost containment and where they're investing, and

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Speaker 9: with where interest rates are right now, you know, their

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Speaker 9: purse strings are just a bit tighter. So when when

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Speaker 9: we talk to our customers at employee Bridge and certainly

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Speaker 9: employers across the board, you know, they are saying that

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Speaker 9: they are waiting, you know, for the FED to cut

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Speaker 9: rights and that they're hopeful that when that happens, things

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Speaker 9: will start to pick up and they will start to

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Speaker 9: make those hiring decisions.

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Speaker 10: Again and move forward.

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Speaker 9: So I would say, from everything we're hearing on the

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Speaker 9: front lines, yes, that will help.

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Speaker 8: You know, Jenny willly have about twenty seconds left. But

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Speaker 8: we've seen when it comes to women in entering the

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Speaker 8: labor force coming out of COVID, it's been a bit

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Speaker 8: of a struggle, more so compared to prior to that.

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Speaker 4: But what do we sing on that front?

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Speaker 9: Yeah, you know, I think that there's more flexibility for

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Speaker 9: women in the workforce right now than there's probably ever

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Speaker 9: been before. Employers want to hire, you know, a device workforce,

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Speaker 9: they want women to come back, and they're offering more flexibility.

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Speaker 9: So options are out there, and I do think we're

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Speaker 9: seeing women enter back as well.

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Speaker 8: Great to hear Jenny Bailey, chief Work Analysts here and

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Speaker 8: apparently the chair of the American Staffing Association. Of course,

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Speaker 8: Mike McKee over our own at Bloomberg.

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Speaker 1: Here you're listening to the Bloomberg Intelligence Podcast. Catch us

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Speaker 1: live weekdays at ten am Eastern on applecar Play and

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Speaker 2: Intelligence Radio, Alex Steele, Paul Sweeny's off on the beach

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Speaker 2: just mentioned is here, as well as John Tucker. Yeah,

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Speaker 2: we haven't seen those chunky moves in the bond market

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Speaker 2: in the front end since guess when, oh twenty twenty

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Speaker 2: three March, the less VB action there, So let's for

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Speaker 2: a perspective on like the type of sort of panic

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Speaker 2: buying if you will, coming into the front end.

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Speaker 8: Also, the Atlanta Fed GDP now for the third quarter

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Speaker 8: coming in around two and a half percent, and then

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Speaker 8: the ECFS you function in the terminot's where you can

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Speaker 8: see the economic forecast for GDP annually as well as

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Speaker 8: quarter over quarter, still seeing strong growth here. So I

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Speaker 8: know people are potentially spooked by this job number coming

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Speaker 8: in below one hundred and fifty thousand, But again, when

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Speaker 8: you're looking at some of the economic projections here, still

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Speaker 8: pretty strong growth here overall for the US.

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Speaker 2: It's such a good perspective, which begs the question, then

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Speaker 2: when you have a sell off that's triggered by that

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Speaker 2: growth scare, what do you do then when the underlying

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Speaker 2: data is still okay? Well Matt Stuckey is chief portfolio

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Speaker 2: manager of equities at Northwestern a mutual Wealth Management and

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Speaker 2: he joins US now, So to that point, when you

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Speaker 2: see the NASDAC off three percent, do you buy the dip?

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Speaker 11: Well, good morning, thanks for having me. Look, I think

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Speaker 11: before you rush into any kind of buying and selling

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Speaker 11: activity on a day like today, revisiting kind of where

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Speaker 11: you're at from a risk allocation is probably where you

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Speaker 11: need to start. And so if your way underweight risk assets,

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Speaker 11: maybe today's a better entry point. But again, I think

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Speaker 11: it's it's important to always kind of center whatever trading

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Speaker 11: activity you make based on kind of your long term

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Speaker 11: risk tolerance, because that's likely to be tested in the

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Speaker 11: coming months.

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Speaker 8: So how are you advising clients to position? What are

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Speaker 8: you suggesting that they buy? What are you suggesting that

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Speaker 8: they sell? When it comes to equities.

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Speaker 11: With inequities, Look, I mean we we have been somewhat

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Speaker 11: vocal about our concern about concentration building in the S

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Speaker 11: and P for the last year or so, and and

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Speaker 11: to kind of counteract a little bit of that growing risk,

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Speaker 11: you know, we've recommended clients kind of use a little

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Speaker 11: bit of a value tilt within their portfolio in the

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Speaker 11: S and P space, maybe an equal weighted exposure as

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Speaker 11: well to mix in some diversification. You know, we also

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Speaker 11: have been somewhat positive about the optionality that we think

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Speaker 11: exists in US small caps and midcaps, where you know,

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Speaker 11: from evaluation perspective prior to July, you know, things were

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Speaker 11: fairly compressed and dislocated versus the S and P, and

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Speaker 11: we thought it could work in a variety of economic outcomes,

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Speaker 11: one being a mild recession which kind of catalyzes some

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Speaker 11: aggressive FED rate cuts, or you know, a soft landing

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Speaker 11: scenario which still allows the FED to cut maybe just

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Speaker 11: by less that broadens out the economic participation into its economy.

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Speaker 12: You know.

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Speaker 11: At this point now, though, you know, I think we

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Speaker 11: got to have longer term horizon for that to play out,

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Speaker 11: because it does look like incrementally the labor market is

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Speaker 11: accelerat to the downside, and we're likely to be in

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Speaker 11: some chocolate of waters here for the next few months.

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Speaker 2: So you mentioned the Russell, and now we're looking at

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Speaker 2: the Rustle down over four percent. We haven't seen this

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Speaker 2: kind of slide since June of twenty twenty two.

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Speaker 5: I mean, I appreciate that it's looking for value. Is interesting.

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Speaker 5: How do you manage? Then we had a minor run up.

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Speaker 2: And then here we are down again, the most in

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Speaker 2: two years.

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Speaker 11: Well, you know, we're talking about our within equity allocation.

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Speaker 11: I think it's important for your listeners to understand that

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Speaker 11: within the global context of our portfolios, our aggregate equity

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Speaker 11: position has been underweight with a preference for high quality

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Speaker 11: fixed income, and so we're thinking about a little bit

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Speaker 11: of offense in that part of the equity portfolio because

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Speaker 11: we have a defensive position in fixed income, which is

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Speaker 11: in a day like today, you know, really proving it's

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Speaker 11: worth from a diversification perspective. So, you know, our message

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Speaker 11: to CLI clients on days like today is that this

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Speaker 11: is likely to be the environment we deal with for

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Speaker 11: the next few months of volatility back and forth, especially

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Speaker 11: in areas like small caps, which not only have higher cyclicality,

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Speaker 11: but also higher beta associated with them.

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Speaker 4: Matt.

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Speaker 8: Something I'm curious about is whether or not, especially because

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Speaker 8: PAL did signal that rate cuts could come as soon

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Speaker 8: as that September eighteenth rate decision here. But Bank of

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Speaker 8: America actually had some interesting data that they put in

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Speaker 8: their flow show for Michael Hartnett this morning, where the

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Speaker 8: S and P five hundred has advanced more than thirty

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Speaker 8: percent in the past nine months, compared to an average

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Speaker 8: gain of just two percent and a dozen prior occasions

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Speaker 8: since nineteen seventy nine leading up to a first rate cut.

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Speaker 8: So I'm kind of wondering when you have such a

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Speaker 8: big run like that in risk assets, how much of

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Speaker 8: that was they sell the news, especially because of small caps,

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Speaker 8: and that run up to what FED was signaling there, Matt.

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Speaker 11: You know, I thinking through kind of prior cycles and

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Speaker 11: kind of connecting that to what the FED has been doing. Look,

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Speaker 11: it's not uncommon prior to the first rate cut for

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Speaker 11: for markets to corrally and make new all time highs. However,

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Speaker 11: to your point earlier about you know, the sell the

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Speaker 11: news kind of message here. You know, rate cuts when

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Speaker 11: they happen for you know, a response to a decline

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Speaker 11: macroeconomic situation which looks like you know, indeed, if it

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Speaker 11: starts in September, that's what the FED is going to

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Speaker 11: be using as the rationale have a very different equity

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Speaker 11: outcome versus rate cuts that are company with the soft landing,

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Speaker 11: and so we'll have to wait and see which economic

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Speaker 11: outcome we get, but it certainly kind of ratchets up

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Speaker 11: the risk profile and the skew of outcomes if we've

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Speaker 11: had so much for a run up into that first cut,

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Speaker 11: And from my perspective, it is somewhat of evaluation driven

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Speaker 11: rebalance there.

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Speaker 2: When you mentioned fixed income, where on the curve do

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Speaker 2: you think still provides the most value on a price

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Speaker 2: appreciateciation basis?

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Speaker 11: Sure, I mean this is kind of the more recent

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Speaker 11: kind of area that we've changed our fixed income allocation.

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Speaker 11: You know, for the last four or five years, we've

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Speaker 11: been under rate duration wise. During twenty twenty three, we

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Speaker 11: moved our duration back into kind of alignment with the

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Speaker 11: Bloomberg Barclays Act in between that you know, five and

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Speaker 11: six kind of year range, and most recently a couple

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Speaker 11: of months ago, we extended even further to an access

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Speaker 11: duration position in our fixed income portfolios. With a very

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Speaker 11: high credit rating of double a plus in that position.

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Speaker 11: And we accomplish that just with a small position in

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Speaker 11: TLT in our model portfolios, which moved our duration out

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Speaker 11: a year or so. And you know, the thought there

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Speaker 11: is is that, you know, as the Fed is starting

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Speaker 11: to ease policy, as inflation is less of a headwind

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Speaker 11: to fixed income pricing, you know, this is a position

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Speaker 11: that's a really nice diversify in an environment like we're

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Speaker 11: dealing with today.

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Speaker 8: All Right, Matt, thanks so much for joining us. The

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Speaker 8: great getting your perspective, especially on a volatile day like today.

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Speaker 8: So Matt Stucky, chief portfolio manager and of equities at

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Speaker 8: Northwestern Mutual Wealth Management, joining us on zoom from Milwaukee, Wisconsin.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Appo card playing Android

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 5: So let's get to the economic part of this.

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Speaker 2: Bill Lee is chief economist in Milkan Institute and he

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Speaker 2: is joining us. Now, Hi, Bill, the market is taking

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Speaker 2: this job. Support is like a total disaster, like a

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Speaker 2: complete growth scare, is that the right way of looking

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Speaker 2: at it.

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Speaker 13: I spend my entire career warning people not to overreact

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Speaker 13: to one data point, and it looks like the markets

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Speaker 13: that continuing to do that market is never disappointed and

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Speaker 13: always overreacting in right now, all I can say is

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Speaker 13: that how can you have a recession when the entrepreneur

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Speaker 13: rate is between four and four and a half, which

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Speaker 13: most people think is where the natural rate is supposed

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Speaker 13: to be.

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Speaker 6: The second thing is that the.

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Speaker 13: Numbers are showing that the unapployment rate has gone up

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Speaker 13: because the labor force has grown more than the population.

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Speaker 13: The layoffs are starting to mount up this month, but

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Speaker 13: this is the first month of layoffs that we've seen,

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Speaker 13: So for me, I think the recession calls and your

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Speaker 13: fears in the markets are way overreaction.

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Speaker 8: And I'm glad you brought that up, Bill, because Alex

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Speaker 8: and I earlier were talking about the latest alien fed

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Speaker 8: GDP NOW number for the third carter coming in at

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Speaker 8: two and a half percent, and as you know that

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Speaker 8: those numbers can be volatile, but still, when you're looking

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Speaker 8: at kind of the trajector you're here for, economic growth

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Speaker 8: still looks pretty solid when you're talking about the dynamics

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Speaker 8: within the labor market and particularly the participation rate.

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Speaker 4: How much does that plan into.

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Speaker 8: Especially when you see a number drop like that, as

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Speaker 8: far as who's coming into the workforce and who's leaving it, that's.

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Speaker 13: Really critical, Jess, And I'm glad you brought that up,

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Speaker 13: because as much as people point to the SAM rule

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Speaker 13: and the unopplanneer rate rising as being a recession indicator,

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Speaker 13: a lot of indicators and historical relationships like that have

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Speaker 13: just not worked so well long as the you'll curb

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Speaker 13: been inverted, for example, and people have said, oh my god,

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Speaker 13: that's always a good indicator that in a receect. So

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Speaker 13: so I think we have to look at carefully at

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Speaker 13: that composition of the labor force. And what we see

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Speaker 13: is that immigration and other factors have and people just

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Speaker 13: wanted to work now because it's easier to get to

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Speaker 13: work uh, and there are more jobs readily available, so

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Speaker 13: people are encouraged to participate and try to try to

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Speaker 13: try to get more jobs.

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Speaker 6: Now.

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Speaker 13: The bad part about this is that consumers have been

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Speaker 13: spending like crazy, as we know, uh, and savings rates

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Speaker 13: have been dropping. Now the rich people have been dipping

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Speaker 13: into savings. But you know, median worker and the lower

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Speaker 13: half the population have really been resilting to a lot

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Speaker 13: of credit in order to make ends meet, and and

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Speaker 13: and part of that making ends meet is getting a

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Speaker 13: second and third job, because most jobs that are available

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Speaker 13: right now are leisure, hospitality, and sectors in the economy

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Speaker 13: where they just just aren't that high. So for me,

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Speaker 13: the real problem out there is the growing bifurcation in

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Speaker 13: the population of rich and poor. And I think we're

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Speaker 13: going to start to see more and more of that

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Speaker 13: as we go toward the election.

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Speaker 2: I mean, yeah, that shape recovery. Your economy just keeps

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Speaker 2: getting more ca shaped. Your old Alma mater a city

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Speaker 2: group I came out with their call. It's one hundred

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Speaker 2: and twenty five basis points for this year in terms

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Speaker 2: of cuts fifteen and September fifteen, November twenty five for December.

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Speaker 2: That feels like one of the more dubvish calls out there.

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Speaker 2: Do you think that's an economy that needs that kind

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Speaker 2: of move?

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Speaker 13: Well, I'm glad we're not there anymore because the need

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Speaker 13: to attract client attention is something that I don't need

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Speaker 13: to worry about anymore. And I feel sorry for Andrew Hollendhorse,

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Speaker 13: who's still in the business of trying to distinguish themselves

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Speaker 13: from every other economists out there. I think that's a

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Speaker 13: bit overboard from my experience at the FED. I think

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Speaker 13: the reaction at the Board and among all the district banks,

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Speaker 13: they'll be saying, you know, we're normalizing the economy. The

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Speaker 13: need for large number of rate increases is really not there,

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Speaker 13: and if we were to do it, it would signal

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Speaker 13: to the markets that there's some thing to really worry

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Speaker 13: about and that we're panicking. And the need to panic

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Speaker 13: right now is avoiding the impression of panicking right now

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Speaker 13: is at the paramount for the FED.

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Speaker 6: So I think we're going to see twenty.

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Speaker 13: Five basis points in September, and maybe if the data

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Speaker 13: continue to deteriorate like this, they'll talk about a more

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Speaker 13: continued set of rate increases and probably hint at three.

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Speaker 13: But if the data starts to turn around a bit

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Speaker 13: and stabilize and normalize and we don't see an acceleration

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Speaker 13: in the worstening, I think they're going to say, you know,

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Speaker 13: possibly too.

440
00:23:33,840 --> 00:23:38,280
Speaker 8: Where do you see average job growth coming in over

441
00:23:38,320 --> 00:23:41,720
Speaker 8: the next twelve months? With the expectations that the FED

442
00:23:41,800 --> 00:23:43,800
Speaker 8: is going to begin its rate cutting cycle.

443
00:23:45,200 --> 00:23:45,520
Speaker 6: Yeah.

444
00:23:45,880 --> 00:23:49,320
Speaker 13: I think when we look at where the payrolls are weakening,

445
00:23:49,440 --> 00:23:51,920
Speaker 13: it's exactly in those sectors where the FED wants it

446
00:23:52,000 --> 00:23:55,080
Speaker 13: to weaken, the intrasensitive sectors. In fact, one surprising part

447
00:23:55,080 --> 00:23:58,680
Speaker 13: of the numbers is how strong construction continues to be.

448
00:23:59,320 --> 00:24:01,240
Speaker 13: But I think the FED is going to start saying,

449
00:24:01,520 --> 00:24:04,320
Speaker 13: if we are successful in normalizing interest rates and normalizing

450
00:24:04,320 --> 00:24:09,080
Speaker 13: the economy, we'll see payrolls and household employment growth somewhere

451
00:24:09,080 --> 00:24:10,840
Speaker 13: in the one hundred thousand, tw one hundred and twenty

452
00:24:10,880 --> 00:24:11,680
Speaker 13: thousand range.

453
00:24:11,840 --> 00:24:12,600
Speaker 6: That's normal.

454
00:24:13,280 --> 00:24:16,520
Speaker 13: And so everything we've seen up until now at the

455
00:24:16,520 --> 00:24:19,639
Speaker 13: two hundred level is way above normal and not sustainable.

456
00:24:20,640 --> 00:24:23,919
Speaker 5: Here's my broad question. Also, how it relates to tech.

457
00:24:25,440 --> 00:24:29,439
Speaker 2: Hyper scalers are spending gazillions of dollars that's a technical

458
00:24:29,520 --> 00:24:34,120
Speaker 2: term in terms of spending for AI. Can we have

459
00:24:34,280 --> 00:24:39,879
Speaker 2: a meaningfully weaker economy with that kind of capac spend?

460
00:24:41,440 --> 00:24:44,639
Speaker 13: Great point, because as we see in the numbers this month,

461
00:24:44,960 --> 00:24:49,560
Speaker 13: one of the surprising sources of job of job decline

462
00:24:49,720 --> 00:24:53,600
Speaker 13: payroll decline is in information systems. Now, fortunately, most of

463
00:24:53,680 --> 00:24:56,520
Speaker 13: that almost half of that is because of broadcasting and

464
00:24:56,560 --> 00:24:59,640
Speaker 13: newspapers and publishing. But there is a component that talks

465
00:24:59,680 --> 00:25:03,879
Speaker 13: about where the hyperscalers are and that also shows a

466
00:25:04,000 --> 00:25:08,520
Speaker 13: small set of job the payroll declines, and I think

467
00:25:08,520 --> 00:25:11,440
Speaker 13: what we're seeing is that companies are having to rationalize

468
00:25:11,520 --> 00:25:13,800
Speaker 13: their finances and to say, if we're going to spend

469
00:25:13,800 --> 00:25:17,080
Speaker 13: a lot on capex, that means that we're using capital,

470
00:25:17,640 --> 00:25:21,840
Speaker 13: AI and other types of innovations to substitute for labor,

471
00:25:22,480 --> 00:25:26,359
Speaker 13: and especially labor that's very expensive labor. So right now,

472
00:25:26,400 --> 00:25:28,520
Speaker 13: if you don't have the right skill set in the

473
00:25:28,560 --> 00:25:31,720
Speaker 13: IT high tech industry, your jobs are on the line

474
00:25:31,720 --> 00:25:35,400
Speaker 13: because you can have to prove to the employer that

475
00:25:35,520 --> 00:25:38,840
Speaker 13: you're you're going to be a value added producer going

476
00:25:38,880 --> 00:25:42,880
Speaker 13: forward in a world where AI threatens to take over

477
00:25:43,040 --> 00:25:45,399
Speaker 13: a lot of the skilled jobs, skilled jobs like you know,

478
00:25:46,640 --> 00:25:50,200
Speaker 13: entry level programmers, where software itself is being written by

479
00:25:50,240 --> 00:25:53,200
Speaker 13: the AI software that's being installed.

480
00:25:53,720 --> 00:25:56,640
Speaker 8: So with Jackson Hole obviously coming up at the end

481
00:25:56,760 --> 00:25:58,800
Speaker 8: of this month, so we'll have a lot of different

482
00:25:58,840 --> 00:26:01,840
Speaker 8: FED speakers between now and then in LX a few weeks.

483
00:26:01,880 --> 00:26:07,200
Speaker 4: I know Alex is excited about that obviously. That September eighteenth, decision.

484
00:26:06,800 --> 00:26:08,919
Speaker 8: Being the next meeting for the Federal Reserve WIL to

485
00:26:08,960 --> 00:26:11,200
Speaker 8: decide on rate cut expectations. But how many rate cuts

486
00:26:11,240 --> 00:26:14,400
Speaker 8: are you really forecasting, either for this year or over

487
00:26:14,440 --> 00:26:16,600
Speaker 8: the next twelve months, Because, like we've been talking about

488
00:26:16,600 --> 00:26:18,720
Speaker 8: so much, Alex and I, the economy is still strong.

489
00:26:18,760 --> 00:26:20,159
Speaker 8: I mean, it doesn't seem like this is going to

490
00:26:20,200 --> 00:26:23,320
Speaker 8: necessarily need to be an aggressive rate cutting cycle like

491
00:26:23,359 --> 00:26:25,560
Speaker 8: something you would have seen during the pandemic or the

492
00:26:25,600 --> 00:26:28,359
Speaker 8: Great Financial Crisis or coming out of the dot com

493
00:26:28,720 --> 00:26:32,800
Speaker 8: bubble bursting here with the economic growth still pretty sturdy here,

494
00:26:32,800 --> 00:26:33,960
Speaker 8: So what are you for seeing here?

495
00:26:34,760 --> 00:26:37,720
Speaker 13: That's a great question, because I think the real boat onus,

496
00:26:37,760 --> 00:26:42,200
Speaker 13: on shairpal Now is at Jackson Hole to calm Lamarks

497
00:26:42,240 --> 00:26:45,120
Speaker 13: and say we're not in a recession, we're not panicking.

498
00:26:45,400 --> 00:26:47,160
Speaker 6: We are in a normalizing situation.

499
00:26:47,560 --> 00:26:49,880
Speaker 13: That has to be as primary message, and in doing

500
00:26:49,920 --> 00:26:53,800
Speaker 13: so he will try to hint more at the expect

501
00:26:53,960 --> 00:26:56,720
Speaker 13: two cuts possibly three for the rest of this year,

502
00:26:57,600 --> 00:27:00,840
Speaker 13: and nowhere near the levels of fifty pace points initially,

503
00:27:00,880 --> 00:27:05,119
Speaker 13: and we'll front loaded with two the COVID of two cuts,

504
00:27:05,359 --> 00:27:07,399
Speaker 13: and we'll have to continue with two more for the.

505
00:27:07,400 --> 00:27:07,920
Speaker 6: Rest of the year.

506
00:27:08,240 --> 00:27:10,440
Speaker 13: That would be the wrong message to said, because right

507
00:27:10,440 --> 00:27:15,040
Speaker 13: now markets are way over excited about the possibility of recession.

508
00:27:15,080 --> 00:27:18,200
Speaker 13: I think his job in Jackson Hall will be calm

509
00:27:18,240 --> 00:27:21,480
Speaker 13: to the markets and calm expectations, and to restore a

510
00:27:21,520 --> 00:27:24,840
Speaker 13: sense of historical perspective as to what is normal and

511
00:27:25,800 --> 00:27:28,680
Speaker 13: what is a normal FED reaction to what's going on,

512
00:27:28,800 --> 00:27:32,520
Speaker 13: which is moderating interest rates because they are restricted right now,

513
00:27:32,560 --> 00:27:35,200
Speaker 13: there's no question, But we don't need to panic and

514
00:27:35,720 --> 00:27:36,840
Speaker 13: cut them so aggressively.

515
00:27:37,119 --> 00:27:38,800
Speaker 2: All right, Bill, we appreciate it was great to talk

516
00:27:38,840 --> 00:27:40,160
Speaker 2: to you again. It's been a while for me, Bill,

517
00:27:40,240 --> 00:27:42,520
Speaker 2: the chief economist at Milk and Institute.

518
00:27:42,560 --> 00:27:44,000
Speaker 5: Really good to get that perspective.

519
00:27:44,080 --> 00:27:46,920
Speaker 2: So sort of walking that tightrope then of having to

520
00:27:46,960 --> 00:27:50,320
Speaker 2: work back some expectations now for more FED cuts, but

521
00:27:50,480 --> 00:27:52,879
Speaker 2: keep showing that the economy does need a little bit

522
00:27:52,920 --> 00:27:55,600
Speaker 2: of support. That is another kind of tight rope balancing

523
00:27:56,000 --> 00:27:57,679
Speaker 2: that the Fed's going to have to do over the

524
00:27:57,680 --> 00:27:58,600
Speaker 2: next few weeks.

525
00:28:00,280 --> 00:28:04,160
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

526
00:28:04,240 --> 00:28:07,760
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529
00:28:14,160 --> 00:28:16,920
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530
00:28:18,520 --> 00:28:20,000
Speaker 5: This is Bloomberg Intelligence Radio.

531
00:28:20,000 --> 00:28:21,879
Speaker 2: We bring you all the top news in business and

532
00:28:21,880 --> 00:28:24,359
Speaker 2: finance and economics, and we are live from Interactive Broker

533
00:28:24,400 --> 00:28:27,480
Speaker 2: Studio right here in Midtown Manhattan. Also check us out

534
00:28:27,920 --> 00:28:30,160
Speaker 2: on YouTube. All right, you just heard a market check there.

535
00:28:30,200 --> 00:28:33,399
Speaker 2: It is ugly out there. I go back to Cameron

536
00:28:33,440 --> 00:28:35,840
Speaker 2: christ Macroman. He writes her Bloomberg that says, who's going

537
00:28:35,880 --> 00:28:36,600
Speaker 2: to save the market?

538
00:28:36,720 --> 00:28:38,320
Speaker 5: Help me be one? You're my only hope.

539
00:28:38,600 --> 00:28:40,880
Speaker 2: Who's the only hope? Is it going to be Nvidia?

540
00:28:41,080 --> 00:28:42,880
Speaker 2: Is it going to be Powell? Is it something else?

541
00:28:43,360 --> 00:28:46,000
Speaker 2: Ben Emmons is chief investment officer and founder at fed

542
00:28:46,080 --> 00:28:49,720
Speaker 2: Watch Advisors. He joins us, Now, Ben, what saves the market?

543
00:28:51,040 --> 00:28:53,160
Speaker 12: Yeah, it would be the feth if I say feed

544
00:28:53,200 --> 00:28:57,080
Speaker 12: Watch Advisors, because you know, this is clearly a Loucal

545
00:28:57,200 --> 00:29:00,440
Speaker 12: for fifty basis boys right now, right because of this

546
00:29:00,480 --> 00:29:04,080
Speaker 12: week Bayrold data. Then again, you know, drilling the report,

547
00:29:04,160 --> 00:29:06,760
Speaker 12: it's a lot about technology jobs. I guess this is

548
00:29:06,760 --> 00:29:08,960
Speaker 12: what Powell really said. It's like the leags are showing

549
00:29:09,040 --> 00:29:11,480
Speaker 12: up in the economy, right. The variable lags of policy

550
00:29:12,000 --> 00:29:14,360
Speaker 12: and technology gets hit but at the most and guess what,

551
00:29:14,440 --> 00:29:17,040
Speaker 12: that's social down the most today in the market. So

552
00:29:17,080 --> 00:29:19,560
Speaker 12: I think alex is a fifty base boy cut that

553
00:29:19,600 --> 00:29:21,240
Speaker 12: the FED would have to deliver. Of course it's not

554
00:29:21,280 --> 00:29:23,160
Speaker 12: going to do it, but I do think that this

555
00:29:23,280 --> 00:29:25,800
Speaker 12: report sets us up for the September media for sure,

556
00:29:26,160 --> 00:29:29,200
Speaker 12: as Powell's sort of signaled it, so Marcus will eventually

557
00:29:29,240 --> 00:29:31,520
Speaker 12: rebound from this. It looks like to me it was

558
00:29:31,840 --> 00:29:36,040
Speaker 12: obviously overshooting to the downstrom both yields and stars, and.

559
00:29:36,040 --> 00:29:39,320
Speaker 8: Especially coming off the back as you know, beIN from

560
00:29:39,640 --> 00:29:42,120
Speaker 8: how signaling that those rate cuts are coming as soon

561
00:29:42,320 --> 00:29:44,440
Speaker 8: as a September Here, I mean, how much of this

562
00:29:44,600 --> 00:29:47,360
Speaker 8: really changed from the last forty eight hours, because obviously

563
00:29:47,520 --> 00:29:50,520
Speaker 8: we did get that manufacturing data yesterday. Of course we

564
00:29:50,560 --> 00:29:53,040
Speaker 8: had the jobs dated this morning, but we already saw

565
00:29:53,080 --> 00:29:56,440
Speaker 8: this decline really ramping up yesterday after a huge balance

566
00:29:56,440 --> 00:29:59,160
Speaker 8: at a huge rally with the NASDAC up around three

567
00:29:59,240 --> 00:30:01,560
Speaker 8: percent on Wednesday, and obviously the S and P five

568
00:30:01,640 --> 00:30:04,560
Speaker 8: hundred posting it's best FED day in about two years here,

569
00:30:04,640 --> 00:30:06,400
Speaker 8: So how much of this is kind of like a

570
00:30:06,480 --> 00:30:08,720
Speaker 8: re rotation here moving into other corners of the market

571
00:30:08,760 --> 00:30:11,520
Speaker 8: when you had speculative areas like small caps really get

572
00:30:11,520 --> 00:30:14,000
Speaker 8: ahead of themselves, especially in July and now moving maybe

573
00:30:14,000 --> 00:30:15,880
Speaker 8: toward these kind of divid in paying corners of the

574
00:30:15,880 --> 00:30:16,400
Speaker 8: market here.

575
00:30:17,400 --> 00:30:19,960
Speaker 12: Yeah, I think it's totally right. Yes, you know, there's

576
00:30:20,000 --> 00:30:22,960
Speaker 12: a really nice rotation function on the Boombook terminal that

577
00:30:23,040 --> 00:30:26,880
Speaker 12: shows exactly that you see precisely deportation playing out the

578
00:30:27,120 --> 00:30:30,720
Speaker 12: sextici you described. So it is also about that people

579
00:30:30,760 --> 00:30:33,360
Speaker 12: look at this like, you know, there's an election playing

580
00:30:33,360 --> 00:30:35,400
Speaker 12: out here too. You know, Harris catching up really quick

581
00:30:35,400 --> 00:30:37,160
Speaker 12: to Trump in the polls, raising a lot of money.

582
00:30:37,280 --> 00:30:39,400
Speaker 12: So the Trump trade that's fading, and that Trump trade

583
00:30:39,480 --> 00:30:42,720
Speaker 12: was very associated with small caps against the backdrop of

584
00:30:42,800 --> 00:30:45,680
Speaker 12: an economy that's just softening. I don't think this is

585
00:30:45,720 --> 00:30:48,960
Speaker 12: the two thousand and seven suddenly we're in a recession

586
00:30:49,400 --> 00:30:52,440
Speaker 12: moments right with the back then the idea, But I

587
00:30:52,520 --> 00:30:55,000
Speaker 12: do think the yuk of steepening indicates, yeah, the eclumns

588
00:30:55,040 --> 00:30:57,959
Speaker 12: on a much slower path and you're getting lower payrolls.

589
00:30:58,400 --> 00:31:00,600
Speaker 12: And you know, small caps don't do that great initially

590
00:31:00,640 --> 00:31:03,680
Speaker 12: on that type of news. So there's a combination of two.

591
00:31:04,200 --> 00:31:06,400
Speaker 12: I think that rotation will continue. That's why I think

592
00:31:06,480 --> 00:31:09,320
Speaker 12: that the shell of the tech stocks is probably getting

593
00:31:09,760 --> 00:31:13,120
Speaker 12: overshot to the downside, makes these stocks over sold, and

594
00:31:13,120 --> 00:31:15,120
Speaker 12: that's why I think you can expect the rebound coming

595
00:31:15,160 --> 00:31:16,680
Speaker 12: in once they settle out there.

596
00:31:17,560 --> 00:31:19,760
Speaker 2: When you mentioned this is a clear call for the

597
00:31:19,800 --> 00:31:22,600
Speaker 2: FED to cut like right now, gun calls for fifty

598
00:31:22,600 --> 00:31:25,320
Speaker 2: basis points now from City JP Morgan, you also mentioned that,

599
00:31:25,560 --> 00:31:27,480
Speaker 2: I guess my dumb question here is why.

600
00:31:27,920 --> 00:31:30,680
Speaker 5: I mean, I understand that the report wasn't great.

601
00:31:31,400 --> 00:31:34,920
Speaker 2: There's obviously you can look at some potential seasonality, like

602
00:31:34,960 --> 00:31:39,760
Speaker 2: the permanently unemployed people. A lot of them are temporary unemployed.

603
00:31:39,800 --> 00:31:42,800
Speaker 2: In terms of the overall number. You could also make

604
00:31:42,840 --> 00:31:45,640
Speaker 2: an argument there is a weather factor, even though I

605
00:31:45,720 --> 00:31:49,280
Speaker 2: understand some of the headlines showed no, but why the urgency?

606
00:31:50,800 --> 00:31:52,720
Speaker 12: Yeah, And that's the puzzle of it. Alex like to

607
00:31:52,840 --> 00:31:55,520
Speaker 12: know why that sentiment shifts suddenly. But I think that

608
00:31:55,560 --> 00:31:58,120
Speaker 12: people are looking at maybe the accumulation of data and

609
00:31:58,200 --> 00:32:01,280
Speaker 12: so claims are steadily rising, The full we gaverage is

610
00:32:01,280 --> 00:32:05,720
Speaker 12: steadily rising. We're closer to that Zamble trigger, not exactly.

611
00:32:05,760 --> 00:32:07,440
Speaker 12: You know, Mike and kea at a nice spreadsheet this

612
00:32:07,520 --> 00:32:09,960
Speaker 12: morning on the show, and it says like you're just

613
00:32:10,000 --> 00:32:12,200
Speaker 12: a tenth of whatever percent away from that trigger. But

614
00:32:12,520 --> 00:32:15,400
Speaker 12: I think that's that it's a psychology ultimately, even the

615
00:32:15,520 --> 00:32:18,240
Speaker 12: Poul says that that rule is just a statistical measure,

616
00:32:18,320 --> 00:32:21,160
Speaker 12: nothing else. So it's psychology here that plays a role.

617
00:32:21,200 --> 00:32:25,000
Speaker 12: And you know, ultimately it's about like the fat can

618
00:32:25,160 --> 00:32:28,560
Speaker 12: really cut rates one and it could move more of

619
00:32:28,600 --> 00:32:31,560
Speaker 12: the restriction. And if you're drill the reports, you say,

620
00:32:31,800 --> 00:32:34,040
Speaker 12: there's definitely reasons why you don't have to cut with

621
00:32:34,240 --> 00:32:38,040
Speaker 12: like slashing rates because espaceally, you also have strong job

622
00:32:38,080 --> 00:32:42,479
Speaker 12: gains in healthcare and construction and financial activity and leisure,

623
00:32:42,520 --> 00:32:44,680
Speaker 12: which which have been engines of growth in the economy

624
00:32:44,680 --> 00:32:47,120
Speaker 12: the last several years. So that's not by the weakness

625
00:32:47,120 --> 00:32:50,200
Speaker 12: systems really the technology jobs in itself. So I think

626
00:32:50,240 --> 00:32:53,440
Speaker 12: it's more about psychology that we're fed, you're behind the curve,

627
00:32:53,480 --> 00:32:56,160
Speaker 12: you got to move. Why people are trading the fifty

628
00:32:56,200 --> 00:32:59,560
Speaker 12: base point cut, which as we know, is unlikely to

629
00:32:59,560 --> 00:33:02,760
Speaker 12: be delivered September more than twenty five. So it's more

630
00:33:02,840 --> 00:33:05,480
Speaker 12: like the Fed now gets enough evidence to remove the

631
00:33:05,520 --> 00:33:09,040
Speaker 12: restriction of this policy, and this report just cements that

632
00:33:09,040 --> 00:33:11,760
Speaker 12: that that goal for the to.

633
00:33:11,760 --> 00:33:16,480
Speaker 8: Alex's point, JP Morgan City seeing basically these FED dealing

634
00:33:16,480 --> 00:33:18,520
Speaker 8: two half point rate cuts, but then also you have

635
00:33:18,640 --> 00:33:22,560
Speaker 8: Goldman Sacks over there they added a third quarter point

636
00:33:22,640 --> 00:33:25,680
Speaker 8: rate cut in November to their prior forecast. Also Bank

637
00:33:25,760 --> 00:33:27,680
Speaker 8: of America, who had been holding out for rate cuts

638
00:33:27,680 --> 00:33:29,520
Speaker 8: in the beginning of December, they said they now see

639
00:33:29,760 --> 00:33:32,240
Speaker 8: to look for the first move in actually September here,

640
00:33:32,440 --> 00:33:34,200
Speaker 8: So when you're looking ahead over the next couple of

641
00:33:34,200 --> 00:33:37,560
Speaker 8: weeks for other indicators when it comes to the economy,

642
00:33:37,640 --> 00:33:39,920
Speaker 8: next week's a little bit lighter on the economic calendar,

643
00:33:39,920 --> 00:33:42,720
Speaker 8: but we still have some services related data coming out

644
00:33:42,720 --> 00:33:44,440
Speaker 8: as well. But then the week after that, obviously we'll

645
00:33:44,480 --> 00:33:48,640
Speaker 8: have another update when it comes to CPI on August fourteenth.

646
00:33:48,720 --> 00:33:50,719
Speaker 8: So what are you looking ahead between now and then,

647
00:33:50,720 --> 00:33:53,440
Speaker 8: because next week's also a huge earnings week still on

648
00:33:53,480 --> 00:33:55,280
Speaker 8: the back of coming out of these big tech earnings,

649
00:33:55,320 --> 00:33:57,120
Speaker 8: because you have a lot of consumer focused names that

650
00:33:57,120 --> 00:33:57,960
Speaker 8: are going to be reporting.

651
00:33:59,240 --> 00:34:01,360
Speaker 12: Yeah, I would look at those because that's where I

652
00:34:01,400 --> 00:34:03,640
Speaker 12: think the issue is currently. Right, if you look at

653
00:34:03,680 --> 00:34:06,320
Speaker 12: the current sell of today in the S and B,

654
00:34:06,440 --> 00:34:10,279
Speaker 12: what's the worst performing as sectors The consumer discretionary, right,

655
00:34:10,320 --> 00:34:13,560
Speaker 12: So I think that's where the economic pain point is

656
00:34:13,600 --> 00:34:16,080
Speaker 12: currently today in the markets. So these are earnings from

657
00:34:16,120 --> 00:34:19,799
Speaker 12: these consumer companies are obviously key to watch for any

658
00:34:19,880 --> 00:34:23,879
Speaker 12: kind of significant demand slowdown. Neil McDonald's was I think

659
00:34:23,880 --> 00:34:25,719
Speaker 12: it kind of a wake up goal earlier this week

660
00:34:25,880 --> 00:34:28,520
Speaker 12: that it showed, like, you know what, these consumers aren't

661
00:34:28,520 --> 00:34:31,560
Speaker 12: so out there, you know, eating left and right everything,

662
00:34:31,840 --> 00:34:34,840
Speaker 12: and are more conservative or getting more conservative, so that

663
00:34:34,880 --> 00:34:36,560
Speaker 12: I think it was the first precursor for what the

664
00:34:36,560 --> 00:34:39,200
Speaker 12: consumer sectors really showing that it is this slowdown that

665
00:34:39,280 --> 00:34:43,560
Speaker 12: we've been anticipating, against the sentiment that you once again highlight.

666
00:34:43,600 --> 00:34:45,320
Speaker 12: It's amazing, right, all of a sudden, we're getting a

667
00:34:45,400 --> 00:34:48,799
Speaker 12: repurported Every bank jumps all over one another to add

668
00:34:48,840 --> 00:34:51,759
Speaker 12: more raycuts. Well at first they were reluctant to put

669
00:34:51,760 --> 00:34:54,680
Speaker 12: out ratcuts, right. So I think it's that combination of

670
00:34:54,719 --> 00:34:57,920
Speaker 12: that that bit of the you know, exaggerated sentiment that

671
00:34:58,320 --> 00:35:01,600
Speaker 12: we know over all these years of aline oshaps after

672
00:35:01,719 --> 00:35:06,520
Speaker 12: favoral reports, against the true economic environment, which is slowing.

673
00:35:07,040 --> 00:35:09,600
Speaker 12: I don't think this is the recession moments, but we

674
00:35:09,680 --> 00:35:12,960
Speaker 12: definitely have to concefen is probably overtightening here, therefore they

675
00:35:12,960 --> 00:35:13,600
Speaker 12: can change.

676
00:35:13,760 --> 00:35:15,480
Speaker 5: All right, Ben, we gotta leave it there. Thanks a lot.

677
00:35:15,840 --> 00:35:19,160
Speaker 2: Ben Emmons joining us there from fed Watch Advisors. He's

678
00:35:19,200 --> 00:35:21,160
Speaker 2: the founder and CEO of that.

679
00:35:22,800 --> 00:35:26,720
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

680
00:35:26,760 --> 00:35:30,320
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

681
00:35:30,320 --> 00:35:33,120
Speaker 1: Auto with the Bloomberg Business app. You can also listen

682
00:35:33,239 --> 00:35:36,319
Speaker 1: live on Amazon Alexa from our flagship New York station.

683
00:35:36,680 --> 00:35:40,399
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

684
00:35:40,719 --> 00:35:43,120
Speaker 2: All right, let's get to Amazon. Isn't a tech company?

685
00:35:43,280 --> 00:35:44,960
Speaker 2: Isn't an e commerce company? I feel like this is

686
00:35:44,960 --> 00:35:47,800
Speaker 2: always a question. Putam Goyle is joining us. She's senior

687
00:35:47,880 --> 00:35:50,800
Speaker 2: US e Commerce and retail analyst at Bloomberg Intelligence. Amazon

688
00:35:50,880 --> 00:35:54,000
Speaker 2: stock is down by about twelve percent. I know it's

689
00:35:54,040 --> 00:35:56,160
Speaker 2: a tough tape, so it's hard to really parse out,

690
00:35:56,440 --> 00:35:59,360
Speaker 2: but put them help me understand why the decline in Amazon.

691
00:36:00,280 --> 00:36:03,080
Speaker 7: The decline is largely due to the operating margin guidance,

692
00:36:03,080 --> 00:36:06,439
Speaker 7: which came in below street expectations, as they're investing more

693
00:36:06,520 --> 00:36:09,840
Speaker 7: in Capex, which is really on the AI site to

694
00:36:09,920 --> 00:36:13,239
Speaker 7: support the cloud business. Now, you could argue that they

695
00:36:13,239 --> 00:36:15,800
Speaker 7: did also talk about the consumer and it being weaker

696
00:36:15,840 --> 00:36:17,839
Speaker 7: and it trading down. But I think you know, when

697
00:36:17,840 --> 00:36:20,680
Speaker 7: the consumer trades down, Amazon can still do well and

698
00:36:20,719 --> 00:36:23,279
Speaker 7: take share because they press the pedal on price and

699
00:36:23,320 --> 00:36:26,959
Speaker 7: convenience pretty hard, which draws them the attention that they need.

700
00:36:28,719 --> 00:36:31,960
Speaker 8: So when you look at Amazon and mov function, maz

701
00:36:32,080 --> 00:36:33,960
Speaker 8: and is the ticker symbol on this. So, like Alex

702
00:36:34,040 --> 00:36:36,240
Speaker 8: was talking about down twelve percent, it's actually the worst

703
00:36:36,239 --> 00:36:38,399
Speaker 8: performer in the S and P five hundred and also

704
00:36:38,520 --> 00:36:43,239
Speaker 8: dragging down the com communication the consumer discretionary sector down

705
00:36:43,280 --> 00:36:44,600
Speaker 8: over five percent right now.

706
00:36:44,760 --> 00:36:46,640
Speaker 4: So when it comes to especially when you think.

707
00:36:46,480 --> 00:36:49,239
Speaker 8: Of spinders that feed into in video, because that was

708
00:36:49,280 --> 00:36:51,160
Speaker 8: something that when it comes to those customers, because we

709
00:36:51,160 --> 00:36:54,040
Speaker 8: won't hear from Nvidia until August twenty eighth, so a

710
00:36:54,080 --> 00:36:56,240
Speaker 8: lot of people coming into this week we're looking toward

711
00:36:56,480 --> 00:36:59,800
Speaker 8: in Vidia's customers because if you looked at say Amazon

712
00:36:59,920 --> 00:37:03,600
Speaker 8: or even Meta Alphabet and others who you know, if

713
00:37:03,600 --> 00:37:06,560
Speaker 8: you combined their CAPEX spending over the prior four quarters

714
00:37:06,600 --> 00:37:09,239
Speaker 8: before this earning season, it was around one hundred and

715
00:37:09,280 --> 00:37:11,560
Speaker 8: fifty billion dollars. So the thing was, well they pull

716
00:37:11,640 --> 00:37:13,480
Speaker 8: back or not. For the most part, we still saw

717
00:37:13,520 --> 00:37:15,160
Speaker 8: a lot of spending. So I'm kind of wondering from

718
00:37:15,160 --> 00:37:17,560
Speaker 8: that equation, Punam, what are you seeing there as far

719
00:37:17,600 --> 00:37:20,279
Speaker 8: as what this could potentially mean for a stock like

720
00:37:20,320 --> 00:37:22,319
Speaker 8: in Video because obviously this is more of a discretionary

721
00:37:22,320 --> 00:37:24,160
Speaker 8: type company when it comes to Amazon. But when it

722
00:37:24,160 --> 00:37:26,359
Speaker 8: comes to the spending, how do you parse.

723
00:37:26,080 --> 00:37:28,360
Speaker 10: That sure stuf? For Amazon?

724
00:37:28,400 --> 00:37:29,680
Speaker 7: The one thing you have to keep in mind that

725
00:37:29,719 --> 00:37:33,480
Speaker 7: there were behind the AI wave, right, so they're investing

726
00:37:33,520 --> 00:37:36,520
Speaker 7: more into AI than maybe some of their peers, and

727
00:37:36,560 --> 00:37:38,640
Speaker 7: we think that's the reason that you're seeing a tickup

728
00:37:38,640 --> 00:37:40,920
Speaker 7: in the second half from the thirty point five billion

729
00:37:40,960 --> 00:37:43,000
Speaker 7: in the first half. Now, when it comes to some

730
00:37:43,080 --> 00:37:46,000
Speaker 7: of their counterparts, they've been ahead of the curve and

731
00:37:46,040 --> 00:37:48,960
Speaker 7: they could, depending on where their sales come out and

732
00:37:48,960 --> 00:37:52,160
Speaker 7: where consumer demand is, they could continue at a steady

733
00:37:52,200 --> 00:37:54,319
Speaker 7: pace or even pull back a little because they are

734
00:37:54,360 --> 00:37:55,400
Speaker 7: somewhat ahead of the curve.

735
00:37:55,840 --> 00:37:59,080
Speaker 2: This is a super basic, dumb question. As they ramp

736
00:37:59,200 --> 00:38:01,040
Speaker 2: up their AI stuff, how does that help them with

737
00:38:01,120 --> 00:38:02,759
Speaker 2: e commerce? And so that's such a huge chunge of

738
00:38:02,760 --> 00:38:05,319
Speaker 2: their business. Like I know that the AWS is a

739
00:38:05,320 --> 00:38:08,040
Speaker 2: sexy growing part, but when you look at revenue, whether

740
00:38:08,080 --> 00:38:11,279
Speaker 2: it's e commerce or online stores, it's still double what

741
00:38:11,320 --> 00:38:12,680
Speaker 2: AWS brings in.

742
00:38:13,000 --> 00:38:13,960
Speaker 5: How does AI help that?

743
00:38:15,480 --> 00:38:18,440
Speaker 7: AI is actually a big big deal in the retail

744
00:38:18,480 --> 00:38:20,440
Speaker 7: space and the e commerce space. So when you think

745
00:38:20,440 --> 00:38:22,560
Speaker 7: about AI, what it helps them do is it helps

746
00:38:22,560 --> 00:38:25,520
Speaker 7: them across all facets of their e commerce business, whether

747
00:38:25,560 --> 00:38:28,240
Speaker 7: that's search, right, So you go into the Amazon search

748
00:38:28,280 --> 00:38:30,680
Speaker 7: for and let's say you know you're used to typing

749
00:38:30,680 --> 00:38:32,719
Speaker 7: in I want to black dress, but now you don't

750
00:38:32,719 --> 00:38:35,160
Speaker 7: have to. You can say going to black tie event, right,

751
00:38:35,200 --> 00:38:38,040
Speaker 7: and they should be able to populate addresses that gover that.

752
00:38:38,280 --> 00:38:41,319
Speaker 7: So conversion is one of the biggest pain points in

753
00:38:41,440 --> 00:38:44,680
Speaker 7: e commerce. You're going online to browse more than you

754
00:38:44,719 --> 00:38:46,839
Speaker 7: are to buy, whereas you're going in store to buy

755
00:38:46,960 --> 00:38:49,440
Speaker 7: more than you are to browse. So I think as

756
00:38:49,760 --> 00:38:53,239
Speaker 7: what AI can do in a meaningful ways improve conversion

757
00:38:53,560 --> 00:38:56,680
Speaker 7: because you can get the results that you're looking for faster,

758
00:38:57,239 --> 00:38:59,960
Speaker 7: you can improve the shopping journey, you can get customers

759
00:39:00,080 --> 00:39:03,719
Speaker 7: to find what they want more easily, and not just that. Right,

760
00:39:03,760 --> 00:39:06,440
Speaker 7: they're using AIA just for the search, but they're using

761
00:39:06,480 --> 00:39:08,879
Speaker 7: it in customer service, they're using it for inventory, they're

762
00:39:08,960 --> 00:39:12,840
Speaker 7: using it and they're automated shopping platforms like the Roofs

763
00:39:12,960 --> 00:39:15,640
Speaker 7: or the Alexa. So there's a lot that's happening with

764
00:39:16,400 --> 00:39:20,759
Speaker 7: generative AI, especially which we think will help drive retail

765
00:39:21,080 --> 00:39:22,480
Speaker 7: higher for a long time.

766
00:39:23,000 --> 00:39:25,439
Speaker 8: We only have about a minute left here, but you've

767
00:39:25,440 --> 00:39:27,640
Speaker 8: talked about also how when it comes to the margin

768
00:39:27,680 --> 00:39:31,360
Speaker 8: equation for Amazon, how you're seeing that expanding over the

769
00:39:31,400 --> 00:39:33,520
Speaker 8: long term. And as you know, Alex, when you think

770
00:39:33,520 --> 00:39:36,400
Speaker 8: of the discretionary sector margins coming out of COVID, that

771
00:39:36,440 --> 00:39:38,840
Speaker 8: was such a big issue because of the inflationary pressures.

772
00:39:39,120 --> 00:39:41,439
Speaker 8: So I'm wondering Punin when you're thinking about that, because

773
00:39:41,440 --> 00:39:43,399
Speaker 8: if you're not an Amazon, or maybe like a home

774
00:39:43,480 --> 00:39:45,719
Speaker 8: durable like a home depot, a lot of those other

775
00:39:45,760 --> 00:39:48,000
Speaker 8: retailers are struggling. So what are you seeing from the

776
00:39:48,040 --> 00:39:50,759
Speaker 8: margin aspect maybe more broadly, or what can Amazon tell

777
00:39:50,840 --> 00:39:53,440
Speaker 8: us kind of moving forward what that means for discretionary

778
00:39:53,520 --> 00:39:55,160
Speaker 8: type of companies in the retail space.

779
00:39:56,000 --> 00:39:58,480
Speaker 7: Sure, so remember Amazon is a retail company, but it's

780
00:39:58,480 --> 00:40:02,200
Speaker 7: also a tech company, right. The marketing opportunity for Amazon

781
00:40:02,280 --> 00:40:04,840
Speaker 7: really comes from the tech side. So the cloud business,

782
00:40:04,840 --> 00:40:07,080
Speaker 7: which is about one hundred billion dollars, we estimate that

783
00:40:07,080 --> 00:40:09,800
Speaker 7: going into two hundred billion dollars with a forty percent margin.

784
00:40:10,239 --> 00:40:10,719
Speaker 10: There you go.

785
00:40:10,800 --> 00:40:13,480
Speaker 7: You just added another forty billion dollars in profit. And

786
00:40:13,520 --> 00:40:15,359
Speaker 7: then when you look at the AW, when you look

787
00:40:15,360 --> 00:40:18,000
Speaker 7: at the advertising business, fifty billion dollars run rate going

788
00:40:18,000 --> 00:40:20,880
Speaker 7: to one hundred billion dollars, which we think carries higher

789
00:40:21,000 --> 00:40:24,440
Speaker 7: margin than AWS, you're looking at adding about another fifty

790
00:40:24,480 --> 00:40:27,719
Speaker 7: billion at the minimum or more operating income. So right

791
00:40:27,719 --> 00:40:30,800
Speaker 7: there alone, you're reaching about one hundred billion dollars in

792
00:40:30,840 --> 00:40:33,640
Speaker 7: operating income in the next five years additionally to what

793
00:40:33,719 --> 00:40:37,320
Speaker 7: you have today. And that's the profit driving part of Amazon.

794
00:40:37,920 --> 00:40:40,160
Speaker 7: And you can argue that ads are supported by the

795
00:40:40,200 --> 00:40:41,280
Speaker 7: growing retail business.

796
00:40:41,440 --> 00:40:43,560
Speaker 5: Punam, we got to leave it there up against a break.

797
00:40:43,560 --> 00:40:44,120
Speaker 5: Thank you very much.

798
00:40:44,120 --> 00:40:47,480
Speaker 2: Putnam Gooyle, Senior EUS Commerce analysts for Bloomberg Intelligence.

799
00:40:49,040 --> 00:40:52,919
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

800
00:40:53,000 --> 00:40:56,040
Speaker 1: weekdays at ten am Eastern on Apple car Play and

801
00:40:56,040 --> 00:40:58,959
Speaker 1: Android Auto with the Bloomberg Business app. You can also

802
00:40:59,040 --> 00:41:02,560
Speaker 1: listen live on Amazon Alexa from our flagship New York station,

803
00:41:02,920 --> 00:41:05,680
Speaker 1: Just say Alexa playing Bloomberg eleven thirty.

804
00:41:07,400 --> 00:41:09,960
Speaker 2: This is the Bloomberg Intelligence Radio. So the latest right

805
00:41:10,000 --> 00:41:12,319
Speaker 2: now is that city adjusting its fed rate call. They

806
00:41:12,360 --> 00:41:15,560
Speaker 2: see a fifty basis point cut in September and November,

807
00:41:15,840 --> 00:41:18,520
Speaker 2: and twenty five basis points in December. So things are

808
00:41:18,560 --> 00:41:21,840
Speaker 2: moving fast and furious. What's also being fast and furious

809
00:41:21,920 --> 00:41:24,160
Speaker 2: is Intel stock. I just want to start there because

810
00:41:24,239 --> 00:41:27,000
Speaker 2: it's whenever you have a company like Intel mentioned something

811
00:41:27,080 --> 00:41:30,000
Speaker 2: like liquidity very high up on their earnings, that's never

812
00:41:30,120 --> 00:41:33,080
Speaker 2: really a good sign. That stock is now plummeting twenty

813
00:41:33,160 --> 00:41:35,600
Speaker 2: eight percent. I want to bring an anarag Rana Bloomberg

814
00:41:35,600 --> 00:41:37,320
Speaker 2: Intelligence senior technology analyst.

815
00:41:37,320 --> 00:41:40,000
Speaker 5: You can also hit on Apple as well, but anarag

816
00:41:40,120 --> 00:41:42,120
Speaker 5: I just what happened here?

817
00:41:43,920 --> 00:41:44,439
Speaker 11: Yeah, I mean.

818
00:41:44,400 --> 00:41:47,279
Speaker 14: Mentel is going through restructuring right now, so I mean

819
00:41:47,320 --> 00:41:50,520
Speaker 14: this is just a fallout from that, because remember right now,

820
00:41:51,160 --> 00:41:53,560
Speaker 14: data center is where all the investments are going in

821
00:41:53,600 --> 00:41:56,799
Speaker 14: and in Vidio GPUs is what everybody wants. So that's

822
00:41:56,880 --> 00:41:59,000
Speaker 14: really not playing in the you know, sweet spot of

823
00:41:59,080 --> 00:42:02,080
Speaker 14: what Intel does, big turnaround story, and you know, it

824
00:42:02,160 --> 00:42:03,880
Speaker 14: seems some issues there.

825
00:42:04,320 --> 00:42:06,399
Speaker 8: And as you know, that stock has already been under

826
00:42:06,440 --> 00:42:08,080
Speaker 8: tremendous pressure.

827
00:42:07,920 --> 00:42:09,560
Speaker 4: This year alone too.

828
00:42:09,640 --> 00:42:11,640
Speaker 8: So usually when there's cost cutting efforts, when you hear

829
00:42:11,680 --> 00:42:15,040
Speaker 8: those kind of magic words, usually investors will gravitate toward that,

830
00:42:15,160 --> 00:42:16,799
Speaker 8: especially when you think of say, as you know, Hona

831
00:42:16,840 --> 00:42:18,960
Speaker 8: rog Meta at the end of twenty twenty two when

832
00:42:19,000 --> 00:42:21,760
Speaker 8: it first announced, it's a big tranch of job cuts

833
00:42:21,760 --> 00:42:24,279
Speaker 8: and cost cutting efforts. But with this and especially the

834
00:42:24,320 --> 00:42:27,040
Speaker 8: intricacies that you were just talking about, what exactly is

835
00:42:27,080 --> 00:42:29,400
Speaker 8: it that investors need to see in order to have

836
00:42:29,440 --> 00:42:31,239
Speaker 8: more conviction for a stock like this.

837
00:42:32,840 --> 00:42:34,719
Speaker 14: I think sales growth needs to pick up because at

838
00:42:34,760 --> 00:42:36,440
Speaker 14: the end of the day, unless you see that, you know,

839
00:42:36,480 --> 00:42:38,200
Speaker 14: that's not going to translate into.

840
00:42:38,800 --> 00:42:40,360
Speaker 6: Cash flows and bottom lines.

841
00:42:40,560 --> 00:42:42,359
Speaker 14: You know, in the case of Meta, you know there

842
00:42:42,520 --> 00:42:44,920
Speaker 14: was exus spending, but at the same time, you know

843
00:42:44,960 --> 00:42:48,799
Speaker 14: their digital assets were still being used very aggressively by public,

844
00:42:48,920 --> 00:42:51,919
Speaker 14: you know, whether it's Instagram or WhatsApp, and mean, there's

845
00:42:51,960 --> 00:42:54,560
Speaker 14: no shortage of assets over there. So two different and

846
00:42:54,600 --> 00:42:56,959
Speaker 14: distinct stories in the tech land.

847
00:42:58,040 --> 00:42:58,960
Speaker 5: What do you make of Apple?

848
00:42:59,000 --> 00:43:01,960
Speaker 2: Then it wasn't terrible at all if you're taking a

849
00:43:01,960 --> 00:43:04,080
Speaker 2: look just at the opening market, considering the selloup that

850
00:43:04,080 --> 00:43:06,120
Speaker 2: we're having, and Apple stock is actually up two point

851
00:43:06,160 --> 00:43:07,840
Speaker 2: four percent best stainer as today in.

852
00:43:07,880 --> 00:43:10,719
Speaker 4: The S and P five hundred, Yeah, it was.

853
00:43:10,920 --> 00:43:12,720
Speaker 14: You could say that tech is right. I mean Apple

854
00:43:12,800 --> 00:43:15,640
Speaker 14: is right now the cleanest story in techland only because

855
00:43:15,680 --> 00:43:18,680
Speaker 14: they are not spending billions in capex. They are seeing

856
00:43:18,719 --> 00:43:22,040
Speaker 14: some improvement on their top line and with the promise

857
00:43:22,120 --> 00:43:25,839
Speaker 14: of potentially a refurs cycle on the iPhone coming over

858
00:43:25,880 --> 00:43:27,960
Speaker 14: the next twelve to twenty four months, So things are

859
00:43:28,000 --> 00:43:31,040
Speaker 14: looking good for Apple from a on a relative basis

860
00:43:31,080 --> 00:43:34,360
Speaker 14: when you look at companies like Amazon or Microsoft.

861
00:43:35,000 --> 00:43:38,280
Speaker 8: That's right, and especially because Apple in the first quarter

862
00:43:38,320 --> 00:43:40,239
Speaker 8: it was worst performance relatives to the S and P

863
00:43:40,440 --> 00:43:43,319
Speaker 8: five hundred one of it is worse since the dot

864
00:43:43,320 --> 00:43:45,160
Speaker 8: com bubble burst. But if you look at where it

865
00:43:45,239 --> 00:43:48,400
Speaker 8: was from mid April to now, up almost thirty percent

866
00:43:48,480 --> 00:43:49,080
Speaker 8: in that span.

867
00:43:49,239 --> 00:43:51,240
Speaker 4: So even though there were concerns.

868
00:43:50,800 --> 00:43:54,040
Speaker 8: About China and is the latest earnings report still there's

869
00:43:54,080 --> 00:43:56,040
Speaker 8: more optimism on all the other side of that. So

870
00:43:56,200 --> 00:43:57,680
Speaker 8: what improvements when it comes to China?

871
00:43:57,760 --> 00:43:58,440
Speaker 4: Have you seen there?

872
00:43:59,760 --> 00:43:59,960
Speaker 8: Yeah?

873
00:44:00,200 --> 00:44:02,680
Speaker 14: I think April is when the company came out and

874
00:44:02,719 --> 00:44:05,000
Speaker 14: said that there, you know, numbers in China are not

875
00:44:05,160 --> 00:44:08,640
Speaker 14: as bad as news agencies and analysts were making it

876
00:44:08,680 --> 00:44:10,680
Speaker 14: out to be. And I think that led to a

877
00:44:10,760 --> 00:44:13,480
Speaker 14: reversal of the stock at that point, and since then

878
00:44:13,520 --> 00:44:16,560
Speaker 14: they did a very big AI event, which surprisingly went

879
00:44:16,760 --> 00:44:20,440
Speaker 14: very well because Apple's been criticized over the past few

880
00:44:20,520 --> 00:44:23,319
Speaker 14: years of not innovating enough. So I think those two

881
00:44:23,360 --> 00:44:28,120
Speaker 14: factors really changed the investive perception of Apple in terms

882
00:44:28,160 --> 00:44:30,880
Speaker 14: of as a company and its fundamentals. And now we

883
00:44:30,920 --> 00:44:34,160
Speaker 14: are waiting for the iPhone sixteen you know presentation, which

884
00:44:34,200 --> 00:44:36,680
Speaker 14: is going to be somewhere around the September time frame,

885
00:44:36,960 --> 00:44:39,520
Speaker 14: and with that will come the next level of you

886
00:44:39,520 --> 00:44:42,520
Speaker 14: could say, hardware refash cycle. So things are looking good

887
00:44:42,520 --> 00:44:45,120
Speaker 14: for Apple, not so much for the other tech players

888
00:44:45,120 --> 00:44:45,640
Speaker 14: at this point.

889
00:44:45,920 --> 00:44:48,080
Speaker 2: Before we let you go, I mean, I understand you

890
00:44:48,120 --> 00:44:49,960
Speaker 2: said that Apple's not spending boat loads in the same

891
00:44:49,960 --> 00:44:52,239
Speaker 2: way on AI, but don't we want them to do that?

892
00:44:52,280 --> 00:44:53,880
Speaker 5: Like at some point are they going to be behind

893
00:44:53,880 --> 00:44:54,359
Speaker 5: on that then?

894
00:44:55,760 --> 00:44:57,960
Speaker 14: So think about it this way. People are dying to

895
00:44:58,000 --> 00:45:01,720
Speaker 14: have their large language model on the Apple distribution network.

896
00:45:02,000 --> 00:45:03,759
Speaker 14: They don't have to spend the money opening I can

897
00:45:03,800 --> 00:45:06,719
Speaker 14: do all of that spending. They will just license it

898
00:45:07,000 --> 00:45:09,560
Speaker 14: and to have it on their phone. This is another

899
00:45:09,600 --> 00:45:11,560
Speaker 14: way for them to say, why do I need to

900
00:45:11,560 --> 00:45:13,880
Speaker 14: make data centers when I can rent the data centers

901
00:45:13,880 --> 00:45:16,440
Speaker 14: whenever I need them. So they have a fairly different

902
00:45:16,440 --> 00:45:19,719
Speaker 14: strategy when it comes to capital allocation as compared to

903
00:45:19,760 --> 00:45:20,520
Speaker 14: the other companies.

904
00:45:20,960 --> 00:45:22,560
Speaker 5: All Right, I super appreciate it.

905
00:45:22,560 --> 00:45:24,920
Speaker 2: Thanks a lot on our ground up Bloomberg Intelligence senior

906
00:45:25,000 --> 00:45:27,080
Speaker 2: US technology analyst joining us.

907
00:45:27,200 --> 00:45:31,680
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908
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909
00:45:35,680 --> 00:45:38,640
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910
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911
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912
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