WEBVTT - A Short-Term Pullback We Should Have Expected 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.640 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.239 at Bloomberg dot com slash podcast. Let's get an update 0:00:22.280 --> 0:00:25.120 on how we should be thinking about these market conditions. 0:00:25.120 --> 0:00:27.319 We do that today with a good friend of Bloomberg Radio, 0:00:27.640 --> 0:00:31.880 Christina Hooper. She's a chief global market strategist at Investco. 0:00:32.000 --> 0:00:34.040 They have a couple of shekels under management, one point 0:00:34.080 --> 0:00:38.120 three billion dollars. Christina, thanks so much for joining us again. 0:00:38.560 --> 0:00:40.400 All Right, So we've had a couple of days of 0:00:40.479 --> 0:00:42.239 some sell offs here, and I guess people are just 0:00:42.280 --> 0:00:46.480 kind of, you know, asking, just casually, is this something 0:00:46.479 --> 0:00:48.360 it's just a little bit of a pullback. What is 0:00:48.760 --> 0:00:50.640 you know, a longer term bull market or is this 0:00:50.800 --> 0:00:54.120 showing some cracks in what had been a pretty good 0:00:54.640 --> 0:00:58.960 narrative for this market. I think it's a short term pullback, 0:00:59.320 --> 0:01:02.600 and and quite frankly, I think we should have expected it. 0:01:02.960 --> 0:01:06.200 Um what we saw was the ten year yield go 0:01:06.319 --> 0:01:10.560 up significantly earlier this year, and markets react to it. 0:01:10.720 --> 0:01:14.360 Reacted to it, particularly tech because of its higher valuations. 0:01:14.360 --> 0:01:19.320 It's more sensitive. UH. And then as yields back down, 0:01:19.560 --> 0:01:23.080 there was this wave of relief and people started changing 0:01:23.120 --> 0:01:26.320 their expectations for the ten year For the rest of 0:01:26.319 --> 0:01:30.959 of UM, I've always expected that the ten year yield 0:01:30.959 --> 0:01:33.600 will finish the year at two percent or higher, and 0:01:33.640 --> 0:01:39.320 that means some pressure on stocks, particularly tech stocks, as 0:01:39.360 --> 0:01:44.760 they digest UH those higher levels of rates. That doesn't 0:01:44.840 --> 0:01:48.040 mean that this is the end UM. It just means 0:01:48.160 --> 0:01:51.120 we're going through an adjustment period. So Critty Gouta was 0:01:51.160 --> 0:01:53.120 on earlier though and told us, you know, the big 0:01:53.640 --> 0:01:57.200 fang stocks are now sitting at the kind of valuations 0:01:57.240 --> 0:02:02.040 we saw in two thousand nineteen. UM. Why you know 0:02:02.240 --> 0:02:06.720 completely reset? Are aren't we still expecting UM the pandemic 0:02:06.760 --> 0:02:11.040 trends to be sticky and hold as we reopen. Well, 0:02:11.080 --> 0:02:14.960 I think certainly some pandemic trends will be sticky. We 0:02:15.040 --> 0:02:19.040 are going to see elevated e commerce sales going forward. 0:02:19.120 --> 0:02:21.880 As one example, we are going to see more of 0:02:21.919 --> 0:02:26.120 a hybrid model for many employees. They're going to be 0:02:26.120 --> 0:02:30.520 working from home more often. Uh so. So certainly some 0:02:30.639 --> 0:02:34.240 trends hold, even if they moderate a bit. But we're 0:02:34.320 --> 0:02:38.400 also not factoring in that companies have significant cash on 0:02:38.480 --> 0:02:43.280 balance sheets, and in an expansionary environment, they're likely to 0:02:43.360 --> 0:02:48.080 spend more on investment, and I would argue more of 0:02:48.120 --> 0:02:51.480 those investment dollars are going to go into tech. In fact, 0:02:51.480 --> 0:02:54.520 if we look at the last Federal Reserve basebook, the 0:02:54.639 --> 0:02:59.480 Cleveland Said reported that some of its contacts indicated they 0:02:59.520 --> 0:03:02.600 were planning to adopt more technology in lieu of more 0:03:02.600 --> 0:03:06.239 employees to keep up with demand, given that it's it's 0:03:06.240 --> 0:03:09.760 been difficult to source employees. Yeah, Christina, that's kind of 0:03:09.760 --> 0:03:11.560 where I wanted to go. I mean, we've now had 0:03:11.600 --> 0:03:15.040 a couple of days to digest that, you know, exceptionally 0:03:15.400 --> 0:03:18.320 weak jobs report on Friday one of the narratives that's 0:03:18.360 --> 0:03:21.000 I think finding its way into the marketplaces. Boy, if 0:03:21.000 --> 0:03:22.839 corporate America wants to get people back to work, they're 0:03:22.840 --> 0:03:25.800 gonna have to raise pay and that might cause some 0:03:25.960 --> 0:03:28.760 wage inflation into this economy. How do you think about 0:03:28.760 --> 0:03:31.520 Friday and maybe what it might mean going forward for 0:03:31.680 --> 0:03:36.320 the economy and for policymakers. Well, I certainly believe there 0:03:36.440 --> 0:03:42.360 is some truth UH to the argument that we are. UM. 0:03:42.480 --> 0:03:46.840 We have generous fiscal stimulus, including generous unemployment benefits, and 0:03:46.920 --> 0:03:51.000 that is one deterrent to people returning to work. But 0:03:51.040 --> 0:03:53.280 we have to recognize that that is a relatively short 0:03:53.400 --> 0:03:56.400 term deterrent. It ends in September, and in fact, some 0:03:56.480 --> 0:04:00.840 states are ending it as soon as June. So but 0:04:00.920 --> 0:04:03.880 there are other reasons. Right, We've got health safety concerns, 0:04:03.920 --> 0:04:07.840 We've got public transportation schedules that are UM not back 0:04:07.880 --> 0:04:11.160 to normal yet, and we have childcare issues for many Americans. 0:04:11.600 --> 0:04:14.880 All those issues are very short term in nature. So yes, 0:04:14.960 --> 0:04:18.440 we're already starting to see wage increases in some industries 0:04:18.480 --> 0:04:20.720 in some regions, but I don't think we're going to 0:04:20.800 --> 0:04:26.080 see any kind of traumatic overall increase in wages. There 0:04:26.120 --> 0:04:29.679 should be more workers coming online in the coming months. 0:04:30.560 --> 0:04:33.520 What about the idea that growth and you know, earnings, 0:04:33.720 --> 0:04:36.799 economic growth and earnings growth has peaked in this quarter 0:04:37.000 --> 0:04:42.159 or is peaking as we speak. I absolutely disagree with that. UM. 0:04:42.200 --> 0:04:45.240 We are just beginning what I think is going to 0:04:45.279 --> 0:04:49.760 be a very strong economic acceleration, and so I don't 0:04:49.800 --> 0:04:52.880 believe earnings have peaked. UM. I don't think we're anywhere 0:04:52.880 --> 0:04:56.440 in you're peaking right now? Alright, Christina, what are the 0:04:56.480 --> 0:04:58.840 sectors that you guys are doing the most work in 0:04:59.080 --> 0:05:05.159 right now? Well, of course, our view is that in 0:05:05.160 --> 0:05:08.360 in an environment like this where the economy is accelerating, 0:05:08.640 --> 0:05:12.920 typically we're going to see cyclicals outperform, and that's likely 0:05:12.960 --> 0:05:16.920 to continue through this year. But that doesn't mean that 0:05:17.000 --> 0:05:22.279 we want to uh completely dismiss or overlook the growth 0:05:22.320 --> 0:05:25.920 side of the equation. In fact, days like today remind 0:05:26.080 --> 0:05:31.040 us that there can be valuation opportunities created in this 0:05:31.120 --> 0:05:36.600 kind of environment, especially for tech. Now are we getting 0:05:36.920 --> 0:05:38.760 Are we now at a point where tech is a 0:05:38.839 --> 0:05:42.440 screening by no um? But it certainly looks more attractive 0:05:42.480 --> 0:05:45.120 today than it did look a few days ago, and 0:05:45.160 --> 0:05:47.520 it could look more attractive in a few more days. 0:05:48.000 --> 0:05:51.400 So for those with a long term investment horizon, which 0:05:51.400 --> 0:05:54.200 I hope that everyone has um, this could be an 0:05:54.240 --> 0:05:57.400 opportunity to pick up some some really attractive names at 0:05:57.440 --> 0:05:59.880 lower prices. How important is it by the way that 0:06:00.000 --> 0:06:05.520 Biden gets his infrastructure his spending plans through, Well, we 0:06:05.640 --> 0:06:09.800 certainly already have a very robust environment in terms of 0:06:09.800 --> 0:06:12.760 physical stimulus. If we look at the US now versus 0:06:13.000 --> 0:06:15.320 how much UM we saw in the way of fiscal 0:06:15.360 --> 0:06:18.800 outlays during global financial crisis to the percentage of GDP. 0:06:18.960 --> 0:06:21.960 We're doing much better now. Um So it's not as important, 0:06:22.000 --> 0:06:24.800 but it would be nice to have Christina. Thanks so 0:06:24.839 --> 0:06:27.520 much for joining us. Christina Hooper is the chief Global 0:06:27.560 --> 0:06:32.400 market strategist at Investo, with more than a trillion dollars 0:06:32.440 --> 0:06:35.680 more than a trillion and a third under management. This 0:06:36.120 --> 0:06:43.000 is Bloomberg. Let's get over now to Mark Nelson. He's 0:06:43.040 --> 0:06:46.960 the CEO of of Tableau UM, which can hardly be 0:06:47.000 --> 0:06:48.800 considered a small cap. They were bought for more than 0:06:48.839 --> 0:06:55.279 fifteen billion dollars by Salesforce back in pre pandemic? Was 0:06:55.320 --> 0:06:58.280 that that deal? Mark joins us on the future of 0:06:58.480 --> 0:07:02.520 enterprise technology and how analytics can transform business. Those are 0:07:02.600 --> 0:07:05.840 kind of jargon e taglines there, Mark, But what are 0:07:05.880 --> 0:07:08.960 you really doing to change the way people work day 0:07:08.960 --> 0:07:13.520 by day? Yeah? Thanks for having me this morning. Um So. 0:07:13.680 --> 0:07:16.040 Our mission here at Tableau has always been to help 0:07:16.040 --> 0:07:20.120 people see and understand data. We're at a point in 0:07:20.120 --> 0:07:24.760 the universe where the ability to gather data, store data, 0:07:24.880 --> 0:07:27.840 process data, and then look at it and make decisions 0:07:27.880 --> 0:07:32.320 from it has really introduced something that is as transformational 0:07:32.400 --> 0:07:35.640 as the microscope or the telescope. It really lets you 0:07:35.760 --> 0:07:38.360 see things about the world around you that have kind 0:07:38.360 --> 0:07:40.800 of always been there, but you've never had the ability 0:07:40.840 --> 0:07:44.280 to see it. And our mission is really to provide 0:07:44.320 --> 0:07:47.119 a tool that lets lets people work with that data, 0:07:47.360 --> 0:07:50.080 understand that data, and answer questions in their day to 0:07:50.160 --> 0:07:53.840 day life. Not just analysts, but every knowledge worker as 0:07:53.840 --> 0:07:56.800 they're doing their jobs, being able to see the data 0:07:56.840 --> 0:07:59.840 that's relevant to them, understand it and make decisions be 0:08:00.120 --> 0:08:04.440 done it. Mark, how has your business of Tableau? How 0:08:04.520 --> 0:08:07.440 did it change during the pandemic? Has it been materially 0:08:07.520 --> 0:08:12.680 changed during the pandemic? Of course they got bought exactly. Yeah, well, 0:08:13.200 --> 0:08:15.440 so to two separate questions that I can talk about. 0:08:15.520 --> 0:08:19.480 So during the pandemic, like the last year, has has 0:08:19.520 --> 0:08:23.240 made every business a go through a digital transformation if 0:08:23.280 --> 0:08:26.160 they weren't already, And the heart of every digital transformation 0:08:26.200 --> 0:08:30.000 is a data transformation. Things have been changing so fast 0:08:30.040 --> 0:08:32.959 in the world and for every business. The businesses that 0:08:32.960 --> 0:08:35.280 have thrived to been the ones have been able to 0:08:35.800 --> 0:08:39.120 empirically measure what's going on in their business and and 0:08:39.240 --> 0:08:42.520 just react to it so much faster. That need to 0:08:42.559 --> 0:08:46.199 be able to see, understand, and react and make decisions 0:08:46.200 --> 0:08:49.040 based on data has been huge, and we've really seen 0:08:49.080 --> 0:08:52.720 that for our customers everywhere, from your customers who are 0:08:52.760 --> 0:08:56.080 quickly adopting a digital model and e commerce to those 0:08:56.160 --> 0:08:58.400 dealing with the front line of the pandemic and trying 0:08:58.440 --> 0:09:00.880 to get out COVID data and trying to to validate 0:09:00.960 --> 0:09:05.160 vaccines on the acquisition. You know, the combination of Tableau 0:09:05.240 --> 0:09:08.280 and Salesforce together um is like putting p bar and 0:09:08.320 --> 0:09:11.480 chocolate together, right, Like you take the amazing Customer three 0:09:11.559 --> 0:09:16.040 sixty application suite from Salesforce that works on and generates 0:09:16.040 --> 0:09:19.319 some of the most valuable data for a business and 0:09:19.360 --> 0:09:21.920 Tableau that let's you see and understand that data and 0:09:21.920 --> 0:09:24.480 get answers from that data, and you just have this 0:09:24.559 --> 0:09:27.000 ability to do things you were never able to do before, 0:09:27.040 --> 0:09:29.520 to really get a sense of your business and that 0:09:29.640 --> 0:09:32.079 sense of where your business is going that you were 0:09:32.080 --> 0:09:35.000 never able to do before. So those two things, and 0:09:35.040 --> 0:09:38.080 you know, temporarily related, but have been great and I 0:09:38.120 --> 0:09:41.400 mean I love that. So Tableau was started, I think 0:09:41.720 --> 0:09:44.760 at least in part with help in the Defense Department right, 0:09:44.840 --> 0:09:49.000 the US and Stanford. Obviously everything starts at Stanford. But 0:09:49.040 --> 0:09:51.960 Mark Benioff calls the company his brother from another mother, 0:09:52.440 --> 0:09:55.280 which I think is pretty cool. And now you're doing 0:09:55.679 --> 0:10:00.360 Now you're helping to UM try and attack the racial 0:10:00.400 --> 0:10:04.360 inequality problem, the sort of diversity and inclusion problems as well. 0:10:04.360 --> 0:10:08.200 How does that work? Yeah? For sure. So data is 0:10:08.280 --> 0:10:12.719 so useful on helping with these large societal problems, right 0:10:12.800 --> 0:10:16.880 that are so emotionally charged and can get wrapped up 0:10:16.920 --> 0:10:21.199 in in a whole bunch of things. Data is our superpower, right. 0:10:21.240 --> 0:10:24.400 What we bring to that is the ability to you know, 0:10:25.080 --> 0:10:28.800 really look at data and understand it, to help understand 0:10:28.840 --> 0:10:33.960 what the problems are, UM, what solutions can be found 0:10:33.960 --> 0:10:36.559 for these and how effective those solutions are. And so 0:10:36.679 --> 0:10:41.040 during this we have launched the Racial Equity Data Hub 0:10:41.240 --> 0:10:44.800 along with our our partners like policy Link, to really 0:10:44.840 --> 0:10:46.880 provide data and to do a couple of things. One 0:10:46.960 --> 0:10:50.080 is to democratize access to that data so a whole 0:10:50.080 --> 0:10:53.160 bunch of people can help work on these really hard problems. 0:10:53.760 --> 0:10:56.760 To de advertise that data so that you can really 0:10:56.800 --> 0:11:00.080 get down to which which groups are really being a 0:11:00.080 --> 0:11:02.840 acted by this, and then ultimately to be able to 0:11:02.920 --> 0:11:05.600 let people see data about these problems, so again we 0:11:05.640 --> 0:11:08.680 can help find solutions and measure the efficacy of those 0:11:08.679 --> 0:11:11.960 solutions as they're implemented. Thanks so much for joining us. 0:11:11.960 --> 0:11:14.760 We really appreciate it. Mark Nelson, see you of Tableau 0:11:15.160 --> 0:11:19.160 talk to us about, you know, enterprise computing, particularly as 0:11:19.280 --> 0:11:22.000 you know, during this pandemic, there's been such a digitization 0:11:22.000 --> 0:11:25.520 of so many businesses, more than than before, and of 0:11:25.559 --> 0:11:28.520 course that generates a tremendous amount of data, and that 0:11:29.000 --> 0:11:31.439 generates demand and in the need for management teams to 0:11:31.480 --> 0:11:33.960 get a real handle on that data and what it 0:11:34.040 --> 0:11:36.640 means for their businesses, and the good folks at Tableau 0:11:37.200 --> 0:11:41.720 help with that. Now, let's bring in Brad McMillan. He's 0:11:41.720 --> 0:11:46.160 the chief investment officer at Commonwealth Financial Network. They have 0:11:46.440 --> 0:11:50.040 about two hundred and thirty three billion dollars in assets 0:11:50.360 --> 0:11:53.640 under management. And let me first ask you about this. 0:11:54.000 --> 0:11:56.400 I think the word sell off has been overused a 0:11:56.400 --> 0:11:59.200 little bit. Certainly, markets are down one and a half 0:11:59.240 --> 0:12:00.719 percent on the day out in the S and P. 0:12:00.880 --> 0:12:03.959 They were down yesterday as well. Does this look like 0:12:04.160 --> 0:12:07.360 we're going into a correction to you, Brad or um, 0:12:07.480 --> 0:12:10.640 how do you judge what is mostly really a big 0:12:10.679 --> 0:12:14.640 tech slump, and I think that's exactly right. The tech 0:12:14.679 --> 0:12:18.000 companies have gotten ahead of themselves a bit um they're 0:12:18.040 --> 0:12:20.640 pulling back, you know. I don't think this is anything 0:12:20.679 --> 0:12:23.280 out of the ordinary. There's a lot of talk about 0:12:23.280 --> 0:12:26.960 inflation going up, but this isn't really news. There's nothing 0:12:27.040 --> 0:12:29.439 news out there, so I think this is just normal action. 0:12:29.720 --> 0:12:31.439 I don't see this. I think this is the start 0:12:31.480 --> 0:12:34.839 of anything worse. All right, So where are you, Brad 0:12:34.880 --> 0:12:38.080 in terms of where you're looking to allocate capital here? 0:12:38.160 --> 0:12:40.320 I mean in the equity markets. It's that pull and 0:12:40.320 --> 0:12:42.720 push between you know. I'm sticking with those big cap 0:12:42.720 --> 0:12:44.640 growth names. They've worked so well for me since the 0:12:44.679 --> 0:12:47.600 financial crisis. Really, if you think back that far, or 0:12:47.640 --> 0:12:50.400 do I play that rotation trade, that reopen trade? Where 0:12:50.440 --> 0:12:54.000 are you kind of looking these days? I think the 0:12:54.120 --> 0:12:56.720 rotation trade makes a lot of sense. Not that the 0:12:56.760 --> 0:12:59.600 big you know, tech megacaps aren't going to do well, 0:12:59.600 --> 0:13:02.560 of course they are, but that's what investors expect. What 0:13:02.640 --> 0:13:05.800 you want to do is play where investors aren't looking yet. 0:13:05.840 --> 0:13:08.680 So when you look at financials, for example, you have 0:13:08.760 --> 0:13:11.080 banks that are all of a sudden starting to make money, 0:13:11.120 --> 0:13:13.280 and as the economy reopens, they're going to be in 0:13:13.280 --> 0:13:16.160 a position to make more. You look at housing, yes, 0:13:16.240 --> 0:13:18.320 that's a story that's gotten a lot of press, but 0:13:18.720 --> 0:13:21.480 the millennials are moving out to the suburbs in a 0:13:21.520 --> 0:13:23.880 big way. In other words, let's gate to where the 0:13:23.880 --> 0:13:26.040 puck is going, not where the puck is and that's 0:13:26.040 --> 0:13:30.199 the rotation track. What do you think about the banks? 0:13:30.240 --> 0:13:34.199 You know, um, they have they're on the upside today 0:13:34.240 --> 0:13:37.800 and they've had some momentum lately with the cyclicals, but um, 0:13:37.840 --> 0:13:40.160 we're not getting any indication that rates are going to 0:13:40.320 --> 0:13:44.480 rise within the next couple of years. And when you 0:13:44.520 --> 0:13:47.120 look at the banks business model, historically that's been a 0:13:47.160 --> 0:13:49.640 red flag, not question. But then when you start to 0:13:49.640 --> 0:13:53.000 look at banks and financial service firms more generally, they're 0:13:53.040 --> 0:13:57.200 moving away from interest rate driven revenue generation. They're moving 0:13:57.240 --> 0:13:59.920 more towards speed. And as you move to a more 0:14:00.040 --> 0:14:05.240 auductized financial economy, you know, some of the biggest financial platforms, 0:14:05.520 --> 0:14:09.239 you know, the major banks, for example, are uniquely positioned 0:14:09.280 --> 0:14:11.840 to start to change that business model. And I think 0:14:11.880 --> 0:14:14.640 that's exactly what you're seeing. So not only will it 0:14:14.720 --> 0:14:19.160 be a more um more reliable revenue stream. It also 0:14:19.480 --> 0:14:22.040 frees them from the curinay of the interest rate cycle. 0:14:22.360 --> 0:14:25.160 That story is not done yet, but that's where they're headed. 0:14:25.480 --> 0:14:27.760 I think that's part of what's driving this and taking 0:14:27.760 --> 0:14:30.840 it away from the interest rate story. Brad. One of 0:14:30.880 --> 0:14:34.800 the concerns out there is taxes and how this tax 0:14:34.880 --> 0:14:38.280 scheme in this country may change going forward, both at 0:14:38.320 --> 0:14:41.880 the corporate level, uh and at the personal level. How 0:14:41.880 --> 0:14:44.880 do you think about that? Well, I look at it 0:14:44.920 --> 0:14:47.560 this way. If you look at the if you look 0:14:47.600 --> 0:14:50.360 at the Biden tax proposal, some of the analyzes I've 0:14:50.360 --> 0:14:54.320 seen says that, okay, that could hit SMP earnings similar 0:14:54.400 --> 0:14:58.200 between five and ten percent depending on sect. Okay, fair enough, 0:14:58.400 --> 0:15:00.480 and you know if you just kind of eight line 0:15:00.560 --> 0:15:03.760 that that could knock some points off the market. But again, 0:15:03.800 --> 0:15:06.120 that's not a big deal in the broad scheme of things. 0:15:06.480 --> 0:15:08.640 And when you start to think about what's actually going 0:15:08.720 --> 0:15:12.040 to happen, which probably isn't what's proposed, and then you 0:15:12.080 --> 0:15:14.080 start to compare that with the time frame and how 0:15:14.120 --> 0:15:17.560 earnings are likely to increase over that time frame, I 0:15:17.560 --> 0:15:20.640 don't think there's gonna be a material impact over time. 0:15:20.960 --> 0:15:23.160 There might be a glitch, but we've got a lot 0:15:23.200 --> 0:15:26.560 of cushion here to absorb that if it happens, and 0:15:26.760 --> 0:15:30.640 it hasn't happened yet. What's the biggest headwind, what's the 0:15:30.640 --> 0:15:34.560 biggest risk that you're that you're watching out for. I'm 0:15:34.560 --> 0:15:39.600 watching employment. One of the things that UM is assumed 0:15:39.600 --> 0:15:42.480 in a lot of analyzes, including mind, is that we're 0:15:42.480 --> 0:15:44.640 going to see job growth, you know, bounce back, and 0:15:44.680 --> 0:15:47.360 we're going to be back to something like normal employment, 0:15:47.400 --> 0:15:50.120 not full employment, something like normal at the end of 0:15:50.120 --> 0:15:52.720 the year. But one of the things that came up 0:15:52.760 --> 0:15:55.360 with the most recent jobs report, I look at the number, 0:15:55.440 --> 0:15:58.000 I'm not worried about the number because a lot of 0:15:58.040 --> 0:16:00.600 that is seasonal adjustments, and if you look at non 0:16:00.600 --> 0:16:03.840 seasonally adjusted numbers were right on tracks. I'm not worried 0:16:03.840 --> 0:16:07.160 about that. But one of the questions is are people 0:16:07.400 --> 0:16:10.080 really willing to go back to work? And I think 0:16:10.160 --> 0:16:12.400 that's something that a lot of us, me included, haven't 0:16:12.400 --> 0:16:15.200 thought about enough. So job growth is going to be 0:16:15.240 --> 0:16:17.840 the key for the rest of the year. Are you 0:16:17.880 --> 0:16:23.040 concerned about wage inflation coming into this economy? Not really. 0:16:23.160 --> 0:16:25.240 And the reason I say that is when you look 0:16:25.280 --> 0:16:28.240 at wage inflation. First of all, it's been depressed for 0:16:28.400 --> 0:16:31.480 the past couple of decades, so you know, I think 0:16:31.480 --> 0:16:35.120 I think some catch up here is frankly overdo. From 0:16:35.160 --> 0:16:37.760 an economic standpoint. You'll hear a lot about the effects 0:16:37.800 --> 0:16:41.000 on inflation, which I don't think it's necessarily the case 0:16:41.040 --> 0:16:45.200 because we don't have the transmission mechanisms like unions and 0:16:45.680 --> 0:16:48.880 wage price agreements that we had in the seventies. But 0:16:49.000 --> 0:16:51.960 more to the more to the point that money is 0:16:51.960 --> 0:16:54.840 going to be spent, that's actually gonna be additive to growth. 0:16:55.160 --> 0:16:57.320 Those people are buying large going to spend the money 0:16:57.360 --> 0:16:59.200 and that's gonna help. I think it's a good thing, 0:16:59.480 --> 0:17:03.040 all right, I really appreciate it. Brad McMillan, chief Investment 0:17:03.080 --> 0:17:06.879 Officer for Commonwealth Financial Network, giving us his thoughts on 0:17:06.920 --> 0:17:13.800 the market. Still long that rotation trade. I want to 0:17:13.800 --> 0:17:16.400 bring in Margaret Franklin. She is the president and CEO 0:17:16.840 --> 0:17:19.199 of the c f A Institute, and so many of 0:17:19.200 --> 0:17:22.639 our listeners Margaret r c f A s or want 0:17:22.680 --> 0:17:24.919 to become c f AS. It's great time to have 0:17:24.960 --> 0:17:26.720 you on because yes yesterday I was talking to a 0:17:26.800 --> 0:17:30.399 younger c f A and of course Paul Sweeney is 0:17:30.520 --> 0:17:35.320 himself an older cf A. I was wondering, has the 0:17:35.359 --> 0:17:40.240 test gotten harder? Are you making it more difficult? Well, 0:17:40.280 --> 0:17:42.920 I think it depends on what you've been focusing on. 0:17:43.000 --> 0:17:45.879 How long ago you wrote it um. Of course the 0:17:46.200 --> 0:17:49.920 test will seem a lot harder UM if you wrote 0:17:49.960 --> 0:17:52.679 it twenty years ago, just because the very nature of 0:17:52.800 --> 0:17:56.960 the capital market. So the quality and rigor are consistent, 0:17:57.080 --> 0:17:59.560 but they do match what's going on in the market. 0:17:59.640 --> 0:18:01.640 So I know I would have to study pretty hard 0:18:01.680 --> 0:18:04.879 for the exams today, irrespective of already having my c 0:18:05.080 --> 0:18:08.359 f A charter. Margaret, I want to talk about a 0:18:08.400 --> 0:18:11.880 topic that's become much much bigger part of the investment process. 0:18:11.960 --> 0:18:14.440 That's E s G investing. You look at the environment, 0:18:14.600 --> 0:18:19.320 social and governance here, how does the cf AS to 0:18:19.480 --> 0:18:22.040 think about E s G and making sure that you 0:18:22.080 --> 0:18:26.520 know it's charter holders, you know what they need to know. Well, 0:18:26.960 --> 0:18:30.080 you've touched on something that has been important for about 0:18:30.080 --> 0:18:34.240 the last five years of note, but has been accelerating 0:18:34.280 --> 0:18:39.480 since Davos in UM two thousand January. And this is 0:18:39.480 --> 0:18:43.120 an excellent example of what is now required of all 0:18:43.119 --> 0:18:47.880 investment professionals, which is lifelong, continuous learning anybody five years 0:18:47.880 --> 0:18:51.200 ago wouldn't have had the E s G skills broadly 0:18:51.280 --> 0:18:55.520 speaking that are required now from a portfolio perspective. So 0:18:55.600 --> 0:18:58.480 in addition to the c f A charter, we have 0:18:58.640 --> 0:19:02.360 launched this year E s G certificate. It was created 0:19:02.400 --> 0:19:05.920 by our c f A u K Society UM and 0:19:05.960 --> 0:19:09.359 we've taken that global in the last two months and 0:19:09.480 --> 0:19:14.280 it really enables UH investment professionals to have the skills 0:19:14.600 --> 0:19:18.720 necessary to think about m E s G, incorporating them 0:19:18.760 --> 0:19:24.720 into their portfolio, security selection and meeting client meeting client needs. 0:19:25.320 --> 0:19:27.919 So that's one aspect of hang on. Is that another 0:19:28.080 --> 0:19:30.800 is that another year of study then or can c 0:19:31.080 --> 0:19:36.160 f A perspectives earned both at the same time. Anybody 0:19:36.240 --> 0:19:38.800 can write it and you can do it concurrent, although 0:19:39.080 --> 0:19:41.760 UM I want to hear from those who are actually 0:19:41.760 --> 0:19:43.919 doing both at the same time and the tips and 0:19:43.960 --> 0:19:46.600 tricks that they're doing for it. UM. Anybody can write it. 0:19:46.640 --> 0:19:50.040 In fact, UM. The experience with the with it initially 0:19:50.080 --> 0:19:52.399 has been that it's a lot of non members and 0:19:52.440 --> 0:19:55.760 non charter holders that are writing it UM and that 0:19:55.840 --> 0:20:00.119 really speaks to the very pervasive need for it. We 0:20:00.160 --> 0:20:04.159 had conducted a study UM of a million linked in 0:20:04.280 --> 0:20:09.000 profiles and in fact UM really less than eight thousand 0:20:09.040 --> 0:20:12.480 people out of a million had listed UM E s 0:20:12.560 --> 0:20:16.160 G skills and then we simultaneously did a look at 0:20:16.200 --> 0:20:20.760 ten thousand job postings and of that almost thirty we're 0:20:20.800 --> 0:20:23.240 looking for those types of skills. So we know out 0:20:23.240 --> 0:20:26.200 there that there is a real supply and demand gap 0:20:26.320 --> 0:20:28.239 and we think that the E s G Certificate does 0:20:28.240 --> 0:20:31.480 a really fabulous job of meeting that. Margaret, I know, 0:20:31.680 --> 0:20:35.040 UH May eighteenth, the Alpha Summit is going to take place. 0:20:35.119 --> 0:20:37.199 You're gonna be part of that. Tell us about the 0:20:37.200 --> 0:20:39.080 summit and kind of what are some of the key 0:20:39.160 --> 0:20:43.920 topics you all plan to tackle there. Well, it's very exciting. 0:20:44.000 --> 0:20:46.600 This is our annual conference, which will be virtual this 0:20:46.680 --> 0:20:51.120 year for investment professionals around the globe. UM. There will 0:20:51.160 --> 0:20:54.560 be live conversations on a broad range of topics and 0:20:54.680 --> 0:20:57.880 they're led by really change makers in the industry. So 0:20:58.080 --> 0:21:02.040 to just UM leverage off the conversation we just had, 0:21:02.480 --> 0:21:06.840 we had our we have our net zero carbon emissions 0:21:06.840 --> 0:21:09.879 conversation that will be with a panel of three but 0:21:10.000 --> 0:21:14.439 most notably Mary Robinson, the former Prime Minister from Ireland 0:21:14.840 --> 0:21:18.840 UH and Special Envoy to UM Special Envoy to the 0:21:18.920 --> 0:21:22.080 u N on Climate is going to be part of 0:21:22.080 --> 0:21:25.119 that conversation and in our preparation for it, one of 0:21:25.119 --> 0:21:27.120 the things she said was, this is the most important 0:21:27.200 --> 0:21:30.080 year coming up to Cup twenty six in probably one 0:21:30.080 --> 0:21:34.000 of the most important moments in time for humankind UM. 0:21:34.119 --> 0:21:36.439 And so it's really getting the right people at the 0:21:36.440 --> 0:21:40.639 table for those important topics. We have Shiro Mazzouno, who 0:21:40.800 --> 0:21:45.160 is UN Special Envoy on Innovative Finance and Sustainable Investment, 0:21:45.200 --> 0:21:47.960 and of course he's just come off of the UM 0:21:48.080 --> 0:21:54.000 the reformational Chief Investment Office for the world's largest pension 0:21:54.080 --> 0:21:58.280 plan UH, the Japan gp I F and a really 0:21:58.359 --> 0:22:04.120 provocative think are very vocal on how to implement portfolios 0:22:04.160 --> 0:22:10.320 with the climate aspect to it. We've got Michael Lewis speaking. Yeah. Yeah, 0:22:10.440 --> 0:22:13.840 so you know he speaks about every few years when 0:22:13.880 --> 0:22:19.920 he's got a good provocative book out. He's articulate, he's entertaining, 0:22:20.119 --> 0:22:23.119 and he holds no punches at all when he is 0:22:23.160 --> 0:22:26.800 speaking to this particular audience because it's investment professionals and 0:22:26.840 --> 0:22:31.200 capital allocators. Yeah. Absolutely, And we're starting to see Margaret 0:22:31.359 --> 0:22:37.040 Um issues pop up about compliance, know your customer again 0:22:37.240 --> 0:22:40.639 kind of we're starting to see almost great financial crisis 0:22:40.720 --> 0:22:45.080 style issues, not that that prevalent, of course, how important 0:22:45.160 --> 0:22:47.760 is that in the CFA And are there are there 0:22:47.800 --> 0:22:50.920 aspects of the tests that you have been emphasizing more 0:22:50.960 --> 0:22:54.560 than others as as time goes on. Yeah, So I think, 0:22:54.960 --> 0:22:57.320 first of all, let me start by saying everything with 0:22:57.480 --> 0:23:01.720 the E with cf A really does center on ethical 0:23:01.920 --> 0:23:06.160 and fiduciary orientation. That is, putting your clients interests ahead 0:23:06.160 --> 0:23:11.080 of yourself and critically important to build and restore trust 0:23:11.119 --> 0:23:15.000 within the system. UM. We do have, obviously, the cf 0:23:15.000 --> 0:23:18.760