1 00:00:01,760 --> 00:00:05,000 Speaker 1: Thanks for joining us on this special edition of Bloomberg Daybreak. 2 00:00:05,120 --> 00:00:08,080 Speaker 1: US markets are closed for the Martin Luther King Day holiday. 3 00:00:08,440 --> 00:00:11,200 Speaker 1: I'm Nathan Hager and coming up this hour on this 4 00:00:11,320 --> 00:00:13,880 Speaker 1: day honoring doctor King. Well, look at the current state 5 00:00:13,920 --> 00:00:17,959 Speaker 1: of diversity, equity and inclusion initiatives, where DEI stands in 6 00:00:18,000 --> 00:00:21,400 Speaker 1: corporate America today. Plus we'll preview the Fed's first rate 7 00:00:21,440 --> 00:00:23,800 Speaker 1: policy decision of the year with the Central Bank and 8 00:00:23,920 --> 00:00:28,040 Speaker 1: Chair J. Powell under investigation. But we begin with the markets. 9 00:00:28,160 --> 00:00:31,600 Speaker 1: Stocks are coming off three straight years of double digit gains? 10 00:00:31,840 --> 00:00:34,279 Speaker 1: Could this one be the fourth? Joining us now our 11 00:00:34,360 --> 00:00:38,040 Speaker 1: Cameron Dawson, chief investment officer at New Edgewealth, and RBC 12 00:00:38,120 --> 00:00:41,720 Speaker 1: Capital Markets, Head of US equity strategy, Lori Calvesina. It 13 00:00:41,760 --> 00:00:43,680 Speaker 1: is great to have both of you with us on 14 00:00:43,720 --> 00:00:45,640 Speaker 1: this holiday. And you know, I think a lot of 15 00:00:45,640 --> 00:00:48,519 Speaker 1: analysts were expecting that this year would get off to 16 00:00:48,600 --> 00:00:52,520 Speaker 1: a choppy start. But Cam, were you expecting this kind 17 00:00:52,520 --> 00:00:53,240 Speaker 1: of chop. 18 00:00:53,040 --> 00:00:56,880 Speaker 2: Well, it certainly has been a deluge of news, especially 19 00:00:56,920 --> 00:01:00,720 Speaker 2: coming out of Washington, which we do expect to continue 20 00:01:00,760 --> 00:01:03,720 Speaker 2: through the year. We thought that analysts were rather rosy 21 00:01:03,760 --> 00:01:07,200 Speaker 2: in thinking that Washington policy would be just a tailwind 22 00:01:07,480 --> 00:01:09,600 Speaker 2: over the course of twenty twenty six, but we do 23 00:01:09,680 --> 00:01:12,280 Speaker 2: see it as a source of volatility, and I think 24 00:01:12,280 --> 00:01:14,759 Speaker 2: that the reason for that is that we're coming into 25 00:01:14,760 --> 00:01:18,560 Speaker 2: this year with high valuations twenty two times forward. We 26 00:01:18,600 --> 00:01:21,759 Speaker 2: came into this year with also high earnings expectations fifteen 27 00:01:21,800 --> 00:01:24,880 Speaker 2: percent growth three hundred and ten dollars a share. It's 28 00:01:24,920 --> 00:01:27,760 Speaker 2: not that these things aren't achievable, but it's just that 29 00:01:27,840 --> 00:01:31,040 Speaker 2: it creates a very high bar for returns unless we 30 00:01:31,120 --> 00:01:34,319 Speaker 2: forget this is a fourth year potentially of a bull market, 31 00:01:34,360 --> 00:01:36,480 Speaker 2: which tends to have a fifty to fifty hit rate 32 00:01:36,560 --> 00:01:39,040 Speaker 2: as to whether or not it can continue. And it's 33 00:01:39,040 --> 00:01:42,520 Speaker 2: a midterm election yard which tends to carry more volatility 34 00:01:42,640 --> 00:01:45,919 Speaker 2: and lower returns than the other years in the election cycle. 35 00:01:46,200 --> 00:01:48,000 Speaker 2: So it's not to say that good things can't happen, 36 00:01:48,080 --> 00:01:50,000 Speaker 2: but it could be choppy along the way. 37 00:01:50,440 --> 00:01:53,440 Speaker 1: Lurie, we'll bring you into this conversation. Now, there had 38 00:01:53,480 --> 00:01:55,080 Speaker 1: been a lot of talk at the end of last 39 00:01:55,160 --> 00:01:58,520 Speaker 1: year about policy affecting the market, but I think maybe 40 00:01:58,520 --> 00:02:02,280 Speaker 1: we were thinking about policy and monetary policy, and then 41 00:02:02,280 --> 00:02:06,680 Speaker 1: we've got geopolitical risk and pressure on the FED as well. 42 00:02:06,880 --> 00:02:08,960 Speaker 1: How does that affect your focus right now. 43 00:02:09,280 --> 00:02:11,480 Speaker 3: Sure, So you know, I would say generally we agree 44 00:02:11,480 --> 00:02:13,959 Speaker 3: with cam right. You know, we have a thirteen percent 45 00:02:14,000 --> 00:02:15,760 Speaker 3: target on the S and P five hundred this year, 46 00:02:15,760 --> 00:02:18,960 Speaker 3: but we you know, very much said we expected a 47 00:02:19,000 --> 00:02:21,359 Speaker 3: five to ten percent draw down within the context of that. 48 00:02:21,360 --> 00:02:24,440 Speaker 3: That's a garden variety, Tier one type pulldown. But you're 49 00:02:24,480 --> 00:02:27,120 Speaker 3: dead right on the policy issue, Nathan. I mean, when 50 00:02:27,120 --> 00:02:30,040 Speaker 3: I was seeing clients in December, I was getting an 51 00:02:30,080 --> 00:02:34,040 Speaker 3: earful about stimulus past, present and future. And in the past, 52 00:02:34,080 --> 00:02:36,320 Speaker 3: you know, that was the one big beautiful bill tax 53 00:02:36,400 --> 00:02:40,720 Speaker 3: refunds coming in April, and then perhaps getting some additional 54 00:02:40,720 --> 00:02:44,600 Speaker 3: stimulus for the consumer because of midterm dynamics and kind 55 00:02:44,600 --> 00:02:47,520 Speaker 3: of the affordability issues that had had an impact on 56 00:02:47,560 --> 00:02:50,680 Speaker 3: the November results. And I don't think that anyone really 57 00:02:50,720 --> 00:02:52,520 Speaker 3: had it on their Bingo card to get hit over 58 00:02:52,560 --> 00:02:56,000 Speaker 3: the head with geopolitical risk to start the year. We 59 00:02:56,120 --> 00:02:58,680 Speaker 3: did actually flag in terms of some of the risks 60 00:02:58,760 --> 00:03:02,680 Speaker 3: headwinds that we were monitoring this year, the impulse towards 61 00:03:02,720 --> 00:03:06,519 Speaker 3: geographic diversification, and just pointed out that last year the 62 00:03:06,560 --> 00:03:09,240 Speaker 3: doors did seem to open to that where investors were 63 00:03:09,280 --> 00:03:11,880 Speaker 3: more willing to look outside the US. We're having trouble 64 00:03:11,919 --> 00:03:15,600 Speaker 3: focusing on other specific geographies, and did you know kind 65 00:03:15,639 --> 00:03:17,160 Speaker 3: of the move we saw out of the US into 66 00:03:17,160 --> 00:03:20,960 Speaker 3: Europe proved pretty fleeting, and you know, when we've sort 67 00:03:21,000 --> 00:03:22,799 Speaker 3: of looked at some of the issues that we've had 68 00:03:22,840 --> 00:03:24,640 Speaker 3: to start the year, and you know, in terms of 69 00:03:24,639 --> 00:03:28,079 Speaker 3: geopolitics fed independence, we have pointed out that that sort 70 00:03:28,120 --> 00:03:31,480 Speaker 3: of may end up raising the risk for that geographical diversification. 71 00:03:31,520 --> 00:03:33,600 Speaker 3: We'll have to wait and see, but that's you know, 72 00:03:33,680 --> 00:03:35,600 Speaker 3: kind of how it's played into our thinking so far 73 00:03:35,640 --> 00:03:35,920 Speaker 3: this year. 74 00:03:36,000 --> 00:03:38,800 Speaker 1: Yeah, it is interesting, isn't it that just these last 75 00:03:38,840 --> 00:03:41,360 Speaker 1: few days of events or a couple of weeks of 76 00:03:41,400 --> 00:03:44,320 Speaker 1: events have led to this new debate about whether the 77 00:03:44,400 --> 00:03:47,520 Speaker 1: Cell America trade is back. How are you thinking about 78 00:03:47,520 --> 00:03:48,600 Speaker 1: that right now, Cameron? 79 00:03:48,960 --> 00:03:51,960 Speaker 2: Well, certainly, by America was such a consensus trade at 80 00:03:51,960 --> 00:03:54,320 Speaker 2: the beginning of twenty twenty five, and you could see 81 00:03:54,320 --> 00:03:57,480 Speaker 2: that in dollar positioning people were max long the dollar. 82 00:03:57,920 --> 00:04:00,760 Speaker 2: And so now there's this notion of sell America and 83 00:04:00,840 --> 00:04:04,040 Speaker 2: expecting a weaker dollar in twenty twenty six. That's actually 84 00:04:04,040 --> 00:04:06,600 Speaker 2: one of the most consensus trades that we can see. 85 00:04:06,920 --> 00:04:10,680 Speaker 2: But what'sas fascinating is that dollar positioning is starting the 86 00:04:10,760 --> 00:04:14,600 Speaker 2: year already negative. It's not quite at extreme negative levels, 87 00:04:14,920 --> 00:04:17,719 Speaker 2: but just to say that consensus is already reflected in 88 00:04:17,760 --> 00:04:20,719 Speaker 2: the positioning. So as we learned in twenty twenty five 89 00:04:20,800 --> 00:04:22,960 Speaker 2: to be surprised when everybody's on the same side of 90 00:04:23,000 --> 00:04:25,520 Speaker 2: the boat, we should probably have that same notion in 91 00:04:25,560 --> 00:04:28,600 Speaker 2: twenty twenty six. And I'd say that that sell America 92 00:04:28,640 --> 00:04:32,360 Speaker 2: has also come with this notion of a global reacceleration. 93 00:04:32,800 --> 00:04:35,760 Speaker 2: People are pointing to really strong performance out of some 94 00:04:35,880 --> 00:04:38,480 Speaker 2: of the commodities, out of some of the more cyclical 95 00:04:38,520 --> 00:04:43,680 Speaker 2: sectors of the global equity market, expecting a reacceleration the challenges. 96 00:04:43,800 --> 00:04:45,640 Speaker 2: You're not quite seeing it in the data yet, but 97 00:04:45,680 --> 00:04:48,520 Speaker 2: always do remember that price does lead data. 98 00:04:48,880 --> 00:04:52,160 Speaker 1: It's an interesting dynamic when you think about the potential 99 00:04:52,240 --> 00:04:57,280 Speaker 1: for further dollar weakness that could possibly be a tailwind 100 00:04:57,520 --> 00:04:59,560 Speaker 1: for stocks. It's it's kind of been that way in 101 00:04:59,600 --> 00:05:00,840 Speaker 1: the past, Hesnant Lourie. 102 00:05:01,880 --> 00:05:04,320 Speaker 3: You know, it's interesting whenever these issues come up on 103 00:05:04,400 --> 00:05:06,680 Speaker 3: currency in particular, we always, you know, sort of use 104 00:05:06,760 --> 00:05:10,280 Speaker 3: the phrase complex dynamics for equities, and I think that's 105 00:05:10,320 --> 00:05:12,720 Speaker 3: exactly right. I mean, sometimes these issues right that can 106 00:05:12,720 --> 00:05:15,440 Speaker 3: push the dollar down, you know, seam risk off you know, 107 00:05:15,480 --> 00:05:18,239 Speaker 3: and our risk off you know, and kind of us negative. 108 00:05:18,279 --> 00:05:20,400 Speaker 3: But at the same time, what we see from an 109 00:05:20,400 --> 00:05:23,559 Speaker 3: earnings perspective is that the rate of upward revisions tends 110 00:05:23,600 --> 00:05:26,640 Speaker 3: to rise. When you see the dollar weekend year over 111 00:05:26,760 --> 00:05:29,279 Speaker 3: year and you see it, you know, the impact hits 112 00:05:29,320 --> 00:05:31,680 Speaker 3: different sectors differently, So you don't see as much of 113 00:05:31,720 --> 00:05:34,360 Speaker 3: an impact on say financials and utilities, but you do 114 00:05:34,400 --> 00:05:39,440 Speaker 3: on things say like industrials, materials, consumer staples. Even the 115 00:05:39,480 --> 00:05:42,200 Speaker 3: tech companies have a fair amount of international revenue exposure, 116 00:05:42,240 --> 00:05:44,720 Speaker 3: though they don't usually call it out quite as much. 117 00:05:45,440 --> 00:05:48,120 Speaker 3: So it's you know, it's always tricky when these issues 118 00:05:48,160 --> 00:05:50,640 Speaker 3: come up that yes, there are positives, there are there 119 00:05:50,640 --> 00:05:52,760 Speaker 3: are negatives, but there are also some positives as well. 120 00:05:53,120 --> 00:05:56,000 Speaker 1: Speaking with Lori Calvcin, ahead of US Equity Strategy at 121 00:05:56,040 --> 00:05:59,640 Speaker 1: RBC Capital Markets along with Cameron Dawson, chief investment officer 122 00:06:00,120 --> 00:06:03,960 Speaker 1: at New Edge Wealth, Cameron, given all these dynamics, how 123 00:06:03,960 --> 00:06:07,120 Speaker 1: are you thinking about sector plays right now? And the 124 00:06:07,200 --> 00:06:11,440 Speaker 1: debate around the artificial intelligence trade as well. It's been 125 00:06:11,480 --> 00:06:14,080 Speaker 1: such a dominant theme over the last couple of years 126 00:06:14,120 --> 00:06:16,640 Speaker 1: in the market. How are you thinking about that right now? 127 00:06:16,839 --> 00:06:20,520 Speaker 2: I think it's really interesting and maybe even peculiar that 128 00:06:20,760 --> 00:06:23,560 Speaker 2: some of those weaker parts of the market are the 129 00:06:23,600 --> 00:06:26,359 Speaker 2: parts that you would expect to be the strongest in 130 00:06:26,440 --> 00:06:30,440 Speaker 2: a period when we are seeing a secular change in technology. 131 00:06:30,839 --> 00:06:33,880 Speaker 2: If you look at the overall technology sector, it has 132 00:06:34,000 --> 00:06:37,080 Speaker 2: been trading heavier despite the fact that it's earning sestements 133 00:06:37,120 --> 00:06:39,560 Speaker 2: are still going up, and a lot of that weakness 134 00:06:39,640 --> 00:06:42,560 Speaker 2: is coming down into the software line of things. Meaning 135 00:06:42,600 --> 00:06:44,440 Speaker 2: if you look at the big software weights like a 136 00:06:44,520 --> 00:06:48,440 Speaker 2: Microsoft and a Palanteer, they both have been trading heavy, 137 00:06:48,480 --> 00:06:52,159 Speaker 2: and what's fascinating is that it's all multiple compression. Earning 138 00:06:52,200 --> 00:06:55,480 Speaker 2: sestments in fact are still going up. So the fact 139 00:06:55,480 --> 00:06:58,680 Speaker 2: that we are still in this technology renaissance and yet 140 00:06:58,720 --> 00:07:00,919 Speaker 2: the names that are supposed to be benefiting from it 141 00:07:01,120 --> 00:07:04,080 Speaker 2: most are not participating to the same degree in this 142 00:07:04,200 --> 00:07:06,880 Speaker 2: rally does cause us to raise a bit of an eyebrow. 143 00:07:07,200 --> 00:07:08,800 Speaker 2: But what we would say is that if you see 144 00:07:08,920 --> 00:07:12,760 Speaker 2: enough multiple compression, enough derating in these areas, they start 145 00:07:12,760 --> 00:07:15,920 Speaker 2: to look a lot more attractive. Given the resilient earnings picture. 146 00:07:16,240 --> 00:07:19,080 Speaker 1: What kind of opportunities are you looking at Lorie in 147 00:07:19,160 --> 00:07:22,200 Speaker 1: terms of the rotation trade, and whether you know, any 148 00:07:22,280 --> 00:07:25,040 Speaker 1: of these risks that we've been talking about affect the 149 00:07:25,160 --> 00:07:29,560 Speaker 1: idea of investors looking past tech into some of the 150 00:07:29,640 --> 00:07:31,280 Speaker 1: less loved sectors in the market. 151 00:07:31,640 --> 00:07:34,160 Speaker 3: So the one thing we saw in our December meetings, Nathan, 152 00:07:34,160 --> 00:07:37,040 Speaker 3: that I think has really carried over into January is 153 00:07:37,040 --> 00:07:39,800 Speaker 3: that when it comes to sectors, people's eyes absolutely light 154 00:07:39,880 --> 00:07:41,400 Speaker 3: up when I get to the page in my deck 155 00:07:41,600 --> 00:07:44,960 Speaker 3: that shows what's cheap or at least what's reasonably valued. 156 00:07:44,960 --> 00:07:46,480 Speaker 3: And if you look at that page right now, what 157 00:07:46,520 --> 00:07:50,360 Speaker 3: you're going to see is Industrials, utilities, and technology are 158 00:07:50,840 --> 00:07:53,760 Speaker 3: three of the four expensive sectors in the market right now, 159 00:07:53,760 --> 00:07:55,480 Speaker 3: and they were sort of on the first wave of 160 00:07:55,520 --> 00:07:58,960 Speaker 3: the AI trade, right the build out the foundation of 161 00:07:59,000 --> 00:08:02,240 Speaker 3: that trade. And when you look at sectors like financials, 162 00:08:02,280 --> 00:08:05,240 Speaker 3: healthcare materials, those are three of our overweights. You've got 163 00:08:05,320 --> 00:08:09,200 Speaker 3: very reasonable valuations there, not cheap you know, by on 164 00:08:09,280 --> 00:08:13,160 Speaker 3: certain metrics, but looking very very reasonable. And investors also 165 00:08:13,360 --> 00:08:15,880 Speaker 3: have really, you know, wanted to explore things like consumer 166 00:08:15,920 --> 00:08:19,600 Speaker 3: staples which look a bit cheaper, come services we just upgraded, 167 00:08:19,600 --> 00:08:22,200 Speaker 3: which has looked much cheaper on our metrics, and I 168 00:08:22,200 --> 00:08:24,560 Speaker 3: would say as we talk about some of those sectors, 169 00:08:24,560 --> 00:08:27,080 Speaker 3: you know, healthcare is probably a good example where Earning's 170 00:08:27,080 --> 00:08:29,840 Speaker 3: revisions have been strong, Revenue revisions have been strong. Again, 171 00:08:29,840 --> 00:08:32,400 Speaker 3: the valuations look good, flows look good. But often the 172 00:08:32,440 --> 00:08:35,440 Speaker 3: conversation will turn to AI and you know, clients will 173 00:08:35,440 --> 00:08:38,240 Speaker 3: bring up the idea, is this a sector that can 174 00:08:38,320 --> 00:08:41,640 Speaker 3: see benefits from AI in the coming year? And I think, 175 00:08:41,760 --> 00:08:44,199 Speaker 3: you know, that is something that is a question, you 176 00:08:44,240 --> 00:08:46,520 Speaker 3: know that people have on their minds as they're looking 177 00:08:46,559 --> 00:08:49,079 Speaker 3: maybe not to abandon the AI trade, right, but maybe 178 00:08:49,120 --> 00:08:50,559 Speaker 3: just to take it to its next iteration. 179 00:08:51,000 --> 00:08:52,880 Speaker 1: And Cameron, how are you looking at some of those 180 00:08:52,920 --> 00:08:57,079 Speaker 1: sectors outside of big tech given the economic backdrop and 181 00:08:57,160 --> 00:09:02,040 Speaker 1: the idea of something of a case shaped economic growth picture. 182 00:09:02,440 --> 00:09:02,680 Speaker 4: Yeah. 183 00:09:02,720 --> 00:09:05,760 Speaker 2: One of the key ratios that we watch is the 184 00:09:05,840 --> 00:09:10,480 Speaker 2: ratio between equal weight consumer discretionary versus consumer staples. We 185 00:09:10,559 --> 00:09:14,120 Speaker 2: see this as the equity markets determination as to whether 186 00:09:14,200 --> 00:09:17,000 Speaker 2: or not the consumer should deserve the benefit of the 187 00:09:17,040 --> 00:09:19,880 Speaker 2: doubt to the upside. And despite all of the things 188 00:09:19,920 --> 00:09:22,080 Speaker 2: that we have thrown at the consumer, what we've seen 189 00:09:22,120 --> 00:09:24,800 Speaker 2: is that ratio has continued to remain in an uptrend, 190 00:09:25,120 --> 00:09:29,680 Speaker 2: which has coincided with an uptrend in expectations for household 191 00:09:29,679 --> 00:09:34,200 Speaker 2: consumptions or upward revisions for GDP and household consumption. That's 192 00:09:34,280 --> 00:09:37,160 Speaker 2: important because when we think about the K shaped economy, 193 00:09:37,400 --> 00:09:39,960 Speaker 2: it's very much like a market weighted index, meaning that 194 00:09:40,000 --> 00:09:43,920 Speaker 2: the largest weights in the index or in the economy 195 00:09:43,960 --> 00:09:46,920 Speaker 2: are also the strongest, so they make the aggregate data 196 00:09:46,960 --> 00:09:50,040 Speaker 2: look a lot better. It's the lower weights, smaller weights 197 00:09:50,040 --> 00:09:52,800 Speaker 2: in the index that are much weaker. Same with being 198 00:09:52,840 --> 00:09:56,640 Speaker 2: in the overall consumer that is not affecting the aggregate data, 199 00:09:56,960 --> 00:10:00,000 Speaker 2: but it's also why sentiment surveys are so weak, because 200 00:10:00,240 --> 00:10:03,720 Speaker 2: the effectively equal weight every vote. So it's a fascinating 201 00:10:03,840 --> 00:10:07,080 Speaker 2: kind of complex where we're seeing this. Still consumer data 202 00:10:07,120 --> 00:10:10,839 Speaker 2: remain resilient, but consumers on the equal weight basis are 203 00:10:10,880 --> 00:10:13,400 Speaker 2: still feeling very poor about the economy. 204 00:10:13,600 --> 00:10:15,800 Speaker 1: And Laurie, you mentioned that a lot of the clients 205 00:10:15,800 --> 00:10:18,440 Speaker 1: that you've been speaking to are looking for more fairly 206 00:10:18,679 --> 00:10:23,600 Speaker 1: valued pockets of the market. Are you finding any opportunities 207 00:10:23,679 --> 00:10:26,360 Speaker 1: in MidCap to small cap stocks. 208 00:10:26,040 --> 00:10:28,520 Speaker 3: So it's a great question, and small caps are taking 209 00:10:28,600 --> 00:10:30,680 Speaker 3: up a fair amount of the conversation. I think every 210 00:10:30,720 --> 00:10:32,640 Speaker 3: strategist in the world is out there making a bullish 211 00:10:32,720 --> 00:10:35,720 Speaker 3: case on small cap right now. And I'm a former 212 00:10:35,760 --> 00:10:38,040 Speaker 3: small cap strategist, so I would say my sort of 213 00:10:38,080 --> 00:10:41,280 Speaker 3: criticism of the discussion that's going on is not that 214 00:10:41,400 --> 00:10:44,200 Speaker 3: I necessarily think people are completely wrong on their bottom line, 215 00:10:44,200 --> 00:10:46,760 Speaker 3: but maybe getting a little bit over their skis, you know, 216 00:10:46,840 --> 00:10:49,839 Speaker 3: and maybe oversimplifying what's going on. So if you look 217 00:10:49,880 --> 00:10:51,640 Speaker 3: at small cap one of the things we actually called 218 00:10:51,640 --> 00:10:54,160 Speaker 3: out in our latest weekly on valuations is that we're 219 00:10:54,160 --> 00:10:56,880 Speaker 3: trading at an eighteen and a half times next twelve 220 00:10:56,960 --> 00:10:59,800 Speaker 3: months pe Now that's not a terrible pe by any 221 00:11:00,320 --> 00:11:02,360 Speaker 3: It is a bit above average, not as much above 222 00:11:02,360 --> 00:11:05,079 Speaker 3: average as say the large cap indices or the megacap names. 223 00:11:05,360 --> 00:11:07,560 Speaker 3: But the last peak we had in this index was 224 00:11:07,600 --> 00:11:10,160 Speaker 3: laid in twenty twenty four at about nineteen point one, 225 00:11:10,559 --> 00:11:12,520 Speaker 3: So there's some room, but not a lot of room 226 00:11:12,600 --> 00:11:15,760 Speaker 3: right before we go back and test those past peaks. Similarly, 227 00:11:15,800 --> 00:11:18,760 Speaker 3: if you look at CFTC positioning on small caps in 228 00:11:18,840 --> 00:11:21,559 Speaker 3: terms of just futures exposure, it's a good gauge of 229 00:11:21,640 --> 00:11:24,920 Speaker 3: kind of positioning and sentiment that's no longer net short 230 00:11:24,960 --> 00:11:27,000 Speaker 3: the way it was, you know, several months back. So 231 00:11:27,080 --> 00:11:29,360 Speaker 3: we think things are getting a bit harder to justify 232 00:11:29,760 --> 00:11:31,880 Speaker 3: in here on small caps, and of course we've sort 233 00:11:31,880 --> 00:11:35,120 Speaker 3: of seen a series of rate cut catalysts propel this 234 00:11:35,240 --> 00:11:37,920 Speaker 3: space up. We're you know, outperforming large but those trades 235 00:11:37,960 --> 00:11:40,520 Speaker 3: fizzled out very fast, and our team at least is 236 00:11:40,520 --> 00:11:42,280 Speaker 3: not looking for any more cuts this year, so we 237 00:11:42,320 --> 00:11:44,400 Speaker 3: think that's largely behind us. So what does that leave 238 00:11:44,440 --> 00:11:46,520 Speaker 3: you with. It leaves you with the economy, and there's 239 00:11:46,559 --> 00:11:50,160 Speaker 3: a lot of cyclical excitement that's building, but consensus GDP 240 00:11:50,280 --> 00:11:53,280 Speaker 3: forecasts for four Q are still only at around two 241 00:11:53,320 --> 00:11:56,679 Speaker 3: point one percent, and that's really not even back to average. 242 00:11:56,800 --> 00:12:01,240 Speaker 3: We also generally need to see ism manufacturing right NFP 243 00:12:01,440 --> 00:12:04,240 Speaker 3: data on a monthly bet is the job's number accelerating. 244 00:12:04,520 --> 00:12:07,440 Speaker 3: We're not getting either of those things right now. I 245 00:12:07,480 --> 00:12:09,920 Speaker 3: do like the earnings dynamics and small caps. We've got 246 00:12:09,960 --> 00:12:11,840 Speaker 3: some cool things going on on the rate of upward 247 00:12:11,840 --> 00:12:15,520 Speaker 3: revisions inching to new highs. Forecastic growth rates are better. 248 00:12:15,840 --> 00:12:17,599 Speaker 3: But at the end of the day, we need this 249 00:12:17,679 --> 00:12:20,880 Speaker 3: cyclical excitement to really come through in a much bigger 250 00:12:20,920 --> 00:12:22,480 Speaker 3: way than what we're seeing in either kind of the 251 00:12:22,559 --> 00:12:26,040 Speaker 3: GDP numbers or some of those more tactical indicators right now, 252 00:12:26,080 --> 00:12:28,000 Speaker 3: so we're definitely more interested in this space. What we 253 00:12:28,040 --> 00:12:29,800 Speaker 3: do think people need to calm down a little bit 254 00:12:29,800 --> 00:12:31,880 Speaker 3: and take it a little bit more day by day. 255 00:12:32,080 --> 00:12:35,160 Speaker 1: Our thanks to Lori calvacinahead of US Equity Strategy at 256 00:12:35,240 --> 00:12:39,360 Speaker 1: RBC Capital Markets, and Cameron Dawson, chief investment officer at 257 00:12:39,400 --> 00:12:41,720 Speaker 1: New Edge Wealth. Up next, we'll look ahead to the 258 00:12:41,720 --> 00:12:44,520 Speaker 1: first FED rate decision of the year and the controversy 259 00:12:44,600 --> 00:12:48,480 Speaker 1: swirling around FED independence. It's twenty minutes past the hour. 260 00:12:48,640 --> 00:13:02,520 Speaker 1: I'm Nathan Hager, and this is Bloomberg. Welcome back to 261 00:13:02,559 --> 00:13:05,920 Speaker 1: this special edition of Bloomberg Daybreak. US markets are closed 262 00:13:05,960 --> 00:13:08,880 Speaker 1: for the Martin Luther King Holiday. I'm Nathan Hager, and 263 00:13:08,920 --> 00:13:11,320 Speaker 1: we want to turn now to the FED lost in 264 00:13:11,360 --> 00:13:14,560 Speaker 1: the recent controversy over the investigation into the Central Bank 265 00:13:14,600 --> 00:13:17,760 Speaker 1: and share J. Powell is monetary policy. We've got the 266 00:13:17,760 --> 00:13:20,679 Speaker 1: first FED rate decision of the year coming up next week. 267 00:13:21,040 --> 00:13:23,000 Speaker 1: Ahead of that, we're joined by the man who will 268 00:13:23,000 --> 00:13:25,240 Speaker 1: be in the room for the first Powell news conference 269 00:13:25,240 --> 00:13:28,280 Speaker 1: of the year. Michael McKee is with us Bloomberg's International 270 00:13:28,280 --> 00:13:32,120 Speaker 1: Economics and Policy correspondent, along with Anna Wong, Chief US 271 00:13:32,200 --> 00:13:35,280 Speaker 1: economist for Bloomberg Economics. Thanks to both of you for 272 00:13:35,360 --> 00:13:38,280 Speaker 1: being with us. Of course, we've heard from Chairman Powell 273 00:13:38,440 --> 00:13:40,800 Speaker 1: in just the last few days talking about the probe. 274 00:13:40,920 --> 00:13:41,960 Speaker 1: Here's what he had to say. 275 00:13:42,360 --> 00:13:45,520 Speaker 5: I have served at the Federal Reserve under four administrations, 276 00:13:45,640 --> 00:13:49,920 Speaker 5: Republicans and Democrats alike. In every case, I have carried 277 00:13:49,960 --> 00:13:54,199 Speaker 5: out my duties without political fear or favor, focused solely 278 00:13:54,280 --> 00:13:59,280 Speaker 5: on our mandate of price stability and maximum employment. Public 279 00:13:59,320 --> 00:14:02,760 Speaker 5: service sometimes requires standing firm in the face of threats. 280 00:14:03,840 --> 00:14:06,520 Speaker 5: I will continue to do the job the Senate confirmed 281 00:14:06,600 --> 00:14:10,199 Speaker 5: me to do with integrity and a commitment to serving 282 00:14:10,400 --> 00:14:11,320 Speaker 5: the American people. 283 00:14:11,520 --> 00:14:15,800 Speaker 1: Certainly not mincing words there, of course, doctor Wong, what 284 00:14:15,880 --> 00:14:19,840 Speaker 1: are the implications of this investigation for the decision coming 285 00:14:19,920 --> 00:14:20,560 Speaker 1: up next week? 286 00:14:21,000 --> 00:14:25,640 Speaker 6: So you know, Powell often has always been the center 287 00:14:25,760 --> 00:14:28,480 Speaker 6: in the committee, or even last year a little bit 288 00:14:28,880 --> 00:14:32,920 Speaker 6: more dovish than the center, and always been the one 289 00:14:32,920 --> 00:14:37,440 Speaker 6: who you know, pushed back against the hawkish faction that 290 00:14:37,480 --> 00:14:40,760 Speaker 6: we have seen in the last year. And now we 291 00:14:40,880 --> 00:14:44,240 Speaker 6: have seen in this video response a version of the 292 00:14:44,240 --> 00:14:47,560 Speaker 6: Pale that is a bit different from what we have seen. 293 00:14:47,600 --> 00:14:51,560 Speaker 6: He he is not as cool as a cucumber he is. 294 00:14:51,720 --> 00:14:56,320 Speaker 6: I think he has finally had enough of the intakes 295 00:14:56,320 --> 00:14:58,520 Speaker 6: from the White House, and I think he would be 296 00:14:58,880 --> 00:15:02,760 Speaker 6: less of a champion of rate cuts than otherwise, even 297 00:15:02,880 --> 00:15:07,320 Speaker 6: if you know, marginally so if the data, even if 298 00:15:07,320 --> 00:15:10,560 Speaker 6: the data suggests that they should be cut, just because 299 00:15:10,920 --> 00:15:14,160 Speaker 6: I think he's now more worried about the optics of 300 00:15:14,640 --> 00:15:16,760 Speaker 6: co opting to the administration. 301 00:15:17,240 --> 00:15:20,720 Speaker 1: It's an interesting way to frame it that we could 302 00:15:20,840 --> 00:15:24,000 Speaker 1: see a FED that may be swayed a little bit 303 00:15:24,040 --> 00:15:28,920 Speaker 1: more by the politics than the data itself. Mike, would 304 00:15:28,960 --> 00:15:29,600 Speaker 1: you go that far? 305 00:15:29,960 --> 00:15:31,680 Speaker 7: I don't know if I would go quite that far. 306 00:15:31,840 --> 00:15:35,320 Speaker 7: It's impossible to separate yourself from the headlines, of course, 307 00:15:35,640 --> 00:15:39,160 Speaker 7: but for FED officials this is a worrying situation because 308 00:15:39,200 --> 00:15:42,600 Speaker 7: of the criminal investigation. Last week, John Williams of the 309 00:15:42,720 --> 00:15:46,120 Speaker 7: New York FED was telling us that he thinks this 310 00:15:46,200 --> 00:15:50,120 Speaker 7: is a kind of order of magnitude more threat from 311 00:15:50,360 --> 00:15:53,200 Speaker 7: the administration, and he of course had praise for Powell 312 00:15:53,240 --> 00:15:57,040 Speaker 7: as a man of impeccable integrity. I do think that 313 00:15:57,760 --> 00:16:02,600 Speaker 7: in this case we're reasonably be free from suspicion. On 314 00:16:03,960 --> 00:16:07,560 Speaker 7: January twenty eighth, because the numbers are saying don't cut 315 00:16:07,720 --> 00:16:10,800 Speaker 7: With the PPI inflation that we got last week up 316 00:16:10,880 --> 00:16:16,200 Speaker 7: high and retail sales still strong, So there's a reason 317 00:16:16,240 --> 00:16:18,520 Speaker 7: why you wouldn't cut that people wouldn't say, oh, this 318 00:16:18,680 --> 00:16:22,240 Speaker 7: is political. If they were to cut, then you might 319 00:16:22,320 --> 00:16:24,920 Speaker 7: think it was there was somebody trying to bow in 320 00:16:24,960 --> 00:16:27,720 Speaker 7: their direction. But I think the market's got it priced 321 00:16:27,720 --> 00:16:28,800 Speaker 7: about right now. 322 00:16:28,840 --> 00:16:32,400 Speaker 1: It's not just John Williams who's been talking about this investigation. 323 00:16:32,480 --> 00:16:34,360 Speaker 1: We've heard it from a number of head speakers who 324 00:16:34,400 --> 00:16:36,720 Speaker 1: are going so far as to say they see this 325 00:16:36,840 --> 00:16:41,320 Speaker 1: probe from the Justice Department as coercion on them. Given that, Anna, 326 00:16:42,160 --> 00:16:45,400 Speaker 1: what is the balancing act for the Fed to show 327 00:16:45,640 --> 00:16:49,320 Speaker 1: that its policy decisions are still driven by the data 328 00:16:49,480 --> 00:16:52,080 Speaker 1: and not any other outside influences. 329 00:16:52,440 --> 00:16:54,480 Speaker 6: Well, I think it will be a tough one because, 330 00:16:55,280 --> 00:16:58,520 Speaker 6: first the inflation data that we have seen in the 331 00:16:58,600 --> 00:17:02,960 Speaker 6: last two months, well, the data has been very soft. Nonetheless, 332 00:17:03,000 --> 00:17:07,080 Speaker 6: there are a lot of controversy over those inflation figures. 333 00:17:07,960 --> 00:17:12,520 Speaker 6: In November, many people thought, well, it's just a shutdown, 334 00:17:12,560 --> 00:17:16,720 Speaker 6: it's a fluke in the CPI figures. We got a 335 00:17:16,760 --> 00:17:20,760 Speaker 6: couple of weeks ago for December it was again soft. 336 00:17:20,880 --> 00:17:24,800 Speaker 6: To the surprise of many long time inflation watchers who 337 00:17:24,840 --> 00:17:27,920 Speaker 6: you know, really crunched numbers, and we did it as 338 00:17:27,960 --> 00:17:30,880 Speaker 6: well in our team, and that surprised us as well. 339 00:17:30,920 --> 00:17:33,760 Speaker 6: So I think there are some real signal in the 340 00:17:33,880 --> 00:17:37,919 Speaker 6: data about softness in a CPI. And then we have 341 00:17:38,119 --> 00:17:43,240 Speaker 6: upcoming jobs data where we are expecting to see pretty 342 00:17:43,280 --> 00:17:46,399 Speaker 6: weak non farm payrolls as well. So I think I 343 00:17:46,440 --> 00:17:48,840 Speaker 6: think the difficulty for the FED is when you have 344 00:17:48,960 --> 00:17:56,080 Speaker 6: the two key data point CPI and also jobs coming 345 00:17:56,480 --> 00:18:00,920 Speaker 6: very soft, while all the other other data are moving 346 00:18:00,960 --> 00:18:04,639 Speaker 6: other way. So you have a pretty difficult picture there already. 347 00:18:04,480 --> 00:18:08,720 Speaker 6: But how do you convince the public that that's what 348 00:18:08,760 --> 00:18:13,160 Speaker 6: you are You know, you are really making policy based 349 00:18:13,160 --> 00:18:15,280 Speaker 6: on data. When you have soft data like that, I 350 00:18:15,280 --> 00:18:17,360 Speaker 6: think they are in a very difficult situation. 351 00:18:17,840 --> 00:18:20,880 Speaker 1: Mike, Are you seeing any evidence in the markets that 352 00:18:20,920 --> 00:18:24,240 Speaker 1: this pressure on the Fed is affecting pricing within the 353 00:18:24,280 --> 00:18:25,160 Speaker 1: market for rate cuts. 354 00:18:25,760 --> 00:18:28,120 Speaker 7: No, we really haven't seen that. We saw an immediate 355 00:18:28,160 --> 00:18:31,720 Speaker 7: reaction after the Powell video that came out last week, 356 00:18:32,280 --> 00:18:34,520 Speaker 7: and then it faded by the end of the day. 357 00:18:35,000 --> 00:18:37,800 Speaker 7: It seems to be something of a taco trade. The 358 00:18:37,840 --> 00:18:41,960 Speaker 7: old Trump always chickens out the feeling is I think 359 00:18:42,240 --> 00:18:45,800 Speaker 7: in the markets that whatever the president's threat level, he 360 00:18:45,920 --> 00:18:50,080 Speaker 7: won't follow through with it, and that this whole event 361 00:18:50,320 --> 00:18:53,400 Speaker 7: will sort of fade and there won't be any charges 362 00:18:53,520 --> 00:18:56,520 Speaker 7: or anything like that, which may be the case, but 363 00:18:58,480 --> 00:19:04,480 Speaker 7: there's a feeling that until there's evidence to the contrary 364 00:19:04,520 --> 00:19:08,800 Speaker 7: that the administration is following through, that it probably won't happen. 365 00:19:09,320 --> 00:19:13,480 Speaker 7: And so it seems like there's a sanguinity in the 366 00:19:13,480 --> 00:19:17,000 Speaker 7: markets at the moment towards towards this, even if there's 367 00:19:17,040 --> 00:19:18,040 Speaker 7: not the FED. 368 00:19:18,280 --> 00:19:21,760 Speaker 1: We're speaking with Mike McKee, international economics and Policy correspondent 369 00:19:21,760 --> 00:19:24,840 Speaker 1: for Bloomberg Radio and Television, and Anna Wong, Chief US 370 00:19:24,920 --> 00:19:29,840 Speaker 1: economist for Bloomberg Economics. Anna, what's your view on what 371 00:19:30,080 --> 00:19:35,080 Speaker 1: the seriousness of this investigation? As Mike puts it, it 372 00:19:35,119 --> 00:19:38,000 Speaker 1: could be seen in the bond market as a taco trade. 373 00:19:38,960 --> 00:19:41,320 Speaker 1: Is that how you're viewing it as well? Or how 374 00:19:41,320 --> 00:19:42,000 Speaker 1: do you view it? 375 00:19:42,560 --> 00:19:45,800 Speaker 6: I think as the days goes by, it gets more 376 00:19:45,800 --> 00:19:49,400 Speaker 6: and more confusing for the market. And Bartley to the 377 00:19:49,440 --> 00:19:54,160 Speaker 6: credit of many of the journalists covering the FED, including 378 00:19:54,200 --> 00:19:58,680 Speaker 6: a lot of great work of reporting done by Bloomberg journalists. 379 00:19:59,200 --> 00:20:02,960 Speaker 6: So in the in the Trumponomics podcast A couple of 380 00:20:02,960 --> 00:20:07,000 Speaker 6: weeks ago, Salaya Motion, our senior White House correspondent, was 381 00:20:07,040 --> 00:20:13,800 Speaker 6: talking about how this DOJ probe occurred when Besant was 382 00:20:13,840 --> 00:20:18,359 Speaker 6: out of town. Similarly, the Lisa Cook firing also what 383 00:20:18,600 --> 00:20:22,119 Speaker 6: happened or the or the charge against Lisa Cook also 384 00:20:22,240 --> 00:20:25,280 Speaker 6: happened while Scott Bessant was out of town and and 385 00:20:25,359 --> 00:20:28,880 Speaker 6: there was just uh more stories are coming out that 386 00:20:29,000 --> 00:20:33,360 Speaker 6: this DOJ probe is seems to be started at the bottom, 387 00:20:33,760 --> 00:20:37,119 Speaker 6: and then there's a lot of miscommunication. It's not it 388 00:20:37,160 --> 00:20:43,080 Speaker 6: doesn't seems coordinated. Nonetheless, the problem is that this DOJ 389 00:20:43,200 --> 00:20:47,320 Speaker 6: prope has happened, and similar to the Lisa Cook incident, 390 00:20:47,560 --> 00:20:50,040 Speaker 6: once it happened, you can't really take it back. And 391 00:20:50,080 --> 00:20:53,040 Speaker 6: the damage is done and and and make no mistake, 392 00:20:53,119 --> 00:20:58,400 Speaker 6: the damage is massive, and I see very few paths 393 00:20:58,440 --> 00:21:01,520 Speaker 6: for the administration to offer framp from this mess. 394 00:21:01,840 --> 00:21:05,200 Speaker 1: Interesting to that point, I mean, we've seen reports Mike 395 00:21:05,280 --> 00:21:08,600 Speaker 1: that Treasury Secretary Scott Bessent ostensibly when he got back 396 00:21:08,640 --> 00:21:12,720 Speaker 1: into town, told President Trump that this investigation could make 397 00:21:12,760 --> 00:21:18,160 Speaker 1: a mess of markets. Given where that potentially stands, I mean, 398 00:21:18,400 --> 00:21:21,000 Speaker 1: what does that mean when it comes to the question 399 00:21:21,359 --> 00:21:25,520 Speaker 1: a FED independence. How much of a threat is FED 400 00:21:25,560 --> 00:21:28,080 Speaker 1: independence under from an investigation like this. 401 00:21:28,760 --> 00:21:31,400 Speaker 7: Well, I think folks at the FED believe the danger 402 00:21:31,440 --> 00:21:35,080 Speaker 7: has ramped up with this because it is a potential 403 00:21:35,119 --> 00:21:38,880 Speaker 7: of putting somebody in jail as opposed to just criticizing them. 404 00:21:39,320 --> 00:21:43,879 Speaker 7: But the overall feeling is that there's nothing there. I 405 00:21:43,920 --> 00:21:46,399 Speaker 7: don't think anybody at the FED is particularly concerned that 406 00:21:46,480 --> 00:21:49,000 Speaker 7: they would go to jail, and there's not really a 407 00:21:49,000 --> 00:21:51,800 Speaker 7: feeling that there's a danger of an indictment. And if 408 00:21:52,280 --> 00:21:56,199 Speaker 7: there is an indictment, I suspect that would set the 409 00:21:56,240 --> 00:21:58,679 Speaker 7: markets off, because then you get into the real danger 410 00:21:58,720 --> 00:22:01,920 Speaker 7: of what could have happened to the chairman of the 411 00:22:01,960 --> 00:22:06,640 Speaker 7: FED in court. So we need to see some follow through. 412 00:22:06,720 --> 00:22:06,920 Speaker 6: Now. 413 00:22:07,760 --> 00:22:11,280 Speaker 7: The interesting thing that happened, and if you've been around 414 00:22:11,320 --> 00:22:14,399 Speaker 7: Washington for a long time, Nathan is we had a 415 00:22:14,400 --> 00:22:18,400 Speaker 7: statement from Janine Piro, the US attorney who sent out 416 00:22:18,400 --> 00:22:22,159 Speaker 7: the subpoenas, and normally they don't comment at all, and 417 00:22:22,200 --> 00:22:24,760 Speaker 7: in this case she was careful to say there was 418 00:22:24,840 --> 00:22:29,040 Speaker 7: no indictment, this is just a request for documents. And 419 00:22:29,119 --> 00:22:32,640 Speaker 7: so I suspect that maybe she got a call from 420 00:22:32,640 --> 00:22:37,600 Speaker 7: Scott Peasant and they may just let this lie. I 421 00:22:37,600 --> 00:22:39,320 Speaker 7: don't know if the FED is going to comply and 422 00:22:39,400 --> 00:22:42,720 Speaker 7: send in any documents, but they may just back off 423 00:22:42,760 --> 00:22:44,600 Speaker 7: and then we don't hear any more about it, and 424 00:22:44,600 --> 00:22:47,680 Speaker 7: with all a chaos around the Trump administration, it would 425 00:22:47,680 --> 00:22:52,840 Speaker 7: probably be forgotten. We'll bring it up. It'll be in 426 00:22:52,880 --> 00:22:55,840 Speaker 7: our stories about twelve paragraphs down every day there's a 427 00:22:55,880 --> 00:22:59,200 Speaker 7: FED meeting, but it won't be front and center news. 428 00:22:59,359 --> 00:23:00,720 Speaker 1: No one of that ask you whether you're going to 429 00:23:00,760 --> 00:23:02,119 Speaker 1: bring it up when you're in the room for the 430 00:23:02,119 --> 00:23:02,960 Speaker 1: news content. 431 00:23:02,720 --> 00:23:04,880 Speaker 7: That's going to be. I'm going to bet you that's 432 00:23:05,000 --> 00:23:07,520 Speaker 7: going to be very close. Unless there's a surprise in 433 00:23:07,600 --> 00:23:09,680 Speaker 7: the decision, it'll probably be the first question. 434 00:23:10,040 --> 00:23:14,000 Speaker 1: Yeah, Anna, do you think that the Trump administration backs 435 00:23:14,040 --> 00:23:18,040 Speaker 1: off this investigation? Given that we have seen so many 436 00:23:18,119 --> 00:23:22,639 Speaker 1: different pressure points on the FED almost since President Trump 437 00:23:22,640 --> 00:23:27,480 Speaker 1: returned to office. 438 00:23:25,000 --> 00:23:28,639 Speaker 6: I still think that it will be pretty hard for 439 00:23:28,760 --> 00:23:32,560 Speaker 6: them to completely say, Okay, forget it, folks, we are 440 00:23:32,600 --> 00:23:39,560 Speaker 6: withdrawing this dog inquiry. They didn't do that for the 441 00:23:39,560 --> 00:23:42,800 Speaker 6: Lisa Cook case, even though clearly it's set off something. 442 00:23:44,119 --> 00:23:46,480 Speaker 6: I think they're watching the market right now, and that 443 00:23:46,760 --> 00:23:53,880 Speaker 6: given that the market has not really reacted much to it. 444 00:23:53,880 --> 00:23:59,480 Speaker 6: It sort of emboldened the President to keep on with it. 445 00:24:00,080 --> 00:24:03,320 Speaker 6: So I think it depends on the market reaction going 446 00:24:03,880 --> 00:24:06,159 Speaker 6: in the next few days, few weeks. 447 00:24:06,600 --> 00:24:08,520 Speaker 1: So Mike, what are you going to be watching for 448 00:24:08,640 --> 00:24:11,520 Speaker 1: next Obviously we've got a FED decision next week, but 449 00:24:11,800 --> 00:24:13,720 Speaker 1: I wonder how much pressure is going to be on 450 00:24:13,800 --> 00:24:17,919 Speaker 1: the FED and the potential next chair that President Trump 451 00:24:18,080 --> 00:24:19,320 Speaker 1: still has to announce. 452 00:24:19,560 --> 00:24:21,440 Speaker 7: It's going to be tough for the next chair, depending 453 00:24:21,440 --> 00:24:24,360 Speaker 7: on especially who it is, because they're going to come 454 00:24:24,359 --> 00:24:27,240 Speaker 7: in under a cloud of suspicion, people thinking that the 455 00:24:27,240 --> 00:24:30,800 Speaker 7: President picked them only to cut interest rates. Now, of 456 00:24:30,800 --> 00:24:33,800 Speaker 7: course Anna would tell you, as would anybody who watches 457 00:24:33,840 --> 00:24:36,600 Speaker 7: the FED, that the chair just one vote out of 458 00:24:36,640 --> 00:24:39,639 Speaker 7: twelve on the nineteen member committee, So they can't come 459 00:24:39,680 --> 00:24:42,600 Speaker 7: in and automatically start cutting rates, but they could put 460 00:24:42,640 --> 00:24:46,439 Speaker 7: pressure on other parts of the FED. And the question 461 00:24:46,520 --> 00:24:50,280 Speaker 7: that goes beyond who the chairman is is how many 462 00:24:50,280 --> 00:24:52,879 Speaker 7: seats become available? Does pou leave the FED and they 463 00:24:52,880 --> 00:24:54,879 Speaker 7: get another seat and they get to the point where 464 00:24:55,000 --> 00:24:58,440 Speaker 7: they would have a majority of members of the Board 465 00:24:58,480 --> 00:25:02,040 Speaker 7: of Governors who were appoint did buy Donald Trump? And 466 00:25:02,080 --> 00:25:05,640 Speaker 7: who might if they're loyal enough do his bidding, and 467 00:25:06,080 --> 00:25:09,440 Speaker 7: that could lead to all kinds of mischief, but that's 468 00:25:09,520 --> 00:25:13,800 Speaker 7: down the road, something hopefully won't even come up as 469 00:25:13,800 --> 00:25:14,720 Speaker 7: a possibility. 470 00:25:14,800 --> 00:25:18,560 Speaker 1: Our thanks to Michael McKee, International economics and Policy correspondent 471 00:25:18,560 --> 00:25:21,600 Speaker 1: for Bloomberg News and Anna Wong, Chief US economist for 472 00:25:21,680 --> 00:25:25,640 Speaker 1: Bloomberg Economics. Up next on this Martin Luther King Day holiday, 473 00:25:25,680 --> 00:25:29,040 Speaker 1: an updated look at DEI in the United States. It's 474 00:25:29,040 --> 00:25:32,000 Speaker 1: thirty seven minutes past the hour. I'm Nathan Hager, and 475 00:25:32,080 --> 00:25:45,560 Speaker 1: this is Bloomberg. Welcome back to this special edition of 476 00:25:45,560 --> 00:25:48,600 Speaker 1: Bloomberg Daybreak. US markets are closed for the Martin Luther 477 00:25:48,720 --> 00:25:51,640 Speaker 1: King Day holiday. I'm Nathan Hager, and on this day 478 00:25:51,680 --> 00:25:54,000 Speaker 1: honoring a civil rights icon, we thought it would be 479 00:25:54,040 --> 00:25:56,560 Speaker 1: a good idea to get an update on diversity, equity 480 00:25:56,560 --> 00:26:00,199 Speaker 1: and inclusion initiatives not only under the Trump administration but 481 00:26:00,240 --> 00:26:03,320 Speaker 1: across corporate America. To do that, we're joined by Bloomberg 482 00:26:03,359 --> 00:26:06,560 Speaker 1: Equality reporter Jeff Green and Bloomberg News Senior editor for 483 00:26:06,600 --> 00:26:10,000 Speaker 1: Management and Work Heather Landy. It's great to have both 484 00:26:10,040 --> 00:26:12,080 Speaker 1: of you on with us today, and you know, it 485 00:26:12,119 --> 00:26:14,520 Speaker 1: really does seem like there's been a pretty big pendulum 486 00:26:14,600 --> 00:26:17,720 Speaker 1: swing from where we were after the killing of George 487 00:26:17,720 --> 00:26:20,680 Speaker 1: Floyd to where things stand now. So Jeff, I'll start 488 00:26:20,720 --> 00:26:23,199 Speaker 1: with you. Where would you say we are when it 489 00:26:23,200 --> 00:26:24,760 Speaker 1: comes to DEI at this moment. 490 00:26:25,040 --> 00:26:28,120 Speaker 8: Well, I think it's underestimating how much changer has been 491 00:26:28,160 --> 00:26:30,320 Speaker 8: to think of this in terms of pendulum swinging. I 492 00:26:30,320 --> 00:26:34,200 Speaker 8: mean that's typically how we look at DEI or sort 493 00:26:34,240 --> 00:26:36,240 Speaker 8: of the equality topics. However, we want to look at 494 00:26:36,400 --> 00:26:40,040 Speaker 8: workplace topics is the pendulum switching back and forth. But 495 00:26:40,080 --> 00:26:42,720 Speaker 8: in this case there's been sort of a wholesale dismantling 496 00:26:43,440 --> 00:26:47,760 Speaker 8: of a system and process in a way that's going 497 00:26:47,800 --> 00:26:50,840 Speaker 8: to be difficult to put back together. If the you know, 498 00:26:50,880 --> 00:26:53,440 Speaker 8: so called pendulum is to swing back, you're going to 499 00:26:53,520 --> 00:26:58,280 Speaker 8: have to rebuild things. So it's more dramatic, probably of 500 00:26:58,320 --> 00:27:00,800 Speaker 8: a shift than I have seen in the noisemal cadence. 501 00:27:00,800 --> 00:27:03,720 Speaker 8: I mean normally you see yet like a certain amount 502 00:27:03,760 --> 00:27:06,040 Speaker 8: of progress and then a certain amount of backsliding. There's 503 00:27:06,080 --> 00:27:09,480 Speaker 8: always a backlash. But this this went beyond a backlash. 504 00:27:09,560 --> 00:27:13,280 Speaker 8: It was it was a relative, relatively calculated attempt, you know, 505 00:27:13,359 --> 00:27:15,720 Speaker 8: for better or worse. If you support it, you think 506 00:27:15,720 --> 00:27:17,879 Speaker 8: it's great but if you're opposed to it, you're horrified. 507 00:27:17,920 --> 00:27:20,960 Speaker 8: But this is not just a pendulum. This is this 508 00:27:21,040 --> 00:27:24,440 Speaker 8: is destruction on purpose to dismantle something they saw as 509 00:27:24,440 --> 00:27:26,760 Speaker 8: a threat. And I say, day, I mean the Trump 510 00:27:26,760 --> 00:27:28,199 Speaker 8: administration and the Conservatives. 511 00:27:28,920 --> 00:27:30,960 Speaker 1: It's an interesting way to frame it. Is is that 512 00:27:31,000 --> 00:27:33,840 Speaker 1: how you would characterize it as well, Heather? And if so, 513 00:27:34,359 --> 00:27:39,760 Speaker 1: what was the infrastructure that the Trump administration is dismantling. 514 00:27:40,000 --> 00:27:45,040 Speaker 4: Yeah, I'd say it's a series of programs that that 515 00:27:45,200 --> 00:27:50,080 Speaker 4: government contractors and other private companies had at their at 516 00:27:50,119 --> 00:27:55,040 Speaker 4: their companies to promote DEI initiatives. It's actual roles in 517 00:27:55,080 --> 00:27:59,600 Speaker 4: some cases in the c suite chief diversity officers that 518 00:27:59,680 --> 00:28:03,080 Speaker 4: were like go and are really struggling to find jobs 519 00:28:03,160 --> 00:28:08,640 Speaker 4: in similar areas. So with those kinds of things sort 520 00:28:08,640 --> 00:28:17,080 Speaker 4: of weeded out any initiatives to to bring back some 521 00:28:17,160 --> 00:28:21,199 Speaker 4: of the spirit of DEI. That started really even before 522 00:28:22,080 --> 00:28:26,520 Speaker 4: the murder of George Floyd, at least five or six 523 00:28:26,600 --> 00:28:29,199 Speaker 4: years before that, we started to see a major uptick 524 00:28:29,320 --> 00:28:33,400 Speaker 4: in in large corporations that we're getting on board with 525 00:28:33,840 --> 00:28:39,120 Speaker 4: a DEI agenda before it became a political football. Uh, 526 00:28:39,280 --> 00:28:42,080 Speaker 4: you know, you're you're sort of starting from scratch. Now, 527 00:28:42,200 --> 00:28:44,280 Speaker 4: if you don't have the people and the programs in 528 00:28:44,320 --> 00:28:45,400 Speaker 4: place to build off of. 529 00:28:45,640 --> 00:28:48,400 Speaker 1: Well, I guess we could get into the debate about 530 00:28:48,480 --> 00:28:54,400 Speaker 1: those programs themselves and whether they really had any substantial 531 00:28:54,600 --> 00:28:59,160 Speaker 1: tangible impact. Jeff walk us through some of that, you know, 532 00:28:59,280 --> 00:29:02,400 Speaker 1: some of these is the we're out there. Did they 533 00:29:02,440 --> 00:29:05,120 Speaker 1: really make a significant impact or were they just sort 534 00:29:05,160 --> 00:29:07,120 Speaker 1: of paying lip service to the issue. 535 00:29:07,280 --> 00:29:09,400 Speaker 8: Well, I mean that is a kind of a difficult 536 00:29:09,480 --> 00:29:13,520 Speaker 8: question to answer. On the one hand, I mean, the 537 00:29:13,560 --> 00:29:19,240 Speaker 8: boardroom diversified quickly because it's it's not a typical employment situation. 538 00:29:19,520 --> 00:29:22,880 Speaker 8: I mean, it's not hyperbole to say that the S 539 00:29:22,880 --> 00:29:25,320 Speaker 8: and P. Five hundred boardroom that we're that we have 540 00:29:25,360 --> 00:29:28,160 Speaker 8: in place right now is the most diverse boardroom that's 541 00:29:28,320 --> 00:29:31,600 Speaker 8: ever existed. White men, for the first time are not 542 00:29:31,800 --> 00:29:36,600 Speaker 8: in the majority. Black directors are around eleven to twelve percent, 543 00:29:36,680 --> 00:29:40,000 Speaker 8: from half or less than half of that when this 544 00:29:40,080 --> 00:29:45,000 Speaker 8: all got started. So you have representation for members of 545 00:29:45,080 --> 00:29:48,320 Speaker 8: the black community in the boardroom, you know, and women 546 00:29:48,360 --> 00:29:50,840 Speaker 8: are at thirty five percent kind of stuck there, but 547 00:29:50,920 --> 00:29:52,920 Speaker 8: at thirty five percent, which was supposed to be an 548 00:29:52,960 --> 00:29:56,480 Speaker 8: important number. So in the boardroom, you've had a dramatic 549 00:29:56,520 --> 00:30:00,320 Speaker 8: shift in who's basically in theory calling the shots. But 550 00:30:00,400 --> 00:30:03,880 Speaker 8: in the workforce, the demographic change seems to have more 551 00:30:03,920 --> 00:30:07,400 Speaker 8: of a factor than DEI did and helping people, you know, 552 00:30:07,520 --> 00:30:10,440 Speaker 8: sort of below the bordroom level, the c suite has 553 00:30:10,520 --> 00:30:14,880 Speaker 8: seen some changes the I mean, we did several analyses 554 00:30:14,920 --> 00:30:17,560 Speaker 8: and it was clear that when things got started, they 555 00:30:17,920 --> 00:30:21,360 Speaker 8: companies hired a lot more black workers, and then when 556 00:30:21,400 --> 00:30:24,680 Speaker 8: they started to let people go, they let go a 557 00:30:24,680 --> 00:30:27,680 Speaker 8: lot of black workers. Net not much change in that 558 00:30:27,760 --> 00:30:30,480 Speaker 8: five year period. Despite all of the effort and all 559 00:30:30,560 --> 00:30:33,560 Speaker 8: of the focus and everything that happened, it didn't seem 560 00:30:33,600 --> 00:30:36,959 Speaker 8: to fundamentally change the workforce in a way that it 561 00:30:37,000 --> 00:30:40,320 Speaker 8: was intended to. I mean, that's sort of my take 562 00:30:40,600 --> 00:30:41,520 Speaker 8: looking at the data. 563 00:30:42,080 --> 00:30:45,760 Speaker 1: Well, what's your take, Heather. Are we seeing any evidence 564 00:30:45,920 --> 00:30:50,200 Speaker 1: that companies are trying to further some of the initiatives 565 00:30:50,200 --> 00:30:54,840 Speaker 1: that were spelled out explicitly in those DEI programs, but 566 00:30:55,760 --> 00:31:00,480 Speaker 1: you know, maybe not under the umbrella of the EI. 567 00:31:01,160 --> 00:31:05,280 Speaker 4: In some cases, yes, you see, you know, employee groups 568 00:31:05,280 --> 00:31:09,600 Speaker 4: that are being renamed to sound more inclusive, and in 569 00:31:09,640 --> 00:31:13,280 Speaker 4: some cases actually are becoming more inclusive. So networks that 570 00:31:13,320 --> 00:31:17,920 Speaker 4: were intended for black employees, for women, or now suddenly 571 00:31:18,200 --> 00:31:24,320 Speaker 4: for everyone. And and you know you're seeing words like 572 00:31:24,400 --> 00:31:32,480 Speaker 4: equality replaced with inclusion or inclusion replaced with balance. So yeah, 573 00:31:33,200 --> 00:31:38,320 Speaker 4: in some cases that's happening, but it's probably more commonplace 574 00:31:38,360 --> 00:31:40,320 Speaker 4: that you're just seeing more of a whole scale, the 575 00:31:40,360 --> 00:31:45,760 Speaker 4: wholesale rollback of those kinds of programs. And you know, 576 00:31:45,760 --> 00:31:49,720 Speaker 4: there are some really influential people weighing in on this stuff. 577 00:31:50,520 --> 00:31:53,800 Speaker 4: You know, a few months ago, Jamie Diamond at JP 578 00:31:53,920 --> 00:31:58,600 Speaker 4: Morgan Chase, who was talked a lot in twenty twenty 579 00:31:59,560 --> 00:32:04,160 Speaker 4: about in inclusion and on gender specifically, has been sort 580 00:32:04,160 --> 00:32:09,440 Speaker 4: of at the vanguard among big companies and in promoting 581 00:32:09,680 --> 00:32:13,479 Speaker 4: women in his c suite and in talking about the 582 00:32:13,520 --> 00:32:17,640 Speaker 4: issue at different conferences all around the world. You know, 583 00:32:17,720 --> 00:32:20,920 Speaker 4: he stood up at an employee meeting and said that 584 00:32:21,360 --> 00:32:24,200 Speaker 4: he realized that when it came to DEI that the 585 00:32:24,200 --> 00:32:27,480 Speaker 4: bank was spending money on things that he described as 586 00:32:27,560 --> 00:32:31,360 Speaker 4: stupid uh and and said that it really bothered him 587 00:32:31,400 --> 00:32:33,720 Speaker 4: and that he was going to cancel it. He saw 588 00:32:33,760 --> 00:32:37,560 Speaker 4: it as wasted money in the bureaucracy. So you know, 589 00:32:37,680 --> 00:32:40,080 Speaker 4: the question is how much you know, how many babies 590 00:32:40,120 --> 00:32:43,160 Speaker 4: get thrown out with the bathwater on this and and 591 00:32:43,200 --> 00:32:46,040 Speaker 4: that's where I think the sort of pro DEI movement 592 00:32:46,200 --> 00:32:50,600 Speaker 4: is is really smarting from this stuff. You know what, 593 00:32:50,600 --> 00:32:55,240 Speaker 4: what was this stuff? Uh, you know, wasteful or not effective? 594 00:32:56,040 --> 00:33:00,240 Speaker 4: You know, there's probably a few different buckets here of 595 00:33:00,360 --> 00:33:06,120 Speaker 4: things that actually were meaningful to employees, to companies, customers, 596 00:33:06,840 --> 00:33:11,240 Speaker 4: whether as a symbol of something or in some cases 597 00:33:12,480 --> 00:33:17,200 Speaker 4: tangibly important. If you look at, for instance, Walmart's commitment 598 00:33:17,440 --> 00:33:22,840 Speaker 4: on promoting a more diverse slate of people into managerial roles, 599 00:33:22,880 --> 00:33:28,120 Speaker 4: into higher paying roles, the numbers that they've provided show 600 00:33:28,200 --> 00:33:32,320 Speaker 4: that they did, in fact, over time, do that that 601 00:33:32,520 --> 00:33:37,440 Speaker 4: arguably has a much more measurable, measurable effect on closing, 602 00:33:37,520 --> 00:33:41,800 Speaker 4: for instance, income gaps in the United States. Then, say 603 00:33:41,840 --> 00:33:46,880 Speaker 4: the one hundred million dollar Walmart's Center for Racial Equity 604 00:33:47,120 --> 00:33:50,280 Speaker 4: that it quickly stood up in twenty twenty right after 605 00:33:50,400 --> 00:33:55,280 Speaker 4: George Floyd's murder. You know that that was something that 606 00:33:55,800 --> 00:34:01,200 Speaker 4: the anti DEI camp pointed to is exercise in woke 607 00:34:01,440 --> 00:34:07,400 Speaker 4: washing and something that didn't actually benefit employees. I'm sure 608 00:34:07,440 --> 00:34:10,520 Speaker 4: you could find lots of different perspectives on whether or 609 00:34:10,560 --> 00:34:13,759 Speaker 4: not that was the case. But long story short, Walmart 610 00:34:13,880 --> 00:34:19,320 Speaker 4: decided last year to no longer fund that program. 611 00:34:19,560 --> 00:34:21,799 Speaker 8: Just to jump in on Walmart as an example, I mean, 612 00:34:21,880 --> 00:34:24,360 Speaker 8: one of the key things that happened which kind of 613 00:34:24,360 --> 00:34:28,600 Speaker 8: maybe skewed how people saw DEI was Robbie Starbuck and 614 00:34:28,640 --> 00:34:31,279 Speaker 8: Walmart was I would say maybe the summit of his 615 00:34:31,840 --> 00:34:36,080 Speaker 8: you know, like Walmart and Robbie Starbuck negotiated their retreat 616 00:34:36,200 --> 00:34:39,359 Speaker 8: so to speak, in a pretty public way. And what 617 00:34:39,560 --> 00:34:43,439 Speaker 8: Robbie Starbuck did is he put out these embarrassing sort 618 00:34:43,480 --> 00:34:47,120 Speaker 8: of vignettes of the least effective things you might argue, 619 00:34:47,160 --> 00:34:50,040 Speaker 8: that companies were doing, or the ones that were harder 620 00:34:50,040 --> 00:34:52,520 Speaker 8: for them to defend. And the glare of you know, 621 00:34:52,600 --> 00:34:58,200 Speaker 8: broad public scrutiny to show what was being done under 622 00:34:58,480 --> 00:35:02,280 Speaker 8: the auspices of DEI, you know, didn't necessarily paint the fulk. 623 00:35:02,360 --> 00:35:05,360 Speaker 8: It did not didn't necessarily didn't paint paint necessarily the 624 00:35:05,360 --> 00:35:07,480 Speaker 8: full picture of what was going on in corporate America 625 00:35:07,520 --> 00:35:10,200 Speaker 8: around trying to be more fair and such. But it 626 00:35:10,400 --> 00:35:13,319 Speaker 8: showed where these programs had gone off the rails. And 627 00:35:13,680 --> 00:35:16,080 Speaker 8: you know, if you ask Robbie Starbuck, he thinks Jamie 628 00:35:16,160 --> 00:35:19,560 Speaker 8: Diamond was specifically referring to something that he showed him 629 00:35:19,560 --> 00:35:23,960 Speaker 8: that JP Morgan was doing. So that was a sort 630 00:35:24,000 --> 00:35:26,920 Speaker 8: of a thing that happened, that kind of unprecedented thing 631 00:35:27,000 --> 00:35:30,719 Speaker 8: that happened, where this social media personality became kind of 632 00:35:30,719 --> 00:35:35,880 Speaker 8: an arbiter of corporate behavior. Companies would just would seek 633 00:35:35,960 --> 00:35:39,520 Speaker 8: him out to help them extricate themselves from this, not 634 00:35:39,680 --> 00:35:43,240 Speaker 8: just you know, go silent, but they would have public proclamations, 635 00:35:44,080 --> 00:35:46,480 Speaker 8: especially once you know, Trump was elected and started to 636 00:35:46,480 --> 00:35:48,839 Speaker 8: go after contractors. 637 00:35:49,200 --> 00:35:51,960 Speaker 1: Speaking with Bloomberg, a quality reporter Jeff Green and senior 638 00:35:52,040 --> 00:35:54,960 Speaker 1: editor for Management and Work Heather Landing, Heather, I wonder 639 00:35:55,040 --> 00:35:59,080 Speaker 1: if you think the corporate sector would be rolling back 640 00:35:59,120 --> 00:36:01,920 Speaker 1: a lot of these pros, at least on a nominal basis, 641 00:36:01,960 --> 00:36:05,319 Speaker 1: if not for the pressure that we've seen from the 642 00:36:05,400 --> 00:36:08,080 Speaker 1: likes of Robbie Starbuck and the Trump administration as a whole. 643 00:36:09,600 --> 00:36:13,359 Speaker 4: Hard to prove a counterfactual, but I would argue that 644 00:36:13,440 --> 00:36:17,200 Speaker 4: the prevailing feeling among a lot of executives at least 645 00:36:17,200 --> 00:36:21,600 Speaker 4: that I spoke with over the last decade is that 646 00:36:21,960 --> 00:36:27,400 Speaker 4: even where these programs maybe weren't producing tangible results, the 647 00:36:27,960 --> 00:36:31,960 Speaker 4: overarching feeling was that they weren't at least hurting anyone. Now, 648 00:36:32,000 --> 00:36:33,680 Speaker 4: I would argue in the end they did in fact 649 00:36:33,760 --> 00:36:37,160 Speaker 4: hurt the DEI movement because the critics were able to 650 00:36:37,440 --> 00:36:43,320 Speaker 4: point to them as not being particularly helpful or showing 651 00:36:43,800 --> 00:36:49,600 Speaker 4: returns even in a DEI sense. But I don't actually 652 00:36:49,719 --> 00:36:56,400 Speaker 4: know that we would have seen a sort of a review, 653 00:36:56,719 --> 00:37:00,440 Speaker 4: an examination of what had been built up over the 654 00:37:00,520 --> 00:37:04,600 Speaker 4: last five ten years without this kind of political pressure. 655 00:37:04,719 --> 00:37:06,520 Speaker 1: Jeff, I want to bring you in. I mean, what 656 00:37:06,640 --> 00:37:09,120 Speaker 1: kind of efforts are being made in the corporate sector 657 00:37:09,200 --> 00:37:13,920 Speaker 1: now to promote more equity in the workforce. 658 00:37:14,160 --> 00:37:17,719 Speaker 8: Well, they don't say they're trying to promote more equity directly. 659 00:37:17,719 --> 00:37:19,560 Speaker 8: What they're will say is like, we're going to promote 660 00:37:19,600 --> 00:37:22,560 Speaker 8: within and we're going to do things within our existing workforce. 661 00:37:22,880 --> 00:37:25,719 Speaker 8: But as the demographics of this country have shifted, many 662 00:37:25,760 --> 00:37:28,040 Speaker 8: of the companies, the bigger companies in particular, have a 663 00:37:28,120 --> 00:37:31,520 Speaker 8: majority minority workforce. More and more companies have a majority 664 00:37:31,560 --> 00:37:34,399 Speaker 8: female workforce. So what you're starting to see is even 665 00:37:34,440 --> 00:37:36,480 Speaker 8: if a company is just saying we're going to promote 666 00:37:36,480 --> 00:37:38,240 Speaker 8: from within, we're going to do sort of the normal 667 00:37:38,320 --> 00:37:41,520 Speaker 8: block and tackling without any diversity programs that are sort 668 00:37:41,520 --> 00:37:45,680 Speaker 8: of singled out, they're getting an outcome that will look 669 00:37:45,719 --> 00:37:48,799 Speaker 8: a lot like what was the intent of diversity and 670 00:37:48,840 --> 00:37:50,040 Speaker 8: inclusion in the first place. 671 00:37:50,239 --> 00:37:52,880 Speaker 4: I'd add that I would add there that that takes 672 00:37:53,120 --> 00:37:55,840 Speaker 4: time to work its way through the system. 673 00:37:56,760 --> 00:38:00,000 Speaker 8: We did see it in the data recently, and profess 674 00:38:00,320 --> 00:38:01,960 Speaker 8: that's why I'm starting to get encouraged. 675 00:38:02,239 --> 00:38:04,640 Speaker 1: Thanks to both of you for this very important discussion. 676 00:38:04,719 --> 00:38:07,719 Speaker 1: That's Heather Landy, Senior editor for Management and Work for 677 00:38:07,760 --> 00:38:11,600 Speaker 1: Bloomberg News, along with Bloomberg Equality reporter Jeff Green. Thanks 678 00:38:11,640 --> 00:38:14,040 Speaker 1: as well to Bloomberg's Michael McKee and Anna Wong of 679 00:38:14,040 --> 00:38:17,440 Speaker 1: Bloomberg Economics, along with New Edge Wells Cameron Dawson and 680 00:38:17,520 --> 00:38:20,759 Speaker 1: Laurie Calvacino of RBC Capital. Thanks to you as well, 681 00:38:20,760 --> 00:38:24,360 Speaker 1: of course, for listening on this MLK day. I'm Nathan Hager. 682 00:38:24,520 --> 00:38:27,560 Speaker 1: Stay with us. Top stories and global business headlines are 683 00:38:27,560 --> 00:38:29,279 Speaker 1: coming out right now.