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Speaker 3: two thousand companies and one hundred and thirty industries all
Speaker 3: around the world. And we finally get to the pressing question.
Speaker 4: Of the day, will we now have chocolate cheeses?
Speaker 3: And the only person asked about this is Jen Bartash's
Speaker 3: Bloomberg Intelligence senior analyst Retail Staples and Packaged Food is
Speaker 3: joining us. So Jen, seriously, we're actually kind of serious
Speaker 3: chocolate cheeses.
Speaker 4: Is that going to be a thing?
Speaker 1: You never know? I mean it certainly maybe Snickered flavor,
Speaker 1: Snickers flavored cheese its or eminem s micks.
Speaker 3: I don't know, Wait, what about like that have been
Speaker 3: Eminem's No, that'd be gross, that'd be gross, Like cho.
Speaker 1: Checks mix kind of thing where it's got eminem's and
Speaker 1: cheese its and everything all mixed together. You might see
Speaker 1: something like that.
Speaker 5: Why is this deal happening? What's give us a strategic
Speaker 5: ration now for this deal?
Speaker 1: Well, there's there's a couple of things. The first is,
Speaker 1: you know, from a Mars portfolio perspective, when it comes
Speaker 1: to the snacking category, they are heavily exposed to chocolate
Speaker 1: and the coco. You know, coco has been a structural
Speaker 1: issue in terms of cost for a while and we
Speaker 1: think that's going to continue indefinitely. And so this helps
Speaker 1: them diversify out that snacking side of their portfolio, and
Speaker 1: it also helps them do a little bit more in
Speaker 1: emerging markets. It's which is an area where Keilenova has
Speaker 1: some strength.
Speaker 3: So okay, so is it offense or defense from that perspective,
Speaker 3: because it feels like it could be a combination of both,
Speaker 3: like diversify away from just pure coco, but but also expand.
Speaker 1: Yeah, I think it's a combination of the two. It's
Speaker 1: it's on the cocoa side, it's a little bit of
Speaker 1: risk mitigation, you know, and helping to ease some of
Speaker 1: the costs they're feeling there and you know, traditionally chocolate
Speaker 1: has held up actually really well through the pandemic and
Speaker 1: after the pandemic, but we're finally starting to see a
Speaker 1: little bit of weakness and consumer demand for chocolate just
Speaker 1: because of food inflation, and so diversification will will certainly
Speaker 1: help with that. And then you know, on a global basis,
Speaker 1: Mars has leading you know, they're in the top three
Speaker 1: market share in almost every region in confectionery, and so
Speaker 1: having more of the salty snack side and getting more
Speaker 1: into that can only consolidate their market share position in
Speaker 1: a lot of leading global, you know, regions.
Speaker 5: Jen, What makes us deal really interesting for me is
Speaker 5: the Mars company because it's a private company. What do
Speaker 5: we know about Mars? Maybe I don't know the size capitalization.
Speaker 5: Did they ever talk to investors.
Speaker 1: Very rarely, you know, but what they have disclosed, you know,
Speaker 1: their annual revenue is a little over fifty billion dollars,
Speaker 1: so definitely a sizable company. And what I think is
Speaker 1: very interesting is when you break that revenue down, nearly
Speaker 1: sixty percent of their revenue is coming from pet food.
Speaker 1: So although everybody associates Mars with chocolate, the larger portion
Speaker 1: of their business is pet and so they own the
Speaker 1: Pedigree brand, they own the Whiskers brand, and that is
Speaker 1: a big powerhouse for them. And so when you know
Speaker 1: that's that's part of the reason we think there actually
Speaker 1: won't be a lot of FTC pushback on this because
Speaker 1: it's a smaller port of their portfolio and the products
Speaker 1: are there's really no overlap between what Kelenova does and
Speaker 1: what Mars does.
Speaker 4: Amazingly, I did not know that. I did not know
Speaker 4: that at all. Why we love Jen Bart.
Speaker 3: I mean, that would kill them, but sure right, dogs
Speaker 3: can't have chocolate from that thing. And so Jen, does
Speaker 3: this mean we're going to see a lot of other
Speaker 3: M and A in the space? And if so, sort
Speaker 3: of who and where would we see that?
Speaker 1: Well, we've seen, you know, we've seen a lot of
Speaker 1: a sentiment towards tuck in acquisitions over the last couple
Speaker 1: of years. But there are some pressures that are affecting
Speaker 1: the industry. So when you listen to what all of
Speaker 1: these package food companies are saying, their priority for twenty
Speaker 1: twenty four and headed into twenty twenty five is regaining volume.
Speaker 1: But the problem is that consumers not yet in a
Speaker 1: position where they're buying bigger volumes of food, and so
Speaker 1: M and A is a potential route to be able
Speaker 1: to better navigate the market. So you know, in this instance,
Speaker 1: with this deal, we're expecting over a billion dollars in
Speaker 1: synergies between Mars and Kelenova, coming from procurement, coming from manufacturing,
Speaker 1: things like that. So I think that this deal may
Speaker 1: spark some at least some consideration for larger deals again
Speaker 1: in the package food space, as they're trying to find
Speaker 1: ways to contain costs, expand their geographic and product footprint
Speaker 1: at a time when it's hard to spend to spur
Speaker 1: consumers into buying greater volumes, So it may be an
Speaker 1: alternative for them.
Speaker 5: Gen here's the big quest out there for I think
Speaker 5: most consumers, as John Tucker digs into a bag of cheese,
Speaker 5: it's in food inflation. You cover the package of good companies,
Speaker 5: You covered the grocery stores as well. Those prices while
Speaker 5: the rate of inflation has slowed, those prices ain't coming down,
Speaker 5: are they.
Speaker 1: They're coming down, but very very slowly. And so if
Speaker 1: you look on it on a basis, you know, comparison
Speaker 1: back to twenty nineteen food prices are still almost twenty
Speaker 1: percent higher than they were in twenty nineteen. Now in
Speaker 1: certain categories where there's been relief, especially from the cost
Speaker 1: of commodities, So as corn has come down, and soy
Speaker 1: has come down, and wheat has come down, sugar has
Speaker 1: come down, we've seen you know a little bit of
Speaker 1: price relief, but it's going to take some time for
Speaker 1: that to really translate into something that consumers feel in
Speaker 1: their pocketbook instead of just individual products being you know,
Speaker 1: either not getting increases or coming down slightly in price.
Speaker 3: So which company in your space do you feel like
Speaker 3: is doing pretty well on the margin and the top
Speaker 3: line side, because if margins are gonna get squeezed, you
Speaker 3: need the top line to grow. But the top line
Speaker 3: is still really struggling with consumers right now. So who's
Speaker 3: managing not the best?
Speaker 1: Well? You know, up until the probably the the you know,
Speaker 1: the last quarter or two, Mandalis has actually navigated that
Speaker 1: pretty well, you know, because the demand for suites and
Speaker 1: indulgences has had held up pretty well. You know, companies
Speaker 1: that do have that exposure to snacking, generally speaking, are
Speaker 1: doing better overall than companies that are more center store.
Speaker 1: And I would point to Kraft heines as an example
Speaker 1: of center store or Campbell Soup is a center store type.
Speaker 5: Center store. I have heard that before.
Speaker 1: So center store is when you're in a grocery store.
Speaker 1: Everything that's not on the not on the outside, so
Speaker 1: it usually is like shelf stable products. So think about
Speaker 1: your canned soups, your pasta, your pasta sauces, things like that,
Speaker 1: and and those are those are the pantry staples that
Speaker 1: most people you know purchase. And then the perimeter is
Speaker 1: of course all of your fresh you know, your fresh foods,
Speaker 1: your produce and your meat and your dairy and things
Speaker 1: like that.
Speaker 4: And I learned today that's why we love Jen.
Speaker 5: That's why we love Jen. Yeah, all right, Jen, thanks
Speaker 5: so much for joining us. Jen Bartash, I've senior retail
Speaker 5: analyst for Bloomberg Intelligence. But when I do, of course,
Speaker 5: when I see an M and A trade cross the tape,
Speaker 5: I go m A, go click on advisors and see
Speaker 5: which one of my banker buddies are getting paid for
Speaker 5: the acchoiry here from Mars. They were solely advised by
Speaker 5: City Group. Good for them, and then for the target,
Speaker 5: which is really where you want to be as an advisor.
Speaker 5: They had Goldman, Saxonell's art. So some blue chip names
Speaker 5: getting paid across the board on that big big trade
Speaker 5: there thirty six billion with including debt.
Speaker 3: And this was an easier fix, and that, like the
Speaker 3: anti trust issue is probably not there versus other companies
Speaker 3: where you know you're going to have it.
Speaker 4: Do you get in the Q now? Do you wait
Speaker 4: till after the election? What do you do? Increasingly you
Speaker 4: what do you do?
Speaker 5: Oh? Yeah, just get let's get move and get this enclosed.
Speaker 3: Yeah, but you're the banker, of course you're going to
Speaker 3: say that.
Speaker 5: Yeah, but they only I was reading Gen's research, a
Speaker 5: combind company only has like six point two percent global
Speaker 5: retail spend or whatever the metric is. I think the
Speaker 5: regulators will use.
Speaker 4: So it's akady yeah for that one. But for other companies,
Speaker 4: I don't know.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 3: It was a nothing burger the CPI, But we could
Speaker 3: also make an argument we've already had a humongous move
Speaker 3: over the last couple of weeks. Volumes also light, so
Speaker 3: you're kind of in a different positioning stage. Emily Roland
Speaker 3: is co chief investment strategist for John Hancock Investment Management,
Speaker 3: joining us.
Speaker 4: Now, Hey, Emily, what do you make.
Speaker 3: Of the non reaction in the market, Like, what does
Speaker 3: that tell you about positioning and sentiment?
Speaker 6: Well, it tells us that the PPI report yesterday really
Speaker 6: sort of stole the show, coming in lighter than estimates,
Speaker 6: and you saw big moves in bond markets as well
Speaker 6: as across equity market. So I think today, you know,
Speaker 6: coming in right around in line with expectations. Of course,
Speaker 6: that sticky shelter or housing components still looking like the
Speaker 6: primary driver of inflation, and you know, we're seeing the
Speaker 6: housing data take a long time to slow down.
Speaker 7: Inventories are still really.
Speaker 6: Low, prices are still elevated, so we think that inflation
Speaker 6: is certainly coming down. That's great news for markets, but
Speaker 6: it's not happening in a straight line exactly.
Speaker 5: So what does that mean for our feder reserve here?
Speaker 5: I mean, it feels like this is kind of giving
Speaker 5: them some run by. I know, we have some more
Speaker 5: economic data between now and September, but boy, it seems
Speaker 5: like they could certainly go here.
Speaker 6: Yeah, this certainly gives the Fed the green light to
Speaker 6: go in September, which, of course the boondo market was
Speaker 6: already pricing in. The expectation shifted a little bit after
Speaker 6: the report. We went from fifty basis points being.
Speaker 7: Kind of the slight odds, and.
Speaker 6: Now it's back to twenty five basis points, which feels
Speaker 6: about right for us. Again, the Fed has noted that
Speaker 6: the labor market is seeing some cracks. They're confident that
Speaker 6: inflation's decelerating, and I think they certainly want to cut rates,
Speaker 6: and that's our expectation going into September. There's still some
Speaker 6: more data though, We're going to get another jobs report,
Speaker 6: another CPI report, and of course we have Jackson holl
Speaker 6: at the end of the month. So I think, kind
Speaker 6: of hemming and hawing about fifty versus twenty five, we've
Speaker 6: still got some time to go out here.
Speaker 4: Yeah.
Speaker 3: It's just also so interesting to point out that the
Speaker 3: Fed didn't change their tune, like they were still talking
Speaker 3: about we want to see more progress, we want to wait,
Speaker 3: want to wait.
Speaker 4: It was the markets that change their reaction function.
Speaker 3: So after we've kind of cleaned out positioning, here are
Speaker 3: we sort of on the same page markets, bond markets,
Speaker 3: equity markets, and the Fed.
Speaker 7: Yeah, I mean we're getting there.
Speaker 1: You know.
Speaker 7: We want to be patient here as it relates to bonds.
Speaker 6: We're seeing a lot of volatility across high quality bonds here.
Speaker 7: You know, again the data continue to chop around.
Speaker 6: We do want to lean into duration into high quality
Speaker 6: bonds here, but again it's not going to happen in
Speaker 6: a straight line, and.
Speaker 7: We've seen some massive moves.
Speaker 6: This is type of volatility around bonds is not normal,
Speaker 6: So we want to be patient here, but we do
Speaker 6: continue to like the income that's available the aggregate bond
Speaker 6: index yielding close to five percent. We like the idea
Speaker 6: of locking in that income stream for years, even if
Speaker 6: you're not getting paid yet on the duration component, you're
Speaker 6: still getting that income, which we think is really attractive
Speaker 6: in an environment where an economic contraction is likely in
Speaker 6: our view.
Speaker 5: So Emily, let's flash back to a week ago Monday.
Speaker 5: What did you and the good folks up at John
Speaker 5: Hancock Investment Management, what did you make about the volatility
Speaker 5: we saw on last Monday's trading.
Speaker 6: You know, it was so remarkable, and you know, everybody
Speaker 6: was kind of thinking.
Speaker 7: About the smoking gun.
Speaker 6: You know, was it that ism manufacturing data?
Speaker 7: Was it initial claims jumping?
Speaker 6: Of course, everybody scrambled to try and explain the yes
Speaker 6: and carry trade all of their clients and the unwind.
Speaker 7: Of that and the surprise move from the Bank of Japan.
Speaker 6: But I'll tell you the one thing that you couldn't
Speaker 6: point to was earnings. And over time, we all know
Speaker 6: that stock prices are going to follow profits, and we
Speaker 6: look at earning season, we're up about twelve percent year
Speaker 6: over years. Still a couple of big names to report here,
Speaker 6: but earnings have come in pretty solid. I think the
Speaker 6: challenge for investors on the earnings front is this impressive
Speaker 6: run up in prices that we saw prior to the
Speaker 6: earnings report, so you almost had to be perfect in
Speaker 6: order to see an outsize reaction from markets there.
Speaker 7: But earnings growth continues to come in solid.
Speaker 6: It's being driven by those megacap tech names communications.
Speaker 7: Services up there as well.
Speaker 6: We're seeing some broadening out in earnings, so the fundamental
Speaker 6: backdrop is remaining intact, which makes us know pretty optimistic.
Speaker 7: On the equity front.
Speaker 3: Does it also make us much more sensitive than to
Speaker 3: Nvidia's earnings since that's going to be one of the
Speaker 3: big earnings catalysts and you get Walmart on, I get that,
Speaker 3: But is it now like an Nvidia story for earnings
Speaker 3: and the market?
Speaker 6: Absolutely, And it's you know, it's funny how navidia is
Speaker 6: so far delayed versus everything else. You kind of think
Speaker 6: that earning seasons over and then you remember that this
Speaker 6: massive driver of the market is still yet to report.
Speaker 6: So that's really going to be I think the next
Speaker 6: big event, you know, coming up in a couple of weeks.
Speaker 6: Watching that Obviously, it's been incredibly important to markets, especially
Speaker 6: on the US equity front, so we'll learn a lot
Speaker 6: from that report.
Speaker 7: Absolutely.
Speaker 5: So, people we're talking to us earlier today about small
Speaker 5: cap stocks, if we are in fact going to see
Speaker 5: some rates coming down, this could maybe be an opportunity
Speaker 5: for small caps to perform. Are you willing to make
Speaker 5: that leap? Is that seem reasonable?
Speaker 3: And some of the small cap earnings like weren't terrible,
Speaker 3: like they delivered.
Speaker 7: Yep, yep, some of them did.
Speaker 6: But overall, if you look at small cap earnings, they're
Speaker 6: negative for this quarter versus large and mid cap equities.
Speaker 6: So we think it's a bit early to lean into
Speaker 6: small cap here. We would be looking for a shift
Speaker 6: into an early cycle environment.
Speaker 7: We'd want that contraction to play out.
Speaker 6: We never really bought into the idea of lower rates
Speaker 6: helping small cap equities. In fact, we have to remember
Speaker 6: that when rates are coming down and the Feds cutting,
Speaker 6: it's because something not great is going on and that
Speaker 6: should not benefit the more cyclical areas of the market.
Speaker 6: Small caps feature a lot of stocks that are unprofitable,
Speaker 6: some growth at any price names. In fact, about two
Speaker 6: thirds of the Russell two thousand index is comprised of
Speaker 6: companies that don't make money. Those names, again, they can
Speaker 6: rip when cyclicalities awarded in an early cycle environment, but
Speaker 6: we simply think it's too early to lean in there.
Speaker 6: We'd be moving up in cap. We'd be embracing quality.
Speaker 6: We want companies with great balance sheets, tons of cash.
Speaker 7: Great margins.
Speaker 6: Remember, yes, inflation coming down is great news for sure,
Speaker 6: especially for the consumer, but it also means revenue growth
Speaker 6: is slowing. So again we want to lean into quality
Speaker 6: for the reason. For that reason, because those companies can
Speaker 6: defend their margins better when revenue growth is coming down.
Speaker 3: So before we let you go, Emily quickly, aside from tech,
Speaker 3: where is that spot?
Speaker 6: Yeah, so we're looking at areas of the market that
Speaker 6: are cheaper.
Speaker 7: Think about quality at a reasonable price.
Speaker 6: Areas like US mid cap stocks, which are trading at
Speaker 6: the most significant discount to their large cap counterparts since.
Speaker 7: The late nineteen nineties.
Speaker 6: Midcaps also have an overweight to industrial stocks that are
Speaker 6: benefiting from on shoring in this manufacturing renaissance that we're
Speaker 6: having in the United States today. So it's really about again,
Speaker 6: I think we might have made this term up. I'm
Speaker 6: not sure, but quality at a reasonable price is really
Speaker 6: the sweet spot for us for the remainder of this year.
Speaker 5: All right, Emily, thank you so much for joining us.
Speaker 5: We always appreciate getting few minutes of your time. Emily
Speaker 5: Roland Co Chief investment Strategist, John Hancock Investment Management joining
Speaker 5: us via that zoom thing from Boston here. So I know,
Speaker 5: I guess one of the questions I have is, you know,
Speaker 5: twenty five basis points or fifty basis points if they
Speaker 5: do cut in September, and what would either of those
Speaker 5: tell us? It's fifty basis points. Would that suggest to
Speaker 5: the market, oh boy, something is wrong maybe, or will
Speaker 5: twenty five or will twenty five not suffice the market?
Speaker 4: You know, well that's so tricky, right, because you're right.
Speaker 3: If you do fifty, then the narrative is gonna be like, oh,
Speaker 3: things are a lot worse than we think. It didn't
Speaker 3: seem like the inflation was coming down. The disinflation story
Speaker 3: was coming down fast enough to justify the fifty basis
Speaker 3: point cut. But if you look at WORP, we're still
Speaker 3: pricing in over twenty five basis points, not fifty, but
Speaker 3: still over twenty five within the market.
Speaker 4: That's a different scenario.
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Speaker 5: All right, let's get to a story that is very
Speaker 5: widely read on the Bloomberg coming. John Tucker's been following
Speaker 5: it closely all day this he doesn't understand it. Yeah,
Speaker 5: I'm not. All I know is the store's not there
Speaker 5: across the street, and it was before Mary Ross Gilbert
Speaker 5: joins us Bloomberg Intelligence Senior Equeryanna. She covers retail and
Speaker 5: the story is Victoria's Secret has notd Rihanna Brands CEO
Speaker 5: to lead a turnaround there and I didn't know Victoria's
Speaker 5: Secret needed to turn around, but apparently it does in
Speaker 5: the area. Go that's why the store is no longer
Speaker 5: across the street from our office in that space has
Speaker 5: been vacant for like five years. There we go, there
Speaker 5: we go? All right, Mary Ross Gilbert, thanks so much
Speaker 5: for joining us. Here is this a big deal for
Speaker 5: Victoria's Secret?
Speaker 7: I think this is.
Speaker 8: A big deal for Victoria's Secret. Being a woman focused brand,
Speaker 8: we think that Hillary super And as you mentioned, she
Speaker 8: was just the CEO at Rihanna's brand fenty x Savage,
Speaker 8: and that's a lingerie company. It's a teeny, teeny tiny company.
Speaker 8: But Hillary has three decades of experience. She was the
Speaker 8: chief of the Anthropology brands. More recently and prior to that,
Speaker 8: she's worked at a number of other brands, including American Eagle.
Speaker 8: And speaking of competition to Victoria's Secret and why they've
Speaker 8: lost share, American Eagle has a brand called Airy and
Speaker 8: that's about you know, one point six billion dollar business.
Speaker 8: So Victoria's Secret has lost market share, but they have
Speaker 8: been in a turnaround mode for the past three to
Speaker 8: four years and we're starting to see some traction. But
Speaker 8: we really think that with Super's understanding of the consumer,
Speaker 8: working with multiple brands and really getting the brand heat,
Speaker 8: we think that she could really make a difference here
Speaker 8: at the HELM.
Speaker 7: So we think this is good news.
Speaker 8: And of course it comes as they say that they
Speaker 8: just beat two Q earnings. You know, they gave preliminary
Speaker 8: estimates for their second quarter.
Speaker 4: When did things really fall apart for Victoria's Secret? What
Speaker 4: was the trigger?
Speaker 8: Yeah, the trigger was really this sort of me too
Speaker 8: movement and given that it was a brand that was
Speaker 8: sort of focused on the perspective of what made women
Speaker 8: sexy from a male perspective rather than from the female
Speaker 8: consumer perspective.
Speaker 7: And that has has shifted.
Speaker 8: When it used to be part of Limited Brands, it
Speaker 8: was then spun off and Martin Waters, who has now
Speaker 8: left the company as CEO, he was the one who
Speaker 8: came in and really spearheaded that and they've become a
Speaker 8: more inclusive brand. I mean, how many companies out there
Speaker 8: can say that they have one hundred percent equal pay
Speaker 8: across the business. I don't know of any others, but
Speaker 8: they have achieved that. It's uh, you know, it's third
Speaker 8: party documented or certified, I should say. So they've made
Speaker 8: tremendous progress. They've really improved the lineup and it is
Speaker 8: coming from the perspective.
Speaker 9: But I think kind of.
Speaker 8: Getting it to the next level and really getting that
Speaker 8: turnaround to a point where they can get back to growth.
Speaker 8: I think this is the right time at a moment
Speaker 8: to pivot and bring in somebody like Hillary super So.
Speaker 8: I think it's very, very exciting for the company at
Speaker 8: this time.
Speaker 5: Well, Mary, if the if the industry has changed, that
Speaker 5: the lingerie part of the business has changed, where are
Speaker 5: success coming from in that new world?
Speaker 8: Yeah, well, so there's a couple of things that happened.
Speaker 8: I mean, the category had been growing for many years
Speaker 8: and had been expected to grow, but they did experience
Speaker 8: a slow down last year. But we're already starting to
Speaker 8: see improvements in the category, at least in the US. Internationally,
Speaker 8: by the way, Victoria's Secret is growing in the double digits.
Speaker 8: I think in the last quarter international was up eleven percent.
Speaker 8: So the category did weaken, but it looks like it's
Speaker 8: starting to turn back up again. And really what happened
Speaker 8: is with this sort of me too moment, it became
Speaker 8: more inclusive, and so Victoria Secret has adopted their brands
Speaker 8: to be more inclusive and you know, once again to
Speaker 8: come from the perspective of a woman and what the
Speaker 8: woman needs, you know, and it's a whole assortment, and
Speaker 8: if you go into the stores, you will see a
Speaker 8: dramatic improvement in the assortment that they have. In the
Speaker 8: employee culture, I would say it's very positive, very exciting
Speaker 8: environment when you go into the stores. But they do
Speaker 8: need to remodel most of the stores. They've only been
Speaker 8: able to touch a small percentage of the store base
Speaker 8: so far, so there's still more to go. And then
Speaker 8: the Pink brand is really at an earlier stage of
Speaker 8: a turnaround, but we're already seeing fallen assortments really improve.
Speaker 8: And they they brought on Natalia Bryant as a brand ambassador,
Speaker 8: so that's pretty exciting. So the stock I think we're
Speaker 8: heading in the right direction.
Speaker 5: Yeah, the stock market agrees with these stock Trading Hire
Speaker 5: today on the news, Mary Ross Gilbert, thank you so
Speaker 5: much for joining. It's Mary Ross Gilbert. She's a senior
Speaker 5: Eco analyst covering retail for Bloomberg Intelligence. She's based in
Speaker 5: our LA office, Wiltshire. Now how are they now? They're
Speaker 5: it's Central Century sent They're in Central Cited in the
Speaker 5: new office. Very good office, very cool, overlooking the country club.
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Speaker 3: get the broader take from some chief investment officers, and
Speaker 3: one of them is Brent Shot. He is a CIO
Speaker 3: at Northwestern Mutual Wealth Management Company. He joins us from Milwauk, Wisconsin. Brent,
Speaker 3: really great to see you and you get your take here.
Speaker 3: So if we take into account CPI, the non reaction
Speaker 3: that we've seen. How aggressive does the Fed actually need
Speaker 3: to be now in September.
Speaker 10: Well, I think absent any further labor market weekning, I
Speaker 10: think the Fed only does twenty five basis points. To me,
Speaker 10: you've had three good reports after four bad. Look at
Speaker 10: the three month numbers that look pretty good. The six
Speaker 10: month numbers are still kind of in the middling area,
Speaker 10: but the longer term numbers on things like services, etc.
Speaker 10: Are still a bit elevated. And I think the Fed
Speaker 10: wants to avoid a repeat of nineteen sixty six where
Speaker 10: they cut too early and that led to inflation. Or
Speaker 10: even if you think about last year, this time in
Speaker 10: the fourth quarter, we had CPI that was coming down,
Speaker 10: the Fed expressed an optimism, investors priced in a ton
Speaker 10: of rate cuts, optimism regrew, and what you saw was
Speaker 10: inflation coming back. And so the reality is we're later
Speaker 10: in an economic cycle, and typically late in an economic cycle,
Speaker 10: the Fed does not cut aggressively, especially where they don't
Speaker 10: know where the neutral it is.
Speaker 5: So Brent, I think historically I kind of considered your
Speaker 5: view probably more conservative than maybe then that the consensus
Speaker 5: as a related steed economy and maybe the FED and
Speaker 5: markets overall. Has anything changed in the last several weeks
Speaker 5: in terms of either economic data or company earning data
Speaker 5: that would change that.
Speaker 10: Look, I think over the past year there's been plenty
Speaker 10: of things that historically have led to recessions, and investors
Speaker 10: have been able to say, yeah, but that yeah, but
Speaker 10: always ended with the labor market. And to me, what
Speaker 10: has changed is you have seen the labor market week
Speaker 10: and although we've been pointing to that for some time,
Speaker 10: non farm payrolls versus the household and plumber report has
Speaker 10: had a huge divergence, and you've seen other indicators show
Speaker 10: that the labor market is weakening. And this is where
Speaker 10: I think the market woke up last week at least
Speaker 10: a bit for a touch of time at least that
Speaker 10: this beloved som rule that everybody talked about was finally broken. Also, look,
Speaker 10: I invite you to go look on your Bloomberg how
Speaker 10: many times the unemployment rate has risen zero point nine
Speaker 10: percent and we haven't been in a recession or headed
Speaker 10: towards one. And this is where I think, if you
Speaker 10: think the labor market's are lagging into because companies want
Speaker 10: to hang on to people because they're hard to find
Speaker 10: and expensive. That's where I worry that we're a little
Speaker 10: bit too optimistic in mind is not conservative, it's just
Speaker 10: that can we admit there are risk out there and
Speaker 10: the stock market on many measures is expensive as I've
Speaker 10: seen it since nineteen ninety nine.
Speaker 3: Well, that's the funny thing is that last Monday and
Speaker 3: the Friday before we would be like, yeah, you're right,
Speaker 3: there are the risks in there, and we are taking
Speaker 3: it on a chin, and then all of a sudden,
Speaker 3: it feels like yesterday, it's a go ahead, put on
Speaker 3: some more risk.
Speaker 4: So what is it? Which is it?
Speaker 10: I think you've had investors for fifteen years who have
Speaker 10: kind of been lulledlessleep by the Federal Reserve, who has
Speaker 10: always supported risk assets post the Great Financial Crisis because
Speaker 10: they needed to to get the economy higher. Now I
Speaker 10: think we're on the opposite side of that. And this
Speaker 10: is where this continual commentary that I hear about the
Speaker 10: Fed cutting rates because the market fell last week was
Speaker 10: a bit I don't know if word is silly, but
Speaker 10: a bit premature. And that's where I don't think you're
Speaker 10: going to have the Fed be as easy any longer
Speaker 10: because there are no shortage of risk takers, and so
Speaker 10: to me, we're a bit on the frothier side of
Speaker 10: the equity market. And that is not an all equity
Speaker 10: market thing. That is just in some of the places
Speaker 10: where people want to go. No matter what I think,
Speaker 10: there are plenty of opportunities for long term focused investors.
Speaker 10: I heard about your I listened to your prior guest.
Speaker 10: I think small caps, certainly there are some issues that
Speaker 10: are there, but I think if you're thinking about a
Speaker 10: three to five year time horising, given how cheap they are,
Speaker 10: that is where I think if you're willing to stay
Speaker 10: through a downturn, which I still think one is likely,
Speaker 10: that's where I think there is opportunity now in those
Speaker 10: areas even if we have that downturn.
Speaker 5: How about some sectors, brand are some sectors that screen
Speaker 5: well for you guys if the economy is in fact slowing,
Speaker 5: but there will may be an easing interest rate environment.
Speaker 10: That's the irony. I think small caps if you look
Speaker 10: back to nineteen ninety nine, which is a similar time period,
Speaker 10: they actually did fairly well into the recession because they
Speaker 10: were trading at similar levels to where they are today
Speaker 10: and people had placed money into that late cycle economy,
Speaker 10: into a narrow group of stocks based upon the belief
Speaker 10: that they were impervious to any economic downturn and we're
Speaker 10: longer term things that you needed to own no matter what.
Speaker 10: And that's where small caps actually did okay into that downturn.
Speaker 10: And then I think this one will be mild, and
Speaker 10: that's where I think the economy turns from a headwind
Speaker 10: to a tailwind. The FED turns from a headwind to
Speaker 10: a tailwind, and that's where I think there are opportunities there.
Speaker 10: And even in parts of the S and P five hundred,
Speaker 10: we happened to like the S and P equal weight
Speaker 10: just a bit, and so I think there are plenty
Speaker 10: of opportunities in this kind of odd period where you
Speaker 10: hear things that made sense in the past that don't
Speaker 10: make sense today. That just worries me a bit, and
Speaker 10: it brings me back to those moments in my thirty
Speaker 10: year career where I've heard these things in the past
Speaker 10: shrugged off, and history does have a tendency to repeat.
Speaker 4: What do you do with then bonds at this point.
Speaker 10: So we've been extending our duration and we were actually
Speaker 10: overweight bonds right now, and so we've been pretty much
Speaker 10: underweight bonds for most of my career here because of
Speaker 10: the belief that the Fed would would do what they
Speaker 10: did even post COVID and the fiscal policy makers. Now
Speaker 10: we're just a bit overweight bonds and a bit underweight equities.
Speaker 10: The thing I think people are missing is that I
Speaker 10: don't think you want to just hide out in cash.
Speaker 10: You saw what happened during those two days, which was
Speaker 10: supposedly traumatic of market downturns, in which the long treasury
Speaker 10: actually did quite well. And so I think bonds are
Speaker 10: back to being a hedge against equities because I think
Speaker 10: any downside this time is not going to be caused
Speaker 10: by rising inflation, but falling inflation. And that's where I
Speaker 10: think people are missing kind of the second question that
Speaker 10: you ask about inflation falling, Why is it falling? Usually
Speaker 10: it falls because demand falls, and I think you're seeing
Speaker 10: that on the services side, and I think you're seeing
Speaker 10: that in the labor market.
Speaker 5: In a fixing can market, Brent, how much credit risk
Speaker 5: should I be taking? I can sit into your treasury
Speaker 5: and get almost four percent here. How do you think
Speaker 5: about credit and credit risk?
Speaker 10: I think you want to be higher in the credit
Speaker 10: quality spectrum. I think you're not being paid much to
Speaker 10: take on excess credit risk right now, spreads are pretty tight,
Speaker 10: and it kind of goes back to the reality that
Speaker 10: I just don't think people are pricing in the possibility
Speaker 10: of all the warning signs that are out there potentially
Speaker 10: being actual, real warning sids, not things that are going
Speaker 10: to go away because of the post COVID period being odd. Look,
Speaker 10: that's my bottom line. It's not that people shouldn't be
Speaker 10: taking risk or you should dramatically alter your asset allocation.
Speaker 10: Just make sure you're taking the risk that you want
Speaker 10: to take, and that if the stuff does hit the fan,
Speaker 10: that you don't do what I tell every investor not
Speaker 10: to do, and yet they want to do it every time,
Speaker 10: which is not sell stocks while there's people panic. And
Speaker 10: so just make sure you're comfable at the risk level
Speaker 10: and if last week comes to fruition that happens again,
Speaker 10: that you're able to hold through that, because I do
Speaker 10: think it will be brief and mild, but I do
Speaker 10: think there will be uncomfortable moments for people in the future,
Speaker 10: especially with an election on the docket. For example.
Speaker 3: Well, I was going to bring up the election too,
Speaker 3: because more and more I feel like I'm hearing anecdotally
Speaker 3: that the election is becoming a big risk for say,
Speaker 3: capital expenditures, that who what CEO is going to will
Speaker 3: lay out a lot of capex in the US when
Speaker 3: they don't even know what tax tax policy is going
Speaker 3: to be, and there is so much risk. I also
Speaker 3: was reading an article I think it was in the
Speaker 3: Journal that talked about how or the Ft, that talked
Speaker 3: about how the IRA projects have been delayed and delayed
Speaker 3: and delayed, and this is all that capex cycle we've
Speaker 3: been waiting to see deployed. How do you think that
Speaker 3: plays out?
Speaker 10: I think it plays out exactly the way that you
Speaker 10: just mentioned, So thanks for answering the question for me.
Speaker 10: I mean, I do think that's a reality. Look, investors
Speaker 10: should not overreact to any recep to any presidential cycle.
Speaker 10: If you look historically, what matters more is where you're
Speaker 10: at in the business cycle, not who's in actually in office.
Speaker 10: And that's where I think you know, just right now,
Speaker 10: we're later in a business cycle. The unemployment rate is
Speaker 10: still low, it's actually rising, but it's still low, and
Speaker 10: typically in that environment you do get presidents who actually
Speaker 10: preside over a recession. I think all those things that
Speaker 10: you mentioned are concerns that are out there, as well
Speaker 10: as the economic concerns which I don't think are settled yet,
Speaker 10: which I do think means that there'll be more volatility
Speaker 10: that I just want people to be prepared for. It's
Speaker 10: been a bit odd that the market has kind of
Speaker 10: gone in one direction, at least those seven stocks have
Speaker 10: pushed in one direction while everything else has been a
Speaker 10: little bit weaker. But it's kind of an interesting period
Speaker 10: of time where I think we're closer to a recession
Speaker 10: at least according to labor market, than any point in
Speaker 10: the last fifteen or sixteen years absent COVID, and people
Speaker 10: are willing to take all kinds of risk at this
Speaker 10: moment because they don't believe things that work in the
Speaker 10: past will work in the future.
Speaker 5: All Right, Brent, thanks so much for joining us. Always
Speaker 5: appreciate getting a few minutes of your time. Brent Shouty,
Speaker 5: chief investment officer at Northwestern Mutual Wealth Management Company there
Speaker 5: based in Milwaukee, Wisconsin, And again my call on Milwaukee,
Speaker 5: pound for pound, some of the smartest money managers I've
Speaker 5: ever seen, and I don't know why it is. Maybe
Speaker 5: it's a water. Maybe it's a water. University of Michigan, University, Wisconsin.
Speaker 5: I'm sorry, Ben, I have a mistake there. Anyway, Still
Speaker 5: cut some smart folks there.
Speaker 2: So you're listening to the Bloomberg Intelligence Podcast. Catch us
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Speaker 5: Another big story out there is Google that hard justice
Speaker 5: coming down hard. Yeah, but I just don't know what
Speaker 5: it really means. What can they do? Jennifer re joins
Speaker 5: us Bloomberg Intelligence Senior litigation analyst on the DOJ thinking
Speaker 5: about Google may thinking about breaking up a Google after
Speaker 5: pushing through a landmark anti trust case. So, Jen, thanks
Speaker 5: so much for joining us here. Explain to us what
Speaker 5: the DOJ has done is thinking about doing as it
Speaker 5: relates to Google.
Speaker 2: Here.
Speaker 9: Yeah, well, you know, now push comes to shove with
Speaker 9: this case because it hasn't. The DOJ hasn't really talked
Speaker 9: too much about remedies. It's been working on liability in
Speaker 9: it won and it won pretty resoundingly, So now it
Speaker 9: has to think about what it wants to ask the
Speaker 9: judge to do to remedy what the judge found to
Speaker 9: be anti competitive about what Google's been doing. And I
Speaker 9: have to say that the idea of a structural request
Speaker 9: or a breakoup's been around since twenty twenty because the
Speaker 9: Department of Justice inserted it into the first complaint at
Speaker 9: filed back in October of twenty twenty. It said, we
Speaker 9: may be asking the judge for structural relief as necessary,
Speaker 9: and it's something the DJ's thinking about. And I don't
Speaker 9: think it's a surprise. Why not go for it? You know,
Speaker 9: there's kind of a big is bad mentality right now,
Speaker 9: And if that's the case, then you want to break
Speaker 9: apart these dominant firms and they have this win, why
Speaker 9: not try to go for the gold on this?
Speaker 3: So that's the case, though, I mean, is it one
Speaker 3: of those things where they're going to go for it
Speaker 3: but really it's going to be okay and they're not
Speaker 3: going to do it, and they're going to do something else,
Speaker 3: and then what's that something else instead?
Speaker 9: Look, I think they will. It's going to be up
Speaker 9: to the judge and my gut here is that the
Speaker 9: judge probably would not order that kind of drastic relief.
Speaker 9: I just think that the judge was really specific here
Speaker 9: about finding that it's the default agreements that Google had
Speaker 9: entered into that were anti competitive, and what was harmful
Speaker 9: about them was that it did not allow the rivals
Speaker 9: to gain the data they needed through searches to have
Speaker 9: scale to be a good enough search engine. And those
Speaker 9: are two big issues. So if those are the two
Speaker 9: things that are anti competitive, my suspicion is the judge
Speaker 9: will say, hey, no more default, no more payment to
Speaker 9: be the default search engine at these key search access points.
Speaker 9: And by the way, maybe you need to share some
Speaker 9: of this data you've collected over the years through all
Speaker 9: these searches with rivals to give them a chance to
Speaker 9: get better. Those are two options. And leahon Island's reporting
Speaker 9: was great about also this AI issue and concerned about
Speaker 9: using its dominance to get a lead in AI. And
Speaker 9: maybe the dj will do something there too.
Speaker 5: Because the AI thing is the one that I think
Speaker 5: has a lot of people concerned, not investors but just
Speaker 5: people think about AI and what it means for privacy
Speaker 5: and all these other issues. What does it mean for
Speaker 5: jobs and security and all these things which the market
Speaker 5: nobody has an idea, and certainly not the courts or
Speaker 5: regulators here. But what are Google's defenses here here, given
Speaker 5: that they did lose that antitrust case.
Speaker 9: I think one of the things Google will do will
Speaker 9: point to language by the judge, And actually there was
Speaker 9: quite a bit of it in the complaint about the
Speaker 9: fact that it really has been a great innovator, that
Speaker 9: it's been ingenius, that the fact of the matter is
Speaker 9: it developed the best quality search engine in the world
Speaker 9: by putting in money, by putting in innovation, by hiring
Speaker 9: great engineers and ingenuity, the judge did say, And I
Speaker 9: think Google will say, look, you have no And also
Speaker 9: the judge, by the way, said, even though Google had
Speaker 9: obtained a monopoly position, it continued to innovate, even though
Speaker 9: it didn't really have to once it gained that spot.
Speaker 9: So Google will say, look, you know, you have no
Speaker 9: guarantee that that same kind of innovative spirit will be
Speaker 9: behind the parent of this new company. If you cleave
Speaker 9: off Android or cleave off Chrome and it's run by
Speaker 9: some other entity, you know that might not be in
Speaker 9: that entity's DNA. You have acknowledged that we're innovators and
Speaker 9: that will continue to innovate, and it makes the most
Speaker 9: sense for these assets to stay in our hands. That's
Speaker 9: what I think Google will say.
Speaker 3: Google stock is down by Bowel, okay, alphabet stock down
Speaker 3: about three point five percent. Does that feel right in
Speaker 3: relation to what you're talking about and what you're looking
Speaker 3: at in the timeline or are we underpricing this kind
Speaker 3: of some kind of risk here?
Speaker 4: What do you think?
Speaker 9: I tend to think the market always overreacts a little
Speaker 9: bit to headlines. It might have been a little bit
Speaker 9: of a shock the news that the dj is actually
Speaker 9: going to ask for this, but this has been handied
Speaker 9: around as a possibility now for a couple of years,
Speaker 9: and I don't think anybody should be very surprised. And
Speaker 9: you know what, this is still going to take a
Speaker 9: really long time. Google's going to appeal. Google will fight this,
Speaker 9: and in particular, if there's a divestit your order, Google
Speaker 9: will try to take this all the way to the
Speaker 9: Supreme Court. And I have little doubt that that kind
Speaker 9: of an order would be stayed pending all these appeals,
Speaker 9: so it would be years before they'd be implemented. So
Speaker 9: I think that the impact really is still to be
Speaker 9: felt for quite some time.
Speaker 5: All right, Jen, thanks as always, life savery. When it
Speaker 5: comes to this stuff, I have no idea, you know,
Speaker 5: kind of how to gauge the risk here, but fortunately
Speaker 5: we have experts like General to help us out. Generally
Speaker 5: is a senior litigation analyst when we're intelligence, you know.
Speaker 5: To answer your question, Alex, I kind of thought this
Speaker 5: was more than I would have thought that the stock
Speaker 5: would have traded down. I thought it would have been
Speaker 5: a nothing burger. Oh, here we go again, trying to
Speaker 5: break up bake Tech. Nothing ever comes from it.
Speaker 1: But it all.
Speaker 5: It's off three point four percent, which leads me to
Speaker 5: believe that some people are saying, we need to think
Speaker 5: about some remedies that the judge may impose and what
Speaker 5: that may mean for the value.
Speaker 3: I mean, to be fair, it wasn't a whole lot
Speaker 3: of nothing before the cash market opened.
Speaker 4: It wasn't.
Speaker 3: It was down barely, so clearly there might be something
Speaker 3: to that as well.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 2: Just say Alexa playing Bloomberg eleven thirty.
Speaker 3: All right, let's get about our take on the markets
Speaker 3: here with Victoria Fernandez, Chief market strategistic Crossmark Global Investments.
Speaker 3: Victoria been saying it's a nothing burger CPI, and it
Speaker 3: was a nothing burger market reaction. Am I right or wrong?
Speaker 11: Well, Alex, I think you're right in the sense of
Speaker 11: the report itself did not probably bring any big news.
Speaker 11: I think the ramifications in regards to what the Fed
Speaker 11: is going to do have probably changed because of this report.
Speaker 11: So we know, after the last ten days or so,
Speaker 11: the market's really been pricing in that fifty basis point
Speaker 11: move after the weekly jobless claim's last week, really anticipating
Speaker 11: that the Fed was going to jump in and really
Speaker 11: kind of give us a lift off here of fifty
Speaker 11: basis points. I think that's changed following today's report. You're
Speaker 11: seeing some of that get priced out of the market.
Speaker 11: It's why we originally saw yields and move a little
Speaker 11: bit higher after the report. They've kind of settled back
Speaker 11: down again, but I think we're going to have to
Speaker 11: see some repricing where it's just a twenty five basis
Speaker 11: point cut in September, although the market is still anticipating
Speaker 11: one hundred basis points by the end of the year,
Speaker 11: and I think that is too much and we'll continue
Speaker 11: to see some repricing over the next couple months.
Speaker 5: All right, Victoria, Now, with a little bit of hindsight,
Speaker 5: what did you and your colleagues Acrossmark make of that
Speaker 5: market action a week ago Monday? From your perspective, what happened?
Speaker 11: Yeah, so it was interesting because you got a weekly
Speaker 11: jobless claims number and then we got the non farm
Speaker 11: payrolls number. Okay, it came down, but it wasn't like
Speaker 11: this huge difference that really just caused us to take
Speaker 11: a step back and look and say, oh, my goodness,
Speaker 11: everything's changed. We have seen a lot of maybe yellow flags,
Speaker 11: I don't want to say red flags, but concerns in
Speaker 11: the market around growth, where we've already been in that
Speaker 11: camp that we think the economy is slowing, that we
Speaker 11: have to be cautious of pullbacks in the market so
Speaker 11: that there's overvaluations and we need to see those names
Speaker 11: come back. I mean, you look at the numbers in
Speaker 11: the Jolts market, forget non farm payrolls right, immigration affects that,
Speaker 11: there's other things that affect it. In seasonality. You look
Speaker 11: at the jolts number. Openings are down, quits are down.
Speaker 11: The key number we watch is the rehiring rate or
Speaker 11: the hiring rate itself. Both of those are in downward trends.
Speaker 11: So we've been seeing that manufacturing has been poor. So
Speaker 11: there's other elements coming in there that are telling you
Speaker 11: things don't look so good. For us, it was more
Speaker 11: of a confirmation of what we had been thinking. What's
Speaker 11: surprising to us was the turnaround. How quickly the market
Speaker 11: just went from oh, my goodness, the sky is falling
Speaker 11: to oh, never mind, the sun's out and everything's great.
Speaker 11: There was such a quick turnaround that that makes us
Speaker 11: a little bit nervous as to where we're sitting right now.
Speaker 4: So if you're nervous, what do you do?
Speaker 11: Yeah, So for our clients, what we've been doing because
Speaker 11: we've been nervous, and what we continue to do is
Speaker 11: really kind of add to more of that defensive or
Speaker 11: staples part of our portfolio.
Speaker 7: We have exposure to tech.
Speaker 11: Hopefully people were doing what we've been doing all year
Speaker 11: and trimming some of those tech names is those valuations
Speaker 11: got a little bit too high, and we've been adding
Speaker 11: into more of the defensive areas, into some of the
Speaker 11: healthcare names, into those staples names. We do like the
Speaker 11: banks because of the yield curve steepening again will be
Speaker 11: beneficial for banks, but it all comes down to those
Speaker 11: companies with solid balance sheets. You really got to kind
Speaker 11: of dig in there. It's not just all sectors, but
Speaker 11: discretionary versus staples continues to be low, and for us,
Speaker 11: that's another signal that the market has not reached a
Speaker 11: conviction low. We could see the market pulling back to
Speaker 11: the low that we saw last week again. So I
Speaker 11: think you need to kind of fill in your portfolio
Speaker 11: a little bit on the defensive side.
Speaker 5: How about on fixed income Victoria Here we're the opportunities here.
Speaker 5: I mean to your treasury, we're just just a little
Speaker 5: bit below four percent here. That seems like a reasonable return.
Speaker 5: Or do I want to take some credit risk out there?
Speaker 11: So look, I mean you're talking my language. I manage
Speaker 11: our taxable fixed income strategies here at Crossmark, So we
Speaker 11: want people to have some fixed income exposure. If you
Speaker 11: think the FED is going to cut rates, and I
Speaker 11: think everyone assumes they will at some point over the
Speaker 11: next couple of months. Then you can have some advantage
Speaker 11: to being in the short end of the curve. Even
Speaker 11: now with yields lower than where they had been, you
Speaker 11: still have the opportunity to get in and take advantage
Speaker 11: of that short end of the curve coming down. I
Speaker 11: do think also you mentioned credit credit spreads have behaved
Speaker 11: really well. Did they widen out, you know, when all
Speaker 11: the volatility was going on in the market, Yes, but
Speaker 11: they've already tightened up a little bit. So I think
Speaker 11: you can add some credit exposure, high quality credit we
Speaker 11: don't like junk bonds, investment grade credit a little bit
Speaker 11: further out the curve to lock in some of those
Speaker 11: rates you see right now and have good cash flow
Speaker 11: to help buffer maybe some equity volatility going forward.
Speaker 4: When you take a look at the rest of earning season.
Speaker 3: By the way, how closely are you looking at the
Speaker 3: specifics when we have so much uncertainty with the Fed
Speaker 3: as well as the upcoming election.
Speaker 11: Yeah, earnings are key, and I know we're kind of
Speaker 11: winding down this earning season and it's actually kind of
Speaker 11: produced numbers better than what we thought that we would see.
Speaker 11: We actually thought we'd see more margin compression coming, although
Speaker 11: the PPI numbers tell us that there was some margin
Speaker 11: compression in there, so maybe it starts to show up
Speaker 11: in the third quarter. Guidance was very weak for the
Speaker 11: majority of companies in regards to consumers.
Speaker 7: You were talking about the strength of the consumer.
Speaker 11: So I think we're going to see a lot of
Speaker 11: that flow through. Hiring its down, so wages will stagnate.
Speaker 11: I think a lot of that is going to filter
Speaker 11: into third quarter earnings. People are already starting to look
Speaker 11: afforward to that quarter and what's going to happen there.
Speaker 11: That could also weigh on the markets a little bit.
Speaker 11: But this quarter turned out to be somewhat better than
Speaker 11: what we expected it to be.
Speaker 7: But again right there.
Speaker 11: At that double digit line, right about ten percent EPs growth?
Speaker 5: All right, very good, Victoria Fernandez, Thank you so much.
Speaker 5: We appreciate it. Victoria Fernandez. Market strategists across Mark Global Investments,
Speaker 5: the Pride of the Houston, Texas native Houston Kalstan put
Speaker 5: there some good stuff.
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