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

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

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Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg

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

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Today we got the Challenger job cuts which were quite fascinating.

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Speaker 2: They told it a little over one hundred and seventy

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Speaker 2: two thousand. That's one hundred and three percent increase from

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Speaker 2: last year and the most is.

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Speaker 3: July of twenty twenty.

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Speaker 2: Joining us now is Mark Niquette, Bloomberg Real Economy Reporter.

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Speaker 2: Can you put those numbers in context for us?

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Speaker 4: The numbers clearly show that there's going to be a

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Speaker 4: drag on the monthly jobs report. We have a story

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Speaker 4: up on the terminal right now that shows economists are

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Speaker 4: saying we could see a hit of as many as

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Speaker 4: half a million US jobs in the coming months. The

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Speaker 4: combination of direct firings of federal workers but also the

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Speaker 4: indirect impact on federal contractors or workers for entities that

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Speaker 4: do business with the government or get federal funding who

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Speaker 4: will lose their jobs.

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Speaker 5: Okay, that would get people's attention here, So will we

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Speaker 5: see any of that in the private payrolls data.

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Speaker 6: We're going to see tomorrow and get any hint to that.

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Speaker 4: We might see some impact in the report on Friday,

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Speaker 4: but probably not until the reports that come out in April,

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Speaker 4: for for March and for March and April. And that's

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Speaker 4: because the survey period when the council are conducted is

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Speaker 4: it was before Valentine's Day weekend when when a lot

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Speaker 4: of the firing started. So we're thinking that the February

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Speaker 4: report will not capture or you know, the bulk of

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Speaker 4: the firings that happened after that.

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Speaker 2: Also there's the firings, but then there's the I'm taking

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Speaker 2: my package and going and if it's the latter, that

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Speaker 2: won't come up in the numbers till after September, right,

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Speaker 2: So it's still going to be super noisy.

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Speaker 4: Correct, I mean, the there's about seventy five thousand federal

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Speaker 4: workers were told who took the offer to essentially resign

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Speaker 4: but continue to be paid through September, so you know,

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Speaker 4: we won't see cuts until September. And in fact, you know,

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Speaker 4: we could see some of these workers added to the

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Speaker 4: workforce if they take another job.

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Speaker 7: You know, while they're collecting their you know, sort of

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Speaker 7: their severance.

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Speaker 8: Do we know mark the extent to which Elon Musk

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Speaker 8: in this dose team did the magnitude of job cuts

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Speaker 8: they'd like to see.

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Speaker 7: I don't think we've seen a number. You know, they've

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Speaker 7: talked more in terms.

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Speaker 4: Of federal spending, you know, which would include you know,

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Speaker 4: cuts of federal workers. Elon must just talking about trying

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Speaker 4: to cut two trillion dollars of federal spending, which would

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Speaker 4: be you know, almost impossible to do unless you really

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Speaker 4: got Social Security and Medicare and the military because that's

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Speaker 4: where the bulk of the spending is. But you know,

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Speaker 4: clearly they're they're going agency by agency and you.

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Speaker 7: Know, trying to reduce headcount. And in particular.

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Speaker 4: They've they've already said they wanted the agencies to get

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Speaker 4: rid of pretty much all of their probationary workers. These

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Speaker 4: are folks who came on on the payrolls within the

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Speaker 4: last year.

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Speaker 2: Walk us through what everyone's expecting for tomorrow, sort of

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Speaker 2: where the strength is going to be in the labor market,

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Speaker 2: where the crack is going to be, and where's the

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Speaker 2: TVD going to be.

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Speaker 7: Well, I think everybody's looking to see what the top

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Speaker 7: line number is if in fact, you know, we're starting

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Speaker 7: to see impacts of not necessarily the.

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Speaker 4: Firings of the federal workers, but sort of the knock

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Speaker 4: on effects of you know, these federal contractors who are

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Speaker 4: losing their jobs or you know, folks who benefit or

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Speaker 4: depend on federal spending.

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Speaker 7: Because you know that has happened and that has been.

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Speaker 4: Going on since before you know, the survey period for

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Speaker 4: this report.

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Speaker 7: You know, there was a there was a federal.

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Speaker 4: Hiring freeze in January, for example, and spending that started

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Speaker 4: to be cut.

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Speaker 7: You know, right after Trump took office.

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Speaker 4: So you know, I think we're trying to parse out

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Speaker 4: just what kind.

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Speaker 7: Of impact that's had on the top line numbers.

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Speaker 5: At thirty seconds left, mark you're a member of the

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Speaker 5: Real Economy team covering the intersection of government politics in

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Speaker 5: the economy. DOGE is the intersection of government politics in

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Speaker 5: the economy. Is there any pushback or what's the level

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Speaker 5: of pushback from anybody that you think is important against DOSEE?

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Speaker 4: I think you're starting to see pushed back from in

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Speaker 4: some cases, you know, Republican senators and Congressmans who are

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Speaker 4: seeing the feeling the effect of these cuts in their

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Speaker 4: in their districts or their states. In fact, one of

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Speaker 4: the aspects of the story we have on them I

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Speaker 4: have up on the terminal right now is states trying

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Speaker 4: to recruit fired federal workers to join the state workforce,

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Speaker 4: in particular if they have a job opening with a specialty,

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Speaker 4: like a scientific specialty, for example, that.

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Speaker 7: A fired federal worker could fill.

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Speaker 4: So you know, some of the pushback I think is

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Speaker 4: being seen as an opportunity for some of these states

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Speaker 4: to maybe bring some of these federal federal workers, particularly

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Speaker 4: if they have an expertise, into their workforce.

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Speaker 3: All right, thanks so much, We really appreciate it.

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Speaker 2: Mark Mark Niquette joining us Bloomberg Real Economy Reporter.

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

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Speaker 1: weekdays at ten am Eastern on Apple Coarclay and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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

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Speaker 2: Alex Deal here alongside paulsw We need this a Boomberg

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Speaker 2: Intelligence Radio. We are broadcasting to live from our Interactive

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Speaker 2: Broker studio right now here in midtown Manhattan. As John

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Speaker 2: is talking about, we are well off the lows of

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Speaker 2: the session just whipped around by headlines on tariffs. Sylvia

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Speaker 2: Dablonski is CEO and CIO of Defiance et Apps, and

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Speaker 2: she is here to join us on her take on

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Speaker 2: the markets broadly. Sylvia, do you feel like there is

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Speaker 2: a Trump put out there? Have we learned that in

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Speaker 2: the last few days.

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Speaker 9: Good morning, Alex and fall.

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Speaker 3: Great to be here.

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Speaker 9: You know, I think we're waiting for it. We're so

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Speaker 9: the market is certainly waiting for it, and I think,

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Speaker 9: you know, that's what we're seeing here right The first

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Speaker 9: thing that we're seeing is headwinds from the tariff policy

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Speaker 9: and things like that. And the put that comes into

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Speaker 9: play should be things like tax cuts, and it should

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Speaker 9: be things like deregulation, and you know, kind of that

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Speaker 9: that positive news that the market was really rallying around

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Speaker 9: around the election time, and so that's something that the

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Speaker 9: market's certainly waiting for. I think it's there. I just

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Speaker 9: think that this is the first order of priority. So

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Speaker 9: we're going to probably have to have some volatility along

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Speaker 9: the way for the next couple of months.

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Speaker 5: So volatile, So how does an investor kind of I

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Speaker 5: don't know, deal with the volatility?

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Speaker 3: Is it step aside a little bit.

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Speaker 5: Is it just kind of try to look through to

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Speaker 5: the other side, because again we are seeing I guess

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Speaker 5: just from the top of the S and P about

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Speaker 5: a six or seven percent draw down here. I'm not

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Speaker 5: sure to what extent they gets Peel's attention, but it's

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Speaker 5: going to be tough for the next several months.

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Speaker 7: As you suggested, it's gonna.

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Speaker 6: Be tough for the next several months.

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Speaker 9: But I just think that, you know, whenever I see

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Speaker 9: pullbacks like this, and you know, we've talked about this

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Speaker 9: with you all before, I think that if you have

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Speaker 9: a long term mindset as an investor, these are kind

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Speaker 9: of the times, you know, when when everyone is fearful,

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Speaker 9: it's it's time to sort of jump in and buy

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Speaker 9: on those dips to hopefully experience the rips later on.

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Speaker 9: You know, you look like stock second video that I've

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Speaker 9: just precipitously fallen really in the last few weeks.

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Speaker 6: And you know, what does that mean?

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Speaker 9: Does that mean that AI is kind of gone, that

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Speaker 9: we're no longer going to monetize on AI that you

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Speaker 9: know that earnings call where they still have this you know,

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Speaker 9: massive level of demand out there and they're you know,

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Speaker 9: trying to catch up with supply. I mean, the headline

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Speaker 9: story for some of these AI companies and chip companies

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Speaker 9: that have fallen, I think is just a great opportunity

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Speaker 9: to go in and buy it on. And there are

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Speaker 9: so many places to look in the market as well.

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Speaker 9: You have great companies like Broadcommon Oracle that participate there.

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Speaker 9: You know, strong balance sheets, triple digit growth in AI revenue,

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Speaker 9: is well diversified, and then you know, you can look

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Speaker 9: at XMAC right if you're kind of spooked by the

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Speaker 9: mag seven and you know, don't want to add more.

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Speaker 9: There you can diversify your S and P five hundred

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Speaker 9: exposure and pick up the stocks that are on sale

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Speaker 9: for the other four hundred and ninety three. And most

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Speaker 9: stocks are on sale outside of defense right now. You know,

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Speaker 9: you see some of the consumer stable defensive names rallying.

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Speaker 9: But besides that, everything is more or less on sale.

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Speaker 2: When we talk about why they're on sale, though, like

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Speaker 2: Marvel could be on sale because I mean their earnings

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Speaker 2: were great, but they could be on sale because they

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Speaker 2: didn't exceed expectations in the way that the market was

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Speaker 2: pricing versus I'm on consumer staple stock and all of

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Speaker 2: a sudden, my input costs are going to go higher.

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Speaker 2: Just go at Walmart's run apply pressure on their suppliers

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Speaker 2: in China. That's a different kind of reason. Does it matter?

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Speaker 9: You know, it matters, but not to the tune of

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Speaker 9: this draw down, right, And don't know, we don't know

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Speaker 9: what's going to happen with tariffs. I suspect there will

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Speaker 9: be some tariff policy that you know is not what

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Speaker 9: it is today, that that could be wrong. But I

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Speaker 9: think what the market really needs on that is just

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Speaker 9: clarity so that you can price price in to just

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Speaker 9: answer that question like what does that actually mean?

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Speaker 6: Right?

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Speaker 9: But I don't suspect that that means a twenty percent

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Speaker 9: draw from from highs that we're seeing on some of

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Speaker 9: these companies, right, So I think it's just more around

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Speaker 9: uncertainty and clarity. And usually until you get that, you

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Speaker 9: get that volatility and get those pullbacks. Once you start

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Speaker 9: getting a certainty, that's when you start seeing the rallies

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Speaker 9: and the rips. And that might be a couple months off.

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Speaker 9: But you know, as an investor, I think that you know,

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Speaker 9: these are kind of the times when you think about

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Speaker 9: dollar cost averaging and investors actually are not panic selling.

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Speaker 9: It's pretty interesting to see what's happening with this market,

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Speaker 9: and it's almost like a neutral. There's a lot of

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Speaker 9: sitting the sidelines that cash is not coming back into

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Speaker 9: the market, that is, you know, on the sidelines, and

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Speaker 9: you know that's a lot of it too, but we

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Speaker 9: don't see you know, massive selling from what we're hearing

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Speaker 9: on the street from the banks and brokene froms and

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Speaker 9: things like that. So you know, I also think we're

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Speaker 9: in correction territory here, so that's you know, we'll see

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Speaker 9: what happens in coming days.

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Speaker 5: Yeah, I'm just looking at the WEI function the world

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Speaker 5: equity markets. It gives you a lot of performance data

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Speaker 5: as well as volume of stocks traded. And you're right, Sylvia,

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Speaker 5: today the volume is actually a little bit lighter than

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Speaker 5: the last thirty day at.

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Speaker 3: Very les yesterday was low too.

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Speaker 5: Yeah, so you're not seeing that, which is an interesting side. So, Sylvia,

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Speaker 5: given that backdrop here and maybe a little bit of

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Speaker 5: a bias to buy on the weakness here, what's factored

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Speaker 5: into your FED.

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Speaker 6: Call right here?

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Speaker 9: Well, you know we're hearing a lot of updates that

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Speaker 9: the market is starting to think about maybe two and

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Speaker 9: even three rate cuts this year, and you know that's

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Speaker 9: maybe that's part of the Trump put.

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Speaker 6: Too, is the FED put.

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Speaker 9: So if we you know, if we get a couple

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Speaker 9: of extra rate cuts, I think the market will like

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Speaker 9: that story.

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Speaker 6: But I think that's a tricky thing, right.

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Speaker 9: I think we for some reason get very excited about

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Speaker 9: ray cuts, and there's this barometer that the more the better.

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Speaker 9: But raycuts mean that things are kind of slowing down,

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Speaker 9: and I think BILL aren't in that sweet spot where yes,

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Speaker 9: we have some slightly lighter data, but it doesn't look

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Speaker 9: like we're going into a recession. It doesn't look like

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Speaker 9: a growth scare. It looks like a slight slow down.

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Speaker 9: And you know, so I think if that's the case,

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Speaker 9: the FED won't have to cut all that much. Maybe

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Speaker 9: it's an extra cut or too. But you know, I

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Speaker 9: hope we don't have five FED cuts. Do you think

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Speaker 9: if we have ad cutter two that propels the market

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Speaker 9: a little bit?

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Speaker 5: Right, Sylvia, thank you so much for joining us. Really

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Speaker 5: appreciate it. Sets a chief officer and chief investment officer

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Speaker 5: at Defiance ETF.

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

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Speaker 1: weekdays at ten am Eastern on Apple Clock Lay and

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Speaker 1: Android Auto with the Bloomberg Business app. Listen on demand

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Speaker 2: All right, happy for Friday Eve, everybody, Alex, you alongside

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Speaker 2: paulse We need this at Bloomberg Intelligence Radio markets not

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Speaker 2: around the lows of the session, but looks like we

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Speaker 2: could get there.

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Speaker 3: Spof by about one point three percent.

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Speaker 2: The NASDAC got by one point seven percent. Joann Feenie,

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Speaker 2: partner and portfolio manager at Adviser's Capital Management, joins us. Now, Joanne,

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Speaker 2: we were talking to Silva Jablonski and she very diplomatically said,

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Speaker 2: I'm buying the dip in some of the names that

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Speaker 2: she likes.

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Speaker 3: Would you echo that view?

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Speaker 10: Wel good morning, Alex. You know, it really depends where

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Speaker 10: you're positioned in the market. We actually did some trimming

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Speaker 10: back in January of our technology names because they've done

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Speaker 10: so well and they were above our target weights, and

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Speaker 10: we redoce them a little bit because you know, we

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Speaker 10: do see a year of volatility ahead. There's just an

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Speaker 10: enormous amount of policy uncertainty, both tariffs, government spending, taxation,

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Speaker 10: and geopolitical that you want to be a little bit careful.

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Speaker 6: Now, it really depends on the strategy.

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Speaker 10: Our balance strategy is designed to be a bit more conservative,

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Speaker 10: so we're not interested in buying the dip. We already

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Speaker 10: have full positions in the company's we really think are

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Speaker 10: going to power, for example, the AI revolution, So we

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Speaker 10: don't think this is a time to jump in unless

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Speaker 10: you have a sufficiently long focus and perhaps you don't

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Speaker 10: own enough.

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Speaker 6: Of what will drive growth in the future.

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Speaker 5: Joanne, how do you think about or how do you

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Speaker 5: navigate a lot of the noise that's now part of

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Speaker 5: this market, whether it comes from Washington, DC or other parts,

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Speaker 5: because boy, it seems to really have a big impact

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Speaker 5: on these markets short.

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Speaker 10: Term, you know, Paul, at first you'd better have a

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Speaker 10: strong stomach. You know, the measures of policy uncertainty that

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Speaker 10: are available show that right now policy uncertainty is higher

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Speaker 10: than it's been since the COVID crisis, since the Great

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Speaker 10: Financial Crisis, so we are definitely in unusual times. How

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Speaker 10: one navigates this is being positioned in several ways. Number One,

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Speaker 10: I think you've got to be well diversified across sectors.

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Speaker 6: That's sort of obvious.

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Speaker 10: But which companies you choose within those sectors is critically

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Speaker 10: important at this point in time. What you want to

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Speaker 10: do is combine positions in worse secular growth, that is

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Speaker 10: growth that is going to be less sensitive to those

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Speaker 10: policy shocks and will last for some years.

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Speaker 6: We think a lot of.

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Speaker 10: That is grounded in data centers, in AI and in

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Speaker 10: the changes those things are creating, in the way industrial

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Speaker 10: firms operate, in the way pharmaceuticals operate, and beyond. And

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Speaker 10: then secondly, what you want to find are high quality

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Speaker 10: companies that are more defensive and that offer investors some income.

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Speaker 6: Again, I'm talking about the balance.

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Speaker 10: Strategy, more a balance strategy that design to be conservative

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Speaker 10: as opposed to an aggressive SMID or growth or something

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Speaker 10: like that. But when you want to be in it

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Speaker 10: for the long term and you want some stability in

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Speaker 10: portfolios given this uncertainty that you just highlighted, I think

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Speaker 10: you want to secure some income. Whether that's a boring

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Speaker 10: company like a Philip Morris or an Altria or a

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Speaker 10: utility like a Duke Energy. These are good things to

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Speaker 10: buffer the volatility in the portfolio and drive some income

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Speaker 10: into clients' hands.

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Speaker 2: So where does that lead them, say, more allocation to

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Speaker 2: fixed income or something like that.

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Speaker 3: That could also provide that pickup.

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Speaker 10: Yeah, now that's something that advisors with their clients. That's

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Speaker 10: a decision they'll make together. As the portfolio manager. On

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Speaker 10: the equity side, it's not my call to decide whether

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Speaker 10: their financial planning requires a shift between equity and fixed income.

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Speaker 10: Right now, our fixed income side, though, is driving a

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Speaker 10: lot of income. So in balance, our average client is

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Speaker 10: somewhere around sixty two to sixty three percent equity and

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Speaker 10: the rest fixed, and they're getting really good income off

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Speaker 10: that fixed side, so that again helps them to quiet

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Speaker 10: their nervous stomachs and ride out the kind of volatility

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Speaker 10: we're seeing on the equity side.

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Speaker 5: How concerned, Joanne, are you about concentration risk in the

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Speaker 5: equity markets?

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Speaker 6: Very concerned.

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Speaker 10: I think that a lot of investors aren't aware of

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Speaker 10: how concentrated their holdings are, particularly if they're in ETFs

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Speaker 10: that are broad market exposed or mutual funds.

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Speaker 6: Similarly, I mean, you know, owning having.

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Speaker 10: Thirty five, thirty to thirty five percent of your portfolio

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Speaker 10: in just seven companies, in my view, is an irresponsible

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Speaker 10: place to be unless you have a twenty year horizon.

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Speaker 10: It's just not worth the volatility that that's likely to

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Speaker 10: create in your strategy, it's not worth it. So it's

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Speaker 10: something we see a lot in clients who come to us.

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Speaker 10: They come to us with highly concentrated portfolios, and they

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Speaker 10: have to be worked out of those over time, you know,

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Speaker 10: without creating too much of a tax burden. So we'll

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Speaker 10: do that really carefully. But that's why we like not

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Speaker 10: to invest in the whole market. And I think, you know,

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Speaker 10: the S and P five hundred is going to be

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Speaker 10: challenged this year, and so you want to pick and

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Speaker 10: choose we know, maybe thirty five fifty stocks. I think

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Speaker 10: you can get enough diversification with that number of stocks,

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Speaker 10: keeps you out of the exposure to those concentrated you know,

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Speaker 10: S and P five hundred names, and still allows you

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Speaker 10: to get some growth in the portfolio.

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Speaker 6: So be wary of concentration, very risky. Right now, you.

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Speaker 2: Mentioned pharmaceuticals, biotech and all the innovation that's going there.

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Speaker 3: Can you talk a little bit about some of the

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Speaker 3: picks that you like there? Thirty seconds?

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Speaker 6: Yeah, yeah, sure.

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Speaker 10: You know, biotech really suffered a lot when interest rates

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Speaker 10: went up, right, They suffered from funding shortages, fewer investments,

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Speaker 10: and so did their customers, So it was a really

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Speaker 10: tough time. More broadly into more mature companies, you know,

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Speaker 10: Johnson and Johnson, Bristol Myers.

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Speaker 6: Now, all of these names have hair.

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Speaker 10: On them because each of them, anybody that's been around

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Speaker 10: in pharmaceuticals, have some drugs.

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Speaker 6: That are you know, coming to end of life.

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Speaker 10: You know of their protections from patents, and so you

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Speaker 10: have to look at the names that have the best pipelines,

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Speaker 10: the most extensive and broad based pipelines. So that's why

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Speaker 10: we like you know, Bristol Myers, we like Pfizer. You know,

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Speaker 10: some of these companies have gone through a lot of pain,

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Speaker 10: but again look at the pipelines and you see real

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Speaker 10: opportunity for them to overcome of those declinents from their

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Speaker 10: legacy drugs.

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Speaker 5: All right, Joanne, thank you so much for joining us.

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Speaker 5: Really appreciate it. Joanne Foene, partner and portfolio management Advisor's

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Speaker 5: Capital Management, joining us via zoom from Ridgewood, New Jersey.

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