1
00:00:00,800 --> 00:00:04,040
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

2
00:00:04,040 --> 00:00:06,920
Speaker 1: my co host Matt Miller. Every business day, we bring

3
00:00:06,960 --> 00:00:11,520
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

4
00:00:11,560 --> 00:00:15,600
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

5
00:00:15,600 --> 00:00:18,479
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

6
00:00:18,480 --> 00:00:22,360
Speaker 1: at Bloomberg dot com slash podcast. It's checking with a professional,

7
00:00:22,600 --> 00:00:24,720
Speaker 1: see what it all means. We do that with Marcus More,

8
00:00:24,720 --> 00:00:30,240
Speaker 1: assistant portfolio manager at Zero Capital Advisors. Marcus, you know,

9
00:00:30,720 --> 00:00:34,120
Speaker 1: in these equity markets, at least we're seeing this volatility

10
00:00:34,200 --> 00:00:36,320
Speaker 1: over the last six seven eight trading sessions, kind of

11
00:00:36,320 --> 00:00:40,000
Speaker 1: one percent moves in either direction. What does that tell

12
00:00:40,040 --> 00:00:42,800
Speaker 1: you other than I guess if you're a good trader,

13
00:00:42,840 --> 00:00:44,239
Speaker 1: this is a kind of market, Like what do you

14
00:00:44,280 --> 00:00:47,400
Speaker 1: make out of it? Um? And first of all, thanks

15
00:00:47,400 --> 00:00:50,560
Speaker 1: for having me today. Um. Actually, the interesting we're having

16
00:00:50,560 --> 00:00:57,120
Speaker 1: that conversation today actually in the office and virtually UM,

17
00:00:57,160 --> 00:00:59,240
Speaker 1: and I've been I've felt for some time now that

18
00:00:59,320 --> 00:01:02,440
Speaker 1: the market is just lacked a direction. Um. It's felt

19
00:01:02,440 --> 00:01:05,679
Speaker 1: that way at least since you know, late summer. Um.

20
00:01:05,680 --> 00:01:08,840
Speaker 1: I think there's so many headlines and so many things

21
00:01:08,840 --> 00:01:15,160
Speaker 1: to be concerned about. UM. You've got obviously supply chains, inflation, UM, employment, UM,

22
00:01:15,319 --> 00:01:18,560
Speaker 1: people try to get back UM, delta variant, and so

23
00:01:18,720 --> 00:01:21,560
Speaker 1: all of these things political with it with the you know,

24
00:01:21,680 --> 00:01:23,440
Speaker 1: we have a deal reach now, but you know, we

25
00:01:23,440 --> 00:01:25,480
Speaker 1: weren't sure what that was gonna look like, you know,

26
00:01:25,560 --> 00:01:28,280
Speaker 1: just yesterday. UM. And so with all of that, I

27
00:01:28,280 --> 00:01:31,200
Speaker 1: think the market understands that there are a lot of

28
00:01:31,319 --> 00:01:33,480
Speaker 1: risk out there, and so when those risks popped to

29
00:01:33,560 --> 00:01:36,760
Speaker 1: the surface, I think it's a response of the market.

30
00:01:36,760 --> 00:01:40,600
Speaker 1: Response has been to move and move relatively aggressively. UM.

31
00:01:40,680 --> 00:01:42,839
Speaker 1: We felt for some time that there was more volatility

32
00:01:42,920 --> 00:01:45,000
Speaker 1: to come in the markets, and we when we're seeing that,

33
00:01:45,600 --> 00:01:49,200
Speaker 1: and so UM, to some extent, this is what I was.

34
00:01:49,320 --> 00:01:54,560
Speaker 1: I've been expecting more of myself throughout most of one

35
00:01:54,600 --> 00:01:57,960
Speaker 1: has been relatively benign. One way upward traffic. UM. I

36
00:01:58,000 --> 00:02:00,440
Speaker 1: feel like this, given where we are, all of the

37
00:02:00,480 --> 00:02:03,480
Speaker 1: things that we have in front of us to deal with, UM,

38
00:02:03,480 --> 00:02:05,600
Speaker 1: this makes sense to me that we're seeing the volatility

39
00:02:05,680 --> 00:02:07,720
Speaker 1: that we have that we have recently well and Marcus,

40
00:02:07,760 --> 00:02:09,799
Speaker 1: I wonder how this translates to the bond market as well,

41
00:02:09,840 --> 00:02:11,919
Speaker 1: because for a long time the bond market was sending

42
00:02:11,960 --> 00:02:14,320
Speaker 1: a different signal than the stock market. Was the stock

43
00:02:14,360 --> 00:02:16,799
Speaker 1: market continuing to climb the wall of worry and yet

44
00:02:16,840 --> 00:02:19,359
Speaker 1: yield staying really low, reflecting that there was still some

45
00:02:19,440 --> 00:02:23,240
Speaker 1: kind of you know, hesitation out there. Now, yields are

46
00:02:23,320 --> 00:02:25,960
Speaker 1: higher than they were, but still around you know, one

47
00:02:26,280 --> 00:02:28,720
Speaker 1: five percent, they're relatively low. Can you be a buyer

48
00:02:28,760 --> 00:02:32,720
Speaker 1: of bonds in this environment? I mean, I think, um,

49
00:02:32,800 --> 00:02:35,280
Speaker 1: you know, you'll let me talk my book as if

50
00:02:35,280 --> 00:02:38,200
Speaker 1: someone who focuses on high yield. UM, I definitely think

51
00:02:38,240 --> 00:02:42,160
Speaker 1: there's still uh, hi yield is still relatively attractive. UM.

52
00:02:42,200 --> 00:02:45,840
Speaker 1: I think the benefits and hi yo currently are the

53
00:02:45,880 --> 00:02:49,600
Speaker 1: fact that while we do have a lot of kind

54
00:02:49,639 --> 00:02:53,080
Speaker 1: of concerns and headwinds in the short term, fundamentally a

55
00:02:53,080 --> 00:02:56,160
Speaker 1: lot of these companies are performing much better. UM. I

56
00:02:56,200 --> 00:02:57,720
Speaker 1: think I looked at the S and P stimate for

57
00:02:57,760 --> 00:03:01,280
Speaker 1: two two earnings, UM the vague rou versus Q two

58
00:03:01,400 --> 00:03:06,200
Speaker 1: nineteen about sevent and so that's as an SNP as

59
00:03:06,240 --> 00:03:09,880
Speaker 1: a whole, that suggests that big picture, now again there

60
00:03:09,880 --> 00:03:11,600
Speaker 1: are some winners and there's some losers in that, but

61
00:03:11,919 --> 00:03:16,240
Speaker 1: big picture, we're kind of well beyond quote unquote recovery

62
00:03:17,280 --> 00:03:19,720
Speaker 1: and kind of moving into a kind of phase or

63
00:03:19,760 --> 00:03:22,799
Speaker 1: a period of growth. And so high are you could

64
00:03:22,800 --> 00:03:25,840
Speaker 1: offer us, I mean fundamentally better companies, more cash flow,

65
00:03:26,240 --> 00:03:28,280
Speaker 1: and so that's an attractive thing if you think about

66
00:03:28,280 --> 00:03:32,120
Speaker 1: how yield right now, UM, the makeup has more double

67
00:03:32,200 --> 00:03:34,800
Speaker 1: b UM rated bonds in it than it has at

68
00:03:34,840 --> 00:03:37,640
Speaker 1: any other point in its history UM. And so you

69
00:03:37,720 --> 00:03:40,600
Speaker 1: still have a lot of high quality names within the portfolio.

70
00:03:40,960 --> 00:03:43,160
Speaker 1: And then from a duration standpoint, the average duration for

71
00:03:43,200 --> 00:03:44,720
Speaker 1: HW yield right now three and a half three and

72
00:03:44,760 --> 00:03:47,840
Speaker 1: a half years UM relative to investment grade which is

73
00:03:47,880 --> 00:03:50,000
Speaker 1: eight and a half. So as you think about where

74
00:03:50,040 --> 00:03:53,880
Speaker 1: you'd rather be in a rising interest rate environment, I'm

75
00:03:53,920 --> 00:03:58,360
Speaker 1: comfortable taking you know, high yield with improving credit, stronger credit,

76
00:03:58,480 --> 00:04:02,880
Speaker 1: and much less duration. Marcus talked to us about credit quality.

77
00:04:02,920 --> 00:04:05,560
Speaker 1: It's I think actually just amazed, you know, being a

78
00:04:05,600 --> 00:04:09,760
Speaker 1: former credit analyst myself, how well corporate America has done.

79
00:04:09,760 --> 00:04:12,560
Speaker 1: And is that simply a focus of as we came

80
00:04:12,560 --> 00:04:14,600
Speaker 1: out of this eighteen month pandemic, is that just a

81
00:04:14,640 --> 00:04:17,599
Speaker 1: function of the FED was kind of backstopping everybody, and

82
00:04:17,640 --> 00:04:20,680
Speaker 1: we had a lot of fiscal stimulus. Well, I mean definitely.

83
00:04:20,720 --> 00:04:23,839
Speaker 1: I mean, I mean, I think the FED has been

84
00:04:23,880 --> 00:04:26,640
Speaker 1: a friend to markets for some time now, and it

85
00:04:26,720 --> 00:04:29,679
Speaker 1: definitely was a friend of markets during this period. Um,

86
00:04:30,040 --> 00:04:33,240
Speaker 1: the ability to access capital at a time which there

87
00:04:33,320 --> 00:04:36,440
Speaker 1: was great uncertainty was very important. UM. And then the

88
00:04:36,440 --> 00:04:38,840
Speaker 1: other piece of FED stimulus is that it put a

89
00:04:38,880 --> 00:04:42,160
Speaker 1: lot of money in consumer's pockets. And so as we

90
00:04:42,320 --> 00:04:46,000
Speaker 1: got through kind of the initial rollout phase and the

91
00:04:46,839 --> 00:04:49,400
Speaker 1: I don't I guess it, I call it the reopening,

92
00:04:49,440 --> 00:04:51,279
Speaker 1: but then we'd reclosed. I don't know how you really

93
00:04:51,279 --> 00:04:54,919
Speaker 1: want to characterize it, but um, you know, there was

94
00:04:55,040 --> 00:04:57,599
Speaker 1: a lot of pent up demand in the marketplace. And

95
00:04:57,680 --> 00:05:00,440
Speaker 1: so if you take on if you look at companies

96
00:05:00,480 --> 00:05:04,240
Speaker 1: that aren't or haven't been directly impacted by COVID in

97
00:05:04,360 --> 00:05:08,240
Speaker 1: terms of shutdowns or limit or limited activity, many of

98
00:05:08,279 --> 00:05:11,799
Speaker 1: these companies are reporting record sales growth and earning given

99
00:05:12,240 --> 00:05:15,960
Speaker 1: you know, the amount of FED stimulus and monetary stimulus

100
00:05:16,040 --> 00:05:18,720
Speaker 1: that we've seen in the marketplace, and so, um, it's

101
00:05:19,000 --> 00:05:21,400
Speaker 1: been a benefit for sure, and that has helped drive

102
00:05:21,560 --> 00:05:25,119
Speaker 1: much better credit quality throughout the high space and credit

103
00:05:25,160 --> 00:05:27,920
Speaker 1: space in general markets. Just quickly, in about thirty seconds,

104
00:05:28,000 --> 00:05:33,640
Speaker 1: what does the impact of policy normalization then have. I mean,

105
00:05:33,680 --> 00:05:36,720
Speaker 1: I think that's gonna be the big question as we

106
00:05:36,760 --> 00:05:42,880
Speaker 1: go forward. Right, Um, we consumer balances are in great shape. Um,

107
00:05:42,920 --> 00:05:46,920
Speaker 1: there's low levels of debt. But given the supply chain challenges,

108
00:05:47,000 --> 00:05:49,359
Speaker 1: how long is the consumer going to stay engaged and

109
00:05:49,440 --> 00:05:51,960
Speaker 1: wait through those supply chain challenges and be willing to

110
00:05:51,960 --> 00:05:54,240
Speaker 1: pay higher prices? I mean, I think that's really the

111
00:05:54,360 --> 00:05:56,200
Speaker 1: huge question that we still don't have an answer to.

112
00:05:56,680 --> 00:05:58,760
Speaker 1: But as a credit analyst, what I've really focused on

113
00:05:58,839 --> 00:06:01,200
Speaker 1: is just making sure that these companies can kind of

114
00:06:01,320 --> 00:06:04,760
Speaker 1: manage through the best case scenario and then definitely managed

115
00:06:04,760 --> 00:06:07,320
Speaker 1: through the worst case scenario. And Marcus, thanks so much

116
00:06:07,360 --> 00:06:09,440
Speaker 1: for joining us. We really appreciate you taking the time

117
00:06:09,440 --> 00:06:12,480
Speaker 1: and sharing your expertise with us. Marcus Moore, he's an

118
00:06:12,480 --> 00:06:16,919
Speaker 1: assistant portfolio manager at Zeo Capital Advisors. UH seeing some

119
00:06:17,480 --> 00:06:19,560
Speaker 1: even though we've got a big rally, we've had a

120
00:06:19,560 --> 00:06:23,000
Speaker 1: big rally UH in bonds, pushing those yields down. Still

121
00:06:23,040 --> 00:06:26,080
Speaker 1: see some opportunities in a high yield space here and

122
00:06:26,120 --> 00:06:29,640
Speaker 1: so again, as Marcus was suggesting, getting some normalization of

123
00:06:29,720 --> 00:06:32,880
Speaker 1: policy coming out of Washington over the next uh several weeks,

124
00:06:32,880 --> 00:06:35,800
Speaker 1: I guess next several months is going to be one

125
00:06:35,839 --> 00:06:38,039
Speaker 1: of the near term catalyst one or the other. We'll

126
00:06:38,040 --> 00:06:40,359
Speaker 1: have more coming up and all of that. This is Bloomberg.

127
00:06:43,720 --> 00:06:45,960
Speaker 1: You know, there's this wall of worry out there, the

128
00:06:46,120 --> 00:06:48,760
Speaker 1: Katie and I talked about a lot of Yet you

129
00:06:48,880 --> 00:06:52,440
Speaker 1: still see these markets moving higher despite some issues, whether

130
00:06:52,440 --> 00:06:54,720
Speaker 1: it be coming out of Washington, or be supply chain

131
00:06:54,839 --> 00:06:57,760
Speaker 1: issues or the FED. I mean, lots of issues out

132
00:06:57,760 --> 00:07:01,080
Speaker 1: there for investors to figure out to discount into their

133
00:07:01,480 --> 00:07:03,960
Speaker 1: valuations and their outlook. Let's turn to a professional now,

134
00:07:04,200 --> 00:07:06,800
Speaker 1: Lisa Erickson, Senior vice president and co head of the

135
00:07:06,800 --> 00:07:10,200
Speaker 1: Public Markets Group at US Bank. They have over one

136
00:07:10,720 --> 00:07:13,800
Speaker 1: billion dollars in assets under management, so they know what

137
00:07:13,840 --> 00:07:16,280
Speaker 1: they're talking about. Lisa, thanks so much for joining us here.

138
00:07:16,800 --> 00:07:18,240
Speaker 1: We got a little bit of good news out of

139
00:07:18,280 --> 00:07:20,440
Speaker 1: Washington this morning. Looks like the US government is not

140
00:07:20,440 --> 00:07:22,520
Speaker 1: going to at default at least in the next couple

141
00:07:22,520 --> 00:07:25,400
Speaker 1: of days or weeks. Um, give us your thoughts on

142
00:07:25,440 --> 00:07:29,040
Speaker 1: these markets here as we you know, climb higher but

143
00:07:29,160 --> 00:07:33,800
Speaker 1: with some increased volatility. Absolutely well, Paul, thanks for having

144
00:07:33,920 --> 00:07:36,760
Speaker 1: us today, and to your point, we still see the

145
00:07:36,840 --> 00:07:40,000
Speaker 1: outlook for the US equity market is upwards. Through the

146
00:07:40,080 --> 00:07:42,400
Speaker 1: end of the year, but with some back and forth

147
00:07:42,440 --> 00:07:45,440
Speaker 1: and volatile movement just because of the number of issues

148
00:07:45,480 --> 00:07:48,480
Speaker 1: going on. And the reason we really have that view

149
00:07:48,520 --> 00:07:51,680
Speaker 1: is if you look at the underpinning for where the

150
00:07:51,720 --> 00:07:55,360
Speaker 1: market has headed, we really see actually a still nice

151
00:07:55,480 --> 00:07:59,360
Speaker 1: macro environment. As we track hundreds of indicators across the

152
00:07:59,480 --> 00:08:02,840
Speaker 1: US and the global economy, we still see most readings

153
00:08:02,840 --> 00:08:06,000
Speaker 1: at pretty high absolute levels and actually a good trend

154
00:08:06,560 --> 00:08:09,120
Speaker 1: in the direction of those factors, meaning that if you

155
00:08:09,160 --> 00:08:12,400
Speaker 1: compare their most recent reading to the last month, we're

156
00:08:12,400 --> 00:08:15,760
Speaker 1: still seeing the majority of those have growth in the

157
00:08:15,800 --> 00:08:19,040
Speaker 1: direction they're headed. But that being said, to your point,

158
00:08:19,080 --> 00:08:22,280
Speaker 1: there is some wall of worry that the stock market

159
00:08:22,320 --> 00:08:25,040
Speaker 1: is having to climb, and those really have to do

160
00:08:25,120 --> 00:08:28,040
Speaker 1: with potentially the range of outcomes in the next few months.

161
00:08:28,400 --> 00:08:30,320
Speaker 1: You know, our hope is to continue to see some

162
00:08:30,440 --> 00:08:35,160
Speaker 1: normalization in the supply side and the labor market, which

163
00:08:35,200 --> 00:08:38,559
Speaker 1: would hopefully then also relead some of those inflationary pressures,

164
00:08:38,559 --> 00:08:41,400
Speaker 1: but the trend on that is not clear, so we've

165
00:08:41,400 --> 00:08:43,280
Speaker 1: got a little bit of back and forth with that

166
00:08:43,440 --> 00:08:46,559
Speaker 1: and some of the policy issues. Then we think again

167
00:08:46,600 --> 00:08:49,640
Speaker 1: the trajectories up in the near term, but will continue

168
00:08:49,679 --> 00:08:53,560
Speaker 1: to monitor the situation. Well, you were talking about growth

169
00:08:53,640 --> 00:08:56,920
Speaker 1: there in the inflation price growth that we are seeing.

170
00:08:58,040 --> 00:09:00,160
Speaker 1: It seems that every now and then the more get

171
00:09:00,200 --> 00:09:01,760
Speaker 1: all of a sudden has one day and it's a

172
00:09:01,800 --> 00:09:04,560
Speaker 1: reckoning of inflation and oh my god, inflations here it's

173
00:09:04,600 --> 00:09:07,200
Speaker 1: going to be persistent. Sell everything, and then the next

174
00:09:07,280 --> 00:09:09,800
Speaker 1: day everything is fine. Why is it so hard to

175
00:09:09,840 --> 00:09:14,200
Speaker 1: get a handle on that? Yeah, great, great question, Kaylee,

176
00:09:14,280 --> 00:09:16,720
Speaker 1: And we really see what's going on is just that

177
00:09:16,840 --> 00:09:20,360
Speaker 1: concern over the near term outlook being murkier. So if

178
00:09:20,400 --> 00:09:22,920
Speaker 1: you look at the inflation curve, which really measures what

179
00:09:23,000 --> 00:09:25,920
Speaker 1: the expectations are going out over time, what you actually

180
00:09:25,960 --> 00:09:30,320
Speaker 1: see is a relatively unusual situation for history, which is

181
00:09:30,360 --> 00:09:33,440
Speaker 1: that the further out of several years out of inflation

182
00:09:33,520 --> 00:09:36,840
Speaker 1: expectations are actually lower than what they are today. And

183
00:09:36,880 --> 00:09:39,000
Speaker 1: so I think, really what the market is having a

184
00:09:39,000 --> 00:09:41,440
Speaker 1: hard time coming to grips with is just in the

185
00:09:41,520 --> 00:09:44,360
Speaker 1: near term over the next few months and quarters, Really,

186
00:09:44,720 --> 00:09:46,880
Speaker 1: what is that trajectory going to be And are we

187
00:09:46,920 --> 00:09:50,000
Speaker 1: going to continue to see the the higher levels that

188
00:09:50,040 --> 00:09:53,400
Speaker 1: we've experienced over the last few quarters continue on, or

189
00:09:53,440 --> 00:09:56,320
Speaker 1: will we get a more near term resolution you know,

190
00:09:56,360 --> 00:09:58,680
Speaker 1: our base case when we look at our forecast is

191
00:09:58,720 --> 00:10:02,200
Speaker 1: that that inflation rate, while still elevated compared to history,

192
00:10:02,559 --> 00:10:04,959
Speaker 1: will come down over the next few quarters. But again

193
00:10:05,000 --> 00:10:08,360
Speaker 1: a lot of that depends on the ongoing resolution of

194
00:10:08,760 --> 00:10:11,640
Speaker 1: the supply slide constraints as well as what happens with

195
00:10:11,679 --> 00:10:16,680
Speaker 1: the labor market. LISA earnings start in earnest next week

196
00:10:16,720 --> 00:10:19,040
Speaker 1: with the big banks starting. What are you looking for?

197
00:10:19,200 --> 00:10:21,240
Speaker 1: What are you concerned about as we go through this

198
00:10:21,440 --> 00:10:25,719
Speaker 1: third quarter earning season. Well, the cheap issue on our

199
00:10:25,760 --> 00:10:28,960
Speaker 1: mind really is around margins, and certainly there's been a

200
00:10:28,960 --> 00:10:31,840
Speaker 1: lot of talk across the press on the margin issue,

201
00:10:32,320 --> 00:10:35,600
Speaker 1: and over the last few quarters, stretching back for some time,

202
00:10:35,640 --> 00:10:38,760
Speaker 1: there's been talk of peak margins. I think the interesting

203
00:10:38,840 --> 00:10:42,240
Speaker 1: issue has been that despite the fact that everybody's worried

204
00:10:42,280 --> 00:10:46,400
Speaker 1: that the margins have already peaked, companies have continued to

205
00:10:46,440 --> 00:10:49,880
Speaker 1: be able to turn out the numbers and maintain those figures.

206
00:10:50,280 --> 00:10:53,520
Speaker 1: So h third quarter will actually be obviously a really

207
00:10:53,559 --> 00:10:56,959
Speaker 1: interesting time to see how that story is unfolding. Clearly,

208
00:10:57,000 --> 00:10:59,480
Speaker 1: as as you guys just pointed out, we are seeing

209
00:10:59,520 --> 00:11:03,120
Speaker 1: some prior increased pressures and so the question is really

210
00:11:03,120 --> 00:11:06,199
Speaker 1: going to be the ability to pass through those pressures,

211
00:11:06,240 --> 00:11:10,240
Speaker 1: and we've had mixed readings so far from companies in

212
00:11:10,440 --> 00:11:13,559
Speaker 1: recent announcements over the last few weeks, so that is

213
00:11:13,600 --> 00:11:15,360
Speaker 1: really going to be a key issue that we're going

214
00:11:15,400 --> 00:11:17,800
Speaker 1: to be looking at. Also. I think the other the

215
00:11:17,880 --> 00:11:19,960
Speaker 1: second key issue really is going to be the high

216
00:11:20,040 --> 00:11:24,760
Speaker 1: bar of expectations. We've had some nice numbers coming out

217
00:11:24,800 --> 00:11:29,079
Speaker 1: in terms of earnings estimates and sales estimates, but conversely,

218
00:11:29,200 --> 00:11:32,840
Speaker 1: because the expectations are robust, that made me make it

219
00:11:32,880 --> 00:11:36,000
Speaker 1: more difficult for companies to be That being said, we

220
00:11:36,080 --> 00:11:41,720
Speaker 1: are overall still optimistic for what the earning seasons is

221
00:11:41,760 --> 00:11:44,959
Speaker 1: going to look like. We've had again very nice performance

222
00:11:45,040 --> 00:11:47,960
Speaker 1: year to date, and as we track some of those

223
00:11:47,960 --> 00:11:52,280
Speaker 1: companies bottom up, we're seeing continued good momentum and how

224
00:11:52,280 --> 00:11:55,640
Speaker 1: they're managing themselves. So we're hopeful, but we want to

225
00:11:55,679 --> 00:11:58,480
Speaker 1: see how the numbers actually turn out. Yeah, Paul, I

226
00:11:58,520 --> 00:12:01,760
Speaker 1: feel like this is a pretty consistent theme for you know,

227
00:12:01,880 --> 00:12:06,000
Speaker 1: quarter after quarter, expectations are always at the highest do

228
00:12:06,000 --> 00:12:08,079
Speaker 1: you think they could possibly be going into the print,

229
00:12:08,679 --> 00:12:12,520
Speaker 1: and oftentimes they are exceeded. They've been exceeding expectations by

230
00:12:12,559 --> 00:12:15,199
Speaker 1: a pretty sizeable amount in the past, you know, five

231
00:12:15,280 --> 00:12:17,120
Speaker 1: quarters or so. The question is if they can continue

232
00:12:17,120 --> 00:12:18,920
Speaker 1: to do that given some of those price and crushers

233
00:12:18,920 --> 00:12:20,920
Speaker 1: that are out there. Then I saw also very much

234
00:12:20,960 --> 00:12:24,000
Speaker 1: about the forward guidance that these companies were able to provide. Lisa,

235
00:12:24,040 --> 00:12:25,880
Speaker 1: thank you so much for joining us. We really appreciate

236
00:12:26,120 --> 00:12:29,600
Speaker 1: you lending us your time and expertise. Lisa Erickson, Senior

237
00:12:29,679 --> 00:12:32,040
Speaker 1: vice president and co head of the Public Markets Group

238
00:12:32,320 --> 00:12:35,679
Speaker 1: at US Bank. They were billion dollars in assets under

239
00:12:35,720 --> 00:12:39,960
Speaker 1: management based in Minneapolis, getting that good Midwest look of

240
00:12:40,200 --> 00:12:46,000
Speaker 1: the economy and of the markets well during this pandemic

241
00:12:46,000 --> 00:12:48,480
Speaker 1: over the last eighteen months. The work from home option

242
00:12:49,360 --> 00:12:52,679
Speaker 1: has been a godsend for many people, um, but for

243
00:12:52,720 --> 00:12:55,520
Speaker 1: some it's kind of added to the job stresses. If

244
00:12:55,520 --> 00:12:57,920
Speaker 1: you want created some new stresses. Let's get some some

245
00:12:57,960 --> 00:13:01,040
Speaker 1: details here. Rebecca Ray, executive vice president of Human Capital

246
00:13:01,080 --> 00:13:03,440
Speaker 1: for the conference Board, joins us, and we should note

247
00:13:03,440 --> 00:13:07,400
Speaker 1: that the World Mental Health Day is this Sunday, October tent,

248
00:13:07,520 --> 00:13:09,760
Speaker 1: so it's good timing. Rebecca talked to us about some

249
00:13:09,840 --> 00:13:13,920
Speaker 1: of the new I guess work stresses that folks are encountering.

250
00:13:13,960 --> 00:13:16,000
Speaker 1: Here is who go into you know, the eighteen month

251
00:13:16,520 --> 00:13:21,520
Speaker 1: of this pandemic and people been working from home. Sure, thanks, Paul.

252
00:13:22,160 --> 00:13:24,480
Speaker 1: So I'm delighted to share a little bit of the

253
00:13:24,800 --> 00:13:28,680
Speaker 1: survey results. We asked American workers how they were feeling

254
00:13:28,720 --> 00:13:32,360
Speaker 1: about their mental health concerns, and we had about eighteen

255
00:13:32,800 --> 00:13:36,359
Speaker 1: or so come back and tell us that they're very concerned.

256
00:13:37,080 --> 00:13:39,959
Speaker 1: There's nearly eight in ten who are concerned about their

257
00:13:39,960 --> 00:13:43,240
Speaker 1: mental health. You know, we asked this question, uh, six

258
00:13:43,280 --> 00:13:46,040
Speaker 1: months ago and it was and now it came back

259
00:13:46,080 --> 00:13:50,120
Speaker 1: sevent We're just very concerned about two things, in particular,

260
00:13:50,440 --> 00:13:55,360
Speaker 1: the workload which is grown exponentially and blurred boundaries between

261
00:13:55,840 --> 00:13:58,000
Speaker 1: you know, their work lives and their personal lives. And

262
00:13:58,040 --> 00:14:00,800
Speaker 1: what surprised us about this is that that was well

263
00:14:00,880 --> 00:14:04,600
Speaker 1: above the percentages that said they were afraid of exposing

264
00:14:04,679 --> 00:14:08,920
Speaker 1: loved ones to COVID or contracting it themselves. How is

265
00:14:08,960 --> 00:14:13,440
Speaker 1: it different for women and men? Sure? Well, you know,

266
00:14:13,520 --> 00:14:17,560
Speaker 1: women uh did indicate that it was a greater concern

267
00:14:17,720 --> 00:14:22,200
Speaker 1: for them versus men at sight. You know, I think

268
00:14:22,360 --> 00:14:25,320
Speaker 1: all of us have been impacted and right wrong or

269
00:14:25,360 --> 00:14:29,000
Speaker 1: in different I think elder care and childcare still falls

270
00:14:29,080 --> 00:14:33,920
Speaker 1: disproportionately to women, and so if they feel that greater heights.

271
00:14:33,920 --> 00:14:37,000
Speaker 1: It's a combination of those two things that has really

272
00:14:37,000 --> 00:14:39,200
Speaker 1: taken a toll on women in particular, and I think

273
00:14:39,240 --> 00:14:41,880
Speaker 1: that's evidenced by the exodus of many women who have

274
00:14:41,920 --> 00:14:45,840
Speaker 1: had to make some difficult choices and leave the workplace. Rebecca,

275
00:14:45,840 --> 00:14:49,480
Speaker 1: I've heard from and read a lot of news articles

276
00:14:49,480 --> 00:14:53,720
Speaker 1: saying that, you know, people are working more, um, it's

277
00:14:53,720 --> 00:14:56,640
Speaker 1: tough to switch it off, and as a result, kind

278
00:14:56,680 --> 00:15:00,240
Speaker 1: of the burnout factor is higher than ever. What is

279
00:15:00,240 --> 00:15:04,520
Speaker 1: your data show, Yeah, we're seeing the same thing. Burnout

280
00:15:04,520 --> 00:15:07,680
Speaker 1: concerns you skyrocketing. And I think part of this is,

281
00:15:08,000 --> 00:15:11,000
Speaker 1: you know, early on, I think we asked a lot

282
00:15:11,000 --> 00:15:13,800
Speaker 1: of workers, and workers I think for the most part,

283
00:15:13,840 --> 00:15:16,000
Speaker 1: tried to step up so that they didn't let their

284
00:15:16,040 --> 00:15:18,680
Speaker 1: customers down, with their clients, or their or their teammates,

285
00:15:19,160 --> 00:15:21,280
Speaker 1: and and certainly those who are on the front line

286
00:15:21,320 --> 00:15:26,200
Speaker 1: or central workers, there's an additional level of the things

287
00:15:26,200 --> 00:15:28,720
Speaker 1: that we've asked from them. So so I think that

288
00:15:29,120 --> 00:15:31,280
Speaker 1: at the beginning, we were all happy to do what

289
00:15:31,280 --> 00:15:33,320
Speaker 1: it wanted to do it. We were all swinging for

290
00:15:33,400 --> 00:15:35,800
Speaker 1: the fence, and I think we thought that this was

291
00:15:35,840 --> 00:15:38,160
Speaker 1: going to be a sprint, not a marathon. And so

292
00:15:38,240 --> 00:15:41,320
Speaker 1: now we're eighteen nineteen months into this and it has

293
00:15:41,360 --> 00:15:43,680
Speaker 1: become a marathon for many folks, and I think that

294
00:15:43,840 --> 00:15:47,280
Speaker 1: has taken a long toll. We we asked about optimism

295
00:15:47,320 --> 00:15:49,880
Speaker 1: back in April. We've been asking these similar questions for

296
00:15:49,960 --> 00:15:51,880
Speaker 1: some time now, and there was a great deal more

297
00:15:51,920 --> 00:15:55,160
Speaker 1: optimism back in April, more excitement about thinking, you know,

298
00:15:55,320 --> 00:15:57,360
Speaker 1: the vaccines are here, We're going to get back into

299
00:15:57,360 --> 00:15:59,560
Speaker 1: the workplace will be quite the same, but it's the

300
00:15:59,560 --> 00:16:01,960
Speaker 1: next them or whatever that might look like. And then

301
00:16:01,960 --> 00:16:04,560
Speaker 1: we realized that even those plans, you know, had to shift.

302
00:16:04,960 --> 00:16:07,840
Speaker 1: So it you need a light at the end of

303
00:16:07,840 --> 00:16:10,440
Speaker 1: the tunnel. We need people to be optimistic. And that's

304
00:16:10,480 --> 00:16:12,280
Speaker 1: just not what we're seeing in the data because this

305
00:16:12,400 --> 00:16:14,520
Speaker 1: is just dragged down for so long. And maybe that

306
00:16:14,600 --> 00:16:18,680
Speaker 1: helps explain why participation has still remained so low. Even

307
00:16:18,680 --> 00:16:21,800
Speaker 1: though there's ten million job openings in the US, there's

308
00:16:21,800 --> 00:16:24,600
Speaker 1: a real struggle to get them filled. If a company

309
00:16:24,640 --> 00:16:27,800
Speaker 1: is struggling to hire, what, based on the data you've seen,

310
00:16:27,840 --> 00:16:30,600
Speaker 1: do they need to recognize and be offering workers to

311
00:16:30,600 --> 00:16:34,400
Speaker 1: make them feel comfortable. Sure? Well, you know, when we

312
00:16:34,480 --> 00:16:37,840
Speaker 1: asked about the various things that organizations had done to

313
00:16:37,880 --> 00:16:40,760
Speaker 1: support their mental health of their workers, you know, and

314
00:16:41,120 --> 00:16:43,440
Speaker 1: many companies have done some really lovely things and put

315
00:16:43,480 --> 00:16:47,000
Speaker 1: together a panoply of options for employees. But when we

316
00:16:47,040 --> 00:16:49,920
Speaker 1: asked employees what was really helpful, they said most of

317
00:16:49,960 --> 00:16:52,800
Speaker 1: them were either not helpful or slightly helpful at best,

318
00:16:52,840 --> 00:16:54,840
Speaker 1: and that was more than half of them. But here's

319
00:16:54,840 --> 00:16:57,520
Speaker 1: what did work. Those who said that they had the

320
00:16:57,600 --> 00:17:01,400
Speaker 1: option for formal policies that support work life balance and integration,

321
00:17:01,880 --> 00:17:05,400
Speaker 1: they said that those were the most helpful. So I

322
00:17:05,440 --> 00:17:09,560
Speaker 1: think companies need to really think about what the flexibility

323
00:17:09,640 --> 00:17:12,800
Speaker 1: need to look like to attract workers back to the workplace.

324
00:17:13,320 --> 00:17:16,080
Speaker 1: How can work get done where, by whom, on what

325
00:17:16,400 --> 00:17:19,160
Speaker 1: under what circumstances. I think they have to be very

326
00:17:19,200 --> 00:17:22,320
Speaker 1: thoughtful about this. And the concern that I think companies

327
00:17:22,320 --> 00:17:26,119
Speaker 1: should have is that flexibility is the key and the

328
00:17:26,200 --> 00:17:30,040
Speaker 1: path forward, because employees have figured out that they have options,

329
00:17:30,440 --> 00:17:32,760
Speaker 1: and you've got to figure out how you're flexible. But

330
00:17:32,840 --> 00:17:35,359
Speaker 1: also what's the compelling reason for bringing them back to

331
00:17:35,400 --> 00:17:38,080
Speaker 1: the workplace. It can't simply be so that you can sit,

332
00:17:38,200 --> 00:17:41,200
Speaker 1: you know, socially distant and in some cases, some parts

333
00:17:41,200 --> 00:17:43,800
Speaker 1: of the country having to wear masks. You need to

334
00:17:43,800 --> 00:17:46,840
Speaker 1: think about why are we re recruiting our employees to

335
00:17:46,920 --> 00:17:49,560
Speaker 1: come back to the office. Is this going to be

336
00:17:49,720 --> 00:17:51,800
Speaker 1: I mean, how competitive of an issue is this? Are

337
00:17:53,119 --> 00:17:55,520
Speaker 1: employees saying, Hey, I'm not going to go work someplace

338
00:17:56,119 --> 00:17:58,200
Speaker 1: uh where it's mandatory that I come to the office.

339
00:17:59,440 --> 00:18:02,199
Speaker 1: That's right. You are seeing some people make different choices.

340
00:18:02,240 --> 00:18:04,639
Speaker 1: They've had some time now to think about this, and

341
00:18:04,760 --> 00:18:06,960
Speaker 1: for many they have figured out that this level of

342
00:18:07,000 --> 00:18:10,320
Speaker 1: flexibility and the ability to integrate their work and their

343
00:18:10,359 --> 00:18:13,080
Speaker 1: personal lives is where they want to be. We've also

344
00:18:13,119 --> 00:18:15,480
Speaker 1: got some people who are at the tail into the

345
00:18:15,520 --> 00:18:17,919
Speaker 1: boomer generation who are saying, hey, you know what, I

346
00:18:17,920 --> 00:18:20,520
Speaker 1: can do this virtual thing from an RV and Yellowstone Park.

347
00:18:21,000 --> 00:18:23,160
Speaker 1: I can I can screeze this out for another couple

348
00:18:23,160 --> 00:18:25,200
Speaker 1: of years. And then you've got some people who are

349
00:18:25,200 --> 00:18:27,119
Speaker 1: at the apex of their career who are saying, I

350
00:18:27,160 --> 00:18:30,960
Speaker 1: cannot go back into a commuting or a rigid schedule

351
00:18:31,080 --> 00:18:34,200
Speaker 1: for the next X number of years of my working life.

352
00:18:34,280 --> 00:18:37,040
Speaker 1: Just not doing it. Rebecca, fascinating stuff. We appreciate you

353
00:18:37,119 --> 00:18:41,280
Speaker 1: sharing the contents of this survey. Rebecca Ray, Executive vice president,

354
00:18:41,280 --> 00:18:43,760
Speaker 1: of Human Capital for the conference board and Kaylee, we

355
00:18:43,800 --> 00:18:46,040
Speaker 1: thought kind of labor day, post labor Day, folks will

356
00:18:46,080 --> 00:18:48,040
Speaker 1: be coming back, but that's not really the case. Yeah.

357
00:18:48,040 --> 00:18:49,960
Speaker 1: I was supposed to be the great return to the office,

358
00:18:50,000 --> 00:18:52,280
Speaker 1: and it's gotten pushed back and pushed back and push back,

359
00:18:52,320 --> 00:18:54,120
Speaker 1: And now it seems a lot of companies are saying, hey,

360
00:18:54,240 --> 00:18:57,199
Speaker 1: we'll see you in We'll see two. We're seeing some

361
00:18:57,240 --> 00:19:00,000
Speaker 1: better numbers and better trends on the COVID and cases,

362
00:19:00,040 --> 00:19:02,719
Speaker 1: so maybe that will be a catalyst. Well more coming up.

363
00:19:03,119 --> 00:19:09,160
Speaker 1: This is Bloomberg Markets. All right, let's talk the labor

364
00:19:09,160 --> 00:19:11,920
Speaker 1: market here. We had a dp uh some I guess

365
00:19:11,920 --> 00:19:14,000
Speaker 1: the US companies added the most jobs in three months.

366
00:19:14,040 --> 00:19:17,119
Speaker 1: That was a good report. US initial jobs claims this

367
00:19:17,160 --> 00:19:19,520
Speaker 1: morning came in better than expect that. That's good. I

368
00:19:19,600 --> 00:19:22,080
Speaker 1: kind of feel like we're getting set up for a

369
00:19:22,240 --> 00:19:27,040
Speaker 1: good non farm payroll data tomorrow morning. Are we getting

370
00:19:27,040 --> 00:19:28,879
Speaker 1: set up for some disappointment? I don't know, but it

371
00:19:28,880 --> 00:19:31,240
Speaker 1: feels like it should be a decent number. Sarah House,

372
00:19:31,359 --> 00:19:36,040
Speaker 1: senior economists and director for Wells Furgo Security, joins us. Sarah,

373
00:19:36,119 --> 00:19:38,520
Speaker 1: what are your thoughts here? What are you gonna look for?

374
00:19:38,640 --> 00:19:41,040
Speaker 1: Tomorrow because it feels like, you know, the consensus is

375
00:19:41,080 --> 00:19:43,080
Speaker 1: for five thousand. That would be a nice game from

376
00:19:43,080 --> 00:19:47,040
Speaker 1: the prior month. But what are you looking for? All right,

377
00:19:47,080 --> 00:19:49,800
Speaker 1: So we're looking for a rebound as well, so somewhere

378
00:19:50,359 --> 00:19:54,080
Speaker 1: near a consensus at five thirty five thousand. I think

379
00:19:54,240 --> 00:19:56,960
Speaker 1: a big factor in what we're looking for is going

380
00:19:56,960 --> 00:20:00,600
Speaker 1: to be what happens in terms of participations. Are we

381
00:20:00,640 --> 00:20:04,159
Speaker 1: seeing some of those supply constraints on the labor supply

382
00:20:04,359 --> 00:20:07,520
Speaker 1: beginning to ease and is that filtering through to a

383
00:20:07,560 --> 00:20:11,399
Speaker 1: bigger pool of available workers that companies can actually tap

384
00:20:11,400 --> 00:20:15,280
Speaker 1: into and get the overall hiring numbers up. Well, let's

385
00:20:15,320 --> 00:20:18,240
Speaker 1: talk about participation then, because that was supposed to change

386
00:20:18,320 --> 00:20:20,639
Speaker 1: in the month of September. Kids were back at school,

387
00:20:21,080 --> 00:20:23,919
Speaker 1: no more additional unemployment benefits. This was supposed to be

388
00:20:23,920 --> 00:20:28,080
Speaker 1: the month where it a difference was made in that regard.

389
00:20:28,119 --> 00:20:30,920
Speaker 1: Do you really think we're going to see that? Well,

390
00:20:30,920 --> 00:20:33,560
Speaker 1: I think we we are going to see some improvement there. So,

391
00:20:33,640 --> 00:20:36,879
Speaker 1: as you mentioned, we did see some notable constraints at

392
00:20:36,920 --> 00:20:39,320
Speaker 1: least begin to eat. So the fact that schools are

393
00:20:39,320 --> 00:20:42,199
Speaker 1: back in person um that you did see the end

394
00:20:42,240 --> 00:20:45,199
Speaker 1: of unemployment insurance across all states, not just some of

395
00:20:45,200 --> 00:20:48,400
Speaker 1: those those early enders, and so I think that's going

396
00:20:48,480 --> 00:20:50,960
Speaker 1: to push the labor supply in the right direction. But

397
00:20:51,080 --> 00:20:54,600
Speaker 1: let's not kid ourselves that these issues aren't going away overnight.

398
00:20:54,640 --> 00:20:56,639
Speaker 1: So I think, you know, as far as the child

399
00:20:56,680 --> 00:20:58,920
Speaker 1: care issue go, there's still a lot of concerns about

400
00:20:58,960 --> 00:21:01,520
Speaker 1: well our kids going to be in the classroom consistently.

401
00:21:02,160 --> 00:21:05,040
Speaker 1: We have still very limited daycare capacity, which is an

402
00:21:05,040 --> 00:21:07,879
Speaker 1: issue for parents of young children. And then with the

403
00:21:07,960 --> 00:21:11,040
Speaker 1: unemployment insurance, you know, we've we've seen only a pretty

404
00:21:11,040 --> 00:21:13,760
Speaker 1: limited impact in the states that ended early. And I

405
00:21:13,760 --> 00:21:15,600
Speaker 1: think we have to remember that there's a lot of

406
00:21:15,640 --> 00:21:19,600
Speaker 1: frictions that are involved when searching and getting a new job,

407
00:21:19,720 --> 00:21:23,120
Speaker 1: So you have to identify those jobs, apply, interview, get

408
00:21:23,200 --> 00:21:25,840
Speaker 1: on boarded. And so I think this is going to

409
00:21:25,880 --> 00:21:28,639
Speaker 1: be factors that that play out over months, not just

410
00:21:28,680 --> 00:21:31,359
Speaker 1: in September. September is not going to be a silver

411
00:21:31,440 --> 00:21:34,560
Speaker 1: bullet just because we turned the calendar. Sarah talked to

412
00:21:34,600 --> 00:21:38,120
Speaker 1: us about wage inflation. You know, there's definitely inflation concerns

413
00:21:38,160 --> 00:21:40,520
Speaker 1: in this marketplace, in this economy. Um, when you look

414
00:21:40,520 --> 00:21:43,680
Speaker 1: at commodities and oil for example, but you know, a

415
00:21:43,720 --> 00:21:45,680
Speaker 1: lot of folks say, hey, you're really not going to

416
00:21:45,720 --> 00:21:49,960
Speaker 1: have problem, problematic or worse in inflation unless you get

417
00:21:50,040 --> 00:21:53,040
Speaker 1: meaningful wage inflation, and we haven't really seen that. How

418
00:21:53,080 --> 00:21:56,600
Speaker 1: are you thinking about wage inflation as we reopen, Well,

419
00:21:56,600 --> 00:21:59,040
Speaker 1: I think we have seen some some pretty market increase

420
00:21:59,160 --> 00:22:02,919
Speaker 1: in in way. Just so, yes, the headline average early earning,

421
00:22:02,960 --> 00:22:06,360
Speaker 1: the number has been distorted by some of the compositional effects.

422
00:22:06,440 --> 00:22:09,639
Speaker 1: But actually, when you think about hiring over over the

423
00:22:09,640 --> 00:22:13,600
Speaker 1: past year, so the fact that hiring in Lesion hospitality

424
00:22:13,720 --> 00:22:16,720
Speaker 1: is up twelve percent UM compared to much more modest king.

425
00:22:16,840 --> 00:22:19,080
Speaker 1: More broadly, that's your lowest pay industry. The fact that

426
00:22:19,119 --> 00:22:22,040
Speaker 1: we're still seeing wages up four point three percent over

427
00:22:22,040 --> 00:22:24,440
Speaker 1: the past year, I think does speak to the fact

428
00:22:24,480 --> 00:22:27,399
Speaker 1: that employers are opponying up for for those workers. And

429
00:22:27,480 --> 00:22:29,760
Speaker 1: this really marks a big change from what we've seen

430
00:22:29,760 --> 00:22:32,840
Speaker 1: in the past cycle, where companies were just loath to

431
00:22:33,240 --> 00:22:36,679
Speaker 1: raise pay. And yet we've seen um small businesses right

432
00:22:36,680 --> 00:22:40,280
Speaker 1: now reporting the most number of small businesses are reporting

433
00:22:40,359 --> 00:22:44,000
Speaker 1: increasing pay than at any time we've seen in history,

434
00:22:44,040 --> 00:22:46,399
Speaker 1: and so I think this really does set up the

435
00:22:46,480 --> 00:22:50,920
Speaker 1: chance that in inflation does remain perhaps more persistent than

436
00:22:51,240 --> 00:22:54,440
Speaker 1: a lot of folks are are expecting UM just based

437
00:22:54,440 --> 00:22:56,600
Speaker 1: on looking at what's happening in the good sector on

438
00:22:56,640 --> 00:22:59,440
Speaker 1: the on the supply chain side. Well, and of course

439
00:22:59,480 --> 00:23:01,400
Speaker 1: the FED is king at that inflation, but it's also

440
00:23:01,400 --> 00:23:04,240
Speaker 1: looking at the labor market and looking for improvement. And

441
00:23:04,320 --> 00:23:06,800
Speaker 1: Jerome Pale said at his press conference last month, I

442
00:23:06,840 --> 00:23:08,879
Speaker 1: want to see a decent report. I will leave the

443
00:23:08,920 --> 00:23:11,679
Speaker 1: definition of decent up up to you, you're the economists.

444
00:23:11,720 --> 00:23:16,000
Speaker 1: But does it basically mean unless something catastrophic happens with

445
00:23:16,000 --> 00:23:20,280
Speaker 1: the print tomorrow, a November taper is baked in. I

446
00:23:20,600 --> 00:23:23,320
Speaker 1: think the chance of a November taper is exceptionally good

447
00:23:23,359 --> 00:23:26,240
Speaker 1: at this point. I think the bar for tomorrow's payrol report,

448
00:23:26,440 --> 00:23:29,840
Speaker 1: as far as the Fed is concerned, is pretty low.

449
00:23:30,000 --> 00:23:32,440
Speaker 1: So you know, probably somewhere you would only need a

450
00:23:32,560 --> 00:23:35,280
Speaker 1: ball park of three fifty thousand. Even then, it might

451
00:23:35,320 --> 00:23:37,840
Speaker 1: depend on if we we see some movement in terms

452
00:23:37,840 --> 00:23:41,359
Speaker 1: of participation, if we continue to see ongoing wage pressures

453
00:23:41,359 --> 00:23:45,480
Speaker 1: that UM that raised that inflation risk even even further out.

454
00:23:45,960 --> 00:23:48,640
Speaker 1: And so I think when when we factor in UM,

455
00:23:49,200 --> 00:23:52,080
Speaker 1: chances of what the Fed might do, this is really

456
00:23:52,119 --> 00:23:55,600
Speaker 1: the last obstacle to overcome. So I think an unsaid

457
00:23:55,720 --> 00:23:58,359
Speaker 1: risk was they were waiting to see what happened in

458
00:23:58,440 --> 00:24:00,840
Speaker 1: terms of does the government actually shut down in October?

459
00:24:00,960 --> 00:24:03,520
Speaker 1: What happens with the debt feeling? Well, there's more breathing

460
00:24:03,600 --> 00:24:05,480
Speaker 1: room on that. So I think it's really going to

461
00:24:05,560 --> 00:24:08,520
Speaker 1: come down to what happens with the jobs report tomorrow.

462
00:24:08,560 --> 00:24:11,439
Speaker 1: As far as that November taper announcement, Yes, sir, you

463
00:24:11,440 --> 00:24:13,480
Speaker 1: mentioned the you know, the temporary raising the debt ceiling,

464
00:24:13,560 --> 00:24:16,399
Speaker 1: but it's just kicking a can down the road. How

465
00:24:16,480 --> 00:24:18,720
Speaker 1: much does all this uncertain yet of Washington as it

466
00:24:18,760 --> 00:24:22,000
Speaker 1: relates to fiscal stimulus and spending plans and taxation. How

467
00:24:22,000 --> 00:24:26,160
Speaker 1: does that factor into your outlook? So it certainly raises

468
00:24:26,440 --> 00:24:29,600
Speaker 1: raises the risks surrounding the outlook. But I think just

469
00:24:29,720 --> 00:24:31,879
Speaker 1: even the fact that they punted a little bit to

470
00:24:31,920 --> 00:24:34,680
Speaker 1: give themselves more time illustrates that, you know, particularly when

471
00:24:34,680 --> 00:24:37,000
Speaker 1: it comes to the debt feeling. I think they will

472
00:24:37,040 --> 00:24:39,639
Speaker 1: eventually do the right thing. We've seen this before, and

473
00:24:39,720 --> 00:24:42,840
Speaker 1: so um I think while there's certainly some risk there,

474
00:24:42,920 --> 00:24:45,720
Speaker 1: I think our basicline expectation is still that this will

475
00:24:45,760 --> 00:24:49,440
Speaker 1: get worked out and that we shouldn't see detrimental effects

476
00:24:49,520 --> 00:24:53,879
Speaker 1: feed through in terms of the broad the product economy. Sarah,

477
00:24:53,880 --> 00:24:57,119
Speaker 1: thanks so much for joining us. Really appreciate UH discussing

478
00:24:57,440 --> 00:25:00,520
Speaker 1: jobs reporting and kind of the economic outlook. Sarah House,

479
00:25:00,640 --> 00:25:04,600
Speaker 1: director and senior economists for Wells Fargo Corporate and Investment Bank.

480
00:25:04,600 --> 00:25:07,480
Speaker 1: And again the job's number. Looking at the Bloomberg terminal here,

481
00:25:07,480 --> 00:25:11,400
Speaker 1: the consensus is for five hundred thousand UH jobs. That's

482
00:25:11,520 --> 00:25:14,720
Speaker 1: up markedly from the prior month when two five thousand

483
00:25:14,840 --> 00:25:18,600
Speaker 1: jobs were added. So again, folks looking for some improvements,

484
00:25:18,600 --> 00:25:22,119
Speaker 1: some consistent improvement in the job picture tomorrow. Thanks for

485
00:25:22,160 --> 00:25:25,679
Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and

486
00:25:25,720 --> 00:25:29,760
Speaker 1: listen to interviews with Apple Podcasts or whatever podcast platform

487
00:25:29,800 --> 00:25:33,120
Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt

488
00:25:33,160 --> 00:25:37,520
Speaker 1: Miller three on Ball Sweeney, I'm on Twitter at pt Sweeney.

489
00:25:37,560 --> 00:25:40,239
Speaker 1: Before the podcast, you can always catch us worldwide at

490
00:25:40,240 --> 00:25:41,280
Speaker 1: Bloomberg Radio