Speaker 1: This is Bloomberg business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebec from Bloomberg Radio.
Speaker 1: It's twenty four hours from now. We will be well
Speaker 1: into the press conference with the Chair of the Federal
Speaker 1: Reserve J. Powell following the FOMC second Monetary Policy of
Speaker 1: the year. It's a meeting that a few weeks ago
Speaker 1: was still all about the Fed on a mission to
Speaker 1: bring down inflation and perhaps be more aggressive to do so.
Speaker 1: Then the collapse of three banks in the US, then
Speaker 1: ubs buying credit suites, and then we had investors pricing
Speaker 1: in rate cuts later in the year, although that seems
Speaker 1: to be tempering back as well. So let's try and
Speaker 1: make some sense out of this environment. Back with us
Speaker 1: is doctor Steve Skanky, chief Economic advisor over at kill Point,
Speaker 1: former US Treasuring and White House National Security Council staff member.
Speaker 1: He's based in Washington, joining us today via zoom from
Speaker 1: Cape Canaveral, Florida. Are you looking to the skies, Steve,
Speaker 1: for inspiration about what the Fed may or may not
Speaker 1: tell us tomorrow it's going to be tricky for J Powell. Well,
Speaker 1: you know, Carol there, you're absolutely right about that. But
Speaker 1: what are the amazing things down here? Is there are
Speaker 1: rocket launches several times a month, and there's there's something
Speaker 1: absolutely amazing about seeing those go up, define gravity, beautiful plume,
Speaker 1: and away they go out of sight and it is inspiring.
Speaker 1: And I wonder if if the f o MC members
Speaker 1: are maybe doing that too, is it a reminder that
Speaker 1: life goes on and there's a bigger world beyond us.
Speaker 1: I'm getting all crazy, but I guess my point is
Speaker 1: when the FED looks at its mission, you know it's
Speaker 1: got you know, it's looking at the labor market more importantly,
Speaker 1: it's looking at inflation that is still a persistent problem.
Speaker 1: And then it's looking at the last week and a half.
Speaker 1: We're two weeks ago, two and a half weeks ago,
Speaker 1: we weren't talking about a bank crisis, and yet we
Speaker 1: have over the last week and a half. What do
Speaker 1: you think the FED needs to be focusing on in
Speaker 1: its decision tomorrow. Well, the FED is primarily focused on
Speaker 1: getting inflation under control without without bringing anything else. While
Speaker 1: I think they shouldn't have been surprised by what happened
Speaker 1: with some of the banks and the fragility of you know,
Speaker 1: a couple hundred others that have massive holdings of longer
Speaker 1: dated treasuries. I think it did catch them a little
Speaker 1: bit by surprise. Generally, the Fed doesn't think of its
Speaker 1: monetary policy tools that is, raising a lower interest rates,
Speaker 1: increased in reducing the money supply as having as being
Speaker 1: a tool that they use to assure the stability and
Speaker 1: health of the banking system. But of course it does
Speaker 1: has an impact that it does have an impact, and
Speaker 1: when we saw what happened with the two banks that
Speaker 1: went out, and then of course the continuing issues with
Speaker 1: Credit Swiss, but it was they were very effective, I believe,
Speaker 1: in putting together a package that said wait a minute,
Speaker 1: we were certainly paid attention to the banking community. All
Speaker 1: these other tools that will help address the particular problems
Speaker 1: that we've seen with the two banks that they closed
Speaker 1: and with the other ones that were lined up at
Speaker 1: their discount window. And Steve. We did hear from Treasury
Speaker 1: Secretary Janet Yellen earlier in her talking about how the
Speaker 1: government could backstop more deposits if necessary to stop containing
Speaker 1: And you're talking about these tools and we're looking at
Speaker 1: the market reaction that's obviously helping things. But is this
Speaker 1: enough for what we're seeing right now? Does there need
Speaker 1: to be more? Well, it's it's certainly enough until it
Speaker 1: doesn't work. But at the moment, and it's very fortunate
Speaker 1: that the Treasury Secretary Janet Yellen is a former FED
Speaker 1: share as well and has a pretty good understanding about
Speaker 1: the stability issues within the system and how those can
Speaker 1: become problematic. But just the fact that we saw borrowings
Speaker 1: at the discount window last week week reach your record
Speaker 1: of one hundred and fifty three billion dollars, the highest
Speaker 1: that it was during the Great Financial Crisis was what
Speaker 1: was not even that one hundred and forty three billion
Speaker 1: in new loans guaranteed by the FED, and there emergency
Speaker 1: loans also jumped by three hundred billion. I think they've
Speaker 1: demonised The point is they've demonstrated that they can back
Speaker 1: the truck up and send the money out to assure
Speaker 1: the public that they can get their deposits when they
Speaker 1: want to get them, and that what might otherwise happen
Speaker 1: with longer data treasuries and their balance sheet that they
Speaker 1: would otherwise have to sell at a loss. They're not
Speaker 1: gonna have to do that because of the tools they
Speaker 1: announced previously ten days ago. And I think that is
Speaker 1: that is bringing competence. I mean, just with what we've
Speaker 1: seen with banking stocks and particularly small to midsized regional
Speaker 1: banking stock, Great US are bouncing back up again. So
Speaker 1: I want to make sure I understand, Steve, so have
Speaker 1: things calmed down? Is the system working enough in terms
Speaker 1: of backstopping and making sure the global financial system is
Speaker 1: secure that the FED can should raise rates tomorrow because
Speaker 1: they've got to continue to bring down inflation, because we
Speaker 1: know statistics still show us that it's a problem inflation.
Speaker 1: It's a big problem, and it disproportionately affects lower income groups,
Speaker 1: and the FED is particularly sensitive that. And as we've
Speaker 1: just watched a room, Powell through his first and now
Speaker 1: second term is shair. He pays a lot of attention
Speaker 1: to disadvantage labor groups and the public generally. You know
Speaker 1: a couple of times at his press conference during his
Speaker 1: announcement he's speaking over the head of the media and
Speaker 1: straight to main street. So he cares a lot about that,
Speaker 1: and so they are paying a lot of attention to that,
Speaker 1: and getting inflation under control is what of his primary concerns,
Speaker 1: not just because it's a mandate of the Federal Reserve,
Speaker 1: sees the detrimental impact it has on so many families,
Speaker 1: and so he does want to ring that out. And
Speaker 1: if they're confident right now they seem to be that
Speaker 1: the tools to backstop the banking system are in place
Speaker 1: and working, I think he's going to continue to march ahead.
Speaker 1: Having said that, if he's talking to main Street as well, Steve,
Speaker 1: I mean this whole idea that if the Fed does
Speaker 1: rates rates and this banking problem is maybe deeper than
Speaker 1: we know at this juncture, then everybody on Main Street
Speaker 1: it's going to be impacted in a big way ultimately
Speaker 1: as things slow down, as we maybe then go into
Speaker 1: a deeper recession. So hence the quandary for the Federal
Speaker 1: Reserve kind of damned if you do, damned if you don't.
Speaker 1: So you think at this point, based on how things
Speaker 1: and markets are operating, the Fed can confidently go ahead
Speaker 1: with a quarter point hike. I believe that they can,
Speaker 1: and I believe that they will. What will be really
Speaker 1: interesting is what their summary of economic projections show. You know,
Speaker 1: a data is due out at this meeting, and you
Speaker 1: know the Soll dot plot that we that we pay
Speaker 1: attention to but don't always pay too close attention to,
Speaker 1: is is going to give us an indication as to
Speaker 1: where they think rates are going after this. There's a
Speaker 1: strong belief that that they'll raise a quarter point now
Speaker 1: and maybe another quarter point at their next meeting, and
Speaker 1: then they're going to pause. And if you look at
Speaker 1: FED fun futures, there's still a belief although it's it's
Speaker 1: declining that will right cuts at the end of the year,
Speaker 1: which was clearly not the case after Powell's congressional testimony
Speaker 1: now two weeks ago, Steve, we do know that tighter
Speaker 1: financial conditions obviously are a principal objective for the Fed's
Speaker 1: efforts to combat in fleation. How much do you think
Speaker 1: these banking issues well actually tighten financial conditions. I think significantly.
Speaker 1: We'd already seen just from the beginning of the year
Speaker 1: banks shoring up their balance sheets, tightening up their lending standards,
Speaker 1: and with what we've seen right now, while they're holdings
Speaker 1: of government securities or backstop their loans, that could create
Speaker 1: problems for them are not, And so I think that
Speaker 1: we're going to see a tightening of liquidity as a
Speaker 1: result of this and as a result of what's going
Speaker 1: on in the banking system, which is what the FED
Speaker 1: would like to have. You know, they've been very frustrated
Speaker 1: that with all that they've done with quantitative tightening and
Speaker 1: raising interest rates, that the financial system has still had
Speaker 1: plenty of liquidity. This will be a change for that,
Speaker 1: and it does play into what they like to see happen.
Speaker 1: It does mean they're going to have to watch it
Speaker 1: more close. Yeah, that we don't get another surprise. Okay, Well,
Speaker 1: it feels like we are always living with the expectation
Speaker 1: of surprises. M Steve. Great to check in with you.
Speaker 1: Doctor Steve Skanky, chief Economic advisor of at keel Point,
Speaker 1: joining us via zoom from Cape Canaveral, Florida. He's a
Speaker 1: former US Treasury and White House National Security Council staff member.
Speaker 1: Weighing in on that FED decision tomorrow. You're listening to
Speaker 1: the Bloomberg Business Week podcast. Catch us live weekday afternoons
Speaker 1: from three to six Eastern Listen on Bloomberg dot com,
Speaker 1: the Ihard Radio app and the Bloomberg Business app or
Speaker 1: watch us live on YouTube together. All right, everybody, so
Speaker 1: keeping up watching that GameStop results in the after hours
Speaker 1: certainly rallying. But as we just talked about, more than
Speaker 1: just a one quarter story. We're waiting for Nike to
Speaker 1: come out in the meantime. One of the things that
Speaker 1: has been on our radar, and that is what's going
Speaker 1: on between Russia and China. Specifically Russian President Vladimir Putin
Speaker 1: meeting with Chinese President Jijimping, who has been in Russia
Speaker 1: for three days of meetings, two days so far under way.
Speaker 1: They've talked about the war in Ukraine, maybe an ending,
Speaker 1: maybe peace. A lot of things going on. Meantime. You've
Speaker 1: got President Biden set to unveil tight restrictions on new
Speaker 1: operations in China by semiconductor makers that get federal funds
Speaker 1: to build in the United States. So a lot going
Speaker 1: on back with us. Is Tiff Roberts. He's senior Fellow
Speaker 1: at the Atlantic Council's Indo Pacific Security Initiatives. He's former
Speaker 1: Bloomberg Business Week China Bureau chief, author of The Myth
Speaker 1: of Chinese Capitalism, The Work of the Factory and the
Speaker 1: future of the world. Joining us once again from Montana, Tiff.
Speaker 1: Nice to be with you again, g and Putin. Should
Speaker 1: the world be worried? I yes, nice to be back, Carol,
Speaker 1: But yes, I do think the world should be China
Speaker 1: has been selling this ongoing visit by Shijimping to Moscow
Speaker 1: and the meetings Putin as a mission of peace and
Speaker 1: talking about their twelve point plan to try to bring
Speaker 1: peace in Ukraine. But I think that's really a bit
Speaker 1: of propaganda. If you look at, for example, the commentary
Speaker 1: that Shijimping published in Russian media. Putin also did a
Speaker 1: commentary in Chinese media right on the eve of the visit.
Speaker 1: Jim Ping talks about how the two countries Russian China
Speaker 1: are united in opposition to hegemony, domination and bullying. I
Speaker 1: think it's really about showing their mutual opposition to a
Speaker 1: US led world order. And something that really struck me
Speaker 1: is just when it comes to these chip makers that
Speaker 1: obviously have that exposure toward China, what do you think
Speaker 1: from a broad sense, a big picture sense, do you
Speaker 1: think this means for corporate American especially these semiconductor type
Speaker 1: companies that aren't going to benefit from this, well, I
Speaker 1: think it's not good news for corporate America. The already
Speaker 1: multiple problems, very real problems in the US China relationships
Speaker 1: have been putting pressure on corporate America. And you mentioned semiconductors.
Speaker 1: The US is in the midst of an a radical
Speaker 1: rethinking of its semiconductor relationship with China, and as as
Speaker 1: I think Carol mentioned in the introduction, there's new restrictions
Speaker 1: coming almost every week on US companies, US persons being
Speaker 1: associated in any way with the Chinese semiconductor industry. Well,
Speaker 1: it's a big market for the US on the semiconductor side,
Speaker 1: and obviously more broadly, so this is not good news.
Speaker 1: One more source of very real tension between the US
Speaker 1: and China. This budding relations ships growing stronger and stronger
Speaker 1: between Russian and China, one more reason to one more
Speaker 1: place where there's really bad news for the US corporate
Speaker 1: relationship with China. Are we at the point of no
Speaker 1: return where China and President Gees specifically have turned its
Speaker 1: back on the United States. I think we can't say
Speaker 1: we're at the point of no return, but I would
Speaker 1: note that last week or during the two sessions the
Speaker 1: annual Legislatives meetings held in Beijing. Shijingping actually singled out
Speaker 1: the US by name, which he doesn't usually do, and
Speaker 1: said that they were leading a block of world nations
Speaker 1: that were trying to contain and suppress China and bringing
Speaker 1: severe challenges to China's development. That's a big deal. Shijing
Speaker 1: Ping usually when he's referring to the US will say
Speaker 1: something like certain countries or hostile foreign forces. But I
Speaker 1: think the fact that he meant in the US at
Speaker 1: this point by name shows just how bad the relationship
Speaker 1: is getting. All Right, tiff for at risk of sounding
Speaker 1: really stupid, but I'm okay with that. I mean, is
Speaker 1: China desperate? I don't think China feels desperate at this point.
Speaker 1: I think that what they're doing is, first of all,
Speaker 1: they're going to do their best to try to continue
Speaker 1: to woo American corporates to China. The spokesman for the
Speaker 1: Ministry of Commerce during the same legislative meetings basically sent
Speaker 1: out the message we're open for business, we want you,
Speaker 1: we want you back now that we're lifting we've lifted
Speaker 1: the restrictions from the pandemic, So they want corporate America.
Speaker 1: But they're going to try to sort of divide and conquer.
Speaker 1: They realize that the relationship with Washington is in very
Speaker 1: dire strait. At the same time, they're trying to woo
Speaker 1: Europe and it's obviously not easy when they've cited to
Speaker 1: the degree to which they have with Poutin in the
Speaker 1: invasion of Ukraine. And you were talking about the strained
Speaker 1: relationship China does have with Washington. What do you think
Speaker 1: the long game is here for China? What is the
Speaker 1: sort of motivation to all of this? I do think
Speaker 1: and I am concerned that China is deciding that the
Speaker 1: two sides are implacably opposed to each other and that
Speaker 1: they're the room for actual cooperation is narrowing. So UM,
Speaker 1: I hope that's not the case, but I do feel
Speaker 1: I do get that feeling that this is increasingly how
Speaker 1: Beijing seals I think, as I said, they're they're certainly
Speaker 1: not going to close the door to American companies, They're
Speaker 1: certainly not going to close the door to the European Union.
Speaker 1: Um they if the US, If the US were to
Speaker 1: move a little closer to what China thinks is a
Speaker 1: proper bilateral relationship, I bet Beijing would be willing to
Speaker 1: more than willing to talk with Washington, but I do
Speaker 1: think that the trend lines are pretty bad. You know,
Speaker 1: you talk about closing doors, and it's interesting. There's another
Speaker 1: story in the Bloomberg Tiff today about Vanguard planning to
Speaker 1: shutter its business in China. This is after they've been
Speaker 1: I guess, a retreat two years ago. This accordin to
Speaker 1: folks familiar with the matter. But you know, in our
Speaker 1: story it says the moves will market complete exit from
Speaker 1: China for the seven point one trillion dollars giant, which
Speaker 1: one saw significant potential in the world's second largest economy.
Speaker 1: I've said it a million times before because I think
Speaker 1: about at the beginning of my career, any company I
Speaker 1: talked to, it was as China was real, you know,
Speaker 1: was opening its doors and kind of almost begging multinationals
Speaker 1: from around the world to come in set up shot,
Speaker 1: you know, kind of teach us what you know. And
Speaker 1: it's it's only you know, a few decades ago that
Speaker 1: I feel like things have changed dramatically. So it's pretty significant.
Speaker 1: The shift, I think it really is significant. We're seeing
Speaker 1: hedge funds pulling out. Came in early after the pandemic
Speaker 1: restrictions were lifted, and then they were they started getting out.
Speaker 1: We see surveys by the American Chamber of Commerce that
Speaker 1: are showing that for the first time, China is not
Speaker 1: even a top three investment choice for American companies. You're
Speaker 1: seeing companies, American companies say that they are very they
Speaker 1: feel very little optimism about the China market going forward.
Speaker 1: And yeah, we're seeing some big prominent examples like Vanguard.
Speaker 1: It sounds like that are thinking of actually moving on
Speaker 1: somewhere else. So I do think there's been a real shift.
Speaker 1: China's trying to China doesn't want to see that happen,
Speaker 1: as I said a moment ago, so they're trying to
Speaker 1: They're trying to make put out this message of we're
Speaker 1: open to the world. I'll come back investors. But things
Speaker 1: aren't looking very good on that front. Hey, hold on
Speaker 1: for a second. Tip. Just want to mention. Nike results
Speaker 1: are out. Third quarter revenue. It's big beat, twelve point
Speaker 1: three nine billion. The estimate was for eleven point fifty
Speaker 1: two billion. Speaking of China, an important market for the company.
Speaker 1: A third quarter greater China revenue one point ninety nine billion.
Speaker 1: That's a little bit light. The street was looking for
Speaker 1: two point zero three billion, but the company is saying
Speaker 1: it made quote tremendous progress on inventory, and we're seeing
Speaker 1: shares of Nike up about four percent in the aftermarket. Hey, Tiff,
Speaker 1: just got about thirty seconds. Last time you were on,
Speaker 1: I asked if you were writing a new book. You
Speaker 1: said you were heading in that direction. The title you
Speaker 1: offered up maybe China isn't going to take over the world.
Speaker 1: Would that still be the title? And just got about
Speaker 1: thirty seconds. Absolutely, I see tremendous structural challenges facing China. Demography,
Speaker 1: growing inequality, and above all this politicization from the top
Speaker 1: leadership and ching himself. That makes it much less likely
Speaker 1: it's going to be the economic superpower many of us
Speaker 1: thought it was going to be. All right, Well, always
Speaker 1: appreciate when you can join us to talk about this subject.
Speaker 1: Tiff Roberts he senior fellow at the Atlantic Council's Into
Speaker 1: Pacific Security Initiatives, former Blueberg Business Week China bureau chief.
Speaker 1: He knows a lot about this, the myth of Chinese capitalism,
Speaker 1: that's the book he wrote just a couple of years ago.
Speaker 1: But as I like to kill him, sounds like he
Speaker 1: is getting ready to write another book. Nike third quarter
Speaker 1: EPs IT two is a beat seventy nine cents versus
Speaker 1: fifty four. Stock is up three point three percent in
Speaker 1: the after hours. This is Bloomberg Business Week. You're listening
Speaker 1: to the Bloomberg Business Week podcast. Catch us live weekday
Speaker 1: afternoons from three to six Eastern on Bloomberg Radio, the
Speaker 1: Bloomberg Business app, and YouTube. You can also listen live
Speaker 1: on Amazon Alexa from our flagship New York station, Just
Speaker 1: Say Alexa play Bloomberg eleven thirty. As we get ready
Speaker 1: for the next FED meeting, we continue to talk to
Speaker 1: individuals that might give us an insight into what's going
Speaker 1: on with consumers and just the business landscape, what is
Speaker 1: going on when it comes to it spending, and I
Speaker 1: do feel like our next guest plays into both of
Speaker 1: these worlds big time. With This is Maju Kua Villa.
Speaker 1: He is CEO of Bolt It's a checkout in e
Speaker 1: commerce platform company. He's former VP and general manager for
Speaker 1: Amazon's Global Logistics. Was at Amazon and part of the
Speaker 1: team that built out Amazon Primed. He's joining us here
Speaker 1: in our Bloomberg Interactive Broker Studio. So nice to have
Speaker 1: you here with justin myself. How are you and let's
Speaker 1: start big broad How would you describe the business environment
Speaker 1: right now? Well, I mean there's a lot going on.
Speaker 1: That would be an understatement, but we are very excited
Speaker 1: about what we see for the future and for retailers,
Speaker 1: for example, we look at three things. Number one, really
Speaker 1: focus on the consumer because there's a lot of changing
Speaker 1: for the consumer right now, helping to figure out how
Speaker 1: can we really focus on the consumer. Number two, so
Speaker 1: much happening on from a technology perspective. We were nobody
Speaker 1: was talking about generati ai last year. Now that's top
Speaker 1: of mind for everybody, and that's just one thing. So
Speaker 1: many happening in the technology, so how can we innovate
Speaker 1: fast and move fast? And number three, e commerce is
Speaker 1: still fifteen percent of the overall commerce. How can we
Speaker 1: get from fifteen to fifty? And that is actually in
Speaker 1: the hands of some of the big retailers, So we
Speaker 1: are excited about working on all three and helping the
Speaker 1: industry on that. Speaking though, to the environment, are you
Speaker 1: finding that you have more customers the growth in your
Speaker 1: business like they're coming to you like, is there growth
Speaker 1: that tells you the economic outlook, the economic environment maybe
Speaker 1: not so bad, the market environment not so bad. As
Speaker 1: we continue to talk about recession, no recession, soft landing, landing,
Speaker 1: all these different scenarios. Carol, That's interesting because for us,
Speaker 1: the product what we are providing, which is helping retailers
Speaker 1: with one of their number one problems, that's conversion a checkout.
Speaker 1: You know, around seventy percent of shoppers drop off right
Speaker 1: at the point of checkout. I do that a lot. Yeah,
Speaker 1: and on mobile that is eighty five percent because it's
Speaker 1: difficult or what are you see something? You're excited, You
Speaker 1: get all the way to check out, and then you
Speaker 1: are ready to buy. You have to fill in all
Speaker 1: these fields on every single side. Then you have to
Speaker 1: walk and get your walk, all the credit card typing,
Speaker 1: all that information, so many steps. So how can we
Speaker 1: remove all those frictions? And what if you have found
Speaker 1: is with Bold, we can remove pretty much all of
Speaker 1: those steps and make it a one click buying experience.
Speaker 1: And when we do that see around fifty percent increase
Speaker 1: in conversion versus someone who have to type in all
Speaker 1: that that problem. I have to suggest it makes me
Speaker 1: feel like, wait, maybe they're storing information somewhere. I wonder
Speaker 1: what you're thinking. How we thought about that as well too,
Speaker 1: because I'm definitely guilty of that, especially at certain price points.
Speaker 1: Sometimes I debate whether or not I want something. But
Speaker 1: I was curious as far as specifically, how exactly do
Speaker 1: you compete in that type of market? How do you
Speaker 1: compete in that way? Yeah, So think about from a
Speaker 1: consumer perspective. You are trying to buy something on a
Speaker 1: merchant site, and we give the opportunity for them to
Speaker 1: save that information right on the network. And now when
Speaker 1: they go to any other merchant site who are on
Speaker 1: the Bold network trying to buy something, we look up
Speaker 1: and see if they have or on the network, and
Speaker 1: if they are on the network, we pull up all
Speaker 1: the information and give them a faster experience to buy.
Speaker 1: And that what we do, though, is very unique in
Speaker 1: the sense that we do that in a very marching
Speaker 1: friendly way. Our magic sit behind the scenes. We empower
Speaker 1: march and we empower merchant to directly connect with the
Speaker 1: consumer without adding a friction of ourselves in the middle.
Speaker 1: So help me out here, because if I buy something
Speaker 1: through Apple Pay, I just say Apple pay and they
Speaker 1: have all my information. If I do something a PayPal,
Speaker 1: same thing. So how is what you're doing is different?
Speaker 1: What we support all of the above what you just mentioned.
Speaker 1: But I remember what you just said, Carol, you said
Speaker 1: Apple pay and PayPal. What what we are trying to
Speaker 1: do is empower the merchant, so people remember the merchant's name. Okay,
Speaker 1: they can provide that feature themselves, empower them. Like when
Speaker 1: you go to Amazon buy some right, you don't remember
Speaker 1: Apple pay or paper. You remember Amazon. Yeah, and Amazon
Speaker 1: remembers me. And turns out, you know, like you mentioned before,
Speaker 1: I worked at Amazon helped them with that growth and
Speaker 1: part of some of making those functionalities ready for everybody,
Speaker 1: and Amazon landers a long time, that is still no
Speaker 1: true for almost every other merchant. Interesting, what we are
Speaker 1: doing is bringing that functionality in a very decent alized
Speaker 1: way for everyone else. So all merchants and consumers can
Speaker 1: be on this network and empower they're buying experience everywhere.
Speaker 1: Wells And I was kind of hinting before though, then
Speaker 1: the security of that information is crucial because if you
Speaker 1: are doing that then ultimately for a lot of different retailers,
Speaker 1: So how do you make sure ensure that that information
Speaker 1: is protected? Well, you are absolutely right, we obsess about it.
Speaker 1: I mean, one of the good things about us is
Speaker 1: we built from the ground up for security and privacy. Yeah,
Speaker 1: and we go through every rigorous testing and certification that's
Speaker 1: available so we can meet and beat the bar for anybody.
Speaker 1: And the level of complexity and sophistication we have, we
Speaker 1: are able to get very large, multi billion dollar merchants
Speaker 1: like Fanatics, Revolve, you know, like even big brands like
Speaker 1: cass were. A lot of the big brands trust us
Speaker 1: to provide help them with one of the most important
Speaker 1: functions that is check out and help save and store
Speaker 1: that information for them. And we only have about a
Speaker 1: minute left. But I knew you're a private company. It's
Speaker 1: been a tough time for many private startups that have
Speaker 1: been struggling to raise money. What has it been like
Speaker 1: for you in this environment. I mean, we have been
Speaker 1: reacting very fast since the beginning of the changes, and
Speaker 1: I had to make several tough decisions so that we
Speaker 1: can be where we are. And what we are seeing
Speaker 1: now is we're looking forward, very excited about the new
Speaker 1: customers we are able to bring in, Like some of
Speaker 1: the we moved up to larger enterprises and you're seeing
Speaker 1: is our product is now more relevant than ever before,
Speaker 1: right because everyone is trying to convert, everyone is trying
Speaker 1: to get more customers, and we are able to bring
Speaker 1: them in. And you know, we were fortunate enough to
Speaker 1: raise a bunch of money and we are really strong
Speaker 1: and a good place. I'd be remissed not to ask
Speaker 1: you just at thirty seconds. You're in San Francisco. Has
Speaker 1: there been any chilling effect of the collapse of Silicon
Speaker 1: Valley Bank just quickly, not for us, and you had
Speaker 1: no exposure. We have no exposure to that, but you
Speaker 1: haven't seen any impact in terms of innovation or impact
Speaker 1: on the valley, And everybody's stepping back a little bit. Well,
Speaker 1: everyone is thinking about what it means, and I'm sure
Speaker 1: there's going to be some ruple effect or longer term,
Speaker 1: we have to wait and see how it unfolds. Yeah,
Speaker 1: that certainly feels like the environment as we continue to
Speaker 1: see how it plays out. Thank you so much. Come back.
Speaker 1: We'd love to hear certainly as you continue to grow
Speaker 1: your business and things to impact the retail world. Great
Speaker 1: to have with us. Maju Kua Villa. He's CEO Bolt,
Speaker 1: former VP and general manager for Amazon's global logistics. As
Speaker 1: we said here in our Bloomberg Interactive Studio, you're listening
Speaker 1: to the Bloomberg Business Week podcast. Catch us live weekday
Speaker 1: afternoons from three to six East on Bloomberg Radio, the
Speaker 1: Bloomberg Business App and YouTube. You can also listen live
Speaker 1: on Amazon Alexa from our flagship New York station. Just
Speaker 1: say Alexa play Bloomberg eleven thirty. I'm broommacae a journal.
Speaker 1: Now about you? Let me drive? Oh no, no, no no no,
Speaker 1: who's going to judge? Home? Honey? Please I'll do the
Speaker 1: riding rebels. I want to drive. It's good question. This
Speaker 1: is the drive to the closet. Count music. Well, Brian
Speaker 1: jogging down on Bloomberg Radio. All right, everybody, about seventeen
Speaker 1: minutes left in today's trading session. Shortly roll head of
Speaker 1: to our TV colleagues to talk about the market clothes.
Speaker 1: Having said that we are seeing in these last sixteen
Speaker 1: seventeen minutes of trading some buying into the clothes. The
Speaker 1: equity averages pretty much at their best levels of the session.
Speaker 1: So as you heard from Charlie rep about one point
Speaker 1: seven percent on the nastac up, about one and a
Speaker 1: third percent on the S and P. And you know,
Speaker 1: we got a FED decision tomorrow, but investors, they seem
Speaker 1: to be a lot more happier with risk today. I know,
Speaker 1: it seems like a Carol And I'm excited about our
Speaker 1: next guest, Gino Bolvin, president of bolven Wolf Management Group,
Speaker 1: who's here to speak with us and Gina, I have
Speaker 1: to ask you the million dollar question. What are you
Speaker 1: expecting to hear from the FED tomorrow and how are
Speaker 1: you specifically positioning for this? Yeah, what do I expect
Speaker 1: or what do I think they should do? I mean
Speaker 1: two different questions, but I'll give you two different answers
Speaker 1: for that. Let's just take a look at we were
Speaker 1: just two weeks ago. Right, just two weeks ago, we
Speaker 1: were questioning and debating if the FED should do fifty
Speaker 1: or twenty five bases points. Now we're discussing if they
Speaker 1: should raise rates at all. So things are changing very quickly.
Speaker 1: The market has built in about an eighty percent probability
Speaker 1: of a twenty five basis point hike, and the market's
Speaker 1: excited because it's closer to the end of these interest
Speaker 1: rate hikes. And basically that's what I think the FED
Speaker 1: is going to do. The market is giving power permission
Speaker 1: to increase hikes, and I think because the market's up,
Speaker 1: that's what they're going to do. I also want to
Speaker 1: talk about, you know, what happened with the ECB and
Speaker 1: Christine Lagarde, and she raised the rates by fifty basis points.
Speaker 1: However she offered she talked about she had a very
Speaker 1: dovish tone, and she gave strong guidance that they would
Speaker 1: do whatever is necessary to show up financial stability. And
Speaker 1: I think that's what the market is expecting from Powell.
Speaker 1: Perhaps he raises rates tomorrow, but he gives some type
Speaker 1: of devish guidance, and that will probably be the first time.
Speaker 1: Let's see what he says. You know, I don't think
Speaker 1: he should hike though, and I wanted to get more
Speaker 1: specific your take because we're seeing this rebound in financial
Speaker 1: shares bank shares again today. Does this create an opportunity
Speaker 1: for investors? How are you exactly positioning for this? So?
Speaker 1: I think it does. I think the high quality big banks,
Speaker 1: I think that they're going to do better and they
Speaker 1: are the beneficiaries of the problems at the regional banks
Speaker 1: are having. I think that if you stick with quality,
Speaker 1: you'll be Okay, it might be, it might be a
Speaker 1: little bit early. That's not one of our top sectors
Speaker 1: for this year, so you would you wouldn't be on
Speaker 1: the dips. And forgive me Gina for breaking in, but
Speaker 1: regional banks are up six percent today after being hammered
Speaker 1: as you know, over the last week or so. True,
Speaker 1: the KBW Bank index is up as well, But you
Speaker 1: wouldn't be committing money, or did you or advising your
Speaker 1: clients to put money into the banks as they were
Speaker 1: getting beaten up over the last week or so. We
Speaker 1: haven't done that. But as part of our asset allocation,
Speaker 1: we have a value tilt and that does include some
Speaker 1: of the larger financials which we've always owned, but we
Speaker 1: haven't stepped into the regional banks. And what would make
Speaker 1: you change your thought process around the regional banks as
Speaker 1: far as do they need to see valuations drop further
Speaker 1: or is it an area you just don't want to
Speaker 1: have any exposure or whatsoever during this time because of
Speaker 1: everything going on. Well right now, we're more focused on
Speaker 1: different parts, you know, like we like technology, we like
Speaker 1: information information tech, and we stepped into that earlier in
Speaker 1: the year because we thought as came closer to the
Speaker 1: end of the rate hikes that technology would do well.
Speaker 1: It's it's doing extremely well, better than we thought. Also
Speaker 1: because of some of the companies and technology that I
Speaker 1: have in layoffs. It's bad for our individuals getting laid off,
Speaker 1: but it's good for the balance sheets and the profits
Speaker 1: of some of the big tech information technology. We've all
Speaker 1: decided it's a terrible name for an industry because it
Speaker 1: tells you nothing. What do you mean by information technology?
Speaker 1: What specifically? It is up about sixteen and a half
Speaker 1: percent so far this year, but what names in particular?
Speaker 1: And I know last week we were talking about the
Speaker 1: rally we saw on Microsoft, there's some names that just
Speaker 1: have been on a tear So what specifically within that
Speaker 1: infotech umbrella would have you been pretty much? And that's
Speaker 1: a great question. This is not a recommendation, but stocks
Speaker 1: in information technology would be like the Fang stocks. It
Speaker 1: would be like Microsoft, and it would be like Apple.
Speaker 1: So those are the types of stocks that would be
Speaker 1: included in that sector. But you know, we're also balancing
Speaker 1: that with some value stocks. We like healthcare, we like
Speaker 1: medical devices, and big farmer. You know, it's an aging
Speaker 1: demographic and we see some value in healthcare, so we
Speaker 1: think that's an important sector. Industrials like aerospace and defense.
Speaker 1: As our defense budgets are expanding, those stocks should do well.
Speaker 1: So it's China reopens, they should also do well. Do
Speaker 1: you know? We only have about a minute left, But
Speaker 1: I want to know specifically what are clients asking, what
Speaker 1: are they what are the biggest concern right now? You know,
Speaker 1: clients are really asking how we're heading into a recession
Speaker 1: and is this a recession like two thousand and eight.
Speaker 1: It's been a long time since we've had a recession.
Speaker 1: And our answer is that we don't think that we're
Speaker 1: heading into a recession, but if we do, it's going
Speaker 1: to be mild. One of the reasons is that the
Speaker 1: consumer is still strong. Yeah, unemployment unemployments really low. But
Speaker 1: also you know, if we do head into a recession,
Speaker 1: this is the most telegraphed recession in history. That's true,
Speaker 1: so everyone's prepared for it. It's a really good point.
Speaker 1: But I will say that you know who knows. I mean,
Speaker 1: I like last weekend half has reminded us of that.
Speaker 1: We can be surprised. As you've seen within the banking
Speaker 1: sector break to catch up with you though. Gina Bolbage's
Speaker 1: president at the financial advisory firm Bolden Wealth Management, joining
Speaker 1: us via zoom from Boston. This is the Bloomberg Business
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