1 00:00:00,840 --> 00:00:02,560 Speaker 1: Welcome to the Bloomberg Markets Podcast. 2 00:00:02,720 --> 00:00:05,880 Speaker 2: I'm Paul Sweeney alongside my co host Matt Miller. Every 3 00:00:05,920 --> 00:00:09,600 Speaker 2: business day we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:14,400 Speaker 2: and Bloomberg experts, along with essential market moving news. Find 5 00:00:14,400 --> 00:00:17,439 Speaker 2: the Bloomberg Markets podcast called Apple Podcasts or wherever you 6 00:00:17,520 --> 00:00:21,720 Speaker 2: listen to podcasts, and at Bloomberg dot com slash podcast small. 7 00:00:21,800 --> 00:00:24,919 Speaker 1: Let's get back to the macrofront, because this payroll report 8 00:00:25,040 --> 00:00:27,880 Speaker 1: really is It's like, it's good news, right if you're 9 00:00:27,920 --> 00:00:31,440 Speaker 1: an employed American, Right, if you're Chairman Powell, you're probably 10 00:00:31,480 --> 00:00:34,760 Speaker 1: having kind of a breakdown in Washington somewhere. You are 11 00:00:34,760 --> 00:00:37,640 Speaker 1: seeing futures higher off this. I'm surprised we're not seeing 12 00:00:37,640 --> 00:00:39,360 Speaker 1: more of a dent. But just to sum it up, 13 00:00:39,360 --> 00:00:43,920 Speaker 1: three hundred and thirty nine thousand new jobs reported last month. 14 00:00:43,960 --> 00:00:45,800 Speaker 1: The estimate was about one hundred and ninety five thousand 15 00:00:46,120 --> 00:00:47,640 Speaker 1: according to the Bloomberg Terminal. 16 00:00:47,680 --> 00:00:51,319 Speaker 3: But that coupled with an unemployment rate which rose by 17 00:00:51,360 --> 00:00:55,560 Speaker 3: its biggest one month increase since April twenty twenty three 18 00:00:55,640 --> 00:00:58,480 Speaker 3: point seven percent. Now, is that people coming back in 19 00:00:58,480 --> 00:00:59,240 Speaker 3: the job market? 20 00:00:59,520 --> 00:01:03,160 Speaker 4: Where is that? You know? Is that? Does it a 21 00:01:03,160 --> 00:01:05,039 Speaker 4: broader sign of enthusiam people coming back. 22 00:01:06,520 --> 00:01:09,720 Speaker 3: Yeah, but you know, we'll discuss this and plenty more 23 00:01:10,240 --> 00:01:11,640 Speaker 3: with Tom Lacel. 24 00:01:12,760 --> 00:01:17,240 Speaker 4: He joins us. Sorry, Tom Gimbal, excuse me from the network. 25 00:01:18,240 --> 00:01:19,720 Speaker 4: I've been called worse Friday morning. 26 00:01:19,920 --> 00:01:20,160 Speaker 5: Yeah. 27 00:01:20,200 --> 00:01:21,400 Speaker 4: I appreciate your joining us. 28 00:01:21,440 --> 00:01:23,680 Speaker 6: That's good to be with you, guys. I'm a nerd too, 29 00:01:23,760 --> 00:01:25,399 Speaker 6: by the way, if we can get I want to 30 00:01:25,400 --> 00:01:26,399 Speaker 6: be to the nerd party. 31 00:01:26,760 --> 00:01:27,160 Speaker 7: Welcome. 32 00:01:27,959 --> 00:01:28,160 Speaker 4: Yeah. 33 00:01:28,200 --> 00:01:30,000 Speaker 3: So talk me through some of what you were seeing 34 00:01:30,240 --> 00:01:34,200 Speaker 3: from this job report, what you're seeing from trends and 35 00:01:34,240 --> 00:01:38,039 Speaker 3: staffing and recruiting across the country, and does it dovetail 36 00:01:38,120 --> 00:01:39,880 Speaker 3: with this positive numbers that we've seen today. 37 00:01:39,959 --> 00:01:43,039 Speaker 6: I mean, first and foremost, the news today was fantastic, 38 00:01:43,319 --> 00:01:47,640 Speaker 6: and any anybody painting it as anything other than fantastic, 39 00:01:47,680 --> 00:01:50,480 Speaker 6: in my opinion, is crazy. I think what we've got 40 00:01:50,560 --> 00:01:53,480 Speaker 6: now is that people don't talk about is versus two 41 00:01:53,520 --> 00:01:56,200 Speaker 6: thousand and nine or even two thousand and one, is 42 00:01:56,200 --> 00:02:00,320 Speaker 6: that there's more companies that exist to start art up 43 00:02:00,320 --> 00:02:03,640 Speaker 6: space is easier, there's more venture money on the sidelines, 44 00:02:04,000 --> 00:02:06,200 Speaker 6: so there's more companies for people to go work at 45 00:02:06,200 --> 00:02:08,400 Speaker 6: when they get laid off from big tech. So we 46 00:02:08,440 --> 00:02:10,920 Speaker 6: saw and we have these gig economies. I mean my theory, 47 00:02:10,960 --> 00:02:12,480 Speaker 6: which hasn't I haven't had a chance to prove it 48 00:02:12,520 --> 00:02:16,000 Speaker 6: out yet. But is that unemployment rose when we had 49 00:02:16,120 --> 00:02:21,200 Speaker 6: added over three hundred thousand jobs because the gig workers 50 00:02:21,200 --> 00:02:23,360 Speaker 6: were going back to work, right, So you had the 51 00:02:23,440 --> 00:02:26,800 Speaker 6: unemployment rise because more people were filing from being laid 52 00:02:26,800 --> 00:02:29,000 Speaker 6: off from big tech, but you had more people re 53 00:02:29,160 --> 00:02:32,239 Speaker 6: entering the workforce from the gig economy. The dog walkers 54 00:02:32,240 --> 00:02:33,400 Speaker 6: are going back to work, guys. 55 00:02:33,520 --> 00:02:36,639 Speaker 1: So if I had to hypothetically big emphasis and hypothetically 56 00:02:36,760 --> 00:02:39,960 Speaker 1: go find a new job, how hard would would that 57 00:02:40,000 --> 00:02:41,959 Speaker 1: really be? Or would I be kind of scooped up? 58 00:02:42,840 --> 00:02:45,400 Speaker 1: Broadly speaking? When we're looking just how tight this labor 59 00:02:45,400 --> 00:02:45,799 Speaker 1: market is. 60 00:02:45,880 --> 00:02:46,680 Speaker 7: Is this still. 61 00:02:47,919 --> 00:02:49,440 Speaker 1: A job lookers market? 62 00:02:49,840 --> 00:02:51,880 Speaker 6: I think it's I think the playing field has been even. 63 00:02:52,200 --> 00:02:56,240 Speaker 6: I think what would happen eighteen months ago is you 64 00:02:56,240 --> 00:02:58,919 Speaker 6: would have gotten a forty thousand dollars increase, right or 65 00:02:58,919 --> 00:03:01,560 Speaker 6: a thirty percent increase or whatever the numbers were today. 66 00:03:01,840 --> 00:03:04,600 Speaker 6: You'd go and maybe you get a bump if you know, 67 00:03:04,440 --> 00:03:06,600 Speaker 6: you've got a great resume and what have you. But 68 00:03:07,000 --> 00:03:09,920 Speaker 6: there's still a standpoint where companies are hiring people and 69 00:03:10,000 --> 00:03:11,160 Speaker 6: great people are in demand. 70 00:03:12,320 --> 00:03:15,440 Speaker 4: Where are you seeing most of the. 71 00:03:14,880 --> 00:03:16,919 Speaker 3: Strength you know, one of some of the things that 72 00:03:17,000 --> 00:03:20,720 Speaker 3: came through today, big boost and construction, employment, leisure and hospitality. 73 00:03:20,720 --> 00:03:23,480 Speaker 3: Those still significantly below pre pandemic levels. 74 00:03:24,040 --> 00:03:24,919 Speaker 4: Are we going. 75 00:03:24,720 --> 00:03:28,800 Speaker 3: Back to a to a pre pandemic sort of environment 76 00:03:29,880 --> 00:03:31,760 Speaker 3: in terms of the sectors that need people. 77 00:03:32,040 --> 00:03:36,600 Speaker 6: Yeah, My opinion is that the effect of the pandemic 78 00:03:36,760 --> 00:03:40,160 Speaker 6: is really behind us. And I'd love to say that 79 00:03:40,200 --> 00:03:42,440 Speaker 6: a year from now, no one will even talk about it. 80 00:03:42,720 --> 00:03:45,040 Speaker 6: But whenever there's bad news, people want something to blame. 81 00:03:45,720 --> 00:03:50,320 Speaker 6: And where we're at right now is healthcare continues to grow. 82 00:03:50,360 --> 00:03:53,560 Speaker 6: You're right about the service economy and hospitality. We haven't 83 00:03:53,560 --> 00:03:55,760 Speaker 6: seen that yet. I believe in the summer months we'll 84 00:03:55,760 --> 00:03:58,360 Speaker 6: get that bump with summer travel coming out of the 85 00:03:58,360 --> 00:04:01,800 Speaker 6: Memorial Day holiday, which always tends to happen. It continues 86 00:04:01,840 --> 00:04:04,560 Speaker 6: to be I mean, when you have the security breaches 87 00:04:04,600 --> 00:04:07,680 Speaker 6: to continue to have, it is not going anywhere. Accounting 88 00:04:07,720 --> 00:04:11,440 Speaker 6: and finance continues to be extremely hot of hiring, which 89 00:04:11,480 --> 00:04:14,640 Speaker 6: means companies are doing back office work, which means M 90 00:04:14,680 --> 00:04:16,520 Speaker 6: and A is continuing to be there because there's money 91 00:04:16,520 --> 00:04:18,560 Speaker 6: on the sidelines and it might not be IPOs, it 92 00:04:18,640 --> 00:04:20,400 Speaker 6: might be more companies going private, as we're seeing the 93 00:04:20,600 --> 00:04:23,120 Speaker 6: smallest amount of IPOs that we've had in years. 94 00:04:23,480 --> 00:04:23,760 Speaker 8: Right. 95 00:04:23,839 --> 00:04:25,880 Speaker 1: Well, one of the pieces of this report, which kind 96 00:04:25,920 --> 00:04:27,359 Speaker 1: of made it a little bit of a mixed report 97 00:04:27,400 --> 00:04:31,080 Speaker 1: and not just kind of polarized, was that there were 98 00:04:31,120 --> 00:04:33,320 Speaker 1: pieces of the support that suggested maybe not all is 99 00:04:33,400 --> 00:04:36,200 Speaker 1: great in the labor market, like productivity, for example, being 100 00:04:36,240 --> 00:04:40,320 Speaker 1: substantially lower. How do you measure that though, and how 101 00:04:40,360 --> 00:04:43,359 Speaker 1: can you really say, Look, you're starting to see a 102 00:04:43,400 --> 00:04:46,160 Speaker 1: trend here where things like work from home or benefits, 103 00:04:46,240 --> 00:04:47,799 Speaker 1: or the idea that it is a very tight labor 104 00:04:47,800 --> 00:04:51,400 Speaker 1: market isn't perhaps having a bigger read through into the 105 00:04:51,400 --> 00:04:52,080 Speaker 1: broader economy. 106 00:04:52,160 --> 00:04:54,279 Speaker 6: Yeah, I think the productivity measurements, you know, put five 107 00:04:54,279 --> 00:04:57,000 Speaker 6: economists in a room and get five different answers. I 108 00:04:57,080 --> 00:04:59,080 Speaker 6: just think that that's not where we want to go. 109 00:04:59,279 --> 00:05:01,120 Speaker 6: I think what we've seen is is that in the 110 00:05:01,160 --> 00:05:03,600 Speaker 6: second half of twenty twenty and in twenty twenty one, 111 00:05:03,640 --> 00:05:06,960 Speaker 6: productivity from remote work and homework was great because people 112 00:05:06,960 --> 00:05:09,599 Speaker 6: couldn't leave their houses. There was no travel, there was 113 00:05:09,600 --> 00:05:12,840 Speaker 6: no going to restaurants, you couldn't do those things. And 114 00:05:12,880 --> 00:05:15,919 Speaker 6: today you can do whatever you want in productivity drops. 115 00:05:16,040 --> 00:05:18,440 Speaker 6: And now we're seeing that the smartest people in the 116 00:05:18,480 --> 00:05:21,000 Speaker 6: room big tech, they over hired. They didn't know, they 117 00:05:21,040 --> 00:05:23,839 Speaker 6: didn't know what they were doing. And now we're on 118 00:05:23,880 --> 00:05:27,080 Speaker 6: an even playing field and we're seeing that companies are 119 00:05:27,120 --> 00:05:29,640 Speaker 6: laying people off. They're saying get back in the office, 120 00:05:29,880 --> 00:05:32,480 Speaker 6: and and why are they because they're not seeing the 121 00:05:32,480 --> 00:05:33,600 Speaker 6: growth that they want to have. 122 00:05:33,760 --> 00:05:36,000 Speaker 1: Well, let's go back there to the big tech story. 123 00:05:36,040 --> 00:05:38,520 Speaker 1: I feel like in retrospect it's this bay like, oh wow, 124 00:05:38,680 --> 00:05:41,239 Speaker 1: the Apples and the Microsoft, they made this wrong call. 125 00:05:41,560 --> 00:05:43,360 Speaker 1: But here we are talking. 126 00:05:43,040 --> 00:05:46,360 Speaker 7: About them doing this big, massive. 127 00:05:45,960 --> 00:05:49,040 Speaker 1: Investment things like AI and the cloud and in stem 128 00:05:49,320 --> 00:05:52,159 Speaker 1: and not really laying off workers in the way that 129 00:05:52,360 --> 00:05:54,400 Speaker 1: say Gold miss Axis for example, or third round of 130 00:05:54,480 --> 00:05:57,919 Speaker 1: layoffs or some of the industrial names are talk to 131 00:05:57,960 --> 00:06:01,440 Speaker 1: us about the sustainability of war tech right now. 132 00:06:01,560 --> 00:06:03,400 Speaker 6: Yeah, So I think there's a couple of things. Number one, 133 00:06:03,720 --> 00:06:05,760 Speaker 6: and touching on the AI thing that you were talking 134 00:06:05,800 --> 00:06:08,280 Speaker 6: about before I came on, is that AI today is 135 00:06:08,320 --> 00:06:12,040 Speaker 6: what e commerce was twenty years ago. Okay, right, so 136 00:06:12,279 --> 00:06:13,960 Speaker 6: you know that the whole we've all heard the pets 137 00:06:14,000 --> 00:06:16,960 Speaker 6: dot com thing. Eight thousand times, right. But that's what 138 00:06:16,960 --> 00:06:19,240 Speaker 6: we're talking about right now, is that if brick and 139 00:06:19,279 --> 00:06:22,239 Speaker 6: mortar companies would have gotten on the e commerce train 140 00:06:22,560 --> 00:06:24,919 Speaker 6: right off the bat, a lot of e commerce companies 141 00:06:24,920 --> 00:06:27,280 Speaker 6: wouldn't have. If Walmart died e commerce as fast as 142 00:06:27,279 --> 00:06:31,080 Speaker 6: Amazon did, Amazon probably wouldn't be Amazon today, right. And 143 00:06:31,080 --> 00:06:33,120 Speaker 6: that's what's going to happen with AI, except people get 144 00:06:33,120 --> 00:06:35,320 Speaker 6: it now every company is going to be using AI. 145 00:06:35,440 --> 00:06:37,239 Speaker 6: So the playing field is basically going to be even. 146 00:06:37,680 --> 00:06:37,960 Speaker 9: Right. 147 00:06:38,080 --> 00:06:39,880 Speaker 1: Is there even the labor to support that? 148 00:06:39,920 --> 00:06:40,240 Speaker 7: Though? 149 00:06:40,560 --> 00:06:42,760 Speaker 6: Well, there's Now we're going to go into a whole 150 00:06:42,760 --> 00:06:44,320 Speaker 6: nother thing that I know you guys probably don't want 151 00:06:44,320 --> 00:06:46,080 Speaker 6: to talk about with me, But that's the immigration problem 152 00:06:46,080 --> 00:06:49,200 Speaker 6: that we have. Right. The problem with technology hiring is 153 00:06:49,240 --> 00:06:51,960 Speaker 6: we're educating really, really right people and we're sending them 154 00:06:51,960 --> 00:06:54,120 Speaker 6: back to where they're from instead of allowing them to 155 00:06:54,120 --> 00:06:56,159 Speaker 6: stay into the work. And the layman on the street 156 00:06:56,160 --> 00:06:59,160 Speaker 6: things that immigration is people coming from Mexico and Central America, 157 00:06:59,400 --> 00:07:01,520 Speaker 6: and that is one an aspect of the labor problem 158 00:07:01,520 --> 00:07:03,360 Speaker 6: on the blue collar standpoint for the most part. 159 00:07:03,560 --> 00:07:05,799 Speaker 3: Sure, And I guess you know you talk to food 160 00:07:05,839 --> 00:07:09,240 Speaker 3: service companies and they say they're chronically understaffed. 161 00:07:09,440 --> 00:07:12,400 Speaker 4: It's very hard for them to find, you know. So 162 00:07:12,440 --> 00:07:13,960 Speaker 4: one of the things that the FED is looking. 163 00:07:13,840 --> 00:07:15,800 Speaker 3: At is a year and forecast of four and a 164 00:07:15,840 --> 00:07:19,920 Speaker 3: half percent employment. We're up to three point seven percent today, 165 00:07:19,960 --> 00:07:21,679 Speaker 3: but that's still a pretty wide gap. 166 00:07:21,760 --> 00:07:25,600 Speaker 6: We're not going to hit four and a half this year. Okay, really, yeah, 167 00:07:25,600 --> 00:07:27,360 Speaker 6: we won't hit four and a half this year. I 168 00:07:27,360 --> 00:07:31,200 Speaker 6: think that. I just believe that number one, per my 169 00:07:31,280 --> 00:07:35,440 Speaker 6: earlier comment that there's more companies. So if Salesforce or 170 00:07:35,480 --> 00:07:39,040 Speaker 6: Golden Mien or whomever lays off every company, this isn't 171 00:07:39,160 --> 00:07:42,920 Speaker 6: nineteen seventy five, right, where if a company, if General 172 00:07:42,960 --> 00:07:45,880 Speaker 6: Motors lays off, no one's going to hire those people. Right. 173 00:07:46,240 --> 00:07:51,280 Speaker 6: If Salesforce lays people off, General Motors would hire them. Right. 174 00:07:51,480 --> 00:07:55,240 Speaker 6: Everybody goes cross industry now and the world's flat, and 175 00:07:55,320 --> 00:07:57,720 Speaker 6: industries are flat, and now people don't If you're in 176 00:07:57,760 --> 00:07:59,280 Speaker 6: the car business, you don't have to stay in the 177 00:07:59,280 --> 00:08:01,000 Speaker 6: car business. If you're in big tech, you don't have 178 00:08:01,000 --> 00:08:03,040 Speaker 6: to stay in big tech. So there's a lot more 179 00:08:03,080 --> 00:08:06,840 Speaker 6: transferable skills, and companies will start if you've got extra cash, 180 00:08:07,040 --> 00:08:09,760 Speaker 6: you'll start a new division with talent that you have. 181 00:08:10,080 --> 00:08:12,160 Speaker 6: We have more of an entrepreneurial spirit and people to 182 00:08:12,240 --> 00:08:15,040 Speaker 6: do that, So I think that unemployment will come close 183 00:08:15,080 --> 00:08:15,640 Speaker 6: to four and a half. 184 00:08:15,880 --> 00:08:16,480 Speaker 7: Yeah. 185 00:08:16,520 --> 00:08:19,160 Speaker 1: Well, Tom Gimble, CEO at Lasal Network. 186 00:08:20,280 --> 00:08:24,160 Speaker 8: You're listening to the Team Ken's live program Bloomberg Markets 187 00:08:24,160 --> 00:08:27,240 Speaker 8: weekdays at ten am Eastern on Bloomberg dot com, the 188 00:08:27,360 --> 00:08:30,480 Speaker 8: iHeartRadio app and the Bloomberg Business App, or listen on 189 00:08:30,560 --> 00:08:32,520 Speaker 8: demand wherever you get your podcasts. 190 00:08:34,840 --> 00:08:37,640 Speaker 1: Let's talk about the macro though here, because I think 191 00:08:37,720 --> 00:08:41,720 Speaker 1: still the shocker of the day is this perils report 192 00:08:41,720 --> 00:08:45,000 Speaker 1: three hundred and thirty nine thousand, when that's SMATE of 193 00:08:45,040 --> 00:08:47,960 Speaker 1: just one hundred and ninety five thousand, and I think 194 00:08:48,000 --> 00:08:50,760 Speaker 1: it's a surprise to everyone both on Wall Street and 195 00:08:51,280 --> 00:08:54,280 Speaker 1: Main Street as well. We even arguing in Washington, let's 196 00:08:54,320 --> 00:08:57,560 Speaker 1: bring a true expert here. Amy Glazier, Senior VP of 197 00:08:57,600 --> 00:09:02,480 Speaker 1: Business Operations over at a Deco. She boasts two decades 198 00:09:02,520 --> 00:09:06,560 Speaker 1: of experience and things like staffing management, business operations, so 199 00:09:06,600 --> 00:09:08,319 Speaker 1: she really is the expert to kind of talk about 200 00:09:08,360 --> 00:09:10,320 Speaker 1: what is going on. 201 00:09:09,720 --> 00:09:10,440 Speaker 7: On the ground. 202 00:09:10,679 --> 00:09:14,200 Speaker 1: Amy, how does this work exactly? We keep waiting for 203 00:09:14,240 --> 00:09:17,440 Speaker 1: this momentum out of the labor market to kind of slow, 204 00:09:17,679 --> 00:09:20,160 Speaker 1: if not dissipate completely, and it just seems to be 205 00:09:20,160 --> 00:09:20,960 Speaker 1: getting stronger. 206 00:09:21,120 --> 00:09:22,280 Speaker 7: How does that work on the ground. 207 00:09:23,320 --> 00:09:25,400 Speaker 9: Yeah, I think the word of today happens to be 208 00:09:25,480 --> 00:09:28,120 Speaker 9: resiliency as it comes to the labor market. You know, 209 00:09:28,200 --> 00:09:32,520 Speaker 9: this is the fourteenth straight month of job creation really 210 00:09:32,559 --> 00:09:36,160 Speaker 9: beating expectations. And although we see a lot and hear 211 00:09:36,160 --> 00:09:38,600 Speaker 9: a lot about fears of alumining recession and a lot 212 00:09:38,640 --> 00:09:41,600 Speaker 9: of negativity, at the end of the day, there's still 213 00:09:41,720 --> 00:09:45,560 Speaker 9: almost two open jobs for every single job seeker. And 214 00:09:45,600 --> 00:09:47,520 Speaker 9: it's something my team and I see on the ground 215 00:09:47,720 --> 00:09:51,360 Speaker 9: every single day. Emplawyers are still fighting for top talent, 216 00:09:51,440 --> 00:09:55,400 Speaker 9: They're still trying to get creative, they're being more flexible, 217 00:09:55,720 --> 00:09:59,240 Speaker 9: and really the data speaks to what I think a 218 00:09:59,320 --> 00:10:02,200 Speaker 9: lot of hiring managers are seeing in their day to 219 00:10:02,240 --> 00:10:02,760 Speaker 9: day world. 220 00:10:04,280 --> 00:10:04,559 Speaker 4: Amy. 221 00:10:04,600 --> 00:10:09,000 Speaker 3: Where are you seeing the most strength? What sectors are 222 00:10:09,120 --> 00:10:10,160 Speaker 3: leading this charge? 223 00:10:11,080 --> 00:10:14,319 Speaker 9: So it's interesting you have to go almost region by region, 224 00:10:14,559 --> 00:10:18,520 Speaker 9: industry by industry. We continue to see leisure and hospitality 225 00:10:19,080 --> 00:10:23,200 Speaker 9: are hot. We've seen a lot of business services, healthcare 226 00:10:23,240 --> 00:10:27,680 Speaker 9: always in demand. An interesting thing to notice that, you know, 227 00:10:27,720 --> 00:10:29,760 Speaker 9: we just wrapped up the main jobs report. We're heading 228 00:10:29,800 --> 00:10:33,960 Speaker 9: into June, and I'm already talking to our seasonal hires 229 00:10:34,440 --> 00:10:37,560 Speaker 9: about quarter four. So we're used to talking about Christmas 230 00:10:37,559 --> 00:10:40,720 Speaker 9: in July, and we're pretty much talking about Christmas in 231 00:10:40,800 --> 00:10:44,560 Speaker 9: May in June right now. So I think employers are 232 00:10:44,679 --> 00:10:49,480 Speaker 9: forward looking based on the lack of availability of talent 233 00:10:49,720 --> 00:10:52,800 Speaker 9: in the market. So we continue to see those shifts 234 00:10:52,840 --> 00:10:55,240 Speaker 9: based on a lot of different nuances. 235 00:10:55,480 --> 00:10:57,760 Speaker 3: You know, that's interesting because one of the things that 236 00:10:58,200 --> 00:11:00,800 Speaker 3: came out in this jobs report was that leisure and 237 00:11:00,840 --> 00:11:06,560 Speaker 3: hospitality are still significantly below pre pandemic levels. Does the 238 00:11:06,760 --> 00:11:10,560 Speaker 3: enthusiasm you're hearing from executives, from hiring managers at the 239 00:11:10,600 --> 00:11:13,679 Speaker 3: moment suggest that will change anytime soon. 240 00:11:15,000 --> 00:11:17,520 Speaker 9: I think they just have such a faraway to go, 241 00:11:17,600 --> 00:11:20,640 Speaker 9: and the gap was so wide in their def sit 242 00:11:20,800 --> 00:11:23,600 Speaker 9: it's taking them longer to crawl out of it than 243 00:11:23,600 --> 00:11:26,880 Speaker 9: they expected. So we continue to see momentum. We continue 244 00:11:26,880 --> 00:11:29,960 Speaker 9: to see the hospitality and leisure sector try and do 245 00:11:30,040 --> 00:11:33,640 Speaker 9: everything they can to really attract those workers and not 246 00:11:33,679 --> 00:11:36,920 Speaker 9: only attract them, but also retain them. You know, not 247 00:11:37,040 --> 00:11:40,240 Speaker 9: only in hospitality, but specifically in manufacturing and some of 248 00:11:40,240 --> 00:11:44,280 Speaker 9: our other employers. We're seeing this huge trend on bringing 249 00:11:44,320 --> 00:11:47,320 Speaker 9: back retirees. And the great thing about that is we're 250 00:11:47,320 --> 00:11:50,160 Speaker 9: also seeing the appetite from those that have retired to 251 00:11:50,200 --> 00:11:53,240 Speaker 9: return from the workforce. In fact, we're seeing about one 252 00:11:53,280 --> 00:11:57,319 Speaker 9: in every six retirees are looking to return to the workforce. 253 00:11:57,840 --> 00:12:01,040 Speaker 9: Part of that due to a little bit of economic uncertainty, 254 00:12:01,200 --> 00:12:05,320 Speaker 9: so employers are really leveraging and capitalizing on that as 255 00:12:05,360 --> 00:12:06,840 Speaker 9: an opportunity to fill this gap. 256 00:12:07,679 --> 00:12:08,280 Speaker 7: So bring that. 257 00:12:08,240 --> 00:12:10,960 Speaker 1: Down kind of sector wise here in a previous segment, 258 00:12:10,960 --> 00:12:14,400 Speaker 1: we were talking about perhaps some of the sustainability in 259 00:12:14,440 --> 00:12:17,920 Speaker 1: the tech sector. For example, when we're talking about these 260 00:12:18,120 --> 00:12:23,480 Speaker 1: kind of labor market qualities, is it equal among all sectors. 261 00:12:23,480 --> 00:12:26,760 Speaker 9: Definitely not. So when you look at like the manufacturing sector, 262 00:12:27,040 --> 00:12:31,280 Speaker 9: retirees are a perfect opportunity. They've got the skills needed 263 00:12:31,320 --> 00:12:35,040 Speaker 9: to keep production moving and high productivity output less of 264 00:12:35,040 --> 00:12:37,720 Speaker 9: a training time. And that's an industry where we're seeing 265 00:12:37,720 --> 00:12:42,120 Speaker 9: this huge skills gap. So that's a different problem than 266 00:12:42,120 --> 00:12:44,160 Speaker 9: what we see in the tech sector. What we're seeing 267 00:12:44,160 --> 00:12:47,360 Speaker 9: in the tech sector today is that although you know, 268 00:12:47,520 --> 00:12:50,200 Speaker 9: we've heard about layoffs from massive employers and we keep 269 00:12:50,240 --> 00:12:53,880 Speaker 9: continuing to see challenges there, we are seeing that folks 270 00:12:53,920 --> 00:12:56,960 Speaker 9: that have lost their job are finding a new one 271 00:12:57,679 --> 00:12:59,920 Speaker 9: very quickly. So I think there are a lot of 272 00:13:00,080 --> 00:13:04,120 Speaker 9: different factors each industry is having to battle when it 273 00:13:04,160 --> 00:13:07,160 Speaker 9: comes to their talent strategy. 274 00:13:07,240 --> 00:13:09,440 Speaker 3: You know, this is that's interesting that you say that 275 00:13:09,480 --> 00:13:11,760 Speaker 3: because an earlier guest on this program was talking as 276 00:13:11,840 --> 00:13:14,520 Speaker 3: well about how some of these folks laid off from 277 00:13:14,559 --> 00:13:19,000 Speaker 3: tech companies are it gets diverse in their skill sets 278 00:13:19,040 --> 00:13:21,439 Speaker 3: and able to go out there and find Yeah, talk 279 00:13:21,440 --> 00:13:22,120 Speaker 3: to me more about that. 280 00:13:22,160 --> 00:13:24,120 Speaker 4: We have just about a minute left. 281 00:13:25,040 --> 00:13:27,600 Speaker 9: Yeah, So I think there's a big difference between an 282 00:13:27,720 --> 00:13:31,680 Speaker 9: industry and a skill set and occupation. So although the 283 00:13:31,760 --> 00:13:35,079 Speaker 9: tech sector is an industry maybe declining, those skill sets 284 00:13:35,120 --> 00:13:38,760 Speaker 9: are in hot demand across all industries. So the need 285 00:13:38,920 --> 00:13:42,680 Speaker 9: for technology professionals exist in those that are still growing, 286 00:13:43,000 --> 00:13:46,079 Speaker 9: so in the hospitality sector and the healthcare sector, they 287 00:13:46,200 --> 00:13:49,680 Speaker 9: still need those unique skill sets that happen to lie 288 00:13:49,880 --> 00:13:53,640 Speaker 9: over in the technology sector. So they're capitalizing on that 289 00:13:53,760 --> 00:13:56,920 Speaker 9: as well, which is partially what makes it great news 290 00:13:57,240 --> 00:13:59,320 Speaker 9: for those that have faced some you know, some hard 291 00:13:59,320 --> 00:14:00,720 Speaker 9: times with recently. 292 00:14:01,000 --> 00:14:02,800 Speaker 1: Yeah, certainly something we're gonna be keeping an eye on 293 00:14:03,000 --> 00:14:04,160 Speaker 1: very very closely. 294 00:14:04,280 --> 00:14:07,679 Speaker 7: Amy Glacier, Senior VP over at a deco. We thank you. 295 00:14:07,679 --> 00:14:10,800 Speaker 8: You're listening to the tape canser our live program, Bloomberg 296 00:14:10,840 --> 00:14:14,440 Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the 297 00:14:14,480 --> 00:14:17,720 Speaker 8: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 298 00:14:17,760 --> 00:14:20,600 Speaker 8: You can also listen live on Amazon Alexa from our 299 00:14:20,600 --> 00:14:25,640 Speaker 8: flagship New York station, Just say Alexa play Bloomberg eleven thirty. 300 00:14:26,840 --> 00:14:28,880 Speaker 1: I think everyone's really really psyched for this weekend, at 301 00:14:28,920 --> 00:14:32,280 Speaker 1: least the equity market certainly, certainly is. And a lot 302 00:14:32,320 --> 00:14:37,000 Speaker 1: to digest there, Maddy from the payrolls. As John had mentioned, 303 00:14:37,040 --> 00:14:40,200 Speaker 1: you've got the Chinese stimulus, you've got some good earnings, 304 00:14:40,400 --> 00:14:43,120 Speaker 1: some bad earnings, a little bit of a mixed pot there. 305 00:14:43,400 --> 00:14:45,800 Speaker 10: Yeah, and I'm so glad pretty that you flagged the 306 00:14:45,920 --> 00:14:48,200 Speaker 10: China story to me. I was reading in a little 307 00:14:48,200 --> 00:14:50,480 Speaker 10: bit this morning, and I was confused about why we 308 00:14:50,480 --> 00:14:52,960 Speaker 10: were seeing green on the screen. But to your point, 309 00:14:52,960 --> 00:14:54,440 Speaker 10: the China stimulus, that's a big deal. 310 00:14:54,520 --> 00:14:55,960 Speaker 1: Yeah. I mean, look, I think the stock market and 311 00:14:55,960 --> 00:14:57,760 Speaker 1: the bond market are responding to two different things. Again, 312 00:14:57,760 --> 00:14:59,480 Speaker 1: this is just my theory. We'll ask the experts here 313 00:14:59,480 --> 00:15:03,680 Speaker 1: in in a second. But to me, look, we didn't 314 00:15:03,720 --> 00:15:06,760 Speaker 1: have a ton of pre market action. Even as early 315 00:15:06,760 --> 00:15:09,560 Speaker 1: as five am, we had, you know, stocks only a 316 00:15:09,600 --> 00:15:12,000 Speaker 1: future tire by like two tens of one percent. Certainly 317 00:15:12,000 --> 00:15:14,160 Speaker 1: we're not seeing the rally that you are seeing right now, 318 00:15:14,320 --> 00:15:15,640 Speaker 1: and I think a lot of it does have to 319 00:15:15,680 --> 00:15:18,760 Speaker 1: do with the Chinese stimulu story. Because again I'm gonna 320 00:15:18,800 --> 00:15:21,280 Speaker 1: nerd out. Bear with me, Ben Emmons, he's gonna join 321 00:15:21,320 --> 00:15:24,280 Speaker 1: us in just a second. But you know, fifteen years ago, 322 00:15:24,320 --> 00:15:26,520 Speaker 1: when we were getting out of the global financial crisis, 323 00:15:26,720 --> 00:15:29,280 Speaker 1: infrastructure investment from China was a really big story, and 324 00:15:29,640 --> 00:15:32,200 Speaker 1: Chinese growth has been a big concern when you look 325 00:15:32,200 --> 00:15:34,600 Speaker 1: at kind of the day to day trading outside of 326 00:15:34,600 --> 00:15:37,160 Speaker 1: the debt ceiling saga. So let's get some expertise and 327 00:15:37,200 --> 00:15:40,000 Speaker 1: see if my theory is right here. Ben Emmons joins us. 328 00:15:40,160 --> 00:15:42,480 Speaker 1: He is the head of fixed income over at New 329 00:15:42,600 --> 00:15:45,800 Speaker 1: Edge Wealth. Ben, talk to us a little bit about 330 00:15:45,880 --> 00:15:48,760 Speaker 1: the read through of China. Is the read through of 331 00:15:48,840 --> 00:15:52,600 Speaker 1: twenty twenty three the same as it was fifteen years ago. 332 00:15:55,080 --> 00:15:58,560 Speaker 5: It's it's clearly different, you know, because you do have 333 00:15:58,640 --> 00:16:01,480 Speaker 5: an open and debted properly sector and that is a 334 00:16:01,560 --> 00:16:04,840 Speaker 5: drag on the Chinese economy. So as much as you 335 00:16:05,320 --> 00:16:08,760 Speaker 5: have sawt as a V shaped recovery from the reopening, 336 00:16:08,880 --> 00:16:11,160 Speaker 5: which is similar as we saw here in the US 337 00:16:11,200 --> 00:16:15,160 Speaker 5: and in Europe. The subsequent cooling of that through the 338 00:16:15,200 --> 00:16:19,880 Speaker 5: manufacturing sectors then really dragged down further by this property sector. 339 00:16:20,000 --> 00:16:22,760 Speaker 5: And I think the stimulus measures that you're seeing overnight 340 00:16:22,840 --> 00:16:26,400 Speaker 5: coming out are really addressing the property sector from not 341 00:16:26,520 --> 00:16:29,480 Speaker 5: being too big of a drag on that reopening momentum. 342 00:16:29,800 --> 00:16:32,320 Speaker 5: And so China has that ability right to very quickly 343 00:16:32,360 --> 00:16:36,000 Speaker 5: inject liquidity into the system and in fact the economy 344 00:16:36,440 --> 00:16:40,920 Speaker 5: almost instantly YPMI data in China if it goes blow fifty, 345 00:16:41,000 --> 00:16:43,280 Speaker 5: I think it's not always an alarming thing because China 346 00:16:43,280 --> 00:16:46,080 Speaker 5: could just boosts that in a moment. But at the 347 00:16:46,080 --> 00:16:48,880 Speaker 5: same time, there are structural issues in China that are 348 00:16:49,160 --> 00:16:52,080 Speaker 5: just like we have pose financial crisis, you gent into 349 00:16:52,120 --> 00:16:54,560 Speaker 5: some sort of a new normal idea too in China, 350 00:16:54,760 --> 00:16:56,880 Speaker 5: so it will be with us. But I think this 351 00:16:57,560 --> 00:17:01,240 Speaker 5: stimulus story overnight is at least assigned that China wants 352 00:17:01,320 --> 00:17:04,760 Speaker 5: to have this reopening continue to be having momentum and 353 00:17:04,920 --> 00:17:06,800 Speaker 5: trying to reach their growth target for this year, which 354 00:17:06,840 --> 00:17:08,119 Speaker 5: they said at five and a half percent. 355 00:17:08,840 --> 00:17:11,920 Speaker 10: Ben is it a recognition from China that the reopening 356 00:17:11,960 --> 00:17:16,080 Speaker 10: has not been as bullish, for lack of a better word, 357 00:17:16,320 --> 00:17:18,600 Speaker 10: as we initially anticipated. 358 00:17:20,280 --> 00:17:23,000 Speaker 5: It could be medicined, But I think if you look 359 00:17:23,040 --> 00:17:27,160 Speaker 5: at the granular data of that, you know leisure activity 360 00:17:27,200 --> 00:17:30,119 Speaker 5: in China has moved just as sharply up as as 361 00:17:30,200 --> 00:17:32,800 Speaker 5: we had here in the initial stages of the reopening. 362 00:17:33,600 --> 00:17:37,240 Speaker 5: Lots of mobility is happening. To this data out from 363 00:17:37,240 --> 00:17:40,160 Speaker 5: Goldman Saxon that they're seeing a lot of outbound flights 364 00:17:40,200 --> 00:17:42,680 Speaker 5: coming out of China. So I do think that the 365 00:17:43,119 --> 00:17:46,040 Speaker 5: momentum is there. I think what China deed doesn't want 366 00:17:46,119 --> 00:17:49,720 Speaker 5: is that that starts to falter driven by structural factors. 367 00:17:49,720 --> 00:17:53,600 Speaker 5: So think to that sends, You're right about that China's 368 00:17:53,640 --> 00:17:57,800 Speaker 5: addressing this head on. Now, will we get this resurgence 369 00:17:57,840 --> 00:18:00,199 Speaker 5: and all this demand coming out to people are so 370 00:18:00,240 --> 00:18:03,120 Speaker 5: anticipating this entire yet us to be seen China as 371 00:18:03,160 --> 00:18:05,879 Speaker 5: also to an extent, like I said, the tactical with 372 00:18:06,000 --> 00:18:08,600 Speaker 5: its measures right, it wants to address the economy but 373 00:18:08,720 --> 00:18:12,040 Speaker 5: not potentially overheated. So I think we have to keep 374 00:18:12,080 --> 00:18:12,560 Speaker 5: that in mind. 375 00:18:13,440 --> 00:18:13,640 Speaker 8: Ben. 376 00:18:13,720 --> 00:18:16,480 Speaker 1: Let's come back to the story Stateside here, which is 377 00:18:16,480 --> 00:18:19,440 Speaker 1: this payrolls report three hundred and thirty nine thousand relative 378 00:18:19,480 --> 00:18:21,960 Speaker 1: to a one hundred and ninety five thousand estimate a 379 00:18:22,160 --> 00:18:25,879 Speaker 1: blowout perils report for I think the fourteenth time in 380 00:18:25,960 --> 00:18:28,880 Speaker 1: a row. Ben, let's talk about this bond market. Read 381 00:18:28,920 --> 00:18:31,560 Speaker 1: through the two year yield at four forty let's four 382 00:18:31,600 --> 00:18:34,520 Speaker 1: forty seven, a move of twelve basis points higher. How 383 00:18:34,640 --> 00:18:36,800 Speaker 1: high does a two year yield go? 384 00:18:38,640 --> 00:18:41,720 Speaker 5: It could go a bit higher because my view, you know, 385 00:18:41,920 --> 00:18:45,800 Speaker 5: this report just underscores one the economy obviously is not 386 00:18:45,840 --> 00:18:49,920 Speaker 5: in a recession. And although I second the work by 387 00:18:49,920 --> 00:18:52,920 Speaker 5: Ana Wong and then her team on the state level 388 00:18:52,960 --> 00:18:55,119 Speaker 5: announces that they've done and I was actually talking to 389 00:18:55,160 --> 00:18:59,200 Speaker 5: her right before the program it created as some parts 390 00:18:59,240 --> 00:19:01,280 Speaker 5: of the country that are or sluggish or may have 391 00:19:01,480 --> 00:19:04,080 Speaker 5: for session, the job support doesn't show it, and it 392 00:19:04,119 --> 00:19:08,520 Speaker 5: comes again from similar sources. Our leisure sector continues to expand, 393 00:19:09,160 --> 00:19:12,880 Speaker 5: constructions expanded, which maybe pointing to the Infatial Reduction Act. 394 00:19:13,280 --> 00:19:16,480 Speaker 5: So there is this torque underneath the economy that actually 395 00:19:16,480 --> 00:19:18,840 Speaker 5: should lead you to somewhat higher yields. Again, so the 396 00:19:18,920 --> 00:19:22,119 Speaker 5: two year as the sort of the forward looking yield 397 00:19:22,160 --> 00:19:25,440 Speaker 5: for fat policy should be closer to where the fat 398 00:19:25,440 --> 00:19:28,960 Speaker 5: funds rate actually is. And that's a long way from 399 00:19:28,960 --> 00:19:32,200 Speaker 5: here though, so but that's not entirely impossible. So I say, 400 00:19:33,080 --> 00:19:36,359 Speaker 5: still think of a higher rate environment from here, given 401 00:19:36,400 --> 00:19:37,440 Speaker 5: the strength of the economy. 402 00:19:38,760 --> 00:19:41,000 Speaker 10: I want to talk about that strength that we saw 403 00:19:41,119 --> 00:19:43,840 Speaker 10: in the jobs report, because if you look at the 404 00:19:43,920 --> 00:19:47,840 Speaker 10: total hours worked, it did decline just a tiny bit 405 00:19:48,000 --> 00:19:50,520 Speaker 10: zero point one average hours decrease. So I know that's 406 00:19:50,560 --> 00:19:55,960 Speaker 10: not a lot, but I wonder if productivity decreases is 407 00:19:55,960 --> 00:19:58,520 Speaker 10: something that you look at and think about when sussing 408 00:19:58,560 --> 00:20:00,439 Speaker 10: out the impact of a job's report like this. 409 00:20:02,160 --> 00:20:06,000 Speaker 5: It's relevant because productivity has had, you know, really ups 410 00:20:06,040 --> 00:20:09,360 Speaker 5: and downs since we reopened the economy. In fact, actually 411 00:20:09,640 --> 00:20:13,399 Speaker 5: the official the official numbers are negative and uh and 412 00:20:13,480 --> 00:20:17,200 Speaker 5: this hour's work does say like, okay, there are probably 413 00:20:17,200 --> 00:20:19,879 Speaker 5: sports of people that are again out of the labor 414 00:20:19,880 --> 00:20:23,400 Speaker 5: force for periods of time, but that affects that productivity 415 00:20:23,640 --> 00:20:27,560 Speaker 5: or it's still this sort of very stop go, you know, 416 00:20:27,720 --> 00:20:31,879 Speaker 5: stay at home and at work environment that written. But 417 00:20:32,000 --> 00:20:34,199 Speaker 5: I don't think it's that alarming for the health of 418 00:20:34,240 --> 00:20:36,520 Speaker 5: the labor market in itself. It is to be a 419 00:20:36,560 --> 00:20:41,919 Speaker 5: report of broad based gains across most sectors instantly that 420 00:20:42,080 --> 00:20:46,320 Speaker 5: temporary employment again picked up. The only things I think 421 00:20:46,400 --> 00:20:48,920 Speaker 5: was in the household household service and weaknesses in terms 422 00:20:48,960 --> 00:20:52,000 Speaker 5: of the duration of employment, for example, that that went 423 00:20:52,080 --> 00:20:54,560 Speaker 5: up a bit. You know, I think that this is 424 00:20:54,600 --> 00:20:57,800 Speaker 5: a report that shows that the economy is not off 425 00:20:57,800 --> 00:21:01,159 Speaker 5: the rails. It keeps that resilience and and I feel 426 00:21:01,200 --> 00:21:04,480 Speaker 5: that the leisure sector can back to That is such 427 00:21:04,520 --> 00:21:07,040 Speaker 5: a big driver of this report, and at some point 428 00:21:07,080 --> 00:21:10,080 Speaker 5: that will change, I guess because it's a very cyclical sector. 429 00:21:10,760 --> 00:21:13,200 Speaker 5: But I think it's also a story of global reopening 430 00:21:13,200 --> 00:21:17,879 Speaker 5: that's affecting our labor market. If tourism is impacting leisure, 431 00:21:18,400 --> 00:21:21,080 Speaker 5: if immigration from the Mexican border is impacting maybe the 432 00:21:22,200 --> 00:21:25,879 Speaker 5: construction sector or other sectors, then you know, expanding labor 433 00:21:25,920 --> 00:21:29,920 Speaker 5: supply from those areas, yeah, keeps this labor market heart. 434 00:21:30,080 --> 00:21:33,760 Speaker 5: So despite the decline in hours work. 435 00:21:34,600 --> 00:21:36,879 Speaker 1: Right, and I think it really speaks to kind of 436 00:21:36,920 --> 00:21:40,800 Speaker 1: the future of how you actually calculate kind of the 437 00:21:41,640 --> 00:21:43,680 Speaker 1: inputs of this economy. 438 00:21:43,680 --> 00:21:46,760 Speaker 7: And in a post COVID world, Ben, let's talk a. 439 00:21:46,760 --> 00:21:49,560 Speaker 1: Little bit about kind of the cross asset messages that 440 00:21:49,640 --> 00:21:52,480 Speaker 1: you're getting in terms of the bond market specifically. Of course, 441 00:21:52,520 --> 00:21:54,120 Speaker 1: you know the front end of the curve is going 442 00:21:54,160 --> 00:21:55,560 Speaker 1: to be tied to the hip of what the Federal 443 00:21:55,560 --> 00:21:59,080 Speaker 1: Reserve does. How quickly could the Fed change its toun 444 00:21:59,080 --> 00:22:01,840 Speaker 1: and when it comes to growth, when it comes to 445 00:22:02,000 --> 00:22:05,919 Speaker 1: needing to stimulate the economy, and perhaps to some extent, 446 00:22:05,920 --> 00:22:08,679 Speaker 1: although this is to be fair and exaggeration taking a 447 00:22:08,720 --> 00:22:10,760 Speaker 1: page out of the China playbook, how quickly could that 448 00:22:10,760 --> 00:22:11,600 Speaker 1: transition happen? 449 00:22:13,200 --> 00:22:15,360 Speaker 5: I think it only happen, critic if we see material 450 00:22:15,400 --> 00:22:21,240 Speaker 5: weakness and employment, because on inflation, it's sort of a 451 00:22:22,119 --> 00:22:24,080 Speaker 5: saying like they're on a course to try to bring 452 00:22:24,119 --> 00:22:26,840 Speaker 5: it really down to two percent, that they're very determined 453 00:22:26,880 --> 00:22:31,600 Speaker 5: to do that. So in order to change that regime 454 00:22:31,840 --> 00:22:34,800 Speaker 5: of like basically they're having currently to say, a single 455 00:22:34,840 --> 00:22:38,280 Speaker 5: mandate focusing just on inflation for the time being. So 456 00:22:38,280 --> 00:22:41,480 Speaker 5: if you're seeing a sudden, really quick uptick in unemployment 457 00:22:41,560 --> 00:22:45,720 Speaker 5: and broader losses, that I think does change the reaction function, 458 00:22:46,560 --> 00:22:49,480 Speaker 5: and that's happened in the past step way in a way, 459 00:22:49,520 --> 00:22:51,879 Speaker 5: because I think that what they do then is plug 460 00:22:51,880 --> 00:22:55,159 Speaker 5: in the losses of jobs into the possibility that the 461 00:22:55,240 --> 00:22:57,919 Speaker 5: inflation rate starts to decline. So fast, so quick that 462 00:22:57,960 --> 00:23:00,240 Speaker 5: they end up on the wrong side of that, meaning 463 00:23:00,840 --> 00:23:04,080 Speaker 5: much too low inflation rate again with risk of deflation. 464 00:23:04,520 --> 00:23:06,600 Speaker 5: I think we're at this point, not at the point 465 00:23:06,680 --> 00:23:09,800 Speaker 5: at all, given the strength of the labor market. But 466 00:23:09,800 --> 00:23:12,240 Speaker 5: I do think the first reaction function to stimulus is 467 00:23:12,280 --> 00:23:17,600 Speaker 5: driven by, you know, rapidly deteriorating employment picture, and so 468 00:23:17,720 --> 00:23:19,520 Speaker 5: we're not there yet. The fact, I think were the 469 00:23:19,560 --> 00:23:24,480 Speaker 5: opposite way. If this report shows his strength and services 470 00:23:24,920 --> 00:23:27,600 Speaker 5: continue to be really robust in the economy, then their 471 00:23:27,720 --> 00:23:30,800 Speaker 5: preferred measure of course services will not blutch much down 472 00:23:30,840 --> 00:23:33,080 Speaker 5: and it means they have to continue to raise raise. 473 00:23:33,560 --> 00:23:35,439 Speaker 7: Yeah, certainly a conundrum. 474 00:23:35,480 --> 00:23:38,119 Speaker 1: I got to say, you cannot pay me a million 475 00:23:38,160 --> 00:23:41,280 Speaker 1: dollars to be chairman Powell right now. A lot to digest, 476 00:23:41,280 --> 00:23:43,560 Speaker 1: Ben Emmons. They had to fix income over at New 477 00:23:43,640 --> 00:23:45,720 Speaker 1: Edge Wealth. We thank you as always talked about this 478 00:23:45,760 --> 00:23:48,399 Speaker 1: bond market, this jobs market, and of course the growth 479 00:23:48,480 --> 00:23:50,159 Speaker 1: story in the economy. 480 00:23:51,200 --> 00:23:55,040 Speaker 8: You're listening to the tenth Can't Live Program Bloomberg Markets 481 00:23:55,080 --> 00:23:58,199 Speaker 8: weekdays at ten am Eastern on Bloomberg dot com, the 482 00:23:58,280 --> 00:24:01,399 Speaker 8: iHeartRadio app, and the blumber Business app, or listen on 483 00:24:01,480 --> 00:24:03,440 Speaker 8: demand wherever you get your podcast. 484 00:24:05,640 --> 00:24:08,000 Speaker 1: We have a really exciting guest, I think, and who 485 00:24:08,000 --> 00:24:10,439 Speaker 1: could probably answer a lot of the questions we have 486 00:24:10,560 --> 00:24:12,720 Speaker 1: on the not just the payrolls report, but kind of 487 00:24:12,760 --> 00:24:13,240 Speaker 1: the future of. 488 00:24:13,280 --> 00:24:14,600 Speaker 7: Hiring as well, Mattie. 489 00:24:14,640 --> 00:24:17,440 Speaker 1: As we talk about all this investment going into AI 490 00:24:17,600 --> 00:24:19,919 Speaker 1: and all of this investment going into kind of the 491 00:24:19,960 --> 00:24:22,720 Speaker 1: tech sector, but how does it actually play out on 492 00:24:22,800 --> 00:24:23,600 Speaker 1: the ground. 493 00:24:23,760 --> 00:24:26,600 Speaker 10: And what does it mean in terms of net positive 494 00:24:26,680 --> 00:24:28,879 Speaker 10: or negative for the consumers at the end of this, 495 00:24:29,080 --> 00:24:33,600 Speaker 10: whether that's less jobs available or you know, more efficient 496 00:24:33,760 --> 00:24:35,760 Speaker 10: laborer that could could benefit us. 497 00:24:36,240 --> 00:24:36,800 Speaker 7: In the end. 498 00:24:37,119 --> 00:24:37,600 Speaker 5: Yeah. 499 00:24:37,640 --> 00:24:40,680 Speaker 1: Absolutely, And you know, the trends here are almost hard 500 00:24:40,720 --> 00:24:43,400 Speaker 1: to keep up with because they on the surface you're 501 00:24:43,400 --> 00:24:45,480 Speaker 1: seeing you know, a hot, hot, hot payrolls report for 502 00:24:45,600 --> 00:24:49,399 Speaker 1: by the way, fourteen times in a row, wild But 503 00:24:49,880 --> 00:24:52,159 Speaker 1: on the ground we definitely want to hear kind of 504 00:24:52,160 --> 00:24:54,919 Speaker 1: that perspective as well. For that, we bring in Kara Brennan, 505 00:24:54,960 --> 00:24:57,639 Speaker 1: the chief people officer over at Lattice, tell us a 506 00:24:57,680 --> 00:25:01,120 Speaker 1: little bit about this AI story and whether we're prepared 507 00:25:01,160 --> 00:25:04,120 Speaker 1: for it. Kara, thank you for joining the program. Let's 508 00:25:04,160 --> 00:25:07,320 Speaker 1: start there. You will want this massive investment. We have 509 00:25:07,400 --> 00:25:12,160 Speaker 1: the sector that's growing super super quickly, do we have 510 00:25:12,600 --> 00:25:14,639 Speaker 1: the people infrastructure to support it. 511 00:25:16,720 --> 00:25:21,280 Speaker 11: That's the question chief people officers, HR folks, executives are 512 00:25:21,280 --> 00:25:25,880 Speaker 11: asking across the board. We just at Lattice where I work, 513 00:25:25,960 --> 00:25:29,840 Speaker 11: we have about six thousand companies that are small to 514 00:25:29,920 --> 00:25:33,120 Speaker 11: mid market, and we have a community of more than 515 00:25:33,160 --> 00:25:37,080 Speaker 11: twenty thousand HR people that interact and talk and ask 516 00:25:37,119 --> 00:25:39,520 Speaker 11: each other questions of what are you seeing which has GPT, 517 00:25:40,040 --> 00:25:41,919 Speaker 11: what are you seeing in future of AI, what kind 518 00:25:41,960 --> 00:25:43,879 Speaker 11: of tools are you buying, what kind of policies are 519 00:25:43,880 --> 00:25:48,600 Speaker 11: you setting? And some themes are emerging there. One is 520 00:25:48,640 --> 00:25:54,240 Speaker 11: that employers are understanding that employees are already using these tools, 521 00:25:54,760 --> 00:25:56,919 Speaker 11: so they're wanting to get ahead of it with policies 522 00:25:56,920 --> 00:26:00,600 Speaker 11: and practices that are sensible, but also taking to account 523 00:26:00,600 --> 00:26:04,760 Speaker 11: really important things like security. I think in general, and 524 00:26:05,040 --> 00:26:07,879 Speaker 11: at least this is my opinion and what we're seeing 525 00:26:07,880 --> 00:26:12,520 Speaker 11: at Lattice, is that there isn't this palpable fear that 526 00:26:12,840 --> 00:26:16,040 Speaker 11: jobs will be eliminated, but we are trying to get 527 00:26:16,080 --> 00:26:19,639 Speaker 11: ahead in terms of our workforce planning, especially at large enterprises, 528 00:26:19,680 --> 00:26:23,280 Speaker 11: which could see a significant shift in the types of 529 00:26:23,359 --> 00:26:25,880 Speaker 11: workers they hire and the types of workers that those 530 00:26:25,920 --> 00:26:29,920 Speaker 11: workers do depending on the tools that they purchase. They're 531 00:26:29,920 --> 00:26:32,399 Speaker 11: trying to get ahead of planning and looking at this 532 00:26:32,560 --> 00:26:35,440 Speaker 11: as a five year a ten year transition rather than 533 00:26:35,720 --> 00:26:40,240 Speaker 11: an immediate jolt or something that should drive panic. And 534 00:26:40,280 --> 00:26:43,200 Speaker 11: then I think the last piece is really understanding what 535 00:26:43,280 --> 00:26:45,879 Speaker 11: tools they should be buying. And we get down to 536 00:26:45,960 --> 00:26:50,919 Speaker 11: this as people leaders, what tools should we should we 537 00:26:51,080 --> 00:26:54,760 Speaker 11: invest in in our tech stack to make to continue 538 00:26:54,760 --> 00:26:58,360 Speaker 11: to drive great employee experiences, to continue to help employees develop, 539 00:26:58,760 --> 00:27:01,719 Speaker 11: and to enable the business to get a lot more 540 00:27:01,760 --> 00:27:06,160 Speaker 11: efficiencies in pockets where we already are starting to see 541 00:27:06,200 --> 00:27:07,199 Speaker 11: those tools arise. 542 00:27:07,920 --> 00:27:11,320 Speaker 10: Yeah, so Bloomberg Intelligence has a report on how the 543 00:27:11,400 --> 00:27:14,840 Speaker 10: generative AI market could fuel a one point three trillion 544 00:27:15,000 --> 00:27:19,720 Speaker 10: dollar addition to markets by twenty twenty three by the 545 00:27:19,840 --> 00:27:21,959 Speaker 10: end of the year. But then we've also done some 546 00:27:22,040 --> 00:27:25,320 Speaker 10: reporting on how the AI boom is going to delete 547 00:27:25,320 --> 00:27:28,720 Speaker 10: a lot of jobs traditionally held by women. Which of 548 00:27:28,760 --> 00:27:31,919 Speaker 10: those two is the winner here? Is the addition to 549 00:27:31,960 --> 00:27:34,119 Speaker 10: the market going to lead to more jobs for folks 550 00:27:34,200 --> 00:27:37,040 Speaker 10: or is it going to be something that deletes jobs 551 00:27:37,080 --> 00:27:40,040 Speaker 10: specifically for groups of people that have maybe had some 552 00:27:40,640 --> 00:27:42,720 Speaker 10: lack of access to jobs previously. 553 00:27:44,320 --> 00:27:47,880 Speaker 11: Well, unfortunately, I don't have that crystal ball. I can 554 00:27:47,920 --> 00:27:51,800 Speaker 11: tell you on the ground that these are definitely things 555 00:27:51,800 --> 00:27:55,280 Speaker 11: we're thinking about and talking about in the HRC realm. 556 00:27:55,800 --> 00:27:59,120 Speaker 11: What the consensus is of the folks that I've heard 557 00:27:59,440 --> 00:28:01,919 Speaker 11: and I'm talking to is really looking at who do 558 00:28:01,960 --> 00:28:04,080 Speaker 11: we have in seat now and how can we help 559 00:28:04,119 --> 00:28:07,960 Speaker 11: them be better at their jobs? And definitely strong sensitivities 560 00:28:08,000 --> 00:28:12,040 Speaker 11: around folks and underrepresented groups and women, and those are 561 00:28:12,080 --> 00:28:14,760 Speaker 11: folks that we want to continue to stay in seat 562 00:28:15,600 --> 00:28:20,639 Speaker 11: and continue to diversify our workforces. But what we all 563 00:28:20,680 --> 00:28:24,359 Speaker 11: know is upskilling and reskilling is really the path to 564 00:28:24,400 --> 00:28:27,200 Speaker 11: the future. And the good news is that's what's always 565 00:28:27,200 --> 00:28:30,439 Speaker 11: been the case when you're managing workforces. So those folks 566 00:28:30,440 --> 00:28:36,000 Speaker 11: who are willing to learn about the possibilities of AI 567 00:28:36,640 --> 00:28:39,760 Speaker 11: and learn how to use those news tools within our 568 00:28:39,840 --> 00:28:43,360 Speaker 11: companies is what we on the HR side are looking 569 00:28:43,400 --> 00:28:47,360 Speaker 11: to respond to and continue to drive understanding around. 570 00:28:48,000 --> 00:28:50,480 Speaker 1: Carol, let's talk about kind of the scary word in 571 00:28:50,520 --> 00:28:52,719 Speaker 1: markets here, which is the our word recession. 572 00:28:52,840 --> 00:28:55,320 Speaker 7: At the end of the day, A lot. 573 00:28:55,160 --> 00:28:56,840 Speaker 1: Of the consensus of years that we're we're going to 574 00:28:56,840 --> 00:28:59,959 Speaker 1: see a proper recession by the end of twenty two 575 00:29:00,000 --> 00:29:04,480 Speaker 1: twenty three, if not early twenty twenty four. In these 576 00:29:04,560 --> 00:29:07,200 Speaker 1: next twelve months, are you starting to see a hints 577 00:29:07,320 --> 00:29:10,040 Speaker 1: of kind of widespread layoffs or is this starting to 578 00:29:10,040 --> 00:29:13,400 Speaker 1: look like this inevitable recession whenever it hits, may at 579 00:29:13,440 --> 00:29:16,160 Speaker 1: the end of the day be a job full recession. 580 00:29:16,240 --> 00:29:16,760 Speaker 1: What do you think. 581 00:29:19,040 --> 00:29:22,400 Speaker 11: It's interesting because a lot of the conversations, again among 582 00:29:22,560 --> 00:29:28,920 Speaker 11: the HR community have baked in a mindset of restraint 583 00:29:29,720 --> 00:29:34,080 Speaker 11: and have baked in a mindset of conservative hiring, of 584 00:29:34,160 --> 00:29:40,280 Speaker 11: really driving efficiency and productivity. And that started two quarters 585 00:29:40,320 --> 00:29:44,120 Speaker 11: ago when we started talking about what a recession would 586 00:29:44,120 --> 00:29:49,080 Speaker 11: look like this year. What this means practically in the 587 00:29:49,120 --> 00:29:52,520 Speaker 11: seat of HR folks. And a lot of this is a 588 00:29:52,520 --> 00:29:55,040 Speaker 11: talent platform, so we talk a lot about these things. 589 00:29:55,120 --> 00:29:58,760 Speaker 11: It's really understanding the talents that we have in our companies, 590 00:29:59,000 --> 00:30:01,040 Speaker 11: how to ensure that talent is set up to succeed 591 00:30:01,120 --> 00:30:04,680 Speaker 11: and drive the business to succeed, driving real alignment between 592 00:30:04,680 --> 00:30:08,120 Speaker 11: employees day to day work and key business priorities, knowing 593 00:30:08,160 --> 00:30:11,320 Speaker 11: that those business priorities could shift in a down market 594 00:30:11,440 --> 00:30:15,320 Speaker 11: or a recession, and really really focusing on building a 595 00:30:15,320 --> 00:30:21,959 Speaker 11: culture of high performance, prioritizing feedback clear performance management, making 596 00:30:22,000 --> 00:30:26,760 Speaker 11: sure that our best performers are rewarded, and having clear 597 00:30:26,760 --> 00:30:30,760 Speaker 11: and transparent philosophies around things like compensation, so people have 598 00:30:30,800 --> 00:30:33,680 Speaker 11: a future that they can look to in the companies 599 00:30:34,120 --> 00:30:39,200 Speaker 11: in the company. So, I think a lot of the 600 00:30:39,240 --> 00:30:42,720 Speaker 11: behavior chains that would be driven by a recession is 601 00:30:42,840 --> 00:30:47,560 Speaker 11: already being adopted within organizations. And it doesn't surprise me 602 00:30:47,680 --> 00:30:52,160 Speaker 11: that we're seeing some additional jobs being added because I 603 00:30:52,200 --> 00:30:55,120 Speaker 11: think this conservative mindset is something that kicked in months 604 00:30:55,120 --> 00:30:57,360 Speaker 11: ago before maybe even the market's new. 605 00:30:58,600 --> 00:31:00,600 Speaker 10: Yeah, Kara, that makes a lot of sense. Thank you 606 00:31:00,640 --> 00:31:02,880 Speaker 10: so much for joining us. I think we're gonna have 607 00:31:02,880 --> 00:31:04,440 Speaker 10: to leave it there because we only have about thirty 608 00:31:04,480 --> 00:31:07,480 Speaker 10: seconds left, but thank you so much for that insight. 609 00:31:07,560 --> 00:31:09,400 Speaker 10: And it's so important forre you we talk about it 610 00:31:09,440 --> 00:31:11,959 Speaker 10: all the time, the impact of AI, whether or not 611 00:31:12,680 --> 00:31:14,320 Speaker 10: it's going to lead to more or less jobs, and 612 00:31:14,360 --> 00:31:18,160 Speaker 10: it sounds like something that is going to still be 613 00:31:18,160 --> 00:31:21,680 Speaker 10: a question mark for even the greatest minds on this, 614 00:31:21,760 --> 00:31:23,840 Speaker 10: the chief people officers who deal with this big question 615 00:31:23,960 --> 00:31:24,640 Speaker 10: every single day. 616 00:31:24,840 --> 00:31:27,040 Speaker 1: Yeah, absolutely, Cara brun and chief people officer over a 617 00:31:27,040 --> 00:31:28,840 Speaker 1: lot is giving us some crucial insight on that. 618 00:31:29,280 --> 00:31:32,400 Speaker 8: You're listening to the tape. Ken's are live program Bloomberg 619 00:31:32,480 --> 00:31:36,040 Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the 620 00:31:36,120 --> 00:31:39,360 Speaker 8: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 621 00:31:39,400 --> 00:31:42,200 Speaker 8: You can also listen live on Amazon Alexa from our 622 00:31:42,240 --> 00:31:47,200 Speaker 8: flagship New York station, Just say Alexa Play Bloomberg eleven thirty. 623 00:31:48,360 --> 00:31:50,360 Speaker 1: Look, we talked a lot about what's going on the 624 00:31:50,480 --> 00:31:54,680 Speaker 1: US in Europe, let's talk about the EM story as well. 625 00:31:54,800 --> 00:31:58,080 Speaker 1: Who better to bring in than Kristin Seva, managing principle 626 00:31:58,080 --> 00:32:00,240 Speaker 1: over at Paydon and Regal to talk to a a 627 00:32:00,240 --> 00:32:03,959 Speaker 1: little bit about the EM outlook and Kristin, there's so 628 00:32:04,120 --> 00:32:06,800 Speaker 1: much digest in the EM world. Top of mind for 629 00:32:06,880 --> 00:32:09,160 Speaker 1: me is China, but we could I really feel like 630 00:32:09,160 --> 00:32:11,480 Speaker 1: we could pick any country in the world and go there. 631 00:32:11,480 --> 00:32:14,120 Speaker 7: But let's start with the Chinese story. Madison knowses. 632 00:32:14,120 --> 00:32:16,120 Speaker 1: I've been obsessed with the headline that we got this 633 00:32:16,200 --> 00:32:20,080 Speaker 1: morning around five am that they are potentially looking at 634 00:32:20,320 --> 00:32:22,520 Speaker 1: extra stimulus for their property sector. 635 00:32:22,600 --> 00:32:24,920 Speaker 7: We know that's where a lot of the slowdown has been. 636 00:32:25,480 --> 00:32:27,840 Speaker 1: Your take on just how much of a difference that might. 637 00:32:27,680 --> 00:32:33,560 Speaker 12: Make, Well, I think China overall, right now, just in 638 00:32:33,640 --> 00:32:37,240 Speaker 12: terms of the big picture. We had such a weak 639 00:32:37,440 --> 00:32:40,760 Speaker 12: economy in twenty twenty two and this year is going 640 00:32:40,800 --> 00:32:44,080 Speaker 12: to be very different. I think it's really going to 641 00:32:44,080 --> 00:32:48,360 Speaker 12: be a consumer led growth story in China. You know, 642 00:32:48,840 --> 00:32:51,600 Speaker 12: as you've seen some of the data come out very strong. 643 00:32:51,720 --> 00:32:57,560 Speaker 12: Retail sales at eighteen percent. The industrial production numbers disappointed, 644 00:32:57,920 --> 00:33:01,000 Speaker 12: but that really didn't surprise us. Really thinks it's going 645 00:33:01,040 --> 00:33:04,760 Speaker 12: to be a consumer led growth story. Q one was 646 00:33:05,000 --> 00:33:08,280 Speaker 12: very very strong. We think that has to come down, 647 00:33:08,360 --> 00:33:10,040 Speaker 12: but we're still going to get five and a half 648 00:33:10,120 --> 00:33:13,440 Speaker 12: percent growth. As far as the property sector goes, I 649 00:33:13,480 --> 00:33:17,280 Speaker 12: think additional stimulus will be helpful, but the property sector 650 00:33:17,800 --> 00:33:21,840 Speaker 12: itself is quite has been quite problematic. I think they're 651 00:33:21,880 --> 00:33:26,200 Speaker 12: looking to stabilize that, but not to overstimulate because I 652 00:33:26,240 --> 00:33:31,360 Speaker 12: think the government is concerned about the potential that that 653 00:33:31,760 --> 00:33:37,240 Speaker 12: could have for really causing problems overall in credit market. 654 00:33:37,320 --> 00:33:39,960 Speaker 12: So I think they're going to be fairly cautious on 655 00:33:40,120 --> 00:33:43,400 Speaker 12: any sort of a stimulus going forward, not to overdo it. 656 00:33:44,120 --> 00:33:46,680 Speaker 10: One thing I've been wondering about with the China story 657 00:33:46,800 --> 00:33:49,600 Speaker 10: is just that the reopening has felt like more of 658 00:33:49,640 --> 00:33:53,280 Speaker 10: a trickle than a wave. Is that wave going to 659 00:33:53,720 --> 00:33:56,280 Speaker 10: start to pick up through the second half of this 660 00:33:56,400 --> 00:33:58,200 Speaker 10: year and into twenty twenty four. 661 00:34:00,160 --> 00:34:04,000 Speaker 12: Well, again, I think that the first quarter was so 662 00:34:04,160 --> 00:34:07,720 Speaker 12: much stronger than expected that some of the data that's 663 00:34:07,760 --> 00:34:12,280 Speaker 12: been coming out has been lower than expectations, but expect 664 00:34:12,400 --> 00:34:16,240 Speaker 12: expectations were very, very high. So that eighteen percent retail 665 00:34:16,320 --> 00:34:19,560 Speaker 12: sales number that I mentioned was a bit lower than 666 00:34:19,640 --> 00:34:23,400 Speaker 12: expectations of twenty one percent, but still quite high. So 667 00:34:23,480 --> 00:34:27,000 Speaker 12: we think that again we're going to be set up 668 00:34:27,000 --> 00:34:29,000 Speaker 12: for a year that's going to be around five and 669 00:34:29,040 --> 00:34:32,719 Speaker 12: a half percent growth. Next year, we're probably going to 670 00:34:32,719 --> 00:34:36,080 Speaker 12: see something around four and a half percent growth with 671 00:34:36,320 --> 00:34:40,239 Speaker 12: some sort of level of moderation to this consumption lens 672 00:34:40,239 --> 00:34:41,120 Speaker 12: boom that we're seeing. 673 00:34:42,080 --> 00:34:45,399 Speaker 1: How are you looking at the US growth story? Then, 674 00:34:45,480 --> 00:34:47,960 Speaker 1: in terms of kind of the ripple effects visa v. 675 00:34:48,960 --> 00:34:51,759 Speaker 1: The dollar, I know Madison has been I don't know 676 00:34:51,800 --> 00:34:55,520 Speaker 1: why it's called you, Madison, Matty has been looking very 677 00:34:55,520 --> 00:34:59,759 Speaker 1: closely at the ripple effects of the dollar. When you're 678 00:35:00,000 --> 00:35:03,520 Speaker 1: looking at a federal reserve that is potentially ending their 679 00:35:03,920 --> 00:35:05,480 Speaker 1: tightening cycle, whether that be. 680 00:35:05,840 --> 00:35:08,280 Speaker 7: Right now or at the end of the summer. 681 00:35:08,760 --> 00:35:11,440 Speaker 1: The ripple effects through the dollar on the EM space. 682 00:35:11,960 --> 00:35:15,320 Speaker 1: How do you look at that from a broader complex. 683 00:35:16,400 --> 00:35:19,680 Speaker 12: Well, the end of the FED hiking cycle is a 684 00:35:19,719 --> 00:35:22,839 Speaker 12: good thing for emerging marketed. That was one of the 685 00:35:22,880 --> 00:35:26,480 Speaker 12: things that really weighed on the asset class last year. 686 00:35:26,920 --> 00:35:29,719 Speaker 12: So now that we've got that risk behind us, and 687 00:35:29,840 --> 00:35:34,080 Speaker 12: also have the China weakness behind us, we think that 688 00:35:34,080 --> 00:35:39,000 Speaker 12: that all spills a positive signal in terms of where 689 00:35:39,040 --> 00:35:43,600 Speaker 12: we can see EM currencies go. So our view is 690 00:35:43,640 --> 00:35:49,360 Speaker 12: that the dollar is going to be weak versus EM 691 00:35:49,400 --> 00:35:53,800 Speaker 12: currencies going forward. We've come off a ten year very 692 00:35:53,840 --> 00:35:58,279 Speaker 12: strong cycle of the dollar. The dollars overvalued, and it's 693 00:35:58,400 --> 00:36:01,840 Speaker 12: not a story anymore where we can point to US 694 00:36:01,880 --> 00:36:06,080 Speaker 12: exceptionalism versus the rest of the world. Now with the 695 00:36:06,239 --> 00:36:10,240 Speaker 12: US potentially going into recession at some point and slower 696 00:36:10,280 --> 00:36:13,800 Speaker 12: growth in the US, so we think that that growth 697 00:36:13,840 --> 00:36:17,640 Speaker 12: differential between the US and other countries, and in particular 698 00:36:17,640 --> 00:36:21,319 Speaker 12: emerging market countries, is going to continue to widen, which 699 00:36:21,320 --> 00:36:25,719 Speaker 12: should be a positive thing for emerging markets currencies. 700 00:36:26,480 --> 00:36:29,360 Speaker 10: Yeah, Kristin, I know you spend a lot of time 701 00:36:29,400 --> 00:36:31,759 Speaker 10: on the macro here, but going micro, I talked to 702 00:36:31,800 --> 00:36:34,520 Speaker 10: an analyst this week who gave me a really cool example, 703 00:36:34,600 --> 00:36:38,200 Speaker 10: he talked about how chlorox wipes are highly adopted in 704 00:36:38,239 --> 00:36:42,520 Speaker 10: the US, but that's a huge opportunity internationally because of 705 00:36:42,520 --> 00:36:45,520 Speaker 10: their higher margins on the wipes, and they're not used 706 00:36:45,560 --> 00:36:49,560 Speaker 10: as much in other countries, particularly in Latin America, so 707 00:36:49,640 --> 00:36:52,880 Speaker 10: that's a big growth opportunity for them, particularly as the 708 00:36:52,960 --> 00:36:56,600 Speaker 10: dollar does decline. Are there any other examples like that 709 00:36:56,600 --> 00:36:59,279 Speaker 10: that you think that investors should be thinking about and 710 00:36:59,320 --> 00:37:02,720 Speaker 10: looking at as potential growth opportunities in the EM space. 711 00:37:04,320 --> 00:37:07,960 Speaker 12: Yeah. I think in the emerging market debt space, it's 712 00:37:08,040 --> 00:37:11,799 Speaker 12: really a sovereign story. This s A class is primarily 713 00:37:11,840 --> 00:37:15,799 Speaker 12: about countries and picking the countries that you think are 714 00:37:15,840 --> 00:37:21,240 Speaker 12: going to improve. And we also have a growing emerging 715 00:37:21,280 --> 00:37:25,040 Speaker 12: market corporate space though as well, so I think on 716 00:37:25,400 --> 00:37:31,280 Speaker 12: the corporate side there are definitely opportunities within various emerging 717 00:37:31,320 --> 00:37:37,400 Speaker 12: market corporate markets, well managed corporations that we think could 718 00:37:37,400 --> 00:37:41,480 Speaker 12: do well in this environment as well. And that corporate 719 00:37:41,520 --> 00:37:44,480 Speaker 12: space also in terms of the duration, is a bit 720 00:37:44,560 --> 00:37:49,080 Speaker 12: lower than the duration of the sovereigns. But I'd say 721 00:37:49,280 --> 00:37:51,400 Speaker 12: in general, we think there's a lot of opportunities. You 722 00:37:51,400 --> 00:37:55,280 Speaker 12: mentioned Latin America, a lot of opportunities in Latin America, 723 00:37:55,360 --> 00:37:58,799 Speaker 12: particularly where central banks have done a good job of 724 00:37:59,000 --> 00:38:03,600 Speaker 12: proactively tightening and so get getting a hold on their 725 00:38:03,600 --> 00:38:08,480 Speaker 12: domestic inflation and having inflation start to come down in 726 00:38:08,560 --> 00:38:11,279 Speaker 12: many of these countries because they did such a good 727 00:38:11,360 --> 00:38:15,400 Speaker 12: job of being very proactive and even hiking earlier than 728 00:38:15,440 --> 00:38:19,160 Speaker 12: the FED. So we think that overall macro environment should 729 00:38:19,160 --> 00:38:22,200 Speaker 12: be very positive in many of these countries for that 730 00:38:22,360 --> 00:38:25,320 Speaker 12: business cycle and for these businesses to be able to 731 00:38:25,320 --> 00:38:27,120 Speaker 12: operate in a lower inflation environment. 732 00:38:28,000 --> 00:38:30,799 Speaker 1: Talk to us a little bit about the carry trade here. 733 00:38:31,080 --> 00:38:33,480 Speaker 1: I mean, look, carry has always been popular when you're 734 00:38:33,600 --> 00:38:35,920 Speaker 1: when you're looking for kind of a hunt for yield. 735 00:38:36,280 --> 00:38:39,320 Speaker 1: But in this kind of era of where perhaps the 736 00:38:39,360 --> 00:38:43,160 Speaker 1: markets are looking through the recession that everyone expects to 737 00:38:43,200 --> 00:38:46,440 Speaker 1: be just around the corner, just how popular is the 738 00:38:46,560 --> 00:38:49,120 Speaker 1: risk taking? Just how popular is the carry trade right now? 739 00:38:50,880 --> 00:38:54,800 Speaker 12: Well, I think in fixed income, in the higher yielding 740 00:38:54,960 --> 00:38:59,920 Speaker 12: parts of fixed income, like emerging markets, you're getting starting 741 00:39:00,080 --> 00:39:02,080 Speaker 12: yields now, if you were to get and buy into 742 00:39:02,120 --> 00:39:04,520 Speaker 12: the emerging market that asset class right now, you're getting 743 00:39:04,640 --> 00:39:08,799 Speaker 12: starting yields that are very very high, so over eight 744 00:39:08,880 --> 00:39:13,959 Speaker 12: percent on most emerging market portfolios. And you know, even 745 00:39:14,000 --> 00:39:17,760 Speaker 12: in an asset class like the emerging market local asset class, 746 00:39:17,800 --> 00:39:19,880 Speaker 12: where the overall index yield is six and a half, 747 00:39:19,920 --> 00:39:23,879 Speaker 12: there's a significant dispersion in there in many countries are 748 00:39:23,880 --> 00:39:27,160 Speaker 12: offering eight to twelve percent local yields. So we think 749 00:39:27,200 --> 00:39:31,239 Speaker 12: that no matter what you're investing in, even if you 750 00:39:31,560 --> 00:39:34,319 Speaker 12: were investing just in the overall index right now, in 751 00:39:34,400 --> 00:39:37,040 Speaker 12: emerging markets, your starting yields are going to be very, 752 00:39:37,160 --> 00:39:42,720 Speaker 12: very high, and that would indicate from the previous looking 753 00:39:42,719 --> 00:39:46,120 Speaker 12: at previous historical periods where you have these kinds of yields, 754 00:39:46,280 --> 00:39:49,439 Speaker 12: that your total return expectations are also going to be high, 755 00:39:49,560 --> 00:39:51,759 Speaker 12: say in the eight to twelve percent range over the 756 00:39:51,760 --> 00:39:55,280 Speaker 12: next three years. So I think the em asset class 757 00:39:55,320 --> 00:39:58,120 Speaker 12: overall right now is a good carry story. I think 758 00:39:58,200 --> 00:40:00,920 Speaker 12: within the asset class you really have to pick and 759 00:40:01,000 --> 00:40:05,520 Speaker 12: choose and not just rely on on only carry. You 760 00:40:05,600 --> 00:40:08,600 Speaker 12: really have to pay attention to fundamentals into what you 761 00:40:08,640 --> 00:40:10,960 Speaker 12: think your overall total return is going to be. So 762 00:40:11,000 --> 00:40:14,520 Speaker 12: we have a nice mix in our portfolios of both 763 00:40:14,560 --> 00:40:20,200 Speaker 12: investment grade and high yield opportunities in the portfolio. And 764 00:40:20,360 --> 00:40:23,400 Speaker 12: keep in mind that emerging market debt, even though it 765 00:40:23,440 --> 00:40:27,600 Speaker 12: has this high yield. It's very highly rated, so all 766 00:40:27,640 --> 00:40:31,279 Speaker 12: three asset classes our overall investment grade with a high 767 00:40:31,280 --> 00:40:35,640 Speaker 12: percentage over sixty percent in investment grade security. 768 00:40:36,200 --> 00:40:41,080 Speaker 1: Certainly in involving market. Kristen Seva, we thank you as always. 769 00:40:41,120 --> 00:40:43,400 Speaker 1: She is a managing principle over at Hayden and Regal. 770 00:40:43,760 --> 00:40:46,839 Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can 771 00:40:46,880 --> 00:40:50,680 Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever 772 00:40:50,760 --> 00:40:54,480 Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 773 00:40:54,680 --> 00:40:56,600 Speaker 2: at Matt Miller nineteen seventy three. 774 00:40:57,080 --> 00:40:59,480 Speaker 7: And I'm Paul Sweeney. I'm on Twitter at Ptsweeney. 775 00:40:59,520 --> 00:41:02,200 Speaker 2: Before the podcast, you can always catch us worldwide at 776 00:41:02,239 --> 00:41:03,000 Speaker 2: Bloomberg Radio