1 00:00:00,840 --> 00:00:04,000 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,080 --> 00:00:05,240 Speaker 1: my co host Matt Miller. 3 00:00:05,640 --> 00:00:09,600 Speaker 2: Every business day we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:13,600 Speaker 2: and Bloomberg experts, along with essential market moving news. 5 00:00:14,160 --> 00:00:17,279 Speaker 1: Find the Bloomberg Markets Podcast called Apple Podcasts or wherever 6 00:00:17,400 --> 00:00:20,520 Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast. 7 00:00:20,960 --> 00:00:21,720 Speaker 3: I'm David Weston. 8 00:00:21,760 --> 00:00:24,080 Speaker 4: I'm delighted to be joined right now by the Federal 9 00:00:24,360 --> 00:00:26,280 Speaker 4: the president of the Chicago Fed. 10 00:00:26,320 --> 00:00:27,320 Speaker 3: He is Austin Goolsby. 11 00:00:27,360 --> 00:00:29,560 Speaker 4: Austin, thanks for being here. We've so we're out here 12 00:00:29,560 --> 00:00:32,120 Speaker 4: for the Aspen Economic Strategy Group meetings. A lot of 13 00:00:32,159 --> 00:00:35,920 Speaker 4: talk about fiscal issues, monetary issues, but we all I 14 00:00:35,960 --> 00:00:40,040 Speaker 4: have now the key jobs figures a little bit lighter 15 00:00:40,040 --> 00:00:41,839 Speaker 4: than expected, one hundred and eighty seven thousand, set of 16 00:00:41,840 --> 00:00:44,960 Speaker 4: two hundred thousand, little heavier than expected. On the wages, 17 00:00:45,000 --> 00:00:45,960 Speaker 4: what did you take them? 18 00:00:46,320 --> 00:00:48,000 Speaker 3: It was pretty much what we expected. 19 00:00:48,120 --> 00:00:51,599 Speaker 5: I mean, let's remember the job's number is whatever it is, 20 00:00:51,720 --> 00:00:54,560 Speaker 5: plus or minus one hundred and twenty thousand a month, 21 00:00:54,680 --> 00:00:58,560 Speaker 5: so there's no point quibbling over over numbers. 22 00:00:58,680 --> 00:01:00,120 Speaker 3: The job mark. 23 00:01:00,000 --> 00:01:04,880 Speaker 5: Mart is cooling a little too kind of a balanced level, 24 00:01:04,920 --> 00:01:07,880 Speaker 5: but it's still extremely strong. That's the strongest part of 25 00:01:07,880 --> 00:01:11,000 Speaker 5: the economy by far is how low the unemployment rate 26 00:01:11,080 --> 00:01:13,280 Speaker 5: is and people can get a job if they want 27 00:01:13,319 --> 00:01:13,680 Speaker 5: a job. 28 00:01:14,440 --> 00:01:16,560 Speaker 4: To that point of being tight one hundred and seven 29 00:01:16,600 --> 00:01:19,520 Speaker 4: thousand plus or minus, it's still way more than you 30 00:01:19,520 --> 00:01:21,840 Speaker 4: need just to catch up to keep even with the 31 00:01:21,880 --> 00:01:24,280 Speaker 4: new people coming into the workforce. So it is tightening 32 00:01:24,280 --> 00:01:26,520 Speaker 4: in that sense, is it not. I think that's right. 33 00:01:26,760 --> 00:01:31,199 Speaker 5: You know, let's say one hundred thousand just from population 34 00:01:31,280 --> 00:01:34,480 Speaker 5: and what's coming into the workforce, so it's stronger than that. 35 00:01:35,080 --> 00:01:38,240 Speaker 5: It's been the surprise of the year, of the six 36 00:01:38,319 --> 00:01:44,440 Speaker 5: months that all of the people that folks thought were 37 00:01:44,520 --> 00:01:47,120 Speaker 5: gone from the labor force never to return, a lot 38 00:01:47,200 --> 00:01:48,160 Speaker 5: of them are coming back. 39 00:01:48,240 --> 00:01:50,800 Speaker 3: You know. When it's when the job market is as strong. 40 00:01:50,520 --> 00:01:54,480 Speaker 5: As that, you've seen labor force participation rise back to 41 00:01:54,640 --> 00:01:57,960 Speaker 5: levels that we hadn't seen for several years at least. 42 00:01:58,280 --> 00:02:00,640 Speaker 3: So that's been great. I mean, that's strongest part of 43 00:02:00,640 --> 00:02:01,120 Speaker 3: the economy. 44 00:02:01,200 --> 00:02:03,120 Speaker 4: Yeah, none of us wants anybody be out of a job, 45 00:02:03,160 --> 00:02:05,000 Speaker 4: so it's a good thing. It's just many p other jobs. 46 00:02:05,240 --> 00:02:08,200 Speaker 4: But what about the wages where now these numbers were 47 00:02:08,240 --> 00:02:10,120 Speaker 4: four point four percent year over year. 48 00:02:10,160 --> 00:02:10,920 Speaker 3: I believe it was. 49 00:02:11,600 --> 00:02:13,760 Speaker 4: That doesn't sound like something consistent with getting to two 50 00:02:13,760 --> 00:02:14,840 Speaker 4: percent inflation overall. 51 00:02:16,800 --> 00:02:18,840 Speaker 3: The way I view it is two things. 52 00:02:18,880 --> 00:02:23,440 Speaker 5: One can't say anything about wages until you actually know 53 00:02:23,480 --> 00:02:27,040 Speaker 5: what's happening with productivity. We got some productivity numbers. They 54 00:02:27,080 --> 00:02:30,600 Speaker 5: were strong for the quarter. That's very noisy. But if 55 00:02:30,639 --> 00:02:33,720 Speaker 5: you have strong productivity growth, you can have wage growth 56 00:02:33,760 --> 00:02:35,280 Speaker 5: and it doesn't generate inflation. 57 00:02:35,880 --> 00:02:37,919 Speaker 3: And the other thing about wages is. 58 00:02:37,880 --> 00:02:41,000 Speaker 5: They're not a leading indicator of price inflation. 59 00:02:41,480 --> 00:02:44,960 Speaker 3: They're backward looking. They move. Wages move more slowly. 60 00:02:45,000 --> 00:02:48,480 Speaker 5: When things happen, we get shocks, the prices move first 61 00:02:48,520 --> 00:02:51,480 Speaker 5: and then the wages. So when we see what's happening 62 00:02:51,480 --> 00:02:54,480 Speaker 5: to wages today, this is kind of an amalgam of. 63 00:02:54,480 --> 00:02:56,840 Speaker 3: A bunch of stuff that already occurred. 64 00:02:58,000 --> 00:03:00,639 Speaker 5: I think if you want to know if you're beat inflation, 65 00:03:01,280 --> 00:03:04,280 Speaker 5: go watch the inflation. You know, the price series, and 66 00:03:04,400 --> 00:03:07,639 Speaker 5: especially the new months of inflation in the core. 67 00:03:07,720 --> 00:03:09,000 Speaker 3: That's really what you want to be Why. 68 00:03:08,919 --> 00:03:11,040 Speaker 4: What are those numbers telling you right now? Particularly goods inflation? 69 00:03:11,120 --> 00:03:12,080 Speaker 4: Is it a bit stickier than you. 70 00:03:12,120 --> 00:03:13,839 Speaker 3: Thought it has been? 71 00:03:13,919 --> 00:03:17,680 Speaker 5: But the last couple of readings have been pretty positive. 72 00:03:19,639 --> 00:03:22,960 Speaker 5: It's important that you raise this goods loosely. If you 73 00:03:23,000 --> 00:03:25,720 Speaker 5: look at core inflation, you got goods, you got housing, 74 00:03:25,760 --> 00:03:30,520 Speaker 5: you got services not including housing. And we've much remarked 75 00:03:30,560 --> 00:03:33,560 Speaker 5: on the skinness and persistence of services inflation. 76 00:03:34,360 --> 00:03:35,160 Speaker 3: But we knew. 77 00:03:34,920 --> 00:03:39,560 Speaker 5: That that that's not where we went wrong over at 78 00:03:39,560 --> 00:03:42,080 Speaker 5: the end of last year beginning of this year, with 79 00:03:42,200 --> 00:03:45,920 Speaker 5: inflation lasting a little longer than we thought, it has 80 00:03:45,960 --> 00:03:49,520 Speaker 5: been that goods prices, while down, have not gone all 81 00:03:49,560 --> 00:03:51,480 Speaker 5: the way down to where. 82 00:03:51,240 --> 00:03:52,960 Speaker 3: They were before the pandemic. 83 00:03:54,240 --> 00:03:57,200 Speaker 5: I feel like that's kind of started and that's put 84 00:03:57,240 --> 00:03:59,640 Speaker 5: the FED on this line. I mean, it's a thin 85 00:03:59,800 --> 00:04:03,560 Speaker 5: line to walk, but getting the prices down without having 86 00:04:03,640 --> 00:04:07,320 Speaker 5: a big recession, we're gonna Johnny cash this thing and 87 00:04:07,800 --> 00:04:10,760 Speaker 5: walk that line. And that that's for sure the goal. 88 00:04:11,880 --> 00:04:14,600 Speaker 5: And goods price has got to come down. And then 89 00:04:14,640 --> 00:04:16,240 Speaker 5: the next one's got to be housing. 90 00:04:16,640 --> 00:04:18,320 Speaker 3: As you know, it's. 91 00:04:18,200 --> 00:04:22,919 Speaker 5: The the housing that's in the CPI is based on 92 00:04:23,000 --> 00:04:25,000 Speaker 5: a bunch of market rents and it takes. 93 00:04:24,760 --> 00:04:26,120 Speaker 3: A while to flow through. 94 00:04:26,200 --> 00:04:28,800 Speaker 5: So hopefully as we go into the fall, that's that's 95 00:04:28,800 --> 00:04:29,600 Speaker 5: gonna be the next one. 96 00:04:29,600 --> 00:04:31,560 Speaker 4: So also gonna stick with the Johnny Cash. Yeah, walk 97 00:04:31,560 --> 00:04:34,039 Speaker 4: in that line. How long is the line? And we 98 00:04:34,120 --> 00:04:36,200 Speaker 4: know that the target is two percent. It doesn't feel 99 00:04:36,200 --> 00:04:37,719 Speaker 4: like you're going to come up that two percent goal? 100 00:04:38,080 --> 00:04:40,719 Speaker 4: But how long until you get there? How patient can 101 00:04:40,760 --> 00:04:41,000 Speaker 4: you be? 102 00:04:41,720 --> 00:04:43,480 Speaker 3: We got to be some of patient. You know. 103 00:04:44,200 --> 00:04:47,640 Speaker 5: Take as just a microcosmic example, this thing with housing. 104 00:04:48,200 --> 00:04:52,039 Speaker 5: We've seen the market rents coming down, but it takes 105 00:04:52,200 --> 00:04:55,839 Speaker 5: a while for that to flow through into the let's 106 00:04:55,880 --> 00:04:59,440 Speaker 5: call it the average housing prices that are in the CPI. 107 00:05:00,040 --> 00:05:00,880 Speaker 3: It's got to be patient. 108 00:05:01,040 --> 00:05:04,160 Speaker 5: I know everybody wants to say, ah, fine, vove, we're done. 109 00:05:04,360 --> 00:05:05,720 Speaker 3: That's not how it works. 110 00:05:06,320 --> 00:05:10,560 Speaker 5: If you walk the golden path and you walk that line, 111 00:05:11,080 --> 00:05:15,240 Speaker 5: it's going to take a while. And rather than arguing 112 00:05:15,320 --> 00:05:19,760 Speaker 5: about the peak rate of how many more rate increases 113 00:05:19,760 --> 00:05:22,560 Speaker 5: do there need to be, what we should probably start 114 00:05:22,600 --> 00:05:25,520 Speaker 5: thinking about is that, well, how long does this last 115 00:05:25,880 --> 00:05:26,800 Speaker 5: that you're going to. 116 00:05:26,960 --> 00:05:29,000 Speaker 3: Be at these elevated rates. 117 00:05:29,120 --> 00:05:33,159 Speaker 5: It's been a five hundred plus basis point increase over 118 00:05:33,200 --> 00:05:37,599 Speaker 5: a relatively short period. If you hold at five and 119 00:05:37,640 --> 00:05:41,839 Speaker 5: a quarter, five and a half, five and whatever while 120 00:05:41,880 --> 00:05:44,840 Speaker 5: inflation goes down, that is a restrictive environment. 121 00:05:44,920 --> 00:05:48,599 Speaker 3: Holding is increasing restrictiveness in that sense. 122 00:05:48,760 --> 00:05:50,359 Speaker 4: Austin, let me ask you one of the questions it 123 00:05:50,360 --> 00:05:52,839 Speaker 4: came up this week, which is the Fitch rating on 124 00:05:52,920 --> 00:05:55,280 Speaker 4: the US sovereign debt that took out surprised a lot 125 00:05:55,320 --> 00:05:58,839 Speaker 4: of people. I think, is it important? And I'm not 126 00:05:58,880 --> 00:06:01,760 Speaker 4: saying was the rating important in itself? But is what 127 00:06:01,800 --> 00:06:04,080 Speaker 4: they're pointing toward important. 128 00:06:05,400 --> 00:06:09,040 Speaker 5: In a vague sense? Yes, but everybody knows that. I mean, 129 00:06:09,080 --> 00:06:11,840 Speaker 5: we went through the debt ceiling. Every day we're talking 130 00:06:11,880 --> 00:06:14,560 Speaker 5: about this. This is dysfunctional. 131 00:06:15,080 --> 00:06:16,880 Speaker 3: We've got to get out of this dynamic. 132 00:06:18,000 --> 00:06:20,720 Speaker 5: I was around in Washington the last time we went 133 00:06:20,760 --> 00:06:24,599 Speaker 5: through this downgrade thing. There's a couple of things I 134 00:06:24,640 --> 00:06:27,280 Speaker 5: don't understand about it. Ultimately, I don't think it's gonna 135 00:06:27,320 --> 00:06:30,880 Speaker 5: make that much difference. This isn't like a some obscure 136 00:06:30,920 --> 00:06:33,800 Speaker 5: stock or bond that nobody knows and it's ah the 137 00:06:33,880 --> 00:06:35,880 Speaker 5: rating agency went and looked at it, so you don't 138 00:06:35,880 --> 00:06:38,039 Speaker 5: have to. I mean, this is US Treasury is the 139 00:06:38,080 --> 00:06:42,360 Speaker 5: most observed market with the most information in the entire world. 140 00:06:42,720 --> 00:06:47,560 Speaker 5: So h I don't know what their motivation was. I'm 141 00:06:47,560 --> 00:06:51,160 Speaker 5: not gonna I'm not gonna guess at that, but I 142 00:06:51,200 --> 00:06:54,800 Speaker 5: guess I don't see how something else is gonna be 143 00:06:54,880 --> 00:06:58,520 Speaker 5: rated triple A. If they were defaulting on US treasuries, 144 00:06:58,560 --> 00:06:59,599 Speaker 5: it seems like that would be. 145 00:06:59,600 --> 00:07:01,800 Speaker 3: A pad hey for the market. But lets say ask 146 00:07:01,839 --> 00:07:02,560 Speaker 3: you a different question. 147 00:07:02,600 --> 00:07:05,760 Speaker 4: We've heard various FED presidents j Powell but also Jenn 148 00:07:05,839 --> 00:07:08,600 Speaker 4: you don't talk about the fiscal sustainability of the path 149 00:07:08,640 --> 00:07:10,880 Speaker 4: of the United States is and especially some concern of 150 00:07:10,960 --> 00:07:14,040 Speaker 4: the long term that it's not sustainable. If that's right, 151 00:07:14,520 --> 00:07:17,000 Speaker 4: what are the consequences of that, and what if anything 152 00:07:17,160 --> 00:07:18,880 Speaker 4: can be done about it. 153 00:07:19,120 --> 00:07:22,000 Speaker 5: That's a whole separate topic from the you know, what 154 00:07:22,040 --> 00:07:23,600 Speaker 5: should the ratings of treasuries be. 155 00:07:23,720 --> 00:07:24,240 Speaker 3: For right now? 156 00:07:24,320 --> 00:07:27,400 Speaker 4: But fiction invoked that right in there is an announcement. 157 00:07:27,840 --> 00:07:32,080 Speaker 5: But then the proper question is did something happen in 158 00:07:32,160 --> 00:07:35,320 Speaker 5: the last two weeks that made you think that was different? 159 00:07:36,960 --> 00:07:39,840 Speaker 5: As you know, the FED doesn't weigh in on fiscal policy. 160 00:07:39,920 --> 00:07:43,680 Speaker 5: Congress and the administrations they had to sort that out. 161 00:07:44,040 --> 00:07:46,360 Speaker 5: I think my read of the evidence is exactly what 162 00:07:46,400 --> 00:07:48,920 Speaker 5: you say that the long run there's a fiscal gap 163 00:07:49,000 --> 00:07:52,480 Speaker 5: in the United States. That long run gap smaller in 164 00:07:52,520 --> 00:07:55,240 Speaker 5: the United States than in most of the advanced if 165 00:07:55,240 --> 00:07:58,400 Speaker 5: not all of the advanced economies of the world because 166 00:07:58,440 --> 00:08:01,920 Speaker 5: our demographics are better. It's rooted in the aging of 167 00:08:01,960 --> 00:08:05,880 Speaker 5: the population and social security and medicare and things like that. 168 00:08:06,560 --> 00:08:11,440 Speaker 5: And the US has got some choices that it has 169 00:08:11,480 --> 00:08:14,040 Speaker 5: to make, but gets to make in a way that 170 00:08:14,160 --> 00:08:16,480 Speaker 5: some other countries don't get to make them. They already 171 00:08:16,480 --> 00:08:19,480 Speaker 5: have income tax rates higher than our raids. They already 172 00:08:19,520 --> 00:08:24,600 Speaker 5: have twenty five percent vats, They have worse demographics, their spending. 173 00:08:24,320 --> 00:08:25,200 Speaker 3: Levels already higher. 174 00:08:25,240 --> 00:08:29,400 Speaker 5: To start with those fiscal questions, will they will be 175 00:08:29,520 --> 00:08:33,280 Speaker 5: with us for decades because the baby boomers are going 176 00:08:33,320 --> 00:08:38,440 Speaker 5: to all retire I think, you know, over the next 177 00:08:38,480 --> 00:08:42,440 Speaker 5: couple of decades. That's different from what we're trying to 178 00:08:42,480 --> 00:08:44,760 Speaker 5: do with the FED. You know, our job is we 179 00:08:44,880 --> 00:08:48,120 Speaker 5: accept the economy as it is. We go watch the data, 180 00:08:48,480 --> 00:08:51,200 Speaker 5: and we maximize employment and stabilize prices. 181 00:08:51,240 --> 00:08:52,040 Speaker 3: That's what we're going to do. 182 00:08:52,160 --> 00:08:54,320 Speaker 4: One other development this week, a lot of people took 183 00:08:54,400 --> 00:08:56,840 Speaker 4: noted is Bank of America changed their call and recession. 184 00:08:57,200 --> 00:08:59,160 Speaker 4: They had been predicting recession in the fourth quarter this 185 00:08:59,240 --> 00:09:01,000 Speaker 4: year or the first of the and that sort of 186 00:09:01,000 --> 00:09:03,040 Speaker 4: trails where we heard actually from the FED chair last 187 00:09:03,040 --> 00:09:06,480 Speaker 4: week week that the FED staff now has taken recession 188 00:09:06,480 --> 00:09:07,280 Speaker 4: designs off. 189 00:09:07,200 --> 00:09:08,600 Speaker 3: Take We're going to walk that line. 190 00:09:08,679 --> 00:09:11,000 Speaker 5: That's what I'm telling you, is that golden path, that's 191 00:09:11,040 --> 00:09:12,280 Speaker 5: what we got to stay on. 192 00:09:12,520 --> 00:09:14,640 Speaker 3: Is that where you are is. 193 00:09:15,240 --> 00:09:17,720 Speaker 5: I don't know if it's just what I want or 194 00:09:17,760 --> 00:09:20,640 Speaker 5: if that's where I am, but I feel like we've 195 00:09:20,640 --> 00:09:25,560 Speaker 5: been getting promising numbers on inflation the new months of inflation, 196 00:09:26,040 --> 00:09:29,880 Speaker 5: in core inflation, especially goods and especially housing over the 197 00:09:29,880 --> 00:09:32,719 Speaker 5: next several months. That's what let's keep an eye on. 198 00:09:33,400 --> 00:09:35,800 Speaker 5: That will tell us are we on this golden path 199 00:09:36,000 --> 00:09:38,880 Speaker 5: or not. If we are able to pull us off, 200 00:09:39,200 --> 00:09:42,000 Speaker 5: that will be a triumph. There are many smart people, 201 00:09:42,120 --> 00:09:45,040 Speaker 5: and you've talked to them on the air, who say 202 00:09:45,200 --> 00:09:48,719 Speaker 5: it's impossible. The FED kids, the FED has never been 203 00:09:48,720 --> 00:09:51,680 Speaker 5: able to reduce inflation as much as we're reducing it, 204 00:09:51,920 --> 00:09:55,640 Speaker 5: and we need to now without generating a big increase 205 00:09:55,679 --> 00:09:59,080 Speaker 5: in the unemployment rate and a big recession. And while 206 00:09:59,120 --> 00:10:03,280 Speaker 5: that has history been true, this was a weird business cycle, 207 00:10:04,120 --> 00:10:07,480 Speaker 5: it can be a weird recovery. And I am hopeful 208 00:10:07,520 --> 00:10:09,960 Speaker 5: that we can pull it off, and so far we've 209 00:10:09,960 --> 00:10:12,120 Speaker 5: been doing it. You know, if you look back a year, 210 00:10:12,200 --> 00:10:15,319 Speaker 5: the unemployment rate is not up, and inflation has come 211 00:10:15,360 --> 00:10:15,679 Speaker 5: way down. 212 00:10:15,800 --> 00:10:17,040 Speaker 4: In fact, it came down a little bit. I think 213 00:10:17,040 --> 00:10:19,000 Speaker 4: this month, if anything, can you gotta tell you right 214 00:10:19,120 --> 00:10:20,040 Speaker 4: from what was expected. 215 00:10:20,200 --> 00:10:22,160 Speaker 3: But I'm absolutely clear on this. 216 00:10:22,320 --> 00:10:24,640 Speaker 4: You think that we can get inflation under control with 217 00:10:24,880 --> 00:10:26,280 Speaker 4: unemployment rate in the mid. 218 00:10:26,280 --> 00:10:29,679 Speaker 3: Threes, I don't know if it's exactly the mid threes. 219 00:10:30,760 --> 00:10:33,719 Speaker 5: What my goal and I think that we can pull off, 220 00:10:33,840 --> 00:10:36,599 Speaker 5: and it's what we should try, is to stay on 221 00:10:36,679 --> 00:10:40,160 Speaker 5: a path where you get inflation down and you don't 222 00:10:40,240 --> 00:10:42,520 Speaker 5: have a major recession. And there are a lot of 223 00:10:42,600 --> 00:10:46,320 Speaker 5: people who if you have in your mind this stable 224 00:10:46,480 --> 00:10:54,040 Speaker 5: relationship trade off between unemployment and inflation, that's that the 225 00:10:54,360 --> 00:10:58,480 Speaker 5: golden path is impossible. But if you believe that the 226 00:10:58,640 --> 00:11:01,560 Speaker 5: data have just not been backing that up, we've forgotten 227 00:11:01,720 --> 00:11:05,920 Speaker 5: inflation down a fair amount without increasing the unemployment rate, 228 00:11:06,400 --> 00:11:09,960 Speaker 5: and the job market does need to get into balance. 229 00:11:10,040 --> 00:11:13,280 Speaker 5: We have been in spots where it's been out of 230 00:11:13,400 --> 00:11:17,200 Speaker 5: balance so hot that it's that it's it's not stable. 231 00:11:18,480 --> 00:11:21,480 Speaker 3: But we're we're doing that over these past couple of months. 232 00:11:21,520 --> 00:11:24,360 Speaker 5: You see the quit rate, you see the vacancy rate 233 00:11:25,320 --> 00:11:28,200 Speaker 5: relative to how many unemployed there are and you see 234 00:11:28,240 --> 00:11:30,240 Speaker 5: the jobs numbers pulling more into balance. 235 00:11:30,440 --> 00:11:34,199 Speaker 4: Walk that line, Walk that line. Okay, Austin goes with 236 00:11:34,240 --> 00:11:36,240 Speaker 4: thank you so much. He is the president, of course, 237 00:11:36,320 --> 00:11:37,280 Speaker 4: of the Chicago Fed. 238 00:11:39,120 --> 00:11:42,480 Speaker 6: You're listening to the team Ken's are Live program Bloomberg 239 00:11:42,559 --> 00:11:45,760 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot com, 240 00:11:46,000 --> 00:11:49,120 Speaker 6: the iHeartRadio app and the Bloomberg Business App, or listen 241 00:11:49,240 --> 00:11:51,360 Speaker 6: on demand wherever you get your podcasts. 242 00:11:53,320 --> 00:11:55,199 Speaker 1: Let's get back to the jobs number. You know, we 243 00:11:55,280 --> 00:11:57,319 Speaker 1: had a little bit lighter than expect in terms of 244 00:11:57,320 --> 00:11:59,800 Speaker 1: the total number of jobs built, stronger on the wage side. 245 00:12:00,400 --> 00:12:01,880 Speaker 1: So let's break it down a little bit. We'd like 246 00:12:01,960 --> 00:12:03,920 Speaker 1: to do that on Jobs Day with Tom Gimble. He's 247 00:12:03,960 --> 00:12:07,840 Speaker 1: the CEO at LaSalle Network. Tom, what was your takeaway 248 00:12:07,880 --> 00:12:10,600 Speaker 1: from what we heard this morning from the federal government 249 00:12:10,640 --> 00:12:11,160 Speaker 1: on the jobs? 250 00:12:11,720 --> 00:12:13,199 Speaker 7: Well, first, I've got a bone to pick that I 251 00:12:13,280 --> 00:12:15,080 Speaker 7: was in the office last month or in the studio 252 00:12:15,200 --> 00:12:16,280 Speaker 7: last month, and you weren't. 253 00:12:16,040 --> 00:12:17,760 Speaker 1: There, aid yes, So. 254 00:12:19,240 --> 00:12:21,440 Speaker 7: Just for the record, good, you know what I'm gonna say, 255 00:12:21,720 --> 00:12:25,240 Speaker 7: we have one hundred and eighty seven thousand jobs added. 256 00:12:25,840 --> 00:12:28,760 Speaker 7: I mean, we're kidding ourselves that we say it's not 257 00:12:28,920 --> 00:12:33,800 Speaker 7: a good jobs market. It is a really really strong market. 258 00:12:33,840 --> 00:12:36,360 Speaker 7: I think it sends the right message to both Wall 259 00:12:36,440 --> 00:12:39,439 Speaker 7: Street and Main Street is that the market is still very, 260 00:12:39,600 --> 00:12:41,880 Speaker 7: very healthy. And at the same time, it sends a 261 00:12:41,880 --> 00:12:43,920 Speaker 7: message to the Fed that it's down a little bit 262 00:12:44,000 --> 00:12:46,600 Speaker 7: from where it was. So we'll probably see a little 263 00:12:46,640 --> 00:12:48,920 Speaker 7: bit of a hold at the next rates meeting and 264 00:12:49,720 --> 00:12:50,400 Speaker 7: they won't raise. 265 00:12:51,640 --> 00:12:51,840 Speaker 8: Yeah. 266 00:12:51,960 --> 00:12:54,760 Speaker 9: Interesting. I mean when you look through where the jobs 267 00:12:54,760 --> 00:12:57,839 Speaker 9: are being created, what stood out to you? 268 00:12:58,920 --> 00:13:01,440 Speaker 7: I mean, listen, it's always going to be bigger when 269 00:13:01,480 --> 00:13:03,679 Speaker 7: you're doing when we're in this type of market with 270 00:13:03,800 --> 00:13:07,760 Speaker 7: low unemployment in the services sector, in the hospitality sector, 271 00:13:08,160 --> 00:13:12,079 Speaker 7: and I think we're looking for bad news instead of 272 00:13:12,160 --> 00:13:16,480 Speaker 7: appreciating what's going on. We've got record low unemployment again, 273 00:13:17,040 --> 00:13:20,360 Speaker 7: We've got increase in wages a four tenths of a 274 00:13:20,440 --> 00:13:24,400 Speaker 7: point again, right. We continue to see these really positive 275 00:13:24,480 --> 00:13:27,559 Speaker 7: signs throughout the report, and we're trying to find the 276 00:13:27,760 --> 00:13:30,880 Speaker 7: one thing that might be reason for alarm. We know 277 00:13:31,000 --> 00:13:33,800 Speaker 7: that eventually we're going to hit it a bumpy cycle, 278 00:13:34,200 --> 00:13:36,720 Speaker 7: but we should really enjoy things while they're good. 279 00:13:37,640 --> 00:13:40,360 Speaker 1: So, I mean, what's really good in this one if 280 00:13:40,360 --> 00:13:42,640 Speaker 1: you're a worker, is four point four percent gain and 281 00:13:42,679 --> 00:13:45,400 Speaker 1: wages from the prior year, and that's the second strength 282 00:13:45,440 --> 00:13:48,559 Speaker 1: month we've seen that and it was above all economists 283 00:13:48,640 --> 00:13:51,839 Speaker 1: forecasts who called for a slowdown. So good for the 284 00:13:51,880 --> 00:13:53,079 Speaker 1: workers out there. What's driving that? 285 00:13:53,160 --> 00:13:53,480 Speaker 8: Do you think? 286 00:13:54,280 --> 00:13:56,319 Speaker 7: I think it's inflation, you know, I mean, I think 287 00:13:56,360 --> 00:13:59,439 Speaker 7: this is the problem that we have is that main 288 00:13:59,520 --> 00:14:02,719 Speaker 7: Street does and understand that when wages go up for 289 00:14:02,800 --> 00:14:05,320 Speaker 7: everybody across the board, that the cost of goods are 290 00:14:05,360 --> 00:14:09,679 Speaker 7: going to go up equally, if not exponentially, to cover that. 291 00:14:09,960 --> 00:14:14,079 Speaker 7: And so, you know, I'm not sure if everybody's realized 292 00:14:14,120 --> 00:14:17,360 Speaker 7: that making more money and having things cost more money 293 00:14:17,440 --> 00:14:23,880 Speaker 7: is sometimes a neutral situation. And so there's some lack 294 00:14:23,960 --> 00:14:27,200 Speaker 7: of education that exists with the common person, and I'm 295 00:14:27,240 --> 00:14:30,160 Speaker 7: including myself in that, with all of us that we 296 00:14:30,280 --> 00:14:33,480 Speaker 7: need to understand how the markets work. And what we're 297 00:14:33,520 --> 00:14:36,040 Speaker 7: seeing though, is that companies are still hiring, They're not 298 00:14:36,240 --> 00:14:39,200 Speaker 7: hiring in mass. That's the biggest challenge that we're seeing 299 00:14:39,800 --> 00:14:42,760 Speaker 7: is that in twenty twenty one, in twenty twenty two, 300 00:14:42,840 --> 00:14:45,640 Speaker 7: it was such a rebound from COVID that companies were 301 00:14:45,720 --> 00:14:48,840 Speaker 7: hiring hundreds, if not thousands of people in order to 302 00:14:48,920 --> 00:14:53,400 Speaker 7: take advantage of this recovery from the three month recession 303 00:14:53,440 --> 00:14:56,240 Speaker 7: that existed in twenty twenty because of the pandemic. Now 304 00:14:56,280 --> 00:14:59,480 Speaker 7: we're in a very similar situation to twenty eighteen and 305 00:14:59,520 --> 00:15:03,040 Speaker 7: two thousand nineteen, which is a really good, strong economy. 306 00:15:03,360 --> 00:15:06,360 Speaker 7: But the difference is then we were scrambling for people. 307 00:15:06,680 --> 00:15:09,240 Speaker 7: Now we're not. We've seen people re enter the workforce, 308 00:15:09,280 --> 00:15:11,440 Speaker 7: We've seen a lot of the gig workers transition back, 309 00:15:12,040 --> 00:15:14,400 Speaker 7: and businesses really seems to be healthy. 310 00:15:15,280 --> 00:15:17,360 Speaker 9: What do you make of the fact that every single 311 00:15:17,520 --> 00:15:19,720 Speaker 9: payroll release in the first half of the year has 312 00:15:19,800 --> 00:15:23,600 Speaker 9: been revised lower. Apparently this is the longest streak of 313 00:15:24,600 --> 00:15:29,040 Speaker 9: downward revisions since the global financial crisis. What do you 314 00:15:29,080 --> 00:15:29,400 Speaker 9: think of that? 315 00:15:31,040 --> 00:15:35,160 Speaker 7: I think that it shows that predictions and economists are 316 00:15:35,640 --> 00:15:38,200 Speaker 7: not always right. I think it shows that we have 317 00:15:38,360 --> 00:15:42,880 Speaker 7: to be careful of relying too heavily on what we 318 00:15:43,040 --> 00:15:46,560 Speaker 7: process of information versus the eye test and the smell 319 00:15:46,680 --> 00:15:49,160 Speaker 7: test of what we see on the street, and that 320 00:15:49,400 --> 00:15:54,960 Speaker 7: the revisions are real and legitimate. But at the same time, 321 00:15:55,360 --> 00:15:59,160 Speaker 7: it's not like we're seeing negative jobs reports every month. 322 00:15:59,240 --> 00:16:02,240 Speaker 7: We're still seeing so you know, I think again we're 323 00:16:02,360 --> 00:16:05,680 Speaker 7: looking for for negativity and as I say every month, 324 00:16:06,040 --> 00:16:08,400 Speaker 7: you know, let's stop being chicken little and let's let's 325 00:16:08,480 --> 00:16:10,760 Speaker 7: enjoy the rain and not think the whole sky's falling. 326 00:16:11,240 --> 00:16:14,960 Speaker 1: Yeah all right, Tom, good jobs number, no question about it, 327 00:16:15,280 --> 00:16:17,720 Speaker 1: continues to be. This job mark is just so resilient. 328 00:16:17,720 --> 00:16:21,080 Speaker 1: It's just amazing. Tom Gimble, CEO at LaSalle Network. We 329 00:16:21,240 --> 00:16:23,440 Speaker 1: like talking to Tom every month when we get those 330 00:16:23,680 --> 00:16:24,240 Speaker 1: jobs numbers. 331 00:16:24,480 --> 00:16:27,560 Speaker 6: You're listening to the tape Cat's are live program Bloomberg 332 00:16:27,640 --> 00:16:31,200 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 333 00:16:31,320 --> 00:16:34,480 Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business app. 334 00:16:34,560 --> 00:16:37,360 Speaker 6: You can also listen live on Amazon Alexa from our 335 00:16:37,400 --> 00:16:41,760 Speaker 6: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 336 00:16:42,840 --> 00:16:45,000 Speaker 1: We also love talking to anaag Rana when we've got 337 00:16:45,080 --> 00:16:48,960 Speaker 1: two big tech companies reporting earnings. Ana rog Rana, senior 338 00:16:49,000 --> 00:16:54,000 Speaker 1: tech analysts for Bloomberg Intelligence, joins us here. So, honurrog 339 00:16:54,440 --> 00:16:57,120 Speaker 1: you know we've got Amalon, Amazon, We've got Apple. Let's 340 00:16:57,120 --> 00:17:00,720 Speaker 1: start with Apple. The services was the story here? Is 341 00:17:00,800 --> 00:17:02,760 Speaker 1: that where I should focus or should I focus on 342 00:17:02,800 --> 00:17:05,760 Speaker 1: the fact that you know they're not selling the growth 343 00:17:05,880 --> 00:17:09,040 Speaker 1: rate for you know, iPhones and all that kind of stuff, 344 00:17:09,240 --> 00:17:11,240 Speaker 1: not what it was where should we put the focus. 345 00:17:12,920 --> 00:17:15,160 Speaker 10: So the focus really is for iPhone. As we said 346 00:17:15,359 --> 00:17:17,080 Speaker 10: even in the preview, it's going to be a boring 347 00:17:17,160 --> 00:17:19,159 Speaker 10: quarter because the next one is going to be launched 348 00:17:19,520 --> 00:17:22,120 Speaker 10: in September, which you know should start selling let's say 349 00:17:22,160 --> 00:17:24,960 Speaker 10: sometime in October or November, and that's really what the 350 00:17:25,119 --> 00:17:27,680 Speaker 10: next push for the cycle is going to come from. 351 00:17:28,280 --> 00:17:30,639 Speaker 10: Services growth is actually a good thing because it's a 352 00:17:30,760 --> 00:17:33,560 Speaker 10: much more higher margin business and a much more recurring 353 00:17:33,640 --> 00:17:36,520 Speaker 10: business that we always understand. And it's also once you 354 00:17:36,760 --> 00:17:38,479 Speaker 10: you know, get on iCloud, you're not going to get 355 00:17:38,560 --> 00:17:41,440 Speaker 10: back and try to get your data somewhere else. So 356 00:17:41,600 --> 00:17:45,080 Speaker 10: that's really encouraging that it's still growing in constant currency 357 00:17:45,240 --> 00:17:49,040 Speaker 10: in double digits. Margins are over seventy percent in terms 358 00:17:49,080 --> 00:17:52,320 Speaker 10: of gross margins. So I like it both the product 359 00:17:52,520 --> 00:17:55,040 Speaker 10: has to come back. The product growth has to come back, 360 00:17:55,359 --> 00:17:57,959 Speaker 10: and I think that's just a function of time. It's 361 00:17:58,040 --> 00:17:59,840 Speaker 10: not a question that it's never going to be back, 362 00:18:00,200 --> 00:18:01,960 Speaker 10: just a matter of a quart or two that we 363 00:18:01,960 --> 00:18:04,040 Speaker 10: should see a bounce back in iPhones. 364 00:18:04,560 --> 00:18:08,159 Speaker 9: I feel like we have this consternation every time Apple 365 00:18:08,400 --> 00:18:12,119 Speaker 9: reports that Hey, they haven't introduced a massive amount of 366 00:18:12,240 --> 00:18:18,199 Speaker 9: new exceptional products. They haven't recreated the iPhone enthusiasm. I mean, 367 00:18:18,240 --> 00:18:20,760 Speaker 9: should we just generally get away from that? Should we 368 00:18:20,920 --> 00:18:25,080 Speaker 9: expect them to become much more of a services oriented business. 369 00:18:25,119 --> 00:18:27,639 Speaker 9: I hate to say that, because you know of what 370 00:18:27,760 --> 00:18:28,560 Speaker 9: the iPhone is. 371 00:18:29,920 --> 00:18:32,680 Speaker 10: Yeah, as a financial analyst, that's a very the right 372 00:18:32,720 --> 00:18:34,680 Speaker 10: way to do it. But you know, if I really 373 00:18:34,760 --> 00:18:37,119 Speaker 10: want to get and talk about you know, new zy things, 374 00:18:37,200 --> 00:18:39,920 Speaker 10: then you know, it's always fun to talk about new products. 375 00:18:39,960 --> 00:18:42,560 Speaker 10: But I don't think any new product is going to 376 00:18:42,640 --> 00:18:45,480 Speaker 10: be anywhere close to what the iPhone is to Apple. 377 00:18:45,760 --> 00:18:48,159 Speaker 10: And largely the reason for that is the size of 378 00:18:48,560 --> 00:18:51,480 Speaker 10: the install based the reach of what it does. Even 379 00:18:51,520 --> 00:18:53,240 Speaker 10: if you think about a car, I mean, how many 380 00:18:53,320 --> 00:18:56,119 Speaker 10: units can they sell mixed reality headsets? How many can 381 00:18:56,160 --> 00:18:59,560 Speaker 10: they sell? And the iPhone they sell over two hundred 382 00:18:59,640 --> 00:19:02,800 Speaker 10: million the units a year of five phones. Irrespective of 383 00:19:02,880 --> 00:19:06,000 Speaker 10: the economy, they sell a lot of iPhones and that 384 00:19:06,200 --> 00:19:08,680 Speaker 10: really should and is the most important part of that. 385 00:19:09,320 --> 00:19:12,280 Speaker 1: All right, let's switch gears to our friends in Seattle. 386 00:19:12,359 --> 00:19:16,119 Speaker 1: Amazon really strong quarter, the street really likes what they 387 00:19:16,480 --> 00:19:18,400 Speaker 1: heard last night. What was your takeaway. 388 00:19:19,480 --> 00:19:21,800 Speaker 10: Yeah, I've been smiling since yesterday evening because this is 389 00:19:21,840 --> 00:19:25,119 Speaker 10: really I think, but with the bottom to the cloud 390 00:19:25,160 --> 00:19:27,439 Speaker 10: story that you know, we have been trying to defend 391 00:19:27,480 --> 00:19:28,400 Speaker 10: for almost a year. 392 00:19:28,400 --> 00:19:30,080 Speaker 3: Now that you know, please do not worry. 393 00:19:30,119 --> 00:19:32,040 Speaker 10: It will come back. It will come back. And I 394 00:19:32,160 --> 00:19:34,560 Speaker 10: think they said that maybe the next quarter you will 395 00:19:34,600 --> 00:19:38,440 Speaker 10: see similar growth rates to this year, which is this quarter, 396 00:19:38,480 --> 00:19:40,720 Speaker 10: which is somewhere around twelve percent, and then you know, 397 00:19:40,800 --> 00:19:44,040 Speaker 10: we are really expecting an acceleration going into next year. 398 00:19:44,160 --> 00:19:46,560 Speaker 10: We just put a note out we think next year 399 00:19:46,560 --> 00:19:49,320 Speaker 10: AWS growth is going to be north of twenty percent. 400 00:19:50,280 --> 00:19:53,359 Speaker 10: You know, market consensus still is about fourteen fifteen percent. 401 00:19:53,680 --> 00:19:56,320 Speaker 10: We think we should see as a good rebound not 402 00:19:56,560 --> 00:19:58,480 Speaker 10: just in growth rate, but margins also. 403 00:19:59,119 --> 00:20:03,080 Speaker 9: I'm not sure exactly how many times Amazon mentioned artificial intelligence. 404 00:20:04,400 --> 00:20:08,080 Speaker 9: What do you make of how their mentions of AI 405 00:20:08,359 --> 00:20:11,000 Speaker 9: and generative AI and where that plays out in their business. 406 00:20:11,359 --> 00:20:13,800 Speaker 9: I mean, are you positive on that or do you 407 00:20:13,840 --> 00:20:15,080 Speaker 9: think they're hitting the right tone? 408 00:20:16,440 --> 00:20:18,440 Speaker 10: Yeah, I think I'm goose in the minority because I 409 00:20:18,600 --> 00:20:20,359 Speaker 10: was not there. It was probably the only not the 410 00:20:20,440 --> 00:20:22,480 Speaker 10: only one was saying that, oh no AWS to throw 411 00:20:22,520 --> 00:20:24,639 Speaker 10: behind it, Like I don't believe any of that stuff 412 00:20:24,680 --> 00:20:27,440 Speaker 10: because at the end of the day, AWS controls the 413 00:20:27,600 --> 00:20:30,680 Speaker 10: biggest portion of cloud infrastructure, which is the nuts and 414 00:20:30,760 --> 00:20:34,560 Speaker 10: bolts of what people need to put this particular piece together. 415 00:20:34,840 --> 00:20:37,960 Speaker 10: They may not have a relationship with open EI, but 416 00:20:38,119 --> 00:20:41,080 Speaker 10: that is not everything. If a company needs to develop 417 00:20:41,359 --> 00:20:44,159 Speaker 10: generate AAI product in house where they're going to take 418 00:20:44,200 --> 00:20:47,040 Speaker 10: their own data, not worry about exposing it to any 419 00:20:47,119 --> 00:20:50,920 Speaker 10: other outside large language model or any AI model, They're 420 00:20:50,920 --> 00:20:56,000 Speaker 10: going to build it using cloud infrastructure tools, AWS being 421 00:20:56,040 --> 00:20:57,800 Speaker 10: the leader among them. Now, it's going to take some 422 00:20:57,880 --> 00:21:01,159 Speaker 10: time for this thing to really impact growth, probably two 423 00:21:01,240 --> 00:21:03,760 Speaker 10: to three years, but I really think Amazon is one 424 00:21:03,800 --> 00:21:05,600 Speaker 10: of the biggest beneficiaries of the strength. 425 00:21:06,280 --> 00:21:08,680 Speaker 1: All Right, honurrog Great Stuff has always really appreciate getting 426 00:21:08,680 --> 00:21:10,800 Speaker 1: a few minutes of your time on rog Rana. He's 427 00:21:10,840 --> 00:21:15,639 Speaker 1: a senior tech analyst for Bloomberg Intelligence. Two big heavyweights 428 00:21:15,720 --> 00:21:17,800 Speaker 1: last night, Amazon and Apple a little bit of tail 429 00:21:17,960 --> 00:21:20,960 Speaker 1: of two tapes there. Apple trading off about three percent 430 00:21:21,080 --> 00:21:26,240 Speaker 1: here and Amazon up ten percent. Big big move for Amazon. 431 00:21:26,320 --> 00:21:28,840 Speaker 1: So get skinny on what's happening in the world of 432 00:21:28,880 --> 00:21:29,199 Speaker 1: big tech. 433 00:21:29,240 --> 00:21:32,760 Speaker 6: With the honorrog Rana, you're listening to the team. Ken's 434 00:21:32,760 --> 00:21:35,840 Speaker 6: a our live program, Bloomberg Markets weekdays at ten am 435 00:21:35,920 --> 00:21:39,280 Speaker 6: Eastern on Bloomberg dot com, the iHeartRadio app and the 436 00:21:39,359 --> 00:21:42,360 Speaker 6: Bloomberg Business App, or listen on demand wherever you get 437 00:21:42,400 --> 00:21:43,240 Speaker 6: your podcasts. 438 00:21:44,760 --> 00:21:49,360 Speaker 1: Quincy Crosby, chief Global strategist for LPL Financial. Quincy, thanks 439 00:21:49,400 --> 00:21:52,000 Speaker 1: so much for joining us again again. We had a 440 00:21:52,600 --> 00:21:55,600 Speaker 1: jobs print today. We've got some a lot of inflation 441 00:21:55,680 --> 00:21:58,560 Speaker 1: data points we've seen over the past several weeks. You 442 00:21:58,680 --> 00:22:01,919 Speaker 1: put it all together, what do you expect our Federal 443 00:22:01,960 --> 00:22:04,160 Speaker 1: Reserve to do in the coming months. 444 00:22:06,520 --> 00:22:08,840 Speaker 11: Well, you know, I always like to say that the 445 00:22:08,880 --> 00:22:11,080 Speaker 11: Fed is data dependent, but I think the market is 446 00:22:11,400 --> 00:22:15,240 Speaker 11: more ferociously data dependent than even the Fed. And you know, 447 00:22:15,359 --> 00:22:18,080 Speaker 11: next week we do get the CPI report. They've got 448 00:22:18,200 --> 00:22:21,560 Speaker 11: over forty five days before they have to make a decision. 449 00:22:22,200 --> 00:22:25,080 Speaker 11: But the fact is, I don't think that they are 450 00:22:25,160 --> 00:22:28,800 Speaker 11: going to back down if they feel that inflation remains 451 00:22:28,840 --> 00:22:32,399 Speaker 11: sticky and is not untangling fast enough. I think the 452 00:22:32,480 --> 00:22:35,680 Speaker 11: market makes a mistake that the Fed will somehow say, well, 453 00:22:35,840 --> 00:22:38,480 Speaker 11: let's just pause and wait and see. They're not going 454 00:22:38,520 --> 00:22:41,240 Speaker 11: to wait and see that much. And besides which you know, 455 00:22:41,359 --> 00:22:44,040 Speaker 11: they don't want to get involved in the election season. 456 00:22:44,160 --> 00:22:49,400 Speaker 11: That's something the FED has always try to keep away from. 457 00:22:50,520 --> 00:22:53,439 Speaker 11: But more than that, you know, they're focused on making 458 00:22:53,640 --> 00:22:57,240 Speaker 11: sure that inflation moves in the right direction and doesn't 459 00:22:57,280 --> 00:23:02,040 Speaker 11: have a chance to create another bout of inflation. And 460 00:23:02,160 --> 00:23:05,960 Speaker 11: you mentioned gasoline prices. Granted it's headline, but let's just 461 00:23:06,080 --> 00:23:10,560 Speaker 11: face it. Consumers are very much affected by gasoline prices 462 00:23:10,640 --> 00:23:13,800 Speaker 11: in terms of how they see future inflation, and that's 463 00:23:13,880 --> 00:23:15,400 Speaker 11: something the FED does not want to see. 464 00:23:15,760 --> 00:23:18,840 Speaker 9: Yeah, but isn't that sort of I guess the whole 465 00:23:18,880 --> 00:23:23,359 Speaker 9: idea that the FED can push against Saudi Arabia making 466 00:23:23,440 --> 00:23:27,720 Speaker 9: decisions to extend its you know, production cuts. Isn't it 467 00:23:27,800 --> 00:23:29,520 Speaker 9: just kind of a fallacy that the FED has the 468 00:23:29,600 --> 00:23:34,879 Speaker 9: true ability to control exactly what's happening with oil prices 469 00:23:34,920 --> 00:23:38,160 Speaker 9: And shouldn't companies have been factoring this in, just understanding 470 00:23:38,200 --> 00:23:41,200 Speaker 9: that most of the commentary from energy analysts was that 471 00:23:41,280 --> 00:23:43,040 Speaker 9: oil is probably going to be tight by the end 472 00:23:43,040 --> 00:23:43,359 Speaker 9: of the year. 473 00:23:45,080 --> 00:23:46,120 Speaker 6: Well, yeah, I know, the FED. 474 00:23:46,280 --> 00:23:49,360 Speaker 11: The FED can't. I mean the fact, look, the administration 475 00:23:49,560 --> 00:23:53,080 Speaker 11: couldn't pressure your mind. Went to uh Saudia Radio to 476 00:23:53,119 --> 00:23:56,040 Speaker 11: try to come back with a good deal and you know, 477 00:23:56,280 --> 00:23:59,439 Speaker 11: just the opposite. So they have their own vested in US. 478 00:23:59,520 --> 00:24:00,240 Speaker 8: We know it is. 479 00:24:00,760 --> 00:24:03,480 Speaker 11: It is to get all prices up as much as possible. 480 00:24:03,920 --> 00:24:07,720 Speaker 11: Their budget is huge. They're building cities, they're trying to 481 00:24:08,320 --> 00:24:13,080 Speaker 11: create a landscape post crew to oil, and that requires 482 00:24:13,240 --> 00:24:16,840 Speaker 11: higher all prices. So they you know, the market had 483 00:24:16,920 --> 00:24:21,959 Speaker 11: expected that before today's panel discussion that they're having online, 484 00:24:22,200 --> 00:24:24,120 Speaker 11: that the Satties would come in and say, hey, we're 485 00:24:24,160 --> 00:24:27,400 Speaker 11: going to extend those quote unquote voluntary cuts through September, 486 00:24:27,640 --> 00:24:31,080 Speaker 11: which they did. But what's interesting about this is that 487 00:24:32,440 --> 00:24:36,199 Speaker 11: it didn't work. I mean, when the market was fixated 488 00:24:36,240 --> 00:24:42,040 Speaker 11: and obsessed by recession, it actually made no difference about 489 00:24:42,080 --> 00:24:45,520 Speaker 11: the production cuts, absolutely no difference. So now all of 490 00:24:45,600 --> 00:24:48,000 Speaker 11: a sudden, when you have sort of a light at 491 00:24:48,040 --> 00:24:50,840 Speaker 11: the end of the tunnel in terms of the GDP 492 00:24:51,040 --> 00:24:55,719 Speaker 11: growth in the country, suddenly the question is what about 493 00:24:55,880 --> 00:24:59,680 Speaker 11: those prices? You know what's going to happen. Look, without 494 00:24:59,760 --> 00:25:02,000 Speaker 11: some misogynous shock, it's hard to see that they're going 495 00:25:02,080 --> 00:25:04,800 Speaker 11: to get all prices up to ninety bucks a barrel 496 00:25:04,840 --> 00:25:07,840 Speaker 11: on WTI. But you see that it's already moving up 497 00:25:07,880 --> 00:25:12,800 Speaker 11: above eighty. Little bit, little bit companies do well, American 498 00:25:13,160 --> 00:25:16,680 Speaker 11: all companies do well forty five dollars a barrel. But 499 00:25:16,880 --> 00:25:21,520 Speaker 11: the fact remains for the average American. We know this statistically, 500 00:25:21,880 --> 00:25:25,400 Speaker 11: they may not even drive, they may drive electric vehicles, 501 00:25:25,680 --> 00:25:29,120 Speaker 11: but when they see those prices inching higher the one 502 00:25:29,200 --> 00:25:34,960 Speaker 11: year and especially the three year projections or inflation move higher, 503 00:25:35,000 --> 00:25:37,560 Speaker 11: and here's the other statistic that goes right along with it, 504 00:25:38,200 --> 00:25:43,679 Speaker 11: then they blame the administration, regardless of power, regardless of party. 505 00:25:44,160 --> 00:25:46,680 Speaker 1: All right, Quincy, we've had about eighty percent of the 506 00:25:47,440 --> 00:25:51,000 Speaker 1: S and P five hundred companies report here. Do you 507 00:25:51,040 --> 00:25:52,320 Speaker 1: feel like we're at earnings trough? 508 00:25:52,440 --> 00:25:52,560 Speaker 3: Here? 509 00:25:53,040 --> 00:25:55,280 Speaker 1: How do you think about earnings going forward based upon 510 00:25:55,359 --> 00:25:57,440 Speaker 1: what you've seen so far in this second quarter? 511 00:25:58,320 --> 00:26:00,920 Speaker 11: Well, you know, it's been a just market. It is 512 00:26:00,960 --> 00:26:02,560 Speaker 11: in the market. It has not been a market that 513 00:26:02,720 --> 00:26:05,560 Speaker 11: has you know, given a pass to companies that are missing, 514 00:26:05,680 --> 00:26:10,159 Speaker 11: even missing slightly. They've been punished. But the fact of 515 00:26:10,240 --> 00:26:15,639 Speaker 11: the matter is there's resiliency in the companies, obviously X energy. 516 00:26:16,520 --> 00:26:19,080 Speaker 11: But the fact of the matter is we also see 517 00:26:19,119 --> 00:26:21,520 Speaker 11: that twenty twenty four, we'll see, you know, a nice 518 00:26:22,320 --> 00:26:25,760 Speaker 11: climb higher with the companies. The thing to look for, though, 519 00:26:26,440 --> 00:26:29,359 Speaker 11: to push those prices higher, the share prices higher. Is 520 00:26:29,440 --> 00:26:31,720 Speaker 11: that we also expect to see a pullback in the 521 00:26:31,760 --> 00:26:34,919 Speaker 11: amount of share buybacks, and you know that has been 522 00:26:34,960 --> 00:26:38,000 Speaker 11: a tremendous catalyst for the stock market. 523 00:26:39,200 --> 00:26:41,200 Speaker 9: Quincy talk us through a little bit more on the 524 00:26:41,560 --> 00:26:44,920 Speaker 9: jobs report today. You know, was there was there a 525 00:26:44,960 --> 00:26:49,320 Speaker 9: surprising detail for you to come out of this in 526 00:26:49,440 --> 00:26:50,639 Speaker 9: terms of where we're headed. 527 00:26:53,119 --> 00:26:56,600 Speaker 11: Well, it was interesting to see the unemployment rate come down, right, 528 00:26:56,840 --> 00:27:01,879 Speaker 11: and then to see the wage growth remain quote unquote sticky. 529 00:27:02,320 --> 00:27:04,800 Speaker 11: The Fed doesn't want to see that, And why that's 530 00:27:04,840 --> 00:27:09,120 Speaker 11: so important is there is a political tug of war 531 00:27:09,240 --> 00:27:13,280 Speaker 11: about it. You can see it in the part of 532 00:27:13,320 --> 00:27:16,040 Speaker 11: the political parties, but you also see it on Wall Street. 533 00:27:16,400 --> 00:27:19,480 Speaker 11: Why does that bother the Fed? Why does that bother 534 00:27:19,960 --> 00:27:24,280 Speaker 11: Chairman Powell specifically? Why can't he be happy about the 535 00:27:24,400 --> 00:27:28,080 Speaker 11: higher wages because they're going to low wage earners. And 536 00:27:28,560 --> 00:27:33,760 Speaker 11: the fact is the concern from completely a political perspective 537 00:27:33,880 --> 00:27:38,040 Speaker 11: is companies want to pass along those costs once the 538 00:27:38,160 --> 00:27:41,040 Speaker 11: wages are higher. It is an input cost and it 539 00:27:41,160 --> 00:27:44,760 Speaker 11: is one of the most important input costs for companies. 540 00:27:45,200 --> 00:27:48,960 Speaker 11: So it hasn't leveled off. Everyone was expecting three tenths 541 00:27:49,119 --> 00:27:52,159 Speaker 11: of a percent. It's stay at four tenths of percent. 542 00:27:52,720 --> 00:27:56,200 Speaker 11: That is what was so surprising, the expectations and the 543 00:27:56,320 --> 00:27:59,280 Speaker 11: hopes or let that come down. And boy will we 544 00:27:59,440 --> 00:28:03,159 Speaker 11: celebrate because that I think the market felt that'll clinch it. 545 00:28:03,440 --> 00:28:07,480 Speaker 1: The Fed is finished, all right, Quincy, given that backdob 546 00:28:07,520 --> 00:28:09,399 Speaker 1: as it relates to interest rates, that backdob as it 547 00:28:09,440 --> 00:28:11,560 Speaker 1: relates to some of the economic conditions out there. And 548 00:28:11,640 --> 00:28:15,680 Speaker 1: we had mister Goolsby from the FED talk to David 549 00:28:15,720 --> 00:28:18,600 Speaker 1: Weston today from Bloomberg saying that they're trying to walk 550 00:28:18,680 --> 00:28:21,720 Speaker 1: that fine line of keeping inflation in check while not 551 00:28:21,800 --> 00:28:25,360 Speaker 1: push his economy into recession. Given all that background, I've 552 00:28:25,359 --> 00:28:27,840 Speaker 1: got a market that's doing great this year. The S 553 00:28:27,880 --> 00:28:30,440 Speaker 1: and P five hundreds up about eighteen percent, the nastacs 554 00:28:30,520 --> 00:28:33,480 Speaker 1: up about thirty four percent. How much more do we 555 00:28:33,600 --> 00:28:35,840 Speaker 1: have to go here? Should I be jumping in here? 556 00:28:35,920 --> 00:28:36,520 Speaker 1: What's your call? 557 00:28:38,000 --> 00:28:38,920 Speaker 8: Well, you know, in. 558 00:28:39,040 --> 00:28:43,240 Speaker 11: Terms of seasonality, unless there's a surprise and this turns 559 00:28:43,280 --> 00:28:45,320 Speaker 11: out to be a good good season as opposed to 560 00:28:46,120 --> 00:28:50,600 Speaker 11: shopping and dicey, how many catalysts are there right now? 561 00:28:50,720 --> 00:28:54,280 Speaker 11: Maybe next week the CPI report could be a tremendous 562 00:28:54,360 --> 00:28:58,160 Speaker 11: catalyst to push this market up despite the negative seasonality. 563 00:28:58,520 --> 00:29:01,680 Speaker 11: So if we start to see that core come down, 564 00:29:02,120 --> 00:29:05,360 Speaker 11: I think it could be again a catalyst to keep 565 00:29:05,400 --> 00:29:09,520 Speaker 11: the market moving higher. But earnings are an important catalyst. 566 00:29:09,920 --> 00:29:13,760 Speaker 11: And obviously we're going to get the a retail picture 567 00:29:13,800 --> 00:29:17,720 Speaker 11: about the US consumer with the consumer consumer names. But 568 00:29:18,200 --> 00:29:22,200 Speaker 11: remember it has been led by the big tech. That's 569 00:29:22,280 --> 00:29:25,840 Speaker 11: what started all of this, the big tech megateech led. 570 00:29:26,040 --> 00:29:28,240 Speaker 11: So maybe you have to wait until August twenty third 571 00:29:28,320 --> 00:29:30,800 Speaker 11: for the video to come out. That was the one 572 00:29:31,760 --> 00:29:36,280 Speaker 11: that was the one performance. It was a triple play right, 573 00:29:37,000 --> 00:29:40,800 Speaker 11: revenue growth, bottom line, the guidance was stupendous, and what 574 00:29:40,960 --> 00:29:45,360 Speaker 11: it did was it confirmed that high move in the 575 00:29:45,440 --> 00:29:49,200 Speaker 11: meg tech anything associated with artificial intelligence. They're coming out 576 00:29:49,240 --> 00:29:51,800 Speaker 11: on August twenty third. The market may have to wait 577 00:29:51,880 --> 00:29:54,840 Speaker 11: for that. But overall, if we could see that core 578 00:29:55,280 --> 00:29:59,560 Speaker 11: super core inflation coming down at a quicker pace that 579 00:30:00,080 --> 00:30:03,920 Speaker 11: tangled the stickiness, that'll be a tremendous catalyst for the market, 580 00:30:04,000 --> 00:30:05,400 Speaker 11: regardless of season reality. 581 00:30:05,600 --> 00:30:09,479 Speaker 1: All right, appreciate that. Quincy Crosby, Chief Global Strategist lp 582 00:30:09,680 --> 00:30:11,880 Speaker 1: L Financial always appreciate Gett Quincy's perspective. 583 00:30:11,880 --> 00:30:16,480 Speaker 6: Here you're listening to the tape cansur live program Bloomberg 584 00:30:16,600 --> 00:30:20,160 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 585 00:30:20,240 --> 00:30:23,440 Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 586 00:30:23,520 --> 00:30:26,280 Speaker 6: You can also listen live on Amazon Alexa from our 587 00:30:26,360 --> 00:30:31,000 Speaker 6: flagship New York station, Just Say Alexa, playing Bloomberg eleven thirty. 588 00:30:31,720 --> 00:30:34,120 Speaker 1: Looking at the risk on a take in the market today. 589 00:30:34,160 --> 00:30:36,040 Speaker 1: I'm going to describe some of the moves today, some 590 00:30:36,200 --> 00:30:40,320 Speaker 1: of it potentially to the comments from Austin Goldsby, President 591 00:30:40,320 --> 00:30:42,760 Speaker 1: of the Federal Reserve Bank of Chicago. Hughes was interviewed 592 00:30:42,800 --> 00:30:46,320 Speaker 1: by Bloomberg's David Weston earlier at in Aspen, Colorado, which 593 00:30:46,360 --> 00:30:48,360 Speaker 1: is a scam in and of itself. I'll get to 594 00:30:48,400 --> 00:30:52,400 Speaker 1: it later, but Ike said he feels that the Federal 595 00:30:52,440 --> 00:30:56,000 Speaker 1: Reserve is making some headway, having some success of walking 596 00:30:56,040 --> 00:31:00,320 Speaker 1: that fine line between fighting inflation without pushing the me 597 00:31:00,480 --> 00:31:03,200 Speaker 1: into a recession. So maybe that's how anything's apple. Let's 598 00:31:03,280 --> 00:31:05,360 Speaker 1: check in with somebody who does this stuff for a living. 599 00:31:05,440 --> 00:31:09,880 Speaker 1: Jonathan Hurdle. He's executive chairman. Hurdle, Callahan and Company founded 600 00:31:09,920 --> 00:31:12,080 Speaker 1: that company back in eighty eight was a Goldman Sachs 601 00:31:12,160 --> 00:31:15,120 Speaker 1: before there was an officer in the US Marine Corps 602 00:31:15,120 --> 00:31:17,440 Speaker 1: from nineteen seventy five to nineteen eighty two. So we 603 00:31:17,880 --> 00:31:19,880 Speaker 1: certainly thank him for service there. But for me, the 604 00:31:19,960 --> 00:31:24,360 Speaker 1: highlight is the NBA from Penn State. Good stuff there. Hey, John, 605 00:31:24,680 --> 00:31:27,640 Speaker 1: you're out in Wyoming. Why I don't know, but you're 606 00:31:27,680 --> 00:31:30,480 Speaker 1: out in Wyoming. Yeah, you're wearing a guard but like 607 00:31:30,800 --> 00:31:33,080 Speaker 1: you'd wear on Wall Street. Dude, you got this nice 608 00:31:33,120 --> 00:31:35,960 Speaker 1: shirt this tie. Is that a little formal for Wyoming? 609 00:31:37,760 --> 00:31:39,880 Speaker 12: It is a little formal for Wyoming. But we're managing 610 00:31:39,920 --> 00:31:42,080 Speaker 12: twenty billion dollars and we need to pay attention wherever 611 00:31:42,120 --> 00:31:42,320 Speaker 12: we are. 612 00:31:42,520 --> 00:31:45,280 Speaker 1: That's what I like to hear. Very good. So Jonathan morning, 613 00:31:45,800 --> 00:31:48,520 Speaker 1: Good morning, sir. How do you feel about this market? 614 00:31:48,600 --> 00:31:50,520 Speaker 1: Cause we're looking at the S and P up seventeen 615 00:31:50,600 --> 00:31:54,680 Speaker 1: eighteen percent, we've got the NASDAC up thirty four to 616 00:31:54,760 --> 00:31:57,240 Speaker 1: thirty five, and boy if that's been a heck of 617 00:31:57,280 --> 00:32:00,040 Speaker 1: a run off of a terrible twenty twenty two. What 618 00:32:00,080 --> 00:32:01,440 Speaker 1: are you telling your clients these days? 619 00:32:03,080 --> 00:32:05,080 Speaker 12: Well, it's pretty much a stady as she goes kind 620 00:32:05,080 --> 00:32:09,959 Speaker 12: of a market here. We have negotiated as that Austin 621 00:32:10,040 --> 00:32:11,880 Speaker 12: Goldsby has said, you know, we're sort of on a 622 00:32:11,920 --> 00:32:14,680 Speaker 12: golden path. You just mentioned his name. So we've been 623 00:32:14,720 --> 00:32:19,400 Speaker 12: able to avoid a recession. Inflation is coming down, wage 624 00:32:19,480 --> 00:32:22,200 Speaker 12: growth is increasing, but not so much to be a problem. 625 00:32:22,720 --> 00:32:27,920 Speaker 12: So it is, you know, amazingly positive all the things 626 00:32:27,960 --> 00:32:31,000 Speaker 12: that are coming together here. And you know, the United 627 00:32:31,040 --> 00:32:33,520 Speaker 12: States is doing better than the rest of the world. 628 00:32:33,600 --> 00:32:37,320 Speaker 12: This free enterprise thing seems to be working. And you know, 629 00:32:37,400 --> 00:32:40,480 Speaker 12: we've got terrific managers in this country. See, we just 630 00:32:40,560 --> 00:32:43,520 Speaker 12: heard on the newsburg on the Bloomberg Business Flash that 631 00:32:43,640 --> 00:32:47,440 Speaker 12: eighty percent of reported earnings have surprised, either met or 632 00:32:47,480 --> 00:32:50,240 Speaker 12: surprised on a positive side. So good things are happening. 633 00:32:51,160 --> 00:32:53,480 Speaker 12: The excesses that we worried about don't seem to be 634 00:32:53,560 --> 00:32:57,360 Speaker 12: coming through. So it's it's just everything's working right now. 635 00:32:58,040 --> 00:33:01,520 Speaker 9: Well, we're seeing, you know, continue added jobs every time 636 00:33:01,600 --> 00:33:04,320 Speaker 9: we get a job's report number. We're seeing that those 637 00:33:04,400 --> 00:33:09,200 Speaker 9: bright spots for corporate earnings are things too good. I mean, 638 00:33:09,320 --> 00:33:13,120 Speaker 9: is this going to push the Federal Reserve to continue 639 00:33:13,320 --> 00:33:16,720 Speaker 9: to raise interest rates maybe more than we had and 640 00:33:17,000 --> 00:33:19,479 Speaker 9: then the market even is anticipating. 641 00:33:20,360 --> 00:33:23,000 Speaker 12: Well, good morning, simone. My sense is you know, you 642 00:33:23,080 --> 00:33:26,000 Speaker 12: see the tenure coming down ten basis points today and 643 00:33:26,120 --> 00:33:29,320 Speaker 12: that the jobs report has taken a touch of pressure 644 00:33:29,400 --> 00:33:32,680 Speaker 12: off the Feds need to raise rates. But even if 645 00:33:32,680 --> 00:33:35,160 Speaker 12: they do raise rates, I think it doesn't matter at 646 00:33:35,200 --> 00:33:37,640 Speaker 12: this point. We've got a picture in place. What we 647 00:33:37,760 --> 00:33:39,880 Speaker 12: need to worry about. I mean, what we're worrying about 648 00:33:39,960 --> 00:33:42,640 Speaker 12: is the things we always worry about, like exogynous risks. 649 00:33:43,800 --> 00:33:49,000 Speaker 12: But the actual fundamentals of the market are sound and positive. 650 00:33:49,800 --> 00:33:52,920 Speaker 12: You know that we do have a high price earnings 651 00:33:53,000 --> 00:33:57,360 Speaker 12: multiple on the market relative to averages. But my sense 652 00:33:57,480 --> 00:34:01,360 Speaker 12: is this is another another signal from the market that 653 00:34:01,480 --> 00:34:03,560 Speaker 12: we think we're going to have long term interest rates 654 00:34:03,640 --> 00:34:07,560 Speaker 12: coming down. So you know, the tenure treasury we still 655 00:34:07,600 --> 00:34:10,600 Speaker 12: have an inverted yield curve, but the real return on 656 00:34:10,680 --> 00:34:14,480 Speaker 12: the tenure treasury is not particularly high, and so that 657 00:34:14,600 --> 00:34:17,320 Speaker 12: tells us over the long run, and also another the 658 00:34:17,440 --> 00:34:19,680 Speaker 12: thing is this inverted yield curve. One of the things 659 00:34:19,719 --> 00:34:23,960 Speaker 12: that tells us is that the long term rates we 660 00:34:24,080 --> 00:34:26,719 Speaker 12: still think are low, but short term we have policy 661 00:34:26,840 --> 00:34:29,879 Speaker 12: things going on that might raise rates. So this notion 662 00:34:30,239 --> 00:34:33,360 Speaker 12: that we've got we're sort of in this sweet spot continues. 663 00:34:33,640 --> 00:34:37,120 Speaker 12: So you know, it is true that it's like we're 664 00:34:37,120 --> 00:34:39,920 Speaker 12: all neurotic. So if things are good, we were there 665 00:34:39,960 --> 00:34:41,880 Speaker 12: too good, and things are bad we hate that. So 666 00:34:42,040 --> 00:34:44,120 Speaker 12: but we're we're in sort of a sweet spot here 667 00:34:44,719 --> 00:34:47,720 Speaker 12: where everything seems to be working. We're walking that line. 668 00:34:48,000 --> 00:34:50,600 Speaker 12: And we have to give credit to corporate managers because 669 00:34:51,200 --> 00:34:53,680 Speaker 12: our way of thinking is that, you know, it's always 670 00:34:53,719 --> 00:34:57,040 Speaker 12: about buying future cash flows and that comes from earnings. 671 00:34:58,200 --> 00:35:01,080 Speaker 12: Another thing that's really a positive impact over the last 672 00:35:01,360 --> 00:35:03,640 Speaker 12: relative of the last ten years is you know, for 673 00:35:03,719 --> 00:35:06,440 Speaker 12: the first thirty years of my career, we had real 674 00:35:07,040 --> 00:35:07,880 Speaker 12: bond yields to. 675 00:35:07,920 --> 00:35:08,520 Speaker 3: Work with you. 676 00:35:08,680 --> 00:35:10,759 Speaker 12: Bonds were an important part of the portfolio. For the 677 00:35:10,840 --> 00:35:14,000 Speaker 12: last ten years that has generally not been true. But 678 00:35:14,239 --> 00:35:16,480 Speaker 12: right now we're starting to get real yields again in 679 00:35:16,560 --> 00:35:19,560 Speaker 12: the bonds, in bonds and even money market funds. So 680 00:35:19,680 --> 00:35:22,200 Speaker 12: that's a terrific tool to have back in our toolbox. 681 00:35:23,160 --> 00:35:26,920 Speaker 1: So John, you know, if I sit in to your treasury, 682 00:35:27,000 --> 00:35:29,160 Speaker 1: I can get four point eight one percent. That seems 683 00:35:29,239 --> 00:35:32,120 Speaker 1: pretty good. But I feel like it might be the 684 00:35:32,320 --> 00:35:34,840 Speaker 1: time to maybe go out on the curve a little bit, 685 00:35:34,880 --> 00:35:37,080 Speaker 1: maybe get some more duration. Should I do that or 686 00:35:37,080 --> 00:35:39,360 Speaker 1: should I just sit comfortably with my two year. 687 00:35:41,360 --> 00:35:43,440 Speaker 12: Little of each In other words, you know, one of 688 00:35:43,480 --> 00:35:45,960 Speaker 12: the things we really believe is you can't predict, you 689 00:35:46,000 --> 00:35:48,640 Speaker 12: can only prepare. So when you have a two year 690 00:35:48,719 --> 00:35:52,239 Speaker 12: treasury yielding almost five percent, why not. And on the 691 00:35:52,320 --> 00:35:55,840 Speaker 12: other hand, if you are if you have a full duration. 692 00:35:55,960 --> 00:35:59,000 Speaker 12: We're a little bit under duration on our bond portfolios today, 693 00:35:59,520 --> 00:36:02,840 Speaker 12: but we've been adding duration as interest rates go higher. 694 00:36:03,320 --> 00:36:05,640 Speaker 12: If you do have a pullback, this is what it means. 695 00:36:05,719 --> 00:36:08,120 Speaker 12: We can't predict this, No one can predict it. But 696 00:36:08,200 --> 00:36:10,759 Speaker 12: if you did have a pullback, then having that and 697 00:36:10,920 --> 00:36:14,839 Speaker 12: interest rates fell, then those having longer duration would give 698 00:36:14,880 --> 00:36:17,000 Speaker 12: you some protection against a pullback in the market, in 699 00:36:17,040 --> 00:36:19,840 Speaker 12: the stock market. And you know, meanwhile you're picking up 700 00:36:19,880 --> 00:36:22,680 Speaker 12: that coupon. So it's a little bit of each you know, 701 00:36:22,840 --> 00:36:25,239 Speaker 12: find the most compelling things you can do, find and 702 00:36:25,280 --> 00:36:26,600 Speaker 12: then believe each one a little bit. 703 00:36:27,400 --> 00:36:29,680 Speaker 9: Yeah, what's the top acid class in what you're adding 704 00:36:29,719 --> 00:36:33,600 Speaker 9: your marginal dollar at this point, Well. 705 00:36:33,440 --> 00:36:39,800 Speaker 12: We're overweight US, and we're overweight things like healthcare equipment 706 00:36:40,640 --> 00:36:44,680 Speaker 12: and the you know, technology stocks is a consumer facing 707 00:36:44,800 --> 00:36:50,759 Speaker 12: technology stocks and software. So you know, we're really continuing 708 00:36:50,840 --> 00:36:55,120 Speaker 12: to focus on these companies that have strong market share, 709 00:36:55,600 --> 00:36:58,600 Speaker 12: strong balance sheets and moats around them to keep them 710 00:36:58,640 --> 00:37:03,239 Speaker 12: protect them from protecting competition. So that's still we know 711 00:37:03,400 --> 00:37:07,640 Speaker 12: our portfolio is overweight US and overweight that sector marginal 712 00:37:07,719 --> 00:37:11,319 Speaker 12: dollar comes in. We're still doing that, John, also are 713 00:37:11,360 --> 00:37:14,120 Speaker 12: looking for that's the core portfolio. And then on top 714 00:37:14,200 --> 00:37:16,680 Speaker 12: of that, of course, we're always looking for opportunistic things, 715 00:37:17,040 --> 00:37:20,320 Speaker 12: for example like private credit, which is a whole nother discussion, 716 00:37:20,400 --> 00:37:23,680 Speaker 12: and it really matters what segment you're in, which managers are. 717 00:37:23,680 --> 00:37:24,520 Speaker 3: Using, and so forth. 718 00:37:25,120 --> 00:37:27,080 Speaker 1: John, it looks like a beautiful day out there in Wyoming. 719 00:37:27,280 --> 00:37:30,240 Speaker 1: How are our friends out there in Wyoming having good summer? 720 00:37:32,239 --> 00:37:35,080 Speaker 12: Everything's good. It's you know, my friends in the East 721 00:37:35,080 --> 00:37:37,080 Speaker 12: are worried about hot and humid, and it's not hot 722 00:37:37,120 --> 00:37:39,840 Speaker 12: and humid here. And you know, we've got the Jackson 723 00:37:39,920 --> 00:37:42,640 Speaker 12: Hole fed meeting them enough. But I think it's going 724 00:37:42,719 --> 00:37:45,680 Speaker 12: to be a relatively sort of a non event compared 725 00:37:45,719 --> 00:37:49,120 Speaker 12: to recent years, which where it's been so dramatically important. 726 00:37:49,440 --> 00:37:51,680 Speaker 1: Right, Hey, John, thanks for taking a few minutes. We 727 00:37:51,719 --> 00:37:55,000 Speaker 1: always appreciate getting your thoughts and your perspective. Jonathan Hurdle, 728 00:37:55,080 --> 00:37:57,960 Speaker 1: he's the executive chairman of hurdle Callahan and Company coming 729 00:37:58,040 --> 00:38:01,920 Speaker 1: to us from beautiful Wyoming out there, so good for them. 730 00:38:02,280 --> 00:38:05,360 Speaker 6: You're listening to the tape. Catch our live program Bloomberg 731 00:38:05,480 --> 00:38:09,040 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 732 00:38:09,120 --> 00:38:12,319 Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 733 00:38:12,400 --> 00:38:15,160 Speaker 6: You can also listen live on Amazon Alexa from our 734 00:38:15,239 --> 00:38:19,880 Speaker 6: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 735 00:38:21,320 --> 00:38:24,120 Speaker 1: Again. Payroll Day, Jobs Day today. I think it was 736 00:38:24,160 --> 00:38:27,120 Speaker 1: a solid number all around. The thing that jumped out 737 00:38:27,120 --> 00:38:30,680 Speaker 1: of me was average hourly earnings. It's pretty darn healthy 738 00:38:30,719 --> 00:38:33,200 Speaker 1: of four point four percent, kind of consistent with last month. 739 00:38:33,880 --> 00:38:36,120 Speaker 1: I'll take that. I wonder if our next guest is 740 00:38:36,200 --> 00:38:39,480 Speaker 1: with me here, Jeffrey Cleveland, director and chief economis at 741 00:38:39,520 --> 00:38:42,480 Speaker 1: Payden Andrigo. Jeffrey, I love to get your takeaway from 742 00:38:42,480 --> 00:38:46,240 Speaker 1: what we saw on the labor front, and maybe more importantly, 743 00:38:46,320 --> 00:38:50,000 Speaker 1: how our federal Reserve is going to view this number well. 744 00:38:50,000 --> 00:38:53,160 Speaker 13: I think this is a very soft landing, like soft 745 00:38:53,280 --> 00:38:54,880 Speaker 13: landing ish. I don't know if we can use that 746 00:38:55,040 --> 00:38:59,359 Speaker 13: term type report. Yep, you had solid payroll growth. Of course, 747 00:38:59,400 --> 00:39:02,040 Speaker 13: payrolls have been slowing over the last year. Everyone knows that, 748 00:39:02,200 --> 00:39:05,640 Speaker 13: but the three month average is still two eighteen, which 749 00:39:05,960 --> 00:39:08,720 Speaker 13: at any other era we would say is is stellar 750 00:39:08,840 --> 00:39:12,800 Speaker 13: job growth. So that's that's very good. The one drag 751 00:39:13,000 --> 00:39:16,320 Speaker 13: or one sector that's been problematic is also one that 752 00:39:16,360 --> 00:39:20,960 Speaker 13: everyone knows information to the technology type sector, so that's 753 00:39:21,000 --> 00:39:24,040 Speaker 13: well known. Everything else, we're seeing pretty broad based gains 754 00:39:24,080 --> 00:39:28,200 Speaker 13: in unemployment. The unemployment rate is still low. I think 755 00:39:28,239 --> 00:39:31,640 Speaker 13: we're just above the cycle low at three and a 756 00:39:31,680 --> 00:39:34,840 Speaker 13: half percent. So this is the part I find most amusing, 757 00:39:35,360 --> 00:39:39,640 Speaker 13: where the Fed has been hiking. It's an historic hiking cycle, 758 00:39:39,719 --> 00:39:43,440 Speaker 13: the most rapid hiking cycle since in forty years, and 759 00:39:44,120 --> 00:39:47,239 Speaker 13: the unemployment rate is below where it was when the 760 00:39:47,360 --> 00:39:48,320 Speaker 13: hiking cycle began. 761 00:39:49,160 --> 00:39:52,400 Speaker 9: So I like you point out that job leavers as 762 00:39:52,440 --> 00:39:55,919 Speaker 9: a percentage of total unemployed in July's employment report rose 763 00:39:55,960 --> 00:39:58,120 Speaker 9: to fourteen point six percent. You sent us some notes 764 00:39:58,160 --> 00:40:00,960 Speaker 9: across earlier. That's like a high. 765 00:40:02,320 --> 00:40:02,600 Speaker 8: You know that. 766 00:40:02,760 --> 00:40:05,399 Speaker 9: I mean that that is even a stronger data point 767 00:40:05,560 --> 00:40:08,640 Speaker 9: for this report than the overall headline number, which I 768 00:40:08,680 --> 00:40:12,879 Speaker 9: guess missed analysts estimates generally. Why is this, I guess 769 00:40:13,040 --> 00:40:16,680 Speaker 9: just not a bullish Let's go get them kind of 770 00:40:16,800 --> 00:40:20,120 Speaker 9: sign it seems, you know, if we're seeing this soft 771 00:40:20,239 --> 00:40:22,839 Speaker 9: landing picture, then it suggests that at least the FED 772 00:40:22,960 --> 00:40:25,680 Speaker 9: is gonna kind of stay back on the sidelines. 773 00:40:26,440 --> 00:40:28,800 Speaker 13: Well, I think that's the important of the soft landing, 774 00:40:29,520 --> 00:40:32,719 Speaker 13: you know, story, it's it's not just semantics. It is 775 00:40:33,680 --> 00:40:36,480 Speaker 13: a indication if the soft line is playing out, then 776 00:40:36,520 --> 00:40:38,440 Speaker 13: then maybe the FED doesn't have a lot more to do. 777 00:40:39,200 --> 00:40:41,560 Speaker 13: And I think you see that today. The equity market 778 00:40:41,640 --> 00:40:44,000 Speaker 13: loves that. The bond market will love that as well. 779 00:40:44,080 --> 00:40:46,680 Speaker 13: I talked to bond traders every day. They would they 780 00:40:46,719 --> 00:40:49,440 Speaker 13: would love it if the FED is done. So if 781 00:40:49,719 --> 00:40:52,160 Speaker 13: we are on the soft landing, then yeah, then arguably 782 00:40:52,400 --> 00:40:53,359 Speaker 13: the FED is done. 783 00:40:53,760 --> 00:40:56,640 Speaker 9: Yeah, but I just think, yeah, sorry, go on, No, 784 00:40:56,840 --> 00:40:58,400 Speaker 9: I mean you you bring up the. 785 00:40:58,640 --> 00:41:01,560 Speaker 13: Kind of an important issue is that maybe this job 786 00:41:01,600 --> 00:41:04,560 Speaker 13: market is even stronger than this report suggests. When you 787 00:41:04,640 --> 00:41:08,000 Speaker 13: dig into the internals of the report, still some great 788 00:41:08,080 --> 00:41:11,279 Speaker 13: signs that could be that will have continued growth, the 789 00:41:11,360 --> 00:41:14,800 Speaker 13: unemployment rate will go even further, wage growth will remain 790 00:41:15,360 --> 00:41:18,560 Speaker 13: four to five percent, And I think in that environment 791 00:41:18,600 --> 00:41:21,960 Speaker 13: the FED might not be as pleased as the markets 792 00:41:21,960 --> 00:41:25,520 Speaker 13: are today with the report. That could be a situation 793 00:41:25,640 --> 00:41:27,840 Speaker 13: where you have a no landing type scenario where the 794 00:41:27,880 --> 00:41:31,719 Speaker 13: economy is still above trend, low unemployment, solid wage growth, 795 00:41:31,760 --> 00:41:34,840 Speaker 13: and inflation is too high it's above two percent. The 796 00:41:34,920 --> 00:41:37,560 Speaker 13: FED probably has more to do in that case. In 797 00:41:37,680 --> 00:41:40,040 Speaker 13: that environment, So I think that's still a real risk 798 00:41:40,160 --> 00:41:44,320 Speaker 13: that scenario. But right now everyone seems to be golming 799 00:41:44,400 --> 00:41:45,759 Speaker 13: on to the soft landing. 800 00:41:46,440 --> 00:41:48,720 Speaker 1: So are we taking recession off the table? 801 00:41:50,520 --> 00:41:52,839 Speaker 13: Yeah, we took it off the table a while ago. 802 00:41:53,160 --> 00:41:55,960 Speaker 13: You know, we thought after SVB that there was the 803 00:41:56,120 --> 00:41:59,000 Speaker 13: risk that credit was going to contract more significantly. That 804 00:41:59,160 --> 00:42:02,200 Speaker 13: hasn't played out. I was just looking at the lending 805 00:42:02,280 --> 00:42:06,200 Speaker 13: data in the weekly FED data. I mean, lending growth 806 00:42:06,280 --> 00:42:09,680 Speaker 13: has slowed, but it is still up five percent roughly 807 00:42:09,880 --> 00:42:12,320 Speaker 13: year over year. So we have not seen a collapsing 808 00:42:12,400 --> 00:42:18,160 Speaker 13: credit borrowing A discount window has completely evaporator gone down, 809 00:42:18,560 --> 00:42:20,320 Speaker 13: so the stress in the banking system has gone. So 810 00:42:20,680 --> 00:42:24,600 Speaker 13: the hard landing recession is imminent type stories that we're 811 00:42:24,640 --> 00:42:27,560 Speaker 13: out there. I think those are gone for the time being, 812 00:42:27,719 --> 00:42:31,160 Speaker 13: so you have to push out your timing for a recession. 813 00:42:31,239 --> 00:42:33,760 Speaker 13: We have the US economy growing more than two percent 814 00:42:33,880 --> 00:42:36,080 Speaker 13: this year in our forecast now quartered on a Q 815 00:42:36,200 --> 00:42:38,080 Speaker 13: four to Q four basis. So I know that's a 816 00:42:38,120 --> 00:42:42,200 Speaker 13: little bit more bullish than the Bloomberg terminals suggests the consensus. 817 00:42:42,280 --> 00:42:45,000 Speaker 13: But that's where we see things here, and today's jobs 818 00:42:45,040 --> 00:42:47,080 Speaker 13: report I think doesn't change that view at all. 819 00:42:47,840 --> 00:42:50,520 Speaker 9: Wow, that's so interesting two percent growth here on your 820 00:42:50,760 --> 00:42:54,920 Speaker 9: I mean, if the two options here are no landing 821 00:42:55,440 --> 00:42:58,279 Speaker 9: or soft landing, what's the kind of timeline that we 822 00:42:58,360 --> 00:42:59,120 Speaker 9: see them play out? 823 00:43:00,920 --> 00:43:03,040 Speaker 13: Well, when I think about this, I'm always talking about 824 00:43:03,040 --> 00:43:05,280 Speaker 13: the next six months, the next six to twelve months, 825 00:43:05,760 --> 00:43:08,120 Speaker 13: so that that will carry us into middle of next year. 826 00:43:09,000 --> 00:43:12,400 Speaker 13: I realize for some investors, some viewers, you don't want that. 827 00:43:12,560 --> 00:43:14,040 Speaker 13: You want to know the next three to five years, 828 00:43:14,080 --> 00:43:16,560 Speaker 13: but nobody could provide that. So just trying to be real, 829 00:43:16,840 --> 00:43:19,440 Speaker 13: be realistic. It's you know, I was talking to one 830 00:43:19,480 --> 00:43:22,440 Speaker 13: of my colleagues yesterday, it's it's quite interesting you if 831 00:43:22,480 --> 00:43:24,600 Speaker 13: you have for the next six months or so the 832 00:43:24,760 --> 00:43:28,000 Speaker 13: no landing scenario, then it's possible the FED has to 833 00:43:28,080 --> 00:43:30,640 Speaker 13: do more. They hike even more, and then there are 834 00:43:30,719 --> 00:43:34,080 Speaker 13: some ramifications for that down the road that could mean 835 00:43:34,560 --> 00:43:38,040 Speaker 13: a more significant slowdown in growth, maybe some other financial 836 00:43:38,080 --> 00:43:41,920 Speaker 13: market casualties. So when you think about these scenarios, you 837 00:43:42,000 --> 00:43:44,080 Speaker 13: know they can evolve over time, but I think for 838 00:43:44,239 --> 00:43:46,920 Speaker 13: the next six six to twelve months, we don't have 839 00:43:47,000 --> 00:43:50,800 Speaker 13: a recession. The FED is you know, on hold or 840 00:43:51,280 --> 00:43:55,080 Speaker 13: maybe hiking another another time where I don't think we're 841 00:43:55,080 --> 00:43:58,240 Speaker 13: going to see things evolve as a recession and rate cuts, 842 00:43:58,640 --> 00:44:01,640 Speaker 13: and I think that's really important to take in because 843 00:44:01,640 --> 00:44:04,839 Speaker 13: that has big financial market implications. We kind of were 844 00:44:04,840 --> 00:44:07,120 Speaker 13: seeing that play out earlier in this week with the 845 00:44:07,200 --> 00:44:10,480 Speaker 13: flattening of the treasury yield curve. The way I think 846 00:44:10,520 --> 00:44:12,799 Speaker 13: about it, if the FED is on hold just where 847 00:44:12,840 --> 00:44:16,040 Speaker 13: they are, then the longer end of the treasury curve 848 00:44:16,080 --> 00:44:18,600 Speaker 13: can drift up just for that reason. You know, the 849 00:44:19,320 --> 00:44:21,160 Speaker 13: earlier this year where there's the expectation that the FED 850 00:44:21,200 --> 00:44:23,960 Speaker 13: would be cutting, and I think that underlied. You know 851 00:44:24,080 --> 00:44:26,239 Speaker 13: a lot of the inversion in the curve, but if 852 00:44:26,280 --> 00:44:28,600 Speaker 13: that's coming out, then a flatter curve makes sense. 853 00:44:29,160 --> 00:44:31,480 Speaker 1: It kind of hurts something along those lines. This morning, 854 00:44:31,880 --> 00:44:35,560 Speaker 1: Austin Goldsby, the president of the Federal Reserve Bank of Chicago, 855 00:44:35,719 --> 00:44:38,719 Speaker 1: was interviewed by Bloomberg's David Wesson, and he kind of 856 00:44:38,760 --> 00:44:41,440 Speaker 1: said the same thing. I guess the implication was they 857 00:44:41,520 --> 00:44:44,160 Speaker 1: feel like they're making some good headway walking that fine 858 00:44:44,200 --> 00:44:49,360 Speaker 1: line with holding inflation down while not pushing the economy 859 00:44:49,400 --> 00:44:53,120 Speaker 1: into recession, suggesting that that is consistent with kind of 860 00:44:53,200 --> 00:44:55,800 Speaker 1: keeping rates where they are for a while. Does that 861 00:44:55,840 --> 00:44:56,520 Speaker 1: seem reasonable? 862 00:44:57,360 --> 00:44:59,759 Speaker 13: Yeah, I think this is again great news for the Fed. 863 00:45:00,400 --> 00:45:03,920 Speaker 13: The core inflation has come down, so on course CPI 864 00:45:04,000 --> 00:45:06,359 Speaker 13: we were six to six at the peak year on year, 865 00:45:06,600 --> 00:45:09,320 Speaker 13: now we're four point eight. But the unemployment rate is 866 00:45:09,360 --> 00:45:12,239 Speaker 13: at three point five, as we saw this morning, below 867 00:45:12,280 --> 00:45:14,440 Speaker 13: where it was when the Fed started hiking. That's the 868 00:45:14,520 --> 00:45:19,080 Speaker 13: best case scenario for the policymakers improvement on inflation without 869 00:45:19,160 --> 00:45:22,920 Speaker 13: having a downturn. But that said, doesn't mean that the 870 00:45:23,000 --> 00:45:25,680 Speaker 13: Fed is going to be cutting rates anytime soon, not 871 00:45:25,880 --> 00:45:28,520 Speaker 13: with the unemployment rate at three point five. And then, 872 00:45:28,760 --> 00:45:31,359 Speaker 13: even though we've seen an improvement inflation, inflation is still 873 00:45:31,600 --> 00:45:35,440 Speaker 13: above well above the Fed's target. So stasis holding here 874 00:45:35,600 --> 00:45:37,879 Speaker 13: might might be how things play out. But I think 875 00:45:37,960 --> 00:45:40,839 Speaker 13: that has implication for two year treasury yields, but also 876 00:45:40,880 --> 00:45:41,920 Speaker 13: ten year treasury yields. 877 00:45:43,200 --> 00:45:47,400 Speaker 9: We're looking at some important data on CPI on PPI 878 00:45:47,680 --> 00:45:51,359 Speaker 9: producer price in next and next week. Talk me through 879 00:45:51,400 --> 00:45:54,840 Speaker 9: your expectations there. What kind of number are you looking 880 00:45:55,360 --> 00:45:55,719 Speaker 9: to see? 881 00:45:57,360 --> 00:45:59,800 Speaker 13: Well, the big thing for me is last month so 882 00:46:00,080 --> 00:46:05,719 Speaker 13: June core CPI was softer, softer than expected and I 883 00:46:05,800 --> 00:46:09,200 Speaker 13: think very soft. So looking for that to pick back 884 00:46:09,239 --> 00:46:12,960 Speaker 13: up month to month, maybe one point three percent month 885 00:46:13,000 --> 00:46:17,520 Speaker 13: to month percent change, So it could it could pour 886 00:46:17,760 --> 00:46:21,240 Speaker 13: some cold water on the on the soft landing scenario 887 00:46:21,280 --> 00:46:24,439 Speaker 13: if that does play out. But again it ties back 888 00:46:24,440 --> 00:46:27,239 Speaker 13: to our suspicion that the FED is probably not done, 889 00:46:28,120 --> 00:46:30,000 Speaker 13: and I think that would be the conclusion if you 890 00:46:30,080 --> 00:46:34,120 Speaker 13: do see a pick back up in the core CPI reading. 891 00:46:34,200 --> 00:46:35,920 Speaker 13: So that's really the critical report for me. 892 00:46:36,400 --> 00:46:38,839 Speaker 1: All right, Jeff, appreciate it as always getting your thoughts 893 00:46:38,920 --> 00:46:42,600 Speaker 1: Jeffrey Cleveland. He's a director and chief economist at Payden 894 00:46:42,719 --> 00:46:43,640 Speaker 1: and Regal. 895 00:46:44,040 --> 00:46:47,120 Speaker 6: You're listening to the tape catch a live program Bloomberg 896 00:46:47,239 --> 00:46:50,800 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 897 00:46:50,880 --> 00:46:54,080 Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business app. 898 00:46:54,160 --> 00:46:56,920 Speaker 6: You can also listen live on Amazon Alexa from our 899 00:46:57,000 --> 00:47:01,360 Speaker 6: flagship New York station, Just Say Alexa playing Bloomberg eleven thirty. 900 00:47:02,160 --> 00:47:06,239 Speaker 1: We got movement higher yet again in energy WTI crude 901 00:47:06,239 --> 00:47:08,000 Speaker 1: oil up one point two percent. I've been calling this 902 00:47:08,080 --> 00:47:11,600 Speaker 1: out for the last several weeks. This wdacrud's had a 903 00:47:11,640 --> 00:47:13,000 Speaker 1: nice little run here. I don't know what the heck's 904 00:47:13,000 --> 00:47:14,160 Speaker 1: going on. So let me bring in a couple of 905 00:47:14,160 --> 00:47:16,839 Speaker 1: people that we pay to know what's going on here. 906 00:47:16,880 --> 00:47:20,840 Speaker 1: Mike mcglohon' senior macro strategist with Bloomberg Intelligence. He's located 907 00:47:20,880 --> 00:47:24,759 Speaker 1: in the self proclaimed crypto capital of the world, Miami Beach. 908 00:47:24,840 --> 00:47:27,840 Speaker 1: Good luck with that. And Fernando Voley, senior analyst for 909 00:47:27,920 --> 00:47:30,000 Speaker 1: Bloomberg Intelligence. His whole career is kind of doing this 910 00:47:30,160 --> 00:47:32,880 Speaker 1: energy thing. So let's start off with Mike. Mike, just 911 00:47:33,000 --> 00:47:36,479 Speaker 1: from a technical perspective, why this scene was sixty seven 912 00:47:36,480 --> 00:47:39,200 Speaker 1: dollars or barrel WTI crude oil like a month five 913 00:47:39,280 --> 00:47:41,279 Speaker 1: weeks ago, here we are at eighty two. What's going on? 914 00:47:42,320 --> 00:47:45,160 Speaker 14: Were saying, we're seeing a decent bounce of a market 915 00:47:45,200 --> 00:47:48,520 Speaker 14: that we got very over so managed money net positions 916 00:47:48,600 --> 00:47:49,760 Speaker 14: were very short. 917 00:47:50,200 --> 00:47:52,880 Speaker 8: The market bounced from its sixty month moving average. 918 00:47:53,080 --> 00:47:57,040 Speaker 14: But the key thing to remember about crudeill juxtaposed the 919 00:47:57,120 --> 00:48:00,000 Speaker 14: stock market, which has that mantra if it goes out, 920 00:48:00,239 --> 00:48:03,480 Speaker 14: it will go up, and Crudel's the opposite, opposite. Remember 921 00:48:03,560 --> 00:48:05,120 Speaker 14: and the point you see the price you see in 922 00:48:05,160 --> 00:48:07,440 Speaker 14: the screen was first trade in about two thousand and seven. 923 00:48:07,760 --> 00:48:09,640 Speaker 8: It's when it goes up, it usually makes it go 924 00:48:09,800 --> 00:48:10,239 Speaker 8: back down. 925 00:48:10,560 --> 00:48:12,680 Speaker 14: And right now it's going it's rallying on the back 926 00:48:12,760 --> 00:48:15,200 Speaker 14: of not only that positions coming back, but the stock 927 00:48:15,320 --> 00:48:18,160 Speaker 14: market's going up and yields are popping. But I view 928 00:48:18,280 --> 00:48:20,839 Speaker 14: this as a bear market rally, and I have good 929 00:48:20,880 --> 00:48:23,440 Speaker 14: bias from that. The highest put in two thousand and eight, 930 00:48:23,760 --> 00:48:26,080 Speaker 14: We had that bounce up till last year that was 931 00:48:26,160 --> 00:48:28,560 Speaker 14: lower than that high around one thirty recently, and now 932 00:48:28,600 --> 00:48:32,080 Speaker 14: we have situation with OPEC cutting supply and Russian saying 933 00:48:32,080 --> 00:48:32,759 Speaker 14: they're cutting supply. 934 00:48:32,920 --> 00:48:35,160 Speaker 8: But that's typically what happens in bear markets. 935 00:48:35,360 --> 00:48:38,839 Speaker 14: From a cartel, they see this yield curve, they see 936 00:48:38,880 --> 00:48:43,520 Speaker 14: the global bent towards recession, they see the declining economic 937 00:48:43,560 --> 00:48:46,880 Speaker 14: growth out of China, they see the US rapidly raising 938 00:48:46,960 --> 00:48:49,680 Speaker 14: interest rates, and they see the risks of Crudell going lower. 939 00:48:49,680 --> 00:48:52,440 Speaker 14: And this what it normally does, is it mean reverts. 940 00:48:52,480 --> 00:48:54,360 Speaker 14: The question is whereas it peak and where's it go? 941 00:48:54,480 --> 00:48:56,759 Speaker 14: So I look at these levels eighty three has kind 942 00:48:56,760 --> 00:49:01,520 Speaker 14: of been the high since looks like a November of 943 00:49:01,680 --> 00:49:03,279 Speaker 14: last year. So I see we're near the upper end 944 00:49:03,320 --> 00:49:03,640 Speaker 14: the range. 945 00:49:03,680 --> 00:49:06,440 Speaker 1: Now, all right, Fernando Joints is here in a Bloomberg 946 00:49:06,440 --> 00:49:09,680 Speaker 1: Interactive broker studio paying three dollars and eighty three cents 947 00:49:09,760 --> 00:49:13,200 Speaker 1: a gallon to fill up the beamer at the Jersey Shore. 948 00:49:13,600 --> 00:49:16,399 Speaker 1: That's much higher than I want to pay. Why can't 949 00:49:16,440 --> 00:49:19,359 Speaker 1: And people are telling me there's a refinery issue, which 950 00:49:19,360 --> 00:49:21,840 Speaker 1: I'm not buying, by the way, but that's an exact 951 00:49:21,960 --> 00:49:24,720 Speaker 1: an excuse. Talk to me about the refining situation this country. 952 00:49:24,800 --> 00:49:26,440 Speaker 1: Do we have a refinery down or out or. 953 00:49:26,800 --> 00:49:27,239 Speaker 10: What's going on? 954 00:49:27,400 --> 00:49:29,560 Speaker 3: Not buying a refinery or no I want to buy it. 955 00:49:29,719 --> 00:49:31,480 Speaker 1: I'll tell you what I want to do. I want 956 00:49:31,520 --> 00:49:33,960 Speaker 1: to go down to Corpus Christi or golf Port or 957 00:49:33,960 --> 00:49:36,640 Speaker 1: wherever they put those things and build a refinery. Can 958 00:49:36,680 --> 00:49:36,960 Speaker 1: I do that? 959 00:49:37,400 --> 00:49:40,440 Speaker 15: You can just revamp some of it recently shuttered refineries, 960 00:49:40,520 --> 00:49:44,400 Speaker 15: including in Louisiana and in Philadelphia. Well, that one's going 961 00:49:44,480 --> 00:49:46,279 Speaker 15: to take a lot of work. But yeah, we do 962 00:49:46,480 --> 00:49:48,640 Speaker 15: have some refinery shortages. And when you look, it's not 963 00:49:48,800 --> 00:49:52,640 Speaker 15: just crude prices that are driving gasoline prices higher, crackspreads 964 00:49:52,640 --> 00:49:55,320 Speaker 15: are forty dollars a barrow for both gasoline and diesels. 965 00:49:55,680 --> 00:49:58,280 Speaker 1: Crackspread is the difference between what I pay for barrel 966 00:49:58,320 --> 00:49:58,600 Speaker 1: boy and. 967 00:49:58,640 --> 00:50:01,520 Speaker 15: What I yes the stuff for the diesel and the 968 00:50:01,560 --> 00:50:03,160 Speaker 15: gasoline to produce it out of it. 969 00:50:03,280 --> 00:50:04,600 Speaker 1: So I want to if I'm an produce it, I 970 00:50:04,640 --> 00:50:06,120 Speaker 1: want a bigger crackspread. 971 00:50:05,800 --> 00:50:09,040 Speaker 15: Exactly, And they were getting me. It's over three times 972 00:50:09,120 --> 00:50:11,840 Speaker 15: what they usually get, so they're pretty healthy. And that 973 00:50:12,360 --> 00:50:14,799 Speaker 15: just goes to show you that we are really short 974 00:50:14,840 --> 00:50:18,320 Speaker 15: on the refining capacity, and I'll make matters worse. It 975 00:50:18,400 --> 00:50:21,600 Speaker 15: actually looks worse in Europe, especially on the diesel side, 976 00:50:21,680 --> 00:50:25,120 Speaker 15: because they don't have Russian crude. They've lost a lot 977 00:50:25,160 --> 00:50:30,040 Speaker 15: of refinery capacity over the past five years, and electricity 978 00:50:30,080 --> 00:50:32,759 Speaker 15: prices there are significantly higher. So we're going to need 979 00:50:32,800 --> 00:50:35,600 Speaker 15: a lot more diesel and it's not gonna get cheaper 980 00:50:35,600 --> 00:50:36,239 Speaker 15: anytime soon. 981 00:50:37,080 --> 00:50:41,600 Speaker 9: Yeah, but we also see you know, US producers boosting production. 982 00:50:41,960 --> 00:50:45,799 Speaker 9: The shale producers that stayed on the sidelines preserved their 983 00:50:46,160 --> 00:50:51,000 Speaker 9: you know, fiscal picture as even the Biden administration was 984 00:50:51,040 --> 00:50:52,760 Speaker 9: telling them to get back out there to get pumping. 985 00:50:53,000 --> 00:50:56,960 Speaker 9: I mean, does that kind of offset. Sure, we have 986 00:50:57,040 --> 00:50:59,719 Speaker 9: this maybe bottleneck in refining, but then does that sort 987 00:50:59,719 --> 00:51:02,680 Speaker 9: of all set what we're hearing from Saudi Arabia around 988 00:51:02,719 --> 00:51:07,320 Speaker 9: continuing those cuts. Does that kind of put an upside 989 00:51:07,960 --> 00:51:10,160 Speaker 9: ceiling to where we go with oil prices? 990 00:51:10,360 --> 00:51:12,640 Speaker 15: Well, the limit is really on the demand side. As 991 00:51:12,760 --> 00:51:16,279 Speaker 15: Mike was alluding to, the shale producers can only grow 992 00:51:16,360 --> 00:51:19,600 Speaker 15: so much. There are variety of limitations. I think the 993 00:51:19,719 --> 00:51:23,319 Speaker 15: biggest and most importance to geological limitation. You just can't 994 00:51:23,360 --> 00:51:26,120 Speaker 15: grow as fast as you as you hope because the 995 00:51:26,239 --> 00:51:30,400 Speaker 15: productivity isn't there. And then outside of the permium, you 996 00:51:30,640 --> 00:51:32,560 Speaker 15: just don't have any investments. Even when you look at 997 00:51:32,560 --> 00:51:36,560 Speaker 15: the rig count, it's still relatively low. Frack spreads, they're 998 00:51:36,640 --> 00:51:40,520 Speaker 15: not back to their peaks before twenty twenty, and so 999 00:51:40,920 --> 00:51:43,760 Speaker 15: we're not going to see that sort of growth. And ultimately, 1000 00:51:43,920 --> 00:51:46,080 Speaker 15: when it comes to gasoline and diesel prices, you have 1001 00:51:46,200 --> 00:51:49,320 Speaker 15: an added issue, which is what we produce in the 1002 00:51:49,480 --> 00:51:52,880 Speaker 15: US is not really set up for what we refine 1003 00:51:52,920 --> 00:51:55,360 Speaker 15: in the US, and we need a lot more heavy crude. 1004 00:51:55,640 --> 00:51:58,640 Speaker 15: And when OPEC cuts barrows, they cut the stuff that 1005 00:51:58,719 --> 00:52:01,200 Speaker 15: we need, which is the medium and heavier grades and 1006 00:52:01,320 --> 00:52:03,840 Speaker 15: that makes especially diesel more expensive. 1007 00:52:04,000 --> 00:52:05,080 Speaker 3: I don't know that all works. 1008 00:52:05,320 --> 00:52:07,320 Speaker 1: Mike mcgloan talk to us about kind of just the 1009 00:52:08,000 --> 00:52:10,440 Speaker 1: trading here of WTI crewed or just the you know, 1010 00:52:10,520 --> 00:52:13,480 Speaker 1: the other energy components here. How much of it is 1011 00:52:13,560 --> 00:52:19,040 Speaker 1: really technical versus the fundamentals that Fernando's talking about. 1012 00:52:20,080 --> 00:52:22,759 Speaker 14: Price is the number one factor in crude oil and 1013 00:52:22,840 --> 00:52:25,480 Speaker 14: what drives price futures traders. I just love pointing it 1014 00:52:25,560 --> 00:52:28,440 Speaker 14: out because I actually I am an ex futures trader 1015 00:52:28,440 --> 00:52:30,800 Speaker 14: and I've spent a good portion of my career running 1016 00:52:30,880 --> 00:52:33,440 Speaker 14: money and deal with clients doing that. And that's the 1017 00:52:33,480 --> 00:52:35,560 Speaker 14: bottom line is it's really price that drives it. And 1018 00:52:35,600 --> 00:52:37,839 Speaker 14: now why do you see opek worried about cutting because 1019 00:52:37,840 --> 00:52:40,239 Speaker 14: they see what's happening, see prices going down. But the 1020 00:52:40,280 --> 00:52:42,759 Speaker 14: bottom line is we're still well above the average cost 1021 00:52:42,760 --> 00:52:45,719 Speaker 14: of production the world's largest producer and net export of 1022 00:52:45,760 --> 00:52:48,960 Speaker 14: the US. And one thing I do point out and 1023 00:52:49,120 --> 00:52:50,920 Speaker 14: like to point out is how things have changed. 1024 00:52:50,960 --> 00:52:51,080 Speaker 8: Now. 1025 00:52:51,120 --> 00:52:54,360 Speaker 14: This is just a little bit of where Fernando and 1026 00:52:54,400 --> 00:52:58,239 Speaker 14: I disagree, is rig accounts declining is actually a variable 1027 00:52:58,360 --> 00:53:00,839 Speaker 14: of bearish sign for crude oil because if you look 1028 00:53:00,880 --> 00:53:03,640 Speaker 14: at what's there's been a very high correlation with Ricoins 1029 00:53:03,719 --> 00:53:06,839 Speaker 14: councilor lasts almost twenty years, partly because when you drill 1030 00:53:07,400 --> 00:53:09,600 Speaker 14: down one drill, you can go horizontal who knows how 1031 00:53:09,640 --> 00:53:11,840 Speaker 14: many ways. But it's just the fact of what I 1032 00:53:11,920 --> 00:53:13,880 Speaker 14: show in prices, and I love pointing this out a 1033 00:53:13,960 --> 00:53:16,359 Speaker 14: year ago is the fantasies of Crudel where people still 1034 00:53:16,400 --> 00:53:18,440 Speaker 14: focus on those kind of things, and then people talk 1035 00:53:18,440 --> 00:53:20,920 Speaker 14: about lack of investment. I you know, I'll be going 1036 00:53:20,960 --> 00:53:24,000 Speaker 14: down to the farmland again next week. And you know, 1037 00:53:24,120 --> 00:53:26,440 Speaker 14: in this country we get almost fifteen percent of our 1038 00:53:26,440 --> 00:53:29,360 Speaker 14: total and leaded gas now from ethanol, and that demand 1039 00:53:29,440 --> 00:53:32,040 Speaker 14: from leading gas in this country is actually declining. It's 1040 00:53:32,120 --> 00:53:34,960 Speaker 14: down five percent then when it was before COVID so 1041 00:53:35,200 --> 00:53:37,640 Speaker 14: and well, this major bent towards EV. So I look 1042 00:53:37,680 --> 00:53:40,279 Speaker 14: at it is this is an enduring bear market that's 1043 00:53:40,360 --> 00:53:41,800 Speaker 14: just catching up. If you want to look for a 1044 00:53:41,880 --> 00:53:45,239 Speaker 14: good bullmarket commodities, look for gold. The price today this 1045 00:53:45,400 --> 00:53:47,879 Speaker 14: year is the average highest. The average price for gold 1046 00:53:47,920 --> 00:53:51,200 Speaker 14: this year is the highest ever at nineteen one hundred 1047 00:53:51,239 --> 00:53:54,160 Speaker 14: and thirty six dollars announce. Crude oil is just the 1048 00:53:54,160 --> 00:53:56,600 Speaker 14: average price. There is seventy five that's met it's just 1049 00:53:56,680 --> 00:53:58,960 Speaker 14: a normal price. It's just fluctuating around that average. 1050 00:53:59,040 --> 00:54:00,719 Speaker 1: So I'm going to quote are just I think I 1051 00:54:00,760 --> 00:54:05,320 Speaker 1: can summarize Mike Gloan's commodities call buy gold, short everything 1052 00:54:05,360 --> 00:54:06,720 Speaker 1: else exactly. 1053 00:54:06,840 --> 00:54:09,520 Speaker 8: That's the trend, and he makes. 1054 00:54:09,400 --> 00:54:09,920 Speaker 11: A living on this. 1055 00:54:10,160 --> 00:54:11,839 Speaker 1: I don't believe he gets fanded into stuff. 1056 00:54:12,200 --> 00:54:12,239 Speaker 8: No. 1057 00:54:12,400 --> 00:54:15,080 Speaker 9: I mean, his commentary here is pretty that he writes 1058 00:54:15,080 --> 00:54:20,080 Speaker 9: for Bloomber Contelatis is pretty harsh. Either we are reversing 1059 00:54:20,120 --> 00:54:22,920 Speaker 9: our trajectory since two thousand and nine and an upward trend, 1060 00:54:23,520 --> 00:54:27,240 Speaker 9: or we're in the early stages of a severe economic contraction, 1061 00:54:27,400 --> 00:54:30,120 Speaker 9: and he, by the way, believes the latter. I mean, 1062 00:54:30,200 --> 00:54:33,120 Speaker 9: for Nando, what's your take, do you disagree? I mean, 1063 00:54:33,320 --> 00:54:35,719 Speaker 9: I know you're specialize in the energy space, but. 1064 00:54:36,040 --> 00:54:39,520 Speaker 15: Yeah, absolutely, I think I agree with that the demand 1065 00:54:39,719 --> 00:54:42,120 Speaker 15: socide of the equation is the biggest driver in the 1066 00:54:42,160 --> 00:54:45,759 Speaker 15: short term, and Mike and I view on the short 1067 00:54:45,840 --> 00:54:48,680 Speaker 15: term is very aligned. We think that's probably the lower 1068 00:54:48,760 --> 00:54:50,719 Speaker 15: price than what you've seen on the screen right now. 1069 00:54:51,400 --> 00:54:53,320 Speaker 15: But then on the long term, where I'll disagree with 1070 00:54:53,400 --> 00:54:56,840 Speaker 15: Mike is because my homeland is poor and doesn't have 1071 00:54:56,920 --> 00:54:58,680 Speaker 15: a lot of energy, and that whole land for people 1072 00:54:58,760 --> 00:55:02,520 Speaker 15: is Brazil and we're not buying evs. We went through 1073 00:55:02,600 --> 00:55:07,640 Speaker 15: blackouts throughout my childhood and OECD the developed countries are 1074 00:55:07,719 --> 00:55:11,080 Speaker 15: now less than half of energy demand globally and the 1075 00:55:11,200 --> 00:55:14,600 Speaker 15: only area that grows is emergent markets, so they are 1076 00:55:14,640 --> 00:55:17,439 Speaker 15: the biggest drivers. And when you look at China having 1077 00:55:17,480 --> 00:55:21,240 Speaker 15: to buy more coal because they don't have enough energy, 1078 00:55:21,400 --> 00:55:26,600 Speaker 15: India and Pakistan and their challenges with electricity, believing that 1079 00:55:26,719 --> 00:55:28,560 Speaker 15: the whole world's going to be driving a tesla in 1080 00:55:28,640 --> 00:55:31,640 Speaker 15: ten years is just completely nonsense to me. 1081 00:55:31,800 --> 00:55:34,920 Speaker 1: All right, so are your companies, your global energy companies, 1082 00:55:34,960 --> 00:55:39,040 Speaker 1: are they investing enough in the fossil fuel infrastructure? 1083 00:55:39,320 --> 00:55:41,520 Speaker 15: I mean excellent and Chevron plan to grow two to 1084 00:55:41,640 --> 00:55:44,759 Speaker 15: three percent a year, and while BP and Shell are 1085 00:55:44,840 --> 00:55:47,799 Speaker 15: thinking they're going to declient. So no, in the long term, 1086 00:55:47,880 --> 00:55:51,120 Speaker 15: we're not. And then there's a question on whether Saudi 1087 00:55:51,239 --> 00:55:53,840 Speaker 15: can actually grow much more than they do. They always 1088 00:55:53,920 --> 00:55:57,000 Speaker 15: talk about a big game about growing production and then 1089 00:55:57,200 --> 00:55:59,880 Speaker 15: for the past fifteen years they've been pretty much flat. 1090 00:56:00,400 --> 00:56:02,879 Speaker 15: So there's a lot of questions there. We don't think 1091 00:56:02,920 --> 00:56:06,439 Speaker 15: we have enough energy long term, and solar and wind 1092 00:56:07,600 --> 00:56:10,120 Speaker 15: won't cut it in the next ten to fifteen years. 1093 00:56:10,280 --> 00:56:12,400 Speaker 1: All right, there you go, folks. I think that's some 1094 00:56:12,480 --> 00:56:15,080 Speaker 1: of the smartest conversation you get on energy. You got 1095 00:56:15,160 --> 00:56:17,400 Speaker 1: to coming from a commodity perspective as well as a 1096 00:56:17,440 --> 00:56:20,799 Speaker 1: fundamental analyst who talks to these companies every day. That's 1097 00:56:20,880 --> 00:56:24,920 Speaker 1: Mike mcgloone and Fernando Vali. They're both from Bloomberg Intelligence. 1098 00:56:24,960 --> 00:56:28,520 Speaker 1: I wonder who hired them. Anyway, there's a good view 1099 00:56:28,680 --> 00:56:30,040 Speaker 1: on the energy space there. 1100 00:56:30,400 --> 00:56:33,480 Speaker 6: You're listening to the tape cans a live program Bloomberg 1101 00:56:33,600 --> 00:56:37,160 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 1102 00:56:37,239 --> 00:56:40,439 Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 1103 00:56:40,520 --> 00:56:43,279 Speaker 6: You can also listen live on Amazon Alexa from our 1104 00:56:43,360 --> 00:56:47,720 Speaker 6: flagship New York station, Just say Alexa play Bloomberg eleven thirty. 1105 00:56:49,960 --> 00:56:53,759 Speaker 1: It's stuff diversity in inclusion. This is Jobs Day, and 1106 00:56:53,800 --> 00:56:56,600 Speaker 1: it's put in the context of diversity and inclusion that 1107 00:56:56,680 --> 00:57:00,680 Speaker 1: remains obviously a challenge, seemingly an ongoing challenge for most 1108 00:57:00,719 --> 00:57:03,920 Speaker 1: of corporate America, and that certainly includes the financial services industry, 1109 00:57:03,960 --> 00:57:06,319 Speaker 1: the big investment banks. To help us kind of get 1110 00:57:06,360 --> 00:57:09,080 Speaker 1: a sense of where we are right now, Sondra Quince 1111 00:57:09,360 --> 00:57:13,160 Speaker 1: joins us. She's the CEO for Paradigm for Parody. She 1112 00:57:13,360 --> 00:57:16,760 Speaker 1: joins us via zoom, Sandra, talk to us about Paradigm 1113 00:57:16,880 --> 00:57:17,440 Speaker 1: for Parody. 1114 00:57:17,640 --> 00:57:18,320 Speaker 13: Just start us off. 1115 00:57:18,600 --> 00:57:19,040 Speaker 8: What is it? 1116 00:57:19,200 --> 00:57:21,120 Speaker 1: What are you guys trying to accomplish? 1117 00:57:22,280 --> 00:57:24,160 Speaker 16: Yeah, thank you so much for having me today. 1118 00:57:24,240 --> 00:57:27,840 Speaker 17: So, Paradigm for Parody is quite simply a coalition organization 1119 00:57:28,000 --> 00:57:31,960 Speaker 17: that's focused on closing the gender parity gap and elevating 1120 00:57:32,040 --> 00:57:34,680 Speaker 17: women at every level of leadership in corporate America. 1121 00:57:35,160 --> 00:57:37,360 Speaker 16: We do this with a lens on racial equity. 1122 00:57:37,720 --> 00:57:41,880 Speaker 17: We provide our companies with a clear strategy, and then 1123 00:57:41,960 --> 00:57:45,760 Speaker 17: we provide them with the key tactics, the programs, and 1124 00:57:46,440 --> 00:57:49,040 Speaker 17: the resources that they need in order to close the 1125 00:57:49,120 --> 00:57:49,760 Speaker 17: parody gap. 1126 00:57:50,640 --> 00:57:54,160 Speaker 9: One of the interesting lines from this earnings report Sondra 1127 00:57:54,440 --> 00:57:59,520 Speaker 9: is that the participation rate for ages twenty five to 1128 00:57:59,600 --> 00:58:02,840 Speaker 9: fifty for actually fell for the first time since late 1129 00:58:02,960 --> 00:58:08,080 Speaker 9: last year, mainly because women were leaving the workforce. I thought, 1130 00:58:08,160 --> 00:58:10,560 Speaker 9: you know, there's been this run up in family information, 1131 00:58:11,160 --> 00:58:13,000 Speaker 9: but you know, do you where do you see this 1132 00:58:13,600 --> 00:58:17,120 Speaker 9: coming from? And you don't necessarily have all the nittigritty 1133 00:58:17,120 --> 00:58:18,760 Speaker 9: of the data, but what are the trends that you're 1134 00:58:18,760 --> 00:58:20,040 Speaker 9: seeing with the companies you work with. 1135 00:58:21,240 --> 00:58:24,560 Speaker 17: Yeah, so certainly there are women that are making decisions 1136 00:58:24,640 --> 00:58:25,520 Speaker 17: to leave the workforce. 1137 00:58:25,600 --> 00:58:28,480 Speaker 16: The companies that we're working with are really focused. 1138 00:58:28,120 --> 00:58:31,440 Speaker 17: On how do we keep women in the workforce or 1139 00:58:31,480 --> 00:58:34,840 Speaker 17: become a company that women can really see themselves thriving. 1140 00:58:35,360 --> 00:58:37,960 Speaker 17: And some of the things that companies are doing, quite frankly, 1141 00:58:38,280 --> 00:58:41,720 Speaker 17: is is they are looking for opportunities to ensure that 1142 00:58:41,920 --> 00:58:45,920 Speaker 17: they're hiring women, but more importantly that they're providing developmental 1143 00:58:45,960 --> 00:58:48,760 Speaker 17: opportunities to support women up and through the c suite. 1144 00:58:48,880 --> 00:58:52,360 Speaker 17: So where there it's sponsorship programs or whether it's programs 1145 00:58:52,520 --> 00:58:56,080 Speaker 17: like our Paradigm for Parity, Profit and Loss Leadership Accelerator 1146 00:58:56,120 --> 00:58:59,880 Speaker 17: program whereby your exposing women to other opportunities within Core 1147 00:59:00,240 --> 00:59:03,480 Speaker 17: America is critically important. And then, last but not least, 1148 00:59:03,480 --> 00:59:06,840 Speaker 17: I think it's important that leaders create the right type 1149 00:59:06,880 --> 00:59:10,880 Speaker 17: of inclusive people leaders so that you know whoever you're 1150 00:59:10,920 --> 00:59:13,720 Speaker 17: working for, that they understand some of the challenges and 1151 00:59:13,760 --> 00:59:16,640 Speaker 17: the issues and can really provide a workplace where all 1152 00:59:16,720 --> 00:59:17,880 Speaker 17: of their talent can thrive. 1153 00:59:18,400 --> 00:59:19,760 Speaker 16: And then companies that we're. 1154 00:59:19,680 --> 00:59:22,960 Speaker 17: Talking with are also looking at their benefits to ensure 1155 00:59:23,000 --> 00:59:25,920 Speaker 17: that they're meeting the needs of not only women, but 1156 00:59:26,120 --> 00:59:27,520 Speaker 17: they're broader workforce. 1157 00:59:28,800 --> 00:59:32,040 Speaker 1: Sandra, what are the companies that you deal with? What 1158 00:59:32,120 --> 00:59:33,760 Speaker 1: are they saying or what are they asking you? In 1159 00:59:33,840 --> 00:59:37,200 Speaker 1: let of the Supreme Court decision on affirmative action. 1160 00:59:38,680 --> 00:59:41,080 Speaker 17: Yeah, so a part of you know, what they're saying 1161 00:59:41,240 --> 00:59:43,960 Speaker 17: is number one, they want to stay the course and 1162 00:59:44,200 --> 00:59:47,680 Speaker 17: ensure that they don't, you know, reverse any of the 1163 00:59:47,760 --> 00:59:51,280 Speaker 17: progress that they've made over time. Some of the conversations 1164 00:59:51,320 --> 00:59:54,520 Speaker 17: that we're having is really stems around, you know, what 1165 00:59:54,640 --> 00:59:56,000 Speaker 17: do we do about our language. 1166 00:59:56,120 --> 00:59:58,960 Speaker 16: How do we ensure that we can continue to be a. 1167 00:59:59,040 --> 01:00:02,680 Speaker 17: Diverse and inclusive workforce, but ensure that we're bringing everyone 1168 01:00:02,760 --> 01:00:05,720 Speaker 17: along in this journey. So I think many of our 1169 01:00:05,760 --> 01:00:08,840 Speaker 17: companies are just taking a step back and looking at 1170 01:00:09,520 --> 01:00:10,920 Speaker 17: their language to be sure that that. 1171 01:00:11,000 --> 01:00:12,080 Speaker 16: Language is inclusive. 1172 01:00:12,280 --> 01:00:15,480 Speaker 17: They're also taking a look at their programs to be 1173 01:00:15,640 --> 01:00:19,919 Speaker 17: sure that while they have opportunities around women and those 1174 01:00:20,000 --> 01:00:24,080 Speaker 17: that are ethnically underrepresented, that they're creating the right processes 1175 01:00:24,120 --> 01:00:28,480 Speaker 17: in place to ensure that they are inclusive in that approach, 1176 01:00:29,120 --> 01:00:32,600 Speaker 17: that they are promoting all people within their organizations. So 1177 01:00:32,760 --> 01:00:36,200 Speaker 17: for many of our organizations, it's really around staying the course, 1178 01:00:36,680 --> 01:00:39,960 Speaker 17: but just taking a review of our processes and the 1179 01:00:40,080 --> 01:00:41,120 Speaker 17: language that we're using. 1180 01:00:41,720 --> 01:00:45,280 Speaker 9: Well, I mean staying the course though has kind of amounted, 1181 01:00:45,800 --> 01:00:48,520 Speaker 9: at least in recent months, to just not talking about 1182 01:00:49,320 --> 01:00:51,800 Speaker 9: diversity policies. I mean that was certainly the case when 1183 01:00:51,840 --> 01:00:56,080 Speaker 9: you look through earnings reports around Pride month after some 1184 01:00:56,240 --> 01:01:02,880 Speaker 9: dustktops over particularly LGBTQ strategy, but particularly around the t 1185 01:01:03,600 --> 01:01:07,600 Speaker 9: element of that. And is that the right way forward 1186 01:01:07,880 --> 01:01:10,400 Speaker 9: is to just kind of focus internally and not speak 1187 01:01:10,400 --> 01:01:13,600 Speaker 9: as much about diversity policies or is this kind of 1188 01:01:13,640 --> 01:01:16,840 Speaker 9: a temporary moment and you think we'll hear more going forward. 1189 01:01:17,880 --> 01:01:18,120 Speaker 13: Yeah. 1190 01:01:18,440 --> 01:01:21,680 Speaker 17: So I think on some levels, right, for some organizations, 1191 01:01:21,720 --> 01:01:24,640 Speaker 17: the right thing for them to do maybe to again 1192 01:01:24,840 --> 01:01:27,120 Speaker 17: just not sort of address some of the broader issues. 1193 01:01:27,200 --> 01:01:29,120 Speaker 16: But the companies that are really on the. 1194 01:01:31,360 --> 01:01:34,360 Speaker 17: That are really making progress and have made progress over time, 1195 01:01:34,520 --> 01:01:37,320 Speaker 17: those companies are still speaking publicly about the fact that 1196 01:01:37,480 --> 01:01:41,920 Speaker 17: they are going to continue around their diversity and inclusion efforts, 1197 01:01:42,760 --> 01:01:45,360 Speaker 17: that they are going to continue to make progress because 1198 01:01:45,400 --> 01:01:48,360 Speaker 17: they want to reflect the clients and communities that they serve, 1199 01:01:48,520 --> 01:01:50,880 Speaker 17: which is certainly the right thing to do. We've even 1200 01:01:50,960 --> 01:01:54,240 Speaker 17: heard the same conversation coming from some universities as well, 1201 01:01:54,960 --> 01:01:58,320 Speaker 17: that while affirmative action may have been impacted, they can 1202 01:01:58,440 --> 01:02:04,080 Speaker 17: still make impact in the universities and create inclusive environments 1203 01:02:04,120 --> 01:02:08,720 Speaker 17: where they reflect the communities and in which. 1204 01:02:08,600 --> 01:02:09,800 Speaker 16: They're they're located. 1205 01:02:09,920 --> 01:02:13,680 Speaker 17: So I really think that staying the course for companies 1206 01:02:13,760 --> 01:02:16,320 Speaker 17: can mean a couple of things. Whether it means we're 1207 01:02:16,400 --> 01:02:18,680 Speaker 17: remain silent, but for others, it means we're going to 1208 01:02:18,720 --> 01:02:22,600 Speaker 17: continue to speak out and speak out publicly around the 1209 01:02:22,720 --> 01:02:24,440 Speaker 17: work that we're doing and leading. 1210 01:02:25,680 --> 01:02:30,800 Speaker 1: Childcare. What's the most common reason that employers cite for 1211 01:02:30,960 --> 01:02:33,640 Speaker 1: not providing childcare for their employees. 1212 01:02:35,280 --> 01:02:37,120 Speaker 16: Yeah, so that's an interesting question. 1213 01:02:37,280 --> 01:02:41,200 Speaker 17: Many of the companies that I, you know, we have 1214 01:02:41,800 --> 01:02:44,720 Speaker 17: that are part of our coalition that we mainly interact with, 1215 01:02:45,360 --> 01:02:47,880 Speaker 17: all of them have childcare. So there are very few 1216 01:02:47,960 --> 01:02:53,160 Speaker 17: that come across that that are that are not providing 1217 01:02:53,240 --> 01:02:57,040 Speaker 17: some level of opportunity for families to care for their children. 1218 01:02:58,560 --> 01:03:01,120 Speaker 16: So I do think for some though that are not 1219 01:03:01,280 --> 01:03:02,640 Speaker 16: offering it, it could be the. 1220 01:03:02,720 --> 01:03:06,400 Speaker 17: Fact of affordability for their employee base, But there are 1221 01:03:06,840 --> 01:03:10,320 Speaker 17: tons of ways that you can provide childcare for your 1222 01:03:10,520 --> 01:03:12,560 Speaker 17: employees without companies. 1223 01:03:12,240 --> 01:03:16,560 Speaker 16: Having to pay tons of money for it and provide. 1224 01:03:16,240 --> 01:03:24,120 Speaker 17: Opportunities flexible work, for example, offering for assistance around for 1225 01:03:24,680 --> 01:03:28,160 Speaker 17: companies to be able to connect people to childcare opportunities 1226 01:03:29,000 --> 01:03:32,000 Speaker 17: or connect employees to opportunities or places to take their 1227 01:03:32,080 --> 01:03:34,680 Speaker 17: children so that they can come to work and know 1228 01:03:34,800 --> 01:03:36,840 Speaker 17: that their children are in a safe environment. So I 1229 01:03:36,920 --> 01:03:39,840 Speaker 17: think there on some level there's something that companies can 1230 01:03:39,920 --> 01:03:41,960 Speaker 17: be doing that can be precostpective. 1231 01:03:42,280 --> 01:03:44,640 Speaker 1: All right, Santra, really appreciate you taking the time to 1232 01:03:44,720 --> 01:03:48,200 Speaker 1: speak with this here on important topic. Sandra Quint's CEO 1233 01:03:48,600 --> 01:03:51,600 Speaker 1: for Paradigm for Parody P for P. 1234 01:03:56,560 --> 01:03:59,600 Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can 1235 01:03:59,640 --> 01:04:03,760 Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever. 1236 01:04:03,560 --> 01:04:05,000 Speaker 12: Podcast platform you prefer. 1237 01:04:05,440 --> 01:04:06,200 Speaker 1: I'm Matt Miller. 1238 01:04:06,480 --> 01:04:09,360 Speaker 2: I'm on Twitter at Matt Miller nineteen seventy three. 1239 01:04:09,840 --> 01:04:12,240 Speaker 1: And I'm fall Sweeney. I'm on Twitter at pt Sweeney. 1240 01:04:12,360 --> 01:04:15,000 Speaker 1: Before the podcast, you can always catch us worldwide at 1241 01:04:15,040 --> 01:04:15,800 Speaker 1: Bloomberg Radio