WEBVTT - Jobs Day, Austan Goolsbee, Tech Earnings, and DEI (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.080 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moving news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets Podcast called Apple Podcasts or wherever 0:00:17.400 --> 0:00:20.520 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:20.960 --> 0:00:21.720 I'm David Weston. 0:00:21.760 --> 0:00:24.080 I'm delighted to be joined right now by the Federal 0:00:24.360 --> 0:00:26.280 the president of the Chicago Fed. 0:00:26.320 --> 0:00:27.320 He is Austin Goolsby. 0:00:27.360 --> 0:00:29.560 Austin, thanks for being here. We've so we're out here 0:00:29.560 --> 0:00:32.120 for the Aspen Economic Strategy Group meetings. A lot of 0:00:32.159 --> 0:00:35.920 talk about fiscal issues, monetary issues, but we all I 0:00:35.960 --> 0:00:40.040 have now the key jobs figures a little bit lighter 0:00:40.040 --> 0:00:41.839 than expected, one hundred and eighty seven thousand, set of 0:00:41.840 --> 0:00:44.960 two hundred thousand, little heavier than expected. On the wages, 0:00:45.000 --> 0:00:45.960 what did you take them? 0:00:46.320 --> 0:00:48.000 It was pretty much what we expected. 0:00:48.120 --> 0:00:51.599 I mean, let's remember the job's number is whatever it is, 0:00:51.720 --> 0:00:54.560 plus or minus one hundred and twenty thousand a month, 0:00:54.680 --> 0:00:58.560 so there's no point quibbling over over numbers. 0:00:58.680 --> 0:01:00.120 The job mark. 0:01:00.000 --> 0:01:04.880 Mart is cooling a little too kind of a balanced level, 0:01:04.920 --> 0:01:07.880 but it's still extremely strong. That's the strongest part of 0:01:07.880 --> 0:01:11.000 the economy by far is how low the unemployment rate 0:01:11.080 --> 0:01:13.280 is and people can get a job if they want 0:01:13.319 --> 0:01:13.680 a job. 0:01:14.440 --> 0:01:16.560 To that point of being tight one hundred and seven 0:01:16.600 --> 0:01:19.520 thousand plus or minus, it's still way more than you 0:01:19.520 --> 0:01:21.840 need just to catch up to keep even with the 0:01:21.880 --> 0:01:24.280 new people coming into the workforce. So it is tightening 0:01:24.280 --> 0:01:26.520 in that sense, is it not. I think that's right. 0:01:26.760 --> 0:01:31.199 You know, let's say one hundred thousand just from population 0:01:31.280 --> 0:01:34.480 and what's coming into the workforce, so it's stronger than that. 0:01:35.080 --> 0:01:38.240 It's been the surprise of the year, of the six 0:01:38.319 --> 0:01:44.440 months that all of the people that folks thought were 0:01:44.520 --> 0:01:47.120 gone from the labor force never to return, a lot 0:01:47.200 --> 0:01:48.160 of them are coming back. 0:01:48.240 --> 0:01:50.800 You know. When it's when the job market is as strong. 0:01:50.520 --> 0:01:54.480 As that, you've seen labor force participation rise back to 0:01:54.640 --> 0:01:57.960 levels that we hadn't seen for several years at least. 0:01:58.280 --> 0:02:00.640 So that's been great. I mean, that's strongest part of 0:02:00.640 --> 0:02:01.120 the economy. 0:02:01.200 --> 0:02:03.120 Yeah, none of us wants anybody be out of a job, 0:02:03.160 --> 0:02:05.000 so it's a good thing. It's just many p other jobs. 0:02:05.240 --> 0:02:08.200 But what about the wages where now these numbers were 0:02:08.240 --> 0:02:10.120 four point four percent year over year. 0:02:10.160 --> 0:02:10.920 I believe it was. 0:02:11.600 --> 0:02:13.760 That doesn't sound like something consistent with getting to two 0:02:13.760 --> 0:02:14.840 percent inflation overall. 0:02:16.800 --> 0:02:18.840 The way I view it is two things. 0:02:18.880 --> 0:02:23.440 One can't say anything about wages until you actually know 0:02:23.480 --> 0:02:27.040 what's happening with productivity. We got some productivity numbers. They 0:02:27.080 --> 0:02:30.600 were strong for the quarter. That's very noisy. But if 0:02:30.639 --> 0:02:33.720 you have strong productivity growth, you can have wage growth 0:02:33.760 --> 0:02:35.280 and it doesn't generate inflation. 0:02:35.880 --> 0:02:37.919 And the other thing about wages is. 0:02:37.880 --> 0:02:41.000 They're not a leading indicator of price inflation. 0:02:41.480 --> 0:02:44.960 They're backward looking. They move. Wages move more slowly. 0:02:45.000 --> 0:02:48.480 When things happen, we get shocks, the prices move first 0:02:48.520 --> 0:02:51.480 and then the wages. So when we see what's happening 0:02:51.480 --> 0:02:54.480 to wages today, this is kind of an amalgam of. 0:02:54.480 --> 0:02:56.840 A bunch of stuff that already occurred. 0:02:58.000 --> 0:03:00.639 I think if you want to know if you're beat inflation, 0:03:01.280 --> 0:03:04.280 go watch the inflation. You know, the price series, and 0:03:04.400 --> 0:03:07.639 especially the new months of inflation in the core. 0:03:07.720 --> 0:03:09.000 That's really what you want to be Why. 0:03:08.919 --> 0:03:11.040 What are those numbers telling you right now? Particularly goods inflation? 0:03:11.120 --> 0:03:12.080 Is it a bit stickier than you. 0:03:12.120 --> 0:03:13.839 Thought it has been? 0:03:13.919 --> 0:03:17.680 But the last couple of readings have been pretty positive. 0:03:19.639 --> 0:03:22.960 It's important that you raise this goods loosely. If you 0:03:23.000 --> 0:03:25.720 look at core inflation, you got goods, you got housing, 0:03:25.760 --> 0:03:30.520 you got services not including housing. And we've much remarked 0:03:30.560 --> 0:03:33.560 on the skinness and persistence of services inflation. 0:03:34.360 --> 0:03:35.160 But we knew. 0:03:34.920 --> 0:03:39.560 That that that's not where we went wrong over at 0:03:39.560 --> 0:03:42.080 the end of last year beginning of this year, with 0:03:42.200 --> 0:03:45.920 inflation lasting a little longer than we thought, it has 0:03:45.960 --> 0:03:49.520 been that goods prices, while down, have not gone all 0:03:49.560 --> 0:03:51.480 the way down to where. 0:03:51.240 --> 0:03:52.960 They were before the pandemic. 0:03:54.240 --> 0:03:57.200 I feel like that's kind of started and that's put 0:03:57.240 --> 0:03:59.640 the FED on this line. I mean, it's a thin 0:03:59.800 --> 0:04:03.560 line to walk, but getting the prices down without having 0:04:03.640 --> 0:04:07.320 a big recession, we're gonna Johnny cash this thing and 0:04:07.800 --> 0:04:10.760 walk that line. And that that's for sure the goal. 0:04:11.880 --> 0:04:14.600 And goods price has got to come down. And then 0:04:14.640 --> 0:04:16.240 the next one's got to be housing. 0:04:16.640 --> 0:04:18.320 As you know, it's. 0:04:18.200 --> 0:04:22.919 The the housing that's in the CPI is based on 0:04:23.000 --> 0:04:25.000 a bunch of market rents and it takes. 0:04:24.760 --> 0:04:26.120 A while to flow through. 0:04:26.200 --> 0:04:28.800 So hopefully as we go into the fall, that's that's 0:04:28.800 --> 0:04:29.600 gonna be the next one. 0:04:29.600 --> 0:04:31.560 So also gonna stick with the Johnny Cash. Yeah, walk 0:04:31.560 --> 0:04:34.039 in that line. How long is the line? And we 0:04:34.120 --> 0:04:36.200 know that the target is two percent. It doesn't feel 0:04:36.200 --> 0:04:37.719 like you're going to come up that two percent goal? 0:04:38.080 --> 0:04:40.719 But how long until you get there? How patient can 0:04:40.760 --> 0:04:41.000 you be? 0:04:41.720 --> 0:04:43.480 We got to be some of patient. You know. 0:04:44.200 --> 0:04:47.640 Take as just a microcosmic example, this thing with housing. 0:04:48.200 --> 0:04:52.039 We've seen the market rents coming down, but it takes 0:04:52.200 --> 0:04:55.839 a while for that to flow through into the let's 0:04:55.880 --> 0:04:59.440 call it the average housing prices that are in the CPI. 0:05:00.040 --> 0:05:00.880 It's got to be patient. 0:05:01.040 --> 0:05:04.160 I know everybody wants to say, ah, fine, vove, we're done. 0:05:04.360 --> 0:05:05.720 That's not how it works. 0:05:06.320 --> 0:05:10.560 If you walk the golden path and you walk that line, 0:05:11.080 --> 0:05:15.240 it's going to take a while. And rather than arguing 0:05:15.320 --> 0:05:19.760 about the peak rate of how many more rate increases 0:05:19.760 --> 0:05:22.560 do there need to be, what we should probably start 0:05:22.600 --> 0:05:25.520 thinking about is that, well, how long does this last 0:05:25.880 --> 0:05:26.800 that you're going to. 0:05:26.960 --> 0:05:29.000 Be at these elevated rates. 0:05:29.120 --> 0:05:33.159 It's been a five hundred plus basis point increase over 0:05:33.200 --> 0:05:37.599 a relatively short period. If you hold at five and 0:05:37.640 --> 0:05:41.839 a quarter, five and a half, five and whatever while 0:05:41.880 --> 0:05:44.840 inflation goes down, that is a restrictive environment. 0:05:44.920 --> 0:05:48.599 Holding is increasing restrictiveness in that sense. 0:05:48.760 --> 0:05:50.359 Austin, let me ask you one of the questions it 0:05:50.360 --> 0:05:52.839 came up this week, which is the Fitch rating on 0:05:52.920 --> 0:05:55.280 the US sovereign debt that took out surprised a lot 0:05:55.320 --> 0:05:58.839 of people. I think, is it important? And I'm not 0:05:58.880 --> 0:06:01.760 saying was the rating important in itself? But is what 0:06:01.800 --> 0:06:04.080 they're pointing toward important. 0:06:05.400 --> 0:06:09.040 In a vague sense? Yes, but everybody knows that. I mean, 0:06:09.080 --> 0:06:11.840 we went through the debt ceiling. Every day we're talking 0:06:11.880 --> 0:06:14.560 about this. This is dysfunctional. 0:06:15.080 --> 0:06:16.880 We've got to get out of this dynamic. 0:06:18.000 --> 0:06:20.720 I was around in Washington the last time we went 0:06:20.760 --> 0:06:24.599 through this downgrade thing. There's a couple of things I 0:06:24.640 --> 0:06:27.280 don't understand about it. Ultimately, I don't think it's gonna 0:06:27.320 --> 0:06:30.880 make that much difference. This isn't like a some obscure 0:06:30.920 --> 0:06:33.800 stock or bond that nobody knows and it's ah the 0:06:33.880 --> 0:06:35.880 rating agency went and looked at it, so you don't 0:06:35.880 --> 0:06:38.039 have to. I mean, this is US Treasury is the 0:06:38.080 --> 0:06:42.360 most observed market with the most information in the entire world. 0:06:42.720 --> 0:06:47.560 So h I don't know what their motivation was. I'm 0:06:47.560 --> 0:06:51.160 not gonna I'm not gonna guess at that, but I 0:06:51.200 --> 0:06:54.800 guess I don't see how something else is gonna be 0:06:54.880 --> 0:06:58.520 rated triple A. If they were defaulting on US treasuries, 0:06:58.560 --> 0:06:59.599 it seems like that would be. 0:06:59.600 --> 0:07:01.800 A pad hey for the market. But lets say ask 0:07:01.839 --> 0:07:02.560 you a different question. 0:07:02.600 --> 0:07:05.760 We've heard various FED presidents j Powell but also Jenn 0:07:05.839 --> 0:07:08.600 you don't talk about the fiscal sustainability of the path 0:07:08.640 --> 0:07:10.880 of the United States is and especially some concern of 0:07:10.960 --> 0:07:14.040 the long term that it's not sustainable. If that's right, 0:07:14.520 --> 0:07:17.000 what are the consequences of that, and what if anything 0:07:17.160 --> 0:07:18.880 can be done about it. 0:07:19.120 --> 0:07:22.000 That's a whole separate topic from the you know, what 0:07:22.040 --> 0:07:23.600 should the ratings of treasuries be. 0:07:23.720 --> 0:07:24.240 For right now? 0:07:24.320 --> 0:07:27.400 But fiction invoked that right in there is an announcement. 0:07:27.840 --> 0:07:32.080 But then the proper question is did something happen in 0:07:32.160 --> 0:07:35.320 the last two weeks that made you think that was different? 0:07:36.960 --> 0:07:39.840 As you know, the FED doesn't weigh in on fiscal policy. 0:07:39.920 --> 0:07:43.680 Congress and the administrations they had to sort that out. 0:07:44.040 --> 0:07:46.360 I think my read of the evidence is exactly what 0:07:46.400 --> 0:07:48.920 you say that the long run there's a fiscal gap 0:07:49.000 --> 0:07:52.480 in the United States. That long run gap smaller in 0:07:52.520 --> 0:07:55.240 the United States than in most of the advanced if 0:07:55.240 --> 0:07:58.400 not all of the advanced economies of the world because 0:07:58.440 --> 0:08:01.920 our demographics are better. It's rooted in the aging of 0:08:01.960 --> 0:08:05.880 the population and social security and medicare and things like that. 0:08:06.560 --> 0:08:11.440 And the US has got some choices that it has 0:08:11.480 --> 0:08:14.040 to make, but gets to make in a way that 0:08:14.160 --> 0:08:16.480 some other countries don't get to make them. They already 0:08:16.480 --> 0:08:19.480 have income tax rates higher than our raids. They already 0:08:19.520 --> 0:08:24.600 have twenty five percent vats, They have worse demographics, their spending. 0:08:24.320 --> 0:08:25.200 Levels already higher. 0:08:25.240 --> 0:08:29.400 To start with those fiscal questions, will they will be 0:08:29.520 --> 0:08:33.280 with us for decades because the baby boomers are going 0:08:33.320 --> 0:08:38.440 to all retire I think, you know, over the next 0:08:38.480 --> 0:08:42.440 couple of decades. That's different from what we're trying to 0:08:42.480 --> 0:08:44.760 do with the FED. You know, our job is we 0:08:44.880 --> 0:08:48.120 accept the economy as it is. We go watch the data, 0:08:48.480 --> 0:08:51.200 and we maximize employment and stabilize prices. 0:08:51.240 --> 0:08:52.040 That's what we're going to do. 0:08:52.160 --> 0:08:54.320 One other development this week, a lot of people took 0:08:54.400 --> 0:08:56.840 noted is Bank of America changed their call and recession. 0:08:57.200 --> 0:08:59.160 They had been predicting recession in the fourth quarter this 0:08:59.240 --> 0:09:01.000 year or the first of the and that sort of 0:09:01.000 --> 0:09:03.040 trails where we heard actually from the FED chair last 0:09:03.040 --> 0:09:06.480 week week that the FED staff now has taken recession 0:09:06.480 --> 0:09:07.280 designs off. 0:09:07.200 --> 0:09:08.600 Take We're going to walk that line. 0:09:08.679 --> 0:09:11.000 That's what I'm telling you, is that golden path, that's 0:09:11.040 --> 0:09:12.280 what we got to stay on. 0:09:12.520 --> 0:09:14.640 Is that where you are is. 0:09:15.240 --> 0:09:17.720 I don't know if it's just what I want or 0:09:17.760 --> 0:09:20.640 if that's where I am, but I feel like we've 0:09:20.640 --> 0:09:25.560 been getting promising numbers on inflation the new months of inflation, 0:09:26.040 --> 0:09:29.880 in core inflation, especially goods and especially housing over the 0:09:29.880 --> 0:09:32.719 next several months. That's what let's keep an eye on. 0:09:33.400 --> 0:09:35.800 That will tell us are we on this golden path 0:09:36.000 --> 0:09:38.880 or not. If we are able to pull us off, 0:09:39.200 --> 0:09:42.000 that will be a triumph. There are many smart people, 0:09:42.120 --> 0:09:45.040 and you've talked to them on the air, who say 0:09:45.200 --> 0:09:48.719 it's impossible. The FED kids, the FED has never been 0:09:48.720 --> 0:09:51.680 able to reduce inflation as much as we're reducing it, 0:09:51.920 --> 0:09:55.640 and we need to now without generating a big increase 0:09:55.679 --> 0:09:59.080 in the unemployment rate and a big recession. And while 0:09:59.120 --> 0:10:03.280 that has history been true, this was a weird business cycle, 0:10:04.120 --> 0:10:07.480 it can be a weird recovery. And I am hopeful 0:10:07.520 --> 0:10:09.960 that we can pull it off, and so far we've 0:10:09.960 --> 0:10:12.120 been doing it. You know, if you look back a year, 0:10:12.200 --> 0:10:15.319 the unemployment rate is not up, and inflation has come 0:10:15.360 --> 0:10:15.679 way down. 0:10:15.800 --> 0:10:17.040 In fact, it came down a little bit. I think 0:10:17.040 --> 0:10:19.000 this month, if anything, can you gotta tell you right 0:10:19.120 --> 0:10:20.040 from what was expected. 0:10:20.200 --> 0:10:22.160 But I'm absolutely clear on this. 0:10:22.320 --> 0:10:24.640 You think that we can get inflation under control with 0:10:24.880 --> 0:10:26.280 unemployment rate in the mid. 0:10:26.280 --> 0:10:29.679 Threes, I don't know if it's exactly the mid threes. 0:10:30.760 --> 0:10:33.719 What my goal and I think that we can pull off, 0:10:33.840 --> 0:10:36.599 and it's what we should try, is to stay on 0:10:36.679 --> 0:10:40.160 a path where you get inflation down and you don't 0:10:40.240 --> 0:10:42.520 have a major recession. And there are a lot of 0:10:42.600 --> 0:10:46.320 people who if you have in your mind this stable 0:10:46.480 --> 0:10:54.040 relationship trade off between unemployment and inflation, that's that the 0:10:54.360 --> 0:10:58.480 golden path is impossible. But if you believe that the 0:10:58.640 --> 0:11:01.560 data have just not been backing that up, we've forgotten 0:11:01.720 --> 0:11:05.920 inflation down a fair amount without increasing the unemployment rate, 0:11:06.400 --> 0:11:09.960 and the job market does need to get into balance. 0:11:10.040 --> 0:11:13.280 We have been in spots where it's been out of 0:11:13.400 --> 0:11:17.200 balance so hot that it's that it's it's not stable. 0:11:18.480 --> 0:11:21.480 But we're we're doing that over these past couple of months. 0:11:21.520 --> 0:11:24.360 You see the quit rate, you see the vacancy rate 0:11:25.320 --> 0:11:28.200 relative to how many unemployed there are and you see 0:11:28.240 --> 0:11:30.240 the jobs numbers pulling more into balance. 0:11:30.440 --> 0:11:34.199 Walk that line, Walk that line. Okay, Austin goes with 0:11:34.240 --> 0:11:36.240 thank you so much. He is the president, of course, 0:11:36.320 --> 0:11:37.280 of the Chicago Fed. 0:11:39.120 --> 0:11:42.480 You're listening to the team Ken's are Live program Bloomberg 0:11:42.559 --> 0:11:45.760 Markets weekdays at ten am Eastern on Bloomberg dot com, 0:11:46.000 --> 0:11:49.120 the iHeartRadio app and the Bloomberg Business App, or listen 0:11:49.240 --> 0:11:51.360 on demand wherever you get your podcasts. 0:11:53.320 --> 0:11:55.199 Let's get back to the jobs number. You know, we 0:11:55.280 --> 0:11:57.319 had a little bit lighter than expect in terms of 0:11:57.320 --> 0:11:59.800 the total number of jobs built, stronger on the wage side. 0:12:00.400 --> 0:12:01.880 So let's break it down a little bit. We'd like 0:12:01.960 --> 0:12:03.920 to do that on Jobs Day with Tom Gimble. He's 0:12:03.960 --> 0:12:07.840 the CEO at LaSalle Network. Tom, what was your takeaway 0:12:07.880 --> 0:12:10.600 from what we heard this morning from the federal government 0:12:10.640 --> 0:12:11.160 on the jobs? 0:12:11.720 --> 0:12:13.199 Well, first, I've got a bone to pick that I 0:12:13.280 --> 0:12:15.080 was in the office last month or in the studio 0:12:15.200 --> 0:12:16.280 last month, and you weren't. 0:12:16.040 --> 0:12:17.760 There, aid yes, So. 0:12:19.240 --> 0:12:21.440 Just for the record, good, you know what I'm gonna say, 0:12:21.720 --> 0:12:25.240 we have one hundred and eighty seven thousand jobs added. 0:12:25.840 --> 0:12:28.760 I mean, we're kidding ourselves that we say it's not 0:12:28.920 --> 0:12:33.800 a good jobs market. It is a really really strong market. 0:12:33.840 --> 0:12:36.360 I think it sends the right message to both Wall 0:12:36.440 --> 0:12:39.439 Street and Main Street is that the market is still very, 0:12:39.600 --> 0:12:41.880 very healthy. And at the same time, it sends a 0:12:41.880 --> 0:12:43.920 message to the Fed that it's down a little bit 0:12:44.000 --> 0:12:46.600 from where it was. So we'll probably see a little 0:12:46.640 --> 0:12:48.920 bit of a hold at the next rates meeting and 0:12:49.720 --> 0:12:50.400 they won't raise. 0:12:51.640 --> 0:12:51.840 Yeah. 0:12:51.960 --> 0:12:54.760 Interesting. I mean when you look through where the jobs 0:12:54.760 --> 0:12:57.839 are being created, what stood out to you? 0:12:58.920 --> 0:13:01.440 I mean, listen, it's always going to be bigger when 0:13:01.480 --> 0:13:03.679 you're doing when we're in this type of market with 0:13:03.800 --> 0:13:07.760 low unemployment in the services sector, in the hospitality sector, 0:13:08.160 --> 0:13:12.079 and I think we're looking for bad news instead of 0:13:12.160 --> 0:13:16.480 appreciating what's going on. We've got record low unemployment again, 0:13:17.040 --> 0:13:20.360 We've got increase in wages a four tenths of a 0:13:20.440 --> 0:13:24.400 point again, right. We continue to see these really positive 0:13:24.480 --> 0:13:27.559 signs throughout the report, and we're trying to find the 0:13:27.760 --> 0:13:30.880 one thing that might be reason for alarm. We know 0:13:31.000 --> 0:13:33.800 that eventually we're going to hit it a bumpy cycle, 0:13:34.200 --> 0:13:36.720 but we should really enjoy things while they're good. 0:13:37.640 --> 0:13:40.360 So, I mean, what's really good in this one if 0:13:40.360 --> 0:13:42.640 you're a worker, is four point four percent gain and 0:13:42.679 --> 0:13:45.400 wages from the prior year, and that's the second strength 0:13:45.440 --> 0:13:48.559 month we've seen that and it was above all economists 0:13:48.640 --> 0:13:51.839 forecasts who called for a slowdown. So good for the 0:13:51.880 --> 0:13:53.079 workers out there. What's driving that? 0:13:53.160 --> 0:13:53.480 Do you think? 0:13:54.280 --> 0:13:56.319 I think it's inflation, you know, I mean, I think 0:13:56.360 --> 0:13:59.439 this is the problem that we have is that main 0:13:59.520 --> 0:14:02.719 Street does and understand that when wages go up for 0:14:02.800 --> 0:14:05.320 everybody across the board, that the cost of goods are 0:14:05.360 --> 0:14:09.679 going to go up equally, if not exponentially, to cover that. 0:14:09.960 --> 0:14:14.079 And so, you know, I'm not sure if everybody's realized 0:14:14.120 --> 0:14:17.360 that making more money and having things cost more money 0:14:17.440 --> 0:14:23.880 is sometimes a neutral situation. And so there's some lack 0:14:23.960 --> 0:14:27.200 of education that exists with the common person, and I'm 0:14:27.240 --> 0:14:30.160 including myself in that, with all of us that we 0:14:30.280 --> 0:14:33.480 need to understand how the markets work. And what we're 0:14:33.520 --> 0:14:36.040 seeing though, is that companies are still hiring, They're not 0:14:36.240 --> 0:14:39.200 hiring in mass. That's the biggest challenge that we're seeing 0:14:39.800 --> 0:14:42.760 is that in twenty twenty one, in twenty twenty two, 0:14:42.840 --> 0:14:45.640 it was such a rebound from COVID that companies were 0:14:45.720 --> 0:14:48.840 hiring hundreds, if not thousands of people in order to 0:14:48.920 --> 0:14:53.400 take advantage of this recovery from the three month recession 0:14:53.440 --> 0:14:56.240 that existed in twenty twenty because of the pandemic. Now 0:14:56.280 --> 0:14:59.480 we're in a very similar situation to twenty eighteen and 0:14:59.520 --> 0:15:03.040 two thousand nineteen, which is a really good, strong economy. 0:15:03.360 --> 0:15:06.360 But the difference is then we were scrambling for people. 0:15:06.680 --> 0:15:09.240 Now we're not. We've seen people re enter the workforce, 0:15:09.280 --> 0:15:11.440 We've seen a lot of the gig workers transition back, 0:15:12.040 --> 0:15:14.400 and businesses really seems to be healthy. 0:15:15.280 --> 0:15:17.360 What do you make of the fact that every single 0:15:17.520 --> 0:15:19.720 payroll release in the first half of the year has 0:15:19.800 --> 0:15:23.600 been revised lower. Apparently this is the longest streak of 0:15:24.600 --> 0:15:29.040 downward revisions since the global financial crisis. What do you 0:15:29.080 --> 0:15:29.400 think of that? 0:15:31.040 --> 0:15:35.160 I think that it shows that predictions and economists are 0:15:35.640 --> 0:15:38.200 not always right. I think it shows that we have 0:15:38.360 --> 0:15:42.880 to be careful of relying too heavily on what we 0:15:43.040 --> 0:15:46.560 process of information versus the eye test and the smell 0:15:46.680 --> 0:15:49.160 test of what we see on the street, and that 0:15:49.400 --> 0:15:54.960 the revisions are real and legitimate. But at the same time, 0:15:55.360 --> 0:15:59.160 it's not like we're seeing negative jobs reports every month. 0:15:59.240 --> 0:16:02.240 We're still seeing so you know, I think again we're 0:16:02.360 --> 0:16:05.680 looking for for negativity and as I say every month, 0:16:06.040 --> 0:16:08.400 you know, let's stop being chicken little and let's let's 0:16:08.480 --> 0:16:10.760 enjoy the rain and not think the whole sky's falling. 0:16:11.240 --> 0:16:14.960 Yeah all right, Tom, good jobs number, no question about it, 0:16:15.280 --> 0:16:17.720 continues to be. This job mark is just so resilient. 0:16:17.720 --> 0:16:21.080 It's just amazing. Tom Gimble, CEO at LaSalle Network. We 0:16:21.240 --> 0:16:23.440 like talking to Tom every month when we get those 0:16:23.680 --> 0:16:24.240 jobs numbers. 0:16:24.480 --> 0:16:27.560 You're listening to the tape Cat's are live program Bloomberg 0:16:27.640 --> 0:16:31.200 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:16:31.320 --> 0:16:34.480 tune in app, Bloomberg dot Com, and the Bloomberg Business app. 0:16:34.560 --> 0:16:37.360 You can also listen live on Amazon Alexa from our 0:16:37.400 --> 0:16:41.760 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:16:42.840 --> 0:16:45.000 We also love talking to anaag Rana when we've got 0:16:45.080 --> 0:16:48.960 two big tech companies reporting earnings. Ana rog Rana, senior 0:16:49.000 --> 0:16:54.000 tech analysts for Bloomberg Intelligence, joins us here. So, honurrog 0:16:54.440 --> 0:16:57.120 you know we've got Amalon, Amazon, We've got Apple. Let's 0:16:57.120 --> 0:17:00.720 start with Apple. The services was the story here? Is 0:17:00.800 --> 0:17:02.760 that where I should focus or should I focus on 0:17:02.800 --> 0:17:05.760 the fact that you know they're not selling the growth 0:17:05.880 --> 0:17:09.040 rate for you know, iPhones and all that kind of stuff, 0:17:09.240 --> 0:17:11.240 not what it was where should we put the focus. 0:17:12.920 --> 0:17:15.160 So the focus really is for iPhone. As we said 0:17:15.359 --> 0:17:17.080 even in the preview, it's going to be a boring 0:17:17.160 --> 0:17:19.159 quarter because the next one is going to be launched 0:17:19.520 --> 0:17:22.120 in September, which you know should start selling let's say 0:17:22.160 --> 0:17:24.960 sometime in October or November, and that's really what the 0:17:25.119 --> 0:17:27.680 next push for the cycle is going to come from. 0:17:28.280 --> 0:17:30.639 Services growth is actually a good thing because it's a 0:17:30.760 --> 0:17:33.560 much more higher margin business and a much more recurring 0:17:33.640 --> 0:17:36.520 business that we always understand. And it's also once you 0:17:36.760 --> 0:17:38.479 you know, get on iCloud, you're not going to get 0:17:38.560 --> 0:17:41.440 back and try to get your data somewhere else. So 0:17:41.600 --> 0:17:45.080 that's really encouraging that it's still growing in constant currency 0:17:45.240 --> 0:17:49.040 in double digits. Margins are over seventy percent in terms 0:17:49.080 --> 0:17:52.320 of gross margins. So I like it both the product 0:17:52.520 --> 0:17:55.040 has to come back. The product growth has to come back, 0:17:55.359 --> 0:17:57.959 and I think that's just a function of time. It's 0:17:58.040 --> 0:17:59.840 not a question that it's never going to be back, 0:18:00.200 --> 0:18:01.960 just a matter of a quart or two that we 0:18:01.960 --> 0:18:04.040 should see a bounce back in iPhones. 0:18:04.560 --> 0:18:08.159 I feel like we have this consternation every time Apple 0:18:08.400 --> 0:18:12.119 reports that Hey, they haven't introduced a massive amount of 0:18:12.240 --> 0:18:18.199 new exceptional products. They haven't recreated the iPhone enthusiasm. I mean, 0:18:18.240 --> 0:18:20.760 should we just generally get away from that? Should we 0:18:20.920 --> 0:18:25.080 expect them to become much more of a services oriented business. 0:18:25.119 --> 0:18:27.639 I hate to say that, because you know of what 0:18:27.760 --> 0:18:28.560 the iPhone is. 0:18:29.920 --> 0:18:32.680 Yeah, as a financial analyst, that's a very the right 0:18:32.720 --> 0:18:34.680 way to do it. But you know, if I really 0:18:34.760 --> 0:18:37.119 want to get and talk about you know, new zy things, 0:18:37.200 --> 0:18:39.920 then you know, it's always fun to talk about new products. 0:18:39.960 --> 0:18:42.560 But I don't think any new product is going to 0:18:42.640 --> 0:18:45.480 be anywhere close to what the iPhone is to Apple. 0:18:45.760 --> 0:18:48.159 And largely the reason for that is the size of 0:18:48.560 --> 0:18:51.480 the install based the reach of what it does. Even 0:18:51.520 --> 0:18:53.240 if you think about a car, I mean, how many 0:18:53.320 --> 0:18:56.119 units can they sell mixed reality headsets? How many can 0:18:56.160 --> 0:18:59.560 they sell? And the iPhone they sell over two hundred 0:18:59.640 --> 0:19:02.800 million the units a year of five phones. Irrespective of 0:19:02.880 --> 0:19:06.000 the economy, they sell a lot of iPhones and that 0:19:06.200 --> 0:19:08.680 really should and is the most important part of that. 0:19:09.320 --> 0:19:12.280 All right, let's switch gears to our friends in Seattle. 0:19:12.359 --> 0:19:16.119 Amazon really strong quarter, the street really likes what they 0:19:16.480 --> 0:19:18.400 heard last night. What was your takeaway. 0:19:19.480 --> 0:19:21.800 Yeah, I've been smiling since yesterday evening because this is 0:19:21.840 --> 0:19:25.119 really I think, but with the bottom to the cloud 0:19:25.160 --> 0:19:27.439 story that you know, we have been trying to defend 0:19:27.480 --> 0:19:28.400 for almost a year. 0:19:28.400 --> 0:19:30.080 Now that you know, please do not worry. 0:19:30.119 --> 0:19:32.040 It will come back. It will come back. And I 0:19:32.160 --> 0:19:34.560 think they said that maybe the next quarter you will 0:19:34.600 --> 0:19:38.440 see similar growth rates to this year, which is this quarter, 0:19:38.480 --> 0:19:40.720 which is somewhere around twelve percent, and then you know, 0:19:40.800 --> 0:19:44.040 we are really expecting an acceleration going into next year. 0:19:44.160 --> 0:19:46.560 We just put a note out we think next year 0:19:46.560 --> 0:19:49.320 AWS growth is going to be north of twenty percent. 0:19:50.280 --> 0:19:53.359 You know, market consensus still is about fourteen fifteen percent. 0:19:53.680 --> 0:19:56.320 We think we should see as a good rebound not 0:19:56.560 --> 0:19:58.480 just in growth rate, but margins also. 0:19:59.119 --> 0:20:03.080 I'm not sure exactly how many times Amazon mentioned artificial intelligence. 0:20:04.400 --> 0:20:08.080 What do you make of how their mentions of AI 0:20:08.359 --> 0:20:11.000 and generative AI and where that plays out in their business. 0:20:11.359 --> 0:20:13.800 I mean, are you positive on that or do you 0:20:13.840 --> 0:20:15.080 think they're hitting the right tone? 0:20:16.440 --> 0:20:18.440 Yeah, I think I'm goose in the minority because I 0:20:18.600 --> 0:20:20.359 was not there. It was probably the only not the 0:20:20.440 --> 0:20:22.480 only one was saying that, oh no AWS to throw 0:20:22.520 --> 0:20:24.639 behind it, Like I don't believe any of that stuff 0:20:24.680 --> 0:20:27.440 because at the end of the day, AWS controls the 0:20:27.600 --> 0:20:30.680 biggest portion of cloud infrastructure, which is the nuts and 0:20:30.760 --> 0:20:34.560 bolts of what people need to put this particular piece together. 0:20:34.840 --> 0:20:37.960 They may not have a relationship with open EI, but 0:20:38.119 --> 0:20:41.080 that is not everything. If a company needs to develop 0:20:41.359 --> 0:20:44.159 generate AAI product in house where they're going to take 0:20:44.200 --> 0:20:47.040 their own data, not worry about exposing it to any 0:20:47.119 --> 0:20:50.920 other outside large language model or any AI model, They're 0:20:50.920 --> 0:20:56.000 going to build it using cloud infrastructure tools, AWS being 0:20:56.040 --> 0:20:57.800 the leader among them. Now, it's going to take some 0:20:57.880 --> 0:21:01.159 time for this thing to really impact growth, probably two 0:21:01.240 --> 0:21:03.760 to three years, but I really think Amazon is one 0:21:03.800 --> 0:21:05.600 of the biggest beneficiaries of the strength. 0:21:06.280 --> 0:21:08.680 All Right, honurrog Great Stuff has always really appreciate getting 0:21:08.680 --> 0:21:10.800 a few minutes of your time on rog Rana. He's 0:21:10.840 --> 0:21:15.639 a senior tech analyst for Bloomberg Intelligence. Two big heavyweights 0:21:15.720 --> 0:21:17.800 last night, Amazon and Apple a little bit of tail 0:21:17.960 --> 0:21:20.960 of two tapes there. Apple trading off about three percent 0:21:21.080 --> 0:21:26.240 here and Amazon up ten percent. Big big move for Amazon. 0:21:26.320 --> 0:21:28.840 So get skinny on what's happening in the world of 0:21:28.880 --> 0:21:29.199 big tech. 0:21:29.240 --> 0:21:32.760 With the honorrog Rana, you're listening to the team. Ken's 0:21:32.760 --> 0:21:35.840 a our live program, Bloomberg Markets weekdays at ten am 0:21:35.920 --> 0:21:39.280 Eastern on Bloomberg dot com, the iHeartRadio app and the 0:21:39.359 --> 0:21:42.360 Bloomberg Business App, or listen on demand wherever you get 0:21:42.400 --> 0:21:43.240 your podcasts. 0:21:44.760 --> 0:21:49.360 Quincy Crosby, chief Global strategist for LPL Financial. Quincy, thanks 0:21:49.400 --> 0:21:52.000 so much for joining us again again. We had a 0:21:52.600 --> 0:21:55.600 jobs print today. We've got some a lot of inflation 0:21:55.680 --> 0:21:58.560 data points we've seen over the past several weeks. You 0:21:58.680 --> 0:22:01.919 put it all together, what do you expect our Federal 0:22:01.960 --> 0:22:04.160 Reserve to do in the coming months. 0:22:06.520 --> 0:22:08.840 Well, you know, I always like to say that the 0:22:08.880 --> 0:22:11.080 Fed is data dependent, but I think the market is 0:22:11.400 --> 0:22:15.240 more ferociously data dependent than even the Fed. And you know, 0:22:15.359 --> 0:22:18.080 next week we do get the CPI report. They've got 0:22:18.200 --> 0:22:21.560 over forty five days before they have to make a decision. 0:22:22.200 --> 0:22:25.080 But the fact is, I don't think that they are 0:22:25.160 --> 0:22:28.800 going to back down if they feel that inflation remains 0:22:28.840 --> 0:22:32.399 sticky and is not untangling fast enough. I think the 0:22:32.480 --> 0:22:35.680 market makes a mistake that the Fed will somehow say, well, 0:22:35.840 --> 0:22:38.480 let's just pause and wait and see. They're not going 0:22:38.520 --> 0:22:41.240 to wait and see that much. And besides which you know, 0:22:41.359 --> 0:22:44.040 they don't want to get involved in the election season. 0:22:44.160 --> 0:22:49.400 That's something the FED has always try to keep away from. 0:22:50.520 --> 0:22:53.439 But more than that, you know, they're focused on making 0:22:53.640 --> 0:22:57.240 sure that inflation moves in the right direction and doesn't 0:22:57.280 --> 0:23:02.040 have a chance to create another bout of inflation. And 0:23:02.160 --> 0:23:05.960 you mentioned gasoline prices. Granted it's headline, but let's just 0:23:06.080 --> 0:23:10.560 face it. Consumers are very much affected by gasoline prices 0:23:10.640 --> 0:23:13.800 in terms of how they see future inflation, and that's 0:23:13.880 --> 0:23:15.400 something the FED does not want to see. 0:23:15.760 --> 0:23:18.840 Yeah, but isn't that sort of I guess the whole 0:23:18.880 --> 0:23:23.359 idea that the FED can push against Saudi Arabia making 0:23:23.440 --> 0:23:27.720 decisions to extend its you know, production cuts. Isn't it 0:23:27.800 --> 0:23:29.520 just kind of a fallacy that the FED has the 0:23:29.600 --> 0:23:34.879 true ability to control exactly what's happening with oil prices 0:23:34.920 --> 0:23:38.160 And shouldn't companies have been factoring this in, just understanding 0:23:38.200 --> 0:23:41.200 that most of the commentary from energy analysts was that 0:23:41.280 --> 0:23:43.040 oil is probably going to be tight by the end 0:23:43.040 --> 0:23:43.359 of the year. 0:23:45.080 --> 0:23:46.120 Well, yeah, I know, the FED. 0:23:46.280 --> 0:23:49.360 The FED can't. I mean the fact, look, the administration 0:23:49.560 --> 0:23:53.080 couldn't pressure your mind. Went to uh Saudia Radio to 0:23:53.119 --> 0:23:56.040 try to come back with a good deal and you know, 0:23:56.280 --> 0:23:59.439 just the opposite. So they have their own vested in US. 0:23:59.520 --> 0:24:00.240 We know it is. 0:24:00.760 --> 0:24:03.480 It is to get all prices up as much as possible. 0:24:03.920 --> 0:24:07.720 Their budget is huge. They're building cities, they're trying to 0:24:08.320 --> 0:24:13.080 create a landscape post crew to oil, and that requires 0:24:13.240 --> 0:24:16.840 higher all prices. So they you know, the market had 0:24:16.920 --> 0:24:21.959 expected that before today's panel discussion that they're having online, 0:24:22.200 --> 0:24:24.120 that the Satties would come in and say, hey, we're 0:24:24.160 --> 0:24:27.400 going to extend those quote unquote voluntary cuts through September, 0:24:27.640 --> 0:24:31.080 which they did. But what's interesting about this is that 0:24:32.440 --> 0:24:36.199 it didn't work. I mean, when the market was fixated 0:24:36.240 --> 0:24:42.040 and obsessed by recession, it actually made no difference about 0:24:42.080 --> 0:24:45.520 the production cuts, absolutely no difference. So now all of 0:24:45.600 --> 0:24:48.000 a sudden, when you have sort of a light at 0:24:48.040 --> 0:24:50.840 the end of the tunnel in terms of the GDP 0:24:51.040 --> 0:24:55.719 growth in the country, suddenly the question is what about 0:24:55.880 --> 0:24:59.680 those prices? You know what's going to happen. Look, without 0:24:59.760 --> 0:25:02.000 some misogynous shock, it's hard to see that they're going 0:25:02.080 --> 0:25:04.800 to get all prices up to ninety bucks a barrel 0:25:04.840 --> 0:25:07.840 on WTI. But you see that it's already moving up 0:25:07.880 --> 0:25:12.800 above eighty. Little bit, little bit companies do well, American 0:25:13.160 --> 0:25:16.680 all companies do well forty five dollars a barrel. But 0:25:16.880 --> 0:25:21.520 the fact remains for the average American. We know this statistically, 0:25:21.880 --> 0:25:25.400 they may not even drive, they may drive electric vehicles, 0:25:25.680 --> 0:25:29.120 but when they see those prices inching higher the one 0:25:29.200 --> 0:25:34.960 year and especially the three year projections or inflation move higher, 0:25:35.000 --> 0:25:37.560 and here's the other statistic that goes right along with it, 0:25:38.200 --> 0:25:43.679 then they blame the administration, regardless of power, regardless of party. 0:25:44.160 --> 0:25:46.680 All right, Quincy, we've had about eighty percent of the 0:25:47.440 --> 0:25:51.000 S and P five hundred companies report here. Do you 0:25:51.040 --> 0:25:52.320 feel like we're at earnings trough? 0:25:52.440 --> 0:25:52.560 Here? 0:25:53.040 --> 0:25:55.280 How do you think about earnings going forward based upon 0:25:55.359 --> 0:25:57.440 what you've seen so far in this second quarter? 0:25:58.320 --> 0:26:00.920 Well, you know, it's been a just market. It is 0:26:00.960 --> 0:26:02.560 in the market. It has not been a market that 0:26:02.720 --> 0:26:05.560 has you know, given a pass to companies that are missing, 0:26:05.680 --> 0:26:10.159 even missing slightly. They've been punished. But the fact of 0:26:10.240 --> 0:26:15.639 the matter is there's resiliency in the companies, obviously X energy. 0:26:16.520 --> 0:26:19.080 But the fact of the matter is we also see 0:26:19.119 --> 0:26:21.520 that twenty twenty four, we'll see, you know, a nice 0:26:22.320 --> 0:26:25.760 climb higher with the companies. The thing to look for, though, 0:26:26.440 --> 0:26:29.359 to push those prices higher, the share prices higher. Is 0:26:29.440 --> 0:26:31.720 that we also expect to see a pullback in the 0:26:31.760 --> 0:26:34.919 amount of share buybacks, and you know that has been 0:26:34.960 --> 0:26:38.000 a tremendous catalyst for the stock market. 0:26:39.200 --> 0:26:41.200 Quincy talk us through a little bit more on the 0:26:41.560 --> 0:26:44.920 jobs report today. You know, was there was there a 0:26:44.960 --> 0:26:49.320 surprising detail for you to come out of this in 0:26:49.440 --> 0:26:50.639 terms of where we're headed. 0:26:53.119 --> 0:26:56.600 Well, it was interesting to see the unemployment rate come down, right, 0:26:56.840 --> 0:27:01.879 and then to see the wage growth remain quote unquote sticky. 0:27:02.320 --> 0:27:04.800 The Fed doesn't want to see that, And why that's 0:27:04.840 --> 0:27:09.120 so important is there is a political tug of war 0:27:09.240 --> 0:27:13.280 about it. You can see it in the part of 0:27:13.320 --> 0:27:16.040 the political parties, but you also see it on Wall Street. 0:27:16.400 --> 0:27:19.480 Why does that bother the Fed? Why does that bother 0:27:19.960 --> 0:27:24.280 Chairman Powell specifically? Why can't he be happy about the 0:27:24.400 --> 0:27:28.080 higher wages because they're going to low wage earners. And 0:27:28.560 --> 0:27:33.760 the fact is the concern from completely a political perspective 0:27:33.880 --> 0:27:38.040 is companies want to pass along those costs once the 0:27:38.160 --> 0:27:41.040 wages are higher. It is an input cost and it 0:27:41.160 --> 0:27:44.760 is one of the most important input costs for companies. 0:27:45.200 --> 0:27:48.960 So it hasn't leveled off. Everyone was expecting three tenths 0:27:49.119 --> 0:27:52.159 of a percent. It's stay at four tenths of percent. 0:27:52.720 --> 0:27:56.200 That is what was so surprising, the expectations and the 0:27:56.320 --> 0:27:59.280 hopes or let that come down. And boy will we 0:27:59.440 --> 0:28:03.159 celebrate because that I think the market felt that'll clinch it. 0:28:03.440 --> 0:28:07.480 The Fed is finished, all right, Quincy, given that backdob 0:28:07.520 --> 0:28:09.399 as it relates to interest rates, that backdob as it 0:28:09.440 --> 0:28:11.560 relates to some of the economic conditions out there. And 0:28:11.640 --> 0:28:15.680 we had mister Goolsby from the FED talk to David 0:28:15.720 --> 0:28:18.600 Weston today from Bloomberg saying that they're trying to walk 0:28:18.680 --> 0:28:21.720 that fine line of keeping inflation in check while not 0:28:21.800 --> 0:28:25.360 push his economy into recession. Given all that background, I've 0:28:25.359 --> 0:28:27.840 got a market that's doing great this year. The S 0:28:27.880 --> 0:28:30.440 and P five hundreds up about eighteen percent, the nastacs 0:28:30.520 --> 0:28:33.480 up about thirty four percent. How much more do we 0:28:33.600 --> 0:28:35.840 have to go here? Should I be jumping in here? 0:28:35.920 --> 0:28:36.520 What's your call? 0:28:38.000 --> 0:28:38.920 Well, you know, in. 0:28:39.040 --> 0:28:43.240 Terms of seasonality, unless there's a surprise and this turns 0:28:43.280 --> 0:28:45.320 out to be a good good season as opposed to 0:28:46.120 --> 0:28:50.600 shopping and dicey, how many catalysts are there right now? 0:28:50.720 --> 0:28:54.280 Maybe next week the CPI report could be a tremendous 0:28:54.360 --> 0:28:58.160 catalyst to push this market up despite the negative seasonality. 0:28:58.520 --> 0:29:01.680 So if we start to see that core come down, 0:29:02.120 --> 0:29:05.360 I think it could be again a catalyst to keep 0:29:05.400 --> 0:29:09.520 the market moving higher. But earnings are an important catalyst. 0:29:09.920 --> 0:29:13.760 And obviously we're going to get the a retail picture 0:29:13.800 --> 0:29:17.720 about the US consumer with the consumer consumer names. But 0:29:18.200 --> 0:29:22.200 remember it has been led by the big tech. That's 0:29:22.280 --> 0:29:25.840 what started all of this, the big tech megateech led. 0:29:26.040 --> 0:29:28.240 So maybe you have to wait until August twenty third 0:29:28.320 --> 0:29:30.800 for the video to come out. That was the one 0:29:31.760 --> 0:29:36.280 that was the one performance. It was a triple play right, 0:29:37.000 --> 0:29:40.800 revenue growth, bottom line, the guidance was stupendous, and what 0:29:40.960 --> 0:29:45.360 it did was it confirmed that high move in the 0:29:45.440 --> 0:29:49.200 meg tech anything associated with artificial intelligence. They're coming out 0:29:49.240 --> 0:29:51.800 on August twenty third. The market may have to wait 0:29:51.880 --> 0:29:54.840 for that. But overall, if we could see that core 0:29:55.280 --> 0:29:59.560 super core inflation coming down at a quicker pace that 0:30:00.080 --> 0:30:03.920 tangled the stickiness, that'll be a tremendous catalyst for the market, 0:30:04.000 --> 0:30:05.400 regardless of season reality. 0:30:05.600 --> 0:30:09.479 All right, appreciate that. Quincy Crosby, Chief Global Strategist lp 0:30:09.680 --> 0:30:11.880 L Financial always appreciate Gett Quincy's perspective. 0:30:11.880 --> 0:30:16.480 Here you're listening to the tape cansur live program Bloomberg 0:30:16.600 --> 0:30:20.160 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:30:20.240 --> 0:30:23.440 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:30:23.520 --> 0:30:26.280 You can also listen live on Amazon Alexa from our 0:30:26.360 --> 0:30:31.000 flagship New York station, Just Say Alexa, playing Bloomberg eleven thirty. 0:30:31.720 --> 0:30:34.120 Looking at the risk on a take in the market today. 0:30:34.160 --> 0:30:36.040 I'm going to describe some of the moves today, some 0:30:36.200 --> 0:30:40.320 of it potentially to the comments from Austin Goldsby, President 0:30:40.320 --> 0:30:42.760 of the Federal Reserve Bank of Chicago. Hughes was interviewed 0:30:42.800 --> 0:30:46.320 by Bloomberg's David Weston earlier at in Aspen, Colorado, which 0:30:46.360 --> 0:30:48.360 is a scam in and of itself. I'll get to 0:30:48.400 --> 0:30:52.400 it later, but Ike said he feels that the Federal 0:30:52.440 --> 0:30:56.000 Reserve is making some headway, having some success of walking 0:30:56.040 --> 0:31:00.320 that fine line between fighting inflation without pushing the me 0:31:00.480 --> 0:31:03.200 into a recession. So maybe that's how anything's apple. Let's 0:31:03.280 --> 0:31:05.360 check in with somebody who does this stuff for a living. 0:31:05.440 --> 0:31:09.880 Jonathan Hurdle. He's executive chairman. Hurdle, Callahan and Company founded 0:31:09.920 --> 0:31:12.080 that company back in eighty eight was a Goldman Sachs 0:31:12.160 --> 0:31:15.120 before there was an officer in the US Marine Corps 0:31:15.120 --> 0:31:17.440 from nineteen seventy five to nineteen eighty two. So we 0:31:17.880 --> 0:31:19.880 certainly thank him for service there. But for me, the 0:31:19.960 --> 0:31:24.360 highlight is the NBA from Penn State. Good stuff there. Hey, John, 0:31:24.680 --> 0:31:27.640 you're out in Wyoming. Why I don't know, but you're 0:31:27.680 --> 0:31:30.480 out in Wyoming. Yeah, you're wearing a guard but like 0:31:30.800 --> 0:31:33.080 you'd wear on Wall Street. Dude, you got this nice 0:31:33.120 --> 0:31:35.960 shirt this tie. Is that a little formal for Wyoming? 0:31:37.760 --> 0:31:39.880 It is a little formal for Wyoming. But we're managing 0:31:39.920 --> 0:31:42.080 twenty billion dollars and we need to pay attention wherever 0:31:42.120 --> 0:31:42.320 we are. 0:31:42.520 --> 0:31:45.280 That's what I like to hear. Very good. So Jonathan morning, 0:31:45.800 --> 0:31:48.520 Good morning, sir. How do you feel about this market? 0:31:48.600 --> 0:31:50.520 Cause we're looking at the S and P up seventeen 0:31:50.600 --> 0:31:54.680 eighteen percent, we've got the NASDAC up thirty four to 0:31:54.760 --> 0:31:57.240 thirty five, and boy if that's been a heck of 0:31:57.280 --> 0:32:00.040 a run off of a terrible twenty twenty two. What 0:32:00.080 --> 0:32:01.440 are you telling your clients these days? 0:32:03.080 --> 0:32:05.080 Well, it's pretty much a stady as she goes kind 0:32:05.080 --> 0:32:09.959 of a market here. We have negotiated as that Austin 0:32:10.040 --> 0:32:11.880 Goldsby has said, you know, we're sort of on a 0:32:11.920 --> 0:32:14.680 golden path. You just mentioned his name. So we've been 0:32:14.720 --> 0:32:19.400 able to avoid a recession. Inflation is coming down, wage 0:32:19.480 --> 0:32:22.200 growth is increasing, but not so much to be a problem. 0:32:22.720 --> 0:32:27.920 So it is, you know, amazingly positive all the things 0:32:27.960 --> 0:32:31.000 that are coming together here. And you know, the United 0:32:31.040 --> 0:32:33.520 States is doing better than the rest of the world. 0:32:33.600 --> 0:32:37.320 This free enterprise thing seems to be working. And you know, 0:32:37.400 --> 0:32:40.480 we've got terrific managers in this country. See, we just 0:32:40.560 --> 0:32:43.520 heard on the newsburg on the Bloomberg Business Flash that 0:32:43.640 --> 0:32:47.440 eighty percent of reported earnings have surprised, either met or 0:32:47.480 --> 0:32:50.240 surprised on a positive side. So good things are happening. 0:32:51.160 --> 0:32:53.480 The excesses that we worried about don't seem to be 0:32:53.560 --> 0:32:57.360 coming through. So it's it's just everything's working right now. 0:32:58.040 --> 0:33:01.520 Well, we're seeing, you know, continue added jobs every time 0:33:01.600 --> 0:33:04.320 we get a job's report number. We're seeing that those 0:33:04.400 --> 0:33:09.200 bright spots for corporate earnings are things too good. I mean, 0:33:09.320 --> 0:33:13.120 is this going to push the Federal Reserve to continue 0:33:13.320 --> 0:33:16.720 to raise interest rates maybe more than we had and 0:33:17.000 --> 0:33:19.479 then the market even is anticipating. 0:33:20.360 --> 0:33:23.000 Well, good morning, simone. My sense is you know, you 0:33:23.080 --> 0:33:26.000 see the tenure coming down ten basis points today and 0:33:26.120 --> 0:33:29.320 that the jobs report has taken a touch of pressure 0:33:29.400 --> 0:33:32.680 off the Feds need to raise rates. But even if 0:33:32.680 --> 0:33:35.160 they do raise rates, I think it doesn't matter at 0:33:35.200 --> 0:33:37.640 this point. We've got a picture in place. What we 0:33:37.760 --> 0:33:39.880 need to worry about. I mean, what we're worrying about 0:33:39.960 --> 0:33:42.640 is the things we always worry about, like exogynous risks. 0:33:43.800 --> 0:33:49.000 But the actual fundamentals of the market are sound and positive. 0:33:49.800 --> 0:33:52.920 You know that we do have a high price earnings 0:33:53.000 --> 0:33:57.360 multiple on the market relative to averages. But my sense 0:33:57.480 --> 0:34:01.360 is this is another another signal from the market that 0:34:01.480 --> 0:34:03.560 we think we're going to have long term interest rates 0:34:03.640 --> 0:34:07.560 coming down. So you know, the tenure treasury we still 0:34:07.600 --> 0:34:10.600 have an inverted yield curve, but the real return on 0:34:10.680 --> 0:34:14.480 the tenure treasury is not particularly high, and so that 0:34:14.600 --> 0:34:17.320 tells us over the long run, and also another the 0:34:17.440 --> 0:34:19.680 thing is this inverted yield curve. One of the things 0:34:19.719 --> 0:34:23.960 that tells us is that the long term rates we 0:34:24.080 --> 0:34:26.719 still think are low, but short term we have policy 0:34:26.840 --> 0:34:29.879 things going on that might raise rates. So this notion 0:34:30.239 --> 0:34:33.360 that we've got we're sort of in this sweet spot continues. 0:34:33.640 --> 0:34:37.120 So you know, it is true that it's like we're 0:34:37.120 --> 0:34:39.920 all neurotic. So if things are good, we were there 0:34:39.960 --> 0:34:41.880 too good, and things are bad we hate that. So 0:34:42.040 --> 0:34:44.120 but we're we're in sort of a sweet spot here 0:34:44.719 --> 0:34:47.720 where everything seems to be working. We're walking that line. 0:34:48.000 --> 0:34:50.600 And we have to give credit to corporate managers because 0:34:51.200 --> 0:34:53.680 our way of thinking is that, you know, it's always 0:34:53.719 --> 0:34:57.040 about buying future cash flows and that comes from earnings. 0:34:58.200 --> 0:35:01.080 Another thing that's really a positive impact over the last 0:35:01.360 --> 0:35:03.640 relative of the last ten years is you know, for 0:35:03.719 --> 0:35:06.440 the first thirty years of my career, we had real 0:35:07.040 --> 0:35:07.880 bond yields to. 0:35:07.920 --> 0:35:08.520 Work with you. 0:35:08.680 --> 0:35:10.759 Bonds were an important part of the portfolio. For the 0:35:10.840 --> 0:35:14.000 last ten years that has generally not been true. But 0:35:14.239 --> 0:35:16.480 right now we're starting to get real yields again in 0:35:16.560 --> 0:35:19.560 the bonds, in bonds and even money market funds. So 0:35:19.680 --> 0:35:22.200 that's a terrific tool to have back in our toolbox. 0:35:23.160 --> 0:35:26.920 So John, you know, if I sit in to your treasury, 0:35:27.000 --> 0:35:29.160 I can get four point eight one percent. That seems 0:35:29.239 --> 0:35:32.120 pretty good. But I feel like it might be the 0:35:32.320 --> 0:35:34.840 time to maybe go out on the curve a little bit, 0:35:34.880 --> 0:35:37.080 maybe get some more duration. Should I do that or 0:35:37.080 --> 0:35:39.360 should I just sit comfortably with my two year. 0:35:41.360 --> 0:35:43.440 Little of each In other words, you know, one of 0:35:43.480 --> 0:35:45.960 the things we really believe is you can't predict, you 0:35:46.000 --> 0:35:48.640 can only prepare. So when you have a two year 0:35:48.719 --> 0:35:52.239 treasury yielding almost five percent, why not. And on the 0:35:52.320 --> 0:35:55.840 other hand, if you are if you have a full duration. 0:35:55.960 --> 0:35:59.000 We're a little bit under duration on our bond portfolios today, 0:35:59.520 --> 0:36:02.840 but we've been adding duration as interest rates go higher. 0:36:03.320 --> 0:36:05.640 If you do have a pullback, this is what it means. 0:36:05.719 --> 0:36:08.120 We can't predict this, No one can predict it. But 0:36:08.200 --> 0:36:10.759 if you did have a pullback, then having that and 0:36:10.920 --> 0:36:14.839 interest rates fell, then those having longer duration would give 0:36:14.880 --> 0:36:17.000 you some protection against a pullback in the market, in 0:36:17.040 --> 0:36:19.840 the stock market. And you know, meanwhile you're picking up 0:36:19.880 --> 0:36:22.680 that coupon. So it's a little bit of each you know, 0:36:22.840 --> 0:36:25.239 find the most compelling things you can do, find and 0:36:25.280 --> 0:36:26.600 then believe each one a little bit. 0:36:27.400 --> 0:36:29.680 Yeah, what's the top acid class in what you're adding 0:36:29.719 --> 0:36:33.600 your marginal dollar at this point, Well. 0:36:33.440 --> 0:36:39.800 We're overweight US, and we're overweight things like healthcare equipment 0:36:40.640 --> 0:36:44.680 and the you know, technology stocks is a consumer facing 0:36:44.800 --> 0:36:50.759 technology stocks and software. So you know, we're really continuing 0:36:50.840 --> 0:36:55.120 to focus on these companies that have strong market share, 0:36:55.600 --> 0:36:58.600 strong balance sheets and moats around them to keep them 0:36:58.640 --> 0:37:03.239 protect them from protecting competition. So that's still we know 0:37:03.400 --> 0:37:07.640 our portfolio is overweight US and overweight that sector marginal 0:37:07.719 --> 0:37:11.319 dollar comes in. We're still doing that, John, also are 0:37:11.360 --> 0:37:14.120 looking for that's the core portfolio. And then on top 0:37:14.200 --> 0:37:16.680 of that, of course, we're always looking for opportunistic things, 0:37:17.040 --> 0:37:20.320 for example like private credit, which is a whole nother discussion, 0:37:20.400 --> 0:37:23.680 and it really matters what segment you're in, which managers are. 0:37:23.680 --> 0:37:24.520 Using, and so forth. 0:37:25.120 --> 0:37:27.080 John, it looks like a beautiful day out there in Wyoming. 0:37:27.280 --> 0:37:30.240 How are our friends out there in Wyoming having good summer? 0:37:32.239 --> 0:37:35.080 Everything's good. It's you know, my friends in the East 0:37:35.080 --> 0:37:37.080 are worried about hot and humid, and it's not hot 0:37:37.120 --> 0:37:39.840 and humid here. And you know, we've got the Jackson 0:37:39.920 --> 0:37:42.640 Hole fed meeting them enough. But I think it's going 0:37:42.719 --> 0:37:45.680 to be a relatively sort of a non event compared 0:37:45.719 --> 0:37:49.120 to recent years, which where it's been so dramatically important. 0:37:49.440 --> 0:37:51.680 Right, Hey, John, thanks for taking a few minutes. We 0:37:51.719 --> 0:37:55.000 always appreciate getting your thoughts and your perspective. Jonathan Hurdle, 0:37:55.080 --> 0:37:57.960 he's the executive chairman of hurdle Callahan and Company coming 0:37:58.040 --> 0:38:01.920 to us from beautiful Wyoming out there, so good for them. 0:38:02.280 --> 0:38:05.360 You're listening to the tape. Catch our live program Bloomberg 0:38:05.480 --> 0:38:09.040 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:38:09.120 --> 0:38:12.319 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:38:12.400 --> 0:38:15.160 You can also listen live on Amazon Alexa from our 0:38:15.239 --> 0:38:19.880 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:38:21.320 --> 0:38:24.120 Again. Payroll Day, Jobs Day today. I think it was 0:38:24.160 --> 0:38:27.120 a solid number all around. The thing that jumped out 0:38:27.120 --> 0:38:30.680 of me was average hourly earnings. It's pretty darn healthy 0:38:30.719 --> 0:38:33.200 of four point four percent, kind of consistent with last month. 0:38:33.880 --> 0:38:36.120 I'll take that. I wonder if our next guest is 0:38:36.200 --> 0:38:39.480 with me here, Jeffrey Cleveland, director and chief economis at 0:38:39.520 --> 0:38:42.480 Payden Andrigo. Jeffrey, I love to get your takeaway from 0:38:42.480 --> 0:38:46.240 what we saw on the labor front, and maybe more importantly, 0:38:46.320 --> 0:38:50.000 how our federal Reserve is going to view this number well. 0:38:50.000 --> 0:38:53.160 I think this is a very soft landing, like soft 0:38:53.280 --> 0:38:54.880 landing ish. I don't know if we can use that 0:38:55.040 --> 0:38:59.359 term type report. Yep, you had solid payroll growth. Of course, 0:38:59.400 --> 0:39:02.040 payrolls have been slowing over the last year. Everyone knows that, 0:39:02.200 --> 0:39:05.640 but the three month average is still two eighteen, which 0:39:05.960 --> 0:39:08.720 at any other era we would say is is stellar 0:39:08.840 --> 0:39:12.800 job growth. So that's that's very good. The one drag 0:39:13.000 --> 0:39:16.320 or one sector that's been problematic is also one that 0:39:16.360 --> 0:39:20.960 everyone knows information to the technology type sector, so that's 0:39:21.000 --> 0:39:24.040 well known. Everything else, we're seeing pretty broad based gains 0:39:24.080 --> 0:39:28.200 in unemployment. The unemployment rate is still low. I think 0:39:28.239 --> 0:39:31.640 we're just above the cycle low at three and a 0:39:31.680 --> 0:39:34.840 half percent. So this is the part I find most amusing, 0:39:35.360 --> 0:39:39.640 where the Fed has been hiking. It's an historic hiking cycle, 0:39:39.719 --> 0:39:43.440 the most rapid hiking cycle since in forty years, and 0:39:44.120 --> 0:39:47.239 the unemployment rate is below where it was when the 0:39:47.360 --> 0:39:48.320 hiking cycle began. 0:39:49.160 --> 0:39:52.400 So I like you point out that job leavers as 0:39:52.440 --> 0:39:55.919 a percentage of total unemployed in July's employment report rose 0:39:55.960 --> 0:39:58.120 to fourteen point six percent. You sent us some notes 0:39:58.160 --> 0:40:00.960 across earlier. That's like a high. 0:40:02.320 --> 0:40:02.600 You know that. 0:40:02.760 --> 0:40:05.399 I mean that that is even a stronger data point 0:40:05.560 --> 0:40:08.640 for this report than the overall headline number, which I 0:40:08.680 --> 0:40:12.879 guess missed analysts estimates generally. Why is this, I guess 0:40:13.040 --> 0:40:16.680 just not a bullish Let's go get them kind of 0:40:16.800 --> 0:40:20.120 sign it seems, you know, if we're seeing this soft 0:40:20.239 --> 0:40:22.839 landing picture, then it suggests that at least the FED 0:40:22.960 --> 0:40:25.680 is gonna kind of stay back on the sidelines. 0:40:26.440 --> 0:40:28.800 Well, I think that's the important of the soft landing, 0:40:29.520 --> 0:40:32.719 you know, story, it's it's not just semantics. It is 0:40:33.680 --> 0:40:36.480 a indication if the soft line is playing out, then 0:40:36.520 --> 0:40:38.440 then maybe the FED doesn't have a lot more to do. 0:40:39.200 --> 0:40:41.560 And I think you see that today. The equity market 0:40:41.640 --> 0:40:44.000 loves that. The bond market will love that as well. 0:40:44.080 --> 0:40:46.680 I talked to bond traders every day. They would they 0:40:46.719 --> 0:40:49.440 would love it if the FED is done. So if 0:40:49.719 --> 0:40:52.160 we are on the soft landing, then yeah, then arguably 0:40:52.400 --> 0:40:53.359 the FED is done. 0:40:53.760 --> 0:40:56.640 Yeah, but I just think, yeah, sorry, go on, No, 0:40:56.840 --> 0:40:58.400 I mean you you bring up the. 0:40:58.640 --> 0:41:01.560 Kind of an important issue is that maybe this job 0:41:01.600 --> 0:41:04.560 market is even stronger than this report suggests. When you 0:41:04.640 --> 0:41:08.000 dig into the internals of the report, still some great 0:41:08.080 --> 0:41:11.279 signs that could be that will have continued growth, the 0:41:11.360 --> 0:41:14.800 unemployment rate will go even further, wage growth will remain 0:41:15.360 --> 0:41:18.560 four to five percent, And I think in that environment 0:41:18.600 --> 0:41:21.960 the FED might not be as pleased as the markets 0:41:21.960 --> 0:41:25.520 are today with the report. That could be a situation 0:41:25.640 --> 0:41:27.840 where you have a no landing type scenario where the 0:41:27.880 --> 0:41:31.719 economy is still above trend, low unemployment, solid wage growth, 0:41:31.760 --> 0:41:34.840 and inflation is too high it's above two percent. The 0:41:34.920 --> 0:41:37.560 FED probably has more to do in that case. In 0:41:37.680 --> 0:41:40.040 that environment, So I think that's still a real risk 0:41:40.160 --> 0:41:44.320 that scenario. But right now everyone seems to be golming 0:41:44.400 --> 0:41:45.759 on to the soft landing. 0:41:46.440 --> 0:41:48.720 So are we taking recession off the table? 0:41:50.520 --> 0:41:52.839 Yeah, we took it off the table a while ago. 0:41:53.160 --> 0:41:55.960 You know, we thought after SVB that there was the 0:41:56.120 --> 0:41:59.000 risk that credit was going to contract more significantly. That 0:41:59.160 --> 0:42:02.200 hasn't played out. I was just looking at the lending 0:42:02.280 --> 0:42:06.200 data in the weekly FED data. I mean, lending growth 0:42:06.280 --> 0:42:09.680 has slowed, but it is still up five percent roughly 0:42:09.880 --> 0:42:12.320 year over year. So we have not seen a collapsing 0:42:12.400 --> 0:42:18.160 credit borrowing A discount window has completely evaporator gone down, 0:42:18.560 --> 0:42:20.320 so the stress in the banking system has gone. So 0:42:20.680 --> 0:42:24.600 the hard landing recession is imminent type stories that we're 0:42:24.640 --> 0:42:27.560 out there. I think those are gone for the time being, 0:42:27.719 --> 0:42:31.160 so you have to push out your timing for a recession. 0:42:31.239 --> 0:42:33.760 We have the US economy growing more than two percent 0:42:33.880 --> 0:42:36.080 this year in our forecast now quartered on a Q 0:42:36.200 --> 0:42:38.080 four to Q four basis. So I know that's a 0:42:38.120 --> 0:42:42.200 little bit more bullish than the Bloomberg terminals suggests the consensus. 0:42:42.280 --> 0:42:45.000 But that's where we see things here, and today's jobs 0:42:45.040 --> 0:42:47.080 report I think doesn't change that view at all. 0:42:47.840 --> 0:42:50.520 Wow, that's so interesting two percent growth here on your 0:42:50.760 --> 0:42:54.920 I mean, if the two options here are no landing 0:42:55.440 --> 0:42:58.279 or soft landing, what's the kind of timeline that we 0:42:58.360 --> 0:42:59.120 see them play out? 0:43:00.920 --> 0:43:03.040 Well, when I think about this, I'm always talking about 0:43:03.040 --> 0:43:05.280 the next six months, the next six to twelve months, 0:43:05.760 --> 0:43:08.120 so that that will carry us into middle of next year. 0:43:09.000 --> 0:43:12.400 I realize for some investors, some viewers, you don't want that. 0:43:12.560 --> 0:43:14.040 You want to know the next three to five years, 0:43:14.080 --> 0:43:16.560 but nobody could provide that. So just trying to be real, 0:43:16.840 --> 0:43:19.440 be realistic. It's you know, I was talking to one 0:43:19.480 --> 0:43:22.440 of my colleagues yesterday, it's it's quite interesting you if 0:43:22.480 --> 0:43:24.600 you have for the next six months or so the 0:43:24.760 --> 0:43:28.000 no landing scenario, then it's possible the FED has to 0:43:28.080 --> 0:43:30.640 do more. They hike even more, and then there are 0:43:30.719 --> 0:43:34.080 some ramifications for that down the road that could mean 0:43:34.560 --> 0:43:38.040 a more significant slowdown in growth, maybe some other financial 0:43:38.080 --> 0:43:41.920 market casualties. So when you think about these scenarios, you 0:43:42.000 --> 0:43:44.080 know they can evolve over time, but I think for 0:43:44.239 --> 0:43:46.920 the next six six to twelve months, we don't have 0:43:47.000 --> 0:43:50.800 a recession. The FED is you know, on hold or 0:43:51.280 --> 0:43:55.080 maybe hiking another another time where I don't think we're 0:43:55.080 --> 0:43:58.240 going to see things evolve as a recession and rate cuts, 0:43:58.640 --> 0:44:01.640 and I think that's really important to take in because 0:44:01.640 --> 0:44:04.839 that has big financial market implications. We kind of were 0:44:04.840 --> 0:44:07.120 seeing that play out earlier in this week with the 0:44:07.200 --> 0:44:10.480 flattening of the treasury yield curve. The way I think 0:44:10.520 --> 0:44:12.799 about it, if the FED is on hold just where 0:44:12.840 --> 0:44:16.040 they are, then the longer end of the treasury curve 0:44:16.080 --> 0:44:18.600 can drift up just for that reason. You know, the 0:44:19.320 --> 0:44:21.160 earlier this year where there's the expectation that the FED 0:44:21.200 --> 0:44:23.960 would be cutting, and I think that underlied. You know 0:44:24.080 --> 0:44:26.239 a lot of the inversion in the curve, but if 0:44:26.280 --> 0:44:28.600 that's coming out, then a flatter curve makes sense. 0:44:29.160 --> 0:44:31.480 It kind of hurts something along those lines. This morning, 0:44:31.880 --> 0:44:35.560 Austin Goldsby, the president of the Federal Reserve Bank of Chicago, 0:44:35.719 --> 0:44:38.719 was interviewed by Bloomberg's David Wesson, and he kind of 0:44:38.760 --> 0:44:41.440 said the same thing. I guess the implication was they 0:44:41.520 --> 0:44:44.160 feel like they're making some good headway walking that fine 0:44:44.200 --> 0:44:49.360 line with holding inflation down while not pushing the economy 0:44:49.400 --> 0:44:53.120 into recession, suggesting that that is consistent with kind of 0:44:53.200 --> 0:44:55.800 keeping rates where they are for a while. Does that 0:44:55.840 --> 0:44:56.520 seem reasonable? 0:44:57.360 --> 0:44:59.759 Yeah, I think this is again great news for the Fed. 0:45:00.400 --> 0:45:03.920 The core inflation has come down, so on course CPI 0:45:04.000 --> 0:45:06.359 we were six to six at the peak year on year, 0:45:06.600 --> 0:45:09.320 now we're four point eight. But the unemployment rate is 0:45:09.360 --> 0:45:12.239 at three point five, as we saw this morning, below 0:45:12.280 --> 0:45:14.440 where it was when the Fed started hiking. That's the 0:45:14.520 --> 0:45:19.080 best case scenario for the policymakers improvement on inflation without 0:45:19.160 --> 0:45:22.920 having a downturn. But that said, doesn't mean that the 0:45:23.000 --> 0:45:25.680 Fed is going to be cutting rates anytime soon, not 0:45:25.880 --> 0:45:28.520 with the unemployment rate at three point five. And then, 0:45:28.760 --> 0:45:31.359 even though we've seen an improvement inflation, inflation is still 0:45:31.600 --> 0:45:35.440 above well above the Fed's target. So stasis holding here 0:45:35.600 --> 0:45:37.879 might might be how things play out. But I think 0:45:37.960 --> 0:45:40.839 that has implication for two year treasury yields, but also 0:45:40.880 --> 0:45:41.920 ten year treasury yields. 0:45:43.200 --> 0:45:47.400 We're looking at some important data on CPI on PPI 0:45:47.680 --> 0:45:51.359 producer price in next and next week. Talk me through 0:45:51.400 --> 0:45:54.840 your expectations there. What kind of number are you looking 0:45:55.360 --> 0:45:55.719 to see? 0:45:57.360 --> 0:45:59.800 Well, the big thing for me is last month so 0:46:00.080 --> 0:46:05.719 June core CPI was softer, softer than expected and I 0:46:05.800 --> 0:46:09.200 think very soft. So looking for that to pick back 0:46:09.239 --> 0:46:12.960 up month to month, maybe one point three percent month 0:46:13.000 --> 0:46:17.520 to month percent change, So it could it could pour 0:46:17.760 --> 0:46:21.240 some cold water on the on the soft landing scenario 0:46:21.280 --> 0:46:24.439 if that does play out. But again it ties back 0:46:24.440 --> 0:46:27.239 to our suspicion that the FED is probably not done, 0:46:28.120 --> 0:46:30.000 and I think that would be the conclusion if you 0:46:30.080 --> 0:46:34.120 do see a pick back up in the core CPI reading. 0:46:34.200 --> 0:46:35.920 So that's really the critical report for me. 0:46:36.400 --> 0:46:38.839 All right, Jeff, appreciate it as always getting your thoughts 0:46:38.920 --> 0:46:42.600 Jeffrey Cleveland. He's a director and chief economist at Payden 0:46:42.719 --> 0:46:43.640 and Regal. 0:46:44.040 --> 0:46:47.120 You're listening to the tape catch a live program Bloomberg 0:46:47.239 --> 0:46:50.800 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:46:50.880 --> 0:46:54.080 tune in app, Bloomberg dot Com, and the Bloomberg Business app. 0:46:54.160 --> 0:46:56.920 You can also listen live on Amazon Alexa from our 0:46:57.000 --> 0:47:01.360 flagship New York station, Just Say Alexa playing Bloomberg eleven thirty. 0:47:02.160 --> 0:47:06.239 We got movement higher yet again in energy WTI crude 0:47:06.239 --> 0:47:08.000 oil up one point two percent. I've been calling this 0:47:08.080 --> 0:47:11.600 out for the last several weeks. This wdacrud's had a 0:47:11.640 --> 0:47:13.000 nice little run here. I don't know what the heck's 0:47:13.000 --> 0:47:14.160 going on. So let me bring in a couple of 0:47:14.160 --> 0:47:16.839 people that we pay to know what's going on here. 0:47:16.880 --> 0:47:20.840 Mike mcglohon' senior macro strategist with Bloomberg Intelligence. He's located 0:47:20.880 --> 0:47:24.759 in the self proclaimed crypto capital of the world, Miami Beach. 0:47:24.840 --> 0:47:27.840 Good luck with that. And Fernando Voley, senior analyst for 0:47:27.920 --> 0:47:30.000 Bloomberg Intelligence. His whole career is kind of doing this 0:47:30.160 --> 0:47:32.880 energy thing. So let's start off with Mike. Mike, just 0:47:33.000 --> 0:47:36.479 from a technical perspective, why this scene was sixty seven 0:47:36.480 --> 0:47:39.200 dollars or barrel WTI crude oil like a month five 0:47:39.280 --> 0:47:41.279 weeks ago, here we are at eighty two. What's going on? 0:47:42.320 --> 0:47:45.160 Were saying, we're seeing a decent bounce of a market 0:47:45.200 --> 0:47:48.520 that we got very over so managed money net positions 0:47:48.600 --> 0:47:49.760 were very short. 0:47:50.200 --> 0:47:52.880 The market bounced from its sixty month moving average. 0:47:53.080 --> 0:47:57.040 But the key thing to remember about crudeill juxtaposed the 0:47:57.120 --> 0:48:00.000 stock market, which has that mantra if it goes out, 0:48:00.239 --> 0:48:03.480 it will go up, and Crudel's the opposite, opposite. Remember 0:48:03.560 --> 0:48:05.120 and the point you see the price you see in 0:48:05.160 --> 0:48:07.440 the screen was first trade in about two thousand and seven. 0:48:07.760 --> 0:48:09.640 It's when it goes up, it usually makes it go 0:48:09.800 --> 0:48:10.239 back down. 0:48:10.560 --> 0:48:12.680 And right now it's going it's rallying on the back 0:48:12.760 --> 0:48:15.200 of not only that positions coming back, but the stock 0:48:15.320 --> 0:48:18.160 market's going up and yields are popping. But I view 0:48:18.280 --> 0:48:20.839 this as a bear market rally, and I have good 0:48:20.880 --> 0:48:23.440 bias from that. The highest put in two thousand and eight, 0:48:23.760 --> 0:48:26.080 We had that bounce up till last year that was 0:48:26.160 --> 0:48:28.560 lower than that high around one thirty recently, and now 0:48:28.600 --> 0:48:32.080 we have situation with OPEC cutting supply and Russian saying 0:48:32.080 --> 0:48:32.759 they're cutting supply. 0:48:32.920 --> 0:48:35.160 But that's typically what happens in bear markets. 0:48:35.360 --> 0:48:38.839 From a cartel, they see this yield curve, they see 0:48:38.880 --> 0:48:43.520 the global bent towards recession, they see the declining economic 0:48:43.560 --> 0:48:46.880 growth out of China, they see the US rapidly raising 0:48:46.960 --> 0:48:49.680 interest rates, and they see the risks of Crudell going lower. 0:48:49.680 --> 0:48:52.440 And this what it normally does, is it mean reverts. 0:48:52.480 --> 0:48:54.360 The question is whereas it peak and where's it go? 0:48:54.480 --> 0:48:56.759 So I look at these levels eighty three has kind 0:48:56.760 --> 0:49:01.520 of been the high since looks like a November of 0:49:01.680 --> 0:49:03.279 last year. So I see we're near the upper end 0:49:03.320 --> 0:49:03.640 the range. 0:49:03.680 --> 0:49:06.440 Now, all right, Fernando Joints is here in a Bloomberg 0:49:06.440 --> 0:49:09.680 Interactive broker studio paying three dollars and eighty three cents 0:49:09.760 --> 0:49:13.200 a gallon to fill up the beamer at the Jersey Shore. 0:49:13.600 --> 0:49:16.399 That's much higher than I want to pay. Why can't 0:49:16.440 --> 0:49:19.359 And people are telling me there's a refinery issue, which 0:49:19.360 --> 0:49:21.840 I'm not buying, by the way, but that's an exact 0:49:21.960 --> 0:49:24.720 an excuse. Talk to me about the refining situation this country. 0:49:24.800 --> 0:49:26.440 Do we have a refinery down or out or. 0:49:26.800 --> 0:49:27.239 What's going on? 0:49:27.400 --> 0:49:29.560 Not buying a refinery or no I want to buy it. 0:49:29.719 --> 0:49:31.480 I'll tell you what I want to do. I want 0:49:31.520 --> 0:49:33.960 to go down to Corpus Christi or golf Port or 0:49:33.960 --> 0:49:36.640 wherever they put those things and build a refinery. Can 0:49:36.680 --> 0:49:36.960 I do that? 0:49:37.400 --> 0:49:40.440 You can just revamp some of it recently shuttered refineries, 0:49:40.520 --> 0:49:44.400 including in Louisiana and in Philadelphia. Well, that one's going 0:49:44.480 --> 0:49:46.279 to take a lot of work. But yeah, we do 0:49:46.480 --> 0:49:48.640 have some refinery shortages. And when you look, it's not 0:49:48.800 --> 0:49:52.640 just crude prices that are driving gasoline prices higher, crackspreads 0:49:52.640 --> 0:49:55.320 are forty dollars a barrow for both gasoline and diesels. 0:49:55.680 --> 0:49:58.280 Crackspread is the difference between what I pay for barrel 0:49:58.320 --> 0:49:58.600 boy and. 0:49:58.640 --> 0:50:01.520 What I yes the stuff for the diesel and the 0:50:01.560 --> 0:50:03.160 gasoline to produce it out of it. 0:50:03.280 --> 0:50:04.600 So I want to if I'm an produce it, I 0:50:04.640 --> 0:50:06.120 want a bigger crackspread. 0:50:05.800 --> 0:50:09.040 Exactly, And they were getting me. It's over three times 0:50:09.120 --> 0:50:11.840 what they usually get, so they're pretty healthy. And that 0:50:12.360 --> 0:50:14.799 just goes to show you that we are really short 0:50:14.840 --> 0:50:18.320 on the refining capacity, and I'll make matters worse. It 0:50:18.400 --> 0:50:21.600 actually looks worse in Europe, especially on the diesel side, 0:50:21.680 --> 0:50:25.120 because they don't have Russian crude. They've lost a lot 0:50:25.160 --> 0:50:30.040 of refinery capacity over the past five years, and electricity 0:50:30.080 --> 0:50:32.759 prices there are significantly higher. So we're going to need 0:50:32.800 --> 0:50:35.600 a lot more diesel and it's not gonna get cheaper 0:50:35.600 --> 0:50:36.239 anytime soon. 0:50:37.080 --> 0:50:41.600 Yeah, but we also see you know, US producers boosting production. 0:50:41.960 --> 0:50:45.799 The shale producers that stayed on the sidelines preserved their 0:50:46.160 --> 0:50:51.000 you know, fiscal picture as even the Biden administration was 0:50:51.040 --> 0:50:52.760 telling them to get back out there to get pumping. 0:50:53.000 --> 0:50:56.960 I mean, does that kind of offset. Sure, we have 0:50:57.040 --> 0:50:59.719 this maybe bottleneck in refining, but then does that sort 0:50:59.719 --> 0:51:02.680 of all set what we're hearing from Saudi Arabia around 0:51:02.719 --> 0:51:07.320 continuing those cuts. Does that kind of put an upside 0:51:07.960 --> 0:51:10.160 ceiling to where we go with oil prices? 0:51:10.360 --> 0:51:12.640 Well, the limit is really on the demand side. As 0:51:12.760 --> 0:51:16.279 Mike was alluding to, the shale producers can only grow 0:51:16.360 --> 0:51:19.600 so much. There are variety of limitations. I think the 0:51:19.719 --> 0:51:23.319 biggest and most importance to geological limitation. You just can't 0:51:23.360 --> 0:51:26.120 grow as fast as you as you hope because the 0:51:26.239 --> 0:51:30.400 productivity isn't there. And then outside of the permium, you 0:51:30.640 --> 0:51:32.560 just don't have any investments. Even when you look at 0:51:32.560 --> 0:51:36.560 the rig count, it's still relatively low. Frack spreads, they're 0:51:36.640 --> 0:51:40.520 not back to their peaks before twenty twenty, and so 0:51:40.920 --> 0:51:43.760 we're not going to see that sort of growth. And ultimately, 0:51:43.920 --> 0:51:46.080 when it comes to gasoline and diesel prices, you have 0:51:46.200 --> 0:51:49.320 an added issue, which is what we produce in the 0:51:49.480 --> 0:51:52.880 US is not really set up for what we refine 0:51:52.920 --> 0:51:55.360 in the US, and we need a lot more heavy crude. 0:51:55.640 --> 0:51:58.640 And when OPEC cuts barrows, they cut the stuff that 0:51:58.719 --> 0:52:01.200 we need, which is the medium and heavier grades and 0:52:01.320 --> 0:52:03.840 that makes especially diesel more expensive. 0:52:04.000 --> 0:52:05.080 I don't know that all works. 0:52:05.320 --> 0:52:07.320 Mike mcgloan talk to us about kind of just the 0:52:08.000 --> 0:52:10.440 trading here of WTI crewed or just the you know, 0:52:10.520 --> 0:52:13.480 the other energy components here. How much of it is 0:52:13.560 --> 0:52:19.040 really technical versus the fundamentals that Fernando's talking about. 0:52:20.080 --> 0:52:22.759 Price is the number one factor in crude oil and 0:52:22.840 --> 0:52:25.480 what drives price futures traders. I just love pointing it 0:52:25.560 --> 0:52:28.440 out because I actually I am an ex futures trader 0:52:28.440 --> 0:52:30.800 and I've spent a good portion of my career running 0:52:30.880 --> 0:52:33.440 money and deal with clients doing that. And that's the 0:52:33.480 --> 0:52:35.560 bottom line is it's really price that drives it. And 0:52:35.600 --> 0:52:37.839 now why do you see opek worried about cutting because 0:52:37.840 --> 0:52:40.239 they see what's happening, see prices going down. But the 0:52:40.280 --> 0:52:42.759 bottom line is we're still well above the average cost 0:52:42.760 --> 0:52:45.719 of production the world's largest producer and net export of 0:52:45.760 --> 0:52:48.960 the US. And one thing I do point out and 0:52:49.120 --> 0:52:50.920 like to point out is how things have changed. 0:52:50.960 --> 0:52:51.080 Now. 0:52:51.120 --> 0:52:54.360 This is just a little bit of where Fernando and 0:52:54.400 --> 0:52:58.239 I disagree, is rig accounts declining is actually a variable 0:52:58.360 --> 0:53:00.839 of bearish sign for crude oil because if you look 0:53:00.880 --> 0:53:03.640 at what's there's been a very high correlation with Ricoins 0:53:03.719 --> 0:53:06.839 councilor lasts almost twenty years, partly because when you drill 0:53:07.400 --> 0:53:09.600 down one drill, you can go horizontal who knows how 0:53:09.640 --> 0:53:11.840 many ways. But it's just the fact of what I 0:53:11.920 --> 0:53:13.880 show in prices, and I love pointing this out a 0:53:13.960 --> 0:53:16.359 year ago is the fantasies of Crudel where people still 0:53:16.400 --> 0:53:18.440 focus on those kind of things, and then people talk 0:53:18.440 --> 0:53:20.920 about lack of investment. I you know, I'll be going 0:53:20.960 --> 0:53:24.000 down to the farmland again next week. And you know, 0:53:24.120 --> 0:53:26.440 in this country we get almost fifteen percent of our 0:53:26.440 --> 0:53:29.360 total and leaded gas now from ethanol, and that demand 0:53:29.440 --> 0:53:32.040 from leading gas in this country is actually declining. It's 0:53:32.120 --> 0:53:34.960 down five percent then when it was before COVID so 0:53:35.200 --> 0:53:37.640 and well, this major bent towards EV. So I look 0:53:37.680 --> 0:53:40.279 at it is this is an enduring bear market that's 0:53:40.360 --> 0:53:41.800 just catching up. If you want to look for a 0:53:41.880 --> 0:53:45.239 good bullmarket commodities, look for gold. The price today this 0:53:45.400 --> 0:53:47.879 year is the average highest. The average price for gold 0:53:47.920 --> 0:53:51.200 this year is the highest ever at nineteen one hundred 0:53:51.239 --> 0:53:54.160 and thirty six dollars announce. Crude oil is just the 0:53:54.160 --> 0:53:56.600 average price. There is seventy five that's met it's just 0:53:56.680 --> 0:53:58.960 a normal price. It's just fluctuating around that average. 0:53:59.040 --> 0:54:00.719 So I'm going to quote are just I think I 0:54:00.760 --> 0:54:05.320 can summarize Mike Gloan's commodities call buy gold, short everything 0:54:05.360 --> 0:54:06.720 else exactly. 0:54:06.840 --> 0:54:09.520 That's the trend, and he makes. 0:54:09.400 --> 0:54:09.920 A living on this. 0:54:10.160 --> 0:54:11.839 I don't believe he gets fanded into stuff. 0:54:12.200 --> 0:54:12.239 No. 0:54:12.400 --> 0:54:15.080 I mean, his commentary here is pretty that he writes 0:54:15.080 --> 0:54:20.080 for Bloomber Contelatis is pretty harsh. Either we are reversing 0:54:20.120 --> 0:54:22.920 our trajectory since two thousand and nine and an upward trend, 0:54:23.520 --> 0:54:27.240 or we're in the early stages of a severe economic contraction, 0:54:27.400 --> 0:54:30.120 and he, by the way, believes the latter. I mean, 0:54:30.200 --> 0:54:33.120 for Nando, what's your take, do you disagree? I mean, 0:54:33.320 --> 0:54:35.719 I know you're specialize in the energy space, but. 0:54:36.040 --> 0:54:39.520 Yeah, absolutely, I think I agree with that the demand 0:54:39.719 --> 0:54:42.120 socide of the equation is the biggest driver in the 0:54:42.160 --> 0:54:45.759 short term, and Mike and I view on the short 0:54:45.840 --> 0:54:48.680 term is very aligned. We think that's probably the lower 0:54:48.760 --> 0:54:50.719 price than what you've seen on the screen right now. 0:54:51.400 --> 0:54:53.320 But then on the long term, where I'll disagree with 0:54:53.400 --> 0:54:56.840 Mike is because my homeland is poor and doesn't have 0:54:56.920 --> 0:54:58.680 a lot of energy, and that whole land for people 0:54:58.760 --> 0:55:02.520 is Brazil and we're not buying evs. We went through 0:55:02.600 --> 0:55:07.640 blackouts throughout my childhood and OECD the developed countries are 0:55:07.719 --> 0:55:11.080 now less than half of energy demand globally and the 0:55:11.200 --> 0:55:14.600 only area that grows is emergent markets, so they are 0:55:14.640 --> 0:55:17.439 the biggest drivers. And when you look at China having 0:55:17.480 --> 0:55:21.240 to buy more coal because they don't have enough energy, 0:55:21.400 --> 0:55:26.600 India and Pakistan and their challenges with electricity, believing that 0:55:26.719 --> 0:55:28.560 the whole world's going to be driving a tesla in 0:55:28.640 --> 0:55:31.640 ten years is just completely nonsense to me. 0:55:31.800 --> 0:55:34.920 All right, so are your companies, your global energy companies, 0:55:34.960 --> 0:55:39.040 are they investing enough in the fossil fuel infrastructure? 0:55:39.320 --> 0:55:41.520 I mean excellent and Chevron plan to grow two to 0:55:41.640 --> 0:55:44.759 three percent a year, and while BP and Shell are 0:55:44.840 --> 0:55:47.799 thinking they're going to declient. So no, in the long term, 0:55:47.880 --> 0:55:51.120 we're not. And then there's a question on whether Saudi 0:55:51.239 --> 0:55:53.840 can actually grow much more than they do. They always 0:55:53.920 --> 0:55:57.000 talk about a big game about growing production and then 0:55:57.200 --> 0:55:59.880 for the past fifteen years they've been pretty much flat. 0:56:00.400 --> 0:56:02.879 So there's a lot of questions there. We don't think 0:56:02.920 --> 0:56:06.439 we have enough energy long term, and solar and wind 0:56:07.600 --> 0:56:10.120 won't cut it in the next ten to fifteen years. 0:56:10.280 --> 0:56:12.400 All right, there you go, folks. I think that's some 0:56:12.480 --> 0:56:15.080 of the smartest conversation you get on energy. You got 0:56:15.160 --> 0:56:17.400 to coming from a commodity perspective as well as a 0:56:17.440 --> 0:56:20.799 fundamental analyst who talks to these companies every day. That's 0:56:20.880 --> 0:56:24.920 Mike mcgloone and Fernando Vali. They're both from Bloomberg Intelligence. 0:56:24.960 --> 0:56:28.520 I wonder who hired them. Anyway, there's a good view 0:56:28.680 --> 0:56:30.040 on the energy space there. 0:56:30.400 --> 0:56:33.480 You're listening to the tape cans a live program Bloomberg 0:56:33.600 --> 0:56:37.160 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:56:37.239 --> 0:56:40.439 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:56:40.520 --> 0:56:43.279 You can also listen live on Amazon Alexa from our 0:56:43.360 --> 0:56:47.720 flagship New York station, Just say Alexa play Bloomberg eleven thirty. 0:56:49.960 --> 0:56:53.759 It's stuff diversity in inclusion. This is Jobs Day, and 0:56:53.800 --> 0:56:56.600 it's put in the context of diversity and inclusion that 0:56:56.680 --> 0:57:00.680 remains obviously a challenge, seemingly an ongoing challenge for most 0:57:00.719 --> 0:57:03.920 of corporate America, and that certainly includes the financial services industry, 0:57:03.960 --> 0:57:06.319 the big investment banks. To help us kind of get 0:57:06.360 --> 0:57:09.080 a sense of where we are right now, Sondra Quince 0:57:09.360 --> 0:57:13.160 joins us. She's the CEO for Paradigm for Parody. She 0:57:13.360 --> 0:57:16.760 joins us via zoom, Sandra, talk to us about Paradigm 0:57:16.880 --> 0:57:17.440 for Parody. 0:57:17.640 --> 0:57:18.320 Just start us off. 0:57:18.600 --> 0:57:19.040 What is it? 0:57:19.200 --> 0:57:21.120 What are you guys trying to accomplish? 0:57:22.280 --> 0:57:24.160 Yeah, thank you so much for having me today. 0:57:24.240 --> 0:57:27.840 So, Paradigm for Parody is quite simply a coalition organization 0:57:28.000 --> 0:57:31.960 that's focused on closing the gender parity gap and elevating 0:57:32.040 --> 0:57:34.680 women at every level of leadership in corporate America. 0:57:35.160 --> 0:57:37.360 We do this with a lens on racial equity. 0:57:37.720 --> 0:57:41.880 We provide our companies with a clear strategy, and then 0:57:41.960 --> 0:57:45.760 we provide them with the key tactics, the programs, and 0:57:46.440 --> 0:57:49.040 the resources that they need in order to close the 0:57:49.120 --> 0:57:49.760 parody gap. 0:57:50.640 --> 0:57:54.160 One of the interesting lines from this earnings report Sondra 0:57:54.440 --> 0:57:59.520 is that the participation rate for ages twenty five to 0:57:59.600 --> 0:58:02.840 fifty for actually fell for the first time since late 0:58:02.960 --> 0:58:08.080 last year, mainly because women were leaving the workforce. I thought, 0:58:08.160 --> 0:58:10.560 you know, there's been this run up in family information, 0:58:11.160 --> 0:58:13.000 but you know, do you where do you see this 0:58:13.600 --> 0:58:17.120 coming from? And you don't necessarily have all the nittigritty 0:58:17.120 --> 0:58:18.760 of the data, but what are the trends that you're 0:58:18.760 --> 0:58:20.040 seeing with the companies you work with. 0:58:21.240 --> 0:58:24.560 Yeah, so certainly there are women that are making decisions 0:58:24.640 --> 0:58:25.520 to leave the workforce. 0:58:25.600 --> 0:58:28.480 The companies that we're working with are really focused. 0:58:28.120 --> 0:58:31.440 On how do we keep women in the workforce or 0:58:31.480 --> 0:58:34.840 become a company that women can really see themselves thriving. 0:58:35.360 --> 0:58:37.960 And some of the things that companies are doing, quite frankly, 0:58:38.280 --> 0:58:41.720 is is they are looking for opportunities to ensure that 0:58:41.920 --> 0:58:45.920 they're hiring women, but more importantly that they're providing developmental 0:58:45.960 --> 0:58:48.760 opportunities to support women up and through the c suite. 0:58:48.880 --> 0:58:52.360 So where there it's sponsorship programs or whether it's programs 0:58:52.520 --> 0:58:56.080 like our Paradigm for Parity, Profit and Loss Leadership Accelerator 0:58:56.120 --> 0:58:59.880 program whereby your exposing women to other opportunities within Core 0:59:00.240 --> 0:59:03.480 America is critically important. And then, last but not least, 0:59:03.480 --> 0:59:06.840 I think it's important that leaders create the right type 0:59:06.880 --> 0:59:10.880 of inclusive people leaders so that you know whoever you're 0:59:10.920 --> 0:59:13.720 working for, that they understand some of the challenges and 0:59:13.760 --> 0:59:16.640 the issues and can really provide a workplace where all 0:59:16.720 --> 0:59:17.880 of their talent can thrive. 0:59:18.400 --> 0:59:19.760 And then companies that we're. 0:59:19.680 --> 0:59:22.960 Talking with are also looking at their benefits to ensure 0:59:23.000 --> 0:59:25.920 that they're meeting the needs of not only women, but 0:59:26.120 --> 0:59:27.520 they're broader workforce. 0:59:28.800 --> 0:59:32.040 Sandra, what are the companies that you deal with? What 0:59:32.120 --> 0:59:33.760 are they saying or what are they asking you? In 0:59:33.840 --> 0:59:37.200 let of the Supreme Court decision on affirmative action. 0:59:38.680 --> 0:59:41.080 Yeah, so a part of you know, what they're saying 0:59:41.240 --> 0:59:43.960 is number one, they want to stay the course and 0:59:44.200 --> 0:59:47.680 ensure that they don't, you know, reverse any of the 0:59:47.760 --> 0:59:51.280 progress that they've made over time. Some of the conversations 0:59:51.320 --> 0:59:54.520 that we're having is really stems around, you know, what 0:59:54.640 --> 0:59:56.000 do we do about our language. 0:59:56.120 --> 0:59:58.960 How do we ensure that we can continue to be a. 0:59:59.040 --> 1:00:02.680 Diverse and inclusive workforce, but ensure that we're bringing everyone 1:00:02.760 --> 1:00:05.720 along in this journey. So I think many of our 1:00:05.760 --> 1:00:08.840 companies are just taking a step back and looking at 1:00:09.520 --> 1:00:10.920 their language to be sure that that. 1:00:11.000 --> 1:00:12.080 Language is inclusive. 1:00:12.280 --> 1:00:15.480 They're also taking a look at their programs to be 1:00:15.640 --> 1:00:19.919 sure that while they have opportunities around women and those 1:00:20.000 --> 1:00:24.080 that are ethnically underrepresented, that they're creating the right processes 1:00:24.120 --> 1:00:28.480 in place to ensure that they are inclusive in that approach, 1:00:29.120 --> 1:00:32.600 that they are promoting all people within their organizations. So 1:00:32.760 --> 1:00:36.200 for many of our organizations, it's really around staying the course, 1:00:36.680 --> 1:00:39.960 but just taking a review of our processes and the 1:00:40.080 --> 1:00:41.120 language that we're using. 1:00:41.720 --> 1:00:45.280 Well, I mean staying the course though has kind of amounted, 1:00:45.800 --> 1:00:48.520 at least in recent months, to just not talking about 1:00:49.320 --> 1:00:51.800 diversity policies. I mean that was certainly the case when 1:00:51.840 --> 1:00:56.080 you look through earnings reports around Pride month after some 1:00:56.240 --> 1:01:02.880 dustktops over particularly LGBTQ strategy, but particularly around the t 1:01:03.600 --> 1:01:07.600 element of that. And is that the right way forward 1:01:07.880 --> 1:01:10.400 is to just kind of focus internally and not speak 1:01:10.400 --> 1:01:13.600 as much about diversity policies or is this kind of 1:01:13.640 --> 1:01:16.840 a temporary moment and you think we'll hear more going forward. 1:01:17.880 --> 1:01:18.120 Yeah. 1:01:18.440 --> 1:01:21.680 So I think on some levels, right, for some organizations, 1:01:21.720 --> 1:01:24.640 the right thing for them to do maybe to again 1:01:24.840 --> 1:01:27.120 just not sort of address some of the broader issues. 1:01:27.200 --> 1:01:29.120 But the companies that are really on the. 1:01:31.360 --> 1:01:34.360 That are really making progress and have made progress over time, 1:01:34.520 --> 1:01:37.320 those companies are still speaking publicly about the fact that 1:01:37.480 --> 1:01:41.920 they are going to continue around their diversity and inclusion efforts, 1:01:42.760 --> 1:01:45.360 that they are going to continue to make progress because 1:01:45.400 --> 1:01:48.360 they want to reflect the clients and communities that they serve, 1:01:48.520 --> 1:01:50.880 which is certainly the right thing to do. We've even 1:01:50.960 --> 1:01:54.240 heard the same conversation coming from some universities as well, 1:01:54.960 --> 1:01:58.320 that while affirmative action may have been impacted, they can 1:01:58.440 --> 1:02:04.080 still make impact in the universities and create inclusive environments 1:02:04.120 --> 1:02:08.720 where they reflect the communities and in which. 1:02:08.600 --> 1:02:09.800 They're they're located. 1:02:09.920 --> 1:02:13.680 So I really think that staying the course for companies 1:02:13.760 --> 1:02:16.320 can mean a couple of things. Whether it means we're 1:02:16.400 --> 1:02:18.680 remain silent, but for others, it means we're going to 1:02:18.720 --> 1:02:22.600 continue to speak out and speak out publicly around the 1:02:22.720 --> 1:02:24.440 work that we're doing and leading. 1:02:25.680 --> 1:02:30.800 Childcare. What's the most common reason that employers cite for 1:02:30.960 --> 1:02:33.640 not providing childcare for their employees. 1:02:35.280 --> 1:02:37.120 Yeah, so that's an interesting question. 1:02:37.280 --> 1:02:41.200 Many of the companies that I, you know, we have 1:02:41.800 --> 1:02:44.720 that are part of our coalition that we mainly interact with, 1:02:45.360 --> 1:02:47.880 all of them have childcare. So there are very few 1:02:47.960 --> 1:02:53.160 that come across that that are that are not providing 1:02:53.240 --> 1:02:57.040 some level of opportunity for families to care for their children. 1:02:58.560 --> 1:03:01.120 So I do think for some though that are not 1:03:01.280 --> 1:03:02.640 offering it, it could be the. 1:03:02.720 --> 1:03:06.400 Fact of affordability for their employee base, But there are 1:03:06.840 --> 1:03:10.320 tons of ways that you can provide childcare for your 1:03:10.520 --> 1:03:12.560 employees without companies. 1:03:12.240 --> 1:03:16.560 Having to pay tons of money for it and provide. 1:03:16.240 --> 1:03:24.120 Opportunities flexible work, for example, offering for assistance around for 1:03:24.680 --> 1:03:28.160 companies to be able to connect people to childcare opportunities 1:03:29.000 --> 1:03:32.000 or connect employees to opportunities or places to take their 1:03:32.080 --> 1:03:34.680 children so that they can come to work and know 1:03:34.800 --> 1:03:36.840 that their children are in a safe environment. So I 1:03:36.920 --> 1:03:39.840 think there on some level there's something that companies can 1:03:39.920 --> 1:03:41.960 be doing that can be precostpective. 1:03:42.280 --> 1:03:44.640 All right, Santra, really appreciate you taking the time to 1:03:44.720 --> 1:03:48.200 speak with this here on important topic. Sandra Quint's CEO 1:03:48.600 --> 1:03:51.600 for Paradigm for Parody P for P. 1:03:56.560 --> 1:03:59.600 Thanks for listening to the Bloomberg Markets podcast. You can 1:03:59.640 --> 1:04:03.760 subscribe and listen to interviews at Apple Podcasts or whatever. 1:04:03.560 --> 1:04:05.000 Podcast platform you prefer. 1:04:05.440 --> 1:04:06.200 I'm Matt Miller. 1:04:06.480 --> 1:04:09.360 I'm on Twitter at Matt Miller nineteen seventy three. 1:04:09.840 --> 1:04:12.240 And I'm fall Sweeney. I'm on Twitter at pt Sweeney. 1:04:12.360 --> 1:04:15.000 Before the podcast, you can always catch us worldwide at 1:04:15.040 --> 1:04:15.800 Bloomberg Radio