1 00:00:01,840 --> 00:00:04,440 Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm 2 00:00:04,480 --> 00:00:07,280 Speaker 1: Bloomberg Quick Takes Tim Stanobek. We're here every day bringing 3 00:00:07,320 --> 00:00:09,800 Speaker 1: you the latest news from the world of business and finance, 4 00:00:09,840 --> 00:00:13,680 Speaker 1: plus technology, politics, economics, all furnishing the power of Business 5 00:00:13,680 --> 00:00:17,160 Speaker 1: Week reporters and editors, not to mention our journalists and 6 00:00:17,160 --> 00:00:19,640 Speaker 1: analyst in more than one and twenty countries. You can 7 00:00:19,680 --> 00:00:23,239 Speaker 1: download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 8 00:00:23,440 --> 00:00:25,160 Speaker 1: You can also listen to our radio show at two 9 00:00:25,200 --> 00:00:27,880 Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on 10 00:00:27,920 --> 00:00:31,680 Speaker 1: YouTube and now also on Bloomberg Quick Take. All right, 11 00:00:31,760 --> 00:00:33,360 Speaker 1: we've got our team back in New York. We're in 12 00:00:33,400 --> 00:00:35,280 Speaker 1: San Francisco. Now we're going to head Tare Bureau in 13 00:00:35,320 --> 00:00:37,720 Speaker 1: Atlanta because we've got one of the smart voices when 14 00:00:37,720 --> 00:00:40,960 Speaker 1: it comes to J. Powell and the Federal Reserve. J K. J. Powell's, 15 00:00:41,000 --> 00:00:44,440 Speaker 1: you know, speaking at Brookings taking questions. So let's bring 16 00:00:44,479 --> 00:00:47,760 Speaker 1: in Bloomberg News Economic reporters Steve Matthews. He is in 17 00:00:47,880 --> 00:00:50,720 Speaker 1: our Atlanta bureau, So Steve, good to have you here. 18 00:00:51,120 --> 00:00:54,840 Speaker 1: Let's talk about J. Powell. What was the most important 19 00:00:55,040 --> 00:00:57,560 Speaker 1: thing he said today, whether it was in his speech 20 00:00:57,880 --> 00:01:00,520 Speaker 1: or in his Q and A, Well, I think the 21 00:01:01,440 --> 00:01:03,720 Speaker 1: a couple of things. I mean, what the markets took 22 00:01:03,720 --> 00:01:07,360 Speaker 1: away from this was obviously kind of locked in on December. 23 00:01:07,400 --> 00:01:09,920 Speaker 1: You're gonna get a fifty basis point. Like he didn't 24 00:01:09,959 --> 00:01:12,959 Speaker 1: say that specifically, but if you read between the lines, 25 00:01:13,319 --> 00:01:15,840 Speaker 1: he all but said that, yes, we're gonna get fifty. 26 00:01:16,120 --> 00:01:20,480 Speaker 1: It's time to start slowing the pace of of rate hikes. 27 00:01:21,400 --> 00:01:25,160 Speaker 1: But he also said, you know, he repeated, and these 28 00:01:25,200 --> 00:01:30,640 Speaker 1: are themes from the past press conference at the November meeting, 29 00:01:31,319 --> 00:01:33,640 Speaker 1: that you could have rates that are higher than what 30 00:01:33,720 --> 00:01:37,320 Speaker 1: they had been expecting before. So you could have in 31 00:01:37,440 --> 00:01:40,960 Speaker 1: the dot plot in December rates moving up a bit 32 00:01:41,040 --> 00:01:45,080 Speaker 1: from where they were in September. To me, the thing 33 00:01:45,160 --> 00:01:48,200 Speaker 1: that jumped out was the way he was framing the 34 00:01:48,240 --> 00:01:52,640 Speaker 1: fight against inflation. He said, they're basically three types of inflation. 35 00:01:53,160 --> 00:01:56,960 Speaker 1: You have goods inflation, where there's been a lot of progress. 36 00:01:57,440 --> 00:02:01,000 Speaker 1: There was COVID disruption, now that is easying. You have 37 00:02:01,120 --> 00:02:05,600 Speaker 1: housing uh inflation and you know that's going to continue. 38 00:02:06,080 --> 00:02:09,480 Speaker 1: But if you look at new leases that they've already 39 00:02:09,520 --> 00:02:12,600 Speaker 1: started to come down. So there's was a lot of 40 00:02:12,600 --> 00:02:16,799 Speaker 1: optimism there and then the third area with services inflation, 41 00:02:17,480 --> 00:02:20,280 Speaker 1: and that was the area where there was, you know, 42 00:02:20,360 --> 00:02:23,480 Speaker 1: a very uncertain outlook that whether things are going to 43 00:02:23,520 --> 00:02:28,040 Speaker 1: get better or not, and that often, uh was you know, 44 00:02:28,440 --> 00:02:30,919 Speaker 1: that was where I was talking about the labor market. 45 00:02:31,000 --> 00:02:34,200 Speaker 1: There were being too tight labor market and that contributing 46 00:02:34,240 --> 00:02:37,679 Speaker 1: to wage pressures and inflation. Well, that's exactly where I 47 00:02:37,720 --> 00:02:39,720 Speaker 1: want to go, Steve, because something that stuck out to 48 00:02:39,760 --> 00:02:43,280 Speaker 1: me from Palace comments was what he said about the 49 00:02:43,400 --> 00:02:46,680 Speaker 1: labor market, the idea that immigration is well below pre 50 00:02:46,760 --> 00:02:49,440 Speaker 1: pandemic levels, we still got workers on the sidelines due 51 00:02:49,440 --> 00:02:52,760 Speaker 1: to COVID. And then there was this the what millions 52 00:02:52,800 --> 00:02:56,840 Speaker 1: of Americans who left the workforce early during the pandemic, 53 00:02:56,880 --> 00:03:00,680 Speaker 1: these so called pandemic era retirements. What stuck out to 54 00:03:00,720 --> 00:03:03,359 Speaker 1: you from the perspective of the supply side here because 55 00:03:03,720 --> 00:03:06,360 Speaker 1: it seems like he needs to bring down demand rather 56 00:03:06,400 --> 00:03:09,360 Speaker 1: than increased supply when it comes to labor, because that's 57 00:03:09,440 --> 00:03:12,760 Speaker 1: just not happening. Yeah, that was really fascinating because he 58 00:03:12,800 --> 00:03:16,000 Speaker 1: was saying, if you look at where the Congressional Budget 59 00:03:16,040 --> 00:03:19,640 Speaker 1: Office was projecting the size of the labor force before 60 00:03:19,800 --> 00:03:23,440 Speaker 1: the COVID pandemic that where they are right now is 61 00:03:23,480 --> 00:03:27,560 Speaker 1: several million jobs short of where they were expected to be, 62 00:03:28,080 --> 00:03:30,840 Speaker 1: and there are lots of reasons for that. Early retirements 63 00:03:31,160 --> 00:03:35,600 Speaker 1: was one, the amount of COVID deaths, and long COVID 64 00:03:35,760 --> 00:03:40,600 Speaker 1: was another area. But that and immigration, as you point out, 65 00:03:40,680 --> 00:03:44,400 Speaker 1: was has been disappointing, and he was He was kind 66 00:03:44,400 --> 00:03:48,880 Speaker 1: of called on Congress too and fiscal policymakers to do something. 67 00:03:48,880 --> 00:03:51,960 Speaker 1: He said, we could affect the demand, we can't affect 68 00:03:52,080 --> 00:03:56,480 Speaker 1: labor supply. And I'm not going to endorse any specific idea, 69 00:03:56,960 --> 00:03:59,720 Speaker 1: but it's something that would really help the economy if 70 00:04:00,040 --> 00:04:03,800 Speaker 1: coal policymakers would address the supply of labor. So, you know, 71 00:04:04,600 --> 00:04:07,160 Speaker 1: we'll see if that happens. Steve, you and I have 72 00:04:07,200 --> 00:04:08,960 Speaker 1: been around the block a few times. Tim as too 73 00:04:09,000 --> 00:04:11,960 Speaker 1: a little bit, but I do think they But I 74 00:04:12,000 --> 00:04:14,720 Speaker 1: do think the immigration story is something we've talked about 75 00:04:14,800 --> 00:04:18,480 Speaker 1: for years in terms of, you know, change it, make 76 00:04:18,520 --> 00:04:20,320 Speaker 1: it legal, bring them into the economy. There are a 77 00:04:20,360 --> 00:04:23,080 Speaker 1: lot of jobs that immigrants coming to the United States 78 00:04:23,160 --> 00:04:25,440 Speaker 1: would love to have that we're not able to fill 79 00:04:25,480 --> 00:04:28,080 Speaker 1: at this point. So, like it's been an old thing, 80 00:04:28,640 --> 00:04:31,200 Speaker 1: but it requires legislation and policy, and I don't know 81 00:04:31,200 --> 00:04:35,320 Speaker 1: if we're going to get that. Yeah, you know, we 82 00:04:35,320 --> 00:04:37,919 Speaker 1: we all have been around for quite a long time 83 00:04:38,240 --> 00:04:40,680 Speaker 1: because this has been a constant theme. I mean I 84 00:04:40,720 --> 00:04:44,480 Speaker 1: remember Ben Bernanky talking about it, and the Richard Fisher, 85 00:04:44,560 --> 00:04:49,360 Speaker 1: the former Dallas Fed president, made controversial remarks basically calling 86 00:04:49,400 --> 00:04:53,920 Speaker 1: for more immigration. And and clearly there are jobs that 87 00:04:54,160 --> 00:04:57,880 Speaker 1: you know are going unfilled because they're not being filled 88 00:04:57,920 --> 00:05:01,680 Speaker 1: by American workers. Americans don't want these particular jobs, are 89 00:05:01,760 --> 00:05:05,840 Speaker 1: are not skilled for them. And you know why we're 90 00:05:05,880 --> 00:05:09,080 Speaker 1: not bringing more people in. It's just it's it's it's 91 00:05:09,120 --> 00:05:13,440 Speaker 1: not a mystery. It's because Congress is you know, decided 92 00:05:13,480 --> 00:05:15,760 Speaker 1: not to do anything about it, and right now it's 93 00:05:15,880 --> 00:05:20,000 Speaker 1: it's just they're just continuing debate, alright. So I know 94 00:05:20,120 --> 00:05:22,320 Speaker 1: it's like, you know, what have you done for me today? 95 00:05:22,480 --> 00:05:24,120 Speaker 1: Or what have you done for me lately? We got 96 00:05:24,120 --> 00:05:26,880 Speaker 1: through j Pal very important. We saw the markets react. 97 00:05:27,200 --> 00:05:29,960 Speaker 1: How important is Friday's jobs report based on what we 98 00:05:30,000 --> 00:05:32,839 Speaker 1: heard from J Powell today? I think it is. It 99 00:05:33,000 --> 00:05:36,560 Speaker 1: is important, and it's not important for the December rate hike. 100 00:05:37,000 --> 00:05:41,840 Speaker 1: It's really now they're setting expectations for what happens in February. 101 00:05:42,120 --> 00:05:44,720 Speaker 1: The next big debate you're gonna hear the FED is 102 00:05:45,080 --> 00:05:47,600 Speaker 1: not about December. That's pretty much a done deal, abs 103 00:05:47,800 --> 00:05:50,800 Speaker 1: there being some shock, but it's about do you do 104 00:05:50,880 --> 00:05:55,080 Speaker 1: fifty basis points in February or do you do And 105 00:05:55,279 --> 00:05:57,880 Speaker 1: you know, if you do, then that kind of sets 106 00:05:58,120 --> 00:06:00,800 Speaker 1: at least the possibility that you could pause for a 107 00:06:00,800 --> 00:06:05,000 Speaker 1: while or or do another twenty five. So you know, 108 00:06:05,279 --> 00:06:08,720 Speaker 1: the next debate is going to be very much about 109 00:06:08,800 --> 00:06:12,680 Speaker 1: the early February meeting. Alright, I gotta dig into something 110 00:06:12,720 --> 00:06:14,920 Speaker 1: you said, pause for a while. It makes me think 111 00:06:14,960 --> 00:06:17,680 Speaker 1: of what j Powell said, you know, staying at restrictive 112 00:06:17,760 --> 00:06:20,719 Speaker 1: levels for some time, and the way he ended his speech, 113 00:06:20,720 --> 00:06:25,840 Speaker 1: we still have more work to do. What does sometime mean? Yeah, 114 00:06:25,880 --> 00:06:28,360 Speaker 1: that's a good that's a really good question, because it's 115 00:06:28,400 --> 00:06:33,280 Speaker 1: like they are setting up the idea that UH rate 116 00:06:33,360 --> 00:06:36,000 Speaker 1: hikes are going to slow, but they're going to continue, 117 00:06:36,040 --> 00:06:39,320 Speaker 1: and what's important is how high do they go and 118 00:06:39,360 --> 00:06:41,960 Speaker 1: for how long? And they're kind of trying to set 119 00:06:42,000 --> 00:06:44,960 Speaker 1: the narrative that it's going to be higher for longer, 120 00:06:46,000 --> 00:06:49,520 Speaker 1: but they're not really defining that. But you know, you 121 00:06:49,800 --> 00:06:53,720 Speaker 1: will get some definition in the December dot plot, which 122 00:06:53,720 --> 00:06:57,440 Speaker 1: will suggest that they plan to hold rates very high 123 00:06:57,520 --> 00:07:02,159 Speaker 1: for at least all of three So I think that 124 00:07:02,160 --> 00:07:04,719 Speaker 1: that is how they are looking at it. A difference 125 00:07:04,720 --> 00:07:06,760 Speaker 1: to what Gina marn Adams told us yesterday where she 126 00:07:06,800 --> 00:07:08,920 Speaker 1: thinks that they'll see a cut of fifty basis points 127 00:07:09,000 --> 00:07:12,760 Speaker 1: due to a recession. Carol, Yeah, that's interesting. So where 128 00:07:12,760 --> 00:07:14,360 Speaker 1: do we go with that? Steve? What are you hearing 129 00:07:14,360 --> 00:07:16,720 Speaker 1: about in terms of he was asked about certainly the 130 00:07:16,720 --> 00:07:19,680 Speaker 1: economic outlook and recession. He seems to believe that he 131 00:07:19,680 --> 00:07:21,880 Speaker 1: can still get a soft landing. So how do you 132 00:07:21,920 --> 00:07:23,640 Speaker 1: think about it? And the reporting that you were doing 133 00:07:23,640 --> 00:07:27,040 Speaker 1: on the FED. Well, it's interesting they're talking about a 134 00:07:27,080 --> 00:07:30,600 Speaker 1: soft landing because we're still having three point seven percent 135 00:07:30,680 --> 00:07:34,080 Speaker 1: unemployment right which is a very tight labor market. If 136 00:07:34,120 --> 00:07:38,520 Speaker 1: you look at GDP now, the Atlanta Feds GDP tracker, 137 00:07:39,000 --> 00:07:42,000 Speaker 1: it's tracking at over four percent for the fourth quarter. 138 00:07:42,080 --> 00:07:44,520 Speaker 1: It was interesting, he was The Big Book came out 139 00:07:44,560 --> 00:07:47,840 Speaker 1: today as well. It was pointing towards fairly, you know, 140 00:07:48,320 --> 00:07:52,400 Speaker 1: dismal growth in in the most recent period, but that's 141 00:07:52,440 --> 00:07:57,120 Speaker 1: not what the GDP trackers are showing. So, I mean, 142 00:07:57,400 --> 00:08:00,800 Speaker 1: I think the case for a soft landing is there's 143 00:08:00,840 --> 00:08:04,440 Speaker 1: so much momentum right now. Uh, the labor market can 144 00:08:04,480 --> 00:08:08,720 Speaker 1: take some hits and will still continue to grow. And 145 00:08:08,920 --> 00:08:14,120 Speaker 1: there's so much excess cash one on household balance sheets, uh, 146 00:08:14,200 --> 00:08:19,920 Speaker 1: still from from the COVID cutbacks and from stimulus and 147 00:08:20,000 --> 00:08:22,560 Speaker 1: on state and local governments, that you know that there's 148 00:08:22,640 --> 00:08:25,320 Speaker 1: reason to believe that there's gonna be a lot of momentum. 149 00:08:25,920 --> 00:08:32,160 Speaker 1: Uh into heyconds, Steve left with you. What economic data 150 00:08:32,200 --> 00:08:34,679 Speaker 1: have we gotten recently that is not working in the 151 00:08:34,679 --> 00:08:37,679 Speaker 1: feds favor? Because Jolts certainly is uh. And then a 152 00:08:37,720 --> 00:08:40,800 Speaker 1: slowdown in job gains on Friday will work in its favor. 153 00:08:40,840 --> 00:08:43,760 Speaker 1: But what hasn't worked in its favor? You know that 154 00:08:43,920 --> 00:08:47,920 Speaker 1: that's an interesting uh question. I mean, I would say, 155 00:08:48,000 --> 00:08:51,720 Speaker 1: really the big thing is the headline inflation numbers have 156 00:08:51,840 --> 00:08:55,120 Speaker 1: not come down. They continued to be disappointing that you've 157 00:08:55,120 --> 00:08:59,240 Speaker 1: had a S pointed out one good month, but uh, 158 00:08:59,600 --> 00:09:05,160 Speaker 1: you know you're still seeing much higher inflation, and and 159 00:09:05,320 --> 00:09:10,480 Speaker 1: while jobs are showing some improvement in moderation, Uh, it's 160 00:09:10,520 --> 00:09:14,560 Speaker 1: still running, you know, twice as high as the payrolls 161 00:09:14,559 --> 00:09:16,760 Speaker 1: are running, twice as high as as the FED would 162 00:09:16,800 --> 00:09:19,400 Speaker 1: like yeah, and the Fed lucky that at least the 163 00:09:19,440 --> 00:09:21,240 Speaker 1: labor market is held on to strength that gives them 164 00:09:21,280 --> 00:09:24,439 Speaker 1: still some room to work on those inflation number. Steve Matthews, 165 00:09:24,440 --> 00:09:26,839 Speaker 1: thank you so much. As always, he's economic supporter of 166 00:09:26,840 --> 00:09:30,439 Speaker 1: Bloomberg News. Joining us from our bureau in Atlanta. This 167 00:09:30,720 --> 00:09:34,480 Speaker 1: is Bloomberg Business Week with Carol Messer and Bloomberg Quick 168 00:09:34,520 --> 00:09:38,360 Speaker 1: Takes Tim Stinovic on Bloomberg Radio. We do want to 169 00:09:38,400 --> 00:09:41,200 Speaker 1: get though to the cover of Bloomberg Business Week, which 170 00:09:41,200 --> 00:09:43,920 Speaker 1: also happens to be this week's Bloomberg Big Take, or 171 00:09:43,920 --> 00:09:46,240 Speaker 1: I should say Today's Bloomberg Big Take. And to say 172 00:09:46,240 --> 00:09:49,280 Speaker 1: it's a troubling story is certainly an understatement. The story 173 00:09:49,559 --> 00:09:53,680 Speaker 1: Tim about TikTok It's viral challenges that children are actually 174 00:09:53,800 --> 00:09:56,360 Speaker 1: dying front with more. We're joined by Bloomberg Business Week 175 00:09:56,480 --> 00:09:58,480 Speaker 1: editor Joel Weber, who joins us on the access line 176 00:09:58,480 --> 00:10:01,079 Speaker 1: from Brooklyn, New York. So with us is Bloomberg News 177 00:10:01,120 --> 00:10:05,040 Speaker 1: investigative reporter Olivia Carville. She's with us from the Bloomberg 178 00:10:05,080 --> 00:10:09,040 Speaker 1: Interactive Broker's studio in Manhattan. Joel, I want to start 179 00:10:09,080 --> 00:10:12,319 Speaker 1: with you the blackout challenge. It's something that children are 180 00:10:12,480 --> 00:10:15,840 Speaker 1: dying from the question Olivia tried to answer here is 181 00:10:16,000 --> 00:10:18,560 Speaker 1: why isn't the world's most popular app We're talking TikTok 182 00:10:18,640 --> 00:10:23,600 Speaker 1: here doing more to protect them. Yeah, so blackout challenge 183 00:10:23,840 --> 00:10:28,680 Speaker 1: um has been this viral um uh sensation really that 184 00:10:28,679 --> 00:10:31,800 Speaker 1: it's taken off on social media, and you know, TikTok 185 00:10:31,840 --> 00:10:34,760 Speaker 1: is not the only platform where it's been a thing. 186 00:10:35,440 --> 00:10:40,840 Speaker 1: But what makes TikTok and the story really troubling is 187 00:10:41,960 --> 00:10:45,520 Speaker 1: the algorithm that has really turned TikTok into the world's 188 00:10:45,559 --> 00:10:50,640 Speaker 1: most popular app is incredibly value, very very powerful, and 189 00:10:50,880 --> 00:10:55,760 Speaker 1: it's so good at servicing content. Um. But TikTok itself 190 00:10:56,520 --> 00:11:00,839 Speaker 1: extremely popular, popular with young kids, but had no way 191 00:11:00,960 --> 00:11:04,440 Speaker 1: of determining whether or not a kid is actually old 192 00:11:04,520 --> 00:11:06,880 Speaker 1: enough to be using the app, and that's led to 193 00:11:06,960 --> 00:11:12,840 Speaker 1: some really, really frightening situations. And personally, it's one of 194 00:11:12,840 --> 00:11:14,840 Speaker 1: these stories. After I read it, I took away my 195 00:11:14,920 --> 00:11:16,920 Speaker 1: son's devices and was like, you will never see the 196 00:11:16,960 --> 00:11:21,440 Speaker 1: internet ever again. And I feel I say that lighthearted, 197 00:11:22,280 --> 00:11:24,640 Speaker 1: but for real, like this is one of these things 198 00:11:24,640 --> 00:11:28,400 Speaker 1: that everyone just assumes, um that you you you know, 199 00:11:28,480 --> 00:11:30,680 Speaker 1: the kids are are not going to find themselves in 200 00:11:30,800 --> 00:11:34,680 Speaker 1: places that they're not supposed to be and just truly harolding. 201 00:11:34,920 --> 00:11:39,680 Speaker 1: How scary some of these corners can become. Um, Olivia, 202 00:11:39,920 --> 00:11:42,400 Speaker 1: bring us into how you went about reporting this story, 203 00:11:42,559 --> 00:11:48,200 Speaker 1: because um, it really involves some tragic, tragic elements. Yeah, 204 00:11:48,200 --> 00:11:52,360 Speaker 1: it does. I started reporting this pace by trying to 205 00:11:52,400 --> 00:11:56,360 Speaker 1: get a sense of what happens inside TikTok. After a 206 00:11:56,640 --> 00:12:00,960 Speaker 1: child dies participating in an online challenge, and maybe there's 207 00:12:01,000 --> 00:12:05,240 Speaker 1: been a headline and some local news reports connecting TikTok 208 00:12:05,320 --> 00:12:08,280 Speaker 1: to that death, how does the company respond and what 209 00:12:08,440 --> 00:12:12,520 Speaker 1: happens internally? And the way to answer that question was 210 00:12:12,600 --> 00:12:15,920 Speaker 1: to try and build sources on their trust and safety team. 211 00:12:15,960 --> 00:12:19,080 Speaker 1: This is the team that is built within TikTok to 212 00:12:19,880 --> 00:12:23,120 Speaker 1: handle the worst case scenarios. These are the fixes of 213 00:12:23,160 --> 00:12:25,120 Speaker 1: the Internet, the people who come in and clean up 214 00:12:25,160 --> 00:12:28,480 Speaker 1: the mess, protect the company's reputation, but also try and 215 00:12:28,559 --> 00:12:32,440 Speaker 1: protect users. And I spoke to more than two dozen 216 00:12:32,559 --> 00:12:35,800 Speaker 1: current and former trust and safety insiders to get a 217 00:12:35,840 --> 00:12:39,560 Speaker 1: sense of what happens at TikTok in the aftermath of 218 00:12:39,679 --> 00:12:42,920 Speaker 1: a really tragic incident like this, and that's how we 219 00:12:42,920 --> 00:12:45,480 Speaker 1: were able to tell the story is really through the 220 00:12:45,559 --> 00:12:49,400 Speaker 1: lens of that trust and safety team. Well, speaking of 221 00:12:49,520 --> 00:12:52,720 Speaker 1: the tragic side of this, your piece starts out with 222 00:12:53,520 --> 00:12:57,760 Speaker 1: just the tragic story of Ariannia Royo. Can you share that, 223 00:12:58,520 --> 00:13:01,400 Speaker 1: share her story and what her family has gone through. 224 00:13:02,120 --> 00:13:04,800 Speaker 1: Arianni was a nine year old girl. She lived down 225 00:13:04,840 --> 00:13:09,200 Speaker 1: in Milwaukee, Wisconsin, and she loved TikTok. You know, this 226 00:13:09,320 --> 00:13:12,120 Speaker 1: is the most popular app in the world, and it 227 00:13:12,240 --> 00:13:16,680 Speaker 1: is hard to deny the success of um of this company. 228 00:13:17,360 --> 00:13:21,560 Speaker 1: Seventy percent of teenagers in America are using TikTok and 229 00:13:21,559 --> 00:13:24,240 Speaker 1: they're using it more than all of the other apps 230 00:13:24,240 --> 00:13:29,960 Speaker 1: out there, Facebook, Snapchat, YouTube, Twitter. So Ariane, like most kids, 231 00:13:30,200 --> 00:13:32,880 Speaker 1: fell in love with TikTok and she was using the 232 00:13:32,880 --> 00:13:36,719 Speaker 1: platform on a daily basis, and she really enjoyed participating 233 00:13:36,880 --> 00:13:41,000 Speaker 1: in the trending challenges. She would do things like hold 234 00:13:41,040 --> 00:13:44,120 Speaker 1: water in her mouth until you start giggling, really kind 235 00:13:44,120 --> 00:13:48,800 Speaker 1: of harmless, fun joking challenges. But in February of last year, 236 00:13:49,120 --> 00:13:52,720 Speaker 1: she attempted the Blackout challenge, which is where children try 237 00:13:52,760 --> 00:13:56,360 Speaker 1: and choke themselves with household objects until they black out 238 00:13:56,920 --> 00:13:59,679 Speaker 1: and then filmed the adrenaline rush or the high they 239 00:13:59,720 --> 00:14:04,400 Speaker 1: get regaining consciousness. But at the age of nine, Ariani 240 00:14:04,600 --> 00:14:09,480 Speaker 1: unfortunately was unable to help herself or to save herself. 241 00:14:09,520 --> 00:14:12,160 Speaker 1: She had choked herself with a metal dog leash and 242 00:14:12,840 --> 00:14:19,240 Speaker 1: she tragically died. So Olivia obviously TikTok is aware that 243 00:14:19,640 --> 00:14:22,640 Speaker 1: there's a challenge here and that these have happened, there's 244 00:14:22,680 --> 00:14:25,880 Speaker 1: been lawsuits. What does the company have to say about it? 245 00:14:25,920 --> 00:14:28,880 Speaker 1: And and what's their what's their official response? And then 246 00:14:28,920 --> 00:14:32,280 Speaker 1: what what are what are others saying about that response? Yeah, 247 00:14:32,320 --> 00:14:35,600 Speaker 1: I mean, these these dangerous challenges bounce across platforms. They 248 00:14:35,640 --> 00:14:38,120 Speaker 1: exist on TikTok, but they exist on all the others 249 00:14:38,120 --> 00:14:42,520 Speaker 1: as well, and users actually try and sidestep safety restrictions 250 00:14:42,560 --> 00:14:46,960 Speaker 1: by doing things like misspelling keywords. So rather than writing 251 00:14:47,000 --> 00:14:51,040 Speaker 1: blackout challenge, which has been banned on TikTok, they'll right 252 00:14:51,440 --> 00:14:54,440 Speaker 1: black out with a zero and try and get around 253 00:14:54,480 --> 00:14:58,040 Speaker 1: the the artificial intelligence or the systems that have been 254 00:14:58,080 --> 00:15:01,560 Speaker 1: set up to try and protect kids. So TikTok really 255 00:15:01,600 --> 00:15:04,920 Speaker 1: doesn't want this content on its platform. It's done what 256 00:15:05,000 --> 00:15:07,680 Speaker 1: it can to train its moderators to take down any 257 00:15:07,720 --> 00:15:12,080 Speaker 1: content relating to the blackout challenge, and it also prevents 258 00:15:12,080 --> 00:15:14,840 Speaker 1: anyone from being able to search for Blackout Challenge related 259 00:15:14,880 --> 00:15:18,560 Speaker 1: content in the app, and it's set those um those 260 00:15:18,600 --> 00:15:21,680 Speaker 1: features in place, those safety restrictions in place at the 261 00:15:21,760 --> 00:15:24,040 Speaker 1: start of last year after the first ten year old 262 00:15:24,040 --> 00:15:29,080 Speaker 1: girl died attempting this particular challenge. But unfortunately, kids are 263 00:15:29,160 --> 00:15:31,640 Speaker 1: smart and they know how to get around these and 264 00:15:31,840 --> 00:15:34,440 Speaker 1: you know, these safety restrictions, and they're doing that, and 265 00:15:34,480 --> 00:15:38,280 Speaker 1: that means that the challenges continuing to spread across social 266 00:15:38,320 --> 00:15:42,000 Speaker 1: media platforms. And the most recent cases that we could 267 00:15:42,080 --> 00:15:45,800 Speaker 1: find of deaths associated to the blackout challenge was August 268 00:15:45,840 --> 00:15:49,080 Speaker 1: of this year. So despite all of those safety features 269 00:15:49,080 --> 00:15:54,360 Speaker 1: being implemented, the deaths have kept happening. Olivia have to say, 270 00:15:54,360 --> 00:15:56,760 Speaker 1: I've had a million questions come to mind, the responsibility 271 00:15:56,800 --> 00:15:59,960 Speaker 1: of the company, you know, making sure kids aren't there, 272 00:16:00,720 --> 00:16:03,160 Speaker 1: you know, platform and having access to content that they 273 00:16:03,160 --> 00:16:05,640 Speaker 1: shouldn't have, and where are the martyr readers like watching 274 00:16:05,680 --> 00:16:08,320 Speaker 1: all of this. We're a regulator, so where do you 275 00:16:08,360 --> 00:16:10,280 Speaker 1: think we need to go from here to get on 276 00:16:10,320 --> 00:16:13,320 Speaker 1: top of this. Well, that question of age verification is 277 00:16:13,360 --> 00:16:15,080 Speaker 1: like the elephant in the room. This is one of 278 00:16:15,120 --> 00:16:18,080 Speaker 1: the hardest things for these social media platforms to do. 279 00:16:18,520 --> 00:16:21,240 Speaker 1: How can you tell the exact age of the person 280 00:16:21,320 --> 00:16:24,200 Speaker 1: who was on the app, you know, using that device, 281 00:16:24,800 --> 00:16:28,520 Speaker 1: and don't forget that children's content is allowed on TikTok. 282 00:16:29,040 --> 00:16:33,040 Speaker 1: You can film your children or your siblings who are 283 00:16:33,120 --> 00:16:36,640 Speaker 1: under the age of thirteen and post about it. Every 284 00:16:36,640 --> 00:16:40,080 Speaker 1: social media platform in the US at least has a 285 00:16:40,160 --> 00:16:42,120 Speaker 1: rule that says you have to be over the age 286 00:16:42,120 --> 00:16:45,600 Speaker 1: of thirteen to use the product. This, you know, they 287 00:16:45,600 --> 00:16:48,760 Speaker 1: call it within the industry the age gate, and it's 288 00:16:48,920 --> 00:16:51,760 Speaker 1: very hard to enforce that, so these companies are trying 289 00:16:51,760 --> 00:16:53,600 Speaker 1: to find ways around it. But this is one of 290 00:16:53,600 --> 00:16:57,800 Speaker 1: the biggest challenges that social media platforms face. An incredible 291 00:16:57,840 --> 00:17:01,320 Speaker 1: story this is Bloomberg has been this week with Carol 292 00:17:01,400 --> 00:17:05,840 Speaker 1: Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 293 00:17:06,400 --> 00:17:09,040 Speaker 1: One thing we wanted to get to is a story 294 00:17:09,040 --> 00:17:11,560 Speaker 1: that's also in Bloomberg Business Week in the upcoming new issue. 295 00:17:12,000 --> 00:17:16,000 Speaker 1: And what's interesting is this has to do with um Avatar, 296 00:17:16,080 --> 00:17:18,040 Speaker 1: which I think is kind of interesting. Tim coming off 297 00:17:18,440 --> 00:17:21,119 Speaker 1: getting to go into our plane yesterday right at JFK, 298 00:17:21,320 --> 00:17:26,199 Speaker 1: they're spending money on advertising. There were tons of posters 299 00:17:26,240 --> 00:17:30,040 Speaker 1: about the Avatar sequel, and and you and I started saying, yeah, 300 00:17:30,040 --> 00:17:31,879 Speaker 1: go ahead, Well we were saying, wait, is this a 301 00:17:31,920 --> 00:17:34,760 Speaker 1: Fox movies? This a Disney movie? Well, this gets to 302 00:17:34,800 --> 00:17:37,560 Speaker 1: a story. It's a confusing but a lot changed about 303 00:17:37,600 --> 00:17:40,000 Speaker 1: three years ago. Let's get to it with Felix Gillette, 304 00:17:40,040 --> 00:17:42,760 Speaker 1: Media Entertainment and Telecom editor for Bloomberg Business Week. He's 305 00:17:42,760 --> 00:17:45,760 Speaker 1: also the author of It's Not TV, The Spectacular Rise, Revolution, 306 00:17:45,800 --> 00:17:47,680 Speaker 1: and Future of HBO. He joins us live from the 307 00:17:47,680 --> 00:17:50,560 Speaker 1: Bloomberg Interactive Broker Studio. First of all, Felix, I had 308 00:17:50,600 --> 00:17:52,439 Speaker 1: no idea until I read your piece that this was 309 00:17:52,480 --> 00:17:55,720 Speaker 1: the top grossing movie of all time. Uh. I saw 310 00:17:55,720 --> 00:17:57,560 Speaker 1: it and I don't even remember what it was about. 311 00:17:58,000 --> 00:18:01,200 Speaker 1: That's how much of an impact. Why was this Why 312 00:18:01,280 --> 00:18:03,960 Speaker 1: was this movie so hot? Uh? You know, I think 313 00:18:04,160 --> 00:18:06,800 Speaker 1: part of it was the technology at that point. Everyone 314 00:18:06,880 --> 00:18:09,320 Speaker 1: was so excited to see it in three D and 315 00:18:09,359 --> 00:18:11,960 Speaker 1: people were making all these grand predictions about there would 316 00:18:12,040 --> 00:18:15,160 Speaker 1: never be anything except three D movies in the future 317 00:18:15,160 --> 00:18:19,119 Speaker 1: based on this movie, and that didn't reappen, but people 318 00:18:19,440 --> 00:18:22,399 Speaker 1: did see it in droves. One thing I do remember, 319 00:18:22,400 --> 00:18:24,880 Speaker 1: I'm not joking. The thing I remember about it as 320 00:18:24,920 --> 00:18:26,280 Speaker 1: I saw it in New York City before I even 321 00:18:26,320 --> 00:18:28,840 Speaker 1: moved to New York. It was like twenty five dollars 322 00:18:28,880 --> 00:18:31,080 Speaker 1: to see it in three D and in imax and 323 00:18:31,119 --> 00:18:33,760 Speaker 1: that was what two thousand nine I think yep, thirteen 324 00:18:33,880 --> 00:18:39,520 Speaker 1: years ago. So okay, so breakfast forward to today. Yeah. 325 00:18:39,560 --> 00:18:42,600 Speaker 1: So now this is a big moment, uh, for the 326 00:18:42,640 --> 00:18:45,440 Speaker 1: Avatar franchise. This is the first if it goes well. 327 00:18:45,880 --> 00:18:48,280 Speaker 1: James Cameron, the director, has said he's going to make 328 00:18:48,320 --> 00:18:52,320 Speaker 1: five of these. Um and the Avatar three has already 329 00:18:52,400 --> 00:18:55,680 Speaker 1: been partly shot. Um, you know, every two years will 330 00:18:55,680 --> 00:18:59,920 Speaker 1: be another Avatar sequel and uh, it's a huge bed 331 00:19:00,160 --> 00:19:03,640 Speaker 1: for now Disney. The first one was made by Fox 332 00:19:03,840 --> 00:19:07,640 Speaker 1: and then since then Disney has acquired Fox. And it's 333 00:19:07,680 --> 00:19:10,120 Speaker 1: this crazy moment for Disney where you know, the share 334 00:19:10,160 --> 00:19:12,119 Speaker 1: price has been down this year. They just got rid 335 00:19:12,160 --> 00:19:16,040 Speaker 1: of their former CEO, brought back his predecessor, bibe Igor. 336 00:19:16,400 --> 00:19:19,359 Speaker 1: Bob Iger is the one who made the deal to 337 00:19:19,359 --> 00:19:23,920 Speaker 1: acquire Fox, which brought Avatar into the Disney family. Um, 338 00:19:24,040 --> 00:19:25,840 Speaker 1: so this is a big moment. They spend a huge 339 00:19:25,840 --> 00:19:28,240 Speaker 1: amount of money. I think four hundred million dollars is 340 00:19:28,440 --> 00:19:31,360 Speaker 1: on the production alone, plus a couple hundred million more 341 00:19:31,400 --> 00:19:35,880 Speaker 1: to market this, and uh it better be huge. Yeah. 342 00:19:35,920 --> 00:19:37,760 Speaker 1: I was just gonna say, let's do some simple math. 343 00:19:37,800 --> 00:19:39,920 Speaker 1: So if it made about three billion back in two 344 00:19:39,920 --> 00:19:44,119 Speaker 1: thousand nine, Disney paid wet Felix seventy one billion to 345 00:19:44,240 --> 00:19:48,040 Speaker 1: bring twenty one century Fox into the Magic Kingdom three 346 00:19:48,119 --> 00:19:50,520 Speaker 1: years ago. So what have we got to do three 347 00:19:50,760 --> 00:19:54,840 Speaker 1: into seventy one? So we're talking about twenty movies or 348 00:19:54,840 --> 00:19:59,840 Speaker 1: so forty years to have one of these every two years. Um, yeah, 349 00:19:59,880 --> 00:20:02,040 Speaker 1: I mean they think, you know, James Cameron has this 350 00:20:02,080 --> 00:20:09,159 Speaker 1: incredible track record of movies, Blockbusters, Titanic, True Lies, Terminator, 351 00:20:09,960 --> 00:20:12,000 Speaker 1: so it's it's a good it's always good to bet 352 00:20:12,080 --> 00:20:15,000 Speaker 1: with James Cameron. Um. You know, this is an odd 353 00:20:15,000 --> 00:20:18,000 Speaker 1: one because it's unusual for a really successful movie to 354 00:20:18,080 --> 00:20:21,439 Speaker 1: go thirteen years before a sequel comes out. Um, it 355 00:20:21,520 --> 00:20:26,520 Speaker 1: was delayed several times COVID among other things. And there's 356 00:20:26,560 --> 00:20:30,800 Speaker 1: not a huge um amount of you know, there's no 357 00:20:30,880 --> 00:20:33,439 Speaker 1: TV shows, there's nothing, there's not a lot of merchandise 358 00:20:33,480 --> 00:20:37,840 Speaker 1: out there for Avatar, So in some ways it is unusual. Yeah, well, 359 00:20:37,920 --> 00:20:40,000 Speaker 1: sorry to jump in. One thing that I'm a little 360 00:20:40,440 --> 00:20:45,480 Speaker 1: confused about is the relationship between Avatar and Disney pre 361 00:20:45,880 --> 00:20:48,480 Speaker 1: the assets of twenty century Fox that were sold your 362 00:20:48,520 --> 00:20:52,600 Speaker 1: twentieth century Fox that were sold to um Disney. Yeah, 363 00:20:52,600 --> 00:20:58,320 Speaker 1: Disney actually made based on licensing the Avatar I p 364 00:20:58,800 --> 00:21:01,600 Speaker 1: in Florida, and which is one of the ways that 365 00:21:01,640 --> 00:21:06,240 Speaker 1: I think that they, you know, wanted to acquire Fox. 366 00:21:06,280 --> 00:21:09,720 Speaker 1: I mean it made sense get Avatar under the Disney roof. Fully. 367 00:21:10,320 --> 00:21:14,119 Speaker 1: That park is you know, still pretty popular, um and 368 00:21:14,440 --> 00:21:17,840 Speaker 1: it's pretty much the existing you know. You go and 369 00:21:17,880 --> 00:21:21,280 Speaker 1: see Pandor, which is the moon where Avatar, you know, 370 00:21:21,359 --> 00:21:24,000 Speaker 1: this world that Avatar brought to life, and they think 371 00:21:24,040 --> 00:21:26,639 Speaker 1: that's what James Cameron brings. Don't give it away, Felix 372 00:21:26,800 --> 00:21:29,360 Speaker 1: Carol hasn't seen it yet. Kind of sound like an Avatar. 373 00:21:33,160 --> 00:21:35,840 Speaker 1: It's not Smurf, so the small blue people. So that's 374 00:21:35,840 --> 00:21:38,240 Speaker 1: the you know, we gotta make that first leap. Um. 375 00:21:38,320 --> 00:21:41,840 Speaker 1: But yeah, it brings this whole exist, this whole world 376 00:21:41,840 --> 00:21:44,120 Speaker 1: to life. This one is underwater. That's the big new 377 00:21:44,160 --> 00:21:46,920 Speaker 1: thing that's different from the first one. They've released three 378 00:21:46,960 --> 00:21:49,600 Speaker 1: trailers that look super cool. They invented all sorts of 379 00:21:49,640 --> 00:21:53,080 Speaker 1: cameras that cast learned how to do deep diving and 380 00:21:53,400 --> 00:21:56,240 Speaker 1: hold their breath for minutes. Um. But it's gonna be 381 00:21:56,240 --> 00:22:00,879 Speaker 1: crazy special effects, a big universe. Yea, so maybe Nemo 382 00:22:01,000 --> 00:22:03,600 Speaker 1: can meet Pandora like underwater? Is there like is that 383 00:22:03,640 --> 00:22:06,399 Speaker 1: where we see the collaboration? Got ten seconds left? Is 384 00:22:06,400 --> 00:22:08,959 Speaker 1: this a kind of franchise though that they can do parks, 385 00:22:08,960 --> 00:22:11,760 Speaker 1: they can do merchandizing really quickly. Yes, they want to 386 00:22:11,760 --> 00:22:13,520 Speaker 1: do it all. They want to expand this thing and 387 00:22:13,600 --> 00:22:18,240 Speaker 1: expand it, expand it and alright. Felix Gelette, Media Entertainment 388 00:22:18,280 --> 00:22:20,560 Speaker 1: and Telecom editor for Bloomberg Business Week. Also check out 389 00:22:20,600 --> 00:22:23,240 Speaker 1: his new book, It's Not TV. The Spectacular, Rise, Revolution 390 00:22:23,480 --> 00:22:25,600 Speaker 1: and Future of HBO. We've got a trip. We'll go 391 00:22:25,640 --> 00:22:28,760 Speaker 1: see the movie together. You're listening to Bloomberg Business Week 392 00:22:28,960 --> 00:22:32,919 Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovic on 393 00:22:33,080 --> 00:22:36,800 Speaker 1: Bloomberg Radio. All Right, everybody, just about twelve minutes to go, 394 00:22:36,920 --> 00:22:39,800 Speaker 1: just under until we get to that closing bell. We'll 395 00:22:39,800 --> 00:22:43,320 Speaker 1: talk with our TV colleagues for simulcast coverage. But in 396 00:22:43,359 --> 00:22:45,760 Speaker 1: the meantime, stocks, as you just heard from Charlie, they're 397 00:22:45,760 --> 00:22:47,359 Speaker 1: holding on to their best levels. We've got quite a 398 00:22:47,440 --> 00:22:50,240 Speaker 1: rally under way of stocks have come roaring back following 399 00:22:50,320 --> 00:22:53,000 Speaker 1: j Powell's comments, and we've seen yields which backed off 400 00:22:53,400 --> 00:22:56,800 Speaker 1: as a result of potentially maybe an easing in terms 401 00:22:56,800 --> 00:22:58,960 Speaker 1: of the size of those rate increases, we've seen yields 402 00:22:59,000 --> 00:23:01,440 Speaker 1: come down significantly. Let's see what Nicole Webb has to say, 403 00:23:01,640 --> 00:23:04,000 Speaker 1: Senior vice president and a financial adviser at the Wealth 404 00:23:04,080 --> 00:23:06,760 Speaker 1: Enhancement Group. But she joins us live from our Bloomberg 405 00:23:06,760 --> 00:23:10,080 Speaker 1: Interactive Broker studio in New York. Nicole, good to see you, 406 00:23:10,160 --> 00:23:12,080 Speaker 1: Good to hear you this afternoon. How are you. I'm 407 00:23:12,080 --> 00:23:14,879 Speaker 1: doing well. How are you? We're doing pretty well. I mean, 408 00:23:14,920 --> 00:23:18,119 Speaker 1: the equity markets are doing really well today. Off of 409 00:23:18,119 --> 00:23:20,600 Speaker 1: those comments from Fed Jair J. Powell a little earlier today. 410 00:23:20,600 --> 00:23:22,440 Speaker 1: How are you reading into his commentary? Is the market 411 00:23:22,480 --> 00:23:25,000 Speaker 1: getting a little ahead of itself? You know, it's really interesting. 412 00:23:25,040 --> 00:23:29,159 Speaker 1: I actually our firm had anticipated that there was perhaps 413 00:23:29,240 --> 00:23:33,440 Speaker 1: a bit of a validity rally come the December announcement, 414 00:23:33,440 --> 00:23:36,480 Speaker 1: if we do get the fifty basis points that people 415 00:23:36,560 --> 00:23:40,399 Speaker 1: believe have been already embedded into the stock market. UM. 416 00:23:40,440 --> 00:23:45,720 Speaker 1: I think his sentiment today was perhaps that validation that 417 00:23:45,800 --> 00:23:49,080 Speaker 1: the tapering, the slow down of the rate increases was 418 00:23:49,160 --> 00:23:52,320 Speaker 1: to be expected, and so I do think some of 419 00:23:52,359 --> 00:23:54,960 Speaker 1: that is playing out in today's market. Here the second 420 00:23:54,960 --> 00:23:59,679 Speaker 1: half of the day. But is it warranted? Gosh, I 421 00:23:59,720 --> 00:24:03,480 Speaker 1: am part of the consensus here. You know, from our 422 00:24:03,520 --> 00:24:06,960 Speaker 1: best estimates, what we're seeing is that when supply chain 423 00:24:07,080 --> 00:24:11,480 Speaker 1: fully normalizes, we expect inflation to sit around four per 424 00:24:11,480 --> 00:24:15,840 Speaker 1: cent um, and the amount of demand destruction necessary to 425 00:24:15,920 --> 00:24:19,080 Speaker 1: get down to that two percent target um suggests that 426 00:24:19,240 --> 00:24:22,919 Speaker 1: rates will have to either go above five or that 427 00:24:23,080 --> 00:24:25,680 Speaker 1: higher terminal rate will have to last a bit longer. 428 00:24:25,760 --> 00:24:28,920 Speaker 1: And we do think that that could impose a bit 429 00:24:28,920 --> 00:24:32,280 Speaker 1: of an earning shock, all right, So that leads me 430 00:24:32,359 --> 00:24:35,080 Speaker 1: to a question to call that higher rate environment, Right, 431 00:24:35,119 --> 00:24:37,400 Speaker 1: you get to find out which companies are really resilient 432 00:24:37,480 --> 00:24:39,320 Speaker 1: and set for the long term and which are not, 433 00:24:39,440 --> 00:24:41,600 Speaker 1: and that speaks to what we'll see in earnings. So 434 00:24:41,640 --> 00:24:44,480 Speaker 1: when you think about that, what kind of companies, what 435 00:24:44,560 --> 00:24:47,080 Speaker 1: kind of sectors would you expect, or what kind of 436 00:24:47,119 --> 00:24:49,600 Speaker 1: balance sheets should investors be looking at right now to 437 00:24:49,840 --> 00:24:52,080 Speaker 1: maybe commit some new money. Yeah, the end of the 438 00:24:52,080 --> 00:24:55,080 Speaker 1: today's trading day is interesting. And you know, one point 439 00:24:55,160 --> 00:24:58,359 Speaker 1: that we've seen play out actually this week consistently is 440 00:24:58,440 --> 00:25:01,320 Speaker 1: that you know, I wouldn't say that some of these 441 00:25:01,520 --> 00:25:05,119 Speaker 1: names are necessarily a shift in trends. So when we 442 00:25:05,160 --> 00:25:07,440 Speaker 1: think about duration assets kind of popping here at the 443 00:25:07,520 --> 00:25:09,600 Speaker 1: end of the day of the technology firms, we're not 444 00:25:09,720 --> 00:25:12,080 Speaker 1: ready to go back that way. This seems to be 445 00:25:12,119 --> 00:25:14,960 Speaker 1: a bit of maybe a rearranging before your end where 446 00:25:14,960 --> 00:25:19,000 Speaker 1: we're still looking at some of those revenue stability firms 447 00:25:19,080 --> 00:25:21,720 Speaker 1: coming into the new year. So one specific name that 448 00:25:21,760 --> 00:25:25,600 Speaker 1: comes to mind is Costco. We love the membership fees. 449 00:25:25,640 --> 00:25:28,520 Speaker 1: They don't carry many skews UM, so they carry a 450 00:25:28,560 --> 00:25:32,159 Speaker 1: strong competitive edge there. Uh, and they really have a 451 00:25:32,240 --> 00:25:36,560 Speaker 1: long track record of earnings per share growth that we like. Okay, 452 00:25:36,600 --> 00:25:38,120 Speaker 1: before we get to some other picks, I just want 453 00:25:38,119 --> 00:25:40,560 Speaker 1: to go back to your commentary about where we are 454 00:25:40,600 --> 00:25:42,679 Speaker 1: in the market right now. So if you're saying that 455 00:25:42,760 --> 00:25:44,920 Speaker 1: rates are going to have to go about five or 456 00:25:44,920 --> 00:25:47,199 Speaker 1: that we'll see a higher terminal rate for longer to 457 00:25:47,200 --> 00:25:49,480 Speaker 1: try to bring inflation down below what you see is 458 00:25:49,680 --> 00:25:53,640 Speaker 1: you know, four percent after supply chains do normalize. UM, 459 00:25:53,680 --> 00:25:57,080 Speaker 1: what does that mean for where the sp I Guess 460 00:25:57,080 --> 00:25:59,800 Speaker 1: the question that I'm asking is is are we off 461 00:25:59,840 --> 00:26:02,560 Speaker 1: of the lows of I don't want to say the year, 462 00:26:02,920 --> 00:26:08,000 Speaker 1: but of this this cycle. Yeah, with some confidence, we 463 00:26:08,000 --> 00:26:10,679 Speaker 1: would say that the trading range next year is a 464 00:26:10,680 --> 00:26:13,960 Speaker 1: bit narrow. So you have this convergence of two themes 465 00:26:13,960 --> 00:26:19,000 Speaker 1: that generally carry their own kind of predominant thematic trading. 466 00:26:19,400 --> 00:26:23,119 Speaker 1: Those two themes being in a stall in a stall 467 00:26:23,160 --> 00:26:26,080 Speaker 1: out of a higher terminal rate, so one the compression 468 00:26:26,119 --> 00:26:28,879 Speaker 1: to earnings there. But then secondly, markets tend to do 469 00:26:29,040 --> 00:26:32,119 Speaker 1: quite well in a disinflation environment. And so as you 470 00:26:32,160 --> 00:26:35,399 Speaker 1: continue to navigate those two against one another, you know, 471 00:26:35,440 --> 00:26:38,359 Speaker 1: our best guess is that the market does trade in 472 00:26:38,400 --> 00:26:43,880 Speaker 1: this tight range with suppressed earnings. But um, we too 473 00:26:43,880 --> 00:26:45,879 Speaker 1: are a bit in the camp of it doesn't have 474 00:26:46,000 --> 00:26:49,600 Speaker 1: to be a catastrophe. And Powell, you know, shared those 475 00:26:49,640 --> 00:26:53,120 Speaker 1: same sentiments today. I love that you come though with 476 00:26:53,520 --> 00:26:55,480 Speaker 1: company names and stocks I want to go back, and 477 00:26:55,520 --> 00:26:58,480 Speaker 1: you mentioned at Costco and that makes sense to me. 478 00:26:58,560 --> 00:27:01,200 Speaker 1: T j X is another one which we know people 479 00:27:01,320 --> 00:27:03,359 Speaker 1: love the bargain hunt. Right at t j X. We 480 00:27:03,400 --> 00:27:05,560 Speaker 1: know their latest earnings. It wasn't so much about the 481 00:27:05,600 --> 00:27:08,720 Speaker 1: home anymore and their own goods component, but about apparel 482 00:27:08,760 --> 00:27:12,280 Speaker 1: and other areas. They showed some strong results. Yeah, we've 483 00:27:12,280 --> 00:27:16,359 Speaker 1: been a bit dismissive of retailers this year, certainly, um, 484 00:27:16,400 --> 00:27:18,840 Speaker 1: but we love t J Max And look, we don't 485 00:27:18,840 --> 00:27:22,359 Speaker 1: believe that a disinflation environment means that inflation is going 486 00:27:22,359 --> 00:27:24,919 Speaker 1: away across the board. We know that we have some 487 00:27:25,000 --> 00:27:28,400 Speaker 1: threats to energy costs, We have looming inflation that will 488 00:27:28,480 --> 00:27:32,359 Speaker 1: be a bit persistent. And so you couple that with 489 00:27:32,560 --> 00:27:35,480 Speaker 1: you know t J's bargain hunting. But then also um 490 00:27:35,560 --> 00:27:39,080 Speaker 1: inventory excess, we know it exists, it's coming to them cheaply. 491 00:27:39,240 --> 00:27:42,440 Speaker 1: And then also you have freight and transportation costs coming down, 492 00:27:42,480 --> 00:27:45,639 Speaker 1: all helpful to their bottom line. What else you have 493 00:27:45,680 --> 00:27:47,960 Speaker 1: your eye on? What else are you? Let's talk Amazon? 494 00:27:48,400 --> 00:27:52,520 Speaker 1: Like Amazon? I do like Amazon. Um, this isn't one 495 00:27:52,560 --> 00:27:54,520 Speaker 1: where I would say, you know, if you're managing a 496 00:27:54,560 --> 00:27:56,520 Speaker 1: p m L day to day, it's probably not helpful. 497 00:27:56,560 --> 00:28:00,520 Speaker 1: But looking out into we expect that you know, it's 498 00:28:00,520 --> 00:28:03,600 Speaker 1: going to start to shine again for a lot of reasons. 499 00:28:03,680 --> 00:28:07,040 Speaker 1: But their management is highly focused on free cash flow. 500 00:28:07,440 --> 00:28:10,439 Speaker 1: They seem to be investing in the right areas. UM, 501 00:28:10,480 --> 00:28:15,159 Speaker 1: they're responding to trends and themes around them. Their excess inventory, 502 00:28:15,240 --> 00:28:17,280 Speaker 1: you know, they really doubled down on what they were 503 00:28:17,320 --> 00:28:20,040 Speaker 1: able to fulfill during COVID, and so let's hurt them 504 00:28:20,040 --> 00:28:23,520 Speaker 1: a little bit on the backside. Um. But again that 505 00:28:23,640 --> 00:28:25,880 Speaker 1: they too will be will be helped over the last 506 00:28:25,920 --> 00:28:28,720 Speaker 1: couple of quarters with shipping in freight costs coming down 507 00:28:28,720 --> 00:28:31,320 Speaker 1: as well. Do you think we see Jeff Bezos pull 508 00:28:31,359 --> 00:28:33,760 Speaker 1: a Bob Iger or Howard Schultz a little bit of 509 00:28:33,760 --> 00:28:38,440 Speaker 1: a boomerang? Um? I love a boomerang CEO story. My 510 00:28:38,520 --> 00:28:42,880 Speaker 1: favorite is Starbucks and now maybe Disney. Um, yes, yes, 511 00:28:42,920 --> 00:28:46,120 Speaker 1: I actually do. I think, Um, hindsight is a little 512 00:28:46,120 --> 00:28:49,960 Speaker 1: bit and sometimes I think when someone steps away, I 513 00:28:49,960 --> 00:28:53,560 Speaker 1: think about Bob Iger in this way. Um, he did 514 00:28:53,640 --> 00:28:57,720 Speaker 1: not invest in DTC or the direct consumer business and 515 00:28:57,880 --> 00:29:01,160 Speaker 1: probably now has spent a it amount of time focusing 516 00:29:01,200 --> 00:29:03,680 Speaker 1: on those Kudo would have should us and and comes 517 00:29:03,720 --> 00:29:08,240 Speaker 1: refreshed and able to perhaps maneuver with more clarity. I 518 00:29:08,240 --> 00:29:10,160 Speaker 1: think Basils might be able to bring that to the table. 519 00:29:10,200 --> 00:29:13,760 Speaker 1: I don't know, It's just just a thought, all right. 520 00:29:13,800 --> 00:29:15,880 Speaker 1: Just got about twenty seconds left here real quick on 521 00:29:15,960 --> 00:29:18,640 Speaker 1: Apple and why you think it's something to buy right now. 522 00:29:19,320 --> 00:29:22,440 Speaker 1: Consistently it proves to be shareholder friendly in terms of 523 00:29:22,480 --> 00:29:26,080 Speaker 1: the way that it focuses on its stock buy back program. Um. 524 00:29:26,120 --> 00:29:29,920 Speaker 1: I think that's interesting for retail investors to focus on UM, 525 00:29:29,920 --> 00:29:33,800 Speaker 1: and it's highly efficient. It's return on invested capital continues 526 00:29:33,840 --> 00:29:37,680 Speaker 1: to prevail. UM. They're just a great company overall. Alright, 527 00:29:37,680 --> 00:29:39,480 Speaker 1: we're gonna leave it on that note. Really some great 528 00:29:39,480 --> 00:29:41,600 Speaker 1: companies to think about, certainly in this environment. And it's 529 00:29:41,600 --> 00:29:43,480 Speaker 1: safe to say that I think all of these names 530 00:29:43,480 --> 00:29:45,960 Speaker 1: because pretty much everything seems to be rallied coming off 531 00:29:46,000 --> 00:29:48,560 Speaker 1: of the comments from j Pal Nicole Webb, thank you 532 00:29:48,600 --> 00:29:51,320 Speaker 1: so much. He's senior vice president, financial advisor at the 533 00:29:51,360 --> 00:29:55,000 Speaker 1: registered investment advisory firm Wealth Enhancement. Joining us back in 534 00:29:55,040 --> 00:29:58,000 Speaker 1: our Bloomberg in directive broker studio that's of course, in 535 00:29:58,000 --> 00:30:01,440 Speaker 1: our New York City headquarters. Thanks for listening to Bloomberg 536 00:30:01,440 --> 00:30:05,120 Speaker 1: Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg 537 00:30:05,200 --> 00:30:07,480 Speaker 1: dot com. You can also listen to our radio show 538 00:30:07,520 --> 00:30:10,520 Speaker 1: at two p m. Eastern on Bloomberg Radio, or watch 539 00:30:10,600 --> 00:30:13,480 Speaker 1: us live on YouTube and now also on Bloomberg Quick 540 00:30:13,520 --> 00:30:13,720 Speaker 1: Take