1 00:00:02,600 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Pienl podcast. I'm Paul swing you. 2 00:00:05,360 --> 00:00:07,680 Speaker 1: Along with my co host Lisa Brahma Waits. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money, Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,960 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:22,200 Speaker 1: at Bloomberg dot com. Well as Lisa just reported, it happened. 8 00:00:22,360 --> 00:00:24,599 Speaker 1: So we finally got the Department of Justice approving T 9 00:00:24,760 --> 00:00:28,400 Speaker 1: Mobile's acquisition of Sprint, clearing one of the biggest hurdles 10 00:00:28,480 --> 00:00:30,600 Speaker 1: left to get this deal done. This deal is announced 11 00:00:30,600 --> 00:00:33,440 Speaker 1: more than a year ago, Folks, to help us break 12 00:00:33,440 --> 00:00:36,000 Speaker 1: it down, what the d o J actually said, today's 13 00:00:36,080 --> 00:00:39,080 Speaker 1: Nabila Ahmed. She is a deal's reporter for Bloomberg News. 14 00:00:39,080 --> 00:00:43,279 Speaker 1: She joins us in our Bloomberg Interactive Broker studio. So, uh, Nabila, 15 00:00:43,440 --> 00:00:46,080 Speaker 1: what will? What is this d o J approval? What 16 00:00:46,120 --> 00:00:49,200 Speaker 1: does it really look like? D i J is requiring 17 00:00:49,280 --> 00:00:54,640 Speaker 1: Sprint in T Mobile to divest Sprints um prepaid businesses. 18 00:00:54,680 --> 00:00:57,720 Speaker 1: So this includes Boost Mobile, Virgin Mobile and Sprints are 19 00:00:57,800 --> 00:01:01,520 Speaker 1: in prepaid brand to dish and also give them some 20 00:01:01,640 --> 00:01:04,840 Speaker 1: spectrum assets. And on top of that, they have to 21 00:01:04,880 --> 00:01:08,000 Speaker 1: make available to Dish at least twenty thousand cell sites 22 00:01:08,319 --> 00:01:11,400 Speaker 1: and hundreds of retail locations so that Dish can actually, 23 00:01:11,760 --> 00:01:14,680 Speaker 1: you know, do its business with consumers. So far, the 24 00:01:14,800 --> 00:01:19,360 Speaker 1: market response has indicated that people are underwhelmed by dishes 25 00:01:19,560 --> 00:01:22,800 Speaker 1: involvement here and think that this is a wholesale win 26 00:01:23,000 --> 00:01:26,560 Speaker 1: for T Mobile, Sprint as well as Verizon and a 27 00:01:26,720 --> 00:01:29,360 Speaker 1: T and T. Is that what people are saying who 28 00:01:29,440 --> 00:01:31,720 Speaker 1: you speak to as well in the Billa listen the question. 29 00:01:32,000 --> 00:01:34,520 Speaker 1: I mean, it can't both be a win for Sprint 30 00:01:34,560 --> 00:01:37,880 Speaker 1: and T Mobile and for Dish, can it? I mean? So, yeah, 31 00:01:37,920 --> 00:01:40,760 Speaker 1: you can argue that Dish, you know, through this deal 32 00:01:40,800 --> 00:01:43,080 Speaker 1: will be set up to become a really strong force carrier, 33 00:01:43,120 --> 00:01:45,640 Speaker 1: but it's going to take a really long time. So 34 00:01:45,720 --> 00:01:48,160 Speaker 1: you've got Sprint and T Mobile being strengthened here, but 35 00:01:48,440 --> 00:01:50,600 Speaker 1: Dish is going to be a distant fourth I think, 36 00:01:50,600 --> 00:01:52,720 Speaker 1: and you know, making del Rahim today just said that 37 00:01:52,920 --> 00:01:56,320 Speaker 1: the remedies set up Dish as a disruptive force in wireless. 38 00:01:57,040 --> 00:01:59,560 Speaker 1: I don't know about that. I want to bring a 39 00:01:59,600 --> 00:02:02,440 Speaker 1: te equal Asian. Uh. Jennifer Reid. Jennifer is a senior 40 00:02:02,480 --> 00:02:05,400 Speaker 1: litigation annalys from Bloomberg Intelligence. She also joins us here 41 00:02:05,400 --> 00:02:08,120 Speaker 1: in our Bloomberg Interactive Broker Studio. So, Jen, from your 42 00:02:08,160 --> 00:02:11,920 Speaker 1: anti trust perspective, UH, is there anything unusual in what 43 00:02:12,000 --> 00:02:14,080 Speaker 1: came out of the d o J today? You know, 44 00:02:14,120 --> 00:02:16,080 Speaker 1: I don't think that there's anything unusual. But the one 45 00:02:16,120 --> 00:02:17,840 Speaker 1: thing I do want to push back on because I've 46 00:02:17,880 --> 00:02:20,040 Speaker 1: I've heard from many that this is really not going 47 00:02:20,080 --> 00:02:22,600 Speaker 1: to create a fourth competitor, and you know, what is 48 00:02:22,600 --> 00:02:24,240 Speaker 1: the d o J thinking? But I will have to 49 00:02:24,280 --> 00:02:27,080 Speaker 1: say that the d o J knows how much opposition 50 00:02:27,120 --> 00:02:29,680 Speaker 1: there's been to this deal and how much opposition there 51 00:02:29,680 --> 00:02:31,760 Speaker 1: may be to this settlement, and they're really still coming 52 00:02:31,760 --> 00:02:34,240 Speaker 1: off that loss. You know, from a T and T time, 53 00:02:34,280 --> 00:02:36,760 Speaker 1: Warner and I do think that they're going to be 54 00:02:36,919 --> 00:02:39,200 Speaker 1: very careful about what they do here, and they vet 55 00:02:39,280 --> 00:02:42,639 Speaker 1: these divestiture packages very carefully, and I have to think 56 00:02:42,680 --> 00:02:44,840 Speaker 1: they went through it with a fine tooth comb and 57 00:02:44,880 --> 00:02:47,280 Speaker 1: at least are convinced that this will do the trick. 58 00:02:47,639 --> 00:02:50,480 Speaker 1: But but in terms of being unusual or unique, I 59 00:02:50,480 --> 00:02:53,120 Speaker 1: think the time it took was unusual. How much came 60 00:02:53,120 --> 00:02:55,400 Speaker 1: out to the public was unusual, and even the announcement 61 00:02:55,400 --> 00:02:57,880 Speaker 1: today was a bit unusual. I'm surprised to hear you 62 00:02:57,919 --> 00:02:59,839 Speaker 1: say this. Do do you think that markets are sort 63 00:02:59,840 --> 00:03:04,040 Speaker 1: of under estimating how good this deal could potentially be 64 00:03:04,160 --> 00:03:07,080 Speaker 1: for Dish. Well, it's possible, that's one thing, But it 65 00:03:07,080 --> 00:03:09,480 Speaker 1: could also be that they still have a challenge the 66 00:03:09,480 --> 00:03:13,320 Speaker 1: companies with the state lawsuit. So this isn't over because 67 00:03:13,360 --> 00:03:15,240 Speaker 1: they still have a challenge. They still have to go 68 00:03:15,280 --> 00:03:17,320 Speaker 1: to court, and they either have to win in court 69 00:03:17,680 --> 00:03:19,880 Speaker 1: or they have to ultimately settle with the States in 70 00:03:19,960 --> 00:03:22,440 Speaker 1: order to get this deal closed. The other thing is 71 00:03:22,440 --> 00:03:24,600 Speaker 1: that Dish has been trading for a long time on 72 00:03:24,639 --> 00:03:27,680 Speaker 1: the expectation that they sell their spectrum assets and make 73 00:03:27,720 --> 00:03:30,120 Speaker 1: a ton of money out of that. This deal means 74 00:03:30,120 --> 00:03:32,880 Speaker 1: that Dish will not that's not what's going to be happening, 75 00:03:32,960 --> 00:03:35,440 Speaker 1: because they still will mean that Dish actually can't sell 76 00:03:35,480 --> 00:03:39,040 Speaker 1: control of those assets to anybody for three years. So 77 00:03:39,120 --> 00:03:41,440 Speaker 1: that may be another reason why you're seeing Dish kind 78 00:03:41,440 --> 00:03:44,880 Speaker 1: of share price performance being underwhelming today. So Nobilla, what's 79 00:03:44,880 --> 00:03:49,440 Speaker 1: the sense on timing when the sink can actually close? Well, 80 00:03:49,480 --> 00:03:52,280 Speaker 1: I guess they could close now, even though the lawsuit 81 00:03:52,320 --> 00:03:55,400 Speaker 1: from the State Ages is pending. They can technically do that, 82 00:03:55,760 --> 00:03:57,920 Speaker 1: but my understanding is that the companies are actually going 83 00:03:57,960 --> 00:04:00,200 Speaker 1: to be looking to settle with the State ages, these 84 00:04:00,720 --> 00:04:03,560 Speaker 1: twelve states and the District of Columbia, and you know 85 00:04:03,560 --> 00:04:06,040 Speaker 1: the court date is coming up in early October, but 86 00:04:06,080 --> 00:04:08,440 Speaker 1: they're going to try to settle before that. I love 87 00:04:08,480 --> 00:04:10,920 Speaker 1: how Paul asks the question, you know, when are they 88 00:04:10,920 --> 00:04:13,400 Speaker 1: going to finally settle this? When can we stop talking 89 00:04:13,440 --> 00:04:20,840 Speaker 1: about that there's there's there's there exactly? I should just 90 00:04:20,880 --> 00:04:23,159 Speaker 1: mention just shares are up two and a half percent, 91 00:04:23,240 --> 00:04:26,360 Speaker 1: so people do see some potential upside here, much bigger 92 00:04:26,360 --> 00:04:28,839 Speaker 1: gains though so far year to data on both Team 93 00:04:28,880 --> 00:04:32,599 Speaker 1: Mobile and Sprint, I do have to wonder. Tara La Chappella, 94 00:04:32,640 --> 00:04:36,440 Speaker 1: Bloomberg Opinion earlier today was asking the question, really wisely, 95 00:04:37,080 --> 00:04:40,479 Speaker 1: why are anti trust regulators not more focused on the 96 00:04:40,520 --> 00:04:44,200 Speaker 1: wireless carriers in the same way that they are big tech? 97 00:04:44,400 --> 00:04:47,760 Speaker 1: Jen Well, I think the issue is that when they 98 00:04:47,800 --> 00:04:51,279 Speaker 1: open these investigations, they're usually based on complaints. This is 99 00:04:51,320 --> 00:04:54,400 Speaker 1: what triggers it and true antitrust complaints, not not complaints 100 00:04:54,440 --> 00:04:56,920 Speaker 1: that I just don't like this company, but this company 101 00:04:57,040 --> 00:04:59,520 Speaker 1: is doing things that thwart me as a new competitor 102 00:04:59,800 --> 00:05:03,600 Speaker 1: or in increase consumer prices. And when those complaints come in, 103 00:05:04,000 --> 00:05:07,039 Speaker 1: this is what leads to an investigation, and usually it 104 00:05:07,040 --> 00:05:10,680 Speaker 1: will be an investigation of a company that's dominant, dominant 105 00:05:10,680 --> 00:05:13,360 Speaker 1: within a market. And if you look at wireless, while 106 00:05:13,400 --> 00:05:16,039 Speaker 1: we call it a concentrated market and we have big carriers, 107 00:05:16,320 --> 00:05:19,520 Speaker 1: you can't really say any one of them is necessarily dominant. No, 108 00:05:19,680 --> 00:05:22,720 Speaker 1: but you could say that the fight between T Mobile 109 00:05:22,760 --> 00:05:26,960 Speaker 1: and Sprint lowered costs for consumers materially well absolutely, and 110 00:05:26,960 --> 00:05:31,080 Speaker 1: then eliminating that fight will end up increasing costs for everyone, 111 00:05:31,080 --> 00:05:32,600 Speaker 1: which is a reason why people think that A T 112 00:05:32,720 --> 00:05:34,480 Speaker 1: and T and Verizon are going to be such big 113 00:05:34,480 --> 00:05:38,800 Speaker 1: winners from this high up. So, I mean, Nobilla, come 114 00:05:38,839 --> 00:05:40,760 Speaker 1: in here. I mean, what's the what's the counter argument? 115 00:05:41,600 --> 00:05:44,240 Speaker 1: What's the counter argument that you know, America is going 116 00:05:44,279 --> 00:05:46,160 Speaker 1: to be leading in five G, this is going to 117 00:05:46,240 --> 00:05:49,080 Speaker 1: be good for consumers, that's the counter argument. You know. 118 00:05:49,120 --> 00:05:50,880 Speaker 1: This is what Makin del Rahim wanted to do with 119 00:05:50,920 --> 00:05:53,200 Speaker 1: the settlement is to be able to say this is 120 00:05:53,240 --> 00:05:55,640 Speaker 1: actually going to be good for consumers. And if you 121 00:05:55,680 --> 00:05:58,400 Speaker 1: had Sprint was left behind, as we know, Lasa's friends 122 00:05:58,440 --> 00:06:01,039 Speaker 1: got a lot of its own issue is and and 123 00:06:01,200 --> 00:06:03,520 Speaker 1: you know it may have gone broke or would have 124 00:06:03,520 --> 00:06:05,400 Speaker 1: needed to have been taken over by somebody else. They 125 00:06:05,440 --> 00:06:08,440 Speaker 1: would have needed a partner at the very least. Um, 126 00:06:08,560 --> 00:06:10,159 Speaker 1: So this is a way of ensuring that you have 127 00:06:10,240 --> 00:06:13,520 Speaker 1: a stronger third carrier as well as an emerging fourth carrier. 128 00:06:13,640 --> 00:06:15,200 Speaker 1: It's been such a long time to Bill, if I 129 00:06:15,279 --> 00:06:18,840 Speaker 1: forget the original terms of the deal, but is massa 130 00:06:18,920 --> 00:06:22,440 Speaker 1: Herosan and soft Bank? Are they exiting completely their investment? 131 00:06:22,680 --> 00:06:25,560 Speaker 1: They're not. They're not clemented the company. They are going 132 00:06:25,560 --> 00:06:27,599 Speaker 1: to be still in the new company, but Derscha Telecom 133 00:06:27,640 --> 00:06:30,800 Speaker 1: will be the controlling shareholder. And the terms, just to 134 00:06:30,839 --> 00:06:34,640 Speaker 1: remind everyone, so it's twenty six and a half billion 135 00:06:34,680 --> 00:06:38,440 Speaker 1: dollars is the overall headline value. And actually they're saying 136 00:06:38,440 --> 00:06:41,960 Speaker 1: that even though they're making these divestitures, um, they're planned, 137 00:06:42,000 --> 00:06:45,120 Speaker 1: forty three billion dollars of synergies will still stand. And 138 00:06:45,160 --> 00:06:46,640 Speaker 1: I was going to say, at least of the argument 139 00:06:46,640 --> 00:06:48,640 Speaker 1: that you just made that you asked no Bill about 140 00:06:48,680 --> 00:06:51,120 Speaker 1: is exactly what the state's argument is in court. And 141 00:06:51,160 --> 00:06:53,280 Speaker 1: the answer is going to be that the remedy is 142 00:06:53,320 --> 00:06:55,800 Speaker 1: not going to allow the other three wireless carriers to 143 00:06:55,920 --> 00:06:58,520 Speaker 1: raise prices. That that's going to constrain their ability to 144 00:06:58,560 --> 00:07:00,560 Speaker 1: raise prices. So that's exactly what the fight is going 145 00:07:00,640 --> 00:07:02,440 Speaker 1: to be going forward. And the one last thing I 146 00:07:02,480 --> 00:07:04,359 Speaker 1: should say is that you know, we are still waiting 147 00:07:04,400 --> 00:07:07,040 Speaker 1: for formal left c C clearance here, so the companies 148 00:07:07,120 --> 00:07:09,400 Speaker 1: technically can't close until they get that, and that might 149 00:07:09,400 --> 00:07:12,480 Speaker 1: not be until September. When that happens, the States may 150 00:07:12,520 --> 00:07:14,480 Speaker 1: have to go to court to seek an emergency order 151 00:07:14,520 --> 00:07:17,440 Speaker 1: to keep the companies from closing. This is so interesting 152 00:07:17,480 --> 00:07:19,200 Speaker 1: to me. I mean, yes, we've been talking about this 153 00:07:19,240 --> 00:07:22,760 Speaker 1: deal forever, but it involves so much, and it involves, 154 00:07:22,840 --> 00:07:25,160 Speaker 1: you know, so many different players, and I'm just wondering, Jen, 155 00:07:25,680 --> 00:07:27,840 Speaker 1: what's the next step with some of these state lawsuits. 156 00:07:27,880 --> 00:07:30,360 Speaker 1: I mean, we we've heard that they're probably going to settle. 157 00:07:30,480 --> 00:07:32,880 Speaker 1: Is that your sense as well? Right now? I don't 158 00:07:32,920 --> 00:07:35,040 Speaker 1: see it that way. I think the states are really 159 00:07:35,160 --> 00:07:36,920 Speaker 1: dug in now at the companies are going to go 160 00:07:36,960 --> 00:07:39,080 Speaker 1: in there and try hard to settle, and the states 161 00:07:39,080 --> 00:07:41,560 Speaker 1: have more flexibility than the Department of Justice does in 162 00:07:41,640 --> 00:07:43,840 Speaker 1: terms of what they can accept. They can even accept 163 00:07:43,840 --> 00:07:46,680 Speaker 1: something like money just put into a fund or promises 164 00:07:46,720 --> 00:07:49,640 Speaker 1: to build out even for G in certain rural areas. 165 00:07:49,680 --> 00:07:51,680 Speaker 1: So I think that the companies will be trying very 166 00:07:51,720 --> 00:07:54,320 Speaker 1: hard to do that. The next step right now is 167 00:07:54,360 --> 00:07:57,400 Speaker 1: in August first meeting to hammer out the schedule. There 168 00:07:57,480 --> 00:07:59,960 Speaker 1: was in October seventh trial date that was agreed upon, 169 00:08:00,280 --> 00:08:02,720 Speaker 1: but it was contingent on T Mobile and Sprint getting 170 00:08:02,760 --> 00:08:05,360 Speaker 1: this deal. The terms of the deal done July twelfth. 171 00:08:05,400 --> 00:08:08,560 Speaker 1: Then that didn't happen, so Nobila legic real quickly. T Mobile, 172 00:08:08,600 --> 00:08:10,200 Speaker 1: what are they going to do with these Sprint assets? 173 00:08:10,320 --> 00:08:13,240 Speaker 1: Is there costs are taken out as a revenue, synergies. 174 00:08:13,280 --> 00:08:14,960 Speaker 1: What's the upside here? Yeah, I mean they've got these 175 00:08:14,960 --> 00:08:17,120 Speaker 1: forty three billion dollars of synergies which will be out 176 00:08:17,120 --> 00:08:19,800 Speaker 1: of operational costs. And really what they're getting is really 177 00:08:19,840 --> 00:08:23,000 Speaker 1: good quality midvance spectrum. Sprint has a lot of that, 178 00:08:23,280 --> 00:08:24,880 Speaker 1: and that you know, this is what they're going to 179 00:08:25,040 --> 00:08:28,080 Speaker 1: use to build out their five G network. Nabilla Ahmed, 180 00:08:28,120 --> 00:08:30,320 Speaker 1: thank you so much for being with us. Jennifer Reeh 181 00:08:30,400 --> 00:08:33,720 Speaker 1: Bloomberg Intelligence uh and Nabilla of Bloomberg News, thank you 182 00:08:33,760 --> 00:08:37,080 Speaker 1: both for being here and passing through the d o 183 00:08:37,160 --> 00:08:40,440 Speaker 1: J approval. It is official. UH, it is official that 184 00:08:40,520 --> 00:08:44,480 Speaker 1: they have approved the tie up between Sprint and T Mobile. 185 00:08:44,720 --> 00:08:47,200 Speaker 1: Right now, we want to turn our attention to UH 186 00:08:47,440 --> 00:08:50,880 Speaker 1: to the Intel. Intel shows rose today after reporting second 187 00:08:50,920 --> 00:08:54,640 Speaker 1: quarter earnings that beat expectations, that gave an upbeat forecast 188 00:08:54,960 --> 00:08:58,440 Speaker 1: for chip sales, sort of an indo key indicator. We're 189 00:08:58,520 --> 00:09:00,840 Speaker 1: very excited that we're about to hear from the CEO 190 00:09:01,200 --> 00:09:04,160 Speaker 1: himself about what the outlook might be. There's been a 191 00:09:04,160 --> 00:09:08,520 Speaker 1: lot of question recently about the outlook given China slowdown, 192 00:09:08,600 --> 00:09:11,679 Speaker 1: given global economy. UH. So we're going to turn our 193 00:09:11,720 --> 00:09:15,400 Speaker 1: attention over to Intel CEO Robert Swan talking with Bloomberg 194 00:09:15,440 --> 00:09:21,400 Speaker 1: anchors Vonnie Quinn and Guy Johnson. You're listening to Bloomberg 195 00:09:21,480 --> 00:09:25,600 Speaker 1: Markets with Lisa Ramowitz and Paul Sweeney on Bloomberg Radio. 196 00:09:25,880 --> 00:09:29,600 Speaker 1: If you speak with any chief executive or chief financial 197 00:09:29,640 --> 00:09:34,640 Speaker 1: officer of a big company, the buzzword today is artificial intelligence. 198 00:09:34,679 --> 00:09:37,840 Speaker 1: How do you use it? How can we best get 199 00:09:37,880 --> 00:09:42,559 Speaker 1: ahead of our competitors by understanding our business and deploying 200 00:09:42,600 --> 00:09:46,880 Speaker 1: it UH in a way that makes our our employment 201 00:09:47,000 --> 00:09:49,120 Speaker 1: more efficient. Joining us now as someone who knows a 202 00:09:49,160 --> 00:09:52,000 Speaker 1: lot about it. Don White, chief executive officer and founder 203 00:09:52,000 --> 00:09:55,280 Speaker 1: of Satisfied Labs in New York. So don before we 204 00:09:55,320 --> 00:09:58,360 Speaker 1: get into sort of the big conundrum of where artificial 205 00:09:58,400 --> 00:10:00,880 Speaker 1: intelligence can be deployed right now out and in the future, 206 00:10:01,200 --> 00:10:03,400 Speaker 1: just give us a sense of what Satisfied Labs is. 207 00:10:03,920 --> 00:10:07,520 Speaker 1: Satisfy Labs is an AI knowledge management platform that means 208 00:10:07,559 --> 00:10:10,480 Speaker 1: we take information data and convert it into a way 209 00:10:10,520 --> 00:10:13,880 Speaker 1: that machines can understand. Big buzzword around AI is that 210 00:10:13,960 --> 00:10:16,320 Speaker 1: machines can learn well. For them to learn these we 211 00:10:16,440 --> 00:10:20,640 Speaker 1: taught in specific format as specific verbiage. So what are 212 00:10:20,679 --> 00:10:23,440 Speaker 1: some of the early investors? Like? Who are you doing 213 00:10:23,480 --> 00:10:26,320 Speaker 1: business with right now? Our last round was led by 214 00:10:26,320 --> 00:10:29,560 Speaker 1: Major League Baseball. We've also worked with the Broadway Community, 215 00:10:29,559 --> 00:10:31,880 Speaker 1: a company called Broadway I which is a consortium of 216 00:10:31,920 --> 00:10:35,080 Speaker 1: producers and theater owners. And then red Light Management, which 217 00:10:35,080 --> 00:10:37,760 Speaker 1: is the largest independent music agency, has also bought in 218 00:10:37,800 --> 00:10:40,199 Speaker 1: for the entertainment and music festival business. So what do 219 00:10:40,280 --> 00:10:42,800 Speaker 1: you do for Major League Baseball? If I go to 220 00:10:43,080 --> 00:10:46,480 Speaker 1: city Field for example see field. The company started out 221 00:10:46,480 --> 00:10:49,040 Speaker 1: of the city Field. We were looking at a menu 222 00:10:49,160 --> 00:10:51,760 Speaker 1: and there was a question one of my co founders asked, hey, 223 00:10:51,920 --> 00:10:53,760 Speaker 1: you know they have bacon on a stick here, and 224 00:10:53,800 --> 00:10:55,959 Speaker 1: he said, hey, how could we find bacon on a six? 225 00:10:56,000 --> 00:10:59,400 Speaker 1: So we started promoting that idea and fans asked where 226 00:10:59,440 --> 00:11:00,800 Speaker 1: can I get baking on a stick? And the whole 227 00:11:00,840 --> 00:11:04,560 Speaker 1: idea kind of flew from that. That is a unique 228 00:11:04,559 --> 00:11:09,079 Speaker 1: story about how an AI UH data management company to 229 00:11:09,160 --> 00:11:13,040 Speaker 1: find bacon bake it on a stick. That's how I 230 00:11:13,040 --> 00:11:16,439 Speaker 1: guess that. My question is when we talk about AI, 231 00:11:16,520 --> 00:11:18,440 Speaker 1: it can be deployed in a whole host of different 232 00:11:18,440 --> 00:11:21,240 Speaker 1: ways across a whole host of different industries. Just to 233 00:11:21,280 --> 00:11:23,559 Speaker 1: give people a sense of what we're talking about, is 234 00:11:23,640 --> 00:11:26,760 Speaker 1: is basically being to call somebody, call a company up 235 00:11:27,200 --> 00:11:30,640 Speaker 1: and have a robot speak to you in a in 236 00:11:30,679 --> 00:11:34,640 Speaker 1: a sufficient way? Is it? Uh? The concept of predicting 237 00:11:34,840 --> 00:11:37,400 Speaker 1: a fans behavior? I mean, what what exactly are you 238 00:11:37,440 --> 00:11:40,400 Speaker 1: trying to cater to? In the AI sort of umbrella. 239 00:11:40,600 --> 00:11:44,040 Speaker 1: The future format is messaging. Messaging will be both chat 240 00:11:44,080 --> 00:11:48,439 Speaker 1: and voice. It's really about collecting all the exact answers 241 00:11:48,480 --> 00:11:51,200 Speaker 1: to questions so that you're not going through some tree, 242 00:11:51,520 --> 00:11:54,400 Speaker 1: but getting exactly what you need based on your query. 243 00:11:54,480 --> 00:11:57,360 Speaker 1: So all the technology companies right now are focused on 244 00:11:57,400 --> 00:12:00,560 Speaker 1: getting their information in a format or a way that 245 00:12:00,640 --> 00:12:02,839 Speaker 1: now when you do go onto chat, you can get 246 00:12:02,840 --> 00:12:05,480 Speaker 1: exactly what you need right away. How predictable are we do? 247 00:12:05,520 --> 00:12:07,360 Speaker 1: We just ask the same questions over and over again, 248 00:12:07,440 --> 00:12:10,960 Speaker 1: us humans. We have reviewed nine million questions in just 249 00:12:11,080 --> 00:12:15,320 Speaker 1: stadiums and about are very similar. But what you'll find 250 00:12:15,920 --> 00:12:18,120 Speaker 1: is I have sixty five different ways to ask where 251 00:12:18,120 --> 00:12:20,839 Speaker 1: the bathroom is? And it's really interesting to see how 252 00:12:20,960 --> 00:12:24,360 Speaker 1: people approach that very common question with their own little skew. 253 00:12:26,160 --> 00:12:30,560 Speaker 1: We're really boring essentially, what the nuts involved in this are. 254 00:12:30,760 --> 00:12:35,199 Speaker 1: So what's your relationship with Apple? So we are a developer, 255 00:12:35,520 --> 00:12:39,640 Speaker 1: we support the platform. So Apple business Chat has enabled 256 00:12:39,640 --> 00:12:42,800 Speaker 1: our technology to be put through in l a f 257 00:12:42,880 --> 00:12:45,760 Speaker 1: C and some of the other stadiums. So l a 258 00:12:45,800 --> 00:12:48,880 Speaker 1: f C is Los Angeles Football Club. Okay, that's soccer. 259 00:12:49,200 --> 00:12:51,600 Speaker 1: That is soccer. Just look at me. So if you 260 00:12:51,640 --> 00:12:53,880 Speaker 1: go to the game tonight, you'll be able to leverage 261 00:12:53,920 --> 00:12:57,959 Speaker 1: Apple business Chat to get a beer at a Express locations. 262 00:12:58,000 --> 00:12:59,959 Speaker 1: You can order your beer, pay for it through Apple 263 00:13:00,040 --> 00:13:03,679 Speaker 1: Pay on your Apple iPhone or or iPad, and then 264 00:13:03,720 --> 00:13:05,000 Speaker 1: go walk up and get it right away and go 265 00:13:05,040 --> 00:13:08,800 Speaker 1: back to your seat. So which industries have most effectively 266 00:13:08,920 --> 00:13:12,120 Speaker 1: used AI already? So m AI is heavy in retail, 267 00:13:12,440 --> 00:13:15,880 Speaker 1: it's now becoming much larger in sports and entertainment, tourism. 268 00:13:15,920 --> 00:13:18,480 Speaker 1: You'll start to see the transportation companies pick up on it. 269 00:13:19,040 --> 00:13:22,720 Speaker 1: Pharma obviously is another good opportunity to health the health area, 270 00:13:23,120 --> 00:13:25,120 Speaker 1: and I think just the whole food and beverage industry. Like, 271 00:13:25,160 --> 00:13:27,920 Speaker 1: we're working with some large brands both on the beverage 272 00:13:27,920 --> 00:13:30,680 Speaker 1: side that are interested in how this data could change 273 00:13:30,679 --> 00:13:33,240 Speaker 1: the way they predict products. What are people looking for 274 00:13:33,480 --> 00:13:35,560 Speaker 1: versus what are people getting is a huge area AI 275 00:13:35,640 --> 00:13:37,160 Speaker 1: can step in well. And I think that this is 276 00:13:37,200 --> 00:13:39,880 Speaker 1: actually super important because people think about it from a 277 00:13:39,920 --> 00:13:42,560 Speaker 1: messaging standpoint and from you calling someone up and not 278 00:13:42,640 --> 00:13:44,560 Speaker 1: knowing whether you're dealing with a human or a robot. 279 00:13:45,000 --> 00:13:48,120 Speaker 1: But what I when I've talked to CFOs in particular before, 280 00:13:48,160 --> 00:13:51,720 Speaker 1: what they say is we want to understand what to 281 00:13:51,880 --> 00:13:56,719 Speaker 1: create next and basically how to telegraph demands sort of 282 00:13:56,760 --> 00:14:00,840 Speaker 1: the way Netflix does right with shows. It's fascinating to people. Yeah, which, 283 00:14:01,000 --> 00:14:02,960 Speaker 1: so what are the some of the other applications here, 284 00:14:03,000 --> 00:14:05,360 Speaker 1: So I kind of get the stadium thing. What are 285 00:14:05,400 --> 00:14:08,080 Speaker 1: some of the retail applications of this. So retail is 286 00:14:08,120 --> 00:14:11,079 Speaker 1: simple as navigating a store, like you walk into a store, 287 00:14:11,160 --> 00:14:12,920 Speaker 1: and if you do talk to a person and get 288 00:14:12,960 --> 00:14:15,760 Speaker 1: guided to a location or a product, the store brand 289 00:14:15,800 --> 00:14:18,280 Speaker 1: never knows you wanted that product. So this fulfills a 290 00:14:18,280 --> 00:14:20,240 Speaker 1: demand curve, which is like what you just said is 291 00:14:20,280 --> 00:14:22,440 Speaker 1: if you could provide a digital messaging way to get 292 00:14:22,520 --> 00:14:25,720 Speaker 1: what people want instead of talking necessarily to a person 293 00:14:25,760 --> 00:14:28,360 Speaker 1: and looking for the staff, you now know what people 294 00:14:28,360 --> 00:14:30,120 Speaker 1: are looking for and how you can better stock and 295 00:14:30,160 --> 00:14:34,600 Speaker 1: provide product. I I love what this tells us about humans. 296 00:14:34,640 --> 00:14:36,560 Speaker 1: What have you learned about humans as you try to 297 00:14:36,600 --> 00:14:39,440 Speaker 1: recreate and teach computers about them? You know, there's a 298 00:14:39,480 --> 00:14:42,560 Speaker 1: concept in search called the long tail. It means that 299 00:14:42,600 --> 00:14:45,880 Speaker 1: we all assume that sevent of things were common, but 300 00:14:46,000 --> 00:14:48,720 Speaker 1: once you try to conquer that last, all of our 301 00:14:48,760 --> 00:14:52,240 Speaker 1: interests do become quite unique and personalized. So I've learned 302 00:14:52,280 --> 00:14:55,040 Speaker 1: is that we think very broadly about customers. But this 303 00:14:55,120 --> 00:14:58,720 Speaker 1: personal personalization move will require AI to really get to 304 00:14:58,760 --> 00:15:00,960 Speaker 1: what your needs are and my needs are and sell 305 00:15:01,040 --> 00:15:03,760 Speaker 1: to me what I can consume. Who do you compete against? 306 00:15:04,400 --> 00:15:07,000 Speaker 1: I mean, there's other companies out in the market. I 307 00:15:07,080 --> 00:15:10,320 Speaker 1: won't give them any airtime, right because that's not something 308 00:15:10,360 --> 00:15:12,480 Speaker 1: that I would do. But there are companies trying to 309 00:15:12,560 --> 00:15:15,320 Speaker 1: solve the same problem. But we are very dominant in 310 00:15:15,360 --> 00:15:18,440 Speaker 1: our industry because of our investor group and the people 311 00:15:18,480 --> 00:15:21,560 Speaker 1: that we've worked with. Got it, Donnie White, thanks so 312 00:15:21,640 --> 00:15:23,800 Speaker 1: much for joining us Donnie as a CEO and founder 313 00:15:23,840 --> 00:15:26,960 Speaker 1: of Satisfy Labs based here in New York City. See 314 00:15:27,000 --> 00:15:30,080 Speaker 1: another example of some cool tech in New York City. 315 00:15:30,080 --> 00:15:32,120 Speaker 1: It's not all Silicon Valley. I look at that way 316 00:15:32,160 --> 00:15:37,440 Speaker 1: to plug, plug plug the house they're trying to sell exactly, 317 00:15:38,440 --> 00:15:41,000 Speaker 1: will say, I will say, I do find it really 318 00:15:41,040 --> 00:15:43,840 Speaker 1: interesting that we learn more about ourselves as we try 319 00:15:43,880 --> 00:15:48,040 Speaker 1: to teach computers about us sometimes than we would otherwise. 320 00:15:48,160 --> 00:15:50,800 Speaker 1: And uh and I kind of like that. I kind 321 00:15:50,840 --> 00:15:52,720 Speaker 1: of like the beer application, you know, because the worse 322 00:15:54,160 --> 00:15:56,080 Speaker 1: stadium you go into a baseball game, as you get 323 00:15:56,120 --> 00:15:57,760 Speaker 1: there and there's a line of thirty people and you 324 00:15:57,840 --> 00:15:59,440 Speaker 1: miss an inning and a half and it's just not 325 00:15:59,560 --> 00:16:02,160 Speaker 1: worth It's I mean, bacon on a stick, bacon all 326 00:16:02,200 --> 00:16:04,880 Speaker 1: of one to know all this time, Bacon on a stick. 327 00:16:07,840 --> 00:16:11,240 Speaker 1: This is Bloomberg Markets with Lisa Brahmo Eds and Paul 328 00:16:11,320 --> 00:16:15,360 Speaker 1: Sweeney on Bloomberg Radio. Bloomberg Markets is brought to you 329 00:16:15,400 --> 00:16:19,560 Speaker 1: by Commonwealth Financial Network, home to the industry's most satisfied advisers. 330 00:16:19,920 --> 00:16:22,720 Speaker 1: Learn more about the firm that's been putting independent advisors 331 00:16:22,720 --> 00:16:27,520 Speaker 1: and their clients first since nineteen nine visit Commonwealth dot com. Well, 332 00:16:27,560 --> 00:16:30,760 Speaker 1: we have the SMP five so far this year. The 333 00:16:30,800 --> 00:16:34,720 Speaker 1: FED certainly remains dubbish. The economy is slowing, but as 334 00:16:34,720 --> 00:16:37,440 Speaker 1: we saw today, is still posting solid growth. So the 335 00:16:37,520 --> 00:16:39,800 Speaker 1: question is what's next. To help us answer that, we 336 00:16:39,800 --> 00:16:43,080 Speaker 1: welcome Scott Wren. Scott is a senior global equity strategist 337 00:16:43,080 --> 00:16:46,840 Speaker 1: for Wells Fargo Investment Management based in St. Louis. Scott, 338 00:16:46,880 --> 00:16:48,480 Speaker 1: thanks so much for joining us. Just want to start 339 00:16:48,480 --> 00:16:50,800 Speaker 1: our start off first by getting your sense of kind 340 00:16:50,800 --> 00:16:52,360 Speaker 1: of what you took away from the g d P 341 00:16:52,520 --> 00:16:55,240 Speaker 1: numbers this morning. Well and Paul, First, I want to 342 00:16:55,240 --> 00:16:57,160 Speaker 1: say before we get sorry, I want to pass along 343 00:16:57,200 --> 00:17:00,280 Speaker 1: my condolences to Tom Keene and his family on the 344 00:17:00,320 --> 00:17:03,760 Speaker 1: loss of his father. So always tough to lose a parent, 345 00:17:03,920 --> 00:17:06,679 Speaker 1: so I's wanted to say that. Um, but on the 346 00:17:06,760 --> 00:17:09,440 Speaker 1: GDP number this morning, you know a little bit better 347 00:17:09,480 --> 00:17:12,680 Speaker 1: than expected modest growth, and I think really for us 348 00:17:12,760 --> 00:17:15,840 Speaker 1: that's going to be the story for this year. I mean, 349 00:17:16,080 --> 00:17:18,000 Speaker 1: you know, we have an official number out there of 350 00:17:18,080 --> 00:17:20,399 Speaker 1: two point three percent. I think that's about right for 351 00:17:20,480 --> 00:17:24,359 Speaker 1: GDP for the year. So, uh, two point one, you know, 352 00:17:24,600 --> 00:17:27,600 Speaker 1: two point three anywhere in there. Uh not the end 353 00:17:27,600 --> 00:17:29,440 Speaker 1: of the world by any stretch. And I think that's 354 00:17:29,480 --> 00:17:34,040 Speaker 1: growth that that the stock market would would certainly find acceptable. 355 00:17:34,480 --> 00:17:37,800 Speaker 1: How long can the consumer continue to be strong if 356 00:17:37,920 --> 00:17:40,800 Speaker 1: business spending doesn't pick up speed here? Yeah, at least 357 00:17:40,840 --> 00:17:43,199 Speaker 1: I tell you that the consumption number inside of that 358 00:17:43,280 --> 00:17:46,520 Speaker 1: GDP number was pretty strong. But I think that uh, 359 00:17:46,560 --> 00:17:49,960 Speaker 1: you know, typically when you're when you're later in the cycle, 360 00:17:50,080 --> 00:17:52,960 Speaker 1: and and and you know, we're certainly in the last 361 00:17:53,000 --> 00:17:55,000 Speaker 1: third of this cycle, at least we believe we are. 362 00:17:55,280 --> 00:17:57,920 Speaker 1: You know, the baton would be hung would be handed 363 00:17:57,920 --> 00:18:01,280 Speaker 1: from the consumer to businesses who would and do capex spending, 364 00:18:01,320 --> 00:18:04,200 Speaker 1: and that obviously hasn't happened. But you know, we we 365 00:18:04,640 --> 00:18:07,040 Speaker 1: think that we are going to get some kind of 366 00:18:07,119 --> 00:18:10,639 Speaker 1: trade deal. We need some better business confidence that would 367 00:18:10,640 --> 00:18:14,600 Speaker 1: help UM in terms of capex is really capex spending 368 00:18:14,640 --> 00:18:17,879 Speaker 1: here in the States. UM is seeing some headwinds, but 369 00:18:17,920 --> 00:18:20,679 Speaker 1: also globally with a lot of these trade uncertainties. So 370 00:18:20,960 --> 00:18:23,479 Speaker 1: you know, for us, I think we can chug along 371 00:18:23,560 --> 00:18:26,720 Speaker 1: for at these modest rates of growth without a lot 372 00:18:26,760 --> 00:18:30,120 Speaker 1: of capex spending. But it would certainly improve and broaden 373 00:18:30,160 --> 00:18:33,080 Speaker 1: the economy if we could see uh, someone other than 374 00:18:33,119 --> 00:18:36,440 Speaker 1: the consumer carrying the ball down the field. So, Scott, 375 00:18:36,440 --> 00:18:40,360 Speaker 1: how do you think these GDP numbers will influence the 376 00:18:40,359 --> 00:18:43,960 Speaker 1: Fed as it meets next week? Well, you know, first 377 00:18:44,040 --> 00:18:46,120 Speaker 1: let me say that really in our opinion, we don't 378 00:18:46,160 --> 00:18:48,439 Speaker 1: think the Fed needs to do anything. I mean, you know, 379 00:18:48,480 --> 00:18:52,800 Speaker 1: we we we're a good level of unemployment obviously, of 380 00:18:52,880 --> 00:18:56,880 Speaker 1: inflation is modest although a little bit below the target. 381 00:18:57,359 --> 00:19:00,119 Speaker 1: But you know we're looking for a quarter point and 382 00:19:00,280 --> 00:19:03,640 Speaker 1: you know this this next week, you know, between some 383 00:19:03,680 --> 00:19:08,160 Speaker 1: potential positive or negative comments coming out of these trade 384 00:19:08,160 --> 00:19:12,680 Speaker 1: negotiations with with Minutian and Lightheiser in Shanghai and then 385 00:19:12,720 --> 00:19:16,600 Speaker 1: the Wednesday announcement from the Fed, where you know, you 386 00:19:16,600 --> 00:19:19,600 Speaker 1: could make a rational argument that they should do nothing, 387 00:19:19,920 --> 00:19:22,600 Speaker 1: uh the quarter point we're expecting, or you can make 388 00:19:23,119 --> 00:19:25,639 Speaker 1: an argument for the shot and awe of a fifty 389 00:19:25,640 --> 00:19:29,439 Speaker 1: basis point cut. So, um, the Fed's probably going to 390 00:19:29,600 --> 00:19:32,480 Speaker 1: kind of you know, keep you know, keep it right 391 00:19:32,480 --> 00:19:35,600 Speaker 1: down the middle to a basis point cut, talk a 392 00:19:35,680 --> 00:19:39,480 Speaker 1: little bit about inflation and a little bit about um 393 00:19:39,560 --> 00:19:43,600 Speaker 1: some risk to global growth. But you know, from our perspective, 394 00:19:44,240 --> 00:19:46,320 Speaker 1: you know, are are you really going to get much 395 00:19:46,320 --> 00:19:50,639 Speaker 1: bang for your buck? You do now? Maybe do in September. 396 00:19:51,000 --> 00:19:52,800 Speaker 1: You know, it seems like you're not going to get 397 00:19:52,880 --> 00:19:54,639 Speaker 1: much bang for your buck. And if that's what the 398 00:19:54,680 --> 00:19:59,120 Speaker 1: FED is trying to do with a rate cut, Umm, 399 00:19:59,160 --> 00:20:02,480 Speaker 1: not quite sure points is going to do it well. 400 00:20:02,600 --> 00:20:04,560 Speaker 1: Regardless of whether or not it will work, it does 401 00:20:04,600 --> 00:20:07,080 Speaker 1: seem like the markets are pricing in a basis point 402 00:20:07,119 --> 00:20:10,080 Speaker 1: right cut next week, in addition to possibly two more 403 00:20:10,280 --> 00:20:12,520 Speaker 1: later in the year. And I'm wondering what this means 404 00:20:13,040 --> 00:20:16,680 Speaker 1: for global equities, but particularly US equities. You have them 405 00:20:16,880 --> 00:20:20,239 Speaker 1: close to all time highs yet again today. Do you 406 00:20:20,280 --> 00:20:24,000 Speaker 1: think that this is supportive, especially with that strong consumer Well, 407 00:20:24,040 --> 00:20:26,520 Speaker 1: I do think it's supportive. And and you know, for 408 00:20:26,640 --> 00:20:30,320 Speaker 1: US stocks are not far from what we would consider 409 00:20:30,440 --> 00:20:32,200 Speaker 1: their their at are very close to what we would 410 00:20:32,200 --> 00:20:34,719 Speaker 1: consider fair value. You know, you look out over the 411 00:20:34,760 --> 00:20:38,520 Speaker 1: next twelve months, you know, maybe you can get you know, 412 00:20:38,640 --> 00:20:41,240 Speaker 1: six percent high or something like that. But I think 413 00:20:41,280 --> 00:20:45,080 Speaker 1: the most important thing, Lisa is that you have reassurance 414 00:20:45,119 --> 00:20:49,240 Speaker 1: from the FED that, should this global growth deteriorate, which 415 00:20:49,240 --> 00:20:51,119 Speaker 1: it seems like, you know, certainly the risk is to 416 00:20:51,160 --> 00:20:53,600 Speaker 1: the downside, that the FED is ready to step in. 417 00:20:53,680 --> 00:20:56,000 Speaker 1: I think that's what the market really wanted to hear. 418 00:20:56,600 --> 00:20:58,959 Speaker 1: Um Um. You know, we think there'll be two cuts 419 00:20:58,960 --> 00:21:03,760 Speaker 1: this year. He seems three seems excessive. But uh um, 420 00:21:03,800 --> 00:21:05,600 Speaker 1: I think it's safe to say that not only is 421 00:21:05,640 --> 00:21:11,119 Speaker 1: the US Federal Reserve, um uh, have the economy and 422 00:21:11,160 --> 00:21:14,360 Speaker 1: the markets back, so to speak. But you know, let's 423 00:21:14,359 --> 00:21:17,520 Speaker 1: face a little literally every major central bank on the 424 00:21:17,560 --> 00:21:20,760 Speaker 1: planet is either easing or trying to figure out how 425 00:21:20,800 --> 00:21:24,120 Speaker 1: to ease. I was a little surprised that the CB 426 00:21:24,280 --> 00:21:27,600 Speaker 1: didn't actually do something yesterday. I thought, you know, I mean, 427 00:21:27,640 --> 00:21:30,520 Speaker 1: it's like, come on, you know, Germany's p m I 428 00:21:30,600 --> 00:21:33,000 Speaker 1: s down at forty three and change, and you're talking 429 00:21:33,000 --> 00:21:36,359 Speaker 1: about doing something in September. You know, I just, uh, 430 00:21:36,960 --> 00:21:38,639 Speaker 1: I don't really get the e c B. I mean, 431 00:21:38,720 --> 00:21:41,439 Speaker 1: I think we need to need to act, but in 432 00:21:41,480 --> 00:21:44,119 Speaker 1: any case, these central banks are in an easing mode 433 00:21:44,160 --> 00:21:48,280 Speaker 1: that's going to be at least positive for the market 434 00:21:48,320 --> 00:21:51,280 Speaker 1: and not a negative. So Scott, given where we are 435 00:21:51,440 --> 00:21:54,040 Speaker 1: in this economic cycle ten plus years into it, what 436 00:21:54,200 --> 00:21:57,560 Speaker 1: sectors do you suggest investors take a look at you Well, 437 00:21:57,600 --> 00:21:59,800 Speaker 1: i'd tell you know, we've in in recent months, we've 438 00:21:59,840 --> 00:22:02,600 Speaker 1: taken a little bit of money off the table. We've 439 00:22:02,640 --> 00:22:05,600 Speaker 1: backed off of stocks in general. But what we're still 440 00:22:05,800 --> 00:22:08,720 Speaker 1: where we still have a good lean on is sectors 441 00:22:08,840 --> 00:22:12,159 Speaker 1: and we're we we think this expansion is going to continue. 442 00:22:12,600 --> 00:22:17,719 Speaker 1: We continue to like technology, consumer discretionary industrials. We do 443 00:22:17,800 --> 00:22:21,000 Speaker 1: like financials, which has been you know, certainly certainly dicey 444 00:22:21,520 --> 00:22:24,160 Speaker 1: on a year today basis, they've trailed not by a lot, 445 00:22:24,200 --> 00:22:27,240 Speaker 1: but by by a bit um. So we want to 446 00:22:27,240 --> 00:22:29,439 Speaker 1: be in those sectors that are going to benefit from 447 00:22:29,440 --> 00:22:33,199 Speaker 1: a continuation of this expansion. We think that's still the 448 00:22:33,200 --> 00:22:35,959 Speaker 1: way to go. We don't want our clients getting defensive 449 00:22:36,000 --> 00:22:40,119 Speaker 1: here and loading up on staples and utilities and and 450 00:22:40,119 --> 00:22:43,960 Speaker 1: and things like that. So that's the way we're leaning. Um. 451 00:22:44,000 --> 00:22:45,679 Speaker 1: I think that's where you're going to see the best 452 00:22:46,080 --> 00:22:49,640 Speaker 1: earnings earnings growth happen, not just in this reporting quarter 453 00:22:49,720 --> 00:22:51,680 Speaker 1: we're seeing, but as we look ahead over the next 454 00:22:51,840 --> 00:22:54,960 Speaker 1: twelve months or so. Just real quick, why should investors 455 00:22:54,960 --> 00:22:58,320 Speaker 1: just do sixty portfolio? Put it there, keep it there, 456 00:22:58,600 --> 00:23:01,040 Speaker 1: not think about it again. Well, you know, I tell 457 00:23:01,040 --> 00:23:03,040 Speaker 1: you one thing. Least, if you do that and you've 458 00:23:03,080 --> 00:23:06,760 Speaker 1: had this gigantic running here, at the very least you 459 00:23:06,800 --> 00:23:09,280 Speaker 1: need to look at doing some rebalancing to get back 460 00:23:09,320 --> 00:23:12,040 Speaker 1: to that. Because if you've had that split and you 461 00:23:12,200 --> 00:23:15,480 Speaker 1: started that seven years ago or something like that, you're 462 00:23:15,480 --> 00:23:17,199 Speaker 1: going to be way out of whack. And there's a 463 00:23:17,200 --> 00:23:19,560 Speaker 1: lot to be said. Most of our clients and most 464 00:23:19,600 --> 00:23:23,840 Speaker 1: retail investors, that's the foundation of your portio portfolio, whether 465 00:23:23,880 --> 00:23:26,520 Speaker 1: it's sixty or whatever it is. And then you've got 466 00:23:26,640 --> 00:23:29,040 Speaker 1: some portion of that portfolio you try to be a 467 00:23:29,080 --> 00:23:31,479 Speaker 1: little lighter on your feet on and be in the 468 00:23:31,560 --> 00:23:34,760 Speaker 1: right sectors and that in the right sectors out of 469 00:23:34,800 --> 00:23:38,280 Speaker 1: the sectors that are going to underperform. So um, the 470 00:23:38,320 --> 00:23:41,040 Speaker 1: foundation your portfolio should be in it for the long haul. 471 00:23:41,200 --> 00:23:43,359 Speaker 1: You can trim it and work around the edges, but 472 00:23:43,760 --> 00:23:45,800 Speaker 1: you know, mostly the stock market you need to have 473 00:23:45,840 --> 00:23:49,440 Speaker 1: the bulk of your assets dedicated. Scott Wren, thank you 474 00:23:49,480 --> 00:23:51,600 Speaker 1: so much for being with us. Scott Wren, Senior Global 475 00:23:51,600 --> 00:23:55,080 Speaker 1: Equity strategist at Wells Fargo Investment Institute, which overseas nearly 476 00:23:55,119 --> 00:23:58,399 Speaker 1: two trillion dollars. Interesting to think about that, Paul, And 477 00:23:58,440 --> 00:24:00,959 Speaker 1: it's actually a really important point, which is that stocks 478 00:24:00,960 --> 00:24:04,719 Speaker 1: have outperformed so dramatically that you have to then reallocate 479 00:24:04,760 --> 00:24:07,280 Speaker 1: some of that back to bonds or reallocate some of 480 00:24:07,320 --> 00:24:10,120 Speaker 1: the money that you've gotten cast off from dividends UH 481 00:24:10,359 --> 00:24:12,960 Speaker 1: into stocks. So where are you going to go? But 482 00:24:13,080 --> 00:24:15,600 Speaker 1: right now it looks like it's pretty good backdrop with 483 00:24:15,640 --> 00:24:18,440 Speaker 1: central banks saying we got your back, and the consumer 484 00:24:18,720 --> 00:24:22,919 Speaker 1: still going strong. This is Bloomberg. So we got that 485 00:24:23,000 --> 00:24:26,439 Speaker 1: second quarter GDP print this morning. It was better than 486 00:24:26,440 --> 00:24:31,080 Speaker 1: people expected, still still signified a slowdown in the US economy. 487 00:24:31,480 --> 00:24:33,760 Speaker 1: The key question, though, for many people is what will 488 00:24:33,800 --> 00:24:36,080 Speaker 1: this mean for the Federal Reserve? Is this a good 489 00:24:36,119 --> 00:24:39,440 Speaker 1: sign or a bad sign for the US economy? Here 490 00:24:39,480 --> 00:24:41,600 Speaker 1: to tell us the answer to that, Carbor Kadona, chief 491 00:24:41,680 --> 00:24:45,040 Speaker 1: US economist for Bloomberg Economics. Here in our eleven three 492 00:24:45,040 --> 00:24:48,240 Speaker 1: oh studios, Carl, there was good news and there was 493 00:24:48,280 --> 00:24:50,240 Speaker 1: bad news. The good news was the consumer. The bad 494 00:24:50,280 --> 00:24:53,280 Speaker 1: news was business expenditures. UH and a number of other 495 00:24:53,880 --> 00:24:58,040 Speaker 1: data points what's your main takeaway from this report? Well, 496 00:24:58,040 --> 00:25:00,840 Speaker 1: I'm gonna stick with the theme of the O or here, 497 00:25:00,920 --> 00:25:04,720 Speaker 1: which seems to be caffeine and coffee. So, uh right, 498 00:25:04,800 --> 00:25:08,040 Speaker 1: let's just talk about coffee the segue there, no, no, no no, 499 00:25:08,240 --> 00:25:11,400 Speaker 1: not novel kind of coffee. I like free coffee. But 500 00:25:11,800 --> 00:25:15,720 Speaker 1: the theme here is that the caffe nation of consumers 501 00:25:15,760 --> 00:25:19,760 Speaker 1: and consumers spending really drove the show in Q two, 502 00:25:19,800 --> 00:25:22,479 Speaker 1: and this is really providing a template for what growth 503 00:25:22,560 --> 00:25:24,720 Speaker 1: is going to look like over the next several quarters. 504 00:25:24,720 --> 00:25:26,359 Speaker 1: So you want to see the Q three and the 505 00:25:26,440 --> 00:25:29,600 Speaker 1: Q four GDP reports in advance. Just take a look 506 00:25:29,640 --> 00:25:32,600 Speaker 1: at what you saw today in the Q two numbers. 507 00:25:32,840 --> 00:25:37,439 Speaker 1: Business investment has been rattled by slowing global growth, trade 508 00:25:37,440 --> 00:25:41,520 Speaker 1: tensions with China in particular. These things are not going 509 00:25:41,520 --> 00:25:45,560 Speaker 1: away anytime soon. Nor is the low level of the 510 00:25:45,640 --> 00:25:49,720 Speaker 1: unemployment rate and the tailwind that that's providing to household 511 00:25:49,760 --> 00:25:53,359 Speaker 1: income generation. Uh. And so consumer spending is going to 512 00:25:53,560 --> 00:25:56,399 Speaker 1: what not go away anytime soon? Not either. And so 513 00:25:56,560 --> 00:26:00,720 Speaker 1: really this modestly above trend pace of we're all economic 514 00:26:00,760 --> 00:26:04,000 Speaker 1: growth driven by consumers, uh, is you know, the the 515 00:26:04,080 --> 00:26:07,440 Speaker 1: new normal for the economy for the foreseeable future. So, Carl, 516 00:26:07,480 --> 00:26:10,600 Speaker 1: you mentioned trade as being an impact. We have some 517 00:26:10,800 --> 00:26:14,720 Speaker 1: tweets from Larry Cudlow the National Economic Council UH today 518 00:26:14,840 --> 00:26:17,280 Speaker 1: just coming across saying the U. S And China not 519 00:26:17,440 --> 00:26:20,760 Speaker 1: expected to reach a grand deal next week. That's according 520 00:26:20,800 --> 00:26:24,560 Speaker 1: to Mr Cudlow. How important is getting something done on 521 00:26:24,760 --> 00:26:28,560 Speaker 1: trade or not to these GDP numbers that we're seeing. Well, 522 00:26:28,600 --> 00:26:31,919 Speaker 1: absolutely we see a significant distortion. We saw it in 523 00:26:32,080 --> 00:26:34,440 Speaker 1: UH in the back half of last year. We saw 524 00:26:34,440 --> 00:26:37,359 Speaker 1: it in the Q one number. So when the trade 525 00:26:37,400 --> 00:26:41,840 Speaker 1: gap narrowed dramatically in inventory levels increased, all of that 526 00:26:41,960 --> 00:26:45,920 Speaker 1: was due to trade saber rattling because producers are trying 527 00:26:45,960 --> 00:26:49,840 Speaker 1: to pad their supply chains and rush materials in before 528 00:26:49,880 --> 00:26:52,840 Speaker 1: tariffs go into effect. And UH they're afraid to make 529 00:26:52,880 --> 00:26:56,520 Speaker 1: capital outlays as they don't know what the next twists 530 00:26:56,520 --> 00:26:59,560 Speaker 1: and turns in the trade war will actually be. So 531 00:26:59,680 --> 00:27:03,120 Speaker 1: we're certainly see an impact in the economic data, especially 532 00:27:03,160 --> 00:27:06,960 Speaker 1: business investment UH. And will that go away anytime soon? 533 00:27:07,560 --> 00:27:09,720 Speaker 1: I'm very much in the cut Low camp here that 534 00:27:09,800 --> 00:27:13,800 Speaker 1: I don't see any grand compromise coming down the pike, 535 00:27:14,400 --> 00:27:18,840 Speaker 1: probably not until at least after the election. So we 536 00:27:18,880 --> 00:27:23,199 Speaker 1: may see a little deals on Huawei or soybean or 537 00:27:23,520 --> 00:27:27,159 Speaker 1: agricultural purchases and whatnot. We're not going to see a 538 00:27:27,320 --> 00:27:31,199 Speaker 1: grand compromise because that's I think an important pillar of 539 00:27:31,280 --> 00:27:35,720 Speaker 1: President Trump's reelection campaign. So the big question w W 540 00:27:37,040 --> 00:27:40,520 Speaker 1: T F D what would the FED do? Right? I mean, 541 00:27:40,600 --> 00:27:48,320 Speaker 1: the question is here. I'm I'm trying to figure out, 542 00:27:48,560 --> 00:27:51,440 Speaker 1: you know, what does this all mean for the expected 543 00:27:51,480 --> 00:27:53,639 Speaker 1: three rate cuts that are gonna get this year. Well, 544 00:27:53,680 --> 00:27:58,800 Speaker 1: this means that next week's basis point cut is largely 545 00:27:58,800 --> 00:28:02,720 Speaker 1: appropriate for the Fed. I think that they'll follow through 546 00:28:02,760 --> 00:28:07,520 Speaker 1: with another rape cut, probably at the December meeting, maybe October. 547 00:28:07,960 --> 00:28:09,560 Speaker 1: I don't think the FED wants to go back to 548 00:28:09,600 --> 00:28:13,840 Speaker 1: back with basis points July basis points in September. Then 549 00:28:13,880 --> 00:28:17,520 Speaker 1: you start to create a feeding frenzy in the marketplace, 550 00:28:17,520 --> 00:28:19,600 Speaker 1: where the market is going to then drag the FED 551 00:28:19,640 --> 00:28:23,159 Speaker 1: into a more pronounced easing cycle than the FED really 552 00:28:23,160 --> 00:28:25,439 Speaker 1: wants to invasion. But but here's my question. I mean, 553 00:28:25,480 --> 00:28:28,200 Speaker 1: does this GDP report move the needle in any way, 554 00:28:28,200 --> 00:28:32,600 Speaker 1: shape or form. Even though it gives a FED confidence 555 00:28:32,640 --> 00:28:36,480 Speaker 1: that consumers are looking good, it also reinforces their concerns 556 00:28:36,560 --> 00:28:39,720 Speaker 1: about a weak business investment climate, which is which is 557 00:28:39,760 --> 00:28:41,920 Speaker 1: almost I mean, I don't want to say entirely due 558 00:28:41,960 --> 00:28:45,239 Speaker 1: to trade, but significantly due to trade. It's trade, it's 559 00:28:45,280 --> 00:28:48,000 Speaker 1: slowing global growth, and it's a strong dollar, which is 560 00:28:48,120 --> 00:28:50,080 Speaker 1: part of the reason why the FED needs to ease. 561 00:28:50,200 --> 00:28:53,320 Speaker 1: If central banks around the global are easing, which we 562 00:28:53,400 --> 00:28:56,040 Speaker 1: saw hints it that is coming soon from the e 563 00:28:56,160 --> 00:28:59,840 Speaker 1: c B, We've already seen it from Australia, New Zealand, 564 00:29:00,040 --> 00:29:04,200 Speaker 1: South Africa, a slew of emerging market central banks, Turkey 565 00:29:03,920 --> 00:29:06,640 Speaker 1: the earlier this week. If everyone else is easy and 566 00:29:06,680 --> 00:29:09,200 Speaker 1: the FED is not, you're going to have a very 567 00:29:09,200 --> 00:29:13,600 Speaker 1: strong trade weighted dollar, which is a de facto tightening 568 00:29:13,640 --> 00:29:16,000 Speaker 1: of monetary conditions in the US economy. So the FED 569 00:29:16,120 --> 00:29:18,360 Speaker 1: needs to do a little bit of easy just to 570 00:29:18,400 --> 00:29:22,480 Speaker 1: avoid the dollar blowing through the roof and really toppling 571 00:29:22,800 --> 00:29:25,800 Speaker 1: both the export sector and a lot of domestic industry 572 00:29:26,040 --> 00:29:29,120 Speaker 1: which is sensitive to currency strengths as well. Carra Kadonna, 573 00:29:29,200 --> 00:29:31,480 Speaker 1: thank you so much for the perspective. Carra Kadona, chief 574 00:29:31,560 --> 00:29:36,400 Speaker 1: US economist for Bloomberg Economics, UH talking about that GDP report, 575 00:29:36,520 --> 00:29:39,800 Speaker 1: US growth slowing to two point one percent, still ahead 576 00:29:39,800 --> 00:29:43,680 Speaker 1: of the expected one point eight percent in the quarter 577 00:29:43,840 --> 00:29:46,360 Speaker 1: in a year in annual terms. We do want to 578 00:29:46,360 --> 00:29:49,720 Speaker 1: just bring you those headlines that we had earlier about 579 00:29:49,920 --> 00:29:53,000 Speaker 1: US China not expected to reach some sort of grand 580 00:29:53,000 --> 00:29:55,560 Speaker 1: deal nets the week. This according to Larry Cutlow speaking 581 00:29:55,560 --> 00:29:58,320 Speaker 1: on CNBC. He also said that the White House has 582 00:29:58,440 --> 00:30:03,160 Speaker 1: ruled out any current the intervention, shooting down some speculation 583 00:30:03,520 --> 00:30:07,280 Speaker 1: that President Trump may intervene to weaken the dollar further. 584 00:30:07,800 --> 00:30:13,360 Speaker 1: This is Bloomberg. Thanks for listening to the Bloomberg P 585 00:30:13,480 --> 00:30:16,480 Speaker 1: and L podcast. You can subscribe and listen to interviews 586 00:30:16,480 --> 00:30:20,560 Speaker 1: at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. 587 00:30:20,960 --> 00:30:24,520 Speaker 1: I'm pim Fox. I'm on Twitter at pim Fox. I'm 588 00:30:24,560 --> 00:30:27,840 Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast. 589 00:30:27,880 --> 00:30:30,480 Speaker 1: You can always catch us worldwide on Bloomberg Radio.