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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller.

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Speaker 2: Every business day we bring you interviews from CEOs, market pros,

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Speaker 2: and Bloomberg experts, along with essential market moven news.

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Speaker 1: Find the Bloomberg Markets podcast called Apple Podcasts or wherever

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Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.

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Speaker 1: Pretty group to Paul Sweeney here in the Bloomberg Interactive

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Speaker 1: Brooker's Studio, Gretty just feels like with the debt ceiling

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Speaker 1: issue essentially put to bed, we still got a couple

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Speaker 1: more moves to go. Seems like focus is back on

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Speaker 1: some of the macroeconomic issues out there and some of

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Speaker 1: the economic data points, starting with nonfarm payrolls tomorrow.

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Speaker 3: Yeah, payrolls, and you got the labor numbers in terms

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Speaker 3: of kind of wages. Then you have the Chinese growth

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Speaker 3: numbers that are weighing on the markets a lot. Not

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Speaker 3: to mention an additional FED hike.

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Speaker 4: Where did that.

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Speaker 3: Relief rally go that we were supposed to get? That

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Speaker 3: seems to be exactly how this is playing out.

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Speaker 1: All right, Let's check in with someone who kind of

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Speaker 1: follows this stuff as well. Doctor Lori to Murray, President

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Speaker 1: of the Committee on Economic Development from the Conference Board. Laurie,

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Speaker 1: thanks so much for joining us here. What are you

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Speaker 1: focusing on here, because a lot of folks are really

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Speaker 1: trying to put all the crosswinds together and get a

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Speaker 1: sense of maybe where this fet is going, where this

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Speaker 1: economy is going. What are the data points that you're

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Speaker 1: looking at?

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Speaker 4: Okay, well, the first and foremost, Paul, the most important

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Speaker 4: data point is the one we just crossed last night,

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Speaker 4: which was the House passage of this bill. So it's

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Speaker 4: important to recognize that that we have just avoided a

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Speaker 4: major economic catastrophe. So data point one, we avoided an

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Speaker 4: economic catastrophe. So we can go back and reset and

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Speaker 4: look at the economy. And we're still expecting at the

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Speaker 4: Conference Board a short, short and shallow recession that will

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Speaker 4: likely end by the end of the year. But there's

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Speaker 4: a luxury to be able to say that, because again,

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Speaker 4: as they said, last night's vote was really significant and

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Speaker 4: historic for the economy this year and going forward.

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Speaker 3: So doctor, just to build on that the nitty gritty

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Speaker 3: of this bill, as we talked about fiscal spending caps

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Speaker 3: for the next two years, I think so January first,

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Speaker 3: twenty twenty five, which, by the way, Paul, the new president,

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Speaker 3: is going to have a real, really horrible first day

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Speaker 3: in the office or first day of the year. I

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Speaker 3: have to say, but doctor, talk to us about kind

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Speaker 3: of the nitty gritty of the bill in the context

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Speaker 3: of staring down a recession in terms of the budget.

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Speaker 4: Did we do good here? Oh, it is definitely a victory.

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Speaker 4: It is a victory for America, and it's a victory

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Speaker 4: consequently for the world, given the role that the American

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Speaker 4: economy plays in the world. The accomplishments are we have

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Speaker 4: held spending at the twenty twenty three levels. We're looking

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Speaker 4: at the next two years of only one percent increase.

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Speaker 4: The CBO the Congressional Budget Office says over ten years

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Speaker 4: will actually saved one point five trillion dollars. This is

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Speaker 4: really significant progress, but I want to underscore that it's

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Speaker 4: really only affecting fifteen percent of the budget. We're at

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Speaker 4: thirty one point four trillion dollars in debt and going up.

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Speaker 4: It suspends the debt limit for those two years, doesn't

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Speaker 4: set another cap, and fortunately it also puts a cap

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Speaker 4: on spending for the next two years. But what we

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Speaker 4: have to look at is that this is only on

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Speaker 4: the non discretionary, on the discretionary non defense spending, so

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Speaker 4: that's fifteen percent of the budget. We have a lot

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Speaker 4: more to do here. Congress and the administration have a

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Speaker 4: lot of work ahead of them if we're going to

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Speaker 4: move towards fiscal health. But this is a very very

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Speaker 4: important first step.

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Speaker 1: So, I mean, it all kind of ties in, you know,

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Speaker 1: to the national debt here and that larger discussion here.

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Speaker 1: What's your view of that and maybe how should our

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Speaker 1: government view this our growing national debt, you know, to

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Speaker 1: what degree does it really need to be addressed aggressively?

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Speaker 4: So the bottom line here is debt really matters, and

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Speaker 4: it's become an even more important issue with inflation because

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Speaker 4: as we are dealing with inflation, and the Conference Board

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Speaker 4: doesn't expect inflation to go away anytime soon. In terms

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Speaker 4: of these rates that we have now, we're hoping to

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Speaker 4: see them hold and possibly come down, but inflation is

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Speaker 4: not going to go away right now. In terms of

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Speaker 4: the budget, the servicing the debt now is costing as

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Speaker 4: much as defense, which is about eight hundred plus billion dollars.

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Speaker 4: That's just debt servicing so that's having a major impact

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Speaker 4: on how we are spending or can spend their national

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Speaker 4: dollars to meet both their defense and non defense NEETs

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Speaker 4: as a nation. So that in and of itself makes

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Speaker 4: it absolutely extremely important that we deal with this overwhelming

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Speaker 4: explosion of debt in terms of particularly the debt ratio

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Speaker 4: to GDP, which is now our debt ratio is equal

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Speaker 4: to GDP instead one hundred percent.

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Speaker 3: In terms of kind of the work requirements with some

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Speaker 3: of those social programs, Medicaid, Medicare, et cetera, any read

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Speaker 3: through on kind of fiscal spending from that perspective, we

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Speaker 3: know that was one of the sticking points in the deal.

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Speaker 4: So I just want to want to point out that

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Speaker 4: Medicare and Medicaid were not included in the work requirements.

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Speaker 4: Work requirements are really the Food program and the Temporary

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Speaker 4: Assistance for Needy Families program. And while the requirements have expanded,

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Speaker 4: particularly in terms of the age that has covered, the

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Speaker 4: age has been raised to fifty five years old for

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Speaker 4: the SNAP program, there have been exemptions, and so it's

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Speaker 4: going to take veterans homeless have been exempted from these

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Speaker 4: work requirements. So it's going to take a little bit

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Speaker 4: of budget maneuvering and analysis to figure route whether it's

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Speaker 4: a save or it's actually going to cost more. Right

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Speaker 4: now quick analysis, most analysts are seeing it as a wash.

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Speaker 1: We're speaking with doctor Lorii Esposito Murray, President the Committee

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Speaker 1: for Economic Development for the Conference Board. So doctor Murray,

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Speaker 1: I mean, I guess the political reality is this debt

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Speaker 1: ceiling limit in some of the spending issues, the budget

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Speaker 1: kind of kicked down the road, kicked the can down

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Speaker 1: the road for a couple of years. But I guess

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Speaker 1: from markets perspective, that's probably the best we could have

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Speaker 1: hoped for.

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Speaker 4: You know, it is the best we could have hoped for.

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Speaker 4: But it also is a pretty good start. Is it

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Speaker 4: is a bipartisan vote three fourteen to one seventeen. You

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Speaker 4: had one hundred and forty nine Republicans in the House

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Speaker 4: voting for this bill. It's an incredible accomplishment for Speaker McCarthy,

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Speaker 4: who just a couple of months ago we saw go

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Speaker 4: through a fifteen vote series before it could become speaker.

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Speaker 4: He's really destrating leadership in the House and also demonstrating

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Speaker 4: with his Republican colleagues that Republicans can actually govern, which

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Speaker 4: I think is really significant in terms of the Republican Party,

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Speaker 4: in terms of the Speaker's leadership.

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Speaker 3: So doctor, let's step away from from the debt story

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Speaker 3: for a moment to talk about these recessionary calls. The

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Speaker 3: consensus seems to be that by the end of this

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Speaker 3: year we will have a recession on our hands in

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Speaker 3: the US shallow deep consensus of shallow right now, what

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Speaker 3: would change that point of view?

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Speaker 4: Well, according to the conference board where we're looking at

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Speaker 4: it is that it will be short in a shallow

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Speaker 4: recession by the end of the year, likely by the

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Speaker 4: end of the year. The main drivers of the recession

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Speaker 4: or inflation and high interest rates. So dealing with inflation

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Speaker 4: is absolutely critical in terms of tempering that recession and

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Speaker 4: coming out of it.

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Speaker 1: On to that end, I mean, I guess a reasonable

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Speaker 1: call could be made that, you know, with the variable

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Speaker 1: lag long and variable lag, that the Fed should in

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Speaker 1: fact pause here for a while. That five hundred and

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Speaker 1: twenty five basis points is enough to kind of cool inflation.

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Speaker 1: Are you in that camp that they should pause and

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Speaker 1: see how things shake out? O.

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Speaker 4: Well, we're expecting them to pause in terms of the

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Speaker 4: hike in either probably in June, but then expecting one

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Speaker 4: or more twenty five basis point hikes later on the summer.

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Speaker 3: Should we be get all worried about treasury issuance now

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Speaker 3: that seem to be one of the concerns in the

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Speaker 3: lead up to as this deal was getting figured out.

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Speaker 3: How do we view the treasury?

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Speaker 4: So, you know, one of event is really important here

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Speaker 4: in terms of this agreement and the whole death ceiling

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Speaker 4: debate in general, is you know, given the significant and

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Speaker 4: dominant role that the US economy plays in the global economy,

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Speaker 4: and the importance of treasury securities being a safe haven

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Speaker 4: which also underpins our economy. You know, again coming back

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Speaker 4: to this deal, coming back to the fact that it

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Speaker 4: looks like that if this this is going to get

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Speaker 4: through the Senate and on the President's desk in time

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Speaker 4: for the X date of June fifth, it's it's so

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Speaker 4: important in terms of our credibility and Treasury's credibility globally

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Speaker 4: that we maintain that role and Treasury securities maintained that

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Speaker 4: role in the global economy.

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Speaker 1: All right, Our thanks to doctor Lori Esposito Murray, President

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Speaker 1: Committee for Economic Development for the Conference Board talking about

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Speaker 1: getting this debt deal done and getting it, as doctor

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Speaker 1: Esposita Murray said, getting it through the Senate presumably in

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Speaker 1: the next day or two, and then on the President's

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Speaker 1: desk and you know by Saturday, right, yeah, I mean

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Speaker 1: it's you know, it's cutting it close here. But again

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Speaker 1: that's where it seems to be now, and the expectation

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Speaker 1: is it should get through the Senate fairly quickly without

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Speaker 1: much drama, and then of course the President has indicated

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Speaker 1: that he will sign it. So that's kind of kind

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Speaker 1: of where we are. And again up to that June

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Speaker 1: fifth or sixth, kind of New X date, if you will,

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Speaker 1: then when the US will run out of money presumably,

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Speaker 1: so good news there.

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Speaker 5: You're listening to the Team Ken's Are Live program Bloomberg

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Speaker 5: Markets weekdays at ten am Eastern on Bloomberg dot Com,

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Speaker 5: the iHeartRadio app and the Bloomberg Business App, or listen

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Speaker 5: on demand wherever you get your podcasts.

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Speaker 1: It seems like since China's reopened, Curtty, a lot of

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Speaker 1: US CEO's have been making a way to China to

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Speaker 1: kind of check in on things. Tim Cook from Apple

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Speaker 1: and just this week you had Jamie Diamond, JP Morgan

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Speaker 1: Chase elon Musk was there trying to get a sense

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Speaker 1: of where that economy is, where that market is in

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Speaker 1: terms of opportunity. So we want to get some insight.

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Speaker 1: We go to Brendan Ahearn, CIO of Crane Shares, does

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Speaker 1: a lot of work in China with the markets there. Brenda,

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Speaker 1: this accelerated China reopening is I don't know it. It's good.

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Speaker 1: It's We've got a lot of CEOs making their way

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Speaker 1: back over to China to kind of reignite some discussions here.

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Speaker 1: How do you view China right now as a economic

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Speaker 1: player and as a potential partner trading partner with the US.

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Speaker 6: Yeah, yeah, I'm point out of NA Video's Jensen Huang

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Speaker 6: mentioned that he'll be visiting China next month. We don't

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Speaker 6: have the exact dates, but joined Jamie Diamond, Elon Musk,

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Speaker 6: Franklin Templeton, a whole host of executives. But yeah, I

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Speaker 6: think we're you're seeing a reopening economy that is growing

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Speaker 6: incrementally incrementally slowly. Some of the historical drivers of China's economy,

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Speaker 6: export driven manufacturing, has been barely lacklustered due to the

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Speaker 6: global economy slowing. You also have their property market has

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Speaker 6: been very lackluster that historically see a lot of infrastructure stimulus,

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Speaker 6: are not seeing it, which really leads the domestic consumption story,

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Speaker 6: which really requires consumer confidence to build. And we are

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Speaker 6: seeing those green shoots. It just it's happening slower, and

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Speaker 6: investors want to see policy makers step on that stimulus

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Speaker 6: gas pedal.

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Speaker 3: Well, Brendan, speaking of that stimulus gas pedal, where does

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Speaker 3: the PBOC stand in all this? I feel like one

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Speaker 3: of the highlights of the last couple of years has

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Speaker 3: been this divergence between most of the world's central banks

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Speaker 3: and then the PBOC going in the opposite direction. Do

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Speaker 3: we see some sort of whatever the opposite of a divergences, convergence, convergence.

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Speaker 6: Do we see a convergence? You know, you know unlikely

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Speaker 6: that that China's your central banks, your great great observation,

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Speaker 6: just you know, you see central banks globally following the

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Speaker 6: FED higher the pbocs going the opposite direction, you know,

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Speaker 6: and that's led you know c n H right now,

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Speaker 6: China's offshore Ambia seven eleven so off versus the dollar,

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Speaker 6: and and I think that's where you see them incrementally easing.

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Speaker 6: You know, we're very likely we'll see a bank reserve

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Speaker 6: requirement ratio cut, potentially the loan prime rate or the

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Speaker 6: intra bank lending rate cut next month. It's just more

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Speaker 6: of you know, investors are kind of in a you know,

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Speaker 6: show me now, you know, you know, I kind of

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Speaker 6: called it the where's the beef? You know, you know,

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Speaker 6: they're getting anxious, and capital is flowing within Asia, within

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Speaker 6: em in the short run to areas like Japan to India,

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Speaker 6: just because they're you know, gotten very impatient on policy

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Speaker 6: support from the PBOC and the central government.

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Speaker 1: So Brendan on the consumer side of the economy, talk

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Speaker 1: to us about the unemployment in China, particularly team unemployment.

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Speaker 1: We know that we've heard that continues to be stubbornly high.

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Speaker 1: And what does that tell you?

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Speaker 6: Yeah, you know, if you think about young, younger people,

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Speaker 6: you know, I have to describe it that way as

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Speaker 6: as as I get older, but recent college graduates, you

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Speaker 6: know a lot of these folks end up working in

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Speaker 6: the service sector that you know, could be hotels, could

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Speaker 6: be restaurants, airlines, and you know, et cetera. So so

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Speaker 6: you know, you had with the removal of zero COVID

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Speaker 6: COVID run rampant in China in the latter part of

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Speaker 6: Q four of last year the beginning of Q one

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Speaker 6: of this year, so that that really weighed on a

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Speaker 6: lot of this service sector jobs. And as domestic travel

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Speaker 6: has picked up, you're seeing you know, you had Air China.

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Speaker 6: You know they're hiring one thousand new flight attendants. You know,

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Speaker 6: as people start traveling more domestically, your hotels going to

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Speaker 6: need more people. So so that the US unemployment I

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Speaker 6: think will slowly come down. It's just it's it's just

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Speaker 6: in the short run it is quite high because of

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Speaker 6: the knock on effect of COVID running rampant, the effect

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Speaker 6: on the consumer.

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Speaker 1: Brandy. We started this discussion noting how so many high

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Speaker 1: profile US CEO's ranking the way to China over the

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Speaker 1: last several weeks. Reality is China investible? I mean what

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Speaker 1: I if I can I go to my board and

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Speaker 1: say we need to build a plant in China or

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Speaker 1: make big investments, multi year investments in China. I just

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Speaker 1: don't know what the government is going to do.

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Speaker 6: Well is that the US government or the Chinese government.

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Speaker 6: I think that's that's probably little boat a little bit

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Speaker 6: of both. And and I think I think, you know, uh,

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Speaker 6: these flurry of executives and and and and you've seen

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Speaker 6: it from European executives as well. You know, a whole

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Speaker 6: host of Europeans actually been in China year to date.

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Speaker 6: You know, business people are getting on airplanes and meeting,

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Speaker 6: having meals with one another. The politicians aren't. And I

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Speaker 6: think you know, during COVID, you know, you had COVID babies,

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Speaker 6: but you also had COVID divorces. And the US China

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Speaker 6: political relationship has very much frayed due to a lack

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Speaker 6: of travel diplomatically if you think about. You know, China's

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Speaker 6: Commerce secretary just met with Gina Romando and US Trade

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Speaker 6: rep side just last week. He's the first senior Chinese

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Speaker 6: official to visit the United States in four years. At

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Speaker 6: the same time, no senior US official has been in

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Speaker 6: China in four years. So I think hopefully the politicians

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Speaker 6: can take a lead from what we're seeing from the

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Speaker 6: corporate world, which is these two economies are very very

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Speaker 6: entwined with one another.

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Speaker 3: Well, Brendan and our in our last minute or so here,

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Speaker 3: let's take step back. We have a listener question asking

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Speaker 3: about when the market views views a pause or potentially

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Speaker 3: a cut state side in the US as a negative.

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Speaker 3: Given you your financial expertise, talk to us about your

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Speaker 3: view on that.

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Speaker 6: For US, I mean, I think the you know, the

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Speaker 6: the viewing increasingly as you do you have this June

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Speaker 6: hike or not or certainly July. You know, I you know,

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Speaker 6: Larry Fink of Blackrock obviously has a tremendous insights. You know,

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Speaker 6: he thought that you had June July and we're done.

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Speaker 6: So I think I think that could be for non

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Speaker 6: US investors, EM investors, China investors. The dollar strength has

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Speaker 6: been such a headwind and if we get you know,

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Speaker 6: one or two done, get a bit of a pause,

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Speaker 6: I think it brings brings a lot of potential for

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Speaker 6: the dollar to maybe weaken a little bit, which would

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Speaker 6: be a great tail wind for our investments in emerging

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Speaker 6: markets in China.

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Speaker 1: All right, Brendan, thank you so much for joining us

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Speaker 1: Brendan to hearn see io of Crane Shares, giving us

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Speaker 1: a little overview of what's happening in China here as

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Speaker 1: they continue to reopen from a very severe COVID lockdown,

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Speaker 1: and now a lot of the US and other and

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Speaker 1: European CEOs making the way to China to see you

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Speaker 1: kind of get a first hand look at the business

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Speaker 1: environment in China these days as it relates to their

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Speaker 1: businesses and potentially future investment. So Elon Musk was there

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Speaker 1: this week. Jamie Diamond, JPMorgan Chase was there. They had

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Speaker 1: a big, big investor conference there, so perhaps a little

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Speaker 1: falling there.

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Speaker 5: You're listening to the tape Cat's are live program Bloomberg

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Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the

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Speaker 5: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

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Speaker 5: You can also listen live on Amazon Alexa from our

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Speaker 5: flagship New York station. Just say Alexa play Bloomberg eleven thirty.

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Speaker 1: I want to get right to our next guest, David Diets.

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Speaker 1: He's managing principal and senior portfolio manager at Peepack Private

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Speaker 1: Wealth Management. David, thanks so much for joining us here.

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Speaker 1: Looks like we're going to get this debt ceiling done,

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Speaker 1: so I guess that removes one worry for the market here.

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Speaker 1: What do you think the market should be focusing on

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Speaker 1: and going forward.

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Speaker 7: I think one thing that the market is focusing on

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Speaker 7: now is not just that we're getting agreement on suspending

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Speaker 7: the debt gap ceiling, but the implications of how that

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Speaker 7: agreement was reached, not only where there's no new spending,

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Speaker 7: but basically the current administration's promise of raising taxes and

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Speaker 7: d in corporations from twenty one percent to twenty eight

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Speaker 7: percent the wealthy is from thirty seven to thirty nine

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Speaker 7: and six seems to have gone completely off the board

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Speaker 7: and seems to be iced until after the next presidential election.

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Speaker 7: I don't think investors at first Blush were focusing on that. Increasingly,

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Speaker 7: I think that is a very important issue that people

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Speaker 7: are now starting to take note.

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Speaker 8: What does that look like then? In terms of the trade,

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Speaker 8: One thing that I've been thinking about a lot is

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Speaker 8: downside to the dollar.

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Speaker 9: What else should I.

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Speaker 7: Be thinking about, Well, you know, the other thing is

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Speaker 7: probably you know, lower interest rates and so forth, because

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Speaker 7: if there's no new spending, that's a bit deflationary. And

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Speaker 7: the other risk, of course for investors going forward is

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Speaker 7: if we do, as many indicators seem to suggest, go

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Speaker 7: into a recession mild or otherwise, we cannot expect any

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Speaker 7: fiscal stimulus to help get us out of that. And

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Speaker 7: so as a result, I think that coupled with some

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Speaker 7: lower inflation readings I'm starting to detect here, plus less

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Speaker 7: fiscal firepower, interest rates could start to roll over at TAD.

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Speaker 1: So we're going to have the Fed on June fourteenth

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Speaker 1: kind of let us know where they are with their rates.

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Speaker 1: Are you looking for them to pause? Pivot? What are

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Speaker 1: you looking for?

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Speaker 7: So what I think has really juiced its rally today

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Speaker 7: is just this week there's been a complete flip between

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Speaker 7: expectations for a hike to now expectations for a pause

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Speaker 7: or a skip or whatever you want to call it.

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Speaker 7: And I think what's really important here is, although the

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Speaker 7: labor market is staying wrong, when you start looking at

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Speaker 7: more leading indicators. So for example, we saw the seventh

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Speaker 7: month in a row down on the manufacturing index, important

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Speaker 7: index of course of producer prices encompassed in that also down,

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Speaker 7: and of course unit labor growth costs coming down. You

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Speaker 7: know your labor numbers are your most lagging indicator, but

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Speaker 7: the more forward looking indicators suggests less and less price pressure. Now,

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Speaker 7: mind you, all eyes will be on tomorrow's May jobless numbers.

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Speaker 7: That could change all the betting. But increasingly it seems

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Speaker 7: like the Fed is starting to get the job done,

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Speaker 7: and we really should look for a pause or skip

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Speaker 7: or whatever you want to call.

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Speaker 8: It, and just to go even more micro than that.

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Speaker 8: In your note you mentioned advanced auto parts. What does

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Speaker 8: the advanced autopart story tell you about how the FEDS

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Speaker 8: impact with ray hikes has been going.

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Speaker 7: So certainly, to look at it a little bit more broadly,

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Speaker 7: we're seeing a number of retailers, where that be Target,

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Speaker 7: whether that be Macy's, whether that be some of the

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Speaker 7: dollar stores, that seem to have really reduced their forecast

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Speaker 7: in coming in overall with results that are less than expected.

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Speaker 7: Of course, you know the disaster the jury yesterday was

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Speaker 7: Advanced Autoparts. It's hard to tell down nearly forty percent

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Speaker 7: from where it was at the start of the week,

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Speaker 7: whether that is company specific or has bigger implications for

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Speaker 7: the whole economy. We saw some of its competitors, for example,

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Speaker 7: genuine Parts also declined too, so it's hard to know.

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Speaker 7: I guess one thing that one takeaway, of course, is

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Speaker 7: don't believe every analyst out there, because they all had

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Speaker 7: it wrong. And now they're rushing this morning to mark

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Speaker 7: down their forecasts and so forth. And I guess they

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Speaker 7: saw something with a thirty five percent decline, seventy percent

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Speaker 7: slash in profits and seventy percent plus slash and dividends

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Speaker 7: that they didn't like.

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Speaker 1: So, David, you know, it just seemed like just a

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Speaker 1: couple of weeks ago, we're all concerned about the banking

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Speaker 1: situation in this country, the banking system. I guess they

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Speaker 1: were certainly past any panic kind of phase. Are there

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Speaker 1: any banks out there that maybe got thrown out with

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Speaker 1: the bath water?

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Speaker 7: So I think there's more risk forward the banks going forward. Obviously,

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Speaker 7: when you have these super high short term interest rates,

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Speaker 7: it does give an incentive to move out of your

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Speaker 7: traditional deposits and into a money marketer or treasury. Having

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Speaker 7: said that, I do believe that there are a number

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Speaker 7: of banks that we've looked at which have been going

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Speaker 7: around for almost two centuries and is sticking to their

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Speaker 7: knitting and they're just too cheap. When we will suggested

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Speaker 7: in financial Group is starting in eighteen twenty eight, had

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Speaker 7: a nice footprint in the Northeast. You're trading at about

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Speaker 7: half a book value, is off by nearly fifty percent

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Speaker 7: since early February six and a half percent dividend, four

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Speaker 7: times free cash flow. It seems like they've been through

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Speaker 7: these ups and downs over nearly two hundred years. They'll

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Speaker 7: get through this. In the meantime, I think that that

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Speaker 7: low market price doesn't send you to diversify and take

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Speaker 7: a look at something like citizens First.

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Speaker 8: I want to talk to you about the AI rally

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Speaker 8: as well. I'm talking to the CEO of C three

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Speaker 8: AI later today, so I'm being a little bit selfish

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Speaker 8: and using my time with you to ask about that.

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Speaker 8: Talk to me about what your big question is about

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Speaker 8: the hype around AI. Is it warranted?

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Speaker 7: Certainly, AI has the potential to revolutionize everything we do.

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Speaker 7: You know, it is kind of like Google Search on steroids,

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Speaker 7: So I love that. Here's the thing, though, one is

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Speaker 7: a lot of companies have been doing similar stuff for

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Speaker 7: the last decade. Only now are they starting to highlight

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Speaker 7: it because they're getting so many questions about it in

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Speaker 7: a pop in their stock price. And the other thing

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Speaker 7: from an investing point of view is you always want

437
00:24:42,119 --> 00:24:47,200
Speaker 7: to be cautious about paying up to ridiculous levels for

438
00:24:47,760 --> 00:24:50,399
Speaker 7: the hype, because of course AI is going to be

439
00:24:50,480 --> 00:24:53,480
Speaker 7: more expensive than traditional search. Everyone in the world is

440
00:24:53,520 --> 00:24:56,320
Speaker 7: going to be jumping into the space and of course

441
00:24:56,359 --> 00:24:59,280
Speaker 7: we haven't seen the government regulation. The government's still trying

442
00:24:59,280 --> 00:25:01,240
Speaker 7: to figure out what is this mean and to the

443
00:25:01,280 --> 00:25:05,159
Speaker 7: extent invade privacy or has the tendency to mislead people,

444
00:25:05,240 --> 00:25:07,439
Speaker 7: They're going to come down hard. I think Italy has

445
00:25:07,480 --> 00:25:09,879
Speaker 7: already banned it, so that's another thing investors have to

446
00:25:09,920 --> 00:25:12,399
Speaker 7: watch where. I think one nice thing about today's rally

447
00:25:12,480 --> 00:25:15,359
Speaker 7: is we saw C three AI. It was down big

448
00:25:15,359 --> 00:25:16,919
Speaker 7: time early. This morn has come back a little bit.

449
00:25:16,960 --> 00:25:19,560
Speaker 7: I still slowly, just down double digits, suggesting that people

450
00:25:19,600 --> 00:25:22,160
Speaker 7: are now looking beyond the hype and looking at other

451
00:25:22,240 --> 00:25:25,119
Speaker 7: areas of the market. They have some value now after

452
00:25:25,760 --> 00:25:28,240
Speaker 7: kind of a mute in May for most of the

453
00:25:28,320 --> 00:25:29,720
Speaker 7: rank and file in the market.

454
00:25:29,880 --> 00:25:31,679
Speaker 1: All right, David, thanks so much again for joining us.

455
00:25:31,680 --> 00:25:34,320
Speaker 1: Always appreciate getting some of your thoughts. That's David Deets.

456
00:25:34,320 --> 00:25:37,479
Speaker 1: He's a managing principle and senior portfolio manager at Pepeck

457
00:25:37,560 --> 00:25:41,680
Speaker 1: Private Wealth Management. Always with some nice, clear and concise messaging.

458
00:25:41,720 --> 00:25:45,880
Speaker 5: There, you're listening to the team. Ken's our Line program

459
00:25:46,000 --> 00:25:49,959
Speaker 5: Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com,

460
00:25:50,000 --> 00:25:53,160
Speaker 5: the iHeartRadio app, and the Bloomberg Business app. Or listen

461
00:25:53,240 --> 00:25:55,320
Speaker 5: on demand wherever you get your podcasts.

462
00:25:57,000 --> 00:25:59,439
Speaker 1: Well, we're talking about you know, Macy's and some of

463
00:25:59,440 --> 00:26:01,159
Speaker 1: the other retail as we're seeing over the last at

464
00:26:01,160 --> 00:26:04,040
Speaker 1: several days and kind of getting to the strength of

465
00:26:04,080 --> 00:26:07,200
Speaker 1: the consumer out there, and that is a big, big

466
00:26:07,240 --> 00:26:10,520
Speaker 1: issue for obviously the markets and for the federal reservers.

467
00:26:10,560 --> 00:26:12,080
Speaker 1: I think about what to do with this economy with

468
00:26:12,119 --> 00:26:14,680
Speaker 1: these interest rates. So to get a sense of kind

469
00:26:14,680 --> 00:26:16,600
Speaker 1: of where we are with the consumer, maybe focusing on

470
00:26:16,680 --> 00:26:20,160
Speaker 1: gen z and the millennials, we talked to Christina Roman.

471
00:26:20,359 --> 00:26:25,560
Speaker 1: She's a consumer education and advisory manager at Experience. Christina,

472
00:26:25,600 --> 00:26:27,200
Speaker 1: thanks so much for joining us here. When we think

473
00:26:27,200 --> 00:26:30,919
Speaker 1: about some of the younger folks out there, the gen Z,

474
00:26:31,080 --> 00:26:35,200
Speaker 1: the millennials, how are they financially right now coming out

475
00:26:35,240 --> 00:26:37,640
Speaker 1: of the pandemic? Where are they right now?

476
00:26:39,119 --> 00:26:42,520
Speaker 9: Absolutely thank you for having me. Well, what we found

477
00:26:42,520 --> 00:26:45,240
Speaker 9: We recently did a survey of how millennials and gen

478
00:26:45,320 --> 00:26:48,600
Speaker 9: Zers are faring in the current economy because we know

479
00:26:48,640 --> 00:26:51,440
Speaker 9: that they're going to be the biggest drivers of spending

480
00:26:51,480 --> 00:26:54,200
Speaker 9: and we wanted to get a better understanding of their

481
00:26:54,240 --> 00:26:57,879
Speaker 9: personal finance and credit knowledge. And what we found is

482
00:26:57,920 --> 00:27:01,400
Speaker 9: that seventy percent of consumers as though the current environment

483
00:27:01,480 --> 00:27:05,880
Speaker 9: is hurting their ability to be financially independent. But as

484
00:27:05,880 --> 00:27:08,720
Speaker 9: a result of that, we're seeing this trend where consumers

485
00:27:08,920 --> 00:27:12,479
Speaker 9: are becoming more focused on their personal financial health and

486
00:27:12,520 --> 00:27:16,880
Speaker 9: seeking out trusted resources for personal finance information. So they're

487
00:27:16,920 --> 00:27:20,359
Speaker 9: really looking inward because there are so many factors that

488
00:27:20,400 --> 00:27:23,640
Speaker 9: they can't control and they want to better understand how

489
00:27:23,640 --> 00:27:25,080
Speaker 9: to manage their personal finance.

490
00:27:25,560 --> 00:27:27,760
Speaker 8: So a big part of what you do, Christina, if

491
00:27:27,800 --> 00:27:31,040
Speaker 8: I'm correct, is reach young people where they are on

492
00:27:31,119 --> 00:27:35,240
Speaker 8: social media with that finance education. Is that right? Yes,

493
00:27:35,720 --> 00:27:38,080
Speaker 8: So talk to me about what that strategy for you

494
00:27:38,320 --> 00:27:42,280
Speaker 8: has looked like. I'm a big finance TikToker. I make

495
00:27:42,280 --> 00:27:45,240
Speaker 8: a lot of those TikTok videos about personal finance advice.

496
00:27:46,160 --> 00:27:48,080
Speaker 8: What do you see that works and what do you

497
00:27:48,119 --> 00:27:52,000
Speaker 8: see that you think is not helpful for young people

498
00:27:52,040 --> 00:27:54,200
Speaker 8: looking to beef up their financial futures?

499
00:27:55,560 --> 00:27:58,080
Speaker 9: Yeah, you know, I think also it's important to know

500
00:27:58,160 --> 00:28:02,040
Speaker 9: that we're at a point where information can be consumed anywhere, right.

501
00:28:02,080 --> 00:28:05,560
Speaker 9: So we've been working We've had a credit chat program

502
00:28:05,680 --> 00:28:09,440
Speaker 9: that we've managed on Twitter for more than ten years,

503
00:28:09,640 --> 00:28:13,600
Speaker 9: and you know, we've branched out into live conversations as well,

504
00:28:14,000 --> 00:28:17,320
Speaker 9: and consumers want you to be human. They want to

505
00:28:17,400 --> 00:28:21,880
Speaker 9: know that you're there for them, and so one one

506
00:28:21,960 --> 00:28:25,680
Speaker 9: tactic that we deployed was at taking their questions and

507
00:28:25,840 --> 00:28:29,960
Speaker 9: just answering them very honestly, and I think this is

508
00:28:29,960 --> 00:28:33,159
Speaker 9: really important. What is highlighted for us is that consumers

509
00:28:33,640 --> 00:28:35,760
Speaker 9: they don't know everything that we think that they know

510
00:28:36,119 --> 00:28:40,719
Speaker 9: about credit and knowledge is power. You know, not everyone

511
00:28:40,760 --> 00:28:43,680
Speaker 9: grew up in a household where money and personal finance

512
00:28:43,720 --> 00:28:47,680
Speaker 9: topics were freely discussed and financial literacy courses were not

513
00:28:47,880 --> 00:28:50,360
Speaker 9: often you know, required in school. I know that was

514
00:28:50,400 --> 00:28:53,800
Speaker 9: my experience growing up. We didn't often talk about money

515
00:28:53,800 --> 00:28:58,200
Speaker 9: in the household, and oftentimes navigating finances kind of felt

516
00:28:58,200 --> 00:29:02,200
Speaker 9: like trial by fire. But this focus on financial literacy

517
00:29:02,320 --> 00:29:07,200
Speaker 9: and financial education really helps consumers to navigate their financial

518
00:29:07,240 --> 00:29:10,880
Speaker 9: lives and make decisions that can set them up for success.

519
00:29:10,960 --> 00:29:14,360
Speaker 9: Which is you know why we believe in financial power

520
00:29:14,400 --> 00:29:22,240
Speaker 9: for all and we make ourselves available on Instagram, Twitter, Facebook,

521
00:29:22,480 --> 00:29:25,400
Speaker 9: you know, just LinkedIn. All of these sources are a

522
00:29:25,400 --> 00:29:28,719
Speaker 9: great opportunity for us to share the incredible resources that

523
00:29:28,760 --> 00:29:31,920
Speaker 9: we have available to help consumers learn how to manage

524
00:29:31,920 --> 00:29:35,160
Speaker 9: their credit. We have our Asked Experience blog, which answers

525
00:29:35,240 --> 00:29:38,400
Speaker 9: just about every question a consumer could possibly have about

526
00:29:38,480 --> 00:29:42,360
Speaker 9: credit and personal finance, and we share these resources via

527
00:29:42,480 --> 00:29:45,320
Speaker 9: our chats and our social media initiatives.

528
00:29:45,960 --> 00:29:47,760
Speaker 1: Hey, Christina, I have about particularly for some of the

529
00:29:48,240 --> 00:29:51,480
Speaker 1: younger folks out there, the millennials, the Gen Z student debt.

530
00:29:51,520 --> 00:29:54,000
Speaker 1: It's such a big part of their financial life, more

531
00:29:54,040 --> 00:29:58,840
Speaker 1: so than maybe my generation. What are the biggest issues

532
00:29:58,840 --> 00:30:01,840
Speaker 1: that you year about from your clients and kind of

533
00:30:01,880 --> 00:30:03,840
Speaker 1: what is your general advice.

534
00:30:05,440 --> 00:30:09,120
Speaker 9: Regarding student debt. I think it's just it's really important

535
00:30:09,160 --> 00:30:13,680
Speaker 9: for consumers to make sure that they know the terms

536
00:30:13,720 --> 00:30:16,440
Speaker 9: of the loans that they're taking on, not taking on

537
00:30:16,560 --> 00:30:20,360
Speaker 9: more than they actually need, because I think it's that

538
00:30:20,520 --> 00:30:24,520
Speaker 9: some consumers when they are applying for student loans, they

539
00:30:24,680 --> 00:30:27,800
Speaker 9: actually take on more than they actually need and they

540
00:30:27,800 --> 00:30:29,960
Speaker 9: don't realize that all of that's going to have to

541
00:30:29,960 --> 00:30:34,080
Speaker 9: be paid at the end. So it's important to do

542
00:30:34,200 --> 00:30:36,560
Speaker 9: your research when you're taking on your debt, and then

543
00:30:36,560 --> 00:30:39,760
Speaker 9: when it comes time to pay your student loan debt,

544
00:30:40,240 --> 00:30:44,120
Speaker 9: contact your lenders, get an understanding of what the payment

545
00:30:44,240 --> 00:30:48,200
Speaker 9: options are, how you can best manage that you know,

546
00:30:48,360 --> 00:30:51,640
Speaker 9: do you have a grace period, because some students when

547
00:30:51,680 --> 00:30:54,240
Speaker 9: they graduate from college, they may have a bit of

548
00:30:54,240 --> 00:30:56,640
Speaker 9: a grace period before they have to start paying that off,

549
00:30:56,680 --> 00:30:59,280
Speaker 9: and that just gives them the opportunity to look for

550
00:30:59,320 --> 00:31:01,440
Speaker 9: a job or to cure a job that they can

551
00:31:01,440 --> 00:31:04,600
Speaker 9: then use to help to pay that loan off. So

552
00:31:04,640 --> 00:31:07,600
Speaker 9: it's really important to know the terms of any loan

553
00:31:07,640 --> 00:31:10,360
Speaker 9: that you're taking on. To contact your lenders, and if

554
00:31:10,400 --> 00:31:13,760
Speaker 9: you're having trouble paying your student loan debt back now,

555
00:31:13,840 --> 00:31:16,080
Speaker 9: right now we are in a pause, but once that

556
00:31:16,160 --> 00:31:17,920
Speaker 9: starts back up, if you don't feel like you're in

557
00:31:17,960 --> 00:31:20,720
Speaker 9: a position where you can immediately start to pay it back,

558
00:31:21,000 --> 00:31:24,000
Speaker 9: contact your lenders as student as possible, because that can help.

559
00:31:25,000 --> 00:31:27,240
Speaker 9: That can help them to help maybe create a plan

560
00:31:27,360 --> 00:31:30,000
Speaker 9: for you so that you can feel more confident when

561
00:31:30,040 --> 00:31:31,760
Speaker 9: you start to resume your payment.

562
00:31:32,040 --> 00:31:34,040
Speaker 8: Yeah, Golden had a note this morning, by the way,

563
00:31:34,240 --> 00:31:37,760
Speaker 8: that Paul I thought you'd like this that the unpausing

564
00:31:37,760 --> 00:31:40,880
Speaker 8: of student loan debt is going to add to add

565
00:31:40,920 --> 00:31:44,320
Speaker 8: to consumer spending and inflation. So that's a bad news

566
00:31:44,360 --> 00:31:46,800
Speaker 8: bearers for the FED moment. But going back to the

567
00:31:46,920 --> 00:31:50,160
Speaker 8: personal finance advice that you provide move a little later

568
00:31:50,200 --> 00:31:53,000
Speaker 8: in life for me. The people you speak with who

569
00:31:53,200 --> 00:31:55,400
Speaker 8: have paid off their student loans, they have a little

570
00:31:55,440 --> 00:31:57,480
Speaker 8: bit of savings and they're not sure what to do

571
00:31:57,600 --> 00:32:00,600
Speaker 8: with it. What questions are they asking you about where

572
00:32:00,600 --> 00:32:03,040
Speaker 8: to put their money right now? Are they concerned about

573
00:32:03,080 --> 00:32:05,480
Speaker 8: keeping all of their savings at a bank given some

574
00:32:05,520 --> 00:32:07,640
Speaker 8: of the issues that we've seen in the banking sector.

575
00:32:09,240 --> 00:32:12,520
Speaker 9: I can't honestly speak to that. I haven't seen that personally.

576
00:32:12,560 --> 00:32:15,400
Speaker 9: We haven't received questions about that. Most of the questions

577
00:32:15,400 --> 00:32:19,800
Speaker 9: that we receive typically are focused on credit and how

578
00:32:20,200 --> 00:32:23,760
Speaker 9: consumers can best set themselves up for success when managing

579
00:32:23,760 --> 00:32:26,320
Speaker 9: their credit. In personal finance, how.

580
00:32:26,200 --> 00:32:28,880
Speaker 1: About residential real estate. That's a big part of people's

581
00:32:29,440 --> 00:32:33,000
Speaker 1: net worth historically in this country, but again a lot

582
00:32:33,000 --> 00:32:35,600
Speaker 1: of folks you're finding a challenging now, particularly that interest

583
00:32:35,640 --> 00:32:38,080
Speaker 1: rates have gone up. How do you kind of think

584
00:32:38,080 --> 00:32:40,200
Speaker 1: about real estate when you need to talk to your customers.

585
00:32:41,600 --> 00:32:44,240
Speaker 9: When we talk to customers, you really focus more so

586
00:32:44,680 --> 00:32:48,560
Speaker 9: on achieving the best possible interest rate to get I mean,

587
00:32:48,560 --> 00:32:51,880
Speaker 9: I'm sorry, achieving the best possible credit score to qualify

588
00:32:51,960 --> 00:32:54,240
Speaker 9: for the best interest rate. Because we know that your

589
00:32:54,240 --> 00:32:57,160
Speaker 9: credit score is going to directly impact your loan terms,

590
00:32:57,480 --> 00:33:01,080
Speaker 9: and achieving the best possible interest rate will help to reduce,

591
00:33:02,160 --> 00:33:03,640
Speaker 9: you know, the amount that you're going to have to

592
00:33:03,680 --> 00:33:07,200
Speaker 9: pay over the lifetime of that loan. So we really

593
00:33:07,280 --> 00:33:10,760
Speaker 9: advise consumers to begin to look at your credit report

594
00:33:10,880 --> 00:33:14,280
Speaker 9: about three to six months ahead of making any real

595
00:33:14,400 --> 00:33:17,520
Speaker 9: estate or planning to make any real estate purchase. And

596
00:33:17,600 --> 00:33:20,680
Speaker 9: you can do that, you know, via our free credit

597
00:33:20,720 --> 00:33:23,800
Speaker 9: monitoring app. We offer the Experience Credit Report and the

598
00:33:23,840 --> 00:33:27,240
Speaker 9: FICO Score where consumers can begin to monitor their credit

599
00:33:27,560 --> 00:33:30,000
Speaker 9: to get a understanding of what's in their credit history.

600
00:33:30,360 --> 00:33:33,880
Speaker 9: And also not to make any major purchases before you

601
00:33:34,000 --> 00:33:37,400
Speaker 9: plan to enter in the real estate market because that

602
00:33:37,560 --> 00:33:40,680
Speaker 9: could affect your credit, which could then impact your interest rate,

603
00:33:40,960 --> 00:33:42,880
Speaker 9: and this is not the time where you want to

604
00:33:42,920 --> 00:33:44,760
Speaker 9: impact your interest rate negatively.

605
00:33:45,880 --> 00:33:48,560
Speaker 8: Final thirty seconds here, what would you say is the

606
00:33:48,600 --> 00:33:52,240
Speaker 8: biggest mistake that you see the folks you work with make.

607
00:33:53,840 --> 00:33:59,560
Speaker 9: I think the biggest mistake that we see is as

608
00:33:59,600 --> 00:34:03,040
Speaker 9: far as it's like just not informing consumers enough that

609
00:34:03,560 --> 00:34:06,400
Speaker 9: they have the power to check their credit reports and

610
00:34:06,440 --> 00:34:10,160
Speaker 9: their credit scores. I think there's so many misconceptions about

611
00:34:10,239 --> 00:34:14,520
Speaker 9: credit and we get asked this Austen, and so it's

612
00:34:14,520 --> 00:34:17,480
Speaker 9: really important to check your credit report as often as

613
00:34:17,480 --> 00:34:19,240
Speaker 9: you can. This is not going to impact your credit

614
00:34:19,280 --> 00:34:22,040
Speaker 9: score negatively, and it will catch you up for success,

615
00:34:22,160 --> 00:34:24,520
Speaker 9: you know, when you're ready to make a milestone purchase.

616
00:34:25,400 --> 00:34:27,960
Speaker 1: Christina, thanks so much for joining us. Really appreciate getting

617
00:34:28,160 --> 00:34:31,239
Speaker 1: the benefit of some of your thoughts and analysis there.

618
00:34:31,280 --> 00:34:36,319
Speaker 1: Christina Roeman, consumer education and advocacy manager at Experience. I'm

619
00:34:36,320 --> 00:34:38,880
Speaker 1: working with folks, particularly some of the younger folks out there,

620
00:34:38,920 --> 00:34:41,680
Speaker 1: to kind of manage their financial situation.

621
00:34:41,920 --> 00:34:45,000
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can

622
00:34:45,040 --> 00:34:48,840
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever

623
00:34:48,920 --> 00:34:52,640
Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

624
00:34:52,840 --> 00:34:55,480
Speaker 2: at Matt Miller nineteen seventy three and on.

625
00:34:55,560 --> 00:34:58,640
Speaker 1: Fall Sweeney I'm on Twitter at pt Sweeney. Before the podcast,

626
00:34:58,680 --> 00:35:01,400
Speaker 1: you can always catch us World at Bloomberg Radio.