Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
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Speaker 1: Pretty group to Paul Sweeney here in the Bloomberg Interactive
Speaker 1: Brooker's Studio, Gretty just feels like with the debt ceiling
Speaker 1: issue essentially put to bed, we still got a couple
Speaker 1: more moves to go. Seems like focus is back on
Speaker 1: some of the macroeconomic issues out there and some of
Speaker 1: the economic data points, starting with nonfarm payrolls tomorrow.
Speaker 3: Yeah, payrolls, and you got the labor numbers in terms
Speaker 3: of kind of wages. Then you have the Chinese growth
Speaker 3: numbers that are weighing on the markets a lot. Not
Speaker 3: to mention an additional FED hike.
Speaker 4: Where did that.
Speaker 3: Relief rally go that we were supposed to get? That
Speaker 3: seems to be exactly how this is playing out.
Speaker 1: All right, Let's check in with someone who kind of
Speaker 1: follows this stuff as well. Doctor Lori to Murray, President
Speaker 1: of the Committee on Economic Development from the Conference Board. Laurie,
Speaker 1: thanks so much for joining us here. What are you
Speaker 1: focusing on here, because a lot of folks are really
Speaker 1: trying to put all the crosswinds together and get a
Speaker 1: sense of maybe where this fet is going, where this
Speaker 1: economy is going. What are the data points that you're
Speaker 1: looking at?
Speaker 4: Okay, well, the first and foremost, Paul, the most important
Speaker 4: data point is the one we just crossed last night,
Speaker 4: which was the House passage of this bill. So it's
Speaker 4: important to recognize that that we have just avoided a
Speaker 4: major economic catastrophe. So data point one, we avoided an
Speaker 4: economic catastrophe. So we can go back and reset and
Speaker 4: look at the economy. And we're still expecting at the
Speaker 4: Conference Board a short, short and shallow recession that will
Speaker 4: likely end by the end of the year. But there's
Speaker 4: a luxury to be able to say that, because again,
Speaker 4: as they said, last night's vote was really significant and
Speaker 4: historic for the economy this year and going forward.
Speaker 3: So doctor, just to build on that the nitty gritty
Speaker 3: of this bill, as we talked about fiscal spending caps
Speaker 3: for the next two years, I think so January first,
Speaker 3: twenty twenty five, which, by the way, Paul, the new president,
Speaker 3: is going to have a real, really horrible first day
Speaker 3: in the office or first day of the year. I
Speaker 3: have to say, but doctor, talk to us about kind
Speaker 3: of the nitty gritty of the bill in the context
Speaker 3: of staring down a recession in terms of the budget.
Speaker 4: Did we do good here? Oh, it is definitely a victory.
Speaker 4: It is a victory for America, and it's a victory
Speaker 4: consequently for the world, given the role that the American
Speaker 4: economy plays in the world. The accomplishments are we have
Speaker 4: held spending at the twenty twenty three levels. We're looking
Speaker 4: at the next two years of only one percent increase.
Speaker 4: The CBO the Congressional Budget Office says over ten years
Speaker 4: will actually saved one point five trillion dollars. This is
Speaker 4: really significant progress, but I want to underscore that it's
Speaker 4: really only affecting fifteen percent of the budget. We're at
Speaker 4: thirty one point four trillion dollars in debt and going up.
Speaker 4: It suspends the debt limit for those two years, doesn't
Speaker 4: set another cap, and fortunately it also puts a cap
Speaker 4: on spending for the next two years. But what we
Speaker 4: have to look at is that this is only on
Speaker 4: the non discretionary, on the discretionary non defense spending, so
Speaker 4: that's fifteen percent of the budget. We have a lot
Speaker 4: more to do here. Congress and the administration have a
Speaker 4: lot of work ahead of them if we're going to
Speaker 4: move towards fiscal health. But this is a very very
Speaker 4: important first step.
Speaker 1: So, I mean, it all kind of ties in, you know,
Speaker 1: to the national debt here and that larger discussion here.
Speaker 1: What's your view of that and maybe how should our
Speaker 1: government view this our growing national debt, you know, to
Speaker 1: what degree does it really need to be addressed aggressively?
Speaker 4: So the bottom line here is debt really matters, and
Speaker 4: it's become an even more important issue with inflation because
Speaker 4: as we are dealing with inflation, and the Conference Board
Speaker 4: doesn't expect inflation to go away anytime soon. In terms
Speaker 4: of these rates that we have now, we're hoping to
Speaker 4: see them hold and possibly come down, but inflation is
Speaker 4: not going to go away right now. In terms of
Speaker 4: the budget, the servicing the debt now is costing as
Speaker 4: much as defense, which is about eight hundred plus billion dollars.
Speaker 4: That's just debt servicing so that's having a major impact
Speaker 4: on how we are spending or can spend their national
Speaker 4: dollars to meet both their defense and non defense NEETs
Speaker 4: as a nation. So that in and of itself makes
Speaker 4: it absolutely extremely important that we deal with this overwhelming
Speaker 4: explosion of debt in terms of particularly the debt ratio
Speaker 4: to GDP, which is now our debt ratio is equal
Speaker 4: to GDP instead one hundred percent.
Speaker 3: In terms of kind of the work requirements with some
Speaker 3: of those social programs, Medicaid, Medicare, et cetera, any read
Speaker 3: through on kind of fiscal spending from that perspective, we
Speaker 3: know that was one of the sticking points in the deal.
Speaker 4: So I just want to want to point out that
Speaker 4: Medicare and Medicaid were not included in the work requirements.
Speaker 4: Work requirements are really the Food program and the Temporary
Speaker 4: Assistance for Needy Families program. And while the requirements have expanded,
Speaker 4: particularly in terms of the age that has covered, the
Speaker 4: age has been raised to fifty five years old for
Speaker 4: the SNAP program, there have been exemptions, and so it's
Speaker 4: going to take veterans homeless have been exempted from these
Speaker 4: work requirements. So it's going to take a little bit
Speaker 4: of budget maneuvering and analysis to figure route whether it's
Speaker 4: a save or it's actually going to cost more. Right
Speaker 4: now quick analysis, most analysts are seeing it as a wash.
Speaker 1: We're speaking with doctor Lorii Esposito Murray, President the Committee
Speaker 1: for Economic Development for the Conference Board. So doctor Murray,
Speaker 1: I mean, I guess the political reality is this debt
Speaker 1: ceiling limit in some of the spending issues, the budget
Speaker 1: kind of kicked down the road, kicked the can down
Speaker 1: the road for a couple of years. But I guess
Speaker 1: from markets perspective, that's probably the best we could have
Speaker 1: hoped for.
Speaker 4: You know, it is the best we could have hoped for.
Speaker 4: But it also is a pretty good start. Is it
Speaker 4: is a bipartisan vote three fourteen to one seventeen. You
Speaker 4: had one hundred and forty nine Republicans in the House
Speaker 4: voting for this bill. It's an incredible accomplishment for Speaker McCarthy,
Speaker 4: who just a couple of months ago we saw go
Speaker 4: through a fifteen vote series before it could become speaker.
Speaker 4: He's really destrating leadership in the House and also demonstrating
Speaker 4: with his Republican colleagues that Republicans can actually govern, which
Speaker 4: I think is really significant in terms of the Republican Party,
Speaker 4: in terms of the Speaker's leadership.
Speaker 3: So doctor, let's step away from from the debt story
Speaker 3: for a moment to talk about these recessionary calls. The
Speaker 3: consensus seems to be that by the end of this
Speaker 3: year we will have a recession on our hands in
Speaker 3: the US shallow deep consensus of shallow right now, what
Speaker 3: would change that point of view?
Speaker 4: Well, according to the conference board where we're looking at
Speaker 4: it is that it will be short in a shallow
Speaker 4: recession by the end of the year, likely by the
Speaker 4: end of the year. The main drivers of the recession
Speaker 4: or inflation and high interest rates. So dealing with inflation
Speaker 4: is absolutely critical in terms of tempering that recession and
Speaker 4: coming out of it.
Speaker 1: On to that end, I mean, I guess a reasonable
Speaker 1: call could be made that, you know, with the variable
Speaker 1: lag long and variable lag, that the Fed should in
Speaker 1: fact pause here for a while. That five hundred and
Speaker 1: twenty five basis points is enough to kind of cool inflation.
Speaker 1: Are you in that camp that they should pause and
Speaker 1: see how things shake out? O.
Speaker 4: Well, we're expecting them to pause in terms of the
Speaker 4: hike in either probably in June, but then expecting one
Speaker 4: or more twenty five basis point hikes later on the summer.
Speaker 3: Should we be get all worried about treasury issuance now
Speaker 3: that seem to be one of the concerns in the
Speaker 3: lead up to as this deal was getting figured out.
Speaker 3: How do we view the treasury?
Speaker 4: So, you know, one of event is really important here
Speaker 4: in terms of this agreement and the whole death ceiling
Speaker 4: debate in general, is you know, given the significant and
Speaker 4: dominant role that the US economy plays in the global economy,
Speaker 4: and the importance of treasury securities being a safe haven
Speaker 4: which also underpins our economy. You know, again coming back
Speaker 4: to this deal, coming back to the fact that it
Speaker 4: looks like that if this this is going to get
Speaker 4: through the Senate and on the President's desk in time
Speaker 4: for the X date of June fifth, it's it's so
Speaker 4: important in terms of our credibility and Treasury's credibility globally
Speaker 4: that we maintain that role and Treasury securities maintained that
Speaker 4: role in the global economy.
Speaker 1: All right, Our thanks to doctor Lori Esposito Murray, President
Speaker 1: Committee for Economic Development for the Conference Board talking about
Speaker 1: getting this debt deal done and getting it, as doctor
Speaker 1: Esposita Murray said, getting it through the Senate presumably in
Speaker 1: the next day or two, and then on the President's
Speaker 1: desk and you know by Saturday, right, yeah, I mean
Speaker 1: it's you know, it's cutting it close here. But again
Speaker 1: that's where it seems to be now, and the expectation
Speaker 1: is it should get through the Senate fairly quickly without
Speaker 1: much drama, and then of course the President has indicated
Speaker 1: that he will sign it. So that's kind of kind
Speaker 1: of where we are. And again up to that June
Speaker 1: fifth or sixth, kind of New X date, if you will,
Speaker 1: then when the US will run out of money presumably,
Speaker 1: so good news there.
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Speaker 1: It seems like since China's reopened, Curtty, a lot of
Speaker 1: US CEO's have been making a way to China to
Speaker 1: kind of check in on things. Tim Cook from Apple
Speaker 1: and just this week you had Jamie Diamond, JP Morgan
Speaker 1: Chase elon Musk was there trying to get a sense
Speaker 1: of where that economy is, where that market is in
Speaker 1: terms of opportunity. So we want to get some insight.
Speaker 1: We go to Brendan Ahearn, CIO of Crane Shares, does
Speaker 1: a lot of work in China with the markets there. Brenda,
Speaker 1: this accelerated China reopening is I don't know it. It's good.
Speaker 1: It's We've got a lot of CEOs making their way
Speaker 1: back over to China to kind of reignite some discussions here.
Speaker 1: How do you view China right now as a economic
Speaker 1: player and as a potential partner trading partner with the US.
Speaker 6: Yeah, yeah, I'm point out of NA Video's Jensen Huang
Speaker 6: mentioned that he'll be visiting China next month. We don't
Speaker 6: have the exact dates, but joined Jamie Diamond, Elon Musk,
Speaker 6: Franklin Templeton, a whole host of executives. But yeah, I
Speaker 6: think we're you're seeing a reopening economy that is growing
Speaker 6: incrementally incrementally slowly. Some of the historical drivers of China's economy,
Speaker 6: export driven manufacturing, has been barely lacklustered due to the
Speaker 6: global economy slowing. You also have their property market has
Speaker 6: been very lackluster that historically see a lot of infrastructure stimulus,
Speaker 6: are not seeing it, which really leads the domestic consumption story,
Speaker 6: which really requires consumer confidence to build. And we are
Speaker 6: seeing those green shoots. It just it's happening slower, and
Speaker 6: investors want to see policy makers step on that stimulus
Speaker 6: gas pedal.
Speaker 3: Well, Brendan, speaking of that stimulus gas pedal, where does
Speaker 3: the PBOC stand in all this? I feel like one
Speaker 3: of the highlights of the last couple of years has
Speaker 3: been this divergence between most of the world's central banks
Speaker 3: and then the PBOC going in the opposite direction. Do
Speaker 3: we see some sort of whatever the opposite of a divergences, convergence, convergence.
Speaker 6: Do we see a convergence? You know, you know unlikely
Speaker 6: that that China's your central banks, your great great observation,
Speaker 6: just you know, you see central banks globally following the
Speaker 6: FED higher the pbocs going the opposite direction, you know,
Speaker 6: and that's led you know c n H right now,
Speaker 6: China's offshore Ambia seven eleven so off versus the dollar,
Speaker 6: and and I think that's where you see them incrementally easing.
Speaker 6: You know, we're very likely we'll see a bank reserve
Speaker 6: requirement ratio cut, potentially the loan prime rate or the
Speaker 6: intra bank lending rate cut next month. It's just more
Speaker 6: of you know, investors are kind of in a you know,
Speaker 6: show me now, you know, you know, I kind of
Speaker 6: called it the where's the beef? You know, you know,
Speaker 6: they're getting anxious, and capital is flowing within Asia, within
Speaker 6: em in the short run to areas like Japan to India,
Speaker 6: just because they're you know, gotten very impatient on policy
Speaker 6: support from the PBOC and the central government.
Speaker 1: So Brendan on the consumer side of the economy, talk
Speaker 1: to us about the unemployment in China, particularly team unemployment.
Speaker 1: We know that we've heard that continues to be stubbornly high.
Speaker 1: And what does that tell you?
Speaker 6: Yeah, you know, if you think about young, younger people,
Speaker 6: you know, I have to describe it that way as
Speaker 6: as as I get older, but recent college graduates, you
Speaker 6: know a lot of these folks end up working in
Speaker 6: the service sector that you know, could be hotels, could
Speaker 6: be restaurants, airlines, and you know, et cetera. So so
Speaker 6: you know, you had with the removal of zero COVID
Speaker 6: COVID run rampant in China in the latter part of
Speaker 6: Q four of last year the beginning of Q one
Speaker 6: of this year, so that that really weighed on a
Speaker 6: lot of this service sector jobs. And as domestic travel
Speaker 6: has picked up, you're seeing you know, you had Air China.
Speaker 6: You know they're hiring one thousand new flight attendants. You know,
Speaker 6: as people start traveling more domestically, your hotels going to
Speaker 6: need more people. So so that the US unemployment I
Speaker 6: think will slowly come down. It's just it's it's just
Speaker 6: in the short run it is quite high because of
Speaker 6: the knock on effect of COVID running rampant, the effect
Speaker 6: on the consumer.
Speaker 1: Brandy. We started this discussion noting how so many high
Speaker 1: profile US CEO's ranking the way to China over the
Speaker 1: last several weeks. Reality is China investible? I mean what
Speaker 1: I if I can I go to my board and
Speaker 1: say we need to build a plant in China or
Speaker 1: make big investments, multi year investments in China. I just
Speaker 1: don't know what the government is going to do.
Speaker 6: Well is that the US government or the Chinese government.
Speaker 6: I think that's that's probably little boat a little bit
Speaker 6: of both. And and I think I think, you know, uh,
Speaker 6: these flurry of executives and and and and you've seen
Speaker 6: it from European executives as well. You know, a whole
Speaker 6: host of Europeans actually been in China year to date.
Speaker 6: You know, business people are getting on airplanes and meeting,
Speaker 6: having meals with one another. The politicians aren't. And I
Speaker 6: think you know, during COVID, you know, you had COVID babies,
Speaker 6: but you also had COVID divorces. And the US China
Speaker 6: political relationship has very much frayed due to a lack
Speaker 6: of travel diplomatically if you think about. You know, China's
Speaker 6: Commerce secretary just met with Gina Romando and US Trade
Speaker 6: rep side just last week. He's the first senior Chinese
Speaker 6: official to visit the United States in four years. At
Speaker 6: the same time, no senior US official has been in
Speaker 6: China in four years. So I think hopefully the politicians
Speaker 6: can take a lead from what we're seeing from the
Speaker 6: corporate world, which is these two economies are very very
Speaker 6: entwined with one another.
Speaker 3: Well, Brendan and our in our last minute or so here,
Speaker 3: let's take step back. We have a listener question asking
Speaker 3: about when the market views views a pause or potentially
Speaker 3: a cut state side in the US as a negative.
Speaker 3: Given you your financial expertise, talk to us about your
Speaker 3: view on that.
Speaker 6: For US, I mean, I think the you know, the
Speaker 6: the viewing increasingly as you do you have this June
Speaker 6: hike or not or certainly July. You know, I you know,
Speaker 6: Larry Fink of Blackrock obviously has a tremendous insights. You know,
Speaker 6: he thought that you had June July and we're done.
Speaker 6: So I think I think that could be for non
Speaker 6: US investors, EM investors, China investors. The dollar strength has
Speaker 6: been such a headwind and if we get you know,
Speaker 6: one or two done, get a bit of a pause,
Speaker 6: I think it brings brings a lot of potential for
Speaker 6: the dollar to maybe weaken a little bit, which would
Speaker 6: be a great tail wind for our investments in emerging
Speaker 6: markets in China.
Speaker 1: All right, Brendan, thank you so much for joining us
Speaker 1: Brendan to hearn see io of Crane Shares, giving us
Speaker 1: a little overview of what's happening in China here as
Speaker 1: they continue to reopen from a very severe COVID lockdown,
Speaker 1: and now a lot of the US and other and
Speaker 1: European CEOs making the way to China to see you
Speaker 1: kind of get a first hand look at the business
Speaker 1: environment in China these days as it relates to their
Speaker 1: businesses and potentially future investment. So Elon Musk was there
Speaker 1: this week. Jamie Diamond, JPMorgan Chase was there. They had
Speaker 1: a big, big investor conference there, so perhaps a little
Speaker 1: falling there.
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Speaker 1: I want to get right to our next guest, David Diets.
Speaker 1: He's managing principal and senior portfolio manager at Peepack Private
Speaker 1: Wealth Management. David, thanks so much for joining us here.
Speaker 1: Looks like we're going to get this debt ceiling done,
Speaker 1: so I guess that removes one worry for the market here.
Speaker 1: What do you think the market should be focusing on
Speaker 1: and going forward.
Speaker 7: I think one thing that the market is focusing on
Speaker 7: now is not just that we're getting agreement on suspending
Speaker 7: the debt gap ceiling, but the implications of how that
Speaker 7: agreement was reached, not only where there's no new spending,
Speaker 7: but basically the current administration's promise of raising taxes and
Speaker 7: d in corporations from twenty one percent to twenty eight
Speaker 7: percent the wealthy is from thirty seven to thirty nine
Speaker 7: and six seems to have gone completely off the board
Speaker 7: and seems to be iced until after the next presidential election.
Speaker 7: I don't think investors at first Blush were focusing on that. Increasingly,
Speaker 7: I think that is a very important issue that people
Speaker 7: are now starting to take note.
Speaker 8: What does that look like then? In terms of the trade,
Speaker 8: One thing that I've been thinking about a lot is
Speaker 8: downside to the dollar.
Speaker 9: What else should I.
Speaker 7: Be thinking about, Well, you know, the other thing is
Speaker 7: probably you know, lower interest rates and so forth, because
Speaker 7: if there's no new spending, that's a bit deflationary. And
Speaker 7: the other risk, of course for investors going forward is
Speaker 7: if we do, as many indicators seem to suggest, go
Speaker 7: into a recession mild or otherwise, we cannot expect any
Speaker 7: fiscal stimulus to help get us out of that. And
Speaker 7: so as a result, I think that coupled with some
Speaker 7: lower inflation readings I'm starting to detect here, plus less
Speaker 7: fiscal firepower, interest rates could start to roll over at TAD.
Speaker 1: So we're going to have the Fed on June fourteenth
Speaker 1: kind of let us know where they are with their rates.
Speaker 1: Are you looking for them to pause? Pivot? What are
Speaker 1: you looking for?
Speaker 7: So what I think has really juiced its rally today
Speaker 7: is just this week there's been a complete flip between
Speaker 7: expectations for a hike to now expectations for a pause
Speaker 7: or a skip or whatever you want to call it.
Speaker 7: And I think what's really important here is, although the
Speaker 7: labor market is staying wrong, when you start looking at
Speaker 7: more leading indicators. So for example, we saw the seventh
Speaker 7: month in a row down on the manufacturing index, important
Speaker 7: index of course of producer prices encompassed in that also down,
Speaker 7: and of course unit labor growth costs coming down. You
Speaker 7: know your labor numbers are your most lagging indicator, but
Speaker 7: the more forward looking indicators suggests less and less price pressure. Now,
Speaker 7: mind you, all eyes will be on tomorrow's May jobless numbers.
Speaker 7: That could change all the betting. But increasingly it seems
Speaker 7: like the Fed is starting to get the job done,
Speaker 7: and we really should look for a pause or skip
Speaker 7: or whatever you want to call.
Speaker 8: It, and just to go even more micro than that.
Speaker 8: In your note you mentioned advanced auto parts. What does
Speaker 8: the advanced autopart story tell you about how the FEDS
Speaker 8: impact with ray hikes has been going.
Speaker 7: So certainly, to look at it a little bit more broadly,
Speaker 7: we're seeing a number of retailers, where that be Target,
Speaker 7: whether that be Macy's, whether that be some of the
Speaker 7: dollar stores, that seem to have really reduced their forecast
Speaker 7: in coming in overall with results that are less than expected.
Speaker 7: Of course, you know the disaster the jury yesterday was
Speaker 7: Advanced Autoparts. It's hard to tell down nearly forty percent
Speaker 7: from where it was at the start of the week,
Speaker 7: whether that is company specific or has bigger implications for
Speaker 7: the whole economy. We saw some of its competitors, for example,
Speaker 7: genuine Parts also declined too, so it's hard to know.
Speaker 7: I guess one thing that one takeaway, of course, is
Speaker 7: don't believe every analyst out there, because they all had
Speaker 7: it wrong. And now they're rushing this morning to mark
Speaker 7: down their forecasts and so forth. And I guess they
Speaker 7: saw something with a thirty five percent decline, seventy percent
Speaker 7: slash in profits and seventy percent plus slash and dividends
Speaker 7: that they didn't like.
Speaker 1: So, David, you know, it just seemed like just a
Speaker 1: couple of weeks ago, we're all concerned about the banking
Speaker 1: situation in this country, the banking system. I guess they
Speaker 1: were certainly past any panic kind of phase. Are there
Speaker 1: any banks out there that maybe got thrown out with
Speaker 1: the bath water?
Speaker 7: So I think there's more risk forward the banks going forward. Obviously,
Speaker 7: when you have these super high short term interest rates,
Speaker 7: it does give an incentive to move out of your
Speaker 7: traditional deposits and into a money marketer or treasury. Having
Speaker 7: said that, I do believe that there are a number
Speaker 7: of banks that we've looked at which have been going
Speaker 7: around for almost two centuries and is sticking to their
Speaker 7: knitting and they're just too cheap. When we will suggested
Speaker 7: in financial Group is starting in eighteen twenty eight, had
Speaker 7: a nice footprint in the Northeast. You're trading at about
Speaker 7: half a book value, is off by nearly fifty percent
Speaker 7: since early February six and a half percent dividend, four
Speaker 7: times free cash flow. It seems like they've been through
Speaker 7: these ups and downs over nearly two hundred years. They'll
Speaker 7: get through this. In the meantime, I think that that
Speaker 7: low market price doesn't send you to diversify and take
Speaker 7: a look at something like citizens First.
Speaker 8: I want to talk to you about the AI rally
Speaker 8: as well. I'm talking to the CEO of C three
Speaker 8: AI later today, so I'm being a little bit selfish
Speaker 8: and using my time with you to ask about that.
Speaker 8: Talk to me about what your big question is about
Speaker 8: the hype around AI. Is it warranted?
Speaker 7: Certainly, AI has the potential to revolutionize everything we do.
Speaker 7: You know, it is kind of like Google Search on steroids,
Speaker 7: So I love that. Here's the thing, though, one is
Speaker 7: a lot of companies have been doing similar stuff for
Speaker 7: the last decade. Only now are they starting to highlight
Speaker 7: it because they're getting so many questions about it in
Speaker 7: a pop in their stock price. And the other thing
Speaker 7: from an investing point of view is you always want
Speaker 7: to be cautious about paying up to ridiculous levels for
Speaker 7: the hype, because of course AI is going to be
Speaker 7: more expensive than traditional search. Everyone in the world is
Speaker 7: going to be jumping into the space and of course
Speaker 7: we haven't seen the government regulation. The government's still trying
Speaker 7: to figure out what is this mean and to the
Speaker 7: extent invade privacy or has the tendency to mislead people,
Speaker 7: They're going to come down hard. I think Italy has
Speaker 7: already banned it, so that's another thing investors have to
Speaker 7: watch where. I think one nice thing about today's rally
Speaker 7: is we saw C three AI. It was down big
Speaker 7: time early. This morn has come back a little bit.
Speaker 7: I still slowly, just down double digits, suggesting that people
Speaker 7: are now looking beyond the hype and looking at other
Speaker 7: areas of the market. They have some value now after
Speaker 7: kind of a mute in May for most of the
Speaker 7: rank and file in the market.
Speaker 1: All right, David, thanks so much again for joining us.
Speaker 1: Always appreciate getting some of your thoughts. That's David Deets.
Speaker 1: He's a managing principle and senior portfolio manager at Pepeck
Speaker 1: Private Wealth Management. Always with some nice, clear and concise messaging.
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Speaker 1: Well, we're talking about you know, Macy's and some of
Speaker 1: the other retail as we're seeing over the last at
Speaker 1: several days and kind of getting to the strength of
Speaker 1: the consumer out there, and that is a big, big
Speaker 1: issue for obviously the markets and for the federal reservers.
Speaker 1: I think about what to do with this economy with
Speaker 1: these interest rates. So to get a sense of kind
Speaker 1: of where we are with the consumer, maybe focusing on
Speaker 1: gen z and the millennials, we talked to Christina Roman.
Speaker 1: She's a consumer education and advisory manager at Experience. Christina,
Speaker 1: thanks so much for joining us here. When we think
Speaker 1: about some of the younger folks out there, the gen Z,
Speaker 1: the millennials, how are they financially right now coming out
Speaker 1: of the pandemic? Where are they right now?
Speaker 9: Absolutely thank you for having me. Well, what we found
Speaker 9: We recently did a survey of how millennials and gen
Speaker 9: Zers are faring in the current economy because we know
Speaker 9: that they're going to be the biggest drivers of spending
Speaker 9: and we wanted to get a better understanding of their
Speaker 9: personal finance and credit knowledge. And what we found is
Speaker 9: that seventy percent of consumers as though the current environment
Speaker 9: is hurting their ability to be financially independent. But as
Speaker 9: a result of that, we're seeing this trend where consumers
Speaker 9: are becoming more focused on their personal financial health and
Speaker 9: seeking out trusted resources for personal finance information. So they're
Speaker 9: really looking inward because there are so many factors that
Speaker 9: they can't control and they want to better understand how
Speaker 9: to manage their personal finance.
Speaker 8: So a big part of what you do, Christina, if
Speaker 8: I'm correct, is reach young people where they are on
Speaker 8: social media with that finance education. Is that right? Yes,
Speaker 8: So talk to me about what that strategy for you
Speaker 8: has looked like. I'm a big finance TikToker. I make
Speaker 8: a lot of those TikTok videos about personal finance advice.
Speaker 8: What do you see that works and what do you
Speaker 8: see that you think is not helpful for young people
Speaker 8: looking to beef up their financial futures?
Speaker 9: Yeah, you know, I think also it's important to know
Speaker 9: that we're at a point where information can be consumed anywhere, right.
Speaker 9: So we've been working We've had a credit chat program
Speaker 9: that we've managed on Twitter for more than ten years,
Speaker 9: and you know, we've branched out into live conversations as well,
Speaker 9: and consumers want you to be human. They want to
Speaker 9: know that you're there for them, and so one one
Speaker 9: tactic that we deployed was at taking their questions and
Speaker 9: just answering them very honestly, and I think this is
Speaker 9: really important. What is highlighted for us is that consumers
Speaker 9: they don't know everything that we think that they know
Speaker 9: about credit and knowledge is power. You know, not everyone
Speaker 9: grew up in a household where money and personal finance
Speaker 9: topics were freely discussed and financial literacy courses were not
Speaker 9: often you know, required in school. I know that was
Speaker 9: my experience growing up. We didn't often talk about money
Speaker 9: in the household, and oftentimes navigating finances kind of felt
Speaker 9: like trial by fire. But this focus on financial literacy
Speaker 9: and financial education really helps consumers to navigate their financial
Speaker 9: lives and make decisions that can set them up for success.
Speaker 9: Which is you know why we believe in financial power
Speaker 9: for all and we make ourselves available on Instagram, Twitter, Facebook,
Speaker 9: you know, just LinkedIn. All of these sources are a
Speaker 9: great opportunity for us to share the incredible resources that
Speaker 9: we have available to help consumers learn how to manage
Speaker 9: their credit. We have our Asked Experience blog, which answers
Speaker 9: just about every question a consumer could possibly have about
Speaker 9: credit and personal finance, and we share these resources via
Speaker 9: our chats and our social media initiatives.
Speaker 1: Hey, Christina, I have about particularly for some of the
Speaker 1: younger folks out there, the millennials, the Gen Z student debt.
Speaker 1: It's such a big part of their financial life, more
Speaker 1: so than maybe my generation. What are the biggest issues
Speaker 1: that you year about from your clients and kind of
Speaker 1: what is your general advice.
Speaker 9: Regarding student debt. I think it's just it's really important
Speaker 9: for consumers to make sure that they know the terms
Speaker 9: of the loans that they're taking on, not taking on
Speaker 9: more than they actually need, because I think it's that
Speaker 9: some consumers when they are applying for student loans, they
Speaker 9: actually take on more than they actually need and they
Speaker 9: don't realize that all of that's going to have to
Speaker 9: be paid at the end. So it's important to do
Speaker 9: your research when you're taking on your debt, and then
Speaker 9: when it comes time to pay your student loan debt,
Speaker 9: contact your lenders, get an understanding of what the payment
Speaker 9: options are, how you can best manage that you know,
Speaker 9: do you have a grace period, because some students when
Speaker 9: they graduate from college, they may have a bit of
Speaker 9: a grace period before they have to start paying that off,
Speaker 9: and that just gives them the opportunity to look for
Speaker 9: a job or to cure a job that they can
Speaker 9: then use to help to pay that loan off. So
Speaker 9: it's really important to know the terms of any loan
Speaker 9: that you're taking on. To contact your lenders, and if
Speaker 9: you're having trouble paying your student loan debt back now,
Speaker 9: right now we are in a pause, but once that
Speaker 9: starts back up, if you don't feel like you're in
Speaker 9: a position where you can immediately start to pay it back,
Speaker 9: contact your lenders as student as possible, because that can help.
Speaker 9: That can help them to help maybe create a plan
Speaker 9: for you so that you can feel more confident when
Speaker 9: you start to resume your payment.
Speaker 8: Yeah, Golden had a note this morning, by the way,
Speaker 8: that Paul I thought you'd like this that the unpausing
Speaker 8: of student loan debt is going to add to add
Speaker 8: to consumer spending and inflation. So that's a bad news
Speaker 8: bearers for the FED moment. But going back to the
Speaker 8: personal finance advice that you provide move a little later
Speaker 8: in life for me. The people you speak with who
Speaker 8: have paid off their student loans, they have a little
Speaker 8: bit of savings and they're not sure what to do
Speaker 8: with it. What questions are they asking you about where
Speaker 8: to put their money right now? Are they concerned about
Speaker 8: keeping all of their savings at a bank given some
Speaker 8: of the issues that we've seen in the banking sector.
Speaker 9: I can't honestly speak to that. I haven't seen that personally.
Speaker 9: We haven't received questions about that. Most of the questions
Speaker 9: that we receive typically are focused on credit and how
Speaker 9: consumers can best set themselves up for success when managing
Speaker 9: their credit. In personal finance, how.
Speaker 1: About residential real estate. That's a big part of people's
Speaker 1: net worth historically in this country, but again a lot
Speaker 1: of folks you're finding a challenging now, particularly that interest
Speaker 1: rates have gone up. How do you kind of think
Speaker 1: about real estate when you need to talk to your customers.
Speaker 9: When we talk to customers, you really focus more so
Speaker 9: on achieving the best possible interest rate to get I mean,
Speaker 9: I'm sorry, achieving the best possible credit score to qualify
Speaker 9: for the best interest rate. Because we know that your
Speaker 9: credit score is going to directly impact your loan terms,
Speaker 9: and achieving the best possible interest rate will help to reduce,
Speaker 9: you know, the amount that you're going to have to
Speaker 9: pay over the lifetime of that loan. So we really
Speaker 9: advise consumers to begin to look at your credit report
Speaker 9: about three to six months ahead of making any real
Speaker 9: estate or planning to make any real estate purchase. And
Speaker 9: you can do that, you know, via our free credit
Speaker 9: monitoring app. We offer the Experience Credit Report and the
Speaker 9: FICO Score where consumers can begin to monitor their credit
Speaker 9: to get a understanding of what's in their credit history.
Speaker 9: And also not to make any major purchases before you
Speaker 9: plan to enter in the real estate market because that
Speaker 9: could affect your credit, which could then impact your interest rate,
Speaker 9: and this is not the time where you want to
Speaker 9: impact your interest rate negatively.
Speaker 8: Final thirty seconds here, what would you say is the
Speaker 8: biggest mistake that you see the folks you work with make.
Speaker 9: I think the biggest mistake that we see is as
Speaker 9: far as it's like just not informing consumers enough that
Speaker 9: they have the power to check their credit reports and
Speaker 9: their credit scores. I think there's so many misconceptions about
Speaker 9: credit and we get asked this Austen, and so it's
Speaker 9: really important to check your credit report as often as
Speaker 9: you can. This is not going to impact your credit
Speaker 9: score negatively, and it will catch you up for success,
Speaker 9: you know, when you're ready to make a milestone purchase.
Speaker 1: Christina, thanks so much for joining us. Really appreciate getting
Speaker 1: the benefit of some of your thoughts and analysis there.
Speaker 1: Christina Roeman, consumer education and advocacy manager at Experience. I'm
Speaker 1: working with folks, particularly some of the younger folks out there,
Speaker 1: to kind of manage their financial situation.
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever
Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
Speaker 2: at Matt Miller nineteen seventy three and on.
Speaker 1: Fall Sweeney I'm on Twitter at pt Sweeney. Before the podcast,
Speaker 1: you can always catch us World at Bloomberg Radio.