1
00:00:00,800 --> 00:00:04,040
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

2
00:00:04,040 --> 00:00:06,920
Speaker 1: my co host Matt Miller. Every business day, we bring

3
00:00:06,960 --> 00:00:11,520
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

4
00:00:11,560 --> 00:00:15,600
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

5
00:00:15,600 --> 00:00:18,479
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

6
00:00:18,480 --> 00:00:23,360
Speaker 1: at Bloomberg dot com slash podcast. Let's get right to

7
00:00:23,400 --> 00:00:26,239
Speaker 1: our next guest, Alicia Levin. She's a chief strategist and

8
00:00:26,360 --> 00:00:29,920
Speaker 1: managing director for b n y Melon Investment Management about

9
00:00:29,960 --> 00:00:33,839
Speaker 1: two point two trillion dollars of assets under management. Alicia

10
00:00:34,080 --> 00:00:37,400
Speaker 1: is speaking today on the Financial markets panel at the

11
00:00:37,440 --> 00:00:42,040
Speaker 1: Engage Undergraduate Investment Conference, so we're fortunate to get her time.

12
00:00:42,200 --> 00:00:45,680
Speaker 1: Alicia a lotted the discussion from market participants really over

13
00:00:45,720 --> 00:00:50,159
Speaker 1: the last several weeks, in particular has been inflation and

14
00:00:50,200 --> 00:00:53,280
Speaker 1: the impact on financial assets and where you want to

15
00:00:53,320 --> 00:00:56,920
Speaker 1: be with your portfolio and your investments. Love to get

16
00:00:57,000 --> 00:01:00,320
Speaker 1: your thoughts right here, right now on inflation and kind

17
00:01:00,360 --> 00:01:04,240
Speaker 1: of how that's factoring it to your calculus. So that's great.

18
00:01:04,280 --> 00:01:07,280
Speaker 1: Thanks for having me almost at the noon hour exciting

19
00:01:07,280 --> 00:01:10,280
Speaker 1: panel today. Um, look, I think that is that's the

20
00:01:10,360 --> 00:01:14,479
Speaker 1: question of the moment, And I think what better example

21
00:01:14,560 --> 00:01:17,360
Speaker 1: of the problem with inflation and inflation risk than the

22
00:01:17,400 --> 00:01:20,400
Speaker 1: Suez Canal where we saw that giant tank or sitting

23
00:01:20,480 --> 00:01:25,640
Speaker 1: there for about eight days choking up supply chain. And

24
00:01:25,720 --> 00:01:28,319
Speaker 1: today we've got a p p I number, you know,

25
00:01:28,760 --> 00:01:33,200
Speaker 1: four four point two percent year year growth on PPI prices,

26
00:01:33,760 --> 00:01:38,160
Speaker 1: much higher inflation and prices than expected for goods inputs,

27
00:01:38,200 --> 00:01:40,440
Speaker 1: and I think we are on a path for the

28
00:01:40,480 --> 00:01:45,520
Speaker 1: next few months of much higher inflation reads than UH

29
00:01:45,840 --> 00:01:48,280
Speaker 1: than we would have sought. Even though the FETE is

30
00:01:48,320 --> 00:01:50,840
Speaker 1: telling us not to worry. I think the prints are

31
00:01:50,840 --> 00:01:53,240
Speaker 1: going to be higher. So there are two issues. One

32
00:01:53,600 --> 00:01:56,760
Speaker 1: is inflation coming and to what do central banks do

33
00:01:56,840 --> 00:01:59,360
Speaker 1: about it? And the two are separate. But I think

34
00:01:59,400 --> 00:02:02,440
Speaker 1: the issue of inflation is real, and I think it's

35
00:02:02,480 --> 00:02:04,920
Speaker 1: going to last longer than a couple of months now.

36
00:02:04,960 --> 00:02:07,640
Speaker 1: We spent so much money on it already the pandemic

37
00:02:08,080 --> 00:02:10,400
Speaker 1: in terms of stimulus. But as I look at food

38
00:02:10,440 --> 00:02:14,680
Speaker 1: inflation and gasoline prices, you know, it doesn't matter if

39
00:02:14,720 --> 00:02:18,880
Speaker 1: they're coming from a lower UH comparison. These are still

40
00:02:18,919 --> 00:02:22,360
Speaker 1: making up a much higher percentage of the incomes of

41
00:02:22,400 --> 00:02:25,799
Speaker 1: the people who are hit hardest during the pandemic. Are

42
00:02:25,840 --> 00:02:28,000
Speaker 1: we going to see do we need to see more

43
00:02:28,800 --> 00:02:32,640
Speaker 1: federal government spending in terms of stimulus. So I don't

44
00:02:32,720 --> 00:02:35,720
Speaker 1: think they're going to be able to get more stimulus

45
00:02:35,800 --> 00:02:39,239
Speaker 1: for the kind of pandemic related issues. We had one

46
00:02:39,280 --> 00:02:42,720
Speaker 1: point nine trillion dollars, as you know, passed very quickly,

47
00:02:43,400 --> 00:02:46,000
Speaker 1: and if you think about how much money is coming

48
00:02:46,000 --> 00:02:49,040
Speaker 1: to the US economy, think about the timing of this.

49
00:02:49,560 --> 00:02:52,600
Speaker 1: On the one point nine one point two is going

50
00:02:52,639 --> 00:02:56,160
Speaker 1: to be plowed into the economy one point two trillions

51
00:02:56,200 --> 00:02:59,799
Speaker 1: by early September. So that's one point to trillion dollars

52
00:02:59,800 --> 00:03:06,240
Speaker 1: in six months. That's absolutely extraordinary and that can be inflationary. Um.

53
00:03:06,280 --> 00:03:10,360
Speaker 1: The question is do labor markets really adjust quickly to

54
00:03:10,480 --> 00:03:14,560
Speaker 1: get people back into you know, as we reopen, demand increases,

55
00:03:14,560 --> 00:03:18,160
Speaker 1: demand for services increases, candle labor markets keep up. And

56
00:03:18,160 --> 00:03:20,280
Speaker 1: that's really the big question, right, do people decide to

57
00:03:20,320 --> 00:03:23,560
Speaker 1: stay home and collect their unemployment benefits because it's about

58
00:03:23,600 --> 00:03:27,240
Speaker 1: twenty three an hour through September six or do people

59
00:03:27,240 --> 00:03:30,360
Speaker 1: go back to to you know, to working, and that's

60
00:03:30,480 --> 00:03:34,160
Speaker 1: those are those are tough questions, but it really is

61
00:03:34,600 --> 00:03:39,960
Speaker 1: staff forwards, higher risk of inflation in the very short term,

62
00:03:40,000 --> 00:03:42,320
Speaker 1: all right, So is it the higher risk of inflation

63
00:03:42,320 --> 00:03:44,400
Speaker 1: in the short term? Alicia? Is that how does that

64
00:03:44,840 --> 00:03:47,640
Speaker 1: kind of coloring where you guys at B and hy

65
00:03:47,680 --> 00:03:51,240
Speaker 1: melon are looking for opportunities. So this is really a

66
00:03:51,280 --> 00:03:53,680
Speaker 1: great question because again the two parts are is their

67
00:03:53,760 --> 00:03:56,240
Speaker 1: higher inflation we would say, yes, it's coming, and to

68
00:03:56,400 --> 00:03:58,760
Speaker 1: what is the said do about it? Right? Two different things,

69
00:03:58,760 --> 00:04:01,640
Speaker 1: because that's how it affects the economy. So the FED

70
00:04:01,720 --> 00:04:05,440
Speaker 1: has tried with every ounce of every know f o

71
00:04:05,600 --> 00:04:09,040
Speaker 1: MC member to say that they are strategiously patient and

72
00:04:09,040 --> 00:04:14,200
Speaker 1: will wait to see um until we get into whether

73
00:04:14,280 --> 00:04:17,680
Speaker 1: in three whether we've recovered in the labor market, and

74
00:04:17,720 --> 00:04:22,640
Speaker 1: they expect inflation to normalize as we exit. Data will

75
00:04:22,640 --> 00:04:25,560
Speaker 1: be noisy, and we expect and actually not to sit

76
00:04:25,640 --> 00:04:28,240
Speaker 1: on their hands. We think that the market believes that

77
00:04:28,400 --> 00:04:32,520
Speaker 1: this is going to happen. In addition, the inflation curved

78
00:04:33,000 --> 00:04:36,640
Speaker 1: invaser investors actually are buying the FED story, which is

79
00:04:36,680 --> 00:04:39,479
Speaker 1: you're going to get higher inflation in the short term

80
00:04:39,560 --> 00:04:42,560
Speaker 1: and then lower inflation in the out years, and that's

81
00:04:42,560 --> 00:04:46,160
Speaker 1: an inverted inflation curve. That's very unusual. We have an

82
00:04:46,200 --> 00:04:49,040
Speaker 1: inverted curve because people see its short terms. The big

83
00:04:49,040 --> 00:04:53,680
Speaker 1: wisp here is whether inflation expectations become unmoored right, whether

84
00:04:53,720 --> 00:04:56,479
Speaker 1: they become un anchored, whether it last bombers than a

85
00:04:56,480 --> 00:04:59,640
Speaker 1: couple of months of April, May June, and whether they're

86
00:04:59,720 --> 00:05:03,800
Speaker 1: for future expectations so higher. And that's the big risk

87
00:05:03,880 --> 00:05:08,160
Speaker 1: that would change FED policy. That's where you are. You know,

88
00:05:08,200 --> 00:05:10,920
Speaker 1: we're buying the stories for now, but the real numbers

89
00:05:10,920 --> 00:05:14,480
Speaker 1: are going to be coming through entire than expected. There's

90
00:05:14,520 --> 00:05:18,039
Speaker 1: so much money UM in US retirement accounts tied up

91
00:05:18,080 --> 00:05:22,280
Speaker 1: in stocks though, and any action from the FED would

92
00:05:22,680 --> 00:05:26,120
Speaker 1: not only work to um you know, tame inflation, but

93
00:05:26,279 --> 00:05:30,359
Speaker 1: also probably push the equity market down in a pretty

94
00:05:30,600 --> 00:05:36,520
Speaker 1: rough way. Is the Greenspan put alive? And well, look,

95
00:05:36,800 --> 00:05:40,320
Speaker 1: I think I think what the the overall tone of

96
00:05:40,360 --> 00:05:43,520
Speaker 1: the market except for the last couple of weeks, that

97
00:05:43,640 --> 00:05:47,040
Speaker 1: cyclicals are are the ways to play this right. So ultimately,

98
00:05:47,080 --> 00:05:52,080
Speaker 1: when you have higher inflations, financials outperform, energy outperforms, industrials

99
00:05:52,080 --> 00:05:55,960
Speaker 1: and materials outperform. And we think while you will have

100
00:05:56,040 --> 00:05:59,600
Speaker 1: periods of consolidation and yields, we think the removal yield

101
00:05:59,720 --> 00:06:02,840
Speaker 1: is simately going to be higher. Although not spiky, right,

102
00:06:02,880 --> 00:06:05,200
Speaker 1: We had really spike. We had eight five basis points

103
00:06:05,200 --> 00:06:07,159
Speaker 1: in the first quarter. We think the bulk of the

104
00:06:07,160 --> 00:06:10,160
Speaker 1: big move is behind us, but there will be moments

105
00:06:10,160 --> 00:06:12,240
Speaker 1: of doubts, and there will be moments of doubt when

106
00:06:12,279 --> 00:06:15,280
Speaker 1: we get some of those nasty inflation prints. Can we

107
00:06:15,360 --> 00:06:18,039
Speaker 1: still think the cick local sectors are a way to

108
00:06:18,279 --> 00:06:22,599
Speaker 1: insulate portfolios from some of the damage that higher rates

109
00:06:22,680 --> 00:06:26,039
Speaker 1: can do from inflation. I think you need to think

110
00:06:26,080 --> 00:06:30,479
Speaker 1: about your long duration assets, which are the speculative tech assets.

111
00:06:30,560 --> 00:06:33,640
Speaker 1: Um those may have a tougher time, and we know

112
00:06:33,760 --> 00:06:37,120
Speaker 1: they have had tougher times as we so yield spikes

113
00:06:37,240 --> 00:06:40,440
Speaker 1: sometimes eight to tend basis points in a day. I

114
00:06:40,560 --> 00:06:45,560
Speaker 1: think investors should be conscious that those risks remain, and

115
00:06:45,960 --> 00:06:49,240
Speaker 1: I think the market is somewhat sniffing out could there

116
00:06:49,240 --> 00:06:52,440
Speaker 1: be a policy mistake here? Right? Well, the FED sit

117
00:06:52,520 --> 00:06:56,320
Speaker 1: on its hand so long that it may get runaway inflation.

118
00:06:56,360 --> 00:06:58,160
Speaker 1: We're not seeing it in the numbers yet, but you're

119
00:06:58,160 --> 00:07:02,040
Speaker 1: starting to have that conversation with investors. So I still

120
00:07:02,080 --> 00:07:05,320
Speaker 1: be insticklable. I still like the small caps. You are

121
00:07:05,400 --> 00:07:08,640
Speaker 1: going to have moments where you know your growth stocks

122
00:07:08,680 --> 00:07:11,880
Speaker 1: will outperform, and we think you should be invested in

123
00:07:11,960 --> 00:07:17,000
Speaker 1: those profitable growth stocks that have increasing earnings and and

124
00:07:17,000 --> 00:07:20,200
Speaker 1: and not just trading on forty times revenue. And we

125
00:07:20,240 --> 00:07:24,600
Speaker 1: would use bond market volatility to start and grow positions

126
00:07:24,640 --> 00:07:28,480
Speaker 1: in those stocks. What do you think about the US

127
00:07:28,760 --> 00:07:32,040
Speaker 1: versus Europe? You mentioned that one point two trillion dollars

128
00:07:32,040 --> 00:07:34,760
Speaker 1: of US stimulus is going to be into the economy

129
00:07:34,760 --> 00:07:39,080
Speaker 1: by September. As far as I know, the in comparison

130
00:07:39,120 --> 00:07:43,600
Speaker 1: poultry seven and fifty billion dollar European rescue package or

131
00:07:43,640 --> 00:07:46,960
Speaker 1: billion euro European rescue package. Only of that is going

132
00:07:47,000 --> 00:07:49,840
Speaker 1: to go out to the countries that need it by

133
00:07:49,880 --> 00:07:52,760
Speaker 1: this summer. Are they going to have to do more?

134
00:07:52,840 --> 00:07:58,640
Speaker 1: Are we gonna see the European assets continue to underperform?

135
00:07:58,680 --> 00:08:01,200
Speaker 1: So it's an interesting question, Shi. I think there may

136
00:08:01,240 --> 00:08:03,720
Speaker 1: be pressure for the Europeans to do more on the

137
00:08:03,760 --> 00:08:08,600
Speaker 1: fiscal side. Um. You know, the the ECB is absolutely

138
00:08:08,640 --> 00:08:12,640
Speaker 1: adamant that it will not allow the euro to appreciate

139
00:08:12,720 --> 00:08:17,120
Speaker 1: against the seller anymore. Oh, it looks like we lost

140
00:08:17,120 --> 00:08:19,400
Speaker 1: Alicia there, unfortunately, but it was great to have her

141
00:08:19,400 --> 00:08:22,480
Speaker 1: for the time being. Alicia Levine, chief strategist at b

142
00:08:22,800 --> 00:08:28,520
Speaker 1: N y Melon Investment Management. We heard earlier from Rob Kaplan,

143
00:08:29,080 --> 00:08:35,360
Speaker 1: Texas FED president, out of the Engage Undergraduate Investment Conference. UM.

144
00:08:35,400 --> 00:08:38,959
Speaker 1: That's David Coudla's conference there in Michigan. Jeffrey Rosenberg is

145
00:08:39,000 --> 00:08:42,559
Speaker 1: also there on the financial markets panel. He's a portfolio

146
00:08:42,600 --> 00:08:47,120
Speaker 1: manager at the black Rock Systemic Multi Strategy Fund. Jeff,

147
00:08:47,360 --> 00:08:49,880
Speaker 1: great to get you on the program. UM. I wonder,

148
00:08:49,880 --> 00:08:56,080
Speaker 1: considering what we heard from uh from Kaplan, how how

149
00:08:56,120 --> 00:09:00,000
Speaker 1: supportive of this rally do you expect the FED to remain.

150
00:09:00,200 --> 00:09:03,000
Speaker 1: They want to obviously get us back to full employment.

151
00:09:03,360 --> 00:09:05,920
Speaker 1: They want to well, their stated goal is to to

152
00:09:05,920 --> 00:09:08,319
Speaker 1: to fight I guess inflation in some ways, but or

153
00:09:08,400 --> 00:09:11,600
Speaker 1: keep price stability, maintain price stability. But now they're trying

154
00:09:11,600 --> 00:09:14,400
Speaker 1: to boost inflation and it's having a great effect on

155
00:09:14,679 --> 00:09:19,680
Speaker 1: financial assets as well. Yeah, you know you you talking

156
00:09:19,720 --> 00:09:23,120
Speaker 1: about the FED um fighting inflation. This is a FED

157
00:09:23,160 --> 00:09:26,720
Speaker 1: that's fighting inflation from below too little inflation. And the

158
00:09:26,760 --> 00:09:32,559
Speaker 1: implication for supporting the rally is that is providing historic

159
00:09:32,640 --> 00:09:36,600
Speaker 1: amount of accommodation, you know, first for the fighting for

160
00:09:36,720 --> 00:09:39,880
Speaker 1: fighting COVID, but then the second order impact of COVID

161
00:09:40,000 --> 00:09:43,040
Speaker 1: on inflation is that it is making it that much

162
00:09:43,080 --> 00:09:46,239
Speaker 1: harder for the FED to achieve its its new policy objective.

163
00:09:46,559 --> 00:09:50,480
Speaker 1: And so the FED is absolutely here in a new

164
00:09:50,559 --> 00:09:55,760
Speaker 1: operating mode, and that operating mode has removed preemptive FED

165
00:09:55,840 --> 00:10:01,280
Speaker 1: tightening for tightening conditions in the labor mark. They basically said,

166
00:10:01,280 --> 00:10:03,880
Speaker 1: we're only going to look at one side of the

167
00:10:03,920 --> 00:10:07,400
Speaker 1: mandate when it comes to tightening. We're not going to

168
00:10:07,480 --> 00:10:10,680
Speaker 1: look at labor markets as an indication that we should

169
00:10:10,679 --> 00:10:15,240
Speaker 1: be pulling back from our accommodation. And that's absolutely very

170
00:10:15,280 --> 00:10:19,320
Speaker 1: supportive in terms of highly accommodative financial conditions, which supports

171
00:10:19,400 --> 00:10:21,760
Speaker 1: Jeff the rally. To your question, the reason I ask

172
00:10:21,960 --> 00:10:25,240
Speaker 1: is that this morning on our m Live blog, um

173
00:10:25,320 --> 00:10:27,800
Speaker 1: Wes Goodman wrote a story saying the bull run has

174
00:10:27,920 --> 00:10:31,679
Speaker 1: years to go thanks to our beloved baby boomers. You

175
00:10:31,679 --> 00:10:34,560
Speaker 1: would have thought that they shifted into bonds at the

176
00:10:34,720 --> 00:10:38,000
Speaker 1: end of their you know, working life, but estimate show

177
00:10:38,080 --> 00:10:41,680
Speaker 1: retirement accounts of US households on thirty percent of the

178
00:10:41,760 --> 00:10:46,320
Speaker 1: nation's corporate equity and so, um, you know, with this

179
00:10:46,520 --> 00:10:49,600
Speaker 1: entire generation invested in stocks, the FED has no other

180
00:10:49,679 --> 00:10:52,200
Speaker 1: choice but to remain supportive. At least that's how his

181
00:10:52,280 --> 00:10:59,400
Speaker 1: theory goes. Yeah, look, the FED is going to measure

182
00:10:59,480 --> 00:11:04,320
Speaker 1: its togree of supportiveness based on its economic outcomes and

183
00:11:04,320 --> 00:11:09,560
Speaker 1: its economic objectives. Financial conditions are part of that now

184
00:11:09,640 --> 00:11:13,160
Speaker 1: in in the in the post first GFC crisis environment,

185
00:11:13,160 --> 00:11:16,720
Speaker 1: and certainly in the post COVID crisis environment. So it's

186
00:11:16,760 --> 00:11:19,520
Speaker 1: not a stated aim, but it's it's it means to

187
00:11:19,600 --> 00:11:22,920
Speaker 1: achieving that aim, and so that keeps the FED very

188
00:11:23,000 --> 00:11:27,120
Speaker 1: much supportive. We haven't had a situation, however, where the

189
00:11:27,160 --> 00:11:32,679
Speaker 1: FED has been challenged by potential conflict within its objectives.

190
00:11:32,880 --> 00:11:36,240
Speaker 1: All of the objectives have lined up on the same side.

191
00:11:36,600 --> 00:11:41,160
Speaker 1: Too little inflation, you need more accommodation. Too little growth,

192
00:11:41,400 --> 00:11:45,760
Speaker 1: you need more accommodation. Tightening of financial conditions, you need

193
00:11:45,840 --> 00:11:50,560
Speaker 1: more accommodation. The future will be one where the FED

194
00:11:50,880 --> 00:11:54,439
Speaker 1: may see a period where some of those objectives are

195
00:11:54,480 --> 00:11:57,040
Speaker 1: no longer all lining up in the same way, and

196
00:11:57,080 --> 00:12:00,400
Speaker 1: the uncertainty for the market will be well, how going

197
00:12:00,480 --> 00:12:04,480
Speaker 1: to balance and manage the conflict between those objectives. So

198
00:12:04,600 --> 00:12:08,000
Speaker 1: far that that has been pretty clear to say we're

199
00:12:08,040 --> 00:12:14,640
Speaker 1: going to preference financial conditions and achieving inflation over any

200
00:12:14,679 --> 00:12:18,720
Speaker 1: of the other concerns. Concerns such as financial stability, on

201
00:12:18,720 --> 00:12:21,640
Speaker 1: a long run basis in terms of too much accommodation,

202
00:12:21,760 --> 00:12:25,680
Speaker 1: or asset price bubbles, financial stability concerns, all of those

203
00:12:25,720 --> 00:12:28,680
Speaker 1: have been secondary. So that's where you get to these

204
00:12:28,760 --> 00:12:31,720
Speaker 1: kind of statements that the FED will always be there.

205
00:12:31,880 --> 00:12:35,840
Speaker 1: I think we're going to be perhaps in an environment

206
00:12:35,920 --> 00:12:40,679
Speaker 1: where in a rising inflationary environment that isn't transitory, that

207
00:12:40,800 --> 00:12:44,280
Speaker 1: FED faces a different challenge. The market will face that challenge,

208
00:12:44,440 --> 00:12:48,080
Speaker 1: But right now that remains a pretty uncertain call as

209
00:12:48,200 --> 00:12:50,000
Speaker 1: whether or not we're going to get to that point.

210
00:12:50,440 --> 00:12:54,800
Speaker 1: For now, the FED has been able to remain entirely

211
00:12:54,800 --> 00:12:59,160
Speaker 1: accommodative because they face no conflict in their multiple objectives.

212
00:12:59,400 --> 00:13:01,920
Speaker 1: All right, Jeff, Given where we think the FED is,

213
00:13:02,120 --> 00:13:06,880
Speaker 1: where are you guys at black Rock finding value here? Well?

214
00:13:07,000 --> 00:13:11,560
Speaker 1: Value in value? Uh? You know, I'm on the fixed

215
00:13:11,600 --> 00:13:15,199
Speaker 1: income side, But we certainly take a broad market perspective

216
00:13:15,280 --> 00:13:19,120
Speaker 1: in terms of investing, and in many of the investment

217
00:13:19,120 --> 00:13:23,280
Speaker 1: strategies we run, we run cross market. Uh. You know.

218
00:13:23,480 --> 00:13:30,160
Speaker 1: A long period of falling real interest rates reflective of

219
00:13:30,200 --> 00:13:36,240
Speaker 1: secular stagnation, falling term premium have certainly benefited the secular

220
00:13:36,280 --> 00:13:40,560
Speaker 1: growth story um to the point where valuations have become

221
00:13:40,760 --> 00:13:44,920
Speaker 1: secondary uh, and now there's a real challenge in the

222
00:13:45,000 --> 00:13:48,640
Speaker 1: market around that viewpoint. It starts with the fundamental top

223
00:13:48,679 --> 00:13:51,480
Speaker 1: down macro debate that we were just having in terms

224
00:13:51,559 --> 00:13:55,400
Speaker 1: of does the FED face the future environment where they

225
00:13:55,440 --> 00:13:58,560
Speaker 1: are achieving their objectives? But along the way and where

226
00:13:58,600 --> 00:14:01,680
Speaker 1: we are right now, is that is significantly change the

227
00:14:01,800 --> 00:14:06,520
Speaker 1: relative value in some of the growth stock story versus

228
00:14:06,520 --> 00:14:11,120
Speaker 1: the value stock story, where that rising potential of breaking

229
00:14:11,120 --> 00:14:15,800
Speaker 1: out of thirty years of falling interest rates secular stagnation

230
00:14:16,120 --> 00:14:19,400
Speaker 1: starts to benefit that that value perspective. On the fixed

231
00:14:19,400 --> 00:14:24,160
Speaker 1: income side of the value perspective, UM, there's uh not

232
00:14:24,440 --> 00:14:30,640
Speaker 1: much value left, uh. Spreads across our credit markets, headlines

233
00:14:30,680 --> 00:14:34,440
Speaker 1: in Bloomberg highlighting you know, tight levels of high yield

234
00:14:34,480 --> 00:14:37,920
Speaker 1: spread predating the global financial crisis going back to two

235
00:14:37,920 --> 00:14:41,440
Speaker 1: thousand and seven. So it's hard to find value, uh

236
00:14:41,560 --> 00:14:44,440
Speaker 1: in the fixed income market, the way that you can

237
00:14:44,520 --> 00:14:47,720
Speaker 1: still find some value in the equity market. All right, Jeff,

238
00:14:47,760 --> 00:14:49,760
Speaker 1: thank you so much for joining us. We always appreciate

239
00:14:49,800 --> 00:14:52,880
Speaker 1: getting your perspective here. Jeffrey Rosenberg, portfolio manager of the

240
00:14:52,880 --> 00:14:59,960
Speaker 1: black Rock Systematic Multi Strategy Fund at Blackbird Molly should

241
00:15:00,280 --> 00:15:04,440
Speaker 1: joins us Bloomberg Technology reporter Molly, Um, did it ever

242
00:15:04,520 --> 00:15:08,640
Speaker 1: look like the unions we're going to take this? Hi? Um.

243
00:15:08,680 --> 00:15:11,360
Speaker 1: I think in the very beginning it was a little

244
00:15:11,360 --> 00:15:13,560
Speaker 1: bit close. It was hard to see maybe which way

245
00:15:13,560 --> 00:15:15,400
Speaker 1: it would go. But as soon as they started counting

246
00:15:15,400 --> 00:15:19,200
Speaker 1: the vote, Amazon quickly pulled ahead. They spent about three

247
00:15:19,200 --> 00:15:22,600
Speaker 1: hours counting the votes yesterday and Amazon was ahead UM

248
00:15:22,640 --> 00:15:26,200
Speaker 1: at the close yesterday evening, and this morning, just in

249
00:15:26,240 --> 00:15:29,520
Speaker 1: the past hour and a half or so, Um, Amazon

250
00:15:29,560 --> 00:15:32,000
Speaker 1: pulled even further ahead. And so now, like you said,

251
00:15:32,040 --> 00:15:35,160
Speaker 1: they have a large majority of the of the votes

252
00:15:35,240 --> 00:15:37,440
Speaker 1: here and it doesn't look like there's any way that

253
00:15:37,480 --> 00:15:41,560
Speaker 1: the the union side could could catch up at this point. Molly,

254
00:15:41,640 --> 00:15:44,880
Speaker 1: what do you think both sides again here Amazon in

255
00:15:45,360 --> 00:15:49,120
Speaker 1: the unions will learn from what happened in Alabama? Is

256
00:15:49,160 --> 00:15:52,960
Speaker 1: this just the beginning what will likely be more efforts

257
00:15:53,040 --> 00:15:57,320
Speaker 1: to unionized parts of Amazon dot Com. It will definitely

258
00:15:57,320 --> 00:16:00,320
Speaker 1: be interesting to see. It's, you know, give in the

259
00:16:00,400 --> 00:16:03,720
Speaker 1: fact that you know, Amazon did win here. This is

260
00:16:03,800 --> 00:16:07,000
Speaker 1: kind of the status quo going forward with them. They've

261
00:16:07,040 --> 00:16:10,000
Speaker 1: always been anti union. This was a hard effort from

262
00:16:10,000 --> 00:16:14,040
Speaker 1: the beginning for the UM the retail union here in Alabama.

263
00:16:14,160 --> 00:16:17,240
Speaker 1: But given the Biden administration support for unionization and the

264
00:16:17,840 --> 00:16:21,000
Speaker 1: support for workers rights to unionize, they could get a

265
00:16:21,040 --> 00:16:24,400
Speaker 1: little extra federal support in the movement across the country

266
00:16:24,440 --> 00:16:28,120
Speaker 1: and try this again in other um, in other factories

267
00:16:28,160 --> 00:16:31,120
Speaker 1: at Amazon and other warehouses and factories that Amazon has

268
00:16:31,200 --> 00:16:35,160
Speaker 1: across the country. Molly, to some extent, you are You're

269
00:16:35,160 --> 00:16:36,920
Speaker 1: a tech reporter, but you're also kind of a gig

270
00:16:36,960 --> 00:16:40,080
Speaker 1: worker reporter, right, because a lot of these tech companies

271
00:16:40,240 --> 00:16:44,160
Speaker 1: rely on gig workers, and there's been some push for change,

272
00:16:44,200 --> 00:16:48,120
Speaker 1: but in the big headline cases, the gig worker seems

273
00:16:48,120 --> 00:16:50,880
Speaker 1: to have lost out. I'm thinking about Uber and California,

274
00:16:50,960 --> 00:16:53,760
Speaker 1: which is I think doubly interesting because it's a really

275
00:16:53,760 --> 00:16:57,400
Speaker 1: an historically left leaning state, right, and they still voted

276
00:16:57,520 --> 00:17:00,520
Speaker 1: against giving those workers the same kind of it's that

277
00:17:00,840 --> 00:17:05,920
Speaker 1: salaried workers have. Why is this, I mean, well, the

278
00:17:05,920 --> 00:17:11,840
Speaker 1: the Yeah, the gig worker situation is challenging and interesting

279
00:17:11,920 --> 00:17:14,879
Speaker 1: for for many reasons. I mean, in this case, these

280
00:17:14,960 --> 00:17:18,240
Speaker 1: are I wouldn't say that you can categorize them necessarily

281
00:17:18,240 --> 00:17:20,639
Speaker 1: as gig workers at the factory they have you know,

282
00:17:20,720 --> 00:17:23,960
Speaker 1: they do have some uh they have regular hours and

283
00:17:24,280 --> 00:17:27,120
Speaker 1: you know, they're basically part time or even full time workers,

284
00:17:27,119 --> 00:17:29,000
Speaker 1: so it's a little bit of a of a different

285
00:17:29,080 --> 00:17:34,119
Speaker 1: situation here. So Molly, it's um, you know, one point

286
00:17:34,200 --> 00:17:39,320
Speaker 1: three million employees at Amazon. This is it's just an

287
00:17:39,359 --> 00:17:42,320
Speaker 1: area that I would think you needs can't ignore. So

288
00:17:42,680 --> 00:17:46,000
Speaker 1: what's the next steps do we think? Well, they're already

289
00:17:46,160 --> 00:17:51,960
Speaker 1: making UM noise about challenging this, uh this this vote here,

290
00:17:52,240 --> 00:17:56,280
Speaker 1: saying that Amazon you know, put pressure on on workers

291
00:17:56,320 --> 00:18:02,800
Speaker 1: in mandatory information sessions, trying to you know, it's maybe

292
00:18:02,800 --> 00:18:06,719
Speaker 1: not explicitly threatened them, but definitely lean hard on reasons

293
00:18:06,720 --> 00:18:09,399
Speaker 1: why they should not join the union. And they sided

294
00:18:09,520 --> 00:18:12,000
Speaker 1: Amazon putting up a mailbox on the site of the

295
00:18:12,000 --> 00:18:16,000
Speaker 1: warehouse UM as kind of a threatening gesture to workers.

296
00:18:16,000 --> 00:18:19,880
Speaker 1: So they're definitely already saying that they're going to um

297
00:18:20,040 --> 00:18:22,320
Speaker 1: go after, you know, to to challenge this vote. So

298
00:18:22,359 --> 00:18:23,920
Speaker 1: I have no doubt that there will be a whole

299
00:18:23,920 --> 00:18:27,680
Speaker 1: series of legal challenges and issues going forward from this.

300
00:18:27,800 --> 00:18:31,000
Speaker 1: So this probably isn't just an open end shut vote today,

301
00:18:31,040 --> 00:18:33,280
Speaker 1: so we'll see some more challenges to that going forward

302
00:18:33,320 --> 00:18:35,560
Speaker 1: for sure. All Right, Molly, thank you so much for

303
00:18:35,640 --> 00:18:39,000
Speaker 1: joining us. It's really a fascinating story. Developing here at

304
00:18:39,000 --> 00:18:43,200
Speaker 1: Amazon dot com. Molly Shoots, us technology editor. Uh about

305
00:18:43,200 --> 00:18:46,400
Speaker 1: Bloomberg again, I'm sorry talking about Amazon, and uh, it's

306
00:18:46,480 --> 00:18:51,280
Speaker 1: interesting here the in Alabama, Amazon wins this round against

307
00:18:51,480 --> 00:18:56,680
Speaker 1: the union. Brad Bretti joins us. He senior wealth advisor

308
00:18:57,040 --> 00:18:59,920
Speaker 1: from Mainstay Capital Management. They have three and a half

309
00:19:00,080 --> 00:19:03,920
Speaker 1: billion dollars worth of assets under management out of Michigan.

310
00:19:03,960 --> 00:19:08,679
Speaker 1: But more importantly, he's been working on the annual Engage

311
00:19:09,040 --> 00:19:13,879
Speaker 1: Undergraduate Investment Investment Conference. As Paul was saying, it is

312
00:19:13,920 --> 00:19:17,800
Speaker 1: the largest collegiate investment conference in North America and it

313
00:19:17,920 --> 00:19:22,000
Speaker 1: is also sponsored by the Gate David Kudla Foundation. So um,

314
00:19:22,040 --> 00:19:25,960
Speaker 1: Brad tell us about the point of the conference, where

315
00:19:26,040 --> 00:19:29,200
Speaker 1: the goals of the event. Yeah, good morning, Paul, Matt.

316
00:19:29,359 --> 00:19:32,080
Speaker 1: This is bread and I'm very thankful to be a

317
00:19:32,119 --> 00:19:34,719
Speaker 1: part of the process. You know, David Coudla is our

318
00:19:34,760 --> 00:19:37,720
Speaker 1: CEO of main State Capital Management, really has made this

319
00:19:37,920 --> 00:19:42,800
Speaker 1: conference the pillar of his ongoing philanthropic endeavors. And what

320
00:19:42,840 --> 00:19:44,480
Speaker 1: we're able to do is attract the bust in the

321
00:19:44,480 --> 00:19:48,160
Speaker 1: brightest minds all across North North America and even globally.

322
00:19:48,840 --> 00:19:54,399
Speaker 1: Students from Harvard, Yale, Stanford, Princeton, Uh, Duke Paul, I

323
00:19:54,400 --> 00:19:57,800
Speaker 1: know which is uh uh you're all mo monitor to

324
00:19:57,800 --> 00:20:01,720
Speaker 1: to um free nba um. But bring them in right

325
00:20:01,920 --> 00:20:05,359
Speaker 1: and have them compete in a real, live stock pitch competition.

326
00:20:05,760 --> 00:20:08,439
Speaker 1: This isn't um you know, a false or or a

327
00:20:08,440 --> 00:20:11,760
Speaker 1: made up company. But they're able to pick uh any

328
00:20:11,800 --> 00:20:14,879
Speaker 1: any company that's public. They can pitch a long or

329
00:20:14,920 --> 00:20:18,159
Speaker 1: a short and dig into all the details some of

330
00:20:18,160 --> 00:20:20,840
Speaker 1: the I'll be honest, some of these presentations that are given,

331
00:20:21,119 --> 00:20:26,280
Speaker 1: they're fantastic and um. They get to pitch these live

332
00:20:26,760 --> 00:20:30,000
Speaker 1: and they get feedback from not just a professor, but

333
00:20:30,280 --> 00:20:35,320
Speaker 1: industry executive level professionals so CEOs of investment firms, private

334
00:20:35,320 --> 00:20:39,960
Speaker 1: equity chief strategists, and receive real life feedback um and

335
00:20:40,040 --> 00:20:43,120
Speaker 1: so quite frankly, it really serves as a launchpad um

336
00:20:43,280 --> 00:20:46,080
Speaker 1: for the next generation of financial leaders, right, people that

337
00:20:46,080 --> 00:20:49,600
Speaker 1: are interested in our industry and finance investment world. And

338
00:20:50,480 --> 00:20:53,199
Speaker 1: they come and compete with the very best across the

339
00:20:53,200 --> 00:20:56,760
Speaker 1: globe and see how they stuck up and then receive

340
00:20:56,840 --> 00:21:00,040
Speaker 1: feedback in real time, like I said, and it's and

341
00:21:00,240 --> 00:21:02,800
Speaker 1: it's been excellent. I've spoke to not only just partisans,

342
00:21:02,800 --> 00:21:05,879
Speaker 1: we're gonna hear about when are we gonna because I

343
00:21:05,920 --> 00:21:08,520
Speaker 1: want to know who's the winner and what's the stock idea.

344
00:21:08,520 --> 00:21:12,720
Speaker 1: I'd love to have that kid on my show. Yeah, yeah, no, absolutely.

345
00:21:12,920 --> 00:21:16,280
Speaker 1: So the actual Investment Undergraduate Conference spotun by David Koup

346
00:21:16,320 --> 00:21:19,359
Speaker 1: Foundation is underway as we speak. So the final rounds

347
00:21:19,359 --> 00:21:21,040
Speaker 1: are going to be held throughout today. At the very

348
00:21:21,119 --> 00:21:23,280
Speaker 1: end of the day, they're going to pick a first, second,

349
00:21:23,320 --> 00:21:26,480
Speaker 1: and third, and they're they're all over the board, UM

350
00:21:26,520 --> 00:21:28,879
Speaker 1: as far as the different companies that are chosen. But

351
00:21:28,960 --> 00:21:31,359
Speaker 1: it's not just the competition is that great. It is,

352
00:21:31,760 --> 00:21:34,919
Speaker 1: but during the entire event, David's able to bring together

353
00:21:35,440 --> 00:21:38,640
Speaker 1: UM Federal Reserve officials. As you guys mentioned previously, you're

354
00:21:38,680 --> 00:21:40,960
Speaker 1: Bloomberg's very own Kathleen Hayes is gonna be going live

355
00:21:41,200 --> 00:21:45,440
Speaker 1: very shortly with Federal Reserve Bank of Dallas President Robert Kaplan. Um.

356
00:21:45,560 --> 00:21:47,600
Speaker 1: Later on in the day, we have an executive member

357
00:21:47,640 --> 00:21:50,080
Speaker 1: of Mainstay Capitals team, Michael Braza, will be interviewing to

358
00:21:50,160 --> 00:21:53,240
Speaker 1: have a fireside chat with Melody Hobson, President co CEO

359
00:21:53,440 --> 00:21:57,080
Speaker 1: Arial Investments, Board chair of Starbucks, on the JP Morgan Board,

360
00:21:57,080 --> 00:22:00,199
Speaker 1: many many other roles. UM but it's able to and

361
00:22:00,280 --> 00:22:03,000
Speaker 1: there's questions and answer sessions. These aren't just watching people

362
00:22:03,160 --> 00:22:06,800
Speaker 1: you know on TV on YouTube, interacting directly with these

363
00:22:06,800 --> 00:22:11,440
Speaker 1: officials that quite frankly, it energizes a eighteen, nineteen twenty

364
00:22:11,520 --> 00:22:15,200
Speaker 1: year old and my my myself, uh, at my age

365
00:22:15,280 --> 00:22:17,040
Speaker 1: in my role, I'm very excited to be a part

366
00:22:17,080 --> 00:22:19,200
Speaker 1: of it. Um. I can only imagine as a young

367
00:22:19,840 --> 00:22:25,600
Speaker 1: uh just you know, double it, but uh, as a

368
00:22:25,720 --> 00:22:28,280
Speaker 1: eighteen nineteen twenty year old right to be able to

369
00:22:28,280 --> 00:22:31,440
Speaker 1: hear from somebody in those different roles. Uh, it really

370
00:22:31,440 --> 00:22:34,200
Speaker 1: just serves as a launchpad um to project and because

371
00:22:34,280 --> 00:22:37,480
Speaker 1: let's face it, these kids, right are the next people

372
00:22:37,480 --> 00:22:41,359
Speaker 1: in our industry, in the media industry, running hedge funds,

373
00:22:41,400 --> 00:22:45,040
Speaker 1: investment companies and the like. So very excited, all right, Brad.

374
00:22:45,119 --> 00:22:49,000
Speaker 1: So obviously this year is different for all of us here. Uh,

375
00:22:49,080 --> 00:22:52,479
Speaker 1: your conference this year is virtual. Tell us about some

376
00:22:52,520 --> 00:22:55,879
Speaker 1: of the you know how that's going. Yeah, it is,

377
00:22:56,000 --> 00:22:59,000
Speaker 1: so obviously we this is an annual event and David's

378
00:22:59,000 --> 00:23:02,520
Speaker 1: actually been putting on and involved heavily with investment conferences

379
00:23:02,560 --> 00:23:04,919
Speaker 1: for the better part of a decade. It's usually always

380
00:23:04,920 --> 00:23:08,159
Speaker 1: in person. Obviously, with everything going on throughout the country,

381
00:23:08,200 --> 00:23:11,240
Speaker 1: especially here in Michigan. Um, it is a virtual event,

382
00:23:11,480 --> 00:23:15,400
Speaker 1: but quite frankly, it's been able to attract even more participation.

383
00:23:15,440 --> 00:23:17,960
Speaker 1: We have a group joining us from the Republic of Kazakhstan.

384
00:23:18,359 --> 00:23:22,439
Speaker 1: We have multiple Canadian groups and competitors that are joining it.

385
00:23:22,520 --> 00:23:25,280
Speaker 1: So it's nice. Um, you know, I think we're all

386
00:23:25,320 --> 00:23:29,800
Speaker 1: getting more acclimated to zoom or to a virtual interaction

387
00:23:29,840 --> 00:23:32,080
Speaker 1: than we were maybe a year or so ago. UM,

388
00:23:32,160 --> 00:23:34,480
Speaker 1: So we're not gonna let anything slow us down. Engage

389
00:23:34,480 --> 00:23:36,480
Speaker 1: is going to march forward. Have you seen any of

390
00:23:36,520 --> 00:23:41,159
Speaker 1: the pitches so far? Has anything moved you? Uh? You

391
00:23:41,160 --> 00:23:43,880
Speaker 1: know what? Here's honestly what's moved. The teams are made

392
00:23:43,920 --> 00:23:46,840
Speaker 1: up of four or five individuals, but these are the

393
00:23:46,880 --> 00:23:51,520
Speaker 1: spokespersons for their respective college. There are stock pitch clubs

394
00:23:51,520 --> 00:23:56,560
Speaker 1: and finance clubs, groups of on college campuses spread across America.

395
00:23:56,640 --> 00:23:59,399
Speaker 1: Some of the best and brightest minds. There's a twenty

396
00:23:59,480 --> 00:24:02,960
Speaker 1: the thirty slide presentation. Quite frankly, even at my age

397
00:24:02,960 --> 00:24:05,800
Speaker 1: and and uh at my experience level, some of these

398
00:24:05,800 --> 00:24:08,080
Speaker 1: things are way over my head. Many of the speakers

399
00:24:08,160 --> 00:24:11,120
Speaker 1: sometimes and even President Kapitlan will remark Hey, those were

400
00:24:11,160 --> 00:24:13,879
Speaker 1: fantastic questions. I wish I was shocked in surprise, right

401
00:24:14,160 --> 00:24:17,000
Speaker 1: or um. It serves as a networking event, to be honest,

402
00:24:17,040 --> 00:24:20,960
Speaker 1: many of these students can obtain maybe an in or

403
00:24:21,000 --> 00:24:24,200
Speaker 1: an internship or something moving forward because they're talking with

404
00:24:24,800 --> 00:24:27,760
Speaker 1: the bust and the brightest in our industry. Hey, Brad,

405
00:24:27,800 --> 00:24:29,840
Speaker 1: thank you so much for joining us. We really appreciate

406
00:24:29,920 --> 00:24:32,760
Speaker 1: that and the best of luck for a good conference today.

407
00:24:32,920 --> 00:24:38,399
Speaker 1: Brad Repki, Senior wealth advisor at Mainstay Capital. Thanks for

408
00:24:38,440 --> 00:24:41,959
Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and

409
00:24:42,000 --> 00:24:46,080
Speaker 1: listen to interviews with Apple Podcasts or whatever podcast platform

410
00:24:46,119 --> 00:24:49,400
Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt

411
00:24:49,480 --> 00:24:53,240
Speaker 1: Miller three on False Sweeney I'm on Twitter at pt

412
00:24:53,400 --> 00:24:56,400
Speaker 1: Sweeney Before the podcast, you can always catch us worldwide

413
00:24:56,440 --> 00:24:57,320
Speaker 1: at Bloomberg Radio.