WEBVTT - BNY's Levine: Inflation Will Be Higher Than Expected 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.360 at Bloomberg dot com slash podcast. Let's get right to 0:00:23.400 --> 0:00:26.239 our next guest, Alicia Levin. She's a chief strategist and 0:00:26.360 --> 0:00:29.920 managing director for b n y Melon Investment Management about 0:00:29.960 --> 0:00:33.839 two point two trillion dollars of assets under management. Alicia 0:00:34.080 --> 0:00:37.400 is speaking today on the Financial markets panel at the 0:00:37.440 --> 0:00:42.040 Engage Undergraduate Investment Conference, so we're fortunate to get her time. 0:00:42.200 --> 0:00:45.680 Alicia a lotted the discussion from market participants really over 0:00:45.720 --> 0:00:50.159 the last several weeks, in particular has been inflation and 0:00:50.200 --> 0:00:53.280 the impact on financial assets and where you want to 0:00:53.320 --> 0:00:56.920 be with your portfolio and your investments. Love to get 0:00:57.000 --> 0:01:00.320 your thoughts right here, right now on inflation and kind 0:01:00.360 --> 0:01:04.240 of how that's factoring it to your calculus. So that's great. 0:01:04.280 --> 0:01:07.280 Thanks for having me almost at the noon hour exciting 0:01:07.280 --> 0:01:10.280 panel today. Um, look, I think that is that's the 0:01:10.360 --> 0:01:14.479 question of the moment, And I think what better example 0:01:14.560 --> 0:01:17.360 of the problem with inflation and inflation risk than the 0:01:17.400 --> 0:01:20.400 Suez Canal where we saw that giant tank or sitting 0:01:20.480 --> 0:01:25.640 there for about eight days choking up supply chain. And 0:01:25.720 --> 0:01:28.319 today we've got a p p I number, you know, 0:01:28.760 --> 0:01:33.200 four four point two percent year year growth on PPI prices, 0:01:33.760 --> 0:01:38.160 much higher inflation and prices than expected for goods inputs, 0:01:38.200 --> 0:01:40.440 and I think we are on a path for the 0:01:40.480 --> 0:01:45.520 next few months of much higher inflation reads than UH 0:01:45.840 --> 0:01:48.280 than we would have sought. Even though the FETE is 0:01:48.320 --> 0:01:50.840 telling us not to worry. I think the prints are 0:01:50.840 --> 0:01:53.240 going to be higher. So there are two issues. One 0:01:53.600 --> 0:01:56.760 is inflation coming and to what do central banks do 0:01:56.840 --> 0:01:59.360 about it? And the two are separate. But I think 0:01:59.400 --> 0:02:02.440 the issue of inflation is real, and I think it's 0:02:02.480 --> 0:02:04.920 going to last longer than a couple of months now. 0:02:04.960 --> 0:02:07.640 We spent so much money on it already the pandemic 0:02:08.080 --> 0:02:10.400 in terms of stimulus. But as I look at food 0:02:10.440 --> 0:02:14.680 inflation and gasoline prices, you know, it doesn't matter if 0:02:14.720 --> 0:02:18.880 they're coming from a lower UH comparison. These are still 0:02:18.919 --> 0:02:22.360 making up a much higher percentage of the incomes of 0:02:22.400 --> 0:02:25.799 the people who are hit hardest during the pandemic. Are 0:02:25.840 --> 0:02:28.000 we going to see do we need to see more 0:02:28.800 --> 0:02:32.640 federal government spending in terms of stimulus. So I don't 0:02:32.720 --> 0:02:35.720 think they're going to be able to get more stimulus 0:02:35.800 --> 0:02:39.239 for the kind of pandemic related issues. We had one 0:02:39.280 --> 0:02:42.720 point nine trillion dollars, as you know, passed very quickly, 0:02:43.400 --> 0:02:46.000 and if you think about how much money is coming 0:02:46.000 --> 0:02:49.040 to the US economy, think about the timing of this. 0:02:49.560 --> 0:02:52.600 On the one point nine one point two is going 0:02:52.639 --> 0:02:56.160 to be plowed into the economy one point two trillions 0:02:56.200 --> 0:02:59.799 by early September. So that's one point to trillion dollars 0:02:59.800 --> 0:03:06.240 in six months. That's absolutely extraordinary and that can be inflationary. Um. 0:03:06.280 --> 0:03:10.360 The question is do labor markets really adjust quickly to 0:03:10.480 --> 0:03:14.560 get people back into you know, as we reopen, demand increases, 0:03:14.560 --> 0:03:18.160 demand for services increases, candle labor markets keep up. And 0:03:18.160 --> 0:03:20.280 that's really the big question, right, do people decide to 0:03:20.320 --> 0:03:23.560 stay home and collect their unemployment benefits because it's about 0:03:23.600 --> 0:03:27.240 twenty three an hour through September six or do people 0:03:27.240 --> 0:03:30.360 go back to to you know, to working, and that's 0:03:30.480 --> 0:03:34.160 those are those are tough questions, but it really is 0:03:34.600 --> 0:03:39.960 staff forwards, higher risk of inflation in the very short term, 0:03:40.000 --> 0:03:42.320 all right, So is it the higher risk of inflation 0:03:42.320 --> 0:03:44.400 in the short term? Alicia? Is that how does that 0:03:44.840 --> 0:03:47.640 kind of coloring where you guys at B and hy 0:03:47.680 --> 0:03:51.240 melon are looking for opportunities. So this is really a 0:03:51.280 --> 0:03:53.680 great question because again the two parts are is their 0:03:53.760 --> 0:03:56.240 higher inflation we would say, yes, it's coming, and to 0:03:56.400 --> 0:03:58.760 what is the said do about it? Right? Two different things, 0:03:58.760 --> 0:04:01.640 because that's how it affects the economy. So the FED 0:04:01.720 --> 0:04:05.440 has tried with every ounce of every know f o 0:04:05.600 --> 0:04:09.040 MC member to say that they are strategiously patient and 0:04:09.040 --> 0:04:14.200 will wait to see um until we get into whether 0:04:14.280 --> 0:04:17.680 in three whether we've recovered in the labor market, and 0:04:17.720 --> 0:04:22.640 they expect inflation to normalize as we exit. Data will 0:04:22.640 --> 0:04:25.560 be noisy, and we expect and actually not to sit 0:04:25.640 --> 0:04:28.240 on their hands. We think that the market believes that 0:04:28.400 --> 0:04:32.520 this is going to happen. In addition, the inflation curved 0:04:33.000 --> 0:04:36.640 invaser investors actually are buying the FED story, which is 0:04:36.680 --> 0:04:39.479 you're going to get higher inflation in the short term 0:04:39.560 --> 0:04:42.560 and then lower inflation in the out years, and that's 0:04:42.560 --> 0:04:46.160 an inverted inflation curve. That's very unusual. We have an 0:04:46.200 --> 0:04:49.040 inverted curve because people see its short terms. The big 0:04:49.040 --> 0:04:53.680 wisp here is whether inflation expectations become unmoored right, whether 0:04:53.720 --> 0:04:56.479 they become un anchored, whether it last bombers than a 0:04:56.480 --> 0:04:59.640 couple of months of April, May June, and whether they're 0:04:59.720 --> 0:05:03.800 for future expectations so higher. And that's the big risk 0:05:03.880 --> 0:05:08.160 that would change FED policy. That's where you are. You know, 0:05:08.200 --> 0:05:10.920 we're buying the stories for now, but the real numbers 0:05:10.920 --> 0:05:14.480 are going to be coming through entire than expected. There's 0:05:14.520 --> 0:05:18.039 so much money UM in US retirement accounts tied up 0:05:18.080 --> 0:05:22.280 in stocks though, and any action from the FED would 0:05:22.680 --> 0:05:26.120 not only work to um you know, tame inflation, but 0:05:26.279 --> 0:05:30.359 also probably push the equity market down in a pretty 0:05:30.600 --> 0:05:36.520 rough way. Is the Greenspan put alive? And well, look, 0:05:36.800 --> 0:05:40.320 I think I think what the the overall tone of 0:05:40.360 --> 0:05:43.520 the market except for the last couple of weeks, that 0:05:43.640 --> 0:05:47.040 cyclicals are are the ways to play this right. So ultimately, 0:05:47.080 --> 0:05:52.080 when you have higher inflations, financials outperform, energy outperforms, industrials 0:05:52.080 --> 0:05:55.960 and materials outperform. And we think while you will have 0:05:56.040 --> 0:05:59.600 periods of consolidation and yields, we think the removal yield 0:05:59.720 --> 0:06:02.840 is simately going to be higher. Although not spiky, right, 0:06:02.880 --> 0:06:05.200 We had really spike. We had eight five basis points 0:06:05.200 --> 0:06:07.159 in the first quarter. We think the bulk of the 0:06:07.160 --> 0:06:10.160 big move is behind us, but there will be moments 0:06:10.160 --> 0:06:12.240 of doubts, and there will be moments of doubt when 0:06:12.279 --> 0:06:15.280 we get some of those nasty inflation prints. Can we 0:06:15.360 --> 0:06:18.039 still think the cick local sectors are a way to 0:06:18.279 --> 0:06:22.599 insulate portfolios from some of the damage that higher rates 0:06:22.680 --> 0:06:26.039 can do from inflation. I think you need to think 0:06:26.080 --> 0:06:30.479 about your long duration assets, which are the speculative tech assets. 0:06:30.560 --> 0:06:33.640 Um those may have a tougher time, and we know 0:06:33.760 --> 0:06:37.120 they have had tougher times as we so yield spikes 0:06:37.240 --> 0:06:40.440 sometimes eight to tend basis points in a day. I 0:06:40.560 --> 0:06:45.560 think investors should be conscious that those risks remain, and 0:06:45.960 --> 0:06:49.240 I think the market is somewhat sniffing out could there 0:06:49.240 --> 0:06:52.440 be a policy mistake here? Right? Well, the FED sit 0:06:52.520 --> 0:06:56.320 on its hand so long that it may get runaway inflation. 0:06:56.360 --> 0:06:58.160 We're not seeing it in the numbers yet, but you're 0:06:58.160 --> 0:07:02.040 starting to have that conversation with investors. So I still 0:07:02.080 --> 0:07:05.320 be insticklable. I still like the small caps. You are 0:07:05.400 --> 0:07:08.640 going to have moments where you know your growth stocks 0:07:08.680 --> 0:07:11.880 will outperform, and we think you should be invested in 0:07:11.960 --> 0:07:17.000 those profitable growth stocks that have increasing earnings and and 0:07:17.000 --> 0:07:20.200 and not just trading on forty times revenue. And we 0:07:20.240 --> 0:07:24.600 would use bond market volatility to start and grow positions 0:07:24.640 --> 0:07:28.480 in those stocks. What do you think about the US 0:07:28.760 --> 0:07:32.040 versus Europe? You mentioned that one point two trillion dollars 0:07:32.040 --> 0:07:34.760 of US stimulus is going to be into the economy 0:07:34.760 --> 0:07:39.080 by September. As far as I know, the in comparison 0:07:39.120 --> 0:07:43.600 poultry seven and fifty billion dollar European rescue package or 0:07:43.640 --> 0:07:46.960 billion euro European rescue package. Only of that is going 0:07:47.000 --> 0:07:49.840 to go out to the countries that need it by 0:07:49.880 --> 0:07:52.760 this summer. Are they going to have to do more? 0:07:52.840 --> 0:07:58.640 Are we gonna see the European assets continue to underperform? 0:07:58.680 --> 0:08:01.200 So it's an interesting question, Shi. I think there may 0:08:01.240 --> 0:08:03.720 be pressure for the Europeans to do more on the 0:08:03.760 --> 0:08:08.600 fiscal side. Um. You know, the the ECB is absolutely 0:08:08.640 --> 0:08:12.640 adamant that it will not allow the euro to appreciate 0:08:12.720 --> 0:08:17.120 against the seller anymore. Oh, it looks like we lost 0:08:17.120 --> 0:08:19.400 Alicia there, unfortunately, but it was great to have her 0:08:19.400 --> 0:08:22.480 for the time being. Alicia Levine, chief strategist at b 0:08:22.800 --> 0:08:28.520 N y Melon Investment Management. We heard earlier from Rob Kaplan, 0:08:29.080 --> 0:08:35.360 Texas FED president, out of the Engage Undergraduate Investment Conference. UM. 0:08:35.400 --> 0:08:38.959 That's David Coudla's conference there in Michigan. Jeffrey Rosenberg is 0:08:39.000 --> 0:08:42.559 also there on the financial markets panel. He's a portfolio 0:08:42.600 --> 0:08:47.120 manager at the black Rock Systemic Multi Strategy Fund. Jeff, 0:08:47.360 --> 0:08:49.880 great to get you on the program. UM. I wonder, 0:08:49.880 --> 0:08:56.080 considering what we heard from uh from Kaplan, how how 0:08:56.120 --> 0:09:00.000 supportive of this rally do you expect the FED to remain. 0:09:00.200 --> 0:09:03.000 They want to obviously get us back to full employment. 0:09:03.360 --> 0:09:05.920 They want to well, their stated goal is to to 0:09:05.920 --> 0:09:08.319 to fight I guess inflation in some ways, but or 0:09:08.400 --> 0:09:11.600 keep price stability, maintain price stability. But now they're trying 0:09:11.600 --> 0:09:14.400 to boost inflation and it's having a great effect on 0:09:14.679 --> 0:09:19.680 financial assets as well. Yeah, you know you you talking 0:09:19.720 --> 0:09:23.120 about the FED um fighting inflation. This is a FED 0:09:23.160 --> 0:09:26.720 that's fighting inflation from below too little inflation. And the 0:09:26.760 --> 0:09:32.559 implication for supporting the rally is that is providing historic 0:09:32.640 --> 0:09:36.600 amount of accommodation, you know, first for the fighting for 0:09:36.720 --> 0:09:39.880 fighting COVID, but then the second order impact of COVID 0:09:40.000 --> 0:09:43.040 on inflation is that it is making it that much 0:09:43.080 --> 0:09:46.239 harder for the FED to achieve its its new policy objective. 0:09:46.559 --> 0:09:50.480 And so the FED is absolutely here in a new 0:09:50.559 --> 0:09:55.760 operating mode, and that operating mode has removed preemptive FED 0:09:55.840 --> 0:10:01.280 tightening for tightening conditions in the labor mark. They basically said, 0:10:01.280 --> 0:10:03.880 we're only going to look at one side of the 0:10:03.920 --> 0:10:07.400 mandate when it comes to tightening. We're not going to 0:10:07.480 --> 0:10:10.680 look at labor markets as an indication that we should 0:10:10.679 --> 0:10:15.240 be pulling back from our accommodation. And that's absolutely very 0:10:15.280 --> 0:10:19.320 supportive in terms of highly accommodative financial conditions, which supports 0:10:19.400 --> 0:10:21.760 Jeff the rally. To your question, the reason I ask 0:10:21.960 --> 0:10:25.240 is that this morning on our m Live blog, um 0:10:25.320 --> 0:10:27.800 Wes Goodman wrote a story saying the bull run has 0:10:27.920 --> 0:10:31.679 years to go thanks to our beloved baby boomers. You 0:10:31.679 --> 0:10:34.560 would have thought that they shifted into bonds at the 0:10:34.720 --> 0:10:38.000 end of their you know, working life, but estimate show 0:10:38.080 --> 0:10:41.680 retirement accounts of US households on thirty percent of the 0:10:41.760 --> 0:10:46.320 nation's corporate equity and so, um, you know, with this 0:10:46.520 --> 0:10:49.600 entire generation invested in stocks, the FED has no other 0:10:49.679 --> 0:10:52.200 choice but to remain supportive. At least that's how his 0:10:52.280 --> 0:10:59.400 theory goes. Yeah, look, the FED is going to measure 0:10:59.480 --> 0:11:04.320 its togree of supportiveness based on its economic outcomes and 0:11:04.320 --> 0:11:09.560 its economic objectives. Financial conditions are part of that now 0:11:09.640 --> 0:11:13.160 in in the in the post first GFC crisis environment, 0:11:13.160 --> 0:11:16.720 and certainly in the post COVID crisis environment. So it's 0:11:16.760 --> 0:11:19.520 not a stated aim, but it's it's it means to 0:11:19.600 --> 0:11:22.920 achieving that aim, and so that keeps the FED very 0:11:23.000 --> 0:11:27.120 much supportive. We haven't had a situation, however, where the 0:11:27.160 --> 0:11:32.679 FED has been challenged by potential conflict within its objectives. 0:11:32.880 --> 0:11:36.240 All of the objectives have lined up on the same side. 0:11:36.600 --> 0:11:41.160 Too little inflation, you need more accommodation. Too little growth, 0:11:41.400 --> 0:11:45.760 you need more accommodation. Tightening of financial conditions, you need 0:11:45.840 --> 0:11:50.560 more accommodation. The future will be one where the FED 0:11:50.880 --> 0:11:54.439 may see a period where some of those objectives are 0:11:54.480 --> 0:11:57.040 no longer all lining up in the same way, and 0:11:57.080 --> 0:12:00.400 the uncertainty for the market will be well, how going 0:12:00.480 --> 0:12:04.480 to balance and manage the conflict between those objectives. So 0:12:04.600 --> 0:12:08.000 far that that has been pretty clear to say we're 0:12:08.040 --> 0:12:14.640 going to preference financial conditions and achieving inflation over any 0:12:14.679 --> 0:12:18.720 of the other concerns. Concerns such as financial stability, on 0:12:18.720 --> 0:12:21.640 a long run basis in terms of too much accommodation, 0:12:21.760 --> 0:12:25.680 or asset price bubbles, financial stability concerns, all of those 0:12:25.720 --> 0:12:28.680 have been secondary. So that's where you get to these 0:12:28.760 --> 0:12:31.720 kind of statements that the FED will always be there. 0:12:31.880 --> 0:12:35.840 I think we're going to be perhaps in an environment 0:12:35.920 --> 0:12:40.679 where in a rising inflationary environment that isn't transitory, that 0:12:40.800 --> 0:12:44.280 FED faces a different challenge. The market will face that challenge, 0:12:44.440 --> 0:12:48.080 But right now that remains a pretty uncertain call as 0:12:48.200 --> 0:12:50.000 whether or not we're going to get to that point. 0:12:50.440 --> 0:12:54.800 For now, the FED has been able to remain entirely 0:12:54.800 --> 0:12:59.160 accommodative because they face no conflict in their multiple objectives. 0:12:59.400 --> 0:13:01.920 All right, Jeff, Given where we think the FED is, 0:13:02.120 --> 0:13:06.880 where are you guys at black Rock finding value here? Well? 0:13:07.000 --> 0:13:11.560 Value in value? Uh? You know, I'm on the fixed 0:13:11.600 --> 0:13:15.199 income side, But we certainly take a broad market perspective 0:13:15.280 --> 0:13:19.120 in terms of investing, and in many of the investment 0:13:19.120 --> 0:13:23.280 strategies we run, we run cross market. Uh. You know. 0:13:23.480 --> 0:13:30.160 A long period of falling real interest rates reflective of 0:13:30.200 --> 0:13:36.240 secular stagnation, falling term premium have certainly benefited the secular 0:13:36.280 --> 0:13:40.560 growth story um to the point where valuations have become 0:13:40.760 --> 0:13:44.920 secondary uh, and now there's a real challenge in the 0:13:45.000 --> 0:13:48.640 market around that viewpoint. It starts with the fundamental top 0:13:48.679 --> 0:13:51.480 down macro debate that we were just having in terms 0:13:51.559 --> 0:13:55.400 of does the FED face the future environment where they 0:13:55.440 --> 0:13:58.560 are achieving their objectives? But along the way and where 0:13:58.600 --> 0:14:01.680 we are right now, is that is significantly change the 0:14:01.800 --> 0:14:06.520 relative value in some of the growth stock story versus 0:14:06.520 --> 0:14:11.120 the value stock story, where that rising potential of breaking 0:14:11.120 --> 0:14:15.800 out of thirty years of falling interest rates secular stagnation 0:14:16.120 --> 0:14:19.400 starts to benefit that that value perspective. On the fixed 0:14:19.400 --> 0:14:24.160 income side of the value perspective, UM, there's uh not 0:14:24.440 --> 0:14:30.640 much value left, uh. Spreads across our credit markets, headlines 0:14:30.680 --> 0:14:34.440 in Bloomberg highlighting you know, tight levels of high yield 0:14:34.480 --> 0:14:37.920 spread predating the global financial crisis going back to two 0:14:37.920 --> 0:14:41.440 thousand and seven. So it's hard to find value, uh 0:14:41.560 --> 0:14:44.440 in the fixed income market, the way that you can 0:14:44.520 --> 0:14:47.720 still find some value in the equity market. All right, Jeff, 0:14:47.760 --> 0:14:49.760 thank you so much for joining us. We always appreciate 0:14:49.800 --> 0:14:52.880 getting your perspective here. Jeffrey Rosenberg, portfolio manager of the 0:14:52.880 --> 0:14:59.960 black Rock Systematic Multi Strategy Fund at Blackbird Molly should 0:15:00.280 --> 0:15:04.440 joins us Bloomberg Technology reporter Molly, Um, did it ever 0:15:04.520 --> 0:15:08.640 look like the unions we're going to take this? Hi? Um. 0:15:08.680 --> 0:15:11.360 I think in the very beginning it was a little 0:15:11.360 --> 0:15:13.560 bit close. It was hard to see maybe which way 0:15:13.560 --> 0:15:15.400 it would go. But as soon as they started counting 0:15:15.400 --> 0:15:19.200 the vote, Amazon quickly pulled ahead. They spent about three 0:15:19.200 --> 0:15:22.600 hours counting the votes yesterday and Amazon was ahead UM 0:15:22.640 --> 0:15:26.200 at the close yesterday evening, and this morning, just in 0:15:26.240 --> 0:15:29.520 the past hour and a half or so, Um, Amazon 0:15:29.560 --> 0:15:32.000 pulled even further ahead. And so now, like you said, 0:15:32.040 --> 0:15:35.160 they have a large majority of the of the votes 0:15:35.240 --> 0:15:37.440 here and it doesn't look like there's any way that 0:15:37.480 --> 0:15:41.560 the the union side could could catch up at this point. Molly, 0:15:41.640 --> 0:15:44.880 what do you think both sides again here Amazon in 0:15:45.360 --> 0:15:49.120 the unions will learn from what happened in Alabama? Is 0:15:49.160 --> 0:15:52.960 this just the beginning what will likely be more efforts 0:15:53.040 --> 0:15:57.320 to unionized parts of Amazon dot Com. It will definitely 0:15:57.320 --> 0:16:00.320 be interesting to see. It's, you know, give in the 0:16:00.400 --> 0:16:03.720 fact that you know, Amazon did win here. This is 0:16:03.800 --> 0:16:07.000 kind of the status quo going forward with them. They've 0:16:07.040 --> 0:16:10.000 always been anti union. This was a hard effort from 0:16:10.000 --> 0:16:14.040 the beginning for the UM the retail union here in Alabama. 0:16:14.160 --> 0:16:17.240 But given the Biden administration support for unionization and the 0:16:17.840 --> 0:16:21.000 support for workers rights to unionize, they could get a 0:16:21.040 --> 0:16:24.400 little extra federal support in the movement across the country 0:16:24.440 --> 0:16:28.120 and try this again in other um, in other factories 0:16:28.160 --> 0:16:31.120 at Amazon and other warehouses and factories that Amazon has 0:16:31.200 --> 0:16:35.160 across the country. Molly, to some extent, you are You're 0:16:35.160 --> 0:16:36.920 a tech reporter, but you're also kind of a gig 0:16:36.960 --> 0:16:40.080 worker reporter, right, because a lot of these tech companies 0:16:40.240 --> 0:16:44.160 rely on gig workers, and there's been some push for change, 0:16:44.200 --> 0:16:48.120 but in the big headline cases, the gig worker seems 0:16:48.120 --> 0:16:50.880 to have lost out. I'm thinking about Uber and California, 0:16:50.960 --> 0:16:53.760 which is I think doubly interesting because it's a really 0:16:53.760 --> 0:16:57.400 an historically left leaning state, right, and they still voted 0:16:57.520 --> 0:17:00.520 against giving those workers the same kind of it's that 0:17:00.840 --> 0:17:05.920 salaried workers have. Why is this, I mean, well, the 0:17:05.920 --> 0:17:11.840 the Yeah, the gig worker situation is challenging and interesting 0:17:11.920 --> 0:17:14.879 for for many reasons. I mean, in this case, these 0:17:14.960 --> 0:17:18.240 are I wouldn't say that you can categorize them necessarily 0:17:18.240 --> 0:17:20.639 as gig workers at the factory they have you know, 0:17:20.720 --> 0:17:23.960 they do have some uh they have regular hours and 0:17:24.280 --> 0:17:27.120 you know, they're basically part time or even full time workers, 0:17:27.119 --> 0:17:29.000 so it's a little bit of a of a different 0:17:29.080 --> 0:17:34.119 situation here. So Molly, it's um, you know, one point 0:17:34.200 --> 0:17:39.320 three million employees at Amazon. This is it's just an 0:17:39.359 --> 0:17:42.320 area that I would think you needs can't ignore. So 0:17:42.680 --> 0:17:46.000 what's the next steps do we think? Well, they're already 0:17:46.160 --> 0:17:51.960 making UM noise about challenging this, uh this this vote here, 0:17:52.240 --> 0:17:56.280 saying that Amazon you know, put pressure on on workers 0:17:56.320 --> 0:18:02.800 in mandatory information sessions, trying to you know, it's maybe 0:18:02.800 --> 0:18:06.719 not explicitly threatened them, but definitely lean hard on reasons 0:18:06.720 --> 0:18:09.399 why they should not join the union. And they sided 0:18:09.520 --> 0:18:12.000 Amazon putting up a mailbox on the site of the 0:18:12.000 --> 0:18:16.000 warehouse UM as kind of a threatening gesture to workers. 0:18:16.000 --> 0:18:19.880 So they're definitely already saying that they're going to um 0:18:20.040 --> 0:18:22.320 go after, you know, to to challenge this vote. So 0:18:22.359 --> 0:18:23.920 I have no doubt that there will be a whole 0:18:23.920 --> 0:18:27.680 series of legal challenges and issues going forward from this. 0:18:27.800 --> 0:18:31.000 So this probably isn't just an open end shut vote today, 0:18:31.040 --> 0:18:33.280 so we'll see some more challenges to that going forward 0:18:33.320 --> 0:18:35.560 for sure. All Right, Molly, thank you so much for 0:18:35.640 --> 0:18:39.000 joining us. It's really a fascinating story. Developing here at 0:18:39.000 --> 0:18:43.200 Amazon dot com. Molly Shoots, us technology editor. Uh about 0:18:43.200 --> 0:18:46.400 Bloomberg again, I'm sorry talking about Amazon, and uh, it's 0:18:46.480 --> 0:18:51.280 interesting here the in Alabama, Amazon wins this round against 0:18:51.480 --> 0:18:56.680 the union. Brad Bretti joins us. He senior wealth advisor 0:18:57.040 --> 0:18:59.920 from Mainstay Capital Management. They have three and a half 0:19:00.080 --> 0:19:03.920 billion dollars worth of assets under management out of Michigan. 0:19:03.960 --> 0:19:08.679 But more importantly, he's been working on the annual Engage 0:19:09.040 --> 0:19:13.879 Undergraduate Investment Investment Conference. As Paul was saying, it is 0:19:13.920 --> 0:19:17.800 the largest collegiate investment conference in North America and it 0:19:17.920 --> 0:19:22.000 is also sponsored by the Gate David Kudla Foundation. So um, 0:19:22.040 --> 0:19:25.960 Brad tell us about the point of the conference, where 0:19:26.040 --> 0:19:29.200 the goals of the event. Yeah, good morning, Paul, Matt. 0:19:29.359 --> 0:19:32.080 This is bread and I'm very thankful to be a 0:19:32.119 --> 0:19:34.719 part of the process. You know, David Coudla is our 0:19:34.760 --> 0:19:37.720 CEO of main State Capital Management, really has made this 0:19:37.920 --> 0:19:42.800 conference the pillar of his ongoing philanthropic endeavors. And what 0:19:42.840 --> 0:19:44.480 we're able to do is attract the bust in the 0:19:44.480 --> 0:19:48.160 brightest minds all across North North America and even globally. 0:19:48.840 --> 0:19:54.399 Students from Harvard, Yale, Stanford, Princeton, Uh, Duke Paul, I 0:19:54.400 --> 0:19:57.800 know which is uh uh you're all mo monitor to 0:19:57.800 --> 0:20:01.720 to um free nba um. But bring them in right 0:20:01.920 --> 0:20:05.359 and have them compete in a real, live stock pitch competition. 0:20:05.760 --> 0:20:08.439 This isn't um you know, a false or or a 0:20:08.440 --> 0:20:11.760 made up company. But they're able to pick uh any 0:20:11.800 --> 0:20:14.879 any company that's public. They can pitch a long or 0:20:14.920 --> 0:20:18.159 a short and dig into all the details some of 0:20:18.160 --> 0:20:20.840 the I'll be honest, some of these presentations that are given, 0:20:21.119 --> 0:20:26.280 they're fantastic and um. They get to pitch these live 0:20:26.760 --> 0:20:30.000 and they get feedback from not just a professor, but 0:20:30.280 --> 0:20:35.320 industry executive level professionals so CEOs of investment firms, private 0:20:35.320 --> 0:20:39.960 equity chief strategists, and receive real life feedback um and 0:20:40.040 --> 0:20:43.120 so quite frankly, it really serves as a launchpad um 0:20:43.280 --> 0:20:46.080 for the next generation of financial leaders, right, people that 0:20:46.080 --> 0:20:49.600 are interested in our industry and finance investment world. And 0:20:50.480 --> 0:20:53.199 they come and compete with the very best across the 0:20:53.200 --> 0:20:56.760 globe and see how they stuck up and then receive 0:20:56.840 --> 0:21:00.040 feedback in real time, like I said, and it's and 0:21:00.240 --> 0:21:02.800 it's been excellent. I've spoke to not only just partisans, 0:21:02.800 --> 0:21:05.879 we're gonna hear about when are we gonna because I 0:21:05.920 --> 0:21:08.520 want to know who's the winner and what's the stock idea. 0:21:08.520 --> 0:21:12.720 I'd love to have that kid on my show. Yeah, yeah, no, absolutely. 0:21:12.920 --> 0:21:16.280 So the actual Investment Undergraduate Conference spotun by David Koup 0:21:16.320 --> 0:21:19.359 Foundation is underway as we speak. So the final rounds 0:21:19.359 --> 0:21:21.040 are going to be held throughout today. At the very 0:21:21.119 --> 0:21:23.280 end of the day, they're going to pick a first, second, 0:21:23.320 --> 0:21:26.480 and third, and they're they're all over the board, UM 0:21:26.520 --> 0:21:28.879 as far as the different companies that are chosen. But 0:21:28.960 --> 0:21:31.359 it's not just the competition is that great. It is, 0:21:31.760 --> 0:21:34.919 but during the entire event, David's able to bring together 0:21:35.440 --> 0:21:38.640 UM Federal Reserve officials. As you guys mentioned previously, you're 0:21:38.680 --> 0:21:40.960 Bloomberg's very own Kathleen Hayes is gonna be going live 0:21:41.200 --> 0:21:45.440 very shortly with Federal Reserve Bank of Dallas President Robert Kaplan. Um. 0:21:45.560 --> 0:21:47.600 Later on in the day, we have an executive member 0:21:47.640 --> 0:21:50.080 of Mainstay Capitals team, Michael Braza, will be interviewing to 0:21:50.160 --> 0:21:53.240 have a fireside chat with Melody Hobson, President co CEO 0:21:53.440 --> 0:21:57.080 Arial Investments, Board chair of Starbucks, on the JP Morgan Board, 0:21:57.080 --> 0:22:00.199 many many other roles. UM but it's able to and 0:22:00.280 --> 0:22:03.000 there's questions and answer sessions. These aren't just watching people 0:22:03.160 --> 0:22:06.800 you know on TV on YouTube, interacting directly with these 0:22:06.800 --> 0:22:11.440 officials that quite frankly, it energizes a eighteen, nineteen twenty 0:22:11.520 --> 0:22:15.200 year old and my my myself, uh, at my age 0:22:15.280 --> 0:22:17.040 in my role, I'm very excited to be a part 0:22:17.080 --> 0:22:19.200 of it. Um. I can only imagine as a young 0:22:19.840 --> 0:22:25.600 uh just you know, double it, but uh, as a 0:22:25.720 --> 0:22:28.280 eighteen nineteen twenty year old right to be able to 0:22:28.280 --> 0:22:31.440 hear from somebody in those different roles. Uh, it really 0:22:31.440 --> 0:22:34.200 just serves as a launchpad um to project and because 0:22:34.280 --> 0:22:37.480 let's face it, these kids, right are the next people 0:22:37.480 --> 0:22:41.359 in our industry, in the media industry, running hedge funds, 0:22:41.400 --> 0:22:45.040 investment companies and the like. So very excited, all right, Brad. 0:22:45.119 --> 0:22:49.000 So obviously this year is different for all of us here. Uh, 0:22:49.080 --> 0:22:52.479 your conference this year is virtual. Tell us about some 0:22:52.520 --> 0:22:55.879 of the you know how that's going. Yeah, it is, 0:22:56.000 --> 0:22:59.000 so obviously we this is an annual event and David's 0:22:59.000 --> 0:23:02.520 actually been putting on and involved heavily with investment conferences 0:23:02.560 --> 0:23:04.919 for the better part of a decade. It's usually always 0:23:04.920 --> 0:23:08.159 in person. Obviously, with everything going on throughout the country, 0:23:08.200 --> 0:23:11.240 especially here in Michigan. Um, it is a virtual event, 0:23:11.480 --> 0:23:15.400 but quite frankly, it's been able to attract even more participation. 0:23:15.440 --> 0:23:17.960 We have a group joining us from the Republic of Kazakhstan. 0:23:18.359 --> 0:23:22.439 We have multiple Canadian groups and competitors that are joining it. 0:23:22.520 --> 0:23:25.280 So it's nice. Um, you know, I think we're all 0:23:25.320 --> 0:23:29.800 getting more acclimated to zoom or to a virtual interaction 0:23:29.840 --> 0:23:32.080 than we were maybe a year or so ago. UM, 0:23:32.160 --> 0:23:34.480 So we're not gonna let anything slow us down. Engage 0:23:34.480 --> 0:23:36.480 is going to march forward. Have you seen any of 0:23:36.520 --> 0:23:41.159 the pitches so far? Has anything moved you? Uh? You 0:23:41.160 --> 0:23:43.880 know what? Here's honestly what's moved. The teams are made 0:23:43.920 --> 0:23:46.840 up of four or five individuals, but these are the 0:23:46.880 --> 0:23:51.520 spokespersons for their respective college. There are stock pitch clubs 0:23:51.520 --> 0:23:56.560 and finance clubs, groups of on college campuses spread across America. 0:23:56.640 --> 0:23:59.399 Some of the best and brightest minds. There's a twenty 0:23:59.480 --> 0:24:02.960 the thirty slide presentation. Quite frankly, even at my age 0:24:02.960 --> 0:24:05.800 and and uh at my experience level, some of these 0:24:05.800 --> 0:24:08.080 things are way over my head. Many of the speakers 0:24:08.160 --> 0:24:11.120 sometimes and even President Kapitlan will remark Hey, those were 0:24:11.160 --> 0:24:13.879 fantastic questions. I wish I was shocked in surprise, right 0:24:14.160 --> 0:24:17.000