Speaker 1: This is Bloomberg Business Wait inside from the reporters and
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Speaker 1: Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: All right, everybody, it is a fed Wednesday. It's also
Speaker 2: still we're thick in the earning season. Qualcom out the
Speaker 2: stock is up about two point five percent here in
Speaker 2: the after market. So the Qualcom forecast meeting estimates, giving
Speaker 2: that revenue forecast for the current quarter that was in
Speaker 2: line with analyst estimates, help by a recovery market for
Speaker 2: smartphone ships. We know that they're moving into AI areas.
Speaker 2: They're also looking into the PC area. But when it
Speaker 2: comes down to it, it's their bread and butter and
Speaker 2: then some it's all about those smartphoneeships.
Speaker 3: Analyst wanted to see nine point three to six billion.
Speaker 3: When it came to a fiscal second quarter revenue sales
Speaker 3: of the company said will be eight point nine billion
Speaker 3: to nine point seven billion, excluding certain items, probably two
Speaker 3: twenty to forty a share in the current quarter, versus
Speaker 3: an average projection of two dollars and twenty six cents
Speaker 3: per quarter.
Speaker 4: We got a great voice.
Speaker 1: On this, we do.
Speaker 2: Lindwan in the studio making her way here, Managing editor
Speaker 2: of Technology Global Security a Bloomberg News. She's here in
Speaker 2: our interactive booker's studio. Okay, first gut reaction, how they
Speaker 2: do We were wrong?
Speaker 5: We were all wrong. I feel like it was just
Speaker 5: like a week ago. We were like AI winners, not
Speaker 5: AI losers. And then you have Qualcomm, and Qualcomm is
Speaker 5: like as bored as you can get. They're like in headphones.
Speaker 5: They're trying to make it into cars, right, They're like
Speaker 5: in the non sexy and they may be the only
Speaker 5: ones in the past twenty four hours.
Speaker 2: Actually they're trying to get into what matters is what
Speaker 2: they are in.
Speaker 5: Yeah, it's forming the narrative. Over the last twenty four hours.
Speaker 5: You saw Microsoft earnings disappointed on AI, Alphabet disappointed on AI.
Speaker 5: AMD has been trying to make itself like an AI
Speaker 5: chip maker like Nvidia. They disappointed on AI. And then
Speaker 5: here it comes Qualcomm smartphone recovery headsets. Like that's interesting.
Speaker 3: Okay, So I'm glad you saw said this because Christiano Aman,
Speaker 3: who is the president's CEO of Qualcomm said that they're
Speaker 3: not just of course interested in handsets and automotive that
Speaker 3: you mentioned, but he said, we're gonna build on the
Speaker 3: momentum with our leading snap Dragon platforms and tech differentiation
Speaker 3: and connectivity, computing on device generative aim.
Speaker 4: Do we care about that?
Speaker 5: Well, I mean, you see how diversified he's getting right there.
Speaker 4: Do you see that diversified now?
Speaker 5: Or that's where they're getting. I mean, like they are
Speaker 5: the company that is known for putting there, for putting
Speaker 5: there a lot of different baskets, and you know a
Speaker 5: lot of ones that are like rooted in emerging technologies
Speaker 5: that haven't yet proven themselves out. But in some ways
Speaker 5: this quarter has been good for that because you're not
Speaker 5: you don't have your eggs all in one basket like AI,
Speaker 5: and like the revenue outlook and the profit outlook are.
Speaker 5: You can't say they're great, but the fact that they're
Speaker 5: not bad compared to what was reported yesterday afternoon is
Speaker 5: what's bolstering their stock today.
Speaker 2: Well, to be fair of that range, I'm like doing
Speaker 2: quick math here about that two quarter revenue out look
Speaker 2: eight point nine billion to nine point seven the estimates
Speaker 2: nine point three six. I mean that's pretty much exactly.
Speaker 5: It's like they're not blowing anything out of the water,
Speaker 5: and so like exactly, that's something about where tech investors
Speaker 5: are right now, which is like they're okay with not bad,
Speaker 5: Like they're okay, like they don't have to be blown
Speaker 5: under the water. But it's in there, right, the estimates
Speaker 5: in line.
Speaker 3: Yeah, I think that's fair to a certain extent, given
Speaker 3: the run up in the Nasdaq one hundred and the
Speaker 3: run up in the S and P five hundred, and that.
Speaker 3: You know, it seems like Carol, almost every other day
Speaker 3: we're talking about new records, and some of these individual
Speaker 3: companies were talking new records.
Speaker 2: Yeah, that's so, well, so valuate are you talking valuation?
Speaker 4: Talking valuations?
Speaker 5: Yeah, so we're coming back to earth on some of you.
Speaker 6: You think.
Speaker 3: So, it's a lot of this stuff was priced in again,
Speaker 3: not asking you for I don't worry.
Speaker 2: Well, it's a twenty one pe if we're looking pe
Speaker 2: if not quite sixteen, that seems reasonable.
Speaker 5: It's it feels reasonable, And I feel like investors are
Speaker 5: kind of like coming around to the idea that they
Speaker 5: just need to be in the reasonable range now more realistic,
Speaker 5: like less you know, euphoria and hype. I mean, I
Speaker 5: think this is like the first real quarter honestly where
Speaker 5: investors are kind of like, all right, great, we're over
Speaker 5: the knee jerk reaction of AI. Now show us where
Speaker 5: it's actually contributing to your bottom line and being Qualcomm
Speaker 5: being like the diversified player that they are, They're like, look,
Speaker 5: we don't have just AI to offer, and we're often
Speaker 5: good bread and butter results that are in line, like
Speaker 5: we're a steady, reliable company. I mean, that's the message
Speaker 5: that they're sending.
Speaker 2: Because there was I think worries that you know, smartphone
Speaker 2: demand has been kind of sluggish. Yeah, so how do
Speaker 2: you cross that thinking with what we got from Qualcom?
Speaker 5: I think I think that'll be really interesting. Like the
Speaker 5: big telling moment is going to be tomorrow Apple, right, Apple? Yeah,
Speaker 5: Like that's it says something about Apple. And you know,
Speaker 5: also what says something about Apple is when Verizon and
Speaker 5: AT and T and T Mobile get report it, they're
Speaker 5: usually trying to steal each other's share. This time around,
Speaker 5: they all reported gains in new wireless customers. So like
Speaker 5: maybe Qualcom, with all the telecoms, we'll say something about
Speaker 5: tomorrow's Apple. I am not one to make forecasts. I
Speaker 5: don't make pario connection.
Speaker 3: There is a connection we should know. Shares Apple in
Speaker 3: the after hours are up about seven tenths of one percent.
Speaker 3: So then can we say anything about the health of
Speaker 3: the PC industry and the health of the smartphone market
Speaker 3: in general? Apple notwithstanding, I mean, Apple is certainly a
Speaker 3: big player in both of those.
Speaker 4: By reading into Qualcom's results, I.
Speaker 5: Mean, Qualcomm certainly did not signal a rebound. It just
Speaker 5: signaled health, right and stability. And if you look at
Speaker 5: the other chips earnings thus far, granted we haven't gotten
Speaker 5: in video back and some of the others, but if
Speaker 5: you look at them thus far, it pains a very
Speaker 5: nuanced picture. I'm not ready to declare that we are
Speaker 5: over the chip's glut. I'm not ready to say that.
Speaker 5: I don't think that's what the earnings have panned out
Speaker 5: to say.
Speaker 7: Either.
Speaker 2: It's cross corn So what was it ASML that was
Speaker 2: like off the charts, and then we.
Speaker 5: Had a md Texas Instruments was right, yeah, Blackluster.
Speaker 6: Yeah, you know.
Speaker 2: It's interesting too. I'm look at quam, Tim knows this
Speaker 2: like one of my favorite functions on the Bloomberg is
Speaker 2: the supply chain, and I'm just you mentioned Apple, Like
Speaker 2: twenty seven percent of Qualcom's revenue is coming from Apple,
Speaker 2: about twenty one percent from Samsung. I mean watching that right,
Speaker 2: like about six percent.
Speaker 3: But how consistent is the Apple revenue moving forward given
Speaker 3: that Apple wants to do more of this stuff in house, Like,
Speaker 3: can Qualcomm still rely on Apple moving forward? That's a
Speaker 3: good question and maybe maybe I got asked Mark German
Speaker 3: about that.
Speaker 5: You'll tell you that Apple is like very much in
Speaker 5: the business of diversifying flight chain and getting all and there's.
Speaker 3: Been there's been some fighting between Apple and and.
Speaker 5: You know, and there's been some fighting between Apple and
Speaker 5: some of its other sources, like broad So I can't
Speaker 5: say where that relationship is going. I mean, clearly all
Speaker 5: of these big tech companies are starting to do a
Speaker 5: lot in house, both by way of like trying to
Speaker 5: invest in manufacturing and chips design. So we'll see where
Speaker 5: that goes. I mean, maybe they'll offer up some commentary
Speaker 5: about it. And this earning is called today.
Speaker 2: Well that's what I wanted to get too, So okay,
Speaker 2: we're gonna hear from them probably any moment. Now, what
Speaker 2: are top of mind questions for the Qualcom C suite.
Speaker 5: Rebound is going to be the big one for smartphones, Like, yeah,
Speaker 5: does that mean a rebound of smartphones? But remember that
Speaker 5: they also have a very big market in headsets, especially
Speaker 5: in Asia, Like Asia is a big market for them,
Speaker 5: So people are going to want to know whether there
Speaker 5: is strength there and whether there's going to be a
Speaker 5: recovery and demand there. I mean, clearly people are going
Speaker 5: to want to know, like how the telecom sales like
Speaker 5: correlate into demand for them. I think that's going to
Speaker 5: be the big question for qualk and AI AI AI
Speaker 5: all right.
Speaker 2: AI, see it's still important, It's still important. All right,
Speaker 2: Linda Wan, thank you so much. We know it's a
Speaker 2: busy day. Managing Editor of Technology and Global Cybersecurity. A
Speaker 2: really great voice for us to rely on as these
Speaker 2: earnings come down here at Bloomberg News. She joins us,
Speaker 2: of course, in studio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: Connect One Bank Corp. Reported earnings last week fourth quarter
Speaker 2: gap EPs one penny better than analyst consensus. Revenue a
Speaker 2: little bit of a miss, sales coming in at sixty
Speaker 2: one point eight two million versus an analyst estimate tim
Speaker 2: of sixty three point zero three million.
Speaker 4: Okay.
Speaker 3: Following earnings, three analysts raising their price targets. Shares of
Speaker 3: Connect One have rallied nearly fifty percent since October twenty seventh,
Speaker 3: the stock up two point four percent year to date
Speaker 3: versus a game of seven tens of one percent for
Speaker 3: the KIRE the SNP Regional bank ETF All.
Speaker 2: Right, so back with us on the business and what
Speaker 2: he describes as the new normal. Frank Sorentino, founder, chairman
Speaker 2: and CEO at the new Jersey base and publicly held
Speaker 2: Connect One Bank Corp. To joining us from West Palm Beach, Florida. Hey,
Speaker 2: Frank's so good to have you here with us. Welcome back,
Speaker 2: Happy New Year. Did the FED get it right today?
Speaker 2: Why or why not?
Speaker 4: Happy new Year? And everybody great to be back.
Speaker 7: And I think the Fed did exactly what we all
Speaker 7: in the banking industry expected that they would do. You
Speaker 7: Inflation is still a concern of theirs. There's still some
Speaker 7: work to do on the balance sheet. They reiterated their
Speaker 7: stance that they aren't going to continue their QT program
Speaker 7: and continue to take dollars off their balance sheet, and
Speaker 7: they're going to sit pat with rates until they see
Speaker 7: data that confirms that inflation is absolutely under control. And
Speaker 7: with the strong employment numbers that we keep seeing month
Speaker 7: after month, they're not getting that data as quickly as
Speaker 7: everyone else would like to see it. Right, everyone wants
Speaker 7: to see interest rates come down. I think we're going
Speaker 7: to see them in this range of altitude for quite
Speaker 7: a while.
Speaker 3: Well, that's exactly where I want to go with this,
Speaker 3: because you guys do a ton with real estate and
Speaker 3: construction and small business, So remind everybody about your business mix,
Speaker 3: exposure to sectors, and more importantly, what you're seeing out
Speaker 3: there right now and what you project to see in
Speaker 3: the next few months.
Speaker 6: You know.
Speaker 7: I'm not sure if it was the last time I
Speaker 7: was on or a couple of times ago, but I
Speaker 7: someone asked me what I thought the economy was going
Speaker 7: to look like as we got into the end of
Speaker 7: the year and into twenty four and I said robust,
Speaker 7: and everybody so to lost it. I remember that, but
Speaker 7: that's but that is the sentiment when we here connect
Speaker 7: one speak to our clients and they talk about business
Speaker 7: opportunities in the environment in which we're in. Everyone, I
Speaker 7: don't want to say they're bullish, but they're optimistic about
Speaker 7: the future. And yes, interest rates are certainly higher than
Speaker 7: where they were two years ago, three years ago, five
Speaker 7: years ago, but let's let's not forget that was an
Speaker 7: abnormal place. Zero interest rates really don't exist for any
Speaker 7: period of time in any economy. And actually the interest
Speaker 7: rate environment we're in today, but for the inverted nature
Speaker 7: of the curve, is more normal than what we've seen
Speaker 7: in the last ten or fifteen years. So look, I believe,
Speaker 7: and you know, we have these conversations with our clients.
Speaker 7: If you can't make money in your business with a six,
Speaker 7: seven or eight percent interest rate a true cost of money,
Speaker 7: then something might be wrong other than the interest rates.
Speaker 4: That's interesting.
Speaker 7: Our homebuilders are seeing that, our manufacturers are seeing that,
Speaker 7: and other segments that we're involved in are seeing that
Speaker 7: they can actually make money, They can attract good talent,
Speaker 7: they can get capital at these interest rates and still
Speaker 7: make money.
Speaker 2: So that when you hear the news about New York
Speaker 2: Community Bank Corp, also another regional bank player of record
Speaker 2: forty six incher day loss or haircut it its share
Speaker 2: price after reporting a surprise lost time to deteriorating credit quality,
Speaker 2: and it cut to its dividend as it's getting ready
Speaker 2: to stricter capital requirement. Is that a one off? Is
Speaker 2: this one of those folks who are like, why can't
Speaker 2: you make money in this environment? What does that say?
Speaker 2: And are you seeing any signs of that?
Speaker 1: Look?
Speaker 7: I think there are a lot of things going on
Speaker 7: in that story that you would have to really parse
Speaker 7: and get under the cover of. They bought a large
Speaker 7: defaulted portfolio through the FDIC from Signature Bank. They are
Speaker 7: mostly a single family I'm sorry, a multi family lender
Speaker 7: in the New York City market. They had a fairly
Speaker 7: good sized office exposure. They are approaching or just over
Speaker 7: the one hundred billion dollar mark, which puts them in
Speaker 7: a different category from a regulatory exposure. So you add
Speaker 7: all of those things up, none of those things are
Speaker 7: actually a great place to be at the moment you
Speaker 7: put them all together. I'm just not sure. I don't
Speaker 7: know enough and really wouldn't want to comment without having
Speaker 7: more specifics around all.
Speaker 6: Of those facts.
Speaker 7: But when you add that string of things up, it's
Speaker 7: no one that they're having some challenges in the.
Speaker 3: Marketplace because you know the sector so well. Frank, I'm
Speaker 3: wondering if you see the problems of New York Community
Speaker 3: New York Community Bank Corp. Spreading potentially to other banks
Speaker 3: out there.
Speaker 7: Look, we've been talking for a long time about issues
Speaker 7: within the within the real estate space. And if you
Speaker 7: recall if we went back, you know, two or three
Speaker 7: years ago, even before COVID, you know, retail was a
Speaker 7: really bad four letter word, and nobody, anybody that had
Speaker 7: exposure in retail. We had to spend an inordinate amount
Speaker 7: of time and we spoke on this program about retail
Speaker 7: exposure in banks.
Speaker 4: Today, retail is.
Speaker 7: One of the strongest segments in commercial real estate.
Speaker 6: It's ready.
Speaker 7: Some of the vacancy rates there are at the lowest
Speaker 7: they've been in thirty years. So, you know, there's a
Speaker 7: constant refreshment when it comes to real estate and real
Speaker 7: estate uses. As we went through COVID and came out
Speaker 7: of COVID, office became a problem. All office no, not
Speaker 7: really individual office spaces, certain types of office B class,
Speaker 7: C class you know, maybe a central business district office
Speaker 7: where where vacancy rates are the lowest. So again you've
Speaker 7: got to really parse the numbers and dive into what's happening.
Speaker 7: Same thing now is going on with multifamily. Multifamily everyone
Speaker 7: thinks is a problem well by itself, but it really isn't.
Speaker 7: It's where that you have rent stabilized multifamily. So the
Speaker 7: banks that have larger portfolios of rent stabilized are going
Speaker 7: to have more issues and challenges, right and those that
Speaker 7: don't won't.
Speaker 2: We talked about the different tiers of real estate. It's
Speaker 2: really important. Having said that, you know, Frank your you
Speaker 2: know your company's shares also got caught in the New
Speaker 2: York Community Bankcorp downdraft down four and a half percent
Speaker 2: on that news as well. Here's a moment to say,
Speaker 2: are you seeing any deteriorating credit quality? Are you looking
Speaker 2: to cut your dividend? You raised it last year.
Speaker 7: We just had our earnings called last week and we
Speaker 7: announced that we were pretty optimistic about the year ahead,
Speaker 7: and we've had a track record of raising our dividend
Speaker 7: and that we would like we'd be raising our dividends
Speaker 7: in this next quarter. Our credit is near pristine, like
Speaker 7: every other bank in the industry. There are one offs
Speaker 7: and by the way, here's another you know metric that
Speaker 7: people are looking at. Charge offs for banks have been
Speaker 7: forget about historical lows. They've been at zero, which is
Speaker 7: just not just doesn't make any sense for the banking industry.
Speaker 7: We are in the risk business. There should be a
Speaker 7: certain amount of charge offs. We're still not back to
Speaker 7: what's normalized charge offs within the industry. Yet when some
Speaker 7: bank announces an extraordinary number, everybody suffers for a day
Speaker 7: or two. I don't think it's going to impact us
Speaker 7: going forward. We have a great optimistic business plan going forward.
Speaker 7: Our clients and our markets are doing well, and I
Speaker 7: feel pretty confident about what's happening in twenty four.
Speaker 2: One last question. We can feel your confidence forty seconds,
Speaker 2: So consumer business side of your business nothing. You're not
Speaker 2: seeing any kind of financial stress and just very quickly
Speaker 2: if you could.
Speaker 7: Well again, not seeing any stress is probably a little
Speaker 7: could take it a little too far. Of course, there's
Speaker 7: individual challenges in various places, and you know, look, banks
Speaker 7: need to work with their clients, and we're seeing that
Speaker 7: in a lot of places. But overall, when you look
Speaker 7: at the US economy. You look at the employment rate,
Speaker 7: the fact that people have jobs, the fact that we're
Speaker 7: manufacturing everything here in the United States, the fact that
Speaker 7: you know, we have so much going on to the positive,
Speaker 7: I see a pretty bright printing picture.
Speaker 2: D Well, listen. We always appreciate getting some time with you.
Speaker 5: Frank B.
Speaker 1: Well.
Speaker 2: Frank Sorrentino, Founder chairman CEO at connect One Bankcourt joining
Speaker 2: us on Zoom from Florida, Florida.
Speaker 4: Nice this time of here, Caryl.
Speaker 2: It's better than a grey January here in New York City,
Speaker 2: New York and New Jersey.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
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Speaker 5: Let's get to it.
Speaker 2: With our Drive to the Closed. Guests Back with us
Speaker 2: is Walter Todd, President and Chief Investment Officer of at
Speaker 2: Greenwood Capital Zosias. He is on Zoom from Greenwood, South Carolina.
Speaker 4: Or Walter.
Speaker 2: Great to have you here on this FED day. So
Speaker 2: did the Fed get it right? In your view.
Speaker 8: Yeah, I mean it's definitely a contrast to what we
Speaker 8: heard in December, honestly, So I'm a little bit confused.
Speaker 8: I'm I'm glad I wouldn't taking a drink every time
Speaker 8: the word confidence was used in the press conference.
Speaker 2: He did say good economy several times though.
Speaker 8: Yeah, yeah, no, absolutely, I think you know, obviously the
Speaker 8: Marcus a little bit disappointed. You saw the expectations for
Speaker 8: the March rate cut dropped from like sixty.
Speaker 2: Pointed about considering he did say over and over again,
Speaker 2: it's a good economy. People are working, we've got growth,
Speaker 2: inflation continues to come down. Like, what is it that
Speaker 2: you think equity investors might be getting wrong here? Or
Speaker 2: do you not think they're getting it wrong?
Speaker 6: Yeah, No, I don't think they're They're I think it wrong.
Speaker 8: I just think it's just, again, a near term reaction
Speaker 8: to an expectation, not unlike what we've seen in a
Speaker 8: lot of earnings reports this year in terms of what
Speaker 8: the expectation levels are. So we're still about five percent
Speaker 8: above that level that we were before the December meeting,
Speaker 8: so you know, we could continue to drift a little
Speaker 8: bit lower, But I mean there's forty days between the
Speaker 8: March meeting and the main meeting, So I don't think
Speaker 8: it's that big of a deal than pushing it out.
Speaker 3: Do you think it's the right move? I mean, is
Speaker 3: what you're hearing from Pedhair Powell, in your opinion, the
Speaker 3: right thing for him and the FED to be thinking
Speaker 3: about right now. Do you agree that the FED needs
Speaker 3: to see more data in order to declare victory on inflation?
Speaker 8: Personally, No, I don't think they do. And actually we
Speaker 8: heard from Powell in December saying they really didn't need
Speaker 8: more data, but yet now they do, so they need
Speaker 8: better or growing confidence or more confidence, whatever the phrase is.
Speaker 8: So you know, again, I think we're kind of splitting
Speaker 8: the hairs on the timing.
Speaker 6: You know.
Speaker 8: I think they could certainly go ahead in March given
Speaker 8: what we know today, but there's there's a big gap
Speaker 8: between today and the March meeting. So we'll get a
Speaker 8: lot more data. We'll get a lot more data this
Speaker 8: week and see if it continues, Carol.
Speaker 3: He did say we will begin rolling back type policy
Speaker 3: sometime this year, the FED chair, Well, yeah, right, sometime
Speaker 3: this year. That was like the hint that he gave
Speaker 3: for Okay, yeah, we get your message here, We're just
Speaker 3: not going to tell you that it's going to be
Speaker 3: in March.
Speaker 2: Right, Well, and I think that's fair, I mean right,
Speaker 2: I mean, Walter, it comes down to we do expect
Speaker 2: great cuts of some sort. It's just quantity and when
Speaker 2: it all starts. So that's just the question. I mean,
Speaker 2: I feel like he was very very clear of kind
Speaker 2: of taking March off the table. He is concerned about
Speaker 2: peski inflation, and he's worried about you hit it. It's
Speaker 2: like a tag game, right, tag football or something or
Speaker 2: whatever you want to call it, hitting it and then
Speaker 2: what if it goes above two percent? That is his
Speaker 2: ultimate endgame here, correct.
Speaker 8: Yeah, but you know, he's very clear about what the
Speaker 8: ultimate end game was. The only the only kind of
Speaker 8: thing I would push back on is, you know, in
Speaker 8: December it you know, it seemed very clear they were
Speaker 8: kind of where they needed to be and it's seen
Speaker 8: what they needed to see. And I think, you know,
Speaker 8: I expected him to push back at that December meeting.
Speaker 6: He didn't.
Speaker 8: So maybe this is a little bit of a replay
Speaker 8: that he gets here in January to push back on
Speaker 8: financial conditions easing so dramatically since that meeting.
Speaker 3: Just a headline to bring to everyone's attention. FED swaps
Speaker 3: cut odds of a March raid hike to contract low
Speaker 3: near thirty percent, Carol, So.
Speaker 2: For the March meeting.
Speaker 4: For the March meeting, Yeah, that's March rate cut.
Speaker 2: Yeah, no surprise that, you know, if you've got Japal
Speaker 2: coming out like, Okay.
Speaker 3: We're listening, but there's still a thirty percent chance.
Speaker 2: Well, well yeah, go.
Speaker 6: Ahead, go ahead.
Speaker 7: No.
Speaker 6: I was just gonna say, they basically just pushed out, right.
Speaker 8: I mean, if you look at the January twenty twenty
Speaker 8: five number, that actually went up, so they're just pushing out.
Speaker 8: They didn't take away cuts. They actually added half of
Speaker 8: a cut for the remainder of the year, but they
Speaker 8: pushed it out beyond March. So they are listening, but
Speaker 8: they aren't listening because he said, you know, the FED
Speaker 8: has three in their dot block. The market's still pricing
Speaker 8: in over five this year, but they just pushed it
Speaker 8: out beyond March.
Speaker 2: Hey, well, anything of the FED decision, and especially since
Speaker 2: you feel like a little bit of a disconnect from
Speaker 2: what we heard in December and what we're hearing today,
Speaker 2: that would impact your portfolio strategy for clients.
Speaker 6: No, not really.
Speaker 8: I mean I think you know, you use opportunities like this,
Speaker 8: given the strong move that we had at the end
Speaker 8: of last year, you use these pullbacks to you know,
Speaker 8: put new money to work, take opportunities to buy names
Speaker 8: that you know, maybe you were waiting on a pullback.
Speaker 6: On and put the additional capital.
Speaker 3: There is this enough of a pullback or do you
Speaker 3: think there's further to go?
Speaker 8: I think there's probably more to go, and I think
Speaker 8: you need to be mindful of the earnings events, you know,
Speaker 8: obviously for individual names, because that can create further pullbacks
Speaker 8: and individual names. But I would not be surprised to
Speaker 8: see us kind of leak back, maybe towards that level
Speaker 8: that we were in mid December before we kind of
Speaker 8: reset and move higher.
Speaker 2: Hey, there's valuations to watch, and then there's also earnings fundamentals.
Speaker 2: So far on that front, what is that telling you
Speaker 2: about the corporate environment right now and the ability to
Speaker 2: maybe maintain earnings going out through to twenty.
Speaker 6: Four Yeah, it's a great question.
Speaker 8: I mean, it's it's really kind of tough to figure
Speaker 8: out because you're getting such mixed signals from different companies,
Speaker 8: you know, Witness ups yesterday versus GM, for example, I would.
Speaker 6: Say, in general, they're okay but not great.
Speaker 8: It is the growth is definitely concentrated in a you know,
Speaker 8: a pocket of the market, as we know. So I'm
Speaker 8: you know, I'm very interested to continue. I have a
Speaker 8: list of calls that I need to listen to to
Speaker 8: hear more data. But you know, I would say, it's okay,
Speaker 8: right now, calls.
Speaker 2: What's on that list of calls when you've got some
Speaker 2: downtime that you're going to listen to. What are the
Speaker 2: companies that you think bear you're listening to?
Speaker 8: Oh gosh, well, well as of today. I mean, I
Speaker 8: want to go back and listen to Starbucks. I've got
Speaker 8: boeing to listen to a M D.
Speaker 6: Google. I'm really kind of behind, honest, So.
Speaker 4: Give me how much work you have to do. We're
Speaker 4: glad you came on our program.
Speaker 8: Thank you for doing Yeah, no, no, no question, but
Speaker 8: even listening to me. We don't own ups, but I
Speaker 8: listened to that call this morning just to kind of
Speaker 8: understand the dynamic and what was going on there.
Speaker 6: So even listening to.
Speaker 8: Companies that you don't own, just to get a better
Speaker 8: kind of signal and things.
Speaker 3: Hey, just just thirty seconds from you on that. We
Speaker 3: continue to get news of layoffs every single day. Odyssey
Speaker 3: plans to cutch obs and it's Pineapple podcast division. Flex
Speaker 3: Support has laid off fifteen percent. Novax's cutting twelve percent
Speaker 3: of its global workforce yesterday was ups What do you like?
Speaker 3: What do you make of all this? I mean, this
Speaker 3: is are we looking at? Is it too anecdotal or
Speaker 3: is the data actually coming in?
Speaker 6: No?
Speaker 8: I think you know, you are starting to see softer
Speaker 8: kind of data. Power alluded to this in the labor market.
Speaker 8: I mean, the ADP report today wasn't too great one
Speaker 8: hundred thousand, So I mean that to me, that's the
Speaker 8: key for this year, right. If we continue to see
Speaker 8: positive job gains of a one hundred and hundred fifty thousand,
Speaker 8: that's fine. If we start to see negative prints there,
Speaker 8: if some of these anecdotal stories show up in the
Speaker 8: actual numbers, filming got a problem, I think yeah.
Speaker 2: And the fit chair saying like he doesn't want to
Speaker 2: see the job market fall apart, you know, hoping to
Speaker 2: you know, keep that dual mandate in mind, inflation low
Speaker 2: but still people working, and maybe ideally ultimately say we
Speaker 2: are at that soft landing. Walter, thank you so much.
Speaker 2: As Tim said, you're in the midst of a lot
Speaker 2: of stuff, so glad you could take some time for us.
Speaker 2: Walter Todd, President, chief Investment Officers at Greenwood Capital Associates
Speaker 2: on Zoom from Greenwood, South Carolina.
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