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Speaker 2: I'm very enthusiastic about is the Audi what we called
Speaker 2: in Germany the or Quattro. So that was like the
Speaker 2: most recognizable Audi rally car from my childhood.
Speaker 3: My dad.
Speaker 2: Actually I was lucky enough that my dad was able
Speaker 2: to go over to Germany and pick up an outy
Speaker 2: five thousand back in I think the early eighties and
Speaker 2: bring it back with him on the Queen Elizabeth two.
Speaker 2: You can't do that anymore. This is personal for you,
Speaker 2: so yeah, I've been a fan of the brand. In fact,
Speaker 2: the first car I ever bought was an Audi A four.
Speaker 2: I got the two point five TDI of vant. I
Speaker 2: picked mine up as well in I feel like that
Speaker 2: was near Hartzoganaurrak, where I picked it up from the factory,
Speaker 2: so that was really cool. I want to welcome in
Speaker 2: right now. Brian Stockton. He is the senior director of
Speaker 2: Technical Services and Training Training for Audi and he joins
Speaker 2: us on Zoom from Auburn Hills, Michigan. Brian, I have
Speaker 2: a long family history related to this brand, so I'm
Speaker 2: excited to talk to you. And I've been working on
Speaker 2: these cars for for for decades, but only on the
Speaker 2: internal combustion engines. And what we're going to talk to
Speaker 2: you about today is the training that people will need
Speaker 2: for the EVS. You know, bringing in a whole new
Speaker 2: generation of cars. How much harder are they to work
Speaker 2: on than the gas engine cars?
Speaker 4: Yeah?
Speaker 5: Good, good, And I'm glad to hear that you're happy
Speaker 5: with outing. You've been a long time Audi brand enthusiast.
Speaker 5: Let me kind of start off with talking about our program,
Speaker 5: our AEP program, our Audi Educational Partnership program, and to
Speaker 5: your point, evs, although new to the overall market, not
Speaker 5: necessarily so new to Audi launched our first one in
Speaker 5: twenty eighteen, and today we have five current models that
Speaker 5: are out there available to.
Speaker 4: Our customer base, so it's not new for us. We
Speaker 4: had it out there for a while.
Speaker 5: But we're kind of fine tuning how we develop our
Speaker 5: workforce to work on those to kind of to get
Speaker 5: to your point about what's different about it. So we
Speaker 5: built this program called the ep AUDI Educational Partnership Program.
Speaker 5: It's really a way to transform our technician workforce so
Speaker 5: that they can work on these high voltage vehicles along
Speaker 5: with the traditional ice engines, to be expert level certified
Speaker 5: so they can really address any customer issues for our
Speaker 5: new vehicles today and moving forward, kind of jump a
Speaker 5: little more into the program if I could.
Speaker 2: Well, Brian, what I'm wondering is how much do you
Speaker 2: need to learn to work on the evs Because with
Speaker 2: the gas engines and the diesels that AUDI has made,
Speaker 2: you know, they were complicated motors, and I mean, you
Speaker 2: know it took time, but over a decade we've we've
Speaker 2: figured out how to do it. With the evs. I
Speaker 2: feel like you need fewer people to put them together.
Speaker 2: There are a lot fewer moving parts. It just seems
Speaker 2: like it would be much easier to service them.
Speaker 4: Yeah, good points.
Speaker 5: You're right in terms of the mechanicals, the individual componentry
Speaker 5: less componentory in an.
Speaker 4: EV vehicle by a long shot. And you know, in
Speaker 4: terms of you know, some of the vehicles don't have transmissions.
Speaker 5: Some of our higher end vehicles still have transmissions that
Speaker 5: are evs like our etron GT. However, the main difference
Speaker 5: where you have less componentry, you have more complexity and
Speaker 5: the logic and the computer controlled systems, so the diagnostics,
Speaker 5: the analytics and all those things are.
Speaker 4: Much more complex.
Speaker 5: So where you ease up on the hardware, the complexity
Speaker 5: is increased with these types of vehicles.
Speaker 6: Okay, So I am going to out myself as kind
Speaker 6: of the loser idiot of this conversation because listen, I've
Speaker 6: just grown up without a lot of cars in my life.
Speaker 6: I'm a New York City girl. As of eight years ago.
Speaker 6: Before that, I was in college, I didn't have a car.
Speaker 6: So I'm just I'm not a big cars gal. But
Speaker 6: I do know that if I got one today, I
Speaker 6: would have to get an EV to be considered cool. So, Brian,
Speaker 6: you know this space incredibly well. When it comes to
Speaker 6: younger people buying evs and the increase in demand that
Speaker 6: we're seeing for EV's in general. How much of a
Speaker 6: read through are you seeing from the overall transition into
Speaker 6: evs for the need for skilled technicians to work on
Speaker 6: those evs, Like, how direct is the correlation between the two.
Speaker 5: We started to see the correlation back in twenty nineteen
Speaker 5: We launched our first full EV in twenty eighteen, and
Speaker 5: I think just from the standpoint of new technology and
Speaker 5: the complexity and the diagnostics, we had to figure out
Speaker 5: a way to transform our workforce. So we came up
Speaker 5: with this thing called the AUDI Educational Partnership Program, which
Speaker 5: is kind of what you're kind of leaning into a
Speaker 5: little bit, if I could just take a moment and
Speaker 5: give you a few key points on it. This program
Speaker 5: is kind of unique in many ways and the fact
Speaker 5: that it really takes and connects the school. So high schools,
Speaker 5: secondary schools that have accredited programs, we reach out to them.
Speaker 5: We give them access to all of our online training,
Speaker 5: including all the high voltage. Then we reach out we
Speaker 5: connect the students to our dealers, to our dealer network
Speaker 5: so locally. So a student that wants to proceed in
Speaker 5: this AAP program, they go to the school's online assessment.
Speaker 5: Once they pass, then they're accepted into the program. We
Speaker 5: connect them to a dealership and then they start what
Speaker 5: we call the eighteen months.
Speaker 4: In this eighteen month program, they get put into a.
Speaker 5: Class, they stay with the same group of people for
Speaker 5: eighteen months. We travel them around the country to different
Speaker 5: AUDI dedicated training centers and they're going to class in
Speaker 5: our Audi corporate training centers for technicians not through secondary schools,
Speaker 5: and we teach them the finer points on diagnostics, all
Speaker 5: the new technologies, all those things they need to know,
Speaker 5: and we bring them up to an expert level technicians.
Speaker 5: So we do in about eighteen months, where it takes
Speaker 5: most technicians over five years to achieve. So to your point,
Speaker 5: it takes some diagnostic thought. It takes a lot of
Speaker 5: background and a lot of basics to be able to
Speaker 5: get to that point to understand those systems and how
Speaker 5: to diagnose them.
Speaker 2: All right, So we all know, Brian, there's been a
Speaker 2: real labor shortage in the United States. I think, especially
Speaker 2: for skilled labor like this, it's got to be hard
Speaker 2: to find. So this program is a great way to
Speaker 2: kind of bring the kids up through school and into
Speaker 2: your service base. Is that part of what you're doing here,
Speaker 2: trying to recruit the smartest kids in America?
Speaker 5: That's exactly what we're doing. So we lay things out
Speaker 5: with these schools. We give them access to our content
Speaker 5: free of charge for the students. These students that rise
Speaker 5: to the top and take the test, and they become
Speaker 5: accepted it into the program, then they can start their
Speaker 5: eighteen month journey once we connect them to a dealership. So,
Speaker 5: just like you said, it's a really the best possible
Speaker 5: way to find the right people for the dealers. I
Speaker 5: know people talk about it's difficult to find technicians. What
Speaker 5: we have found as just going to secondary schools is
Speaker 5: not enough. You've got to go into the high schools.
Speaker 5: There are some really exceptional high school programs out there,
Speaker 5: and some of these students that come out of high
Speaker 5: school with a good automotive accredited program, they are very
Speaker 5: very good.
Speaker 2: How much can kids, by the way, expect to make
Speaker 2: if they want to go for a career and mechanical
Speaker 2: service like this that they want to be working on
Speaker 2: and around cars. You know, what's a master technician to
Speaker 2: get these days?
Speaker 4: You know, it varies all over the country.
Speaker 5: If we were talking in California, you know, it wouldn't
Speaker 5: be unusual for somebody to make you know, in that
Speaker 5: one hundred thousand dollars range, But it varies very much
Speaker 5: by the dealer body and also by the location across
Speaker 5: the country.
Speaker 6: Is this a job that is safe from AI? And
Speaker 6: our final kind of forty five seconds with you here.
Speaker 5: Yeah, so very much, save from anything relevant to automated diagnosis,
Speaker 5: we need technicians that know what they're doing and how
Speaker 5: to look at what's going on with the vehicle and
Speaker 5: interact with the service consultants to get to fix it
Speaker 5: right the first time. This program, again, if I kind
Speaker 5: of lean into it just a little bit quickly, it's
Speaker 5: a dedicated training program that's just the AUDI content that
Speaker 5: we develop for our dealers, so it's very streamlined. It's
Speaker 5: got a pretty big component of culture because they stay
Speaker 5: together for eighteen months. We really build a brand culture
Speaker 5: with these techs, so they want to do the right
Speaker 5: thing with our customers. So it's always about customer first,
Speaker 5: and then it's also on the job training, so they're
Speaker 5: in school, they go off of these eight weeks, and
Speaker 5: then what you know, during this time that they're in
Speaker 5: the dealers, they're honing those skills, working on assessments, doing
Speaker 5: online training content.
Speaker 4: So it's really very much a win win win from all.
Speaker 5: Parts, making sure that the student is a big win
Speaker 5: from education, the dealer gets a big win, and then
Speaker 5: AUDI is a corporate team, we get a big win
Speaker 5: for the outcome for our customers.
Speaker 2: Brian, thanks so much for joining us. Real pleasure talking
Speaker 2: to you, obviously. I love to talk about cars and
Speaker 2: love to talk about Audi's especially Brian Stockton, a senior
Speaker 2: director of Technical service and Training at Audi, joining us
Speaker 2: at Auburn Hills, Michigan. We've got to get Maddie into
Speaker 2: a Q four E tron soon.
Speaker 6: That sounds cool.
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Speaker 6: We are going to get to that big neg meeting tomorrow,
Speaker 6: the most important one since the last. As we like
Speaker 6: to say, the market's already pricing in at least a
Speaker 6: skip no movement in terms of rate hikes, But the
Speaker 6: big question starts to be what's going to happen at
Speaker 6: the meeting after that? So here to discuss, We've got
Speaker 6: doctor Stephen Steve Skanky with us. He's a chief economic
Speaker 6: advisor at keel Point. He's also the former US Treasury
Speaker 6: and White House National Security Council staff member, and he
Speaker 6: joins us on Zoom from Alabama. Doctor Thank you so
Speaker 6: much for being here with us. Talk to me about
Speaker 6: your anticipation, not just for this FED meeting tomorrow, for
Speaker 6: the one after that. What do you think the Fed's
Speaker 6: longer term moves are going to look like?
Speaker 7: Well, thank you Madison's it's great to be with you,
Speaker 7: and you're absolutely right. Tomorrow they're going to be there's
Speaker 7: going to be a skip. But what we are going
Speaker 7: to see tomorrow is in their new Summary of Economic Projections.
Speaker 3: It's updated and.
Speaker 7: They're to get they're going to give us a hint
Speaker 7: of how well they think their measures are working against inflation,
Speaker 7: uh and where they see interest rates being at the
Speaker 7: end of the year and into the first half of
Speaker 7: next year. And then of course there's going to be
Speaker 7: their statement, which I think is going to be heavily
Speaker 7: on the hawkish side as part of their effort to
Speaker 7: sort of get their last whip a forward guidance in.
Speaker 3: And then we're going to wait and see what.
Speaker 7: Happens to the inflation numbers, the employment numbers for June
Speaker 7: that come out in early July.
Speaker 3: Most people expect another.
Speaker 7: Rate increase in July, and that's likely to happen unless
Speaker 7: we get a.
Speaker 3: Really big surprise.
Speaker 7: Of a rapid slowdown in inflation in June that gets
Speaker 7: picked up and they're reporting in July.
Speaker 2: Can I ask Steve about the importance of employment, the
Speaker 2: employment numbers and wages. I would just out of sheer
Speaker 2: common sense figure that if more people have jobs and
Speaker 2: if more people are getting paid more, that's going to
Speaker 2: put upward pressure on inflation, just because they can afford
Speaker 2: to buy stuff, and because the manufacturers are going to
Speaker 2: have higher costs and they're going to need to make margin.
Speaker 2: But there's been so much research out suggesting that unemployment
Speaker 2: has no direct connection and even wages have no direct
Speaker 2: connection to inflation, that I wonder how much the FED
Speaker 2: is actually focused on those things.
Speaker 3: Well, I think they do pay attention to it.
Speaker 7: And you know what are their favorite sub indsease is
Speaker 7: non housing CPI core services, which has fall into a
Speaker 7: twelve month low four and a half percent from five
Speaker 7: point one percent, And that really is a sign that
Speaker 7: slowing wage growth is starting to show up in some
Speaker 7: of the data. So they do care about that. I mean,
Speaker 7: it's not a principal driver, but it certainly has had
Speaker 7: a big impact in that part of the data that
Speaker 7: we understand they're paid a lot of attention to.
Speaker 6: But wasn't there a little bit of a upside surprise
Speaker 6: in terms of the estimates to supercore today? Right?
Speaker 8: Yes?
Speaker 7: And what you know, there was a big surprise and
Speaker 7: used cars right again, and that was I mean that
Speaker 7: was a four point four month over a month increased
Speaker 7: and used vehicle prices, and we also had a little
Speaker 7: bit higher rate of rent and owner equivalent rent that
Speaker 7: was like a half percent month over a month. But
Speaker 7: those those should improve and that's where that's where we're
Speaker 7: really have an idea as to what the FED can
Speaker 7: do when we see those numbers come out in the
Speaker 7: in the numbers in July, because if if used cars
Speaker 7: come back as it seems that they have in terms
Speaker 7: of pricing and and and same on rent and owner
Speaker 7: equivalent rent, which is about thirty five percent of the CPI,
Speaker 7: that'll that'll allow.
Speaker 3: The FED even not to do another increase in July.
Speaker 7: It's very much dated driven at this point, and that
Speaker 7: would that would make it possible to sort of push
Speaker 7: back on the Hawks who very much would like to
Speaker 7: increase both at this meeting as well as the July meeting.
Speaker 2: Steve, I wonder about the comparisons that have been made
Speaker 2: to Jerome Powell and Arthur Burns, or to Jerome Powell,
Speaker 2: and as I think he'd prefer, Paul Vulker. You were
Speaker 2: advising the White House during those regimes, right, you were
Speaker 2: advising the president during those times. Do you see parallels,
Speaker 2: because you know, a lot of people are pointing out
Speaker 2: that Jerome Powell doesn't want to let his guard down
Speaker 2: too soon the way Burns did, Otherwise inflation will come
Speaker 2: roaring back.
Speaker 7: Yeah, I think that, you know, and it's interesting to
Speaker 7: look at that as a comparison. Matt Arthur Burns was
Speaker 7: known for for believing almost in the righteousness of suffering
Speaker 7: and was as nice as guy as he was, was
Speaker 7: pretty tough on the money policy and squeezing out inflation.
Speaker 7: I mean, he had a big job because YUS has
Speaker 7: gone off the gold standard, we let the dollar flow,
Speaker 7: we had the enter energy price and the energy embargos
Speaker 7: and the big jump in oil prices, and so he
Speaker 7: was determined that that wasn't gonna that wasn't going to
Speaker 7: ruin the economy, and ultimately he was unable to to
Speaker 7: sort of keep it out. Jerome Powell doesn't want to
Speaker 7: seem soft on inflation, but it's hard to characterize him
Speaker 7: as a hawk. He cares very much about the employment
Speaker 7: picture and it being broadly spread among minority and disadvantage
Speaker 7: business groups. If you look back to some of the
Speaker 7: things that he said in twenty nineteen, he was joyful
Speaker 7: and sensing accomplishment in seeing a lot of those wage
Speaker 7: and employment benefits spread. He'd like to see that again.
Speaker 7: He knows that that's not the case right now, and
Speaker 7: he'd like that to happen. But he can't appear soft
Speaker 7: on inflation.
Speaker 6: Final twenty seconds here can the Fed stop hiking if
Speaker 6: we don't see an increase in jobless claims or see
Speaker 6: a change to the unemployment picture. Just about twenty seconds.
Speaker 7: If they don't see a change in jobless claims or inflation,
Speaker 7: then they can't stop hiking. We have to have at
Speaker 7: least one more in July. It would be hard to
Speaker 7: imagine that we wouldn't see movement and inflation after that,
Speaker 7: just given some of the other things that they've done.
Speaker 2: All right, see great having on the program. I really
Speaker 2: appreciate your insight and experienced. Steve Skanky there, chief economic
Speaker 2: advisor at Keel Point, And as we said, He was
Speaker 2: a US Treasury and White House National Security Council staff
Speaker 2: member before that.
Speaker 3: This is Bloomberg.
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Speaker 3: I'm kicking what they're given because I'm working for them.
Speaker 2: All right, we are, We've arrived at that point in
Speaker 2: my day. I have say it's my favorite point of
Speaker 2: the show. And we talk about one story from the
Speaker 2: Business business Week mag magazine. This is going to be
Speaker 2: the forthcoming issue of BusinessWeek magazine, and we typically talk
Speaker 2: to Joel Weber, the editor in chief, as well as
Speaker 2: the author of the story. We're fortunate enough to have
Speaker 2: Ellen Hewitt with us right now. She wrote the layoffs
Speaker 2: and AI are changing Tech's once invincible job market story,
Speaker 2: and Ellen, I thought it was a fantastic job of
Speaker 2: reporting and a little bit of a bummer, right because
Speaker 2: I had thought, as well as probably many of the
Speaker 2: kids graduating college today, that if you learn to code
Speaker 2: and you're like halfway good at it, then your set
Speaker 2: for a sweet job in Silicon Valley for like the
Speaker 2: rest of your life. And it now seems that's no
Speaker 2: longer the case.
Speaker 9: Yeah, I mean, this is kind of the big mood
Speaker 9: shift in Silicon Valley, which is the learning to code
Speaker 9: is not a guarantee of amazing, forever employment anymore. To
Speaker 9: be clear, there's still a lot of people who want
Speaker 9: to hire software engineers, especially firms that are outside of tech,
Speaker 9: like in health, healthcare, and finance. They're definitely looking for coders.
Speaker 9: But there is this noticeable shift that people are experiencing,
Speaker 9: which is this once infinite fountain of high paying jobs
Speaker 9: where companies were just always always hiring, that's not happening anymore.
Speaker 2: One thing I saw is that there have been two
Speaker 2: hundred thousand layoffs in tech this year. You found a
Speaker 2: website that essentially aggregates all of the layoffs, but eighty
Speaker 2: thousand of those happened in January. So what I'm wondering is,
Speaker 2: are the layoffs kind of slowing down? Does it look
Speaker 2: like maybe it's not as bad as it was at
Speaker 2: the start of the year.
Speaker 9: Now, yes, that's definitely what the numbers are showing. So
Speaker 9: in our story, we have a wonderful chart. This data
Speaker 9: comes from layoffs at Fyi, which is a hilarious site,
Speaker 9: very well run by just a startup founder who started
Speaker 9: during COVID collecting layoff numbers and putting them in this
Speaker 9: wonderful data website. So you see a bit of a
Speaker 9: peak right after the start of the pandemic, and then
Speaker 9: a drop, and then it really started to pick up
Speaker 9: midl last year and peaked in January, and now it's
Speaker 9: actually leveling out. So probably it seems like the worst
Speaker 9: is behind us, but it definitely has. You know, the
Speaker 9: repercussions of this are going to be felt for a
Speaker 9: very long time.
Speaker 3: Joel Weber.
Speaker 10: You know what I was, what I've been thinking about
Speaker 10: ever since it felt like there was this real major
Speaker 10: mood shift. Was just what that what that feels like
Speaker 10: in the valley? Ellen, And I'm curious, like being there
Speaker 10: feeling like you could do anything you wanted forever. How
Speaker 10: are from the sources you spoke with, how is that
Speaker 10: manifesting itself?
Speaker 3: This decision?
Speaker 9: Yeah, mood all sorts of ways. I mean, everyone knows,
Speaker 9: you know, a lot of people are just getting laid off,
Speaker 9: you know, in the way that people you know, generally
Speaker 9: you might have expected that recruiters or people who work
Speaker 9: in sales might be the first to go. This time,
Speaker 9: it's like senior engineers have worked at firms like Google
Speaker 9: for ten or fifteen years are getting laid off. There
Speaker 9: are people who I know who just yeah, I've worked
Speaker 9: at a company for you know, worked at Facebook for
Speaker 9: ten years and are getting laid off and feeling this
Speaker 9: sense that you know, I also have a friend who
Speaker 9: considered leaving her job, but then was like, I just
Speaker 9: don't think I'm going to get another good one right now,
Speaker 9: so I'm going to stay at this job that I
Speaker 9: don't super like. It's just this this kind of feeling
Speaker 9: that is suffusing everywhere in the industry. And then, you know,
Speaker 9: we had this wonderful conversation with this new grad Dylan,
Speaker 9: who just graduated from Cornell with a CS degree, had
Speaker 9: interned at all these great places Google, Facebook, Stripe, Figma,
Speaker 9: and had a Google offer and then it was rescinded.
Speaker 9: And it's just this sense that this dependable thing isn't
Speaker 9: happening anymore, and you see it making people nervous, You
Speaker 9: make you see them nervous to switch jobs or just
Speaker 9: like you know, looking for jobs and not finding what
Speaker 9: they want. And there is actually a pretty sense, you know,
Speaker 9: a pretty big sense of fear among some people. Like Dylan. Again,
Speaker 9: this new grad was talking about how some of his
Speaker 9: peers are accepting multiple job offers because they're concerned that
Speaker 9: one of them is going to get rescinded, and they
Speaker 9: have reason to believe that it might.
Speaker 10: That new grad phenomenon is the one that I find
Speaker 10: most interesting, because these were the people like you were
Speaker 10: just they were just getting swept up and money thrown
Speaker 10: at them. And especially like in Dylan's case, he had
Speaker 10: multiple internships at all the blue chip places. There's this
Speaker 10: helpless quality that it must feel like to be in
Speaker 10: that twenty something age. Ellen, And I'm curious when you
Speaker 10: who's the most freaked out. The twenty somethings are the
Speaker 10: people who have been in the industry for a little
Speaker 10: bit and have you know, weather changed before.
Speaker 9: I mean, they're freaked out in different ways. The twenty
Speaker 9: somethings are like, wow, I really thought that I was
Speaker 9: picking the most obvious, most stable, most high paying career
Speaker 9: and now it's none of those things. Or I might
Speaker 9: have to struggle to get a job. Meanwhile, you know,
Speaker 9: I talked to someone who's telling me stories about peers
Speaker 9: of his who are maybe in their forty or fifties,
Speaker 9: who have worked in Silicon Valley during these boom times,
Speaker 9: have gotten used to incredibly high cost of living in
Speaker 9: places like New York and San Francisco, and are now
Speaker 9: accustomed to a standard of living that may no longer
Speaker 9: be accessible to them. Like I talked to a VC
Speaker 9: who said his friend who had been laid off was
Speaker 9: looking for a new job and his minimum salary requirement
Speaker 9: was six hundred thousand dollars, and he was just like that,
Speaker 9: you may not be able to find that anymore. And
Speaker 9: if you're used to, you know, if you have kids
Speaker 9: in private school, like you get these golden handcuffs, and
Speaker 9: those people are scared too. I think they're experiencing a
Speaker 9: shift in what they expected would be available.
Speaker 2: Well, the thing is, Ellen, if you need to charter
Speaker 2: a jet for a fishing trip in Alaska, you know
Speaker 2: that's not cheap anymore.
Speaker 10: It was never yeah, but now it's really not.
Speaker 9: I really did appreciate. You know, there's a wonderful part
Speaker 9: in the story where yeah, we kind of reminisce about
Speaker 9: what the boom times looked like in Silicon Valley in
Speaker 9: the mid twenty tens. It was out of control, right,
Speaker 9: We're talking about perks and salaries and stock grants and
Speaker 9: these kinds of things that were you know, these companies Facebook, Google,
Speaker 9: they were just throwing money at their employees. In fact,
Speaker 9: they would often hire promising workers simply to have them
Speaker 9: kind of in their corner without a specific job for them.
Speaker 9: So again I talked to this PC who had been
Speaker 9: a product manager at Instagram in twenty fourteen when it
Speaker 9: was owned by Facebook, and he said he was hired
Speaker 9: as a product manager. He didn't have a job yet.
Speaker 9: He was like going to be assigned to a team,
Speaker 9: but just spent three months getting trained, spending an hour
Speaker 9: every morning reading a novel over breakfast, and then having
Speaker 9: some casual meetings. And then at the end of the
Speaker 9: three months he was finally assigned a job. But he
Speaker 9: spent you know, and knew of people who had been
Speaker 9: hired just so that they wouldn't go work at a rival.
Speaker 9: And that was that sense of money that really cremated
Speaker 9: Silicon Valley for more than a decade.
Speaker 6: It sounds like, sorry, Ellen, it just sounds like another
Speaker 6: one of those things that goes away, and when we
Speaker 6: don't have a zero interest rate environment, less of that
Speaker 6: kind of just getting brought on. I mean, that's at Yeah,
Speaker 6: I'm just being smart, you know what I mean. But
Speaker 6: one thing that I'm curious about too is whether these
Speaker 6: companies are sort of blaming AI to be able to
Speaker 6: fire or lay off their employees and to kind of
Speaker 6: get away with it. Yeah, did you did you find
Speaker 6: that in your reporting?
Speaker 9: There's definitely a sense that AI is like the idea
Speaker 9: of the day, and so people are pointing to it
Speaker 9: for different reasons, one of which is, yes, there are
Speaker 9: some CEOs who over hired at the beginning of the
Speaker 9: pandemic when it looked like tech was going to have
Speaker 9: this boom time. Now they're seeing that that boom time
Speaker 9: is not around, they're going to lay people off, and
Speaker 9: they're citing not necessarily AI taking jobs, but just the
Speaker 9: need to maybe realign the company in order to be
Speaker 9: able to focus on AI, which then means that they
Speaker 9: can cut some jobs. So it's a bit of a
Speaker 9: face saving thing. It may also be a real thing
Speaker 9: that companies are investing more energy into it. Of course,
Speaker 9: in our story we also talked about it AI and
Speaker 9: machine learning. Specialists in software engineering are getting paid twelve
Speaker 9: percent on average more than other senior software engineers. There
Speaker 9: is genuinely a desire to hire these types of people.
Speaker 9: AI is not replacing jobs yet, but but there is
Speaker 9: this feeling that it's going to shake things up, and
Speaker 9: that that shakeup may lead to some new hiring and
Speaker 9: areas and cuts in other places.
Speaker 6: All right, Ellen, well, thank you so much, really appreciate
Speaker 6: you joining us and the story, of course, which will
Speaker 6: be featured in the forthcoming issue of BusinessWeek magazine. You
Speaker 6: can read it now on the Bloomberg terminal and at
Speaker 6: Bloomberg dot com slash BusinessWeek, m Marco.
Speaker 1: Journal.
Speaker 2: Now about you, let me drive?
Speaker 10: Oh no, no, no, no, dreg honey please, I'll do the
Speaker 10: riding gravels.
Speaker 7: Let's mate, I want to drive.
Speaker 3: It's a good question.
Speaker 8: Good time.
Speaker 1: Is the drive to the Globe dot com? Well try around,
Speaker 1: Saga don on Bloomberg Radio.
Speaker 6: All right, we're going to take our coverage from Miami
Speaker 6: over to Wall Street. As you know, it's big week
Speaker 6: for the economy. We've got that FED meeting tomorrow. Today,
Speaker 6: we got CPI in a little better than expected depending
Speaker 6: on how you look at it. A lot of other
Speaker 6: data this week, and market consensus seems to be building
Speaker 6: around tomorrow being a non rate hike day. But the
Speaker 6: question is is it going to be a pause, a skip,
Speaker 6: a stop, and how are markets responding to all those options?
Speaker 6: So here to weigh in for our drive to the
Speaker 6: close is Jeff Crumpleman. He's chief investment strategist at Mariner
Speaker 6: Wealth Advisors. Jeff, great to speak with you. Let's just
Speaker 6: start on your word choice here, pause or skip.
Speaker 8: I think that it should be a pause, but you
Speaker 8: know we're not paid to make judgments here, as you
Speaker 8: know followers with the capital markets. I think it's fifty
Speaker 8: to fifty between skip and pause. I did like the
Speaker 8: CPI inflation data, and I were on the board, I
Speaker 8: would I would say pause. I think that there's plenty
Speaker 8: of evidence that inflation is calming, and that they've done
Speaker 8: a lot of good work, and some of the lagging
Speaker 8: data like rents and some of the pressures and the
Speaker 8: services side that's been sticky, I think is showing signs
Speaker 8: green shoots of calming as well. So I'd love to
Speaker 8: see pause. I think that's what they should do, but
Speaker 8: we'll just have to see.
Speaker 2: But you know J Powell, and you know that he
Speaker 2: doesn't want to be the next Arthur Burns, right. I mean,
Speaker 2: the last thing that this FED boss wants is for
Speaker 2: the FMC to pause and then for inflation to come
Speaker 2: roaring back after after the they were behind the curve
Speaker 2: for so long, he's gonna want to be ahead of
Speaker 2: it now. So do you still think we can maintain
Speaker 2: this rally in the face of a FA that at
Speaker 2: least wants to be restrictive.
Speaker 4: Yes, I do, and I've.
Speaker 8: You know, we've been pretty steady and as my mom says,
Speaker 8: moderation and all things. And I think our team has
Speaker 8: exercised that. We've been pretty vocal about looking for a
Speaker 8: forty five hundred target on the S and P five
Speaker 8: hundred by a year in and we said, you know,
Speaker 8: we're not sure the path to that. That it could
Speaker 8: be three yards and a cloud of duster, it could
Speaker 8: be volatility significantly throughout the year because of debt ceiling,
Speaker 8: because of FED, because oh you know, we get some
Speaker 8: funky inflation numbers from month to month. But absolutely, I
Speaker 8: think through year end we can sustain the rally. Do
Speaker 8: I think that we get a pause in the market,
Speaker 8: because they're going to come out tomorrow and you know,
Speaker 8: as they do pause, what are they going to do.
Speaker 8: They're going to say, you know, our summary of economic projections,
Speaker 8: the SEP, the everybody talks about, oh, we're taking our
Speaker 8: target up from five point one to something a little higher,
Speaker 8: and they're going to talk hawkish, and people are talking
Speaker 8: about it being a hawkish pause. That's probably what's going
Speaker 8: to happen. And you know what, the market, it'll probably
Speaker 8: trade off a little bit on that after we've pushed
Speaker 8: these twenty twenty three highs. But I don't think for long.
Speaker 8: I think that the evidence the inflation will continue to
Speaker 8: come down to FED Now it's going to be in
Speaker 8: the ninth inning after they might do something in July,
Speaker 8: but then they're really in the ninth inning, and earnings
Speaker 8: are really solid and so is the so's the economy.
Speaker 8: It's not so negative. So yeah, based upon fundamentals, valuation levels,
Speaker 8: and what I see in the technical price trends, yeah, absolutely,
Speaker 8: I think you can sustain the advance in the market through.
Speaker 4: The end of the year.
Speaker 6: All right, Well, you know what I'm going to ask
Speaker 6: you next, which is the rally a little bit too narrow?
Speaker 6: Is this just an AI boom that's going to fizzle
Speaker 6: out before the end of the year.
Speaker 8: You know, I think that that is just overdone. It
Speaker 8: is true. You can lie. We all can lie with statistics,
Speaker 8: and so people will immediately say, hey, the top eight
Speaker 8: stocks and the S and P five hundred are all
Speaker 8: of the return of the S and P five hundred
Speaker 8: this year, implying that the other four hundred and ninety
Speaker 8: two stocks plus in the S and P five hundred
Speaker 8: are really not doing well. We find that there are
Speaker 8: broad industry groups that actually are doing well. There are
Speaker 8: a lot of stocks that are up twenty forty fifty percent.
Speaker 8: We own a lot of them, and an example in
Speaker 8: probably our most aggressive large and MidCap strategy, we're outperforming
Speaker 8: the S and P five hundred this year, and we're
Speaker 8: just kind of neutral or under own all those eight stocks.
Speaker 8: So we own a number of technology stocks and consumer
Speaker 8: discretionary stocks that are actually doing quite well and outperforming.
Speaker 8: So I think it's misleading to think make the public
Speaker 8: think that there are eight stocks doing well and everything
Speaker 8: else is down. And I would add to that in
Speaker 8: terms of momentum. Over the last three weeks, you've seen
Speaker 8: a broadening in the market. Look at how small cats
Speaker 8: are doing in June, and small caps own a lot
Speaker 8: more in the financial and industrials area than the tech
Speaker 8: laden s and P five hundred, So the trend is
Speaker 8: getting broader. I have been disappointed.
Speaker 4: That's not to.
Speaker 8: Say that it hasn't been a little tougher because you've
Speaker 8: had these mega CAF stocks do well. But you're starting
Speaker 8: to see the broadening I think play out, and that's
Speaker 8: a good thing. I feel good about that.
Speaker 3: All right.
Speaker 2: So if you're picking, if you're picking industry groups that
Speaker 2: you like for the rest of the year, what's the
Speaker 2: top of your list or is there anything specific, any
Speaker 2: specific strategy that you think investors should deploy right now?
Speaker 8: Yeah, I think that number one. This idea of blend
Speaker 8: between growth and value is a smart thing. And you know,
Speaker 8: last year, folks were saying long duration growth stocks are dead. Well,
Speaker 8: they got hammered and they became very attractive going into
Speaker 8: this year. So that's where we've picked up some of
Speaker 8: these stocks that I've mentioned, the Deckers, the Tesla, you know,
Speaker 8: a number of stocks within technology and consumer discretionary that
Speaker 8: have been on the cheap CrowdStrike, we tooke up at
Speaker 8: a very attractive level, and so on and so forth.
Speaker 8: So you don't abandon growth. But I also think that
Speaker 8: what's underappreciated in our economy are some of the cyclical stocks.
Speaker 8: There is a capital spending boom that's going on, and
Speaker 8: here in Cincinnati we're going to spend three and a
Speaker 8: half billion dollars on rebuilding a bridge. And finally we're
Speaker 8: reON shoring in the United States and building manufacturing plants
Speaker 8: and construction. Employment is at all time highs despite all
Speaker 8: this talk of recession. So to only United rental to
Speaker 8: own a Bulkan materials, to own a HP in mining,
Speaker 8: I think that it's important to have a blend of both.
Speaker 6: Yeah, so real quickly in our final twenty seconds here
Speaker 6: you mentioned CrowdStrike and in phase energy, cybersecurity, and solar.
Speaker 6: There no mention of AI and either of their descriptions.
Speaker 6: Tell me why you're going for them and not more
Speaker 6: AI plays in our final twenty seconds.
Speaker 8: Well, because you know, I believe in AI, but AI
Speaker 8: benefits directly a very narrow set we own in Vidia.
Speaker 8: I could talk about in Nvidia, but you know, I
Speaker 8: think our audience needs to know more than just in Vidia.
Speaker 8: And these are stocks that have tremendous catalysts and they
Speaker 8: were absolutely obliterated in this myth that long duration is
Speaker 8: dead and we need cybersecurity. You know, do you think
Speaker 8: cybersecurity is going away? I don't think so. And all
Speaker 8: those have the catalysts driven by the productiing cybersecurity and.
Speaker 2: Other products, jet breaching, broading it out beyond in video.
Speaker 3: It truly is a relief for us.
Speaker 2: Thanks very much, Jeff Propleman coming to.
Speaker 3: Us out of Cincinnati.
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