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Speaker 1: This is Bloomberg Business Wait inside from the reporters and

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Speaker 1: editors who bring you America's most trusted business magazine, plus

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Speaker 1: global business, finance and tech news. The Bloomberg Business Week

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Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

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Speaker 2: We're gonna stick Matt and myself with the markets, kind

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Speaker 2: of continue the conversation that we just started off with

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Speaker 2: Scarlett and rom Maine. We do have the FEDS preferred

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Speaker 2: measure of US inflation cooling. In May, consumer spending stagnated,

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Speaker 2: so justin the economy's main engine is starting to lose

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Speaker 2: a momentum. Meantime, Euro Area core inflation reaccelerated in June.

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Speaker 2: That's a setback for the ECB. And you've got the

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Speaker 2: latest PMI numbers out of China showing that economy's growth

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Speaker 2: momentum slowing further. It's a lot of moving parts globally.

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Speaker 2: So to our eco chat, we go Bloomberg News International

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Speaker 2: Economics and Policy correspondent Michael McKee on the phone in

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Speaker 2: New York City and then on zoom in New York City.

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Speaker 2: Apollo Global Management Chief economist and partner Torston. It's not

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Speaker 2: great to have you two gents here with us might

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Speaker 2: kick it off with us. Though when you look at

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Speaker 2: the numbers good inflation data, we consumer spending data. I

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Speaker 2: don't know what's the really important points here today.

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Speaker 3: Well, I think the shocking news is that when you

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Speaker 3: raise interest rates, the economy slows. As inflation starts to

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Speaker 3: go down. The fan is having an effect. We saw

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Speaker 3: personal spending rise just a tenth of eighty percent in

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Speaker 3: the month of May. We've seen some weakness in there,

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Speaker 3: and we saw reasonably good news. Put it that way.

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Speaker 3: On the PCE inflation numbers. The headline number in particular

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Speaker 3: up only a tent The core was of three tenths,

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Speaker 3: so there's still room to go. But we're starting to

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Speaker 3: see some progress be made and that's reflected in the

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Speaker 3: numbers that got later in the data. Sentiment numbers. We're

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Speaker 3: all up for the University of Michigan, so people are

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Speaker 3: feeling a little bit better about the economy.

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Speaker 4: Torson, let me bring you in here and also tell

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Speaker 4: you I have actually created a slock button on my

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Speaker 4: Bloomberg terminal, so I can hit it at any time

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Speaker 4: and pull up the charts that you send me. They're

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Speaker 4: really invaluable, so I want to just express my thanks

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Speaker 4: for that. How do you see the FED right now,

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Speaker 4: because it seems to me that everybody we talk to,

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Speaker 4: and I'm going to sound like a broken record, but

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Speaker 4: they don't believe that Powell is going to hike two

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Speaker 4: more times. And especially when we see PCE coming down,

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Speaker 4: you mish expectations going out one year coming down pretty significantly.

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Speaker 4: It doesn't seem that the Fed is necessarily going to

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Speaker 4: have a reason to hike.

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Speaker 5: No, you're absolutely right.

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Speaker 6: I mean the issue is that the market is certainly

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Speaker 6: of the belief that if it will not do much more.

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Speaker 6: Strictly speaking, fit fund futures is still pricing one more

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Speaker 6: hike in July. But I think the data today and

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Speaker 6: to what Mike just said, I mean four point six

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Speaker 6: year of a year on COPSE. We were also at

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Speaker 6: four point six in December, So, as j Powell highlighted

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Speaker 6: at the last press conference, they have not made progress

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Speaker 6: as getting inflation.

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Speaker 5: Down towards two percent.

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Speaker 6: I completely understand there's a lot of issues and debates

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Speaker 6: about what's happening to the shelter, the housing and component

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Speaker 6: of inflation that may roll off a little bit. But

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Speaker 6: now with housing recovering. Well, we may then see some

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Speaker 6: reversion later on. So I think that the FED would

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Speaker 6: look at coinflation with important part for them and say, well,

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Speaker 6: if that's at roughly five or four point six and

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Speaker 6: that's where it was six months ago, we just cannot

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Speaker 6: stop hiking rates, and we at least need to keep

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Speaker 6: rates at these levels, as he said.

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Speaker 5: At the press conference, for a couple of years.

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Speaker 6: So the bottom line, Matt, to your point is that, yes,

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Speaker 6: I understand headline is coming down. You miss short term

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Speaker 6: also what's coming down. But the coinflation is not really

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Speaker 6: making much progress at this point. It is still moving sideways,

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Speaker 6: and I think the fedness telling us that we need

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Speaker 6: all to take that more seriously.

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Speaker 4: But ken can inflation continue to rise when A, I

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Speaker 4: mean consumer expectations are down. B. There's a lot of

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Speaker 4: talk about household excess savings being gone. I mean, you

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Speaker 4: sent me the FED paper from last week that showed

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Speaker 4: they think there are no more excess savings in this system.

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Speaker 4: And if we start to lose some jobs, people aren't

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Speaker 4: gonna have the money to spend to support inflation.

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Speaker 6: Certainly, but as you know, none of that really has

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Speaker 6: happened at this point. We're still looking at If I

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Speaker 6: look at my Bloomberg terminal and look at what expectations out,

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Speaker 6: so non farm payroll next week is two hundred and

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Speaker 6: twenty five thousand, that's not a bad number. So if

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Speaker 6: that's the case the Fed, we'll look at that and

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Speaker 6: say we've got thirty nine.

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Speaker 5: Thousand jobs traded in April.

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Speaker 6: If we get two hundred and twenty five thousand in

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Speaker 6: the month of I'm sorry, the month of June, then

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Speaker 6: of course the conclusion would be that the economy is

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Speaker 6: just not slowing down as quickly as they would like.

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Speaker 5: And with that backdrop, it makes sense that their remain hookers.

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Speaker 6: I completely agree that once the label mark starts cracking,

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Speaker 6: that meaning falling apart, and we see the un empliner

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Speaker 6: rate going up, then they we'll probably change the tone

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Speaker 6: and talk about the other side of the dual mandate,

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Speaker 6: maybe the labor market.

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Speaker 5: But that's not where we are at the moment.

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Speaker 6: So it makes complete sense also in CenTra earlier this

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Speaker 6: week that they keep on being holkersh.

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Speaker 2: I want to bring Mike back into the conversation. Mike,

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Speaker 2: while we're talking about us consumption. What's interesting is there

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Speaker 2: was our Bloomberg Economics team putting out a story basically

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Speaker 2: that the bulls are wrong to take comfort in solid spending. Basically,

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Speaker 2: they're saying, how bulls offer and say, hey, there's strong consumption,

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Speaker 2: that means things are okay, and that the US economies

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Speaker 2: nowhere near a recession. But what they basically say is

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Speaker 2: that you don't start to see consumer spending slow down

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Speaker 2: until we're actually in a recession, and that some measures

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Speaker 2: of consumption are more important, like durable goods weigh in

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Speaker 2: here on when you look at some of the personal

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Speaker 2: consumption numbers, what's really really important in what the Fed

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Speaker 2: probably pays attention to.

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Speaker 3: Well, that's paying attention to overall consumer spending, not on

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Speaker 3: a data point by data point basis. They want to

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Speaker 3: know that the economy is still seeing some strength. Now,

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Speaker 3: it's true, as the economics people pointed out, that real

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Speaker 3: spending has been lower after you adjust for inflation, it

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Speaker 3: has been lower. It hasn't been anything to write all about. Still,

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Speaker 3: it's been relatively positive, and we don't know whether it'll

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Speaker 3: start coming back or not. Maybe people take a breather,

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Speaker 3: but you know, I don't think that the FED is

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Speaker 3: too worried at this point about the consumer. They do

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Speaker 3: think that spending is going to slow, that things are

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Speaker 3: going to go according to their plan essentially, but at

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Speaker 3: this point there's nothing that would cause them to think

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Speaker 3: that they need to take any other action other than

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Speaker 3: what is in the markets. At least one rate move

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Speaker 3: and probably too.

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Speaker 2: So Mike, just to follow In terms of what's going

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Speaker 2: on inside the FED, are they really unanimous in their thought?

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Speaker 2: And I bring it up right, anonymous vote for that

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Speaker 2: June pause at least that's what came out. But you've

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Speaker 2: got you know, Raphael Bostik basically saying we're done. And

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Speaker 2: I understand he's, you know, a non voting member, But

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Speaker 2: is there more tension inside the FED that maybe says

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Speaker 2: things could play out differently depending on the data come

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Speaker 2: the next couple of meetings.

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Speaker 3: Sure there are people who are on the much more

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Speaker 3: dubbish side. One of the more dubbish people, Austin Gouldsby,

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Speaker 3: has deferred his decision on what he's going to do,

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Speaker 3: saying he hasn't made up his mind yet, but he

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Speaker 3: leans towards the dubtish side. And I think they could

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Speaker 3: have a split vote if we see inflation staying where

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Speaker 3: it is, or coming down just a little bit but

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Speaker 3: not enough, and consumer spending remaining strong enough. Because there

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Speaker 3: are others Mickey Bowman, who has made a lot of

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Speaker 3: comments about the economy being too strong and more needs

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Speaker 3: to be done. We haven't seen a descent from a

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Speaker 3: board member since two thousand and five, but one could

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Speaker 3: imagine that she would and possibly some others.

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Speaker 4: Hey, Torson, I want to ask a question that I've

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Speaker 4: got coming in from a listener. What level and unemployment

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Speaker 4: breaks the consumer? We were talking about that and the

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Speaker 4: broader economy. A higher unemployment means stress in credit card,

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Speaker 4: real estate services spending, and we've seen certainly credit card

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Speaker 4: usage jump and delinquencies start to rise as well, even

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Speaker 4: before student loan debt kicks back in.

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Speaker 6: Absolutely and that so just on your final point, absolutely,

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Speaker 6: what's really unique is to think about it. The unemployer

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Speaker 6: rate is essentially still at the lowest level in fifty years,

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Speaker 6: and we are already seeing delinquagy rates going up for

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Speaker 6: credit cards, for auto loans, We're beginning to see the

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Speaker 6: weekly data for bankruptcies for companies also beginning to move high.

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Speaker 6: So why all these things already starting to slow down

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Speaker 6: even before the unemployer rate it has moved up. So

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Speaker 6: I would take all that combined and answer your question

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Speaker 6: by saying that, well, at least the feed says that

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Speaker 6: in the long run, the unemployerent rate that we need

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Speaker 6: to go above is roughly four and a half, and

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Speaker 6: give it with we have three point seven. That means

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Speaker 6: that we have several months ahead of us where the

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Speaker 6: labor market needs to weaken before the event will begin

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Speaker 6: to say Okay, enough is enough.

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Speaker 7: At J.

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Speaker 6: Powell again in Central and Portugal earlier this week very

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Speaker 6: clearly said we need the label market to solve in

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Speaker 6: which is another way of saying we need the unemployer

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Speaker 6: rate to go up, and we have not really seen

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Speaker 6: the unplroner rate go up meaningfully. And well that at least,

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Speaker 6: in my view, one percentage point from here before we'll

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Speaker 6: begin to see a more meaningful slow down in the

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Speaker 6: broaday economy.

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Speaker 2: All right, guys, we got to run. Thank you so

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Speaker 2: much Tristan Slock, chief economist and partner over at Apollo

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Speaker 2: Global Management on the New York City, and our thanks

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Speaker 2: of course to our own Michael McKee, international economics and

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Speaker 2: policy correspondent at Bloomberg joining us on the phone in

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Speaker 2: New York City.

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Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us

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Speaker 1: Live weekday afternoons from three to six Eastern Listen on

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Speaker 1: Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app,

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Speaker 1: or wants us Live on YouTube.

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Speaker 2: I want to get to some other news that certainly

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Speaker 2: caught my attention on the Bloomberg today, the SEC pushing

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Speaker 2: back against a wave of filings by asset managers to

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Speaker 2: launch the first US exchange traded fun ETF that invest

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Speaker 2: directly in bitcoin, Matt. They said, the applications lack clarity

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Speaker 2: and further information is needed before they are considered for approval.

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Speaker 4: Yes, but they're going to get that. I think I

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Speaker 4: saw that NASDAK is going to go back as well

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Speaker 4: as the CBO. They're going to go back and refile

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Speaker 4: answer the questions that the SEC had. I am really

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Speaker 4: stumped as to the problems that the SEC has with

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Speaker 4: a spot bitcoin ETF, because bitcoin has been acknowledged, even

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Speaker 4: by Gary Gensler. It's a commodity, and there are a

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Speaker 4: lot of ETFs that hold commodities, and there are a

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Speaker 4: lot of commodities that are volatile, just like Bitcoin is volatile,

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Speaker 4: so I'm thinking back, if anybody can handle uh handle it,

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Speaker 4: Blackrock and Fidelity probably could.

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Speaker 2: One would hope. So let's see what Timothy Tully has

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Speaker 2: to say. He's see you at the digital asset wallet

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Speaker 2: Xelcore Technologies. He's on Zoom from Bethany Beach, Delaware. Tim,

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Speaker 2: good to have you back. It's been a few months here,

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Speaker 2: so what do you make of this?

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Speaker 7: Glad to be here. First of all, thank you Busy Friday. Yes. Interesting.

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Speaker 7: You know two days.

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Speaker 8: Ago we were talking about the two of the world's

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Speaker 8: largest asset managers fifteen trillion dollars in assets filing for

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Speaker 8: spot ets, right, so or the equivalent of five apples

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Speaker 8: as of today.

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Speaker 3: Right.

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Speaker 8: And so today the SEC comes back and says, pushes

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Speaker 8: back quickly. By the way, this pretty quick response under

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Speaker 8: really under ten days to the Blackrock filing, saying lack

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Speaker 8: of information and lack of clarity, and they need more information,

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Speaker 8: specifically some of the surveillance monitoring that Blackrock and Fideli

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Speaker 8: had proposed. So I think that's going to get ironed out.

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Speaker 8: I actually think the quick response here is a good thing.

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Speaker 8: I do think it's ironic that the SEC is saying

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Speaker 8: that their quick read says this has a lack of clarity,

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Speaker 8: it's choking with irony.

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Speaker 4: But I think really is It's almost like Gary Gensler's joking.

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Speaker 4: Is this some kind of satire?

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Speaker 8: It certainly feels that way, doesn't it. But look, I

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Speaker 8: think the reality is I think we all knew who

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Speaker 8: the CEO of Blackrock is. He's an aggressive democrat, He's

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Speaker 8: plugged into what's going on. BlackRock's batting average, I think

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Speaker 8: is five hundred and seventy five to one for their

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Speaker 8: ETF filings. They're going to win this one over time.

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Speaker 8: The question is when it's going to happen. And I

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Speaker 8: think for those of us in the crypto world, we

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Speaker 8: kind of mixed feelings, right because this is a really

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Speaker 8: good thing, particularly for the mass adoption crowd who sees

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Speaker 8: two bell Weather companies that are going to offer access

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Speaker 8: to bitcoin action in particular, and so I think that's great.

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Speaker 8: I think that's great for crypto. It's going to be

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Speaker 8: great for the broader crypto market. I think for me,

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Speaker 8: as somebody who's been in traditional finance for a long time,

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Speaker 8: the genesis for ETFs was to give everyone access to

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Speaker 8: commodities in particular, think about gold. Your average human couldn't

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Speaker 8: store and and and hold gold. It was it's impossible

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Speaker 8: to do that. So the ETFs were created. Blockchain technology

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Speaker 8: is specifically designed to address that particular issue. So I

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Speaker 8: think this is good short, short term, long term. I

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Speaker 8: hope we let the technology do its thing.

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Speaker 7: But the other thing I think, and I'm sure many

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Speaker 7: I know many people have cited.

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Speaker 8: This in the news, but bitcoin holders are and this

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Speaker 8: is I'm this has come from somebody who's been in

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Speaker 8: the equity world's most of his career, right. Bitcoin holders

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Speaker 8: are some of the longest holders, three to five years

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Speaker 8: of holding bitcoin. So you've got to fix applot have assets,

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Speaker 8: you've got a long holding, long hands holding bitcoin, and

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Speaker 8: then you've got these huge players coming in the market

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Speaker 8: trying to buy up apply. Price can only go one

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Speaker 8: direction when that happens, right, So it's going to be

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Speaker 8: really interesting about the timing how far in front of

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Speaker 8: the timing the market is. But I think we're going

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Speaker 8: to see some really positive price action a bitcoin over

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Speaker 8: time very quickly.

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Speaker 4: No, you've got to have the trust, you've got to

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Speaker 4: have the belief in the asset, right, And it does

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Speaker 4: look like we've had it for ten years and it's

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Speaker 4: built up. Right now or today, we hit an inter

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Speaker 4: day high on bitcoin as well. It was over thirty

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Speaker 4: one thousand dollars. Hadn't been that high since June seventh.

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Speaker 4: I think of last year and recall that it dropped

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Speaker 4: precipitously in the period a couple weeks last June. Right,

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Speaker 4: I wonder about you know, my take on the crisis

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Speaker 4: that we saw with FTX and the other exchange was

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Speaker 4: kind of serves you right for for keeping your bitcoin

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Speaker 4: in their centralized exchange, Like, that's not the point of

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Speaker 4: this asset. You're supposed to hold it yourself at home,

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Speaker 4: you know, maybe or wherever you like. But it's very

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Speaker 4: easy to put in cold storage and keep it safe.

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Speaker 5: Right.

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Speaker 7: Absolutely.

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Speaker 4: I think we're going to see non custodial exchanges really

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Speaker 4: flourish after this.

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Speaker 7: Couldn't agree with you more, Matt.

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Speaker 8: Obviously, my company is in the space of helping people

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Speaker 8: individuals buystorm manage their own crypto.

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Speaker 7: So I think.

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Speaker 4: Your product, by the way, what is your what is

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Speaker 4: your wallet?

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Speaker 7: So we have a non custodio solution.

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Speaker 8: We've been around for four or five years, multiplatforms, so

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Speaker 8: you can get on desktop and mobile and basically every

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Speaker 8: platform that you can think of. We support over seventy blockchains.

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Speaker 8: So we believe in the ethos of whatever you want

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Speaker 8: to hold, you can hold it on our wallet. And

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Speaker 8: we believe digital assets are here to stay. And we're

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Speaker 8: spending a lot of time talking about crypto finance, but

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Speaker 8: we really believe that crypto technology and all of insurance

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Speaker 8: and real estate and tokenized assets like securities and other things,

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Speaker 8: all those things will be digital assets that you'll want

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Speaker 8: to store in custody yourself, and our solution will help

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Speaker 8: you do that.

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Speaker 9: Well.

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Speaker 4: Wall Street definitely is with you on most of that,

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Speaker 4: probably not the custody part, but clearly even the big

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Speaker 4: banks know it's all going towards tokenization.

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Speaker 9: Absolutely.

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Speaker 2: Yeah, I get that part of it. I guess I

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Speaker 2: just still wonder that we're still figuring it out exactly

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Speaker 2: what cryptocurrencies are.

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Speaker 4: It's only been since two thousand and nine, Carol, I.

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Speaker 2: Know, but still I think, considering what we saw over

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Speaker 2: the last year, I think regulators are right to be

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Speaker 2: cautious as they move forward.

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Speaker 4: Yeah, well, what do you think about that, Timothy? I

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Speaker 4: mean cautious. I get it, just seems like a little

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Speaker 4: bit more than that and just.

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Speaker 2: Got about twenty five to thirty seconds.

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Speaker 8: Yeah, it absolutely feels like there's a lot more going

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Speaker 8: on there. I think everybody that's in the space believes

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Speaker 8: we need to have regulation, but we need clarity ourselves, right,

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Speaker 8: So what we're getting is a lack of clarity from

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Speaker 8: the administration and the SEC. And what we're seeing is

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Speaker 8: a lot of countries outside of the US being more

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Speaker 8: aggressive here. We want to be the innovation center for

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Speaker 8: the world. We're going to need to get our stuff

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Speaker 8: together here to make sure that people want to stay

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Speaker 8: and develop in the United States.

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Speaker 2: All right, Timothy, thanks so much. Have a great weekend

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Speaker 2: and a great holiday. Timothy Tully, CEO at the Digital

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Speaker 2: asset wallet Zelcore Technologies. Joining us on zoom from Bethany Beach, Delaware.

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Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us

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Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,

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Speaker 1: the Bloomberg Business App, and YouTube. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station,

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Speaker 1: Just Say Alexa, playing Bloomberg eleven.

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Speaker 2: Thirty Well women hold a third of P five hundred

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Speaker 2: board seats for the first time ever after scores of

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Speaker 2: men gave up their directorships in May, a long elusive

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Speaker 2: goal that's been touted as a baseline for lasting change.

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Speaker 2: The threshold was pastoring, the peak season for annual meetings

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Speaker 2: when many directors retire, men Matt vacating four times as

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Speaker 2: many seats than women. And this was according to a

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Speaker 2: recent data compiled by our team here at Bloomberg, reported

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Speaker 2: out by her Jeff Green, So we've seen a shift.

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Speaker 2: What's the matter?

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Speaker 6: Nothing?

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Speaker 2: Oh okay, you look, that's just my face perplexed. All right, well,

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Speaker 2: let's get to you. We've a perfect guest. Carolyn Everson

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Speaker 2: is board member of the not Worldwide, the global wedding marketplace.

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Speaker 2: They operate in sixteen countries. She's also board member at

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Speaker 2: the Walt Disney Company. Art under Armour. She is the president,

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Speaker 2: a former president of Instacart, former VP of Global Business

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Speaker 2: over at Meta, former corporate VP at Microsoft. We just

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Speaker 2: wanted to lay it out and she joins us on Zoom.

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Speaker 2: You have an incredible, incredible background. Carolyn, Thank you so

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Speaker 2: much for joining us.

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Speaker 9: Thank you for having me.

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Speaker 2: It's great to be on well and I want to

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Speaker 2: start with your background, because what is it. First of all,

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Speaker 2: we're going to get into corporate boards and we want

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Speaker 2: to talk about the business of the knot. But you know,

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Speaker 2: the media world, social media or the evolving traditional media world.

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Speaker 2: What do you find interesting and do you think should

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Speaker 2: be watched by our audience.

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Speaker 10: Well, I think the thing that is constant is change,

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Speaker 10: and what I would say to the audience is lean

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Speaker 10: into the change as much as possible, because the consumer

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Speaker 10: in many ways is moving faster than even companies are.

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Speaker 10: And this is there's a tremendous need for transformation still

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Speaker 10: in twenty twenty three, and that was even prior to

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Speaker 10: the advent of AI that everyone is talking about. There

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Speaker 10: were still many traditional companies that had to transform everything

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Speaker 10: that they were doing. And now AI is further putting

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Speaker 10: a further find point on that and accelerating change even faster.

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Speaker 4: So I mean, at the knot, does any change? Is

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Speaker 4: any change still necessary? It seems like the business is

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Speaker 4: very digital and very forward looking in terms of the

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Speaker 4: way weddings are planned. I happen to know because I

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Speaker 4: used the not to plan my wedding a couple of

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Speaker 4: years ago.

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Speaker 10: Oh well, thank you, thank you.

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Speaker 9: Very much.

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Speaker 10: Well, look, the let me take a step back and

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Speaker 10: just sort of set the context for the audience. The

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Speaker 10: wedding industry is a two hundred and fifty billion dollar industry.

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Speaker 10: It is extremely robust. Twenty twenty two was considered sort

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Speaker 10: of the super Bowl of weddings because there was such

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Speaker 10: pent up demand. We had two point six million I

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Speaker 10: dos in the United States alone this year'll it'll go

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Speaker 10: back to pre COVID levels at about two point one

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Speaker 10: million and then not have achieved its highest revenue and

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Speaker 10: its history in twenty twenty two with four hundred million

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Speaker 10: dollars in revenue, and it's been profitable for ten years.

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Speaker 10: So it is a very strong business. And yet one

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Speaker 10: of the reasons why I joined the board is I

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Speaker 10: think that we are going to go through a pretty

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Speaker 10: massive transformation. When you think about the advent of AI

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Speaker 10: and what it can do for wedding planning and allowing

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Speaker 10: couples to speak in natural language and have them not

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Speaker 10: be a real assistant to help them with their planning,

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Speaker 10: I think it's going to be a phenomenal user experience.

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Speaker 10: I think the data that we have to help our

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Speaker 10: eight hundred and fifty thousand vendors to serve their customers better.

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Speaker 10: Is just going to get stronger and stronger as we

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Speaker 10: utilize AI in our product development. So I'm very bullish

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Speaker 10: about the opportunity. We currently operate in sixteen countries, We've

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Speaker 10: got a lot of growth globally, and also it's a

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Speaker 10: very nascent advertising business, and having been part of the

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Speaker 10: team that helped build Meta's advertising business, I think there

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Speaker 10: is a pretty significant opportunity for us to do that

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Speaker 10: at the not What do.

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Speaker 2: You think though, in terms of you know, it's interesting

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Speaker 2: that you went there. In terms of advertising and Meta,

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Speaker 2: the evolution of ads maybe as a result of AI,

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Speaker 2: Is it going to change dramatically? Should we all be

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Speaker 2: kind of ready for something very different?

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Speaker 11: I think so.

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Speaker 10: I mean I'm already seeing significant change. So when you

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Speaker 10: think about the scale at which companies do advertising these

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Speaker 10: days across digital platforms, AI has actually been utilized by

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Speaker 10: companies like Meta and Google for years to get the

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Speaker 10: right ad to the right person at the right time.

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Speaker 10: So it's not like those companies just woke up and

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Speaker 10: at the end of November November thirtieth, when the world

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Speaker 10: woke up to chat GPT, AI is being utilized in

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Speaker 10: tech companies for many years to make the advertising smarter.

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Speaker 10: What I think you're going to see a big difference

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Speaker 10: is in the creative development. What we're seeing now is

440
00:22:43,359 --> 00:22:48,880
Speaker 10: using generative AI, marketers can literally put together thousands, if

441
00:22:48,880 --> 00:22:52,439
Speaker 10: not hundreds of thousands of varieties of campaigns in a

442
00:22:52,640 --> 00:22:56,000
Speaker 10: much more efficient and effective way than not has been

443
00:22:56,040 --> 00:22:58,879
Speaker 10: experimenting with some of that. Marketing has already seen a

444
00:22:58,920 --> 00:23:02,520
Speaker 10: twenty percent lift in conversion. So I think that's going

445
00:23:02,560 --> 00:23:05,800
Speaker 10: to be a pretty transformational trend in digital advertising.

446
00:23:06,400 --> 00:23:10,679
Speaker 2: You talk about transformational and boards are transforming. You are

447
00:23:10,760 --> 00:23:14,720
Speaker 2: part of that, and I am curious though, when you

448
00:23:14,760 --> 00:23:17,600
Speaker 2: in a week where we saw Supreme Court rulings dealing

449
00:23:17,680 --> 00:23:21,439
Speaker 2: with affirmative action, you rejecting the use of race in

450
00:23:21,560 --> 00:23:23,480
Speaker 2: university admissions. We've been talking about, well, how does that

451
00:23:23,560 --> 00:23:27,400
Speaker 2: maybe impact ultimately the business community. What are the conversations

452
00:23:27,440 --> 00:23:30,920
Speaker 2: that boards or companies are having as we see these changes.

453
00:23:32,720 --> 00:23:34,960
Speaker 10: My experience through all the companies that I have the

454
00:23:34,960 --> 00:23:38,120
Speaker 10: privilege of serving on is that they have an unwavering

455
00:23:38,200 --> 00:23:42,280
Speaker 10: commitment to the principles of diversity, equity, and inclusion, and

456
00:23:42,359 --> 00:23:46,560
Speaker 10: that is not going to change. I think the goal

457
00:23:46,920 --> 00:23:52,160
Speaker 10: is to have boardrooms represent a diverse set of individuals,

458
00:23:52,200 --> 00:23:55,840
Speaker 10: because that's the customer base that these companies are representing.

459
00:23:56,280 --> 00:23:59,320
Speaker 10: And diversity comes in many many forms. It can come

460
00:23:59,359 --> 00:24:03,879
Speaker 10: certainly and ender and race, sexual orientation, but geography plays

461
00:24:03,920 --> 00:24:07,280
Speaker 10: a factor in some of the board's experience. You know,

462
00:24:07,320 --> 00:24:09,320
Speaker 10: you have to have certain levels of experience to be

463
00:24:09,320 --> 00:24:13,080
Speaker 10: on the audit committee, for example. And so each search

464
00:24:13,240 --> 00:24:16,320
Speaker 10: that I have been part of, either for myself or

465
00:24:16,880 --> 00:24:19,359
Speaker 10: in looking at new colleagues that could potentially join the

466
00:24:19,359 --> 00:24:22,200
Speaker 10: boards that I'm on, there are a lot of criteria

467
00:24:22,359 --> 00:24:24,840
Speaker 10: that the Board of Directors goes through and really thinks

468
00:24:24,840 --> 00:24:28,840
Speaker 10: about what skill set does the boardroom need in order

469
00:24:28,880 --> 00:24:33,359
Speaker 10: to help advise management, and that can span many, many

470
00:24:33,400 --> 00:24:35,959
Speaker 10: different areas. And I think that there is an unwavering

471
00:24:36,040 --> 00:24:41,520
Speaker 10: commitment to making sure that boardrooms stay diverse, become more diverse,

472
00:24:41,840 --> 00:24:45,000
Speaker 10: but with a big capital D, because diversity of thought

473
00:24:45,480 --> 00:24:46,720
Speaker 10: can mean many different things.

474
00:24:47,080 --> 00:24:48,960
Speaker 2: Well, we've run out of time. I hope you will

475
00:24:48,960 --> 00:24:51,080
Speaker 2: come back because there's many, many more things I would

476
00:24:51,080 --> 00:24:52,479
Speaker 2: love to talk with you about, because I know you

477
00:24:52,480 --> 00:24:56,600
Speaker 2: co founded the Gun Safety Alliance and I'm curious about

478
00:24:56,680 --> 00:24:59,880
Speaker 2: which you work with business leaders and citizens to prevent

479
00:25:00,040 --> 00:25:02,159
Speaker 2: unnecessary gun deaths in the United States. But I do

480
00:25:02,600 --> 00:25:05,080
Speaker 2: would love to dig deeper into kind of the role

481
00:25:05,119 --> 00:25:08,240
Speaker 2: of corporate activism, if you will so, Carolyn, I hope

482
00:25:08,240 --> 00:25:10,399
Speaker 2: you'll come back soon. Carolyn Everson, board member at the

483
00:25:10,400 --> 00:25:13,679
Speaker 2: not Worldwide, also on the Disney board and more joining

484
00:25:13,720 --> 00:25:16,200
Speaker 2: us on Bloomberg brother.

485
00:25:16,600 --> 00:25:21,720
Speaker 4: Marc a journal How about you let me drive?

486
00:25:22,000 --> 00:25:24,000
Speaker 8: Oh no, no, no, no, who's going to drive?

487
00:25:25,080 --> 00:25:25,439
Speaker 3: Honey?

488
00:25:25,560 --> 00:25:27,320
Speaker 5: Please, I'll do the gravel.

489
00:25:27,920 --> 00:25:29,240
Speaker 7: Let's mate, I want to dry.

490
00:25:31,520 --> 00:25:32,440
Speaker 8: It's a good question.

491
00:25:36,240 --> 00:25:38,840
Speaker 5: This is the drive to the Globes dot com.

492
00:25:39,200 --> 00:25:40,880
Speaker 9: I think we'll buy yold.

493
00:25:40,720 --> 00:25:42,639
Speaker 1: It on Bloomberg Radio.

494
00:25:44,359 --> 00:25:47,200
Speaker 2: All right, everybody, we've got just about eighteen minutes left

495
00:25:47,200 --> 00:25:49,840
Speaker 2: in today's trading session, getting ready to wrap up the day,

496
00:25:50,280 --> 00:25:54,800
Speaker 2: the week, the quarter, the half, and the half. Yes, yeah,

497
00:25:54,960 --> 00:25:55,840
Speaker 2: I forgot the half.

498
00:25:56,240 --> 00:25:58,199
Speaker 4: Well you know I would normally forget the half too,

499
00:25:58,320 --> 00:26:01,720
Speaker 4: except for that stat at the NaSTA has had the

500
00:26:01,840 --> 00:26:05,800
Speaker 4: best half since well ever, it has ever the best

501
00:26:05,840 --> 00:26:08,920
Speaker 4: first half ever, in the best six months since nineteen

502
00:26:09,000 --> 00:26:11,920
Speaker 4: ninety nine. But it's just I didn't even like realize

503
00:26:12,000 --> 00:26:13,840
Speaker 4: this was going to happen until this morning.

504
00:26:14,119 --> 00:26:16,440
Speaker 2: You're not alone. Many people got the call on the

505
00:26:16,520 --> 00:26:18,440
Speaker 2: markets wrong, and I thought it was interesting what Scarlett

506
00:26:18,480 --> 00:26:20,639
Speaker 2: said earlier that here we are going into essentially a

507
00:26:20,720 --> 00:26:23,119
Speaker 2: holiday weekend, right, it's going to be quiet. It's already

508
00:26:23,240 --> 00:26:26,119
Speaker 2: kind of gotten quiet, and people are buying into this strille.

509
00:26:26,119 --> 00:26:27,960
Speaker 2: I think volume though, I feel like it was a

510
00:26:28,119 --> 00:26:30,840
Speaker 2: little bit lighter, but nonetheless, let's see what Ryan Kelly

511
00:26:30,920 --> 00:26:33,720
Speaker 2: has to say. He's chief investment officer and portfolio manager

512
00:26:33,720 --> 00:26:36,000
Speaker 2: of at Hennessee Funds, co manager of the Hennessy Gas

513
00:26:36,119 --> 00:26:38,720
Speaker 2: Utility Fund MidCap thirty as well, which has beaten nearly

514
00:26:38,760 --> 00:26:42,160
Speaker 2: all of its peers for five years and running, returning

515
00:26:42,200 --> 00:26:45,320
Speaker 2: on average about eleven percent annually, and the Hennessy Gas

516
00:26:45,440 --> 00:26:47,200
Speaker 2: Utility Fund beating most of its peers too in the

517
00:26:47,280 --> 00:26:49,560
Speaker 2: past year and month, up nearly few percent in the

518
00:26:49,560 --> 00:26:52,360
Speaker 2: past one month. He joins us on Zoom from Chapel Hill,

519
00:26:52,480 --> 00:26:56,000
Speaker 2: North Carolina. Hey, Ryan, nice to have you back. It's

520
00:26:56,040 --> 00:27:01,440
Speaker 2: been a little while this rally, especially from a handful

521
00:27:01,640 --> 00:27:06,320
Speaker 2: of the big megacap tech names and the NAZACA performance.

522
00:27:06,359 --> 00:27:10,720
Speaker 2: Does it make sense to you, Well, I.

523
00:27:10,760 --> 00:27:12,280
Speaker 11: Mean, you know, you have to look at where we

524
00:27:12,400 --> 00:27:16,240
Speaker 11: are over two years and with you know, the Nasdaq

525
00:27:16,320 --> 00:27:19,920
Speaker 11: being down so significantly last year and then roaring back

526
00:27:20,000 --> 00:27:22,960
Speaker 11: this year. I mean, overall, it's it's in a more

527
00:27:23,080 --> 00:27:26,600
Speaker 11: normal range, I guess i'd say, so, does it make sense?

528
00:27:26,680 --> 00:27:30,400
Speaker 11: I mean it seems a little bit fast for this year,

529
00:27:30,520 --> 00:27:33,399
Speaker 11: a little bit, a little bit aggressive. It's been driven

530
00:27:33,480 --> 00:27:37,680
Speaker 11: by a lot of you know, future promises, the future

531
00:27:37,720 --> 00:27:38,480
Speaker 11: promise of AI.

532
00:27:38,640 --> 00:27:39,440
Speaker 9: You know, that's part of it.

533
00:27:39,720 --> 00:27:42,080
Speaker 11: Although I really enjoy what you said earlier about your

534
00:27:42,119 --> 00:27:46,320
Speaker 11: iPhone being basically utility, because that's true.

535
00:27:46,320 --> 00:27:48,320
Speaker 9: I mean it comes to Apple. They're not really driven

536
00:27:48,400 --> 00:27:50,000
Speaker 9: by the whole AI crazy.

537
00:27:50,040 --> 00:27:52,640
Speaker 11: They just continue to do, you know, two hundred billion

538
00:27:52,640 --> 00:27:54,280
Speaker 11: dollars in sales every year, and what are you going

539
00:27:54,320 --> 00:27:54,639
Speaker 11: to do with that?

540
00:27:54,720 --> 00:27:57,840
Speaker 9: It's pretty amazing. So I don't think it's overdone.

541
00:27:57,920 --> 00:28:00,400
Speaker 11: I think that probably in the second half the year,

542
00:28:00,520 --> 00:28:02,680
Speaker 11: you might see, you know, slow down in some of

543
00:28:02,720 --> 00:28:06,320
Speaker 11: those sectors that have really done exceptionally well. We've seen

544
00:28:06,359 --> 00:28:11,080
Speaker 11: consumers do very well. Consumer discretionary has has really outperformed

545
00:28:11,119 --> 00:28:14,160
Speaker 11: this year, as well as the large cap tech names.

546
00:28:15,240 --> 00:28:17,399
Speaker 11: It's a it's a reversion of the meme, and I

547
00:28:17,440 --> 00:28:21,800
Speaker 11: think that we probably would not expect a similar kind

548
00:28:21,840 --> 00:28:25,439
Speaker 11: of experience next half of the year, but again over

549
00:28:25,560 --> 00:28:26,600
Speaker 11: two years, it's a little.

550
00:28:26,440 --> 00:28:27,560
Speaker 9: Bit more normal over time.

551
00:28:27,800 --> 00:28:30,080
Speaker 4: Yes, I want to say thank you for adding that,

552
00:28:30,680 --> 00:28:35,160
Speaker 4: for bringing us down to earth, because Rian, I hadn't

553
00:28:35,200 --> 00:28:37,280
Speaker 4: really even thought about that all day. I've just been

554
00:28:38,080 --> 00:28:41,280
Speaker 4: wrapped up in the hype of Wow, what an incredible

555
00:28:41,360 --> 00:28:44,440
Speaker 4: half that was, and wow, Apple's a three trillion dollar company,

556
00:28:44,640 --> 00:28:47,160
Speaker 4: and you know, we're on a tear, you know, even

557
00:28:47,240 --> 00:28:50,520
Speaker 4: into just today's trade. But you know, the high we

558
00:28:50,560 --> 00:28:53,240
Speaker 4: shouldn't forget, for the for the Nasdaq one hundred at least,

559
00:28:53,400 --> 00:28:55,640
Speaker 4: was at the end of twenty twenty one, and we

560
00:28:55,840 --> 00:29:00,920
Speaker 4: came really clattering down last year. It was an awful year,

561
00:29:01,000 --> 00:29:03,680
Speaker 4: and anybody who was even holding the cues, you know,

562
00:29:04,000 --> 00:29:08,240
Speaker 4: took a huge hit last year compared to you know,

563
00:29:09,520 --> 00:29:11,880
Speaker 4: the game that we've seen in the first half. They

564
00:29:11,960 --> 00:29:15,000
Speaker 4: haven't come back from that. So I think it's great

565
00:29:15,040 --> 00:29:18,480
Speaker 4: to get that perspective. What do you think happens as well,

566
00:29:18,800 --> 00:29:22,600
Speaker 4: when you know, people start to rotate into fixed income,

567
00:29:22,720 --> 00:29:25,720
Speaker 4: that's got to be a move, right, especially with yields

568
00:29:25,760 --> 00:29:29,000
Speaker 4: at this level. If you think the Fed's done, it

569
00:29:29,120 --> 00:29:31,000
Speaker 4: looks like people are making that move, some of them today.

570
00:29:32,360 --> 00:29:35,560
Speaker 11: It's true, I mean, it's fixed income, it's high yields

571
00:29:35,600 --> 00:29:38,480
Speaker 11: on anything that has a yield. In other words, we've

572
00:29:38,560 --> 00:29:41,960
Speaker 11: seen that pretty significantly all last year and then dramatically

573
00:29:42,040 --> 00:29:44,120
Speaker 11: in the first quarter of this year, where people have

574
00:29:44,200 --> 00:29:46,480
Speaker 11: been pulling money from the banks and moving and elsewhere.

575
00:29:47,480 --> 00:29:49,760
Speaker 11: Now you know, some of it's gone into the equity markets,

576
00:29:50,080 --> 00:29:52,240
Speaker 11: a lot of it's probably gone into you know.

577
00:29:52,360 --> 00:29:55,040
Speaker 9: Higher yielding money market funds.

578
00:29:56,120 --> 00:29:58,720
Speaker 11: And when you get rates up at that level, and

579
00:29:58,840 --> 00:30:01,560
Speaker 11: the long term return for say the Dow over one

580
00:30:01,600 --> 00:30:03,520
Speaker 11: hundred and forty years, one hundred and four years, I

581
00:30:03,560 --> 00:30:06,400
Speaker 11: should say, is close to ten percent, and you can

582
00:30:06,440 --> 00:30:09,240
Speaker 11: get five and a half percent with very little risk,

583
00:30:10,520 --> 00:30:14,360
Speaker 11: you know, it's it's compelling. But you know, overall, I

584
00:30:14,480 --> 00:30:18,360
Speaker 11: think that that money rotation is happening. But at the end,

585
00:30:18,560 --> 00:30:21,280
Speaker 11: but on the other hand, that's really what's also driving

586
00:30:21,320 --> 00:30:24,600
Speaker 11: a lot of this outperformance of the stock market in general,

587
00:30:24,640 --> 00:30:25,280
Speaker 11: and that's cash.

588
00:30:26,160 --> 00:30:27,600
Speaker 9: People have a lot of cash to invest.

589
00:30:27,720 --> 00:30:30,320
Speaker 11: Still, a lot of people who put their money in

590
00:30:30,360 --> 00:30:32,720
Speaker 11: the bank to do nothing with it for many years

591
00:30:33,680 --> 00:30:37,800
Speaker 11: now have opportunities to invest in equities or in fixed income,

592
00:30:38,400 --> 00:30:41,800
Speaker 11: and you know, cash on balance sheets of companies that

593
00:30:41,960 --> 00:30:44,120
Speaker 11: makes the companies stronger, they can reinvest in their own

594
00:30:44,160 --> 00:30:46,960
Speaker 11: stock through buybacks, they can give back higher dividends, so

595
00:30:47,840 --> 00:30:50,240
Speaker 11: you know, cash continues to drive this higher as well.

596
00:30:50,520 --> 00:30:52,920
Speaker 2: All right, what's not really driving the market higher at

597
00:30:53,000 --> 00:30:56,040
Speaker 2: least here in twenty twenty three are the energy names.

598
00:30:56,120 --> 00:31:00,000
Speaker 2: It's the worst major industry group or worst performing groups

599
00:31:00,280 --> 00:31:02,520
Speaker 2: major industry group in the S and P five hundred

600
00:31:02,560 --> 00:31:04,760
Speaker 2: out of eleven. It's down about seven percent. Now, mind you,

601
00:31:04,840 --> 00:31:09,200
Speaker 2: it's after two blockbuster years where there was way out performance.

602
00:31:09,600 --> 00:31:11,680
Speaker 2: But you guys have a fun where you have to

603
00:31:11,960 --> 00:31:14,280
Speaker 2: think about utilities, gas utility in particular.

604
00:31:14,640 --> 00:31:15,800
Speaker 6: So what is it?

605
00:31:16,200 --> 00:31:18,200
Speaker 2: Where are you finding opportunities there?

606
00:31:19,600 --> 00:31:23,560
Speaker 11: Sure, well, you know we're finding opportunities in utilities because

607
00:31:23,920 --> 00:31:27,920
Speaker 11: it's actually not as much well it's not really dependent

608
00:31:28,040 --> 00:31:30,560
Speaker 11: on the price of natural gas or the price of oil,

609
00:31:30,680 --> 00:31:33,240
Speaker 11: or the price of whatever input there is to create

610
00:31:33,320 --> 00:31:36,960
Speaker 11: the energy. You know, these utilities like your iPhone, you

611
00:31:37,120 --> 00:31:37,720
Speaker 11: use it every day.

612
00:31:38,000 --> 00:31:39,000
Speaker 9: You have to use the energy.

613
00:31:39,080 --> 00:31:39,760
Speaker 3: You know you need that.

614
00:31:40,040 --> 00:31:47,080
Speaker 11: And you know, utilities make money by basically moving in

615
00:31:47,200 --> 00:31:50,360
Speaker 11: this case natural gas through their pipelines to the end customer.

616
00:31:50,560 --> 00:31:53,000
Speaker 9: So you know, there's actually believe it or not.

617
00:31:53,960 --> 00:31:58,440
Speaker 11: A pretty significant opportunity in utilities. I understand, utilities are defensives,

618
00:31:58,680 --> 00:32:03,520
Speaker 11: utilities paid dividend, they have that you know, nice downside protection.

619
00:32:04,560 --> 00:32:07,720
Speaker 9: But if you look forward.

620
00:32:07,440 --> 00:32:10,920
Speaker 11: Over you know, many years and even many decades, this

621
00:32:11,480 --> 00:32:16,840
Speaker 11: push towards the electrification of everything, towards a cleaner energy

622
00:32:16,920 --> 00:32:20,920
Speaker 11: future means that we need an incredible build out of

623
00:32:21,480 --> 00:32:24,480
Speaker 11: the utility sector. And you know, in our fund, we

624
00:32:24,600 --> 00:32:27,520
Speaker 11: have about fifty percent of the fund is invested in

625
00:32:28,120 --> 00:32:31,640
Speaker 11: electric and multi utilities, which have both you know, some

626
00:32:31,840 --> 00:32:33,000
Speaker 11: natural gas components.

627
00:32:33,800 --> 00:32:35,240
Speaker 9: Even the natural gas utilities.

628
00:32:35,280 --> 00:32:38,640
Speaker 11: There's a lot of opportunity there as well as they

629
00:32:38,760 --> 00:32:42,920
Speaker 11: continue to develop hydrogen, you know, a renewable natural gas,

630
00:32:43,000 --> 00:32:45,880
Speaker 11: et cetera. But this really, you know, and I have

631
00:32:45,920 --> 00:32:49,240
Speaker 11: to give credit to some of your analysts at Bloomberg.

632
00:32:49,240 --> 00:32:51,840
Speaker 11: They did an incredible job, especially in the Bloomberg New

633
00:32:51,960 --> 00:32:55,200
Speaker 11: Energy Finance Division. I'm going to read some of these numbers.

634
00:32:55,480 --> 00:32:57,640
Speaker 11: It's going to take one hundred and ninety six trillion

635
00:32:57,720 --> 00:33:01,400
Speaker 11: dollars by twenty fifty to reach the goals that we

636
00:33:01,480 --> 00:33:06,320
Speaker 11: need to get. It's going to take you know, clean

637
00:33:06,480 --> 00:33:09,560
Speaker 11: energy is eight gigawatts of capacity now it needs to

638
00:33:09,600 --> 00:33:13,200
Speaker 11: go to forty you know you need to add sixty

639
00:33:13,280 --> 00:33:18,560
Speaker 11: nine million miles of cable. So the way utilities work

640
00:33:18,720 --> 00:33:21,200
Speaker 11: are when they invest in their business, when they invest

641
00:33:21,360 --> 00:33:25,040
Speaker 11: in Radom r Grid, that team's growth for the company

642
00:33:25,040 --> 00:33:26,600
Speaker 11: and that BILS earning over line.

643
00:33:26,720 --> 00:33:28,960
Speaker 2: Well, breach, get your perspective and also bring us down

644
00:33:28,960 --> 00:33:31,360
Speaker 2: to Eric Obecca the run up that we've seen, certainly

645
00:33:31,400 --> 00:33:33,640
Speaker 2: on the tech side of things. Tech stocs, Ryan Kelly,

646
00:33:33,680 --> 00:33:35,280
Speaker 2: have a good weekend at Hennessey Funds.

647
00:33:35,400 --> 00:33:36,160
Speaker 5: This is Bloomberg.

648
00:33:37,440 --> 00:33:41,240
Speaker 1: This is the Bloomberg Business Week podcast of a Little Apple,

649
00:33:41,520 --> 00:33:45,400
Speaker 1: Spotify and anywhere else you get your podcast. Listen live

650
00:33:45,560 --> 00:33:49,400
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651
00:33:49,640 --> 00:33:52,920
Speaker 1: the iHeartRadio app tune In, and the Bloomberg Business App.

652
00:33:53,000 --> 00:33:55,920
Speaker 1: You can also watch us live every weekday on YouTube

653
00:33:56,200 --> 00:33:58,400
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