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Speaker 2: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside

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Speaker 2: my co host Matt Miller.

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Speaker 1: Every business day we bring you interviews from CEOs, market pros,

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Speaker 1: and Bloomberg experts, along with essential market moven News.

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Speaker 2: Find the Bloomberg Markets Podcast called Apple Podcasts or wherever

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Speaker 2: you listen to podcasts, and at Bloomberg dot com slash podcast.

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Speaker 2: Ben Emmons joins us here in our Bloomberg Interactive Broker studio.

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Speaker 2: He doesn't mail it in or own it, and he's

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Speaker 2: a principal, senior portfolio manager and head of fixed Income

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Speaker 2: at New Edge wealth. Been lots of economic data today

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Speaker 2: and really this week here I don't know. I mean

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Speaker 2: this services data kind of took me by surprise. Here

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Speaker 2: again the ism services data, and we talk about services,

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Speaker 2: it's important. It's seventy percent of our economy came in

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Speaker 2: at fifty point six, so it's still above fifty, still

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Speaker 2: showing some expansion in the economy, but well below last

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Speaker 2: month and well below the consensus of fifty two point five.

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Speaker 2: That's kind of got the bonds here, yields coming in

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Speaker 2: a little bit in stocks higher. What would you make

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Speaker 2: of that services data, yep.

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Speaker 3: Paul, I thought that the surprise there was that employment components,

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Speaker 3: you know, dropping below fifty free sharply.

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Speaker 2: Yep.

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Speaker 3: I think that's what that triggered the rally in bonds

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Speaker 3: because it's a bit contradicting to what we saw yesterday

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Speaker 3: with the b ANDI services data. Now, the surveys a

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Speaker 3: little different from each other, but nonetheless in the employment component,

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Speaker 3: that survey was up and it was actually I think

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Speaker 3: part of the reason why we saw about a payroll

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Speaker 3: data this morning. So I guess this survey is indicating that,

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Speaker 3: you know, some of the people in the supply management

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Speaker 3: survey view that the economy is perhaps getting weaker or

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Speaker 3: they're having less demand for labor. Either way, you're getting

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Speaker 3: this whipsite on the market this morning. You goes up

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Speaker 3: to four point ten on the ten year on the

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Speaker 3: pay roverboard and reverse back down between ninety six. So

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Speaker 3: I think what it tells us is that this is

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Speaker 3: a good economy. There will be some ray cuts coming

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Speaker 3: in the future, but it is not like a recession

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Speaker 3: economy either, so you're not see much lower yields I

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Speaker 3: think from here.

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Speaker 4: Yeah, So but let's get into the rate cuts that

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Speaker 4: you talked about. Because we have the jobs that we

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Speaker 4: have ism, you also get resource from Wall Street firms,

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Speaker 4: from banks, So when do you see these rate cuts

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Speaker 4: possibly kicking in it?

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Speaker 3: So I think the March raycut is probably too soon,

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Speaker 3: and that's just because the way the Fed is communicated

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Speaker 3: that so far, you know, they've given us an idea

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Speaker 3: that they are in projections out that probably gives them

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Speaker 3: the confidence that they can actually this year can lower

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Speaker 3: rates compared to last year when they said resoundingly like

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Speaker 3: there's no case for raycouts. But a March raycot would

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Speaker 3: mean that inflation data we're getting out until that time

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Speaker 3: would see such significant decline that they start reacting to

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Speaker 3: that and then make the case that March is the

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Speaker 3: live meeting. So I think from the here at LISA,

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Speaker 3: it will be more about as we're getting several months

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Speaker 3: of inflation employment data, and it could used to go

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Speaker 3: towards the you know, the goal that they have two

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Speaker 3: percent inflation and unemployment rate maybe a little bit above four.

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Speaker 3: That probably is more close to the June to get

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Speaker 3: the first ray cut and then we really are into

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Speaker 3: the second half of the year, So I don't think

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Speaker 3: you're going to see six raycouts this year. So, Ben,

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Speaker 3: what did you.

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Speaker 2: Make We haven't spoken to you in a while here.

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Speaker 2: What did you make of that big move we've saw

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Speaker 2: in the markets there in the last I don't know,

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Speaker 2: ten weeks of the year. Last year, we just had

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Speaker 2: the ten year ago from five percent to three and

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Speaker 2: a quarter. We had the stocks just rip. I mean,

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Speaker 2: what was that?

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Speaker 5: Yeah?

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Speaker 3: Actually the right right in a way to say, what

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Speaker 3: was it really about? Was it just about yields going down?

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Speaker 3: Because one CPI reports showed that the owner's equipmental event

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Speaker 3: finally starts to decline. I don't see it in New York.

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Speaker 3: But okay, it's it's finally declining. So that triggered the

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Speaker 3: move down and yields and there was a relief, and

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Speaker 3: you're getting all the high beta and small caps and

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Speaker 3: everything start to pricing this idea that yeah, Okay, the

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Speaker 3: economy is not going to go to a recession. It

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Speaker 3: will be a soft landing, maybe even no landing. I think,

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Speaker 3: because it's just simply an economy is staying on track.

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Speaker 3: And at the same time, it's about those who had

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Speaker 3: money on the sidelines redeploying in something that lacked relative

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Speaker 3: to technology, so sort of a relative catch up that

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Speaker 3: I think all I think what drove this rally. Now

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Speaker 3: will it continue is to be seen because I think

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Speaker 3: what we're coming into this year is that we're going

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Speaker 3: to keep a fat still restricted for a bit of time.

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Speaker 3: So the economy, if it does stay in the slower

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Speaker 3: track than last year, you know, you may see stocks

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Speaker 3: not perform so strongly. If it's a lie, she has

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Speaker 3: yields to sort of stay where we are, And I

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Speaker 3: think that there's a really important part about that story. Ultimately,

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Speaker 3: it's all about interest rates.

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Speaker 4: Now, but a strong drug jobs market. It's that main

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Speaker 4: kind of engine for resilient consumer spending, and it's pushed

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Speaker 4: a lot of economists to rethink their recession calls. What's

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Speaker 4: what's your take on that.

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Speaker 3: Yeah, I think the recession call, I've never been in

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Speaker 3: that camp. I still think there's no recession this year.

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Speaker 3: It may not even be next year. I think here's

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Speaker 3: where I come from. This important point to make maybe

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Speaker 3: is that the fiscal impulse that we have to the economy,

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Speaker 3: fiscal spending is not going to change this year. They

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Speaker 3: have agreed on the dead seating last year. They have

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Speaker 3: one percent mandatory spending cut across the board. But that's

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Speaker 3: so small if you think about back in twenty eleven

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Speaker 3: twelve when they had a ten percent mandatory spending cut,

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Speaker 3: which really slowed down the economy. One percent is just

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Speaker 3: not going to do much for the economy. Especially I've

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Speaker 3: seeing job stated like this coming out, and you're seeing

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Speaker 3: confidence picking up and financial conditions being looser. So I

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Speaker 3: think it's an economy that stays on track. What could

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Speaker 3: change it is next year whomever was in the White House.

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Speaker 3: But here's one other things about that White House race,

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Speaker 3: the new president. But it's buy no Trump, which what

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Speaker 3: it looks like either of them wants to stimulate the economy,

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Speaker 3: either with text cuts or with more spending. So either way,

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Speaker 3: I think this recession scenario is not going to play

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Speaker 3: out unless we getting major fiscal spending contraction. As I mentioned,

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Speaker 3: I don't think that's the case.

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Speaker 2: So given that backdrop, Ben kind of what's your best

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Speaker 2: idea here? Coming into twenty twenty four, A lot of

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Speaker 2: folks were saying, hey, just be long equity markets, but

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Speaker 2: then you had that huge run up in the end

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Speaker 2: of the year and maybe some of the glory was

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Speaker 2: taken out of there. What's your best idea or do

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Speaker 2: you think about twenty four?

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Speaker 3: Well, we do look carefully at new edge valuations, and

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Speaker 3: you know MC colleague Cameron Dawson who was on Bloomberg's

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Speaker 3: events the other day, she kind of make the case

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Speaker 3: on that too. It's saying, look, we do have overvaluation

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Speaker 3: in tech and the adjustment of interest rates a bit higher.

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Speaker 3: For me, I guess economy, it's just better takes off

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Speaker 3: some of that that that valuation fraft that's in there

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Speaker 3: with those also some I think some level of frath

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Speaker 3: coming into uh you know, really Higbida elements of the market,

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Speaker 3: so I think you want to play it more a

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Speaker 3: bit more defense. We like energy, we like utility sector,

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Speaker 3: like some of the healthcare sector. You really pick your

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Speaker 3: best parts there. There's very some stocks are very undervalued

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Speaker 3: relative to the marketing, trading really at low multiples, and

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Speaker 3: actually the earning forecast much were realistic.

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Speaker 2: So not chasing. I guess those magnificent seven.

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Speaker 3: Not not really so to the call like, yeah, jefferis

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Speaker 3: like Microsoft. We all know that Microsoft is a great company.

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Speaker 3: It's good and strong, but you will be chasing it

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Speaker 3: probably here at these valuation levels. But I like and

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Speaker 3: fixed income, and also I think inequity is that emerging

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Speaker 3: markets is an interesting story because we are coming off

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Speaker 3: really restrictive rates in emerging markets and inflation is really moderated.

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Speaker 6: There.

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Speaker 3: There's some really good earning growth stories both Asia and

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Speaker 3: Latin America, so I think there's an opportunity. We like Japan,

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Speaker 3: there's another market that's contasued to be outperformer. And international equity.

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Speaker 3: And then lastly, we gotta watch what the dollar is

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Speaker 3: going to do this year. If the Fat's going to

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Speaker 3: lower rates, it's gonna lead like into a week a

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Speaker 3: dollar environment every time the dollar does go below a

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Speaker 3: haunted on the index, it leads to significant rally and

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Speaker 3: energy and commodities. It's been that historically that way. I

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Speaker 3: don't think it's going to be different this way this

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Speaker 3: year and now whatever happens with ge politically, Energy is

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Speaker 3: I think a bit unvalued from where it is currently.

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Speaker 3: Same thing some someone in commodities. Lastly, gold could actually

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Speaker 3: be a strong air for gold given uncertainty and fat

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Speaker 3: easy it performs quite well in that environment.

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Speaker 4: And just a quick I want to get an idea

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Speaker 4: of sentiment out there. I mean, you think rising interest

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Speaker 4: rates makes it more expensive for companies to operate. I

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Speaker 4: mean some of your clients, they're entrepreneurs, their corporate executives.

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Speaker 4: What's the feeling that they're getting out there?

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Speaker 3: Now, Wow, there's caution and nowice this. Obviously, we do

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Speaker 3: deal with this election and it's it's uncertainty. We also

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Speaker 3: just do the fat discussion. It's not clear right if

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Speaker 3: you're actually going to get these raycouts and how many

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Speaker 3: uncertainty while watching what's going on in the Middle East,

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Speaker 3: and we don't know how that's going to exactly play out.

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Speaker 3: So uncertainty. On the other hand, there doesn't seem to

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Speaker 3: be this slowdown that everybody can teach to talk about

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Speaker 3: that the solda and that tips us into a recession.

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Speaker 3: So I think that our clients are more about, you know,

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Speaker 3: we like risk. We'd like to not be out of

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Speaker 3: the market. We still like some of the areas like

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Speaker 3: private credit or private equity. That's not something we want

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Speaker 3: to necessarily skill completely out of it because of recession risk.

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Speaker 3: But we don't want you to play the high beta

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Speaker 3: trade either, and meaning you know, going reading in high

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Speaker 3: risk really small small small caps or you know, go

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Speaker 3: into I don't know crypto and things like that. You know,

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Speaker 3: we don't want to play the liquidity high risk game

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Speaker 3: that way, and be mindful that we do have fixed income.

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Speaker 3: We can we can finally get some additional income that's

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Speaker 3: still really important in the portfolio this year.

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Speaker 2: Thanks so much for joining us, Benham's principal at New

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Speaker 2: Edge Wealth.

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Speaker 5: You're listening to the team Ken's a our live program,

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Speaker 5: Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com,

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Speaker 5: the iHeartRadio app, and the Bloomberg Business app, or listen

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Speaker 5: on demand wherever you get your podcasts.

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Speaker 2: There is no greater friend to the municipal bond market

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Speaker 2: than me. I tell every governor of the State of

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Speaker 2: New Jersey, I'm probably the largest private creditor to the

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Speaker 2: State of New Jersey through my municipal bond holdings. Chris

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Speaker 2: Burgante Brigatti, he thinks he knows a thing or two

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Speaker 2: about it. But Senior vice president Director Strategic Planning at SWBC, Hey, Chris,

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Speaker 2: thanks so much for joining us here in studio. Fixed

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Speaker 2: income actually had a positive year last year in terms

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Speaker 2: of total return. How did the municipal bond market do?

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Speaker 7: The municipal bond market had a very good year, and

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Speaker 7: it all really happened in the last two months of

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Speaker 7: the year. It was negative coming into and through October,

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Speaker 7: so the performance actually turned quite positive about six point

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Speaker 7: four percent to the positive by the end of the

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Speaker 7: year with over seven percent return is coming in November December.

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Speaker 2: All right, So what are we doing here with the

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Speaker 2: unicipal bond market in twenty twenty four. What's the call here?

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Speaker 7: The call is to be very strategic in terms of

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Speaker 7: how you approach a market and delegate your capital. A

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Speaker 7: lot of the investors that we're talking to and a

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Speaker 7: lot of the people that we engaged directly, are really

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Speaker 7: kind of being very cautious on their credit approach, not

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Speaker 7: really going too far out on the credit curve because

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Speaker 7: those credit spreads and narrow significantly in the rally through

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Speaker 7: November and December. So now it's a matter of when

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Speaker 7: can you re engage the market in a more strategic

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Speaker 7: manner further out the curve or down the credit curve,

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Speaker 7: And I think both of those opportunities could happen this year.

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Speaker 7: But I do expect this to be another quite constructive

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Speaker 7: year for the market in general.

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Speaker 2: So what else are we doing in the fixed the

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Speaker 2: gum space here, because I you know, twenty twenty two

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Speaker 2: is so brutal for across fixed income space, double digit

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Speaker 2: declines declient is like the fixing the market had never

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Speaker 2: really seen had some positive results in twenty twenty three.

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Speaker 2: Any reason for me to own bonds here in twenty twenty.

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Speaker 7: Four, I think there still are. You know, you look

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Speaker 7: at the fact that we've got real good yields that

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Speaker 7: we have not seen in well over a decade. So

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Speaker 7: for a longer term perspective, you start looking at that,

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Speaker 7: and you know, if you're going to be clipping coupons

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Speaker 7: and be able to grab that four percent yield if

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Speaker 7: rates remained unchanged, barring the expectation for lower rate environment,

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Speaker 7: which would add additional performance to a bond. If you

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Speaker 7: can lock in four percent or better type of yields

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Speaker 7: in this market, you're really looking at strong performance in chase.

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Speaker 4: Dig a little bit deeper into what banks are doing

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Speaker 4: with some of them munity teams.

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Speaker 2: Your city they announced at getting out of the municipal

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Speaker 2: ball market. They did they can't do that.

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Speaker 7: It's amazing they've they've made that announcement in backing out

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Speaker 7: of the market. I mean the market is becoming tougher

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Speaker 7: and tougher, spreads are narrow, it's becoming much more constrained.

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Speaker 7: Regulators aren't helping. I'm not going to really kind of

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Speaker 7: go down that path too deeply, but it's a challenging

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Speaker 7: market for banks to make money in. And so the

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Speaker 7: strategy and the way you approach it is how can

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Speaker 7: you embed yourself deeper and better with clients to provide

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Speaker 7: better service. And that's one of the goals that we're

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Speaker 7: trying to produce at SWBC is how can we ingrain

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Speaker 7: ourselves as a partner to those clients and really add

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Speaker 7: value SBbc stand for Southwest Business Court.

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Speaker 2: Southwest where you guys based.

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Speaker 7: San Antonio, Texas's headquarter.

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Speaker 3: Nice?

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Speaker 2: Is that where you're from?

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Speaker 3: No?

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Speaker 7: No, I'm Northern New Jersey.

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Speaker 2: Here in northern New Jersey. Okay, I'm a big fan

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Speaker 2: of San anton all right. So in the I don't

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Speaker 2: know where are we going to see a new issuance

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Speaker 2: this year? I mean, am I going to see a

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Speaker 2: bunch of new fixed income issueans, credit issuance? High yield

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Speaker 2: municipal bonds? Am I going to see a bunch of issuance?

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Speaker 2: Now that interest rates are coming down? Do you think?

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Speaker 6: I think so?

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Speaker 7: I think the opportunity for issuance to rise is twofold

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Speaker 7: when you look at what happened with the taxable municipal

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Speaker 7: market last year, which was down about thirty percent in

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Speaker 7: terms of issuance. So I expect that to rebound a

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Speaker 7: little bit. Last year, issuance came in around three hundred

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Speaker 7: and eighty billion dollars, which was a few percentage points

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Speaker 7: lower than the previous year in twenty two. I expect

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Speaker 7: this year to be a little bit north of four hundred.

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Speaker 2: And an average year is like five six hundred.

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Speaker 7: No, an average year of late has been somewhere in

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Speaker 7: that mid to.

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Speaker 2: Low force mid force.

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Speaker 7: Yeah, yeah, so I expect to get more towards the

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Speaker 7: average and the opportunity for investors who engage that should

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Speaker 7: be well stated.

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Speaker 2: But the municipal bond like I've been told in the

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Speaker 2: past that municipal bond issuers, municipalities, they don't issue money

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Speaker 2: when rates are low per se, they issue money when

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Speaker 2: they need it. Correct, So aren't we having a bunch

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Speaker 2: of like infrastructure acts and things like that. Don't have

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Speaker 2: a bunch of stuff going from the federal grim that

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Speaker 2: needs to be funded in municipal bond market.

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Speaker 7: There are You know, it's funny when the infrastructure bill

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Speaker 7: came out several years ago, the market got all heady

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Speaker 7: and for lack of a better way of putting it, in

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Speaker 7: terms of the opportunity for more issuance to come. But

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Speaker 7: those infrastructure things take time to build. It takes years

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Speaker 7: to get through the system through the process at local

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Speaker 7: or even larger municipalities to be able to construct that

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Speaker 7: new road, to do something with a bridge. All those

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Speaker 7: infrastructure projects take time to even get started. So once

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Speaker 7: they get started, that's when the borrowing is going to happen,

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Speaker 7: and I think that we kind of got through twenty

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Speaker 7: twenty three with the huge spiking yields we saw in

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Speaker 7: October that scared a lot of people. Now that it's

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Speaker 7: kind of more normalized, I think that the issuers are

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Speaker 7: going to come back into the market, and they, like

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Speaker 7: you said, they're going to come in when they have

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Speaker 7: and when they don't have to and rates are high,

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Speaker 7: they stayed as far away as they can. So now

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Speaker 7: it's the opportunity is going to be there, and I

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Speaker 7: think they're going to come in quite strongly.

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Speaker 2: So who are buyers of municipal bonds these days? I'm

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Speaker 2: likely retail versus institutional. How does that split look today

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Speaker 2: and maybe how's that changed over the last decade or so.

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Speaker 7: Yeah, you know, that's one of the most interesting things,

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Speaker 7: and that's one of the things we're trying to be

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Speaker 7: aware of at SWBC is the retail investor has historically

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Speaker 7: been a strong participant in the municipal market. Their participation

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Speaker 7: has shifted less away from the funds. ETFs have kind

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Speaker 7: of picked up some of the fund bandwidth and fund opportunity,

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Speaker 7: but the small accounts that are managed by portfolio managers,

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Speaker 7: so they're professionally managed, but it's an SMA. Those types

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Speaker 7: of accounts are really where most of the opportunity is,

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Speaker 7: and that has grown by more than double in the

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Speaker 7: past several years. So those investors are really participating strongly

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Speaker 7: and reaping the benefits tax for yield.

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Speaker 2: What's not to like, Yeah, exactly. And so what's the

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Speaker 2: credit quality in the municipal space. I'm actually surprised. I mean,

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Speaker 2: always the Puerto Rico issue or something out of Illinois

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Speaker 2: or something like that. But other than some of those

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Speaker 2: weird situations, I haven't heard of any cracks of note

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Speaker 2: in the municipal bond market really for years.

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Speaker 7: It's been several years, you know. You look at the

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Speaker 7: fact that the federal government allowed for some of the

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Speaker 7: infrastructure bill, some of the opportunity for federal aid or

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Speaker 7: during the pandemic and COVID, so a lot of issuers

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Speaker 7: have built up a reserve of funds as a result

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Speaker 7: of that. So the credits are actually quite high, higher

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Speaker 7: than they possibly would otherwise be. But generally the municipal

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Speaker 7: market is really really solid footing. I mean, most of

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Speaker 7: the space could take most of the investment and opportunity

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Speaker 7: to take space in the double triple B and higher

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Speaker 7: investment grade. That's where the vast majority of issuance is

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Speaker 7: and the default rate on those is less than one percent.

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Speaker 7: So the only thing time you hear about something like

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Speaker 7: that is sketch your credits in odd different markets. Healthcare

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Speaker 7: is notoriously a challenge some of the housing market as well.

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Speaker 7: And then you get the odd issuers and the Puerto

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Speaker 7: Rico story I always rears its head.

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Speaker 2: Then there's the ball across the river there.

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Speaker 8: Exactly what's going on with that?

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Speaker 2: What's the dream mall? I think, yeah, yeah, somebody would.

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Speaker 2: I mean, that is fascinating to me. I remember when

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Speaker 2: that issue came to market, I said, I know nothing

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Speaker 2: about the dream mall. I know nothing about the municipal

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Speaker 2: bond market, but I wouldn't go near that bond issuance.

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Speaker 2: I mean, I couldn't see how that thing would actually

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Speaker 2: be successful, much less pay me back my principle.

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Speaker 3: Have you been there?

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Speaker 8: No, that's still nice.

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Speaker 2: That's the point either.

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Speaker 7: I know, you know, it's in a tough location for

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Speaker 7: New Yorkers especially, it's it's not easier fund to go

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Speaker 7: over the bridge and then travel through there. And you know,

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Speaker 7: my kids have been there to go on some of

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Speaker 7: the rides and do some of those things, and they

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Speaker 7: enjoy it. But I haven't stepped foot in myself either.

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Speaker 7: And it's a tough credit, that's for sure.

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Speaker 6: All Right.

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Speaker 2: What are some of the sectors that you think are

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Speaker 2: going to be interesting in twenty twenty four?

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Speaker 7: You know, I always mention things that are quality revenue

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Speaker 7: bonds that I really like, and you know, you go

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Speaker 7: down the path of water and sewer bonds. Everyone has

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Speaker 7: to pay their water bill, it needs to or so

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Speaker 7: I think in terms of higher credit quality, that's definitely

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Speaker 7: on the plate. I think that office opportunity, other things

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Speaker 7: that make sense, or some of the better higher quality

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Speaker 7: education bonds the well known names for lack of a

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Speaker 7: better way of putting it, and then transportation transportation revenue bonds,

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00:18:08,320 --> 00:18:10,719
Speaker 7: bigger airport revenue bonds, those sorts of things are going

403
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Speaker 7: to be on the uptrend, I believe.

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Speaker 2: How about education, because we've seen some stories about how

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Speaker 2: if you're a small, mid size liberal arts college, that's

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Speaker 2: a tough business. And I've seen some issuance. I've seen

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Speaker 2: some issuance from secondary schools, prep schools and things like that.

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Speaker 2: I can't remember which the issue was, but one of

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Speaker 2: the top prep schools. How about those education back bonds?

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Speaker 2: How do you think about those?

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Speaker 7: You know, to your point, it depends on the name

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Speaker 7: and ten bands on the issuer and the credit you

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Speaker 7: really got and kind of understand and digg into weeds

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Speaker 7: a little bit to understand what is the underlying credit

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Speaker 7: quality of each one. And to your point, you know,

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Speaker 7: you stick to the higher names that are very well

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Speaker 7: known the place where it's ivy leagues, et cetera. You know,

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Speaker 7: those names stand up very well. They have very strong participation,

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Speaker 7: Their endowment programs are enormous, and when you look at

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Speaker 7: their acceptance rates, they still have low acceptance percentages, meaning

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Speaker 7: a lot of people still want to go there and

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Speaker 7: very few still get in. You look down the curve

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Speaker 7: and you start looking at some of the less well

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Speaker 7: known issuers.

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Speaker 6: The liberal arts colleges.

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Speaker 7: That you mentioned, they're having a tougher time attracting retaining people,

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Speaker 7: and I think COVID was not helpful for that construct.

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Speaker 7: They definitely suffered in terms of people wanting to go

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Speaker 7: to college and or how they engage colleges directly.

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Speaker 2: So just real quick on Puerto Rico, are they out

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Speaker 2: of the woods yet, I can't remember kind of where

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Speaker 2: we are there.

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Speaker 7: Yeah, they're not quite out of the woods yet. That

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Speaker 7: story seems to be the story that never ends. So

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Speaker 7: they're in challenging times. There's constant discussions over you know,

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Speaker 7: what's going to happen with the debt service and who's

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Speaker 7: going to be paying it and who's responsible, and then

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Speaker 7: what is the restructuring going to look like? And you know,

439
00:19:40,200 --> 00:19:42,800
Speaker 7: that's getting into the weaths of it. Very challenging, yeah stuff.

440
00:19:42,880 --> 00:19:46,800
Speaker 2: Luckily, we have the Joe Mysak who covers the municipal

441
00:19:46,800 --> 00:19:49,200
Speaker 2: bond mark for like a goajillion years at Bloomberg News,

442
00:19:49,240 --> 00:19:50,960
Speaker 2: and he keeps us up to date on what's happening there,

443
00:19:51,359 --> 00:19:53,320
Speaker 2: so we appreciate that. Chris Burgotti, thanks for joining us.

444
00:19:53,359 --> 00:19:56,119
Speaker 2: Christoph Gotti is a senior vice president, director of Strategic

445
00:19:56,119 --> 00:19:59,440
Speaker 2: Planning at SWBC based in San Antonio.

446
00:20:00,000 --> 00:20:03,240
Speaker 5: Listening to the tape Cat's are live program Bloomberg Markets

447
00:20:03,320 --> 00:20:06,680
Speaker 5: weekdays at ten am Eastern on Bloomberg Radio, the tune

448
00:20:06,720 --> 00:20:08,440
Speaker 5: in app, Bloomberg dot Com, and.

449
00:20:08,400 --> 00:20:09,720
Speaker 6: The Bloomberg Business App.

450
00:20:09,720 --> 00:20:12,560
Speaker 5: You can also listen live on Amazon Alexa from our

451
00:20:12,560 --> 00:20:19,200
Speaker 5: flagship New York station just say Alexa play Bloomberg eleven thirty.

452
00:20:19,240 --> 00:20:21,240
Speaker 2: All right, the two teams from twenty twenty one from

453
00:20:21,240 --> 00:20:23,560
Speaker 2: a stock market perspective for me, that just came out

454
00:20:23,600 --> 00:20:26,280
Speaker 2: of nowhere. One was AI okay, of course, and the

455
00:20:26,320 --> 00:20:28,600
Speaker 2: other one is this weight loss stuff the GLP ones.

456
00:20:29,280 --> 00:20:30,520
Speaker 4: Now it's EMPI gov.

457
00:20:31,080 --> 00:20:33,520
Speaker 2: I mean, you're a workout Maven, so this is a

458
00:20:33,560 --> 00:20:35,879
Speaker 2: non issue for you. But for a lot of people

459
00:20:36,760 --> 00:20:39,240
Speaker 2: it's huge. I could see how this could just be massive,

460
00:20:39,240 --> 00:20:42,439
Speaker 2: particularly if they get into a pill format. My question

461
00:20:42,560 --> 00:20:46,520
Speaker 2: is always who pays for it? Simone Foxman, reporter for

462
00:20:46,600 --> 00:20:48,960
Speaker 2: Bloomberg News, TV radio and all that kind of stuff.

463
00:20:48,960 --> 00:20:51,760
Speaker 2: She's everywhere. She did a lot of reporting on this,

464
00:20:51,840 --> 00:20:54,399
Speaker 2: has got a great story out on the Bloomberg terminal

465
00:20:54,440 --> 00:20:56,480
Speaker 2: here she joins us live here in our Bloomberg Interactive

466
00:20:56,520 --> 00:21:00,280
Speaker 2: Brokers studio. Simone, help us figure out, because I think

467
00:21:00,320 --> 00:21:03,240
Speaker 2: you can make an argument that almost well get jillions

468
00:21:03,280 --> 00:21:05,960
Speaker 2: of people in the US in theory would want to

469
00:21:06,000 --> 00:21:08,439
Speaker 2: take this drug, will want to take this drug, are

470
00:21:08,480 --> 00:21:10,600
Speaker 2: taking this drugg But my question is who pays for it?

471
00:21:10,600 --> 00:21:11,440
Speaker 2: How does that all work?

472
00:21:11,760 --> 00:21:11,960
Speaker 6: Well?

473
00:21:12,000 --> 00:21:14,040
Speaker 9: So there are different classes of people, right, you have

474
00:21:14,119 --> 00:21:17,520
Speaker 9: your people who are insured and their employers maybe pay

475
00:21:17,520 --> 00:21:19,959
Speaker 9: for their healthcare, and some of them who are insured

476
00:21:20,000 --> 00:21:23,320
Speaker 9: pay for it themselves. Then you have, you know, people

477
00:21:23,359 --> 00:21:26,919
Speaker 9: on Medicare, and then you have eighty five million people

478
00:21:27,000 --> 00:21:31,159
Speaker 9: low income people typically on Medicaid. And this is the

479
00:21:31,240 --> 00:21:34,199
Speaker 9: area that we really dive into as well as some

480
00:21:34,240 --> 00:21:37,800
Speaker 9: of those insured people, because a lot of this burden

481
00:21:38,080 --> 00:21:41,440
Speaker 9: is going to fall on states. States spend on average

482
00:21:41,960 --> 00:21:46,520
Speaker 9: over a quarter of their overall state budget on healthcare costs,

483
00:21:47,040 --> 00:21:49,520
Speaker 9: and those you know, for many states, including New York,

484
00:21:49,600 --> 00:21:52,760
Speaker 9: are skyrocketing, and it turns out, you know, this is

485
00:21:52,840 --> 00:21:55,000
Speaker 9: going to be a larger and larger part of their

486
00:21:55,000 --> 00:21:58,000
Speaker 9: budget as they try and pay for Medicaid costs, which

487
00:21:58,040 --> 00:22:01,000
Speaker 9: is part of is a respect ability they have. They

488
00:22:01,200 --> 00:22:04,080
Speaker 9: contribute to that as well as their own state employees.

489
00:22:04,320 --> 00:22:08,720
Speaker 9: Now right now, most insurers, this is private, public, et cetera,

490
00:22:09,200 --> 00:22:13,640
Speaker 9: pay for GLP ones for people with type two diabetes.

491
00:22:14,400 --> 00:22:15,800
Speaker 2: But the whole.

492
00:22:15,560 --> 00:22:18,280
Speaker 9: Idea that we have been hearing from Wall Street is

493
00:22:18,880 --> 00:22:21,240
Speaker 9: people who just are seeking this for weight loss, who

494
00:22:21,240 --> 00:22:23,600
Speaker 9: are overweight, They're the ones that are ultimately going to

495
00:22:23,640 --> 00:22:25,320
Speaker 9: be seeking this and that's why this is such a

496
00:22:25,320 --> 00:22:26,000
Speaker 9: massive market.

497
00:22:26,080 --> 00:22:29,200
Speaker 4: Yeah, the cosmetic weight loss, I mean exactly likely. They

498
00:22:29,200 --> 00:22:32,200
Speaker 4: came out yesterday and they warned about people doing it

499
00:22:32,280 --> 00:22:32,879
Speaker 4: for this, but.

500
00:22:32,960 --> 00:22:35,320
Speaker 9: It's but it's not just cosmetic weight loss. It should

501
00:22:35,359 --> 00:22:38,120
Speaker 9: be very if you know, noted that this has all

502
00:22:38,160 --> 00:22:41,840
Speaker 9: these variety of health benefits. Uh, the twenty percent reduction

503
00:22:42,200 --> 00:22:47,320
Speaker 9: that a Novo Nordisks showed among patients who had a

504
00:22:47,359 --> 00:22:50,480
Speaker 9: health had a heart condition or some history of heart

505
00:22:50,480 --> 00:22:55,879
Speaker 9: disease as well as obesity, you know, that's an enormous

506
00:22:55,920 --> 00:23:01,399
Speaker 9: savings potentially for insurers, including public insurers. But at a

507
00:23:01,480 --> 00:23:04,320
Speaker 9: cost of one thousand dollars a month. That's the shrugs.

508
00:23:04,560 --> 00:23:06,280
Speaker 2: That's the number that jumped out of meat from your reporting.

509
00:23:06,280 --> 00:23:08,840
Speaker 2: One thousand dollars a month. And you know a lot

510
00:23:08,840 --> 00:23:11,240
Speaker 2: of these you know, government officials saying that's going to

511
00:23:11,840 --> 00:23:12,800
Speaker 2: we don't have that money.

512
00:23:13,320 --> 00:23:15,879
Speaker 9: And the first government officials that were really starting to

513
00:23:15,920 --> 00:23:19,960
Speaker 9: hear from are the ones who control the state health plans. Again,

514
00:23:20,119 --> 00:23:23,200
Speaker 9: not every state health plan covers this for weight loss.

515
00:23:23,200 --> 00:23:26,880
Speaker 9: They almost all do for subject to restrictions for type

516
00:23:26,920 --> 00:23:30,639
Speaker 9: two diabetes. But the ones who do, including North Carolina

517
00:23:30,720 --> 00:23:33,639
Speaker 9: and Connecticut, have both flagged that this is a real

518
00:23:33,880 --> 00:23:37,240
Speaker 9: rising cost and in North Carolina this was a subject

519
00:23:37,280 --> 00:23:40,000
Speaker 9: of very heated meeting over whether or not they should

520
00:23:40,040 --> 00:23:44,159
Speaker 9: continue covering these drugs for weight loss at all, and

521
00:23:44,280 --> 00:23:46,840
Speaker 9: ultimately they decided anyone who was on it up till

522
00:23:46,920 --> 00:23:50,760
Speaker 9: January first can stay on it for that reason. But

523
00:23:51,280 --> 00:23:54,520
Speaker 9: people who are just seeking these for weight loss beyond

524
00:23:54,560 --> 00:23:56,160
Speaker 9: this specifically.

525
00:23:56,760 --> 00:23:58,800
Speaker 2: You got some crazy numbers in here, just in terms

526
00:23:58,840 --> 00:24:02,000
Speaker 2: of the medicage growing GLP one bill. Here are the

527
00:24:02,119 --> 00:24:05,399
Speaker 2: numbers in twenty twenty three point three billion, in twenty

528
00:24:05,440 --> 00:24:08,480
Speaker 2: twenty one five billion, and in twenty twenty two seven

529
00:24:08,520 --> 00:24:09,520
Speaker 2: point nine billion.

530
00:24:09,800 --> 00:24:12,919
Speaker 9: So that's just we medicate, and we have some limited

531
00:24:12,960 --> 00:24:15,120
Speaker 9: data for twenty twenty three. I can tell you already

532
00:24:15,200 --> 00:24:16,320
Speaker 9: the nut number is bigger.

533
00:24:16,560 --> 00:24:16,879
Speaker 3: Wow.

534
00:24:16,960 --> 00:24:17,560
Speaker 9: But here's the thing.

535
00:24:17,600 --> 00:24:21,119
Speaker 4: You have to be on this drug forever. This is

536
00:24:21,119 --> 00:24:23,119
Speaker 4: not a one time thing a couple of months. No,

537
00:24:23,280 --> 00:24:25,119
Speaker 4: you have to continue to be on this correct.

538
00:24:25,359 --> 00:24:25,639
Speaker 3: Yeah.

539
00:24:25,920 --> 00:24:28,959
Speaker 9: And the thing is, you know some of these costs,

540
00:24:28,960 --> 00:24:31,439
Speaker 9: the costs that you just mentioned, Paul, A lot of

541
00:24:31,480 --> 00:24:35,679
Speaker 9: these are driven by type two diabetes patients. In fact, uh,

542
00:24:36,200 --> 00:24:39,280
Speaker 9: why I was going through these numbers. The biggest driver

543
00:24:39,480 --> 00:24:42,480
Speaker 9: of that increase that you talk about between twenty twenty

544
00:24:42,520 --> 00:24:45,280
Speaker 9: and twenty twenty two is for a drug called Trullicity.

545
00:24:45,359 --> 00:24:47,920
Speaker 9: This is a GOLP one that has has been out

546
00:24:47,920 --> 00:24:50,159
Speaker 9: there may cause some weight loss, but it's not the ozembic,

547
00:24:50,160 --> 00:24:52,240
Speaker 9: it's not the wee goov, it's not the one with

548
00:24:52,280 --> 00:24:54,920
Speaker 9: all this name recognition really for weight loss. So it's

549
00:24:54,960 --> 00:24:57,840
Speaker 9: there's still a long way to go. If we just

550
00:24:57,920 --> 00:25:00,239
Speaker 9: are to cover all the type two diabetes patients, and

551
00:25:00,280 --> 00:25:03,320
Speaker 9: we calculate it in our analysis that that bill if

552
00:25:03,400 --> 00:25:06,040
Speaker 9: all the type two diabetes patients that actually deserve this,

553
00:25:06,160 --> 00:25:09,080
Speaker 9: according to the research, were covered, that would be forty

554
00:25:09,080 --> 00:25:12,560
Speaker 9: one billion dollars for Medicaid alone. Don't we can't even

555
00:25:12,560 --> 00:25:14,320
Speaker 9: take in state healthcare plans there.

556
00:25:14,640 --> 00:25:16,560
Speaker 2: I mean, I'm not sure how to do the math

557
00:25:17,000 --> 00:25:19,200
Speaker 2: or I'm sure it's being done within the healthcare industry.

558
00:25:19,240 --> 00:25:22,560
Speaker 2: But if more people are on these GLP one drugs, Okay,

559
00:25:22,560 --> 00:25:25,000
Speaker 2: that's an incremental cost and can the system bear that?

560
00:25:25,520 --> 00:25:29,720
Speaker 2: But you offset that by presumably some of the issues

561
00:25:29,760 --> 00:25:33,480
Speaker 2: they won't have to deal with, you know, obesit, diabetes,

562
00:25:33,600 --> 00:25:36,360
Speaker 2: things like that, And that goes down to I've even

563
00:25:36,400 --> 00:25:39,720
Speaker 2: seen medical device companies stocks sell off because there'll be

564
00:25:39,760 --> 00:25:42,360
Speaker 2: less knee replacements, hip replacements, all that kind of thing.

565
00:25:43,000 --> 00:25:45,159
Speaker 2: I'm not sure how to quantify that benefit versus what

566
00:25:45,160 --> 00:25:46,399
Speaker 2: I know is the upfront cost.

567
00:25:46,840 --> 00:25:53,160
Speaker 9: This is an incredibly problematic analysis. We know that obesity

568
00:25:53,280 --> 00:25:58,040
Speaker 9: itself is very expensive. Diabetes is three hundred and twenty

569
00:25:58,080 --> 00:26:01,160
Speaker 9: seven billion dollars in medical cost a year. That's one

570
00:26:01,200 --> 00:26:06,639
Speaker 9: and out of every four dollars spent. That said, you know,

571
00:26:06,720 --> 00:26:12,359
Speaker 9: and like, don't bring into account the potential benefits of

572
00:26:12,400 --> 00:26:15,680
Speaker 9: having people who are not spending their entire day on dialysis,

573
00:26:16,080 --> 00:26:18,240
Speaker 9: you know, who are contributing to the economy.

574
00:26:18,640 --> 00:26:18,840
Speaker 6: You know.

575
00:26:18,920 --> 00:26:23,200
Speaker 9: That said, some of the early indications are and the

576
00:26:24,800 --> 00:26:27,760
Speaker 9: CBO has done has kind of done a little bit

577
00:26:27,800 --> 00:26:30,680
Speaker 9: of thinking about this. Is the cost is still too high,

578
00:26:30,920 --> 00:26:31,639
Speaker 9: you know, and.

579
00:26:31,680 --> 00:26:34,040
Speaker 4: The and the supply is kind of being limited at

580
00:26:34,040 --> 00:26:34,400
Speaker 4: this time.

581
00:26:34,480 --> 00:26:36,560
Speaker 8: So what do you I mean, do you ration it out?

582
00:26:36,800 --> 00:26:37,800
Speaker 4: What do you do at this point?

583
00:26:38,000 --> 00:26:41,119
Speaker 9: Yeah, the supply being limited means that the likes of

584
00:26:41,320 --> 00:26:48,200
Speaker 9: Novo Nordisk have limited who these drugs go to first, essentially,

585
00:26:49,240 --> 00:26:51,680
Speaker 9: and they're going to the diabetic patients first because it

586
00:26:51,760 --> 00:26:54,600
Speaker 9: has it's more meaningful for them on a whole on

587
00:26:54,640 --> 00:26:59,399
Speaker 9: an aggregate basis, immediately, but you know, they're rimming up supply.

588
00:27:00,760 --> 00:27:03,919
Speaker 9: The problem is the demand is so huge, how do

589
00:27:03,960 --> 00:27:08,359
Speaker 9: you ever bring down costs meaningfully enough to make it

590
00:27:08,400 --> 00:27:10,159
Speaker 9: worth it. Now, it should be noted that some of

591
00:27:10,240 --> 00:27:13,200
Speaker 9: these costs that we've talked about here are pre rebate,

592
00:27:13,320 --> 00:27:19,600
Speaker 9: So prescription costs for Medicaid essentially have due to manufacture rebates.

593
00:27:19,600 --> 00:27:22,399
Speaker 9: Since these are the same and but these are the

594
00:27:22,480 --> 00:27:24,359
Speaker 9: numbers we're kind of talking about, I think they give

595
00:27:24,400 --> 00:27:26,679
Speaker 9: a good indication of how significant this is going to be.

596
00:27:26,800 --> 00:27:28,440
Speaker 2: Well, I like, I mean, I'm I'm a big fan

597
00:27:28,480 --> 00:27:30,760
Speaker 2: of North the state of the state of North Carolina,

598
00:27:30,800 --> 00:27:33,120
Speaker 2: not necessarily the University of North Carolina being a duke

599
00:27:33,200 --> 00:27:35,560
Speaker 2: red But here I noticed in your reporting here that

600
00:27:35,600 --> 00:27:39,160
Speaker 2: the debate has played out most heatedly in North Carolina,

601
00:27:39,200 --> 00:27:42,320
Speaker 2: where Novo Nordis has three plants that make drugs for

602
00:27:42,400 --> 00:27:46,199
Speaker 2: obesity and diabetes. Yet they're at the forefront of the

603
00:27:46,200 --> 00:27:50,040
Speaker 2: state trying to limit who you know, what the state

604
00:27:50,080 --> 00:27:52,440
Speaker 2: will pay for it. So very ironic there and.

605
00:27:52,520 --> 00:27:58,640
Speaker 9: Here there's also this incredible calculus as well. So Dale Folwell,

606
00:27:58,680 --> 00:28:00,840
Speaker 9: who will speak to later today on radio as well

607
00:28:00,840 --> 00:28:05,439
Speaker 9: as on Bloomberg TV. He you know, it runs this

608
00:28:05,520 --> 00:28:10,399
Speaker 9: plan and apparently the Prescription Benefit Manager CVS, he says,

609
00:28:10,760 --> 00:28:14,959
Speaker 9: told him that if they start restricting the population who

610
00:28:14,960 --> 00:28:20,680
Speaker 9: can get drugs, Novo Nordisk will cut the rebates they get,

611
00:28:20,720 --> 00:28:23,480
Speaker 9: so they'll have to pay much closer to thirteen forty

612
00:28:23,560 --> 00:28:25,959
Speaker 9: nine the list price of you know, we go via

613
00:28:25,960 --> 00:28:28,840
Speaker 9: the weight loss version of one of these drugs.

614
00:28:28,960 --> 00:28:32,920
Speaker 2: That's nine dollars yes for a month.

615
00:28:32,800 --> 00:28:35,600
Speaker 9: Yes, versus the seven hundred and seventy two that they

616
00:28:35,640 --> 00:28:39,440
Speaker 9: were currently paid. So that makes the calculus even worse. Right, So,

617
00:28:39,760 --> 00:28:42,360
Speaker 9: I mean, essentially, if manufacturers threatened to cut these rebates

618
00:28:42,360 --> 00:28:44,440
Speaker 9: because people are restricting that, I mean, it's this whole

619
00:28:44,480 --> 00:28:45,160
Speaker 9: vicious cycle.

620
00:28:45,480 --> 00:28:46,640
Speaker 4: But I mean they're pushing it.

621
00:28:46,640 --> 00:28:46,840
Speaker 6: You know.

622
00:28:47,160 --> 00:28:50,240
Speaker 4: Eli Lilly said it's going to launch this digital healthcare platform,

623
00:28:50,560 --> 00:28:52,040
Speaker 4: you know, and that's really going to pressure They're going

624
00:28:52,080 --> 00:28:54,360
Speaker 4: to home deliver some of these these medications.

625
00:28:54,400 --> 00:28:55,680
Speaker 2: So they're they're pushing it.

626
00:28:55,640 --> 00:28:58,720
Speaker 9: And they're doing impact studies talking about the costs of

627
00:28:58,800 --> 00:29:02,160
Speaker 9: obesity that Lily has publicized a bunch of those or

628
00:29:02,200 --> 00:29:06,040
Speaker 9: funded a bunch of those. H they are lobbying state

629
00:29:06,200 --> 00:29:10,280
Speaker 9: and federal officials. Mind you, Medicare is a federal thing.

630
00:29:10,360 --> 00:29:12,600
Speaker 9: And there are some officials on Capitol Hill who are

631
00:29:12,640 --> 00:29:16,600
Speaker 9: saying Medicare should cover this for Medicare beneficiaries, just for

632
00:29:16,680 --> 00:29:20,560
Speaker 9: weight loss too. I mean, anytime you hear about this,

633
00:29:20,680 --> 00:29:23,920
Speaker 9: it's expanding the potential population of people who could get

634
00:29:23,960 --> 00:29:26,360
Speaker 9: these and don't. That doesn't even begin to take in

635
00:29:26,400 --> 00:29:27,640
Speaker 9: the kind of marketing that we're.

636
00:29:27,520 --> 00:29:31,640
Speaker 2: Seeing, all right. I mean, great reporting here, Simone, Simone Foxman,

637
00:29:32,720 --> 00:29:35,480
Speaker 2: you know, with this story and along with your co

638
00:29:35,560 --> 00:29:40,320
Speaker 2: reporter Laura nas Nomius. So, Laura Namias, Simone Foxman, great

639
00:29:40,360 --> 00:29:44,760
Speaker 2: reporting here, great story of Zempic's mania's billions and bills

640
00:29:44,800 --> 00:29:47,160
Speaker 2: are coming for US taxpayers. Check it out on the

641
00:29:47,160 --> 00:29:50,160
Speaker 2: Bloomberg terminal Bloomberg dot com. It really it's really good.

642
00:29:50,160 --> 00:29:52,160
Speaker 2: It's got a lot of data that I have not

643
00:29:52,280 --> 00:29:54,400
Speaker 2: seen before in terms of the cost and how the

644
00:29:54,400 --> 00:29:56,760
Speaker 2: costs are broken down, what are the drugs that are

645
00:29:56,760 --> 00:30:00,080
Speaker 2: in the marketplace, who's who's in there, and where's the

646
00:30:00,080 --> 00:30:02,400
Speaker 2: the money going and where's the money coming from. Some

647
00:30:02,680 --> 00:30:04,040
Speaker 2: great reporting, Simone, thanks so much.

648
00:30:04,920 --> 00:30:08,040
Speaker 5: You're listening to the tape. Can's are Live program Bloomberg

649
00:30:08,080 --> 00:30:11,680
Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the

650
00:30:11,760 --> 00:30:13,720
Speaker 5: tune in app, Bloomberg dot Com, and.

651
00:30:13,680 --> 00:30:15,000
Speaker 6: The Bloomberg Business App.

652
00:30:15,000 --> 00:30:17,840
Speaker 5: You can also listen live on Amazon Alexa from our

653
00:30:17,840 --> 00:30:24,040
Speaker 5: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

654
00:30:24,120 --> 00:30:26,200
Speaker 2: My next life. I want to come back as a

655
00:30:26,240 --> 00:30:30,600
Speaker 2: healthcare m and a banker. Those guys get paid every day.

656
00:30:30,640 --> 00:30:32,920
Speaker 2: It seems like every Monday we come in and there's

657
00:30:32,960 --> 00:30:36,479
Speaker 2: another mega healthcare deal. So let's see if that's going

658
00:30:36,520 --> 00:30:42,080
Speaker 2: to continue here. Kristin Pathier, Principal National and Global HCLs

659
00:30:42,160 --> 00:30:44,960
Speaker 2: Deal Advisor and Strategy Leader, Christian, We've got to deal

660
00:30:45,000 --> 00:30:47,840
Speaker 2: with that title there. We got to work on that. KPMG.

661
00:30:48,120 --> 00:30:50,920
Speaker 2: I mean, let's just say you're the global deal person.

662
00:30:51,040 --> 00:30:53,880
Speaker 2: That's what I'm going to go with. At KPMG, they

663
00:30:53,920 --> 00:30:55,959
Speaker 2: know what's going on out there in the world. So

664
00:30:56,040 --> 00:31:00,479
Speaker 2: Kristin talk to us about the landscape for healthcare MNA.

665
00:31:00,520 --> 00:31:03,320
Speaker 2: It just seems like it's just a it's almost like

666
00:31:03,680 --> 00:31:06,360
Speaker 2: a way of doing business for this industry. If you

667
00:31:06,480 --> 00:31:10,360
Speaker 2: can't come up with the drug or the therapeutic or

668
00:31:10,360 --> 00:31:12,880
Speaker 2: whatever in your own R and D, you go out

669
00:31:12,880 --> 00:31:14,400
Speaker 2: and buy it. Is that kind of where we are.

670
00:31:15,840 --> 00:31:18,520
Speaker 10: Absolutely and when you look at healthcare and life sciences

671
00:31:18,560 --> 00:31:21,560
Speaker 10: in general, it really is one of those recession proof industries.

672
00:31:21,800 --> 00:31:25,240
Speaker 10: People are getting sick. People get sick worldwide. They need

673
00:31:25,240 --> 00:31:28,520
Speaker 10: better medication, they can need faster medication, they need more

674
00:31:28,600 --> 00:31:33,520
Speaker 10: access to therapeutics, diagnostics, devices, And regardless of whether we're

675
00:31:33,560 --> 00:31:37,080
Speaker 10: in a major pandemic or whether we're in a major recession,

676
00:31:37,400 --> 00:31:39,680
Speaker 10: we still have people that are getting sick. And so

677
00:31:40,320 --> 00:31:43,680
Speaker 10: all of our groups in this space, whether they be

678
00:31:43,760 --> 00:31:45,400
Speaker 10: healthcare firms, life.

679
00:31:45,160 --> 00:31:47,600
Speaker 8: Sciences firms, they have to continue to innovate.

680
00:31:47,960 --> 00:31:52,320
Speaker 10: And innovation in medicine is precision medicine. It is the

681
00:31:52,360 --> 00:31:55,600
Speaker 10: future of medicine. It is generative AI. It is putting

682
00:31:55,640 --> 00:31:59,000
Speaker 10: together a number of different types of pieces of the

683
00:31:59,040 --> 00:32:01,640
Speaker 10: ecosystem so that we get to our patients faster.

684
00:32:01,840 --> 00:32:03,360
Speaker 8: So you are absolutely right.

685
00:32:03,760 --> 00:32:08,479
Speaker 10: Both inorganic and organic strategies are absolutely essential in this space,

686
00:32:08,840 --> 00:32:11,480
Speaker 10: and that is what we have seen throughout the years.

687
00:32:11,560 --> 00:32:14,360
Speaker 10: Even as the deal market has softened over the past

688
00:32:14,440 --> 00:32:15,360
Speaker 10: couple of years.

689
00:32:15,360 --> 00:32:17,080
Speaker 4: You know, I want to get more into that innovation

690
00:32:17,160 --> 00:32:19,800
Speaker 4: that you were talking about. I hosted a panel for Bloomberg.

691
00:32:19,840 --> 00:32:22,920
Speaker 4: It was about AI and one of the companies there

692
00:32:23,080 --> 00:32:26,520
Speaker 4: was healthcare and they said, AI is playing a big part.

693
00:32:26,600 --> 00:32:29,080
Speaker 4: It is a game changer. So if you can get

694
00:32:29,080 --> 00:32:30,120
Speaker 4: a little bit more into that.

695
00:32:30,080 --> 00:32:33,840
Speaker 10: For us, absolutely, and it's a game changer across all

696
00:32:33,880 --> 00:32:37,120
Speaker 10: of the different subsectors of healthcare and life sciences. Remember

697
00:32:37,120 --> 00:32:39,160
Speaker 10: there are a number of different groups that are playing

698
00:32:39,160 --> 00:32:40,240
Speaker 10: into this ecosystem.

699
00:32:40,600 --> 00:32:42,320
Speaker 8: Our pharma companies.

700
00:32:42,040 --> 00:32:46,800
Speaker 10: Need generative AI to really help take their rapidity of

701
00:32:46,880 --> 00:32:50,479
Speaker 10: their pipelines, make everything going through the pipeline a lot faster,

702
00:32:50,800 --> 00:32:53,360
Speaker 10: a lot more efficient, a lot more effective. Our health

703
00:32:53,400 --> 00:32:55,680
Speaker 10: systems are using it both in the front office and

704
00:32:55,720 --> 00:32:58,440
Speaker 10: the back office to take all of the patient data,

705
00:32:58,720 --> 00:33:01,680
Speaker 10: all the patient claims, everything that they're getting hit with,

706
00:33:02,160 --> 00:33:06,240
Speaker 10: and develop new patient journeys, new sample journeys for those

707
00:33:06,280 --> 00:33:09,480
Speaker 10: patients to get them better and more effective therapeutics.

708
00:33:09,680 --> 00:33:12,080
Speaker 8: And what I would say is that over.

709
00:33:11,920 --> 00:33:16,040
Speaker 10: The last year alone, the amount of time and energy

710
00:33:16,400 --> 00:33:20,360
Speaker 10: and diligence that has been spent on generative AI, the companies,

711
00:33:20,600 --> 00:33:23,800
Speaker 10: the partnerships, how we're even dealing with the space has

712
00:33:23,920 --> 00:33:28,040
Speaker 10: just gone snowballed throughout the industry, and so we're getting

713
00:33:28,080 --> 00:33:30,720
Speaker 10: more and more questions on that every day. I would

714
00:33:30,760 --> 00:33:34,040
Speaker 10: say that the amount of deal making, actual m and

715
00:33:34,120 --> 00:33:38,520
Speaker 10: a in generative AI is less so than the partnerships

716
00:33:38,560 --> 00:33:41,200
Speaker 10: and all of the questions around generative AI, but in

717
00:33:41,240 --> 00:33:43,280
Speaker 10: twenty twenty four, we expect that to increase.

718
00:33:43,840 --> 00:33:48,040
Speaker 2: So what is precision medicine exactly?

719
00:33:48,040 --> 00:33:52,840
Speaker 10: And from your perspective, absolutely, precision medicine is the best

720
00:33:53,120 --> 00:33:57,600
Speaker 10: therapeutic or care for the best patient at the best time.

721
00:33:57,960 --> 00:33:58,760
Speaker 8: And so when you.

722
00:33:58,680 --> 00:34:01,520
Speaker 10: Think about that and you think about what I just said,

723
00:34:01,920 --> 00:34:03,200
Speaker 10: it isn't a buzzword.

724
00:34:03,320 --> 00:34:04,760
Speaker 8: It's the future of medicine.

725
00:34:04,840 --> 00:34:07,280
Speaker 10: We want to be able to take one patient, look

726
00:34:07,280 --> 00:34:11,480
Speaker 10: at that patient, and provide them the most effective and

727
00:34:11,640 --> 00:34:12,560
Speaker 10: efficient care.

728
00:34:12,920 --> 00:34:15,120
Speaker 8: And so that's what we see. And when we take

729
00:34:15,200 --> 00:34:16,400
Speaker 8: that precision.

730
00:34:16,000 --> 00:34:20,239
Speaker 10: Medicine out to precision healthcare, it adds in the entire ecosystem,

731
00:34:20,480 --> 00:34:24,080
Speaker 10: whether it be the diagnostics that surround those therapeutics, whether

732
00:34:24,120 --> 00:34:26,600
Speaker 10: it be the patient services, and whether it be in

733
00:34:26,640 --> 00:34:28,640
Speaker 10: a domestic market or a worldwide market.

734
00:34:29,360 --> 00:34:33,000
Speaker 4: Now, talk to about hospitals, they're facing these big financial pressures.

735
00:34:33,040 --> 00:34:36,040
Speaker 4: You have workers, there's a shortage of workers. How is

736
00:34:36,040 --> 00:34:38,640
Speaker 4: this going to change the industry moving into twenty twenty four.

737
00:34:39,600 --> 00:34:44,360
Speaker 10: Absolutely, both generative AI and precision health health happen to

738
00:34:45,160 --> 00:34:47,880
Speaker 10: really help what you just mentioned when you think about

739
00:34:48,440 --> 00:34:50,480
Speaker 10: how many workers we have to put in the workforce,

740
00:34:50,520 --> 00:34:52,959
Speaker 10: when you think about how many therapeutics that we need

741
00:34:53,000 --> 00:34:56,880
Speaker 10: to save people's lives. If we can get more precise diagnostics,

742
00:34:56,960 --> 00:35:00,799
Speaker 10: more precise services to our patients in amount of time

743
00:35:00,920 --> 00:35:04,680
Speaker 10: in those health systems, that allows us to take our

744
00:35:04,719 --> 00:35:07,840
Speaker 10: workforce and refine our workforce to only who we need.

745
00:35:08,120 --> 00:35:11,120
Speaker 10: It also allows us to upscale our workforce, maybe with

746
00:35:11,280 --> 00:35:15,320
Speaker 10: bringing in people that could be upskilled faster through generative

747
00:35:15,360 --> 00:35:19,520
Speaker 10: AI approaches, and then allow us to manipulate and change

748
00:35:19,520 --> 00:35:21,759
Speaker 10: our workforce to better suit the needs of what we

749
00:35:21,800 --> 00:35:22,560
Speaker 10: need in the future.

750
00:35:23,160 --> 00:35:27,480
Speaker 2: All Right, So, from a deal perspective, Kristen, what sectors

751
00:35:27,480 --> 00:35:29,920
Speaker 2: do you think are going to be most in play

752
00:35:29,960 --> 00:35:31,640
Speaker 2: over the next twelve months.

753
00:35:33,160 --> 00:35:35,920
Speaker 10: When you look across healthcare and life sciences and you

754
00:35:35,960 --> 00:35:38,600
Speaker 10: look at the lows of twenty twenty three and you

755
00:35:38,640 --> 00:35:41,799
Speaker 10: look at what's recovering quicker, each one of the subsectors

756
00:35:41,800 --> 00:35:45,319
Speaker 10: in life sciences continues to be very exciting in for

757
00:35:45,400 --> 00:35:49,520
Speaker 10: different reasons. Within biopharma, the innovation around selling gene therapy

758
00:35:49,840 --> 00:35:53,080
Speaker 10: within a lot of our other biologics within Companion Therapeutics

759
00:35:53,400 --> 00:35:57,080
Speaker 10: is continuing to move us through the pipeline and look

760
00:35:57,160 --> 00:36:01,800
Speaker 10: at deals that are continuing to change the portfolio.

761
00:36:01,239 --> 00:36:03,240
Speaker 8: Of each one of our pharmaceutical companies.

762
00:36:03,440 --> 00:36:05,680
Speaker 10: When you look at diagnostics, we had a little bit

763
00:36:05,680 --> 00:36:08,520
Speaker 10: of a lull last year, of course, as our diagnostics

764
00:36:08,520 --> 00:36:12,160
Speaker 10: companies went into the new normal post COVID, But now

765
00:36:12,200 --> 00:36:16,200
Speaker 10: they are looking for interesting point of care and interesting

766
00:36:16,200 --> 00:36:19,919
Speaker 10: innovations within diagnostics to help pharmaceutical companies and to help

767
00:36:19,960 --> 00:36:24,000
Speaker 10: services in better ways. Devices are always going to be

768
00:36:24,480 --> 00:36:27,359
Speaker 10: one of those areas where we keep on looking to say,

769
00:36:27,560 --> 00:36:31,319
Speaker 10: is this the year device companies had a harder time

770
00:36:31,400 --> 00:36:34,759
Speaker 10: during COVID? Of course, as elective procedures really tanked. All

771
00:36:34,800 --> 00:36:38,760
Speaker 10: those elective procedures, hips, knees, etc. All have come up again,

772
00:36:39,200 --> 00:36:42,640
Speaker 10: and now as our health systems continue to promote those

773
00:36:42,719 --> 00:36:46,320
Speaker 10: elective procedures continue to bring them in, our device companies

774
00:36:46,360 --> 00:36:49,520
Speaker 10: are looking very carefully at new innovative ways that they

775
00:36:49,560 --> 00:36:52,520
Speaker 10: can bring new devices to the fold and emerge as

776
00:36:52,600 --> 00:36:54,480
Speaker 10: the victors in that particular area.

777
00:36:55,000 --> 00:36:56,480
Speaker 8: In healthcare, when you.

778
00:36:56,440 --> 00:36:59,839
Speaker 10: Look at health systems, when you look at payers, when

779
00:36:59,840 --> 00:37:02,880
Speaker 10: you look at physician groups, we're seeing health it and

780
00:37:02,920 --> 00:37:07,320
Speaker 10: physician groups as being the most exciting areas and continued

781
00:37:07,360 --> 00:37:10,840
Speaker 10: consolidation and thoughts on health systems as the health systems

782
00:37:10,880 --> 00:37:14,200
Speaker 10: continue to recover from COVID and really be very thoughtful

783
00:37:14,280 --> 00:37:17,960
Speaker 10: about their costs, paired with the innovation that they're seeing

784
00:37:17,960 --> 00:37:22,560
Speaker 10: from life sciences. Life sciences and healthcare are inactuably linked sectors,

785
00:37:22,840 --> 00:37:26,040
Speaker 10: and so as we look at this overall, we're continuing

786
00:37:26,080 --> 00:37:29,720
Speaker 10: to see the dynamics between innovation between those two teams.

787
00:37:30,600 --> 00:37:33,480
Speaker 2: Kristin, thanks so much for joining us. Really fascinating stuff there.

788
00:37:33,560 --> 00:37:37,680
Speaker 2: Kristin Pathier, Principal National and Global HCLs Deal Advisory and

789
00:37:37,680 --> 00:37:39,359
Speaker 2: Strategy leader for KPMG.

790
00:37:39,840 --> 00:37:43,000
Speaker 5: You're listening to the tape cans our live program, Bloomberg

791
00:37:43,040 --> 00:37:46,640
Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the

792
00:37:46,680 --> 00:37:48,839
Speaker 5: tune in app, Bloomberg dot Com, and the.

793
00:37:48,719 --> 00:37:49,919
Speaker 6: Bloomberg Business App.

794
00:37:49,960 --> 00:37:52,759
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795
00:37:52,800 --> 00:37:57,200
Speaker 5: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

796
00:37:58,920 --> 00:38:02,120
Speaker 2: Let's talk about this jobs market again. It is resilient,

797
00:38:02,640 --> 00:38:05,560
Speaker 2: it is robust. I don't know what you it doesn't matter.

798
00:38:05,600 --> 00:38:07,880
Speaker 2: It just seems like you can't crack this labor market

799
00:38:07,880 --> 00:38:10,279
Speaker 2: that continues to be some pretty solid demand. Julia Pollock

800
00:38:10,360 --> 00:38:13,440
Speaker 2: joins us. She's a chief economist at ZipRecruiter. So, Julie,

801
00:38:13,440 --> 00:38:16,879
Speaker 2: we got some better than I think expected jobs dated

802
00:38:16,880 --> 00:38:18,600
Speaker 2: today in terms of the number of jobs and then

803
00:38:18,640 --> 00:38:20,680
Speaker 2: also the wages. What are you seeing at there at

804
00:38:20,719 --> 00:38:22,640
Speaker 2: ZipRecruiter when you look at there at the labor market,

805
00:38:22,960 --> 00:38:24,480
Speaker 2: it was a mixed jobs report.

806
00:38:24,560 --> 00:38:27,239
Speaker 11: But yes, you know, zooming out twenty twenty three was

807
00:38:27,360 --> 00:38:30,640
Speaker 11: a remarkable year in the labor market. We not just

808
00:38:30,840 --> 00:38:35,640
Speaker 11: dodged a recession, we completely completely avoided a recession in

809
00:38:35,640 --> 00:38:41,080
Speaker 11: the labor market, even though it did slow substantially. And

810
00:38:41,120 --> 00:38:42,839
Speaker 11: not only that, it was actually one of the best

811
00:38:42,920 --> 00:38:45,120
Speaker 11: years on record when it comes to the unemployment rate,

812
00:38:45,160 --> 00:38:47,800
Speaker 11: the average unemployment rate, it ties for fifth place with

813
00:38:47,880 --> 00:38:50,760
Speaker 11: nineteen sixty eight. Wow, So pretty strong year overall.

814
00:38:51,239 --> 00:38:53,040
Speaker 4: And talk about some of the trends that are going on.

815
00:38:53,760 --> 00:38:56,480
Speaker 4: We used to talk about that trend of job switching.

816
00:38:56,840 --> 00:38:58,200
Speaker 2: Is that still safe?

817
00:38:58,360 --> 00:38:59,959
Speaker 4: Ords it best to just stay in place.

818
00:39:01,600 --> 00:39:04,879
Speaker 11: So the data that came out earlier in the week,

819
00:39:04,960 --> 00:39:09,000
Speaker 11: the JAULTZ data showed a pretty substantial decline in job switching.

820
00:39:09,200 --> 00:39:12,360
Speaker 11: So the quits rate fell to the lowest rate since

821
00:39:12,520 --> 00:39:17,680
Speaker 11: before since early twenty eighteen, and that suggests that the

822
00:39:17,680 --> 00:39:21,600
Speaker 11: Great resignation is fully completely over. And the higher's rate

823
00:39:21,680 --> 00:39:25,839
Speaker 11: also plunged to the lowest level since twenty fourteen. And

824
00:39:25,920 --> 00:39:29,560
Speaker 11: so the reason that overall employment levels are going up

825
00:39:29,640 --> 00:39:32,600
Speaker 11: is not because of aggressive hiring. It's more because of

826
00:39:32,800 --> 00:39:36,600
Speaker 11: very slow turnover and churn. And what we're seeing at

827
00:39:36,640 --> 00:39:40,759
Speaker 11: ZIP recruiter is a continued, gradual, orderly cooling in the

828
00:39:40,840 --> 00:39:44,520
Speaker 11: label market that's likely to persist until the FED takes

829
00:39:44,560 --> 00:39:48,080
Speaker 11: its foot off the rate piel and allows the economy

830
00:39:48,160 --> 00:39:50,160
Speaker 11: to invest in boom again.

831
00:39:50,960 --> 00:39:56,160
Speaker 2: So, Julia, what is I guess employee hoarding? Is it

832
00:39:56,200 --> 00:39:57,600
Speaker 2: a thing? Is it real?

833
00:39:58,840 --> 00:40:02,919
Speaker 11: So if you at layoffs and firings, they have been

834
00:40:03,000 --> 00:40:06,040
Speaker 11: about twenty percent lower this year than was normal between

835
00:40:06,040 --> 00:40:11,120
Speaker 11: twenty sixteen and twenty nineteen. So we're seeing historically unusually

836
00:40:11,360 --> 00:40:14,880
Speaker 11: low firing and layoffs at a time when there are

837
00:40:14,920 --> 00:40:18,880
Speaker 11: many industries where activity has taken a huge knock from

838
00:40:19,200 --> 00:40:22,840
Speaker 11: high interest rates. If you look at the construction sector,

839
00:40:22,920 --> 00:40:26,680
Speaker 11: it's actually up over four hundred thousand jobs since before

840
00:40:26,760 --> 00:40:31,160
Speaker 11: the pandemic. Industries like banking where I think if you

841
00:40:31,200 --> 00:40:33,080
Speaker 11: look at a lot of the numbers it hasn't been

842
00:40:33,120 --> 00:40:35,440
Speaker 11: so great, right, Lots and lots of bank deposits have

843
00:40:35,480 --> 00:40:37,640
Speaker 11: left that SIB system, like on eight hundred and seventy

844
00:40:37,680 --> 00:40:45,719
Speaker 11: billion dollars. Bank stocks have fallen pretty substantially and underperformed

845
00:40:45,719 --> 00:40:48,560
Speaker 11: the S and P five hundred by the largest amount ever.

846
00:40:49,120 --> 00:40:51,919
Speaker 11: And yet overall employment in that sector has been flat

847
00:40:51,960 --> 00:40:54,000
Speaker 11: as a pancake. So yes, I think there is a

848
00:40:54,040 --> 00:40:57,520
Speaker 11: sign that employers are holding on to the workers they've got,

849
00:40:57,840 --> 00:41:00,919
Speaker 11: even in industries that are pretty slow, because they are

850
00:41:00,960 --> 00:41:02,800
Speaker 11: confident that things are going to turn around.

851
00:41:03,080 --> 00:41:05,880
Speaker 4: So and when you talk about that, you know, managing

852
00:41:05,920 --> 00:41:09,480
Speaker 4: this headcount, So is it that they're relying on attrition

853
00:41:09,960 --> 00:41:14,280
Speaker 4: or rather than doing layoffs? What do you say?

854
00:41:14,400 --> 00:41:18,520
Speaker 11: Yes, but even overall headcount numbers are staying pretty flat

855
00:41:18,560 --> 00:41:19,080
Speaker 11: and stable.

856
00:41:19,160 --> 00:41:19,399
Speaker 3: You know.

857
00:41:19,640 --> 00:41:23,240
Speaker 11: One exception is transportational warehousing, where we are seeing some

858
00:41:23,320 --> 00:41:26,400
Speaker 11: sort of right sizing in that sector now after it

859
00:41:26,560 --> 00:41:30,560
Speaker 11: posted the largest gains since the pandemic. So, you know,

860
00:41:30,680 --> 00:41:32,840
Speaker 11: as people get back to normal and spend more on

861
00:41:32,960 --> 00:41:38,560
Speaker 11: services and good spending slows, growth and good spending slows,

862
00:41:39,560 --> 00:41:43,440
Speaker 11: that industry is shedding jobs, but most are not. Employment

863
00:41:43,520 --> 00:41:46,279
Speaker 11: is pretty stable and flat and resilient. That's actually the

864
00:41:46,360 --> 00:41:50,000
Speaker 11: only sectors that are really contributing to growth at the

865
00:41:50,000 --> 00:41:54,400
Speaker 11: moment are these three largely acyclical sectors, the government, healthcare,

866
00:41:54,560 --> 00:41:57,880
Speaker 11: and leisure hospitality. They accounted for ninety two percent of

867
00:41:58,000 --> 00:42:00,320
Speaker 11: all jobs added in the last six months.

868
00:42:01,040 --> 00:42:04,720
Speaker 2: So, Julia, people are at work. My question is where

869
00:42:04,840 --> 00:42:06,799
Speaker 2: are they working. Are they working at home, are they

870
00:42:06,800 --> 00:42:09,440
Speaker 2: working in the office? Where are we on that these days?

871
00:42:10,280 --> 00:42:13,960
Speaker 11: So it's a very very mixed bag. Remote work has

872
00:42:14,080 --> 00:42:17,239
Speaker 11: pretty much stabilized now at around twenty five to twenty

873
00:42:17,280 --> 00:42:20,399
Speaker 11: eight percent of all worked days, up from about five

874
00:42:20,440 --> 00:42:24,040
Speaker 11: percent before the pandemic. And this is the year when

875
00:42:24,200 --> 00:42:28,840
Speaker 11: that really stabilized. The Many companies brought workers back to

876
00:42:28,840 --> 00:42:31,680
Speaker 11: the office, but many other companies started afresh in a

877
00:42:31,840 --> 00:42:39,360
Speaker 11: remote first posture, and among companies the flexibility became the norm.

878
00:42:39,600 --> 00:42:43,399
Speaker 11: The five day in office work week became very rare.

879
00:42:43,480 --> 00:42:46,279
Speaker 11: Only sixteen percent of companies with office.

880
00:42:46,320 --> 00:42:48,560
Speaker 2: So I'm one of the special people's five days.

881
00:42:48,640 --> 00:42:49,279
Speaker 11: You're one of those.

882
00:42:50,160 --> 00:42:51,319
Speaker 2: I know, I was specialty.

883
00:42:51,680 --> 00:42:53,839
Speaker 11: Most people get at least one, two, three or four

884
00:42:53,920 --> 00:42:57,040
Speaker 11: days off, so I hear out out of the office

885
00:42:57,160 --> 00:42:57,600
Speaker 11: a week.

886
00:42:58,880 --> 00:43:00,640
Speaker 4: And we've learn a lot of us in twenty twenty

887
00:43:00,680 --> 00:43:04,400
Speaker 4: three about the great resignation is that gone in the

888
00:43:04,480 --> 00:43:05,560
Speaker 4: days of twenty twenty four.

889
00:43:06,640 --> 00:43:09,439
Speaker 11: It's gone. Turnovers not just back to pre pandemic normal,

890
00:43:09,480 --> 00:43:12,800
Speaker 11: it's actually lower. It's about where it was in early

891
00:43:12,880 --> 00:43:19,120
Speaker 11: twenty eighteen. And that is a really reliable measure of

892
00:43:19,200 --> 00:43:23,880
Speaker 11: how much economic opportunity there really is for unemployed workers,

893
00:43:24,120 --> 00:43:28,320
Speaker 11: for workers to find better jobs. And I think it

894
00:43:28,440 --> 00:43:31,360
Speaker 11: suggests that there is some cooling in this live market

895
00:43:31,520 --> 00:43:34,280
Speaker 11: and that workers are finding it a little bit harder

896
00:43:34,360 --> 00:43:36,600
Speaker 11: to find new jobs and to find the kinds of

897
00:43:36,680 --> 00:43:37,799
Speaker 11: jobs that they want right now.

898
00:43:38,280 --> 00:43:43,160
Speaker 2: All right, my I guess employment ready offspring, they're all employed.

899
00:43:43,160 --> 00:43:46,320
Speaker 2: But how about folks coming out of college and graduate school.

900
00:43:46,520 --> 00:43:48,959
Speaker 2: How's that entry market right now?

901
00:43:50,000 --> 00:43:55,040
Speaker 11: So, surveys of employers suggest that they are projecting hiring

902
00:43:55,200 --> 00:43:57,879
Speaker 11: fewer members of the graduating class of twenty twenty four

903
00:43:58,280 --> 00:44:02,400
Speaker 11: than of previous classes. That said, those projections can change.

904
00:44:03,719 --> 00:44:07,759
Speaker 11: It's quite possible that twenty twenty four could be like

905
00:44:07,800 --> 00:44:11,040
Speaker 11: twenty twenty three again, in that companies start the year

906
00:44:11,160 --> 00:44:14,840
Speaker 11: expecting to cut headcount and cut costs more aggressively and

907
00:44:14,880 --> 00:44:17,080
Speaker 11: then realize, wait a second, there's nerve recession. On hand,

908
00:44:17,120 --> 00:44:21,000
Speaker 11: the consumer is still strong. I need workers and actually

909
00:44:21,080 --> 00:44:23,560
Speaker 11: hire more than they're expecting at the start of the year,

910
00:44:23,680 --> 00:44:26,480
Speaker 11: especially if we see interest rates come down and investment

911
00:44:27,120 --> 00:44:27,880
Speaker 11: rise again.

912
00:44:28,400 --> 00:44:31,200
Speaker 4: And new year people out there looking for a new job.

913
00:44:31,480 --> 00:44:33,120
Speaker 4: Do you have to rip up the script when it

914
00:44:33,120 --> 00:44:34,960
Speaker 4: comes to your resume? I mean, if you want to

915
00:44:35,000 --> 00:44:37,920
Speaker 4: start all over again, what should you do differently when

916
00:44:38,080 --> 00:44:40,680
Speaker 4: you're putting it together? Is it more about skills? What

917
00:44:40,920 --> 00:44:42,600
Speaker 4: should you have on there that really stands out?

918
00:44:43,600 --> 00:44:43,839
Speaker 8: Yeah?

919
00:44:43,840 --> 00:44:46,600
Speaker 11: So this is not a chronology. It's more like an

920
00:44:46,640 --> 00:44:50,200
Speaker 11: advertising pamphlet, showing your most your greatest hits, your most

921
00:44:50,200 --> 00:44:53,040
Speaker 11: relevant skills and experience. That's I think how people should

922
00:44:53,040 --> 00:44:57,600
Speaker 11: think about their resumes. Put the relevant experience up first,

923
00:44:57,880 --> 00:45:01,520
Speaker 11: and then you know, it's really important these days to

924
00:45:01,560 --> 00:45:06,040
Speaker 11: have a digital jobs or seecret profile. So upload your resume,

925
00:45:06,120 --> 00:45:08,720
Speaker 11: make sure it can be read by computers and parsed

926
00:45:08,880 --> 00:45:13,680
Speaker 11: by these job marketplaces, so that you're actually getting your

927
00:45:13,680 --> 00:45:15,959
Speaker 11: foot through the door and getting past the robots into

928
00:45:16,000 --> 00:45:16,359
Speaker 11: a human.

929
00:45:17,120 --> 00:45:20,160
Speaker 2: How about it In the trades, people tell me that

930
00:45:20,320 --> 00:45:24,120
Speaker 2: there's still a shortage of trades men and women out there.

931
00:45:24,440 --> 00:45:26,920
Speaker 2: How does that part of the market look to you.

932
00:45:28,440 --> 00:45:33,880
Speaker 11: Yes, So there are many industries with aging workforces, with

933
00:45:34,000 --> 00:45:37,880
Speaker 11: a lot of retirements and with shrinking pipelines of new talent.

934
00:45:38,080 --> 00:45:41,239
Speaker 11: New younger generations of workers are not as interested in

935
00:45:41,280 --> 00:45:46,000
Speaker 11: those roles. They also are seeing a work a labor

936
00:45:46,000 --> 00:45:49,719
Speaker 11: force with a lot more flexible opportunities, and so they're

937
00:45:49,760 --> 00:45:51,759
Speaker 11: going to the remote jobs and the tech jobs and

938
00:45:51,800 --> 00:45:55,720
Speaker 11: the influencer jobs. There's tremendous interest still in marketing roles

939
00:45:55,800 --> 00:45:57,799
Speaker 11: and pr roles and those kinds of things, and much

940
00:45:57,880 --> 00:46:03,520
Speaker 11: less interest in doing hard labor in manufacturing or construction.

941
00:46:04,400 --> 00:46:07,839
Speaker 11: That said, wages in those fields are rising in order

942
00:46:07,920 --> 00:46:11,000
Speaker 11: to deal with the supply shortage, and perhaps you'll see

943
00:46:11,120 --> 00:46:14,760
Speaker 11: a tipping point where people start to take more interest

944
00:46:14,800 --> 00:46:15,400
Speaker 11: in these roles.

945
00:46:15,760 --> 00:46:17,759
Speaker 4: And what about the gig sector. I've heard a lot

946
00:46:17,800 --> 00:46:20,400
Speaker 4: of talk about there's more freelancers out there, that's what

947
00:46:20,440 --> 00:46:23,480
Speaker 4: people are looking to do more. Is that still growing

948
00:46:23,520 --> 00:46:25,600
Speaker 4: into twenty twenty four or is that cut back? You

949
00:46:25,640 --> 00:46:26,919
Speaker 4: think this year a little cut back.

950
00:46:27,680 --> 00:46:34,000
Speaker 11: So unfortunately, official data on gigwork is not very good,

951
00:46:34,040 --> 00:46:37,680
Speaker 11: and we haven't really been tracking it over over time

952
00:46:37,920 --> 00:46:40,839
Speaker 11: in a consistent way, so it's kind of a bit

953
00:46:40,880 --> 00:46:42,600
Speaker 11: of a black box. It's hard to note. We can

954
00:46:42,640 --> 00:46:47,520
Speaker 11: look at the company's earning statements about how many users

955
00:46:47,520 --> 00:46:51,040
Speaker 11: they have. Look broadly, we do see a lot of

956
00:46:51,040 --> 00:46:53,839
Speaker 11: interest among job seekers on zip recruiter in those kinds

957
00:46:53,880 --> 00:46:56,319
Speaker 11: of gig roles because of the flexibility they offer. There

958
00:46:56,360 --> 00:46:58,960
Speaker 11: are many young people who sort of live from hand

959
00:46:59,040 --> 00:47:01,920
Speaker 11: to mouth and have fun and watch video games and

960
00:47:01,960 --> 00:47:03,359
Speaker 11: do what they want to do. And if they need

961
00:47:03,440 --> 00:47:05,400
Speaker 11: cash and need a buy groceries, need to buy dinner,

962
00:47:05,440 --> 00:47:08,560
Speaker 11: they know, log onto an app and deliver groceries for

963
00:47:08,600 --> 00:47:10,399
Speaker 11: a couple hours and then buy their own and then

964
00:47:10,440 --> 00:47:12,000
Speaker 11: go back to doing what they're doing. That it is

965
00:47:12,360 --> 00:47:15,720
Speaker 11: quite common to work that way these days. That said,

966
00:47:15,920 --> 00:47:20,399
Speaker 11: there's some new research showing that once AI tools chatch

967
00:47:20,400 --> 00:47:23,759
Speaker 11: GVD was launched, generative AI demand for other kinds of

968
00:47:23,800 --> 00:47:28,480
Speaker 11: freelancers started to fall. So interesting, all right, we'll get

969
00:47:28,480 --> 00:47:29,640
Speaker 11: a white collar freelancer.

970
00:47:29,719 --> 00:47:32,440
Speaker 2: Yeah, you just walked across or walk through any local

971
00:47:32,440 --> 00:47:34,319
Speaker 2: coffee shop and I'm like, what are these people doing here?

972
00:47:34,400 --> 00:47:36,080
Speaker 2: You know, they all got to laptops out and they

973
00:47:36,080 --> 00:47:37,880
Speaker 2: look like they're doing something committing value. I don't know.

974
00:47:38,480 --> 00:47:41,600
Speaker 1: Thanks for listening to the Bloomberg Markets Podcast. You can

975
00:47:41,600 --> 00:47:45,400
Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever

976
00:47:45,480 --> 00:47:49,200
Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

977
00:47:49,400 --> 00:47:51,319
Speaker 1: at Matt Miller nineteen seventy three.

978
00:47:51,760 --> 00:47:54,160
Speaker 2: And I'm Paul Sweeney. I'm on Twitter at pt Sweeney.

979
00:47:54,280 --> 00:47:56,920
Speaker 2: Before the podcast, you can always catch us worldwide at

980
00:47:56,960 --> 00:47:58,680
Speaker 2: Bloomberg Radio