WEBVTT - Bloomberg Surveillance TV: August 4th, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.400 with Lisa Bromwitz and a Marie Hortern. Join us each 0:00:18.480 --> 0:00:21.360 day for insight from the best in markets, economics, and 0:00:21.400 --> 0:00:24.720 geopolitics from our global headquarters in New York City. We 0:00:24.760 --> 0:00:27.400 are live on Bloomberg Television weekday mornings from six to 0:00:27.480 --> 0:00:31.000 nine am Eastern. Subscribe to the podcast on Apple, Spotify, 0:00:31.200 --> 0:00:33.479 or anywhere else you listen, and as always on the 0:00:33.479 --> 0:00:35.840 Bloomberg Terminal and the Bloomberg Business app. 0:00:36.240 --> 0:00:36.879 We'll begin this. 0:00:36.840 --> 0:00:39.040 Hour with stocks looking to bounce back after a week 0:00:39.040 --> 0:00:42.600 payrolls report, fueled rate cut expectations and your d any 0:00:42.640 --> 0:00:45.400 of your Danny research writing. Traders might be starting to 0:00:45.440 --> 0:00:48.760 take profits before going on their August vacations. They may 0:00:48.840 --> 0:00:51.600 also be betting that September could be a week month 0:00:51.920 --> 0:00:52.519 for stocks. 0:00:52.640 --> 0:00:54.640 Ed joins us now, and let's start. 0:00:54.480 --> 0:00:57.280 With the growth picture and just your reaction to Friday's 0:00:57.480 --> 0:01:01.880 labor market data, especially those massive downwards revisions. For you 0:01:02.040 --> 0:01:03.640 right now, is it a cause of concern? 0:01:04.959 --> 0:01:05.119 Not? 0:01:05.200 --> 0:01:07.400 Really? Not the way the market took a dive, and 0:01:08.080 --> 0:01:10.640 I'm happy to see that the market may very well 0:01:10.680 --> 0:01:14.679 rebound today. The reality is we did have a lot 0:01:14.720 --> 0:01:18.120 of uncertainty during May and June when we had these 0:01:18.200 --> 0:01:21.800 big downward revisions. Honestly, it seems to me the downward 0:01:21.840 --> 0:01:25.200 revisions actually make more sense given that if I was 0:01:25.280 --> 0:01:29.440 an employer during May and June, I wouldn't have fired anybody. 0:01:29.440 --> 0:01:33.080 But I wouldn't have hired anybody given all the uncertaintly 0:01:33.160 --> 0:01:37.959 unleashed by what I call Trump's tariff turmoil. And so yeah, 0:01:38.120 --> 0:01:41.920 all in all, those numbers didn't surprise me all that much, 0:01:42.200 --> 0:01:45.880 with the benefit of hindsight obviously. And then of course 0:01:46.440 --> 0:01:50.840 we did see that the labor supply, the labor force 0:01:51.480 --> 0:01:55.280 has been kind of flatted down since the beginning of 0:01:55.320 --> 0:01:59.440 the year. So this is a combination of weakness in 0:01:59.720 --> 0:02:04.120 May related that may be temporarily related to the turmoil 0:02:04.160 --> 0:02:08.320 on tariffs that should I think be abait over the 0:02:08.360 --> 0:02:10.520 next few months. And at the same time we may 0:02:10.639 --> 0:02:12.600 actually have a shortage of workers. 0:02:12.919 --> 0:02:15.760 Well, the President didn't like the jobs number on Friday, 0:02:15.760 --> 0:02:18.680 and he fired the head of the Bureau of Labor Statistics. 0:02:18.680 --> 0:02:21.200 Do you think that undercuts market confidence? 0:02:22.639 --> 0:02:27.080 Well, this is a very bad situation. The President in 0:02:27.120 --> 0:02:30.560 my opinion, shouldn't have done that. I agree with what 0:02:31.080 --> 0:02:34.960 your collie Danny just said, and that is he should 0:02:35.000 --> 0:02:38.600 be throwing more money at the Bureau of Labor Statistics 0:02:38.600 --> 0:02:43.520 that he can do a better job settling workers and 0:02:43.560 --> 0:02:47.840 the unemployed to see what's really going on here. Firing 0:02:48.200 --> 0:02:53.239 the commissioner it does raise some questions of the confidence 0:02:53.240 --> 0:02:55.160 that people are going to have in the data, especially 0:02:55.200 --> 0:02:58.200 if he puts in a loyalist as a statistician, which 0:02:58.200 --> 0:02:59.000 he's likely to do. 0:02:59.360 --> 0:03:00.960 So what do you do then, ed, if you get 0:03:00.960 --> 0:03:03.800 a loyalist put in as a top statistician there, do 0:03:03.840 --> 0:03:06.120 we still trade on the data? Do you take it 0:03:06.120 --> 0:03:08.880 more skeptically? Do you use private measures more? How will 0:03:08.880 --> 0:03:11.239 it change how you interpret labor market data? 0:03:11.880 --> 0:03:15.000 Well? Yeah, I think right now there's a lot of 0:03:15.040 --> 0:03:19.320 skepticism about the labor market data, the employment data, I 0:03:19.320 --> 0:03:23.880 should say, because of what you mentioned before the fact 0:03:23.880 --> 0:03:28.240 that response rates have gone down, and look, the economy 0:03:29.639 --> 0:03:32.480 moves a lot faster these days, and I'm not sure 0:03:32.520 --> 0:03:37.040 the statistical techniques that the BLS has move is rapidly. 0:03:37.080 --> 0:03:39.760 So I would throw more money at him rather than 0:03:39.840 --> 0:03:43.320 become partisan partisan about it. So all I'm saying is 0:03:43.320 --> 0:03:47.160 that data was already suspect for other reasons. And we've all, 0:03:47.600 --> 0:03:51.600 all of us economist types have looked at all the 0:03:51.800 --> 0:03:57.880 employment data, both private and public. So I think nothing 0:03:58.000 --> 0:04:01.480 dramatically changes in terms of the way the markets look 0:04:01.520 --> 0:04:02.720 at data. 0:04:02.840 --> 0:04:06.480 Even so ed nothing dramatically changes. But Friday did demonstrate 0:04:06.480 --> 0:04:09.080 a vulnerability in the market with that huge move in 0:04:09.120 --> 0:04:10.840 the front end. You could even see what happened with 0:04:10.880 --> 0:04:13.400 copper prices demonstrated a vulnerability. 0:04:13.480 --> 0:04:14.480 Given that we've had. 0:04:14.320 --> 0:04:17.719 This slow melt up to the summer, you're still bullish ed, 0:04:17.920 --> 0:04:20.599 But are you concerned about some of these short term 0:04:20.640 --> 0:04:22.960 blips that traders aren't properly hedged for. 0:04:23.880 --> 0:04:27.440 Well, you quoted me saying that a lot of traders, 0:04:27.480 --> 0:04:30.200 a lot of investors are going on vacation. They certainly 0:04:30.200 --> 0:04:33.560 don't want to be exposed to the volatility of the market, 0:04:33.600 --> 0:04:36.480 at least not from a trading perspective. So I think 0:04:36.520 --> 0:04:37.800 we're going to see a lot of that kind of 0:04:37.880 --> 0:04:41.080 activity slow down. I think it already has slowed down. 0:04:41.080 --> 0:04:44.320 Maybe it started that on Fridays. Some people said, you 0:04:44.360 --> 0:04:46.840 know what I'm going to take. I'll be taking vacation 0:04:46.960 --> 0:04:49.800 for the next week, two weeks. Let me just close 0:04:50.000 --> 0:04:53.240 my books here. And then, of course there is a 0:04:53.279 --> 0:04:58.799 seasonality issue. Septembers have a tendency to be a week months, 0:04:58.839 --> 0:05:02.000 so I would miss prize if this market just kind 0:05:02.000 --> 0:05:05.479 of chops around here in August and September, and maybe 0:05:05.520 --> 0:05:09.800 we make some sort of low or bottom in October 0:05:09.880 --> 0:05:10.920 for a year end rally. 0:05:11.240 --> 0:05:13.200 Good luck to anyone who's trying to take a vacation 0:05:13.400 --> 0:05:15.960 with all these headlines coming out, and also this week 0:05:16.000 --> 0:05:18.480 we have this new deadline when it comes to the 0:05:18.520 --> 0:05:21.479 tariff rates on Thursday. Do you think the market is 0:05:21.600 --> 0:05:24.360 ready to basically put the trade war behind them? 0:05:24.839 --> 0:05:26.719 I think the markets would love to put the trade 0:05:26.720 --> 0:05:29.440 war behind them, and I really thought that by now 0:05:29.760 --> 0:05:33.720 the President would really be sort of in the same camp, 0:05:33.800 --> 0:05:36.719 because he's going to start focusing on the midterm elections 0:05:36.760 --> 0:05:42.520 next year. He does love to talk at these large conventions, 0:05:42.880 --> 0:05:47.479 these large rallies in sports stadiums, and he's going to 0:05:47.480 --> 0:05:50.599 need to do that in order to shore up his 0:05:51.080 --> 0:05:56.080 Republican Party during the midterm elections. And he's going to 0:05:56.120 --> 0:06:00.560 really start to focus on just saying what has been 0:06:00.560 --> 0:06:05.480 accomplished and avoid doing things that might backfire on the midterms. 0:06:06.160 --> 0:06:08.560 So yeah, I think the other issue, of course, is 0:06:08.600 --> 0:06:11.200 the courts are probably about to rule it. He doesn't 0:06:11.200 --> 0:06:14.119 really have the legal authority to do what he's been doing. 0:06:14.839 --> 0:06:15.920 I don't know if it's going to go all the 0:06:15.920 --> 0:06:18.760 way up to the Supreme Court. The Appeals Court has 0:06:18.800 --> 0:06:20.640 a love in judges, and if all I loved of 0:06:20.720 --> 0:06:24.000 him rule that way, which is possible, the Supreme Court 0:06:24.040 --> 0:06:27.120 may not take it up. So we may be entering 0:06:27.360 --> 0:06:30.200 even a more volatile period with regards to what's going 0:06:30.240 --> 0:06:31.440 on here on the tariff side. 0:06:31.520 --> 0:06:33.560 But you don't expect the terrors to go away, do you, 0:06:33.680 --> 0:06:36.520 Because there are other tools they can use to enact them. 0:06:37.120 --> 0:06:41.400 There are other tools, but they're not as quick or 0:06:41.400 --> 0:06:46.520 efficient as the Emergency Act that he called upon. That 0:06:46.560 --> 0:06:50.320 the courts may rule he just doesn't have the power 0:06:50.360 --> 0:06:52.960 to declare an emergency when there doesn't seem to be 0:06:52.960 --> 0:06:58.919 an emergency. But again, I think he and the administration 0:06:59.400 --> 0:07:03.159 may conclude that it's time to downplay the whole thing 0:07:03.480 --> 0:07:04.040 and move on. 0:07:04.839 --> 0:07:07.080 What does that mean for corporate America ed Some of 0:07:07.120 --> 0:07:10.040 these companies are just starting to wrap their heads around 0:07:10.040 --> 0:07:11.480 what it needs for them, or you have the legend 0:07:11.480 --> 0:07:13.600 of Amazon last week, who said, we just don't know 0:07:13.640 --> 0:07:16.400 what's going to happen moving forward. Is there enough clarity 0:07:16.440 --> 0:07:19.520 after Friday for corporations to move forward with things like 0:07:19.560 --> 0:07:21.120 spending and hiring plans. 0:07:21.720 --> 0:07:23.560 I think we have to see what the courts rule 0:07:23.600 --> 0:07:27.600 and how the administration responds to that. The reality is, 0:07:27.720 --> 0:07:30.520 if we just take it at face value that the 0:07:30.560 --> 0:07:35.480 President wants to basically achieve a fifteen percent tariff across 0:07:35.520 --> 0:07:39.040 the board on everybody and raise something like four or 0:07:39.080 --> 0:07:42.840 five hundred billion dollars, well, the corporate income tax raises 0:07:42.880 --> 0:07:46.440 about six hundred billion dollars. In effect, the tariffs are 0:07:46.440 --> 0:07:51.000 attack and there are direct tax on importers businesses, and 0:07:51.040 --> 0:07:55.600 so it is a negative for corporate profitability. And again 0:07:56.240 --> 0:07:59.160 we've heard some bad news out of GM and Ford 0:07:59.400 --> 0:08:02.440 anticipate this, but other companies said, we just don't know 0:08:02.640 --> 0:08:05.160 enough to really figure out what this is going to 0:08:05.200 --> 0:08:08.480 cost us. So that's still a known unknown. 0:08:08.640 --> 0:08:10.840 But still a little bit more clarity in terms of 0:08:10.880 --> 0:08:13.440 the bottom line rate for tariffs. We do have a 0:08:13.440 --> 0:08:16.480 weakening jobs report on Friday. Do you think the Fed 0:08:16.520 --> 0:08:18.200 is in position to cut in September? 0:08:19.600 --> 0:08:24.400 Well, the market certainly thought so on Friday, maybe today 0:08:24.760 --> 0:08:28.560 there'll be a change of opinion. I think on Friday 0:08:28.600 --> 0:08:32.160 we got the probability of a rate cut according to 0:08:32.200 --> 0:08:37.280 the CME Fedwatch tracking tool, going up to a ninety 0:08:37.280 --> 0:08:42.640 percent probability. Then over the weekend that you know, that 0:08:42.720 --> 0:08:45.400 actually simmer down by the end of Friday down to 0:08:45.840 --> 0:08:49.480 eighty percent. I wouldn't be surprised if there is no 0:08:49.600 --> 0:08:52.839 rate cut on September because we still have a batch 0:08:52.880 --> 0:08:56.640 of data up ahead here, particularly on the inflation front. 0:08:56.679 --> 0:08:59.880 We are seeing that the tariffs are having an impact 0:09:00.040 --> 0:09:03.560 on inflation. A lot of people saying, well, it's not there, 0:09:03.600 --> 0:09:06.240 but the reality is, if you look at durable goods inflation, 0:09:06.720 --> 0:09:11.600 durable goods prices typically fall. That's what they did before 0:09:12.440 --> 0:09:15.679 the pandemic. Then they had that inflation spike, but then 0:09:15.720 --> 0:09:18.080 they came right back and started falling again, and now 0:09:18.080 --> 0:09:20.880 they're rising again, mostly because of the tariffs. 0:09:21.679 --> 0:09:23.319 ED thanks so much for your time this morning, to 0:09:23.400 --> 0:09:36.679 great point at your Denny of your Denny research. IPOs 0:09:36.760 --> 0:09:39.480 are making a comeback this summer, with the latest FIGMA 0:09:39.520 --> 0:09:42.840 share surging more than two hundred and fifty percent in 0:09:42.880 --> 0:09:44.120 its debut last week. 0:09:44.200 --> 0:09:45.439 So excited for this conversation. 0:09:45.520 --> 0:09:48.200 Joining us now is Nicey President Lynn Martin lind Good morning, 0:09:48.400 --> 0:09:49.359 thanks for joining. 0:09:49.160 --> 0:09:50.280 Us, Thanks for having me. 0:09:50.440 --> 0:09:50.520 So. 0:09:50.679 --> 0:09:51.600 You told John. 0:09:51.480 --> 0:09:55.160 Leson myself in May that you saw quote unprecedented levels 0:09:55.160 --> 0:09:58.040 of volume following the April second Liberation Day, but for 0:09:58.040 --> 0:10:00.920 the IPO landscape, you were optimistic, but the timeline was 0:10:00.960 --> 0:10:03.640 shifted out. Where are we now in that timeline in 0:10:03.640 --> 0:10:04.439 that pipeline? 0:10:04.520 --> 0:10:07.640 Well, I think as a result of the successful deals 0:10:07.679 --> 0:10:11.560 we've been able to bring to market, really starting in 0:10:11.600 --> 0:10:17.160 that end of May timeframe, but most manifestly over the 0:10:17.240 --> 0:10:20.280 last two weeks when we had seven IPOs, I think 0:10:20.320 --> 0:10:23.160 it's fair to say that the markets are open for IPOs. 0:10:23.600 --> 0:10:27.200 Our markets open for all IPOs, though, d do we 0:10:27.240 --> 0:10:29.440 still need to be selective among those that are being 0:10:29.440 --> 0:10:31.840 brought in and they need to be tech companies for example, 0:10:32.080 --> 0:10:34.120 or can we start to see some of the smaller 0:10:34.160 --> 0:10:35.240 midcaps come back too. 0:10:35.320 --> 0:10:39.439 Yeah, we've seen a variety of sizes and companies across 0:10:39.559 --> 0:10:42.560 different sectors come to market in the last few months. 0:10:43.040 --> 0:10:46.679 UH Tech in particular, has, as you point out, had 0:10:46.679 --> 0:10:49.160 a great reception in the market. You know, in the 0:10:49.240 --> 0:10:51.280 last two weeks we saw Nils and IQ. We saw 0:10:51.360 --> 0:10:54.320 McGrath Hill, we saw Figma as you just had the 0:10:54.400 --> 0:10:56.880 screen up, and then a couple months ago we saw 0:10:56.880 --> 0:11:00.440 a Circle come to market, also Hinge Health and Mountain, 0:11:00.640 --> 0:11:05.959 so some really tech led companies, but mostly pretty much 0:11:05.960 --> 0:11:06.600 all sectors. 0:11:07.000 --> 0:11:09.200 The market rate a bit of a split screen though, 0:11:09.280 --> 0:11:11.600 in because you start to have some IPOs coming back, 0:11:12.000 --> 0:11:14.200 and at the same time you have these private equity 0:11:14.240 --> 0:11:17.559 players coming up with liquidity solutions that just allows companies 0:11:17.760 --> 0:11:20.199 to be private for longer, be it secondary funds, be 0:11:20.280 --> 0:11:23.880 it perpetual capital. And their argument is companies just don't 0:11:23.880 --> 0:11:25.800 want to be public and we're giving the option not 0:11:25.880 --> 0:11:28.720 to be longer term. Does that hinder IPOs? 0:11:28.880 --> 0:11:32.000 Well, I think what it means is that the companies 0:11:32.000 --> 0:11:35.120 that come to market are better companies. You look at 0:11:35.120 --> 0:11:37.360 the companies that have come to market, it's not the 0:11:37.400 --> 0:11:40.960 first time that they've been in the news about an 0:11:41.000 --> 0:11:44.760 IPO bo Look at Circle for example, they were talking 0:11:44.800 --> 0:11:47.760 about going public back in twenty twenty one when they 0:11:47.800 --> 0:11:50.000 came to market. Though they're a better company. They have 0:11:50.000 --> 0:11:53.120 a more refined strategy, a more refined P and L, 0:11:53.880 --> 0:11:58.160 a story for the investors that generates a tremendous amount 0:11:58.160 --> 0:12:01.360 of excitement. And I think what you're seeing with the 0:12:01.440 --> 0:12:04.920 reception of the companies that have come to market is 0:12:04.960 --> 0:12:08.880 that pent up demand in the public markets, that pent 0:12:09.040 --> 0:12:12.960 up excitement in the public markets for new issues to 0:12:13.080 --> 0:12:16.360 come to market. It's something that I talk with long 0:12:16.400 --> 0:12:20.680 only investors, something I talk with retail about how they 0:12:20.800 --> 0:12:24.199 really want to see these new names, these growth companies 0:12:24.240 --> 0:12:26.280 come to market to add to their portfolio. 0:12:26.520 --> 0:12:28.880 That pent up demand. Was it being held back because 0:12:28.920 --> 0:12:30.240 of regulation in Washington? 0:12:30.679 --> 0:12:33.320 It was really being held back because of volatility and 0:12:33.400 --> 0:12:38.200 uncertainty in markets. There've been a variety of events that 0:12:38.240 --> 0:12:42.840 have occurred over the last three three and a half years, wars, 0:12:43.679 --> 0:12:49.040 geopolitical uncertainty that have fueled that volatility. Now that there 0:12:49.120 --> 0:12:54.960 is more certainty, more certainty around the geopolitical landscape, more 0:12:55.040 --> 0:12:59.120 certainty around the market and the trajectory of the market, 0:12:59.200 --> 0:13:01.960 that's why you're seeing these companies finally come to market. 0:13:02.120 --> 0:13:04.520 How has the change in regulatory leadership though the SEC 0:13:04.640 --> 0:13:08.559 regulates the nicey, how has that potentially changed your business 0:13:08.600 --> 0:13:09.200 going forward? 0:13:09.600 --> 0:13:12.280 We're very optimistic. We had a great relationship with the 0:13:12.320 --> 0:13:17.280 past administration and the past SEC, but We're very excited. 0:13:16.800 --> 0:13:19.080 About blackinso's very different than Garrigance. 0:13:19.240 --> 0:13:21.680 He is he is, and we've had a long relationship 0:13:21.720 --> 0:13:25.000 with Paul Atkins. This isn't Paul Akins' first time in 0:13:25.080 --> 0:13:28.520 the SEC, and we had a very productive working relationship 0:13:28.559 --> 0:13:32.079 with him. We've already had a very productive working relationship 0:13:32.440 --> 0:13:35.280 in the short time that he's been chair, and a 0:13:35.320 --> 0:13:41.120 lot of the modifications that he's looking to make I 0:13:41.160 --> 0:13:43.560 think are going to benefit the public markets. 0:13:43.760 --> 0:13:45.920 So we have a moment where public market volatility has 0:13:45.960 --> 0:13:48.640 started to edd But even so, you have the rebirth 0:13:48.720 --> 0:13:50.960 of memestocks, and you have these weird things happening where 0:13:50.960 --> 0:13:53.200 you have open Door, for example, on one day, can 0:13:53.200 --> 0:13:56.319 account for ten percent of all equity trading volume. What 0:13:56.360 --> 0:13:58.920 do you make of just the health of these markets 0:13:58.960 --> 0:14:01.000 at this moment as some of that starts to bubble up. 0:14:01.480 --> 0:14:03.720 I think the markets are incredibly healthy. I mean, our 0:14:03.760 --> 0:14:06.960 markets are the envy of the world. The breath, the depth, 0:14:07.040 --> 0:14:12.280 the liquidity, the trade certainty. Any one day, though there 0:14:12.320 --> 0:14:16.120 could be excitement about a different name. I think what 0:14:16.160 --> 0:14:18.320 you're seeing is a lot of the pent up demand 0:14:18.920 --> 0:14:21.400 looking for the new issues and new things to treat. 0:14:21.320 --> 0:14:23.680 It's very different though than twenty twenty one, where those 0:14:23.720 --> 0:14:26.000 retail investors have had all the money to go. 0:14:26.320 --> 0:14:27.760 So when you look at that, you're like, Okay, this 0:14:27.840 --> 0:14:28.080 is just. 0:14:28.080 --> 0:14:30.320 A temporary phenomenon, or do we just need to get 0:14:30.400 --> 0:14:34.040 used to single names getting this wind sweep of various 0:14:34.080 --> 0:14:36.600 excitement built up online and that's just the new normal 0:14:36.640 --> 0:14:37.000 we live in. 0:14:37.120 --> 0:14:39.720 No, I really can't speak to what's driving a stock 0:14:39.840 --> 0:14:46.120 any on any given day. Certainly the social media and 0:14:46.320 --> 0:14:52.200 the conversation around stocks overall, I think is actually a 0:14:52.200 --> 0:14:55.600 good thing. It means that people aren't interested in investing, 0:14:55.640 --> 0:14:59.040 they're interested in adding to their portfolio. They're also interested 0:14:59.080 --> 0:15:00.840 in diversifying their portfolio. 0:15:01.080 --> 0:15:02.160 Speaking of diversification. 0:15:02.400 --> 0:15:04.240 On Thursday, at and T says they're going to have 0:15:04.240 --> 0:15:06.240 this dual listing and the icy in Texas. 0:15:06.320 --> 0:15:08.160 What's the business like in Texas. 0:15:08.480 --> 0:15:12.720 Yeah, Well, we're very supportive of all of the changes 0:15:12.760 --> 0:15:15.440 that Governor Abbit has rolled out in the state of 0:15:15.480 --> 0:15:19.440 Texas to really foster that pro growth environment. Since we 0:15:19.600 --> 0:15:24.800 announced NYC Texas and launched the exchange, which was the 0:15:24.960 --> 0:15:28.400 end of March this year, we've added twenty new listings 0:15:28.880 --> 0:15:33.120 to the exchange. So we're very optimistic and grateful for 0:15:33.200 --> 0:15:35.520 a governor abbit for really leading the way on pro 0:15:35.600 --> 0:15:36.440 business atmosphere. 0:15:36.440 --> 0:15:38.200 Do you see more money leaving New York though? 0:15:39.120 --> 0:15:42.840 You know, I don't really, I don't know. I don't 0:15:42.880 --> 0:15:45.800 think so. I think New York's always going to be 0:15:45.880 --> 0:15:49.480 an important at the center for markets. But I think 0:15:49.520 --> 0:15:53.240 it's interesting the pro business moves and then ultimately what 0:15:53.640 --> 0:15:56.280 the pro business moves in Texas will lead to. 0:15:57.120 --> 0:15:59.640 On the federal level. More than anything, Lynn, thanks so 0:15:59.720 --> 0:16:00.240 much for time. 0:16:00.280 --> 0:16:03.080 Thanks for having great insight, and I see President Lynn Martin. 0:16:13.360 --> 0:16:17.160 Michelle Meyer of MasterCard Economics Institute writing, consumers are the 0:16:17.160 --> 0:16:19.480 heartbeat of the economy and they are resilient. 0:16:19.560 --> 0:16:20.440 Michelle joins us. 0:16:20.440 --> 0:16:23.040 Now, so you say they're resilient, what kind of cracks Michelle, 0:16:23.080 --> 0:16:25.000 and good morning, thanks for joining us. Do you think 0:16:25.160 --> 0:16:26.840 the economy is seeing right now when it comes to 0:16:26.880 --> 0:16:27.400 the consumer? 0:16:27.840 --> 0:16:28.880 Well, I think it goes back to. 0:16:28.800 --> 0:16:31.240 What we learned over the last few days on Friday 0:16:31.240 --> 0:16:34.320 with the jobs report that clearly there has been an 0:16:34.360 --> 0:16:38.440 certainty impact in the economy that has mattered for companies 0:16:38.480 --> 0:16:41.440 when they think about the labor demand numbers. So the 0:16:41.680 --> 0:16:43.840 slow down in job creation within the May, and the 0:16:43.880 --> 0:16:46.880 Junie report looking distinctly different than we thought it was 0:16:46.880 --> 0:16:49.840 in real time, shows that's something that uncertainty mattered, that 0:16:49.960 --> 0:16:53.040 there probably was some pausing in terms of the pace 0:16:53.080 --> 0:16:57.320 of job creation. But importantly, there's very little evidence of 0:16:57.360 --> 0:17:00.000 firing happening, whether you look at the jobless claims now 0:17:00.480 --> 0:17:03.040 or you look at the JOLT survey. And I think 0:17:03.080 --> 0:17:06.359 for consumers, what that results in is a labor market 0:17:06.400 --> 0:17:09.760 that is still supportive right, an unemployment rate of four 0:17:09.800 --> 0:17:12.920 point two percent, wage growth that is still running above 0:17:13.600 --> 0:17:17.920 underlying inflation, even with some of the tariff inflation impulses starting. 0:17:17.560 --> 0:17:18.080 To move in. 0:17:18.560 --> 0:17:22.000 So consumers are managing this, I think quite remarkably. 0:17:21.600 --> 0:17:23.760 And things like sales and the earnings we've seen look 0:17:23.840 --> 0:17:27.240 really strong. But Andrew lapthorn Over at Softgen noted that 0:17:27.240 --> 0:17:28.879 two thirds of the companies in the S and P 0:17:29.359 --> 0:17:32.639 reported declining profit margins. In other words, for now, the 0:17:32.680 --> 0:17:35.679 companies are eating the higher costs. If they turn around 0:17:35.800 --> 0:17:38.639 and start to rise and raise costs, will the consumer 0:17:38.720 --> 0:17:39.480 still be resilient. 0:17:39.920 --> 0:17:40.840 Well, I think it's. 0:17:40.680 --> 0:17:43.119 Happening, and it's happening slowly, And this is important to 0:17:43.200 --> 0:17:45.560 keep in mind, which is that I think relative to 0:17:45.560 --> 0:17:48.439 the initial expectations and the fear of terrists was that 0:17:48.480 --> 0:17:51.239 it was going to impact the economy immediately and all 0:17:51.280 --> 0:17:53.560 of a sudden, consumers won't be able to get items 0:17:53.640 --> 0:17:56.359 or they won't be able to afford certain goods. And 0:17:56.400 --> 0:17:59.960 the reality is that it's happening slowly. It's moving into 0:18:00.119 --> 0:18:03.040 the economy. It's starting more on the supplier side than 0:18:03.080 --> 0:18:06.000 the companies and into consumers. And if you look at 0:18:06.000 --> 0:18:09.520 the last inflation report, it's starting to show in certain 0:18:09.560 --> 0:18:12.440 categories a lot of the durable goods, discretionary goods, whether 0:18:12.440 --> 0:18:16.400 you're looking at appliances or auto tires or even into apparel, 0:18:16.440 --> 0:18:18.320 it's starting to show up. So I would argue that 0:18:18.359 --> 0:18:21.960 consumers are ready starting to face some of those higher prices. 0:18:22.119 --> 0:18:25.080 It's happening gradually, and it's happening uneven, which means that 0:18:25.160 --> 0:18:27.639 consumers still have some choices in terms of how to 0:18:27.720 --> 0:18:30.920 navigate this and move around some of these price shocks. 0:18:30.960 --> 0:18:33.760 In terms of the unevenness, it's also interesting to look 0:18:34.080 --> 0:18:36.399 and see what the hottest parts of this economy are, 0:18:36.440 --> 0:18:39.080 and it's hard to argue it's anything but tech and AI, 0:18:39.560 --> 0:18:42.399 but these are the very companies that are firing on 0:18:42.440 --> 0:18:45.879 a headline level and only hiring at the top echelons 0:18:45.880 --> 0:18:48.000 where you get the most pay. When you look at 0:18:48.000 --> 0:18:50.760 that trend, do you see what you're talking about, the uneveness. 0:18:50.800 --> 0:18:53.240 Does it start to get exacerbated by some of these 0:18:53.280 --> 0:18:53.840 tech moves. 0:18:54.480 --> 0:18:56.600 Well, I think the fact that you're seeing all this 0:18:56.760 --> 0:19:01.359 investment focus on technology is actually really positive secular trend 0:19:01.359 --> 0:19:04.199 that hopefully can help get us through some of this 0:19:04.280 --> 0:19:07.240 sick legal adjustment that's happening as a result of tariffs. 0:19:07.440 --> 0:19:09.520 But yes, to your point, what it also does is 0:19:09.520 --> 0:19:11.480 it creates a lot of wealth in the economy. So 0:19:11.480 --> 0:19:13.240 if you look at the equity market, we'll see what 0:19:13.480 --> 0:19:16.200 results today. But the trend has clearly been very positive, 0:19:16.200 --> 0:19:21.320 notwithstanding Friday, and therefore that's positive wealth gains, and those 0:19:21.359 --> 0:19:24.639 positive wealth gains will filter into consumer spending amongst the 0:19:24.680 --> 0:19:27.600 cohort that can realize those gains, that can invest and 0:19:27.680 --> 0:19:28.919 can see that wealth creation. 0:19:29.200 --> 0:19:31.200 That's the upper achalance of society. 0:19:31.720 --> 0:19:33.480 Do you feel like we're going into a K shape 0:19:33.480 --> 0:19:35.359 economy or we're just already in one? 0:19:35.720 --> 0:19:38.199 You know, that's been a conversation that's been on and 0:19:38.240 --> 0:19:40.439 off for the past several years. And I think the 0:19:40.480 --> 0:19:43.800 reality is that it's there's always an unevenness about any 0:19:43.880 --> 0:19:47.600 business cycle, and I think when you consider the start 0:19:47.880 --> 0:19:50.960 of this cycle coming out of the pandemic, it was 0:19:50.960 --> 0:19:53.440 certainly one that was much more driven by lower income 0:19:53.440 --> 0:19:55.800 consumers than we have seen in recent history because of 0:19:55.840 --> 0:19:58.080 the amount of stimulus that pumped in, because of the 0:19:58.160 --> 0:20:00.840 movement of labor market, red hot labor mark, very strong 0:20:00.840 --> 0:20:03.840 wage growth, and that has shifted over the last two 0:20:03.920 --> 0:20:07.399 years or so where lower income consumers aren't saying that 0:20:07.440 --> 0:20:11.439 same wave of stimulus clearly, and wage growth has slowed 0:20:11.440 --> 0:20:13.720 a bit more for that population than for others, and 0:20:13.960 --> 0:20:16.159 the balance sheet is just frankly not going to be 0:20:16.200 --> 0:20:17.639 a supportive We have a. 0:20:17.680 --> 0:20:20.320 Viewer writing in Loving to get your thoughts on real 0:20:20.359 --> 0:20:22.920 PC turning negative in the first six months of twenty 0:20:22.960 --> 0:20:25.000 twenty five. They say it's the first time we've seen 0:20:25.000 --> 0:20:27.400 that since twenty ten, excluding of course the pandemic. 0:20:27.960 --> 0:20:29.960 Well, real PC turning negative I think we can debate, 0:20:30.000 --> 0:20:32.359 but certainly there's been a slow down in measures of 0:20:32.400 --> 0:20:34.359 real PC if you look at the GDP reports in 0:20:34.440 --> 0:20:37.200 Q one and Q two, and that reflects what we 0:20:37.200 --> 0:20:40.120 were just talking about in terms of higher prices. Right 0:20:40.160 --> 0:20:42.880 the consumer has already started to see some of those 0:20:42.920 --> 0:20:43.760 price increases. 0:20:43.760 --> 0:20:44.520 And what that does. 0:20:44.600 --> 0:20:48.440 It means that real spending starts to slow. We saw 0:20:48.480 --> 0:20:52.879