WEBVTT - Core Inflation, Income Are Reasons for Fed Caution 0:00:02.920 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.960 Wait inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.360 America's most trusted business magazine, plus global business finance and 0:00:18.400 --> 0:00:22.680 tech news. The Bloomberg Business Week podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebek from Bloomberg Radio. 0:00:27.160 --> 0:00:30.360 Well before the Thanksgiving festivities, we got an economic feast 0:00:30.480 --> 0:00:32.720 of data earlier this morning, ahead of the holiday, the 0:00:32.760 --> 0:00:35.960 government data showing the US economy expanded at a solid 0:00:35.960 --> 0:00:38.520 pace in the third quarter, largely powered by a broad 0:00:38.520 --> 0:00:42.400 based advance and consumer spending and steady business investment GDP 0:00:42.600 --> 0:00:44.920 increasing at a two point eight percent annualized pace in 0:00:44.960 --> 0:00:47.720 the third quarter. That's the second estimate, so second read 0:00:47.840 --> 0:00:50.519 of the figures from the Bureau of Economic Analysis. The 0:00:50.560 --> 0:00:54.440 economy's primary growth engine consumer spending. You me everybody, we 0:00:54.480 --> 0:00:56.760 are spending invetsing three and a half percent tim that 0:00:56.800 --> 0:00:57.880 was the most this year. 0:00:58.000 --> 0:01:00.000 And then the Fed's preferred measure of underlying and flight 0:01:00.320 --> 0:01:02.520 accelerated in October from a year ago. It kind of 0:01:02.560 --> 0:01:06.200 helps explain policymakers more cautious approach to lowering interest rates. 0:01:06.440 --> 0:01:08.640 With our roundup on everything when it comes to the 0:01:08.760 --> 0:01:11.480 US economy with us as Bloomberg News International Economics and 0:01:11.520 --> 0:01:15.360 Policy correspondent Michael McKee here in the Bloomberg Business Week studio. 0:01:15.400 --> 0:01:17.520 Mike, it's a lot you're pointing at me, Carolyn. 0:01:17.840 --> 0:01:19.800 Think it when you go for Thanksgiving dinner, do you 0:01:19.840 --> 0:01:21.480 like sit down and you walk in and you're like, 0:01:21.520 --> 0:01:23.319 you're surrounded by family? Like, all right, Mike, So what's 0:01:23.319 --> 0:01:25.039 going on with the economy? Do they is like that? 0:01:25.160 --> 0:01:25.639 The question? 0:01:25.840 --> 0:01:29.360 Sometimes sometimes you get that, and you know, like on 0:01:29.360 --> 0:01:33.199 a plane last night, somebody recognized me and said, what's. 0:01:33.080 --> 0:01:34.640 Going on with it? 0:01:34.720 --> 0:01:34.920 Was it? 0:01:35.040 --> 0:01:36.560 Are they asking about tariffs now too? 0:01:37.560 --> 0:01:39.679 I think it's a little too early for that. I mean, 0:01:39.959 --> 0:01:44.080 obviously other reporters and political types do, but the average person, 0:01:44.120 --> 0:01:45.559 they haven't focused on that yet. 0:01:46.040 --> 0:01:46.480 They will. 0:01:47.319 --> 0:01:49.520 So is it okay for somebody on an airplane or 0:01:49.520 --> 0:01:51.080 in an airport to come up to Michael McKee and 0:01:51.080 --> 0:01:52.400 ask them what's going on in the economy? 0:01:52.400 --> 0:01:53.760 Do you welcome that kind of attimp. 0:01:55.640 --> 0:01:58.240 Wear? Let me put it this way, It is so seldom. 0:01:59.240 --> 0:02:00.040 I don't believe. 0:02:01.440 --> 0:02:05.480 I am flattered. I'm happy that people are watching and 0:02:05.600 --> 0:02:06.840 listening to Bloomberg. 0:02:06.880 --> 0:02:09.079 They all listen and watch you in a big way. 0:02:09.120 --> 0:02:11.360 All right, big data dump, tell us about what we 0:02:11.400 --> 0:02:12.960 need to know about the numbers we got today. 0:02:13.320 --> 0:02:15.760 They were sort of status quoish in the sense that 0:02:15.960 --> 0:02:18.320 we are still spending. As you mentioned, three and a 0:02:18.360 --> 0:02:22.360 half percent is the revised figure for personal consumption in 0:02:22.880 --> 0:02:26.040 third quarter GDP was three point seven. But you took 0:02:26.080 --> 0:02:28.639 that pair of shoes back, I think, and that you 0:02:29.919 --> 0:02:32.960 got the refund that brought it down a little. But 0:02:33.000 --> 0:02:36.800 then the personal spending numbers came in at a reasonable level, 0:02:36.960 --> 0:02:39.480 up four tenths of eight percent. It was six tenths 0:02:39.520 --> 0:02:41.880 in the month of September. But you have to realize 0:02:41.960 --> 0:02:44.280 too that September is back to school, so maybe there 0:02:44.360 --> 0:02:46.720 was a little bit of extra spending. Then it's going 0:02:46.760 --> 0:02:49.359 to be interesting to see, but we should be set 0:02:49.440 --> 0:02:54.040 up okay for the holiday spending time. In the report, 0:02:54.160 --> 0:02:56.000 we saw a little bit of an increase in the 0:02:56.000 --> 0:02:59.000 personal savings rate, which suggests people still have some money. 0:02:59.080 --> 0:03:02.520 And the best news of all, well, it's mixed news 0:03:02.520 --> 0:03:05.720 because I have to set up the predicate that PCE 0:03:06.000 --> 0:03:08.799 price indexes, the FEDS measure went up a little bit 0:03:09.520 --> 0:03:11.880 two point three percent on a year over year basis 0:03:11.919 --> 0:03:14.800 for the headline two point eight. For the core, it 0:03:14.840 --> 0:03:18.600 gets as farther away from their two percent, But wages 0:03:18.639 --> 0:03:21.600 and salaries went up half a percent and that pushed 0:03:21.639 --> 0:03:25.280 them up above the rise in inflation. 0:03:25.639 --> 0:03:27.960 So so that's the reason for the rise. 0:03:29.120 --> 0:03:32.520 No, that's the reason why people can keep spending even 0:03:32.560 --> 0:03:36.160 though inflation may bother them. They're still making more money. 0:03:36.200 --> 0:03:39.560 They don't. We had his argument with Matt Miller on 0:03:40.080 --> 0:03:45.320 on his show this morning. You know, he, like everybody else, says, yeah, 0:03:45.360 --> 0:03:48.680 but inflation is something that people do to me. They 0:03:48.760 --> 0:03:51.920 raised prices on me, whereas if I get a raise, 0:03:51.960 --> 0:03:54.360 it's all because of me because I'm great. 0:03:54.920 --> 0:03:57.600 Well, that is great. I understand why where he's coming out. 0:03:57.480 --> 0:04:00.240 That it is funny about that, but it is true 0:04:00.280 --> 0:04:03.800 of everybody. That's a thing that psychologists have found to 0:04:03.800 --> 0:04:07.040 be true, and it's one reason why even though inflation 0:04:07.160 --> 0:04:09.160 has come down, people are still upset. 0:04:09.240 --> 0:04:11.160 So explain that a little bit more, because I think 0:04:11.200 --> 0:04:13.840 that's a really important point, especially post election, is understanding 0:04:13.840 --> 0:04:15.680 the relationship between wages and inflation. 0:04:16.279 --> 0:04:22.040 Well, wages don't cause us inflation. Inflation causes wages because 0:04:22.080 --> 0:04:26.160 the causality is that prices go up, and then people say, 0:04:26.160 --> 0:04:27.920 I got to get even, so I go to my 0:04:28.040 --> 0:04:30.839 boss and I ask for more money. And that's certainly 0:04:30.880 --> 0:04:33.320 what you see when when you see the pattern bargaining 0:04:33.360 --> 0:04:36.760 and union negotiations, and I guess the rest of us 0:04:36.760 --> 0:04:38.880 are all getting wages increases this year. 0:04:38.960 --> 0:04:42.200 We hope not some of those Starbucks folks. But remember 0:04:42.240 --> 0:04:43.040 we did that story. 0:04:44.400 --> 0:04:49.760 But people do think that they get pay increases because 0:04:49.800 --> 0:04:54.799 they deserve them. And I wouldn't argue, but it does. 0:04:55.200 --> 0:04:57.520 You know, you have to keep in mind that the 0:04:57.600 --> 0:05:01.840 relationship between inflation and your wages increases what matters. And if, 0:05:02.800 --> 0:05:04.720 as we've seen for the last year and a half, 0:05:04.920 --> 0:05:08.080 wages are rising faster than inflation, then we're better. 0:05:07.839 --> 0:05:10.000 Off, all right, So we can kind of keep on shopping, 0:05:10.000 --> 0:05:11.960 which is a good thing. Hey, listen, is there anything 0:05:12.000 --> 0:05:17.120 though new or slightly altered you know in the data 0:05:17.279 --> 0:05:19.400 said or not really? You said status quota to begin with, 0:05:19.440 --> 0:05:22.200 So there's nothing of that we should be like, nothing that's. 0:05:22.080 --> 0:05:25.400 Going to change the course of the Fed's thinking at 0:05:25.400 --> 0:05:28.560 this point, because they knew going in what the PCEE 0:05:28.720 --> 0:05:32.800 prices would be. The economists can figure that out. Jobless 0:05:32.800 --> 0:05:37.679 claims were still basically unchanged from the week before. There's 0:05:37.720 --> 0:05:41.760 no sign that companies are laying people off. The trade 0:05:41.800 --> 0:05:47.600 balance went down in part because it went up in 0:05:47.640 --> 0:05:51.240 the month of September because companies were bringing in products 0:05:51.279 --> 0:05:54.559 because of the possible port strike. But that will be 0:05:54.680 --> 0:05:59.320 technically a contributor to growth in the fourth quarter. So 0:06:00.279 --> 0:06:02.840 there's some good news. And GDP as strong suggests that 0:06:03.200 --> 0:06:05.559 growth will probably still be strong in the fourth quarter, 0:06:05.720 --> 0:06:08.160 and that was not expected at the beginning of the year. 0:06:08.200 --> 0:06:10.080 I'm going to be in here on Friday talking a 0:06:10.080 --> 0:06:12.279 little bit about Black Friday and getting an understanding of 0:06:12.279 --> 0:06:14.520 what people are spending money on. But I'm also going 0:06:14.560 --> 0:06:16.920 to be hounded by PR people throughout the entire day 0:06:16.960 --> 0:06:19.640 trying to give me updates on consumer spending. Can I 0:06:19.640 --> 0:06:21.279 pay attention to any of that or will we not 0:06:21.480 --> 0:06:24.480 know how Black Friday went and what it means for. 0:06:24.920 --> 0:06:27.200 Well, Yeah, it'll be a whole bunch of different few weeks. 0:06:27.200 --> 0:06:29.159 There'll be a whole bunch of different measures of how 0:06:29.240 --> 0:06:33.800 Black Friday went. You'll get store traffic from some people, 0:06:33.880 --> 0:06:38.200 You'll get some spending numbers from credit card companies, You'll 0:06:38.240 --> 0:06:42.000 get other spending numbers from the retailers, and none of 0:06:42.000 --> 0:06:45.760 it really means anything. It's a sort of an artificial construct. 0:06:45.920 --> 0:06:48.560 We know that it's one of the busiest times, not 0:06:48.680 --> 0:06:50.359 the busiest shopping day of the year, but we know 0:06:50.400 --> 0:06:52.560 it's one of the busiest times of the year, and 0:06:52.600 --> 0:06:56.480 that weekend it kicks off, et cetera. But really, what 0:06:56.520 --> 0:06:59.000 you end up doing is sort of looking at the 0:06:59.040 --> 0:07:03.200 spending numbers that we saw today, the numbers for November 0:07:03.240 --> 0:07:05.920 and December, and you average them out. Because one thing 0:07:05.960 --> 0:07:10.200 that's happened is the retailers have all started advertising cheaper 0:07:10.240 --> 0:07:14.000 stuff in October now for the holidays, and they've pulled 0:07:14.040 --> 0:07:16.760 forward a lot of spending. So maybe some of the 0:07:16.760 --> 0:07:20.400 people who would have gone and stood in line outside 0:07:20.400 --> 0:07:24.520 of store. Fortunately a lot of stores don't do that anymore. Thanksgiving, 0:07:26.480 --> 0:07:28.920 those people have already spent some money, so we may 0:07:28.960 --> 0:07:32.240 not see, you know, the kind of big burst you 0:07:32.360 --> 0:07:33.240 see saw in the. 0:07:33.240 --> 0:07:36.360 Past, gener little shopping last Sunday in the city and 0:07:36.360 --> 0:07:39.160 it would you give me tbdk? 0:07:39.840 --> 0:07:43.720 But it surprised hesitate there instead. 0:07:43.400 --> 0:07:47.440 Of saying nothing, would you like some skinny jeans? 0:07:48.080 --> 0:07:48.160 No? 0:07:48.360 --> 0:07:49.640 Actually I do live in Brooklyn. 0:07:50.480 --> 0:07:52.600 I could do that. But what's interesting is it wasn't 0:07:52.600 --> 0:07:54.640 as crowded as I thought, but there were lots of 0:07:54.680 --> 0:07:57.080 sales forty off some significant sales, so I thought it 0:07:57.120 --> 0:08:00.160 was interesting. One quick last question thirty forty seconds. What 0:08:00.240 --> 0:08:03.120 economy does president like Donald Trump is he handed on 0:08:03.240 --> 0:08:05.680 day one in the White House and how much of 0:08:05.680 --> 0:08:08.400 it is the result of the past administration and of 0:08:08.440 --> 0:08:09.920 FED action of the past four years. 0:08:10.000 --> 0:08:12.840 Well, it's probably going to be good, better than we 0:08:12.880 --> 0:08:15.560 thought it would be. The economy has strength going into 0:08:15.640 --> 0:08:20.200 the new year, unless some exogenous event happens that we 0:08:20.280 --> 0:08:24.960 can't predict, or unless he, through some of his tweeting, etc. 0:08:26.560 --> 0:08:29.480 Makes some sort of problem for the economy. But basically 0:08:30.120 --> 0:08:32.520 he will inherit a good economy as he did from 0:08:33.040 --> 0:08:36.680 Barack Obama. So he is lucky in that sense, and 0:08:36.760 --> 0:08:39.840 I'm sure it will be all due to him, But 0:08:40.559 --> 0:08:42.920 he can't take any credit for anything that happens before 0:08:43.040 --> 0:08:44.080 January twentieth. 0:08:44.200 --> 0:08:45.760 I just don't think it's an important narrative because we 0:08:45.760 --> 0:08:47.400 talk about this a lot with past presidents, how they 0:08:47.400 --> 0:08:50.160 are inheriting really the policies that people have been in 0:08:50.160 --> 0:08:53.520 place right the previous administration. Michael McKee, Happy Thanksgiving, You 0:08:53.559 --> 0:08:55.319 can now start your holiday. Thank you, thank you, thank 0:08:55.360 --> 0:08:56.400 you favorite pie. 0:08:57.320 --> 0:09:02.600 I tend to like Apple. I guess I'm relatively traditional. 0:09:02.960 --> 0:09:06.520 I have a piepole going on. What you can, I'm 0:09:06.559 --> 0:09:11.040 going to make it can three? Ah see all right? 0:09:11.240 --> 0:09:15.160 Bloomberg News International Economics and Policy Correspondent Michael McKee. 0:09:16.000 --> 0:09:19.559 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:19.600 --> 0:09:22.839 live weekday afternoons from two to five pm Eastern. Listen 0:09:22.880 --> 0:09:25.040 on Apple car Play and then brout Auto with a 0:09:25.040 --> 0:09:28.679 Bloomberg Business app, or watch us live on YouTube. 0:09:29.520 --> 0:09:33.040 So bloombergs Christa c put out a story recently reporting 0:09:33.040 --> 0:09:35.800 out in our Bloomberg Deals newsletter, and what she wrote 0:09:35.800 --> 0:09:38.760 is that everywhere, activists are feeling more emboldened to push 0:09:38.840 --> 0:09:42.880 for bigger, more significant asks at larger companies. Elliott leading 0:09:42.880 --> 0:09:45.280 the pack with another megacaf campaign. They called on Honeywell 0:09:45.280 --> 0:09:47.480 to break itself up. There's a lot tim that's going 0:09:47.520 --> 0:09:48.760 on when it comes to activist. 0:09:48.800 --> 0:09:53.240 Investors of activists often mirror market optimism as the market 0:09:53.360 --> 0:09:55.959 trends up with the hope that the new administration will 0:09:56.000 --> 0:09:59.280 relax regulations and bring down interest rates. That activists are 0:09:59.400 --> 0:10:01.560 actually bold and busier, but then there's this other side 0:10:01.600 --> 0:10:03.920 of things where it's like the anti ESG movement, like 0:10:03.960 --> 0:10:06.400 we saw out of that lawsuit earlier today filed by 0:10:06.480 --> 0:10:09.760 Ken Paxton out of Texas and ten other states. Curious 0:10:09.760 --> 0:10:11.319 to see what our next guest has to say. It's 0:10:11.360 --> 0:10:13.280 been a bit since we last spoke with her, so 0:10:13.360 --> 0:10:15.800 great to be checking back in with Jennifer Grancio. She's 0:10:15.840 --> 0:10:18.960 head of ETFs over at TCW. She joins us from 0:10:19.320 --> 0:10:21.600 Los Angeles. Good to have you back with us, Jennifer, 0:10:21.640 --> 0:10:22.040 How are you. 0:10:23.080 --> 0:10:24.440 I'm very well, nice to be here. 0:10:24.640 --> 0:10:26.600 We were kind of reminiscing back to when we last 0:10:26.600 --> 0:10:28.079 talked to you and we were at Milkin back in 0:10:28.120 --> 0:10:30.880 twenty twenty one. It was like that weird October Milkin 0:10:30.920 --> 0:10:33.319 event because things had been put on hold as a 0:10:33.320 --> 0:10:36.800 result of the pandemic. Things were different then. Engine Number 0:10:36.840 --> 0:10:39.880 One was an independent company. Now from about a year 0:10:39.880 --> 0:10:43.040 you've been at TCW. Just give us an update as 0:10:43.040 --> 0:10:45.080 to how the integration is going and sort of where 0:10:45.080 --> 0:10:45.560 you are now. 0:10:46.920 --> 0:10:49.559 Thank you, So Engine number One to TCW. 0:10:49.760 --> 0:10:52.840 So at TCW, you know, we've been an active manager 0:10:52.880 --> 0:10:56.360 for more than fifty years, started as a concentrated active 0:10:56.360 --> 0:11:00.000 manager and have a very large business around the public 0:11:00.040 --> 0:11:01.200 and private fixed income. 0:11:01.400 --> 0:11:03.040 So the engine number one. 0:11:03.000 --> 0:11:07.079 Acquisition about a year ago got TCW into the ETF business. 0:11:07.160 --> 0:11:10.360 And if you look at our ETF franchise today at TCW, 0:11:10.440 --> 0:11:13.080 we've got five terrific equity funds. We could talk more 0:11:13.080 --> 0:11:16.840 about that, and then much recently, more recently we've added 0:11:16.840 --> 0:11:19.600 and converted mutual funds and we now have six fixed 0:11:19.600 --> 0:11:23.400 income funds. So, as a kind of very careful, fundamental, 0:11:23.520 --> 0:11:27.120 active manager, we think the market needs these thematic products 0:11:27.120 --> 0:11:29.400 on the equity side, and then on fixed income, we 0:11:29.440 --> 0:11:32.880 think the market needs better tools to deliver income and portfolios. 0:11:33.400 --> 0:11:35.160 What do you mean in terms of better tools right now? 0:11:35.440 --> 0:11:36.960 I mean the fixed income market has been kind of 0:11:36.960 --> 0:11:38.440 a wild one this year, and I feel like go 0:11:38.520 --> 0:11:41.000 back a year in the narrative around how aggressive the 0:11:41.000 --> 0:11:43.200 FED was going to be that didn't pan out. But 0:11:43.520 --> 0:11:45.320 tell us how you are thinking about that and the 0:11:45.320 --> 0:11:47.880 types of products that are needed in the fixed income 0:11:47.880 --> 0:11:49.079 world today for investors. 0:11:50.600 --> 0:11:53.360 So, if you think about portfolio construction over the very 0:11:53.360 --> 0:11:56.840 long term, you know immediate term to very long term, 0:11:57.120 --> 0:11:59.920 you think about fixing income and a portfolio as providing 0:12:00.120 --> 0:12:03.000 defense and ballast as well as return. And so if 0:12:03.000 --> 0:12:06.360 we look at portfolios today, markets have been very interesting 0:12:06.480 --> 0:12:09.600 for the last however many years, and honestly, you know, 0:12:09.640 --> 0:12:13.080 I think investors still have too much cash, and so 0:12:13.160 --> 0:12:15.880 fixed income is a way both to diversify the portfolio 0:12:16.360 --> 0:12:19.000 and to kind of move out of cash and into 0:12:19.200 --> 0:12:20.600 more income producing assets. 0:12:20.600 --> 0:12:23.160 And so what we've done at TCW is, we know. 0:12:23.080 --> 0:12:26.880 That everybody's got something at the core total return portfolio today, 0:12:27.160 --> 0:12:29.479 and so what we've done is we've launched six products 0:12:29.720 --> 0:12:32.560 that let you, in a very smart and considered way, 0:12:33.040 --> 0:12:36.280 have total return plus income or I'll actually leg into 0:12:36.400 --> 0:12:38.559 additional layers of income in the portfolio. 0:12:39.280 --> 0:12:40.960 And that's what the TCW ets do. 0:12:41.640 --> 0:12:45.240 I am curious too about you know, why now in 0:12:45.360 --> 0:12:50.280 terms of switching the funds, some of the fixed income funds, 0:12:50.280 --> 0:12:53.520 converting them from mutual funds to ETFs, why now is 0:12:53.559 --> 0:12:54.360 the time to do it? 0:12:55.559 --> 0:12:57.599 Yeah, if you look at the market, you know, the 0:12:57.640 --> 0:12:59.920 ETF market has been around for a long time now, 0:13:00.120 --> 0:13:04.080 but the use of active strategies in the ETF wrapper 0:13:04.559 --> 0:13:07.679 is really accelerated in growth. And so this year, at 0:13:07.679 --> 0:13:09.839 this point in the year, we probably have the thirty 0:13:09.840 --> 0:13:13.160 percent growth and flows into active ETFs. It's about eight 0:13:13.240 --> 0:13:16.800 hundred billion in total now. And so as TCW we 0:13:16.840 --> 0:13:20.720 serve institutional investors, we serve wealth and retirement clients, and 0:13:20.800 --> 0:13:23.880 a lot of those clients love the mutual funds, and 0:13:24.400 --> 0:13:28.560 as people are building wealth oriented taxable portfolios, we have 0:13:28.679 --> 0:13:31.280 a lot of investors that really are looking for ways 0:13:31.320 --> 0:13:34.800 to use our products and models, use our products in. 0:13:34.800 --> 0:13:37.200 The simple vehicle and the ETF that we've gotten used to. 0:13:37.800 --> 0:13:40.839 And so our ETF range is coming in alongside our 0:13:40.840 --> 0:13:41.959 great mutual funds. 0:13:42.200 --> 0:13:44.520 Flexer is total return. 0:13:44.120 --> 0:13:47.280 And a yield product. Use is the first of its 0:13:47.360 --> 0:13:50.760 kind way to add yield. Let an active manager select 0:13:50.800 --> 0:13:53.000 and add for you, and we can talk a little 0:13:53.000 --> 0:13:55.880 bit more about that. Other ways to look at income. 0:13:55.920 --> 0:13:58.080 In the case of bank loans are high yield. We 0:13:58.120 --> 0:14:00.800 think the index products actually aren't the rank tools. So 0:14:00.800 --> 0:14:02.760 we've also launched ETFs in that space. 0:14:02.960 --> 0:14:04.800 Remind me again, though, just go back, what kind of 0:14:04.800 --> 0:14:06.520 flows have you been seeing into the fixed income world, 0:14:07.480 --> 0:14:10.120 especially post election. I'm just curious what you've been seeing 0:14:10.160 --> 0:14:12.040 more less, give me some context. 0:14:12.280 --> 0:14:15.520 Yeah, flows into fixed income have picked up, for sure. 0:14:15.679 --> 0:14:17.760 I think listen, we would all love to have a 0:14:17.760 --> 0:14:20.400 crystal ball and know exactly what's going to happen. But 0:14:20.480 --> 0:14:23.000 I think flows into fixed income have picked up, but 0:14:23.040 --> 0:14:26.120 there's still a lot of money in cash, and some 0:14:26.200 --> 0:14:28.240 of that money that's in cash could be coming into 0:14:28.240 --> 0:14:30.760 fixed income products that could be coming into things like 0:14:30.800 --> 0:14:34.200 Triple A clos that's another ETF we just launched right 0:14:34.280 --> 0:14:37.120 where it's not sitting in cash. It's higher return, but 0:14:37.120 --> 0:14:39.520 it's also very safe. So we think that people are 0:14:39.560 --> 0:14:41.760 putting money back to work, they need the right tools 0:14:41.800 --> 0:14:42.120 to do it. 0:14:42.200 --> 0:14:44.040 Hey, listen, one thing we were thinking about prepping for 0:14:44.080 --> 0:14:46.280 this and so great to get an update of kind 0:14:46.280 --> 0:14:47.880 of what you guys are doing at TCW. But I 0:14:47.920 --> 0:14:50.200 have to say, you know, we thought about that conversation 0:14:50.280 --> 0:14:52.400 at milk and I mean when number you know, into 0:14:52.440 --> 0:14:54.440 Number one came on the scene, we were like, who 0:14:54.480 --> 0:14:57.160 are they and they're taking on this massive you know, 0:14:57.240 --> 0:15:02.080 integrated oil company, energy company that was exon the activism 0:15:02.120 --> 0:15:05.520 that Number one did. Little note fund waged a battle 0:15:05.720 --> 0:15:08.880 and one got seats on the board. When you look 0:15:08.960 --> 0:15:11.400 back at that moment, what was so key for it 0:15:11.480 --> 0:15:15.360 about you? For you guys as a firm, as an activist. 0:15:16.000 --> 0:15:18.360 Yeah, I mean I think what Engine number one did 0:15:18.520 --> 0:15:21.520 was really kind of looking at the fundamental changes that 0:15:21.560 --> 0:15:24.320 we see unfolding in the industry in terms of how 0:15:24.360 --> 0:15:26.880 we use power, in terms of how we use energy, 0:15:27.640 --> 0:15:31.920 in terms of restoring and manufacturing, and frankly, energy companies 0:15:31.960 --> 0:15:34.880 had a way to capitalize on that. They were taking advantage. 0:15:35.000 --> 0:15:37.400 Exon needed to do a better job of capital allocation, 0:15:37.640 --> 0:15:40.520 which they've done. And at TCW, you know, we're always 0:15:40.560 --> 0:15:43.840 looking at how things change over time. We're active managers, 0:15:44.440 --> 0:15:46.560 and so what we did at Exon, I think, was 0:15:46.640 --> 0:15:49.080 to make a point that the world is changing around 0:15:49.200 --> 0:15:52.480 energy and power use and these companies can, companies like 0:15:52.520 --> 0:15:54.960 Exon can do a good job of capital allocation and 0:15:55.000 --> 0:15:56.000 take advantage of that. 0:15:56.720 --> 0:15:59.600 And we still do that across our whole business at TCW. 0:15:59.680 --> 0:16:03.560 We always looking at fundamental risks and you know, economically 0:16:03.560 --> 0:16:04.440 material risks. 0:16:05.080 --> 0:16:06.840 And the one of the funds that. 0:16:06.800 --> 0:16:09.200 Came over from ENTIONE number one to TCW, net Z 0:16:10.600 --> 0:16:12.960 is still a great way to kind of invest in 0:16:12.960 --> 0:16:16.480 that energy and power transition. At the same time, at TCW, 0:16:17.000 --> 0:16:22.000 we've created this range of fixed income right ets so 0:16:22.040 --> 0:16:24.480 that you can also I'm that part of the portfolio 0:16:24.760 --> 0:16:27.040 build for income so there's a lot of very exciting 0:16:27.040 --> 0:16:32.000 opportunities to come alongside and investor portfolios. This allocation to 0:16:32.080 --> 0:16:35.240 the index and the weight on big tech names that 0:16:35.480 --> 0:16:36.640 probably is too heavy. 0:16:36.680 --> 0:16:39.080 But Jennifer sitting in cash, can I ask you? 0:16:39.160 --> 0:16:42.600 Can I ask one thing though? You know, when you know, 0:16:42.680 --> 0:16:45.480 I think we all thought fossil fuel growth, that this 0:16:45.640 --> 0:16:47.760 was going to be the end of Exxon being able 0:16:47.760 --> 0:16:50.080 to really kind of really continue to kind of grow 0:16:50.120 --> 0:16:52.520 in that area. All three of the board picks that 0:16:52.560 --> 0:16:56.240 you guys put in voted in favor of the sixty 0:16:56.280 --> 0:17:02.520 billion dollar acquisition of Pioneer Natural Resources per basin Behemoth. 0:17:03.040 --> 0:17:05.560 So like, when you look at that, so obviously not 0:17:05.640 --> 0:17:08.760 an end to Exon's production. I think their oil production 0:17:08.800 --> 0:17:10.719 it's highest and its one hundred and forty year history 0:17:11.000 --> 0:17:13.880 just thirty forty seconds here, So is it still a win? 0:17:14.200 --> 0:17:14.280 Like? 0:17:14.359 --> 0:17:15.280 How do you see that? 0:17:16.840 --> 0:17:20.080 Yeah, our work with Exon was around raising the stop price, 0:17:20.080 --> 0:17:22.280 which ends to number one. You know, changed the stop 0:17:22.280 --> 0:17:27.960 price of Exon seventy percent. It encouraged Exon to add 0:17:28.000 --> 0:17:31.000 other skills to the board and then independently Exon and 0:17:31.040 --> 0:17:34.400 the boarded Exon have found ways to make money in 0:17:34.520 --> 0:17:38.119 kind of new and greater businesses as well as to 0:17:38.240 --> 0:17:42.040 smartly invest to basically meet the demand we have for 0:17:42.200 --> 0:17:45.120 energy and power. It's us as consumers that are using 0:17:45.119 --> 0:17:48.280 AI and data centers and phones, and so they have 0:17:48.720 --> 0:17:52.240 a very different discipline now than they did before that campaign, 0:17:52.240 --> 0:17:54.120 and we think if that's an important investment theme. 0:17:54.320 --> 0:17:56.359 All right, So glad to get some time with you. 0:17:56.640 --> 0:17:59.920 Happy Thanksgiving, Jennifer Grancio over at TC. 0:18:02.720 --> 0:18:06.560 You're listening to the Bloomberg Business Week podcast. Listen live 0:18:06.680 --> 0:18:09.479 each weekday starting at two pm Eastern on Apple car 0:18:09.600 --> 0:18:12.560 Play and Android Auto with the Bloomberg Business App. You 0:18:12.600 --> 0:18:15.879 can also listen live on Amazon Alexa from our flagship 0:18:15.920 --> 0:18:19.720 New York station, Just say Alexa playing Bloomberg eleven thirty. 0:18:21.119 --> 0:18:22.960 All right, are we there yet? It's soon to be 0:18:23.000 --> 0:18:27.119 replaced by do we need this? Get to Thanksgiving and 0:18:27.119 --> 0:18:28.000 then you gotta do shopping. 0:18:28.040 --> 0:18:30.880 After I was over at somebody's house over the weekend. 0:18:31.160 --> 0:18:34.119 Their names will go somebody. They were anonymous, And there 0:18:34.160 --> 0:18:36.280 was a peloton. There was a peloton in the basement. 0:18:36.840 --> 0:18:38.160 It was being used as a drying wreck. 0:18:40.119 --> 0:18:43.600 How many pieces of workout equipment have I certainly had 0:18:43.600 --> 0:18:45.520 in my homes and it's like, all of a sudden, 0:18:45.560 --> 0:18:47.960 like the clothes are hanging on it, and it's really sad. 0:18:48.119 --> 0:18:48.880 Just throwing it out there. 0:18:48.960 --> 0:18:51.960 It's really sad, all right. Great story that gets into 0:18:52.119 --> 0:18:54.280 kind of what to expect. I love how the story 0:18:55.000 --> 0:18:57.840 by our team here at Bloomberg. It starts off with 0:18:57.920 --> 0:19:01.520 driving six hours for used rowing machines, slashing Christmas budgets 0:19:01.520 --> 0:19:05.840 by eighty percent, shopping for gifts starting around Easter. Welcome 0:19:05.840 --> 0:19:09.360 everybody to the twenty twenty four holidays, where inflationary shoppers 0:19:09.359 --> 0:19:11.760 are going to extreme lengths to get a deal. Tim, 0:19:11.760 --> 0:19:14.280 I've already bought some things and it's like Cubon's. 0:19:13.920 --> 0:19:16.159 Or discuss I already learned earlier today. Nothing for me, 0:19:16.280 --> 0:19:17.520 but that's fine, there's still time. 0:19:18.240 --> 0:19:19.560 I just said'm a last minute shot. 0:19:19.720 --> 0:19:22.479 Holiday shopping already underway ahead of Black Friday with more 0:19:22.640 --> 0:19:24.959 Why shoppers are asking themselves do we really need this? 0:19:25.440 --> 0:19:26.360 With us here in the. 0:19:26.320 --> 0:19:30.000 Studios Bloomberg News Consumer team leader Emily Cone, So, Emily, 0:19:30.400 --> 0:19:32.560 do consumers really need this stuff? And why is this 0:19:32.640 --> 0:19:33.960 question being asked right now? 0:19:34.600 --> 0:19:34.760 So? 0:19:34.840 --> 0:19:36.920 The big theme of this year on the retail beat 0:19:37.000 --> 0:19:41.439 has been lower discretionary spending. Consumers are largely making the 0:19:41.480 --> 0:19:45.040