WEBVTT - Convenience Stores See the US Economic Slowdown 0:00:02.920 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.520 --> 0:00:12.920 This is Bloomberg business Week inside from the reporters and 0:00:13.080 --> 0:00:16.640 editors who bring you America's most trusted business magazine, plus 0:00:16.720 --> 0:00:20.840 global business, finance and tech news. The Bloomberg Business Week 0:00:20.880 --> 0:00:25.800 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:27.200 --> 0:00:29.880 There's another interesting data point when it comes to US 0:00:29.920 --> 0:00:32.680 economic activity. We love this with more and a look 0:00:32.680 --> 0:00:35.520 at the broader macro backdrop, we head to Washington, DC. 0:00:35.640 --> 0:00:38.280 That's where we find Bloomberg News Global Economy reporter and 0:00:38.360 --> 0:00:40.479 a current and a good to have you here. We 0:00:40.520 --> 0:00:42.720 do want to get to that interesting data point. Tim, 0:00:42.720 --> 0:00:44.760 and I've been talking about this a lot. First up though, 0:00:44.800 --> 0:00:47.240 the economic data today, the clues that we've got throughout 0:00:47.240 --> 0:00:49.519 this week, the retail sales data, which is what we're 0:00:49.520 --> 0:00:50.920 going to get into with you a little bit more, 0:00:51.360 --> 0:00:53.360 anything that we need to know about the bigger, broader 0:00:53.440 --> 0:00:55.480 kind of data set that we got this week. 0:00:56.480 --> 0:00:58.800 Well, I think on the housing data that you mentioned there, 0:00:59.120 --> 0:01:01.600 it just reinforces the idea that the housing market continues 0:01:01.640 --> 0:01:04.000 to be broken. It's kind of stuck in this state 0:01:04.200 --> 0:01:08.200 of high interest rates, surging strong demand for houses but 0:01:08.319 --> 0:01:10.759 high interest rates and a low stock turnover, so it's 0:01:10.800 --> 0:01:13.360 kind of stuck in a root there, Carol. But more broadly, 0:01:13.400 --> 0:01:16.000 I think the mix of data this week it sends 0:01:16.120 --> 0:01:19.080 mixed signals, but the broad takeaways that the economy is 0:01:19.080 --> 0:01:22.680 continuing to slow at a reasonable pace, not a crash 0:01:22.760 --> 0:01:24.679 landing or hard landing or anything like that. But I 0:01:24.680 --> 0:01:26.399 think every week we seem to get a new with 0:01:26.440 --> 0:01:28.840 data points suggesting things are coming off the ball a 0:01:28.920 --> 0:01:31.679 little bit the way policemakers want it. But the big 0:01:31.760 --> 0:01:33.360 question going to the second half of the year is 0:01:33.959 --> 0:01:35.840 how much slower will things get? 0:01:36.160 --> 0:01:39.199 Okay, well, speaking of things getting slower, it's the Business 0:01:39.200 --> 0:01:43.160 Week newsletter that came out just yesterday, and we can't 0:01:43.160 --> 0:01:45.760 stop talking about it, enda because we talk a lot 0:01:45.760 --> 0:01:48.480 about different data points in the economic data that I 0:01:48.520 --> 0:01:50.240 think it's fair to say kind of rules our lives 0:01:50.280 --> 0:01:52.400 here at Bloomberg in a good way. But there's also 0:01:52.480 --> 0:01:56.120 the anecdotal data that's really helpful that our reporters around 0:01:56.120 --> 0:01:58.080 the world go and gather talk a little bit about 0:01:58.200 --> 0:02:02.360 what convenience what one convenience store CEO is telling us 0:02:02.600 --> 0:02:04.080 about the state of the US economy. 0:02:04.840 --> 0:02:06.480 Yeah, to your point, This was a bit of a 0:02:06.520 --> 0:02:09.480 step away from the raw numbers I interviewed. I spoke 0:02:09.560 --> 0:02:14.000 with the CEO of one of America's biggest convenience store operators, ARCO. 0:02:14.160 --> 0:02:17.240 Core Ary Cutler is the CEO there, so I had 0:02:17.240 --> 0:02:20.240 to chat with him, you know, for context. He runs 0:02:20.280 --> 0:02:24.000 what he calls stores in real American These are small towns, 0:02:24.240 --> 0:02:27.320 main street, sometimes in border areas, so he's on the 0:02:27.320 --> 0:02:30.040 front line of the trends. And what he's seeing among 0:02:30.080 --> 0:02:33.959 his shoppers, his consumers, is that they're spending less. In particular, 0:02:34.040 --> 0:02:38.840 they're spending less on cigarettes and spending less on gasoline. 0:02:38.880 --> 0:02:42.240 Now that reflects he reckons, it reflects the high interest rates, 0:02:42.520 --> 0:02:46.400 the mix of inflation, and of course fluctuating gasoline prices. 0:02:47.000 --> 0:02:49.560 But it's you know, again, he's not saying this is 0:02:49.560 --> 0:02:51.440 a crash landing ground, but he's saying it's different to 0:02:51.440 --> 0:02:53.440 what it was last year. Consumers are coming to his 0:02:53.480 --> 0:02:56.079 stores are being a bit pickier, a bit schoosier. They 0:02:56.120 --> 0:02:59.600 want bargains, they want value. He's seeing promotions for his 0:02:59.639 --> 0:03:02.800 hot and its pizzas enticing customers to go to that 0:03:02.840 --> 0:03:06.960 direction because they're watching their sense and their dollars. So 0:03:07.320 --> 0:03:08.720 you know, it's a tail from the ground. And when 0:03:08.720 --> 0:03:11.000 you speak to people like that, it kind of adds 0:03:11.080 --> 0:03:13.360 the idea that what the official data is telling us 0:03:13.360 --> 0:03:16.040 that things are cooling from that big boom last year. 0:03:16.280 --> 0:03:17.680 And this is what I was trying to say earlier 0:03:17.680 --> 0:03:20.320 on that things are cooling, okay, But the big question 0:03:20.480 --> 0:03:22.480 is just where will it go from here? Will this 0:03:22.919 --> 0:03:25.320 glide path continue the second half a year, or will 0:03:25.320 --> 0:03:27.880 it be something bumpier. But people who seem to be 0:03:27.960 --> 0:03:29.800 people seem to be getting more careful with their money, 0:03:29.800 --> 0:03:30.239 that's for sure. 0:03:30.320 --> 0:03:31.880 Yeah, And it feels like it mirrors so many of 0:03:31.880 --> 0:03:33.960 the conversations that we have around the newsroom or with 0:03:34.040 --> 0:03:36.640 colleagues or with friends and family about just you know, 0:03:36.680 --> 0:03:39.040 making choices about where they're purchasing or just still kind 0:03:39.040 --> 0:03:42.240 of cringing at some of the costs of different items. 0:03:42.240 --> 0:03:44.720 Having said that, it does feel like this momentum around 0:03:45.080 --> 0:03:48.480 sluggish slow down. You know, it's not like everything's falling 0:03:48.480 --> 0:03:50.080 off a cliff. And I don't hear a lot of 0:03:50.080 --> 0:03:52.960 people talking recession here in the US, No. 0:03:52.920 --> 0:03:55.000 And that's because the job's market is so strong. And 0:03:55.040 --> 0:03:57.200 as long as long as the job's market is strong, 0:03:57.800 --> 0:04:00.240 people have money, they will pay back their mortgage and 0:04:00.280 --> 0:04:02.920 it will go and spend. Of course, it might be 0:04:02.960 --> 0:04:04.960 a bit more careful how to spend. But it's when 0:04:05.000 --> 0:04:08.839 you have unemployment and free fall when things change dramatically. 0:04:09.400 --> 0:04:11.960 But again, the labor market we see some cooling. Even 0:04:12.000 --> 0:04:13.680 the CEO I spoke to, he made the point that, 0:04:13.760 --> 0:04:15.680 you know, a year ago he was really struggling with 0:04:16.000 --> 0:04:19.640 either filling positions and turnover. He still is struggling to 0:04:19.640 --> 0:04:21.800 fill positions, but he has noticed things are better than 0:04:21.800 --> 0:04:24.000 a year ago. Staff aren't walking out the door the 0:04:24.080 --> 0:04:26.040 way they were. They're hanging around, and he thinks that's 0:04:26.080 --> 0:04:28.640 a sign. That's a sign they have fewer options. 0:04:28.800 --> 0:04:31.520 Yeah, that's a really interesting data point as well. I 0:04:31.560 --> 0:04:33.320 want to get back to this one comment that I 0:04:33.360 --> 0:04:35.520 had to read a few times and in your piece, 0:04:35.720 --> 0:04:39.000 it's that people are moving to more valuable items and 0:04:39.320 --> 0:04:41.000 just not spending the money they did in the past. 0:04:41.320 --> 0:04:43.240 What did he mean by more valuable items? 0:04:44.440 --> 0:04:46.880 What he's talking with there is looking for value. He reckons. 0:04:47.960 --> 0:04:50.440 He's never seen his money promotions, he said, by the way, 0:04:50.560 --> 0:04:52.960 in his time, he's he's been in his business twenty 0:04:53.040 --> 0:04:56.400 years and you know, obviously he's running his own promotions, 0:04:56.400 --> 0:04:59.200 but the people that he buys products and goods off, 0:04:59.240 --> 0:05:02.120 they all want to promotion promotion as well, because everyone's 0:05:02.120 --> 0:05:05.640 looking for a bargain. Remember the backstory, Household debt is 0:05:05.640 --> 0:05:09.880 at a record level, delinquencies and credit cards are picking up, 0:05:10.000 --> 0:05:12.720 so people are feeling some strain out there, and that's 0:05:12.760 --> 0:05:14.560 why he thinks it's all fulling into When you walk 0:05:14.560 --> 0:05:16.280 into a store, you're just not splashing the way you 0:05:16.320 --> 0:05:18.640 wore last year. You're being a bit more careful about it. 0:05:18.640 --> 0:05:21.640 It's interesting to read your piece and also think about 0:05:21.640 --> 0:05:26.240 what we've seen from companies like Celsius Holdings in Monster Beverage. 0:05:26.240 --> 0:05:28.800 In recent weeks, there have been some channel checks by 0:05:28.880 --> 0:05:31.040 the folks over at Nielsen that said there's been some 0:05:31.080 --> 0:05:33.559 softness in that category. And if I think of something 0:05:33.560 --> 0:05:36.440 that's sold in convenience stores that is kind of pricey, 0:05:36.760 --> 0:05:39.720 it's energy drinks that you know have been so hot 0:05:39.760 --> 0:05:41.880 in recent years, and if people are pulling back on 0:05:41.920 --> 0:05:43.200 that end, that could be a signal. 0:05:44.120 --> 0:05:46.800 Yeah, for sure. The products. By the way, one of 0:05:46.839 --> 0:05:50.279 the other products that are identified was cigarettes, and that's 0:05:50.279 --> 0:05:53.600 one of his biggest sources of revenue and sales in 0:05:53.640 --> 0:05:57.799 the convenience stores, but people are buying cheaper tobacco products 0:05:57.880 --> 0:06:01.799 rather than buying cigarettes. It's a clear trend that he's noticed, 0:06:01.800 --> 0:06:03.720 and he says, when you see that, that's when he 0:06:03.760 --> 0:06:07.240 knows things have changed, and that's why he's making the 0:06:07.279 --> 0:06:07.920 commons that he is. 0:06:08.200 --> 0:06:11.400 I have to say, I'm not a smoker, but I 0:06:11.400 --> 0:06:14.080 didn't realize a carton is between like thirty to sixty 0:06:14.080 --> 0:06:15.120 bucks in the United States. 0:06:15.279 --> 0:06:17.279 But it ends like where you live because the taxes 0:06:17.279 --> 0:06:18.760 are such a big part of it. Like New York City, 0:06:18.800 --> 0:06:19.839 they're extremely expensive. 0:06:19.839 --> 0:06:20.800 They're crazy crazy. 0:06:20.920 --> 0:06:22.680 I feel like this also though, and it kind of 0:06:22.680 --> 0:06:24.679 fits with what we've been talking about McDonald's, like bringing 0:06:24.720 --> 0:06:26.479 back the value meal. We're seeing kind of a little 0:06:26.480 --> 0:06:28.919 bit of a kind of price war, if you will, 0:06:29.360 --> 0:06:32.200 among some of the fast food restaurants real quickly though. 0:06:32.240 --> 0:06:33.480 Twenty twenty five seconds. 0:06:33.600 --> 0:06:35.960 The US economy versus the rest of the world still 0:06:35.960 --> 0:06:37.320 doing fairly well. 0:06:38.000 --> 0:06:41.000 Still doing very well. Wages going up, people have jobs. 0:06:41.000 --> 0:06:42.880 The recovery has been so much stronger here than the 0:06:42.880 --> 0:06:45.080 rest of the world. No hard lending. But as I say, 0:06:45.200 --> 0:06:47.080 let's see how it all plays out in the second half. 0:06:47.080 --> 0:06:47.479 Of the year. 0:06:47.760 --> 0:06:50.880 All Right, I love metrics like this great love it, 0:06:50.880 --> 0:06:52.600 love it, love it, and thank you so much. Have 0:06:52.640 --> 0:06:55.080 a great weekend and a current. He's our global economy 0:06:55.120 --> 0:06:57.400 reporter at Bloomberg News, joining us there from our Washington, 0:06:57.480 --> 0:06:59.240 DC bureau. I do feel like it's it's like when 0:06:59.240 --> 0:07:01.560 we get the Beige Book, right, anecdotes and so and 0:07:01.760 --> 0:07:03.360 so forth. I think these are things that tell you 0:07:03.400 --> 0:07:05.520 so much about what's going on in the economy. 0:07:05.600 --> 0:07:08.800 Yeah, really really cool stuff. Also, it's the company has 0:07:08.839 --> 0:07:12.440 brands like one Stop, Admiral, Breadbox, corner Mark, Dixie Mart, 0:07:12.520 --> 0:07:15.960 easy Mark, Flash Market, Handymark, Jets, Jiffy Stopping more. Yeah, 0:07:16.040 --> 0:07:16.880 so they got their. 0:07:16.800 --> 0:07:18.360 Hand on everything and they see a lot, right, and 0:07:18.400 --> 0:07:20.440 this this dude has been doing this for like twenty years. 0:07:20.440 --> 0:07:22.320 If he sees a lot, you might not call himself 0:07:22.320 --> 0:07:24.040 with the do I call him a dude? 0:07:24.840 --> 0:07:28.360 You're listening to the Bloomberg Business Week podcast. Catch us 0:07:28.400 --> 0:07:31.640 live weekday afternoons from two to five pm. Easter Listen 0:07:31.680 --> 0:07:33.840 on Apple card Play and then Bright Auto with a 0:07:33.880 --> 0:07:38.000 Bloomberg Business at or watch us live on YouTube. 0:07:39.480 --> 0:07:41.680 It is tripled by switching Friday. We love to say 0:07:41.720 --> 0:07:42.120 it a lot. 0:07:42.280 --> 0:07:43.640 It feels a little spooky, isn't it. 0:07:44.080 --> 0:07:46.440 I don't know, is it really you know what it's 0:07:46.440 --> 0:07:50.440 all about. Let me have derivatives, contracts tied to equities 0:07:50.480 --> 0:07:50.840 and deex. 0:07:50.800 --> 0:07:54.600 Options and futures, all mature. Easy for you to say, yeah, okay. 0:07:54.680 --> 0:07:56.400 So it's a reminder to you that we are almost 0:07:56.600 --> 0:07:59.160 halfway through the treating year, which is kind of a 0:07:59.240 --> 0:08:02.520 phenomenal a year when we constantly debate over when the 0:08:02.560 --> 0:08:05.600 FED may cut rates on as the FED reminds us constantly, 0:08:05.600 --> 0:08:06.480 we are data dependent. 0:08:06.560 --> 0:08:07.280 We talk about it. 0:08:07.440 --> 0:08:09.800 Nancy Tangler says, don't focus on that here with what 0:08:09.800 --> 0:08:12.800 we believe, or what she believes we should be keeping 0:08:12.840 --> 0:08:15.239 our eye on. Is the chief investment officer at Laffer 0:08:15.280 --> 0:08:18.760 Tangler Investments, Nancy Tangler back in our studio. 0:08:18.880 --> 0:08:20.280 It is nice to have you back with us. How 0:08:20.320 --> 0:08:20.640 are you. 0:08:20.800 --> 0:08:22.680 I'm well, thank you, thanks for having me. 0:08:22.640 --> 0:08:23.720 Well, thanks for being here. 0:08:23.760 --> 0:08:26.360 Because we do talk about we kind of as a joke, 0:08:26.400 --> 0:08:27.960 we'll be like, but we're data dependent. 0:08:28.240 --> 0:08:30.400 You said, maybe don't be so focused on that. 0:08:30.800 --> 0:08:34.240 Yeah. I think for me, Carol was when Christine Legard 0:08:34.240 --> 0:08:37.400 at the ECB came out and said we're raising our 0:08:37.440 --> 0:08:40.920 inflation estimate. We didn't hit our wage criteria, which was 0:08:40.960 --> 0:08:44.120 wages rolling over. They actually went up in the EU, 0:08:44.440 --> 0:08:47.280 and we're cutting interest rates. And then you follow that 0:08:47.360 --> 0:08:50.120 on the heels with Chairman Powell, and maybe I was 0:08:50.200 --> 0:08:53.199 over listening, but you know, he said a few things. 0:08:53.240 --> 0:08:55.560 I mean, previous meeting. He was like, well, we'll react 0:08:55.559 --> 0:08:57.880 to weak labor, and I do think the labor market 0:08:58.000 --> 0:09:00.480 is softening. And then on top of that, he said, well, 0:09:00.520 --> 0:09:02.040 you know, if you're at two point six or two 0:09:02.080 --> 0:09:04.360 point seven percent, that's a pretty good place to be. 0:09:04.520 --> 0:09:07.320 That's a direct quote. And so I'm wondering if the 0:09:07.360 --> 0:09:11.400 FED is kind of preparing at least themselves, if not 0:09:11.480 --> 0:09:14.959 the market, and they raise their inflation estimates for the year, 0:09:15.000 --> 0:09:16.640 and we're going to get a cut, and we're going 0:09:16.679 --> 0:09:17.120 to get a cut. 0:09:17.160 --> 0:09:18.040 We were all talking about that. 0:09:18.080 --> 0:09:20.680 Mike mckaie was talking about it, like what changes FED 0:09:20.679 --> 0:09:23.280 share j Powell at the end of the year. You know, 0:09:23.360 --> 0:09:25.600 if you think it's going to be okay, time to cut. 0:09:25.720 --> 0:09:30.520 And yet we're pretty much in the same economic scenario right, Yes, absolutely, And. 0:09:30.880 --> 0:09:33.520 I think one of the reasons that they are eager 0:09:33.559 --> 0:09:36.400 to cut. Do you have the treasury funding this massive 0:09:36.440 --> 0:09:39.560 amount of debt. Now it's over fifty percent at the 0:09:39.559 --> 0:09:42.479 short end of the curve, and so the weighted average 0:09:43.520 --> 0:09:45.680 cost of the debt has gone from one point eight 0:09:45.679 --> 0:09:49.280 percent last January, not this one the previous year, to 0:09:49.360 --> 0:09:52.400 over three like three point three percent, And the net 0:09:52.440 --> 0:09:54.199 payments this year are going to be eight hundred and 0:09:54.280 --> 0:09:57.439 seventy billion according to CBO, which is always wrong, So 0:09:57.520 --> 0:10:00.760 count that as one trillion in just in trist payments. 0:10:01.040 --> 0:10:02.240 Something's got to change. 0:10:02.520 --> 0:10:04.839 You don't actually hear politicians talking about that right now. 0:10:04.880 --> 0:10:08.440 Interestingly enough, it's like a sort of a lonely chorus 0:10:08.440 --> 0:10:11.400 of folks who are talking about the risk that exists there. 0:10:11.400 --> 0:10:12.720 How big of a risk do you think that is? 0:10:13.080 --> 0:10:16.280 I think it's significant because if you're you know, the 0:10:16.320 --> 0:10:19.360 CBO quotes debt as net debt, so they say we're 0:10:19.400 --> 0:10:22.520 at eighty percent of GDP, but they don't count the 0:10:22.559 --> 0:10:24.600 debt on the Fed's balance sheet, so we're really at 0:10:24.600 --> 0:10:28.080 one hundred and thirty And that's third world country issue. 0:10:28.120 --> 0:10:31.240 In the growing economy with a really tight labor market, 0:10:31.440 --> 0:10:36.120 we should be reducing the deficit, not exploding it. And 0:10:36.160 --> 0:10:40.120 so stocks don't care yet so we're still pretty bullet bullish. 0:10:40.200 --> 0:10:43.240 Yeah, when will they care? I don't know what will 0:10:43.240 --> 0:10:43.719 make them pay? 0:10:43.760 --> 0:10:46.000 What's the hissy fit that happens in stocks as a result. 0:10:46.160 --> 0:10:48.360 Well, you keep hearing the will it be a Liz 0:10:48.360 --> 0:10:51.920 Trust moment. I do think that's a risk that the 0:10:51.960 --> 0:10:55.319 markets do. The bond vigilantes just come in and say enough, 0:10:55.679 --> 0:10:58.600 and then there's all even more volatility. I mean, I've 0:10:58.600 --> 0:11:00.160 been doing this for forty years. I've never seen see 0:11:00.200 --> 0:11:01.720 so much volatility in the bond market. 0:11:01.960 --> 0:11:03.120 I will say, it's really interesting. 0:11:03.200 --> 0:11:06.400 I do feel like investment professionals like yourself are talking. 0:11:06.160 --> 0:11:06.880 A lot about it. 0:11:06.920 --> 0:11:09.600 And at some point, you know, the government has just 0:11:09.640 --> 0:11:11.559 so much money to play with, and so where do 0:11:11.640 --> 0:11:13.960 they cut back? And then how does that impact the economy. 0:11:13.960 --> 0:11:16.559 I feel like that's when maybe citizens start to sit 0:11:16.640 --> 0:11:17.319 up and take notice. 0:11:17.360 --> 0:11:20.319 Perhaps I think they're starting to, because what I think 0:11:20.320 --> 0:11:22.840 the average person knows is that all of this fiscal 0:11:22.880 --> 0:11:27.040 spending has driven inflation. And you know, there's only as 0:11:27.080 --> 0:11:28.960 critical as I've been of the Fed, there's only so 0:11:29.040 --> 0:11:31.120 much they can do. I mean, they've got one hand 0:11:31.200 --> 0:11:34.200 tied behind their back because the spending just continues and 0:11:34.360 --> 0:11:38.040 you know, we still have a lot of appropriated but 0:11:38.240 --> 0:11:41.200 unspent funds, you know, in the trillions of dollars that 0:11:41.640 --> 0:11:43.480 the administration is going to try to get as much 0:11:43.480 --> 0:11:45.560 of that spent this year as they can. I don't 0:11:45.600 --> 0:11:46.440 know how much that will be. 0:11:47.000 --> 0:11:48.520 You've been critical of the FED, but one thing that 0:11:48.520 --> 0:11:51.319 we've heard from fedher J. Powell several times in recent 0:11:51.360 --> 0:11:54.320 months has been talking about the Fed's independence and his 0:11:54.360 --> 0:11:56.360 own independence. And there have been some questions about what 0:11:56.400 --> 0:12:00.960 happens if President Trump wins in November to the independence 0:12:00.960 --> 0:12:03.320 of the FED. How are you thinking about that? So? 0:12:03.440 --> 0:12:05.800 I know, I think he doth protests too much. I 0:12:05.840 --> 0:12:09.160 think he waited a long time to raise rates, and 0:12:09.240 --> 0:12:10.079 I was at a dinner with. 0:12:10.080 --> 0:12:12.480 I think JAYE. Powell protests too much or try. 0:12:12.720 --> 0:12:15.480 About his independence, because I don't think he acted very independent. 0:12:15.520 --> 0:12:17.600 I think it was a pretty political move to hold 0:12:17.600 --> 0:12:19.880 off on raising rates as long as he did, and 0:12:19.920 --> 0:12:22.000 that really allowed inflation to get out of control. Was 0:12:22.040 --> 0:12:25.440 at dinner with a prominent senator and he basically said 0:12:25.480 --> 0:12:28.040 we all know that he was waiting, and I've never 0:12:28.080 --> 0:12:31.640 heard anybody say that out loud. So I think they 0:12:31.679 --> 0:12:34.800 should be independent. I don't think there's anything Trump can 0:12:34.880 --> 0:12:37.640 do if he is elected except go on X and 0:12:37.679 --> 0:12:38.320 beerate him. 0:12:38.520 --> 0:12:41.360 Right, Well, I do want to point out that maybe 0:12:41.400 --> 0:12:43.040 perhaps if J. Powell were sitting here right now, he 0:12:43.040 --> 0:12:45.400 would push back and say, oh, well, you know, at 0:12:45.400 --> 0:12:47.719 that point, we thought that inflation was indeed transitory, it 0:12:47.760 --> 0:12:49.600 was supply train given. We didn't think it would becomes 0:12:49.760 --> 0:12:54.040 entrenched as it did in American in the American economy 0:12:54.040 --> 0:12:54.600 at that point. 0:12:55.480 --> 0:12:58.240 But yes, he would say that, and I would say, 0:12:58.559 --> 0:13:00.640 you were still way too late. You know, the rest 0:13:00.640 --> 0:13:03.520 of the world saw it, and they waited way too long. 0:13:03.679 --> 0:13:07.000 And you know, we didn't see a hike until March, 0:13:07.080 --> 0:13:12.080 when inflation had been really bubbling up pretty dramatically since 0:13:12.200 --> 0:13:15.240 previous year, and we were writing about the fiscal spending. 0:13:15.280 --> 0:13:19.599 Back then, it was very lonely. But back in twenty 0:13:19.679 --> 0:13:20.160 twenty one. 0:13:20.440 --> 0:13:20.720 Yeah. 0:13:20.840 --> 0:13:22.679 The other thing, like, I think it's also fair, right, 0:13:22.720 --> 0:13:26.040 there's been so much liquidity thrown into global markets right 0:13:26.440 --> 0:13:28.320 because of the pandemic, and we're still kind of figuring 0:13:28.360 --> 0:13:31.840 out how it all plays out right and keeping up 0:13:31.880 --> 0:13:33.280 with it, right, And that's what we're talking about. 0:13:33.280 --> 0:13:35.640 There's still a lot more liquidity out there yeah. 0:13:35.679 --> 0:13:37.640 And it's interesting because if you just think about all 0:13:37.640 --> 0:13:39.960 the old rules, like what did everyone think when rates 0:13:40.000 --> 0:13:42.600 went up? They thought it would hurt technology stocks. They've 0:13:42.640 --> 0:13:45.880 been the biggest beneficiary because they had fortress balance sheets. 0:13:45.880 --> 0:13:49.480 They'd already refinance their debt and they've their interest income. No, 0:13:49.679 --> 0:13:52.640 it's exploded, and so they're making money on all that 0:13:52.720 --> 0:13:55.080 money that's right on their balance a lot of money. 0:13:55.160 --> 0:13:55.280 Care. 0:13:55.360 --> 0:13:56.800 Yeah, exactly, all right. 0:13:56.840 --> 0:13:59.400 Having said that, the thing you say we should though, 0:13:59.480 --> 0:14:01.559 is listen to companies have to say, we get I 0:14:01.600 --> 0:14:03.920 get excited about earnings because I do feel like I 0:14:04.000 --> 0:14:04.840 feel like it's a gut check. 0:14:04.880 --> 0:14:06.480 We get, we love it. 0:14:06.559 --> 0:14:08.200 We peel back a little bit of the layer, right. 0:14:08.280 --> 0:14:10.280 We hear from companies about how things really are and 0:14:10.320 --> 0:14:13.440 whether the narrative, the valuations, whether or not they make sense. 0:14:13.480 --> 0:14:14.360 So that's important. 0:14:14.480 --> 0:14:16.240 Yes, we've got a great chart, I think if we 0:14:16.280 --> 0:14:18.280 can bring it up, but it just talks about, you know, 0:14:18.360 --> 0:14:22.160 what we've seen in terms of earnings expectations blended forward EPs, 0:14:22.480 --> 0:14:25.000 which is the blue line and the orange line is 0:14:25.000 --> 0:14:26.480 the S and P five hundred. You can see how 0:14:26.480 --> 0:14:29.440 they've been tracking really well together. But the outlook for 0:14:29.440 --> 0:14:32.040 earnings continues to rise. That's important that what we see 0:14:32.160 --> 0:14:33.240 and what we hear from companies. 0:14:33.320 --> 0:14:36.600 Yeah, it's it's it's everything. I mean, that is ultimately 0:14:36.640 --> 0:14:38.800 what stocks trade off of. That's why I you know, 0:14:38.840 --> 0:14:41.880 I think you ignore at this point what the FED 0:14:41.960 --> 0:14:46.320 is saying, what data they're depending on this next meeting, 0:14:46.680 --> 0:14:51.360 because the trend line in corporate earnings is positive and 0:14:51.680 --> 0:14:54.520 margins are expanding. Now not every company. We saw it 0:14:54.600 --> 0:14:57.720 last quarter. If you missed on any metric, you got clobbered. 0:14:58.080 --> 0:15:00.520 But if you just look generally speaking, like our twelve 0:15:00.520 --> 0:15:04.640 Best Ideas portfolio, we had a number of what Bespoke 0:15:04.720 --> 0:15:09.280 calls triple plays, beat, beat, and raise, and that that's sustainable. 0:15:09.600 --> 0:15:13.000 It's it's frequently in you know, the area that we've 0:15:13.000 --> 0:15:16.280 been talking about at nauseum, which is gendered a cloud computing, 0:15:16.640 --> 0:15:19.840 but but also in our investing theme of old economy 0:15:19.880 --> 0:15:24.640 companies that are embracing those technologies. Think Walmart, I think Chipotle, 0:15:24.880 --> 0:15:27.160 which is one of our twelve Best Ideas. Those are 0:15:27.160 --> 0:15:32.160 companies that are benefited from utilizing digitization and all of 0:15:32.200 --> 0:15:32.960 these technologies. 0:15:32.960 --> 0:15:38.640 Auto Kado anyone ado. It's a machine that takes care 0:15:38.680 --> 0:15:41.080 of the avocados for guacamali a Chipotle. 0:15:40.680 --> 0:15:41.640 Because they're all fresh and. 0:15:41.720 --> 0:15:45.560 Such time and takes so much time to make guacamal avocado. 0:15:45.840 --> 0:15:48.120 Yeah, Brian Nicchol tells us about it all the time, and. 0:15:48.040 --> 0:15:51.160 The pretty polt lanes and yeah, they've got their own language. 0:15:51.280 --> 0:15:54.080 They absolutely do. Nancy, thanks so much, Have a good trip, Hoeman, 0:15:54.640 --> 0:15:55.240 a good weekend. 0:15:55.320 --> 0:16:00.640 Thanks Nancy Tangler, chief investment Officer at Laffar Tanglar Investments. 0:16:01.480 --> 0:16:05.320 You're listening to the Bloomberg Business Week podcast. Listen live 0:16:05.440 --> 0:16:08.240 each weekday starting at two pm Eastern on Apple car 0:16:08.360 --> 0:16:11.320 Play and Android Auto with the Bloomberg Business App. You 0:16:11.360 --> 0:16:14.640 can also listen live on Amazon Alexa from our flagship 0:16:14.680 --> 0:16:18.760 New York station, Just say Alexa Play Bloomberg eleven thirty. 0:16:20.800 --> 0:16:22.520 A mob. 0:16:24.400 --> 0:16:26.800 What a louis saying? 0:16:26.840 --> 0:16:28.040 How much love? 0:16:28.240 --> 0:16:30.240 Here's some somebody's had a lot of babies? 0:16:30.320 --> 0:16:30.840 Yeah we do. 0:16:31.120 --> 0:16:33.960 Here's the numbers you need to know about Elon musk six. 0:16:34.160 --> 0:16:37.800 It's the number of companies that Elon runs, two hundred 0:16:37.840 --> 0:16:40.600 and six. Then I remember of billions of dollars Elon 0:16:40.680 --> 0:16:43.040 is worth, according to the latest calculation by the Bloomberg 0:16:43.120 --> 0:16:47.880 Billionaires Index and twelve. It's the number of kids Elon has, 0:16:48.000 --> 0:16:49.760 at least that we know of. 0:16:50.760 --> 0:16:54.520 No question, Elon is doing what he can to contribute 0:16:54.560 --> 0:16:57.160 to the world's population, which makes sense if you've paid 0:16:57.160 --> 0:17:00.800 attention to what he's said in recent years. In Musk's mind, 0:17:00.840 --> 0:17:04.360 global fertility rates are not just a crisis but the crisis. 0:17:04.760 --> 0:17:06.879 And someone who has paid a lot of attention to 0:17:07.080 --> 0:17:10.440 what Elon says about this is our own Dana Hall. 0:17:10.640 --> 0:17:13.240 Yeah, she, along with Sophie Alexander, right about how Elon 0:17:13.320 --> 0:17:15.640 wants you to have more babies. That's in the forthcoming 0:17:15.720 --> 0:17:18.399 issue of Bloomberg BusinessWeek. Read the story now though on 0:17:18.440 --> 0:17:21.800 the Bloomberg terminal at Bloomberg dot com slash BusinessWeek. Dana 0:17:21.880 --> 0:17:24.679 Hall is Bloomberg News senior technology reporter. She joins us 0:17:24.680 --> 0:17:27.600 from our San Francisco bureau. Danny, you and Sophy make 0:17:27.640 --> 0:17:29.879 the point in your piece that despite Elon's alarmism, the 0:17:29.960 --> 0:17:34.760 world's population is not declining yet. Musk is correct that 0:17:34.840 --> 0:17:37.719 the overall rate of growth is slowing. Why is Elon 0:17:37.880 --> 0:17:40.000 so concerned about us not having enough babies? 0:17:41.520 --> 0:17:44.520 Well, to be clear, Elon did not comment for this story, so, 0:17:45.480 --> 0:17:47.159 but I think that I mean He's been sort of 0:17:47.240 --> 0:17:49.680 ringing the alarm bell about this for quite some time. 0:17:49.720 --> 0:17:51.199 If you look at his tweets, at all of his 0:17:51.280 --> 0:17:54.600 public appearances at the Milkene conference last month, you know, 0:17:54.680 --> 0:17:57.439 he really sees this as a big crisis. And I 0:17:57.440 --> 0:17:59.159 think it has a lot to do with the changing 0:17:59.200 --> 0:18:03.159