WEBVTT - US Hiring Comes up Short in Possible Warning Sign for Fed 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.240 --> 0:00:12.119 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:12.200 --> 0:00:14.960 weekdays at ten am Eastern on Apple card Playing and 0:00:15.040 --> 0:00:17.919 Broid Auto with the Bloomberg Business App. Listen on demand 0:00:17.960 --> 0:00:22.760 wherever you get your podcasts, or watch us live on YouTube. 0:00:23.960 --> 0:00:25.080 Happy Friday, everybody. 0:00:25.239 --> 0:00:27.160 We cover all the news that you need in business, 0:00:27.240 --> 0:00:30.080 economics and finance. There are lens of our Bloomberg Intelligence folks. 0:00:30.080 --> 0:00:32.320 They cover two thousand companies and one hundred and thirty 0:00:32.320 --> 0:00:35.279 industries all around the world. And we also tap our 0:00:35.479 --> 0:00:38.600 expertise outside of Bloomberg Intelligence as well. And for that 0:00:38.640 --> 0:00:41.440 we go to Lindsay Piezga, she is chief economist over 0:00:41.560 --> 0:00:43.920 at Stefold, to talk about the job support. Okay, so 0:00:43.920 --> 0:00:46.240 we get the jobs number. Then a couple hours later 0:00:46.280 --> 0:00:49.240 we get Chris Waller coming out and talking about the 0:00:49.280 --> 0:00:52.880 current batch of data requires action and if appropriate, he 0:00:52.920 --> 0:00:55.520 will advocate for front loading cuts. 0:00:56.080 --> 0:00:58.120 What does if appropriate. 0:00:57.680 --> 0:01:01.040 Mean to frontload cuts for fifty bases point cut in September. 0:01:02.200 --> 0:01:04.040 Well, I think that means that if we see a 0:01:04.080 --> 0:01:07.600 material weakening in the employment data, if we see a 0:01:07.640 --> 0:01:10.880 material weakening in the inflation data, the Fed is poised 0:01:10.920 --> 0:01:14.400 to take a more aggressive stance. That being said, the 0:01:14.520 --> 0:01:17.760 lack of meaningful downward momentum that we've seen in price 0:01:17.800 --> 0:01:22.199 pressures coupled with still a somewhat benign employment report. Remember, 0:01:22.200 --> 0:01:25.959 we saw that downtick in the unemployment rate, stronger wage games, 0:01:26.240 --> 0:01:28.959 So it doesn't seem that at this point, to Waller's 0:01:29.280 --> 0:01:33.840 to use Waller's characterization, it is appropriate to result in 0:01:33.840 --> 0:01:37.560 a more aggressive policy response. And as such, I think 0:01:37.600 --> 0:01:40.080 the Fed is going to take a more tempered approach 0:01:40.600 --> 0:01:44.560 until we see a more clear indication of weakness as 0:01:44.600 --> 0:01:47.160 opposed to just normalization in the economy. 0:01:47.520 --> 0:01:49.360 All right, somebody comes up to you to Starbucks this 0:01:49.400 --> 0:01:51.800 weekend and says, lindsay, how's that labor market? 0:01:52.240 --> 0:01:53.280 How would you respond? 0:01:54.400 --> 0:01:57.680 Well, I think right now we're still seeing solid conditions 0:01:57.680 --> 0:02:00.640 in the labor market. Now, certainly we have lost momentum 0:02:00.680 --> 0:02:04.880 from earlier peak levels. Top line hiring has slowed, but 0:02:05.160 --> 0:02:07.920 let's put the unemployment rate in perspective, it's still on 0:02:07.960 --> 0:02:13.120 a relatively low basis. Wage games are still solid, jobless 0:02:13.160 --> 0:02:17.120 flames continue to tick down, so there's still indications again 0:02:17.200 --> 0:02:20.680 that the labor market, yes is cooling, losing momentum, but 0:02:20.840 --> 0:02:24.520 more to the prospect of normalizing as opposed to indications 0:02:24.520 --> 0:02:28.280 of outright weakness suggesting that the FED needs to take 0:02:28.400 --> 0:02:33.120 expedited or more aggressive action to help supplement or stabilize 0:02:33.200 --> 0:02:34.359 like market conditions. 0:02:35.120 --> 0:02:37.040 Actually that happened to Michael McKee. It was on a 0:02:37.080 --> 0:02:39.120 train and someone like random guy was like. 0:02:39.040 --> 0:02:40.440 Hey, Mike, what are you from the FED? 0:02:41.400 --> 0:02:44.359 So lindsay, is this is the FED going to go 0:02:44.360 --> 0:02:46.280 twenty five or fifty? And I guess the better question 0:02:46.400 --> 0:02:48.760 is how much do you care about that versus us 0:02:48.760 --> 0:02:50.680 still pricing in two hundred and forty basis points of 0:02:50.720 --> 0:02:53.120 cuts in the next you know, fourteen to fifteen months. 0:02:54.120 --> 0:02:56.200 Well, I think the FED is going to take a 0:02:56.240 --> 0:02:58.320 guess low and temperate pace. I think out of the 0:02:58.360 --> 0:03:01.400 gate twenty five basis points is a appropriate and the 0:03:01.440 --> 0:03:04.840 FED has been very clear they're not on a predetermined pathway. 0:03:05.240 --> 0:03:07.640 And should we see the data come in better than 0:03:07.680 --> 0:03:12.040 expected or weaker than expected, the next policy response will 0:03:12.080 --> 0:03:15.200 reflect that data. And so that's going to really be 0:03:15.280 --> 0:03:18.519 the driver of how the FED responds over the next 0:03:18.720 --> 0:03:22.240 year or two years in terms of slowly returning US 0:03:22.320 --> 0:03:26.160 more to a normal position and policy as opposed to 0:03:26.520 --> 0:03:29.800 taking an aggressive approach and reversing us to neutral or 0:03:29.800 --> 0:03:30.359 well below. 0:03:31.160 --> 0:03:35.120 So, lindsay, put this labor data together. I guess for me, 0:03:35.240 --> 0:03:37.720 one of the next questions is how does that frame 0:03:37.760 --> 0:03:39.800 out how our US consumer is doing. 0:03:39.960 --> 0:03:40.839 What's your view there? 0:03:42.120 --> 0:03:45.880 Well, I think the US consumer is struggling at this point. 0:03:46.040 --> 0:03:49.800 The US consumer feels the weight of these higher prices, 0:03:49.920 --> 0:03:52.240 feels the weight of a slowing economy. 0:03:52.680 --> 0:03:54.200 But the consumer is still. 0:03:53.920 --> 0:03:56.720 Holding its own it's still spending out in the marketplace, 0:03:56.760 --> 0:03:59.240 and it's still the backbone of the US economy. 0:04:00.360 --> 0:04:00.920 We love that. 0:04:01.280 --> 0:04:03.920 We love crying babies in the background. That's super cool. 0:04:04.040 --> 0:04:05.800 You can definitely bring them on air. We love that 0:04:05.920 --> 0:04:09.120 for you and for us. So I guess when we 0:04:09.160 --> 0:04:14.120 talk about how the data will evolve, what are. 0:04:14.040 --> 0:04:15.080 We going to really be looking at. 0:04:15.160 --> 0:04:17.640 Is CPI really that important next week or is it 0:04:17.680 --> 0:04:19.920 just like, let's get past this twenty five or fifty 0:04:20.000 --> 0:04:22.680 or whatever and then we see how the labor market evolves. 0:04:23.600 --> 0:04:26.800 I think the CPI the PPI are key data points 0:04:26.800 --> 0:04:30.400 that are really going to determine the trajectory of the 0:04:30.440 --> 0:04:31.960 fence pathway for race. 0:04:32.480 --> 0:04:34.440 All right, lindsay, thank you so much. We appreciate it. 0:04:34.440 --> 0:04:37.279 Lindsay the Eggs, a chief economist for Stiefel. 0:04:37.880 --> 0:04:41.600 She joined us on his zoom from Chicago. She can 0:04:41.600 --> 0:04:42.120 do it all. 0:04:42.320 --> 0:04:44.880 She can talk economics and she can then go take 0:04:44.920 --> 0:04:45.680 care of the little ones. 0:04:45.839 --> 0:04:48.200 I mean, yeah, that's why you guts are the best. 0:04:48.200 --> 0:04:48.920 I don't know how to do it. 0:04:50.360 --> 0:04:54.239 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:04:54.320 --> 0:04:57.360 weekdays at ten am Eastern on Apple card Play and 0:04:57.360 --> 0:05:00.640 Android Auto with the Bloomberg Business app, and also listen 0:05:00.760 --> 0:05:03.880 live on Amazon Alexa from our flagship New York station. 0:05:04.240 --> 0:05:06.599 Just say Alexa play Bloomberg eleven. 0:05:08.920 --> 0:05:10.760 All right, let's get more in this market reaction here. 0:05:10.960 --> 0:05:14.480 Matt Miskin Co, Chief Investment Stratus, John Hancock Investment Management 0:05:15.000 --> 0:05:17.200 joins us. Now, hey, Matt, if I just take a 0:05:17.200 --> 0:05:19.400 look at what's happening within the market and the reaction. 0:05:20.040 --> 0:05:21.440 Oh god, I hate to say it. Is this a 0:05:21.480 --> 0:05:22.320 Goldilocks move? 0:05:23.839 --> 0:05:26.240 That looks a little bit like that, But the fact 0:05:26.279 --> 0:05:29.359 that the tenure treasury yield isn't backing down much actually 0:05:29.400 --> 0:05:31.280 to me suggests it's not as favorable. 0:05:31.400 --> 0:05:35.599 But a huge it had a huge run, it did. 0:05:35.400 --> 0:05:37.920 It did, and mortgage rates are coming down on that, 0:05:38.000 --> 0:05:40.160 and then you're gonna get borrowing costs coming down on that. 0:05:40.200 --> 0:05:42.839 And we had oil prices lower, and all these things 0:05:42.880 --> 0:05:45.039 eventually are going to be good for the consumer. 0:05:45.920 --> 0:05:48.720 But if economic growth is weakening, if you're not as 0:05:48.720 --> 0:05:50.720 confident about your job, you're not going to be as 0:05:50.720 --> 0:05:51.760 confident about spending. 0:05:52.200 --> 0:05:55.440 And right now there is a you know, September weakness 0:05:55.440 --> 0:05:58.200 that's always seasonal. So we're sitting here saying is this 0:05:58.279 --> 0:06:01.920 seasonals or is this some more sinister? And for us, 0:06:02.000 --> 0:06:05.040 the economic data is weakening. We like defensive parts of 0:06:05.080 --> 0:06:08.919 the market. We like intermediate to longer term bonds, and 0:06:08.960 --> 0:06:11.600 we're gonna sit here and wait for a better opportunity 0:06:11.680 --> 0:06:13.440 to look at risk assets. 0:06:14.080 --> 0:06:17.119 What's defensive in your mind? Met good one? 0:06:17.320 --> 0:06:17.599 Yes? 0:06:17.880 --> 0:06:22.400 So good old utilities. Utilities are a part of the market. 0:06:22.080 --> 0:06:26.119 That were left for not you know, no one wanted 0:06:26.160 --> 0:06:27.920 to touch them for much the last two years. They 0:06:27.920 --> 0:06:31.320 were only two percent of the market, the lowest level 0:06:31.520 --> 0:06:36.040 or sector weight in history. They've been on a tear here. 0:06:36.160 --> 0:06:39.440 And we actually like long lived assets. I mean, you know, 0:06:39.680 --> 0:06:42.360 alex as you said, I mean like this week, treasury 0:06:42.440 --> 0:06:46.719 yields are meaningfully lower and longer duration equities should be 0:06:46.839 --> 0:06:49.840 rallying on that. Utilities are, roots are even healthcare is 0:06:49.880 --> 0:06:51.320 getting a bit of a bid. But then you've got 0:06:51.520 --> 0:06:54.560 things like financials, which have done pretty well here that's 0:06:54.600 --> 0:06:56.880 an odd mix, and tech, which used to be the 0:06:56.960 --> 0:06:59.279 long duration asset. 0:06:58.960 --> 0:07:00.600 Is getting can hit. 0:07:01.160 --> 0:07:04.720 So it's not making a ton of It's not the 0:07:04.760 --> 0:07:08.240 dots are not connecting all at once here. 0:07:08.520 --> 0:07:11.480 It's it's one week. But the trend in terms of 0:07:11.480 --> 0:07:12.240 the macro. 0:07:12.120 --> 0:07:14.720 Data is what it is, and it looks like softening, 0:07:14.840 --> 0:07:17.640 and we want to grab some good defensive parts of 0:07:17.640 --> 0:07:19.280 the market while they're still here for us. 0:07:19.360 --> 0:07:20.480 Yeah, And I don't want to make light of the 0:07:20.480 --> 0:07:22.880 fact that texts down one percent and calling that goldilocks, 0:07:22.880 --> 0:07:26.600 but just the idea that that sort of play versus say, 0:07:26.720 --> 0:07:28.920 I mean, I'm looking at DOWT Transport. It's only down 0:07:29.000 --> 0:07:31.000 quote unquote three tens of one percent. So I'm just 0:07:31.040 --> 0:07:34.160 wondering if it's more of a rotation within the market 0:07:34.320 --> 0:07:37.000 versus sort of a broad based selling. Do you think 0:07:37.040 --> 0:07:39.440 that when we get a Christopher Waller talking at eleven, 0:07:39.520 --> 0:07:40.840 is that going to be an event risk for you 0:07:40.920 --> 0:07:41.280 right now? 0:07:42.840 --> 0:07:45.080 It could be. I mean, you know, right now. 0:07:45.120 --> 0:07:47.640 I think the Fed, if they push back too hard 0:07:47.680 --> 0:07:50.360 and say, look, we're not we're not going fifty basis points. 0:07:50.400 --> 0:07:51.400 We're not ready to cut. 0:07:52.320 --> 0:07:54.960 I think if they do that at this juncture, you're 0:07:55.000 --> 0:07:58.320 going to be upsetting the bond market. And there's few 0:07:58.360 --> 0:08:01.080 times in doing this it's it's you know, nowadays we've 0:08:01.120 --> 0:08:04.240 got the forward guidance, so we've got you know, pricing 0:08:04.280 --> 0:08:05.280 in of how many cuts. 0:08:05.320 --> 0:08:07.800 You know, you rewind ten fifteen years ago, people. 0:08:07.600 --> 0:08:10.440 Didn't focus on that as much, but now that it's 0:08:10.480 --> 0:08:13.600 one hundred percent probability of a cut in September, if 0:08:13.600 --> 0:08:16.480 not more, because you're saying, hey, it could be fifty 0:08:16.480 --> 0:08:19.560 basis points. If the FED says no, we're not cutting, 0:08:19.760 --> 0:08:23.560 that is going to be bad news for everything. And 0:08:23.600 --> 0:08:26.560 so I think you need to hear the FED speakers 0:08:26.600 --> 0:08:29.360 come out and say yeah, we're gonna cut, and if 0:08:29.360 --> 0:08:32.440 anything against that, I think is going to cause some volatility. 0:08:32.800 --> 0:08:34.920 Hey, Matt, on the fixed income side, how much credit 0:08:35.040 --> 0:08:37.120 risk are you guys comfortable taking these days? 0:08:38.320 --> 0:08:39.240 Not much at all. 0:08:39.240 --> 0:08:43.959 Frankly, we started the week at three hundred basis points 0:08:43.960 --> 0:08:47.760 spread between junk bonds, high yield bonds, and treasury bonds, 0:08:47.800 --> 0:08:48.079 And to. 0:08:48.040 --> 0:08:50.720 Put that in perspective, last time that's. 0:08:50.520 --> 0:08:53.640 Happened twenty twenty one before spread wide and twenty twenty two, 0:08:54.120 --> 0:08:57.520 two thousand and seven before two eight, nineteen ninety nine, 0:08:57.640 --> 0:09:01.439 before two thousand and three hundred b points is historically 0:09:01.559 --> 0:09:02.760 really tight spreads. 0:09:02.800 --> 0:09:05.560 And to us, that's just not a lot of value. 0:09:05.600 --> 0:09:07.800 We prefer if you're going to go even in investment 0:09:07.840 --> 0:09:10.720 grade corporate bonds, more of a single a kin type 0:09:10.760 --> 0:09:12.920 of average portfolio. 0:09:13.080 --> 0:09:15.400 Credit rating, and then we like agency nbs. 0:09:15.600 --> 0:09:18.680 We like all those bonds or all those mortgages that 0:09:18.720 --> 0:09:20.319 people locked in low mortgages. 0:09:20.360 --> 0:09:23.000 I don't think there's any prepayment risk. People probably aren't 0:09:23.040 --> 0:09:24.000 going to be moving. 0:09:23.800 --> 0:09:27.839 Again to and it's good for their balance sheets. So 0:09:28.160 --> 0:09:30.480 you know, they're yielding about five percent for four to 0:09:30.559 --> 0:09:34.120 five percent right now. So we're just looking some high 0:09:34.200 --> 0:09:36.120 quality bonds add that to the portfolio. 0:09:36.200 --> 0:09:36.720 Lock in these. 0:09:36.640 --> 0:09:39.400 Yields while you got them, because that cash balance that 0:09:39.440 --> 0:09:42.920 everybody's loves so much, that money market interest rate, in 0:09:43.000 --> 0:09:46.640 our view, that's gone into twenty twenty five, not completely gone, 0:09:47.040 --> 0:09:47.800 but it's gonna be. 0:09:47.880 --> 0:09:49.560 I mean, I'm waiting for it. 0:09:49.600 --> 0:09:52.480 We still hit another record high at the end of 0:09:52.600 --> 0:09:55.520 last week, according to the data that came out. So 0:09:55.840 --> 0:09:58.040 do you think that it matters if it's twenty five 0:09:58.120 --> 0:10:01.839 or fifty in September and or is it really how 0:10:01.840 --> 0:10:03.439 many cuts we're going to be getting. I mean, we're 0:10:03.440 --> 0:10:06.720 still pricing in something like almost ten cuts through the 0:10:06.760 --> 0:10:09.240 end of next year, right. 0:10:09.000 --> 0:10:11.200 And you know, I think about it as like you know, 0:10:11.240 --> 0:10:12.600 getting lost in the forest. 0:10:13.000 --> 0:10:14.360 Wait, is it the forest and the trees? 0:10:14.679 --> 0:10:17.320 You can't see the forest from the trees, right, Yeah, 0:10:17.480 --> 0:10:17.959 something like that. 0:10:18.800 --> 0:10:21.920 The fast couple of cycles, on average, the FED is 0:10:21.960 --> 0:10:25.559 cut from peak to trough seventeen times. Now that's twenty 0:10:25.600 --> 0:10:29.080 five basis point cuts, but seventeen times is how much 0:10:29.080 --> 0:10:31.920 the FED usually cuts in a cutting cycle. So whether 0:10:32.000 --> 0:10:34.600 or not they cut one time or two times at 0:10:34.600 --> 0:10:36.880 the first cut, don't get lost in that. 0:10:37.080 --> 0:10:39.280 Don't overdo it. What you want to. 0:10:39.240 --> 0:10:41.480 Do is set up for where this Where does the 0:10:41.600 --> 0:10:44.120 end of the FED Fund's rate go? Where do we 0:10:44.160 --> 0:10:46.760 go on the tenure yield? Our view, based on the 0:10:46.800 --> 0:10:50.040 last three cycles, the tenure yield ends with a two 0:10:50.200 --> 0:10:53.320 handle and the FED Fund's rate ends with a one handle. 0:10:54.320 --> 0:10:57.160 If that is the world we're in, we're having a 0:10:57.160 --> 0:10:58.000 different conversation. 0:10:58.160 --> 0:11:00.400 Right now, we want to get while the these yields 0:11:00.400 --> 0:11:01.880 are where they are right now. 0:11:02.120 --> 0:11:04.880 I know it's been a quick move, but still don't 0:11:05.000 --> 0:11:07.600 let it the volatility, you know, get you off course. 0:11:08.160 --> 0:11:11.080 Bonds are going to be likely recovering all that in 0:11:11.160 --> 0:11:13.360 our view majority, if not all they lost in twenty 0:11:13.440 --> 0:11:16.520 twenty two, and we still got upside potential in the 0:11:16.520 --> 0:11:17.160 Bontdom market. 0:11:17.640 --> 0:11:19.240 All right, Matt, thanks so much for joining us. Really 0:11:19.280 --> 0:11:19.719 appreciate it. 0:11:19.760 --> 0:11:22.440 Matt misk And he's a co chief investment strategist at 0:11:22.480 --> 0:11:23.880 John Hancock Investment Management. 0:11:23.880 --> 0:11:24.959 And look it up there in Boston. 0:11:26.400 --> 0:11:30.280 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:11:30.360 --> 0:11:33.040 weekdays at ten am Eastern on Apple card Play and 0:11:33.120 --> 0:11:36.040 Enroud Auto with the Bloomberg Business app. Listen on demand 0:11:36.120 --> 0:11:40.960 wherever you get your podcasts, or watch us live on YouTube. 0:11:41.640 --> 0:11:44.240 Happy Friday, Longest Forday week Out there. I'm Alex stan 0:11:44.280 --> 0:11:46.840 alongside Paulsman Need. This is Bloomberg Intelligence Radio. We are 0:11:46.840 --> 0:11:49.760 broadcasting to you live from Interactor Brooker Studio right here 0:11:49.960 --> 0:11:53.360 in cloudy midtown Manhattan. So the equity market really rolling 0:11:53.400 --> 0:11:56.760 over here, Big tech in particular getting hit the NASDAC 0:11:56.880 --> 0:11:58.920 is off over two percent below it's fifty and one 0:11:58.960 --> 0:12:01.079 hundred day moving average. Quick work of getting to that 0:12:01.120 --> 0:12:03.679 two hundred day moving average as well. Not helping is 0:12:03.720 --> 0:12:06.480 what's happening in Broadcom. That stock down by over ten 0:12:06.520 --> 0:12:09.640 percent on earnings that came out yesterday after the closing bell. Now, 0:12:09.760 --> 0:12:12.600 the money they made from AI and their forecast was 0:12:12.640 --> 0:12:15.640 really quite good. It was just everything else that seemed 0:12:15.640 --> 0:12:18.600 to disappoint investors sort of waiting for that trough, despite 0:12:18.640 --> 0:12:20.480 the CEO saying yeah, okay, we might have found the 0:12:20.480 --> 0:12:22.800 bottom and all of that, but nonetheless that stock is 0:12:22.800 --> 0:12:26.120 off quite a bit. Dana Wolman is Bloomberg Senior Technology editor. 0:12:26.160 --> 0:12:27.760 She joins us, Now, there's a lot to get through 0:12:27.800 --> 0:12:30.160 in tech, but I just wanted to hit on Broadcom. 0:12:30.480 --> 0:12:33.199 When you're looking at the stock reaction to the news 0:12:33.240 --> 0:12:36.200 like they delivered on AI. They made a boatload of money, 0:12:36.240 --> 0:12:38.440 They're going to keep making a boatload of money on AI. 0:12:38.640 --> 0:12:40.920 Do you think it's an overreaction from what you're hearing. 0:12:41.400 --> 0:12:44.160 A little bit and my background is not in equities, 0:12:44.160 --> 0:12:46.200 but to your point, you would think that the worst 0:12:46.240 --> 0:12:49.079 news imaginable would be that the company was not keeping 0:12:49.120 --> 0:12:52.000 up with expectations and AI. In fact, it beat expectations 0:12:52.040 --> 0:12:54.920 in all the parts of its business that are related 0:12:54.920 --> 0:12:58.440 to AI. Somehow, it's really its legacy businesses that were 0:12:58.520 --> 0:13:01.120 flagging in the forecast, but that, as you said, was 0:13:01.240 --> 0:13:02.560 enough to just send the stock down. 0:13:03.720 --> 0:13:08.000 It's interesting, it seems like Broadcom is well positioned for 0:13:08.160 --> 0:13:11.880 this AI you know, kind of phenomena here because investors, 0:13:11.920 --> 0:13:13.720 as you know, are trying to figure out a way 0:13:13.800 --> 0:13:16.440 how do I play AI? And really do I just 0:13:16.480 --> 0:13:19.320 buy Nvidia? Are there other ways to play it here? So, 0:13:19.760 --> 0:13:22.400 but tell us about Broadcom and it's exposure to AI, 0:13:22.559 --> 0:13:23.679 maybe how it's positioned. 0:13:24.360 --> 0:13:27.560 So I think Broadcom gets less attention in part because 0:13:27.600 --> 0:13:31.040 I think it's in a highly technical field, a field 0:13:31.080 --> 0:13:33.960 that's already just very technical and sometimes difficult to explain 0:13:34.040 --> 0:13:37.640 to play people. I think sometimes Broadcom's equipment is even 0:13:37.679 --> 0:13:38.040 more so. 0:13:39.000 --> 0:13:41.559 But it's everywhere. I mean, it's legacy businesses. 0:13:41.880 --> 0:13:45.680 It's chips were already in everything from automotive to smartphones, 0:13:46.720 --> 0:13:48.800 and its components are included in. 0:13:50.960 --> 0:13:52.480 Just AI setups as well. 0:13:52.559 --> 0:13:57.640 Yep, and the it's not necessarily a one form one 0:13:57.640 --> 0:14:02.959 comm to what Nvidia is producing, but just complementary components 0:14:02.960 --> 0:14:04.800 and piece of hardware that people might not know the 0:14:04.880 --> 0:14:07.400 names ever think of, but are necessary in these larger 0:14:07.440 --> 0:14:08.400 AI setups. 0:14:08.440 --> 0:14:10.640 And also what I was reading is that if a 0:14:10.760 --> 0:14:13.000 company winds at making their own AI tips in house, 0:14:13.040 --> 0:14:14.360 they need Broadcom to do that. 0:14:14.640 --> 0:14:17.280 So there's that part of the business as well. Let's 0:14:17.320 --> 0:14:19.440 go to Intel because that stock is also off over 0:14:19.600 --> 0:14:20.320 three percent. 0:14:20.640 --> 0:14:24.840 It's considering some options for its steak in its struggling 0:14:24.880 --> 0:14:28.280 automated driving system provider Mobile Global. Can you remind us 0:14:28.320 --> 0:14:30.000 what Mobile Eye Global actually does. 0:14:30.320 --> 0:14:34.440 Mobile Eye makes automated and automated driving system So is 0:14:34.480 --> 0:14:39.080 it self driving stuff yes, autonomous vehicles yes. And Intel 0:14:39.160 --> 0:14:41.080 has had a steak. It actually sold part of its 0:14:41.080 --> 0:14:45.760 steak last year. I believe we reported profit of netted 0:14:45.760 --> 0:14:48.720 around one point five billion from that. But it's looking 0:14:48.760 --> 0:14:51.960 to sell more of its steak, and as we report 0:14:51.960 --> 0:14:54.520 in the story, it's picking if it's going forward with this, 0:14:54.800 --> 0:14:58.360 it's picking a not great time. Mobilized stock has been 0:14:59.040 --> 0:15:03.400 down a lot, and so Intel would not exactly be 0:15:03.440 --> 0:15:06.840 recouping on its investment if it chose this moment. But 0:15:06.880 --> 0:15:10.000 as we reported more broadly, Intel is in a dire moment, 0:15:10.440 --> 0:15:15.720 it does seem to be considering some really desperate severe 0:15:15.760 --> 0:15:17.320 measures to keep itself afloat. 0:15:17.720 --> 0:15:20.880 Yeah, I mean, I'm just I mean, it's Intel. 0:15:20.960 --> 0:15:23.440 It's down sixty two percent year to date, fifty two 0:15:23.440 --> 0:15:27.200 week low, down three point six percent today. You've covered 0:15:27.200 --> 0:15:29.920 this tech industry for a long time, Dana. 0:15:30.400 --> 0:15:32.760 What's going on with mo? With Intel? 0:15:32.800 --> 0:15:36.360 Did they just miss I guess the technological evolution of 0:15:36.440 --> 0:15:37.640 the chip business or is there? 0:15:38.280 --> 0:15:40.000 Is it management? What do you think is going on there? 0:15:40.720 --> 0:15:43.960 Certainly management doesn't help. I mean, it had that big 0:15:44.040 --> 0:15:47.360 CEO shake up a few years ago. That was when 0:15:47.400 --> 0:15:50.080 Brian Krisanich stepped down. It took a while to replace him, 0:15:50.120 --> 0:15:53.360 and since Pat Gelsinger has been in the role, has 0:15:53.400 --> 0:15:57.600 bet big on the company's foundry business, and that is 0:15:58.680 --> 0:16:01.480 in fact dragging down the company performance and seems to be, 0:16:01.600 --> 0:16:05.120 according to our reporting, something that the companies at least 0:16:05.160 --> 0:16:07.080 considering splitting off. 0:16:07.200 --> 0:16:09.640 Well okay, but that's confusing, right because their whole pitch 0:16:10.080 --> 0:16:12.200 was that, yeah, yeah, we're Intel, yay, but now we're 0:16:12.240 --> 0:16:14.720 gonna make chips too and be a foundry for us 0:16:14.760 --> 0:16:16.720 and for also us. You can come to us, We'll 0:16:16.760 --> 0:16:20.640 make our chips. So why has this gone so south? 0:16:22.120 --> 0:16:24.800 At least for now, the foundry's biggest client seems to 0:16:24.800 --> 0:16:30.640 be Intel itself, gotcha. Yes, So, for whatever reason, that 0:16:30.680 --> 0:16:34.400 part of the business has not taken off as expected. 0:16:35.600 --> 0:16:37.360 To the extent the company has brighter hopes, it does 0:16:37.400 --> 0:16:41.080 seem to be on the chip design side, less the manufacturing. 0:16:41.760 --> 0:16:44.280 So but weren't they a beneficiary or are they not 0:16:44.320 --> 0:16:47.400 going to be a beneficiary of the US government's investment 0:16:47.480 --> 0:16:48.600 in domestic chips. 0:16:51.200 --> 0:16:53.440 I think they'd like to be if they had to 0:16:53.440 --> 0:16:54.880 delay their plan, right. 0:16:55.440 --> 0:17:00.080 Yes, So that that is something that our reporters are chasing, 0:17:00.200 --> 0:17:01.840 is not just the fate of the company, but the 0:17:02.880 --> 0:17:07.800 possible ramifications for the government's investment plans in strategic areas 0:17:07.800 --> 0:17:09.560 that of course include. 0:17:09.920 --> 0:17:10.720 The chip industry. 0:17:11.240 --> 0:17:15.600 And they're based in Santa Clair, California, where everybody who 0:17:15.640 --> 0:17:17.600 is anybody in the chip business is based in that. 0:17:17.680 --> 0:17:20.800 Santa Clara, San Jo's a area there. University of Santa 0:17:20.840 --> 0:17:23.040 Clara is right there as well. Dana Woman, thank you 0:17:23.080 --> 0:17:25.520 so much for joining us. Dana Woman, senior Technology editor 0:17:25.560 --> 0:17:27.960 for Bloomberg News, joining us live here in our Bloomberg 0:17:28.000 --> 0:17:30.240 Interactive Broker studio which we appreciate. 0:17:30.280 --> 0:17:31.960 On a Friday, I mean, people come in on it. 0:17:32.040 --> 0:17:33.520 He likes some people come in, come in on a. 0:17:33.440 --> 0:17:34.680 Friday special gold Star. 0:17:35.080 --> 0:17:37.800 But you're right, the Intel stock is just getting crushed, 0:17:37.840 --> 0:17:39.879 and you know, it's just a it's almost like a 0:17:39.920 --> 0:17:44.600 shadow of its former self here with down sixteen percent. Dana, 0:17:44.600 --> 0:17:47.080 thanks so much for joining us there. 0:17:47.680 --> 0:17:51.560 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:17:51.640 --> 0:17:55.160 weekdays at ten am Eastern on applecar Play and androyd 0:17:55.200 --> 0:17:57.960 Outo with the Bloomberg Business App. You can also listen 0:17:58.080 --> 0:18:01.600 live on Amazon Alexa from oursip New York station just 0:18:01.680 --> 0:18:04.320 say Alexa playing Bloomberg eleven thirty. 0:18:06.200 --> 0:18:08.040 So let's see, we're getting some moves here in the 0:18:08.080 --> 0:18:10.120 currencies a little bit. I'm looking at the Bloomberg Dollar 0:18:10.720 --> 0:18:14.000 Index a little just a smidge higher on the Bloomberg 0:18:14.040 --> 0:18:17.000 Dollar Index, Pound Sterling a little bit weaker, the Euro 0:18:17.400 --> 0:18:19.679 a little bit weaker on the backs of some of 0:18:19.720 --> 0:18:22.560 this economic data we've got, including today's jobs number. Audrey 0:18:22.720 --> 0:18:25.560 Child Freeman joint Is. She's a team leader and chief 0:18:25.680 --> 0:18:29.280 f X strategist at Bloomberg Intelligence. Audrey, what are the 0:18:29.320 --> 0:18:31.760 currency markets telling me about some of the economic data 0:18:31.760 --> 0:18:33.480 we're seeing, including the jobs data today. 0:18:35.119 --> 0:18:39.240 Well, the US dollar was already very much weaker getting 0:18:39.480 --> 0:18:41.919 into the non fund pay rolls, and I think in 0:18:41.960 --> 0:18:45.520 the end, from a currency perspective, for as long as 0:18:45.560 --> 0:18:48.440 we didn't get any major supplies one way or the other, 0:18:49.960 --> 0:18:52.040 it wasn't going to be a game changer for the 0:18:52.080 --> 0:18:56.120 outbook for the dollar, which we know by now has 0:18:56.200 --> 0:18:59.840 become a lot more negative with the start of the 0:19:00.119 --> 0:19:04.760 is in cycle looming and most likely now likely on 0:19:04.840 --> 0:19:05.720 September eighteen. 0:19:06.600 --> 0:19:09.520 So to that point, how much more downside than is 0:19:09.560 --> 0:19:10.480 there too? Dollar yeen? 0:19:10.520 --> 0:19:15.960 In particular, I think dollar yen is being driven lower 0:19:16.000 --> 0:19:18.560 by both both by the US side of the trade 0:19:18.600 --> 0:19:23.840