Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on applecar Play and Android
Speaker 2: Auto with the Bloomberg Business App. You can also listen
Speaker 2: live on Amazon Alexa from our flagship New York station,
Speaker 2: Just say Alexa Play Bloomberg eleven thirty.
Speaker 3: Well, Stock's climbing after the latest economic data show the
Speaker 3: economy is holding up while still leaving the door open
Speaker 3: for the Fed to cut rates a few times this year.
Speaker 3: Bonds a little change though on this data. Let's get
Speaker 3: to the story with Ira Jersey, Bloomberg Intelligence Chief US
Speaker 3: Interest rates strategists. He joins us from Princeton, New Jersey.
Speaker 3: This PCE data that we got Ira largely in line
Speaker 3: with expectations. Does it change any of the moves from
Speaker 3: the Federal Reserve come September and later this year?
Speaker 4: Well, I think it doesn't take fifty basis points off
Speaker 4: the table.
Speaker 5: But I think just given the.
Speaker 4: You know, whole mosaic of the data that this report
Speaker 4: gives us between income spending as well as the you know,
Speaker 4: two and a half is percent core PC and headline
Speaker 4: PC numbers on a year on year basis that it
Speaker 4: makes it. I think a fifty basis point cut as
Speaker 4: an initial cut a little bit less likely, particularly when
Speaker 4: you look at some of the spending data, because the
Speaker 4: spending data is suggesting that the consumer is still willing
Speaker 4: to spend. And you look at some of the sectors
Speaker 4: and I was just actually taking a look at services
Speaker 4: and durable goods and the like, and durable goods sales
Speaker 4: really plummeted last year, but those have come back and
Speaker 4: are still growing in around a four percent year on
Speaker 4: year growth rate. So you know, the consumer is still
Speaker 4: holding up the economy right now. And unless that changes meaningfully,
Speaker 4: I suspect that the Federal Reserve will will move cautiously,
Speaker 4: but I do expect that they'll that they'll cut interest rates,
Speaker 4: but maybe not one hundred basis points this year, maybe
Speaker 4: seventy five, which again isn't a massive change. But I
Speaker 4: think that this data, you know, points to a, you know,
Speaker 4: the soft landing being more probable than it was before
Speaker 4: we saw it.
Speaker 6: All right, I'm aways curious about in terms of Fed policy,
Speaker 6: twenty five basis points versus fifty Is it better to
Speaker 6: kind of spoon feed slowly when you're shifting in cycle.
Speaker 6: When monetary cycle is shifting, is it better for markets, investors,
Speaker 6: and the economy or is it better to kind of
Speaker 6: give it a jolt like fifty.
Speaker 4: Well, typically, you know, the Federal Reserve is cutting interest
Speaker 4: rates during some kind of crisis or massive downturn, or
Speaker 4: when there's some kind of exogynous shock that occurs to
Speaker 4: that that might make the economy really slip into recession
Speaker 4: very quickly. That is not this situation, right, So this
Speaker 4: is different than most other cycles that we've seen over
Speaker 4: the past forty years. And because of that, I think
Speaker 4: there's some people who say, oh, well, they'll cut fifty
Speaker 4: because they're behind the curve when you look at some data.
Speaker 4: But then you look at the data that we saw
Speaker 4: today from July, right, which is a first read on
Speaker 4: how third quarter GDP and the likeer shaping up, and
Speaker 4: it was decent. That not spectacular or anything, certainly not
Speaker 4: like it was a year or eighteen months ago, but
Speaker 4: definitely definitely a decent number. So so Carol, to your point,
Speaker 4: I think, you know, them going slow to start, and
Speaker 4: then if the economy does slow down more significantly, they
Speaker 4: can cut more.
Speaker 5: Later.
Speaker 4: I think that they'll be more cautious than not. And
Speaker 4: that's one of the ways that I differ from some
Speaker 4: of our colleagues over at Bloomberg Economics.
Speaker 5: But nonetheless, like the Federal Reserve is an easing mode.
Speaker 4: They're going to be easing inflation at two and a
Speaker 4: half percent. Core inflation at two and a half percent
Speaker 4: is close enough to their target that I think that
Speaker 4: they're comfortable, you know, to start easing monetary policy now.
Speaker 3: Well, just in the last eleven minutes, we got consumer
Speaker 3: sentiment data. It showed that it improved in August for
Speaker 3: the first time in five months. Slower inflation and prospects
Speaker 3: for the Fed interest rate cuts helped lift expectations about
Speaker 3: personal finances. IRA consumers expect prices are going to climb
Speaker 3: at an annual rate of two point eight percent over
Speaker 3: the next year, down from two point nine percent expected
Speaker 3: last month and the lowest since the end of twenty twenty.
Speaker 3: The data out Friday showed again good news for the Fed.
Speaker 4: Yeah, so certainly, you know, the Federal Reserve looks at
Speaker 4: expectations for inflation for as part of the as part
Speaker 4: of its analysis of what it needs to do with
Speaker 4: monetary policy, and certainly consumer expectations, like the Michigan Inflation Expectations.
Speaker 5: Component is one of those, along with along with the market.
Speaker 4: Now, yeah, you know when you look at the Tips
Speaker 4: market and we put out we put out a note
Speaker 4: about this last week, looking at the Tips market and
Speaker 4: what it's been pricing, and you know, it's pricing basically
Speaker 4: two percent inflation for the next decade.
Speaker 5: Now, tips haven't been.
Speaker 4: The greatest of indicators of and of where inflation is
Speaker 4: going to go.
Speaker 5: And in fact, if you.
Speaker 4: Had actually bought tips and tips break even so the
Speaker 4: inflation rate that the market expects back in twenty twenty one,
Speaker 4: when inflation started to go up, you would have made
Speaker 4: a killing because the inflation was meaningfully higher than what
Speaker 4: the market was pricing. But nonetheless, like at this point,
Speaker 4: you know, most inflation indicators forward inflation indicators are moderating somewhat.
Speaker 4: And because of that, I think it's another reason why
Speaker 4: the FED isn't concerned about a reacceleration of inflation at
Speaker 4: this point.
Speaker 6: All right, so check check. The Fed's got to fee
Speaker 6: pretty good about where inflation is. Dare I say goldilocks?
Speaker 6: But the one thing I am concerned about, and I
Speaker 6: know you watch it as well is the jobs market,
Speaker 6: and we get another read, of course the monthly report
Speaker 6: just about a week or so from now, or a
Speaker 6: week from now, I should say. Having said that, Tim
Speaker 6: and I have conversations with people saying that it's take
Speaker 6: that they're finding it's harder for people to find jobs,
Speaker 6: or they're getting a lot more job applications. Just twenty
Speaker 6: thirty seconds. Can Should we be a little worried about
Speaker 6: the job market real quickly?
Speaker 5: Yeah? I think so, And certainly the Fed has pivoted
Speaker 5: that way.
Speaker 4: Jay Powell was absolutely unequivocal about that last week.
Speaker 5: You know, a year ago we were only worried about inflation.
Speaker 4: Now the dual mandate is back in play, so any
Speaker 4: weakness in the job market will make the Fed Reserve
Speaker 4: worried that the economy slipping in therefore will cut interest rates.
Speaker 3: All right, Ira, thank you so much. Bloomberg Intelligence, Chief
Speaker 3: US interest rates strategist Ira Jersey joining us from Princeton,
Speaker 3: New Jersey.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on Affle Card playing then
Speaker 2: broud Otto with the Bloomberg Business app. Listen on demand
Speaker 2: wherever you get your podcasts or watch US live on YouTube.
Speaker 6: All right, back to Intel we go. We mentioned it,
Speaker 6: we talked about it with Carmen Rynegy. What's going on
Speaker 6: with the stock. It's up more than seven percent in
Speaker 6: today's session. It's a top gainer in the S and
Speaker 6: P and the Nasdaq one hundred. So let's talk about
Speaker 6: the news that really we thought it was gonna be
Speaker 6: a sleepy Friday, not even close. So with us is
Speaker 6: Ryan Gouldi's Bloomberg deal's reporter on Intel weighing a bunch
Speaker 6: of options, so Bloomberg exclusive. Kudos to you guys. So
Speaker 6: talk a little bit more about what they're considering and
Speaker 6: what this means. Is this good thing, bad thing, or
Speaker 6: we still don't.
Speaker 7: Know, Carol, I think it's the biggest story in tech
Speaker 7: right now. I think if you look across the board
Speaker 7: and you've seen the reaction today with the stock, I
Speaker 7: think Intel's obviously our semiconductors in general arep I think
Speaker 7: Broadcom was almost up four percent. This is a name
Speaker 7: that is being closely watched. There was there's been some commentary,
Speaker 7: you know, and as we've been speaking to sources around
Speaker 7: this idea that Intel is too big to fail, you know,
Speaker 7: getting back to you know, what happened in our way.
Speaker 7: This is kind of like this is almost getting to
Speaker 7: that territory. This is a big name for sort of
Speaker 7: national security almost but the United States, Intel itself accounts
Speaker 7: for forty one percent of US three hundred milimeter away
Speaker 7: for production. So you know, this is a name that
Speaker 7: you know, really is meaning we.
Speaker 6: Need Intel to be a healthy company, and we need
Speaker 6: a domestic, massive semi company.
Speaker 7: Indeed, indeed, and I think that is that's what's at
Speaker 7: the top of all of this. And so the pressure
Speaker 7: on on Gelsinger is enormous.
Speaker 3: But it's a lot less massive than it's been in
Speaker 3: the past at this point, especially after this year's stock decline.
Speaker 3: So Ryan, let's talk a little bit about what the
Speaker 3: options are from and again, the bank is working with
Speaker 3: the companies, working with banks like Morgan Stanley and Goldman Sachs.
Speaker 3: What are the options that these banks are laying out
Speaker 3: for the company.
Speaker 7: Yeah, And I think just at the top, I think
Speaker 7: it's it's it's good for us to note that Goldman
Speaker 7: and Morgan Stanley have been Intel's advisors for a long time.
Speaker 7: They took the company, you know, they've been around. They've
Speaker 7: been around the block, they know, they know a lot.
Speaker 6: Long relationship know the company.
Speaker 7: Yeah, exactly, And I think some of the things that
Speaker 7: they're talking about with Gelsinger on the board would include
Speaker 7: things such as a split of Foundry and the product
Speaker 7: design unit.
Speaker 3: That's a hue that would be meaning separate companies.
Speaker 7: A separation. Yeah, so going run it could be it
Speaker 7: could end up being a spin off.
Speaker 6: Why is that a good idea?
Speaker 7: I think because I think you know, Intel has found
Speaker 7: the scene pressure in recent weeks and months around this
Speaker 7: idea that the turnaround, the costs required for the turnaround
Speaker 7: in and around manufacturing itself of the actual chips is costly.
Speaker 7: One fab that they're taking money four tickets with twenty
Speaker 7: billion dollars to build.
Speaker 3: I gotta tell you, I'm just you know, you say
Speaker 3: too big to fail in the context of companies that
Speaker 3: we've talked about recently. Boeing is a company that has
Speaker 3: been talked about as being too big to fail. Instead
Speaker 3: of spinning off, they're consolidating bring back Spirit Aerosystems, a
Speaker 3: company they spun off twenty something years ago. It just
Speaker 3: seems like would these moves fundamentally change the fate of
Speaker 3: Intel or are they Is it financial engineering?
Speaker 7: I think it would because you'd essentially be looking at
Speaker 7: with a split of foundry, you'd essentially be looking at
Speaker 7: the company that's only focused on the product design, which
Speaker 7: i e. The chips that it might you might find
Speaker 7: an Adel computer or in Lenovo computer.
Speaker 6: So they wanted to be more like a TSMC right
Speaker 6: making chips.
Speaker 7: That was key to Gelsinger's view is that they wanted
Speaker 7: to rival TSMC. That so far, investors on convinced Intel
Speaker 7: is still the only customer of Intel's boundary business right,
Speaker 7: which you know, the challenge so far has been how
Speaker 7: can we get chips out the door at at fast
Speaker 7: enough rate? But other customers that aren't us.
Speaker 6: So if they do that, what's left in terms of
Speaker 6: Intel their secret sauce or their chips that they are making.
Speaker 6: You know, it's interesting in a week where we focus
Speaker 6: so much on Nvidia, is that enough of a business?
Speaker 6: Is that a better business? I understand it'll be more
Speaker 6: of a pure play all the costs of building up
Speaker 6: foundry thirty seconds here? Is that enough of a bit?
Speaker 7: It is because you'd essentially be looking at something that
Speaker 7: you know, where they've lost ground to the likes of
Speaker 7: AMD and around GPUs and CPUs. They could focus more
Speaker 7: time on the data cent to serve a type area
Speaker 7: well investors.
Speaker 6: That's huge investors are buying in today. Intel shares are
Speaker 6: up about seven percent as we speak, but let's not
Speaker 6: talk about where they are here today, because they're down
Speaker 6: a lot. Ryan Gould, thank you so much. Deal's reporter.
Speaker 6: Bloomberg News a Bloomberg exclusive. Read all the deals. Just
Speaker 6: head to Bloomberg dot com or check it out on
Speaker 6: the Bloomberg terminal.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on Applecarplay and Android Auto
Speaker 2: with the Bloomberg Business app. You can also listen live
Speaker 2: on Amazon Alexa from our flagship New York station. Just
Speaker 2: say Alexa play Bloomberg eleven thirty.
Speaker 6: All right, we'll talk a little bit more about what's
Speaker 6: going on in the markets. Fed expectations, because it does
Speaker 6: feel like the inflation report, the preferred inflation gauge of
Speaker 6: the US Central Bank, you know, coming in we're still
Speaker 6: seeing consumers spending, inflation cooling. It does feel like Jay
Speaker 6: Pal's got to feel pretty good going into this Labor Day, weekend.
Speaker 3: Somebody who watches this stuff so closely, the macro and
Speaker 3: the micro's Ben Emmons, founder and chief investment officer at
Speaker 3: fed Watch Advisors. He joins us from Washington, DC. Ben,
Speaker 3: I think you write more than some journalists. I know,
Speaker 3: how much of your day do you spend writing?
Speaker 8: I think probably a good eighty percent of my day
Speaker 8: on that. It's just like I'm addicted writer. I think,
Speaker 8: you know, I listened to you and Carol and John
Speaker 8: and other people, and that actually is always a really
Speaker 8: good inspiration for writing. Obviously checking numbers and markets and yeah,
Speaker 8: it's just enjoyed doing it. So it's always focused on analysis, right,
Speaker 8: It's always focused on trying to come up with another
Speaker 8: angle to this story like what we're looking at now
Speaker 8: at PCEE, and try to drill in and trying to
Speaker 8: come up with with practical ideas about it and then
Speaker 8: obviously extrapolating that to what I do now. I've decided
Speaker 8: to do the set of mown firm and really focus
Speaker 8: on FET watching and making that more like an investment
Speaker 8: firm around FET watching and apply that writing. And as
Speaker 8: the last point there, I want to say this, you know,
Speaker 8: as you know, I used to work for Bill gross
Speaker 8: A Binco for for many years. He taught me. Actually
Speaker 8: this he did that himself through This is one of
Speaker 8: the most prolific writers too. Tell you write out your thoughts.
Speaker 8: Is that gives you really the sort of your say,
Speaker 8: compass to navigate these markets.
Speaker 6: I do think that there's something really healthy and also,
Speaker 6: like we joke about putting your phone down or you know,
Speaker 6: sitting and writing something and just walking away from the
Speaker 6: day to day barrage or minute by minute barrage of
Speaker 6: headlines and statistics to try and just kind of think
Speaker 6: about where we are in a sane way.
Speaker 3: Well, Ben, there's a synthesis that happens when you sit
Speaker 3: down to write about something. I learned this in high school.
Speaker 3: I think one of my teachers said, you don't really
Speaker 3: know something unless you can explain it or you can
Speaker 3: write about it. Ben, And that's what that's what you
Speaker 3: do with your notes, and that's certainly why I appreciate
Speaker 3: getting them pretty much every day. Just to give you
Speaker 3: an idea of the types of notes that that Ben's written. Recently,
Speaker 3: he's written about the data center surge. He's written about
Speaker 3: Nvidia's economic impact and I know he's listening to our
Speaker 3: show because he forwarded me the Nvidia Economic impact note
Speaker 3: after we were talking about in Nvidia's economic impact on
Speaker 3: our program a couple of days ago, the uncertainty when
Speaker 3: it comes to IPO's reflation when it comes to shipping,
Speaker 3: and of course everything happening last week at Jackson Hole.
Speaker 6: Yeah, exactly. So let's start with Nvidia because it has
Speaker 6: been We even kick off our weekend show saying, listen, folks,
Speaker 6: there was one story pretty much this week, and that
Speaker 6: was Nvidia's earnings. How do you extrapolate that out not
Speaker 6: only to what it means for Nvidia specifically, but the
Speaker 6: AI race, the AAI build out, and what it maybe
Speaker 6: says more broadly about CAPEX spending and I don't know,
Speaker 6: and what it means for financial markets when that big,
Speaker 6: you know, tech trade means so much.
Speaker 5: That's right, Carol.
Speaker 8: I think that you know, the Wall Street Journal and
Speaker 8: a nice graph and that's showing all his TEX spending
Speaker 8: projection of it. And it's all based on the video, Lily,
Speaker 8: on expectations on how the video will perform from here,
Speaker 8: because they have the monopoly on those GPUs and chips
Speaker 8: and Blackwell and all the things that they that they create,
Speaker 8: and yet as they create those those chips, as we
Speaker 8: now know, there's on the on the ground all these
Speaker 8: data centers being set up across the country. And that
Speaker 8: was one of the graphs I put in the note
Speaker 8: of those bubbles out there, and that's not just a
Speaker 8: data center that I guess I haven't. I want to
Speaker 8: visit one of those, actually because it's kind of interesting,
Speaker 8: new new concept. But there's a lot of people that
Speaker 8: start working there. There's a lot of surfaces that happen
Speaker 8: around these data centers. So the VIDIA has become a
Speaker 8: major macroeconomic force in my view, where you could talk
Speaker 8: about the stock and the multiple and earnings projections and
Speaker 8: all those things that and everybody in the bronment had
Speaker 8: and was very excited about that. But me as a
Speaker 8: as an economist fabwatch, I think of it, this is
Speaker 8: a company that's become very powerful for the economy that
Speaker 8: if its performance were to change and the expectations about
Speaker 8: is growth changes, that it could have an impact on
Speaker 8: the economy in itself. It's like Boeing with its impact
Speaker 8: on the supply chain, and people have calculated that it's
Speaker 8: worked up to half a percent of GDP. I think
Speaker 8: in the video it could be actually more more impactful level.
Speaker 6: I think about that those data centers that are the
Speaker 6: big build out right, and do we all of a sudden,
Speaker 6: maybe in a year or two, are they not actually operating?
Speaker 6: Are they a little quiet because maybe the reality doesn't
Speaker 6: live up to the expectation. So so that's certainly top
Speaker 6: of mind. The other thing is we gotta talk, we
Speaker 6: gotta talk politics.
Speaker 3: Yeah, you know, I don't. I don't see a recent
Speaker 3: note Ben that you have about this. You had something
Speaker 3: about Harris a couple of weeks ago.
Speaker 2: It's coming.
Speaker 3: Okay, Well here's what here's what I want to let's
Speaker 3: get a little preview from you on this because Bloomberg
Speaker 3: News Morning Console poll came out late yesterday shows that
Speaker 3: uh Kamala Harris has sustained the burst of momentum she
Speaker 3: brought to the presidential contest. She's leading or tied with
Speaker 3: Donald Trump in each of the seven swing states most
Speaker 3: likely to decide the race. How do you think about
Speaker 3: economic policies under a president Harris versus the President Trump.
Speaker 8: Yeah, the first thing you think of is that, Okay,
Speaker 8: she just extends what we've been doing so far with Biden.
Speaker 8: And yes, the Infrastructure Act in the Chips Act will
Speaker 8: not be disrupted, right, which is I think back to
Speaker 8: the Navideo story an important aspect because they have been
Speaker 8: slow down in some of these chips activities recently, meaning
Speaker 8: there's a lot of semiconductor investment that's happening in the States,
Speaker 8: but some of these projects have been put off. The
Speaker 8: Financial Times report on that, so that's key. I think
Speaker 8: we go from an economic policy point of view.
Speaker 5: Then of course everybody looks at the Federal Reserve.
Speaker 8: And it's independence. You will not rail against that. I
Speaker 8: think for the broad markets that probably matters not as much.
Speaker 8: It's more about then further down, about how are you
Speaker 8: going to go after people with higher taxes?
Speaker 9: Right?
Speaker 8: Are you really going to increase capital gains taxes and
Speaker 8: wealth taxes and that sort of discussion. And I think
Speaker 8: lastly it's really about her own agenda in terms of
Speaker 8: like how she's shaping it. We're getting some contours of it.
Speaker 8: She does seem to be in favor of fracking, for example,
Speaker 8: which matters to energy supply, and you know she is
Speaker 8: going to address the border, which could you know, affect
Speaker 8: immigration flows, right, So I think, if you think all
Speaker 8: those things, her agenda is extension of Buyden, but it
Speaker 8: is her own agenda. But the most important thing for
Speaker 8: me at least is I think that if there's no
Speaker 8: disruption in what the Infrastructure Act and chips actually doing
Speaker 8: to the economy, that will matter a lot, because that's
Speaker 8: really been a big drive I think for economic performances
Speaker 8: of the past year.
Speaker 6: Listen, I think about tim the conversation we had on
Speaker 6: Bloomberg Business Week with the Windham Hotels CEO, who said
Speaker 6: some of their development, especially for extended stay hotels, was
Speaker 6: specifically tied to some of the congressional spending plans that
Speaker 6: have come from the Body administration. In other words, whether
Speaker 6: it's infrastructure or so and so forth, that places are
Speaker 6: building out, companies are building out throughout the nation.
Speaker 3: Texas joined us from Frisco Texas. Yeah, you're talking about
Speaker 3: Geff Bilotti, who was on with us last week or
Speaker 3: the week before, right, So what.
Speaker 6: You say in terms of these plans, whether it's data centers, AI,
Speaker 6: whether it's climate change, renewable energy, these spending plans are
Speaker 6: certainly key in terms of economic growth and keeping kind
Speaker 6: of the engine going. Having said that What is the
Speaker 6: one political policy, whether it's Donald Trump or Kamala Harris
Speaker 6: in the White House come November that you think is
Speaker 6: going to be very important to keeping the economy in
Speaker 6: a good place here in the US And just have
Speaker 6: about forty seconds.
Speaker 8: Yeah, it would be the debt seating negotiation and how
Speaker 8: fiscal policy will be shaped into twenty twenty five, because
Speaker 8: remember that that's the negotiation. Last year had a one
Speaker 8: percent secretation attached as part of the negotiation. Will that secrestration,
Speaker 8: which is a spending gap, will that be like what
Speaker 8: we experienced a twenty eleven twelve, like a larger one,
Speaker 8: because that if that's the case, that would have a
Speaker 8: significant impact on the economy. Doesn't seem that that's the case, right,
Speaker 8: that both want to spend more. But that is a
Speaker 8: really important aspect I think of as we go to
Speaker 8: the election. How will fiscal policy play the role in Nicoli?
Speaker 6: Yeah, and as we know increasingly from Gas it is
Speaker 6: an important one. We've talked about it in the past,
Speaker 6: but it's a much more in terms of the deficit
Speaker 6: and so on, it's going to be potentially more problematic.
Speaker 6: Ben Emmons, thank you so much. Keep the notes coming.
Speaker 6: Founder and chief investment officer at fed Watch Advisors. Joining
Speaker 6: us from Washington, d C.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on Apple Card playing Android
Speaker 2: Auto with the Bloomberg Business App, Listen on demand wherever
Speaker 2: you get your podcasts, or watch us live on YouTube.
Speaker 3: Kaylee lyons she's balanced a power co host. She's joining
Speaker 3: us from Washington, DC. Kaylee, We've been dying to talk
Speaker 3: to you since I saw these numbers come out late
Speaker 3: yesterday after our show got off the air. Kamala Harris
Speaker 3: sustaining the burst of momentum she brought to the presidential contest.
Speaker 3: She's leading or tied with Republican Donald Trump and each
Speaker 3: of the seven states most likely to decide the race.
Speaker 3: New numbers from Bloomberg News and Morning Consul give us
Speaker 3: the lay of the land and how this latest data
Speaker 3: change the next few months.
Speaker 10: Well, really, what the data illustrates Tim is that the
Speaker 10: map for Kamala Harris, basically the number of states she
Speaker 10: could potentially win in order to secure the two hundred
Speaker 10: and seventy Electoral College votes she needs to clinch the presidency,
Speaker 10: is significantly wider than it was for Joe Biden. And
Speaker 10: these figures do confirm that, as you said, in six
Speaker 10: of the seven, she is leading Donald Trump. In fact,
Speaker 10: while a lot of these are within the margin of error,
Speaker 10: in Wisconsin, one of the key battleground states part of
Speaker 10: the so called Blue Wall, she's up by eight points.
Speaker 10: And even in states where we almost were no longer
Speaker 10: even considering them swing states like North Carolina because Donald
Speaker 10: Trump's lead has been so significant, she is now up
Speaker 10: on Trump in North Carolina by two points. She's also
Speaker 10: up by two in Georgia. She's up by four in
Speaker 10: Pennsylvania and Nevada, and three in Michigan. So by and large,
Speaker 10: this does show that while this race remains incredibly close,
Speaker 10: she does have potentially more chances. And that also means
Speaker 10: that it's more areas in which Donald Trump and the
Speaker 10: RNC are going to have to dedicate resources and spend
Speaker 10: time campaigning in areas that they once thought were givens
Speaker 10: for them much safer may not have had to invest
Speaker 10: as much time and energy they now may be forced
Speaker 10: to do so.
Speaker 6: So help me out here, Kelly, as the days you know,
Speaker 6: I feel like the days are numbered now as we
Speaker 6: count down to the November you know, actual voting, although
Speaker 6: we know people can vote earlier. Having said that, polls,
Speaker 6: how much do they bounce around, especially as you get
Speaker 6: closer and closer to election day.
Speaker 10: Yeah, a lot of strategists will tell you, Carol, that
Speaker 10: you shouldn't really look at any polls before Labor Day. However,
Speaker 10: the campaign is much more aggressive pre Labor Day this
Speaker 10: year than we have seen in the past, just given
Speaker 10: the truncated nature of the Harris Walls ticket here. Of course,
Speaker 10: they only became the ticket just recently, and she's only
Speaker 10: been in this race as a presidential candidate, not vice
Speaker 10: presidential one, for about six weeks. So we will look
Speaker 10: to see how things morph, especially after the debate on
Speaker 10: September tenth. That is going to be potentially a critical
Speaker 10: pivotal moment in this campaign when we see Donald Trump
Speaker 10: and Kamala Harris sharing the stage, and of course we'll
Speaker 10: expect to hear more sit down interviews, frankly from the
Speaker 10: both of them. Kamala Harris, of course, did her first
Speaker 10: last night on CNN. Interestingly, she said on day one
Speaker 10: of her presidency in that interview, the thing she wants
Speaker 10: to focus most on is the middle class, And in
Speaker 10: this poll across the swing states, it actually finds that
Speaker 10: swing state voters give Harris the advantage on who they
Speaker 10: trust more to help the middle class by a margin
Speaker 10: of seven points. It's interesting to see her performing better
Speaker 10: on some of these economic questions than Joe Biden.
Speaker 6: Was do you feel like though I felt like it
Speaker 6: was to some extent a repeat of some of the
Speaker 6: main issues or main things she brought up in her
Speaker 6: speech at the DNC. And I do feel like we
Speaker 6: want more specificity, although I'm not quite sure we're going
Speaker 6: to get it, because that can get you into problems.
Speaker 6: More specific you get the devil is always in the details.
Speaker 10: Yeah, that's exactly right, Carol. Clearly US journalists and our
Speaker 10: audience here on Bloomberg Radio probably wants the policy specifics, right,
Speaker 10: What are the exact payforce for some of the things
Speaker 10: she's suggesting, like twenty five thousand dollars down payment assistance
Speaker 10: to first time home buyers. And we didn't really get
Speaker 10: that last night. It kind of still was these broad
Speaker 10: ideas of wanting to help the middle class and create
Speaker 10: an opportunity economy, and she didn't also shy away from
Speaker 10: a lot of the work that has been done in
Speaker 10: the Biden administration when it comes to the economy, things
Speaker 10: like the Inflation Reduction Act and the Infrastructure Bill, that
Speaker 10: kind of thing. But I think what was one of
Speaker 10: the more interesting points of the interview was she was
Speaker 10: questioned on some of the policy areas in which she
Speaker 10: is flip flopped, like a ban on fracking. She made
Speaker 10: it very clear last night that she would not seek
Speaker 10: such a ban as president, even though she said she
Speaker 10: was in favor of it when she was running in
Speaker 10: the Democratic primary back in twenty nineteen. And her explanation
Speaker 10: for that, as well as some pivots and policy she's
Speaker 10: made when it comes to the border, is that her
Speaker 10: values remain the same even if her policy ideas have
Speaker 10: started to change, and the values argument will wait have
Speaker 10: to wait and see if voters really by Republicans don't
Speaker 10: really seem to be doing so.
Speaker 3: I also wonder to what extent, you know, the flip flopping,
Speaker 3: so called flip flopping matters and the context of her opponent,
Speaker 3: who has been on several sides of both sides of
Speaker 3: several issues too, So I don't know to what extent
Speaker 3: that matters to voters, especially given you know it was
Speaker 3: five years ago.
Speaker 6: In some points, I have to say one thing, right,
Speaker 6: and I think everybody's been highlighting as new. I watched
Speaker 6: it all and I did thought it was very earnest
Speaker 6: and honest. When she said, yeah, I'd be up for
Speaker 6: having a Republican in my candidate, Like if you embrace diversity,
Speaker 6: which she does, she's.
Speaker 3: Going along when did it, Obama did it?
Speaker 6: Yeah, I think it's smart or yeah, And I know
Speaker 6: we're not supposed to weigh in on it, but we
Speaker 6: as an organization embrace diversity. So it's interesting to see
Speaker 6: her come out and.
Speaker 10: Say that, yeah, for sure. And I would point out
Speaker 10: at the at the DNC rather in Chicago, where I
Speaker 10: was last week, even though it already feels like it
Speaker 10: was months ago, there were a number of Republicans who
Speaker 10: spoke on the stage, Adam Kingsner, the former Congressman, Jeff Duncan,
Speaker 10: who was the lieutenant governor of Georgia, who are of
Speaker 10: course not pro Trump Republicans. They're in fact very anti Trump,
Speaker 10: but they were they are at the Democratic National Convention.
Speaker 10: It'll be interesting to see if it's those types of
Speaker 10: individuals she's thinking about potentially's cabinet potential candidates for a
Speaker 10: cabinet position. She of course didn't name names.
Speaker 3: He Kaylee, we only have like ten seconds left for this.
Speaker 3: But now that we got an interview with Harris on
Speaker 3: CNN and Tim Walls as well, are we going to
Speaker 3: start to see them do more media?
Speaker 10: Yeah, we can expect that in probably doing them solo
Speaker 10: Tim rather than join interviews like we saw last night.
Speaker 6: Although I thought Tim, you know, it was like it
Speaker 6: was interesting to see the two of them. I'm waiting
Speaker 6: for the sixty minutes interview like begem or the Bloomberg interview.
Speaker 2: Come.
Speaker 6: That's right y, all right, Kelly Lines, thank you so much,
Speaker 6: Really appreciate Balance of Power co host joining us there
Speaker 6: in DC.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on applecar Play and Android
Speaker 2: Auto with the Bloomberg Business Act. You can also listen
Speaker 2: live on Amazon Alexa from our flagship New York station
Speaker 2: Just Say Alexa, playing Bloomberg eleven thirty.
Speaker 3: Dell shares her hire. The company did report better than
Speaker 3: expected revenue due to an increase in the sales of
Speaker 3: servers built for handling AI workloads. We got with us.
Speaker 3: Wujin Hoo Bloomberg Intelligence senior tech analyst. He's here joining
Speaker 3: us from Princeton, New Jersey. Woujin, give us the high
Speaker 3: level and then we're gonna get to the various notes
Speaker 3: that you wrote about Dell post earnings. Give us the
Speaker 3: high level recap of what we heard from the last night.
Speaker 9: Sure, so the big lead into the print was AI
Speaker 9: server margins or ISG margins in general, and the beat
Speaker 9: there was eleven percent ISG margins. Last quarter they did
Speaker 9: about eight percent. From a revenue basis, there was a
Speaker 9: four percent revenue beat principally driven by AI servers. They
Speaker 9: did about three point one billion dollars in AI server revenues,
Speaker 9: and I think the consensus was around two point four billion,
Speaker 9: so that's where the upside was. There were some, you know, negatives,
Speaker 9: The PC market isn't going as well as one at hope,
Speaker 9: but it seems just that the street is overlooking got
Speaker 9: a little bit. But all in all, AI is doing
Speaker 9: fairly well for Dell.
Speaker 3: Uh Wujin, you mentioned PCs, AI PCs.
Speaker 2: You know this.
Speaker 3: We spoke to John Rose earlier this week, and also
Speaker 3: can I just say we got some great questions Mark
Speaker 3: Bloomberg Intelligence team ahead of that interview for John.
Speaker 6: Oh yeah, yeah, and he's right in the thick of it.
Speaker 3: He's right in the thick of it. One thing that
Speaker 3: we asked about Wujin was about AI p cs. Is
Speaker 3: this something that there there's promise in that we're going
Speaker 3: to be using PCs that are equipped for AI or
Speaker 3: is this stuff going to be on our phones? Like
Speaker 3: is Dell is del right in thinking that there's gonna
Speaker 3: be a big market for a I p cs.
Speaker 9: Well, I don't think there's going to be a choice
Speaker 9: uh Tim primarily because uh Intel a m D they're
Speaker 9: all making uh AI PC chips and Dell HP, Lenovo,
Speaker 9: whoever the PC o em is, they're going to put
Speaker 9: put them in their PCs. Now, are they going to
Speaker 9: charge a premium? A slight right, but you know, like
Speaker 9: it or not, we are going to have an AIPC.
Speaker 9: The question, the better question is are there going to
Speaker 9: be apps that's going to help support the power of
Speaker 9: the aipcs? And that that's that's the one hundred thousand
Speaker 9: dollars question that I have right now. The big uptake
Speaker 9: is probably going to be more on twenty twenty five
Speaker 9: as a driver a calendar twenty twenty five as a driver,
Speaker 9: then on twenty twenty four.
Speaker 6: That's right, Yeah, because I keep thinking, why do I
Speaker 6: need an AIPC or will I need it for work?
Speaker 9: Oh? Carol, you will need it for work. Just imagine
Speaker 9: the amount of time that you spend on your emails
Speaker 9: just to catch up on emails. Imagine if you once
Speaker 9: you open up your PC, it'll create a dossie of
Speaker 9: all the things that you need to do, all the
Speaker 9: questions that you need to have ahead of all of
Speaker 9: your interviews, right all on a single page.
Speaker 3: I guess on Saturday and Tuesday when I'm back.
Speaker 9: Let's let well, well, AIPC could probably expedite that. But
Speaker 9: let's see what Microsoft does or any other Will it
Speaker 9: help them focus?
Speaker 7: What are you saying?
Speaker 3: Focused?
Speaker 9: Productivity? It's all about productivity.
Speaker 6: But so that's practical. Like Tim and I kind of
Speaker 6: joke about it, but we do think bright would be
Speaker 6: great to have something just write some of our introductions
Speaker 6: or yeah, suggest some questions. When will it be reliable
Speaker 6: though that we can trust it. I'm a little nut
Speaker 6: about the source of things, and you know, making sure
Speaker 6: it's accurate, accurate, you are accurate with that.
Speaker 9: Silly still still unclear where we're when we'll get there,
Speaker 9: But given how powerful these large language models have become,
Speaker 9: I do think that it'll be relatively soon, maybe maybe
Speaker 9: mid twenty back half of twenty five and twenty six
Speaker 9: will start seeing a proliferation of applications to help support
Speaker 9: the IPC movement.
Speaker 3: What's going to be the learning curve on that?
Speaker 9: Wou jin should be fairly quick, right, It's it's almost
Speaker 9: like a search. Let's just say, but once we learned uh,
Speaker 9: the uh, the AAPC language prompts or the Copilot language prompts.
Speaker 9: You know, I wouldn't be surprised if it if the
Speaker 9: lyric curves fail easy.
Speaker 3: You keep making making references to Microsoft. Is Microsoft going
Speaker 3: to be the big beneficiary of developments with this AI hardware.
Speaker 9: Well, they're already in there, right. If you think about
Speaker 9: what Microsoft has done with Copilot and integrating with their
Speaker 9: Office Suite, you know they've made a bit push. And
Speaker 9: keep in mind they have a big investment in Open
Speaker 9: AI to to help support that.
Speaker 2: Right.
Speaker 3: You know, sometimes I think about billion dollars.
Speaker 6: Yeah, Dell's history and just it's pretty remarkable. I mean,
Speaker 6: this tucks up almost fifty fifty five zero year to date.
Speaker 6: It just feels like it has, I don't know, reinvented itself.
Speaker 6: About question, it's remarkable.
Speaker 3: We tryed to someone around my age, so you talk
Speaker 3: to him about Dell and they're they're you know, they
Speaker 3: associated with that ad campa that was out like when
Speaker 3: I was in junior high. Like, dude, you're getting a
Speaker 3: Dell right.
Speaker 5: One of the competitor.
Speaker 3: It could have had the fate of Gateway. Let's just
Speaker 3: say that like Gateway and Dell were the big players
Speaker 3: woo jen you know, twenty yep, thirty years ago.
Speaker 9: And look, Mike, Michael Dell has done a fantastic job
Speaker 9: in reshaping the company from a PC maker to a
Speaker 9: general enterprise or corporate IT maker, and now it's reventing
Speaker 9: itself as an AI server maker. Now keep in mind,
Speaker 9: if you think about all the AI server makers in
Speaker 9: the world, there's only super Micro was probably leading the pack.
Speaker 9: But if you look at the AI server revenues that
Speaker 9: Dell has, it went for one point five billion dollars
Speaker 9: last calendar year and it's on track to do about
Speaker 9: ten billion dollars in AI server sales in this calendar year.
Speaker 6: So super micros was do we have to be worried
Speaker 6: about Dell at all because of that? And just got
Speaker 6: about twenty five seconds.
Speaker 9: Yeah, quick recap from a financial standpoint, No, the earnings
Speaker 9: report kind of helps us out there. Super Micro's margins
Speaker 9: were down on a sequential basis, but Dell's margins were up,
Speaker 9: and that kind of swept beside those concerns.
Speaker 6: All right, cool stuff, as always, listen, Thank you so much.
Speaker 6: I always love checking in with you, Bujin, have a
Speaker 6: great weekend, Bujin hoo. He's Bloomberg Intelligence Senior Technology Alice
Speaker 6: joining us, Joining us excuse me from BI headquarters in Princeton,
Speaker 6: New Jersey.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on applecar Play and Android
Speaker 2: Auto with the Bloomberg Business Act. You can also listen
Speaker 2: live on Amazon Alexa from our flagship New York station.
Speaker 2: Just say Alexa play Bloomberg eleven thirty.
Speaker 6: So let's talk a little bit about the labor market.
Speaker 3: Yeah, the US labor market is expected to grow by
Speaker 3: four tenths of a percent a year through twenty thirty three.
Speaker 3: It's less than one third of the pace in the
Speaker 3: preceding decade. That's according to new projections from the Bureau
Speaker 3: of Labor Statistics numbers. It translates to six point seven
Speaker 3: million additional jobs over the decade, or about fifty five
Speaker 3: thousand a month, the BLS set in a report published
Speaker 3: on a Thursday. For more, Let's get to Robin Erics
Speaker 3: and vice president of Human Capital. Over at the conference board.
Speaker 3: Robin joins us from Chicago.
Speaker 2: How are you, Robin.
Speaker 1: I'm terrific. Thank you, Tim, It's great to be here.
Speaker 3: Well, thanks for joining us. Fifty five thousand jobs a month.
Speaker 3: That is a far cry from the several hundred thousand
Speaker 3: jobs a month that we've been accustomed to over the
Speaker 3: last couple of years. Do you expect it to moderate
Speaker 3: as much as the BLS thinks it will.
Speaker 1: I do, because I think that the advances in AI
Speaker 1: are going to change the jobs that we have. If
Speaker 1: you think about the jobs in nineteen twenty, one hundred
Speaker 1: years ago, thirty to forty percent of the US workforce
Speaker 1: was in farming and thirty percent of the workforce was
Speaker 1: in manufacturing. Today, only one to two percent are in
Speaker 1: farming and eight to ten percent in manufacturing. Well eighty
Speaker 1: percent are in services, so I think it's a good thing.
Speaker 1: But I do think that organizations have to be thinking
Speaker 1: about reskilling their employees.
Speaker 6: So some jobs go away, and then is there an
Speaker 6: equal amount of new jobs that are created that reskilling
Speaker 6: can help Those people who lose their jobs because of
Speaker 6: AI can now fail. Are they going to be completely different?
Speaker 5: Okay?
Speaker 1: Yeah, I think I think the jobs will be different,
Speaker 1: and I think that we have to think about jobs differently,
Speaker 1: just like if you were living one hundred years ago,
Speaker 1: you'd have to think about jobs differently if you were
Speaker 1: transported to twenty twenty four.
Speaker 6: So how ugly though or uncomfortable is that labor transition
Speaker 6: going to be? So I understand you could do reskilling
Speaker 6: and get people to fill some of those newer jobs
Speaker 6: that are now needed, but sometimes I don't know, like
Speaker 6: how uncomfortable might that be, especially if you're with somebody
Speaker 6: who loses the job.
Speaker 1: It is painful. And one of the things that we
Speaker 1: found is that only right now twenty one percent of
Speaker 1: US organizations are thinking about reskilling jobs. So it takes
Speaker 1: a while to do that, and so we definitely think
Speaker 1: that organizations should be doing more of that now. But
Speaker 1: part of The challenge right now is just making sure
Speaker 1: that everyone it has some AI literacy, and so that's
Speaker 1: another area that we suggest organizations focus on.
Speaker 3: Robin, does this mean we're going to work less in
Speaker 3: a few years, like a four day work week? Steve
Speaker 3: Cohen is.
Speaker 5: Investing in would you work any less? Wow?
Speaker 3: John Tucker is so rude. You know I'm working double
Speaker 3: duty today.
Speaker 1: John, Exactly. That's that's that's tough.
Speaker 9: World's smallest violin comes out.
Speaker 2: Okay, all right, enough from you.
Speaker 3: Can we turn his mic off? Yeah, Robin, I'm more
Speaker 3: interested in what Robin has to say about this, truly, though.
Speaker 3: The reason I ask is because Steve Cohen and co
Speaker 3: are investing in golf, because they argue that, you know,
Speaker 3: we are going to be working less and playing more golf.
Speaker 6: No, it is his firm necessarily, No, no, no, no others,
Speaker 6: thank you elsewhere?
Speaker 5: What do you?
Speaker 2: What say you?
Speaker 3: Robin?
Speaker 1: So I'm smiling because you might think that we're working
Speaker 1: less now than we were one hundred years ago, but
Speaker 1: because of technology, we can work twenty four seven. And
Speaker 1: so I do believe that there's a huge risk of
Speaker 1: burnout if organizations expect their employees to work all the time.
Speaker 1: So at the same time that organizations are thinking about
Speaker 1: doing more with less fewer people. You know, we actually
Speaker 1: found in our most recent survey that forty five percent
Speaker 1: of organizations said that they had restricted hiring in the
Speaker 1: last six months, they reduced travel, thirty percent said they'd
Speaker 1: done layoffs. So there's a lot of cost cutting measures
Speaker 1: right now.
Speaker 6: You know, it's so funny. Sorry, I'm going to go
Speaker 6: to a little bit of an aside, but there was
Speaker 6: a great story on the Bloomberg this past week about
Speaker 6: this mining billionaire who banned work from home and he's
Speaker 6: targeting coffee runs.
Speaker 3: Wait, wait, this is this is a really interesting story.
Speaker 3: I know it makes sense.
Speaker 6: Chris Allison, his mining company.
Speaker 3: They've already been home, and this sounds great.
Speaker 6: Why tell me, what do you mean?
Speaker 5: Do you want me to.
Speaker 9: Work from home in a mine?
Speaker 3: No, not talking about the miners. It sounds great because
Speaker 3: I don't have the story in front of me. But
Speaker 3: if I recall correctly, he wants to provide everything for
Speaker 3: employees that they find off campus, including daycare.
Speaker 6: Yes, daycare, he talks about that.
Speaker 3: That sounds great.
Speaker 9: Bring the kids into the mind.
Speaker 6: No, Robin, We're so sorry. We're doing this, but it
Speaker 6: was a fascinating story. This guy, Chris Allison. Uh, they're
Speaker 6: in Perth Mineral Resources is company. They have a cafe,
Speaker 6: a restaurant, a gym, a crush, a.
Speaker 3: Reflection room, I'm told by Elizabeth Cedrin, a crushes, a daycare,
Speaker 3: Oh is it okay?
Speaker 6: A wellness center, and he says the sixty seven year
Speaker 6: old mining veteran said that staff loved working in the
Speaker 6: building and its facilities kept them glued there. I have
Speaker 6: a no work from home policy. I wish everyone else
Speaker 6: would get on board with that. The sooner the better.
Speaker 6: What about balance? Whatever happened to that?
Speaker 9: So?
Speaker 1: What are the things you might not what is? Yeah,
Speaker 1: one of the things you might not know about mining
Speaker 1: companies is that typically you don't have mining facility in
Speaker 1: a city, right, So these mining or facilities are oftentimes
Speaker 1: in company built towns, like literally, so there's a mine
Speaker 1: and they'll build the town around it. So really, where
Speaker 1: could you go? But haven't we seen this before? Didn't
Speaker 1: you know a big technology company try to do this
Speaker 1: with a campus and try to keep workers there twenty
Speaker 1: four to seven, we've seen it before.
Speaker 6: He is offering that the daycare center, which ares. Just
Speaker 6: they're in US dollars thirteen dollars and fifty eight cents
Speaker 6: a day compared to external costs of around this is
Speaker 6: Australian dollars one hundred and eighty dollars a day, so
Speaker 6: it's twenty Australian for them.
Speaker 5: Let's just say.
Speaker 3: Daycare in the US is thousands of dollars a month.
Speaker 6: Labor market one of the things that fed watch is
Speaker 6: so close to.
Speaker 9: You, don't.
Speaker 1: I was just going to say, the more that an
Speaker 1: organization can offer to their employees, the more likely that
Speaker 1: they are to be able to attract and retain those employees.
Speaker 1: So I think providing on site daycare is fabulous. I
Speaker 1: think providing more well being programs that work. But I
Speaker 1: also know that employees right now want flexibility. We did
Speaker 1: a survey shocking. I know we're a think tank, but
Speaker 1: sixty five percent of workers said that they beyond a
Speaker 1: competitive salary, flexibility was most important to them. And what
Speaker 1: happened during COVID was that everyone had to adapt, right,
Speaker 1: and it was hard, remember those lockdowns and the quarantines.
Speaker 1: But workers experience more flexibility in their personal lives and
Speaker 1: they want that flexibility.
Speaker 6: I'm going to do a Twitter survey or x survey,
Speaker 6: flexibility or more pay I want to see what people say.
Speaker 6: Robin Ericsson. This was fun, vice president Human Capital for
Speaker 6: the Conference Board, joining us there in Chicago.
Speaker 2: This is the Bloomberg Intelligence podcast, available on apples, Spotify,
Speaker 2: and anywhere else you get your podcasts. Listen live each weekday,
Speaker 2: ten am to noon Eastern on Bloomberg dot com, the
Speaker 2: iHeartRadio app tune In, and the Bloomberg Business app. You
Speaker 2: can also watch us live every weekday on YouTube and
Speaker 2: always on the Bloomberg terminal