WEBVTT - US Services Index Shrinks, Jobs Report, Apple Earnings 0:00:02.920 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.840 --> 0:00:15.000 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.040 --> 0:00:18.760 Eastern on Apocarplay and Android Auto with the Bloomberg Business App. 0:00:18.760 --> 0:00:22.000 Listen on demand wherever you get your podcasts, or watch 0:00:22.079 --> 0:00:24.360 us live on YouTube. 0:00:25.040 --> 0:00:26.759 The S and P is still up one percent, but 0:00:26.800 --> 0:00:28.280 if you take a look at an inter date chart, 0:00:28.320 --> 0:00:31.040 it is a nice straight line down after we got 0:00:31.040 --> 0:00:34.400 that ism services number, Paul, when you have prices paid 0:00:34.479 --> 0:00:38.080 higher in next slipping below fifty and that employment number 0:00:38.120 --> 0:00:41.120 coming in at forty five point nine for the service sector, 0:00:41.120 --> 0:00:43.600 which does echo what we saw in terms of hospitality 0:00:43.720 --> 0:00:46.560 jobs and sort of the meager edition that we saw 0:00:46.640 --> 0:00:47.720 in today's jobs report. 0:00:48.080 --> 0:00:50.320 Yeah, I think so. I mean, I think the labor market, 0:00:50.400 --> 0:00:52.760 we had a lot of guests on Bloomberg survants, a 0:00:52.760 --> 0:00:55.280 lot of economists, and I think the consensus kind of 0:00:55.400 --> 0:00:59.040 is still a solid labor market, but just cooling. And 0:00:59.080 --> 0:01:02.520 that's probably all. Maybe the Federal Reserve might need to 0:01:02.560 --> 0:01:04.160 pull maybe rate cut. 0:01:04.440 --> 0:01:06.080 We'll be a little bit forward in a year. 0:01:06.240 --> 0:01:07.840 And if we dot together all the things we learned 0:01:07.880 --> 0:01:11.600 from say bookings and Expedia, et cetera. The kind of 0:01:11.640 --> 0:01:13.959 service economy is starting to slow. So let's get more 0:01:14.080 --> 0:01:17.399 with that. Anthony Javis, he joins us. He is the 0:01:17.400 --> 0:01:20.720 ISM chair Services head. He is the chair of the 0:01:20.760 --> 0:01:23.440 ISM Services Business Committee. Let me get that title right, 0:01:23.520 --> 0:01:27.080 So talk to me about how you understand these numbers. So, 0:01:27.120 --> 0:01:30.039 services and next slipping below forty nine point four, how 0:01:30.040 --> 0:01:31.120 would you describe that? 0:01:33.440 --> 0:01:36.440 Well, what we're seeing here is a pullback in the 0:01:36.560 --> 0:01:42.120 leading indexes that comprise this composite index Business activity fifty 0:01:42.160 --> 0:01:46.360 point nine. That's down six point five percentage points. Still growing, 0:01:46.760 --> 0:01:49.120 but as you said, it's cooling, it's definitely pulled back. 0:01:49.160 --> 0:01:53.200 Some new orders still growing fifty two point two, but 0:01:53.360 --> 0:01:57.000 down two point two percentage points. And the employment market 0:01:57.040 --> 0:02:00.720 continues to be just as this index indicates forty five 0:02:00.760 --> 0:02:04.320 point nine, down two point six percentage points, attributed to 0:02:05.000 --> 0:02:08.040 a combination of things that we've seen in the past ongoing. 0:02:08.600 --> 0:02:12.040 Either they can't find applicable workers for open positions, or 0:02:12.040 --> 0:02:15.840 they're controlling that labor expense. And the last one, supplier 0:02:15.880 --> 0:02:20.000 deliveries continues to be faster due to waning demand as 0:02:20.040 --> 0:02:21.359 well as improved capacity. 0:02:22.480 --> 0:02:25.079 So Anthony, can you kind of give us some context here, 0:02:25.080 --> 0:02:27.480 because context matters, and give us a little sense here 0:02:27.520 --> 0:02:31.880 of the trend here in some of this services data. 0:02:33.480 --> 0:02:34.440 That's a great point. 0:02:34.480 --> 0:02:37.760 This is one month we've contracted here first time since 0:02:37.800 --> 0:02:41.240 December of twenty twenty two. Well, we thought it might 0:02:41.280 --> 0:02:43.640 take a little bit longer to balance back. It came 0:02:43.760 --> 0:02:46.520 right back the following month. Not trying to be the 0:02:46.600 --> 0:02:49.600 consummate optimist here, but again one trend, we're just under 0:02:49.639 --> 0:02:53.280 the baseline. Based on responded comments, they indicate that they 0:02:53.400 --> 0:02:56.560 see the next part of the year that it will 0:02:56.560 --> 0:02:58.560 be some improvements there. So we'll just have to wait 0:02:58.600 --> 0:03:00.919 and see how it trends out over next couple of months. 0:03:02.760 --> 0:03:06.120 Where are the worry spots within all the respondents? Where 0:03:06.160 --> 0:03:06.960 are the weak links? 0:03:08.880 --> 0:03:12.000 Well, it's inflation is a big one. You know, Pricing 0:03:12.120 --> 0:03:17.400 is definitely impacting their various industries and their companies that 0:03:17.480 --> 0:03:21.200 make up this sector, as well as the challenges and employment. 0:03:21.600 --> 0:03:24.119 You know, construction still seems to be an area where 0:03:24.160 --> 0:03:28.720 they can't backfill positions, and you know, geopolitical issues as 0:03:28.720 --> 0:03:31.720 well also is on the forefront of our respondent's minds 0:03:31.800 --> 0:03:32.160 right now. 0:03:32.800 --> 0:03:34.480 All right, great stuff, Anthony, Thank you so much. 0:03:34.560 --> 0:03:36.400 Anthony Avis. I love that you hop on with those. 0:03:36.440 --> 0:03:38.280 We know you have a busy day. He's the chair 0:03:38.280 --> 0:03:39.640 of the Ism Services Index. 0:03:41.160 --> 0:03:45.040 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:03:45.120 --> 0:03:48.640 weekdays at ten am Eastern on applecar Play and Android 0:03:48.680 --> 0:03:51.440 Auto with the Bloomberg Business App. You can also listen 0:03:51.560 --> 0:03:54.680 live on Amazon Alexa from our flagship New York station, 0:03:55.040 --> 0:03:58.520 just say Alexa playing Bloomberg eleven thirty. 0:03:59.440 --> 0:04:01.240 You know there's a luck going on out there in 0:04:01.320 --> 0:04:05.240 the marketplace. Here and again, it's economic data, it's earnings data. 0:04:05.360 --> 0:04:08.360 Henrietta Trez joins his managing partner and director of Economic 0:04:08.400 --> 0:04:12.520 Policy for Veda Partners. I believe from Zoom, I mean 0:04:12.560 --> 0:04:16.920 from Louisiana via Zoom. Hey, Henrietta, what do you make 0:04:16.920 --> 0:04:19.599 of this job's report? I mean, to what extent is 0:04:19.640 --> 0:04:22.120 this labor market cooling? In your mind? 0:04:22.960 --> 0:04:24.960 Well, first of all, I have to just say, the 0:04:25.000 --> 0:04:27.440 Stones played last night the jazz Fest down in New Orleans. 0:04:27.480 --> 0:04:28.560 So y'all just all that down. 0:04:28.760 --> 0:04:32.360 Oh fantastic, It'll be going all weekend, so can't wait. 0:04:32.920 --> 0:04:36.000 But no, the jobs number continues to be really I 0:04:36.000 --> 0:04:40.000 think just a goldilocks moment the market participants are focused 0:04:40.040 --> 0:04:43.760 on FED interest rate cuts, and this reignited opportunities and 0:04:43.800 --> 0:04:47.000 sort of optimism for a FED rate cut in September, 0:04:47.240 --> 0:04:49.839 which is a market difference from just earlier this week, 0:04:49.960 --> 0:04:51.880 and expectations for the last couple of weeks. I've been 0:04:51.920 --> 0:04:54.000 pushing it out till November or even next year, or 0:04:54.040 --> 0:04:56.200 even say that there could be a FED hike. So 0:04:56.279 --> 0:04:58.760 I think this job's number, while slightly lower than it 0:04:58.800 --> 0:05:00.600 has been in the last couple of months, I. 0:05:00.560 --> 0:05:03.839 Mean, continues this ridiculous trend. 0:05:03.680 --> 0:05:06.880 Of some four percent unemployment, which is full employment in 0:05:06.920 --> 0:05:09.680 the United States and really just paints the picture of 0:05:09.760 --> 0:05:14.080 a very robust, strong economy that is the longest running 0:05:14.080 --> 0:05:15.240 since the nineteen sixties. 0:05:15.400 --> 0:05:18.080 So I think it's sort of a perfect number, to 0:05:18.080 --> 0:05:18.560 be honest. 0:05:18.920 --> 0:05:21.400 How fast, though, can the job market cool? 0:05:21.880 --> 0:05:24.000 Someone pointed out on m Live, which is the great 0:05:24.000 --> 0:05:26.080 sort of blog that we do here at Bloomberg, that 0:05:26.200 --> 0:05:29.880 health and private education excluding public school teachers, accounted for 0:05:29.920 --> 0:05:32.040 over half of the entire gain and payroll, so if 0:05:32.080 --> 0:05:34.600 you back that out, it was actually a lot weaker. 0:05:34.680 --> 0:05:36.960 And so I'm wondering how fast we can cool here. 0:05:38.160 --> 0:05:42.400 I mean, I think that the ridiculous strength in job 0:05:42.440 --> 0:05:44.240 growth for the last couple of months. It's just been 0:05:44.279 --> 0:05:46.839 blowing out expectations. It's almost like where were those jobs 0:05:46.880 --> 0:05:49.040 even coming from. It's hard to sort of wrap your 0:05:49.040 --> 0:05:52.719 head around those numbers so consistently for what is it, 0:05:52.760 --> 0:05:53.400 twenty four. 0:05:53.240 --> 0:05:53.960 Months or something. 0:05:55.120 --> 0:05:57.920 I think that this job's number reflects more of a reality. 0:05:58.600 --> 0:06:01.840 I saw the same post, you know, some similar comments 0:06:01.880 --> 0:06:04.800 about the weather over the winter period, maybe just bringing 0:06:04.800 --> 0:06:07.720 this back down to earth, and I think it reflects, 0:06:07.760 --> 0:06:11.279 you know, a very strong economy that really doesn't have 0:06:11.360 --> 0:06:13.760 much room to continue growing jobs the way that it 0:06:13.760 --> 0:06:14.160 has been. 0:06:14.880 --> 0:06:17.239 All Right, So I guess when we combine this jobs 0:06:17.279 --> 0:06:19.680 print today, Henriette, with what we heard from FED Chairman 0:06:19.760 --> 0:06:22.440 J Powell earlier in the week, does this kind of 0:06:23.040 --> 0:06:24.960 alter the way you think about how the FED may 0:06:25.000 --> 0:06:27.120 proceed for the remainder of the year in terms of 0:06:27.240 --> 0:06:28.239 perhaps cutting rates. 0:06:29.440 --> 0:06:31.520 You know, I don't subscribe to the theory that the 0:06:31.720 --> 0:06:33.560 FED is politically motivated. 0:06:33.680 --> 0:06:34.440 I know a lot of. 0:06:34.400 --> 0:06:37.640 Investors are in that headspace, but you know, I've worked 0:06:37.640 --> 0:06:40.599 with Federal Reserve folks for many years, going back to 0:06:40.600 --> 0:06:42.960 when I was in the Senate and here and work 0:06:43.000 --> 0:06:46.560 with many of the former FED chairs, former FED employees now, 0:06:47.000 --> 0:06:49.039 and I think the understanding that they are not a 0:06:49.040 --> 0:06:52.279 political animal is something that Jay Powell tries to relay 0:06:52.480 --> 0:06:54.640 over and over and over again, as you did on Wednesday. 0:06:55.120 --> 0:06:57.720 But you know, investors don't necessarily all want to hear that. 0:06:58.120 --> 0:07:01.240 I think that if the FED feels it to contain 0:07:01.360 --> 0:07:05.520 inflation and keep its dual mandate going, they will cut 0:07:05.760 --> 0:07:07.400 as needed. I mean, one of the things that I'd 0:07:07.400 --> 0:07:09.000 point out is that we have elections in the United 0:07:09.000 --> 0:07:11.400 States all the time. Granted they're only every four years 0:07:11.400 --> 0:07:14.480 of presidential election cycle, but we've got generals, We've got 0:07:14.520 --> 0:07:18.200 different elections across individual states, constitutional referendums. 0:07:18.200 --> 0:07:19.640 I mean, this happens all the time. 0:07:19.920 --> 0:07:22.760 So to assume that the FED is somehow not going 0:07:22.800 --> 0:07:27.360 to cut from you know, July to November because the election, 0:07:27.800 --> 0:07:29.920 that's a big swath of time that they're just going 0:07:29.960 --> 0:07:34.560 to let the economy run. 0:07:32.840 --> 0:07:36.160 Unregulated, you know, that's not really how they operate. 0:07:36.240 --> 0:07:38.520 And so I would just encourage folks to say, if 0:07:38.560 --> 0:07:41.040 they do need to cut, they will, and I think 0:07:41.080 --> 0:07:44.520 they'll do that x any political considerations. One more thing 0:07:44.560 --> 0:07:47.200 I'd add is that there's this view that if they 0:07:47.240 --> 0:07:50.200 don't cut in March or April or even June, then 0:07:50.240 --> 0:07:53.040 they can't come in and cut in September. I've read 0:07:53.080 --> 0:07:56.240 that repeatedly from investors and the idea of being it'll 0:07:56.280 --> 0:08:00.720 look to partisan, too politically oriented, and I disagree with that. 0:08:00.760 --> 0:08:03.440 But it's interesting to see the market move since Wednesday 0:08:03.480 --> 0:08:05.560 and today's jobs report. Now there all of a sudden 0:08:05.600 --> 0:08:08.440 pricing in cuts again in September, so it seems to 0:08:08.480 --> 0:08:10.520 vacillate quite a bit. And I just point that out. 0:08:10.520 --> 0:08:13.080 So it's an interesting dynamic from investor perspective. 0:08:13.240 --> 0:08:15.120 Yeah, I mean even before this is already happening, they 0:08:15.120 --> 0:08:17.760 had that article last Friday right about potentially the Trump 0:08:17.760 --> 0:08:21.600 campaign talking about eroding that independence regardless, So there's that. 0:08:21.840 --> 0:08:22.640 Before I let you go. 0:08:24.160 --> 0:08:27.960 The way labor market slows, When could we be in 0:08:28.880 --> 0:08:32.640 a higher unemployment environment in this election cycle. 0:08:34.280 --> 0:08:36.240 I mean, I think to your earlier point, it could 0:08:36.240 --> 0:08:37.120 happen pretty quickly. 0:08:37.720 --> 0:08:39.280 You know, it's only a three point nine now, it 0:08:39.280 --> 0:08:41.480 wouldn't take much to take up to four four point one. 0:08:42.160 --> 0:08:45.120 And I think the revisions are something to watch certainly 0:08:45.240 --> 0:08:48.559 as well. And as we get into the summer months, 0:08:48.760 --> 0:08:52.199 you talked about school teachers. I think that there's opportunity 0:08:52.240 --> 0:08:54.720 for change and they can imagine us being higher than 0:08:54.720 --> 0:08:57.360 four percent come election day without question. 0:08:58.200 --> 0:09:00.440 All right, Henriette, thank you so much for joining us. 0:09:00.480 --> 0:09:03.920 Henrietta trees A Managing partner and director of Economic polse 0:09:04.040 --> 0:09:05.600 at Veda Partners. 0:09:07.080 --> 0:09:11.000 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:09:11.080 --> 0:09:14.400 weekdays at ten am Eastern on Afocarplay and Android Auto 0:09:14.480 --> 0:09:17.400 with the Bloomberg Business App. Listen on demand wherever you 0:09:17.480 --> 0:09:21.640 get your podcasts, or watch us live on YouTube. 0:09:21.960 --> 0:09:26.160 I'm Alex Steele alongside Paul Sweeney. This is Bloomberg Intelligence Radio, 0:09:26.320 --> 0:09:29.080 where we bring you all the economic and financial news 0:09:29.160 --> 0:09:29.960 that you need to know. 0:09:30.280 --> 0:09:31.120 With our great. 0:09:30.880 --> 0:09:34.160 Bloomberg Intelligence analysts, they cover two thousand companies and one 0:09:34.240 --> 0:09:36.840 hundred and thirty industries. We also venture outside of that 0:09:36.920 --> 0:09:39.199 and talk to some really great investors who have their 0:09:39.200 --> 0:09:41.520 pulse on the market. I can really understand how to 0:09:41.559 --> 0:09:44.240 position your portfolio for the next couple decades. 0:09:44.280 --> 0:09:44.520 Really. 0:09:44.559 --> 0:09:46.800 Carol Pepper is one of them, founder and CEO of 0:09:46.840 --> 0:09:51.200 Pepper International. She joins us now from New York City. Carol, 0:09:51.280 --> 0:09:54.239 the market seems to be taking the report is goldilocks. 0:09:54.480 --> 0:09:56.400 Im services number might have put a little bit of 0:09:56.440 --> 0:09:58.720 dent in that, but either way, does this give you 0:09:58.840 --> 0:10:01.040 confidence to the market. 0:10:02.160 --> 0:10:04.240 Yes, I mean I think we are in a very 0:10:04.320 --> 0:10:08.040 nice sweet spot. I'm not necessarily want to buy the market. 0:10:08.160 --> 0:10:10.920 We look at sectors and see where the growth is 0:10:10.960 --> 0:10:12.960 going to be. So, as you know, I'm a big 0:10:13.040 --> 0:10:15.600 tech bull for the long term. I think you buy 0:10:15.640 --> 0:10:19.480 tech on fear days and the United States really leads 0:10:19.480 --> 0:10:23.640 in technology and innovation and artificial intelligence, and those sectors 0:10:23.679 --> 0:10:26.080 of the magnificent six if you will, out of seven 0:10:26.520 --> 0:10:29.400 are really powering the market forward and we'll continue to 0:10:29.480 --> 0:10:32.440 do so. I think it looks likely that you know, 0:10:32.480 --> 0:10:35.000 the FED will ease at some point this year, and 0:10:35.040 --> 0:10:37.680 that's very good for growth stocks. So I'm in a 0:10:37.679 --> 0:10:39.040 happy place with the report. 0:10:39.760 --> 0:10:42.440 What did you make of that Apple print we saw 0:10:42.520 --> 0:10:44.960 last night after the clothes What are your takeaways? 0:10:45.840 --> 0:10:48.800 Well, I just think again it's you know, everybody wants 0:10:48.800 --> 0:10:51.480 to keep counting tech out because they missed the rally. 0:10:51.520 --> 0:10:54.160 And what I tell everybody is you can't time when 0:10:54.160 --> 0:10:56.280 all the good news will come in. So things are 0:10:56.360 --> 0:10:59.280 looking up for Apple. You just have to get in 0:10:59.320 --> 0:11:01.600 there hold your knows. If you're a value investor and 0:11:01.640 --> 0:11:04.520 you think everything's overpriced, because it's not. If you have 0:11:04.600 --> 0:11:07.120 a long term time horizon, as you know, I manage 0:11:07.120 --> 0:11:10.680 money for family offices, generally people with over one hundred 0:11:10.720 --> 0:11:13.120 million dollars, and we make long term bets. And the 0:11:13.160 --> 0:11:16.440 long term bet to make right now are the Magnificent six. 0:11:16.520 --> 0:11:18.240 I leave out Tesla because I think they have a 0:11:18.280 --> 0:11:20.480 lot of problems, but if you look at all the 0:11:20.520 --> 0:11:22.800 other stocks these are this is a good basket. Or 0:11:22.840 --> 0:11:25.160 if you can't buy all the stocks individually, you can 0:11:25.160 --> 0:11:29.320 look at QQQ, get a broad based of American technology 0:11:29.400 --> 0:11:33.640 exposure and global technology exposure, and set it and forget it, 0:11:33.760 --> 0:11:37.880 you know, and you will see continuing upside surprises. Sometimes 0:11:37.920 --> 0:11:40.120 we'll miss the quarter. Look at what Microsoft just did. 0:11:40.120 --> 0:11:43.120 They're reinvesting to buy more AI. So the earnings might 0:11:43.160 --> 0:11:45.280 be down for a quarter, but that is only going 0:11:45.320 --> 0:11:47.960 to translate into double the earnings two quarters later. So 0:11:48.080 --> 0:11:50.920 you can't just go, you know, month to month and 0:11:51.040 --> 0:11:53.040 say it uperates down. You have to make some long 0:11:53.120 --> 0:11:54.880 term bets if you want to make money over the 0:11:54.920 --> 0:11:55.560 long term. 0:11:56.080 --> 0:11:58.880 So if I'm hearing you right, you're saying buy on 0:11:59.040 --> 0:12:03.679 fear Big ten because it's a good value value plus tech. 0:12:05.080 --> 0:12:08.360 Yes, it is the real value. The real value today 0:12:08.400 --> 0:12:10.960 is not the value stocks. The real value today or 0:12:11.000 --> 0:12:13.680 the big tech stocks because they have the balance sheet, 0:12:13.720 --> 0:12:16.959 they have the cash, and they're leading the entire country. 0:12:17.000 --> 0:12:20.920 Because their technologies will impact every single other industry in 0:12:20.920 --> 0:12:24.559 this country. AI is going to touch everything. So if 0:12:24.559 --> 0:12:26.560 you really want to make long term money, if you 0:12:26.559 --> 0:12:29.880 want to fund your retirement or your kids education, put 0:12:29.920 --> 0:12:32.400 money in tech and leave it there. Don't try to 0:12:32.440 --> 0:12:35.559 trade it daily. It's very hard to guess which quarter 0:12:35.800 --> 0:12:37.800 the yearnings are going to pop up when people are 0:12:37.840 --> 0:12:39.520 going to be more or less fearful. But when they 0:12:39.520 --> 0:12:42.080 are fearful like there were a few days ago, that's 0:12:42.120 --> 0:12:43.160 when you jump in and buy. 0:12:44.480 --> 0:12:46.320 So, Carol, what do you think about healthcare here? And 0:12:46.320 --> 0:12:48.320 recently I asked us, I'm looking at Amgen here. Here's 0:12:48.320 --> 0:12:49.920 a company with the one hundred and sixty billion dollar 0:12:49.960 --> 0:12:54.080 market cap company up twelve percent, and it seems like 0:12:54.760 --> 0:12:56.680 in the healthcare space, if you could talk about a 0:12:56.720 --> 0:12:59.480 GLP into your portfolio, it's kind of like saying you 0:12:59.559 --> 0:13:01.960 got a eye exposure in technology kind of works. 0:13:01.960 --> 0:13:02.840 How do you think about. 0:13:02.600 --> 0:13:06.640 Healthcare, Well, I really think that healthcare right now is 0:13:06.679 --> 0:13:09.800 being driven by the whole weight loss craze, because that 0:13:09.960 --> 0:13:12.480 is a huge trend that's going to keep going up, 0:13:12.520 --> 0:13:15.240 and I do predict that eventually it might take another year. 0:13:15.760 --> 0:13:17.640 We're either going to get pills or we're going to 0:13:17.720 --> 0:13:19.560 get the price of the shots coming way down, and 0:13:19.559 --> 0:13:21.520 that will just bring a flood of new patients into 0:13:21.559 --> 0:13:25.000 the market. So that is a trend that you definitely 0:13:25.000 --> 0:13:26.520 want to jump on. I think for the next four 0:13:26.600 --> 0:13:29.160 or five years. At some point the governments will put 0:13:29.160 --> 0:13:31.560 their foot down and start to mandate lower prices for 0:13:31.640 --> 0:13:35.480 these drugs. But for now, it's definitely a trend that 0:13:35.520 --> 0:13:38.120 will make money for you over the medium term for sure, 0:13:38.200 --> 0:13:40.880 because what most of America is overweight and this is 0:13:40.880 --> 0:13:43.319 a way to help them get their weight under control. 0:13:43.720 --> 0:13:49.240 Yeah, Paul, sitting at this current moment, Carol, before let go, 0:13:49.360 --> 0:13:51.200 what else do you like right now? 0:13:51.240 --> 0:13:52.640 What else do you want to buy on fear? 0:13:54.840 --> 0:13:57.360 Well, I think the main thing is just you know, 0:13:57.640 --> 0:13:59.600 those are my favorite picks. I also think you should 0:13:59.640 --> 0:14:02.120 buy estate, frankly, because real estate is going to come 0:14:02.120 --> 0:14:04.199 back again. You have to be a little bit patient, 0:14:04.800 --> 0:14:06.439 but if you're willing to sit through the summer, you 0:14:06.480 --> 0:14:09.360 can get some beaten up real estate and development stocks 0:14:09.360 --> 0:14:12.240 and home building stocks. Real estate will come roaring back 0:14:12.280 --> 0:14:14.240 the second that the rates come down. The rates aren't 0:14:14.280 --> 0:14:16.199 going to come down. Do we know if it's two 0:14:16.280 --> 0:14:18.240 months or six months. We don't know, but we do 0:14:18.320 --> 0:14:19.720 know we're going to get there. So those of you 0:14:19.760 --> 0:14:22.960 who loved a bargain, look into the real estate sector 0:14:23.040 --> 0:14:25.760 right now. Look at home builders and people like that. 0:14:25.760 --> 0:14:28.160 That's really a place where you're going to be able 0:14:28.160 --> 0:14:30.760 to get in there early and patch yourself in the 0:14:30.760 --> 0:14:32.920 back when the rest of the world catches on your 0:14:33.000 --> 0:14:34.240 trend that you got in early. 0:14:35.320 --> 0:14:36.840 All right, Carol, thank you so much for joining us. 0:14:36.880 --> 0:14:40.200 Kyle Pepper, she's a founder and CEO of Pepper International, 0:14:40.280 --> 0:14:43.720 joining us from New York City via zoom Here. 0:14:45.960 --> 0:14:49.840 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:14:49.920 --> 0:14:53.440 weekdays at ten am Eastern on applecar Play and Android 0:14:53.480 --> 0:14:56.280 Auto with the Bloomberg Business Act. You can also listen 0:14:56.360 --> 0:14:59.480 live on Amazon Alexa from our flagship New York station 0:15:00.120 --> 0:15:02.200 Alexa playing Bloomberg eleven. 0:15:04.400 --> 0:15:06.240 Let's get back to that labor data, because that is 0:15:06.280 --> 0:15:10.120 certainly the big play here for the markets here. We 0:15:10.120 --> 0:15:12.360 want to always like to chat with Tom Gimble. Tom 0:15:12.480 --> 0:15:16.080 is the founder and CEO LASAL Networks. Tom, talk to 0:15:16.160 --> 0:15:18.640 us about this number here, A little bit a slowdown 0:15:18.800 --> 0:15:22.000 in hiring, but still a pretty healthy number. What's your perspective. 0:15:22.960 --> 0:15:24.880 I tell you, I'm not sure that it's not actually 0:15:24.920 --> 0:15:27.160 a better number than people think. If you look at 0:15:27.200 --> 0:15:31.360 how small the government hiring was, all right, break it 0:15:31.400 --> 0:15:34.520 down for you. So we've been averaging. Government's been averaging 0:15:34.560 --> 0:15:37.000 about fifty five thousand jobs a month. This month it 0:15:37.120 --> 0:15:40.280 was eight thousand. So when you look at the percentage 0:15:40.320 --> 0:15:43.560 of non government jobs added, this was one of the 0:15:43.560 --> 0:15:44.800 better months. 0:15:44.840 --> 0:15:46.120 Interesting because it I heard that. 0:15:46.200 --> 0:15:48.760 So then why is the Why is the rhetoric like, ooh, 0:15:48.800 --> 0:15:51.360 if you back that out, the overall number wasn't that great? 0:15:52.840 --> 0:15:57.080 Oh, because economists are depressing people. I think that. I 0:15:57.240 --> 0:16:02.040 think that that in reality, you know, the as we 0:16:02.080 --> 0:16:05.800 talk about every week, adding jobs is better than losing jobs. 0:16:05.840 --> 0:16:09.320 So the economy is good. I think where we have 0:16:09.720 --> 0:16:13.560 a problem that everybody knows about is inflation. And for 0:16:13.640 --> 0:16:19.960 some reason we've got cost of things going up, stock 0:16:20.040 --> 0:16:22.680 market going up, but it's being driven by by a 0:16:22.720 --> 0:16:24.840 few of you know, the Magnificent seven and all that 0:16:24.880 --> 0:16:28.280 good stuff. And then we're sitting here looking at at 0:16:28.560 --> 0:16:33.120 at people working, and the labor market is healthy. Now 0:16:33.200 --> 0:16:35.480 what we're seeing is a lot of the jobs are 0:16:35.520 --> 0:16:41.040 in healthcare, and they're in hospitality, and they're in construction, 0:16:41.720 --> 0:16:45.000 and so those are a lot of hourly jobs. They're 0:16:45.040 --> 0:16:47.560 not the highest earning jobs. And we're seeing a little 0:16:47.600 --> 0:16:52.479 bit of white collar stalling in the hiring side. 0:16:52.720 --> 0:16:56.600 So, Tom, it's early May. It means kids are gonna 0:16:56.600 --> 0:16:57.800 start graduating from college. 0:16:58.080 --> 0:17:03.400 What's that job market look like. It's there. It's there, 0:17:03.440 --> 0:17:06.280 It's just not as healthy as it was. And what 0:17:06.320 --> 0:17:10.439 I mean by that is it's the jobs aren't going 0:17:10.520 --> 0:17:11.720 to be if you want, you know, a lot of kids, 0:17:11.760 --> 0:17:13.280 oh I want to work remote, I want to work 0:17:13.320 --> 0:17:15.359 from here, that you're gonna have to go into an office. 0:17:15.440 --> 0:17:18.440 I think for a lot of the jobs. Number one, 0:17:18.920 --> 0:17:21.360 Number two, the salaries aren't going to be as high 0:17:21.440 --> 0:17:26.240 starting salaries as they have been historically for recent college graduates. 0:17:27.080 --> 0:17:29.400 And number three, you're not going to see as high 0:17:29.400 --> 0:17:32.720 a volume of hiring at companies, so you might not 0:17:32.840 --> 0:17:35.000 get the company that you want or the job you 0:17:35.119 --> 0:17:37.639 think you want, but there are jobs available. 0:17:38.000 --> 0:17:41.240 Do you what sectors do you still feel like are 0:17:41.520 --> 0:17:44.720 pretty strong? I anecdotally was speaking to a friend of 0:17:44.720 --> 0:17:46.520 mine who's pretty high up in the tech sector on 0:17:46.560 --> 0:17:49.800 the data side, and she is just like, I can't. 0:17:49.920 --> 0:17:51.720 It's really hard to get a job, and there's been 0:17:51.720 --> 0:17:53.879 so many rounds of layoffs over the last year and 0:17:53.920 --> 0:17:56.959 a half or so that there's a plethora of people 0:17:57.080 --> 0:17:59.919 trying to get in on the same jobs. At this point, 0:18:00.920 --> 0:18:03.400 where are the jobs where they're not talk us through 0:18:03.400 --> 0:18:04.199 all the dynamics. 0:18:04.800 --> 0:18:07.719 Yeah, so I think the real challenge is where were 0:18:07.840 --> 0:18:09.640 I think things are going to move over the course 0:18:09.640 --> 0:18:13.879 of the next couple of years. Is less industry and 0:18:14.000 --> 0:18:20.080 more skill set. Meaning technology might not be hiring, meaning 0:18:20.240 --> 0:18:23.840 big tech companies, but people who do sales may be 0:18:23.920 --> 0:18:27.160 getting hiring, and people who do development or product maybe 0:18:27.200 --> 0:18:30.120 getting hired, but they're not hiring in marketing or HR. 0:18:30.560 --> 0:18:32.720 So I think it's more of what your skill set 0:18:32.880 --> 0:18:37.600 is versus the overall industries. Right, so, healthcare may be stalling. 0:18:37.720 --> 0:18:39.760 We don't there the nurse shortages at what it was 0:18:39.920 --> 0:18:44.520 three years ago. However, they're hiring a ton of doctors 0:18:44.560 --> 0:18:47.600 and they're hiring a ton of of medical records people. 0:18:47.680 --> 0:18:49.560 As they move to AI, they still need to get 0:18:49.600 --> 0:18:54.119 the work done. So it's really in the roles versus 0:18:54.320 --> 0:18:57.080 the industries. But if I could wave a wand and 0:18:57.160 --> 0:18:59.359 give myself a skill set, it would be in security. 0:18:59.520 --> 0:19:03.119 In technology security. You guys see the hacks that Microsoft 0:19:03.200 --> 0:19:05.560 had a couple months ago, and there's a new one 0:19:05.600 --> 0:19:08.560 every week or every month coming out. And if somebody 0:19:08.920 --> 0:19:13.240 is really talented in the cyber security space, that ain't 0:19:13.280 --> 0:19:13.840 going anywhere. 0:19:14.440 --> 0:19:18.240 Hey, Tom, I wonder from your perspective how the influx 0:19:18.359 --> 0:19:21.480 of immigrants, legal and illegal into this country and a 0:19:21.560 --> 0:19:24.119 surge it's been, how does that impact A lot of 0:19:24.160 --> 0:19:26.200 folks are saying that's been a net positive for the 0:19:26.280 --> 0:19:28.320 labor market in the economy. What do you see from 0:19:28.359 --> 0:19:28.960 your perspective. 0:19:29.560 --> 0:19:32.720 I don't necessarily see that yet, So I think on 0:19:32.840 --> 0:19:36.600 the legal side, the problem with the layman, as you 0:19:36.760 --> 0:19:41.600 guys know, is people think that coming in is purely 0:19:41.720 --> 0:19:45.639 south of the border for immigration, and legal immigration is 0:19:46.160 --> 0:19:48.080