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Speaker 2: The S and P is still up one percent, but
Speaker 2: if you take a look at an inter date chart,
Speaker 2: it is a nice straight line down after we got
Speaker 2: that ism services number, Paul, when you have prices paid
Speaker 2: higher in next slipping below fifty and that employment number
Speaker 2: coming in at forty five point nine for the service sector,
Speaker 2: which does echo what we saw in terms of hospitality
Speaker 2: jobs and sort of the meager edition that we saw
Speaker 2: in today's jobs report.
Speaker 3: Yeah, I think so. I mean, I think the labor market,
Speaker 3: we had a lot of guests on Bloomberg survants, a
Speaker 3: lot of economists, and I think the consensus kind of
Speaker 3: is still a solid labor market, but just cooling. And
Speaker 3: that's probably all. Maybe the Federal Reserve might need to
Speaker 3: pull maybe rate cut.
Speaker 4: We'll be a little bit forward in a year.
Speaker 2: And if we dot together all the things we learned
Speaker 2: from say bookings and Expedia, et cetera. The kind of
Speaker 2: service economy is starting to slow. So let's get more
Speaker 2: with that. Anthony Javis, he joins us. He is the
Speaker 2: ISM chair Services head. He is the chair of the
Speaker 2: ISM Services Business Committee. Let me get that title right,
Speaker 2: So talk to me about how you understand these numbers. So,
Speaker 2: services and next slipping below forty nine point four, how
Speaker 2: would you describe that?
Speaker 5: Well, what we're seeing here is a pullback in the
Speaker 5: leading indexes that comprise this composite index Business activity fifty
Speaker 5: point nine. That's down six point five percentage points. Still growing,
Speaker 5: but as you said, it's cooling, it's definitely pulled back.
Speaker 5: Some new orders still growing fifty two point two, but
Speaker 5: down two point two percentage points. And the employment market
Speaker 5: continues to be just as this index indicates forty five
Speaker 5: point nine, down two point six percentage points, attributed to
Speaker 5: a combination of things that we've seen in the past ongoing.
Speaker 5: Either they can't find applicable workers for open positions, or
Speaker 5: they're controlling that labor expense. And the last one, supplier
Speaker 5: deliveries continues to be faster due to waning demand as
Speaker 5: well as improved capacity.
Speaker 3: So Anthony, can you kind of give us some context here,
Speaker 3: because context matters, and give us a little sense here
Speaker 3: of the trend here in some of this services data.
Speaker 6: That's a great point.
Speaker 5: This is one month we've contracted here first time since
Speaker 5: December of twenty twenty two. Well, we thought it might
Speaker 5: take a little bit longer to balance back. It came
Speaker 5: right back the following month. Not trying to be the
Speaker 5: consummate optimist here, but again one trend, we're just under
Speaker 5: the baseline. Based on responded comments, they indicate that they
Speaker 5: see the next part of the year that it will
Speaker 5: be some improvements there. So we'll just have to wait
Speaker 5: and see how it trends out over next couple of months.
Speaker 2: Where are the worry spots within all the respondents? Where
Speaker 2: are the weak links?
Speaker 5: Well, it's inflation is a big one. You know, Pricing
Speaker 5: is definitely impacting their various industries and their companies that
Speaker 5: make up this sector, as well as the challenges and employment.
Speaker 5: You know, construction still seems to be an area where
Speaker 5: they can't backfill positions, and you know, geopolitical issues as
Speaker 5: well also is on the forefront of our respondent's minds
Speaker 5: right now.
Speaker 7: All right, great stuff, Anthony, Thank you so much.
Speaker 2: Anthony Avis. I love that you hop on with those.
Speaker 2: We know you have a busy day. He's the chair
Speaker 2: of the Ism Services Index.
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Speaker 3: You know there's a luck going on out there in
Speaker 3: the marketplace. Here and again, it's economic data, it's earnings data.
Speaker 3: Henrietta Trez joins his managing partner and director of Economic
Speaker 3: Policy for Veda Partners. I believe from Zoom, I mean
Speaker 3: from Louisiana via Zoom. Hey, Henrietta, what do you make
Speaker 3: of this job's report? I mean, to what extent is
Speaker 3: this labor market cooling? In your mind?
Speaker 8: Well, first of all, I have to just say, the
Speaker 8: Stones played last night the jazz Fest down in New Orleans.
Speaker 9: So y'all just all that down.
Speaker 8: Oh fantastic, It'll be going all weekend, so can't wait.
Speaker 8: But no, the jobs number continues to be really I
Speaker 8: think just a goldilocks moment the market participants are focused
Speaker 8: on FED interest rate cuts, and this reignited opportunities and
Speaker 8: sort of optimism for a FED rate cut in September,
Speaker 8: which is a market difference from just earlier this week,
Speaker 8: and expectations for the last couple of weeks. I've been
Speaker 8: pushing it out till November or even next year, or
Speaker 8: even say that there could be a FED hike. So
Speaker 8: I think this job's number, while slightly lower than it
Speaker 8: has been in the last couple of months, I.
Speaker 9: Mean, continues this ridiculous trend.
Speaker 8: Of some four percent unemployment, which is full employment in
Speaker 8: the United States and really just paints the picture of
Speaker 8: a very robust, strong economy that is the longest running
Speaker 8: since the nineteen sixties.
Speaker 9: So I think it's sort of a perfect number, to
Speaker 9: be honest.
Speaker 7: How fast, though, can the job market cool?
Speaker 2: Someone pointed out on m Live, which is the great
Speaker 2: sort of blog that we do here at Bloomberg, that
Speaker 2: health and private education excluding public school teachers, accounted for
Speaker 2: over half of the entire gain and payroll, so if
Speaker 2: you back that out, it was actually a lot weaker.
Speaker 2: And so I'm wondering how fast we can cool here.
Speaker 8: I mean, I think that the ridiculous strength in job
Speaker 8: growth for the last couple of months. It's just been
Speaker 8: blowing out expectations. It's almost like where were those jobs
Speaker 8: even coming from. It's hard to sort of wrap your
Speaker 8: head around those numbers so consistently for what is it,
Speaker 8: twenty four.
Speaker 9: Months or something.
Speaker 8: I think that this job's number reflects more of a reality.
Speaker 8: I saw the same post, you know, some similar comments
Speaker 8: about the weather over the winter period, maybe just bringing
Speaker 8: this back down to earth, and I think it reflects,
Speaker 8: you know, a very strong economy that really doesn't have
Speaker 8: much room to continue growing jobs the way that it
Speaker 8: has been.
Speaker 3: All Right, So I guess when we combine this jobs
Speaker 3: print today, Henriette, with what we heard from FED Chairman
Speaker 3: J Powell earlier in the week, does this kind of
Speaker 3: alter the way you think about how the FED may
Speaker 3: proceed for the remainder of the year in terms of
Speaker 3: perhaps cutting rates.
Speaker 8: You know, I don't subscribe to the theory that the
Speaker 8: FED is politically motivated.
Speaker 6: I know a lot of.
Speaker 8: Investors are in that headspace, but you know, I've worked
Speaker 8: with Federal Reserve folks for many years, going back to
Speaker 8: when I was in the Senate and here and work
Speaker 8: with many of the former FED chairs, former FED employees now,
Speaker 8: and I think the understanding that they are not a
Speaker 8: political animal is something that Jay Powell tries to relay
Speaker 8: over and over and over again, as you did on Wednesday.
Speaker 9: But you know, investors don't necessarily all want to hear that.
Speaker 8: I think that if the FED feels it to contain
Speaker 8: inflation and keep its dual mandate going, they will cut
Speaker 8: as needed. I mean, one of the things that I'd
Speaker 8: point out is that we have elections in the United
Speaker 8: States all the time. Granted they're only every four years
Speaker 8: of presidential election cycle, but we've got generals, We've got
Speaker 8: different elections across individual states, constitutional referendums.
Speaker 9: I mean, this happens all the time.
Speaker 8: So to assume that the FED is somehow not going
Speaker 8: to cut from you know, July to November because the election,
Speaker 8: that's a big swath of time that they're just going
Speaker 8: to let the economy run.
Speaker 9: Unregulated, you know, that's not really how they operate.
Speaker 8: And so I would just encourage folks to say, if
Speaker 8: they do need to cut, they will, and I think
Speaker 8: they'll do that x any political considerations. One more thing
Speaker 8: I'd add is that there's this view that if they
Speaker 8: don't cut in March or April or even June, then
Speaker 8: they can't come in and cut in September. I've read
Speaker 8: that repeatedly from investors and the idea of being it'll
Speaker 8: look to partisan, too politically oriented, and I disagree with that.
Speaker 8: But it's interesting to see the market move since Wednesday
Speaker 8: and today's jobs report. Now there all of a sudden
Speaker 8: pricing in cuts again in September, so it seems to
Speaker 8: vacillate quite a bit. And I just point that out.
Speaker 8: So it's an interesting dynamic from investor perspective.
Speaker 2: Yeah, I mean even before this is already happening, they
Speaker 2: had that article last Friday right about potentially the Trump
Speaker 2: campaign talking about eroding that independence regardless, So there's that.
Speaker 7: Before I let you go.
Speaker 2: The way labor market slows, When could we be in
Speaker 2: a higher unemployment environment in this election cycle.
Speaker 9: I mean, I think to your earlier point, it could
Speaker 9: happen pretty quickly.
Speaker 8: You know, it's only a three point nine now, it
Speaker 8: wouldn't take much to take up to four four point one.
Speaker 8: And I think the revisions are something to watch certainly
Speaker 8: as well. And as we get into the summer months,
Speaker 8: you talked about school teachers. I think that there's opportunity
Speaker 8: for change and they can imagine us being higher than
Speaker 8: four percent come election day without question.
Speaker 3: All right, Henriette, thank you so much for joining us.
Speaker 3: Henrietta trees A Managing partner and director of Economic polse
Speaker 3: at Veda Partners.
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Speaker 2: I'm Alex Steele alongside Paul Sweeney. This is Bloomberg Intelligence Radio,
Speaker 2: where we bring you all the economic and financial news
Speaker 2: that you need to know.
Speaker 7: With our great.
Speaker 2: Bloomberg Intelligence analysts, they cover two thousand companies and one
Speaker 2: hundred and thirty industries. We also venture outside of that
Speaker 2: and talk to some really great investors who have their
Speaker 2: pulse on the market. I can really understand how to
Speaker 2: position your portfolio for the next couple decades.
Speaker 10: Really.
Speaker 2: Carol Pepper is one of them, founder and CEO of
Speaker 2: Pepper International. She joins us now from New York City. Carol,
Speaker 2: the market seems to be taking the report is goldilocks.
Speaker 2: Im services number might have put a little bit of
Speaker 2: dent in that, but either way, does this give you
Speaker 2: confidence to the market.
Speaker 11: Yes, I mean I think we are in a very
Speaker 11: nice sweet spot. I'm not necessarily want to buy the market.
Speaker 11: We look at sectors and see where the growth is
Speaker 11: going to be. So, as you know, I'm a big
Speaker 11: tech bull for the long term. I think you buy
Speaker 11: tech on fear days and the United States really leads
Speaker 11: in technology and innovation and artificial intelligence, and those sectors
Speaker 11: of the magnificent six if you will, out of seven
Speaker 11: are really powering the market forward and we'll continue to
Speaker 11: do so. I think it looks likely that you know,
Speaker 11: the FED will ease at some point this year, and
Speaker 11: that's very good for growth stocks. So I'm in a
Speaker 11: happy place with the report.
Speaker 3: What did you make of that Apple print we saw
Speaker 3: last night after the clothes What are your takeaways?
Speaker 11: Well, I just think again it's you know, everybody wants
Speaker 11: to keep counting tech out because they missed the rally.
Speaker 11: And what I tell everybody is you can't time when
Speaker 11: all the good news will come in. So things are
Speaker 11: looking up for Apple. You just have to get in
Speaker 11: there hold your knows. If you're a value investor and
Speaker 11: you think everything's overpriced, because it's not. If you have
Speaker 11: a long term time horizon, as you know, I manage
Speaker 11: money for family offices, generally people with over one hundred
Speaker 11: million dollars, and we make long term bets. And the
Speaker 11: long term bet to make right now are the Magnificent six.
Speaker 11: I leave out Tesla because I think they have a
Speaker 11: lot of problems, but if you look at all the
Speaker 11: other stocks these are this is a good basket. Or
Speaker 11: if you can't buy all the stocks individually, you can
Speaker 11: look at QQQ, get a broad based of American technology
Speaker 11: exposure and global technology exposure, and set it and forget it,
Speaker 11: you know, and you will see continuing upside surprises. Sometimes
Speaker 11: we'll miss the quarter. Look at what Microsoft just did.
Speaker 11: They're reinvesting to buy more AI. So the earnings might
Speaker 11: be down for a quarter, but that is only going
Speaker 11: to translate into double the earnings two quarters later. So
Speaker 11: you can't just go, you know, month to month and
Speaker 11: say it uperates down. You have to make some long
Speaker 11: term bets if you want to make money over the
Speaker 11: long term.
Speaker 2: So if I'm hearing you right, you're saying buy on
Speaker 2: fear Big ten because it's a good value value plus tech.
Speaker 11: Yes, it is the real value. The real value today
Speaker 11: is not the value stocks. The real value today or
Speaker 11: the big tech stocks because they have the balance sheet,
Speaker 11: they have the cash, and they're leading the entire country.
Speaker 11: Because their technologies will impact every single other industry in
Speaker 11: this country. AI is going to touch everything. So if
Speaker 11: you really want to make long term money, if you
Speaker 11: want to fund your retirement or your kids education, put
Speaker 11: money in tech and leave it there. Don't try to
Speaker 11: trade it daily. It's very hard to guess which quarter
Speaker 11: the yearnings are going to pop up when people are
Speaker 11: going to be more or less fearful. But when they
Speaker 11: are fearful like there were a few days ago, that's
Speaker 11: when you jump in and buy.
Speaker 3: So, Carol, what do you think about healthcare here? And
Speaker 3: recently I asked us, I'm looking at Amgen here. Here's
Speaker 3: a company with the one hundred and sixty billion dollar
Speaker 3: market cap company up twelve percent, and it seems like
Speaker 3: in the healthcare space, if you could talk about a
Speaker 3: GLP into your portfolio, it's kind of like saying you
Speaker 3: got a eye exposure in technology kind of works.
Speaker 4: How do you think about.
Speaker 11: Healthcare, Well, I really think that healthcare right now is
Speaker 11: being driven by the whole weight loss craze, because that
Speaker 11: is a huge trend that's going to keep going up,
Speaker 11: and I do predict that eventually it might take another year.
Speaker 11: We're either going to get pills or we're going to
Speaker 11: get the price of the shots coming way down, and
Speaker 11: that will just bring a flood of new patients into
Speaker 11: the market. So that is a trend that you definitely
Speaker 11: want to jump on. I think for the next four
Speaker 11: or five years. At some point the governments will put
Speaker 11: their foot down and start to mandate lower prices for
Speaker 11: these drugs. But for now, it's definitely a trend that
Speaker 11: will make money for you over the medium term for sure,
Speaker 11: because what most of America is overweight and this is
Speaker 11: a way to help them get their weight under control.
Speaker 2: Yeah, Paul, sitting at this current moment, Carol, before let go,
Speaker 2: what else do you like right now?
Speaker 7: What else do you want to buy on fear?
Speaker 11: Well, I think the main thing is just you know,
Speaker 11: those are my favorite picks. I also think you should
Speaker 11: buy estate, frankly, because real estate is going to come
Speaker 11: back again. You have to be a little bit patient,
Speaker 11: but if you're willing to sit through the summer, you
Speaker 11: can get some beaten up real estate and development stocks
Speaker 11: and home building stocks. Real estate will come roaring back
Speaker 11: the second that the rates come down. The rates aren't
Speaker 11: going to come down. Do we know if it's two
Speaker 11: months or six months. We don't know, but we do
Speaker 11: know we're going to get there. So those of you
Speaker 11: who loved a bargain, look into the real estate sector
Speaker 11: right now. Look at home builders and people like that.
Speaker 11: That's really a place where you're going to be able
Speaker 11: to get in there early and patch yourself in the
Speaker 11: back when the rest of the world catches on your
Speaker 11: trend that you got in early.
Speaker 3: All right, Carol, thank you so much for joining us.
Speaker 3: Kyle Pepper, she's a founder and CEO of Pepper International,
Speaker 3: joining us from New York City via zoom Here.
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Speaker 3: Let's get back to that labor data, because that is
Speaker 3: certainly the big play here for the markets here. We
Speaker 3: want to always like to chat with Tom Gimble. Tom
Speaker 3: is the founder and CEO LASAL Networks. Tom, talk to
Speaker 3: us about this number here, A little bit a slowdown
Speaker 3: in hiring, but still a pretty healthy number. What's your perspective.
Speaker 4: I tell you, I'm not sure that it's not actually
Speaker 4: a better number than people think. If you look at
Speaker 4: how small the government hiring was, all right, break it
Speaker 4: down for you. So we've been averaging. Government's been averaging
Speaker 4: about fifty five thousand jobs a month. This month it
Speaker 4: was eight thousand. So when you look at the percentage
Speaker 4: of non government jobs added, this was one of the
Speaker 4: better months.
Speaker 7: Interesting because it I heard that.
Speaker 2: So then why is the Why is the rhetoric like, ooh,
Speaker 2: if you back that out, the overall number wasn't that great?
Speaker 4: Oh, because economists are depressing people. I think that. I
Speaker 4: think that that in reality, you know, the as we
Speaker 4: talk about every week, adding jobs is better than losing jobs.
Speaker 4: So the economy is good. I think where we have
Speaker 4: a problem that everybody knows about is inflation. And for
Speaker 4: some reason we've got cost of things going up, stock
Speaker 4: market going up, but it's being driven by by a
Speaker 4: few of you know, the Magnificent seven and all that
Speaker 4: good stuff. And then we're sitting here looking at at
Speaker 4: at people working, and the labor market is healthy. Now
Speaker 4: what we're seeing is a lot of the jobs are
Speaker 4: in healthcare, and they're in hospitality, and they're in construction,
Speaker 4: and so those are a lot of hourly jobs. They're
Speaker 4: not the highest earning jobs. And we're seeing a little
Speaker 4: bit of white collar stalling in the hiring side.
Speaker 3: So, Tom, it's early May. It means kids are gonna
Speaker 3: start graduating from college.
Speaker 4: What's that job market look like. It's there. It's there,
Speaker 4: It's just not as healthy as it was. And what
Speaker 4: I mean by that is it's the jobs aren't going
Speaker 4: to be if you want, you know, a lot of kids,
Speaker 4: oh I want to work remote, I want to work
Speaker 4: from here, that you're gonna have to go into an office.
Speaker 4: I think for a lot of the jobs. Number one,
Speaker 4: Number two, the salaries aren't going to be as high
Speaker 4: starting salaries as they have been historically for recent college graduates.
Speaker 4: And number three, you're not going to see as high
Speaker 4: a volume of hiring at companies, so you might not
Speaker 4: get the company that you want or the job you
Speaker 4: think you want, but there are jobs available.
Speaker 2: Do you what sectors do you still feel like are
Speaker 2: pretty strong? I anecdotally was speaking to a friend of
Speaker 2: mine who's pretty high up in the tech sector on
Speaker 2: the data side, and she is just like, I can't.
Speaker 2: It's really hard to get a job, and there's been
Speaker 2: so many rounds of layoffs over the last year and
Speaker 2: a half or so that there's a plethora of people
Speaker 2: trying to get in on the same jobs. At this point,
Speaker 2: where are the jobs where they're not talk us through
Speaker 2: all the dynamics.
Speaker 4: Yeah, so I think the real challenge is where were
Speaker 4: I think things are going to move over the course
Speaker 4: of the next couple of years. Is less industry and
Speaker 4: more skill set. Meaning technology might not be hiring, meaning
Speaker 4: big tech companies, but people who do sales may be
Speaker 4: getting hiring, and people who do development or product maybe
Speaker 4: getting hired, but they're not hiring in marketing or HR.
Speaker 4: So I think it's more of what your skill set
Speaker 4: is versus the overall industries. Right, so, healthcare may be stalling.
Speaker 4: We don't there the nurse shortages at what it was
Speaker 4: three years ago. However, they're hiring a ton of doctors
Speaker 4: and they're hiring a ton of of medical records people.
Speaker 4: As they move to AI, they still need to get
Speaker 4: the work done. So it's really in the roles versus
Speaker 4: the industries. But if I could wave a wand and
Speaker 4: give myself a skill set, it would be in security.
Speaker 4: In technology security. You guys see the hacks that Microsoft
Speaker 4: had a couple months ago, and there's a new one
Speaker 4: every week or every month coming out. And if somebody
Speaker 4: is really talented in the cyber security space, that ain't
Speaker 4: going anywhere.
Speaker 3: Hey, Tom, I wonder from your perspective how the influx
Speaker 3: of immigrants, legal and illegal into this country and a
Speaker 3: surge it's been, how does that impact A lot of
Speaker 3: folks are saying that's been a net positive for the
Speaker 3: labor market in the economy. What do you see from
Speaker 3: your perspective.
Speaker 4: I don't necessarily see that yet, So I think on
Speaker 4: the legal side, the problem with the layman, as you
Speaker 4: guys know, is people think that coming in is purely
Speaker 4: south of the border for immigration, and legal immigration is
Speaker 4: people who want to get married or they're just going
Speaker 4: to move here. We educate. There's different laws for non
Speaker 4: citizens to come into the country to be educated at
Speaker 4: a lot of our best schools and then you have
Speaker 4: to leave at after that. And so the legal immigration
Speaker 4: of educating people and then not allowing them to work here,
Speaker 4: especially in technology fields and engineering the stems. Right, we
Speaker 4: have this population, we educate and then we send away.
Speaker 4: It's almost a non with this country was built on methodology.
Speaker 4: And then number two on the illegal side. I think
Speaker 4: the negative on the workforce isn't that we don't need
Speaker 4: people at an entry level and blue collar skill set.
Speaker 4: It's a matter of how it's affecting society and what
Speaker 4: businesses want to do and people being scared and where
Speaker 4: things are at, and it overloading the system on some
Speaker 4: social issues and that has ripple effect into corporate America.
Speaker 4: That's my concern. And then the last thing, you know,
Speaker 4: you know it's the third rail, right, But I think
Speaker 4: I was doing an interview the other day about how,
Speaker 4: you know, we're seeing an influx from our clients at
Speaker 4: state schools doing finance and consulting recruiting because they don't
Speaker 4: want to just touch the ivs with a ten foot poll.
Speaker 7: Well, that's really interesting. What what what's the why there?
Speaker 4: No, I think there's you have so you have a
Speaker 4: smaller student population base at the IVY leagues. So companies
Speaker 4: don't want to spend their time trying to to look
Speaker 4: at social media and figure out who's in the protesting,
Speaker 4: who's not, who might have been abusive to other students,
Speaker 4: who wasn't right. It's easier to say, you know what,
Speaker 4: we're not going to discriminate against people within the ivys.
Speaker 4: We're just not going to recruit from the ivys.
Speaker 7: That's real, Tom.
Speaker 3: So what's kind of your view here as it relates
Speaker 3: going forward in terms of how do you think this
Speaker 3: labor economy is going to evolve for the remainder of
Speaker 3: this year.
Speaker 4: I think it's going to continue to be be fine.
Speaker 4: I think what we have is, you know this intersection,
Speaker 4: this then diagram if you will, of where it meets
Speaker 4: of the overall stock market, a change in Washington d
Speaker 4: C with the election, potential change with the Washington d
Speaker 4: C with the election coming up, and then and then
Speaker 4: just where we're at with inflation and things like that,
Speaker 4: and and interest rates and so we got today is
Speaker 4: to me, it doesn't seem like the Fed's going to
Speaker 4: lower rates. And if that happens, I think the status
Speaker 4: quo continues. And I think it's going to be just
Speaker 4: this emotionally purgatory world we're going to live in for
Speaker 4: the for the next six or eight months.
Speaker 7: Okay, but let's let's game that out. So that's the
Speaker 7: FED not cutting rates.
Speaker 2: If the FED does cut rates, or do the companies
Speaker 2: and industries you talk to, how would that influence their hiring?
Speaker 11: Oh?
Speaker 4: Most it really depends, right, twenty five basis points, you know,
Speaker 4: not that much. What it what it does is what
Speaker 4: it'll do is if it has the desired effect that
Speaker 4: a lot of people in corporate America think, which is
Speaker 4: send the economy back into a hyper drive state, then
Speaker 4: they continue to The theory would be they'd continue to
Speaker 4: lower interest rates, and then when money got cheap enough,
Speaker 4: you could hire people in the in the classes of
Speaker 4: twenty fifty one hundred. But I don't think twenty five
Speaker 4: basis points in the next or two sessions from now
Speaker 4: is going to all of a sudden turn three hundred
Speaker 4: or four hundred thousand jobs a month. I don't see that. Hey, Tom,
Speaker 4: is there.
Speaker 3: Any regionality out there into the hiring market. I'm just guessing,
Speaker 3: you know, Texas, Florida going crazy? But is there any
Speaker 3: regionality out there.
Speaker 4: No, I think you're right. On the Red States. We
Speaker 4: continue to see Nashville, we continue to see at Birmingham
Speaker 4: and Alabama and cities like that, and the Triangle in
Speaker 4: North Carolina just being a hot sector. But now I
Speaker 4: think other than that, it's I do think you're starting
Speaker 4: to see a little bit of it move in from
Speaker 4: the coasts, and I just think that's more of social
Speaker 4: issues than anything else. So it's where companies will go.
Speaker 4: I mean, look at I read an article. Don't quote
Speaker 4: me on it, but that Goldman Sachs has more employees
Speaker 4: in Salt Lake City than they do in New York.
Speaker 4: So I think that tells you that second and third
Speaker 4: tier cities are deaf. A place where corporate America is going.
Speaker 9: And we're going to Nashville.
Speaker 4: We are going there.
Speaker 7: Yeah, I'm super excited. I booked my hotel and I
Speaker 7: booked the airfare. Okay, so this is big for me.
Speaker 4: Water slide to die for water? Yeah, Oh it's a
Speaker 4: water park.
Speaker 9: Oh no, we go we go to this.
Speaker 7: Okay, there we go. Bloomberg Intelligence on the road from
Speaker 7: a water park.
Speaker 2: Tom Gimble, founder and CEO over at lasal Network, thank
Speaker 2: you so much. We really appreciate all of that for you,
Speaker 2: But that's so interesting. It's like, you know, when you
Speaker 2: stay on the West coast or the East coast, you
Speaker 2: forget that there's a lot of building happening, particularly in
Speaker 2: Red states, particularly from some of the infrastructure bills that
Speaker 2: we've seen. Any respective of that, there's still a lot
Speaker 2: of build out as well, so that's actually quite interesting.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 2: We bring you all the news and economics and finance,
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Speaker 2: decades and they are really good at what they do.
Speaker 2: So on that point, we want to go to anurrog Rana,
Speaker 2: Bloomberg Intelligence senior technology analyst to give us the breakdown
Speaker 2: for Apple earning. So we're looking at the best rally
Speaker 2: in almost eighteen months from Apple stock is up by
Speaker 2: six percent. I should point out that the S ANDP
Speaker 2: is really starting to roll over. We're now up only
Speaker 2: eight tens of one percent, so we'll see how long
Speaker 2: the rally and Apple lasts. But an a wrong, What
Speaker 2: was the biggest standout that justifies the rally for you?
Speaker 3: Yeah?
Speaker 10: When the results came out, you know, I remembered the
Speaker 10: code from late Charlie Manger that the secret of happiness
Speaker 10: and successful marriages low expectations. So I think this is
Speaker 10: exactly what happened with Apple that you know, people going
Speaker 10: in were like so pessimistic that any bit of good
Speaker 10: news was just hailed with you know, the stock react
Speaker 10: that you're seeing right now.
Speaker 3: So An Rag, I guess before the print you're talking
Speaker 3: about what you really want to hear regarding China and
Speaker 3: their business in China was stabilization?
Speaker 4: Stabilization? Did you hear that?
Speaker 10: In fact, he said they were doing very good in China,
Speaker 10: which is contrary to every data that out there. In fact,
Speaker 10: a couple of analysts this as asked him that, like,
Speaker 10: you know, how do you reconcile with all this data
Speaker 10: on shipments being down versus your comments in China. He's like,
Speaker 10: I'm not responsible for them, but we are doing okay
Speaker 10: in China. So it's it's a big dichotomy right now
Speaker 10: in the market as to you know, who to believe,
Speaker 10: whether the third party data providers are that are that
Speaker 10: are talking about a massive decline in iPhones versus Apple
Speaker 10: that's saying, you know, China is okay.
Speaker 2: Did you like them spending one hundred ten billion dollars
Speaker 2: on a buyback. I'm guessing you didn't because Paul was
Speaker 2: into it.
Speaker 8: No.
Speaker 10: Actually, to be very frank they spend over about one
Speaker 10: hundred billion right now, so the one hundred and ten
Speaker 10: is a minor upgrade. You know that the real new
Speaker 10: would have been if they said they're going to do
Speaker 10: about one hundred and fifty. Frankly, so I think, I know,
Speaker 10: the headline number looks really big, but they do already
Speaker 10: spend currently close two hundred billion dollars buying back you know,
Speaker 10: their share. So I mean, I like it, there's no
Speaker 10: problem about it. But but I think that's not really
Speaker 10: what got the stock going. The fact that they said
Speaker 10: that they're going to grow in you know, those single
Speaker 10: digits after forever about you know, close to two hundred
Speaker 10: basis points, you know, impact on FX.
Speaker 6: That's I think the biggest news at this point.
Speaker 3: Hey, Ana Rock, I guess their developer conference coming up
Speaker 3: in June is going to be big for Apple from
Speaker 3: an AI perspective. What will you be looking for at
Speaker 3: that conference?
Speaker 6: So, I mean, my personal preference would be if they
Speaker 6: do a tie up with Google and use Google's model
Speaker 6: to run.
Speaker 10: Some of those stuff, because you know that there is
Speaker 10: a big unknown out there as to what's going to
Speaker 10: happen between their relationship with Google when it comes to
Speaker 10: the default search engine and Google you know, supposedly pays
Speaker 10: them twenty billion dollars for it. I think that's under
Speaker 10: a lot of regulatory scrutiny. If Apple were to refine
Speaker 10: and do another deal with Google where they can you know,
Speaker 10: mix both those things, it will really help their AI
Speaker 10: costs because I don't think organically they can do something
Speaker 10: this quickly. There are news by Margament that they're going
Speaker 10: to either tie up with Google or Open AI.
Speaker 6: You know, my preference would be if they tie up
Speaker 6: with Google over there.
Speaker 3: So what is that risk for Apple from Google?
Speaker 10: It is there, but to be honest, it's a it's
Speaker 10: a it's a it's a one or a zero, which
Speaker 10: means there's no way to predict which way the judge
Speaker 10: is going to go. But I also feel that if
Speaker 10: they if this does come down to that, you know,
Speaker 10: some kind of illegal issue, the two parties are willing
Speaker 10: to pay each other or you know, there is a
Speaker 10: transaction there, so they'll find another way to make it
Speaker 10: look less like that, you know, a payment for default
Speaker 10: search engines, maybe per click, or there's some there could
Speaker 10: be some economics there, but it is a headline issue
Speaker 10: you at least in the near term for Apple.
Speaker 2: I have to say anag you do not seem that
Speaker 2: thrilled or that you've you know, you don't see that
Speaker 2: thrilled after Apple's quarter.
Speaker 6: No, no, no, no, that's that's not true. I mean
Speaker 6: I'm very happy with this.
Speaker 7: I'm actually skeptical. How about that?
Speaker 6: No I I no, no, not at all. I'm relieved
Speaker 6: of what happened from last night.
Speaker 10: I just need to get to some of these one
Speaker 10: or two different things that are pending, because I see,
Speaker 10: at the end of the day, Apple.
Speaker 6: Is one of the most phenomenal companies right now.
Speaker 10: There is nobody with an ecosystem that's stronger in the
Speaker 10: retail world or in the consumer world.
Speaker 6: But the question is how do they get back to
Speaker 6: the growth rate and can they get.
Speaker 10: Rid of some of the regulatory handles Right now, their
Speaker 10: fees is under a lot of pressure, both in EU
Speaker 10: and perhaps.
Speaker 6: Even in the US. So there are a few things.
Speaker 10: You know, it's not a clear cut story as a
Speaker 10: Microsoft or an Amazon or an Nvidia at this point.
Speaker 6: There are certain things that need to be cleaned up.
Speaker 6: But yeah, no, I'm I'm always a big fan of Apple.
Speaker 4: Nothing about it.
Speaker 3: All right, Very good Anna, rog rn I thank you
Speaker 3: very much. We appreciate that. As always on a Rogronic
Speaker 3: Technology Analyst or Bloomberg Intelligence.
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