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US Employers Announce Most Job Cuts Since 2020 Amid DOGE Layoffs · Bloomberg Intelligence

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  Speaker 2: Today we got the Challenger job cuts which were quite fascinating.
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  Speaker 2: They told it a little over one hundred and seventy
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  Speaker 2: two thousand. That's one hundred and three percent increase from
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  Speaker 2: last year and the most is.
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  Speaker 3: July of twenty twenty.
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  Speaker 2: Joining us now is Mark Niquette, Bloomberg Real Economy Reporter.
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  Speaker 2: Can you put those numbers in context for us?
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  Speaker 4: The numbers clearly show that there's going to be a
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  Speaker 4: drag on the monthly jobs report. We have a story
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  Speaker 4: up on the terminal right now that shows economists are
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  Speaker 4: saying we could see a hit of as many as
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  Speaker 4: half a million US jobs in the coming months. The
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  Speaker 4: combination of direct firings of federal workers but also the
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  Speaker 4: indirect impact on federal contractors or workers for entities that
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  Speaker 4: do business with the government or get federal funding who
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  Speaker 4: will lose their jobs.
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  Speaker 5: Okay, that would get people's attention here, So will we
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  Speaker 5: see any of that in the private payrolls data.
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  Speaker 6: We're going to see tomorrow and get any hint to that.
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  Speaker 4: We might see some impact in the report on Friday,
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  Speaker 4: but probably not until the reports that come out in April,
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  Speaker 4: for for March and for March and April. And that's
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  Speaker 4: because the survey period when the council are conducted is
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  Speaker 4: it was before Valentine's Day weekend when when a lot
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  Speaker 4: of the firing started. So we're thinking that the February
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  Speaker 4: report will not capture or you know, the bulk of
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  Speaker 4: the firings that happened after that.
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  Speaker 2: Also there's the firings, but then there's the I'm taking
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  Speaker 2: my package and going and if it's the latter, that
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  Speaker 2: won't come up in the numbers till after September, right,
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  Speaker 2: So it's still going to be super noisy.
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  Speaker 4: Correct, I mean, the there's about seventy five thousand federal
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  Speaker 4: workers were told who took the offer to essentially resign
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  Speaker 4: but continue to be paid through September, so you know,
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  Speaker 4: we won't see cuts until September. And in fact, you know,
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  Speaker 4: we could see some of these workers added to the
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  Speaker 4: workforce if they take another job.
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  Speaker 7: You know, while they're collecting their you know, sort of
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  Speaker 7: their severance.
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  Speaker 8: Do we know mark the extent to which Elon Musk
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  Speaker 8: in this dose team did the magnitude of job cuts
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  Speaker 8: they'd like to see.
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  Speaker 7: I don't think we've seen a number. You know, they've
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  Speaker 7: talked more in terms.
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  Speaker 4: Of federal spending, you know, which would include you know,
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  Speaker 4: cuts of federal workers. Elon must just talking about trying
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  Speaker 4: to cut two trillion dollars of federal spending, which would
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  Speaker 4: be you know, almost impossible to do unless you really
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  Speaker 4: got Social Security and Medicare and the military because that's
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  Speaker 4: where the bulk of the spending is. But you know,
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  Speaker 4: clearly they're they're going agency by agency and you.
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  Speaker 7: Know, trying to reduce headcount. And in particular.
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  Speaker 4: They've they've already said they wanted the agencies to get
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  Speaker 4: rid of pretty much all of their probationary workers. These
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  Speaker 4: are folks who came on on the payrolls within the
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  Speaker 4: last year.
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  Speaker 2: Walk us through what everyone's expecting for tomorrow, sort of
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  Speaker 2: where the strength is going to be in the labor market,
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  Speaker 2: where the crack is going to be, and where's the
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  Speaker 2: TVD going to be.
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  Speaker 7: Well, I think everybody's looking to see what the top
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  Speaker 7: line number is if in fact, you know, we're starting
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  Speaker 7: to see impacts of not necessarily the.
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  Speaker 4: Firings of the federal workers, but sort of the knock
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  Speaker 4: on effects of you know, these federal contractors who are
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  Speaker 4: losing their jobs or you know, folks who benefit or
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  Speaker 4: depend on federal spending.
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  Speaker 7: Because you know that has happened and that has been.
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  Speaker 4: Going on since before you know, the survey period for
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  Speaker 4: this report.
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  Speaker 7: You know, there was a there was a federal.
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  Speaker 4: Hiring freeze in January, for example, and spending that started
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  Speaker 4: to be cut.
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  Speaker 7: You know, right after Trump took office.
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  Speaker 4: So you know, I think we're trying to parse out
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  Speaker 4: just what kind.
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  Speaker 7: Of impact that's had on the top line numbers.
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  Speaker 5: At thirty seconds left, mark you're a member of the
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  Speaker 5: Real Economy team covering the intersection of government politics in
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  Speaker 5: the economy. DOGE is the intersection of government politics in
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  Speaker 5: the economy. Is there any pushback or what's the level
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  Speaker 5: of pushback from anybody that you think is important against DOSEE?
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  Speaker 4: I think you're starting to see pushed back from in
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  Speaker 4: some cases, you know, Republican senators and Congressmans who are
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  Speaker 4: seeing the feeling the effect of these cuts in their
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  Speaker 4: in their districts or their states. In fact, one of
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  Speaker 4: the aspects of the story we have on them I
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  Speaker 4: have up on the terminal right now is states trying
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  Speaker 4: to recruit fired federal workers to join the state workforce,
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  Speaker 4: in particular if they have a job opening with a specialty,
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  Speaker 4: like a scientific specialty, for example, that.
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  Speaker 7: A fired federal worker could fill.
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  Speaker 4: So you know, some of the pushback I think is
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  Speaker 4: being seen as an opportunity for some of these states
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  Speaker 4: to maybe bring some of these federal federal workers, particularly
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  Speaker 4: if they have an expertise, into their workforce.
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  Speaker 3: All right, thanks so much, We really appreciate it.
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  Speaker 2: Mark Mark Niquette joining us Bloomberg Real Economy Reporter.
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  Speaker 2: Alex Deal here alongside paulsw We need this a Boomberg
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  Speaker 2: Intelligence Radio. We are broadcasting to live from our Interactive
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  Speaker 2: Broker studio right now here in midtown Manhattan. As John
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  Speaker 2: is talking about, we are well off the lows of
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  Speaker 2: the session just whipped around by headlines on tariffs. Sylvia
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  Speaker 2: Dablonski is CEO and CIO of Defiance et Apps, and
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  Speaker 2: she is here to join us on her take on
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  Speaker 2: the markets broadly. Sylvia, do you feel like there is
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  Speaker 2: a Trump put out there? Have we learned that in
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  Speaker 2: the last few days.
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  Speaker 9: Good morning, Alex and fall.
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  Speaker 3: Great to be here.
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  Speaker 9: You know, I think we're waiting for it. We're so
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  Speaker 9: the market is certainly waiting for it, and I think,
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  Speaker 9: you know, that's what we're seeing here right The first
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  Speaker 9: thing that we're seeing is headwinds from the tariff policy
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  Speaker 9: and things like that. And the put that comes into
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  Speaker 9: play should be things like tax cuts, and it should
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  Speaker 9: be things like deregulation, and you know, kind of that
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  Speaker 9: that positive news that the market was really rallying around
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  Speaker 9: around the election time, and so that's something that the
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  Speaker 9: market's certainly waiting for. I think it's there. I just
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  Speaker 9: think that this is the first order of priority. So
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  Speaker 9: we're going to probably have to have some volatility along
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  Speaker 9: the way for the next couple of months.
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  Speaker 5: So volatile, So how does an investor kind of I
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  Speaker 5: don't know, deal with the volatility?
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  Speaker 3: Is it step aside a little bit.
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  Speaker 5: Is it just kind of try to look through to
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  Speaker 5: the other side, because again we are seeing I guess
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  Speaker 5: just from the top of the S and P about
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  Speaker 5: a six or seven percent draw down here. I'm not
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  Speaker 5: sure to what extent they gets Peel's attention, but it's
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  Speaker 5: going to be tough for the next several months.
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  Speaker 7: As you suggested, it's gonna.
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  Speaker 6: Be tough for the next several months.
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  Speaker 9: But I just think that, you know, whenever I see
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  Speaker 9: pullbacks like this, and you know, we've talked about this
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  Speaker 9: with you all before, I think that if you have
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  Speaker 9: a long term mindset as an investor, these are kind
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  Speaker 9: of the times, you know, when when everyone is fearful,
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  Speaker 9: it's it's time to sort of jump in and buy
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  Speaker 9: on those dips to hopefully experience the rips later on.
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  Speaker 9: You know, you look like stock second video that I've
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  Speaker 9: just precipitously fallen really in the last few weeks.
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  Speaker 6: And you know, what does that mean?
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  Speaker 9: Does that mean that AI is kind of gone, that
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  Speaker 9: we're no longer going to monetize on AI that you
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  Speaker 9: know that earnings call where they still have this you know,
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  Speaker 9: massive level of demand out there and they're you know,
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  Speaker 9: trying to catch up with supply. I mean, the headline
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  Speaker 9: story for some of these AI companies and chip companies
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  Speaker 9: that have fallen, I think is just a great opportunity
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  Speaker 9: to go in and buy it on. And there are
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  Speaker 9: so many places to look in the market as well.
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  Speaker 9: You have great companies like Broadcommon Oracle that participate there.
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  Speaker 9: You know, strong balance sheets, triple digit growth in AI revenue,
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  Speaker 9: is well diversified, and then you know, you can look
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  Speaker 9: at XMAC right if you're kind of spooked by the
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  Speaker 9: mag seven and you know, don't want to add more.
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  Speaker 9: There you can diversify your S and P five hundred
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  Speaker 9: exposure and pick up the stocks that are on sale
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  Speaker 9: for the other four hundred and ninety three. And most
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  Speaker 9: stocks are on sale outside of defense right now. You know,
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  Speaker 9: you see some of the consumer stable defensive names rallying.
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  Speaker 9: But besides that, everything is more or less on sale.
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  Speaker 2: When we talk about why they're on sale, though, like
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  Speaker 2: Marvel could be on sale because I mean their earnings
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  Speaker 2: were great, but they could be on sale because they
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  Speaker 2: didn't exceed expectations in the way that the market was
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  Speaker 2: pricing versus I'm on consumer staple stock and all of
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  Speaker 2: a sudden, my input costs are going to go higher.
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  Speaker 2: Just go at Walmart's run apply pressure on their suppliers
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  Speaker 2: in China. That's a different kind of reason. Does it matter?
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  Speaker 9: You know, it matters, but not to the tune of
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  Speaker 9: this draw down, right, And don't know, we don't know
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  Speaker 9: what's going to happen with tariffs. I suspect there will
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  Speaker 9: be some tariff policy that you know is not what
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  Speaker 9: it is today, that that could be wrong. But I
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  Speaker 9: think what the market really needs on that is just
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  Speaker 9: clarity so that you can price price in to just
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  Speaker 9: answer that question like what does that actually mean?
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  Speaker 6: Right?
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  Speaker 9: But I don't suspect that that means a twenty percent
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  Speaker 9: draw from from highs that we're seeing on some of
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  Speaker 9: these companies, right, So I think it's just more around
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  Speaker 9: uncertainty and clarity. And usually until you get that, you
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  Speaker 9: get that volatility and get those pullbacks. Once you start
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  Speaker 9: getting a certainty, that's when you start seeing the rallies
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  Speaker 9: and the rips. And that might be a couple months off.
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  Speaker 9: But you know, as an investor, I think that you know,
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  Speaker 9: these are kind of the times when you think about
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  Speaker 9: dollar cost averaging and investors actually are not panic selling.
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  Speaker 9: It's pretty interesting to see what's happening with this market,
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  Speaker 9: and it's almost like a neutral. There's a lot of
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  Speaker 9: sitting the sidelines that cash is not coming back into
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  Speaker 9: the market, that is, you know, on the sidelines, and
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  Speaker 9: you know that's a lot of it too, but we
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  Speaker 9: don't see you know, massive selling from what we're hearing
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  Speaker 9: on the street from the banks and brokene froms and
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  Speaker 9: things like that. So you know, I also think we're
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  Speaker 9: in correction territory here, so that's you know, we'll see
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  Speaker 9: what happens in coming days.
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  Speaker 5: Yeah, I'm just looking at the WEI function the world
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  Speaker 5: equity markets. It gives you a lot of performance data
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  Speaker 5: as well as volume of stocks traded. And you're right, Sylvia,
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  Speaker 5: today the volume is actually a little bit lighter than
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  Speaker 5: the last thirty day at.
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  Speaker 3: Very les yesterday was low too.
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  Speaker 5: Yeah, so you're not seeing that, which is an interesting side. So, Sylvia,
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  Speaker 5: given that backdrop here and maybe a little bit of
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  Speaker 5: a bias to buy on the weakness here, what's factored
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  Speaker 5: into your FED.
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  Speaker 6: Call right here?
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  Speaker 9: Well, you know we're hearing a lot of updates that
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  Speaker 9: the market is starting to think about maybe two and
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  Speaker 9: even three rate cuts this year, and you know that's
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  Speaker 9: maybe that's part of the Trump put.
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  Speaker 6: Too, is the FED put.
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  Speaker 9: So if we you know, if we get a couple
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  Speaker 9: of extra rate cuts, I think the market will like
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  Speaker 9: that story.
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  Speaker 6: But I think that's a tricky thing, right.
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  Speaker 9: I think we for some reason get very excited about
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  Speaker 9: ray cuts, and there's this barometer that the more the better.
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  Speaker 9: But raycuts mean that things are kind of slowing down,
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  Speaker 9: and I think BILL aren't in that sweet spot where yes,
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  Speaker 9: we have some slightly lighter data, but it doesn't look
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  Speaker 9: like we're going into a recession. It doesn't look like
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  Speaker 9: a growth scare. It looks like a slight slow down.
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  Speaker 9: And you know, so I think if that's the case,
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  Speaker 9: the FED won't have to cut all that much. Maybe
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  Speaker 9: it's an extra cut or too. But you know, I
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  Speaker 9: hope we don't have five FED cuts. Do you think
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  Speaker 9: if we have ad cutter two that propels the market
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  Speaker 9: a little bit?
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  Speaker 5: Right, Sylvia, thank you so much for joining us. Really
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  Speaker 5: appreciate it. Sets a chief officer and chief investment officer
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  Speaker 5: at Defiance ETF.
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  Speaker 2: All right, happy for Friday Eve, everybody, Alex, you alongside
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  Speaker 2: paulse We need this at Bloomberg Intelligence Radio markets not
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  Speaker 2: around the lows of the session, but looks like we
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  Speaker 2: could get there.
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  Speaker 3: Spof by about one point three percent.
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  Speaker 2: The NASDAC got by one point seven percent. Joann Feenie,
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  Speaker 2: partner and portfolio manager at Adviser's Capital Management, joins us. Now, Joanne,
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  Speaker 2: we were talking to Silva Jablonski and she very diplomatically said,
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  Speaker 2: I'm buying the dip in some of the names that
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  Speaker 2: she likes.
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  Speaker 3: Would you echo that view?
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  Speaker 10: Wel good morning, Alex. You know, it really depends where
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  Speaker 10: you're positioned in the market. We actually did some trimming
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  Speaker 10: back in January of our technology names because they've done
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  Speaker 10: so well and they were above our target weights, and
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  Speaker 10: we redoce them a little bit because you know, we
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  Speaker 10: do see a year of volatility ahead. There's just an
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  Speaker 10: enormous amount of policy uncertainty, both tariffs, government spending, taxation,
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  Speaker 10: and geopolitical that you want to be a little bit careful.
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  Speaker 6: Now, it really depends on the strategy.
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  Speaker 10: Our balance strategy is designed to be a bit more conservative,
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  Speaker 10: so we're not interested in buying the dip. We already
• 12:58
  Speaker 10: have full positions in the company's we really think are
• 13:00
  Speaker 10: going to power, for example, the AI revolution, So we
• 13:03
  Speaker 10: don't think this is a time to jump in unless
• 13:06
  Speaker 10: you have a sufficiently long focus and perhaps you don't
• 13:10
  Speaker 10: own enough.
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  Speaker 6: Of what will drive growth in the future.
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  Speaker 5: Joanne, how do you think about or how do you
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  Speaker 5: navigate a lot of the noise that's now part of
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  Speaker 5: this market, whether it comes from Washington, DC or other parts,
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  Speaker 5: because boy, it seems to really have a big impact
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  Speaker 5: on these markets short.
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  Speaker 10: Term, you know, Paul, at first you'd better have a
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  Speaker 10: strong stomach. You know, the measures of policy uncertainty that
• 13:35
  Speaker 10: are available show that right now policy uncertainty is higher
• 13:39
  Speaker 10: than it's been since the COVID crisis, since the Great
• 13:43
  Speaker 10: Financial Crisis, so we are definitely in unusual times. How
• 13:47
  Speaker 10: one navigates this is being positioned in several ways. Number One,
• 13:51
  Speaker 10: I think you've got to be well diversified across sectors.
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  Speaker 6: That's sort of obvious.
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  Speaker 10: But which companies you choose within those sectors is critically
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  Speaker 10: important at this point in time. What you want to
• 14:03
  Speaker 10: do is combine positions in worse secular growth, that is
• 14:07
  Speaker 10: growth that is going to be less sensitive to those
• 14:09
  Speaker 10: policy shocks and will last for some years.
• 14:13
  Speaker 6: We think a lot of.
• 14:13
  Speaker 10: That is grounded in data centers, in AI and in
• 14:16
  Speaker 10: the changes those things are creating, in the way industrial
• 14:20
  Speaker 10: firms operate, in the way pharmaceuticals operate, and beyond. And
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  Speaker 10: then secondly, what you want to find are high quality
• 14:28
  Speaker 10: companies that are more defensive and that offer investors some income.
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  Speaker 6: Again, I'm talking about the balance.
• 14:33
  Speaker 10: Strategy, more a balance strategy that design to be conservative
• 14:36
  Speaker 10: as opposed to an aggressive SMID or growth or something
• 14:39
  Speaker 10: like that. But when you want to be in it
• 14:42
  Speaker 10: for the long term and you want some stability in
• 14:44
  Speaker 10: portfolios given this uncertainty that you just highlighted, I think
• 14:48
  Speaker 10: you want to secure some income. Whether that's a boring
• 14:51
  Speaker 10: company like a Philip Morris or an Altria or a
• 14:54
  Speaker 10: utility like a Duke Energy. These are good things to
• 14:56
  Speaker 10: buffer the volatility in the portfolio and drive some income
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  Speaker 10: into clients' hands.
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  Speaker 2: So where does that lead them, say, more allocation to
• 15:03
  Speaker 2: fixed income or something like that.
• 15:04
  Speaker 3: That could also provide that pickup.
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  Speaker 10: Yeah, now that's something that advisors with their clients. That's
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  Speaker 10: a decision they'll make together. As the portfolio manager. On
• 15:13
  Speaker 10: the equity side, it's not my call to decide whether
• 15:18
  Speaker 10: their financial planning requires a shift between equity and fixed income.
• 15:23
  Speaker 10: Right now, our fixed income side, though, is driving a
• 15:25
  Speaker 10: lot of income. So in balance, our average client is
• 15:28
  Speaker 10: somewhere around sixty two to sixty three percent equity and
• 15:31
  Speaker 10: the rest fixed, and they're getting really good income off
• 15:34
  Speaker 10: that fixed side, so that again helps them to quiet
• 15:38
  Speaker 10: their nervous stomachs and ride out the kind of volatility
• 15:41
  Speaker 10: we're seeing on the equity side.
• 15:43
  Speaker 5: How concerned, Joanne, are you about concentration risk in the
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  Speaker 5: equity markets?
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  Speaker 6: Very concerned.
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  Speaker 10: I think that a lot of investors aren't aware of
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  Speaker 10: how concentrated their holdings are, particularly if they're in ETFs
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  Speaker 10: that are broad market exposed or mutual funds.
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  Speaker 6: Similarly, I mean, you know, owning having.
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  Speaker 10: Thirty five, thirty to thirty five percent of your portfolio
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  Speaker 10: in just seven companies, in my view, is an irresponsible
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  Speaker 10: place to be unless you have a twenty year horizon.
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  Speaker 10: It's just not worth the volatility that that's likely to
• 16:16
  Speaker 10: create in your strategy, it's not worth it. So it's
• 16:20
  Speaker 10: something we see a lot in clients who come to us.
• 16:22
  Speaker 10: They come to us with highly concentrated portfolios, and they
• 16:27
  Speaker 10: have to be worked out of those over time, you know,
• 16:29
  Speaker 10: without creating too much of a tax burden. So we'll
• 16:32
  Speaker 10: do that really carefully. But that's why we like not
• 16:35
  Speaker 10: to invest in the whole market. And I think, you know,
• 16:37
  Speaker 10: the S and P five hundred is going to be
• 16:38
  Speaker 10: challenged this year, and so you want to pick and
• 16:40
  Speaker 10: choose we know, maybe thirty five fifty stocks. I think
• 16:43
  Speaker 10: you can get enough diversification with that number of stocks,
• 16:46
  Speaker 10: keeps you out of the exposure to those concentrated you know,
• 16:49
  Speaker 10: S and P five hundred names, and still allows you
• 16:52
  Speaker 10: to get some growth in the portfolio.
• 16:54
  Speaker 6: So be wary of concentration, very risky. Right now, you.
• 16:57
  Speaker 2: Mentioned pharmaceuticals, biotech and all the innovation that's going there.
• 17:02
  Speaker 3: Can you talk a little bit about some of the
• 17:04
  Speaker 3: picks that you like there? Thirty seconds?
• 17:06
  Speaker 6: Yeah, yeah, sure.
• 17:07
  Speaker 10: You know, biotech really suffered a lot when interest rates
• 17:09
  Speaker 10: went up, right, They suffered from funding shortages, fewer investments,
• 17:13
  Speaker 10: and so did their customers, So it was a really
• 17:16
  Speaker 10: tough time. More broadly into more mature companies, you know,
• 17:19
  Speaker 10: Johnson and Johnson, Bristol Myers.
• 17:22
  Speaker 6: Now, all of these names have hair.
• 17:23
  Speaker 10: On them because each of them, anybody that's been around
• 17:26
  Speaker 10: in pharmaceuticals, have some drugs.
• 17:29
  Speaker 6: That are you know, coming to end of life.
• 17:31
  Speaker 10: You know of their protections from patents, and so you
• 17:34
  Speaker 10: have to look at the names that have the best pipelines,
• 17:36
  Speaker 10: the most extensive and broad based pipelines. So that's why
• 17:39
  Speaker 10: we like you know, Bristol Myers, we like Pfizer. You know,
• 17:42
  Speaker 10: some of these companies have gone through a lot of pain,
• 17:45
  Speaker 10: but again look at the pipelines and you see real
• 17:48
  Speaker 10: opportunity for them to overcome of those declinents from their
• 17:51
  Speaker 10: legacy drugs.
• 17:52
  Speaker 5: All right, Joanne, thank you so much for joining us.
• 17:54
  Speaker 5: Really appreciate it. Joanne Foene, partner and portfolio management Advisor's
• 17:57
  Speaker 5: Capital Management, joining us via zoom from Ridgewood, New Jersey.
• 18:02
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