Latest / Bloomberg Intelligence / US Services Index Shrinks, Jobs Report, Apple Earnings

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US Services Index Shrinks, Jobs Report, Apple Earnings · Bloomberg Intelligence

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Speaker 2: The S and P is still up one percent, but
0:26
Speaker 2: if you take a look at an inter date chart,
0:28
Speaker 2: it is a nice straight line down after we got
0:31
Speaker 2: that ism services number, Paul, when you have prices paid
0:34
Speaker 2: higher in next slipping below fifty and that employment number
0:38
Speaker 2: coming in at forty five point nine for the service sector,
0:41
Speaker 2: which does echo what we saw in terms of hospitality
0:43
Speaker 2: jobs and sort of the meager edition that we saw
0:46
Speaker 2: in today's jobs report.
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Speaker 3: Yeah, I think so. I mean, I think the labor market,
0:50
Speaker 3: we had a lot of guests on Bloomberg survants, a
0:52
Speaker 3: lot of economists, and I think the consensus kind of
0:55
Speaker 3: is still a solid labor market, but just cooling. And
0:59
Speaker 3: that's probably all. Maybe the Federal Reserve might need to
1:02
Speaker 3: pull maybe rate cut.
1:04
Speaker 4: We'll be a little bit forward in a year.
1:06
Speaker 2: And if we dot together all the things we learned
1:07
Speaker 2: from say bookings and Expedia, et cetera. The kind of
1:11
Speaker 2: service economy is starting to slow. So let's get more
1:14
Speaker 2: with that. Anthony Javis, he joins us. He is the
1:17
Speaker 2: ISM chair Services head. He is the chair of the
1:20
Speaker 2: ISM Services Business Committee. Let me get that title right,
1:23
Speaker 2: So talk to me about how you understand these numbers. So,
1:27
Speaker 2: services and next slipping below forty nine point four, how
1:30
Speaker 2: would you describe that?
1:33
Speaker 5: Well, what we're seeing here is a pullback in the
1:36
Speaker 5: leading indexes that comprise this composite index Business activity fifty
1:42
Speaker 5: point nine. That's down six point five percentage points. Still growing,
1:46
Speaker 5: but as you said, it's cooling, it's definitely pulled back.
1:49
Speaker 5: Some new orders still growing fifty two point two, but
1:53
Speaker 5: down two point two percentage points. And the employment market
1:57
Speaker 5: continues to be just as this index indicates forty five
2:00
Speaker 5: point nine, down two point six percentage points, attributed to
2:05
Speaker 5: a combination of things that we've seen in the past ongoing.
2:08
Speaker 5: Either they can't find applicable workers for open positions, or
2:12
Speaker 5: they're controlling that labor expense. And the last one, supplier
2:15
Speaker 5: deliveries continues to be faster due to waning demand as
2:20
Speaker 5: well as improved capacity.
2:22
Speaker 3: So Anthony, can you kind of give us some context here,
2:25
Speaker 3: because context matters, and give us a little sense here
2:27
Speaker 3: of the trend here in some of this services data.
2:33
Speaker 6: That's a great point.
2:34
Speaker 5: This is one month we've contracted here first time since
2:37
Speaker 5: December of twenty twenty two. Well, we thought it might
2:41
Speaker 5: take a little bit longer to balance back. It came
2:43
Speaker 5: right back the following month. Not trying to be the
2:46
Speaker 5: consummate optimist here, but again one trend, we're just under
2:49
Speaker 5: the baseline. Based on responded comments, they indicate that they
2:53
Speaker 5: see the next part of the year that it will
2:56
Speaker 5: be some improvements there. So we'll just have to wait
2:58
Speaker 5: and see how it trends out over next couple of months.
3:02
Speaker 2: Where are the worry spots within all the respondents? Where
3:06
Speaker 2: are the weak links?
3:08
Speaker 5: Well, it's inflation is a big one. You know, Pricing
3:12
Speaker 5: is definitely impacting their various industries and their companies that
3:17
Speaker 5: make up this sector, as well as the challenges and employment.
3:21
Speaker 5: You know, construction still seems to be an area where
3:24
Speaker 5: they can't backfill positions, and you know, geopolitical issues as
3:28
Speaker 5: well also is on the forefront of our respondent's minds
3:31
Speaker 5: right now.
3:32
Speaker 7: All right, great stuff, Anthony, Thank you so much.
3:34
Speaker 2: Anthony Avis. I love that you hop on with those.
3:36
Speaker 2: We know you have a busy day. He's the chair
3:38
Speaker 2: of the Ism Services Index.
3:41
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3:59
Speaker 3: You know there's a luck going on out there in
4:01
Speaker 3: the marketplace. Here and again, it's economic data, it's earnings data.
4:05
Speaker 3: Henrietta Trez joins his managing partner and director of Economic
4:08
Speaker 3: Policy for Veda Partners. I believe from Zoom, I mean
4:12
Speaker 3: from Louisiana via Zoom. Hey, Henrietta, what do you make
4:16
Speaker 3: of this job's report? I mean, to what extent is
4:19
Speaker 3: this labor market cooling? In your mind?
4:22
Speaker 8: Well, first of all, I have to just say, the
4:25
Speaker 8: Stones played last night the jazz Fest down in New Orleans.
4:27
Speaker 9: So y'all just all that down.
4:28
Speaker 8: Oh fantastic, It'll be going all weekend, so can't wait.
4:32
Speaker 8: But no, the jobs number continues to be really I
4:36
Speaker 8: think just a goldilocks moment the market participants are focused
4:40
Speaker 8: on FED interest rate cuts, and this reignited opportunities and
4:43
Speaker 8: sort of optimism for a FED rate cut in September,
4:47
Speaker 8: which is a market difference from just earlier this week,
4:49
Speaker 8: and expectations for the last couple of weeks. I've been
4:51
Speaker 8: pushing it out till November or even next year, or
4:54
Speaker 8: even say that there could be a FED hike. So
4:56
Speaker 8: I think this job's number, while slightly lower than it
4:58
Speaker 8: has been in the last couple of months, I.
5:00
Speaker 9: Mean, continues this ridiculous trend.
5:03
Speaker 8: Of some four percent unemployment, which is full employment in
5:06
Speaker 8: the United States and really just paints the picture of
5:09
Speaker 8: a very robust, strong economy that is the longest running
5:14
Speaker 8: since the nineteen sixties.
5:15
Speaker 9: So I think it's sort of a perfect number, to
5:18
Speaker 9: be honest.
5:18
Speaker 7: How fast, though, can the job market cool?
5:21
Speaker 2: Someone pointed out on m Live, which is the great
5:24
Speaker 2: sort of blog that we do here at Bloomberg, that
5:26
Speaker 2: health and private education excluding public school teachers, accounted for
5:29
Speaker 2: over half of the entire gain and payroll, so if
5:32
Speaker 2: you back that out, it was actually a lot weaker.
5:34
Speaker 2: And so I'm wondering how fast we can cool here.
5:38
Speaker 8: I mean, I think that the ridiculous strength in job
5:42
Speaker 8: growth for the last couple of months. It's just been
5:44
Speaker 8: blowing out expectations. It's almost like where were those jobs
5:46
Speaker 8: even coming from. It's hard to sort of wrap your
5:49
Speaker 8: head around those numbers so consistently for what is it,
5:52
Speaker 8: twenty four.
5:53
Speaker 9: Months or something.
5:55
Speaker 8: I think that this job's number reflects more of a reality.
5:58
Speaker 8: I saw the same post, you know, some similar comments
6:01
Speaker 8: about the weather over the winter period, maybe just bringing
6:04
Speaker 8: this back down to earth, and I think it reflects,
6:07
Speaker 8: you know, a very strong economy that really doesn't have
6:11
Speaker 8: much room to continue growing jobs the way that it
6:13
Speaker 8: has been.
6:14
Speaker 3: All Right, So I guess when we combine this jobs
6:17
Speaker 3: print today, Henriette, with what we heard from FED Chairman
6:19
Speaker 3: J Powell earlier in the week, does this kind of
6:23
Speaker 3: alter the way you think about how the FED may
6:25
Speaker 3: proceed for the remainder of the year in terms of
6:27
Speaker 3: perhaps cutting rates.
6:29
Speaker 8: You know, I don't subscribe to the theory that the
6:31
Speaker 8: FED is politically motivated.
6:33
Speaker 6: I know a lot of.
6:34
Speaker 8: Investors are in that headspace, but you know, I've worked
6:37
Speaker 8: with Federal Reserve folks for many years, going back to
6:40
Speaker 8: when I was in the Senate and here and work
6:43
Speaker 8: with many of the former FED chairs, former FED employees now,
6:47
Speaker 8: and I think the understanding that they are not a
6:49
Speaker 8: political animal is something that Jay Powell tries to relay
6:52
Speaker 8: over and over and over again, as you did on Wednesday.
6:55
Speaker 9: But you know, investors don't necessarily all want to hear that.
6:58
Speaker 8: I think that if the FED feels it to contain
7:01
Speaker 8: inflation and keep its dual mandate going, they will cut
7:05
Speaker 8: as needed. I mean, one of the things that I'd
7:07
Speaker 8: point out is that we have elections in the United
7:09
Speaker 8: States all the time. Granted they're only every four years
7:11
Speaker 8: of presidential election cycle, but we've got generals, We've got
7:14
Speaker 8: different elections across individual states, constitutional referendums.
7:18
Speaker 9: I mean, this happens all the time.
7:19
Speaker 8: So to assume that the FED is somehow not going
7:22
Speaker 8: to cut from you know, July to November because the election,
7:27
Speaker 8: that's a big swath of time that they're just going
7:29
Speaker 8: to let the economy run.
7:32
Speaker 9: Unregulated, you know, that's not really how they operate.
7:36
Speaker 8: And so I would just encourage folks to say, if
7:38
Speaker 8: they do need to cut, they will, and I think
7:41
Speaker 8: they'll do that x any political considerations. One more thing
7:44
Speaker 8: I'd add is that there's this view that if they
7:47
Speaker 8: don't cut in March or April or even June, then
7:50
Speaker 8: they can't come in and cut in September. I've read
7:53
Speaker 8: that repeatedly from investors and the idea of being it'll
7:56
Speaker 8: look to partisan, too politically oriented, and I disagree with that.
8:00
Speaker 8: But it's interesting to see the market move since Wednesday
8:03
Speaker 8: and today's jobs report. Now there all of a sudden
8:05
Speaker 8: pricing in cuts again in September, so it seems to
8:08
Speaker 8: vacillate quite a bit. And I just point that out.
8:10
Speaker 8: So it's an interesting dynamic from investor perspective.
8:13
Speaker 2: Yeah, I mean even before this is already happening, they
8:15
Speaker 2: had that article last Friday right about potentially the Trump
8:17
Speaker 2: campaign talking about eroding that independence regardless, So there's that.
8:21
Speaker 7: Before I let you go.
8:24
Speaker 2: The way labor market slows, When could we be in
8:28
Speaker 2: a higher unemployment environment in this election cycle.
8:34
Speaker 9: I mean, I think to your earlier point, it could
8:36
Speaker 9: happen pretty quickly.
8:37
Speaker 8: You know, it's only a three point nine now, it
8:39
Speaker 8: wouldn't take much to take up to four four point one.
8:42
Speaker 8: And I think the revisions are something to watch certainly
8:45
Speaker 8: as well. And as we get into the summer months,
8:48
Speaker 8: you talked about school teachers. I think that there's opportunity
8:52
Speaker 8: for change and they can imagine us being higher than
8:54
Speaker 8: four percent come election day without question.
8:58
Speaker 3: All right, Henriette, thank you so much for joining us.
9:00
Speaker 3: Henrietta trees A Managing partner and director of Economic polse
9:04
Speaker 3: at Veda Partners.
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Speaker 10: Really.
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Speaker 2: Carol Pepper is one of them, founder and CEO of
9:46
Speaker 2: Pepper International. She joins us now from New York City. Carol,
9:51
Speaker 2: the market seems to be taking the report is goldilocks.
9:54
Speaker 2: Im services number might have put a little bit of
9:56
Speaker 2: dent in that, but either way, does this give you
9:58
Speaker 2: confidence to the market.
10:02
Speaker 11: Yes, I mean I think we are in a very
10:04
Speaker 11: nice sweet spot. I'm not necessarily want to buy the market.
10:08
Speaker 11: We look at sectors and see where the growth is
10:10
Speaker 11: going to be. So, as you know, I'm a big
10:13
Speaker 11: tech bull for the long term. I think you buy
10:15
Speaker 11: tech on fear days and the United States really leads
10:19
Speaker 11: in technology and innovation and artificial intelligence, and those sectors
10:23
Speaker 11: of the magnificent six if you will, out of seven
10:26
Speaker 11: are really powering the market forward and we'll continue to
10:29
Speaker 11: do so. I think it looks likely that you know,
10:32
Speaker 11: the FED will ease at some point this year, and
10:35
Speaker 11: that's very good for growth stocks. So I'm in a
10:37
Speaker 11: happy place with the report.
10:39
Speaker 3: What did you make of that Apple print we saw
10:42
Speaker 3: last night after the clothes What are your takeaways?
10:45
Speaker 11: Well, I just think again it's you know, everybody wants
10:48
Speaker 11: to keep counting tech out because they missed the rally.
10:51
Speaker 11: And what I tell everybody is you can't time when
10:54
Speaker 11: all the good news will come in. So things are
10:56
Speaker 11: looking up for Apple. You just have to get in
10:59
Speaker 11: there hold your knows. If you're a value investor and
11:01
Speaker 11: you think everything's overpriced, because it's not. If you have
11:04
Speaker 11: a long term time horizon, as you know, I manage
11:07
Speaker 11: money for family offices, generally people with over one hundred
11:10
Speaker 11: million dollars, and we make long term bets. And the
11:13
Speaker 11: long term bet to make right now are the Magnificent six.
11:16
Speaker 11: I leave out Tesla because I think they have a
11:18
Speaker 11: lot of problems, but if you look at all the
11:20
Speaker 11: other stocks these are this is a good basket. Or
11:22
Speaker 11: if you can't buy all the stocks individually, you can
11:25
Speaker 11: look at QQQ, get a broad based of American technology
11:29
Speaker 11: exposure and global technology exposure, and set it and forget it,
11:33
Speaker 11: you know, and you will see continuing upside surprises. Sometimes
11:37
Speaker 11: we'll miss the quarter. Look at what Microsoft just did.
11:40
Speaker 11: They're reinvesting to buy more AI. So the earnings might
11:43
Speaker 11: be down for a quarter, but that is only going
11:45
Speaker 11: to translate into double the earnings two quarters later. So
11:48
Speaker 11: you can't just go, you know, month to month and
11:51
Speaker 11: say it uperates down. You have to make some long
11:53
Speaker 11: term bets if you want to make money over the
11:54
Speaker 11: long term.
11:56
Speaker 2: So if I'm hearing you right, you're saying buy on
11:59
Speaker 2: fear Big ten because it's a good value value plus tech.
12:05
Speaker 11: Yes, it is the real value. The real value today
12:08
Speaker 11: is not the value stocks. The real value today or
12:11
Speaker 11: the big tech stocks because they have the balance sheet,
12:13
Speaker 11: they have the cash, and they're leading the entire country.
12:17
Speaker 11: Because their technologies will impact every single other industry in
12:20
Speaker 11: this country. AI is going to touch everything. So if
12:24
Speaker 11: you really want to make long term money, if you
12:26
Speaker 11: want to fund your retirement or your kids education, put
12:29
Speaker 11: money in tech and leave it there. Don't try to
12:32
Speaker 11: trade it daily. It's very hard to guess which quarter
12:35
Speaker 11: the yearnings are going to pop up when people are
12:37
Speaker 11: going to be more or less fearful. But when they
12:39
Speaker 11: are fearful like there were a few days ago, that's
12:42
Speaker 11: when you jump in and buy.
12:44
Speaker 3: So, Carol, what do you think about healthcare here? And
12:46
Speaker 3: recently I asked us, I'm looking at Amgen here. Here's
12:48
Speaker 3: a company with the one hundred and sixty billion dollar
12:49
Speaker 3: market cap company up twelve percent, and it seems like
12:54
Speaker 3: in the healthcare space, if you could talk about a
12:56
Speaker 3: GLP into your portfolio, it's kind of like saying you
12:59
Speaker 3: got a eye exposure in technology kind of works.
13:01
Speaker 4: How do you think about.
13:02
Speaker 11: Healthcare, Well, I really think that healthcare right now is
13:06
Speaker 11: being driven by the whole weight loss craze, because that
13:09
Speaker 11: is a huge trend that's going to keep going up,
13:12
Speaker 11: and I do predict that eventually it might take another year.
13:15
Speaker 11: We're either going to get pills or we're going to
13:17
Speaker 11: get the price of the shots coming way down, and
13:19
Speaker 11: that will just bring a flood of new patients into
13:21
Speaker 11: the market. So that is a trend that you definitely
13:25
Speaker 11: want to jump on. I think for the next four
13:26
Speaker 11: or five years. At some point the governments will put
13:29
Speaker 11: their foot down and start to mandate lower prices for
13:31
Speaker 11: these drugs. But for now, it's definitely a trend that
13:35
Speaker 11: will make money for you over the medium term for sure,
13:38
Speaker 11: because what most of America is overweight and this is
13:40
Speaker 11: a way to help them get their weight under control.
13:43
Speaker 2: Yeah, Paul, sitting at this current moment, Carol, before let go,
13:49
Speaker 2: what else do you like right now?
13:51
Speaker 7: What else do you want to buy on fear?
13:54
Speaker 11: Well, I think the main thing is just you know,
13:57
Speaker 11: those are my favorite picks. I also think you should
13:59
Speaker 11: buy estate, frankly, because real estate is going to come
14:02
Speaker 11: back again. You have to be a little bit patient,
14:04
Speaker 11: but if you're willing to sit through the summer, you
14:06
Speaker 11: can get some beaten up real estate and development stocks
14:09
Speaker 11: and home building stocks. Real estate will come roaring back
14:12
Speaker 11: the second that the rates come down. The rates aren't
14:14
Speaker 11: going to come down. Do we know if it's two
14:16
Speaker 11: months or six months. We don't know, but we do
14:18
Speaker 11: know we're going to get there. So those of you
14:19
Speaker 11: who loved a bargain, look into the real estate sector
14:23
Speaker 11: right now. Look at home builders and people like that.
14:25
Speaker 11: That's really a place where you're going to be able
14:28
Speaker 11: to get in there early and patch yourself in the
14:30
Speaker 11: back when the rest of the world catches on your
14:33
Speaker 11: trend that you got in early.
14:35
Speaker 3: All right, Carol, thank you so much for joining us.
14:36
Speaker 3: Kyle Pepper, she's a founder and CEO of Pepper International,
14:40
Speaker 3: joining us from New York City via zoom Here.
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15:04
Speaker 3: Let's get back to that labor data, because that is
15:06
Speaker 3: certainly the big play here for the markets here. We
15:10
Speaker 3: want to always like to chat with Tom Gimble. Tom
15:12
Speaker 3: is the founder and CEO LASAL Networks. Tom, talk to
15:16
Speaker 3: us about this number here, A little bit a slowdown
15:18
Speaker 3: in hiring, but still a pretty healthy number. What's your perspective.
15:22
Speaker 4: I tell you, I'm not sure that it's not actually
15:24
Speaker 4: a better number than people think. If you look at
15:27
Speaker 4: how small the government hiring was, all right, break it
15:31
Speaker 4: down for you. So we've been averaging. Government's been averaging
15:34
Speaker 4: about fifty five thousand jobs a month. This month it
15:37
Speaker 4: was eight thousand. So when you look at the percentage
15:40
Speaker 4: of non government jobs added, this was one of the
15:43
Speaker 4: better months.
15:44
Speaker 7: Interesting because it I heard that.
15:46
Speaker 2: So then why is the Why is the rhetoric like, ooh,
15:48
Speaker 2: if you back that out, the overall number wasn't that great?
15:52
Speaker 4: Oh, because economists are depressing people. I think that. I
15:57
Speaker 4: think that that in reality, you know, the as we
16:02
Speaker 4: talk about every week, adding jobs is better than losing jobs.
16:05
Speaker 4: So the economy is good. I think where we have
16:09
Speaker 4: a problem that everybody knows about is inflation. And for
16:13
Speaker 4: some reason we've got cost of things going up, stock
16:20
Speaker 4: market going up, but it's being driven by by a
16:22
Speaker 4: few of you know, the Magnificent seven and all that
16:24
Speaker 4: good stuff. And then we're sitting here looking at at
16:28
Speaker 4: at people working, and the labor market is healthy. Now
16:33
Speaker 4: what we're seeing is a lot of the jobs are
16:35
Speaker 4: in healthcare, and they're in hospitality, and they're in construction,
16:41
Speaker 4: and so those are a lot of hourly jobs. They're
16:45
Speaker 4: not the highest earning jobs. And we're seeing a little
16:47
Speaker 4: bit of white collar stalling in the hiring side.
16:52
Speaker 3: So, Tom, it's early May. It means kids are gonna
16:56
Speaker 3: start graduating from college.
16:58
Speaker 4: What's that job market look like. It's there. It's there,
17:03
Speaker 4: It's just not as healthy as it was. And what
17:06
Speaker 4: I mean by that is it's the jobs aren't going
17:10
Speaker 4: to be if you want, you know, a lot of kids,
17:11
Speaker 4: oh I want to work remote, I want to work
17:13
Speaker 4: from here, that you're gonna have to go into an office.
17:15
Speaker 4: I think for a lot of the jobs. Number one,
17:18
Speaker 4: Number two, the salaries aren't going to be as high
17:21
Speaker 4: starting salaries as they have been historically for recent college graduates.
17:27
Speaker 4: And number three, you're not going to see as high
17:29
Speaker 4: a volume of hiring at companies, so you might not
17:32
Speaker 4: get the company that you want or the job you
17:35
Speaker 4: think you want, but there are jobs available.
17:38
Speaker 2: Do you what sectors do you still feel like are
17:41
Speaker 2: pretty strong? I anecdotally was speaking to a friend of
17:44
Speaker 2: mine who's pretty high up in the tech sector on
17:46
Speaker 2: the data side, and she is just like, I can't.
17:49
Speaker 2: It's really hard to get a job, and there's been
17:51
Speaker 2: so many rounds of layoffs over the last year and
17:53
Speaker 2: a half or so that there's a plethora of people
17:57
Speaker 2: trying to get in on the same jobs. At this point,
18:00
Speaker 2: where are the jobs where they're not talk us through
18:03
Speaker 2: all the dynamics.
18:04
Speaker 4: Yeah, so I think the real challenge is where were
18:07
Speaker 4: I think things are going to move over the course
18:09
Speaker 4: of the next couple of years. Is less industry and
18:14
Speaker 4: more skill set. Meaning technology might not be hiring, meaning
18:20
Speaker 4: big tech companies, but people who do sales may be
18:23
Speaker 4: getting hiring, and people who do development or product maybe
18:27
Speaker 4: getting hired, but they're not hiring in marketing or HR.
18:30
Speaker 4: So I think it's more of what your skill set
18:32
Speaker 4: is versus the overall industries. Right, so, healthcare may be stalling.
18:37
Speaker 4: We don't there the nurse shortages at what it was
18:39
Speaker 4: three years ago. However, they're hiring a ton of doctors
18:44
Speaker 4: and they're hiring a ton of of medical records people.
18:47
Speaker 4: As they move to AI, they still need to get
18:49
Speaker 4: the work done. So it's really in the roles versus
18:54
Speaker 4: the industries. But if I could wave a wand and
18:57
Speaker 4: give myself a skill set, it would be in security.
18:59
Speaker 4: In technology security. You guys see the hacks that Microsoft
19:03
Speaker 4: had a couple months ago, and there's a new one
19:05
Speaker 4: every week or every month coming out. And if somebody
19:08
Speaker 4: is really talented in the cyber security space, that ain't
19:13
Speaker 4: going anywhere.
19:14
Speaker 3: Hey, Tom, I wonder from your perspective how the influx
19:18
Speaker 3: of immigrants, legal and illegal into this country and a
19:21
Speaker 3: surge it's been, how does that impact A lot of
19:24
Speaker 3: folks are saying that's been a net positive for the
19:26
Speaker 3: labor market in the economy. What do you see from
19:28
Speaker 3: your perspective.
19:29
Speaker 4: I don't necessarily see that yet, So I think on
19:32
Speaker 4: the legal side, the problem with the layman, as you
19:36
Speaker 4: guys know, is people think that coming in is purely
19:41
Speaker 4: south of the border for immigration, and legal immigration is
19:46
Speaker 4: people who want to get married or they're just going
19:48
Speaker 4: to move here. We educate. There's different laws for non
19:53
Speaker 4: citizens to come into the country to be educated at
19:56
Speaker 4: a lot of our best schools and then you have
19:59
Speaker 4: to leave at after that. And so the legal immigration
20:02
Speaker 4: of educating people and then not allowing them to work here,
20:07
Speaker 4: especially in technology fields and engineering the stems. Right, we
20:12
Speaker 4: have this population, we educate and then we send away.
20:15
Speaker 4: It's almost a non with this country was built on methodology.
20:19
Speaker 4: And then number two on the illegal side. I think
20:22
Speaker 4: the negative on the workforce isn't that we don't need
20:25
Speaker 4: people at an entry level and blue collar skill set.
20:29
Speaker 4: It's a matter of how it's affecting society and what
20:33
Speaker 4: businesses want to do and people being scared and where
20:37
Speaker 4: things are at, and it overloading the system on some
20:39
Speaker 4: social issues and that has ripple effect into corporate America.
20:43
Speaker 4: That's my concern. And then the last thing, you know,
20:46
Speaker 4: you know it's the third rail, right, But I think
20:49
Speaker 4: I was doing an interview the other day about how,
20:52
Speaker 4: you know, we're seeing an influx from our clients at
20:54
Speaker 4: state schools doing finance and consulting recruiting because they don't
20:57
Speaker 4: want to just touch the ivs with a ten foot poll.
21:00
Speaker 7: Well, that's really interesting. What what what's the why there?
21:04
Speaker 4: No, I think there's you have so you have a
21:08
Speaker 4: smaller student population base at the IVY leagues. So companies
21:12
Speaker 4: don't want to spend their time trying to to look
21:14
Speaker 4: at social media and figure out who's in the protesting,
21:17
Speaker 4: who's not, who might have been abusive to other students,
21:20
Speaker 4: who wasn't right. It's easier to say, you know what,
21:23
Speaker 4: we're not going to discriminate against people within the ivys.
21:25
Speaker 4: We're just not going to recruit from the ivys.
21:28
Speaker 7: That's real, Tom.
21:30
Speaker 3: So what's kind of your view here as it relates
21:32
Speaker 3: going forward in terms of how do you think this
21:34
Speaker 3: labor economy is going to evolve for the remainder of
21:38
Speaker 3: this year.
21:39
Speaker 4: I think it's going to continue to be be fine.
21:42
Speaker 4: I think what we have is, you know this intersection,
21:48
Speaker 4: this then diagram if you will, of where it meets
21:50
Speaker 4: of the overall stock market, a change in Washington d
21:57
Speaker 4: C with the election, potential change with the Washington d
21:59
Speaker 4: C with the election coming up, and then and then
22:02
Speaker 4: just where we're at with inflation and things like that,
22:05
Speaker 4: and and interest rates and so we got today is
22:08
Speaker 4: to me, it doesn't seem like the Fed's going to
22:09
Speaker 4: lower rates. And if that happens, I think the status
22:13
Speaker 4: quo continues. And I think it's going to be just
22:16
Speaker 4: this emotionally purgatory world we're going to live in for
22:21
Speaker 4: the for the next six or eight months.
22:23
Speaker 7: Okay, but let's let's game that out. So that's the
22:25
Speaker 7: FED not cutting rates.
22:26
Speaker 2: If the FED does cut rates, or do the companies
22:28
Speaker 2: and industries you talk to, how would that influence their hiring?
22:32
Speaker 11: Oh?
22:33
Speaker 4: Most it really depends, right, twenty five basis points, you know,
22:37
Speaker 4: not that much. What it what it does is what
22:40
Speaker 4: it'll do is if it has the desired effect that
22:45
Speaker 4: a lot of people in corporate America think, which is
22:48
Speaker 4: send the economy back into a hyper drive state, then
22:52
Speaker 4: they continue to The theory would be they'd continue to
22:54
Speaker 4: lower interest rates, and then when money got cheap enough,
22:57
Speaker 4: you could hire people in the in the classes of
23:00
Speaker 4: twenty fifty one hundred. But I don't think twenty five
23:02
Speaker 4: basis points in the next or two sessions from now
23:06
Speaker 4: is going to all of a sudden turn three hundred
23:08
Speaker 4: or four hundred thousand jobs a month. I don't see that. Hey, Tom,
23:11
Speaker 4: is there.
23:11
Speaker 3: Any regionality out there into the hiring market. I'm just guessing,
23:17
Speaker 3: you know, Texas, Florida going crazy? But is there any
23:19
Speaker 3: regionality out there.
23:21
Speaker 4: No, I think you're right. On the Red States. We
23:25
Speaker 4: continue to see Nashville, we continue to see at Birmingham
23:29
Speaker 4: and Alabama and cities like that, and the Triangle in
23:34
Speaker 4: North Carolina just being a hot sector. But now I
23:37
Speaker 4: think other than that, it's I do think you're starting
23:40
Speaker 4: to see a little bit of it move in from
23:42
Speaker 4: the coasts, and I just think that's more of social
23:44
Speaker 4: issues than anything else. So it's where companies will go.
23:47
Speaker 4: I mean, look at I read an article. Don't quote
23:49
Speaker 4: me on it, but that Goldman Sachs has more employees
23:54
Speaker 4: in Salt Lake City than they do in New York.
23:56
Speaker 4: So I think that tells you that second and third
23:58
Speaker 4: tier cities are deaf. A place where corporate America is going.
24:02
Speaker 9: And we're going to Nashville.
24:03
Speaker 4: We are going there.
24:04
Speaker 7: Yeah, I'm super excited. I booked my hotel and I
24:06
Speaker 7: booked the airfare. Okay, so this is big for me.
24:09
Speaker 4: Water slide to die for water? Yeah, Oh it's a
24:12
Speaker 4: water park.
24:14
Speaker 9: Oh no, we go we go to this.
24:16
Speaker 7: Okay, there we go. Bloomberg Intelligence on the road from
24:18
Speaker 7: a water park.
24:20
Speaker 2: Tom Gimble, founder and CEO over at lasal Network, thank
24:23
Speaker 2: you so much. We really appreciate all of that for you,
24:26
Speaker 2: But that's so interesting. It's like, you know, when you
24:28
Speaker 2: stay on the West coast or the East coast, you
24:30
Speaker 2: forget that there's a lot of building happening, particularly in
24:33
Speaker 2: Red states, particularly from some of the infrastructure bills that
24:37
Speaker 2: we've seen. Any respective of that, there's still a lot
24:40
Speaker 2: of build out as well, so that's actually quite interesting.
24:45
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25:03
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25:13
Speaker 2: decades and they are really good at what they do.
25:15
Speaker 2: So on that point, we want to go to anurrog Rana,
25:18
Speaker 2: Bloomberg Intelligence senior technology analyst to give us the breakdown
25:21
Speaker 2: for Apple earning. So we're looking at the best rally
25:24
Speaker 2: in almost eighteen months from Apple stock is up by
25:27
Speaker 2: six percent. I should point out that the S ANDP
25:29
Speaker 2: is really starting to roll over. We're now up only
25:31
Speaker 2: eight tens of one percent, so we'll see how long
25:32
Speaker 2: the rally and Apple lasts. But an a wrong, What
25:35
Speaker 2: was the biggest standout that justifies the rally for you?
25:40
Speaker 3: Yeah?
25:40
Speaker 10: When the results came out, you know, I remembered the
25:42
Speaker 10: code from late Charlie Manger that the secret of happiness
25:46
Speaker 10: and successful marriages low expectations. So I think this is
25:50
Speaker 10: exactly what happened with Apple that you know, people going
25:53
Speaker 10: in were like so pessimistic that any bit of good
25:56
Speaker 10: news was just hailed with you know, the stock react
26:00
Speaker 10: that you're seeing right now.
26:02
Speaker 3: So An Rag, I guess before the print you're talking
26:05
Speaker 3: about what you really want to hear regarding China and
26:08
Speaker 3: their business in China was stabilization?
26:10
Speaker 4: Stabilization? Did you hear that?
26:13
Speaker 10: In fact, he said they were doing very good in China,
26:16
Speaker 10: which is contrary to every data that out there. In fact,
26:18
Speaker 10: a couple of analysts this as asked him that, like,
26:21
Speaker 10: you know, how do you reconcile with all this data
26:23
Speaker 10: on shipments being down versus your comments in China. He's like,
26:27
Speaker 10: I'm not responsible for them, but we are doing okay
26:30
Speaker 10: in China. So it's it's a big dichotomy right now
26:32
Speaker 10: in the market as to you know, who to believe,
26:35
Speaker 10: whether the third party data providers are that are that
26:37
Speaker 10: are talking about a massive decline in iPhones versus Apple
26:41
Speaker 10: that's saying, you know, China is okay.
26:44
Speaker 2: Did you like them spending one hundred ten billion dollars
26:47
Speaker 2: on a buyback. I'm guessing you didn't because Paul was
26:50
Speaker 2: into it.
26:52
Speaker 8: No.
26:52
Speaker 10: Actually, to be very frank they spend over about one
26:55
Speaker 10: hundred billion right now, so the one hundred and ten
26:57
Speaker 10: is a minor upgrade. You know that the real new
27:00
Speaker 10: would have been if they said they're going to do
27:01
Speaker 10: about one hundred and fifty. Frankly, so I think, I know,
27:04
Speaker 10: the headline number looks really big, but they do already
27:07
Speaker 10: spend currently close two hundred billion dollars buying back you know,
27:10
Speaker 10: their share. So I mean, I like it, there's no
27:13
Speaker 10: problem about it. But but I think that's not really
27:15
Speaker 10: what got the stock going. The fact that they said
27:18
Speaker 10: that they're going to grow in you know, those single
27:21
Speaker 10: digits after forever about you know, close to two hundred
27:25
Speaker 10: basis points, you know, impact on FX.
27:27
Speaker 6: That's I think the biggest news at this point.
27:30
Speaker 3: Hey, Ana Rock, I guess their developer conference coming up
27:34
Speaker 3: in June is going to be big for Apple from
27:37
Speaker 3: an AI perspective. What will you be looking for at
27:42
Speaker 3: that conference?
27:44
Speaker 6: So, I mean, my personal preference would be if they
27:46
Speaker 6: do a tie up with Google and use Google's model
27:49
Speaker 6: to run.
27:50
Speaker 10: Some of those stuff, because you know that there is
27:52
Speaker 10: a big unknown out there as to what's going to
27:55
Speaker 10: happen between their relationship with Google when it comes to
27:58
Speaker 10: the default search engine and Google you know, supposedly pays
28:02
Speaker 10: them twenty billion dollars for it. I think that's under
28:05
Speaker 10: a lot of regulatory scrutiny. If Apple were to refine
28:08
Speaker 10: and do another deal with Google where they can you know,
28:11
Speaker 10: mix both those things, it will really help their AI
28:13
Speaker 10: costs because I don't think organically they can do something
28:16
Speaker 10: this quickly. There are news by Margament that they're going
28:19
Speaker 10: to either tie up with Google or Open AI.
28:22
Speaker 6: You know, my preference would be if they tie up
28:24
Speaker 6: with Google over there.
28:26
Speaker 3: So what is that risk for Apple from Google?
28:32
Speaker 10: It is there, but to be honest, it's a it's
28:35
Speaker 10: a it's a it's a one or a zero, which
28:36
Speaker 10: means there's no way to predict which way the judge
28:39
Speaker 10: is going to go. But I also feel that if
28:42
Speaker 10: they if this does come down to that, you know,
28:44
Speaker 10: some kind of illegal issue, the two parties are willing
28:47
Speaker 10: to pay each other or you know, there is a
28:49
Speaker 10: transaction there, so they'll find another way to make it
28:52
Speaker 10: look less like that, you know, a payment for default
28:54
Speaker 10: search engines, maybe per click, or there's some there could
28:57
Speaker 10: be some economics there, but it is a headline issue
29:00
Speaker 10: you at least in the near term for Apple.
29:02
Speaker 2: I have to say anag you do not seem that
29:04
Speaker 2: thrilled or that you've you know, you don't see that
29:08
Speaker 2: thrilled after Apple's quarter.
29:09
Speaker 6: No, no, no, no, that's that's not true. I mean
29:11
Speaker 6: I'm very happy with this.
29:13
Speaker 7: I'm actually skeptical. How about that?
29:15
Speaker 6: No I I no, no, not at all. I'm relieved
29:18
Speaker 6: of what happened from last night.
29:20
Speaker 10: I just need to get to some of these one
29:22
Speaker 10: or two different things that are pending, because I see,
29:25
Speaker 10: at the end of the day, Apple.
29:26
Speaker 6: Is one of the most phenomenal companies right now.
29:27
Speaker 10: There is nobody with an ecosystem that's stronger in the
29:31
Speaker 10: retail world or in the consumer world.
29:33
Speaker 6: But the question is how do they get back to
29:35
Speaker 6: the growth rate and can they get.
29:36
Speaker 10: Rid of some of the regulatory handles Right now, their
29:39
Speaker 10: fees is under a lot of pressure, both in EU
29:41
Speaker 10: and perhaps.
29:42
Speaker 6: Even in the US. So there are a few things.
29:44
Speaker 10: You know, it's not a clear cut story as a
29:46
Speaker 10: Microsoft or an Amazon or an Nvidia at this point.
29:50
Speaker 6: There are certain things that need to be cleaned up.
29:52
Speaker 6: But yeah, no, I'm I'm always a big fan of Apple.
29:55
Speaker 4: Nothing about it.
29:56
Speaker 3: All right, Very good Anna, rog rn I thank you
29:58
Speaker 3: very much. We appreciate that. As always on a Rogronic
30:01
Speaker 3: Technology Analyst or Bloomberg Intelligence.
30:04
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