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Chip Stocks’ Best Quarter Ever Is Ending With Some Wild Swings · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
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  Speaker 1: or watch us live on YouTube.
• 0:24
  Speaker 2: Chip stocks are heading for their best quarter ever, driven
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  Speaker 2: by demand for artificial intelligence equipment, but investors are wondering
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  Speaker 2: how much further the rally can go. So let's put
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  Speaker 2: it to an expert. Man Deep Sing, global head of
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  Speaker 2: tech research for Bloomberg Intelligence Joints, is here. I mean,
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  Speaker 2: what's going on with the world chips.
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  Speaker 3: I don't get it.
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  Speaker 2: I mean, is it just a supplying demand and there's
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  Speaker 2: not enough supply and so anybody who's got them and
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  Speaker 2: is in the driver's seat in terms of pricing.
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  Speaker 4: I mean more so, I would characterize it as a
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  Speaker 4: lot of these companies have huge backlog numbers, notably in video,
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  Speaker 4: which is said they have, you know, up to a
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  Speaker 4: trillion dollars in revenue visibility through the next six seven quarters.
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  Speaker 4: So when you have companies guiding like that and all
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  Speaker 4: the hyperscalers which are spending money on these chips, they
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  Speaker 4: have an aggregate backlog of two trillion. Now, when Jensen
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  Speaker 4: says we will have three to four trillion dollars in
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  Speaker 4: spend by twenty thirty, I think, you know, when you
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  Speaker 4: look at that backlog number, you start to believe that
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  Speaker 4: may actually come true. And video is at the forefront
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  Speaker 4: of monetizing that sort of demand. So there is no
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  Speaker 4: doubt that AI has had an inflection point in terms
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  Speaker 4: of usage and inference. Demand has been off the charts.
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  Speaker 4: But how quickly it's realizing into top line growth for
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  Speaker 4: some of these companies. I think that's where the market
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  Speaker 4: has been positively surprised, and that's why you see estimates
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  Speaker 4: continue to go up.
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  Speaker 5: The Philly Stock Change Semiconductor Index up ninety nine percent
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  Speaker 5: year to date. Is there any don't mean to put
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  Speaker 5: you on the spot here many, but if anybody's going
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  Speaker 5: to know what it's you. Is there any company here
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  Speaker 5: that's not participating in this chip party?
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  Speaker 4: I mean a lot of the hyperscaler stocks haven't done well. Microsoft,
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  Speaker 4: even I would say Meta, Google, and look, some of
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  Speaker 4: it is because these are the companies that are actually
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  Speaker 4: spending the money. Even though I cited that backlog number,
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  Speaker 4: the market is still not giving them the credit for
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  Speaker 4: that backlog because they want to see real revenues. Who
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  Speaker 4: has real revenues. It's your in videos, the you know, tsmcs,
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  Speaker 4: the semicap guys. And so from that perspective, that picks
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  Speaker 4: and shovels straight has worked phenomenally well over the past
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  Speaker 4: two years, and it continues to do well just because
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  Speaker 4: of the duration of this cycle, and you know how
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  Speaker 4: big this technology cycle is proving to be. At some point,
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  Speaker 4: I don't think this memory price increases that we just
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  Speaker 4: saw from Micron or sustainable. In fact, Samsung and Eskhiiniz
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  Speaker 4: talked about investing, you know, eight hundred billion plus in Korea,
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  Speaker 4: so there is talks about adding more supply and then
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  Speaker 4: doing those long term agreements to cap the pricing. So
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  Speaker 4: I feel that pricing lift is not sustainable and it's
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  Speaker 4: a matter of a quarter or two before we start
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  Speaker 4: to see you know, some tapering of that.
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  Speaker 2: Microsoft down twenty three and a half percent year to date.
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  Speaker 2: What's the street what's the street call on this? Why
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  Speaker 2: is this street marking this one down?
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  Speaker 4: Well, because Microsoft had that exclusive tie up with open ai,
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  Speaker 4: which is not there anymore. Open Ai, as you know,
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  Speaker 4: is now on Amazon. They really partnering with any and everyone,
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  Speaker 4: and open Eye is not the leading model anymore. So
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  Speaker 4: it's entropic, and entropic was predominantly Google and Amazon, and
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  Speaker 4: now they have started to use Nvidia. So from that perspective,
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  Speaker 4: Microsoft not having their own LLM like Google, which has
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  Speaker 4: got Gemini, has put them at a disadvantage. And the
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  Speaker 4: narrative right now is the cloud. Azure growth is also
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  Speaker 4: trailing Google Cloud, and so they seem to be slipping
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  Speaker 4: behind when it comes to the hyperscalers. Now, I think,
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  Speaker 4: you know, for a company of Microsoft size to grow
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  Speaker 4: high teens, that twenty percent is still phenomenal growth. And
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  Speaker 4: you still have office three sixty five that will be
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  Speaker 4: a net beneficiary of Agent Takai. So look, narratives get formed.
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  Speaker 4: That's where we had the SaaS pockellips. Microsoft was caught
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  Speaker 4: into the ald as well, and come the earning season
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  Speaker 4: they'll probably prove the naysayer's wrong in terms of you know,
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  Speaker 4: their top line momentum.
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  Speaker 5: Now are you talking about a two point seven trillion
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  Speaker 5: dollar company when you're talking about Microsoft? So what's the
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  Speaker 5: word on the street at about three hundred and seve
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  Speaker 5: bucks is there value here, you know, getting in at
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  Speaker 5: this level with Microsoft?
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  Speaker 4: I mean from a valuation perspective, all these hyperscalers are
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  Speaker 4: trading at probably below their average multiples that they've traded
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  Speaker 4: over the last three years. So from that perspective, if
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  Speaker 4: you factor that backlog number in for someone like Microsoft,
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  Speaker 4: which has a five hundred billion dollar plus backlog number
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  Speaker 4: for their cloud, if that backlog translates into revenue growth,
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  Speaker 4: you know, nice, this company will be much bigger in
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  Speaker 4: revenue than it currently is and probably surpassing five hundred
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  Speaker 4: billion dollars in revenue at some point. So if you
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  Speaker 4: believe in that growth story, then yes, the multiple is cheap.
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  Speaker 4: But if you think and Tropic and open Ai are
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  Speaker 4: going to take a share of Microsoft's on prem revenue
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  Speaker 4: and you know, disrupt cause a much bigger disruption, then
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  Speaker 4: I think that's where you model for the downside.
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  Speaker 1: Stay with us.
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  Speaker 2: More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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• 6:15
  Speaker 2: Let's talk about Nike. They're going to be reporting some
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  Speaker 2: earnings here. They've got to turn around. I think it's
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  Speaker 2: been a lot bumpier than they thought than a lot
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  Speaker 2: of investors thought. I'm a Nike, you know, endorser. I
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  Speaker 2: wear my Nike's all over the place. But apparently there's
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  Speaker 2: a lot more competition out there. Put them Goyle joins
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  Speaker 2: us senior US E e Commerce and retail analysts at
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  Speaker 2: Bloomberg Intelligence put give us the latest on the Nike story.
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  Speaker 2: Where is the company these days?
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  Speaker 6: The company is still under a turnaround. North America is
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  Speaker 6: back on its feet. We're expecting positive sales when they
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  Speaker 6: report this evening. However, the rest of the world is not,
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  Speaker 6: notably China, where we're expecting a high teens sales decline
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  Speaker 6: when they report. The China focus is the largest focus
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  Speaker 6: Monday report earnings. When will China turn is the biggest question.
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  Speaker 6: We don't think it'll turn any time soon, but we
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  Speaker 6: do think that they'll make progress over their fiscal twenty
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  Speaker 6: twenty seven year and hopefully in twelve months it will
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  Speaker 6: be in the same place as North America is today.
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  Speaker 5: Talk to us about Nike as it pertains to the
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  Speaker 5: World Cup. Are they still sort of the force they
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  Speaker 5: once were when it comes to the sport?
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  Speaker 6: So they are, you know, I'd say they're on equal
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  Speaker 6: grounds with Adidas with the exception that Adidas has the ball,
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  Speaker 6: so they do have some elevation to Nike when it
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  Speaker 6: comes to the World Cup. You know, when you think
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  Speaker 6: of Nike, World Cup has become more adjacent to when
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  Speaker 6: you think of Nike. Then I'd say it wasn't the
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  Speaker 6: past where you would associate Nike more with basketball. Aditas
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  Speaker 6: has definitely lost some share over the prior years before
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  Speaker 6: the current CEO to Nike right now, I'd say their
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  Speaker 6: neck and neck and they're definitely still in the game.
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  Speaker 2: What is the issue for Nike in China? What was
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  Speaker 2: what's going on over there?
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  Speaker 6: So there's a lot happening in China that they need
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  Speaker 6: to fix. The first thing that they need to fix
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  Speaker 6: is the inventory. There's too much inventory on the floor
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  Speaker 6: in China. They need to do exactly what they did
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  Speaker 6: in the US, which is clear that inventory, get it
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  Speaker 6: out of the market, and then bring in more new
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  Speaker 6: inventory that resonates with the consumer that's seen to be
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  Speaker 6: more what the consumer wants. How they do that in
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  Speaker 6: the US. When they did that, they did it more
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  Speaker 6: through their direct to consumer channels, which is probably the
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  Speaker 6: right approach. And the second thing that they need to
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  Speaker 6: do is cut back on the discounting. For the longest
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  Speaker 6: time in China, Nike has been seen as a discount brand,
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  Speaker 6: and that's not the case here. When we think of Nike,
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  Speaker 6: we do not think of a discount at leisure brand.
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  Speaker 6: So they need to turn that image and they need
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  Speaker 6: to use local endorsers, local athletes, local celebrities to bring
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  Speaker 6: the brand heat back into the China marketplace with the
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  Speaker 6: new products that they launch.
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  Speaker 5: I'm looking at year to date numbers for Nike and
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  Speaker 5: they're not pretty down thirty six percent, one year return
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  Speaker 5: down forty two percent. The stock is down more than
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  Speaker 5: one percent here ahead of its earnings after the bell.
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  Speaker 5: What do investors need to hear from this company to
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  Speaker 5: start to turn the stock around and get people to
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  Speaker 5: want to buy again.
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  Speaker 6: I think China. It's a China story.
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  Speaker 4: You know.
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  Speaker 6: The turnaround is taking a lot longer than anyone has expected.
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  Speaker 6: It is true that they turned the biggest ship around,
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  Speaker 6: which is North America, but China is their most profitable
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  Speaker 6: region and there is no line in sight on one
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  Speaker 6: China will improve. It's still very early days. We're awaiting
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  Speaker 6: their investorday in the fall to really get a better
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  Speaker 6: idea of their own outline for the next three to
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  Speaker 6: five years. I think right now the question is will
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  Speaker 6: they still have that investorday. So there's two things that
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  Speaker 6: I'm looking for when they report today, update on China
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  Speaker 6: and an update on their investorday. They just hired a
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  Speaker 6: new c so while that, you know, investries are asking,
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  Speaker 6: well they still have their analyst.
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  Speaker 2: Has Nike lost its mojo in terms of product development,
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  Speaker 2: knowing what's hit, what will sell, all that kind of
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  Speaker 2: stuff that I think a lot of people associate with
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  Speaker 2: the brand.
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  Speaker 6: I don't think it's that Nike's lost its mojua. I
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  Speaker 6: think that like Nike has allowed competition to encrypten their
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  Speaker 6: space and now they have to win it back, whereas
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  Speaker 6: before they just had it. So they definitely are pressing
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  Speaker 6: the pedal on innovation. We do see that what they're
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  Speaker 6: launching is working and it's doing really well. They just
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  Speaker 6: have to move faster.
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  Speaker 5: Who are some of their biggest endorse who do they
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  Speaker 5: have deals with right now? In terms of endorsements?
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  Speaker 6: Nike, do you know, so they have you know, the
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  Speaker 6: biggest Their biggest franchise is still the Jordan franchise, right,
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  Speaker 6: so we know we know that's the biggest. Caitlin Clark,
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  Speaker 6: I think it's the one name that's new to them,
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  Speaker 6: and I think it's an interesting one because it helps
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  Speaker 6: them gain momentum in the women's category. So when you
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  Speaker 6: think of Nike, it's profoundly been a men's business, seen
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  Speaker 6: lots of endorsers across the men's line up, basketball, et cetera.
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  Speaker 6: So having Caitlin Clark added to their roster, I think
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  Speaker 6: is a nice win for them. Also, Kim Kardashian right
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  Speaker 6: with the Skims brand, so that line that they partnered
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  Speaker 6: with Nike on. I think these are some new and
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  Speaker 6: great partnerships that will help them not just gain visibility
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  Speaker 6: in the sports rare market, but also with women, an
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  Speaker 6: area where there is no large lead the Nike has
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  Speaker 6: like it has in the men's world.
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  Speaker 4: Right.
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  Speaker 5: You know, you were talking about letting the competition sort
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  Speaker 5: of encroach, and Paul, you and I were talking about
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  Speaker 5: og An Andovi on the knicks wearing sketchers that during
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  Speaker 5: that pivotal moment, right and came four. I mean, now
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  Speaker 5: you've got another brand in there. I guess put him that.
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  Speaker 5: Maybe Nike wasn't you know, didn't see coming. Oh boy,
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  Speaker 5: now we have to compete against Sketchers.
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  Speaker 6: I'll tell you I definitely didn't see that coming. It was.
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  Speaker 6: It was definitely. When I saw that, I thought, Wow,
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  Speaker 6: Sketchers did it. I think, Look, I think Sketchers is
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  Speaker 6: in the value lineup right, So when you think of Sketchers,
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  Speaker 6: I'd say it competes with Nike's shoes that are priced
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  Speaker 6: under one hundred dollars. But when you think of the
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  Speaker 6: Nike's premium line like the Pegasus Premium and others, they
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  Speaker 6: do have a stronger foot there. And I do think
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  Speaker 6: that as long as they continue to push innovation and
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  Speaker 6: not fall back like they did in the past, I
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  Speaker 6: think Nike still has mind share amongst the consumers. When
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  Speaker 6: we run our biannual survey on sneakers, Nike is still
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  Speaker 6: the top preferred sneaker brand of choice amongst consumers.
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  Speaker 2: So, you know, we don't talk to much about anymore Punum,
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  Speaker 2: and we used to talk to you a lot about
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  Speaker 2: it is tariffs. Is that just in the rear room
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  Speaker 2: mirror for your retailers that they've kind of just figured
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  Speaker 2: it out and it's all kind of in the soup right.
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  Speaker 6: Now, so they figured it out. But the nice thing, Paul,
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  Speaker 6: and what we're watching for in earnings is the refunds,
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  Speaker 6: So the refins, they're starting to come in, and Nike
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  Speaker 6: quietly and its CFO announcement also announced that it'll get
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  Speaker 6: a benefit from refunds, a one time benefit. We don't
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  Speaker 6: know the amount yet, so that's another thing that we'll
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  Speaker 6: be watching for. But we do expect retailers in the
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  Speaker 6: back half to start talking about these apa refunds and
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  Speaker 6: what they plan to do with that cash. Are they
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  Speaker 6: going to reinvest it in the business. Are they going to
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  Speaker 6: give it back to the consumers, because as we know,
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  Speaker 6: Nike did raise prices due to tariffs, So do the
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  Speaker 6: prices go back to the consumer or do they get
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  Speaker 6: reinvested in innovation.
• 13:27
  Speaker 1: Stay with us more from Bloomberg Intelligence coming up after this.
• 13:34
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 13:38
  Speaker 1: weekdays at ten am. E's durned on Apple, Cocklay and
• 13:40
  Speaker 1: Android Auto with the Bloomberg Business app. Listen on demand
• 13:44
  Speaker 1: wherever you get your podcasts or watch us live on YouTube.
• 13:48
  Speaker 2: Earnings continue to kind of trickle in here coming up
• 13:51
  Speaker 2: there for the close today. Constellation Brands, I think beverages,
• 13:55
  Speaker 2: think booze, all that kind of good stuff. They're reporting
• 13:57
  Speaker 2: after the close today. Stocks off a couple of percent today, flat.
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  Speaker 7: On the year.
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  Speaker 2: It's got a market cap about twenty three and a
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  Speaker 2: half billion dollars. Ken Shay joins us here, senior at
• 14:07
  Speaker 2: Consumer Products analyst at Bloomberg Intelligence. Ken remind us of
• 14:10
  Speaker 2: what Constellation Brands is and kind of what are you
• 14:12
  Speaker 2: expecting after the close today?
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  Speaker 7: Yeah, hi, Paul, Well, Constellation Brands is best known for
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  Speaker 7: its family of Medello Corona beers. Yeah, they've been slowly
• 14:22
  Speaker 7: downsizing their one of spirits division, Beer now comprised about
• 14:26
  Speaker 7: ninety three percent of their sales. So it's all about
• 14:29
  Speaker 7: beer right now for this company.
• 14:31
  Speaker 5: It's so funny. We were just talking this morning on
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  Speaker 5: surveillance about beer sales going through the roof in places
• 14:37
  Speaker 5: like Massachusetts because of the World Cup. So I have
• 14:40
  Speaker 5: to think that's you know, that's a good thing for
• 14:42
  Speaker 5: some of these beer companies. But overall, is Constellation Brands
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  Speaker 5: suffering from I think what a lot of these alcohol
• 14:48
  Speaker 5: companies are suffering from. Is just a change in consumer behavior,
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  Speaker 5: especially younger folks just not drinking as much as we've
• 14:55
  Speaker 5: seen other generations do.
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  Speaker 7: Yeah, I think you're right, Alexi. So that's certainly a
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  Speaker 7: big piece of it. It's hard to quantify how much
• 15:01
  Speaker 7: of it is, but I think the companies are slowly
• 15:05
  Speaker 7: conceding that demographic changes are occurring in this country. You know,
• 15:09
  Speaker 7: gen z is not drinking as much as their parents.
• 15:12
  Speaker 7: Illegal cannabis is now easily available from in most places
• 15:17
  Speaker 7: around the country, you know, a zepic and the GLP
• 15:22
  Speaker 7: one drugs users have cut back. All those things continue
• 15:25
  Speaker 7: to pressure this industry. But also yet, can't you can't
• 15:29
  Speaker 7: forget also the cumative effective inflation. I mean, the beer
• 15:32
  Speaker 7: prices have gone pretty significantly over the last few years,
• 15:36
  Speaker 7: to the point where a lot of beer drinkers are
• 15:38
  Speaker 7: getting sticker shock when they go to pick up a
• 15:40
  Speaker 7: six pack or a twelve pack or whatever. All those
• 15:42
  Speaker 7: things are conspiring to put pressure on this industry, and
• 15:46
  Speaker 7: we think this is going to be a quarter with
• 15:48
  Speaker 7: a company will say, you know, we're dealt with a
• 15:51
  Speaker 7: challenging industry. We're doing well within this, you know, tough group,
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  Speaker 7: But nevertheless, it's hard to overcome those kind of pressures.
• 15:59
  Speaker 2: Modello and some of those beer brands at appeal to
• 16:04
  Speaker 2: minority Hispanic community. How's that being impacted by the change
• 16:07
  Speaker 2: in immigration.
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  Speaker 7: Well, we're going to get a good barometer of that today.
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  Speaker 7: Over the last year or so, you know, the immigration
• 16:15
  Speaker 7: crackdowns and a lot of these communities have put a
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  Speaker 7: real damper on you know, that group's willingness to socialize,
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  Speaker 7: and beer is a big part of that. But now
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  Speaker 7: we're facing comparisons versus that last year. I think probably
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  Speaker 7: on a comp basis, well probably it's almost less of
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  Speaker 7: a factor. I think more of a factor will be
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  Speaker 7: some of the items that I mentioned before. Also, we
• 16:39
  Speaker 7: see the Hispanic demographic employment rates have improved over the
• 16:43
  Speaker 7: last few months and quarters, so I don't think that's
• 16:47
  Speaker 7: going to be as much of a drag as the
• 16:49
  Speaker 7: last few quarters.
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  Speaker 5: Ken what about tariffs? Are they a story for constellation brands?
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  Speaker 7: You know it had been up until about April six
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  Speaker 7: was the day that they no longer apply. Now this
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  Speaker 7: quarter ends May thirty first, so they're not going to
• 17:05
  Speaker 7: get the full benefit of the end of those aluminum
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  Speaker 7: can tariffs. But it will be better than a year ago.
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  Speaker 7: I want to look at it that way. Unfortunately, though,
• 17:15
  Speaker 7: to a degree, you know, their big new brewery down
• 17:19
  Speaker 7: in Mexico of Avera Cruz is going to take up
• 17:23
  Speaker 7: higher depreciation charges. Siver an accounting sense, you're going to
• 17:26
  Speaker 7: get higher depreciation charges off setting a lot of the
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  Speaker 7: benefit of the tariff costs. So it's going to be
• 17:32
  Speaker 7: a lot of mixed messages in this quarter. But when
• 17:35
  Speaker 7: the dust settles, I think you're they're going to eke
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  Speaker 7: out of modest margin improvement in this quarter, which I
• 17:41
  Speaker 7: think will be perceived positively.
• 17:43
  Speaker 2: Ken We've seen a lot of consolidation in the beer business.
• 17:45
  Speaker 2: Is Constellation potential target?
• 17:48
  Speaker 7: I don't think they are, Paul. You've seen so much
• 17:51
  Speaker 7: consolidation in the beer market to the point where I
• 17:54
  Speaker 7: don't really envision it going forward in a big way.
• 17:58
  Speaker 7: I don't think this is going to be a play.
• 17:59
  Speaker 7: This is the number two and a number two company.
• 18:01
  Speaker 7: They have twenty almost twenty three percent dollars share of
• 18:04
  Speaker 7: the beer markets, behind only anheusard Bush's thirty three percent,
• 18:10
  Speaker 7: So I don't see it's already pretty consolidated.
• 18:13
  Speaker 1: Stay with us.
• 18:14
  Speaker 2: More from Bloomberg Intelligence coming up after this.
• 18:20
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• 18:24
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• 18:30
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• 18:35
  Speaker 2: Let's go to this economic data. The Conference Board came
• 18:37
  Speaker 2: out Confidence ninety one point two was the reading. The
• 18:41
  Speaker 2: consentus was ninety four point four, so that's a little
• 18:45
  Speaker 2: bit disappointment, but it's better than last month, which was
• 18:48
  Speaker 2: revised down to ninety point six here, so maybe or
• 18:51
  Speaker 2: gas help there. Aaron McLaughlin, she's a senior Condoms at
• 18:54
  Speaker 2: the Conference Board. Aaron, what do you make of some
• 18:56
  Speaker 2: of the data you guys put out today?
• 19:00
  Speaker 3: Paul, Well, you know it is tacked up a little
• 19:03
  Speaker 3: bit consumer confidence of zero point six percent, and we're
• 19:08
  Speaker 3: really thinking that the consumer was feeling some optimism because
• 19:12
  Speaker 3: gas prices have been trending down for six weeks. Our
• 19:16
  Speaker 3: consumer confidence survey was taken June first through twenty third,
• 19:20
  Speaker 3: so they felt some optimism with the Iran war perhaps
• 19:24
  Speaker 3: getting a deal coming to the end. So we think
• 19:27
  Speaker 3: that that's really what helped the survey.
• 19:30
  Speaker 5: Yeap gas price is down twelve percent in just the
• 19:33
  Speaker 5: past month now at around three eighty five. I believe
• 19:37
  Speaker 5: a gallon for a gallon of unleaded very good. So
• 19:40
  Speaker 5: after you know, spending quite a bit of time above
• 19:43
  Speaker 5: four dollars a gallon, Aaron, tell us about how folks
• 19:47
  Speaker 5: are feeling when it comes to six months from now,
• 19:50
  Speaker 5: because I know you also look at expectations for what's
• 19:53
  Speaker 5: happening in the not too distant future. Are people feeling
• 19:55
  Speaker 5: more optimistic about the future.
• 19:58
  Speaker 3: They are, so ourations index it went up three percent,
• 20:02
  Speaker 3: and that is looking you know, asking consumers to look
• 20:04
  Speaker 3: forward six percent, I'm sorry, six months from now, and
• 20:09
  Speaker 3: you know, I think that they really speaks to the
• 20:11
  Speaker 3: consumer being very, very resilient and they don't imagine that
• 20:16
  Speaker 3: things are going to get worse perhaps in six months,
• 20:19
  Speaker 3: and so we don't anticipate any big changes of that.
• 20:22
  Speaker 3: And overall, you know, the what we saw in the
• 20:27
  Speaker 3: consumer confidence index is typical to what has been the
• 20:30
  Speaker 3: last year or so overall.
• 20:33
  Speaker 2: So when you think about consumer confidence, what are the
• 20:36
  Speaker 2: key key drivers there?
• 20:37
  Speaker 7: Aaron?
• 20:38
  Speaker 2: For your model as it relates to maybe employment, inflation,
• 20:41
  Speaker 2: outlooks things like that.
• 20:42
  Speaker 6: Right, So with the present situation.
• 20:45
  Speaker 3: They are sort of measuring business and labor market conditions
• 20:50
  Speaker 3: and same thing for themselves when they think about their
• 20:52
  Speaker 3: own employment. And I will say that's really the only
• 20:55
  Speaker 3: sort of negative that's coming up is that consumers are
• 20:59
  Speaker 3: thinking that the labor market that maybe there aren't as
• 21:01
  Speaker 3: many jobs that are going to be open in the future.
• 21:04
  Speaker 3: It might be a little bit more difficult to get
• 21:06
  Speaker 3: a job. So that is sort of the negative that's
• 21:09
  Speaker 3: sort of coming through.
• 21:11
  Speaker 5: Because yeah, I mean, are you were just talking about
• 21:13
  Speaker 5: your measure of expectations actually rising three percent. I think
• 21:17
  Speaker 5: that's pretty that's a pretty big jump, but the indicator
• 21:19
  Speaker 5: of present conditions actually fell. And is it concern over
• 21:23
  Speaker 5: jobs that sort of led that.
• 21:25
  Speaker 3: Drop, Yes, it is so consumers felt, you know, that
• 21:30
  Speaker 3: they see that business conditions and labor market conditions are
• 21:35
  Speaker 3: a little bit weaker, and that could be them speaking
• 21:38
  Speaker 3: to higher prices and also labor market conditions. Is also
• 21:43
  Speaker 3: interesting to see that consumers do expect higher interest rates
• 21:47
  Speaker 3: over the next twelve months, and that is something that
• 21:50
  Speaker 3: we ask and so that's sixty one and a half
• 21:53
  Speaker 3: percent expect in twelve months that interest rates could be higher.
• 21:56
  Speaker 3: So I think the consumers know that inflation is persist
• 22:00
  Speaker 3: they hear that, they understand it, and they see it
• 22:02
  Speaker 3: themselves at the grocery store, at the gas pump, and
• 22:05
  Speaker 3: with their own utilities.
• 22:07
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