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US Labor Market Sends Mixed Signals · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast.
0:02
Speaker 2: I'm Paul Sweeney alongside my co host Matt Miller. Every
0:05
Speaker 2: business day we bring you interviews from CEOs, market pros,
0:09
Speaker 2: and Bloomberg experts, along with essential market moving news. Find
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0:17
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0:21
Speaker 1: Let's get back to the macrofront, because this payroll report
0:25
Speaker 1: really is It's like, it's good news, right if you're
0:27
Speaker 1: an employed American, Right, if you're Chairman Powell, you're probably
0:31
Speaker 1: having kind of a breakdown in Washington somewhere. You are
0:34
Speaker 1: seeing futures higher off this. I'm surprised we're not seeing
0:37
Speaker 1: more of a dent. But just to sum it up,
0:39
Speaker 1: three hundred and thirty nine thousand new jobs reported last month.
0:43
Speaker 1: The estimate was about one hundred and ninety five thousand
0:46
Speaker 1: according to the Bloomberg Terminal.
0:47
Speaker 3: But that coupled with an unemployment rate which rose by
0:51
Speaker 3: its biggest one month increase since April twenty twenty three
0:55
Speaker 3: point seven percent. Now, is that people coming back in
0:58
Speaker 3: the job market?
0:59
Speaker 4: Where is that? You know? Is that? Does it a
1:03
Speaker 4: broader sign of enthusiam people coming back.
1:06
Speaker 3: Yeah, but you know, we'll discuss this and plenty more
1:10
Speaker 3: with Tom Lacel.
1:12
Speaker 4: He joins us. Sorry, Tom Gimbal, excuse me from the network.
1:18
Speaker 4: I've been called worse Friday morning.
1:19
Speaker 5: Yeah.
1:20
Speaker 4: I appreciate your joining us.
1:21
Speaker 6: That's good to be with you, guys. I'm a nerd too,
1:23
Speaker 6: by the way, if we can get I want to
1:25
Speaker 6: be to the nerd party.
1:26
Speaker 7: Welcome.
1:27
Speaker 4: Yeah.
1:28
Speaker 3: So talk me through some of what you were seeing
1:30
Speaker 3: from this job report, what you're seeing from trends and
1:34
Speaker 3: staffing and recruiting across the country, and does it dovetail
1:38
Speaker 3: with this positive numbers that we've seen today.
1:39
Speaker 6: I mean, first and foremost, the news today was fantastic,
1:43
Speaker 6: and any anybody painting it as anything other than fantastic,
1:47
Speaker 6: in my opinion, is crazy. I think what we've got
1:50
Speaker 6: now is that people don't talk about is versus two
1:53
Speaker 6: thousand and nine or even two thousand and one, is
1:56
Speaker 6: that there's more companies that exist to start art up
2:00
Speaker 6: space is easier, there's more venture money on the sidelines,
2:04
Speaker 6: so there's more companies for people to go work at
2:06
Speaker 6: when they get laid off from big tech. So we
2:08
Speaker 6: saw and we have these gig economies. I mean my theory,
2:10
Speaker 6: which hasn't I haven't had a chance to prove it
2:12
Speaker 6: out yet. But is that unemployment rose when we had
2:16
Speaker 6: added over three hundred thousand jobs because the gig workers
2:21
Speaker 6: were going back to work, right, So you had the
2:23
Speaker 6: unemployment rise because more people were filing from being laid
2:26
Speaker 6: off from big tech, but you had more people re
2:29
Speaker 6: entering the workforce from the gig economy. The dog walkers
2:32
Speaker 6: are going back to work, guys.
2:33
Speaker 1: So if I had to hypothetically big emphasis and hypothetically
2:36
Speaker 1: go find a new job, how hard would would that
2:40
Speaker 1: really be? Or would I be kind of scooped up?
2:42
Speaker 1: Broadly speaking? When we're looking just how tight this labor
2:45
Speaker 1: market is.
2:45
Speaker 7: Is this still.
2:47
Speaker 1: A job lookers market?
2:49
Speaker 6: I think it's I think the playing field has been even.
2:52
Speaker 6: I think what would happen eighteen months ago is you
2:56
Speaker 6: would have gotten a forty thousand dollars increase, right or
2:58
Speaker 6: a thirty percent increase or whatever the numbers were today.
3:01
Speaker 6: You'd go and maybe you get a bump if you know,
3:04
Speaker 6: you've got a great resume and what have you. But
3:07
Speaker 6: there's still a standpoint where companies are hiring people and
3:10
Speaker 6: great people are in demand.
3:12
Speaker 4: Where are you seeing most of the.
3:14
Speaker 3: Strength you know, one of some of the things that
3:17
Speaker 3: came through today, big boost and construction, employment, leisure and hospitality.
3:20
Speaker 3: Those still significantly below pre pandemic levels.
3:24
Speaker 4: Are we going.
3:24
Speaker 3: Back to a to a pre pandemic sort of environment
3:29
Speaker 3: in terms of the sectors that need people.
3:32
Speaker 6: Yeah, My opinion is that the effect of the pandemic
3:36
Speaker 6: is really behind us. And I'd love to say that
3:40
Speaker 6: a year from now, no one will even talk about it.
3:42
Speaker 6: But whenever there's bad news, people want something to blame.
3:45
Speaker 6: And where we're at right now is healthcare continues to grow.
3:50
Speaker 6: You're right about the service economy and hospitality. We haven't
3:53
Speaker 6: seen that yet. I believe in the summer months we'll
3:55
Speaker 6: get that bump with summer travel coming out of the
3:58
Speaker 6: Memorial Day holiday, which always tends to happen. It continues
4:01
Speaker 6: to be I mean, when you have the security breaches
4:04
Speaker 6: to continue to have, it is not going anywhere. Accounting
4:07
Speaker 6: and finance continues to be extremely hot of hiring, which
4:11
Speaker 6: means companies are doing back office work, which means M
4:14
Speaker 6: and A is continuing to be there because there's money
4:16
Speaker 6: on the sidelines and it might not be IPOs, it
4:18
Speaker 6: might be more companies going private, as we're seeing the
4:20
Speaker 6: smallest amount of IPOs that we've had in years.
4:23
Speaker 8: Right.
4:23
Speaker 1: Well, one of the pieces of this report, which kind
4:25
Speaker 1: of made it a little bit of a mixed report
4:27
Speaker 1: and not just kind of polarized, was that there were
4:31
Speaker 1: pieces of the support that suggested maybe not all is
4:33
Speaker 1: great in the labor market, like productivity, for example, being
4:36
Speaker 1: substantially lower. How do you measure that though, and how
4:40
Speaker 1: can you really say, Look, you're starting to see a
4:43
Speaker 1: trend here where things like work from home or benefits,
4:46
Speaker 1: or the idea that it is a very tight labor
4:47
Speaker 1: market isn't perhaps having a bigger read through into the
4:51
Speaker 1: broader economy.
4:52
Speaker 6: Yeah, I think the productivity measurements, you know, put five
4:54
Speaker 6: economists in a room and get five different answers. I
4:57
Speaker 6: just think that that's not where we want to go.
4:59
Speaker 6: I think what we've seen is is that in the
5:01
Speaker 6: second half of twenty twenty and in twenty twenty one,
5:03
Speaker 6: productivity from remote work and homework was great because people
5:06
Speaker 6: couldn't leave their houses. There was no travel, there was
5:09
Speaker 6: no going to restaurants, you couldn't do those things. And
5:12
Speaker 6: today you can do whatever you want in productivity drops.
5:16
Speaker 6: And now we're seeing that the smartest people in the
5:18
Speaker 6: room big tech, they over hired. They didn't know, they
5:21
Speaker 6: didn't know what they were doing. And now we're on
5:23
Speaker 6: an even playing field and we're seeing that companies are
5:27
Speaker 6: laying people off. They're saying get back in the office,
5:29
Speaker 6: and and why are they because they're not seeing the
5:32
Speaker 6: growth that they want to have.
5:33
Speaker 1: Well, let's go back there to the big tech story.
5:36
Speaker 1: I feel like in retrospect it's this bay like, oh wow,
5:38
Speaker 1: the Apples and the Microsoft, they made this wrong call.
5:41
Speaker 1: But here we are talking.
5:43
Speaker 7: About them doing this big, massive.
5:45
Speaker 1: Investment things like AI and the cloud and in stem
5:49
Speaker 1: and not really laying off workers in the way that
5:52
Speaker 1: say Gold miss Axis for example, or third round of
5:54
Speaker 1: layoffs or some of the industrial names are talk to
5:57
Speaker 1: us about the sustainability of war tech right now.
6:01
Speaker 6: Yeah, So I think there's a couple of things. Number one,
6:03
Speaker 6: and touching on the AI thing that you were talking
6:05
Speaker 6: about before I came on, is that AI today is
6:08
Speaker 6: what e commerce was twenty years ago. Okay, right, so
6:12
Speaker 6: you know that the whole we've all heard the pets
6:14
Speaker 6: dot com thing. Eight thousand times, right. But that's what
6:16
Speaker 6: we're talking about right now, is that if brick and
6:19
Speaker 6: mortar companies would have gotten on the e commerce train
6:22
Speaker 6: right off the bat, a lot of e commerce companies
6:24
Speaker 6: wouldn't have. If Walmart died e commerce as fast as
6:27
Speaker 6: Amazon did, Amazon probably wouldn't be Amazon today, right. And
6:31
Speaker 6: that's what's going to happen with AI, except people get
6:33
Speaker 6: it now every company is going to be using AI.
6:35
Speaker 6: So the playing field is basically going to be even.
6:37
Speaker 9: Right.
6:38
Speaker 1: Is there even the labor to support that?
6:39
Speaker 7: Though?
6:40
Speaker 6: Well, there's Now we're going to go into a whole
6:42
Speaker 6: nother thing that I know you guys probably don't want
6:44
Speaker 6: to talk about with me, But that's the immigration problem
6:46
Speaker 6: that we have. Right. The problem with technology hiring is
6:49
Speaker 6: we're educating really, really right people and we're sending them
6:51
Speaker 6: back to where they're from instead of allowing them to
6:54
Speaker 6: stay into the work. And the layman on the street
6:56
Speaker 6: things that immigration is people coming from Mexico and Central America,
6:59
Speaker 6: and that is one an aspect of the labor problem
7:01
Speaker 6: on the blue collar standpoint for the most part.
7:03
Speaker 3: Sure, And I guess you know you talk to food
7:05
Speaker 3: service companies and they say they're chronically understaffed.
7:09
Speaker 4: It's very hard for them to find, you know. So
7:12
Speaker 4: one of the things that the FED is looking.
7:13
Speaker 3: At is a year and forecast of four and a
7:15
Speaker 3: half percent employment. We're up to three point seven percent today,
7:19
Speaker 3: but that's still a pretty wide gap.
7:21
Speaker 6: We're not going to hit four and a half this year. Okay, really, yeah,
7:25
Speaker 6: we won't hit four and a half this year. I
7:27
Speaker 6: think that. I just believe that number one, per my
7:31
Speaker 6: earlier comment that there's more companies. So if Salesforce or
7:35
Speaker 6: Golden Mien or whomever lays off every company, this isn't
7:39
Speaker 6: nineteen seventy five, right, where if a company, if General
7:42
Speaker 6: Motors lays off, no one's going to hire those people. Right.
7:46
Speaker 6: If Salesforce lays people off, General Motors would hire them. Right.
7:51
Speaker 6: Everybody goes cross industry now and the world's flat, and
7:55
Speaker 6: industries are flat, and now people don't If you're in
7:57
Speaker 6: the car business, you don't have to stay in the
7:59
Speaker 6: car business. If you're in big tech, you don't have
8:01
Speaker 6: to stay in big tech. So there's a lot more
8:03
Speaker 6: transferable skills, and companies will start if you've got extra cash,
8:07
Speaker 6: you'll start a new division with talent that you have.
8:10
Speaker 6: We have more of an entrepreneurial spirit and people to
8:12
Speaker 6: do that, So I think that unemployment will come close
8:15
Speaker 6: to four and a half.
8:15
Speaker 7: Yeah.
8:16
Speaker 1: Well, Tom Gimble, CEO at Lasal Network.
8:20
Speaker 8: You're listening to the Team Ken's live program Bloomberg Markets
8:24
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Speaker 8: demand wherever you get your podcasts.
8:34
Speaker 1: Let's talk about the macro though here, because I think
8:37
Speaker 1: still the shocker of the day is this perils report
8:41
Speaker 1: three hundred and thirty nine thousand, when that's SMATE of
8:45
Speaker 1: just one hundred and ninety five thousand, and I think
8:48
Speaker 1: it's a surprise to everyone both on Wall Street and
8:51
Speaker 1: Main Street as well. We even arguing in Washington, let's
8:54
Speaker 1: bring a true expert here. Amy Glazier, Senior VP of
8:57
Speaker 1: Business Operations over at a Deco. She boasts two decades
9:02
Speaker 1: of experience and things like staffing management, business operations, so
9:06
Speaker 1: she really is the expert to kind of talk about
9:08
Speaker 1: what is going on.
9:09
Speaker 7: On the ground.
9:10
Speaker 1: Amy, how does this work exactly? We keep waiting for
9:14
Speaker 1: this momentum out of the labor market to kind of slow,
9:17
Speaker 1: if not dissipate completely, and it just seems to be
9:20
Speaker 1: getting stronger.
9:21
Speaker 7: How does that work on the ground.
9:23
Speaker 9: Yeah, I think the word of today happens to be
9:25
Speaker 9: resiliency as it comes to the labor market. You know,
9:28
Speaker 9: this is the fourteenth straight month of job creation really
9:32
Speaker 9: beating expectations. And although we see a lot and hear
9:36
Speaker 9: a lot about fears of alumining recession and a lot
9:38
Speaker 9: of negativity, at the end of the day, there's still
9:41
Speaker 9: almost two open jobs for every single job seeker. And
9:45
Speaker 9: it's something my team and I see on the ground
9:47
Speaker 9: every single day. Emplawyers are still fighting for top talent,
9:51
Speaker 9: They're still trying to get creative, they're being more flexible,
9:55
Speaker 9: and really the data speaks to what I think a
9:59
Speaker 9: lot of hiring managers are seeing in their day to
10:02
Speaker 9: day world.
10:04
Speaker 4: Amy.
10:04
Speaker 3: Where are you seeing the most strength? What sectors are
10:09
Speaker 3: leading this charge?
10:11
Speaker 9: So it's interesting you have to go almost region by region,
10:14
Speaker 9: industry by industry. We continue to see leisure and hospitality
10:19
Speaker 9: are hot. We've seen a lot of business services, healthcare
10:23
Speaker 9: always in demand. An interesting thing to notice that, you know,
10:27
Speaker 9: we just wrapped up the main jobs report. We're heading
10:29
Speaker 9: into June, and I'm already talking to our seasonal hires
10:34
Speaker 9: about quarter four. So we're used to talking about Christmas
10:37
Speaker 9: in July, and we're pretty much talking about Christmas in
10:40
Speaker 9: May in June right now. So I think employers are
10:44
Speaker 9: forward looking based on the lack of availability of talent
10:49
Speaker 9: in the market. So we continue to see those shifts
10:52
Speaker 9: based on a lot of different nuances.
10:55
Speaker 3: You know, that's interesting because one of the things that
10:58
Speaker 3: came out in this jobs report was that leisure and
11:00
Speaker 3: hospitality are still significantly below pre pandemic levels. Does the
11:06
Speaker 3: enthusiasm you're hearing from executives, from hiring managers at the
11:10
Speaker 3: moment suggest that will change anytime soon.
11:15
Speaker 9: I think they just have such a faraway to go,
11:17
Speaker 9: and the gap was so wide in their def sit
11:20
Speaker 9: it's taking them longer to crawl out of it than
11:23
Speaker 9: they expected. So we continue to see momentum. We continue
11:26
Speaker 9: to see the hospitality and leisure sector try and do
11:30
Speaker 9: everything they can to really attract those workers and not
11:33
Speaker 9: only attract them, but also retain them. You know, not
11:37
Speaker 9: only in hospitality, but specifically in manufacturing and some of
11:40
Speaker 9: our other employers. We're seeing this huge trend on bringing
11:44
Speaker 9: back retirees. And the great thing about that is we're
11:47
Speaker 9: also seeing the appetite from those that have retired to
11:50
Speaker 9: return from the workforce. In fact, we're seeing about one
11:53
Speaker 9: in every six retirees are looking to return to the workforce.
11:57
Speaker 9: Part of that due to a little bit of economic uncertainty,
12:01
Speaker 9: so employers are really leveraging and capitalizing on that as
12:05
Speaker 9: an opportunity to fill this gap.
12:07
Speaker 7: So bring that.
12:08
Speaker 1: Down kind of sector wise here in a previous segment,
12:10
Speaker 1: we were talking about perhaps some of the sustainability in
12:14
Speaker 1: the tech sector. For example, when we're talking about these
12:18
Speaker 1: kind of labor market qualities, is it equal among all sectors.
12:23
Speaker 9: Definitely not. So when you look at like the manufacturing sector,
12:27
Speaker 9: retirees are a perfect opportunity. They've got the skills needed
12:31
Speaker 9: to keep production moving and high productivity output less of
12:35
Speaker 9: a training time. And that's an industry where we're seeing
12:37
Speaker 9: this huge skills gap. So that's a different problem than
12:42
Speaker 9: what we see in the tech sector. What we're seeing
12:44
Speaker 9: in the tech sector today is that although you know,
12:47
Speaker 9: we've heard about layoffs from massive employers and we keep
12:50
Speaker 9: continuing to see challenges there, we are seeing that folks
12:53
Speaker 9: that have lost their job are finding a new one
12:57
Speaker 9: very quickly. So I think there are a lot of
13:00
Speaker 9: different factors each industry is having to battle when it
13:04
Speaker 9: comes to their talent strategy.
13:07
Speaker 3: You know, this is that's interesting that you say that
13:09
Speaker 3: because an earlier guest on this program was talking as
13:11
Speaker 3: well about how some of these folks laid off from
13:14
Speaker 3: tech companies are it gets diverse in their skill sets
13:19
Speaker 3: and able to go out there and find Yeah, talk
13:21
Speaker 3: to me more about that.
13:22
Speaker 4: We have just about a minute left.
13:25
Speaker 9: Yeah, So I think there's a big difference between an
13:27
Speaker 9: industry and a skill set and occupation. So although the
13:31
Speaker 9: tech sector is an industry maybe declining, those skill sets
13:35
Speaker 9: are in hot demand across all industries. So the need
13:38
Speaker 9: for technology professionals exist in those that are still growing,
13:43
Speaker 9: so in the hospitality sector and the healthcare sector, they
13:46
Speaker 9: still need those unique skill sets that happen to lie
13:49
Speaker 9: over in the technology sector. So they're capitalizing on that
13:53
Speaker 9: as well, which is partially what makes it great news
13:57
Speaker 9: for those that have faced some you know, some hard
13:59
Speaker 9: times with recently.
14:01
Speaker 1: Yeah, certainly something we're gonna be keeping an eye on
14:03
Speaker 1: very very closely.
14:04
Speaker 7: Amy Glacier, Senior VP over at a deco. We thank you.
14:07
Speaker 8: You're listening to the tape canser our live program, Bloomberg
14:10
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14:14
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14:17
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14:20
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14:26
Speaker 1: I think everyone's really really psyched for this weekend, at
14:28
Speaker 1: least the equity market certainly, certainly is. And a lot
14:32
Speaker 1: to digest there, Maddy from the payrolls. As John had mentioned,
14:37
Speaker 1: you've got the Chinese stimulus, you've got some good earnings,
14:40
Speaker 1: some bad earnings, a little bit of a mixed pot there.
14:43
Speaker 10: Yeah, and I'm so glad pretty that you flagged the
14:45
Speaker 10: China story to me. I was reading in a little
14:48
Speaker 10: bit this morning, and I was confused about why we
14:50
Speaker 10: were seeing green on the screen. But to your point,
14:52
Speaker 10: the China stimulus, that's a big deal.
14:54
Speaker 1: Yeah. I mean, look, I think the stock market and
14:55
Speaker 1: the bond market are responding to two different things. Again,
14:57
Speaker 1: this is just my theory. We'll ask the experts here
14:59
Speaker 1: in in a second. But to me, look, we didn't
15:03
Speaker 1: have a ton of pre market action. Even as early
15:06
Speaker 1: as five am, we had, you know, stocks only a
15:09
Speaker 1: future tire by like two tens of one percent. Certainly
15:12
Speaker 1: we're not seeing the rally that you are seeing right now,
15:14
Speaker 1: and I think a lot of it does have to
15:15
Speaker 1: do with the Chinese stimulu story. Because again I'm gonna
15:18
Speaker 1: nerd out. Bear with me, Ben Emmons, he's gonna join
15:21
Speaker 1: us in just a second. But you know, fifteen years ago,
15:24
Speaker 1: when we were getting out of the global financial crisis,
15:26
Speaker 1: infrastructure investment from China was a really big story, and
15:29
Speaker 1: Chinese growth has been a big concern when you look
15:32
Speaker 1: at kind of the day to day trading outside of
15:34
Speaker 1: the debt ceiling saga. So let's get some expertise and
15:37
Speaker 1: see if my theory is right here. Ben Emmons joins us.
15:40
Speaker 1: He is the head of fixed income over at New
15:42
Speaker 1: Edge Wealth. Ben, talk to us a little bit about
15:45
Speaker 1: the read through of China. Is the read through of
15:48
Speaker 1: twenty twenty three the same as it was fifteen years ago.
15:55
Speaker 5: It's it's clearly different, you know, because you do have
15:58
Speaker 5: an open and debted properly sector and that is a
16:01
Speaker 5: drag on the Chinese economy. So as much as you
16:05
Speaker 5: have sawt as a V shaped recovery from the reopening,
16:08
Speaker 5: which is similar as we saw here in the US
16:11
Speaker 5: and in Europe. The subsequent cooling of that through the
16:15
Speaker 5: manufacturing sectors then really dragged down further by this property sector.
16:20
Speaker 5: And I think the stimulus measures that you're seeing overnight
16:22
Speaker 5: coming out are really addressing the property sector from not
16:26
Speaker 5: being too big of a drag on that reopening momentum.
16:29
Speaker 5: And so China has that ability right to very quickly
16:32
Speaker 5: inject liquidity into the system and in fact the economy
16:36
Speaker 5: almost instantly YPMI data in China if it goes blow fifty,
16:41
Speaker 5: I think it's not always an alarming thing because China
16:43
Speaker 5: could just boosts that in a moment. But at the
16:46
Speaker 5: same time, there are structural issues in China that are
16:49
Speaker 5: just like we have pose financial crisis, you gent into
16:52
Speaker 5: some sort of a new normal idea too in China,
16:54
Speaker 5: so it will be with us. But I think this
16:57
Speaker 5: stimulus story overnight is at least assigned that China wants
17:01
Speaker 5: to have this reopening continue to be having momentum and
17:04
Speaker 5: trying to reach their growth target for this year, which
17:06
Speaker 5: they said at five and a half percent.
17:08
Speaker 10: Ben is it a recognition from China that the reopening
17:11
Speaker 10: has not been as bullish, for lack of a better word,
17:16
Speaker 10: as we initially anticipated.
17:20
Speaker 5: It could be medicined, But I think if you look
17:23
Speaker 5: at the granular data of that, you know leisure activity
17:27
Speaker 5: in China has moved just as sharply up as as
17:30
Speaker 5: we had here in the initial stages of the reopening.
17:33
Speaker 5: Lots of mobility is happening. To this data out from
17:37
Speaker 5: Goldman Saxon that they're seeing a lot of outbound flights
17:40
Speaker 5: coming out of China. So I do think that the
17:43
Speaker 5: momentum is there. I think what China deed doesn't want
17:46
Speaker 5: is that that starts to falter driven by structural factors.
17:49
Speaker 5: So think to that sends, You're right about that China's
17:53
Speaker 5: addressing this head on. Now, will we get this resurgence
17:57
Speaker 5: and all this demand coming out to people are so
18:00
Speaker 5: anticipating this entire yet us to be seen China as
18:03
Speaker 5: also to an extent, like I said, the tactical with
18:06
Speaker 5: its measures right, it wants to address the economy but
18:08
Speaker 5: not potentially overheated. So I think we have to keep
18:12
Speaker 5: that in mind.
18:13
Speaker 8: Ben.
18:13
Speaker 1: Let's come back to the story Stateside here, which is
18:16
Speaker 1: this payrolls report three hundred and thirty nine thousand relative
18:19
Speaker 1: to a one hundred and ninety five thousand estimate a
18:22
Speaker 1: blowout perils report for I think the fourteenth time in
18:25
Speaker 1: a row. Ben, let's talk about this bond market. Read
18:28
Speaker 1: through the two year yield at four forty let's four
18:31
Speaker 1: forty seven, a move of twelve basis points higher. How
18:34
Speaker 1: high does a two year yield go?
18:38
Speaker 5: It could go a bit higher because my view, you know,
18:41
Speaker 5: this report just underscores one the economy obviously is not
18:45
Speaker 5: in a recession. And although I second the work by
18:49
Speaker 5: Ana Wong and then her team on the state level
18:52
Speaker 5: announces that they've done and I was actually talking to
18:55
Speaker 5: her right before the program it created as some parts
18:59
Speaker 5: of the country that are or sluggish or may have
19:01
Speaker 5: for session, the job support doesn't show it, and it
19:04
Speaker 5: comes again from similar sources. Our leisure sector continues to expand,
19:09
Speaker 5: constructions expanded, which maybe pointing to the Infatial Reduction Act.
19:13
Speaker 5: So there is this torque underneath the economy that actually
19:16
Speaker 5: should lead you to somewhat higher yields. Again, so the
19:18
Speaker 5: two year as the sort of the forward looking yield
19:22
Speaker 5: for fat policy should be closer to where the fat
19:25
Speaker 5: funds rate actually is. And that's a long way from
19:28
Speaker 5: here though, so but that's not entirely impossible. So I say,
19:33
Speaker 5: still think of a higher rate environment from here, given
19:36
Speaker 5: the strength of the economy.
19:38
Speaker 10: I want to talk about that strength that we saw
19:41
Speaker 10: in the jobs report, because if you look at the
19:43
Speaker 10: total hours worked, it did decline just a tiny bit
19:48
Speaker 10: zero point one average hours decrease. So I know that's
19:50
Speaker 10: not a lot, but I wonder if productivity decreases is
19:55
Speaker 10: something that you look at and think about when sussing
19:58
Speaker 10: out the impact of a job's report like this.
20:02
Speaker 5: It's relevant because productivity has had, you know, really ups
20:06
Speaker 5: and downs since we reopened the economy. In fact, actually
20:09
Speaker 5: the official the official numbers are negative and uh and
20:13
Speaker 5: this hour's work does say like, okay, there are probably
20:17
Speaker 5: sports of people that are again out of the labor
20:19
Speaker 5: force for periods of time, but that affects that productivity
20:23
Speaker 5: or it's still this sort of very stop go, you know,
20:27
Speaker 5: stay at home and at work environment that written. But
20:32
Speaker 5: I don't think it's that alarming for the health of
20:34
Speaker 5: the labor market in itself. It is to be a
20:36
Speaker 5: report of broad based gains across most sectors instantly that
20:42
Speaker 5: temporary employment again picked up. The only things I think
20:46
Speaker 5: was in the household household service and weaknesses in terms
20:48
Speaker 5: of the duration of employment, for example, that that went
20:52
Speaker 5: up a bit. You know, I think that this is
20:54
Speaker 5: a report that shows that the economy is not off
20:57
Speaker 5: the rails. It keeps that resilience and and I feel
21:01
Speaker 5: that the leisure sector can back to That is such
21:04
Speaker 5: a big driver of this report, and at some point
21:07
Speaker 5: that will change, I guess because it's a very cyclical sector.
21:10
Speaker 5: But I think it's also a story of global reopening
21:13
Speaker 5: that's affecting our labor market. If tourism is impacting leisure,
21:18
Speaker 5: if immigration from the Mexican border is impacting maybe the
21:22
Speaker 5: construction sector or other sectors, then you know, expanding labor
21:25
Speaker 5: supply from those areas, yeah, keeps this labor market heart.
21:30
Speaker 5: So despite the decline in hours work.
21:34
Speaker 1: Right, and I think it really speaks to kind of
21:36
Speaker 1: the future of how you actually calculate kind of the
21:41
Speaker 1: inputs of this economy.
21:43
Speaker 7: And in a post COVID world, Ben, let's talk a.
21:46
Speaker 1: Little bit about kind of the cross asset messages that
21:49
Speaker 1: you're getting in terms of the bond market specifically. Of course,
21:52
Speaker 1: you know the front end of the curve is going
21:54
Speaker 1: to be tied to the hip of what the Federal
21:55
Speaker 1: Reserve does. How quickly could the Fed change its toun
21:59
Speaker 1: and when it comes to growth, when it comes to
22:02
Speaker 1: needing to stimulate the economy, and perhaps to some extent,
22:05
Speaker 1: although this is to be fair and exaggeration taking a
22:08
Speaker 1: page out of the China playbook, how quickly could that
22:10
Speaker 1: transition happen?
22:13
Speaker 5: I think it only happen, critic if we see material
22:15
Speaker 5: weakness and employment, because on inflation, it's sort of a
22:22
Speaker 5: saying like they're on a course to try to bring
22:24
Speaker 5: it really down to two percent, that they're very determined
22:26
Speaker 5: to do that. So in order to change that regime
22:31
Speaker 5: of like basically they're having currently to say, a single
22:34
Speaker 5: mandate focusing just on inflation for the time being. So
22:38
Speaker 5: if you're seeing a sudden, really quick uptick in unemployment
22:41
Speaker 5: and broader losses, that I think does change the reaction function,
22:46
Speaker 5: and that's happened in the past step way in a way,
22:49
Speaker 5: because I think that what they do then is plug
22:51
Speaker 5: in the losses of jobs into the possibility that the
22:55
Speaker 5: inflation rate starts to decline. So fast, so quick that
22:57
Speaker 5: they end up on the wrong side of that, meaning
23:00
Speaker 5: much too low inflation rate again with risk of deflation.
23:04
Speaker 5: I think we're at this point, not at the point
23:06
Speaker 5: at all, given the strength of the labor market. But
23:09
Speaker 5: I do think the first reaction function to stimulus is
23:12
Speaker 5: driven by, you know, rapidly deteriorating employment picture, and so
23:17
Speaker 5: we're not there yet. The fact, I think were the
23:19
Speaker 5: opposite way. If this report shows his strength and services
23:24
Speaker 5: continue to be really robust in the economy, then their
23:27
Speaker 5: preferred measure of course services will not blutch much down
23:30
Speaker 5: and it means they have to continue to raise raise.
23:33
Speaker 7: Yeah, certainly a conundrum.
23:35
Speaker 1: I got to say, you cannot pay me a million
23:38
Speaker 1: dollars to be chairman Powell right now. A lot to digest,
23:41
Speaker 1: Ben Emmons. They had to fix income over at New
23:43
Speaker 1: Edge Wealth. We thank you as always talked about this
23:45
Speaker 1: bond market, this jobs market, and of course the growth
23:48
Speaker 1: story in the economy.
23:51
Speaker 8: You're listening to the tenth Can't Live Program Bloomberg Markets
23:55
Speaker 8: weekdays at ten am Eastern on Bloomberg dot com, the
23:58
Speaker 8: iHeartRadio app, and the blumber Business app, or listen on
24:01
Speaker 8: demand wherever you get your podcast.
24:05
Speaker 1: We have a really exciting guest, I think, and who
24:08
Speaker 1: could probably answer a lot of the questions we have
24:10
Speaker 1: on the not just the payrolls report, but kind of
24:12
Speaker 1: the future of.
24:13
Speaker 7: Hiring as well, Mattie.
24:14
Speaker 1: As we talk about all this investment going into AI
24:17
Speaker 1: and all of this investment going into kind of the
24:19
Speaker 1: tech sector, but how does it actually play out on
24:22
Speaker 1: the ground.
24:23
Speaker 10: And what does it mean in terms of net positive
24:26
Speaker 10: or negative for the consumers at the end of this,
24:29
Speaker 10: whether that's less jobs available or you know, more efficient
24:33
Speaker 10: laborer that could could benefit us.
24:36
Speaker 7: In the end.
24:37
Speaker 5: Yeah.
24:37
Speaker 1: Absolutely, And you know, the trends here are almost hard
24:40
Speaker 1: to keep up with because they on the surface you're
24:43
Speaker 1: seeing you know, a hot, hot, hot payrolls report for
24:45
Speaker 1: by the way, fourteen times in a row, wild But
24:49
Speaker 1: on the ground we definitely want to hear kind of
24:52
Speaker 1: that perspective as well. For that, we bring in Kara Brennan,
24:54
Speaker 1: the chief people officer over at Lattice, tell us a
24:57
Speaker 1: little bit about this AI story and whether we're prepared
25:01
Speaker 1: for it. Kara, thank you for joining the program. Let's
25:04
Speaker 1: start there. You will want this massive investment. We have
25:07
Speaker 1: the sector that's growing super super quickly, do we have
25:12
Speaker 1: the people infrastructure to support it.
25:16
Speaker 11: That's the question chief people officers, HR folks, executives are
25:21
Speaker 11: asking across the board. We just at Lattice where I work,
25:25
Speaker 11: we have about six thousand companies that are small to
25:29
Speaker 11: mid market, and we have a community of more than
25:33
Speaker 11: twenty thousand HR people that interact and talk and ask
25:37
Speaker 11: each other questions of what are you seeing which has GPT,
25:40
Speaker 11: what are you seeing in future of AI, what kind
25:41
Speaker 11: of tools are you buying, what kind of policies are
25:43
Speaker 11: you setting? And some themes are emerging there. One is
25:48
Speaker 11: that employers are understanding that employees are already using these tools,
25:54
Speaker 11: so they're wanting to get ahead of it with policies
25:56
Speaker 11: and practices that are sensible, but also taking to account
26:00
Speaker 11: really important things like security. I think in general, and
26:05
Speaker 11: at least this is my opinion and what we're seeing
26:07
Speaker 11: at Lattice, is that there isn't this palpable fear that
26:12
Speaker 11: jobs will be eliminated, but we are trying to get
26:16
Speaker 11: ahead in terms of our workforce planning, especially at large enterprises,
26:19
Speaker 11: which could see a significant shift in the types of
26:23
Speaker 11: workers they hire and the types of workers that those
26:25
Speaker 11: workers do depending on the tools that they purchase. They're
26:29
Speaker 11: trying to get ahead of planning and looking at this
26:32
Speaker 11: as a five year a ten year transition rather than
26:35
Speaker 11: an immediate jolt or something that should drive panic. And
26:40
Speaker 11: then I think the last piece is really understanding what
26:43
Speaker 11: tools they should be buying. And we get down to
26:45
Speaker 11: this as people leaders, what tools should we should we
26:51
Speaker 11: invest in in our tech stack to make to continue
26:54
Speaker 11: to drive great employee experiences, to continue to help employees develop,
26:58
Speaker 11: and to enable the business to get a lot more
27:01
Speaker 11: efficiencies in pockets where we already are starting to see
27:06
Speaker 11: those tools arise.
27:07
Speaker 10: Yeah, so Bloomberg Intelligence has a report on how the
27:11
Speaker 10: generative AI market could fuel a one point three trillion
27:15
Speaker 10: dollar addition to markets by twenty twenty three by the
27:19
Speaker 10: end of the year. But then we've also done some
27:22
Speaker 10: reporting on how the AI boom is going to delete
27:25
Speaker 10: a lot of jobs traditionally held by women. Which of
27:28
Speaker 10: those two is the winner here? Is the addition to
27:31
Speaker 10: the market going to lead to more jobs for folks
27:34
Speaker 10: or is it going to be something that deletes jobs
27:37
Speaker 10: specifically for groups of people that have maybe had some
27:40
Speaker 10: lack of access to jobs previously.
27:44
Speaker 11: Well, unfortunately, I don't have that crystal ball. I can
27:47
Speaker 11: tell you on the ground that these are definitely things
27:51
Speaker 11: we're thinking about and talking about in the HRC realm.
27:55
Speaker 11: What the consensus is of the folks that I've heard
27:59
Speaker 11: and I'm talking to is really looking at who do
28:01
Speaker 11: we have in seat now and how can we help
28:04
Speaker 11: them be better at their jobs? And definitely strong sensitivities
28:08
Speaker 11: around folks and underrepresented groups and women, and those are
28:12
Speaker 11: folks that we want to continue to stay in seat
28:15
Speaker 11: and continue to diversify our workforces. But what we all
28:20
Speaker 11: know is upskilling and reskilling is really the path to
28:24
Speaker 11: the future. And the good news is that's what's always
28:27
Speaker 11: been the case when you're managing workforces. So those folks
28:30
Speaker 11: who are willing to learn about the possibilities of AI
28:36
Speaker 11: and learn how to use those news tools within our
28:39
Speaker 11: companies is what we on the HR side are looking
28:43
Speaker 11: to respond to and continue to drive understanding around.
28:48
Speaker 1: Carol, let's talk about kind of the scary word in
28:50
Speaker 1: markets here, which is the our word recession.
28:52
Speaker 7: At the end of the day, A lot.
28:55
Speaker 1: Of the consensus of years that we're we're going to
28:56
Speaker 1: see a proper recession by the end of twenty two
29:00
Speaker 1: twenty three, if not early twenty twenty four. In these
29:04
Speaker 1: next twelve months, are you starting to see a hints
29:07
Speaker 1: of kind of widespread layoffs or is this starting to
29:10
Speaker 1: look like this inevitable recession whenever it hits, may at
29:13
Speaker 1: the end of the day be a job full recession.
29:16
Speaker 1: What do you think.
29:19
Speaker 11: It's interesting because a lot of the conversations, again among
29:22
Speaker 11: the HR community have baked in a mindset of restraint
29:29
Speaker 11: and have baked in a mindset of conservative hiring, of
29:34
Speaker 11: really driving efficiency and productivity. And that started two quarters
29:40
Speaker 11: ago when we started talking about what a recession would
29:44
Speaker 11: look like this year. What this means practically in the
29:49
Speaker 11: seat of HR folks. And a lot of this is a
29:52
Speaker 11: talent platform, so we talk a lot about these things.
29:55
Speaker 11: It's really understanding the talents that we have in our companies,
29:59
Speaker 11: how to ensure that talent is set up to succeed
30:01
Speaker 11: and drive the business to succeed, driving real alignment between
30:04
Speaker 11: employees day to day work and key business priorities, knowing
30:08
Speaker 11: that those business priorities could shift in a down market
30:11
Speaker 11: or a recession, and really really focusing on building a
30:15
Speaker 11: culture of high performance, prioritizing feedback clear performance management, making
30:22
Speaker 11: sure that our best performers are rewarded, and having clear
30:26
Speaker 11: and transparent philosophies around things like compensation, so people have
30:30
Speaker 11: a future that they can look to in the companies
30:34
Speaker 11: in the company. So, I think a lot of the
30:39
Speaker 11: behavior chains that would be driven by a recession is
30:42
Speaker 11: already being adopted within organizations. And it doesn't surprise me
30:47
Speaker 11: that we're seeing some additional jobs being added because I
30:52
Speaker 11: think this conservative mindset is something that kicked in months
30:55
Speaker 11: ago before maybe even the market's new.
30:58
Speaker 10: Yeah, Kara, that makes a lot of sense. Thank you
31:00
Speaker 10: so much for joining us. I think we're gonna have
31:02
Speaker 10: to leave it there because we only have about thirty
31:04
Speaker 10: seconds left, but thank you so much for that insight.
31:07
Speaker 10: And it's so important forre you we talk about it
31:09
Speaker 10: all the time, the impact of AI, whether or not
31:12
Speaker 10: it's going to lead to more or less jobs, and
31:14
Speaker 10: it sounds like something that is going to still be
31:18
Speaker 10: a question mark for even the greatest minds on this,
31:21
Speaker 10: the chief people officers who deal with this big question
31:23
Speaker 10: every single day.
31:24
Speaker 1: Yeah, absolutely, Cara brun and chief people officer over a
31:27
Speaker 1: lot is giving us some crucial insight on that.
31:29
Speaker 8: You're listening to the tape. Ken's are live program Bloomberg
31:32
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the
31:36
Speaker 8: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
31:39
Speaker 8: You can also listen live on Amazon Alexa from our
31:42
Speaker 8: flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
31:48
Speaker 1: Look, we talked a lot about what's going on the
31:50
Speaker 1: US in Europe, let's talk about the EM story as well.
31:54
Speaker 1: Who better to bring in than Kristin Seva, managing principle
31:58
Speaker 1: over at Paydon and Regal to talk to a a
32:00
Speaker 1: little bit about the EM outlook and Kristin, there's so
32:04
Speaker 1: much digest in the EM world. Top of mind for
32:06
Speaker 1: me is China, but we could I really feel like
32:09
Speaker 1: we could pick any country in the world and go there.
32:11
Speaker 7: But let's start with the Chinese story. Madison knowses.
32:14
Speaker 1: I've been obsessed with the headline that we got this
32:16
Speaker 1: morning around five am that they are potentially looking at
32:20
Speaker 1: extra stimulus for their property sector.
32:22
Speaker 7: We know that's where a lot of the slowdown has been.
32:25
Speaker 1: Your take on just how much of a difference that might.
32:27
Speaker 12: Make, Well, I think China overall, right now, just in
32:33
Speaker 12: terms of the big picture. We had such a weak
32:37
Speaker 12: economy in twenty twenty two and this year is going
32:40
Speaker 12: to be very different. I think it's really going to
32:44
Speaker 12: be a consumer led growth story in China. You know,
32:48
Speaker 12: as you've seen some of the data come out very strong.
32:51
Speaker 12: Retail sales at eighteen percent. The industrial production numbers disappointed,
32:57
Speaker 12: but that really didn't surprise us. Really thinks it's going
33:01
Speaker 12: to be a consumer led growth story. Q one was
33:05
Speaker 12: very very strong. We think that has to come down,
33:08
Speaker 12: but we're still going to get five and a half
33:10
Speaker 12: percent growth. As far as the property sector goes, I
33:13
Speaker 12: think additional stimulus will be helpful, but the property sector
33:17
Speaker 12: itself is quite has been quite problematic. I think they're
33:21
Speaker 12: looking to stabilize that, but not to overstimulate because I
33:26
Speaker 12: think the government is concerned about the potential that that
33:31
Speaker 12: could have for really causing problems overall in credit market.
33:37
Speaker 12: So I think they're going to be fairly cautious on
33:40
Speaker 12: any sort of a stimulus going forward, not to overdo it.
33:44
Speaker 10: One thing I've been wondering about with the China story
33:46
Speaker 10: is just that the reopening has felt like more of
33:49
Speaker 10: a trickle than a wave. Is that wave going to
33:53
Speaker 10: start to pick up through the second half of this
33:56
Speaker 10: year and into twenty twenty four.
34:00
Speaker 12: Well, again, I think that the first quarter was so
34:04
Speaker 12: much stronger than expected that some of the data that's
34:07
Speaker 12: been coming out has been lower than expectations, but expect
34:12
Speaker 12: expectations were very, very high. So that eighteen percent retail
34:16
Speaker 12: sales number that I mentioned was a bit lower than
34:19
Speaker 12: expectations of twenty one percent, but still quite high. So
34:23
Speaker 12: we think that again we're going to be set up
34:27
Speaker 12: for a year that's going to be around five and
34:29
Speaker 12: a half percent growth. Next year, we're probably going to
34:32
Speaker 12: see something around four and a half percent growth with
34:36
Speaker 12: some sort of level of moderation to this consumption lens
34:40
Speaker 12: boom that we're seeing.
34:42
Speaker 1: How are you looking at the US growth story? Then,
34:45
Speaker 1: in terms of kind of the ripple effects visa v.
34:48
Speaker 1: The dollar, I know Madison has been I don't know
34:51
Speaker 1: why it's called you, Madison, Matty has been looking very
34:55
Speaker 1: closely at the ripple effects of the dollar. When you're
35:00
Speaker 1: looking at a federal reserve that is potentially ending their
35:03
Speaker 1: tightening cycle, whether that be.
35:05
Speaker 7: Right now or at the end of the summer.
35:08
Speaker 1: The ripple effects through the dollar on the EM space.
35:11
Speaker 1: How do you look at that from a broader complex.
35:16
Speaker 12: Well, the end of the FED hiking cycle is a
35:19
Speaker 12: good thing for emerging marketed. That was one of the
35:22
Speaker 12: things that really weighed on the asset class last year.
35:26
Speaker 12: So now that we've got that risk behind us, and
35:29
Speaker 12: also have the China weakness behind us, we think that
35:34
Speaker 12: that all spills a positive signal in terms of where
35:39
Speaker 12: we can see EM currencies go. So our view is
35:43
Speaker 12: that the dollar is going to be weak versus EM
35:49
Speaker 12: currencies going forward. We've come off a ten year very
35:53
Speaker 12: strong cycle of the dollar. The dollars overvalued, and it's
35:58
Speaker 12: not a story anymore where we can point to US
36:01
Speaker 12: exceptionalism versus the rest of the world. Now with the
36:06
Speaker 12: US potentially going into recession at some point and slower
36:10
Speaker 12: growth in the US, so we think that that growth
36:13
Speaker 12: differential between the US and other countries, and in particular
36:17
Speaker 12: emerging market countries, is going to continue to widen, which
36:21
Speaker 12: should be a positive thing for emerging markets currencies.
36:26
Speaker 10: Yeah, Kristin, I know you spend a lot of time
36:29
Speaker 10: on the macro here, but going micro, I talked to
36:31
Speaker 10: an analyst this week who gave me a really cool example,
36:34
Speaker 10: he talked about how chlorox wipes are highly adopted in
36:38
Speaker 10: the US, but that's a huge opportunity internationally because of
36:42
Speaker 10: their higher margins on the wipes, and they're not used
36:45
Speaker 10: as much in other countries, particularly in Latin America, so
36:49
Speaker 10: that's a big growth opportunity for them, particularly as the
36:52
Speaker 10: dollar does decline. Are there any other examples like that
36:56
Speaker 10: that you think that investors should be thinking about and
36:59
Speaker 10: looking at as potential growth opportunities in the EM space.
37:04
Speaker 12: Yeah. I think in the emerging market debt space, it's
37:08
Speaker 12: really a sovereign story. This s A class is primarily
37:11
Speaker 12: about countries and picking the countries that you think are
37:15
Speaker 12: going to improve. And we also have a growing emerging
37:21
Speaker 12: market corporate space though as well, so I think on
37:25
Speaker 12: the corporate side there are definitely opportunities within various emerging
37:31
Speaker 12: market corporate markets, well managed corporations that we think could
37:37
Speaker 12: do well in this environment as well. And that corporate
37:41
Speaker 12: space also in terms of the duration, is a bit
37:44
Speaker 12: lower than the duration of the sovereigns. But I'd say
37:49
Speaker 12: in general, we think there's a lot of opportunities. You
37:51
Speaker 12: mentioned Latin America, a lot of opportunities in Latin America,
37:55
Speaker 12: particularly where central banks have done a good job of
37:59
Speaker 12: proactively tightening and so get getting a hold on their
38:03
Speaker 12: domestic inflation and having inflation start to come down in
38:08
Speaker 12: many of these countries because they did such a good
38:11
Speaker 12: job of being very proactive and even hiking earlier than
38:15
Speaker 12: the FED. So we think that overall macro environment should
38:19
Speaker 12: be very positive in many of these countries for that
38:22
Speaker 12: business cycle and for these businesses to be able to
38:25
Speaker 12: operate in a lower inflation environment.
38:28
Speaker 1: Talk to us a little bit about the carry trade here.
38:31
Speaker 1: I mean, look, carry has always been popular when you're
38:33
Speaker 1: when you're looking for kind of a hunt for yield.
38:36
Speaker 1: But in this kind of era of where perhaps the
38:39
Speaker 1: markets are looking through the recession that everyone expects to
38:43
Speaker 1: be just around the corner, just how popular is the
38:46
Speaker 1: risk taking? Just how popular is the carry trade right now?
38:50
Speaker 12: Well, I think in fixed income, in the higher yielding
38:54
Speaker 12: parts of fixed income, like emerging markets, you're getting starting
39:00
Speaker 12: yields now, if you were to get and buy into
39:02
Speaker 12: the emerging market that asset class right now, you're getting
39:04
Speaker 12: starting yields that are very very high, so over eight
39:08
Speaker 12: percent on most emerging market portfolios. And you know, even
39:14
Speaker 12: in an asset class like the emerging market local asset class,
39:17
Speaker 12: where the overall index yield is six and a half,
39:19
Speaker 12: there's a significant dispersion in there in many countries are
39:23
Speaker 12: offering eight to twelve percent local yields. So we think
39:27
Speaker 12: that no matter what you're investing in, even if you
39:31
Speaker 12: were investing just in the overall index right now, in
39:34
Speaker 12: emerging markets, your starting yields are going to be very,
39:37
Speaker 12: very high, and that would indicate from the previous looking
39:42
Speaker 12: at previous historical periods where you have these kinds of yields,
39:46
Speaker 12: that your total return expectations are also going to be high,
39:49
Speaker 12: say in the eight to twelve percent range over the
39:51
Speaker 12: next three years. So I think the em asset class
39:55
Speaker 12: overall right now is a good carry story. I think
39:58
Speaker 12: within the asset class you really have to pick and
40:01
Speaker 12: choose and not just rely on on only carry. You
40:05
Speaker 12: really have to pay attention to fundamentals into what you
40:08
Speaker 12: think your overall total return is going to be. So
40:11
Speaker 12: we have a nice mix in our portfolios of both
40:14
Speaker 12: investment grade and high yield opportunities in the portfolio. And
40:20
Speaker 12: keep in mind that emerging market debt, even though it
40:23
Speaker 12: has this high yield. It's very highly rated, so all
40:27
Speaker 12: three asset classes our overall investment grade with a high
40:31
Speaker 12: percentage over sixty percent in investment grade security.
40:36
Speaker 1: Certainly in involving market. Kristen Seva, we thank you as always.
40:41
Speaker 1: She is a managing principle over at Hayden and Regal.
40:43
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
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40:50
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40:57
Speaker 7: And I'm Paul Sweeney. I'm on Twitter at Ptsweeney.
40:59
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