US Jobs Post Smallest Gain in Six Months as Unemployment Rises

Published May 3, 2024, 8:14 PM

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Martha Heller, Founder of Heller Search, shares her thoughts on the April jobs report and tech employment trends. Charlie Eaton, Associate Professor of Sociology at University of California, discusses his book Bankers in the Ivory Tower: The Troubling Rise of Financiers in US Higher Education. Remi Guillemin, Head of Watches at Christie’s, talks about the upcoming auction of very rare watches from the collection of Formula 1 racing legend Michael Schumacher. And we Drive to the Close with Amy Magnotta, Co-CIO at Ategenos Capital.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.

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This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.

Today's jobs report signal further evidence that demand for workers is moderating the monthly reading showing that US jobs posted the smallest gain in six months. Meantime employment also weaker in the service sector report that was published after the monthly jobs read. This later report by the Institute of Supply Management, combined with the jobs data, the figures represent a moderation and demand that may restrain economic growth. This is why we're all kind of seeing the rate, kind of rerate, if you will.

In today's trade.

We got somebody here with a unique perspective on a group of workers that really a few years ago always seemed into and now until they weren't. We're talking about those folks in the IT space. We welcome to the program. Martha Heller, founder and CEO of Heller Search. It's an IT executive recruiting firm specializing in CIOs, CTOs, VP level, senior tech leaders and executive tech talent. She joins us from Boston. Good to have you with us, Martha, you deal on a very senior level. I think we got to get that out there. What are you seeing when it comes to IT executives, which again are up on the chain of command.

That's true, So thanks for having me.

You know, I've been I focus exclusively on the technology talent market, so this job report was not a surprise to me. We've been seeing massive layoffs in the technology sector for months now because these big companies Microsoft, Meta, Google, they are reshaping themselves from IT providers to becoming AI businesses.

So they are replacing.

Teams of traditional engineers technology leads with data scientists, algorithm people, AI prompt engineers. So that is the primary reason we're seeing in the tech sector lots of layoffs. But we need to make sure we understand the difference between the tech sector and technology leadership talent. Every other company in the world that isn't a high tech business needs traditional technology leaders. They're not ready to go full force into AI. So every time a Microsoft or a Facebook or Meta or salesforce lays somebody off that's good news for McDonald's in the NFL American air You.

Need to say that company.

Yeah.

I talked to an employee at one of these firms just like years ago, and she was basically like, it's a little wild that people are still calling it the tech sector because everything is technology right now. It doesn't matter if you're in Silicon Valley, it doesn't matter if you have that tech DNA. You need to be in the tech space. But I am curious about where you're seeing movement right now. Are you seeing a reset because of this shift to AI, this idea that this is something I mean, Carol and I were talking today earlier. JP Morgan out with a chat GPT like service. As of now, this is every company embracing this.

That's right. So you are exactly right.

Software is eating the world and every technology is becoming a technology company. But at the same time, some companies like JP Morgan in the financial services sector, they've been upgrading their technology and technology leadership for years. Their product is data. It's always been data, so they're ahead of the game. But many companies have not been upgrading their technology. They've got data in all different places. AI cannot learn on something that is not a concentrated data set. So JP Morgan can do a lot with AI because they've been upgrading their technology. There are a lot of companies, even though they say we're a technology company, they don't have the architecture, they don't have the data science, they don't have the engineering well to really run AI.

You know, Martha, I'm listening to you, and yeah, we know that every company is a technology company, right, We've talked about this for years and as you said something like a JP Morgan, I mean AI not new.

We all know that and stuff.

It's just taking artificial intelligence generative AI MLM's large language models like.

It's just a whole other level.

And we're trying to really, you know, assess as we continue to see the investment spend, you know, how it changes our world. Some say it's going to be incredibly dramatic. Having said that, from your vantage point, here we are on a day where we see a job print that was actually softer than we've seen and we're trying to assess what that tells us about one the labor market and tow what that tells us about the economy going forward. So from your vantage point, what does what you are seeing with very senior level IT folks, what it says about the jobs market and kind of companies, what they are willing to spend on somebody maybe for those positions.

You know.

And I would say what we will see in that future is habs and have nots. There will be companies that are changing what they're doing wholesale based on AI. They are becoming AI driven businesses. Those folks, those companies they're going to hire, they're going to grow, their cultures will change dramatically. And then there will be companies that will be left out of the AI boom because they're not doing all of those things.

And so I think it's a big question mark.

I think in companies that are getting ahead of AI, I think we'll see dramatic growth.

And dramatic change. We're also going to see ethical issues. We're going to see a lot of security issues. So I think it remains to be seen.

Hey, Martha, we're Bloomberg. We follow the money. We got to talk money here. What's compensation looking like? VP level, executive.

Level, C level CTO?

Right, give us numbers here?

Sure, So I'm going to start with data scientists because that's the hottest new role. Okay, a data scientist will cost about a base of two point fifty and then the variable comp on top of that, they could wind up being a half a million dollar employee. But when you're seeing you know CTOs of these huge media companies there, they could be in the two or three million dollar range. These are the compensation for CTOs CIOs cisso's chief innovation officer chief data officers has gone up a lot. She I don't think you can get a chief AI officer for under a million and a half in a public company.

Interesting, and everybody's willing to spend because they need them.

They must have them, I believe. And I'll just say a little I know. We want to talk about the money. The biggest challenge to AI, the AI revolution for companies is their inability senior executives to understand the impact that AI could have. So you hire a two million dollar CTO, you spend the money, you know what, you think it's worthwhile. But you haven't changed your culture, you haven't changed your business model. You want to do what you've always done except have an expensive CTI run AI. That's not enough of a change. So, yes, there are many companies willing to invest, but investing in that person is not going to get you there. You need the technology, you need the culture, and you need the smarts about how any night is going.

To change what you do?

All right, well, interesting perspective. Our whole control room is like.

Hey, hey, data science, I know those two things.

Chapter two.

Perhaps Martha Heller, thank you so much, Founder and CEF Heller Search. As we said earlier, at IT executive recruiting firm, they specialize in things like CIOs, CTOs, all those senior level talent dealing with technology.

You're listening to the Bloomberg Business Week podcast. Catch us Live weekday afternoons from two to five pm Eastern Listen on Apple car Play and then brought auto with a Bloomberg Business app or Want us Live on YouTube.

This week for Palestinian protesters at US campuses across the nation found themselves being arrested or shut down as colleges.

Moved to slow their activities.

Among the demands by activists, at least some of them, divestment from Israel and academic ties with the country, which brought up, once again, at least for US, the relationship between money and academia It's something we write about a lot here at Bloomberg.

Bloomberg's Opinions.

John Author's just today writing in a column that divestment has had some successes, but like the Israel Palestine conflict itself, it is more complex than it looks. All Right, we wanted to explore more. So let's get to our interview. We welcome Charlie Eaton. He's Associate professor of sociology at the University of California MERCI, joining us from there. He is the author of Bankers in the Ivory Tower, The Troubling Rise of Financiers in US Higher Education. Professor Eaton, we are so delighted to have you here with us a Bloomberg BusinessWeek. You have looked extensively at how finance has played a central role in the widening equality that we've seen in recent decades, both in American higher education but also really kind of more wider American.

Society at large.

Money in academia not a new idea. What exactly, though, is the relationship today and with all its dimensions?

Yeah, it's well, it's not the same at every university. Not every university is Harvard or Columbia or Princeton or even the University of California. But our wealthiest universities now have endowments that are valued in the tens of billions of dollars, and that connects them to every corner of the global economy. A lot of that is via hedge fund and private equity investments. The wealthiest endowments now invest more than sixty percent or sometimes even more than seventy percent of their endowments with private equity and hedge funds.

I wonder how that's different now versus the nineteen eighties, because something that we've been talking a lot about, Professor over the last few weeks has been what happened on Columbia's campus, for example, during the nineteen eighties, when the students were protesting apartheid in South Africa. How is the relationship between money and education changed between then and now.

Yeah, well, I mean, if you go back to the eighties, very few of the endowments, even the wealthiest endowments, were investing with private equity and hedge funds.

It starts in the eighties. You know.

A prominent story that was reported in the New York Times is that Tom Steyer, one of the first hedge fund founders, you know, goes on to become a billionaire. He learns that David Swinson at the Yale Endowment is starting to use in hedge fund investment techniques, and he spends a couple of years trying to get David to invest in his hedge fund. He gets three hundred million dollars and he goes in the experiments in it. But David Swinston was nervous about doing that kind of investment because it was new and untested. But over the last forty years, those endowments have grown through those kinds of endowments by an average of ten percent average annual rate of return over the years, so that what the portfolio is invested in has really changed.

Well, what's most problematic about the relationship today? Is it just that it's heightened? Is it the amount of money involved? The financial entaglement? You know, we just had a chart up showing, you know, various endowments, you know, over fifty billion at Harvard, forty at Yale, thirty four at Princeton thirty four billion, thirty thirteen billion, almost fourteen billion at Columbia, twenty one at the University of Pennsylvania, real money.

These are big money, and you know when.

We inquire about them, you know, many say, well, this is what's required at an institution of this caliber and this size, if you will, to attract professors in the facilities. But I do wonder these are big numbers, and I just wonder how you know the amount of money that's involved this financial entanglement. What's most problematic about it in your view and from the research and analysis that you've done.

Yeah, there's two sides of it.

I mean, one is, you know, are the things that endowments invest in are they consistent with the values of the university. So you know, questions like fossil fuel divestment have gotten at those kind of questions. But the other side of it is what are the universities use the funds for? And if you look at the largest head the largest university endowments, they've gone up tenfold since the nineteen seventies. Princeton's a good example because there's no law school, no business school there to complicate it. Endowments up tenfold, but they still enroll a similar number of undergraduate students to what they enrolled in the seventies. And what that means is you go back to the seventies, they spend about ten thousand dollars per year per student from the endowment to support university activities. Today, they spend about one hundred thousand dollars per year per student from the endowment to support university activities. The question I ask is would Princeton still be a world class university if it enrolled twice as many students to serve more Americans for more walks of life, and only spend fifty thousand dollars per year per student. So there's two sides of the question of you know our you know, how should endowments be managed and what should the funds be used for?

I wonder about the demands that protesters are making today. There are lots of different protests happening or were happening on campuses around the country, but in some cases, like at Columbia for example, calling for the school to divest from companies that support the government of Israel or do business there, for example, I'm curious if that type of action would even be possible for an endowment given the complexity of endowments today.

Yeah, well, you know, Brown University in Northwestern University have recently suggested they can. The example of fossil fuel divestment has suggested that you can do some pretty complex divestment. I mean, I think we like to think of universities as innovative places, and we like to think of finances an innovative sector. That's a can do sector where we can use technology and use use innovation to be thoughtful about what we invest in. So, you know, at a certain level, I think there is a kind of can do thing if you get a little bit more brass tack.

You know.

One thing is that particularly smaller endowments invest more of their portfolio with index funds and other passive funds. And there's a growing community of passive fund managers that use ESG, Environmental, Social and governance principles for managing endowment for managing investments, and they use screens. There's over three hundred such fund managers who screen out weapons manufacturers, for example. So you do have private sector finance partners who you can work with to do this, and I think that's why some universities have expressed some openness to looking at what can be done and what should be done. I think the harder question is what are your values and how should you apply your values to your investing. It's it's not the technical question of how to do it well?

And I do wonder you know, going back to those endowment sizes and the important and so these schools hold in terms of having relationships with big donors, major donors and making sure that they can maintain that endowment.

But what does it do?

Who has the power in an academic economy?

Yeah?

No, absolutely, And another issue that your question gets at is the issue of transparency. Endowments have a culture and an institutional history of operating in the dark. They're managed by a chief investment officer with oversight from a board of trustees, and they often work with private equity or hedge fund managers who themselves value secrecy because that's part of the business.

You're trying to beat the market.

You're trying to use private information and your own smarts to outsmart the marketing. You don't want people others to know what your strategy is. So I think opening up your endowments to ESD according to other principles, being more inclusive to students and community members who want to have a say in the endowment being managed according to their values requires a shift in transparency in some of these practices that aren't aren't how endowment managers have been built historically.

Hey, we have a couple very briefly, Yes, because you only have thirty seconds left, should the endowments be taxed based on your view your research?

Yeah, I think that it depends on whether the endowment is being used sufficiently to serve enough students and students from all backgrounds. So you know, if a university uses it endowment to enroll, to grow its enrollment to serve all communities, then it should be tax exempt. If not, then I think there's reason to tax the endowment so that we can support thingstick go where there's not as much resources.

Is it tough to make sure that the right value in place, especially when the board members are overwhelmingly as you write about, drawn from the alumni you tend to donate most generously and forgive us, but you've only got about twenty seconds twenty five.

Yeah, I think it is tough.

But universities are supposed to be places of innovation and ideas, and so I think reimagining the university and reimagining finance to be more inclusive and to give us say to our students and our community members is something.

That we're up to.

Professor, appreciate you taking the time. That's Charlie and Associate professor of Sociology at the University of California Mercet. He joins us from Merseat today. He's the author of Bankers in the Ivory Tower, The Troubling Rise of Financiers in US higher education.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern not applecar Play and ANDROYD Auto with the Bloomberg Business Ad. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play. Bloomberg eleven thirty.

A rare Rolex with a split second chronograph, sold for three point five million dollars at auction in Monaco recently. It's a record price for the model. Carol Collectors are still willing to break records for raring unique items, despite a pullback in secondary secondhand prices for Rolex protect Philippe and Audemar's Pigae watches that peaked back in twenty twenty two.

Well, speaking of the rarified world of luxury time pieces is the upcoming auction of eight watches from the collection of none other than F one legend Michael Schumacher. Christie's is set to auction them off tim in Geneva on May thirteen.

We've got with us a Remy Guillamo. He's head of watches in Europe and America's at Christie's and he joins us here in the Bloomberg Interactive Broker's studio. Welcome, Remy, how are you hello?

Thank you so much for having me.

Well, thanks for joining us. We love talking time pieces here. First of all, everybody knows Michael Schumacher, legend in F one. How did Christie's get hold of these watches? Like, are you selling them on behalf of Michael Schumacher's family.

Yeah, Well, you know, our watch department since twenty nineteen has had enormous growth, actually seventy seven percent, and you know we've been able to kind of bring you know, fresh projects to the world of watchmaking and the auction industry actually by doing thematical auctions, you know, and auctions that was dedicated to Franco, for example, a watch that was called Legendary and Unique Watches, which was basically a single owner collection from Jana himself, who was the former team principal of Ferrari in Formula one, other single collections, and I think, you know, we've been able to We've been very fortunate, you know, to be contacted by the Schumacher family directly and throughout the years, you know, work with them and in the end, you know, they decided to place a few of their watches in our auction on May thirteen in Geneva.

Let's get to the good stuff. What do these tell us? What the time pieces are like, and what's up for auction.

So actually there's a great diversity, you know, the auction on May thirteenth, it's going to be you know, so many watches, you know from Patek Philippe.

Well how many? How many are big?

There's actually one hundred and sixty four watches in the auction. There are eight watches that belonged to Michael Schumacher. So of these eight watches, you have an incredible or Mapiger wristewatch which was made uniquely for him. You know, the dial was completely personalized. You have like his helmet, the Ferrari logo on the dial. Incredible watch. The watch was donated was gifted actually by Jhonta to Michael to commemorate one of his driving championships. So you know he won seven, so.

That was for the sixth.

There's also a great Francois wristewatch, Vagabondage wristewatch again, you know, one of the iconic watches of Francon's completely unique and made for Michael again with great personalizations.

So what's the market like for something where it's unique, one one of a kind? R I mean, and I am curious when you talk about these watches. What's the expectation of how much they might go for?

Yeah, well, actually, you know, the market for exceptional watches is really good, you know, ex extremely strong because we're in a place in the market you know, which you know sicon We're in the secondary market, but we're in the niche part of the secondary market in the sense that we're selling watches that you cannot find anywhere else, right, so there's always demand, you know for these time pieces. And you know, we're really ideally placed with regards to a pronostic you know, for like an idea of value. What we know so far is that we've had great interest, you know, from Americas, from Europe, Asia the Mid East. For these time pieces, the fact that they have belonged to someone so iconic, you know, and which is Michael Schumauer, you know, and arguably the best Formula one driver you know to ever be in the spot, it makes it a bit tricky to tell you exactly, you know, to the the dollar.

You know, you guys are smart, you must have.

Exactly.

For example, the old Mapiger wristwatch estimate is one hundred and fifty thousand starting bit right. Being the watch that it is like, we expect that it will be around four hundred, five hundred thousand, But again it could be more due to the fact that the watch actually and a few watches in the Michael Schumaner collection speak to both people who enjoy Formula one who enjoy watches as well, because the watches themselves are actually great taking, you know, taking everything's considered. To buy a unique wriste watch from Mapuguer, you know that was made Bymapigue, it's already something truly special. But to have something that is unique from one of the greatest manufacturers of all time, that has belonged to one of the greatest Formula one drivers of all time, it's really great.

You know, we've been doing a lot of reporting here at Bloomberg, our Pursuits team about the secondhand watch market that it's been softening. So celebri the own watch is still remaining strong at auction.

Yeah, because it's such a rare occurrence, you know. Yeah, And it's true that, you know, watches in the secondary market. You know, some watches have been softening, but I think these are for the more commercial part of the secondary market. You know, watches that are rare but you know, are still being produced, for example. And what we've been able to see in the past years, you know, during COVID, for example, is that there was a scarcidian supply by the watch manufacturers, great demand from buyers who had excess savings or you know, who just had the means to acquire a time piece, for example, and in the end you kind of ended up in this situation where everyone wanted watches, but the watch manufacturers in the primary market cannot deliver them, so they had to go to the secondary market to acquire watches, and prices went up.

You know.

That being said, watches that are truly rare and truly special. For example, we're selling a great pathic FEEDEP from the fifties in this auction, that's when they're not related to non related to Michael Schumarer, but it's still you know, a hugely important watch. The first perpetual calendar wristwatch that was ever made by any watch manufacturer allied with a chronograph in the moon phase. It's Patch Philip who made it. The watch is value two to four million, you know how it's from the forties actually, and it's only one of twelve known, you know, so.

That is something history, it's like.

And on top of that, you know, when you're buying at Christie's, which.

Is is that what you would call a really blue chip watch, Like, I'm curious about what it attributes make it something a really blue chip one.

Hundred percent one hundred percent blue chip item. And also there's something great patic Flip. They are very well known, you know for their quality of watchmaking, but also for the extracts they keep. So if you buy a Petech VDIP from that era, you know, we're going to do our research, you know, to give you, you know, our specialist opinion on the wristwatch. On top of this, Petic Philip are going to make extratch we'll give you exactly how the diet was, how the watch was born, which doble did it come with, which movement, et cetera, et cetera, so it gives you complete transparent.

I'm interested in the marketplace because there are a lot of places to buy and sell watches right now, especially online places. Why is a traditional auction house the best place to actually go to sell a piece.

I think that it's because, you know, our network is great. You know, we have offices all around the world, so you know we are for example, our auction is in Geneva, but the reality is that it's global. We'll have people you know, in the US that participate in a sale. We have people in Asia, we have people you know, from all around the world. And Christie's is an auction house since seventeen sixty six, so you know, there's a reputational aspect. Of course, there's also you know, a great legal framework behind it where if you buy a wristwatch, you know you will always be able, you know, to know where Christie's people are in case you want to resell it one day. Right, if you I risk watch at Christie's, you have a warranty on authenticity which you know, like lasts for five years and of course more, you know, because the reality is, you know, we want people to be transacting in confidence when they buy at Christie's. We even kind of like pioneer in certain ways, you know, to make sure that people are very or that clients are very at ease when they purchase or sell by you know, using new technology. For example, this spytake felip that I was mentioning the fifteen eighteen eaping goal, which is value two million dollars starting bid. We're offering it with of course, we're offering it with blockchain certificate, which is made by Watch Certificate basically, and it's a certificate which you know, blockchain enables you to track exactly the history of the risk watch what you know, who were the previous like what was the freest ownership of nons, etcetera. So you know, we we you know we And then I think to answer your question about why Christie's, it's also because of the expertise. You know, to have a discussion with an expert who can tell you in detail what a watch is, it is very rare and special.

You're gonna put you on the spot. Twenty twenty five seconds. What brands are people seeking at auction.

Most these days? And just real quickly one or two?

Yeah, So if I had to answer very quickly, which I will, I would say Patrick Philippe dmrpihere. Then you have great independent watchmakers as well, you know, a Crevia for example. The watch market has broad in so much now thanks to the level of passion and connisurship that people are interested in, you know, more than just two or three blue chip brands.

So it's I feel like that's what our team has been reporting. Just it's the market and the options have really broadened out. REMI thank you so much, really fun and we'll be looking forward to the auction results. Remy Gimmo he is head of watches in Europe and America. Is that Christy's joining us here in studio?

Mark, how about you let me drive?

Oh no, no, no, no, please go job honey, please gravel excuse me?

I want to try. It's a good question.

This is the drive to the globe thing well by around yold Don on.

Bluebird Radio, TikTok, everybody, just about eighteen minutes left in today's trading session, getting.

Ready to run.

That's going to be a week.

I know.

Can I just say this week has felt like three weeks.

And you were only here fourteen for four days.

Maybe that's why I felt like three weeks.

I agree with you completely, but just like right, somebody Wednesday I was like, how is this still a sad meeting?

And said decision right. Just there were a lot of apple I don't know there.

Was any Tuesday jobs today. I mean there's a lot.

Yeah right, yeah, all right, So here we are and we're setting up for another gain for the S and P five hundred.

That would be two in a row.

As Abigail reminded us after three read down weeks for the S and P five hundred, we understand the trade today as we've seen really a rate reset along the US Treasury curve after that softer than forecast jobs report.

For a drive to the clothes, we got with us Amy Magnata co Cio at the registered investment advisor at the Genos Capital. Amy joins us from Pennsylvania. Amy, how are you great?

Thanks?

How are you?

We're doing well? Thanks? Hey, So how are you looking at everything that happened this week and also moving forward given that we saw pretty much a rates reset today after uh, that softer than expected jobs print.

Yeah, I think, you.

Know, we we had really become a little bit more cautious back in the beginning of April, after really strong run in inequities since November, and then sentiment, investor sentiment had reached pretty elevated level, so there was a lot of expectations I would say built in, so we were a little cautious coming into April, and we did see some of that, you know, a little bit of a market correction, and as you said, I believe it's just kind of this repricing of Fed expectations for what the Fed's going to do. So a few weeks ago it was higher, a couple of higher than expected inflation prints, and that concern market participants that rates.

Would be higher for even longer.

And now with the softer jobs report today, a little bit of a reset there now thinking that we will see some rate cuts this year, and then market's pricing in I think two rate cuts September and December, so kind of a reset of expectations.

As you said, Hey, Amy, what are the questions you're getting from some of your clients, your investment clients, and what they want to know and what they're thinking about in this environment and where they are thinking, Okay, here's where I want to be or where I want I feel comfortable with exposure, Here's where I don't.

Just with the strong performance we've seen in some of the large cap growth in disease last year, a lot of investors are concerned about, you know, has that run its course? And for us, we always recommend, you know, a more diversified portfolio. Certainly we're going to have biases and over and underweights, but.

We think investors should be a little bit more diversified.

Today, I think investors are concerned about rates and what that means for their fixing come portfolios.

And also just you know, given the strong run and equity markets, you always get you know, kind of is this the top?

And then as we get a little bit closer a few months from now, I'm sure we'll be getting a lot of questions on the election and what that might mean for markets.

All right, So so how are you steering them? My understanding is you like the small cap space. We know, the Russel if I look at at the Russell two thousand is pretty flat on the year. Is that because there's more value to be had and you see more upside.

That's correct.

So we like small caps here we think valuations are very attractive relative to the large caps and then also relative to small caps own history. But I think one important note is that we like active management and small cap right now. So we do use a blend of passive and active strategies in our portfolios and that we recommend for clients. So we do like active in small cap. If you look at the Russell two thousand index, you know we have a hot, very high percentage of those companies are non earners we want to be. We think active managers in this environment today where there's greater dispersion, have really can add value, especially in that small cap space where it's a little more inefficient.

Amy where where do you not want to be right now? What do you what do you want to stay away from?

We have been, I would say where our underweights are have been in on the international space, So we still own international, but we do favor the US over international, and then with in international, we've been underweight Europe. We favored Japan and emerging markets, and so we've been really staying away from Europe. Also in the fixeding come space, we're shorter duration, so we're kind of avoiding long duration today given you certainly have a move in rates in the last few days, but we still think there's a lot of volatility there and that long term rates could stay a little bit higher. So we've been a little bit more flexible in fixed income and shorter duration. Plus you're getting a nice yield on short term securities right now.

Interesting, it's interesting. So I do also think about politics. Like you said that later on this year, you expect you're gonna get a lot more questions from your clients. We've had a fair amount of folks that feel like, come on and say it doesn't matter. Election year is usually good because candidates are out there promising everything and everybody gets pretty excited. But how are you thinking about the election, the outcome, and what it could mean potentially for financial markets and the investment environment.

I think, you know, what we typically see leading up to the election is that the incumbent president will try to promise a lot or try to get some things.

Done in order to ruin some those votes.

I think it's a little bit harder in this environment to get anything done in Washington, as we know, So I think there'll be maybe less of that than we've had in previous cycles, but we have seen some things with the student loan forgiveness and others other things. But I think, you know, typically the outcome does not matter. There's volatility leading up to that uncertainty about what proposals might make it through, but typically there's a rally post election in the back half of that year, regardless of the outcome.

It's more of a certain dy and the market does not like uncertainty.

Do you see this year be a little different though, I mean, this is kind of a bizarre year.

It is, and I think if there's one year it probably could be different, it might be this one. We also have the tax cuts expiring at the end of twenty twenty, so I think that as we see the proposals for how that might impact, you know, that could impact markets in the short term, we could see some volatility surrounding that uncertainty, but typically we get.

That relief rally regardless, and then once that.

President is in office, you know, we would see there'd be some really you'd have to really understand their proposals and what could actually make it through.

You know, in terms of you know, investment cycles as they go, and it's kind of interesting kind of some of the swings we have seen in terms of expectations from FED policy and the outlook or the recession that was being called for for so long. But when you look at the environment today, does it.

Feel like you have more visibility?

Do you feel more confident or do you feel a bit more nervous And just got about thirty seconds.

Yeah, we've pretty confident.

I would say twenty twenty four low probability of a recession. As you said, people have been calling for a recession for probably the last eighteen months. We think the inflation report today is self landing ish for sure, but I think the key thing will be inflation. If inflation can come down the next few months.

We've also saw.

We saw wage growth was slower in the implement report, So in the last three months wage growth has been about a percent annualized basis and that's kind more in line with the FED target.

So I think growth is still pretty.

Solid as long as we can get inflation to come down a little bit, and if FED can recalibrate monetary policy, I think twenty twenty four is pretty We're pretty.

Positive on that.

All right, some optimism. Hey listen, so appreciate it.

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