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Apple lost its court fight over a fourteen point four billion dollar Irish tax bill. Google lost its challenge over a two point six billion dollar fine for abusing its market power. It's a double boost to the EU's crackdown on big tech. The use Court of Justice in Luxembourg back day landmark twenty sixteen decision that Ireland broke state
aid law by giving Apple an unfair advantage. The same court ruling that Google illegally leveraged the search engine dominance to give a higher ranking to its own product listings. Ed Loldos, Co, host of Bloomberg Technology on Bloomberg TV. He's got an EU law degree, so he's the perfect guy lawyer. He's the perfect guy to talk to about this. He joins us from our San Francisco bureau. Okay, ed fourteen point four billion dollars, it's more money than two
point six billion dollars. But if we read between the lines here, which of these is a bigger impact for the respective company?
You know, joining you guys to talk about how shiny the new iPhone is is a lot.
Easier than this.
But let's get we'll get there, don't right.
Look.
In twenty sixteen, a European court ruled that basically Ireland as a country but a member state of the European Union, has given Apple preferential tax incentives that were illegal under EU law, and Margaret to Vesta, the competition chief, in sort of landing this decision today, has come out on the right side of an argument she's made for a long time, which is that any member state of the EU cannot have an ad hoc beneficial preferential tax arrangement.
Where the country.
What we're talking about is like where a country says to a tech company, come build with us, invest here, build offices, bring people, and in return you get these things. But the things you get a difference to what everyone else gets, and so the money is eyewatering. But just really simply it's been sat in an escro account gathering interests since that initial twenty sixteen decision. All that happened was Apple had a right of appeal under EU law, which ultimately today they have lost.
Wow. So I mean this is interesting. Of course, this tax case.
There's also a lot of US anti trust news that's going on, especially when it comes to Alphabet, the Google.
Ad Empire, etc.
But with all of these things, I always wonder how much does it actually matter for the company? I know the tim you were getting out that a little bit, But we talk about these fines for these companies that have more money than a lot of countries proper, and then these antitrust trials which just take years and years to play out. I mean, do investors really care about this?
I've always found it difficult to track the performance of the stock of a megacap tech company against the headline about market competition or anti trust. You know, it's always been difficult to tell how sanguine or concerned investors are that a real anti trust action will result in a
material impact to that business. Just today, Da Davidson, I think put out or initiated coverage actually on Alphabet, the parent of Google, with a neutral recommendation, and a big part of that was we feel that anti trust is a headwind to the core search business, so you've always got to take it into account. And I think you guys have had great conversations with Jenry of Bloomberg Intelligence that in each jurisdiction, what we're increasingly seeing is not
just the action of a fine. So in this case in Google today, they had to pay a fine, which to them is small amount of money in the grand scheme of things, But it's whether or not a regulator requires them to make a fundamental change to their business practice and therefore whether it will change the fate of whatever that business is.
That's why it seems to me ed if we read between the lines, the case about Google, which has a smaller fine than you know, how much Apple has to pay, is a bigger deal because yeah, okay, it means Apple's got to pay more taxes. But for Google this could be like a fundamental threat to the way it does business at least with this product. Right.
Well, I'd make one distinction, which is that mechanically Apple is paying back taxes or it's paying taxes that it didn't pay in the first place, whereas this is an actual fine. And one interesting distinction I guess under EU law is that when an action is brought by the Commission and a fine is issued and then paid. Often it goes into a pot of money that's then redistributed across the European Union member states based on complex formulas.
So you know, they're both slaps on the wrist. But you know, again, the biggest question that the street and markets are going to have for Google is EU a regulator on behalf of four hundred and forty million people, So an important market for Google going to require them to change the practices that they currently use. And I don't know that we quite have the answer on many facets of Google's business, which you guys will know will
also now include AI. Because regulators are looking closely at the investments made by a number of tech companies in other AI companies.
I would imagine that they are, well, let's tie this back to Apple, and let's tie this back to Yaeshuro, so we can pivot to talking about how shiny the iPhones are. Because of course Apple knew that this was a company happening. They also knew that there was a presidential debate happening tonight, and that's probably the reason why, of course we had the event. The big iPhone splash happened yesterday, ed.
It's likely. I mean Bloomberg's reporting was originally that Glow time the Apple event would be today the tenth, And when I got the invite from Apple to my inbox, it was the ninth. And you know, I think sources had told us that that was the consideration that you have the presidential debate. And now we know that the EU Tribunal was issuing this decision today and that's now been gone. I just add finally, it's kind of unusual unusual for Apple to do an event on a Monday,
but they did. And you know, I don't know what you guys would say. You Katie has got what a six or seven generations old phone? You know, she is the case study here of what happens next. Does Katie Greifeld now go up and upgrade her iPhone? That question is being asked world over.
It seems like Katie's note interested in the AI stuff. You just want to know what's best for posting to Twitter?
Yeah, pretty much.
I want to be able to tweet. If I could actually think and it tweeted for me, that would be great.
You just need a posting phone.
Yeah, exactly, I will say I'm not going to buy an Android, though I will eventually get a new iPhone. So that network effect that we were talking about with Mark Erman.
It's real, Yeah, no question, it's real. I think. Also one thing that I want to go back to ed that she saw close up and for stand yesterday is apples dive into health. And the company for years has been making its pitch to consumers that it is a safe, it's safe with your data, that your data remains private on the iPhone, and for years has been going further and further into health. Talk to us a little bit about what Apple could do to disrupt the healthcare space.
I mean, this has like a been more than a decade long promise.
Yeah.
I mean the two technology updates are sleep apnea through the Apple Watch, which starts with series ten but is not exclusive to it, and hearing aid technology through AirPods. Both of them are pending FDA approval, but I mean Apple in a presentation publicly said the FDA approvals close, and you would wager that they wouldn't say that were they not confident. And it's interesting because like sleep apnea, this is something that of course most Mark German had reported,
but it's kind of logical with the watch. The more interesting one is probably the hearing aid technology. I don't know if you guys kind of track the markets, but some hearing aid stocks fell because they take the competition from Apples seriously.
Though the.
Mechanism, the modus operandi through airports is very different to a discrete hearing aid, and the story that Apple's trying to tell is holistic. Like you point out, Tim, we're super good with privacy and data, but we're also about like, you're going to use this anyway, so use it for something that's beneficial to you.
Yeah, that's interesting.
Of course, we were talking about that and talking about the notion of people just keeping it in and talking to you, so we'll see to your point ed. I mean, it's a good one that other companies, investors in other companies are taking the threat seriously when it comes to sort of the ambitions there when it comes to hearing aids.
Talk to us about the watches too.
I mean, I care about the watches, not because I'm ever going to switch from a garment. But we did get some details on what the next iteration of watches. They're what the next evolution in the watch story might look like.
Yeah, it's always interesting, like twenty four hours after the fact of what people are talking about and I see on social media, even from Mark German to sort of rethink on the watches. They're a really important part of Apple's strategy, right because you're not necessarily going to spend one thousand dollars on a phone. You might find, you know, four hundred dollars more palatable on a smart watch that has fitness, sport, water sport and health data for you.
But it also goes to the other thing that we're kind of joking about yesterday. But it's seriously important in markets like China that the Apple Watch hasn't had a refresh since twenty twenty two, really, and it's aspirational to have an Apple product. And in the case of the watches like a piece of jewelry, you know, and they really emphasize the materials. You can get yourself an Ermez wrist strap, but that is actually, you know, of substance to a lot of buyers in a lot of different markets.
And it's core to the DNA of the watch. Remember that first generation Apple Watch at it was about a decade ago. There was like that fourteen thousand dollars gold version.
Right, It's like, essentially, yeah, you're talking from experience. That's not something that adorned my risk.
Yeah didn't say though. It didn't adorn myris either. But my first thought when that came out was like, this thing is going to be obsolete in a year. I can't believe anyone would buy such a thing.
One thing I'm going to look into though, that I find really interesting is when the smartphone comes out, everyone goes, oh, well, I'm on T Mobile, I'm on Verizon, and they'll give me a deal and I'll upgrade or I won't. But remember, in the United States in particular, there are lots of health insurers that will subsidize you buying a piece of health or fitness equipment. And I'm really interested to see
how that works this time around. You know, people are basically post pandemic, so concerned with data about their wellbeing, and you do wonder if that's going to be a big driver an upgrade cycle on the wearable side.
Hey, before we let you go, just in the last forty seconds we have with you, Now that we are twenty four hours out from that event, what are the analysts saying what are their notes saying in general.
Everyone is so bullish and really guys probably get Dana ives emails and you're in books from web Bush. The supercycle's coming if you believe the cell side. And I think part of that is irrespective of whether Apple Intelligence is here now, it will come eventually, So buy yourself a new handset in the anticipation it will come.
D Lovelove, co host of Bloomberg Technology on Bloomberg TV, also has a degree in European Union law, so the perfect guy to talk to for everything tech and of course antitrust in regulatory from the EU as well. He joins us from our San Francisco bureau.
This is Bloomberg Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio and Television.
It is Bloomberg Business Week. That's Katie Greifeld in for Carol Masser this afternoon. I'm Tim Stenebek, Katie. When we talk about recessions, yeah, we often talk about economic recessions, Okay. The National Bureau of Economic Research defines them as quote, a significant decline in economic activity that's spread across the economy and lasts more than a few months. Yeah, okay, what about a dating recession.
You know, a love recession if you will.
Well, we bring that up because then you see Afford University study, along with recent government surveyed data, bolster the conclusion that COVID not only sparked this economic recession, but also a recession in American social lives and it lingers. Years after most US adults were vaccinated for millions, dating and other social activity never recovered, with effects that aren't just personal and psychological, but economic and perhaps even political.
We got Ben Steverman with us. He writes for Bloomberg Business Week all about this type of recession. He's Bloomberg Newswalth reporter and he joins us here in the studio. So what exactly is the definition of a dating recession.
Well, this is a term that comes out of research from Stanford University, and it looks at informal relationships. So you know, we have actually have pretty good data that marriages pretty much held up during COVID. If you were living with someone and you liked them, you tended to
survive the pandemic. But we don't have really good we didn't have really good data on like these people, like informal dating, so somebody maybe that's somebody you see once a week, or these short term relationships that go on for three months, and you know every we all know these sort of serial daters. You jump from relationship to relationship.
This survey was conducted in twenty seventeen. Then he then this researcher did it again in twenty twenty and twenty twenty two, and what he found was that basically he estimates there thirteen million more single people now than there were before the recession. So that's like one in five US adults who was very concentrated among young people, which you would expect they're the people who are dating. And so I had that piece of data from this new study.
But then I also went and analyzed the American Time Use Survey. It's another way of getting at informal social lives and seeing what's happened to social lives over time. And actually what I found there was more more disturbing. Basically, the Bureau Labor Statistics, I ask people to track their days and what we see is that face to face socializing has declined a lot, which is maybe not surprising that it declined a lot during the pandemic when we were all stuck at home. But the thing is it
hasn't recovered. So like you would expect, like the economy has bounced back from COVID, you would expect that it's like face to face socializing you would have as well, But it's really kind of stuck. We're kind of stuck basically where we were in twenty twenty one, which is like the deadliest year of COVID. This is based on twenty twenty three data, so let's hope things are coming
back even more this year. But what I tried to do is then think about what is the long term consequences for some of these some of these trends, and maybe what are some of the psychological and even health effects that might have.
Well.
I wonder we were talking about this a little bit in the commercial break, how much of this is demographics, because it seems like gen Z is dating less, they don't go out as much. But I guess that wraps into of course, a lot of them were really coming into full fledged adulthood during the pandemic, so maybe those two are impossible to separate. But talk to us about the potential economic ramifications here.
So these informal relationships we have. I mean, obviously social life is just important for your mental health and lots of other things, but these informal relationships, they're they're the first steps that you need to move in together, get married, have kids, buy homes together. All these things are all have been delayed over the Like if you look at the way before the pandemic, you look at what what miles, which milestones thirty year olds are hitting? We keep hitting
those milestones later and later in life. Yeah, of buying homes.
And the question though that I would have is and so you can't continue, you can't measure this. Would this have happened without the pandemic?
I think the long term trend suggests that this kind of both the hitting the benchmarks later and just the social decline of community to go one a social connection, Those are long term trends that were happening before COVID,
but COVID seems to have really accelerated them. And then you raise the question about young people and how they're different, Well, what if you're a young person and you've never learned that those social skills, you never learned those like the sort of the ability to kind of break out of your shell and put yourself in new environments, whether it
stands for or you know, I'm obsessed with nightlife. So while I was talking about nightlife, but what if you've never learned to do that, you don't even know what you're missing. So I think that there is possible something profoundly profound and shifted in our culture. And actually see some signs. This is a little depressing, but I see some signs of optimism in that there might be a
little bit of a backlash to that happening now. So the other thing I see in the Time you survey data is that people are attending and hosting social events just a little bit more.
So.
That's the one piece of social activity that seems to be coming back. We're still spending a lot of time with our phones, a lot of time with computers, but people are hosting parties and going to parties more so it seems like we're trying and some only some people are trying to get out there more.
It's some a good optimism too and on Ben Steverman is a Bloomberg News wealth reporter. Check out his story. You can read it on the Bloomberg Terminal and at Bloomberg dot com. He writes all about this dating recession for a Bloomberg BusinessWeek.
You're listening to the Bloomberg Business Week podcast. Catch US Live weekday afternoons from two to five pm Eastern Listen on Apple CarPlay and then Brought Auto with a Bloomberg Business Act or watch US Live on YouTube.
A forty new set of wheels right off the lot has become increasingly difficult in recent years. What do you think the average new car buyer in the US paid in July?
I have no idea, Tim, I was hoping that you would tell me.
Close to fifty thousand dollars and dollars for a car. Yeah, yeah, that's according to Kelly Bluebook. One painful result is that average payments for buyers of new cars in the U rose to seven hundred and thirty five dollars a month in the first quarter of the year. That's according to experience. But if you lease it, the average monthly lease payment for new vehicles fell to five hundred and ninety five dollars. And some evs can be had for even less, some
for a lot less. Keith laying his Bloomberg News Automotive Regulations reporter he joins US from our Washington DC bureau. It's almost too good to be true. Keith. The headline on your story about a twenty dollars per month lease for an ev we got to start there. Where did this happen?
So that was a deal we confirmed at a dealership in Colorado. It actually came to our attention because Chris Hilbert, who was one of the potential car buyers I quoted in the story, had mentioned it, and researching online, I saw it had been going viral. So I contacted the dealership and they confirmed that it was true. That was their offer in July, and even in August they had like a twenty dollars deal. And then if you hadn't mentioned the article that was written that helped that deal
go viral, then your deal was twenty five dollars. And then even in August they confirmed they were offering the Nissan Leafs for as low as sixty five dollars a month.
It's just because nobody wants evs, Is that why?
Well, there's debatable about the level of interest in the evs, but in speaking to car dealers for this story and others, there's a lot of inventory that has been on car lots that car dealers are incentivized to move and manufacture their manufacturers are providing extra incentives for them to move, and there are in the case of leases, there are evs that no longer qualify for federal tax credits because of new rules that were enacted by Congress in the
twenty twenty two Inflation Reduction Act, which placed limits on where the cars are built, where their batteries are from, where the minerals are from the price of the car, even the income of the car buyer, and all those limits applied to purchases, but leases are considered commercial vehicles and none of those limits to apply to those. So the manufacturers then get the credit themselves, bundle it with other incentives to offer good deals on cars they really want to move from their lots.
Some of that I've been wondering when it comes to EV's I mean, Tim made reference to the demand kind of not being there. Maybe not in the way that a lot of these automakers had expected it, But from the buyer's perspective, there's a lot of question marks over the resale value of an EV, especially as battery technology
continues to develop. I mean, is it possible that people might be more inclined to lease a v in EV especially at some of these low monthly payments that you write about, versus buy one and take the resale risk.
Yeah, that's definitely an advantage that people have raised about leasing, that the technology has changed so much even in the last couple of years, that you kind of just don't have the risk of having this car which could have different charging technology in five or ten years. So people that have been in the market for leases have I did that as an advantage, and the types of deals that are out there that it's really hard to match on traditional cars at this point.
So I guess the question that I have is what demand looks like moving forward, Keith, Because if we were talking a couple of years ago, everybody would be thinking EV's one hundred percent would be the way to go. But I think it was just last week we learned from Volvo that they're sort of ditching their timeline. Ford is completely throwing their timeline out the window. Here, what's the timeline for a transition to EV's. Is that something that you think will even happen.
Well, you know, it was at the beginning of the Biden administration. All the carmakers were at the White House and there was this big thing except for Tesla, right, except for Tesla. Yeah, there's a lot of history.
There's a lot of history.
Yeah, there's a lot of history there. But the major, the other major automakers were all the White House, and there was a big pronouncement that we're going to have fifty percent ofvs by twenty thirty or zero emission cars by twenty thirty. The pay lease of ev adoption probably doesn't get us there. Currently, EV's we're just under ten percent of the market in twenty twenty three. We'll see
where they land in twenty twenty four. Leasing is a rare bright spot leasing ev leasing was thirty two percent for EV's in the first quarter this year, and it was eleven percent, i believe for regular cars. So leasing has been a bright spot, and it could be the case that, you know, leasing allows people who are kind of skeptical about the technology to try it for a
few years and decide if it's for them. So it remains to be seen whether we get to the types of numbers that we're talked about in that White House event. But the carmakers have not said that they were going to stop making EV's completely and for no other reason, then they want to sell cars in China.
This isn't really a question so much as a comment. But in defense of leasing, I mean, I like to lease cars, Keith, simply because I like getting a new.
Car every couple of years. I like to try out different.
Times in New York City.
I know, but I have a car I have to drive, get to the horses, et cetera. I don't know.
Maybe that's a factor. That's my comment. It's not a question, Keith. I don't know if you want to do anything with it.
Well, yeah, at leasing has it has its fans. It is a and it just depends on whether it makes sense for the factors, the type of factors you mentioned. It's a practicality consideration, and that's what we're finding a lot of people are basing their consideration of EV's on.
There are people, you know, I talk to people for this story who were buying their second or third EV And there are some people that say they don't trust the charging and they do a lot of you know, long distance trips and don't.
Want to Oh sorry, go ahead, Keith.
No, just it's just kind of comes down to each individual car buyer whether leasing makes sense for you or not. And in some cases, you know, I talked to a gentleman for this story who leased a Kia Nero, and he said he got a deal where he's paying three hundred and seven dollars a month, And he started out trying to buy a key in Nero and the least deal was just so good he couldn't pass it up, he said, I couldn't. You can't get anything for three hundred dollars a month.
These days, we only have like twenty seconds left. But because it better, Could it be better for some people to lease, because they're concerns about battery life and battery degradation, Yes, because you can.
In that case, you could lease for as short as two or three years. You're not you're not stuck with a car throughout in the years where you could have those type of problems. If that's something you're concerned about.
Keith Lang, Bloomberg News Automotive Regulations reporter joining us from our Washington, DC bureau. You can read his story about that twenty dollars a month lease for that ev out there in Colorado at Bloomberg dot com and on the Bloomberg.
You know you have a car too.
Yeah, it's not an EVC.
No, No, can't do that range.
I drive the car every week to park it. Oh, it's like it's really to you. Shuffle it around, Shuffle it around. That's the life of a keep keep it fresh. You're listening and watching Bloomberg BusinessWeek. That's Katie Graeffeld. I'm Tim Steneveek, and this is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting a two pm Eastern on Applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa Play Bloomberg eleven thirty.
Let's talk academics, because the gap between women and men in leadership roles at US business schools has been shrinking, especially as more women are promoted to positions that are stepping stones to dean ships. We've got some numbers here. In twenty twenty three to twenty twenty four, women deans at three hundred and sixty eight US business schools represented thirty percent of the total. That's according to research by
the Association to Advance Collegiate Schools of Business. It's an increase from seventeen percent back in two thousand and seven to two thousand and eight. What's more, the AACSB found women now count for forty three percent of associate business school deans. It's a position that often leads to a dean ship. Thirty four percent currently in that role. We're once associate b school deans. For more, We've got a great roundtable Dimitri Casanidis, she's Bloomberg News Senior editor, and
we've got when Maw with us. She's dean of the Villanova School of Business. They both join us here in the Bloomberg Interactive Brokers Studio dimeter. I want to start with you, and I want you to set the scene for us, because each year you spend a lot of time focusing on business schools for Bloomberg Business Week. Take us into the gender gap when it comes to leadership at these schools.
Well, it's just like the numbers that you just mentioned. I mean, there's been a substantial gender gap, but we see it narrowing and importantly so I think you see it to some degree in a way with our guests today, with Dean Mao of Villanova. Women who've been at these institutions for a while, who've been growing in different positions and moving their way up. And as we see more and more of those women sort of stepping into these associate dean ships, you know they're primed for taking on
these roles. I think it's just the generation and the time that we're in that it's all kind of coming together. There's still a gap, and even I think there's still a bit of a gap. I'm looking it up now and I'll know that in a minute when I put my finger on it when it comes to salary and some other differences. But it is meaningful. It's meaningful in
many ways. As we reported in our story, Dean mal was one of several deans that we reported on to the women in that institution in various roles, to the women who go to those institutions and study representation, as we know, matters, and I think it's a very meaningful change. Also, just given the way that these institutions are led, there are differences, and so I think that it's something that we're going to be happy to keep tracking in various ways.
Well.
Deanail come in on that point, of course, you're dean of the Villanova School of Business. I actually went to school at HAVR for just two miles down the road.
But you've been with Villanova in various.
Role since nineteen ninety six, I believe. So what was the path to finally becoming dean of the business school?
Oh, it's pretty much my entire career. So I started as an assistant professor in the economics department really one year out of the graduate program, and then became tenured at the Business School, and then took on the department chair bro only because my colleagues wanted to hear me called chairman mouth, so they waited for ten years for that to happen. When it finally happened, they were like, yeah,
we want her. I never actually wanted because in academia, I think what drew us to this profession, at least most of us. I try not to overly generalize, is to a degree of freedom. You don't really have a boss. I mean, department chair really isn't the boss. It's really everybody is your boss. So and also like you are really not drawn to the salary, right, and so it's really that freedom. It's that purpose. It's that working with young people and research, right, those are the things I
dow you there. So being an administrator isn't in most people's plan.
So but yeah, dmail, I'm curious how the makeup of the school is representative or is not representative from a gender perspective of the actual administration.
In terms of you know, the deans or yeah, in terms.
Of the deans for example. And I can only draw in my own experience, but when my dad, when my dad went to business school in seventies, it was almost all men. When I went to business school, you know what, eight or ten years ago, it was like fifty to fifty. But it didn't seem like the administration was fifty to fifty gender.
Well, yeah, so if you count department chairs and the deans and associate deans right now, out of the five department chairs, we only have one female, and she's actually the finance department chair, which has sixty percent of our students, so a very very important job, and she's done a fantastic job at that. In terms of the dean's job, let's just zoom out a little bit for the whole university. We have six colleges, right, so six deans, five are
female Evillanova. So so that's impressive. But if you think about history, right, Dmitria is right that we have come a long way. It didn't just happen overnight. I'm looking at the hallway and see all the prior business school deans pictures and I think I'm the second female. The previous dan was the first female dean, Enjoyce Russell, and then prior to that all male and mostly priests. And so yes, that's right, yes, school, so it's certainly come
a long way. But right now, for instance, I have two senior associate deans and one male one female.
Yeah, so there you go, and that's the Villanova makeup there. And you mentioned that it's not something that you necessarily get into for the salary. But Demitria, I want to come to you on that point. I mean, you think about the data that you have and what does that show when it comes to the salaries.
Yeah, well, I mean we show we've collected data. Again, it's from AACSB, the association that Tim mentioned, and there's still there's still a gap. I mean, the gap in salary has been somewhat consistent. It feels like over the last five to eight years, which is about women lagging men in the deans roll five to six percent in salary.
So you know, if you're looking at say an average salary for male deans today of about three hundred and twenty six thousand versus for females of three hundred and thirteen three hundred and fourteen thousand.
You know, it's not a huge.
There's still huge, but it's a disparity. And these are people again, you know, coming up through the ranks long time, with the institution holding important roles. You know, sometimes you just scratch your head and wonder why their.
Diarity hold on? Why is college and graduate school so expensive? What are the salaries?
Well, those.
They are.
They are big salaries, but they're big jobs.
Maybe I don't know deanail In terms of the cost, that's very interesting. You asked that, I think inflation adjusted economists here, so confession please, it didn't go up as much as the sort of headline price tach says, because you also have scholarships, right, and so the net cost of attending actually in recent years have gone down, did
not go up. So so that's but if you see the price tech, it's like you go to the car dealership, No one actually pays that tag price, right, you kind of have discounts, and so most the universities give out discounts based on these and because that information is very hard to obtain, so there isn't a transparency to how much the actual cost is for the students. So most universities, believe it or.
Not, are being.
Pressed squeezed. Right, on one hand, you're giving all these discounts, so you're not bringing as much tuition, And on the other hand you have the rising costs with faculty salary and all that.
Yeah, I wanted to weillly have a couple of minutes left, and I want to get into some of the challenges that schools are facing right now, the effect of the Supreme Court decision back in the summer of twenty twenty three that bans affirmative action. How's this playing out at Villanova and at the Business School.
Actually, we have not finalized the numbers for this year yet, but preliminary data seem to suggest the numbers are pretty much stabilized. It didn't have a big impact for a school like us, and maybe partly because we still have very strong outreach and and also if you think about it. M I T I think came out and said that. They came out and said that was a big story.
The number did go down for them, right, And and I was thinking, like just a few days ago, well, that has to have impact on the school right below, right, So these students go somewhere.
Where did they go?
Right?
Could they be coming to some school like us? And maybe that has an impact on sort of the next year schools and then it triggles.
Down to the following year.
So that's maybe just a sort of an educated guess and for us, maybe it's it's a wash.
Demeitra. We only have a little less than a minute. But as I mentioned, you spend a very good part of your year focused on the business schools. I'm not going to give anything away because I don't know anything, but I know this time of year is when the rankings usually come out. Can you give us any preview of sort of how you're thinking about things this year? Just very briefly.
I mean, we're we've been talking to deans at several schools and you know, going out there and taking a look at what's happening. The rankings come out next week, By the way, September seventeenth. They will publish at twelve oh one am. These are global rankings. You know, a lot of the themes we've been seeing in recent years are picking up and just taking on greater importance. The AI.
The theme of.
AI in both how it's being used in the classroom, how it's affecting so many aspects of the education, and also in the jobs that the graduates are seeking. And then jobs is a big one. This year. It's been a challenging year for NBA grads.
All right, well, we know that has continued. We know we'll get you back on as soon as that list does. Come out to meetor Cassinedez Bloomberg, new senior editor, when Mount Dean of the Villanova School of Business. Here in the student I'm brothering.
Marc a journal. How about you let me drive? Oh no, no, no, no's honey please, I'll do the gravels ease, mate. I want to try it.
It's the question time.
This is the drive to the clothes, don Kim.
I think we'll drive round each other.
Down on Bluemberg Radio.
Would you look at the time, Katie, Oh my god, you see three forty two.
It'd be true that we're only eighteen minutes away from the closing bell.
Think, yeah, I think that is true. I think it's fair to say how our market's looking. We just heard from Charlie.
You know it's okay again, we're not quite in we're so back territory. But the S and P five hundred, it's up three four tenths of percent. Can't really complain there. You take a look at the Nasdaq one hundred right now, you're big tech names. We're up nine tenths of a percent. So some nice follow through on what we saw yesterday, falling in absolutely punishing a week last week.
Uh testing, it works, it works, Okay, Mike is on. I want to see what Amanda Gotti has to say about this. She's chief investment officer at PNC Asset Management Group. Amanda, I want to talk about the s word seasonality, because September seasonality is something that we were reminded of last week with that huge decline in the in the well, yes, it's fair to say everything else. I was going to say, this sucks, but how are you thinking about this, Amanda?
Well, it's great to be with you both.
I would just simply say it's a sign of the times, and yes, that is a Harry Styles refer there. It is. We're hunkering down here for what we think is likely to be a pretty seasonally average yet challenging environment for investors. September is a tough month, and we started off from a very tough perspective. I think it's really a function though, of there's a lot of news and a lot of data points yet to come here. Investors have had it really easy for the better part of the year up
to this point. We're sitting at price to perfection equity levels. There's just not a lot of headroom to absorb you potentially some negative data points here, so things are getting choppy, and I think it's right on cue with a Sign of the Times.
I'm trying to think frantically of another Harry Styles reference, and all I have to say is, as it was, is a good song.
It's a great song.
Yeah right, it was my COVID song I listened to a lot while I had COVID the first time. Anyway, Amanda, I'm going to ask you a question that I asked one of our guests on the Morning show, and that is you think about just the cadence of this week. Of course, tonight we have the presidential debate between Kamala Harris and Donald Trump, potentially the only debate between the two this cycle, and then we have, of course CPI coming out tomorrow morning. What do you think is more
important for markets at this juncture? What will you be paying more attention to?
Well, I think.
CPI is certainly much more important than the debate tonight. I'm not sure that we're really going to get a lot of hard hitting market intel that's necessarily going to drive markets forward here based on what we hear tonight. Obviously, policy differentials on either side of the isle are going to matter going forward, but I don't think there's going to be enough clarity tonight to move markets materially. CPI
is obviously a critically important one. It's a key input into what the FED might ultimately do, but I'm not sure the investors are really even that focused on CPI. I think they're craving the watermelon sugar high from a rate cut coming next week, So I think that's probably really much more where the markets and investors' minds are.
You're on fire. You're just putting me to shake.
That's how she rolls.
I can't think of a single reference right now. It's just Luck today.
And I'm really interested that you said that you're more focused on CPI, because I asked Katrina Dudley that question this morning, and she's actually more interested in the debate from sort of the investment perspective to see actually how similar their policies are when it comes to some of the economic proposals. Of course there is a lot of distance when it comes to other issues. But I mean, how much as a medium long term investor do you
pay attention to their policies. Of course we talk about the Trump trade the Harris trade all the time, but what does the Trump investment look like versus the Harris investment? If that makes sense?
Well, I actually I feel like it's a little bit early to say. I mean, we can lean on sort of the traditional policy stands for the Republican Party and certainly for the Democrats, but I don't know that we have enough information, even at this late stage of the election cycle to know for sure what the nuances and differences are. I mean, I think the debate will be very interesting. It's always entertaining to watch how these things
play out. But from our perspective, what matters more is the makeup of control in Washington, and so we're not to know that as a function of tonight, there's a lot of seats up for grabs, and so you know, it's not going to be until we really get to the election itself where we have, you know, a lot more clarity around what policies might actually get implemented or not. Markets always prefer gridlock. Markets always preferred not a lot of policy change, and so I think that's the best
kind of scenario, gridlock for the markets. But if I had to point to one thing that I care about more than anything else from a policy stance, is what happens to corporate tax rates, And so if we get some intel on that tonight, that'll be great.
But I think there's a lot more to come on that topic, is it.
Do you think, apart from the makeup of Congress and the presidency of the idea that gridlock is good for investors? How do you characterize election risk?
We don't tend to focus on it as material news, which sounds like a crazy thing to say, but I think from a market perspective.
It's actually boys. It creates a lot of noise.
It creates a lot of short term volatility, but we do not position portfolios around binary outcomes, and this is really one of those where it's one way or the other, and so you know, we're trying to position portfolios so that they have ballast because this volatility story is very much picking up again. But going into the election, we're also very well diversified and very focused on quality because it is at this point anybody's guests in terms of
what the policies are ultimately going to look like. So that's that's sort of our defensive offensive playbook at the moment going into the election.
Well, a minute left, what does quality mean in that environment? What are the characteristics of a quality company? And is that just big tech? Because that has been the definition for a while.
I don't know any Harry style style songs, but there was no reference in there to Harry style.
You use a song, I don't know. I've used up all.
I've used up all my references, so I can't give you another one there.
But from a.
Quality perspective, we're definitely focus on high recurring revenue basis, strong defendable margins.
We're in a margin compression environment now.
So those who have the ability to pull levers to defend margins we view as very much quality throwing off a ton of cash, low debt, Burton's low leverage. Those are kind of the key characteristics around quality. Certainly some of the big tech names fit that, but there's a lot more diverse options out there than just big tech.
Amanda Gotti always bringing the references the song of the season. You guys see the song you do the song of the season or something, right.
Amanda, Is that what it is we do every year? I actually I have a Rolling Stones T shirt on.
You can't quite see it today, but our song of the year for this year was I can't get no satisfaction by the Rolling Stones.
Do you have it?
Ten seconds? You have it picked out for next year yet?
No, my gosh, And if I did, I would not reveal it yet. You'll have to have me back closer to the end of the year.
Hey, we're going to have you back closer to the end of the year, of course, because you do The twelve is the twelve days of Christmas.
There are told days.
Yeah, the business, Yeah, we always get Amanda Gotti your on Christmas, Chief investment officer at PNC Asset Management Group, joining us from Pennsylvania.
This is the.
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