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This is Bloomberg business Week 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 Stenebeck from Bloomberg Radio.
There's another interesting data point when it comes to US economic activity. We love this with more and a look at the broader macro backdrop, we head to Washington, DC. That's where we find Bloomberg News Global Economy reporter and a current and a good to have you here. We do want to get to that interesting data point. Tim,
and I've been talking about this a lot. First up though, the economic data today, the clues that we've got throughout this week, the retail sales data, which is what we're going to get into with you a little bit more, anything that we need to know about the bigger, broader kind of data set that we got this week.
Well, I think on the housing data that you mentioned there, it just reinforces the idea that the housing market continues to be broken. It's kind of stuck in this state of high interest rates, surging strong demand for houses but high interest rates and a low stock turnover, so it's kind of stuck in a root there, Carol. But more broadly, I think the mix of data this week it sends mixed signals, but the broad takeaways that the economy is continuing to slow at a reasonable pace, not a crash
landing or hard landing or anything like that. But I think every week we seem to get a new with data points suggesting things are coming off the ball a little bit the way policemakers want it. But the big question going to the second half of the year is how much slower will things get?
Okay, well, speaking of things getting slower, it's the Business Week newsletter that came out just yesterday, and we can't stop talking about it, enda because we talk a lot about different data points in the economic data that I think it's fair to say kind of rules our lives
here at Bloomberg in a good way. But there's also the anecdotal data that's really helpful that our reporters around the world go and gather talk a little bit about what convenience what one convenience store CEO is telling us about the state of the US economy.
Yeah, to your point, This was a bit of a step away from the raw numbers I interviewed. I spoke with the CEO of one of America's biggest convenience store operators, ARCO. Core Ary Cutler is the CEO there, so I had to chat with him, you know, for context. He runs what he calls stores in real American These are small towns, main street, sometimes in border areas, so he's on the front line of the trends. And what he's seeing among
his shoppers, his consumers, is that they're spending less. In particular, they're spending less on cigarettes and spending less on gasoline. Now that reflects he reckons, it reflects the high interest rates, the mix of inflation, and of course fluctuating gasoline prices. But it's you know, again, he's not saying this is a crash landing ground, but he's saying it's different to what it was last year. Consumers are coming to his stores are being a bit pickier, a bit schoosier. They
want bargains, they want value. He's seeing promotions for his hot and its pizzas enticing customers to go to that direction because they're watching their sense and their dollars. So you know, it's a tail from the ground. And when you speak to people like that, it kind of adds the idea that what the official data is telling us that things are cooling from that big boom last year. And this is what I was trying to say earlier on that things are cooling, okay, But the big question
is just where will it go from here? Will this glide path continue the second half a year, or will it be something bumpier. But people who seem to be people seem to be getting more careful with their money, that's for sure.
Yeah, And it feels like it mirrors so many of the conversations that we have around the newsroom or with colleagues or with friends and family about just you know, making choices about where they're purchasing or just still kind of cringing at some of the costs of different items. Having said that, it does feel like this momentum around sluggish slow down. You know, it's not like everything's falling off a cliff. And I don't hear a lot of people talking recession here in the US, No.
And that's because the job's market is so strong. And as long as long as the job's market is strong, people have money, they will pay back their mortgage and it will go and spend. Of course, it might be a bit more careful how to spend. But it's when you have unemployment and free fall when things change dramatically. But again, the labor market we see some cooling. Even the CEO I spoke to, he made the point that, you know, a year ago he was really struggling with
either filling positions and turnover. He still is struggling to fill positions, but he has noticed things are better than a year ago. Staff aren't walking out the door the way they were. They're hanging around, and he thinks that's a sign. That's a sign they have fewer options.
Yeah, that's a really interesting data point as well. I want to get back to this one comment that I had to read a few times and in your piece, it's that people are moving to more valuable items and just not spending the money they did in the past. What did he mean by more valuable items?
What he's talking with there is looking for value. He reckons. He's never seen his money promotions, he said, by the way, in his time, he's he's been in his business twenty years and you know, obviously he's running his own promotions, but the people that he buys products and goods off, they all want to promotion promotion as well, because everyone's
looking for a bargain. Remember the backstory, Household debt is at a record level, delinquencies and credit cards are picking up, so people are feeling some strain out there, and that's why he thinks it's all fulling into When you walk into a store, you're just not splashing the way you wore last year. You're being a bit more careful about it.
It's interesting to read your piece and also think about what we've seen from companies like Celsius Holdings in Monster Beverage. In recent weeks, there have been some channel checks by the folks over at Nielsen that said there's been some softness in that category. And if I think of something that's sold in convenience stores that is kind of pricey, it's energy drinks that you know have been so hot in recent years, and if people are pulling back on that end, that could be a signal.
Yeah, for sure. The products. By the way, one of the other products that are identified was cigarettes, and that's one of his biggest sources of revenue and sales in the convenience stores, but people are buying cheaper tobacco products rather than buying cigarettes. It's a clear trend that he's noticed, and he says, when you see that, that's when he knows things have changed, and that's why he's making the commons that he is.
I have to say, I'm not a smoker, but I didn't realize a carton is between like thirty to sixty bucks in the United States.
But it ends like where you live because the taxes are such a big part of it. Like New York City, they're extremely expensive.
They're crazy crazy.
I feel like this also though, and it kind of fits with what we've been talking about McDonald's, like bringing back the value meal. We're seeing kind of a little bit of a kind of price war, if you will, among some of the fast food restaurants real quickly though.
Twenty twenty five seconds.
The US economy versus the rest of the world still doing fairly well.
Still doing very well. Wages going up, people have jobs. The recovery has been so much stronger here than the rest of the world. No hard lending. But as I say, let's see how it all plays out in the second half. Of the year.
All Right, I love metrics like this great love it, love it, love it, and thank you so much. Have a great weekend and a current. He's our global economy reporter at Bloomberg News, joining us there from our Washington, DC bureau. I do feel like it's it's like when we get the Beige Book, right, anecdotes and so and so forth. I think these are things that tell you so much about what's going on in the economy.
Yeah, really really cool stuff. Also, it's the company has brands like one Stop, Admiral, Breadbox, corner Mark, Dixie Mart, easy Mark, Flash Market, Handymark, Jets, Jiffy Stopping more. Yeah, so they got their.
Hand on everything and they see a lot, right, and this this dude has been doing this for like twenty years. If he sees a lot, you might not call himself with the do I call him a dude?
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm. Easter Listen on Apple card Play and then Bright Auto with a Bloomberg Business at or watch us live on YouTube.
It is tripled by switching Friday. We love to say it a lot.
It feels a little spooky, isn't it.
I don't know, is it really you know what it's all about. Let me have derivatives, contracts tied to equities and deex.
Options and futures, all mature. Easy for you to say, yeah, okay.
So it's a reminder to you that we are almost halfway through the treating year, which is kind of a phenomenal a year when we constantly debate over when the FED may cut rates on as the FED reminds us constantly, we are data dependent.
We talk about it.
Nancy Tangler says, don't focus on that here with what we believe, or what she believes we should be keeping our eye on. Is the chief investment officer at Laffer Tangler Investments, Nancy Tangler back in our studio.
It is nice to have you back with us. How are you.
I'm well, thank you, thanks for having me.
Well, thanks for being here.
Because we do talk about we kind of as a joke, we'll be like, but we're data dependent.
You said, maybe don't be so focused on that.
Yeah. I think for me, Carol was when Christine Legard at the ECB came out and said we're raising our inflation estimate. We didn't hit our wage criteria, which was wages rolling over. They actually went up in the EU, and we're cutting interest rates. And then you follow that on the heels with Chairman Powell, and maybe I was over listening, but you know, he said a few things. I mean, previous meeting. He was like, well, we'll react to weak labor, and I do think the labor market
is softening. And then on top of that, he said, well, you know, if you're at two point six or two point seven percent, that's a pretty good place to be. That's a direct quote. And so I'm wondering if the FED is kind of preparing at least themselves, if not the market, and they raise their inflation estimates for the year, and we're going to get a cut, and we're going to get a cut.
We were all talking about that.
Mike mckaie was talking about it, like what changes FED share j Powell at the end of the year. You know, if you think it's going to be okay, time to cut. And yet we're pretty much in the same economic scenario right, Yes, absolutely, And.
I think one of the reasons that they are eager to cut. Do you have the treasury funding this massive
amount of debt. Now it's over fifty percent at the short end of the curve, and so the weighted average cost of the debt has gone from one point eight percent last January, not this one the previous year, to over three like three point three percent, And the net payments this year are going to be eight hundred and seventy billion according to CBO, which is always wrong, So count that as one trillion in just in trist payments. Something's got to change.
You don't actually hear politicians talking about that right now. Interestingly enough, it's like a sort of a lonely chorus of folks who are talking about the risk that exists there. How big of a risk do you think that is?
I think it's significant because if you're you know, the CBO quotes debt as net debt, so they say we're at eighty percent of GDP, but they don't count the debt on the Fed's balance sheet, so we're really at one hundred and thirty And that's third world country issue. In the growing economy with a really tight labor market, we should be reducing the deficit, not exploding it. And so stocks don't care yet so we're still pretty bullet bullish.
Yeah, when will they care? I don't know what will make them pay?
What's the hissy fit that happens in stocks as a result.
Well, you keep hearing the will it be a Liz Trust moment. I do think that's a risk that the markets do. The bond vigilantes just come in and say enough, and then there's all even more volatility. I mean, I've been doing this for forty years. I've never seen see so much volatility in the bond market.
I will say, it's really interesting.
I do feel like investment professionals like yourself are talking.
A lot about it.
And at some point, you know, the government has just so much money to play with, and so where do they cut back? And then how does that impact the economy. I feel like that's when maybe citizens start to sit up and take notice.
Perhaps I think they're starting to, because what I think the average person knows is that all of this fiscal spending has driven inflation. And you know, there's only as critical as I've been of the Fed, there's only so much they can do. I mean, they've got one hand tied behind their back because the spending just continues and you know, we still have a lot of appropriated but unspent funds, you know, in the trillions of dollars that the administration is going to try to get as much
of that spent this year as they can. I don't know how much that will be.
You've been critical of the FED, but one thing that we've heard from fedher J. Powell several times in recent months has been talking about the Fed's independence and his own independence. And there have been some questions about what happens if President Trump wins in November to the independence of the FED. How are you thinking about that? So?
I know, I think he doth protests too much. I think he waited a long time to raise rates, and I was at a dinner with.
I think JAYE. Powell protests too much or try.
About his independence, because I don't think he acted very independent. I think it was a pretty political move to hold off on raising rates as long as he did, and that really allowed inflation to get out of control. Was at dinner with a prominent senator and he basically said we all know that he was waiting, and I've never heard anybody say that out loud. So I think they should be independent. I don't think there's anything Trump can do if he is elected except go on X and beerate him.
Right, Well, I do want to point out that maybe perhaps if J. Powell were sitting here right now, he would push back and say, oh, well, you know, at that point, we thought that inflation was indeed transitory, it was supply train given. We didn't think it would becomes entrenched as it did in American in the American economy at that point.
But yes, he would say that, and I would say, you were still way too late. You know, the rest of the world saw it, and they waited way too long. And you know, we didn't see a hike until March, when inflation had been really bubbling up pretty dramatically since previous year, and we were writing about the fiscal spending. Back then, it was very lonely. But back in twenty twenty one.
Yeah.
The other thing, like, I think it's also fair, right, there's been so much liquidity thrown into global markets right because of the pandemic, and we're still kind of figuring out how it all plays out right and keeping up with it, right, And that's what we're talking about.
There's still a lot more liquidity out there yeah.
And it's interesting because if you just think about all the old rules, like what did everyone think when rates went up? They thought it would hurt technology stocks. They've been the biggest beneficiary because they had fortress balance sheets. They'd already refinance their debt and they've their interest income. No, it's exploded, and so they're making money on all that money that's right on their balance a lot of money.
Care.
Yeah, exactly, all right.
Having said that, the thing you say we should though, is listen to companies have to say, we get I get excited about earnings because I do feel like I feel like it's a gut check.
We get, we love it.
We peel back a little bit of the layer, right.
We hear from companies about how things really are and whether the narrative, the valuations, whether or not they make sense.
So that's important.
Yes, we've got a great chart, I think if we can bring it up, but it just talks about, you know, what we've seen in terms of earnings expectations blended forward EPs, which is the blue line and the orange line is the S and P five hundred. You can see how they've been tracking really well together. But the outlook for earnings continues to rise. That's important that what we see and what we hear from companies.
Yeah, it's it's it's everything. I mean, that is ultimately what stocks trade off of. That's why I you know, I think you ignore at this point what the FED is saying, what data they're depending on this next meeting, because the trend line in corporate earnings is positive and margins are expanding. Now not every company. We saw it last quarter. If you missed on any metric, you got clobbered.
But if you just look generally speaking, like our twelve Best Ideas portfolio, we had a number of what Bespoke calls triple plays, beat, beat, and raise, and that that's sustainable. It's it's frequently in you know, the area that we've been talking about at nauseum, which is gendered a cloud computing, but but also in our investing theme of old economy companies that are embracing those technologies. Think Walmart, I think Chipotle,
which is one of our twelve Best Ideas. Those are companies that are benefited from utilizing digitization and all of these technologies.
Auto Kado anyone ado. It's a machine that takes care of the avocados for guacamali a Chipotle.
Because they're all fresh and.
Such time and takes so much time to make guacamal avocado.
Yeah, Brian Nicchol tells us about it all the time, and.
The pretty polt lanes and yeah, they've got their own language.
They absolutely do. Nancy, thanks so much, Have a good trip, Hoeman, a good weekend.
Thanks Nancy Tangler, chief investment Officer at Laffar Tanglar Investments.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car 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.
A mob.
What a louis saying?
How much love?
Here's some somebody's had a lot of babies?
Yeah we do.
Here's the numbers you need to know about Elon musk six. It's the number of companies that Elon runs, two hundred and six. Then I remember of billions of dollars Elon is worth, according to the latest calculation by the Bloomberg Billionaires Index and twelve. It's the number of kids Elon has, at least that we know of.
No question, Elon is doing what he can to contribute to the world's population, which makes sense if you've paid attention to what he's said in recent years. In Musk's mind, global fertility rates are not just a crisis but the crisis. And someone who has paid a lot of attention to what Elon says about this is our own Dana Hall.
Yeah, she, along with Sophie Alexander, right about how Elon wants you to have more babies. That's in the forthcoming issue of Bloomberg BusinessWeek. Read the story now though on the Bloomberg terminal at Bloomberg dot com slash BusinessWeek. Dana Hall is Bloomberg News senior technology reporter. She joins us from our San Francisco bureau. Danny, you and Sophy make the point in your piece that despite Elon's alarmism, the world's population is not declining yet. Musk is correct that
the overall rate of growth is slowing. Why is Elon so concerned about us not having enough babies?
Well, to be clear, Elon did not comment for this story, so, but I think that I mean He's been sort of ringing the alarm bell about this for quite some time. If you look at his tweets, at all of his public appearances at the Milkene conference last month, you know,
he really sees this as a big crisis. And I think it has a lot to do with the changing demography of the United States and frankly, his like interest in colonizing Mars, and and you know, he's looking at trends and his own goals, and you know, he really is encouraging people to have at least three children. But I think that the sort of deeper thing here is that he's not just tweeting about this on x the
platform that he owns. He's really putting money behind it and he so so there's really like sort of an influence campaign going on here.
Well, if I would say, as a recent father, if he wants people to have more kids, he should talk to the folks in Washington about child care costs and the difficulty in raising kids.
Says the father of two young kids.
I'm serious, though, I mean, if if he wants people to have at least three, there's a reason why people don't have as many kids as they used to.
It's expensive.
It's very expensive. I know, Dan, and that's not what you know we're here to talk about.
But Peel, I mean totally, I totally agree. I have one child and I live in the Bay Area, and it's incredibly expensive. And you know, there are a lot of reasons why the fertility rate has fallen. Women are having children later in life. It is incredibly expensive. We don't have the nuclear families we used to. People are thinking about things like just the cost of childcare and the cost of college, and the cost of just living
and the cost of housing. And there's a lot of reasons why in a lot of industrialized countries, not just the United States, but in Scandinavia and Japan and South Korea and elsewhere, that the fertility rate has fallen. But you know, there's a lot of policy levers that you
can push if you want to encourage families. And you know, instead, Elon has quietly donated ten million dollars to the University of Texas at Austin, his largest donation to higher education to date, and he's also funding a documentary film that will feature like the professor that he's funding. And so it's just super curious to me how on the one hand, you know, Elon is very public about his intentions, and yet seeing him get involved in academia this way is sort of a new realm for him.
That's what I wanted to ask you, Dana, I was listening to you. You know, is Elon mostly talking his book here, you know, about wanting to you know, develop Mars and all that good stuff. What do the academics say when it comes to what's going on with fertility rates and perhaps populations more broadly, what does academia who study this actually say about what the problem is or lack thereof.
Yeah, so the field of demography is a super fascinating one, and my colleague Sophia Alexander really did a heroic job like talking to all the experts here, and they are very worried that Musk and his megaphone and his money are kind of now influencing the debate, if you will, within the field about just how serious this crisis is.
I mean, you know, there are simultaneously we're seeing a lot of talk about no fault divorce and abortion rights, and we're seeing like women's reproductive freedom being scaled back in state after state. And if you so there's just a lot of history here that is that is very concerning for people that have been in the field for a long time.
I think one important part of the conversation, at least here in the US that Carol and I have talked about Dana is even though Americans are not having as many kids as they used to, a lot of the jobs that were are that need to be filled, are being filled by immigrants right now. And that's really important when you talk about the economic context here in terms of population growth and aging population and who's actually doing jobs?
Oh absolutely, I mean, who is growing the food in the United States, who is working in our meat packing facilities, who is taking care of your elderly parent. I mean, so when you talk about declining birth rates and fertility rates, you have to if you look at the world population as a whole, to be clear, like we are still we are still seeing population growth. You know, there are
different projections, and projections are often wrong. I mean, you know, we know that people have fewer children during the recession. So what's actually happening now is that there were fewer babies born in like two thousand and seven, two thousand and eight, two thousand and nine when we were in the depths of the last recession in the United States. Now all those kids are about to graduate from high school and you're seeing like a drop off in college enrollment.
So I mean, there are definitely real world impacts to population changes. But when you include immigration and you include the world as a whole and not just the West, you know we are still on track to be growing people. That is a fact. And so it's just very interesting to sort of look at how, you know, this kind of fringe movement called natalism has increasingly entered the mainstream.
Dana does the world at large? Does the Bloomberg audience kind of need to keep the head of PWI Dean Spears.
The Population Well Being Initiative exactly?
Do they need to keep him on their radar?
Yes, he's coming out with a book in the Fall by Simon and Schuster, six figure advance. I mean, it's called After the Spike. It's kind of you know, it'll be like a mainstream book kind of espousing. I think a lot of what is in aligne with with musks thinking that we need to really be paying attention to fertility trends. And I think it's just important you know too. You know, billionaires have a lot of ways to spend their money. Musk has a foundation, you know, his foundation
is now donating to academia. I think that that's really significant and something that investors and customers and people in general should be watching.
And it also said that one of his right is researchers are going to be joining I think President Biden's counsel of Economic Advisors.
Right, So yeah, it's kind of spreading out.
Ye, not saying it's bad.
I'm not making a judgment, but I'm just saying right, Yeah.
But Danna, this is also a story about Elon's businesses, because he has had kids with people at his ut at least one of his companies in the past. So we should note that even though we're talking about what could be his personal views that he's increasingly talking about on on X and on on Spotify. I was gonna say Spotify, but on podcasts doesn't own that yet. He doesn't on that yet. On on podcasts, he's this, this is coming out and is in the work that he does too.
Yeah, I mean, and there are a lot of you know, I mean, to be clear, these are consenting adults, but like one of them is currently like his employee. I mean, she's an executive at Neuralink, and so, uh, you know, obviously a couple of years ago, Business Insider broke the news that Musk and chevon chevon Zillis, the executive at Neuralink, had twins together. In our story today, like they also had they had they had another another child that was
previously unreported. So this is definitely like a pattern of his. You know, it's it's it's it's kind of amazing. I mean, it's just sort of unheard of, uh that you would have that going on, I think in most quarters. But it's it's a pattern that's been established and it seems to be continuing.
Well, it's an incredible story, and I think a really smart one and just kind of getting into it and explaining it and doing the research and giving us the facts when it comes to fertility and what's going on.
Gloss also its Carol reminded me some incredible animations on the terminal.
That actually made me kind of loud. Check it out, everyone, Dana, have a great weekend. Bloomberg News Senior Tech reporter, Dana.
Hall, 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 Android Auto with a Bloomberg Business app, or watch US live on YouTube.
A dealership in Phoenix's handwriting paper contracts engaging credit worthiness using guesswork.
Carol, Wait, what is this the nineteen fifteen.
Yeah geep owner in Alabama keeps calling about when a replacement part will be in stock. A family in New Jersey is waiting for word on when they can take delivery of their new Audi.
Yeah.
Such as life for auto retailers and their customers across the United States and Canada. This after CDK Global we talked about this this week. It's a software provider to some fifteen thousand dealers was waylaid by debilitating cyber attacks the barrage beginning June nineteenth, costing US dealers a burst business on a federal holiday. CDK has warned that a second incident yesterday likely to keep its systems down for
several more days. I mean, this is pretty serious. This is kind of like putting it, like just stopping it.
Yeah.
Keith Aughton over in Detroit on our program yesterday, called this program the spine of the automotive industry, how they do it, so to understand how something like this can happen in this day and age. We're joined by Wendy Whitmore, Senior VPN head of Unit forty two at the publicly traded cybersecurity from Palo Alto Networks. Wendy, before we get to the most recent and prominent hack that we were just talking about, explain what exactly goes on it. You
need forty two at Palo Alto Networks. It's described as your team as a special forces unit at the company. What are you guys up to there?
That's accurate.
So we're really the eyes and ears and the feed on the ground bringing to life the work that Palo Alta Networks does as a whole right, which is providing solutions for our clients in their most troubling times.
And so our.
Team do you respond to attacks?
Ironically, some problems, not a cyber attack. Cyber attack, I think with Wendy's Wendy's connection, they're going to get it fixed. Over there, we're talking to Wendy Whitmore, Senior VPN head of Unit forty two over at Palo Outdome Networks. I got to tell you. But a good reminder that are the infrastructure that so much of this economy relies on is so fragile.
Yeah, it doesn't take much. We've seen it, you know, over the years, hospital systems. You know, we talked about ransomware for a long time and that's certainly an issue. But the cyber attacks and what it can do for an industry. I mean, this is a one point two trillion dollar industry. That was the sales last year, and you know this is when it's at the end of a quarter. There's a sales push. There's a lot of stuff going out. We've talked about how we're almost halfway
through in terms of the trading year. But for companies often they're looking at the end of quarter and that is certainly something right, you know it from an auto dealer when they're looking to do dealer. So this is an important time and you wonder what it means, what impact it has.
Holiday is big for going and chopping for a new car.
Absolutely, yeah, I've done it.
Yeah, people are off, the stores are open, get the family together, go and look at that new minivan, right, make sure everybody fits in there. Go to sign the paper work. Oh sorry, the paperwork's not working because of this hack, Like it just slows things down.
And then do you like kind of maybe think, well, maybe I don't want to do this right now, or maybe I'm going to wait for a better offer. Representatives for Ford, VW, Mercedes, Benz, and BMW all confirm some of their dealers U s DK and said they're working with those affected by the disruption. Other car companies didn't immediately respond to requests for comments, So we've been reaching out to get an ideal of kind of the size and scope of this impact.
Okay, let's go back to Wendy Whitmore over at Palelto Network, senior VP and head of Unit forty two. Wendy, you were explaining what Unit forty two does. I do want to get an idea from you about how companies and industries really can stay safe when critical infrastructs sure such as this can be taken down by a hack.
Yeah.
So, I think the reality is attacks like these and the recent attacks we've seen throughout the globe really underscore how interconnected all the systems are, and so in order to be more prepared for these type of attacks, the work we do proactively to help organizations test their defenses and advance to be able to have holistic and comprehensive detections. At the endpoint, the cloud, the network is critically important,
and more so now than ever. We're also leading into a year where we've got Olympics, we've got major US elections, and we're anticipating that attackers are really observing the playbooks and seeing what works and are going to continue to try to disrupt more and more businesses.
Wendy, we always talk about, you know, when it comes to cybersecurity, it's like a little bit of a whack them mole, and so I'm just curious how you guys are thinking about it.
How do you stay ahead? Are we ever really going to be ahead?
Because as soon as companies like yourselves you figure stuff out, you know, those who are doing cybersecurity attacks, they figure out a different method.
Well, you know, it's like the old you know question of why do robbers attack banks? Right, And it's because that's where the money is, and so unfortunately or fortunately today, the data is where the money is. So that said,
I take a pretty optimistic view. I've seen our defenses continue to increase, and I think with AI even though there are challenges that the attackers are leveraging, the reality is that businesses have a tremendous amount of opportunity to leverage AI as a defense mechanism, to accelerate processes that previously were manual, and to really be able to identify these attacks in real time, which is the key to limiting their impact.
Hey, Wendy, you know, we've talked a lot in recent weeks about the shift in spending in the C suite this year as we've seen some of the SaaS companies fall out of fashion and their shares fall this year as a result of companies saying, okay, well, you know, we've been spending for years on the cloud, for years
in cybersecurity, and for years on sas. We want to start getting into AI, we want to start getting into the hardware side of things, and they're shifting that spending to the hardware, to servers, to chips, and look, we've seen that play out with shares rise of companies that are in that space. How concerned are you that companies are taking their eye off the ball with the shift and spending.
You know, I think it's a great question, but not concerned.
And the reason I say that is because the reality is, especially when we look at current attacks right, what we're seeing is by and large, cyber criminal actors who have invested pretty closely and significantly in understanding how business to business transactions and relationships work and realizing that if they disrupt those components, in some cases, it's actually much more disruptive to organizations than just destroying consumer confidence in them.
So as a result, the businesses across the globe are also understanding, they're observing that, and they're certainly investing in mechanisms to make sure that we continue to secure those trans actions so they can continue to go on about their operations.
Wendy, where do you guys see is the most vulnerable.
In terms of an industry or a technology.
I am kind of interested in industries, like I'm thinking about the Bloomberg audience, right, Obviously, you know, an investing audience in a big way. But obviously investments go to all different types of industries, So.
I'm curious where you see.
I think we all talk about kind of as a joke, but not really as a joke, that the financial community, you know, we are so nervous that you know, something kind of really big happens in that regard. But I do wonder where you think what industries are the most vulnerable here.
We actually saw something with lending Tree. We talked about it last night.
Yeah, that's right, right, So we continue to see from a targeting perspective, financial services, manufacturing, and then government actually on the rise. And so manufacturing and financial services have long been in the crosshairs of these type of attackers.
But what you're seeing from a recent healthcare, hospitality or manufacturing component, is it any industry that relies on these business to business transactions where they have a vendor and a supplier network related to being able to do their business. If attackers can disrupt that chain, then what they're thinking is that these organizations are more likely than to pay a ransom. And so I think that reality is that means every industry is pretty vulnerable right now.
The more that we can prepare in.
Advance for these type of attack scenarios, obviously close as many of these open windows as possible in advance of an attack is really critical key and there are organizations that are doing that on a daily basis that you're not hearing about in the news.
Interesting. Okay, So I'd always like to end conversations when I talk to folks like you.
About an upbeat note.
Yeah, well truly, like you know, you see the dangers that are lurking out there each and every day. On a company level, what are you doing to protect yourself online? And like, what's one thing you can leave us with?
Yes, I think as an individual consumer, everyone has heard do not have the same password in every account.
That has never been more true.
Use multi factor authentication and pass keys as much as possible to protect your critical information. Make it make yourself a much harder victim to compromise than people around you, and that is certainly a good piece of advice for your individual protection.
Amen, a multi factor I like that a lot and I'm you know when they're like, can we suggest you know that you know, and it's like the different letters different Yeah, go for it. Yeah yeah, oh yeah, I hate it.
And it's really hard when you're sharing, like you know, streaming service.
I would know what you're talking about.
I have no ideas the innocent tim stead of it. Yeah, Wendy, thank you so much of a great week. And Wendy went More, Senior VP, head of Unit forty two over at Palo Alto Network.
Do you have any streaming services that I don't subscribe to that I can get the password?
No, I have enough people on it, but denty it act.
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