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Okay, so maybe not quite yet the time to crack open the perier, Joe, if I may.
Say, really good pronunciation of that.
I had to google it.
Okay, why not. Mike mckey's here, We could do, we could do. It's a weep day.
Let's talk about the report underline, Well, we'll talk about me with the price of Champa. Let's just bring Mike in because let's get to the report and what we got. It is the report Mike, we have been talking about for a while. Here, we know this is the one that the FED watches. Tell us what we got and why there was a bit of sigh of relief here.
Well, the sigh of relief was it wasn't worse. The numbers came in on a month over month basis higher than they had in previous months. The core rate was up on a month over month basis, four tenths, which was the highest in a year, and it sounds terrible, but because of base effects and in the progress they've made on disinfilation on the year over year basis, we continued to see the PCE and the CORE go down, and that's what people want to see, because that's what
the FED wants to see. We're still a ways from two percent if you're using CORE as sort of your measuring stick, at two point eight percent, but there was progress and the economy is not doing badly. People what personal income went up one percent and wages still went up four tenths of a percent, which is healthy. Spending was a little weak, but remember there was a lot of storms in January. People didn't go out. We know
they didn't buy cars and things like that. So overall, this is the Goldilocks soft landing story continues.
So break up Champagne.
In other words, I.
Knew you'd get around to that.
It's only it's only two o'clock.
Yes, yes, yes, go right ahead.
So Mike remind us why this is the Fed's preferred measure of inflation. Why do we care so much about PCE and over CPI.
For well, basically, the PCE is a bit broader, but it also is a little bit more reflective of what
people are spending on. It includes a lot of imputed data, which is data that they try to figure out by measuring parts of the economy rather than just prices, because they don't have prices on things like financial portfolio management was one of the biggest movers, up five percent of the month because the markets are doing so well, right, so they're looking at the markets, and they're looking at the gain in the markets, and they're guessing sort of
what the commissions would be et cetera, and the fees, and they impute a number from that, but that's not counted in the CPI. And for example, the CPI will measure what you pay for your monthly car insurance, whereas the PCU will measure what you pay and it also measures what value you get, in other words, how much will your policy pay if you're in an accident, And of course that has to keep likely going up because
cars keep getting more expensive. So that's the kind of thing that's the difference between them, and so the FED just prefers it. They normally don't run very far apart, but they have been running far apart over the last year.
Well, as an economist, I mean, what do you trust as really kind of telling the true picture of inflation? Because I do feel like there's a bit of a debate when it comes to some of the economic statistics that are out there about whether they not, you know, accurately reflect what's going on in the US economy. How do you see it? Because I feel like, Mike, you're so good at kind of pulling in yes, government statistics, real words, real world statistics. I don't know, how do you see it?
They actually had this debate on the podcast with Tracy Alloway and Joe Eisenthal today, and the experts they were talking to basically came down I think about where I would come down, that there are so many different measures and even though there's a wedge between the PCE and CPI, it's about one hundred basis points now, it's normally somewhere between thirty five and fifty, so it's not very wide. And really we can't say, given all the different measures,
exactly what inflation is. So the CPI has the most categories, it's the most up to date the PPI and the CPI feed into PCE, so PCE depends on CPI, So I guess I would go with the CPI. That doesn't mean I think that the three point nine percent is where we should be. There's a lot of talk of the FED maybe changing its inflation target to maybe three percent or something like that, but overall maybe this CPI, you know, that's just talk.
The Fed has denied that they're going to do that many many times over the last year.
Well, they're denying it now because if you do it now when you have you're moving the equation, you're moving the goalposts.
Right.
They do now have a procedure so that every five years they look at their monetary policy framework, and that's coming up in twenty twenty five.
So do you think that given what we've had we've seen over the last eighteen months with the data MIC, that they would consider actually changing it when there is a time.
To do that.
I think they would. Two percent was never a number written in stone. It was what the New Zealand Central Bank adopted number of years ago and it sort of became a de facto standard. And the idea was basically, what's not too high and not too low because if you're too low number you have no way to lower rates if you're at zero, and if you're too high then people get mad because you have inflation. So they
picked two percent. They could easily pick three percent, and people have been urging that on them for years, so it's something I'm sure they'll talk about, all right.
So the data this week we all were kind of leading up, I feel like in a big way to this Thursday report of pc core and the read on inflation that the Fed follows the narrative if you put it all together, including some of the other data points that we got today, is there one clear narrative or a bit of a mixed narrative.
It's a mostly clear narrative that the economy is doing well. Interesting number we haven't mentioned and didn't get a lot of attention today because of the PCEE was pending home sales really tanked in the last month, and that's maybe a sign that we're seeing the higher mortgage rates bite, which is despite Elizabeth Warren's desires, that's what the FED wants to see. So we seem to be doing and
getting what the Fed is looking for. Next week, we'll see jobs, and if the job's numbers hold in, it'll tell you that the other side of their mandate is doing well, and that's the feeling that they will hold in. So at this point, you know, we get volatility.
Powell was right saying, Hey, the economy's good.
J Powell was reasonably right. I don't know if you saw the Wall Street Journal story today about whether Chris Waller or Larry Summers was right, and Nick Timmers from the Wall Street Journal comes down on Chris Waller's side that we didn't have to have six percent unemployment.
So it's interesting to hear that we did speak to someone yesterday who said that we've already had a soft landing. Chris Allman over at CalPERS A cal stars. Excuse me? Are we going to start seeing more of that?
Mike?
Are people going to finally say, okay, we can declare that this landing has happened and has indeed been a soft one.
Yeah, it's kind of a at what point do you consider the economy landed? There have been people who say we've been on the runway for a while, and others say, well, you know, it's never quite there. So it'll be a couple of months probably when the Fed starts cutting rates. If we get to that point. That would suggest that we're still making a lot of progress towards sustainable low inflation, and you could call that a soft landing. Other people will look back in history and say, well, this has
been a soft landing. If it's done a pretty good heals like it. They'll never say it.
Goldilock says, it's.
Yeah, it's like jinxing yourself. But they'll they will feel it. All right.
We're going to say thanks to Michael McKey Bloomberg News International Economics and Policy Cours.
But 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 brout Auto with a Bloomberg Business app, or watch us live on YouTube.
Got to talk a little b about WW International shares dropping, falling earnings last night and news at Oprah Winfrey said she's preparing to leave its board. We've been talking about it all day here at Bloomberg. Stock down nearly twenty seven percent of its low's today lowest points since they began trading back in one two thousand and one. And you might recall that back in twenty fifteen that's when Oprah signed on bought a ten percent stake in the company.
That news and move revived the stock for a while, and the narrative tim around the company.
Well, narrative changing again today and news of Oprah's departure delivering the latest blow to the obesity focused company that's struggling to stay relevant in the ozempic era. We got a great roundtable joining us to discuss the news in the environment that WW exists in Bloomberg News. Reporter Jerry Smith is with us right now in Bloomberger News health reporter Madison Mueller both here in the studio. Good to
have you both with us. Hey, Jerry, I want to start with you because we did see the stock WW stock drop last night following quarterly results and the news that Oprah was leaving the board. What's bigger here is the results or is it Oprah no longer being on the board Here.
I mean, I think Oprah deciding that she's not going to run for reelection on the board is a big deal. I can't think of many celebrity brand relationships that are more iconic than her relationship with WA Watchers. So for her to no longer be on the board. I think investors saw that as you know, potential concern.
To be fair, and we're going to bring up the chart again for everybody. We just showed it. I mean the chart of WW shares what they have done since Oprah came on board, and you could see that uptick that was shortly after she came on board, hitting a high, and then it's just been kind of a tougher slog if you will, since then. Madison Kman in on here. You know, we've talked with you two about WW. I mean, you know, they've got a new strategy moving forward right right.
And I think that this is sort of in a time when they are trying to make their brand appear to be relevant still and really get people, you know, signed onto the idea that Weight Watchers is still needed, that it's relevant. Like Oprah leaving at this time is just not a good It's not good for the image when they're already struggling with their image. It's sort of a dumb away, I mean, kind of crazy.
She's doing exactly right, Jerry, with what the company's trying to do. They're saying, we're going to embrace these new weight loss drugs. That's what she has done too.
Yeah, I mean, I think the company itself, it's been fascinating, how you know, It's a fundamental shift in how we think about weight loss. And this was a company that really emphasized for years you could lose weight if you just eat right and you have enough real power. Yeah, and now I mean their arrival of a zepic and all these weight loss drugs has really forced this company to recalculate.
But it doesn't. It just makes me like, I'm trying to understand that this is what Oprah's doing. So you would think it would almost make more sense for her to stay because she's used these drugs, gets what the company is doing in kind of this latest brand ship.
Perhaps that's why investors are concerned if she's not sticking with it. Maybe there's a difference in strategy or something that you know, remains to be seen at this point, not saying that's happening, but yeah, you know, and that could be one of the reasons why the stock is reacting that way. So Madison, talk a little bit about the shift that we're seeing at WW right now, because, as Carol mentioned, this is a company known for counting
well counting points. I should say that the meetings, the in person stuff, the line of food. How have the GLP ones disrupted that?
Yeah?
So I mean weight Watchers acquired Sequence, which is a telehealth provider, last year, and so what they're trying to do is bring this old or you know, the historic weight Watchers brand to GLP one prescribing and sort of combine them and say, you know, you're still going to
have this community. You're still going to get support, behavioral support, you know, medication management things like that, and have that sort of along with the drug and you know, have a provider who can help you manage the medications and everything.
And so that's sort of been their rebrand, and I guess I mean it sort of shows like Oprah is she said that she's taking one of these drugs now and so she, I mean, her departure from weight Watchers sort of like proves again that she herself baby doesn't need those services. I don't know if she said, like whether or not she's actually using their product, but a lot of the page that I've spoken to that are taking GLP on drugs are like, we don't feel like
we would need something like this. We have that community sort of on social media. We have doctors that can help us manage the side effects or help us manage, you know, the medications in general, so we don't really see the need for something like what Weight Watchers is offering, which is this sort of behavioral support program in tandem with prescribing GLP one drugs.
I mean, it's a great question, Jerry. You do wonder like, what does ww become going forward when the community aspect of this and the platform to support you in your goal of losing weight, if that goes away? Are they just a distributor of drugs basically, right, of these weight loss drugs, Like what do they become?
Yeah, I mean I think that's that's the big question is how does this company stay relevant right now? You know, I mean there's analysts who think this market for OBC drugs is going to be huge, and but you know not, They're not for every bud. And you know, there's people you take these drugs, but you have to keep taking them over and over, and maybe there's a role for Weight Watchers in the future and just supporting these people who you know, maybe they don't want to take it
for their entire life. But yeah, I mean, that's something this company is really struggling to figure out.
To Jerry's point, Madison, do you think that it's fair to say some critics could argue that investors are kind of putting the cart before the horse here because we don't know. Carroll, When I say we don't know, you always point out that these drugs have been around for other uses for quite a bit of time.
Diabetics have been using right to be fair, but.
We don't necessarily know when they're yearsed purely for weight loss, not long term effects, but sort of long term trends. What needs to be done other support systems that people need, right.
I mean, that's very true. It's a good point that Jerry brought up, because there's a lot of issues with like long term durability with these drugs right now. One, because they're very expensive, not all insurance companies cover them, so some people can't afford them, and then they're forced to go off of the drugs. There's still really widespread supply shortages, which a lot of the doctors I've spoken to have said that that continues to be an issue.
It's not something that has really gotten any better, and so they're having to take patients off of the drugs and then you know, these are drugs that are meant to be taken forever, so what happens after that? So like there could still be a place for weight watchers. Maybe there maybe that's their sweet spot. But there are so many telehealth companies that are cropping up now to one prescribe weight loss drugs to help with you know what happens after you go off of weight loss drugs,
offering different types of nutrition therapy, things like that. Like, this industry has just gotten more competitive, so they're just going to have more people to face off with.
Well and Jerry, maybe that played out in terms of the twenty twenty twenty twenty four revenue forecasts, right, because that was a disappointment from WW.
Yeah, they are twenty twenty four forecast for sales came in lower than what Wall Street was expecting. So I think it was probably a combination of Oprah's decision to leave the board and the lighter revenue forecast that investors were concerned about. I just think big picture this is it's very hard to be in this business on Wall Street where we're seeing these companies. Just the other day at Biotech company said that you know, they had good data on an OBC drug in their stock at don't.
That's Viking Therapeutic.
Yeah.
Right, So it's just like you, we're seeing these enormous swings in share prices based on you know, are you going to be relevant in the weight loss drug era? Are you not going to be relevant? So I think it's tough for weight watchers when you know, an announcement where Oprah puts out a press release saying she's not gonna join, you know, be on the board, and then the stock just gets you know, hammered.
Madison go to Viking though, because and I'm glad you brought that up, because it does feel like every week or something, we're looking at a different company. What do we know about that company and kind of their potential role in all of this?
Yeah, I mean we were looking at that company the other day. I think there's something like thirty seven employees. It's really small, and this is phase two data that we're talking about, so it still is a long way before it actually gets to there are a b CD drug.
Yes, yes, But Madison, does it raise the question that the moat that a company like Eli Lilly and that Novo nord Disc would have is not as deep of a moat, given that there is progress being made by these other companies.
Yeah, I mean there's progress being made by these other companies, and those are sort of making them a possible acquisition target for drug makers that don't have a presence in
weight loss yet Eli, Lilly and Novo Nordisk. I mean, from the conversations I've had with them, like their pipelines run very deep, and they are looking at every single thing, like they have really early stage you know, discovery programs, and they're looking at every single thing that these other companies, or they say they are that these other smaller biotech
companies are looking at. But companies like Merk, like Bristol Myers Pfizer, who sort of need to get into this giant market still they could, you know, buy one of these smaller companies.
Biking, by the way, now an eight point six billion dollar market company, but on Tuesday was up like one hundred and twenty one percent on this news. Well, last thought, Jerry uh Oprah still is going to kind of be involved though with the company. She's gonna help them, I guess with the conference and stuff. So she's kind of still around.
Yeah, she said that she's still gonna, you know, continue to collaborate with weight watchers, you know, and address issues like the stigma of obesity. I mean, as we were talking, I was just thinking like how interesting it would be if Oprah you know, got involved with like Eli Lilly or Novo. I would think those two companies are probably reaching out to her people. I mean it's you know, that would be a very interesting development.
And you know what, they have lots of money.
That's true.
It's a good point.
That's actually a really interesting point. Great stuff, and this is certainly something that's very topical again for a second year in terms of uh, these weight loss drugs. Guys, Thank you so much, really appreciated. Jerry Smith for porter of Bloomberg News here in studio with us along with Madison Muller, whose health report at Bloomberg News but shairs of WW really taking tim in today's session.
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 ad. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa playing Bloomberg eleven thirty.
Okay, Carol, we've talked about this before. Just how much value did Taylor Swift bring to the NFL and to the Chiefs well. According to the brand analytics firm Apex Marketing Group, the tie up between Travis Kelcey and Swift is worth three hundred and thirty one point five million dollars to the NFL and to the Chiefs. These figures courtesy of The Wall Street Journal earlier this month.
That's some real money, all right. The reason fandom the people like my like my sister, like your sister, right, like my daughter. Well maybe I don't know if she started watching, but we certainly talked about it a lot.
This year.
They started watching every Kansas City Chiefs game and even got a Swift jersey. Your sister someone who actually she's.
Like right, it was really annoying. She's like we're all together once. She's like, I have to watch the game. Since when do you watch the game?
Like, did you guys see that plan? So you guys see Taylor like cheers?
All right?
Well, the concept of fandom is what got our next guest to look into how it feeds into consumer sentiment. We got with us Katie Thomas back with us, lead at the Carneie Consumer Institute, jeting us on Zoom from Pittsburgh, Pennsylvania. Katie, great to have you back with us. I do feel like man Taylor makes us the effect that she has had on our world in so many different ways. Talked us about fandom and what you guys looked at do specifically.
Well exactly, I mean, thanks, It's great to be back with you guys. That's exactly what motivated is was all this, you know, it was sort of two fandoms clashing together, right, Taylor Swift and the NFL. But we also have a podcast called Inside the Mind where we were talking to super fans. We had fans of sports teams that were you know, Manchester United, that were just so committed and they invest a lot of time and money into their fandom.
And we realize as we dug into it further though, it's particularly topical in the US right now and all around the world because we're so polarized that fantom used to be generally a good thing or something maybe you'd
have a bit of fun with. You'd have a rival or a product that you hated on in a fun way, but it's really now that we're so polarized, it can actually be a challenge of finding that sweet spot of you know, really being an enthusiast of a brand, but not tipping over that edge into if you're not with me,
you're against me. And that's what really motivated us to dig into fandom and understand a little bit more how it relates to some of the big challenges we're seeing today, such as brand risk, brand loyalty, and even how to build and cultivate community.
Yeah, so talk about that a little bit, because there's certainly this double edged sword, as you mentioned in your research about when it comes to fandom, and I think, for example, I don't know if this is relevant to this conversation, but it makes me think of, Carol, what we saw with Wendy's earlier this week, when you know, they said there was going to be surge pricing and their earnings call and everybody freaked out about the price of the bacon eat or changing on these digital digital
meal Uh, these these digital menus at drive throughs and at restaurants. So so how did this type of sort of you know, fandom come into the research.
Yeah, So, I mean, I think your spot on tim which is that's exactly what we've seen. Hating on a brand used to be lighthearted. It used to be Miracle whip right, which was a polarizing product that some people loved it, some people hated it. Then a few years ago we saw it start to get a little bit more political with you know, perhaps Nike and other brands that you know, seemed like they were taking a stance.
But we've just become further entrenched in some of this polarization as well as access to information, so you're seeing people just so quickly get spun up into a story. And so what we really said was, first you want to start by just understanding who your consumers are and just how much of a fan they are. They I'm your product because it's had, because they're truly loyal, They're truly a fan or an enthusiast of the brand. And then if they are a super fan, how much risk
does that open you up to. So when we think about you know, like certain football teams, for instance, I think are a great example. You see people with trade decisions or draft decisions. You see people get really opinionated to the point where they get angry and they feel personally betrayed by it. So it's really thinking about how to balance that emotional connection to the brand and still drive engagement.
Yeah, you know what's kind of rough is I just think about you know, especially coming off the pandemic and George Floyd we talked about the importance of companies to step up and take positions on, you know, things that are going on in society, helping to kind of you know, play out what's right, what's wrong, and take positions support their employee base as a result. But I feel like companies and also the influencers or stars that they align with like can be can can work out greater, or
it also can get them into trouble. So it's not easy.
Absolutely, Yeah, absolutely, Carol. We've seen just what you're describing, which is, for a long time we all fell into that sort of narrative around people are seeking transparency for brands. People want brands to stand up and say something. And you're seeing that walk back a little bit because we're realizing that's exactly what happened, which is it made just
simple things you buy and made it political. And so the conversations we're having are really around are the stances that we're taking true to the brand or true to certain people that work on the brand. And that's where it starts to get a little bit trickier of making sure it's like stances you take on specific social issues feel like they're part of the ethos of a brand, and most importantly, perhaps that you're willing to lose sales. And so we've seen you know, Patagonia is a good
example to brand. Yeah, but as willing to take a stand.
Oh, go ahead, But well it's a private company and you know, every it's fair I think to say that a lot of the people who buy Patagonia would be aligned with the company's values. So I feel like that's not really a risky one. Or but it's exactly it's kind of an outlier today. I mean, are there any other brands?
Oh?
For sure, I mean, are there any other brands you can point to?
Oh? I think, I know.
I think that's actually the exact argument to be made here, which is, when you really are a bigger, mainstream brand, there should be a lot of thoughtfulness around exactly what it means to take a stand and what good looks like and really checking in with you know, am I, is there any risk here in terms of alienating the core? How do we stay on message? What's the simple brand
message that we're trying to stay true to here? And if we do have any backlash, how do we stay true to that message as opposed to getting lost in the nu once of it all? But sometimes less is more and we're realizing that even though for a while consumers we're voicing, oh I want a brand to stand up for a specific cause, that maybe that's not actually the case and there's more risk there than good Katie.
Is it safe to say?
Though?
When it comes down to it, companies they're going to be very careful cautious in terms of who they align with. I mean, I think a bud light right the controversy over there. I mean, because they don't want to impact, especially if they're publicly held, they don't want to impact the top line. They don't want to impact sales growth. So if they are nervous, they're going to back away exactly.
And that's why, you know, coming all the way back around to fandom, it's really thinking about who your lovers are. How do you take the people that are in a bit of a lower part of the funnel. So maybe they're buying your products on habit or maybe they're a fan, but they're not necessarily outspoken and advocating for your brand. How do you move them up the funnel little a little bit become more of a lifestyle brand. So some of those brands you've seen recently are anything from you know,
car Heart's a good example, Lululemon. You've seen those brands start to extend a little bit and feel like they're more ingrained in people's lifestyles. So really focusing on that upside and then mitigate eating the risks on the other side is how you can kind of like almost leverage that fandom to operate through this this hazy environment.
Yeah, when it works, it works really well or ken for a company. When it goes south, not so great. Katy Thomas, thanks so much. Have a great weekend. She's the lead at the Carney Consumer Institute.
Brother mark.
A journal.
How about you let me drive?
Oh no, no, no, no, he's going to drive, honey, Please, I'll do the riding gravels.
Let's wat I want to try it.
It's a good question.
Good try.
This is the drive to the Globe do me thing well by another it on Bloomberg Radio.
All right, everybody, just about eighteen minutes left in today's trading session. Our next guest says investors are living through a bull market and that the bull market is just hitting its drive.
Let's drive to the clothes with Lauren San Felipos, senior investment strategist for Merrill and a Bank of America Private bank. Lauren, good to have you with us right now. You argue that investors are living through a bull market, but it's hindered by negativity bias. What does that mean?
Yeah, I think this setup this year is certainly hindered by an election year. Right, there's a lot of volatility and associated volatility and uncertainty, but there's a lot of things to look forward to.
Right. We have this said pivot that's.
Being priced in growth is certainly surprising to the upside.
The set Atlanta.
Tracker for GDP for this quarter three point two percent. So again, surprises to the upside will certainly matter and I think carry the market through this year.
All right, So kind of interesting. It's funny to hear what you're saying, and I feel like it builds on the guests that we had yesterday Louisnavalier, right, who was saying that markets are kind of getting ready to are they're partying like it's nineteen ninety ninety, But he wasn't saying that they're the same kind of market Lauren having said that, in terms of your broad macro view, what parts of them are cold you find interesting?
Yeah, So I think what we're seeing now is still this narrow trade at the top, right, but I think there are other sectors that are doing less bad as compared to last year.
So look no further than financials.
They're up seven percent so far this year, Healthcare up another six percent. So we are expecting this broadening to sort of take place, and I think that certainly will include energy even right we can think about getting cyclical for the first time in a while, So that's exciting us, and we're actually making allocations towards those areas.
It what can I just ask you though, the energy and I'm looking at it, it's yeah, it's kind of near the bottom of the pack when you look at the major industry groups and the S and P five hundred out of eleven, it's a ninth place, still up about two point two percent. How much of your interest is the consolidation that we're seeing a little bit.
Well, right, So I think that definitely is a factor in it. But I mean we're nowhere near peak oil demand. There are such good fundamentals I think in the energy patch, and you know that green transition it's definitely been tricky, and energy's balances just generally look good. So we think that's an attractive sector where we're looking to put.
Money to work.
What concerns you right now? What worries you in the team?
You know, what concerns me is that we're fairly convinced of this FED pivot, right and I think the runway now two months into the year, I think the runway for the March watch list items, we definitely have to get confirmation that pmis have bottom.
So that sort of needs to come through.
I think next week's job report we're going to be looking at pretty carefully right for that other side of the mandate. And I just think every print really on the runway to June, which we anticipate being the first rate cut, we'll be watching very carefully.
You know.
It's kind of interesting too, and like I'm saying, kind of layering on some of the market conversations that we've had around this table, Lauren. But this idea of profits going forward, maybe expectations are too low for the next couple of quarters. So that provides some good good impetus if you will to send shares equity shares higher election years, because you tend to have candidates who promise you everything
tend to ultimately be pretty good. And I think that there is one more was it the kind of fed being maybe done, kind of put it all together, and that basket really provides maybe a very good environment, certainly for more equity momentum, which you argue for.
Yeah, you know, I think it's interesting electioneer. I actually think is an opportunity to.
Be smarter than the rest.
And I talk to clients all the time who feel skittish in this environment, right, But I think the underlying idea here is just to stay invested, and actually that is smarter than the rest. So I think, you know, that's really the main tenant for this year.
So it's so interesting to hear this from you because this is the I mean, this is the conversation that it really seems like the conversation is pivoted, and it feels like, at least to me, Carroll, that more and more of our guests lately have been optimistic than pessimistic and something has really shifted. And I don't know in recent weeks.
Well, and I think some of it, Lauren, how much. You know, Tim brings up a good point and we talk about it all the time here. We got, you know, the Fed's perverred inflation gauge, right and what it tells us, and you know, it's still you know, not exactly where the Fed wants it to be, but we're way down from where we were a year ago, and it didn't
come in hotter than forecast. Having said that, you know, this clarity that maybe we're getting when it comes to Fed policy, right that the Fed, you know, despite some outliers saying we could actually get higher and some more rate increases, for the most part, the market is just saying it's not if we're going to get rate cuts, it's just a matter of when. And that does provide some clarity about the outlook.
Yeah, it's a question of not if. Bo When totally agree with you on that, and you know, Core this morning headline running at two point four no excuse me, headline running at two point four, core running a two point eight. What's interesting about that is that actually that's where the Fed thought that those measures would be running by year end, right, So come March we're gonna have to see their update third new rendition.
Of the summer of economic projections.
They're doflot. So I think a recalibration, you're right, does need to happen. There's a lot of bullishness out there. It's actually a little bit tougher to find a bear.
Right it is, And that's that has me wondering if there's a contrarian signal there.
Yeah, you know, I think perhaps we don't think.
I mean, we don't think. So we're in this bullish camp.
I mean, I understand the hesitation when everyone's sort of on one side of the bold right, you wonder, right, I totally, I totally understand that hesitation. And I can remember last year when strategists, economists were all forecasting for a recession, right, and that never happened.
So I'm with you, I'm with you.
But I do think that earnings basically what you were talking about, Carol, eleven percent earnings growth for this year.
I mean, that's just.
Gonna that's going to drag the market higher. Right, It might be a bit lofty. We a Bank of America think we're looking at maybe five or six percent growth for this year, but again, that's still pretty good growth after that earnings reset that we got left.
Well on the other thing is Lauren, nothing's ever in a vacuum, right, So you're looking at the US as a developed market compared to other developed markets around the world that are not it's not going as well as it is in the United States, So investors who can choose anywhere. Having said that, you see any kind of overvaluation when you look at the US market, anything getting a little bit too hot, that makes you a little
bit nervous. I think about the Magnificent seven. I think about you know, the AI names, the big tech cap names, anything that you say it's okay to maybe take some money off the table. I hate to use that expression, but any areas that you think are a little hot and that a little bit of a correction will make them more attractive in your view.
Well, that's an interesting point, right, because international is breaking out now to some all time highs you've seen on their indices, for some time, and we're definitely getting questions from clients now on when international.
Will come back.
I think all along though, there's been some quality companies to look at, like even in Europe as the example here, right, I mean, you're seeing actually a very concentrated trade happening there. It's sort of like the Magnificent Seven in Europe. So that's certainly playing out. And you know, Europe can be in recession and there are multinationals are leveraged to the US right and the US consumer, so as a benefit, really those.
Names can work.
So I think we're seeing a little bit of that now and maybe global growth is even bottoming.
All right, can leave it on that note. Hey, Lauren, thanks so much, thanks for dropping by and sharing your view with us. Lauren sen Philippo, she's senior investment strategist over at Merrill and Bank of America Private Bank, joining us in New York City.
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