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All right, well, investors definitely want shares of Microsoft in a big way. It's unbelievable, maybe not unbelievable considering the quarter that they just came out with Microsoft, as you know, we broke their earnings last night. They are top in the S and P five hundred and Nasdaq one hundred, stock at its highest level in more than a year. Air adding and my numbers may be a little bit off a little bit, but as a latest measure, a
record one hundred and fifty one billion in value. And that's despite the UK blocking a sixty nine billion dollar Activision deal acquisition of Activision. So let's continue our coverage of the tech giant. Bloomberg Intelligence Senior Technology analyst anarrag Rana is back in our Bloomberg Interactive Brokers studio. Narag a lot. It was twenty four hours since we got their results. Anything changing in your thinking about the results we got.
No, I mean it was surprisingly last night. It's still surprising how they pulled it off, especially when they guided just two months ago to grow six percent in constant currency and they beat it by four hundred or four percent. Then you know, came at ten percent, So it is surprising. It is good. They're executing well and you know, let's help this continues.
And I wonder to what extent and the Microsoft story, you see this as a win for them when it comes to the AI race. Did the earnings yesterday?
No? No, no, no, that's too early in the game. It's not going to add to anything meaningful for years to come. This is your regular bread and butter business, you know, PC sales, office cloud being not as bad as we thought it would be. So it is, as I would say, very little to no contribution from new workloads from AI.
Yeah, it's interesting, right, We've all been to ecstatic over Microsoft, in particular because of what it's been saying about AI. But when it really comes to it, it was cloud and just kind of the core business at Microsoft that just did so well. What do you make though of a company when you say it was just a few months ago they came out with one estimate right or forecast and then all of a sudden they just blow it out, like what is that? Just how it sometimes plays out?
It does, and it's the narrative because remember Microsoft is such a big part of the software world that anything it says has a big you know meaning for read through for other companies. I mean, look at some of the other companies today. Look at Snowflake, Data Dog, you know, Mango, deb They're all rushing because these are the guys who say that, okay, enterprises are still spending on some of their products and things are not getting worse. I think
things are not getting worse. Is to me is the big movement because you know, the banks being blowing up. Banks spent quite a bit of money on technology. This shows me that the need to be digital is superseding, you know, some short complex in funding.
I wonder if, like when they gave out that for cast, was that I'm trying to think of where we were in terms of like what the FED was going to do. Was it because they thought the FED was going to be a lot more aggressive and slow down the economy.
I don't think it's they go by that method. I mean, they look at the backlock. They think they look at what the orders are coming in, and they look at what you know, people are turning things off, and they give their best estimate at that point. But to go from six to ten was pretty commendable to me.
Yeah.
On the PC side that you were mentioning earlier, we've been talking a lot about like the smaller names, like the Seagates of the world sort of being an indicator of a slowdown in demand.
Are you concerned about that? When it comes to the Microsoft story.
In the Microsoft study, there are two things, consumer and commercial. The consumer was still weak. That has been the case, and then that probably flows through for other vendors. In the case of commercial PCs, which is companies upgrading their PC that goes by a cycle that typically does not you know, a factor in the in your normal day to day that consumer spending is week. So companies won't upgrade,
it doesn't happen. They go by their own methodology. If the computers are old, they go out and you know, I would say upgraded. Sometimes they push it out by I would say six months to nine months. But I mean those numbers were actually pretty good.
So that's not like an economic indicator at all, okay.
Well, we talk about the bell weathers right within a sector, and I do wonder how you extrapolate out what we got from Microsoft and what it tells us about the broader business spend on it.
No, you see, we'll have another company report tonight service. Now we'll have Amazon tomorrow night. So I think there are other companies that will show. Now it's possible Microsoft executed better than others, but I doubt that it's such. As I said, it's such a big portion of overall software spend. I think this just shows to me that, you know, we are probably hitting the low watermark at this time, and maybe it's time for a u turn in terms of technology spending.
Interesting. You know, it's funny yesterday we were kind of musing about Microsoft under Bomber versus Microsoft under Nadella. I mean, it's a different company.
A very different company. It's it's day and night. You know. It was open source was an evil word in the days of you know, Steve Bomber, and Nadella has embraced it quite a bit, you know, working with rivals, trying to recognize that if you're not good in certain things, walk out of it. He walked out of the Nokia deal, Bomber went ahead and you know bought no. Okay, so it's a it's a completely different view when it comes to to to the new Microsoft.
And speaking of deals, I would love to get your take on the Activision situation, the acquisition getting shut down in the UK, and you know.
Our expert generly has talked a lot about it and this is not you know, in the four years ago this would have been not an issue. But the economic and political climate is so different today that you know they are they will block anything by big tech at this point.
So okay, we know Microsoft's already appealed it.
I mean, Didjetjen say is going to take a long time?
It's going to take a long time. Is it a case where I think there's a three billion dollar breakup fee that if Microsoft walks away from it? Is it likely Microsoft will or it will just write it out.
I think they will just keep on appealing till they figure it out.
Do they need it?
Though?
Like tell me in terms of strategy what does it mean for future growth?
Gaming is a big part of it, and like other areas such as let's say streaming, you know, content is a very big important piece of it in this case, in the case of gaming, you do want to make sure you have the best games possible, and they have said that they will allow it on other platforms as well,
but I think that's still met with skepticism. And if someday in the future Microsoft wants to get into cloud gaming, you know it would I'm sure would want to have a lot of those digital assets with it that it can offer those games.
Is that why it's not really an overhang on the stack today because it's like, okay, this is going to be drawn out or it's I mean, was it an over I don't think I really so.
Initially it went up by nine percent, eight percent. Now it's up to seven percent, maybe one percent up and down. But again, you know, Microsoft is a company that has six or seven things working for them. It's not dependent
on any one particular product or segment for growth. This AI, for example, that just came out in the last six months, one could argue three years from now, it's going to drive growth a lot more than you know, perhaps even gaming now, you know, it's difficult to measure that, but this is one company that's investing in the right kind of R and D and it's getting really good results.
What I'm wondering is Amazon, is we know cloud also important obviously to that company. Is there something that we can glean from what we got from Microsoft and what it means for Amazon?
It should be fine.
It should be fine.
But once again, Amazon's far more exposed to startups and new companies than Microsoft, which has a big portfolio of legacy or older companies like you know, City Bank, Pepsi, Coca Cola, et cetera. While Amazon has more of you know, the ubers and the and the startups. So Amazon may be exposed a little bit more, but I think it, you know, maybe it's fine.
Some of our guests have been calling AI the iPhone moment of this era, and it would seem that Microsoft is the Apple then, right, do you agree with that?
I feel like you don't see it.
It's like somebody asking me about metaverse a year and a half ago. I need to see the results before I get excited. I am a financial anandlist need to see the numbers. It's a Philosophically, from a concept point of view, it's very good. I have no doubt that this is really a very game changing moment for the entire world in some form or shape. But now, how long does it take to become mainstream? Is going to be a you know, it could take years.
Frankly, you know aneric that's so interesting. Do you put it on the same plane as a metaverse or is it something a little bit more constructive and more developed.
I will tell you five to seven years ago I wrote a piece on this thing, how AI can change the world. It's just that's happening at a much faster paced.
Generative AI specific or just aiah.
And again, IBM was a big deal at that time. IBM was doing a lot of those similar things, and you know, it just could not expand and got acceptance. At that point, it bought Weather Company, it bought a couple of other companies that looked at images. Watson Health was a big deal. I've played around with it. Such a phenomenal product, but it never took off.
Right, You can't really argue with the uptake and use of something like chat GBT versus the use of the metaverse.
It's night day, true, But at the same time, the real money is going to be made from enterprise use companies when they expand into a product like that. But they have to then dive into their own data. They have to clean up that data that could take us. This is not as simple to monetize as you know people are making out to be.
Does it ultimately anerog play out, just like we have a couple of really big we have a lot of people in the cloud, but we have a couple of really big players. Is that how this, you know, next level AI plays out? Or you're going to have a lot of hands in it.
So the software is going to be used, could be used by anybody. It's up to you. If you want to make an application, you can create one and it could do wonders. You know, it could be a grocery store, if be deployed anywhere, healthcare industry. But at the end of the day, we think the biggest beneficiaries are going to be the three or the four biggest cloud providers because this infrastructure has to be built on cloud. So Amazon, Google, Microsoft.
Don't care who's doing it.
Well as long as say, if you're a company and you want to spend some money and create an application, yeah you can go out and make it.
Last question twenty fe seconds. Was there anything on the call that wasn't answered to your.
Now, Yeah, it's just surprising you're on the positive side.
It is amazing, so great to check in with you again. I'm not even sure if you got any sleep. Did you get any sleep?
No?
We so appreciate honor our Grana, our senior technology analyst here at our Bloomberg Intelligence team, our in house group of analysts.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or watch us live on YouTube.
Hey, we're keeping an eye on shares of Tesla as well, stock down about three and a half percent just off their lows, and they have backtracked nearly twenty five percent since March thirty. First, we continue to see Elon continuing to shape strategy that includes betting the house on low prices and razor thin margin. So this story is today's Bloomberg Big Take. It's also the upcoming new issue of Bloomberg Business Week on newsstands later on this week tomorrow.
In fact, already online at Blomberg dot com slash Business Weekend on the Bloomberg terminals. So let's get to it. Let's get to Bloomberg News. Globals are cars are Craig Trudell, he's on the phone in London, Craig. Good to have you here with us. So, yeah, it does feel like every day we come in and there's either another price cut or some kind of price move from Elon. Tell us a little bit about your story in this strategy of mister Musk's.
Yeah, well, we'll see if I wake up to another one overnight, it's going to be right in the middle of as I'm sleeping. So, I mean, this has been a story of just yeah, relentless cutting all year long, and we really started to see hints of it even late last year, you know, whether there were there were some cuts in China or some incentive offers in the US. But in the end, we're now to a point where where it cast us almost a third less to buy a model why now than it did just a little
over three months ago. And this is just something that we haven't seen before, right, It's it's not a model that you know, is is really uh you know, low low volume or or has been in this you know, market decline. If anything. It's been their strongest model, and it's potentially I mean, it could end up being the best selling vehicle in the world this year.
Uh.
And yet it's a case of adding a heck of a lot of capacity very quickly. Uh and and the model itself, uh you know, going into that process being quite high price, being high volume. Uh and yet with all that capacity coming online and real changes in the sort of supply demand dynamics for the broader industry, you know, all all of those things have sort of combined to also, I guess adding a CEO who is sort of prone to making very sort of sudden changes, and boom, you
get yourself. You know, these these massive uh you know, price cuts in the last few months.
Craig, does it work for the company?
I think that's that's a question that's really difficult to answer because you have, you know, really smart piece people who come to just radically different conclusions where you know, some some will tell you it's desperation and some will tell you it's just disruption, and you may even actually hear it, you know, hints of that in the in the same answer from the same person. And I allude
there to Jim Harley the CEO of Ford. He's talked about, you know, just last week, you know, he told reporters look up nineteen thirteen and he was referring, of course to Henry Ford and the Model T and how quickly Henry Ford dropped the price of that car when he sort of had an edge on the rest of the industry and had, you know, innovated with the moving assembly line.
I think, you know, Musk thinks that he's pressing an advantage here, but I also don't think that you cut your prices that much that quickly from a position of absolute strength. It's clear that he's, you know, to some degree, been pushing on a string here.
What I do wonder, you know, is this about forgive me going after the masses more easily? Because these cars have been even the low and pretty expensive.
Yeah, I mean just last year, I mean you had to pay sixty five thousand dollars plus for a Model Ye, this was not a cheap vehicle. It's now to the point where you can you can get it in the mid forties. And that's you know, something that we haven't seen before, where you know that that vehicle was not anywhere close to what the average transaction price was in the US and now it's slightly below it. And so we've seen that change. It's been about twenty thousand dollars,
you know, change in the differential. Our colleague Tom Randall had a great story on this yesterday. Just he's been very closely following those numbers. So you know, it absolutely is the case that he's unlocking, you know, a greater market. But you know, to what extent is he able to sustain the Model three, which is is you know, older, and then you have a sort of very different story with the Model S and the Model X, which are are very old and really having a hard time.
You know, it's interesting what I I thought your story and you took us back to the Rick Wagner days at General Motors when he was CEO. Do you think it's fair like to share with our audience, you know, that comparison. But I do wonder is it fair to make that comparison, because I would say that it's kind of it feels a little different.
Oh, it's it's definitely different. I do think that the sort of similarity there is, you know, a story of a company that has a heck of a lot of capacity and has to make some difficult decisions when you know it's having trouble getting demand for the capacity that it has. I think the comparisons maybe due, you know, to your point and there, and I think there's a great chart in our story today capturing what's happened to
the cash and the debt on Tesla's balance sheet. We saw, you know, in twenty nineteen and twenty twenty, Tesla raise a ton of money from Wall Street and in the last few years has itself you know, added to its cash balance, you know, from its own operations. And in the process it's it's also paid off about you know, ten billion, ten billion dollars worth of debt in the course of three years. And that's why, you know, just recently we saw Moody's raise Tesla to investment grate.
So it's a great chart. It's how you want it to be.
Yeah, it's Tesla in a structural state anywhere close to where GM was. Absolutely not. But I do think you know, the sort of you know, it's funny, we we sort of thought that Tesla was something different and not like other sort of old line carmakers. But you know, this idea of of sort of as we saw in two thousand and one, you know, just sort of resorting to discounting to sort of move the metal. It definitely brings you know, it sounds familiar there.
So why aren't they pouring that money into generating freshness? Which I'm stealing from one of your sources. But Carol and I get a lot of our best ideas, or I do, at least from the makeup room. And what they always talk about is the lack of availability of different colors of Tesla's. I know that sounds silly, but is something like that on Elon Musk's mind.
It's a good question. I mean, I don't think that they've really sort of, you know, talked a whole lot about, you know, significant changes to the product. And of course you always sort of run the risk when you sort of, you know, dangle this sort of next thing that you sort of have the consumer wait for the changes to come.
And we may be seeing that a little bit. I think there's been reports recently that the Model why and the Model three are going to undergo some upgrades fairly soon, and so are we seeing some consumers hold back and wait for the pressure models? I think another fair question to raise here is. You know, if you're a consumer, why the heck would you want to buy a Tesla right now when when the prices are coming down so quickly?
You know, why not wait a little bit more and see if these prices sort of settle down a little bit before you, you know, go out of and purchase something that you know, a few weeks later, might you know the price may depreciate another two thousand dollars, we'll go up.
I'm just going to say there's a flip side, no Eli, Hey, I just I am curious, Craig, is Tesla going to be like any other carmaker though that like every year there's a new model. It doesn't feel like, you know, Elin just does it so differently. Should we expect as consumers that that's how he's going to do it? Or is it going to be I don't know akin to I mean Apple watches, I mean, or something that come
out every few years. I mean, how do we you know, how do we think about that when it comes to Tesla?
I think I think absolutely that's a that's an observation that you know, he has very much sort of bet on this idea that I don't need to sort of regularly do these redesigns the way the industry has been been doing for a long time. I can make these incremental improvements to my product with software, and to his credit, he's done that in a way that I don't think.
You know, the incumbents are still caught up in terms of the over the air update capability that Teslas have, and it's still an edge that Tesla has over the rest of the industry.
Right.
But that being said, I do think that, you know, the consumer has been sort of trained over the years to expect, you know, this model will at least get you know, a bit of a freshening up, you know, a bit of a nose job on it, something to get me excited.
You know.
They did try to do that with the Model S and X a couple of years back. Yeah, it just didn't really go over that well.
I love I don't know, I'd love to like not have to keep replacing things. It kind of works for me. Craig Trudell, great story, Thanks for hanging up Later there over in London, Craig is Global Cars are here at Bloomberg News. He is joining us on the phone from London. That story, by the way in the upcoming new issue of Bloomberg Business Week on newstands tomorrow. Already at Bloomberg dot com slash BUSINESSWEEKND on the Bloomberg Terminal.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six East to on Bloomberg Radio, the Bloomberg Business app, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
All right, everybody, it's four oh nine on Wall Street, and we've got a slew of earnings. We still are awaiting Meta, so as soon as they cross the Bloomberg terminal will bring them to you. Service now is just crossing, and I just want to do a quick break on that. Certainly playing into here's meta. Let's go to that. Actually Meta is crossing the Bloomberg terminal, and let's go to first quarter EPs to twenty a share that is nineteen cents better than what the street was expecting. First quotter
revenue is twenty eight point sixty five billion. That two is better. The street was looking for twenty seven point sixty seven billion to the forecast meta platform see second quarter revenue of twenty nine point five billion to thirty two billion. The estimate is twenty nine point forty eight,
so it's raising it to the upside. Quick check on what the stock is doing in the after hour, especially on that upbeat outlooks Stuck is up almost nine percent here in the after hours, So that is a big deal. First quarter advertising revenue, big reason in terms of top line growth here twenty eight point ten billion. That's a beat the street was looking for twenty six point seventy
six billion. And then you get into certainly Facebook daily active users two point zero four billion, Mattie, that is better than what the street was expecting just by a.
Hair And it's really critical to look at that Facebook advertising recovery because that was going to be one of the key pieces to watch.
The other thing that I'm really interested in seeing.
Is how Zuckerberg when it comes to the earnings call, looks at the meta versus metaverse versus AI conversation, because we know that that's going to be a tight rope for him to walk well.
First quarter Reality loves revenue right, that plays into virtual reality, augmented reality three hundred and thirty nine million. That's a miss. The estimate was for six hundred and thirteen point one million. Again small part of the business, but this is a lot of what it talks about. When it comes to the future. We want to bring in our guests and
we'll continue to track these earnings. Do you also want to mention that the outlook from Meta includes three to five billion dollars worth of restructuring costs, and it's talking about fiscal year total expenses of eighty six to ninety billion. It had seen eighty six to ninety two, so raining in at least the top end of that. Lucky for us with us as James Chockmack, he's partner technology analyst over at Clockwise Capital. He's with us on zoom from Miami. James,
nice to have you here with Maddie and myself. So let's get to it. In terms of Meta stock is up in the after hours. How do you see it?
Well, we're really glad with the result given to one of our thoughts. Ye relations, so happy for us and having for our clients. Latian said, you know, this is a company that took the bull by the horns when it came to getting religion on the cost side. And I think as we anniversaried in January the advertising changes at Apple. You know, the setup was pretty well for the year.
Now.
Really the question for us is the only remaining uncertainty this relates to the metastory, is what is the degree of the recession? What is the depth of the recession, and how does that impact discretionary i'd spend. So fundamentally speaking, it's everything is moving in the right direction. But you know, just what we potentially see softwas in the numbers in the second half. But ye overall, you know, it's we're pleased with the results and context.
Right those first quarters sales, as we said, up to twenty eight point six billion, that's a return to growth after three straight quarters of declines. That's that's a good thing because the trend line in the other direction wasn't so good.
Yeah.
Absolutely, I mean last year was a very difficult year for them. I mean they had to navigate and recalibrate for the new world that they were deally with in terms of how they can capture measurement and how they can capitalize on the data that they collect and help the advertisers and that they serve. That was a difficult task and it took the better part of a year
to get it right. Obviously, at the same time, there's under monetized assets like reels, and then you know, like I said, getting religion on the cost site is what it comes down to. We did trim, you know, this was over a ten percent position heading into the quarter. We did trim a little bit heading into the print today, just you know, just because you know, this market is slightly fragile, but at the end of the day, and
also the buyside expectations we're getting a little lofty. But at the end of the day, this is a stock that's trading at about twenty times earnings, not that egregious of a multiple, and the opportunity for the top line to you know, to remain at healthy levels for the foreseeable future.
Quick question on meta when it comes to Facebook Reality Labs, because a little bit of a of realism. They're the first quarter sales missing expectations, and that's kind of critical to watch because the metaverse is so core to Mark's vision for the company moving forward. Does that concern you at all in terms of where Zuckerberg may be most interested in pouring resources into the company moving forward.
It will concern me potentially in the future at this juncture, not yet, because we have a pretty healthy view of what the earnings picture is going to be for this year and next year. Now, if that spend gets out of control where we have to temper those expectations, then the calculus would definitely change. But at this point, as long as you know we're performing along that trend line of earnings growth that we predict, I think it's okay.
You know, I'm just looking at the press release to James and Mark Zuckerberg is saying, of course, he's a Meta founder and CEO. He said, we had a good quarter and our community continues to grow. Our AI work is driving good results across our apps and business. We're also becoming more efficient so we can build better products and put ourselves in a stronger position to deliver our long term vision. That long term vision is the metaverse, right, and this is the year of efficiency. So it uses
the word efficient again. I mean, this is what's kind of driving this company. I mean, is it strategy? Is it cutting costs? I mean, how do you see it?
I mean the way we're investing, is we want to invest in companies that have the best possible control over their own destiny. There's so much noise in the market right now, everything that's happening in the financial markets, what's going to happen with demand, recession, banks, and whatnot. You know,
which companies have the most control over their destiny? And the META and Zuckerberg at the HELM seems to be acknowledging that and working toward optimizing and maximizing the potential of what they can from the aspects of their business that they can control. So long as demand and the economy stays relatively constant. From where we are, you know that they have even more control over their numbers for
the next year or two. I mean, some of the buyside expectations have creeped up the seventeen eighteen dollars per share in earnings estimates for next year, which is actually north of where we are. So that's why we were a little cautious.
Really quickly here, really quickly, we about twenty seconds one percent head count decrease for META. Are you concerned at all that they're not going to be able to maintain those cost cutting measures heading into the rest of this year?
Real quickly.
I mean at this juncture, no, I think we'll see what happens. But ultimately, as long as it performs along the trend lines that we have predicted for the time being, I think all will be all right.
Listen, Hey, thanks, and thanks for your patients as we work through those Meta numbers, which kind of came in a little bit late at least in terms of what we were expecting. James, Thanks, James Chockmack. He's partner in technology analyst over at Clockwise Capital on Zoom from Miami. We are seeing shares of Meta. They're rallying in the aftermarket, up about seven percent.
This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine plus global business finance and tech news the Bloomberg Business Week podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
Right now, we want to get to some of the trends that are going on in the workforce. We're kind of counting down not only to a FED meeting, but our next read when it comes to the labor market, and with us is Emma Cod of Deloitte. She's a Global Inclusion Leader, and they did a survey that looked at they do an annual report on women specifically. It's out today, and what they found. One of the findings one out of five women surveyed have left their employer
in the past twelve months. That's a pretty big statistic. So let's get to it and get some understanding of who they talk to and more on the findings that Emma joins us here in our Bloomberg Interactive Broker studio. Great to have you here. I do feel like this is very indicative of our times post pandemic.
Welcome, thank you, great to be here.
Nice to have you here. So tell us little bit about who you surveyed specific So.
We surveyed five thousand women in the workplace across ten countries, really to try and get a good global outlook, so you know, European countries, it's sort of over to Asia, Latin America, so really a good represent sample and the affectively women in work in roles, in jobs, eighty eight
percent of them were in full time employment. And that's actually interesting when we come on to the flexible working findings, because I would say some of those would rather be in part time employment, right, but given some of the
issues that we've identified, they're not working full time. And the aim for this research, as you said, this our third year, is really to understand it's less about policies, less about processes, to understand women's real experiences and actually to come you know, what is the secret source come up with the recommendations that businesses can use because we're not making enough progress.
So what was the main thing then for businesses?
In terms of a takeaway?
I would say, look, there are a couple of main takeaways things that really actually concerned me. Last year, we saw very high numbers around burnout, around exclusion during hybrid, working around non inclusive behaviors, and I do think that was partly a sign of the times we're in this weird sort of coming back to work slowly, and we were you know what we've been through the last couple
of years. This year, those numbers have come down, but I want to really emphasize they're not good, that they're still poor. So specific you look at mental health, mental health, more women are feeling very stressed. You know, you ask them, are you feeling more stressed than you were a year ago? Yeah, and half of them are always on. There are more women who are saying I feel the need to always be on. So that's a big hangover from pandemic times.
It's worse than last year, but fewer women feel comfortable talking about mental health at work.
Emma hanging on for a second, like, how would you say this compares to pre pandemic? That was pretty frazzled pre pandemic.
I was pretty fuzzle pre pandemic too.
So is that because I'm trying to get an understanding of, like, you know, pandemic, which was lousy and so many people had very difficult situations. But I'm just wondering, you know, I have to say my first few months, I love being home from me and my family. It made us all stab for a moment. Yeah, So I'm just wondering, like, how do you think about it that way? You've been doing this survey since the period.
Yes, and we did a pulse during the pandemic and the pretty bad findings well from that, so how does it compare to pre look mental health has always been an issue, you know, we have our physical health, we have our mental health. It's just talked about more and I think the workplace, I think how it compares is the workplace started to talk about it more because of the pandemic. But you know, the mental health and mental ill health has existed long before that. Always on has
existed long before that. I think we got into habits during the pandemic that I don't think they're going away. And I think hybrid working is something that's new. You know, we didn't some of us hybrid worked, just we didn't call it hybrid working. Hybrid working is a new way of working that you know, is still some challenges there for women. So, you know, non inclusive behaviors. Forty four percent of women have experienced non inclusive behaviors in a workplace context in the last year.
How would does that mean?
So that effective means microaggressions or harassment. So of the respondent's nearly two thy five hundred women said I experienced it on at least one occasion a behavior that was you know, it was a microaggression or harassment. So, you know, and was that probably the case? Yes, I mean, you know, workplace culture has long been a challenge, and it was a challenge pre pandemic.
Right.
Yeah.
We had a story the other week the terminal from Pew research data showing that US women now make as much or more than men in half of marriages. But I think that's really interesting to square that with some of the findings that you have on women still feeling the need to deprioritize their careers. Can you talk about the dichotomy there?
Yeah, and this is interesting because the survey has been going three years, but this is the first time we wanted to find out about responsibilities in the home and about prioritization and who is the primary income source. And the findings were they surprising on the share of household responsibilities. Sadly not, they weren't. So we had, you know, just under half women saying I have primary responsibility. That only
ten percent of women said their partner did. So that's the first thing, and don't forget most of these women are working full time as well. And then when we looked at income source, majority of women were not the primary income source. Majority of them prioritized their partner's career over their own. Now, the interesting thing there is that was still one five for women who are the high earner. So we had yeah, so you know, two and five,
we're not one in five were not. So there is this challenge, And to me, it's like this sort of vicious circle almost because if you're deprioritizing your career, then your chances are becoming the primary earner in the household are reduced.
Well, okay, so just get about forty five seconds left here. So what do you do with this? Because I feel like we spend years and years like we pull data. It's very useful. I think it gives us a great snapshat of what's going on, but so many times it doesn't get put into action.
So what do we do with it? We need to know that we do not need to fix women, We need to fix the workplace. Okay, that's the first what we do with it? This report? What I love about it is it's data droven. It shows the impact and it shows the positive impact. Five percent of women work for companies that are getting it right. So any employers out there, you can look and see what is the secret source for those companies. It's around culture, it's around process,
it's around support, it's round removing barriers. That is what we needs to do. If we take this seriously, which we need to, then we can make a difference.
And when it's a tight labor force, which it still is. You know, workers are gonna move to where they think they're gonna have all of these things that they that they're looking for, and as you're seeing in your service. Absolutely, all right, Emma, safe travels home.
Thank you very much.
Nice to have you here, Emma cod she's global inclusion leader at Deloit. Here in our Bloomberg Interactive Brokers studio, you're listening and watching Bloomberg Business Week on this Wednesday Carol Masser along with Madison Mills, and this is Bloomberg Radio.
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Brian Ryoga don on Bloomberg Radio.
All right, everybody got about seventeen and a half minutes left in today's trading session, the Wednesday trade, where of course getting meta earnings after the closing bell a few others as well. Charlie breaking down the trade for you, and you do see stocks continuing certainly in the broader market. Really we've got everything near it's loads of this session. The NASDAC now just up about four ten seven percent, so well off it's earlier gains. So let's get to
it with Walter Todd. He's president and chief investment officer at Greenwood Capital Associates, joining us once again on Zoom from Greenwood, South Carolina. Hey, Walter, nice to have you back here on Bloomberg.
How are you doing good, Carol?
How are you doing okay? You know, in the thick of earnings, making our way through it and trying to make some sense of it, any clear tone or direction that you are getting off of earning so far.
Yeah, Well, today is kind of a microcosm of the year.
And by that I mean you've got the SMP itself down about half percent of the equal s ANDP down well over percent, So kind of this mixed market where the average stock is not doing nearly as well as the big guys. So that's Microsoft today. Outside of those earnings. More recently, I would say in general, we've gotten some kind of themes here. Healthcare equipment's doing very well as hospitals returned to normal after COVID, for example, but we're also seeing some pretty definitive messaging.
On economically sensitive areas.
So three reports in the past forty eight hours ups EKG and odfl Old Dominion very similar message saying March slowed really significantly. So that's that's a message that I think we need to pay attention to. And I know everybody's focused on Meta Amazon after the in the next two days, but I think maybe Caterpillar, honeywell, the US steel might be more telling of the economic environment.
What was the second one you said, ups Old Dominion, What was the middle one?
Packaging Corporation of America.
Oh, okay, got it.
So I wonder that to what extent you mentioned the slowing indicators, the slowing economic indicators.
But I know that you also talk about.
How we might be underpricing earnings and we're getting a lot of earnings.
Beats this season.
So which one earnings or economic data points indicating slowness?
Which one do you watch?
Yeah, depends on the day, right, But for us, I think you know this the bar, the low bar that companies are stepping over here because earnings were revised down pretty significantly heading into the quarter.
I think it is the guidance though, right, which is.
Speaking to this economic slow down and weakness that we see coming right now and in the second half if you live the real the GDP now, for example from the Atlanta FED that was two and a half percent last week, it's now one point one percent. And we'll get the first look at first quarter GDP, I think tomorrow, so we'll see what that looks like. But for us, it's probably more the risk and the back half to earnings due to slowing economic growth.
It's interesting you say that are just meanten as a story out on the Bloomberg and she talked about it on air. But this whole idea that we've already seen the earnings recession Walter, and that we've already gone through that. So then you start to think about where does the you know, the market is forward looking, So are we at that point where the market's looking maybe into is it possibly already next year that we've had the worst for earnings? How do you see it?
Yeah, So it's either looking like straight down at this feed or it's looking very far into the future. So I think I still think there's a risk to earnings in the second half of this year. So you're right, we have seen three two consecutive quarters in a row of negative earnings growth. We've got a third probably coming next quarter, but the back half most antis still have a pretty big rebound in earnings.
I still think those probably need to.
Come down a little bit, But you're right, I mean, the market is forward looking. However, if we are in fact going to have a recession, the markets really never bottom before the recession is started.
So that's that's the debate right now.
Well, I wonder also to what extent you're looking at your holdings with Microsoft versus Google. I know you've got both, and we had great earnings from both yesterday, But which one are you more excited about today?
I would say right now, just on a valuation basis, that Alphabet looks more enticing here. It trades at about a thirty three percent discount of Microsoft, trades about twenty times versus thirty times for Microsoft, and it's actually going to produce probably eight to ten billion dollars and more
cash flow per year than Microsoft. So at the risk reward right now, I would favor Alphabet, although again we do hold Microsoft as well, but we did pair that back to a model weight for us today on this strength.
You sound you sound a little bit more negative than positive? Is that fair?
Walter?
And you know, I'm looking at my notes here, and you think the fetch not raise rates again on May third, but you do believe that they will. Are you more negative at this point? Are a little bit more cautious at this point?
Yeah? I would stay cautious is the right word.
I mean, we've been trade in this range from you know, thirty eight hundred to forty two hundred in the SMP for a while now. Obviously we've got below it in October, but we're we touched the kind of towards the upper end of that range. I think there's resk to trading back down. We had, you know, the debt ceilings still hanging out there. We hadn't really touched on that yet. That's a risk of policy resk in the coming months. And you know, we got a lot more earnings to
go over the coming week. So I would say, you know, probably just a little bit more cautious right now.
And when it comes to bank stress in particular, how concerned are you about the you know, six month outcome of that.
Yeah, I think the kind of the downside of that situation is that credit conditions are going to continue to tighten. So you'll get the senior loan officer survey that we get from the FED. Last one we got was in January. Next one will be May eighth. But even in January, before the bank failures, forty four percent of senior loan officers said they were tightening lending standards to small businesses. You got to imagine that's going to go up. So
credit conditions are going to tighten. It is probably going to contribute to an already slowing economy in the second half.
How do you make sense of what we got from Visa And we know people are traveling, but cross border spending that growth unexpectedly was accelerating and they expect it to continue that increasing global travel demand. Is that optimistic or do you think that's an outlier and just everybody wanting to travel at this point?
Yeah, No, I think it's a good point because we're talking The conversation at this point has been about the US economy, right, and we haven't talked about the global economy more broadly, and we are seeing we heard from American Express last week they called out strength in Europe and Asia, so we are seeing some strength emerge in
some of these other economies. China reopening obviously, and I think that's what you can kind of attribute that Visa news to will get MasterCard tomorrow, which should be even more focused on the international side of things.
So there are some there.
Are some bright spots, perhaps outside the US at least the companies are pointing to that during these earnings calls, what are.
Your investors money coming in? New money coming in? People kind of waiting waiting this out to kind of where this cycle goes next. Just got about thirty seconds.
Yeah, no, Well, we're fortunate to getting some new new clients and new money coming in, and from our perspective in terms of investing that we don't want to try to necessarily guess the timing of the market. But at the same time, we're willing to be a little bit more patient. Perhaps someone normally would be in putting that money to work and being opportunistic with the volatility.
But we're very encouraged. But the account growth interesting in all right, good.
To leave it there, Hey, listen, great to check in with you, Dan, take care of Walter Todd. He's president and chief investment officer Greenwood Capital Associates. Joining us on zoom from Greenwood, South Carolina.
This is the Bloomberg Business Week Podcast. I'll a little Apple, Spotify, and anywhere else you get your podcast. Listen live weekday afternoons from three to six Eastering on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg Journey Alone