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This is Bloomberg Business Week Insight from the reporters and editors that bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Well.
Of the more than ninety lawsuits filed against the Trump administration in the first month, more than twenty directly involved DOGE, of course, the Department of Government efficiency. These cases challenge Elon Musk's position, DOJ's structure and who is getting access to internal agency systems, some of which include the personal
information sensitive payments data of US citizens. You might recall just last week a group of nineteen mostly Democratic controlled states suing the Trump administration over doje's access to sensitive data. When their first motion are one emotion, I should say for a preliminary injunction to extend and existing restraining order on the team. So let's talk about this in all the activity that's going on among.
Those involved in those suits.
Is our next guest we welcome in studio, Connecticut State Attorney General William Tongue. General tong great to have you here in studio. There's a lot going on in terms of lawsuits by democratic controlled states, given all of them that are challenging activities of desks, modes, Team, Dose, Team, what do you think is the most important for Americans and why?
So? Thanks Carol and Tim for having me here. What's most important is that democratic state attorneys general are taking action to protect our states. You know, no matter who the president is, it's my job to protect Connecticut families. And right now they're exposed.
You know, all about money that essentially should come to the states or what in particular.
Money are social security numbers, banking information, important private information that's not just in the US Treasury that may be at the Department of Education, that may be at the irs. Right an unelected billionaire and his army of hackers and want to be stormtroopers are now tearing up the federal government. Nobody elected them. There's no authority or statutory basis to give them this power to go in and tear up
the federal government. It's as if I said to you, Carol, you know what is Donald Trump came down here and said, Carol, you're great. I'm going to put you in the most secure and nuclear weapons facility in the US Armed Forces. I'm going to give you the password. Just log in and have at it. Would anybody have a problem with that?
Is it what's being done, who's doing it, or that there is no transparency to it.
It's all of that, and it's the damage right now. You know, when he gained access to Treasury's central payment system, the Bureau of Fiscal Services, he had control one guy and again his army of hackers to cut off Social Security payments, veterans benefit. Right They're already canceling contracts at the Department of Education. It's real world impact right now. Money is not flowing to states. The Medicaid portal was closed,
the head Start portal was closed. Important grants and federal funding for transportation products, electric vehicles, climate related investments, all of those depending on the day and depending on the hour, they're open or they're closed.
General Elon Musk did speak during a cabinet meeting or ahead of a cabinet meeting. We took those comments live. He said that DOS is helping fix government computer systems. Overall, DOGE goal is to address the deficit. What would you say to the folks out there listening or watching right now,
who said this is what Americans voted for. They voted for more efficiency, They voted for spending government spending to go to be reduced, and as the President says, a reduction and again his words, waste, fraud, and abuse.
Yeah, they didn't vote for mass unemployment. They didn't vote for mass layoffs. They didn't vote for an unelected billionaire to wreck families in Connecticut and across this country. And if you know, it's not just a federal employee in Alexandria or Virginia. And by the way, that's important too. If mom or dad gets fired tomorrow, many families, even families that do well and listen to this show, you know, they live thirty days out or check to check, and
that family may have relatives in Connecticut. They are federal workers in Connecticut. There are nonprofits in Connecticut that are laying people off right now because they rely on anticipate federal funding that is not flowing and they have to make decisions amidst all of this uncertainty. And so families, children are being hurt right now. And it's my job, as Connecticut's turning general to protect them.
Do you have specific examples of how many workers have been affected in can etiquette, how families have been hurt in Connecticut. What can you point to as sort of real world effects.
So, for example, there are highway programs right now that aren't proceeding, that aren't going forward because funding from the Department of Transportation is not flowing. Remember, government isn't just a big employer. It's one of the biggest employers. It's also one of the biggest investors, spenders, and customers. And if the federal government is not there to buy, invest
to be a customer, then projects don't happen. And that impacts not just state government, not just the federal government, but all of the businesses, small businesses run by people in Connecticut, small business people who rely on that part of the economy.
Some would argue, though, just because it's the biggest doesn't mean it's the best or being run the most efficiently.
So what do you say to that.
Yeah, so everybody, not just at the federal level, but at the state level, should be working on making government more efficient. And I don't disagree with that. I don't think anybody does. But number one, you got to do it in compliance with the law. You have to do it in a way that's safe, that maintains the safety,
for example, of our personal information. Just because you want to make treasury more efficient doesn't mean you can affect the largest data breach in American history and expose all of our social security numbers and god knows what happens to that. Does that end up on the dark web, and then we all become victims of scams? And by the way, that all comes back to me as the state attorney general when my phone starts ringing off the hook.
So I guess the question is if there is if the government is indeed the federal government, if there are inefficiencies there, spending does need to be cut, what would you propose is the right way to do it?
That Congress exercises its power to do that. The Constitution is very clear, under the spending Clause of the US Constitution, it's Congress's prerogative to decide how the nation's resources get spent. Okay, And so Congress needs to do its job.
And if Congress not doing its job right now, and are do you feel like it's certainly not along party lines.
Congress in many respects feels broken. But you know, one good example of how broken it is is that Congress, it seems, in this budget proposal, proposes to cut Medicare for the states. Are you kidding You're going to go
after Medicare health care children? You know? I said when the federal funding freeze was announced that this is a war on the American people, And maybe that felt a little dramatic at the time, but what's clear now four weeks in is that it's a war on America's children, right Medicaid, healthcare, head start education funding, the Department of Education saying they're going to cut education funding not just for colleges and universities, but for all levels of education
if you can't meet their standards on what's acceptable not acceptable in terms of your curriculum and your programs. This attacks kids, children, families. What is the point of that.
You've been in this position since twenty nineteen, that was a few years into the first Trump administration. You were active in big legal suits against the Trump administration during that time as well. We've talked a little bit about over the last few months how this administration feels a little different because of the people they've brought in. How would you say the legal aspect of this has been different. Do you think the Trump administration was much more prepared this time around.
No, it's more lawless and more unconstitutional. And yes, it feels like they were more prepared to do the wrong thing. They were more prepared to break the law. They were more ready to break the law. You look at what are breaking law and Dan bonjiorno, Oh, well, first of all, the very first thing they didn't we sued on, which is to abrogate birthright citizenship and to eliminate birthright citizenship.
That is utterly unlawful and constitutional, unconstitutional. Look at the fourtheth Amendment and what the words the fourth Amendment say. They're very clear. If you're born on a mayor American soil, you're an American citizen period. If not for the fourteenth Amendment, Tim, I'm not sitting here. I'm an American citizen by right of my birth. And it's as if Carol as if a democratic president, let's say some future presidents said okay,
you know what, no Americans should carry firearms. It's that unconstitutional. People would lose their minds if some politicians said that, and Donald Trump is doing that with birthright citizens.
General, Town what do you think will happen to Trump's birthright Citizenship executive order and his plan to also ban transgender people from the military.
I think his effort will fail, and I think the Supreme Court will do the right thing and that it will read the Fourteenth Amendment to say and mean what it says, which is that if you're born in America, you're an American.
Is that the ultimate test of the president's policies? Do we continue to see legal challenges to the extent that pretty much everything just goes to the Supreme Court.
Look, we every middle schooler in America knows that we have a system of checks and balances. Without checks and balances, there's no America right there. If the president has unchecked power, then Congress becomes optional, our rights become optional, States become optional, and so checks and balances. These lawsuits are about checks
and balances. Congress right now isn't a very effective check, and so states state attorneys general we are a check through the courts, through the judiciary, through the federal courts on a president who doesn't respect and follow the law.
You know, it's interesting. There definitely have been some protests at you know, community meetings with members of Congress. But going back to that, as you say, Congress is there to enact the law right and help make decisions. But people in general, the president is still popular. People agree with what he's doing. So I go back to kind of Tim's question. If you look at Americans, put president and.
He won the popular vote.
This time, he won the popular vote.
He won it all, and so there are a lot of Americans who think this is the right direction for the country.
I guess I don't want to quibble with you know, whether he's popular or not. I think he's underwater according to most polls, meaning less than fifty percent. I think it's pretty clear that this country has split pretty evenly, fifty to fifty. It was a very close presidential election. I don't think most Americans who voted for Donald Trump I think. I don't think most Americans expect him to break the law and to take the Constitution and set
fire to it. I don't think anybody. And this is why I think Elon Musk and again his army of hackers are very unpopular because nobody said, turn the keys over to somebody that we didn't vote for, give them the password, give them the codes, and have at it. Do whatever you want and hurt states and people directly right now. The damage is being done right now. If the state of Connecticut is working on its state budget for the next two years right now, we'll finish that
work in early June. If they blow a huge hole in federal funding, we're in big trouble. And many states on the same position. And I would say something, by the way, really correctly.
Two.
Yeah, red states are much bigger takers of federal funding.
No, it's a really good point we got to leave with there. General Tom, thank you so much. This is Bloomberg Business Week.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Inbusters in US government bonds, starting to bet that the FED will soon need to pivot from worrying about sticky inflation to freting about slowing US economic growth. That sentiment helped drive treasure yields to their lowest levels of the year. We saw the tenure dipping to four point two seven percent. I was going to pull it up just to see where we are right now. We're at four twenty five, so we're even below that, so we continue to see
yields dipping lower. Strategists over at Morgan Stanley say the tenure has scope to fall back below four percent, a key level if the prevailing view on the FED shifts somewhat. So we wanted to talk a little bit more tim right about fixed income.
Yeah, So from more on fixed income, we head out to San Francisco, and that's where we find Karen vera Perry head if I shares fixed income strategy over at a Blackrock. Karen, good to have you on with us, especially on a day when really everyone's obsessed about the US equity market, about the results of Nvidia coming at yes four twenty Wall Street time. What do you focus on on a day such as this.
We like to look across the markets and see where what's happening in fixed income. So, as you pointed out, we're seeing the tenure at the lows for the entire year. If you recall back in September, tenure yields were at three sixty five, and they rose pretty quickly with the assumption that we're going to get a little bit higher inflation levels and more growth, and then this week that thesis has moved back down. So concerns about growth inflation
has been really sticky here. So we're just watching what's going on across the yield curve as well as in the corporate bond market. We've really seen IG spreads holding tight around eighty two basis points, but we have seen high yield this week come off a little bit in the two seventy range.
So does something like an Nvidia in terms of what we get. I mean, there's obviously been so much on the equity side of thing, the things the AIU four here that we've talked about over the last two years, although Nvidia kind of unchanged a little bit lower on the year here in twenty twenty five. But is there anything that you look for and clues in terms of what the company might say that might impact your world.
I think the biggest thing is the market really wants the earnings to be very strong, and I think the main point that people should think when they're investing in sectors like this is they want to remain diverse.
Five.
You don't want to just have all your eggs in one basket. If tech it some of the other themes don't hold up, and I think think this is where we are seeing really strong flows coming back in a fixed income specifically in fixed income ETFs. We've had seventy billion dollars of inflows this year, which is the strongest
start we've had for many years. And I think investors are looking to diversify portfolios away from some of the equity markets and make sure that they have some hedges built in there.
Okay, well, well, speaking of hedges, I'm curious about what you see as sort of the mix for ann an investor diversified and one of your friends right now, when you think about corporates, when you think about government paper, when you think about what's happening with corporates, like, what's the mix for you?
I think we're recommending people remain a little bit underweight duration. So if you think about it, over the last few decades, we've seen slowly the overall duration in the market increasing just with more and more long bond issuance. So we're seeing that sweets sweet spots still see the belly of the curve that three to call it, three to seven year point on the curve. So as people are building
in portfolios are also building in more income. So we've seen about sixteen of the top twenty five flows into ETFs this year are coming into sectors that aren't in the Bloomberg Barkley's aggregate, So they're coming into sectors like floating rate, like cash like so people are keeping things really short. Tips have been popular this year, and even
funds that have more incumbents to them. So as you're constructing portfolio, is thinking about having some of those those asset classes that are going to hold up a little bit better if we do see a lot of interest, right, volatility on the long.
End sounds kind of conservative to me. What's your read on it? This is your world?
Would you say those flows into those types of funds, whether it's tips, concerns about inflation, or whether it's more cash short term duration that it's investors saying had a good strong two years, certainly just on the equity side of things, if you look at that as a benchmark that maybe I just need to play it safe for a while and let the dust settle.
Yeah, Carol, that's really interesting. We've seen about a trillion dollars coming into money market funds over the past twelve months. So we see about almost billion dollars in money market funds, so I think people are having a portion of it
keeping that really conservative and really safe. We actually just launched two different money market fund ETFs that enable investors to access those money market two A seven style funds but in an ETF ropper, and I think we are going to see people who are really sitting in the front end of the curve and being really conservative of those allocations.
Okay, so you launched two new funds because the demand was they are correct.
Absolutely, We've seen a lot of people who are unhappy with some of their sweep options and they just want more choice when it comes to their money market funds.
Hey, so, Karen, where's money going out of in the fixed income world, at least within your I shares universe universe.
We're really we're still seeing kind of a barbell take place where we're seeing some front end and some long end people are moving to that belly of the curve, albeit very slowly. Our merging markets is actually an area that we've seen outflows this year. I think, just with you some of the concerns with what's happening with tariffs and overseas and growth rates. We've really seen people stick close to home, with a lot of flows into treasuries as well.
Do you think that changes if these tariffs are put into effect or not put into effect, Like what moves will we see depending on Trump policy from Washington.
I think we'll see people stay really conservative. I think people aren't going to aren't going to be hesitant to taking a lot of risks, whether it's with credit or with adding too much duration, So they're gonna they're going to keep it, keep it on the very short duration side of it. But I do think having at least some fixed income in your portfolio to offer that ballast. Look,
what's just happened this week. We've had, you know, multiple days when the equity markets are down, and because bonnyields have have also the prices come up and that and that provides kind of a more balance experience.
You know. In the introduction to you and right I am looking at a tenure right now at four twenty four, we have Morgan Stanley saying, uh, the ten year has go to fall below four percent if the prevailing view on the FED shifts somewhat.
Do you think that's likely?
I think it could come to pass, So let's just see how some of the data looks. What I'm looking forward to is the Summary of Economic Projections, so that's out at the next FED meeting on March nineteenth, so we'll see how they scope out their views on inflation as well as the employment situation. Right now, the FED Fund's futures market is pricing in that overnight rate getting down to three seventy five by the end of the year, and I think how quickly they do that is the question.
And at this point it looks like they're going to be on pause till later in the year.
Karen, is it safe to say, I am curious what your view is In terms of last FED meeting, it was more still concerned about inflation, but you more are starting to become more concerned about US growth slowing down versus inflation being sticky.
I think that's really the wild card. We're trying to look out for how much some of the changes in the policies are going to come through and start to impact growth. I think it's it's been really difficult to tell. So everyone will be watching the data a hawk. We'll especially be looking at some of the jobs numbers later this week and next week, and more inflation data to kind of get a better and fuller picture on that.
Do you do you see the government cuts, the Department of Government Efficiency, the layoffs just thirty seconds left. You see that having a major effect on the economic data.
It might take a few months to really show up in the jobs numbers. So I think there's you know, there's a lot of uncertainty around that, but I definitely think that the federal beyond pause longer if we do start to see to see some of those numbers come through, and then they're you know, they're going to be really worried about inflation as well. So we kind of have two sides of the coin that are going to be pulling on each other.
All right, Can leave it there, Hey listen, Karen, great to get some time with you. It is an Nvidia Wednesday, but really fixed it income always on our mind, no doubt about it.
Karen Vera Perry.
She's head of I Shares Fixed Income strategy over at Blackrock.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five these during this listen on Apple, Karplay and Android with the blue or Business Up or watch us live on YouTube.
Did you see this story?
Carol?
Most reads in the most read eight hours, most read in the last one hour. Junior banker hiring is a battle against AI written resumes. Listen to this. It's about the junior bankers who are using AI to help draft their resumes. The message recruitment firms they are onto you. Using AI becomes an issue for recruiters when the application the applicants don't properly proofread their applications. I mean, come on, guys, thank you, Yeah, got approve.
Apparently they're using certain phrases and words. It's just robust and meticulous.
Yeah, that's what AI use is. I'm curious what Sophie Nevadi has to say about this. She's the founder and CEO of Formation. It's a company that helps mid level software engineers get jobs at tech companies. Sophie joins us from San Francisco. Sophie, welcome. We're going to talk about AI and tech roles in just a second. But you've got such a great view of the hiring that's happening at these tech firms. You were an engineer at Meta and and next Door as well earlier in your career
before launching this company. What does the landscape look like to you as you look out across Silicon value right now? How are these companies doing?
Yeah, thanks Tim for having me on and uh yeah, the found founder of Formation, and we are helping software engineers land prestigious roles in some of the world's top tech companies. And we are definitely seeing a lot of shifts in the market right now. You know what, AI is really redefining a lot of the job responsibilities and
skill requirements that are needed of software engineers today. And really what's happening is that as engineers are kind of adopting uh new workflows where AI is kind of automating a lot of the repetitive work as part of software engineering, humans are now being you know, uh freed up to focus on some of the more higher level work and so you know, things like running boiler play code, or generating test cases or even writing documentation, fixing you know,
simple bugs like that. Our examples are of tasks that are being uh you know, reduced or even automated in some cases by AI. But as AI is taking over some of that repetitive work, engineers are being asked to focus more on the higher level creative skills, you know, like problem solving, architectural design and handling more complex design decisions as well as you know, navigating ambiguous real world requirements.
And so yeah, well, Sophia, a few years ago, you know, everybody was told to go learn how to code, and that was sort of the way to to get this into this prestigious career and get like a solid the solid career, especially as a pivot goes. Is that still good advice for folks who are out there or has AI taking those kind of roles that you'd learn you sort of entry level.
Yeah, so it's definitely a tricky question. So you know, right now the entry level role in terms of software engineering is changing very rapidly. AI in some ways is making engineering more accessible by making I think one of my favorite quotes about AI is that the hottest new programming language is now English, right, which is great, but people code gra you're an engineer, I like it, okay, but you know, but but I would say that right now,
that's kind of the ideal. And realistically what's happening is that, you know, really senior engineers are very much required and even more so than ever to be defining and designing system architecture and figuring out how to interpret you know, product and business needs into technical specification and really ensure that the AI generated code needs quality, security, and performance expectations and you know, your ability to evaluate uh, that
code requires the knowledge to be able to code. And so I believe that the ability to code as a foundational layer is going to remain the case for a very long time to come, and without it, it's going to be very hard to be performing at the level that is expected of you.
So, so engineering the market you mentioned, I think the entry roll in engineering being impacted maybe the most by AI. Does that mean it's it's ultimately going to be replaced by AI, do you think, and maybe the higher levels of engineering will be safer.
Yeah. Well, so AI really is reshaping, but not replacing, the software engineering role overall, and a lot of the repetitive work that is being replaced, UH is a portion of every single software engineer's job, but it is a bigger percentage of more junior engineer's job, which is you know, one of kind of the driving forces behind the huge
shift that we're seeing towards more senior UH engineers. I think that the again the at the same time, AI is making it easier for engineers to onboard and learn about learn about large code bases and get ramped up. You know, I will tell you I will always remember my first day at Meta where I first opened up a you know, million file codebase and have no having no idea where to start, right as a fresh college grad who had only worked in tiny, tidy code bases before.
The ramp up time was significant in the months before an engineer is able to be productive, and I think that time is going to get significantly accelerated with the use of AI tools.
But the way that.
You were interacting with the codebases, I think are going to change, and so we're going to have to incorporate the usage of AI tools as part of you know CS curriculum as well as obviously Formation is thinking about how we can introduce engineers into using these tools as a native tool as part of their learning journeys.
And reminded everybody you were working on meta platforms back when it was a company called Facebook.
Still struggling with calling it meta, but yeah.
You're not the only one, hey, I think for some context, for our viewers, our listeners give us an idea of salaries that are typical for the jobs that you place people in.
Yeah. So, I am incredibly proud of the results that we've been able to achieve at Formation right now, and we're in twenty twenty four, our average, we were able to help people increase their compensation by over one hundred
thousand dollars on average. And in terms of what this looks like typically on the market, there is a I would say, huge pay disparity I would say between kind of what you would call the top tier tech companies and kind of the average tech company, maybe some of the smaller tech companies, as well as companies in the
lower paying industries. I would say, and this is one of the kind of results we've been really driving at Formation that in the last year, seventy six percent of our placements have been happening at you know, the top tier companies like I think are our top companies, are
you know, Meta, Amazon, Microsoft, Google, companies like that. And at a company like that, you know, a senior software engineer, they might be looking at compensation in the range of two hundred and fifty to upwards of five hundred thousand dollars. And you know what that looks like is a base salary that's maybe starting at around let's say one hundred and seventy to two hundred k. There's typically we're often a ten to fifteen percent target bonus as that goes.
Along with that.
And additionally, you know, senior engineers are getting very substantial stock compensation packages that can sometimes even exceed the base salaries that you're getting for you know, a total compensation of over four hundred thousand dollars, and that is in stark contrast to what you see at these other tech firms, where you know, you might start with the base salary in the one twenty to one fifty range, there might be very modest performance bonuses, and oftentimes there are minimal,
if any stock compensations. So you know, landing a role at one of these companies might result in half the compensation you'd expect at you know, a FANG level.
You were talking about the fang companies, the mag seven. What about the high flying startups like an open AI or an Anthropic.
Oh, yes, absolutely, I am including these companies. It's really hard to I've just settled on the term top tier to be kind of umbrella term to include.
You include open AI in there for example, because we just would. The reason I ask is, we've just heard about the talent war that's happening in Silicon Valley and the way that these companies are coming out.
I think that every time like a major AI researcher moves from one company or other is a headline news, right, it's that big?
But is I would tell that is there?
We just got about thirty seconds left, Sophie. Is there a talent war for top engineers in Silicon Valley right now?
Yes?
Absolutely.
I would say that this is existing both within very senior software engineering roles for product positions as well as in particular AI focused roles within engineering. So this is both increased demand in kind of traditional roles such as machine learning, data scientists, things like that, as well as some of the emerging roles that are happening as a result of AI, like you know, prompt engineering, fine tuning specialists.
Right, So, parents, if you're listening, sign those kids up, got it?
Yeah?
Hey, that's what I'm thinking engineering tech, right, computer engineering?
Sephie Nevadi, founder and CEO of Formation.
Yeah, but you let me drive.
Oh, no, no, no, no, this is not a toy.
Please, I'll do the gravel.
Wat I want to drive.
It's a good question.
This is the drive to the clothes plungs for music.
Well Don on Bloomberg Radio.
All right, everybody, just about eighteen minutes away from the closing bell on this Wednesday. A slew of earnings coming your way, including n video about four twenty pm Sea time. Yes, seriously, video's happening to You're so funny. We've seen stocks bouncing around. There are loads of the session you heard from Charlie and Bill, but we will see whether or not. And vidio kind of changes the feel and the tone in the tree.
Is it time to buy? I don't know.
Is it time to sell?
I got a great guest you can answer that.
That's the question we always post to Vance Howard. Let's drive to the clothes of Vance Howardy, CEO and portfolio manager at Howard Capital Management. He's here in the Bloomberg Interactive Brokers studio. You've got the syndicator. Is there any AI or is this just a screen?
Jim.
We're working hard to make it better and better and better, and the tools that are out there now are making it more efficient and a little bit more effective. So that's kind of interesting and fun. You know, we'll live our whole lives and you're never going to get it perfect, right, But if he keeps striving and working hard, you can create something that's very effective. And I think that we have.
It's called the HCM byline. What's it telling you right now?
It's telling us to stay long this market? Data is it is, We're long this market. It's saying any pullbacks bible, you know, right now. So we're very positive. I'm real positive. On twenty twenty five. You know, the market got tired about November. We had a little run up with the election and all this kind of stuff. But it's been tired for about four months. And markets get tired. That doesn't mean anything's wrong. It doesn't mean you're headed for
a bear market. It just means it's like we call it and takes a little Spanish pause.
So I love that.
Hey listen, let me ask you though, in terms of your indicator, when there's stuff that is kind of coming at us every day. Not a judgment call, but we do have a president who likes to make comments, and we are holding We're seeing events from the oval office every day. Does it kind of muck up the indicator at all? Like how do you take out when there's that much static almost on a daily basis, that could packed industries, companies and so on.
Carol, I think that's the beauty the ACM byline. That's what it was designed to do, is to take all that noise out and just trade what actually is happening.
When there's stuff.
It even makes it more powerful because I mean we've had you know what, we've had chopped for four months straight and it's just been chopped. But the byline is strong, it's staying strong, you know. And also when you look at like the cash built up a seven tree and on the sidelines, you know, that's amazing amount of firepower for this thing.
Not all of it may come back now, not all of it. It only takes a T.
Two to move this market. So we're going to stay positive on that. But you know, with the ACM byline, what I do like about is it holds your feet to the fire. Yeah, you know, and all of a sudden you get news here, you get news there, and just just file it and put it in a file cabinet and look the byoline do its thing. As long as the trends up. You want to stay along the market, and you want to take you want to buy on every dip and look at good quality stock, good quality ETFs and trade long.
Is it ever wrong?
Absolutely, it's wrong. It's wrong about it's wrong almost thirty two percent of the time.
Okay, so almost one third.
Yeah, And but one good thing about it is it never stays wrong. It'll adjust reasonably quick. But it is not a person.
Now.
They don't make a perfect indicator.
So I'm just looking at the latest of the S and P five hundred. Right now we actually are in the green, up one tenth of one percent, so we've we're off those losses earlier in the session. Is this a dip worth buying?
Yes, it is. And you know it's a funny thing is when you look in the video and it's all the rage today and in all probability, it's going to be like a boop. You know tomorrow is going to be like, okay, that really had no real you know, everybody, I don't think it's going to move the market one way or the other because I think the video is sort of worn out and tired, right now, not that it's not a great company, not that it's not a great buy, but everybody's played the news off of for
two years now. We need a new story.
You do like the QQQ though, right?
I love the and then video is the second biggest holding in the QQQ it is, so that's a lot of those go go go names it is.
And I've owned the video in our funds for three years straight now and I'm not selling it right now, but yeah, QQQ, if it'll break out of about five forty, then you've got a new breakout on your hands. And I think that's incredibly positive, incredibly robust, and people should buy that breakout.
It's at five point fifteen right now.
Yeah, five forty right now, if it if it breaks out of that five forty, because it's touched it a couple of times, Caryl, it just hasn't been able to really thrust its way through. So you've had the momentum structurally back and off. But you you know, went from.
Just say, is that five fifteen now? So you're saying it needs.
To break about five forty right right, And so we're we you know, it came close like two or three weeks ago, and it was touching up to a five thirty nine. It tapped it tapped it and then it's been selling off a little bit since.
But so it's got to move up a little bit.
Does the does the HTM buyline? Does it look at individual equities or does it look at just sent the like sentiment and indexes like does Can you plug an equity into it and it'll tell you whether to buy it or not.
It's challenging on an individual equity or the individual etf And we have different systems that monitor and do that to help us pick out what's the most productive asset class or stock. Don't or do you given time, But what you really want to know is that the sales are in. You are the wind in your sales, and if it's not, you know, you're fighting the upward, you know, finding a nasty tide. You don't want to do.
That with some data like we got yesterday. When you know consumer sentiment comes in soft, for example from the conference board, does that change the read Well.
It doesn't change that quick because asuen byline, you know, has been positive for two straight years. In twenty twenty two, it went negative a couple of times. We pull a lot of money to cash and and it's been positive for quite some time. It's not a short term indicator, which.
But there is still that it gets you to do something right. Like you sometimes sometimes it'll tell you to pull cash, you do it, and then it'll have to tell you when to put that cash back in. So what's sort of the not the breaking point, but what's like the indicator that tells you to do.
That to come back in? Yeah, well, the byline is the indicator. I mean, if it goes negative, we're going to pull the cash. And if it goes positive, we know we're going to move back in. But when we move back in, our job is to also select the most productive asset classes of attech is it financials and energy. We've got to do that because that's how you build up AUF inside your fund is trying to catch those nice pops when you're getting some good movement.
So how do you all right? So we mentioned the QQQ that you like. Amazon is another name that you like.
I like it. On this pullback, I think it's come back. That's a very bible pullback.
It's just fund about two percent for the year. But you think this is what that you would be. And is it just because it's pulled.
Back or I think it's a wonderful company. You know, it's one of the Magnificent Seven, and the Magnificent Seven went from being overbought now it's over sold. So I think if you look at some of those seven stocks, there's some nice opportunities there, Carol, my top top pick of the year. Salesforce CRM was my top pick this year. I love it a lot well. Number One, I love recurring revenue. Their subscription base, so that means every month or not having to resell their product. They've got a
subscription base. Every month they' getting a check, right. Number two, AI is going to benefit them quite a bit. They're well managed, they got great revenue inspectation.
It's going to be an overlay right of all the A but forgive me go ahead.
No, but I think it Like what you just said, I think AI is going to make a big impact with the Salesforce, and I think that people actually be able to use it and feed it a little bit more than they can in other areas.
Stalks down about sixteen percent from hitting a high back in early December.
So you've been putting new money to it we have been.
Yeah, is there a presidential trade that you find interesting right now?
Well, you know, you go back and you look at what happened with Trump and the first term, and it was the same stuff it was first nine and twenty four or five months. It was just sloppy and everybody's trying to figure him out. And then everybody got used to it, and all of a sudden, the news that comes out was.
Like, it's sloppy this time around.
I think many would argue that it's a lot more organized and they came in with a plan.
It is, but I'm talking about the market, and I'm talking about the market. You know, if you remember three or four months when he took over, it was pretty sloppy and messy, and this same thing here. But you got to get used to the guy. He's uh, he's interesting to say the least.
So, yeah, are you done with your portfolio management? No?
I'm not.
I never am.
Now.
We can't. We can't do any thing. We can just buy indexes and hold them forever.
Do you like to pick your brain?
That's all we do here?
Like what I know, we have to sit and kind of sit.
On our hands. But I think psychologically it's better for me. Psychologically, it's better for me because can you imagine me like trying to pick time stocks.
I've had to do like wait to sell something, and it's just it's just rough. It's just rough. But we do have to be careful like it.
I get to ask the questions. So there's no you know, risky behind number.
Risk on trade you would pursue at this point versus risk off.
I would do risk on for sure, as long as it says okay, all right, good to have you back, Happy New Year, I thank you, good to see you.
It's Howard, CEO and portfolio manager at Howard Capital Management, right here in studium.
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