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Well, cross it op your list, folks.
We got that first inflation print of the week earlier this morning. US consumer prices rose at a firm pace in the month of November, in line with expectations, solidifying expectations that yes, indeed the essential bank, the FED, should cut.
Interest rates next week.
As for the so called Core Consumer Price Index, the Core CPI that backside, of course, as you know the food and energy costs, they can be volatile. Well, it increased three tens of a percent for a fourth straight month.
Tip the US Treasury rates dipping on the news with one on the inflation read and the market reaction and what it all means for US rates meeting next week and also what things might look like in twenty twenty five with us in Bloomberg News Economics editor Molly Smith. She's here in the Bloomberg Business Week Studio. Also along with Bloomberg News chief correspondent for Global macro Markets Liz McCormick,
joining us from New Jersey. Molly, I do want to start with you walk us through the CPI report, because it was kind of bang on when it came to what economists and surveyed by Bloomberg would think.
Also, any revisions to the prior.
Month, No revisions.
But that's the thing is that this was exactly in line with expectations. And if you were to just look at those numbers Zough in isolation, you think like zero point three percent on the core four months in a row. You take that times twelve, that's three point six percent. If you were to annualize that rate, that's clearly not two percent inflation. That's not consistent with that target. It's well above it. And we're thinking, why are we sitting
here talking about cutting interest rates next week? But that's exactly the thing is that we were, the markets were really bracing for hopefully it's not going to be worse than expected, and thank god it wasn't. So green light fed you cut rates next week.
So I expects, Okay, so it wasn't worse than everybody thought.
But as you said, we still have inflation.
We still have inflation.
And interestingly, I took a look back at the estimates in the Bloomberg survey just to see was anyone expecting point four nobody h estimates were zero point two percent and point three percent, So if anything, maybe we would have hoped for surprise to the downside. But again, the relief was just that it did not come in worse than expected. So I think that's just really good enough right now. Obviously, I'm sure Liz would have a lot more to say about.
That, So Liz, come on in on it. You did write about the market reaction, you track it. We've also had a treasury auction, which we'll get to in just a moment.
Talk to us about market reaction.
We did see some movement right after the data.
Yeah, No, I think Molly nailed a lot of it, because it is true that we, you know, right after the data, Carol, we had two year yields really tumble.
Now they're about flat.
I'll get into, you know, why we're oscillating around, but I think, yeah, remember the backdrop was Friday, we had that payroll report that everyone was bracing for as well, and that came out let's call it mixed enough, right, the people thought, because a lot of the Fed officials said, like, especially Governor Waller, you know, I think I'll cut in December, but I got to see all the data and he listed all the data right, which included jobs and CPI,
PPI retail sales a bunch of other stuff. So we thought, oh, jobs was okay, lean into the cut a little bit, so that pricing went up for that, and then we're like, well, we have a you know, inflation next week. And like Molly said, it was just bang on. But you know, I'm becoming a little bit of an economist.
Scary maybe, but.
I thought so too, if you like step your head back and say, wow, you know, over three percent analyzed, it's not really good number, and the trend has not been tracking in the right direction.
But I think for the bond market they feel like, you.
Know, especially because let's remember, looking forward, we have so much uncertainty.
We know President Trump won, we know there was.
A Republican SUITEP at Congress, but we now we don't really know what's going to happen, how much of the tariffs just a bargaining tool, how much we'll go through, will you know every well, even if they have all the same you know, politicians on the same party, are they going to get everything through they want?
So now the bomb.
Market's like, yeah, kind of, we don't know what happens next year, nor does the FED. Pal said, we're starting to try to model all the scenarios. So but it was enough that they think the Fed wants to get one more cut in while they know what they know, right, But then you're looking to next year.
Uncertainty and you know, Molly can talk to this too. There's a lot of uncertainty of like kind of where the end is, what is neutral? You know, what happens the run rate? Right?
I mean that's the I feel like I keep saying neutral the new black.
Everyone keeps bringing it up.
So I think that's why the market kind of rallied.
It now is like stabilizing.
But it was enough to say, Okay, we think for sure they're going to cut in December, which is next week.
Right.
Why Why though, there seems to be this disconnect between what the data says and what traders think is going to happen, Molly, because like you said, you know, we're not at two percent. Well, and it doesn't seem like necessarily this last is coming as easily as many people thought it would.
Well, I think, you know, something I always like to think about is that markets see what they want to see, and that you know, if we're going to price in, you know, before the CPI data today, an eighty six percent chance that the Fed is going to cut next week. There's not really a whole lot of room for that to not happen, Like the numbers would have had to have been so awful right in so many levels to really,
you know, nix that possibility. The other thing, though, is that easy to look at this one month in isolation and think, okay, that zero point three percent that we've now had for four months in a row like that clearly doesn't seem to indicate that inflation is coming down. But you look at this from a broader perspective where inflation was two and a half years ago and how high rates got in order to bring that down, and
that rates are still very high. They haven't really come down a whole lot, right, We've only had seventy five basis points of cuts so far after raising them up to five and a half percent, and that was when inflation was at nine percent right now inflation is in the two to three percent area. So so rates do need to come down. It's just more now about the pacing and the spacing of the cuts.
I keep thinking too about how much of the FED rate increases have they worked their way completely through the economy at this point, Molly. And then as you say, we've only had a few cuts here and we'll see, right, all of this kind of has to work its way through.
Well, that's I think what you know, central bankers are always wondering about these you know, so called long and variable lags of monetary policy. And I think there's also a lot of reason to say though that a lot of the disinflation we've seen you could probably argue you has nothing to do with interest rates and just had you know, people just getting a little bit back to normal after the pandemic distortions.
Liza, I want to bring you back in because I did think about you know, we've had some auctions this week, had a ten year right just today, we had three year notes yesterday nearly matching expectations.
We've got a thirty year bond reopening tomorrow. But tell us about what.
We're seeing in terms of the auctions and what that says to us about investors willing to kind of step up to the plate here.
Yeah, I mean today's ten year note auction went very well. You know, the yield that the auction came below the one issue, which is a sign of good demand.
And I think, you know, every investor.
I talked to, whether I want to talk to them about that or not, they bring up, well, you know, rates at above four percent, and hey, if we went back to four and a half on the on the ten year, it's a buying opportunity because they're looking kind of longer space, Like, we do have a positive total return for the treasury market this year, not a lot, but you know, a little over two percent, and they were up a little bit last year, and you figure
you're getting these, you know, coupons that are over four percent, even if the FED doesn't end up cutting a lot, so you don't get a lot of you know.
Capital appreciation.
People feel like, hey, you know, the these levels of yields.
Remember for years we had.
Such low yields and we don't know, no one thinks we're going back to this uber zero rate environment. But they also don't think we're going back to you know, ten percent. So if you can lock in getting these higher yields above four percent, that's why you're seeing you know, bouts of good demand.
But there's so much uncertainty.
You still people more are leaning towards you know, call it the middle to the belly of the curve, to five year notes, that kind of thing.
But we did see good demand today for.
Tens and then I think it's the fiscal that we really want to know. What's going to happen to the long end? What when does debtish one start to increase? Is the new Treasury secretary who has to be confirmed, does he accomplish some of the things he would like to do as far as he says he wants to reduce the deficit as a share of GDP and a lot of things. So I think that's why the jury's still out.
Just quickly, Molly, twenty seconds PPI. Can this do anything? What we get tomorrow on PPI change the Fed's thinking just quickly.
No, I think it's really matter. What PPI really matters more for now is like looking at PCE just to add a few more acronyms to the list. So we get the Fed's favorite inflation gauge later this month depends a lot on what comes in tomorrow, So that's really more.
The ticket gets factored into it, exactly.
Some of those categories feed through.
All Right, great staff, guys, both of you, thank you so much. Bloomberg News Economics editor Molly Smith here in studio and Bloomberg News chief correspondent for Global macro markets are one and only Liz McCormick out there in New Jersey.
And that is today's economic data.
All right, Well, we're getting some headlines here too, some breaking news. FBI Director Christopher Ray resigns his position. This according to Fox News. The New York Times also confirming that, saying that Christopher Ray has told employees at the bureau today that he intends to resign before the next Trump administration begins. Remember, he was nominated by Donald Trump to
be FBI director. But it also comes as the President elect has expressed that he would like to nominate Cash Ptel to serve as FBI director.
So the news out of DC certainly continues.
And that kind of gets us to some news that did evolve the FTC yesterday and a ruling. We want to get to some company news, and this is on. Albertson's filed a lawsuit against Kroger, claiming it failed to exercise best efforts and take any and all actions their words needed to secure regulatory approval for the company's proposed twenty four point six billion dollar deal. Meantime, Kroger put
out a statement they refute the allegations. They say their board is evaluating next steps and looks forward to responding to claims in courts. So kind of let the court when battle begin, or so it feels. Let's get an update on this story. We head back to Bloomberg Intelligence senior anti trust litigation Alice. Listen to her this morning, Jennifer ree here in studio. You were with the gang on surveillance. Jen, we caught up with you yesterday late breaking headlines.
I guess we kind of thought that was it.
Well, I did ask her.
I said, Jen, do you think you'll be back in our studio before the end of the year, And you said yes, I think I will.
Well, both of you are crystal.
Four hours later, she's back.
I didn't think it would be today, but you did indicate to us that you thought the deal was done.
Oh yeah, yeah, and it is done. This is now not about the deal. This is about whether one or both of them reached the contract, the purchase agreement. The deal's finished, you know, they are now in extended litigation about the merger agreement and whether or not, according to Albertson's Kroger breached that agreement. And I think this is about the remedy, the remedy that was offered to fix the problematic issues. I mean, this was a horizontal agreement
between two competitors. Both Kroger and Albertsons knew it raised antitrust problems. There was no doubt about that, and that's why they offered a remedy, because you don't need to fix something if it doesn't raise an issue. The remedy wasn't good enough, and that became really apparent during the trial. It was complicated, it was piecemeal, it didn't completely resolve the concerns, and it really had an inadequate buyer. And I think the issue here is that Albertsons is probably saying, look,
that was an inappropriate remedy. We weren't going to win with that remedy, and so you didn't use best efforts. That's what I'm guessing they're going to say the complaint and all the papers are confidential and not available, so we don't know the details.
Well, that's what I wondered if they have a legal case, because Alberson said that Kroger willfully right reached the mergent agreement by refusing to Divesta's assets needed for anti trust approval. Like, how do you you know this world? Like Kroger knew probably what needed to be done. I would assume it's loyal to get that deal done. How are you looking at it as obviously more information will come out, you know.
I think in a way it's a difficult claim. And the reason I say that is because there's a difference between the way the Federal Trade Commission might evaluate a remedy and the way a judge would evaluate the remedy.
And what we have seen in the last three years because the FDC has been so difficult, really they have really not accepted anything. We've seen several cases where the parties have gone to the court with what they call a fix it. First FTC said remedies insufficient or DJ has said it, and the court has said, no, it's okay,
and I'm going to let the deal close. So in some respects Kroger's using their judgment, abiding by legal advice, thinking we can go before a judge and we can convince a judge this remedy's okay, even if we couldn't convince the FTC. And you know, I think that it's reasonable. There's a reasonable argument that they might have had success in doing that. And so it becomes so subjective and such a difficult cause it's.
A risk, right, It's a risk. Kind of playing your card is the right strategy?
Absolutely?
Risk?
Is this typically what happens after regulators got all a deal? Do the companies go from sort of being like, hey, we're going to be best friends forever, we're going to get married to a very quick and acrimonious divorce.
It is not.
Typical, but it has happened. And I go back to Anthem and Signa Boy. They litigated for several years in Delaware after they terminated their agreement. That was when Anthem tried to buy Signa. They were blocked in court, then it was blocked on appeal, and they both turned around and said the other one breached. And the crazy thing about that was that Signa was supposed to get over one billion and a breakup fee, and then the anthem sued them for billions of dollars, and the Delaware court
basically said, company gets anything. You've just spent a lot of money litigating, and neither of you get anything. You know, you both breached, but I'm not going to make either of you pay each other a fee. And you know they it was just such a long, extended effort with so much money spent and nothing to show for it.
Listen, when these legal cases go on, I think about it, whether it's an antitrust case, go back to Microsoft years ago, Like, you know, these stocks and companies kind of twisted the wind for a while.
Is that part of it?
I mean Albertson stock was up four percent today, one and a half percent. It's down about two thirds of one percent as I look right now. But I mean, is this Albertson not loving that a stock has been kind of kicked around during this process? Like is there a financial element of like this has not been great for me? And I wonder is Albertson's damage goods? Now?
Well, you know that's exactly it. That's what a breakup fee in a purchase agreement is meant to take care of because in that interim period, that long investigation and litigation, there is no doubt the stock of the seller is hurting. It goes up and down. But the seller also the business struggles, right because they can't enter supply agreements. They lose employees. You know, they think they're gonna get bought and they're going to lose their job, So why not
take something else that comes along before they're fired? You know, we're laid off, and that is why they're supposed to get a breakup fee. And I think in this situation, Alberts may feel that they've been pretty significantly damaged. This has been a long road for a deal. They don't usually last this long, and they are supposed to get six hundred million a breakup fee, but maybe they feel they really need more to be made whole.
Why not try again again?
I mean, is it really over?
Andrew Ferguson, Yes, would serve as the agency's chair. That's right, if all goes according to plan?
Uh huh.
We just learned that late yesterday we did. Would this work under a different chair?
I don't think it would. So let me say this about the next administration. I think there's a lot of exuberance in while on Wall Street about deals, and I do think more deals are going to get closed, absolutely, But at the end of the day, big problematic deals, especially between horizontal competitors, are still going to go get challenged by an FTC, even if it's run by Andrew Ferguson. And I think this is an example of one that probably would have been challenged under Republicans.
To be sure, you're not going to come back later this week you might, we will stand by.
I was standing by for you, Jen.
Thank you so much, Jenry, Bloomberg Intelligence Senior Anti Trust Litigation Alice.
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dot com slash subscribe now. And so now let's get to that annual Bloomberg BusinessWeek feature, which you can read on the Bloomberg and at Bloomberg dot com slash BusinessWeek. It is about the fifty companies to watch in twenty twenty five and the list, Tim and I know this list well, we've done it, we look forward to It's compiled by our Bloomberg Intelligence team.
A lot of factors go into it.
Oh yeah, they do a lot of factors and a lot of people too. With more we head to London into Bloomberg Intelligence. Senior European strategist Tim Craig had Tim, we love going through this list every year and remind everybody just how it's put together and the catalysts here. It's not a list for you know, to tell investors too, Okay, these are the companies that you should be investing in for these reasons. It's sort of a more holistic approach. Talk us through the approach here, absolutely.
And thanks for having me on. So the fifty Companies to Watch are based largely off of a group of companies that we have as focus ideas, and our focus ideas are where our analysts around the globe, on a bottom up basis, sector by sector, are looking for fundamental situations where they have a really strong view, a high conviction view that they think is out of consensus, that's
differentiated from what the market is thinking. And we zero in on fifty out of that broader list that have specific catalysts in twenty twenty five in this case that we think will bring them bring the market around to our point of view. And you know, it's pretty balanced across sectors. About half our US or Americas oriented. The other fifty percenters were equally split between Europe and Asia about twenty percent or negative, about eighty percent or positive.
So there's a good balance around.
And you know, there's lots of different drivers, as you rightfully set up front, that are behind the list. You know, company about company and sort of theme by theme, and.
There are some buckets tam that they fall into, whether it's cyclical recovery AI related, which tends to hit a lot of companies nowadays, but give us a few, give us a little bit of context on that.
Yeah, it's an interesting thing because if I, if I actually juxtaposed this.
Year versus last.
AI was a big deal a year ago, but it was a lot of the big AI companies, the software companies, the LLM guys and whatnot. This year it's more geared towards the semiconductors and enabling technologies behind it.
We can get into some of those.
China was a big deal last year, but it was all negative about the property crisis.
This year, the list.
Has changed complexion from a China perspective, and it's more positive oriented about a cyclical recovery because of the stimulus that's coming through, you know. And you can also look at other topics such as a broader based cyclical recovery in Europe or the US because of lower interest rates. There's a lot of innovation and new product stories in there as well, and some other factors.
All right, we want to get into some of the names. I know it's alphabetical, but we got to get into first of all, Broadcom.
It's something that we are following in a big way. It's in the news today.
Apple developing a server chip designed especially for AI. Working with Broadcom on the chips networking technology as it's six point three percent right now, it's one of my top gainers today.
Why are you guys highlighting it?
Well, Broadcom is interesting because you think of this as a simming in doctor company, but it's much more than a simbing inductor company because it's gotten into infrastructure software and it's one of the few company these that combines semiconductors and software. And importantly, it's part of the AI theme because a lot of what it's doing feeds into the whole AI story, whether it's with Google or Meta or what have you. So you know, it's it's a
pretty intriguing story. And you know software business came from you know, their acquisition of VMware a couple of years ago.
Okay, I want to go to Tesla, another company that's in the news today, Shares jumping to a record. That's a job with the list guys, six weeks.
Yeah, pretty amazing.
How you can see the future out there at Bloomberg Intelligence.
Why is Tesla on the list this year?
So Tesla is there, and I'm going to bring in one other company at the same time. This falls into that category of new products, innovation and whatnot. Obviously, Tesla is all about electric vehicles, but importantly, as we look into next year.
There's new vehicles that are coming through an.
Important refresh of their their core cars, and we think that that's an opportunity for a lift. Similarly, Porsche. You know, we all like Porsches. I think we all like Porsches. I'd like to like a Porsche they got.
Well, I'm going to tell you you can like it.
It's just right about ownership.
Right, yeah.
Well, it's funny because back in the day, you know, these were relatively well, relatively affordable. The way that Porsche has driven its business pun intended is to go higher and higher end to where you know, the the average selling price of their cars are quite significant. And essentially what they're trying to do is attain a Ferrari like profit margin. And and they've got a number of products, whether it's hybrid related or other, that should help propel
the company along in its profits. And it's more urgents along interestingly, and it flies a little bit in the face of Tesla, clearly that's pure battery electric vehicle. There has certainly been a pause in the US and in Europe about that whole sort of transition to electric vehicles and Porsha's core.
Combustion engine business.
Is doing better than what a lot of people thought it was going to do, and frankly, they make more money in the old stuff.
Up's a little bit of a freeze there.
We're going to try and reconnect with Tim craighead of our Bloomer Intelligence team, because you want to keep talking through some of these names. He was just talking about Porsche and so really highlighting them in a positive way, their ability to raise prices. We've talked about high end in many ways doing okay, and this is kind of but it's not true across the board.
Yeah, let's get right back to Tim craighead out there in London. Looks like we've shored up that connection a little bit.
Tim.
I want to stick with the transportation theme here and talk Airbus because a lot has happened with this duopoly over the last year, including at the beginning of this year that a door panel blowing out on that seven thirty seven Max that Alaska Airlines jet and that sort of sent Boeing into its most recent struggles and new executive there and the like why air Bus on the list?
Yeah, So there's a couple of elements that play in. Part of it is just pure cyclical recovery. You know, there is continued recovery and air traffic. There's continued recovery and order flow for airlines, and at the same time, there's been a real constraint on supply on the supply channel going into the airline or airframe business. We think both of these elements are in play for twenty twenty five. And to the degree that Airbus, we think continues to
gain relative market share versus Boweing. You know, there's an host of factors that play into a pretty positive view here.
All Right, I like planes too, but I also like makeup. I'm just gonna put.
You're going to say trains that there is a train company on the list, a railroad on the list, right, Steve.
T's all right, all right, We're going to get back to that in a moment.
St.
Latter.
I want to bring that one. It's been under pressure.
It's a well known company, kind of company in the cosmetic business. If you go back to Sdi Latter who created it. It has gone through some changes. It's down I think more than forty percent this year, but it's been on quite a rally since kind of mid November, up about thirty percent.
You guys highlighted it.
Are you expecting some kind of not liquidation, but some kind of I don't know, event that maybe changes the fortunes going forward.
Yeah, well so Stay Ladder is an interesting one because you have to love the brands that make up Stay Ltder, you know, whether it's Estay Latder.
Itself or mac or Clinique what have you.
But it really does seem like they've lost a bit of an edge in some of their brands.
They're also.
Particularly skewed towards airline I should say, airport travel related retail, which continues to be under pressure. Notwithstanding air travel coming back spending all duty free has continued to remain a pressure point. We think este Lauder continues to have some potential for disappointment in the first half of the year before maybe things then come around. They've announced a big restructuring.
That will happen.
We think actually that restructuring charge that they'll take could actually be even more with a with new CEO who's coming in place, So stay tuned. By the end of next year there could be an interesting recovery. But it's a rough road in between.
Now and then.
All right, I'm getting back to transit and get to say planes make a trained, Yeah.
Please make up a train.
Doesn't have the same rings with the John Candy film Norfolk Southern.
What's going on with Norfolk Southern.
So it's an interesting story. I have a long long standing association with Norfolk Southern previously Norfolk and Western. My dad worked there for over forty years, Rest his soul, and they've had issues over the last couple of years. Unlike Union Pacific, which actually was on our list last year, that had really gotten moving with precision rail to be very precise and the logistics and it's really good for customers and it's great for the margins and efficiency. Norfolk
Southern had been lagging. They have a new CEO who's in, they're bringing management and who's much more geared towards this precision transportation. We think this is a recovery story in two thousand and twenty five somewhat akin to what we had set U and P last year.
Really quickly twenty seconds, you said twenty percent negative eighty percent positive stories. Is it always that mix or does it tell you anything about kind of sentiment or what's going on in the markets. And you just got to be really quickly if you could.
No.
You know, we try to have a balance of you know, this standard view is looking at glass half full, but we try to keep an eye out towards where do we see expectations that are run too far, too fast. And you know, our ideas range from a couple of banks, to some consumer product companies to some tech companies.
Go yes, it's a great list. Pallenteers also on it Octa Tapestry. Check it out, everybody.
Tim Craighead, thank you so much, Senior European Strategists, Director of Research Content at Bloomberg Intelligence.
You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting a two pm Eastern on applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our New York station. Just say Alexa playing Bloomberg eleven thirty.
All right, everybody, We're going to cut to the chase.
AI it is everywhere, seems to be in every conversation that we have, and just one story on our radar on this Wednesday, open AI's chief financial officer, Sarah Fryar, saying it's reasonable to eventually charge business users thousands of dollars a month for its artificial intelligence software to better reflect the value of the technology provides to companies.
I will say the best recipe for grilled chicken I've ever gotten from open Ai.
So you're ready to pony up and pay?
No, that's the free version. That's the free version.
All right, let's get some thoughts on YESAI and tech trends for twenty twenty five with us as Mike Bechdel, he's chief futurist at Deloitte right here in studio. Happy almost new year.
How are you?
Happy new year to you?
I'm great and thanks for having me.
Thank you you guys sixteen years in running your annual tech Trends report.
First of all, step back.
We always care about what goes into when somebody does a survey, some somebody does a report. How do you do terman and identify the trends?
Well, you know, Carol, it's interesting. I like to tell my client's futurists are closeted historians, and a big part of making heads or tails out of what's coming is by looking at what's been and so in our sixteen years of tech Trends We've learned that there tends to be about six areas that have really buttered enterprise bread and by that I mean, you know, made or save money. The way we interact with machines, the way we extract insights, the way we power the math behind it. Those three
buckets have always mattered. It might have been older tech. Today it happens to be things like AI and augmented virtual reality. But the point is that the categories tend to stay the same. Then there's a whole bunch, well three precisely categories that kind of require us to take a breath and make sure we don't mess up today and pursue it tomorrow. Cybersecurity always matters, Modernizing old, rusty core systems always matters. And then there's the people finance side.
So those are really the big six, and there's always something each year.
All right, Carol knows, I'm gonna go here because I just returned from San Francisco and riding in my first way moo.
Okay, just when is this going to happen?
And we're all going to be in cars without steering wheels. I have no interest in ever driving again.
We'll be honest, Well, you know, what worst future is ever resistant to giving you hard timelines on that, but I'll tell you what's him.
Because this seems to fall into the core modernization, yes bucket of your analysis.
Well, what's interesting is for this year it falls into the compute side, namely for twelve fifteen years right mark injuries and injuries and Horrowitz He famously said software is eating the world. Everything's all about software and bits. And I used to be a VC. We wouldn't look at something unless it was software as a service. Let me tell you this year in our Deloitte Tech Trends, we're really starting to see that physical hardware suddenly matters again.
It's gone from commodity you don't think about to oh my goodness, it matters. And part of that tim is robotics. Physical robotics. Eighty five percent of the world's economy is about physical stuff moving products. So much of the AI revolution is about bits and pixels and so things like but not limited to WEIMO they're going to be coming in hot because people are starting to see WHOA We've neglected the physical lived space for a good ten to twelve years. So I think it's coming.
It's coming.
This decade. How do you feel like, are you ready?
I was ready years ago. Gid yo right.
I mean nothing motivates you to like want a future like this than having kids and not wanting them to get behind the wheel.
Ever, I hear yeah, you know.
Well, let's say briefly, I would tell you one of the other things we found in our Delay Tech Trends research is that, you know, last year, the conversation was uh oh, like robots coming for jobs and you know, AI replacing.
People bring it out on.
Well, let me tell you though, it's it's more nuanced.
I think it's more optimistic than that.
What we're seeing this year is it's AI automating muck to free folks on higher order magic. So that's what you're saying, like, if I can do less of the annoying stuff, I'll have more bandwidth to do the interesting stuff. And that's what our clients are showing us.
I am curious, and forgive me, I was actually trying to go back to your report that was maybe indicating what was going to go on in twenty twenty three. But how much of AI did you feel like you guys got right? How much were you surprised by because the impact it has had, certainly on our conversations and the investment world, has been pretty powerful.
Yeah, you know, you know, Carol, I think the part we got right was that, you know, AI isn't new. There's an old computer scientist and he had this great quote. He said, AI is whatever the heck computers can't do yet. And I love that definition. It works ten years ago to work ten years from now. But I think two years ago on a report, we saw AI as one of say six movements that are really going to move
the market and you know, affect our clients. I don't think we were prepared for the fact that it would become sort of the foundation for everything.
Yeah.
And so you know, we had trends about cybersecurity, Well, AI's in there. We had trends about, as we said, physical robotics, about HR and human staff augmentation. AI's in there and there, And so I think the part we might have gotten wrong was not recognizing how foundation will be. It's electricity, it's the world Wide Web, It'll be baked into every thing.
Are you scared?
No, I'm not, No, I'm not.
I actually think technology can be a really good thing. I just you know, I'm hoping the regulatory environment kind of keeps up with it.
Yeah. Yes, trillion dollar question twenty seconds. Is there something non AI that you think keep us on your radar?
Yes?
I think the big thing we've uncovered this year that's off the AI path is quantum cryptography and cybersecurity. Here's the punchline and here's the term the headline, Why too Q?
Remember why two K?
Yeah, I had a walkie talkie on New Year's Eve. I'm ready to talk with my team in case everything went offline. Seriously, here at Bloomberg.
The bummer with y two Q is we don't know precisely when it comes, but our clients need to be ready for it.
Why too C?
Are you ready for that?
Who knows?
Mike Bechdel, thank you so much. Over to Loyd gif Futurism.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car.
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Let's get a little bit into healthcare, which is obviously something that has been top of mind for a lot of people. Give it the events over the last week, and great to have back with us with someone who has really a great vantage point when it comes to what's going on in healthcare and specifically the nursing community, which is such a big part of it. Certainly a support network within the healthcare community. Back with us is
doctor Eyman Abouzaid. She's co founder and CEO of the nursing talent platform Incredible Health, and they essentially connect nurses and hospitals. Doctor Abuze joining us once again from Austin, Texas.
Great to have you back with us. How are you you doing well?
Thank you so much for having me again.
Well, it's great to be talking with you.
There is a lot that we want to get to, but top of mind something in our planning call and thinking about our conversation with you today that we wanted to ask you about. And that is something that because you are so locked into the healthcare world, and that is the fatal shooting of the United Health executive. A tragedy, no doubt about that, but something that has also captivated millions of Americans and set off a pretty fiery online
debate about health insurance. What do you hear since that incident on your platform among the nursing community, what are you seeing about the thoughts about the healthcare system, what works, but also maybe some of the injustices within the system. Is our healthcare system broken in some way?
Yeah? So, when in speaking with healthcare workers, whether it's nurses or physicians, there is quite a lot of frustration with the healthcare insurance industry, particularly when it comes to denials and claims that aren't accepted for patients. So, I mean, some of the debate that this incident has highlighted is certainly being intensely debated by healthcare workers as well.
And I do wonder where they hope it goes from this point. Again a tragedy and no one wants to see what happened earlier this week happened again. But having said that, the healthcare system, I feel like I've been talking about it for years, for decades, and the problems that are there. We thought many thought Obamacare was a step forward, but even some say there needs to be some work there. So what is it that you and maybe those on your platform and others within the healthcare industry,
what are you hearing about? They hope is maybe the narrative or conversation that happens next.
Right.
Ultimately, what we want to make sure is that Americans and patients right get the care they need, and so anything that could be blocking that, they want to remove any blockers to access to care.
And so the insurance company is.
A very important part of that, and some of these challenges need to be addressed. We do work with health systems, specific ones that have struggled in their negotiations with United health Care and others, and we even work with health systems that had to drop United health Care as a pairer. So certainly this is intensely debated, and the debate is mostly around, hey, what do we need to do to ensure we can deliver care to Americans.
One thing that's been particularly shocking to me to learn over the last week is the way that doctors have struggled and fought with insurance companies over denials for prescriptions that they write to patients for anti nagen medication in the wake of chemotherapy, or procedures that they see as essential. That insurance companies don't provide for transportation for babies who are just born and who need special services, but that transportation does not get approved for days and days?
Why does this frustrate in this country?
Right?
I mean, look, the frustration level around this topic is high among healthcare professionals. And we've talked before about the challenge the burnout challenges among healthcare professionals. And you know, this kind of administrative load that they have to take on just to get what are considered relatively straightforward claims approved is challenging and it does pile on to the burnout challenge we already have with our healthcare workforce.
One thing you're trying to do to alleviate that burnout challenge is to use technology, especially AI to help these nurses, help those on the platform of incredible health do their job more efficiently.
What are you.
Doing with these AI powered this AI powered marketplace to help alleviate the shortage of nurses here?
Yeah, So our vision and mission is to help healthcare professionals live better lives and help them find and do their best work. And so yeah, our two side and marketplace is enabled with software and with AI and we have many features that drive the success here. Ultimately, what we're trying to do is expand the number of opportunities for nurses and then also ensure that the health systems that we work with are able to hire the talent
they need. We now work with over one million US nurses are on the platform using Incredible Health to manage their careers, and over one thy five hundred hospitals use the platform as well. We were one of the first
platforms to add AI to our platform. So, for example, we have a Resume Wizard feature that ensures that nurses can create generate a resume from the Incredible Health mobile app, which is completely free and can create a high quality resume to make sure that they're not left out of the job search experience.
All right, doctor ingman Abuzaid, We're gonna have to leave it there, Co founder and CEO of the nursing talent platform Incredible Health.
Always great to have you on the program.
Joining us from Austin, Texas this afternoon, Come.
A journal.
How about you let me drive?
Oh no, no, no, no, no drug any please, I'll do the gravel ease. Wait, I want to drive.
It's a good question.
This is the drive to the globe for me. A thing well by a young and Don on Bloomberg Radio.
All right, TikTok, everybody, eighteen nineteen minutes to go, and man, we've got a strong rally, especially among those big tech cap names. I love it because I just keep thinking about every year we go through, stop putting money there, stop putting money there.
The valuations are crazy, and then you just see investors buy it.
We'll see what twenty twenty five looks like. Yes, we got with us, back with us. Sevesti belafis CEO over at Goalfest Advisory. Goalfest Advisory has about six hundred million dollars in assets under management. Savasti joins us here in the Bloomberg Interactive Brokers studio. You have some really interesting
tech investments on the private side. I want to talk about those in a minute, but I want you to weigh in on what's happening in public markets when it comes to tech, because, as Carol mentioned, we're seeing quite the rally today. Some of the indexes at records as a result of the way tech is climbing today. Things are getting expensive or is this okay?
Things are getting expensive? It's true. We do think about that, but I think there's more room to run. It's exciting.
I mean, next year we are expecting thirty percent growth in earnings from these tech companies. So yes, it's expensive, but at the same time earnings are backing it up.
But at the same.
Time, given where we are with the economy as well, interest rates are coming down in a good place though, labor market in a good place.
But you know, so things look good right now, that can quickly change.
So when things are expensive, we do need to consider what else are we going to be buying into.
Should we be trimming, should we.
Be not necessarily selling from tech again, expected earnings next year, but selling or trimming and rebalancing for sure?
Does it matter what the Fed does next week and into twenty twenty five because there's that thinking of we talked earlier about the CPI print, and if you carry out what we've seen over the what the last twelve months I think it was or ten months in terms of inflation, we're well about that two percent target.
So why do we.
Need a rate cut if inflation is still trending well above two percent and the economy seems to be doing well. So I'm just tell me how you're thinking about that.
Great question, and interest rates absolutely matter. I do think the Fed will cut because it's not only interest rates but interest rate expectations. The FED is expecting this cut to happen in flat That's.
Not their mandate. It's inflation and.
Employment, labor exactly and employment. But they've communicated pretty well. I think in terms of the December cut that we will expect to see labor.
Look, do you think they need to cut? Do you think it makes sense?
I do.
I think we need to get to a lower terminal rate. I think we need to go down that path. Interest rates were essentially zero before they started raising rates in twenty twenty two. They've started to normalize rates. So I do think at this point because of the communication that they've given the market and in terms of market expectation, yes, I do think they need to cut in December, given that unemployment overall, it's a mosaic of numbers that we
need to look at to conclude on unemployment. But we're just one print away from starting to talk about maybe unemployment not looking so great. So companies aren't necessarily hiring, aren't necessarily laying off, and not necessarily hiring a lot either.
That could change very quickly.
The challenge, though, is inflation hasn't come down to that two percent, So even if we do see the employment. If we see the job market softening a little bit, what if we don't see inflation hit that two percent goal.
I don't know that we will. It's a different environment. And also the two percent number, that headline number, there are certain underlying elements that aren't necessarily reflected. So I don't know that. So the Fed has talked about there. They are more lenient. It was that two percent threshold that they had for a while, but they're willing to see it come down towards the two percent number.
They're not as strict with the mandate on the two percent number.
All right, So let's talk investments. You've been super psyched about talking about where you are.
Have you ever had ollipop?
No?
But I know of it.
Okay, It's like you know that the quote unquote healthy soda.
It was all over.
Was it the super Bowl? Was it the Super Bowl where we saw fridge? Oh? Yeah?
So that was one of your investments. Other investments and a r Ill and Ill really really hot defense company based out there in La A. Palmer Lucky of Oculus fame started that company. These are previous investments.
In other funds.
You've recently launched the Venture Growth Fund. What that does is it gives accredited investors through Oria's access to venture deals. What's the thinking behind this?
So part of it is going to the beginning part of the conversation where we're seeing public tech still love it, but also very expensive or public markets expensive. I think it's a good time to recalibrate portfolios. Growth has outperformed value, large cap has upperformed small cap. This has been happening for a wild stocks have unperformed bonds. This has been happening for the last couple of years and decade actually, if you talk about growth and large cap, et cetera.
So it's time to look at where else can we diversify. Private markets is one of those areas that we can look at. Back in twenty twenty when rates were very low and we saw these high valuations in the private markets, we saw that come down. In twenty twenty two, private markets were at all time lows. Public markets have since gone up. Now, I do expect and I do think
we're going to see a reversal of that. So we had launched Fund one and we made some of those investments in Olipop Core Weave, which I'm excited about could be one of the first IPOs we see next year. So we had made those investments. Now it's about fun too. We're continuing with the private market. So for clients looking to rebalance but still want that growth potential, private markets, I think is a great way to go.
So private markets, so you're notsarily speaking about private equity or private credit, you're actually early venture like companies that have not yet gone public.
Not yet gone public. For us, it's not early venture. It's the later stage growth companies that we're looking at. But when we start thinking of AI, for example, all the money that has been spent in AI in investments in AI, we had AI infrastructure investments, what's round.
Two of that or what's the next stage of that?
How is AI? Where are the applications of AI? So you may have heard of companies like Harvey for example, that they're a co pilot for lawyers or Magic co pilot for coding teams. So AI in use in a way that will actually have continued productivity gains, I think that's what we're excited.
Like that what anog starting he was starting about software right, Yeah, of AI platforms.
Yeah, the idea of like incorporating these not necessarily chatbots, but AI assistants and Salesforce is betting big on that too.
Insomnia cookies. Yes, have you had an insomnia?
I have not?
Had pretty good open late order.
Uh have you done this?
Uh yeah, yeah, yeah.
Okay, who doesn't love cookies in the middle of the night.
And within thirty minutes warm big to your door.
Elizabeth our YouTube producer, saying that she's had she had so much insomnia in college. The delivery guy knew knew her. Uh so that's a good sign. That's one of your investments too. But there's like it's like Krispy Kreme had some JB Holdings had some what happened there?
Like where what's the status of that investment?
Yeah?
So they're growing great. I mean they're expanding. We know them in Uix City in New York City. They're less well known across the US, but they're expanding. Uh so we're really excited about them. But that's another example of a CpG company, a consumer goods company similar to Ollipop that we like. So for round two, fun two, we're looking at additional consumer names. But again, as I mentioned, the aim.
Now I just want to cook.
Okay, So from drones at Anderell to cookie. You said insomnia cookies. The investments sort of run the.
Gam Can I get a drone to bring me a cookie right now?
Those are not the type of drugs. You don't want these drugs near you. And yeah, we have the friendly drones. Let's just say that.
Syvestie, thank you so much, really appreciate it. Happy holiday. It's great to have you back in the studio. She's CEO of go Best Advisory. You are listening and watching Bloomberg Business Week.
This is the Bloomberg Business Week podcast of a Little Apple, Spotify, and anywhere else you can get your podcast. Listen live weekday afternoons from two to five pm Eastern 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 Jermalone
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