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Strong payrolls report relatively so seems to reinforce the soft landing case. Let's discuss with our next guest, Mike Becky Frankowitz a manpower group. She joins us from Chicago right now. Hey, Becky, thanks for being with us. Your takeaway from today's report.
Yeah, So, today's report shows a definite moderation happening in the US labor market. It is a cooling, I would say, it's not a collapse. We are seeing some month over months softness, but some of that is welcome because now employers are actually able to fill jobs at a faster rate than they've been able to all year long. Ration is the headline A slight glide, slow glide into a more stable labor market, I would say, is what we can look forward to for new years.
Yeah, Becky, I wanted to talk about that time it takes to fill a job these days. I was reading a note you sent to us before the show, the time to fill roles has dropped to forty nine days in November from an average of one hundred and twenty two days in twenty and twenty three year to date, one hundred and twenty two days seems to me like
a tremendous amount of time to fill a job. I mean, is that just off the charts Historically what would sort of be like a healthy normal number of days for that metric.
Yeah, so it fluctuates, as you might imagine, but four months to fill a job is unprecedented. So we're sitting on about a month and a half, as you said, forty nine days today. We like to see that at about forty to forty five, So you know, it takes a month a week or so to actually fill a job in a normalized labor market, but a significant month over month or for the year today average to the month,
and that's really the hallmark of this cooling reduction in demand. Again, but for November, we saw double digit demand declines from October to November across all sectors in the economy, and the jobs report, while it looks quite robust, the underlying thing we should be asking about, is hey, what's happening with holiday hiring, what's happening with retail logistics slowed down? What impact were the strikes on the numbers we saw in government?
So when you.
Disaggregate the report, while it looks very quite positive, I would say at face value, it's actually quite moderate and gives us some signals of what to expect as we close December.
Is there any evidence that what we call labor hoarding has evaporated or is that still there?
Yeah, so we're not seeing the pandemic paranoia that I would call the labor hoarding output of back after the crisis, But we are seeing employers still hold on to their employees. We're not seeing we're seeing some increases. You heard Spotify Panera was in the news, but we're not seeing recession type increases in layoffs. They're quite stable. And so what's happening is employers are holding onto their talent. And there's a new term in the marketplace. It's called talent mobility.
And what that means is within a company, employers don't want to let go of their talent, and so they're trying to move people around based on their capabilities versus letting people go and rehiring for new skills, and I think that's great news for the American employee, as we all need to upskill and rescille for the future.
You know, Becky, one of the other labor reports we got this month that's sort of hinted at that slowdown you're talking about was that Jolts survey. That's the government's survey of job openings in the US, and it really has softened quite a bit. I mean, it was again one of those numbers that was just off the charts last year, over twelve million job openings. This past month that came down by about six hundred thousand to about
eight point seven million. How does that number job with the data you see at Manpower, I mean, are the number of available jobs really shrinking at a pretty rapid rate.
Yeah.
We saw about a twenty percent reduction from October Snovember on available jobs in the countries. That's a pretty significant reduction. I'll counter that though, by saying there are still one point three jobs for every unemployed American that's looking for work today. And you might say one point three, how
does that compare pre crisis? We were running about one point two and So when I say we're getting back into a more moderate labor market, today's labor market is starting to look like twenty nineteen, not twenty twenty, which is a positive.
When Mike leaves Bloomberg the say afternoon, he's going to go to his other job, kidding, what else could he do? How many people out there actually have more than one job at this point and has that changed dramatically?
Yeah, so, great question. We're seeing about five percent Americans hold more than one job. Some of those are multiple part time jobs. Some of those are full time plus part time, not super unusual as we go into the holiday season. That's getting us back to pre pandormic, pre pandemic averages. But you know, the holiday season has been surprising, and so people are trying to earn money. So we don't see this continued expansion in credit or you know, pay as you go by now pay later that we're
starting to see really take off with the millennials. People are needing to take on more jobs to get more money to pay for their holiday season.
Well, Bucky, where are the jobs shrinking the most? Are there any certain sectors that are cooling down faster than others?
Yeah?
So quite sobering. We saw double digit declines across all sectors in the economy, whether that's the fiery hot medical space or whether that's in it. What I will say are the top three jobs still in demand in the country are medical about two point three million open jobs in the country, followed by sales about nine hundred thousand
open jobs, and it another nine hundred thousand. And so when we say it's cooling, not collapsing, that's because there's still amazing jobs available for Americans in the economy, just not as many as we're available.
In October, he give us some advice for job seekers or even job holders, how to hold on to their jobs or what they should be looking for. I mean, like I was mentioning, Mike pretty much does it all. He's like the utility infielders, so he's never going to get fucked.
I'm mopping the floors later.
They have me, So Mike, call me when you're ready for something new. No, I would say for skills in demand again, if you want to make yourself in demand, medical is a hot space. If you didn't grow up in that, it's a hot space not just for nurses, the hot space for you CNA or nurse assistants. When you get into software, almost anyone can get certification online today to learn new skills like salesforce or SAP and so make yourself position yoursell for in demand jobs. And
you can do a lot of this online. It doesn't require you going to get a new degree. So that would be for people seeking for people holding their job. Now is a time to tuck in. You know, we're seeing stabilization and the quick rate that had been increasing, you know, hovering very high in terms of an average. Now's a good time to kind of tuck in and make sure you're developing yourself in your role versus looking
to change jobs extensively. It's probably best to wait and not make that your new year's resolution, wait until Q two when we anticipate some recovery in the marketplace.
And I guess, I guess that would also mean if like your employer wants you back in the office five days a week, you better get back right.
Yeah, that's a hot topic, John, that's a hot topic. We're still seeing and if you scope out, it's still a very tight labor market, still more jobs than people, and so this negotiation, this tug of war happening between in the officer out of the office. We're seeing that settle about three days a week with a lot of flexibility.
You know, Becky, the other big question that always comes up as well, these are the hot jobs now, but what about the future. And I kind of have a selfish reason to ask for this. I have a daughter who's a college student and heard all our friends that is the hot topic is when I graduate in two years. You know, where are the hot jobs? Is it still in that medical and tech field? Do you think are there other places to consider?
What you're really asking is when is she going to move out of it?
Wait?
Talk my kid?
A job is the question?
And we only have about thirty seconds.
Yes, I have three in college, so I understand.
Go for STEM.
STEM jobs are still going to be the future. AI, anything with data that's going to be a hot field and fairly future proof for both of our of our kids.
Good advice, AI, John, It's all about AI.
Okay, Becky, thanks a lot. It looks like Becky's working from home. I'm just saying, Becky Frankowitz, Manpower Group joining us from Chicago. Let me to call you out on that.
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All right, John, I have a pop quiz for you already, no pressure lay it on me if I give you the initials cb DC.
Do you know what I'm talking about b DC. I'm gonna imagine it has something to do with something I don't understand, which is the world of crypto. You're absolutely right, Michael. I'll just tell you well, as a thing that really scares me about crypto is the fact that it's the number one topic of the barbershop. And when that happens, that's like a contrarian indicator to me run and hide.
That's like the shoeshine Boy with JP Morgan. Well, we've got a great guest here today to explain it all to us. His name is Chris John Carlow. He is the former chairman of the Commodity Futures Training Commission and it's now a senior counsel at the law firm of Wilkie, far and Gallagher, and he is co founder of Something called the Digital Dollar Project, which is a non profit group focused on exploring digital innovation in money and future
proofing the US dollar. Chris, thanks so much for joining us today.
Mike, it's great to be with you. Thank you for the introduction.
And Chris, I try, I've tried several times to explain what a CBDC is. You know, I think most people when they think of their money, they view it on their phone or on a computer screen. They think it's digital already. But could you just sort of explain to us, in Layman's term, what the difference is between a CBDC, a central bank digital currency, and what we think of money today.
Sure, CBDC stands for central bank digital currency, and the concept is it's digital money, digital currency. That means it's on somewhere on a digital network, as opposed to Sydney simply on a bank balance sheet. But it enjoys the full faith and credit of the US government, unlike a stable coin, which may have stores of reserves of currency or treasury securities, but is based upon the credit of a corporate institution, of a private sect director.
And so what is the future of the CBDC, I mean, are we definitely in the US going to see one soon.
No, but we will be seeing cbdc's of all kinds here in the United States, whether the United States deploys a digital dollar or not, because one hundred and thirty countries around the world are currently exploring central bank digital currency or CBDCs.
We have like Nicaragua has already done it, has has it not?
Well, let's put outside small economies. China has already done it, and they already have it in two hundred and sixty million Chinese citizens' wallets.
The European Union.
Has moved from exploration to now development of a digital euro and they expect to have it in place in the next two or three years.
So see we're seeing deployed. Does it work?
China works.
It's actually quite sophisticated, it's quite powerful, and in a matter of time, China will not only use it for domestic use, but will export it around the world as an export product. You can imagine in say ten years, a digital boulevard, which is basically a white label version of China's digital yu Won. It'll have interoperability with China's digital yu Wan for payments for say building up port facilities or water treatment facilities, but it will be white labeled as a digital boulevard, you.
Know, Chris, I think one of the sort of backlashes that comes up when this topic comes up is that the government will be able to sort of track exactly what you do with your money. And I feel like, especially in the US, you know, people love their privacy. Politics. Privacy is a big issue. How big of a stumbling block.
Is that issue?
Do you think so, Mike.
First of all, it's a very legitimate concern. It's it's you know, those those reports, sentatives like Tom Emmer and Congress and dissentists that have talked about this.
They're not wrong to be concerned.
About this because the benchmark thus far is China's digital Yuan, which is designed for full surveillance of the population.
And if that model.
Were to be the basis for a digital currency here in the United States, it would be a disaster.
It would violate the.
Fourth Amend of the Constitution, amongst other things, but it would be a disaster. But let's put that in context for a second. So can a stable coin, Okay, so can any type of centralized system of value is going to be a honeypot for massive amount of data, So whether the government does it directly with a digital currency or does it indirectly by pressuring stable coin operators to suck out all the data and hand it over to the government, as as they've done with social media platforms.
The concern about privacy is the key concern. That's why we form the Digital Dollar Project to really encourage the United States to lead with its values. The United States doesn't need to focus on whether or not to deploy digital dollar right now, but it must take a leadership seat at the table that is today deciding what these digital networks are valuaboth sovereign and non sovereign are going
to look like. Because our economic competitors like Europe and our economic adversaries like China are at the table right now, and in China's case, they want to ensure a digital future of money that is safe for surveillance and save for censorship. We need to assure a digital future that's safe for democracy.
Does a central banks surrender anything in terms of monetary policy? By going down this path.
Designed right, they could actually obtain much more efficient tools of monetory policy. So take the COVID disaster, for example, what did our government do. It tried to issue paper checks to people because it had no digital means of distributing. Many people who were locked up at home, couldn't get to a bank or didn't have bank accounts. But with digital money, you could load it right onto their mobile device and do something that you can't do with cash, engage in online commerce.
So a digital currency.
Could actually be a great tool if we can get the other issues like privacy, like financial inclusion, like interoperability, and like resilience to penetration.
If we can get those issues.
Right, I can feel people out there saying, John and Mike ask them about ETFs. What's happening? Can you like jump into that? Where are we with a bitcoin ETF or whatever?
So you know, when I was at the CFTC, we green lighted the first regulated market for any type of crypto, and that was bitcoin futures in the US.
And that was five years ago.
And that market today is liquid, it's transparent, it's operating very very well, and it's fully regulated. It was on that bitcoin futures market that the SEC green lighted and ETF. Today we do have an ETF, but it's based upon the bitcoin future, not based upon the spot market. What we're talking about here is green lighting and ETF on the spot market. Thus far, the SEC has been unwilling to do it because the spot market is actually outside
the CFTC's jurisdiction. Long story which I won't go into now, but it's outside. Congress is toying, and there's some bills that would give the CFTC oversight of that, which would make the SEC's.
Job much easier. Now.
Having said that, there's a lot of reason to believe that the SEC.
May be getting ready for an ETF.
On the spot bitcoin and ethery of markets right now. And if we look around the globe, Canada's already done it, Germany's done it. There are other functioning markets that are healthy, that are well regulated, and so I think there's very good arguments that the SEC should and I think there's anecdotal evidence that they will green light that product sometime in the beginning.
Of the year.
Yeah, Chris, I'd love it if you could put your old regulator's hat back on from your days at the CFTC, because we've had such an aggressive crackdown in the last year or two. You know, we've all seen Sam bankman Fried go to jail Cz, the co founder of Bui Dance, just pled guilty. On and on and on the list goes on. Have we seen all the regulatory actions, all the enforcement actions, all the criminal actions that need to be done to clean up the space, or do you think there's more work to do?
Well, certainly we've seen the big ones.
I think FTX and Finance long rumored are the big ones in that category. I'm not aware of any other big ones. But let me put in context if I could both the regulatory actions and the criminality, and I want to if I could just go back one hundred and fifty years of another period of American history when a major new technology came along that transformed the United States,
and that was the railroad. The railroad allowed us to tie together a series of regional economies in one national economy, and so it was fundamental to our nation's progress for the next hundred and fifty years. But remember it was accompanied by a myriad of scandals and frauds in.
The sale of railroad stocks.
You know, famous names like the Trasks and others were involved in all kinds of fraudile behavior selling stocks and roads that didn't exist. We're now facing another new technology that, in a similar way, has the ability to tie together a whole disparate set of economic activity, and I believe will in the twenty first century transform finance and banking
and money itself. But it's not that surprising that it's accompanied by a series of high flying scandals which will look back to someday the way we look back to the Vanderbilts and the Trasks and others as being speculators in a new technology. But the technology itself has a tremendous amount of value.
Chris, thanks for stopping by the students today. We appreciate it. Chris. John Carlos in your counsel at Wilkie foreign Gallagher with the Digital Dollar Project. And let me give you a bitcoin quote. How about that up three percent today forty four thousand, six hundred and sixty six dollars per token.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six on Bloomberg Radio, the Bloomberg Business App, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa playing Bloomberg eleven thirty.
What are you suppose you're gonna get me.
For Christmas for you, John, I was thinking, Uh, no.
A scented candle.
Sense it candle, no offense, But I feel like I feel like your fragrance could use an upgrade.
Oh, why would I be offended by that? Michael? Anyway, this is a scented candle that we have in studio. And you know what, I take a whiff of it. You know what it smells like to me?
I got a hint of cinnamon.
I got a hint of fifth Avenue. There you go, the Fragrance Queen. It's smells. Prince Queen is with this. Linda Levy is president of the Fragrance Foundation. What's the Fragrance Foundation?
The Fragrance Foundation is a not for profit organization whose members unite and gather about the passion and artistry of fragrance.
Wow, what's this fragrance that you brought in in the so in.
Studio today, I've brought you nest candle which is called Holiday And for the first time ever in New York City, from about sixty second Street to forty seventh Street, the avenue is scented with this scent.
Oh, and it makes me want to go out and buy stuff.
Well, it makes New York City smell a lot better, as you can imagine. And second of all, this particular fragrance is in the White House right now for when they decorated for holiday. But being on the avenue is a first ever. And I would say that all of the tourists that I see walking down the avenue are really enjoying it.
Now. Is this really the kind of gift to get somebody that is so hard to buy for, like Mike Reagan a scented candle or something along those lines.
Well, John, I'm glad you asked. It just so happens that most of the frame's business is done at Christmas time. We consider the holiday season probably from about Thanksgiving time through December twenty fifth. We do about thirty five percent of the entire year in the months of end of October, November and December. It's a very big time for us.
You know, Linda, we sort of have one track minds here at Bloomberg in that whenever any topic comes up, we have to wonder, well, what's the market angle, what's the economics angle? And I'm curious how the fragrance industry fits into the economic cycle. You know, do people buy less perfumes, for example, when the economy slows down, or is it the type of thing where you know, John says to his significant other, no diamond earrings this this year,
you're going to get some perfume. You're going to get a sunny candle. How does do fragrances fit into the economic cycle.
It's a very good question because fragrance business was good before the pandemic, but it is a surprise to most during the pandemic, fragrance business has actually increased significantly, and it has continued to do so. There are a few reasons why. One reason, for instance, like this candle sitting in front of you, is people were spending a lot of time home and they really wanted to enhance their environment. Another thing that happened was people weren't really getting dressed
up a lot. They were in front of the zoom screen. So while they weren't getting very dressed up or investing in fashion, they were really enjoying what we call the invisible accessory, and they wanted some sort of ID. And the last thing, which I'm sure you could relate to is during such a difficult, challenging time, and we have much of that now too. People really use fragrance to transport themselves to another time or place like where did
you go on vacation? Or what did your grandmother smell like? Or that ant that you haven't seen. So our business and fragrance is quite robust.
Is there some sort of healing aspect to all this?
Yes, there is another reason that the fragrance business is doing well. Is self care and home spas are really important. Now you are just on the journey with me to become fragrance experts. But sense like lavender, eucalyptus and others are very spa like sense that a lot of people like to surround themselves in their home or when they're you know, taking the bath. Remember, even if you think you're not wearing fragrance, you probably are.
And are there sort of classic standard fragrances or is there sort of a fad elements to it all? Are there different fragrances that come in in out of fashion?
Good question too. The top ten fragrances for years have had a lot of names like Christian Dior, Chanel, etc. I would say that a lot of designer fragrances are up there, but hitting the top fifteen or ten. Once in a while there's an interruption. Carolina Herrera, for instance, has this one. The perfume bottle looks like a stiletto, and it's really really popular. And I also think that it's important for you to know. In the old days, as I call it, there were women's fragrances, there were
men's fragrances. But now the biggest thing is there are universal fragrances, which means regardless of gender identity, since have become popular without having those labels.
Okay, I have to ask the intersection of fragrances and yes, artificial intelligence, is there such a thing?
There is a connection. I often get the question will perfumers be creating fragrances in the future or will it be done by a robot or a computer. I'm here to say that AI will not take over the creative aspect and what we are so passionate about, you know, will artists go away? Will musicians go away? Will chefs go away?
Know?
And therefore we think, even though it's a great help to us, it gives us a lot of data because fragrances have been made for centuries, but it will not replace what is today.
You know, when I come in on my commute in the middle of the night, I pass in Union Beach, New Jersey, under thirty six the campus of Internet IFF International Fragrances and Flavors or whatever it is that is it out front. They have a part of that campus this exotic looking greenhouse with all these crazy looking plants. So begs the question where do these fragrances and scents come from?
You don't even realize it, but you figured it out. The story on fragrances around the entire globe. There are ingredients vettevire hyacinth roses all over and down in New Jersey. You saw a greenhouse that I actually went into. What IFF did is they gathered many different plants that exist all over the world and they have them living together. I've gone through there, and that brings something else. You notice there's sort of a lab or an ugly building.
Excuse me for saying, next to this gorgeous, big greenhouse. What they do is something special in fragrance. We call it headspace. So instead of using roses and wiping out planet Earth, someone from the lab goes into that greenhouse, extracts, goes back to the lab identifies it and they can recreate the scent from that rose or plant and actually not wipe out the earth. So that greenhouse is a tour, I'd be happy to take you on.
Oh yeah, no, that'd be very cool. Yeah, right in my own house.
Well, Linda, you know, IFF is obviously the one of the big players in this industry. I think a lot of our listeners are always have one ear open to stocks to buy or sell. Any other big players in the industry that we don't know about.
Yes, Iff is what we call a fragrance house, and like you said, they make all of the companies I'm going to name, make both fragrances and flavors. Another very big one is Vividon. It's based in Switzerland. They do the same and they're even bigger than IFF, I believe. And another one that's one of the top three is just merged and now it's called DSM Ferminish. So those are the three biggest global fragrance houses that make fragrances
and flavors for the entire world. There are some that are smaller, but those are the three big Should.
I stick with old Spice?
I must tell you any fragrance you wear is a good fragrance. That old spice is still going strong.
Yeah after all these years, Mike, So now you know what to get me for Christmas. A scented candle. But it has to smell like old.
Space old spice as they need to have a candle line.
That's a good point.
They probably will after hearing this today. But these are not so expensive. You thought that this candle looks expensive, Yes it does, but it's less than fifty dollars.
All right, Linda, thanks a lot, Lnda Levy the fragrance queen. This is Bloomberg.
Umbmark a journal. Now about you let me?
Oh no, no, no, no, who's going to John Honey?
Please, I'll travel ecuse Ma, I want to drive.
It's a question.
This is the drive to the clothes.
We'll drive around each other down.
On Bloomberg Radio. Yeah, on John Tucker along with Mike Reagan. You are listening and watching Bloomberg Business Week on YouTube as we drive to the clothes. Egle I Reagan pointed out that the S and P five hundred year today up twenty percent. Right now, just cross that mark a little while.
That's your shabby, John, that's your shabby.
Well, look at the tech heavy Nasdaq, as they say, up thirty seven percent for the year, now only a Measley nine and a half percent. That soft landing narrative, Mike, that that seems to have taken hold of the risk markets. And UH, with that is the backdrop. Let's bring in our next guest. Paul chris Her is head of Global Investment Strategy at Wells Fargo Investment Institute, joining us from Saint Louis. Hey, give us your perspective after the data
we heard. We just pointed out that we got the inflation expectations from University of Michigan, of course earlier, the job support. How does that all stack up for equities.
Yeah, it stacks up in a way that takes advantage of liquidity that's available in this market right now. Certainly the Treasury's decision or late in October to sell a lot of tea bills has helped a lot of liquidity return to markets. And the soft landing scenario it's always been there. It's been there all year. It won't really go away. But we think, you know, this is really
an extended rally. It's been a long rally, but we think there's going to be better opportunities for our clients to invest at better prices come the beginning of the year, or at least early in the year, because this rally is really just way over done.
You know, Paul, I was reading a note you sent us before the show. One stat really caught my eye, and that is that you write that history shows that the S and P five hundred doesn't bottom until on average six months after the first FED rate cut. So I'm wondering in this scenario, what exactly are we talking about when we when we say the bottom, I mean, could could it go all the way back to that low from last year, because that would be quite a sell off.
That would be that would be quite a sell off, and for that you'd need some sort of a shock.
But there's plenty of them lined up, whether it's government shutdown or an explosion, a further explosion in geopolitics, maybe a combination of the shutdown and the usual election year uncertainties as we as we head into the beginning of the year with not really a good idea of who the Republican nominee is going to be, the maybe not even the Democratic nominee, So there's plenty of uncertainties to start the year, and then you've got all those consumers
with their by now pay later plans since Black Friday, and those are going to start coming due in the early part of next year. We could be in for a at least a consolidation, if not a correction, and then some event could send us back down. I mean, think about how narrow this rally has been. NASDAC up
thirty seven percent, the Dow only up nine percent. The average SMP stock has not done nearly as well as those top seven names, and that gives us quite a bit of pause thinking about an economy that's slowing and really vulnerable to some of these shocks going into the new year.
Well, Paul, tell everybody what happens at the end of the year. For fund managers like yourself, is everybody under pressure to make the final push get gains before the year closes out.
Sure, there there's some there's some straightening out of books to get things nice and pretty for the end of the year. And then in January you're going to have a lot of four to one K money coming in and that's gonna that's gonna further boost the market. But the seasonals turn negative or at least neutral in the immediate aftermath of that, and then more negative as we headed towards the spring, and perhaps just as the economy it continues to weaken. This this this jobs report today
for example, again showing resilience. Yeah, maybe, but the trend is still lower. And as consumers run out of cash and they stop spending, a labor market that's better balance than it was a year and a half ago is a labor market that's more prone to layoffs. So resilience is one of those things that, like the economy, can can turn gradually gradually and then suddenly.
You know, Paul, break it down for us about you know, where exactly we should be positioning our investments right now. I mean, I keep hearing people still referring to those rates on cash. You know, money market mutual fund rates are still very attractive, especially compared to you know, pre pandemic levels where they're basically paying nothing. I mean, is it as simple as that just hide out in a money fund?
Well for some people maybe, but let me get to that in a second. We've been overweight the S and P five hundred for a good part of this year, and we're not negative on stocks. I don't mean to suggest that we are, but we took profits in tech about the beginning of this excuse me, about the middle of the year, and we think now as really the time has been the time to be a little bit
more quality oriented, a little bit more defensive. We see industrials and materials as places that look interesting as infrastructure spending and reshoring of companies gains more steam in twenty twenty four. We like healthcare yet hasn't been a participant in this rally, but we like the pricing there and we like the long term trends. So a quality orientation during a period of volatility not a bad thought. Now
let me return to your thought on fixed income. We have clients and lots of investors who've taken advantage of CDs, let's say in that four and a half to five percent range. My question for them is always what happens after that? Seas de matures in a year and you've got to skate past all this volatility. But then rates might be lower by the end of next year according to the market consensus. Would you still sign up for it at four would you still sign up at three
and a half? If we think the equity markets are going to come back strong. In other words, the problem is people get used to high yields on CDs, but those yields may not be around for as long as
the investors' goals. So you have to kind of think about this in the longer In the longer term setting, I would say as short term treasury bills here, yes, something with a secondary market if you want to skate over some volatility we expect in the early part of next year, first quarter probably that's not a bad idea. But then get out of that in time for the market to bottom, and we think that will happen sometime in the second quarter, and that's when your opportunities really broaden.
Small caps, mid caps, more cyclically oriented sectors, perhaps financials, perhaps energy again. So we think there'll be a lot more opportunities. That short term cash position that pays a little bit of interest could be useful as long as one doesn't get too used to it.
Hey, Paul, your take on AI fad djure or what.
It's one of those disruptors we talk about this economic disruptors, computers PCs, or disruptors software for the personal computer, the laptop computer. Those were all disruptors. We think AI is definitely in that category, Generative AI in particular. We wrote a report on this a couple of months ago. But these trends tend to take some time to develop, and in the meantime, what will be the path of regulatory
action regarding AI as it develops. We've seen a lot of talk about that in the press, but Congress and the President may be still trying to decide how to approach that. That's a big uncertainty. We don't think the market is pricing that in yet. And the second piece of it is look over time, other companies will come in that might do AI better than some of the ones on the market today.
All right, Paul, Always a pleasure. Appreciated, Paul Christopher at a global investment strategy at Will's Fargo Investment Institute from Saint Louis. This is Bloomberg.
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