US Payrolls Surprise With Surge

thought that's what it was like, wasn't it Maybe? Yeah, it was out of control, all right, So let's get to it because this is you know, we we talked with Zip recruiter too, and they are seeing a strong job's report so and strong jobs market overall. So let's see what Becky Frankoitz is seeing. She's chief commercial Officer, President Manpower Group North America. She is back with us, joining us via zoom from Chicago. Hey, Becky, good to

have you here with Tim and myself. So glass half full, glass half empty when it comes to the jobs market in your view, Yeah, I mean it was a blockbuster, monstrous number this morning that I don't think anyone expected, Like, we knew hospitality and leisure was coming back because our real time data told us demand had dramatically increased. We knew retail was coming back. But I don't know that anybody would have said we'd have over half a million

jobs created in January. So I would say, always good for the American worker. I mean, more jobs are good for the American worker. I think the you know, it's an economic signal that it becomes uncertain what's to come. Okay, So was this at all a surprise to you, given that you have such a good read on where the economy is, what employers are looking for, what employees are looking for. I mean again, you admitted that nobody saw this coming, but um, did this hit you the same

way it hit kind of everyone else? Yeah? So again, Tim, we knew hospital and leisure was coming, We knew retail was coming. New health continues regis nurses are still the most in demand job in our country, so we knew all of that. I would have said it was we saw demands start to come back in January, which you know is unusual, right because usually seasonally we start to see a reduction in headcount, particularly in retail as they

had just from the holiday season. But when we started seeing that start to take off in the first couple of weeks of January, we knew it was going to be a positive, a very positive jobs report, and that it was. You know, the most encouraging thing I'll tell you is the participation. Just a little bit of tweak up, but I'll take it because we need every person that wants to contribute to the economy working. So I was very pleased to see that, particularly for women. You know,

it was really funny. Becky Um Matt Miller came off his show on radio at noon is like, wait, wait, Mass, you know, pull up this chart, pull up this chart, and it was not farm Rales, and it's like, you know, we're not supposed to see this kind of job creation in January. Just what you were speaking to, right, Usually that's when everybody from the holidays gets laid off. But we started talking about this whole idea of labor hoarding something Tim and I've been talking about a lot with

our guests. What signs are you seeing of that with some of your clients and customers. Yeah, so, Carol, I'll say it's gone beyond labor hoarding. Now I'm calling it pandemic paranoia. Um, so this overhang from the tight, very difficult labor market coming out of the crisis. Employers tried very hard to attract and retain workers. It was challenging, so they are holding on to their workforce with both hands.

So that's the first thing. The second thing is we see all these headlines around layoffs, but if you put it in perspective, in December nine robust economy jobs are growing, layoffs for one of the workforce. December twenty nineteen, fast forward December layoffs under one percent of the workforce. And so even with the headlines, there's some rebalancing that's happening

for some overhiring, particularly in tech. But make no mistake, tech unemployment right now in our country is one point eight percent one point eight compared to three point four so tech skills are still still in demand. How messy is this report messy in the sense of the data is going to be revised next month and it won't be as big of a jump. Yeah. Well, the revisions have all been upwards recently, so that's that was announced this morning as well. Um, there's probably some noise tim

in it. I heard there's some noise around strikes, people coming off strike, but it's gonna be hard to adjust a half you know, million UM work job creation report down too far. Even if it's adjusted, it's still going to be a blockbuster report, way above what you know, we we anticipated, and I think, um, it will be interesting to see now if this is enough again to bring workers off the sidelines, particularly in hospitality and leisure.

You know, another element of of you know, the pandemic hangover is we're seeing companies start hiring in advance, in advance of actually consumer activity, retail, hospitality and leisure getting ready for spring, and then they have a problem because they have to attract those workers that left boomerang workers back into the sectors that shut down during the crisis. So I think it's I think it's going to be

a noisy path forward. Um. Possibly a little choppy waters, but this is an amazing way to start the year. One area that has gotten a lot of attention from US and from a lot of the business press, of course, has been tech layoffs. Over the last few months at companies like Meta, thousands of people laid off their alphabet, Amazon and more. UM, and I'm wondering if if those are how how you look at those in the context of of what you're actually seeing when you look at

the data. Uh. I know, we spent a lot of time talking about them, but we don't yet see that showing up in the data. Well, I mean, because it pales in comparison to how much hiring happened in that sector. So it's pandemic hiring. But are those people getting rehired easily abs so? I mean again, tech unemployment is one percent, so they are getting scooped up either by other you know, midsized tech companies, and every company is now a digital

tech company. So we're seeing people with tech skills hired in retail, hired in hospitals. I mean, every company these those skills, so they're quickly being reabsorbed into the job market. Hey, Becky, I do wonder though, if maybe we're starting to see wage pressure subside a little bit. Is that making it easier for companies who might not be so sure about how the business market plays out this year that they're going to say better still to kind of hold on

to that worker, even if it costs a little bit more. Yeah, So, Carol, interesting on the cost a little bit more to hold onto because you know, our data would show that if you change jobs, and make note the quit rate has not gone down in nineteen months below four million a month nineteen months, So the American employee is continuing to have confidence in their own skill and the labor market. But it has been amazing to me to see the

confidence people having their ability to get pay. If you change jobs in the last year, you got, on average, and this is average blue collar, white collar, the whole spectrument increase in your pay. If you state at your company, you got on average a seven percent increase in pay. So while we're seeing muting in the overall numbers, actually says to Billy, I wouldn't call muting stability at point three and overall wages. That we're still encouraging the labor markets,

encouraging people to change jobs. Is that unusual, that jump and that difference. I mean, I would assume that if you leave a job, you tend to typically get paid more. Just got about twenty seconds. Yeah, what's unusual is the fact that we're not saying any slowdown, even with all of the coverage on concerns for the future economy, No slow down in quits all right. Always great to check

in with you, Becky, have a great weekend. Becky francoit's chief commercial Officer, President North America at Manpower Group, joining us via a zoom from Chicago. Quit rate, she said, right, hasn't come below four million, and I believe nineteen months. Incredible. Yeah, that's interesting with the Jolts data earlier this week, right shows the strength of the worker. Um, you are listening

in watching Bloomberg Business Week right here, I'm fry. This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus a business finance and tech news Bloomberg Business Week Podcast with Carol Messer and Tim Stinebec from Bloomberg Radio. Well, the new ways too of Bloomberg Business Week. It is out on newsstands online at Bloomberg dot com slash business Week. Of course, also on the Bloomberg terminal. We talked about

the domestic cover story yesterday. Well, the international cover story is about the billionaire sun coming for w w E The Billionaires. Shot Khan you may know him, of course, is the owner of the National Football League's Jacksonville Jaguars and the English Premier League's Fulham Football Club. The con family is not worth, by the way, about seven point six billion dollars. The Sun Tony KHN with more on the story. Here's Bloomberg reporter Kimbasin. He's with us in

the Bloomberg Interactive Broker studio. He's got a great beat. He covers celebrity and athlete business deals. We also got with us the editor of Business Week, Joel Webber, both joining us here in New York. So Joel, um, My, my big first question is wrestling real? All right? That was gonna be my big questions. How about I improve upon your questions? It is real, Kim? Is it a pro sport? Is it? It's it's a It's a professional

form of entertainment. That's that's for sure. Like that. Yeah, And and what I love about this it's actually a huge it's called it Sports Rights business. Right. W w E has owned this thing and has consolidated any passed for uh, except there's a little bit of turmoil at w w E. And along comes an upstart who happens to have a little bit of money to throw around.

How is he competing with w w E. There are billions in broadcast rights at stake here and w W is going through one of its most volatile periods in history. Uh Tony Khan's brand, it's called a e w All Elite Wrestling. They're trying to provide fans with an alternatives, something that not for lapsed fans who used to watch wrestling and then got sick of w W. Give them something more, something more, something fresh, something new, something else to watch besides the same product that's been on the

on the air for so long. But part of that includes bringing some of the people over from w W E. So how is it fresh? How is it new? There's been quite a bit of a talent war, so they're they're hop scotching back and forth between these these two brands. We have them sourcing from the indie scene as well. These are like the much smaller little shows that happened. There's thousands of wrestlers playing these tiny shows across the country in places like you know, bingo halls and nightclubs.

Now that sounds cool, Yeah it is. I've been to a couple of those. It is pretty cool. It's like a couple of dozen people just watching, watching them wrestle in the ring they set up there. Okay, is this like the XFL going after the NFL that that one didn't end? Well, I know by the way the new XFL maybe they're working with the NFL. But now this is uh the most well funded uh person to go against w w E in twenty years. So back twenty years ago, it was it was Ted Turner and w

c W the billionaire going against the other billionaire. Now this guy, Tony con also has that kind of financial backing. Courtesy of Dad courtesy a Dad curs courtesy a shot. Okay, you kind of dodge the question here. You've watched a lot. Is it a sport that the cons version of this elite wrestling? So if I'm gonna go watch all elite wrestling, when am I gonna see? That's going to be different than w w E. A few big things here, more swearing, they will just curse on the microphone. Is more and

more PG, more blood. There's definitely more violence there, and more folding chair shots like right in the back just black boom out. These are these are? I mean? So there's like actual uh wrestling there. There's definitely more wrestling. I heard this anecdote from from one of Vince McMahon at ww's former wrestlers. He went by Daniel Bryan there and he said that Vince called him up one day and was like, what is a E W doing better

than us? So he spent two weeks watching all the a W programming to see what was up, and he concluded that a W just has more wrestling. They played, they placed more of an emphasis on like the craft of the show in the ring. W W has more different kinds of segments, a lot more talking. And he said, you know, it's like watching a wrestling show with no wrestling. How many hours of wrestling did you watch while reporting this story? I went to two shows to watch them

live and backstage and everything. That was fascinating. Uh and yeah, a little a little bit more, a little bit more.

Again he didn't answer, but is there an opportunity right when we've seen this before in kind of the corporate world, right when one company could be is the leader and they run into some trouble, whether it's financial problems or whether there's allegations against the CEO for misbehavior, UM and w W E is at that point does that provide especially since A e W has a pretty dp pockets, an opportunity, a real opportunity to move ahead. It says

there's an inflection point coming up. Both their media rights are coming up next year or so, and these are going to be the biggest deals ever for the both of them. So a bunch of names are being floated right now. The battle lines are are WW is with NBC Universal, which is on my Comcast, and then the A e W is with Turner, which is owned by Warner Brothers Discovery. Uh. But then when when these rights

are up forbidding, that brings in everyone else. We're talking you know, Amazon, Netflix, We'll see who's really interested in some wrestling programs. And that is ultimately I think one of the reason big reasons why I was interested in this want to put on international cover is we are at a moment where sports rights only go up, right, the value of these teams only it's like goes up by billions. Really, it's like, oh, it used be three billion.

The rights are why the billionaires are buying them, right, And so if you can keep this off of someone else's network and maybe get yourself a buck in the process, it's kind of seems like an ingenious strategy, and in this case it basically like he concreated something out of nothing, right, um, and then goes poaching some talent. Uh so, how how does he have to uh, you know, broker, what's it gonna look like when this media circus comes to town

to you know, feast on these rights. That's actually the reason he formed it is because he heard from the guy who at the time ran T and T and TBS that he was about to, you know, consider bidding a whole bunch of money, like more than a drellion dollars on w W rights for Fridays, and he said, you know, maybe there's a better option here. I think I feel like there's man those rights ended up going to Fox and now T N T and TVs they have his his show. I think the big ones here

are that of Warner Brothers. Discovery is likely going to want to keep them, so we'll see how high that goes. Speaking of bidding and buying, our Sebastian Escobar, who is directing our show right now, reminded us that Tony Khan talked about or was considering, right maybe buying w W E is that still a possibility. Just got about thirty seconds. He will need a little help with that. I don't know if he can afford right now? Does dad have

deep enough pockets? And analysts expect it to be up to eight billion dollars, so he would need cool Let's pull it up, sell the footballs in there by the rest sports or entertainment. Have we decided sports entertainment to put together sports entertainment? He's right right, all right? Thank you Sbastian. Also bringing it on it, Jill Weber, Editor Bloomberg Business Week. Here in our interactive broker studio along with campusy Reporter, covering the cool stuff celebrities, athletes, wrestling,

and more here at Bloomberg News. This is the international cover story. Find it on newstands. If you're traveling outside the US, you can find it online at Bloomberg dot com. Slash business Weekend always on the Bloomberg terminal. This is Bloomberg Radio. You're listening to the Bloomberg Business Week podcast. Catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg Business app band you Doo.

You can also listen live to our flagship New York station, Just say Alexa play Bloomberg e Love and Dirty Well, getting a bit of a brakgomblooment today is the tech trade because it has been on a tear this week. You did have the tech bell Weather's, Apple, Amazon, and Alphabet posting results that showed an economic slowdown is throttling demand for everything from electronics and e commerce to cloud computing and digital advertising. It was a little bit of

a bummer last night. It really was. Interestingly enough, despite the fact that you're seeing on the performance from Alphabet in from the Amazon, Apple shares are actually higher. Let's try to make sense of it. We got Bloomberg News technology reporter David Alba joining us on the phone from New York City. David, good to have you with us. UM. I want to start with just your big takeaways. How we look at this holistically, taken all together. What's the

story that it tells. I think it tells the story that tech companies are not immune from broader economic slowdown. UM. You know, tech is usually seen as this industry that holds strong throughout um all sorts of ups and downs

in the economy. But even these giants like Apple and Amazon and Alphabet um were hit by by the broader economic conditions, and you know, I think that it's pretty significant, um that the some of these Apple is was reporting the first quarter of um uh, not the sort of holiday quarter, but Amazon and Alphabets were and even then, you know, when there's usually high demand for products in the holiday quarter, that that was not the case this

this this go round. I think what's interesting too, though you know, they were down last night. Apple's up two point six percent today. Uh, And we were reminding everybody that, you know, you really do want to listen to the conference calls and see if we you know, either how they try to walk back the quarter or provide some optimism. But it's not like they fell off a cliff either. Google is still down about three point six percent, and Amazon and mental check on the trade it is down well,

Amazon's down nine So that's pretty severe. Um. I don't know, is there a net net in terms of what we got from the three of them? Yeah, I mean I think yesterday we saw you know, the company executive sort of giving out the excuses that you know that for

their businesses performance. You know, Apple talked a lot about how because of the strength of the dollar and sort of their supply chain issues UM, which are global those were impacted UM alphabet UM, you know, sort of talked about UM how economic headwinds were impacting the business, UM as its search products, of maturing and it it really tries to spin things forward, emphasizing their AI products and

and talking about what's to come. But I think another piece of context here is that these companies are sort of down relative to the year ago period, which was when everyone was sort of you know, still in the middle of the pandemic. There was like flush demand at that time, and all of these companies were flying really high, and so comparing it to this time one year ago, I think is is kind of a tough comparison when you when you think about it that way. Yeah, that's

a really good point. Um, Davey, I'm not in trouble making sense of Apple today. It was I'm going to read what Mark Irman wrote on the live blog here, okay, because this is like, you know, Mark knows a thing or two about Apple. Apple had an overall miserable quarter. Revenue dropped five percent year over year, including declines for the iPhone, Mac wearable's, home and accessories. The miss Wall

Street estimates for those categories along with overall revenue. Uh yet shares up two points six right now, that's resiliency. What's going on. I think it just speaks to Apple's reputation as a company that you know, for all intense, like basically it's just so in the mainstream, um wild demand was not exactly you know, sort of what they wanted in in the last few months. It's something that

they can sort of be picking up. And I think that the stock market knows that Apple is just a very strong company and so we're seeing sort of the

effects of that. Now. Yeah, it's interesting. Um, I'm thinking about the nasdac man the pop up, you know, yeah, the new nasdack Uh, Kathy would call it, which is kind of interesting, right, And I mean, I don't know, how do you you know, Davy, It brings up a good point him because Kathy does look forward to who will be kind of the next players that will be very dominant in some of the developing technologies. And it does make me think about you know, Apple, Google, met up,

met is going through its own transformation. They got a big pop this week, but you know, time will tell whether this bet really makes sense. I'm trying to pull this up on the go ahead, David, I was trying to pull this up on the terminal, and I think probably you and I are going to go to the same place, which is the comments from UH from Alphabet,

from Google CEO, Alphabet CEO Sunder. Yeah about AI. You know, I think there are a few things here, UM half companies for better or worse or obviously at the cutting edge of you know, sort of developments that underpin businesses moving forward. And you know UH Sun Dark, which I talked a lot about. Alphabet's UM commitment to AI so much so that they're actually breaking out Deep Mind, which is it's AI sort of division UM in the next company earnings as its O and UH line on on

the company earning support UM. And they're also you know, making all sorts of moves like investing in Anthropic, which we reported on today. That's sort of an AI startup in this new field of generative AI. UM. If if you're not familiar with that, UM, think about chat GPT. That's generative AI because it generates text and and and other content based on a prompt UM. So that's kind of spinning it forward UM. And yeah, I think you know the future for these companies, UM looks possibly good.

The other piece of context is just that there was so much on these earning calls about efficiency, about sort of UH slowing hiring, UM, making more strategic UM moves. As as the next year comes comes UM towards us. You know, they Mark Zuckerberg talked about kind of this being the year of efficiency for Facebook UM and and I think that that's something that the companies will really double down on, especially after we saw these waves of

layoffs in the past few months. Well, I want to point to the story, and you mentioned this, the story that that you and and Dina wrote about Google investing almost four hundred million dollars in that AI start up. Four million dollars. That's that's serious money. I mean, that's that's like, it's not you know, pivoting to the metaverse money, but it's but it shows that that Google is taking

this very seriously. Yeah. Absolutely, And you know they've also talked about their large language models, sort of their answer

to chat GPT coming out in the coming months. UM. You know, million is a lot of money, that's true, but it's actually pretty small when you think about Microsoft's investment in open AI, which makes chat GPT, which was ten billion, you know that that we reported just last month, and that builds upon earlier investments of about a billion, so, you know, I think another thing to think about is how these giant tech companies are partnering with smaller AI

startups to sort of stay at the cutting edge and forefront of these buzzy new AI products UM which also in turn needs them for computing power and resources and cloud cloud capabilities, that sort of thing. So it's kind of a happy partnership for for these companies. At this point, AI is not a new thing. What just happened though

TV and just got about thirty seconds. Yeah, yeah, you know, I think is that these chat spots have just made waves, and I think that they've been marketed very smartly UM and taken hold on social media. The underlying technology is actually not that new, you know. If you look at AI experts talking about these chat spots, you know they've been around for a while. But the fact that anyone can use chat ubt now and millions of people around the world are UM, I think that speaks to sort

of it really breaking into the mainstream these days. Well, we definitely are talking a lot about it Uh, Davey, thank you so much. Davey Alba Technology putter up Bloomberg News on the phone from New York City. This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus Blombo Business Finance and tech news. The Bloomberg Business Week Podcast with

Carol Manser and Tim Stinebec from Bloomberg Radio. Yesterday, we had a very deep dive with Kathy would of our investment. She was all over her big ideas of fifty pages of big ideas, and it included five innovation platforms that are converging to create unprecedented growth trajectories. One of the platforms public block chains. In our weekly Crypto segment, our next guest test some thoughts on building better blockchain hardware. He's Michael Gao, founder and CEO at the cryptography hardware

tech company Fabric Systems. He joins us via zoom from Lafayette, California. Michael, good to have you with us. How are you great? How are you? I'm doing pretty well. So explain what exactly you do at Fabric Systems. Because when people think blockchain, they don't think of something physical, but you're working on building a better, better blockchain hardware, and that of course

is physical. Well, yeah, that's exactly right. So what Fabric Systems builds is Fabric is building much faster computers designed from the ground up, specifically for next generation cryptography algorithms. And when I say cryptography, I mean cryptography and not cryptocurrency. And there's a very very big difference there, and we're gonna talk about that. We'll dig a little bit deeper, um into what you mean specifically, and more of what

your company has involved in. Yeah. Sure. So the main algorithms that we accelerate are zero knowledge proofs and fully homomorphic encryption, and basically those are mouthful. But what zero knowledge proofs are is, imagine that you walk into a

liquor store, right, and let's say they card you. You show them your driver's license, but basically you're showing them your home address, you're showing them your real age, You're showing them all these things that you don't want to show the liquor store clerk, right, And so what zero knowledge proofs are is it's the equivalent of showing just a certificate that a certain statement is true. For example, I'm over twenty one, and this has a host of

applications in and out of blockchain. In the blockchain, it helps the blockchain link up to real world applications like credit scores, insurance scores, you know, bank accounts, things like that, and makes blockchain actually be able to be useful for real world applications. But even outside of the blockchain, you can think of it as a new point on the privacy trade out curve where you know, government regulators can

enforce laws without invading privacy. And so it's it's this really exciting set of algorithms that cryptographers has developed really really recently and have just gotten practical enough to the point where people can deploy them. Where are you seeing this technology deployed right now? Right now? It's on the verge, so you know, it's not really anywhere right now, And the main reason is that it's just not fast enough.

So in order to prove, for example, that your creditsc is at least seven fifty or something like that, you would have to wait twelve seconds on a really really powerful Intel processors. So that's why we're building, you know, much faster computer specifically for these Well, it's interesting too and I think we lump everything together, and I mean

blockchain with anything and everything crypto. There are distinctions to be made because I do think about, you know, the impact of the f t X fallout, UH and coming undone and Samuel sam Bankman free to what impact that has had on you as you move forward and on the work that you're doing. It's actually a tremendously positive impact. The thing I always say to people is that crypto

is a problem for regulators. Cryptography is a solution. So for example, you know all these centralized exchanges in the supposedly decentralized finance world like f t X. You know all these exchanges that were essentially taking people's money, promising them an interest rate and not being able to pay it. It's a classic Bonzi scheme, right, and that has nothing to do with cryptography. So what cryptography is is a

solution to those problems. So if zero knowledge proofs have been around, and you know, exchanges were using them in the time of the ft X, then exchanges would be able to prove that they have a certain amount of reserves and they can cover all their liabilities. That's actually a solution, not a problem. We should note that Sam Bakman free is still awaiting trial at this point. Uh, but a lot of the allegations that that you mentioned have been allegations that have been made by officials at

this point. Um, go ahead, Carol, No, no no, no, go ahead, Michael. I was wondering about the hardware here, because when when we think about hardware that's using crypto, we think about hardware from from like the big huge names right in video. Um, and you think about computers that that use those chips. Where is your what is your technology when you say you're building a better computer, what are you building and who who are you competing with? And how can you

compete with those companies? Yeah, we're I mean our main competition, as you said, it is in video and we're basically the video of cryptography. So in video focuses on video games, on AI, on graphics rendering, and on a host of very important applications. And what we do is we focus on cryptography, and by building the computer specifically just for cryptography, we're able to achieve better performance on those algorithms at the cost of, you know, for example, being worse at

a I computation, which we don't focus on. So talk to us about time development and kind of you know, it's interesting. Let me go back for a second, because I think when all of this was starting, this was like pre pandemic. Blockchain made a lot of sense to me because I just think about that there's a lot of documents or transactions, there are things that we could cut out middleman middle people if you will, um that it makes a lot of sense. But it feels like

there hasn't been as much momentum. Has there not been? Yeah, So the problem with the blockchain as it stands is that there are all these unfulfilled promises that were promises made at the outset. When I got into a bitcoint back in you know, we were all talking about this that you know, one day we would cut out the middleman and you know, financial transactions and credit cards and all these things, and there were just wasn't the technology

from the cryptography perspective to make that happen. So, for example, Bitcoin can process a couple transactions per second, Visa can process the hundred thousand transactions per second, and only by using these next generation cryptography tools like ser knowledge proofs, can we actually use the blockchain and actually hit those

you know, transaction throughputs to name just one example. Right, but even in the traditional finance industry, if you think about margin engines and under collateralized lending and all these different things, you know, you can't run those on a

smart contract right now. The computational limit is just too low. Um. So that's why we're building dedicated hardware to actually fulfill the promise of blockchain, because in the absence of being able to fulfill those promises, the blockchain space has been you know, kind of written with bad actors and scams and frauds because they can't really make something that's actually useful. And so we actually want to make blockchain. Hey, Michael,

you're joining us from California. What does your supply chain look like? Where is it? Where do you get where do you get components? Yeah, so we have a really really great relationship with major semi conductor fabricator in Taiwan. I'm sure you can think of which one that is. Does it does it start with the T, start with the t uh and then you know, those chips get fabricated and sent to um contract manufacturers in Southeast Asia, and then after that, you know they come back uh,

you know, in fully assembled system. For does the supply chain at all go through China? No, that something is that intentional for you? It's really important in these times, you know, like when when everyone's trying to decouple their supply chain, you don't want to be the one left holding the bag. Hey, Michael. One thing I do wonder um is in terms of regulation and oversight, and sometimes maybe we do need a middleman to make sure things

don't go astray. So I do wonder what needs to be in place regulatory wise for blockchain to really find kind of its full potential. Oh, that's a really good topics. So basically we've actually been talking to some regulators about this, but there's potential for regulators and actually blockchain applications to

cooperate and strengthen regulation through algorithms. So one example is, you know, the SEC could require people to post that zero knowledge proofs that actual you know, financial statements are accurate. They could require people to provide zero knowledge proofs of leverage, or they could provide, you know, zero knowledge proofs that if the bank goes through uh, you know, major financial calamity,

that it will be okay. Right, So you can even conduct stress tests using zero knowledge proofs, without having to reveal your sensitive positions and all that information, and without having auditors just standing in the room looking at you. Right. So it's it's really powerful. I it's a huge opportunity for regulators to finally be able to enforce many laws that otherwise are unenforceable because of privacy concerns, because of

cost concerns, because of industry pushback. You know. It's a case where we can cut the red tape, you know, but still have regulations that really have teeth. Michael, thank you so much, really appreciated. He is chief executive officer of Fabric Systems. Joining us via zoom via zoom. Excuse me from Lafayette, California. You're listening to the Bloomberg Business Week podcast. Catch us live week days from two to five pm Eastern on Bloomberg Radio, The Bloomberg Business and

you too. You can also listen live to our flagship New York station, Just Say Alexa play Bloomberg E Love and Dirty Journal. Yeah but you let me drive. Oh no, no, no no, no, honey, please do the revels. I want to drive. Good question. This is the Drive to the Clothes on Bluebird Radio. All right, everybody. We've got less than seventeen minutes left in today's trading session, and it's been an interesting one in a week that has just

been full of so much. Of course, a monthly jobs report, and you are seeing stocks well off their best levels of the S session, the tech names taking it hard, hardest hit really, if you will, at a percentage basis, down about one and a half percent. Tim we're still up more than three percent on the NAZAC for the week over and up one point six percent on the S. I'm confused. I'm confused about the reaction today's jobs number

between that the other economic data that we got. We get the Jolts data that we got earlier this week, and of course we heard from FED J. J. Powell. It seems that, you know, certainly the bulls are winning, and given that strength of the job's report today, I'm surprised to see not I'm surprised that I'm not seeing more of a sell off. I think, you know, talking about this this earlier with Scarlett Um and also with

John Tucker downstairs. Yeah, he made a good point that wage growth was in line with expectations, and maybe that has people kind of tempered. That's one of the things I heard Mike McKee talk about earlier that in terms of wage gains, and I think Molly mentioned it to up but less than the month before. And so if we're seeing those wage pressures go away, that would be a big thing. That's the inflationary component to it. But how does wage pressure again, you always remind me this

is backwards looking. Uh, how does wage pressure go away when there are still almost two jobs for every one person? Looking, people can just easily jump from one job to another job, and that's the best way to get a raise. If people are getting nervous, maybe they don't push so much. Um. But let's see what it all means potentially when it comes to the investment environment. So let's get to it. Let's get to the drive to the clothes. Vance Howard is back with us. He's CEO and portfolio manager at

the fee only registered investment advisor, Howard Capital Management. He joins this via zoom from Roswell, Georgia. Hey, Van's nice to have you back with Tip and myself. What a week. I am exhausted. Tim's exhausted. It's a little crazy. Um, how do you see all of what came out investors, including the big tech earnings, the f O m C meeting, the jobs report. Sum it up for it what it means for potentially the markets, financial markets. I think it's great.

I mean, I think that we've turned the corner. You know, our proprietary indicated the h c M buyline went positive about two and a half weeks ago. This is it went negative in January two. So we've sat in a whole lot of cash up until the past two or three weeks, and we've been buying the S and P wanted bo The two day move an average show on a technical basis, I think you've got to put aside a lot of the news out there and start trading what actually is happening in the markets, which is what

we're doing, and we're buying. We've been buying a quite a number of things. We've moved from about to cash now to about in cash, and we'll continue to buy into any dips that we're seeing. You know, today's sent cash cash. How quickly did you move on that all? About about five to ten days, And so we started buying quite a bit of things over the past two weeks, and we've even stirred buying back the bonds. Our bond indicator went positive too, so we started buying you know,

emerging market bonds and long term treasuries. What was it that shifted in this rally, Because we've seen other other rallies over the last year, and they've been false starts. We're not saying that this one's not well me either. I'm not saying that either, but you have to trade what actually is going on in the trend has actually changed.

We did have a false start about the you know, right after the February March area when the market wanted to rally right up after that big sell off, But other than that, it's pretty much been kind of downhill the whole way down, with a few minor adjustments, you know, with a few minor buying opportunities that would present themselves to see a short term trader. But this is the first time in the whole year that we've seen the longer term trend turned back up, not the short and

the intermediate term, but the longer term trend. That's a very very positive indicator right there. And I can tell you right now with the eh C M bodolne being positive, your odds are seventy three percent, chances going higher twenty seven percent. We get whipsaw, so at a seventy three ants of moving higher, you take that trade, you start buying.

All right, you gotta take a step back. For those who maybe didn't hear you last time you talk about this HCM by line, I know it's proprietary, but what can you tell us about it? Um? You know that it's an indicator that looks at what so that our audience kind of has an idea of, um, what maybe triggers it? Yeah, nothing complicated. It's a trend indicator. It's just it's a very uh, very sophisticated trend indicator that has a high level of accuracy. And like I said,

it turned negative in January. January of two twenty two. Of course we sat in a whole lot of cash, but we're still a rotten year for everybody, even if you're sitting in a lot of cash. And then of course, but this is the first confirmed BOS signal that we've had on the longer term trend of the h C on boline. This is a very positive thing. So all this news that's coming out, I tell people, you've got to trade what's happening right now, because we don't know

what's going to happen tomorrow. Yesterday's gone, the trends up, you gotta start taking trades. Well, it does happen next week, because we do. Hear from a lot of FETE officials next week, including j Powell. And I've got to think, given his reaction to financial conditions easing, his his reaction to rallies over the last year, sometimes he comes out

and squashes them or says things that squashed them. Well, you know, he came out of the twenty five basis point higher right there, and that was just a wonderful thing that the his rhetoric that he had wasn't that negative towards the market. I think he feels pretty good about inflation starting to calm down. When you look at the PC index that's starting to roll over. That's been a big key thing that that fed fear pal has been looking at. So I think you've got a lot

of great things going on here. And the cash build up, guys, I'm telling you, we watched cash build up. This is the largest amount of cash build up I've ever seen in thirty five years of doing this. So this thing's got a lot of fuel to go higher. And if we what metric, what what specific metric are you watching when it comes to a cash build up. We look at a number of different things as far as cash build up, you know, money market flows that are going

to just money market accounts. We try to look at that, and that number has been very, very high. So there's a lot of investors with a lot of cash. And you gotta remember too, this is the first year and forty years rere bonds have just taken an absolute beating. So you saw a lot of investors sell bonds and going to cash. But now they're ready to go back into the bond market, are ready to come back into the stock market, and I think that's gonna be a

real big positive going forward. In Hey, looking at your buy list, a couple of things jump out. I shares US Technology E t F also the I share Semiconductor E t F. So you're all in it, sounds like when it comes to tech, Yeah, we were buying those two weeks ago, so we've had a pretty good run. You know, the past two weeks have been very kind to us UM and I do like the the E

T S better. Let me tell you why. I think that some of these stocks are gonna take really have nice powerful jumps up, but they're also gonna take a beating and if they miss on any like look at Snaps and got just beaten to death over there for

their earnings. I think you're better off broadening it out with an e t F and not taking individual stock risk in a market like this because a lot of people were hurt in two, a lot of fear out there, so just any kind of negative news shocks people and they'll they'll pull the ripcord pretty quick on an individual equity fans, good stuff. Love having you on the program. Let us know when you're back in New York. It

was to get you in the studio last time. To appreciate you taking my time, alright, Vance Howard, He's chief executive officer, portfolio manager and Howard Capital Management. Via zoom from Roswell, Georgia. This is the Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere else you get your podcast. Listen live each weekday starting a two pm Eastern on Bloomberg dot com, the I Heart Radio app, Tune In,

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