NY Area Quake, March Jobs Report

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We did have a four point eight four point seven magnitude tremor near White House Station, New Jersey. That's according to the US Geological Survey.

That's the Bloomberg reporting.

Brendon Sapienza joins us Bloomberg Deputy team leader for the US International Breaking News. Brandon, what do we have on this? I mean, we don't get earthquakes every day here in New York metro area. What do we know so far?

So no damage has been reported by New Jersey and New York. Both the Governor of New Jersey and New York have been briefed. Mayor Adams has been briefed, and so far there's nothing to report as far as any catastrophic damage, which is good, especially from your city with our subways.

Well, how about this, FAA says ground stop at JFK and Newark Airports. That's Bloomberg News reporting. Come across the terminal, So it's something. It's something I guess now.

It's New Jersey known for its geological activity.

Well, the last few earthquakes that I actually have been felt in New York have centered in the New Jersey Pennsylvania area, so it's certainly not the most uncommon thing for it to happen there. But just an earthquake in general is a sort of unnatural phenomenon.

See, it is your fault, but if I were if.

My plane is delayed because of a four point seven little tremor, if I'm sitting on the tarmac and JFK, I'm gonna be upset.

If I'm sitting on a tarmac and JFK and I feel the ground rumble, I'm freaking out. Okay, So there's that too. Also, can you put into perspective sort of the reverberations felt in New York, Like I think that's like the first time I felt like little tremors like over time that were like a couple seconds. But this was very different and lived in New York my entire life.

So the epicenter of the earthquake was actually a very low in the ground. It was only a kilometer down which is very unique in the fact that you will feel it more the shallower above ground that it is, and in this case it was one kilometer. They've felt it even in Boston, so you could feel quite far depending on how low in the ground it is. Usually they're much lower, especially in places where it's more common for earthquakes to be felt.

Do you remember what was the last earthquake that we had in this area on the east. That was the one in Washington around Virginia that closed the Washington Monument In fact.

Yeah, it's a number of years ago now at least.

And the National Cathedral also had to be closed because they.

Were you know, did you look that up or did you know this?

No?

I knew I was here was the last time the building shook?

So all right, So Brandon, what's what an official Sayinger, I mean, do we expect after shock shourney that type?

I don't know.

Well, okay, you liveing in California. That's why this is like nothing free. He's so skeptical, He's like, who care you guys, you know, suck it up. But well, yeah, exactly. But what have we heard from, say the governor, the mayor, any word from Jersey officials.

So actually, we just got right before I came on, we just got an emergency alert from New York City that residents are still advised to remain indoors. So I guess the possibility of after shocks is still there. New Jersey activated their State Operations Emergency Management Unit, so I guess the possibility is still there. It's unclear though for now, but right now everything seems to be okay.

All right.

Also, I think Kathy Holkle was talking that they're going to be assessing the damage, but the FAA is saying groundstop at JFKN Nework Airports. I mean, I don't know where the guardy is and all of that, but so I think we're definitely looking up forward.

To that this is Queen's we can take it.

I guess that's true. You think Newark would be used to it also, But again I just point back to Michael McKee that two point five to five point four is often felt but only causes minor damage, and that estimated number of them each year is five hundred thousands. So to your point, like, maybe we can handle it, Maybe it's okay, Brandon.

Yeah, the thing you have to worry about is a lot of New York City building codes for good reason, aren't meant to deal with earthquakes, because it's just such an uncommon thing. So it'll be interesting to see how the older buildings really hold up with the shaking.

And this is the point about California is like you guys are prep for this, yes, like we're not. Yes, it's the same way that like we can do snow, but Florida can't. Like it's like we're just not used to certain things. So be interesting to see how that shakes out.

Yes, John, I would point out that yesterday's storm had a far bigger impact down trees, an individual killed in Rye from a falling tree, and power outages as well. So put it all in, come.

We've got some plenty of weather related issues here.

And remember the whole like eclipse thing that's gonna happen Monday pretty soon, the.

Low Yanke fraud, the Yankees push their game back from like two o'clock six o'clock. The world's just going nuts here. Brandon, thank you very much for joining us. Brandon's Sepien's a Bloomberg deputy team leader for US and International breaking news in this issue.

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Labored nonfarm payroll numbers that came in today much better and expected. Jonny Biley joins US here, chief workforce analyst at Employberg. She joins US Live foreund Our Bloomberg Interactive Brookers Studio. So that's a good thing, Jony. I guess it's just anyway you look at it, a really solid jobs number today, What do you take of it?

Yeah, you know, it definitely exceeded all expectations, you know, across the board. Yeah, I thought it would be a pretty good job report, but I didn't think it was going to start with a three in front of it.

Not good things you're thinking about.

Yeah, like when you dig into it, it's it's not robust.

Across the world, it does feel like a lot of the conversation is now centered around immigration and how immigration has actually provided a lot of workers and that's why we keep growing so strongly. In your research, what do you see in that?

Yeah, you know, I was looking at some of the immigration numbers, and when you look at our overall labor labor force, immigrants make up about eighteen percent of the labor force. Rome it has grown, I think it grew in the early two thousands for many years the pandemic, of course, you know, everything kind of shut down, but we're starting to see those numbers tick up as well. So the demand there is really though for skilled workers.

Yeah. So, I mean Torsten Slock, who is the chief economist at Apollo Global. He was out with a really cool chart today right after the data came out foreign born workers contributing to labor force growth. And over the last two months there's been actually been a net decline in native worn workers. Uh with this data set, and all of it has come from foreign born workers. So

Yeah, so when it's interesting, I follow his work. Employee Bridge is owned by Apollo, so we look. We look closely at his data every morning. I get his emails. But I you know, what we see in our business is employee Bridge really provides staffing for supply chain, so manufacturing, logistics, you know, transportation. We staff a lot in call centers. There has been you know, certainly a softening in those

Do you get the sense that how has employer behavior over the last few years changed, and that how has that changed the temp landscape because usually maybe you'd lay people off and then get tempts back in order to see if the demand was going to be there. Has that now changed a little bit?

Well, I think employers are still wanting flexible workforce. They use temporary labor certainly to ramp up and ramp down. I think it's why we've seen the sector really been hit.

The hardest over the last two years.

As employers when they go to cut back, they don't want to cut their permanent employees, so they will let the temporary workers go go first. But right now, we're seeing a lot of optimism. They're talking about hiring and ramping up, and so maybe we really did have that soft landing where where now things will start to stabilize and we'll see that employers will add not only to their permanent payrolls but also to temporary staffing and flexible workforce models.

Do you see in your work at employeers? Do you see regionality here in terms of the labor market. I mean, is everybody just flocking to Texas and Florida and all that kind of stuff.

Yeah, I mean it's it's strong though also you know in the North certainly if you look the automotive, you know, industry, and with the building of all the ev plants, there is a demand certainly for workers in manufacturing, even though we're not seeing it in the numbers today. Like you look at the manufacturing number, and of.

Course manufacturing was pretty strong right earlier in the week.

Yeah, and that was very optimistic. So I think we're going to start to see growth in the manufacturing sector and growth in manufacturing jobs certainly into this year, but even more so next year and beyond.

Are you based in Florida.

I do live in Florida, but I am a New Yorker at heart.

Okay, I get that. Yes, I like to just get a sense of how is the labor market down there? I mean, is it just as crazy as the headline seemed to make a belief, because seems like here in New York, the story was everybody was walking down to Florida, even like our big Wall Street folks are heading down there. What's it like to be in South Florida these yas?

Yeah, so yeah, I do live in South Florida. And there's this you know, strong demand a lot of course in leisure and hospitality. You know, you still see restaurants can't find enough workers. They won't even have all of their tables staffed, you know, and there's long wait lines. So the economy certainly is strong.

People are moving there.

Housing prices are continuing to still.

Rise, Is that right?

Yow?

Because you know, just the anecdote in my town I've shared with these two friend of mine owns a restaurant locally here in New Jersey.

For the first time in several years.

He now is fully staffed because and he realized that you know, the bust people bust the table and wash the dishes. Those are undocumented workers, and for years, for the last several years, he hasn't had full hours, but now he's back to fully staffed. That so I don't know how that all.

Yeah, Florida isn't there CYS. I know, maybe they will get there soon.

So what's the next Like what's next on your plate? Like what's the next thing you're looking at and focusing on?

Well, I think, you know, it was great to see the household survey today that we saw the growth in the labor you know, the size of labor force grew by four hundred and seventy seventy nine thousand, So that to me is a number I really watch. I'm always looking at the size of the workforce, labor participation. Do we have more people saying yes, I want to participate in the workforce. I do believe though, that employees are going to need to start focusing on training and upskilling workers.

And where do they get work? Are they working hybrid still? That's that's the thing.

Well, in supply chain they're back, they really are. But in most of the other professional and business service sectors they're in the office one day a week, sometimes fully remote.

Really coming then it's pretty much TV.

You guys are here every every day.

Yes, not that Paul talks about that all the time. But if you work in supply and logistics, I know I'd be back in the office. So there you go. All right, Jenny, thanks a lot. We really appreciate it. So lovely to see you in person. Jenny Biley is chief workforced Analysts at employee Bridge, joining us here in the studio taking a look at these markets. Here the idea of US exceptionalism still kind of stand relatively strong.

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So let's get right to what to do with these markets. At some point, you think that high yields are going to wind up putting the equity market. That doesn't seem to be the case. We're recouping some of those losses from yesterday. Grace Lee is senior portfolio manager for a Columbia thread Needle and she joins us now. Grace, when does the tenuere at four point three four percent hurt the equity market? For example?

Morning, Alex, thanks for having me.

I think today's news was actually a nice sigh of relief for all the equity market investors who've been pretty much wringing their hands all week on somewhat stronger economic data.

But the age gains were less than I think.

We're certainly very healthy, but not not anything to be alarmed about. And as far as where rates are, I think the bigger pictures that when you look at what happened in the first quarter, you did have rates going up, and you had or bond fields going up, and expectations of rate cuts actually coming down through the quarter, and

If we are seeing some broadening out in the participation in the equity markets, what sectors would you be looking at outside of, you know, whatever the magnificent number is these.

Days, Well, I think there's a lot of unmagnificent sectors and companies that people are starting to look at a

Well, let's go to energy for a second, because part of there was one narrative yesterday that talked about how the rally in oil and particularly Brent to ninety dollars was a trigger for the equity market to sell up. Do you buy that, and I mean, do you like think that's true? And then also do you buy energy at these levels here? Do you have to wait for a dip?

Well, we're pretty fully invested in energy right now, and whether it's.

It's a positive.

I think people are clearly concerned about whether we'll see much higher gas prices, which could really you know, drive the inflation fears again. But for now it seems like everything again is still coexisting peacefully. Higher energy prices and still decent growth overall without overheating in the economy.

Grace.

We're going to soon shift gears back to earnings mode. We've got the JP Morgan next Friday, I guess, kicking off some of the really big earnings. What are you going to be looking for this quarter from corporate America?

So I think there's a couple things to be looking for again.

I think looking looking at where the economy is broadening out and seeing if if that can continue beyond magnificent seven big tech, as well as looking to see if the AI trade does still stay strong. I think you do need a little bit of that to continue for the markets to to still be happy, I guess. But then also you know, for for the big banks that start to report. I think there's two things. Obviously, the

So we'll see if that continues.

And then to see what what the banks themselves are saying about their interest income trends, given that rates might stay higher for longer and that might actually be a positive for them.

Okay, so now it's official. Guys, did you guys feel you're in Boston, Grace, So you didn't feel this, but there was an earthquake right there was tremors. It just crossed the Bloomberg tremors felt throughout New York City region is building shake. We weren't crazy. So we were sitting in the radio studio, Grace, and we're all like, what is that? It felt like we were on some kind of like little roller coaster ride, and apparently it was real. We were not crazy that we.

Thought that, Well, there's a bucket list thing for me.

Yeah, well both things can be true as a bucket list. Tremors in a building in New York City, yep, done across that off all right, Grace, what else are you watching? You mentioned earning season? How are we positioned here? Like, how is a good way to play it? What else are you looking at?

Well? I think.

In the consumer sector there have been a lot of mixed signals recently. Some of the off cycle earnings reports have been a little bit more cautious and negative. And yet you know, when you talk to companies, you hear random data points like the auto companies and Detroit saying that they can't make enough six figure SUVs to keep in stock, there's so much demand out there, or that the cruise lines, we're seeing the people spending one thousand dollars a day on cabanas, and yet you see pullbacks

Grace, how much do you I mean? AI was obviously a cute, huge theme in twenty twenty three continuing into twenty twenty four. It's not just in Nvidia, it's broadening out. Is that something you guys at Columbia Thread you don't try to get exposure to And if so, how have you done it?

Yes, So across the firm, we've been very focused on this, and you know, as I focus more on the value and income sectors, I do have to look for or more tangential ways to play. So it does fall into old economy technology companies like Dell and IBM, as well as some industrial companies Let's say Johnson Controls gets ten to fifteen percent of their revenue from data centers. In

So the nvidious and those types of names.

Yes, it's what I'm saying, the power players. I'm glad you brought that up. That was all the conversation down in Houston a couple of weeks ago that like, you get you need the data centers, you need the chips. You've got to have the power and those power providers, particularly nuclear, like really well set up for those data centers. What do you think we're going to hear about margins before we let you go? Because inflation seems to be I don't know, sticky, stubborn, like you pick the word.

Well? I think the margin conversation.

I think while inflation is stubborn somewhat, managements are still very cautious on adding headcount, and if actually I think you've seen them, you still see announcements of headcount productions. So I think margins might actually turn out to be okay, and I would expect that we'll see decent earnings beats still with.

More cautiously.

All right, Grace, thanks so much for joining us.

Really appreciated.

Grace Lee, Senior portfolio Manager, Columbia thread Needle, joining us from Boston via the zoom Thing.

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Thirty breaking earlier this morning was a pretty darn good jobs numbers coming out. Three hundred and three thousand additional jobs last month, pretty solid. Street was looking for like two seventeen, so really beat expectations. And when we do have jobs data, we'd like to check in with Tom Gimble Thomas a founder and CEO at lasal Network. Sound Network's one of the largest staff and companies out there, and they have their finger on the pulse what's happening

It's party time time. The music hasn't stopped yet, is the message. Now, Let's be realistic and say when seventy over seventy thousand jobs right over over twenty percent of the jobs were government and I think we've always got to be wary of that and that's been a big part of these positive job gains. Now, listen if it wasn't three hundred and it was two hundred and thirty thousand, it would still be great.

So Tom, I get it, Like I understand that we got to be careful about government jobs, but there were others too, And I'm just wondering how you see the mismatch right, like, do we have the right people for the right jobs? How do you manage it?

I think there's a challenge. So that the big part came in healthcare and in service jobs, and then construction and government, and so I think we all know by the functionality of our government that the qualifications for those jobs aren't very high, so so anybody can do those apparently. And then when we look at construction, you need people who are willing to throw hammers and do the blue collar work, and we've got challenge with that. A lot

That's a challenge So Tom, how about the wage increase about four point one percent? That still seems pretty solid to me.

What do you make I'm surprised by that. However, at the same time, we're not seeing really inflation decline and everything's costing more. I mean, we're in a really the ven diagram for this will end up going in the Smithsonian because we have a really unique situation where the stock market keeps going strong, unemployment is low, wages are rising, inflation is too high, and at the same time, interest rates are higher than they have in years upon years,

But you know, it does raise the question for me that maybe there's the economy just stronger than we all think, and that we can add three hundred, two hundred and fifty thousand jobs. And that doesn't mean that we're overheating. It doesn't mean that the market is super tight, that we're just kind of growing. Is there any truth to that?

As you see it, listen, the truth is self evident. So I agree with that. The real problem we have is the ancillary things that funnel that and what's happening is we've got. You know, why is the service sector and hospitality up because more people are traveling? How are people traveling when everything costs more? Because they're spending money

It seems like the and we're seeing some reporting here from Bloomberg the black unemployment rate increased to the highest since August of twenty twenty two. What do you think is behind that?

Tom, I mean, I think you get into a little bit of the social science on this, but I think in a situation where we have two very different views on society, and I don't mean black versus white, I just mean on what's appropriate. I think you've got people of color who feel that they're left behind, and I think that you have a situation, whether it's right or wrong, due to education and due to job abilities and due

Well.

Also it feels like we need that when it comes to immigration also, I mean the surgeon in immigration, as long as it's legal, could be very helpful to fill some of those jobs that you were talking about, how do you talk about that with companies? What's the conversation around that.

So there's two different types of immigration problems we have in this country, and I think where people want to default to is the southern border, which is a real issue. However, the challenge it's been going on for over a decade

Really appreciate getting your thoughts here today. I always love checking in with you on jobs Day. Tom Gimble there giving us his thoughts here on the strong labor market.

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Boy, what an great time to talk to municipal bonds. Eric Kzatsky, senior minisial strategists for Bloomberg Intelligence, calling us from Princeton, New Jersey. Eric, what's new in a municipal bond business?

Wait?

Did you feel it? Eric? Did you feel it?

Oh?

My god, did we feel it? What like fifteen miles from the epicenter? Yeah, I mean it was so scary. I Eve hasn't even gotten lunch yet. He's been busy looking up rich Or scale.

Now that means he must be scared.

Folks, the folks on the folks on YouTube, the folks on YouTube. We wed you know, Eric Kazatski on with us, and sitting right behind Eric is our good friend Irad Jersey, also in Bloomberg Intelligence. There's their offices for Bloomberg Intelligence in Princeton, New Jersey, as Eric mentioned, literally like fifteen miles away from the epicenter. All right, Eric, so is there municipal bond angle here? I mean you can start

Yeah.

Now, I think the good thing here in the takeaway is that there has never been a municipal bond default because of a natural disaster earthquakes included, so mini bond investors can rest assured this is going to be a non issue right now. So that's a good takeaway.

Okay, well, I'm glad, I'm glad we worked that out. So that's quite good. All right, Okay, My favorite question is how's issuance? What's going on? Where we learned this week?

You know what, issuance has been quite decent. I think we're up about thirty percent year over year. You know, look, tax time tends to be a little bit slower in the municipal market, and I don't think the pop in rates is doing anybody any favors. Any deals that we're sort of like waiting to come on the market, they might be held back just to see if rates settled

So how are municipal bonds trading relative to treasuries these days?

Most excellent? You know by comparison, Yeah, I mean we're we're out performing treasuries by two hundred basis points. So for those who are just solely focused on total return, it's been a really, really great year. You know, obviously we're still down a little bit, but you're getting the benefit of that carry in the municipal space, you know, from a yield stamp, and I think that's really where people should be focused, especially if you're concerned about higher taxes.

Now, where have we seen a lot of issuance in the last week?

What caught your eye?

Yeah, I mean there's a lot of stuff on the pipeline. It's coming down in the healthcare space, which I think is super interesting, especially because we put out a report yesterday and like that tie in right there where we talked about how some of the biggest passive ETFs don't really have a lot of exposure in higher ed and in hospitals and in healthcare. So you know, I think that you know, as margins improve in that space, they

Talk to us about demand out there. If I coming out with a municipal bond nicely rated, what kind of demand am I going to see?

You know what, people are tripping over themselves to buy up on the issue market. Yeah, I mean everything that's come has been well over subscribed. You know, California, I think they sold close to like two two and a half billion of bonds. When you get a bond issue of that size, that's that big. That's a lot of

It wasn't there like a thing about sports and Travis Kelcey or something wanted to do something with tax increases to pay for the stadium. That didn't work?

Did it not so much?

Right?

You know, Look, I've always been a sort of a questioning the fact that you know, taxpayers are put on the hook or asked to sort of levy themselves to keep their you know, hometown sports teams you know, stay put and no different. In Kansas City, they put a referendum oount. It was voted down by the you know, the taxpayers that they didn't want to increase taxes to pay for the stadium. You know, look, at the end of the day, are they really going to uproot the

All right, So what's on the calendar here that Alex should get excited about over them?

I'm excited.

Do you hear me engaging with moodies? I am working. I brought up sports. You guys are missing all these things.

It took me like a year to get Matt Miller engaged, and you're much quicker.

Than and then he left.

Yeah, I mean he was.

He was super excited about me, and he's Look, you know, we go back to the sort of those healthcare deals that are coming, they're going to have more spread attached to them. I like deals that I can look at and and sort of get into the weeds on the credit and that are just more interesting.

Right.

Look, you can look at a triple A credit that's just like tax backed. It's okay, it's not that interesting from a credit analyst perspective. But things that are revenue based, you know, things that have you know, had a rough couple of years, you know, during the pandemic, like the healthcare sector. I think those are sort of recovery stories that will be more interesting to sort of pick through.

All right, well, well what else you got? What should I be paying him? What am I gonna get excited about for next week? Tell me, tell me? Tell me.

I think you got to get excited just about how much more yield UNI buyers are picking up over corporates, you know, as spreads compressing the corporate sector and UNI bonds you know, will trade softer over the next month as people sell them to pay their taxes. If you're a high at worth person and you're looking to pick up some yield, I think now's the time to be buying.

All right, Very good, mister Kazatsky. He is our strategist down there in Princeton, kind of this epicenter almost of the earthquake activity in the Greater New Jersey. Or Kazarski senior municipal strategist for Bloomberg and in intelligence. So you know, it's interesting. You're getting nice yield there on a Texas Justible Basan is getting better yield today, you know, versus the last few years. But on a Texa JUSTI bass.

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