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- [00:00]
Narrator/Commercial Announcer
Pinpointing the genetic changes that predispose us to disease Identifying the roots of mental illness Treating congenital anomalies even before birth. At Boston Children's Hospital, we're investing in children's health today to ensure the well being of adults tomorrow. As home to the world's largest pediatric research enterprise and more than 260 specialty programs, Boston Children's is where the world comes for answers. Learn more@bostonchildrens.org these days AI can help.
- [00:32]
Barbara Humpton
You adopt better time management, but it can't stop colleagues booking meetings during lunch. But how about being able to easily adopt industrial AI to streamline your business? Siemens Xcelerator helps you find the right AI providers and easily understand what they offer so you can use modular solutions to quickly scale up and grow your business. That's AI for real. From the global market leader in industrial AI, Siemens. Learn more on USA.siemens.com AI Every business.
- [01:01]
Narrator/Commercial Announcer
Starts with an idea. How can you go from daydreamer to industry leader? Amazon Business accelerates your journey with smart business buying. Get everything you need to grow in one familiar place, from office supplies to IT essentials and maintenance tools. Amazon Business takes the buying experience you know and love from Amazon plus tools that help you save costs and make insights based decisions ready to bring your visions to life. Learn how@AmazonBusiness.com.
- [01:30]
Podcast Host/Producer
Bloomberg Audio Studios Podcasts Radio News this is Bloomberg Businessweek daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Massar and Tim Stanweck on Bloomberg.
- [01:59]
Narrator/Commercial Announcer
Radio Want to go back to a.
- [02:01]
Caroline Hyde
Story that's got a stock moving and this has to do with Disney, which is still down but Tim off its worst levels of the day, but still down about 1% here, the company said.
- [02:09]
Interviewer/Reporter
Jimmy Kimmel Live will return to the air on Tuesday, ending a suspension imposed following controversial remarks its ABC late night host made about the assassination of Republican activist Charlie Kirk. I want to bring in Bloomberg News Senior Editor Chris Palmeri. He joins us in our Los Angeles bureau. Chris, Chris, we got a short statement from Disney about this. They said they were in thoughtful conversation with Jimmy Kimmel. What do we know about the decision to bring him back to air?
- [02:34]
Chris Palmeri
Well, we know that there were talks that really began between the company and Jimmy on Thursday. This was done at the highest levels right between Kimmel himself and Disney CEO Bob Iger as well as Dana Walden, the head of the TV Division there. They took a break over the weekend and they resumed talks today. And obviously they came to this decision that he's coming back.
- [02:55]
Caroline Hyde
Jimmy, we love you. Come back, Jimmy, not a problem. Say whatever you want or. Jimmy way gotta think about what you're saying.
- [03:02]
Barbara Humpton
I don't know.
- [03:03]
Caroline Hyde
What do we know? I mean, obviously these were behind closed doors and I'm sure they're being pretty mum about it. But do we have any insight of exactly kind of where, you know, Disney stood on all of this in terms of bringing him back? And you know, at the same time I've seen some stories about individuals calling to, you know, cancel your, you know, Disney plus subscriptions and so on and so forth. Was there pressure on streaming that maybe, you know, made Disney take a second look at all of this? I don't know. I'm just, I'm just asking. I'm just curious what we know about the context of those conversations and why this happened.
- [03:34]
Chris Palmeri
Yeah, I mean, there was pressure everywhere. This, you know, began with just folks in local markets calling their TV stations and saying they were upset about his comments, whether it's Salt Lake City or Nashville or wherever. And that's really what got that. And the comments from the FCC chairman about doing something about this got the station groups next door, Sinclair, to act. ABC was very close behind them in announcing, you know, putting this on hiatus. But, but ABC did always want Kimmel to come back. And you know, he, he's also in a tricky position. Sinclair in particular has called for him to apologize and donate money to the Kirk family. You know, there's every indication that he was not long in this job. He wanted to do something else, but he ob. Wants to leave on his own terms and not be forced out in this situation. So there's a lot. We still don't know whether he's going to apologize when he gets back on the air. You know, how long he'll stay in this job if Disney's even going to stick with the late night format.
- [04:36]
Interviewer/Reporter
So what happens now to the comments that Brendan Carr, the chairman of the FCC made last week, which, you know, even some in the, in his own party, Republican Ted Cruz, for example, had some real concerns with the way that the FCC chairman was going about this. What happens now on that side of things?
- [04:57]
Chris Palmeri
Well, he can sort of declare victory either way. You know, he got the station groups to take Kimmel off the air, even if it's a short while and if they come back, he'll probably say it was their decision. And we are of course reaching out the FCC for comment. But, you know, his words certainly got actions, that's for sure.
- [05:18]
Caroline Hyde
Yeah. It just makes me wonder because I feel like the last week or so we've talked about media in all its forms just really being focused on by President Trump.
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Narrator/Commercial Announcer
Right.
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Caroline Hyde
Coming back from the UK making those comments about, you know, if a network says something that isn't nice, you know, maybe their licenses should be looked at. And I'm paraphrasing, but is the heat off from the White House? I don't know, like, what's the feeling?
- [05:48]
Chris Palmeri
No, what's the feeling? I think you're paraphrasing was pretty kind. I think the president said that he could just take away their licenses if he didn't like what they were saying about him. Yeah, obviously a lot of people have that problem with that from a constitutional standpoint. But this is, you know, probably the height of what's been a long running Trump war on the media. We said last week there's really been no president. Every president has a difficult time with journalists from time to time. But nobody has made this kind of push to the extreme that Trump has suing them on a regular basis, threatening to take away their licenses on a regular basis, and to a large degree seeing them kowtow to these efforts. And you know, some people are saying we're sort of in a danger of coming into a state run media in this country. So a lot of concern on both sides.
- [06:43]
Caroline Hyde
But Chris, and to be fair, like to be Kim, all is not news, it's entertainment. And I am curious. There you are in L. A. Right. We're still so much is done in the entertainment world. And I wonder, you know, movies, actors, producers, directors, they're not afraid to kind of be critical of an administration. I'm not talking about this current one, but this one or another, they're not afraid. And I just wonder what's, what's being talked about in LA and within the kind of Hollywood community about what has happened in the last week, Is there a tremendous pushback against limitations?
- [07:20]
Chris Palmeri
Yeah, we saw public statements from the screen actors, the Writers Guild. We saw protests in front of the studio, the theater where Kimmel's shot. We know, you know, we saw some prominent actors and producers in that come out, you know, against Disney. You know, we even saw Ted Cruz, Republican senator from Texas, say things are going a little too far. So, you know, there's, there's definitely been a pushback. But at the end of the day, we've also seen these companies capitulate time and time Again, and those are the people that underwrite these projects, these movies, these TV shows.
- [07:56]
Interviewer/Reporter
Yeah.
- [07:57]
Chris Palmeri
So, you know, but Chris, that is.
- [08:00]
Interviewer/Reporter
Happening before we let you go. This also comes at a really challenging time for late night. I mean, Stephen Colbert is, is on the last year of his contract. He's, he's out after. The viewership is not what it was in its heyday. People are watching their phones instead of watching the screen at home together every night. By the time people see some of these clips, they're watching it on social media. They're not seeing them live. I mean, the business is completely changing. It's completely changed.
- [08:26]
Chris Palmeri
That's right. And it remains to be seen whether all of these shows stick around. Certainly Colbert is going off the air and not being replaced. Whether that's the same for Jimmy come alive, we don't know for sure. But these are expensive shows, you know, every day, 200 people and a staff, very high paid hosts. And you know, the local station owners would love to just take this time back. They pay most of the ad revenue, you know, goes to the, to the network, not them. They'd love to be able to put their own news or other programming in that time slot.
- [08:53]
Caroline Hyde
You know, there's not a lot of things that are certain in this world, Chris, but I'm just going to kind of take a wild guess that the viewership of Jimmy Kimmel tomorrow night is going to be pretty high.
- [09:04]
Chris Palmeri
Certainly the highest in a long time for sure.
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Caroline Hyde
All right, we're going to run. Hey, Chris, thank you so much. Really appreciate it. Chris Palmeri, he's Bloomberg News senior editor joining us there from our L A bureau.
- [09:15]
Interviewer/Reporter
Stay with us. More from Bloomberg businessweek Daily. Coming up after this.
- [09:22]
Narrator/Commercial Announcer
Pinpointing the genetic changes that predispose us to disease. Identifying the roots of mental illness. Treating congenital anomalies even before birth. At Boston Children's Hospital, we're investing in children's health today to ensure the well being of adults tomorrow. As home to the world's largest pediatric research enterprise and more than 260 specialty programs, Boston Children's is where the world comes for answers. Learn more@bostonchildrens.org how can you grow your business from idea to industry leader? Bring your vision to life with smart business. Buying tools and technology from Amazon Business. From fast free shipping to in depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to amazonbusiness.com for support.
- [10:18]
Siemens Commercial Announcer
These days, AI can help you write emails, summarize long meetings, and even create presentations that impress your most demanding customer. But how about industrial AI that uses data and simulation to boost productivity on the shop floor? AI tools that help you understand machine language. AI that helps you grow your business. With Siemens Xcelerator, you can use AI services, software and consulting from a single trusted digital business platform. Plus, you can find the right AI partner without having to search through hundreds of providers. That's AI for real from the global market leader in industrial AI. Siemens accelerator. Learn more at Siemens US slash accelerator.
- [11:01]
Podcast Host/Producer
You're listening to the Bloomberg Businessweek Daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [11:15]
Interviewer/Reporter
Well, President Trump plans to sign an executive order approving a deal to sell TikTok's US operations to a majority of US investors later this week. That's according to a White House official. Also, the US Will not take an equity stake in a deal for TikTok's U.S. operations. That's according to a senior White House official. The president on Friday made comments on TikTok from the Oval Office.
- [11:36]
Donald Trump
We're going to have a very, very tight control and look, they said it's an amazing thing that's been created. There's tremendous value with TikTok, and I'm a little prejudiced because I frankly did so well on it. You know, it's, it got me numbers that nobody's ever even heard of before. So a lot of people want it. The young people of this country want it badly. The parents of those young people want it badly. And so we were able to work out a deal with China and it's a very good deal for us. It's a very. I hope it's a good deal for them.
- [12:09]
Interviewer/Reporter
Does the president on Friday making comments from the oval office on TikTok? Alexandra Levine is Bloomberg News technology reporter. She covers TikTok, YouTube and more. She joins us here in the Bloomberg Interactive Brokers studio. Okay, I think it's fair to say there's a lot we don't know, but we're also learning more about what a deal is or what a deal would look like. The president on Friday saying, we were able to work out a deal with China. It's a very good deal for us and I hope it's a very good deal for them. What is the deal?
- [12:38]
Alexandra Levine
So, as you've said, there's a lot that we don't know. Things are very Much in flux. What we do know, what we've heard from the White House as recently as this morning, is that there is set to be this new TikTok venture created in the United States and that Oracle, which TikTok has a long standing relationship with, is basically going to be on point to help secure this new US TikTok entity. And they will basically be helping TikTok to retrain its algorithm and also to make sure that US Data of people, all the Americans, you know, the roughly half the country using TikTok, that all of it is secured in the United States and is staying here and is not going to be accessible by ByteDance employees in China.
- [13:19]
Interviewer/Reporter
So is this a different algorithm than ByteDance's algorithm that has captured the attention of so many?
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Alexandra Levine
So this is the, I would say like the million dollar question. And the biggest sticking point and sort of there's even been squabbling today. And I think this will also continue over this algorithm point. The whole sticking point that held up the deal for all this time was the algorithm. This is the secret sauce. It's this technical black box that is the thing that keeps the people hooked and scrolling and scrolling. ByteDance and China did not want to give up any kind of control of the algorithm. The law required exactly that. And so what we, what I think we are seeing is the White House really trying to thread the needle and present the agreement that they have reached in a way that makes it seem like that will get everybody comfortable with the level of control that ByteDance may ultimately have over the algorithm. There's talk of licensing the algorithm. The idea is that ByteDance would basically make a copy of it, give that to the United States, and then the United States would retrain it by, you know, TikTok engineers based in the United States would essentially retrain it on US User data. And I think that this, again, it's.
- [14:29]
Caroline Hyde
Really what could possibly go wrong.
- [14:32]
Alexandra Levine
It's trying to thread the needle on an intensely, enormously complicated issue. And I think one fascinating thing that came out of a conversation that the White House had with reporters this morning was that the White House is very much downplaying the complexity of the algorithm, saying it's just, you know, a mathematical, it's just this mathematical thing. And it's not very complex to sort of drill down into the algorithm and sort of wrap your hands around it. And I think there's some sort of, there's some sort of missing piece here and there's still some piece of this that we don't quite understand because the algorithm that they're downplaying as this sort of easy, this easy sort of piece of. This is the very thing that had, has basically held up TikTok in this limbo for as long as it has.
- [15:13]
Caroline Hyde
I mean, isn't it net net. We're either going to get an algorithm that isn't so cool and not like the original, or we're going to have Chinese engineers or something that actually still are involved. And so the concerns about a potential pass of American data, which have been, some of the concerns could still happen. I don't understand how we're going to make this work.
- [15:36]
Alexandra Levine
Well, look, there was a, There was this thing called Project Texas that, that's. It was, it was a team up basically between Oracle and TikTok years ago to try to solve the national security issues. The first time, this is back around the time that Trump had tried to ban TikTok over similar, similar national security concerns during his first presidency. Oracle was on deck, as you know, who Trump was saying should, should be the one to buy the app if they can make a sale. That ultimately all fell through. But Oracle and TikTok basically, you know, did this undertaking together called Project Texas. It was a multibillion dollar project that basically saw Oracle trying to help TikTok separate and secure US user data so that it only stayed in the United States. That was basically presented to the administrator, the Biden administration at the time, as a solve for all these national security concerns, to make the whole problem go away and talks progress until they stalled and then they died. And I think a large part of the reason why they died and why Project Texas, this oracle, TikTok team up, was not good the first time is because there was no way for, there was no way to be able to verify if there was any manipulation going on or if there was any data. There was no, there were, there were questions about how, you know, if that happened, how would anybody know? How would be, how would the average person know and also how would the government be able to verify that. But then there were also just like loopholes and shortcomings. It's an incredibly complex setup when you've got the company here and then you've got bytedance which is based in Beijing and I think that they're trying now to thread the needle and this whole proposal is reminding a lot of people who've been following this for years as like, it's reminding everyone of sort of a project Texas 2.0. But it's not clear that, it's not clear that it's necessarily going to solve the problems that it set out to solve.
- [17:23]
Interviewer/Reporter
What's notable to me about this is that while TikTok and the US government have been embroiled in this negotiation for the business, we call it what you will after you have companies like YouTube and meta platforms creating these clones or at least ability to actually watch videos on the platforms in a very similar way that grabs attention in a very similar way. It's a long form way of me saying this just sounds like a win for the American rivals.
- [17:55]
Alexandra Levine
I think that they're watching with bated breath. They're sort of acting like they. They're not really paying that close attention. I was just at a YouTube event last week where they were saying that this was not really on their radar. It absolutely is on their radar. But. But I think that if TikTok is able to continue operating in the US that in some ways will not be a win for the rivals. I think, you know, in some ways this limbo has been a really good thing for the rivals. You definitely at one point saw an influx to other platforms. You saw the other platforms being able to copy TikTok and some of the features that TikTok had.
- [18:28]
Interviewer/Reporter
How special is this algorithm? Like, how hard is it to actually understand what I like versus what somebody else likes and just show us videos that will get us to keep watching? Doesn't seem that hard. But then again, here I am, a person talking, no offense, not creating these algorithms.
- [18:47]
Alexandra Levine
I think that's like, how special is that special sauce?
- [18:50]
Caroline Hyde
Is it really?
- [18:51]
Alexandra Levine
I mean, I think that if you ask anyone that spends time across all these platforms, on the platforms, people will have different preferences, right? Like, some people will be more, you know, more hooked on TikTok, some people will be more hooked on YouTube. I think, though, that the fact that it has been this black box and it has built it has been built up to be this thing that is not for sale and that will never be turned over and that will never be, you know, China will never relinquish control. I think it has added to the sort of mystique and it is also reinforced or like crystallized for some in Washington. Exactly what the concerns with the algorithm are in the first place. So the main national security concerns, which I feel like get kind of like buried in all of this. Number one there.
- [19:30]
Caroline Hyde
Exactly.
- [19:31]
Alexandra Levine
There's the concern, number one, that maybe ByteDance and by translation, China could use the app to collect sensitive information about Americans. The other piece of it is all about the algorithm, which is maybe they could Use the, the, they can manipulate the algorithm to push certain divisive narratives on American citizens who are using the app and make people, you know, like just, just create discord in the United States and change public discourse. And I think the fact, so like your question, is the algorithm that special? I think that just the fact that there's all this, that, that there's all of these, all of these.
- [20:11]
Caroline Hyde
Does the national security concerns go away under this new deal? Who knows, right? Like, I don't know. We're going to continue. I know. Alexandra Levine, thank you so much. Bloomberg News technology reporter.
- [20:20]
Podcast Host/Producer
You're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [20:33]
Caroline Hyde
Think wind turbines, power generators and transmitters, industrial motors and gears and motion sensors. And based on a conversation we're just having off air, even crypto and blockchain, they're all related. They are.
- [20:44]
Interviewer/Reporter
You got to have power, you do.
- [20:47]
Caroline Hyde
To buy that crypto to make it all happen. But anyway, bigger picture, you get an idea of what Siemens USA is all about. As the company shared with us, the US unit employs about 45,000 employees, 50 states and Puerto Rico and generated 21.1 billion in revenue in fiscal year 2024. Back with us, Delighted to have with her with us Barbara Humpton. She's President CEO of Siemens usa. She's here in studio.
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Barbara Humpton
How are you, Caroline? Tim. I'm thrilled to be here. So thanks so much for the invitation.
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Caroline Hyde
Well, it's great to have you here and there's a lot to get to. So much coming at us Macro though, I always like to start your view on the environment.
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Narrator/Commercial Announcer
Right now.
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Barbara Humpton
Yeah, right now. What I see is a huge emphasis by business in making sure that we are protecting our future. We know that it's in our long term business best interest to make brilliant use of resources, make sure that we keep the future whole and ready. So this is what Siemens has been working on. Siemens business strategy is actually built around global megatrends and so creating technologies.
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Caroline Hyde
There are megatrends that can drive you crazy and you can't take advantage of or not right away. And there are megatrends that are like, whoa, let's do it, let's run.
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Interviewer/Reporter
Or there are megatrends that aren't necessarily aligned with the views of a presidential administration.
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Caroline Hyde
Exactly.
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Interviewer/Reporter
That makes it more challenging.
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Barbara Humpton
But it's hard to argue with things that are inexorable forces. So we know the climate is changing. We know that people everywhere are aging. We know that everywhere more and more people are living in cities. Siemens brings technologies that transform the everyday, enabling us to really live, manage and thrive in changing circumstances.
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Interviewer/Reporter
So on, we're going to continue with energy here. And that's where I want to start. Carol mentioned wind turbines, but here in the United States, the President has made clear his view on wind power. How much of a setback has that been for Siemens usa?
- [22:36]
Barbara Humpton
Well, I will clarify that. My colleagues at Siemens Energy obviously have taken that on. And you've seen Siemens Energy thriving over the last year. At Siemens ag, the US Entity I'm responsible for, once those electrons are generated, we're the ones who are moving them. Medium voltage, low voltage, we're the ones working at the grid edge, which I think is where there's so much fruitful development to be done. So, yes, and I just loved your last interview. We need more power. Everyone understands. We do. There's just insatiable demand for electrons. Actually, we're agnostic about how those electrons get generated. What we want to do is move those to where they're used best. Think AI data factories. Think the kind of data centers we've been building. Think about manufacturing coming back to the United States. All of those are brilliant uses of the power that we can generate.
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Caroline Hyde
What can you tell us about the AI build out and what you guys are seeing firsthand?
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Barbara Humpton
Well, it's massive. It's massive. We, it is critical for the US to maintain leadership in AI. We also know that one of the most exciting things that will happen is AI at the edge. So you can think about a manufacturing location as a humongous generator of data. Every factory is producing just massive amounts of data, more data than any individual could make sense of. But when you bring tools like our industrial AI copilot into the manufacturing environment, it allows users to harness that data, make better decisions, really drive their operations, and we're seeing success all over the place.
- [24:15]
Caroline Hyde
What does it mean? Give us an example. So you get the copilot into what factory or whatever or what plant facility, and it does what?
- [24:22]
Barbara Humpton
Well, so the first thing it does is makes it possible for mere mortals like you and me to actually interact with automated machinery. Instead of having to know the programming languages we can speak in natural language and have the AI translate into the programming language of the manufacturing equipment. That allows us to employ people who maybe previously thought, I could never get a job in manufacturing. I don't know enough. I haven't had enough background in it. But now we can. I'LL tell you that we have operations in Fort Worth, Texas, where we're actually building the electrical components that go into data centers. And with that incredible demand, the switchboards that manage that electricity, we needed to hire 700 people to work in the plant. And the local management said, let's hire retired principals and teachers first. Let's create an on site training program. And now we have, you know, former pizza delivery guys, former chefs, former checkout clerks, are rock stars in the manufacturing environment.
- [25:24]
Interviewer/Reporter
You talked about the tool that your customers use when it comes to AI being a co pilot. What about internally are you doing since we last spoke, when it comes to AI, oh, boy.
- [25:34]
Barbara Humpton
You know, we are in that era when no one knows where this will go. So the encouragement at Siemens is for everyone to lean in, start learning, get familiar, get comfortable with using AI. And my favorite thing, at the end of a business meeting, you know, let's say we call the.
- [25:51]
Paisley Nardini
We call.
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Barbara Humpton
The meeting ends five minutes early. I turn to the team and say, what are you doing with AI? And I've heard the most amazing things, like the finance team who said, well, we just generated the balance sheet that we just reviewed with AI.
- [26:03]
Interviewer/Reporter
So it's much more informal than it is formal right now.
- [26:06]
Barbara Humpton
It is, and I'll tell you why. It's important that we learn. And some people would say, oh, no, no, I want to control that. I want to make sure that we're sharing best practices. Yeah, yeah, yeah, all that's good. But first, first, let's push the edges and see what we can do.
- [26:20]
Caroline Hyde
Do you think AI is going to make us all idiots? No, because I think about what you said about anybody who doesn't even know the coding program can get there and talk and have a conversation. And I just, I have this fear that we're just gonna rely on AI to do everything.
- [26:35]
Barbara Humpton
Don't be afraid. Here's what this does.
- [26:37]
Paisley Nardini
I'm not afraid.
- [26:38]
Caroline Hyde
And I played with it and I'm blown away with it. But I also can see how as.
- [26:42]
Narrator/Commercial Announcer
It gets smarter and smarter and smarter.
- [26:43]
Caroline Hyde
And more specific in terms of fields that it can do, it will make.
- [26:47]
Barbara Humpton
You more and more powerful then as you go. So think about AI as that super tool that will take the least among us, those with the least amount of background and expertise, and give us the knowledge and power to perform at a higher level. This is going to be so exciting to see. Then what do experts do with this additional power? How far can they push?
- [27:11]
Caroline Hyde
Makes me wonder if we're going to need sophisticated, sophisticated workers from outside the.
- [27:14]
Interviewer/Reporter
US perfect segue to talk about H1B visas because that is where we want to end. We're trying to ask everyone we talk to about what's stemming from the confusion Friday and through the weekend. How do you use H1B visas at Siemens USA?
- [27:27]
Barbara Humpton
Yeah, we do. We bring people from all over the world who have special knowledge and things that were, you know, today I would say less than 5% of our population in Siemens USA is folks on H1B visas. But that's a, that's a number. That's a great number. And, and the point is that we're global. What we are, what we're working on is making sure we share lessons learned. You know, bringing people to the US for experiences and then obviously sharing their knowledge.
- [27:53]
Chris Palmeri
Is that risk.
- [27:54]
Interviewer/Reporter
With a new potential $100,000 fee associated.
- [27:56]
Barbara Humpton
With these visas, it'll factor into the business case analysis.
- [27:59]
Interviewer/Reporter
Would you still have 5% of your workforce have these visas?
- [28:02]
Barbara Humpton
We'll have to see. We'll have to see. You know, I want to see how this develops. And we are working to make sure first of all that our employees are in good shape, that they're able to travel and really accomplish the mission.
- [28:14]
Interviewer/Reporter
Is the reason you have those employees because you cannot find those employees in.
- [28:17]
Barbara Humpton
The US in some cases it is. In some cases it is that we want to give people the global experience that's going to really make them more effective in understanding. Here's what the US can produce as we address markets elsewhere.
- [28:32]
Caroline Hyde
You said you're going to do the financial analysis. Could it mean that that $100,000 fee, if you guys want those workers, that it's going to feed into costs and higher costs of things just quickly the.
- [28:42]
Barbara Humpton
I think this is going to be part of an ever changing equation. Our labor costs obviously are a big portion of what we do at Siemens.
- [28:49]
Narrator/Commercial Announcer
Right.
- [28:50]
Barbara Humpton
And so this is I would tell you that our export controls colleagues have been our heroes this year.
- [28:58]
Caroline Hyde
I bet they're on speed dial. Barbara, thank you so much. Barbara Hampton, president and CEO of Siemens usa, joining us right here on Bloomberg businessweek Daily.
- [29:08]
Interviewer/Reporter
Stay with us. More from Bloomberg businessweek Daily coming up after this.
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Podcast Host/Producer
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- [31:10]
Caroline Hyde
Curious to see what our next guest has to say about the market environment? Paisley Nardini is Managing director and head of Multi Asset Solutions at Simplify Asset Management. They've got more than 10.2 billion in assets as of under manage IT management. Try that again under management and she joins us here in our broker studio. Mondays are tough, especially with all this.
- [31:32]
Interviewer/Reporter
News coming at us.
- [31:33]
Caroline Hyde
It's a lot. It's a lot. Paisley, good to have you here.
- [31:36]
Interviewer/Reporter
Welcome, welcome.
- [31:37]
Caroline Hyde
Nice to have you in studio.
- [31:38]
Paisley Nardini
Yeah, I was going to say a longtime listener, first time fishbowler. Thanks for having me.
- [31:42]
Interviewer/Reporter
Think of the fish.
- [31:44]
Paisley Nardini
It's not intimidating at all.
- [31:46]
Caroline Hyde
No need to be intimidated. There is a lot coming out. Investors, another record on Wall Street. It's kind of crazy sometimes. Does it feel like things are getting overheated in your view?
- [31:56]
Paisley Nardini
I don't know if overheated is the terminology that comes to mind, but in essence, yes, I think that we.
- [32:01]
Caroline Hyde
What is the terminology?
- [32:02]
Paisley Nardini
I don't know. I'm trying to figure it out still. But let's go go with that for now. I would say the last couple of weeks and months we've been anticipating a bit of a September sell off. A lot of this is driven by seasonality. September tends to be A weak month we had the Fed rate cut. Whether or not that was going to come in at 25 or 50 or not at all, I think left a lot of people with higher levels of uncertainty. Now that that has passed, markets seem to kind of forget about it all, all time highs, as you mentioned, whether it be in small caps, large caps, international stocks and even gold as well. I still think there's some turbulence potentially ahead of us, but tbd and I do think that as it relates specifically to the bond market and as it relates to rate cuts, there's a lot that could transpire in the next couple weeks.
- [32:46]
Interviewer/Reporter
Yeah. I don't think you're the only one who thinks there could be turbulence ahead. What specifically concerns you when you look ahead?
- [32:52]
Paisley Nardini
Specifically, I would say the market's pricing or the expectations for rate cuts over the next six to 12 months.
- [32:59]
Interviewer/Reporter
Was it, was it strange to you that you saw that? We saw with the dot plot. We're not, we're not with the dot plot, but really with the way that the voting members voted last week, it was everybody versus Stephen Myron.
- [33:11]
Paisley Nardini
Yeah. Which I think politically speaking, that was almost to be expected. He was nominated for his dovish tilt and so he came forward with the dissent of potentially looking for two cuts. What concerns me, looking out, is that markets are pricing in anywhere from five to six rate cuts over the next few months. And I think any time when we've seen that aggressiveness of rate cuts, it usually coincides with a recession. So markets have taken these rate cuts and have said this is great for markets, this is offering more support, it's easier monetary policy. And so markets rallied on that. But if we look forward, if we actually get all of these expected cuts that are going right now being priced in, that would lead me to believe that we're headed for a recession. So I think markets are really focused on today versus next quarter and next year. And that's what concerns me right now.
- [33:58]
Caroline Hyde
I mean, Stephen Myron, in that conversation he had with Bloomberg's Soleil Mohe Saleh Mohsen, he was asked specifically about that, about how he could be so upbeat on the economy and expect growth to pick up and yet call for several rate cuts which seem to suggest panic in the economy. And he said he wasn't panicking. But I mean, I mean if we need that many rate cuts, that to me would say signal some. There's some problems in the. Yeah.
- [34:25]
Paisley Nardini
What I think is more likely to transpire is almost exactly what we saw a year ago today, the fed cut by 50 basis points. Markets thought we were on this trajectory of easy policy ahead and markets backed up meaningfully and the economy continued to maintain itself. Markets continued to reach new highs. So what that leads me to believe is the market wants its cake and eat it too. And so if these rate cuts are expected, the market loves that because it's more support. But if they come, if they come to fruition, that's not good. So what I think might happen is a lot of these cuts that are priced in the market might unwind. And that's where I think the volatility could come from the next couple of months.
- [35:04]
Caroline Hyde
So volatility leading to sell off, significant sell off.
- [35:08]
Paisley Nardini
10%. Yeah, I think a healthy sell off at this point in this environment, you know, Whether it's a 10%, 15% drawdown, markets can shrug that off in a couple of days. Any kind of V shaped recovery.
- [35:18]
Interviewer/Reporter
Would you add to equity positions when a pullback like that?
- [35:21]
Paisley Nardini
Absolutely. I am kind of stocks for the long run type mentality. I think fundamentally speaking, corporate resiliency through earnings has been very robust. We started to see maybe some cracks in the labor market, but nothing to kind of pull me off to the sidelines. So any time historically, knowing that we have the Fed to step in, and especially where we are from a rate cutting trajectory right now, a 10 to 15% pullback would lead me to kind of pick up some stocks for cheap.
- [35:47]
Caroline Hyde
I mean, you guys think about, you know, your multiasset solutions. You do have alternative assets. So I'm just curious, when you look at where it's ETFs.
- [35:58]
Narrator/Commercial Announcer
Right?
- [35:58]
Paisley Nardini
Yeah.
- [35:58]
Caroline Hyde
Where is money flowing right now? You've all fixed income, you have equity income, you have equity. Where is money flowing into? Where is money flowing out?
- [36:05]
Paisley Nardini
Yeah, we've continued to see this trend for higher needs for income and distribution yield. If we think about the kind of the wall of retirees and people kind of hitting the baby boomer generation now relying on their income portfolios versus their, their, you know, their paychecks. Higher levels of income in their portfolios is absolutely something that continues to gain steam. And I think it's moving beyond the traditional sources of investment grade or core bonds in a portfolio, even beyond high yield bonds, into more innovative alternative sources of income for portfolios, which is in the way of equity income. So that's where you start to introduce the use of derivatives in portfolios, which.
- [36:42]
Caroline Hyde
Sometimes get scary, is largely going though.
- [36:45]
Paisley Nardini
Into fixed income, into more equity, excuse me, equity income generation strategies as well as, and in that same regard strategies that have buffers or protection, and I like to call them more defined outcomes. Especially when you're looking at kind of where you are in the life cycle of earnings and you're relying on your portfolios to deliver for you, you need increased certainty. And so that's why I think we've seen this boom in the industry of more defined outcome and protection on the downside.
- [37:11]
Interviewer/Reporter
So I want to take a step back and just go kind of go back to the big picture and the concerns that you see ahead. You said a lot of it has to do with rate cuts and not necessarily coming to fruition in the way that people expected them to. What about the idea of concerns over tariffs or these tariffs starting to actually become inflationary like so many people were concerned about?
- [37:32]
Paisley Nardini
I could, I could make an assumption there. I think it's too early to tell. I think what we've seen over the last few months since tariffs were announced on April 2 is that there's a lot of information and then a lot of information gets taken away from us and the new information gets provided. And so markets have really shown almost fatigue or exhaustion around the tariff headlines until we actually have certainty around the size, the scope. I think markets broadly have been kind of shrugging off tariff headlines and that's why we've continued to see all time highs being made across asset classes, sectors and in regions. I think some of that certainty already has come forth, but as it relates specifically to inflationary concerns, the discussion around tariffs kind of being a one time tax versus ongoing, I don't feel like that's an imminent threat to markets and kind of a pullback in the next few months here. Inflation and tariffs. All right.
- [38:25]
Caroline Hyde
Specifically, we're going to leave it on that note.
- [38:26]
Narrator/Commercial Announcer
Thank you so much.
- [38:27]
Caroline Hyde
Really appreciate it. Thanks for having me. Managing director and head of Multi Asset Solutions at Simplify Asset management. More than 10.2 billion in assets under management, that is of about mid September. Joining us here in studio, this is.
- [38:40]
Podcast Host/Producer
The Bloomberg Business Week daily podcast. Available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm eastern on bloomberg.com the iHeartRadio app, TuneIn and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.
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