Chip Stocks’ Best Quarter Ever Is Ending With Some Wild Swings

Summary

Bloomberg Intelligence Podcast: "Chip Stocks’ Best Quarter Ever Is Ending With Some Wild Swings"

Date: June 30, 2026
Hosts: Paul Sweeney, Scarlet Fu
Featured Guests: Mandeep Singh (Global Head of Tech Research, Bloomberg Intelligence); Poonam Goyal (Senior US E-commerce & Retail Analyst, Bloomberg Intelligence); Erin McLaughlin (Senior Economist, The Conference Board); Kenshay (Senior Consumer Products Analyst, Bloomberg Intelligence)

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Episode Overview

This episode provides a comprehensive analysis of several major market stories, anchored around chip stocks' record-breaking gains amid AI demand and widening volatility. The hosts and expert guests also dissect Microsoft’s recent struggles, Nike’s ongoing turnaround (especially in China), the pressures and prospects in the beer business via Constellation Brands, and the latest reading on US consumer confidence.

Main Themes:

• Explosive growth in semiconductor stocks driven by AI
• Market skepticism and wild price swings
• Tech giant valuations and future growth narratives
• Nike’s strategic and brand challenges, especially in China
• Changing consumer trends in alcohol consumption
• Mixed signals in US consumer confidence

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1. Chip Stocks’ Rally & the AI Frenzy

(02:00 - 07:30)

Key Discussion Points

• Record-Breaking Quarter for Semiconductors:

  • The sector is driven by unprecedented demand for AI equipment and infrastructure.
  • Companies like Nvidia and TSMC are capturing massive backlog orders and revenue visibility, surprising even bullish forecasts.
  • Nvidia alone claims up to $1T in revenue visibility over the next 6-7 quarters.
  • Expected AI infrastructure “spend” could reach 3–4 trillion dollars by 2030.

• Wild Price Swings and Market Exuberance:

  • The Philadelphia Semiconductor Index (SOX) is up 99% YTD.
  • Market is struggling to find floor/ceiling for valuations, especially for AI-exposed semis.

Notable Quotes

• “[Nvidia has] up to a trillion-dollar in revenue visibility through the next six, seven quarters. When Jensen says we will have three to four trillion dollars in spend by 2030…you start to believe it may actually come true.”
  — Mandeep Singh (02:28)

• “Demand has been off the charts. How quickly it's realizing into top-line growth…that's where the market has been positively surprised.”
  — Mandeep Singh (03:00)

• “At some point, I don't think the memory price increases that we just saw from Micron are sustainable...I feel that pricing lift is not sustainable, it's a matter of a quarter or two before we start to see tapering.”
  — Mandeep Singh (04:50)

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2. Microsoft & Hyperscaler Tech Stocks: Risk and Opportunity

(05:07 - 07:30)

Key Discussion Points

• Microsoft’s Stock Slide:

  • Down 23.5% YTD, in stark contrast to chipmakers.
  • The exclusive partnership with OpenAI is no longer unique; OpenAI now partners broadly.

• Competition & Market Narrative:

  • Microsoft lags in AI model development—no proprietary LLM to match Google’s Gemini.
  • Azure cloud growth is trailing Google Cloud.
  • Investor narrative is currently negative, but Microsoft’s core businesses still show strong growth.
  • The market may not be pricing in cloud backlog potential.

Notable Quotes

• “Microsoft had that exclusive tie-up with OpenAI, which is not there anymore...and OpenAI is not the leading model anymore. It's Anthropic.”
  — Mandeep Singh (05:16)

• “For a company of Microsoft’s size to grow high teens at 20% is still phenomenal growth...Narratives get formed...Come the earnings season, they’ll probably prove the naysayers wrong.”
  — Mandeep Singh (05:56)

• “If you factor that backlog number in for someone like Microsoft...it's my payday, this company will be much bigger in revenue than it currently is and probably surpassing $500 billion at some point.”
  — Mandeep Singh (06:40)

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3. Nike’s Global Turnaround: Promise and Pitfalls

(10:04 - 16:36)

Key Discussion Points

• Turnaround in Progress, with Significant Challenges in China:

  • North America business stabilizing, but China remains a major drag (high-teen declines expected).
  • China is Nike’s most profitable region; no clear turnaround timeline.

• Brand Position and Competition:

  • Nike now faces more direct sport and lifestyle brand competition (e.g., Adidas, Skechers).
  • Product innovation is crucial, especially in the women’s segment (adding stars like Caitlin Clark and partnerships with Skims/Kim Kardashian).
  • Image in China still hampered by discounting and excess inventory.

• Investor Concerns:

  • Stock performance stagnant; investors need clearer guidance, especially on China strategy and upcoming analyst day.
  • Tariff refunds could inject cash, which may be reinvested or used to offset previous price hikes.

Notable Quotes

• “The China focus is the largest focus when they report earnings. When will China turn is the biggest question. We don’t think it’ll turn anytime soon...”
  — Poonam Goyal (10:32)

• “Nike has allowed competition to encroach in their space and now they have to win it back, whereas before they just had it.”
  — Poonam Goyal (14:06)

• “Having Caitlin Clark added to their roster is a nice win...to gain momentum in the women’s category.”
  — Poonam Goyal (14:37)

• “Skechers is in the value lineup...But when you think of the Nike’s premium line, they do have a stronger foot there.”
  — Poonam Goyal (15:36)

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4. Constellation Brands (Modelo, Corona): Navigating Industry Headwinds

(20:22 - 24:47)

Key Discussion Points

• Shifting to Beer:

  • Beer now 93% of Constellation’s sales, as wine/spirits become a smaller focus.

• Industry & Demographic Headwinds:

  • Changing millennial/Gen Z and GLP-1 drug user habits are reducing alcohol consumption.
  • Legal cannabis is a drag on beer sales.
  • Beer prices have soared with inflation, causing sticker shock.

• Tariffs and Consolidation:

  • Aluminum can tariffs have just ended, but the operational/accounting relief will be partially offset by depreciation charges from expansion projects.
  • Further industry consolidation unlikely; Constellation is already #2 in US beer share.

Notable Quotes

• “Beer prices have gone up pretty significantly over the last few years...a lot of beer drinkers are getting sticker shock when they go to pick up a six pack.”
  — Kenshay (21:31)

• “Gen Z is not drinking as much as their parents. Legal cannabis is now easily available...Ozempic and the GLP-1 drug users have cut back.”
  — Kenshay (21:38)

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5. US Consumer Confidence: A Mixed Picture

(27:55 - 31:27)

Key Discussion Points

• Latest Confidence Data:

  • Consumer Confidence ticked up to 91.2, beating the previous month, but slightly below consensus.
  • Lower gas prices, hopes for peace in Iran are cited as supportive factors.

• Outlook & Risks:

  • Expectations about the future (six months) have improved (up 3%).
  • Concern lingers over job availability and labor market outlook (“perhaps a little bit more difficult to get a job”).
  • 61.5% of consumers expect higher interest rates over the next year, underscoring fears of persistent inflation.

Notable Quotes

• “Consumer confidence up 0.6% and we’re really thinking that the consumer was feeling some optimism because gas prices have been trending down for six weeks.”
  — Erin McLaughlin (28:19)

• “The only sort of negative that’s coming up is that consumers are thinking that the labor market, that maybe there aren’t as many jobs that are going to be open in the future.”
  — Erin McLaughlin (30:02)

• “Consumers do expect higher interest rates over the next 12 months...they see it themselves at the grocery store, the gas pump and with their own utilities.”
  — Erin McLaughlin (30:46)

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Memorable Moments & Takeaways

• Chip sector’s ongoing “picks and shovels” dynamic: Massive AI-driven demand is filtering more into chip suppliers than the big AI spenders or hyperscalers themselves. (03:52-05:07)
• Nike’s ‘women’s momentum’ and challenges in China: Innovation alone is not solving Chinese market woes; local brand perception and partnerships need work. (10:32-13:54)
• Consumer Fatigue: Beer, gas, and groceries are all locations for sticker shock, while new health trends (GLP-1s) and cannabis shift entertainment dollars away from traditional categories. (21:31-22:33)
• Labor jitters amid optimism: People believe things won’t get worse, but also think it may get tougher to find a job. (30:02–30:46)

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Timeline of Important Segments

• [02:00] Chip stocks’ wild quarter & expert analysis (Mandeep Singh)
• [05:07] Microsoft/Azure’s growth & narrative vs. Google
• [10:04] Nike’s China story & strategic headwinds (Poonam Goyal)
• [20:22] Constellation Brands and Beer Outlook (Kenshay)
• [27:55] Conference Board Consumer Confidence & Outlook (Erin McLaughlin)

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Conclusion

This Bloomberg Intelligence episode serves up expert context for some of the market’s most volatile and misunderstood segments—from the high-flying, AI-fueled semiconductor sector to the decidedly rockier turnaround stories at Microsoft and Nike. Changing consumer behaviors and economic sentiment are woven through every story, underscoring both the opportunities and the risks that investors face moving into the second half of 2026.

For deeper dives, quotes, and company-level analysis, the timestamped sections provide a rich guide to the episode’s essential content.

Transcript

[Brookfield Representative]

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[Paul Sweeney]

Chip stocks are heading for their best quarter ever, driven by demand for artificial intelligence equipment. But investors are wondering how much further the rally can go, so let's put it to an expert. Mandeep Singh, global head of tech research for Bloomberg Intelligence, joins us here. I mean, what's going on with the world of chips? Is it just. I don't get it. I mean, is it just this supply and demand? There's not enough supply and so anybody who's got them is in the driver's seat in terms of pricing.

[Mandeep Singh]

I mean, more so I would characterize it as A lot of these companies have huge backlog numbers, notably Nvidia, which has said they have up to a trillion dollar in revenue visibility through the next six, seven quarters. So when you have companies guiding like that and all the hyperscalers which are spending money on these chips, they have an aggregate backlog of 2 trillion. Now when Jensen says we will have 3 to 4 trillion dollars in spend by 2030. I think, you know, when you look at that backlog number, you start to believe that may actually come true. And Nvidia is at the forefront of monetizing that sort of demand. So there is no doubt that AI has had an inflection point in terms of usage and inference. Demand has been off the charts. But how quickly it's realizing into top line growth for some of these companies, I think that's where the market has been positively surprised. And that's why you see estimates continue to go up.

[Bloomberg Intelligence Host (Co-host)]

The Philly Stock Exchange semiconductor index up 99% year to date. Is there any, I don't mean to put you on the spot here Mindy, but if anybody's going to know it, it's you. Is there any company here that's not participating in this chip party?

[Mandeep Singh]

I mean a lot of the hyperscalers stocks haven't done well. Microsoft even I would say Meta Google. And look, some of it is because these are the companies that are actually spending the money. Even though I cited that backlog number, the market is still not giving them the credit for that backlog because they want to see real revenues. Who has real revenues? It's your Nvidia's, the TSMCs, the semicap guys. And so from that perspective that picks and shovels trade has worked phenomenally well over the past two years and it continues to do well just because of the duration of this cycle and you know how big this technology cycle is proving to be. At some point I don't think this memory price increases that we just saw from Micron are sustainable. In fact, Samsung and SK Hynix talked about investing 800 billion plus in Korea. So there is talks about adding more supply and then doing those long term agreements to cap the pricing. So I feel that pricing lift is not sustainable and it's a matter of a quarter or two before we start to see, you know, some tapering of that.

[Paul Sweeney]

Microsoft down 23 and a half percent year to date. What's the street, what's the street call on this? Why is the street marking this one down?

[Mandeep Singh]

Well because Microsoft had that exclusive tie up with OpenAI which is not there anymore. OpenAI as you know, is now on Amazon. They're really partnering with any and everyone and OpenAI is not the leading model anymore. So it's anthropic. And anthropic was predominantly Google and Amazon and now they have started to use Nvidia. So from that perspective, Microsoft not having their own LLM like Google, which has got Gemini has put them at a disadvantage and the narrative right now is the cloud. Azure growth is also trailing Google cloud and so they seem to be slipping behind when it comes to the hyperscalers. Now I think for a company of Microsoft size to grow high teens at 20% is still phenomenal growth and you still have Office 365. That will be a net beneficiary of Agent Tech AI. So look, narratives get formed. That's where we had the SaaS apocalypse. Microsoft was caught into that as well. And come the earnings season they'll probably prove the naysayers wrong in terms of their top line momentum.

[Bloomberg Intelligence Host (Co-host)]

You're talking about a $2.7 trillion company when you're talking about Microsoft. So what's the word on the street at about 370 bucks. Is there value here getting in at this level with Microsoft?

[Mandeep Singh]

I mean from a valuation perspective, all these hyperscalers are trading at probably below their average multiples that they have traded over the last three years. So from that perspective, if you factor that backlog number in for someone like Microsoft, which has a $500 billion plus backlog number for their cloud, if that backlog translates into revenue growth, you know, it's my payday, this company will be much bigger in revenue than it currently is and probably surpassing $500 billion in reven some point. So if you believe in that growth story, then yes, the multiple is cheap. But if you think anthropic and open AI are going to take a share of Microsoft's on prem revenue and you know, disrupt cause a much bigger disruption, then I think that's where you model for the downside.

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[Paul Sweeney]

Let's talk about Nike. They're gonna be reporting some earnings here. They've got a turnaround. I think it's been a lot bumpier than they thought, than a lot of investors thought. I'm a Nike, you know, endorser. I wear my Nikes all over the place. But apparently there's a lot more competition out there. Poonam Goyal joins us, senior US E Commerce and Retail Analyst at Bloomberg Intelligence. Puno, give us the latest on the Nike story. Where is the company these days?

[Poonam Goyal]

The company is still under a turnaround. North America is back on its feet. We're expecting positive sales when they report this evening. However the rest of the world is not. Notably China, where we're expecting a high teens sales decline when they report the China focus is the largest focus when they report earnings. When will China turn is the biggest question. We don't think it'll turn anytime soon, but we do think that they'll make progress over their fiscal 2027 year and hopefully in it will be in the same place as North America is today.

[Bloomberg Intelligence Host (Co-host)]

Talk to us about Nike as it pertains to the World Cup. Are they still sort of the force they once were when it comes to this sport.

[Poonam Goyal]

So. So they are. You know, I'd say they're on equal grounds with Adidas, with the exception that Adidas has the ball. So they do have some elevation to Nike when it comes to the World Cup. You know, when you think of Nike, World cup has become more adjacent to when you think of Nike then I'd say it was in the past where you would associate Nike more with basketball. Adidas has definitely lost some share over the prior years before the current CEO to Nike. Right now, I'd say they're neck and neck and they're definitely still in the game.

[Paul Sweeney]

What is the issue for Nike in China? What's going on over there?

[Poonam Goyal]

So there's a lot happening in China that they need to fix. The first thing that they need to fix is the inventory. There's too much inventory on the floor in China. They need to do exactly what they did in the US which is clear that inventory, get it out of the market and then bring in more new inventory that resonates with the consumer. That's seen to be more what the consumer wants. How they do that in the US when they did that, they did it more through their direct to consumer channels, which is probably the right approach. And the second thing that they need to do is cut back on the discounting. For the longest time in China, Nike has been seen as a discount brand and that's not the case here. When we think of Nike, we do not to think of a discount athleisure brand. So they need to turn that image and they need to use local endorsers, local athletes, local celebrities to bring the brand heat back into the China marketplace with the new products that they launch.

[Bloomberg Intelligence Host (Co-host)]

Poonam. I'm looking at year to date numbers for Nike and they're not pretty. Down 36% one year return down 42%. The stock is down more than 1% here ahead of its earnings. After the bell, what do investors need to hear from this company to start to turn the stock around and get people to want to buy again?

[Poonam Goyal]

I think China, it's a China story. You know, the turnaround is taking a lot longer than anyone has expected. It is true that they turned the biggest ship around, which is North America, but China is their most profitable region and there is no line in sight on when China will improve. It's still very early days. We're awaiting their investor day in the fall to really get a better idea of their own outline for the next three to Five years. I think right now the question is, will they still have that investor day? So there's two. Two things that I'm looking for when they report today. Update on China and an update on their investor day. They just hired a new cfo. So will that, you know, investors are asking, will they still have their analyst day.

[Paul Sweeney]

Has Nike lost its mojo in terms of product development, knowing what's hip, what will sell, all that kind of stuff that I think a lot of people associate with the brand?

[Poonam Goyal]

I don't think it's that Nike's lost its mojo. I think that, like, Nike has allowed competition to encroach in their space and now they have to win it back, whereas before they just had it. So they definitely are pressing the pedal on innovation. We do see that what they're launching is working and it's doing really well. They just have to move faster.

[Bloomberg Intelligence Host (Co-host)]

Who are some of their biggest endorse? Who do they have deals with right now in terms of endorsements?

[Poonam Goyal]

Nike, do you know, they have, you know, the biggest. Their biggest franchise is still the Jordan franchise, right?

[Aaron McLaughlin]

Sure.

[Poonam Goyal]

So we know. We know that's the biggest. Caitlin Clark. I think it's the one name that's new to them, and I think it's an interesting one because it helps them gain momentum in the women's category. So when you think of Nike, it's profoundly been a men's business. You know, lots of endorsers across the men's lineup, basketball, etc. So having Caitlin Clark added to their roster, I think is a nice win for them. Also, Kim Kardashian, right, with the Skims brand. So that line that they partnered with Nike on, I think these are some new and great partnerships that will help them not just gain visibility in the sportswear market, but also with women, an area where there is no large lead that Nike has like it has in the men's world.

[Bloomberg Intelligence Host (Co-host)]

Right. You know, you were talking about letting the competition sort of encroach. And Paul, you and I were talking about OG Anunoby on the Knicks wearing Skechers during that pivotal moment right. In Game four. I mean, now you've got another brand in there, I guess put them that maybe Nike wasn't, you know, didn't see coming. Oh, boy. Now we have to compete against Skechers.

[Poonam Goyal]

I'll tell you, I definitely didn't see that coming. It was. It was definitely when I saw that, I thought, wow, Skechers did it. I think, look, I think Skechers is in the value lineup, right? So when you think of Skechers, I'd say it competes with Nike's shoes that are priced under $100. But when you think of the Nike's premium line like the Pegasus Premium and others, they do have a stronger foot there. And I do think that as long as they continue to push innovation and not fall back like they did in the past, I think Nike still has mind share amongst the consumers. When we run our biannual survey on sneakers, Nike's still the top preferred sneaker brand of choice amongst consumers.

[Paul Sweeney]

So you know we don't talk to you much about anymore Poonam and we used to talk to you a lot about it. Is tariffs. Is that just in the rearview mirror for your retailers? Have they kind of just figured it out and it's all kind of in the soup right now.

[Poonam Goyal]

So they figured it out. But the nice thing, Paul, and what we're watching for in earnings is the refunds. So the refunds are starting to come in and Nike quietly in its CFO announcement also announced that it'll get a benefit from refunds. A one time benefit. We don't know the amount yet, so that's another thing that we'll be watching for. But we do expect retailers in the back half to start talking about these IPA refunds and what they plan to do with that cash. Are they going to reinvest it in the business? Are they going to give it back to the consumers? Because as we know, Nike did raise prices due to tariffs. So do the prices go back to the consumer or do they get reinvested into innovation?

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[Paul Sweeney]

Earnings continue to kind of trickle in here. Coming up after the close today, Constellation Brands, I think beverages, think booze, all that kind of good stuff they're reporting after the close today. Stocks off a couple of percent today, flat on the year. It's got a market cap of about 23 and a half billion dollars. Kenshay joins us here. Senior Consumer Products Analyst at Bloomberg Intelligence can remind us what Constellation Brands is and kind of what are you expecting after the close today?

[Public.com Legal/Compliance]

Yeah, hi Paul. Well, Constellation Brands is best known for its family of Modelo Corona beers. Yeah, they've been slowly downsizing their wine and spirits division. Beer now comprise about 93% of their sales. So it's all about beer right now, for this company, it's so funny.

[Bloomberg Intelligence Host (Co-host)]

We were just talking this morning on surveillance about beer sales going through the roof in places like Massachusetts because of the World Cup. So I have to think that's, you know, that's a good thing for some of these beer companies. But overall, is Constellation brand suffering from. I think what a lot of these alcohol companies are suffering from is just a change in consumer behavior, especially younger folks just not drinking as much as we've seen other generations do.

[Public.com Legal/Compliance]

Yeah, I think you're right, Alexis. That's certainly a big piece of it. It's hard to quantify how much of it is, but I think the companies are slowly conceding that demographic changes are occurring in this country. You know, Gen Z is not drinking as much as their parents. Illegal cannabis is now easily available in most places around the country. You know, ozempic and the GLP1 drug users have cut back. All those things continue to pressure this industry. But also, you have to, you can't forget also the cumulative effect of inflation. I mean, beer prices have gone up pretty significantly over the last few years to the point where a lot of beer drinkers are getting sticker shock when, when they go to pick up a six pack or a 12 pack or whatever. All those things are conspiring to put pressure on this industry. And we think this is going to be a quarter where the company will say, you know, we're dealt with a challenging industry, we're doing well within this, you know, tough group. But nevertheless, it's hard to overcome those kind of pressures.

[Paul Sweeney]

Modelo and some of those beer brands that appeal to minority Hispanic community. How's that being impacted by the change in immigration?

[Public.com Legal/Compliance]

Well, we're going to get a good barometer of that today over the last year or so. You know, the immigration crackdowns in a lot of these communities have put a real damper on, you know, the, that that group's willingness to socialize and beer is a big part of that. But now we're facing comparisons versus that last year. I think probably on a comp basis we're probably almost less of a factor. I think more of a factor will be some of the items that I mentioned before. Also we see the Hispanic demographic employment rates have improved over the last few months and quarters. So I don't think that's going to be as much of a drag as the last few quarters.

[Bloomberg Intelligence Host (Co-host)]

Ken, what about tariffs? Are they a story for Constellation brands?

[Public.com Legal/Compliance]

You know, it had been up until about April six was the date that they no longer apply now this quarter ends May 31, so they're not going to get the full benefit of the end of those aluminum can tariffs, but it will be better than a year ago. You want to look at it that way. Unfortunately, though, to a degree, you know their big new brewery down in Mexico of aircruise is going to take up higher depreciation charges. So in an accounting sense, you're going to get higher depreciation charges offsetting a lot of the benefit of the tariff costs. So it's going to be a lot of mixed messages in this quarter. But when the dust settles, I think you get a they're going to eke out a modest margin improvement this quarter, which I think will be perceived positively.

[Paul Sweeney]

Ken, we've seen a lot of consolidation in the beer business. Is Constellation a potential target?

[Public.com Legal/Compliance]

I don't think they are, Paul. You've seen so much consolidation in the beer market to the point where I don't really envision it going forward here in a big way. I don't think this is going to be a play. This is the number two brand, number two company. They have 20, almost 23% dollar share of the beer market markets behind only Anheuser Busch's 33%. So I don't see it. It's already pretty, pretty consolidated.

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[Public.com Representative]

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[Bloomberg Intelligence Host]

you're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcast podcasts or watch us live on YouTube.

[Paul Sweeney]

Let's go to this economic data. The conference board came out confidence 91.2 was the reading. The consensus was 94.4. So that's a little bit disappointment, but it's better than last month which was Revised down to 90.6 years. So maybe some lower gas help there. Erin McLaughlin, she's a senior economist at the Conference board. Aaron, what do you make of some of the data you guys put out today?

[Aaron McLaughlin]

Hi Paul. Well, you know, it is ticked up a little bit. Consumer confidence up 0.6% and we're really thinking that the consumer was feeling some optimism because gas prices have been trending down for six weeks. Our consumer confidence survey was taken June 1st through 23rd, so they felt some optimism with the Iran war perhaps getting a deal coming to the end. So we think that that's really what what what helped the survey.

[Bloomberg Intelligence Host (Co-host)]

Yeah, gas prices down 12% in just the past month now at around 385 I believe a gallon for for a Gallon of unleaded.

[Paul Sweeney]

Very good.

[Bloomberg Intelligence Host (Co-host)]

So after, you know, spending quite a bit of time above $4 a gallon. Aaron, tell us about how folks are feeling when it comes to six months from now because I know you also look at expectations for what's happening in the not too distant future. Are people feeling more optimistic about the future?

[Aaron McLaughlin]

They are. So our expectations index went up 3% and that is looking, you know, asking consumers to look forward 6% from, I'm sorry, six months from now. And you know, I think that they really, this speaks to the consumer being very, very resilient and they don't imagine that things are going to get worse perhaps in six months. And so we don't anticipate any big changes of that. And overall, you know, the, the what we saw in the consumer confidence index is typical to what it's been the last year or so overall.

[Paul Sweeney]

So when you think about consumer confidence, what are the key, key drivers there, Aaron, for your model as it relates to maybe employment, inflation outlook, things like that.

[Aaron McLaughlin]

Right. So with the present situation, they are sort of measuring business and labor market conditions and same thing for themselves when they think about their own employment. And I will say that's really the only sort of negative that's coming up is that consumers are thinking that the labor market, that maybe there aren't as many jobs that are going to be open in the future, it might be a little bit more difficult to get a job. So that is sort of the negative that's sort of coming through because.

[Bloomberg Intelligence Host (Co-host)]

Yeah, I mean, you were just talking about your measure of expectations actually rising 3%. I think that's pretty, that's a pretty big jump. But the indicator of present conditions actually fell. And is it concern over jobs that sort of led that drop?

[Aaron McLaughlin]

Yes, it is. So consumers felt, you know, that they see that business conditions and labor market conditions are a little bit weaker and that could be them speaking to higher prices and also labor market conditions. It's also interesting to see that, that consumers do expect higher interest rates over the next 12 months. And that is something that we ask. And so that's 61 1/2% expect in 12 months that interest rates could be higher. So I think that consumers know that inflation is persistent. They hear that, they understand it and they see it themselves at the grocery store, at the gas pump and with their own utilities.

[Bloomberg Intelligence Host]

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon 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.

[Paul Sweeney]

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