Neil Dutta from Renaissance Macro Research discusses PCE and rate cuts. Cam Dawson of NewEdge Wealth talks about market pricing. Mandeep Singh from Bloomberg Intelligence breaks down tech earnings. The podcast also covers inflation, wage growth, tech sector strategy, generative AI impact, dining culture in NYC, and global commodity inflation.
Real wages may improve from inflation slowdown, not nominal wage growth surge.
Tech sector shows profit growth with concerns of future deceleration.
Investing in companies with high ROIC is key for sustainable growth.
Deep dives
Market Update and Real Wage Predictions
The podcast discusses the current market status and predictions on real wage growth. Neil Dada from Renaissance Macro emphasizes that real wages might improve due to expected inflation slowdown, not due to a surge in nominal wage growth. Despite strong inflation in Q1, real wages didn't rise much, highlighting the importance of a compositional analysis and careful assessment of data.
Tech Earnings and Market Insights
Cameron Dawson from New Age Wealth Management analyzes tech earnings, emphasizing the operating leverage and profit growth seen in the sector. While concerns about tech earnings deceleration in the future exist, the current strength of tech companies, especially in large caps, is noted. The discussion touches on the balance between tech investments and seeking value in other sectors.
Value Companies, Return on Investment, and Inflation Models
The conversation delves into the importance of investing in companies with high return on invested capital (ROIC) for sustainable growth. Attention is drawn to industrials and services companies showcasing strong ROIC levels. Inflation models, such as the standard triangle model of inflation, incorporating factors like inflation expectations, labor costs, and cost push measures to predict future economic trends, are explored.
Restaurant Reservations and Tipping Trends
The podcast also touches on unique societal trends like students scalping restaurant reservations for profit, impacting the restaurant industry. Additionally, the discussion on tipping complexities reveals that Americans often feel pressured to tip more than desired, leading to an increase in annual tipping expenses and considerations on tipping practices across different cultures.
Coffee Prices and Market Dynamics
An insight into coffee market dynamics highlights the impact of hoarding by Vietnamese farmers on robust futures prices. With farmers withholding a significant portion of the harvest to sell at higher prices, the implications for coffee consumers hint at potential price increases. Commodity inflation trends, such as spikes in cocoa prices, are discussed as factors that could influence consumer spending.
Conclusion
The podcast provides a diverse range of discussions, from market updates and predictions on real wage growth to tech earnings analysis and societal trends like restaurant reservation scalping and tipping pressures. Insights on investment strategies, market dynamics like coffee price fluctuations, and the impact of inflation on consumer behavior offer a comprehensive view of current economic landscapes and challenges.
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Surveillance hosted by Tom Keene and Paul SweeneyApril 26th, 2024 Featuring:
Neil Dutta, Partner at Renaissance Macro Research, reacts to PCE, yesterday's GDP, and outlook for rate cuts
Cam Dawson, CIO at NewEdge Wealth, on how markets are pricing in today's PCE deflator
Mandeep Singh, Senior Tech Analyst with Bloomberg Intelligence, joins to break down yesterday's slew of tech earnings, including Microsoft, Alphabet, Intel, and Snap
Bloomberg's Lisa Mateo with her Newspaper Headlines
