With Fed Pause Likely, Here Are Ideas for Your Cash

Income is back and Van Eck has you covered with VETF to bring income to your portfolio. With Van Eck's Income Investing Yield Monitor at ThinkYield.com, you can easily track Van Eck's ETF yields, monthly flows and performance of each income ETF category. Explore Van Eck Income ETFs at ThinkYield.com. Investing risk includes principal loss, past performance is no guarantee of future results. Visit Van Eck.com to view a prospectus that includes investment objectives, risks, fees, expenses and other information that you should read and consider carefully. Van Eck ETFs are distributed by Van Eck Security Corporation, a wholly owned subsidiary of Van Eck Associates Corporation. The race to shape Africa's future is a contest for influence, access and alliances across the continent. Rich in culture, abundant in natural resources and bursting with human potential, Africa is primed to become the next hub of global industry. On June 13th and 14th, Bloomberg New Economy gathers leaders to confront the pressing issues facing Africa's economy. Rising food and energy prices, supply chain shocks and financial constraints. Request an invitation to the live event in Morocco at BloombergNew Economy.com. Welcome to What Goes Up, a weekly markets podcast. Humble down a higher markets reporter with Bloomberg. And I'm Peyton Forte, also a markets reporter with Bloomberg. And this week on the show, we're talking to the chief investment strategist at a major bank who's looking at financial conditions tightening, interest rate sensitive sectors getting hit and corporate profits deteriorating as signs of an impending US recession. But first, Peyton, it's your first time on the show. Welcome. I'm so happy you could join us. And the listeners should know you and I are on the same team. I know you pretty well, but they do not know you. So this is your chance to introduce yourself and share your deepest, darkest secrets with us. Yeah, so long time listener, first time host. So I appreciate you for having me on. I don't really have that many deep, dark secrets. But what I can tell the people is that I'm always teaching Vildana, Gen Z terms for her to sprinkle into her podcast. And I have yet to hear one. So when I said deep, dark secret, I meant secret about you, not about me. My secret about myself is that I teach you things and I teach you things for you to go out into the wild, men assimilate with the youth. You know what I mean? Assimilate with the youth. Yes. You've taught me a lot of no printer. Riz. No cap. What does no cap mean? Have you taught me no cap and I forgot? Yeah, I have. What is no cap? Just no lie. No lie. No lie. No cap. No cap. Our guest is waiting for us right now. How's that? That was beautiful. Thank you. I want to bring in Tom Kennedy, the chief investment strategist for Global Wealth Management at JP Morgan. Tom, welcome to the show. Thank you for having me. Excited to be here. You have this really, really cool background and biography that your team sent over where we found out that you spent years working with the Fed. So I'm hoping you can just tell us a little bit about your background and what your role entails at JP Morgan. Absolutely. I joined JP Morgan about five years ago on the chief investment strategist and wealth management, as you said. Prior to that, had the luxury to work for the Feders or Bank of New York in a unique markets role that helped the FOMC start every FOMC meeting. And you may say, well, what's so interesting and exciting about that, the way the FOMC starts its meeting is the sole portfolio manager gets up and lays out what markets are expecting from the economy and what markets are expecting the Fed to do. The Fed calibrates its policy and maybe dials up expected growth or dials it down or dials up expected inflation or down by changing financial variables. So you have to have a baseline of where you are. I was part of the team that had the luxury to write and research that piece of just bringing statistical techniques to decide what is in the price. Some of the luxury I think that fords are JP Morgan clients, this framework of what's in the price. I have to be honest, I think that's so cool. That's like the coolest little bio bit I've ever heard of. I agree with you, but I loved it. It really is transformative, I think, for how we're trying to bring markets and investment opportunities to our clients at JP Morgan. Many people flex their muscles and say, I know what's going to happen and listen to me to be really good on Wall Street. You got to get maybe 60% of your calls, right? So nobody's that big in bravado. By starting with what's in the price, you actually allow yourself to find a symmetries in expected investment returns without having to even introduce the bravado. The bravado helps you inform a decision, but it's not the sole basis for the decision. I have a severely burning question. I wonder, do you ever look at Fed speak today and find yourself going, hey, that sounds like something. That would have written or I think I would have did that a little bit better. I think everyone on Wall Street would say they read something from the Fed and either agree, disagree with it. I do think my training there has a unique perspective in that sometimes I can tease out what they're trying to do a little bit better. For instance, in this environment, what they're trying to tease out is, do we need to hike again in June or can we be done? So some Fed policymakers are coming out and suggesting, well, rates are restrictive enough. Here's my evidence. Maybe we don't need to hike anymore. While others are maybe taking the other side of it and you can see how the market responds to it. I'm describing a dance that the Fed does with the market and they have to do this because it's the only way their policy can transmit. It's an interesting time, Payton. Your question is important because it's quite likely we're at the end of the hiking cycle. That's what the market price is. I think that was the right conclusion out of the May FOMC meeting. But now the Fed can start to use its communications to figure out if that's exactly right and if the market exactly agrees. OK, that's really awesome. You can sort of take little hints of what they're trying to tell us. But so when it does come to your own projections and JPMorgan's projections, I think earlier this week, we had a story saying, JPMorgan is saying that the market is right to be pricing in rate cuts. So can you maybe just talk about what you foresee happening when it comes to what we should be expecting from the Fed? The Fed, I think, has been on a five step journey to bring inflation down towards trend. The first step is to tighten financial conditions. They primary tool to do that is to high grades. And for all of us, regular people, that should change your decision. Step two is those rate hikes impact the most interest rate sensitive sectors of the world. When interest rates go up, housing is the part of the economy that tends to respond first. Home sale prices in America are going down sequentially. Not a lot. Home prices went up a lot. They're coming down a lot. They're coming down a little bit. But it's evidence now that rates are high enough and people need to change their decisions. And that's the shortest interest rate cycle. But then imagine you walk into a branch, one of JP Morgan's best branches and say, I want to buy a home. We'll lock your mortgage rate for 90 days. I've done that with you guys before, by the way. Come on back for another one. But it's a very short cycle and we have seen the impact there. So step one is raise rates. The Fed did that 500 basis points. Step two is the most interest rate sensitive sectors respond. We're there. Step three is now those high rates have to impact corporations. How do we do that? Or how do rates do that? Higher rates actually limit the ability to borrow money and do capital investment. JP Morgan does billions of dollars of capital investment every year. If rates are too high, we can't borrow and can't do the capital investment. If that's true, we're taking money or revenue from another business and so on, you go through the economy. We're in that phase. And when revenues in the system start to slow, as we've seen in the SP500 as an example, in Q1, revenues relative to year going down 4%, give or take. What do businesses do? They tend to defend their earnings and they can either cut cap X more or more likely end up having to do some sort of layoffs. And then finally inflation comes down. So a five step process, I think we're about halfway there. We should expect to see, I think, some level of layoffs in the back half of this year. Yeah. Earlier this week, we had Muhammad Illerian on Bloomberg television recently. And he said that a strong consumer, coupled with a weakening global economy kind of makes it difficult to determine the right level for US rate and also inflation. And I was just wondering if that is a view that you hold as well. I think it very hard to calibrate for an economy that's 350 plus million people. What's the interest rate that's right? And what's the interest rates that's high enough that changes people's behavior? Peyton, if we go to that five step process, the point of changing interest rates is to cause all of these other steps to do something different. But when you're a regular person, you don't think like that, you don't worry about, oh, is my checking account getting me 0% today versus 1% next year, what it may be. It takes time to move through the economy. I think it's probably the biggest reason why we get recessions, right? It's hard to know exactly what the level of interest rates that is right. When we look at the world right now, I think we're getting very compelling evidence that rates are high enough. And it will just take time for inflation and growth to come down. A couple of really important points for us. Like, first of all, banks have failed in America. Banks are not supposed to fail. So something is happening there. And at the very least, rates being high has made them on uneven ground. You can look to the housing sector like we talked about, home prices sequentially declining. You can look to the consumer. I think I agree that consumers in good shape right now, but you're getting evidence that they need to turn to debt to get their lifestyle to where they want it to be. The link when he's for autos, the link when he's for credit cards and is moving up. So I am getting evidence that rates are high enough. Are they too high? Peyton is your question? Don't know. Well, they need to stay at this level for a longer period of time than say the next six months or eight months, which is our base case that they will. It's unclear. That's that's the question. OK, so I love that you have these different checklists. Like you have the checklist of what the Fed pause checklist. You also have a checklist of like the things you're watching for a US recession. I love it because it's exactly how my brain works too. Like I love to check those things off. So tell us about the US recession roadmap that you have and the different items that are part of it. Those five items are financial conditions, the most interest rate sensitive sectors and the corporate sector. From here now, it's how long do you stay with the corporate sector? How long is the corporate sector able to absorb high interest rates? And at what point do they move to step four, which is the layoffs? Well, Donna, I'm glad you brought us back to this point of the five steps because a lot of folks will look at the tech sector and say, well, tech already did its layoffs. They've already done with the recession. And that's entirely possible. It's also possible that tech needed to adjust its business model or defend its earnings because maybe some of those businesses miscalculated what the world would do coming out of COVID. On Wall Street, people will call this like a bullwhip phenomenon where you expected revenues to go up at double digit rates. But wow, the Fed either hiked rates or consumers just rotated away from your business. Revenues came down, but you had too many expenses for that revenue to come down. It's possible some of those businesses went through their own micro recessions, but they haven't been through their macro recession yet. I would circle this as the most important economist conversation to be had right now. Are we about to walk into a big macro recession where broad layoffs happen or can you keep these micro recessions like we saw in tech? And not have broad base layoffs from the recession roadmap coming back to your question. More likely than not, we think you're going to see a layoff cycle. Don't think it's going to be crisis like not 2008 like, but nonetheless, you will most likely need to see people lose their job for there to be confidence that inflation won't just pick right back up again. Where do you see the unemployment rate taking to then in that case? In our baseline scenario, we have it going to five, five and a half percent. Now, not incredible precision in what that might look like, but again, bias is a real thing. And a big part of our process, the checklists, the this what's in the price framework are meant to remove bias from our investment decisions. Everyone has bias, but we have a recency bias that goes on of, oh, it's going to be the same as 2008 or even worse, it's going to be like COVID. Again, I don't think people are making that comparison, but the unemployment rate going up two and a half, three percentage points is pretty average going back for non-crisis recessions. And those were traditionally monetary policy induced like what we expect this one to be. The important, sorry, they'll go to the last point of the year. I think you really need to see the layoffs in certain sectors, places like manufacturing, like construction. And unfortunately, probably in financial services to really feel like this broad base reset happens. And that if and when the fed cuts rates inflation will stay at 2 percent rather than inflect higher up towards 4 percent, something like that. Income is back and Van Eck has you covered with VETFs to bring income to your portfolio. Find the yield duration and credit exposure you're looking for from Van Eck's range of income focused ETFs, which includes municipal bonds, corporate bonds, international bonds, equity income, floating rate instruments and multi asset income with Van Eck's income investing yield monitor at thinkyield.com. You can easily track Van Eck's ETF yields as well as the monthly flows and performance of each income ETF category. Take advantage of the back to income play, explore Van Eck's income ETFs at thinkyield.com and find the right ETF for you. Investing risk includes principal loss, past performance is no guarantee of future results. Visit Van Eck.com to view a perspective that includes investment objectives, risks, fees, expenses and other information that you should read and consider carefully. Van Eck ETFs are distributed by Van Eck Securities Corporation, a wholly owned subsidiary of Van Eck Associates Corporation. There's so much news happening around the world that we're somehow supposed to stay on top of. That's why we launched the Big Take. It's a daily podcast from Bloomberg and iHeartRadio that turns down the volume a bit to give you some space to think. I'm Wes Kosova. Each weekday I dig into one important story and talk about why it matters. Listen to the Big Take on the iHeartRadio app, Apple Podcasts or wherever you listen. And you said that in your view, if we do get this macro recession, it won't be crisis like we seen in 2008. What makes you think this time is different? It was a much more defensible statement to be said on March 1st of this year. Banks failing really challenges that thesis and I think we should acknowledge that. But the key pillars, even prior to March 1st, I think are still there. One, corporate leverage is sustainable or at least not overly levered from what we can see in investment grade and high yield businesses. These are interest coverage ratios that are manageable or at least average relative to history. Let's look at the consumer. The consumer is not over levered to their big durable purchases, things like houses and secondarily to auto purchases. It doesn't seem third-prong that there is much excessive leverage in financial markets. Remember, an investor can have excess leverage on as well. Now, those are the visible places, right? And it was all predicated on March 1st, like, thanks for failing at that time. So there are vulnerabilities that are out there that could accelerate a recession. But even if you get a recession, it doesn't look like you have a major deleveraging cycle that needs to follow. It gives us some confidence, Peyton. The asterisks is, though, when rates are very high, your vulnerabilities get exposed. I think it's quite common on Wall Street for people to say the banks that have failed so far were unique and they were mismanaged. That all may be true, but those things most likely could have gone on for a long period of time if the Fed funds rate wasn't at 5%. And the assets that were on their balance sheet weren't trading below par and there wasn't susceptibility to deposit flight. So it's a recipe. It's a mixture of things. It's not just one unique situation. And, quite frankly, the banking stress really can't go away or down to zero until rates come down. I'm not saying they go back to zero, but you can't have banks competing so much for deposits and you need to actually have monetary policy support there and at interest margins to believe the stress will go away. Long-time listeners will know that I took out a first republic mortgage like two weeks before everything happened. So I'm back to being a JP Morgan customer in the wake of that. But I want to turn to something else, which is in the notes that you sent over to us before the taping, you said, our clients are the most overweight cash they've been in the last 10 years, which is so interesting to me. So I'm wondering, like, if for somebody who is in cash right now, what are you recommending that they actually be doing? Yeah. The first is to acknowledge why they have such overweight to cash. For the first time since 2006, you can get 5% yields risk-free. I think a really important anchor point is to say, well, for the last 10 years, I've been really investing in equities. Great. They've done very well for you. Over a long horizon, say, since the year 2000, the S&P 500 has annualized you 7% give or take. Well, now you can take almost no risk or near zero risk and get 5%. So risk adjusting your life, 5% is better than 7%. The raising of cash makes sense to me. But is it possible that that 5% rate, which is only an overnight rate, can change and change very quickly? Think, yes. More likely than not, I think the Fed has done with its hiking cycle. Rates are restrictive enough. The employment picture is still strong. Things are softening. But you're also getting an inflation stabilization, which means that they may not need to chase it. So I really challenge clients to say to them, I know you love 5% overnight. If you love it overnight, why don't you lock in that yield for 3, 4, 5 years? Well, I don't know, Tom. Maybe I should consider that. I think it's the best idea we have. Reinvestment risk for a long-term wealth aggregator can be a big problem. Cash very rarely outperforms. And it takes a lot of diverates to go up. They can come down really fast. The point will go down to that really hits home for folks. In the 20, historically, the last seven business cycles, when you have the last rate hike from the Fed, in the two years after that, cash tends to underperform duration assets by 14%. And in there, I'm using a Barclays aggregate index. That's a big difference from a wealth aggregator that's trying to generate wealth for a generation. That's a really good statistic, actually. So, is it, do a lot of your clients coming to you and asking you specifically what they should be doing? Or are people, for the most part right now, kind of comfortable being in cash? For the most part, people are comfortable in cash. Our aggregation at the high level, just what is happening in our community, JP Morgan community globally, we're raising cash. The next biggest decision being made is to add some duration, just what we described. And over the last, to start the year, we've seen net outflows from equities. So, now that can all change on a dime. But what's in the price, where we start all of our big, bad decisions, you have cash giving you 5%, every decision you make has to beat that. You have the S&P 500 trading at 18, 18.5 times. And that's about a standard deviation above historical averages. And you just start to get a trade off. Am I getting enough risk adjusted expected return in equities versus what I get in fixed income? That's a tough decision for us. I think this pushes first decision, take that cash, lock in those yields for a longer period of time than overnight. And then we can start to be adding to equities for very long-term investments. And as investors sit on the sidelines, the S&P 500 has been moving in a narrow trading range for much of this year. I know that type of price action is usually taken as a sign of investor complacency. But I'm interested in knowing where you think investors can put money to work within this sideways market, at least in the short to medium term. Year to date, the S&P 500 has performed well. The top mega cap names. It's not even calling them techniques. Mega cap names have pulled the index higher. Over a longer horizon, let's say the last year, last 15 months, the S&P 500 has been trading in a very tight range. The same had can be said about bonds. So I think in a late cycle environment, this has been said before, but it's very true now, you have to be active. You have to be using statistical valuation tools to try to navigate this process. What's first question is, what's inexpensive? If we're worried about a recession, what's pricing in that risk already? Mid-cap stocks in America, European stocks. What's really interesting about those two things is our clients and the JPMorgan community globally are underweight both. Wow, okay. This is something to talk about. We can diversify late cycle, and these things are giving me a little bit more cushion. Should we hit the unfortunate recession? Love that. In America, again, same process. Where can I find defensive things like health care and even some reasonably priced tech names? That's the push. The lens that's important is active management, as you said. But where is their valuation support? That's more or less critical for our investment committee right now when we have a recession that is more likely than not in the next six to 12 months. Okay, talk more about your European equities call, because I think your thought process is that a recession possibly can't be avoided in the US, but actually Europe has successfully avoided a recession. Is that right? Yeah, we walked into 2023, and the consensus was you'd get a recession in Europe. Candidly, we thought that too. Energy led recession and energy shocked effectively. Sure enough, a warm winter and the surprising ability of individual citizens to ration energy and very powerful avoid the recession. Right now, Europe is coming out of the winter. They have more energy storage than they've had at some of the lows in the last five years, doing fantastically well. It doesn't mean that won't be an issue next winter, but it's avoided. And businesses can remain on. You didn't have to turn off the industrial sector. You're transitioning now to is inflation just transmitting itself from strictly the energy sector to is something more sticky, something like what we've seen in America and the ECBS had to respond now. So you've pushed out the recession risk and it looks like Europe is maybe six, nine months behind the US and the ECB is hiking quite a bit. But that means businesses have six to nine months more to make earnings. And I know it's a forward-looking mechanism. Of course it is, but the index trades 30% cheap to America. Our clients ask us to manage dollars for them. The dollar is expensive, should depreciate. That's a nice tailwind to the trade. There are shorter duration assets in Europe and much more tied to a green energy economy, a transition where capital investment is likely to happen even if we stay high. So it feels like it has more runway and more relative value attractiveness. It's a big diversifier for us too. Our clients have a heavy overweight to America, a heavy overweight to mega cap tech names. Diversification is a really great thing for a long-term investor as well. And other than Europe, are you seeing opportunities outside of the US? Elsewhere? We do. I think in China, there are opportunities. The reopening has been swift. But now you see the economy rolling. Flatlining is not the right word, but you've pulled forward a lot of the expected growth there. This idea, we think there's value there. We get tons of pushback and tons of challenges. There's a lot of build-on of bias to what we talked about before, a baggage, if you will. I got a lot of baggage in my personal life. I don't need it in my investing life, I think, is what you get. But the baggage becomes geopolitics. It becomes President Xi... Is policymakers in China going to support this market? The housing, deleveraging cycle? There's a lot to it. But businesses there are likely to inflect higher in their earnings process. I think in America, we want to believe businesses' earnings are going to bottom and inflect higher. It is happening in China. They seem to be in a different phase, more early cycle phase. We do think there's value there. We talk about Europe a lot more, more because we can get people to actually believe we can convince them. There's not as much baggage to that trade, even though Europe has underperformed the US for the better part of a decade too. The point of the concept is to say, where is their valuation support? What's in the price? Where can I see earnings that have a trajectory I can be confident in? Where can I get diversification benefits? Europe is a preferred trade for us. But in China, it's quite possible that what outperformed the US this year as well. Just back to the US for one more thing, which is, I think that you guys like reasonably priced tech. I'm curious what that is, considering the run-up we've seen in tech. When we say tech, everyone thinks about thanks stocks or mega-cap names or the top five in the index. But growth is pervasive across our economy. You can think about growth in healthcare and biotech and find reasonably priced names there. You can think about it in the industrial sector. You can think about it in the traditional tech sector. Growth at a reasonable price is about the valuation and about where I can expect or hope to see above trend earnings. We can find that in those three sectors. We keep coming back to this point in late cycle, wanting to be valuation aware now more than ever. That growth at a reasonable price will not attract to capture that concept, though it is across sectors, not strictly in tech. All I can think about is how you said you have a lot of backage. I think we all do. Post pandemic. How could you not? Most of mine are under my eyes. Under your eyes. You made Tom spit out his coffee. Income is back and Van Eck has you covered with VETFs to bring income to your portfolio. Find the yield duration and credit exposure you're looking for from Van Eck's range of income-focused ETFs, which includes municipal bonds, corporate bonds, international bonds, equity income, floating rate instruments, and multi-asset income. With Van Eck's income investing yield monitor at thinkyield.com, you can easily track Van Eck's ETF yields, as well as the monthly flows and performance of each income ETF category. Take advantage of the back-to-income play. Explore Van Eck's income ETFs at thinkyield.com and find the right ETF for you. Investing risk includes principal loss. Past performance is no guarantee of future results. Visit van Eck.com to view a perspective that includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully. Van Eck ETFs are distributed by Van Eck Securities Corporation, a wholly owned subsidiary of Van Eck Associates Corporation. Bloomberg Invest returns to New York, June 6-8. We'll have influential leaders from the NASDAQ, JP Morgan, the SEC, Franklin Templeton, the WNBA, Charles Schwab, Blackrock, Goldman Sachs, and many more. US presenting sponsor InvestoQQQ, presenting sponsors, all spring global investments, Niam and principal asset management, participating sponsor, Southern Company. Register at BloombergLive.com slash Invest slash radio. Tom Kennedy from JP Morgan, thank you so much for joining us on the podcast. That was really, really great. But we can't let you go until we all go through our craziest things that we saw in markets this week and I hope you've come prepared with something. But Peyton has set the bar super high so I'm going to let her go first. And you can't disappoint Peyton. I know the audience can't see me but I am rubbing my fingers right now because this is the moment I've been waiting for. So I know the past couple of episodes we have talked about fast food companies in this episode will be no different. So Taco Bell, which is a subsidiary of Yum Brands, is fighting the good fight by filing two legal petitions with the US Patent and Trademark Office to cancel federal trademark registrations for the phrase Taco Tuesday. As part of the new liberation campaign the company rolled out earlier this week. So the trademark currently belongs to Wyoming-based restaurant Taco Johns, which has held the registration since 1989. Taco Bell's beef with Taco Johns is rooted in the belief that Taco Tuesday is a generic and informational phrase and does it function as a trademark that identifies the source of a product. And as such, Taco Bell's filing reads, Taco Bell believes Taco Tuesday is critical to everyone's Tuesday. To deprive anyone of saying Taco Tuesday, be it Taco Bell or anyone who provides Taco to the world, is like depriving the world of sunshine itself. Powerful words from Taco Bell. Taco Bell's beef. That's so good. I hope you wrote that. Thank you. Thank you for catching that. I have another one. Not your phrase. Stop it. We could keep going. That was cheesy. Oh, very good. Tom, what about you? Anything crazy you saw in markets? The craziest thing I've seen in markets is around the debt limit. The most well-known interest payment from the treasury happened this week on Monday, 50 plus billion, and yet people are rushing to the debt limit date as if it's happening today. Don't let ourselves get too far ahead of ourselves. The debt limit is a real issue. It will be resolved, I think. Very confident. But the process is going to be very volatile and most likely bring friendship. Let's not build all believe all the hype. Treasury payments will have to be made. And even this 50 plus billion dollar one made this week brings the debt limit maybe a little bit closer, but we still have some runway to go. I'm glad you brought up this topic though because I am curious if you have clients calling. Anytime things are uncontrollable, it's something to worry about. Over the debt limit spend part of our culture and ecosystem and political regime in America for over 100 years and the debt limit is either been raised or suspended 100 plus. The US is a deficit creditor country. It needs to be able to borrow. So the debt limit must be raised, but this is a way to bring bipartisanship. It's an unfortunate reality. I think of the system here, but I do believe it will be raised. People are very worried. And I think we're in the anxiety phase where every day the movements from the treasury will matter. The craziest thing I've seen this week though is people building anxiety for a payment that we know needs be made on that specific day for months at a time. So trying to lower the hype of it, I guess, with my craziest thing. I like to hear that there's others who are very worried about all kinds of stuff. I'm not the only one who just has like a list of worries constantly running through my mind. Anyway, that's really good. I'm really happy you brought up the debt ceiling. I have one and listeners, recent listeners will know that my sister now listens to the podcast and she sends me tons of crazy things that she sees in markets. She works in supply chains. So she's always berating me for not tying things back to supply chains, which she loves to talk about. This one's not exactly about supply chains, but still very interesting. It's this story about Lulu Lemon dupes. There's TikTok influencers. They go on TikTok. They make videos. They peddle Lulu Lemon knockoff pants. So dupes, duplicates, and say things like, hey, look, I used to work with Lulu Lemon and like these $20 pants are the exact same type of thing. And the Lulu Lemon dupes hashtag has more than 150 million views on TikTok. And so what Lulu Lemon, the actual Lulu Lemon did is in LA, they held an event where you could bring in your fake Lulu Lemon pants and they would give you real ones. So you would swap your $20 pants for $90 Lulu Lemon pants, which is crazy to me like do that in New York, please, you know, not that I have dupes. Yeah, exactly. Yeah, I would definitely buy them to attend one of these events. Anyway, tons of great stuff. Tom, thank you so much for joining us and painting. So happy you could join us for the first time. I appreciate the invitation. Thank you. Thank you both. Thank you. Vaco's app will be back next week. Until then, you can find us on the Bloomberg Terminal website and app or wherever you get your podcasts. We'd love it if you took the time to rate and review the show so more listeners can find us. You can find us on Twitter. Follow me at Vildana Hirek. My korean is at Reganonymous. You can also follow Bloomberg podcasts at podcasts. What goes up is produced by Stacey Wong and our head of podcast is Sage Bauman. Thanks for listening and we'll see you next week. May 23rd through the 25th, the Qatar Economic Forum powered by Bloomberg returns to Doha, convening voices that are spotlighting solutions to some of our most pressing global challenges. Speakers include CEOs from the Boeing Company, Miramax, Bin Fast, Blockchain.com, Sundance Institute and more. 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