Disney Says ‘Jimmy Kimmel Live!’ to Return After Backlash

22:06So the main national security concerns, which I feel like get kind of like buried in all of this. Number one, there's exactly there's the concern. Number one, that maybe by dance 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 manipulate the algorithm to push certain divisive narratives on American citizens who are using the app and make people just create discord in the United States and change public discourse. And I think the fact, so your question, is the algorithm that's special.

22:48I think that just the fact that there's all this, that there's all of these, all of these.

22:53Carol Massar: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. You're listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from two to five Eastern. Listen on Apple Carplay and Android Auto with the Bloomberg Business app or watch us live on YouTube. 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.

23:24They're all related. You've got to have power.

23:28Carol Massar:You do. To mine 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 USA 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 us, Barbara Humpton. She's president, CEO of Siemens USA. She's here in studio. How are you? Carol and Tim, I'm thrilled to be here. So thanks so much for the invitation. 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 right now.

24:04Carol Massar: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 technology... But 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. Or there are megatrends that aren't necessarily aligned with the views of a presidential administration.

24:45Exactly. That makes it more challenging.

24:47Carol Massar: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. So 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? Well, I will clarify that my colleagues at Siemens Energy obviously have taken that on.

25:24Carol Massar:And you've seen Siemens Energy thriving over the last year. At Siemens AG, the U.S. 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.

26:06Carol Massar:Think about manufacturing coming back to the United States. All of those are brilliant uses of the power that we can generate. What can you tell us about the AI build out and what you guys are seeing firsthand? Well, it's massive. It's massive. It is critical for the U.S. 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 co-pilot into the manufacturing environment, it allows users to harness that data, make better decisions, really drive their operations.

26:54Carol Massar:And we're seeing success all over the place. What does it mean? Give us an example. So you bring the co-pilot into what factory or whatever or what plant facility and it does what? 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.

27:27Carol Massar: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. You talked about the tool that your customers use when it comes to AI being a co-pilot.

28:11What about internally are you doing since we last spoke when it comes to AI?

28:15Carol Massar:Oh, boy. 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 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. So it's much more informal than it is formal right now. It is. And I'll tell you why.

28:49Carol Massar: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. 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 going to rely on AI to do everything. Don't be afraid. Here's what this does. I'm not afraid and I played with it and I'm blown away with it.

29:21Carol Massar:But I also can see how as it gets smarter and smarter and smarter and more specific in terms of fields that it can do a heck of a lot. It will make 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. Yeah, this this is going to be so exciting to see then what do experts do with this additional power? How far can they push? Makes me wonder if we're going to need sophisticated workers from outside the U.S. Perfect segue to talk about H-1B visas, because that is where we want to end.

30:01We're trying to ask everyone we talk to about what's stemming from the confusion Friday and through the weekend. How do you use H-1B visas at Siemens USA?

30:09Carol Massar:Yeah, we do. We bring people from all over the world who have special knowledge in 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 number. That's a great number. And the point is that we're global. What we're working on is making sure we share lessons learned, you know, bringing people to the U.S. for experiences, and then obviously sharing their knowledge. Is that at risk with a new potential$100 ,000 fee associated with these visas? It'll factor into the business case analysis. Would you still have 5 % of your workforce have these visas?

30:45We'll have to see.

30:45Carol Massar:We'll have to see. 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. Is the reason you have those employees because you cannot find those employees in 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 U.S. can produce as we address markets elsewhere. 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?

31:21Carol Massar:Just quickly. 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. Right. And so this is, I would tell you that our export controls colleagues have been our heroes this year. I bet. Bet they're on speed dial. Barbara, thank you so much. Barbara Humpton, president and CEO of Siemens USA, joining us right here on Bloomberg Business Week Daily. Stay with us. More from Bloomberg Business Week Daily coming up after this.

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35:04Carol Massar:Or watch us live on YouTube. 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 under management. management. Try that again, under management. And she joins us here in our broker broker studio. Mondays are tough. Especially with all this news coming at us. It's a lot. It's a lot. Paisley, good to have you here. Welcome, welcome. Nice to have you in studio. Yeah. I was going to say a longtime listener, first time fish bowler.

35:40Carol Massar:Thanks for having me. What do you think of the fishbowl? It's not intimidating at all. No need to be intimidated. There is a lot coming at investors. another record on Wall Street. It's kind of crazy sometimes. Does it feel like things are getting overheated in your view? I don't know if overheated is the terminology that comes to mind, but in essence, yes. I think that we've been - What is the terminology? I don't know. I'm trying to figure it out still, but let's 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.

36:11September 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 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 of weeks.

36:45Yeah, I don't think you're the only one who thinks there could be turbulence ahead. What specifically concerns you when you look ahead? Specifically, I would say the market's pricing or the expectations for rate cuts over the next six to 12 months. Was it strange to you that we saw with the dot plot? Not with the dot plot, but really with the way that the voting members voted last week, it was everybody versus Stephen 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 descent of potentially looking for two cuts.

37:18What 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 anytime 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.

37:54And that's what concerns me right now.

37:56Carol Massar:I mean, Stephen Myron, in that conversation he had with Bloomberg's 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 seemed 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 economy. Yeah, 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're on this trajectory of easy policy ahead.

38:34And 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 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 in the next couple months. So volatility leading to sell-off, significant sell-off, 10 %? Yeah, I think a healthy sell-off at this point in this environment, whether it's a 10%, 15 % drawdown, markets can shrug that off in a couple days.

39:14Any kind of V-shaped recovery. Would you add to equity positions in a pullback like that? Absolutely. I'm 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 anytime 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.

39:46Carol Massar:I mean, you guys think about, you know, your multi-asset solutions. you do have alternative assets. So I'm just curious when you look at where it's ETFs, right? Yep. Where is money flowing right now? You have all, you have fixed income, you have equity income, you have equity. Where's money flowing into, where's money flowing out? 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, you know, their paychecks, Higher levels of income in their portfolios is absolutely something that continues to gain steam.

40:23And 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 sometimes gets a little bit scary.

40:42Carol Massar:So you're saying money is largely going, though, into fixed income? Into more equity or 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. 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.

41:15You 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. Yep. What about the idea of concerns over tariffs? Are these tariffs starting to actually become inflationary like so many people were concerned about? 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 2nd 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.

41:54I 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 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.

42:23Carol Massar:Specifically, we're going to leave it on that note. Thank you so much. 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 the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. 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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