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On the program today a theory about this week in this economy, we'll talk live music and small clubs and hey, is that a Wilson's war blur I see up in that tree? From American public media, this is Marketplace.
In Los Angeles, I'm Kyle Resolid, it is Friday today the 22nd of May, it is always
happy along everybody. I'm just gonna say this and then we'll see what Courtney Brown, she's at Axios and David Gourry, he's a Bloomberg, we will see what they have to say about it.
“I think this was a deceptively significant week in this economy. We'll see what they say.”
Welcome to the program you're doing on a Friday. Hello, okay. Hi, okay. All right, Courtney Brown, you get to go first. Here's my theory. The 30-year tops five percent. People get really worried about that. Fed minutes come out the other day. They show a clear signs that an interest rate hike might be next. We're gonna cut. Forget a whole thing. They're thinking about hiking.
Chris Waller gives a speech. Fed government gives a speech day to the title of which is policy risks have changed and oh by the way Kevin Worst takes over today at the Fed. Discuss, my theory please. Yeah, everything that happened this week in macro world pointed to this idea that rate cuts, which Kevin Worst is under pressure to deliver. This case gets harder and harder to make. It's like every day this week through Friday.
The case got harder to make and it all culminates in that speech that you mentioned from
Fed Governor Christopher Waller. Remember he was basically on the on the front line of arguing
for a rake cut not too long ago. Totally changed his mind because of the inflation data and other economic indicators that have come in this week. So I buy into your theory, Kai. All right, David Gerard joined the club. Come on, I'm bored with my theory. Yeah, I mean, it was a busy week. A lot of signal moments.
“You know, I think we had a great piece of Bloomberg this week looking at what we see in”
terms of long-term yields and the fact that manifest and all of that is this fear that inflation isn't coming down anytime soon. Yes, the war in the Middle East is contributing to that, but there are other factors at play as well. And I think you're right to cap it off with what we saw in the East Dream of the White House today. That's Kevin Worst being sworn in to the Fed. Now the chairman inheriting a very difficult, very difficult job. I don't end
again. I think the president made a joke about that as well that it's, you know, there are easier jobs in the one that he faces here. And I think that removed that he had the fact that that ceremony took place in the White House was probably a nice thing because it was a bit more of an extended diversion from the fact that when he gets back to the Fed, if he wants to do all that he said he wants to do, implement all the reforms he wants to do, do what the president wants
“him to do, which has agitated for cuts. That is a harder and harder mission for him to, to try to”
accomplish. Getting harder every day and consumers and also the markets, according brown, are thinking inflation is going to be higher for longer and we know what happens when expectations become unacred, right? This is something that again, referencing a governor Chris Waller who, you know, we should just say is an influential member of the Fed board. He was nominally in the running to be the chair, not in the chair. That's right, who could forget. So he, he, he, he mentioned
this idea that inflation has been stuck over two percent for the time now. And he gave this fantastic analogy of a coin flip to describe how consumers might start thinking about inflation.
Basically, if you flip a coin three, three times a row in its heads, the consumer might start to
think that maybe the coin is is ranked or something and he can't quite explain why that happens, but it's, it's kind of the same idea with inflation. If we keep getting higher inflation, consumers might start to believe that this is just the new normal. And that's when the Fed starts to get worried, right, consumers start to believe higher inflation are coming. They start to adjust their actions in ways that make inflation more embedded in the economy and hard to beat.
David, there will be much inks bill that air waves transmit at I suppose to torture that analogy a little bit over the changes that are coming to the Fed with chair wars. One of them will be their communication style. And setting aside the fact that Waller clearly didn't get the memo with
That speech today, less is going to have to suffice.
You know, I think that's probably the case and there's been this rolling debate about
forward guidance, you know, how worthwhile is the information that Fed policy makers are giving us an
“advance of meetings? I think there's a school of thought that a lot of these policy makers are”
recognizing the fact that there's a plasticity of this economy that maybe that kind of advance notice isn't as good as it used to be or that advance thinking isn't as useful for markets and journalists like us as it used to be here. But I think this is the way that the new Fed chair is going to make the strongest imprint on the Fed in the shortest period of time. Well, he's going to have his work cut out for him with other kinds of reform. This is what we were talking about. The
wind is blowing in the other direction from cuts. It's pointing to Hikes, but I think, you know, he's talked about the fact that he thinks policy makers say too much. They talk too often. He hasn't committed to having press conferences with the frequency that Jay Powell did. I think we're in store for perhaps some seemingly kind of radical changes there that bring us back to the way things used to be at the Fed. Courtney Brown, I come to you now in your capacity
as a bond market expert and I want to know from you when the bond market is going to say to the American economy, nope, we're done with you. We have had it and then things go downhill really fast.
“Help me out with that one. Scary prospect, I think, and like when you talk to people on Wall Street,”
this is the possibility that they always bring up, you know, what if what happens if there is
another type of recession economic shock and the US needs to spend money to help the American people and the bond market says, no, no, no, no, we're not, we're not doing that. And you more, you know, and you have kind of the revenge of the bond market. We wrote a piece this week that I think is interesting with respect to Kevin Wars and it's kind of ironic that the cure for high rates in the bond market might be high rates, right, get the bond market to believe that Kevin Wars is not
going to defy higher inflation expectations and push through lower rates. David, last word to you, you got 40-ish seconds on this one. I was going to ask you about consumer sentiment that came out today and you know, a University of Michigan data that is, you know, reliable with the grain to solve, but the upshot is consumers are really, really angry and upset and cranky. And yet that doesn't change their spending behavior. So, so I guess I'm not going to ask you about that,
but I'm going to ask you about why we pay attention to consumer when we keep on spending. That's
my question, right? We keep on spending. We keep on spending, obviously it's such a crucial part of
“this, the US economy. I think we are seeing signs that, yes, with that crouching as people”
would be getting to change their habits, they're still buying gas, they're paying more for it, they're spending less on other things. And I do think that sentiment data is key when you look at kind of a broader compliment of other data that we're getting about how consumers feel. And they're worried. They're worried about how long inflation is going to be high, how high it's going to go, and they're worried about this war in the Middle East, which again, we see these daily
regulations. What's going to happen is not going to happen, but all signs indicate this is going to last for a while longer in his gas prices continue to go up. That's just going to be a heavier heavier weight on the American consumer. Right. And then consumer economic sentiment, just super quickly, here consumer economic sentiment then becomes a political problem for the White House. Absolutely. And they have to be aware of that. And they're trying all kinds of things to remedy
that, none of it's worked so far. So it's going to be a bigger and bigger promise we get closer in November. David Gura at Bloomberg, Courtney Brown and Axios, thanks you too. Thanks, Guy. Thanks, Guy. See you. Wall Street today, forget the war, forget inflation, forget consumers, and forget the Fed. All traders are caring about as earnings and AI. We will have the details when we do the numbers.
Have you come to this program today looking for clarity on what's going on in this economy? Our apologies. It's complicated as David and Courtney and I were just talking about. And a reading we got this week brings that home. SNP global's flash purchasing managers index. We're talking May data here is a close to real time snapshot of pretty much the whole private sector economy. It's based on a survey of the people who do the ordering of supplies
and finished goods at manufacturers as well as consumer and business demand in the services sector. So that's the whole smash right there. And there's all twer. Well, as I said, complicated. So it's a good thing we got Marketplace's Mitchell Hartman to sort it all out for us. We start with an almost quote from Charles Dickens. It's a tale of two economies. That's Chris Williamson, chief business economist at SNP global market intelligence.
Manufacturing doing very well, production level and order books in the last couple of months have
Been growing at rates we've not seen for four years or so.
you've got a nestier turn and they're stalling of growth. Let's start with manufacturing.
It's booming for a couple of reasons as economists build atoms at 5/3 commercial bank. Investment in data centers and in the AI boom. Also, strong business investment driven by tax changes in the one big beautiful bill. Adam says services meanwhile are slowing from headwinds to the real estate industry from high mortgage rates and has it in consumer or sentiment translating
“to softer demand for service providing businesses. It's important to note, though, we're not yet”
seeing a downturn in discretionary spending says Rob Hayworth at US Bank wealth management. Consumer data like open table restaurant bookings and TSA throughput at the airports.
All those are telling us the consumer behavior is not faltering.
When clear warning sign from the PMI report is sharply rising input costs for manufacturing businesses says Scott Anderson at BMO Capital markets caused by just the war itself and to space pledging disruption increasing transportation costs. Which will only get worse with time says 5/3 commercial banks bill atoms. The pickup and input prices is a big warning to the Fed that if the straight stays closed, if energy supplies continue to be interrupted, we are entering into a large
“inflationary shock that's starting in the manufacturing sector. But if at last a few more months,”
he says it'll spread through the whole economy. I'm Mitchell Hartman for Marketplace. Coming up, they saw a bird that actually converted them. They call it a spark bird.
Grab your binoculars gang, but first, let's do the numbers.
Downdustrails up 294 today, 6/10%, 50,579, but as that added 50 points that is 2/10%, 26,343, the S&P 500 gained 27 points. That is to shy of 4/10%, 74 and 73. For the week, the 5 days gone by. The Dow picked up 2 and 3/10% that has deck. Rose just shy of about 1/2% the S&P 500 added 9/10%. The Chinese computer manufacturer Lenovo reported a big jump in quarterly revenue sent it shares 19 and 3/4% higher in Hong Kong.
“That news also boosted some U.S. computer makers' Dell technologies added 16 and 3/4%”
at H&P, H&P Note just H&P, accumulated 15 and a quarter of 1%. Bond Rose yield on the 10-year keynote fell 4.55% your listening to Marketplace. This Marketplace podcast is supported by Intuit QuickBooks. If you're trying to grow your business into it QuickBooks Workforce, you can help you lead your business with confidence clarity in a way that makes sense for you. As a sponsor at Marketplace's my economy, QuickBooks Workforce recognizes that no one person
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back to move forward proactively, move from reactive to proactive with brand new tools by making the Switch to QuickBooks Workforce today. Your Marketplace's my economy at Marketplace.org/myaconemy, and learn more about how QuickBooks can help your business grow at QuickBooks.com/workforce. That's QuickBooks.com/workforce. This is Marketplace, I'm Kai Rizdahl. Spotify announced the new feature this week. It's called Reserved. It's supposed to get more concert tickets into the
hands of actual fans instead of scalpers. We're going to sell them on the secondary end inevitably pricey market. But while some big-name arena doors are indeed selling out, there's a whole other world of small independent music venues that are just trying to keep their doors open. A report from a national independent venue association last year found almost two-thirds of those clubs are not making any profit. Toby Parks owns a 250-person capacity venue
in Des Moines, Iowa, it's called XBK Live. She's also the Vice President of the National Independent Venue Foundation. Toby, welcome back to the program. It's going to have you on. Yeah, thanks for having me, Kai. How are things business-wise at XBK Live?
You know, we're very fortunate that we are doing quite well here in Des Moine...
but I can't say that that is necessarily the case for other independent venues across the country.
It's been kind of a hard road post pandemic for a number of reasons, but we're doing okay, we're hanging in there. When you say you're doing okay, I mean, are you sold out on a Friday Saturday night? I wish we were every Friday or Saturday night, but you know, really one of the
“big issues that we're facing is, you know, I think we in the independent sector are really trying”
to remake the connection with music fans. I think, you know, a lot of times due to the secondary ticket market and ticket scalpers, you know, people have gotten used to feeling like they're going to battle to get a ticket to see their favorite artists. So I think a lot of times, they're not really thinking like, oh, I can spend 20 bucks and go to my local music venue
in their own communities and their own neighborhoods. That's so interesting because it's not like,
and this is, I'm not saying this projoratively, I'm not saying it well at all, but it's not like your competition is like Taylor Swift, right? And those big stadium shows. It actually is. You would be surprised when people are, you know, in a position where they're paying literally hundreds or thousands of dollars for this one big concert, they're not going and spending 20 dollars, you know, they're saving every dime that they can to go to this big concert.
So that really is a huge part of some of the things that we're battling is just trying to figure out where we fit in and people's entertainment budgets if they have one. Yeah, that's good point. Talk to me with you about the sort of the macro economic environment, right? Inflation is up,
“consumers are cranky as they always are. Is that adding to your woes?”
Yeah, I mean, it's, you know, when people are paying exorbitant gas prices, I mean, that's hard not only from the venue perspective because there's less money in people's pockets, but I would say, you know, from the artists perspective, even, you know, there's a lot of concern about artists being able to afford to actually be able to go on tour. So, you know, we're fighting a lot of things. On top of, we as concert promoters and venue owners, you know, we make most of our money
from concessions and people, you know, buying drinks at the bar and there's a significant downturn in people drinking, like, great for people being healthy, but it's really hard on the pocket books of small music venues. It sounds, we started with me thinking you were doing all right, and now it sounds not great, honestly. It's, you know, it's a battle every day. And, you know, people who do this work, you know, those of us in the independent sector, we don't do this because,
you know, we think we're going to make tons of money, we do it because we love our communities,
and we love helping develop artists, you know, there's no, I always like to say there's no tailor
“swift without stages like mine, you know, and that's why we do it. And, you know, I'm fortunate enough”
that XBK is at my primary source of income. Me, like, you know, every other person in America right now has multiple jobs. So, I can't complain. Well, let me take that side turn, the side hustle turn you just gave me and talk about this other thing you do. You're an intellectual property attorney, right? I am. I am an IP attorney and entertainment attorney, and also have recently just started a new tech company. As we're talking about the economics of the live sector, you know, we as concert
promoters and venue owners pay a lot of money into royalties to public performance societies, and so I've created some technology to help make it easier for our artists to submit setless data so they can participate in the royalty pools with their respective PROs. Got it. So the people own the rights of the music. Correct. They represent songwriters and own the rights to the underlying compositions. Yep. Interesting. So it's a side hustle, but it's
very, very parallel, right? It's a, it's a hundred percent parallel. And I think that, you know, from the perspective of artists as we said, it's, it's so expensive for artists to tour these days. Right. Right. You know, we need, we need those bands to be on tour to keep our doors open. So, you know, we're doing everything in our sector to help them. Let me back you up a little bit to some of the things that you're dealing with.
You mentioned people not drinking as much anymore, which great for society, maybe, you know, not as good for your profit margin. How else are you using this space? Because I imagine a 10 o'clock on a Tuesday morning, it's, you got this space. You got to figure out how to use it. Forget just Saturday and Sunday night or Friday and Saturday nights. That's not going to do it for you. Yeah. I mean, we've gotten really creative. You know, we do a lot of kid shows.
You know, we'll, we'll open up on a Saturday morning and have bands that cater to kids. You know, we've really leaned in heavily to our NA beverage service. So, you know, we have a much broader
Range of non-alcoholic cocktails and things.
So, we work with a lot of local nonprofits to give them space. So, instead of, you know, seeing your
“life concert, you might also be going to a yoga class. Yeah. Got to do it. Got to do it. You got to do.”
Yeah. Exactly. Toby Parks, she owns XBK live during the morning. I hope you thanks a lot. I appreciate your time. Thanks so much, Kay.
. Roughly one in three people in these United States to the tune of $100 billion
a year participate in the birding industry. I know. I was surprised too. But if you bought a bird feeder to watch the Romans and the chickadees in the backyard, then you too are bird watcher in the eyes of the US Fish and Wildlife Service. And it turns out there is no better time to talk about birding than me, right in the thick of spring migrations season, which as it happens, is when Northwest Ohio hosts the aptly named biggest week in American birding. Marketplace to Kelly Wells,
“went to see what's what? Tonya Tyson runs a seasonal ice cream stand called Barnside Creamery.”
She says she owes a lot of its success to bird watching. A hobby, she doesn't really know much about it all. As their birding week festivities have come to be more known and have grown, so as our business right alongside of it. Her business is on a rural stretch of road about 25 miles east of Toledo. She's under a migratory flyway and since she's a mile away from the Lake Erie Shore, lots of birds stop around here before attempting to cross it, which is why Northwest Ohio is home to
the country's largest annual bird watching festival. The week of this year's festival, temperatures were in the fifties and it was cloudy, not traditional ice cream weather, but it's Tyson's biggest week of the season and the local businesses that supply her ingredients, know it. When I call for my orders, they're like, "Oh, yep, it's birding week because, Tonya just stopped up." The biggest week in American birding festival brings more than $50
million to Northwest Ohio every year. Hotels sell out months in advance, people fly in from most US states and multiple countries, and there's no shortage of gear to buy. The conference center lobby is lined with booths of bird feeders and bird art and bird books and bird tours, then there's the optics tent filled with binoculars and scopes and camera lenses worth more than my car. That tent is run by Whitney, Lon Franco. Even just these festivals like the
amount of volume we move, I mean, there's more and more people starting birding every day, birding had a major moment thanks to COVID. Obviously, because it's an outdoor, socially
distant activity, and birds never stop doing their bird things. One popular phone app,
e-bird, song engagement, double going into the pandemic. Another one, Merlin, grew five fold and a lot of newbies go out and buy binoculars. We might have, again, those folks come in today and buy a $200 pair, but if they stick with it over the years, so continuously buy more equipment, go to cameras, go to spin scopes, upgrade their binoculars, it just keeps going.
“So that's what birdwatchers are spending money on, but the why still eluded me. So, I went on a tour.”
What's everybody staring at this tent? There was a northern purrula. Okay. So a warplur. Okay, so I'm very colorful. This tour consists of a few dozen people following behind a knowledgeable man in a matching yellow lanyard and bulk app. Occasionally, stopping when they catch a glimpse in the brush that I definitely don't have the skill to spot. Rob Ripma, who runs one of the nature tour companies at the festival,
lends me his very nice binoculars, which I learn require skill to use properly. Yeah, but don't, you're moving your head to your move to binoculars, your eyes and your eyes still binoculars. Okay. So keep your eyes on the bird. No, I've lost it. We'll try again.
An hour later, after more tries than I wanted to disclose, I finally spot what looks like
a yellow ping pong ball with wings. I see him. I did it. That's so exciting. It is. Congratulations. Greg Miller, who's leading the tour, is perhaps even more invested in my success than I am. So people who haven't known about burning and then they saw a bird that actually converted them, they call it a spark bird. Is that my spark bird? This could be your spark bird. If you start burning now, because of those. You have to tell me what kind of bird this is.
This is Wilson's Warbird.
but I did hang a bird feeder in my yard for three in Oak Harbor, Ohio. I'm Kaylee Wells for Marketplace.
“. This final note on the way out today, a pop quiz for the monetary policy”
officionados among you Kevin Worsh, now properly chairworsh, was sworn in at the White House this
morning by Justice Clarence Thomas. But who do you suppose was the last Fed chair sworn in
at the White House? And for bonus points, who did the swearing in? Anybody? Okay, Alan Greenspan, sworn in by Vice President George H. W. Bush in 1987. Alan Greenspan, by the way, a couple of months ago, turned 100 years old. Our theme music was composed by B.J. Leaderman, Marketplace's executive producer as Nancy Park Golling. Do I, and Griffith, is the chief content of Officer Neil Scarborough's Vice President and General Manager. And I'm Kyle Rizdel, have yourselves a great weekend,
“everybody. We'll see you back here on Monday, alright?”
This is APM. I'm Remach Reyes, host of the weekly Marketplace podcast. This is Uncomfortable. And this week on the show, we're talking about Doom spending. You know, that impulse to spend
when the future feels uncertain. Like maybe I'll never be able to retire or buy a home anyway.
So why not book that vacation or buy that fancy gadget? When we ask ourselves, what's the point of
“saving? We're just going to die or whatever. I think that's the wrong question. I think the more”
important thing to ask is spending that money even actually making you feel better. Be sure to listen to this is Uncomfortable wherever you get your podcasts.
