Hello and welcome back to the Hairdresser.

Strong news and what does it have to do with you today?

We got a bunch of interesting news and some, some of it's pretty crazy and I'm sure you all want to hear about how does this all going to impact you and your customers.

All right, so why don't we just dive right in and I'm going to share my screen and I'm going to play a short video for you and that's how we're going to get started.

All right, here we go.

Stays optimistic on stocks this year Writing quote we still think US equities can outperform in 2025 led by tech.

Even as Europe's strong start to the year yet we broaden our risk on view upgrading European stocks.

I'm pleased to say that Wade joins us now, chief global investment strategist and at BlackRock.

Great to see you way on this itself because it hasn't exactly played out this way.

We've had three days of selling in the U.S.

as you know, Europe is outperforming tech Mag 7 is down on the year.

What do you says that that dynamic won't necessarily last.

What is really interesting is that after a very concentrated rally in US markets, US equity market in recent years, the world is set up a bit differently coming into 2025 the bar is quite high.

So the US market needs to meet an ever rising bar whereas for the rest of the world, Europe or China for that matter, actually just a few things.

One of the few things needs to go right for sentiments to turn around which is why we actually have seen a broadening out of the rally and a catch up for the rest of the world relative to the US now having said that, let's look at the dimensions of US exceptionalism.

We're talking about greater representation in tech, we're talking about greater fiscal spend, we're talking about energy independence, we're talking about deeper capital markets, more robust risk taking.

I think the US is still leading in most if not all of these dimensions.

The gap may be narrowing but the US is still leading which is why as we kind of up our conviction towards the rest of the world in this particular case, European equities is not coming at the cost of US equities.

We're still overweight US equities.

So it's not a zero sum if we can tackle some of the the list of the US Exceptionalism because it feels like that is something that is being questioned.

Let's start with fiscal spend because you look at Doge's efforts.

And the read at least from what the market is saying is that so far the first things we're getting are growth negative from the Trump administration.

Do you expect that to change?

Well, yes, those effort of cutting fiscal stand or else equal would translate into lower growth impulses.

But we also know that the Trump administration would love a more robust growth environment.

They are talking about 3% real growth target.

Maybe 2.5% is more realistic.

But the bottom line is if we want to focus on growth then fiscal needs to be supported and that is inflationary.

And also if you want to focus on closing or narrow the trade balance and through tariffs, for example.

So that means that tariffs gets imposed without effects proper adjustment, that is inflationary as well.

So when we bring all of this together, a lot of the policies actually points to higher inflation.

So when you say, Danny, it's not a zero sum game from a whole portfolio perspective when we make these adjustments to our investment views, it is a zero sum game.

It needs to be balanced somewhere.

And we're actually lowering our conviction to long duration US treasuries to support the upgrade for European equities.

Currently US 10 year at just about 4.3% is underappreciating the high for longer inflationary environment that we're heading towards in our view.

Okay, so what does that all mean?

So basically she's saying that that's Weili from BlackRock and she's talking about how essentially that the US is expected to better than any place in the world.

Now that is only interesting and positive to you if you are a macro investor, right?

I mean I think that if I am a macro investor and I'm investing in global stock markets and I'm buying commodities, gold, Bitcoin, then that is important.

This isn't very, this, all this information is important like what's going on in the world now.

What does, how does it impact us?

How do, how does it impact our businesses?

Well you, as you probably know I'm in D.C.

and here in D.C.

we in the, on the greater DMV district, D.C.

maryland and Virginia metro area.

I would say the whole tri state area.

Well, we are experiencing pretty, pretty big fallout and a lot of customers are losing their jobs.

We've had 7,000 people file unemployment since January.

I think that number is actually up now.

And so the local economy is going through a serious churn Now I'm going to share my screen and I'm going to give you some more news on, on the economy.

Okay, so this is Wall Street Journal.

It's the week ahead for foreign exchange bonds, focus on U.S.

jobs.

And so let's talk about the U.S.

non farm payrolls.

Data for February are due, are due on Friday.

So keep an eye out on that.

So in on Friday you should be able to like, you should be hearing about the news about interest rates and give you a heads up about where they're going, where they're headed.

Now we've already had some data come in this year.

January's data showed below consensus jobs growth, but also the unemployment rate falling to 4% from 4.1% and wage growth edging up to 4.1 from 3.8.

This supports the Federal Reserve's recent shift to a slower pace of rate cuts.

So if you've been watching the news or listening to me, I've been talking about how everybody's waiting for rate cuts to come down.

So if you want rate cuts to come down, then I need you to, I need you to think about what does that mean?

Like what is why, why do I need rate cuts to come down?

Well, I want rate cuts to come down personally because I'd like to sell one of my properties, I'd like to buy another property.

I would like to see the housing market heat up and, and so if interest rates are coming down, then we could potentially see the economy kind of boost back up again.

But as long as interest rates are being held high, we've talked about this many times.

Interest rates being held high just slows economic growth.

It make, it makes it harder to build, grow your business.

It makes it hard to open a business.

It makes it harder to buy a, a house.

So what are all the factors that are playing into inflation?

It's, I'm going to read a few more pieces.

Investors wait more signs of how the economy has been fairing since the November election.

They said US money markets currently price in another three 25 basis point rate reductions.

However, now it says this, the money markets are pricing it in.

But, but what I'm reading is inflation might not be coming down enough to get that many rate cuts this year.

Well, it says by the middle of 2026, so maybe a rate cut by the end of the year.

I don't know.

We'll, we'll have to see.

One key question will be the extent to which recent cuts to government jobs hit jobs data.

These could pave the way for rate cuts.

Although they are expected to be evident just yet or, sorry, they're not expected to be evident just yet.

We think cuts to the federal government jobs will take at least another few months to become apparent in the data.

So, so if you're not in the DMV like myself, and then you are, you are, you might not feel the impact of government job drops and, and when no one really understands how this is going to impact the, the national economy.

However, this is a really interesting piece of information.

Let's just goog right here live while I'm, while I'm doing this and let's just look and see what is.

So where are we at?

We're at, we're at, we think government jobs.

So what is the percentage of the economy contribution.

Contribution to federal, from federal government.

There we go.

Okay, so here we go.

According to recent data and this is, looks like fiscal data.

So this is legit.

And Fred, according to recent data the federal government contributes approximately 23% of all US economy.

So that means if you start gutting the government, the economy loses productivity and if we lose productivity then yeah sure, you could make the argument that the, you know, deregulation will accelerate other businesses, but not in a high inflationary, high rate environment.

So that's, that's what my opinion is about that.

So I think we're still in very much a wait and see.

So let's go here.

All right, we got, this is CBS News, the PCE report.

The Fed's preferred inflation measure is out and here's what it says.

So this is recent, this is February 28th.

So this is yesterday.

The personal Consumption expenditures price index or the Federal Reserve's preferred inflation measure rose 2.5% in January on an annual basis matching economists expectations.

So when I'm reading this information, the way I read economic data is like these kind of stuff, it's like okay, well I don't care what the number is, I want to know is it matching expectations?

Because the entire market runs on confidence and predictability.

So the people who make outsized bets and speculate about how to make big returns, they are moving outside of, of of what's to be expected.

So like if you actually want to like make quick money, this is not financial advice but if one a person wants to make finding quick money, they have to be able to get into a position in an investment before some sort of news or information or reality that causes the price of whatever you're investing in to go up significantly.

Otherwise everything is a long term investment.

You know, it's like at the end of the day.

So if like the majority of us are probably not in a position where we should be making big bets on Things that are outside of standard, standard investment strategies.

So for example, we start off with our emergency fund.

And then once we get our emergency fund and then then of money then we go and we build our, we start maxing them out our Roth ira, which I think is six, six thousand dollars a year.

And so like if you, if we're, if we got our emergency fund maybe say six months and then we're spending, we're maxing out our Roth ira, then we should.

And that Roth IRA money is probably best advised.

And you could talk to a financial advisor, but I'm pretty confident that they'll advise you to buy the s and P500, the NASDAQ.

So basically buy the whole US stock market.

So that means that this economist expectations is the piece that is most important.

Okay, so let's keep going.

So what economists are saying.

Economists are saying that inflation rose at a mild pace in January, which offers some relief after a string of economic reports that suggesting that inflation is heating up again.

So because that's what I'm reading, inflation is coming back and January's data slows things down.

Now if you look into seeing what Americans are saying, this is how Americans are feeling.

So this is where your customers and the information about your customer comes in.

Like how is your customer feeling about the economy?

Well, according to this, it says that prices in the last few weeks have been going up.

So people are still, the majority of people are feel like things are not getting better or things are getting worse in terms of how much price is.

How about this one?

Is your income keeping up with inflation?

Well, 77% of people say it's not.

All of this is weighing on consumer sentiment and consumer buying buying habits.

So if the customer is feeling these things, then we are all going to.

If we're not already.

I know in the DMV we're already seeing this fallout and according to this news that I've been sharing with you, the rest of the country will likely feel it in a couple months.

And let's see.

Oh, financial situation.

So this is interesting.

So people's financial situation.

Half of the country says it's good and just around half say it's bad.

So that's interesting.

So we're like literally kind of going teetering a little bit now your financials and then this is by income.

If you're.

Is your financial situation good?

Well, it says here 50,000.

If you make less than 50,000%, only 32% of you are saying it is good.

If 50%.

Sorry.

If you make $50,000 or less, then it says that 60% of you is saying it's bad.

And if you make fifty to a hundred thousand, the majority of people say it's good, but not by much, just a simple majority.

And if you make over a hundred thousand dollars, then the majority of you are saying it's good.

So you, this is important because the demographic of your clientele falls within this.

I highly suggest you, if you're not watching this live or on Instagram or on YouTube and you're listening to this on podcast, you should definitely click the links and check out this data on the CBS article.

I think it's really cool and really visual and we'll, we'll post some of it as well.

Okay, so x.

How many of you expect the economy next year to be booming or growing?

34% holding steady, slowing in a recession is the majority.

So the majority of people think that things are either going to stay the same or get worse.

Which if they stay the same, that's not necessarily a positive.

Okay, percentage of people who are concerned about saving and buying extras.

Do you think that we are an extra?

Well, if you're in a luxury market, then you are maybe an extra, but it depends.

Are you a luxury market?

Like an aspirational luxury?

Like do, do you sell to customers who want to pay more money and enter into the luxury space or, or are aspiring to become more wealthy?

Because that is a thing and aspirational purchases are.

Don't look like they're going to hold up.

So you're either clientele is making us, you know, the hundred thousand dollars or more.

And I think that depends on where you live because a hundred thousand dollars and middle of nowhere Nebraska versus in D.C.

is a very different living experience, I'll tell you that.

And so the percentage of people who are concerned about paying debts, paying for housing and paying for goods is 50% or more of people are concerned about these things.

So this is all weighing on consumer data.

And I would love to hear from you, how is this impacting your, your business?

And I'm going to go with one last little piece to kind of sign off here.

I found something.

In the space of employment, Gen Z isn't quiet quitting.

They're rejecting outdated leadership.

I'm gonna.

Yeah, okay, so let's see.

Yeah, Salon, Nova.

Stylists are feeling it for sure.

Yeah, I know, I know.

We're definitely feeling it up here.

We're gonna be doing a community conversation soon about that.

Okay, last news piece.

And I'm gonna let you go.

Gen Z isn't quiet quitting.

They're rejecting outdated leadership.

So as you know, the hairdresser Strong show started off really digging into the expectation gap between Gen Z rising stylists and salon owners.

And we believe that we figured out the solution and it is community.

And if you want to know more about that, you can look at our website or check us out.

But check this out.

Okay?

So if your company is losing Gen Z talent, chances are the problem isn't.

It isn't them, it's you.

Now no salon owner wants to hear this because we all spend so much time and all the managers and all leadership, we spend so much time trying to do our best and so we don't want to hear that we're not doing a good job.

So what I did is I dug into this and I found that what is the information we can actually use?

Because I don't think any of you are bad leaders.

I just think that we need to understand the psychology of the new talent coming in so that we can communicate and in onboard them and train them and retain them successfully.

So the real problem leadership hasn't kept up.

I think this is more accurate not keeping up than the title of outdated leadership.

Now maybe they mean the same thing or it's splitting hairs, the semantics.

But Gen Z grew up amid economic uncertainty, social justice movements and an increasing focus on mental health.

They don't just want jobs, they want workplaces that prioritize psychological safety, transparency and fairness.

And yet many companies still cling to outdated management styles, rigid hierarchies, inconsistent expectations and vague career paths.

Well, that's the gospel we preach at Hair just as strong.

So all salon leadership should understand that having documentation for the intake and onboarding process is something that will be vital for increasing the odds of attracting new talent.

And what I mean by that is every single thing about your business should be documented.

Think of what it would be like to go work at say, I don't know, like, like a Stephen Starr restaurant, a little diplomat or like imagine like Stephen Starr.

Bill is a known restaurateur that has very successful businesses.

And the secret, one of the secrets to business and especially the, the ability to scale is documentation of all your processes.

And you have internal processes, but then you also have these stuff that you can share externally.

So you have two versions of, of this documentation about your business.

How, what everybody's role is, how, how people come in, how people grow.

And that's the biggest piece for the new talent is what is their path and can you make it something that is structured and something that they can work through, but something that they can do at their own pace and move faster or slower.

Or do you have a rigid one year training program?

That's really what we're talking about here.

Now I'd love to hear from you, what are your thoughts about this?

This is the news.

I love the fact that we get to get together.

You'll be seeing more of this and I really would like to hear how are you preparing and dealing with the fallout of the, of the government and like the breakdown and the cuts and all this stuff and the tariffs and, and you know, potential inflation creeping up in the short term, what is it going to do in the next few months?

The rest of the country is going to feel what some of what DC is feeling.

Hopefully not as much.

So talk to me, want to hear from you, tell me what you're doing.

All right.

And also how are you updating your onboarding systems?

All right, leave a comment below.

Shoot me a DM.

Shoot me an email.

Listenairjusterstrong.com I'd love to hear from you and I'll talk to you all later.