LIZ ANN SONDERS: I'm Liz Ann Sonders. 

KATHY JONES: And I'm Kathy Jones.

LIZ ANN: And this is On Investing, an original podcast from Charles Schwab. Each week we analyze what's happening in the markets and discuss how it might affect your investments.

KATHY: Well, Liz Ann, we're into March now. How would you assess the first two months of the year? I think the S&P is up about 7% on the year so far. Is there more bullish sentiment out there, or are people still kind of nervous about this market?

LIZ ANN: Um, yes. I know you asked me an "or" question, but it really depends on who you talk to. You know, traditional measures of sentiment, and as you know, Kathy, I look at every variety of sentiment indicator and tend to think of them as falling into one of two buckets, either attitudinal measures of sentiment, so survey-type sentiment data, which is really just asking folks opinions or judging opinions from cohorts like newsletter writers. And then there's behavioral measures of sentiment, what investors are actually doing, things like the put-call ratio in the options market or fund flows. And for the last couple of years, there's often been a mixed bag where, you know, in the throes of the bear market in 2022, around midyear, we hit a record percentage of bears and a record low percentage of bulls, and that's based on the AAII, American Association of Individual Investors. 

But interestingly, they also track what their members' equity exposure is. And at the time you had a record-high amount of bearishness, you were only a percentage or two off a record-high percent equity exposure. So what investors say and do sometimes are not consistent. More recently, I'd say both measures show, maybe excess enthusiasm is not the right word. We know that an extreme sentiment can serve as a contrarian indicator, but you can also have extremes of optimism that last years like was the case in the 1990s. So the one word of caution is no matter how extreme, do not consider it anything resembling a precise market-timing tool. It's simply not. And the last thing I'd say is, yes, the S&P's had a good year, you know, trading on and off around all-time highs. Same with the NASDAQ. But here's an interesting stat.

The NASDAQ, the index overall, has had no more than a 3% drawdown from a year-to-date high this year, so far in 2024. The average member stock within the NASDAQ has had an average maximum drawdown of –22%. So there's a lot more going on under the surface than what you might pick up by just looking at the indexes. And that's just because they're cap-weighted. You know, you continue to have a somewhat small handful of larger-cap stocks that are driving performance, but I think stats like that are important to keep in mind as well. So what's going on in fixed income world these days, Kathy?

KATHY: Well, Liz Ann, I'd say that it's a bit of a mixed bag. So a couple of things stand out, though, in terms of what's happening in the market. Yields are kind of moving sideways. But the Treasury market has fully now adjusted to the idea of what the Fed has been signaling in the dot plot. And that is that yields will probably stay where they are until the second half of the year, and then the market's pricing in three rate cuts, which is consistent with the last dot plot from the Fed. So to that extent, maybe all of this chatter from various Fed officials, emphasizing that they're not in a hurry to cut rates, has had an impact in that the market is now aligned with what the Fed has been saying. But another thing that's really interesting is just how well the credit markets are doing. So we look at corporate bonds, including high-yield bonds, even the lower-credit-quality high-yield bonds, doing very, very well. 

So we look at that yield spread versus Treasuries of comparable maturity, and those are very low. In some cases, as if we're pricing in just a kind of nirvana in the economy. I think what it comes down to is it just strong demand for yield at a time when the market still expects that central banks around the world will lower rates, so there's less risk on the upside. But you think about how long we were yield-starved, a decade or more. Individual investors, institutional investors around the world just want to lock in some yield, and that's, I think, why we're seeing this continued kind of persistence where, if the yield's roughly 5% or more, there's this tremendous demand, and people are kind of overlooking a lot of the risks because the feeling is, well, "Even if the economy doesn't do so well, the Fed will cut rates, so we'll be OK." So a little bit of an analogy with the stock market there. You still have a lot of optimism that what happens with the Fed will be positive for the fixed income markets.

So with that, Liz Ann, I know we're talking about retail today, and I'm sure our listeners have been sensitive to all sorts of changes in retail prices in the past couple of years. So tell us a little bit about our guest this week.

LIZ ANN: So I had a great conversation with Matthew Shay, who is president and CEO of the National Retail Federation, NRF for short. It's the world's largest retail trade association. He serves as chief advocate and spokesman for the nation's largest private sector industry employer, which that industry, the overall retail industry, is responsible for supporting one in four U.S. jobs—that's 52 million working Americans—and generating almost $4 trillion in annual GDP. Matt serves as chairman of the U.S. Chamber of Commerce Association Committee of 100, and he previously served as president and CEO of the International Franchise Association. He's a frequent guest on CNBC, Fox Business News, Bloomberg Television, and I should also say up front that his office is right in the heart of Washington, D.C. So if you hear sirens in the background, it's probably a motorcade or a fire truck or maybe one side of the aisle or the other screaming. So just keep that in mind in terms of background noise.

So Matt Shay, thank you so much for coming on the podcast today. It's a fascinating topic, so we really appreciate you being here.

MATTHEW SHAY: Well, Liz Ann, thank you. It's nice to be here. I appreciate the invitation and the chance to visit with you.

LIZ ANN: Sounds good. So I want to start big picture, but I want to put my first question in the context of an observation about something that's quite unique and interesting about this incredibly unique cycle. That's the ultimate understatement in this post-pandemic world. But it's a question about just the general health of the consumer and consumption, but the context is that there's been this interesting backdrop of a wide spread between what so-called soft economic data is saying and what hard economic data is saying. And specific to the consumer, you have metrics like consumer sentiment or consumer confidence that, although both have recovered a bit, were in recession-level kind of weakness for quite some time, yet you didn't see commensurate weakness in consumption. So with that a sort of backdrop, what is your sense of the health of the consumer? Are you starting to see maybe some cracks that people have been looking for for some time?

MATTHEW: Well, I think it's a good place to start the conversation because in the economy in the U.S., of course, so much of our economic activity and GDP is driven by consumption. And so much of that is driven by consumers and households, and businesses as well. But consumers and households, especially in the four years now that it's March, effectively, of 2024. It's been almost exactly four years since that fateful evening in 2020, Wednesday, March 11th, the day that we really all recognized that we had a pandemic, we had a real challenge. And after an initial pullback in consumption in the first 60 days, plus or minus, we've now seen 42 consecutive months of month-over-month retail sales growth driven by consumers. And I think that's for a couple of reasons. One, of course, the obvious one was that in the 18 months after the pandemic was declared, we put almost $5 trillion of fiscal stimulus into the economy and right into the hands of households and consumers and families.

And that got put to work. Some of it paid down debt. A lot of it got put into savings. Much of it was used for purposes of consumption. And then we also saw the Federal Reserve put $5 trillion of monetary stimulus into the economy with very accommodative monetary policy and various support programs, loan programs, for businesses. And so I think the fact that we've seen this enormous and substantial period of time during which we've seen consumption growth and consumer activity is really driven by the way we set this up. And the U.S. approached this differently than other countries and other economies around the world did. And looking back now, in spite of the fact we've had to address fairly high levels of inflation, the United States is the only economy that's still growing relative to what's happening in other parts of the world. 

So consumers continue to be at the center of driving economic activity in the United States. We believe, to answer your question more specifically, we believe there's still substantial savings, firepower on the sidelines that consumers possess. And we do recognize that consumption is moderating. And there's no question that we've seen labor markets come back a bit more into balance. We've seen wage growth moderate. We've seen consumers become much more thoughtful, deliberate, in their purchasing, and because of the way inflation has impacted family budgets, we've seen a lot less consumption relative to 36 months ago on the goods side, and far more of it's gone into food, energy, housing to make ends meet with the monthly budgets, notwithstanding that wages continue to outpace inflation for all demographic groups. So it is an interesting time. We're still confident we're going to have a good year, but there remains a lot of uncertainty about what the future looks like, the further we get from all that stimulus and consumers spend into the pandemic savings.

LIZ ANN: Yeah, now, Matt, on the excess stimulus story, there's still a lot of divergence in opinion in terms of how much of it is left. But regardless of the aggregate amount, I think pretty much everybody that analyzes this concedes that it's biased more up the income spectrum and not down the income spectrum. And it's down the income spectrum or in things like subprime categories that you're starting to see some cracks and a little bit of pain. So are you seeing it in terms of what your retailers are sharing as it relates to whether it's a change in unit sales or maybe more broadly, just how spending habits have changed, at least for the cohort of consumers that may be a bit more tapped out relative to either the aggregate or the upper end of the income or wealth spectrum?

MATTHEW: Yeah, Liz Ann, I think we have seen, and we have heard, that households and families and consumers in the lower-income quintiles have adjusted their spending. We had very strong holiday sales. So we were up 3.6%, 3.5% growth for the holiday season, November 1 to December 31, which is very much in line with the 10-year average, if you pull out the pandemic years, which were irrationally exuberant to use a phrase in 2020, '21, and '22, when we were 7 or 8% or 10 or 12 or 14% growth. Three and a half to 4% growth on a 10-year basis would be above average, and we had that in the most recent holiday season. So we did see consumers participate in that period, and we saw the households at lower-income levels really look for value, for deals.

They were deliberate. They were careful. They waited for promotions. It was a much more promotional environment than we'd seen several previous holiday seasons. And I think that does reflect that, at the lower-income levels, households and families are much more careful about their budgets. They're much more aware of inflationary pressures. They're feeling them. They're devoting more of their monthly disposable income to rent, for example, into other expenses. And so they've got to be more deliberate, and they're less able to spend in some discretionary categories. 

Having said that, I think you can look at categories of retailers in apparel, in specialty and various others that are non-food, not general merchandise. And they did see moderation because people have migrated over to devoting more of that economic activity into places where you think of a general merchandiser that sells groceries and discretionary items. A very large one of those companies reported earnings recently and did very, very well. And I think that has a lot to do with the inventory mix and the ability to deliver a wide range of goods to consumers in a single experience rather than cleaving off the more discretionary items where consumers maybe need less of that now in some ways because they did so much of that consumption earlier in the pandemic.

LIZ ANN: The consumption has also been increasingly shifting. We've seen obviously a big jump in use of credit cards, and certainly in the subprime category, that's where delinquencies have picked up. But talk also about the more recent shift, maybe by some people, away from credit cards toward the buy-now, pay-later programs. How prevalent has this been, and how do you see the future of the relationship between credit card spending versus buy-now, pay-later?

MATTHEW: We've certainly seen a big jump there, a big growth. We know that the flexibility that's provided by the buy-now, pay-later businesses that have come into the market have created new opportunities for consumers to make those usually interest-free purchases, frequently with very favorable economics on late fees. Sometimes there are late fees, but other times there's more flexibility there, and so, you know, I think our estimate was that in 2023, the buy-now, pay-later usage was roughly $75 billion, which was only about 1% of the total retail market, so in absolute terms, 75 billion is a very large number. In relative terms, it's a fairly small proportion of retail sales. We see a little bit more prevalent on the e-commerce side. It's more like 5% of e-commerce, where it's only 1% of blended all-retail sales, but it's growing very rapidly. So I think growing between 15 and 20% last year and coming into 2024. And I think it's something that, because it is relatively new here in the U.S., I think there's much more penetration of these kinds of services in the European market, for example, and in some countries in Europe where the range of transactions that take place with these sorts of services is on the order, in some cases, of up to 20%.

And so I think that's something that we're going to continue to see more of here based on the growth. And it does appeal to consumers that have a certain profile, generally lower-income consumers at the lower-income quintiles, lower credit scores, younger consumers who would fit those categories for other reasons, but who are also more comfortable with using this kind of technology, these kinds of new services, I think also are part of that profile. 

So I think this is another alternative for consumers to help them in the marketplace, but like credit, this is something that needs to be deployed thoughtfully. And people that use these services need to recognize that, you need to be disciplined about this. You need to have a plan for making these payments, as you do with any other form of credit or any other form of borrowing. And I think that's the piece that remains to be seen is how consumers learn to take advantage of these services in a way that really does provide a positive benefit and an alternative as opposed to something that creates more challenges for some of the folks that use these.

LIZ ANN: So Matt, you mentioned challenges, and that popped into my mind somewhat recent big challenges that the world of retail has faced, one of which, I suppose, retailers arguably have some control over, the other, they do not. And that is the retail theft problem and the implication for retailers, what they're doing about it. And then more recently, of course, the shipping crisis with what's going on in and around the Suez Canal. And they're obviously not blended together, but start wherever you want and just share how the retailers are addressing both of these problems.

MATTHEW: Yeah, I think the one that we can and should find solutions to here in the U.S. and in communities and jurisdictions around the country is this issue of organized retail crime. And we make the distinction between organized retail crime, which is much more sophisticated, planned enterprises that exist for the purpose of stealing merchandise from retailers in ports, through logistics hubs and centers, in transit distribution centers, warehouses, fulfillment locations, stores, all of those places. And we distinguish organized retail crime defined that way from shoplifting, which are individuals who steal an item or two or a handful for personal consumption. And there's a very, very big difference between those. And we've tried to build relationships and partnerships at the local, state, federal level, with legislators, with community leaders, with law enforcement at the at the local, state, and federal level to build support for solutions because many of these institutions are burdened with the challenges of trying to manage this problem. Local police forces, state police departments, and legislators and leaders at community levels, and they're experiencing the impact here. 

While there's a real dollar impact and there always has been, and that number continues to grow, our most recent study and analysis that this number is now in excess of $110 billion in organized retail crime and shrink in 2022 that the numbers keep growing. But beyond simply the numbers, there's the human cost that impacts these local communities. And it impacts store associates and workers and team members. And so what we're working on now at the congressional level is to pass legislation that addresses both the way in which these goods are then sold on the market. That's the Inform Act, was passed last year to make it much more difficult to put these on online marketplaces and sell them, and the Combating Organized Retail Crime Act, which is pending in Congress now, has broad bipartisan support, House and Senate, more than 100 co-sponsors, Republican, Democrat. And that would provide resources for the Department of Homeland Security to act as a national clearinghouse to coordinate and share information across law enforcement to make sure we identified repeat offenders and hot spots and real challenging areas to pursue those. So, we think there's an opportunity here to make real progress, and we want to partner with organizations that feel the same way, of which there are many, and that's going to continue to be a very high priority for the NRF and our members because the impact it's got on customers and on team members. 

On the shipping crisis, what's happening in the Suez Canal and the Red Sea, this is one that's a bit out of the control of the retail industry. And we know the fact that what's taking place in the Red Sea and the approaches to the Suez Canal is adding time and expense to shipping because, many cases, shipping companies have made decisions that it's not safe for their cargo to pass through the Red Sea because the attacks that are coming, so they've decided to reroute those shipments, and that adds of course extra time, up to two weeks, adds extra expense per shipment, per load, and in some cases, retailers are either shipping, rerouting, all the way to the West Coast of the U.S., and then through intermodal and trucking and rail, moving it across the U.S. from the West Coast to the East Coast. Or they're going south from the Suez Canal around the Cape of Good Hope and then back up to Europe, which adds time and expense. 

You know, thus far, Liz Ann, in the conversations that I've had with CEOs of major retail companies, they've expressed that, while this is a challenge, thus far it's been manageable because of the time of year we're in. Fortunately, there's heavy shipping seasons for retailers in the U.S. are really August, September, October, that's when they're bringing in back-to-school goods as the school year begins in the United States, that's when they're bringing in holiday goods, the beginning of the holiday season in the U.S. Because we're in the period of the Chinese New Year, many factories in the manufacturing hubs in mainland China are closed during the New Year celebrations. So there's a relatively more modest pace of shipments coming from those Asian ports at this time of year anyway. So that helps a bit. So I think the biggest issue really is the uncertainty here, and so while it's manageable for the moment, anything that creates uncertainty is a challenge. And we know that our supply chain was very much compromised during the pandemic, in 2020 especially. And so avoiding that kind of uncertainty, I think, is critically important for shippers and for retailers and for customers of the shipping lines because of the cost that it adds. Because of challenges in other places. The water levels in the Panama Canal are lower. We've got potential labor issues and potential strikes here in the U.S. That all becomes hard to manage and hard to forecast. So we're watching it carefully at the moment. It's manageable, but we certainly think there needs to be resolution in the near term.

LIZ ANN: Now, whether it's tied to the shipping crisis or some of those other macro forces, and I agree with you, I think the landscape has changed, whether it's the more near-term shipping crisis, let's hope near-term, but also, as you point out, challenges in terms of demographics and labor shortages and climate change. How does that weave into your perspective on what is the big topic these days, which is uncertainty with regard to inflation, particularly on the goods side of the equation, because that's where we had seen such relief, even in the face of services inflation being stickier and having accelerated later. We went from this major goods inflation problem in the early part of the pandemic, specifically during the stimulus era, but then that gave way to much more significant disinflation. And we've started to see a little bit of a hook back up. Do you think that's a temporary phenomenon? Or do you worry about some volatility in inflation as we deal with this macro uncertainty, especially as it relates to the Fed?

MATTHEW: Well, at the moment, I think the issue of inflation on the goods side really is about external factors like what the Fed does or what happens with the supply chain or with shipping or what would happen hypothetically if there was a disruption in the trade routes from Asia because of a conflict in Southeast Asia and that part of the world. Then I think there might be real issues. I think the Fed's got a complicated job and walking a bit of a tightrope, but when you think about their objectives, before they begin to ease and lower rates, as long as they've got price stability and low unemployment and positive GDP and economic growth, I don't think the Federal Reserve's in any hurry to start reducing rates, notwithstanding the fact that, you know, the longer they wait, the more restrictive the just holding the rate at the level at which it is now becomes more restrictive every day that inflation subsides a bit, and so if they want to keep pace, at some point they should start lowering just to achieve a neutral rate, whatever that number might be, which of course gets discussed and debated. So my sense is, from talking to our CEOs and executives, both at our convention in January—we have almost 45,000 folks in attendance at our annual meeting and talked to many retail executives, and since then many more—and my sense is that while people feel the environment, there is a fair amount of uncertainty. 

The big question is "What is the Fed going to do, and when will the Fed do it?" That for the moment, as long as the labor market is coming back into balance, wage pressures are easing a bit, consumers, while they express negative sentiment, they continue to be engaged in commerce. They haven't stopped consuming. This isn't like what we saw 15 years ago with the Great Recession, when people really didn't spend, and we saw enormous job losses. This is very different. People are spending. People have jobs. Unemployment rate is low. We've seen deflation on the goods side. 

The GAFO category of "general apparel, footwear, other," which basically is electronics and jewelry and everything you can fit in a department store basically is what's in the GAFO, G-A-F-O category, is, think of it as the inventory of a department store, and that category—broadly speaking, lots of components in there—but it is only growing at about half a percent, so it's really moderated there. The inflation is in other categories, but it's not on the goods side. And back to your question at the beginning of the conversation about what a retailer is seeing, are they seeing lower unit counts or pricing? You know, at some point, deflation can be challenging to manage through, as well, because you don't have the same kind of pricing opportunities. But I think our members feel fairly comfortable that, as long as the environment stays the way it is, that we still may get that sort of softish landing, or if there is a real slowdown, it's going to be very mild primarily because of where wages and the labor markets are. And as long as there's not an enormous separation from employment and labor markets aren't seriously disrupted, then consumption will continue because when people have jobs and they're earning wages, they spend. And that's what we've seen the last four years. And I think we have reason to believe that will continue, even if it does moderate a bit.

LIZ ANN: So I want to wind our conversation down with a topic that these days seems to be the first part of any conversation, regardless of the industry, which is, it's specifically a question about artificial intelligence, AI, but I was thinking of it more in the context of disruption to industries. And I think about the disruptors in the retail world, obviously Amazon being probably the most significant among them. And it's not so much about are there company disruptors, but what are the disruptions happening broadly in the retail industry, and how does AI come into the mix? How are retailers thinking about it? Those that have already adopted it or are trying to expand the use, what are those most compelling trends that you're seeing, AI-related or other disruptions that are unique to this present day?

MATTHEW: Well, AI, of course, as you said, is on everyone's mind. It's every conversation. And at our show, at our annual convention in New York, it was the topic of every discussion, seemingly. I was going to say virtually, but it was actually literally. But stepping back from that, I think there are two things about the pandemic, and one of them is related to your question about disruption. The other one is not really, but I marvel at it nonetheless. And that is about the supply chain. For all the much-maligned supply chain, you know, that was almost like the answer to one of those drinking games people played in college. "What's the answer? Supply chain, supply chain." You know, the answer to every question in 2020, '21, '22 was "Uh, supply chain, uh, supply chain." And yet the supply chain actually worked. We didn't have food riots. We were all able to get what we needed to work from home, live from home, recreate from home, entertain from home, go to school from home.

You know, there were some slight interruptions at the beginning, but the supply chain worked. The supply chain that was built for annualized growth of 2 to 4%. We saw 30% increase in imports in container volume as a proxy for demand in 2021 and 2022. Demand was up 30%. And yet we were able to fulfill all those requests. So I think the supply chain, maligned though it has been, was actually quite a marvel and worked extraordinarily well. The other thing that I think is more to your question about disruption is, if we think back to the third and fourth quarter of 2016, early part of 2017, every story we read, every time we had a television screen on watching broadcast news, the business channel, it seemed as if every story was about the retail apocalypse and the retail ice age and the end of retail stores and store closings. Well, what happened during the pandemic? Well, what happened was retailers continued to do what they'd been doing, which is thinking about their stores as the center of engagement opportunities with consumers. But during the pandemic and since the pandemic, the store has become, I think, the new superstar in the retail world. And stores are now used for fulfillment. They're used as distribution centers. They're used to support e-commerce activities. They're used to engage customers. So stores are now the center of the experience in a way that five years ago they really weren't.

And there have been enormous investments in stores. You see retailers making announcements on a regular basis. Now we saw a big one last week, opening new stores, investing in stores, rehabbing and refurnishing stores. And so I think that creates an opportunity, building on the disruption question, to now deploy technologies like AI and virtual reality and augmented reality to create experiences in a place. And even the naysayers, even the pure play, "We're never going to have stores; we're only going to be online." Well, you know some of those companies, I could name some of those brands, they all have stores now. They all want stores. Now, maybe they don't need thousands, but they know that they need stores, they need flagships, they need to be in certain markets, because it's a great way to engage with your customers. And it's a great way to build the brand. And it's a great way to create experiences that you can't create online on your mobile device, on a laptop, the same way you can create an experience when you're in person. And so deploying AI, for example, I think is going to play a role in a whole range of things. 

Certainly, in this day and age, we know that personalization and customization are more important than ever. That customers respond to and now frankly have an expectation that what they receive is tailored, customized, personalized for them. And artificial intelligence is going to help retailers do that much more effectively. But even before that experience and that interaction, artificial intelligence is going to help retailers and their partners with fulfillment, with logistics, with sustainability issues, payments issues. So I think there's a whole range of ways in which AI is going to be deployed sort of in the back of the house that creates efficiency, as well as in the front of the house in ways in which the consumer really feels it and is aware of it. I'm reminded of the comment that Mark Lore, the founder of Jet.com and a number of other businesses before and since, shared with me once when we were on stage together a few years ago. And Mark said, "Listen, I'm a technologist. I love technology. That's my background. That's my reputation. But remember that the point of technology in retail is simply to make us better merchants." And I think for the retail industry, AI has the opportunity to really compress the experiences, to take friction out of the experiences, and to deliver services and convenience and personalization to customers in ways that's going to strengthen the relationship between a retailer and its customers and really build brand loyalty, build brand awareness. And for those that are able to do it effectively, I think capture market share and bring new customers into those brands.

LIZ ANN: Well, that was great. There was nothing artificial about the intelligence you brought to this conversation. So Matt, thank you so much for joining us. We really appreciate your time.

MATTHEW: Thanks, Liz Ann. I really enjoyed the conversation. Thank you. And sorry about the sirens.

LIZ ANN: Nature of the beast, ha ha.

KATHY: Well, thanks, Liz Ann. I think that's a really interesting point of view actually different points of view about different parts of the consumer market, and retail is such a huge part of the economy. It's definitely one of the economic indicators we'll be watching throughout the year. Now looking ahead to the first full week of March, what's on your radar?

LIZ ANN: It's a pretty busy week in terms of data releases. You've got the S&P version of the PMIs, the Purchasing Managers Indexes, both on the services and manufacturing side. You also have ISM services, which that's a PMI that maybe is a bit more widely watched than S&P's versions. You've got obviously the jobs report, the big one at the end of the week, but in advance of that we get ADP and job openings and quits versus the JOLTS report. One important reminder for folks is when JOLTS comes out, it lags by a month. So it's data for the month prior that any other labor market releases reports. So always keep that in mind. Challenger layoffs that I think increasingly is in focus. The combination of productivity and unit labor costs. 

I'm guessing the Fed's Beige Book is probably one of the things on your mind, Kathy.

KATHY: Yeah, obviously we'll be watching all those numbers as well, particularly the employment data, since it's a key to assessing what the Fed's going to do. But yeah, the Beige Book is always a good, interesting read because it gives you a summary of, you know, really what the Fed is looking at in terms of the economy. So I think that it'll be interesting to see manufacturing versus retail, you know, etc., and how that's broken down. And of course, the assessment for inflation prospects. 

So that's it for this week. You can follow our updates on X, formerly known as Twitter, and LinkedIn. I'm @KathyJones—that's Kathy with a K—on Twitter and LinkedIn.

LIZ ANN: And I'm @LizAnnSonders—Sonders is S-O-N-D-E-R-S—on X, or Twitter, and LinkedIn.

So, speaking of social media, I'm fortunate to have an opportunity to use this platform, and Kathy, I know you deal with the same thing, but there's been such a rash of imposter accounts, and not just on platforms like Twitter (or X) where, last tally I looked at, there were about 30 people trying to impersonate me. One benefit to this podcast and how we post it is, if you click on the link, you go to the right Twitter feed, but do keep that in mind when you're scrolling. But also, the real big problem is more on Facebook and Instagram with imposters that are actually not only impersonating me but pitching investing ideas and private stock-picking clubs. I'm not active on either Facebook or Instagram. So if you see anything that resembles me on either of those platforms, it is not me. So a public service announcement. I know, Kathy, you have dealt with some of the same things as well.

KATHY: Yeah, I'm not active on Facebook at all. On Instagram, I never post anything. I just follow my friends' pictures of their dogs. And my daughter who is fond of tugboats and does videos of tugboats. But other than that, no, I'm not active on either of those platforms and have had a few impersonators. And I just want to reiterate, we will never, ever solicit you on social media for any sort of business investing proposition. And that's the part that bothers me when they reach out to our clients or to other folks and try to pitch them on something and get their personal information, etc. We'll never do that. Absolutely Schwab will never do that.

LIZ ANN: Wouldn't it be nice if these folks would put their considerable efforts into something more beneficial?

KATHY: You would think they might actually have a good career doing something honest. Yeah.

LIZ ANN: Yeah, yeah.

KATHY: Thanks for listening. You can always follow us for free in your favorite podcast app. And if you've enjoyed this episode, tell a friend about the show or leave us a rating or review on Apple Podcasts.

LIZ ANN: And next week, we are going to focus on equities and take a look at some specific sectors, which is always of interest, I think, to our listeners. And that's with our colleague and my right arm, Kevin Gordon, so stay tuned for that. I think it'll be a fascinating conversation.

For important disclosures, see the show notes or schwab.com/OnInvesting, where you can also find the transcript.