1
00:00:00,840 --> 00:00:04,000
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

2
00:00:04,040 --> 00:00:05,200
Speaker 1: my co host Matt Miller.

3
00:00:05,640 --> 00:00:09,600
Speaker 2: Every business day, we bring you interviews from CEOs, market pros,

4
00:00:09,720 --> 00:00:13,600
Speaker 2: and Bloomberg experts, along with essential market moving news.

5
00:00:14,160 --> 00:00:17,279
Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever

6
00:00:17,400 --> 00:00:20,000
Speaker 1: you listen to podcasts, and at Bloomberg dot com slash

7
00:00:20,040 --> 00:00:24,720
Speaker 1: podcast Economists, I mean, I don't know. We're told we

8
00:00:24,840 --> 00:00:27,800
Speaker 1: have to talk to them, so we So we've frightened

9
00:00:27,800 --> 00:00:29,600
Speaker 1: this guy, Stewart paula in there. He's a new guy.

10
00:00:30,120 --> 00:00:32,639
Speaker 1: I didn't hire him, but he's at Bloomberg Economics. He's

11
00:00:32,640 --> 00:00:36,040
Speaker 1: an economist here and we love talking to him. He's

12
00:00:36,040 --> 00:00:37,360
Speaker 1: not a new new guy.

13
00:00:37,479 --> 00:00:39,240
Speaker 3: He has a lot of experience on the street.

14
00:00:39,280 --> 00:00:40,280
Speaker 1: Oh he's been around forever.

15
00:00:40,360 --> 00:00:42,600
Speaker 3: Yeah, he's a research fellow at the fd I S.

16
00:00:43,159 --> 00:00:45,519
Speaker 1: But who gets a PhD in economics? I mean, talk

17
00:00:45,520 --> 00:00:45,839
Speaker 1: about it?

18
00:00:45,880 --> 00:00:46,480
Speaker 3: Work for teal?

19
00:00:46,720 --> 00:00:49,760
Speaker 1: I know that's pretty cool. Hey, Stuart, you're in our studio, man,

20
00:00:49,800 --> 00:00:52,960
Speaker 1: you get like a double star on a Friday in studio.

21
00:00:53,159 --> 00:00:55,880
Speaker 1: That is, he's always an effort man. You guys, have

22
00:00:56,080 --> 00:00:59,640
Speaker 1: you and your team have a great story out or

23
00:00:59,800 --> 00:01:03,400
Speaker 1: no doubt consumers lived beyond their means through third quarter.

24
00:01:03,400 --> 00:01:05,839
Speaker 1: And then that's Matt Miller, I mean, as he's looking

25
00:01:05,840 --> 00:01:09,920
Speaker 1: at his Dodge Challenger parked in the garage and coveting

26
00:01:10,000 --> 00:01:13,160
Speaker 1: that what are the numbers behind that are just have

27
00:01:13,240 --> 00:01:15,080
Speaker 1: we exhausted all our savings and that we're just kind

28
00:01:15,080 --> 00:01:17,200
Speaker 1: of borrowing And that's how the big spending number comes

29
00:01:17,240 --> 00:01:17,720
Speaker 1: out today.

30
00:01:17,959 --> 00:01:20,440
Speaker 4: Well, so the savings picture is a little bit complicated,

31
00:01:20,440 --> 00:01:23,040
Speaker 4: but the headline numbers make it pretty clear that consumers

32
00:01:23,080 --> 00:01:25,080
Speaker 4: were living beyond their means and it was mostly due

33
00:01:25,120 --> 00:01:28,000
Speaker 4: to discretionary services spending in the third quarter and that

34
00:01:28,000 --> 00:01:31,560
Speaker 4: continued through September. And so when we're looking really in

35
00:01:31,800 --> 00:01:34,400
Speaker 4: real space, which is what matters most, we see real

36
00:01:34,440 --> 00:01:39,000
Speaker 4: disposable income declining for four straight months and gangbusters spending

37
00:01:39,000 --> 00:01:42,479
Speaker 4: throughout the quarter, including on discretionary items. So the real

38
00:01:42,560 --> 00:01:46,200
Speaker 4: question ends up being what's the FED going to do next? Fortunately,

39
00:01:46,440 --> 00:01:48,600
Speaker 4: within the report, there's one little bit of a silver

40
00:01:48,680 --> 00:01:51,520
Speaker 4: lining on the inflation side, and it's that in flight

41
00:01:51,640 --> 00:01:54,120
Speaker 4: there was actually deflation for some of the most important

42
00:01:54,200 --> 00:01:56,320
Speaker 4: durable goods, some of the things that are going to

43
00:01:56,360 --> 00:01:58,520
Speaker 4: be most front of mind for those of us who

44
00:01:58,520 --> 00:02:00,920
Speaker 4: lived through June of twenty one, for example, and we're

45
00:02:00,960 --> 00:02:04,040
Speaker 4: really focused on auto prices. Autoprice is declining in the

46
00:02:04,080 --> 00:02:08,400
Speaker 4: PCE report, furniture price is declining. The catch all other

47
00:02:08,520 --> 00:02:12,840
Speaker 4: durables prices declining. And so we see monetary policy getting

48
00:02:12,880 --> 00:02:15,160
Speaker 4: some traction and they're just going to need to continue

49
00:02:15,240 --> 00:02:17,880
Speaker 4: leaning against the consumers who have been spending down that

50
00:02:18,000 --> 00:02:18,960
Speaker 4: saving spot pile.

51
00:02:19,040 --> 00:02:23,480
Speaker 2: Now can they continue leaning against consumers? Can Can monetary

52
00:02:23,520 --> 00:02:30,120
Speaker 2: policy get more aggressive even without them doing anything. That's

53
00:02:30,200 --> 00:02:33,079
Speaker 2: kind of the narrative that the Fed has been giving us, right,

54
00:02:33,160 --> 00:02:36,519
Speaker 2: this passive tightening thing that Bostik talks about.

55
00:02:36,760 --> 00:02:39,760
Speaker 4: Right, So the passive tightening would be that you see

56
00:02:39,800 --> 00:02:43,839
Speaker 4: economic activities slowing in the background while nominal policy rates

57
00:02:43,880 --> 00:02:46,560
Speaker 4: stay steady, all while the FED is continuing to soak

58
00:02:46,600 --> 00:02:48,520
Speaker 4: up liquidity by running down its balance sheet.

59
00:02:48,800 --> 00:02:49,679
Speaker 5: That is possible.

60
00:02:49,760 --> 00:02:52,000
Speaker 3: I suppose it's not. It's not doing nothing if they

61
00:02:52,040 --> 00:02:54,200
Speaker 3: continue QT essentially.

62
00:02:54,200 --> 00:02:57,119
Speaker 4: Yeah, I mean they still call QT passive. It really

63
00:02:57,120 --> 00:02:59,200
Speaker 4: depends on how much there is an active sales to

64
00:02:59,280 --> 00:03:02,600
Speaker 4: max out. There apps of ninety five billion dollars a month,

65
00:03:03,520 --> 00:03:05,040
Speaker 4: but they consider it to be one of the more

66
00:03:05,080 --> 00:03:09,880
Speaker 4: passive elements. Of their monetary policy, and as they continue

67
00:03:09,880 --> 00:03:12,960
Speaker 4: to soak up liquidity, as banks continue to see the

68
00:03:12,960 --> 00:03:15,800
Speaker 4: effects of higher rates resulting in deposits leaving and the

69
00:03:15,800 --> 00:03:18,800
Speaker 4: cost of credit becoming higher for consumers, it is the

70
00:03:18,840 --> 00:03:20,600
Speaker 4: sort of thing that ends up resulting in slow and

71
00:03:20,600 --> 00:03:21,560
Speaker 4: spending going forward.

72
00:03:22,680 --> 00:03:26,160
Speaker 1: Now, consumers living beyond their means? Isn't that what Americans

73
00:03:26,200 --> 00:03:28,360
Speaker 1: do in general? What's exactly?

74
00:03:28,480 --> 00:03:28,680
Speaker 2: I mean?

75
00:03:28,760 --> 00:03:30,320
Speaker 3: Have we just gotten back to normal?

76
00:03:30,360 --> 00:03:34,240
Speaker 2: Because when I put you know, Torsten Slocks list of

77
00:03:34,320 --> 00:03:36,920
Speaker 2: worries up to any of the bulls and I say,

78
00:03:37,520 --> 00:03:42,720
Speaker 2: you know, savings have been completely drawn down. Everything's going

79
00:03:42,720 --> 00:03:46,440
Speaker 2: on a credit card these days. Delinquencies are picking up. Yeah,

80
00:03:46,440 --> 00:03:48,720
Speaker 2: the bulls always say, so what, That's how it was

81
00:03:48,720 --> 00:03:49,800
Speaker 2: in twenty nineteen.

82
00:03:50,080 --> 00:03:51,480
Speaker 3: This is how we do well.

83
00:03:51,520 --> 00:03:53,800
Speaker 4: So here's what's not the same as in twenty nineteen.

84
00:03:54,000 --> 00:03:57,320
Speaker 4: Savings rates are extraordinarily low, and we've been with the

85
00:03:57,400 --> 00:04:01,520
Speaker 4: higher interest rates. Yeah wow, yeah, three point four percent

86
00:04:01,560 --> 00:04:04,520
Speaker 4: in September. Three point four percent savings as a percentage

87
00:04:04,520 --> 00:04:05,520
Speaker 4: of disposable.

88
00:04:05,040 --> 00:04:07,480
Speaker 1: Person of your daughter, Paul, I am too every time.

89
00:04:07,520 --> 00:04:10,640
Speaker 4: And that's while disposable personal income growth is negative, right,

90
00:04:10,680 --> 00:04:12,880
Speaker 4: So think about what that means in saving space. I

91
00:04:12,960 --> 00:04:15,480
Speaker 4: know that people like to, especially the bulls, like to

92
00:04:15,480 --> 00:04:18,160
Speaker 4: look at this idea of cumulative excess savings, but that

93
00:04:18,560 --> 00:04:21,919
Speaker 4: as a source of additional spending power going forward. But

94
00:04:22,040 --> 00:04:25,840
Speaker 4: that is not dry powder that's sitting in banks. That

95
00:04:25,880 --> 00:04:29,360
Speaker 4: cumulative access savings, as it's calculated, is really just foregone

96
00:04:29,400 --> 00:04:32,920
Speaker 4: spending in previous months, and that money could have been

97
00:04:32,920 --> 00:04:37,440
Speaker 4: put into bitcoin or into whatever at sixty thousand dollars

98
00:04:37,960 --> 00:04:41,080
Speaker 4: and it's gone, right, And we know that it's gone

99
00:04:41,080 --> 00:04:43,200
Speaker 4: if we look at bank balances for the average person

100
00:04:43,240 --> 00:04:45,599
Speaker 4: in the bottom fifty percent of the income distribution and

101
00:04:45,640 --> 00:04:48,719
Speaker 4: adjusted for inflation, there is no excess cash balances for

102
00:04:48,760 --> 00:04:49,360
Speaker 4: those folks.

103
00:04:50,720 --> 00:04:53,720
Speaker 2: I got to ask about first about you Mish one

104
00:04:53,800 --> 00:05:00,000
Speaker 2: year out their survey just coming across the ticker, participants

105
00:05:00,000 --> 00:05:03,480
Speaker 2: expecting inflation of four point two percent. It's more than

106
00:05:03,680 --> 00:05:05,520
Speaker 2: we thought they were going to say, and more than

107
00:05:05,520 --> 00:05:06,960
Speaker 2: double what the Fed wants it to be.

108
00:05:07,279 --> 00:05:07,960
Speaker 3: Is that a concern?

109
00:05:08,560 --> 00:05:11,919
Speaker 4: So year ahead inflation expectations don't matter as much as

110
00:05:12,000 --> 00:05:13,839
Speaker 4: longer term inflation expectation.

111
00:05:13,440 --> 00:05:14,800
Speaker 2: So we should be looking at the five year or

112
00:05:14,839 --> 00:05:16,480
Speaker 2: what so we should be looking at five year It

113
00:05:16,480 --> 00:05:18,480
Speaker 2: seems like I don't even what can do tomorrow much

114
00:05:18,520 --> 00:05:19,880
Speaker 2: less a year much less five.

115
00:05:19,800 --> 00:05:23,000
Speaker 4: Yeah, because because year ahead is so responsive to gasoline prices.

116
00:05:23,240 --> 00:05:24,040
Speaker 3: That's really why.

117
00:05:24,160 --> 00:05:25,560
Speaker 4: It's like a pretty simple correlation.

118
00:05:26,000 --> 00:05:26,560
Speaker 1: So it makes sense.

119
00:05:26,720 --> 00:05:28,400
Speaker 5: Yeah, that tracts, so we do.

120
00:05:28,760 --> 00:05:32,360
Speaker 4: We do want to look at the five.

121
00:05:32,200 --> 00:05:34,560
Speaker 3: Year, five to ten year. We're looking at three percent

122
00:05:35,000 --> 00:05:35,560
Speaker 3: on the survey.

123
00:05:35,600 --> 00:05:37,920
Speaker 4: It just crossed, that's right, So that's for the median.

124
00:05:38,200 --> 00:05:40,120
Speaker 4: The thing that most people are going to overlook that

125
00:05:40,160 --> 00:05:41,839
Speaker 4: I don't want you guys to overlook, is that the

126
00:05:41,880 --> 00:05:45,800
Speaker 4: average inflation expectations five year out jumped pretty dramatically up

127
00:05:45,800 --> 00:05:48,599
Speaker 4: to four point seven percent from I think three point

128
00:05:48,640 --> 00:05:50,680
Speaker 4: two percent the prior month. Yep, right, So like that

129
00:05:50,839 --> 00:05:52,720
Speaker 4: is something notable that the FED is going to keep

130
00:05:52,720 --> 00:05:55,440
Speaker 4: an eye on. We still think that the FED is

131
00:05:55,440 --> 00:05:57,919
Speaker 4: going to remain on pause through the October thirty one

132
00:05:58,040 --> 00:05:58,919
Speaker 4: November one meeting.

133
00:05:59,839 --> 00:06:00,520
Speaker 5: There is still.

134
00:06:00,360 --> 00:06:02,240
Speaker 4: Another opportunity to hike at the end of the year.

135
00:06:03,200 --> 00:06:06,479
Speaker 4: But when you see durable's prices coming off as we

136
00:06:06,520 --> 00:06:10,040
Speaker 4: did in the most recent report, we see consumer sentiment

137
00:06:10,120 --> 00:06:14,560
Speaker 4: moderating a little bit month over month, and we see

138
00:06:14,720 --> 00:06:19,120
Speaker 4: real disposable income declining for four straight months, and households

139
00:06:19,160 --> 00:06:21,159
Speaker 4: clearly getting a little bit stretched than the FED can

140
00:06:21,279 --> 00:06:22,440
Speaker 4: be a bit patient.

141
00:06:22,560 --> 00:06:26,560
Speaker 2: I just got one last question for an economist, which

142
00:06:26,600 --> 00:06:29,720
Speaker 2: you are, and you have experience working with government economists

143
00:06:29,720 --> 00:06:31,720
Speaker 2: as well. Comments are always on the one hand, on

144
00:06:31,760 --> 00:06:33,400
Speaker 2: the other hand, right, and when you look at the

145
00:06:33,440 --> 00:06:36,279
Speaker 2: surge in yields that we've seen in these markets, on

146
00:06:36,320 --> 00:06:38,960
Speaker 2: the one hand, you could say, well, that's because of

147
00:06:39,480 --> 00:06:41,000
Speaker 2: strong growth in.

148
00:06:41,000 --> 00:06:42,080
Speaker 3: The US economy.

149
00:06:42,120 --> 00:06:43,640
Speaker 2: On the other hand, you could say it's because of

150
00:06:43,680 --> 00:06:47,160
Speaker 2: massive deficits that we have. Janet Yellen yesterday said the

151
00:06:47,200 --> 00:06:49,360
Speaker 2: surge in longer term bond yields in recent months is

152
00:06:49,360 --> 00:06:52,120
Speaker 2: a reflection of strong growth in the US economy, not

153
00:06:52,360 --> 00:06:55,719
Speaker 2: the jump in government borrowing driven by a widening fiscal deficit.

154
00:06:56,000 --> 00:06:58,119
Speaker 1: She would say that right talking her book.

155
00:06:58,480 --> 00:07:00,479
Speaker 4: Yeah, I mean, is she just talking the book her book?

156
00:07:00,520 --> 00:07:01,520
Speaker 5: Totally? Yeah, totally.

157
00:07:01,920 --> 00:07:05,800
Speaker 4: I mean, any economists would acknowledge it. Because if we

158
00:07:05,839 --> 00:07:07,440
Speaker 4: take it back to econ one oh one, we're thinking

159
00:07:07,440 --> 00:07:10,800
Speaker 4: about incentives and constraints. Right, what's the Treasury Secretary's incentive here?

160
00:07:10,840 --> 00:07:12,880
Speaker 4: It's to downplay the effect of running deficits that are

161
00:07:12,880 --> 00:07:15,520
Speaker 4: pretty massive and being on a unsustainable fiscal trajectory for

162
00:07:15,560 --> 00:07:18,120
Speaker 4: the next thirty years at least right over the entire

163
00:07:18,160 --> 00:07:20,320
Speaker 4: forecast window. You look at what the Fed thinks that

164
00:07:20,360 --> 00:07:22,000
Speaker 4: it is going to be more so a matter of

165
00:07:22,200 --> 00:07:24,640
Speaker 4: unsustainable fiscal fiscal policy.

166
00:07:25,080 --> 00:07:26,280
Speaker 3: That's what is good.

167
00:07:26,360 --> 00:07:29,040
Speaker 1: Yeah, he's good. You can get a time, dude, Stuart

168
00:07:29,040 --> 00:07:32,320
Speaker 1: Paul used US economists before Bloomberg Economics kind of breaking

169
00:07:32,360 --> 00:07:33,240
Speaker 1: it down for us.

170
00:07:33,280 --> 00:07:38,120
Speaker 6: Here you're listening to the teenth Ken's Live program Bloomberg

171
00:07:38,160 --> 00:07:41,520
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot com,

172
00:07:41,600 --> 00:07:44,760
Speaker 6: the iHeartRadio app, and the Bloomberg Business App, or listen

173
00:07:44,840 --> 00:07:47,040
Speaker 6: on demand wherever you get your podcasts.

174
00:07:48,800 --> 00:07:50,000
Speaker 3: Take a look at Xon Mobile.

175
00:07:50,000 --> 00:07:53,280
Speaker 7: The stock is down about one two point two percent

176
00:07:53,360 --> 00:07:55,280
Speaker 7: on earnings now at miss earning estments in the third

177
00:07:55,360 --> 00:07:58,760
Speaker 7: quarter did boost its dividend and a huge, huge increase

178
00:07:59,080 --> 00:08:01,240
Speaker 7: in cash flow. We want to get more details here

179
00:08:01,240 --> 00:08:04,400
Speaker 7: with Darren Woods, exce On Mobile chairman and CEO. Darren,

180
00:08:04,400 --> 00:08:06,920
Speaker 7: we really appreciate you joining us on this very busy

181
00:08:06,960 --> 00:08:09,960
Speaker 7: earnings day. I just want to start a little nerdy

182
00:08:10,440 --> 00:08:12,600
Speaker 7: and that's what the chemical side of the business, that's

183
00:08:12,720 --> 00:08:15,160
Speaker 7: really what led to some of the weakness and earnings.

184
00:08:15,560 --> 00:08:19,120
Speaker 7: Chemicals is a really wonderful indicator as to the global economy.

185
00:08:19,440 --> 00:08:22,280
Speaker 7: What should be our takeaway from that weakness for you guys.

186
00:08:22,960 --> 00:08:24,880
Speaker 8: Well, I think there's two things to look at our

187
00:08:24,960 --> 00:08:28,560
Speaker 8: chemical business. One obviously is demand and the link to GDP,

188
00:08:29,080 --> 00:08:31,440
Speaker 8: but the other is the supply. And we typically see

189
00:08:31,440 --> 00:08:35,559
Speaker 8: that commodity cycles in chemical are driven by generally growing demand,

190
00:08:35,640 --> 00:08:39,480
Speaker 8: but then peaks of supply coming on, and that's certainly

191
00:08:39,480 --> 00:08:42,040
Speaker 8: been the case that post a pandemic, a lot of

192
00:08:42,080 --> 00:08:45,440
Speaker 8: supplies come on. We haven't seen excessive growth in GDP,

193
00:08:45,600 --> 00:08:48,120
Speaker 8: and so you're seeing that pressure manifest itself in very

194
00:08:48,120 --> 00:08:51,800
Speaker 8: low margins, But that's a supply issue. Demand hasn't been

195
00:08:51,800 --> 00:08:53,960
Speaker 8: as strong as in the past, but we're still continuing

196
00:08:54,000 --> 00:08:56,360
Speaker 8: to see rising demand, just at a much lower rate

197
00:08:56,960 --> 00:09:00,200
Speaker 8: than historical. My expectation as gb begins to pick up

198
00:09:00,240 --> 00:09:02,520
Speaker 8: and China continues to kind of come out of its

199
00:09:02,960 --> 00:09:08,120
Speaker 8: post lockdown issues, that we'll see growth and chemicals pick up,

200
00:09:08,280 --> 00:09:09,640
Speaker 8: but we're still going to have to work through the

201
00:09:09,720 --> 00:09:10,640
Speaker 8: supply overhang.

202
00:09:11,120 --> 00:09:13,240
Speaker 7: Okay, So that's more of a supply issue than a

203
00:09:13,280 --> 00:09:13,880
Speaker 7: demand issue.

204
00:09:13,880 --> 00:09:14,480
Speaker 9: That's good to know.

205
00:09:15,559 --> 00:09:17,560
Speaker 7: To that point, if we just go to the broader

206
00:09:17,559 --> 00:09:19,920
Speaker 7: oil story because in some ways, let's get through earnings,

207
00:09:19,960 --> 00:09:22,560
Speaker 7: but really the story for you guys is the Pioneer

208
00:09:22,600 --> 00:09:25,319
Speaker 7: deal and the takeover there. And some of the numbers

209
00:09:25,320 --> 00:09:27,920
Speaker 7: that you guys were tossing out here are huge, like

210
00:09:28,040 --> 00:09:33,000
Speaker 7: increasing approvable reserve to one billion in the Permian. Some

211
00:09:33,120 --> 00:09:35,600
Speaker 7: analysts are worried that you can't get that far. What

212
00:09:35,640 --> 00:09:39,520
Speaker 7: are you guys going to do that gets you there?

213
00:09:38,840 --> 00:09:41,719
Speaker 8: We're going to do is what we're already demonstrated we're

214
00:09:41,720 --> 00:09:44,000
Speaker 8: capable of doing. So if you go back in time, Alex,

215
00:09:44,440 --> 00:09:46,240
Speaker 8: you know, we set out a strategy to make sure

216
00:09:46,240 --> 00:09:49,640
Speaker 8: that we're applying the full weight and force and capabilities

217
00:09:49,679 --> 00:09:53,520
Speaker 8: of our company into the unconventional space, and that's been

218
00:09:53,559 --> 00:09:57,760
Speaker 8: a concerted effort to develop technologies to improve recovery. We've

219
00:09:57,760 --> 00:09:59,960
Speaker 8: been implementing that in the acreage that we've got to

220
00:10:00,080 --> 00:10:02,280
Speaker 8: day and both the Delaware and the Midland we're seeing

221
00:10:02,360 --> 00:10:05,240
Speaker 8: very good results. We've demonstrated the ability of those technologies,

222
00:10:05,280 --> 00:10:07,679
Speaker 8: the techniques and the development processes that we have in place,

223
00:10:07,920 --> 00:10:10,520
Speaker 8: and what we're doing now is taking that proven capability

224
00:10:10,800 --> 00:10:14,280
Speaker 8: and applying it to the best acreage in the Midland.

225
00:10:14,320 --> 00:10:17,800
Speaker 8: And so Pioneer is basically in the fair way of

226
00:10:18,720 --> 00:10:21,040
Speaker 8: acreage in the Midland, and so we've got this very

227
00:10:22,640 --> 00:10:24,920
Speaker 8: good acregs that we're now going to apply these the

228
00:10:24,960 --> 00:10:27,760
Speaker 8: capabilities that we have in Xon. So that's the combination.

229
00:10:27,960 --> 00:10:31,600
Speaker 8: They are demonstrated capabilities that we have built into those

230
00:10:31,640 --> 00:10:36,760
Speaker 8: synergy numbers. It doesn't comprehend the additional technology that we're

231
00:10:36,800 --> 00:10:38,880
Speaker 8: working on today that's in the pipeline that frankly we

232
00:10:38,920 --> 00:10:41,600
Speaker 8: think has promised. So our view is, while the numbers

233
00:10:41,600 --> 00:10:44,800
Speaker 8: are big and it reflects the capabilities that we bring

234
00:10:45,080 --> 00:10:49,040
Speaker 8: from Exonomobile and Merry up with the acreage and the

235
00:10:49,080 --> 00:10:52,760
Speaker 8: capabilities that the Pioneer has, we've got additional upside coming

236
00:10:52,800 --> 00:10:53,400
Speaker 8: down the pipe.

237
00:10:53,760 --> 00:10:55,920
Speaker 5: Wow, Darren, good morning. It's guy.

238
00:10:57,760 --> 00:11:00,480
Speaker 10: To your points and you're just talking about what's happening here,

239
00:11:00,480 --> 00:11:03,360
Speaker 10: but I think it goes and speaks to beyond that

240
00:11:03,520 --> 00:11:05,640
Speaker 10: and what else you're doing. You are proving to be

241
00:11:05,800 --> 00:11:09,560
Speaker 10: very good at execution projects execution, You're demonstrating that you've

242
00:11:09,559 --> 00:11:10,760
Speaker 10: got a new refinery coming on.

243
00:11:11,160 --> 00:11:12,560
Speaker 5: You are proving to be very good at that.

244
00:11:13,160 --> 00:11:17,560
Speaker 10: Others in the energy space are not, particularly within the

245
00:11:17,600 --> 00:11:20,600
Speaker 10: renewable space, where it is proving to be very.

246
00:11:20,559 --> 00:11:21,679
Speaker 5: Difficult to execute well.

247
00:11:21,760 --> 00:11:24,520
Speaker 10: Right now, can you just talk to me about how

248
00:11:24,559 --> 00:11:27,960
Speaker 10: big an advantage that execution story is and how you

249
00:11:28,000 --> 00:11:30,400
Speaker 10: can leverage it, leverage that to do more.

250
00:11:31,520 --> 00:11:33,760
Speaker 8: No, I think you've hit on a really important point, guy,

251
00:11:33,920 --> 00:11:36,280
Speaker 8: and you're absolutely right. It is critical, particularly in a

252
00:11:36,280 --> 00:11:40,080
Speaker 8: capital intensive industry like ours, to be very good at

253
00:11:40,120 --> 00:11:44,520
Speaker 8: executing large, complicated projects. In twenty nineteen, we consolidated all

254
00:11:44,559 --> 00:11:48,600
Speaker 8: of our resources on projects into one global organization. That

255
00:11:48,760 --> 00:11:51,600
Speaker 8: organization has the sole focus of making sure that we

256
00:11:51,640 --> 00:11:56,600
Speaker 8: are developing world class, industry leading projects and then executing

257
00:11:56,640 --> 00:11:59,360
Speaker 8: them ahead of schedule and ahead of budget. And we're

258
00:11:59,360 --> 00:12:02,319
Speaker 8: demonstrating that that applies itself to our low carbon solutions

259
00:12:02,360 --> 00:12:04,880
Speaker 8: business today. And so if you look at the challenges

260
00:12:04,920 --> 00:12:07,960
Speaker 8: of going from carbon capture or biofuels at scale or

261
00:12:08,040 --> 00:12:12,120
Speaker 8: hydrogen at scale, marrying that with requirements of storing and

262
00:12:12,200 --> 00:12:16,240
Speaker 8: sequestering CO two, we are in the sweet spot of

263
00:12:16,360 --> 00:12:18,880
Speaker 8: pulling all those things together and doing it at scale,

264
00:12:18,880 --> 00:12:21,320
Speaker 8: which is going to be required to address the challenges

265
00:12:21,600 --> 00:12:23,760
Speaker 8: out there with respect to the size of the emissions

266
00:12:23,760 --> 00:12:25,960
Speaker 8: that we have to reduce. There aren't any other players

267
00:12:26,000 --> 00:12:29,000
Speaker 8: out there that have that same capability.

268
00:12:29,120 --> 00:12:30,880
Speaker 10: And that gives you a huge advantage. Now you're just

269
00:12:30,960 --> 00:12:33,800
Speaker 10: one the pioneer deal Alex was talking about that does

270
00:12:33,840 --> 00:12:36,880
Speaker 10: that execution ability though, now give you the opportunity to

271
00:12:36,920 --> 00:12:39,600
Speaker 10: look at what's happening in the renewables space where there

272
00:12:39,679 --> 00:12:43,560
Speaker 10: is a tough time emerging and start to cherry pick

273
00:12:43,559 --> 00:12:46,479
Speaker 10: assets there as well, and use your ability to execute

274
00:12:46,800 --> 00:12:48,160
Speaker 10: to turn those assets around.

275
00:12:49,200 --> 00:12:50,840
Speaker 8: I would tell you we're going to leverage not just

276
00:12:50,840 --> 00:12:54,079
Speaker 8: our project capability, but our technology capability. And the way

277
00:12:54,120 --> 00:12:57,960
Speaker 8: I've characterized it, we're a molecule company, not an electron company,

278
00:12:57,960 --> 00:13:00,640
Speaker 8: and so we bring more value in the space required

279
00:13:00,679 --> 00:13:05,120
Speaker 8: to manage and transform molecules hydrogen and carbon molecules that

280
00:13:05,160 --> 00:13:07,959
Speaker 8: applies to CO two, and so what we're going to

281
00:13:08,080 --> 00:13:11,640
Speaker 8: apply our capabilities too is the molecule side of the equation,

282
00:13:11,679 --> 00:13:16,240
Speaker 8: which is carbon capturing, storage, hydrogen biofils, capturing the emissions

283
00:13:16,280 --> 00:13:21,440
Speaker 8: associated with existing harder to carbonized industries that don't have

284
00:13:21,520 --> 00:13:24,440
Speaker 8: any real practical alternatives, and applying that So we see

285
00:13:24,480 --> 00:13:27,959
Speaker 8: huge opportunities there. In fact, our low carbon solutions businesses

286
00:13:28,400 --> 00:13:31,880
Speaker 8: is turning those opportunities into high return projects today.

287
00:13:32,360 --> 00:13:33,600
Speaker 7: But I know and I know that Dan Emin has

288
00:13:33,600 --> 00:13:35,240
Speaker 7: talked about the fact that he won't do it unless

289
00:13:35,240 --> 00:13:38,400
Speaker 7: he gets those high returns up for low carbon solutions. Darren,

290
00:13:38,520 --> 00:13:41,880
Speaker 7: would that include buying a refiner, buying more refinering asset

291
00:13:42,040 --> 00:13:44,120
Speaker 7: or refining assets, Like if you've got to move the stuff,

292
00:13:44,120 --> 00:13:45,880
Speaker 7: if you've got to move the molecules and make different

293
00:13:45,880 --> 00:13:47,960
Speaker 7: things out of it, you need different refining capacity.

294
00:13:49,160 --> 00:13:51,760
Speaker 8: So you know, when we look at our refining circuit,

295
00:13:51,800 --> 00:13:55,280
Speaker 8: we're looking for but I'd say is a diversified set

296
00:13:55,280 --> 00:13:58,000
Speaker 8: of capabilities and advantages. So if you look at what

297
00:13:58,040 --> 00:14:00,320
Speaker 8: we've been doing and refine, we've been concentrated dating our

298
00:14:00,320 --> 00:14:04,360
Speaker 8: refinery footprint and focusing on the strategic refineries that are

299
00:14:04,400 --> 00:14:07,760
Speaker 8: producing high value products in the lubricant space, the chemical space,

300
00:14:08,080 --> 00:14:11,520
Speaker 8: the fuel space, the traditional fuel space, but also the

301
00:14:11,559 --> 00:14:14,560
Speaker 8: opportunity to use our technology to then bring in biofuels

302
00:14:14,559 --> 00:14:18,320
Speaker 8: in biofeeds to make lower emissions fuels. So we feel

303
00:14:18,360 --> 00:14:20,360
Speaker 8: really good about the front print we have today. You

304
00:14:20,400 --> 00:14:22,320
Speaker 8: can't just go out and buy that from a refinery.

305
00:14:22,360 --> 00:14:26,440
Speaker 8: It really comes from years of integrated approach to investing

306
00:14:26,480 --> 00:14:29,359
Speaker 8: in making sure you've got a refinery that is producing

307
00:14:29,600 --> 00:14:33,320
Speaker 8: a portfolio products that meets society needs, Darren.

308
00:14:33,360 --> 00:14:35,280
Speaker 10: None of this happens at a vacuum. You must be

309
00:14:35,320 --> 00:14:37,480
Speaker 10: watching very carefully what is happening in the Middle East.

310
00:14:37,480 --> 00:14:38,320
Speaker 5: I assume you are.

311
00:14:39,440 --> 00:14:41,440
Speaker 10: Is there to what extent do you think there is

312
00:14:41,480 --> 00:14:43,880
Speaker 10: the possibility of a repeat of the nineteen seventies another

313
00:14:43,920 --> 00:14:46,600
Speaker 10: oil shotcoming or do you think the supply base is

314
00:14:46,640 --> 00:14:49,600
Speaker 10: now diversified enough to avoid that? And I'm also hearing

315
00:14:49,640 --> 00:14:54,720
Speaker 10: conversations regarding the possibility of a supercycle re emerging. Do

316
00:14:54,760 --> 00:14:57,360
Speaker 10: you see any eventuality that could lead to that at

317
00:14:57,360 --> 00:15:00,680
Speaker 10: this point? How would you address these two issues?

318
00:15:00,920 --> 00:15:04,000
Speaker 8: Well, I would start with the ladder And again, the

319
00:15:04,040 --> 00:15:07,359
Speaker 8: industry is still recovering from the impact of the pandemic,

320
00:15:07,520 --> 00:15:10,680
Speaker 8: and the lower levels of capital have been going in

321
00:15:10,720 --> 00:15:14,680
Speaker 8: across the industry to offset the depletion that's been happening,

322
00:15:14,680 --> 00:15:17,680
Speaker 8: and so supplies a fairly tight. So the big issue is,

323
00:15:17,680 --> 00:15:21,360
Speaker 8: you know where's demand at. If you see real growth

324
00:15:21,520 --> 00:15:23,960
Speaker 8: and growth in demand, then that's going to challenge the

325
00:15:24,000 --> 00:15:26,160
Speaker 8: supply base that we have, which will put more pressure

326
00:15:26,160 --> 00:15:28,480
Speaker 8: on prices and margins. So I think it's really a

327
00:15:28,520 --> 00:15:30,760
Speaker 8: function of where does the global economies go in the

328
00:15:30,840 --> 00:15:33,200
Speaker 8: years ahead, because for the next couple of years. It's

329
00:15:33,200 --> 00:15:35,600
Speaker 8: going to it's going to take time to get additional

330
00:15:35,640 --> 00:15:37,080
Speaker 8: capacity coming on.

331
00:15:37,440 --> 00:15:38,200
Speaker 11: With respect to.

332
00:15:38,160 --> 00:15:40,760
Speaker 5: The Middle East, yeah, no, go ahead. Finished.

333
00:15:40,960 --> 00:15:43,200
Speaker 8: With respect to the Middle East, what I'd say it

334
00:15:43,280 --> 00:15:46,520
Speaker 8: is still an important region in the world. And while

335
00:15:46,600 --> 00:15:51,200
Speaker 8: to date the tragic events are not manifesting themselves in

336
00:15:51,240 --> 00:15:53,400
Speaker 8: an impact, you know, that's something we're keeping a very

337
00:15:53,400 --> 00:15:54,200
Speaker 8: close eye.

338
00:15:53,960 --> 00:15:55,000
Speaker 5: On, Darren.

339
00:15:55,160 --> 00:15:58,920
Speaker 7: Do you see the global economy entering a recession soft landing?

340
00:15:58,960 --> 00:16:00,000
Speaker 5: Do you see any of that on the.

341
00:16:01,680 --> 00:16:04,000
Speaker 8: I think if you step back and look the US,

342
00:16:04,040 --> 00:16:06,320
Speaker 8: I think is in reasonably good shape. I think China

343
00:16:06,400 --> 00:16:09,680
Speaker 8: continues a very slow emergence from some of the challenges

344
00:16:09,680 --> 00:16:12,200
Speaker 8: had in the past. I think Europe is probably the

345
00:16:12,240 --> 00:16:14,680
Speaker 8: most challenge reason as I look around the world, and

346
00:16:15,120 --> 00:16:18,360
Speaker 8: obviously they've been disadvantaged with the lack of energy security

347
00:16:18,400 --> 00:16:20,120
Speaker 8: and some of the challenges they've had with the loss

348
00:16:20,160 --> 00:16:23,680
Speaker 8: of affordable and natural gas, and so I think that's

349
00:16:23,720 --> 00:16:26,480
Speaker 8: going to continue to weigh on the European economies.

350
00:16:26,560 --> 00:16:27,040
Speaker 6: And then I.

351
00:16:27,000 --> 00:16:30,400
Speaker 8: Think feel relatively comfortable with what we're seeing in the

352
00:16:30,440 --> 00:16:32,800
Speaker 8: other parts of the world, and we'll see we build

353
00:16:32,800 --> 00:16:37,120
Speaker 8: the business to handle any economic situation. We certainly go

354
00:16:37,160 --> 00:16:39,040
Speaker 8: through these cycles, and so we make sure that we're

355
00:16:39,120 --> 00:16:40,320
Speaker 8: robust to the down cycle.

356
00:16:41,040 --> 00:16:41,720
Speaker 5: Darren, you kind of.

357
00:16:41,720 --> 00:16:43,720
Speaker 7: Let me perfectly there because I wanted to ask about

358
00:16:44,080 --> 00:16:47,200
Speaker 7: LNG in particular. Guyana, you have a new partner there

359
00:16:47,280 --> 00:16:50,120
Speaker 7: and at Chevron, you guys are not unlike working with

360
00:16:50,160 --> 00:16:52,360
Speaker 7: each other. You guys do this all the time. Have

361
00:16:52,440 --> 00:16:55,440
Speaker 7: you talked to Mike recently? What kind of development can

362
00:16:55,480 --> 00:16:58,120
Speaker 7: you guys come together and really drive technology to get

363
00:16:58,160 --> 00:16:59,640
Speaker 7: more stuff out of the ground there.

364
00:17:00,560 --> 00:17:02,440
Speaker 8: Well, I think if you look at what we've been doing, Guyana,

365
00:17:02,480 --> 00:17:04,280
Speaker 8: we've got a really good track record there. You know,

366
00:17:04,320 --> 00:17:07,520
Speaker 8: we're the operator there, We run the projects, we're developing

367
00:17:07,560 --> 00:17:10,320
Speaker 8: those projects. We've demonstrated over the last several years the

368
00:17:10,359 --> 00:17:15,359
Speaker 8: ability to bring in these large, complicated projects at world

369
00:17:15,840 --> 00:17:19,359
Speaker 8: class schedules, world class costs. We're beating our budgets, we're

370
00:17:19,400 --> 00:17:21,679
Speaker 8: beating our schedules, and then once we get them online,

371
00:17:21,680 --> 00:17:24,160
Speaker 8: we're running them at levels higher than what the investment

372
00:17:24,200 --> 00:17:28,320
Speaker 8: basis was. So a very successful development process. We've got

373
00:17:28,359 --> 00:17:31,520
Speaker 8: three votes, the third vote coming on here in November,

374
00:17:31,560 --> 00:17:33,840
Speaker 8: and three more in the pipeline, so I think we've

375
00:17:33,840 --> 00:17:37,720
Speaker 8: got a pretty good suite of technologies and capital projects

376
00:17:37,720 --> 00:17:41,080
Speaker 8: that our organization is developing. We've worked with HESSE in

377
00:17:41,119 --> 00:17:43,520
Speaker 8: the past. Of course, we work with Chevron all around

378
00:17:43,520 --> 00:17:47,480
Speaker 8: the world. I see them their participation basically basically coming

379
00:17:47,560 --> 00:17:50,159
Speaker 8: in and supporting the work that we've already demonstrated our

380
00:17:50,200 --> 00:17:51,320
Speaker 8: ability to deliver on.

381
00:17:51,800 --> 00:17:53,720
Speaker 10: Don This is an industry that feels like it's back

382
00:17:53,720 --> 00:17:56,720
Speaker 10: on the front foots that you are optimistic that you

383
00:17:56,720 --> 00:17:58,160
Speaker 10: can see deals getting done.

384
00:17:58,200 --> 00:17:59,360
Speaker 5: The industry is doing deals.

385
00:17:59,359 --> 00:18:01,320
Speaker 10: We see two manive ones over the last few days,

386
00:18:01,320 --> 00:18:05,960
Speaker 10: yours obviously included within that age. Do you think that's true?

387
00:18:06,480 --> 00:18:08,760
Speaker 10: Which then takes me to a kind of bigger picture story.

388
00:18:09,160 --> 00:18:11,680
Speaker 10: This industry has been pushed back hard over the last

389
00:18:11,680 --> 00:18:13,760
Speaker 10: ten years, let's call it by the ESG movement.

390
00:18:14,040 --> 00:18:17,160
Speaker 5: Do you think that ESG movement is now over?

391
00:18:19,119 --> 00:18:19,560
Speaker 6: I hope not.

392
00:18:19,680 --> 00:18:21,160
Speaker 3: I don't think you know ESG.

393
00:18:21,280 --> 00:18:24,440
Speaker 8: From our standpoint, this is not an either or proposition.

394
00:18:24,560 --> 00:18:26,960
Speaker 8: This is an and equation where you've got to do both.

395
00:18:27,000 --> 00:18:29,960
Speaker 8: You've got to develop the resources and the energy supplies

396
00:18:29,960 --> 00:18:32,480
Speaker 8: that the world quickly needs to support economic growth and

397
00:18:32,720 --> 00:18:34,639
Speaker 8: support people standards of living. And we've got to do

398
00:18:34,680 --> 00:18:37,280
Speaker 8: things to reduce the emissions we're working on both of

399
00:18:37,280 --> 00:18:39,879
Speaker 8: those things, and so I don't see those competing against

400
00:18:39,920 --> 00:18:43,199
Speaker 8: one another. In fact, to my point before, we're working

401
00:18:43,280 --> 00:18:46,480
Speaker 8: on a set of solutions that are complementary and leverage

402
00:18:46,520 --> 00:18:50,080
Speaker 8: the same skills and capacity. So we've always leaned into

403
00:18:50,119 --> 00:18:54,200
Speaker 8: the need to produce low cost, low emissions energy sources

404
00:18:54,560 --> 00:18:57,280
Speaker 8: and do that in our traditional businesses. We have continued

405
00:18:57,320 --> 00:18:59,520
Speaker 8: to invest in that space, and we're continuing to work

406
00:18:59,560 --> 00:19:02,439
Speaker 8: opportunity needs to grow value in that space. At the

407
00:19:02,480 --> 00:19:06,440
Speaker 8: same time, we're leaning into the energy transition and using

408
00:19:06,440 --> 00:19:09,480
Speaker 8: those capabilities to help not only reduce emissions in our

409
00:19:09,520 --> 00:19:12,879
Speaker 8: own operations, but we're helping third parties, particularly harder to

410
00:19:12,920 --> 00:19:17,480
Speaker 8: carbonize industries, lower their emissions. We've got three large world

411
00:19:17,560 --> 00:19:24,399
Speaker 8: scale contracts with fertilizer manufacturer, and industrial gas manufacturer and

412
00:19:24,400 --> 00:19:28,359
Speaker 8: steel manufacturer to capture their emissions. Those three contracts in

413
00:19:28,400 --> 00:19:31,760
Speaker 8: themselves is the equivalent of putting two million electric vehicles

414
00:19:31,760 --> 00:19:33,720
Speaker 8: on the road. That's a number of electric vehicles that

415
00:19:33,760 --> 00:19:35,600
Speaker 8: are currently on the road in the US. So think

416
00:19:35,600 --> 00:19:38,880
Speaker 8: about that. Free deals with carbon capturing and storage equate

417
00:19:38,920 --> 00:19:41,960
Speaker 8: to the same level of electric vehicles that are currently

418
00:19:42,000 --> 00:19:42,640
Speaker 8: on the market.

419
00:19:42,920 --> 00:19:44,200
Speaker 5: Hey, Darren, we know you've got to run.

420
00:19:44,280 --> 00:19:46,119
Speaker 7: Thank you so much. We really appreciate you taking the

421
00:19:46,160 --> 00:19:47,720
Speaker 7: time with us today. It was great to get through that.

422
00:19:47,720 --> 00:19:49,520
Speaker 7: Next time we're going to talk about four mile laterals

423
00:19:49,520 --> 00:19:53,320
Speaker 7: and new technology Darren Wood's excell On Mobile chairman and CEO.

424
00:19:54,560 --> 00:19:57,200
Speaker 1: All right, that was Bloomberg's Alex Steel and Guy Johnson

425
00:19:57,520 --> 00:20:02,920
Speaker 1: interviewing Excellent Chairman CEO Darren Woods. There the company reported

426
00:20:02,960 --> 00:20:05,520
Speaker 1: some numbers last night, as did Chevrons. Hear some of

427
00:20:05,560 --> 00:20:07,480
Speaker 1: the big energy companies still with us here in our

428
00:20:07,480 --> 00:20:10,040
Speaker 1: Bloomberg and aactor broker studios Fernando Valley, he covers all

429
00:20:10,040 --> 00:20:13,200
Speaker 1: the energy space for Bloomberg Intelligence. So Fernanda, just stepping back,

430
00:20:13,240 --> 00:20:15,359
Speaker 1: I was listening to what the mister Woods was saying.

431
00:20:15,640 --> 00:20:18,520
Speaker 1: What's kind of the investment call out in the street

432
00:20:18,760 --> 00:20:19,760
Speaker 1: for Exon today?

433
00:20:20,040 --> 00:20:22,080
Speaker 12: Well, I think there are two points. First, as Guy

434
00:20:22,160 --> 00:20:24,240
Speaker 12: was trying to ask if they're ever going to do

435
00:20:24,320 --> 00:20:26,800
Speaker 12: renewable power, they're not. I mean, I think that was

436
00:20:26,840 --> 00:20:29,679
Speaker 12: pretty clear. He's going to continue investing in oil and

437
00:20:29,720 --> 00:20:32,560
Speaker 12: he sees an opportunity to seize market share from other

438
00:20:32,600 --> 00:20:36,320
Speaker 12: players have stepped back, namely the European players, and he's

439
00:20:36,359 --> 00:20:39,320
Speaker 12: done that by buying probably the premiere asset in the

440
00:20:39,359 --> 00:20:42,240
Speaker 12: world and pioneer and then going down and deploying some

441
00:20:42,280 --> 00:20:45,080
Speaker 12: of his technologies, there's still some questions in my mind

442
00:20:45,119 --> 00:20:47,840
Speaker 12: as to whether those technologies will actually have the impact,

443
00:20:47,920 --> 00:20:51,840
Speaker 12: he says, but there's no question that he bought the

444
00:20:51,880 --> 00:20:55,479
Speaker 12: best asset available. I think as long as we believe

445
00:20:55,600 --> 00:20:59,080
Speaker 12: that oil will have twenty to thirty years, he's done

446
00:20:59,400 --> 00:21:03,080
Speaker 12: a tremendous job in retooling excellent portfolio. All of their

447
00:21:03,320 --> 00:21:07,080
Speaker 12: main assets now have been acquired since he became CEO,

448
00:21:07,520 --> 00:21:10,360
Speaker 12: and as he said, Guiana is the next best one

449
00:21:10,600 --> 00:21:14,400
Speaker 12: and it's a tremendous asset. As you saw with Chevron,

450
00:21:14,480 --> 00:21:15,840
Speaker 12: buying has just to get into that.

451
00:21:16,200 --> 00:21:20,159
Speaker 2: So just quick question on that, as long as we

452
00:21:20,200 --> 00:21:23,320
Speaker 2: believe oil will have twenty or thirty years, are there

453
00:21:23,359 --> 00:21:25,840
Speaker 2: people who think we won't use oil in thirty years

454
00:21:26,119 --> 00:21:27,040
Speaker 2: or fifty years.

455
00:21:27,160 --> 00:21:30,199
Speaker 12: Well, I'm glad you asked, not that we won't use it,

456
00:21:30,280 --> 00:21:33,639
Speaker 12: but that will peak in by twenty thirty. The International

457
00:21:33,720 --> 00:21:37,440
Speaker 12: Energy Agency just put out their Oil outlook saying as

458
00:21:37,560 --> 00:21:39,200
Speaker 12: much this week.

459
00:21:39,040 --> 00:21:43,119
Speaker 2: That will peak that what will the peak oil in

460
00:21:43,200 --> 00:21:44,560
Speaker 2: terms of pulling it out of the ground.

461
00:21:44,320 --> 00:21:45,480
Speaker 3: Will be twenty thirty.

462
00:21:45,320 --> 00:21:48,560
Speaker 12: Demand demand used will be twenty thirty.

463
00:21:48,840 --> 00:21:50,200
Speaker 1: Does the industry believe that.

464
00:21:50,680 --> 00:21:53,880
Speaker 12: Well, certainly doesn't seem like Darren or Mike Worth from

465
00:21:53,960 --> 00:21:56,480
Speaker 12: Chevron believes that, otherwise they wouldn't have bought twenty five

466
00:21:56,480 --> 00:21:57,800
Speaker 12: plus year assets on.

467
00:21:57,800 --> 00:22:01,560
Speaker 2: That right, I think Fativi Roll tends to exaggerate in

468
00:22:01,680 --> 00:22:05,199
Speaker 2: that direction, right. I mean he also, well, whatever we

469
00:22:05,240 --> 00:22:05,480
Speaker 2: can be.

470
00:22:05,560 --> 00:22:08,119
Speaker 1: But if we if we go talk to BP or

471
00:22:08,160 --> 00:22:10,159
Speaker 1: Total or any of the European ones, we're going to

472
00:22:10,200 --> 00:22:14,000
Speaker 1: get a different story than we heard from Chevron or Excellent.

473
00:22:14,320 --> 00:22:18,160
Speaker 12: Not so much from Total Total. Patrick has been very

474
00:22:18,160 --> 00:22:21,720
Speaker 12: open and he thinks, similar to to to what Darren

475
00:22:21,720 --> 00:22:24,120
Speaker 12: Woods said, it's an all of the above. I think

476
00:22:24,160 --> 00:22:26,520
Speaker 12: when you look at just energy to me man and

477
00:22:26,520 --> 00:22:30,520
Speaker 12: how much emergent markets still don't consume, it's the more

478
00:22:30,640 --> 00:22:32,679
Speaker 12: energy you offer them ore you will be consumed. So

479
00:22:32,760 --> 00:22:35,720
Speaker 12: it's an all of the above, not just if and

480
00:22:36,359 --> 00:22:37,040
Speaker 12: sort of solution.

481
00:22:37,840 --> 00:22:41,680
Speaker 1: Interesting. I don't know. I think it's we've heard peak

482
00:22:41,720 --> 00:22:42,960
Speaker 1: oil so many times before.

483
00:22:43,040 --> 00:22:43,320
Speaker 5: Dude.

484
00:22:43,359 --> 00:22:45,800
Speaker 2: I started hearing peak oil when I was a little kid,

485
00:22:46,600 --> 00:22:47,719
Speaker 2: and I'm almost fifty.

486
00:22:47,840 --> 00:22:48,879
Speaker 1: But that's because I grew up.

487
00:22:48,920 --> 00:22:52,600
Speaker 2: I grew up with Charlie Maxwell, and he was the

488
00:22:52,680 --> 00:22:55,320
Speaker 2: first person to really call peak oil and he was

489
00:22:55,600 --> 00:22:57,640
Speaker 2: very wrong, you know, and certainly in terms of time.

490
00:22:57,800 --> 00:22:59,720
Speaker 12: As long as Matt's driving, we won't hit Piggy.

491
00:22:59,760 --> 00:23:03,000
Speaker 1: Yeah, that's a great point there driving the Dodge Challenger,

492
00:23:03,080 --> 00:23:07,200
Speaker 1: scappack whatever that thing is that burns fuel like you

493
00:23:07,240 --> 00:23:09,240
Speaker 1: wouldn't believe, but it sounds good and it looks good.

494
00:23:09,280 --> 00:23:11,720
Speaker 1: Fernanda Valley, thanks so much for joining us senior analysts

495
00:23:11,760 --> 00:23:14,960
Speaker 1: covering the global energy space for Bloomberg Intelligence.

496
00:23:15,400 --> 00:23:19,040
Speaker 6: You're listening to the tape Kensur Live program Bloomberg Markets

497
00:23:19,080 --> 00:23:22,480
Speaker 6: weekdays at ten am Eastern on Bloomberg Radio, the tune

498
00:23:22,520 --> 00:23:25,480
Speaker 6: in app, Bloomberg dot Com, and the Bloomberg Business app.

499
00:23:25,520 --> 00:23:28,320
Speaker 6: You can also listen live on Amazon Alexa from our

500
00:23:28,359 --> 00:23:33,400
Speaker 6: flagship New York station. Just say Alexa play Bloomberg eleven thirty.

501
00:23:34,600 --> 00:23:37,000
Speaker 1: Obviously, we are right smack in the middle of earnings,

502
00:23:37,000 --> 00:23:39,000
Speaker 1: and we have some good numbers out of Amazon offsetting

503
00:23:39,040 --> 00:23:41,160
Speaker 1: some of the perhaps a week with then expected numbers

504
00:23:41,200 --> 00:23:43,640
Speaker 1: we got from some of the other tech names earlier

505
00:23:43,680 --> 00:23:47,040
Speaker 1: this week. So lots of crosswinds for this market to digest.

506
00:23:47,040 --> 00:23:49,000
Speaker 1: That's why we check in with some pros who do

507
00:23:49,040 --> 00:23:51,080
Speaker 1: this for a living. Nadia Leavell joins us. She's a

508
00:23:51,160 --> 00:23:55,400
Speaker 1: senior US equity strategist within the global wealth management business

509
00:23:55,480 --> 00:23:58,680
Speaker 1: at UBS. So Nadia, again, I was just kind of

510
00:23:58,680 --> 00:24:01,159
Speaker 1: suggesting a lot of crosswinds. Seems like there always is

511
00:24:01,760 --> 00:24:03,800
Speaker 1: for investors to kind of navigate here. You put it

512
00:24:03,840 --> 00:24:05,520
Speaker 1: all together, you look at kind of what we're hearing

513
00:24:05,520 --> 00:24:07,720
Speaker 1: from Corporate America and the earnings as well as the

514
00:24:07,760 --> 00:24:11,000
Speaker 1: economic data as well as a geopolitical data. What do

515
00:24:11,040 --> 00:24:12,879
Speaker 1: you what's kind of the message you're going out to

516
00:24:13,400 --> 00:24:15,040
Speaker 1: for the UBS clients.

517
00:24:16,359 --> 00:24:18,919
Speaker 13: You know, our messages that we still remain constructive on

518
00:24:18,960 --> 00:24:21,520
Speaker 13: the market. I mean, we had expected earnest to sort

519
00:24:21,560 --> 00:24:25,960
Speaker 13: of be the stabilizer in the face of higher bond yields.

520
00:24:26,080 --> 00:24:28,639
Speaker 13: And it's been a tough earning season so far, not

521
00:24:28,760 --> 00:24:33,159
Speaker 13: because companies are missing expectations, they are actually being in expectations,

522
00:24:33,200 --> 00:24:36,320
Speaker 13: but the stock market response has been more mutant and

523
00:24:36,440 --> 00:24:40,680
Speaker 13: even negative, and those that have had the weaker outlook

524
00:24:40,840 --> 00:24:44,639
Speaker 13: on guidance have actually been punished in this market environment.

525
00:24:44,680 --> 00:24:46,879
Speaker 13: And so what that is telling us is that the

526
00:24:46,960 --> 00:24:49,800
Speaker 13: bar is high, and of course those higher bondials are

527
00:24:49,840 --> 00:24:54,199
Speaker 13: also challenging a relative attractiveness of the equity market. But

528
00:24:54,280 --> 00:24:56,840
Speaker 13: we do think that the market is hitting some key

529
00:24:56,880 --> 00:24:57,760
Speaker 13: technical levels.

530
00:24:57,800 --> 00:24:59,520
Speaker 9: You now seeing the S and P five.

531
00:24:59,440 --> 00:25:02,040
Speaker 13: Hundred trade onto that two hundred day and moving average

532
00:25:02,040 --> 00:25:05,240
Speaker 13: and flirting with correction territory. So we think when we

533
00:25:05,280 --> 00:25:07,640
Speaker 13: get into the back half of the earnest season that

534
00:25:07,960 --> 00:25:11,200
Speaker 13: hopefully that would act like a stabilizer and companies will

535
00:25:11,240 --> 00:25:13,679
Speaker 13: continue to be We do think that the outlook for

536
00:25:13,720 --> 00:25:16,160
Speaker 13: earnest hasn't improved just given the strength of the economy,

537
00:25:16,320 --> 00:25:19,160
Speaker 13: and so essentially we are buyers on this weakness.

538
00:25:19,720 --> 00:25:22,280
Speaker 1: Nice. So I mean, as we think about these markets here,

539
00:25:22,359 --> 00:25:24,359
Speaker 1: I mean, I guess, are you at the point where

540
00:25:24,400 --> 00:25:27,359
Speaker 1: you think we're at peak rates here and that the

541
00:25:27,400 --> 00:25:30,040
Speaker 1: next move, whenever it does come, will be lower, or

542
00:25:30,520 --> 00:25:33,040
Speaker 1: you still have some Federal reserve risk in your outlook?

543
00:25:35,040 --> 00:25:37,479
Speaker 13: You know, next week we'll see what the Fed messaging is.

544
00:25:37,560 --> 00:25:40,560
Speaker 13: We do think that the Fed is done hike it.

545
00:25:40,560 --> 00:25:43,240
Speaker 13: I mean, I think it's widely expected at this point

546
00:25:43,280 --> 00:25:46,000
Speaker 13: that the Federal will remain on whole next week. We

547
00:25:46,040 --> 00:25:48,480
Speaker 13: did hear some of that being echoed by several of

548
00:25:48,560 --> 00:25:52,120
Speaker 13: US SAYS speakers ahead of the blackout beard. Some might

549
00:25:52,160 --> 00:25:54,280
Speaker 13: say that November is a skip, but we think that

550
00:25:54,359 --> 00:25:57,360
Speaker 13: the hike and cycle ended back in July. I mean,

551
00:25:57,640 --> 00:26:00,600
Speaker 13: we all know the financial conditions are tight in quite

552
00:26:00,600 --> 00:26:03,520
Speaker 13: a bit, and the long uncurd have moved up and

553
00:26:03,560 --> 00:26:06,040
Speaker 13: it's doing exactly what the FED had hoped to do.

554
00:26:06,480 --> 00:26:10,240
Speaker 13: So that transition mechanism of title monetary policies happened, and

555
00:26:10,280 --> 00:26:12,600
Speaker 13: as we heard German policy last week, they could be

556
00:26:12,640 --> 00:26:14,760
Speaker 13: even more in a pipeline just given the fact that

557
00:26:14,760 --> 00:26:15,240
Speaker 13: the FED.

558
00:26:15,080 --> 00:26:18,160
Speaker 9: Has raised interest rate so quickly over the last year.

559
00:26:18,280 --> 00:26:20,919
Speaker 13: So we think that the hiking cycle is done in

560
00:26:21,000 --> 00:26:22,680
Speaker 13: terms of the outlook for sort of.

561
00:26:22,600 --> 00:26:24,960
Speaker 9: The ten year treasury note.

562
00:26:24,960 --> 00:26:28,760
Speaker 13: And yeel on that reality is market polity remains so high,

563
00:26:28,880 --> 00:26:30,720
Speaker 13: so it's difficult to know if we've seen a peak

564
00:26:30,760 --> 00:26:32,760
Speaker 13: on the long end of the curve. We could see

565
00:26:32,760 --> 00:26:35,320
Speaker 13: it tests five percent again. But we do think that

566
00:26:35,520 --> 00:26:37,439
Speaker 13: once a FED is done hiking, and that's clear and

567
00:26:37,480 --> 00:26:40,520
Speaker 13: economic growth slows, we expected the tenure to come back

568
00:26:40,560 --> 00:26:42,160
Speaker 13: to words three and a half percent by the time

569
00:26:42,200 --> 00:26:43,240
Speaker 13: we get to mid next year.

570
00:26:44,040 --> 00:26:48,080
Speaker 2: Wow, So you think, I guess investors, certainly domestic investors

571
00:26:48,080 --> 00:26:51,320
Speaker 2: are buying these bonds, but it doesn't look like there's

572
00:26:51,359 --> 00:26:54,720
Speaker 2: any demand internationally even at five percent.

573
00:26:54,840 --> 00:26:56,520
Speaker 3: What pushes us back down?

574
00:26:56,600 --> 00:27:00,760
Speaker 2: Do we get our deficits and debt under control as

575
00:27:01,000 --> 00:27:04,159
Speaker 2: a as a country, or just the slow down in

576
00:27:04,200 --> 00:27:06,439
Speaker 2: the economy.

577
00:27:06,480 --> 00:27:09,919
Speaker 13: It's more the slow down of the economy. We do

578
00:27:10,040 --> 00:27:12,120
Speaker 13: know that there's a bit of a term permium that's

579
00:27:12,160 --> 00:27:14,119
Speaker 13: being built in on along end of the curve, just

580
00:27:14,160 --> 00:27:17,440
Speaker 13: given the concerns around the deficits. So what we really

581
00:27:17,480 --> 00:27:19,800
Speaker 13: think is going to drive bonios lower is going to

582
00:27:19,840 --> 00:27:22,480
Speaker 13: be a slower economy inflation of baiting. I mean you

583
00:27:22,680 --> 00:27:27,240
Speaker 13: saw today in terms of PC, yes, headlined to surprise

584
00:27:27,280 --> 00:27:29,640
Speaker 13: a little bit to the upside, but more importantly, core

585
00:27:29,760 --> 00:27:33,320
Speaker 13: PCE continues to moderate. I mean you have here over

586
00:27:33,400 --> 00:27:36,080
Speaker 13: here cor PC at three point seven percent. That's right

587
00:27:36,119 --> 00:27:38,880
Speaker 13: in line where the Fed had expected it to be

588
00:27:39,040 --> 00:27:42,000
Speaker 13: at the end of the year. And so we're ahead

589
00:27:42,000 --> 00:27:43,800
Speaker 13: of trend, and we think that that corp pc is

590
00:27:43,840 --> 00:27:46,000
Speaker 13: going to come down even by another twenty five basis

591
00:27:46,000 --> 00:27:47,760
Speaker 13: point by the time we get to the end of

592
00:27:47,800 --> 00:27:49,600
Speaker 13: the year. And so that's partly why we think the

593
00:27:49,640 --> 00:27:52,040
Speaker 13: Fed is done hiking, and that should help to sort

594
00:27:52,080 --> 00:27:54,440
Speaker 13: of stabilize bondials and push them low, and we are

595
00:27:54,520 --> 00:27:57,360
Speaker 13: looking for a period of subtrain economic growth. We don't

596
00:27:57,359 --> 00:27:59,480
Speaker 13: think that the momentum that we see in the third

597
00:27:59,560 --> 00:28:01,919
Speaker 13: quarter is going to continue at the same pace, and

598
00:28:02,040 --> 00:28:04,359
Speaker 13: so we think that GDP would come in one undid

599
00:28:04,359 --> 00:28:06,040
Speaker 13: two percent by the time we get to the year

600
00:28:06,200 --> 00:28:08,160
Speaker 13: end and into next year, and that's will help bring

601
00:28:08,240 --> 00:28:09,000
Speaker 13: down bond yields.

602
00:28:10,160 --> 00:28:12,359
Speaker 1: Blue Button, thank you very much. Today's a big energy

603
00:28:12,440 --> 00:28:15,840
Speaker 1: day for investors NA day. We had Chevron and x

604
00:28:15,960 --> 00:28:19,120
Speaker 1: On Mobile report their numbers. We heard at Bloomberg Television.

605
00:28:19,160 --> 00:28:23,160
Speaker 1: We just heard from the ex chairman and CEO, Darren Woods.

606
00:28:23,400 --> 00:28:26,880
Speaker 1: What's your call at ubs for energy? Still some room

607
00:28:26,920 --> 00:28:28,680
Speaker 1: to go there for energy investing.

608
00:28:29,720 --> 00:28:30,160
Speaker 9: We think.

609
00:28:30,200 --> 00:28:32,560
Speaker 13: So we do like it on this pullback, and it

610
00:28:32,560 --> 00:28:34,320
Speaker 13: has a lot to do with our core view and

611
00:28:34,359 --> 00:28:36,280
Speaker 13: the outlook for well, let me we all know that

612
00:28:36,720 --> 00:28:39,959
Speaker 13: global inventories continue to see jar down and there are

613
00:28:40,040 --> 00:28:43,479
Speaker 13: multi year low just given the continuous stands by open

614
00:28:43,560 --> 00:28:45,959
Speaker 13: plus the constraints supply, and we think that that's going

615
00:28:46,040 --> 00:28:49,800
Speaker 13: to continue into next year. And demand remains quite robust,

616
00:28:49,800 --> 00:28:52,600
Speaker 13: and of course you know we have the ongoing conflict

617
00:28:52,600 --> 00:28:54,720
Speaker 13: and the war in the Middle East that could put

618
00:28:54,760 --> 00:28:57,200
Speaker 13: some upward pressure to oil prices, and so we think

619
00:28:57,200 --> 00:28:58,960
Speaker 13: that Brent oil is going to get back above.

620
00:28:58,760 --> 00:29:01,720
Speaker 9: Ninety and probably hover ninety five dollars into next.

621
00:29:01,560 --> 00:29:04,360
Speaker 13: Year, and that should be supportive to the energy sector.

622
00:29:04,400 --> 00:29:06,760
Speaker 13: We've seeing some weaknesses today just given the earnings in

623
00:29:06,840 --> 00:29:10,160
Speaker 13: terms of concerns around refining more margins, and that's why

624
00:29:10,160 --> 00:29:12,680
Speaker 13: we continue to prefer d MPs and some of the

625
00:29:12,720 --> 00:29:14,680
Speaker 13: oil services companies within the sector.

626
00:29:15,200 --> 00:29:18,840
Speaker 2: If we get into a recession, which stocks take the

627
00:29:18,880 --> 00:29:19,480
Speaker 2: biggest hit?

628
00:29:19,880 --> 00:29:20,320
Speaker 3: Do you think?

629
00:29:20,360 --> 00:29:24,920
Speaker 2: Because last time we got worried about this market, it

630
00:29:25,000 --> 00:29:29,520
Speaker 2: was interesting to see investors look to big growthy tech

631
00:29:29,520 --> 00:29:31,360
Speaker 2: companies as almost safe havens.

632
00:29:33,520 --> 00:29:35,800
Speaker 13: You know, I think in terms of like traditionally what

633
00:29:35,880 --> 00:29:38,640
Speaker 13: get hits in a recessionary environments and more cyclical errors

634
00:29:38,680 --> 00:29:40,720
Speaker 13: of the market. You know, financials have been a lot

635
00:29:40,800 --> 00:29:43,200
Speaker 13: under a lot of pressure of the banks that provision.

636
00:29:43,200 --> 00:29:45,600
Speaker 9: For an recessionary environment.

637
00:29:45,680 --> 00:29:48,080
Speaker 13: But you could see an additional letdown as there will

638
00:29:48,080 --> 00:29:52,080
Speaker 13: be increased concerns around credit and defaults on credit and

639
00:29:52,120 --> 00:29:54,720
Speaker 13: delinquency picking up, or so you probably see those areas

640
00:29:54,760 --> 00:29:57,240
Speaker 13: of cyclical errors of the market get hit in terms

641
00:29:57,280 --> 00:29:59,960
Speaker 13: of sort of the quality growth names, particularly in tact.

642
00:30:00,000 --> 00:30:00,920
Speaker 9: Remember, these companies have.

643
00:30:00,920 --> 00:30:03,040
Speaker 13: Very strong balance sheet, their self fund in and so

644
00:30:03,320 --> 00:30:06,160
Speaker 13: we would expect them to be able to weather the

645
00:30:06,240 --> 00:30:07,320
Speaker 13: storm a little bit better.

646
00:30:07,360 --> 00:30:10,400
Speaker 9: There are parts of tech that are quite defensive, included software.

647
00:30:10,560 --> 00:30:13,360
Speaker 13: Recurrent revenues are there, and also parts of tech like

648
00:30:13,400 --> 00:30:16,640
Speaker 13: cybersecurity that we think are more defensive play than sort

649
00:30:16,640 --> 00:30:19,160
Speaker 13: of the cyclical semiconductors of tech.

650
00:30:20,080 --> 00:30:21,719
Speaker 1: And Nattie, thank you so much for joining us. Really

651
00:30:21,760 --> 00:30:24,640
Speaker 1: appreciate getting some of your time at Nattie levelle. She

652
00:30:24,880 --> 00:30:28,760
Speaker 1: is the senior US equity strategist for Global Wealth Management.

653
00:30:28,840 --> 00:30:30,760
Speaker 1: Over there at ubs.

654
00:30:31,240 --> 00:30:34,640
Speaker 6: You're listening to the team Ken's are live program Bloomberg

655
00:30:34,680 --> 00:30:38,040
Speaker 6: Markets weekdays at ten am eastering on Bloomberg dot Com,

656
00:30:38,120 --> 00:30:41,280
Speaker 6: the iHeartRadio app and the Bloomberg Business App, or listen

657
00:30:41,360 --> 00:30:43,440
Speaker 6: on demand wherever you get your podcasts.

658
00:30:44,880 --> 00:30:47,200
Speaker 1: Matt Miller Paul Sweeney live here in our Bloomberg Interactive

659
00:30:47,200 --> 00:30:50,000
Speaker 1: Brokers Studio, streaming live on YouTube. I don't know what

660
00:30:50,000 --> 00:30:52,160
Speaker 1: to do with this market, no idea, yields are higher?

661
00:30:52,200 --> 00:30:55,760
Speaker 1: Can stocks work? You know, Tom's in his triple leverage

662
00:30:55,800 --> 00:30:57,680
Speaker 1: all cash fun He's sleeping like a baby. But what

663
00:30:57,920 --> 00:30:59,720
Speaker 1: do the rest of us do. Maybe our next guests

664
00:30:59,720 --> 00:31:01,800
Speaker 1: can help help us out here. Alex Chaloff, co head

665
00:31:01,800 --> 00:31:05,920
Speaker 1: of investment Strategies at Bernstein Private Wealth Management. He's based

666
00:31:05,960 --> 00:31:07,360
Speaker 1: in Los Angeles, where we got him live here in

667
00:31:07,360 --> 00:31:10,680
Speaker 1: our Bloomberg Interactive Broker studio today. So that's good, Alex.

668
00:31:11,480 --> 00:31:12,880
Speaker 1: What are you telling people? If I come up to

669
00:31:12,920 --> 00:31:14,960
Speaker 1: you at a cocktail party tonight and I say, what's

670
00:31:14,960 --> 00:31:17,040
Speaker 1: your market call? What do you got for me? T

671
00:31:17,200 --> 00:31:19,840
Speaker 1: Bill and chill, T Bill and Chilsee that's Matt Miller's

672
00:31:19,880 --> 00:31:20,480
Speaker 1: been calling that.

673
00:31:21,120 --> 00:31:24,760
Speaker 2: Yeah, I like the ETF. How do you go about it? Well,

674
00:31:24,760 --> 00:31:26,160
Speaker 2: I think there's a number of different ways. I mean,

675
00:31:26,200 --> 00:31:27,920
Speaker 2: anything on the short end is going to pay you.

676
00:31:27,920 --> 00:31:30,360
Speaker 2: You're not taking any risk, and you have the flex

677
00:31:30,400 --> 00:31:32,840
Speaker 2: to do something different. If we get some I don't

678
00:31:32,840 --> 00:31:34,520
Speaker 2: know if we will, but if we get some real

679
00:31:34,600 --> 00:31:37,640
Speaker 2: dubbish language from Chair of Powell next week, then all

680
00:31:37,640 --> 00:31:39,120
Speaker 2: of a sudden, it's off to the races and it's

681
00:31:39,120 --> 00:31:41,360
Speaker 2: go time. So I think you want to have liquidity,

682
00:31:41,400 --> 00:31:43,640
Speaker 2: you want to have an ability to flexa and do something.

683
00:31:44,400 --> 00:31:46,160
Speaker 14: But I don't think it's binary. I don't think it's

684
00:31:46,240 --> 00:31:48,960
Speaker 14: cash or something else. I think it's a mixture, and

685
00:31:49,600 --> 00:31:51,880
Speaker 14: we're hopeful that Powell gives us a signal that it's

686
00:31:52,120 --> 00:31:53,680
Speaker 14: okay to step a little bit out.

687
00:31:53,800 --> 00:31:56,840
Speaker 2: But on the respect, does dubvish language from Powell next week?

688
00:31:56,880 --> 00:31:59,200
Speaker 2: Does that just take the fed out of the equation

689
00:31:59,400 --> 00:32:02,040
Speaker 2: for the seeable future because they're not going to do

690
00:32:02,080 --> 00:32:04,400
Speaker 2: anything on rates. They're still going to be doing QT,

691
00:32:04,680 --> 00:32:06,560
Speaker 2: but they're not going to up it. Is that what

692
00:32:06,640 --> 00:32:07,000
Speaker 2: you want?

693
00:32:07,280 --> 00:32:07,800
Speaker 11: Yeah, I don't.

694
00:32:07,840 --> 00:32:10,600
Speaker 14: I mean, a dubbish language is like Nirvana. He's not

695
00:32:10,640 --> 00:32:13,080
Speaker 14: saying it right, he's I mean, all we can hope

696
00:32:13,080 --> 00:32:16,360
Speaker 14: for is we're thinking about, thinking about, thinking about so

697
00:32:16,720 --> 00:32:18,440
Speaker 14: I we're prepared for thinking.

698
00:32:18,240 --> 00:32:20,280
Speaker 2: About think about thinking about cutting or think about think

699
00:32:20,320 --> 00:32:21,920
Speaker 2: about being done being done.

700
00:32:22,080 --> 00:32:23,960
Speaker 1: Yeah, I mean our view is they're done.

701
00:32:24,120 --> 00:32:24,800
Speaker 3: Yeah, he's not.

702
00:32:25,120 --> 00:32:27,560
Speaker 14: Language is free, right, he can say whatever he wants

703
00:32:27,600 --> 00:32:29,440
Speaker 14: in the presser and that's what he's going to do.

704
00:32:29,520 --> 00:32:32,400
Speaker 14: He's going to be just as as hawkish as he's

705
00:32:32,440 --> 00:32:34,800
Speaker 14: been and scare the heck out of everyone in the market.

706
00:32:35,000 --> 00:32:36,920
Speaker 14: And that's just we have to live with that. So

707
00:32:37,480 --> 00:32:40,000
Speaker 14: our expectation as they're done, but they won't tell you

708
00:32:40,000 --> 00:32:42,720
Speaker 14: they're done until well after the fact. And that's why

709
00:32:42,720 --> 00:32:45,320
Speaker 14: we're talking to clients about t bill and chill for now,

710
00:32:45,440 --> 00:32:47,840
Speaker 14: but get ready to turn the dial. And there's not

711
00:32:47,880 --> 00:32:50,080
Speaker 14: going to be a green light. He's never going to say, hey, everybody,

712
00:32:50,120 --> 00:32:52,880
Speaker 14: we're done. He's going to hint and hint and hint,

713
00:32:53,040 --> 00:32:54,680
Speaker 14: and you've got to read through the lines. But if

714
00:32:54,720 --> 00:32:57,680
Speaker 14: you're a long term investor, that's less important. It's more

715
00:32:57,680 --> 00:33:00,200
Speaker 14: important to know that we're almost at the end. Whether

716
00:33:00,280 --> 00:33:02,680
Speaker 14: we're right and he's done, or somebody else's right and

717
00:33:02,680 --> 00:33:05,400
Speaker 14: they've got one more this, we're really close.

718
00:33:05,240 --> 00:33:05,800
Speaker 5: To being done.

719
00:33:06,000 --> 00:33:08,360
Speaker 1: Yep, that's kind of the call here. The question is

720
00:33:08,400 --> 00:33:10,560
Speaker 1: you know how close? And so let's just focus on

721
00:33:10,560 --> 00:33:12,120
Speaker 1: something a little bit more fundamental or smack in the

722
00:33:12,160 --> 00:33:14,680
Speaker 1: middle of earning season here. Any takeaways that you guys

723
00:33:14,720 --> 00:33:17,240
Speaker 1: are focusing on here or what are you looking forward

724
00:33:17,240 --> 00:33:18,560
Speaker 1: to hear from these management teams.

725
00:33:18,640 --> 00:33:22,160
Speaker 14: Yeah, it's still early, so you know, our earning scorecard

726
00:33:22,240 --> 00:33:24,160
Speaker 14: isn't yet. I wish I was back here in a

727
00:33:24,200 --> 00:33:27,040
Speaker 14: week because a busy week next week, not just the

728
00:33:27,080 --> 00:33:28,960
Speaker 14: FED meeting, but a number of really big names.

729
00:33:29,800 --> 00:33:30,280
Speaker 3: I think the.

730
00:33:30,240 --> 00:33:32,720
Speaker 14: Biggest learning that's emerged from the early part of the

731
00:33:32,720 --> 00:33:36,080
Speaker 14: earning season is how much companies who give poor guidance

732
00:33:36,080 --> 00:33:40,000
Speaker 14: are getting beaten up. The guys that are delivering solid results,

733
00:33:40,000 --> 00:33:42,040
Speaker 14: they're even getting the beats, and the majority of your beats,

734
00:33:42,040 --> 00:33:44,040
Speaker 14: I mean, the beats are ahead of what they've been

735
00:33:44,080 --> 00:33:46,240
Speaker 14: over the last couple of quarters. So feel good about that.

736
00:33:46,640 --> 00:33:50,240
Speaker 14: But boy, the misses are getting clobbered, and so the guidance.

737
00:33:50,320 --> 00:33:53,400
Speaker 14: When a guidance is week, either in printed or in

738
00:33:53,440 --> 00:33:55,760
Speaker 14: the calls, ye look out, it's I get.

739
00:33:55,600 --> 00:33:56,480
Speaker 3: The same feeling I get.

740
00:33:56,560 --> 00:33:59,600
Speaker 2: I get the feeling that if you meet or beat,

741
00:34:00,280 --> 00:34:03,440
Speaker 2: you're okay, it's snow big deal. But if you miss,

742
00:34:03,800 --> 00:34:05,840
Speaker 2: they're gonna take you to the woodhouse.

743
00:34:05,960 --> 00:34:08,640
Speaker 14: Yeah, it's it's I mean, it's always been that way.

744
00:34:08,800 --> 00:34:11,560
Speaker 14: But I think right now, just in your opening comments

745
00:34:11,600 --> 00:34:13,399
Speaker 14: like what do you do with this market, I think

746
00:34:13,480 --> 00:34:17,799
Speaker 14: of a poor guidance or uh, someone coming out and

747
00:34:17,840 --> 00:34:19,680
Speaker 14: just saying, look, I think next year is gonna be tough,

748
00:34:19,840 --> 00:34:21,680
Speaker 14: or even the first half of next year is gonna

749
00:34:21,680 --> 00:34:24,080
Speaker 14: be tough. It's you're right, you are getting taken out.

750
00:34:24,080 --> 00:34:25,440
Speaker 3: We've seen some big beats.

751
00:34:25,520 --> 00:34:29,360
Speaker 2: I mean, if I look at S and P index

752
00:34:29,719 --> 00:34:33,399
Speaker 2: EA go on the terminal two hundred and forty five

753
00:34:33,480 --> 00:34:35,719
Speaker 2: out of the five hundred have reported on the S

754
00:34:35,760 --> 00:34:35,960
Speaker 2: and P.

755
00:34:37,640 --> 00:34:41,320
Speaker 3: Earning surprise seven point four percent. Ye, so big beats.

756
00:34:41,360 --> 00:34:43,960
Speaker 2: And if I look down the list of you know

757
00:34:44,000 --> 00:34:48,680
Speaker 2: who's done it, consumer discretionary is ripping. They're about fifteen

758
00:34:48,719 --> 00:34:51,680
Speaker 2: percent over expectations. And if you look at just growth

759
00:34:51,800 --> 00:34:54,840
Speaker 2: over the same quarter last year, it's also huge, you know,

760
00:34:55,040 --> 00:34:57,839
Speaker 2: six point a five point eight percent, five point nine

761
00:34:57,840 --> 00:34:58,720
Speaker 2: percent in terms.

762
00:34:58,560 --> 00:34:59,360
Speaker 3: Of earnings growth.

763
00:35:00,040 --> 00:35:03,840
Speaker 2: And if you look at consumer discretionary fifty four percent

764
00:35:04,000 --> 00:35:06,359
Speaker 2: in terms of earnings growth of the same core last year.

765
00:35:06,360 --> 00:35:08,840
Speaker 2: If you look at communications thirty five percent over the

766
00:35:08,840 --> 00:35:09,839
Speaker 2: same corel last year.

767
00:35:09,880 --> 00:35:11,640
Speaker 3: So they're doing well.

768
00:35:11,680 --> 00:35:15,560
Speaker 2: Are we gonna see these kind of earnings seasons continue

769
00:35:15,600 --> 00:35:18,160
Speaker 2: into twenty twenty four? A, we're gonna see you know,

770
00:35:19,480 --> 00:35:21,360
Speaker 2: five six seven percent earnings growth?

771
00:35:21,560 --> 00:35:22,960
Speaker 14: Well, first I thought you were gonna ask me, why

772
00:35:23,000 --> 00:35:25,320
Speaker 14: isn't the market up on this incredible earning?

773
00:35:25,320 --> 00:35:26,719
Speaker 3: So why the market's not up?

774
00:35:26,719 --> 00:35:29,160
Speaker 2: You got yields that are off to the races, right

775
00:35:29,239 --> 00:35:31,719
Speaker 2: offering as you say, T bill and chill.

776
00:35:32,040 --> 00:35:34,080
Speaker 3: You got a lot of competition from yields.

777
00:35:34,280 --> 00:35:37,040
Speaker 2: Plus you've got a rising dollar, plus you've got rising

778
00:35:37,080 --> 00:35:37,920
Speaker 2: oil costs.

779
00:35:37,920 --> 00:35:40,400
Speaker 14: So yeah, no, it makes sense. It makes sense that

780
00:35:40,400 --> 00:35:42,279
Speaker 14: we're bouncing around, and I think you also have this

781
00:35:42,320 --> 00:35:45,520
Speaker 14: specter of a recession out there. So there's two things

782
00:35:45,520 --> 00:35:47,239
Speaker 14: that are going on. One is the cell side is

783
00:35:47,239 --> 00:35:50,200
Speaker 14: talking about earnings and they really haven't budged their numbers much.

784
00:35:50,840 --> 00:35:53,520
Speaker 14: We think that it's frankly, the buyside firms that aren't publishing,

785
00:35:53,520 --> 00:35:55,520
Speaker 14: that aren't telling you what they're doing with their numbers.

786
00:35:55,760 --> 00:35:58,440
Speaker 14: They've taken them down. So we would expect to see

787
00:35:58,480 --> 00:36:01,120
Speaker 14: some slow down in earnings the next couple of quarters.

788
00:36:01,440 --> 00:36:04,400
Speaker 14: By the way, macro perspective, don't think we're going into recession.

789
00:36:04,440 --> 00:36:07,359
Speaker 14: Think we get through, but earnings will slow from here.

790
00:36:07,680 --> 00:36:11,759
Speaker 14: Whether that's this quarter or next quarter or Q two,

791
00:36:12,040 --> 00:36:15,040
Speaker 14: we'll see, but it's it's definitely earning slowed down from here.

792
00:36:15,120 --> 00:36:17,719
Speaker 2: By the way, Is this normal being in you know,

793
00:36:17,920 --> 00:36:21,560
Speaker 2: a red hot economy looking back, but everybody kind of

794
00:36:21,600 --> 00:36:23,480
Speaker 2: biting their fingernails and worrying.

795
00:36:23,239 --> 00:36:25,560
Speaker 3: About a recession around the corner? Is that normal?

796
00:36:25,840 --> 00:36:26,040
Speaker 6: Yeah?

797
00:36:26,120 --> 00:36:28,600
Speaker 14: It's it's there's so many people out there that don't

798
00:36:28,600 --> 00:36:31,319
Speaker 14: even know what a five percent tenure looks like, right

799
00:36:31,320 --> 00:36:33,840
Speaker 14: that people have said, oh, wait, can the tenure really go?

800
00:36:33,960 --> 00:36:35,840
Speaker 14: I mean, there's some people that think that's almost like

801
00:36:35,840 --> 00:36:39,000
Speaker 14: the artificial ceiling, that's as high as it can go. Yes,

802
00:36:39,239 --> 00:36:40,920
Speaker 14: this is normal, even if you go back to the

803
00:36:40,960 --> 00:36:43,839
Speaker 14: early two thousands when the economy was steaming, not knowing

804
00:36:43,880 --> 00:36:46,600
Speaker 14: the GFC was on right around the corner, but there

805
00:36:46,640 --> 00:36:49,200
Speaker 14: was concern around have we overcooked this thing?

806
00:36:49,320 --> 00:36:53,840
Speaker 2: I look, I go on Challenger talk dot com. You know,

807
00:36:53,880 --> 00:36:56,640
Speaker 2: it's a forum for dodge buyers.

808
00:36:56,560 --> 00:36:59,000
Speaker 15: And I'm not on them aft and and you know

809
00:36:59,040 --> 00:37:03,399
Speaker 15: there'll be a headline, you know, Challenger sales are down,

810
00:37:03,480 --> 00:37:05,799
Speaker 15: and somebody will be like, yeah, because these those economies

811
00:37:05,800 --> 00:37:07,440
Speaker 15: and the crapper you know, And I'm.

812
00:37:07,239 --> 00:37:10,520
Speaker 2: Like, really, yeah, five percent GDP growth, three and a

813
00:37:10,560 --> 00:37:13,920
Speaker 2: half percent unemployment, This feels like a bad economy to you.

814
00:37:14,200 --> 00:37:14,560
Speaker 6: It does.

815
00:37:14,840 --> 00:37:17,560
Speaker 14: Yeah, And look at the participation rate is creeping up,

816
00:37:17,680 --> 00:37:20,200
Speaker 14: and where like you said, wage growth has been consistent,

817
00:37:20,680 --> 00:37:23,480
Speaker 14: consumers are spending. I think what that comment is a

818
00:37:23,520 --> 00:37:26,919
Speaker 14: reaction to is the savings rate coming down. So coming

819
00:37:26,960 --> 00:37:29,080
Speaker 14: out of COVID, all that money pumped into the system,

820
00:37:29,160 --> 00:37:32,560
Speaker 14: everyone had bloated balance sheets up and down the well spectrum.

821
00:37:32,920 --> 00:37:35,520
Speaker 14: Now it's really the upper end of the well spectrum

822
00:37:35,560 --> 00:37:37,400
Speaker 14: that has the dollars and the lower end is spent

823
00:37:37,480 --> 00:37:39,799
Speaker 14: through and that's why you're starting to see credit card

824
00:37:39,920 --> 00:37:42,759
Speaker 14: numbers pop up. So there really is a tail of

825
00:37:42,760 --> 00:37:45,360
Speaker 14: two cities going on. At the upper end, everyone is

826
00:37:45,440 --> 00:37:48,160
Speaker 14: comfortable t bill and chill. At the lower end, we've

827
00:37:48,160 --> 00:37:50,480
Speaker 14: seen the reduction in savings and that's starting to you

828
00:37:50,480 --> 00:37:51,920
Speaker 14: can you can feel it when.

829
00:37:51,760 --> 00:37:54,239
Speaker 1: You guys do dip your toe back into the water.

830
00:37:54,280 --> 00:37:55,799
Speaker 1: What are some of the sectors that you guys might.

831
00:37:55,719 --> 00:37:57,879
Speaker 14: Be I think there's two ways to dip toe. One

832
00:37:58,000 --> 00:38:01,800
Speaker 14: is into equities. The other, well, there's three equities, fixed income.

833
00:38:01,800 --> 00:38:03,839
Speaker 14: I think there you're going to be traditional. I think

834
00:38:03,880 --> 00:38:06,799
Speaker 14: if we get a slowdown in earnings, if rates stay high,

835
00:38:06,880 --> 00:38:08,440
Speaker 14: you want to be with quality. You want to be

836
00:38:08,480 --> 00:38:10,320
Speaker 14: with good balance sheets, you want to be with reliable

837
00:38:10,360 --> 00:38:13,400
Speaker 14: cash flow. But I also think there's an incredible opportunity

838
00:38:13,480 --> 00:38:17,120
Speaker 14: that exists in the private markets. One, because public plans

839
00:38:17,200 --> 00:38:20,560
Speaker 14: big LPs are way over their skis with illiquidity and

840
00:38:20,600 --> 00:38:23,840
Speaker 14: they're selling like crazy. And two they've got no money

841
00:38:23,840 --> 00:38:26,080
Speaker 14: to put into those markets for the next two maybe

842
00:38:26,120 --> 00:38:29,479
Speaker 14: three years, and so the valuations are coming down there.

843
00:38:29,680 --> 00:38:31,680
Speaker 14: And I think this is in primaries it's in secondaries,

844
00:38:31,719 --> 00:38:33,600
Speaker 14: it's in private equity, it's in venture capital, it's in

845
00:38:33,640 --> 00:38:36,239
Speaker 14: real estate, it's everywhere in the private mark used to be.

846
00:38:36,440 --> 00:38:39,719
Speaker 1: It burns in running the alternative asset strategies. I was

847
00:38:39,800 --> 00:38:42,680
Speaker 1: so talktales, give us your two cents on private credit.

848
00:38:42,800 --> 00:38:45,399
Speaker 1: Matt and I have just been fascinated. We're about to quit.

849
00:38:46,480 --> 00:38:48,680
Speaker 1: We're going to go open up a private credit. Yes.

850
00:38:48,800 --> 00:38:53,239
Speaker 14: Yes, private credit has been incredible over this cycle. People

851
00:38:53,280 --> 00:38:55,200
Speaker 14: thought in COVID, oh no, this is this is the

852
00:38:55,320 --> 00:38:58,080
Speaker 14: end because a lot of the public BDCs were under pressure,

853
00:38:58,520 --> 00:39:02,000
Speaker 14: but private credit through that made money in that market,

854
00:39:02,160 --> 00:39:04,719
Speaker 14: did very well in twenty one, made money last year

855
00:39:04,760 --> 00:39:07,200
Speaker 14: in twenty two, and I've seen private credit numbers so

856
00:39:07,239 --> 00:39:09,080
Speaker 14: far this year that have double digits on them on

857
00:39:09,120 --> 00:39:12,000
Speaker 14: a year to day basis. So look, they've weathered the storm.

858
00:39:12,040 --> 00:39:15,160
Speaker 14: It's all about underwriting. All about underwriting. If you're a conservative,

859
00:39:15,160 --> 00:39:17,239
Speaker 14: you're gonna be fine. If you took crazy risk a

860
00:39:17,239 --> 00:39:18,960
Speaker 14: couple years ago because you needed to win that deal,

861
00:39:19,280 --> 00:39:22,040
Speaker 14: you're gonna be in trouble. YEP, isn't there definitely a

862
00:39:22,080 --> 00:39:24,400
Speaker 14: double issues? Nobody's watching these guys.

863
00:39:24,920 --> 00:39:27,000
Speaker 1: I wouldn't say nobody's watching those guys.

864
00:39:27,120 --> 00:39:30,640
Speaker 14: I mean, we have a private credit business that we

865
00:39:30,680 --> 00:39:33,600
Speaker 14: spend a whole lot of time really with our hands

866
00:39:33,600 --> 00:39:35,680
Speaker 14: deep in it. I think others do as well. Yes,

867
00:39:35,800 --> 00:39:38,799
Speaker 14: is the regulatory oversight different in the public markets? This

868
00:39:38,880 --> 00:39:41,560
Speaker 14: is in private That's a risk, that's definitely a risk.

869
00:39:41,719 --> 00:39:43,640
Speaker 14: But if you're with somebody that's a track record of

870
00:39:43,680 --> 00:39:47,400
Speaker 14: success in and out of tough markets, I'm gonna say,

871
00:39:47,400 --> 00:39:48,000
Speaker 14: you're gonna be fine.

872
00:39:48,000 --> 00:39:49,080
Speaker 3: Paul, what are you doing?

873
00:39:49,160 --> 00:39:51,800
Speaker 2: Are you calling for regulation before we start our shop,

874
00:39:51,880 --> 00:39:54,879
Speaker 2: before we started out. I'm just waiting for some big deal,

875
00:39:54,880 --> 00:39:56,919
Speaker 2: a couple of deals to blow up, and they we're.

876
00:39:56,840 --> 00:40:00,879
Speaker 3: Gonna be like way, Elizabeth Warren, Please don't.

877
00:40:01,200 --> 00:40:03,880
Speaker 14: You could have a couple of blow ups, But that

878
00:40:03,920 --> 00:40:06,520
Speaker 14: actually creates opportunity because there's so much money on the

879
00:40:06,560 --> 00:40:09,040
Speaker 14: sidelines waiting to rescue that. That's the thing that I

880
00:40:09,040 --> 00:40:11,520
Speaker 14: think people miss. If we have a blip in private credit,

881
00:40:11,560 --> 00:40:13,919
Speaker 14: it's going to be like a thirty second blip because

882
00:40:13,960 --> 00:40:16,160
Speaker 14: there's so much money waiting to just get in there

883
00:40:16,200 --> 00:40:16,880
Speaker 14: and get after it.

884
00:40:16,920 --> 00:40:17,040
Speaker 2: All.

885
00:40:17,120 --> 00:40:19,560
Speaker 1: Right, Alex, good job, I just promoted you. During the

886
00:40:19,600 --> 00:40:22,960
Speaker 1: course of this discussion from cohead of Investment Strategies, to

887
00:40:23,320 --> 00:40:27,120
Speaker 1: chief Investment Officer of Bernstein Private Wealth Management. So congratulations,

888
00:40:27,160 --> 00:40:29,640
Speaker 1: thank you, thank you. We appreciate that you're based in LA.

889
00:40:29,680 --> 00:40:31,520
Speaker 1: Anytime you're in New York, you're welcome. Come back in love.

890
00:40:31,640 --> 00:40:32,879
Speaker 1: I'm hearing your market call here.

891
00:40:33,080 --> 00:40:36,720
Speaker 6: You're listening to the tape CANSUR live program Bloomberg Markets

892
00:40:36,760 --> 00:40:40,160
Speaker 6: weekdays at ten am Eastern on Bloomberg Radio, the tune

893
00:40:40,200 --> 00:40:43,160
Speaker 6: in app, Bloomberg dot com, and the Bloomberg Business App.

894
00:40:43,200 --> 00:40:46,000
Speaker 6: You can also listen live on Amazon Alexa from our

895
00:40:46,040 --> 00:40:51,080
Speaker 6: flagship New York station. Just say Alexa, play Bloomberg eleven thirty.

896
00:40:51,640 --> 00:40:55,319
Speaker 16: Welcome to our Bloomberg TV and radio audiences worldwide. Shares

897
00:40:55,360 --> 00:40:58,680
Speaker 16: of Intel popping today is the chipmaker predicted a return

898
00:40:58,760 --> 00:41:01,880
Speaker 16: to sales growth in the full quarter, fuel by rebound

899
00:41:01,960 --> 00:41:05,200
Speaker 16: in the personal computer market, but also a more competitive

900
00:41:05,520 --> 00:41:09,160
Speaker 16: product lineup. Joining us now is Intel CEO Pat eel Singer,

901
00:41:09,640 --> 00:41:11,799
Speaker 16: And look, Pat, there was quite a long list of

902
00:41:11,840 --> 00:41:14,680
Speaker 16: things that investors cheered right. This is the third quarter

903
00:41:15,160 --> 00:41:18,239
Speaker 16: where the market's basically said, Pat, we believe you on

904
00:41:18,280 --> 00:41:22,760
Speaker 16: the turnaround story, but on your to do list, where

905
00:41:22,760 --> 00:41:24,279
Speaker 16: do you think you are and what do you think

906
00:41:24,320 --> 00:41:26,960
Speaker 16: you have left? To do on that turnaround story.

907
00:41:27,840 --> 00:41:30,120
Speaker 17: Yeah, thanks Ed, And you know, overall, hey, it was

908
00:41:30,160 --> 00:41:33,000
Speaker 17: a great as we said, just a clean beat and

909
00:41:33,160 --> 00:41:36,560
Speaker 17: raise on all the financial metrics, but even more important

910
00:41:36,960 --> 00:41:40,040
Speaker 17: was the operational performance. And you know, as we said, hey,

911
00:41:40,080 --> 00:41:44,400
Speaker 17: getting back to process leadership, and we delivered key milestones

912
00:41:44,440 --> 00:41:46,399
Speaker 17: and we still have at least another year or two

913
00:41:46,440 --> 00:41:49,799
Speaker 17: to go on getting that done, but major milestones.

914
00:41:49,840 --> 00:41:51,920
Speaker 11: Starting to deliver Foundry customers.

915
00:41:52,200 --> 00:41:54,239
Speaker 17: You know, I promised one at the start of the year,

916
00:41:54,280 --> 00:41:57,359
Speaker 17: and now we have three on our most advanced process technology,

917
00:41:57,480 --> 00:42:01,320
Speaker 17: major packaging wins, and of course it's the product execution,

918
00:42:01,760 --> 00:42:06,240
Speaker 17: you know, clean launch of the AIPC generation, but also

919
00:42:06,280 --> 00:42:09,960
Speaker 17: the server business getting back to profitability ahead of schedule

920
00:42:10,080 --> 00:42:13,520
Speaker 17: and a little bit better performance there and delivering the

921
00:42:13,719 --> 00:42:18,360
Speaker 17: AI Everywhere message with our accelerators our server product line.

922
00:42:18,560 --> 00:42:21,360
Speaker 17: So a really excellent quarter and I'm just so grateful

923
00:42:21,400 --> 00:42:23,839
Speaker 17: for the Intel team. It's been a journey and we

924
00:42:23,920 --> 00:42:25,520
Speaker 17: are clearly coming back.

925
00:42:26,280 --> 00:42:29,160
Speaker 16: A pat You've talked to investors and indeed to Caroline

926
00:42:29,160 --> 00:42:32,920
Speaker 16: and I about these new customers for the foundry business.

927
00:42:33,640 --> 00:42:35,560
Speaker 16: When do we get names? When are you going to

928
00:42:35,560 --> 00:42:37,080
Speaker 16: announce who these customers are?

929
00:42:38,360 --> 00:42:39,719
Speaker 11: Well? You two things there.

930
00:42:39,920 --> 00:42:43,160
Speaker 17: Ed One is not generally the practice of the foundry

931
00:42:43,200 --> 00:42:47,200
Speaker 17: industry for the foundry to be declaring their customer names,

932
00:42:47,440 --> 00:42:49,640
Speaker 17: so one is not practice. And also many of the

933
00:42:49,640 --> 00:42:54,040
Speaker 17: customers consider it confidential and part of their competitive advantage

934
00:42:54,080 --> 00:42:57,200
Speaker 17: and how and what technologies they choose. So I can't

935
00:42:57,239 --> 00:43:00,279
Speaker 17: promise names, but we're going to characterize them as best

936
00:43:00,320 --> 00:43:03,120
Speaker 17: we can. And as we said, these are high performance

937
00:43:03,239 --> 00:43:06,560
Speaker 17: and AI customers, and we've really seen the surge of

938
00:43:06,640 --> 00:43:11,160
Speaker 17: interest in using the Intel technologies and foundry for different

939
00:43:11,200 --> 00:43:14,520
Speaker 17: AI offerings in the marketplace. And that's both a wafer

940
00:43:14,600 --> 00:43:18,000
Speaker 17: but also a packaging and this idea of advanced packaging.

941
00:43:18,080 --> 00:43:20,359
Speaker 17: I mean, in addition to the three on the wafer side,

942
00:43:20,400 --> 00:43:23,640
Speaker 17: we had two advanced packaging customers in AI and that

943
00:43:23,680 --> 00:43:27,560
Speaker 17: revenue materializes more rapidly and six more in the pipeline.

944
00:43:27,640 --> 00:43:31,360
Speaker 17: So overall a really substantial look orter and the AI

945
00:43:31,480 --> 00:43:33,920
Speaker 17: space in particular has been the customers that have seen

946
00:43:33,960 --> 00:43:35,000
Speaker 17: the most enthusiasm.

947
00:43:35,440 --> 00:43:38,440
Speaker 18: Let's talk about the AI space because the running of

948
00:43:38,480 --> 00:43:40,799
Speaker 18: AI models is where you see your future. It's not

949
00:43:40,840 --> 00:43:43,560
Speaker 18: all just about the foundation models. It's actually the running

950
00:43:43,600 --> 00:43:46,880
Speaker 18: of them, not the building. But can you just relieve

951
00:43:46,880 --> 00:43:49,080
Speaker 18: some of the anxiety coming from investors about a lack

952
00:43:49,120 --> 00:43:51,960
Speaker 18: of clarity over data center future. And indeed, what is

953
00:43:51,960 --> 00:43:53,920
Speaker 18: it that they need to hear from you? What more

954
00:43:53,960 --> 00:43:56,520
Speaker 18: can you articulate that really makes it clear to them

955
00:43:56,520 --> 00:43:57,719
Speaker 18: that you're going to be front and center in the

956
00:43:57,760 --> 00:43:58,359
Speaker 18: AI race.

957
00:43:59,200 --> 00:44:01,879
Speaker 17: Yeah, thanks, Kerr, And you know, really, you know, first

958
00:44:01,960 --> 00:44:04,160
Speaker 17: let's characterize what we're talking about in this idea of

959
00:44:04,280 --> 00:44:09,200
Speaker 17: creating you know, these frontier or foundation models is described

960
00:44:09,280 --> 00:44:13,600
Speaker 17: versus using right and the training and the inferencing against

961
00:44:13,600 --> 00:44:15,880
Speaker 17: those models, and I sort of compare it to like

962
00:44:15,960 --> 00:44:19,120
Speaker 17: weather models. Not that many people generate weather models, but

963
00:44:19,200 --> 00:44:21,279
Speaker 17: a lot of people use them. And that's how we

964
00:44:21,320 --> 00:44:24,040
Speaker 17: think about this next phase of AI. How do we

965
00:44:24,080 --> 00:44:27,600
Speaker 17: make this inferencing or the use of the models broadly available.

966
00:44:27,600 --> 00:44:30,200
Speaker 17: And that's going to be you know, in the client

967
00:44:30,400 --> 00:44:32,840
Speaker 17: right we talked about the AI PC. It's going to

968
00:44:32,840 --> 00:44:36,680
Speaker 17: be at the edge right in retail and manufacturing and

969
00:44:36,880 --> 00:44:39,440
Speaker 17: supply chains. But it's also going to be an on

970
00:44:39,560 --> 00:44:42,640
Speaker 17: premise data centers. And as we've said, instead of taking

971
00:44:42,640 --> 00:44:45,160
Speaker 17: my data to the cloud, I want to bring the

972
00:44:45,200 --> 00:44:49,000
Speaker 17: AI to my data center where the data is already

973
00:44:49,200 --> 00:44:51,880
Speaker 17: and finally work in the cloud, and you.

974
00:44:51,880 --> 00:44:53,120
Speaker 11: Know from the data center proper.

975
00:44:53,200 --> 00:44:55,919
Speaker 17: As your question talks about, Hey, you know, we knew

976
00:44:55,960 --> 00:44:58,040
Speaker 17: we were going to lose some market share here, right

977
00:44:58,120 --> 00:45:00,720
Speaker 17: Those losses happened last year and they're sort of playing

978
00:45:00,760 --> 00:45:04,440
Speaker 17: out of the marketplace. But our roadmap is strong, and

979
00:45:04,480 --> 00:45:08,399
Speaker 17: we over executed in the quarter on our next gen

980
00:45:08,560 --> 00:45:10,560
Speaker 17: ur Gen four product that did a bit better than

981
00:45:10,560 --> 00:45:12,840
Speaker 17: we thought and a lot of AI use cases in

982
00:45:12,880 --> 00:45:16,399
Speaker 17: this area of inferencing. The next generation Gen five, we're

983
00:45:16,440 --> 00:45:18,960
Speaker 17: already ramping that in production and that's going to get

984
00:45:19,040 --> 00:45:22,560
Speaker 17: announced in December. But next year's products, we're already seeing

985
00:45:22,600 --> 00:45:24,839
Speaker 17: great health and we're ahead of schedule in those and

986
00:45:24,920 --> 00:45:28,200
Speaker 17: those really improve our competitiveness. And the twenty five products

987
00:45:28,239 --> 00:45:31,359
Speaker 17: will go into fab in the first quarter of next year.

988
00:45:31,400 --> 00:45:34,799
Speaker 17: So our whole roadmap and execution has really improved, and

989
00:45:34,840 --> 00:45:37,680
Speaker 17: we start to see ourselves regaining market share in twenty

990
00:45:37,680 --> 00:45:39,560
Speaker 17: four in that area. And I think that will be

991
00:45:39,600 --> 00:45:42,799
Speaker 17: sort of the final piece of the turnaround story. When

992
00:45:43,600 --> 00:45:47,239
Speaker 17: the market sees, okay, data center is backstrong, they're winning in.

993
00:45:47,200 --> 00:45:48,160
Speaker 11: The AI space.

994
00:45:48,400 --> 00:45:50,720
Speaker 17: You know, that'll be the end of the turnaround story

995
00:45:50,719 --> 00:45:52,279
Speaker 17: and people say Okay, they did it.

996
00:45:52,760 --> 00:45:56,040
Speaker 18: We'll go back to that building that training of data.

997
00:45:56,200 --> 00:45:58,279
Speaker 18: Can you talk to a little about stability AI. Of

998
00:45:58,320 --> 00:46:01,120
Speaker 18: course you've got to deal to build that AI supercomputer.

999
00:46:01,320 --> 00:46:04,840
Speaker 18: Was that then really going to you for ultimately what

1000
00:46:04,920 --> 00:46:07,560
Speaker 18: Gaudy can provide over what in video would or is

1001
00:46:07,600 --> 00:46:11,120
Speaker 18: it that you wanted to really be sort of offering

1002
00:46:11,160 --> 00:46:13,360
Speaker 18: them some carrots in the situation to be able to

1003
00:46:13,400 --> 00:46:15,200
Speaker 18: be helping with the training of the models.

1004
00:46:15,719 --> 00:46:16,600
Speaker 11: Yeah, great question.

1005
00:46:16,680 --> 00:46:19,879
Speaker 17: And you know now with Gudi, we're now delivering performance

1006
00:46:19,920 --> 00:46:22,120
Speaker 17: and benchmarks that are as good as the best in

1007
00:46:22,160 --> 00:46:25,000
Speaker 17: the industry. So we've gotten our performance there. You know,

1008
00:46:25,040 --> 00:46:26,880
Speaker 17: there was also some of this work that you know,

1009
00:46:26,920 --> 00:46:30,520
Speaker 17: the models were created and much of the software industry

1010
00:46:30,680 --> 00:46:33,200
Speaker 17: was working, you know, on the n video platform, so

1011
00:46:33,239 --> 00:46:35,000
Speaker 17: we had to do some of the software work to

1012
00:46:35,000 --> 00:46:38,360
Speaker 17: get those running on the Gaudy platform. And they're looking

1013
00:46:38,400 --> 00:46:41,280
Speaker 17: for more cost effective choices and ones that are supply

1014
00:46:41,400 --> 00:46:44,799
Speaker 17: chain available in the industry. And as we're ramping our

1015
00:46:44,840 --> 00:46:48,000
Speaker 17: Goudi product line, we're getting that software work done. You know,

1016
00:46:48,000 --> 00:46:51,759
Speaker 17: they're priced more competitively. Customers are saying, wow, I can

1017
00:46:51,840 --> 00:46:54,480
Speaker 17: do that work and do it at a much lower

1018
00:46:54,520 --> 00:46:58,600
Speaker 17: power performance envelope than the alternatives and have a much

1019
00:46:58,600 --> 00:47:02,840
Speaker 17: more cost effective model training and inferencing at scale. Okay,

1020
00:47:03,160 --> 00:47:06,040
Speaker 17: you're seeing a real surge of interest, and as I said,

1021
00:47:06,040 --> 00:47:09,640
Speaker 17: we doubled our pipeline of customers this quarter. You know

1022
00:47:09,680 --> 00:47:12,320
Speaker 17: when we, like others in the industry, are now supply

1023
00:47:12,440 --> 00:47:14,920
Speaker 17: chain constrained and we're racing to catch up to that

1024
00:47:15,000 --> 00:47:17,120
Speaker 17: demand on our GUDI product line.

1025
00:47:18,160 --> 00:47:21,280
Speaker 16: For a Bloomberg radio and television audience worldwide, we're speaking

1026
00:47:21,280 --> 00:47:24,640
Speaker 16: to the CEO of Intel, Pat Gelsinger. Pat, the story

1027
00:47:24,680 --> 00:47:27,799
Speaker 16: of this week has been chip companies entering the PC

1028
00:47:27,960 --> 00:47:33,560
Speaker 16: processor market on architecture, how do you hold off those newcomers,

1029
00:47:33,920 --> 00:47:37,400
Speaker 16: you know, attention for example one Apple this coming Monday,

1030
00:47:37,520 --> 00:47:39,600
Speaker 16: and they have done well in that domain.

1031
00:47:41,400 --> 00:47:45,000
Speaker 17: Yeah, and I think of the AI you know, PC

1032
00:47:45,280 --> 00:47:48,680
Speaker 17: as an exciting category and this is one that we announced.

1033
00:47:49,440 --> 00:47:51,839
Speaker 17: We've been the first company on that and we're now

1034
00:47:52,000 --> 00:47:56,600
Speaker 17: ramping our first generation AIPC products called the Core Ultra.

1035
00:47:56,960 --> 00:47:59,440
Speaker 17: So others are talking about what they might do in

1036
00:47:59,520 --> 00:48:02,799
Speaker 17: a year or two years. We're ramping products in the marketplace.

1037
00:48:03,280 --> 00:48:06,600
Speaker 17: Today we announced over one hundred is vs in our

1038
00:48:06,719 --> 00:48:10,640
Speaker 17: AI Acceleration program, so they're coming on board and before

1039
00:48:10,680 --> 00:48:13,520
Speaker 17: others have their products even shipping in the marketplace.

1040
00:48:13,560 --> 00:48:15,680
Speaker 11: We'll be launching our next generation.

1041
00:48:15,320 --> 00:48:18,959
Speaker 17: Our Lunar Lake product, which we've already demonstrated for next year,

1042
00:48:19,239 --> 00:48:22,319
Speaker 17: and Panther Lake, our twenty five product. We're sending that

1043
00:48:22,400 --> 00:48:26,680
Speaker 17: into fab on our leadership, Intel eighteen A process Technology

1044
00:48:26,840 --> 00:48:28,799
Speaker 17: and Q one. So I feel like we have a

1045
00:48:28,920 --> 00:48:32,040
Speaker 17: very strong roadmap. And Hey, the idea of an ARM

1046
00:48:32,160 --> 00:48:35,400
Speaker 17: based PC, you know, they've always been sort of niche

1047
00:48:35,480 --> 00:48:37,600
Speaker 17: and low end, with the exception of Apple, and there

1048
00:48:37,600 --> 00:48:40,960
Speaker 17: it's not ARM, it's Apple and their ecosystem. So for

1049
00:48:41,000 --> 00:48:43,799
Speaker 17: the broader windows our market, you know, it's always been

1050
00:48:43,840 --> 00:48:48,120
Speaker 17: pretty low end and insignificant in the bigger context. And

1051
00:48:48,160 --> 00:48:50,560
Speaker 17: as long as we deliver our roadmap, I feel very

1052
00:48:50,600 --> 00:48:54,319
Speaker 17: confident that it's others surge into the AIPC space. You know,

1053
00:48:54,360 --> 00:48:57,600
Speaker 17: this is a lift to the overall PC market and

1054
00:48:57,680 --> 00:49:00,399
Speaker 17: will be uniquely positioned to benefit from that.

1055
00:49:01,560 --> 00:49:04,040
Speaker 16: Pat Going back just a second to stability in the

1056
00:49:04,040 --> 00:49:07,400
Speaker 16: AI supercomputer. That's kind of in the assembled component domain.

1057
00:49:07,880 --> 00:49:10,160
Speaker 16: But are you saying or are you able to confirm

1058
00:49:10,200 --> 00:49:13,920
Speaker 16: that's a paid relationship with stability to phaise you for

1059
00:49:14,120 --> 00:49:14,880
Speaker 16: use of Goudy.

1060
00:49:15,719 --> 00:49:19,319
Speaker 17: Oh yeah, yeah, this is a major customer and we'll

1061
00:49:19,320 --> 00:49:22,319
Speaker 17: be building that with them, of course, working closely with them,

1062
00:49:22,320 --> 00:49:24,960
Speaker 17: but this is a paid customer relationship.

1063
00:49:25,160 --> 00:49:25,359
Speaker 11: Yeah.

1064
00:49:25,400 --> 00:49:29,680
Speaker 17: We also see quite another set around our OEMs. We

1065
00:49:29,719 --> 00:49:33,479
Speaker 17: announced the major partnership with Dell right for not only

1066
00:49:33,600 --> 00:49:36,800
Speaker 17: Xeon's but also Goudy's as they come on premise and

1067
00:49:36,840 --> 00:49:37,960
Speaker 17: their cloud offerings.

1068
00:49:38,120 --> 00:49:38,839
Speaker 11: You know, we've seen a.

1069
00:49:38,760 --> 00:49:42,840
Speaker 17: Big upsurge in Goudy interest in the Intel Developer Cloud.

1070
00:49:42,880 --> 00:49:45,880
Speaker 17: We had a five x increase in the developers on

1071
00:49:45,960 --> 00:49:49,200
Speaker 17: our developer cloud, much of that on the Goudi platform.

1072
00:49:49,440 --> 00:49:52,080
Speaker 17: And then I said, we saw, you know, well over

1073
00:49:52,160 --> 00:49:56,360
Speaker 17: a billion dollars last quarter. We've approximately doubled that this

1074
00:49:56,520 --> 00:50:00,000
Speaker 17: quarter of Goudy demand worldwide, and those are largely paid

1075
00:50:00,000 --> 00:50:04,440
Speaker 17: aid customer engagements. So overall, we're just seeing a surge

1076
00:50:04,480 --> 00:50:07,440
Speaker 17: of interest with Stability, AI, Dell, and many others.

1077
00:50:09,000 --> 00:50:13,239
Speaker 16: Pat We every earnings look to your forecast for the

1078
00:50:13,280 --> 00:50:17,480
Speaker 16: PC market, and you're slightly more positive than consensus in

1079
00:50:17,560 --> 00:50:20,479
Speaker 16: terms of literally how many PCs you think will ship

1080
00:50:20,520 --> 00:50:23,520
Speaker 16: around the world this year. I guess part of that

1081
00:50:23,640 --> 00:50:26,640
Speaker 16: is baked into your sales forecast for the current period

1082
00:50:26,640 --> 00:50:30,360
Speaker 16: as well, what gives you that confidence and why is

1083
00:50:30,400 --> 00:50:33,200
Speaker 16: it that consumers will return to buying PCs.

1084
00:50:34,120 --> 00:50:36,400
Speaker 17: Yeah, and there's probably three different factors there, you know.

1085
00:50:36,480 --> 00:50:39,000
Speaker 17: One is I say, hey, we gave this two hundred

1086
00:50:39,000 --> 00:50:43,719
Speaker 17: and seventy million ish PCs being sold through this year,

1087
00:50:44,000 --> 00:50:46,120
Speaker 17: and we said that earlier in the year. Many thought

1088
00:50:46,120 --> 00:50:48,520
Speaker 17: that we were too optimistic. Hey, we look at it

1089
00:50:48,520 --> 00:50:52,239
Speaker 17: today and we're almost spot on with our accuracy on

1090
00:50:52,320 --> 00:50:56,400
Speaker 17: that forecast. Second, we've seen the industry, you know, not

1091
00:50:56,560 --> 00:51:00,920
Speaker 17: just Intel, but the industry overall. Inventory levels are now healthy,

1092
00:51:01,320 --> 00:51:03,520
Speaker 17: you know, and we look at our selling rate versus

1093
00:51:03,560 --> 00:51:06,680
Speaker 17: sellout rate, you know, the product is selling through. I'd

1094
00:51:06,719 --> 00:51:09,080
Speaker 17: also say, hey, we're off to a good start in

1095
00:51:09,160 --> 00:51:11,160
Speaker 17: Q four. We're a couple of weeks into the quarter,

1096
00:51:11,200 --> 00:51:14,160
Speaker 17: and as I said on the earnings call, really good

1097
00:51:14,160 --> 00:51:17,040
Speaker 17: start to Q four as well. And you know, seasonality

1098
00:51:17,120 --> 00:51:20,480
Speaker 17: is a bit above in Q four historical levels. We

1099
00:51:20,520 --> 00:51:23,400
Speaker 17: also have things like Windows ten end of service coming

1100
00:51:23,440 --> 00:51:28,600
Speaker 17: from Microsoft. You know, Microsoft's about to release their copilot products.

1101
00:51:28,800 --> 00:51:30,520
Speaker 11: But I'd say the sizzle in the.

1102
00:51:30,480 --> 00:51:35,000
Speaker 17: Marketplace is around this AIPC broad new use cases for

1103
00:51:35,080 --> 00:51:38,280
Speaker 17: the PC, and I've compared it to the Centrino moment

1104
00:51:38,600 --> 00:51:42,160
Speaker 17: of twenty years ago when Centrino really ushered Wi Fi

1105
00:51:42,200 --> 00:51:45,200
Speaker 17: at scale into the industry, and we think that's exactly

1106
00:51:45,200 --> 00:51:47,440
Speaker 17: what's going to happen with the AIPC. It will be

1107
00:51:47,480 --> 00:51:51,160
Speaker 17: a driver of new applications and use cases for the

1108
00:51:51,200 --> 00:51:54,640
Speaker 17: PC and bringing a bit more excitement, a bit acceleration,

1109
00:51:54,880 --> 00:51:57,520
Speaker 17: more users coming into the marketplace because it's going to

1110
00:51:57,520 --> 00:52:00,720
Speaker 17: give significant new capabilities to PE users.

1111
00:52:01,000 --> 00:52:02,800
Speaker 18: Is that what gives you a gross margin level of

1112
00:52:02,840 --> 00:52:06,120
Speaker 18: sixty percent? Again, is that where the confidence comes from.

1113
00:52:06,640 --> 00:52:09,840
Speaker 17: Well, to get our overall gross margins up above sixty percent,

1114
00:52:09,960 --> 00:52:13,440
Speaker 17: I need the whole business to improve, Carolyn. Obviously we're

1115
00:52:13,719 --> 00:52:16,160
Speaker 17: making good progress in the PC, you know, I also

1116
00:52:16,239 --> 00:52:17,840
Speaker 17: need to improve my factory network.

1117
00:52:18,120 --> 00:52:20,440
Speaker 11: And as we get back to leadership.

1118
00:52:20,520 --> 00:52:24,440
Speaker 17: We finished this super aggressive five nodes in four years.

1119
00:52:24,440 --> 00:52:25,800
Speaker 11: You know, I'm churning through.

1120
00:52:25,600 --> 00:52:29,000
Speaker 17: Capital very rapidly to get back to leadership. That's a

1121
00:52:29,000 --> 00:52:32,120
Speaker 17: big factor getting the data center business healthy. Going back

1122
00:52:32,160 --> 00:52:35,160
Speaker 17: to one of your earlier questions, another factor in getting

1123
00:52:35,200 --> 00:52:35,560
Speaker 17: back to.

1124
00:52:35,719 --> 00:52:37,040
Speaker 11: Our margin structures.

1125
00:52:37,600 --> 00:52:39,360
Speaker 17: One of the other things we did this quarter was

1126
00:52:39,400 --> 00:52:43,319
Speaker 17: also have great operational success on our cost saving initiatives,

1127
00:52:43,320 --> 00:52:45,520
Speaker 17: and we said you know, we would result in three

1128
00:52:45,560 --> 00:52:46,560
Speaker 17: billion savings.

1129
00:52:46,760 --> 00:52:48,440
Speaker 11: You know, we've also cleaned up the company.

1130
00:52:48,480 --> 00:52:52,000
Speaker 17: I bexited ten businesses since I've been here, and now

1131
00:52:52,040 --> 00:52:53,880
Speaker 17: we think we're finished with that phase and we just

1132
00:52:53,920 --> 00:52:56,840
Speaker 17: get focused on growing the company again to the future.

1133
00:52:57,160 --> 00:52:59,480
Speaker 17: So part of its growth, part of it's this focus

1134
00:52:59,480 --> 00:53:02,400
Speaker 17: areas across the businesses. Part of it is just increased

1135
00:53:02,440 --> 00:53:05,719
Speaker 17: operational discipline. But this quarter's results were well on our

1136
00:53:05,760 --> 00:53:06,840
Speaker 17: way to accomplishing that.

1137
00:53:07,200 --> 00:53:09,680
Speaker 18: And you talk of operations there and we didn't get

1138
00:53:09,680 --> 00:53:11,120
Speaker 18: time to talk about it, but we know that you

1139
00:53:11,160 --> 00:53:14,160
Speaker 18: do indeed have operations in Israel, and we think of

1140
00:53:14,480 --> 00:53:18,400
Speaker 18: your own employees and your infrastructure there at this time, Pat,

1141
00:53:18,440 --> 00:53:20,799
Speaker 18: So thank you very much for spending some time with

1142
00:53:20,880 --> 00:53:24,000
Speaker 18: us and walking us through your numbers. Intel CEO Pat Gelsinger.

1143
00:53:23,520 --> 00:53:27,080
Speaker 6: That you're listening to the tape cansur live program Bloomberg

1144
00:53:27,160 --> 00:53:30,759
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the

1145
00:53:30,800 --> 00:53:34,040
Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business app.

1146
00:53:34,080 --> 00:53:36,880
Speaker 6: You can also listen live on Amazon Alexa from our

1147
00:53:36,920 --> 00:53:41,640
Speaker 6: flagship New York station, Just Say Alexa play Bloomberg eleven thirty.

1148
00:53:42,920 --> 00:53:45,240
Speaker 1: At Miller Paul Sweeney live here on our Bloomberg Interactive

1149
00:53:45,280 --> 00:53:49,480
Speaker 1: Brooker's Studio streaming live on YouTube as well. I want

1150
00:53:49,480 --> 00:53:51,560
Speaker 1: to bring our next guest, Macaz. We've got some supportant

1151
00:53:51,560 --> 00:53:53,920
Speaker 1: stuff to talk about. Barry Ridholts, host of Masters in

1152
00:53:54,040 --> 00:53:56,960
Speaker 1: Business on Bloomberg Radio, is also the chief executive officer,

1153
00:53:57,520 --> 00:54:01,160
Speaker 1: a chief investment officer and founder of It's Wealth Management

1154
00:54:01,200 --> 00:54:02,239
Speaker 1: Plus Plus.

1155
00:54:02,600 --> 00:54:05,360
Speaker 2: He's a Jeep driver, which is why I thought we

1156
00:54:05,360 --> 00:54:07,120
Speaker 2: should bring him on because we're going to talk about

1157
00:54:07,239 --> 00:54:08,239
Speaker 2: what I'm driving this week.

1158
00:54:08,280 --> 00:54:09,359
Speaker 1: What are you driving this week?

1159
00:54:09,440 --> 00:54:15,279
Speaker 2: A Jeep Wrangler Rubicon three nine two, which is Does.

1160
00:54:15,239 --> 00:54:16,000
Speaker 1: That mean anything to you?

1161
00:54:16,040 --> 00:54:16,360
Speaker 11: Barry?

1162
00:54:17,480 --> 00:54:22,200
Speaker 19: Yeah, I actually have an old twenty thirteen Rubicon, which

1163
00:54:22,760 --> 00:54:26,640
Speaker 19: you know, when the apocalypse comes, that's the car I'll take.

1164
00:54:26,680 --> 00:54:32,240
Speaker 19: Because as amusing as some of the go fast cars

1165
00:54:32,280 --> 00:54:35,640
Speaker 19: that Matt and I both like, the fun thing about

1166
00:54:35,640 --> 00:54:38,680
Speaker 19: the Jeep is it's kind of unstoppable. I mean, it's

1167
00:54:38,760 --> 00:54:39,920
Speaker 19: just really, really fun.

1168
00:54:40,200 --> 00:54:42,120
Speaker 3: It's so much fun to drive.

1169
00:54:42,160 --> 00:54:44,279
Speaker 2: And actually I hadn't driven the Jeep for years and

1170
00:54:44,360 --> 00:54:45,840
Speaker 2: years when I got into the.

1171
00:54:47,200 --> 00:54:50,839
Speaker 1: Driver's seat of this beast, and it is those are

1172
00:54:50,840 --> 00:54:53,120
Speaker 1: on YouTube are seeing it right now. It is awesome

1173
00:54:53,160 --> 00:54:54,000
Speaker 1: looking it is.

1174
00:54:54,160 --> 00:54:56,880
Speaker 2: Yeah, it's I mean, I love the red one that

1175
00:54:56,920 --> 00:54:58,759
Speaker 2: they gave me in the press car. But it has

1176
00:54:58,800 --> 00:55:02,279
Speaker 2: a six point four V eight, the same engine that's

1177
00:55:02,320 --> 00:55:08,920
Speaker 2: in my Challenger, So just mountains of torque and horsepower.

1178
00:55:09,360 --> 00:55:11,839
Speaker 2: And when I got in the freeway, I just put

1179
00:55:11,880 --> 00:55:15,799
Speaker 2: the pedal down and I forgot that jeep steering it

1180
00:55:15,840 --> 00:55:17,879
Speaker 2: like you have to turn the steering wheel a few

1181
00:55:17,920 --> 00:55:21,120
Speaker 2: revolutions before the tires no that the car wants to

1182
00:55:21,200 --> 00:55:21,920
Speaker 2: change direction.

1183
00:55:22,520 --> 00:55:24,360
Speaker 3: And it's not a normal car, so it was.

1184
00:55:24,360 --> 00:55:26,200
Speaker 2: A little scary at first, but after a day of

1185
00:55:26,239 --> 00:55:28,360
Speaker 2: getting used to it, I was like, man, this is

1186
00:55:28,400 --> 00:55:31,040
Speaker 2: so much fun to drive. It's a it's a different

1187
00:55:31,040 --> 00:55:33,640
Speaker 2: experience than driving a regular car, just in the way

1188
00:55:33,680 --> 00:55:36,080
Speaker 2: you sit, the way it operates, the way it rolls

1189
00:55:36,120 --> 00:55:37,120
Speaker 2: like it's it's different.

1190
00:55:37,800 --> 00:55:40,879
Speaker 19: Plus plus it's got a drag coefficient of I think

1191
00:55:40,920 --> 00:55:41,480
Speaker 19: a hundred.

1192
00:55:41,600 --> 00:55:43,359
Speaker 3: Yeah it's a brick.

1193
00:55:43,719 --> 00:55:46,120
Speaker 19: It's a brick, right, It's it's literally that. So you

1194
00:55:46,160 --> 00:55:49,520
Speaker 19: need four hundred horse powers. And the car that I'm

1195
00:55:49,640 --> 00:55:55,200
Speaker 19: driving now could not be further opposite of the designer. Right.

1196
00:55:55,239 --> 00:55:55,960
Speaker 11: They have the.

1197
00:55:56,080 --> 00:56:00,600
Speaker 19: Nismo Z, which is a little it's the new version

1198
00:56:00,640 --> 00:56:04,200
Speaker 19: of the Z their track Nissan Z their track version

1199
00:56:04,320 --> 00:56:07,839
Speaker 19: of it. With First of all, it's very slippery. It's

1200
00:56:07,920 --> 00:56:10,759
Speaker 19: just a tear drop that slips through the air. And

1201
00:56:11,200 --> 00:56:13,960
Speaker 19: that is the polar opposite when it comes to steering,

1202
00:56:14,960 --> 00:56:19,600
Speaker 19: very little input needed, very precise steering. You used to

1203
00:56:19,640 --> 00:56:23,960
Speaker 19: have to spend multiple six figures to get steering this good.

1204
00:56:24,360 --> 00:56:27,640
Speaker 19: It's shocking how much fun this car is for.

1205
00:56:27,680 --> 00:56:29,640
Speaker 3: How yeah, I shall clarify.

1206
00:56:29,719 --> 00:56:32,480
Speaker 2: So, Barry's also test driving a car this week, and

1207
00:56:32,560 --> 00:56:35,600
Speaker 2: you actually have the pre production version of the Z.

1208
00:56:35,920 --> 00:56:36,640
Speaker 3: I drove the Z.

1209
00:56:36,920 --> 00:56:39,920
Speaker 2: We're showing pictures of the one I drove, which I

1210
00:56:39,960 --> 00:56:42,680
Speaker 2: absolutely fell in love with, although I will say that

1211
00:56:43,200 --> 00:56:45,919
Speaker 2: part of the affair that I had with this little

1212
00:56:45,960 --> 00:56:49,480
Speaker 2: Nissan Z was the manual transmission, Oh yeah, which was

1213
00:56:49,840 --> 00:56:52,200
Speaker 2: so much fun. I mean, I thought it was as

1214
00:56:52,280 --> 00:56:54,480
Speaker 2: good as easily as good as a as a nine

1215
00:56:54,520 --> 00:56:54,839
Speaker 2: on line.

1216
00:56:54,840 --> 00:56:57,000
Speaker 1: And by the way, shout out to the courtyard of

1217
00:56:57,000 --> 00:57:00,640
Speaker 1: a Bloomberg Global headquarters film. It makes a great spot

1218
00:57:00,680 --> 00:57:01,400
Speaker 1: to showcase a car.

1219
00:57:01,480 --> 00:57:05,640
Speaker 2: But Barry, so you're driving the souped up version, it's

1220
00:57:05,680 --> 00:57:08,760
Speaker 2: really a track car, the Nismo version.

1221
00:57:09,960 --> 00:57:10,759
Speaker 3: What do you think of it?

1222
00:57:10,800 --> 00:57:14,880
Speaker 19: Do you like it so about ten years ago, I

1223
00:57:15,040 --> 00:57:20,680
Speaker 19: had the original Nissan three seventy Z and that was kind.

1224
00:57:20,440 --> 00:57:21,040
Speaker 5: Of a GT.

1225
00:57:21,360 --> 00:57:25,480
Speaker 19: It was a stick shift, beautiful car, a little sexier

1226
00:57:25,520 --> 00:57:28,840
Speaker 19: than this version, but it was a GT. It's kind

1227
00:57:28,880 --> 00:57:31,760
Speaker 19: of big, kind of heavy in about three hundred and

1228
00:57:31,800 --> 00:57:32,840
Speaker 19: thirty horse power.

1229
00:57:33,640 --> 00:57:36,160
Speaker 1: This car looks much.

1230
00:57:35,960 --> 00:57:39,120
Speaker 19: Better in person than it does in the photos. It's

1231
00:57:39,320 --> 00:57:43,920
Speaker 19: very purpose built, it's very focused. As much as I

1232
00:57:44,280 --> 00:57:48,640
Speaker 19: prefer a stick shift, this four hundred and twenty horse

1233
00:57:48,680 --> 00:57:54,800
Speaker 19: power version with the nine speed dual clutch transmission. Every

1234
00:57:54,800 --> 00:57:57,720
Speaker 19: time you step on the gas it's like you poked

1235
00:57:57,800 --> 00:58:02,080
Speaker 19: a hive of angry hornets and it it's just a

1236
00:58:02,120 --> 00:58:06,840
Speaker 19: lot of fun and for honestly air for normally this

1237
00:58:06,920 --> 00:58:11,040
Speaker 19: sort of performance. Sixty thousand dollars, you're looking at use

1238
00:58:11,160 --> 00:58:14,760
Speaker 19: cars a new version of this. I actually took the

1239
00:58:14,800 --> 00:58:19,360
Speaker 19: car over to my local detail wrap shop that does

1240
00:58:20,000 --> 00:58:22,800
Speaker 19: you know, does car washes and raps and things like that.

1241
00:58:23,760 --> 00:58:25,960
Speaker 1: The PAFs when nuts.

1242
00:58:26,040 --> 00:58:28,880
Speaker 19: They lost their mind. First of all, this is like

1243
00:58:29,240 --> 00:58:33,840
Speaker 19: there are none in the country. I mean, I'm I've

1244
00:58:33,880 --> 00:58:36,720
Speaker 19: been very careful because I don't want to damage the

1245
00:58:36,800 --> 00:58:42,840
Speaker 19: only Nismo Z in the United States. But second, you

1246
00:58:42,960 --> 00:58:46,919
Speaker 19: get up to extra legal speeds quite rapidly, and.

1247
00:58:46,840 --> 00:58:48,640
Speaker 3: So and the sound eggs you on.

1248
00:58:49,040 --> 00:58:50,600
Speaker 2: So I got I drove that for a couple of

1249
00:58:50,680 --> 00:58:53,400
Speaker 2: days before Barry got in it, and I the one

1250
00:58:53,440 --> 00:58:56,400
Speaker 2: thing is the sound makes you want to go faster,

1251
00:58:56,720 --> 00:58:58,160
Speaker 2: no matter how fast you're going.

1252
00:58:58,560 --> 00:59:00,000
Speaker 3: I love the sound of the engine.

1253
00:59:00,360 --> 00:59:00,600
Speaker 6: Yeah.

1254
00:59:00,680 --> 00:59:03,880
Speaker 19: Yeah, it's angry and it's it urges you to go,

1255
00:59:04,480 --> 00:59:06,760
Speaker 19: and it is you know, when you see the pictures,

1256
00:59:06,760 --> 00:59:08,800
Speaker 19: it kind of looks a little plain, and then you

1257
00:59:08,840 --> 00:59:11,440
Speaker 19: see it in person and it's like, oh, this is

1258
00:59:11,520 --> 00:59:16,400
Speaker 19: really a very handsome car. I found it very planted

1259
00:59:16,640 --> 00:59:21,360
Speaker 19: and very not a punishing rod. Typically a track car,

1260
00:59:21,680 --> 00:59:24,840
Speaker 19: you know, you feel the lines on the highway. This

1261
00:59:25,320 --> 00:59:27,760
Speaker 19: I drove home and bumpered a bumper traffic from New

1262
00:59:27,840 --> 00:59:30,800
Speaker 19: York City for about an hour and a half and

1263
00:59:30,840 --> 00:59:34,520
Speaker 19: it was not uncomfortable. You put it in standard mode,

1264
00:59:34,520 --> 00:59:37,960
Speaker 19: in regular mode and it's sort of sedate, and then

1265
00:59:38,000 --> 00:59:40,880
Speaker 19: you put it into sport or Sport plus and you know,

1266
00:59:40,920 --> 00:59:44,680
Speaker 19: you awaken the demons within. It's a lot of car,

1267
00:59:44,880 --> 00:59:46,280
Speaker 19: and it's a lot of car for the money.

1268
00:59:46,360 --> 00:59:46,600
Speaker 5: Yeah.

1269
00:59:46,640 --> 00:59:49,160
Speaker 2: So that so the Nissan Z I think we can

1270
00:59:49,240 --> 00:59:53,240
Speaker 2: agree is a great bargain and I think it's a

1271
00:59:53,280 --> 00:59:56,320
Speaker 2: portie Caman competitor easy even though the engines in the

1272
00:59:56,320 --> 00:59:57,120
Speaker 2: front not in the middle.

1273
00:59:57,680 --> 01:00:01,520
Speaker 19: They they describe it more as a Mustang or a

1274
01:00:02,320 --> 01:00:03,440
Speaker 19: narrow Challenger.

1275
01:00:04,720 --> 01:00:05,480
Speaker 1: It's a race car.

1276
01:00:05,600 --> 01:00:07,920
Speaker 2: It's not a muscle car, you know, and those those

1277
01:00:08,000 --> 01:00:10,280
Speaker 2: I know have evolved into race cars, but they're still

1278
01:00:10,400 --> 01:00:13,400
Speaker 2: mus Camaro certainly still a muscle car very much. But

1279
01:00:13,640 --> 01:00:16,080
Speaker 2: I want to goin out though, Barry that the Jeep,

1280
01:00:16,200 --> 01:00:19,920
Speaker 2: on the other hand, it is not a bargain in

1281
01:00:20,000 --> 01:00:22,919
Speaker 2: terms of the price. So the Jeep Wrangler Rubicon three

1282
01:00:23,040 --> 01:00:29,000
Speaker 2: ninety two ninety three thousand dollars to start, that's before

1283
01:00:29,040 --> 01:00:30,040
Speaker 2: a delivery fee.

1284
01:00:30,320 --> 01:00:31,760
Speaker 1: That's not a typical Jeep bud.

1285
01:00:32,080 --> 01:00:33,360
Speaker 3: It's so expensive.

1286
01:00:33,560 --> 01:00:35,480
Speaker 2: And what I wanted to ask you about, Barry, what

1287
01:00:35,480 --> 01:00:37,520
Speaker 2: do you think about this inflation, which, by the way,

1288
01:00:37,720 --> 01:00:40,520
Speaker 2: it's not going to turn around, but Jeep, it to

1289
01:00:40,560 --> 01:00:43,160
Speaker 2: me is even it's another level on the kind of

1290
01:00:43,440 --> 01:00:45,880
Speaker 2: a new car price inflation that we've seen. They're trying

1291
01:00:45,920 --> 01:00:49,640
Speaker 2: to do something I feel like from Stilanti's headquarters, they're

1292
01:00:49,640 --> 01:00:52,040
Speaker 2: trying to make Jeep into a luxury brand.

1293
01:00:53,040 --> 01:00:58,200
Speaker 19: So you know, after the pandemic, when you went out

1294
01:00:58,240 --> 01:01:05,800
Speaker 19: and looked at various sports cars, ferraris, Porsches, things like that.

1295
01:01:06,440 --> 01:01:09,560
Speaker 19: You what you ended up having is used cars were

1296
01:01:09,600 --> 01:01:13,120
Speaker 19: going for the same or more than new cars. Very

1297
01:01:13,200 --> 01:01:16,680
Speaker 19: much a pandemic related event. But go back to the

1298
01:01:16,920 --> 01:01:19,360
Speaker 19: ten to fifteen years before the pandemic.

1299
01:01:19,920 --> 01:01:20,600
Speaker 1: You look at a.

1300
01:01:20,560 --> 01:01:24,240
Speaker 19: Brand new twenty fourteen Jeep Rubicon, you know, gussied up

1301
01:01:24,520 --> 01:01:27,479
Speaker 19: about forty grand. You look at a one year old

1302
01:01:27,720 --> 01:01:33,320
Speaker 19: Jeep Rubicon about forty grand. So jeeps are notorious for

1303
01:01:33,560 --> 01:01:36,680
Speaker 19: holding their value. And this isn't you know you want

1304
01:01:36,720 --> 01:01:40,760
Speaker 19: a GT three nine to eleven. They only make so

1305
01:01:40,840 --> 01:01:42,880
Speaker 19: many of them. They're cranking out a lot of Jeeps,

1306
01:01:43,320 --> 01:01:47,440
Speaker 19: and despite that, even before the pandemic, they weren't easy

1307
01:01:47,480 --> 01:01:49,840
Speaker 19: to get. There were no discounts to be found. There

1308
01:01:49,840 --> 01:01:53,680
Speaker 19: are no bargains in the used car lots of Jeeps.

1309
01:01:53,960 --> 01:01:57,400
Speaker 19: So we'll see if the new Bronco and some of

1310
01:01:57,440 --> 01:02:00,480
Speaker 19: the other competitors are going to take a little a

1311
01:02:00,560 --> 01:02:02,680
Speaker 19: little bit of market share away from them, and maybe

1312
01:02:02,720 --> 01:02:05,880
Speaker 19: the prices will shift. But that was always shocking my

1313
01:02:06,360 --> 01:02:11,840
Speaker 19: twenty thirteen Rubicon. I'm comfortable buying a salvage title. I

1314
01:02:11,840 --> 01:02:14,240
Speaker 19: don't recommend people buy a savage title.

1315
01:02:14,200 --> 01:02:15,160
Speaker 1: But it was a flood car.

1316
01:02:15,240 --> 01:02:19,080
Speaker 19: I just replaced all the electronic harnesses and for half

1317
01:02:19,120 --> 01:02:22,320
Speaker 19: of what I would normally pay for a used Jeep,

1318
01:02:22,680 --> 01:02:25,439
Speaker 19: I had got a ten thousand mile Jeep. I mean

1319
01:02:25,480 --> 01:02:27,920
Speaker 19: it was orange or it's still orange. I just got

1320
01:02:27,960 --> 01:02:30,400
Speaker 19: to get used to that color. But that's the thing

1321
01:02:30,440 --> 01:02:34,240
Speaker 19: about Jeep. It's a cult and people love them.

1322
01:02:34,240 --> 01:02:36,600
Speaker 1: They love all right, Barry awesome stuff, Barry it Halts,

1323
01:02:36,600 --> 01:02:39,520
Speaker 1: host of Masters in Business on Bloomberg Radio. What in

1324
01:02:39,560 --> 01:02:40,840
Speaker 1: the world is Matt Miller driving?

1325
01:02:40,880 --> 01:02:41,000
Speaker 3: Heat?

1326
01:02:41,040 --> 01:02:43,080
Speaker 1: Drives pretty much anything he wants, Folks, Let's be honest.

1327
01:02:45,880 --> 01:02:48,960
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can

1328
01:02:49,000 --> 01:02:52,760
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever

1329
01:02:52,840 --> 01:02:54,360
Speaker 2: podcast platform you prefer.

1330
01:02:54,720 --> 01:02:55,520
Speaker 1: I'm Matt Miller.

1331
01:02:55,800 --> 01:02:59,280
Speaker 2: I'm on Twitter at Matt Miller nineteen seventy three and

1332
01:02:59,320 --> 01:03:00,000
Speaker 2: not Falseweny.

1333
01:03:00,040 --> 01:03:02,680
Speaker 1: I'm on Twitter at pt Sweeney Before the podcast. You

1334
01:03:02,680 --> 01:03:06,120
Speaker 1: can always catch us worldwide at Bloomberg Radio.