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Speaker 2: Tesla's going to keep cutting prices to stoke demand, even
Speaker 2: after markdowns early this year took a significant toll of profitability.
Speaker 2: We'll get into their operating margin. You know you've been
Speaker 2: hearing about that a lot. That news was last night
Speaker 2: and then this morning, SpaceX attempting to send its starship
Speaker 2: system into space and then it exploded.
Speaker 3: We have some.
Speaker 2: Details on that, so let's get into it with our
Speaker 2: Bloomberg News EV reporter Sean o'caine with us on zoom
Speaker 2: into Austin, Texas. And then also with us is Bloomberg
Speaker 2: News Space reporter Lauren Greshe's on site in Texas near
Speaker 2: where the rocket exploded earlier today. So our thanks to
Speaker 2: both of you.
Speaker 3: Sean. I do want to start with.
Speaker 2: You, though, because the news out of Tesla last night,
Speaker 2: what we got in the earnings release and then what
Speaker 2: Elon had to say on the call with analysts, definitely
Speaker 2: move the stock price. What do you think here we
Speaker 2: are what twenty four hours in? Really is the key
Speaker 2: takeaway from what Tesla had to say.
Speaker 4: Well, I mean, the bottom line is that the automotive
Speaker 4: gross margins when you pull out leases and you pull
Speaker 4: out regulatory credits, were under the target that Tesla's CFO
Speaker 4: Zach Kirkhorn, had forecasted on the last call back in January.
Speaker 4: He basically said, hey, you know, because that was right
Speaker 4: around they had started making the really drastic cuts. They
Speaker 4: had already implemented price cuts at the end of last
Speaker 4: year in anticipation of, you know, all the questions about
Speaker 4: who was going to qualify for IRA credits and whatnot,
Speaker 4: and so he had said, hey, you know, we have
Speaker 4: industry leading margins. We're going to be able to take
Speaker 4: a bite out of those with some of these cuts
Speaker 4: to keep demand up, and we don't think it's going
Speaker 4: to go under twenty percent. But after they released the
Speaker 4: numbers last night, it seems like most analysts were able
Speaker 4: to work out that automotive gross margin margins excluding those
Speaker 4: items were closer to eighteen percent. So even he was
Speaker 4: willing to admit on the call that that was lower
Speaker 4: than they expected. And that was the result of continuing
Speaker 4: to make cuts from the time of the last call
Speaker 4: to now, and also some other issues like some changes
Speaker 4: to the warranty on older vehicles and things like that.
Speaker 4: So I think that's the biggest thing. I think the
Speaker 4: other biggest thing is that it doesn't sound like they're done.
Speaker 4: Elon Musk seems like he's eager to take advantage of
Speaker 4: the fact that they still have more margin to go
Speaker 4: that they could eat into if they wanted to continue
Speaker 4: to drop prices.
Speaker 5: So, Sean, can you talk to me about that automotive
Speaker 5: gross margin number because it typically is just included in
Speaker 5: the earnings report, but analysts had to crunch the numbers
Speaker 5: this time around. Was that notable to you?
Speaker 4: Yeah, that was the first thing that jumped out of
Speaker 4: me because it was the first thing I was looking for,
Speaker 4: like many other.
Speaker 6: People searching for it, right Yeah.
Speaker 4: Yeah, it's usually right up top and that first entry
Speaker 4: of the earnings report, and so it was very obvious
Speaker 4: right away that it wasn't going to be there and
Speaker 4: that it was going to take a little bit of math.
Speaker 4: I'm not terribly surprised at that. I mean, one of
Speaker 4: the things that Tesla's c said last quarter was that.
Speaker 4: You know, he gave those predictions about a twenty percent
Speaker 4: automotive gross margin and a forty seven thousand average selling
Speaker 4: price across all their models, and he was sort of
Speaker 4: forecasting that. But he also said right after that, Hey,
Speaker 4: just so you know, we care more internally about the
Speaker 4: operating margin. We hope that's something that you'll consider as
Speaker 4: you go forward. So that they deemphasized automotive gross margin,
Speaker 4: I guess, to put it nicely, didn't really come as
Speaker 4: a surprise, although his favorite metric, operating gross margin was
Speaker 4: down pretty pretty severely, down to eleven point four percent,
Speaker 4: when a year ago it was in the nineteen So
Speaker 4: they call that a manageable decline. I think a lot
Speaker 4: of other people were sort of trying to factor that
Speaker 4: in today as we saw the stock drop.
Speaker 1: A little bit.
Speaker 2: Yeah absolutely, I mean still up thirty two percent this year,
Speaker 2: but definitely a big haircut. Hey, Lauren, come on in
Speaker 2: on the story of all things elon Starlink.
Speaker 3: What exactly happened?
Speaker 7: Right? So it's the starship spacecraft.
Speaker 3: The starships.
Speaker 7: It's sorry, yeah, yeah, no, no, it's it's actually quite
Speaker 7: confusing because they put the word star in front of everything,
Speaker 7: I think. But yes, it's Starship and it's their deep
Speaker 7: based rocket that they're hoping to use to send humans
Speaker 7: to deep space like the Moon in Mars, and they
Speaker 7: are They tried to launch it on its first test
Speaker 7: launch today. Unfortunately, you know, it did it did achieve
Speaker 7: some air but ultimately, uh had it did explode at
Speaker 7: about four minutes into the flight. So you know, they
Speaker 7: definitely got a lot of data from it, but you know,
Speaker 7: didn't in the way they.
Speaker 3: Expected exploded or they exploded it.
Speaker 7: So they exploded it. So we just learned recently. We
Speaker 7: were we were questioning for a minute whether or not
Speaker 7: it exploded on its own, maybe from aerodynamics, you know,
Speaker 7: pressures or forces on the vehicle. But it turns out
Speaker 7: that once the Starship rocket was going off course, it
Speaker 7: was if you looked on the live stream, you could
Speaker 7: see that it was kind of twirling off for tumbling
Speaker 7: wildly in the sky. And then eventually SpaceX revealed that
Speaker 7: they activated the flight termination system, which is used to
Speaker 7: blow up the rocket so that it doesn't it ensures
Speaker 7: that it does not harm any uninvolved public or property.
Speaker 5: Well, Lauren, I want to stick on some of the
Speaker 5: good news that we got for SpaceX today, and you
Speaker 5: have an amazing piece on this Everyone should go read it.
Speaker 5: I was blown away that you were able to change
Speaker 5: the intro so quickly based on the news because it's
Speaker 5: such a great piece on the terminal and online. Talk
Speaker 5: to me about the winds for SpaceX today.
Speaker 7: Absolutely, and you know what that is just what space entails, right,
Speaker 7: there's always winds that you have to always be flexible
Speaker 7: because you never know how these things are going to
Speaker 7: turn out. But yes, some great wins today. I mean,
Speaker 7: this was the first test flight of the fully stacked
Speaker 7: Starship rocket. So Starship consists of two main parts of
Speaker 7: the Starship vehicle which carries the cargo, the satellite, the people.
Speaker 7: That's the top of the rocket, and then the bottom
Speaker 7: of the rocket is the super heavy booster and that's
Speaker 7: what's needed. It has thirty three raptor engines on a
Speaker 7: space and it's used to break free of Earth's gravity
Speaker 7: and propel Starship to space. And this was the first
Speaker 7: time both of those pieces flew together, stacked on top
Speaker 7: of each other, on top of each other, so that
Speaker 7: is a major win for SpaceX. They were able to
Speaker 7: actually clear the launch pad, achieve the highest helt seat
Speaker 7: I think they've ever done with this vehicle, and they
Speaker 7: were actually able to show that super heavy can fly.
Speaker 7: So unfortunately they had some engine out issues. You know,
Speaker 7: not all thirty three engines actually ignited, and some of
Speaker 7: them flamed out during the flight. And then obviously there
Speaker 7: are some cold control issues in the sky. But definitely
Speaker 7: a major win and SpaceX is thinking it a major win.
Speaker 7: I don't know if you can hear behind me, but
Speaker 7: I'm out at a party where everyone is celebrating right
Speaker 7: now because they are so happy that this thing actually
Speaker 7: left the launch pad. So it's actually SpaceX is definitely
Speaker 7: seeing it as a win. For sure. They can use
Speaker 7: the data to incorporate it into future flight for sure.
Speaker 3: All I could think of is like, what did that cost?
Speaker 2: I'm going to go back to the business side of
Speaker 2: the story, Sean, come on back in here. What other
Speaker 2: color can you give us in terms of what we
Speaker 2: heard and what kind of elon we got on the
Speaker 2: analyst call?
Speaker 8: Uh?
Speaker 4: Well, you know it was.
Speaker 8: Uh.
Speaker 4: I think it's funny that we get him every time now,
Speaker 4: despite him saying a couple a couple of years ago
Speaker 4: that he was going to stop doing these things, But
Speaker 4: you know, he still seems pretty obviously involved in the
Speaker 4: day to there, day to day there, despite having a
Speaker 4: lot on his plate this week, whether that's the business
Speaker 4: of Twitter and trying to keep that afloat, and also
Speaker 4: launching a piece of technology into this guy that had
Speaker 4: never launched before in the super Heavy Booster. So you know,
Speaker 4: it was it was interesting to hear him talk. I
Speaker 4: think the thing that really stuck out to me the
Speaker 4: most on the call and from Elon himself, was that
Speaker 4: in talking about the ability to eat into those margins
Speaker 4: as far as keeping competitive pressure up, he's talking about
Speaker 4: he thinks Too could actually go to zero profit on
Speaker 4: its cars, which is an outrageous thing to say because
Speaker 4: he so fully believes in the ability of his company
Speaker 4: to deliver on this promise that they've been promising for
Speaker 4: years of being able to make its cars fully autonomous,
Speaker 4: that he thinks they could actually sell these things at
Speaker 4: a wash in the near term and recoup any of
Speaker 4: that lost profit down the road if they were able
Speaker 4: to roll out full self driving as an actual feature
Speaker 4: that people want to pay for and that is so revolutionary.
Speaker 5: That it would see self driving.
Speaker 3: Like, come on, I.
Speaker 4: Mean a lot of people. A lot of people take
Speaker 4: that same approach. You know, I think we want to
Speaker 4: know for sure that it's possible. And he even explained
Speaker 4: last night he used it as a two step forward,
Speaker 4: one step back. Problems at the state we got to run.
Speaker 3: Sean and Lauren, thank you so much. This is Bloomberg Radio.
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Speaker 2: So another decision coming tomorrow on abortion pill limits as
Speaker 2: the Supreme Court extended a temporary hold on new restrictions
Speaker 2: on those pills, those restrictions imposed by a federal judge
Speaker 2: in Texas.
Speaker 5: And now justices have until tomorrow to decide what to
Speaker 5: do with this case. This comes after the Biden administration
Speaker 5: and dan Co Laboratories, which is the maker of the drug,
Speaker 5: requested that any restrictions get put on hold. While this
Speaker 5: legal battle continues a lot of moving parts. So here
Speaker 5: to discuss the impact of that battle is doctor Suzanne Bell,
Speaker 5: Assistant professor in Population, Family and Reproductive Health at Johns
Speaker 5: Hopkins Bloomberg School of Public Health, which I should mention
Speaker 5: as supported by Michael R. Bloomberg, founder of Bloomberg LP
Speaker 5: and Bloomberg Philanthropies. She's on zoom with us from Baltimore.
Speaker 3: Doctor Bell.
Speaker 5: Great to speak with you, and thanks for being here.
Speaker 5: I know we've been back and forth on this case
Speaker 5: for a couple of weeks, but what do we know
Speaker 5: right now about the impact that it's already had in
Speaker 5: terms of access to this pill?
Speaker 9: Yeah, so right now, I'm just introduce using a lot
Speaker 9: of uncertainty in the states where abortion is still legal
Speaker 9: and providers are of just in an awaiting game right
Speaker 9: now for this decision, with a lot of potential clinical
Speaker 9: implications around the provision of medication abortion, which is currently
Speaker 9: more than half of abortions in the US, What does.
Speaker 2: It mean if women don't have access to this pill
Speaker 2: going forward?
Speaker 3: Ultimately?
Speaker 9: Yeah, I mean, I think, much to the chagrin of
Speaker 9: the people who brought this cases, will not stop medication
Speaker 9: abortions from occurring. It is just really another attempt to
Speaker 9: interfere with the delivery of evidence based health care and
Speaker 9: control pregnant people's bodies. Providers will instead be forced to
Speaker 9: use a misoprostal only regimen instead of the more effective
Speaker 9: combined regimen with me for pristone, which simply means that
Speaker 9: pregnant people are going to be exposed to more uncomfortable
Speaker 9: and potentially severe side effects that are very uncomfortable. But ultimately,
Speaker 9: this is an incredibly safe and effective regimen. It's really
Speaker 9: just a matter of interfering with the science when in fact,
Speaker 9: we have evidence for more than one hundred peer reviewed,
Speaker 9: rigorous studies showing that this medicine in combination with me
Speaker 9: so prostal is highly effective and safe for terminating pregnancies.
Speaker 5: Okay, talk to me about the evidence here. I'm so
Speaker 5: glad you bring this up because one of the nuances
Speaker 5: of this case for those of us who are not
Speaker 5: doctors is this question about FDA approval that the judge
Speaker 5: in Texas brought up. Can you explain that to me?
Speaker 5: Is there any reason from your perspective to be concerned
Speaker 5: about the FDA approval of the abortion pill?
Speaker 10: Absolutely not.
Speaker 9: You know, the FDA is a very conservative, independent agency
Speaker 9: full of scientists that know how to evaluate the science,
Speaker 9: and we already had almost two about fifteen fourteen years
Speaker 9: of approval in France, where the medicine was developed before
Speaker 9: the FDA even approved it in two thousand and Since then,
Speaker 9: we have approximately eighty countries around the world who have.
Speaker 10: Also approve this medicine.
Speaker 9: We have decades of safety and effectiveness evidence from around
Speaker 9: the globe indicating that this is an appropriate approval that
Speaker 9: the FDA provided more than twenty years ago. And you know,
Speaker 9: in the intervening years in the US, hundreds of thousands,
Speaker 9: if not millions, have used this drug as part of
Speaker 9: their termination of a pregnancy. And so there's really no
Speaker 9: legitimate claim here around safety and a lack of evidence
Speaker 9: around me for pristom.
Speaker 2: So what are the conversations you guys have been having
Speaker 2: at Johns Hopkins around this.
Speaker 10: I mean, I think it's really frustrating.
Speaker 9: There's a lot of frustration among clinicians, among social scientists
Speaker 9: doing work in this area because it's going to it's
Speaker 9: really just another way in which there are increasing barriers
Speaker 9: to the ability for people to self determine and you know,
Speaker 9: actualize their reproductive goals. This is just going to be
Speaker 9: another impediment, and people will work tirelessly to reduce the
Speaker 9: impact act of those barriers. But really, what we know
Speaker 9: from the evidence is that, you know, the more barriers
Speaker 9: you put in place, the more disadvantaged populations in particular
Speaker 9: are negatively impacted by them, and that is going to
Speaker 9: have you know, significant long term health, social, financial implications
Speaker 9: for the people who ultimately aren't able to obtain a
Speaker 9: wanted abortion, whether it be medication or procedural.
Speaker 10: In light of the fact that this is happening in
Speaker 10: the backdrop of.
Speaker 9: Dobs and you know, twenty six states banning or severely
Speaker 9: restricting abortion in those parts of the country.
Speaker 2: So Zan, let me just jump in and you say
Speaker 2: that it'll it'll you know, for those who might it
Speaker 2: might be difficult for them to obtain an abortion or
Speaker 2: I'm just curious, though, if the one pill is still
Speaker 2: available to everyone, how does that then maybe appease some of.
Speaker 3: The impact on those numbers.
Speaker 9: It will definitely reduce the likelihood that this is going
Speaker 9: to negate one of the options for people that are
Speaker 9: seeking abortion. I think it's just to situate this in
Speaker 9: the context of the much broader abortion landscape that we're
Speaker 9: sitting in right now in the US. This is just
Speaker 9: a way in which you will further you know, eroade
Speaker 9: access to safe, effective medication abortion. Meso prostal is the
Speaker 9: mesa prosta only regimen, like I mentioned, is still incredibly safe,
Speaker 9: slightly less effective, so you will expose people to slightly
Speaker 9: more you know, potential for an incomplete abortion, and so
Speaker 9: it's you know, I think the claim in the lawsuit
Speaker 9: brought is really a farce because they claim to be
Speaker 9: concerned about the discomfort of you know, medication abortion and
Speaker 9: the risks associated with medication abortion and not wanting to
Speaker 9: treat people in an emergency room that are suffering from
Speaker 9: medication abortion complications when in fact, less than half of
Speaker 9: a percent of all medication abortions result in a complication
Speaker 9: requiring you know, hospital based care.
Speaker 10: It's incredibly safe. And in addition to that, I think.
Speaker 9: It completely negates the fact that pregnancy is incredibly risky.
Speaker 9: The risk of maternal death for a person that whose
Speaker 9: pregnancy and then alive birth is fifteen times greater than
Speaker 9: that of safe abortion.
Speaker 5: Wow, it's such an important data point. And I also
Speaker 5: heard you mentioned earlier which I hadn't heard before, that
Speaker 5: doubling up the second dose mesa prostal We know that
Speaker 5: that's a backup plan if this does go through, But
Speaker 5: is it more painful for the patient. Does it cause
Speaker 5: other potential difficulties beyond potentially not being as effective. Does
Speaker 5: it also cause potentially more discomfort than the current regimen.
Speaker 10: Yeah, that's exactly the case.
Speaker 9: It's really that, you know, the MESA prosta only regimen
Speaker 9: is used actually in many parts of the world where
Speaker 9: mey for pristone is not registered and is still effective
Speaker 9: and safe. It is a who recommended means of safely
Speaker 9: terminating a pregnancy, but it causes more uncomfortable side effects nausea, vomiting,
Speaker 9: more severe cramping. So it's really just unnecessarily exposing ignant
Speaker 9: people to more discomfort and more severe side effects diarrhea, chills,
Speaker 9: and intense nausea that could be avoided if first taking
Speaker 9: the mefa pristone tablet followed by a lower dose of missoprostle.
Speaker 2: I'm going to steal a question that Maddie actually had
Speaker 2: in our notes, and this is if you could testify,
Speaker 2: what would you want to tell Scotus about the impact
Speaker 2: of a move to ban something like the abortion pill,
Speaker 2: Because I think it's just a smart, super smart question.
Speaker 10: Yeah.
Speaker 9: Yeah, well, thankfully I am not on the spot there
Speaker 9: in krond of Scotis, but you know, I think as
Speaker 9: a as a researcher, as a scientist, I think it's
Speaker 9: really important to respect and acknowledge the science. And right
Speaker 9: now the evidence is unambiguous. We have more than one
Speaker 9: hundred rigorously conducted scientific studies from countries all over the
Speaker 9: world over the past three decades plus demonstrating the safety
Speaker 9: and effectiveness of mefa priystone for medication abortion. So this
Speaker 9: decision from Casmark in Texas was clearly ideological, ideologically motivated,
Speaker 9: and there's, like I said, rely no ambiguity around this.
Speaker 10: I think it would be a real travesty to have the.
Speaker 9: Courts intervene with this independent agency's ability to approve and
Speaker 9: regulate medicines from the perspective of the science here in
Speaker 9: the US and.
Speaker 5: In like thirty seconds here, Are you concerned at all
Speaker 5: about the implications this case could have for the FDA
Speaker 5: moving forward at all?
Speaker 9: I mean, yes, I think this is a really dangerous
Speaker 9: precedent to establish that a court and any entity could
Speaker 9: bring a case against a drug maker against a specific
Speaker 9: medicine that has gone through the rigorous vetting.
Speaker 10: Process that the FDA already has, that.
Speaker 9: Is genuinely effective and conservative and especially with a drug
Speaker 9: like NIFA pristone that actually has a higher standard of
Speaker 9: safety and efficacy. So I think it would be really
Speaker 9: dangerous for the courts to move in that direction.
Speaker 2: Well, so appreciate getting some time with you and just
Speaker 2: laying it out from a scientific and medical perspective and
Speaker 2: understanding potentially the impact on Suzanne. Thank you so much,
Speaker 2: doctor Suzanne Bell. She's assistant professor in Population, Family and
Speaker 2: Reproductive Health at Johns Hopkins Bloomberg School of Public Health.
Speaker 2: As you know, supported by Michael R. Bloomberg, founder of
Speaker 2: Bloomberg LP and Bloomberg Philanthropies. Doctor Bell joining us via
Speaker 2: zoom from Baltimore.
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Speaker 1: Just Say Alexa playing Bloomberg eleven thirty.
Speaker 2: Remember when every day it felt like we were talking about
Speaker 2: another slew of companies going in public.
Speaker 3: I mean it's a really different environment.
Speaker 5: Yeah, it feels like those days are feeling foggier and foggier,
Speaker 5: both on the IPO side and the SPACs side.
Speaker 2: Yeah, absolutely right, and a lot of it is to
Speaker 2: do with, you know, what's gone on in rates and
Speaker 2: just a market that's a little bit more nervous. So
Speaker 2: let's get to it. And I was looking at actually
Speaker 2: the Renaissance IPO Index. It's up about fourteen percent year
Speaker 2: to date, so that was kind of interesting despite some
Speaker 2: of the hesitation.
Speaker 3: So you want to get to the IPO market, let's
Speaker 3: get to it.
Speaker 5: We've got Rachel Garing Ey, America's IPO leader, joining us
Speaker 5: on Zoom from Nashville, Tennessee. Rachel, thank you so much
Speaker 5: for joining us. I know that EY recently released it's
Speaker 5: Global IPO Trends Report for the first quarter of twenty
Speaker 5: twenty three. Broad Picture here. What's the headline from the report?
Speaker 11: Well, you know, happy to be here and thank you
Speaker 11: for having me. And just as the two of you
Speaker 11: are commenting a moment ago, definitely it's subdued out there,
Speaker 11: to say the least. We ended the quarter with thirty
Speaker 11: three IPOs in the US, raising roughly two and a
Speaker 11: half billion in proceeds. Another eleven companies have since come
Speaker 11: to market since the end of the quarter. So generally
Speaker 11: we're in line with this time last year, but well
Speaker 11: below levels we've seen in comparable periods over the past decade.
Speaker 3: I feel like there's a lot of enthusiasm.
Speaker 2: I feel like there I haven't I can't remember the
Speaker 2: last time there was anything in a conversation about, oh,
Speaker 2: we're looking forward to these companies going public. What's the
Speaker 2: outlook rachel or what kind of visibility do you have
Speaker 2: about maybe what's coming, you know, in the later half
Speaker 2: of the year and maybe into twenty twenty four.
Speaker 11: Yeah, you know, there, I would say there's definitely continued
Speaker 11: strong interest from companies, so that the pipeline, the shadow
Speaker 11: pipeline that is building, there's you know, points of optimism there.
Speaker 11: But in terms of the immediate you know, coming into
Speaker 11: Q two, I'm not predicting a whole lot of additional
Speaker 11: activity just given the macroeconomic factors that is impacting all
Speaker 11: companies out there, and it's going to continue. You mentioned
Speaker 11: nervousness that's certainly still their lack of stability and so forth.
Speaker 11: So companies are definitely in that wait and see waiting
Speaker 11: on the sidelines, waiting for the markets to reopen, but
Speaker 11: certainly several companies out there who are readily preparing for
Speaker 11: that opportunity.
Speaker 5: So where where do you see the biggest, you know,
Speaker 5: factor for optimism when it comes to the I p
Speaker 5: O market? And when do you anticipate that optimism kicking
Speaker 5: back in.
Speaker 11: Yeah, great question, And I wouldn't say there's one single factor.
Speaker 11: There's there's several factors that we are keeping a close
Speaker 11: look and following closely. You know, inflation readings definitely one.
Speaker 11: Interest rate hikes is as you previously mentioned, and where
Speaker 11: the FED stands on interest rates. Market volatility, you know
Speaker 11: that that's you know, been working in our favor. Frankly,
Speaker 11: you know in Q one we had three days in
Speaker 11: the quarter where the VIX was over twenty five. You
Speaker 11: know that's in that kind of no go zone, if
Speaker 11: you will, Whereas you know, thirty days this time last
Speaker 11: year with the VIX over twenty five. So there's promising
Speaker 11: signs relative to volatility. But we still need, you know,
Speaker 11: continued stability, their growth, stock performance needs to continue to
Speaker 11: improve so that it starts attracting investors back to the
Speaker 11: IPO product.
Speaker 2: Yeah, it's interesting. I wonder in terms of breaking it
Speaker 2: down a little bit more, Either geographically or bisector. How
Speaker 2: does that break out?
Speaker 11: You know, right now, it's a lot of small numbers
Speaker 11: to be frank, I mean the you know, in terms
Speaker 11: of volumes and then proceeds raised, you know, with those
Speaker 11: numbers I was sharing earlier, eight of those deals were
Speaker 11: IPOs raising over fifty million, So that just gives you
Speaker 11: a context of the size of the deals happening right now,
Speaker 11: very small. Fifteen of the deals were companies based in
Speaker 11: the US, so large majority coming in from outside of
Speaker 11: the US. So the deals right now are small. They
Speaker 11: are led by, you know, continued to be led by
Speaker 11: tech and life science sectors, but they're just not the
Speaker 11: large deals that we're used to seeing. Seeing some optimism
Speaker 11: and some uptick in the energy sector, industrials, consumer products.
Speaker 11: So it's you know, it's kind of across various sectors
Speaker 11: that we're seeing the activity right now.
Speaker 5: Yeah, well, Rachel, I was going to stick on the
Speaker 5: global question for a second because I'm just back from Dubai,
Speaker 5: where every day there was a big story about IPOs
Speaker 5: because you don't pay tax.
Speaker 6: Is there.
Speaker 5: It's big on oil and there's a lot of opportunity
Speaker 5: and the interest rate environment is completely different. Are you seeing,
Speaker 5: big picture and longer term that the IPO market turns
Speaker 5: two countries like that, two cities like that, and out
Speaker 5: of the US, where it's just a little bit more
Speaker 5: volatile and there are more headwinds to deal with.
Speaker 11: You know, despite the headwinds we're facing here in the US,
Speaker 11: it's still very much an attractive market. So the quietness
Speaker 11: that we're seeing in the experiencing rates now, hopefully we
Speaker 11: start to you know, see some of that unlocking and
Speaker 11: more activity here in the US late this year is
Speaker 11: our hope, certainly into twenty twenty four. In the meantime,
Speaker 11: are we going to see some you know, promising deals
Speaker 11: outside of the US and some major markets. Absolutely, But
Speaker 11: I don't think that's necessarily indicative of vout you know,
Speaker 11: activity largely going away from the US long term.
Speaker 2: I although, you know, it's you know, it's interesting. I
Speaker 2: was just doing kind of an an i IPO search
Speaker 2: on the Bloomberg and it looks like there's a fair
Speaker 2: amount you know, of.
Speaker 3: Activity over in China.
Speaker 2: I am curious, are we seeing you know, China certainly
Speaker 2: pick up their momentum and is it possible that IPOs
Speaker 2: we're going to see a lot more activity that aren't
Speaker 2: you know, United States or US based.
Speaker 11: Yeah, we will continue to see some promising deals outside
Speaker 11: the US with ongoing kind of geopolitical tensions and regulatory
Speaker 11: moves so forth. I think we will see more deals
Speaker 11: in China. But again I expect our volume here in
Speaker 11: the US to hopefully pick back up again. I think
Speaker 11: it's late this year, though I don't know that it'll
Speaker 11: be Q two, hopefully later in Q three into Q four,
Speaker 11: and then certainly hopeful and optimistic about twenty twenty four.
Speaker 2: All right, going to leave it on that note, Hey, Rachel,
Speaker 2: thank you. Rachel Garing, IPO leader at EY Americas on
Speaker 2: zoom from Nashville, Tennessee, and Madame just looking at the
Speaker 2: terminal Ali Baba's grocery arm gearing up for a Hong
Speaker 2: Kong ipo. You have a Chinese chip maker seeking an
Speaker 2: IPO with a value of over fourteen and a half
Speaker 2: billion that was earlier, that was overnight from Asia and
Speaker 2: group IPO likely this year. One venture capital firm saying, so,
Speaker 2: that's a lot of activity out of Asia. Yeah, and
Speaker 2: I think it feels like it.
Speaker 5: Well, it's such an important point that maybe investors and
Speaker 5: companies and entrepreneurs are just leaning more global and seeing
Speaker 5: more opportunity in places like China where you know, the
Speaker 5: environment is just different.
Speaker 2: Yeah, yeah, exactly. So we'll see, we'll see whether or
Speaker 2: not stuff starts to pick up in the US later on.
Speaker 2: All right, you are listening and watching Bloomberg BusinessWeek right
Speaker 2: here on Bloomberg Radio.
Speaker 1: This is Bloomberg Business Wait inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: So we're gonna talk a little bit about those born
Speaker 2: old savings accounts.
Speaker 3: We're gonna slow it down a little bit, everybody.
Speaker 2: The new way show Bloomberg Business Week is out on newsstands.
Speaker 3: This will all make sense in a moment. Be patient.
Speaker 2: It's on newstands, online at Bloomberg dot com, slash BusinessWeek,
Speaker 2: and of course on the Bloomberg And we're talking about
Speaker 2: this week's domestic covery, which is something that the big
Speaker 2: bank CEOs over the past week or so have been
Speaker 2: asked about paying up more on bank savings accounts, which
Speaker 2: are increasingly looking pretty interesting. As a surgeon, interest rates
Speaker 2: has weiged on some of the more speculative core owners
Speaker 2: of financial markets. Let's get more on those stories. The
Speaker 2: remarks in a new issue, and we get to of course,
Speaker 2: and it is the domestic cover. As I said earlier. Uh,
Speaker 2: the editor of Bloomberg BusinessWeek magazine, Joel Weber and Bloomberg
Speaker 2: Markets senior editor Mike Reigan both.
Speaker 3: Actually Joe is at our studio.
Speaker 2: Mike is there on zoom from New Jersey. Joel, We're
Speaker 2: you know, we constantly say we're living in there.
Speaker 12: You're saving all your love forming us. It's a whit
Speaker 12: the Houston favorite of mine. Yes, so we've been perhaps
Speaker 12: you've noticed some offers from all over the place about
Speaker 12: how you can get four percent savings and Apple had
Speaker 12: that news betterments out with four point three five. Mike,
Speaker 12: do you remember when I could like invest in uh,
Speaker 12: you know, like a MC or pictures of digital apes
Speaker 12: and get rich really quickly. And it seems like the
Speaker 12: exact opposite is the cell now.
Speaker 13: Yeah, absolutely, And you know the fascinating thing is in
Speaker 13: that sort of twelve thirteen years of rock bottom interest
Speaker 13: rates after the financial crisis, the banks kind of trained
Speaker 13: us all to forget about the whole notion of you know,
Speaker 13: they're supposed to be paying us money to give them
Speaker 13: our savings. It's really a fascinating, i think period in history,
Speaker 13: really a historical because you know, never have interest rates
Speaker 13: stayed that low for that long. And even when the
Speaker 13: Federal Reserve started raising interest rates in twenty seventeen and
Speaker 13: twenty and eighteen, it was a very gradual, slow rise,
Speaker 13: and the banks didn't exactly react quickly to it by
Speaker 13: raising their own deposit rates, even though they were now
Speaker 13: able to make a little bit more money, you know,
Speaker 13: in the credit.
Speaker 6: Markets and whatnot.
Speaker 13: This time, it's a whole different scenario because that rise
Speaker 13: from the Federal Reserve has been so aggressive, so rapid
Speaker 13: that a.
Speaker 6: Lot of banks have really reacted quickly to it.
Speaker 13: And you know, as you pointed out, Apple, sort of
Speaker 13: that news landed right as we were polishing off this story,
Speaker 13: so it was good timing on that.
Speaker 6: But the other fascinating thing is that not all banks
Speaker 6: have yet to do it.
Speaker 13: You know, you look at your basic savings account at
Speaker 13: Chase or Bank of America, they're still at literally zero
Speaker 13: point zero one percent on a savings account and there's
Speaker 13: a variety of reasons for that. You know, they have
Speaker 13: a lot of much more diverse business other sources of
Speaker 13: funding than bank deposits. But that disparity is really fascinating,
Speaker 13: you know, zero point zero one percent to some banks,
Speaker 13: UFB Direct, a small online bank, offering above five percent,
Speaker 13: and now Apple and Goldman getting into the business, offering
Speaker 13: over four percent. So it's it's a very dramatic and
Speaker 13: sort of newly competitive environment for banks to compete for
Speaker 13: these deposits, like like they haven't really had to do
Speaker 13: since before the global financial CRIS system in two thousand
Speaker 13: and eight.
Speaker 3: Mike, should they be?
Speaker 2: And I guess I ask because, as you say, you know,
Speaker 2: it's not the old fashioned bank of you know, taking
Speaker 2: deposits and loan out to the neighborhood, you know, to
Speaker 2: buy homes, to buy things, and so on and so forth.
Speaker 2: The big banks today are much more complicated financial entities
Speaker 2: and they have a lot of different ways to make money.
Speaker 2: Do they care, maybe this is a naive question, do
Speaker 2: they care whether or not they have those individual customer deposits?
Speaker 3: How important is that to a bank?
Speaker 13: Well, you know, I think the bigger you get the
Speaker 13: more diversified your businesses, the less pressure you're feeling, you know,
Speaker 13: especially when you look at a bank like JP Morgan
Speaker 13: Chase that saw I actually saw a flood of deposits
Speaker 13: in the first quarter because of the concern about the
Speaker 13: smaller regional banks. But the smaller you get, the more
Speaker 13: you are closer to that standard banking model of you know,
Speaker 13: borrowing low and lending high. I think the more pressure
Speaker 13: you're feeling because the average consumer and businesses. Even more importantly,
Speaker 13: I've woken up to this idea that there's a better
Speaker 13: rate out there. Now it's finally worth my time and
Speaker 13: effort to sort of break up with my.
Speaker 6: Bank, switch banks.
Speaker 13: And the less I think many banks want to confront
Speaker 13: right now is a drop in deposits.
Speaker 6: I mean that ultimately.
Speaker 12: Didn't go over well.
Speaker 6: It didn't go over well. It didn't go over well
Speaker 6: with Silicon Valley back.
Speaker 13: Now that's obviously an exaggerated situation, but bank deposits in
Speaker 13: aggregate all US commercial banks dropped last year for the
Speaker 13: first time since like the nineteen forties, so that the
Speaker 13: competition is real and not all banks have raised their rates,
Speaker 13: but I think there's more to come. You know, there's
Speaker 13: this competition. It isn't over. There will be more banks
Speaker 13: reacting raising rates, you know, if not to four or
Speaker 13: five percent. Certainly the era of rock bottom interest rates
Speaker 13: on savings deposits, I think is really coming to a
Speaker 13: pretty swift end.
Speaker 1: You know.
Speaker 12: The thing they have going for the though, is is
Speaker 12: a inertia.
Speaker 1: Mike.
Speaker 12: It's like really hard to pull out, you know, out
Speaker 12: of a bank where you've been banking forever and maybe
Speaker 12: you've got all those auto payments set up and auto
Speaker 12: checks and to like actually, you know, move from one
Speaker 12: institution to another, even going after you know, bank rates
Speaker 12: five point oh two percent. As great as that sound,
Speaker 12: that's sheer thing. Like man, inertia is a hard thing
Speaker 12: to overcome. So like, you know, what incentive do the
Speaker 12: banks really have to do this?
Speaker 3: I believe they call it stickiness?
Speaker 13: Yeah, stickiness right, yeah, you know, and that's we're kind
Speaker 13: of in that phase now where the inertia I think
Speaker 13: is still a big thing. You know, say you have
Speaker 13: ten thousand dollars in savings, if you're if you get
Speaker 13: a five percent rate on that, you're talking about five
Speaker 13: hundred bucks. So is it worth it for you for
Speaker 13: five hundred bucks to really, uh, as you point out,
Speaker 13: go through and take the effort and and possibly have
Speaker 13: to rejigger all your automatic payments and stuff. But you know,
Speaker 13: the higher that savings goes up, if you have, you know,
Speaker 13: one hundred thousand dollars and all of a sudden you're
Speaker 13: talking about five thousand dollars a year, well you know,
Speaker 13: it might.
Speaker 6: Be worth it. It's probably worth it.
Speaker 13: And I think that's a calculation that a lot of
Speaker 13: just average mom and pops are doing around the country
Speaker 13: right now, and businesses as well well.
Speaker 5: Also that five hundred dollars, as an investor would tell you,
Speaker 5: if you put that back into your Schwab brokerage, that
Speaker 5: could be a lot more in the decades to come.
Speaker 5: But I want to ask you about how to suss
Speaker 5: out these high old savings accounts. I get fed constant
Speaker 5: ads about a variety of different high old savings accounts.
Speaker 5: My friends and I are always having this discussion of
Speaker 5: what to do with our savings.
Speaker 12: Do they look like the cover of Bloomberg Business Week,
Speaker 12: which is the number four flexing with a six pack?
Speaker 12: Very weird?
Speaker 5: They look way less cool and way more sketchy, which
Speaker 5: is why I'm concerned about me and my friends getting
Speaker 5: scammed by non FDIC and SED high yield savings account.
Speaker 5: Do you have any advice for us?
Speaker 13: Yeah, I mean I think you know, that's a great point. Obviously,
Speaker 13: you make sure you're dealing with a FDIC insured bank,
Speaker 13: which yeah, they all all the banks are more or
Speaker 13: less FDIIC insured now. But you know, I'm sure if
Speaker 13: you start hard enough on the internet you'll find some
Speaker 13: sketchy operators that aren't actually insured, you know, especially if
Speaker 13: you're you know, dipping a tone of the crypto market
Speaker 13: and that sort of thing. But you know, the other
Speaker 13: important thing is, well, what is you know that FDIC
Speaker 13: limit is two hundred and fifty thousand dollars, So if
Speaker 13: you're talking about moving an amount of money greater than that,
Speaker 13: you have to think about it a little bit harder,
Speaker 13: and you know, perhaps split it up over a couple banks,
Speaker 13: or go to a money market mutual fund, which isn't
Speaker 13: fdi C in short, but they have a very strong
Speaker 13: history of being pretty reliable. You know, I don't think
Speaker 13: I could be wrong about this, but I don't think
Speaker 13: a money market fund is I've actually failed in the US,
Speaker 13: you know, the reserve on in the financial crisis, uh
Speaker 13: broke the book reading you know, your assets dropped a
Speaker 13: little bit, but you know, so, yeah, you got to
Speaker 13: do your research.
Speaker 6: And you know, some accounts require minimum balance, some don't.
Speaker 13: If you're talking about a CD or what they call
Speaker 13: time deposit, you might have to lock up your money
Speaker 13: for a year or two years something like that.
Speaker 6: So you know, it's it's a good time to read
Speaker 6: the fine print for once.
Speaker 1: Yeah.
Speaker 12: It also just makes me think, like, I mean that
Speaker 12: fine print, like is there is there some fine print
Speaker 12: that we haven't thought about for a while even, you know,
Speaker 12: and I'm like, there's there's basis points with some of
Speaker 12: this stuff, Like so is there you know when the
Speaker 12: when the Reagan family sits down and assesses their options,
Speaker 12: you know what, what are you just going straight for
Speaker 12: the north of five percent, Mike, or are you somewhere
Speaker 12: north south of that?
Speaker 6: Well?
Speaker 13: I think what's fascinating to me is that there is
Speaker 13: this skepticism and this you know, it's too good to
Speaker 13: be true mentality towards towards a four percent savings rate.
Speaker 13: When you know, I'm dating myself here a little bit,
Speaker 13: but you know, I remember back in the eighties. I mean,
Speaker 13: you know, you expected to get paid on your deposits,
Speaker 13: you know, and you shocked around.
Speaker 6: And found that best that best yield.
Speaker 13: I remember taking my nickels and dimes from the paper
Speaker 13: route and put them in the bank, knowing I, you know,
Speaker 13: I'd get a nice yield on it. So a little
Speaker 13: skepticism is healthy. But I think in the sort of
Speaker 13: spectrum of investments bank savings account, you know, I would.
Speaker 12: Is as boring as it gets, is as boring and.
Speaker 6: Probably as safe as it gets.
Speaker 13: Granted, you know, if you're under that fd i C limit,
Speaker 13: especially that two hundred and fifty thousand dollars limit, now
Speaker 13: there is there there was sort of this paranoia that
Speaker 13: erupted when SVB and the other two went under that you.
Speaker 6: Know, the the fd i C might.
Speaker 13: Not have enough money in its own accounts to cover
Speaker 13: to ensure the deposits. If if the dominoes keep falling
Speaker 13: and enough banks go under.
Speaker 6: I think that's subsided.
Speaker 13: A little bit just because of the programs that have
Speaker 13: been put in place, and.
Speaker 6: Also to me, I think, you know, the FDIC.
Speaker 13: Is such an important institution to this country that even
Speaker 13: though we have this you know, pro wrestling version of
Speaker 13: politics going on right now, where you know, anything could happen.
Speaker 13: We might default on tragedies in a few months. I
Speaker 13: think that FDIC is so important that it would, you know,
Speaker 13: if it were to not live up to its obligations,
Speaker 13: that the damage on both sides of the political aisle
Speaker 13: would be so great that they actually would, you know, do.
Speaker 6: What it takes to keep it afloat. So I think,
Speaker 6: you know, we.
Speaker 3: Talk about a crisis of confidence if that.
Speaker 14: Happened, absolutely absolutely yeah, And I you know, knock on wood,
Speaker 14: and I you know, I hope I'm not proved wrong
Speaker 14: about that, but I think, you know, it is such
Speaker 14: a you know, important bedrock of the entire US financial
Speaker 14: system that even in the toxic political environment we're in
Speaker 14: right now, I think they'd find a way to to
Speaker 14: to keep it going.
Speaker 12: Okay, So if it's point zero one percent on basic
Speaker 12: savings deposits at Bank, Bank of America or or Chase,
Speaker 12: you know, like Mike Wake, what what's it gonna be?
Speaker 12: Is it gonna go point zero five or are they
Speaker 12: going to go to you know, zero point one?
Speaker 13: I you know, I think right now the CEOs that
Speaker 13: those banks are kind of sussing out exactly what they're
Speaker 13: gonna have to do, because you.
Speaker 6: Know, for one thing that the one big.
Speaker 13: Competition for banks is money market mutual funds, right, because
Speaker 13: they're they invest in short term securities, they're able to
Speaker 13: be much more nimbler in raising and lowering rates.
Speaker 6: As need be. You know, uh, JP Morgan's got money
Speaker 6: market funds.
Speaker 13: Most of your big banks have these, So if they're
Speaker 13: leaving deposits on one side of the business, but they're
Speaker 13: going into the the other side, it's not as acute
Speaker 13: of an issue as you're smaller, more traditional that really
Speaker 13: needs that traditional savings deposit. So you know, I think
Speaker 13: I think the pressure is going to be much greater
Speaker 13: on the more simpler, uh you know, right, borrow, borrow low,
Speaker 13: and lend high type of banks then the more diversified
Speaker 13: sort of financial supermarket banks.
Speaker 2: Although you know, we did see that headline on the
Speaker 2: Blueberg money market funds have the biggest weekly outflow since
Speaker 2: twenty twenty from the Investment Company Institute. So yeah, no,
Speaker 2: but I mean banks maybe getting squeezed. You know what
Speaker 2: I really want to know, Mike, did you pose for
Speaker 2: the cover story that stroll?
Speaker 12: I think you didn't recognize the apps not mine us.
Speaker 6: Going through a men's health phase cover design.
Speaker 12: There there were many versions of that cover that existed
Speaker 12: before we got to that one, and I'm just so
Speaker 12: glad that it became weirder than where we were, because
Speaker 12: it was pretty weird, and then it got.
Speaker 3: Even Weirderam like, what is it?
Speaker 6: Text?
Speaker 12: You just don't Sometimes there's just questions that you don't
Speaker 12: want to know the answer to you.
Speaker 13: But he skipped right from a ment health inspiration to
Speaker 13: Crack magazine in.
Speaker 3: The Business Week After Dark podcast. Catch it on your podcast.
Speaker 12: You look too closely at the apps, it just gets
Speaker 12: your life gets really weird really quickly.
Speaker 3: Oh my god.
Speaker 8: All right, all right, guys, thank you so much. It
Speaker 8: is the domestic cover story Bloomberg Business Week, which is
Speaker 8: add on newsstands, online at Bloomberg dot com, slash BusinessWeek
Speaker 8: and of course on the Bloomberg Mike Reagan, thank you
Speaker 8: so much, Senior editor, lead blogger for the Bloomberg Markets
Speaker 8: Live blog.
Speaker 3: I zoom from New Jersey.
Speaker 8: Joe Webber, of course, the editor Bloomberg Business Week.
Speaker 3: Are you really on some kind of health wellness.
Speaker 12: Fixs Uh sure, sure, I mean I work out. I'm
Speaker 12: intermittent fasting sometimes, you know, it's.
Speaker 3: All true, a little fasting. All right, you are listening
Speaker 3: and watching Bloomberg Business.
Speaker 8: Week, brom.
Speaker 1: Journal.
Speaker 10: How about you let me drive?
Speaker 14: Oh no, no, no, please, Grave, I want to try.
Speaker 3: It's a good question, good time.
Speaker 1: This is the drive to the clothes for me. Think
Speaker 1: well By on Bloomberg Radio.
Speaker 2: Kind of see it feels like we're watching the markets
Speaker 2: a little bit in slow.
Speaker 3: Motion today, right, Like what is happening? I don't know,
Speaker 3: it's really kind of a weird.
Speaker 2: Maybe it's just that marking time, you know, marking time
Speaker 2: until we get the next fad decision.
Speaker 3: Here's what our next guest has to say.
Speaker 2: We are folks just about seventeen minutes away from the
Speaker 2: closing bell.
Speaker 3: Stocks just off their loads.
Speaker 2: Of the session, as you heard from Charlie, but tech
Speaker 2: really thanks to Tesla probably taking the biggest hit time
Speaker 2: for the drive to the close. Marion Bartel's is back
Speaker 2: with us, chief investment strategist and managing director at Sanctuary Wealth,
Speaker 2: a financial platform for investment advisors. She joins us once
Speaker 2: again on Zoom and Nayak, New York.
Speaker 3: Marion, good to.
Speaker 2: Have you back with us. It is an interesting market environment,
Speaker 2: and we've seen some tight ranges, certainly on the equity
Speaker 2: side of things.
Speaker 3: You know, what to use seems to kind of have
Speaker 3: it right, is it?
Speaker 2: What the equity market is maybe showing some debate about
Speaker 2: what comes next or the treasury trade. I'm curious how
Speaker 2: you see it.
Speaker 15: Thank you so much for having me back out. Yes,
Speaker 15: you're absolutely correct. The market has really been range bound,
Speaker 15: and you know, and those are frustrating markets because it
Speaker 15: really doesn't feel like a trend. Although technically we're slightly
Speaker 15: in an upward bias. So the range has been forty
Speaker 15: two hundred on the high end. We haven't been able
Speaker 15: to break above that, and I would say there's good
Speaker 15: support around thirty eight hundred. I would say very short term,
Speaker 15: the technical indicators are saying that we can get a
Speaker 15: pullback here, and you're seeing that happen today. But when
Speaker 15: we look at the technical indicators longer term, meaning more
Speaker 15: monthly type of price amount of indicators, we're actually getting
Speaker 15: buy signals. So we think these pullbacks a great opportunity
Speaker 15: to buy. And what's really probably allowing the market to
Speaker 15: have a bias to the upside and why with all
Speaker 15: what seemed to be the negatives like corporate profits peaking,
Speaker 15: margins peaking, you know, interest rates up, really high risk
Speaker 15: of a recession. Although we've been talking about that a
Speaker 15: long time, is it seems that investors are positioned for
Speaker 15: that very defensive a lot of cash on the sidelines.
Speaker 15: And when we look at fast money or you know,
Speaker 15: traders like hedge funds, they're positioned very short the market.
Speaker 15: They're already short, so which I think we have a
Speaker 15: floor here on the market, and I think that over
Speaker 15: time we're going to have a bias to the upside.
Speaker 15: But you're going to have to break above that forty
Speaker 15: two hundred to get all this negative positioning in a
Speaker 15: more positive light.
Speaker 2: So, Mary, when you say technical indicators longer term on
Speaker 2: a monthly basis, signals to buyas it some of the
Speaker 2: things you just talked about in terms of trader shirt
Speaker 2: at the market, cash on the SILD, I'm curious the
Speaker 2: specifics of what you were seeing technically.
Speaker 15: Yeah, so if you use one of my favorite indicators
Speaker 15: is called the stochastic, and we did a fourteen month stochastic.
Speaker 15: We've actually been watching it since December expecting a buy
Speaker 15: signal this year and sure enough, we've gotten a by signal.
Speaker 15: Now there's been other indicators that are not as well known.
Speaker 15: One is called copic and again that's a price momentum
Speaker 15: type of indicator, and one was developed by Marty Swig. Yeah,
Speaker 15: he was very famous for calling the crash in nineteen
Speaker 15: eighty seven. Unfortunately he's not with us anymore, but he
Speaker 15: developed this indicator that's called the Swig breath or the
Speaker 15: Swig thrust breast breath indicator, and that's based on being
Speaker 15: very over sold and in a short period of time
Speaker 15: getting very overbought. And we don't get these sig very often.
Speaker 15: Now they're kind of mixed on their tactical reading. But
Speaker 15: in the last six readings that we've had from the indicator,
Speaker 15: the market was higher twelve months later. So we really
Speaker 15: are starting to see some of the indicators go very
Speaker 15: bullish the market, although they're not getting a lot of press.
Speaker 5: Do you think that earnings are going to support that
Speaker 5: idea moving forward?
Speaker 10: So that's the problem.
Speaker 15: We don't have the earnings or at least we feel
Speaker 15: that we're in a corporate profits recession. But again, as
Speaker 15: I said, everyone's positioned that way and markets get locked
Speaker 15: and especially have a floor to the downside when you
Speaker 15: have positioning so bearish. So what I think has to
Speaker 15: happen is you have to flush out the market. The
Speaker 15: only way you're going to do that is by going up,
Speaker 15: forcing everybody in, and then resetting the market, and then
Speaker 15: we'll see where we go. That's that's what I think
Speaker 15: is the risk to the market. I think the risk
Speaker 15: is to the upside.
Speaker 3: That's interesting. What do you make of the VIX? Do
Speaker 3: you care about it?
Speaker 2: The volatility index it's now a little bit it's a
Speaker 2: little bit about seventeen, but it's really.
Speaker 3: It had been moving down pretty substantially.
Speaker 15: It has, and it kind of technically broke down.
Speaker 10: Now.
Speaker 15: I've heard some derivatives traders say that the VIX, the
Speaker 15: way it's calculated and how it's being used in trading
Speaker 15: is not as informative. But I still like to look
Speaker 15: at it, and it's technically broken down and it's actually
Speaker 15: signaling the opposite of what the market is doing. You
Speaker 15: would think with the VIX going down, the market would
Speaker 15: be going up, and the opposite is actually happening. It
Speaker 15: is maybe possible that the VIX continues to go down
Speaker 15: and we're in this trading range type of environment. But
Speaker 15: I would say that there is a there's some confusion
Speaker 15: in the behavior of the vix.
Speaker 5: Yeah, that's confusing to me that they're like dislocating, and
Speaker 5: I don't know what to make of that. And I
Speaker 5: also don't know what to make of a lot of
Speaker 5: the dislocation that we're seeing in the market right now.
Speaker 5: Really quickly, I want to ask you about something our
Speaker 5: market's reporter told us earlier, saying that markets may have
Speaker 5: already priced in, that we're past a recession that had
Speaker 5: already happened, and we're breaking out to the upside. Do
Speaker 5: you agree with that.
Speaker 15: I don't think we've priced in a recession, although I
Speaker 15: think positioning has priced in a recession.
Speaker 10: Okay, so that's different.
Speaker 15: I don't think the market has, but I think investors
Speaker 15: have priced that in.
Speaker 2: All right, What about on a technical basis? One more question, Marian,
Speaker 2: is that is there when you look at the technicals
Speaker 2: of various sectors within the broader market, what is there
Speaker 2: any that are saying here's a really good opportunity, really
Speaker 2: signaling a buye.
Speaker 15: So there's obviously there's a lot of different ways to
Speaker 15: look at technicals. CARC Yeah, I've been very bullish semiconductors.
Speaker 15: I still have a cyclical bias. I still like aerospace
Speaker 15: and defense, but I want to balance that out with
Speaker 15: more defensive sectors like healthcare and utilities. So I think
Speaker 15: in a trading range market, you want a little bit
Speaker 15: of both.
Speaker 2: All right, That makes sense, Kate, so great to check
Speaker 2: in with.
Speaker 3: You have a great weekend. Marian Bartel.
Speaker 2: She's chief investment strategist managing director over at Sanctuary Wealth.
Speaker 2: Joining us via zoom from Nyack.
Speaker 3: New York.
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