1 00:00:02,400 --> 00:00:06,720 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,200 --> 00:00:12,080 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 3 00:00:12,160 --> 00:00:15,240 Speaker 2: weekdays at ten am Eastern on Apple card playing Android 4 00:00:15,280 --> 00:00:18,400 Speaker 2: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:18,440 --> 00:00:22,280 Speaker 2: you get your podcasts, or watch us live on YouTube. 6 00:00:23,120 --> 00:00:26,800 Speaker 3: Katerina Simonetti, She's at Morgan Stanley Private Wealth Management. She's 7 00:00:26,840 --> 00:00:31,000 Speaker 3: a private wealth advisor over there. Katerina, again, I'd love 8 00:00:31,040 --> 00:00:34,199 Speaker 3: to hear kind of the conversations you're having with your 9 00:00:34,200 --> 00:00:36,520 Speaker 3: clients as you can close out a pretty successful twenty 10 00:00:36,560 --> 00:00:39,160 Speaker 3: twenty four and think about next year. What do you guys, 11 00:00:39,159 --> 00:00:41,000 Speaker 3: how are you talking to your clients these days? 12 00:00:41,720 --> 00:00:44,199 Speaker 4: Well, Paulin and Caroline, thank you for having me on 13 00:00:44,240 --> 00:00:48,520 Speaker 4: the show. This is a really important conversation because it's 14 00:00:48,520 --> 00:00:52,200 Speaker 4: not lost on clients that we've had double digit returns 15 00:00:52,200 --> 00:00:54,720 Speaker 4: for two years in a row, and it is only 16 00:00:55,200 --> 00:01:00,440 Speaker 4: reasonable to expect that the returns in twenty five are 17 00:01:00,480 --> 00:01:03,640 Speaker 4: going to be somewhat subdued. So clients are concerned the 18 00:01:03,720 --> 00:01:06,920 Speaker 4: questions that we're having about how to capture returns in 19 00:01:07,000 --> 00:01:10,800 Speaker 4: the portfolios, how to maximize the income and the portfolios, 20 00:01:10,840 --> 00:01:14,600 Speaker 4: and most importantly, risk management in the upcoming volatility, and 21 00:01:14,920 --> 00:01:18,600 Speaker 4: to be fair, our expectations for the year are not dim. 22 00:01:18,760 --> 00:01:22,640 Speaker 4: We think a lot of emphasis are on FED and 23 00:01:22,720 --> 00:01:25,319 Speaker 4: inflation and how all the other factors are going to 24 00:01:25,360 --> 00:01:28,839 Speaker 4: play out. But when it comes to the practical things 25 00:01:28,880 --> 00:01:32,319 Speaker 4: that we do before the year end, rebalancing the portfolio 26 00:01:32,319 --> 00:01:36,400 Speaker 4: and achieving maximum portfolio diversification in stocks, bonds, real assets, 27 00:01:36,440 --> 00:01:38,720 Speaker 4: and private investments is the absolute key. 28 00:01:39,600 --> 00:01:43,000 Speaker 3: So, Katerina, I mean again, a lot of folks are standpoint. 29 00:01:43,560 --> 00:01:45,560 Speaker 3: You can you have a third year of performance in 30 00:01:45,560 --> 00:01:47,480 Speaker 3: the equity markets and to the extent you're going to 31 00:01:47,480 --> 00:01:49,000 Speaker 3: be a little bit more cautious. Well, you can look 32 00:01:49,000 --> 00:01:51,760 Speaker 3: at the fixed income market. How do you think about 33 00:01:51,760 --> 00:01:53,320 Speaker 3: the fixed income trade? Do I sit there in a 34 00:01:53,320 --> 00:01:56,720 Speaker 3: two year treasury and get you four point three percent 35 00:01:56,800 --> 00:01:58,680 Speaker 3: from the US government or door it take some credit risk. 36 00:02:00,480 --> 00:02:02,960 Speaker 4: If we are expecting then FED is not going to 37 00:02:03,000 --> 00:02:06,400 Speaker 4: have quite as many rate cuts as originally expected. It's 38 00:02:06,440 --> 00:02:08,960 Speaker 4: not necessarily the absolutely worst thing in the world for 39 00:02:09,080 --> 00:02:12,200 Speaker 4: fixed income investors. Number one, we're going to get higher 40 00:02:12,240 --> 00:02:14,800 Speaker 4: yields of cash for a little bit longer than expected. 41 00:02:15,120 --> 00:02:17,880 Speaker 4: And two, if we don't think about fixed income as 42 00:02:17,960 --> 00:02:20,560 Speaker 4: per se a trade but as a whold and as 43 00:02:20,560 --> 00:02:24,440 Speaker 4: an asset that delivers that consistent income and risk management 44 00:02:24,480 --> 00:02:27,359 Speaker 4: because on the risk adjusted basis going into twenty. 45 00:02:27,040 --> 00:02:30,079 Speaker 1: Five, we prefer bonds or stocks. 46 00:02:29,800 --> 00:02:32,760 Speaker 4: We think it's going to generate yield, but quality very 47 00:02:32,840 --> 00:02:35,720 Speaker 4: much so within bonds as well as stocks is going 48 00:02:35,760 --> 00:02:37,079 Speaker 4: to be the name of the game for. 49 00:02:37,120 --> 00:02:38,000 Speaker 1: Twenty five. 50 00:02:39,480 --> 00:02:44,480 Speaker 5: Volatility because there's so much well lack of clarity as 51 00:02:44,520 --> 00:02:47,320 Speaker 5: it currently stands, Katerina, just take us through the thought 52 00:02:47,320 --> 00:02:50,120 Speaker 5: process over at Morgan Stanley Private Wealth more broadly as 53 00:02:50,120 --> 00:02:52,560 Speaker 5: to whether or not the FED will cut more than 54 00:02:52,600 --> 00:02:55,880 Speaker 5: two times. What sort of realistic infrationary pressure will we 55 00:02:55,919 --> 00:02:58,240 Speaker 5: get from the talked about tariffs that I yet to 56 00:02:58,240 --> 00:02:59,320 Speaker 5: be imposed. 57 00:03:00,400 --> 00:03:01,760 Speaker 1: Caroline, where do I start? 58 00:03:02,240 --> 00:03:07,240 Speaker 4: Uncertainty about the Fed, uncertainty about inflation, uncertainty about the 59 00:03:07,320 --> 00:03:11,120 Speaker 4: teriffs and immigration. As all these headlines are going to 60 00:03:11,160 --> 00:03:14,800 Speaker 4: start coming out in early twenty five, all of this 61 00:03:15,200 --> 00:03:18,320 Speaker 4: is going to play a role, and so our expectations 62 00:03:18,320 --> 00:03:21,440 Speaker 4: for the early half of the year come with the 63 00:03:21,480 --> 00:03:24,640 Speaker 4: expectation of the higher volatility, and last couple of weeks 64 00:03:24,639 --> 00:03:27,680 Speaker 4: gave us a bit of a taste of what's to come. Now, 65 00:03:27,919 --> 00:03:31,240 Speaker 4: tell investors not to chase rallies. And this is the 66 00:03:31,280 --> 00:03:34,040 Speaker 4: other side of this coin where we have to prepare 67 00:03:34,280 --> 00:03:37,040 Speaker 4: and stay calm and make sure that we have high 68 00:03:37,120 --> 00:03:41,600 Speaker 4: quality portfolios, focus on sectors that generate yield, Focus on 69 00:03:41,680 --> 00:03:47,680 Speaker 4: the areas like financials, industrials, materials, and make sure that 70 00:03:47,800 --> 00:03:50,800 Speaker 4: we take some profits of the table and avoid higher 71 00:03:50,800 --> 00:03:55,119 Speaker 4: concentrations in the portfolios. We've had some fantastic performance, this 72 00:03:55,160 --> 00:03:56,720 Speaker 4: is the time to take some games. 73 00:03:58,080 --> 00:04:00,760 Speaker 5: But the problem is you had fun state performance in 74 00:04:00,760 --> 00:04:03,920 Speaker 5: twenty twenty three, and if you'd have that mindset around 75 00:04:03,920 --> 00:04:06,400 Speaker 5: and in video or the Mac seven, then boy did 76 00:04:06,440 --> 00:04:08,800 Speaker 5: you miss that rally of twenty twenty four videos up 77 00:04:08,840 --> 00:04:11,320 Speaker 5: one hundred and eighty percent let's call it for the years. 78 00:04:11,400 --> 00:04:13,720 Speaker 5: So how do you talk some of your clients out 79 00:04:13,720 --> 00:04:15,680 Speaker 5: of that fomo feeling that a lot are going to 80 00:04:15,680 --> 00:04:17,479 Speaker 5: be feeding all over again when it comes to countum 81 00:04:17,520 --> 00:04:18,360 Speaker 5: an Ai. 82 00:04:19,400 --> 00:04:21,960 Speaker 4: Carolin, It's only natural to feel this way, and I 83 00:04:22,000 --> 00:04:24,719 Speaker 4: think that that what we have to ask is the 84 00:04:24,920 --> 00:04:28,960 Speaker 4: are the valuations and profit expectations that are on the table, 85 00:04:29,200 --> 00:04:32,000 Speaker 4: as well as the fact that FED has a lot 86 00:04:32,040 --> 00:04:34,120 Speaker 4: of pressure on them. You know, when it comes to 87 00:04:34,160 --> 00:04:37,320 Speaker 4: inflation in terms of cuts, are we going to get 88 00:04:37,360 --> 00:04:38,640 Speaker 4: as many cuts as expected. 89 00:04:38,680 --> 00:04:40,680 Speaker 1: That is the big question for us and for them. 90 00:04:40,920 --> 00:04:44,000 Speaker 4: So when investors are looking at their holdings, of course 91 00:04:44,000 --> 00:04:46,200 Speaker 4: it is natural not to be missing out on the 92 00:04:46,200 --> 00:04:50,320 Speaker 4: continued growth. So we don't advise selling out of the 93 00:04:50,480 --> 00:04:54,760 Speaker 4: entire position, but healthy profit taking and diversification into the 94 00:04:54,800 --> 00:04:57,559 Speaker 4: other areas where a level the growth of that level 95 00:04:57,560 --> 00:05:00,640 Speaker 4: didn't occur yet and where the possibility of future growth 96 00:05:00,800 --> 00:05:04,719 Speaker 4: are significantly more substantial than they are in technology in 97 00:05:04,800 --> 00:05:08,840 Speaker 4: some of these areas that achieved remarkable growth in both 98 00:05:08,880 --> 00:05:10,640 Speaker 4: twenty four and twenty three. 99 00:05:11,000 --> 00:05:14,360 Speaker 3: Ketterine, how do you talk to your clients about alternative investments? 100 00:05:14,400 --> 00:05:17,960 Speaker 3: Something in private equity, private credit, hedge funds, because when 101 00:05:17,960 --> 00:05:21,840 Speaker 3: I speak to rias, I'm really surprised that the high 102 00:05:21,880 --> 00:05:24,240 Speaker 3: percentages they allocate to alternatives. 103 00:05:24,240 --> 00:05:25,960 Speaker 1: How do you guys more instantly think about it. 104 00:05:27,040 --> 00:05:29,920 Speaker 4: Well, in the time where investors are so concerned about 105 00:05:29,960 --> 00:05:33,960 Speaker 4: the risk and politility and protecting the values of their portfolio, 106 00:05:34,520 --> 00:05:38,000 Speaker 4: having the asset us that could hedge risk in the 107 00:05:38,000 --> 00:05:41,400 Speaker 4: equity side of the equation, it's extremely valuable. Now it 108 00:05:41,440 --> 00:05:44,360 Speaker 4: comes with the cost, and that cost is liquidity. So 109 00:05:44,480 --> 00:05:47,400 Speaker 4: investors that are comfortable with giving up some of the 110 00:05:47,440 --> 00:05:51,919 Speaker 4: liquidity in their portfolios. Are perfectly fine using the alternative 111 00:05:51,920 --> 00:05:56,000 Speaker 4: investments because it has huge value with making sure that 112 00:05:56,080 --> 00:05:59,719 Speaker 4: we achieve consistent risk adjusted return. But with that, it's 113 00:05:59,800 --> 00:06:02,919 Speaker 4: just the piece of the puzzle where fixed income delivers income, 114 00:06:03,120 --> 00:06:07,360 Speaker 4: equities deliver growth, cash delivers liquidity, and alternative investments are 115 00:06:07,360 --> 00:06:09,040 Speaker 4: extremely effective in risk management. 116 00:06:09,760 --> 00:06:11,600 Speaker 3: We're going to have some changes to the tax policy. 117 00:06:11,640 --> 00:06:15,600 Speaker 3: It seems like we'll see how that plays out. Then 118 00:06:15,600 --> 00:06:18,400 Speaker 3: that kind of goes to the asset class of municipal bonds. 119 00:06:18,720 --> 00:06:21,400 Speaker 3: I'm a big fan of municipal bonds. A triple tax 120 00:06:21,440 --> 00:06:24,240 Speaker 3: free treatment is I think a good and wonderful thing. 121 00:06:24,839 --> 00:06:28,080 Speaker 3: How do you guys position municipals in a typical portfolio. 122 00:06:29,960 --> 00:06:30,880 Speaker 1: Well, taxes are. 123 00:06:30,800 --> 00:06:34,440 Speaker 4: A major concern and inflation is a concern as well. 124 00:06:34,480 --> 00:06:38,240 Speaker 4: But when investors are looking at their portfolios and analyzing 125 00:06:38,279 --> 00:06:41,880 Speaker 4: the after tax income and after tax performance that they're receiving, 126 00:06:42,200 --> 00:06:45,119 Speaker 4: tax efficiency is something that is a part of every 127 00:06:45,120 --> 00:06:48,200 Speaker 4: single conversation that we're having with clients, and this is 128 00:06:48,200 --> 00:06:50,400 Speaker 4: where municipal bonds come into play. 129 00:06:50,720 --> 00:06:52,479 Speaker 1: Now, with municipal bonds. 130 00:06:52,240 --> 00:06:55,200 Speaker 4: You have to make sure that the tax equivalent rate 131 00:06:55,240 --> 00:06:58,840 Speaker 4: of return that we're getting on muni bonds is actually 132 00:06:59,120 --> 00:07:03,280 Speaker 4: as good or better that return that we can achieve 133 00:07:03,440 --> 00:07:08,039 Speaker 4: in corporate fixed income, because there are some amazing buying opportunities. 134 00:07:07,920 --> 00:07:08,839 Speaker 1: On that side. 135 00:07:09,440 --> 00:07:13,400 Speaker 4: But investors certainly like having that tax free cash flow 136 00:07:14,480 --> 00:07:16,680 Speaker 4: in their portfolios, especially in retirement. 137 00:07:18,360 --> 00:07:22,520 Speaker 5: Taxation clarity is something that perhaps the crypto world is 138 00:07:22,680 --> 00:07:27,000 Speaker 5: potentially yearning for, girning for for twenty twenty five. How 139 00:07:27,000 --> 00:07:29,960 Speaker 5: have you thought about crypto and that particular area of 140 00:07:30,440 --> 00:07:33,880 Speaker 5: potential investment alternative investment for the twenty twenty four into 141 00:07:33,880 --> 00:07:35,560 Speaker 5: twenty twenty five, Katrina. 142 00:07:36,160 --> 00:07:39,080 Speaker 4: Well, Caroline, when you think about the development of crypto world, 143 00:07:39,080 --> 00:07:41,520 Speaker 4: where it turned from something that we don't mention or 144 00:07:41,560 --> 00:07:44,120 Speaker 4: talk about into something that was, you know, the most 145 00:07:44,160 --> 00:07:47,040 Speaker 4: exciting part of the portfolios than the most volatile part 146 00:07:47,040 --> 00:07:51,760 Speaker 4: of the portfolios. And now we're seeing more over a 147 00:07:51,880 --> 00:07:57,440 Speaker 4: legitimization or the use of crypto in the normal portfolios, 148 00:07:57,480 --> 00:08:01,120 Speaker 4: you know, with the availability of ETFs, with people feeling more 149 00:08:01,160 --> 00:08:04,160 Speaker 4: comfortable investing in this type of investments, but they can't 150 00:08:04,240 --> 00:08:07,840 Speaker 4: lose track of the fact that the volatility still remains 151 00:08:07,960 --> 00:08:11,360 Speaker 4: extremely high. So the positioning in the portfolio has to 152 00:08:11,400 --> 00:08:14,640 Speaker 4: be extremely careful, and investors that are relying on the 153 00:08:14,680 --> 00:08:17,720 Speaker 4: crypt for liquidity certainly has to have that in mind 154 00:08:17,800 --> 00:08:20,840 Speaker 4: because the volatility in equity markets at high is high, 155 00:08:20,840 --> 00:08:25,760 Speaker 4: but our expectations for volatility in the crypto world is 156 00:08:25,800 --> 00:08:26,960 Speaker 4: significantly higher than that. 157 00:08:28,920 --> 00:08:31,080 Speaker 5: Meanwhile, though, going back to the equity markets, where there 158 00:08:31,120 --> 00:08:35,439 Speaker 5: still govies of volatility, I'm interested in your overweights industrials, utilities, 159 00:08:35,480 --> 00:08:39,040 Speaker 5: and software, and actually that software shift from hardware to software, 160 00:08:39,080 --> 00:08:42,960 Speaker 5: from chips into a paneteer or to a software application 161 00:08:43,000 --> 00:08:44,920 Speaker 5: and generative AI has been a theme we've been hearing, 162 00:08:44,960 --> 00:08:47,360 Speaker 5: but talk a little bit more about the industrials and utilities. 163 00:08:47,360 --> 00:08:49,120 Speaker 5: What drives that For twenty twenty five. 164 00:08:50,640 --> 00:08:53,600 Speaker 4: Kurln, we're looking for a defensive place. We're looking for 165 00:08:53,960 --> 00:09:02,520 Speaker 4: companies that are not just delivering attractive earnings outlook, which 166 00:09:02,559 --> 00:09:04,640 Speaker 4: is something that we see across the board and of 167 00:09:04,640 --> 00:09:07,160 Speaker 4: course we'll be looking across the board for twenty five, 168 00:09:07,440 --> 00:09:11,160 Speaker 4: but also that bring to the table attractive valuations. They 169 00:09:11,200 --> 00:09:15,080 Speaker 4: didn't have that explosive growth that some of the sectors 170 00:09:15,120 --> 00:09:20,439 Speaker 4: we're seeing. So that's where the industrials, that's where the materials, 171 00:09:20,480 --> 00:09:24,200 Speaker 4: that's where consumer stables come in. We're looking for qualities 172 00:09:24,200 --> 00:09:27,480 Speaker 4: and also for companies that are in position to make money, 173 00:09:27,520 --> 00:09:29,000 Speaker 4: to be profitable in twenty five. 174 00:09:29,360 --> 00:09:31,560 Speaker 3: All right, Katerina, thank you so much for joining us. 175 00:09:31,559 --> 00:09:34,160 Speaker 3: Always appreciate getting some of your time and your thoughts 176 00:09:34,240 --> 00:09:38,680 Speaker 3: on these markets. Category to Seminetti, you're listening to the 177 00:09:38,720 --> 00:09:40,680 Speaker 3: Bloomberg Intelligence Podcast. 178 00:09:40,920 --> 00:09:44,160 Speaker 2: Catch us live weekdays at ten am Eastern on applecar 179 00:09:44,320 --> 00:09:47,280 Speaker 2: Play and Android Auto with the Bloomberg Business app. You 180 00:09:47,320 --> 00:09:50,560 Speaker 2: can also listen live on Amazon Alexa from our flagship 181 00:09:50,640 --> 00:09:53,000 Speaker 2: New York station, Just say Alexa Play. 182 00:09:53,160 --> 00:09:54,719 Speaker 1: Bloomberg eleven thirty. 183 00:09:55,840 --> 00:09:58,280 Speaker 5: Coming up early for us from la Is John Gilson, 184 00:09:58,320 --> 00:10:01,040 Speaker 5: who is one of the authors behind in today's Big Take, 185 00:10:01,120 --> 00:10:04,640 Speaker 5: how Trump tariff threats are already roiling global trade. You 186 00:10:04,720 --> 00:10:07,960 Speaker 5: go into this deep diet of individual companies, how they're 187 00:10:07,960 --> 00:10:12,200 Speaker 5: already having to have a surge of shipments from Germany, 188 00:10:12,240 --> 00:10:15,280 Speaker 5: whether it's wriestling wine or whether it's the latest maker 189 00:10:15,559 --> 00:10:19,079 Speaker 5: of wires and technology from the US in California. How 190 00:10:19,120 --> 00:10:21,400 Speaker 5: are they trying to front runs some of the tariffs 191 00:10:21,440 --> 00:10:24,160 Speaker 5: that we're expecting, John Well. 192 00:10:24,000 --> 00:10:28,439 Speaker 6: Exactly, there's been a record number of containers running through 193 00:10:28,440 --> 00:10:30,760 Speaker 6: the ports of la and Long Beach the biggest North 194 00:10:30,800 --> 00:10:35,079 Speaker 6: American ports just in the last couple months. Because people 195 00:10:35,120 --> 00:10:37,160 Speaker 6: are trying to get ahead of this, but at the 196 00:10:37,200 --> 00:10:41,199 Speaker 6: same time they're balancing, like, we don't want to overorder 197 00:10:41,600 --> 00:10:44,880 Speaker 6: in the case of there's a company that has EarPods 198 00:10:44,920 --> 00:10:49,040 Speaker 6: that they supply, not Apple ones. But their concern is 199 00:10:49,240 --> 00:10:52,240 Speaker 6: technology changes very fast. If we order too much ahead 200 00:10:52,240 --> 00:10:54,640 Speaker 6: of time, we'll be stuck with all this inventory that 201 00:10:54,960 --> 00:10:57,560 Speaker 6: people won't want to buy. So they're trying to balance 202 00:10:57,600 --> 00:11:00,559 Speaker 6: all these things. Get it in while prices are cheap, 203 00:11:00,720 --> 00:11:04,280 Speaker 6: beat the tariffs. At the same time, don't overorder. There 204 00:11:04,280 --> 00:11:07,640 Speaker 6: are also higher costs if you rush to get stuff 205 00:11:07,679 --> 00:11:10,160 Speaker 6: in because free costs have gone up a lot. 206 00:11:11,120 --> 00:11:14,520 Speaker 3: So John, it's interesting, we don't even know what's going 207 00:11:14,559 --> 00:11:17,400 Speaker 3: to get be subject to tariffs, how much any of that, 208 00:11:17,480 --> 00:11:20,960 Speaker 3: But it appears that companies just aren't waiting, are they. 209 00:11:21,000 --> 00:11:23,840 Speaker 3: They're trying to just get ahead of this anyway they can. 210 00:11:24,480 --> 00:11:25,920 Speaker 3: I mean, it's just extraordinary. 211 00:11:26,600 --> 00:11:28,240 Speaker 6: Well, yeah, they're trying to figure out what to do. 212 00:11:28,280 --> 00:11:31,280 Speaker 6: Because the other concern is people thought, well, let's have 213 00:11:31,360 --> 00:11:35,960 Speaker 6: stuff imported via Mexico assembled in Mexico, and that way 214 00:11:36,000 --> 00:11:39,160 Speaker 6: we could get around the sort of Chinese content. 215 00:11:39,280 --> 00:11:40,440 Speaker 1: Rules on tariffs. 216 00:11:40,640 --> 00:11:43,959 Speaker 6: But now recently Trump said, well, we want to impose 217 00:11:44,040 --> 00:11:47,720 Speaker 6: tariffs on Mexico and Canada because we're concerned that they're letting, 218 00:11:47,760 --> 00:11:50,240 Speaker 6: you know, bad guys and fentanyl into the US. 219 00:11:52,440 --> 00:11:55,160 Speaker 5: Look, well, we're looking at a market that is carneadis 220 00:11:55,200 --> 00:11:57,440 Speaker 5: some significant setting pressure today or off by more than 221 00:11:57,440 --> 00:11:59,439 Speaker 5: two percent, and then ask that one hundred. Is there 222 00:11:59,440 --> 00:12:02,199 Speaker 5: a flavor of which industries are bracing themselves the most, 223 00:12:02,240 --> 00:12:04,520 Speaker 5: Like I'm remporting all year on the chip sector and 224 00:12:04,559 --> 00:12:07,280 Speaker 5: how they've had to be navigating the China US relationship. 225 00:12:07,280 --> 00:12:12,440 Speaker 5: But you've already mentioned wine technology. This is so broad 226 00:12:12,440 --> 00:12:16,040 Speaker 5: in its remit auto's whoever are we seeing the most 227 00:12:16,080 --> 00:12:17,239 Speaker 5: anxiety build. 228 00:12:18,040 --> 00:12:19,520 Speaker 1: Well, I would say across the board. 229 00:12:19,559 --> 00:12:23,000 Speaker 6: I mean clothing is another one you mentioned or didn't mention, 230 00:12:23,160 --> 00:12:27,800 Speaker 6: But yeah, electronics, clothing, just about anything that's made overseas, 231 00:12:28,040 --> 00:12:30,120 Speaker 6: which is most of the consumer goods that we have 232 00:12:30,160 --> 00:12:33,000 Speaker 6: in the US. Lawn furniture, I mean, it's not something 233 00:12:33,000 --> 00:12:34,880 Speaker 6: that I go, oh my god, I won't be able 234 00:12:34,880 --> 00:12:37,839 Speaker 6: to live without lawn furniture. But at the same time, 235 00:12:38,400 --> 00:12:42,120 Speaker 6: there are a lot of knock on effects. As Secretary 236 00:12:42,160 --> 00:12:46,480 Speaker 6: Yellen was talking about it'll cost more ultimately to consumers, 237 00:12:46,559 --> 00:12:48,760 Speaker 6: and we're not sure whether that's good for the economy 238 00:12:48,840 --> 00:12:49,200 Speaker 6: or bad. 239 00:12:49,720 --> 00:12:52,760 Speaker 3: You've got a great graphics here, like it may take stories, folks, 240 00:12:52,760 --> 00:12:57,120 Speaker 3: they're deeply sourced, deeply reported, and they've got great graphics, 241 00:12:57,520 --> 00:12:58,240 Speaker 3: which makes it. 242 00:12:58,240 --> 00:13:01,719 Speaker 1: Just come alive. Tariff talk abounds companies. 243 00:13:02,000 --> 00:13:05,120 Speaker 3: You guys tracked how much companies talk about tariffs on 244 00:13:05,160 --> 00:13:08,440 Speaker 3: our conference calls, and holy cow, itch spiked in November 245 00:13:08,480 --> 00:13:10,640 Speaker 3: and December this year. So this is this is on 246 00:13:10,720 --> 00:13:13,040 Speaker 3: the top of minds of corporate executives, isn't it. 247 00:13:14,080 --> 00:13:15,040 Speaker 1: That's right exactly. 248 00:13:15,080 --> 00:13:20,120 Speaker 6: I mean, we have ways of searching texts of calls 249 00:13:20,120 --> 00:13:22,040 Speaker 6: all over the place and we use that as a tool. 250 00:13:22,080 --> 00:13:25,920 Speaker 6: It's like, yes, CEOs say that's a big issue for 251 00:13:25,960 --> 00:13:28,120 Speaker 6: them going into twenty twenty five. 252 00:13:29,320 --> 00:13:30,320 Speaker 1: And it's uncertain too. 253 00:13:30,400 --> 00:13:32,200 Speaker 6: I mean, that's part of the deal, is we don't 254 00:13:32,320 --> 00:13:35,640 Speaker 6: know what's actually going to happen because Trump has talked 255 00:13:35,640 --> 00:13:37,240 Speaker 6: a lot, but he's not president yet. 256 00:13:38,400 --> 00:13:41,480 Speaker 5: And that must be the frustration that ultimately a lot 257 00:13:41,480 --> 00:13:44,280 Speaker 5: of these business leaders know that they're having to drive 258 00:13:44,360 --> 00:13:47,719 Speaker 5: up costs, perhaps unnecessarily, but they've just got to make 259 00:13:47,720 --> 00:13:49,760 Speaker 5: a call. They've got to decide whether they're going to 260 00:13:49,760 --> 00:13:52,520 Speaker 5: front run something that's hypothetical in nature. Do we know 261 00:13:52,559 --> 00:13:54,120 Speaker 5: how much is driving up costs? 262 00:13:54,760 --> 00:13:57,240 Speaker 6: Well, we don't know yet, I mean there and we 263 00:13:57,280 --> 00:13:59,520 Speaker 6: don't know how much they're going to pass on. There 264 00:14:00,080 --> 00:14:03,400 Speaker 6: are higher costs for shipping right now, and a lot 265 00:14:03,400 --> 00:14:07,240 Speaker 6: of people are using air freight instead of using ships 266 00:14:07,280 --> 00:14:11,880 Speaker 6: because they want to get it here earlier. There's stuff 267 00:14:11,920 --> 00:14:14,160 Speaker 6: that if you order it early, you have to put 268 00:14:14,160 --> 00:14:17,120 Speaker 6: it in a warehouse before you put it in stores, 269 00:14:17,200 --> 00:14:20,440 Speaker 6: so that could be an extra cost too. And then 270 00:14:20,520 --> 00:14:22,360 Speaker 6: we don't know what other kind of tariffs will be 271 00:14:22,400 --> 00:14:25,560 Speaker 6: added on, so it's very hard to know how much 272 00:14:26,480 --> 00:14:30,040 Speaker 6: each unit is going to cost. How much the people 273 00:14:30,040 --> 00:14:32,920 Speaker 6: who are processing or passing on those units are going 274 00:14:32,960 --> 00:14:36,360 Speaker 6: to pass on to consumers too, because you don't want 275 00:14:36,360 --> 00:14:36,880 Speaker 6: to raise your. 276 00:14:36,760 --> 00:14:37,760 Speaker 1: Prices too fast. 277 00:14:38,080 --> 00:14:41,000 Speaker 6: And then there are in the case of the German 278 00:14:41,040 --> 00:14:43,800 Speaker 6: wine maker, maybe they're just going to export to Scandinavia 279 00:14:43,840 --> 00:14:46,600 Speaker 6: instead of the US because I think I can make 280 00:14:46,640 --> 00:14:50,960 Speaker 6: money in Scandinavia. They're not a major exporter of wine. 281 00:14:51,720 --> 00:14:54,240 Speaker 6: Some of their competitors, though, they can't do without the US. 282 00:14:54,560 --> 00:14:56,240 Speaker 1: I mean, this is no joke here. 283 00:14:56,280 --> 00:15:00,240 Speaker 3: I mean, you have some research from Oxford Economics where 284 00:15:00,280 --> 00:15:01,840 Speaker 3: I think they pulled executives. 285 00:15:01,920 --> 00:15:03,760 Speaker 1: What are the biggest worries you have over the next 286 00:15:03,760 --> 00:15:04,120 Speaker 1: two years. 287 00:15:04,200 --> 00:15:08,120 Speaker 3: We're talking Eurozone crisis, China, Taiwan, I mean, big, big issues, 288 00:15:08,160 --> 00:15:08,760 Speaker 3: the Middle East. 289 00:15:09,240 --> 00:15:10,640 Speaker 1: By far, the. 290 00:15:10,600 --> 00:15:14,000 Speaker 3: Biggest one is the global trade war. So this is 291 00:15:14,040 --> 00:15:18,320 Speaker 3: on top of mind just about everybody out there, that's right. 292 00:15:18,440 --> 00:15:22,320 Speaker 6: Yeah, And as Secretary Yellen said in the previous segment, 293 00:15:22,600 --> 00:15:24,840 Speaker 6: we don't know what kind of retaliation is going to happen. 294 00:15:25,480 --> 00:15:30,680 Speaker 6: They're talking about using a very blunt instrument across the board, tariffs, 295 00:15:31,520 --> 00:15:36,480 Speaker 6: and so people will retaliate, and yeah, people will stop paying. 296 00:15:37,240 --> 00:15:40,520 Speaker 6: We all know consumers are very unhappy about inflation. Now, 297 00:15:40,560 --> 00:15:42,760 Speaker 6: we don't know what effect hires tariffs are going to 298 00:15:42,800 --> 00:15:45,640 Speaker 6: have on inflation, but generally it raises the cost of 299 00:15:45,720 --> 00:15:48,320 Speaker 6: imported goods if you put tariffs on them. 300 00:15:48,360 --> 00:15:52,360 Speaker 3: All right, John Great Reporting John Gittilson, Bloomberg LA Bureau chief, 301 00:15:52,360 --> 00:15:55,520 Speaker 3: one of the contributors to the Big Take story. Check 302 00:15:55,560 --> 00:15:58,200 Speaker 3: out the Big Take stories on the terminal. They are 303 00:15:58,240 --> 00:16:01,920 Speaker 3: fantastic reporting every single You can go to Bloomberg dot 304 00:16:01,920 --> 00:16:05,520 Speaker 3: com slash Big Take find them online as well. 305 00:16:06,880 --> 00:16:10,800 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 306 00:16:10,880 --> 00:16:13,920 Speaker 2: weekdays at ten am Eastern on Apple, Cardplay and Android 307 00:16:13,960 --> 00:16:17,080 Speaker 2: Otto with the Bloomberg Business app listener on demand wherever 308 00:16:17,120 --> 00:16:20,320 Speaker 2: you get your podcasts, or watch us live on YouTube. 309 00:16:21,800 --> 00:16:24,400 Speaker 5: Let's just dig into the geopolitical persuasion a little bit 310 00:16:24,400 --> 00:16:26,560 Speaker 5: more and indeed what the outlook for some of these 311 00:16:26,640 --> 00:16:29,320 Speaker 5: energy markets is going into twenty twenty five. Perfect personally 312 00:16:29,400 --> 00:16:31,680 Speaker 5: that Ellen Wold is with US, senior fellow at the 313 00:16:31,720 --> 00:16:33,239 Speaker 5: Atlantic Council and author. 314 00:16:33,000 --> 00:16:34,080 Speaker 1: Of Saudi Inc. 315 00:16:34,480 --> 00:16:37,160 Speaker 5: The Arabian Kingdoms Pursuit of Profit and Power. I am 316 00:16:37,280 --> 00:16:39,760 Speaker 5: so interested in your take of what the next administration 317 00:16:39,920 --> 00:16:43,600 Speaker 5: means for the relationship with Saudi, with Israel and going forward. 318 00:16:43,600 --> 00:16:46,960 Speaker 5: But just taking on where Natalia was bringing us the 319 00:16:47,000 --> 00:16:51,240 Speaker 5: supply demand dynamics around oil and just how important is 320 00:16:51,280 --> 00:16:52,400 Speaker 5: OPEK at this moment. 321 00:16:53,240 --> 00:16:55,960 Speaker 7: So I think OPEK is actually playing a fairly critical 322 00:16:56,080 --> 00:16:59,520 Speaker 7: role right now because they're keeping a fair amount of 323 00:16:59,520 --> 00:17:04,280 Speaker 7: oil off the market and they're really enabling the US 324 00:17:04,359 --> 00:17:07,639 Speaker 7: to have a role for its oil space, for its 325 00:17:07,680 --> 00:17:11,480 Speaker 7: oil market to grow. If, for example, OPEK were to decide, hey, 326 00:17:12,000 --> 00:17:14,520 Speaker 7: all bets are off, we're going to just open the taps. 327 00:17:14,560 --> 00:17:16,760 Speaker 7: Forget about all these cuts. We're just going to put 328 00:17:16,800 --> 00:17:19,720 Speaker 7: all of our production capacity back on the market. They 329 00:17:19,720 --> 00:17:22,720 Speaker 7: have the ability to tank prices. I think they don't 330 00:17:22,720 --> 00:17:26,639 Speaker 7: want to do that right now. But a lot in 331 00:17:26,680 --> 00:17:29,600 Speaker 7: terms of the oil market hinges on whether OPEK is 332 00:17:29,640 --> 00:17:32,359 Speaker 7: going to move forward with its very gradual plans to 333 00:17:32,560 --> 00:17:34,240 Speaker 7: put more of that oil back on the market, or 334 00:17:34,280 --> 00:17:37,000 Speaker 7: whether they're going to continue to push it off. So 335 00:17:37,440 --> 00:17:40,720 Speaker 7: I think that they're still very very relevant, just not 336 00:17:40,840 --> 00:17:42,560 Speaker 7: in quite the same way as they were, say in 337 00:17:42,640 --> 00:17:43,720 Speaker 7: the nineteen seventies. 338 00:17:44,040 --> 00:17:46,000 Speaker 3: All right, Ellen, I have to fully disclose here. I 339 00:17:46,040 --> 00:17:48,920 Speaker 3: am a big fan of the TV show Landman, so 340 00:17:48,960 --> 00:17:51,160 Speaker 3: I now consider myself an expert. 341 00:17:50,800 --> 00:17:53,440 Speaker 1: On oil and gas and all that kind of stuff. 342 00:17:53,480 --> 00:17:57,520 Speaker 3: But talk to us about the US supply because that's 343 00:17:57,600 --> 00:18:01,880 Speaker 3: really changed that dynamic in global oil and gas over 344 00:18:01,880 --> 00:18:04,879 Speaker 3: the last ten years or so. Are those guys going 345 00:18:04,960 --> 00:18:07,480 Speaker 3: to be drilling, baby drilling coming forward? 346 00:18:08,280 --> 00:18:11,959 Speaker 7: Yeah, that is a great question, and you're definitely pushing 347 00:18:11,960 --> 00:18:15,480 Speaker 7: me to start watching this show in my free time, 348 00:18:15,640 --> 00:18:20,080 Speaker 7: so thank you for that. So I think that this 349 00:18:20,160 --> 00:18:23,320 Speaker 7: is not the same oil market is in twenty sixteen 350 00:18:23,359 --> 00:18:26,399 Speaker 7: and twenty eighteen this is a different shale patch. Back then, 351 00:18:26,440 --> 00:18:29,840 Speaker 7: it really was a drill, baby, drill situation because we 352 00:18:29,960 --> 00:18:32,080 Speaker 7: had lots of companies out there. It was kind of 353 00:18:32,080 --> 00:18:34,359 Speaker 7: like the wild West in a little bit of a sense, 354 00:18:34,640 --> 00:18:37,119 Speaker 7: and they just had to keep on drilling and drilling, 355 00:18:37,560 --> 00:18:41,560 Speaker 7: even if they weren't, you know, breaking, even just because 356 00:18:41,560 --> 00:18:44,000 Speaker 7: they needed to make payroll, they needed to get all 357 00:18:44,040 --> 00:18:46,199 Speaker 7: that oil out there. They were being funded with the 358 00:18:46,240 --> 00:18:47,040 Speaker 7: intent to just. 359 00:18:47,160 --> 00:18:49,920 Speaker 1: Drill, drill, drill. That time is over. 360 00:18:50,160 --> 00:18:53,240 Speaker 7: We're in a different, different oil market now, different different 361 00:18:53,240 --> 00:18:56,359 Speaker 7: shale patch where we've got a lot of consolidation. We've 362 00:18:56,359 --> 00:18:59,600 Speaker 7: got bigger, much bigger companies at the helm now, and 363 00:18:59,680 --> 00:19:03,400 Speaker 7: they they're a lot better capitalized. They're much more focused 364 00:19:03,480 --> 00:19:09,400 Speaker 7: on not necessarily just growth, but on returning value to shareholders. Coincidentally, 365 00:19:09,400 --> 00:19:12,200 Speaker 7: we happen to be producing at the highest levels ever 366 00:19:12,320 --> 00:19:15,840 Speaker 7: right now, but companies are also using a lot better techniques, 367 00:19:15,920 --> 00:19:19,120 Speaker 7: a lot more sophisticated techniques to find oil, to get 368 00:19:19,119 --> 00:19:23,200 Speaker 7: more oil out of each well. And so I think, yes, 369 00:19:23,480 --> 00:19:25,640 Speaker 7: we still do have a lot of oil to get 370 00:19:25,680 --> 00:19:27,520 Speaker 7: out of there. We're still going to be producing at 371 00:19:27,600 --> 00:19:31,400 Speaker 7: fairly high levels. But that same mentality and the ability 372 00:19:31,440 --> 00:19:34,480 Speaker 7: to kind of predict where we're going is not there now. 373 00:19:34,720 --> 00:19:37,240 Speaker 7: It's really a different look now when it comes to 374 00:19:37,680 --> 00:19:40,280 Speaker 7: the Trump administration and drill baby drill. I think that 375 00:19:40,480 --> 00:19:44,200 Speaker 7: we're going to see that much more in the offshore 376 00:19:44,240 --> 00:19:47,320 Speaker 7: oil space because that's really an area that has suffered 377 00:19:47,640 --> 00:19:52,439 Speaker 7: greatly under the Biden administration's regulatory restrictions, and so I 378 00:19:52,440 --> 00:19:54,600 Speaker 7: think we're going to see a lot more optimism there 379 00:19:54,640 --> 00:19:57,080 Speaker 7: because that's an area where things take a lot more 380 00:19:57,119 --> 00:19:59,760 Speaker 7: capital to get going. You need a lot more time, 381 00:20:00,240 --> 00:20:00,800 Speaker 7: you've got to. 382 00:20:00,760 --> 00:20:01,840 Speaker 1: Invest a lot more. 383 00:20:01,960 --> 00:20:04,159 Speaker 7: But at the same time, those wealth can last a 384 00:20:04,160 --> 00:20:07,639 Speaker 7: lot longer than what we're seeing in say the Permian 385 00:20:08,320 --> 00:20:11,040 Speaker 7: and those areas. So I think they're really looking forward 386 00:20:11,080 --> 00:20:13,639 Speaker 7: to a Trump administration to help them get the leases 387 00:20:13,680 --> 00:20:16,439 Speaker 7: they need, get the permits they need to start drilling. 388 00:20:16,640 --> 00:20:18,960 Speaker 7: And I do think that is an area where we 389 00:20:19,000 --> 00:20:21,520 Speaker 7: are going to see a more kind of drill baby 390 00:20:21,640 --> 00:20:23,080 Speaker 7: drill outlook. 391 00:20:23,760 --> 00:20:27,560 Speaker 5: And the outlook under the next administration. Of relationships with 392 00:20:27,640 --> 00:20:31,840 Speaker 5: Saudi Arabia, of relationships with Israel, and normalization with the 393 00:20:31,880 --> 00:20:34,159 Speaker 5: our world more broadly, how are you looking at that 394 00:20:34,280 --> 00:20:38,160 Speaker 5: and what it means for your markets that you are well. 395 00:20:37,960 --> 00:20:41,280 Speaker 7: I think that that's a really complicated area because I 396 00:20:41,280 --> 00:20:45,080 Speaker 7: do think that the Trump administration is much more unabashed 397 00:20:45,119 --> 00:20:48,760 Speaker 7: and its support for Israel, particularly in a military sense 398 00:20:49,119 --> 00:20:51,840 Speaker 7: and in a diplomatic sense. So I think you're going 399 00:20:51,920 --> 00:20:55,359 Speaker 7: to see a lot more very overt and very strong 400 00:20:55,440 --> 00:20:58,680 Speaker 7: support for Israel. Does that necessarily mean that's going to 401 00:20:58,720 --> 00:21:00,760 Speaker 7: put them at odds with the rest of the air world, 402 00:21:00,960 --> 00:21:05,120 Speaker 7: I don't necessarily think so. I do think that they 403 00:21:05,200 --> 00:21:11,320 Speaker 7: definitely have a much more stronger stance on Iran. It 404 00:21:11,400 --> 00:21:14,520 Speaker 7: is entirely possible that we could see them start to 405 00:21:14,720 --> 00:21:18,240 Speaker 7: enforce this the oil sanctions on Iran more forcefully, and 406 00:21:18,280 --> 00:21:21,040 Speaker 7: if that takes Irani and oil off the market, UH, 407 00:21:21,119 --> 00:21:22,399 Speaker 7: that will actually. 408 00:21:22,040 --> 00:21:23,280 Speaker 1: Be good for Saudi Arabia. 409 00:21:23,280 --> 00:21:25,880 Speaker 7: That's actually what Saudi Arabia the UA would like, because 410 00:21:26,600 --> 00:21:28,159 Speaker 7: you know, they can put more of their oil on 411 00:21:28,200 --> 00:21:30,520 Speaker 7: the market or it will help prices go up. So 412 00:21:30,560 --> 00:21:34,960 Speaker 7: I think that while there's definitely a tension in terms 413 00:21:34,960 --> 00:21:38,480 Speaker 7: of the relationship between Trump and the Saudis, I think 414 00:21:38,520 --> 00:21:42,480 Speaker 7: that the underlying aspects in terms of UH stability, in 415 00:21:42,560 --> 00:21:49,720 Speaker 7: terms of trying to UH lessen Iran's funding of terrorist groups, 416 00:21:49,760 --> 00:21:53,080 Speaker 7: I think that are all gonna bring. Maybe that that's 417 00:21:53,119 --> 00:21:55,679 Speaker 7: what the Saudis would like to see, and that's what 418 00:21:55,720 --> 00:21:58,439 Speaker 7: the Trump administration wants to see. So while you know, 419 00:21:58,960 --> 00:22:01,520 Speaker 7: they may not necessarily show that there are best buddies 420 00:22:02,000 --> 00:22:05,280 Speaker 7: in terms of US support for Israel, I do think 421 00:22:05,320 --> 00:22:07,639 Speaker 7: that there are a lot of aspects where they're going 422 00:22:07,640 --> 00:22:09,520 Speaker 7: to see a lot of synergy. 423 00:22:10,160 --> 00:22:10,440 Speaker 1: Ellen. 424 00:22:10,480 --> 00:22:14,119 Speaker 3: If I'm a proponent of green energy, how concerned should 425 00:22:14,160 --> 00:22:18,120 Speaker 3: I be about the incoming Trump administration about that process? 426 00:22:19,119 --> 00:22:22,240 Speaker 7: So I think it really depends what your approach to 427 00:22:22,280 --> 00:22:24,719 Speaker 7: green energy is. I don't think that trump Is administration 428 00:22:24,840 --> 00:22:28,040 Speaker 7: is looking to say roll back the entire IRA. I mean, 429 00:22:28,040 --> 00:22:31,800 Speaker 7: this is an administration that really also has a vested interest, 430 00:22:31,920 --> 00:22:36,879 Speaker 7: really wants to say to increase the domestic lithium and 431 00:22:36,920 --> 00:22:40,320 Speaker 7: lithium battery supply chain in the United States. They may 432 00:22:40,359 --> 00:22:42,840 Speaker 7: have a slightly different reason for wanting this. They consider 433 00:22:42,840 --> 00:22:45,320 Speaker 7: it more of a national security concern than say, an 434 00:22:45,400 --> 00:22:48,040 Speaker 7: imperative to put more evs on the road. But this 435 00:22:48,200 --> 00:22:51,239 Speaker 7: is an area where you know they definitely will have 436 00:22:51,280 --> 00:22:53,560 Speaker 7: a lot of support there and I think that there 437 00:22:53,600 --> 00:22:56,240 Speaker 7: are a lot of areas where they can work together. Now, 438 00:22:56,240 --> 00:22:58,919 Speaker 7: if you're looking at, say offshore wind, I don't think 439 00:22:58,960 --> 00:23:00,840 Speaker 7: you're going to see a whole lot of support from 440 00:23:00,880 --> 00:23:04,040 Speaker 7: the Trump administration. But to be totally honest, the offshore 441 00:23:04,160 --> 00:23:07,200 Speaker 7: wind industry in the United States has got a lot 442 00:23:07,200 --> 00:23:12,000 Speaker 7: of headwinds, even you know, without President Trump kind of 443 00:23:12,240 --> 00:23:14,840 Speaker 7: putting the brakes on that. They've got issues in terms 444 00:23:14,880 --> 00:23:18,480 Speaker 7: of the turbines that they're using, collapses in the Atlantic, 445 00:23:19,080 --> 00:23:22,040 Speaker 7: problems with funding for projects, you know off of New 446 00:23:22,119 --> 00:23:24,879 Speaker 7: York and New Jersey. The Trump administration is a convenient 447 00:23:25,040 --> 00:23:30,320 Speaker 7: way to excuse perhaps a lack of interest and difficulty 448 00:23:30,359 --> 00:23:33,399 Speaker 7: getting it going, But I wouldn't say it's necessarily the 449 00:23:33,440 --> 00:23:37,399 Speaker 7: Trump administration's fault that offshore wind is having a really 450 00:23:37,720 --> 00:23:39,800 Speaker 7: difficult and slow start here. 451 00:23:40,960 --> 00:23:44,960 Speaker 5: And then what about nucleia, Yes, that is. 452 00:23:44,960 --> 00:23:47,359 Speaker 7: An excellent question, and I think that that is something 453 00:23:47,480 --> 00:23:50,720 Speaker 7: that the Trump administration could really make a mark on 454 00:23:50,880 --> 00:23:54,480 Speaker 7: an energy if they choose to address this. Because I 455 00:23:54,520 --> 00:23:58,040 Speaker 7: know you said on the previous segment about data centers 456 00:23:58,040 --> 00:24:00,880 Speaker 7: and these big tech companies they want to use nuclear 457 00:24:01,119 --> 00:24:04,120 Speaker 7: to power their data centers. They realize that, look, we've 458 00:24:04,160 --> 00:24:05,360 Speaker 7: got to get something. 459 00:24:05,080 --> 00:24:06,000 Speaker 1: That's more reliable. 460 00:24:06,040 --> 00:24:09,160 Speaker 7: We can't use wind and solar for this. So it's 461 00:24:09,200 --> 00:24:12,320 Speaker 7: either natural gas or nuclear or a combination, and that 462 00:24:12,480 --> 00:24:15,720 Speaker 7: is an area that the Trump administration could really push 463 00:24:15,800 --> 00:24:19,280 Speaker 7: things forward. We've got a lot of really interesting technology 464 00:24:19,320 --> 00:24:22,879 Speaker 7: in terms of small modular reactors coming up, and this 465 00:24:22,960 --> 00:24:26,680 Speaker 7: is an area where they could really push things forward 466 00:24:26,720 --> 00:24:31,800 Speaker 7: and help bring more, safer, better, more affordable nuclear technology 467 00:24:32,560 --> 00:24:34,639 Speaker 7: to the United States. We really haven't had a new 468 00:24:34,680 --> 00:24:38,120 Speaker 7: nuclear plant. It is incredibly difficult to build a. 469 00:24:38,040 --> 00:24:39,080 Speaker 4: New nuclear plant. 470 00:24:39,160 --> 00:24:42,480 Speaker 7: But nuclear is a stable, great base load source of 471 00:24:42,640 --> 00:24:46,600 Speaker 7: energy that is actually incredibly safe, and so there's a 472 00:24:46,640 --> 00:24:49,320 Speaker 7: lot of things that they could do to help push 473 00:24:49,359 --> 00:24:53,760 Speaker 7: that along, bring that to fruition in safe ways that 474 00:24:53,800 --> 00:24:57,000 Speaker 7: would really also help the environment and lower emissions. 475 00:24:57,240 --> 00:24:59,080 Speaker 1: All right, Ellen, thank you so much. We appreciate that. 476 00:24:59,160 --> 00:25:03,119 Speaker 3: Ellen Wald, Atlanta Council Senior Fellow and author of the 477 00:25:03,160 --> 00:25:06,200 Speaker 3: book Saudi Inc. So one of our go to voices 478 00:25:06,200 --> 00:25:06,879 Speaker 3: on energy. 479 00:25:08,840 --> 00:25:12,760 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 480 00:25:12,840 --> 00:25:15,920 Speaker 2: weekdays at ten am Eastern on applecar Playing and broud 481 00:25:15,920 --> 00:25:19,040 Speaker 2: Oto with the Bloomberg Business app. Listen on demand wherever 482 00:25:19,080 --> 00:25:22,920 Speaker 2: you get your podcasts, or watch us live on YouTube. 483 00:25:24,280 --> 00:25:27,159 Speaker 3: Let's go to one of the big, big businesses out there, 484 00:25:27,240 --> 00:25:29,679 Speaker 3: particularly this time of the year, and that's the movie business. 485 00:25:29,680 --> 00:25:31,760 Speaker 3: When you think about the movie business, the summer is 486 00:25:31,760 --> 00:25:33,680 Speaker 3: the big part of the season. That's where a lot 487 00:25:33,680 --> 00:25:35,280 Speaker 3: of the big movies are released, and that's where the 488 00:25:35,280 --> 00:25:37,560 Speaker 3: box office is. But the second big driver is kind 489 00:25:37,600 --> 00:25:39,879 Speaker 3: of this holiday season we're in right now. Joining us 490 00:25:39,880 --> 00:25:43,080 Speaker 3: now is Daniel Larier, editorial director at The Box Office Company. 491 00:25:43,520 --> 00:25:47,840 Speaker 3: They provide data and analytics on the global film industry. Dan, 492 00:25:47,880 --> 00:25:50,400 Speaker 3: thanks for joining us. How has the twenty twenty four 493 00:25:50,440 --> 00:25:52,600 Speaker 3: box office been here in North America? 494 00:25:52,640 --> 00:25:55,200 Speaker 1: Oh, thanks for having me, Paul. It's been a recovery year. 495 00:25:55,359 --> 00:25:58,439 Speaker 8: I think coming into this here, we all expected a 496 00:25:58,520 --> 00:26:02,560 Speaker 8: downturn because of those and writer strikes from twenty to 497 00:26:02,640 --> 00:26:06,280 Speaker 8: twenty three, right, but we really saw a rally starting 498 00:26:06,280 --> 00:26:07,879 Speaker 8: in June. So at the beginning of the year we 499 00:26:07,920 --> 00:26:11,639 Speaker 8: expected maybe a ten percent slide. By now we're expecting 500 00:26:11,680 --> 00:26:14,360 Speaker 8: to finish the year within five percent year over year, 501 00:26:14,400 --> 00:26:15,920 Speaker 8: So big recovery to finish the year. 502 00:26:17,440 --> 00:26:21,119 Speaker 5: What has won out because of late it's been well, 503 00:26:21,119 --> 00:26:22,359 Speaker 5: they've been in something for everyone. 504 00:26:22,400 --> 00:26:22,680 Speaker 4: Really. 505 00:26:22,720 --> 00:26:25,880 Speaker 5: You've had gladi ETD two, you've had Wicked, you've had 506 00:26:26,000 --> 00:26:27,080 Speaker 5: the kids winning. 507 00:26:26,760 --> 00:26:30,080 Speaker 1: Out with Moana two as well. Where have been the sweet. 508 00:26:29,840 --> 00:26:33,800 Speaker 8: Spots Disney, It's that one word, and man, is it 509 00:26:33,880 --> 00:26:36,440 Speaker 8: great to have them back. This is the first year 510 00:26:36,560 --> 00:26:40,400 Speaker 8: since twenty nineteen that Disney returns to two billion dollars 511 00:26:40,400 --> 00:26:42,920 Speaker 8: in domestic box office, and this is the first year 512 00:26:42,960 --> 00:26:45,119 Speaker 8: really that we see them make the most out of 513 00:26:45,160 --> 00:26:48,280 Speaker 8: that acquisition of twentieth Century Fox a couple of years back. 514 00:26:48,320 --> 00:26:50,280 Speaker 8: If you remember, we didn't know what was going to 515 00:26:50,320 --> 00:26:53,240 Speaker 8: happen with that. They have the Avatar movies, that's a guarantee. 516 00:26:53,400 --> 00:26:56,960 Speaker 8: But this year we saw new franchises revive like Kingdom 517 00:26:57,000 --> 00:26:59,320 Speaker 8: of the Planet of the Apes and Alien Romulus to 518 00:26:59,359 --> 00:27:01,639 Speaker 8: get back on the map. You see other divisions like 519 00:27:01,720 --> 00:27:05,919 Speaker 8: Marvel with Deadpool and Wolverine, Walt Disney Studio's animation with Molanatu, 520 00:27:06,040 --> 00:27:10,040 Speaker 8: and Pixar with Inside Out two having huge recoveries that 521 00:27:10,080 --> 00:27:12,520 Speaker 8: they haven't seen yet since the pandemic. 522 00:27:13,080 --> 00:27:16,040 Speaker 1: So, Dan, you mentioned the writer strike, the act the 523 00:27:16,080 --> 00:27:17,359 Speaker 1: actor straight strike. 524 00:27:17,680 --> 00:27:20,439 Speaker 3: I'm hearing that twenty twenty five and twenty twenty six 525 00:27:20,520 --> 00:27:23,159 Speaker 3: are gonna be full production years and it's going to 526 00:27:23,200 --> 00:27:25,200 Speaker 3: be really big for the movie business. 527 00:27:25,240 --> 00:27:26,920 Speaker 1: What's your expectation for the next year or two. 528 00:27:27,560 --> 00:27:30,640 Speaker 8: New benchmarks, especially in this post pandemic era. Right, so, 529 00:27:30,840 --> 00:27:33,880 Speaker 8: we are expecting the best year in the post pandemic 530 00:27:33,920 --> 00:27:36,840 Speaker 8: box office in the coming year in twenty twenty five. 531 00:27:37,160 --> 00:27:40,120 Speaker 8: We're right now forecasting between nine point three and nine 532 00:27:40,160 --> 00:27:44,800 Speaker 8: point seven billion dollars domestically around the nine point five billion, 533 00:27:44,840 --> 00:27:46,600 Speaker 8: if you wanted to ask me for a sweet spot. 534 00:27:46,600 --> 00:27:49,520 Speaker 8: And that's really coming from our forecasting analyst of experts 535 00:27:49,520 --> 00:27:52,160 Speaker 8: in this industry that are giving us their own insights 536 00:27:52,200 --> 00:27:54,080 Speaker 8: as to where things are going in twenty five. 537 00:27:55,760 --> 00:27:58,760 Speaker 5: Let's talk a little bit about the narratives within the 538 00:27:58,800 --> 00:28:02,120 Speaker 5: companies themselves, because, like you said, the box office was difficult, 539 00:28:02,200 --> 00:28:04,600 Speaker 5: we're also seeing a restructuring that continues to be very 540 00:28:04,600 --> 00:28:07,000 Speaker 5: difficult when you think about paramount how they're being bought 541 00:28:07,040 --> 00:28:09,840 Speaker 5: at the moment, and really that's all about Hollywood and 542 00:28:09,880 --> 00:28:12,840 Speaker 5: the box office. Where will we see M and A. 543 00:28:13,040 --> 00:28:15,359 Speaker 5: Where will we see a refocusing coming from some of 544 00:28:15,359 --> 00:28:16,120 Speaker 5: the big companies. 545 00:28:16,760 --> 00:28:19,320 Speaker 8: I think the key word here, Carolyn, for next year 546 00:28:19,400 --> 00:28:21,919 Speaker 8: is spin offs, and we're seeing that with all the 547 00:28:21,960 --> 00:28:25,280 Speaker 8: TV businesses of these legacy media companies. We see Warner Brothers, 548 00:28:25,359 --> 00:28:28,240 Speaker 8: Discovery looking at how to spin off some of those 549 00:28:28,320 --> 00:28:31,520 Speaker 8: cable properties. I know Comcast is looking at something similar. 550 00:28:31,840 --> 00:28:36,000 Speaker 8: So in terms of how this impacts theatrical or the 551 00:28:36,040 --> 00:28:37,240 Speaker 8: box office, I. 552 00:28:37,240 --> 00:28:38,719 Speaker 1: Don't see an obvious answer yet. 553 00:28:38,800 --> 00:28:41,080 Speaker 8: It's a market on the rise, granted one that took 554 00:28:41,080 --> 00:28:43,600 Speaker 8: a big hit during the pandemic, but you compare that 555 00:28:43,720 --> 00:28:46,640 Speaker 8: to where linear television is right now, cable television is 556 00:28:46,760 --> 00:28:49,040 Speaker 8: right now, that's a market in the decline. So I 557 00:28:49,080 --> 00:28:51,800 Speaker 8: think the first point of focus right now is going 558 00:28:51,880 --> 00:28:54,240 Speaker 8: to be the coming cable apocalypse that is going to 559 00:28:54,240 --> 00:28:57,120 Speaker 8: be hitting the media sector next year. Dan talk to 560 00:28:57,200 --> 00:29:00,600 Speaker 8: us about China as a market for US films. As 561 00:29:00,600 --> 00:29:02,920 Speaker 8: recently as four or five years ago, it was the 562 00:29:03,120 --> 00:29:06,200 Speaker 8: growth driver and you know, almost as big as the 563 00:29:06,280 --> 00:29:09,120 Speaker 8: US Northern North American box office, and you could not 564 00:29:09,240 --> 00:29:12,480 Speaker 8: get a franchise film green lit unless you knew it 565 00:29:12,520 --> 00:29:15,160 Speaker 8: would play in China. Is that still the case or 566 00:29:15,240 --> 00:29:17,560 Speaker 8: is this kind of cold war that's been growing over 567 00:29:17,600 --> 00:29:19,160 Speaker 8: the least several years between the US and China. 568 00:29:19,240 --> 00:29:20,840 Speaker 1: Is that dampened market? 569 00:29:20,920 --> 00:29:23,400 Speaker 8: You know, I'm smiling, Paul, because ten years ago, in 570 00:29:23,440 --> 00:29:25,600 Speaker 8: my first appearance here, you asked me that very question. 571 00:29:25,880 --> 00:29:28,640 Speaker 8: And my answer then is it's crucial, it's vital, right. 572 00:29:28,960 --> 00:29:31,520 Speaker 8: I think that's changed in the last ten years. It's 573 00:29:31,560 --> 00:29:35,000 Speaker 8: changed significantly because it's a lot harder making sure that 574 00:29:35,280 --> 00:29:38,840 Speaker 8: China is a consistent player when it comes to release dates. 575 00:29:38,880 --> 00:29:41,800 Speaker 8: Forget box office returns, just a simple release date. So 576 00:29:41,840 --> 00:29:44,440 Speaker 8: it's not that I think it's more of a high 577 00:29:44,520 --> 00:29:47,680 Speaker 8: potential play rather than something that you can depend on. 578 00:29:47,760 --> 00:29:50,680 Speaker 8: And right now, where the market is, we need dependency. 579 00:29:52,480 --> 00:29:56,200 Speaker 5: What about the talent and the dependency that they're seeing 580 00:29:56,480 --> 00:30:00,040 Speaker 5: ever more so on technology And look, many took to 581 00:30:00,400 --> 00:30:03,120 Speaker 5: the strike action because of a concern about generative AI 582 00:30:03,280 --> 00:30:04,719 Speaker 5: and one's likeness in the future. 583 00:30:04,840 --> 00:30:08,080 Speaker 8: But how is that shaping I think that's a great question, Carolyn, 584 00:30:08,120 --> 00:30:10,320 Speaker 8: And that's exactly where we are with the AI question 585 00:30:10,480 --> 00:30:13,600 Speaker 8: in Hollywood right now. It's a labor question. We're not 586 00:30:13,720 --> 00:30:16,640 Speaker 8: to the point where it's a creative question yet. So 587 00:30:16,680 --> 00:30:19,640 Speaker 8: as soon as we can figure out how the labor 588 00:30:19,800 --> 00:30:22,800 Speaker 8: unions can embrace this or really live with it or 589 00:30:22,800 --> 00:30:26,040 Speaker 8: coexist with it, even that's when we'll really be able 590 00:30:26,080 --> 00:30:27,880 Speaker 8: to see how it looks like creatively. 591 00:30:28,160 --> 00:30:29,360 Speaker 1: I've said this before. 592 00:30:29,520 --> 00:30:31,920 Speaker 8: I think AI right now is a potential, but not 593 00:30:31,960 --> 00:30:33,240 Speaker 8: a reality in Hollywood. 594 00:30:34,160 --> 00:30:38,920 Speaker 3: Where are we in North American box office versus pre 595 00:30:39,000 --> 00:30:41,600 Speaker 3: pandemic level. It's called twenty nineteen because I think that 596 00:30:41,680 --> 00:30:44,040 Speaker 3: was kind of the peak year and then obviously very 597 00:30:44,120 --> 00:30:46,360 Speaker 3: very tough. You're in twenty twenty now trying to rebuild. 598 00:30:46,400 --> 00:30:48,040 Speaker 3: Where are we When do you think we'll get back 599 00:30:48,040 --> 00:30:50,360 Speaker 3: to that peak that box office of twenty nineteen. 600 00:30:50,200 --> 00:30:52,840 Speaker 8: So that twenty nineteen box office and really those years 601 00:30:52,840 --> 00:30:55,640 Speaker 8: in the latter half of the twenty tens was a 602 00:30:55,680 --> 00:30:59,720 Speaker 8: benchmark of eleven billion domestically, I don't think we'll get 603 00:30:59,720 --> 00:31:02,920 Speaker 8: there until twenty twenty seven at the earliest. Like I said, 604 00:31:02,960 --> 00:31:05,400 Speaker 8: I think next year twenty five we're looking around nine 605 00:31:05,400 --> 00:31:08,600 Speaker 8: point five billion. I think the ten billion benchmark is 606 00:31:08,640 --> 00:31:10,840 Speaker 8: going to come in twenty six and in twenty seven, 607 00:31:10,920 --> 00:31:12,960 Speaker 8: once we have a couple of years of a full 608 00:31:13,000 --> 00:31:15,880 Speaker 8: movie slate from these studios, because as you mentioned earlier, Paul, 609 00:31:16,200 --> 00:31:19,760 Speaker 8: it's really the first time since twenty nineteen where Hollywood 610 00:31:19,760 --> 00:31:23,040 Speaker 8: has an uninterrupted year of production. Now that we have 611 00:31:23,120 --> 00:31:25,840 Speaker 8: these movies coming out and hitting theaters, I think we 612 00:31:25,920 --> 00:31:27,880 Speaker 8: have to wait till twenty seven to get to that 613 00:31:28,160 --> 00:31:29,200 Speaker 8: pre pandemic level. 614 00:31:30,120 --> 00:31:33,360 Speaker 5: And are they all hitting theaters? How are we seeing 615 00:31:33,400 --> 00:31:36,680 Speaker 5: Netflix in particular or some of the key streamers decide 616 00:31:36,720 --> 00:31:38,959 Speaker 5: when to bring things out. I mean Amazon a bit 617 00:31:39,000 --> 00:31:40,480 Speaker 5: a bit of a U turn on one of its 618 00:31:40,560 --> 00:31:44,560 Speaker 5: key festive movies, and it looked like it worked to 619 00:31:44,560 --> 00:31:45,840 Speaker 5: bring it out to the theaters. 620 00:31:46,320 --> 00:31:49,080 Speaker 8: Yeah, I think it's a case by case basis when 621 00:31:49,080 --> 00:31:51,360 Speaker 8: we talk about the streamers. I don't expect Netflix to 622 00:31:51,440 --> 00:31:55,480 Speaker 8: embrace theatrical any time soon. Apple is still hot and 623 00:31:55,520 --> 00:31:58,080 Speaker 8: cold on what their strategy is. We'll see how that's 624 00:31:58,120 --> 00:32:01,280 Speaker 8: tested with a release like Foe One, the Formula one 625 00:32:01,360 --> 00:32:03,000 Speaker 8: racing drama coming out next summer. 626 00:32:03,360 --> 00:32:05,960 Speaker 1: But then you have someone like Amazon MGM, which. 627 00:32:05,920 --> 00:32:08,960 Speaker 8: Went forward with her release like Red One the theater, 628 00:32:09,040 --> 00:32:10,720 Speaker 8: so that movie is going to make one hundred million 629 00:32:10,760 --> 00:32:14,840 Speaker 8: dollars domestically, leading into a very profitable streaming run for 630 00:32:14,960 --> 00:32:18,440 Speaker 8: that title. And they have some really really interesting smaller 631 00:32:18,480 --> 00:32:20,760 Speaker 8: movies in theaters right now, a movie like The Fire 632 00:32:20,800 --> 00:32:24,920 Speaker 8: Inside biopic on the boxer Claressa Shields and my favorite 633 00:32:24,920 --> 00:32:27,520 Speaker 8: film of the year, Nickel Boyce, two really great dramas 634 00:32:27,520 --> 00:32:29,520 Speaker 8: that are going to be part of that awards conversation. 635 00:32:29,920 --> 00:32:32,160 Speaker 8: It depends on the company on what that strategy is. 636 00:32:32,160 --> 00:32:33,680 Speaker 8: But it's definitely still evolving. 637 00:32:34,400 --> 00:32:38,440 Speaker 3: Thirty seconds left, Dan, A billion dollar box office that's 638 00:32:38,480 --> 00:32:41,720 Speaker 3: still out there, isn't it? You can still do baffo numbers, 639 00:32:41,760 --> 00:32:43,280 Speaker 3: as the Variety magazine would say. 640 00:32:43,480 --> 00:32:45,400 Speaker 1: Absolutely. I think it's the stats. 641 00:32:45,440 --> 00:32:48,520 Speaker 8: Something like three of the seven highest grossing movies of 642 00:32:48,600 --> 00:32:51,920 Speaker 8: all time came out after the pandemic. So on an 643 00:32:51,920 --> 00:32:54,880 Speaker 8: individual title basis, if the movie's there, the public's going 644 00:32:54,920 --> 00:32:56,400 Speaker 8: to follow, and they're going to follow to it in 645 00:32:56,440 --> 00:32:56,960 Speaker 8: the theaters. 646 00:32:58,520 --> 00:33:02,000 Speaker 5: Daniel, So great catch out with you, Daniel Laurier. Of course, 647 00:33:02,360 --> 00:33:03,360 Speaker 5: what was your favorite movie? 648 00:33:03,400 --> 00:33:03,640 Speaker 1: Again? 649 00:33:03,720 --> 00:33:05,040 Speaker 5: Which one did you say? We should watch? 650 00:33:05,160 --> 00:33:07,680 Speaker 8: Nickel boy S that's out now and expanding soon from 651 00:33:07,800 --> 00:33:09,280 Speaker 8: Amazon MGM, great drama. 652 00:33:09,360 --> 00:33:10,200 Speaker 1: Highly recommend it. 653 00:33:10,360 --> 00:33:12,920 Speaker 5: Okay, Nickel voice, go watch it is, of course at 654 00:33:12,920 --> 00:33:16,760 Speaker 5: the box office company dying all the data and analytics 655 00:33:16,800 --> 00:33:19,760 Speaker 5: around the film industry. We appreciate him. Editorial direct to them. 656 00:33:20,040 --> 00:33:24,520 Speaker 2: This is the Bloomberg Intelligence Podcast, available on apples, Spotify, 657 00:33:24,720 --> 00:33:27,920 Speaker 2: and anywhere else you'll get your podcasts. Listen live each 658 00:33:27,960 --> 00:33:31,320 Speaker 2: weekday ten am to noon Eastern on Bloomberg dot com, 659 00:33:31,440 --> 00:33:34,840 Speaker 2: Beheart Radio app, tune In, and the Bloomberg Business app. 660 00:33:34,960 --> 00:33:38,120 Speaker 2: You can also watch US live every weekday on YouTube 661 00:33:38,200 --> 00:33:40,000 Speaker 2: and always on the Bloomberg Terminal