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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. All right, in business school,

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Speaker 1: I learned when you get GDP contractions two quarters in

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Speaker 1: a row, that's a recession. Now people are telling me,

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Speaker 1: not so fast. We've got a strong consumer. We've got

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Speaker 1: everybody's kind of got a job if they want one.

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Speaker 1: The wages are going up a little bit. I don't know,

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Speaker 1: but let's bring it up. Someone who does this for

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Speaker 1: a living, Russell Price. He's a chief economist, used to

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Speaker 1: have a real job as an equity research annels. We'll

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Speaker 1: get to that in a minute. But now I was

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Speaker 1: going over to we should point out that Bloomberg Financial

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Speaker 1: has picked him as the best, um well, one of

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Speaker 1: the best, one of the most accurate economic forecasters in

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Speaker 1: our benchmark consensus certain he's ameret Price Financial, and most importantly,

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Speaker 1: he joins us live here in a Bloomberg Interactive Broker Studios.

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Speaker 1: So Russell the economy. I, I know we've got a

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Speaker 1: lot of headwinds out there, and I know we've got

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Speaker 1: some GDP data that's just we're in a recession. But

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Speaker 1: some people are telling me not so fast. How do

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Speaker 1: you think about it? You know, I think it's much

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Speaker 1: more important just to look at the overall data rather

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Speaker 1: than trying to label it whether it's a recession or

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Speaker 1: not a recession. Either way you look at it, the

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Speaker 1: economy is, it's slowed down and it's likely to slow further.

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Speaker 1: So I think we'll probably be right around the break

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Speaker 1: even point for a couple of quarters. We could slip

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Speaker 1: into uh, portions where consumer activity and business investment spending

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Speaker 1: are actually negative. Uh, they haven't been there quite yet.

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Speaker 1: Consumers have are very strong. So UM, I think it's

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Speaker 1: really based on the numbers. Were not in a recession yet,

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Speaker 1: but we could yet still be it. Uh. You know,

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Speaker 1: to me, it's highlighted the difference in real and nominal GDP.

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Speaker 1: So my whole life, we've focused on real GDP, but

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Speaker 1: apparently in my dad's day, you know, they focused on

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Speaker 1: nominal GDP. And I realized that, Um, you can the

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Speaker 1: distinction is elementary. It's just inflation. But you can also

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Speaker 1: interpret um nominal GDP growth to mean, you know, we

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Speaker 1: have an incredible amount of demand here. You know, Paul

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Speaker 1: and I have been hearing all year that this inflation

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Speaker 1: is all caused by the supply side and the FED

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Speaker 1: can't do anything about it. And lately economists have been

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Speaker 1: telling us, you know, maybe this still strong nominal growth

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Speaker 1: means that there's a pretty big demand component to this inflation. Yeah.

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Speaker 1: I would agree with that. I think demand is very strong.

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Speaker 1: It it goes to show, um, just how strong it

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Speaker 1: is that the real consumer spending data in the GDP

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Speaker 1: report has still been positive. So in other words, what

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Speaker 1: that means is consumers are spending above and beyond the

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Speaker 1: increase in prices that they're experiencing via inflation. So again

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Speaker 1: it goes to show just how strong consumers are. And

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Speaker 1: so I always spend as much as I can, Yeah,

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Speaker 1: usually about more than I earned. That's my that's my

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Speaker 1: that's a strategy. Yeah, that's my rule. Personal. Well, look,

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Speaker 1: you know Mary Daily at the San Francisco Fed UM

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Speaker 1: the other day, I think she was in an interview

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Speaker 1: with Reuters. She said, Um, I don't feel the pain

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Speaker 1: of inflation anymore. This is a direct quote, by the way, Paul.

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Speaker 1: She said, I see prices rising, but I have enough

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Speaker 1: that I can make substitutions. I can do things. Um,

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Speaker 1: you know, she saying she makes enough, but of course

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Speaker 1: she gets paid for in two thousand dollars and then

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Speaker 1: has some pretty good investments as well. Are there people

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Speaker 1: in this country who are really being hit hard and

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Speaker 1: hurt by inflation? Oh? Sure, absolutely, the people that spend

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Speaker 1: the bulk of their UH or income on daily necessities,

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Speaker 1: and certainly for housing if UH for rent, and certainly

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Speaker 1: for gasoline and household utilities. Household utilities is kind of

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Speaker 1: a under the radar inflation component because it's been going

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Speaker 1: up at a strong pace and is likely to go

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Speaker 1: up even further because natural gas prices are rising. In

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Speaker 1: about thirty eight percent of the United the United States,

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Speaker 1: households get UH electricity is generated via natural gas. So

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Speaker 1: no matter how you heat your home coming in the

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Speaker 1: winter is still going to be a higher price, and

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Speaker 1: that's gonna squeeze people still. Yet, I'd say this is

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Speaker 1: gonna be a huge story, mat and you're coming up

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Speaker 1: with this energy. I mean, we gotta stay on topic.

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Speaker 1: My My electric bill last month was fifteen hundred dollars

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Speaker 1: electric and gas. But if you were in Berlin like

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Speaker 1: you were recently, it's gonna be really ugly coming up

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Speaker 1: this well. And if Berliner has had air conditioners, it

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Speaker 1: would already be bad. That's right, because they choose not

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Speaker 1: to live well, that's right, Russell. Talk to us about

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Speaker 1: the jobs market. We get a big data point tomorrow.

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Speaker 1: We had jobs claims came in, uh, you know inline today,

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Speaker 1: but you know, showing some some pickup in jobs claims.

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Speaker 1: How do you think about the labor market. Yeah, I

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Speaker 1: think there's pockets where we are seeing some actual layoffs,

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Speaker 1: but there's still relatively modest the overall pocket. I don't

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Speaker 1: think we're seeing broad scale um uh cuts by any means,

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Speaker 1: but we are seeing slow down in the pace of hiring. Uh.

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Speaker 1: That was evidenced what the other day the other day

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Speaker 1: of the jobs the Jolts report. So um, I think

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Speaker 1: that we're going to slow down for the month of

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Speaker 1: July when it's reported, well, I'm looking for a gain

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Speaker 1: of about two thousand. I do expect the unemployment rate

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Speaker 1: to tick down to three point five percent because the

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Speaker 1: household survey has been flat for a few months, and

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Speaker 1: I think we'll get a little bit of a gain there,

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Speaker 1: which could momentarily drop the unemployment rate, but I think

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Speaker 1: it will probably rise slightly over the second half, so

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Speaker 1: that can that gives the FED basically more ammunition to

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Speaker 1: raise rates. Jim Bullard yesterday said he wants to see

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Speaker 1: um the rates of the FED rates at the end

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Speaker 1: of this year at three seventy five to four, and

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Speaker 1: we're hearing people forecasting terminal rates at five to six.

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Speaker 1: They were outliers, but that group is getting bigger and bigger.

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Speaker 1: Is that what you think as well? No, we think

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Speaker 1: that the terminal rate will probably be around somewhere between

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Speaker 1: three and a half and four, so we're a little

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Speaker 1: bit more optimistic. What pause or do they go back down?

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Speaker 1: I think a pause. I think the pause will be

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Speaker 1: a period of time. I don't think they'll next year.

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Speaker 1: I do not expect them to start to cut once again.

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Speaker 1: But I think over the second half of the year

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Speaker 1: we will start to see inflation data. More broadly, we're

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Speaker 1: already seeing any commodities and and UH lumber prices, things

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Speaker 1: like that we're always seeing and a pair all of

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Speaker 1: things like that. We're already seeing those declines, but we

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Speaker 1: need to see it more broadly in the CPI and

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Speaker 1: PCE numbers, and I think by the end of the

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Speaker 1: year we are going to be seeing that with a

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Speaker 1: couple of months under our belt. All right, Russell, great,

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Speaker 1: great stuff, Thanks very much for coming in. Russell Price,

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Speaker 1: chief economists for Mayor Price Financial based in Troy, Michigan,

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Speaker 1: which is a very nice burb of Detroit, and russells

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Speaker 1: just giving us some I think a little bit of

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Speaker 1: an upbeat outlook for those Detroit lions coming out, So

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Speaker 1: go figure that right now, let's get back to the

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Speaker 1: markets here. The SNP off just slightly off about two

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Speaker 1: tents of one percent. I want to bring in Shawn Snyder,

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Speaker 1: he's head of investment strategy at City US Wealth Management. Sean,

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Speaker 1: I mean, boy, we had the SNP off, you know,

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Speaker 1: a little more than and it's nader. We had the

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Speaker 1: um nastack off a little bit more than thirty. But boy,

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Speaker 1: they've bounced back pretty well. I guess the question that

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Speaker 1: we ask a lot is simply, I'm sure you're hearing

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Speaker 1: from your clients, is is this bounce back for real

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Speaker 1: or is this just the head fake? What do you think?

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Speaker 1: First off, good morning, Thank you for having me. I

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Speaker 1: very much appreciate it. Listen, I think there's a solid

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Speaker 1: reason why the markets are up since mid June. You

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Speaker 1: have better than expected earnings. You have increasing confidence that

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Speaker 1: inflation is maybe finally peaked. Um. I know we've been

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Speaker 1: a little bit like the Boy who Cried Wolf with

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Speaker 1: peak inflation, but it looks like it might actually be

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Speaker 1: here this time. You have a noticeable decline in treasury yields.

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Speaker 1: You know, tech stocks were reacting to rising treasury yields

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Speaker 1: and now they're reacting to them on the way down

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Speaker 1: as well. Uh, And then you have the potential for

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Speaker 1: less coggressive FED. So I do think that makes sense

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Speaker 1: for markets to move higher. Now. The real question to

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Speaker 1: me is, you know is the bottom in? And to me,

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Speaker 1: that really depends upon whether we have a recession or not.

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Speaker 1: And I think this idea that we've already seen the

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Speaker 1: worst maybe wrong if you ask yourself. You know, recessions

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Speaker 1: tend to last about eleven months on average, unemployment rate

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Speaker 1: tends to rise by about two points six percent when

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Speaker 1: you have a recession. Our stocks appropriately priced right now

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Speaker 1: for that type of environment. I would argue maybe not,

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Speaker 1: but it's gonna take some time for this to play out,

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Speaker 1: and we have to see what the FED does and

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Speaker 1: monetary policy operates with the lag, so we have to

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Speaker 1: see what happens economic DATAE and I think this is

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Speaker 1: just gonna be one of those times where we have

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Speaker 1: to be really patient as investors. What do you think

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Speaker 1: QT means? I mean, when do we start it in earnest?

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Speaker 1: And how much that tightened up financial conditions because they've

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Speaker 1: just gotten looser over the past few weeks. Well, that's right,

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Speaker 1: so with the stock market actually going up, that loosens

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Speaker 1: financial conditions, and financial conditions are about as loose as

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Speaker 1: they were back in March. So in some regards, that

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Speaker 1: actually makes the Fed's job a bit more difficult, and

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Speaker 1: would actually argue for them to continue to tighten, even

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Speaker 1: though they may wish to kind of pivot at some point.

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Speaker 1: So that does make things difficult. Uh, you know, really

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Speaker 1: is a question about three. You know, we head into

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Speaker 1: twenty three, inflation is on a downtrend, the economy is

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Speaker 1: holding up. You know, I think the FED can maybe

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Speaker 1: dial back a little bit hope that things are you know,

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Speaker 1: on track for that soft landing. But you know, it's

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Speaker 1: really gonna be difficult if core inflation doesn't start to

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Speaker 1: calm down, if shelter prices stay elevated, we continue to

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Speaker 1: see wage growth, and I think the Fed may feel

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Speaker 1: that it has to continue to raise rates into three.

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Speaker 1: And I think it's gonna be really interesting story in

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Speaker 1: because these dual mandates will become dueling mandates. Where what

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Speaker 1: does the FED do at that point if unemployment is

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Speaker 1: rising while inflation is staying hot, you know, hotter than

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Speaker 1: hope for which one takes precedence, and that could add

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Speaker 1: the market flatility, But we'll have to wait and see. Sean,

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Speaker 1: we're about eighty percent of the way through earning season

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Speaker 1: in terms of the SMP five hundred here, a little

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Speaker 1: bit better than expected. I think, what are your takeaways?

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Speaker 1: It is better than expected. I think we were expecting

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Speaker 1: about five and a half percent EPs growth year on year.

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Speaker 1: It's tracking above that full percentage point, probably six and

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Speaker 1: a half seven percent, So that's certainly good. My takeaway

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Speaker 1: from earnings and economic data that we're seeing this week

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Speaker 1: under the market rallied on an uptick in i s

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Speaker 1: M Services Index, is that to me, it's telling us

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Speaker 1: that we're not in a recession yet, it doesn't confirm

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Speaker 1: to me that one will ultimately be avoided. So I

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Speaker 1: still think I'm being a big cautious here. But so far,

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Speaker 1: I think the economy is holding up. Okay, we're continuing

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Speaker 1: to see job growth. I think we'll see that again tomorrow,

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Speaker 1: and I think that's positive news and kind of gives

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Speaker 1: the Fed the green lights to you know, tighten a

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Speaker 1: bit more. But you know, getting towards the end of two,

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Speaker 1: I think it might be a bit more difficult. Sorry,

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Speaker 1: we've heard that a lot of people UM are holding cash.

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Speaker 1: Is that the case for you and your clients as well?

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Speaker 1: Some of our clients maybe holding cash. But as a

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Speaker 1: you know firm, our Global Investment Committee is fully invested.

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Speaker 1: We're defensively positioned. So we're in areas like dividend growers, healthcare,

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Speaker 1: consumer staples. UM. We also like natural resource stocks. We

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Speaker 1: think that's kind of an inflation hedge. And then you know,

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Speaker 1: certain pockets of fixed income US municipals, intermediate duration, investment

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Speaker 1: grade credits, and we're basically looking for pockets of opportunity

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Speaker 1: rather than sitting in cash. And you know, the problem

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Speaker 1: was sitting in cash is in an inflationary environment. It's

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Speaker 1: inflations running at nine point one percent, and you're in cash.

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Speaker 1: That means you're losing nine point one percent at least

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Speaker 1: if you're in equities, you know, you get some sort

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Speaker 1: of dividend yield or fixed income, you get some sort

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Speaker 1: of dividend um. So I think there's better alternatives, and

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Speaker 1: it really really do think bonds are back. We think

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Speaker 1: we saw the peak and yields probably earlier this year.

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Speaker 1: So we think fixed income, you know, presents an opportunity

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Speaker 1: here that's at least better than sitting in cash. All right, Sean,

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Speaker 1: good stuff. Really appreciate getting a few minutes of your time.

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Speaker 1: Shawn Snyder, he's head of an investment strategy at this

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Speaker 1: little bank in New York City called City, the US

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Speaker 1: wealth management side of that business here. So bonds are back,

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Speaker 1: so says Mr Snyder. H And they're fully invested there

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Speaker 1: at City. Vince Singarella, he's global macro strategist for Bloomberg News.

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Speaker 1: Traded currencies back in a day, traded bonds back in

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Speaker 1: the day. Um Now he is firmly ensconced in his

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Speaker 1: work from home office set up which he has set

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Speaker 1: up like no one else. He doesn't eat anybody because

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Speaker 1: he's just done it all. And we love it when

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Speaker 1: he checks in because he has some very interesting calls

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Speaker 1: on these markets. Vince, I know you've been the way

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Speaker 1: I phrased the people's Vince signal has got a very

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Speaker 1: positive kind of view on risk ascid and boy for

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Speaker 1: the last couple of months, you've been so spot on there. Uh,

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Speaker 1: and I think it was kind of predicated upon the

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Speaker 1: FET's not going to raise as much as people think.

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Speaker 1: Do you still feel that way? Yeah, I feel very

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Speaker 1: strongly that way. I mean I've still you know, as

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Speaker 1: I've as you guys probably remember back from I've been

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Speaker 1: fed watchers since my college days. I traded through Voker.

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Speaker 1: I met Paul Woker. This is not Voker's inflation that

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Speaker 1: we're fighting. UM, it's um, you know, the consumers getting

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Speaker 1: tapped out revolving credits at up their team percent this year,

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Speaker 1: uh wages up five inflations of nine percent. It's not

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Speaker 1: keeping chasing their tail a little bit there. They made

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Speaker 1: a huge era um with their transient call. Uh. They're

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Speaker 1: trying to correct that save some credibility. And I'm I'm

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Speaker 1: afraid they're just gonna make another another policy mistake because

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Speaker 1: the consumer is just gonna the consumer is gonna taper

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Speaker 1: going into the third and fourth quarter, so demand is

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Speaker 1: going to drop to meet supply. We're not going to

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Speaker 1: get this runaway inflation that said seems to think that's

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Speaker 1: going to continue. It's already starting to roll over, dude.

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Speaker 1: And when that happens. When that happens, I think equities,

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Speaker 1: especially in the nastack and the tech sector are gonna rock.

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Speaker 1: And the short end of the Treasury card was going

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Speaker 1: to be brilliant because when those expectations dropped, those bonds

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Speaker 1: are gonna sore. They're they're up to levels where they

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Speaker 1: see inflation at three d percent rates at three percent,

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Speaker 1: you need to get on a conference call with the

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Speaker 1: bond market man because, um, the result on POSAR, because

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Speaker 1: you know, it seems like that narrative of the Fed,

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Speaker 1: you know, going to three and a half or four

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Speaker 1: and then cutting in like even the first half of

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Speaker 1: three has been flipped on its head over the last week. Now,

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Speaker 1: all of a sudden, everybody is talking about five percent

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Speaker 1: for a terminal rate, even six and those who are

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Speaker 1: more conservative, um, still think that the FED is at

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Speaker 1: least gonna pause for the year and not cut. Well,

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Speaker 1: I'm not so sure they're going to cut necessarily. Um,

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Speaker 1: you know, let's let's say, say if they raise rights

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Speaker 1: to three to three and a half percent and you

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Speaker 1: have inflation coming down, inflation is not going to come

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Speaker 1: down at three to three and a half percent by

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Speaker 1: year end. So they're perfectly, you know, in a situation

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Speaker 1: to stay where they are and pause. But I mean,

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Speaker 1: let's let's you know, look at the yel curve. The

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Speaker 1: ten uere yield is not pricing in five FED interest

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Speaker 1: rates or or maintaining inflation with thirty eight basis points

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Speaker 1: inverted from the twos. The twos are pricing in three

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Speaker 1: to twent and a half percent, said with being just

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Speaker 1: over three percent, but the rest of the curves inverted

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Speaker 1: for a reason that the bond market doesn't believe this,

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Speaker 1: this trend for past this year is going to continue

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Speaker 1: very much. So what I haven't heard recently is stagflation.

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Speaker 1: That was kind of a thing that I had to

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Speaker 1: go back into my little TechBook and check it out.

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Speaker 1: And we haven't been talking about that much recently. Had

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Speaker 1: why not, Well, you know, the reason again. And when

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Speaker 1: I say this is in poker's inflation, I sat in

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Speaker 1: those gas lines with the odd and even license plate.

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Speaker 1: What are you driving? Back to n Vince oh Man,

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Speaker 1: It was a nineteen seventy one bulick was saber that

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Speaker 1: got eleven miles to was I was enough a lot um.

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Speaker 1: The reason why we had that and and hopefully the

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Speaker 1: Inflation Reduction Act won't repeat this is the the White

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Speaker 1: House and Nixon administration in post price controls, and they

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Speaker 1: thought that they could put a cap on prices and

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Speaker 1: therefore a cap inflation. But what they did it wasn't

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Speaker 1: across the board. So for instance, you had a cap

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Speaker 1: on beef prices to keep you know, meat prices down

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Speaker 1: for the consumer, but they didn't cap the grain prices

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Speaker 1: for the ranchers, so they could no longer raise cattle

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Speaker 1: out of profit, so they stopped. And what happened, prices

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Speaker 1: went through the roof because of the supply demand issue.

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Speaker 1: So unless the administration makes the same foolish mistake as

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Speaker 1: they did in the seventies, this isn't that that kind

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Speaker 1: of inflation. The demand will slow and it will come

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Speaker 1: back to balance. We're already starting, by the way, that's

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Speaker 1: an interesting point, Vince. You know, so many people at

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Speaker 1: the UM well for the last you know, six months,

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Speaker 1: have been saying this is all about the supply side,

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Speaker 1: and the FED can't do anything about it, and then

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Speaker 1: they heard UM. I believe Paul and Tom were talking

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Speaker 1: to Michael Darta a couple of days ago and he said, look,

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Speaker 1: nominal growth is really high and to meet that signals

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Speaker 1: that demand is a huge part of the problem. Do

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Speaker 1: you think that's the case. Yeah, but I think it's

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Speaker 1: gonna slow. I mean, we saw mortgage rates today, you

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Speaker 1: drop about five percent from the first time in April. UM.

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Speaker 1: You know, the housing markets beginning to slow, and that's

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Speaker 1: where I think that You know, what people miss is

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Speaker 1: the consumer's real wealth is in their homes these days,

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Speaker 1: most of them aren't invested in the stock market. So

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Speaker 1: if prices start to come down or or we're starting

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Speaker 1: to see in the real estate market here in the Northeast,

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Speaker 1: what we're seeing as sales decline. So we're not really

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Speaker 1: seeing prices come down yet, but we're starting to see

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Speaker 1: a decline in sales. Naturally, what will follow is a

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Speaker 1: decline in prices, and in the US, consumers see that

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Speaker 1: and they see that their wages aren't keeping up with inflation.

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Speaker 1: I mean, no one's getting a nine percent raids this

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Speaker 1: year to stay with stay to keep up with that

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Speaker 1: that pace, and it's likely going to be pretty high

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Speaker 1: next year as well. So at some point when you

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Speaker 1: see revolving credit up on in a year, that's a

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Speaker 1: consumer that's really tapped out. And I just don't see

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Speaker 1: that as lasting for a very very long time. Vince.

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Speaker 1: You know here at Bloomberg Radio and TV we make

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Speaker 1: a big day out of jobs Day and tomorrow's Job's Day.

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Speaker 1: What are you looking for when the granddaddy of all

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Speaker 1: economic statistics? Exactly, that's how you guys play it. I'm in,

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Speaker 1: I'm all in, what are you what are you looking for? Vince?

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Speaker 1: We'll see this is the thing, and I have I

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Speaker 1: disagree once again with the majority opinion on this. The

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Speaker 1: jobs numbers are will definitely begin to slow, and that's

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Speaker 1: because they're a lagging indicator. And when I keep seeing

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Speaker 1: the FED talk about a strong job market, I want

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Speaker 1: to go back and like throw my economic textbooks at somebody,

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Speaker 1: because we are going to see jobs slow, but it's

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Speaker 1: gonna lag the rest of the economy. Inevitable. We're starting

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Speaker 1: to see the job cut are left it right from

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Speaker 1: some of the major corporations. It was an announcement again

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Speaker 1: this morning of another major corporation cutting jobs. It is

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Speaker 1: gonna slow, and my fear is that the fet is

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Speaker 1: walking into some kind of like a bear trap where

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Speaker 1: you're gonna raise risk alow but jobs slow and being

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Speaker 1: a legging indicator, it's already gonna be too late. You

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Speaker 1: gonna roll over right, all right, Vince, good stuff. As always.

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Speaker 1: We got the bullish call on stocks and risk assets.

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Speaker 1: He's been consistently making a call for the last a

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Speaker 1: couple of months there um and he's been right. So

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Speaker 1: he's sticking with He's you know, no no waiver in

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Speaker 1: that voice. You know. Some of the news that's coming

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Speaker 1: across the tape over the last few days just kind

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Speaker 1: of makes me chuck a little bit coming out of

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Speaker 1: Wallster because it just seems like it was just weeks

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Speaker 1: lash months ago that we were seeing stories about how

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Speaker 1: Wall Street couldn't hire people fast enough and they couldn't

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Speaker 1: pay their incoming analysts and associates enough and raising uh,

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Speaker 1: you know, salaries every other week. It's se were like

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Speaker 1: you were asking every banker that came on the show,

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Speaker 1: like did you go into your manager's office and demand

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Speaker 1: double double bonus? You know? And now we've got stories

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Speaker 1: like the exact opposit. We we're talking about cutting jobs,

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Speaker 1: plunging bonus pools. Um. I got to get to the

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Speaker 1: bottom of this. We can do that with Hannah Levitt,

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Speaker 1: financial reporter for Bloomberg New She joins us live, Yes

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Speaker 1: Live on Bloomberg Interactive Broker Studio. We appreciate that, Hannah.

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Speaker 1: What's going on Wall Street? I mean, I know it's

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Speaker 1: a yo yo ball, pay pay a lot, pay terrible,

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Speaker 1: pay a lot. Where are we now? And what are

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Speaker 1: the banks telling you? Hey, yeah, thank you for having me. Um.

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Speaker 1: So it looks like bonuses, especially for the investment bankers,

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Speaker 1: are set to be way down this year. And as

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Speaker 1: you mentioned, last year was this you know, crazy on

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Speaker 1: sort of deals and war for talent and they couldn't

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Speaker 1: you know, pay people enough and get enough people to

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Speaker 1: you know, work there and do their deals. And now

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Speaker 1: the tides have clearly turned. Um. There's been a massive

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Speaker 1: slote and I think something like forty some percent drop

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Speaker 1: in investment paying king revenue at the big five banks.

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Speaker 1: And you know with that, the bonuses will not be

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Speaker 1: what they were last year. Yeah, I'm looking at M

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Speaker 1: A GO right now, and I see that. You know,

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Speaker 1: we're already in August UM, but it's only two point

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Speaker 1: three trillion dollars worth of total M and A and

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Speaker 1: a lot of that one point one trillion is pending,

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Speaker 1: So who knows if it's going to actually happen. UM.

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Speaker 1: Why the big slowdown this year? You know, I think

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Speaker 1: it's actually really interesting if you look at it um

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Speaker 1: and you look at how trading has been good, and

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Speaker 1: it's the it's two sides of the same coin, right,

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Speaker 1: because there's been all this you know, persistent inflation, recession, fears,

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Speaker 1: Russia's invasion of Ukraine, all these things that have led

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Speaker 1: to a lot of you know, market moves, market turmoil, uncertainty,

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Speaker 1: and people don't want to do deals in that kind

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Speaker 1: of uncertainty, and so it gets you know, really unpaused.

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Speaker 1: But then on the flip side of that, you see

427
00:21:52,320 --> 00:21:54,280
Speaker 1: the trading results have been up, and that will be

428
00:21:54,320 --> 00:21:57,280
Speaker 1: like kind of a lone bright spot bonus wise, as

429
00:21:57,320 --> 00:21:59,840
Speaker 1: if now they're looking to be up a bit. So,

430
00:22:00,080 --> 00:22:01,760
Speaker 1: by the way, I just wanted to just for clarity

431
00:22:01,800 --> 00:22:03,880
Speaker 1: on what we saw it last year more than five

432
00:22:03,960 --> 00:22:07,119
Speaker 1: trillion dollars in deals in the full year, and even

433
00:22:07,280 --> 00:22:11,760
Speaker 1: in UM you know, the first COVID year of we

434
00:22:11,800 --> 00:22:15,000
Speaker 1: saw three and a half trillion, So we really need well,

435
00:22:15,040 --> 00:22:18,119
Speaker 1: we're not gonna eclipse last year and we're probably not

436
00:22:18,119 --> 00:22:21,960
Speaker 1: going to even match, which is insane because that's when

437
00:22:22,000 --> 00:22:24,560
Speaker 1: everybody had to work from home. Yeah, well, I mean

438
00:22:24,760 --> 00:22:27,359
Speaker 1: I think the work I mean tell us you know

439
00:22:27,840 --> 00:22:29,800
Speaker 1: where are where is Wall Street? On the work from home?

440
00:22:29,800 --> 00:22:32,880
Speaker 1: Because we had so many different messages coming out of

441
00:22:32,960 --> 00:22:35,600
Speaker 1: the big names, the big CEOs on Wall Street was

442
00:22:35,640 --> 00:22:38,280
Speaker 1: got to go back in the office ubs say no,

443
00:22:38,520 --> 00:22:40,720
Speaker 1: and you know, say no, you can in city saying

444
00:22:40,720 --> 00:22:43,800
Speaker 1: no will be flexible kind of how's it evolved? You know,

445
00:22:43,880 --> 00:22:45,520
Speaker 1: it's interesting because if if we had been having this

446
00:22:45,640 --> 00:22:49,160
Speaker 1: same conversation a year ago, UM, I could have spent

447
00:22:49,280 --> 00:22:51,480
Speaker 1: you know, five ten minutes walking through how each of

448
00:22:51,480 --> 00:22:54,320
Speaker 1: the different firms was approaching it slightly differently and you know,

449
00:22:54,560 --> 00:22:57,600
Speaker 1: something more flexible than others. Really, it is not UM

450
00:22:58,960 --> 00:23:02,480
Speaker 1: something that I hear about from sources anymore. It's like there,

451
00:23:02,520 --> 00:23:05,000
Speaker 1: you know, they're in the office, some are you know,

452
00:23:05,080 --> 00:23:07,280
Speaker 1: five days, some are three day. But the point is

453
00:23:07,320 --> 00:23:09,320
Speaker 1: like it's it is what it is. At this point

454
00:23:09,320 --> 00:23:12,160
Speaker 1: where it's kind of a non people will be grumbling

455
00:23:12,200 --> 00:23:14,960
Speaker 1: about it a little bit. Paul grumbles about it every day,

456
00:23:16,640 --> 00:23:19,080
Speaker 1: that's funny, and David Tellman probably does too, but that

457
00:23:19,160 --> 00:23:23,440
Speaker 1: doesn't change the fact that his bankers want flexibility. Yeah,

458
00:23:23,520 --> 00:23:25,560
Speaker 1: but I don't know. I mean, I think something that

459
00:23:25,600 --> 00:23:29,840
Speaker 1: will be interesting to watch is do the bankers and

460
00:23:29,880 --> 00:23:32,920
Speaker 1: the people demanding flexibility still hold the chips when we're

461
00:23:32,920 --> 00:23:35,840
Speaker 1: in recession than their job cuts and good thing that? Um, yeah,

462
00:23:35,920 --> 00:23:37,880
Speaker 1: that's gonna be interesting to see when you know, if

463
00:23:37,920 --> 00:23:39,840
Speaker 1: and when this economy does go into a recession, the

464
00:23:39,920 --> 00:23:42,479
Speaker 1: balance of power not just on Wall Street, but just

465
00:23:42,520 --> 00:23:48,720
Speaker 1: across the economy, which had been decidedly in employees favor, um,

466
00:23:48,760 --> 00:23:52,199
Speaker 1: which is not the norm, I don't think, um, certainly

467
00:23:52,200 --> 00:23:54,920
Speaker 1: not in the last years. Right. And now if you

468
00:23:55,000 --> 00:23:56,600
Speaker 1: go into recession, is that going to switch back and

469
00:23:56,640 --> 00:23:59,800
Speaker 1: employers can be like okay, kids back in the office. Well,

470
00:24:00,600 --> 00:24:03,560
Speaker 1: I think it's very different for for bankers than it

471
00:24:03,640 --> 00:24:07,840
Speaker 1: is for factory workers on the floor, right, because there

472
00:24:07,920 --> 00:24:11,760
Speaker 1: still isn't enough stuff so we need them. We still

473
00:24:11,800 --> 00:24:15,439
Speaker 1: need flight attendance. We still need you know, all of

474
00:24:15,480 --> 00:24:18,119
Speaker 1: those the service people as well. At bankers, it seems

475
00:24:18,160 --> 00:24:23,800
Speaker 1: like uh there, um, you know, not as necessary anymore. Absolutely.

476
00:24:23,840 --> 00:24:27,720
Speaker 1: I mean we were hearing about these crazy like multimillion

477
00:24:27,760 --> 00:24:31,360
Speaker 1: dollar packages and stuff just I mean months ago that

478
00:24:31,480 --> 00:24:33,720
Speaker 1: was the state of affairs and like you know, everyone

479
00:24:33,800 --> 00:24:36,840
Speaker 1: poaching everyone from everywhere, um, getting all these competing offers.

480
00:24:36,840 --> 00:24:38,840
Speaker 1: And now it's first year salaries are going up to

481
00:24:39,920 --> 00:24:42,760
Speaker 1: one ten, one twenty exactly like in the span of

482
00:24:43,040 --> 00:24:46,760
Speaker 1: weeks or months. But now I mean clearly, you know,

483
00:24:46,800 --> 00:24:48,600
Speaker 1: even during earnings, which is a couple of weeks ago,

484
00:24:48,600 --> 00:24:52,479
Speaker 1: banks we're talking about focusing on costs. When when you're

485
00:24:52,480 --> 00:24:54,480
Speaker 1: focusing on costs, that does not mean that well, back

486
00:24:54,480 --> 00:24:57,400
Speaker 1: in the day, focusing on costs meant the town car

487
00:24:57,600 --> 00:25:00,200
Speaker 1: that was the first thing to go. The town car

488
00:25:00,280 --> 00:25:02,360
Speaker 1: home from work was the first thing to go. Are

489
00:25:02,400 --> 00:25:04,920
Speaker 1: they still as well, Street still losing talent to private equity.

490
00:25:04,960 --> 00:25:06,960
Speaker 1: It seems like those first year analysts come in and

491
00:25:07,000 --> 00:25:11,399
Speaker 1: they barely are there and they're already being interviewing for

492
00:25:11,480 --> 00:25:16,040
Speaker 1: some of these p jobs. Our crypto Yes, well, that's

493
00:25:16,119 --> 00:25:19,560
Speaker 1: that's absolutely still the dynamic. I think crypto. Um, maybe

494
00:25:19,680 --> 00:25:21,560
Speaker 1: less so today first as a year ago or even

495
00:25:21,560 --> 00:25:25,680
Speaker 1: a couple of months ago. UM, But yeah, interesting, interesting, Yeah,

496
00:25:25,880 --> 00:25:28,440
Speaker 1: you know, so it's interesting. We'll see how that plays out.

497
00:25:28,440 --> 00:25:32,000
Speaker 1: But you know, headcount, that's one of the expenses. Uh's

498
00:25:32,040 --> 00:25:34,399
Speaker 1: certainly the one that they can manage aggressively, both on

499
00:25:34,440 --> 00:25:36,159
Speaker 1: the upside and the downside. So we'll see how that

500
00:25:36,160 --> 00:25:39,679
Speaker 1: plays out. UM. On Wall Street. Hannah Levitt, financial reporter

501
00:25:39,760 --> 00:25:43,280
Speaker 1: for Berloomberg News, joining us with that reporting again, big

502
00:25:43,280 --> 00:25:46,240
Speaker 1: big changes on Wall Street, the profits engine. There a

503
00:25:46,280 --> 00:25:48,280
Speaker 1: lot of it from the banking side, the new issue

504
00:25:48,280 --> 00:25:50,600
Speaker 1: and side, both and equity and fixed to come. As

505
00:25:50,640 --> 00:25:52,880
Speaker 1: we've seen from the results from the big banks, uh,

506
00:25:52,920 --> 00:25:55,120
Speaker 1: you know, trailing where they were last year and even

507
00:25:55,160 --> 00:25:58,119
Speaker 1: in as well. And so what do you do you

508
00:25:58,160 --> 00:26:03,480
Speaker 1: take a look at the cost line, what's going on

509
00:26:03,600 --> 00:26:06,080
Speaker 1: out in the world. Let's bring our next guest, May May,

510
00:26:06,080 --> 00:26:10,520
Speaker 1: who uh CEO and co founder of Vaccinity. Vacinity is

511
00:26:10,560 --> 00:26:13,679
Speaker 1: a publicly trade company trades under the symbol v a

512
00:26:14,040 --> 00:26:16,400
Speaker 1: x X on the NASTAX. So you punch that into

513
00:26:16,480 --> 00:26:19,840
Speaker 1: your Bloomberg Professional service. May May, thanks so much for

514
00:26:20,040 --> 00:26:22,000
Speaker 1: joining us here. I love for you've got if you

515
00:26:22,160 --> 00:26:24,320
Speaker 1: just kind of give us a quick overview of what

516
00:26:24,359 --> 00:26:28,000
Speaker 1: you're doing at Vaccinity right now. Yeah, great, great to

517
00:26:28,040 --> 00:26:30,960
Speaker 1: be here, Paul. Um. So, yeah, Vaccinity is obviously a

518
00:26:31,040 --> 00:26:33,879
Speaker 1: vaccine development company, and our missions really to bring the

519
00:26:33,880 --> 00:26:38,400
Speaker 1: efficiency of vaccines to chronic diseases. Um. And we decided

520
00:26:38,440 --> 00:26:42,160
Speaker 1: to use our technology to go after COVID as well,

521
00:26:42,440 --> 00:26:45,520
Speaker 1: particularly a next generation COVID booster. Um, just to show

522
00:26:45,520 --> 00:26:49,000
Speaker 1: the breath and depth of the technology. But um, you know,

523
00:26:49,200 --> 00:26:53,960
Speaker 1: we want to bring convenience, impactful, transformative medicines to the world. Well,

524
00:26:54,000 --> 00:26:56,479
Speaker 1: and it looks like you've been very successful in doing that,

525
00:26:56,560 --> 00:27:00,720
Speaker 1: certainly bringing them to the NASDAC. I see that you've

526
00:27:01,920 --> 00:27:07,080
Speaker 1: overseeing the successful spinoff of five companies. Um. Are they

527
00:27:07,119 --> 00:27:14,360
Speaker 1: all in the same kind of biotech biomedical um? Arena. Uh,

528
00:27:14,400 --> 00:27:18,679
Speaker 1: they're all in the biopharmaceutical space. So the predecessors have

529
00:27:18,800 --> 00:27:21,800
Speaker 1: been actually in Asia. So we spun off an animal

530
00:27:21,840 --> 00:27:25,520
Speaker 1: health company, vaccine company that vaccinates almost a court of

531
00:27:25,560 --> 00:27:30,520
Speaker 1: the world's livestock swine. Um A got to be careful

532
00:27:30,560 --> 00:27:34,560
Speaker 1: to swine, right, we can't say pigs anymore ever since

533
00:27:35,440 --> 00:27:40,680
Speaker 1: the problem in China. Right, Yes, yes, um, that that's

534
00:27:40,720 --> 00:27:43,840
Speaker 1: that's right. So UM yeah, So so it's all been

535
00:27:43,880 --> 00:27:46,520
Speaker 1: in the same same area, but mostly in Asia and

536
00:27:46,560 --> 00:27:50,679
Speaker 1: then UM the most recent one was Vaccinity and that was,

537
00:27:51,000 --> 00:27:54,359
Speaker 1: you know, a combination of two predecessor companies, one focus

538
00:27:54,480 --> 00:27:57,359
Speaker 1: under a logical diseases and the other one focused on COVID.

539
00:27:57,560 --> 00:28:00,600
Speaker 1: So what so what is may made the UM What

540
00:28:00,760 --> 00:28:06,000
Speaker 1: is a variant inclusive COVID booster? You know? So when

541
00:28:06,040 --> 00:28:08,840
Speaker 1: we were at the White House, UM, Dr Founci basically said,

542
00:28:08,880 --> 00:28:13,160
Speaker 1: we need something that is UM more universal like right,

543
00:28:13,240 --> 00:28:16,960
Speaker 1: so next generation we're looking at broader coverage UM and

544
00:28:16,960 --> 00:28:19,720
Speaker 1: that's kind of where ours comes in, and more durable,

545
00:28:20,000 --> 00:28:21,960
Speaker 1: so you don't want to be going out getting boosters

546
00:28:21,960 --> 00:28:25,120
Speaker 1: every three months. UM. And we take what we call

547
00:28:25,280 --> 00:28:28,399
Speaker 1: multitope approach, and that means not just looking at the

548
00:28:28,440 --> 00:28:33,120
Speaker 1: spike protein. We cover other epitopes on the virus UM

549
00:28:33,320 --> 00:28:35,920
Speaker 1: so that you have broader both be anti cell coverage

550
00:28:36,119 --> 00:28:40,000
Speaker 1: and hopefully that means that it's UM, you know, more

551
00:28:40,000 --> 00:28:43,480
Speaker 1: protective against amicron and future emerging variants, whatever they may be.

552
00:28:44,400 --> 00:28:46,240
Speaker 1: Where are we in the timing here? Because I I

553
00:28:46,680 --> 00:28:48,000
Speaker 1: for one, was just and I think a lot of

554
00:28:48,120 --> 00:28:51,240
Speaker 1: most people were just so so impressed by the ability

555
00:28:51,240 --> 00:28:55,120
Speaker 1: of the healthcare community to come up with these vaccines

556
00:28:55,200 --> 00:28:58,600
Speaker 1: so quickly, uh and have them be so effective. Um.

557
00:28:59,080 --> 00:29:02,480
Speaker 1: Just extraordinary effort there over the last several years. Where

558
00:29:02,520 --> 00:29:05,480
Speaker 1: are we in terms of getting to that next generation

559
00:29:06,200 --> 00:29:10,800
Speaker 1: COVID treatment or you know pill kind of thing. You know,

560
00:29:10,840 --> 00:29:14,480
Speaker 1: it's it's funny, So I echo you it's been unprecedented. UM.

561
00:29:14,680 --> 00:29:18,240
Speaker 1: Next generation is in some ways trickier because you've got

562
00:29:18,240 --> 00:29:20,520
Speaker 1: to figure out where do you want to improve? Right,

563
00:29:20,600 --> 00:29:24,200
Speaker 1: there are so many areas to improve. UM. I think

564
00:29:24,200 --> 00:29:26,680
Speaker 1: we're pretty close, and there are a number of other efforts.

565
00:29:26,760 --> 00:29:29,920
Speaker 1: We ourselves are in a phase three pivotal trial of

566
00:29:30,040 --> 00:29:33,080
Speaker 1: our compound called UB six twelve uh and on track

567
00:29:33,160 --> 00:29:36,080
Speaker 1: to deliver a top line read out later this year. UM.

568
00:29:36,160 --> 00:29:38,880
Speaker 1: And if successful, you know, this study could support conditional

569
00:29:38,880 --> 00:29:42,360
Speaker 1: approval of our vaccine in a whole bunch of jurisdictions.

570
00:29:42,680 --> 00:29:45,080
Speaker 1: So I think lots of progress have been made. And

571
00:29:45,080 --> 00:29:46,920
Speaker 1: I think ever since the first vaccine has got on

572
00:29:46,920 --> 00:29:49,000
Speaker 1: the market, people have been working on next generation ones.

573
00:29:49,480 --> 00:29:53,520
Speaker 1: And again we're focused on being able to address future variants,

574
00:29:53,600 --> 00:29:57,120
Speaker 1: being durable, being able to be distributed to you know,

575
00:29:57,200 --> 00:29:58,840
Speaker 1: all over the world, because at the end of the day,

576
00:29:58,840 --> 00:30:02,040
Speaker 1: there's a global problem. And also something that that is

577
00:30:02,080 --> 00:30:05,760
Speaker 1: interesting to me particularly is safety and tolerability. Right, I

578
00:30:05,800 --> 00:30:08,479
Speaker 1: want to develop the vaccine that I give my loved ones, um,

579
00:30:08,560 --> 00:30:11,440
Speaker 1: one that doesn't necessarily make you feel sick, one that

580
00:30:11,760 --> 00:30:14,080
Speaker 1: you know, you give your kids. So there's a bunch

581
00:30:14,080 --> 00:30:17,480
Speaker 1: of stuff that that everyone's working on. But we're looking

582
00:30:17,480 --> 00:30:20,920
Speaker 1: at the next wave pretty soon, how are and surely

583
00:30:20,920 --> 00:30:23,640
Speaker 1: it will come and thank thank We're thankful to people

584
00:30:23,680 --> 00:30:26,280
Speaker 1: like you who are are helping us combat it UM

585
00:30:26,440 --> 00:30:32,000
Speaker 1: covid though not nearly as ugly a disease as Alzheimer's

586
00:30:32,080 --> 00:30:37,200
Speaker 1: or Parkinson's. And you're also working on UM drugs or

587
00:30:37,440 --> 00:30:41,440
Speaker 1: therapies to fight that. Where are you That's what really

588
00:30:41,440 --> 00:30:45,240
Speaker 1: gets me going. I love it UM. So we have

589
00:30:45,680 --> 00:30:49,840
Speaker 1: shown in a number of clinical trials and humans that

590
00:30:49,920 --> 00:30:54,280
Speaker 1: are vaccine works to do what we wanted to in Alzheimer's, Parkinson's,

591
00:30:54,280 --> 00:30:57,720
Speaker 1: were actually about to Actually we're starting a phase one

592
00:30:57,720 --> 00:31:01,720
Speaker 1: in migraine patients and UM. We're also developing a vaccine

593
00:31:01,760 --> 00:31:04,560
Speaker 1: against heart attack and stroke, so something that can lower

594
00:31:04,680 --> 00:31:09,880
Speaker 1: cholesterol on folks. So the Alzheimer's program is you know,

595
00:31:10,080 --> 00:31:13,080
Speaker 1: entering its large scale trial, so we call it a

596
00:31:13,120 --> 00:31:16,040
Speaker 1: phase to be UM. We've already shown that it can,

597
00:31:16,160 --> 00:31:18,920
Speaker 1: you know, get your body to develop antibodies against these

598
00:31:18,960 --> 00:31:23,240
Speaker 1: toxic amyloid alligamers. We've shown that it can kind of

599
00:31:23,720 --> 00:31:28,240
Speaker 1: it neutralized the target UM and that in our you know,

600
00:31:28,480 --> 00:31:31,080
Speaker 1: last phase to a study that we can slow the

601
00:31:31,120 --> 00:31:33,480
Speaker 1: progression of decline. And now we've got to show it

602
00:31:33,520 --> 00:31:38,440
Speaker 1: on scale, so that study, once launch, will take UM

603
00:31:38,560 --> 00:31:41,920
Speaker 1: uh you know, eighteen months or so to complete UM.

604
00:31:41,960 --> 00:31:45,560
Speaker 1: So that's exciting stuff. That would be incredibly exciting, uh,

605
00:31:45,600 --> 00:31:49,160
Speaker 1: you know, because if you've watched someone suffer from either disease,

606
00:31:49,200 --> 00:31:53,560
Speaker 1: it's just so horrendous and so many people do and

607
00:31:53,720 --> 00:31:56,280
Speaker 1: right now there's nothing, really nothing that can be done.

608
00:31:56,400 --> 00:31:59,360
Speaker 1: So I think everyone is, uh, everyone is with you

609
00:31:59,520 --> 00:32:01,640
Speaker 1: and hoping that you guys make some real progress there.

610
00:32:01,680 --> 00:32:05,040
Speaker 1: Maybe yeah, thank you. It is devastating and U. And

611
00:32:05,040 --> 00:32:07,959
Speaker 1: the one that we we UM recently announced just non

612
00:32:08,080 --> 00:32:11,320
Speaker 1: human primate data is against a target called PCSK nine

613
00:32:11,400 --> 00:32:15,840
Speaker 1: for hypoclesterma folks with high cholesterol. You know, cardiovascular diseases

614
00:32:15,880 --> 00:32:18,520
Speaker 1: are still the number one killer around the world, and

615
00:32:18,600 --> 00:32:22,360
Speaker 1: if you can lower cholesterol. You can make a magnificently

616
00:32:22,480 --> 00:32:24,720
Speaker 1: large impact. All right, may Mate, thank you so much

617
00:32:24,720 --> 00:32:27,760
Speaker 1: for joining us. May Mee, who CEO and co founder

618
00:32:27,760 --> 00:32:31,680
Speaker 1: of the company Vaccinity, a biotech company doing some important

619
00:32:31,680 --> 00:32:37,120
Speaker 1: work there. Thanks for listening to the Bloomberg Markets podcast.

620
00:32:37,520 --> 00:32:40,720
Speaker 1: You can subscribe and listen to interviews with Apple Podcasts

621
00:32:40,880 --> 00:32:44,760
Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm

622
00:32:44,800 --> 00:32:49,000
Speaker 1: on Twitter at Matt Miller three. On bal Sweeney, I'm

623
00:32:49,000 --> 00:32:51,640
Speaker 1: on Twitter at pt Sweeney before the podcast. You can

624
00:32:51,680 --> 00:32:54,160
Speaker 1: always catch us worldwide at Bloomberg Radio