Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. All right, in business school,
Speaker 1: I learned when you get GDP contractions two quarters in
Speaker 1: a row, that's a recession. Now people are telling me,
Speaker 1: not so fast. We've got a strong consumer. We've got
Speaker 1: everybody's kind of got a job if they want one.
Speaker 1: The wages are going up a little bit. I don't know,
Speaker 1: but let's bring it up. Someone who does this for
Speaker 1: a living, Russell Price. He's a chief economist, used to
Speaker 1: have a real job as an equity research annels. We'll
Speaker 1: get to that in a minute. But now I was
Speaker 1: going over to we should point out that Bloomberg Financial
Speaker 1: has picked him as the best, um well, one of
Speaker 1: the best, one of the most accurate economic forecasters in
Speaker 1: our benchmark consensus certain he's ameret Price Financial, and most importantly,
Speaker 1: he joins us live here in a Bloomberg Interactive Broker Studios.
Speaker 1: So Russell the economy. I, I know we've got a
Speaker 1: lot of headwinds out there, and I know we've got
Speaker 1: some GDP data that's just we're in a recession. But
Speaker 1: some people are telling me not so fast. How do
Speaker 1: you think about it? You know, I think it's much
Speaker 1: more important just to look at the overall data rather
Speaker 1: than trying to label it whether it's a recession or
Speaker 1: not a recession. Either way you look at it, the
Speaker 1: economy is, it's slowed down and it's likely to slow further.
Speaker 1: So I think we'll probably be right around the break
Speaker 1: even point for a couple of quarters. We could slip
Speaker 1: into uh, portions where consumer activity and business investment spending
Speaker 1: are actually negative. Uh, they haven't been there quite yet.
Speaker 1: Consumers have are very strong. So UM, I think it's
Speaker 1: really based on the numbers. Were not in a recession yet,
Speaker 1: but we could yet still be it. Uh. You know,
Speaker 1: to me, it's highlighted the difference in real and nominal GDP.
Speaker 1: So my whole life, we've focused on real GDP, but
Speaker 1: apparently in my dad's day, you know, they focused on
Speaker 1: nominal GDP. And I realized that, Um, you can the
Speaker 1: distinction is elementary. It's just inflation. But you can also
Speaker 1: interpret um nominal GDP growth to mean, you know, we
Speaker 1: have an incredible amount of demand here. You know, Paul
Speaker 1: and I have been hearing all year that this inflation
Speaker 1: is all caused by the supply side and the FED
Speaker 1: can't do anything about it. And lately economists have been
Speaker 1: telling us, you know, maybe this still strong nominal growth
Speaker 1: means that there's a pretty big demand component to this inflation. Yeah.
Speaker 1: I would agree with that. I think demand is very strong.
Speaker 1: It it goes to show, um, just how strong it
Speaker 1: is that the real consumer spending data in the GDP
Speaker 1: report has still been positive. So in other words, what
Speaker 1: that means is consumers are spending above and beyond the
Speaker 1: increase in prices that they're experiencing via inflation. So again
Speaker 1: it goes to show just how strong consumers are. And
Speaker 1: so I always spend as much as I can, Yeah,
Speaker 1: usually about more than I earned. That's my that's my
Speaker 1: that's a strategy. Yeah, that's my rule. Personal. Well, look,
Speaker 1: you know Mary Daily at the San Francisco Fed UM
Speaker 1: the other day, I think she was in an interview
Speaker 1: with Reuters. She said, Um, I don't feel the pain
Speaker 1: of inflation anymore. This is a direct quote, by the way, Paul.
Speaker 1: She said, I see prices rising, but I have enough
Speaker 1: that I can make substitutions. I can do things. Um,
Speaker 1: you know, she saying she makes enough, but of course
Speaker 1: she gets paid for in two thousand dollars and then
Speaker 1: has some pretty good investments as well. Are there people
Speaker 1: in this country who are really being hit hard and
Speaker 1: hurt by inflation? Oh? Sure, absolutely, the people that spend
Speaker 1: the bulk of their UH or income on daily necessities,
Speaker 1: and certainly for housing if UH for rent, and certainly
Speaker 1: for gasoline and household utilities. Household utilities is kind of
Speaker 1: a under the radar inflation component because it's been going
Speaker 1: up at a strong pace and is likely to go
Speaker 1: up even further because natural gas prices are rising. In
Speaker 1: about thirty eight percent of the United the United States,
Speaker 1: households get UH electricity is generated via natural gas. So
Speaker 1: no matter how you heat your home coming in the
Speaker 1: winter is still going to be a higher price, and
Speaker 1: that's gonna squeeze people still. Yet, I'd say this is
Speaker 1: gonna be a huge story, mat and you're coming up
Speaker 1: with this energy. I mean, we gotta stay on topic.
Speaker 1: My My electric bill last month was fifteen hundred dollars
Speaker 1: electric and gas. But if you were in Berlin like
Speaker 1: you were recently, it's gonna be really ugly coming up
Speaker 1: this well. And if Berliner has had air conditioners, it
Speaker 1: would already be bad. That's right, because they choose not
Speaker 1: to live well, that's right, Russell. Talk to us about
Speaker 1: the jobs market. We get a big data point tomorrow.
Speaker 1: We had jobs claims came in, uh, you know inline today,
Speaker 1: but you know, showing some some pickup in jobs claims.
Speaker 1: How do you think about the labor market. Yeah, I
Speaker 1: think there's pockets where we are seeing some actual layoffs,
Speaker 1: but there's still relatively modest the overall pocket. I don't
Speaker 1: think we're seeing broad scale um uh cuts by any means,
Speaker 1: but we are seeing slow down in the pace of hiring. Uh.
Speaker 1: That was evidenced what the other day the other day
Speaker 1: of the jobs the Jolts report. So um, I think
Speaker 1: that we're going to slow down for the month of
Speaker 1: July when it's reported, well, I'm looking for a gain
Speaker 1: of about two thousand. I do expect the unemployment rate
Speaker 1: to tick down to three point five percent because the
Speaker 1: household survey has been flat for a few months, and
Speaker 1: I think we'll get a little bit of a gain there,
Speaker 1: which could momentarily drop the unemployment rate, but I think
Speaker 1: it will probably rise slightly over the second half, so
Speaker 1: that can that gives the FED basically more ammunition to
Speaker 1: raise rates. Jim Bullard yesterday said he wants to see
Speaker 1: um the rates of the FED rates at the end
Speaker 1: of this year at three seventy five to four, and
Speaker 1: we're hearing people forecasting terminal rates at five to six.
Speaker 1: They were outliers, but that group is getting bigger and bigger.
Speaker 1: Is that what you think as well? No, we think
Speaker 1: that the terminal rate will probably be around somewhere between
Speaker 1: three and a half and four, so we're a little
Speaker 1: bit more optimistic. What pause or do they go back down?
Speaker 1: I think a pause. I think the pause will be
Speaker 1: a period of time. I don't think they'll next year.
Speaker 1: I do not expect them to start to cut once again.
Speaker 1: But I think over the second half of the year
Speaker 1: we will start to see inflation data. More broadly, we're
Speaker 1: already seeing any commodities and and UH lumber prices, things
Speaker 1: like that we're always seeing and a pair all of
Speaker 1: things like that. We're already seeing those declines, but we
Speaker 1: need to see it more broadly in the CPI and
Speaker 1: PCE numbers, and I think by the end of the
Speaker 1: year we are going to be seeing that with a
Speaker 1: couple of months under our belt. All right, Russell, great,
Speaker 1: great stuff, Thanks very much for coming in. Russell Price,
Speaker 1: chief economists for Mayor Price Financial based in Troy, Michigan,
Speaker 1: which is a very nice burb of Detroit, and russells
Speaker 1: just giving us some I think a little bit of
Speaker 1: an upbeat outlook for those Detroit lions coming out, So
Speaker 1: go figure that right now, let's get back to the
Speaker 1: markets here. The SNP off just slightly off about two
Speaker 1: tents of one percent. I want to bring in Shawn Snyder,
Speaker 1: he's head of investment strategy at City US Wealth Management. Sean,
Speaker 1: I mean, boy, we had the SNP off, you know,
Speaker 1: a little more than and it's nader. We had the
Speaker 1: um nastack off a little bit more than thirty. But boy,
Speaker 1: they've bounced back pretty well. I guess the question that
Speaker 1: we ask a lot is simply, I'm sure you're hearing
Speaker 1: from your clients, is is this bounce back for real
Speaker 1: or is this just the head fake? What do you think?
Speaker 1: First off, good morning, Thank you for having me. I
Speaker 1: very much appreciate it. Listen, I think there's a solid
Speaker 1: reason why the markets are up since mid June. You
Speaker 1: have better than expected earnings. You have increasing confidence that
Speaker 1: inflation is maybe finally peaked. Um. I know we've been
Speaker 1: a little bit like the Boy who Cried Wolf with
Speaker 1: peak inflation, but it looks like it might actually be
Speaker 1: here this time. You have a noticeable decline in treasury yields.
Speaker 1: You know, tech stocks were reacting to rising treasury yields
Speaker 1: and now they're reacting to them on the way down
Speaker 1: as well. Uh, And then you have the potential for
Speaker 1: less coggressive FED. So I do think that makes sense
Speaker 1: for markets to move higher. Now. The real question to
Speaker 1: me is, you know is the bottom in? And to me,
Speaker 1: that really depends upon whether we have a recession or not.
Speaker 1: And I think this idea that we've already seen the
Speaker 1: worst maybe wrong if you ask yourself. You know, recessions
Speaker 1: tend to last about eleven months on average, unemployment rate
Speaker 1: tends to rise by about two points six percent when
Speaker 1: you have a recession. Our stocks appropriately priced right now
Speaker 1: for that type of environment. I would argue maybe not,
Speaker 1: but it's gonna take some time for this to play out,
Speaker 1: and we have to see what the FED does and
Speaker 1: monetary policy operates with the lag, so we have to
Speaker 1: see what happens economic DATAE and I think this is
Speaker 1: just gonna be one of those times where we have
Speaker 1: to be really patient as investors. What do you think
Speaker 1: QT means? I mean, when do we start it in earnest?
Speaker 1: And how much that tightened up financial conditions because they've
Speaker 1: just gotten looser over the past few weeks. Well, that's right,
Speaker 1: so with the stock market actually going up, that loosens
Speaker 1: financial conditions, and financial conditions are about as loose as
Speaker 1: they were back in March. So in some regards, that
Speaker 1: actually makes the Fed's job a bit more difficult, and
Speaker 1: would actually argue for them to continue to tighten, even
Speaker 1: though they may wish to kind of pivot at some point.
Speaker 1: So that does make things difficult. Uh, you know, really
Speaker 1: is a question about three. You know, we head into
Speaker 1: twenty three, inflation is on a downtrend, the economy is
Speaker 1: holding up. You know, I think the FED can maybe
Speaker 1: dial back a little bit hope that things are you know,
Speaker 1: on track for that soft landing. But you know, it's
Speaker 1: really gonna be difficult if core inflation doesn't start to
Speaker 1: calm down, if shelter prices stay elevated, we continue to
Speaker 1: see wage growth, and I think the Fed may feel
Speaker 1: that it has to continue to raise rates into three.
Speaker 1: And I think it's gonna be really interesting story in
Speaker 1: because these dual mandates will become dueling mandates. Where what
Speaker 1: does the FED do at that point if unemployment is
Speaker 1: rising while inflation is staying hot, you know, hotter than
Speaker 1: hope for which one takes precedence, and that could add
Speaker 1: the market flatility, But we'll have to wait and see. Sean,
Speaker 1: we're about eighty percent of the way through earning season
Speaker 1: in terms of the SMP five hundred here, a little
Speaker 1: bit better than expected. I think, what are your takeaways?
Speaker 1: It is better than expected. I think we were expecting
Speaker 1: about five and a half percent EPs growth year on year.
Speaker 1: It's tracking above that full percentage point, probably six and
Speaker 1: a half seven percent, So that's certainly good. My takeaway
Speaker 1: from earnings and economic data that we're seeing this week
Speaker 1: under the market rallied on an uptick in i s
Speaker 1: M Services Index, is that to me, it's telling us
Speaker 1: that we're not in a recession yet, it doesn't confirm
Speaker 1: to me that one will ultimately be avoided. So I
Speaker 1: still think I'm being a big cautious here. But so far,
Speaker 1: I think the economy is holding up. Okay, we're continuing
Speaker 1: to see job growth. I think we'll see that again tomorrow,
Speaker 1: and I think that's positive news and kind of gives
Speaker 1: the Fed the green lights to you know, tighten a
Speaker 1: bit more. But you know, getting towards the end of two,
Speaker 1: I think it might be a bit more difficult. Sorry,
Speaker 1: we've heard that a lot of people UM are holding cash.
Speaker 1: Is that the case for you and your clients as well?
Speaker 1: Some of our clients maybe holding cash. But as a
Speaker 1: you know firm, our Global Investment Committee is fully invested.
Speaker 1: We're defensively positioned. So we're in areas like dividend growers, healthcare,
Speaker 1: consumer staples. UM. We also like natural resource stocks. We
Speaker 1: think that's kind of an inflation hedge. And then you know,
Speaker 1: certain pockets of fixed income US municipals, intermediate duration, investment
Speaker 1: grade credits, and we're basically looking for pockets of opportunity
Speaker 1: rather than sitting in cash. And you know, the problem
Speaker 1: was sitting in cash is in an inflationary environment. It's
Speaker 1: inflations running at nine point one percent, and you're in cash.
Speaker 1: That means you're losing nine point one percent at least
Speaker 1: if you're in equities, you know, you get some sort
Speaker 1: of dividend yield or fixed income, you get some sort
Speaker 1: of dividend um. So I think there's better alternatives, and
Speaker 1: it really really do think bonds are back. We think
Speaker 1: we saw the peak and yields probably earlier this year.
Speaker 1: So we think fixed income, you know, presents an opportunity
Speaker 1: here that's at least better than sitting in cash. All right, Sean,
Speaker 1: good stuff. Really appreciate getting a few minutes of your time.
Speaker 1: Shawn Snyder, he's head of an investment strategy at this
Speaker 1: little bank in New York City called City, the US
Speaker 1: wealth management side of that business here. So bonds are back,
Speaker 1: so says Mr Snyder. H And they're fully invested there
Speaker 1: at City. Vince Singarella, he's global macro strategist for Bloomberg News.
Speaker 1: Traded currencies back in a day, traded bonds back in
Speaker 1: the day. Um Now he is firmly ensconced in his
Speaker 1: work from home office set up which he has set
Speaker 1: up like no one else. He doesn't eat anybody because
Speaker 1: he's just done it all. And we love it when
Speaker 1: he checks in because he has some very interesting calls
Speaker 1: on these markets. Vince, I know you've been the way
Speaker 1: I phrased the people's Vince signal has got a very
Speaker 1: positive kind of view on risk ascid and boy for
Speaker 1: the last couple of months, you've been so spot on there. Uh,
Speaker 1: and I think it was kind of predicated upon the
Speaker 1: FET's not going to raise as much as people think.
Speaker 1: Do you still feel that way? Yeah, I feel very
Speaker 1: strongly that way. I mean I've still you know, as
Speaker 1: I've as you guys probably remember back from I've been
Speaker 1: fed watchers since my college days. I traded through Voker.
Speaker 1: I met Paul Woker. This is not Voker's inflation that
Speaker 1: we're fighting. UM, it's um, you know, the consumers getting
Speaker 1: tapped out revolving credits at up their team percent this year,
Speaker 1: uh wages up five inflations of nine percent. It's not
Speaker 1: keeping chasing their tail a little bit there. They made
Speaker 1: a huge era um with their transient call. Uh. They're
Speaker 1: trying to correct that save some credibility. And I'm I'm
Speaker 1: afraid they're just gonna make another another policy mistake because
Speaker 1: the consumer is just gonna the consumer is gonna taper
Speaker 1: going into the third and fourth quarter, so demand is
Speaker 1: going to drop to meet supply. We're not going to
Speaker 1: get this runaway inflation that said seems to think that's
Speaker 1: going to continue. It's already starting to roll over, dude.
Speaker 1: And when that happens. When that happens, I think equities,
Speaker 1: especially in the nastack and the tech sector are gonna rock.
Speaker 1: And the short end of the Treasury card was going
Speaker 1: to be brilliant because when those expectations dropped, those bonds
Speaker 1: are gonna sore. They're they're up to levels where they
Speaker 1: see inflation at three d percent rates at three percent,
Speaker 1: you need to get on a conference call with the
Speaker 1: bond market man because, um, the result on POSAR, because
Speaker 1: you know, it seems like that narrative of the Fed,
Speaker 1: you know, going to three and a half or four
Speaker 1: and then cutting in like even the first half of
Speaker 1: three has been flipped on its head over the last week. Now,
Speaker 1: all of a sudden, everybody is talking about five percent
Speaker 1: for a terminal rate, even six and those who are
Speaker 1: more conservative, um, still think that the FED is at
Speaker 1: least gonna pause for the year and not cut. Well,
Speaker 1: I'm not so sure they're going to cut necessarily. Um,
Speaker 1: you know, let's let's say, say if they raise rights
Speaker 1: to three to three and a half percent and you
Speaker 1: have inflation coming down, inflation is not going to come
Speaker 1: down at three to three and a half percent by
Speaker 1: year end. So they're perfectly, you know, in a situation
Speaker 1: to stay where they are and pause. But I mean,
Speaker 1: let's let's you know, look at the yel curve. The
Speaker 1: ten uere yield is not pricing in five FED interest
Speaker 1: rates or or maintaining inflation with thirty eight basis points
Speaker 1: inverted from the twos. The twos are pricing in three
Speaker 1: to twent and a half percent, said with being just
Speaker 1: over three percent, but the rest of the curves inverted
Speaker 1: for a reason that the bond market doesn't believe this,
Speaker 1: this trend for past this year is going to continue
Speaker 1: very much. So what I haven't heard recently is stagflation.
Speaker 1: That was kind of a thing that I had to
Speaker 1: go back into my little TechBook and check it out.
Speaker 1: And we haven't been talking about that much recently. Had
Speaker 1: why not, Well, you know, the reason again. And when
Speaker 1: I say this is in poker's inflation, I sat in
Speaker 1: those gas lines with the odd and even license plate.
Speaker 1: What are you driving? Back to n Vince oh Man,
Speaker 1: It was a nineteen seventy one bulick was saber that
Speaker 1: got eleven miles to was I was enough a lot um.
Speaker 1: The reason why we had that and and hopefully the
Speaker 1: Inflation Reduction Act won't repeat this is the the White
Speaker 1: House and Nixon administration in post price controls, and they
Speaker 1: thought that they could put a cap on prices and
Speaker 1: therefore a cap inflation. But what they did it wasn't
Speaker 1: across the board. So for instance, you had a cap
Speaker 1: on beef prices to keep you know, meat prices down
Speaker 1: for the consumer, but they didn't cap the grain prices
Speaker 1: for the ranchers, so they could no longer raise cattle
Speaker 1: out of profit, so they stopped. And what happened, prices
Speaker 1: went through the roof because of the supply demand issue.
Speaker 1: So unless the administration makes the same foolish mistake as
Speaker 1: they did in the seventies, this isn't that that kind
Speaker 1: of inflation. The demand will slow and it will come
Speaker 1: back to balance. We're already starting, by the way, that's
Speaker 1: an interesting point, Vince. You know, so many people at
Speaker 1: the UM well for the last you know, six months,
Speaker 1: have been saying this is all about the supply side,
Speaker 1: and the FED can't do anything about it, and then
Speaker 1: they heard UM. I believe Paul and Tom were talking
Speaker 1: to Michael Darta a couple of days ago and he said, look,
Speaker 1: nominal growth is really high and to meet that signals
Speaker 1: that demand is a huge part of the problem. Do
Speaker 1: you think that's the case. Yeah, but I think it's
Speaker 1: gonna slow. I mean, we saw mortgage rates today, you
Speaker 1: drop about five percent from the first time in April. UM.
Speaker 1: You know, the housing markets beginning to slow, and that's
Speaker 1: where I think that You know, what people miss is
Speaker 1: the consumer's real wealth is in their homes these days,
Speaker 1: most of them aren't invested in the stock market. So
Speaker 1: if prices start to come down or or we're starting
Speaker 1: to see in the real estate market here in the Northeast,
Speaker 1: what we're seeing as sales decline. So we're not really
Speaker 1: seeing prices come down yet, but we're starting to see
Speaker 1: a decline in sales. Naturally, what will follow is a
Speaker 1: decline in prices, and in the US, consumers see that
Speaker 1: and they see that their wages aren't keeping up with inflation.
Speaker 1: I mean, no one's getting a nine percent raids this
Speaker 1: year to stay with stay to keep up with that
Speaker 1: that pace, and it's likely going to be pretty high
Speaker 1: next year as well. So at some point when you
Speaker 1: see revolving credit up on in a year, that's a
Speaker 1: consumer that's really tapped out. And I just don't see
Speaker 1: that as lasting for a very very long time. Vince.
Speaker 1: You know here at Bloomberg Radio and TV we make
Speaker 1: a big day out of jobs Day and tomorrow's Job's Day.
Speaker 1: What are you looking for when the granddaddy of all
Speaker 1: economic statistics? Exactly, that's how you guys play it. I'm in,
Speaker 1: I'm all in, what are you what are you looking for? Vince?
Speaker 1: We'll see this is the thing, and I have I
Speaker 1: disagree once again with the majority opinion on this. The
Speaker 1: jobs numbers are will definitely begin to slow, and that's
Speaker 1: because they're a lagging indicator. And when I keep seeing
Speaker 1: the FED talk about a strong job market, I want
Speaker 1: to go back and like throw my economic textbooks at somebody,
Speaker 1: because we are going to see jobs slow, but it's
Speaker 1: gonna lag the rest of the economy. Inevitable. We're starting
Speaker 1: to see the job cut are left it right from
Speaker 1: some of the major corporations. It was an announcement again
Speaker 1: this morning of another major corporation cutting jobs. It is
Speaker 1: gonna slow, and my fear is that the fet is
Speaker 1: walking into some kind of like a bear trap where
Speaker 1: you're gonna raise risk alow but jobs slow and being
Speaker 1: a legging indicator, it's already gonna be too late. You
Speaker 1: gonna roll over right, all right, Vince, good stuff. As always.
Speaker 1: We got the bullish call on stocks and risk assets.
Speaker 1: He's been consistently making a call for the last a
Speaker 1: couple of months there um and he's been right. So
Speaker 1: he's sticking with He's you know, no no waiver in
Speaker 1: that voice. You know. Some of the news that's coming
Speaker 1: across the tape over the last few days just kind
Speaker 1: of makes me chuck a little bit coming out of
Speaker 1: Wallster because it just seems like it was just weeks
Speaker 1: lash months ago that we were seeing stories about how
Speaker 1: Wall Street couldn't hire people fast enough and they couldn't
Speaker 1: pay their incoming analysts and associates enough and raising uh,
Speaker 1: you know, salaries every other week. It's se were like
Speaker 1: you were asking every banker that came on the show,
Speaker 1: like did you go into your manager's office and demand
Speaker 1: double double bonus? You know? And now we've got stories
Speaker 1: like the exact opposit. We we're talking about cutting jobs,
Speaker 1: plunging bonus pools. Um. I got to get to the
Speaker 1: bottom of this. We can do that with Hannah Levitt,
Speaker 1: financial reporter for Bloomberg New She joins us live, Yes
Speaker 1: Live on Bloomberg Interactive Broker Studio. We appreciate that, Hannah.
Speaker 1: What's going on Wall Street? I mean, I know it's
Speaker 1: a yo yo ball, pay pay a lot, pay terrible,
Speaker 1: pay a lot. Where are we now? And what are
Speaker 1: the banks telling you? Hey, yeah, thank you for having me. Um.
Speaker 1: So it looks like bonuses, especially for the investment bankers,
Speaker 1: are set to be way down this year. And as
Speaker 1: you mentioned, last year was this you know, crazy on
Speaker 1: sort of deals and war for talent and they couldn't
Speaker 1: you know, pay people enough and get enough people to
Speaker 1: you know, work there and do their deals. And now
Speaker 1: the tides have clearly turned. Um. There's been a massive
Speaker 1: slote and I think something like forty some percent drop
Speaker 1: in investment paying king revenue at the big five banks.
Speaker 1: And you know with that, the bonuses will not be
Speaker 1: what they were last year. Yeah, I'm looking at M
Speaker 1: A GO right now, and I see that. You know,
Speaker 1: we're already in August UM, but it's only two point
Speaker 1: three trillion dollars worth of total M and A and
Speaker 1: a lot of that one point one trillion is pending,
Speaker 1: So who knows if it's going to actually happen. UM.
Speaker 1: Why the big slowdown this year? You know, I think
Speaker 1: it's actually really interesting if you look at it um
Speaker 1: and you look at how trading has been good, and
Speaker 1: it's the it's two sides of the same coin, right,
Speaker 1: because there's been all this you know, persistent inflation, recession, fears,
Speaker 1: Russia's invasion of Ukraine, all these things that have led
Speaker 1: to a lot of you know, market moves, market turmoil, uncertainty,
Speaker 1: and people don't want to do deals in that kind
Speaker 1: of uncertainty, and so it gets you know, really unpaused.
Speaker 1: But then on the flip side of that, you see
Speaker 1: the trading results have been up, and that will be
Speaker 1: like kind of a lone bright spot bonus wise, as
Speaker 1: if now they're looking to be up a bit. So,
Speaker 1: by the way, I just wanted to just for clarity
Speaker 1: on what we saw it last year more than five
Speaker 1: trillion dollars in deals in the full year, and even
Speaker 1: in UM you know, the first COVID year of we
Speaker 1: saw three and a half trillion, So we really need well,
Speaker 1: we're not gonna eclipse last year and we're probably not
Speaker 1: going to even match, which is insane because that's when
Speaker 1: everybody had to work from home. Yeah, well, I mean
Speaker 1: I think the work I mean tell us you know
Speaker 1: where are where is Wall Street? On the work from home?
Speaker 1: Because we had so many different messages coming out of
Speaker 1: the big names, the big CEOs on Wall Street was
Speaker 1: got to go back in the office ubs say no,
Speaker 1: and you know, say no, you can in city saying
Speaker 1: no will be flexible kind of how's it evolved? You know,
Speaker 1: it's interesting because if if we had been having this
Speaker 1: same conversation a year ago, UM, I could have spent
Speaker 1: you know, five ten minutes walking through how each of
Speaker 1: the different firms was approaching it slightly differently and you know,
Speaker 1: something more flexible than others. Really, it is not UM
Speaker 1: something that I hear about from sources anymore. It's like there,
Speaker 1: you know, they're in the office, some are you know,
Speaker 1: five days, some are three day. But the point is
Speaker 1: like it's it is what it is. At this point
Speaker 1: where it's kind of a non people will be grumbling
Speaker 1: about it a little bit. Paul grumbles about it every day,
Speaker 1: that's funny, and David Tellman probably does too, but that
Speaker 1: doesn't change the fact that his bankers want flexibility. Yeah,
Speaker 1: but I don't know. I mean, I think something that
Speaker 1: will be interesting to watch is do the bankers and
Speaker 1: the people demanding flexibility still hold the chips when we're
Speaker 1: in recession than their job cuts and good thing that? Um, yeah,
Speaker 1: that's gonna be interesting to see when you know, if
Speaker 1: and when this economy does go into a recession, the
Speaker 1: balance of power not just on Wall Street, but just
Speaker 1: across the economy, which had been decidedly in employees favor, um,
Speaker 1: which is not the norm, I don't think, um, certainly
Speaker 1: not in the last years. Right. And now if you
Speaker 1: go into recession, is that going to switch back and
Speaker 1: employers can be like okay, kids back in the office. Well,
Speaker 1: I think it's very different for for bankers than it
Speaker 1: is for factory workers on the floor, right, because there
Speaker 1: still isn't enough stuff so we need them. We still
Speaker 1: need flight attendance. We still need you know, all of
Speaker 1: those the service people as well. At bankers, it seems
Speaker 1: like uh there, um, you know, not as necessary anymore. Absolutely.
Speaker 1: I mean we were hearing about these crazy like multimillion
Speaker 1: dollar packages and stuff just I mean months ago that
Speaker 1: was the state of affairs and like you know, everyone
Speaker 1: poaching everyone from everywhere, um, getting all these competing offers.
Speaker 1: And now it's first year salaries are going up to
Speaker 1: one ten, one twenty exactly like in the span of
Speaker 1: weeks or months. But now I mean clearly, you know,
Speaker 1: even during earnings, which is a couple of weeks ago,
Speaker 1: banks we're talking about focusing on costs. When when you're
Speaker 1: focusing on costs, that does not mean that well, back
Speaker 1: in the day, focusing on costs meant the town car
Speaker 1: that was the first thing to go. The town car
Speaker 1: home from work was the first thing to go. Are
Speaker 1: they still as well, Street still losing talent to private equity.
Speaker 1: It seems like those first year analysts come in and
Speaker 1: they barely are there and they're already being interviewing for
Speaker 1: some of these p jobs. Our crypto Yes, well, that's
Speaker 1: that's absolutely still the dynamic. I think crypto. Um, maybe
Speaker 1: less so today first as a year ago or even
Speaker 1: a couple of months ago. UM, But yeah, interesting, interesting, Yeah,
Speaker 1: you know, so it's interesting. We'll see how that plays out.
Speaker 1: But you know, headcount, that's one of the expenses. Uh's
Speaker 1: certainly the one that they can manage aggressively, both on
Speaker 1: the upside and the downside. So we'll see how that
Speaker 1: plays out. UM. On Wall Street. Hannah Levitt, financial reporter
Speaker 1: for Berloomberg News, joining us with that reporting again, big
Speaker 1: big changes on Wall Street, the profits engine. There a
Speaker 1: lot of it from the banking side, the new issue
Speaker 1: and side, both and equity and fixed to come. As
Speaker 1: we've seen from the results from the big banks, uh,
Speaker 1: you know, trailing where they were last year and even
Speaker 1: in as well. And so what do you do you
Speaker 1: take a look at the cost line, what's going on
Speaker 1: out in the world. Let's bring our next guest, May May,
Speaker 1: who uh CEO and co founder of Vaccinity. Vacinity is
Speaker 1: a publicly trade company trades under the symbol v a
Speaker 1: x X on the NASTAX. So you punch that into
Speaker 1: your Bloomberg Professional service. May May, thanks so much for
Speaker 1: joining us here. I love for you've got if you
Speaker 1: just kind of give us a quick overview of what
Speaker 1: you're doing at Vaccinity right now. Yeah, great, great to
Speaker 1: be here, Paul. Um. So, yeah, Vaccinity is obviously a
Speaker 1: vaccine development company, and our missions really to bring the
Speaker 1: efficiency of vaccines to chronic diseases. Um. And we decided
Speaker 1: to use our technology to go after COVID as well,
Speaker 1: particularly a next generation COVID booster. Um, just to show
Speaker 1: the breath and depth of the technology. But um, you know,
Speaker 1: we want to bring convenience, impactful, transformative medicines to the world. Well,
Speaker 1: and it looks like you've been very successful in doing that,
Speaker 1: certainly bringing them to the NASDAC. I see that you've
Speaker 1: overseeing the successful spinoff of five companies. Um. Are they
Speaker 1: all in the same kind of biotech biomedical um? Arena. Uh,
Speaker 1: they're all in the biopharmaceutical space. So the predecessors have
Speaker 1: been actually in Asia. So we spun off an animal
Speaker 1: health company, vaccine company that vaccinates almost a court of
Speaker 1: the world's livestock swine. Um A got to be careful
Speaker 1: to swine, right, we can't say pigs anymore ever since
Speaker 1: the problem in China. Right, Yes, yes, um, that that's
Speaker 1: that's right. So UM yeah, So so it's all been
Speaker 1: in the same same area, but mostly in Asia and
Speaker 1: then UM the most recent one was Vaccinity and that was,
Speaker 1: you know, a combination of two predecessor companies, one focus
Speaker 1: under a logical diseases and the other one focused on COVID.
Speaker 1: So what so what is may made the UM What
Speaker 1: is a variant inclusive COVID booster? You know? So when
Speaker 1: we were at the White House, UM, Dr Founci basically said,
Speaker 1: we need something that is UM more universal like right,
Speaker 1: so next generation we're looking at broader coverage UM and
Speaker 1: that's kind of where ours comes in, and more durable,
Speaker 1: so you don't want to be going out getting boosters
Speaker 1: every three months. UM. And we take what we call
Speaker 1: multitope approach, and that means not just looking at the
Speaker 1: spike protein. We cover other epitopes on the virus UM
Speaker 1: so that you have broader both be anti cell coverage
Speaker 1: and hopefully that means that it's UM, you know, more
Speaker 1: protective against amicron and future emerging variants, whatever they may be.
Speaker 1: Where are we in the timing here? Because I I
Speaker 1: for one, was just and I think a lot of
Speaker 1: most people were just so so impressed by the ability
Speaker 1: of the healthcare community to come up with these vaccines
Speaker 1: so quickly, uh and have them be so effective. Um.
Speaker 1: Just extraordinary effort there over the last several years. Where
Speaker 1: are we in terms of getting to that next generation
Speaker 1: COVID treatment or you know pill kind of thing. You know,
Speaker 1: it's it's funny, So I echo you it's been unprecedented. UM.
Speaker 1: Next generation is in some ways trickier because you've got
Speaker 1: to figure out where do you want to improve? Right,
Speaker 1: there are so many areas to improve. UM. I think
Speaker 1: we're pretty close, and there are a number of other efforts.
Speaker 1: We ourselves are in a phase three pivotal trial of
Speaker 1: our compound called UB six twelve uh and on track
Speaker 1: to deliver a top line read out later this year. UM.
Speaker 1: And if successful, you know, this study could support conditional
Speaker 1: approval of our vaccine in a whole bunch of jurisdictions.
Speaker 1: So I think lots of progress have been made. And
Speaker 1: I think ever since the first vaccine has got on
Speaker 1: the market, people have been working on next generation ones.
Speaker 1: And again we're focused on being able to address future variants,
Speaker 1: being durable, being able to be distributed to you know,
Speaker 1: all over the world, because at the end of the day,
Speaker 1: there's a global problem. And also something that that is
Speaker 1: interesting to me particularly is safety and tolerability. Right, I
Speaker 1: want to develop the vaccine that I give my loved ones, um,
Speaker 1: one that doesn't necessarily make you feel sick, one that
Speaker 1: you know, you give your kids. So there's a bunch
Speaker 1: of stuff that that everyone's working on. But we're looking
Speaker 1: at the next wave pretty soon, how are and surely
Speaker 1: it will come and thank thank We're thankful to people
Speaker 1: like you who are are helping us combat it UM
Speaker 1: covid though not nearly as ugly a disease as Alzheimer's
Speaker 1: or Parkinson's. And you're also working on UM drugs or
Speaker 1: therapies to fight that. Where are you That's what really
Speaker 1: gets me going. I love it UM. So we have
Speaker 1: shown in a number of clinical trials and humans that
Speaker 1: are vaccine works to do what we wanted to in Alzheimer's, Parkinson's,
Speaker 1: were actually about to Actually we're starting a phase one
Speaker 1: in migraine patients and UM. We're also developing a vaccine
Speaker 1: against heart attack and stroke, so something that can lower
Speaker 1: cholesterol on folks. So the Alzheimer's program is you know,
Speaker 1: entering its large scale trial, so we call it a
Speaker 1: phase to be UM. We've already shown that it can,
Speaker 1: you know, get your body to develop antibodies against these
Speaker 1: toxic amyloid alligamers. We've shown that it can kind of
Speaker 1: it neutralized the target UM and that in our you know,
Speaker 1: last phase to a study that we can slow the
Speaker 1: progression of decline. And now we've got to show it
Speaker 1: on scale, so that study, once launch, will take UM
Speaker 1: uh you know, eighteen months or so to complete UM.
Speaker 1: So that's exciting stuff. That would be incredibly exciting, uh,
Speaker 1: you know, because if you've watched someone suffer from either disease,
Speaker 1: it's just so horrendous and so many people do and
Speaker 1: right now there's nothing, really nothing that can be done.
Speaker 1: So I think everyone is, uh, everyone is with you
Speaker 1: and hoping that you guys make some real progress there.
Speaker 1: Maybe yeah, thank you. It is devastating and U. And
Speaker 1: the one that we we UM recently announced just non
Speaker 1: human primate data is against a target called PCSK nine
Speaker 1: for hypoclesterma folks with high cholesterol. You know, cardiovascular diseases
Speaker 1: are still the number one killer around the world, and
Speaker 1: if you can lower cholesterol. You can make a magnificently
Speaker 1: large impact. All right, may Mate, thank you so much
Speaker 1: for joining us. May Mee, who CEO and co founder
Speaker 1: of the company Vaccinity, a biotech company doing some important
Speaker 1: work there. Thanks for listening to the Bloomberg Markets podcast.
Speaker 1: You can subscribe and listen to interviews with Apple Podcasts
Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
Speaker 1: on Twitter at Matt Miller three. On bal Sweeney, I'm
Speaker 1: on Twitter at pt Sweeney before the podcast. You can
Speaker 1: always catch us worldwide at Bloomberg Radio