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Speaker 1: This is Coast to Coast. I'm Carol Masser. We are

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Speaker 1: here every day bring you the latest news from the

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Speaker 1: world of business and finance and the most interesting stories

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Speaker 1: in global technology from Silicon Valley and beyond. Powered by

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Speaker 1: our more than twenty seven hundred journalists and analysts in

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Speaker 1: more than one twenty countries. You can download Coast to

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Speaker 1: Coast on iTunes, SoundCloud, or Bloomberg dot com. You can

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Speaker 1: also listen to our radio show weekdays at two pm

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Speaker 1: Eastern only on Bloomberg Radio. So Microsoft buying get Hub,

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Speaker 1: getting together with get hub for seven and a half

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Speaker 1: billion dollars in stock, bringing in house a community of

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Speaker 1: twenty eight million programmers who published code openly, and really

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Speaker 1: extending a shift away from a strategy of shrouding its

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Speaker 1: software in secrecy. Those are the words of Dina Bass.

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Speaker 1: She's reporting on this story. She's technology reporter up Bloomberg News.

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Speaker 1: She joins us on the phone from Seattle. Dina, good

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Speaker 1: to have you here with us. Um, tell me about

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Speaker 1: this deal. Uh, seven and a half billion nut chump change,

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Speaker 1: that's for sure, But tell us why this acquisition maybe

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Speaker 1: makes sense for Microsoft or what you're hearing about whether

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Speaker 1: or not it does. Sure. Yeah, Microsoft has been working

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Speaker 1: in the last three or four years under CEO Satan

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Speaker 1: Adela more in an open source software development model um

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Speaker 1: that it's been contributing code to get hub. It's actually

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Speaker 1: been one of the biggest contributors to get hub. It's

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Speaker 1: been allowing open source users and Linux operating system users

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Speaker 1: to host their apps on Microsoft Cloud software. And it's

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Speaker 1: really moving away from Windows and more into this broader

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Speaker 1: software development ecosystem and get hubs a huge community of developers,

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Speaker 1: and it makes a lot of sense as Microsoft trying

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Speaker 1: to expand more into an appeal more to uh lots

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Speaker 1: of software developers from that community to acquire a good hub.

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Speaker 1: Isn't it funny or is it? I don't know. Maybe

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Speaker 1: it is ironic, maybe it's not. But Apple's holding its

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Speaker 1: Worldwide Developers event today and you have this deal cappen.

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Speaker 1: Is Microsoft trying to be more like Apple in terms

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Speaker 1: of how it deals with developers? No, I'm not sure

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Speaker 1: that that that that's similar, to be honest, And I

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Speaker 1: don't know if the timing was coincidental or just when

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Speaker 1: it when it finished things. If anything, I think in

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Speaker 1: some ways it's more Google like I think Google other

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Speaker 1: really big company that that does a lot on geth hub,

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Speaker 1: and I think what Microsoft is really just dealing with

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Speaker 1: is a reality and the shift in the way that

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Speaker 1: software has developed. You know, back in the early two thousands,

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Speaker 1: when Microsoft was focused on more of a closed model,

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Speaker 1: when Microsoft executives you know, decried open source methods, it

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Speaker 1: was a different world. At this point, this is a

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Speaker 1: pretty critical way of developing software, and you know, Nadala

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Speaker 1: has been shifting the company, as I said, in that

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Speaker 1: direction more and more. At the same time, Windows has

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Speaker 1: been on the wane for for many reasons, including the

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Speaker 1: continued contraction of the PC market where it was historically strongest.

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Speaker 1: Are Emily Chang Bloomberg Technology actually caught up with such

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Speaker 1: a nidella the CEO of Microsoft a little bit earlier

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Speaker 1: talking about this deal. Let's listen to that. We really

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Speaker 1: have to earn the trust. There's no question of that.

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Speaker 1: Our actions from the recent past should help assure every

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Speaker 1: open source developer of what Microsoft's intent are, and of

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Speaker 1: course they should measure us by what we do going

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Speaker 1: forward and hold us accountable. If you think about Microsoft,

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Speaker 1: We've always been a developer first company. That's how we

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Speaker 1: got started with the developer tools for the Altaire uh

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Speaker 1: and now we're all in on open source uh. And

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Speaker 1: so with that, really the coming together a GitHub and

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Speaker 1: Microsoft makes a lot of sense for us, all right.

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Speaker 1: So obviously such An adela CEO of Microsoft earlier talking

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Speaker 1: to Emily Chang about that deal. Did both of them

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Speaker 1: need to do something in these areas? I was reading

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Speaker 1: your story and it talked about gethub trying to find

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Speaker 1: I think a ceo UM tell me about, you know,

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Speaker 1: the necessity from each side to have to do something. Sure,

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Speaker 1: and when we talked before about where Microsoft's been trying

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Speaker 1: to broaden it, so I think that was the need

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Speaker 1: from them. GitHub, as you mentioned, was in a bit

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Speaker 1: of a strategic and executive quandary. The company is area

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Speaker 1: the product is very popular um with developers and very

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Speaker 1: critical to what they do, but they hadn't been able

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Speaker 1: to find the CEO and they need to find a

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Speaker 1: way to make money and grow revenue at a more

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Speaker 1: rapid clip. So I think that strategically this helps them

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Speaker 1: in that way. But that clip you played with Santia

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Speaker 1: also talks about another issue for Microsoft, which is will

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Speaker 1: the developers who already used get hub except Microsoft as

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Speaker 1: sort of the new master of the house. And I

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Speaker 1: think that's you know, that remains to be seen. If

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Speaker 1: you look on social media, some people are quite happy

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Speaker 1: about it, you know, seeing Microsoft rescuing in some ways

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Speaker 1: to get hub, which was having some strategic and perhaps

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Speaker 1: financial issues. But on the other hand, there's a real nervousness.

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Speaker 1: Even though Microsoft has been much more friendly to the

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Speaker 1: open source community, I think there's a historical concern in

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Speaker 1: parts of that community about whether they can really trust Microsoft.

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Speaker 1: And that's where you hear h Nadella talking about having

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Speaker 1: to earn the trust. Well, we'll see how that goes,

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Speaker 1: right such a Nidela actually tweeted Microsoft plus get how

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Speaker 1: they goals empowering developers. But as you said, time will tell, right, Yeah, absolutely,

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Speaker 1: I think you know, the idea of them allowing get

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Speaker 1: hub to remain in an independent company with its own CEO,

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Speaker 1: potentially at least out of the gate sense of message,

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Speaker 1: that's more positive. They were talking about it being independent.

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Speaker 1: They were talking about you know, developers and coders that

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Speaker 1: use GitHub can continue to use whatever tools they use.

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Speaker 1: They can continue to post whatever they write to any

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Speaker 1: operating system, be it for Microsoft or anyone else. So

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Speaker 1: they're they're taking these initial steps to make people feel

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Speaker 1: feel comfortable and feel like they will be welcomed. But

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Speaker 1: there's still, you know, a bit of a residual nervousness

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Speaker 1: about from some parts of that community as to whether

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Speaker 1: they can trust Microsoft at their word and whether they

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Speaker 1: can work with them, or whether Microsoft in some ways

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Speaker 1: wants to control control get ub in a way that

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Speaker 1: they developers may not like. Hey, you know, Dina, what

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Speaker 1: does it tell us a little bit more worldly about

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Speaker 1: what Microsoft is up to and setting Adela specifically is

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Speaker 1: up to. Because you know, you point out your story

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Speaker 1: Um today that he has done. This is the third

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Speaker 1: of Nidela's for your tenure that's valued at above two billion.

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Speaker 1: Talk about LinkedIn, you talk about Minecraft, Mojang, and so

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Speaker 1: you have this one. Um, what does it tell you

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Speaker 1: about kind of where he's taking this company? Sure, I

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Speaker 1: think it's those three have interestingly, three different strategic priorities,

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Speaker 1: but they're all ones that he's focused on. Uh. The

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Speaker 1: other thing that is common between them is that he's

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Speaker 1: trying to buy companies that are growing. If you remember

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Speaker 1: the last deal of this, the Bomber Arrow was no

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Speaker 1: Kio which was a shrinking company. Uh, Microsoft really wants

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Speaker 1: to buy companies that are in areas that have used

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Speaker 1: as lucrative and continuing to grow. There's also a sense

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Speaker 1: that we saw with LinkedIn as well, of trying to

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Speaker 1: let those assets run on their own without Microsoft sort

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Speaker 1: of encumbering them in the way that they maybe did

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Speaker 1: in the past with other companies that they purchased, Like

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Speaker 1: Skype would be a good example. LinkedIn, as you'll you'll recall,

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Speaker 1: is also running independently with its own CEO Jeff Leaner. Yeah, right,

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Speaker 1: kind of letting them do their thing. Um, good to

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Speaker 1: check check in with you, Dina, Hey, listen, thank you

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Speaker 1: so much appreciated. Dina Bass. She's technology reporter Rapp Bloomberg News.

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Speaker 1: She's on the phone from Seattle. Microsoft shares, by the way,

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Speaker 1: just a little bit higher in today's session. In fact,

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Speaker 1: they're just up about eight tens of a percent, up

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Speaker 1: seventy eight cents to one dollars fifty six cents a share.

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Speaker 1: As for eighteen this stock shares a Microsoft up almost

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Speaker 1: eighteen point eight percent. All right, you are listening to

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Speaker 1: Bloomberg Markets. Coming up on the other side of the break,

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Speaker 1: we'll get a check on your top business stories and

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Speaker 1: update on today's training session and the ASCO conference underway

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Speaker 1: this week, and we've already seen some headlines. We get

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Speaker 1: an update on what you need to know about the

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Speaker 1: latest cancer treatments. This is Bloomberg Radio, all right. They

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Speaker 1: are talking about a lot of medicines at the American

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Speaker 1: Society of Clinical Oncology or ASCO annual meeting. It's underway

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Speaker 1: in Chicago, bringing together and within thirty two tho oncology

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Speaker 1: professionals from around the globe to talk about treatment modalities,

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Speaker 1: new therapies, and really ongoing controversies in the field. Got

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Speaker 1: some reports in Factor over the weekend. It's definitely impacting

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Speaker 1: specific healthcare stocks. Today. Let's get though to the news

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Speaker 1: from someone who is there. Ren Benjamin is senior biotech

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Speaker 1: analyst at Raymond James. He joins us on the phone

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Speaker 1: from that NASCAR meeting in Chicago. Ran, great to have

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Speaker 1: you here with us. I love this event and loving, uh,

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Speaker 1: you know, kind of watching some of the developments that

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Speaker 1: come out. Tell me what's kind of what's got most

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Speaker 1: of the buzz uh in terms of the event so far. Sure,

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Speaker 1: thanks for having me, Carroll, you know, Net and Matt.

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Speaker 1: This is uh, this has been a really good, incrementally

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Speaker 1: positive meeting. You know that this is the eight hundred

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Speaker 1: pound gorilla you know of the of the medical space,

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Speaker 1: especially oncology. You know, from a clinical perspective, changing um practice,

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Speaker 1: changing perspective, we think Mark really took the gold here

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Speaker 1: bringing in some of very impressive numbers for patients who

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Speaker 1: are treated with non small sell lung cancer. This has

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Speaker 1: been a very big competitive battleground between the big farmers,

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Speaker 1: Rose b M S. Mark, and Mark's data in non

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Speaker 1: small cell lung cancer really showed a significant improvement in

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Speaker 1: patients lives responding, uh, you know, over the control of

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Speaker 1: four point five month improven in survival and for your

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Speaker 1: listeners who you know kind of think that, oh it's

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Speaker 1: only four point five months, remember that that's the media

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Speaker 1: and there are fifty presentations that are doing much much

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Speaker 1: better than that, And so that that was really the

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Speaker 1: number one I think news item from this year's ASKA

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Speaker 1: and having known you know, if you know, if you've

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Speaker 1: ever known somebody who's had to deal with lung cancer,

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Speaker 1: I mean, it really is pretty swift and pretty tough.

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Speaker 1: I should put out two merk shares are up about

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Speaker 1: two as we speak. UM. I also saw some report

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Speaker 1: about breast cancer over the weekend that pretty significant as well,

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Speaker 1: So we we didn't notice that as much we we

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Speaker 1: we thought there was maybe a little bit of controversy

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Speaker 1: and that uh UM there was some results that were presented,

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Speaker 1: and I believe it was Ross who maybe UM pulling

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Speaker 1: that drug, but we're not entirely sure on that one. Okay,

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Speaker 1: what else there are are is everybody kind of talking

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Speaker 1: about sure. So you know this the theme at this

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Speaker 1: year's Asking is actually precision medicine, and so there's a

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Speaker 1: big focus on um UH. You know, some of these

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Speaker 1: patients who have very specific cancer mutations. Also oncology. Um

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Speaker 1: is a name that UH really walked away with quite

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Speaker 1: a bit, about seventy seven percent of patients responding. What

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Speaker 1: was interesting here is that it really didn't matter what

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Speaker 1: the tumor was as long as it had a particular

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Speaker 1: type of um UH designation, a repted fusion as they're called.

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Speaker 1: So probably one of the best examples at the conference

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Speaker 1: of of this position in medicine. And then, of course,

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Speaker 1: as you know, there's a lot of excitement over io

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Speaker 1: or immuno oncology combination drugs, and so you know, you're

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Speaker 1: everyone is looking to improve upon the back point of

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Speaker 1: checkpoint inhibitive therapy. As as you know, we just talked

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Speaker 1: about Mark Pemberlis ever true to their main drug three

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Speaker 1: point eight billion dollars in two thousand and seventeen sales

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Speaker 1: at Divo five billion in sales, but they're really affecting

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Speaker 1: about thirty patients, and so this next wave is to

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Speaker 1: it's really improve upon that, and names like Nectar and

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Speaker 1: Armo you know, are are all involved in that and

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Speaker 1: frankly causing some controversy based on some of the data

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Speaker 1: that's been that's been announced here. Yeah, I was just

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Speaker 1: looking at some of the stocks. Let me just go

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Speaker 1: back to lockso for a second. UM stocks up a

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Speaker 1: hundred and eighteen percent so far this year, and today

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Speaker 1: it's really been bouncing around. It was up almost twelve

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Speaker 1: percent and then right now it's down about one point

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Speaker 1: six percent. Is it just some disappointment here or it's

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Speaker 1: just kind of kind of all over the place now.

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Speaker 1: So I think I think the listeners really need to

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Speaker 1: remember a couple of things, you know, especially when you're

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Speaker 1: trading UM, small MidCap bio technology stocks that there is

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Speaker 1: there is a run up that we typically see going

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Speaker 1: into conferences like this as investors get excited they've seen

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Speaker 1: the abstract uh, and then there is a typical sort

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Speaker 1: especially when there's been an anticipation built up. Um. And

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Speaker 1: so I think that's what you're seeing, you know, in

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Speaker 1: a name like Classo, which I think surprised to the

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Speaker 1: upside nonethe less. Yeah, I'm just taking a look. It

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Speaker 1: did a bump up like in mid mid May, and

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Speaker 1: it's up about from from May sixteenth. It's up about right. So, um,

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Speaker 1: there's been some heavy, heavy expectations. Um. It's interesting too.

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Speaker 1: And I do love talking about cancer treatment because I

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Speaker 1: do feel like ran that you know, with immunotherapy we're

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Speaker 1: figuring out a different, maybe more productive way potentially to

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Speaker 1: treat cancer. That's entirely that's exactly right, you know, this

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Speaker 1: is this is for the first time we're harnessing the

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Speaker 1: body's own ability to fight cancer. We we already know

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Speaker 1: that the immune system is very very good at at

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Speaker 1: at fighting this off. But as we get older, at

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Speaker 1: certain you know, um, mutations are caused our our body

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Speaker 1: winds up becoming less and less effective. And so this

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Speaker 1: group of therapies are really working to kind of unleash,

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Speaker 1: unharnessed that immunology perspective, that immune perspective that we all

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Speaker 1: house within our own bodies and has been showing some

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Speaker 1: pretty profound um effects. There's there's definitely a long way

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Speaker 1: to go. I never want you know, our our listeners,

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Speaker 1: or anyone else to think that we've we've made it

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Speaker 1: to the end. There's always improvements that we can have

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Speaker 1: um not just from an efficacy perspective, from also but

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Speaker 1: also from a side effect perspective, where can give patients

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Speaker 1: a better quality of life. And that's what the focus

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Speaker 1: will be I think going forward, improvements on more patients,

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Speaker 1: more more patients benefiting from these therapies and a better

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Speaker 1: quality of life. Well, great to check in with, you

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Speaker 1: really really appreciate it. Ren Benjamin's senior biotech analyst at

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Speaker 1: Raymond James, on the phone from the ASCO conference in Chicago.

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Speaker 1: So President Trump heading to Quebec this week for a

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Speaker 1: group of seven summits. He's going to meet the leaders

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Speaker 1: of five all allies you know who they are, Canada, France,

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Speaker 1: the UK, Italy and Germany that lost an exemption on

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Speaker 1: steel and aluminum levies. Talk about awkward. Andrew my To

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Speaker 1: is Global Trade and economy reporter at Bloomberg News. He

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Speaker 1: joins this from on the phone from Washington, also with

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Speaker 1: us as Carl Shamata, Chief Strategies at Cambridge Global Payments.

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Speaker 1: It's a provider of integrated B two B business to

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Speaker 1: business cross border payment services globally on the phone from Toronto, Andrew,

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Speaker 1: let me start with you. I heard a lot of

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Speaker 1: the kind of back and forth over the weekend. I mean,

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Speaker 1: this is not I don't even know how this can

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Speaker 1: go well. But tell me about what will face the

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Speaker 1: president as he meet meets with the other members of

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Speaker 1: the G seven. Yeah, I think the President is in

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Speaker 1: for a frosty welcome when he arrives in Quebec later

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Speaker 1: this week. He'll be meeting with the other G seven leaders,

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Speaker 1: and you know, I think there might be some enthusiasm

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Speaker 1: for what he's doing with respect to North Korea. But

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Speaker 1: I don't expect him to get a very warm welcome

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Speaker 1: when it comes to the U S tariffs that he's

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Speaker 1: imposing on some of his closest allies. And Carl, we

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Speaker 1: of course heard from the Canadian Prime Minister m just

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Speaker 1: In Trudeau last week, and he was not happy at all.

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Speaker 1: You could kind of feel the anchor in his comments

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Speaker 1: or see it. Um, tell us a bit about the

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Speaker 1: Canadian perspective and all of this. Well, right, you know,

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Speaker 1: you're certainly seeing a pretty hostile reception here in Canada. Um.

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Speaker 1: You know that traditional Canadian politeness seems to have gone

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Speaker 1: out the window here. Um. You know, But ultimately, I

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Speaker 1: think the big issue here is for Canadians, we're just

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Speaker 1: not really sure what Mr Trump wants. Um. The negotiators

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Speaker 1: coming in from the Canadian side just haven't been able

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Speaker 1: to meet American demands in the in a effective manner um.

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Speaker 1: And so there's a lot of confusion and a lot

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Speaker 1: of uncertainty about what might come next. You Know what's interesting,

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Speaker 1: Andrew is a fair amount of guests come into our

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Speaker 1: studios here at Bloomberg, and when it comes to specifically

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Speaker 1: US China trade, they don't necessarily disagree with the US

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Speaker 1: pushing back on China after so many years of them

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Speaker 1: feeling China has really been able to do what it

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Speaker 1: wants when it comes to trade. They don't necessarily agree

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Speaker 1: with maybe the methods that the President is doing. But

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Speaker 1: nonetheless they kind of agree with it. But I don't

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Speaker 1: know that everybody agrees with the rest of it. Um,

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Speaker 1: tell me a little bit about whether or not though

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Speaker 1: the president, I mean, is this it is he going

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Speaker 1: to stand firm because we've seen him certainly go back

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Speaker 1: and forth when it comes to policy. Yeah. I think

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Speaker 1: that's a great question. We'll have to see. I think

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Speaker 1: that we have to accept now that volatility is just

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Speaker 1: a norm when it comes to President dal Trump's trade policy.

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Speaker 1: I mean, he blows hot and cold, you know, from

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Speaker 1: day to day, sometimes uh, from hour to hour. But

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Speaker 1: I think I think you make a good point. Um.

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Speaker 1: You know, I think that there's a lot of uh

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Speaker 1: uh consensus around the G seven table for hitting back

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Speaker 1: hard on China, and some of the private conversations I

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Speaker 1: had with people who were there, I mean, some people said, look, um,

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Speaker 1: you know, if the US had taken approach, an approach

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Speaker 1: where China was a real harget, if the US was

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Speaker 1: trying to push back on China's economic model, China's mercantilism,

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Speaker 1: h then you know, Donald Trump would have probably received

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Speaker 1: a better reception by imposing tariffs like the steel illuminum

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Speaker 1: terroriffs on allies like Canada, close allies like the European Union.

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Speaker 1: I think it undermined some of that good will that

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Speaker 1: could be used to to focus efforts on China and

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Speaker 1: Andrew who ultimately gets hurt in all of this, because

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Speaker 1: we've talked, you know a lot about this global supply

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Speaker 1: chain and how you have a lot of manufacturers doing

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Speaker 1: it where they sell because it just makes more business sense.

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Speaker 1: But I mean, who ultimately gets hurt in all of this?

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Speaker 1: That's also a good question. I think Goldman Sachs had

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Speaker 1: a report of today saying that, you know, if we

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Speaker 1: only look at the steel terrorists that the President is implementing,

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Speaker 1: the economic impact is probably pretty muted. If you look

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Speaker 1: at the absolute number at fifty billion dollars, so you say, well,

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Speaker 1: that's a big number. But if you look at total

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Speaker 1: US imports, that's about half a trillion dollars, So you're

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Speaker 1: still looking at a fairly small percentage, and so the

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Speaker 1: economic impact at that point is probably pretty mut muted.

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Speaker 1: But when you get into a situation where you've got

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Speaker 1: the tits for TAD retaliation, you've got the EU escalating,

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Speaker 1: you know, President Trump potentially escalating on top of that,

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Speaker 1: and then the trade allow trade where we'd China, then

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Speaker 1: the numbers really start to hit, really start to hurt

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Speaker 1: the economy. Carl, what about the Canadian economy and the

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Speaker 1: implications as a result of these tariffs. Well, it's relatively minor.

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Speaker 1: So the tariffs that have been announced US far effect

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Speaker 1: at roughly seventeen billion and exports, and that's in a

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Speaker 1: picture where you have about four hundred and fifty billion

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Speaker 1: and exports from Canada every year. So you know you're

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Speaker 1: looking at something that doesn't necessarily damage the entire Canadian economy,

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Speaker 1: but it certainly strikes a psychological blow. And certainly, to

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Speaker 1: Andrews point there, what this is really doing is forcing

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Speaker 1: a number of parties together in an alliance against the

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Speaker 1: United States, where in fact we really do have interests

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Speaker 1: that are very much in alignment and we could have

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Speaker 1: potentially forced change in the global trading environment. Know, a

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Speaker 1: listener just tweeted at me, it's as curious when Trump's

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Speaker 1: real target of trade fairness in quotation in quotation marks

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Speaker 1: will be discussed. Tariffs just an attention grabber to get

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Speaker 1: parties to the table. I mean, Andrew, is that a

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Speaker 1: little bit of the feeling it does anybody see that?

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Speaker 1: I don't know, are people reading the art of the

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Speaker 1: deal to try to understand how, you know, Trump does things.

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Speaker 1: I do actually think that that is part of his calculus. Um,

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Speaker 1: you know, but if you look at game theory, Um,

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Speaker 1: other parties are going to respond. Um, if parties understand

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Speaker 1: that the person that they're negotiating with is taking an

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Speaker 1: aggressive approach. There's some logic actually to the European Union

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Speaker 1: hitting back very hard to do precisely what President Trump

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Speaker 1: is trying to do get the US to the table. Um.

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Speaker 1: So I do think that there's going to be kind

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Speaker 1: of an initial period of escalation on all sides here. Um,

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Speaker 1: We'll have to see how it all plays out. I

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Speaker 1: do think that the trade war, the trade conflict which

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Speaker 1: China is really the Japan here. Um, if things get

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Speaker 1: really bad on that front, I think that things could

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Speaker 1: really bite for the global economy. Hey, Carl, for Canada,

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Speaker 1: I mean, who might allie itself with more closely as

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Speaker 1: a result of kind of some of the tense uh

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Speaker 1: feelings right now between the US and Canada. I think

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Speaker 1: certainly the European Union and Mexico are in the same boat.

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Speaker 1: And if you look at retaliation and now so far,

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Speaker 1: it's been very much targeted at Trump's base, uh, parts

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Speaker 1: of you know, the political heartland that supported Trump's rise um,

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Speaker 1: and you know, each of those retaliation measures appears to

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Speaker 1: have been done in concerts. In other words, we're all

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Speaker 1: talking to each other and we're all coordinating our response,

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Speaker 1: right exactly. Hey, you know one thing to uh Andrew

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Speaker 1: that caught my attention. I've been thinking a lot about

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Speaker 1: this that as the US takes um various positions and actions,

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Speaker 1: how are if it's increasingly isolating itself from the rest

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Speaker 1: of the world, and the implications you write in your

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Speaker 1: story you talk about Treasury Secretary Stephen manution rejecting the

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Speaker 1: notion that the US is banning its traditional leadership role

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Speaker 1: in the world economy. I don't know how how are

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Speaker 1: people seeing that? I think it was a pretty staggering

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Speaker 1: picture that we saw this. We can mean think about it.

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Speaker 1: We had the Treasury Secretary of the United States of America,

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Speaker 1: the country that created a lot of these institutions, played

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Speaker 1: an instrumental role in creating the Group of Seven, to

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Speaker 1: begin with, creating the World Bank, creating the International Monitary

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Speaker 1: Fund creating the World Trade Organization. We had the Treasure

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Speaker 1: Secretary of the United States being isolated on the global stage,

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Speaker 1: and actually at one point the Japanese Finance minister saying

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Speaker 1: that he felt sorry for Secretary Monution. On the last day,

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Speaker 1: Minution came out and defended himself. But I think the

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Speaker 1: US is definitely isolated at this point. Yeah, certainly interesting

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Speaker 1: to watch. I can't wait to see what the history

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Speaker 1: books right about all of this and how it plays out.

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Speaker 1: Andrew Mayetta, thank you so much. Good to check in

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Speaker 1: with you, Global Trade and Economy reporter at Bloomberg News

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Speaker 1: on the phone from Washington. Also good to get the

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Speaker 1: thoughts of Carlsham, chief strategist at Cambridge Global Payments, on

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Speaker 1: the phone from Toronto. You were listening to Bloomberg Markets.

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Speaker 1: I'm Carola Master and this is Bloomberg Radio. Hey, we

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Speaker 1: gotta talk a bit about Apple shares because they hit

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Speaker 1: a new all time high today. This is the Apple

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Speaker 1: Worldwide Developer excuse me, Apple Worldwide Developer Conference is underway

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Speaker 1: in San Jose. The Apple CEO Tim Cook already taking

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Speaker 1: this stage. I want to get more from our Emily

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Speaker 1: chanin Bloomberg Technology anchor. She's in our Bloomberg nine sixties

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Speaker 1: studio in San Francisco, along with John Butler, senior Telecom

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00:22:29,760 --> 00:22:32,960
Speaker 1: Services and Equipment analyst of Bloomberg Intelligence or in house

431
00:22:33,000 --> 00:22:35,919
Speaker 1: group of analysts. He's in our Bloomberg eleven three oh

432
00:22:35,960 --> 00:22:38,000
Speaker 1: studio here in New York, right next to me. But Emily,

433
00:22:38,160 --> 00:22:40,199
Speaker 1: let me start with you. What stands out from what

434
00:22:40,200 --> 00:22:43,879
Speaker 1: we've heard from Apple so far. This was all about software,

435
00:22:43,920 --> 00:22:45,760
Speaker 1: and they said at the top that what they really

436
00:22:45,800 --> 00:22:48,440
Speaker 1: want to focus on right now is improving performance, which

437
00:22:48,480 --> 00:22:51,280
Speaker 1: has been an issue for a long time. You know,

438
00:22:51,359 --> 00:22:54,200
Speaker 1: with the help of Apple's own chips. They say that

439
00:22:54,560 --> 00:22:58,960
Speaker 1: they're going to make phones and computers faster, better, more

440
00:22:59,520 --> 00:23:01,800
Speaker 1: rely boll And. So it's not so much about a

441
00:23:01,920 --> 00:23:05,800
Speaker 1: dramatic software upgrade, but more incremental upgrades. You know, we

442
00:23:05,840 --> 00:23:09,359
Speaker 1: saw them laying the groundwork for a R to be

443
00:23:09,480 --> 00:23:13,720
Speaker 1: a potentially huge platform. Tim Cook has said he thinks

444
00:23:13,760 --> 00:23:17,080
Speaker 1: this is a big idea, perhaps as big as the smartphone.

445
00:23:17,119 --> 00:23:19,720
Speaker 1: So I think we're seeing the groundwork for something in

446
00:23:19,760 --> 00:23:22,679
Speaker 1: the future that could be a big deal. Um And

447
00:23:22,720 --> 00:23:25,239
Speaker 1: towards the end we did get a big sort of

448
00:23:25,280 --> 00:23:29,280
Speaker 1: shot across the bow from Apple to Facebook. They made

449
00:23:29,280 --> 00:23:32,000
Speaker 1: a big statement about privacy, saying that they're going to

450
00:23:32,080 --> 00:23:34,840
Speaker 1: make it dramatically more difficult for data companies to track you.

451
00:23:34,920 --> 00:23:37,680
Speaker 1: And basically they're going to be sending alerts to customers

452
00:23:38,000 --> 00:23:40,280
Speaker 1: so that customers can decide on a case by case

453
00:23:40,280 --> 00:23:43,399
Speaker 1: basis whether they want to let what Apple calls clever

454
00:23:43,480 --> 00:23:47,800
Speaker 1: and relentless data companies um track you. Um. It's it's

455
00:23:47,800 --> 00:23:50,919
Speaker 1: a very interesting statement coming from Apple. We know that

456
00:23:50,960 --> 00:23:54,840
Speaker 1: Tim Cook has been out there personally saying that he

457
00:23:54,880 --> 00:23:57,119
Speaker 1: wouldn't be in the position that Facebook is in simply

458
00:23:57,160 --> 00:24:00,719
Speaker 1: because of their approach to user data. So that was

459
00:24:01,000 --> 00:24:04,200
Speaker 1: a fairly strong note that they ended on today. Yeah. Absolutely,

460
00:24:04,280 --> 00:24:06,480
Speaker 1: John Butler, come on in on this conversation. What stood

461
00:24:06,480 --> 00:24:08,479
Speaker 1: out for you some of the headlines we got from

462
00:24:08,480 --> 00:24:11,240
Speaker 1: Apple so far? We know, as an analyst, I always

463
00:24:11,280 --> 00:24:14,119
Speaker 1: look at an event like this through the lens of

464
00:24:14,240 --> 00:24:18,040
Speaker 1: does it really advance their strategy, and their strategy is

465
00:24:18,080 --> 00:24:21,600
Speaker 1: to get people to buy more services, And as Emily

466
00:24:21,640 --> 00:24:25,480
Speaker 1: said a moment ago, you know, these performance enhancements, particularly

467
00:24:25,680 --> 00:24:29,080
Speaker 1: it applies to devices as old as the five as

468
00:24:29,840 --> 00:24:31,959
Speaker 1: you know, and there's a lot of mout there. So

469
00:24:32,080 --> 00:24:35,520
Speaker 1: if you get a performance lift from all those devices,

470
00:24:35,560 --> 00:24:38,920
Speaker 1: people are going to buy more services. Um. And it's

471
00:24:38,960 --> 00:24:42,280
Speaker 1: also about apps, right. The app store is about a

472
00:24:42,359 --> 00:24:47,600
Speaker 1: third of all services revenue and it's very profitable. Right.

473
00:24:47,680 --> 00:24:51,280
Speaker 1: So Apple is very focused on that app store. And

474
00:24:51,320 --> 00:24:55,440
Speaker 1: I think the enhancements that we saw with augmented Reality

475
00:24:56,040 --> 00:24:58,639
Speaker 1: and and some of the things we saw with Siri

476
00:24:58,800 --> 00:25:03,480
Speaker 1: where you can you know, customize Serrie and create shortcuts

477
00:25:03,520 --> 00:25:07,160
Speaker 1: all enhances the potential of apps revenue down the road.

478
00:25:07,760 --> 00:25:10,600
Speaker 1: And that's their endgame. That's that's what this name is

479
00:25:10,640 --> 00:25:13,360
Speaker 1: all about right now, right, And they did highlight um.

480
00:25:13,680 --> 00:25:16,840
Speaker 1: Tim Cook I believe did million weekly visitors to the

481
00:25:16,880 --> 00:25:19,880
Speaker 1: app store talked about twenty million. I think developers writing

482
00:25:19,920 --> 00:25:23,880
Speaker 1: for Apples platforms. Um. It is interesting and I think,

483
00:25:23,920 --> 00:25:26,359
Speaker 1: you know, Emily, what what John said about, you know,

484
00:25:26,520 --> 00:25:28,560
Speaker 1: what does it do for the company going forward in

485
00:25:28,640 --> 00:25:31,480
Speaker 1: terms of either driving top and bottom lines and and

486
00:25:31,560 --> 00:25:34,520
Speaker 1: kind of driving their mission and getting more people into

487
00:25:34,640 --> 00:25:39,600
Speaker 1: the Apple world. Um. This seems to fit into this well.

488
00:25:39,600 --> 00:25:41,960
Speaker 1: And the great irony here is that Apple also announced

489
00:25:41,960 --> 00:25:45,240
Speaker 1: a slew of tools to combat tech addiction. They have

490
00:25:45,400 --> 00:25:51,200
Speaker 1: fire by our product, but don't use it too much exactly,

491
00:25:51,240 --> 00:25:54,520
Speaker 1: and we're gonna make it even more addictive. Um. You know,

492
00:25:55,000 --> 00:25:59,040
Speaker 1: you can set some beginning and ends to do not disturb,

493
00:25:59,160 --> 00:26:04,520
Speaker 1: you can, what is that about? So there are some

494
00:26:04,560 --> 00:26:08,080
Speaker 1: shareholders that have been critical of Apple for not taking

495
00:26:08,119 --> 00:26:12,359
Speaker 1: a bigger responsibility to combat tech addiction. Um. But you know,

496
00:26:12,920 --> 00:26:15,080
Speaker 1: all with all of these features, I'm looking at this

497
00:26:15,160 --> 00:26:17,520
Speaker 1: thinking to myself, this is so complicated. Why don't people

498
00:26:17,520 --> 00:26:19,840
Speaker 1: just turn off their phones? I mean, people don't just

499
00:26:19,880 --> 00:26:22,360
Speaker 1: turn off their phones, and I guess that is the problem.

500
00:26:22,440 --> 00:26:25,520
Speaker 1: But you know, they're also announcing an emojis that you

501
00:26:25,560 --> 00:26:30,280
Speaker 1: can personalize to look like you personal favorite just face time,

502
00:26:30,400 --> 00:26:35,280
Speaker 1: which kids are gonna love. Um. So you know, you

503
00:26:35,320 --> 00:26:39,119
Speaker 1: know it is indeed very very ironic. But you know,

504
00:26:39,200 --> 00:26:42,000
Speaker 1: overall across the board, you know, it's it's nice to

505
00:26:42,000 --> 00:26:45,720
Speaker 1: hear these updates about the app store and developers. But um,

506
00:26:45,760 --> 00:26:48,120
Speaker 1: one thing that Apple isn't talking about is the fact that,

507
00:26:48,760 --> 00:26:52,000
Speaker 1: you know, while the iPhone app store is very vibrant,

508
00:26:52,119 --> 00:26:55,800
Speaker 1: developers haven't been as attracted to the Mac and the

509
00:26:55,840 --> 00:26:58,880
Speaker 1: Apple Watch and the Apple TV. So a lot of

510
00:26:59,440 --> 00:27:02,639
Speaker 1: today it was about sort of refreshing the opportunity to

511
00:27:02,640 --> 00:27:05,440
Speaker 1: develop for all of these platforms and to make them

512
00:27:05,480 --> 00:27:10,800
Speaker 1: even more sort of synchronized, more connected, and more addictive, right, yes,

513
00:27:10,840 --> 00:27:14,080
Speaker 1: you could say, but not too addictive. I don't know what, John,

514
00:27:14,160 --> 00:27:15,720
Speaker 1: You know what I also think about with the Apple Watch.

515
00:27:15,720 --> 00:27:17,439
Speaker 1: I've got to watch. I like it, but I do

516
00:27:17,520 --> 00:27:20,040
Speaker 1: wonder about whether you know, they need to see like

517
00:27:20,080 --> 00:27:22,800
Speaker 1: the healthcare space somehow embrace it more and work with

518
00:27:22,840 --> 00:27:24,800
Speaker 1: it to make that really kind of a star product

519
00:27:24,840 --> 00:27:27,560
Speaker 1: for them. Just got about thirty seconds. That's an evolution,

520
00:27:27,600 --> 00:27:30,520
Speaker 1: not a revolution, And I agree with you. By the way,

521
00:27:30,720 --> 00:27:33,280
Speaker 1: it's sitting right there on your wrist. It can measure

522
00:27:33,320 --> 00:27:37,639
Speaker 1: your heart rate over time, potentially could communicate with like

523
00:27:37,680 --> 00:27:41,840
Speaker 1: a glucose monitor with people who have diabetes, for example,

524
00:27:42,400 --> 00:27:46,200
Speaker 1: many more applications beyond just that, so I agree with you.

525
00:27:46,600 --> 00:27:49,399
Speaker 1: By the way, the walkie talkie capability on the watch

526
00:27:49,560 --> 00:27:52,639
Speaker 1: is so cool. They introduced it today. I love it.

527
00:27:52,800 --> 00:27:55,000
Speaker 1: Oh gosh, I'll have to check that one out. Um,

528
00:27:55,200 --> 00:27:57,240
Speaker 1: both of you, Thank you so much, John Butler, Senior

529
00:27:57,280 --> 00:28:00,080
Speaker 1: Telecom Services and Equipment Analyst at Bloomberg Intelligence, and of

530
00:28:00,080 --> 00:28:03,159
Speaker 1: course our thanks to Emily Chang, Bloomberg Technology Anchor in

531
00:28:03,200 --> 00:28:06,560
Speaker 1: our Bloomberg nine sixty studio. Check her on Bloomberg Technology

532
00:28:06,600 --> 00:28:09,920
Speaker 1: every day on Bloomberg TV. You are listening to Bloomberg

533
00:28:09,960 --> 00:28:17,399
Speaker 1: Markets on Bloomberg Radio. I'm room macro journal. Yeah. But

534
00:28:17,480 --> 00:28:22,359
Speaker 1: you let me drive. No, no, no, who's home? Honey? Please,

535
00:28:22,440 --> 00:28:28,639
Speaker 1: I'll do the riding revel. I want to drive. Just

536
00:28:28,840 --> 00:28:41,840
Speaker 1: drive by the question dry this is the drive to

537
00:28:41,880 --> 00:28:46,720
Speaker 1: the globe. Thanks, We'll drying us down on Bloomberg Radio.

538
00:28:47,320 --> 00:28:50,040
Speaker 1: It is the time for her, time for the drive

539
00:28:50,120 --> 00:28:52,959
Speaker 1: to the close. Michael Sheldon is executive director, chief investment

540
00:28:53,000 --> 00:28:55,240
Speaker 1: Officer at R d M Financial Group. He joins us

541
00:28:55,560 --> 00:28:58,240
Speaker 1: on the phone from Westport, Connecticut. Michael, good to be

542
00:28:58,280 --> 00:29:01,600
Speaker 1: talking with you on this Monday A. Uh, you know

543
00:29:01,840 --> 00:29:03,880
Speaker 1: you sound. I was just looking over some research and

544
00:29:03,960 --> 00:29:06,960
Speaker 1: some notes. You sound pretty optimistic about kind of where

545
00:29:06,960 --> 00:29:12,400
Speaker 1: we are, despite you know, some global concerns out there. Well,

546
00:29:12,440 --> 00:29:14,400
Speaker 1: to keep in mind this is this is the second

547
00:29:14,400 --> 00:29:17,800
Speaker 1: longest economic expansion in the post World War two periods,

548
00:29:18,440 --> 00:29:22,000
Speaker 1: just below the just after the expansion of the nineties. UM,

549
00:29:22,120 --> 00:29:24,400
Speaker 1: we don't see a recession ahead, which is really important.

550
00:29:24,480 --> 00:29:26,480
Speaker 1: There have been a lot of reasons to go to

551
00:29:26,560 --> 00:29:30,240
Speaker 1: cash and pull back over the past several years throughout

552
00:29:30,240 --> 00:29:33,280
Speaker 1: this expansion. But but overall, we think the US economy

553
00:29:33,600 --> 00:29:37,360
Speaker 1: appears to be on relatively solid footing right now. I mean,

554
00:29:37,360 --> 00:29:40,160
Speaker 1: there's definitely there's definitely a wall of worry. There are

555
00:29:40,160 --> 00:29:42,920
Speaker 1: concerns out there which are considerable. There always are worries.

556
00:29:43,600 --> 00:29:46,080
Speaker 1: We keep those in mind. Sometimes you just need to

557
00:29:46,080 --> 00:29:49,920
Speaker 1: worry about those. And if something changes in the global economy,

558
00:29:50,240 --> 00:29:52,440
Speaker 1: if the FED raises rates too much, if there's a

559
00:29:52,560 --> 00:29:57,320
Speaker 1: geopolitical event overseas, uh, if the if thet president follows

560
00:29:57,360 --> 00:30:01,160
Speaker 1: through with tariffs and trade wars, then you decide how

561
00:30:01,200 --> 00:30:03,800
Speaker 1: you want to adjust your portfolios. But but until then,

562
00:30:03,840 --> 00:30:06,280
Speaker 1: we have a checklist of things we're monitoring, and we

563
00:30:06,280 --> 00:30:08,600
Speaker 1: we keep on track. Well, always good to have a checklist.

564
00:30:08,600 --> 00:30:10,880
Speaker 1: And I'm just curious, among those things that you mentioned,

565
00:30:10,880 --> 00:30:15,240
Speaker 1: FED policy may be overdoing a geopolitical concerns, trade wars,

566
00:30:15,320 --> 00:30:20,080
Speaker 1: what would be what what thing could go more negative

567
00:30:20,120 --> 00:30:22,600
Speaker 1: that would make you a lot more nervous and possibly

568
00:30:22,680 --> 00:30:26,520
Speaker 1: potentially bring about a recession. I think the thing that's

569
00:30:26,520 --> 00:30:28,720
Speaker 1: probably the top of our list is if you look

570
00:30:28,760 --> 00:30:31,720
Speaker 1: back at the past. We're students of history here, and

571
00:30:31,720 --> 00:30:33,920
Speaker 1: if you look back at the past several cycles, it

572
00:30:34,000 --> 00:30:36,760
Speaker 1: usually comes down to the FED. The FED tries to

573
00:30:36,960 --> 00:30:39,440
Speaker 1: choke off economic growth. They try to slow down the

574
00:30:39,480 --> 00:30:42,360
Speaker 1: economy economy to deal with in balances that have built up,

575
00:30:42,880 --> 00:30:45,360
Speaker 1: and ultimately we'll be keeping a close eye in the

576
00:30:45,400 --> 00:30:47,680
Speaker 1: FED as we go through really the end of this year,

577
00:30:47,720 --> 00:30:49,760
Speaker 1: but more into two thousand nineteen, I think is when

578
00:30:49,760 --> 00:30:51,920
Speaker 1: you have to be more concerned. That's when you might

579
00:30:51,960 --> 00:30:54,080
Speaker 1: get closer to an inversion of the yield curve, which

580
00:30:54,160 --> 00:30:58,120
Speaker 1: historically has had a track record of forecasting recessions. It

581
00:30:58,200 --> 00:31:01,960
Speaker 1: could also lead to problems with companies refinancing their debt

582
00:31:02,360 --> 00:31:06,080
Speaker 1: and just cause more CEO confidence problems. So that's probably

583
00:31:06,080 --> 00:31:08,600
Speaker 1: our biggest worry. You know. It's interesting too though, it's

584
00:31:08,720 --> 00:31:10,840
Speaker 1: you know, we look at that unemployment rate and it's

585
00:31:11,120 --> 00:31:15,920
Speaker 1: certainly you know, paints a very upbeat picture of the

586
00:31:16,000 --> 00:31:18,600
Speaker 1: labor market. And yet you know, I think we all

587
00:31:18,640 --> 00:31:21,520
Speaker 1: have stories of people, We know of folks with skills

588
00:31:21,640 --> 00:31:25,000
Speaker 1: that are either out of work or at a job

589
00:31:25,040 --> 00:31:28,000
Speaker 1: where they're not at you know, full potential in terms

590
00:31:28,040 --> 00:31:29,960
Speaker 1: of what they were making at some point. There's still

591
00:31:30,000 --> 00:31:32,760
Speaker 1: a lot of people that are not connected with this

592
00:31:32,840 --> 00:31:35,960
Speaker 1: labor market. In a good way. Well, that's true. I

593
00:31:36,000 --> 00:31:38,400
Speaker 1: mean last week we had the monthly jobs report and

594
00:31:38,440 --> 00:31:42,880
Speaker 1: it was really a pretty solid report. The economy UH

595
00:31:43,280 --> 00:31:46,400
Speaker 1: generated three thousand jobs per month, which is higher than

596
00:31:46,440 --> 00:31:48,560
Speaker 1: the three year average of about a hundred and ninety

597
00:31:48,600 --> 00:31:54,040
Speaker 1: seven thousand or so. UH six the Diffusion Index pointed

598
00:31:54,040 --> 00:31:57,720
Speaker 1: out that of all companies were hiring last month. And

599
00:31:57,920 --> 00:32:00,560
Speaker 1: the one thing which has really been missing is that wages.

600
00:32:00,920 --> 00:32:03,200
Speaker 1: Wages grew at about two point seven percent on a

601
00:32:03,280 --> 00:32:05,360
Speaker 1: year of a year basis, and we haven't been able

602
00:32:05,400 --> 00:32:08,000
Speaker 1: to kick that into high gear so far. Typically in

603
00:32:08,040 --> 00:32:11,280
Speaker 1: the past several cycles, wage growth has gotten up to

604
00:32:11,280 --> 00:32:14,840
Speaker 1: about four percent, which has started to percolate inflation, and

605
00:32:14,880 --> 00:32:18,600
Speaker 1: that's brought to fed in more aggressively off the sidelines. UM. So,

606
00:32:19,040 --> 00:32:21,920
Speaker 1: the job market by all measures, is generally in pretty

607
00:32:21,920 --> 00:32:25,200
Speaker 1: solid shape. To your point. Is one of their interesting thing.

608
00:32:25,280 --> 00:32:27,960
Speaker 1: That's the Jolts Jobs Report, which comes out every month,

609
00:32:28,400 --> 00:32:31,840
Speaker 1: and that's um job openings and labor turnover by the

610
00:32:31,880 --> 00:32:34,840
Speaker 1: Bureau of Labor Statistics. It only goes back to two thousand,

611
00:32:34,960 --> 00:32:36,960
Speaker 1: but what it shows is there are six point six

612
00:32:37,000 --> 00:32:39,480
Speaker 1: million jobs right now that companies are trying to fill.

613
00:32:39,920 --> 00:32:42,280
Speaker 1: So essentially what that says that if companies could find

614
00:32:42,280 --> 00:32:45,680
Speaker 1: additional workers and here's the caveat with the skills they're

615
00:32:45,680 --> 00:32:48,440
Speaker 1: looking for, they would hire more workers. So that's something

616
00:32:48,480 --> 00:32:50,680
Speaker 1: to keep in mind. Well, this is certainly mirrors a

617
00:32:50,680 --> 00:32:54,920
Speaker 1: discussion that we recently had to here on Bloomberg um with,

618
00:32:55,560 --> 00:32:58,240
Speaker 1: you know, talking about, especially in the future, whether or

619
00:32:58,280 --> 00:33:00,360
Speaker 1: not we're going to have the workers that are going

620
00:33:00,400 --> 00:33:03,520
Speaker 1: to be needed globally and what that could potentially do

621
00:33:03,600 --> 00:33:05,280
Speaker 1: that if we don't, what that does to kind of

622
00:33:05,320 --> 00:33:07,160
Speaker 1: the global economic ros I don't know how far you're

623
00:33:07,160 --> 00:33:09,960
Speaker 1: looking down the road, but that is I think discouraging

624
00:33:09,960 --> 00:33:12,640
Speaker 1: to see that disconnect, right that Joel's job openings. It

625
00:33:12,640 --> 00:33:15,080
Speaker 1: with something Johnny Yellen used to look at too, and

626
00:33:15,160 --> 00:33:18,360
Speaker 1: to see a lot of openings out there and a

627
00:33:18,400 --> 00:33:20,760
Speaker 1: lot of people out of work, and yet you can't

628
00:33:20,760 --> 00:33:23,560
Speaker 1: make the connection there because those workers don't necessarily have

629
00:33:23,640 --> 00:33:26,840
Speaker 1: those skills. Well, that's that's an interesting point. I mean,

630
00:33:26,840 --> 00:33:29,400
Speaker 1: when we put together we put together portfolios for our

631
00:33:29,440 --> 00:33:31,880
Speaker 1: clients and we try and make them evenly balanced. There's

632
00:33:31,920 --> 00:33:34,040
Speaker 1: certainly themes and parts of the market that we want

633
00:33:34,040 --> 00:33:37,040
Speaker 1: to take advantage of, but we're always looking at futuristic

634
00:33:37,080 --> 00:33:42,160
Speaker 1: type technologies like automation, robotics, artificial intelligence, and we're trying

635
00:33:42,200 --> 00:33:44,920
Speaker 1: to think of either individual companies or or either E

636
00:33:45,040 --> 00:33:46,840
Speaker 1: T F or mutual funds as ways to sort of

637
00:33:46,880 --> 00:33:49,880
Speaker 1: incorporate that into our portfolios because the world is really

638
00:33:49,960 --> 00:33:51,920
Speaker 1: changing and it's that's the one thing that we're going

639
00:33:52,000 --> 00:33:54,480
Speaker 1: to have to get used to. Investors should think about

640
00:33:54,480 --> 00:33:57,720
Speaker 1: how they can incorporate that into their portfolios in the future. So,

641
00:33:57,840 --> 00:34:01,320
Speaker 1: looking at portfolios right now, based on your outlook, what

642
00:34:01,400 --> 00:34:04,680
Speaker 1: are your suggestions to individuals at this point? Um our

643
00:34:04,760 --> 00:34:07,240
Speaker 1: Dave Wilson earlier was talking about I think it was

644
00:34:07,320 --> 00:34:09,480
Speaker 1: the consumer staples space and what he was seeing in

645
00:34:09,520 --> 00:34:12,759
Speaker 1: today's trade. I think it was actually moving up. Uh,

646
00:34:12,840 --> 00:34:16,200
Speaker 1: and it's been a sector a group that has certainly

647
00:34:16,200 --> 00:34:19,640
Speaker 1: been out of favor. Yeah, in terms of our portfolios

648
00:34:19,719 --> 00:34:22,960
Speaker 1: right now for two thousand eight, we're positioned, um. We

649
00:34:23,000 --> 00:34:27,080
Speaker 1: favored technology still. They have strong balance sheets. UH, they're

650
00:34:27,120 --> 00:34:31,560
Speaker 1: returning more capital shareholders, their beneficiaries of stronger economic growth

651
00:34:31,560 --> 00:34:34,960
Speaker 1: around the world. We still like financials. Financials are benefiting

652
00:34:34,960 --> 00:34:40,280
Speaker 1: from less regulation, increased return of capital, and stronger economic growth,

653
00:34:40,360 --> 00:34:42,919
Speaker 1: rising interest rates. And then we like industrials as well.

654
00:34:43,120 --> 00:34:46,200
Speaker 1: Industrials are benefiting from even though they've been somewhat out

655
00:34:46,200 --> 00:34:48,719
Speaker 1: of favor recently. We think industrial should do better as

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00:34:48,719 --> 00:34:51,760
Speaker 1: the economy grows and they see more capital equipment spending.

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00:34:52,400 --> 00:34:54,000
Speaker 1: The areas of the market that were sort of less

658
00:34:54,000 --> 00:34:57,040
Speaker 1: favored to at least in the current environment our utilities,

659
00:34:57,200 --> 00:35:00,520
Speaker 1: reads and consumer staples, and at some point those stocks

660
00:35:00,520 --> 00:35:02,279
Speaker 1: will get back in favor. But you even need to

661
00:35:02,320 --> 00:35:04,839
Speaker 1: have the economy start to weaken or maybe interest rates

662
00:35:04,840 --> 00:35:07,080
Speaker 1: start to roll over. And we think with the economy

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00:35:07,280 --> 00:35:10,839
Speaker 1: still on pretty solid footing. UH for example, this quarter,

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00:35:10,880 --> 00:35:13,320
Speaker 1: we're likely to see three to four percent GDP growth.

665
00:35:13,640 --> 00:35:15,600
Speaker 1: We think it's not it's a little early for that. Yeah,

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00:35:15,640 --> 00:35:18,880
Speaker 1: consumer staples your worst performing group this year, down but

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00:35:19,040 --> 00:35:21,440
Speaker 1: this but in today's session we're seeing some games up

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00:35:21,440 --> 00:35:24,719
Speaker 1: about eight tens of a percent. Michael Sheldon, thank you,

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00:35:24,800 --> 00:35:28,000
Speaker 1: Executive director, chief investment officer at r DM Financial Group.

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00:35:28,239 --> 00:35:30,719
Speaker 1: Michael joining us on the phone from Westport, Connecticut. We've

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00:35:30,760 --> 00:35:35,360
Speaker 1: got the closing bell just a few minutes away. Thanks

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00:35:35,400 --> 00:35:38,200
Speaker 1: for listening to Coast to Coast. You could subscribe to

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00:35:38,200 --> 00:35:41,759
Speaker 1: the podcast on iTunes, SoundCloud, or Bloomberg dot com. You

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00:35:41,800 --> 00:35:44,640
Speaker 1: can also listen to the radio show weekdays at two

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00:35:44,640 --> 00:36:08,960
Speaker 1: pm Eastern only on Bloomberg Radio k