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

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

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

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

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

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Speaker 1: at Bloomberg dot com slash podcast. Let's bring in Mark Douglas.

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Speaker 1: He is the CEO of Mountain m n T n UH,

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Speaker 1: and we bring him in to talk about all things

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Speaker 1: tech really on the on the com side, on the

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Speaker 1: streaming side, and Adam all lined up to talk about

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Speaker 1: Netflix and what I feel like is a turnaround and

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Speaker 1: sentiment there as well as Google. They're getting sued by

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Speaker 1: the Department of Justice and it's going to be a

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Speaker 1: jury trial. Holy Comoley could be the first breakup since

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Speaker 1: mob El. Remember that that can't happen. I don't think

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Speaker 1: so either. But um, let's talk to Mark first about

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Speaker 1: the tech sector in general. Mark, we have these big

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Speaker 1: earnings coming out this week, Amazon, Alphabet and Apple, UM

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Speaker 1: and everyone is expecting this earning sea to be horrendous,

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Speaker 1: So executives might even take advantage. We thought of this

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Speaker 1: earning season to throw in the kitchen sink and get

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Speaker 1: everything out of the way. You know, are all their

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Speaker 1: dirty laundry. It hasn't been that bad, has it. It hasn't.

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Speaker 1: I think, um, this is an interesting place win right

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Speaker 1: now because normally, if you look back at all the

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Speaker 1: previous downturns, it's like this is herd mentality where everyone

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Speaker 1: like when rushes to the next thing, Like when if

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Speaker 1: you go back to two thousand when the tech sector crash,

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Speaker 1: then everyone ran that by houses and then you know,

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Speaker 1: it's like this herd. But right now the herd is

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Speaker 1: just kind of grazing, just all kind of standing around,

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Speaker 1: not knowing where to go or what to do. So

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Speaker 1: things are neither like going up nor they like crashing

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Speaker 1: that hard. Everyone's waiting for you know, what am I

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Speaker 1: supposed to do now? And nobody seems to know. I

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Speaker 1: think what I'm hearing from some tech analysts is tech

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Speaker 1: spending is still gonna go row intercessionary environment. It's just

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Speaker 1: gonna grow at a lower rate than we've been used to.

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Speaker 1: Is that kind of how you see? It was on

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Speaker 1: fire over the last It's very hard to forecast revenue

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Speaker 1: in a tech company right now, because your customers don't

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Speaker 1: even know what they want, what they're going to spend.

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Speaker 1: So I know from my company, like our customers normally

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Speaker 1: tell us that by in December what their plans are

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Speaker 1: for Q one. Most of them didn't even know until

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Speaker 1: like third week of January. That is still trying to

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Speaker 1: figure it out. So it's really hard to forecast. So

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Speaker 1: I think you're gonna see forecasts be pretty soft, but

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Speaker 1: it's an opportunity for overachievement. Everyone's going to be kind

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Speaker 1: of kind of the other um, you know, the other

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Speaker 1: thread that we can pull from tech has been labor.

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Speaker 1: They've been firing all the excess workers that they rushed

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Speaker 1: higher over the last year and a half two years.

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Speaker 1: Where do you think we are there? I mean, the

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Speaker 1: question is a lot of people think they're gonna fire

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Speaker 1: too many people. UM obviously hired too many people. But

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Speaker 1: can't they run with a surplus of employees? Well, I

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Speaker 1: think some people would say Ellen, Elon Musk obviously, if

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Speaker 1: you say Elon Musk, other Elons, Yeah, whoever that is.

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Speaker 1: I think a lot of people would say Ellen proved

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Speaker 1: that maybe a lot of tech companies have over hired

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Speaker 1: since you know, but nothing has changed since he essentially

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Speaker 1: cut eighty percent of the staff or our parts of

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Speaker 1: eighty percent of staff. I talked to people, and some

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Speaker 1: of these big Twitter you mean yea Twitter. I talked

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Speaker 1: to some people, you know, people at some of the

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Speaker 1: big companies I do, big tech companies do wonder what

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Speaker 1: do you do for a living at this time at

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Speaker 1: this company? So there's there's definitely fat. If you guys

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Speaker 1: see some of the videos that post away, people say

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Speaker 1: the day in the life of working at Google and

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Speaker 1: and I saw one the other day and the person

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Speaker 1: got laid off a weekly. So there's there's fat to

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Speaker 1: cut on in allge So there's still more pink slift

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Speaker 1: to come. I don't know. And we haven't seen that

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Speaker 1: kind of firing. No, no, this is definitely I mean

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Speaker 1: what you know, everyone knows we're kind of in a

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Speaker 1: in a downward you know, the market crash. Everything's going down,

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Speaker 1: but um, it's going to go back up. Also, I

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Speaker 1: I talked to some like people who manage um trillions

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Speaker 1: of dollars, like some of the biggest equity firms in

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Speaker 1: the world, and they seem like they're really anxious to

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Speaker 1: put money back in the stock market, and and if

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Speaker 1: they do, the market is going to go up. So

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Speaker 1: I think they're people are ready to get back in.

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Speaker 1: They just want stability before they mark. What are you

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Speaker 1: hearing from some of the digital advertising players out there?

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Speaker 1: You know, we're gonna hear from Facebook and Google and

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Speaker 1: uh and some of the other's Amazon of course this week.

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Speaker 1: How tough is it out there in the digital ad

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Speaker 1: space if if you're not in the growth sectors? Pretty tough. So, um,

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Speaker 1: my company were in performance television with returning TV into

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Speaker 1: this direct response at channel and so if we look

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Speaker 1: at our customer as we already have, they're they're covering,

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Speaker 1: you know, they're not really increasing or decreasing. So but

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Speaker 1: we have all this growth from new customers coming into

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Speaker 1: the market. If you don't have that trend of a

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Speaker 1: lot of new customers, it's it's are you guys playing

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Speaker 1: in the in the streaming the ad supported streaming business? Exactly? Yeah,

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Speaker 1: we're turning streaming television into essentially add words for for

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Speaker 1: TV and that's where the incremental AD dollars are going.

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Speaker 1: Are they going to Peacock versus NBC? Are they're going

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Speaker 1: to Paramount Plus versus the cps, Well, they're just going

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Speaker 1: into I think streaming in general. I think I think

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Speaker 1: it's television after you know, it's kind of almost one

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Speaker 1: of the first like traditional ad channels. And now for

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Speaker 1: the first time in what is it seven eight decades,

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Speaker 1: it's now like this full digital marketing channels. So it's

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Speaker 1: become a growth set. It's it's become a growth sector again.

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Speaker 1: And I think all the TV networks, but especially like

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Speaker 1: NBC at Comcast, um Disney Plus and Hulu. You know

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Speaker 1: those companies that are really obviously Netflix now with their

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Speaker 1: ad business, they're you know, they're those companies that really

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Speaker 1: have the dollars to investment. They are going to benefit

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Speaker 1: the most. Does Google own the marketplace for ads, for

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Speaker 1: digital ads, no matter where you're going to advertise, no

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Speaker 1: matter who's buying the ads. Do they own that? Is

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Speaker 1: that the problem with the well they own? They own search.

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Speaker 1: I think I'm glad you brought that up. But just

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Speaker 1: in general, a little known fact is that for the

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Speaker 1: first time, Google and Meta like don't have less than

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Speaker 1: half the march, so the rest of the market is

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Speaker 1: actually growing. I mean, on the whole Google lawsuit thing,

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Speaker 1: I think that it's UM not directed with the real

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Speaker 1: action is the analogy I would use is what they're

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Speaker 1: suing them over the tools, like the software that serves

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Speaker 1: an AD. So that's like going after a company because

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Speaker 1: they have a dominant position in hammers where the real

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Speaker 1: action is, well, they have all the data and where

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Speaker 1: people are going to move to. That's where the real access.

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Speaker 1: Google has just a massive amount of data. Know, Google

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Speaker 1: knows I'm here right now, right because I have Google

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Speaker 1: Maps in my pocket. But we're gonna sue him over

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Speaker 1: the hammers, like it makes no sense. And I think

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Speaker 1: this one after al Capone for Taxia, Yeah, exactly, that works.

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Speaker 1: So I think this um the government going after them

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Speaker 1: is not actually going to have much of an impact

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Speaker 1: because where the real action is is the data privacy

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Speaker 1: legislation around the data. All privacy legislation makes Google, Meta,

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Speaker 1: Apple and Amazon essentially even stronger because it goes after

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Speaker 1: anonymous data while they have like your personal identity, and

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Speaker 1: so they get to continue to use the personal data

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Speaker 1: while everyone else's market. That's a big player on TikTok,

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Speaker 1: he's all over that platform. Talks about TikTok, What do

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Speaker 1: you tell us what's the future of TikTok. Uh, Well,

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Speaker 1: it's i there's so many people using it, it's not

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Speaker 1: going to be banned in the United States that I

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Speaker 1: was thinking, Yeah, that ships sail. I mean Trump years

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Speaker 1: ago tried to bring up this issue and everyone was like,

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Speaker 1: well if Donald Trump spring it up, we're not gonna

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Speaker 1: listen that. You know, they have all of the status

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Speaker 1: an open mic in every living room. But um TikTok

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Speaker 1: is doing extremely well. I don't see it diminishing in

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Speaker 1: any way in the near future. So they are crushing it.

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Speaker 1: And what about Netflix. I mean, this was last year

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Speaker 1: the market beat it down like a redheaded step child.

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Speaker 1: And I nothing against Gingers. I am a step child myself.

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Speaker 1: So but now it seems like sentiment is really shifted,

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Speaker 1: especially after the last Earns report they added seven and

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Speaker 1: a half million subscribers. Yeah, I mean the market is

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Speaker 1: just up and down on in general, but on Netflix

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Speaker 1: in particular. Thing about Netflix, just through the math. Let's

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Speaker 1: say they're average subscriptions like twelve dollars. They have two

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Speaker 1: hundred and forty million subscribes. It's like three billion dollars

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Speaker 1: a month coming in and people like, yeah, but they

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Speaker 1: missed you know, subscriber numbers by hundred thousands. Yeah, but

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Speaker 1: they got three a billion dollars in three billion dollars

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Speaker 1: a month. It's just overreactions, possibly in both directions. Overreacted

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Speaker 1: in terms of downward sentiment and possibly a little bit

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Speaker 1: and upward sentiment. And we got some new management there,

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Speaker 1: so we'll see how that plays out. YEA, so good stuff.

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Speaker 1: Mark Douglas, President and CEO of Mountain, joining us in

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Speaker 1: our Bloomberg Interactive Broker Studio giving us the latest on

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Speaker 1: all things tech and all things digital advertising. Quincy Crosby

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Speaker 1: joints us here. She's a chief Global strategist for lp

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Speaker 1: L Financial. That's a nastact treated firm lp L. A

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Speaker 1: is it took her load into your Bloomberg terminal, Quincy,

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Speaker 1: A lot to digest here this week. What's most important

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Speaker 1: to you? What's your gonna what's gonna be your focus

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Speaker 1: this week? Simply because we had a strong rally. Volume

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Speaker 1: was good on the rally, and the rally was cyclically

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Speaker 1: oriented for the most are. Now granted you we can

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Speaker 1: dismiss the rally. We can say it was you know,

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Speaker 1: short covering UH traders going in and taking advantage of

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Speaker 1: the tax claws only in in you know. Uh. But

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Speaker 1: nonetheless you started to see volume pickup in rally, and

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Speaker 1: it was a rally that suggested that the market is

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Speaker 1: looking ahead of everything. You know, we always would say

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Speaker 1: the market gets news worked. Anyway, February tends to be

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Speaker 1: a month where the market is tends to actually say,

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Speaker 1: have these rallies, um dissipate. It's probably the worst month

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Speaker 1: for the market next to September. So we're gonna watch

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Speaker 1: very closely how these big tech names do because the

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Speaker 1: waiting in the indextions, it's just them that these are

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Speaker 1: the big tech guys. We're gonna see if they can

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Speaker 1: if they can garner any interest from traders at least

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Speaker 1: and certainly investors. All Right, so, um, what are you

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Speaker 1: looking forward to see to prove that this rally really

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Speaker 1: has legs? Quincy? I mean, what are some signs? I

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Speaker 1: was just looking at the break down of um, the

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Speaker 1: industrial groups that have won and lost this year, and

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Speaker 1: you've got all the you know, consumer discretionary and tech

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Speaker 1: companies that have done well. Meanwhile, consumer staples and um,

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Speaker 1: you know, utilities have done poorly. So it looks like

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Speaker 1: the defensive are getting sold off. And the um You know,

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Speaker 1: the growth companies are are putting up some gains, but

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Speaker 1: I guess that could be explained by the short covering narrative.

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Speaker 1: So what do we need to see UM two ensure

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Speaker 1: us that this rally is solid. Well, what one thing

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Speaker 1: would be I look at the semiconductors. They are the

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Speaker 1: they are the consummate dull weather for global growth, and

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Speaker 1: they've been they've actually the days that they've been outperforming

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Speaker 1: even the the growth growth nas the gross the growth residence,

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Speaker 1: so to speak. We'll say if they can hold, obviously

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Speaker 1: then they sell off, but we'll see if they can hold.

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Speaker 1: It's very important that they participate, uh in a rally

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Speaker 1: and stay strong. You know. The other thing that we're

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Speaker 1: going to look at is on a technical basis, is

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Speaker 1: whether or not going through the obstacle course of this

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Speaker 1: week their earnings obstacle course the said statement his press conference,

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Speaker 1: then you know Friday's payroll report and see where wages are,

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Speaker 1: how they're moving. Is whether or not this market an

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Speaker 1: a rally. If it does rally, can actually cross forty

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Speaker 1: that is, you know, one of the most important levels

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Speaker 1: for the market, and it's been difficult obviously for this

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Speaker 1: market to launch an absolute attack on quincy. Tough, tough

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Speaker 1: for everybody out there and the equity biz in the

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Speaker 1: fixed income markets as you start oute, what are you

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Speaker 1: telling your clients in terms of positioning here after such

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Speaker 1: a tough year. Well, you know, we're trying to figure

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Speaker 1: out obviously, whether or not the market has discounted a recession.

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Speaker 1: Is it an earnings recession? Is that a rolling recession

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Speaker 1: is going to be a shallow recession. Our view at

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Speaker 1: LPL researches that will be fairly shallow. That's with all

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Speaker 1: the information we have now. However, one thing that we

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Speaker 1: have now it's not just about equities. We've got the

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Speaker 1: sixth income market and we're looking at it and investing

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Speaker 1: in it. The treasury market is offering very attractive return,

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Speaker 1: guaranteed return, and investment grade corporates as well. We also

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Speaker 1: sawt we're not advocating this, but we've seen money going

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Speaker 1: into high yield. Who whatever thought, you know, if all

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Speaker 1: of these dire headlines, money would go into high yield.

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Speaker 1: But those are the ones who think we're not going

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Speaker 1: to have a recession, will be a soft or soft

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Speaker 1: just landing. But the point is that companies when out

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Speaker 1: and borrowed during the period when money was so easy

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Speaker 1: and rates were so low, so that their balances, their

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Speaker 1: cash balances are strong. And right now these companies are

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Speaker 1: still you know, making certain that they cut costs when

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Speaker 1: they have to and that you know, they're going to

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Speaker 1: manage costs going into three, especially if there is a recession.

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Speaker 1: So we're saying investment grade corporate, we're saying the treasury

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Speaker 1: that can help the portfolio. And also on the equity side,

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Speaker 1: we're looking at dividends. This is crucial, we think for

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Speaker 1: this market. And you know, some of the sectors are

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Speaker 1: doing well. Take a look at the industrials today, they're up. Granted,

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Speaker 1: the the defense names are helping to underpin the the

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Speaker 1: industrials along with machinery. So there are pockets in the

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Speaker 1: market that are still attractive, attractively valued, especially after sell

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Speaker 1: off such as we had in the defense names, but

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Speaker 1: they're coming back today. So again, until there is more

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Speaker 1: certain in terms of where we are headed and whether

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Speaker 1: or not the market is actually discounted even a percentage

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Speaker 1: of a possibility of that you know, final final deep

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Speaker 1: sell off, we want the clients to be uh certain, careful,

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Speaker 1: conservative Quincy. Just want to ask before you came to

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Speaker 1: Wall Street, you spent a lot of time at diplomatic

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Speaker 1: postings around the world. Uh. You served as Assistant Secretary

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Speaker 1: of Commerce and also UM as Energy attached at the

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Speaker 1: US Embassy in London. UM, what do you think about

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Speaker 1: the reopening of China and the kind of I guess,

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Speaker 1: the the spat that seems to be, you know, mellowing

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Speaker 1: out between the US and China right now. How is

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Speaker 1: that going to drive the market this year? You know

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Speaker 1: obviously that this is you know, a major event. Is

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Speaker 1: the world's second largest economy. And it was interesting that

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Speaker 1: when they announced the final lift of the zero COVID policy,

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Speaker 1: we the countries that country indexes that've got a booth

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Speaker 1: were none other than Germany, France, Italy. These are that

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Speaker 1: these are the strongest trading partners in the West with China,

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Speaker 1: not necessarily the US. So the question becomes whether or

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Speaker 1: not this um, you know, multilateral approach that let received

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Speaker 1: from China around the world trying to shore up uh,

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Speaker 1: you know, positive on the bilateral front, good feelings and

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Speaker 1: so on, even with the United States, But whether or

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Speaker 1: not it masks UM. You know, the issue on Taiwan.

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Speaker 1: And the other issue is regarding selling of any kind

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Speaker 1: of technology that helps the military. Their military has grown,

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Speaker 1: is grown faster than our military. Take a look at

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Speaker 1: the naval components. It's it's larger than than the the

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Speaker 1: US and even today, I mean speaking of you know, Europe,

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Speaker 1: the US is been pushing the Netherlands with a SML

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Speaker 1: but you know it's it is a chip mak, right,

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Speaker 1: it's a manufacturer ships. Uh. Finally they have come out

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Speaker 1: and said they're going to be more cheerful with their

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Speaker 1: sales to China. They're going to you know, trying to

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Speaker 1: break off some of the parts that would go right

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Speaker 1: into laws. Um. Yeah, so that is not going away.

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Speaker 1: And you know, and by the way, it is in

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Speaker 1: the US across the aisles, Democrats and Republicans, this is

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Speaker 1: an area where they agree they do to be sot

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Speaker 1: on China. One of the very few. Quincy, thanks so

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Speaker 1: much for joining us. Quincy Crosby there. She is chief

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Speaker 1: global strategist at LPL Financial. Joining us to talk about

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Speaker 1: what to expect in the markets after this rally that

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Speaker 1: we've seen and throughout the rest of the year. Let's

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Speaker 1: talk stocks right now. Ted Oakley founder managing partner of

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Speaker 1: ox Bow Advisors, joins us Ted. I mean brutal year

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Speaker 1: for equities, also for fixed income as well. What do

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Speaker 1: you what's the message you went out to your clients

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Speaker 1: with when you were kind of saying, all right, let's

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Speaker 1: get ready for well, I think you know what we

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Speaker 1: did in twenty two was we were extremely defensive. You know,

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Speaker 1: we were fifty uh cash or short term treasuries primarily.

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Speaker 1: So while but your your clients don't your clients don't

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Speaker 1: mind you being in that much cash. Well, we were

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Speaker 1: getting you gotta remember now, it's not that it's not

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Speaker 1: Tina anymore. You can get you can get four and

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Speaker 1: a half percent or four sixty five right now and

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Speaker 1: even a three months and so we do a lot

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Speaker 1: with the floating right treasuries, but that's just a holding

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Speaker 1: spot for us UM. And then this year coming into it,

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Speaker 1: we just don't have I mean, we have a lot

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Speaker 1: of stocks on the two D probably a two hundred

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Speaker 1: stock screen we have, but none of those are they're

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Speaker 1: just not in evaluation areas where we want to come

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Speaker 1: by can we own stocks? But the stocks we've alreadyo owned,

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Speaker 1: but we're not buying too many things. You know, right

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Speaker 1: at this point other than some income oinants, we are

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Speaker 1: buying another portfolio. What are the levels that you're watching for,

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Speaker 1: and um, what do you think it's gonna take for

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Speaker 1: us to get down back down there again? Because we've

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Speaker 1: had pretty a pretty enthusiastic rally we have and I

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Speaker 1: will tell you it reminds me of the January of

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Speaker 1: oh one, two thousand one, you know, in the matter

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Speaker 1: markets seld Off hard nasdac uh you know, during two

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Speaker 1: thousand and came back at the end of the year,

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Speaker 1: had a good month in January, and then the rest

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Speaker 1: of the year of NAZAC getting a lower by far

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Speaker 1: of a lot of that. And so we're sort of

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Speaker 1: and people they talked about, you know, two thousand nine eleven,

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Speaker 1: but acts of the market was lower before and ended

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Speaker 1: up the year like that. So anyway, go to back

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Speaker 1: to your question what we're looking for. If you say

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Speaker 1: we're gonna do two hundred dollars on the SMP, I

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Speaker 1: know everybody's at two twenty five and all that, but

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Speaker 1: we think two hundred would be the best might be.

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Speaker 1: And so if you put yeah, put you know, if

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Speaker 1: you look at two hundred, it's only twelve or cent

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Speaker 1: below estimates. It's not that far. So if you do

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Speaker 1: two hundred and you take you know, you're take an

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Speaker 1: SMP at calling four thousand sixty, you're almost at twenty

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Speaker 1: multiple right now. And that's not where you get your

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Speaker 1: best buys ever, And so that's kind of where we're

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Speaker 1: looking at it. I think that's I think that's yet

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Speaker 1: to come. And and I said, well, we'll see. I

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Speaker 1: guess that's that's what makes a horse race. But that's

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Speaker 1: where we are right now. So you know, this is

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Speaker 1: gonna be a busy week TED four earnings. We've got

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Speaker 1: a hundred nine SPI companies reporting here. Um, do you

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Speaker 1: think we're gonna start seeing some big revisions downward in

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Speaker 1: earnings guidance from a lot of these companies. Well, you should.

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Speaker 1: But one of the things that we've noticed so much

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Speaker 1: the last five years really is they've been allowed to

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Speaker 1: get away with so much in the way of accruals

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Speaker 1: and all these adjustments to gap earnings that you have

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Speaker 1: to look through a lot of it. But I think

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Speaker 1: if you looked at an acremement the real cash earnings, yes,

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Speaker 1: I think those are some of those are gonna have

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Speaker 1: to be revised down for sure. So what are some

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Speaker 1: of the sectors here? I mean, I mean, as you

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Speaker 1: sit here with the high levels of cash, when you

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Speaker 1: do get ready to deploy, where do you think you'll

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Speaker 1: you'll put it? Will it be in some of the

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Speaker 1: defensive names where you try to get back into growth.

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Speaker 1: Where do you think the play is going to be? Well,

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Speaker 1: we have a mix. We have a mixed now. But

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Speaker 1: if you look at our favorite companies, you know they're

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Speaker 1: gonna be companies that can go through a tough procession period.

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Speaker 1: If you take Visa and MasterCard, you know they have

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Speaker 1: enough cash in a quarter almost to pay off all

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Speaker 1: the debt um and and if you inflate people use cards,

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Speaker 1: you know, the prices go up, people use cards more.

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Speaker 1: We think two other things like that. You know, obviously

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Speaker 1: you know we like uh, some defensive names O'Riley, you know,

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Speaker 1: a health And then we you know, we on the

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Speaker 1: we on the oils, we on gas pipelines, um. And

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Speaker 1: we particularly like the oil wyalties because you don't have

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Speaker 1: the capital investment. And so we think we mix all

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Speaker 1: those together and come up with a pretty good, you know,

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Speaker 1: pretty good mix overall. So we get some cash for

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Speaker 1: at the same time. And I'm getting on the treasury yep. Absolutely,

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Speaker 1: And I know you're based in Texas there. I'm just

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Speaker 1: envisioning you sitting around with your buddies talking oil NonStop. Um,

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Speaker 1: what is kind of the feeling down there about energy

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Speaker 1: because it's had such a really two great years for investors. Yeah, well,

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Speaker 1: you know I mentioned this to you before. A lot

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Speaker 1: of the oil people are not uh they're not great

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Speaker 1: for a sentiment here. You know, they get really excited

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Speaker 1: about when the prices up. For us, we felt we've

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Speaker 1: actually cut back on the majors and added to the

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Speaker 1: royalties because the royalties pay a lot more cash and

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Speaker 1: if we missing the oil goes higher, we'll participate in

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Speaker 1: the way. But I think what they forget is that, uh,

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Speaker 1: you know, you've had a big run and if you

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Speaker 1: do slow the economy down, it's not a guarantee. But

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Speaker 1: if you do slow it down, no matter what happened, Um,

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Speaker 1: you know, the price of oil will dri up a

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Speaker 1: little bit. And I know they never look at this,

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Speaker 1: but if you look at miles driven by people in

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Speaker 1: the last year, it's down. And so I think, you know, gasling,

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Speaker 1: which is a big piece of that will probably be

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Speaker 1: a news. Consumption will go lower, but there, you know,

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Speaker 1: but that's what they think. What we think is it

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Speaker 1: will drift with the economy and then you know, if

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Speaker 1: you want to pick it up the lower level, you

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Speaker 1: probably can. So you don't think we're gonna see Remember

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Speaker 1: in um two thousand and eight, when we knew that

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Speaker 1: the whole world was going to hell in a handbasket.

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Speaker 1: But yeah, um, the Chinese were still driving more and

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Speaker 1: more and more cars, and things weren't quite as bad

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Speaker 1: in Europe as they were here. Yet the housing crisis

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Speaker 1: hadn't rolled around the world and oil went to a

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Speaker 1: hundred forty six dollars a barrel. They don't think that's

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Speaker 1: gonna happen again. Oh yeah, eventually, Yeah, I do. I

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Speaker 1: think I think this is just a short term swoon. Uh.

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Speaker 1: But long term, if you look at if you look

428
00:23:59,400 --> 00:24:02,400
Speaker 1: at the numbers and supply the men, it's almost impossible

429
00:24:02,920 --> 00:24:06,560
Speaker 1: not to go back up. I mean, it's just once

430
00:24:06,640 --> 00:24:09,320
Speaker 1: you come out of it into a newer, a better economy.

431
00:24:09,800 --> 00:24:12,240
Speaker 1: And you gotta remember, China's just coming out to now.

432
00:24:12,440 --> 00:24:15,359
Speaker 1: So once you come out and that's and everybody else,

433
00:24:15,680 --> 00:24:17,240
Speaker 1: then you're going to be in a situation where the

434
00:24:17,280 --> 00:24:19,800
Speaker 1: price the price will go, It'll go it had almost

435
00:24:19,840 --> 00:24:22,920
Speaker 1: has to go up right now. Not not short term,

436
00:24:22,960 --> 00:24:24,520
Speaker 1: but I'm talking about it in the long term and

437
00:24:24,680 --> 00:24:28,120
Speaker 1: has to go up because there's not enough of it. Ted,

438
00:24:28,320 --> 00:24:31,639
Speaker 1: how to folks down in Texas really think about uh

439
00:24:31,800 --> 00:24:35,879
Speaker 1: kind of this move towards a more greener energy, uh

440
00:24:36,119 --> 00:24:38,680
Speaker 1: infrastructure if if you will, maybe in terms of time

441
00:24:39,000 --> 00:24:41,520
Speaker 1: or just kind of has an investment opportunity. I mean,

442
00:24:41,640 --> 00:24:43,680
Speaker 1: are you taking advantage of it even though you're surrounded

443
00:24:43,680 --> 00:24:47,879
Speaker 1: by wildcatters? Oh? Yeah? If you look across Texas and

444
00:24:47,960 --> 00:24:52,240
Speaker 1: we have a tremendous amount of wind power now and

445
00:24:52,320 --> 00:24:55,439
Speaker 1: a tremendous amount of solar power, all of those are

446
00:24:56,600 --> 00:24:57,920
Speaker 1: you know there? If you you go out in the

447
00:24:58,080 --> 00:25:01,760
Speaker 1: ranches and uh in Sexes and look around it, they

448
00:25:01,800 --> 00:25:04,479
Speaker 1: have a lot of them have windmills now, I mean

449
00:25:04,560 --> 00:25:07,240
Speaker 1: a lot and you know, so they're using wind, they're

450
00:25:07,320 --> 00:25:11,440
Speaker 1: using solar. It's not they're not um not using it.

451
00:25:11,560 --> 00:25:13,639
Speaker 1: They just they blended in with the other things they

452
00:25:13,680 --> 00:25:17,119
Speaker 1: had all right, Ted, good stuff appreciated. Always checking in

453
00:25:17,200 --> 00:25:19,200
Speaker 1: with you. Ted Oakley. He's a founder and managing partner

454
00:25:19,800 --> 00:25:25,320
Speaker 1: Oxbow Advisors. Let's check out what some of the pros

455
00:25:25,359 --> 00:25:27,320
Speaker 1: are doing in the marketplace here, because again a busy

456
00:25:27,400 --> 00:25:30,480
Speaker 1: busy week, lots of earnings, lots of eco data. Lyle

457
00:25:30,560 --> 00:25:35,399
Speaker 1: Himbau Uh joins us. He's a partner Granted Group Advisors. Lyle,

458
00:25:36,040 --> 00:25:39,000
Speaker 1: thanks for joining us here at Brutal two. We've got

459
00:25:39,080 --> 00:25:42,240
Speaker 1: a busy, busy week here. The markets have rebounded off

460
00:25:42,280 --> 00:25:45,359
Speaker 1: of those October lows. What are you telling your clients?

461
00:25:47,200 --> 00:25:49,679
Speaker 1: Great question right now? You know, you know if everything

462
00:25:50,200 --> 00:25:53,840
Speaker 1: for us is really about you know, valuation, valuation, valuation, right,

463
00:25:54,040 --> 00:25:56,840
Speaker 1: So when you look at the market today, and this

464
00:25:57,080 --> 00:25:58,760
Speaker 1: is part of the things that we put in our

465
00:25:58,840 --> 00:26:02,320
Speaker 1: quarly commentary to our clients, UH, is that we're treating

466
00:26:02,320 --> 00:26:06,200
Speaker 1: at eighteen point two times this year's earnings. In itself,

467
00:26:06,280 --> 00:26:08,560
Speaker 1: that's not so bad, but when you look at historical

468
00:26:08,680 --> 00:26:12,760
Speaker 1: norms of being between fifteen and sixteen, um, it's a

469
00:26:12,800 --> 00:26:15,560
Speaker 1: little high, right, So we could have a little bit

470
00:26:15,600 --> 00:26:19,080
Speaker 1: of retrenchment here coming down, but it's not so bad

471
00:26:19,119 --> 00:26:21,200
Speaker 1: if we have the growth. But if we don't have

472
00:26:21,320 --> 00:26:25,320
Speaker 1: the growth, there would be really no reason to really

473
00:26:25,359 --> 00:26:28,480
Speaker 1: go chase the market up here at this particular moment,

474
00:26:29,240 --> 00:26:31,840
Speaker 1: and by the way, that's across all companies, even those

475
00:26:31,920 --> 00:26:33,919
Speaker 1: that don't have an E. Right, if you look at

476
00:26:34,119 --> 00:26:36,080
Speaker 1: all the companies, only the ones that have an E,

477
00:26:36,320 --> 00:26:39,840
Speaker 1: we're trading at almost twenty times. Yeah, the ones that

478
00:26:39,960 --> 00:26:43,080
Speaker 1: have an E are like really really the small cap guys.

479
00:26:43,400 --> 00:26:47,120
Speaker 1: There are a bunch of small companies that I tell

480
00:26:47,160 --> 00:26:49,480
Speaker 1: the v C guys that call us a cold cause

481
00:26:49,560 --> 00:26:51,600
Speaker 1: he said, there's no reason for me to place money

482
00:26:51,600 --> 00:26:54,240
Speaker 1: with your privately when I can get public valuation of

483
00:26:54,440 --> 00:26:58,040
Speaker 1: private value equity valuations in the public market at this point, right,

484
00:26:58,119 --> 00:27:00,119
Speaker 1: So some of them are you know, the E is

485
00:27:00,280 --> 00:27:03,680
Speaker 1: essential going forward here in a sort of a flat market.

486
00:27:03,880 --> 00:27:07,440
Speaker 1: How much, by the way, um, how much of this

487
00:27:07,600 --> 00:27:11,000
Speaker 1: could change? We we've been talking about earnings performance on

488
00:27:11,080 --> 00:27:14,919
Speaker 1: the SMP on the nasdack, but we're only into it, right.

489
00:27:15,320 --> 00:27:17,600
Speaker 1: What kind of swings do you see in an earning

490
00:27:17,680 --> 00:27:21,080
Speaker 1: season like this, um, when there seems to be so

491
00:27:21,200 --> 00:27:23,560
Speaker 1: much uncertainty in the markets. Is there uncertainty in the

492
00:27:24,359 --> 00:27:27,080
Speaker 1: the remaining of the company's coming out earnings or do

493
00:27:27,119 --> 00:27:30,040
Speaker 1: we have a pretty good indicator? Might be the indications

494
00:27:30,080 --> 00:27:33,080
Speaker 1: are pretty good for those of people that put out

495
00:27:33,080 --> 00:27:35,399
Speaker 1: the earnings in advance. But you know right now, you know,

496
00:27:35,480 --> 00:27:37,640
Speaker 1: I think earn the cost of good soul is increasing.

497
00:27:37,720 --> 00:27:40,080
Speaker 1: So like we don't think there's gonna be a really

498
00:27:40,160 --> 00:27:43,080
Speaker 1: hard landing or economic recession, but in the short term here,

499
00:27:43,080 --> 00:27:46,399
Speaker 1: I think there's going to be a margin recession. Right,

500
00:27:46,520 --> 00:27:51,159
Speaker 1: So Poplin is okay, but the bottom line might be

501
00:27:51,280 --> 00:27:55,040
Speaker 1: affected because it's just so much costs so much more

502
00:27:55,119 --> 00:27:58,159
Speaker 1: to you know, you know, to establish that output for

503
00:27:58,520 --> 00:28:01,040
Speaker 1: you know, to deliver our product, how much of it? Also,

504
00:28:01,880 --> 00:28:06,040
Speaker 1: you know, it's being measured against an unfair, unfair time.

505
00:28:06,280 --> 00:28:09,560
Speaker 1: I mean, um, you know, because Paul is so focused

506
00:28:09,600 --> 00:28:12,880
Speaker 1: on the media and streaming and everything. Um, they've gone

507
00:28:12,920 --> 00:28:17,640
Speaker 1: through an exceptional and extraordinary period, the likes of which

508
00:28:18,160 --> 00:28:20,879
Speaker 1: is unlikely to be repeated for decades, right, I mean

509
00:28:20,920 --> 00:28:22,560
Speaker 1: once the next time, we're all gonna be locked in

510
00:28:22,600 --> 00:28:27,520
Speaker 1: our homes forced to watch every single program on Netflix. Yeah,

511
00:28:27,560 --> 00:28:31,159
Speaker 1: well I'm guilty of that. I went through. Uh, I

512
00:28:31,240 --> 00:28:34,600
Speaker 1: did some binge watching for a while, so the but

513
00:28:34,840 --> 00:28:39,280
Speaker 1: the I can't foresee, you know, you can't predict the unpredictable,

514
00:28:39,400 --> 00:28:43,000
Speaker 1: right when stuff like that happens, uh, is it is

515
00:28:43,200 --> 00:28:45,840
Speaker 1: really it's it's a once in a lifetime of that,

516
00:28:45,960 --> 00:28:48,440
Speaker 1: and that's why the valuations in tech got so crazy

517
00:28:48,520 --> 00:28:51,239
Speaker 1: back in twenty one. Right at the end of twenty one,

518
00:28:51,360 --> 00:28:56,000
Speaker 1: we were really three standard deviations over valid back in November. Uh,

519
00:28:56,160 --> 00:28:59,000
Speaker 1: in December of twenty one, it was really expensive. And

520
00:28:59,080 --> 00:29:01,400
Speaker 1: now then that's why seeing this, you know, you know

521
00:29:01,640 --> 00:29:05,280
Speaker 1: uh pullback in Nastac. The Naszak is still over I

522
00:29:05,320 --> 00:29:07,960
Speaker 1: would say that the Nazak is still slightly overvalued. I

523
00:29:08,040 --> 00:29:11,800
Speaker 1: still think we're we have some downside, really interested in general,

524
00:29:11,880 --> 00:29:13,880
Speaker 1: the SMP and the NAZAC. But I think there's going

525
00:29:13,960 --> 00:29:18,800
Speaker 1: to be um another I think a milder leg down

526
00:29:18,880 --> 00:29:24,800
Speaker 1: won't be as uh big as twenty two. But three's

527
00:29:25,440 --> 00:29:28,600
Speaker 1: so far is uh based on what I see in

528
00:29:28,600 --> 00:29:31,320
Speaker 1: the earnings, we should have some short term volatility going

529
00:29:31,400 --> 00:29:34,080
Speaker 1: on to the downside. Lie on. One of the concerns

530
00:29:34,120 --> 00:29:36,960
Speaker 1: that I think some some strategists call out, some fund

531
00:29:37,000 --> 00:29:39,160
Speaker 1: managers call out, is earnings risk. And if I look

532
00:29:39,200 --> 00:29:41,600
Speaker 1: at the SMP five hundred on the Bloomberg terminal, looking

533
00:29:41,640 --> 00:29:44,680
Speaker 1: like about dollars per share earnings this year, some folks

534
00:29:44,680 --> 00:29:48,200
Speaker 1: are even suggesting the downside to be two hundred two earnings.

535
00:29:48,280 --> 00:29:50,000
Speaker 1: Here are you in that camp? Do you think earnings

536
00:29:50,120 --> 00:29:53,000
Speaker 1: risk is is material in this market? It? You know,

537
00:29:53,040 --> 00:29:54,560
Speaker 1: from when you look at it, that's a great question.

538
00:29:54,720 --> 00:29:57,200
Speaker 1: When you look at it from a historical perspective, you know,

539
00:29:57,640 --> 00:29:59,719
Speaker 1: there's I don't want scary audience. But if you look

540
00:29:59,760 --> 00:30:02,680
Speaker 1: at off Ford p s, you get a much lower

541
00:30:02,880 --> 00:30:05,120
Speaker 1: SMP number. But let's assume we're not going to have

542
00:30:05,280 --> 00:30:07,600
Speaker 1: this hard landing. And then when you look at the

543
00:30:07,680 --> 00:30:11,640
Speaker 1: valuations here, you know, assume it's sixteen you know multiple,

544
00:30:11,880 --> 00:30:14,240
Speaker 1: you know, at least for the short term, if we

545
00:30:14,320 --> 00:30:16,800
Speaker 1: don't have you know, a fall off in the economy.

546
00:30:17,240 --> 00:30:19,880
Speaker 1: But at the end of the day, if if the

547
00:30:20,680 --> 00:30:24,280
Speaker 1: guys are right there, some people are looking at hundred.

548
00:30:24,520 --> 00:30:27,520
Speaker 1: Uh my friends over at Cratt Swifts they're saying, uh

549
00:30:28,200 --> 00:30:30,600
Speaker 1: to fifteen as the best case scenario, and imply a

550
00:30:30,720 --> 00:30:35,320
Speaker 1: sixteen multiple, you're getting thirty four hundred, right at least

551
00:30:35,360 --> 00:30:37,920
Speaker 1: on the short term. Right, So but you have to

552
00:30:38,080 --> 00:30:40,440
Speaker 1: I think, you know, for long term investors, I think

553
00:30:40,440 --> 00:30:42,680
Speaker 1: you really got to look out to twenty four right now.

554
00:30:43,160 --> 00:30:45,920
Speaker 1: You see earnings coming down. I saw in Bloomberg. I think, um,

555
00:30:46,520 --> 00:30:48,720
Speaker 1: I think earnings for this year down to two twenty

556
00:30:48,760 --> 00:30:52,160
Speaker 1: four to twenty three. But for next year, the earnings

557
00:30:52,200 --> 00:30:55,040
Speaker 1: are starting to come down for four and they were

558
00:30:55,080 --> 00:30:57,080
Speaker 1: at two fifty five. I think that down to two

559
00:30:58,240 --> 00:31:01,560
Speaker 1: seven and that's just starting. UM. So when you look

560
00:31:01,600 --> 00:31:05,720
Speaker 1: at normal metrics, you know, you know you and since

561
00:31:05,800 --> 00:31:08,920
Speaker 1: the market looks forward not backwards, uh, you've really got

562
00:31:09,040 --> 00:31:11,800
Speaker 1: to look at you know, sixteen multiple I think would

563
00:31:11,800 --> 00:31:14,400
Speaker 1: be normal and based it on around two forty or so.

564
00:31:14,480 --> 00:31:19,200
Speaker 1: And you're gonna get around, Lyle, what do you expect

565
00:31:19,600 --> 00:31:22,200
Speaker 1: to hear from j Powell and co On or really

566
00:31:22,280 --> 00:31:26,760
Speaker 1: just from UM Chairman Powell on Wednesday? Can you deliver

567
00:31:27,040 --> 00:31:30,520
Speaker 1: a very hawkish basis points? Is that what we're looking

568
00:31:30,560 --> 00:31:32,480
Speaker 1: for now? Yeah? I think I think, I think you

569
00:31:32,520 --> 00:31:35,640
Speaker 1: know the market is predicting basis points. That's that's that's

570
00:31:35,680 --> 00:31:38,680
Speaker 1: a done deal. Uh. If he goes fifty basis points,

571
00:31:38,720 --> 00:31:41,240
Speaker 1: which I'm sort of hoping he will, just to rip

572
00:31:41,320 --> 00:31:43,000
Speaker 1: the band aid off and get this over with because

573
00:31:43,040 --> 00:31:47,160
Speaker 1: you remember, his mandate is to really control inflation, and

574
00:31:47,320 --> 00:31:51,040
Speaker 1: inflation is controlled by wage inflation. Uh. Core inflation is

575
00:31:51,080 --> 00:31:55,680
Speaker 1: controlled by wage inflation. And uh, he's really got to

576
00:31:55,720 --> 00:31:58,000
Speaker 1: get that on control. If he does fifty, Uh, this

577
00:31:58,120 --> 00:32:01,400
Speaker 1: market will go down all right, good stuff appreciated as

578
00:32:01,480 --> 00:32:04,200
Speaker 1: always Lyle Himball. He is a partner at granted A

579
00:32:04,280 --> 00:32:10,840
Speaker 1: Group Advisors. It's interesting Ford hits back at Tesla's price

580
00:32:10,880 --> 00:32:14,840
Speaker 1: cut by lopping nearly six dollars off the Mustang. Mocke

581
00:32:15,440 --> 00:32:16,760
Speaker 1: I want to see what's going on there. What are

582
00:32:16,800 --> 00:32:19,480
Speaker 1: the folks in Detroit really think about this stuff? Keith not,

583
00:32:19,600 --> 00:32:23,520
Speaker 1: and he covers the autos industry for Bloomberg. He is

584
00:32:23,600 --> 00:32:27,440
Speaker 1: based in our Detroit bureau. Keith, You know Ford here,

585
00:32:27,760 --> 00:32:30,240
Speaker 1: what do you think they're doing? Are they following Tesla?

586
00:32:30,400 --> 00:32:32,400
Speaker 1: Are they trying to be a price leader? Is there

587
00:32:32,400 --> 00:32:34,880
Speaker 1: a demand part problem out there? What's going on with

588
00:32:34,960 --> 00:32:38,600
Speaker 1: this price cut? They're absolutely following Tesla. That's what they

589
00:32:38,640 --> 00:32:40,880
Speaker 1: told me when I asked him that direct question. Is

590
00:32:40,960 --> 00:32:44,200
Speaker 1: this a response to Tesla? The answer was yes. So

591
00:32:44,440 --> 00:32:46,920
Speaker 1: they're trying to, you know, build a beach head in

592
00:32:47,080 --> 00:32:50,600
Speaker 1: the electric vehicle market. Tesla controls two thirds of the

593
00:32:50,760 --> 00:32:54,160
Speaker 1: US market and Ford is the number two seller of

594
00:32:54,240 --> 00:32:58,360
Speaker 1: electric vehicles thanks to the Mustang MAKEE. So they're cutting

595
00:32:58,400 --> 00:33:01,400
Speaker 1: prices by an average of forty five hundred dollars a car.

596
00:33:02,760 --> 00:33:06,600
Speaker 1: That's as much as a nine cut um. But Tesla's cuts,

597
00:33:06,640 --> 00:33:10,840
Speaker 1: you might recall, were as much as so Tesla has

598
00:33:10,880 --> 00:33:15,400
Speaker 1: a much wider profit margin that it can mind as

599
00:33:15,480 --> 00:33:19,040
Speaker 1: it cuts places. Ford already has admitted that it's losing

600
00:33:19,120 --> 00:33:22,880
Speaker 1: money on the Mackie. But the Machi looks way cooler

601
00:33:22,920 --> 00:33:26,000
Speaker 1: than a Tesla. I mean, the Tesla design hasn't changed

602
00:33:26,120 --> 00:33:29,840
Speaker 1: since I first drove one in two thousand ten, you know. Um,

603
00:33:30,240 --> 00:33:32,960
Speaker 1: and for some cars that works, like the Dodge Challenger

604
00:33:33,360 --> 00:33:36,240
Speaker 1: I think has been around in its current form since

605
00:33:36,320 --> 00:33:39,360
Speaker 1: before that. But the Mackie is like the new new thing,

606
00:33:39,600 --> 00:33:43,760
Speaker 1: right or um to my eye at least, it's certainly

607
00:33:43,840 --> 00:33:48,640
Speaker 1: more interesting and more pleasing. Yeah, I mean, the Mackie

608
00:33:48,880 --> 00:33:51,960
Speaker 1: came out a couple of years ago. It is newer.

609
00:33:52,320 --> 00:33:57,160
Speaker 1: But obviously, you know, American buyers vote with their pocketbooks, right,

610
00:33:57,400 --> 00:34:00,800
Speaker 1: and Tesla controls two thirds of the elect vehicle market

611
00:34:00,800 --> 00:34:04,200
Speaker 1: in the United States. So what do the sales look

612
00:34:04,320 --> 00:34:07,240
Speaker 1: like for the Maki then, Keith, I mean, um, I'm

613
00:34:07,280 --> 00:34:11,560
Speaker 1: seeing more and more than my test drop one last year. Uh,

614
00:34:11,680 --> 00:34:15,839
Speaker 1: and maybe that's what sort of opened my eyes to it. Um.

615
00:34:16,680 --> 00:34:20,120
Speaker 1: Is it is it selling? Well? Oh yeah, man, it's

616
00:34:20,160 --> 00:34:24,080
Speaker 1: selling fantastic for GV sales more than double last year.

617
00:34:24,520 --> 00:34:26,520
Speaker 1: And part of what's going on here in a way

618
00:34:26,560 --> 00:34:30,840
Speaker 1: that Sport is hoping to improve the margin picture on

619
00:34:30,960 --> 00:34:35,480
Speaker 1: this vehicle is they are boosting capacity at their Mexican

620
00:34:35,600 --> 00:34:39,280
Speaker 1: plant by sixty so they planned to build a hundred

621
00:34:39,360 --> 00:34:42,959
Speaker 1: and thirty thousand makis this year, up from sixty seven

622
00:34:43,000 --> 00:34:45,000
Speaker 1: thousand last year. The exciting thing to me is that

623
00:34:45,040 --> 00:34:47,880
Speaker 1: you can get into such a cool looking vehicle, um

624
00:34:48,080 --> 00:34:51,640
Speaker 1: with you know, the obvious torque benefits of an e

625
00:34:51,800 --> 00:34:55,719
Speaker 1: V for so cheap. I mean, every other vehicle I

626
00:34:55,800 --> 00:34:59,600
Speaker 1: look at is costing eye popping amounts, and this one

627
00:34:59,719 --> 00:35:06,239
Speaker 1: still hovers around you know, forty grand even with options. Yep. Yeah,

628
00:35:06,280 --> 00:35:09,200
Speaker 1: the lowest price Mackie. Uh. They cut the price on

629
00:35:09,320 --> 00:35:11,680
Speaker 1: that one by nine hundred dollars, so that now starts

630
00:35:11,719 --> 00:35:17,799
Speaker 1: at that's the real old drive one. Uh. The high

631
00:35:18,000 --> 00:35:21,799
Speaker 1: end Markie, which is the the GT Uh. They cut

632
00:35:21,880 --> 00:35:27,279
Speaker 1: that price byred so that now starts at six. There's

633
00:35:27,280 --> 00:35:31,240
Speaker 1: another California Route one Extended Range edition that starts around

634
00:35:31,280 --> 00:35:35,200
Speaker 1: fifty seven nine, So you know, it's right starting below

635
00:35:35,280 --> 00:35:38,560
Speaker 1: fifty grand and then climbing well. But Keith, when I

636
00:35:38,719 --> 00:35:41,720
Speaker 1: do the math as a consumer, who looks to save

637
00:35:42,440 --> 00:35:44,719
Speaker 1: UH taxes in any way I can. I'm adding the

638
00:35:44,800 --> 00:35:46,840
Speaker 1: credit back in. Is that is that right for me

639
00:35:46,920 --> 00:35:49,840
Speaker 1: to add theredit back in? Is that a lock with

640
00:35:50,000 --> 00:35:52,879
Speaker 1: the Ford Mustang Maki or are we still not sure

641
00:35:53,040 --> 00:35:56,879
Speaker 1: exactly who's going to get these credits? Um, you can

642
00:35:57,160 --> 00:36:01,160
Speaker 1: get the credit um currently if you're below fifty K

643
00:36:01,640 --> 00:36:04,640
Speaker 1: on this type of vehicle. So some of the makis

644
00:36:05,120 --> 00:36:09,160
Speaker 1: will call it qualify certainly the the base model at

645
00:36:10,800 --> 00:36:13,000
Speaker 1: but there's also an all wheel drive model that also

646
00:36:13,160 --> 00:36:18,080
Speaker 1: is below the bogey. So um you can qualify it

647
00:36:18,480 --> 00:36:20,759
Speaker 1: for it on some of the make models. But so

648
00:36:20,880 --> 00:36:24,680
Speaker 1: that's the cutoff, not no e V, you know, totally

649
00:36:25,880 --> 00:36:29,360
Speaker 1: b EV if it costs more than fifty five thousand

650
00:36:29,640 --> 00:36:36,319
Speaker 1: gets tax credit anymore for this particular model configuration. There's

651
00:36:36,400 --> 00:36:40,600
Speaker 1: different levels. It's a very complex formula, so you know

652
00:36:40,800 --> 00:36:44,160
Speaker 1: math and and it's a formula that's still in flux

653
00:36:44,719 --> 00:36:48,239
Speaker 1: and will change more in the coming months. Hey, Keith,

654
00:36:48,239 --> 00:36:51,120
Speaker 1: you know Kevin Tynan at Bloomberg Intelligence has been really

655
00:36:51,200 --> 00:36:53,960
Speaker 1: consistent on his EV analysis over the last several years.

656
00:36:54,040 --> 00:36:57,480
Speaker 1: Were basically saying when Detroit can make money on evs,

657
00:36:57,880 --> 00:37:00,920
Speaker 1: they'll make evs but if they're getting the price here,

658
00:37:01,520 --> 00:37:04,960
Speaker 1: what's Ford saying about the profitability the unprofitability of these things.

659
00:37:06,120 --> 00:37:09,000
Speaker 1: Ford has said since June that the profits have been

660
00:37:09,040 --> 00:37:12,800
Speaker 1: wiped out on the make because of rising commodity costs.

661
00:37:13,320 --> 00:37:15,960
Speaker 1: They are working continually to try and cut costs out

662
00:37:16,000 --> 00:37:18,719
Speaker 1: of this thing. They feel like boosting production as much

663
00:37:18,760 --> 00:37:21,360
Speaker 1: as they're doing is going to help the profit picture.

664
00:37:21,400 --> 00:37:23,240
Speaker 1: You know, they're trying to make up for in volume,

665
00:37:23,280 --> 00:37:25,840
Speaker 1: if you will, but they are not making money on

666
00:37:25,920 --> 00:37:29,680
Speaker 1: this car. The choice they're making right now is trying

667
00:37:29,719 --> 00:37:33,239
Speaker 1: to gain market share. Established that beach head. They liked

668
00:37:33,280 --> 00:37:36,840
Speaker 1: being the number two seller of electric vehicles, way ahead

669
00:37:36,880 --> 00:37:39,400
Speaker 1: of general motors. So they want to stay in that

670
00:37:39,520 --> 00:37:42,239
Speaker 1: position and grow from there. And sometimes you have to

671
00:37:42,320 --> 00:37:46,560
Speaker 1: take some short term pain to make the long term gain. Keith,

672
00:37:46,680 --> 00:37:50,080
Speaker 1: you're in Detroit. What are the real car people in Detroit?

673
00:37:50,280 --> 00:37:52,239
Speaker 1: What are they saying about the e V business? Are

674
00:37:52,280 --> 00:38:01,040
Speaker 1: they grudgingly moving towards evs? Are rushing get ahead? I

675
00:38:01,120 --> 00:38:04,280
Speaker 1: see these everywhere. There's Tesla's in my neighborhood. There's ribbans

676
00:38:04,320 --> 00:38:07,680
Speaker 1: in my neighborhood. They are not knuckle drivers here in Detroit.

677
00:38:08,000 --> 00:38:12,640
Speaker 1: They are driving evs so and everybody likes the instant torque,

678
00:38:13,360 --> 00:38:15,920
Speaker 1: Like Matt, I've driven the Marquee several times. It's a

679
00:38:16,160 --> 00:38:20,279
Speaker 1: it's a blast as our all the evs out there

680
00:38:20,280 --> 00:38:24,440
Speaker 1: because of that instant torque. I've drove the F one

681
00:38:24,560 --> 00:38:28,520
Speaker 1: fifty Lightning. You know. You you touch the accelerator pedal

682
00:38:28,600 --> 00:38:31,040
Speaker 1: on that thing and it's like warp speed. So how

683
00:38:31,120 --> 00:38:33,919
Speaker 1: can you not enjoy this? So? Yeah, this car town

684
00:38:34,680 --> 00:38:38,040
Speaker 1: loves electric vehicles? Do we do we know whether there's

685
00:38:38,080 --> 00:38:41,000
Speaker 1: going to be more needed more laborers to build these

686
00:38:41,040 --> 00:38:44,359
Speaker 1: things are less fewer, right, it takes fewer to fewer

687
00:38:44,440 --> 00:38:48,239
Speaker 1: people put together. Yep. There are fewer moving parts in

688
00:38:48,320 --> 00:38:51,760
Speaker 1: an electric vehicle and it'll take I think the estimates

689
00:38:51,800 --> 00:38:54,640
Speaker 1: have been about one third fewer workers to assemble them.

690
00:38:55,200 --> 00:38:58,640
Speaker 1: You know, you have an electric motor um or multiple

691
00:38:58,680 --> 00:39:00,960
Speaker 1: electric motors, there's there's it's not a lot. It's not

692
00:39:01,120 --> 00:39:03,320
Speaker 1: as much as you get from an internal combustion engine.

693
00:39:04,040 --> 00:39:05,759
Speaker 1: That's what I thought. That's what I thought. All right,

694
00:39:05,800 --> 00:39:09,360
Speaker 1: good stuff. Keith Notton, he's our autist reporter based in Detroit,

695
00:39:09,480 --> 00:39:11,080
Speaker 1: which is a good thing. That's where you want him

696
00:39:11,120 --> 00:39:13,400
Speaker 1: to be. Uh, talking about the V business, Forward cutting

697
00:39:13,480 --> 00:39:17,120
Speaker 1: the price on their mocke pretty significant, and I mean

698
00:39:17,200 --> 00:39:19,840
Speaker 1: they're pretty clear. I mean, as Keith was reporting in

699
00:39:20,040 --> 00:39:23,200
Speaker 1: response to Tesla, they want to take market share, and um,

700
00:39:23,680 --> 00:39:25,239
Speaker 1: it's a cool little vehicle to do so. I just

701
00:39:25,320 --> 00:39:27,840
Speaker 1: think they need more. Thanks for listening to the Bloomberg

702
00:39:27,920 --> 00:39:31,320
Speaker 1: Markets podcast. You can subscribe and listen to interviews with

703
00:39:31,360 --> 00:39:36,160
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller.

704
00:39:36,480 --> 00:39:40,040
Speaker 1: I'm on Twitter at Matt Miller V three. Pet On

705
00:39:40,160 --> 00:39:43,200
Speaker 1: Ball Sweeney I'm on Twitter at pt Sweeney. Before the podcast,

706
00:39:43,280 --> 00:39:45,759
Speaker 1: you can always catch us worldwide at Bloomberg Radio