WEBVTT - Stocks Rise Before Trump Speech 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penel Podcast. I'm Paul Swinge. You, 0:00:05.360 --> 0:00:07.680 along with my co host Lisa Brahma Waits, each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money. Whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.520 --> 0:00:17.960 Podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:21.880 at Bloomberg dot com. This week we get J. Powell, 0:00:22.000 --> 0:00:24.840 the Chair of the Federal Reserve, speaking on Wednesday and 0:00:25.160 --> 0:00:29.280 Thursday testifying I should say, but that comes after today's 0:00:29.320 --> 0:00:33.280 speech by President Trump at the Economic Club of New York, which, 0:00:33.320 --> 0:00:37.519 according to our own Michael McKee may dictate what J. 0:00:37.680 --> 0:00:40.199 Powell will talk about. Here to join us, to give 0:00:40.240 --> 0:00:42.680 us some insight from the dept market perspective is our 0:00:42.720 --> 0:00:46.000 own Ira Jersey. He is chief US interestrate strategist for 0:00:46.000 --> 0:00:50.640 Bloomberg Intelligence. So, Ira, how do you think J. Powell 0:00:51.000 --> 0:00:56.160 could potentially respond to something that President Trump says today? Hey, well, 0:00:56.200 --> 0:00:58.600 I guess it depends on what he says. I suppose 0:00:58.640 --> 0:01:01.280 if it's talking about trade aid um, you know, won't 0:01:01.280 --> 0:01:04.600 be much different than what Chair Powell said before, which 0:01:04.640 --> 0:01:07.119 is you know that trade is is something that they 0:01:07.120 --> 0:01:09.440 look at for what's going to be the direction of 0:01:09.440 --> 0:01:12.119 the economy and and therefore what they have to do 0:01:12.280 --> 0:01:15.399 as far as monetary policy goes. UM. If you know 0:01:15.480 --> 0:01:18.280 he talks about if if President Trump talks about, you know, 0:01:18.520 --> 0:01:22.080 reducing the Fed's independence and you know, and and basically 0:01:22.120 --> 0:01:24.720 reiterating some of his his tweets, then you know, I 0:01:24.760 --> 0:01:27.320 think Chair Powell will want to reiterating again something that 0:01:27.319 --> 0:01:30.480 he said at almost every press conference during his tenure, 0:01:30.800 --> 0:01:33.280 and that's that you know, the FED is is independent 0:01:33.280 --> 0:01:35.039 and that the FED will do what it needs to do. 0:01:35.080 --> 0:01:38.720 That Congress gave them the the authority to conduct monetary 0:01:38.760 --> 0:01:41.840 policy as the Committee sees fit and um, and they're 0:01:41.880 --> 0:01:45.600 not political. Um. You know, obviously what he hears, I 0:01:45.640 --> 0:01:47.680 think is going to give him some odditatave. But he 0:01:47.760 --> 0:01:50.440 has to say those types of non political you know, 0:01:50.440 --> 0:01:53.240 we're non political organization and say things like that. So 0:01:53.280 --> 0:01:55.120 I at LEASA and I had this morning. We're talking 0:01:55.120 --> 0:01:58.240 about that Bank of America, a fund manager, a survey 0:01:58.440 --> 0:02:01.320 that came out and it's a you know, surprising I 0:02:01.360 --> 0:02:04.000 think to me at least quite optimistic in terms of 0:02:04.000 --> 0:02:06.920 the view of the markets in the economy. Do you 0:02:06.920 --> 0:02:10.399 think the FED views the world that way or they 0:02:10.639 --> 0:02:13.560 have maybe a higher level of caution. I think that 0:02:13.639 --> 0:02:15.799 they tend to be a little bit more risk averse. 0:02:15.880 --> 0:02:18.600 I think that's been one of the features of the 0:02:18.600 --> 0:02:21.359 Federal Reserve since the end of the h since the 0:02:21.400 --> 0:02:24.880 financial crisis. Really it's that, you know, let's use caution first, 0:02:24.919 --> 0:02:27.520 because we don't have a lot of ammunition. We're not 0:02:27.840 --> 0:02:30.279 we don't want to have to do some more extraordinary 0:02:30.280 --> 0:02:34.359 measures in terms of monetary policy easing. So let's make 0:02:34.400 --> 0:02:36.800 sure that the economy is on stable footing before we 0:02:37.360 --> 0:02:39.679 um before we hike interest rates meaningfully. So so I 0:02:39.720 --> 0:02:42.520 think at this environment, yeah, I agree with that kind 0:02:42.560 --> 0:02:44.600 of sentiment you just mentioned, Paul, is that I think 0:02:44.600 --> 0:02:46.800 the FED is a little bit more skeptical than maybe 0:02:47.080 --> 0:02:50.040 um that maybe some market participants are at the moment. 0:02:50.320 --> 0:02:52.120 And I think what's going on with a lot of 0:02:52.120 --> 0:02:54.640 market participants is it's not that things are particularly good, 0:02:54.760 --> 0:02:57.360 it's that things aren't as bad as a feared. And 0:02:57.400 --> 0:02:59.480 I think that that's kind of the environment where you 0:02:59.520 --> 0:03:02.160 can have equities, you know, at or near highs, and 0:03:02.160 --> 0:03:04.239 and interest rates, you know, creeping a little bit higher. 0:03:04.520 --> 0:03:06.680 How much is this Europe actually doing a little bit 0:03:06.760 --> 0:03:09.920 better than it had been, Oh, quite a lot, I think. 0:03:10.360 --> 0:03:12.040 I think at least that that's a very good point, 0:03:12.120 --> 0:03:15.359 because you know, Europe, Europe has really kind of been, 0:03:15.600 --> 0:03:18.840 um uh been a big big issue I think for 0:03:18.960 --> 0:03:22.320 developed markets in in in general, and the fact that 0:03:22.320 --> 0:03:25.560 that they're basically exporting a lot of deflation and disinflationary 0:03:25.720 --> 0:03:28.160 kind of impulses to the rest of the world has 0:03:28.240 --> 0:03:30.239 been an issue. So the fact that you might have 0:03:30.280 --> 0:03:33.280 some stabilization and some of their their survey measures, their 0:03:33.320 --> 0:03:35.880 manufacturing seems to be lower. You're now getting some fiscal 0:03:35.920 --> 0:03:39.240 policy out of France, for example, that might actually help 0:03:39.280 --> 0:03:41.760 their economy a little bit. So when you get this incrementally, 0:03:42.200 --> 0:03:44.280 you know, kind of good news on the economic front, 0:03:44.480 --> 0:03:46.360 that's going to lift yields, you know, you know, you know, 0:03:46.520 --> 0:03:49.119 look at German tenure yields. They're still negative and there's 0:03:49.120 --> 0:03:52.200 still you know, negative twenty five basis points, but they're 0:03:52.200 --> 0:03:55.400 significantly off their loads of negative seventy basis points, right, 0:03:55.440 --> 0:03:57.360 So that's a that's a pretty subsential move. I mean, 0:03:57.360 --> 0:04:00.440 that's as big a move in uh in German and yields, 0:04:00.440 --> 0:04:02.480 as you've seen in US yields over the past couple 0:04:02.480 --> 0:04:06.160 of weeks. I want to talk about a a research 0:04:06.240 --> 0:04:07.320 note you put out this morning. I thought it was 0:04:07.320 --> 0:04:10.280 pretty interesting. It talks about treasury auctions and actually how 0:04:10.280 --> 0:04:12.760 they occur. My understanding when I was back on the 0:04:12.800 --> 0:04:17.400 street was the dealers, treasury dealers on the street bought 0:04:17.560 --> 0:04:20.839 the US bonds and notes when they came out at auction. 0:04:20.880 --> 0:04:23.160 Has that changed or how has that changed? Yeah? So, 0:04:23.160 --> 0:04:26.200 so prior to the crisis, you know, dealers bought a 0:04:26.279 --> 0:04:29.080 bulk of of debt and then wound up reselling it 0:04:29.160 --> 0:04:32.440 to UH to other investors. So you know, dealers didn't 0:04:32.600 --> 0:04:34.559 necessarily hold a lot of their debt. They just wind 0:04:34.600 --> 0:04:37.719 up having to buy it auction. So since the crisis, 0:04:37.760 --> 0:04:40.360 that shifted quite a lot. And actually, investment funds tend 0:04:40.400 --> 0:04:43.760 to participate in treasury auctions much more than they used to. 0:04:43.839 --> 0:04:46.040 In fact, you know, if we're just looking at tenure 0:04:46.080 --> 0:04:49.600 treasuries for example, investment funds take between fifty and six 0:04:50.240 --> 0:04:52.920 of most treasure of most ten year treasury auctions. These days, 0:04:53.240 --> 0:04:56.640 dealers take the next most which is only about and 0:04:56.680 --> 0:05:00.359 then um and and then direct bidder so these people 0:05:00.360 --> 0:05:04.760 who uh so foreigners say, uh, they only take about 0:05:04.800 --> 0:05:08.000 ten percent. So so there's this idea I think in 0:05:08.040 --> 0:05:12.880 the world that even though um uh, even though foreign 0:05:12.960 --> 0:05:16.960 holders of treasuries are still very large and about treasury 0:05:17.000 --> 0:05:20.800 debt right now is held by them, um, really auctions 0:05:20.839 --> 0:05:24.000 are being driven more by domestic investment funds. So these 0:05:24.040 --> 0:05:28.760 are you know, pension funds, annuities, uh, mutual funds and 0:05:28.760 --> 0:05:31.279 and the like. So it's really, you know, domestic investors 0:05:31.320 --> 0:05:34.359 really have a lot of um demand for for U 0:05:34.440 --> 0:05:36.800 S treasuries. Um. Just going back to the Bank of 0:05:36.800 --> 0:05:40.520 America Marylynch Fund Managers Survey, another notable sort of shift 0:05:40.560 --> 0:05:43.839 that we saw was the expectation for yield curve steepening. 0:05:43.839 --> 0:05:46.560 And right now I'm looking at the gap between tenure 0:05:46.560 --> 0:05:50.719 and two year treasury yields reaching the highest since to 0:05:50.839 --> 0:05:54.080 lie nearly towards the highs of the year, just in 0:05:54.080 --> 0:05:56.279 about thirty seconds here, Ira, do you expect this to 0:05:56.279 --> 0:05:58.240 continue or do you think that the consensus has gotten 0:05:58.240 --> 0:06:00.640 ahead of itself. Well, I think we's only eight basis 0:06:00.640 --> 0:06:02.760 points was the high of the year back in June, 0:06:02.800 --> 0:06:04.800 and I think you break that and and we'll keep 0:06:04.839 --> 0:06:07.520 on steepening a little bit. That's not that far of 0:06:07.520 --> 0:06:11.040 a call, right, yeah, exactually yeah exactly so. UM, but 0:06:11.279 --> 0:06:12.760 if you if you break above that, then I do 0:06:12.839 --> 0:06:14.840 think you can reach thirty five and kind of new 0:06:14.920 --> 0:06:17.320 new highs. I think the reason for this is just 0:06:17.440 --> 0:06:20.400 the idea that, um, that the economy is not as 0:06:20.440 --> 0:06:22.479 bad as it was, and the Federal Reserve is not 0:06:22.560 --> 0:06:25.840 going to be hiking monetary policy anytime soon, so you're 0:06:25.880 --> 0:06:29.040 able to see the yield curve. Stepen just a little 0:06:29.080 --> 0:06:31.360 bit more from here our Jersey, Thank you so much. 0:06:31.520 --> 0:06:34.719 Ira is the chief US interest rate strategist for Bloomberg Intelligence. 0:06:34.800 --> 0:06:51.560 Joining us on the phone. In a little bit more 0:06:51.600 --> 0:06:54.440 than an hour, President Trump taking the podium at the 0:06:54.480 --> 0:06:57.560 Economic Club of New York, expected to talk about the 0:06:57.640 --> 0:07:00.600 US economy and how well it's doing. He'll also potentially 0:07:00.640 --> 0:07:06.719 answer questions about China trade. Then tomorrow J Powell testifying, 0:07:06.920 --> 0:07:09.480 we'll be taking that live. You can listen to it. 0:07:09.560 --> 0:07:12.600 But all of this uh coming at a tenuous time, 0:07:12.640 --> 0:07:16.080 a lot of uncertainty about whether the economy is about 0:07:16.120 --> 0:07:19.360 to take off or whether perhaps people are over their 0:07:19.360 --> 0:07:22.720 skis joining us now, Kevin Cummings. He is economist at 0:07:22.760 --> 0:07:26.120 net West Markets Securities, So, Kevin Cummins, I'd love to 0:07:26.120 --> 0:07:28.760 get your perspective on this sentiment shift that we've seen, 0:07:28.800 --> 0:07:31.960 which is somewhat dramatic now people being much more bullish 0:07:32.400 --> 0:07:36.200 rather than bearish. What data have we gotten to actually 0:07:36.600 --> 0:07:40.440 edify that view. Yeah, well, there's certainly good morning first off, 0:07:40.520 --> 0:07:45.800 but there's certainly optimism growing over a reduction and uncertainty 0:07:45.960 --> 0:07:48.640 should the U. S. And China sign some sort of 0:07:48.720 --> 0:07:53.160 phase one trade agreement. UM. In our own view here 0:07:53.160 --> 0:07:56.600 in UTS markets were a little bit reluctant to kind 0:07:56.680 --> 0:07:59.800 of uh think that everything's going to turn out all 0:07:59.840 --> 0:08:02.760 of positive in two thousand and twenty if there is 0:08:02.840 --> 0:08:06.200 some sort of agreement reached UM, which seems that it's 0:08:06.280 --> 0:08:09.320 things seem to be moving in that direction, and perhaps 0:08:09.520 --> 0:08:13.640 you know, the market could potentially be UM if if 0:08:14.120 --> 0:08:18.040 Trump this afternoon uh does talk a little bit more 0:08:19.320 --> 0:08:23.040 hawk is shot on the outlook there, then UM markets 0:08:23.040 --> 0:08:26.840 potentially could disappoint here. But UM, you know, as far 0:08:26.920 --> 0:08:30.200 as UM the overall economy, I think you know the 0:08:30.680 --> 0:08:34.479 data themselves that have been better obviously was the employment 0:08:34.559 --> 0:08:37.360 report at the start of the month. Um, you know, 0:08:37.440 --> 0:08:41.880 the thousand jobs that were announced. There's nothing to necessarily 0:08:41.880 --> 0:08:44.840 write home about, but there were some positive signs of 0:08:44.920 --> 0:08:49.679 the trend is rising at a better pace than what 0:08:49.800 --> 0:08:52.320 was initially anticipated because it was a big upward revision 0:08:52.360 --> 0:08:54.000 to the prior months, and some of the other data 0:08:54.040 --> 0:08:57.480 within the report were fairly positive. So, Kevin, are you 0:08:57.520 --> 0:09:01.000 of the opinion that it's really really just talking about 0:09:01.000 --> 0:09:04.160 the consumer here in this economy? We know the consumer economy, 0:09:04.240 --> 0:09:07.120 but it seems like the other thirty percent is is 0:09:07.320 --> 0:09:11.080 pretty weak, maybe even manufacturing recession. Is the consumer strong 0:09:11.200 --> 0:09:14.200 enough to keep this economy growing? Yeah, I mean, consumers 0:09:14.200 --> 0:09:17.120 spending certainly has been driving the growth in the economy lately. 0:09:17.400 --> 0:09:20.040 UM and as you mentioned, manufacturing, which is pretty much 0:09:20.040 --> 0:09:23.400 at the epicenter of the UH the trade war. Obviously, 0:09:23.440 --> 0:09:26.360 we've seen business investment and exports slow down as well, 0:09:26.440 --> 0:09:29.280 so it's not only confined to the manufacturing sector. But 0:09:29.720 --> 0:09:33.320 you know, the consumer, as you mentioned, correctly, UH is 0:09:33.440 --> 0:09:36.320 definitely leading the charge with growth. But I think it's 0:09:36.360 --> 0:09:40.040 pretty obvious that the economy is in a slowing phase. 0:09:40.120 --> 0:09:41.520 And you know, at the start of the year where 0:09:41.640 --> 0:09:43.480 a three percent and the last couple of quarters we've 0:09:43.480 --> 0:09:46.679 been around two percent UM, which seems like a reasonable 0:09:46.800 --> 0:09:49.080 estimate for the fourth quarter as well. We don't have 0:09:49.200 --> 0:09:52.319 too much data that go directly into adding up g 0:09:52.480 --> 0:09:54.800 DP just yet, but later this week we will get 0:09:54.840 --> 0:09:58.480 retail sales, which, um, you know, allow us to get 0:09:59.120 --> 0:10:02.679 some sense of least UH spending heading into the all 0:10:02.720 --> 0:10:06.960 important holiday shopping season. A lot of people, including President Trump, 0:10:07.280 --> 0:10:11.000 seemed to be increasingly conflating the performance of equity markets 0:10:11.040 --> 0:10:14.360 with the US economy. Uh. And I guess you know, 0:10:14.440 --> 0:10:18.840 even if we do have a slowing US economy, can 0:10:18.840 --> 0:10:24.240 that support new record highs on the SMP. Yeah. Well, 0:10:24.280 --> 0:10:26.079 I mean it's a little bit out of my purview, 0:10:26.080 --> 0:10:29.400 and I'm not necessarily an equity strategy, but I do 0:10:29.600 --> 0:10:34.120 think that the equity market is a good, um at 0:10:34.240 --> 0:10:40.360 least um indicator of how things are currently UM. So 0:10:40.400 --> 0:10:44.679 it's more of a coincident indicator. There's very little economic 0:10:44.760 --> 0:10:48.240 data that actually do that good of a forward looking 0:10:48.440 --> 0:10:51.760 gauge about growth, But I do think the equity market 0:10:51.760 --> 0:10:54.920 obviously is a very important one. So I definitely don't 0:10:54.920 --> 0:11:01.040 want to dismiss the positive tone in the equity market, uh, 0:11:01.080 --> 0:11:03.640 with regard to you know, the future growth in the 0:11:03.760 --> 0:11:07.800 US economy. UM, but I do think that some of 0:11:07.840 --> 0:11:11.880 the earlier strength we've seen in the consumer is probably exaggerated. 0:11:11.920 --> 0:11:15.280 And and uh, you know, even just last week, the 0:11:15.720 --> 0:11:19.160 your guys measure the Bloomberg Consumer Comfort and the index 0:11:19.200 --> 0:11:21.520 fell to a seven month low. So you know, it 0:11:21.640 --> 0:11:24.440 is only one week's worth of data, but I do 0:11:24.559 --> 0:11:28.120 think we're at UM. You know, we are starting to 0:11:28.160 --> 0:11:32.720 see a downshift in in consumer spending, which kind of 0:11:32.960 --> 0:11:36.640 is aligns with the slowdown that we've seen in peril growth. 0:11:36.679 --> 0:11:39.240 Now at the top, we did mention that the employment 0:11:39.240 --> 0:11:43.280 report was very strong, UM, and all the upward visions 0:11:43.280 --> 0:11:45.520 to earlier months were positive. But I do think we're 0:11:45.520 --> 0:11:48.800 starting to see some cracks in the consumer um. Not 0:11:48.880 --> 0:11:52.319 only consumer comfort index with the Bloomberg number coming down, 0:11:52.320 --> 0:11:54.719 but auto sales for October fell over three and a 0:11:54.760 --> 0:11:57.520 half percent or just about three and a half percent UM, 0:11:57.559 --> 0:11:59.720 which is likely to hold back over all retail sales 0:11:59.720 --> 0:12:03.080 on for day. UM. You know, these data are clearly 0:12:03.080 --> 0:12:06.440 aren't weak enough for the FED to reconsider any recent 0:12:06.520 --> 0:12:08.959 signal on rates, But in our view, the data don't 0:12:09.000 --> 0:12:12.240 necessarily support the high degree of confidence that the Fed 0:12:12.840 --> 0:12:16.760 um and what Powell is likely to emphasize tomorrow. UM 0:12:16.800 --> 0:12:20.040 with regard to the consumer and the outlook, Kevin Hell, 0:12:20.040 --> 0:12:22.880 what's your view of the European economy. Some people are 0:12:22.880 --> 0:12:26.240 suggesting that perhaps it's kind of bottoming out. Do you 0:12:26.360 --> 0:12:30.520 share that you? Um, Well, the data there with regard 0:12:30.600 --> 0:12:34.880 to like the purchasing managers surveys have been um, definitely 0:12:35.000 --> 0:12:37.200 less weak than they were. I mean, they were collapsing 0:12:37.240 --> 0:12:39.880 for a while, and they at least showed signs of 0:12:39.920 --> 0:12:45.680 stability there. Um. And obviously economies like Germany is is 0:12:46.240 --> 0:12:49.000 really getting bearing a lot of the bront from the 0:12:49.080 --> 0:12:51.800 China trade war, so you know, they are much more 0:12:51.840 --> 0:12:56.199 open and exposed to global situations than the US uh 0:12:56.320 --> 0:13:00.440 is directly, so you know, I focus more on the US, 0:13:00.600 --> 0:13:04.880 but we've we've seen less weakness. I think they're relative 0:13:04.960 --> 0:13:08.240 to the earlier really significant downward aumentum that we saw earlier. 0:13:08.840 --> 0:13:10.720 Kevin Cummins, thank you so much for being with us. 0:13:10.800 --> 0:13:31.800 Kevin Cummins, economist with nat West Markets Securities. Today is 0:13:31.840 --> 0:13:33.839 a big day for the Walt Disney Company. They launched 0:13:34.000 --> 0:13:37.440 Disney Plus, their streaming service that is slated to go 0:13:37.520 --> 0:13:39.920 head to head with Netflix. Stock US up one point 0:13:40.040 --> 0:13:43.120 five percent today to walk us through kind of what 0:13:43.120 --> 0:13:45.800 it means for the company. We welcome Githa Rungan often 0:13:45.880 --> 0:13:48.920 she is senior media annalys for Bloomberg Intelligence, joining us 0:13:48.960 --> 0:13:51.679 on the phone. So, Keith, this is a big day 0:13:51.760 --> 0:13:55.160 for Disney. Tell us kind of what their strategy is 0:13:55.400 --> 0:13:59.640 here with Disney Plus. Yeah. So absolutely, Paulso there's been 0:13:59.679 --> 0:14:02.800 a lot of excitement and anticipation building up for this service, 0:14:02.800 --> 0:14:06.480 which will really be the core of Disney's uh director 0:14:06.520 --> 0:14:10.600 consumer strategy. Um. So, they've been really building for this 0:14:10.720 --> 0:14:14.480 service for many many years now, acquiring the technology and 0:14:14.520 --> 0:14:18.720 then really making that transformative acquisition with Fox just to 0:14:18.760 --> 0:14:23.520 get that extensive catalog of content. But really this is uh, 0:14:23.600 --> 0:14:25.200 you know, this is going to be the core of 0:14:25.200 --> 0:14:27.800 the company I think for for for the foreseeable future. 0:14:28.440 --> 0:14:31.880 Management has staked especially Bob Iger, has kind of staked 0:14:31.880 --> 0:14:34.480 his legacy on this on on the success of this product. 0:14:34.560 --> 0:14:36.840 So it is a make or break attempt by Disney 0:14:36.880 --> 0:14:40.080 to reposition the company for growth. I love how it's 0:14:40.120 --> 0:14:43.160 being assessed right now. The rollout, yes, there were technical 0:14:43.200 --> 0:14:47.000 glitches and crashes for some users, but social media people 0:14:47.000 --> 0:14:49.280 seem to like it. Uh, you know how do we 0:14:49.320 --> 0:14:52.840 decide whether this was successful or not. So I think 0:14:52.920 --> 0:14:56.880 first day launch issues are typical in streaming. I mean, 0:14:56.920 --> 0:14:59.920 they did expect this. They had a test pilot whi 0:15:00.560 --> 0:15:03.560 uh they carried out in the Netherlands a few weeks ago. Um. 0:15:03.720 --> 0:15:06.200 Disney management said last week at the earnings called that 0:15:06.360 --> 0:15:10.239 that pilot actually was pretty successful. The glitches are scattered. 0:15:11.000 --> 0:15:13.400 I think it resolves itself in the course of the 0:15:13.400 --> 0:15:15.800 next few hours or by the end of the day. Um. 0:15:15.840 --> 0:15:17.680 They did actually put a tweet out just a few 0:15:17.680 --> 0:15:22.240 minutes ago saying that consumer demand has exceeded expectations. Uh. 0:15:22.280 --> 0:15:25.520 And so at that point, yeah, absolutely positive. And um, 0:15:27.200 --> 0:15:29.760 come on, do we expect anything other than that. This 0:15:29.800 --> 0:15:31.880 is from Disney, right were they're gonna put a tweet 0:15:31.920 --> 0:15:34.640 up being like, guys, guys, where are you? I don't 0:15:34.680 --> 0:15:37.200 know why you're not signing up faster? I mean, there 0:15:37.240 --> 0:15:39.720 were some Um, so there were some reports yesterday which 0:15:39.800 --> 0:15:41.000 just just to kind of give you a sense of 0:15:41.320 --> 0:15:44.200 the demand out there. So there were some reports suggesting 0:15:44.200 --> 0:15:46.800 that they were almost more than two million pre orders. 0:15:47.440 --> 0:15:49.560 But really, I mean, I think Disney's secret weapon here 0:15:49.600 --> 0:15:52.360 will be it's it's marketing advantage. Right. They have millions 0:15:52.360 --> 0:15:55.200 and millions of touch points across the company, spanning their channels, 0:15:55.240 --> 0:15:58.600 their parks, their cruises, their their hotels, retail stores, so 0:15:58.640 --> 0:16:00.160 that that's an area that they're really going to have 0:16:00.240 --> 0:16:03.400 significant advantage. So Keita talked to us about the financials here, 0:16:03.440 --> 0:16:05.960 the economics of this business. It's not a cheap business. 0:16:05.960 --> 0:16:08.200 We see the you know, Netflix spending a good jillion 0:16:08.200 --> 0:16:11.640 dollars every year on programming. What's how's Disney they do it? Yeah, 0:16:11.640 --> 0:16:14.800 it's it's really the same story for Disney as well. Um. 0:16:14.880 --> 0:16:17.400 The only I guess the main difference there is they 0:16:17.440 --> 0:16:20.160 own a lot of their library content. So at launch 0:16:20.240 --> 0:16:23.720 they have five hundred films, seven thousand, five hundred uh 0:16:23.760 --> 0:16:27.040 episodes TV episodes. They own all of that. Of course, 0:16:27.040 --> 0:16:29.240 it's still going to cost them because they are putting 0:16:29.280 --> 0:16:32.320 originals on their service as well. So they at launch 0:16:32.400 --> 0:16:35.120 they have ten originals. By the fifth year, they're going 0:16:35.160 --> 0:16:38.240 to have almost sixty of those originals, and just with 0:16:38.880 --> 0:16:41.480 the cost of the originals, uh, as well as the 0:16:41.600 --> 0:16:44.360 last licensing revenue, they're gonna lose probably anywhere from about 0:16:44.400 --> 0:16:47.640 two to two and a half billion over the next 0:16:47.720 --> 0:16:50.560 few years. In each of the next few years, So 0:16:50.600 --> 0:16:52.360 the service is not going to be profitable till at 0:16:52.440 --> 0:16:57.960 least fourth. Do you have cable, I do? Yeah, what 0:16:58.080 --> 0:16:59.880 what what would it take for you to cut the cord? 0:17:00.720 --> 0:17:02.960 So so I think the thing that's really keeping me 0:17:03.000 --> 0:17:06.520 glued to to cable right now, like everybody else, is sports. 0:17:06.920 --> 0:17:13.119 Um you know your um, well I have lots of them. 0:17:13.200 --> 0:17:18.400 Um yeah, but but you know, just just sports in general. 0:17:18.560 --> 0:17:21.400 And I think that's what's keeping people really glued to 0:17:21.400 --> 0:17:26.160 to to to their bundle right now. This this Disney 0:17:26.160 --> 0:17:29.920 plus thing. One could argue that maybe Disney and all 0:17:29.920 --> 0:17:32.600 these other folks are are late to the game. Um. 0:17:32.640 --> 0:17:34.919 I mean there's a lot of competition in the streaming business. 0:17:35.000 --> 0:17:38.199 Talked to us about the competitive landscape. Yeah, I think that, 0:17:38.400 --> 0:17:41.240 you know, most people are really kind of expecting more 0:17:41.240 --> 0:17:44.880 of this two horse race between Netflix and Disney. Um. 0:17:44.960 --> 0:17:46.760 We do have some of the other services as well. 0:17:47.000 --> 0:17:49.040 You know, CBS, for instance, has the all access in 0:17:49.080 --> 0:17:51.720 the showtime service. But I think a lot of those 0:17:51.760 --> 0:17:54.600 are are going to really see tremendous competitive pressure. I 0:17:54.640 --> 0:17:56.480 think when all is said and done, over the next 0:17:56.680 --> 0:17:59.680 three to four years, we're really going to see Netflix, Um, 0:17:59.800 --> 0:18:02.320 kind of consolidate its position, and Disney with its three 0:18:02.400 --> 0:18:06.720 services at Disney plus, Hulu and UM and ESPN plus 0:18:06.760 --> 0:18:10.720 have at least over well over a hundred million subscribers 0:18:10.720 --> 0:18:13.480 in the United States. Get the wrong enough and thank 0:18:13.480 --> 0:18:31.119 you so much. Well. The first major cold snap for 0:18:31.320 --> 0:18:33.480 the Northeast is coming this week. That usually gets the 0:18:33.480 --> 0:18:35.520 attention of energy traders to get a sense of what's 0:18:35.560 --> 0:18:37.480 going on in the global energy markets. We welcome our 0:18:37.480 --> 0:18:41.360 good friends Stephen Short uh Short Group President Stephen, thanks 0:18:41.359 --> 0:18:42.920 so much for joining us so give us a sense 0:18:42.920 --> 0:18:44.439 of just kind of what we're seeing in the natural 0:18:44.520 --> 0:18:47.440 gas and maybe even other energy spaces as we get 0:18:47.480 --> 0:18:50.360 this cold blast of air coming across the U S. Well. 0:18:50.400 --> 0:18:53.240 Absolutely in the natural gas market, which we are we 0:18:53.359 --> 0:18:55.880 are and continue to be in a structural long term 0:18:55.960 --> 0:18:59.160 bear market. We've had a significant rally over the last 0:18:59.240 --> 0:19:04.120 two weeks. This was created by in the oversold condition. 0:19:04.200 --> 0:19:06.959 That is to say, speculators on Wall Street had greatly 0:19:07.040 --> 0:19:10.800 oversold this market when we UH judge their risk ratio 0:19:10.920 --> 0:19:15.480 relative to the CFTC data. So you juxtapose that oversouled 0:19:15.520 --> 0:19:19.120 condition with the first major blast of cold air, and 0:19:19.160 --> 0:19:22.320 that was quickly priced into the futures markets. So we've 0:19:22.320 --> 0:19:25.920 had a significant rally in the gas market leading up 0:19:25.960 --> 0:19:29.280 into the close of last week. We just got the 0:19:29.280 --> 0:19:33.800 new CFTC data out on this past Friday. The bears 0:19:33.840 --> 0:19:36.119 have been squeezed out of the market. The risk ratio 0:19:36.440 --> 0:19:40.199 is lower, so this the the bullish short squeeze in 0:19:40.240 --> 0:19:43.520 the market is now over. So you take that short 0:19:43.560 --> 0:19:46.280 squeeze out of the market. And yes, we're getting hit 0:19:46.359 --> 0:19:49.280 with the cold right now, but keep in mind these 0:19:49.280 --> 0:19:52.240 are futures markets, so we're looking at, okay, what is 0:19:52.280 --> 0:19:55.880 the next shoot a drop. And although we're seeing very 0:19:55.920 --> 0:19:58.800 cold or about to see very cold attempts in some 0:19:58.920 --> 0:20:02.439 key gas fuel market areas over the next week, the 0:20:02.600 --> 0:20:06.320 forecast beyond one week out is much more moderate. So 0:20:06.480 --> 0:20:09.159 we had a significant sell off or a correction, that 0:20:09.320 --> 0:20:11.760 is to say, in the oil markets to start off 0:20:11.880 --> 0:20:14.040 this week. Got it. And so in other words, it 0:20:14.080 --> 0:20:17.160 sounds like unless there's another cold spat uh, you think 0:20:17.200 --> 0:20:20.639 that probably things are going to go down or flat 0:20:20.720 --> 0:20:24.240 from here for that gas, absolutely, Lisa, I think we're 0:20:24.480 --> 0:20:26.879 sending up to the same scenario we saw last winter. 0:20:27.440 --> 0:20:30.000 Last winter when you you got some cold in in 0:20:30.040 --> 0:20:32.000 the forecast you got some cold winter, we saw a 0:20:32.119 --> 0:20:35.159 twenty cent rally in the market. You take that cold 0:20:35.160 --> 0:20:38.520 out of the market, then we saw correction and we 0:20:38.640 --> 0:20:42.280 yow yowed all of last winter. And it wasn't until 0:20:42.280 --> 0:20:45.800 we got into the spring of last UH last year 0:20:46.000 --> 0:20:48.359 when the floor from underneath the market fell out and 0:20:48.720 --> 0:20:52.000 natural gas prices crashed. We're now going into the peak 0:20:52.040 --> 0:20:53.919 demand season, So yes, this is going to be a 0:20:53.920 --> 0:20:56.919 market that lives and dies with the weather forecast. All right, 0:20:56.960 --> 0:21:00.240 So that's natural gas. Let's turn to crude, and I've 0:21:00.240 --> 0:21:04.080 been seeing a number of stories about how shale producers 0:21:04.119 --> 0:21:07.639 are planning to reduce their spending next year UH, planning 0:21:07.680 --> 0:21:10.680 a cut production. Further, we're hearing some about even the 0:21:11.119 --> 0:21:14.879 deep water drillers planning to potentially do the same. Do 0:21:14.920 --> 0:21:18.040 you think that this will change the dynamic with respect 0:21:18.119 --> 0:21:24.240 to what people had been talking about the oversupply within crude. Yeah. Absolutely. 0:21:24.280 --> 0:21:28.400 I think the market is is far too focused on demand. 0:21:28.480 --> 0:21:32.200 That is to say about the ongoing offgoing talks with 0:21:32.320 --> 0:21:36.000 China and the tariffs. No one's really the narrative really 0:21:36.040 --> 0:21:38.280 hasn't been on to supply, and I think that will 0:21:38.359 --> 0:21:41.000 change in the new year. Lisa. As we go in 0:21:41.119 --> 0:21:44.440 and we look at for instance, uh rid counts, red 0:21:44.520 --> 0:21:48.320 counts are now at two plus year lows. But the 0:21:48.400 --> 0:21:51.200 problem there is we're much more efficient, We're better at 0:21:51.240 --> 0:21:54.919 producing with less, so we're still getting oil onto the market. 0:21:55.200 --> 0:21:59.080 The biggest, biggest concern for this market in twenties twenty 0:21:59.119 --> 0:22:03.159 is the in some odd forty billion dollars of debts 0:22:03.560 --> 0:22:07.160 that is now coming due in the oil patch. Remember 0:22:07.240 --> 0:22:12.320